F. M. Sibley Lumber Co. v. Dep't of Revenue

• Decision Date: 04 June 1945
• Docket Number: No. 53.,53.
• Citation: 311 Mich. 654,19 N.W.2d 132
• Parties: F. M. SIBLEY LUMBER CO. v. DEPARTMENT OF REVENUE.
• Court: Michigan Supreme Court

311 Mich. 654

19 N.W.2d 132

F. M. SIBLEY LUMBER CO.

v.DEPARTMENT OF REVENUE.

No. 53.

Supreme Court of Michigan.

June 4, 1945.

Appeal in the Nature of Certiorari from Circuit Court, Ingham County; Charles A. Hayden, Judge.

Proceeding by the F. M. Sibley Lumber Company against the Department of Revenue for repayment of money paid by plaintiff in excess of the just amount of sales taxes due from plaintiff. From a judgment affirming a determination of the State Board of Tax Appeals, on plaintiff's appeal from the department's decision denying repayment, that a refund was due plaintiff, the Department appeals in the nature of certiorari.

Affirmed, and case remanded.

Before the Entire Bench.

John R. Dethmers, Atty. Gen., Edmund E. Shepherd, Sol.Gen., of Lansing, and T. Carl Holbrook and Daniel J. O'Hara, Asst. Attys. Gen., for appellant.

Fildew & DeGree, of Detroit, for appellee.

NORTH, Justice.

This is an appeal by the department of revenue in the nature of certiorari from a judgment of the circuit court of Ingham county affirming a holding of the State board of tax appeals that the department of revenue in this State has jurisdiction to hear and determine the claim of a taxpayer for the repayment of money voluntarily paid in excess of the amount justly due under the general sales tax act. Appellant's position is stated in its brief as follows:

‘The State Board of Tax Appeals is not the proper judicial forum to entertain, hear and determine the petition of appellee (the plaintiff taxpayer) for the return of moneys voluntarily paid as sales taxes under the provisions of the General Sales Tax Act, as amended, by appellee to the appellant over a period of years under a mistake of fact or error in law.’

In the main, decision herein turns upon the soundness of the above-quoted contention. For brevity we herein refer to plaintiff as the taxpayer, to the department of revenue as the department, and to the State board of tax appeals as the appeal board. The statute by which the department and Pub.Acts 1941, Comp.Laws Supp.1943, § 3695-1 et seq., Stat.Ann.1944 Cum.Supp., § 7.657(1) et seq. Section 13 of the act provides:

‘The department shall administer and enforce the following laws as amended and shall succeed to and is hereby vested with all of the powers, duties, functions, responsibilities and jurisdiction now or hereafter conferred upon:

‘(a) State board of tax administration by Act No. 167 of the Public Acts of 1933 and Act No. 77 of the Public Acts of 1935, as amended (general sales tax); also by Act No. 94 of the Public Acts of 1937 (use tax).’

The plaintiff taxpayer sought repayment by the department of a substantial sum of money voluntarily paid by it to the department or its predecessor in excess of the just amount of sales tax which the plaintiff taxpayer should have been required to pay in 1942 and some years prior thereto. The department decided against such repayment. Its decision, as appears from the department's answer to the petition on appeal to the appeal board, was ‘upon the board general principle that they could not recover for taxes voluntarily paid and unaccompaniedby protest.’ But in its brief on this appeal the department also asserts that the statute does not give it authority or jurisdiction to determine a claim such as is asserted in the instant case, or to order payment of such a claim if allowed. After hearing the taxpayer's appeal the appeal board ‘determined that a refund is due the appellant.’ As noted above, this determination was affirmed by the circuit court, and from such judgment this appeal in the nature of certiorari was taken.

