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decided: August 6, 1968.


Appeals from decree of Court of Common Pleas of Dauphin County, No. 2390 Equity Docket and No. 555 Commonwealth Docket, 1959, in case of City of Philadelphia, United Gas Improvement Company and Borough of Chambersburg v. Warner M. Depuy, Secretary of Revenue.


Richardson Dilworth and Solomon Fisher, with them Dilworth, Paxson, Kalish, Kohn & Levy, for company, appellant.

Matthew W. Bullock, Jr., Second Deputy City Solicitor, with him Edward G. Bauer, Jr., City Solicitor, for City of Philadelphia, appellants.

Daniel W. Long, Borough Solicitor, for borough, appellant.

Edward T. Baker, Deputy Attorney General, with him Edward Friedman, Counsel General, and William C. Sennett, Attorney General, for appellee.

Bell, C. J., Musmanno, Jones, Cohen, Eagen, O'Brien and Roberts, JJ. Opinion by Mr. Justice Roberts. Dissenting Opinion by Mr. Justice Cohen.

Author: Roberts

[ 431 Pa. Page 278]

This litigation centers around one paragraph of the Act of June 1, 1889, P. L. 420, § 23, as amended, 72 P.S. § 2181 (Supp. 1967). The act generally imposes an annual tax of 14 mills on the gross receipts of certain enumerated utilities; the section directly involved in this litigation exempts from taxation the gross receipts of municipally owned or operated public utilities to the extent that these gross receipts are derived from business done inside the limits of the municipality. Municipal gas companies, however, are denied this exemption by the language of the act. As a result, appellants Philadelphia Gas Works and Chambersburg Gas Department attacked the amended Act of 1889, claiming (1) that the act is unconstitutional because it violates the uniformity clause of the Pennsylvania Constitution, Article IX, § 1 and the Fourteenth Amendment of the United States Constitution; (2) that it violates the prohibition in the Pennsylvania Constitution against local or special laws, Article III, § 7; (3) that the Philadelphia Gas Works, being municipally owned and operated should be exempt; and (4) that the act really does not tax any municipal utilities.

The case presently comes before us for the second time. In our first decision, Philadelphia v. Smith, 412 Pa. 262, 194 A.2d 177 (1963), we found against appellants on all but their first contention. On this classification issue, however, we remanded the case to the court below for further testimony on whether there existed any real differences between municipal gas and electric companies to justify different tax treatment for the two. As a result of a second decision adverse to appellants, the case is here again.

[ 431 Pa. Page 279]

We start with the well-established proposition that one seeking to show a statute unconstitutional must carry a very heavy burden. This doctrine was most recently reiterated in Commonwealth v. Life Assurance Co. of Pennsylvania, 419 Pa. 370, 214 A.2d 209 (1965), appeal dismissed for want of a substantial federal question, 384 U.S. 268, 86 S. Ct. 1476 (1966), where we held that although there must be some reasonable basis for distinguishing one taxable from another, it is the allegedly aggrieved taxpayer who must demonstrate the lack of such basis. "All doubt is to be resolved in favor of sustaining the legislation." Milk Control Comm'n v. Battista, 413 Pa. 652, 659, 198 A.2d 840, 843 (1964); Anstine v. Zoning Bd. of Adjustment, 411 Pa. 33, 190 A.2d 712 (1963). Moreover, the taxpayer's burden will be deemed met only if the challenged statute " clearly, palpably and plainly violates the Constitution." Daly v. Hemphill, 411 Pa. 263, 271, 191 A.2d 835, 840 (1963) (Emphasis in original.); Chartiers Valley Joint Schools v. Allegheny Cty. Bd. of Sch. Directors, 418 Pa. 520, 546, 210 A.2d 487, 501 (1965). The court below found that appellants failed to carry their heavy burden of showing that there existed no reasonable basis for distinguishing gas from electric companies. We agree.

Appellants presented but three witnesses. The first of these, a former State Senator, testified as to his own recollection of the events surrounding the passage of the act, concluding that gas companies were taxed discriminatorily. There can be no doubt that this testimony was both irrelevant and improper. The remaining two witnesses, both experts, testified concerning the increasing competition between gas and electric companies. Even admitting, however, that these two utilities perform ...

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