Republic Act No.

9282             March 30 2004 That when the required quorum cannot be constituted due to
any vacancy, disqualification, inhibition, disability, or any
Be it enacted by the Senate and House of Representatives of
other lawful cause, the Presiding Justice shall designate any
the Philippine Congress Assembled:
Justice of other Divisions of the Court to sit temporarily
Section 1. Section 1 of Republic Act No. 1125, as amended is therein.
hereby further amended to read as follows:
"The affirmative votes of four (4) members of the Court en
"SECTION 1. Court; Justices; Qualifications; Salary; Tenure. - banc or two (2) members of a Division, as the case may be,
There is hereby created a Court of Tax Appeals (CTA) which shall be necessary for the rendition of a decision or
shall be of the same level as the Court of Appeals, possessing resolution."
all the inherent powers of a Court of Justice, and shall consist
Section 3. Section 3 of the same Act is hereby amended to
of a Presiding Justice and five (5) Associate Justices. The
read as follows:
incumbent Presiding Judge and Associate Judges shall
continue in office and bear the new titles of Presiding Justice "SEC. 3. Clerk of Court; Division Clerks of Court; Appointment;
and Associate Justices. The Presiding Justice and the most Qualification; Compensation. - The CTA shall have a Clerk of
Senior Associate Justice shall serve as chairmen of the two (2) Court and three (3) Division Clerks of Court who shall be
Divisions. The additional three (3) Justices and succeeding appointed by the Supreme Court. No person shall be
members of the Court shall be appointed by the President appointed Clerk of Court or Division Clerk of Court unless he
upon nomination by the Judicial and Bar Council. The is duly authorized to practice law in the Philippines. The Clerk
Presiding Justice shall be so designated in his appointment, of Court and Division Clerks of Court shall exercise the same
and the Associate Justices shall have precedence according to powers and perform the same duties in regard to all matters
the date of their respective appointments, or when the within the Court's jurisdiction, as are exercised and
appointments of two (2) or more of them shall bear the same performed by the Clerk of Court and Division Clerks of Court
date, according to the order in which their appointments of the Court of Appeals, in so far as the same may be
were issued by the President. They shall have the same applicable or analogous; and in the exercise of those powers
qualifications, rank, category, salary, emoluments and other and the performance of those duties they shall be under the
privileges, be subject to the same inhibitions and direction of the Court. The Clerk of Court and the Division
disqualifications, and enjoy the same retirements and other Clerks of Court shall have the same rank, privileges, salary,
benefits as those provided for under existing laws for the emoluments, retirement and other benefits as those provided
Presiding Justice and Associate Justices of the Court of for the Clerk of Court and Division Clerks of Court of the Court
Appeals. of Appeals, respectively.'

"Whenever the salaries of the Presiding Justice and the Section 4. Section 4 of the same Act is hereby amended to
Associate Justices of the Court of Appeals are increased, such read as follows:
increases in salaries shall be deemed correspondingly
"SEC. 4. Other Subordinate Employees. - The Supreme Court
extended to and enjoyed by the Presiding Justice and
shall appoint all officials and employees of the CTA, in
Associate Justices of the CTA.
accordance with the Civil Service Law. The Supreme Court
"The Presiding Justice and Associate Justices shall hold office shall fix their salaries and prescribe their duties."
during good behavior, until they reach the age of seventy
Section 5. Section 5 of the same Act is hereby amended to
(70), or become incapacitated to discharge the duties of their
read as follows:
office, unless sooner removed for the same causes and in the
same manner provided by law for members of the judiciary of "SEC. 5. Disqualifications. - No Justice or other officer or
equivalent rank." employee of the CTA shall intervene, directly or indirectly, in
the management or control of any private enterprise which in
Section 2. Section 2 of the same Act is hereby amended to
any way may be affected by the functions of the Court.
read as follows:
Justices of the Court shall be disqualified from sitting in any
"SEC. 2. Sitting En Banc or Division; Quorum; Proceedings. - case on the same grounds provided under Rule one hundred
The CTA may sit en banc or in two (2) Divisions, each Division thirty-seven of the Rules of Court for the disqualification of
consisting of three (3) Justices. judicial officers. No person who has once served in the Court
in a permanent capacity, either as Presiding Justice or as
"Four (4) Justices shall constitute a quorum for sessions en
Associate Justice thereof, shall be qualified to practice as
banc and two (2) Justices for sessions of a Division: Provided,

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counsel before the Court for a period of one (1) year from his product, commodity or article, involving dumping and
retirement or resignation." countervailing duties under Section 301 and 302,
respectively, of the Tariff and Customs Code, and safeguard
Section 6. Section 6 of the same Act is hereby amended to
measures under Republic Act No. 8800, where either party
read as follows:
may appeal the decision to impose or not to impose said
"SEC. 6. Place of Office. - The CTA shall have its principal office duties.
in Metro Manila and shall hold hearings at such time and
"b. Jurisdiction over cases involving criminal offenses as
place as it may, by order in writing, designate."
herein provided:
Section 7. Section 7 of the same Act is hereby amended to
"1. Exclusive original jurisdiction over all criminal offenses
read as follows: "Sec. 7. Jurisdiction. - The CTA shall exercise:
arising from violations of the National Internal Revenue
"a. Exclusive appellate jurisdiction to review by appeal, as Code or Tariff and Customs Code and other laws
herein provided: administered by the Bureau of Internal Revenue or the
Bureau of Customs: Provided, however, That offenses or
"1. Decisions of the Commissioner of Internal Revenue in felonies mentioned in this paragraph where the principal
cases involving disputed assessments, refunds of internal amount of taxes and fees, exclusive of charges and penalties,
revenue taxes, fees or other charges, penalties in relation claimed is less than One million pesos (P1,000,000.00) or
thereto, or other matters arising under the National Internal where there is no specified amount claimed shall be tried by
Revenue or other laws administered by the Bureau of Internal the regular Courts and the jurisdiction of the CTA shall be
Revenue; appellate. Any provision of law or the Rules of Court to the
contrary notwithstanding, the criminal action and the
"2. Inaction by the Commissioner of Internal Revenue in cases
corresponding civil action for the recovery of civil liability for
involving disputed assessments, refunds of internal revenue
taxes and penalties shall at all times be simultaneously
taxes, fees or other charges, penalties in relations thereto, or
instituted with, and jointly determined in the same
other matters arising under the National Internal Revenue
proceeding by the CTA, the filing of the criminal action being
Code or other laws administered by the Bureau of Internal
deemed to necessarily carry with it the filing of the civil
Revenue, where the National Internal Revenue Code provides
action, and no right to reserve the filling of such civil action
a specific period of action, in which case the inaction shall be
separately from the criminal action will be recognized.
deemed a denial;
"2. Exclusive appellate jurisdiction in criminal offenses:
"3. Decisions, orders or resolutions of the Regional Trial
Courts in local tax cases originally decided or resolved by "a. Over appeals from the judgments, resolutions or orders of
them in the exercise of their original or appellate jurisdiction; the Regional Trial Courts in tax cases originally decided by
them, in their respected territorial jurisdiction.
"4. Decisions of the Commissioner of Customs in cases
involving liability for customs duties, fees or other money "b. Over petitions for review of the judgments, resolutions or
charges, seizure, detention or release of property affected, orders of the Regional Trial Courts in the exercise of their
fines, forfeitures or other penalties in relation thereto, or appellate jurisdiction over tax cases originally decided by the
other matters arising under the Customs Law or other laws Metropolitan Trial Courts, Municipal Trial Courts and
administered by the Bureau of Customs; Municipal Circuit Trial Courts in their respective jurisdiction.
"5. Decisions of the Central Board of Assessment Appeals in "c. Jurisdiction over tax collection cases as herein provided:
the exercise of its appellate jurisdiction over cases involving
the assessment and taxation of real property originally "1. Exclusive original jurisdiction in tax collection cases
decided by the provincial or city board of assessment appeals; involving final and executory assessments for taxes, fees,
charges and penalties: Provided, however, That collection
"6. Decisions of the Secretary of Finance on customs cases cases where the principal amount of taxes and fees, exclusive
elevated to him automatically for review from decisions of of charges and penalties, claimed is less than One million
the Commissioner of Customs which are adverse to the pesos (P1,000,000.00) shall be tried by the proper Municipal
Government under Section 2315 of the Tariff and Customs Trial Court, Metropolitan Trial Court and Regional Trial Court.
Code;
"2. Exclusive appellate jurisdiction in tax collection cases:
"7. Decisions of the Secretary of Trade and Industry, in the
case of nonagricultural product, commodity or article, and
the Secretary of Agriculture in the case of agricultural
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"a. Over appeals from the judgments, resolutions or orders of decision of a Division of the CTA may file a motion for
the Regional Trial Courts in tax collection cases originally reconsideration of new trial before the same Division of the
decided by them, in their respective territorial jurisdiction. CTA within fifteens (15) days from notice thereof: Provide,
however, That in criminal cases, the general rule applicable in
"b. Over petitions for review of the judgments, resolutions or
regular Courts on matters of prosecution and appeal shall
orders of the Regional Trial Courts in the Exercise of their
likewise apply.
appellate jurisdiction over tax collection cases originally
decided by the Metropolitan Trial Courts, Municipal Trial "No appeal taken to the CTA from the decision of the
Courts and Municipal Circuit Trial Courts, in their respective Commissioner of Internal Revenue or the Commissioner of
jurisdiction." Customs or the Regional Trial Court, provincial, city or
municipal treasurer or the Secretary of Finance, the Secretary
Section 8. Section 10 of the same Act is hereby amended to
of Trade and Industry and Secretary of Agriculture, as the
read as follows:
case may be shall suspend the payment, levy, distraint,
"SEC. 10. Power to Administer Oaths; Issue Subpoena; Punish and/or sale of any property of the taxpayer for the
for Contempt. - The Court shall have the power to administer satisfaction of his tax liability as provided by existing law:
oaths, receive evidence, summon witnesses by subpoena Provided, however, That when in the opinion of the Court the
duces tecum, subject in all respects to the same restrictions collection by the aforementioned government agencies may
and qualifications as applied in judicial proceedings of a jeopardize the interest of the Government and/or the
similar nature. The Court shall, in accordance with Rule taxpayer the Court any stage of the proceeding may suspend
seventy-one of the Rules of Court, have the power to punish the said collection and require the taxpayer either to deposit
for contempt for the same causes, under the same procedure the amount claimed or to file a surety bond for not more than
and with the same penalties provided therein." double the amount with the Court.

Section 9. Section 11 of the same Act is hereby amended to "In criminal and collection cases covered respectively by
read as follows: Section 7(b) and (c) of this Act, the Government may directly
file the said cases with the CTA covering amounts within its
"SEC. 11. Who May Appeal; Mode of Appeal; Effect of Appeal. exclusive and original jurisdiction."
- Any party adversely affected by a decision, ruling or inaction
of the Commissioner of Internal Revenue, the Commissioner Section 10. Section 13 of the same Act is hereby amended to
of Customs, the Secretary of Finance, the Secretary of Trade read as follows:
and Industry or the Secretary of Agriculture or the Central
"SEC. 13. Decision, Maximum Period for Termination of Cases.
Board of Assessment Appeals or the Regional Trial Courts
- Cases brought before the Court shall be decided in
may file an appeal with the CTA within thirty (30) days after
accordance with Section 15, paragraph (1), Article VIII
the receipt of such decision or ruling or after the expiration of
(Judicial Department) of the 1987 Constitution. Decisions of
the period fixed by law for action as referred to in Section
the Court shall be in writing, stating clearly and distinctly the
7(a)(2) herein.
facts and the law on which they are based, and signed by the
"Appeal shall be made by filing a petition for review under a Justices concurring therein. The Court shall provide for the
procedure analogous to that provided for under Rule 42 of publication of its decision in the Official Gazette in such form
the 1997 Rules of Civil Procedure with the CTA within thirty and manner as may best be adopted for public information
(30) days from the receipt of the decision or ruling or in the and use.
case of inaction as herein provided, from the expiration of the
"The Justices of the Court shall each certify on their
period fixed by law to act thereon. A Division of the CTA shall
applications for leave, and upon salary vouchers presented by
hear the appeal: Provided, however, That with respect to
them for payment, or upon the payrolls under which their
decisions or rulings of the Central Board of Assessment
salaries are paid, that all proceedings, petitions and motions
Appeals and the Regional Trial Court in the exercise of its
which have been submitted to the Court for determination or
appellate jurisdiction appeal shall be made by filing a petition
decision for a period required by the law or the Constitution,
for review under a procedure analogous to that provided for
as the case may be, have been determined or decided by the
under rule 43 of the 1997 Rules of Civil Procedure with the
Court on or before the date of making the certificate, and no
CTA, which shall hear the case en banc.
leave shall be granted and no salary shall be paid without
"All other cases involving rulings, orders or decisions filed such certificate."
with the CTA as provided for in Section 7 shall be raffled to its
Section 11. Section 18 of the same Act is hereby amended as
Divisions. A party adversely affected by a ruling, order or
follows:
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"SEC. 18. Appeal to the Court of Tax Appeals En Banc. - No Section 18. Separability Clause. - If for any
civil proceeding involving matter arising under the National
reason, any section or provision of this Act shall be declared
Internal Revenue Code, the Tariff and Customs Code or the
unconstitutional or invalid, the other parts thereof not
Local Government Code shall be maintained, except as herein
affected thereby shall remain valid.
provided, until and unless an appeal has been previously filed
with the CTA and disposed of in accordance with the Section 19. Effectivity Clause - This Act shall take effect after
provisions of this Act. fifteen (15) days following its publication in at least (2)
newspapers of general circulation.
"A party adversely affected by a resolution of a Division of the
CTA on a motion for reconsideration or new trial, may file a NATIONAL INTERNAL REVENUE CODE OF 1997
petition for review with the CTA en banc."
ORGANIZATION AND FUNCTION OF THE BUREAU OF
"SEC. 19. Review by Certiorari. - A party adversely affected by INTERNAL REVENUE
a decision or ruling of the CTA en banc may file with the (As Last Amended by RA 10963) [1]
Supreme Court a verified petition for review on certiorari
pursuant to Rule 45 of the 1997 Rules of Civil Procedure." SEC. 1. Title of the Code. - This Code shall be known as the
National Internal Revenue Code of 1997. [2]
Section 13. Distraint of Personal Property and/or Levy on Real
Property. - Upon the issuance of any ruling, order or decision SEC. 2. Powers and Duties of the Bureau of Internal
by the CTA favorable to the national government, the CTA Revenue. - The Bureau of Internal Revenue shall be under the
shall issue an order authorizing the Bureau of Internal supervision and control of the Department of Finance and its
Revenue, through the Commissioner to seize and distraint powers and duties shall comprehend the assessment and
any goods, chattels, or effects, and the personal property, collection of all national internal revenue taxes, fees, and
including stocks and other securities, debts, credits, bank charges, and the enforcement of all forfeitures, penalties, and
accounts, and interests in and rights to personal property fines connected therewith, including the execution of
and/or levy the real property of such persons in sufficient judgments in all cases decided in its favor by the Court of Tax
quantity to satisfy the tax or charge together with any Appeals and the ordinary courts. The Bureau shall give effect
increment thereto incident to delinquency. This remedy shall to and administer the supervisory and police powers
not be exclusive and shall not preclude the Court from conferred to it by this Code or other laws.
availing of other means under the Rules of Court.
SEC. 3. Chief Officials of the Bureau of Internal Revenue. -
Section 14. Retention of Personnel; Security of Tenure; The Bureau of Internal Revenue shall have a chief to be
Upgrading of Positions and Salaries. - All existing permanent known as Commissioner of Internal Revenue, hereinafter
personnel of the CTA shall not be adversely affected by this referred to as the Commissioner, and four (4) assistant chiefs
Act. They shall continue in office and shall not be removed or to be known as Deputy Commissioners.
separated from the service except for cause as provided for
SEC. 4. Power of the Commissioner to Interpret Tax Laws
by existing laws. Further, the present positions and salaries of
and to Decide Tax Cases. - The power to interpret the
personnel shall be upgraded to the level of their counterparts
provisions of this Code and other tax laws shall be under the
in the Court of Appeals.
exclusive and original jurisdiction of the Commissioner,
Section 15. Transitory Provisions. - In consonance with the subject to review by the Secretary of Finance.
above provision, the incumbent Presiding Judge and
The power to decide disputed assessments, refunds of
Associate Judges shall comprise a Division pending the
internal revenue taxes, fees or other charges, penalties
constitution of the entire Court.
imposed in relation thereto, or other matters arising under
Section 16. Appropriations. - The amount necessary to carry this Code or other laws or portions thereof administered by
out the provisions of this Act shall be included in the General the Bureau of Internal Revenue is vested in the
Appropriations Act of the year following its enactment into Commissioner, subject to the exclusive appellate jurisdiction
law and thereafter. of the Court of Tax Appeals. [3]

Section 17. Repealing Clause. - All laws, executive orders, SEC. 5. Power of the Commissioner to Obtain Information,
executive issuances or letter of instructions, or any part and to Summon, Examine, and Take Testimony of Persons. -
thereof, inconsistent with or contrary to the provisions of this In ascertaining the correctness of any return, or in making a
Act are hereby deemed repealed, amended or modified return when none has been made, or in determining the
accordingly. liability of any person for any internal revenue tax, or in

4
collecting any such liability, or in evaluating tax compliance, SEC. 6. Power of the Commissioner to Make Assessments
the Commissioner is authorized: and Prescribe Additional Requirements for Tax
Administration and Enforcement. -
(A) To examine any book, paper, record, or other data which
may be relevant or material to such inquiry; (A) Examination of Return and Determination of Tax
Due. After a return has been filed as required under the
(B) To obtain on a regular basis from any person other than
provisions of this Code, the Commissioner or his duly
the person whose internal revenue tax liability is subject to
authorized representative may authorize the examination of
audit or investigation, or from any office or officer of the
any taxpayer and the assessment of the correct amount of
national and local governments, government agencies and
tax, notwithstanding any law requiring the prior
instrumentalities, including the Bangko Sentral ng Pilipinas
authorization of any government agency or
and government-owned or -controlled corporations, any
instrumentality [5]: Provided, however, That failure to file a
information such as, but not limited to, costs and volume of
return shall not prevent the Commissioner from authorizing
production, receipts or sales and gross incomes of taxpayers,
the examination of any taxpayer.
and the names, addresses, and financial statements of
corporations, mutual fund companies, insurance companies, The tax or any deficiency tax so assessed shall be paid upon
regional operating headquarters of multinational companies, notice and demand from the Commissioner or from his duly
joint accounts, associations, joint ventures of consortia and authorized representative.
registered partnerships, and their members; Provided, That
Any return, statement of declaration filed in any office
the Cooperative Development Authority shall submit to the
authorized to receive the same shall not be withdrawn:
Bureau a tax incentive report, which shall include information
Provided, That within three (3) years from the date of such
on the income tax, value added tax, and other tax incentives
filing, the same may be modified, changed, or amended:
availed of by cooperatives registered and enjoying incentives
Provided, further, That no notice for audit or investigation of
under Republic Act No. 6938, as amended: Provided, further,
such return, statement or declaration has in the meantime
That the information submitted by the Cooperative
been actually served upon the taxpayer.
Development Authority to the Bureau shall be submitted to
the Department of Finance and shall be included in the (B) Failure to Submit Required Returns, Statements, Reports
database created under Republic Act No. 10708, otherwise and other Documents. - When a report required by law as a
known as “The Tax Incentives Management and basis for the assessment of any national internal revenue tax
Transparency Act (TIMTA).” [59] shall not be forthcoming within the time fixed by laws or rules
and regulations or when there is reason to believe that any
(C) To summon the person liable for tax or required to file a
such report is false, incomplete or erroneous, the
return, or any officer or employee of such person, or any
Commissioner shall assess the proper tax on the best
person having possession, custody, or care of the books of
evidence obtainable. 
accounts and other accounting records containing entries
relating to the business of the person liable for tax, or any In case a person fails to file a required return or other
other person, to appear before the Commissioner or his duly document at the time prescribed by law, or willfully or
authorized representative at a time and place specified in the otherwise files a false or fraudulent return or other
summons and to produce such books, papers, records, or document, the Commissioner shall make or amend the return
other data, and to give testimony; from his own knowledge and from such information as he can
obtain through testimony or otherwise, which shall be prima
(D) To take such testimony of the person concerned, under
facie correct and sufficient for all legal purposes.
oath, as may be relevant or material to such inquiry; and
(C) Authority to Conduct Inventory-taking, Surveillance and
(E) To cause revenue officers and employees to make a
to Prescribe Presumptive Gross Sales and Receipts. - The
canvass from time to time of any revenue district or region
Commissioner may, at any time during the taxable year, order
and inquire after and concerning all persons therein who may
inventory-taking of goods of any taxpayer as a basis for
be liable to pay any internal revenue tax, and all persons
determining his internal revenue tax liabilities, or may place
owning or having the care, management or possession of any
the business operations of any person, natural or juridical,
object with respect to which a tax is imposed.
under observation or surveillance if there is reason to believe
The provisions of the foregoing paragraphs notwithstanding, that such person is not declaring his correct income, sales or
nothing in this Section shall be construed as granting the receipts for internal revenue tax purposes. The findings may
Commissioner the authority to inquire into bank deposits be used as the basis for assessing the taxes for the other
other than as provided for in Section 6(F) of this Code.
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months or quarters of the same or different taxable years and including the records of consultations done, shall be public
such assessment shall be deemed prima facie correct. records open to the inquiry of any taxpayer. [5] For purposes
of computing any internal revenue tax, the value of the
When it is found that a person has failed to issue receipts and
property shall be, whichever is the higher of:
invoices in violation of the requirements of Sections 113 and
237 of this Code, or when there is reason to believe that the (1) The fair market value as determined by the Commissioner;
books of accounts or other records do not correctly reflect or
the declarations made or to be made in a return required to
(2) The fair market value as shown in the schedule of values
be filed under the provisions of this Code, the Commissioner,
of the Provincial and City Assessors.
after taking into account the sales, receipts, income or other
taxable base of other persons engaged in similar businesses (F) Authority of the Commissioner to Inquire into Bank
under similar situations or circumstances or after considering Deposit Accounts  and  Other Related information held by
other relevant information may prescribe a minimum amount Financial Institutions. [6] - Notwithstanding any contrary
of such gross receipts, sales and taxable base, and such provision of Republic Act No. 1405, Republic Act No. 6426,
amount so prescribed shall be prima facie correct for otherwise known as the Foreign Currency Deposit Act of the
purposes of determining the internal revenue tax liabilities of Philippines, and other general or special laws, the
such person. Commissioner is hereby authorized to inquire into the bank
deposits and other related information held by financial
(D) Authority to Terminate Taxable Period. - When it shall
institutions of:
come to the knowledge of the Commissioner that a taxpayer
is retiring from business subject to tax, or is intending to (1) A decedent to determine his gross estate; and
leave the Philippines or to remove his property therefrom or
to hide or conceal his property, or is performing any act (2) Any taxpayer who has filed an application for compromise
tending to obstruct the proceedings for the collection of the of his tax liability under Section 204(A)(2) of this Code by
tax for the past or current quarter or year or to render the reason of financial incapacity to pay his tax liability.
same totally or partly ineffective unless such proceedings are
In case a taxpayer files an application to compromise the
begun immediately, the Commissioner shall declare the tax
payment of his tax liabilities on his claim that his financial
period of such taxpayer terminated at any time and shall send
position demonstrates a clear inability to pay the tax
the taxpayer a notice of such decision, together with a
assessed, his application shall not be considered unless and
request for the immediate payment of the tax for the period
until he waives in writing his privilege under Republic Act No.
so declared terminated and the tax for the preceding year or
1405, Republic Act No. 6426, otherwise known as the Foreign
quarter, or such portion thereof as may be unpaid, and said
Currency Deposit Act of the Philippines, or under other
taxes shall be due and payable immediately and shall be
general or special laws, and such waiver shall constitute the
subject to all the penalties hereafter prescribed, unless paid
authority of the Commissioner to inquire into the bank
within the time fixed in the demand made by the
deposits of the taxpayer.
Commissioner.
(3) A specific taxpayer or taxpayers subject of a request for
(E) Authority of the Commissioner to Prescribe Real Property
the supply of tax information from a foreign tax authority
Values. –The Commissioner is hereby authorized to divide the
pursuant to an international convention or agreement on tax
Philippines into different zones or areas and shall,
matters to which the Philippines is a signatory or a party of:
upon mandatory [5] consultation with competent appraisers
Provided, That the information obtained from the banks and
both from the private and public sectors, and with prior
other financial institutions may be used by the Bureau of
notice to affected taxpayers [5], determine the fair market
Internal Revenue for tax assessment, verification, audit and
value of real properties located in each zone or area, subject
enforcement purposes.
to automatic adjustment once every three (3) years through
rules and regulations issued by the Secretary of Finance In case of a request from a foreign tax authority for tax
based on the current Philippine valuation standards: information held by banks and financial institutions, the
Provided, That no adjustment in zonal valuation shall be valid exchange of information shall be done in a secure manner to
unless published in a newspaper of general circulation in the ensure confidentiality thereof under such rules and
province, city or municipality concerned, or in the absence regulations as may be promulgated by the Secretary of
thereof, shall be posted in the provincial capitol, city or Finance, upon recommendation of the Commissioner.
municipal hall and in two (2) other conspicuous public places
therein: Provided, further, That the basis of any valuation, The Commissioner shall provide the tax information obtained
from banks and financial institutions pursuant to a
6
convention or agreement upon request of the foreign tax individuals and general professional partnerships and their
authority when such requesting foreign tax authority has representatives who prepare and file tax returns, statements,
provided the following information to demonstrate the reports, protests, and other papers with or who appear
foreseeable relevance of the information to the request: before, the Bureau for taxpayers. Within one hundred twenty
(120) days from January 1, 1998, the Commissioner shall
(a) The identity of the person under examination or
create national and regional accreditation boards, the
investigation;
members of which shall serve for three (3) years, and shall
(b) A statement of the information being sought, including its designate from among the senior officials of the Bureau, one
nature and the form in which the said foreign tax authority (1) chairman and two (2) members for each board, subject to
prefers to receive the information from the Commissioner; such rules and regulations as the Secretary of Finance shall
promulgate upon the recommendation of the Commissioner.
(c) The tax purpose for which the information is being sought;
Individuals and general professional partnerships and their
(d) Grounds for believing that the information requested is representatives who are denied accreditation by the
held in the Philippines or is in the possession or control of a Commissioner and/or the national and regional accreditation
person within the jurisdiction of the Philippines; boards may appeal such denial to the Secretary of Finance,
who shall rule on the appeal within sixty (60) days from
(e) To the extent known, the name and address of any person
receipt of such appeal. Failure of the Secretary of Finance to
believed to be in possession of the requested information;
rule on the Appeal within the prescribed period shall be
(f) A statement that the request is in conformity with the law deemed as approval of the application for accreditation of
and administrative practices of the said foreign tax authority, the appellant.
such that if the requested information was within the
(H) Authority of the Commissioner to Prescribe Additional
jurisdiction of the said foreign tax authority then it would be
Procedural or Documentary Requirements. - The
able to obtain the information under its laws or in the normal
Commissioner may prescribe the manner of compliance with
course of administrative practice and that it is in conformity
any documentary or procedural requirement in connection
with a convention or international agreement; and
with the submission or preparation of financial statements
(g) A statement that the requesting foreign tax authority has accompanying the tax returns.
exhausted all means available in its own territory to obtain
SEC. 7. Authority of the Commissioner to Delegate Power. -
the information, except those that would give rise to
The Commissioner may delegate the powers vested in him
disproportionate difficulties.
under the pertinent provisions of this Code to any or such
The Commissioner shall forward the information as promptly subordinate officials with the rank equivalent to a division
as possible to the requesting foreign tax authority. To ensure chief or higher, subject to such limitations and restrictions as
a prompt response, the Commissioner shall confirm receipt of may be imposed under rules and regulations to be
a request in writing to the requesting tax authority and shall promulgated by the Secretary of Finance, upon
notify the latter of deficiencies in the request, if any, within recommendation of the Commissioner: Provided, however,
sixty (60) days from receipt of the request. That the following powers of the Commissioner shall not be
delegated:
If the Commissioner is unable to obtain and provide the
information within ninety (90) days from receipt of the (a) The power to recommend the promulgation of rules and
request, due to obstacles encountered in furnishing the regulations by the Secretary of Finance;
information or when the bank or financial institution refuses
(b) The power to issue rulings of first impression or to
to furnish the information, he shall immediately inform the
reverse, revoke or modify any existing ruling of the Bureau;
requesting tax authority of the same, explaining the nature of
the obstacles encountered or the reasons for refusal. (c) The power to compromise or abate, under Sec. 204 (A)
and (B) of this Code, any tax liability: Provided, however, That
The term “foreign tax authority,” as used herein, shall refer
assessments issued by the regional offices involving basic
to the tax authority or tax administration of the requesting
deficiency taxes of Five hundred thousand pesos (P500,000)
State under the tax treaty or convention to which the
or less, and minor criminal violations, as may be determined
Philippines is a signatory or a party of.
by rules and regulations to be promulgated by the Secretary
(G) Authority to Accredit and Register Tax Agents. - The of finance, upon recommendation of the Commissioner,
Commissioner shall accredit and register, based on their discovered by regional and district officials, may be
professional competence, integrity and moral fitness, compromised by a regional evaluation board which shall be
7
composed of the Regional Director as Chairman, the Assistant these districts shall be under the supervision of a Revenue
Regional Director, the heads of the Legal, Assessment and District Officer.
Collection Divisions and the Revenue District Officer having
SEC. 10. Revenue Regional Director. - Under rules and
jurisdiction over the taxpayer, as members; and
regulations, policies and standards formulated by the
(d) The power to assign or reassign internal revenue officers Commissioner, with the approval of the Secretary of Finance,
to establishments where articles subject to excise tax are the Revenue Regional director shall, within the region and
produced or kept. district offices under his jurisdiction, among others: 

