In Thompson v. Eastern Air Lines, Inc., 200 Ga. 216, 224 (39 S.E.2d 225), it was held: "In the interpretation of doubtful statutes, much weight will be given... administrative and legislative interpretations."Summary of this case from Hawes v. N.C. St. L. Railway
JANUARY 9, 1946.
Appeal. Before Judge Almand. Fulton Superior Court. August 1, 1945.
Eugene Cook, Attorney-General, Marshall L. Allison and Fred B. Davis, Assistant Attorneys-General, for plaintiff.
Gambrell White, Smith, Kilpatrick, Clay, Cody, Rogers McClatchey, Goldstein, Frazer Murphy, for defendant.
Lindley W. Camp, as amicus curiae.
1. The Code, § 92-1402, which expressly imposed an excise tax upon motor fuel "imported and withdrawn for use within the State," was by the "Motor-Fuel Tax Law" of 1937 expressly repealed.
2. The provisions of the Motor-Fuel Tax Law (Ga. L. 1937, p. 167), imposing an excise tax "upon the sale or use of motor fuel," does not impose the tax upon storage and withdrawal within the State of such fuel purchased outside the State and imported in tank cars and stored within the State and subsequently withdrawn only for fuel in airplanes operated exclusively in interstate commerce.
3. The action of the legislature over a period of more than six years amending the above act in other respects, but refusing to amend the same to overrule interpretations by the administrative officials which held that it did not impose the tax upon storage and withdrawal, and finally, by the amendment of 1945 (Ga. L. 1945, p. 158), expressly prohibiting the collection of the tax upon storage and withdrawal, clearly demonstrates a legislative intent to relieve storage and withdrawal from the tax. Being a tax statute, under the rule of construction the act must be construed most strongly against the State and in favor of the taxpayer.
No. 15318. JANUARY 9, 1946.
Justice Head being disqualified, Judge West of the Western Circuit was designated for this case.
This case was an appeal from a motor-fuel tax assessment made by the State Revenue Commissioner against Eastern Air Lines Inc. The tax assessment was in an aggregate amount which included principal, penalty, and interest of $582,321.46, and covered the period from May, 1938, through January, 1944. The commissioner based the assessment upon the provisions of the "Motor-Fuel Tax Law" of 1937 (Ga. L. 1937, p. 167; Code (Ann.), §§ 92-1401 et seq.), which imposes an excise tax upon distributors for the "sale" or "use" of motor fuels. The motor fuel here involved was purchased by Eastern Air Lines Inc. outside the State of Georgia and shipped by rail in tank cars to Candler Field in Fulton County, Georgia, where it was unloaded into storage tanks belonging to Eastern Air Lines Inc., and from the storage tanks was transferred to the planes of Eastern Air Lines Inc. and consumed in propelling such planes exclusively in interstate commerce.
The assessment was made by the State Revenue Commissioner after due notice to Eastern Air Lines Inc., the filing of its objections thereto, and a hearing by the Commissioner. Eastern Air Lines Inc. objected to the assessment and urged in opposition thereto many grounds. It was contended that the provisions of the statute relied upon by the Commissioner did not impose the tax claimed by him, and that the word "use" found in the statute meant "consume." It was further contended that, shortly after the approval of the law relied upon by the Commissioner, the Comptroller-General, whose duty it was to collect the taxes thereunder, requested an opinion from the Attorney-General as to whether or not the law imposed a tax upon motor fuel handled in the manner now employed by Eastern Air Lines Inc., that the Attorney-General, on July 19, 1937, furnished the comptroller-General with an opinion holding that the law did not impose a tax upon such transaction, and that the Comptroller-General thereupon notified Gulf Refining Company, from whom Eastern Air Lines Inc. purchased all the motor fuels here involved, that no tax would be claimed on such transaction, and instructed Gulf Refining Company as to the manner of making monthly reports to the proper State official on all motor fuels sold in such manner. Each month since that time, Gulf Refining Company has made monthly reports in the form and manner directed by the Comptroller-General, and Eastern Air Lines Inc. has, during the period here involved, filed with Gulf Refining Company in its Atlanta office an affidavit showing the disposition it has made of the motor fuels thus purchased. It was further contended that the legislature has three times demonstrated its construction of the 1937 act, supra, and the legislative intent not to impose the tax here claimed by the Commissioner. It is pointed out that the 1927 Motor-Fuel Act, which was repealed by the act here relied upon, expressly imposed a tax upon storage and withdrawal for use, and that the 1937 act omitted this language. In 1943 an act was passed providing in substance that the legislature intended that the motor-fuel tax be paid by the consumer; and the act approved in 1945 expressly provided that no tax was imposed upon the transaction of storing and withdrawing for use; and these collateral interpretations of the 1937 act had given it a meaning which the court should approve, and thus hold Eastern Air Lines Inc. not subject to the assessment. It was further contended that, whether the collateral interpretations be considered or not, the language of the statute imposing a tax is at least doubtful as to whether it embraces the transaction covered by this assessment; and that such a doubtful statute must be construed most strongly against the State and in favor of the taxpayer, and that Eastern Air Lines Inc. should be thus relieved from the assessment made. It was further contended that the State is estopped, because of its interpretation for more than six years by its official charged with the collection of taxes of the law, which held Eastern Air Lines Inc. not subject; and it was further contended that, Eastern Air Lines Inc. having made reports as required by law, the commissioner, under the terms of the statute, has no authority to make the assessment or at least that portion beyond the two-year period prior to the date of the assessment.
