Appeal from the Order of the Board of Finance and Revenue in case of In Re: W.N. Dambach, Inc., Docket No. RST-5297.
Donald J. Balsley, Jr., Wick, Rich, Fluke & Streiff, for petitioner.
Bryan E. Barbin, Deputy Attorney General, with him, LeRoy S. Zimmerman, Attorney General, for respondent.
President Judge Crumlish, Jr., and Judges Williams, Jr., Craig, MacPhail, Barry, Colins and Palladino. Opinion by Judge MacPhail. This decision was reached prior to the resignation of Judge Williams, Jr. Dissenting Opinion by President Judge Crumlish, Jr.
[ 87 Pa. Commw. Page 619]
W.N. Dambach, Inc. (Petitioner) appeals from the July 2, 1982, order of the Board of Finance and Revenue (Board) which denied Petitioner's petition for review and sustained the decision of the Board of Appeals pursuant to Assessment No. A-87042 issued by the Commonwealth, Department of Revenue, for nonpayment of sales and use taxes.
In accordance with Pa. R.A.P. 1571(f) Petitioner and the Commonwealth have entered into and filed a stipulation of facts which we will accept and adopt as findings of fact for the purposes of this appeal. From those stipulations we find that the Petitioner is engaged in cutting, bending and welding steel bars, steel mesh and other structural steel according to customer specifications for use in the construction of concrete
[ 87 Pa. Commw. Page 620]
roads, buildings and floors. The Commonwealth concedes that Petitioner is engaged in a manufacturing process. When Petitioner successfully bids a project, the customer's specifications are fed into Petitioner's computer which prepares a production schedule consisting of cutting bar lists, job estimates, tags, orders and invoices. Petitioner concedes that the computer is not used in the actual production of the finished manufactured product in the sense that the computer controls the operation of the production line.
The Commonwealth conducted an audit of Petitioner's business activities for the period from January 1, 1977 through February 29, 1980. As a result of the audit, Assessment No. A-87042 was issued assessing Petitioner for various amounts of unpaid sales and use taxes. This assessment has been appealed administratively, resulting finally in the Board order cited above.
The sole issue to be decided by this appeal is whether or not Petitioner's computer is excluded from the Pennsylvania use tax. The Commonwealth contends that Petitioner's computer system is subject to tax because it is property not directly used in manufacturing and processing and, therefore, is not excluded from tax by operation of Section 201(o)(4)(B)(i) of the Tax Reform Code of 1971 (Code), Act of March 4, 1971, P.L. 6, as amended, 72 P.S. § 7201(o)(4)(B)(i). Petitioner would have this Court determine that its use of the computer system is directly used in the manufacturing or processing of personal property.
The Code places the burden of proof upon Petitioner in this appeal. Section 236 of the Code, 72 P.S. § 7236. Pa. R.A.P. 1571(f) provides that in petitions for review which appeal from determinations of the Board, the parties shall file a stipulation as to such
[ 87 Pa. Commw. Page 621]
facts as may be agreed upon and shall identify issues of fact, if any, which remain to be tried. Here, the parties have chosen to rely upon the stipulations. Neither party has identified issues of fact remaining to be tried. Not only the parties but this Court as well, are bound by these stipulations. George v. Department of Transportation, 70 Pa. Commonwealth Ct. 574, 453 A.2d 717 (1982). Facts effectively stipulated are controlling and conclusive. Kostecky v. Mattern, 69 Pa. Commonwealth Ct. 575, 452 A.2d 100 (1982). Appellant at oral argument has urged that if we find the stipulated facts insufficient to make a determination of the issue before us, we should then conduct an evidentiary hearing. In Anastasi Brothers Corporation v. Board of Finance and Revenue, 455 Pa. 127, 315 A.2d 267 (1974), a somewhat similar issue was the subject of review by our Supreme Court of the refusal by this Court to permit the introduction of additional facts, even though the appellant there had specifically reserved the ...