Court Opinion

ID: 2871544
Source: CourtListenerOpinion
Date Created: 2015-09-06 04:00:23.262271+00
Date Added: 2024-06-11T13:30:30.465859
License: Public Domain

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

NO. 03-05-00491-CV

Asad Kawaja a/k/a Asud Jabra Khawaja, Appellant

v.

State of Texas, Appellee

FROM THE DISTRICT COURT OF TRAVIS COUNTY, 53RD JUDICIAL DISTRICT
NO. GV400398, HONORABLE LORA J. LIVINGSTON, JUDGE PRESIDING

 

M E M O R A N D U M   O P I N I O N

                        Appellees the State of Texas, the City of Houston, and the Transit Authority of
Houston (collectively “the State”) sued appellant Asad Kawaja to recover delinquent sales taxes. 
The State filed a motion for summary judgment and, following a hearing on the motion, the trial
court granted summary judgment in favor of the State.  Kawaja appeals from the trial court’s
judgment arguing that the trial court erred in granting summary judgment because he conclusively
showed that he did not owe the taxes imposed by the State.  We affirm the trial court’s judgment.

BACKGROUND
                        Kawaja operated a small convenience store by the name of “FNB Market” out of  the
front room of his house.  On March 23, 2004, the State filed suit to recover unpaid sales taxes,
penalties, and interest for the period of January 1, 1998, through June 30, 2001.  In its motion for
summary judgment, the State only sought to recover sales taxes, penalties, and interest from January
1, 1998, to March 31, 2001.  The State attached certificates of delinquency from the Texas
Comptroller of Public Accounts stating the amounts of delinquent taxes and establishing its
entitlement to summary judgment.
                        In response to the State’s motion for summary judgment, Kawaja filed copies of
Schedule C from his federal income tax returns for 1998 and 2000, a warranty deed for the sale of
his home, and an affidavit in which he testified that he closed his business on March 26, 2001, and
made no more sales after that date.  Kawaja’s affidavit further stated that he never applied more than
a 10% mark-up on beer sales, he never sold tobacco products, and tropical storm Allison destroyed
all of his business records.
                        After a hearing on the State’s motion, the trial court granted summary judgment in
favor of the State for the amounts specified in the comptroller’s certificates.  The trial court found
that Kawaja owed $43,828.52 to the State of Texas, $7,200.97 to the City of Houston, and $7,200.98
to the Transit Authority of Houston for unpaid taxes, penalties, and interest.  The trial court also
awarded $12,018.75 in attorney’s fees and $554.75 in court costs to the State of Texas.  From this
judgment, Kawaja appeals.

DISCUSSION
Standard of Review
                        We review the trial court’s grant of summary judgment de novo.  Provident Life &
Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003).  To prevail on a traditional summary
judgment motion, a movant must show that no genuine issue of material fact exists and that he is
entitled to judgment as a matter of law.  Tex. R. Civ. P. 166a(c).  When reviewing a summary
judgment, we accept all evidence favorable to the nonmovant as true, and we indulge every
reasonable inference and resolve any doubts in the nonmovant’s favor.  Southwestern Elec. Power
Co. v. Grant, 73 S.W.3d 211, 215 (Tex. 2002).

Summary Judgment Evidence
                        In two issues, Kawaja contends that the trial court erred in granting the State’s motion
for summary judgment because, in response to the State’s motion, he conclusively established that
he did not owe the full amount of taxes stated in the comptroller’s certificates.  The State counters
that the evidence presented by Kawaja fails to overcome the presumption of correctness accorded
the comptroller’s certificates.
                        A taxpayer attempting to deny liability for taxes bears a heavy burden once the
comptroller produces a certificate stating the amount of delinquent sales taxes.  Sundown Farms, Inc.
v. State, 89 S.W.3d 291, 293 (Tex. App.—Austin 2002, no pet.).  The comptroller’s delinquency
certificate is prima facie evidence of both the delinquency and the amount of tax owed.  Tex. Tax
Code Ann. §§ 111.013(a), 151.603 (West 2002).  The comptroller’s delinquency certificate creates
a presumption of correctness in the taxing authority’s claim, which the taxpayer must overcome to
defeat summary judgment.  Hylton v. State, 665 S.W.2d 571, 572 (Tex. App.—Austin 1984, no
writ).  If unrebutted, the certificates are sufficient to establish the amount owed by the taxpayer as
a matter of law.  Baker v. Bullock, 529 S.W.2d 279, 281 (Tex. Civ. App.—Austin 1975, writ ref’d
n.r.e.).  To overcome the presumption of correctness accorded the comptroller’s delinquency
certificates, “the  taxpayer must conclusively establish that he owes no tax.”  State v. Glass, 723
S.W.2d 325, 327 (Tex. App.—Austin 1987, writ ref’d n.r.e.).  The taxpayer must present “evidence
tending to support the contrary as would be conclusive, or evidence which would be so clear and
positive it would be unreasonable not to give effect to it as conclusive.”  Hylton, 665 S.W.2d at 572. 
A taxpayer’s vague, self-serving, or conclusory allegations will not suffice to overcome the
presumption of correctness in the comptroller’s certificates of delinquency.  Baker, 529 S.W.2d at
281.
                        Faced with the comptroller’s certificates of delinquency attached to the State’s motion
for summary judgment, Kawaja had the burden to present conclusive evidence to overcome the
presumption of correctness.  We hold as a matter of law that Kawaja failed to discharge this burden.
                        Kawaja’s evidence consisted primarily of his conclusory statements that (1) he made
no sales after his business closed on March 26, 2001; (2) his business records had been destroyed
as a result of flooding caused by tropical storm Allison; (3) he did not apply more than a 10% mark-up to his sales of beer; and (4) he never sold tobacco products.  Kawaja also presented copies of
Schedule C filed as part of his federal income tax returns in 1998 and 2000 and a general  warranty
deed showing that he sold the house out of which he operated his business on April 26, 2001. 
Because the State only sought to recover unpaid taxes from January 1, 1998, to March 31, 2001,
Kawaja’s statements that he closed his business and made no more sales after March 26, 2001, along
with the warranty deed showing that Kawaja sold his house on April 26, 2001, are irrelevant.  Nor
do Kawaja’s remaining statements and documentary proof  “conclusively” establish that he owes 
no tax.  Kawaja was required to come forward with evidence conclusively establishing that he owed
no tax during the audited period.  See Glass, 723 S.W.2d at 327.  When viewed in its entirety, the
proof offered by Kawaja fails to overcome the presumption of correctness in the comptroller’s
certificates of delinquency.  See id. at 328.
                        Although Kawaja attempts to explain this absence of proof by claiming that his
business records were destroyed in a flood, we cannot accept Kawaja’s testimony on its face as
conclusive evidence.  See id.  He neither produced nor reconstructed any business records.  See id. 
To allow Kawaja’s self-serving statements to overcome the presumption of correctness would render
the statutory scheme requiring taxpayers to keep and produce records meaningless.  See Hylton, 665
S.W.2d at 573.

CONCLUSION
                        We overrule Kawaja’s issues and affirm the judgment of the trial court.
 
 
                                                                        __________________________________________
                                                                        Jan P. Patterson, Justice
Before Justices B. A. Smith, Patterson and Puryear
Affirmed
Filed:   June 8, 2006