of the ultimate vendor, (3) the name and address of the consumer, and the use made or to be made of such article, (4) the date the tax on his sale of such article was paid to the United States, and (5) that he has repaid or agreed to repay the amount of such tax to the ultimate vendor, or has obtained the consent of the ultimate vendor to the allowance of the credit or refund. The evidence required in (1), (2), and (3) of the preceding paragraph may be established by the manufacturer securing from the ultimate vendor (a) the original exemption certificate obtained by such ultimate vendor from the consumer, or (b) a sworn statement by the ultimate vendor that he has obtained from the consumer and has in his possession such an exemption certificate.

Where a sworn statement is furnished by the ultimate vendor in lieu of the original exemption certificate, the ultimate vendor must incorporate therein a statement to the effect that the certificate and supporting data (1) are retained by him, (2) will be preserved for a period of four years, and (3) will, upon request, be forwarded to the manufacturer at any time within the period for use in establishing to the satisfaction of internal-revenue officers that a refund or credit justly due.

Section 3442, Internal Revenue Code, 53 Stat. 416, provides that upon compliance with regulations applicable thereto no tax shall be imposed on sales of articles direct from manufacturer to the Government.

Thus, Congress has provided by virtue of these statutory provisions that sales of goods for the exclusive use of the United States shall be exempt, either by way of a tax-free sale or by subsequent refund, from the manufacturer's excise tax contained in chapter 29 of the Code, of which, as above stated, section 551 of the Revenue Act of 1941 is a part. Authority to prescribe the necessary steps to be taken and evidence to be presented in order that such exemption may be obtained is vested in the Commissioner of Internal Revenue who has designated "the original exemption certificate obtained by such ultimate vendor from the consumer" as sufficient for such purposes. Needless to say, the regulations contemplate that an "original exemption certificate" will be issued.

There is no contractual obligation on the Government to issue this tax-exemption certificate since the contract contains no provision for the issuance of exemption certificates and, as pointed out above, the Government as purchaser is not liable for the amount of the tax. However, as appears from the above quoted statute and regulations, a manufacturer must present evidence of the fact that the goods have ultimately been sold to the United States in order that he may obtain a refund-to which the law says he is entitled-of the excise tax previously paid. Consequently, since the manufacturer will shift the burden of the tax to his dealer, to deny a dealer an exemption certificate in these cases will result in the dealer being compelled to bear the burden of a tax which the law contemplates shall not apply to such sales.

The tax exemption certificate does not ex proprio vigore exempt its recipient from the tax. The terms and conditions under which it shall be honored are prescribed by the Commissioner of Internal

Revenue. The certificate itself is merely evidence of the sale of certain goods to the United States. In other words, it is in the nature of a receipt which the law contemplates shall be given, under circumstances such as those in the present case, and for which no contractual provision is necessary. Since, however, it represents the further fact that the price paid for the goods specified thereon did not include any part of the tax, the administrative agency is authorized to issue such certificate only when this fact is conclusively shown or presumed. The manufacturer's excise tax on brief cases was imposed subsequent to the opening of the contractor's bid in the instant case and, therefore, it reasonably may be presumed that the contract price did not include any part of this tax.

Accordingly, for the reasons set forth above, the instructions contained in the preaudit difference statement mentioned in the above quoted letter may be disregarded and no further objection will be made by this office to the issuance of tax exemption certificates to dealer-contractors, under similar circumstances, on purchases under contracts based on bids opened prior to October 1, 1941, the effective date of the Revenue Act of 1941, for use in obtaining credit from the suppliers in the amount of the manufacturer's excise taxes imposed by said act.

(B-26959)

TRANSPORTATION-DEPENDENTS OF DISCHARGED NAVAL RESERVE

* * *

ENLISTED MEN

Under the Naval Appropriation Act, 1942, providing funds for the transportation of dependents of enlisted men of certain grades "when ordered to active duty and upon release therefrom payment is authorized for the transportation of dependents of a Naval Reserve enlisted man incident to his discharge from the Naval Reserve because of physical disability not due to his own misconduct, even though the discharge was not preceded by a release from active duty.

