Court Opinion

ID: 4140118
Source: CourtListenerOpinion
Date Created: 2017-02-18 02:55:21.064484+00
Date Added: 2024-06-11T13:28:00.334087
License: Public Domain

EATFORNEYGENERAI.

                       OFTEXAS

Honorable George Ii.Sheppard
Comptroller of Publi~cAccounts
Austin, Texas
Dear Sir:               Opinion No. O-6195
                        Re: Whether~or not a claim for refund
                             of the tax on motor fuel exported
                             or lost by fire or other accident
                             is subject to a six months limita-
                             tion period for filing; whether'
                             such six months limitation period
                             in fire or other accident losses
                             runs from the time of the delivery
                             of the motor fuel'or from the date
                             of the accident; and whether the
                             Comptroller would be authorized to
                             deduct from a current claim filed
                             by an exporter, the amountof a
                             former claim filed after safd six
                             months period and paid in error.
                                                              ~.
        In your letters of the 7th and 26th of September, 1944,
you submit in substance the following questions:
        1. Is a claim for a refund of the tax on motor fuel
exported or lost by fire or other accident subject to 'the six
months limitation period for filing?
        2. If the answer is yes, does the six months llmita-
tion period on fire or other accident losses run from the time
of the delivery of the motor fuel or from the date of the
accident.
        3., If the six months limitati,,on
                                         period apolies in ex-
port cases, would the Comptroller's Department be authorized to
deduct from a current claim filed by an exporter the amount of
a former claim filed after said six months period and paid in
error by said Department?
        The motor fuel tax law is quite lengthy. Shorn of the
verbiage unnecessary to a solution-of the problems here involved,
Se'ction13 of said Act (Art. 7065b, Vernon's Annotated Civil
Statutes), being the section dealing with refunds, provides as
follows:
Hon. George Ii.Sheppard, page 2        o-6195

        "(a) Any person who'purchases motor fuel in
    the"State of Texas, and any distributor who appro-
    priates motor fuel~'foruse . . e for any purpose
    other than use in'a motor vehicle operated or in-
    tended to be operated in whole or in part upon any
    of'the public highways, roads, or streets of the
    State of Texas, on which'motor fuel tax has been
    paid, * . : shall be refunded the amount of such
    taxes o . m . . 0
        '"(b) . . s No refund of'the tax shall be
    granted on any motor fuel to any person . . . un-
    less such motor fuel has been purchased from or
    used by a licensed refund dealer s . .; and the
    Comptroller
      .,,       is hereby prohibited from issuing
    . . . . refund of the taxion any motor fuel notpur-
    chased from a licensed'refund dealer except refund ?
    on-'motorfuel exported,'lost by accident or pur-
    chased by the United States Government.
        "(c) An~invoice of exemption shall be demanded
    by the purchaser or recipient of motor fuelused for
           purposes, kid upon each delivery by a refund
    re’fund~
    dealer, or upon each appropriation foruse of motor
    fuel . . *, an invoice of exemption shall be issued
    . . . . . . .
        "'(a) When a claimant purchases or acquires
    for use motor fuel upon which a refund of the tax
    may be due, he shall within six months from the
    date of delivery of the motor fuel . .;, and not
    thereafter, file with the Comptroller an affidavit.
    e . . . e
         "No refund shall be made where motor fuel is
    used later than six months from date of delivery
    01" appropriation, and no refund shall ever be made
    where it appears from the Invoice, or from the af-
    fidavits, or other'evidence submitted, that the
    sale or delivery was made more thanksix (6) months
    prior to the date of filing of the application for
    refund.
         1,
          e . . If any person shall export or lose~by
    fire or other accident any motor fuel in quantities
    of one hundred (100) gallons OP more, '. o . or shall
    sell motor fuel 0 . . to the United States G'overnment,
    for the exclusive use of sa'idGovernment, claim for
    refund of the 'tax so"paid may be made in'the manner
    herein nrovided, or as the Comotroller may direct.
-   .

