American Bank Stationery Co. v. State

Decision Date19 July 1950
Docket Number199.
Citation75 A.2d 86,196 Md. 22
PartiesAMERICAN BANK STATIONERY CO. v. STATE.
CourtMaryland Court of Appeals

Charles E. Quandt, Baltimore (Carlyle Barton, Carlyle Barton, Jr., and Niles, Barton, Yost and Dankmeyer, all of Baltimore, on the brief), for appellant.

Harrison L. Winter, Asst. Atty. Gen. (Hall Hammond, Atty. Gen., on the brief), for appellee.

Before MARBURY, C J., and DELAPLAINE, COLLINS, GRASON, HENDERSON and MARKELL JJ.

GRASON, Judge.

The appellant was sued in the Superior Court of Baltimore City by the State of Maryland for an additional assessment on its income tax returns for the years 1941 to 1947, both inclusive. It admitted the increased assessment for the years 1945 to 1947 inclusive, and paid the same, so that this suit involves increased assessment for the years 1941 to 1944, inclusive.

To the declaration filed by the State, in its first plea appellant admitted as due, the amount claimed for the years 1945, 1946 and 1947. Its second plea was the general issue plea. Its third plea was that the cause of action did not accrue within three years before the filing of the suit, and in its fourth plea it set up that the additional income taxes for the years 1941 to 1944, both inclusive, were not assessed by the Comptroller of the Treasury of the State of Maryland within three years from the respective dates on which the income tax returns of the defendant for said fiscal years were originally due or filed, as required by the provisions of the Maryland Income Tax Law; that said additional assessment for said fiscal years is invalid, illegal and void ab initio.

The State demanded a bill of particulars of the second plea, and filed a demurrer to the third and fourth pleas. The appellant answered the demand for particulars of its general issue plea and set up the matters contained in its fourth plea as particulars of its general issue plea. The State then demurred to the general issue plea as particularized, and the court sustained the demurrer. The State then moved for a summary judgment, which motion was granted, and judgment entered for the plaintiff for $3067.95, with costs. From this judgment the case comes here on appeal.

The Code 1939, Article 81, sec. 247 (Revisions and Appeals), provides: 'As soon as practicable after each return is received, the Comptroller shall examine and audit it. If the amount of tax computed by the Comptroller shall be greater than the amount returned by the taxpayer, the excess shall be assessed by the Comptroller (within three years from the date the return was originally due or filed, except in the case of failure to file a return or of a fraudulent or incomplete return in which case the excess may be assessed at any time), and a notice of such assessment shall be mailed to the taxpayer. In the event the taxpayer is dissatisfied with his assessment, he may within thirty days from the date of notice, appeal to the State Tax Commission, and upon such appeal being noted all papers relating to the assessment shall be transmitted by the Comptroller to the State Tax Commission. The State Tax Commission shall set a date within a reasonable time for public hearing, and, on the basis of the law and the facts the State Tax Commission shall sustain the original assessment or make a new assessment. The determination by the State Tax Commission shall be prima facie evidence of the amount of tax due, and the State Tax Commission shall give the taxpayer written notice of the assessment of tax, interest and penalties. Nothing herein shall prevent the taxpayer from appealing from the finding of the State Tax Commission in the manner provided by law for appeals from said Commission in the exercise of its appellate jurisdiction, and the provisions of Sections 194 et seq. of this Article are hereby made applicable in the enforcement of this subtitle.'

It is the contention of the appellant that the provisions in the section of the Code cited, that 'within three years from the date the return was originally due or filed', is a condition precedent, and as that time elapsed the Comptroller had no authority in law to revise a return duly filed with that officer. The State contends (1) that a revision of a return so made by the Comptroller cannot be attacked in a collateral proceeding, but only in the mode provided in the section referred to, and (2) that the limitation in the section referred to amounts only to a statute of limitations and should be specially pleaded.

The record in the case shows that notice of the revision made in the returns of the appellant was duly mailed to it within the time prescribed by law, and there is no denial that it received the notice. No argument of a failure to receive due notice, by the appellant from the Comptroller, of the excess assessments upon the returns in question was made in this court; that question is, therefore, not involved in this case. The various returns were fully made and there is no semblance of fraud involved here.

The Comptroller has full power to revise and correct an income tax return of a taxpayer. In this case the Comptroller found that the method used by the appellant for the computation of tax due for the respective years was wrong. It was his duty to make the correction and increase the assessment based on his view of what was the proper way to compute the tax. The appellant had a right to appeal to the State Tax Commission from the action of the Comptroller, and if not satisfied with its action, it could have appealed to the Baltimore City Court, and from the action of that court, it could have appealed to this court.

Sec. 194, Art. 81, Supplement to Code, 1947. This procedure, prescribed by law, was ignored by the appellant. It did not appear before the Comptroller in order to make known to that officer its reasons why the increased assessments should not be made, and took no appeal whatever from the action of the Comptroller. The action of the Comptroller, therefore, was final and the appellant could not collaterally attack the same in this case.

Gitting v. Baltimore City, 95 Md. 419, 52 A. 937, 938, 54 A. 253, involved a bill in equity to restrain the collection of certain taxes on property located in Baltimore City. The City demurred to the bill, which was sustained by the lower court, and that action was affirmed by this court. The City relied on what was then section 170 of the City Charter, which provided that 'any person aggrieved because of any assessment made by the Appeal Tax Court, or because of its failure to reduce or abate any existing assessment, may by petition appeal to the Baltimore City Court to review the assessment. * * *' That section provided in detail the procedure to be followed by the taxpayer. It is strikingly similar to the procedure set up in section 247 of Article 81 of the Code. Referring to the section of the Charter, the court in that case said: '* * * the plaintiff had an ample remedy in a court of law which has sole and exclusive jurisdiction for the purpose of review of said assessment and valuation, and that, having failed to avail himself of that remedy, he must abide by the action of the appeal tax court in reference to said assessment.'

The court, in that case, quoted from the opinion of this court in Allegany County Commissioners v. Union Mining Company, 61 Md. 545, as follows: "It is only when the tax itself is clearly illegal, or the tribunal imposing it has clearly exceeded its powers, or the rights of the taxpayers have been violated, that the interposition of the special remedy by injunction can be invoked, and only then when no appellate tribunal has been created with power to remedy the wrong."

The court, in the Gittings case, also quoted from Friedenwald v Shipley, 74 Md. 220, 21 A. 790, 24 A. 156: "It is too well settled to admit of further discussion that a Court of equity cannot undertake the decision of questions which the law has confided to another tribunal especially designated...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT