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WARDALL v. STATE (1946)

District Court of Appeal, First District, Division 1, California.

WARDALL v. STATE et al.

CAVAGNARO v. SAME.

Civ. 12949.

Decided: February 19, 1946

Robert W. Kenny, Atty. Gen., and Carl W. Wynkoop, Deputy Atty. Gen., for appellants. Sefton & Quattrin, of San Francisco, for respondents.

Defendant State of California appeals from a judgment in favor of plaintiffs, taxpayers, in a suit to recover excise taxes, imposed upon wholesalers on the sale of distilled spirits, which were paid under protest.

The agreed statement states ‘The question on this Appeal relates to the right of the State Board of Equalization to make new deficiency assessments or levies under the Alcoholic Beverage Control Act, as amended in 1937, for a prior period and after the Board had already levied an assessment for that same period for which assessment had been paid by the licensee.’

The facts in the Wardall case are as follows: In 1937 the board made an examination and investigation covering the taxable period July 1, 1935, to December 31, 1936, the taxes for which period had originally been paid by stamps bought by the licensee. As a result of this investigation the board levied an assessment for the balance of tax due, or deficiency in payments, which levy was paid by the licensee without petitioning for a relevy. Two years later the board made another examination of the licensee's books to discover if there was a deficiency covering another period—January 1, 1937, to June 30, 1937. As a result of this examination and investigation the board levied an assessment for the specified 1937 period in the sum of $1,991.77. The licensee contested by filing a petition for a relevy within the fifteenday statutory limitation. Sec. 27b, Gen.Laws, Act 3796. The board made a re-examination and re-investigation and reaudit and determined that the last levy for 1937 imposed by the board in the sum of $1,991.77 was an error, but as a result of the re-investigation made another levy for the original period—July 1, 1935, to December 31, 1936—of $1,685.58.

The facts in the Cavagnaro case, except as to dates and the amounts, are the same as in the Wardall case, even to the extent of the board levying a specified amount covering a designated period which the board subsequently admitted was an error. Thereafter a levy was imposed for 1935–1936 based upon an examination in 1939. In each case the amount was paid under protest followed by separate superior court actions, with judgments for plaintiff in each case and the consolidation of actions on appeal.

It has been suggested that unless the licensees are compelled to pay the assessments they will pay a smaller tax than the full tax due. There is no evidence in the record to support such contention. It has also been suggested that if the licensee had paid the tax when he should have, subsequent levies would be unnecessary.

It is pertinent to summarize generally the basic facts in both cases: The original tax payment for the periods in question, prior to any investigations, examinations and levies under the provisions of sec. 27 et seq. of the act, was fixed by an assessment by the board monthly. Sec. 26 of the 1935 act, and sec. 26b of the 1937 act. In both cases the board re-assessed, having discovered errors in the first assessment, and levied a tax pursuant to secs. 27 and 27b which levy the taxpayers paid without protest. Then, after an attempted levy for another period and protest thereon pursuant to the provisions of sec. 27b, the third assessment or second re-assessment, and attempted second levy for the periods here involved were made. It was at this point that the taxpayers availed themselves of the protective provision in sec. 27b.

Covering the period in question, the pertinent sections of the Alcoholic Beverage Control Act, Stats.1935, Ch. 330, p. 1132, as amended in 1937, Stats.1937, Ch. 758, p. 2144, imposing an excise tax upon the sale of all distilled spirits by rectifiers or wholesalers in this state and fixing the rates thereof, read:

‘Sec. 24.2. It shall be presumed that all distilled spirits acquired by any rectifier or distilled spirits wholesaler have been sold in this State by such rectifier or wholesaler unless proven to the satisfaction of the board, in verified reports on forms prescribed by the board, that such distilled spirits are (1) still in the possession of such licensee, or (2) that such distilled spirits have been sold or delivered to another licensed distilled spirits manufacturer, rectifier, importer or wholesaler, or (3) that such distilled spirits have been exported without this State or sold for export by the licensee making the report and actually exported from this State within thirty days from the date of such sale, or (4) that prior to the termination of possession such distilled spirits have been lost through unintentional destruction, or (5) that prior to the termination of possession there has been an unaccounted for loss, but such unaccounted for loss shall not exceed a tolerance to be fixed by the board, or (6) that such distilled spirits have been consumed as samples on the licensed premises; or (7) that such distilled spirits are otherwise exempt from taxation under this act.’ Stats.1937, p. 2145.

