American Distilling Co. v. Johnson
| Decision Date | 01 April 1955 |
| Citation | 132 Cal.App.2d 73,281 P.2d 598 |
| Court | California Court of Appeals Court of Appeals |
| Parties | The AMERICAN DISTILLING COMPANY, Plaintiff and Appellant, v. Charles G. JOHNSON, as Treasurer of the State of California, George R. Reilly, William G. Bonelli, Jerold L. Seawell, James H. Quinn and Thomas H. Kuchel, as members of and constituting the State Board of Equalization, Defendants and Respondents. Civ. 16237. |
Norman A. Eisner, Haskel Titchell, San Francisco, for appellant.
Edmund G. Brown, Atty. Gen., James E. Sabine, Asst. Atty. Gen., Ernest P. Goodman and Sho Sato, Deputy Attys. Gen., for respondents.
This is an action for refund of excise taxes imposed under Section 24 of the Alcoholic Beverage Control Act, Deering's General Laws, Act 3796, hereinafter called the Act. Defendants, Treasurer of the State of California and members of the State Board of Equalization, had judgment, after their demurrer to the amended complaint on the ground that it did not state a cause of action was sustained without leave to amend, and plaintiff appeals.
The allegations of the amended complaint relevant to the appeal are to the following effect:
On January 31, 1952 a determination of additional alcoholic beverage excise taxes and interest was served on plaintiff with respect to sales made by plaintiff in 1950. All the beverage upon which the claim was based were sold for export and actually exported from this State within 30 days from the date of the sale, partly through common carrier, partly in vehicles owned by the purchasers. With respect to each of said sales plaintiff had filed its claim for excise tax exemption on SBE Form 244B in compliance with the instructions of the State Board of Equalization (herein further called the Board) but plaintiff was at the time said sales were made, unaware of the requirement of the Board with respect to the filing of SBE Form 260 for proof of sales exported in vehicles owned by the purchaser. On February 11, 1952 plaintiff filed with the Board a petition for redetermination of the above additional tax. Prior to the hearing of said petition plaintiff became aware of the requirement as to SBE Form 260 and furnished to the Board proof of exportation upon said form. The Board granted plaintiff's petition with respect to those beverages which had been exported by common carrier, but denied it with respect to those exported in vehicles owned by the purchasers, notwithstanding the fact that the sale for export and the actual export within 30 days from the sale were proved to the satisfaction of the Board, but solely because plaintiff had not filed Form 260 at the time provided for. Plaintiff paid, under protest the additional tax upheld and filed with the Board a claim for refund, which refund was denied.
It is further alleged that the additional tax was illegally collected, because the exported beverages on which it was based were tax exempt under Sections 24.2 and 24.25 of the Act, the claim of exemption had duly been filed on Form SBE 244B, the full report on SBE Form 260 as to said sales had been filed prior to the hearing for redetermination of tax, the failure to furnish proof on said Form 260 promptly or at all is by Section 24.2 of the Act made presumptive only of taxable sale within the State not conclusive and does not cause forfeiture of the claim of exemption, and the action of the Board which made the presumption conclusive is contrary to law and beyond the jurisdiction of the Board.
The question decisive of the correctness of the sustaining of the demurrer without leave to amend is whether the facts alleged in connection with the matters of which the court takes judicial notice show that by not filing Form 260 at the time provided for appellant as a matter of law forfeited its claim of exemption. The courts take judicial notice of the rules of the Board. § 1875, subd. 3, Code of Civil Procedure; Anders v. State Board of Equalization, 82 Cal.App.2d 88, 98, 185 P.2d 883. On demurrer all matter of which the courts take judicial notice must be read into the pleading even when the pleading contains an express allegation to the contrary. Chavez v. Times-Mirror Co., 185 Cal. 20, 23, 195 P. 666. The demurrer does not admit the truth of conclusions of law pleaded. Connecticut General Life Ins. Co. v. Johnson, 8 Cal.2d 624, 629, 67 P.2d 675.
The regulation as to Form 260 was and is contained in Rule 54a of the Board (California Administrative Code, Title 4, Chapter I) which reads:
'Licensees of other States desiring to make purchases of alcoholic beverages in California for export in private vehicles owned or operated by the out-of-State licensee, shall apply to the board for an identification permit on application forms prescribed by the board.
'The identification permit issued by the board must be presented to the California taxpayer at the time of making purchases of alcoholic beverages in California, at which time the California taxpayer must complete SBE Form 260, Report of Sale of Alcoholic Beverages for Export.
'Claims for tax exemption, where delivery is made to the purchaser in this State, will be allowed only upon completion of the foregoing procedure.'
It has been held in San Francisco Brewing Corp. v. Johnson, 110 Cal.App.2d 479, 243 P.2d 53, 55, that a provision of the Act that certain claims for exemption from excise tax must be made to the board "in such manner as the Board shall prescribe", authorized the Board to prescribe the procedure for such claims; that Rule 54 was within the authority so granted and in the absence of a showing to the contrary must be construed to be a reasonable and valid exercise thereof. Where no attempt was made to comply with Rule 54, the exemption was held to have been forfeited and the sustaining of a demurrer to the complaint without leave to amend was upheld. The case related to excise tax on beer and therefore involved other sections of the Act, but as these sections are to the same effect as those here involved this does not influence its authority for this case. However, it does not appear that the arguments urged in this case for the illegality of the effect given to Rule 54a were considered in the San Francisco Brewing Corp. case and the fact that here the Forms 260 were furnished to the Board, although later than provided for in Rule 54a, whereas no attempt of compliance was made in the cited case, might be a distinguishing feature.
The sections of the Act here involved read, Section 24.2: 'It shall...
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