Case Name: GTE Spacenet Corporation, as Successor in Interest to ASC Telecommunications, Inc., and Another, Respondent, v. New York State Department of Taxation and Finance et al., Appellants. (And One Other Action.)
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1994-02-24
Citations: 201 A.D.2d 429
Docket Number: 
Parties: GTE Spacenet Corporation, as Successor in Interest to ASC Telecommunications, Inc., and Another, Respondent, v New York State Department of Taxation and Finance et al., Appellants. (And One Other Action.)
Judges: 
Reporter: Appellate Division Reports
Volume: 201
Pages: 429–430

Head Matter:
GTE Spacenet Corporation, as Successor in Interest to ASC Telecommunications, Inc., and Another, Respondent, v New York State Department of Taxation and Finance et al., Appellants. (And One Other Action.)
[607 NYS2d 677]

Opinion:
Order, Supreme Court, New York County (Shirley Fingerhood, J.), entered on or about August 27, 1993, which granted plaintiff's motion for a preliminary injunction restraining defendants from conducting an administrative hearing con cerning plaintiffs claimed tax deficiencies, unanimously affirmed, without costs.
Where the taxpayer claims that a tax statute is wholly inapplicable, it may bring a declaratory judgment action without exhausting administrative remedies (see, Xerox Corp. v Department of Taxation & Fin., 140 AD2d 945, 946, lv denied 72 NY2d 809). Plaintiff in this action for a declaratory judgment has sufficiently demonstrated that it is likely to succeed on the merits of its challenges to Tax Law § 183, 184, 186-a and 186-c, all of which are to be narrowly construed in favor of the taxpayer (Debevoise & Plimpton v New York State Dept. of Taxation & Fin., 80 NY2d 657, 661), to satisfy the initial criterion to entitle it to a preliminary injunction of the administrative hearing on its tax liabilities. Moreover, without an injunction, plaintiff would be forced to defend the administrative proceeding to its conclusion even though a judgment in the within action has the potential to render the administrative proceeding unnecessary. Under the circumstances, the IAS Court's conclusion that plaintiff faced irreparable harm and was favored by a balancing of the equities was not an abuse of discretion (see, Gambar Enters. v Kelly Servs., 69 AD2d 297, 306).
We have considered defendants' remaining arguments and find them to be without merit. Concur — Carro, J. P., Ellerin, Rubin, Nardelli and Tom, JJ.