Undercofler v. v. F. W. Post 4625

Pannhll, Judge.

Irrespective of whether or not the Revenue Commissioner may by necessity, or implication, have authority to cancel or abate an assessment to correct what may at the time appear to be an error of fact or law, and after so canceling or abating, make a new assessment to correct the erroneous cancellation or abatement of the first (see Georgia R. &c. Co. v. Wright, 124 Ga. 596, 615, 53 SE 251; Commissioner v. Newport Industries Inc., 121 F2d 655, 657), such rule has no application to the present case where the first assessment was not canceled for any such reason, but was canceled solely to effect an extension of time to the taxpayer for appeal from the assessment contrary to the legislative provision limiting the time in which the taxpayer might appeal to 15 days. The statute gives the Commissioner no such authority either expressly or by necessary implication. It follows that the cancellation of the first assessment and the issuance of the second assessment and *713the third assessment, in no way correcting any errors in the first assessment, were nugatory.

Nothing to the contrary was ruled in Nikas v. Oxford, 103 Ga. App. 721 (120 SE2d 6-77). In that case there were material changes in the executive order regarding the suspension of a license under the Alcoholic Beverage Act, so as to be tantamount to a new determination. Here we have no modification or new determination, but new assessments identical with the previous assessments; nor do we have here the question of the time of a suspension of a license which rests within the discretion of the Commissioner and which- may be revoked or changed at his discretion.

In view of the special concurrence by Chief Judge Felton, concurring in the judgment of affirmance, but on the ground that the tax assessments were void because the Commissioner had no jurisdiction to make an assessment on illegal sales, we have added the second headnote and division to this opinion.

Section 2 of the Georgia Retailers and Consumers Sales and Use Tax Act (Ga. L. 1951, pp. 360, 362) as amended by Ga. L. 1960, pp. 153, 158, levies and imposes a tax “on the retail purchase, retail sale, rental, storage, use or consumption of tangible personal property, and the services” therein described, at certain rates.

Section 3 (c) 1 defines “retail sale” and “sale at retail” and provides that “for the purpose of the tax imposed by this Act, these terms shall include but shall not be limited to the following: . . . (c) [as amended by the Act of 1953, p. 193] Sales of tickets, fees or charges made for admission to or voluntary contributions made to places of amusement, sports, or entertainment, including billiard and pool rooms, bowling alleys, amusement devices, musical devices, theaters, opera houses, moving picture shows, vaudeville, amusement parks, athletic contests, including wrestling matches, prize fights, boxing and wrestling exhibitions, football and baseball games, skating rinks, race tracks, public bathing places, public dance halls or any other place at which any exhibition, display, amusement or entertainment is offered to the public or place or places where an admission fee is charged, together with charges made for the operation *714of coin-operated musical devices and other such coin-operated, amusement devices and charges made for participation in games and amusement activities.” Paragraph (c) (2) of Sec. 3, as amended by various Acts, lists numerous exceptions to the general terms “sale at retail,” etc.

In construing this Act, the Supreme Court of this State in Oxford v. J. D. Jewell, Inc., 215 Ga. 616 (112 SE2d 601), a case involving the question of whether or not sales to the United States Government or any instrumentality thereof are taxable under the Act, said: “Unless retail sales made by the retailer are exempt under provisions of the Act, he must pay the tax on them. The nature of the sales is of no moment, except as the exclusion provisions of the Act might affect them.” (Emphasis ours). It was said in that case that the “Georgia Sales and Use Tax is noted for the fact that it is all-inclusive, covering everything from the cradle to the grave. Exemptions are the rare exception.” In the dissenting opinion in that case, it was said: “As previously pointed out, it is . . . the legal duty of a Georgia retail dealer in tangible personal property to collect the tax imposed by the Act upon any, every, and all retail sales made by him, except those sales which the Act exempts, . . .” Under these circumstances, it would seem that the Act taxes all retail sales as defined therein except those specifically exempted under the terms of the Act.

