decided: December 22, 1980.
DAN MAURICE MYERS AND BARBARA JEAN MYERS, PETITIONERS
COMMONWEALTH OF PENNSYLVANIA, DEPARTMENT OF REVENUE, RESPONDENT
Original jurisdiction in case of Dan Maurice Myers and Barbara Jean Myers v. Commonwealth of Pennsylvania, Department of Revenue.
Gordon A. Roe, Kain, Brown & Roberts, for petitioners.
Christos A. Katsaounis, Assistant Attorney General, with him Elisabeth S. Shuster and Allan C. Warshaw, Deputy Attorneys General, for respondent.
Judges Blatt, Craig and MacPhail, sitting as a panel of three. Opinion by Judge MacPhail.
[ 55 Pa. Commw. Page 510]
In this action, addressed to our original jurisdiction, Dan Maurice and Barbara Jean Myers (Petitioners) seek a declaratory judgment as to the constitutionality of Section 339 of the Tax Reform Code of 1971 (Tax Code),*fn1 Act of March 4, 1971, P.L. 6,
[ 55 Pa. Commw. Page 511]
for reassessments of the personal income tax jeopardy assessments and on April 16, 1980 reassessments were issued based on adjusted income calculations submitted by the Department's Financial Investigative Unit.*fn3 Petitioners filed appeals to the Board of Finance and Revenue on July 7, 1980 from the reassessments. Each of the jeopardy assessment appeals taken by Petitioners challenge, inter alia, the constitutionality of Section 339 of the Tax Code, the statute's jeopardy assessment provision.
On or about January 24, 1980 Petitioners filed appeals from the sales tax assessments with the Department's Board of Appeals. Petitioner Dan Myers also requested a hearing on the necessity of a bond requirement issued pursuant to Section 277 of the Tax Code, 72 P.S. § 7277. The bond requirement in the amount of $320,000.00 was upheld by the Board of Appeals. The Department's brief indicates that the Board of Appeals denied Petitioners' appeals from the sales tax assessments and that further appeals to the Board of Finance and Revenue were filed on July 7, 1980.
The issues presented for our consideration by the Department's preliminary objections may be summarized as follows: (1) is this matter within the exclusive jurisdiction of the Department thereby rendering declaratory relief unavailable; (2) if not, may declaratory relief be rendered where other proceedings are pending before the Department involving the same parties and issues; and (3) is declaratory relief otherwise available to determine the constitutionality of tax statutes?
We believe that this case warrants some preliminary discussion of the recently enacted Declaratory
[ 55 Pa. Commw. Page 513]
Judgments Act (Act), 42 Pa. C.S. § 7531 et seq.*fn4 We recognize that the Act has substantially broadened the availability of declaratory relief as is reflected in the following language of intent: "The General Assembly finds and determines that the principle rendering declaratory relief unavailable in circumstances where an action at law or in equity or a special statutory remedy is available has unreasonably limited the availability of declaratory relief and such principle is hereby abolished."*fn5 42 Pa. C.S. § 7541(b). Further, Section 7537 of the Act, 42 Pa. C.S. § 7537, provides that while a court may continue in its discretion to refuse to grant declaratory relief if the controversy or uncertainty at issue would not thereby be resolved, "the existence of an alternative remedy shall not be a ground for the refusal to proceed under this [Act]." (Emphasis added.)
Despite the admitted breadth of availability of relief under the Act an important limitation must be considered as it relates to the instant case. Section 7541(c)(2) of the Act provides that "[r]elief shall not be available under this [Act] with respect to any: . . . [p]roceeding within the exclusive jurisdiction of a tribunal other than a court." The Board of Appeals and Board of Finance and Revenue each qualifies as a "tribunal other than a court."*fn6 Therefore,
[ 55 Pa. Commw. Page 514]
where a proceeding lies within the exclusive jurisdiction of either Board, declaratory relief is unavailable under the Act.