Various official documents showing the course of the matter were introduced in evidence. It is shown by some of these documents that in 1937 the Comptroller-General requested and received an opinion from the Attorney-General; and that the Comptroller-General then ruled that the motor fuel handled in the manner here involved was not subject to the tax, and directed Gulf Refining Company as to the form and manner of reporting such sales; and that such reports had thereafter been made monthly by Gulf Refining Company to the proper State officials, and that Eastern Air Lines Inc. had filed with Gulf Refining Company an affidavit showing that the motor fuel was being handled in the manner above outlined. The evidence comprises a written stipulation of facts, documents, and testimony of three witnesses. It was shown that Eastern Air Lines Inc. has handled the motor fuel here involved in the manner above described since May 1, 1938, the date on which it was incorporated by the North American Aviation Inc. Up to that time it had been operated as The Eastern Air Lines division of North American Aviation Inc., and North American Aviation Inc. had operated its Eastern Air Lines division in 1937 and up to May 1, 1938, in the same manner. There was no disagreement upon the material facts in the case.
The trial judge, sitting without a jury, ruled that the 1937 act did not levy a tax on storage and withdrawal of motor fuels; that the word "use" in the act was, because of legislative interpretation and practice for more than six years, and because of the 1945 amendment, construed to mean "consumption;" that the said motor fuel was used solely in interstate commerce, and hence the assessment here was in violation of the commerce clause of the Federal Constitution, article 1, section 8, paragraph 3; that, since the law did not impose the tax claimed, the assessment by the State Revenue Commissioner was in violation of the due-process clause of both the State and the United States Constitutions. Judgment was rendered sustaining the appeal and setting aside the assessment. The State Revenue Commissioner's amended motion for new trial was overruled, and he excepted.
The act of 1937 (Ga. L. 1937, p. 167) imposes an excise tax "upon the sale or use of motor fuel . . within this State." There is no sale involved here, and consequently the tax assessment depends for support in law upon whether or not there has been a "use" of motor fuel in contemplation of that word as employed in the statute. Thus, at the very threshold of our consideration of this case, we encounter the necessity for a determination of the meaning of that word "use" as employed in the statute. That the motor fuel here involved was in interstate commerce at the time of its transportation from without this State to the place of storage within the State, and also while used as fuel in the defendant's airplanes which were engaged exclusively in interstate commerce, and therefore not subject to the tax here claimed, is settled law. Article 1, section 8, paragraph 3, United States Constitution; Helson v. Kentucky, 279 U.S. 245 ( 49 Sup. Ct. 279, 73 L. ed. 683); Bingaman v. Golden Eagle Lines, 297 U.S. 626 ( 56 Sup. Ct. 624, 80 L. ed. 928). This narrows the period and the place where the tax claimed could be constitutionally imposed to its storage and withdrawal. The tax could be imposed upon storage and withdrawal without offending the Constitution of the United States. N.C. St. L. Ry. v. Wallace, 288 U.S. 249 ( 53 Sup. Ct. 345, 77 L. ed. 730, 87 A.L.R. 1191); Edelman v. Boeing Air Transp., 289 U.S. 249 ( 53 Sup. Ct. 591, 77 L. ed. 1155); American Airways Inc. v. Grosjean, 3 F. Supp. 995, affirmed 290 U.S. 596 ( 54 Sup. Ct. 129, 78 L.ed. 524). It follows that the question which must be decided here is limited to whether or not, when properly construed according to established rules of construction, the statute does in fact impose the tax claimed upon storage and withdrawal, which were the only operations that could be lawfully taxed. The excellent briefs of counsel on both sides demonstrate that the word "use" has an exceedingly broad meaning, by citing definitions contained in dictionaries and definitions found in decisions of many courts. Such varied definitions are interesting and informative; and if, under controlling rules for the interpretation of statutes which we must observe, it were permissible to ascribe to the word "use" as here employed any possible meaning to be found in any such definitions, we would be inclined to hold that it is comprehensive enough to embrace storage and withdrawal. But the courts of this State are not allowed such unlimited scope in the interpretation of a statute. By the mandate of law (Code, § 102-102), we are required to give the word its ordinary signification. Standard Steel Works