Glasco Elec. Co. v. Department of Revenue

• Decision Date: 29 August 1980
• Docket Number: No. 16102,16102
• Citation: 87 Ill.App.3d 1070,42 Ill.Dec. 896,409 N.E.2d 511
• Parties: , 42 Ill.Dec. 896 GLASCO ELECTRIC COMPANY, Plaintiff-Appellant, v. DEPARTMENT OF REVENUE of the State of Illinois, Defendant-Appellee.
• Court: United States Appellate Court of Illinois

Page 511

409 N.E.2d 511

87 Ill.App.3d 1070, 42 Ill.Dec. 896

GLASCO ELECTRIC COMPANY, Plaintiff-Appellant, v. DEPARTMENT OF REVENUE of the State of Illinois, Defendant-Appellee.

No. 16102.

Appellate Court of Illinois, Fourth District.

Aug. 29, 1980.

Brown, Hay & Stephens, Springfield (Edward J. Cunningham, Mark H. Ferguson, of counsel), Springfield, for plaintiff-appellant.

William J. Scott, Atty. Gen. of Ill. (Joseph D. Keenan, III, Asst. Atty. Gen., Chicago, of counsel), for defendant-appellee.

GREEN, Justice:

We are concerned here with the provisions of section 12 of the Retailers' Occupation Tax Act (Ill.Rev.Stat.1977, ch. 120, par. 451) which requires a petitioner seeking review of final assessments or reassessments for certain types of state taxes to either (1) file a sufficient bond in the circuit court within 20 days of the filing of the administrative review, or (2) obtain an order from the circuit court in which the petition for review is filed, placing a lien upon the petitioner's property to secure payment of the taxes in issue. Section 12 of the Use Tax Act (Ill.Rev.Stat.1979, ch. 120, par. 439.12) incorporates this provision and the question presented is whether compliance with the foregoing is necessary for the circuit court to retain jurisdiction or whether compliance can be waived. We hold that compliance is not jurisdictional and can be waived and was here waived.

On August 8, 1978, after various administrative proceedings, defendant, Department of Revenue, issued a final notice of deficiency assessing the use tax liability of plaintiff, Glasco Electric Company, to total $22,332.22 for the tax years 1974 through 1976. Plaintiff then filed a complaint for administrative review in the circuit court of Sangamon County on September 13, 1978. On November 29, 1978, well beyond the 20-day limit of section 12, plaintiff for the first time, filed a proper bond in that court and the bond was approved. The case lay dormant until November 1, 1979, when defendant filed a motion to dismiss, claiming the plaintiff's failure to timely file bond had deprived the court of jurisdiction. Plaintiff countered by filing an affidavit indicating agreements by members of the Attorney General's staff which would constitute a waiver by them of the timely filing requirement if that can be waived. Defendant filed no counter-affidavit. On that same date, the motion was heard and the court entered an order determining the 20-day requirement to be jurisdictional: (1) dismissing the complaint; and (2) entering judgment in favor of defendant and against plaintiff for the amount of the reassessment plus interest and costs. After plaintiff's motion to reconsider was denied, plaintiff appealed to this court.

Neither the supreme court nor this court has ever passed upon the question of whether the 20-day requirement of section 12 is jurisdictional. However, in Randy's House of Steele, Inc. v. Allphin (1979), 76 Ill.App.3d 788, 32 Ill.Dec. 250, 395 N.E.2d 197, the appellate court for the second district was faced with the issue and, sua sponte dismissed a section 12 appeal because bond had not been timely filed. The precedent of that case was binding upon the circuit court but not upon us. (People v. Spahr (1978), 56 Ill.App.3d 434, 14 Ill.Dec. 208, 371 N.E.2d 1261.) Thus, the circuit court properly dismissed the case but we are free to review that order without being similarly bound.

Article VI, section 9 of the Illinois Constitution of 1970 grants circuit courts original jurisdiction "of all justiciable matters" with minor exceptions where that jurisdiction is exclusively in the supreme court but it also specifically states that "Circuit Courts shall have such power to review administrative action as provided by law " (emphasis added). Accordingly, absent legislation, administrative review is not a matter of right under section 9. (Board of Education v. Gates (1974), 22 Ill.App.3d 16, 316 N.E.2d 525.) Nor does that section prevent the legislature from conditioning the circuit court's jurisdiction to entertain a particular type of administrative review upon the filing of a bond to secure payment of sums of money administratively determined to be owed.

Pertinent parts of section 12 provide:

"Any suit under the 'Administrative Review Act' to review a final assessment or a revised final assessment issued by the Department under this Act shall be dismissed on motion of the Department or by the court on its own motion, unless the person filing such suit files, with the court, within 20 days after the filing of the complaint and the issuance of the summons in the suit, a bond with good and sufficient surety or sureties * * *. When dismissing the complaint, the court shall enter judgment against the taxpayer and in favor of the Department in the amount of the final assessment or revised final assessment, together with any interest which may have accrued since the Department issued the final assessment * * * and for costs, * * *.

If the court finds in a particular case that the plaintiff cannot procure * * * (a) bond required herein, the court may relieve the plaintiff of the obligation of filing such bond, but shall enter an order, in lieu of such bond, subjecting the plaintiff's real and personal property * * * to a lien in favor of the Department. " (Emphasis added.) Ill.Rev.Stat.1977, ch. 120, par. 451.

Although the bond requirement of section 12 has been in force since 1953 the question of the timely filing of such a bond has been before the courts of review of the states in only four cases. (Randy's House of Steele, Inc.; Streator Brick Systems, Inc. v. Department of Revenue (1978), 58 Ill.App.3d 8, 15 Ill.Dec. 568, 373 N.E.2d 1040; Diamond Jim's, Inc. v. Department of Revenue (1978), 66 Ill.App.3d 613, 23 Ill.Dec. 634, 384 N.E.2d 428; Bee Jay's Truck Stop, Inc. v. Department of Revenue (1977), 52 Ill.App.3d 90, 9 Ill.Dec. 739, 367 N.E.2d 173, cert. denied (1978), 435 U.S. 970, 98 S.Ct. 1610, 56 L.Ed.2d 61.) Only in Randy's House of Steele, Inc., was the reviewing court required to pass on the question of whether compliance was jurisdictional. The issue was raised for the first time on appeal and the appellate court held that the circuit court had lacked jurisdiction of the administrative review because of the taxpayer's failure to timely comply. The appellate court determined that the legislature had intended for the requirement to be jurisdictional because (1) it had stated in mandatory language that upon...