Rogan

Section 602% of the Revenue Act of 1934 ( 26 U.S.C.A. § 999 ) levies a processing tax of 3 cents per pound on certain oils, including coconut oil, sesame oil, palm oil, palm kernel oil, and sunflower oil. It also levies an additional tax of 2 cents per pound on coconut oil. This tax, however, does not apply to coconut oil produced in the Philippine Islands.

The plaintiff by its bill of complaint attacks the processing tax of 3 cents and seeks a determination both under the equity powers of the court and under the declaratory judgment statute ( 28 U.S.C.A. § 400 ) that it is an unconstitutional exaction and penalty and not a tax. Injunctive relief is sought against its collection.

The complaint discloses the following facts: The plaintiff is a manufacturer of soaps, operating a manufacturing plant in the city of Los Angeles, where the process of manufacturing is carried on wholly in intrastate commerce. It has a large establishment representing a large investment, and for thirty-seven years prior to the year 1935, its business was conducted at a substantial profit. In 1934, the bill states, it was able to make a profit merely because it had on hand large quantities of vegetable…