SEC. 8. Duty of the Commissioner to Ensure the Provision (a) Implement laws, policies, plans, programs, rules and
and Distribution of Forms, Receipts, Certificates, and regulations of the department or agencies in the regional
Appliances, and the Acknowledgment of Payment of area;
Taxes. [7] (b) Administer and enforce internal revenue laws, and rules
and regulations, including the assessment and collection of all
(A) Provision and Distribution to Proper-Officials. – Any law
internal revenue taxes, charges and fees;
to the contrary notwithstanding, it shall be the duty of the
(c) Issue Letters of authority for the examination of taxpayers
Commissioner, among other things, to prescribe, provide, and
within the region;
distribute to the proper officials the requisite licenses;
(d) Provide economical, efficient and effective service to the
internal revenue stamps; unique, secure and non-removable
people in the area;
identification markings (hereafter called unique identification
(e) Coordinate with regional offices or other departments,
markings), such as codes or stamps, be affixed to or form part
bureaus and agencies in the area;
of all unit packets and packages and any outside packaging of
(f) Coordinate with local government units in the area;
cigarettes and bottles of distilled spirits; labels and other
(g) Exercise control and supervision over the officers and
forms; certificates; bonds; records; invoices; books; receipts;
employees within the region; and
instruments; appliances and apparatus used in administering
(h) Perform such other functions as may be provided by law
the laws falling within the jurisdiction of the Bureau. For this
and as may be delegated by the Commissioner.
purpose, internal revenue stamps, or other markings and
labels shall be caused by the Commissioner to be printed with
SEC. 11. Duties of Revenue District Officers and Other
adequate security features.
Internal Revenue Officers. - It shall be the duty of every
Internal revenue stamps, whether of a bar code or fuson Revenue District Officer or other internal revenue officers and
design, or other markings shall be firmly and conspicuously employees to ensure that all laws, and rules and regulations
affixed or printed on each pack of cigars and cigarettes and affecting national internal revenue are faithfully executed and
bottles of distilled spirits subject to excise tax in the manner complied with, and to aid in the prevention, detection and
and form as prescribed by the Commissioner, upon approval punishment of frauds of delinquencies in connection
of the Secretary of Finance. therewith.

To further improve tax administration, cigarette and alcohol It shall be the duty of every Revenue District Officer to
manufacturers shall be required to install automated volume- examine the efficiency of all officers and employees of the
counters of packs and bottles to deter over-removals and Bureau of Internal Revenue under his supervision, and to
misdeclaration of removals. report in writing to the Commissioner, through the Regional
Director, any neglect of duty, incompetency, delinquency, or
(B) Receipts for Payment Mode. – It shall be the duty of the malfeasance in office of any internal revenue officer of which
Commissioner or his duly authorized representative or an he may obtain knowledge, with a statement of all the facts
authorized agent bank to whom any payment of any tax is and any evidence sustaining each case.
made under the provisions of this Code to acknowledge the
payment of such tax, expressing the amount paid and the SEC. 12. Agents and Deputies for Collection of National
particular account for which such payment was made in a Internal Revenue Taxes. - The following are hereby
form and manner prescribed therefor by the Commissioner. constituted agents of the Commissioner:

SEC. 9. Internal Revenue Districts. - With the approval of the a) The Commissioner of Customs and his subordinates with
Secretary of Finance, the Commissioner shall divide the respect to the collection of national internal revenue taxes on
Philippines into such number of revenue districts as may from imported goods;
time to time be required for administrative purposes. Each of
b) The head of the appropriate government office and his
subordinates with respect to the collection of energy tax; and
8
c) Banks duly accredited by the Commissioner with respect to rules and regulations to be prescribed by the Secretary of
receipt of payments internal revenue taxes authorized to be Finance, upon recommendation of the Commissioner.
made thru banks.
SEC. 17. Assignment of Internal Revenue Officers and Other
Any officer or employee of an authorized agent bank assigned Employees to Other Duties. - The Commissioner may, subject
to receive internal revenue tax payments and transmit tax to the provisions of Section 16 and the laws on civil service, as
returns or documents to the Bureau of Internal Revenue shall well as the rules and regulations to be prescribed by the
be subject to the same sanctions and penalties prescribed in Secretary of Finance upon the recommendation of the
Sections 269 and 270 of this Code. Commissioner, assign or reassign internal revenue officers
and employees of the Bureau of Internal Revenue, without
SEC. 13. Authority of a Revenue Officer. - Subject to the rules
change in their official rank and salary, to other or special
and regulations to be prescribed by the Secretary of Finance,
duties connected with the enforcement or administration of
upon recommendation of the Commissioner, a Revenue
the revenue laws as the exigencies of the service may
Officer assigned to perform assessment functions in any
require: Provided, That internal revenue officers assigned to
district may, pursuant to a Letter of Authority issued by the
perform assessment or collection function shall not remain in
Revenue Regional Director, examine taxpayers within the
the same assignment for more than three (3) years; Provided,
jurisdiction of the district in order to collect the correct
further, That assignment of internal revenue officers and
amount of tax, or to recommend the assessment of any
employees of the Bureau to special duties shall not exceed
deficiency tax due in the same manner that the said acts
one (1) year.
could have been performed by the Revenue Regional Director
himself. SEC. 18. Reports of Violation of Laws. - When an internal
revenue officer discovers evidence of a violation of this Code
SEC. 14. Authority of Officers to Administer Oaths and Take
or of any law, rule or regulations administered by the Bureau
Testimony. - The Commissioner, Deputy Commissioners,
of Internal Revenue of such character as to warrant the
Service Chiefs, Assistant Service Chiefs, Revenue Regional
institution of criminal proceedings, he shall immediately
Directors, Assistant Revenue Regional Directors, Chiefs and
report the facts to the Commissioner through his immediate
Assistant Chiefs of Divisions, Revenue District Officers, special
superior, giving the name and address of the offender and
deputies of the Commissioner, internal revenue officers and
the names of the witnesses if possible: Provided, That in
any other employee of the Bureau thereunto especially
urgent cases, the Revenue Regional director or Revenue
deputized by the Commissioner shall have the power to
District Officer, as the case may be, may send the report to
administer oaths and to take testimony in any official matter
the corresponding prosecuting officer in the latter case, a
or investigation conducted by them regarding matters within
copy of his report shall be sent to the Commissioner.
the jurisdiction of the Bureau.
SEC. 19. Contents of Commissioner's Annual Report. - The
SEC. 15. Authority of Internal Revenue Officers to Make
Annual Report of the Commissioner shall contain detailed
Arrests and Seizures. - The Commissioner, the Deputy
statements of the collections of the Bureau with
Commissioners, the Revenue Regional Directors, the Revenue
specifications of the sources of revenue by type of tax, by
District Officers and other internal revenue officers shall have
manner of payment, by revenue region and by industry group
authority to make arrests and seizures for the violation of any
and its disbursements by classes of expenditures.
penal law, rule or regulation administered by the Bureau of
Internal Revenue. Any person so arrested shall be forthwith In case the actual collection exceeds or falls short of target as
brought before a court, there to be dealt with according to set in the annual national budget by fifteen percent (15%) or
law. more, the Commissioner shall explain the reason for such
excess or shortfall.
SEC. 16. Assignment of Internal Revenue Officers Involved in
Excise Tax Functions to Establishments Where Articles SEC. 20. Submission of Report and Pertinent Information by
subject to Excise Tax are Produced or Kept. - The the Commissioner. -
Commissioner shall employ, assign, or reassign internal
(A) Submission of Pertinent Information to Congress. - The
revenue officers involved in excise tax functions, as often as
provision of Section 270 of this Code to the contrary
the exigencies of the revenue service may require, to
notwithstanding, the Commissioner shall, upon request of
establishments or places where articles subject to excise tax
Congress and in aid of legislation, furnish its appropriate
are produced or kept: Provided, That an internal revenue
Committee pertinent information including but not limited to:
officer assigned to any such establishment shall in no case
industry audits, collection performance data, status reports in
stay in his assignment for more than two (2) years, subject to
criminal actions initiated against persons and taxpayer's
9
returns: Provided, however, That any return or return beyond the period prescribed by law, the three (3)-year
information which can be associated with, or otherwise period shall be counted from the day the return was filed. For
identify, directly or indirectly, a particular taxpayer shall be purposes of this Section, a return filed before the last day
furnished the appropriate Committee of Congress only when prescribed by law for the filing thereof shall be considered as
sitting in Executive Session Unless such taxpayer otherwise filed on such last day.
consents in writing to such disclosure.
SEC. 204. Authority of the Commissioner to Compromise,
(B) Submission of Tax-Related Information to the Abate and Refund or Credit Taxes. –
Department of Finance. - The Commissioner shall, upon the
The Commissioner may –
order of the Secretary of Finance specifically identifying the
needed information and justification for such order in relation (A) Compromise the payment of any internal revenue tax,
to the grant of incentives under Title XIII, furnish the when:
Secretary pertinent information on the entities receiving
incentives under this Code: Provided, however, That the (1) A reasonable doubt as to the validity of the claim against
Secretary and the relevant officers handling such specific the taxpayer exists; or
information shall be covered by the provisions of Section 270
(2) The financial position of the taxpayer demonstrates a
unless the taxpayer consents in writing to such disclosure. [8]
clear inability to pay the assessed tax.
(C) Report to Oversight Committee. - The Commissioner shall,
The compromise settlement of any tax liability shall be
with reference to Section 204 of this Code, submit to the
subject to the following minimum amounts:
Oversight Committee referred to in Section 290 hereof,
through the Chairpersons[9] of the Committee on Ways and For cases of financial incapacity, a minimum compromise rate
Means of the Senate and House of Representatives, a report equivalent to ten percent (10%) of the basic assessed tax; and
on the exercise of his powers pursuant to the said section,
every six (6) months of each calendar year. For other cases, a minimum compromise rate equivalent to
forty percent (40%) of the basic assessed tax.
SEC. 21. Sources of Revenue. - The following taxes, fees and
charges are deemed to be national internal revenue taxes: Where the basic tax involved exceeds One million pesos
(P1,000.000) or where the settlement offered is less than the
(a) Income tax; prescribed minimum rates, the compromise shall be subject
(b) Estate and donor's taxes; to the approval of the Evaluation Board which shall be
(c) Value-added tax; composed of the Commissioner and the four (4) Deputy
(d) Other percentage taxes; Commissioners.
(e) Excise taxes;
(f) Documentary stamp taxes; and (B) Abate or cancel a tax liability, when:
(g) Such other taxes as are or hereafter may be imposed and (1) The tax or any portion thereof appears to be unjustly or
collected by the Bureau of Internal Revenue. excessively assessed; or
TITLE VIII REMEDIES (2) The administration and collection costs involved do not
SEC. 202. Final Deed to Purchaser. - In case the taxpayer shall justify the collection of the amount due.
not redeem the property as herein provided, the Revenue All criminal violations may be compromised except: (a) those
District Officer shall, as grantor, execute a deed conveying to already filed in court, or (b) those involving fraud.
the purchaser so much of the property as has been sold, free
from all liens of any kind whatsoever, and the deed shall (C) Credit or refund taxes erroneously or illegally received or
succinctly recite all the proceedings upon which the validity penalties imposed without authority, refund the value of
of the sale depends. internal revenue stamps when they are returned in good
condition by the purchaser, and, in his discretion, redeem or
SEC. 203. Period of Limitation Upon Assessment and change unused stamps that have been rendered unfit for use
Collection. - Except as provided in Section 222, internal and refund their value upon proof of destruction. No credit or
revenue taxes shall be assessed within three (3) years after refund of taxes or penalties shall be allowed unless the
the last day prescribed by law for the filing of the return, and taxpayer files in writing with the Commissioner a claim for
no proceeding in court without assessment for the collection credit or refund within two (2) years after the payment of the
of such taxes shall be begun after the expiration of such tax or penalty: Provided, however, That a return filed showing
period: Provided, That in a case where a return is filed

10
an overpayment shall be considered as a written claim for The Bureau of Internal Revenue shall advance the amounts
credit or refund.[201] needed to defray costs of collection by means of civil or
criminal action, including the preservation or transportation
A Tax Credit Certificate validly issued under the provisions of
of personal property distrained and the advertisement and
this Code may be applied against any internal revenue tax,
sale thereof, as well as of real property and improvements
excluding withholding taxes, for which the taxpayer is directly
thereon.
liable. Any request for conversion into refund of unutilized
tax credits may be allowed, subject to the provisions of SEC. 206. Constructive Distraint of the Property of A
Section 230 of this Code: Provided, That the original copy of Taxpayer. - To safeguard the interest of the Government, the
the Tax Credit Certificate showing a creditable balance is Commissioner may place under constructive distraint the
surrendered to the appropriate revenue officer for property of a delinquent taxpayer or any taxpayer who, in his
verification and cancellation: Provided, further, That in no opinion, is retiring from any business subject to tax, or is
case shall a tax refund be given resulting from availment of intending to leave the Philippines or to remove his property
incentives granted pursuant to special laws for which no therefrom or to hide or conceal his property or to perform
actual payment was made. any act tending to obstruct the proceedings for collecting the
tax due or which may be due from him.
The Commissioner shall submit to the Chairmen of the
Committee on Ways and Means of both the Senate and The constructive distraint of personal property shall be
House of Representatives, every six (6) months, a report on affected by requiring the taxpayer or any person having
the exercise of his powers under this Section, stating therein possession or control of such property to sign a receipt
the following facts and information, among others: names covering the property distrained and obligate himself to
and addresses of taxpayers whose cases have been the preserve the same intact and unaltered and not to dispose of
subject of abatement or compromise; amount involved; the same ;in any manner whatever, without the express
amount compromised or abated; and reasons for the exercise authority of the Commissioner.
of power: Provided, That the said report shall be presented to
In case the taxpayer or the person having the possession and
the Oversight Committee in Congress that shall be
control of the property sought to be placed under
constituted to determine that said powers are reasonably
constructive distraint refuses or fails to sign the receipt
exercised and that the Government is not unduly deprived of
herein referred to, the revenue officer effecting the
revenues.
constructive distraint shall proceed to prepare a list of such
 CIVIL REMEDIES FOR COLLECTION OF TAXES property and, in the presence of two (2) witnesses, leave a
copy thereof in the premises where the property distrained is
SEC. 205. Remedies for the Collection of Delinquent Taxes. -
located, after which the said property shall be deemed to
The civil remedies for the collection of internal revenue taxes,
have been placed under constructive distraint.
fees or charges, and any increment thereto resulting from
delinquency shall be: SEC. 207. Summary Remedies. –

(a) By distraint of goods, chattels, or effects, and other (A) Distraint of Personal Property. - Upon the failure of the
personal property of whatever character, including stocks and person owing any delinquent tax or delinquent revenue to
other securities, debts, credits, bank accounts and interest in pay the same at the time required, the Commissioner or his
and rights to personal property, and by levy upon real duly authorized representative, if the amount involved is in
property and interest in rights to real property; and excess of One million pesos (P1,000,000), or the Revenue
District Officer, if the amount involved is One million pesos
(b) By civil or criminal action.
(P1,000,000) or less, shall seize and distraint any goods,
Either of these remedies or both simultaneously may be chattels or effects, and the personal property, including
pursued in the discretion of the authorities charged with the stocks and other securities, debts, credits, bank accounts, and
collection of such taxes: Provided, however, That the interests in and rights to personal property of such persons in
remedies of distraint and levy shall not be availed of where sufficient quantity to satisfy the tax, or charge, together with
the amount of tax involve is not more than One hundred any increment thereto incident to delinquency, and the
pesos (P100). expenses of the distraint and the cost of the subsequent sale.

