INDIANA TAX COURT
JACK GRAY TRANSPORT, INC. et al., )
v. ) Cause No. 49T10-0002-TA-14
INDIANA DEPARTMENT OF )
STATE REVENUE, )
ORDER ON REHEARING
NOT FOR PUBLICATION
June 8, 2001
Both parties have petitioned for rehearing. The petitioners, Jack Gray Transport, Inc.
and thirty-eight other similarly situated parties
(collectively Jack Gray), petition for rehearing from
this Courts determination that class certification should be denied. The respondent, Indiana
Department of State Revenue (Department), petitions for rehearing from this Courts determination that
summary judgment should be denied for the Department and instead granted for Jack
Gray on the basis that it should have been given an opportunity to
present material evidence as to the subject matter jurisdiction of all petitioners.
For the reasons stated below, the Court denies Jack Grays petition for rehearing
and grants, in part, the Departments petition for rehearing.
FACTS AND PROCEDURAL HISTORY
The Court has previously reviewed the facts of this case, which are set
forth in Jack Gray Transport, Inc. v. Indiana Dept of State Revenue, 744
N.E.2d 1071, 1073-74 (Ind. Tax Ct. 2001). Therefore, this Court will briefly
review only the relevant factual and procedural history of this case in order
to provide insight as to the current posture of this case.
Jack Gray appealed the Departments final determination wherein the Department declined to apply
Indianas proportional use exemption to the motor fuel and surcharge taxes under Indiana
Code §§ 6-6-4.1-4(d) and 6-6-4.1-4.5(d) for the second, third, and fourth quarters of
1998 and the first two quarters of 1999. Jack Gray requested that
this Court certify this case as a class action with Jack Gray as
class representative. The Department filed a motion to dismiss, which the Court
transformed into a motion for summary judgment. See Jack Gray Transport, 744
N.E.2d at 1073 n.3 (Ind. Tax Ct. 2001). In its motion, the
Department argued that this Courts opinions in Bulkmatic Transp. Co. v. Indiana Dept
of State Revenue, 691 N.E.2d 1371 (Ind. Tax Ct. 1998) (Bulkmatic II) and
Bulkmatic Transp. Co. v. Indiana Dept of State Revenue, 715 N.E.2d 26 (Ind.
Tax Ct. 1999) (Bulkmatic III) held that the statutes under which Jack Gray
sought its refund, Indiana Code §§ 6-6-4.1-4(d) and 6-6-4.1-4.5(d), were wholly unconstitutional and
thereby authorized the Department to deny the exemptions at issue.
This Court denied Jack Grays request for class certification. Jack Gray, 744
N.E.2d at 1077. After concluding that this Courts Bulkmatic II and III
opinions did not find Indiana Code §§ 6-6-4.1-4(d) and 6-6-4.1-4.5(d) unconstitutional on the
and did not authorize the Department to deny the parties exemptions and
claims for refund, this Court denied the Departments motion for summary judgment, entered
summary judgment in favor of Jack Gray, and instructed the Department to grant
the exemptions and issue refunds to the petitioners. Id. Both parties
now petition for rehearing. Additional facts will be provided as necessary.
ANALYSIS, OPINION AND ORDER
Having reviewed both parties petitions for rehearing and having held a hearing with
regard thereto, the Court now finds the following as set forth below.
Jack Grays Petition for Rehearing
Jack Gray argues that this Court should grant rehearing in its favor because
this Court erred in finding that Jack Gray had not met the numerosity
requirement for class certification. (Petr Pet. for Rehg at 2.) See
Ind. Trial Rule 23(A)(1). Jack Gray has not presented any evidence of
numerosity that persuades this Court to vacate its original judgment denying class certification.
Therefore, the Court denies Jack Grays petition for rehearing.
Departments Petition for Rehearing
The Department does not challenge this Courts holding that it was required to
apply the exemptions and issue refunds. Instead, the Department argues, among other
things, that this Court should grant rehearing in its favor because this Court
did not provide it with a reasonable opportunity to present evidence on the
issue of any potential subject matter jurisdictional infirmities of the additional thirty-eight parties
when the Court treated its motion to dismiss as a motion for summary
judgment. (Respt Pet. for Rehg at 3-6.)
Subject matter jurisdiction is the power of a court to hear and
determine the general class of cases to which the proceedings before it belong.
Carroll County Rural Elec. Membership Corp. v. Indiana Dept of State Revenue,
733 N.E.2d 44, 47 (Ind. Tax Ct. 2000). Whether a court has
subject matter jurisdiction depends on whether the type of claim advanced by the
petitioner falls within the general scope of authority conferred upon the court by
constitution or statute." Id. (quoting Musgrave v. State Bd. of Tax Comm'rs,
658 N.E.2d 135, 138 (Ind. Tax Ct. 1995)).
The general scope of authority conferred upon the Tax Court is governed by
Indiana Code § 33-3-5-2(a)(1). This section provides that the Tax Court
is a court of limited jurisdiction and has exclusive jurisdiction over any case
that: (1) arises under the tax laws of Indiana and (2) is
an initial appeal of a final determination made by the Department. Ind.
