June 16, 1954

AN ACT CREATING THE COURT OF TAX APPEALS

Section 1. Court; Judges; qualifications; salary; tenure. - There is hereby created a Court of Tax
Appeals which

(d)shall consist of a Presiding Judge and two Associate Judges,

each of whom shall be appointed by the President,

with the consent of the Commission on Appointments.

The Presiding Judge shall be so designated in the commission issued to him by the President,

and the Associate Judges shall have precedence according to the date o their commissions.

(e)The Presiding Judge shall receive a compensation of thirteen thousand pesos per annum and
shall have the same qualifications, rank, category and privileges as the Presiding Judge of the
Court of Industrial Relations.

The Associate Judges shall each receive a compensation of twelve thousand pesos per annum
and shall have the same qualifications, rank, category and privileges as a member of the Court
of Industrial Relations.

(F)The Presiding Judge and the Associate Judges shall be appointed to hold office during good
behavior, until they reach the age of seventy, or become incapacitated to discharge the duties of
their office, unless sooner removed for the same causes and in the same manner provided by law
for members of the judiciary of appellate rank.

Section 2. Quorum; temporary vacancy. –

Any two Judges of the Court of Tax Appeals shall constitute a quorum, and the concurrence of
two judges shall be necessary to promulgate any decision thereof.

In case of temporary vacancy, disability or disqualification, for any reason, of any of the judges of
the said Court, the President may, upon the request of the Presiding Judge, designate any
Judge of First Instance to act in his place; and such Judge of First Instance shall be duly
qualified to act as such.

Quorum -the minimum number of members of an assembly or society that must be present at any of its meetings to make
the proceedings of that meeting valid.

Section 3. Clerk of court; appointment; qualification; compensation. - The Court of Tax Appeals
shall have the Clerk of Court who shall be appointed by the President with the consent of the
Commission on Appointments. No person shall be appointed Clerk of Court unless he is duly
authorized to practice law in the Philippines. The Clerk of Court shall exercise the same powers and
perform the same duties in regard to all matters within the court's jurisdiction, as are exercise and
performed by clerks of Court of First Instance, in so far of those powers and the performance of
those duties the clerk shall be under the direction of the said court. The Clerk of Court shall receive a
compensation of six thousand pesos per annum.

Section 4. Other subordinate employees. - The Court of Tax Appeals shall appoint, in accordance
with the Civil Service Law, rules and regulations, the necessary personnel to assist it in the
performance of its duties. The said Court shall fix their salaries and prescribe their duties.

Section 5. Disqualifications. - No judge or other officer or employee of the Court of Tax Appeals
shall intervene, directly or indirectly, in the management or control of any private enterprise which in
any way may be affected by the functions of the Court. Judges of the said Court shall be disqualified
from sitting in any case on the same grounds provided under Rule one hundred twenty-six of the
Rules of Court for the disqualification of judicial officers. No person who has once serviced in the
Court in a permanent capacity, either as Presiding Judge or as Associated Judge thereof, shall be
qualified to practice as counsel before the Court for a period of one year from his separation
therefrom for any cause.

Section 6. Place of office. - The Court of Tax Appeals shall have its office in the City of Manila, and
shall hold hearings at such time and place as it may, by order in writing, designate with a view to
assuring a reasonable opportunity for taxpayers to appear with a little inconvenience and expense
as practicable.

Section 7. Jurisdiction. - The Court of Tax Appeals shall exercise exclusive appellate jurisdiction to
review by appeal, as herein provided.

(1) Decisions of the Collector of Internal Revenue in cases involving disputed assessments,
refunds of internal revenue taxes, fees or other charges, penalties imposed in relation
thereto, or other matters arising under the National Internal Revenue Code or other law or
part of law administered by the Bureau of Internal Revenue;

(2) Decisions of the Commissioner of Customs in cases involving liability for customs duties,
fees or other money charges; seizure, detention or release of property affected fines,
forfeitures or other penalties imposed in relation thereto; or other matters arising under the
Customs Law or other law or part of law administered by the Bureau of Customs; and

(3) Decisions of provincial or city Boards of Assessment Appeals in cases involving the
assessment and taxation of real property or other matters arising under the Assessment
Law, including rules and regulations relative thereto.

Section 8. Court of record; seal; proceedings. - The Court of Tax Appeals shall be a court of
record and shall have a seal which shall be judicially noticed. It shall prescribe the form of its writs
and other processes. It shall have the power to promulgate rules and regulations for the conduct of
the business of the Court, and as may be needful for the uniformity of decisions within its jurisdiction
as conferred by law, but such proceedings shall not be governed strictly by technical rules of
evidence.

