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PHILADELPHIA ELECTRIC COMPANY v. COMMONWEALTH PENNSYLVANIA (09/13/84)

decided: September 13, 1984.

PHILADELPHIA ELECTRIC COMPANY, PETITIONER
v.
COMMONWEALTH OF PENNSYLVANIA, DEPARTMENT OF REVENUE, PENN CENTER HOUSE, INCORPORATED AND COUNCIL OF 220 WEST RITTENHOUSE SQUARE, RESPONDENTS



Original jurisdiction in the case of Philadelphia Electric Company v. Commonwealth of Pennsylvania, Department of Revenue and Penn Center House, Inc. and Council of 220 West Rittenhouse Square.

COUNSEL

Charles W. Bowser, Pechner, Dorfman, Wolffe, Rounick & Cabot, for petitioner.

Paul S. Roeder, Deputy Attorney General, with him, LeRoy S. Zimmerman, Attorney General, for respondent, Commonwealth of Pennsylvania, Department of Revenue.

Craig E. Ziegler, Montgomery, McCracken, Walker & Rhoads, for respondent, Penn Center House, Inc.

E. Gerald Donnelly, Jr., with him, Ronald J. Shaffer, of counsel, Fox Rothschild, O'Brien & Frankel, for respondent, Counsel of 220 West Rittenhouse Square.

President Judge Crumlish, Jr. and Judges Rogers, MacPhail, Doyle, Barry, Colins and Palladino. Opinion by Judge Doyle. Judge Palladino did not participate in this decision. Concurring and Dissenting Opinion by Judge MacPhail. Judge Barry joins in this concurring and dissenting opinion.

Author: Doyle

[ 85 Pa. Commw. Page 151]

Before us are preliminary objections filed by the Commonwealth, Penn Center House, Inc. (Penn Center), and the Council of 220 West Rittenhouse Square (220 West) to a petition for review brought in our original jurisdiction by Philadelphia Electric Company (PECO). PECO seeks declaratory and injunctive relief against the Department of Revenue (Department) in its application of the Tax Reform Code of 1971 (Code), Act of March 4, 1971, P.L. No. 6, as amended, 72 P.S. § 7101-10004, and injunctive relief against Penn Center and 220 West.

This matter arises because Penn Center and 220 West have refused to pay sales tax charges to PECO for purchases of electricity, claiming that, as condominiums,

[ 85 Pa. Commw. Page 152]

    their purchases are exempt from sales tax under Section 201(m) of the Code 72 P.S. § 7201(m). The Commonwealth has held PECO liable for the unpaid taxes, and PECO has paid the amounts due in order to avoid penalty under the Code.*fn1 Because of its status as a public utility, however, PECO cannot collect any sales tax due prior to rendering service, and cannot terminate service under the Public Utility Code*fn2 for the condominiums' delinquence. PECO avers that the Department has taken no action against the delinquent condominiums to enforce the Code and the condominiums have taken no action to secure exempt status under other provisions of the Code. PECO avers that it is thus required to expend its resources to collect the tax for the Commonwealth through lawsuits against the individual condominiums, or alternatively, to raise the condominiums' claim of exemption in a petition for refund of the monies PECO has already paid. This, it is pleaded, is an unconstitutional deprivation of PECO's property by the Commonwealth.

Respondents first object that PECO has failed to exhaust its administrative remedies. It is argued that the provisions of Sections 252 and 253 of the Code, 72 P.S. §§ 7252 and 7253, pertaining to refunds of sales taxes paid, and Section 232 of the Code, 72 P.S. § 7232, pertaining to appeals from tax assessments, offer adequate administrative redress of the grievance pleaded. We believe this objection misconstrues the nature of the petition for review. PECO seeks not merely the return of the monies ...


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