Janus Petroleum Inc. v. New York State Tax Appeals Tribunal

• Decision Date: 14 May 1992
• Citation: 180 A.D.2d 53,583 N.Y.S.2d 983
• Parties: In the Matter of JANUS PETROLEUM INC., Petitioner, v. NEW YORK STATE TAX APPEALS TRIBUNAL, et al., Respondents.
• Court: New York Supreme Court — Appellate Division

Page 983

583 N.Y.S.2d 983

180 A.D.2d 53

In the Matter of JANUS PETROLEUM INC., Petitioner, v. NEW YORK STATE TAX APPEALS TRIBUNAL, et al., Respondents.

Supreme Court, Appellate Division Third Department.

May 14, 1992.

Fischbein, Badillo, Wagner & Itzler (Norman R. Berkowitz, and Kenneth G. Schwarz, of counsel), New York City, for petitioner.

Robert Abrams, Atty. Gen. (John McConnell and Peter G. Crary, of counsel), Albany, for Comr. of Taxation and Finance of the State of N.Y., respondents.

Before MERCURE, J.P., and CREW, MAHONEY, CASEY and HARVEY, JJ.

CASEY, Justice.

Proceeding pursuant to CPLR article 78 (initiated in this court pursuant to Tax Law § 2016) to review a determination of respondent Tax Appeals Tribunal which denied petitioner's request for registration as a distributor of motor fuel.

The dispositive issue in this proceeding is whether petitioner is entitled to be registered as a distributor of diesel motor fuel because the notice of refusal to register was not issued within three months of petitioner's application for a hearing, as required by Tax Law § 283(6)(a). We hold that the requirements of Tax Law § 283(6)(a) are mandatory and, therefore, petitioner is entitled to be registered as a distributor of diesel motor fuel.

Article 12-A of the Tax Law imposes taxes on motor fuels, including diesel motor fuel. Among its provisions is the requirement that any person, firm, association or corporation seeking to do business as a diesel motor fuel distributor must apply to be registered as such with the Department of Taxation and Finance (see, Tax Law § 283). A notice of proposed refusal to register must "be issued promptly after application for registration is received" and a hearing must be scheduled "[u]pon timely application therefor" (Tax Law § 283[6][a]. The statute further requires that within three months of the application for a hearing, the Commissioner of Taxation and Finance must either register the applicant or issue a notice of refusal to register (id.). The statute expressly provides: "If the [Commissioner] fails to issue a notice of refusal to register within [the] three-month period (or such period as extended pursuant to this subdivision), the [Commissioner] shall register the applicant immediately upon the conclusion of such period so long as such applicant has filed the bond or other security required by the [Commissioner] in the amount fixed" (id.). It is undisputed that the three-month requirement was not complied with in this case.

Although the Legislature's use of mandatory language, such as shall or must, is not conclusive, "such a word of command is ordinarily construed as peremptory in the absence of circumstances suggesting a contrary legislative intent" (People v. Schonfeld, 74 N.Y.2d 324, 328, 547 N.Y.S.2d 266, 546 N.E.2d 395). A different rule, however, has evolved from cases involving statutory time limitations imposed on administrative agencies: "The courts have repeatedly held that unless the language used by the Legislature shows that the designation of time was intended as a limitation on the power of the body or officer, the provision is directory rather than mandatory * * *" (Matter of Grossman v. Rankin, 43 N.Y.2d 493, 501, 402 N.Y.S.2d 373, 373 N.E.2d 267 [citations omitted]. These rules of statutory construction are of limited value, however, for "the line between mandatory and directory statutes cannot be drawn with precision" (People v. Karr, 240 N.Y. 348, 351, 148 N.E. 546; accord, Matter of King v. Carey, 57 N.Y.2d 505, 513, 457 N.Y.S.2d 216, 443 N.E.2d 464). "The inquiry involves a consideration of the statutory scheme and objectives to determine whether the requirement for which dispensation is sought by the government may be said to be an 'unessential particular' * * * or, on the other hand, relates to the essence and substance of the act to be performed and thus cannot be viewed as merely directory * * *" (Matter of King v. Carey, supra, at 513, 457 N.Y.S.2d 216, 443 N.E.2d 464 [citations omitted].

It is our view that the three-month requirement of Tax Law § 283(6)(a) falls into the latter category (see, id.; see also, Gonkjur Assoc. v. Abrams, 57 N.Y.2d 853, 455 N.Y.S.2d 761, 442 N.E.2d 58). In contrast to those cases involving statutes which impose mere time limitations within which an administrative determination is to be made (see, Matter of Eclipse Disco v. New York State Liq. Auth., 155 A.D.2d 304, 547 N.Y.S.2d 589; Matter of Paino v. Webb, 152 A.D.2d 699, 544 N.Y.S.2d 159; Matter of Estate of Clifford v. New York State Employees Retirement Sys., 123 A.D.2d 1, 4-5, 510 N.Y.S.2d 277), Tax Law § 283(6)(a) requires the performance of one or the other of two specified acts within a three-month period and provides that, upon the failure to perform one of the specified acts within that three-month period, the other act shall be performed. The Legislature's inclusion of the specific consequence to flow from the administrative agency's failure to act within the time limit establishes that the time limit was not a mere unessential particular and, therefore, cannot be viewed as directory (see, Matter of Radimak v. Nassar, 119 A.D.2d 978, 979, 500 N.Y.S.2d 991; Matter of 400 Delaware Ave. Prop. Co. v. State of New York Div. of Housing & Community Renewal, 105 A.D.2d 1046, 483 N.Y.S.2d 483; see also, Matter of Seaboard Contr. & Material v. Department of Envtl. Conservation of State of N.Y., 132 A.D.2d 105, 108-109, 522 N.Y.S.2d 679).

Respondent Tax Appeals Tribunal rejected petitioner's claim that it was entitled to be registered pursuant to Tax Law § 283(6)(a), concluding that the statutory purpose of the time limitation, to prevent the disruption of an existing business while the application to register is pending, was satisfied by the Department's issuance of a series of temporary authorizations which allowed petitioner to continue its business operations during the pendency of the administrative proceeding. Assuming that the Tribunal correctly determined the purpose of the time limitation, we conclude that the Department's adoption of a procedure which purportedly serves that purpose cannot divest petitioner of the benefit provided by Tax Law § 283(6)(a). The...