        Hon. George H. Sheppard, page 3          o-6195

                  Providea,,further, that a bondea and licensed
            diitributor may, in lieu of filing claim for refund
            of the tax paid on motor fuel thereafter exported or
            sold to the united States Government for thenexclu-
            sive use of said Government, take credit on any
            monthly r@p’tiet’ and tax ‘paymentmade to the’COmptrOl-
            ler withln six’(6)    months of the~date of said sale or
            exportation, for the amount of tax so paid.
                The Motor Fuel Tax Law contains an elaborate record and
        reporting system designed,to.‘preventtax evasion: Every person”’
        engaged in the production, &WUfkctUre,  refining,  t??atiSPOrtatiDtI
        or’sale of motor fuel Ln Texas Is required to keep records as to
        motor fuel handled’by themeand to make reports to the comptroller
        concerning its possession and disposition, the purpose of these
        requirements being to gLve the Comptroller information as to
        every gallon of motor’fuel produced’in or’ imported into the State
        of Texas. This elaborate record system greatly assists ‘the
        Comptroller in collectFng the’tax, checking refund claims and
        preventing tax evasion and fraud.
                  Obviously, ‘the passage of time makes the checking of,
        the motor fuel on a given date more difficult. Consequently,
        the Legislature   saw fit in the~.abovestatutory provlsions to fFx
        the six months period of limitation, within which certain refund
        claims must be filed.
                 The answer to ‘thefirst question turns upon a proper
        construction of the statutory provision that claim for refund
        incases of export accidental loss, or~‘salesto the United ,
        States Government ‘may be made in the manner herein provided,
        or as the Comptroller may direct. I’ Section 23 of the Act’~‘in
        questYon gives the Compti?bller power to promulgate rules and
        regulations for the enforcement of the M-ctor Fuel Tax I&w ; We
        are”advised that no rule or regulation has been promulgated by
        your departmen? fixing.a time 1imLt within which.a claim’based
        on exports or accidental losses may be filed, if; indeed, you
        could Iawfully fix other than a six months limitation period’.
        Suffice it”to say that you havenot done so, and we.do not pass
        upon“your authorLty to do so, same not being necessary in reach-
        ing a decision In this opinion.
                                                                      I
                 Refuhd claims on”exports and accidental losses, then,
        ai?& to “be made’In the manner herein provided,“’-We think this
        language shows a”legislative Intent that the balance of the’Act
        be looked to as’‘a pattern for filing requirements for such claims.
        We think the’words “In’the manner herein provided” imply a six
        months limitation ‘period0 Section 13 (d) of the Act, wherein
        these’words appear, is replete with the Mea of a SJx months.
        limitation period, the words “sfx (6) months” appearing in said
Hon. George K. Sheppard, page 4              Q -6195

Section no less than five times. Our conclusion in the matter
is further ~strengthenedin that the"Act provides (fourth para-
graph of Section 13 d) that bonded snd licensed distributors,
oh motor fuel exported or sold to the Un‘itedStates Government,
may, 1n lieu offiling refund claims, take credit on their
monthly report and tax payment "within s~ix(6) months-'ofthe
date"of said~sale or exportation ~. . .' for the tax paid. It
appea~rs'unreasonableto assume that the Legislature'infended
to impose a six months limitation PerLod during which a d'istri-
butor could collect a refund by listing St on hls~'reportaspan
off&t against taxes he owed the State, and yet have'no such
limitation on his direct application for'such refund. We'con-
elude, therefore, that the Legislature In Its use of'the words
"in the manner herein provided" Intended that the refund claims
there'inreferred to should be subject to a six months limitation
perlod for filing.
        The second question deals with the method of applica-
tion of this rule In cases of motor fuel loss by fire or other
accident. Again we must be guided by the pattern revealed in
the remainder of the Act.
        A close analysis of~Sectlon 13 of the Act reveals that
motor fuel tax refunds are authorized in five general situations
as follows:
        (1) Sale by a licensed refund dealer to a purchaser for
a non-highway use.

        (2)  'Yp;w;;a;;~;er for
                              ,,non-highway use by a distributor
licensed as a                .
        (3) Exports.
elusive 62:       Sale to the United St ates Government for its ex-
              0
        (5) Loss by fire or other accident.
        In the first two cases mentloned, Section 13(c) of the
Act requires that the refund dealer issue an invoice of'exemp-
tion at the time of delivery OP at the time of appropriation,
respectively, As we construe,the Statute, the six months period
In the first situation, supra, begins to run at the time of
delivery of the motor fuel to the purchaser; and in the second,
the period begins with the appropriation, at which time the
claimant "acquires for use" the motor fuel in question, receiv-
ing, at the time he appropriates It, at least a constructive
"delivery."
Hon. George H. Sheppard, page 5         0 -6195

