Smotkin v. Peterson

• Decision Date: 15 October 1951
• Docket Number: No. 5370,5370
• Citation: 236 P.2d 743,73 Ariz. 1
• Parties: SMOTKIN et al. v. PETERSON et al.
• Court: Arizona Supreme Court

Page 743

236 P.2d 743

73 Ariz. 1

SMOTKIN et al. v. PETERSON et al.

No. 5370.

Supreme Court of Arizona.

Oct. 15, 1951.

James Elliott Dumseath, of Tucson, James E. Flynn, of Phoenix, for appellants.

Fred O. Wilson, Atty. Gen., Richard C. Briney, Asst. Atty. Gen., for appellees.

PHELPS, Justice.

This is an appeal from a declaratory judgment of the superior court of Pima County.

The facts are that during the year 1949 the Arizona State Tax Commission, hereinafter called the commission, sought to collect a sales tax from appellants under the provisions of the Arizona Excise Revenue Act of 1935, A.C.A.1939, § 73-1301 et seq., for the privilege of engaging in business as contractors in Pima County, Arizona.

The commission made demand upon appellants to pay to it the $1 license fee and to file their returns as prescribed by the Act which appellants refused to do. The commission then requested that appellants make available to it or permit its agent to examine the books, records, and papers for the purpose of ascertaining the amount of taxes due under the law. The latter request was also refused. Thereafter the commission issued and served summons upon appellants to appear before it on a day certain for a hearing on the matter, which were also ignored. The commission then filed this action in the Pima County superior court and in its complaint alleged that appellants were engaged in business in that county as contractors, setting forth the above demands and refusals and asked for a declaratory judgment declaring the rights, duties, status and legal relationships of the commission and the appellants in the premises and that appellants be required to pay the license fee of $1 and exhibit all of their books, records and data to the commission for the purpose of enabling it to obtain facts upon which to base the assessment of the tax provided by the Act to be paid.

Appellants, in their answer, attempted to meet the issues by denying that they were engaged in the contracting business and affirmatively alleging that they were engaged in the business of selling real estate and that they were therefore not subject to the payment of the tax sought to be collected. They admitted their refusal to pay the license fee of $1 or the sales tax prescribed by the Revenue Act and that they refused to permit an examination by the commission of their books and records.

The trial court granted a motion of the commission for a summary judgment and entered judgment thereon, the material parts of which read as follows:

'Now, therefore, it is ordered, adjudged and decreed by the Court that the law as it relates to the rights, duties, status and legal relations of the parties to this action in the premises under the Excise Revenue Act of 1935 and the same are hereby declared and adjudged as follows:

'That the provisions of the Excise Revenue Act of 1935, and in particular Sections 73-1303(h), 73-1312, 73-1314, 73-1316, 73-1318, and 73-1326, ACA1939, require the defendants to secure a privilege license in accordance with the provisions of the said Section 73-1312, and exhibit all of their books, records and data to the Arizona State Tax Commission or its duly appointed agents for examination in accordance with the provisions of the said Section 73-1316 and 73-1326 for the purpose of enabling said Arizona State Tax Commission to obtain facts and information upon which to base the assessment of the tax prescribed in the said Section, 73-1303(h), which tax must be paid together with appropriate penalties thereon pursuant to law.

'It is further ordered, adjudged and decreed by the Court that the defendants herein be and they are hereby commanded to comply immediately with the declaratory judgment herein rendered.'

Appellants present five assignments of error for our consideration but having failed to discuss the last three thereof they will be deemed to have been abandoned. We will therefore confine our discussion to the one question raised in the first two assignments of error: Did the trial court commit reversible error in granting the motion of the commission for summary judgment? If at the time the motion was granted, there existed a genuine issue as to any material fact, it was reversible error for the court to grant a motion for summary judgment. Under such circumstances summary judgment must be withheld until proof can be made on the controverted issue of fact. Cress v. Switzer, 61 Ariz. 405, 150 P.2d 86; Brown v. Navarre, 64 Ariz. 262, 169 P.2d 85.

Did the pleadings present the issue of a genuine material fact? Counsel for appellant contends that the question of whether appellants were in fact engaged in the business of contractors was a material fact which had to be determined by the court before it could render judgment. We cannot agree with this contention. Section 73-1303 of the Act designated and classified the various businesses subject to such tax and fixed the rate and method of determining the amount on which the tax must be computed and expressly charged the commission with the mandatory duty of assessing and collecting such tax.

Such an authority and duty carries with in the power to determine into what class any business falls. Until the commission first determines this question it cannot know what tax rate to apply to the business done by the taxpayer. It would be unreasonable to say that the commission must first obtain the judgment of a court establishing the classification into which a taxpayer falls before it can proceed to collect the tax imposed by law upon him. If this were the law any taxpayer could delay...