McCloskey & Co. v. Comptroller of Treasury

Marbury, J., delivered the opinion of the Court. This appeal is from the action of the Superior Court of Balti ¹⁶⁵ more City dismissing the motion of the appellant, McCloskey and Company, to quash a Sales and Use Tax lien filed against the appellant by the appellee, the Comptroller of the Treasury, Retail Sales Tax Division. An original assessment of $16,603.24 was made by the appellee against the appellant, as a purchaser, based on a delinquent failure to file a return. The transactions involved were during the assessment period from December 27, 1957, through December 31, 1959, and involved purchases of tangible personal property by appellant for use in the performance of contracts with the United States Government.

Following negotiations between appellant and appellee, the assessment was adjusted, and on September 22, 1961, appellant was notified by appellee of adjusted assessment for sales or use taxes, interest and penalty in the total amount of $8,379.10. Pursuant to Code (1957), Article 81, § 352, appellant requested in writing on October 20, 1961, a revision of the adjusted assessment. Appellee notified appellant by letter on December 11, 1961, that the request for revision was denied. In the same letter, appellant was informed that appellee was filing a lien in the Superior Court of Baltimore City, and that unless appellee received a check within ten days from the date of the letter, further action would be taken for collection without notice to appellant.

A copy of the lien was enclosed. By letter dated December 20, 1961, appellant requested a formal hearing before the Comptroller pursuant to Code (1957), Article 81, § 351 (a). In the meantime, on December 12, 1961, appellee filed the notice of lien in compliance with Section 342 (b) of Article 81, as amended by Chapter 91, § 1, of the Acts of 1958, with the clerk of the Superior Court of Baltimore City, in which it was stated that the lien had the full force and effect of a lien of judgment extending to and covering all property and all rights to property, real and personal, of appellant. This latter statement is in accord with that section and Section 393 (b) of the same Article.

On December 22, appellant filed a motion to quash the Sales and Use Tax lien. This motion contained certain allegations claiming the unconstitutionality of the assessment giving rise to the lien, based primarily on the allegation that the taxes were ¹⁶⁶ discriminatory in that sales of tangible personal property to be used by contractors in doing business with the State of Maryland and its political subdivisions are exempt, but that sales of the same nature to those doing business with the United States are not. In the motion, which was amended twice, appellant stated his intention to fully exhaust his administrative remedy provided in Article 81, § 351. The State answered by filing a motion