State of Ga. v. Atlanta Provision Co.

Full title: STATE OF GEORGIA v. ATLANTA PROVISION COMPANY et al

Court: Court of Appeals of Georgia

Date published: May 12, 1954

90 Ga. App. 147 (Ga. Ct. App. 1954)

82 S.E.2d 145

Opinion

35072.

DECIDED MAY 12, 1954.

Action for sales tax. Before Judge Vaughn. DeKalb Superior Court. December 28, 1953.

Eugene Cook, Attorney-General, Geo. E. Sims, Jr., John W. Wilcox, Jr., Assistant Attorneys-General, for plaintiff in error.

A. A. Baumstark, Smith Franco, Troutman, Sams, Schroder Lockerman, D. W. Rolader, M. L. Kahn, W. Harvey Armistead, Haas, Holland Blackshear, Joseph F. Haas, contra.

1. The motion to transfer the writ of error to the Supreme Court is denied.

2. The State's lien for sales and use taxes under the provisions of the Georgia Retailers' and Consumers' Sales and Use Tax Act, and the general law relating to liens for taxes, attaches on the day the taxes become due, and the State's failure to issue a fi. fa. and have it recorded will not result in the State's being relegated to the position of a general creditor of a delinquent taxpayer.

DECIDED MAY 12, 1954.

On December 23, 1952, a petition was filed in the Superior Court of DeKalb County by Atlanta Provision Company against Philip Rosenberg, doing business as Phil's Super Market, 484 Mitchell Street, S.W., Atlanta, Fulton County, Georgia, praying that a receiver be appointed to marshal all his assets. The prayer of the petition was granted, and a permanent receiver was appointed on January 26, 1953. On July 2, 1953, the trial court set September 7, 1953, as the final day for the intervention of creditors in the receivership proceeding. On April 16, 1953, prior to the bar date set for intervention, the State of Georgia filed its intervention and showed a claim of $1,062.11 due and owing the State by Philip Rosenberg, doing business as Phil's Super Market, for sales taxes collected in the operation of the business from December 1, 1951, through June 30, 1952, which was evidenced by a copy of a sales tax fi. fa. issued August 4, 1952, in the amount of $1,062.11, and recorded in the office of the Clerk of the Superior Court of Fulton County on August 5, 1952, and recorded in the office of the Clerk of the Superior Court of DeKalb County on April 15, 1953. On November 24, 1953, a hearing was held for the purpose of allowing the various intervenors to claim their priorities to the funds marshaled by the receiver. The State appeared through its duly authorized attorney and claimed first priority. On December 28, 1953, the court entered the following order as to priorities: "There being before the court for determination the rank or priority of the State of Georgia's claim for sales tax, and that of Refrigeration-Appliances, Inc.'s claim, based upon retention-of-title contract on certain equipment. Upon consideration, thereof, it is held, ordered and adjudged by the court, that as between the State of Georgia and Refrigeration-Appliances, Inc., neither has greater priority or over the other. It is held and so ordered by the court, that said two claims, that is, the claim of the State of Georgia and that of Refrigeration-Appliances, Inc., are both unsecured debts, and are approved for payment as such, by the court."

The State of Georgia has sued out the present writ of error to have this court review that judgment.

CARLISLE, J.

1. The motion to transfer to the Supreme Court the writ of error, as one involving questions in equity, is denied. The case originated as one in equity, seeking the appointment of a receiver, to which there is no objection, nor is there any complaint as to anything the receiver has done or failed to do. The sole question presented here is whether the State, in its claim of lien for sales taxes, was properly relegated to the position of an unsecured, or general, creditor in the distribution of money which will arise from the sale of the property under the receivership proceeding. Refrigeration-Appliances v. Atlanta Provision Co., 210 Ga. 475 ( 80 S.E.2d 683).

2. By the terms of the Georgia Retailers' and Consumers' Sales and Use Tax Act (Ga. L. 1951, pp. 360-387; Code, Ann. Supp., § 92-3401a et seq.), "There is . . . levied and imposed in addition to all other taxes of every kind now imposed by law, a privilege or license tax upon every person who engages in the business of selling tangible personal property at retail in this State." § 92-3402a. This tax, at the rate of three percent of the sale or purchase price is to be collected by the retail dealers from the purchaser or consumer. Code (Ann. Supp.) § 92-3414a. Any dealer who shall neglect, fail, or refuse to collect the tax imposed shall be liable for and pay the tax himself. § 92-3415a. Beginning on April 1, 1951, and for the purpose of ascertaining the amount of tax payable under the act, it was the duty of the dealers, on or before the last day of the month following the month in which the tax became effective, to make certain specified returns to the State Revenue Commissioner of their gross sales or purchases as the case might be. Code (Ann. Supp.) § 92-3424a. That section was, however, amended by the act of 1952 (Ga. L. 1952, pp. 334, 335), to provide that the returns are to be submitted on or before the twentieth day of the month following the month in which the tax shall become effective. Certain penalties are imposed for failure to make the required returns. Code (Ann. Supp.) § 92-3426a. By § 92-3433a, it is provided: "At the time of transmitting the required return to the Commissioner the dealer shall remit to him therewith the amount of tax due under the applicable provisions of this chapter and failure to so remit such tax shall cause said tax to become delinquent." The act of 1952 (Ga. L. 1952, pp. 334, 336) amending Code (Ann. Supp.) § 92-3434a, provides: "The tax imposed by this Chapter shall for each month become delinquent on the 20th day of each succeeding month. The State Revenue Commissioner is empowered and it shall be his duty when any tax becomes delinquent under this Act, to issue a fi. fa. for the collection of the tax, interest and penalty from each delinquent taxpayer."

When the provisions quoted above are considered in the light of the general law relating to liens for taxes, which existed at the time of the passage of the Georgia Retailers' and Consumers' Sales and Use Tax Act, it will be seen that a lien and its rank is provided for the State for sales and use taxes; that such lien attaches on the day on which the dealer is required to make his return and remittance to the State Revenue Commissioner; and such liens for taxes are declared to be superior to all other liens. Code §§ 92-5707, 92-5708, 67-1701; and see Atlanta' Trust Co. v. Atlanta Realty Corp., 177 Ga. 581 ( 170 S.E. 791), and citations.

Recording the fi. fa. issued by the State Revenue Commissioner on the general execution docket is not a condition precedent to the lien for sales taxes attaching; and the only effect of a failure to record the lien is that as against innocent purchasers the lien will be lost. Thompson v. Adams, 157 Ga. 42, 43 ( 120 S.E. 529).

Whatever may have been the trial court's reason for relegating Refrigeration-Appliances, Inc., the holder of the retention-of-title contract, to the position of a general creditor, there are no such circumstances apparent in this case which would authorize the trial court's relegating the State, under its claim of lien for taxes, to the position of a general creditor. The judgment, therefore, insofar as the State is concerned, must be reversed.

Judgment reversed. Gardner, P. J., and Townsend, J., concur.