Appeal from decree of Court of Common Pleas No. 2 of Philadelphia County, March T., 1953, No. 3922, in case of The Bell Telephone Company of Pennsylvania v. City of Philadelphia, George S. Forde, Revenue Commissioner, and Walter Pytko, Commissioner of Licenses and Inspections, of the City of Philadelphia.
John B. Hannum, with him Thomas A. Everly, Jr., Peter F. Pugliese, John B. King, and Pepper, Hamilton & Scheetz, for appellant.
Levy Anderson, First Deputy City Solicitor, Gerald Gornish, Assistant City Solicitor, and Edward G. Bauer, Jr., City Solicitor, for appellees.
Bell, C. J., Musmanno, Jones, Cohen, Eagen, O'Brien and Roberts, JJ. Opinion by Mr. Justice Cohen. Mr. Chief Justice Bell dissents and would deny any assessment of taxes prior to 1961. Mr. Justice Jones dissents. Mr. Justice Roberts dissents generally, and in addition, would deny any assessment of taxes prior to 1961.
Pursuant to the power granted by the Act of August 5, 1932, P. L. 45, § 1, as amended, 53 P.S. § 15971, known as the Sterling Act, the City of Philadelphia adopted an ordinance imposing a Mercantile License Tax upon persons engaged in certain business activities within the City. This Act also has the effect of prohibiting the imposition of any tax by the City on items subject to a State tax or license fee.
The Bell Telephone Company (Bell), appellant, and others in 1953 successfully sought a decree in equity prohibiting as to them the imposition of the Mercantile License Tax. That decree perpetually enjoined the City from enforcing or attempting to enforce the Mercantile License Tax against Bell.
In 1961, without seeking a modification of the 1953 injunction, the City assessed a Mercantile License Tax against Bell's receipts from directory advertising, miscellaneous sales, rentals, commissions, dividends, and interest, contending that the earlier injunction did not proscribe such assessments. Bell thereupon filed a petition
for a citation, and the chancellor held that the City's assessment violated the 1953 decree.
The City then withdrew the assessment and filed a petition seeking a modification of the 1953 injunction. The trial court held that its original decree, which enjoined collection perpetually, was in error and it modified that decree so as to restrain the enforcement of the City tax only for the years preceding and including 1953. At the same time, that court held that the question as to whether Bell's incidental receipts were subject to the Mercantile License Tax was a proper one for consideration by the Philadelphia Tax Review Board. It is from this decree that Bell appeals.
The issues presented in this appeal are: (1) whether the court below erred in modifying its original decree, and (2) if it was not in error what is the proper forum for considering Bell's objections.
The original decree was entered on the basis of the Sterling Act. There was no determination of unconstitutionality of the ordinance but only a holding that the Sterling Act prohibited its application. We are, therefore, not faced with the question of whether enforcement of an unconstitutional taxing statute may be perpetually enjoined, but only with the question of whether an erroneous interpretation of a taxing statute by a tax ...