385 Pa. 370 | Pa. | 1956
Opinion by
The Commonwealth appeals from the final decree of the Dauphin County Court declaring invalid and setting aside a settlement and resettlement of the appellee’s corporate net income tax for the fiscal year ended November 30, 1943. The court’s action was based on the failure of the tax officers to comply with Section 8 (a) of the Corporate Net Income Tax Act, the Act of April 8, 1937, P. L. 227, 72 PS §3420h. (a) which reads: “(a) All taxes due under this act shall be settled by the department, and such settlement shall be subject to audit and approval by the Department of the Auditor General and shall, so far as possible, be made so that notice thereof may reach the taxpayer before the end of a year after the tax report was required to be made.”.
The case was heard without a jury. By agreement of counsel all of the material and relevant facts were submitted to the court in a written stipulation from which it appeared: On March 7, 1944 appellee filed its corporate net income tax report for 1943 upon which it computed and paid a tax thereon in the amount of $100.70; on March 13, 1946 appellee filed a report of change and paid an additional tax of $4.65 as a result of changes made in its net income by the Federal Government; notice of settlement was mailed to appellee on August 2,1951 [more than 7 years after the filing of the taxpayer’s report] when it was informed that on
Appellee appealed to the Dauphin County Court which, after hearing and argument, filed an opinion and order directing'judgment-to be entered in favor of the Commonwealth “. . . in the amount of $105.35, which judgment having been overpaid shall be marked satisfied ; and, further, a credit of $735.48 is hereby directed to be entered in favor of the . . . Allied Building Credits, Inc., on the proper books and records of the Department of Revenue and the Department of the Auditor General, unless exceptions are filed within the time limited by law... . ” . Exceptions were filed by the Commonwealth which were dismissed by the court en banc which filed an opinion and decree affirming the order theretofore entered. This appeal followed.
“Appellee [appellant in this Court] contends that Section 8(a) does not ‘impose’ the tax, and, therefore, it does not have to be strictly construed. Whether or not the specific section of the law involved ‘imposes’ the tax need not be decided in view of the rule set forth by the Supreme and Superior Courts of Pennsylvania in a great number of cases. In Scranton v. O’Malley Mfg. Co., 341 Pa. 200, 204, 205 (1941) it is stated: ‘. . . Liability to pay taxes arises from no contractual relation between the taxable and the state and cannot he enforced by common law proceedings unless a statute so provides. They can be collected in no other way than that provided by the statute: Schmuck v. Hartman, 222 Pa. 190, 195, 70 A. 1091; Leopold Tax Assessment Case, 118 Pa. Superior Ct. 158, 163, 179 A. 904. Tax statutes should receive a strict construction: Boyd v. Hood, 57 Pa. 98. In cases of doubt the construction should be against the government: Gould v. Gould, 245 U. S. 151, 153, 38 S. Ct. 53; U. S. v. Merriam, 263 U. S. 179, 188, 44 S. Ct. 69; Com. v. P. R. T. Co., 287 Pa. 190, 196, 134 A. 455. While it is the duty of every citizen io bear his just share in supporting the government, he cannot be compelled to do so except in a way provided by a statute. This gives rise to a rule in tax law, of general application, that whatever the law requires to ■be done for the protection of the taxpayer is usually mandatory and cannot be regarded as merely directory: Black on Tax Titles, Sec. 198.’ See also Phila. v. Goldfine, 151 Pa. Super. 59, 62 (1942) ; Speck v. Philips, 160 Pa. Super. 365, 368 (1947) ; Sauer Appeal, 167 Pa.
“In Com. v. Repplier Coal Co., 348 Pa. 372 (1944) part of the Corporate Net Income Tax Law was under attack; in that case the provisions of the statute relating to settlement and the filing of consolidated reports by corporate taxpayers were under consideration. In a per curiam opinion the Supreme Court said: ‘The judgment of the court below is affirmed on the able and comprehensive opinion of President Judge Hargest.’ The opinion of President Judge Hargest, reported in 53 Dauphin 191 (1942) states: ‘In approaching these questions, it must be remembered that this is a taxing statute which must be strictly construed. We are not dealing with exemptions, as the Commonwealth has •suggested, but with the essential right to the tax. Any doubt or uncertainty as to the imposition of the tax must be resolved in favor of the taxpayer. Commonwealth v. Chester County Light & Power Co., 48 Dauphin 1, 5; Commonwealth v. Quaker City Cab Co., 29 Dauphin 90, 287 Pa. 161, 277 U. S. 389; Commonwealth v. Philadelphia Rapid Transit Co., 287 Pa. 190, 196; Gilberton Borough School District v. Morris, 290 Pa. 7; Krause’s Est., 325 Pa. 479; Arbuckle’s Est., 324 Pa. 501; Barber’s Est., 304 Pa. 235, 240. The words imposing the tax should be clear and unambiguous (Commonwealth v. P. W. & P. Co., 271 Pa. 456, 458); nor can words be extended by implication. Gould v. Gould, 245 U. S. 151, 153; United States v. Merriam,
“A further question, however, arises as to the construction to be placed upon the words ‘so far as possible’ as used in Section 8(a) which states: ‘. . . such settlement . . . shall, so far as possible, be made so notice thereof may reach the taxpayer before the end of a year after the tax report was required to be made.’ The meaning of the term ‘so far as possible’ has never been specifically construed by a Pennsylvania Court, either in the present context or in relation to any other statute. In Eichenhofer v. Phila., 248 Pa. 365, 372 (1915), the word ‘possible’ was held to be coupled with and modified by the words ‘reasonable’ and ‘natural, probably, or likely.’ Section 33 of the Statutory Construction Act, May 28, 1937, P. L. 1019 (46 P.S. 533), provides that words and phrases which have not acquired a peculiar and appropriate meaning or definition ‘. . . shall be construed according to rules of grammar and according to their common and approved usage. . .’ Black’s Law Dictionary (4th Ed.) defines the word ‘possible’ as: ‘Capable of existing, happening, being, becoming, or coming to pass; feasible, not contrary to the nature of things; neither necessitated nor precluded; free to happen or not, contrasted with necessary and impossible.’ Applying this definition to the phrase ‘so far as possible’ we find it capable of the following construction: so far as capable of happening, so far as capable of coming to pass, so far as feasible, contrasted with necessary and impossible. From this analysis it is apparent -that the
“Appellee contends that the burden of proving a settlement was possible within one year is on the taxpayer, not on the Department of Revenue. With that contention we cannot agree. In construing a statute the courts must keep in mind that the Legislature is not presumed to have intended an absurd or unreasonable result: Altieri v. Allentown Officers and Emp. Retirement Board, 368 Pa. 176, 182 (1951); good sense and practical utility must be considered, Pottsville Referendum Case, 363 Pa. 460, 467 (1950) ; statutes should receive a sensible construction and should be construed, if possible, so that absurdity and mischief may be avoided, Sun Shipbuilding & Dry Dock Co. v. Unemp. Comp. Board of Review, 358 Pa. 224, 233 (1948). See also Act of May 28, 1937, P. L. 1019, sec. 52 (1) (46 P.S. 552 (1)) ; Burgis v. County of Phila., 169 Pa. Super. 23, 25 (1951) ; Duddy v. Conshohocken Printing Co., 163 Pa. Super. 150, 155 (1948). To place the burden on the taxpayer to prove that a settlement was possible within one year does mischief to his rights. It would place on him the task of investigating and inquiring into the administrative departments of the state government in an effort to disclose or unearth facts which would show that the settlement could have been effected within one year. This would cause unnecessary expense and effort to which the taxpayer should not be subjected. Further, it could conceivably result in utter confusion, with many taxpayers checking state agencies and records in an attempt to prove that settlements could have been made within one
“The 'Commonwealth-appellee finally contends the presumption that all things done by a public official are done properly and regularly and that a public official has done his duty should apply in the instant case. We are aware of this presumption; however, since the settlement was not made within one (1) year, from the stipulated facts it is apparent that the duty placed on the Department of Revenue was not performed regularly or properly. It is difficult to see how the Commonwealth could attempt to make a reasonable explanation of its delay until the year 1951 in the making of a settlement of a tax report for the year 1943 or the taxpayer’s Report of Change filed in 1946, and the Commonwealth has not and does not now attempt to do so. Therefore, the presumption relied upon by the Commonwealth is rebutted.
“At the argument before the Court en banc, the Deputy Attorney General representing the Commonwealth made the startling contention that should the Commonwealth under Section 8(a) wait for 50 or 75 years before making a retroactive tax claim or ‘settlement’, no defense could validly be made by the taxpayer against such procedure, even though no reason were given by the Commonwealth for such delay. Our answer to this contention is found in the language of the Supreme Court, speaking through Mr. Justice Kephart in East Lake Road and Payne Ave., 309 Pa.
‘Here the nature of the action was to impose a charge for street benefits from widening and paving a street. The time designated in the act for the report to be filed was one of the essentials of the proceeding as it affected property owners. It was also part of an orderly procedure designated by the legislature to establish the legality of the lien. Its nonperformance had a grave tendency to imperil the rights of those affected, for after the time thus limited the act gave to such persons another limited period, thirty days, in which to appeal to the courts. If the provision relative to the time wherein the report was to be filed was directory,
“The Commonwealth also relies upon Com. v. Western Md. Rwy. Co., Applnt, 377 Pa. 312 (1954), which affirmed the opinion of this court speaking through Judge Richards in 63 Dauphin Co. 153. In that case the Commonwealth had a valid explanation and an unavoidable cause for delay in malting settlements within the time required. . . .”.
Decree affirmed at the cost of appellant.
The tax report was required to be made on March 15, 1944.