The Sales and Use Tax Act in its terms being general and in its terms containing express exemptions from the generality of the terms levying the tax “it would seem unreasonable to assume, without a clear expression of such intention, that the legislature intended that a tax should be imposed on those who complied with the mandate of the law but that those who flagrantly flaunt the law should not be required to pay such tax.” 118 Pa. Super. 58 (180 A 144). The above case from which the quotation was taken involved a tax on stored spirituous and vinous liquors, and the tax was sought to be imposed upon illegally manufactured whiskey. For similar cases, see Empire Vintage Co. v. Collins, 40 Cal. App. 2d 612 (105 P2d 391); annotations in 43 ALR 799, 51 ALR 1026, 118 ALR 827, 160 ALR 1225.

We find nothing in the Act which indicates any intention on *715the part of the legislature to differentiate between legal and illegal sales, and the general language of the Act should not be limited to legal sales only merely because the Act does not specifically tax illegal sales by referring to them as such. This fact does not automatically eliminate illegal sales. Unless there are other reasons for so construing the Act, it could be as readily argued that since the legislature did not specifically tax legal sales by name, it was their intent to tax only illegal sales. In so construing the Sales and Use Tax Act, we are not unmindful that statutes are not always construed according to the letter, and general expressions may sometimes be restrained so as to make the statute bear reasonable construction (Forsyth v. Marbury, R. M. Charl. 324, 334), and that in construing statutes a thing which is within the letter of the statute is not within the statute unless it be within the intention of the makers (Cook v. King, T. U. P. Charl. 265), and that courts must regard substance and not adhere too closely to the letter (Moody v. Threlkeld, 13 Ga. 55 (7)), and that, when to follow the literal sense of words of the statute leads to absurdity, this constitutes sufficient authority to depart from them (Gillis v. Gillis, 96 Ga. 1, 9, 23 SE 107, 30 LRA 143, 51 ASR 121), and that general terms in a statute providing for collection of taxes are not allowed their full literal import, if the effect is to require that to be done which the law does not authorize. They merely do not apply here. What applies here is the rule that where a statute is plain and susceptible of only one construction the court has no authority to place a different construction on it but must apply it according to its terms. State Revenue Commission v. Brandon, 184 Ga. 225, 228 (190 SE 660); Thomas v. Lumbermen’s Mut. Cas. Co., 57 Ga. App. 434, 436 (195 SE 894).

Let us now determine whether there are any reasons, other than the plain language of the statute, which might show the manifest intention of the legislative body to be different from the literal sense of the terms of the statute. It is contended that to tax the illegal sale is equivalent to licensing an illegal activity and that we should not so construe the Act as to give such an intent to the legislature in the absence of clear express words to the contrary. While this argument might have some *716force as to those sales made prior to the effective date of the Act of 1960 (Ga. L. 1960, p. 153), the preamble of which states that it is “An Act to amend an Act entitled ‘The Georgia Retailers’ and Consumers’ Sales and Use Tax Act,’ approved February 20, 1951 (Ga. L. 1951, p. 360), as amended, so as to remove ambiguities which have become apparent with respect to upon whom the tax is levied and imposed, and to clarify the Act so as to make it clear that the legal imposition of the tax is upon the purchaser and thereby express the original intent of the General Assembly” and re-enacts a new Section 2 of the Sales and Use Tax Act eliminating therefrom the language describing the tax as “A privilege or license tax” upon the seller, such arguments have no application to any sales made subsequent to March 1, 1960.

