Tax Court dismisses case against Department of Revenue due to petitioner inaction

September 30, 2016

The Indiana Tax Court dismissed a gasoline and convenience store company’s case against the state Department of Revenue Thursday, writing that the company failed to respond to discovery requests or take any action in the case for a period of more than two months.

In the case of SBP Petroleum, Inc. v. Indiana Department of State Revenue (mem. dec.), 49T10-1409-00057, the Indiana Department of State Revenue issued best information available proposed assessments against SBP Petroleum for the 2010, 2011 and 2012 tax years in 2014.

The assessments showed that SBP Petroleum owed additional sales tax, interest and penalties amounting to more than $236,700, additional corporate income tax, interest and penalties amounting to more than $10,260 and additional withholding tax, interest and penalties amounting to nearly $22,000. SBP protested, but the department denied each of its protests.

The SBP president then filed three verified petitions for review, alleging that the department had used incorrect methodology to determine the tax liabilities. The court approved a joint case management plan in February 2015, but the Department of Revenue filed an agreed motion to vacate the plan in October 2015 and asked to file a new case management plan within 30 days. The court approved the new case management plan in November 2015.

In January 2016, the department served SBP with a discovery request that sought the production of “all notes, documents, payroll records, billing record, written correspondences and copes of emails” that supported SBP’s position within 30 days, a deadline SBP failed to meet. The gasoline company then filed a motion to amend the case management plan, which was granted.

The department then sent notices of depositions and subpoenas to SBP petroleum and its president ordering them to appear in court on June 16, 2016, but neither the company’s witness nor its president appeared.

On June 22, the department filed a motion to dismiss SBP case because the company had impeded discovery and had failed to take action. Alternatively, the department requested that the court compel SBP to respond to discovery and ensure that its witnesses attend depositions. SBP’s attorney filed a motion to withdraw one day later, citing a breakdown of communication.

The Department of Revenue appeared at a scheduled hearing on Sept. 19, but SBP did not.

In granting the department’s motion to dismiss SBP’s case, the tax court wrote in a memorandum decision that the case had been pending for 634 days, and that it had been 84 days since SBP had taken any action at all. Further, even after its counsel withdrew, SBP failed to take any further action and went so far as to fail to appear at the scheduled hearing. Thus, the tax court granted the department’s motion and dismissed the case with prejudice.


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