71

~epublic of tbe llbilippines

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FIRST DIVISION

MITSUBISHI MOTORS G.R. No. 209830

PHILIPPINES
CORPORATION, Present:
Petitioner,

- versus - SERENO, CJ, Chairperson,

LEONARDO-DE CASTRO,
BERSAMIN,
BUREAU OF CUSTOMS,
PEREZ, and
Respondent.
PERLAS-BERNABE, JJ

Promulgated:

JUN 1 7 2015
x------------------------------------------------------------------ ' xnJUel
~
______ _::______ x

DECISION

PERLAS-BERNABE, J.:

Assailed in this petition for review on certiorari 1 are the Resolutions

dated June 7, 2013 2 and November 4, 2013 3 of the Court of Appeals (CA) in
CA-G.R. CV No. 99594, which referred the records of the instant case to the
Court of Tax Appeals (CTA) for proper disposition of the appeal taken by
respondent Bureau of Customs (respondent).

The Facts

The instant case arose from a collection suit 4 for unpaid taxes and
customs duties in the aggregate amount of P46,844,385.00 filed by
respondent against petitioner Mitsubishi Motors Philippines Corporation

Rollo (G.R. No. 209830), pp. 10-51.

Id. at 58-61. Penned by Associate Justice Priscilla J. Baltazar-Padilla with Associate Justices Rosalinda
Asuncion-Vicente and Agnes Reyes-Carpio concurring.
Id. at 62-68.
See Complaint for Collection of Money with Damages filed on June 7, 2002; id. at 87-90.

r
Decision 2 G.R. No. 209830

(petitioner) before the Regional Trial Court of Manila, Branch 17 (RTC),

docketed as Civil Case No. 02-103763 (collection case).

Respondent alleged that from 1997 to 1998, petitioner was able to

secure tax credit certificates (TCCs) from various transportation companies;
after which, it made several importations and utilized said TCCs for the
payment of various customs duties and taxes in the aggregate amount of
46,844,385.00. 5 Believing the authenticity of the TCCs, respondent
allowed petitioner to use the same for the settlement of such customs duties
and taxes. However, a post-audit investigation of the Department of Finance
revealed that the TCCs were fraudulently secured with the use of fake
commercial and bank documents, and thus, respondent deemed that
petitioner never settled its taxes and customs duties pertaining to the
aforesaid importations.6 Thereafter, respondent demanded that petitioner pay
its unsettled tax and customs duties, but to no avail. Hence, it was
constrained to file the instant complaint.7

In its defense,8 petitioner maintained, inter alia, that it acquired the

TCCs from their original holders in good faith and that they were authentic,
and thus, their remittance to respondent should be considered as proper
settlement of the taxes and customs duties it incurred in connection with the
aforementioned importations.9

Initially, the RTC dismissed 10 the collection case due to the

continuous absences of respondent’s counsel during trial.11 On appeal to the
CA,12 and eventually the Court,13 the said case was reinstated and trial on the
merits continued before the RTC.14

5
Id. at 87-88.
6
Id. at 88.
7
See id. at 375-376.
8
See Answer with Compulsory Counterclaims filed on November 11, 2002; id. at 96-111.
9
Id. at 107-108.
10
See Order dated May 17, 2005 penned by Judge Eduardo B. Peralta, Jr.; id. at 253.
11
See id. at 16.
12
Respondent elevated the collection case before the CA, which was docketed as CA-G.R. SP No. 97301
entitled “Republic of the Philippines, represented by the Bureau of Customs v. Hon. Eduardo Peralta,
Jr., in his capacity as Presiding Judge of the Regional Trial Court, National Capital Judicial Regional,
Branch 17, Manila and Mitsubishi Motors Corporation.” In a Decision dated June 27, 2008, the CA
granted its petition and ordered the reinstatement of the collection case (see id. at 173-186. Penned by
Associate Justice Rebecca De Guia-Salvador with Associate Justices Vicente S.E. Veloso and
Apolinario D. Bruselas, Jr. concurring).
13
Petitioner filed a petition before the Court challenging the June 27, 2008 CA Decision, which was
docketed as G.R. No. 186106 entitled “Mitsubishi Motors Corporation v. Court of Appeals, former
Eleventh Division, and Republic of the Philippines, represented by the Bureau of Customs. In a
Resolution dated February 23, 2009, the Court, however, dismissed the petition (see rollo [G.R. No.
186106], p. 120).
14
See rollo (G.R. No. 209830), pp. 19-20.
Decision 3 G.R. No. 209830

After respondent’s presentation of evidence, petitioner filed a

Demurrer to Plaintiff’s Evidence 15 on February 10, 2012, essentially
contending that respondent failed to prove by clear and convincing evidence
that the TCCs were fraudulently procured, 16 and thus, prayed for the
dismissal of the complaint.17 In turn, respondent filed an Opposition18 dated
March 7, 2012 refuting petitioner’s contentions.