‘Sec. 24.4. On- or off-sale distilled spirits licensees shall keep books of accounts in which shall be kept records of all disstilled spirits acquired by such licensees, or in lieu thereof shall preserve all original bills and invoices for distilled spirits acquired. Such records shall be in the form prescribed by the board and shall show at all times all purchases of distilled spirits made during the previous two years.’ Stats.1937, p. 2145. A portion of sec. 27 was repealed in 1937 and the quoted sec. 24.4 apparently governed the investigations and examinations here in question.

The means to be used in the collection of the tax referred to in sec. 24 is set forth in secs. 26, 26a, 26b, 33, 33a, 33b and 33c, Stats.1937, pp. 2146, 2147, 2153. At the time of the levies in question, sec. 27 of the act provided: ‘Sec. 27. If any examinations or investigations made by the board shall disclose that any reports theretofore filed with the board * * * have shown incorrectly the amount of * * * the excise tax accruing thereon, the board shall have the power, and is hereby authorized, to make such changes by a subsequent assessment as may be necessary to correct the errors disclosed.’ Stats.1937, p. 2147. Section 27, as amended, then provides for a hearing and the giving of a notice of the board's decision, and further provides for a rehearing and that if ‘affirmed it shall become due and payable at the time of such service of the notice thereof.’ Section 27 also provides: ‘If, after giving effect to the provisions of section 24.2, any examinations or investigations made by the board shall disclose that the amount of excise stamps purchased from the board by any rectifier or wholesaler is not sufficient to represent payment of the excise tax imposed upon the sale of distilled spirits sold by such rectifier or wholesaler, the board shall have the power, and is hereby authorized, to make a levy against such rectifier or wholesaler in the amount of the deficiency in the payment of the distilled spirits excise tax so disclosed.’ Stats.1937, p. 2148. Section 27a provides that notice of any levy must be given by the board.

‘Sec. 27b. Any wholesaler or rectifier against whom a levy is made by the board under the provisions of sections 27 or 27a hereof may petition for a relevy thereof within 15 days after service of the notice thereof. If such a petition for relevy is not filed within said 15 day period the amount of the levy becomes final at the expiration thereof.’ Stats.1937, p. 2148. Section 32 provides for a limitation of sixty days upon an action to recover a tax paid under protest. Stats.1935, p. 1139.

The crux of this case is the use of the word ‘final’ in sec. 27b. Appellants suggest that the court will find when the statute as a whole is considered that the act permits ‘any examinations or investigations' and that it is only ‘the amount of the levy’ resulting from a particular examination or audit that becomes final. It is also argued that if the trial court is correct then the finality of making an additional audit is left in the hands of a wholesaler by neglecting to petition for a relevy. The respondents' contention is that after a taxpayer has submitted his sale report and an assessment has been computed by the board and paid by the taxpayer, and a subsequent examination and investigation (or examinations and investigations) are made, resulting in a levy for a deficiency, that if the taxpayer does not contest the amount of the levied deficiency, a third assessment or second levy for deficiency may not be made under the plain language of the statute. Appellants urge that the use of the words ‘examinations' or ‘investigations' permits a levy after each repeated examination or investigation covering the same period. There may be more than one examination or investigation resulting in one levy, but if appellants' position is correct, no investigation, examination or audit or levy resulting therefrom could ever become ‘final.’ Thus the question involved is the right of the State Board of Equalization arbitrarily to make additional alleged deficiency levies covering a specified period when the board has once computed and assessed and subsequently re-computed and levied for that period—when the original assessment and the subsequent assessment and levy have been paid without protest.

