                    IN THE SUPREME COURT OF MISSISSIPPI

                                NO. 2004-SA-02418-SCT

FREDDIE L. DAVIS AND JEANETTE DAVIS

v.

ATTORNEY GENERAL OF THE STATE OF
MISSISSIPPI AND EXECUTIVE DIRECTOR OF
THE DEPARTMENT OF FINANCE AND
ADMINISTRATION


DATE OF JUDGMENT:                         11/02/2004
TRIAL JUDGE:                              HON. STUART ROBINSON
COURT FROM WHICH APPEALED:                HINDS COUNTY CHANCERY COURT
ATTORNEYS FOR APPELLANTS:                 A.N. CASTILLA
                                          JOHN FLOYD FLETCHER
                                          CORY RANDLE LANCASTER
ATTORNEYS FOR APPELLEES:                  ASHLEY MAY
                                          ROMAINE LEVEAN RICHARDS
                                          GARY WOOD STRINGER
NATURE OF THE CASE:                       CIVIL - STATE BOARDS AND AGENCIES
DISPOSITION:                              AFFIRMED - 05/11/2006
MOTION FOR REHEARING FILED:
MANDATE ISSUED:

       BEFORE SMITH, C.J., CARLSON AND RANDOLPH, JJ.

       RANDOLPH, JUSTICE, FOR THE COURT:

¶1.    On June 1, 1999, the Mississippi State Tax Commission (“Tax Commission”) assessed

Freddie L. Davis and Jeanette Davis (“Appellants”) with additional income tax, penalties and

interest for the tax years 1990 through 1995. On April 4, 2000, in accord with Appellants’

request under Miss. Code Ann. Section 27-7-71(1), the Board of Review considered and

entered an Order substantially upholding the initial assessment. On July 12, 2000, pursuant
to Appellants’ request under Section 27-7-71(2), the Tax Commission considered and

substantially upheld the initial assessment by Order of August 2, 2000. On March 30, 2001,

Appellants received the Order and had thirty (30) days to pay the assessment or file a petition

and bond in the chancery court. On May 11, 2001, Appellants fully paid the assessment to

the Tax Commission with an accompanying letter stating they were not appealing its final

Order. Over two years later, on August 22, 2003, Appellants filed a refund claim with the

Department of Finance and Administration (“DFA”) under Section 27-73-1. On November

13, 2003, an Opinion of the Attorney General denied the refund request. On December 3,

2003, the DFA denied the refund request based on the Opinion of the Attorney General. On

February 19, 2004, Appellants filed a Complaint for Appeal and Review and/or Refund of

Erroneously Paid Taxes in the Chancery Court of the First Judicial District of Hinds County,

Mississippi. The chancery court thereafter granted summary judgment in favor of the

Attorney General of the State of Mississippi and the Executive Director of the Department

of Finance and Administration (“Appellees”), who had filed a Motion to Dismiss the

Complaint for Appeal and Review and/or Refund of Erroneously Paid Taxes filed by

Appellants. The disposition was in the form of an Order Granting Motion For Summary

Judgment on October 21, 2004. Thereafter, Appellants filed notice of appeal seeking

reversal of the chancery court’s judgment.




                                              2
                                          FACTS

¶2.    On June 1, 1999, the Tax Commission assessed Appellants with additional income

tax, penalties and interest totaling $160,722.00 for the tax years 1990 through 1995.1 On

April 4, 2000, pursuant to the Appellants request under Miss. Code Ann. Section 27-7-71(1),

the Board of Review held a hearing and issued an Order substantially upholding the initial

assessment.2 From that Order, and pursuant to the Appellants request under Section 27-7-

71(2), the Tax Commission held a hearing on July 12, 2000. On August 2, 2000, the Tax

Commission issued an Order substantially upholding the initial assessment.3 Additionally,

the Tax Commission ordered the assessment be paid, or a petition and bond be filed in the

chancery court, within thirty (30) days of receipt of the Order by the Appellants. On March

30, 2001, the Appellants received the Order of the Tax Commission, without explanation by

either party for the delay. Appellants failed to secure the appeal bond required by Miss. Code

Ann. Section 27-7-73.4 On May 11, 2001, the Appellants submitted full payment for the

assessment. Along with their payment, Appellants presented a letter to the Tax Commission

stating that they were not appealing its final Order.


       1
      The additional income tax, penalties and interest chiefly related to Mr. Davis’s
employment at Cook Funeral Home in Jackson, Mississippi.
       2
      The Board of Review found additional income tax, penalties and interest in the
amount of $166,396.00.
       3
      The Tax Commission found additional income tax, penalties and interest in the
amount of $173,751.00.
       4
        Appellants assert financial inability as the reason for failure. However, Appellees
contend that the only argument raised by Appellants prior to this appeal was a time
constraint.

