Undercofler v. Veterans of Foreign Wars Post 4625

• Decision Date: 12 November 1964
• Docket Number: 40677,3,Nos. 40676,Nos. 1,2,s. 40676,s. 1
• Citation: 139 S.E.2d 776,110 Ga.App. 711
• Parties: Hiram K. UNDERCOFLER, Commissioner, v. VETERANS OF FOREIGN WARS POST 4625. Hiram K. UNDERCOFLER, Commissioner, v. AMERICAN LEGION POST 69
• Court: Georgia Court of Appeals

Page 776

139 S.E.2d 776

110 Ga.App. 711

Hiram K. UNDERCOFLER, Commissioner, v. VETERANS OF FOREIGN WARS POST 4625.

Hiram K. UNDERCOFLER, Commissioner, v. AMERICAN LEGION POST 69.

Nos. 40676, 40677.

Court of Appeals of Georgia, Division Nos. 1, 2, 3.

Nov. 12, 1964.

Rehearing Denied Nov. 30, 1964.

Syllabus by the Court

1. An assessment made by the State Revenue Commissioner pursuant to Ga.L.1951, p. 360, § 16(d) (Code Ann. § 92-3427a) may not be cancelled or abated and a new assessment issued after the time for appeal has expired solely for the purpose of extending the time of appeal, the time of which is limited by legislative enactment (Ga.L.1937, 38, Ex.Sess., pp. 77, 100; 1943, pp. 204, 206, 208; Code Ann. § 92-8446). The trial court, therefore, did not err in granting summary judgment in favor of the taxpayer on an appeal from such subsequent assessments.

2. The operation of coin-operated gaming devices known as 'slot machines' or 'one-armed bandits' by depositing a coin therein is a transaction amounting to a taxable sale under § 3(c) 1(c) of the Georgia Retailers and Consumers Sales and Use Tax Act (Ga.L.1951, pp. 360, 364) as amended; (Code Ann. § 92-3403a C(1)(c)), and such sale is not excluded from the Act merely because such sale amounts to an illegal transaction.

Plaintiff in error in both cases, the Revenue Commissioner of the State of Georgia, made assessments on September 5, 1961, against both defendants in error for sales taxes for the taxable period from August 1, 1958, through July 31, 1961. The assessed items in the case against the American Legion were based upon receipts from the operation of coin-operated gaming devices known as 'slot machines' or 'one-armed bandits.' The assessment in the case against the V. F. W. was partially for receipts from the operation of such coin-operated gaming devices, and receipts for items of food, etc. No appeal was filed within 15 days allowed by law after notice of the assessment. On January 31, 1962, the Commissioner, to afford the defendants in error an opportunity to have the commissioner's determination of their sales and use tax liability judicially reviewed, vacated, set aside and canceled said assessments, and on February 6, 1962, made another assessment covering the identical items. On February 12, 1962, defendants in error each filed an appeal from the assessment of February 6, 1962. The Commissioner, because of an irregularity in officially notifying the taxpayer, vacated, set aside and canceled the second assessment on March 2, 1962, and returned the appeals to the respective defendants in error. On April 24, 1962, the Commissioner made a third assessment covering the same items, except those against which the statute of limitation had run in the meantime. On May 8, 1962, the defendants in error filed appeals from the third assessment and these cases are now before this court for consideration after the superior court, to which court the cases were appealed, rendered a summary judgment in favor of the taxpayer in each case.

Eugene Cook, Atty. Gen., Louis F. McDonald, Asst. Atty. Gen., H. Perry Michael, Atlanta, for plaintiff in error.

Barrie L. Jones, Alma, for defendants in error.

PANNELL, Judge.

1. Irrespective of whether or not the Revenue Commissioner may by necessity, or implication, have authority to cancel or abate an assessment to correct what may at the time appear to be an error of fact or law, and after so canceling or abating, make a new assessment to correct the erroneous cancellation or abatement of the first [see Georgia R. & Banking Co. v. Wright, 124 Ga. 596, 615, 53 S.E. 251; Commissioner v. Newport Industries Inc., 7 Cir., 121 F.2d 655, 657], such rule has no application to the present case where the first assessment was not canceled for any such reason, but was canceled solely to effect an extension of time to the taxpayer for appeal from the assessment contrary to the legislative provision limiting the time in which the taxpayer might appeal to 15 days. The statute gives the Commissioner no such authority either expressly or by necessary implication. It follows that the cancellation of the first assessment and the issuance of the second assessment and the third assessment, in no way correcting any errors in the first assessment, were nugatory.

