ATTORNEYS FOR PETITIONER: ATTORNEYS FOR RESPONDENTS:
ROBERT W. HAMMERLE STEVE CARTER
JOSEPH M. CLEARY ATTORNEY GENERAL OF INDIANA
HAMMERLE, FOSTER, ALLEN Indianapolis, IN
Indianapolis, IN DAVID A. ARTHUR
DEPUTY ATTORNEY GENERAL
INDIANA TAX COURT
DANTE ADAMS, )
v. ) Cause No. 49T10-9904-TA-24
STATE OF INDIANA, INDIANA )
DEPARTMENT OF REVENUE, )
ON APPEAL FROM A FINAL DETERMINATION OF
THE INDIANA DEPARTMENT OF STATE REVENUE
NOT FOR PUBLICATION
November 8, 2004
Dante Adams (Adams) appeals the final determination of the Indiana Department of State
Revenue (Department) assessing him with controlled substance excise tax (CSET). The issues
for the Court to decide are: (1) whether Adams right to be
free from double jeopardy was violated; (2) whether the CSET statutory procedures are
constitutional; and, (3) whether the Department followed statutory procedures in assessing Adams with
FACTS AND PROCEDURAL HISTORY
On August 13, 1997, Adams was arrested and charged with dealing and possessing
cocaine; Class A and Class C felonies, respectively. On March 23, 1998,
the Department assessed Adams with CSET (and penalties) in the amount of $159,096.00
and demanded immediate payment. On March 24, 1998, Adams criminal charges were
dismissed after a trial court determined that the cocaine was found pursuant to
an illegally obtained search warrant. (See Stip. of Facts at J. Ex.
9.) On March 31, 1998, when Adams still had not paid the
CSET, the Department issued a warrant to collect the tax.
On April 9, 1998, Adams protested the Departments CSET assessment. After conducting
a hearing, the Department issued a Letter of Findings denying Adams protest.
Adams initiated an original tax appeal on April 5, 1999. The Court
conducted a trial on November 10, 1999, and heard the parties oral arguments
on March 1, 2000.
This Court issued an opinion on June 5,
2000, reversing the Departments CSET assessment, holding that the Department could not base
its CSET assessment on judicially determined illegally seized evidence.See footnote
Adams v. Indiana
Dep't of State Revenue, 730 N.E.2d 840, 843 (Ind. Tax Ct. 2000) (footnote
added). On February 8, 2002, the Indiana Supreme Court reversed this Courts
decision, holding that because the exclusionary rule did not apply to the CSET,
the Departments CSET assessment
(based on the illegally seized cocaine) was valid. See State, Indiana Dept
of State Revenue v. Adams, 762 N.E.2d 728 (Ind. 2002), cert. denied, 537
U.S. 1030 (2002). Adams now returns to this Court, on remand from
the Supreme Court, for resolution of his remaining claims. ANALYSIS AND OPINION
Standard of Review
This Court reviews the Departments final determinations de novo. Ind. Code Ann.
§ 6-8.1-5-1(h) (West Supp. 2004). Therefore, the Court is not bound by
either the evidence presented or the issues raised at the administrative level.
Snyder v. Indiana Dep't of State Revenue, 723 N.E.2d 487, 488 (Ind. Tax
Ct. 2000), review denied.
(1) Double Jeopardy
Adams first claims that his right to be free from double jeopardy
was violated when the Department assessed him with CSET. Specifically, Adams argues
that because he was facing criminal charges at the time of the Departments
assessment, and those criminal charges were resolved with finality, the Departments actions violate,
at least in spirit, the protections of the Indiana Constitutions prohibition against double
jeopardy. (Petr Br. at 8.) The Department claims that because no
jeopardy attached in the criminal proceedings, Adams cannot claim that he was twice
placed in jeopardy. The Department is correct.
The Double Jeopardy Clause of Indianas Constitution states that [n]o person shall be
put in jeopardy twice for the same offense. Ind. Const. art. I,
§ 14. The key word is twice in this case, jeopardy
first attached on March 23, 1998, when the Department assessed Adams with CSET.
See Ford v. Indiana Dep't of State Revenue, 779 N.E.2d 1274, 1276
(Ind. Tax Ct. 2002) (because CSET itself is a judgment, jeopardy attaches when
the Department serves a person with an assessment notice and demand). The
criminal charges were later dismissed; accordingly, Adams was never placed in jeopardy a
second time. See Clifft v. Indiana Dep't of State Revenue, 660 N.E.2d
310, 313 (Ind. 1995) (stating that when [t]he State assessed the CSET against
[the taxpayer], but did not follow that assessment with any criminal action[,] [the
taxpayer] cannot be said to have twice been placed in jeopardy). See
also Bryant v. State, 660 N.E.2d 290, 299 (Ind. 1995) (stating that [w]here
a risk of a determination of guilt exists . . . jeopardy attaches),
cert denied, 519 U.S. 926 (1996).
(2) Adams Statutory Claims
Indiana imposes the CSET on controlled substances that are: (1) delivered; (2) possessed;
or (3) manufactured; in Indiana in violation of IC 35-48-4 or 21 U.S.C.
841 through 21 U.S.C. 852.
Ind. Code Ann. § 6-7-3-5 (West 2004)
(footnote added). Furthermore, because [a]n assessment for the [CSET] due . .
. is considered a jeopardy assessment[, t]he department shall demand immediate payment and
take action to collect the tax due as provided by IC 6-8.1-5-3.
