On appeal from Bureau of Inheritance Tax, Division of Taxation.
For affirmance -- Chief Justice Vanderbilt, and Justices Heher, Oliphant, Wachenfeld, Jacobs and Brennan. For reversal -- None. The opinion of the court was delivered by Wachenfeld, J.
This appeal from a determination of the Transfer Inheritance Tax Bureau calls into question the application of N.J.S.A. 54:34-2.1 to a somewhat unusual factual situation. The statute involved provides for the taxation of any "transfer of property passing to any child to whom the decedent for not less than ten years prior to such transfer stood in the mutually acknowledged relation of a parent," at the same rates and with the same exemptions as are applicable in the case of a transfer from a parent to a natural child.
The decedent, the natural aunt of the appellant, died in 1953, naming the moving party as the principal beneficiary of her estate, the gross value of which was reported as approximately $170,000. An inheritance tax report was filed by the executors of the decedent's estate, resulting in an assessment issued by the Bureau on July 22, 1954. No objection was filed to the assessment so made and time in
which to appeal from the assessment expired on September 9, 1954. R.R. 1:3-1(b).
On October 13, 1954 counsel for the executors wrote to the Bureau requesting a reduction in the assessment and a refund of inheritance taxes paid, claiming that while the blood relationship between the decedent and the appellant was that of aunt and niece, nevertheless the niece was entitled to an exemption based upon N.J.S.A. 54:34-2.1 by virtue of a "mutually acknowledged" parent-child relationship existing between them. Although the letter did not cite any statutory authority for the granting of a refund, the writer had obvious reference to N.J.S.A. 54:35-10, which provides, in substance, that a taxpayer may obtain a refund of taxes paid, at any time within three years from the date of payment of the tax, upon satisfactory proof that the amount of tax paid was in error.
The Bureau responded to the letter stating it would give consideration to whatever proof the executors might care to submit to establish the alleged parent-child relationship between the decedent and the appellant. Subsequently, several affidavits were proffered by counsel for the executors in support of the claim made, and testimony was taken by the principal examiner of the Bureau on January 20, 1955.
On April 7, 1955 the examiner issued his findings, holding the proof submitted failed to establish the alleged relationship as contemplated by N.J.S.A. 54:34-2.1, and he accordingly notified the executors their claim for a refund was denied.
An appeal to the Appellate Division from this determination was filed on May 23, 1955. The respondent there moved to dismiss the appeal, claiming it was not filed within 45 days from the date of the original assessment of taxes due. The motion was denied without opinion, and certification was sought from the order so entered, which also was denied by this court. 20 N.J. 465 (1956). However, we subsequently granted certification on our own motion prior to any argument of the appeal on the merits in the Appellate Division.
The respondent persists in the objection that the appeal was not timely filed. While the denial of the motion in the Appellate Division and our subsequent refusal to grant certification therefrom would, under ordinary circumstances, constitute a final disposition of this contention, we shall nevertheless pause briefly to point out the error of the reasoning pursued.
Respondent contends that a taxpayer's only recourse in the case of an overpayment of taxes is an appeal from the original assessment, and that no appeal will lie from the denial of an application for a refund. However, nothing contained in the Transfer Inheritance Tax Law limits the right of appeal to an assessment only. If the Legislature has accorded taxpayers the right to make application for a refund, in the absence of any contrary expression it must be deemed to have intended that an ...