The judgment in the criminal case shall not only impose the A report on the distraint shall, within ten (10) days from
penalty but shall also order payment of the taxes subject of receipt of the warrant, be submitted by the distraining officer
the criminal case as finally decided by the Commissioner. to the Revenue District Officer, and to the Revenue Regional
Director: Provided, That the Commissioner or his duly
11
authorized representative shall, subject to rules and whose possession such goods, chattels, or effects or other
regulations promulgated by the Secretary of Finance, upon personal property were taken, or at the dwelling or place of
recommendation of the Commissioner, have the power to lift business of such person and with someone of suitable age
such order of distraint: Provided, further, That a consolidated and discretion, to which list shall be added a statement of the
report by the Revenue Regional Director may be required by sum demanded and note of the time and place of sale.
the Commissioner as often as necessary.
Stocks and other securities shall be distrained by serving a
(B) Levy on Real Property. - After the expiration of the time copy of the warrant of distraint upon the taxpayer and upon
required to pay the delinquent tax or delinquent revenue as the president, manager, treasurer or other responsible officer
prescribed in this Section, real property may be levied upon, of the corporation, company or association, which issued the
before simultaneously or after the distraint of personal said stocks or securities.
property belonging to the delinquent. To this end, any
Debts and credits shall be distrained by leaving with the
internal revenue officer designated by the Commissioner or
person owing the debts or having in his possession or under
his duly authorized representative shall prepare a duly
his control such credits, or with his agent, a copy of the
authenticated certificate showing the name of the taxpayer
warrant of distraint. The warrant of distraint shall be
and the amounts of the tax and penalty due from him. Said
sufficient authority to the person owning the debts or having
certificate shall operate with the force of a legal execution
in his possession or under his control any credits belonging to
throughout the Philippines.
the taxpayer to pay to the Commissioner the amount of such
Levy shall be affected by writing upon said certificate a debts or credits.
description of the property upon which levy is made. At the
Bank accounts shall be garnished by serving a warrant of
same time, written notice of the levy shall be mailed to or
garnishment upon the taxpayer and upon the president,
served upon the Register of Deeds for the province or city
manager, treasurer or other responsible officer of the bank.
where the property is located and upon the delinquent
Upon receipt of the warrant of garnishment, the bank shall
taxpayer, or if he be absent from the Philippines, to his agent
turn over to the Commissioner so much of the bank accounts
or the manager of the business in respect to which the
as may be sufficient to satisfy the claim of the Government.
liability arose, or if there be none, to the occupant of the
property in question. SEC. 209. Sale of Property Distrained and Disposition of
Proceeds. - The Revenue District Officer or his duly authorized
In case the warrant of levy on real property is not issued
representative, other than the officer referred to in Section
before or simultaneously with the warrant of distraint on
208 of this Code shall, according to rules and regulations
personal property, and the personal property of the taxpayer
prescribed by the Secretary of Finance, upon
is not sufficient to satisfy his tax delinquency, the
recommendation of the Commissioner, forthwith cause a
Commissioner or his duly authorized representative shall,
notification to be exhibited in not less than two (2) public
within thirty (30) days after execution of the distraint,
places in the municipality or city where the distraint is made,
proceed with the levy on the taxpayer's real property.
specifying; the time and place of sale and the articles
Within ten (10) days after receipt of the warrant, a report on distrained. The time of sale shall not be less than twenty (20)
any levy shall be submitted by the levying officer to the days after notice to the owner or possessor of the property as
Commissioner or his duly authorized representative: above specified and the publication or posting of such notice.
Provided, however, That a consolidated report by the One place for the posting of such notice shall be at the Office
Revenue Regional Director may be required by the of the Mayor of the city or municipality in which the property
Commissioner as often as necessary: Provided, further, That is distrained.
the Commissioner or his duly authorized representative,
At the time and place fixed in such notice, the said revenue
subject to rules and regulations promulgated by the Secretary
officer shall sell the goods, chattels, or effects, or other
of Finance, upon recommendation of the Commissioner, shall
personal property, including stocks and other securities so
have the authority to lift warrants of levy issued in
distrained, at public auction, to the highest bidder for cash, or
accordance with the provisions hereof.
with the approval of the Commissioner, through duly licensed
SEC. 208. Procedure for Distraint and Garnishment. - The commodity or stock exchanges.
officer serving the warrant of distraint shall make or cause to
In the case of Stocks and other securities, the officer making
be made an account of the goods, chattels, effects or other
the sale shall execute a bill of sale which he shall deliver to
personal property distrained, a copy of which, signed by
the buyer, and a copy thereof furnished the corporation,
himself, shall be left either with the owner or person from
company or association which issued the stocks or other
12
securities. Upon receipt of the copy of the bill of sale, the short description of the property to be sold. At any time
corporation, company or association shall make the before the day fixed for the sale, the taxpayer may
corresponding entry in its books, transfer the stocks or other discontinue all proceedings by paying the taxes, penalties and
securities sold in the name of the buyer, and issue, if required interest. If he does not do so, the sale shall proceed and shall
to do so, the corresponding certificates of stock or other be held either at the main entrance of the municipal building
securities. or city hall, or on the premises to be sold, as the officer
conducting the proceedings shall determine and as the notice
Any residue over and above what is required to pay the entire
of sale shall specify.
claim, including expenses, shall be returned to the owner of
the property sold. The expenses chargeable upon each Within five (5) days after the sale, a return by the distraining
seizure and sale shall embrace only the actual expenses of or levying officer of the proceedings shall be entered upon
seizure and preservation of the property pending the sale, the records of the Revenue Collection Officer, the Revenue
and no charge shall be imposed for the services of the local District officer and the Revenue Regional Director. The
internal revenue officer or his deputy. Revenue Collection Officer, in consultation with the Revenue
district Officer, shall then make out and deliver to the
SEC. 210. Release of Distrained Property Upon Payment
purchaser a certificate from his records, showing the
Prior to Sale. - If at any time prior to the consummation of
proceedings of the sale, describing the property sold stating
the sale all proper charges are paid to the officer conducting
the name of the purchaser and setting out the exact amount
the sale, the goods or effects distrained shall be restored to
of all taxes, penalties and interest: Provided, however, That in
the owner.
case the proceeds of the sale exceeds the claim and cost of
SEC. 211. Report of Sale to Bureau of Internal Revenue. - sale, the excess shall be turned over to the owner of the
Within two (2) days after the sale, the officer making the property.
same shall make a report of his proceedings in writing to the
The Revenue Collection Officer, upon approval by the
Commissioner and shall himself preserve a copy of such
Revenue District Officer may, out of his collection, advance an
report as an official record.
amount sufficient to defray the costs of collection by means
SEC. 212. Purchase by Government at Sale Upon Distraint.- of the summary remedies provided for in this Code, including
When the amount bid for the property under distraint is not the preservation or transportation in case of personal
equal to the amount of the tax or is very much less than the property, and the advertisement and subsequent sale, both in
actual market value of the articles offered for sale, the cases of personal and real property including improvements
Commissioner or his deputy may purchase the same in behalf found on the latter. In his monthly collection reports, such
of the national Government for the amount of taxes, advances shall be reflected and supported by receipts.
penalties and costs due thereon.
SEC. 214. Redemption of Property Sold. - Within one (1) year
Property so purchased may be resold by the Commissioner or from the date of sale, the delinquent taxpayer, or any one for
his deputy, subject to the rules and regulations prescribed by him, shall have the right of paying to the Revenue District
the Secretary of Finance, the net proceeds therefrom shall be Officer the amount of the public taxes, penalties, and interest
remitted to the National Treasury and accounted for as thereon from the date of delinquency to the date of sale,
internal revenue. together with interest on said purchase price at the rate of
fifteen percent (15%) per annum from the date of purchase
SEC. 213. Advertisement and Sale. - Within twenty (20) days to the date of redemption, and such payment shall entitle the
after levy, the officer conducting the proceedings shall person paying to the delivery of the certificate issued to the
proceed to advertise the property or a usable portion thereof purchaser and a certificate from the said Revenue District
as may be necessary to satisfy the claim and cost of sale; and Officer that he has thus redeemed the property, and the
such advertisement shall cover a period of a least thirty (30) Revenue District Officer shall forthwith pay over to the
days. It shall be effectuated by posting a notice at the main purchaser the amount by which such property has thus been
entrance of the municipal building or city hall and in public redeemed, and said property thereafter shall be free from the
and conspicuous place in the barrio or district in which the lien of such taxes and penalties.
real estate lies and by publication once a week for three (3)
weeks in a newspaper of general circulation in the The owner shall not, however, be deprived of the possession
municipality or city where the property is located. The of the said property and shall be entitled to the rents and
advertisement shall contain a statement of the amount of other income thereof until the expiration of the time allowed
taxes and penalties so due and the time and place of sale, the for its redemption.
name of the taxpayer against whom taxes are levied, and a
13
SEC. 215. Forfeiture to Government for Want of Bidder. - In any mortgagee, purchaser or judgment creditor until notice
case there is no bidder for real property exposed for sale as of such lien shall be filed by the Commissioner in the office of
herein above provided or if the highest bid is for an amount the Register of Deeds of the province or city where the
insufficient to pay the taxes, penalties and costs, the Internal property of the taxpayer is situated or located.
Revenue Officer conducting the sale shall declare the
SEC. 220. Form and Mode of Proceeding in Actions Arising
property forfeited to the Government in satisfaction of the
under this Code. - Civil and criminal actions and proceedings
claim in question and within two (2) days thereafter, shall
instituted in behalf of the Government under the authority of
make a return of his proceedings and the forfeiture which
this Code or other law enforced by the Bureau of Internal
shall be spread upon the records of his office. It shall be the
Revenue shall be brought in the name of the Government of
duty of the Register of Deeds concerned, upon registration
the Philippines and shall be conducted by legal officers of the
with his office of any such declaration of forfeiture, to
Bureau of Internal Revenue but no civil or criminal action for
transfer the title of the property forfeited to the Government
the recovery of taxes or the enforcement of any fine, penalty
without the necessity of an order from a competent court.
or forfeiture under this Code shall be filed in court without
Within one (1) year from the date of such forfeiture, the the approval of the Commissioner.
taxpayer, or any one for him, may redeem said property by
SEC. 221. Remedy for Enforcement of Statutory Penal
paying to the Commissioner or the latter's Revenue Collection
Provisions. - The remedy for enforcement of statutory
Officer the full amount of the taxes and penalties, together
penalties of all sorts shall be by criminal or civil action, as the
with interest thereon and the costs of sale, but if the property
particular situation may require, subject to the approval of
be not thus redeemed, the forfeiture shall become absolute.
the Commissioner.
SEC. 216. Resale of Real Estate Taken for Taxes. - The
SEC. 222. Exceptions as to Period of Limitation of
Commissioner shall have charge of any real estate obtained
Assessment and Collection of Taxes.-
by the Government of the Philippines in payment or
satisfaction of taxes, penalties or costs arising under this Code (a) In the case of a false or fraudulent return with intent to
or in compromise or adjustment of any claim therefore; and evade tax or of failure to file a return, the tax may be
said Commissioner may, upon the giving of not less than assessed, or a proceeding in court for the collection of such
twenty (20) days notice, sell and dispose of the same of public tax may be filed without assessment, at any time within ten
auction or with prior approval of the Secretary of Finance, (10) years after the discovery of the falsity, fraud or omission:
dispose of the same at private sale. In either case, the Provided, That in a fraud assessment which has become final
proceeds of the sale shall be deposited with the National and executory, the fact of fraud shall be judicially taken
Treasury, and an accounting of the same shall rendered to cognizance of in the civil or criminal action for the collection
the Chairman of the Commission on Audit. thereof.
SEC. 217. Further Distraint or Levy. - The remedy by distraint (b) If before the expiration of the time prescribed in Section
of personal property and levy on realty may be repeated if 203 for the assessment of the tax, both the Commissioner
necessary until the full amount due, including all expenses, is and the taxpayer have agreed in writing to its assessment
collected. after such time, the tax may be assessed within the period
agreed upon. The period so agreed upon may be extended by
SEC. 218. Injunction not Available to Restrain Collection of
subsequent written agreement made before the expiration of
Tax. - No court shall have the authority to grant an injunction
the period previously agreed upon.
to restrain the collection of any national internal revenue tax,
fee or charge imposed by this Code. (c) Any internal revenue tax which has been assessed within
the period of limitation as prescribed in paragraph (a) hereof
SEC. 219. Nature and Extent of Tax Lien. - If any person,
may be collected by distraint or levy or by a proceeding in
corporation, partnership, joint-account (cuentas en
court within five (5) years following the assessment of the
participacion), association or insurance company liable to pay
tax.
an internal revenue tax, neglects or refuses to pay the same
after demand, the amount shall be a lien in favor of the (d) Any internal revenue tax, which has been assessed within
Government of the Philippines from the time when the the period agreed upon as provided in paragraph (b)
assessment was made by the Commissioner until paid, with hereinabove, may be collected by distraint or levy or by a
interests, penalties, and costs that may accrue in addition proceeding in court within the period agreed upon in writing
thereto upon all property and rights to property belonging to before the expiration of the five (5) -year period. The period
the taxpayer: Provided, That this lien shall not be valid against so agreed upon may be extended by subsequent written

14
agreements made before the expiration of the period in the discretion of the Commissioner. Forfeited property
previously agreed upon. shall not be destroyed until at least twenty (20) days after
seizure.
(e) Provided, however, That nothing in the immediately
preceding and paragraph (a) hereof shall be construed to SEC. 226. Disposition of funds Recovered in Legal
authorize the examination and investigation or inquiry into Proceedings or Obtained from Forfeitures. - all judgments
any tax return filed in accordance with the provisions of any and monies recovered and received for taxes, costs,
tax amnesty law or decree. forfeitures, fines and penalties shall be paid to the
Commissioner or his authorized deputies as the taxes
SEC. 223. Suspension of Running of Statute of Limitations. -
themselves are required to be paid, and except as specially
The running of the Statute of Limitations provided in Sections
provided, shall be accounted for and dealt with the same
203 and 222 on the making of assessment and the beginning
way.
of distraint or levy a proceeding in court for collection, in
respect of any deficiency, shall be suspended for the period SEC. 227. Satisfaction of Judgment Recovered Against any
during which the Commissioner is prohibited from making the Internal Revenue Officer. - When an action is brought against
assessment or beginning distraint or levy or a proceeding in any Internal Revenue officer to recover damages by reason of
court and for sixty (60) days thereafter; when the taxpayer any act done in the performance of official duty, and the
requests for a reinvestigation which is granted by the Commissioner is notified of such action in time to make
Commissioner; when the taxpayer cannot be located in the defense against the same, through the Solicitor General, any
address given by him in the return filed upon which a tax is judgment, damages or costs recovered in such action shall be
being assessed or collected: Provided, that, if the taxpayer satisfied by the Commissioner, upon approval of the
informs the Commissioner of any change in address, the Secretary of Finance, or if the same be paid by the person
running of the Statute of Limitations will not be suspended; used shall be repaid or reimbursed to him. No such judgment,
when the warrant of distraint or levy is duly served upon the damages, or costs shall be paid or reimbursed in behalf of a
taxpayer, his authorized representative, or a member of his person who has acted negligently or in bad faith, or with
household with sufficient discretion, and no property could willful oppression.
be located; and when the taxpayer is out of the Philippines.
CHAPTER III PROTESTING AN ASSESSMENT, REFUND, ETC.
SEC. 224. Remedy for Enforcement of Forfeitures.- The
SEC. 228. Protesting of Assessment. - When the
forfeiture of chattels and removable fixtures of any sort shall
Commissioner or his duly authorized representative finds that
be enforced by the seizure and sale, or destruction, of the
proper taxes should be assessed, he shall first notify the
specific forfeited property. The forfeiture of real property
taxpayer of his findings: Provided, however, That a pre-
shall be enforced by a judgment of condemnation and sale in
assessment notice shall not be required in the following
a legal action or proceeding, civil or criminal, as the case may
cases:
require.
(a) When the finding for any deficiency tax is the result of
SEC. 225. When Property to be Sold or Destroyed. - Sales of
mathematical error in the computation of the tax as
forfeited chattels and removable fixtures shall be effected, so
appearing on the face of the return; or
far as practicable, in the same manner and under the same
(b) When a discrepancy has been determined between the
conditions as the public notice and the time and manner of
tax withheld and the amount actually remitted by the
sale as are prescribed for sales of personal property
withholding agent; or
distrained for the non-payment of taxes.
(c) When a taxpayer who opted to claim a refund or tax credit
Distilled spirits, liquors, cigars, cigarettes, other manufactured of excess creditable withholding tax for a taxable period was
products of tobacco, and all apparatus used I or about the determined to have carried over and automatically applied
illicit production of such articles may, upon forfeiture, be the same amount claimed against the estimated tax liabilities
destroyed by order of the Commissioner, when the sale of for the taxable quarter or quarters of the succeeding taxable
the same for consumption or use would be injurious to public year; or
health or prejudicial to the enforcement of the law. (d) When the excise tax due on excisable articles has not been
paid; or
All other articles subject to excise tax, which have been
(e) When the article locally purchased or imported by an
manufactured or removed in violation of this Code, as well as
exempt person, such as, but not limited to, vehicles, capital
dies for the printing or making of internal revenue stamps
equipment, machineries and spare parts, has been sold,
and labels which are in imitation of or purport to be lawful
traded or transferred to non-exempt persons.
stamps, or labels may, upon forfeiture, be sold or destroyed
15
 years from the date the said warrant or check was mailed or
The taxpayers shall be informed in writing of the law and the delivered, shall be forfeited in favor of the Government and
facts on which the assessment is made; otherwise, the the amount thereof shall revert to the general fund.
assessment shall be void.
(B) Forfeiture of Tax Credit. - A tax credit certificate issued in
Within a period to be prescribed by implementing rules and accordance with the pertinent provisions of this Code, which
regulations, the taxpayer shall be required to respond to said shall remain unutilized after five (5) years from the date of
notice. If the taxpayer fails to respond, the Commissioner or issue, shall, unless revalidated, be considered invalid, and
his duly authorized representative shall issue an assessment shall not be allowed as payment for internal revenue tax
based on his findings. liabilities of the taxpayer, and the amount covered by the
certificate shall revert to the general fund.
Such assessment may be protested administratively by filing a
request for reconsideration or reinvestigation within thirty (C)Transitory Provision. - For purposes of the preceding
(30) days from receipt of the assessment in such form and Subsection, a tax credit certificate issued by the
manner as may be prescribed by implementing rules and Commissioner or his duly authorized representative prior to
regulations. Within sixty (60) days from filing of the protest, January 1, 1998, which remains unutilized or has a creditable
all relevant supporting documents shall have been submitted; balance as of said date, shall be presented for revalidation
otherwise, the assessment shall become final. with the Commissioner or his duly authorized representative
or on before June 30, 1998.
If the protest is denied in whole or in part, or is not acted
upon within one hundred eighty (180) days from submission SEC. 231. Action to Contest Forfeiture of Chattel. - In case of
of documents, the taxpayer adversely affected by the the seizure of personal property under claim of forfeiture, the
decision or inaction may appeal to the Court of Tax Appeals owner desiring to contest the validity of the forfeiture may, at
within thirty (30) days from receipt of the said decision, or any time before sale or destruction of the property, bring an
from the lapse of one hundred eighty (180)-day period; action against the person seizing the property or having
otherwise, the decision shall become final, executory and possession thereof to recover the same, and upon giving
demandable. proper bond, may enjoin the sale; or after the sale and within
six (6) months, he may bring an action to recover the net
SEC. 229. Recovery of Tax Erroneously or Illegally Collected.-
proceeds realized at the sale.
no suit or proceeding shall be maintained in any court for the
recovery of any national internal revenue tax hereafter
alleged to have been erroneously or illegally assessed or
collected, or of any penalty claimed to have been collected
without authority, of any sum alleged to have been
excessively or in any manner wrongfully collected without
authority, or of any sum alleged to have been excessively or
in any manner wrongfully collected, until a claim for refund or
credit has been duly filed with the Commissioner; but such
suit or proceeding may be maintained, whether or not such
tax, penalty, or sum has been paid under protest or duress.

In any case, no such suit or proceeding shall be filed after the

expiration of two (2) years from the date of payment of the
tax or penalty regardless of any supervening cause that may
arise after payment: Provided, however, That the
Commissioner may, even without a written claim therefor,
refund or credit any tax, where on the face of the return upon
which payment was made, such payment appears clearly to
have been erroneously paid.

SEC. 230. Forfeiture of Cash Refund and of Tax Credit. –

(A) Forfeiture of Refund. - A refund check or warrant issued

in accordance with the pertinent provisions of this Code,
which shall remain unclaimed or uncashed within five (5)

16
 issued a Preliminary Assessment Notice for 2011, informing
Citysuper of its alleged deficiencies on income tax, value-
added tax, withholding tax on compensation, expanded
withholding tax, and documentary stamp tax. The total
assessed amount was P2,083,016,072.43.5

On April 24, 2015, Citysuper received the Formal Letter of

Demand and Assessment Notices for the unpaid taxes. In
response, on April 29, 2015, Citysuper filed a letter with the
Bureau of Internal Revenue.6

On August 13, 2015, Citysuper filed before the Court of Tax

Appeals a Petition for Review under Rule 43 of the Rules of
Court, seeking to cancel the Formal Letter of Demand. To its
pleading, it attached the Details of Discrepancies and Audit
Result/Assessment Notices for 2011. On February 29, 2016,
Citysuper submitted its Urgent Motion for Preferential
Resolution of the Issue on Prescription. The Commissioner of
Internal Revenue filed a Comment/Opposition to the Urgent
Motion.7

On August 15, 2016, Citysuper presented Beley G. Chua, its

corporate secretary. She testified that she had issued an
August 12, 2015 Secretary's Certificate attesting that
Citysuper's Board of Directors did not authorize one Conchita
V. Lee (Lee) "to waive [Citysuper's] defense of prescription for
and on its behalf."8
FINALS CASES:
On November 15, 2016, the Commissioner of Internal
COMMISSIONER OF INTERNAL REVENUE VS. CTA G.R. NO. Revenue presented Rosario A. Arriola (Arriola), a revenue
239464 MAY 10-2021 officer who testified among others that Citysuper, through
Lee, executed a Waiver of the Defense of Prescription Under
When a taxpayer files a petition for review before the Court
the Statute of Limitations of the National Internal Revenue
of Tax Appeals without validly contesting the assessment with
Code (Waiver). This Waiver, she said, extended the period to
the Commissioner of Internal Revenue, the petition is
assess Citysuper until December 31, 2015.9
premature and the Court of Tax Appeals has no jurisdiction.
During cross-examination, Arriola stated that she required
This Court resolves a Petition for Certiorari 1 assailing the
Lee to show proof that she was authorized to sign the Waiver.
Resolutions2 of the Court of Tax Appeals Third Division, which
Lee showed an authorization letter, but Arriola said she was
canceled the assessment notices for deficiency income tax,
not sure if it was notarized, adding that the letter was in her
value-added tax, withholding tax on compensation, and
office and not attached to the case records. 10
expanded withholding tax issued by the Commissioner of
Internal Revenue against Citysuper, Inc. (Citysuper). It also
Since Arriola did not have the authorization letter with her,
found that the Commissioner was estopped from raising its
her crossexamination was set to continue on January 24,
lack of subject-matter jurisdiction over the case. 3
2017. However, on that date, Citysuper's counsel failed to
appear, prompting the Commissioner of Internal Revenue's
On April 1, 2013, the Commissioner of Internal Revenue
lawyer to move for the waiver of the rest of the cross-
issued Letter of Authority No. 116-2013-00000017 for Bureau
examination, which the Court of Tax Appeals granted. 11
of Internal Revenue officials to examine Citysuper's books of
account and other accounting records for an investigation for
When the Commissioner of Internal Revenue filed a Formal
taxable year 2011.4
Offer of Evidence, the Court of Tax Appeals did not admit the
authorization letter. It then ordered the parties to submit
On April 1, 2015, the Commissioner of Internal Revenue
17
their memoranda. The Commissioner moved for partial (b) If before the expiration of the time prescribed in Section
reconsideration and for the submission of a memorandum to 203 for the assessment of the tax, both the Commissioner
be deferred, but this omnibus motion was not deemed filed. and the taxpayer have agreed in writing to its assessment
On the other hand, Citysuper filed its Memorandum (On the after such time, the tax may be assessed within the period
Issue of Prescription).12 agreed upon. The period so agreed upon may be extended by
subsequent written agreement made before the expiration of
In its December 15, 2017 Resolution, 13 the Court of Tax the period previously agreed upon.
Appeals partially granted the Petition for Review. The
To implement Section 222(b), the Bureau of Internal Revenue
dispositive portion reads:chanroblesvirtualawlibrary
issued Revenue Memorandum Order No. 20-90, which stated
WHEREFORE, in view of all the foregoing, the present Petition in part:chanroblesvirtualawlibrary
for Review is PARTIALLY GRANTED. Accordingly, respondent's
Formal Letter of Demand dated April 24, 2015 is PARTIALLY
SET ASIDE and the corresponding Assessment Notices for In the execution of said waiver, the following procedures
deficiency income tax, VAT, WTC, and EWT issued against should be followed:
petitioner are hereby CANCELLED and WITHDRAWN.
....
Let the hearing on the merits on the DST assessment, as
found in the Formal Letter of Demand dated April 24, 2015, 2. The waiver shall be signed by the taxpayer [himself/herself]
be set on April 16, 2018 at 1:30 p.m. or [his/her/its] duly authorized representative. In the case of
a corporation, the waiver must be signed by any of its
SO ORDERED.14 (Emphasis in the original) responsible officials.

Citing provisions of the National Internal Revenue Code, the Soon after the waiver is signed by the taxpayer, the [CIR] or
Court of Tax Appeals found that the prescription period was the revenue officer authorized by [him/her], as hereinafter
not validly waived.15 Under Section 203 of the National provided, shall sign the waiver indicating that the [BIR] has
Internal Revenue Code, assessments for deficiency taxes accepted and agreed to the waiver. The date of such
should be issued within three years from the last day acceptance by the Bureau should be indicated. Both the date
prescribed by law to file the tax return, or the actual date of of execution by the taxpayer and date of acceptance by the
filing of such return, whichever comes Bureau should be before the expiration of the period of
later:chanroblesvirtualawlibrary prescription or before the lapse of the period agreed upon in
case a subsequent agreement is
executed.16chanRoblesvirtualLawlibrary
SECTION 203. Period of Limitation Upon Assessment and
Collection. - Except as provided in Section internal revenue Revenue Memorandum Order No. 20-90 was modified by
taxes shall be assessed within three (3) years after the last Revenue Delegation Authority Order No. 05-01, which
day prescribed by law for the filing of the return, and no mandated that the authorized revenue official ensure that
proceeding in court without assessment for the collection of the waiver was duly accomplished by the taxpayer or their
such taxes shall be begun after the expiration of such period: authorized representative, and that, if the authority to
Provided, That a case where a return is filed beyond the execute the waiver was delegated, the revenue official should
period prescribed by law, the three (3)-year period shall be make sure that the delegation was in writing and duly
counted from the day the return was filed. For purposes of notarized.17
this Section, a return filed before the last day prescribed by
law tor the filing thereof shall be considered as filed on such The Court of Tax Appeals found that the prescriptive periods
last day. for some of the deficiency value-added taxes, withholding
taxes on compensation, and expanded withholding taxes had
Section 222(b) provides that the period to assess may be
elapsed. Lee signed the Waiver on July 10, 2014, and Officer-
extended upon written agreement of the Commissioner and
in-Charge-Assistant Commissioner-LTS Nestor S. Valeroso
the taxpayer:chanroblesvirtualawlibrary
accepted it on July 25, 2014. Thus, the Court of Tax Appeals
said, the following taxes could no longer be
SECTION 222. Exceptions as to Period of Limitation of assessed:18chanrobleslawlibrary
Assessment and Collection of Taxes. - ...

