Consumer Contact Co. v. State, Dept. of Revenue

• Decision Date: 15 January 1980
• Docket Number: No. 61273,61273
• Citation: 592 S.W.2d 782
• Parties: CONSUMER CONTACT COMPANY, Plaintiff-Appellant, v. STATE of Missouri, DEPARTMENT OF REVENUE, Defendant-Respondent.
• Court: Missouri Supreme Court

Page 782

592 S.W.2d 782

CONSUMER CONTACT COMPANY, Plaintiff-Appellant, v. STATE of Missouri, DEPARTMENT OF REVENUE, Defendant-Respondent.

No. 61273.

Supreme Court of Missouri, En Banc.

Jan. 15, 1980.

Robert W. Henry, Clayton, for plaintiff-appellant.

John Ashcroft, Atty. Gen., J. Kent Lowry, Asst. Atty. Gen., Jefferson City, for defendant-respondent.

WELLIVER, Judge.

This appeal is from a judgment of the circuit court upholding the approval by the Department of Revenue ("Department") of certain sales tax assessments. Appellant alleges that the determination of the Department was not supported by competent and substantial evidence because no evidence of the existence and terms of alleged taxing ordinances on which the agency relied was introduced in the hearing before the agency. The case was transferred after opinion from the Court of Appeals, Eastern District, and we decide it as though on original appeal. Mo.Const. art. V, § 10. We find that the determination by the Department in this case is not supported by competent and substantial evidence. We reverse.

Appellant, Consumer Contact Company, is a corporation organized under Missouri laws, with its principal place of business being at 11039 Manchester Road in the City of Kirkwood in the County of St. Louis. Appellant sells small desk items, such as desk pads, pen sets, calendars, and clocks. Appellant's customers place their orders at appellant's business location, and the merchandise is shipped directly from appellant's out-of-state suppliers to appellant's customers located within Missouri.

An auditor of the Department performed a sales and use tax audit for the period from January 1, 1974 to December 31, 1975, on the books and records of appellant. The audit revealed that appellant collected and remitted state sales taxes on sales amounting to $987,707.00, but that appellant had made other taxable sales amounting to $20,411.00 on which appellant had not collected and remitted state sales taxes. On this amount, the auditor calculated that appellant owed $612.33 in state sales taxes plus $151.59 in interest. The audit also disclosed that appellant had made sales amounting to $941,812.00 between January 1, 1974, and December 31, 1975, on which appellant had not collected the alleged 1% Kirkwood City Sales Tax or the alleged 1/2% St. Louis County Transportation Sales Tax. Accordingly, the auditor calculated that appellant owed $9,418.12 in Kirkwood City Sales Taxes plus interest of $1,320.12, and $4,709.07 in St. Louis County Transportation Sales Taxes plus interest of $660.08.

On April 22, 1976, the Sales and Use Tax Bureau of the Missouri State Department of Revenue levied an assessment against appellant for state sales tax, Kirkwood City Sales Tax, and St. Louis County Transportation Sales Tax in accordance with the auditor's findings. After an informal hearing held May 4, 1976, the Director of Revenue approved the assessments.

Appellant filed a petition for reassessment with the Department in accordance with § 144.240, RSMo 1978. Appellant alleged that the assessment was made on items not subject to the city or county sales taxes because the sales were not made in the City of Kirkwood or the County of St. Louis, that the city and county ordinances did not provide for the payment of interest, that the statute of limitations on some of the subject sales had run, and that both the City of Kirkwood by a letter dated October 27, 1971, and the Missouri Sales Tax Division by a letter dated September 10, 1973, had instructed appellant that shipments from outside Missouri to buyers in Missouri but outside Kirkwood were not subject to the Kirkwood City Sales Tax.

At the hearing on the petition for reassessment held on July 22, 1977, the Department presented only one witness, Charles Jaegers, auditor for the Department. Mr. Jaegers testified that he made the audit of appellant's records and identified his audit report, which was introduced into evidence. He testified that appellant had made sales which in his opinion were made in the City of Kirkwood and County of St. Louis without collecting or remitting the Kirkwood City Sales Tax or the St. Louis County Transportation Sales Tax, and that the total assessment due from appellant was $16,871.31. The respondent offered no further evidence. Appellant declined to present evidence and promptly moved that the case be dismissed for failure to prove facts necessary to make a submissible case. The motion was overruled.