At the outset it should be noted that notwithstanding in appellant's brief as first above quoted, the appeal board is referred to as a ‘judicial forum,’ this statutory agency is not a judicial body. Instead it is ‘a tax collection agency’ (see section 1 of the act) with appropriate incidental powers and as such is an administrative, and to some extent an executive, agency of the State. The powers and duties of the department acting through the State commissioner of revenue are set forth in section 3 of the act, which in part reads: ‘The commissioner shall have all the powers and perform the duties formerly vested in any department, board, commission or other agency, in connection with the taxes due to or claimed by the state which herein or hereafter may be made payable to or collectible by the department herein created,’ including certain specified incidental powers not pertinent to decision of the instant case; but such powers are specifically restricted by Act No. 122, § 6a, Pub.Acts 1941, as added by Act No. 190, Pub.Acts 1943, Comp.Laws supp.1943, § 3695-6a (Stat.Ann.1944 Cum.Supp. § 7.657(6a), which reads:

‘Hereafter neither the commissioner, nor any officer or employee of the department, shall in any manner compromise or reduce the tax liability of any person, firm or corporation owing a tax to the state of Michigan. In case the department and the person, firm or corporation owing the tax shall not be in accord with respect to tax liability, the department shall assess and levy the full amount of the tax due under the law, and any person, firm or corporation aggrieved by such assessment may appeal to the state board of tax appeals as provided in section 7 of this act. The provisions of this section shall not be construed to prevent a compromise of interest and/or penalties.’

If attention were confined solely to the above-quoted provisions of the act or even to other portions of its context, excluding references to other legislative acts-particularly the general sales tax act-no provision would be found authorizing the department to refund money voluntarily paid in excess of a lawful tax. But Act No. 122, § 13, Pub.Acts 1941, in part above quoted, imposes upon the department the administration of the general sales tax law, and vests the department with the powers and duties, et cetera, embodied in the general sales tax act. Section 9 of Act No. 167, Pub.Acts 1933 (general sales tax act), contains the following:

‘As soon as practicable after each return is filed the board shall examine it. If it then appears that the correct amount of the tax is greater or less than that shown in the return, the tax shall be recomputed and the correct tax determined. If the amount paid exceeds that which should have been paid on the basis of the tax so recomputed, the excess so paid with interest at four per centum per annum shall be credited against a subsequent tax or shall be refunded if requested by the taxpayer.’

We cannot escape the conclusion that the legislature intended and expressly provided that the department in its administrative capacity should have the power and duty to refund to a taxpayer money paid to it in excess of the amount justly due as a sales tax; and in view of the express and unqualified authority to refund money so paid, we think it is immaterial whether the tax payment was or was not made under protest. The statute which authorizes this administrative body to refund money paid in excess of any lawful sales tax does not condition such authority upon the payment having been made under protest. We have repeatedly held in substance it is a general rule that taxation statutes are to be construed liberally in favor of the taxpayer. In Standard Oil Co. v. State of Michigan, 283 Mich. 85, 276 N.W. 908, 909, we quoted with approval from Gould v. Gould, 245 U.S. 151, 38 S.Ct. 53, 62 L.Ed. 211, the following:

“In the interpretation of statutes levying taxes it is the established rule not to extend their provisions, by implication, beyond the clear import of the language used, or to enlarge their operations so as to embrace matters not specifically pointed out. In case of doubt they are construed most strongly against the government, and in favor of the citizen.”

To read into the statute, Act No. 167, § 9, Pub.Acts 1933, a requirement of payment under protest, would be to insert a condition precedent to adjustments by the appeal board of this character which the statute does not require. This we may not do. Our holding that the appeal board has the power to refund accords with the law of adjudicated cases and as stated by Justice Cooley:

‘But no executive or ministerial officer has authority to refund taxes, unless such authority is expressly conferred.’ 3 Cooley, Taxation, 4th Ed., § 1259.

It is further to be noted Act No. 122, § 9, Pub.Acts 1941, Comp.Laws Supp.1943, § 3695-9 (Stat.Ann.1944 Cum.Supp. § 7.657(9), contains an express provision as to the stage of the proceedings...