18
TAX RETURNS LAST DAY TO ASSESS However, the Court of Tax Appeals found that Lee was
unauthorized to enter into the Waiver on Citysuper's behalf.
It said that Lee's authority was never presented and properly
[Value Added Tax] identified. As such, the Court of Tax Appeals denied the letter
1st Quarter when it was formally offered, pursuant to Rule 132, Section
April 25, 2014
20 of the Rules of Court, under which only documents duly
[Withholding Tax on identified by a competent witness and formally offered in
Compensation] evidence would be admitted.21
February 13, 2014
January
March 13, 2014 Further, the Court of Tax Appeals found that the parties were
February
April 13, 2014 not in pari delicto due to the Waiver. It found no showing that
March
May 13, 2014 Citysuper itself knew of the Waiver or authorized someone to
April
June 13, 2014 sign it. It also did not find that Citysuper dealt with revenue
May
July 13, 2014 officers based on the Waiver. Citysuper was riot deemed to
June
have benefited from the Waiver as it had already forwarded
some of the required documents to the Commissioner of
[Expanded Withholding Tax]
Internal Revenue before the Waiver was signed. 22
January February 13, 2014
February March 13, 2014
Finally, as to the documentary stamp tax, the Court of Tax
March April 13, 2014
Appeals ordered that a full-blown trial be conducted to
April May 13, 2014
determine if Citysuper should be made liable, as insufficient
May June 13, 2014
evidence was presented to determine if the Commissioner's
June July 13, 201419
right to assess had prescribed.23
The following taxes remained:chanroblesvirtualawlibrary
In a Motion for Reconsideration, the Commissioner of
Internal Revenue argued that the Court of Tax Appeals had no
TAX RETURNS LAST DAY TO ASSESS jurisdiction. It explained that Citysuper had admitted
receiving the Final Letter of Demand and Assessment Notices
Income Tax April 15, 2015 on April 24, 2015, which meant that Citysuper had until May
24, 2015 to file its protest. 24 While it allegedly filed a protest
[Value Added Tax] on April 29, 2015, the Commissioner claimed that the protest
2nd July 25, 2014 letter only had the assessment notices attached, and stated
3rd October 25, 2014 that Citysuper was still compiling supporting
4th January 25, 2015 documents.25 With no protest, the Commissioner said, the
assessment became final-depriving the Court of Tax Appeals
[Withholding Tax on of jurisdiction, which only pertained to disputed
Compensation] assessments.26
August 13, 2014
July
September 13, 2014 Second, the Commissioner claimed that the Court of Tax
August
October 13, 2014 Appeals incorrectly computed the prescriptive periods for the
September
November 13, 2014 deficiency taxes, as the period that should have applied was
October
December 13, 2014 10 years under Section 222(a) of the National Internal
November
January 30, 2015 Revenue Code, due to the substantial under-declaration of
December
income and sales, which constituted a false return. 27
[Expanded Withholding Tax]
Finally, the Commissioner argued that the Waiver was valid. It
July August 13, 2014
argued that since Lee's authorization letter was notarized, it
August September 13, 2014
should be considered a public document without further
September October 13, 2014
proof of authentication.28
October November 13, 2014
November December 13, 2014
In its March 20, 2018 Resolution, 29 the Court of Tax Appeals
December January 15, 201520
denied the Motion for Reconsideration. It found that the

19
defense of lack of jurisdiction was barred by laches, Internal Revenue Code. Thus, petitioner argues that
following Tijam v. Sibonghanoy.30 Holding that respondent should be estopped from assailing the existence
the Tijam doctrine was the rule, not the exception, the Court and due execution of the Waiver. 40
of Tax Appeals found that the issue of prescription had never
been raised until the December 15, 2017 Resolution was Finally, petitioner prays that a temporary restraining order
issued.31 and/or writ of preliminary injunction be issued to suspend
the proceedings in the Court of Tax Appeals. It argues that
On June 13, 2018, the Commissioner of Internal Revenue filed since the Court of Tax Appeals' jurisdiction is being assailed,
before this Court its Petition for Certiorari32 against Citysuper. any further proceedings would render the Petition for
Certiorari moot.41
Petitioner argues that the Court of Tax Appeals gravely
abused its discretion in finding that they were barred by This Court ordered respondent Citysuper to comment on the
laches from raising the issue of jurisdiction. To petitioner, the Petition for Certiorari, which it did on September 21, 2018. 42
Court of Tax Appeals deliberately made it appear that
the Tijam doctrine was the rule, not the exception, on the In its Comment,43 respondent argues that petitioner availed
issue of jurisdiction. Citing Figueroa v. Republic,33 petitioner the incorrect remedy when it filed a Rule 65 petition. It claims
argues that the prevailing doctrine is still that the issue of that the Court of Tax Appeals' rulings were final, and not
jurisdiction may be raised at any time, and that Tijam should interlocutory, orders. To respondent, petitioner should have
only apply when there are similarities in the circumstances filed a Rule 43 petition before the Court of Tax Appeals En
between Tijam and the present case.34 Banc. Having failed to do that within the prescribed period,
petitioner allegedly opted to file a petition for certiorari,
Insisting that they are not estopped from questioning the which respondent insists cannot substitute for an appeal. 44
Court of Tax Appeals' jurisdiction, 35 petitioner says that in
their Answer to the Petition for Review, they had raised lack Next, respondent claims that the Court of Tax Appeals validly
of jurisdiction as an affirmative acquired jurisdiction over the subject matter of the case.
defense:chanroblesvirtualawlibrary While it concedes that it filed its protest against the
deficiency assessments, it says petitioner's active
participation during the proceedings in the Court of Tax
WITH ALL DUE RESPECT, THE HONORABLE COURT HAS NO Appeals showed that petitioner expressly and impliedly
JURISDICTION OVER THE INSTANT PETITION. THE submitted to the tax court's jurisdiction. 45
ASSESSMENT HAS ALREADY BECOME FINAL, EXECUTORY AND
DEMANDABLE.36chanRoblesvirtualLawlibrary Finally, respondent claims that petitioner's right to assess
In the same Answer, says petitioner, they prayed that deficiency income tax, value-added tax, withholding tax on
respondent's Petition for Review be dismissed for lack of compensation, and expanded withholding tax has already
jurisdiction.37 prescribed.46

Petitioner adds that in their Pre-Trial Brief and in the Joint The issues to be resolved in this case are:
Stipulation of Facts and Issues, they raised the issue of
jurisdiction. They note that during trial, they presented First, whether or not petitioner Commissioner of Internal
evidence that respondent did not file a valid protest, which Revenue availed the correct remedy to the December 15,
made the assessments final and demandable. 38 2017 and March 20, 2018 Resolutions of the Court of Tax
Appeals;
Because of these, petitioner argues that the circumstances of
this case differ from those in Tijam.39 Second, whether or not the Court of Tax Appeals gravely
abused its discretion in finding that petitioner Commissioner
Petitioner then claims that the Court of Tax Appeals should of Internal Revenue is barred from raising the issue of
have admitted the authorization letter, as it was a notarized jurisdiction due to estoppel by laches; and
document. They claim that respondent was aware of the
Waiver's execution, since both the Preliminary Assessment Finally, whether or not the Court of Tax Appeals gravely
Notice and the Formal Letter of Demand stated that its abused its discretion in refusing to admit in evidence the
authorized representative had executed a waiver of authorization letter issued in favor of Conchita V. Lee.
prescription pursuant to Section 203 and 222 of the National
20
The Petition is granted. As early as 1948, the surety company became a party to the
case when it issued the counter-bond to the writ of
attachment. During trial, it invoked the jurisdiction of the
Court of First Instance by seeking several affirmative reliefs,
I including a motion to quash the writ of execution. The surety
  company only assailed the jurisdiction of the Court of First
Petitioner availed the correct remedy, which was likewise Instance in 1963 when the Court of Appeals affirmed the
filed on time. lower court's decision. This court
said:chanroblesvirtualawlibrary
Contrary to respondent's claim, the Court of Tax Appeals' . . . Were we to sanction such conduct on [Manila Surety and
December 15, 2017 and March 20, 2018 Resolutions were Fidelity, Co. Inc.'s] part, We would in effect be declaring as
interlocutory orders, only partially disposing of the issues useless all the proceedings had in the present case since it
raised in CTA Case No. 9117. When the Resolutions were was commenced on July 19, 1948 and compel [the spouses
issued, hearings on the merits of the documentary stamp tax Tijam] to go up their Calvary once more. The inequity and
assessment were underway. The Court of Tax Appeals unfairness of this is not only patent but revolting.
resolved the issue of prescription ahead of the others since
respondent specifically moved for it in an Urgent After this court had rendered the decision in Tijam, this court
Motion.47 Respondent's subsequent payment of the observed that the "non-waivability of objection to
documentary stamp tax assessment did not affect the jurisdiction" has been ignored, and the Tijam doctrine has
Resolutions' nature itself. become more the general rule than the exception.
In Calimlim v. Ramirez, this court
Being interlocutory orders, the Resolutions were the proper said:chanroblesvirtualawlibrary
subject of a Rule 65 petition.
A rule that had been settled by unquestioned acceptance and
upheld in decisions so numerous to cite is that the jurisdiction
of a court over the subject-matter of the action is a matter of
II law and may not be conferred by consent or agreement of
the parties. The lack of jurisdiction of a court may be raised at
any stage of the proceedings, even on appeal. This doctrine
The Court of Tax Appeals ruled that petitioner was barred has been qualified by recent pronouncements which
from raising jurisdictional issues because of Tijam v. stemmed principally from the ruling in the cited case of
Sibonghanoy:48chanrobleslawlibrary [Tijam v. Sibonghanoy]. It is to be regretted, however, that
the holding in said case had been applied to situations which
were obviously not contemplated therein....
In fact, the Supreme Court has consistently resolved issues
that involve the belated invocation of lack of jurisdiction Thus, the court reiterated the "unquestionably accepted" rule
applying the principle of estoppel by laches. While that objections to a court's jurisdiction over the subject
in Calimlim v. Ramirez ("Calimlim"), the Supreme Court matter may be raised at any stage of the proceedings, even
accorded supremacy to the time-honored principle that the on appeal. This is because jurisdiction over the subject matter
issue of jurisdiction is not lost by waiver or by estoppel, in the is a "matter of law" and "may not be conferred by consent or
subsequent cases decided after Calimlim, the Sibonghanoy agreement of the parties."
doctrine became the rule rather than the
exception.49 (Emphasis in the original, citation omitted) In Figueroa, this court ruled that the Tijam doctrine "must be
applied with great care;" otherwise, the doctrine "may be a
The Court of Tax Appeals is incorrect. Tijam is the exception,
most effective weapon for the accomplishment of
not the rule, concerning the affirmative defense of lack of
injustice":chanroblesvirtualawlibrary
subject-matter jurisdiction.
. . . estoppel, being in the nature of a forfeiture, is not favored
In Villagracia v. Fifth Shari'a District by law. It is to be applied rarely - only from necessity, and
50
Court: chanrobleslawlibrary only in extraordinary circumstances. The doctrine must be
applied with great care and the equity must be strong in its
favor. When misapplied, the doctrine of estoppel may be a
In Tijam, it took Manila Surety and Fidelity Co., Inc. 15 years most effective weapon for the accomplishment of injustice. . .
before assailing the jurisdiction of the Court of First Instance.
21
. a judgment rendered without jurisdiction over the subject Issue on Prescription dated 19 February 2016[]] on April 6,
matter is void. . . . No laches will even attach when the 2016. Respondent did not raise jurisdiction as an issue.
judgment is null and void for want of
jurisdiction[.]51 (Emphasis in the original, citations omitted) The Court granted petitioner's Urgent Motion for Preferential
Resolution of the Issue on Prescription, and gave the parties
Tijam should be considered as a waiver of a party's right to
an opportunity to present evidence in this regard.
raise jurisdiction on equitable grounds. 52
Petitioner presented its witness M. Belley G. Chua on August
The general rule still remains: The issue of jurisdiction may be
15, 2016, and filed its Formal Offer of Documentary Evidence
raised at any stage of the proceedings, even on appeal, and is
(On the Issue of Prescription) and Addendum on August 30,
not lost by waiver or by estoppel. 53 Only when exceptional
2016 and September 1, 2016, respectively. Respondent then
circumstances exist similar to what took place in Tijam-such
submitted with the Court its Comment [Re: Petitioner's
as an extraordinarily long period of time before the issue was
Formal Offer of Documentary Evidence dated 30 August
raised, and the court's jurisdiction being assailed only after an
2016] on September 8, 2016.
unfavorable judgment, despite earlier obtaining an
affirmative relief-should a party be barred from raising lack of
On November 15, 2016 and January 24, 2017, respondent
jurisdiction as a defense.
presented witness Revenue Officer Rosario A. Arriola, and
submitted his Formal Offer of Evidence on March 16, 2017.
Key to a proper application of Tijam are the presence of the
following circumstances: first, a statutory right in the
Petitioner, then, filed its Memorandum (On the Issue of
claimant's favor; second, a failure to invoke the statutory
Prescription) on July 25, 2017; with no memorandum filed by
right; third, an unreasonable length of time elapsing before
respondent. Thereafter, the issue of prescription was
the claimant raised the jurisdictional issue; and fourth, the
submitted for resolution.
claimant's active participation in the case and prayer for
affirmative relief from the court without jurisdiction. 54 The
On top of the foregoing, respondent filed the following
confluence of these circumstances shows that the claimant
pleadings (among others) with the Court, never questioning
knew or should have known of the right in their favor, and yet
nor raising as an issue its jurisdiction, to wit: (1)
took an unreasonable amount of time to invoke their right. 55
Comment/Opposition (Re: Petitioner's Urgent Motion for
Suspension of Collection of Taxes); (2) Answer (to the Petition
The circumstances in Tijam do not exist here.
for Review dtd. Aug 11, 2015), (3) Memorandum (In
Opposition of Petitioner's Urgent Motion for Suspension of
According to the Court of Tax Appeals, petitioner was barred
Collection of Taxes); (4) Judicial Affidavit of Revenue Officer
by laches from raising the issue of subject-matter jurisdiction
Rosario A. Arriola; (5) Respondent's Pre-Trial Brief; and (6)
in its Motion for Reconsideration:chanroblesvirtualawlibrary
Comment (Re: Petitioner's Motion to Correct PreTrial
Order).56chanRoblesvirtualLawlibrary
In the case at bar, the Court finds that respondent is barred Petitioner raised the issue of lack of jurisdiction as early as in
by laches on account of its failure to raise the issue of their Answer to the Petition for Review. In the Answer,
jurisdiction over the subject matter, which is intertwined with petitioner had already argued that respondent did not file a
issue of prescription for prescription will not apply if the valid protest, which meant the assessments for deficiency tax
Court has no jurisdiction since the assessment has attained had become final, executory, and demandable. There being
finality even before the filing of the Petition for Review with no disputed assessment, the Court of Tax Appeals had no
the Court. A review of the factual antecedents would reveal jurisdiction over the Petition for Review.
that the issue was never raised by respondent, even to the
very end when the issue was submitted for resolution. It was Contrary to the Court of Tax Appeals' finding that jurisdiction
only upon the promulgation of the assailed Resolution, was not raised in the Answer, this was petitioner's first
adverse to respondent, when it suddenly claimed lack of special and affirmative defense:chanroblesvirtualawlibrary
jurisdiction on the part of the Court.

When [petitioner] filed its Urgent Motion for Preferential WITH ALL DUE  
Resolution of the Issue on Prescription on February 29, 2016, RESPECT, THE
respondent submitted his Comment/Opposition [Re: HONORABLE
Petitioner's Urgent Motion for Preferential Resolution of the
22
 COURT HAS NO discovered or additional evidence he intends to present if it is
JURISDICTION a request for reinvestigation, (ii) date of the assessment
OVER THE notice and (iii) the applicable law, rules and regulations or
INSTANT jurisprudence on which the protest is based, otherwise, his
PETITION. THE protest shall be considered void and without force and
ASSESSMENT effect.57chanRoblesvirtualLawlibrary
HAS ALREADY Because of this, petitioner prayed for the Petition for
BECOME FINAL, Review's dismissal due to lack of
EXECUTORY jurisdiction:chanroblesvirtualawlibrary
AND
DEMANDABLE.
WHEREFORE, premises considered, it is most respectfully
prayed of the Honorable Court that the instant Petition for
5. A taxpayer's right to contest assessments, particularly, the Review be DISMISSED for lack of jurisdiction
right to appeal to the Court of Tax Appeals, may be waived or and/or DENIED for utter lack of merit and ORDER petitioner
lost as in this case. The Bureau of Internal Revenue ("BIR") CITYSUPER, INC to pay the total amount
issued the Formal Letter of Demand ("FLD") and Assessment of P2,083,016,072.43 for deficiency Income Tax, Value-Added
Notices (BIR Form 0401) for taxable year 2011. Both were Tax, Withholding Tax on Compensation (WC), Expanded
dated 24 April 2015 and were received by petitioner on even Withholding Tax (WE) and Documentary Stamp Tax (DST)
date. including compromise penalty for taxable year 2011, as well
as 25% and 50% Surcharge, 20% Deficiency and Delinquency
6. As contained in paragraph 5 of the instant petition, interest pursuant to Sections 248 and 249 of the NIRC of
petitioner admits that it received the FLD and the Assessment 1997.58 (Emphasis in the original)
Notices for taxable year 2011 on ... 24 April 2015.
Petitioner similarly raised the Court of Tax Appeals' lack of
.... jurisdiction in its Pre-Trial Brief:chanroblesvirtualawlibrary

8. Based on the above quoted Section 228 of the NIRC, the

IV Issues to Be Tried Or Resolved
taxpayer has thirty (30) days from receipt of the FLD and
Assessment Notice within which to file its protest.
a. Whether the Honorable Court has jurisdiction over the
instant petition.59chanRoblesvirtualLawlibrary
....
Again, petitioner included the issue of jurisdiction among one
10. Here, from the receipt of the FLD and Assessment Notices of its issues in the December 3, 2015 Joint Stipulation of Facts
on 24 April 2015, petitioner had until 24 May 2015 within and Issues:chanroblesvirtualawlibrary
which to file a valid protest on the assessment with the
respondent.
IV Issues To Be Tried or Resolved
11. Petitioner interposed that it filed a valid protest on 29
April 2015 (Attached as Annex "VV["] to the petition). a. Whether the Honorable Court has jurisdiction over the
Respondent submits that there was no valid protest as instant petition.60chanRoblesvirtualLawlibrary
contemplated by the Tax Code and the Rules. The alleged
Thus, the Court of Tax Appeals had no basis in finding that
protest letter simply informed respondent that the petitioner
only when petitioner assailed the December 15, 2017
is in the process of compiling the necessary documentation to
Resolution did they raise the jurisdictional issue. When the
support the protest to said assessments.
defendant or respondent questions the court's jurisdiction
from the start, Tijam does not apply.61
12. Respondent interpose[d] that the alleged protest letter
failed to comply with the requirements of Section 6 in
Respondent's argument that petitioner had voluntarily
relation to Section 228 of the Tax Code as implemented by
submitted to the court's jurisdiction by seeking affirmative
Revenue Regulations No. 18-2013 which requires that
reliefs62 is misplaced. Voluntary submission pertains to
taxpayer shall state in his protest (i) nature of protest
jurisdiction over the person:chanroblesvirtualawlibrary
whether reconsideration or reinvestigation specifying newly

23
Jurisdiction is defined as the power and authority of a court (a) When the finding for any deficiency tax is the result of
to hear, try and decide a case. Jurisdiction over the subject mathematical error in the computation of the tax as
matter is conferred by the Constitution or by law while appearing on the face of the return; or
jurisdiction over the person is acquired by his voluntary
submission to the authority of the court or through the (b) When a discrepancy has been determined between the
exercise of its coercive processes. Jurisdiction over the res is tax withheld and the amount actually remitted by the
obtained by actual or constructive seizure placing the withholding agent; or
property under the orders of the court.63 (Citations omitted)
(c) When a taxpayer who opted to claim a refund or tax credit
The cases respondent cited-Palma v. Hon.
of excess creditable withholding tax for a taxable period was
64
Galvez  and Philippine Commercial International Bank v. Dy
determined to have carried over and automatically applied
Hong Pi65 -concern the acquisition of jurisdiction over the
the same amount claimed against the estimated tax liabilities
person of the defendant in a civil case, should coercive legal
for the taxable quarter or quarters of the succeeding taxable
processes such as summonses fail, if the defendant seeks
year; or
some kind of affirmative relief.
(d) When the excise tax due on exciseable articles has not
On the other hand, what is involved here is the Court of Tax
been paid; or
Appeals' jurisdiction over the subject matter of the case,
namely, respondent's right to question petitioner's
(e) When the article locally purchased or imported by an
assessment. No matter how many voluntary submissions a
exempt person, such as, but not limited to, vehicles, capital
defendant or respondent makes to a court, the court does
equipment, machineries and spare parts, has been sold,
not acquire jurisdiction over the subject matter when it is not
traded or transferred to non-exempt persons.
conferred by the Constitution or law. Estoppel does not
confer jurisdiction over the subject matter. 66 The taxpayers shall be informed in writing of the law and the
facts on which the assessment is made; otherwise, the
Petitioner's participation in the proceedings before the Court assessment shall be void.
of Tax Appeals did not prejudice their claim of lack of
jurisdiction, given that they had raised this issue at the Within a period to be prescribed by implementing rules and
earliest opportunity: in their Answer to the Petition for regulations, the taxpayer shall be required to respond to said
Review. Petitioner never induced the Court of Tax Appeals to notice. If the taxpayer fails to respond, the Commissioner or
adopt a theory that it had jurisdiction over respondent's his duly authorized representative shall issue an assessment
protest, and upon appeal, assume an inconsistent based on his findings.
position.67 In contrast, this Court has applied Tijam to cases
where the defending party only belatedly made jurisdiction Such assessment may be protested administratively by filing a
an issue upon their loss,68 in which event, they were already request for reconsideration or reinvestigation within thirty
barred by laches.69 (30) days from receipt of the assessment in such form and
manner as may be prescribed by implementing rules and
Petitioner argues that the Court of Tax Appeals had no regulations.
jurisdiction over respondent's Petition for Review because
the assessment had attained finality before then. Within sixty (60) days from filing of the protest, all relevant
supporting documents shall have been submitted; otherwise,
Section 228 of the National Internal Revenue Code states the the assessment shall become final.
procedure in protesting an
assessment:chanroblesvirtualawlibrary If the protest is denied in whole or in part, or is not acted
upon within one hundred eighty (180) days from submission
of documents, the taxpayer adversely affected by the
SECTION 228. Protesting of Assessment. - When the decision or inaction may appeal to the Court of Tax Appeals
Commissioner or his duly authorized representative finds that within thirty (30) days from receipt of the said decision, or
proper taxes should be assessed, he shall first notify the from the lapse of one hundred eighty (180)-day period;
taxpayer of his findings: Provided, however, That a otherwise, the decision shall become final, executory and
preassessment notice shall not be required in the following demandable. (Emphasis supplied)
cases:chanroblesvirtualawlibrary

24
Upon receipt of the audit results/assessment notices for In particular, Arriola, the revenue officer, said that the April
Letter of Authority No. 116-2013-00000017, respondent, 29, 2015 letter failed to state the protest's nature, the date of
through Lee, replied with an April 29, 2015 letter which the assessment notice, and the applicable law, rules and
reads:chanroblesvirtualawlibrary regulations, or jurisprudence on which the protest was based.
Thus, to petitioner, respondent's failure to properly protest
the assessment meant that it had attained finality. 72
This is to submit copies of our protest to the Audit
Result/Assessment Notices for Audit Result/Assessment Section 3.1.14 of Revenue Regulations No. 18-2013,
Notices for Letter of Authority LOA-116-2013-00000017 for amending Revenue Regulations No. 12-99, states what
Citysuper Incorporated TIN No.: 205-412-358 for the taxable constitutes a valid protest:chanroblesvirtualawlibrary
year 2011.