On August 31, 1977, the Department issued a final decision affirming the original assessment with the addition of $2,358.31 in updated interest charges. Appellant paid under protest the Kirkwood City Sales Tax of $9,418.12 plus interest of $1,320.12 and the St. Louis County Transportation Sales Tax of $4,709.07 plus interest of $660.08 and the updated interest of $2,358.31. Appellant paid without protest the state sales tax of $612.33 plus interest of $151.59.

On September 14, 1977, appellant filed in the Circuit Court of St. Louis County its petition for review of the decision of the Department of Revenue. Appellant alleged that

(a) The decision is unsupported by competent and substantial evidence upon the whole record in that there was no showing that a city sales tax existed or was properly enacted by the City of Kirkwood nor that a transportation sales tax existed or was properly enacted by St. Louis County; and for the further reason that no evidence was presented concerning the ability to add interest to a city sales tax or a county transportation tax, if any such tax existed.

(b) The findings of fact and conclusions of law on which the decision is based are not supported by any substantial evidence.

The Circuit Court of St. Louis County entered its judgment on February 8, 1978, finding that the decision of the Department was supported by competent and substantial evidence on the record as a whole.

Appellant filed its notice of appeal on March 1, 1978. The transcript from the circuit court failed to include the findings of fact and conclusions of law of the Department. Appellant set out the Department's findings of fact and conclusions of law in its brief in the court of appeals. Respondent acknowledged in its brief that "(a) copy of the final decision appears on page 5 of Appellant's Brief."

The Court of Appeals, Eastern District, filed an opinion December 27, 1978, which would affirm the trial court's decision on the ground that since the findings of fact and conclusions of law were absent from the record, the appellate court could not determine whether the Department's order was supported by competent and substantial evidence. The court of appeals declined to treat the transcript as supplemented by the findings of fact and conclusions of law quoted in appellant's brief and admitted by respondent. Appellant's motion for rehearing or transfer to this Court was denied by the court of appeals on February 16, 1979. On April 11, 1979, an order was entered sustaining appellant's application to transfer the cause to this Court.

The answers to four questions are determinative of all issues: (1) are the findings of fact and conclusions of law of the Department before us on appeal; (2) is the evidence in the record sufficient to sustain the Department's order; (3) can the courts take judicial notice of city and county ordinances and (4) can we remand the case to the Department for the purpose of taking additional evidence?

I

In oral argument before this Court the parties were questioned extensively regarding the accuracy of the findings of fact and conclusions of law as set forth in the briefs. Their accuracy was conceded. We therefore will treat the transcript as supplemented by the findings of fact and conclusions of law of the Department as set out in full in appellant's brief. In re Marriage of Schulz, 583 S.W.2d 735, 737 n. 3 (Mo.App.1979); City of Perryville v. Brewer, 557 S.W.2d 457, 460 (Mo.App.1977); Rawlings v. Taylor, 477 S.W.2d 737, 739 (Mo.App.1972). ¹

II

In determining whether administrative findings are supported by competent and substantial evidence upon the whole record, this Court may consider only the record that was before the administrative body. Missouri Real Estate Commission v. Steger, 509 S.W.2d 47, 49 (Mo.banc 1974); State ex rel. Favazza v. Ketchum, 367 S.W.2d 542, 546 (Mo.1963); Gore v. Wochner, 558 S.W.2d 333, 334 (Mo.App.1977); § 536.140.2, RSMo 1978; Rule 100.07(b)(3).

It is clear that the text of the ordinance is not in the evidence presented to the Department of Revenue. The Department thus has no evidence to support the existence or terms of the alleged ordinances. Without the ordinance in evidence, there is insufficient evidence in the record to sustain the findings of the Department. City of St. Louis v. Roche, 128 Mo. 541, 31 S.W. 915 (1895). The reasoning of the cited case may be appropriately adapted to the instant case:

If there was any such ordinance as that described in the (assessment) it should have been introduced in evidence, without which there was no evidence to support the finding and judgment of the (agency). The failure to read the ordinance in evidence did not go to the weight of the evidence merely, but without it there was an entire failure of evidence. Without it there is nothing upon which the judgment . . . can stand. It was the very foundation upon which the (assessment) was bottomed, and the only guide by which it could possibly be determined whether defendant(§ sales were subject to) it or not, and which could not be determined otherwise than by its production in court, as a matter of evidence.

128 Mo. at 544, 31 S.W. at 916. Appellant has not stipulated to the existence, terms or applicability of the alleged taxing ordinances.

III

A court may not take judicial notice of the existence or contents of city or county ordinances. General Motors Corporation v. Fair Employment Practices Division, etc., 574 S.W.2d 394, 400 (Mo...