STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

AMWAD A. AWAN, SYED A. HUSSAIN, ) AKBAR A. BILGRAMI, SIBTE HASSAN, ) and IAN HOWARD, )

)

Petitioners, )

)

vs. ) CASE NO. 88-6411

)

DEPARTMENT OF REVENUE, )

)

Respondent. )

)

RECOMMENDED ORDER

This cause came before the undersigned after respondent, Department of Revenue (DOR), filed an amended motion for recommended order wherein it sought the dismissal of a petition for formal hearing on the ground the undersigned lacks subject matter jurisdiction in this cause. By their petition, Amwad Awan, Syed A. Hussain, Akbar A. Bilgrami, Sibte Hassan and Ian Howard (petitioners) sought to contest a jeopardy tax assessment levied against them for allegedly laundering drug monies derived from the sale or distribution of illegal drugs.

For purposes of rendering this recommended order, the amended motion for recommended order has been treated as a motion to dismiss. The parties were represented as follows:

APPEARANCES

For Petitioners: B. Gray Gibbs, Esquire

One Fourth Street North Suite 800

St. Petersburg, Florida 33701

For Respondent: Jeffrey M. Dikman, Esquire

Department of Legal Affairs Tax Section, The Capitol

Tallahassee, Florida 32399-1050 STATEMENT OF THE ISSUES

The narrow issue presented herein is whether Subsection 72.011(1), Florida Statutes (1987), bars petitioners from filing their petition for formal hearing because they had previously filed a similar action in circuit court.

Based upon the pleadings filed in this cause, the following findings of fact are determined:

FINDINGS OF FACT

1. On October 21, 1988, DOR issued a notice of assessment and jeopardy findings against petitioners alleging that, pursuant to the provisions of Section 212.0505, Florida Statutes (1987), they owed $16,681,820.07 for having "engaged in the unlawful sale, use, consumption, distribution, manufacture, derivation, production, transportation, or storage of a medicinal drug, cannabis, or a controlled substance." The notice alleged further that petitioners made up a criminal enterprise which, among other things, had been engaged in the activity of laundering money derived from the sale and distribution of illegal drugs (cocaine). (Exhibit A of petition for formal hearing)

   
   

2. On December 19, 1988, petitioners filed a complaint against DOR in the circuit court of the thirteenth judicial circuit in and for Hillsborough County, Florida. In that action, petitioners sought to have declared unconstitutional section 212.0505 and to contest DOR's jeopardy tax assessment. The complaint reflects that the contest of assessment was filed under Section 72.011, Florida Statutes (1987). (Exhibit A of amended motion for recommended order of dismissal)

   
   

3. On December 19, 1988, petitioners filed a petition for formal hearing with the Division of Administrative Hearings (DOAH) seeking to contest DOR's jeopardy tax assessment. (Exhibit A of petitioners' response to DOR's motion for recommended order of dismissal)

   
   

4. A copy of the petition for formal hearing was received by DOR on December 20, 1988, or one day after the circuit court action was filed. (Exhibit B of amended motion for recommended order of dismissal)

   
   

   CONCLUSIONS OF LAW

   
   

5. The Division of Administrative Hearings has jurisdiction of the subject matter and the parties thereto pursuant to Subsection 120.57(1), Florida Statutes (Supp. 1988).

   
   

6. Subsection 72.011(1), Florida Statutes (1987) reads as follows:

   
   

   1. A taxpayer may contest the legality of any assessment of tax, interest, or penalty provided for under s. 125.0104, chapter 198, chapter 199, chapter 201, chapter 203, chapter 206, chapter 207, chapter 211, chapter 212, chapter 213, chapter 214, chapter 220, chapter 221, s. 336.021, s. 336.025, chapter 376, or chapter 624 by filing an action in circuit court; or, alternatively, the taxpayer may file a petition under the applicable provisions of chapter 120. However, once an action has been initiated under s. 120.56, s. 120.565, or s. 120.57, no action relating to the same subject matter may be filed by the taxpayer in circuit court, and judicial review shall be exclusively limited to appellate review pursuant to s. 120.68; and once an action has

      been initiated in circuit court no action may be brought under chapter 120. (Emphasis added)

      * * *

      
      

7. The pleadings, and attached documents, reflect clearly that petitioners filed their action in circuit court on December 19, 1988, and, one day later, filed their petition for formal hearing with DOR. Under the express terms of subsection 72.011(1), "once an action has been initiated in circuit court, no action may be brought under chapter 120." Contrary to respondent's assertion, the undersigned has subject matter jurisdiction over this type of controversy. However, because petitioners have made an election of remedies under the law, the administrative action must be dismissed and jurisdiction deferred to the circuit court, the forum in which petitioners have chosen to contest the tax. Therefore, the amended motion to dismiss should be granted.

   
   

8. In reaching the above conclusion, the undersigned has given thoughtful consideration to petitioners' contention that the administrative action was timely filed with DOAH on December 19, 1988, or the same day as the circuit court action. They go on to cite Section 120.575, Florida Statutes (Supp. 1988), as authorizing this procedure. Paragraph (1)(b) of that statute provides in part as follows:

(b) In any such administrative proceeding brought pursuant to s. 120.57(1) as authorized by s. 72.011(1) to contest the legality of any assessment of tax imposed for the sale or use of services as provided in chapter 212 . . . the following procedures shall apply . . .

1. The petition shall be filed with the division, which shall forward a copy to the department immediately upon receipt of the petition.

However, the filing provisions under section 120.575 apply only in cases involving "the legality of any assessment of tax imposed for the sale or use of services." Since the tax assessment at issue does not arise out of a tax imposed for the sale or use of services, the filing procedures in section

120.575 do not apply.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that respondent's amended motion to dismiss the petition for

formal hearing be GRANTED, and the petition be dismissed.

DONE and ORDERED this 19th day of June, 1989, in Tallahassee, Leon County, Florida

DONALD R. ALEXANDER

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 20th day of June, 1989.

COPIES FURNISHED:

B. Gray Gibbs, Esquire One Fourth Street North Suite 800

St. Petersburg, Florida 33701

Jeffrey M. Dikman, Esquire Department of Legal Affairs Tax Section, The Capitol

Tallahassee, Florida 32399-1050

Katie D. Tucker, Executive Director Department of Revenue

102 Carlton Building Tallahassee, Florida 32399-0100

Office of the General Counsel Department of Revenue

203 Carlton Building Tallahassee, Florida 32399-0100

Docket for Case No: 88-006411

Orders for Case No: 88-006411