Esso Petroleum Co Ltd v Commissioners of Customs and Excise (1976)

Case Facts of Esso Petroleum v Customs Excise 1976

In order to increase their sales, Esso Petroleum made commemorative coins, considered as collector's item coins. These coins were given to the motorist who gassed up four gallons from Esso Petroleum.

The production of the said coins was considered by the Commissioner of Customs and Excise as part of the general sales of the company. With this on hand, these coins are taxable items.

Case Issue:

The issue of the case is whether or not Esso has the intent to legally bind the company to the motorists, through their offer. 

Case Decision:

The court decided that there was an intention from Esso Petroleum to bind the company, with legalities, through the promise executed from the coins. Therefore, the coins declared as freebies by the company, are taxable items.

Case Reasons:

The reason behind the court's decision is that the coins offered by Esso Petroleum were only towards their customers. From this view, the offer paves way for the company to increase its financial benefit from the customers.

Even though the coins were declared as gifts, the promise to give these free gifts entitles the company for financial gain, which makes the promise as having the intention to be bound legally.