The opinion of the court was delivered by: DOOLING
The statute of limitations barring claims for the recovery from the Government of overpayments of taxes is shorter than the general limitation barring non-tortious actions against the Government. Here the plaintiff paid amounts to the Government under the impression that it owed them as taxes on the transportation of freight. In fact, there was no tax. It had been repealed. Plaintiff did not file claims for refund within the three years after it filed the returns of "tax" and paid the amounts now sought to be recovered [26 U.S.C.A. Sec. 6511(a)], but it has sued (save for minor amounts) within the six years [28 U.S.C.A. Sec. 2401(a)] generally allowed for suits "upon any express or implied contract with the United States, or for liquidated or unliquidated damages in cases not sounding in tort" [28 U.S.C.A. Sec. 1346(a)(2), 1491].
Plaintiff contends that the plain words of the tax statute bar refund claims after three years only (a) where a "tax" is in fact "imposed", and (b) where there is a "taxpayer" who is "required to file a return"; that, in consequence, the refund claim was timely and the suit properly and timely filed under 28 U.S.C.A. Sec. 1346(a)(1), allowing certain tax refund suits to be filed in the District Courts; and that, alternatively, the suit lies, as one for money had and received and in conscience returnable, under the Government's more general consent to be sued in the District Courts in cases involving less than $10,000 which sound in express or implied contract or are for damages and do not sound in tort [28 U.S.C.A. Sec. 1346(a)(2), 2401(a)]. Cf. Compania Ron Carioca Destileria v. United States, 1958, 144 Ct. Cl. 66, 168 F. Supp. 546. The Government insists that the claim is either one for a refund of an amount paid as tax and governed by the tax limitation, or else it is a claim on a contract implied in law rather than in fact and will not lie against the Government at all. Cf. United States v. Minnesota Mut. Inv. Co., 1926, 271 U.S. 212, 217, 70 L. Ed. 911, 46 S. Ct. 501.
On defendant's motion for a dismissal and plaintiff's cross motion for judgment, it is concluded that the Court has jurisdiction of the case, that the claim is not barred by the statute of limitations for the most part, and that plaintiff is entitled to summary judgment to recover certain of the payments as due it upon implied contract.
Until August 1, 1958, plaintiff was subject to an excise tax on the transportation of property imposed by Internal Revenue Code Sec. 4271 (56 Stat. 979). The section imposing the tax was repealed by Public Law 85-475 effective August 1, 1958 (72 Stat. 260). Nevertheless, plaintiff continued to file returns and make payments until 1964.
The payments of tax were reported quarterly on Excise Tax Form 720, a general form covering a multitude of retailers' and manufacturers' taxes and taxes on facilities and service, and products and commodities. Each tax is given but a single line on the form. The line describes the tax, states the tax rate in most cases, leaves room to insert the tax amount, and then gives an "IRS No." to the tax. Before the repeal the line on Form 720 for the tax on transportation of property described the tax as applying to the "Transportation of property including coal". In the column for tax rate appeared a footnote reference, i.e., "(1)" and the footnote said "See instructions". The "IRS No." of the tax was given as "27". Form 720 is a one page form, made up in sets of a file copy and taxpayer's copy joined at the top along a line of perforations. The instructions, printed on the reverse of the forms and continuous from the reverse of the original to the reverse of the taxpayer's copy explained the application of the various excises and the filing procedure.
The procedure, as explained on the reverse of the form, and as appears from the copies of the returns, was that the District Director mailed a "preaddressed form" to each person who "once filed a return". Each such preaddressed form gave the taxpayer an identification number, in plaintiff's case 11-1323030, indicated the months to be covered by the return and stated the due date of the return.
It does not appear that plaintiff was ever liable for or paid any excise tax other than the tax on the transportation of property - while it was in effect. None of the returns in question, ten of them filed quarterly in and between October, 1958 and January 1961, embraced any tax for which plaintiff was liable - except the October 1958 return which reported tax on the July 1958 transportation of property. The first two preaddressed returns filed after the repeal continued to carry a line for a tax on the "Transportation of property, including coal" and plaintiff listed its supposed liability on that line.