There is nothing inherently wrong in collecting excise taxes for a specified period where, after ‘examinations and investigations,’ it appears that the taxpayer through error has made insufficient payment. It is also true that ordinarily a government agency may not lose a right to collect as the result of carelessness or incompetency on the part of its employees. 51 Am.Jur. 676, 26 R.C.L., p. 351, § 308. It has been held that assessment rolls may be corrected to include new property or to revalue that already on the rolls, and an additional or supplemental assessment made. People v. Nat. Bk. of D. O. Mills & Co., 123 Cal. 53, 55 P. 685, 45 L.R.A. 747, 69 Am.St.Rep. 32; City and County of San Francisco v. La Societe, etc., 131 Cal. 612, 63 P. 1016. Cases holding as above generally involve a single revision after ‘examinations and investigations.’ They do not involve several or more reassessments and re-levies. An exception is People v. Buckles, 57 Cal.App.2d 76, 134 P.2d 8, wherein two assessments were made apparently for the same period. The statute did not provide that a levy should be final. The point presented in this case was not raised in the Buckles case. Here the statute provides that the levy, if not contested, is final.

There is no claim or evidence that the taxpayer practiced fraud. If fraud were involved the state and the board would have a remedy against the taxpayer irrespective of the provisions of sec. 27b. The Alcoholic Beverage Control Act provides that if the licensee is guilty of fraud an additional penalty may be imposed. Sec. 26a. There is also a provision that such licensee may be criminally prosecuted for felony. Sec. 36. The subject of fraud is mentioned here because it has been suggested that the taxpayer is responsible for any and all errors in the levies and attempted re-levies. It may be well to note that the taxpayer merely files a monthly statement, sec. 26 which, if untrue, subjects the taxpayer to a severe penalty, sec. 26a. Upon receipt of the monthly statement the board computes the amount of the tax due.

If delayed levies are caused by the board's repeated carelessness in auditing, or in ‘examinations and investigations,’ repeated re-levies should not be viewed with favor. If the board has had a fair opportunity to make ‘examinations and investigations,’ and imposes a levy, the licensee should not be harassed and annoyed by further re-examinations and re-investigations, followed by further re-levies. If the state may make a re-levy after a levy which has been uncontested, it may make any number, resulting in depriving the taxpayer of the use of his books and subjecting him to the annoyance of appearing before the board or of having state auditors audit and re-audit without limitation at the place of business of the taxpayer. The error here was the error of the board. It is a distinct injury that a taxpayer may be left in a position where he can not budget approximately for taxes. Statutes of limitation, unless expressly provided, as herein, do not run against the state. Here the taxpayer is limited to a specified period of sixty days from the date of the payment of taxes to institute an action for their recovery.

In Carpenter v. Pacific Coast Ins. Ass'n, 10 Cal.2d 304, 306, 74 P.2d 511, 512, a case holding that assessments and penalties may be fixed in a subsequent year, the court said: ‘If the delayed assessment in the present case were an error caused by the board's own neglect, to the substantial injury of the taxpayer, it might be that a different conclusion would be indicated.’ Except upon the theory heretofore stated—that a government agency authorized to collect taxes should not ordinarily be prevented from exercising such right—there is no authority for repeated re-levies. In County of Colusa v. County of Glenn, 124 Cal. 498, 57 P. 477, a re-assessment case, it was held that the Board of Equalization may exercise only such power as is expressly conferred by statute.

Section 24 fixes the tax and the amount of the tax becomes due at the time of sale, and is payable after the board computes the amount of the tax. Rathjen Bros. v. Collins, 50 Cal.App.2d 774, 123 P.2d 930. The point raised in this case, namely, may a levy be made subsequent to a levy which was uncontested if the taxpayer protests the second levy, was not presented in the Rathjen case. Section 24 of the act authorizes an assessment, and sec. 27 provides for an investigation and a levy to cover any deficiency that may have occurred in the assessment, but there the authority stops. Under section 27b if the taxpayer does not deny the accuracy of the levy by requesting a re-levy within a designated time limit, the levy is final. There is no provision for a re-investigation or a re-levy covering the same period of time.

