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decided: April 22, 1982.


Original jurisdiction in the case of West Penn Power Co. v. Howard Cohen, Secretary, Pennsylvania Department of Revenue.


R. Scott Shearer, with him Howell C. Mette, Shearer, Mette & Woodside, for petitioner.

Vincent J. Dopko, Deputy Attorney General, for respondent.

President Judge Crumlish, Jr. and Judges Mencer, Rogers, Williams, Jr. and Craig. Opinion by President Judge Crumlish, Jr. This decision was reached prior to the resignation of Judge Mencer. Judge Palladino did not participate in the decision in this case.

Author: Crumlish

[ 66 Pa. Commw. Page 264]

This matter comes within the original jurisdiction of our Court. West Penn Power Company filed a complaint in mandamus to compel the Secretary of Revenue to make settlement of tax returns filed under the Public Utility Realty Tax Act*fn1 (PURTA) for the years 1969 through 1973. Additionally, petitioner has requested a declaratory judgment from this Court as to the duties and responsibilities of the Secretary of Revenue as applied to the administration of PURTA under the provisions of the Fiscal Code (Code).*fn2

In 1976 the Secretary of Revenue requested an Attorney General's opinion concerning the applicability of §§ 1001 and 1002*fn3 of the Code as applied to the administration of PURTA. Prior to this request, the

[ 66 Pa. Commw. Page 265]

Department of Revenue (DOR) had never formally settled any PURTA return. Because there was never any formal settlement, the taxpaying utilities were foreclosed from filing Petitions for Resettlement and were relegated to contesting overpayments under the refund provisions of the Code.*fn4

The Attorney General's opinion*fn5 stated:

We have carefully reviewed the Fiscal Code, and find no other provision which would be applicable to the collection of taxes under PURTA. Accordingly, it is our opinion, and you are hereby advised that Section 1001 of the Fiscal Code is applicable to PURTA, and imposes a duty on the Department of Revenue to settle such tax subject to the Department of the Auditor General's audit and approval, pursuant to the procedure set forth in Section 802 of the Code. Subsequent to the settlement, the provisions of Section

[ 66 Pa. Commw. Page 2661401]

of the Fiscal Code become applicable as in the case of all other tax settlements.

After this opinion was issued, the Secretary of Revenue began prospectively settling*fn6 all PURTA returns. West Penn then filed for refunds dating back to the taxable 1969 year. Refunds were granted back to the taxable 1974 year, due to a Supreme Court holding in Commonwealth v. Philadelphia Electric Co., 472 Pa. 530, 372 A.2d 815 (1977), which exempted certain property as taxable realty under PURTA. DOR refused to issue refunds for the taxable years 1969 through 1973 because the five-year statute of limitations for the filing of a refund petition had passed.*fn7

After the instigation of this suit, the DOR requested a clarifying opinion from the Attorney General*fn8 as to whether the DOR need settle all PURTA claims or only those claims wherein the DOR intends to use the collection procedures of the Code. The Department of Justice responded with a clarifying "letter"*fn9 which held that the DOR need not "routinely" settle PURTA returns, but must settle returns

[ 66 Pa. Commw. Page 267]

    as a prerequisite to the use of the collection provisions of the Code.

Based on the first opinion of the Attorney General, West Penn has requested mandamus, asserting that this opinion created a mandatory duty in DOR to settle these returns.

[W]e note that mandamus is an extraordinary writ which lies to compel the performance of a ministerial act or mandatory duty where there is a clear legal right in the plaintiff, a corresponding duty in the defendant, and a want of any other adequate remedy. Mandamus will only be granted when the plaintiff's right to relief is clear and convincing and not where the defendant merely exercises discretion unless the action is so arbitrary as to be no actual exercise of discretion at all. (Citations omitted.)

Wyoming Sand and Stone Co. v. Department of Revenue, 24 Pa. Commonwealth Ct. 366, 369, 355 A.2d 860, 862 (1976).

Thus, in deciding whether West Penn is entitled to the extraordinary writ of mandamus, we must first determine whether it has a clear legal right to relief. Because we hereinafter hold, as a matter of law, that the provisions of the Code do not require that all PURTA returns need be routinely settled, West Penn's request for mandamus is denied.

West Penn has also requested that this Court issue a declaratory judgment as to whether or not the Department of Revenue is under a duty to settle all PURTA returns, or only those returns where it intends to use the collection provisions of the Fiscal Code.