Please be informed that we are in the process of compiling 3.1.4. Disputed Assessment. - The taxpayer or its authorized
the necessary documentation to support our protest to said representative or tax agent may protest administratively
assessments, and will be requiring additional time to against the aforesaid FLD/FAN within thirty (30) days from
accomplish this.70chanRoblesvirtualLawlibrary date of receipt thereof. The taxpayer protesting an
assessment may file a written request for reconsideration or
Petitioner did not consider the April 29, 2015 letter as a valid
reinvestigation defined as follows:chanroblesvirtualawlibrary
protest, as it said in its July 13, 2015 response to
respondent:chanroblesvirtualawlibrary (i) Request for reconsideration - refers to a plea of re-
evaluation of an assessment on the basis of existing records
without need of additional evidence. It may involve both a
The requisite information and conditions prescribed under question of fact or of law or both.
the provisions of Section 6 in relation to Section 228 of the
Tax Code, as amended, as implemented by Revenue (ii) Request for reinvestigation - refers to a plea of re-
Regulations No. 18-2013, for filing a valid protest were not evaluation of an assessment on the basis of newly discovered
met, as enumerated hereunder, to wit: or additional evidence that a taxpayer intends to present in
the reinvestigation. It may also involve a question of fact or of
Your letter dated, April 29, 2015, failed to indicate/state the law or both.
following:chanroblesvirtualawlibrary
The taxpayer shall state in his protest (i) the nature of the
a. Name and address of the taxpayer; protest whether reconsideration or reinvestigation, specifying
newly discovered or additional evidence he intends to present
b. The nature of the protest, since the letter merely contained if it is a request for reinvestigation, (ii) date of the assessment
a statement that the subject taxpayer was in the process of notice, and (iii) the applicable law, rules and regulations, or
compiling documents for eventual presentation to the jurisprudence on which his protest is based, otherwise, his
bureau; protest shall be considered void and without force and
effect.chanroblesvirtuallawlibrary
c. The assessment number, date of receipt of assessment
notice and formal letter of demand; ....

d. The itemized statement of findings to which the taxpayer For requests for reinvestigation, the taxpayer shall submit all
agrees and schedule of adjustments to which the taxpayer relevant supporting documents in support of his protest
does not agree; within sixty (60) days from date of filing of his letter of
protest, otherwise, the assessment shall become final. The
e. A statement of the facts, applicable law, rules and term "relevant supporting documents" refer to those
regulations or jurisprudence in support of the protest. documents necessary to support the legal and factual bases
Premised on the foregoing, a collection letter shall be issued in disputing a - tax assessment as determined by the
against Citysuper, Inc.; calling for payment of the aforesaid taxpayer. The sixty (60)day period for the submission of all
deficiency assessments on Income Tax, VAT, Withholding tax relevant supporting documents shall not apply to requests for
on Compensation, EWT and DST for taxable year reconsideration. Furthermore, the term "the assessment shall
2011.71chanRoblesvirtualLawlibrary become final" shall mean the taxpayer is barred from
disputing the correctness of the issued assessment by

25
introduction of newly discovered or additional evidence, and
the FDDA shall consequently be denied. (2) Inaction by the Commissioner of Internal Revenue in cases
involving disputed assessments, refunds of internal revenue
If the taxpayer failed to file a valid protest against the taxes, fees or other charges, penalties in relations thereto, or
FLD/FAN within thirty (30) days from date of receipt thereof, other matters arising under the National Internal Revenue
the assessment shall become final, executory and Code or other laws administered by the Bureau of Internal
demandable. No request for reconsideration or Revenue, where the National Internal Revenue Code provides
reinvestigation shall be granted on tax assessments that have a specific period of action, in which case the inaction shall be
already become final, executory and demandable. (Emphasis deemed a denial[.]
supplied)
In respondent's Petition for Review, it contended that its
Nowhere in respondent's April 29, 2015 letter did it state the Petition was timely filed because it was assailing the July 13,
assessment notice's date and the applicable law, rules and 2015 letter, which it claimed was petitioner's "final decision
regulations, or jurisprudence on which its protest was based. on the matter of petitioner's protest against the deficiency
Attaching copies of the audit results/assessment notices is tax assessments for the taxable year 2011." 75
not stating the date of the assessment notice, any more than
attaching copies of assailed judgments to a petition without This argument is inaccurate.
stating them in the petition itself complies with the rule on
statements of material dates. In Commissioner of Internal Revenue v. Villa,76 this Court held
that the Court of Tax Appeals' jurisdiction was over the
While respondent's declaration that it was "in the process of Commissioner of Internal Revenue's decision on the protest
compiling the necessary documentation to support [its] against an assessment, and not the assessment itself. Thus,
protest to said assessments"73 could imply that it was the period to invoke judicial review must be counted from
requesting a reinvestigation, its failure to explicitly state this receipt of the Commissioner's decision on the disputed
means that petitioner had no way of knowing whether it assessment.77
should monitor the 60-day period stated in Revenue
Regulations No. 18-2013. Here, however, respondent's protest was void for failing to
comply with the requirements of Revenue Regulations No.
Section 228 of the National Internal Revenue Code is clear. 18-2013, as mandated by Section 228 of the National Internal
The administrative protest must be filed not only within the Revenue Code. Respondent erred in claiming that the July 13,
stated period, but also "in such form and manner as may be 2015 letter was petitioner's "final decision" on its protest,
prescribed by implementing rules and regulations." there being no valid protest to speak of. Notably, the July 13,
Respondent's April 29, 2015 letter did not comply with the 2015 letter did not discuss the merits of any communication
three requirements of Revenue Regulations No. 18-2013. sent by respondent after its April 29, 2015 letter, but merely
stated that no valid protest was filed.78
The Court of Tax Appeals is a court of special
jurisdiction.74 Section 7 of Republic Act No. 9282 states what The circumstances here are analogous to those in Ker &
matters involving the Commissioner of Internal Revenue are Company, Ltd. v. Court of Tax Appeals,79 where this Court
within its exclusive appellate found that the material date was the issuance from the
jurisdiction:chanroblesvirtualawlibrary Commissioner which contained the original demand, and not
its reiteration:chanroblesvirtualawlibrary

SECTION 7. Jurisdiction. - The CTA shall exercise:

It is argued that the decision or ruling of the Collector which
(a) Exclusive appellate jurisdiction to review by appeal, as should be appealed to the Tax Court is the former's letter
herein provided:chanroblesvirtualawlibrary dated January 5, 1954 (Exh. 13), and that the 30-period
provided in section 11, commenced to run only on February
(1) Decisions of the Commissioner of Internal Revenue in
1, 1956, the date on which the petitioner-appellant received
cases involving disputed assessments, refunds of internal
the Collector's letter dated January 23, 1956. This contention
revenue taxes, fees or other charges, penalties in relation
is without merit. The Collector's letter dated January 23,
thereto, or other matters arising under the National Internal
1956, partly reads as follows:chanroblesvirtualawlibrary
Revenue or other laws administered by the Bureau of Internal
Revenue;

26
"With reference to your letter dated August 1, 1955, was appealed was that of January 5, 1954 and that the 30-day
concerning the deficiency income tax liabilities of Ker & Co., period should have started from the receipt of the said letter
Ltd., Manila, for 1947, 1948, 1949 and 1950, I regret to have on January 25, 1954 (Exh. 14). No appeal having been taken
to inform you that, notwithstanding your allegations therein, from this decision, the same became final, conclusive and
this Office still finds no justification to alter, reverse or modify executory (Roxas v. Sayoc, G. R. No. L-8502, Nov. 29,
the assessments issued against your client for said years. 1956).80chanRoblesvirtualLawlibrary

When a taxpayer files a petition for review before the Court

As elucidated in our letter to you of January 5, 1954, the
of Tax Appeals without validly contesting the assessment with
alleged home-leave liabilities which your client claimed as
the Commissioner of Internal Revenue, the appeal is
deduction were disallowed as such because the same were
premature and the Court of Tax Appeals has no
not actually incurred but were mere reserve accounts for
jurisdiction:chanroblesvirtualawlibrary
contingent purpose. No evidence were presented by you
showing that the said expenses were actually incurred in the
years of their deductions or in the subsequent years....". Since in the instant case the taxpayer appealed the
It is thus noted that the allegation in the above quoted letter assessment of the Commissioner of Internal Revenue without
is simply a reiteration of the previous demand as contained in previously contesting the same, the appeal was premature
the Collector's letter of January 5, 1954 (Exh. 13). Again the and the Court of Tax Appeals had no jurisdiction to entertain
Collector sent to the petitioner-appellant the demand letter said appeal. For, as stated, the jurisdiction of the Tax Court is
dated July 28, 1954 (Exh. 18), which merely reiterated the to review by appeal decisions of Internal Revenue on
demand dated January 5, 1954. Although petitioner denied disputed assessments. The Tax Court is a court of special
having received said letter, yet it is significant to mention that jurisdiction. As such, it can take cognizance only of such
when it was presented to the lower court as Exhibit 18 for the matters as are clearly within its jurisdiction. 81 (Citation
Collector, the petitioner had not objected to it. This is the first omitted)
time they attack its receipt. It is finally to be observed that Section 228 of the National Internal Revenue Code requires
the ruling of the Collector contained in his letter of January 5, that administrative protests against assessments conform to
1954, remained unaltered and unmodified. As the Court a the rules and regulations issued by the Bureau of Internal
quo has correctly commented - Revenue. Respondent's April 29, 2015 letter did not comply
"Under the facts stated above, we find that the decision of with the requirements set down in Revenue Regulations No.
respondent which is appealable to this Court under Sections 7 18-2013. There was no administrative protest to speak of,
and 11 of Republic Act No. 11 is the one contained in his and no decision on a disputed assessment to assail. Thus, the
letter of January 5, 1954, the same having remained Court of Tax Appeals had no jurisdiction over the Petition for
unaltered and unmodified up to the date the appeal was filed Review assailing the July 13, 2015 letter.
(See Angel Saraos v. CIR, CTA Case No. 229, March 5, 1956;
Merced Drug Store v. CIR, CTA Case No. 180, May 21, 1956.... Since the Court of Tax Appeals has no jurisdiction, there is no
longer any need to resolve whether it gravely abused its
Moreover, since a letter of demand or assessment was sent discretion in refusing to admit in evidence the authorization
by the Collector of Internal Revenue to a taxpayer contains a letter issued to Lee.
determination of the tax liability of the latter, such letter or
assessment must be considered as the 'decision' appealable WHEREFORE, the Petition for Certiorari is GRANTED. The
to this Court. The Supreme Court appears to recognize the December 15, 2017 and March 20, 2018 Resolutions of the
same view when it held that the assessment made by the Court of Tax Appeals in CTA Case No. 9117
Collector of Internal Revenue is the substantive and are REVERSED and SET ASIDE. The Petition for Review filed
dispositive part of his decision' (Ventanilla v. BTA, G.R. No. L- before the Court of Tax Appeals is DISMISSED.
7384, prom. Dee. 19, 1955). Under circumstances comparable
with our law, the United States Supreme Court in the case of SO ORDERED.
Gull v. U.S. (1935, 295 U.S. 247; 79 L. ed., 1941) sustained the STEEL CORPORATION VS. BUREAU OF CUSTOMS G.R. NO.
same theory that the assessment is the action of an 220502 FEBRUARY 12, 2018
administrative agency equivalent to a decision and is
therefore given the force of a judgment". This petition for review on certiorari under Rule 45 of the
Rules of Court (Rules) seeks to reverse and set aside the
This being the case, it logically follows that the decision which November 19, 2014 Decision1 and September 15, 2015

27
Resolution2 of the Court of Appeals (CA) in CA-G.R. SP No. effects of the aforequoted provision. As agreed, the municipal
127046 dismissing the appeal and affirming the Regional Trial government waived the taxes and other fees that may be due
Court (RTC) Order3 dated June 6, 2012, which stated: from STEELCORP starting the year 2011 and until a final
rehabilitation plan is approved by the court. 8
WHEREFORE, premises considered, the Motion for
Reconsideration filed by the Office of the Solicitor General In a letter9 dated October 1, 2010, and addressed to Bureau
regarding the Order dated January 12, 2012, the Omnibus of Customs (BOC) Commissioner Angelito A. Alvarez,
Motion filed by the BIR and the Motion for Reconsideration STEELCORP manifested its intent to avail of the privileges
filed by the Office of the Solicitor General with regard the granted by Section 19 of R. A. No. 10142, stressing that the
Order dated March 5, 2012 are granted. import duties and fees/VAT which the BOC wanted to impose
on and collect cannot be made without violating the
Accordingly, the Orders dated January 12, 2012 and March 5,
aforesaid provision. It appears that STEELCORP had imported
2012 are set aside.
raw materials for use in its manufacture of steel products,
The Motion for Execution filed by plaintiff is denied. Likewise, which the BOC assessed with taxes in the sum of
the writ of preliminary injunction issued on March 8, 2012 is P41,206,120.00.10
hereby dissolved.
In a Memorandum11 dated October 26, 2010, Commissioner
SO ORDERED.4 Alvarez, upon the recommendation of the BOC Director of
Legal Service and the concurrence of the Deputy
The factual antecedents are as follows: On September 11, Commissioner of the BOC Revenue Collection Management
2006, Equitable PCI Bank, Inc. initiated a petition for Group, approved the waiver of all taxes and fees which are
rehabilitation5 of Steel Corporation of the Philippines due to STEELCORP. On March 8, 2011, he sent his
(STEELCORP), a domestic corporation organized and existing 1st Indorsement to the Department of Finance (DOF), stating
under Philippine laws, with principal place of business that "the release of the [Memorandum dated October 26,
in Barangay Munting Tubig, Balayan, Batangas, and is 2010] had been put on hold pending clearance from the
engaged in the manufacture and distribution of cold-rolled, [DOF]. The attention of [DOF] is invited to the revenue loss
galvanized and pre-painted steel sheets and coils and that may be suffered by the Bureau in the implementation
fabrication of metal building products. The case was docketed thereof as shown by the attached summary of importations
as SP. Proc. No. 06-7993 and pending before the RTC of for the past three years, and the fact that the said company is
Batangas City. Finding the petition to be sufficient in form and still continuously importing raw materials up to the present.
substance, the court issued an Order 6 on September 12, "12
2006, which directed, among others, the "[stay] [of] all claims
against [STEELCORP], by all other corporations, persons or Subsequently, DOF Undersecretary Carlo A. Carag issued 2nd
entities insofar as they may be affected by the present Indorsement13 dated May 26, 2011, which disapproved the
proceedings, until further notice from this Court, pursuant to recommendation of Commissioner Alvarez based on two
Sec. 6, of Rule 4 of the Interim Rules of Procedure on grounds: (1) the Stay Order relied upon by STEELCORP is not
Corporate Rehabilitation." the same as the Commencement Order required by law to
consider the taxes and customs duties waived; and (2)
While the rehabilitation proceedings were pending, Republic assuming that the Stay Order is the same as the
Act (R.A.) No. 10142, or the Financial Rehabilitation and Commencement Order, the waiver contemplated under
Insolvency Act (FRIA) of 2010 was enacted.7 Section 19 of Section 19 does not include taxes and customs duties due on
which mandates: importations or shipments that were made by STEELCORP
after the issuance of the Commencement Order.
SEC. 19. Waiver of Taxes and Fees Due to the National
Government and to Local Government Units (LGUs). - Upon STEELCORP elevated the matter to the Office of the President
issuance of the Commencement Order by the court, and until (OP), which docketed the case as O.P. No. 11-F-211.
the approval of the Rehabilitation Plan or dismissal of the
petition, whichever is earlier, the imposition of all taxes and Undersecretary Carag moved to dismiss the appeal for lack of
fees, including penalties, interests and charges thereof, due jurisdiction. He noted that "the assailed 2nd Indorsement
to the national government or to LGUs shall be considered dated May 26, 2011 issued by [the DOF] involves customs
waived, in furtherance of the objectives of rehabilitation. matters for automatic review from the decision of the
Commissioner of Customs, which was adverse to the
On December 16, 2010, the representatives of STEELCORP Government, under Section 2315 of the Tariff and Customs
and the Municipality of Balayan, Batangas met to discuss the Code of the Philippines (TCCP), as amended. Verily, it is the

28
Court of Tax Appeals (CTA) which has the  exclusive appellate possession or control; thus, the Status Quo Order is null and
jurisdiction  to review the decision of the Secretary of Finance void. Also, under Section 2315 of the TCCP, the
pursuant to  Section 7, Republic Act No. 1125, as amended. 2nd Indorsement dated May 26, 2011 should be appealed to
"14 In opposition,15 STEELCORP contended that Section 2315 the CTA; hence, the appeal to the OP did not toll the running
of the TCCP is irrelevant since said provision presupposes that of the 30-day reglementary period provided under Section 11
there is already an assessment of duties by the Collector of of R.A. No. 9282. Reiterating the position of the BOC, the OSG
Customs, which is not so in this case because the appeal further contended that: (1) the Stay Order is not the same as
"does not involve a decision of the Commissioner in a case the Commencement Order required by law to consider the
involving the liability for customs duties, fees or other money taxes and customs duties waived; and (2) assuming that both
charges, seizure, detention or release of property affected, orders are the same, the waiver contemplated under Section
fine, forfeitures or other penalties imposed in relation thereto, 19 does not include the payment of taxes and customs duties
or other matters arising under the Customs Laws or other law on STEELCORP's future importations or incoming shipments.
or part of law administered by the Bureau of Customs. " It was STEELCORP opposed the motion.22
argued that the OP is vested with quasi-judicial functions
On March 5, 2012, the RTC denied the MTD and directed the
under Administrative Order No. 18, Series of 1987.
issuance of a WPI "enjoining the defendants, their agents,
On September 14, 2011, STEELCORP filed a representatives and assigns acting in their behalf, from
16
Complaint  against the respondents for injunction with assessing, imposing, or collecting all taxes, customs duties
application for immediate issuance of temporary restraining and fees due from the national or local government until after
order (TRO) and writ of preliminary injunction (WPI). It was the final disposition of this case."23 The writ was issued on
docketed as Civil Case No. 5042 and raffled before RTC, Br. 10 March 8, 2012.24
of Balayan, Batangas. The action sought to restrain the
The opposing parties filed various motions before the RTC. In
respondents from assessing and continuing to assess
its Order25 dated June 6, 2012, the issues raised were
STEELCORP of all taxes and fees due to the national
simultaneously resolved as follows:
government, including penalties, interests, and charges from
the issuance of the Stay Order on September 12, 2006 and 1. Denial of STEELCORP's motion to strike Answer filed by the
until final court approval of the rehabilitation plan. BIR;
In its Order17 dated September 15, 2011, the RTC issued a 72- The Memorandum of Agreement (MOA) dated March 17,
hour TRO which was later extended until the application for 2012 between the OSG and the BIR, is an exception to
preliminary injunction could be heard. On November 9, 2011, Memorandum Circular No. 152 issued on May 7, 1992. The
the RTC issued a Status Quo Order18 extending the effects of MOA authorized the BIR-handling lawyer to be the lead
the TRO until such time that the respondents were given the lawyer in cases of first instance filed before the CTA Divisions,
opportunity to be heard and the issue on the issuance of Metropolitan Trial Courts, Municipal Trial Courts, Municipal
preliminary injunction had been resolved. Meantime, on Circuit Trial Courts, Regional Trial Courts, Department of
November 9, 2011, the OP deferred the resolution of O.P. No. Justice, and other administrative agencies. Hence, the BIR
11-F-211 until final resolution of Civil Case No. 5042.19 lawyer has the authority to appear for and its behalf and,
consequently, to file an Answer in this case.
On January 12, 2012, the court ordered the Manila
International Container Port (MICP) District Collector of 2. Denial of STEELCORP's urgent ex-parte motion for
Customs to immediately comply with the Status Quo Order execution of the January 12, 2012 Order;
by refraining the imposition of customs duties and taxes on
the importation of raw materials of STEELCORP and to The motion was premature in view of the necessity to resolve
immediately release to the corporation the raw materials first the OSG's motion for reconsideration of the January 12,
without payment of duties/taxes and without further 2012 Order.
delay.20 On the same day, the Office of the Solicitor General
3. Grant of the OSG's motion for reconsideration of the
(OSG), acting for and in behalf of the BIR, BOC, DOF, and OP,
January 12, 2012 Order; the BIR's omnibus motion for
filed a Motion to Dismiss (MTD).21 It was argued that the RTC
reconsideration and to dissolve the WPI; and the OSG's
has no jurisdiction to hear and determine the complaint
motion for reconsideration of the March 5, 2012 Order;
because, under Section 602 (g) of Presidential Decree (P.D.)
No. 1464 or the TCCP, the BOC acquires exclusive jurisdiction The BIR and the BOC are the agencies tasked to collect taxes
over imported goods for purposes of enforcement of the and customs duties, respectively. Inasmuch as what are to be
customs laws from the moment the goods are actually in its collected, how much, when, and from whom as provided by

29
law are to be ascertained and discharged by said agencies, collecting customs duties and taxes on the importations made
the question of who are to be exempted shall also be by STEELCORP. Under Section 7 (4) of R.A. No. 1125, as
determined by them. The issue of whether STEELCORP may amended by R.A. No. 9282, the BOC's denial of the request
avail of the benefits of R.A. No. 10142 should have been for exemption should have been appealed to the CTA, which
raised before the CTA after the BOC denied the claim. has the power to issue an injunction pursuant to Section 11,
Paragraph 4 thereof.
4. Denial of STEELCORP's motion to strike the BIR's omnibus
motion and the OSG's motion for reconsideration of the A motion for reconsideration was filed, but it was denied on
March 5, 2012 Order; September 15, 2015; hence, this petition.

The BIR's omnibus motion and the OSG's motion for STEELCORP maintains that the CA erred when it sustained the
reconsideration contained proper notices of hearing and the trial court's act of giving due course to the OSG and the BIR
BIR lawyers are authorized to appear for and its behalf. motions that were set for hearing on days that were declared
as national holiday and/or beyond the period prescribed by
Aggrieved, STEELCORP moved for reconsideration, which was
the Rules. Likewise, it insists that the present controversy
denied on September 17, 2012.26 Consequently, it filed before
does not assail its liability to pay customs duties, taxes or
the CA an appeal under Rule 41 of the Rules to challenge the
other charges on its importation of raw materials. Rather, the
RTC Orders dated June 6, 2012 and September 17, 2012. Two
issue is whether a corporation placed under corporate
issues were raised, to wit:
rehabilitation can avail the benefits of Section 19 of R.A. No.
I. Whether or not the trial court erred when it allowed and 10142, which issue is cognizable by the RTC and whose
gave due course to the separate motions of the BOC and the decision may be appealed to the CA or the Supreme Court
BIR despite their procedural and jurisdictional infirmities; and and not to any other court like the CTA. STEELCORP stresses
that it is not raising any issue as to the amount and
II. Whether or not the trial court erred in lifting the collectibility of the taxes and duties on its importation but is
preliminary injunction and ordering the dismissal of the only seeking compliance by the respondents of their
complaint.27 obligations under Section 19.
Anent the first issue, STEELCORP pointed out that the notice At the outset, it must be said that this petition was already
of hearing on the OSG's motion for reconsideration indicated denied on November 11, 2015.28 However, it was reinstated
that it was submitted for the consideration and approval of on June 15, 2016 when STEELCORP’s motion for
the RTC on April 6, 2012, which was a Good Friday. As to the reconsideration was granted.29
BIR's omnibus motion, the notice of hearing was dated March
28, 2012 but the motion was submitted for hearing on April Once again, We deny.
12, 2012; thus, beyond the ten-day period required under
In Philippine National Bank v. Judge Paneda,30 the Court
Section 5, Rule 15 of the Rules. It also fell on a Monday,
similarly held:
violating Section 7, Rule 15 thereof.
The courts  a quo also stress that the said Motion failed to
With respect to the second issue, STEELCORP argued that the
comply with Sections 5 and 7 of Rule 15, Rules of Court, to
OP recognized that the issue involved in this case - the
wit:
interpretation of Sections 19 and 146 of R.A. No. 10142 - is a
legal question. Moreover, the parties are estopped by their Section 5. Notice of hearing. - The notice of hearing shall be
agreement to refer the matter to the trial court, which, being addressed to all parties concerned, and shall specify the time
one of general jurisdiction, had sufficient authority to assume and date of the hearing which must not be later than ten (10)
over the case. days after the filing of the motion.

On November 19, 2014, the CA dismissed the appeal. It was Section 7. Motion day. - Except for motions requiring
opined that there was no infirmity in the notices of hearing of immediate action, all motions shall be scheduled for hearing
the motions filed by the OSG and the BIR because STEELCORP on Friday afternoon, or if Friday is a non-working day, in the
was given ample time to oppose them and prepare afternoon the next working day.
appropriate pleadings to refute the same. On the second
The RTC held that petitioner's Motion which was filed on
issue, the CA reminded that it is the law that confers
December 3, 1998, and was set for hearing on December 21,
jurisdiction and not experience, practice or tradition, or
1998, eight days beyond the reglementary period prescribed
agreement of the parties. It was noted that the complaint for
under Section 5, Rule 15, and that the Motion set the hearing
injunction sought to enjoin the BOC and the BIR from
on a Monday and not on a Friday. The C A held that the
30
notice of hearing of said Motion was not addressed to the the said motion for reconsideration was furnished to the
parties concerned. counsel of herein private respondents.

