City of Detroit v. Norman Allan & Co.

• Decision Date: 16 June 1981
• Docket Number: Nos. 47596,47597,s. 47596
• Citation: 107 Mich.App. 186,309 N.W.2d 198
• Parties: CITY OF DETROIT, Petitioner-Appellee, v. NORMAN ALLAN & CO., and E.L. Rice & Co., Respondents-Appellants.
• Court: Court of Appeal of Michigan — District of US

Page 198

309 N.W.2d 198

107 Mich.App. 186

CITY OF DETROIT, Petitioner-Appellee, v. NORMAN ALLAN & CO., and E.L. Rice & Co., Respondents-Appellants.

Nos. 47596, 47597.

Court of Appeals of Michigan.

June 16, 1981.

Released for Publication Aug. 26, 1981.

Peter W. Macuga, II, Detroit, for petitioner-appellee.

Brian G. Shannon, Detroit, for respondents-appellants.

Before V. J. BRENNAN, P. J., and KELLY and RILEY, JJ.

RILEY, Judge.

This is an appeal from a final judgment of the Michigan Tax Tribunal in two property tax assessment cases. On December 9, 1975, the City of Detroit filed two petitions regarding property tax assessments against the respondents-appellants. The cases were consolidated for hearing before the Tax Tribunal and are consolidated on appeal.

The petition against Norman Allan & Co. alleged that it incorrectly reported the value of its personal property located in Detroit, and the petition requested that the assessed value for the 1975 tax year be increased from $7,010 to $87,140.

The petition against E.L. Rice & Co. raised numerous allegations. Petitioner alleged that: (1) respondent failed to file a personal property statement with the City of Detroit for the 1974 tax year; (2) the assessed value of respondent's personal property for the 1975 tax year should have been $270,420 instead of $111,260 as reported by respondent; and (3) the assessed value of respondent's personal property for the 1975 tax year was $703,880.

The Tax Tribunal held a hearing on May 7, 1979, and rendered an opinion and judgment on September 17, 1979. The Tribunal increased the assessment against Norman Allan & Co. to $87,140 as no objections were raised at the hearing to the audit valuation. In regard to E.L. Rice & Co., the tribunal ruled that: (1) respondent timely filed a personal property statement for the 1974 tax year; (2) respondent sufficiently proved as to tax year 1975 that the property did not have a situs within Detroit on tax day, December 31, 1974, and that, therefore, the property was not subject to taxation, however, the 1975 statement omitted certain inventory and, therefore, the assessed value was increased to $118,920 from the reported $111,260; and (3) respondent did not sufficiently prove as to tax year 1974 that the property did not have a situs within Detroit on tax day, December 31, 1973, and, therefore, the assessed value should be increased to $703,880.

Respondents appeal as of right from the Tax Tribunal's judgment.

The proper standard of review of the decision by the Tax Tribunal was recently stated in Northwood Apartments v. City of Royal Oak, 98 Mich.App. 721, 724, 296 N.W.2d 639 (1980):

"At the outset, we emphasize that this Court's authority to review a valuation decision of the Tax Tribunal is very limited. We are bound by the factual determinations of the Tribunal. Ironwood v. Gogebic County Board of Comm'rs., 84 Mich.App. 464, 469, 269 N.W.2d 642 (1978). Where, as here, no fraud is alleged, our review is limited to the questions of whether the Tribunal committed an error of law or adopted a wrong principle. Consolidated Aluminum Corp., Inc. v. Richmond Twp., 88 Mich.App. 229, 231, 276 N.W.2d 566 (1979); Consumers Power Co. v. Port Sheldon Twp., 91 Mich.App. 180, 184, 283 N.W.2d 680 (1979), Const.1963, art. 6 § 28."

Thus, this Court is bound by the factual determinations of the Tax Tribunal, and the issue before us is whether the Tribunal committed any errors of law.

Although the parties have raised several issues for our review, we believe that our resolution of one is dispositive of this appeal. That issue is whether the Tax Tribunal erred in concluding that it had jurisdiction to decide this matter. The parties do not dispute the fact that the petitions were filed on December 9, 1975. The dispute concerns interpretation of two statutes which are possibly applicable to the facts of the instant case, M.C.L. § 211.22; M.S.A. § 7.22 and M.C.L. § 211.154; M.S.A. § 7.211.

M.C.L. § 211.22; M.S.A. § 7.22 provides in pertinent part:

"Sec. 22. (Testimony Assessment.) If the supervisor or assessing officer, a member of the state tax commission, or the director or deputy director of the county tax or equalization department as mandatorily established under section 34 of this act shall be satisfied that any statement so made is incorrect * * * (he) is hereby authorized to set down and assess to such person, firm or corporation so entitled to be assessed, such amount of real and personal property as he may deem reasonable and just.

"Whenever examination and investigation reveal that the written statement of personal property is incorrectly made that any data submitted is false, or that certain personal property has been omitted from the statement, the supervisor or assessing officer may petition the state tax commission to revise the personal property assessment of the person submitting such erroneous statement, if the petition is filed on or before June 30 of each year." (Emphasis supplied.)

M.C.L. § 211.154; M.S.A. § 7.211 provides in pertinent part:

"Sec. 154. If it shall be made to appear to the commission at any time that as a matter of fact any property liable to taxation has been incorrectly reported for any previous year, but not to exceed the current assessment year and 1 year immediately preceding the date of discovery and disclosure of the omission, but not prior to the effective date of the 1969 amendment to this section, the commission shall notify by registered mail the person to whom such property is assessable and give such person an opportunity to appear at a hearing before the commission, which hearing shall be held not later than 30 days from the date of notification by mail. If it appears to the commission that no reason in fact or in law exists which would justify an exemption of such property from taxation for those 2 years, it shall immediately place the total aggregate assessment value for the omitted years on the then current assessment roll in the column provided." (Emphasis supplied.)

In the proceedings below, the respondents brought a motion to dismiss based upon the provision in § 22 that the petitions were not filed on or before June 30, 1975, and, thus, were untimely. The City responded (and contends on appeal) that the phrase "may petition" makes § 22 permissive rather than mandatory. According to the City, it was not obligated to proceed under § 22 and, in fact, was not so proceeding. Rather, the City claimed that it was entitled to proceed under § 154 and that it could, therefore, file its petitions after June 30.

We note at the outset that the Michigan Tax Tribunal has replaced the Tax Commission as the reviewing body of assessment disputes and the like. Detroit v. Jones & Laughlin Steel Corp., 77 Mich.App. 465, 258 N.W.2d 521 (1977). In addition, tax statutes are strictly construed. Topps of Warren, Inc. v. City of Warren, 27 Mich.App. 59, 62, 183 N.W.2d 310 (1970). As the Court stated in In re Dodge Brothers, 241 Mich. 665, 669, 217 N.W. 777 (1928):

"The scope of tax laws may not be...