Suleman v. McBeath

• Decision Date: 07 April 1981
• Docket Number: No. 8819,8819
• Citation: 614 S.W.2d 637
• Parties: Joseph D. SULEMAN, Individually and d/b/a Eli's Club, Appellant, v. W. S. McBEATH, Administrator, Texas Alcoholic Beverage Commission, Warren G. Harding, Treasurer of State of Texas, and John L. Hill, Attorney General of State of Texas, Appellees.
• Court: Texas Court of Appeals

Page 637

614 S.W.2d 637

Joseph D. SULEMAN, Individually and d/b/a Eli's Club, Appellant, v. W. S. McBEATH, Administrator, Texas Alcoholic Beverage Commission, Warren G. Harding, Treasurer of State of Texas, and John L. Hill, Attorney General of State of Texas, Appellees.

No. 8819.

Court of Civil Appeals of Texas, Texarkana.

April 7, 1981.

Rehearing Denied May 5, 1981.

Earl L. Yeakel III, Kammerman, Yeakel & Overstreet, Austin, for appellant.

Mark White, Atty. Gen. of Texas, Gilbert J. Bernal, Jr., Asst. Atty. Gen., Austin, for appellees.

BLEIL, Judge.

This appeal is from a dismissal of Appellant Joseph Suleman's suit for the recovery of gross receipts tax monies paid under protest.

The threshold issue is whether the requirement that a taxpayer make payments of taxes with a written protest, which fully sets out in detail each and every reason why the taxes are unlawful, is jurisdictional. We hold that although it is jurisdictional, the jurisdictional requirements were met and the judgment of the trial court is reversed.

In August of 1978, the Texas Alcoholic Beverage Commission conducted an audit on the premises of Eli's Club. This club is located in Travis County, Texas, and is owned by Joseph D. Suleman, appellant herein. The purpose of this audit was to determine whether proper taxes had been paid as a result of Suleman's sale of alcoholic beverages during the period from May 12, 1977, to June 5, 1978. As a result of this audit, the determination was made that Appellant Suleman had not paid the proper taxes and owed the sum of $12,935.53 to the State.

On September 22, 1978, appellant forwarded payment of that amount to the Alcoholic Beverage Commission. This payment was accompanied by a letter, the full text of which stated,

"Enclosed is a cashier's check for $12,935.53 as requested in your letter of September 15, 1978.

"I deny that I owe this money, It (sic) is being paid under protest because I believe that the tax computation was erroneous. Please handle this payment pursuant to Taxation-General Article 1.05 of the Texas Statutes."

Thereafter appellant timely filed suit seeking a refund of the amount paid. In the petition which was filed appellant alleged that the tax computation was erroneous because the audit conducted was a depletion audit and failed to take into the account the fact that drinks which were served contained more than the standard measure of alcohol so that fewer drinks were actually sold from a bottle of liquor than as determined using the Commission's standards. In response to the appellees' plea to the jurisdiction of the trial court the case was dismissed on February 20, 1979. In findings of fact and conclusions of law, which were filed in the case, the court determined that the letter of protest failed to comply with the requirement of Tex.Tax.-Gen.Ann. art. 1.05 that the protest set out fully and in detail each and every ground or reason therefor and concluded that the court had no jurisdiction to consider the merits of the suit.

Appellant's position in essence is that all of the requisites to suits for refund of taxes were made except that the sufficiency of the contents of the written protest, because of a tax computation error, did not state fully and in detail why the tax computation was erroneous. He contends that this failure does not result in a lack of jurisdiction of the trial court to determine the merits of the cause, but rather limits the trial of a cause to a showing by him of computational errors. We agree.

This cause involves Article 1.05, Tex.Tax.-Gen.Ann., which governs the filing of suits against the State of Texas by taxpayers for refund of taxes enumerated therein. Article 1.05(1) and (2), in pertinent part, states:

"(1) Protest. Any person, firm, or corporation who may be required to pay to the head of any department of the State Government any occupation, gross receipts, franchise, license or other privilege tax or fee, and who believes or contends that the same is unlawful and that such public official is not lawfully entitled to demand or collect the same shall, nevertheless, be required to pay such amount as such public official charged with the collection thereof may deem to be due the State, and shall be entitled to accompany such payment with a written protest, setting out fully and in detail each and every ground or reason why it is contended that such demand is unlawful or unauthorized.

"(2) Suits for recovery of taxes or fees. Upon the payment of such taxes or fees, accompanied by such written protest, the taxpayer shall have ninety (90) days from said date within which to file suit for the recovery thereof in any court of competent jurisdiction in Travis County, Texas, and none other. Such suit shall be brought against the public official charged with the duty of collecting such tax or fees, the State Treasurer and the Attorney General. The issues to be determined in such suit shall be only those arising out of the grounds or reasons set forth in such written protest as originally filed...."

Appellant advances two basic arguments: (1) that the requirement of Article 1.05 of ...