The foregoing conclusions are incorrect. In the present case, records reveal that the notices in the
Motion were addressed to the respective counsels of the
The Court, in Maturan v. Araula, held:
private respondents and they were duly furnished with copies
As enjoined by the Rules of Court and the controlling of the same as shown by the receipts signed by their staff or
jurisprudence, a liberal construction of the rules and the agents.
pleadings is the controlling principle to effect substantial
Consequently, the Court finds that the petitioner substantially
justice.
complied with the pertinent provisions of the Rules of Court
The rule requiring notice to herein private respondents as and existing jurisprudence on the requirements of motions
defendant and intervenors in the lower court with respect to and pleadings.31
the hearing of the motion filed by herein petitioner for the
Section 6, Rule 1 of the Rules provides that the rules should
reconsideration of the decision of respondent Judge, has
be liberally construed in order to promote their objective of
been substantially complied with. While the notice was
securing a just, speedy and inexpensive disposition of every
addressed only to the clerk of court, a copy of the said
action and proceeding. Rules of procedure are tools designed
motion for reconsideration was furnished counsel of herein
to facilitate the attainment of justice, and courts must avoid
private respondents, which fact is not denied by private
their strict and rigid application which would result in
respondent. As a matter of fact, private respondents filed
technicalities that tend to frustrate rather than promote
their opposition to the said motion for
substantial justice.32 A liberal construction is proper where
reconsideration dated January 14, 1981 after the hearing of
the lapse in the literal observance of a procedural rule has
the said motion was deferred and re-set twice from
not prejudiced the adverse party and has not deprived the
December 8, 1980, which was the first date set for its hearing
court of its authority.33
as specified in the notice. Hence, private respondents were
not denied their day in court with respect to the said motion With regard the rules on notice of hearing on a motion, the
for reconsideration. The fact that the respondent Judge CA correctly held that the test is the presence of the
issued his order on January 15, 1981 denying the motion for opportunity to be heard, as well as to have time to study the
reconsideration for lack of merit as it merely repeated the motion and meaningfully oppose or controvert the grounds
same grounds raised in the memorandum of herein petitioner upon which it is based.34 Considering that STEELCORP was
as plaintiff in the court below, one day after the opposition to afforded the opportunity to be heard through the pleadings
the motion for reconsideration was filed on January 14, 1981 filed in opposition to the motions of the OSG and the BIR, We
by herein private respondents, demonstrates that the said view that the requirements of procedural due process were
opposition of herein respondents was considered by the substantially complied with and that the compliance justified
respondent Judge. a departure from a literal application of the rules.

xxx xxx xxx The CA also did not err in affirming the June 6, 2012 Order of
the RTC which dissolved the writ of preliminary injunction
The motion for reconsideration of herein petitioner, while
and dismissed STEELCORP's complaint for lack of jurisdiction.
substantially based on the same grounds he invoked in his
memorandum after the case was submitted for decision, is Certainly, the consent of the parties does not confer
not pro forma as it points out specifically the findings or jurisdiction over the subject matter. Jurisdiction cannot be
conclusions in the judgment which he claims are not waived; it is not dependent on the consent or objection or
supported by the evidence or which are contrary to the acts or omissions of the parties or any one of them. 35 The
law (City of Cebu v. Mendoza, L-26321, Feb. 25, 1975, 62 jurisdiction of the court over a subject matter is conferred
SCRA 440, 446), aside from stating additional specific only by the Constitution or by law as well as determined by
reasons for the said grounds. (Emphasis supplied) the allegations in the complaint and the character of the
relief sought.36
Thus, even if the Motion may be defective for failure to
address the notice of hearing of said motion to the parties
concerned, the defect was cured by the court's taking
cognizance thereof and the fact that the adverse party was
otherwise notified of the existence of said pleading. There is
substantial compliance with the foregoing rules if a copy of

31
In reverting to the earlier rulings that upheld the exclusive other matters arising under the National Internal Revenue
jurisdiction of the CTA to determine the constitutionality or Code or other laws administered by the Bureau of Internal
validity of tax laws, rules and regulations, and other Revenue;
administrative issuances, this Court recently elucidated
2) Inaction by the Commissioner of Internal Revenue in cases
in Banco De Oro v. Republic of the Philippines 37 the subject
involving disputed assessments, refunds of internal revenue
matter jurisdiction of the CTA:
taxes, fees or other charges, penalties in relation thereto, or
On June 16, 1954, Republic Act No. 1125 created the Court of other matters arising under the National Internal Revenue
Tax Appeals not as another superior administrative agency as Code or other laws administered by the Bureau of Internal
was its predecessor - the former Board of Tax Appeals - but as Revenue, where the National Internal Revenue Code provides
a part of the judicial system with exclusive jurisdiction to act a specific period of action, in which case the inaction shall be
on appeals from: deemed a denial;

(1) Decisions of the Collector of Internal Revenue in cases 3) Decisions, orders or resolutions of the Regional Trial Courts
involving disputed assessments, refunds of internal revenue in local tax cases originally decided or resolved by them in the
taxes, fees or other charges, penalties imposed in relation exercise of their original or appellate jurisdiction;
thereto, or other matters arising under the National Internal
4) Decisions of the Commissioner of Customs in cases
Revenue Code or other law or part of law administered by the
involving liability for customs duties, fees or other money
Bureau of Internal Revenue;
charges, seizure, detention or release of property affected,
(2) Decisions of the Commissioner of Customs in cases fines, forfeitures or other penalties in relation thereto, or
involving liability for customs duties, fees or other money other matters arising under the Customs Law or other laws
charges; seizure, detention or release of property affected administered by the Bureau of Customs;
fines, forfeitures or other penalties imposed in relation
5) Decisions of the Central Board of Assessment Appeals in
thereto; or other matters arising under the Customs Law or
the exercise of its appellate jurisdiction over cases involving
other law or part of law administered by the Bureau of
the assessment and taxation of real property originally
Customs; and
decided by the provincial or city board of assessment appeals;
(3) Decisions of provincial or city Boards of Assessment
6) Decisions of the Secretary of Finance on customs cases
Appeals in cases involving the assessment and taxation of real
elevated to him automatically for review from decisions of
property or other matters arising under the Assessment Law,
the Commissioner of Customs which are adverse to the
including rules and regulations relative thereto.
Government under Section 2315 of the Tariff and Customs
Republic Act No. 1125 transferred to the Court of Tax Code;
Appeals jurisdiction over all matters involving assessments
7) Decisions of the Secretary of Trade and Industry, in the
that were previously cognizable by the Regional Trial Courts
case of nonagricultural product, commodity or article, and
(then courts of first instance).
the Secretary of Agriculture in the case of agricultural
In 2004, Republic Act No. 9282 was enacted. It expanded the product, commodity or article, involving dumping and
jurisdiction of the Court of Tax Appeals and elevated its rank countervailing duties under Section 301 and 302,
to the level of a collegiate court with special jurisdiction. respectively, of the Tariff and Customs Code, and safeguard
Section 1 specifically provides that the Court of Tax Appeals is measures under Republic Act No. 8800, where either party
of the same level as the Court of Appeals and possesses "all may appeal the decision to impose or not to impose said
the inherent powers of a Court of Justice." duties.

Section 7, as amended, grants the Court of Tax Appeals the The Court of Tax Appeals has undoubted jurisdiction to pass
exclusive jurisdiction to resolve all tax-related issues: upon the constitutionality or validity of a tax law or
regulation when raised by the taxpayer as a defense in
Section 7. Jurisdiction. - The CTA shall exercise:
disputing or contesting an assessment or claiming a refund.
(a) Exclusive appellate jurisdiction to review by appeal, as It is only in the lawful exercise of its power to pass upon all
herein provided: matters brought before it, as sanctioned by Section 7 of
Republic Act No. 1125, as amended.
1) Decisions of the Commissioner of Internal Revenue in cases
involving disputed assessments, refunds of internal revenue This Court, however, declares that the Court of Tax Appeals
taxes, fees or other charges, penalties in relation thereto, or may likewise take cognizance of cases directly challenging the

32
constitutionality or validity of a tax law or regulation or provincial or city Boards of Assessment Appeals. Note also
administrative issuance (revenue orders, revenue that in defining the cases that may be reviewed the law
memorandum circulars, rulings). begins by enumerating them and then adds a general clause
pertaining to other matters that may arise under the National
Section 7 of Republic Act No. 1125, as amended, is explicit
Internal Revenue Code, the Customs Law and the Assessment
that, except for local taxes, appeals from the decisions of
Law. This shows that the "other matters" that may come
quasi-judicial agencies (Commissioner of Internal Revenue,
under the general clause should be of the same nature as
Commissioner of Customs, Secretary of Finance, Central
those that have preceded them applying the rule of
Board of Assessment Appeals, Secretary of Trade and
construction known as ejusdem generis. In other words, in
Industry) on tax-related problems must be
order that a matter may come under the general clause, it is
brought exclusively to the Court of Tax Appeals.
necessary that it belongs to the same kind or class therein
In other words, within the judicial system, the law intends specifically enumerated. Otherwise, it should be deemed
the Court of Tax Appeals to have exclusive jurisdiction to foreign or extraneous and is not included.42
resolve all tax problems. Petitions for writs
From the clear purpose of R.A. No. 1125 and its amendatory
of certiorari against the acts and omissions of the said quasi-
laws, the CTA, therefore, is the proper forum to file the
judicial agencies should, thus, be filed before the Court of Tax
appeal. Matters calling for technical knowledge should be
Appeals.
handled by such court as it has the specialty to adjudicate tax,
Republic Act No. 9282, a special and later law than Batas customs, and assessment cases.43
Pambansa Blg. 129 provides an exception to the original
Section 11, Paragraph 4 of R.A. No. 1125, as amended by R.A.
jurisdiction of the Regional Trial Courts over actions
No. 9282, embodies the rule that an appeal to the CTA will
questioning the constitutionality or validity of tax laws or
not suspend the payment, levy, distraint, and/or sale of any
regulations. Except for local tax cases, actions directly
property of the taxpayer for the satisfaction of his tax liability
challenging the constitutionality or validity of a tax law or
as provided by existing law. Nonetheless, when, in the
regulation or administrative issuance may be filed directly
opinion of the CTA, the collection may jeopardize the interest
before the Court of Tax Appeals.
of the Government and/or the taxpayer, it may suspend the
Furthermore, with respect to administrative issuances said collection and require the taxpayer either to deposit the
(revenue orders, revenue memorandum circulars, or rulings), amount claimed or to file a surety bond for not more than
these are issued by the Commissioner under its power to double the amount. Yet the requirement of deposit or surety
make rulings or opinions in connection with the bond may be dispensed with. We held in Pacquiao v. Court of
implementation of the provisions of internal revenue laws. Tax Appeals, First Division:44
Tax rulings, on the other hand, are official positions of the
Thus, despite the amendments to the law, the Court still
Bureau on inquiries of taxpayers who request clarification on
holds that the CTA has ample authority to issue injunctive
certain provisions of the National Internal Revenue Code,
writs to restrain the collection of tax and to even dispense
other tax laws, or their implementing regulations. Hence, the
with the deposit of the amount claimed or the filing of the
determination of the validity of these issuances clearly falls
required bond, whenever the method employed by the CIR in
within the exclusive appellate jurisdiction of the Court of Tax
the collection of tax jeopardizes the interests of a taxpayer
Appeals under Section 7 (1) of Republic Act No. 1125, as
for being patently in violation of the law. Such authority
amended, subject to prior review by the Secretary of Finance,
emanates from the jurisdiction conferred to it not only by
as required under Republic Act No. 8424.38
Section 11 of R.A. No. 1125, but also by Section 7 of the same
With the enactment of R.A. No. 1125, the CTA was granted law, which, as amended provides:
the exclusive appellate jurisdiction to review by appeal all
Sec. 7. Jurisdiction. - The Court of Tax Appeals shall exercise:
cases involving disputed assessments of internal revenue
taxes, customs duties, and real property taxes. 39 In general, it a. Exclusive appellate jurisdiction to review by appeal, as
has jurisdiction over cases involving liability for payment of herein provided:
money to the Government or the administration of the laws
1. Decisions of the Commissioner of Internal Revenue in cases
on national internal revenue, customs, and real property. 40 As
involving disputed assessments, refunds of internal revenue
held in Ollada v. Court of Tax Appeals, et al. :41
taxes, fees or other charges, penalties imposed in relation
Note that the law gives to the Court of Tax Appeals exclusive thereto, or other matters arising under the National Internal
appellate jurisdiction to review the decisions of the Collector Revenue or other laws administered by the Bureau of
of Internal Revenue, the Commissioner of Customs, and the Internal Revenue. x x x x [Emphasis Supplied]
33
From all the foregoing, it is clear that the authority of the resultant imposition of excise tax arising from the CIR's
courts to issue injunctive writs to restrain the collection of tax interpretation of Section 148(e) of the NIRC.
and to dispense with the deposit of the amount claimed or
the filing of the required bond is not simply confined to cases On February 13, 2013, the CTA issued the first assailed
where prescription has set in. As explained by the Court in Resolution,11 reversing its initial dismissal of Petron's petition
those cases, whenever it is determined by the courts that for review and giving due course thereto. 12 It explained that
the method employed by the Collector of Internal Revenue the controversy was not essentially about the
in the collection of tax  is not sanctioned by law, constitutionality or legality of CMC No. 164-2012 but a
the bond requirement under Section 11 of R.A. No. question on the propriety of the interpretation of Section
1125 should be dispensed with. The purpose of the rule is 148(e) of the NIRC in reference to the tax treatment of
not only to prevent jeopardizing the interest of the taxpayer, Petron's alkylate importation, which is within the CTA's
but more importantly, to prevent the absurd situation jurisdiction to review.13 The CTA also held that the substantial
wherein the court would declare "that the collection by the and grave damage and injury that would be suffered from the
summary methods of distraint and levy was violative of law, threatened collection of excise tax warranted the non-
and then, in the same breath require the petitioner to deposit exhaustion of administrative remedies and justified Petron's
or file a bond as a prerequisite for the issuance of a writ of immediate resort to judicial action. 14
injunction."45
The CIR filed a motion for reconsideration, 15 which the CTA
WHEREFORE, the petition for review on certiorari  is DENIED.
denied in the second assailed Resolution 16 dated May 8, 2013.
The November 19, 2014 Decision and September 15, 2015
Subsequently, the CIR elevated the matter to the Court
Resolution of the Court of Appeals in CA-G.R. SP No. 127046
through a petition for certiorari,17 alleging that the CTA had
are AFFIRMED.
no jurisdiction to take cognizance of a case involving the CIR's
SO ORDERED. exercise of interpretative or quasi-legislative functions and
that there was yet no final decision by the COC that was
properly appealable to the CTA.
COMMISSIONER OF INTERNAL REVENUE VS. COURT OF TAX
In the July 15, 2015 Decision, the Court upheld the CIR's
APPEALS G.R. NO. 207843 FEBRUARY 14, 2018
position that the CTA could not take cognizance of the case
For the Court's resolution is a motion for because the latter's jurisdiction to resolve tax disputes
reconsideration1 filed by respondent Petron Corporation excluded the power to rule on the constitutionality or validity
(Petron) on the Court's Decision2 dated July 15, 2015 which of a law, rule or regulation and that, in any case, it was
set aside the Resolutions dated February 13, 2013 3 and May premature to elevate a customs collector's assessment
8, 20134 issued by the Court of Tax Appeals (CTA) in CTA Case without a prior protest and an appeal to the
No. 8544 and thereby, dismissed the petition for COC.18 Accordingly, the Court ordered the dismissal of
review5 before the court a quo for lack of jurisdiction and Petron's petition for review filed before the CTA. 19
prematurity.
Dissatisfied, Petron filed a motion for reconsideration 20 dated
The Facts October 5, 2015.

On June 29, 2012, petitioner Commissioner of Internal

Revenue (CIR) issued a Letter6 interpreting Section 148(e) of
The Issue Before the Court
the National Internal Revenue Code 7 (NIRC) and thereby,
opining that "alkylate, which is a product of distillation similar
to naphtha, is subject to tax."8 In implementation thereof, the The sole issue in this case is whether or not the Court's July
Commissioner of Customs (COC) issued Customs 15, 2015 Decision, which ordered the dismissal of Petron's
Memorandum Circular (CMC) No. 164-2012. Not long after, petition for review before the CTA on the grounds of lack of
and in compliance with CMC No. 164-2012, the Collector of jurisdiction and prematurity, should be reconsidered.
Customs assessed excise tax on Petron's importation
of alkylate.9

Petron filed a petition for review 10 before the CTA, contesting The Court's Ruling
the allegedly erroneous classification of alkylate and the

34
 Corollary to this disposition, however, the Court's Third
At the onset, Petron insists that the CTA has jurisdiction to Division extended its discussion on the issue regarding the
pass upon the validity of the CIR's interpretative ruling CTA's jurisdiction over the rulings of the CIR, viz.:
on alkylate, arguing that the CTA may rule on the validity of a
revenue regulation, ruling, issuance or other matters arising
under the NIRC and other tax laws administered by the Evidently, City of Manila can be considered as a departure
Bureau of Internal Revenue (BIR). As basis, Petron cites for from Ursal in that in spite of there being no express grant in
the first time in its motion for reconsideration the Court's law, the CTA is deemed granted with powers of certiorari by
ruling in The Philippine American Life and General Insurance implication. Moreover, City of Manila diametrically
Company v. The Secretary of Finance and the Commissioner opposes British American Tobacco to the effect that it is now
of Internal Revenue21 (Philamlife). within the power of the CTA, through its power of certiorari,
to rule on the validity of a particular administrative rule or
Philamlife is a 2014 case decided by a Division of the Court, regulation so long as it is within its appellate jurisdiction.
which controversy arose from an unfavorable ruling by the Hence, it can now rule not only on the propriety of an
Secretary of Finance that affirmed, through its power of assessment or tax treatment of a certain transaction, but also
review under Section 4 of the NIRC, the CIR's denial of a on the validity of the revenue regulation or revenue
request to be cleared of liability for donor's tax. Noting the memorandum circular on which the said assessment is
absence of an express provision in the law concerning further based.24
appeals from the Secretary of Finance, the issue framed for The foregoing remarks appear to be in direct opposition to
resolution was — "where does one seek immediate recourse the ruling in British American Tobacco v. Camacho, et
from the adverse ruling of the Secretary of Finance in its al.25(British American Tobacco), which is a 2008 case decided
exercise of its power of review under Sec. 4?"22 Resolving this by the Court En Banc, cited as basis by the Court in its July 15,
issue, the Court in Philamlife held that: 2015 Decision in this case regarding the issue of jurisdiction.

The apparent conflicting jurisprudence on the matter

Admittedly, there is no provision of law that expressly
involving the Court's 2008 En Banc ruling in British American
provides where exactly the ruling of the Secretary of Finance
Tobacco and the Court's Third Division Ruling in Philamlife has
under the adverted NIRC provision is appealable to. However,
been seemingly settled in the 2016 En Banc case of Banco De
We find that Sec. 7(a)(l) of RA 1125, as amended, addresses
Oro v. Republic of the Philippines 26(Banco De Oro) wherein it
the seeming gap in the law as it vests the CTA, albeit
was opined that:
impliedly, with jurisdiction over the CA petition as "other
matters" arising under the NIRC or other laws administered
by the BIR. As stated: Section 7 of Republic Act No. 1125, as amended, is explicit
that, except for local taxes, appeals from the decisions of
Sec. 7. Jurisdiction. - The CTA shall exercise: quasi-judicial agencies (Commissioner of Internal Revenue,
a. Exclusive appellate jurisdiction to review by appeal, Commissioner of Customs, Secretary of Finance, Central
as herein provided: Board of Assessment Appeals, Secretary of Trade and
Industry) on tax-related problems must be
1. Decisions of the Commissioner of Internal brought exclusively to the Court of Tax Appeals.
Revenue in cases involving disputed
assessments, refunds of internal revenue In other words, within the judicial system, the law intends
taxes, fees or other charges, penalties in the Court of Tax Appeals to have exclusive jurisdiction to
relation thereto, or other matters arising resolve all tax problems. Petitions for writs
under the National Internal Revenue or of certiorari against the acts and omissions of the said quasi-
other laws administered by the Bureau of judicial agencies should thus be filed before the Court of Tax
Internal Revenue. xxx Appeals.
Even though the provision suggests that it only covers rulings
Republic Act No. 9282, a special and later law than Batas
of the Commissioner, We hold that it is, nonetheless,
Pambansa Blg. 129 provides an exception to the original
sufficient enough to include appeals from the Secretary's
jurisdiction of the Regional Trial Courts over actions
review under Sec. 4 of the NIRC.23
questioning the constitutionality or validity of tax laws or
regulations. Except for local tax cases, actions directly

35
challenging the constitutionality or validity of a tax law or 21, 2013.30 Records are bereft of any showing that the CIR
regulation or administrative issuance may be filed directly had already acted on its claim and hence, Petron filed before
before the Court of Tax Appeals. the CTA a Supplemental Petition for Review 31 to include a
claim for refund and/or tax credit of the excise tax that was
Furthermore, with respect to administrative issuances levied on its alkylate importation. The CTA then gave due
(revenue orders, revenue memorandum circulars, or rulings), course to the petition and, as per Petron's manifestation, the
these are issued by the Commissioner under its power to parties have already been undergoing trial. 32 Consequently,
make rulings or opinions in connection with the considering that the CTA had taken cognizance of Petron's
implementation of the provisions of internal revenue laws. claim for judicial refund of tax which, under Section 7(a)
Tax rulings, on the other hand, are official positions of the (l)33 of RA 1125, is within its jurisdiction, the Court finds that
Bureau on inquiries of taxpayers who request clarification on these supervening circumstances have already mooted the
certain provisions of the National Internal Revenue Code, issue of prematurity. Thus, in conjunction with the Banco De
other tax laws, or their implementing regulations. Hence, the Oro ruling that the CTA has jurisdiction to resolve all tax
determination of the validity of these issuances clearly falls matters (which includes the validity of the CIR's interpretation
within the exclusive appellate jurisdiction of the Court of and consequent imposition of excise tax on alkylate), the
Tax Appeals under Section 7(l) of Republic Act No. 1125, as Court finds it proper to reconsider its decision.
amended, subject to prior review by the Secretary of
Finance, as required under Republic Act No. WHEREFORE, the motion for reconsideration is GRANTED.
8424.27 (Emphases supplied) Respondent Petron Corporation's petition for review
docketed as CTA Case No. 8544 is hereby DECLARED to be
The En Banc ruling in Banco De Oro has since not been
within the jurisdiction of the Court of Tax Appeals, which
overturned and thus, stands as the prevailing jurisprudence
is DIRECTED to resolve the case with dispatch.
on the matter. Accordingly, the Court is prompted to
reconsider its ruling in this case with respect to the issue of
SO ORDERED.
jurisdiction.
CITY OF MANILA VS. HON. GRECIA-CUERCO G.R. NO. 175723
However, the Court had also dismissed Petron's petition for FEBRUARY 4, 2014
review before the CTA on the ground of prematurity. Unlike
Before the Court is a special civil action for certiorari under
in Philamlife where the petition for review was filed before
Rule 65 of the Rules of Court seeking to reverse and set aside
the Secretary of Finance, Petron in this case directly elevated
the Resolutions1 dated April 6, 2006 and November 29, 2006
for review to the CTA the customs collector's computation or
of the Court of Appeals (CA) in CA-G.R. SP No. 87948.
assessment, which is not a proper subject of appeal. To
reiterate the Court's decision in the main: The antecedents of the case, as summarized by the CA, are as
follows:
xxx The [Tariff and Customs Code] prescribes that a party The record shows that petitioner City of Manila, through its
adversely affected by a ruling or decision of the customs treasurer, petitioner Liberty Toledo, assessed taxes for the
collector may protest such ruling or decision upon payment of taxable period from January to December 2002 against
the amount due and, if aggrieved by the action of the private respondents SM Mart, Inc., SM Prime Holdings, Inc.,
customs collector on the matter under protest, may have the Star Appliances Center, Supervalue, Inc., Ace Hardware
same reviewed by the COC. It is only after the COC shall have Philippines, Inc., Watsons Personal Care Stores Phils., Inc.,
made an adverse ruling on the matter may the aggrieved Jollimart Philippines Corp., Surplus Marketing Corp. and
parly file an appeal to the CTA. Signature Lines. In addition to the taxes purportedly due from
private respondents pursuant to Section 14, 15, 16, 17 of the
xxx There being no protest ruling by the customs collector Revised Revenue Code of Manila (RRCM), said assessment
that was appealed to the COC, the filing of the petition covered the local business taxes petitioners were authorized
before the CTA was premature as there was nothing yet to to collect under Section 21 of the same Code. Because
review.28 (Emphasis supplied) payment of the taxes assessed was a precondition for the
issuance of their business permits, private respondents were
Nevertheless, Petron has presently manifested that it had
constrained to pay the ₱19,316,458.77 assessment under
already complied with the protest procedure prescribed
protest.
under the N1RC, and later on, filed an administrative
claim29 for refund and/or tax credit with the BIR on November

36
On January 24, 2004, private respondents filed [with the jurisdiction in issuing the Writ of Injunction despite failure of
Regional Trial Court of Pasay City] the complaint private respondents to make a written claim for tax credit or
denominated as one for "Refund or Recovery of Illegally refund with the City Treasurer of Manila.
and/or Erroneously-Collected Local Business Tax, Prohibition
IV- Whether or not the Honorable Regional Trial Court gravely
with Prayer to Issue TRO and Writ of Preliminary Injunction"
abuse[d] its discretion amounting to lack or excess of
which was docketed as Civil Case No. 04-0019-CFM before jurisdiction considering that under Section 21 of the Manila
public respondent's sala [at Branch 112]. In the amended Revenue Code, as amended, they are mere collecting agents
complaint they filed on February 16, 2004, private of the City Government.
respondents alleged that, in relation to Section 21 thereof,
V- Whether or not the Honorable Regional Trial Court gravely
Sections 14, 15, 16, 17, 18, 19 and 20 of the RRCM were
abuse[d] its discretion amounting to lack or excess of
violative of the limitations and guidelines under Section 143
jurisdiction in issuing the Writ of Injunction because
(h) of Republic Act. No. 7160 [Local Government Code] on
petitioner City of Manila and its constituents would result to
double taxation. They further averred that petitioner city's
greater damage and prejudice thereof. (sic) 8
Ordinance No. 8011 which amended pertinent portions of the
RRCM had already been declared to be illegal and Without first resolving the above issues, this Court finds that
unconstitutional by the Department of Justice.2 the instant petition should be denied for being moot and
academic.
In its Order3 dated July 9, 2004, the RTC granted private
respondents' application for a writ of preliminary injunction. Upon perusal of the original records of the instant case, this
Court discovered that a Decision 9 in the main case had
4
Petitioners filed a Motion for Reconsideration  but the RTC
already been rendered by the RTC on August 13, 2007, the
denied it in its Order5 dated October 15, 2004.
dispositive portion of which reads as follows:
Petitioners then filed a special civil action for certiorari with
WHEREFORE, in view of the foregoing, this Court hereby
the CA assailing the July 9, 2004 and October 15, 2004 Orders
renders JUDGMENT in favor of the plaintiff and against the
of the RTC.6
defendant to grant a tax refund or credit for taxes paid
In its Resolution promulgated on April 6, 2006, the CA pursuant to Section 21 of the Revenue Code of the City of
dismissed petitioners' petition for certiorari holding that it Manila as amended for the year 2002 in the following
has no jurisdiction over the said petition. The CA ruled that amounts:
since appellate jurisdiction over private respondents'
complaint for tax refund, which was filed with the RTC, is P
To plaintiff SM Mart, Inc. -
vested in the Court of Tax Appeals (CTA), pursuant to its 11,462,525.02
expanded jurisdiction under Republic Act No. 9282 (RA 9282),
it follows that a petition for certiorari seeking nullification of To plaintiff SM Prime Holdings,
- 3,118,104.63
an interlocutory order issued in the said case should, likewise, Inc.
be filed with the CTA.
To plaintiff Star Appliances
Petitioners filed a Motion for Reconsideration, 7 but the CA - 2,152,316.54
Center
denied it in its Resolution dated November 29, 2006.