The levy refers back to the assessment which is imposed to cover a specified period. The ‘amount’ computed as the tax becomes ‘final’ for such period. If the Legislature intended that there should be levies without limit covering the same period, it was unnecessary to provide that ‘the amount of the levy becomes final.’ The word ‘levy,’ as generally accepted, refers to a demand or seizure to make a lawful order effective. When applied to taxation, it may mean to assess or to charge a person or property with an ‘amount’ already ascertained, or the declaration of the amount, or part of the amount, in the form of a demand or lien for payment. 25 Words and Phrases, Perm.Ed., p. 7 et seq.; Black's Law Dictionary, 2nd Ed., p. 714. As the word is used in the Alcoholic Beverage Control Act in the sections applicable to this appeal, the levy covers the deficiency between the full amount of the assessment and the amount paid. ‘* * * the board shall have the power, and is hereby authorized, to make a levy against such rectifier or wholesaler in the amount of the deficiency in the payment of the distilled spirits excise tax so disclosed.’ (Italics added.) Deering's General Laws, Vol. 1, 1937, sec. 27, pp. 1740, 1741; Stats.1937, p. 2147. It is plain that the amount ascertained as a deficiency is the amount of levy that becomes final.

In support of this conclusion is the use of the word ‘final.’ The word ‘final’ is generally used to express the thought of completeness—conclusiveness. 16 Words and Phrases, Perm.Ed., p. 573 et seq. When applied to a contested matter, it means that the issue is decided and therefore is at an end (Bixler's Appeal, 59 Cal. 550) so far as the jurisdiction of the court or board or commission wherein the matter was pending is concerned. In re Beers, 100 Cal.App. 796, 280 P. 1033. If the investigation could be renewed and a different or additional levy made, this would be a new proceeding. A levy to be followed by another levy would merely be an interlocutory order which would leave the taxpayer in a state of suspension pending further indefinite action by the board. Referring to final termination of a proceeding, the Supreme Court said in Jaffe v. Stone, 18 Cal.2d 146, 152, 114 P.2d 335, 339, 135 A.L.R. 775: ‘In stating the requirement of termination, courts often say that the proceeding must be ‘finally’ terminated. Such a statement is entirely accurate if the ordinary reasonable meaning of the words is taken. The proceeding must be finally terminated; that is, the particular criminal proceeding commencing, for example, by complaint and arrest, must have passed through some such stage as preliminary hearing and dismissal, or trial and acquittal or abandonment by the prosecuting authorities. When this has occurred, that proceeding is finally terminated. If the termination was such as not to constitute a bar to a new prosecution, the accused may be charged and tried again for the same offense; but this will be a new proceeding, with a new court number, new pleadings, new judge and jury, and a new judgment.'

Reading the statute as a whole undue emphasis can be placed on the plurality form of the words ‘investigations and examinations.’ Section 24.4 recognizes that there must be an end to examinations, audits, etc. by placing a two year limitation period on the time for which records must be kept. Section 27 authorizes the board to make only a levy. Moreover the taxpayer's time is limited in instituting proceedings for credits for overpayments and suits to recover taxes paid under protest. Secs. 27, 32. Consequently, the amount of the ‘deficiency’ or balance having become final, if there is no contest thereto, no other amount may be levied. In brief, the statute limits the power of the board to make a second levy if the first is uncontested. If contested the board may stand by the amount, may correct the amount of the levy or may re-levy. If uncontested, the state is benefited by collection without possibility of legal action. The compromise of tax contests is a well recognized method of ‘finally’ adjusting a contest. There accrues to the taxpayer by his acknowledgment of liability to pay the additional amount assessed, through failure to contest, the benefit that the assessment is now final and that he will not be harassed and annoyed further over matters within the specified period. The language used in the statute is plain, definite and unambiguous. The board's action was final and for that reason it could not at a later date renew and re-assess new deficiency amounts and levy thereon for the identical prior periods involved. In this case if the licensees had not voluntarily presented their records for re-examination the board could not have compelled such production in 1939 of the records for 1935 and 1936. Sec. 24.4.

The trial court not only gave a correct legal construction to the language used in section 27b but also decided the issues fairly and justly under all the circumstances.

The judgments are affirmed.

