Cherokee Brick & Tile Co. v. Redwine

• Decision Date: 13 April 1953
• Docket Number: No. 18052,18052
• Citation: 209 Ga. 691,75 S.E.2d 550
• Parties: CHEROKEE BRICK & TILE CO. v. REDWINE, State Revenue Com'r et al.
• Court: Georgia Supreme Court

Page 550

75 S.E.2d 550

209 Ga. 691

CHEROKEE BRICK & TILE CO. v.REDWINE, State Revenue Com'r et al.

No. 18052.

Supreme Court of Georgia.

April 13, 1953.

Syllabus by the Court.

1.Under our law any ambiguity in an alleged exemption from taxation must be construed favorably to the State and against the taxpayer.

2.The collection of sales tax does not impair the obligation of a contract entered into prior to the tax act, where delivery and payment are made after the effective date of the act.

Cherokee Brick & Tile Company filed its action against Charles D. Redwine, as the duly qualified and acting State Revenue Commissioner, to recover $1,801.50 with interest.The petition, as amended, alleged On or about January 25, 1951, the plaintiff and General Electric Company, in Atlanta, entered into a bona fide written contract whereby General Electric Company agreed to ship to the plaintiff two described locomotives at and for a contract price of $60,050.One was shipped on August 30, 1951, and a sales tax in the amount of $627 was remitted, under protest, by the plaintiff to General Electric Company.On or about October 18, 1951, the other locomotive was shipped to the plaintiff, and a sales tax in the amount of $1,174.50 was added to the invoice price and paid by the plaintiff, under protest, to General Electric Company.The amount of the sales taxes collected from the plaintiff has been actually paid to the State of Georgia.The collection of the tax was illegal and erroneous, in that the sale described is excluded from the tax levied by the Retailers' and Consumers' Sales and Use Tax Act of 1951 under section 3, subd. 2(e) of that act.Ga.L.1951, p. 366, CodeAnn.Supp. § 92-3403a, subd. C(2)(e).The plaintiff has filed a claim for refund, and his claim for refund has been denied.If the provision of the act as cited is not construed to exempt the aforesaid sale, then the act as to 'goods contracted to be purchased and sold' prior to the act would be in violation of article 1, section 3, paragraph 2 of the Constitution of the State of Georgia,Code Ann. § 2-302, and in violation of article 1, section 10, clause 1 of the Constitution of the United States, Code, § 1-134.The prayers were for process, service, and the recovery of the amount paid as sales tax.

The defendant's general demurrer to the petition, as amended, was sustained, and the exception is to that judgment.

Hall & Bloch and Bloch, Hall, Groover & Hawkins, Macon, for plaintiff in error.

Eugene Cook, Atty. Gen., Lamar Sizemore, George E. Sims, Jr., M. H. Blackshear, Jr., and F. H. Boney, Asst. Attys.Gen., for defendant in error.

HEAD, Justice.

1.Subsection 2(e) of section 3 of the 'Retailers' and Consumers' Sales and Use Tax Act', approved February 20, 1951.Ga.L.1951, pp. 360-387, CodeAnn.Supp. § 92-3403a, subd. C(2)(e), provides: 'The tax levied by this Act shall not apply to sales of goods made pursuant to bona fide written contracts entered into before the date of the approval of this Act, or the purchase price of any building supplies, fixtures or equipment that enter into or become a part of building or other kind of structure in this State, where plans, specifications and construction contract for a specific project has been entered into prior to the date of approval of this Act, provided delivery is made within 90 days.'

It is contended by the plaintiff that if a tax statute is of doubtful meaning, it must be construed liberally in favor of the taxpayer and against the taxing authority.This § a well-established rule in this State.Mayor, etc., of City of Savannah v. Hartridge, 8 Ga. 23(6);Trustees of First Methodist Episcopal Church, South v. City of Atlanta, 76 Ga. 181, 182(3-b); Case-Fowler Lumber Co. v. Winslett, 168 Ga. 808, 809, 149 S.E. 211;State of Georgia v. Camp, 189 Ga. 209, 210, 6 S.E.2d 299;Warren v. Suttles, 190 Ga. 311, 314, 9 S.E.2d 172;Forrester v. Interstate Hosiery Mills, 194 Ga. 863, 867, 23 S.E.2d 78;Thompson v. Eastern Air Lines, Inc., 200 Ga. 216, 224, 39 S.E.2d 225.