[ 66 Pa. Commw. Page 268]

"The stated purpose of the Declaratory Judgments Act, 42 Pa. C.S. § 7531 et seq. is to settle and afford relief to any person from uncertainty and insecurity with respect to right, status and legal relations affected by a statute." Snider v. Shapp, 45 Pa. Commonwealth Ct. 337, 405 A.2d 602 (1979). Because the application of the Code to PURTA is unclear, we will grant West Penn's request for declaratory judgment.

Section 8102-A of PURTA provides for the imposition of the tax:

(a) On or before the first day of June of 1970 and of each year thereafter, every public utility shall pay to the State Treasurer, through the Department of Revenue, a tax at the rate of thirty mills upon each dollar of the state taxable value of its utility realty at the end of the preceding calendar year.

(b) Each such payment shall be accompanied by a report, upon oath of the owner or responsible officer of the public utility, showing the amount and manner of computation of the State taxable value upon which such payment is based.

(c) Payment of the tax hereby imposed may be enforced by any means provided by law for the enforcement of payment of taxes to the State. . . . (Emphasis added.)

The above provisions indicate an intent by the legislature to make PURTA returns self-assessing. "The legislative authority to prescribe methods for the assessment and collection of taxes is plenary and paramount." Commonwealth v. Southern Pennsylvania Bus Co., 339 Pa. 521, 529, 15 A.2d 375, 380 (1940).

West Penn urges us to construe Section 1001 of the Code as requiring the DOR to settle all PURTA returns, rather than merely accept the utilities' own

[ 66 Pa. Commw. Page 269]

    assessments. The Attorney General's opinion construed this section to contain such a requirement. West Penn asserts that this was the correct construction and that the opinion created a mandatory duty in DOR to settle all outstanding and future PURTA returns. We disagree.

Provisions dealing with the imposition of taxes must be strictly construed.*fn10 Section 1001 recites in pertinent part:

In all cases in which any person, association, corporation, public officer, or other party, is indebted, or is believed to be indebted, to the Commonwealth, and no other method for the collection of such debt is provided by law, it shall be the duty of the Department of Revenue to state and settle an account with the debtor, and transmit the original settlement, with the papers appertaining thereto, to the Auditor General for audit and approval, as in the case of tax settlements, and the subsequent procedure shall be the same as in the case of tax settlements. (Emphasis added.)

Clearly, this Section contains two prerequisites to the requirement that DOR makes a settlement: 1) that the party be indebted, or believed to be indebted, to the Commonwealth and 2) that there be no other method for collection of the debt.

A strict reading of this provision reveals that this Section is inapplicable to PURTA returns. In the instant case, West Penn is not indebted to the Commonwealth and the need for collection has been obviated by the requirements of PURTA itself, i.e., the public utility is required to assess and forward payments itself.

In the event that a utility fails to make a return or if the DOR determines there has been an underpayment,

[ 66 Pa. Commw. Page 270]

    then the enforcement provisions of the Code may be utilized, Section 8102-A(c). We have previously determined that these enforcement provisions are indeed applicable to PURTA returns. See Heller v. Depuy, 2 Pa. Commonwealth Ct. 196, 277 A.2d 849 (1971).*fn11

Section 1401 of the Code provides:

All State taxes imposed under the authority of any law of this Commonwealth, now existing or that may hereafter be enacted, and unpaid bonus, penalties, and all public accounts settled, assessed or determined against any corporation, association, or person, including interest thereupon, shall be a first lien upon the franchises and property. . . . (Emphasis added.)

The first Attorney General's opinion held that "Section 1401 provides for the creation of a lien only after a settlement, assessment or determination of the tax has been made." The opinion further concluded that the informal procedures which had been utilized by the DOR did not constitute a "settlement, assessment or determination" within the meaning of Section 1401. We agree and hold that, in order to utilize this section, a formal determination must be made in accord with Section 801 of the Code.*fn12

[ 66 Pa. Commw. Page 271]

However, we are also in agreement with the clarifying letter from the Justice Department that PURTA returns need not be routinely settled. If a utility feels that it has overstated or overpaid its liability, then it may make use of the refund provisions of the Code.*fn13 To hold otherwise would be to impose conditions and procedures which the legislature, in its "paramount" function, Southern Pennsylvania Bus Co., has not determined to be necessary.

West Penn's petition is dismissed.*fn14


West Penn Power Company's request for mandamus is denied. The request for declaratory judgment is granted and we declare that, as a matter of law, Public Utility Realty Tax returns need not be routinely settled under the provisions of the Fiscal Code, however, if the Department of Revenue intends to use the collection provisions of the Code, then it must settle the return in question.

This decision was reached prior to the resignation of Judge Mencer.

Judge Palladino did not participate in the decision in this case.


Mandamus denied. Declaratory judgment granted.

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