The RTC Ruling

In an Order 19 dated April 10, 2012, the RTC granted petitioner’s

Demurrer to Plaintiff’s Evidence, and accordingly, dismissed respondent’s
collection case on the ground of insufficiency of evidence.20 It found that
respondent had not shown any proof or substantial evidence of fraud or
conspiracy on the part of petitioner in the procurement of the TCCs.21 In this
connection, the RTC opined that fraud is never presumed and must be
established by clear and convincing evidence, which petitioner failed to do,
thus, necessitating the dismissal of the complaint.22

Respondent moved for reconsideration,23 which was, however, denied

in an Order24 dated August 3, 2012. Dissatisfied, it appealed25 to the CA.

The CA Ruling

In a Resolution26 dated June 7, 2013, the CA referred the records of

the collection case to the CTA for proper disposition of the appeal taken by
respondent. While the CA admitted that it had no jurisdiction to take
cognizance of respondent’s appeal, as jurisdiction is properly lodged with
the CTA, it nevertheless opted to relax procedural rules in not dismissing the
appeal outright.27 Instead, the CA deemed it appropriate to simply refer the
matter to the CTA, considering that the government stands to lose the
amount of 46,844,385.00 in taxes and customs duties which can then be
used for various public works and projects.28

15
Id. at 321-347.
16
Id. at 324.
17
Id. at 346.
18
Id. at 348-353.
19
Id. at 403-407. Penned by Acting Presiding Judge Ma. Theresa Dolores C. Gomez-Estoesta.
20
Id. at 407.
21
Id. at 406.
22
Id. at 406-407.
23
See motion for reconsideration dated May 7, 2012; id. at 354-359.
24
Id. at 408-409. Penned by Presiding Judge Felicitas O. Laron-Cacanindin.
25
See Notice of Appeal dated August 28, 2012; id. at 69-70.
26
Id. at 58-61.
27
Id. at 60.
28
Id. at 60-61.
Decision 4 G.R. No. 209830

Aggrieved, petitioner filed a motion for reconsideration29 on June 23,

2013, arguing that since the CA does not have jurisdiction over respondent’s
appeal, it cannot perform any action on it except to order its dismissal.30 The
said motion was, however, denied in a Resolution 31 dated November 4,
2013, hence, this petition.

The Issue Before the Court

The core issue for the Court’s resolution is whether or not the CA
correctly referred the records of the collection case to the CTA for proper
disposition of the appeal taken by respondent.

The Court’s Ruling

The petition is meritorious.

Jurisdiction is defined as the power and authority of a court to hear,

try, and decide a case.32 In order for the court or an adjudicative body to
have authority to dispose of the case on the merits, it must acquire, among
others, jurisdiction over the subject matter.33 It is axiomatic that jurisdiction
over the subject matter is the power to hear and determine the general class
to which the proceedings in question belong; it is conferred by law and not
by the consent or acquiescence of any or all of the parties or by erroneous
belief of the court that it exists.34 Thus, when a court has no jurisdiction over
the subject matter, the only power it has is to dismiss the action.35

Guided by the foregoing considerations and as will be explained

hereunder, the Court finds that the CA erred in referring the records of the
collection case to the CTA for proper disposition of the appeal taken by
respondent.