Does the fact that prior to the Act of 1960 the Sales and Use Tax Act was in the nature of a license and occupation tax (Williams v. General Finance Corp., 98 Ga. App. 31, 34 (1a), 104 SE2d 649; Oxford v. J. D. Jewell, Inc., 215 Ga. 616 (1a), supra) make applicable to the present case the ruling in Miller & Co. v. Shropshire, 124 Ga. 829 (53 SE 335, 4 AC 574) and Wright v. Mayor &c. of Macon, 5 Ga. App. 750 (64 SE 807), so as to give validity to the argument that the legislature did not intend to repeal the laws making the operation of a gambling device illegal and therefore did not intend to tax illegal sales? In Miller & Co. v. Shropshire, 124 Ga. 829, supra, the tax levied was upon a specific operation or business, that is, a “bucket shop,” which, under other enactments of the legislature, was an illegal gambling operation, and it was said in that case “that where the pursuit of a particular calling, such as maintaining a gaming-house, has been prohibited by criminal statute, yet, if the legislature subsequently imposes a license tax upon that occupation, those who engage in it after paying the required tax are exempt from prosecution and punishment for a penal offense.” In the present case (as to sales occurring prior to March 1, 1960), we have no such specific license tax on an illegal business; on the contrary, we have here a general license tax, in addition to other taxes, on the privilege of doing business, measured by sales, and the fact that a person otherwise duly licensed to do business *717may engage in making illegal sales does not exempt such person from the tax required by the Act. In Wright v. Mayor &c. of Macon, 5 Ga. App. 750, supra, the General Assembly had expressed and established the general policy of the State with reference to the existence of “locker clubs” which authorized the assembling of liquors in a bona fide private club, and the court held that a municipal ordinance cannot control such matter where the tax imposed by the State on such locker club has been paid. Here again we have a tax on a specific activity, which prior to the tax Act was illegal. In this case, Judge Powell concurred specially because of what he considered the binding precedent of Miller & Co. v. Shropshire, 124 Ga. 829, supra. We think his special concurrence is appropriate to the present case. “I have always thought that the better view was expressed by Judge Cooley in Youngblood v. Sexton, 32 Mich. 406 (20 AR 664). I quote his language: ‘The idea that the State lends its countenance to any particular traffic by taxing it seems to us to rest upon a very transparent fallacy. It certainly overlooks or disregards some ideas that always must underlie taxation. Taxes are not favors; they are burdens; they are necessary, it is true, to the existence of the government, but they are not the less burdens, and are only submitted to because of the necessity. It is deemed advisable to make careful provision to preclude these burdens becoming needlessly oppressive; but it is conceded by all the authorities, that under some circumstances they may be carried to an extent that will be ruinous to individuals. It would be a remarkable proposition, under such circumstances, that a thing is sanctioned and countenanced by the government when this burden, which may prove disastrous, is imposed upon it, while, on the other hand, it is frowned upon and condemned when the burden is withheld. It is safe to predict that if such were the legal doctrine, any citizen would prefer to be visited with the untaxed frowns of government rather than with those testimonials of approval which are represented by the demands of the tax-gatherer. It may be supposed that some idea of special protection is involved when a business is taxed; taxation and protection being reciprocal. If the tax upon any particular thing was the consideration for the protection given to the owner *718in respect to it, this might be so; but the maxim of reciprocity in taxation has no such meaning.’ ”

The special concurrence, in what we consider to be an erroneous interpretation of the statute, attempts to exclude illegal sales by a construction of an “inclusion” clause of the Act which expressly states that the “inclusion” clause does not limit the general terms of the Act as to what type of sales are taxed, and in so doing, the minority opinion assumes that all the classifications in the “inclusion” clause apply only to legal sales and then applies the ejusdem generis rule to arrive at the conclusion that the phrase, “other such coin-operated amusement devices,” applies only to the legal sales. This, in our opinion, is begging the question. Such argument assumes an answer (that the inclusion clause applies only to legal sales) and then uses this answer as a major premise to prove (by application of the ejusdem generis rule) the answer assumed in the first instance. The major fallacy in such reasoning is reaching a conclusion that an “inclusion” clause is one of limitation, when such clause expressly states it is not one of limitation.

That the term, “other such coin-operated amusement devices,” does not refer to musical devices (although the body of the Act might be ambiguous) becomes apparent upon reading the preamble of the Act of 1953 amending the section of the Sales and Use Tax Act which recites that the Act is to make clear “the intent of the General Assembly in regard to the operation of coin-operated musical devices, coin-operated amusement devices and charges made for participation in games and amusement activities.”

Even if the statute should be construed as contended in the special concurrence, it does not-necessarily follow that the assessments are void for lack of jurisdiction on the part of the Commissioner to issue the assessment; nor would such partial illegality of the assessment in one of the cases void the remainder assessed for sales which were not illegal. It seems, therefore, that the question decided in Division 1 of the opinion must of necessity be decided in either event.

It follows that, for the reasons given, the trial court did not err in granting the summary judgment in favor of the taxpayer.

*719 Judgment affirmed.

Nichols, P. J., and Frankum, J., concur. Felton, C. J., concurs specially, as do Bell, P. J., Jordan, Hall, Eberhardt and Russell, JJ.