Appeal from order of Court of Common Pleas of Dauphin County, No. 318 Commonwealth Docket, 1962, in case of Bethlehem Steel Company v. Board of Finance and Revenue.
William H. Wood, with him Metzger, Hafer, Keefer, Thomas & Wood, for appellant.
George W. Keitel, Deputy Attorney General, with him William C. Sennett, Attorney General, for Board of Finance and Revenue, appellee.
Bell, C. J., Musmanno, Jones, Cohen, Eagen, O'Brien and Roberts, JJ. Opinion by Mr. Justice Jones. Concurring and Dissenting Opinion by Mr. Justice Cohen. Concurring and Dissenting Opinion by Mr. Justice Roberts.
The question presented on this appeal is whether certain petitions seeking the refund of corporate net income taxes were timely filed with the Board of Finance and Revenue (Board) of the Commonwealth of Pennsylvania?
In Bethlehem Steel Co. v. Board of Finance and Revenue, 429 Pa. 84, 85, 86, 87, 239 A.2d 389 (1968), we reviewed the pertinent facts: "For the years 1951 and 1952, Bethlehem Steel Company [Bethlehem] filed Net Income Tax Reports, paid the taxes computed in accordance with such reports and the Commonwealth
of Pennsylvania settled the taxes on such reported basis.
"On July 5, 1957, Bethlehem filed with the Board of Finance and Revenue [Board] petitions for a refund of the taxes paid in each of the two years. The basis of both petitions was that Bethlehem and the Commonwealth had erred in arriving at the amount of taxes due: (1) in the inclusion in the denominator of the gross receipts allocation fractions of net profits derived by Bethlehem from the sale and maturity of United States securities during 1951 and 1952 rather than the inclusion of the gross proceeds from such securities transactions; (2) in the inclusion in the numerator of the gross receipts allocation fractions of net profits from the sale and maturity of securities since neither the net profits nor the gross proceeds from such sources arose from any transaction of Bethlehem within Pennsylvania.
"On May 3, 1962, the Board denied Bethlehem's petitions for refund 'for lack of jurisdiction under Section 503 of the Fiscal Code in that the petition[s] [were] not timely filed.'
"On June 6, 1962, Bethlehem instituted in the Court of Common Pleas of Dauphin County an action of mandamus against the Board to compel it to grant the refunds. The Board filed an answer to this action of mandamus alleging that the court lacked jurisdiction to grant the relief sought by Bethlehem. The court below, being of the opinion that Bethlehem's remedy was by an appeal to this Court in the nature of a narrow certiorari, dismissed Bethlehem's complaint in mandamus."
On appeal, we held that, while a mandamus action was an inappropriate remedy to review a decision of the Board on refund petitions, nevertheless, since the instant action had been instituted prior to our decision in Graybill and Bushong, Inc. v. Board of Finance and Page 4} Revenue, 414 Pa. 70, 198 A.2d 316 (1964) -- which for the first time held mandamus inappropriate -- and in order that Bethlehem secure a judicial review of the Board's action, the order of the court below should be vacated and a reargument held before our Court to determine whether the Board had properly refused to entertain Bethlehem's refund petitions.
By a 3-2 vote, the Board denied Bethlehem's refund petitions "for lack of jurisdiction under section 503 of The Fiscal Code in that the petitions were not timely filed." (Emphasis added).
Section 503 of The Fiscal Code (Act of April 9, 1929, P. L. 343, § 503, as amended, 72 P.S. § 503) provides two different limitation periods for the filing of refund petitions such as presently involved. That section provides, inter alia: "§ 503. Refunds of state taxes, license fees, et cetera
"The Board of Finance and Revenue shall have the power, and its duty shall be, (a) To hear and determine any petition for the refund of taxes, license fees, penalties, fines, bonus or other moneys paid to the Commonwealth and to which the Commonwealth is not rightfully or equitably entitled and, upon the allowance of any such petition, to refund such taxes, license fees, penalties, fines, bonus or other moneys, out of any appropriation or appropriations made for the purpose, or to credit the account of the person, association, corporation, body politic, or public officer entitled to the refund. . . . All such petitions for refund must be filed with the board within two years of the payment of which refund is requested, or within two years of the settlement in the case of taxes or bonus, whichever period last expired, except : . . . .
"(4) When any tax or other money has been paid to the Commonwealth, under a provision of an act of Assembly subsequently held by final judgment of a court of competent jurisdiction to be unconstitutional, Page 5} or under an interpretation of such provision subsequently held by such court to be erroneous. In such case, the petition to the board may be filed either prior or subsequent to such final judgment but must be filed within five years of the payment of which a refund is requested, or within five years of the settlement of such taxes, bonus, or other moneys due the Commonwealth, whichever period last expires. The board shall have jurisdiction to hear and determine any petition for refund filed prior to such final judgment only if, at the time of the filing thereof, proceedings are pending in a court of competent jurisdiction wherein the claims of unconstitutionality or erroneous interpretation made in the ...