Eric L. Lilian, Paul D. Sulman, Philadelphia, for appellants.
Guy J. DePasquale, Asst. Atty. Gen., Harrisburg, for appellees.
Jones, C. J., and O'Brien, Roberts, Pomeroy, Nix and Manderino, JJ. Eagen, J., did not participate in the consideration or decision in this case.
This appeal presents the question whether a class action may be maintained when there exists an adequate administrative remedy. We answer in the negative, and will affirm.
The case at bar was commenced by the filing of a complaint in equity in the Commonwealth Court*fn1 by the named plaintiffs, Eric L. Lilian and Judith Lilian, his wife, on behalf of themselves and others similarly situated to compel repayment to them by the defendants, the Commonwealth of Pennsylvania and its then Secretary of Revenue, Robert L. Kane, of portions of sales taxes paid by the plaintiffs and members of their class on the purchase of motor vehicles.
From the complaint the following facts appear: On December 11, 1971, the federal excise tax applicable to certain newly manufactured motor vehicles was repealed by the Congress, effective retroactively to August 15, 1971. Revenue Act of 1971, Act of December 10, 1971, Pub.L. No. 92-178, § 401(c), 85 Stat. 497, repealing in part 26 U.S.C.A. § 4061(a)(2). Following the repeal, the federal government refunded the excise tax to all persons who had purchased new vehicles during the four month period ended on December 11, 1971. Among the refund recipients were the named plaintiffs, who had purchased a new automobile in Pennsylvania on November 10, 1971. In connection with that purchase, the Lilians paid a Pennsylvania sales tax of six per cent*fn2 on the purchase price of the car, which was computed to include the applicable amount of federal excise tax.*fn3 Between August 16 and December 11, 1971, the other members of the class also made purchases of motor vehicles and paid a Pennsylvania sales tax thereon, which was levied on the federal excise tax as well as the actual purchase price. Defendants have refused to account to the plaintiffs with respect to the amounts of Pennsylvania sales tax paid on the federal excise tax during the four months prior to the repeal of the latter tax, or to make any refunds to plaintiffs or their class with respect thereto when demanded.
The defendants responded to the complaint with preliminary objections asserting, first, that equity lacked jurisdiction due to the availability of a statutorily prescribed method for obtaining sales tax refunds and, second, by way of demurrer, that the complaint failed to state a cause of action because suit was barred by the
doctrine of sovereign immunity. The Commonwealth Court sustained the preliminary objection as to the unavailability of equitable relief*fn4 and the plaintiffs appealed to this Court.*fn5
There is no doubt whatever that if the Lilians had sued to obtain a sales tax refund for themselves alone, equity would be without jurisdiction to grant recovery. Sections 252-255 of the Tax Reform Code of 1971, Act of March 4, 1971, P.L. 6, No. 2, art. II, as amended, 72 P.S. §§ 7252-7255 (Supp.1975-1976) provide for the refunding of improperly assessed or paid sales taxes, and set forth the procedure whereby such refunds may be obtained.*fn6 Where such an administrative remedy is statutorily prescribed the general rule is that a court -- be it a court of equity or a court of law -- is without jurisdiction to entertain the action. See, e. g., DeLuca v. Buckeye Coal Company, 463 Pa. 513, 345 A.2d 637 (1975); West Homestead ...