Ind. Code Ann. § 6-7-3-13 (West 2004).
If payment of CSET liability is not made immediately upon demand, Indiana Code
§ 6-8.1-5-3 provides that the Department may issue or request the state police
department to serve a jeopardy tax warrant against the person [owing the tax]
and, either without or with the assistance of the sheriffs of any counties
in the state, may levy on and sell the persons property which is
located in those counties. Ind. Code Ann. § 6-8.1-5-3 (West Supp. 2004).
a. Due Process
Adams claims that these CSET procedures violate his due process and due course
of law rights
See footnote because it imposes an automatic jeopardy assessment. Adams contends
that because the CSET statute imposes a jeopardy assessment
per se, [t]his finding
of jeopardy is arbitrarily made by a criminal investigator of the [Department] without
a probable cause determination by a judicial officer or due process afforded the
taxpayer. Thereafter, the taxpayers property is seized and sold without notice.
(Petr Br. at 9.)
As the Department correctly points out, this Court rejected a similar argument in
1994. Indeed, this Court explained:
The moment a person receives a jeopardy assessment with its concomitant payment demand,
and before a tax warrant is issued and collection efforts begin, the person
assessed has the ability to seek injunctive relief from this court. This
procedure allows for review in a meaningful time and a meaningful manner before
a court of competent jurisdiction and satisfies due process.
Clifft v. Indiana Dep't of State Revenue, 641 N.E.2d 682, 691 (Ind. Tax
Ct. 1994), revd on other grounds, 660 N.E.2d 310 (Ind. 1995). Consequently,
the Court declines Adams invitation to revisit the issue.
b. Statutory Compliance
Indiana Code § 6-7-3-19 provides that the Department may not commence CSET collection
proceedings unless it is notified in writing by the prosecuting attorney of the
jurisdiction where the offense occurred that the prosecuting attorney does not intend to
pursue criminal charges of delivery, possession, or manufacture of the controlled substance that
may be subject to the [CSET]. Ind. Code Ann. § 6-7-3-19(2) (West
2004). Adams claims that the Department did not comply with this statute
because it assessed Adams with a CSET liability prior to receiving notification from
the prosecuting attorney that no criminal charges for the possession of cocaine would
be pursued. The Department claims, however, that it complied with the statute
because it did not issue the tax warrant against Adams until March 31,
1998, five days after it received notification from the prosecutors office that criminal
charges were dropped. The Department is correct.
The foremost goal of statutory construction is to determine and give effect to
the true intent of the legislature. Caylor-Nickel Clinic, P.C. v. Indiana Dep't
of State Revenue, 569 N.E.2d 765, 768 (Ind. Tax. Ct. 1991) (citations omitted),
affd, 587 N.E.2d 1311 (Ind. 1992). To determine the legislatures intent, the
words of a statute must be read in their plain, ordinary, and usual
sense. Id. Furthermore, the Court will read the statute as a
whole, and not sections or parts of it piecemeal. Roehl Transp., Inc.
v. Indiana Dep't of State Revenue, 653 N.E.2d 539, 542 (Ind. Tax Ct.
1995) (citation omitted).
Under the CSETs statutory framework, Adams became liable for the CSET when he
took possession of cocaine. On March 23, 1998, when the Department discovered
that Adams was in possession of cocaine and had not paid the CSET,
it issued an assessment and demand notice for payment of the CSET.
(See Stip. of Facts at J. Ex. 8.) It was only after
Adams failed to remit payment to the Department, and after the prosecutors office
notified the Department that it would not be pursuing criminal charges, that the
Department commenced collection proceedings by filing a warrant for collection of tax pursuant
to Indiana Code § 6-8.1-5-3. (See Stip. of Facts at J. Ex.
12.) Therefore, until March 31, 1998, when the jeopardy tax warrant was
filed, Adams was free to pay the CSET and avoid action to collect
the liability by the Department. Thus, the Court concludes that the Department
followed the statutory procedures for imposing and collecting the CSET.
For the aforementioned reasons, the Court AFFIRMS the final determination of the Department.
As a result of the warrant, local authorities levied on Adams personal
property and applied $28,314.17 against his CSET liability. (
See Stip. of Facts
at J. Ex. 17.)
In Adams initial appeal to this Court, he raised
inter alia, the
issue of whether the exclusionary rule applies to CSET. The exclusionary rule
is a judicially created remedy that acts to deter illegal searches and seizures
by excluding illegally obtained evidence in criminal proceedings.
A taxpayers CSET liability is due when the person receives delivery of,
takes possession of, or manufactures a controlled substance in violation of IC 35-48-4
or 21 U.S.C. 841 through 21 U.S.C. 852.
Ind. Code Ann. §
6-7-3-8 (West 2004).
The Fourteenth Amendment of the U.S. Constitution provides that [n]o State shall
. . . deprive any person of life, liberty, or property, without due
process of law[.] U.S. C
onst. amend. XIV. Indianas corresponding constitutional provision
states that every person, for injury done to him in his person, property,
or reputation, shall have remedy by due course of law. Ind. Const.
art. I, §12. Th[is] fundamental requirement of due process is the opportunity
to be heard at a meaningful time and in a meaningful manner.
Clifft v. Indiana Dep't of State Revenue, 660 N.E.2d 310, 318 (Ind. 1995)
(citations and internal quotations omitted).