The opinion of the Court was delivered by HANDLER, J.
In each of these consolidated real property tax appeals, the taxpayer filed its appeal prior to the August 15 deadline prescribed by N.J.S.A. 54:3-21 and the municipality failed prior to the statutory deadline to file its appeal contesting its own tax assessment. The Tax Court granted motions by the municipalities for leave to file belated appeals challenging their original assessments. The Appellate Division reversed these rulings, holding that the taxing districts were required, in order to challenge their own original assessments as too low, to take their appeals by the August 15 statutory deadline. The Appellate Division also held that failure by the municipalities to take timely appeals precluded the Tax Court under these circumstances from granting increases in the original assessments, at least when discrimination is not an issue. F.M.C. Stores Co. v. Borough of Morris Plains, 195 N.J.Super. 373 (1984).
In the Morris Plains case, the taxpayer, F.M.C. Stores, filed a direct appeal to the Tax Court seeking a decrease in its property tax assessment for the year 1983, alleging both that it exceeded true value and was discriminatory. (Discrimination, as in the companion case, is no longer an issue.) The appeal was filed on or about August 15, 1983. Morris Plains filed an answer, which was dated August 15 but was not received by the Tax Court until August 18, 1982. On August 29, Morris Plains filed a motion seeking leave to amend its answer in order to add a counterclaim challenging its original assessment as being below both the true value and the common level. On October 17, 1983 the Tax Court granted this motion over the taxpayer's objection. On October 25, 1983 F.M.C. Stores filed a notice of motion for leave to appeal to the Appellate Division from the Tax Court's interlocutory order. This motion was denied by the Appellate Division on November 23, 1983. F.M.C. Stores then filed with this Court a notice of petition for certification, or, in the alternative, leave to appeal. The taxpayer in Edison Township also filed a notice of motion for leave to appeal to the Appellate Division on December 21, 1983. Following denial by the Appellate Division, the taxpayers brought a similar motion before this Court. We granted the motion in both cases, which were summarily remanded to the Appellate Division for consideration of the merits. 96 N.J. 302 (1984).
The Appellate Division held that tax appeals filed by the municipalities after the August 15 statutory deadline were barred, and, in the absence of timely appeals by the taxing districts from their original assessments, the assessments could not be increased, at least when discrimination is not an issue. Each taxing district filed a notice of motion for leave to appeal, which we granted. 99 N.J. 189 (1984).
The filing of a property tax appeal is governed by N.J.S.A. 54:3-21. This provision directs that both taxpayers and taxing districts aggrieved by the assessed valuation of property, or discriminated against by the assessed valuation of other property, may appeal to the county board of taxation on or before August 15 of that tax year.
The basic rationale adopted by the Tax Court in these cases to permit the filing of appeals by the municipalities after the statutory deadline was that employed by the court in Curtiss-Wright Corp. v. Wood-Ridge, 2 N.J.Tax 143 (Tax Ct. 1981). The municipality was there granted leave to file untimely counterclaims in order to avoid "a manifest and gross injustice" to other taxpayers in the taxing districts. 2 N.J. Tax at 153. Central to the position taken by the Tax Court in Curtiss-Wright was the perceived unfairness stemming from the fact that the challenged assessment was based on an artificially-manufactured compromise settlement rather than on normal valuation procedures.
The Appellate Division in these cases held that the August 15 statutory deadline was a nonmodifiable jurisdictional
Strict adherence to statutory time limitations is essential in tax matters, borne of the exigencies of taxation and the administration of local government. See, e.g., Princeton Univ.
See also McCullough Transp. Co. v. Div. of Motor Vehicles, 113 N.J.Super. 353, 360 (App.Div. 1971) ("Limitation periods for claims for refunds are common administrative provisions found in tax legislation and justified by the need for predictability of revenues by public agencies.")
Courts have recognized that both appealing taxpayers and taxing districts must adhere strictly to the deadlines prescribed by statute. Failure to file a timely appeal is a fatal jurisdictional defect. Clairol v. Kingsley, 109 N.J.Super. 22 (App.Div.), aff'd, 57 N.J. 199 (1970), appeal dismissed, 402 U.S. 902, 91 S.Ct. 1377, 28 L.Ed.2d 643 (1971). A petition of appeal with the county board of taxation pursuant to N.J.S.A. 54:3-21 filed after the statutory deadline has resulted in the dismissal of the taxpayer's appeal. See Mayfair Holding Corp. v. North Bergen Township, 4 N.J.Tax 38, 41 (Tax Ct. 1982) (statutory filing requirement is an "unqualified jurisdictional imperative, long sanctioned by our courts."); Sun Life Assurance Co. of Canada v. Orange, 2 N.J.Tax 25, 28 (Tax Ct. 1980) (failure to comply with filing deadline of N.J.S.A. 54:2-39 for appeal from
The Appellate Division in this case rejected the taxing districts' argument that it is essentially unfair and contrary to public policy to bind a municipality to the August 15 deadline date when a taxpayer filed its appeal on or close to the deadline. The Appellate Division pointed out that
The notion advanced by the municipalities that they will be at a disadvantage by imposing strict statutory filing deadlines on taxing districts misconceives the governmental interest at stake. They complain of the loss of a strategic edge in the adjudicatory process. However, the taxing district does not stand in the shoes of an ordinary citizen; the municipality and the aggrieved taxpayer are not to be analogized to private litigants competing through the judicial machinery for a tactical advantage.