We agree with the Department that the constitutional challenge presented is within the exclusive jurisdiction of the Department's administrative tribunals. The Tax Code provides an appeal procedure for challenges to sales and personal income tax assessments.*fn7 This Court has recognized in a recent decision that "where a statutory remedy exists, it is exclusive unless the jurisdiction of the courts is preserved thereby." Lashe v. Northern York County School District, 52 Pa. Commonwealth Ct. 541, 549, 417 A.2d 260, 264 (1980). Since the exclusive appeal procedure provided by the Tax Code vests jurisdiction in the Boards of Appeals and Finance and Revenue with the ultimate appeal to this Court, we conclude that the initial phases of tax assessment appeals are within the exclusive jurisdiction of those Boards.
We also recognize, however, that a statutory remedy cannot be made to cover matters beyond its scope. Lashe v. Northern York County School District, supra. It is significant to the instant case that certain challenges to the constitutionality of tax statutes have been considered as beyond the jurisdiction
[ 55 Pa. Commw. Page 515]
of administrative tribunals. See Delaware Valley Apartment House Owner's Association v. Department of Revenue, 36 Pa. Commonwealth Ct. 615, 389 A.2d 234 (1978) and Borough of Greentree v. Board of Property Assessments, 459 Pa. 268, 328 A.2d 819 (1974). Our task, then, is to determine whether Petitioners' constitutional challenge to Section 339 of the Tax Code is one which the Department's Boards lack the power to consider.*fn8
Constitutional challenges to tax statutes which go to the heart of the power to tax have been held to be beyond the scope of statutorily prescribed remedies. In Greentree, supra, it was reasoned that while statutory remedies are not rendered inappropriate merely because a constitutional issue is raised, an administrative agency cannot determine the constitutionality of its own enabling legislation. Similarly in the Delaware Valley case, supra, wherein a declaratory judgment petition was held to be appropriate, the constitutional challenge presented was to the power of the legislature to grant an exemption from the tax in question.*fn9 We also point out, however, that not all challenges to the basic validity of tax statutes are of sufficient substance to divest an administrative
[ 55 Pa. Commw. Page 516]
tribunal of its exclusive jurisdiction. See Hudson v. Union County, 50 Pa. Commonwealth Ct. 378, 413 A.2d 1148 (1980) (direct attack upon the constitutionality of the occupation tax, which has been recognized as valid for many years, does not rise to the level of a substantial constitutional question).
It is our opinion that Petitioners' constitutional challenge to Section 339 of the Tax Code is not one which goes to the basic validity of the tax statute. Petitioners' argument in support of their petition relies exclusively upon the Delaware Valley case, supra. That case is clearly distinguishable from the instant case because, again, petitioners there were challenging the legislative authority to grant particular sales tax exemptions. The Petitioners here allege certain procedural defects in the statute, a challenge which though not insubstantial if found to be valid, is not one which administrative tribunals are incompetent to adjudicate.*fn10
We therefore hold that this matter is within the exclusive jurisdiction of the Department's administrative tribunals as prescribed by the Tax Code. Pursuant to Section 7541(c)(2) of the Act declaratory relief is therefore unavailable. Since Petitioners now have appeals pending before the appropriate tribunal, their attack on the constitutionality of Section 339 of the Tax Code has been fully protected and will be adjudicated for our further review, if necessary.
Having found that we lack jurisdiction, it is unnecessary to address Petitioners' other arguments or the Department's remaining objection.
[ 55 Pa. Commw. Page 517]
Accordingly, we sustain the Department's first preliminary objection, and, for the reasons stated in the foregoing opinion, dismiss the petition for a declaratory judgment.
And Now, this 22nd day of December, 1980, the preliminary objection of the Department of Revenue is sustained on the ground that this Court lacks subject matter jurisdiction and the petition for a declaratory judgment is hereby dismissed.
Preliminary objections sustained. Petition dismissed.