208 Minn. 195

STATE EX REL. NORTHWEST AIRLINES, INC. v. MINNESOTA TAX COMMISSION AND OTHERS.1

July 12, 1940.

No. 32,377.

*196 J. A. A. Burnquist, Attorney General, and P. F. Sherman, Assistant Attorney General, for appellant.

John P. Devaney, Philip Neville, and Thomas O. Kaehel-macher, for respondent.

Gallagher, Chief Justice.

Action in mandamus to compel the state tax commission to issue its certificate for the refundment of certain income taxes which the taxpayer admittedly overpaid. The defense is that (1) the right to recover a refund is barred by the statute of limitations and (2) the taxpayer’s remedy, if any, is not in mandamus. There were findings and conclusions in favor of relator. The appeal is from a judgment entered pursuant thereto.

The findings stand unchallenged with the exception of the last clause of paragraph XI, which reads:

“* * * that it is not an aggrieved party entitled to a writ of certiorari to review the decision of the Minnesota Tax Commission because said decision finding the overassessment is favorable to it.”

From the findings these facts appear: On November 18, 1933, Northwest Airlines, Inc. hereinafter referred to as “taxpayer,” duly filed with the Minnesota Tax Commission, hereinafter referred to as the “Commission,” its income tax return for the period from January 1, 1933, to June 30, 1933, in which it reported a tax due the state of Minnesota of $1,061.98. This sum was paid to the state on April 26, 1934. On December 23, 1935, the commission determined a proposed additional tax liability against the taxpayer for the same period of $1,833.19. On February 24, 1936, a protest against the proposed additional tax liability was made by the taxpayer and a hearing demanded. On April 6, 1936, the commission changed the proposed additional tax liability from $1,833.19 to $1,665.95, and on April 17, 1936, the taxpayer *197protested against the amended proposed additional tax liability. On July 28, 1936, the commission made an order denying the protest.

On April 25, 1936, the taxpayer duly filed with the commission its claim for refund of taxes paid April 26, 1934, in the sum of $840.14 out of the sum of $1,061.98 previously paid. In that claim for refund and in its protest against the additional tax assessment of $1,665.95 the taxpayer contended that the tax should be computed on an actual accounting basis for the period from January 1, 1933, to June 30, 1933. On December 8, 1936, the commission made an additional assessment against the taxpayer covering the period from January 1, 1933, to June 30, 1933, demanding the payment of additional taxes in the amount of $1,665.95; that in due course and in the month of February, 1937, the taxpayer duly filed protest against said additional assessment, requesting a hearing and that the same be abated.

On September 19, 1938, a hearing was had at which the commission considered both the protest of the taxpayer against the additional taxes amounting to $1,665.95 and the taxpayer’s claim for refund of $840.14, and on that day made and filed its order in which it found that the taxpayer’s net income for the period involved was $14,187.67; that the tax thereon amounted to $459.14; and that the tax previously assessed consisting of $1,061.98 actually paid and $1,665.95 additional tax levied should be reduced to $459.14, leaving an overassessment of $2,268.79 and an overpayment of $602.84. The order so determining contained this statement:

“Refund of taxes shall be limited to the amount allowable under the provisions of Section 47 of the Act.”

For the.reasons hereinbefore stated, the commission refused to issue a refund certificate and this proceeding followed.

The case presents only two questions: (1) Is the commission under a legally enforceable duty to refund to the taxpayer the amount overpaid by it; and (2) if so,-is man- *198 damns the proper remedy to compel issuance of the refund certificate?

As controlling statutes, our attention has been called to L. 1933, c. 405, §§43 and 47, 3 Mason Minn. St. 1938 Supp. §§ 2394-43, 2394-47.2 In our opinion, § 43 has no applica*199tion where, as here, a claim 'for refund has been filed. This claim was filed within two years after the tax was paid. More than two years after the claim was filed the commission found that the taxpayer had paid more than was legally payable. It then became the duty of the commission, apart from the provisions of subdivisions (b) and (c) of § 47, to issue its certificate for the refundment of the excess with interest as prescribed in § 47 (a).

Appellants’ theory appears to be that since more than two years elapsed between the time the claim was filed and the time the commission made its decision with respect thereto, it was without power to issue a certificate for the amount overpaid. With this we do not agree. The commission’s duty is explicitly stated in § 47(a), and this duty is not *200qualified by any reference to § 47 (c). To be sure, § 47 (c) limits the right of a taxpayer to sue the commission for a claimed overpayment when a claim has not been decided within six months after filed to a period of two years following the filing of the claim. But this provision of § 47 (c) is inserted, as reference to the section will indicate, merely as an exception to the provision that the commission cannot be sued until it disposes of the claim. The section does not deprive the taxpayer of his right to a refundment, and where, as here, the commission proceeds to determine the merits of the claim, it has no application whatsoever.

The provisions of § 47 (b) are important in determining whether or not mandamus is a proper remedy. It is argued that the taxpayer’s remedy in light of the commission’s order was suit within six months after the order was made. We do not agree with this claim because, in our opinion, the taxpayer was not an aggrieved party under the decision of the commission. It was thereby decided that the taxpayer had paid more than was legally payable. There remained nothing more for decision. The commission had decided in the taxpayer’s favor; hence it was not an aggrieved party. Left undone was the purely ministerial task of issuing a certificate 'for the amount of the overpayment. In such a case mandamus is a proper remedy. State ex rel. Clark v. Jack, 126 Minn. 867, 148 N. W. 306; Hunt v. Hoffman, 125 Minn. 249, 146 N. W. 733; State ex rel. Board of Co. Commrs. v. Johnson, 111 Minn. 10, 126 N. W. 479; State ex rel. Child v. City of Waseca, 195 Minn. 266, 262 N. W. 633; State ex rel. Driscoll v. Enersen, 183 Minn. 341, 236 N. W. 488.

Of the cases cited by appellants only one, United States v. Bertelsen & Petersen Eng. Co. 306 U. S. 276, 59 S. Ct. 541, 83 L. ed. 647, is difficult to distinguish. Having read that opinion, we are not persuaded to the contrary of the views herein expressed. Appellants have expressed concern over the unlimited power to refund overpaid taxes which, *201by virtue of this opinion, will be Vested in the commission. No doubt appreciating this possibility, the legislature has avoided this danger by making proper amendments to the statute here considered. For the statute as amended, see 3 Mason Minn. St. 1940 Supp. §§ 2394-43 and 2394-47.

Judgment affirmed.

Mr. Justice Stone took no part in the consideration or decision of this case.

State ex rel. Northwest Airlines, Inc. v. Minnesota Tax Commission
208 Minn. 195

Case Details

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State ex rel. Northwest Airlines, Inc. v. Minnesota Tax Commission
Decision Date
Jul 12, 1940
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208 Minn. 195

Jurisdiction
Minnesota

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