Brown v. New York State Tax Comm.
Decision Date | 05 July 1950 |
Court | New York Supreme Court |
Parties | Oscar J. Brown, Plaintiff,<BR>v.<BR>New York State Tax Commission, Defendant. |
Nathaniel L. Goldstein, Attorney-General (John C. Crary, Jr., of counsel), for defendant.
Brown, Mangin, O'Connor & Greene for plaintiff.
This action is brought by plaintiff for both declaratory and injunctive relief against the defendant with respect to an assessment of additional personal income tax against the plaintiff for the year 1946. The defendant has moved to dismiss the complaint on the ground that such an action is not maintainable for the reasons that no cause of action for equitable relief by way of an injunction is made out where there is an adequate, complete and exclusive remedy at law, and that declaratory judgment may not be resorted to for review of tax assessments in the face of the exclusive statutory procedure provided by section 375 of the Tax Law.
The complaint alleges in substance: that plaintiff filed an income tax return with defendant for the year 1946 on or before April 15, 1947, showing a taxable income of $14,346.77 on which he paid a tax of $182.29; that, with certain exceptions, a limitation has been placed upon the right of defendant by section 373 of the Tax Law to determine the tax due the State of New York from any taxpayer after the expiration of three years from the time the income tax return was made; that prior to April 15, 1950, the defendant requested plaintiff to consent that said time limitation for the determination of the tax due for the year 1946 be extended until the year 1952, which plaintiff refused to do; that thereafter plaintiff received from the defendant a "notice of additional assessment" purporting to have been made pursuant to the authority granted by section 373 of the Tax Law, which added $5,553.23 to the net income of the plaintiff as shown by the return previously filed by him, making a total of $19,900; that said additional assessment was not based on any facts, figures or information of any kind in possession of the defendant and was not made as the result of any audit or examination whatever and that by reason thereof the assessment was wholly illegal, fictitious and capricious; that there was no basis whatever for the opinion reached by defendant in arriving at the amount of the additional assessment; that the sole purpose of the same was to procure for defendant an extension of time in which to make a new determination of the taxes claimed to be due in the year 1946 as well as to examine plaintiff's books and accounts; that defendant by such illegal, arbitrary and capricious assessment seeks to compel plaintiff, after such period of limitation has expired, to present to it his records and books to show such arbitrary assessment is not correct and to place upon plaintiff the burden of proving the illegality thereof; that the right so asserted by defendant can only exist by a strained and forced construction of said section 373 of the Tax Law which has never been judicially interpreted to include the rights so claimed by the defendant; that the additional tax assessed against plaintiff carries a penalty as well as interest until paid; that defendant claims such arbitrary and capricious acts constitute a valid and lawful assessment of tax which can only be revised and reviewed in accordance with the provisions of sections 374 and 375 of the Tax Law; that plaintiff has no adequate remedy at law.
Section 373 of the Tax Law provides in part as follows:
The procedure for administrative review upon hearing of additional assessments is contained in section 374 of the same law. It states:
Section 375 defines the procedure to review a determination of the Tax Commission as follows:
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