Cascio v. Beam

SEILER, Judge,

dissenting.

I respectfully dissent. I would reverse, holding that the director of revenue was entitled to enforce the summons for plaintiff’s records.

We are concerned in this case with three sections of the Sales Tax Act. The first is § 144.220 which establishes a two-year limitation on assessment of proposed additional sales tax except in two situations. Those are instances of fraudulent tax returns or refusal or neglect to make a return. With these two exceptions every notice of proposed additional assessment of sales tax must be mailed to the taxpayer within two years after the return was filed or required to be filed. If not so mailed, it is barred.

The second section is § 144.320 which requires that taxpayers keep specified records concerning sales and provides for inspection thereof by the director of revenue at all times during business hours. The section also provides that such, records must be preserved for a period of at least two years.

Finally, § 144.330 authorizes the director of revenue, for the purpose of ascertaining the correctness of any sales tax return or determining the amount of tax due, to conduct investigations and to examine any books, records, etc., bearing on such sales by the taxpayer.

The principal opinion, on the basis of the provision in § 144.320 which requires that the records be kept for at least two years, holds that the legislature intended that the right of inspection conferred by §§ 144.320 and 144.330 be limited to that minimum holding period of two years. The net effect of such ruling will be this: When the director is seeking to determine taxes within the two-year limitation period provided in § 144.220, he may inspect records and summons their production in his effort to determine whether additional tax is due. However, if the two-year period has expired and the director thereafter seeks to determine whether any sales tax is due on the basis of fraud or a refusal to make a return, he may not utilize the right of inspection of records conferred on him by §§ 144.320 and 144.330.

This anomalous result surely was not intended by the legislature. I am convinced that it did not create an exception to the two-year limitation period in § 144.220 where there is fraud or a refusal to file a return and at the same time say in effect to the director that in seeking to utilize that exception his hands are tied in that he cannot inspect records or summons them in his effort to determine whether there is fraud or a refusal to file. I cannot ascribe any such illogical intention to the legislature, nor do I find any language in these sections of the statutes which indicate any such intention. The language of §§ 144.330 and 144.320 which confers the right of inspection is clear, concise, precise and unambiguous. It contains no qualifications or limitations other than the one which specifies that the inspection shall be during business hours. Where statutory language is *950clear and there is no ambiguity it is well established that there is no room for construction of the language and the rule cited in the principal opinion to the effect that taxing statutes are to be construed strictly against the taxing authority has no application. The obligation of the courts is to apply and enforce the plain language of the statute. See St. Louis Southwestern Railway Company v. Crunk, 594 S.W.2d 625 (Mo. banc 1980), decided_; United Air Lines, Inc. v. State Tax Commission, 377 S.W.2d 444, 448 (Mo. banc 1964).

If it made sense for the legislature to say that there would be no statute of limitation in the case of fraud or a refusal to file, and it did, then it also made sense for the legislature to give the director the same tools to seek out fraud or a refusal to file that he was given to utilize in seeking out additional tax during the original two-year period when fraud or failure to file need not be involved.

In seeking to justify its result the principal opinion speaks of the fact that the summons did not allege fraud or reasonable grounds to suspect fraud. However, such an allegation should not be a prerequisite to' examination of the records and the statutes do not recite any such requirement. In many instances there would be no way to know about or suspect fraud until the records are examined. If, after examination, no basis for claiming additional tax on the basis of fraud or failure to file a return is found, any claim will be barred by § 144.220 and the taxpayer will not be held liable for additional tax. If, however, a claim based on fraud or failure to file is found, such claim will not be barred under the provisions of § 144.220 and the director can proceed to assert the claim. This, in my view, is what the legislature intended and what §§ 144.220, 144.320 and 144.330, when read together, mean. The director should be able to examine the records to ascertain whether there has been fraud or a failure to file.

I recognize that in the principal opinion it is stated that “(W)e do not reach the question of what records may be subject to investigation under § 144.330, RSMo 1969, in a case involving fraud * * * ”, fraud or suspected fraud not having been alleged. The trouble with that caveat is that the opinion had already held unequivocally that the right to investigate and inspect under the statute is limited to a two-year period. That interpretation of the opinion is reinforced by subsequent language therein which states: “Approval of a summons that reaches back for records older than two years would place in the director’s hands the means to conduct fishing expeditions and to harass taxpayers. We find nothing in § 144.330, RSMo 1969, that authorizes the issuance of such a summons by the director of revenue or his agents.” That language very clearly demonstrates that the principal opinion results in a complete denial of any right of inspection in the director of revenue under §§ 144.320 and 144.330 after the expiration of two years. If he is to seek to ascertain after that time whether there has been a non-payment of sales tax on account of fraud or failure to file, he must do so by other means and without the assistance and discovery which §§ 144.320 and 144.330 were intended to provide. His hands are tied. I am convinced that the legislature did not so intend.