PEOPLE v. MAHONEY (1938)

This is an appeal from a judgment on an instructed verdict. The action was brought by the People of the State of California for the recovery of sales taxes from the defendant, the complaint alleging that the defendant was a retailer and selling tangible personal property at retail and as such, under the provisions of the Retail Sales Tax Act (chap. 1020, Stats.1933, p. 2599, as amended by chaps. 351 and 355, Stats.1935, pp. 1225, 1252, and chaps. 400 and 778, Stats.1937, pp. 1326, 2222), was liable to the state of California for sales taxes, penalties and interest in a sum in excess of $5,000 because of said sales of said tangible personal property.

Defendant answered plaintiff's complaint denying all of the allegations of the complaint except as to his residence and as to the fact that there is a sales tax in the state of California. A jury trial was had and at the conclusion thereof the court instructed the jury to return a verdict in favor of the defendant, which was done, and judgment was entered accordingly.

The California Retail Sales Tax Act provides in section 9 thereof, as amended by St.1935, p. 1258, that all retailers must file returns at certain stated intervals setting forth the amount of their gross receipts, the amount of sales tax due, and must at the time of filing said returns pay the amount of taxes shown by the returns. Defendant filed returns and paid certain amounts of taxes which were the amounts due under said returns, but the board of equalization was not satisfied with said returns.

Under the provisions of section 17 of the Retail Sales Tax Act, as amended by St.1937, p. 2224, the board of equalization levied additional assessments against defendant for the period set forth in the complaint, and this case was tried by the plaintiff on the theory that the returns filed by defendant were incorrect and did not reflect the true amount of taxes due.

In support of plaintiff's case there was introduced into evidence a certificate of sales tax delinquency as provided for under section 30 of the California Retail Sales Tax Act, as amended by St.1935, p. 1265. This certificate showed that the board of equalization had levied an assessment against the defendant for delinquent sales taxes for the period, stating the amount. The certificate further stated that no amount of the indebtedness had been paid and that the whole thereof was wholly due, owing and unpaid.

The only evidence in the record to support the plaintiff's case that the defendant did in fact do more business than he reported and paid sales tax upon is this certificate of delinquency. Section 30 of the California Retail Sales Tax Act provides that the certificate in question in an action to collect delinquent taxes shall be “prima facie evidence of the levy of the tax, of the delinquency and of compliance by the board with all of the provisions of this act in relation to the computation and levy of the tax”.

Appellant contends that this certificate was sufficient to make out a prima facie case upon which to go to the jury. Neither the appellant nor the respondent has presented us with a citation of authority on the question. We are of the view that there is nothing in the act which provides that such certificate is prima facie evidence of the fact that the retailer did actually do the excess amount of gross business upon which the tax was levied, computed and declared delinquent in the certificate. There is no evidence whatever in the record to show defendant did any business at all over the amount he reported and paid taxes upon, and therefore the court properly directed a verdict for the defendant. “The court has the right to direct a verdict only when, disregarding conflicting evidence and giving opposing evidence all the value to which it is legally entitled, indulging in every legitimate inference which may be drawn therefrom, the result is a determination that there is no evidence of sufficient substantiality which would support a verdict contrary to the one directed, if given.” California Packing Corp. v. Lopez, 207 Cal. 600, 603, 279 P. 664, 665, 64 A.L.R. 1412.

Judgment affirmed.

CRAIL, Presiding Justice.

We concur: WOOD, J.; McCOMB, J.