The rules of law set forth in the majority opinion are violative of fundamental principles of the law of taxation, and, for that reason, bound to lead to confusion. Moreover, under the rules there announced, the taxpayers involved are relieved from paying taxes which they do not deny they owe, resulting in discrimination against other taxpayers in the same class who paid the full tax when due. These results are reached in reliance on an interpretation given to § 27b of the statute—a section that obviously was passed to protect the state but which the majority interpret as a restraint against the state.

At the outset two things should be made clear. First, the taxpayers involved do not contend that they do not owe the taxes which are the subject of these actions. Their sole contention is that under § 27b the state is prohibited from making more than one relevy, even if the first relevy was erroneous. The agreed statement and the briefs contain no other contention. In the second place, it does not appear how the error necessitating the second relevy occurred. The majority opinion first assumes that the auditors of the State Board of Equalization were careless, and then holds (166 P.2d 27): ‘The error here was the error of the board.’ There is nothing in the record to support this assertion. The record is completely silent as to the cause of the error. There is no more reason to assume that it was because of carelessness on the part of the board employees than there is to assume it was caused by the submission of incomplete or inaccurate records by the taxpayers.

As the majority opinion points out, the tax involved is the excise tax imposed upon wholesalers on the sale of distilled liquors by the terms of the Alcoholic Beverage Control Act as amended in 1937, Stats. of 1937, Chap. 758, p. 2126. It is admitted that the two plaintiffs were duly licensed by the State Board of Equalization for the years in question as distilled spirits wholesalers and importers of distilled spirits under the terms of the statute.

In the Wardall case, the Board, in 1937, made an audit of the books and records of the licensee for the period July 1, 1935, to December 31, 1936, and determined that there was a tax deficiency of $30.59. An assessment was made in this amount and the licensee was notified in writing of the amount of the assessment, the notice reciting that the licensee could petition for a relevy within fifteen days, but upon failure to so petition ‘the amount of this levy becomes final at the expiration thereof.’ No petition for relevy was filed and the licensee paid the amount so assessed. In 1939 the Board made another audit of the licensee's books for the period January 1, 1937, to June 30, 1937, and thereafter notified the licensee that an assessment in the amount of $1,991.77 had been levied against him for that period. The licensee filed a petition for relevy, which resulted in a further audit of the books and records of the licensee. On this petition for relevy the Board determined that nothing was due for the 1937 period involved, but determined there was $1,685.58, due for the period July 1, 1935, to December 31, 1936. This sum was paid under protest by the licensee and this action brought to recover the same. The action resulted in a judgment against the State.

In the Cavagnaro case the appeal is from the judgment for the licensee in the amount of $259.49. The agreed statement shows that in January, 1938, the Board made an audit of this licensee's books and records for the period July 1, 1935, to December 31, 1937, and determined that $647.31 was due from the licensee for this period. An assessment was levied in this amount, the licensee was so notified, and the licensee paid the assessment. Thereafter in 1939 the Board made an audit for the period January 1, 1938, to June 30, 1939, and the auditor for the Board determined that $590.58 was due from the licensee for this period. Before an assessment was levied, however, the licensee convinced the auditor that but $18.62 was due for this period. Thereafter the Board, for reasons that do not appear, levied an assessment for this 1938–1939 period in the amount of $294.82. The licensee petitioned for a relevy. The Board thereupon determined that but $18.62 was due for the 1938–1939 period, but also determined that for the period July 1, 1935, to December 31, 1937, there was $259.49 due. This sum was paid under protest and this action instituted.

The sole question to be decided on both appeals relates to the validity of the relevies for taxable periods for which there has already been a levy under the statute. It is the contention of the State that it can collect past due taxes regardless of the number of period levies, while the licensees urge that under the statute but one levy may be made. The parties are agreed that the statute as it read in 1937 is applicable.

The majority opinion sets forth most of the pertinent provisions of the applicable statute, and only those sections not quoted in the majority opinion will be here set forth. Section 24 of the statute provides: ‘An excise tax is hereby imposed upon all distilled spirits sold in this State by rectifiers or wholesalers thereof * * *.’ Stats. of 1937, at p. 2144.

