Appeal from the Circuit Court of Kane County; the Hon. John A.
Krause, Judge, presiding.
JUSTICE HOPF DELIVERED THE OPINION OF THE COURT:
Plaintiff, Collins Oil Company, brought an action for administrative review of an Illinois Department of Revenue (the Department) final assessment that determined plaintiff's liability for unpaid taxes. In seeking review, plaintiff sought to have a lien imposed in lieu of posting a bond, as authorized by section 12 of the Retailers' Occupation Tax Act (hereinafter the Act) (Ill. Rev. Stat. 1981, ch. 120, par. 451). The Kane County circuit court denied plaintiff's motion for a lien, dismissed its complaint and entered an order in favor of the Department. Plaintiff appeals.
Plaintiff, a wholesale and retail dealer in oil products, was charged with liability for nonpayment of retailers' occupation tax and municipal retailers' occupation tax for January 1, 1976, through August 31, 1978; regional transportation authority tax for December 1, 1977, through October 31, 1979; and motor fuel tax for January 1, 1976, through August 31, 1978. Plaintiff protested each of the notices of liability and requested a hearing with the Department. A hearing summary, prepared by the hearing referee, noted that the Department had presented a prima facie case through the testimony of the auditor and admission of the auditor's work papers. The auditor testified that the taxpayer (plaintiff, president of corporation) refused to allow his books and records to be examined and would not cooperate in preparing the audit. The audit was based on Federal tax returns and State sales tax returns that had been filed by plaintiff. Resale, exemptions and loss due to spillage deductions were disallowed, but the auditor testified on cross-examination that they would have been allowed if the taxpayer had provided evidence to support them.
The hearing referee repeatedly requested the taxpayer, through his counsel, to produce books and records in order to clarify the record. Counsel gave no indication he intended to produce any records. The referee held that the Department's prima facie case was not overcome by the taxpayer, and the taxpayer's protest was denied. The assessment was made final. In February of 1982 a final assessment showed a liability of $1,231,432 for plaintiff with interest continuing to accrue.
On March 12, 1982, plaintiff filed its complaint for administrative review, challenging the final assessment. Thereafter, on April 2, 1982, plaintiff filed a motion seeking imposition of a lien in lieu of the bond required by section 12 of the Act (Ill. Rev. Stat. 1981, ch. 120, par. 451). Section 12 requires that a suit for administrative review be dismissed, on motion of the Department, unless the person filing such suit posts a bond, or unless the court enters an order imposing a lien on the taxpayer's property. Plaintiff in the case at bar did not file a bond and sought to have a lien imposed in lieu of the bond.
A hearing was held and plaintiff was directed to furnish financial information about its assets. The hearing was continued. Plaintiff provided a four-page unverified financial statement. This statement indicated that plaintiff's assets were less than its tax liability. At the renewed hearing the Department argued it would not be protected by a lien on plaintiff's assets. After argument, the court denied plaintiff's motion for imposition of a lien in lieu of a bond, and stated that plaintiff's complaint was dismissed for failure to comply with section 12 of the Act. Judgment was entered against plaintiff in the amount of the final assessment, plus interest.
Plaintiff filed a motion for rehearing, urging "the court may have failed to consider the constitutional issues inherent in its ruling" in denying the requested lien. The motion also urged that it was not necessary that plaintiff furnish "full and complete inventories" of its property in order for the Department's liens to be effective because the liens would have been effective upon entry of the court's order. Plaintiff's motion for rehearing was denied.
Prior to considering the issues raised by plaintiff on appeal, we will address a point raised by the Department which urges that plaintiff failed to file his motion regarding the bond within the required 20-day limit. Although the Department did not raise this issue before the trial court, it is now urged that the trial court should be affirmed because of plaintiff's failure to make a timely motion regarding the bond.