Nothing to the contrary was ruled in Nikas v. Oxford, 103 Ga.App. 721, 120 S.E.2d 677. In that case there were material changes in the executive order regarding the suspension of a licensee under the Alcoholic Beverage Act, so as to be tantamount to a new determination. Here we have no modification or new determination, but new assessments identical with the previous assessments; nor do we have here the question of the time of a suspension of a licensee which rests within the discretion of the Commissioner and which may be revoked or changed at his discretion.

2. In view of the special concurrence by Chief Judge Felton, concurring in the judgment of affirmance, but on the ground that the tax assessments were void because the commissioner had no jurisdiction to make an assessment on illegal sales, we have added the second headnote and division to this opinion.

Section 2 of the Georgia Retailers and Consumers Sales and Use Tax Act (Ga.L.1951, pp. 360, 362) as amended by Ga.L.1960, pp. 153, 158, levies and imposes a tax 'on the retail purchase, retail sale, rental, storage, use or consumption of tangible personal property, and the services' therein described, at certain rates.

Section 3(c) 1 defines 'retail sale' and 'sale at retail' and provides that 'For the purpose of the tax imposed by this Act, these terms shall include but shall not be limited to the following: * * * '(c) (as amended by the Act of 1953, p. 193) Sales of tickets, fees or charges made for admission to or voluntary contributions made to places of amusement, sports, or entertainment, including billiard and pool rooms, bowling alleys, amusement devices, musical devices, theaters, opera houses, moving picture shows, vaudeville, amusement parks, athletic contests, including wrestling matches, prize fights, boxing and wrestling exhibitions, football and baseball games, skating rinks, race tracks, public bathing places, public dance halls or any other place at which any exhibition, display, amusement or entertainment is offered to the public or place or places where an admission fee is charged, together with charges made for the operation of coin-operated musical devices and other such coin-operated amusement devices and charges made for participation in games and amusement activities.'' Paragraph (c)(2) of Sect. 3, as amended by various Acts, list numerous exceptions to the general terms 'sale at retail,' etc.

In construing this Act, the Supreme Court of this State in Oxford v. J. D. Jewell, Inc., 215 Ga. 616, 112 S.E.2d 601, a case involving the question of whether or not sales to the United States Government or any instrumentality thereof are taxable under the Act, said: 'Unless retail sales made by the retailer are exempt under provisions of the act, he must pay the tax on them. The nature of the sales is of no moment, except as the exclusion provisions of the act might affect them.' (Emphasis ours). It was said in that case and observed that '[t]he Georgia Sales and Use Tax is noted for the fact that it is all-inclusive, covering everything from the cradle to the grave. Exemptions are the rare exception.' In the dissenting opinion in that case, it was said: 'As previously pointed out, it is * * * the legal duty of a Georgia retail dealer in tangible personal property to collect the tax imposed by the act upon any, every, and all retail sales made by him, except those sales which the act exempts * * *.' Under these circumstances, it would seem that the Act taxes all retail sales as defined therein except those specifically exempted under the terms of the Act.

The Sales and Use Tax Act in its terms being general and in its terms containing express exemptions from the generality of the terms levying the tax '[i]t would seem unreasonable to assume, without a clear expression of such intention, that the Legislature intended that a tax should be imposed on those who complied with the mandate of the law but that those who flagrantly flaunted the law should not be required to pay such a tax.' Commonwealth v. Miller, 118 Pa.Super. 58, 180 A. 144. The above case from which the quotation was taken involved a tax on stored spiritous and vinous liquors, and the tax was sought to be imposed upon illegally manufactured whiskey. For similar cases, see Empire Vintage Co. v. Collins, 40 Cal.App.2d 612, 105 P.2d 391; annotations in 43 A.L.R. 799, 51 A.L.R. 1026, 118 A.L.R. 827, 160 A.L.R. 1225, 166 A.L.R. 89.

We find nothing in the Act which indicates any intention on the part of the legislature to differentiate between legal and illegal sales, and the general language of the Act should not be limited to legal sales only merely because the Act does not specifically tax illegal sales by referring to them as such. This fact does not automatically eliminate illegal sales. Unless there are other reasons for so construing the Act, it could be as readily argued that since the ligislature did not specifically tax legal sales by name, it was their intent to tax only illegal sales. In so construing the Sales and Use Tax Act, we are not unmindful that statutes are not always construed according to the letter, and general expressions may sometimes be restrained so as to make the statute bear reasonable construction (Forsyth v. Marbury, R. M. Charlt. 324, 334), and that in construing statutes a thing which is within the letter of the statute is not within the statute unless it be within the intention of the makers (Cook v. King, T. U. P. Charlt. 265), and that courts must regard substance and not adhere too closely to the letter (Moody v. Threlkeld, 13 Ga. 55(7)), and that when to follow the literal sense of words of the...