                                              3
¶3.    Over two years later, on August 22, 2003, the Appellants filed a refund claim with the

DFA pursuant to the procedures outlined in Miss. Code Ann. Section 27-73-1. That refund

claim was rejected by the DFA on August 22, 2003, but their recommendation was not

passed on to the Attorney General for review, as required by Section 27-73-1. On September

13, 2003, the Appellants requested compliance with Section 27-73-1 by the DFA. Soon

thereafter, the DFA recommendation was forwarded to the Attorney General. On November

13, 2003, an Opinion of the Attorney General was issued recommending denial of the refund

request. The Attorney General found that a claim for refund under Section 27-73-1 was

barred once the administrative appeals processes of Section 27-7-71 and Section 27-7-73

were utilized by a taxpayer.5 Under Section 27-7-73, the Appellants had thirty (30) days

from receipt of the Tax Commission Order to appeal to the chancery court. Because the

Appellants did not perfect such an appeal, the Attorney General determined that “let[ting]

the Davis’ now bring a refund action after completing the hearing process of § 27-7-71

would deprive § 27-7-73 of any operative force.” Therefore, the Attorney General found that

res judicata applied to the administrative determination.6 On December 3, 2003, the DFA

again denied Appellants refund request based on the Opinion of the Attorney General.




       5
        “§ 27-73-1 may have been an alternative and supplemental method of contesting the
assessments when they were initially made under § 27-7-49, but once the Davis’ elected to
challenge the assessment under the administrative process set out in § 27-7-71 and § 27-7-
73, the Davis’ are bound by the final results of the administrative process.” (Emphasis
added).
      6
       Citing Hood v. Dept. of Wildlife Conservation, 571 So. 2d 263 (Miss. 1990); City
of Jackson v. Holliday, 246 Miss. 412, 149 So. 2d 525 (Miss. 1963).

                                             4
¶4.    On February 19, 2004, and within six months of the Attorney General’s

determination,7 the Appellants filed a Complaint for Appeal and Review and/or Refund of

Erroneously Paid Taxes in the Chancery Court of the First Judicial District of Hinds County,

Mississippi. On March 22, 2004, the Appellees filed a Motion to Dismiss arguing that

“[t]here is no statutory authority for this action by Plaintiffs where the taxpayers did not file

an appeal under § 27-7-73 but paid the income tax as affirmed by the Commission then sued

the Defendants ... for a money judgment in the amount of the income tax paid.” In other

words, a paid income tax assessment where the taxpayer does not appeal the Commission’s

determination that the taxes are due does not fit within Section 27-73-1. Because the

Appellant’s Complaint was not filed within thirty (30) days with the required bond,

Appellees asserted the Complaint was barred as untimely. 8           Assuming arguendo that

Appellants could bring their action under Section 27-73-1, Appellees contend that such an

action would be untimely and barred under the applicable statute of limitations in Miss. Code

Ann. Section 27-73-5.9 On April 27, 2004, Appellants filed their response to the Motion to

Dismiss asserting that the plain language of Section 27-73-1 establishes that the section


       7
           As required by Section 27-73-1(1).
       8
        “The Commission’s findings being final, are res judicata to any questions raised by
Plaintiffs as to the income tax assessment issued against Plaintiffs .... Plaintiffs are also
barred under the doctrine of collateral estoppel from raising the issues raised in this action,
being the same issues raised before the Commission and in regard to which the Commission
made findings which were not timely appealed and became final.”
       9
        Section 27-73-5 provides a three (3) year statute of limitations and, according to
Appellees, “it is clear that the returns in issue were filed more than three (3) years before the
filing of this action, and if not the returns, the assessments were issued more than three (3)
years before the present action.”

                                                5
applies to payment “through error or otherwise ... [of] any tax in excess of the sum properly

due ... [if] such erroneous payment or overpayment has been paid into the proper treasury,” 10

and is an “additional and supplemental method” 11 for refunding overpaid, or erroneously

paid, taxes. Moreover, as the Commission’s tax assessment was not rendered until June 1,

1999, Appellants argued it would be patently unfair to impose Section 27-73-5 because that

statute of limitations would have expired prior to the assessment itself.12

¶5.    On October 19, 2004, the chancellor issued an Order Granting Motion For Summary

Judgment. The chancellor determined that the Appellants were not entitled to judicial review

because they had failed to seek review within thirty (30) days of the Tax Commission’s

Order, as required by Section 27-7-73. That failure to appeal rendered the Tax Commission’s

Order final and unreviewable under the doctrines of res judicata and collateral estoppel.13

Because the taxes were affirmed by the final Order of the Tax Commission, the chancellor


       10
        Section 27-73-1(1). See also State ex rel. Rice v. Mississippi Institute of
Aeronautics, 198 Miss. 288, 22 So. 2d 372 (1945) (regarding a refund of income taxes
pursuant to § 27-73-1); Barnett v. United States Casualty Co., 197 Miss. 873, 21 So. 2d 5
(1945).
       11
            Section 27-73-1(2).
       12
         “If applying § 27-73-5 in this regard, Plaintiffs would have been required to file a
claim of refund under § 27-73-1 before the Commission assessed them for the 1990-1995
taxable years.” Moreover, Appellants argued that under Section 27-73-1, a Plaintiff may file
in chancery court his petition for appeal and review within six (6) months of a disapproved
request for refund from the Attorney General. As the Attorney General disapproved their
refund request on November 13, 2003, and the Appellants filed their Complaint on February
19, 2004, they were well within that six month requirement.
       13
        Citing Smith v. University of Mississippi, 797 So. 2d 956, 963 (Miss. 2001);
Zimmerman v. Three Rivers Planning and Development Dist., 747 So. 2d 853, 861 (Miss.
Ct. App. 1999).

                                              6
found he was “without authority to review the findings of [the Tax Commission] or to find

the assessment to be erroneous.” Therefore, the chancellor concluded there were no genuine

issues of material fact, and his final judgment was filed on November 3, 2004. From that

judgment, Appellants filed their notice of appeal.

                                STANDARD OF REVIEW

¶6.    This Court reviews summary judgments de novo. See Hardy v. Brock, 826 So. 2d 71,

74 (Miss. 2002). The facts are to be viewed in the light most favorable to the non-moving

party. Id. “If [the appellate court’s] examination indicates that there is no genuine issue of

material fact, the moving party is entitled to judgment as a matter of law.” Id. (quoting

Robinson v. Singing River Hosp. Sys., 732 So. 2d 204, 207 (Miss. 1999)). The existence

of any genuine issue of material fact, however, precludes summary judgment. Id. In

reaching that conclusion, the non-moving party may not simply rest upon allegations or

denials in the pleadings but must set forth specific facts establishing the existence of genuine

issues. Id.

                                         ANALYSIS

¶7.    On appeal, the Appellants raise four issues:

       (1)Whether Appellants failed to exhaust all administrative remedies required
       by Miss. Code Ann. Section 27-7-71, which governs administrative appeals for
       taxpayers.
       (2)Whether the chancellor erred in concluding that the refund procedures set
       forth in Miss. Code Ann. Section 27-73-1 were not a viable alternative to the
       more commonly utilized judicial appeal procedures contained in Miss. Code
       Ann. Section 27-7-73.
       (3)Whether Miss. Code Ann. Section 27-7-73 is unconstitutional and whether
       the chancellor erred in relying exclusively on it as the legal basis for a ruling



                                               7
       that Appellants were barred from seeking a refund of overpaid taxes pursuant
       to Miss. Code Ann. Section 27-73-1.
       (4)Because the circumstances surrounding a letter written by Appellants
       remains unresolved and the Court failed to consider the financial condition of
       Appellants, whether genuine issues of material fact exist which should have
       precluded the chancellor’s grant of summary judgment.

This Court will analyze each issue in turn and, if any genuine issue of material fact exists,

will reverse and remand the final judgment of the chancellor.

       I.        Whether Appellants failed to exhaust all administrative remedies required
                 by Miss. Code Ann. Section 27-7-71.

¶8.    Our holding in Davis v. Barr, 250 Miss. 54, 157 So. 2d 505, 508 (1963), requires

individuals to “exhaust their administrative remedies before resorting to court.” With respect

to tax issues,

       failure on the part of one seeking an abatement of his tax assessment to invoke
       an available administrative remedy, or, if invoked, to pursue the possible
       administrative appeals to exhaustion, prevents entirely, or in some way limits,
       his obtaining any relief from the courts with respect to the amount or the
       legality of the challenged assessment.

Id. (quoting 51 Am. Jur., Section 769, p. 698). In Davis, the Appellants not only failed to

appeal to the State Tax Commission, but also neglected to post the required bond with their

petition in chancery court. Id. at 509 (the applicable statute was Section 9220-31, Code

1942, the predecessor to Section 27-7-73). This Court held that “the Tax Commission had

exclusive jurisdiction of the income tax assessment due by appellants, and before appellants

could invoke the aid of an equity court, it was necessary for them to have first proceeded by

the method and through the channel provided by law before the Tax Commission.” Id. at

510.



                                              8
¶9.    Appellants contend the chancellor erred in finding they had failed to fully exhaust all

administrative remedies. Appellants assert that they passed through all the administrative

steps required under Section 27-7-71.14 First, they initiated an appeal to the Tax Commission

Review Board within thirty (30) days of the contested action, as required by Section 27-7-

71(1). Unsatisfied with the Order of the Review Board, they initiated an appeal to the full

Tax Commission within thirty (30) days of the Review Board Order, as required by Section

27-7-71(2). They assert that following the full Tax Commission Order, all further appeals

(i.e. the utilization of Section 27-7-73) are judicial in nature. As such, they argue that they

exhausted all administrative remedies through their appeals initiated under Section 27-7-71.

¶10.   The plain language of Section 27-7-71 states:

       [a]ny tax deficiency, including any penalty and interest, determined by the state
       tax commission shall be paid within thirty days from the date of notification
       of the taxpayer, and if said sum is not paid within said thirty-day period, the
       state tax commission shall proceed to collect same under the provisions of
       Sections 27-7-55 to 27-7-67; provided within said thirty-day period the
       taxpayer may appeal from the decision of the state tax commission as
       hereinafter set out [in Section 27-7-73].

Miss. Code Ann. § 27-7-71 (emphasis added). Upon exhausting the remedies provided under

Section 27-7-71, an appeal to the chancery court must be perfected within thirty (30) days




       14
         Note that both Section 27-7-71 and Section 27-7-73 were repealed by Laws 2005,
Ch. 499, Section 36. That repeal, however, became effective on July 1, 2005 and was not
to be applied retroactively. See Laws 2005, Ch. 499, Section 37; Miss. Cent. R. Co. v. City
of Hattiesburg, 163 Miss. 311, 141 So. 897 (1932) (“Statutes will be given a prospective
operation unless a contrary intention is shown.”). This negates the argument of Appellants
that the repeal, along with Senate Bill 2742, 2005 Regular Session, Section 4(1) (which
effectively consolidates the alternative procedures of Sections 27-7-71, -73 and Section 27-
73-1 into one), bears any significance in the present action.

                                              9
of receipt of the Tax Commission findings, as outlined in Section 27-7-73.15 When the

Appellants accepted the Tax Commission determination and paid the tax, the Tax

Commission findings became final under Section 27-7-73. Appellants had the option, within

thirty (30) days of receiving notification of the Tax Commission determination, of paying the

tax or appealing under Section 27-7-73. Under Section 27-7-73, the Tax Commission

findings are “final” unless the taxpayer files a petition in chancery court “requesting a

hearing of the case on its merits” accompanied by a bond “in a sum double the amount in

controversy.”      Miss. Code Ann. § 27-7-73. Assuming arguendo that Appellants had

exhausted all administrative remedies available under Section 27-7-71, the chancellor’s

determination that the remedy provided by Section 27-7-73 was not utilized 16 remains

unaltered. Because Appellants affirmatively accepted the Tax Commission ruling and paid

the tax instead of appealing to the chancery court, this Court finds the Tax Commission

ruling became the final adjudication.




       15
            Section 27-7-73 provides:

       The findings of the state tax commission shall be final unless the taxpayer
       shall, within thirty days from the date of the receipt of notice of such findings,
       file a petition in the chancery court of the county in which the taxpayer is a
       resident or in which the taxpayer is domiciled. ... The petition shall be
       accompanied with a bond, to be approved by the clerk of said court, in a sum
       double the amount in controversy, conditioned to pay the judgment of the
       court. ... The chancery court shall have jurisdiction to hear and determine said
       cause or issue joined as in other cases.

Miss. Code Ann. § 27-7-73 (emphasis added).
       16
            In accord with the provisions of Section 27-7-71.

                                              10
       II.       Whether the chancellor erred in concluding the refund procedures in
                 Miss. Code Ann. Section 27-73-1 were not a viable alternative to the
                 appeal procedures contained in Miss. Code Ann. Section 27-7-73.

¶11.   Appellants contend the chancellor erroneously concluded that Section 27-73-1 was

not a viable alternative to Section 27-7-73. Section 27-7-73 permits a taxpayer to seek

judicial review of the Tax Commission’s Order without first paying the contested taxes, if

the taxpayer appeals within thirty (30) days of receiving the Tax Commission Order and

provides an appeal bond equal to two times the amount in controversy. Conversely, Section

27-73-1 is available when the taxpayer first pays the contested taxes, avoiding potential

penalties and interest if incorrect in his assertions, and then seeks administrative review for

a refund of taxes paid through error or otherwise if (and only if) such payment was in error

or an overpayment. Appellants argue that if Section 27-7-73 is the only available statutory

means for obtaining judicial review of the decisions of the Tax Commission, then it

unconstitutionally bars these and similarly situated taxpayers from having access to the courts

solely by virtue of the fact that their financial condition did not enable them to obtain and

post the appeal bond required by Section 27-7-73.

¶12.   Appellants rely on State ex rel. Rice, 22 So. 2d at 373, and Barnett, 21 So. 2d at 6,

to support the proposition that Section 27-73-1 17 applies to the refund of income taxes.18 This


       17
            In both cases, the predecessor statute to Section 27-73-1 was being invoked.
       18
          See Barnett, 21 So. 2d at 7 (“Save as to the particular taxes specially excepted, a
taxpayer may now pay to a tax collector, state or county, any tax demanded, thereby not
delaying its payment, and when, upon subsequent development or ascertainment, it is found
that as a matter of ultimate liability the tax, or the full amount, so collected is not rightfully
retained, and he is unable to obtain relief through the ordinary administrative channels, he
may resort to the positive provisions of [the predecessor to Section 27-73-1]. If this was not

                                               11
statute creates a right and not merely a remedy. See Miss. Cent. R. Co., 141 So. at 897.

Appellants assert that they had the option of either avoiding paying the contested tax by

posting an appeal bond within thirty (30) days of the Tax Commission’s determination under

Section 27-7-73 or paying the contested tax and seeking a refund under Section 27-73-1.19

As such, Appellants assert that because Section 27-7-73 was not the only statutory method

available, the Tax Commission’s Order would only become final and unreviewable upon the

expiration of the three-year statute of limitations applicable to Section 27-73-1.20

¶13.      Appellees counter that the Appellants knowingly paid the income tax assessment after

the Tax Commission Order affirmed the assessment. Moreover, Section 27-7-73 provides

that the Tax Commission findings are final unless the taxpayer, within thirty (30) days of

receipt of the Order, files a petition and bond in chancery court requesting a hearing on the

merits.        Because Appellants waited nearly thirty-four (34) months before filing their



the purpose of the enactment, it had as well not been passed at all.”) (Emphasis added).
However, the Opinion of the Attorney General distinguished these cases “because the claim
for refund arose from the overpayment of income taxes, paid with a filed return, not from
the payment of additional taxes due to audit and assessment.”
          19
         Section 27-73-1(2) states, “[t]his section shall not be construed as repealing or
modifying Section 27-73-7, or any other law providing for the application for or the
certification of a claim for refund, but shall be taken and construed as an additional and
supplemental method of refunding taxes erroneously paid.” Miss. Code Ann. § 27-73-1(2)
(emphasis added).
          20
         Section 27-73-5 provides that statute of limitations stating, “[a]ll suits by any
taxpayer for the recovery of any ... income ... tax, and all applications or proceedings for any
refund or credit of such taxes shall be filed or made within three years next after the return
was filed, or from the date of the assessment of the tax was made, or from the date the tax
was paid ... whichever is the earlier, and no recovery of taxes under any such suit shall be
had and no refund of taxes shall be made unless such suit or application was filed within
said period of limitation.” Miss. Code Ann. § 27-73-5 (emphasis added).

                                               12
Complaint, Appellees contend their suit is barred under the doctrines of res judicata and

collateral estoppel.

¶14.   “The doctrine of res judicata reflects the refusal of the law to tolerate a multiplicity

of litigation.” Little v. V&G Welding Supply, Inc., 704 So. 2d 1336, 1337 (Miss. 1997). See

also Holliday, 149 So. 2d at 527 (“The common law doctrine of res judicata, including ...

collateral estoppel, is designed to prevent relitigation by the same parties of the same claims

or issues.”). These judicial estoppel doctrines “ba[r] all issues that might have been (or could

have been) raised and decided in the initial suit, plus all issues that were actually decided in

the first cause of action.” Little, 704 So. 2d at 1337-38. See also Holliday, 149 So. 2d at 528

(“A judgment bars a subsequent application for the same purpose where the facts upon which

it is based are not changed and the conditions are substantially similar.”).

¶15.   “Under Mississippi law, res judicata or collateral estoppel precludes relitigation of

administrative decisions.” Smith, 797 So. 2d at 963 (involving a terminated state employee

who failed to appeal the dismissal decision of the Personnel Action Review Board to the

circuit court by writ of certiorari as mandated by Miss. Code Ann. Sections 11-51-93 and -

95). See also Zimmerman, 747 So. 2d at 861 (involving the failure of Appellant to file an

appeal of the Permit Board’s decision within twenty days after it was entered into the books

as mandated by Miss. Code Ann. Section 49-17-29). According to Zimmerman, “[o]nce an

agency decision is made and the decision remains unappealed beyond the time to appeal, it

is barred by administrative res judicata or collateral estoppel.” 747 So. 2d at 861 (citing

Hood, 571 So. 2d at 268). See also Miss. Empl. Sec. Comm’n v. Philadelphia Mun.



                                              13
Separate Sch. Dist. of Neshoba County, 437 So. 2d 388, 396 (Miss. 1983) (the doctrine of

collateral estoppel applies to administrative proceedings). In Hood, this Court found that

“[a]bsent statute to the contrary, a chancery court is precluded by either doctrine [res judicata

or collateral estoppel] once an administrative agency, acting in a fact-finding capacity, enters

its ruling.” 571 So. 2d at 269, fn. 5. This Court specifically determined in Hood that “[i]f

an aggrieved state employee were allowed to bring his Section 1983 claim in chancery court

after exhausting his administrative remedies and judicial review thereof, we would be

sanctioning a duplication of process.” Id. at 268. But see East Mississippi State Hosp. v.

Callens, 892 So. 2d 800, 822 (Miss. 2004) (overruling Hood to the extent it denies a

discharged state employee the right to assert appropriated Section 1983 claims against state

officials in their personal or individual capacities). This Court has found that the Hood

holding “dictates that the doctrine of res judicata precludes not only further litigation of

claims that were actually raised in a prior proceeding, but also any claim that could have been

raised in the earlier suit.” Smith, 797 So. 2d at 963 (citing Hood, 571 So. 2d at 267-69).

¶16.   Section 27-73-1 was an “additional and supplemental method of refunding taxes

erroneously paid” to “any other law providing for the application for or the certification of

a claim for refund.” Miss. Code Ann. Section 27-73-1. In other words, both Sections 27-7-

71, -73 and Section 27-73-1 were available to Appellants when the action was initially

commenced. However, when Appellants chose to seek relief under Sections 27-7-71 and -

73, they also became bound by the provisions of those statutes and the resulting outcome.