Section 12 of the Act provides that any suit filed for administrative review shall be dismissed on motion of the Department, unless the petitioner, within 20 days after filing the complaint, files a bond with good and sufficient surety, or unless the court enters an order imposing a lien on petitioner's property. In the instant case plaintiff filed its complaint for administrative review on March 12, 1982, and filed its motion for a lien in lieu of bond 21 days later, on April 2, 1982. Thus, plaintiff's motion was one day late. The Department contends that plaintiff's failure to meet this time requirement allows this court to affirm the trial court findings, despite the fact the argument was not presented to the trial court. The Department urges that, unlike the appellant, the appellee may raise any point in support of the judgment on appeal, even though not directly ruled on by the trial court, so long as the factual basis for the point was before the court below. Shaw v. Lorenz (1969), 42 Ill.2d 246, 248, 246 N.E.2d 285, 287.
• 1 We believe the Department has waived this issue for purposes of appeal. It has been held that the failure to file an appeal bond under section 12 is not jurisdictional in character, though it is mandatory. In Glasco Electric Co. v. Department of Revenue (1981), 86 Ill.2d 346, 350, 427 N.E.2d 90, the supreme court found that the Department had waived the 20-day requirement where the Department agreed to allow the taxpayer to file the bond late and thereafter filed an answer to the complaint. In Glasco, as in the case at bar, the Department filed its answer and failed to raise the 20-day limit as an issue. Because the instant case parallels the circumstances described in Glasco, we believe the Department waived this issue both below and on appeal. (See also City National Bank & Trust Co. v. Illinois Property Tax Appeal Board (1982), 108 Ill. App.3d 979, 439 N.E.2d 1301, where the court analogized from Glasco and held that a 35-day issuance of summons requirement should be liberally construed; Bee Jay's Truck Stop, Inc. v. Department of Revenue (1977), 52 Ill. App.3d 90, 93, 367 N.E.2d 173, 176, where the court gave a liberal construction to 20-day rule of section 12.) For these reasons the Department's contention that plaintiff's motion was untimely must fail.
The Department also contends plaintiff failed to preserve for review the issue of the constitutionality of section 12 of the Act. At trial, plaintiff made only very slight reference to the question of the constitutionality of section 12. Further, in its petition for rehearing, plaintiff made only a vague reference to the constitutional issues it now raises on appeal. The petition stated that the court "may have failed to consider the constitutional issues inherent in its ruling." Further, we note that plaintiff's motion for lien in lieu of bond made no reference to constitutional issues.
• 2, 3 Plaintiff contends on appeal that the trial court violated its constitutional rights of equal protection and due process. Plaintiff's contention is that the denial of its motion for lien in lieu of a bond deprived it of its constitutional right to have judicial review of the assessment of tax liability imposed by the administrative body. Plaintiff did contend, in its motion for rehearing, that there were "questions of whether or not there would be violations of both the Illinois and United States Constitutions on questions of equal protection." Though the courts> prefer that objections to the constitutionality of a statute be "specific and complete" (Biggs v. Cummins (1955), 5 Ill.2d 512, 516, 126 N.E.2d 208), the scope of our review is not confined solely to the issues preserved for review. Supreme Court Rule 366 (87 Ill.2d R. 366) is analogous to the plain error doctrine in criminal cases, and gives this court the discretion to review orders and grant relief "that the case may require." (87 Ill.2d R. 366(a)(5).) (Schutzenhofer v. Granite City Steel Co. (1982), 93 Ill.2d 208, 211, 443 N.E.2d 563, 564.) Therefore, despite the apparent waiver of the constitutional issues, we will consider them on appeal.
Turning to the merits of the case, plaintiff contends that the trial court's interpretation of section 12 of the Act (Ill. Rev. Stat. 1981, ch. 120, par. 451) deprived plaintiff of due process and equal protection in that it was denied access to judicial review under the Administrative Review Act. The contention is that by refusing to allow a lien in lieu of bond the court dismissed plaintiff's complaint and left it in the position of an indigent party unable to seek redress of an "incorrect" finding of tax liability.
Plaintiff contends that the legislature never intended section 12 to be used by the court to determine whether the taxpayer has sufficient assets to pay the tax. It contends that the legislature only intended to indicate that the court had authority to impose a lien on taxpayers' assets, and protect the Department's interests in that manner. Plaintiff contends that the trial court abused its discretion in this regard. ...