Code § 33-3-5-2(a)(1) (West 2000); see also Carroll County Rural Elec. Membership Corp.,
733 N.E.2d at 47. Indiana Code § 33-3-5-11(a) states that [i]f a
taxpayer fails to comply with any statutory requirement for the initiation of an
original tax appeal, the tax court does not have jurisdiction to hear the
appeal. Ind. Code § 33-3-5-11 (West 2000). The Tax Courts jurisdiction
is also dependent upon when the appeal from the Department is filed in
this Court. Hyatt Corp. v. Indiana Dept of State Revenue, 695 N.E.2d
1051, 1053 (Ind. Tax Ct. 1998), review denied. Indiana Code §
6-8.1-9-1(c) states that the Tax Court does not have jurisdiction over a refund
the appeal is filed more than three (3) years after the date the
claim for refund was filed with the department;
the appeal is filed more than ninety (90) days after the date the
department mails the decision of denial to the person; or
the appeal is filed both before the decision is issued and before the
one hundred eighty-first day after the date the person files the claim for
refund with the department.
Ind. Code § 6-8.1-9-1(c) (West 2000). CONCLUSION
The Department does not challenge the jurisdictional prerequisite that this case arises under
Indiana tax laws, but instead challenges the jurisdictional prerequisite that requires that a
final determination has been issued. The Department contends that it should have
been given the opportunity to verify whether there was a final determination issued
by the Department for each of the petitioners that would confer jurisdiction upon
this Court. Specifically, the Department claims that it needs to investigate whether
all petitioners even filed a claim for refund with the Department for the
quarters at issue or met other jurisdictional requirements. The failure to obtain
this Courts jurisdiction may be raised by the parties or the court at
any point during the action including appeal. Coachman Vans v. State Bd.
of Tax Commrs, 639 N.E.2d 1066, 1067 (Ind. Tax. Ct. 1994) (quotation omitted).
This Court lacks jurisdiction over a taxpayers case seeking a refund from
the Department if the taxpayer has not filed a claim for refund with
the Department. GasAmerica Services, Inc. v. Indiana Dept of State Revenue, 552
N.E.2d 860, 862 (Ind. Tax Ct. 1990). Because the issue of jurisdiction
is crucial to this Courts entry of a final judgment as to all
parties, the Court GRANTS, IN PART, the Departments petition for rehearing by allowing
it 120 days to investigate whether all joined petitioners have filed a claim
for refund or met other jurisdictional requirements.
For the foregoing reasons, the Court DENIES Jack Grays petition for rehearing and
GRANTS IN PART the Departments petition for rehearing. The judgment finding that
the Department acted contrary to law when it failed to grant the exemptions
and issue refunds to petitioners for the quarters at issue is hereby affirmed
to the extent that each petitioner has met jurisdictional prerequisites. Final judgment
as to all parties, however, is hereby suspended so that the Department can
conduct further investigation to verify that all petitioners properly filed claims for refund
and that this Court has jurisdiction over all thirty-eight petitioners. The Department
is ordered that it has 120 days to investigate the propriety of the
thirty-eight petitioners claims and to present any claims that may need to be
dismissed due to a lack of subject matter jurisdiction.
Thereafter, this Court will enter final judgment as to all claims over which
it has subject matter jurisdiction.
Thomas G. Fisher, Judge
Indiana Tax Court
Robert W. Loser, II
Patrick M. OBrien
Michael R. Franceschini
William S. Ayres
Ruth E. Myer
AYRES CARR & SULLIVAN, P.C.
251 East Ohio Street, Suite 500
Indianapolis, Indiana 46204
Attorney General of Indiana
By: David A. Arthur
Deputy Attorney General
Indiana Government Center South, Fifth Floor
402 West Washington Street
Indianapolis, Indiana 46204-2770
Upon motion by Jack Gray, this Court joined the thirty-eight other
petitioners in this case on May 5, 2000.
This Court found that only the limitation, in Indiana, contained in
Indiana Code §§
6-6-4.1-4(d) and 6-6-4.1-4.5(d) was unconstitutional and that the effect of
the Bulkmatic opinions was to sever this infirm part of the statutes and
leave the rest of the statutes intact. Jack Gray Transport, Inc. v.
Indiana Dept of State Revenue, 744 N.E.2d 1071, 1077 (Ind. Tax Ct. 2001).
The Department also argues that this Court should vacate its original
judgment, deny the Departments motion to dismiss, direct the Department to answer Jack
Grays petition, and set a management schedule for discovery and dispositive motions.
(Respt Pet. for Rehg at 3, 9.) This Court denies this part
of the Departments petition for rehearing.
Footnote: To the extent that the Department may not be able to
locate the necessary documents in its own files that show the all petitioners
met the jurisdictional requirements, the Department should first request the documents from the
individual petitioner before filing a motion to dismiss that petitioner.