Turkey Knob Coal Co. v. Hallanan

• Decision Date: 17 July 1919
• Docket Number: 3875.
• Citation: 99 S.E. 849,84 W.Va. 402
• Parties: TURKEY KNOB COAL CO. v. HALLANAN, State Tax Com'r.
• Court: West Virginia Supreme Court

99 S.E. 849

84 W.Va. 402

TURKEY KNOB COAL CO. v. HALLANAN, State Tax Com'r.

No. 3875.

Supreme Court of Appeals of West Virginia.

July 17, 1919

Submitted July 15, 1919.

Syllabus by the Court.

Equity has jurisdiction, at the suit of a party affected thereby, to enjoin the collection of a tax levied without authority of law.

The phrase "fiscal year 1919," as used in chapter 7 of the Acts of the Legislature of 1919, extraordinary session means the fiscal year ending June 30, 1919, and the tax thereby imposed is properly levied upon the net incomes of corporations returned for that year.

Appeal from Circuit Court, Kanawha County.

Bill for injunction by the Turkey Knob Coal Company against Walter S. Hallanan, State Tax Commissioner. Decree for defendant and plaintiff appeals. Affirmed.

Price Smith, Spilman & Clay, of Charleston, for appellant.

John T Simms, of Charleston, for appellee.

RITZ J.

The plaintiff by its bill in this cause seeks to enjoin the state tax commissioner from enforcing an assessment against it, made, as claimed by the defendant, under the provisions of chapter 7 of the Acts of 1919, extraordinary session.

Plaintiff is a West Virginia corporation and admittedly liable to pay the excise taxes provided by law. It made its return as required by the provisions of chapter 3 of the Acts of 1915, second extraordinary session. This return was filed in the office of the defendant on the 2d day of June, 1919, and showed the entire net income of the plaintiff for the calendar year 1918. Upon this net income the tax commissioner assessed a tax of one-half of 1 per cent. under the act of 1915 and of one-fourth of 1 per cent. under the provisions of chapter 7 of the Acts of the extraordinary session of 1919. Plaintiff paid the assessment provided for by the act of 1915, but refused to pay the assessment under the act of 1919, claiming that said act did not authorize such assessment, and, upon the refusal of the board of public works to relieve it therefrom, applied to the circuit court of Kanawha county for an injunction to prevent the collection of such assessment. Upon a hearing the relief asked was denied, and plaintiff's bill dismissed, and this appeal is prosecuted to review that decree.

Plaintiff contends that the act of 1919 (chapter 7 of the extraordinary session), properly construed, does not authorize the assessment made against it; that act, in so far as it is pertinent to the matter involved here, being as follows:

"Section 1. In addition to the tax imposed by section 5 of chapter 3 of the Acts of the Legislature of 1915, second extraordinary session, every corporation, joint-stock company, or association organized for profit, and having a capital stock represented by shares, and every insurance company, respectively, now or hereafter organized under the laws of this state, or under the laws of any other state or government, and engaged in any business whatsoever in the state of West Virginia, shall pay an annual special excise tax for the privilege of carrying on or doing business in the state of West Virginia equivalent to one-fourth of one per centum upon the entire net income of such company, received by it from all sources during the year, on business transacted and capital invested in this state, as hereinafter set forth. * * *

"Sec. 2. The tax imposed by section 1 of this act shall be levied for the state fiscal year 1919, and succeeding years, and shall be computed, levied, assessed, collected and paid upon the same basis and in the same manner as the tax imposed by section 5 of chapter 3 of the Acts of the Legislature of 1915, second extraordinary session.

"Sec. 3. That sections 3 and 4 of chapter 6 of the Acts of the Legislature of 1917, second extraordinary session, be and the same are hereby repealed."

It will be noticed that this act provides that the tax imposed shall be levied for the fiscal year 1919, and succeeding years. The plaintiff insists that the fiscal year 1919 did not begin until July 1, 1919, and hence the assessment made against it in June, 1919, could not be for the fiscal year 1919, while the tax commissioner's contention is that the fiscal year 1919 was the fiscal year which ended on June 30, 1919, and consequently the assessment sought to be enforced is clearly within the terms of the act. It will thus be seen that the question to be determined is what is meant by the phrase "fiscal year 1919" in the act of the Legislature here involved. If it means the year beginning July 1, 1919, admittedly there is no authority for the assessment complained of. If, however, it means the fiscal year ending June 30, 1919, the assessment sought to be enjoined is clearly authorized by the act.

By a demurrer to the bill the defendant challenges the...