Section 27-7-73 expressly states that the Tax Commission determination “shall be final”



                                               14
unless a petition was filed in the chancery court seeking a “hearing of the case on its merits”

and accompanied by “a bond ... in a sum double the amount in controversy.” Miss. Code

Ann. Section 27-7-73. The Tax Commission fully considered the issue and entered a

determination against Appellants under Section 27-7-73. When Appellants chose not to

appeal the Tax Commission’s determination and paid the tax, finality attached under Section

27-7-73. As the doctrines of res judicata and collateral estoppel apply to administrative

decisions, the finality of Section 27-7-73 judicially forecloses the Appellants from now

utilizing Section 27-73-1. See Smith, 797 So. 2d at 963; Zimmerman, 747 So. 2d at 861;

Hood, 571 So. 2d at 268. To hold otherwise would effectively strip Sections 27-7-71, and

-73 of the force they were legislatively created to possess and make a mockery of the time-

honored principles of res judicata and collateral estoppel.21

¶17.   Even if an appeal under Section 27-73-1 was not barred by the doctrines of res

judicata and collateral estoppel, Appellees argue that the statute of limitations in Section 27-

73-5 would bar the action. Section 27-73-5, the applicable statute of limitations for actions

brought under Section 27-73-1, requires the suit to be filed within three years of the date the

return is filed, the date the tax assessment is made, or the date the tax was paid, whichever

is earliest.22 The returns were filed between 1990 and 1995; the tax assessment was made

on June 1, 1999; and the tax was paid on May 11, 2001. Because the suit was not filed until


       21
          Of additional significance, Appellants fully paid the tax assessment, presented a
letter to the Tax Commission stating that they were not appealing its final Order, and then
waited over two years before first advancing their theory regarding Section 27-73-1's
applicability.
       22
            See footnote 20.

                                              15
February 19, 2004, more than three years had passed from every applicable date except the

date the tax was paid. Appellants respond that this argument is unsupportable because its

analysis hinges upon the assumption that the Appellants right to claim a refund could have

expired prior to the assessment or payment of the taxes. Simply stated, Appellants argue that

if Section 27-73-5 is applied in this fashion, the statute of limitations could bar a party from

asserting a right before it ever arose, violating the due process clause of both the Mississippi

Constitution and the United States Constitution. See Bell v. Union & Planters’ Bank &

Trust Co., 158 Miss. 486, 130 So. 486, 487 (1930) (“A statute of limitations, which attempts

to bar a debt without giving reasonable time within which the right may be preserved, is

violative of the contract clause (article 1, § 10, cl. 1), as well as the due process clause, of the

Federal Constitution (Amendment 14) and of the like provisions in our state Constitution.”).

Assuming arguendo, that beginning the statute of limitations from the date returns were filed

would be constitutionally infirm, we are not required to address this, as the facts in this case

establish that approximately four years and nine months passed between the date of

assessment (June 1, 1999) and the date the suit was filed (February 19, 2004). Clearly, the

statute of limitations would have expired, assuming a Section 27-73-1 action were

permissible, under this set of facts.

       III.    Whether Miss. Code Ann. Section 27-7-73 is unconstitutional and whether
               the chancellor erred in relying exclusively on it as the legal basis for a
               ruling that Appellants were barred from seeking a refund of overpaid
               taxes pursuant to Miss. Code Ann. Section 27-73-1.

¶18.   Only if this Court determined that an action based on Section 27-7-73 was sustainable

would we be required to consider whether the statute could withstand constitutional scrutiny.


                                                16
However, because this Court has determined that both Sections 27-7-71 and -73 and Section

27-73-1 were available to Appellants when the action was initially commenced, any

argument regarding the unconstitutionality of Section 27-7-73 is misplaced.23 Appellants

became bound by the provisions of Sections 27-7-71 and -73 when they elected to seek relief

thereunder. They had the option of paying the contested taxes and proceeding under Section

27-73-1. Appellants elected to use the administrative appeals procedures of Section 27-7-71

and, upon being denied relief thereunder, elected not to appeal the final Order of the Tax

Commission.        Thereafter, they paid the tax assessment.       The Tax Commission’s

determination under Section 27-7-73, not being appealed, became final. To hold otherwise

“would deprive § 27-7-73 of any operative force.”

       IV.       Because the circumstances surrounding a letter written by Appellants
                 remains unresolved and the Court failed to consider the financial
                 condition of Appellants, whether genuine issues of material fact exist
                 which should have precluded the chancellor’s grant of summary
                 judgment.

¶19.   Appellants contend the chancellor failed to consider whether their financial condition

in 2001 precluded them from proceeding under Section 27-7-73. Appellants argue that in

spite of the plain language of their May 11, 2001 letter (“The captioned taxpayers are not

appealing the final Order of the Mississippi State Tax Commission ....”) and their full

payment of the tax assessment, which created finality in the Tax Commission’s Order under

Section 27-7-73, the chancellor should have intuited their surrounding circumstances (i.e.

inability to obtain the appeal bond within thirty (30) days). This argument lacks merit. As



       23
            Note also that Section 27-7-73 has since been repealed. See footnote 14.

                                              17
Appellants failed to appeal or otherwise seek relief from the Tax Commission’s Order within

thirty (30) days of receiving notice, that Order became final and is non-appealable. Any

attempt to circumvent that finality is barred under the doctrines of res judicata and collateral

estoppel. See Smith, 797 So. 2d at 963; Zimmerman, 747 So. 2d at 861; Hood, 571 So. 2d

at 268. Therefore, no genuine issues of material fact exist, and Appellees are “entitled to

judgment as a matter of law.” Hardy, 826 So. 2d at 74 (quoting Robinson, 732 So. 2d at

207).

                                       CONCLUSION

¶20.    For the aforementioned reasons, this Court affirms the chancellor’s decision to grant

summary judgment for Appellees.


¶21.    AFFIRMED.

    SMITH, C.J., WALLER, P.J., EASLEY AND CARLSON, JJ., CONCUR.
COBB, P.J., AND DICKINSON, J., CONCUR IN RESULT ONLY WITHOUT
SEPARATE WRITTEN OPINION. GRAVES, J., DISSENTS WITH SEPARATE
WRITTEN OPINION. DIAZ, J., NOT PARTICIPATING.

        GRAVES, JUSTICE, DISSENTING:

¶22.    The Majority affirmed the chancellor’s decision to grant summary judgment to the

Attorney General of the State of Mississippi and the Executive Director of the Department

of Finance and Administration. However, I am compelled to dissent. The opinion of the

Majority specifically applies its statutory interpretation of Miss. Code Ann. Section 27-7-71

and Miss. Code Ann. Section 27-7-73 to the facts of this case. The Majority affirmed the

chancellor’s ruling that the Davis’ were not entitled to judicial review because they failed to



                                              18
seek review of the administrative decision within thirty (30) days of the Tax Commission’s

Order, as required by Section 27-7-73. Based upon this interpretation, the Majority opines

that the failure to appeal rendered the Tax Commission’s Order final and unreviewable under

the doctrines of res judicata and collateral estoppel.

¶23.   The Majority is simply in error when it applies its interpretation of Section 27-7-71

and Section 27-7-73 to a refund claim submitted by the Davis’ under Section 27-73-1, which

establishes that a refund can be sought under that section for any tax where the taxpayer has

paid an amount beyond what is due. Under Section 27-73-1, a taxpayer has the right to

pursue a refund claim for overpaid taxes. Furthermore, a taxpayer is entitled to the benefits

of Section 27-73-1, and relief cannot be denied under Section 27-73-1 on the basis that a

taxpayer’s claim is barred under Section 27-7-73. There must exist some impediment against

the claim as listed in Section 27-73-1. In this case, the State’s argument was that the Davis’

claim was barred once the administrative appeals processes of Section 27-7-71 and Section

27-7-73 were utilized. The State further argued that because the claim was barred under

Section 27-7-73, this bar of relief extended to preclude the Davis’ from seeking a refund

under Section 27-73-1. This analysis is clearly erroneous. The statutory sections relied upon

by the State are separate and distinct from the particular code section used by the Davis’ to

seek a refund. Miss. Code Ann. Section 27-73-1 specifically deals with tax refunds, while

Sections 27-7-71 and 27-7-73 discuss the remedies available to a taxpayer after an

assessment is made. These statutes are separate, distinct, and independent. There is no

question that Section 27-73-1 applies to the overpayment of income taxes because in State



                                              19
ex. rel. Rice, Atty. Gen. v. Mississippi Institute of Aeronautics, 198 Miss. 288, 22 So.2d 372

( Miss. 1945), this Court confirmed that Section 27-73-1 did in fact apply to the overpayment

of income tax:

              But it is contended by the appellant that Chapter 127, Laws
              1944, granting the taxpayer the right to bring such a suit does
              not cover this particular character of claim, since it only
              provides that ‘if any person, firm or corporation as paid, or shall
              hereafter pay to the *** state tax commission *** through error
              or otherwise, whether paid under protest or not, any *** eccise
              [sic] tax for which such person, firm or corporation was not
              liable, or if any such taxpayer has paid any tax in excess of the
              sum properly due and such erroneous payment or over-payment
              has been paid into the proper treasury, the taxpayer shall be
              entitled to a refund of the taxes so erroneously paid.’ The
              precise contention of the appellant is that the facts rendering the
              payment of the taxes an overpayment or an erroneous payment
              must have existed at the time the income tax return was made on
              March 12, 1943. But we are unable to agree with this
              contention. We think that the subsequent renegotiation of the
              contract as to price relates back so as to render the income tax
              on the $94,000 an overpayment, since the State Tax Commission
              received the tax subject to the right of the Federal Government
              to require the refund by the taxpayer of such portion of the total
              compensation paid under the contract, thereby rendering it non-
              taxable income of the taxpayer.
Id. at 374.

