Ladd Petroleum Corp. v. Oklahoma Tax Commission

IRWIN, Vice Chief Justice,

dissenting:

68 O.S.Supp. 1979, § 226, inter alia, provides:

“(a) In addition to the right of appeal to the Supreme Court provided for in the preceding section, a right of action is hereby created to afford a remedy to any taxpayer aggrieved by the provisions of this article or of any other state tax law, or who resists the collection of or the enforcement of the rules or regulations of the Tax Commission relating to the collection of any state tax.
“(b) Within thirty (30) days from the date of mailing to the taxpayer of the order, ruling or finding of the Tax Commission, any such taxpayer shall pay the tax to the Tax Commission, and at the time of making such payment shall give notice to the Tax Commission of his intention to file suit for recovery of such tax ...”

The majority opinion holds that the thirty (30) days to commence proceedings in a district court start to run when a proposed assessment, made in the name of the Tax Commission by its authorized agent, is mailed to a taxpayer;1 and, a protest filed within the thirty days’ period under § 221 (e)2, or any extension granted for filing the protest under § 221 (f), does not extend the thirty days’ period.

*605A cursory reading of § 226 (b) discloses that the “30 days” speaks only to the payment of the tax and giving notice of an intention to file suit and does not mention a thirty day limitation for filing suit.3 Unless the thirty day period in § 226 (b) is extended and does not commence to run until the Tax Commission has mailed its “order, ruling or finding” on hearing the protest, a taxpayer is deprived of his right to a final determination of his protest by the Tax Commission prior to the time he must pay the “proposed assessment”, and the amount that it required to be paid is the “proposed assessment” and not the “tax” as determined by the Tax Commission.4

An appeal will not lie to this court under 68 O.S. 1979 Supp., § 225 5, from a “proposed assessment” or prior to the time the Tax Commission enters its order after hearing or determining a protest.6

In my opinion, 68 O.S. 1979 Supp., § 226, gives a taxpayer, during the same period of time in which to appeal to the Supreme Court, a right to invoke the provisions of § 226.7

Under 68 O.S. 1971, § 221 (g) a taxpayer may not invoke the provisions of § 226 if a “proposed assessment or an assessment of taxes has been permitted to become final.” Under § 221 (e) a proposed assessment becomes final within 30 days after the proposed assessment has been mailed to the taxpayer unless the taxpayer files a protest or obtains an extension to file a protest.

Prior to its amendment in 1978, § 226 contained no provision prescribing the time within which a taxpayer had to “pay the tax”8 in order to commence a district court action under § 226. It now has the thirty day proviso as a condition precedent. In Oklahoma Tax Commission v. Oklahoma Coca Cola Bottling Company, Okl., 494 P.2d 312 (1972), we said:

“The statute under which defendant in error has proceeded in the district court (§ 226) does not limit the time for the taxpayer to give notice to the Commission of his intention to pay the taxes under protest and file his suit to recover the amount. As above noted, however, there is the provision in § 221 (g) that he must not let the assessment become final for the provisions of § 226 to apply.”

Section 221 (g) provides that § 226 shall not apply where a proposed assessment or an assessment of taxes has been permitted to become final. This proviso recognizes a distinction between a “proposed assessment” and an “assessment of taxes” and in *606my opinion the legislature, in amending § 226 in 1978, did not intend to shorten the time for invoking § 226.

I respectfully dissent.

I am authorized to state that OPALA, J., concurs in the views expressed herein.

. 68 O.S. 1971, § 221 (a), (b) & (c).

. 68 O.S. 1971, § 221 (e) provides:

“If the taxpayer failed to file a written protest within the thirty (30) days’ period herein provided for or within the period as extended by the Commission, then the proposed assessment, without further action of the Tax Commission, shall become final and absolute at the expiration of thirty (30) days from the date same is mailed to the taxpayer or at the expiration of the period as extended by the Tax Commission.”

. As will be hereinafter shown, in my opinion the limitation period for invoking § 226 is under § 221 (g), which provides that it shall not apply where a proposed assessment or an assessment of taxes has been permitted to become final.

. A taxpayer who appeals to the Supreme Court as provided by 68 O.S. 1979 Supp., § 225, is required to pay the amount assessed by the Tax Commission as a condition precedent to appealing instead of the amount of the “proposed assessment”.

. 68 O.S. 1979 Supp., § 225, provides:

"(a) Any taxpayer aggrieved by any order, ruling, or finding of the Tax Commission directly affecting such taxpayer may appeal therefrom directly to the Supreme Court of Oklahoma. A taxpayer so desiring to appeal shall, within ten (10) days from the date of mailing to the taxpayer of any such order, ruling or finding, file with the Tax Commission a written notice of his intention to appeal.
(b) Within thirty (30) days from the date of mailing to the taxpayer of the order, ruling, or finding complained of, the taxpayer desiring to appeal shall file in the office of the Clerk of the Supreme Court a petition in error specifying the grounds upon which such appeal is based....”

. Where an administrative remedy is provided by statute, relief must be sought from the administrative body, and that remedy must be exhausted before the courts will act; exhaustion of the administrative remedy is a jurisdictional prerequisite for resort to the courts. Hughes v. City of Woodward, Okl., 457 P.2d 787 (1969).

. I find it unnecessary to discuss Oklahoma Tax Commission v. Smith, Okl., 610 P.2d 794 (1980) wherein we held that payment of tax under protest and filing of refund suit was not the exclusive remedy and that a declaratory judgment action was proper as no order, judgment or decree of the Commission was extant.

. Section 226 (b) refers to payment of “the tax” and the majority opinion in effect holds that “the tax” is the “proposed assessment.”