Keystone Consol. Industries, Inc. v. Allphin, No. 76--117

CourtUnited States Appellate Court of Illinois
Writing for the CourtSTENGEL; STOUDER, P.J., and SCOTT
Citation4 Ill.Dec. 250,359 N.E.2d 1202,45 Ill.App.3d 714
Parties, 4 Ill.Dec. 250 KEYSTONE CONSOLIDATED INDUSTRIES, INC., a Delaware Corporation, Plaintiff-Appellee, v. Robert H. ALLPHIN, Director of Revenue, and the Department of Revenue of the State of Illinois, Defendant-Appellant.
Docket NumberNo. 76--117
Decision Date04 February 1977

Page 1202

359 N.E.2d 1202
45 Ill.App.3d 714, 4 Ill.Dec. 250
KEYSTONE CONSOLIDATED INDUSTRIES, INC., a Delaware
Corporation, Plaintiff-Appellee,
v.
Robert H. ALLPHIN, Director of Revenue, and the Department
of Revenue of the State of Illinois, Defendant-Appellant.
No. 76--117.
Appellate Court of Illinois, Third District.
Feb. 4, 1977.

[45 Ill.App.3d 715] William J. Scott, Atty. Gen., Chicago, Patricia Rosen, Asst. Atty. Gen., of counsel, for defendant-appellant.

Stephen D. Gay, Peoria, of counsel, Davis, Morgan & Witherell, Peoria, for plaintiff-appellee.

Page 1203

[4 Ill.Dec. 251] STENGEL, Justice.

The Illinois Department of Revenue and its director Robert H. Allphin appeal from an injunction against the assessment of a use tax upon oxygen and nitrogen supplied to plaintiff Keystone Consolidated Industries, Inc., by Chemetron.

Before taking up the substantive questions presented by this appeal, we must first consider the Department's contention that Keystone should be precluded from equitable relief because of a failure to exhaust administrative remedies. The Department audited Keystone's books and then informed Keystone that all payments to Chemetron for gaseous oxygen and nitrogen were subject to the Illinois Use Tax and that use taxes of $12,008.64 were due for the three year period from September 25, 1969, to September 25, 1972. On October 22, 1973, Keystone filed this action for an injunction. The Department filed a motion to dismiss the suit for Keystone's failure to exhaust its administrative remedies under the Use Tax Act (Ill.Rev.Stat.1975, ch. 120, par. 439.1 Et seq.) and the Administrative Review Act (Ill.Rev.Stat.1975, ch. 110, pars. 264--279). The motion to dismiss was denied on December 6, 1973, and the final [45 Ill.App.3d 716] judgment order was entered on January 6, 1976, declaring that the performance of Chemetron did not constitute the sale of tangible personal property and enjoined the Department from assessing a use tax against plaintiff.

At the time the circuit court denied the motion to dismiss, an injunction to prevent the collection of illegal taxes was recognized as an exception to the general rule requiring exhaustion of administrative remedies before judicial relief can be sought. (Owens-Illinois Glass Co. v. McKibbin (1943), 385 Ill. 245, 52 N.E.2d 177.) On March 24, 1975, the Illinois Supreme Court ruled that the Owens exception to the exhaustion of remedies doctrine was no longer applicable, and instead the exhaustion doctrine was extended to illegal tax cases in furtherance of the public policy effected by the Administrative Review Act. (Illinois Bell Telephone Co. v. Allphin (1975), 60 Ill.2d 350, 326 N.E.2d 737.) In Illinois Bell, after overturning the Owens exception, the court nevertheless proceeded to decide the case on the basis of Owens because Bell had relied upon Owens in seeking equitable relief.

The supreme court again refused to give retrospective application to its Illinois Bell decision in Sta-Ru Corp. v. Mahin (1976), 64 Ill.2d 330, 1 Ill.Dec. 67, 356 N.E.2d 67, where at the time the trial court enjoined collection of taxes under the Retailers' Occupation Tax Act, the authority of Owens was as yet undisturbed. Under such circumstances the court chose to decide the merits of the case on the basis of Owens.

