Schaffer v. State Board of Equalization

VAN DYKE, J.

The plaintiff appeals from a judgment for defendants entered after sustaining a demurrer to plaintiffs’ complaint without leave to amend. The complaint alleges that plaintiffs were engaged in the business of selling tangible personal property at retail, possessing the required permit for the exercise of that privilege; that defendant State Board of Equalization, following the procedure outlined for that purpose in the Sales and Use Tax. Law (Rev. & Tax. Code, §§6451-6591), determined that between November 7, 1941, and August 31, 1945 plaintiffs became liable for additional sales taxes in a sum exceeding $5,000; that plaintiffs’ petition for a redetermination was heard and, aside from some minor adjustment in the total amount due, was denied; that having exhausted their administrative remedy the plaintiffs paid to the board $100 upon account and thereupon filed a claim for refund thereof in accordance with the provisions of the act governing refunds; that their claim of refund was denied and that within the time limited by the act after notice of denial, they brought this action to recover the amount so paid upon the same grounds urged in their claim for refund.

The only contention advanced by respondents in the trial court was that the complaint stated no cause of action, and that is the only contention advanced by respondents here. The argument is that to permit the trial of the cause set forth in the complaint would result, if plaintiffs were successful, in an adjudication that not only was the $100 erroneously

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and illegally assessed against plaintiffs, but also that the entire tax was likewise erroneously and illegally assessed; this is so, respondents say, because, as appears from the pleading, all of the transactions held by the board in its determination proceedings to have been taxable transactions theretofore unreported by plaintiffs, were the same kind, so that if one was not taxable none were taxable; the action, therefore, .is one to prevent the collection of the taxes assessed, contrary to the provisions of section 6931 of the act, which reads as follows: “No injunction or writ of mandate or other legal or equitable process shall issue in any suit, action, or proceeding in any court against this State or against any officer of the State to prevent or enjoin the collection under this part of any tax or any amount of tax required to be collected.” Respondents, in support of their position, rely upon the following cases: