           IN THE SUPREME COURT OF MISSISSIPPI
                     NO. 1998-CA-01068-SCT
STATE OF MISSISSIPPI
v.
LORANTH AND ASSOCIATES, INC.
DATE OF JUDGMENT:                       05/13/1998
TRIAL JUDGE:                            HON. VICKI R. BARNES
COURT FROM WHICH                        WARREN COUNTY CHANCERY COURT
APPEALED:
ATTORNEY FOR APPELLANT:                 BOBBY R. LONG
ATTORNEY FOR APPELLEE:                  KENNETH B. RECTOR
NATURE OF THE CASE:                     CIVIL - STATE BOARDS AND
                                        AGENCIES
DISPOSITION:                            REVERSED AND RENDERED - 9/02/1999
MOTION FOR REHEARING FILED: 09/10/99; denied 11/04/99
MANDATE ISSUED:             11/12/99




    BEFORE PRATHER, C.J., MILLS AND COBB, JJ.


    COBB, JUSTICE, FOR THE COURT:
                          STATEMENT OF THE CASE
¶1. Appellee Loranth and Associates, Inc. ("Loranth") filed a claim for refund of
overpayment of ad valorem taxes with the Mississippi Department of Finance and
Administration ("DFA"). DFA responded that it was not the proper agency to make
such refund and incorporated an Attorney General's opinion letter which stated that the
county tax collector is the proper party for a refund request. Loranth did not make
such further request, but rather filed a petition for appeal and review in the Warren
County Chancery Court, which subsequently entered judgment favorable to Loranth.
The State of Mississippi appealed to this Court, and we reverse and render.
                              STATEMENT OF FACTS
¶2. Loranth became owner of the real property on which the ad valorem taxes at issue
were assessed, when it was sold by the Sheriff to satisfy a construction lien in favor of
Loranth. It was purchased by Loranth at a public auction on October 16, 1996. Prior
to the Sheriff's sale, the property had been sold at a tax sale for delinquent 1995 ad
valorem taxes.
¶3. After the Sheriff's sale, the tax assessor determined that, due to a clerical error, the
property purchased by Loranth was incorrectly assessed as improved property on the
1995 and 1996 tax rolls and was shown as having a value of $95,100 when its true
value was only $21,600.
¶4. On May 14, 1997, the tax assessor, pursuant to Miss. Code Ann. § 27-35-143
(1995), submitted a Petition for Reduction of Assessment to the Warren County Board
of Supervisors, indicating that the 1996 tax rolls should be amended to reduce the
value of the property to reflect that it was unimproved property. No petition was
submitted regarding the 1995 tax rolls. On May 19, 1997, the Board of Supervisors
approved the reduction. On May 21, 1997, Loranth paid the 1995 taxes and fees
totaling $16,639.83 and also paid the reduced 1996 taxes in the sum of $2,914.92.
¶5. Loranth next filed a claim with DFA, requesting a refund of the overpayment of
1995 taxes. DFA requested an Attorney General's opinion regarding such refund, to
which the Attorney General's office responded that the statute cited by Loranth, Miss.
Code Ann. § 27-73-1 (1990), only applied to taxes paid to the Auditor of Public
Accounts, the State Tax Commission, or the Commissioner of Insurance and not to
taxes paid to the County Tax Collector.
¶6. On June 30, 1997, DFA denied Loranth's request for a refund, citing the Attorney
General's opinion. Subsequently, Loranth appealed this decision to the Chancery
Court of Warren County, which reversed the DFA decision and granted Loranth a tax
refund for the overpayment of 1995 ad valorem taxes, finding that Loranth should be
allowed to recover because it did not own the land at the time the incorrect assessment
was made, and its situation is not covered under Miss. Code Ann. § 27-35-143 (1995).
Taking exception with the Chancellor's ruling, the State appealed to this Court.
                           DISCUSSION OF THE ISSUES
¶7. The State specifically alleges the following as grounds for reversal:
     I. MISSISSIPPI CODE ANNOTATED § 27-73-1 DOES NOT APPLY TO
     LORANTH'S REQUEST FOR A REFUND OF AD VALOREM TAXES
     PAID TO THE COUNTY TAX COLLECTOR.
    II. LORANTH FAILED TO FOLLOW THE PROPER PROCEDURE TO
    OBTAIN A REFUND.
    III. LORANTH WAS NOT AN INNOCENT PURCHASER FOR VALUE.


    Standard of Review
¶8. This Court generally accords great deference to an administrative agency's
construction of its own rules and regulations and the statutes which govern its
operation. Mississippi State Tax Comm'n v. Mask, 667 So. 2d 1313, 1314 (Miss.
1995).
¶9. In reviewing the decisions of administrative agencies, the lower court must uphold
the agency's decision unless it finds as follows:
    The reviewing court will entertain the appeal to determine whether or not the order
    of the administrative agency 1) was unsupported by substantial evidence, 2) was
    arbitrary or capricious, 3) was beyond the power of the administrative agency to
    make, or 4) violated some statutory or constitutional right of the complaining
    party.
Mississippi Comm'n on Envtl. Quality v. Chickasaw County Bd. of Supervisors,
621 So. 2d 1211, 1215 (Miss. 1993). In Chickasaw County, we found that a
rebuttable presumption exists in favor of agency decisions, and an appellate court may
not substitute its judgment for that of an agency. Chickasaw County, 621 So. 2d at
1216.
¶10. This Court continues to follow the rule that the scope of appellate review is
limited to the administrative record and the findings of the agency. Board of Law
Enforcement Officers Standards & Training v. Butler, 672 So. 2d 1196, 1199
(Miss. 1996).
    I. MISSISSIPPI CODE ANNOTATED § 27-73-1 DOES NOT APPLY TO
    LORANTH'S REQUEST FOR A REFUND OF AD VALOREM TAXES
    PAID TO THE COUNTY TAX COLLECTOR.
¶11. The State first argues that Loranth improperly sought a tax refund under Miss.
Code Ann. § 27-73-1, which applies only to those taxes paid to the Auditor of Public
Accounts, the State Tax Commission, or the Commissioner of Insurance, and not to
taxes paid directly to the county tax collector. Specifically, Miss. Code Ann. § 27-73-1
(1990) states in pertinent part that
    (1) If any person, firm or corporation has paid or shall thereafter pay to the
    Auditor of Public Accounts, State Tax Commission or the Commissioner of
    Insurance, through error or otherwise, whether paid under protest or not, any ad
    valorem, privilege or excise 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 overpayment has been paid into the proper
    treasury, the taxpayer shall be entitled to a refund of the taxes so erroneously paid
    ....
    ********
    (2) This 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.

¶12. The State points out that the Legislature specifically addressed refunds for taxes
erroneously paid to a county tax collector, in a different statute. Miss. Code Ann. §
27-73-7 (1990) as follows:
    The tax collector is authorized and empowered to refund any individual, firm or
    corporation any ad valorem, privilege or excise tax which has been paid or
    collected through error or otherwise when such person, individual, firm or
    corporation has paid any such tax in excess of the sum properly due whether paid
    under protest or not . . . .
¶13. Loranth disputes the State's interpretation that Section 27-73-1 only provides a
refund mechanism for taxes paid to the Auditor of Public Accounts, the State Tax
Commission or the Commissioner of Insurance, and argued that subsection (1) makes
provision for taxes paid to the county tax collector as well, citing:
    . . . [O]r 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. . . .
Miss. Code Ann. § 27-73-1(1) (1990).
¶14. We disagree. The Legislative intent to distinguish between the agencies mentioned
in § 27-73-1 and the tax collectors mentioned in § 27-73-7 is quite clear. Prior to 1985,
§ 27-73-1 read in part
    (1) If any person, firm or corporation has paid, or shall hereafter pay to the
    Auditor of Public Accounts, State Tax Commission, the Commissioner of
    Insurance, or to any tax collector . . . .
Miss. Code Ann. § 27-73-1 (1972) (emphasis added). When the statute was amended
in 1985, the Legislature specifically removed "any tax collector" from this section and
provided that refunds for taxes paid to the county tax collector be made pursuant to §
27-73-7. Additionally, in § 27-73-1(2) supra, the Legislature took steps to ensure that §
27-73-7 would remain fully intact and not be supplanted or modified by § 27-73-1.
¶15. The record indicates that Loranth made its tax refund request to DFA after being
"advised by officials of Warren County that Section 27-73-1 afforded the only
recourse for refund of 1995 taxes paid by Petitioner based on the erroneous
assessment." However, Loranth relied on this "advice" to its detriment.
¶16. This Court finds that the State's argument is correct. Loranth's refund claim, and
ultimately the Chancellor's affirmation of such, were erroneously based upon a statute
which does not provide the relief requested.
    II. LORANTH FAILED TO FOLLOW THE PROPER PROCEDURE TO
    OBTAIN A REFUND.
    III. LORANTH WAS NOT AN INNOCENT PURCHASER FOR VALUE.
¶17. We find that these claims should not be considered by this Court because they
are outside the scope of its appellate review.
¶18. The only reason advanced by the State when it denied Loranth's request for a tax
refund was the inapplicability of § 27-73-1. Therefore, the other claims advanced by
the parties and considered by the Chancellor below were not properly a part of the
administrative record. As stated above, this Court follows the principle that the scope
of appellate review is limited to the administrative record and the findings of the
agency. Butler, 672 So. 2d at 1199. Thus, the Chancellor below considered issues
which were not germane to the State's denial of Loranth's request for a tax refund. This
Court should not perpetuate the errors committed below by now considering these
issues.
                                   CONCLUSION
¶19. We find that the court below exceeded the applicable standard of review when it
reversed the DFA denial of Loranth's request for a refund of 1995 ad valorem taxes.
Further, the court below considered issues which were not a part of the administrative
record. As a result, the judgment of the Warren County Chancery Court is reversed,
and the Department of Finance and Administration's denial of the requested tax refund
is reinstated.
¶20. REVERSED AND RENDERED.
   PRATHER, C.J., SULLIVAN AND PITTMAN, P.JJ., BANKS, SMITH,
MILLS AND WALLER, JJ., CONCUR. McRAE, J., CONCURS IN RESULT
ONLY.