Assistant Comptroller General Elliott to the Secretary of the Navy, July 13, 1942:

There has been considered your letter of June 22, 1942, as follows:

There is forwarded herewith for your consideration the claim of Joseph F. Walton, Yeoman second-class, USNR, for reimbursement in the amount of $44.55, representing the cost of transportation for his dependent wife from Jacksonville, Florida, to Elmhurst, Illinois, incident to Walton's release from active duty and his discharge from the U. S. Naval Reserve under the conditions stated in the enclosed correspondence.

*

The current Naval Appropriation Act approved May 6, 1941 (Public Law 4877th Congress), provides, under the appropriation "Pay, Subsistence, and Transportation of Naval Personnel" for "* transportation of dependents of officers and enlisted men, including those of retired and reserve officers, and of retired and reserve enlisted men of grades entitled to transportation for depend

ents in the Regular Navy, when ordered to active duty (other than training) and upon release therefrom

*

In the present case the travel by claimant's wife was performed after his release from active duty and his discharge from the Naval Reserve due to physical disability on April 30, 1942. It will be noted that the above quoted provision from the current Naval Appropriation Act does not in terms provide for transportation of dependents of Naval Reserve personnel who are released from active duty and discharged from the Naval Reserve.

Your decision is requested as to whether or not an enlisted man of the Naval Reserve is entitled to transportation for his dependents from his last permanent duty station to his home when the separation from the Service is by reason of his release from active duty and his discharge from the Naval Reserve because of physical disability, and not as a result of termination of the requirement of his services.

The order of April 30, 1942, from the Commanding Officer, U. S. Naval Hospital, National Naval Medical Center, Bethesda, Maryland, to Walton is as follows:

1. You are hereby detached from all duties to which you have been assigned and discharged from the Naval Reserve this date and retained for further treatment at St. Elizabeth's Hospital.

2. Upon discharge from the hospital after completion of treatment you are directed to apply to the Disbursing Officer, U. S. Naval Hospital, Bethesda, Md., for transportation and subsistence to the place from which you were recalled to active duty.

3. Your service record shows that you were ordered to active duty from:

136 West Park Ave., Elmhurst, Ill.

(Home address, or place to which orders were addressed)

4. You are directed to register at the local selective service board immediately. A discharge from the Naval Reserve is, of course, a release from active duty, but the statute, 55 Stat. 151, limits the right to transportation of dependents to members of the Naval Reserve "upon release" from active duty and would not include all "discharges" from the Naval Reserve while the member was on active duty. The language, fairly construed, contemplates one released from active duty but who continues a member of the Naval Reserve. Discharges may be for disciplinary or other reasons where the prime purpose is to terminate the status, and it is doubtful that the statute contemplates transportation of dependents in such a situation. However, where the discharge is because of physical disability not due to the man's own misconduct, the fact that such discharge was not preceded by a release from active duty should not deprive a member of the Naval Reserve otherwise within the statute from the benefit intended to be given. If, therefore, the travel of the dependent is within a reasonable time after the separation from the Naval Reserve in the circumstances indicated in this case, and thus is incident to the discharge or release, payment is authorized under the statute.

The papers received with your letter are returned herewith.

(B-27022)

APPROPRIATIONS AVAILABILITY-PHYSICAL EXAMINATIONS OF

CIVILIAN EMPLOYEES

Periodic physical examinations of civilian employees at a chemical warfare laboratory for the protection of the health of the employees by the early detection of arsenic poisoning represent precautionary measures to prevent illness-as distinguished from curative medical treatment-which are primarily for the benefit of the Government as a necessary incident to the successful operation of the laboratory, and, therefore, the expense thereof may be paid from the appropriation, "Chemical Warfare Service, Army, 1942," available for operation of the laboratory, even though such expense is not specifically provided for therein.

