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Virk v. Mississippi Department of Revenue

Supreme Court of Mississippi

March 6, 2014

KARMJIT S. VIRK d/b/a GAS PLUS
v.
MISSISSIPPI DEPARTMENT OF REVENUE

DATE OF JUDGMENT: 12/12/2012

COUNTY CHANCERY COURT HON. PATRICIA D. WISE HINDS

ATTORNEY FOR APPELLANT: JAMES G. McGEE, JR.

ATTORNEYS FOR APPELLEE: JON F. CARMER, JR., JAMES L. POWELL

BEFORE DICKINSON, P.J., LAMAR AND CHANDLER, JJ.

LAMAR, JUSTICE

¶1. Karmjit Virk appealed an increase in his tax liability to the Mississippi Department of Revenue's Board of Review. When Virk failed to appear at his Board of Review hearing, his appeal was involuntarily withdrawn. Virk's appeals to the Board of Tax Appeals and the Hinds County Chancery Court both were dismissed. Finding no error, we affirm the decisions of the Board of Review, the Board of Tax Appeals, and the Hinds County Chancery Court.

FACTS AND PROCEDURAL HISTORY

¶2. The Mississippi Department of Revenue (MDOR) "is the primary agency for collecting tax revenues that support state and local governments in Mississippi."[1] In 2010, MDOR audited Karmjit Virk (Virk) and assessed him $8, 679 in individual income taxes for 2008 and 2009, and $67, 933 in sales taxes for August 1, 2007, through December 31, 2010.[2]Two weeks after the assessments were issued, Virk notified MDOR that he was represented by his certified public accountant, Michael Mahoney.[3]

¶3. Virk timely appealed the assessments, and his hearing before the Board of Review was scheduled for October 13, 2011.[4], [5] MDOR informed Mahoney of the hearing date by letter dated August 18, 2011.[6] Between August 18, 2011, and October 7, 2011, the parties made no attempt to communicate with each other. On October 7, 2011, Latasha Holt, a MDOR employee, called Mahoney to remind him of Virk's hearing, and Mahoney informed her that he no longer represented Virk. Holt then called Virk directly. Virk claims that, during this phone call, he asked for his hearing date to be postponed, and that Holt denied his request.[7]

¶4. Virk did not attend his hearing on October 13, 2011, nor did he submit his position to the Board of Review "in writing or by electronic transmission." The Board of Review found that he had withdrawn his appeal involuntarily and noted this finding in its minutes.[8]Virk was informed by letter dated January 12, 2012.[9] Three months later, Virk appealed to the Board of Tax Appeals. MDOR responded by filing a motion to dismiss, alleging that "[Virk's] appeal was properly treated as involuntarily withdrawn . . . and that the assessmentst that are the basis of the appeal are final and not subject to further review." The Board of Tax Appeals agreed with MDOR and issued an order granting MDOR's motion to dismiss.

¶5. Virk appealed the Board of Tax Appeals order to the Hinds County Chancery Court, arguing that "the Board of Review's decision to not grant a continuance and its subsequent involuntary withdrawal of his appeal was arbitrary and capricious . . . [and that] the Board of Tax Appeals ['] decision to dismiss his appeal was improper." MDOR countered that the chancery court did not have jurisdiction to hear the appeal because Virk had failed to provide the required surety bond, and the chancery court was statutorily prohibited by Section 27-77-5(8) of the Mississippi Code from reviewing an involuntarily withdrawn appeal. The chancery court held a hearing on December 4, 2012, that focused on whether Virk had to comply with the surety-bond requirement. On December 12, 2012, the chancery court granted MDOR's motion to dismiss, finding that "[Section 27-77-5(8)] is clear. If a tax assessment is involuntarily or voluntarily withdrawn, there shall be no further review of that tax assessment."[10] Virk timely appealed to this Court, challenging the chancery court's tax assessment."[11] Virk timely appealed to this Court, challenging the chancery court's interpretation of Section 27-77-5 of the Mississippi Code.

STANDARD OF REVIEW

¶6. Judicial review of an administrative agency's decision is limited.[12] Typically, "trial courts and appellate courts will reverse the decision of an administrative agency only if the decision (1) was unsupported by substantial evidence; (2) was arbitrary and capricious; (3) was beyond the power of the administrative agency to make; or (4) violated the complaining party's statutory or constitutional right."[13] However, an agency's interpretation of a governing statute is subject to de novo review as "[t]he ultimate authority and responsibility to interpret the law, including statutes, rests with this Court."[14] ...


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