Section 7 of Republic Act No. (RA) 1125, 36 as amended by RA

9282,37 reads:

29
Dated June 21, 2013. Id. at 71-84.
30
Id. at 81.
31
Id. at 62-68.
32
Spouses Genato v. Viola, 625 Phil. 514, 527 (2010), citing Zamora v. CA, 262 Phil. 298, 304 (1990).
33
See id. at 527-528, citing Perkin Elmer Singapore Pte Ltd. v. Dakila Trading Corp., 556 Phil. 822, 836
(2007).
34
See Philippine Coconut Producers Federation, Inc. v. Republic, G.R. Nos. 177857-58, January 24,
2012, 663 SCRA 514, 569, citing Allied Domecq Philippines, Inc. v. Villon, 482 Phil. 894, 900 (2004).
35
Katon v. Palanca, Jr., 481 Phil. 168, 182 (2004), citing Zamora v. CA, supra note 31, at 305-306.
36
Entitled “AN ACT CREATING THE COURT OF TAX APPEALS” (June 16, 1954)
37
Entitled “AN ACT EXPANDING THE JURISDICTION OF THE COURT OF TAX APPEALS (CTA), ELEVATING
ITS RANK TO THE LEVEL OF A COLLEGIATE COURT WITH SPECIAL JURISDICTION AND ENLARGING ITS
MEMBERSHIP, AMENDING FOR THE PURPOSE CERTAIN SECTIONS OF REPUBLIC ACT NO. 1125, AS
AMENDED, OTHERWISE KNOWN AS THE LAW CREATING THE COURT OF TAX APPEALS, AND FOR OTHER
PURPOSES” (approved on March 30, 2004).
Decision 5 G.R. No. 209830

Sec. 7. Jurisdiction. – The CTA shall exercise:

xxxx

c. Jurisdiction over tax collection cases as herein provided:

xxxx

2. Exclusive appellate jurisdiction in tax collection cases:

a. Over appeals from the judgments, resolutions or orders

of the Regional Trial Courts in tax collection cases
originally decided by them in their respective territorial
jurisdiction.

xxxx

Similarly, Section 3, Rule 4 of the Revised Rules of the Court of Tax

Appeals, as amended,38 states:

Sec. 3. Cases within the jurisdiction of the Court in Divisions. –

The Court in Divisions shall exercise:

xxxx

c. Exclusive jurisdiction over tax collections cases, to wit:

xxxx

2. Appellate jurisdiction over appeals from the judgments,

resolutions or orders of the Regional Trial Courts in tax
collection cases originally decided by them within their
respective territorial jurisdiction.

Verily, the foregoing provisions explicitly provide that the CTA has
exclusive appellate jurisdiction over tax collection cases originally decided
by the RTC.

In the instant case, the CA has no jurisdiction over respondent’s

appeal; hence, it cannot perform any action on the same except to order its
dismissal pursuant to Section 2, Rule 5039 of the Rules of Court. Therefore,

38
A.M. No. 05-11-07-CTA, as amended per Supreme Court Resolution dated September 16, 2008, which
took effect on October 15, 2008.
39
Section 2, Rule 50 of the Rules of Court reads:
Sec. 2. Dismissal of improper appeal to the Court of Appeals. – An appeal under
Rule 41 taken from the Regional Trial Court to the Court of Appeals raising only
Decision 6 G.R. No. 209830

the act of the CA in referring respondent’s wrongful appeal before it to the

CTA under the guise of furthering the interests of substantial justice is
blatantly erroneous, and thus, stands to be corrected. In Anderson v. Ho,40
the Court held that the invocation of substantial justice is not a magic wand
that would readily dispel the application of procedural rules,41 viz.:

x x x procedural rules are designed to facilitate the adjudication of

cases. Courts and litigants alike are enjoined to abide strictly by the rules.
While in certain instances, we allow a relaxation in the application of
the rules, we never intend to forge a weapon for erring litigants to
violate the rules with impunity. The liberal interpretation and
application of rules apply only in proper cases of demonstrable merit
and under justifiable causes and circumstances. While it is true that
litigation is not a game of technicalities, it is equally true that every
case must be prosecuted in accordance with the prescribed procedure
to ensure an orderly and speedy administration of justice. Party
litigants and their counsels are well advised to abide by rather than flaunt,
procedural rules for these rules illumine the path of the law and rationalize
the pursuit of justice. 42 (Emphasis and underscoring supplied)

Finally, in view of respondent’s availment of a wrong mode of appeal

via notice of appeal stating that it was elevating the case to the CA – instead
of appealing by way of a petition for review to the CTA within thirty (30)
days from receipt of a copy of the RTC’s August 3, 2012 Order, as required
by Section 11 of RA 1125, as amended by Section 9 of RA 928243 – the

questions of law shall be dismissed, issues purely of law not being reviewable by said
court. Similarly, an appeal by notice of appeal instead of by petition for review from the
appellate judgment of a Regional Trial Court shall be dismissed.

