Hecht Co. v. District of Columbia

STEPHENS, Associate Justice

(dissenting) .

In my view the cases of Tumulty v. District of Columbia, 1939, 69 App.D.C. 390, 102 F.2d 254, and Hunt v. District of Columbia, 1939, 71 App.D.C. 143, 108 F.2d 10, establish that no reassessment of personal property can be made unless ex.pressly provided for by statute. The .statutes do not provide for reassessment of personal property except in one instance not applicable here. See D.C.Code (1940) *356§ 47 — 1212.1 The Board of Personal Tax Appraisers, if not satisfied with the correctness of a return of personal property, may reject the return and in such event may from the best information procurable or from examination of the personal property assess the same in such amount as seems just — notice of the rejection to be given to the party interested. § 47 — 1203. If at any time within any current year personal property subject to taxation shall have been omitted from assessment the Board of Personal Tax Appraisers may assess the same for the then current year, giving notice in writing to the persons so assessed. § 47- — -1213. Hunt v. District of Columbia, supra, in addition to holding that there can be no reassessment of personal property, holds that where an item of personal property has once been assessed, it cannot be treated by the Board of Personal Tax Appraisers as omitted property for the purpose of a supplemental or amended assessment at a higher valuation.

The taxpayer’s return in the instant case included inventory, accounts receivable and cash, and these items were assessed by the Board of Personal Tax Appraisers. The higher valuations imposed after the audit are in my opinion an attempted reassessment. There was no rejection of the taxpayer’s return as either false or incorrect. And since the taxpayer made return of the items of inventory, accounts receivable and cash, and since these items were then assessed, the increase of valuations by the Board of Personal Tax Appraisers cannot be treated as the assessment of omitted property. I do not understand it even to be contended that there was any omission of items so far as inventory or accounts receivable are concerned. While such a contention seems to be made in respect of the cash, I think it is not supportable. As stated by Mr. Chief Justice Hughes in Wheeling Steel Corp. v. Fox, 1936, 298 U.S. 193, 214, 56 S.Ct. 773, 80 L.Ed. 1143, “so-called ‘money in banld is not cash or physical property of the Corporation but is an indebtedness owing by the bank to the Corporation by virtue of the deposit account.” A bank indebtedness as a taxable item was returned by the taxpayer. The difference between the taxpayer and the Board of Tax Appeals is not in respect of the existence of a bank indebtedness but in respect of the value thereof as a matter of law. In this respect I am unable to distinguish the instant case from Hunt v. District of Columbia, supra, where the taxpayer returned an equity in stocks and bonds, being bought on margin, at a given figure which represented under the then instructions of the Assessor the taxpayer’s equity therein. The Board of Personal Tax Appraisers later attempted to assess the stocks and bonds at full value, on the theory that, since the names of the corporations issuing the stocks and bonds and the number of shares and bonds were not given in the return, the latter was not sufficient and therefore the excess of value above the amount stated by the taxpayer was omitted value and in contemplation of the statute omitted property. We held that this contention was not warranted. We ruled that it must appear that property has not been assessed at all before it can be treated as omitted property; that it was not sufficient that the appraisers through lack of information or otherwise might have erred in their judgment of the quantity, quality or value of the thing assessed.

I cannot agree with the majority view that § 47 — 1408 operates to render nugatory the rulings of this court in Tumulty v. District of Columbia and Hunt v. District of Columbia. I think it merely a statute of limitations and not a statute authorizing reassessments.

I do not understand Maryland & Virginia Milk Producers’ Association v. District of Columbia, 1941, 73 App.D.C. 399, 119 F.2d 787, to overrule the holding of Hunt v. District of Columbia that where an item of personal property has once been assessed it cannot be treated by the Board of Personal Tax Appraisers as omitted property for the purpose of a supplemental or amended assessment at a higher valuation.

There are provisions permitting the reassessment of real property. D.O.Code (1940) §§ 47 — 712, 47 — 716, 47 — 717, 47— 721. Cf. §§ 7 — 632 and 47 — 1106.