New York Automatic Canteen Corp. v. Joseph

Valente, J.

(dissenting). As I view the city sales tax law, the vendor’s liability for taxes is limited to the tax collected or required to be collected. The law did not contemplate the imposition of a greater tax on the vendor than the vendor was required to collect from the purchaser. (See Administrative Code of City of New York, § N41-2.0, subd. e.)

In Matter of Grant Co. v. Joseph (2 N Y 2d 196, 204) the court per Fuld, J., said: “ It is clear that the section imposing a tax of 2% ‘ upon * * * receipts from every sale ’ (Administrative Code, § N41-2.0) must be read together with the section authorizing the comptroller to prescribe schedules of the amounts to be collected from purchasers so as to eliminate fractions of one cent (§ N41-3.0). Since it is specified that ‘ the vendor shall be liable for the collection ’ of the tax to be paid by the purchaser ‘ and for the tax’ (§ N41-2.0, subd. e), the necessary effect is to equate the vendor’s liability as a taxpayer with the purchaser’s obligation to pay the tax required to be collected. It would be anomalous indeed if the statute were to be read as imposing a higher tax on the purchaser than on the vendor. The liability of the latter is obviously to pay the tax required to be collected from the purchaser (Administrative Code, § 41-2.0, subd. e, as amd.), and it was manifestly contemplated and intended that the amount of the tax on the several individual sales was to be identical so far as both the purchaser and the vendor were concerned. (See Matter of Fifth Ave. Bldg. Co. v. Joseph, supra, 297 N. Y. 278, 283.) ”

That language forcefully accentuates the point that the vendor’s and purchaser’s liability for sales tax are coextensive and must be equated. The Comptroller may not therefore impose a separate liability for the sales tax on the vendor *390when the purchaser incurs no liability to pay any tax. Petitioner should not legally be compelled to pay a tax which it did not, and could not, collect from its purchasers.

If such liability is to be imposed, the statute should clearly give that right. As the statutes read in 1948, the sales tax to be 1 ‘ paid by the purchaser to the vendor as trustee for and on account of the city, and the vendor shall be liable for the collection thereof and for the tax.” (See Administrative Code, § N 41-2.0, subd. e.) Since the vendor petitioner herein did not collect any tax and the purchaser was not required to pay it, no liability should have been imposed on the vendor for a sales tax.

I therefore dissent, and would annul the determination of the Comptroller and direct a refund.

Botein, P. J., Babin and Stevens, JJ., concur with M. M. Frank, J., Valente, J., dissents and votes to annul in opinion.

Determination confirmed and the proceeding dismissed, with $20 costs and disbursements to the respondent.