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COMMONWEALTH v. ALLIED BUILDING CREDITS (06/25/56)

June 25, 1956

COMMONWEALTH, APPELLANT,
v.
ALLIED BUILDING CREDITS, INC.



Appeal, No. 2, May T., 1956, from decree of Court of Common Pleas of Dauphin County, Commonwealth Docket 1952, No. 132, in case of Commonwealth of Pennsylvania v. Allied Building Credits, Inc. Decree affirmed.

COUNSEL

Stephen B. Narin, Deputy Attorney General, with him George W. Keitel, Ralph S. Snyder and Edward Friedman, Deputy Attorneys General, and Herbert B. Cohen, Attorney General, for appellant.

John Y. Scott, with him Philips, Farran & McKeag, for appellee.

Before Stern, C.j., Jones, Bell, Chidsey, Musmanno and Arnold, JJ.

Author: Chidsey

[ 385 Pa. Page 371]

OPINION BY MR. JUSTICE CHIDSEY

The Commonwealth appeals from the final decree of the Dauphin County Court declaring invalid and setting aside a settlement and resettlement of the appellee's corporate net income tax for the fiscal year ended November 30, 1943. The court's action was based on the failure of the tax officers to comply with Section 8 (a) of the Corporate Net Income Tax Act, the Act of April 8, 1937, P.L. 227, 72 PS ยง 3420h. (a) which reads: "(a) All taxes due under this act shall be settled by the department, and such settlement shall be subject to audit and approval by the Department of the Auditor General and shall, so far as possible, be made so that notice thereof may reach the taxpayer before the end of a year after the tax report was required to be made.".

The case was heard without a jury. By agreement of counsel all of the material and relevant facts were submitted to the court in a written stipulation from which it appeared: On March 7, 1944 appellee filed its corporate net income tax report for 1943 upon which it computed and paid a tax thereon in the amount of $100.70; on March 13, 1946 appellee filed a report of change and paid an additional tax of $4.65 as a result of changes made in its net income by the Federal Government; notice of settlement was mailed to appellee on August 2, 1951 [more than 7 years after the filing of the taxpayer's report] when it was informed that on

[ 385 Pa. Page 372]

July 5, 1951 the Department of Revenue had settled and on July 18, 1951 the Auditor General had approved an account for the tax in the amount of $770.55; on January 2, 1952 the Departments of Revenue and of the Auditor General refused appellee's petition for a resettlement; on January 21, 1952 the Department of Revenue made a resettlement increasing the amount of the tax to $840.83 as a result of the report of change. This resettlement was approved by the Auditor General on January 23, 1952. On May 15, 1952 the Board of Finance and Revenue refused appellee's petition to review, and on July 7, 1952 appellee paid the balance of the $840.83 found due under the resettlement. In addition to the foregoing it was also expressly stipulated that there was no evidence for the court's consideration that it was not possible for the Department of Revenue to settle and for the Auditor General to audit and approve such settlement so that notice thereof would reach appellee before the end of a year after the tax report was required to be made.*fn1

Appellee appealed to the Dauphin County Court which after hearing and argument, filed an opinion and order directing judgment to be entered in favor of the Commonwealth "... in the amount of $105.35, which judgment having been overpaid shall be marked satisfied; and, further, a credit of $735.48 is hereby directed to be entered in favor of the ... Allied Building Credits, Inc., on the proper books and records of the Department of Revenue and the Department of the Auditor General, unless exceptions are filed within the time limited by law. ...". Exceptions were filed by the Commonwealth which were dismissed by the court en banc which filed an opinion and decree affirming the order theretofore entered. This appeal followed.

[ 385 Pa. Page 373]

The decree is affirmed on the following excerpts from the opinions of the learned court below: "The object of all interpretation and construction of laws is to ascertain and effectuate the intention of the Legislature. To give effect to that intention, after first ascertaining what it is, is the task given to the courts. Act of May 28, 1937, P.L. 1019, sec. 51 (46 P.S. 551); Kearcher v. Mt. Oliver Borough Council, 363 Pa. 148, 151 (1949); Panik v. Didra, 370 Pa. 488, 493 (1952). For the purpose of ascertaining legislative intent the Statutory Construction Act of May 28, 1937, P.L. 1019, Sec. 52 (46 P.S. 552) provides in part: 'In ascertaining the intention of the Legislature in the enactment of a law, the courts may be guided by the following presumptions among others: (1) That the Legislature does not intend a result that is absurd, impossible of execution or unreasonable; (2) That the Legislature intends the entire statute to be effective and certain;' Section 8(a) of the Corporate Net Income Tax Law, Act of April 8, 1937, P.L. 227, as amended (72 P.S. 3420h et seq.), provides, 'so far as possible', a one (1) year limitation after the date on which the tax report must be filed within which notice of the settlement of the tax shall be given to the taxpayer. Section 8(c) provides that a resettlement of the taxpayer's account may be made within two (2) years after a settlement has been made, and thereafter only under certain enumerated conditions not here applicable. Section 10 provides that each corporate taxpayer ...


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