Section 9. Fees. - The Court shall fix reasonable fees for the filing of an appeal, for certified copies
of any transcript of record, entry or other document, and for other authorized services rendered by
the Court or its personnel.

Section 10. Power to administer oaths; issue subpoena; punish for contempt. - The Court shall
have the power to administer oaths, receive evidence, summon witnesses by subpoena and require
the production of papers or documents by subpoena duce tecum, subject in all respects to the same
restrictions and qualifications as apply in judicial proceedings of a similar nature. The Court shall, in
accordance with Rule sixty-four for the Rules of Court, have the power to punish for contempt for the
same causes, under the same procedure and with the same penalties provided therein.

Section 11. Who may appeal; effect of appeal. - Any person association or corporation adversely
affected by a decision or ruling of the Collector of Internal Revenue, the Collector of Customs or any
provincial or city Board of Assessment Appeals may file an appeal in the Court of Tax Appeals within
thirty days after the receipt of such decision or ruling.

No appeal taken by the Court of Appeals from the decision of the Collector of Internal Revenue or
the Collector of Customs shall suspend the payment, levy, distraint, and or sale of any property of
the taxpayer for the satisfaction of his tax liability as provided by existing law; Provided, however,
That when in the opinion of the Court the collection by the Bureau of Internal Revenue or the
Commissioner of Customs may jeopardize the interest of the Government and/or the taxpayer the
Court at any stage of the proceeding may suspend the said collection and require the taxpayer either
to deposit the amount claimed or to file a surety bond for not more than double the amount with the
Court;

Section 12. Taking of evidence. - The Court may, upon proper motion on or its initiative, direct that
a case, or any issue thereof, be assigned to one of its members for the taking of evidence, when the
determination of a question of fact arises upon motion or otherwise in any stage of the proceedings,
or when the taking of an account is necessary, or when the determination of an issue of fact requires
the examination of a long account. The hearing before such member shall proceed in all respects as
though the same had been made before the Court.

Upon the recommendation of such hearing such member, he shall promptly submit to the Court his
report in writing, stating his findings and conclusions; and thereafter, the Court shall render its
decisions on the case, adopting, modifying, or rejecting the report in whole or in part, as the case
may be, or the Court may, in its discretion recommit it with instructions, or receive further evidence.

Section 13. Decision. - Cases brought before the Court shall be decided within thirty days after the
submission thereof for decision. Decisions of the Court shall be in writing, stating clearly and
distinctly the facts and the law on which they are based, and signed by the judges concurring
therein. The Court shall provide for the publication of its decisions in the Official Gazette in such form
and manner as may best be adopted for public information and use.

As in the case of judicial officers under section one hundred twenty-nine of the Administrative Code,
the judges of the Court shall each certify on their applications for leave, and upon salary vouchers
presented by them for payment, or upon the payrolls under which their salaries are paid, that all
proceedings, petitions and motions which have been submitted to the Court for determination or
decision for a period of thirty days or more have been determined or decided by the Court on or
before the date of making the certificate, and no leave shall be granted and no salary shall be paid
without such certificate.

Section 14. Effect of decision that tax is barred by statute of limitations. - If the assessment or
collection of any tax is barred by any statute of limitations, the decisions of the Court that effect shall
be considered as its decision that there is no deficiency in respect of such tax.

Section 15. Publicity of proceedings and publication of decisions. - All decisions of, and all
evidence received by the Court and its divisions, including transcript of stenographic reports of the
hearings, shall be public records open to the inspection of the public, except that after the decision of
the Court in any proceedings has become final the Court may, upon motion of the taxpayer or the
Government permit the withdrawal, by the part entitled thereto of originals of books, documents and
records, and or models, diagrams, and other exhibits, introduced in evidence before the Court or any
division; or the Court may, on its own motion, make such other disposition thereof as it deems
advisable. The Court shall provide for the publication of its decisions in the Official Gazette in such
form and manner as may be best adopted for public information and use.

Section 16. Damages. - Where an appeal is found to be frivolous, or that proceedings have been
instituted merely for delay, the Court may assess damage against the appellants in an amount not
exceeding five hundred pesos, which shall be collected in the same manner as fines or other
penalties authorized by law.

