Court Opinion

ID: 8538467
Source: CourtListenerOpinion
Date Created: 2022-11-23 11:09:02.82793+00
Date Added: 2024-06-11T16:52:09.778900
License: Public Domain

Mr. Justice Belaval
concurring in the opinion of Mr. Justice Santana Becerra.
San Juan, Puerto Rico, November 30, 1965
I concur in the statement of facts and the doctrine of res judicata as stated in the opinion of Mr. Justice Santana Becerra. In the case of a refund, or a civil action in the nature of a refund, I do not agree with the principle established in the majority opinion in the sense that, since the full amount of the income tax was not paid, plaintiff-appellant has no right to recover any tax which she may have unduly paid. .
According to the facts set out in the majority opinion, plaintiff-appellant owed the sum of $14,207.25 of which she had paid $10,906.94 in different instalments. According to our former case law, when the tax has been paid in specified instalments or such a situation arises from the manner in which the distraint proceeding has been effected, the taxpayer was not bound to pay the full amount of the instal-ments before applying for refund of that portion which he believed he had paid in excess of the amount due, or which *831had been illegally collected from him. Anglade v. Sec. of the Treasury, 79 P.R.R. 785, 788 (Belaval) (1957); Inter-American Orange Crush v. Sec. of the Treasury, 81 P.R.R. 302, 304 (Per Curiam) (1959).
In overruling our former case law, the Court relies on Flora v. United States, 357 U.S. 63, 66, 72-75 (Warren) (1958). Flora is an interpretation of the legislative intention of certain tax laws of the United States which cover from the refund statute of 1866 up to the creation of the Board of Tax Appeals of 1924, and does not contain any constitutional doctrine worth our special deference. Mr. Justice Whittaker dissented from the majority opinion. We notice that no reference is made in our opinion to the second consideration of Flora v. United States (on reconsideration), 362 U.S. 145, 178-98 (Warren) (1960), in which Associate Justices Whittaker, Frankfurter, Harlan and Stewart dissented from the majority rule, the majority of 5-4 being composed only of Justices Warren, Black, Douglas, Clark .and Brennan.
In the first decision at p. 75 Mr. Chief Justice Warren, in answer to the argument that the part-payment remedy was necessary for the benefit of the poor taxpayer, states as follows: “It is suggested that a part-payment remedy is necessary for the benefit of a taxpayer too poor to pay the full amount of the tax. Such an individual is free to litigate in the Tax Court without any advance payment. Where the time to petition that court has expired, or where for some other reason a suit in the District Court seems more desirable, the requirement of full payment may in some instances work a hardship. But since any hardship would grow out of an opinion whose effect Congress in successive statutory revisions has made no attempt to alter, if any amelioration is required it is now a matter for Congress, not this Court.”
Those or similar words was what prompted the justi-ciable mind of our Legislative Assembly, because in adopting
*832the Income Tax Act of 1954 — § 272(b) (3) — the following remedy for partial payment of deficiencies was provided: “In the case of a taxpayer who appeals from the judgment of the Superior Court upholding a deficiency and is unable to pay the deficiency or is able to pay only part thereof, the Superior Court may order, provided that the appeal involves a substantial question and subject to the provisions hereinafter set out, that the appeal follow its course until its final disposition on its merits without payment of the total amount of said deficiency. In such case the taxpayer shall file with his writ of appeal in the Superior Court a petition stating the reasons for his inability to pay the deficiency in whole or in part and the facts on which he bases his claim that the appeal involves a substantial question. Should the Superior Court determine that the taxpayer is unable to pay the deficiency or is able to pay only part thereof, and that the appeal involves a substantial question, it shall order instead of the total payment, as the case may be, (A) that the appeal continue its course under the bond filed on appeal to the Superior Court if it is sufficient to answer for any deficiency that may be finally determined plus interest; or (B) that the taxpayer file a new bond to the satisfaction of the Court in an amount sufficient to answer for the deficiency plus interest for a reasonable period; or (C) that the taxpayer pay part of the deficiency and the unpaid remainder be bonded in the manner provided previously in subparagraphs (A) and (B). In the case of a taxpayer that has been relieved of the duty to file a bond in order to litigate his case in the Superior Court and who shows that he is unable to pay the tax, nor file a bond, if the appeal involves a substantial question, the Superior Court shall direct that the appeal be allowed and continued for payment or filing of bond.” See IV-IV Journal of Proceedings 2152-53 (1954), where it is stated that:
*833“Among the provisions to serve as relief to citizens, including the poor and the middle-class families and the owners of small businesses, it is well to point out ....
“The provisions of a procedural nature, both for the collection and the settlement of controversies under the Income Tax Act, include:
“Provisions permitting the litigation of the tax in the Superior Court without giving bond, or giving a bond in an amount less than that determined by the Secretary of the Treasury, and provisions permitting appeal to the Supreme Court without making full payment, or by payment of only a portion, of the tax and the giving of bond, and in certain cases, without payment and without bond.
“These provisions constitute a true step of advancement in the existing legislation, and protect the taxpayer in the event of inability to avail himself of a forum to challenge the validity or correctness of the tax assessed, both in first instance and on appeal, for reasons extraneous to the intrinsic validity or correctness of the assessment, such as the impossibility, at a certain moment, to give bond or to effect payment of the tax.”
There is no question that a provision such as this did not exist in the federal law at the time of the decision of Flora. See the Federal Internal Revenue Act of May 28, 1938, 26 U.S.C.A. § 272 (pp. 1102-05).
This is not the most appropriate case for determining definitively whether § 272(b) (3) of the Income Tax Act of 1954 applies only to a special refund case, as the same is established within the special tax procedure, or whether it includes any “collection” or “settlement of controversy” on the “validity” or “correctness” of the tax assessed, according to the new provisions included in the legislative history of § 272(b) (3).
Since the question is in some way related to the right of appeal, the law governing such right is the law in force at the time of rendering judgment. In Anglade — a case covering deficiencies for tax years 1941 to 1944 — the judgment *834was rendered by the Superior Court of Puerto Rico, San Juan Part, on February 12, 1954, and affirmed by this Court on March 19, 1957, that is, prior to the first opinion in Flora of June 16, 1958. At the time of deciding the Anglade case, we could have chosen any or none of the persuasions of the American case law in order to establish our own rule. In Orange Crush — a case covering deficiencies for tax years 1947 to 1949 — judgment was rendered by the Superior Court of Puerto Rico, San Juan Part, on June 18, 1954, and reversed by this Court on April 30, 1959, that is, subsequent to the first decision in the Flora case; however, since reconsideration was granted, the second decision affirming the former 5 to 4 was not handed down until March 21, 1960, that is, subsequent to our decision in Orange Crush.
The proper thing would have been to decide that until June 29, 1954, when our Income Tax Act of 1954 went into effect, any appeal from a former judgment in a typical action for refund, or any civil action in the nature of an action for refund, in the case of a tax paid in specified instal-ments, or inferred instalments, should be governed by our decisions in Anglade and Orange Crush' permitting appeal without full payment of the tax assessed, and from and after June 29, 1954, it should be governed by § 272(b) (3) of our Income Tax Act of 1954, which permits appeal in those cases in which the taxpayer proves that he is unable to pay the full amount of the tax or to guarantee the full amount by bond.