Comptroller of the Treasury v. Brand Iron, Inc.

KARWACKI, Judge. In this appeal the Comptroller of the Treasury, Retail Sales Tax Division, challenges an order of the Circuit Court for Baltimore County remanding this case to the Maryland Tax Court. The appellant asserts that this action merely compounded an error of the Tax Court in not dismissing the appellee’s appeal to it because of the appellee’s failure to exhaust the prescribed remedies for a taxpayer seeking revision of a retail sales and/or use tax assessment. The appellant is correct and we will reverse.

This case stems from an assessment levied by the Comptroller for unpaid sales and/or use taxes due from September 8, 1978 through July 13, 1982 against the appellee, Brand Iron, Inc. The appellee applied for revision of that assessment pursuant to Md.Code (1957, 1980 Repl.Vol.), Article 81, § 351. 1 In response to a request by the Secretary and Treasurer of Brand Iron, Mr. Harry L. Lawrence, Jr., the appellant scheduled an informal conference for March 8, 1983. On that date, Mr. Lawrence telephoned Mr. John Sherry at the Retail Sales Tax Division and informed him that he was unable to attend. Mr. Sherry requested that Mr. Lawrence set forth in writing his reasons for his failure to appear on behalf of the appellee. Mr. Sherry waited three weeks for a response.

Receiving none, he wrote to Mr. Lawrence and denied the appellee’s requested revision of assessment. The appellee was given thirty days in which to request a formal hearing. A formal hearing was requested on April 15, 1983, and one was scheduled for August 11, 1983. On that day, the hearing was postponed upon the appellee’s request so it could arrange to be represented by an attorney.

The hearing was reset for October 4, 1983. ²¹⁰ On October 4, 1983, the appellee’s representatives again failed to appear for this hearing. Thereafter, Ms. Susan Demyan, the Comptroller’s hearing officer, sent separate letters addressed to the appellee and to its Secretary-Treasurer, Mr. Lawrence, advising that the failure of the appellee to appear at the formal hearing rendered the assessment final and correct. On October 13, 1983, Brand Iron appealed to the Maryland Tax Court. The Comptroller filed a motion to dismiss the appeal based on Brand Iron’s failure to exhaust its remedies before the Comptroller prior to its appeal to that agency 2 as required by Md.Code, supra, Article 81, § 230.

That statute provides: No appeal to the Maryland Tax Court shall be allowed until the party seeking to appeal has exhausted his remedies before the appropriate assessing or taxing authority, including the property tax assessment appeal board in the county or city where the property is located. This section applies to ordinary and special taxes. After hearing argument on the motion, the Tax Court entered its order on April 10, 1984 granting the motion to dismiss the appeal, but adding: IT IS FURTHER ORDERED, that the appeal in the above entitled case be and the same is hereby REMANDED to the Comptroller of the Treasury, Retail Sales Tax Division, for an informal hearing. 3 The Comptroller then appealed to the Circuit Court for Baltimore County contesting that portion of the order which remanded the case for further proceedings before the Comptroller. That court concluded that the order of the ²¹¹ Maryland Tax Court was ambiguous and remanded the case to the Maryland Tax Court for clarification.

The appeal to this court then ensued. The General Assembly has plainly provided that an appeal to the Maryland Tax Court will be permitted only where a taxpayer “has exhausted his remedies before the appropriate assessing or taxing authority.” Md.Code, supra, Article 81, § 230. Failure of a taxpayer to comply with this requirement prevents the Tax Court from exercising its jurisdiction over any appeal by the taxpayer. In such a case, dismissal of the appeal by the Tax Court is mandated.

Boyd v. Supervisor of Assessments, 57 Md. App. 603 , 471 A.2d 749 (1984). In Boyd this Court held that the