Opinion
Docket No. 015217-2013
01-16-2014
Re: Mohamed Shawi v. Division of Taxation
A. Michael Barker, Esq. Barker, Gelfand & James, P.C. David B. Bender Deputy Attorney General Division of Law R.J. Hughes Justice Complex
NOT FOR PUBLICATION WITHOUT APPROVAL OF
THE TAX COURT COMMITTEE ON OPINIONS
Patrick DeAlmeida
Presiding Judge
A. Michael Barker, Esq.
Barker, Gelfand & James, P.C.
David B. Bender
Deputy Attorney General
Division of Law
R.J. Hughes Justice Complex
Dear Counsel:
This letter constitutes the court's opinion with respect to the Division of Taxation's motion to dismiss the Complaint for want of jurisdiction. For the reasons stated more fully below, defendant's motion is granted.
I. Findings of Fact
The following findings of fact are based on the pleadings and written submissions of the parties with respect to defendant's motion.
Plaintiff Mohamed Shawi operates Atlantic Boston Chicken and Grocery at two locations in Atlantic City: 501 Indiana Avenue and 1305 Baltic Avenue.
On June 27, 2013, Special Agent Audrey Boyd of the Office of Criminal Investigation, Division of Taxation, entered plaintiff's place of business on Indiana Avenue. Agent Boyd sought production of receipts for sales related to tobacco products. When the information was not readily provided, Agent Boyd conducted a search of the premises. On June 28, 2013, Agent Boyd arrived at the Baltic Avenue location of plaintiff's business. She conducted a search of the premises for evidence related to the sale of tobacco products. As a result of the two searches, the agent seized money and personal property plaintiff alleges to exceed $80,000 in value.
Based on the evidence obtained during her searches, Agent Boyd filed four Complaints in the Atlantic City Municipal Court against plaintiff. The Complaints, issued on July 2, 2013, allege the following third degree criminal offenses against plaintiff: (1) failure to collect sales tax with intent to evade payment in violation of N.J.S.A. 54:52-14; (2) failure to pay tax with intent to evade payment in violation of N.J.S.A. 54:52-9; (3) failure to maintain books or records with intent to evade payment in violation of N.J.S.A. 54:52-12; and (4) failure to file a return or report with intent to evade payment in violation of N.J.S.A. 54:52-8.
In addition, the Complaints allege the following disorderly persons offenses against plaintiff: (1) possession of tobacco products on which the tax has not been paid in violation of N.J.S.A. 54:52-6B; (2) failure to keep tobacco products records in violation of N.J.S.A. 54:52-6K; (3) failure to register and obtain a Sales and Use Tax Certificate of Authority in violation of N.J.S.A. 54:52-6E; and (4) failure to collect and remit the New Jersey Tobacco Products Wholesale Tax in violation of N.J.S.A. 54:40B-5.
On September 17, 2013, plaintiff's counsel was advised that the Atlantic County Prosecutor's Office would be prosecuting the Complaints.
On September 24, 2013, plaintiff filed a Complaint in this court against the Division of Taxation. Plaintiff alleges that the searches of his premises were conducted unlawfully. He requested compensatory damages, punitive damages, attorney's fees, costs and the return of the money and property seized by Agent Boyd.
On September 27, 2013, plaintiff's counsel was served with a written forfeiture notice asserting the State's position that the money and property seized during the searches is subject to forfeiture.
On November 22, 2013, the Division of Taxation moved to dismiss the Complaint for want of jurisdiction. Plaintiff subsequently opposed the motion. The parties waived oral argument.
As of December 10, 2013, no indictment had been returned against plaintiff.
II. Conclusions of Law
This court was established in 1979 for the purpose of adjudicating tax and tax-related matters. See N.J.S.A. 2A:3A-1 (repealed by L. 1993, c. 74, §3, re-codified as N.J.S.A. 2B13-1 to -15); see also Farrell v. City of Atlantic City, 10 N.J. Tax 336, 342-43 (Tax 1989). As our Supreme Court recently reiterated, the "Tax Court is vested with limited jurisdiction" defined by statute. McMahon v. City of Newark, 195 N.J. 526, 546 (2008)(citing N.J.S.A. 2B:13-2 and Union City Assocs. v. City of Union City, 115 N.J. 12, 23 (1989)). The statutory scheme establishing this court's jurisdiction is "one with which continuing strict and unerring compliance must be observed . . . ." McMahon, supra, 195 N.J. at 543. The court may exercise only that jurisdiction which the Legislature has conferred to it. DSC of Newark Enterps. v. Borough of South Plainfield, 17 N.J. Tax 510 (1997), aff'd, 17 N.J. Tax 507 (App. Div. 1998). This court has jurisdiction to determine its jurisdiction. American Trucking Ass'ns v. State, 324 N.J. Super. 1 (App. Div. 1999), rev'd on other grounds, 180 N.J. 377 (2004).
Tax Court jurisdiction is established in N.J.S.A. 2B:13-2 as follows:
a. The Tax Court shall have jurisdiction to review actions or regulations with respect to a tax matter of the following:
(1) Any State agency or official;
(2) A county board of taxation;
(3) A county or municipal official.
b. The Tax Court shall have jurisdiction over actions cognizable in the Superior Court which raise issues as to which expertise in matters involving taxation is desirable, and which have been transferred to the Tax Court pursuant to the Rules of the Supreme Court.
c. The Tax Court shall have jurisdiction over any other matters as may be provided by statute.
d. The Tax Court jurisdiction shall include any powers that may be necessary to effectuate its decisions, judgments and orders.
The seizure of plaintiff's property and the propriety of the searches conducted by Agent Boyd are not "tax matters" within the meaning of N.J.S.A. 2B:13-2. Agent Boyd's actions were part of a criminal investigation for violations of the tax laws. As a result of the searches, Complaints alleging third degree crimes and disorderly persons offenses were filed in the Atlantic City Municipal Court against plaintiff. The Atlantic County Prosecutor has assumed responsibility for the prosecution of those Complaints. In addition, plaintiff's counsel has been service with a notice of forfeiture concerning the money and property seized by Agent Boyd.
The criminal charges against plaintiff are within the jurisdiction of courts other than the Tax Court. "All indictable offenses shall be prosecuted in the Superior Court, Law Division . . . ." R. 3:1-5(a). "A municipal court has jurisdiction over . . . [d]isorderly persons offenses, petty disorderly persons offenses and other non-indictable offenses except where exclusive jurisdiction is given to the Superior Court." N.J.S.A. 2B:12-17(c). In addition, a replevin action for the recovery of property, if applicable to the facts of this case, is statutorily assigned to the jurisdiction of the Superior Court. N.J.S.A. 2B:50-1.
This court has no authority to entertain plaintiff's claims and is without power to interfere with the prosecution of criminal charges and forfeiture claims against him. Plaintiff must raise any claims that he has with respect to the searches of his businesses and seizure of his property in the appropriate fora.
In light of these findings, the court will enter Judgment dismissing the Complaint for want of jurisdiction.
Very truly yours,
Patrick DeAlmeida, P.J.T.C.