Appeal from the Circuit Court for Baltimore County (BERRY, J.).
The cause was argued before Brune, C.J., and Hammond, Prescott, Marbury and Sybert, JJ.
PRESCOTT, J., delivered the opinion of the Court.
The Circuit Court for Baltimore County affirmed a ruling of the Retail Sales Tax Division of the Comptroller, which denied a claim for a refund of sales taxes paid and rejected a protest of an assessment of additional sales taxes, and the taxpayer has appealed, posing three questions:
1. Are the charges for reducing the size of stone slabs from a large, irregular size to a smaller size of uniform thickness for sales as building stone a part of the price of such stone on which the tax is to be computed, or are they charges for installing such stone?
2. Is the quarrying and selling of building stone subject to the sales tax either as the retail sale of tangible personal property not otherwise exempt from the act or as the production of tangible personal property on special order for a consideration?
3. Under the circumstances in this case, is the Comptroller estopped from assessing and collecting the tax because of statements made to an agent of the appellant by an employee of the Retail Sales Tax Division?
The appellant, The C.E. Weaver Stone Company, is engaged in the business of quarrying and selling building stone from a quarry not owned by it. Weaver's operation consists of blasting the stone from the quarry face, reducing the resulting boulders into what is known as "broken face" stone, that is, slab sizes which may be handled conveniently by one or two men; further processing some of the "broken face" stone to a wall thickness (most such thicknesses being 8"), which product is known as "Chesapeake Hue"; and selling and delivering the "broken face" and "Chesapeake Hue" stone (as well as other kinds and grades of stone) to contractors, builders and other users. Prior to 1951, "Chesapeake Hue" stone was not part of Weaver's product line, and the reduction of "broken face" stone to wall thickness was done by masons on the jobsites. The work was performed immediately prior to installation and was a preparation for installation. The masons did this work although, in some instances, Weaver had to send men to job sites to break down further the stone to get it ready for the wall. Weaver now has no masons and has no contact with the mechanical process of picking stone up and placing it in the wall.
In 1951, Weaver secured a machine known as a "guillotine," the purpose of which was to slice or cut the "broken face" stone at the quarry site into more uniform thicknesses. To some degree, the machine does what was formerly done at the construction
site. The entire function of the machine is to break the stone in a fairly straight fashion. After the installation of the guillotine, Weaver continued to sell "broken face" stone.
The demand for "Chesapeake Hue" stone has been so great that it is practically sold immediately after the processing takes place. Only in winter, when Weaver's men are unable to make delivery on the ...