There was no place for tax on the transportation of property on any of the Revised preaddressed Forms 720s sent to the taxpayer for the eight quarters, April 1959 through January 1961. The line on the form above the line formerly used by the property transportation tax continued to be used for "Transportation of persons, etc. [Rate] 10% . . . [IRS No.] 26"; that line remained unchanged from earlier Form 720s. In all its later filings, except for the return for the first quarter of 1959, filed in April 1959 (in which plaintiff may have left the tax lines blank and simply entered its supposed tax in the "Total" of the return) plaintiff inserted its supposed tax liability on the "Transportation of persons, etc." line. In the return filed in April 1960 for the first quarter of 1960, plaintiff typed into the space above the "Transportation of persons, etc." line, and somewhat obscuring the word "persons", the single word "vehicles" and typed "3%" into the rate column above the printed 10%. In the next two quarterly returns the only alteration, or supplementation, of the form was to type "3%" above the printed 10%. In the latest dated of the returns in question, there is no reference to "3%" or to "Vehicles".
Upon receipt of the returns accompanied by remittances (in the form of depositary receipts for the first two months of each quarter and the balance payment for the third month of each quarter) aggregating the amount set forth on the returns as the "net tax due", the District Director made assessments in the amounts of the remittances. The face of each return was stamped with the "account number" assigned to the account set up on the basis of the return and that number was also the assessment number. The remittances received were applied in satisfaction of the assessments so made.
The District Director's records of the receipt and deposit of each of plaintiff's remittances (except, perhaps, that of the second quarter of 1960
show the tax which the District Director treated himself as receiving, and show also, by easy inferences, the account and assessment number related to each receipt and deposit of a remittance. The collections for the second and third quarters of 1958 were treated as collection of ".27", the "IRS No." of the tax on the "Transportation of property including coal"; the collection record thus corresponds with the returns for the first two quarters in question. The collections for the remaining quarters are treated as collections of ".26", the "IRS No." of the tax on the "Transportation of persons etc."; the collection record thus corresponds with the returns for the last eight quarters, disregarding the three references to "3%" and the one reference to "vehicles", both of which are incompatible with the transportation tax as then in effect.
Plaintiff filed claims for refund of the amounts here in question on September 9, 1964. The claims were rejected on October 23, 1964, on the sole ground that the claims for refund had not been filed within three years from the time the returns were filed, or two years from the time the tax was paid, whichever was the later [26 U.S.C.A. Sec. 6511(a), (b)]. The present suit was instituted January 15, 1965.
The Government now states that even if the claim of plaintiff were otherwise allowable, plaintiff has not shown, nor has the Government by audit verified, the fact that plaintiff bore the burden of the tax rather than passing it on to its customers. But on a motion for summary judgment the Government must do more than pray time for an audit where, as here, plaintiff avers the fact and is able to show that for the period subsequent to that in suit the Government made an audit, expressed itself as satisfied that plaintiff had borne the burden of the tax and indicated that refund would be made in ordinary course. If plaintiff's claim is otherwise good, the "passing on" point would not preclude relief on the present showing.
Plaintiff's first contention rests on a precise reading of the tax statute. Section 6511(b) of the Internal Revenue Code authorizes refunds or credits only if a timely claim for refund has been filed. Section 6511(a) provides the time limit, and the only applicable time limit in the tax statutes, upon the filing of the required claims for refund. It enacts that a claim for refund or credit "of an overpayment of any tax imposed by this title [Title 26] in respect of which tax the taxpayer is required to file a return shall be filed by the taxpayer within 3 years . . ." Since, plaintiff argues, there was no imposition of tax, nor any return requirement, the time limit does not apply, the claim was therefore timely and the present suit properly and timely commenced under 28 U.S.C.A. Sec. 1346(a)(1) and Section 7422 of the Internal Revenue Code (26 U.S.C.A. Sec. 7422). The Government answers that unless plaintiff relies on and insists that the amounts sought are taxes and recoverable as such, there ...