The act then provides that the tax imposed by § 24 shall be collected by means of attaching to each package containing such distilled spirits, stamps in such denominations as are equivalent to the amount of the tax. This method of collection has since been repealed. This method, while in force, was designed to keep the payment of the tax current with sales, but it was contemplated that additional assessments might be necessary. To this end statutory authority was given the Board to make investigations and additional assessments, and a statutory method of protesting and litigating the validity of such assessments set forth.

Following § 24 appear the various sections of the statute set forth in the majority opinion. Section 27a requires the Board to give to the licensee ‘against whom any levy is made under the provisions of section 27 of this act notice of such levy.’ Stats. of 1937, at p. 2148. Section 27d provides: ‘Upon payment to the board of the amount of any levy paid under the provisions of sections 27, 27b or 27c hereof [providing for hearing on petition for relevy] the board shall credit the distilled spirits excise tax stamp account of the wholesaler or rectifier against whom the levy was made with the amount of such payment for the period for which such levy was made. * * *’ Stats. of 1937 at p. 2149.

The majority opinion holds that the provisions of § 27b compel the conclusions therein reached. That section provides: ‘Any wholesaler or rectifier against whom a levy is made by the board under the provisions of sections 27 or 27a hereof [providing for notice] may petition for a relevy thereof within 15 days after service of the notice thereof. If such a petition for relevy is not filed within said 15 day period the amount of the levy becomes final at the expiration thereof.’ Stats. of 1937 at p. 2148.

The majority opinion holds that under § 27b, but one relevy is permitted for any particular period, and, if not protested, the amount of the tax fixed for that period becomes final against the state in the amount of the levy fixed by the Board. The state contends that § 27b places no such limitation on the Board's powers, and that, properly interpreted, the act permits as many levies by the Board for any particular period as may be necessary to collect the full tax owed by the licensee.

The majority opinion must place its sole reliance on its interpretation of § 27b. Were it not for that section there can be no doubt at all but that the relevies here involved would have been proper. The law is well settled without substantial contradiction that, in the absence of a limiting statute, when property or a taxable right escapes taxation, either because of acts of the taxpayers or by reason of mistakes of the collecting officials, the collecting officials may make as many relevies as may be necessary to collect the full amount of the tax due. The rule, amply supported by authorities from many jurisdictions, is stated as follows in 51 Am.Jur. p. 676, § 734: ‘The omissions of the taxing officers, in previous years, to assess certain property cannot control the duty imposed by law upon their successors or the power of the legislature. Taxes are not canceled and discharged by the failure of duty on the part of any tribunal or officer, legislative or administrative. Payment alone discharges the obligation, and until payment the state may proceed by all proper means to compel the performance of the obligation. No statutes of limitation run against the state, and it is a matter of discretion with it to determine how far into the past it will reach to compel performance of a taxpayer's obligation.’ See, also, City and County of San Francisco v. La Societe, etc., 131 Cal. 612, 63 P. 1016; Security Savings Bank v. San Francisco, 132 Cal. 599, 64 P. 898; Kern Valley etc. Co. v. County of Kern, 137 Cal. 511, 70 P. 476; Rosasco v. County of Tuolumne, 143 Cal. 430, 77 P. 148; Fullerton Oil Co. v. Johnson, 2 Cal.2d 162, 39 P.2d 796.

Thus, unless § 27b limits the power of the Board, it has the power to make as many levies as may be necessary to collect the tax due from the licensee.

Now what does § 27b provide? Simply that when a levy is imposed the wholesaler or rectifier is entitled to notice and may petition for a relevy. If he does not petition for such relevy within fifteen days ‘the amount of the levy becomes final.’ It seems perfectly clear to me that such section places no limitation on the state at all. The section was obviously passed not to provide a restraint against the state but to protect the state. The lawmakers were careful to protect the rights of the taxpayer by requiring notice, etc., and by permitting him to challenge a levy, and if he did not do so that levy becomes final—final against him, not final against the state.