Section 17. Violation of penal law. - When, in the performance of its functions, it should appear to
the Court that a crime or other violation of law has been committed, or, that there are reasonable
grounds to believe that any official, employee or private person is guilty of any crime, offense or
other violation, the Court shall refer the matter to the proper department, bureau or office for
investigation or the institution of such criminal or administrative action as the facts and
circumstances of the case may warrant.

Section 18. Appeal to the Supreme Court. - No judicial proceeding against the Government
involving matters arising under the National Internal Revenue Code, the Customs Law or the
Assessment Law shall be maintained, except as herein provided, until and unless an appeal has
been previously filed with the Court of Tax Appeals and disposed of in accordance with the
provisions of this Act.

Any party adversely affected by any ruling, order or decision of the Court of tax Appeals may appeal
therefrom to the Supreme Court by filing with the said Court a notice of appeal and with the Supreme
Court a petition for review, within thirty days from the date he receives notice of said ruling, order or
decision. If, within the aforesaid period, he fails to perfect his appeal, the said ruling, order or
decision shall become final and conclusive against him

If no decision is rendered by the Court within thirty days from the date a case is submitted for
decision, the party adversely affected by said ruling, order or decision may file with said Court a
notice of his intention to appeal to the Supreme Court, and if, within thirty days from the filing of said
notice of intention to appeal, no decision has as yet been rendered by the Court, the aggrieved party
may file directly with the Supreme Court an appeal from said ruling, order or decision,
notwithstanding the foregoing provisions of this section.

If any ruling, order or decision of the Court of Tax Appeals be adverse to the Government, the
Collector of Internal Revenue, the Commissioner of Customs, or the provincial or city Board of
Assessment Appeals concerned may likewise file an appeal therefrom to the Supreme Court in the
manner and within the same period as above prescribed for private parties.

Any proceeding directly affecting any ruling, order or decision of the Court of Tax Appeals shall have
preference over all other civil proceedings except habeas corpus, workmen's compensation and
election cases.

Section 19. Review by certiorari. - Any ruling, order or decision of the Court of Tax Appeals may
likewise be reviewed by the Supreme Court upon a writ of certiorari in proper cases. Proceedings in
the Supreme Court upon a writ of certiorari or a petition for review, as the case may be, shall be in
accordance with the provisions of the Rules of Court or such rules as the Supreme Court may
prescribe.
Section 20. Appropriation. - The sum of seventy-thousand pesos is hereby appropriated out of any
funds in the National Treasury not otherwise appropriated for the salaries and the purchase of
supplies and equipment necessary for the operation of the Court of Tax Appeals herein established
during the current fiscal year. Thereafter the funds necessary for the operation of the Court shall be
included in the regular Appropriation Act.

Section 21. General provisions. - Whenever the words "Board of Tax Appeals" are used in
Commonwealth Act Numbered Four hundred and seventy, otherwise known as the Assessment
Law, or in other laws, rules and regulations relative thereto, the same shall read "Board of
Assessment Appeals."

The Central Board of Tax Appeals created under section two of Commonwealth Act Numbered Five
hundred and thirty is hereby abolished.

Executive Order Numbered Four hundred and one-A, dated the fifth of January, nineteen hundred
and fifty- one, is repealed and the Board of Tax Appeals created therein, abolished: Provided,
however, That all cases heretofore decided by the said Board of Tax Appeals and thence appealed
to the Supreme Court pursuant to Executive Order Numbered Four hundred one-A shall be decided
by the Supreme Court on the merits to all intents and purposes as if said Executive Order has been
duly enacted by the Congress: And, Provided, further, That all cases now pending in the said Board
of Tax Appeals shall be transferred to the Court of Tax Appeals and shall be heard and decided by
the latter to all intents and purposes as if they had been originally filed therein.

Any law or part of law, or any executive order, rule or regulation or part thereon, inconsistent with the
provisions of this Act is hereby repealed.

Section 22. Pending cases to be remanded to Court. - All cases involving disputed assessment of
Internal Revenue taxes or customs duties pending determination before the Court of First Instance
shall be certified and remanded by the respective clerk of court to the Court of Tax Appeals for final
disposition thereof.

Section 23. Separability Clause. - If any clause, sentence, paragraph or part of this act shall be
adjudged by any court of competent jurisdiction to be invalid, such judgment shall not affect, impair
or invalidate the remainder of this Act, but shall confined in its operations to the clause, sentence,
paragraph or part thereof directly involved in the controversy.

Section 24. This Act shall take effect upon its approval.

Approved: June 16, 1954