An appeal erroneously taken to the Court of Appeals shall not be

transferred to the appropriate court but shall be dismissed outright. (Emphasis and
underscoring supplied)
40
G.R. No. 172590, January 7, 2013, 688 SCRA 8.
41
Ramirez v. People, G.R. No. 197832, October 2, 2013, 706 SCRA 667, 673.
42
Anderson v. Ho, supra note 39, at 21, citing Land Bank of the Philippines v. Hon. Natividad, 497 Phil.
738, 744-745 (2005).
43
The pertinent parts of Section 11 of RA 1125 as amended by Section 9 of RA 9282 read:

Sec. 11. Who May Appeal; Mode of Appeal; Effect of Appeal. – Any party
adversely affected by a decision, ruling or inaction of the Commissioner of Internal
Revenue, the Commissioner of Customs, the Secretary of Finance, the Secretary of Trade
and Industry or the Secretary of Agriculture or the Central Board of Assessment Appeals
or the Regional Trial Courts may file an appeal with the CTA within thirty (30)
days after the receipt of such decision or ruling or after the expiration of the period
fixed by law for action as referred to in Section 7(a) (2) herein.

Appeal shall be made by filing a petition for review under a procedure

analogous to that provided for under Rule 42 of the 1997 Rules of Civil Procedure with
the CTA within thirty (30) days from the receipt of the decision or ruling or in the case of
inaction as herein provided, from the expiration of the period fixed by law to act thereon.
A Division of the CTA shall hear the appeal: Provided, however, That with respect to
decisions or rulings of the Central Board of Assessment Appeals and the Regional
Trial Court in the exercise of its appellate jurisdiction appeal shall be made by filing
a petition for review under a procedure analogous to that provided for under Rule
43 of the 1997 Rules of Civil Procedure with the CTA, which shall hear the case en
banc.

x x x x (Emphases and underscoring supplied)

 Decision 7 G.R. No. 209830

Court is constrained to deem the RTC's dismissal of respondent's collection

case against petitioner final and executory. It is settled that the perfection of
an appeal in the manner and within the period set by law is not only
mandatory, but jurisdictional as well, and that failure to perfect an appeal
within the period fixed by law renders the judgment appealed from final and
executory. 44 The Court's pronouncement in Team Pacific Corporation v.
D aza45.1s mstructive
• •
on th"1s matter, to wit:
. 46

Although appeal is an essential part of our judicial process, it has been

held, time and again, that the right thereto is not a natural right or a part of
due process but is merely a statutory privilege. Thus, the perfection of an
appeal in the manner and within the period prescribed by law is not only
mandatory but also jurisdictional and failure of a party to conform to the
rules regarding appeal will render the judgment final and executory. Once
a decision attains finality, it becomes the law of the case irrespective of
whether the decision is erroneous or not and no court - not even the
Supreme Court - has the power to revise, review, change or alter the
same. The basic rule of finality of judgment is grounded on the
fundamental principle of public policy and sound practice that, at the risk
of occasional error, the judgment of courts and the award of quasi-judicial
agencies must become final at some definite date fixed by law.

WHEREFORE, the petition is GRANTED. Accordingly, the

Resolutions dated June 7, 2013 and November 4, 2013 of the Court of
Appeals (CA) in CA-G.R. CV No. 99594 are hereby REVERSED and SET
ASIDE. Accordingly, a new one is entered DISMISSING the appeal of
respondent Bureau of Customs to the Court of Appeals.

SO ORDERED.

ESTELA $E~S-BERNABE
Associate Justice

WE CONCUR:

MARIA LOURDES P.A. SERENO

Chief Justice
Chairperson

44
See Securities and Exchange Commission v. PICO? Resources, Inc., 588 Phil. 136, 154 (2008), citing
land Bank ofthe Philippines v. Ascot Holdings and Equities, Inc., 562 Phil. 974, 983-984 (2007).
45
G.R. No. 167732, July 11, 2012, 676 SCRA 82.
46
Id. at 95, citing Zamboanga Forest Managers Corp. v. New Pacific Timber & Supply Co., 647 Phil.
403, 415 (2010).
Decision 8 G.R. No. 209830

~~teuw
TERESITA J. LEONARDO-DE CASTRO
Associate Justice

EZ

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, I certify that

the conclusions in the above Decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Court's
Division.

MARIA LOURDES P.A. SERENO

Chief Justice