Appeal, No. 26, May T., 1957, from judgment of Court of Common Pleas of Dauphin County, Commonwealth Docket No. 180, 1955, in case of Commonwealth of Pennsylvania v. Progress Manufacturing Company, Inc. Judgment affirmed; reargument refused August 1, 1957.
John Y. Scott, for appellant.
George W. Keitel, Deputy Attorney General, with him Thomas D. McBride, Attorney General, for appellee.
Before Jones, C.j., Bell, Chidsey, Musmanno, Arnold and Jones, JJ.
OPINION BY MR. JUSTICE MUSMANNO
On August 2, 1954, the Department of Revenue accepted the capital stock report of the Progress Manufacturing Company, a Pennsylvania corporation, which announced its capital stock to be valued at $3,200,000, as appraised by the company's officers. On the basis of that valuation, the Department settled the tax at $15,753.54. The settlement was approved by the Auditor General on August 11, 1954. However, on April 28, 1955, with the approval of the Auditor General, the Department found the capital stock's value to be $4,250,000, and resettled the tax in the amount of $20,922.66.
The company protested the resettlement and petitioned the Board of Finance and Revenue for a review, which was refused. An appeal was then taken to the Court of Common Pleas of Dauphin County which, after a hearing without jury, dismissed the appeal and entered judgment in favor of the Commonwealth in the sum of $20,922.66. An appeal to this Court followed.
The re-evaluation of capital stock and resettlement of tax was accomplished by the Department under the authority of Section 1105 of the Fiscal Code (Act of 1929, P.L. 343, as amended; 72 P.S. 1105), which provides: "Within two years after the date of any settlement or resettlement made subsequent to June first, one thousand nine hundred and twenty-nine, except such as have been appealed from, the Department of Revenue with the approval of the Department of the Auditor General, may make a resettlement. Notice of such resettlement shall be given promptly to the party with whom or with which the resettlement was made. Whenever a resettlement shall have been made hereunder, the Department of Revenue shall resettle the account according to law, and shall credit or charge as the case may be, the amount resulting from such resettlement
upon the current accounts of the party with whom or with which it is made ..."
The company seeks a reversal of the decision of the Court below on two averments: (1) that Section 1105 of the Fiscal Code amounts to an unconstitutional delegation of legislative power; and (2) granting that the Department had the right to make a resettlement, it may not increase the tax except for clerical or mathematical errors, unless it has in its possession accounts and information which it did not have at the time of the original settlement.
In behalf of the thesis of unconstitutionality, the company argues: "It will be observed that the section contains absolutely no norm or standard to guide the taxing departments in determining when, and under what circumstances they shall act to reopen an account, theretofore closed, and set at rest by settlement or resettlement. So far as the Section provides, the Departments may, in their uncontrolled discretion open some cases and neglect or fail to open other cases. No conditions are laid down as to which cases shall be reopened and which not reopened; and, of course, no direction is given to the departments to open all cases or all cases of a given class exhibiting certain characteristics. The decision to reopen and resettle any particular tax account, as for example, the one ...