Lynch, Milmed and Antell. The opinion of the court was delivered by Milmed, J.A.D.
Appellant Hoffman Import & Distributing Company (Hoffman) appeals from a judgment of the Division of Tax Appeals dismissing its appeal from an assessment made by the Director of the Division of Taxation under the Alcoholic Beverage Tax Law, N.J.S.A. 54:41-1 et seq. The matter had been submitted to the Division of Tax Appeals on a stipulation of facts and briefs.
The stipulation showed that warehouse premises of Hoffman, a wholesale wine and liquor dealer maintaining its premises in Carlstadt, were broken into by a "person or persons unknown" on or about December 4, 1972. The person or persons who broke in removed merchandise valued in excess of $50,000. Hoffman reported the incident to the Carlstadt Police Department and the Beverage Tax Bureau (Audit Section) of the Division of Taxation. On January 22, 1973 the Division of Taxation wrote to Hoffman acknowledging receipt of Hoffman's beverage tax report for November and December 1972 as well as Hoffman's letter of December 4 and the police report pertaining to the theft that day. Hoffman was also informed by that letter that the "theft" was taxable. It was also informed of the amount of the tax, as computed.
On February 7, 1973 the Director of the Division of Taxation made demand for payment of the tax assessed against the stolen goods, with penalty and interest, in the total amount of $10,313.99. A small part of the stolen merchandise was recovered by police authorities in Somerset County; and the items recovered, with the exception of two cases of
London Dry Gin which were retained for evidential purposes, were released to Hoffman by the Division of Alcoholic Beverage Control. The tax on the recovered merchandise was credited against the original assessment, leaving a balance due of $8,159.17 which Hoffman paid under protest.
In determining to dismiss Hoffman's appeal, thereby upholding the tax assessment on the stolen property, the judge of the Division of Tax Appeals before whom the matter came found: that "[t]he meaning and intent of the statute [the Alcoholic Beverage Tax Law] are clearly expressed"; that "the Legislature has determined that proper regulation and enforcement of the taxing statute requires that the word 'sale' [as defined in N.J.S.A. 54:41-2] shall include a theft"; and that "[t]he determination is not unreasonable when viewed in the light of the difficulties of the respondent [Director of the Division of Taxation] in determining whether liquor, allegedly stolen, has through fraud or artifice escaped taxation."
On this appeal Hoffman contends that the definition of "sale" contained in the Alcoholic Beverage Tax Law violates the due process and equal protection clauses of the State and Federal Constitutions; the statute, N.J.S.A. 54:41-2, in its definition of "Sale," should be declared unconstitutional; the transfer in this matter "is not a sale within the meaning of the statute," and "the Division of Taxation bears the burden of proof that the disposition of the subject goods was within the State of New Jersey and subject to taxation."
The pertinent provisions of the Alcoholic Beverage Tax Law read:
There are hereby levied and imposed upon any sale of alcoholic beverages made within this State or upon any delivery of alcoholic beverages made within or into this State the following excise taxes: * * * [ N.J.S.A. 54:43-1]
"Sale" means and includes, in addition to its ordinary meaning, any exchange, gift, loss, theft, or other disposition. In every case where alcoholic beverages are exchanged. given, lost, stolen or otherwise disposed of, they shall be deemed to have been sold, unless,
in case of loss by fire, proof is furnished to the satisfaction of the commissioner [director], that the alcoholic beverages have been so destroyed that they could not ...