Co. v. Williams, 155 Ga. 177 ( 116 S.E. 636); State of Georgia v. Camp, 189 Ga. 209 ( 6 S.E.2d 299). In applying this rule of construction, it was stated in Persons v. Hight, 4 Ga. 474, 486: "The current of authority in this country, at least at the present day, is in favor of reading statutes according to the natural and most obvious import of the language, without resorting to subtle and forced constructions, for the purpose of either limiting or extending their operation. The words of a statute, says Chancellor Kent, if of common use, are to be taken in their natural and ordinary signification; and this is now received as an elementary rule." When put to this test, the word "use" at once takes on a clear and very definite meaning as applied to motor fuel. It would hardly be denied that the natural and ordinary meaning of the use of motor fuel is to consume it by combustion in a motor or for cleaning purposes or other uses that either consume it or at least render it unsuitable for future use as fuel for a motor. It is by its very nature not adaptable to repeated uses, and hence to speak of use is to signify its consumption or destruction. To use it in the ordinary sense means the very opposite of preserving it by storage. Counsel for the Revenue Commissioner contend that, since the Supreme Court of the United States in Edelman v. Boeing Air Transp., supra, referred to storage and withdrawal of motor fuel as "use", and since, in Sparling v. Refunding Board, 189 Ark. 189 ( 71 S.W.2d 182), and Central Vermont Ry. Inc. v. Campbell, 108 Vt. 510 ( 192 A. 197, 111 A.L.R. 175), the word "used" as employed in motor-fuel tax statutes was construed to mean storage and withdrawal, the word "use" as here applied to motor fuel embraces storage and withdrawal. The decisions relied upon do not control here. In Edelman v. Boeing Air Transp., supra, the question for consideration was whether or not such a motor-fuel tax offended the commerce clause of the United States Constitution, and it does not appear that the statute there under consideration was enacted under the circumstances attending the enactment of our law. The State court decisions relied upon are not binding upon this court, and it does not appear that the laws in those States controlling the construction of statutes were the same as or similar to our law, and neither does it appear that a motor-fuel tax statute containing, as our old law did, a provision expressly imposing the tax upon storage and withdrawal had been repealed by the statute there construed. If all the circumstances there had been the same as those here, much weight would be given to those decisions. Slaton v. Hall, 172 Ga. 675 ( 158 S.E. 747); Laslie v. Gragg Lumber Co., 184 Ga. 794 ( 193 S.E. 763, 113 A.L.R. 932). But this court long ago, in Thornton v. Lane, 11 Ga. 459, stated in unmistakable terms the rule that the decisions of the courts of other States are not binding upon this court; that they are mere opinions, and would be followed only in case this court considered them sound and saw fit to follow them.
But if it be conceded that such decisions of other courts, together with definitions of the word "use" cited by counsel for the Revenue Commissioner, indicate that the word "use" as here employed might embrace the operations of storage and withdrawal, this would only cause the meaning of the statute to become doubtful, and in the interpretation of a doubtful statute we are governed by certain rules, the controlling rule being that the legislative intent be ascertained and given effect. Ex'rs of Henderson v. Alexander, 2 Ga. 81, 85; Bacon v. Jones, 116 Ga. 136 ( 42 S.E. 401); Evans v. Evans, 190 Ga. 364 ( 9 S.E.2d 254); Carroll v. Ragsdale, 192 Ga. 118 ( 15 S.E.2d 210). In applying this rule, we are aided greatly by the fact that the existing law which this act repealed contained a provision expressly imposing the tax upon storage and withdrawal, thereby unmistakably signifying a legislative purpose to do away with the law that imposed the tax upon such operations. The new statute made no attempt to re-enact the old provision, although the legislature knew at the time that the old law had been construed by the Attorney-General to be valid and to impose the tax upon storage and withdrawal, and that this defendant's predecessor corporation had accepted such construction and was paying the tax upon storage and withdrawal. Could it be said that the legislature intended to abandon its own language, which was demonstrating its sufficiency to collect the tax, and take the chance that the word "use" would be construed to mean the same thing, and this notwithstanding the fact that the members of the General Assembly knew that the rules of construction require that it be given its natural and ordinary meaning, which did not include storage and withdrawal?
