Halifax Paper Co., In re

• Decision Date: 01 July 1956
• Citation: 259 N.C. 589,131 S.E.2d 441
• Parties: In the Matter of the Assessment of Additional Sales and Use Taxes against HALIFAX PAPER COMPANY, INC., for the Period from
• Court: North Carolina Supreme Court

Page 441

131 S.E.2d 441

259 N.C. 589

In the Matter of the Assessment of Additional Sales and Use Taxes against HALIFAX PAPER COMPANY, INC., for the Period from July 1, 1956, through June 30, 1959.

No. 451

Supreme Court of North Carolina.

June 14, 1963

Atty. Gen. T. W. Bruton and Asst. Attys. Gen. Lucius W. Pullen and Charles D. Barham, Jr., for appellant.

Allsbrook, Benton & Knott, and Dwight L. Cranford, Roanoke Rapids, for appellee.

MOORE, Justice.

Halifax Paper Company, Inc. (Halifax), is engaged in the manufacture of paper pulp, paper products and by-products, and owns woodlands as a source of wood for its manufacturing operations. On 19 August 1959 the State Commissioner of Revenue (Commissioner) notified Halifax in writing that he intended to assess against it $19,725.05, plus penalty and interest, for unpaid sales and use taxes on account of certain machinery and equipment purchased by Halifax during the period from 1 July 1956 to 30 June 1959. G.S. § 105-241.1(a), (b). A portion of the machinery and equipment in question was purchased for use in the regular and systematic planting, cultivating and harvesting of trees for pulp on the woodlands belonging to Halifax. In apt time Halifax requested a hearing before the Commissioner. G.S. § 105-241.1(c). After hearing, the Commissioner affirmed the assessment, Halifax appealed to the North Carolina Tax Review Board (Review Board). G.S. § 105-241.2. On 20 September 1962 the Review Board entered its administrative decision No. 56, affirming the assessment in part and reversing it in part. G.S. § 105-241.2(c). The decision declared that the machinery and equipment used in the regular and systematic planting, cultivating and harvesting of trees for pulp were being used in 'the planting, cultivating, harvesting or curing of farm crops' within the meaning of the sales and use tax exemption provision contained in G.S. § 105-164.13(8), and that Halifax was a 'farmer' within the purview of that provision. The Commissioner excepted to this portion of the Review Board's decision.

On 18 October 1962 the Commissioner filed a petition in the Superior Court of Wake County, under Article 33 of Chapter 143 of the General Statutes of North Carolina, seeking judicial review of the decision of the Review Board with respect to its interpretation of the meaning of G.S. § 105-164.13(8) as applied to the facts in this case. Halifax demurred to the petition on the ground that the Superior Court 'had no jurisdiction of the subject matter of the action, in that the * * * Commissioner * * * has no standing under the provisions of Article 33 of Chapter 143 of the General Statutes * * * to appeal * * * from an administrative decision of the Tax Review Board.' The court below sustained the demurrer, and the Commissioner appeals to this Court.

The question for decision is whether the Commissioner may, under the provisions of G.S. Ch. 143, Art. 33, appeal from the decision of the Review Board to the Superior Court.

The General Assembly created the Tax Review Board at the 1953 session. S.L.1953, Ch. 1302, § 7(b). As originally established its purposes were very limited. It was authorized and required (1) to hear and determine petitions of foreign corporations relating to the allocation of capital, surplus and undivided profits for franchise tax purposes and net income for incom tax purposes, and (2) to make and promulgate all rules and regulations for the collection of State taxes under Schedules A to H, inclusive. It had no other powers and duties. The Act contained no provisions for appeals from its decisions. The board was composed of the Commissioner of Revenue (who was designated as chairman), the Director of the Department of Tax Research, and the State Treasurer.

The 1953 Act was rewritten at the 1955 session. S.L.1955, Ch. 1350 (codified as G.S. § 105-241.2 to G.S. § 105-241.4). 1957 amendments are not pertinent to this appeal. By the 1955 act the Chairman of the Utilities Commission was made a member, replacing the Commissioner of Revenue. The State Treasurer was designated as chairman. The Commissioner of Revenue is a member only when the Board makes allocations for corporate franchise and income tax purposes. The Commissioner is required to prepare administrative regulations for the collection of taxes, to be effective when approved by the Review Board. When a tax assessment has been made by the Commissioner, and the taxpayer has obtained a hearing before the Commissioner thereon, and the Commissioner has rendered a final decision with respect to the taxpayer's liability, the taxpayer may file a petition (with a copy to the Commissioner) requesting the Board to review the assessment. The Board, after notice to the taxpayer and the Commissioner, must grant a hearing if the petition is prima facie meritorious. The Board must confirm, modify, reverse, reduce or increase the assessment or decision of the Commissioner. Any taxpayer aggrieved by the decision of the Review Board may appeal to the superior court under the provisions of G.S., Ch. 143, art. 33. The Act makes no provision for an appeal by the Commissioner to the superior court, nor does it expressly prohibit such appeal. However, it provides that either the taxpayer or the Commissioner may appeal from the superior court to the Supreme Court.