We have in a variety of contexts insisted that governmental officials act solely in the public interest. In dealing with the public, government must "turn square corners." Gruber v. Mayor and Tp. Com. of Raritan Tp., 73 N.J.Super. 120 (App.Div.), aff'd., 39 N.J. 1 (1962). This applies, for example, in government contracts. See Keyes Martin v. Director, Div. of Purchase and Property, 99 N.J. 244 (1985). Also, in the condemnation field, government has an overriding obligation to deal forthrightly and fairly with property owners. See Rockaway v. Donofrio, 186 N.J.Super. 344 (App.Div. 1982); State v.
Similarly, the statutory provisions governing substantive standards and procedures for taxation, including the administrative review process, are premised on the concept that government will act scrupulously, correctly, efficiently, and honestly. It is to be assumed that the municipality will exercise its governmental responsibilities in the field of taxation conscientiously, in good faith and without ulterior motives. To that end, it is expected that it will make proper assessments, which are accorded a strong presumption favoring their validity, see Pantasote v. City of Passaic, 100 N.J. 408 (1985), decided today. It follows that a municipality should undertake to appeal its own assessment only when it has good cause to believe the assessment does not reflect true value, and not simply to achieve a tactical advantage over, or even strategic parity with, a taxpayer that has independently appealed the assessment.
Consequently, we are unimpressed with the legal significance of the argument that a taxpayer will have an undeserved or untoward litigational advantage if the municipality is precluded from filing its own appeal when it attempts to do so after the statutory deadline. The municipality should not be influenced or swayed simply by the pendency of a taxpayer's appeal as a reason for filing its own appeal, absent independent grounds for believing in good faith that its assessment is erroneous.
The second issue presented is whether, and under what circumstances, the Tax Court can increase an original assessment in the absence of a timely appeal or cross-appeal by the
No such transcendent constitutional or statutory policies arise upon the assertion by a taxing district that its assessment was mistaken or has been erroneously calculated. However, a number of cases have allowed increases in assessments in non-discrimination cases, even in the absence of a timely municipal appeal. Rabstein v. Princeton Tp., 187 N.J.Super. 18 (App.Div. 1982); Fort Lee v. Invesco Holding Corp., 6 N.J.Tax 255 (App.Div. 1984); Samuel Hird & Sons, Inc. v. Garfield, 87 N.J.Super. 65 (App.Div. 1965); Rek Investment Co. v. Newark,
The municipalities here advance this rationale in conjunction with the assertion that prohibiting the Tax Court from increasing an assessment in these circumstances harms other taxpayers who must pay more than their fair share of property taxes. As a general proposition, fairness in tax matters extends not merely to the individual taxpayer, but to all the taxpayers in the taxing district. The inequity visited upon other taxpayers and the public generally in such a case is frequently immeasurable and diffused and not comparable to the unfairness suffered by an individual taxpayer claiming that its assessment is discriminatory. See Murnick v. Asbury Park, supra. The arguments advanced by the municipalities overlook the point that the legislation prescribes a carefully structured procedural framework for resolving tax disputes and requires strict adherence to the statutory plan. The statutory scheme itself strikes the balance between the ultimate and general fairness that is achieved when government acts conscientiously and properly in accordance with the statutory standards and the apparent fairness to an individual taxpayer that is achieved in a particular appeal.
Additionally, the municipalities ignore the basis for the disparate treatment with which courts and the Legislature have regarded discrimination claims and those based on erroneous calculations of value. The goal of fixing assessments at precise true value "is rarely met uniformly throughout a taxing district." Weyerhauser, supra, 190 N.J. Super. at 532. Inevitably, calculated values will be higher or lower than if an assessment
Discrimination in the taxing system, however, is not tolerated. In contrast to claims based on erroneous calculations of values, there is no good reason to tax similarly situated taxpayers at different percentages of true value. "If the assessment ratio applied to a parcel substantially exceeds the assessment ratio applied generally in a taxing district, the taxpayer has a right to relief." Murnick, supra, 95 N.J. at 458. Moreover, in Chapter 123 the Legislature has provided a formula for ascertaining the point at which a disparity constitutes a constitutional violation. A determination of discriminatory unfairness is the type of unfairness that requires a court to increase or decrease an assessment notwithstanding the failure of the aggrieved party to affirmatively plead for relief. See Weyerhaeuser, supra, 190 N.J. 528. An erroneous calculation of value does not implicate the same magnitude of unfairness.
As we observed in Pantasote v. City of Passaic, supra, 100 N.J. 408, appeals before the Tax Court, pursuant to N.J.S.A. 54:3-21, are de novo, but the Tax Court's right to make an independent assessment is not boundless. It must be based on the evidence before it and the data that are properly at its disposal. It must also be consistent with the issues as framed by proper pleadings or settled presumptive rules reflecting the underlying policy that governmental action is valid. Pantasote,
As we held in Pantasote, the Tax Court is required to invest the municipal assessment with the presumption of validity. It may not disregard that presumption unless the taxpayer itself has adduced cogent evidence that serves to overcome it. Absent such countervailing testimony, or the factors we deemed relevant in Pantasote, it would be an abuse of discretion to increase the assessment without a proper pleading affirmatively seeking such relief.
We hold therefore that absent a proper claim for relief by the taxing district, the Tax Court may not on an appeal by the taxpayer increase an original tax assessment. However, if it appears from the evidence that is otherwise properly adduced on the appeal that the quantum of the assessment itself is so far removed from true value and that the original assessment methodology is patently arbitrary or capricious, the Tax Court may then properly determine true value in light of the evidence before it. These circumstances are not presented in these cases.
Accordingly, the judgment of the Appellate Division is affirmed.
For affirmance — Justices CLIFFORD, HANDLER, POLLOCK, O'HERN, GARIBALDI and STEIN — 6.
For reversal — None.