      " In the third and fourth situations, supra;the fourth
paragraph of Sectlon 13'(d)Provides that a bonded and licensed
di.strLbutormay obtaln a refund 'onmotorfuel exported or sold
to the Government by crediting same as an offset on his monthly
report and tax payment "within six (6) months of the date of
said sale or exportati'on."'We"have no difficulty in holding
tha'tan affirmative clalm'for refund on motor fuel exported or
sold to the Government must be filed within the same'tlme limit
as the credit on the monthly report above referred to.
        In reviewing the picture as thus far made, we find that
in each of the four situations, the claimant has a'full six
months between the time he knows he will have's claim and the
deadline for filing. A person whose only basis for refund is
loss of'motor fuel by accident obtains his first knowledge oft,
the existence of a situation in which the law allows a refund,
at the time of the loss. He is not In a position to exercise
any diligence with reference to the filing of a claim prior to
that time. Accordingly, in keeping with the pattern setby'the
Statute in'other refund situations, it is our oplnionthat a
claimant has six months from the date of the accidental loss In
which to file h1.sclaim rather than'from the date of'delivery.
It is Immaterial under the statute as to when an exporter or a
seller to the Government fir'stacqu'iredthe motor fuel. We
think It likewise follows that the date of purchase br acquisi-
tion by one who suffers loss by accrdent Is immaterial. '.Acon-
trary holding would discriminate against the victims of adver-
sity, and the statute reflects no such legislative intent.
        Question number three.presents a fact situation wherein
a claim for refund, filed,by an exporter after the six months
period, hasbeen paid." Our Opinlbn No. o-2765 discussed the
payment of a refund claim which fafled~'tomeet statutory'.'require-
ments'and'concluded that "asthe claimant has caused a warrant
to Issue and be paid upon such claim, void by reason of his'own
acts and omissions, he becomes indebted to the State of Texas
for moneys improperly had and received from the Treasury of'the
State',In the amount of such warrant . 0 . We think the same
rule aDplies here and that said claimant becomes indebted to
the State for the"amount of'such warrant. "Further, It is our
opinion that in paying a current refund claim filed'by said
exporter, your department may lawfully deduct the amount of this
debt due the State, and Issue warrant for the difference.
        In so holding we~'arenot,unmindful of Article 4350,   Re-
vised Statutes, which reads:
       "No warrant shall be issued'to any person in-,
   debted to the State,"or to his agent, or assignee,
   untL1 such debt is paid."
Hon. George H. Sheppard, page 6         o-6195

        The rightsof the State to offset a debt due.it from a
payment by the State to ttiedebtor, even after warrant for the
full amount had issued, was upheld in the case of Citizens'
State Rank v.~AmerIcanSurety Co., 65 S.W. (2d) 778, error re-
fused. In that case, a sheriff filed claim with the State for
fees Andyreceived a deficlehc'ywarrantwhich he endorsed to'the
bank. Ttie'Comptrollerrefused to allow the warrant to be paid
when It matured becau'sethe sheriff had collected certain~fees
from the State which were unlawful, and the Comptroller "offset
and deducted therefrom the amount of unlawful items.      " The
bank sued the sheriff and his surety. The Court held'that the
surety was not liable. The Court said,:
        "The obligatfon of appellee, as surety, on the
    bond to pay'the State the unlawful'fees collected,
    ceas'edwhen the State collected such fees, which it
    was authorized to do, by deducting the amount thereof
    from the deficiency certifdcate theretofore issued to
    the sheriff."
        Judge S eer, in the case of Shannon'v. Ratcher, 299 S.W.
227 (Comm, App.P states the purpose of Article 4350 as follows:
"The Statute was evidently passed in order that a person.might
not receive money from the State when indebted to the State, and
then, If said persons were lnsolve,nt,prevent the State from
recovering the amount due it." It~is obvious that a withholding
of'the‘amount of the debt tothe State such is contemplated in
this case affords ample protection to the State and satisfies
the intent of the Statute.
        Judge Alexander in the case of Thompson v. Prince, 126
S.W. (2d) 574, error'refiised,states: "In order'to authorize
the offset of ohe claim against another, the demands must be."
mutual. 0 . that is',they itiust be between the same parties and
must be due in'the same capacity OP right;" We think the offset
here involved complles"with these requirements, and with t'he
further requirement that the demands in question be liquidated
demands; Other authorities supporting out holding include;
Rule 97, Texas Rules'of Civil Procedure; 57 C-J. 454; Wood
v. N,Y,, 73 N.Y. 556; Price v. Lancaster CO., 24 Pa. Co. 225;
24 R.C.L. 813; Johnson v. City of Aberdeen, 266 P. 707 (Wash.).
        In order to avoid .misunderstanding,'wethink it appro-
priateto mention that the'rule here enunciated d,oes,notwork
both ways- A tax payer, on grounds of public policy, Is not
permitted to offset a refund due him by the State agatnst his
liability for taxes'owed to the State, in the absence of statu-
                 State v, Humble Oil & Rfg. Co. 16g'S.W. (2d)
;o";"(~~~;""c';"~:.
                 The Act only gives such statutory authority to
a limited group, to-wit, bonded and licensed distributors on
Hon. George H. Sheppard, page 7         0 -6195

claims based upon exports or sales to the United States Govern-
ment. See fourth paragraph of Section 13(d).
       We trust this satisfactorily answers your inquiry.
                            Yours very truly
                         ATTORNEYGENERAL   OF TEXAS

                            By    s/J. Arthur Siindlin
                                    J. Arthur Sandlin
                                    Assistant
JAS:fo:wc
BPPRUVED OCT 9, 1944
s/Carlos C. Ashley
FIRST ASSISTANT
ATTORNEY GENERAL
Approved Opinion Committee By s/BWB Chairman