Hence, the present petition raising the following issues: To plaintiff Supervalue, Inc. - 1,362,750.34

I- Whether or not the Honorable Court of Appeals gravely To plaintiff Ace Hardware
erred in dismissing the case for lack of jurisdiction. - 419,689.04
Phils., Inc.
II- Whether or not the Honorable Regional Trial Court gravely
abuse[d] its discretion amounting to lack or excess of To plaintiff Watsons Personal
- 231,453.62
jurisdiction in enjoining by issuing a Writ of Injunction the Care Health
petitioners, their agents and/or authorized representatives
from implementing Section 21 of the Revised Revenue Code Stores Phils., Inc.
of Manila, as amended, against private respondents.
To plaintiff Jollimart Phils.,
III- Whether or not the Honorable Regional Trial Court gravely - 140,908.54
Corp.
abuse[d] its discretion amounting to lack or excess of

37
 To plaintiff Surplus Marketing Petitioners should be reminded of the equally-settled rule
- 220,204.70 that a special civil action for certiorari under Rule 65 is an
Corp.
original or independent action based on grave abuse of
To plaintiff Signature Mktg. discretion amounting to lack or excess of jurisdiction and it
- 94,906.34 will lie only if there is no appeal or any other plain, speedy,
Corp.
and adequate remedy in the ordinary course of law. 16 As
P such, it cannot be a substitute for a lost appeal.17
TOTAL: -
19,316,458.77 Nonetheless, in accordance with the liberal spirit pervading
the Rules of Court and in the interest of substantial justice,
Defendants are further enjoined from collecting taxes under
this Court has, before, treated a petition for certiorari as a
Section 21, Revenue Code of Manila from herein plaintiff.
petition for review on certiorari, particularly (1) if the petition
SO ORDERED.10 for certiorari was filed within the reglementary period within
which to file a petition for review on certiorari; (2) when
The parties did not inform the Court but based on the errors of judgment are averred; and (3) when there is
records, the above Decision had already become final and sufficient reason to justify the relaxation of the
executory per the Certificate of Finality 11 issued by the same rules.18 Considering that the present petition was filed within
trial court on October 20, 2008. In fact, a Writ of the 15-day reglementary period for filing a petition for review
Execution12 was issued by the RTC on November 25, 2009. In on certiorari under Rule 45, that an error of judgment is
view of the foregoing, it clearly appears that the issues raised averred, and because of the significance of the issue on
in the present petition, which merely involve the incident on jurisdiction, the Court deems it proper and justified to relax
the preliminary injunction issued by the RTC, have already the rules and, thus, treat the instant petition for certiorari as
become moot and academic considering that the trial court, a petition for review on certiorari.
in its decision on the merits in the main case, has already
ruled in favor of respondents and that the same decision is Having disposed of the procedural aspect, we now turn to the
now final and executory. Well entrenched is the rule that central issue in this case. The basic question posed before this
where the issues have become moot and academic, there is Court is whether or not the CTA has jurisdiction over a special
no justiciable controversy, thereby rendering the resolution civil action for certiorari assailing an interlocutory order
of the same of no practical use or value.13 issued by the RTC in a local tax case.

In any case, the Court finds it necessary to resolve the issue This Court rules in the affirmative.
on jurisdiction raised by petitioners owing to its significance
On June 16, 1954, Congress enacted Republic Act No. 1125
and for future guidance of both bench and bar. It is a settled
(RA 1125) creating the CTA and giving to the said court
principle that courts will decide a question otherwise moot
jurisdiction over the following:
and academic if it is capable of repetition, yet evading
review.14 (1) Decisions of the Collector of Internal Revenue in cases
involving disputed assessments, refunds of internal revenue
However, before proceeding, to resolve the question on
taxes, fees or other charges, penalties imposed in relation
jurisdiction, the Court deems it proper to likewise address a
thereto, or other matters arising under the National Internal
procedural error which petitioners committed.
Revenue Code or other law or part of law administered by the
Petitioners availed of the wrong remedy when they filed the Bureau of Internal Revenue;
instant special civil action for certiorari under Rule 65 of the
(2) Decisions of the Commissioner of Customs in cases
Rules of Court in assailing the Resolutions of the CA which
involving liability for customs duties, fees or other money
dismissed their petition filed with the said court and their
charges; seizure, detention or release of property affected
motion for reconsideration of such dismissal. There is no
fines, forfeitures or other penalties imposed in relation
dispute that the assailed Resolutions of the CA are in the
thereto; or other matters arising under the Customs Law or
nature of a final order as they disposed of the petition
other law or part of law administered by the Bureau of
completely. It is settled that in cases where an assailed
Customs; and
judgment or order is considered final, the remedy of the
aggrieved party is appeal. Hence, in the instant case, (3) Decisions of provincial or City Boards of Assessment
petitioner should have filed a petition for review on certiorari Appeals in cases involving the assessment and taxation of real
under Rule 45, which is a continuation of the appellate property or other matters arising under the Assessment Law,
process over the original case.15 including rules and regulations relative thereto.

38
On March 30, 2004, the Legislature passed into law Republic may appeal the decision to impose or not to impose said
Act No. 9282 (RA 9282) amending RA 1125 by expanding the duties.
jurisdiction of the CTA, enlarging its membership and
b. Jurisdiction over cases involving criminal offenses as herein
elevating its rank to the level of a collegiate court with special
provided:
jurisdiction. Pertinent portions of the amendatory act
provides thus: 1. Exclusive original jurisdiction over all criminal offenses
arising from violations of the National Internal Revenue Code
Sec. 7. Jurisdiction. - The CTA shall exercise:
or Tariff and Customs Code and other laws administered by
a. Exclusive appellate jurisdiction to review by appeal, as the Bureau of Internal Revenue or the Bureau of Customs:
herein provided: Provided, however, That offenses or felonies mentioned in
this paragraph where the principal amount of taxes and fees,
1. Decisions of the Commissioner of Internal Revenue in cases
exclusive of charges and penalties, claimed is less than One
involving disputed assessments, refunds of internal revenue
million pesos (₱1,000,000.00) or where there is no specified
taxes, fees or other charges, penalties in relation thereto, or
amount claimed shall be tried by the regular Courts and the
other matters arising under the National Internal Revenue or
jurisdiction of the CTA shall be appellate. Any provision of law
other laws administered by the Bureau of Internal Revenue;
or the Rules of Court to the contrary notwithstanding, the
2. Inaction by the Commissioner of Internal Revenue in cases criminal action and the corresponding civil action for the
involving disputed assessments, refunds of internal revenue recovery of civil liability for taxes and penalties shall at all
taxes, fees or other charges, penalties in relations thereto, or times be simultaneously instituted with, and jointly
other matters arising under the National Internal Revenue determined in the same proceeding by the CTA, the filing of
Code or other laws administered by the Bureau of Internal the criminal action being deemed to necessarily carry with it
Revenue, where the National Internal Revenue Code provides the filing of the civil action, and no right to reserve the filing
a specific period of action, in which case the inaction shall be of such civil action separately from the criminal action will be
deemed a denial; recognized.

3. Decisions, orders or resolutions of the Regional Trial Courts 2. Exclusive appellate jurisdiction in criminal offenses:
in local tax cases originally decided or resolved by them in the
a. Over appeals from the judgments, resolutions or orders of
exercise of their original or appellate jurisdiction;
the Regional Trial Courts in tax cases originally decided by
4. Decisions of the Commissioner of Customs in cases them, in their respected territorial jurisdiction.
involving liability for customs duties, fees or other money
b. Over petitions for review of the judgments, resolutions or
charges, seizure, detention or release of property affected,
orders of the Regional Trial Courts in the exercise of their
fines, forfeitures or other penalties in relation thereto, or
appellate jurisdiction over tax cases originally decided by the
other matters arising under the Customs Law or other laws
Metropolitan Trial Courts, Municipal Trial Courts and
administered by the Bureau of Customs;
Municipal Circuit Trial Courts in their respective jurisdiction.
5. Decisions of the Central Board of Assessment Appeals in
c. Jurisdiction over tax collection cases as herein provided:
the exercise of its appellate jurisdiction over cases involving
the assessment and taxation of real property originally 1. Exclusive original jurisdiction in tax collection cases
decided by the provincial or city board of assessment appeals; involving final and executory assessments for taxes, fees,
charges and penalties: Provides, however, that collection
6. Decisions of the Secretary of Finance on customs cases
cases where the principal amount of taxes and fees, exclusive
elevated to him automatically for review from decisions of
of charges and penalties, claimed is less than One million
the Commissioner of Customs which are adverse to the
pesos (₱1,000,000.00) shall be tried by the proper Municipal
Government under Section 2315 of the Tariff and Customs
Trial Court, Metropolitan Trial Court and Regional Trial Court.
Code;
2. Exclusive appellate jurisdiction in tax collection cases:
7. Decisions of the Secretary of Trade and Industry, in the
case of nonagricultural product, commodity or article, and a. Over appeals from the judgments, resolutions or orders of
the Secretary of Agriculture in the case of agricultural the Regional Trial Courts in tax collection cases originally
product, commodity or article, involving dumping and decided by them, in their respective territorial jurisdiction.
countervailing duties under Section 301 and 302,
b. Over petitions for review of the judgments, resolutions or
respectively, of the Tariff and Customs Code, and safeguard
orders of the Regional Trial Courts in the Exercise of their
measures under Republic Act No. 8800, where either party
39
appellate jurisdiction over tax collection cases originally settle actual controversies involving rights which are legally
decided by the Metropolitan Trial Courts, Municipal Trial demandable and enforceable, and to determine whether or
Courts and Municipal Circuit Trial Courts, in their respective not there has been a grave abuse of discretion amounting to
jurisdiction.19 lack or excess of jurisdiction on the part of any branch or
instrumentality of the Government.
A perusal of the above provisions would show that, while it is
clearly stated that the CTA has exclusive appellate jurisdiction On the strength of the above constitutional provisions, it can
over decisions, orders or resolutions of the RTCs in local tax be fairly interpreted that the power of the CTA includes that
cases originally decided or resolved by them in the exercise of of determining whether or not there has been grave abuse of
their original or appellate jurisdiction, there is no categorical discretion amounting to lack or excess of jurisdiction on the
statement under RA 1125 as well as the amendatory RA 9282, part of the RTC in issuing an interlocutory order in cases
which provides that th e CTA has jurisdiction over petitions falling within the exclusive appellate jurisdiction of the tax
for certiorari assailing interlocutory orders issued by the RTC court. It, thus, follows that the CTA, by constitutional
in local tax cases filed before it. mandate, is vested with jurisdiction to issue writs of certiorari
in these cases.
The prevailing doctrine is that the authority to issue writs of
certiorari involves the exercise of original jurisdiction which Indeed, in order for any appellate court to effectively exercise
must be expressly conferred by the Constitution or by law its appellate jurisdiction, it must have the authority to issue,
and cannot be implied from the mere existence of appellate among others, a writ of certiorari. In transferring exclusive
jurisdiction.20 Thus, in the cases of Pimentel v. jurisdiction over appealed tax cases to the CTA, it can
COMELEC,21 Garcia v. De Jesus,22 Veloria v. reasonably be assumed that the law intended to transfer also
23
COMELEC,  Department of Agrarian Reform Adjudication such power as is deemed necessary, if not indispensable, in
Board v. Lubrica,24 and Garcia v. Sandiganbayan,25 this Court aid of such appellate jurisdiction. There is no perceivable
has ruled against the jurisdiction of courts or tribunals over reason why the transfer should only be considered as partial,
petitions for certiorari on the ground that there is no law not total.
which expressly gives these tribunals such power. 26 It must be
Consistent with the above pronouncement, this Court has
observed, however, that with the exception of Garcia v.
held as early as the case of J.M. Tuason & Co., Inc. v.
Sandiganbayan,27 these rulings pertain not to regular courts
Jaramillo, et al.29 that "if a case may be appealed to a
but to tribunals exercising quasi-judicial powers. With respect
particular court or judicial tribunal or body, then said court or
to the Sandiganbayan, Republic Act No. 8249 28 now provides
judicial tribunal or body has jurisdiction to issue the
that the special criminal court has exclusive original
extraordinary writ of certiorari, in aid of its appellate
jurisdiction over petitions for the issuance of the writs of
jurisdiction."30 This principle was affirmed in De Jesus v. Court
mandamus, prohibition, certiorari, habeas corpus,
of Appeals,31 where the Court stated that "a court may issue a
injunctions, and other ancillary writs and processes in aid of
writ of certiorari in aid of its appellate jurisdiction if said court
its appellate jurisdiction.
has jurisdiction to review, by appeal or writ of error, the final
In the same manner, Section 5 (1), Article VIII of the 1987 orders or decisions of the lower court." 32 The rulings in J.M.
Constitution grants power to the Supreme Court, in the Tuason and De Jesus were reiterated in the more recent cases
exercise of its original jurisdiction, to issue writs of certiorari, of Galang, Jr. v. Geronimo33 and Bulilis v. Nuez.34
prohibition and mandamus. With respect to the Court of
Furthermore, Section 6, Rule 135 of the present Rules of
Appeals, Section 9 (1) of Batas Pambansa Blg. 129 (BP 129)
Court provides that when by law, jurisdiction is conferred on
gives the appellate court, also in the exercise of its original
a court or judicial officer, all auxiliary writs, processes and
jurisdiction, the power to issue, among others, a writ of
other means necessary to carry it into effect may be
certiorari,whether or not in aid of its appellate jurisdiction. As
employed by such court or officer.
to Regional Trial Courts, the power to issue a writ of
certiorari, in the exercise of their original jurisdiction, is If this Court were to sustain petitioners' contention that
provided under Section 21 of BP 129. jurisdiction over their certiorari petition lies with the CA, this
Court would be confirming the exercise by two judicial
The foregoing notwithstanding, while there is no express
bodies, the CA and the CTA, of jurisdiction over basically the
grant of such power, with respect to the CTA, Section 1,
same subject matter – precisely the split-jurisdiction situation
Article VIII of the 1987 Constitution provides, nonetheless,
which is anathema to the orderly administration of
that judicial power shall be vested in one Supreme Court and
justice.35 The Court cannot accept that such was the
in such lower courts as may be established by law and that
legislative motive, especially considering that the law
judicial power includes the duty of the courts of justice to
40
expressly confers on the CTA, the tribunal with the In this regard, Section 1 of RA 9282 states that the CTA shall
specialized competence over tax and tariff matters, the role be of the same level as the CA and shall possess all the
of judicial review over local tax cases without mention of any inherent powers of a court of justice.
other court that may exercise such power. Thus, the Court
Indeed, courts possess certain inherent powers which may be
agrees with the ruling of the CA that since appellate
said to be implied from a general grant of jurisdiction, in
jurisdiction over private respondents' complaint for tax
addition to those expressly conferred on them. These
refund is vested in the CTA, it follows that a petition for
inherent powers are such powers as are necessary for the
certiorari seeking nullification of an interlocutory order issued
ordinary and efficient exercise of jurisdiction; or are essential
in the said case should, likewise, be filed with the same court.
to the existence, dignity and functions of the courts, as well
To rule otherwise would lead to an absurd situation where
as to the due administration of justice; or are directly
one court decides an appeal in the main case while another
appropriate, convenient and suitable to the execution of their
court rules on an incident in the very same case.
granted powers; and include the power to maintain the
Stated differently, it would be somewhat incongruent with court's jurisdiction and render it effective in behalf of the
the pronounced judicial abhorrence to split jurisdiction to litigants.38
conclude that the intention of the law is to divide the
Thus, this Court has held that "while a court may be expressly
authority over a local tax case filed with the RTC by giving to
granted the incidental powers necessary to effectuate its
the CA or this Court jurisdiction to issue a writ of certiorari
jurisdiction, a grant of jurisdiction, in the absence of
against interlocutory orders of the RTC but giving to the CTA
prohibitive legislation, implies the necessary and usual
the jurisdiction over the appeal from the decision of the trial
incidental powers essential to effectuate it, and, subject to
court in the same case. It is more in consonance with logic
existing laws and constitutional provisions, every regularly
and legal soundness to conclude that the grant of appellate
constituted court has power to do all things that are
jurisdiction to the CTA over tax cases filed in and decided by
reasonably necessary for the administration of justice within
the RTC carries with it the power to issue a writ of certiorari
the scope of its jurisdiction and for the enforcement of its
when necessary in aid of such appellate jurisdiction. The
judgments and mandates."39 Hence, demands, matters or
supervisory power or jurisdiction of the CTA to issue a writ of
questions ancillary or incidental to, or growing out of, the
certiorari in aid of its appellate jurisdiction should co-exist
main action, and coming within the above principles, may be
with, and be a complement to, its appellate jurisdiction to
taken cognizance of by the court and determined, since such
review, by appeal, the final orders and decisions of the RTC,
jurisdiction is in aid of its authority over the principal matter,
in order to have complete supervision over the acts of the
even though the court may thus be called on to consider and
latter.36
decide matters which, as original causes of action, would not
A grant of appellate jurisdiction implies that there is included be within its cognizance.40
in it the power necessary to exercise it effectively, to make all
Based on the foregoing disquisitions, it can be reasonably
orders that will preserve the subject of the action, and to give
concluded that the authority of the CTA to take cognizance of
effect to the final determination of the appeal. It carries with
petitions for certiorari questioning interlocutory orders issued
it the power to protect that jurisdiction and to make the
by the RTC in a local tax case is included in the powers
decisions of the court thereunder effective. The court, in aid
granted by the Constitution as well as inherent in the exercise
of its appellate jurisdiction, has authority to control all
of its appellate jurisdiction.
auxiliary and incidental matters necessary to the efficient and
proper exercise of that jurisdiction.1âwphi1 For this purpose, Finally, it would bear to point out that this Court is not
it may, when necessary, prohibit or restrain the performance abandoning the rule that, insofar as quasi-judicial tribunals
of any act which might interfere with the proper exercise of are concerned, the authority to issue writs of certiorari must
its rightful jurisdiction in cases pending before it. 37 still be expressly conferred by the Constitution or by law and
cannot be implied from the mere existence of their appellate
Lastly, it would not be amiss to point out that a court which is
jurisdiction. This doctrine remains as it applies only to quasi-
endowed with a particular jurisdiction should have powers
judicial bodies.
which are necessary to enable it to act effectively within such
jurisdiction. These should be regarded as powers which are WHEREFORE, the petition is DENIED.
inherent in its jurisdiction and the court must possess them in
order to enforce its rules of practice and to suppress any SO ORDERED.
abuses of its process and to defeat any attempted thwarting
of such process.

41
COMMISSIONER OF INTERNAL REVENUE VS. KEPCO ILIJAN Amount of Input VAT Claim P449,569,448.73
G.R. NO. 199422 JUNE 21, 2016

This is a petition for Review on Certiorari under Rule 45 of the Input VAT Pertaining to Non-
Less: 706,328.22
Rules of Court seeking the reversal of the Resolutions 1 dated Capital Goods
July 27, 20112 and November 15, 20113 of the Court of Tax
Appeals (CTA) En Banc. Input VAT Claim Pertaining to Capital
P448,863,120.51
Goods Purchases
The facts follow.
Not Properly Substantiated Input
Less:
4 5
For the first  and second  quarters of the calendar year 2000, VAT
respondent filed its Quarterly value-added tax (VAT) returns
with the Bureau of Internal Revenue (BIR). It also filed the   Per ICPA's Findings 45,878.55
Application for Zero Rated Sales for calendar year 2000 which
was duly approved by the BIR. 6chanrobleslaw Per this Court's Further
  5,370,057.46
Verification
Thereafter, respondent filed with the BIR its claim for refund
in the amount, of P449,569,448.73 representing input tax Refundable Input VAT on Capital Goods
P443,447,184.50
incurred for the first and second quarters of the calendar year Purchases
2000 from its importation and domestic purchases of capital
goods and services preparatory to its production and sales of There being no motion for reconsideration filed by the
electricity to the National Power Corporation. 7chanrobleslaw petitioner, the abovementioned decision became final and
executory and a corresponding Entry of Judgment was issued
Petitioner did not act upon respondent's claim for refund or on October 10, 2009. Thus, on February 16, 2010, the Court
issuance of tax credit certificate for the first and second issued a Writ of Exeeution,14 the pertinent portion of which
quarters of the calendar year 2000. Consequently, reads as follows:
respondent filed a Petition for Review8 on March 21, 2002,
You are hereby ORDERED to REFUND in favor of the
and an Amended Petition for Review 9 on September 12, 2003.
petitioner KEPCO ILIJAN CORPORATION, the amount of
P443,447,184.50 representing unutilized input VAT paid on its
In her Answer,10 petitioner alleged the following Special and
domestic purchases and importation of capital goods for the
Affirmative Defenses: (1) respondent is not entitled to the
first and second quarters of 2000, pursuant to the Decision of
refund of the amounts prayed for; (2) the petition was
this Court, promulgated on September 11, 2009, which has
prematurely filed for respondent's failure to exhaust
become final and executory on October 10, 2009, by virtue of
administrative remedies; (3) respondent failed to show that
the Entry of Judgment issued on said date.
the taxes paid were erroneously or illegally collected; and (4)
respondent has no cause of action.
The Sheriff of this Court is hereby directed to see to it that
this Writ is carried out by. the Respondent and/or his agents,
After the issues were joined, trial on the merits ensued.
and shall make the corresponding return/report thereon
within thirty (30) days after receipt of the Writ.
Respondent, thereafter, filed its Memorandum on September
1, 2008. For failure of petitioner to file the required
SO ORDERED.
Memorandum despite notice, the CTA First Division issued a
Resolution11 dated September 12, 2008 submitting the case Petitioner alleges that she learned only of the Decision and
for decision. the subsequent issuance of the writ of March 7, 2011 when
the Office of the Deputy Commissioner for Legal and
On September 11, 2009, the CTA First Division rendered a Inspection Group received a Memorandum from the
Decision,12 the dispositive portion13 of which reads as follows: Appellate Division of the National Office recommending the
issuance of a Tax Credit Certificate in favor of the respondent
IN VIEW OF THE FOREGOING, THIS Court finds petitioner
in the amount of P443,447,184.50.
entitled to a refund in the amount. Of P443,447,184.50,
representing unutilized input VAT paid on its domestic
Accordingly, on April 11, 2011 petitioner filed a petition for
purchases and importation of capital goods for the first and
annulment of judgment with the CTA En Banc, praying for the
second quarters of 2000, as computed below:
following reliefs: (1) that the Decision dated September 11,
42
2009 of the CTA First Division in CTA Case No. 6412 be DIVISION) OVER THE PETITION FILED BY
annulled and set aside; (2) that the Entry of Judgment on RESPONDENT.18chanroblesvirtuallawlibrary
October 10, 2009 and Writ of Execution on February 16, 2010
Prefatorily, we first pass upon the issue of whether the
be nullified; and (3) that the CTA First Division be directed to
CTA En Banc has jurisdiction to take cognizance of the
re-open CIA Case No. 6412 to allow petitioner to submit her
petition for annulment of judgment filed by petitioner.
memoranda setting forth her substantial legal defenses.

