This proceeding in the nature of certiorari was brought under article 78 of the Civil Practice Act against the Comptroller of the City of New York by the National Cash Register Company, a foreign corporation which at the times here in question was doing in this State a business in the course of which it sold and delivered cash registers and other machines in the city of New York. For convenience, that company will be called the vendor.
Two causes of action are set forth in the petition. The first cause requests review of a determination of the comptroller, dated December 27, 1945, which assessed against the vendor a deficiency of city sales taxes in the sum of $45,728.20 for the period September 1, 1935, to December 31, 1940. The second cause requests review of another determination of the comptroller, dated January 24, 1946, which denied a claim made by the vendor for a refund of $11,576.70 of city sales taxes which it paid to the comptroller in the period April 1, 1936, to September 30,1940.
Applications for refunds of sales taxes erroneously, illegally or unconstitutionally collected by the City of New York must be lodged with the comptroller within one year from the payment thereof (Administrative Code of City of New York, § N41-8.0, subd. a). The refund claim here asserted by the vendor in its second cause of action was filed on January 29, 1943, which was more than three years after the one-year Statute of Limitations had run against that claim. Because of that delay, Special Term struck out the second cause of action for insufficiency in law (see Civ. Prac. Act, § 1293) and ordered that the petition of the vendor should thereafter consist only of the first cause of action alleged therein. The order of Special Term thus completely severed the second cause of action from the first cause. The Appellate Division affirmed, two Justices *203 dissenting. Since the order of affirmance was a final determination of the insufficiency of the second cause of action and was made by a divided vote, the vendor has now properly appealed from that order to this court as of right (see Civ. Prac. Act, § 588). The dissenters in that court said: “ As respondent [comptroller] has opened the question of petitioner’s sales tax liability and determined a deficiency for past years, it seems to us that petitioner should be entitled to set off, against any deficiency finally determined, the amount of any overpayment of sales taxes made during the period under review, although petitioner did not file a timely refund claim.” (274 App. Div. 920.) We are of that opinion.
“ Recoupment ” means a deduction from a money claim through a process whereby cross demands arising out of the same transaction are allowed to compensate one another and the balance only to be recovered (Ives v. Van Epps, 22 Wend. 155,156-157; Peuser v. Marsh, 218 N. Y. 505). Of course, such a process does not allow one transaction to be offset against another, but only permits a transaction which is made the subject of suit by a plaintiff to be examined in all its aspects, and judgment to be rendered that does justice in view of the one transaction as a whole. (Rothensies v. Electric Storage Battery Co., 329 U. S. 296, 299; Village of Charlotte v. Keon, 207 N. Y. 346; see Bull v. United States, 295 U. S. 247; cf. Lewis v. Reynolds, 284 U. S. 281.)
Here the city reopened the matter of the sales tax liability of the vendor for the period September 1, 1935, to December 31, 1940, and assessed a tax deficiency against it for that period. The vendor, as we think, was thereby given an equitable right to plead against the city a recoupment claim for taxes of the same type which the vendor (as it alleges) had erroneously paid to the comptroller in the same period.
The orders should be reversed, with costs in all courts and the matter remitted to Special Term for further proceedings not inconsistent with this opinion.