Opinion
No. 29325
Decided February 24, 1943.
Taxation — Assets of financial institution in liquidation — Preliminary assessment certificates issued and taxes, with penalties, paid — Assets later determined by Tax Commission not taxable — Petition on appeal, with prayer for refund, filed with Tax Commission — Appeal dismissed by Board of Tax Appeals — Appeal not from deficiency assessment or filed within 30 days from assessment — Section 5394, General Code (115 Ohio Laws, 569) — Assessments final either by lapse of time for appeal — Or by issuance of final certificates — Sections 5377 and 5395, General Code (115 Ohio Laws, 562 and 570) — Issuance of final certificates not mandatory or substitute for appeal.
APPEAL from the Board of Tax Appeals.
The appellants are trustees elected by the depositors of The Bank of Vermilion Company for the purpose of liquidating certain assets of the bank. The Bank of Vermilion Company was closed by the President of the United States during the bank holiday of March 1933, and did not reopen for business. The trustees are engaged in liquidating the "slow" assets of the bank.
The trustees failed to make return for taxation of these assets in the years 1934, 1935 and 1936, and after notice by the Tax Commission of Ohio of their duty to make the returns, and upon the commission's insistence, the trustees filed the proper reports for these three years on April 27, 1937, with the Tax Commission of Ohio in Columbus. Preliminary assessment certificates were issued April 30, 1937, as follows:
Year 1934, tax and penalty ......... $275.65 Year 1935, tax and penalty ......... 236.20 Year 1936, tax and penalty ......... 196.01 -------- Total......... $707.86
The total taxes of $707.86, including penalties, were paid in full to the treasurer of Erie county on May 15, 1937. Taxes on these assets for the year 1937 were paid August 5, 1937.
These assets were later determined by the Tax Commission of Ohio not to be taxable, and therefore, on or about August 25, 1938, the appellants were notified that the assets listed in their returns for the years 1934, 1935 and 1936 were not subject to tax. Upon request, the taxes paid by the appellants for the year 1937 were refunded, but no refunds were made for the years 1934, 1935 and 1936.
On September 9, 1938, the appellants filed with the Tax Commission of Ohio an instrument designated a "petition on appeal," in which they sought a hearing on appeal from the assessments made for the years 1934, 1935 and 1936, and prayed for refund of the taxes paid for those years.
On August 11, 1942, the Board of Tax Appeals, as a successor to the Tax Commission of Ohio, made the following entry upon its records:
"This cause and matter came on to be considered by the Board of Tax Appeals upon the appeal of the appellants from an assessment made by the Tax Commission of Ohio, predecessor of the appellee herein, upon certain personal property of the appellants for the years 1934, 1935 and 1936 and the motion of the appellee to dismiss for want of jurisdiction.
"Said cause was heard and submitted upon the appeal, the proceedings of the Tax Commission of Ohio and the evidence, and the Board of Tax Appeals being fully advised in the premises finds that appellants made personal property tax returns as trustees of financial institutions for the years 1934, 1935 and 1936 on or about April 29, 1937; that thereafter, to wit, on April 30, 1937, the Tax Commission of Ohio, predecessor of the appellee herein, issued preliminary assessment certificates in keeping with the sums and amounts computed upon their tax returns, which assessment certificates were received by appellants on or about May 15, 1937; and that thereafter, to wit, on September 10, 1938, appellants filed a petition on appeal, appealing from the assessments as so made.
"The Board of Tax Appeals further finds that said appeal was not made from a deficiency assessment, nor was it filed within thirty days from the date of said assessments, as provided in Section 5394, General Code [115 Ohio Laws, 569], in effect at that time and that, therefore, the motion of the appellee is well taken and the same is, therefore, granted.
"It is, therefore, the order of the Board of Tax Appeals that the appeal heretofore filed be and the same is hereby dismissed."
Appeal is prosecuted to this court from that decision.
Mr. Thomas G. Williams and Mr. William H. Williams, for appellants.
Mr. Thomas J. Herbert, attorney general, Mr. Aubrey A. Wendt and Mr. Peter Catri, prosecuting attorney, for appellees.
The single question presented by the record is whether the Board of Tax Appeals was in error in dismissing the appeal on the ground of a want of jurisdiction.
The appellants contend that their claim should have been heard upon its merits by the Board of Tax Appeals or referred by it to the proper authority within the Department of Taxation for the issuance of final assessment certificates under and by virtue of Sections 5377 and 5395, General Code (115 Ohio Laws, 562 and 570), as then in effect.
Any right of review must be found in the statutes. An examination of the provisions of Section 5394, General Code (115 Ohio Laws, 569), as in effect at that time, discloses that a remedy was available to the appellants at the time the preliminary assessments were made and taxes paid. It specifically provides that "within thirty days after the mailing of such notice such taxpayer may appeal to the commission from the assessment so made."
The so-called "petition on appeal" was not filed until nearly sixteen months after the mailing of the certificate of assessment. The appellants not having perfected their appeal within thirty days, the Board of Tax Appeals, under the statutory provisions above cited, had no jurisdiction to hear or consider their claim.
The appellants urge that their "petition on appeal" be treated as an application for final assessment certificates and contend that such final certificates should have been issued by virtue of the provisions of Section 5395, General Code (115 Ohio Laws, 570), as then in effect, and that the claim of appellants should have been referred to the Department of Taxation for the issuance of such certificates.
Assessments became final in one of two ways — either by lapse of time, under Section 5377, General Code (115 Ohio Laws, 562), where no appeal had been taken within the time prescribed by Section 5394, General Code (115 Ohio Laws, 569), or by the issuance of such final certificates under and by virtue of the provisions of Section 5395, General Code (115 Ohio Laws, 570). Those provisions, however, were permissive and not mandatory. They did not provide a substitute for appeal or relieve the taxpayer from the consequences of failure to perfect an appeal.
The Board of Tax Appeals could not properly make a new order that would effect a restoration of the right of appeal to the appellants. It must be concluded, therefore, that for failure of timely appeal the assessments in question have become final and the Board of Tax Appeals has no authority to grant refunds or exercise further jurisdiction in the matter. It follows that the action of the Board of Tax Appeals was neither unreasonable nor unlawful and its decision is affirmed.
Decision affirmed.
WEYGANDT, C.J., MATTHIAS, HART, ZIMMERMANT, BELL and TURNER, JJ., concur.
WILLIAMS, J., not participating.