Court Opinion

ID: 3812813
Source: CourtListenerOpinion
Date Created: 2016-07-06 07:50:45.462629+00
Date Added: 2024-06-11T07:38:19.238198
License: Public Domain

If the order involved here were alleged to be erroneous merely, the majority opinion would reach the correct conclusion and the authorities supporting it would be applicable. But it was alleged that the order was void on its face for the reason that the Tax Commission was without jurisdiction and had no power to enter an order assessing additional income taxes against the taxpayer for the year 1933.
Section 27(d), ch. 195, S. L. 1933, reads as follows:
"Except as provided in paragraph (e) of this Section, the amount of income taxes levied by any provision of this Act shall be assessed within two years after the return was filed, and no proceeding, by tax warrant or in court, without assessment for the collection of such taxes, shall be begun after the expiration of such period."
It was alleged that the order of additional assessment was not entered within the two-year period mentioned in section 27 (d) or within any extension provided for in paragraph (e). The demurrer admitted these allegations.
If the order in the instant case was void on its face, an appeal therefrom would not afford an adequate and speedy remedy. Orders or judgments of courts or boards, void on their face, do not come within the rule that appeal affords an adequate remedy. Neither does the payment of the sum thereby demanded, and suit to recover the same, afford an adequate remedy. An order or judgment, void on its face, whether promulgated by a court or by an administrative board, reflects conclusively the want of due process of law. To exact money thereunder, whether by way of temporary deposit or by permanent payment, as a condition to the right to abrogate the same, would be to deprive a party of his property without due process of law.
I find nothing in the act under consideration to indicate that the Legislature intended wholly to abrogate the right given by 12 O. S. 1941 § 1397, to enjoin the collection of an illegal tax. *Page 33 
There is no indication therein of an intention to require the taxpayer to give up his money in compliance with an order wholly void on its face. Such an order is of no force or effect whatever.
The majority opinion relies largely on Cadwalader v. Sturgess, 297 Fed. (3d C.C.A.) 73, as a case involving a similar situation, and as authority for the contention that the statute now under consideration affords an adequate remedy.
I am unable to agree that the cited case is in point. There the Commissioner of Internal Revenue in due time assessed an additional income tax against the taxpayer. A protest or claim for abatement of the revised assessment was filed within statutory time, and certain proceedings had thereon extending over a period of more than five years. Notice and demand for payment was made, and the taxpayer, instead of paying the sum demanded and proceeding by suit to recover the same as required by the statute, went into equity to restrain the threatened collection, alleging that such collection was prohibited by the five-year limitation contained in the statute. The limitation in question there reads as follows:
"No suit or proceeding for the collection of any such taxes due under this act . . . shall be begun, after the expiration of five years after the date when such return was filed."
The court refused to pass upon the legality of the assessment or threatened collection of the tax, but held that the remedy provided by the act was adequate, and that injunction would not lie in view of section 3224, R. S., which provides that "no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court." It was further held that the question whether the collection was legal after the expiration of the five-year limitation could be tried in the action at law for the refund of the amount paid.
Void orders of state assessing boards are subject to collateral attack; but when acting in good faith and within their jurisdiction their orders are not subject to annulment by injunction. 61 C. J. 758-759, § 985. The reverse is true. If such boards exceed their jurisdiction, their orders are subject to injunction. Roberts, County Treas., v. Fair, 174 Okla. 139,50 P.2d 152. In that case the county treasurer, proceeding under the tax ferret law, assessed as omitted property certain real estate allegedly appearing on the rolls as grossly undervalued for assessment. Though the statutes authorize appeal in such case (68 O. S. 1941 §§ 481, 482), the court held that the act of the treasurer was wholly outside his statutory authority, and that the district court had jurisdiction to enjoin such act.
It is to be noted that the limitation in the federal statute is directed wholly at the collection of any tax due under the act, while our section 27(d), supra, is directed at the assessment and at the collection also. It is further revealed in Cadwalader v. Sturgess, supra, that the period of five years had not elapsed between the time the tax was assessed and became due and the time the suit for injunction was commenced. Therefore, it was not shown that the officers were attempting to collect the tax after the time limited therefor had expired. Neither were they acting under an order void on its face. Had they been so acting, the decision might have been different.
Therefore, if the order here under consideration was actually void on its face, in my opinion the plaintiff taxpayer has pursued the proper remedy.
As said above, the order shows that the assessment, within the meaning of the statute, was not made within two years.
The initial element of consideration in such case is that "statutes requiring or authorizing a levy of taxes are to be construed most strongly against the government and in favor of its citizens." Rollins v. Heuman, 171 Okla. 435, 43 P.2d 147. And another rule of primary consideration is, "public officers have only such authority as is conferred upon *Page 34 
them by law, and such authority must be exercised in the manner prescribed by law." Shaw v. Grumbine, 137 Okla. 95, 278 P. 311.
The provisions in section 27(d), supra, were clearly intended as a limitation on the jurisdiction of the commission. It can assess no income tax after two years from the date the return is filed. That it was intended to deprive the commission of further power over the subject matter is made clear by the language employed in paragraph (e) of section 27, wherein it is provided:
"Where, before the expiration of the time prescribed in paragraph (d) for the assessment of the tax, both the commission and the taxpayer have consented, in writing, to its assessment after such time, the tax may be assesed at any time prior to the expiration of the period agreed upon, . . ."
These provisions require the commission to act within two years, either by commencing actual proceedings to assess the tax (see Protest of Pentecost  Hodges, Inc., 186 Okla. 390,98 P.2d 606), or by obtaining from the taxpayer within the two years a written agreement that the assessment may be made after the expiration of the period. The written agreement is analogous to commencing the proceedings for assessment within the two-year period.
The above provisions are clear and unambiguous. If a doubt as to their meaning existed; if the limitation of time could be interpreted both as a limitation of jurisdiction and as a defense in bar subject to waiver, we should apply the rule that "where a statute imposing a tax is susceptible of two constructions, if the legislative intention is in doubt, the doubt as a rule should be resolved in favor of the taxpayer." But I think there is no occasion here to apply that rule in order to uphold the plaintiff's contention, for in my opinion the statute is susceptible of but the one construction above.
I therefore respectfully dissent.