Goldmann, Leonard and Fritz. The opinion of the court was delivered by Leonard, J.A.D.
Plaintiff appeals from a Law Division order granting defendants' motion to dismiss its complaint and dissolving a temporary restraint which plaintiff had previously obtained.
The uncontroverted affidavits filed with the trial court by the field representatives of defendant Motor Fuels Tax Bureau (hereinafter Bureau), stated that on or about October 6, 1969 plaintiff's tank truck delivered fuel to diesel fuel tanks at a retail diesel fuel outlet, B.O.W. Motors in Little Ferry, New Jersey. B.O.W. Motors had two 4000-gallon diesel fuel tanks which are connected to a diesel fuel
pump. The pump is marked "diesel fuel" and the price per gallon of fuel is indicated thereon to include federal and state motor fuel taxes. On or about November 17, 1969 at plaintiff's office, plaintiff's president showed the Bureau field representatives records of deliveries made by plaintiff to B.O.W. Motors consisting of approximately 18,128 gallons of fuel oil, during the period from August 15, 1969 through October 6, 1969. The records indicated the dates of delivery, invoice numbers, price per gallon, and total sales price for deliveries during that period. On the same occasion the president told these field representatives that plaintiff had made additional deliveries of fuel to B.O.W. Motors, but he refused to disclose records of those deliveries.
Defendant Bureau wrote to plaintiff's attorney on January 7, 1970 stating that it deemed plaintiff liable for the motor fuels tax on fuel the company had sold because plaintiff had knowledge that the ultimate use of the fuel would be to propel motor vehicles on the highway. The Bureau demanded, pursuant to N.J.S.A. 54:50-2, that its representatives be permitted to enter plaintiff's premises for the purpose of auditing its records to determine any such liability. On January 15, 1970 the Bureau again wrote to plaintiff's attorney stating that if plaintiff did not make its records available for an audit by January 31, 1970, the Bureau, by authority of N.J.S.A. 54:49-5, would make an arbitrary assessment of the amount of tax due and proceed to take the steps necessary for collection.
Plaintiff instituted this action for declaratory judgment on February 2, 1970, alleging that it was not a taxpayer under the New Jersey Tax Upon Sale of Motor Fuels Act (hereinafter act), N.J.S.A. 54:39-1 et seq. , and that the Bureau's proposed action would deprive it of its property without due process of law, in violation of the federal and state constitutions. Plaintiff demanded judgment declaring its rights, declaring the imposition of any tax on it by the Bureau to be unconstitutional, and enjoining the Bureau from making the proposed tax assessment.
On February 17, 1970 the Bureau sent a tax assessment notice to plaintiff explaining that part of the assessment was based on actual sales of fuel from August 15 through October 6, 1969, as determined in the prior partial audit of plaintiff's records, and that the remainder of the assessment was projected for the period of January 1 through August 14, 1969.
On February 24, 1970 plaintiff obtained a temporary restraint against both defendants, the Bureau and the Director of the Division of Taxation, by alleging that it would suffer irreparable damage if defendants were able to proceed to docket and collect the tax assessment. The court ordered defendants to show cause why the restraint should not be continued pending final hearing.
Defendants answered the complaint and by way of defense asserted that plaintiff had not exhausted its administrative remedies and was therefore precluded from maintaining the action. They moved for an order dismissing the complaint or, in the alternative, directing plaintiff to seek a hearing of its case before the Division of Tax Appeals.
Plaintiff sent a timely Protest of Tax Assessment to defendant Director on March 16, 1970, preserving its right to an administrative hearing.
Plaintiff's order to show cause and defendants' motion to dismiss were heard on March 26, 1970. The trial judge held that plaintiff's action was premature because there was no imminent danger to it and it had not exhausted its administrative remedies. The temporary restraint was accordingly ...