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Bobber Auto Truck Plaza v. Dep't of Rev.





Appeal from the Circuit Court of Effingham County; the Hon. Edward C. Eberspacher, Judge, presiding.


Plaintiff taxpayer Bobber Auto Truck Plaza (Bobber) commenced this action by filing a complaint for administrative review from a decision of the Illinois Department of Revenue (Department) denying Bobber's claim for credit for overpayment of retailers' occupation tax and municipal retailers' occupation tax from 1978 through 1981. The circuit court of Effingham County reversed the decision of the Department, which appeals. We affirm.

The facts are as follows: Bobber is a full-service truck stop, which includes a restaurant and motel, a store, and vehicle maintenance and fuel sales. It is located at the intersection of interstates 57 and 70 in Effingham. Bobber's present owners purchased it in November of 1978. The accounting firm of Clapper, Kitchenmaster & Co. of Mankato, Minnesota, had been the owners' accountant for about 20 years but had no prior experience calculating taxes with respect to motor fuel sales in Illinois. In April of 1981 Clapper, Kitchenmaster & Co. became aware that it had been paying retailers' occupation tax and municipal retailers' occupation tax on amounts which included Federal excise tax. Clapper, Kitchenmaster & Co. immediately corrected its method of tax calculation and applied to the Department for credit of $19,009.09 in retailers' occupation tax and $4,849.15 in municipal retailers' occupation tax overpaid by Bobber during the period in question.

The Department issued notice of its tentative determination denying Bobber's claim, stating Bobber had not definitely established the tax was paid in error or that the issuance of a credit memorandum would not result in unjust enrichment of Bobber. Bobber prevented the tentative determination from becoming final by requesting a hearing on its claim.

The accounting firm acted as Bobber's attorney at the hearing before the Department's referee. The two witnesses at the hearing were Keith Bishop, a revenue auditor for the Department, and Robert Kitchenmaster of Clapper, Kitchenmaster & Co. Mr. Bishop testified that during the entire period in question Bobber posted signs on its fuel pumps indicating that all applicable taxes were included in the pump price. According to Mr. Bishop, the Department permitted taxpayers to show the collection of taxes in two ways. The first was to charge for it as a separate item. The second, for those taxpayers such as motor fuel vendors who do not normally issue invoices for each transaction, was to post a sign stating that the pump price included retailers' occupation tax and municipal retailers' occupation tax. Mr. Bishop testified that customers were entitled to request that Bobber supply a statement showing actual price and tax; he had no knowledge that any had done so.

Mr. Kitchenmaster testified that the accounting firm did not recognize the tax calculation problem until 1981, when it immediately changed its calculation procedure. According to Mr. Kitchenmaster, the change in 1981 was solely one of accounting, and "there is absolutely no changes that occurred whatsoever in the operation in anything that was done."

The hearing officer concluded that Bobber "intended" to collect the excess tax and had not refunded the excess amounts to its motor fuel customers, thus precluding a refund or credit of the claimed amounts by the Department.

The circuit court of Effingham County reversed in a written opinion in which the court took judicial notice ("in lieu of remanding the case pursuant to Ill. Rev. Stat., ch. 110, par. 3-111 for the purpose of taking additional evidence when from the state of the administrative record and upon the briefs and arguments herein such action would be just") that Bobber was one of several highly competitive fuel vendors located at the intersection of the two interstates, and that the price of fuel in that area changed daily based on the competition. The court concluded that since Bobber's prices were competitive with other fuel prices in that area, every penny of taxes paid in error reduced Bobber's profit margin compared to the other merchants, with the result that Bobber bore the economic burden of the excess tax. The circuit court ordered the allowance of Bobber's claim for credit with interest. The Department appeals.

• 1 No matter how valid the taxpayer's claim, taxes voluntarily paid cannot be recovered absent a statute authorizing credit or refund. (Jones v. Department of Revenue (1978), 60 Ill. App.3d 886, 889, 377 N.E.2d 202, 204.) There was in force at pertinent times a statute which provides in part:

"If it appears, after claim therefor filed with the Department, that an amount of tax or penalty or interest has been paid which was not due under this Act, whether as the result of a mistake of fact or an error of law, except as hereinafter provided, then the Department shall issue a credit memorandum or refund to the person who made the erroneous payment * * *.

No credit may be allowed or refund made for any amount paid by or collected from any claimant unless it appears (a) that the claimant bore the burden of such amount and has not been relieved thereof nor reimbursed therefor and has not shifted such burden directly or indirectly through inclusion of such amount in the price of the tangible personal property sold by him or in any manner whatsoever; * * * or (b) that he or his legal representative has repaid unconditionally such amount to his vendee * * *." (Ill. Rev. Stat. 1983, ch. 120, par. 445.)

The Department argues that Bobber did not prove that it bore the burden of the excess tax so as to entitle Bobber to refund or credit per the above statute. As a preliminary matter, the Department contends the circuit court erred in considering matters not presented before the hearing referee or included in the record.

• 2, 3 Section 3-110 of the Administrative Review Law states that no new or additional evidence in support of or in opposition to any finding, order, determination or decision of the administrative agency shall be heard by the court, and that the findings and conclusions of the agency on questions of fact shall be held prima facie true and correct. (Ill. Rev. Stat. 1985, ch. 110, par. 3-110.) This does not mean that the court may not take judicial notice of facts in administrative review cases. Judges are not presumed to be more ignorant than other people regarding matters of common knowledge. (Theo. B. Robertson Products Co. v. Nudelman (1945), 389 Ill. 281, 286, 59 N.E.2d 655, 657.) They ought to know at least what everyone else knows. (Wheeler v. Aetna Casualty & Surety Co. (1973), 11 Ill. App.3d 841, 849, 298 N.E.2d 329, 338, vacated as moot (1974), 57 Ill.2d 184, 311 N.E.2d 134.) Judicial notice may be taken of factual evidence where the facts are capable of immediate and accurate demonstration by resort to easily accessible sources of indisputable accuracy. (Vulcan Materials Co. v. Bee Construction Co. (1983), 96 Ill.2d 159, 166, 449 N.E.2d 812, 815.) The circuit judge sitting in this case in Effingham County doubtlessly had knowledge of the major intersection in question. We do not doubt that motor fuel pricing at that location is competitive. However, price differences between fuel vendors are not uncommon. We have no reason to believe that the judge could remember fuel prices of Bobber and other area vendors between 1978 and 1981 when this case was before the circuit court in 1984 and 1985, nor have we means to verify such facts. We believe those prices were not a proper subject of judicial notice in the case at bar. This conclusion does not require reversal, since the judgment may be sustained regardless of whether the specific reasons assigned are correct. Illinois Bell Telephone Co. v. Illinois Commerce Com. (1953), 414 Ill. 275, 283, 111 N.E.2d 329, 334.

We believe the circuit court's alternative suggestion, remanding the case for the taking of evidence on the matter of fuel prices from 1978 through 1981, would have been more proper and more just than judicially noticing facts that should have been proved. Remand for that purpose is specifically authorized by section 3-111(7) of the Administrative Review Law. (Ill. Rev. Stat. 1983, ch. 110, par. 3-111(7).) This court ...

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