There is no inherent or inalienable right of appeal from an inferior court to a superior court or from a superior court to the Supreme Court. No appeal lies from an order or decision of an administrative agency of the State or from judgments of special statutory tribunals whose proceedings are not according to the course of the common law, unless the right is granted by statute. In re State ex rel. Employment Security Com., 234 N.C. 651, 68 S.E.2d 311. The State cannot appeal in either civil or criminal cases except upon statutory authority. In re Stiers, 204 N.C. 48, 167 S.E. 382. The Commissioner of Revenue has no right to appeal from the decision of the Review Board pursuant to any provision of G.S. § 105-241.3. If he has a right of appeal it is by virtue of G.S., Ch. 143, art. 33.

The Employment Security opinion, supra, was filed by the Supreme Court on 12 December 1951. The General Assembly at its next session (1953) passed an Act entitled 'Judicial Review of Decisions of Certain Administrative Agencies.' S.L. 1953, Ch. 1094 (codified as G.S., Ch. 143, art. 33; G.S. § 143-306 to G.S. § 143-316). This Act was ratified prior to the passage of the Act creating the Tax Review Board. The Judicial Review Act provides that 'Any person who is aggrieved by a final administrative decision, and who has exhausted all administrative remedies made available to him by statute or agency rule, is entitled to judicial review of such decision under this article, unless adequate procedure for judicial review is provided by some other statute, * * *.' G.S. § 143-307. It provides further: '(1) 'Administrative agency' or 'agency' shall mean any State officer, committee, authority, board, bureau, commission, or department authorized by law to make administrative decisions, except those agencies in the legislative or judicial branches of government, and except those whose procedures are governed by chapter 150 of the General Statutes (Uniform Revocation of Licenses), or whose administrative decisions are made subject to judicial review under some other statute or statutes containing adequate procedural provisions therefor. (2) 'Administrative decision' or 'decision' shall mean any decision, order, or determination rendered by an administrative agency in a proceeding in which the legal rights, duties, or privileges of specific parties are required by law or constitutional right to be determined after an opportunity for agency hearing.' G.S. § 143-306.

The Tax Review Board is an 'Administrative Agency' within the purview of G.S. § 143-306. It is an agency of the Executive branch of the State government, has no authority or duties with respect to the granting or revocation of licenses, and its decisions are not subject to review under any statute or statutes other than G.S., Ch. 143, art. 33. It will be noted that G.S. § 105-241.3 grants the taxpayer the right of appeal only 'under the provisions of article 33 of chapter 143 of the General Statutes.' In the instant case all administrative remedies have been exhausted. The 'legal rights, duties or privileges of specific parties' are affected by the decision here in question; it involves the legal interpretation of a statute, not merely rule-making. The decision was required by law to be made after an opportunity for an agency hearing.

Clearly the Commissioner is entitled under G.S. § 143-307 to appeal from the decision of the Review Board in the instant case, unless (1) G.S. § 105-241.3 impliedly amends G.S. § 143-307 so as to exclude the Commissioner from those entitled to appeal under the latter section, or (2) the Commissioner is not a 'party aggrieved' by the decision of the Review Board.

Though G.S. § 105-241.3 was passed subsequent to the enactment of G.S. § 143-307, we are of the opinion that it does not amend the latter section so as to repeal any provisions thereof granting right of appeals to the Commissioner of Revenue. G.S. § 105-241.3 does not expressly deny the right of the Commissioner to appeal from decisions of the Review Board. The General Assembly in the passage of G.S. § 105-241.3 was dealing with the subject of appeals from administrative agencies only collaterally. An amendment or repeal by implication is not favored. Duke Power Co. v. Bowles, 229 N.C. 143, 48 S.E.2d 287; McLean v. Durham County Board of Elections, 222 N.C. 6, 21 S.E.2d 842. 'Ordinarily, the enactment of a law will not be held to have changed a statute that the legislature did not have under consideration at the time of enacting such law; and implied amendments cannot arise merely out of supposed legislative intent in no way expressed, however...