State ex rel. Conn v. Robinson

MR. CHIEF JUSTICE HARRISON: Respondent herein, relator in the district court, filed his personal income tax return for the year 1948 on or before April 15, 1949, with the State Board of Equalization and paid the amount of tax he computed to be due thereon. On May 5, 1953, the State Board of Equalization made demand upon respondent for additional tax alleged to be due for the year 1948, and on June 5, the Board mailed to respondent a final notice and demand for the additional tax it had found to be due, together with penalty and interest thereon, which amount the respondent paid on June 12, under protest, notifying the Board that he would file claim for refund. On July 24, 1954, respondent filed his claim for refund which claim was disallowed on August 18. On September 11, he applied for a writ of certiorari in the district court and that court set the application for hearing for September 24, and ordered [551] notice thereof to be given to the Board. The Board appeared by filing objections which were deemed by the court to be without merit and the writ was issued on September 24, returnable on October 22. On October 20, the Board filed a demurrer and motion to quash, together with a transcript of the record and proceedings in the matter of the income tax in dispute. On December 6, the demurrer was overruled and the motion to quash denied. On December 13, respondent filed a motion for judgment based upon the record returned by the Board on the ground the determination of additional income tax was unlawful, invalid, void, in excess of the Board’s authority, and in violation of section 84-4920, R.C.M. 1947. The Board resisted the motion, alleging the respondent had failed to pursue his administrative remedies prior to the application for the writ as required by sections 84-4922 and 84-4923, R.C.M. 1947, and contending that the provisions of section 84-4920, R.C.M. 1947, were directory only and not a statute of limitations. The hearing was thereafter set for January 20, 1955. Following the hearing and on January 21, the district court adjudged that the Board was without jurisdiction, right or authority to assess the additional income tax against the respondent and that the assessment was unlawful, invalid, void, in excess of the Board’s authority, and in violation of section 84-492Ó, R.C.M. 1947. From this adjudication the Board appeals. While many specifications of error are set forth by the appellant Board, they resolve themselves into two questions. (1) Is section 84-4920, R.C.M. 1947, a statute of limitations? and (2) Did the respondent exhaust his administrative remedies before he made application for the writ? The first ground was considered by this court in State ex rel. Anderson v. State Board of Equalization, 133 Mont. 8, 319 Pac. (2d) 221. In that case, this court held that while section 84-4920, R.C.M. 1947, did not constitute a statute of limitation, it was a limitation upon the authority of the Board to ■reassess returns after the expiration of three years from the date the return was made. No purpose would be served herein by [552] a discussion of this point and what has been said in the Anderson ease has application here. As to the second ground, it is the contention of the Board that the provisions of section 84-4923, R.C.M. 1947, require that notice of application for a writ of certiorari must be given within thirty days after the service of the notice of revision or resettlement of the computation of tax. The Board contends that the record shows that the notice of tax determination was given on or about May 15, 1953, and that it was not until September 13, 1954, that the respondent gave notice of application for the writ. It is true that on or about May 15, 1953, the Board notified the respondent that his 1948 return had been audited and certain income had not been reported and that adjustment had been made and additional tax was due. This additional tax was paid by the respondent under protest on June 12, 1953. Within the two years granted by section 84-4922, the respondent applied for a revision by filing a claim on July 24, 1954, which claim set forth the contended invalidity of the assessment. This claim was filed on a form provided by the Board for refund of tax illegally collected. Since no particular form of application is required we hold this was a sufficient compliance with the statute. The Board was then required to grant a hearing thereon unless it agreed with the contentions of the taxpayer. In this cause no hearing was granted and the Board elected to reject the claim, which it did on August 18, 1954. In our view this rejection constituted the determination of the Board upon the application for revision made by the respondent and could be reviewed by the district court under the provisions of section 84-4923, R.C.M. 1947, and within the thirty-day limitation provided by that section, and on September 11, 1954, the respondent applied for the writ. In these circumstances, there is no merit in the second contention of the Board, in that the respondent did exhaust his administrative remedies before he made his timely application for the writ. [553] For these reasons the judgment is affirmed. MR. JUSTICES CASTLES and ANGSTMAN, and THE HONORABLE ERNEST E. FENTON, District Judge (sitting in place of MR. JUSTICE BOTTOMLY), concur.