To say, as do the majority, that § 27b places an absolute limitation of but one levy on the Board is to give that section a distorted meaning, and, not only disregards the language of § 27b, but entirely disregards all of the other provisions of the statute. It must be remembered that under the statute the amount of the tax is not fixed by any levy of the Board. Under the statute the exercise tax becomes due at the time of the sale, but is payable at a future date if it be discovered upon audit that the taxpayer has not paid the amount he owes the state. People v. Buckles, 57 Cal.App.2d 76, 134 P.2d 8. It has heretofore been held in reference to this very statute that § 24 imposes the tax and fixes the amount due and that no assessment or reassessment is necessary to create the liability. Empire Vintage Co. v. Collins, 40 Cal.App.2d 612, 105 P.2d 391; Rathjen Bros. v. Collins, 50 Cal.App.2d 774, 123 P.2d 930. In the Rathjen case it is stated page 783 of 50 Cal.App.2d, page 935 of 123 P.2d: ‘Section 24 imposed the tax, and no assessment or reassessment was necessary to create the liability or to make the taxpayer personally liable therefor, Dollar Sav. Bank v. United States, supra [19 Wall. 277, 86 U.S. 277, 240, 22 L.Ed. 80]; United States v. Chamberlin, 219 U.S. 250, 31 S.Ct. 155, 55 L.Ed. 204.’

If the above principles be kept in mind there is no difficulty at all in interpreting § 27b, either alone, or with the balance of the statute as a whole. The language of the section is that unless the licensee petitions for a relevy within a specified time ‘the amount of the levy becomes final.’ It should be noted that what is made final is not the amount of the tax but the amount of the particular ‘levy.’ As already pointed out, when an additional levy is made it is not the levy that imposes the tax. The amount of the tax is fixed under § 24 at the time of the sale. The subsequent levy, or levies, are merely means provided by the statute for collecting a tax already due. The Legislature must be presumed to have known the difference between making the amount of a tax final and making the amount of a particular levy final. When it used the word ‘levy’ it must have meant exactly what it said—namely, that that particular levy would become final against the taxpayer unless he petitioned for a relevy.

This interpretation is strengthened, if not in fact compelled, when the statute is read as a whole. Section 27 provides for ‘examinations or investigations' of the books and records of the licensee. Section 27a refers to ‘any levy’ and requires notice thereof to the licensee. Obviously these sections imply that the Board shall have the power to make as many investigations, examinations and levies as may be necessary to collect the tax.

This interpretation not only gives effect to the actual language of the statute but it is also in accord with public policy. These taxpayers owe the tax which is the subject of these levies. At least, they do not contend to the contrary. If they are not compelled to pay the tax they will have paid a smaller tax than those who have paid their full tax. Had the full tax been paid by stamps, no further levy or levies would have been necessary. Moreover, if the interpretation contended for by the licensees were correct it would mean that if the Board once made a levy on an incomplete record the licensees could, by failing to petition for a relevy, make the amount of the tax final, thus escaping the payment of their just tax.

It is true that under the interpretation given the statute in this opinion the Board may make investigations and subsequent levies for taxes due for some indefinite period in the past. The majority places great weight on this consideration. Conceivably, this could be a great inconvenience to the licensee and in some circumstances might cause the licensee financial loss. But it certainly cannot be assumed that the Board will abuse its powers. If it does, legal remedies exist to prevent such abuse. In a proper case, where facts not here present exist, an estoppel may operate against the government. La Societe Francaise v. Cal. Emp. Comm., 56 Cal.App.2d 534, 133 P.2d 47; Times-Mirror Co. v. Superior Court, 3 Cal.2d 309, 44 P.2d 547; McGee v. City of Los Angeles, 6 Cal.2d 390, 57 P.2d 925; City of Los Angeles v. County of Los Angeles, 9 Cal.2d 624, 72 P.2d 138, 113 A.L.R. 370; Farrell v. County of Placer, 23 Cal.2d 624, 145 P.2d 570, 153 A.L.R. 323. No facts to substantiate an estoppel here appear.

In my opinion the judgments appealed from should be reversed.

WARD, Justice.

ATTERIDGE, Justice pro tem., concurs.

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WARDALL v. STATE (1946)

Docket No: Civ. 12949.

Decided: February 19, 1946

Court: District Court of Appeal, First District, Division 1, California.

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