¶24.   In Barnett v. United States Casualty Co., 21 So.2d 5 (Miss. 1945), this Court

explained that Section 27-73-1 constitutes an additional and supplemental method for

pursuing a tax refund when the taxpayer is unable to obtain relief through ordinary

administrative channels. In Barnett, this Court stated:

              Save as to the particular taxes specially excepted, a taxpayer
              may now pay to a tax collector, state or county, any tax
              demanded, thereby not delaying its payment, and when, upon


                                              20
               subsequent development or ascertainment, it is found that as a
               matter of ultimate liability the tax, or full amount, so collected
               is not rightfully retained, and he is unable to obtain relief
               through the ordinary administrative channels, he may resort
               to the positive provisions of the modern enactment last cited. If
               this was not the purpose of the enactment, it had as well not
               been passed at all.
Id. at 880 (emphasis added). The facts of this case indicate that financial constraints played

a major role in the Davis’ failure to secure the appeal bond as required by Miss. Code Ann

Section 27-7-73. This situation placed the Davis’ in the category of taxpayers who were

unable to obtain relief through ordinary administrative channels. Therefore, Section 27-73-1

constituted the additional and supplemental method by which they could pursue a refund.

¶25.   The legislative intent of Section 27-7-71 and Section 27-7-73 was to outline the

procedures involved in the administrative appeals process concerning income tax and

withholding, not to preclude taxpayers from exercising their right of relief under Section 27-

73-1. If this was the case, the legislature would have used restrictive language in the statutes

to signify that a bar under Section 27-7-71 would equal a bar to relief under Section 27-73-1.

Currently, there is no statutory language in Section 27-7-71 or Section 27-7-73 which would

extend a statutory bar to relief to Section 27-73-1 if a claim is not appealed within thirty days

under Section 27-7-71. Furthermore, in Bailey v. Al-Mefty, 807 So.2d 1203 (Miss. 2001), this

Court stated the primary rule of statutory construction:

              The primary rule of construction is to ascertain the intent of the
              legislature from the statute as whole and from the language used
              therein. Where the statute is plain and unambiguous there is no
              room for construction, but where it is ambiguous the court, in
              determining the legislative intent, may look not only to the



                                               21
               language used but also to its historical background, its subject
               matter, and the purposes and objects to be accomplished.
Id. at 1206.


¶26.   When interpreting the intent of the Legislature when it enacted Section 27-73-1, this

Court in Mississippi Cent. R. Co. v. City of Hattiesburg,163 Miss. 311, 141 So. 897 (1932)

stated that “the statute created a right and not a mere remedy.” Id. at 897. This right is

separate, distinct, and independent of anything prescribed in Section 27-7-71 or Section 27-7-

73, and nothing relied upon by the Majority extinguishes the right created by Section 27-73-1.

This statute creates an unqualified right to seek a refund and what has occurred prematurely

aborts the process whereby a refund can be sought. Absent any authority which extinguishes

this statutory right, the Davis’ are entitled to pursue their claim under Section 27-73-1. The

right of a taxpayer to the entitlement of a refund for the overpayment of taxes can be found

in the language of Section 27-73-1(1):


               If any person, firm or corporation has paid, or shall hereafter pay
               to the Auditor of Public Accounts or the Commissioner of
               Insurance, through error or otherwise, whether paid under protest
               or not, any ad valorem, privilege or excise tax for which the
               person, firm or corporation was not liable, or if any such taxpayer
               has paid any tax in excess of the sum properly due and such
               erroneous payment or overpayment has been paid into the proper
               treasury, the taxpayer shall be entitled to a refund of the taxes
               so erroneously paid. Taxes erroneously paid within the meaning
               of this section shall include double payment, or overpayment, or
               payment on state, United States, vacant and exempt land, and the
               purchase price paid for the redemption of lands erroneously sold
               for taxes.
(Emphasis added).




                                               22
¶27.   The word “shall” is used to express what is mandatory. Absent language within Section

27-73-1 which would prohibit the entitlement of a refund if a taxpayer’s claim is barred under

Section 27-7-71, the statute mandates that a taxpayer be allowed to exercise his alternative and

supplemental right of review under Section 27-73-1.

¶28.   The Majority also states in the opinion that “both Section 27-7-71 and Section 27-73-1

were available to the Appellants when the action was initially commenced. However, when

the Appellants chose to seek relief under Sections 27-7-71,-73, they also became bound by

the provisions of those statutes and the resulting outcome.” The Majority must note that no

statutory language exists which can be interpreted to conclude that the Legislature intended

that taxpayers only have one option as between Section 27-7-71 and Section 27-73-1. The

Legislature created a right to seek a refund. Furthermore, the “finality” language relied upon

by the Majority only applies to Section 27-7-71 and cannot be imposed on Section 27-73-1

to preclude relief on the doctrines of res judicata and collateral estoppel. While the Davis’

claims may have reached a stage of “finality” as applied to their initial petition under Section

27-7-73, this did not preclude them from exercising their right of potential relief for a refund

under Section 27-73-1.

¶29.   In light of the majority opinion, those who knowingly and voluntarily choose to

overpay their taxes with an eye toward seeking a refund upon filing a return should now be

reluctant to do so based on this decision. Accordingly, because the Davis’ are entitled to the

right of review of their claim under Section 27-73-1, I respectfully dissent.




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