A similar situation exists in the case at bar. The trial court denied the Department's motion to dismiss, which was based on the exhaustion doctrine, before Illinois Bell had overruled Owens. That decision was correct at the time. Although the decision on the merits in this case was rendered a few months after the Illinois Bell ruling, the propriety of seeking injunctive relief without exhausting administrative remedies was no longer an issue. In our judgment, since Keystone relied upon Owens in seeking equitable relief from impending tax liability, fundamental fairness requires application of the Owens rule in this case just as in Illinois Bell and Sta-Ru Corp. Therefore, we hold that the trial court properly exercised its...

To continue reading

Request your trial
8 practice notes
  • Kean v. Wal-Mart Stores, Inc., No. 1-07-1341.
    • United States
    • United States Appellate Court of Illinois
    • November 21, 2008
    ...form part of the selling price of their wares); 35 ILCS 105/2 (West 2006); see also Keystone Consolidated Industries, Inc. v. Allphin, 45 Ill.App.3d 714, 4 Ill.Dec. 250, 359 N.E.2d 1202 (1977) (applying this statutory language to hold that company's purchase of gaseous nitrogen and oxygen 8......
  • Townley, Matter of, No. 15547
    • United States
    • Supreme Court of South Dakota
    • April 22, 1987
    ...rental charges by National are "... refueling and other services." In Keystone Consolidated Industries, Inc. v. Allphin, 45 Ill.App.3d 714, 4 Ill.Dec. 250, 359 N.E.2d 1202 (1977), the court considered a definition of "selling price" almost identical to South Dakota's def......
  • Archer Daniels Midland Co. v. City of Chicago, No. 1-96-3861
    • United States
    • United States Appellate Court of Illinois
    • December 31, 1997
    ...property within the meaning of the Illinois Use Tax Act); Keystone [294 Ill.App.3d 191] Consolidated Industries, Inc. v. Allphin, 45 Ill.App.3d 714, 4 Ill.Dec. 250, 359 N.E.2d 1202 (1977) (oxygen and nitrogen are tangible person property). We find no distinguishing factors between oxygen, n......
  • Rayburn v. Rayburn, No. 75--417
    • United States
    • United States Appellate Court of Illinois
    • February 14, 1977
    ...v. Braunfeld (4th Dist., 1974), 22 Ill.App.3d 344, 317 N.E.2d 336). A change of circumstances of only the noncustodial parent may be [45 Ill.App.3d 714] considered, but it is not sufficient for a change of custody that the changed circumstances affect the parent's situation without affectin......
  • Request a trial to view additional results
8 cases
  • Kean v. Wal-Mart Stores, Inc., No. 1-07-1341.
    • United States
    • United States Appellate Court of Illinois
    • November 21, 2008
    ...form part of the selling price of their wares); 35 ILCS 105/2 (West 2006); see also Keystone Consolidated Industries, Inc. v. Allphin, 45 Ill.App.3d 714, 4 Ill.Dec. 250, 359 N.E.2d 1202 (1977) (applying this statutory language to hold that company's purchase of gaseous nitrogen and oxygen 8......
  • Townley, Matter of, No. 15547
    • United States
    • Supreme Court of South Dakota
    • April 22, 1987
    ...rental charges by National are "... refueling and other services." In Keystone Consolidated Industries, Inc. v. Allphin, 45 Ill.App.3d 714, 4 Ill.Dec. 250, 359 N.E.2d 1202 (1977), the court considered a definition of "selling price" almost identical to South Dakota's def......
  • Archer Daniels Midland Co. v. City of Chicago, No. 1-96-3861
    • United States
    • United States Appellate Court of Illinois
    • December 31, 1997
    ...property within the meaning of the Illinois Use Tax Act); Keystone [294 Ill.App.3d 191] Consolidated Industries, Inc. v. Allphin, 45 Ill.App.3d 714, 4 Ill.Dec. 250, 359 N.E.2d 1202 (1977) (oxygen and nitrogen are tangible person property). We find no distinguishing factors between oxygen, n......
  • Rayburn v. Rayburn, No. 75--417
    • United States
    • United States Appellate Court of Illinois
    • February 14, 1977
    ...v. Braunfeld (4th Dist., 1974), 22 Ill.App.3d 344, 317 N.E.2d 336). A change of circumstances of only the noncustodial parent may be [45 Ill.App.3d 714] considered, but it is not sufficient for a change of custody that the changed circumstances affect the parent's situation without affectin......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT