55 Pa. Commw. 509 | Pa. Commw. Ct. | 1980
Opinion by
In this action, addressed to our original jurisdiction, Dan Maurice and Barbara Jean Myers (Petitioners) seek a declaratory judgment as to the constitutionality of Section 339 of the Tax Reform Code of 1971 (Tax Code),
The facts and procedural history of proceedings to date before the Department’s Boards of Appeals and Finance and Revenue, though complex, are important to an understanding of the instant case. On October 9, 1979 the Department issued to each of the Petitioners jeopardy assessments for personal income tax, interest and penalties in the amount of $45,338.30 due for the years 1978 and 1979. Petitioners were also assessed for sales tax in the amount of $266,050.71 for the time period beginning on January 1, 1978 and ending on September 30, 1979. Petitioners filed timely petitions with the Board of Ap
On or about January 24, 1980 Petitioners filed appeals from the sales tax assessments with the Department’s Board of Appeals. Petitioner Dan Myers also requested a hearing on the necessity of a bond requirement issued pursuant to Section 277 of the Tax Code, 72 P.S. §7277. The bond requirement in the amount of $320,000.00 was upheld by the Board of Appeals. The Department’s brief indicates that the Board of Appeals denied Petitioners’ appeals from the sales tax assessments and that further appeals to the Board of Finance and Bevenue were filed on July 7,1980.
The issues presented for our consideration by the Department’s preliminary objections may be summarized as follows: (1) is this matter within the exclusive jurisdiction of the Department thereby rendering declaratory relief unavailable; (2) if not, may declaratory relief be rendered where other proceedings are pending before the Department involving the same parties and issues; and (3) is declaratory relief otherwise available to determine the constitutionality of tax statutes ?
We believe that this case warrants some preliminary discussion of the recently enacted Declaratory
Despite the admitted breadth of availability of relief under the Act an important limitation must be considered as it relates to the instant case. Section 7541(e)(2) of the Act provides that “[r]elief shall not be available under this [Act] with respect to any: . . . [proceeding within the exclusive jurisdiction of a tribunal other than a court.” The Board of Appeals and Board of Finance and Revenue each qualifies as a “tribunal other than a court.”
We agree with the Department that the constitutional challenge presented is within the exclusive jurisdiction of the Department’s administrative tribunals. The Tax Code provides an appeal procedure for challenges to sales and personal income tax assessments.
We also recognize, however, that a statutory remedy cannot be made to cover matters beyond its scope. Lashe v. Northern York County School District, supra. It is significant to the instant case that certain challenges to the constitutionality of tax statutes have been considered as beyond the jurisdic
Constitutional challenges to tax statutes which go to the heart of the power to tax have been held to be beyond the scope of statutorily prescribed remedies. In Greentree, supra, it was reasoned that while statutory remedies are not rendered inappropriate merely because a constitutional issue is raised, an administrative agency cannot determine the constitutionality of its own enabling legislation. Similarly in the Delaware Valley case, supra, wherein a declaratory judgment petition was held to be appropriate, the constitutional challenge presented was to the power of the legislature to grant an exemption from the tax in question.
It is our opinion that Petitioners’ constitutional challenge to Section 339 of the Tax Code is not one which goes to the basic validity of the tax statute. Petitioners’ argument in support of their petition relies exclusively upon the Delaware Valley case, supra. That case is clearly distinguishable from the instant case because, again, petitioners there were challenging the legislative authority to grant particular sales tax exemptions. The Petitioners here allege certain procedural defects in the statute, a challenge which though not insubstantial if found to be valid, is not one which administrative tribunals are incompetent to adjudicate.
We therefore hold that this matter is within the exclusive jurisdiction of the Department’s administrative tribunals as prescribed by the Tax Code. Pursuant to Section 7541(c)(2) of the Act declaratory relief is therefore unavailable. Since Petitioners now have appeals pending before the appropriate tribunal, their attack on the constitutionality of Section 339 of the Tax Code has been fully protected and will be adjudicated for our further review, if necessary.
Having found that we lack jurisdiction, it is unnecessary to address Petitioners’ other arguments or the Department’s remaining objection.
Order
And Now, this 22nd day of December, 1980, the preliminary objection of the Department of Revenue is sustained on the ground that this Court lacks subject matter jurisdiction and the petition for a declaratory judgment is hereby dismissed.
Petitioners also request that we declare several other provisions of the Tax Code to be unconstitutional. Having found no allegations in support of this request we are unable to determine on what basis the provisions are challenged. Accordingly, we are constrained to consider only the challenge to Section 339 of the Tax Code.
The relief requested in this petition was similarly requested in the petition for a preliminary injunction filed by Petitioners with this Court on March 21, 1980. The petition was denied on April 28, 1980. An appeal from the denial is presently pending before our Supreme Court. Although we are mindful of the pending appeal we believe that it does not preclude our consideration of the matters now before us. Bee Pa. R.A.P. 311(a)(4)(e).
Tlie reassessments resulted in lowering the 1978 assessment and raising the 1979 assessment for a new total personal income tax due in the amount of $30,977.02.
The Act, in part, derives from or reenacts the former Uniform Declaratory Judgments Act, 12 P.S. §831 et seq., repealed by Section 2(a) of the Judiciary Act Repealer Act, Act of April 28, 1978, P.L. 202, 42 P.S. §20002(a) [1063].
Thus, the Act extends beyond the significant liberalization of the availability of declaratory relief marked by Friestad v. Travelers Indemnity Co., 452 Pa. 417, 306 A.2d 295 (1973) wherein alternative legal and equitable remedies were held not to preclude declaratory relief while the existence of special statutory remedies did preclude such relief and were to be strictly pursued.
Section 102 of the Judicial Code, 42 Pa. C. S. §102 defines a tribunal as “[a] court, district justice or other judicial officer
Both appeal routes begin with the Department’s consideration of requests for reassessment. Subsequent review is provided by the Board of Finance and Revenue with a final right to appeal to the Commonwealth Court. See Sections 232, 234, 235, 340, 341, 342 of the Tax Code, 72 P.S. §§7232, 7234, 7235, 7340, 7341, 7342.
Petitioners challenge Section 339 on the ground that it “is unconstitutional because the Act fails to provide procedural safeguards, such as hearings and notices, and further, that said Act is arbitrary, capricious, and unconscionable.”
Another pertinent case is Philadelphia Life Insurance Co. v. Commonwealth, 410 Pa. 571, 578, 190 A.2d 111, 115 (1963), overruled on other grounds insofar as inconsistent with Moyle v. Pennsylvania Department of Highways, 479 Pa. 384, 388 A.2d 709 (1978) in which our Supreme Court held an administrative remedy to be inadequate where the action “directly attacks the constitutionality of the tax statute and the want of power in the legislature to levy such a tax.” Although this case and the Greentree case involved actions in equity we believe that the same reasoning is applicable here. See Delaware Valley, supra.
We do not address the issue of whether other constitutional challenges to tax statutes would be sufficient to divest an administrative tribunal of its exclusive jurisdiction. Our holding is limited to the challenge presented in the petition now before us.