In the present case, however, the plaintiff is not relying upon the vagueness or uncertainty of a statute levying a tax.On the contrary, the plaintiff is seeking to claim the benefit of a proviso contained in the Retailers' and Consumers' Sales and Use Tax Act, which purports to grant an exemption from taxation.Under these facts, an entirely different rule is applicable.The exemption from taxation must be strictly construed, 'and the exemption will not be held to be conferred unless the terms under which it is granted clearly and distinctly show that such was the intention of the Legislature.'Mayor, etc., of City of Macon v. Central Railroad & Banking Co., 50 Ga. 620;Atlanta Street Railroad Co. v. City of Atlanta, 66 Ga. 104, 110;Athens City Waterworks Co. v. Mayor, etc., of City of Athens, 74 Ga. 413;Mundy v. Van Hoose, 104 Ga. 292, 297, 30 S.E. 783;Tarver v. City of Albany, 160 Ga. 251, 257127 S.E. 856;Standard Oil Co. of Kentucky v. State Revenue Commission, 179 Ga. 371, 372(7), 176 S.E. 1;State Revenue Commission v. Brandon, 184 Ga. 225, 228, 190 S.E. 660;Campbell v. Red Bud Consolidated School District, 186 Ga. 541, 546(3), 198 S.E. 225;Rayle Electric Membership Corp. v. Cook, 195 Ga. 734(2), 25 S.E.2d 574;Thompson v. Atlantic Coast Line R. Co., 200 Ga. 856, 38 S.E.2d 774.

As a general rule, there is a presumption that a proviso in a statute will apply only to the preceding provision.This general rule, however, is subject to the rule that all parts of a statute, including provisos, are to be construed together, and that construction adopted which is consistent with, and not repugnant to, the purposes of the act.50 Am.Jur. 459, 460, §§ 438-440.The purpose of the act under consideration is, unquestionably, to levy a tax.The proviso as to delivery within ninety days relates by the punctuation used, and by the arrangement of the wording therein, to the entire subject matter preceding the limitation as to time of delivery.

It is clear from subsection 2(e) of section 3 of the act that the General Assembly did not exempt from taxation written contracts entered into before the time of the approval of the act.If the Assembly had wanted to make such exemption, all that was required was the placing of a period after the word 'Act' in the third line.A period marks the end of a declarative sentence, and had a period been used after the word 'Act,' a different result might have been obtained.By the use of the comma after the word 'Act,' and after referring to building supplies, fixtures, equipment, plans, specifications, etc., in which the only punctuation used is a comma, it is clear that the final proviso is just as much a part of the language relating to written contracts as it is to that having reference to building supplies, fixtures, etc.

The rule stated in Crawford v. Burke, 195 U.S. 176, 177, 25 S.Ct. 9, 49 L.Ed. 147, to the effect that courts will read statutes with such stops as will give effect to the whole, and with little regard to the punctuation thereof, if applied in the present case, cannot benefit the plaintiff.If subsection 2(e) of section 3 of the act is read as written, with the commas therein, or with the commas omitted, the result is the same.For sales on written contracts and building supplies to be exempt from the taxing provisions of the act, delivery must have been made within ninety days.

2.The plaintiff strongly relies upon Murray v. City of Charleston, 96 U.S. 432, 24 L.Ed. 760.In the Charleston case the city had issued certificates bearing interest at 6 percent, payable in quarterly payments.Thereafter the city proposed to tax the certificates and withhold from the interest payments the amount of the tax.The plaintiff in that case was a resident of Bonn, Germany, and was the holder of a large amount of the certificates of indebtedness.The ruling of the Supreme Court, as stated by this court in Mayor, etc., of City of Macon v. Jones, 67 Ga. 489, 493, was to the effect that the city must pay the interest due before the power to tax could...