Comptroller General Warren to Lt. Col. C. H. Farish, U. S. Army, July 14, 1942: There has been received from the Chief of Finance your letter of March 19, 1942, and supporting papers, requesting decision as to whether you are authorized to make payment on a voucher in the amount of $626 in favor of Dr. Robert C. Kirk for laboratory fees and physical examinations of civilian employees of the Pittsburgh Chemical Warfare Procurement District, employed at the Chemical Warfare Laboratory, Columbus, Ohio, made during the month of January 1942. It is stated that monthly examinations of these employees are contemplated.

Since the civilians are employed at the chemical warfare laboratory apparently they are engaged on work which from time to time brings them in contact with arsenic, and it is the purpose of these periodic examinations to detect cases of arsenic poisoning in their early stages in order that proper steps might be taken to avoid illness, the need for medical treatment, and the consequent loss in working time.

It has been long recognized that the expense of medical treatment for civilian employees of the Government is personal to the employee and that there is no authority for the payment thereof from public funds unless provided for in the contract of employment or by statutory enactment or valid regulation. 6 Comp. Dec. 955; 8 id. 296, 11 id. 177; 16 id. 99; 3 Comp. Gen. 111; 18 id. 533.

There has been found no provision either of statute or regulation specifically authorizing payment of the cost of these examinations from public funds, and, presumably, the contracts of employment of the employees contain no such provision.

However, this office has held that where the circumstances are such that medical attention to an employee-including inoculation or vaccination to which these examinations seem more or less akin in view of their precautionary nature-may be considered as primarily for the benefit of the Government rather than the employee, the expense thereof may properly be paid from appropriated funds. 2 Comp. Dec. 347; 6 id. 447; 60 MS Comp. Dec. 1425; A-29752, December 17,

1929; A-32786, August 8, 1930; A-97344, August 26, 1938. Cf. 15 Comp. Gen. 20.

It unquestionably is of fundamental importance in the war effort that the work of the Chemical Warfare Service be prosecuted without hindrance or interruption of any kind. Were the Government unable or unwilling to provide means for offsetting the ever-present danger of arsenic poisoning the situation might well constitute a serious obstacle in the securing of qualified personnel for this work. The employees themselves could hardly be expected and would most likely be unwilling to incur the expense of these examinations and laboratory tests were the cost thereof not borne by the Government. Not only would the affliction of an employee with arsenic poisoning slow up, to some degree at least, the production of essential war materials but also might have a depressing effect on the morale of fellow workers. It is indicated in the papers attached to the voucher that the services are essential to the successful operation of the laboratory and, consequently, are primarily for the benefit of the Government; that the expense is a reasonable and necessary incident to the manufacture, procurement, and test of articles and materials by the laboratory; and it is understood that the services are incident to preventing illnesses and safeguarding the health of employees rather than the direct furnishing of medical attention to employees who may have become ill by reason of the employment.

The appropriation "Chemical Warfare Service, Army, 1942," which is proposed to be charged with the cost of the services, provides generally for the purchase, manufacture, and test of offensive or defensive materials or appliances, including services connected therewith, including incidental expenses. 55 Stat. 382. Under the circumstances, it appearing that the amount charged is reasonable; that the services represent precautionary and preventative measures rather than curative treatment; and that they primarily are for the benefit of the Government and are a necessary incident to the successful operation of the laboratory, the appropriation involved may be regarded as available for payment for the services and this office will not be required to object to an otherwise proper payment on the voucher presented.

The papers are returned herewith.

(B-27256)

PAY-RESERVE OFFICERS-INACTIVE COMMISSIONED SERVICE FOR PAY PERIOD ADVANCEMENT PURPOSES

A Reserve officer appointed subsequent to July 1, 1922, may not, under the Pay Readjustment Act of 1942, count inactive commissioned service for the purpose of advancement in pay period.