Counsel for the Revenue Commissioner contend that a portion of the caption, wherein it is stated in substance that the purpose of the act was to provide more stringent laws and regulations for the collection of the tax, shows a legislative intent to impose the tax upon storage and withdrawal by the word "use." Courts may examine the caption as an aid to interpretation of a doubtful statute. Eason v. Morrison, 181 Ga. 322 ( 182 S.E. 163). But the application of this rule here does not sustain the contention made. The caption states an intention to repeal the entire law imposing taxes upon motor fuel and to enact a new law for that purpose. The portion of the caption relied upon by the Revenue Commissioner does not state that all laws imposing taxes will be retained or that any law imposing a tax will be enacted. It simply states that more stringent laws and regulations for the purpose of collecting such tax as is by the act imposed will be enacted. We are not here dealing with any portion of the act which is intended merely as an instrument for the collection of a tax that is admittedly imposed, but we are dealing solely with the question as to whether the provisions of the law under consideration impose the tax. There is no conflict between the body of the act and the portion of the caption relied upon.
While it would perhaps be true that, by imposing the tax upon storage and withdrawal, the law would thereby prevent an evasion of the tax imposed on sales, there is no question here of an evasion or even a desire upon the part of the taxpayer to avoid paying the tax. On the contrary, as stated above, the defendant's predecessor corporation handled its motor fuel exactly as is being done by the defendant and voluntarily paid the full taxes imposed on storage and withdrawal under the old law. The purpose or wisdom in repealing and refusing to re-enact a law imposing the tax upon storage and withdrawal is a matter for the exclusive determination of the legislature and is no legitimate concern of the judiciary. Flint River Steamboat Co. v. Foster, 5 Ga. 194 (48 Am. D. 248); Winter v. Jones, 10 Ga. 190 (54 Am. D. 379); Puckett v. Young, 112 Ga. 578 ( 37 S.E. 880); Harrison v. Hartford Steam Boiler Ins. Co., 183 Ga. 1 ( 187 S.E. 648); Mayes v. Daniels, 186 Ga. 345 ( 198 S.E. 535); New Amsterdam Casualty Co. v. McFarley, 191 Ga. 334 ( 12 S.E.2d 355).
Since this is a tax statute, if of doubtful meaning another rule of construction must be applied, which is that it must be construed liberally in favor of the taxpayer and against the State. Mayor c. of Savannah v. Hartridge, 8 Ga. 23; Standard Oil Co. v. Swanson, 121 Ga. 412, 414 ( 49 S.E. 262); McIntyre v. Harrison, 172 Ga. 65 ( 157 S.E. 499); Vincent v. Poole, 181 Ga. 718 ( 184 S.E. 269); Forrester v. Interstate Hosiery Mills, 194 Ga. 863 ( 23 S.E.2d 78).
In addition to the foregoing reasons why we hold that the tax here claimed is not imposed by the law, there have been more than six years of administrative interpretation, obviously approved by the legislature, holding that such tax was not imposed. Shortly after this law was approved in 1937, the Attorney-General ruled that it did not impose the tax upon storage and withdrawal. The Comptroller-General, who was at that time the State official charged with the duty of collecting the tax, ruled that the law did not impose the tax upon storage and withdrawal. Successive State Revenue Commissioners, who succeeded the Comptroller-General as the State official charged with the duty of collecting such taxes, followed the previous rulings that such a tax was not imposed. During this time the General Assembly convened a number of times and amended the law in other respects without ever amending it to impose the tax upon storage and withdrawal. And finally, by an amendment approved on February 28, 1945 (Ga. L. 1945, p. 158), the legislature expressly provided that no tax should be imposed upon storage and withdrawal. In the interpretation of doubtful statutes, much weight will be given such administrative and legislative interpretations. Solomon v. Commissioners of Cartersville, 41 Ga. 157; State of Georgia v. Camp, 189 Ga. 209 (supra); Wilson v. Pollard, 190 Ga. 74 ( 8 S.E.2d 380). Since it is held that the law either plainly fails to impose the tax or at least is doubtful, and under the rules must be construed as not imposing the tax, the rule requiring the courts to give unambiguous statutes the interpretation which their language clearly implies, irrespective of contrary administrative interpretations, as held in Standard Oil Co. v. State Revenue Com., 179 Ga. 371 ( 176 S.E. 1), Elder v. Rome Building c. Asso., 188 Ga. 113 (2) ( 3 S.E.2d 75, 122 A.L.R. 738), and Suttles v. Northwestern Mutual Life Ins. Co., 193 Ga. 495 ( 19 S.E.2d 396), does not conflict with our ruling. The law does not impose the tax claimed, and the assessment offends the due-process clause of the Federal and State Constitutions, as held by the trial court, and is void.
Judgment affirmed. All the Justices concur.