Charlton Press, Inc. v. Sullivan

• Decision Date: 28 October 1965
• Citation: 153 Conn. 103,214 A.2d 354
• Court: Connecticut Supreme Court
• Parties: CHARLTON PRESS, INC., et al. v. John L. SULLIVAN, Tax Commissioner. Supreme Court of Errors of Connecticut

Page 354

214 A.2d 354

153 Conn. 103

CHARLTON PRESS, INC., et al. v. John L. SULLIVAN, Tax Commissioner.

Supreme Court of Errors of Connecticut.

Oct. 28, 1965.

Robert Kapusta, Milford, with whom were William K. Bennett, Ansonia, and, on the brief, Richard S. Bruchal, Ansonia, for appellants (plaintiffs).

Ralph G. Murphy, Asst. Atty. Gen., with whom, on the brief, were Harold M. Mulvey, Atty. Gen., and Walter T. Faulkner, Asst. Atty. Gen., for appellee (defendant).

Before KING, C. J., and MURPHY, ALCORN, SHANNON and HOUSE, JJ.

HOUSE, Associate Justice.

In this case the plaintiffs are separate corporations, Charlton Press, Inc. and Charlton Publishing Corporation. The writ, summons and complaint describes the former as a Connecticut corporation and the latter as a New York corporation authorized to do business in this state. In a single complaint they alleged separate causes of action and separate claims for relief, although it does not appear that their respective claims for relief arose out of the same transaction or series of transactions. See Practice Book § 50. The record does not disclose that any objection was raised to this misjoinder but does disclose the hazards of disregarding the basic rules of practice and pleading. The state of the record requires us to consider separately the appeal of each corporation, and we do so, considering first the appeal of Charlton Publishing Corporation. In the interests of brevity, we will refer to that plaintiff as Publishing and the coplaintiff as Press.

The relatively narrow issue presented by Publishing's appeal is determined by an interpretation of §§ 12-233 and 12-226 of the General Statutes and the predecessors of these two statutes in effect during the respective tax years ending January 1, 1943, through January 1, 1951. ¹ The precise question is whether the three-year limitation provided in § 12-233 and its predecessors for the examination and correction of errors in corporation business tax returns applies to the assessment and collection of an additional tax determined by the state tax commissioner to be due as a result of changes, adjustments or corrections by any official or agency of the United States government in the subject corporation's returns to the federal collector of internal revenue in accordance with the provisions of § 12-226 and its predecessors.

The case of Publishing was decided in the Court of Common Pleas upon a stipulation of facts which recites that, contrary to the designation in the writ and summons, the corporation is a Connecticut corporation. According to the stipulation, Publishing timely filed its corporation business tax returns for the respective fiscal years ending January 1, 1943, to and including January 1, 1951. Within three years after the defendant tax commissioner received each return, he examined it for errors and made no corrections. On or about October 21, 1957, Publishing was notified by the federal bureau of internal revenue that adjustments and changes had been determined in respect to its net taxable income for each of the fiscal years in dispute. Publishing did not notify the tax commissioner of these adjustments and changes and did not make any amended returns or file any affidavits disclosing to the tax commissioner the federal adjustments and changes. In August, 1959, the tax commissioner received information from the federal bureau of internal revenue that it had determined adjustments and changes in Publishing's net taxable income for the years in question, whereupon the tax commissioner requested Publishing to file affidavits disclosing the federal adjustments and changes. Publishing refused to file such affidavits. In October, 1959, an employee of the tax commissioner secured copies of the federal adjustments and changes, and, on the basis of them, the tax commissioner recomputed the state tax and billed Publishing for the additional taxes. It paid the additional taxes under protest and brought this action seeking a return of the moneys paid under protest and a declaratory judgment that it was not indebted to the state for the years in question. The trial court rendered judgment for the tax commissioner and found that the collection of the additional taxes was legal, warranted and correct, that Publishing was not entitled to a return of any of the money paid under protest and that it was indebted to the state for the tax years in question.

It is the claim of Publishing that the tax commissioner is barred from collecting any additional tax by the provision now contained in § 12-233 of the General Statutes which requires the commissioner within three years after the due date for filing a return to examine it and, in case any error is disclosed, notify the taxpayer within thirty days after such disclosure.

We find no merit in this contention. By its express terms, that three-year limitation applies to examination of a corporation's annual tax return for any errors which may be disclosed by such examination. It is obvious that an examination of the original state tax return will not disclose any changes, adjustments or corrections by the federal tax authorities in the federal return. On the other hand, § 12-226 of the General Statutes logically requires an amended return or affidavit from the taxpayer after such changes have been made by the federal agency, and the same section expressly provides under such circumstances a different limitation of time within which the tax commissioner must notify the corporation of the amount of any additional tax. This limitation is 'within a reasonable time.' It is elementary that statutes should be construed so that no part of a legislative enactment is to be treated as insignificant and unnecessary, and there is a presumption of purpose behind every sentence, clause or phrase in a legislative enactment. State ex rel. Sloane v. Reidy, 152 Conn. 419, 424, 208 A.2d 674. 'It is a well-settled principle of construction that specific terms covering the given subject-matter will prevail over general language of the same or another statute which might otherwise prove controlling.' Kepner v. United States, 195 U.S. 100, 125 24 S.Ct. 797, 49 L.Ed. 114 (quoted in Oles v. Furlong, 134 Conn. 334, 342, 57 A.2d 405, 409).

Nor does the legislative history of § 12-226 support Publishing's contentions. Until 1943 there were combined in a single section of the statutes (Cum.Sup.1939, § 359e) a requirement (now General Statutes § 12-225) that a corporation file a supplemental return to report any items erroneously or intentionally omitted in its original return and a requirement (now General Statutes § 12-226) that a corporation make an amended return to report any change or adjustment made by the federal tax authorities. In 1943 the legislature in § 298g of the 1943 Supplement for the first time provided a three-year limitation for the commissioner's examination of an original return. This provision is now General Statutes § 12-233. At the same session the legislature separated § 359e of the 1939 Cumulative Supplement into two statutes. The portion concerning supplemental returns to report errors or omissions (now General Statutes § 12-225) became a separate section of the statutes as § 295g of the 1943 Supplement and for the first time included a provision that supplemental returns must be filed within three years from the due date of the original return. The portion of § 359e requiring an amended return to report changes by any federal agency was amended and enacted as a separate section of the statutes (Sup.1943, § 296g [now General Statutes § 12-226]), and for the first time made provision for the time within which the tax commissioner must notify the corporation of any additional tax. The time fixed in § 296g of the 1943 Supplement was not three years as the General Assembly provided in §§ 298g and 295g but was expressly provided to be 'within a reasonable time from the receipt of such amended return.' That 'reasonable time' limitation has continued without change. In the present case, Publishing failed to comply with the statutory requirement that it file an amended return or affidavit disclosing the federal changes. Owing to its own default in not filing amended returns or affidavits, not even the reasonable time limitation on action by the tax commissioner has begun to run.

While further discussion of Publishing's contentions is unnecessary, we are constrained to comment on the reliance which its brief places upon quotations at length from the statements of witnesses appearing before legislative committees considering the statutes here involved. '[D]iscussions and statements made before a committee of a...