18th Street Leader Stores v. United States

• Decision Date: 03 May 1944
• Docket Number: No. 8344.,8344.
• Citation: 142 F.2d 113
• Parties: 18TH STREET LEADER STORES, Inc., v. UNITED STATES.
• Court: U.S. Court of Appeals — Seventh Circuit

142 F.2d 113 (1944)

18TH STREET LEADER STORES, Inc., v. UNITED STATES.

No. 8344.

Circuit Court of Appeals, Seventh Circuit.

May 3, 1944.

Otto Oplatka, of Berwyn, Ill., Kenneth Carroad, of New York City, and Oplatka, Pavek & Oplatka, of Berwyn, Ill. (Bessie R. Dreyer, and Clifford H. Rich, both of New York City, on the brief), for appellant.

J. Albert Woll, U. S. Atty., of Chicago, Ill., and Samuel O. Clark, Jr., Sewall Key, and Homer Miller, Asst. Attys. Gen., A. F. Prescott and Fred J. Neuland, Sp. Assts. to the Atty. Gen., and John B. Stephan, Asst. U. S. Atty., of Chicago, Ill., for appellee.

Before SPARKS, MAJOR, and KERNER, Circuit Judges.

SPARKS, Circuit Judge.

This appeal, like that in New York Handkerchief Co. v. United States, 7 Cir., 142 F.2d 111, is from a judgment dismissing the complaint in an action to recover floor stock taxes paid under the Agricultural Adjustment Act of 1933. The refund was denied in this case on the ground that the claim was a duplicate of an earlier one filed by the same claimant and that Article 302 of Regulations 96, promulgated pursuant to § 903 of the Revenue Act of 1936, permitted only one claim to be filed by any person for refund of floor stock taxes, and also that it was barred by the statute of limitations as provided by § 3774 of the Internal Revenue Code, 26 U.S.C.A. Int.Rev.Code § 3774.

Claim was filed for refund on December 9, 1936, and, to satisfy the requirement of § 903 of the Act, 7 U.S.C.A. § 645, that "all evidence relied upon in support of such claim shall be clearly set forth under oath," appellant set forth the following:

"The burden of the Floor tax was borne by the claimant and not shifted to others in the amount, as set forth on the previous schedules, of $2,218.32.

"The following evidence is submitted:

"For the fiscal year ended January 31, 1934 gross profits on sales were 30.42%; whereas, for the fiscal year ended January 31, 1935 the gross profits were 30.33%.

"Further it is our contention that we did not increase the selling price of the merchandise on those items wherein the floor stocks tax was paid."

After receipt of the claim, the commissioner sent five letters to the claimant advising it of the insufficiency of the claim as filed, and stating that action on the claim would be suspended to enable the claimant to submit the required evidence. The third letter, in reply to one from the claimant requesting that a revenue agent be assigned to investigate the claim, stated that no field investigation was conducted until the claimant had submitted all available facts and figures tending to establish that he bore the burden of the tax. When no further evidence was submitted in response to these letters, the commissioner, on May 17, 1938, notified the claimant of the rejection of the claim on the ground that he was without authority to consider it favorably in the absence of evidence sufficient to establish that it had borne the burden of the tax for which the refund was requested.

On December 31, 1939, appellant filed a new claim for refund of the same taxes claimed December 9, 1936. In support of this second claim, it attached a letter from its president stating under oath that the tax had been borne by it and not shifted to others, and that it maintained books of account which reflected the true operation of the business. It also attached the affidavits of three employees to the effect that they had been in the employ of the claimant for varying periods of time and that each knew of his or her own knowledge that the sales prices to the customers of the claimant of merchandise of cotton content had not been increased subsequent to August 1, 1933, and that, therefore, to the best of his or her knowledge and belief, the processing tax had been borne by the claimant and not shifted to the vendee. This claim was rejected by the commissioner on the grounds stated above, duplicity and limitations.

In its complaint filed in the District Court, appellant alleged the filing of the claim of December 31, 1939, and its rejection by the commissioner. Appellee moved to dismiss on the ground that the court was without jurisdiction to hear and determine the merits for the reasons that appellant had not filed a proper claim for refund nor submitted any evidence to the commissioner to prove that it bore the burden of the taxes and had not been relieved thereof, and further that the complaint was filed by appellant more than two years after the date of mailing of notice of disallowance of the claim by the commissioner.

It is clear that under the decisions of this court in Weiss v. United States, 7 Cir., 135 F.2d 889, and New York Handkerchief Co. v. United States, 7 Cir., 142 F.2d 111, and also Samara v. United States, 2 Cir., 129 F.2d 594, and Jaubert Bros. v. United States, 5 Cir., 141 F.2d 206, both claims filed by appellant were wholly inadequate and insufficient to furnish the basis for the allowance of refund by the commissioner. There was therefore, no error in their rejection on that ground, as contended by appellee in its motion to dismiss. The second claim, however, the one upon which suit was filed, was rejected,...