Annulment of judgment, as provided for in Rule 47 of the

In opposition, respondent filed its Motion to Deny Due
Rules of Court, is based only on the grounds of extrinsic fraud
Course (To The Petition for Annulment of Judgment), arguing,
and lack of jurisdiction. It is a recourse that presupposes the
among others, that petitioner is not lawfully entitled to the
filing of a separate and original action for the purpose of
annulment of judgment on the ground that the CTA En
annulling or avoiding a decision in another case. Annulment is
Banc is bereft of jurisdiction to entertain annulment of
a remedy in law independent of the case where the judgment
judgments on the premise that the Rules of Court, Republic
sought to be annulled is rendered. 19 It is unlike a motion for
Act No. (RA No.) 9282,15 and the Revised Rules'of the. Court
reconsideration, appeal or even a petition for relief from
of Tax Appeals do not expressly provide a remedy on
judgment, because annulment is not a continuation or
annulment of judgments.
progression of the same case, as in fact the case it seeks to
annul is already final and executory. Rather, it is an
On July 27, 2011, the CTA En Banc issueda
extraordinary remedy that is equitable in character and is
Resolution16 dismissing the petition. Petitioner filed a motion
permitted only in exceptional cases. 20chanrobleslaw
for reconsideration, but the same was denied in a
Resolution17 dated November 15, 2011.
Annulment of judgment involves the exercise of original
jurisdiction, as expressly conferred on the Court of Appeals by
Hence, this petition.
Batas Pambansa Bilang (BP Blg.) 129, Section 9(2). It also
implies power by a superior court over a subordinate one, as
Petitioner raises the following arguments to support her
provided for in Rule 47 of the Rules of Court, wherein the
petition:ChanRoblesVirtualawlibrary
appellate court may annul a decision of the regional trial
I court, or the latter court may annul a decision of the
municipal or metropolitan trial court.

THE COURT OF TAX APPEALS (EN BANC) HAS JURISDICTION

But the law and the rules are silent when it comes to a
TO TAKE COGNIZANCE OF THE PETITION FOR ANNULMENT OF
situation similar to the case at bar, in which a court, in this
JUDGMENT.
case the Court of Tax Appeals, is called upon to annul its own
II judgment. More specifically, in the case at bar, the CTA
sitting en banc is being asked to annul a decision of one of its
divisions. However, the laws creating the CTA and expanding
THE NEGLIGENCE COMMITTED BY PETITIONER'S COUNSEL IS its jurisdiction (RA Nos. 1125 and 9282) and the court's own
GROSS, PALPABLE AND CONSTITUTES TOTAL ABANDONMENT rules of procedure (the Revised Rules of the CTA) do not
OF PETITIONER'S CAUSE WHICH IS TANTAMOUNT TO provide for such a scenario.
EXTRINSIC FRAUD.
It is the same situation among other collegial courts. To
III
illustrate, the Supreme Court or the Court of Appeals may sit
and acjjudicate cases in divisions consisting of only a number
THE COURT OF TAX APPEALS (FIRST DIVISION) HAS NO of members, and such adjudication is already regarded as the
JURISDICTION OVER THE ORIGINAL PETITION FILED BY decision of the Court itself. 21 It is provided for in the
RESPONDENT. Constitution, Article VIII, Section 4(1) and BP Blg. 129, Section
4, respectively. The divisions are not considered separate and
IV distinct courts but are divisions of one and the same court;
there is no hierarchy of courts within the Supreme Court and
PETITIONER IS NOT BARRED BY LACHES FROM ASSAILING THE the Court of Appeals, for they each remain as one court
JURISDICTION OF THE COURT OF TAX APPEALS (FIRST notwithstanding that they also work in divisions. 22 The
Supreme Court sitting en banc is not an appellate court vis-a-
vis its divisions, and it exercises no appellate jurisdiction over
43
the latter.23 As for the Court of Appeals en banc, it sits as such Court loathes to perform, as it is not a trier of
only for the purpose of exercising administrative, ceremonial, facts.25cralawredchanrobleslaw
or other non-adjudicator/functions.24chanrobleslaw
Nevertheless, there will be extraordinary cases, when the
Thus, it appears contrary to these features that a collegial interest of justice highly demands it, where final judgments of
court, sitting en banc, may be called upon to annul a decision the Court of Appeals, the CTA or any other inferior court may
of one of its divisions which had become final and executory, still be vacated or subjected to the Supreme Court's
for it is tantamount to allowing a court to annul its own modification, reversal, annulment or declaration as void. But
judgment and acknowledging that a hierarchy exists within it will be accomplished not through the same species of
such court. In the process, it also betrays the principle that original action or petition for annulment as that found in Rule
judgments must, at some point, attain finality. A court that 47 of the Rules of Court, but through any of the actions over
can revisit its own final judgments leaves the door open to which the Supreme Court has original jurisdiction as specified
possible endless reversals or modifications which is anathema in the Constitution, like 65 of the Rules of Court.
to a stable legal system.
Hence, the next query is: Did the CTA En Banc correctly deny
Thus, the Revised Rules of the CTA and even the Rules of the petition for annulment of judgment filed by petitioner?
Court which apply suppletorily thereto provide for no
instance in which the en banc may reverse, annul or void As earlier discussed, the petition designated as one for
a final decision of a division. Verily, the Revised Rules of the annulment of judgment (following Rule 47) was legally and
CTA provide for no instance of an annulment of judgment at procedurally infirm and, thus, was soundly dismissed by the
all. On the other hand, the Rules of Court, through Rule 47, CTA En Banc on such ground. Also, the CTA could not have
provides, with certain conditions, for annulment of judgment treated the petition as an appeal or a continuation of the case
done by a superior court, like the Court of Appeals, against before the CTA First Division because the latter's decision had
the final judgment, decision or ruling of an inferior court, become final and executory and, thus, no longer subject to an
which is the Regional Trial Court, based on the grounds of appeal.
extrinsic' fraud and lack of jurisdiction. The Regional Trial
Court, in turn, also is empowered to, upon a similar action, Instead, what remained as a remedy for the petitioner was to
annul a judgment or ruling of the Metropolitan or Municipal file a petition for certiorari under Rule 65, which could have
Trial Courts within its territorial jurisdiction. But, again, the been filed as an original action before this Court and not
said Rules are silent as to whether a collegial court sitting en before the CTA En Banc. Certiorari is available when there is
banc may annul a final judgment of its own division. no appeal or any other plain, speedy and adequate remedy in
the ordinary course of law, such as in the case at bar. Since
As earlier explained, the silence of the Rules may be the petition below invoked the gross and palpable negligence
attributed to the need to preserve the principles that there of petitioner's counsel which is allegedly tantamount to its
can be no hierarchy within a collegial court between its being deprived of due process and its day in court as party-
divisions and the en banc, and that a court's judgment, once litigant26 and, as it also invokes lack of jurisdiction of the CTA
final, is immutable. First Division to entertain the petition filed by private
respondent since the same allegedly fails to comply with the
A direct petition for annulment of a judgment of the CTA to reglementary periods for judicial rernedies involving
the Supreme Court, meanwhile, is likewise unavailing, for the administrative claims for refund of excess unutilized input
same reason that there is no identical remedy with the High VAT under the National Internal Revenue Code
Court to annul a final and executory judgment of the Court of (NIRC),27 which periods it claims to be jurisdictional, then the
Appeals. RA No. 9282, Section I puts the CTA on the same proper remedy that petitioner should have availed of was
level as the Court of Appeals, so that .if the latter's final indeed a petition for certiorari under Rule 65, an original or
judgments may not be annulled before the Supreme Court, independent action premised on the public respondent
then the CTA's own decisions similarly may not be so having acted without or in excess of jurisdiction or with grave
annulled. And more importantly, it has been previously abuse of discretion amounting to lack or excess of
discussed that annulment of judgment is an original action, jurisdiction. However, since a certiorari petition is not a
yet, it is not among the cases enumerated in the continuation of the appellate process borne out of the
Constitution's Article VIII, Section 5 over which the Supreme original case but is a separate action focused on actions that
Court exercises original jurisdiction. Annulment of judgment are in excess or wanting of jurisdiction, 28 then it cannot be
also often requires an adjudication of facts, a task that the filed in the same tribunal whose actions are being assailed

44
but is instead cognizable by a higher tribunal which, in the and goes into the jurisdiction of the court. 36 A question as to
case of the CTA, is this Court. 29 In the case involving lack of jurisdiction of the respondent tribunal or agency is
petitioner, the petition could have been filed directly with this properly the office of a petition for certiorari.
Court, even without any need to file a motion for
reconsideration with the CTA division or En Banc, as the case In any event, petitioner's failure to avail of this remedy and
appears to fall under one of the recognized exceptions to the mistaken filing of the wrong action are fatal to its case and
rule requiring such a motion as a prerequisite to filing such renders and leaves the CTA First Division's decision as indeed
petition.30chanrobleslaw final and executory. By the time the instant petition for
review was filed by petitioner with this Court on December 9,
The office of a certiorari petition is detailed in the Rules of 2011, more than sixty (60) days have passed since petitioner's
Court, thus: alleged discovery (on March 7, 2011) of its loss in the case as
brought about by the alleged negligence or fraud of its
Section 1. Petition for certiorari. — When any tribunal, board
counsel.
or officer exercising judicial or quasi-judicial functions has
acted without or in excess of its or his jurisdiction, or with
Thus, the current discussion serves no further purpose other
grave abuse of discretion amounting to lack or excess of
than as merely a future guide to the bench and the bar when
jurisdiction, and there is no appeal, or any plain, speedy, and
confronted with a similar situation.
adequate remedy in the ordinary course of law, a person
aggrieved thereby may file a verified petition in the proper
Although in select cases, this Court has asseverated that "it is
court, alleging the facts with certainty and praying that
always within its power to suspend its own rules or to except
judgment be rendered annulling or modifying the
a particular case from its operation, whenever the purposes
proceedings of such tribunal, board or officer, and granting
of justice require it" and that the Rules of Court were
such incidental reliefs as law and justice may require.
conceived and promulgated to set forth guidelines in the
dispensation of justice but not to bind and chain the hand
The petition shall be accompanied by a certified true copy of
that dispenses it, for otherwise, courts will be mere slaves to
the judgment, order or resolution subject thereof, copies of
or robots of technical rules, shorn of judicial discretion. 37 We
all pleadings and documents relevant and pertinent thereto,
have also equally stressed that strict compliance with the
and a sworn certification of non-forum shopping as provided
rules of procedure is essential to the administration of
in the third paragraph of section 3, Rule 46.
justice.38chanrobleslaw

(1a)
In this case, even if there was allegedly a deliberate effort
The writ of certiorari is an "extraordinary remedy" that is from petitioner's counsel to refuse to participate, despite
justified in the "absence of an appeal or any plain» speedy notice, in the conduct of the case after the filing of the
and adequate remedy in the ordinary course of law." 31 It may Answer right up to the issuance of the Writ of Execution
be given due course as long as petitioners allege that they against petitioner,38 equally apparent is the failure of
had no appeal or any other efficacious remedy against the petitioner and/or petitioner's responsible subordinates to
appellate court's decision.32chanrobleslaw supervise the said counsel as well as the conduct and
progress of the case. Not only was there an apparent
Direct resort to this Court via a certiorari petition on the same negligence of counsel,39 which binds the client, there likewise
grounds as in this case has jurisprudential precedents. In one, appears to have been lapses on the part of the client - the
We held that when the appellate court's decision is void for petitioner and the petitioner's responsible subordinates -
lack of due process, the filing of a petition for certiorari with themselves. Equally oft-repeated is the rule that service made
this court without a motion for reconsideration is upon the present counsel of record at his given address is
justified.33 This Court also has held that a petition service to the client.40 Thus, it is harder to justify a relaxation
for certiorari under Rule 65 of the Rules of Court is available of the rules when the litigant itself suffers from inexcusable
when the proceedings in question amount to depriving the neglect. It is an oft-repeated pronouncement that clients
petitioner his day in court. 34 It is true that certiorari is not a should take the initiative of periodically checking the progress
substitute for appeal, but exempt from this rule is a case of their cases, so that they could take timely steps to protect
when the trial court's decision or resolution was issued their interest.41 Failing such, clients are left with more
without jurisdiction or with grave abuse of discretion. 35When recourse against the consequence of their and their counsel's
a fraudulent scheme prevents a party from having his day in omissions.
court or from presenting his case, the fraud is one that affects

45
To prevent similar disadvantageous incidents against the taxation.6
government in the future, the BIR
is DIRECTED to ADOPT mechanisms, procedures, or measures Meanwhile, the respondent also received a demand for the
that can effectively monitor the progress of cases being payment of its deficiency income tax, value-added tax,
handled by its counsels. Likewise, the Ombudsman premium tax, DST, expanded withholding tax, and fringe
is DIRECTED to CONDUCT an in-depth investigation to benefit tax for taxable year 2012,7 and deficiency DST for
taxable year 2013.8
determine who were responsible for the apparent
mishandling of the present case that resulted in the loss of
On December 19, 2014, the respondent commenced Civil
almost half-a-billion pesos, which the government could have Case No. 14-1330 in the RTC (with prayer for issuance of a
used to finance its much-needed infrastructure, livelihood temporary restraining order (TRO) or of a writ of preliminary
projects, and other equally important projects. injunction) for the judicial determination of the
constitutionality of Section 108 and Section 184 of the NIRC
WHEREFORE, premises considered, the petition for review is with respect to the taxes to be paid by non-life insurance
hereby DENIED. The assailed Resolutions dated July 27, 2011 companies. In its petition, the respondent contended that the
and November 15, 2011 of the Court of Tax Appeals En facts of the case must be appreciated in light of the effectivity
Banc are AFFIRMED. of Republic Act (R.A.) No. 1000 I entitled An Act Reducing the
Taxes on Life Insurance Policies, whereby the tax rate for life
SO ORDERED. insurance premiums was reduced from 5% to 2%; and the
pendency of deliberations on House Bill (H.B.) No. 3235
entitled An Act Rationalizing the Taxes Imposed on Non-Life
Insurance Policies, whereby an equal treatment for both life
COMMISSIONER OF INTERNAL REVENUE VS. STANDARD and non-life companies was being sought as a response to
INSURANCE G.R. NO. 219340 NOVEMBER 7, 2018 the supposed inequality generated by the enactment of R.A.
No. 10001.
The Case
On December 23, 2014, the RTC issued the TRO prayed for by
This appeal by petition for review on certiorari is being enjoining the BIR, its agents, representatives, assignees, or
directly brought by the Commissioner of Internal Revenue any persons acting for and in its behalf from implementing
(petitioner)1 to challenge the judgment rendered on May 8, the provisions of the NIRC adverted to with respect to the
20152 and the order issued on July 10, 2015,3 whereby the FDDA for the respondent's taxable year 2011, and to the
Regional Trial Court (RTC), Branch 66, in Makati City in Civil pending assessments for taxable years 2012 and 2013.
Case No. 14-1330, an action for declaratory relief initiated by
the respondent, respectively permanently enjoined the Later, on January 13, 2015, the RTC issued the writ of
petitioner, or any persons acting on her behalf from preliminary injunction.
proceeding with the implementation or enforcement of
Section 108 and Section 184 of the NIRC against the On May 8, 2015, the RTC rendered the assailed judgment
respondent, and denied her motion for reconsideration. wherein it opined that although taxes were self-assessing, the
tax system merely created liability on the part of the
Antecedents taxpayers who still retained the right to contest the particular
application of the tax laws; and holding that the exercise of
On February 13, 2014, the respondent received from the such right to contest was not considered a breach of the
Bureau of Internal Revenue (BIR) a Preliminary Assessment provision itself as to deter the action for declaratory
Notice (PAN) regarding its liability amounting to relief,9 and decreed thusly:
P377,038,679.55 arising from a deficiency in the payment of WHEREFORE, premises considered, the respondent, its
documentary stamp taxes (DST) for taxable year 2011. The agents, representatives, or any persons acting on its behalf is
respondent contested the PAN through its letter dated hereby permanently enjoined from proceeding with the
February 27, 2014, but the petitioner nonetheless sent to it a implementation or enforcement of Sections 108 and 184 of
formal letter of demand dated March 27, 2014. Although the the National Internal Revenue Code against petitioner
respondent requested reconsideration on April 22, 2014, 4 it Standard Insurance Co., Inc. until the Congress shall have
received on December 4, 2014 the Final Decision on Disputed enacted and passed into law House Bill No. 3235 in
Assessment (FDDA) dated November 25, 2014, declaring its conformity with the provisions of the Constitution.
liability for the DST deficiency, including interest and
compromise penalty, totaling P418,830,567.46.5 On SO ORDERED.10
December 11, 2014, it sought reconsideration of the FDDA,
and objected to the tax imposed pursuant to Section 184 of The petitioner moved for reconsideration of the judgment,
the NIRC as violative of the constitutional limitations on but on July 10, 2015 the RTC denied the motion for
46
reconsideration.11 We start by reminding the respondent about the inflexible
policy that taxes, being the lifeblood of the Government,
Hence, the petitioner has appealed directly to the should be collected promptly and without hindrance or delay.
Court,12 stating that: Obeisance to this policy is unquestionably dictated by law
I. itself. Indeed, Section 218 of the NIRC expressly provides that
"[n]o court shall have the authority to grant an injunction to
THE TRIAL COURT ERRED IN TAKING COGNIZANCE OF THE restrain the collection of any national internal revenue tax,
INSTANT CASE BECAUSE A PETITION FOR DECLARATORY fee or charge imposed by th[e] [NIRC]."14 Also, pursuant to
RELIEF IS NOT APPLICABLE TO CONTEST TAX ASSESSMENTS. Section 1115 of R.A. No. 1125, as amended, the decisions or
rulings of the Commissioner of Internal Revenue, among
II. others, assessing any tax, or levying, or distraining, or selling
any property of taxpayers for the satisfaction of their tax
THE TRIAL COURT ERRED IN TAKING COGNIZANCE OF THE liabilities are immediately executory, and their enforcement
INSTANT CASE BECAUSE THE PETITION FOR DECLARATORY is not to be suspended by any appeals thereof to the Court of
RELIEF IS FATALLY DEFECTIVE FOR FAILING TO SATISFY THE Tax Appeals unless "in the opinion of the Court [of Tax
BASIC REQUISITES UNDER RULE 63 OF THE RULES OF COURT. Appeals] the collection by the Bureau of Internal Revenue or
the Commissioner of Customs may jeopardize the interest of
III. the Government and/or the taxpayer," in which case the
Court of Tax Appeals "at any stage of the proceeding may
THE TRIAL COURT ERRED IN ADJUDGING SECTIONS 108 AND suspend the said collection and require the taxpayer either to
184 OF THE NIRC AS VIOLATIVE OF THE EQUAL PROTECTION deposit the amount claimed or to file a surety bond for not
CLAUSE. more than double the amount."

IV. In view of the foregoing, the RTC not only grossly erred in
giving due course to the petition for declaratory relief, and in
THE TRIAL COURT GRAVELY ERRED IN GRANTING INJUNCTIVE ultimately deciding to permanently enjoin the enforcement of
RELIEF IN FAVOR OF RESPONDENT, THE SAME (I) BEING the specified provisions of the NIRC against the respondent,
SPECIFICALLY PROHIBITED BY SECTION 218 OF THE NIRC; AND but even worse acted without jurisdiction.
(II} HAVING BEEN GRANTED WITHOUT FACTUAL OR LEGAL
BASIS. 2. Action for declaratory relief was procedurally
improper as a remedy
V.
We further indicate that even assuming, arguendo, that the
THE TRIAL COURT ERRED IN ACCORDING THE RELIEF RTC had jurisdiction to act on the petition in Civil Case No. 14-
ADJUDGED, GIVEN THAT: (A) THE RESULTANT REMEDY FALLS 1330, it nevertheless misappreciated the propriety of
OUTSIDE THE PURVIEW OF AN ACTION FOR DECLARATORY declaratory relief as a remedy.
RELIEF; AND (II) IT IS VIOLATIVE OF THE RULE THAT JUDICIAL
DECISIONS MUST FINALLY DETERMINE THE RIGHTS, An action for declaratory relief is governed by Section 1, Rule
OBLIGATIONS AND RESPONSIBILITIES OF PARTIES.13 63 of the Rules of Court.16 It is predicated on the attendance
Two substantial issues are presented for resolution. The first of several requisites, specifically: (1) the subject matter of the
is the propriety of the action for declaratory relief; the other, controversy must be a deed, will, contract or other written
the legal competence of the RTC to take cognizance of the instrument, statute, executive order or regulation, or
action for declaratory relief. ordinance; (2) the terms of said documents and the validity
thereof are doubtful and require judicial construction; (3)
Ruling of the Court there must have been no breach of the documents in
question; (4) there must be an actual justiciable controversy
The appeal is meritorious. or the "ripening seeds" of one between persons whose
interests are adverse; (5) the issue must be ripe for judicial
1. The injunctive relief is not available as a remedy to determination; and (6) adequate relief is not available
assail the collection of a tax through other means or other forms of action or
proceeding.17
The more substantial reason that should have impelled the
RTC to desist from taking cognizance of the respondent's The third, fourth, fifth and sixth requisites were patently
petition for declaratory relief except to dismiss the petition wanting.
was its lack of jurisdiction.
Firstly, the third requisite was not met due to the subject of

47
the action (i.e. statute) having been infringed or under Section 108 and Section 184 of the NIRC by contending
transgressed prior to the institution of the action. 18 We said tax provisions to be invalid and unconstitutional for their
observe in this regard that the RTC seemed to believe that unequal treatment of life and non-life insurance policies. The
the tax assessments issued had merely created a liability respondent cited R.A. No. 10001 and House Bill No. 3235 in
against the respondent as the taxpayer, and that its suit for support of its contention. Obviously, the challenge mounted
declaratory relief was but consistent with protesting the by the respondent against the tax provisions in question
assessments. The RTC's belief was absolutely devoid of legal could be said to be based on a contingency that might or
foundation, however, simply because internal revenue taxes, might not occur. This is because the Congress has not yet
being self-assessing, required no further assessment to give addressed the difference in tax treatment of the life and non-
rise to the liability of the taxpayer. 19 life insurance policies. Under the circumstances, the
respondent would not be entitled to declaratory relief
Specifically, the assessments for DST deficiencies of the because its right - still dependent upon contingent legislation
respondent for the years 2011, 2012 and 2013, as imposed - was still inchoate.
pursuant to Section 184 of the NIRC were the subject of the
respondent's petition for declaratory relief. Said legal Lastly, the respondent's adequate remedy upon receipt of the
provision states: FDDA for the DST deficiency for taxable year 2011 was not
Section 184. Stamp Tax on Policies of Insurance Upon the action for declaratory relief but an appeal taken in due
Property. - On all policies of insurance or other instruments course to the Court of Tax Appeals. Instead of appealing in
by whatever name the same may be called, by which due course to the CTA, however, it resorted to the RTC to
insurance shall be made or renewed upon property of any seek and obtain declaratory relief. By choosing the wrong
description, including rents or profits, against peril by sea or remedy, the respondent lost its proper and true recourse.
on inland waters, or by fire or lightning, there shall be Worse, the choice of the wrong remedy rendered the
collected a documentary stamp tax of Fifty centavos (P0.50) assessment for the DST deficiency for taxable year 2011 final
on each Four pesos (P4.00), or fractional part thereof, of the as a consequence. As such, the petition for declaratory relief,
amount of premium charged: Provided, however, That no assuming its propriety as a remedy for the respondent,
documentary stamp tax shall be collected on reinsurance became mooted by the finality of the assessment.
contracts or on any instrument by which cession or
acceptance of insurance risks under any reinsurance With not all the requisites for the remedy of declaratory relief
agreement is effected or recorded. being present, the respondent's petition for declaratory relief
had no legal support and should have been dismissed by the
What was being thereby taxed was the privilege of issuing
RTC.
insurance policies; hence, the taxes accrued at the time the
insurance policies were issued. Verily, the violation of Section
WHEREFORE, the Court GRANTS the petition for review
184 of the NIRC occurred upon the taxpayer's failure or
on certiorari; ANNULS and SETS ASIDE the decision rendered
refusal to pay the correct DST due at the time of issuing the
in Civil Case No. 14-1330 on May 8, 2015 by the Regional Trial
non-life insurance policies. Inasmuch as the cause of action
Court, Branch 66, in Makati City; DISMISSES Civil Case No. 14-
for the payment of the DSTs pursuant to Section 108 20 and
1330 on the ground of lack of jurisdiction; QUASHES the writ
Section 184 of the NIRC accrued upon the respondent's
of preliminary injunction issued against the Commissioner of
failure to pay the DST at least for taxable year 2011 despite
notice and demand, the RTC could not procedurally take Internal Revenue in Civil Case No. 14-1330 for being issued
without jurisdiction; and ORDERS the respondent to pay the
cognizance of the action for declaratory relief.
costs of suit.
Secondly, the apprehension of the respondent that it could
be rendered technically insolvent through the imposition of
the iniquitous taxes imposed by Section 108 and Section 184
of the NIRC,21 laws that were valid and binding, did not render
the action for declaratory relief fall within the purview of an
actual controversy that was ripe for judicial determination.
The respondent was thereby engaging in speculation or
conjecture, or arguing on probabilities, not actualities.
Therein lay the prematurity of its action, for a justiciable
controversy refers to an existing case or controversy that is
appropriate or ripe for judicial determination, not one that is
conjectural or merely anticipatory. 22

Admittedly, the respondent sought in the RTC the

determination of its right to be assessed the correct taxes
48