Suffolk. Appeal from a decision of the Appellate Tax Board.
Hennessey, C.j., Quirico, Braucher, Kaplan, & Wilkins, JJ.
Taxation, Cigarette tax, Appellate Tax Board.
The opinion of the court was delivered by: Wilkins
A licensed cigarette wholesaler and stamper was not liable under G. L. c. 64C, § 6, for the excise tax on cigarettes which were stolen from it. [607-609]
When it is established that a licensed cigarette wholesaler and stamper has received certain cigarettes, the burden is on it to prove that it did not dispose of them by sale with respect to its liability to pay excise taxes under G. L. c. 64C, § 6. [609-611]
A licensed cigarette wholesaler and stamper was liable for the excise tax under G. L. c. 64C, § 6, for certain missing cigarettes where it failed to prove that the cigarettes had not been sold. 
William Rodman & Sons, Inc. (Rodman), is engaged in the wholesale tobacco business and is both a licensed cigarette wholesaler (G. L. c. 64C, §§ 1, 2) and a stamper (G. L. c. 64C, §§ 1, 30). During the period from May 1, 1971, through May 31, 1972, 358 cases of cigarettes were stolen from Rodman. The Disposition during that period of an even greater number of cigarettes acquired by Rodman "is unaccounted for." The Commissioner of Corporations and Taxation (Commissioner) assessed an excise on all these cigarettes, and the State Tax Commission (commission) denied Rodman's abatement application. On Rodman's appeal to the Appellate Tax Board (board), the board considered the appeal on a statement of agreed facts and certain documents and concluded that Rodman was not liable for an excise on those cigarettes which were stolen but that it was liable for an excise on those cigarettes whose Disposition was unaccounted for. Rodman and the commission have both appealed from those parts of the board's decision which are adverse to them. We conclude that the board was correct and affirm its decision.
1. The board concluded that the excise was not payable with respect to stolen cigarettes because, as to a licensed wholesaler, the excise is imposed on cigarettes that are "sold." See G. L. c. 64C, § 6, as amended through St. 1971, c. 245, § 1. *fn1 We think it is clear that the excise is not imposed simply on the possession of cigarettes for sale. *fn2 The tax imposed by § 6 in 1971 and 1972 was a direct tax on the retail consumer, although collected first at an earlier stage in the distribution process. Harvey Payne, Inc. v. Slate Co., 345 Mass. 488, 492 (1963). *fn3
The commission argues, however, that Rodman was liable as a stamper for the excise under G. L. c. 64C, §§ 29 and 30, as to the stolen cigarettes. Section 30, as amended by St. 1969, c. 361, § 3, provides in part that "very stamper shall purchase cigarette excise stamps from the commissioner and shall affix them, in the manner and within the time prescribed by the commission, to each package of cigarettes to be sold within the commonwealth . . . before such cigarettes are offered for sale or otherwise disposed of" (emphasis supplied). The commission contends that this language makes each stamper liable for an excise on any cigarettes he possesses in the Commonwealth for resale. We do not read § 30 as changing the taxable event from the sale of cigarettes to the possession of cigarettes for resale. Section 30 deals with the method and manner of payment of the excise. There is no indication that Rodman as a stamper had an obligation to affix stamps to the cigarettes which were stolen from it. *fn4
If the Legislature had intended to shift the incidence for the excise from the sale of cigarettes to their possession for resale, it could have done so explicitly. We agree with the board's Conclusion that the addition in 1966 of statutory provisions concerning stampers (see St. 1966, c. 435, § 5) did not make this change by indirection. See, especially, G. L. c. 64C, § 39, inserted by St. 1966, c. 435, § 5, which disavows any intention to affect other provisions of G. L. c. 64C.
2. We turn then to Rodman's liability for an excise on those cigarettes for which it could not account. The board concluded that Rodman was liable for the excise for the reason that it failed to "keep a complete and accurate record of all cigarettes . . . purchased or otherwise acquired" (see G. L. c. 64C, § 5) and to "file with the commissioner, on a form prescribed by him, a return . . . stating the number of cigarettes sold" (see G. L. c. 64C, § 6) during the relevant months. The record does not show that Rodman failed to comply with the record keeping requirements of § 5, but it does show that, in filing its monthly reports during the relevant period, Rodman failed to state the number of taxable cigarettes sold in Massachusetts. As far as appears, Rodman made no attempt either to explain its failure to complete its monthly reports or to disclose to the Commissioner that cigarettes were leaving its possession in unauthorized ways. In February, 1973, the acting chief of the Bureau of Excises wrote to Rodman stating that its reports filed for the period from May 1, 1971, through May 31, 1972, were insufficient or incorrect, and requiring the filing of corrected reports. The parties agree that Rodman has not filed any corrected or additional reports.
The rationale for the board's decision that Rodman was not entitled to an abatement for missing cigarettes is internally inconsistent. The board allowed an abatement as to stolen cigarettes. Thus, the board must not have concluded that the maintenance of records and the filing of proper returns were conditions precedent to any grant of an abatement.
We cannot accept Rodman's claim that the missing cigarettes must have been stolen. The board could not reasonably have drawn such an inference from the parties' agreement that the missing cigarettes are unaccounted for. Because Rodman sold most of the cigarettes it received, an inference that the missing ...