TAX 2 CTA 3A Digests

used for various public works and projects. Mitsubishi filed a MR

arguing that since the CA does not have jurisdiction over CIRs

MITSUBISHI MOTORS PHIL v. CIR (Villarin P)

appeal, it cannot perform any action on it except to order its

[GR. No. 209830; June 17, 2015]

dismissal. But the MR was denied, hence, this appeal.

No jurisdiction? You can only deny.

.
Issue/s:

Recit-Ready:

Facts: Mitsubishi used TCCs it secured from various transportation

companies to pay for various customs duties and taxes in the

WON the CA correctly referred the records of the collection case

to the CTA for proper disposition of the appeal taken by CIR.
NO

aggregate amount of P46.8 Million. When it was revealed that

the TCCs were fraudulently secured with the use of fake

Held: NO. The CA erred in referring the records of the

commercial and bank documents, the CIR deemed that

collection case to the CTA for proper disposition of the

Mitsubishi never settled its taxes and customs duties.

appeal taken by CIR. When a court has no jurisdiction

Thereafter, CIR demanded that Mitsubishi pay its unsettled tax

over the subject matter, the only power it has is to

and customs duties, but to no avail. Hence, it was constrained to

dismiss the action. CA has no jurisdiction over CIRs

file the instant complaint. After CIRs presentation of evidence,

appeal; hence, it cannot perform any action on the same

Mitsubishi filed a Demurrer on the ground of insufficiency of

except to order its dismissal pursuant to Section 2, Rule

evidence. The RTC granted the Demurrer. CIR appealed to the

5039 of the Rules of Court. Therefore, the act of the CA

CA and the CA referred the records of the case to the CTA for

in referring CIRs wrongful appeal before it to the CTA

proper disposition. While the CA admitted that it had no

under the guise of furthering the interests of substantial

jurisdiction to take cognizance of CIRs appeal, as jurisdiction is

justice is blatantly erroneous, and thus, stands to be

properly lodged with the CTA, it nevertheless opted to relax

corrected. In view of CIRs availment of a wrong mode of

procedural rules in not dismissing the appeal outright. Instead,

appeal the Court is constrained to deem the RTCs

the CA deemed it appropriate to simply refer the matter to the

dismissal of CIRs collection case against Mitsubishi final

CTA, considering that the government stands to lose the amount

and executory.

of P46.8 Million in taxes and customs duties which can then be


Facts:

accordingly, dismissed CIRs collection case on the ground of

CIR alleged that from 1997 to 1998, Mitsubishi was able to secure
TCCs from various transportation companies; after which, it made

The RTC granted Mitsubishis Demurrer to Plaintiffs Evidence, and

insufficiency of evidence.
It found that CIR had not shown any proof or substantial evidence of

several importations and utilized said TCCs for the payment of

fraud or conspiracy on the part of Mitsubishi in the procurement of

various customs duties and taxes in the aggregate amount of P46.8

the TCCs. In this connection, the RTC opined that fraud is never
presumed and must be established by clear and convincing

Million.
Believing the authenticity of the TCCs, CIR allowed Mitsubishi to use

the same for the settlement of such customs duties and taxes.
However, a post-audit investigation of the DOF revealed that the

dismissal of the complaint.

CIR moved for reconsideration, which was, however, denied.

Dissatisfied, it appealed to the CA.

The CA referred the records of the collection case to the CTA for

evidence, which Mitsubishi failed to do, thus, necessitating the

TCCs were fraudulently secured with the use of fake commercial and
bank documents, and thus, CIR deemed that Mitsubishi never

settled its taxes and customs duties pertaining to the aforesaid

proper disposition of the appeal taken by CIR. While the CA admitted

importations.
Thereafter, CIR demanded that Mitsubishi pay its unsettled tax and

that it had no jurisdiction to take cognizance of CIRs appeal, as

customs duties, but to no avail. Hence, it was constrained to file the

relax procedural rules in not dismissing the appeal outright. Instead,

instant complaint.
In its defense, Mitsubishi maintained that it acquired the TCCs from

the CA deemed it appropriate to simply refer the matter to the CTA,

their original holders in good faith and that they were authentic, and

Million in taxes and customs duties which can then be used for

thus, their remittance to CIR should be considered as proper

various public works and projects.

Aggrieved, Mitsubishi filed a MR arguing that since the CA does not

settlement of the taxes and customs duties it incurred in connection

jurisdiction is properly lodged with the CTA, it nevertheless opted to

considering that the government stands to lose the amount of P46.8

with the aforementioned importations.

After CIRs presentation of evidence, Mitsubishi filed a Demurrer to

have jurisdiction over CIRs appeal, it cannot perform any action on it

Plaintiffs Evidence contending that CIR failed to prove by clear and

Hence, this petition.

except to order its dismissal. The said motion was, however, denied.

convincing evidence that the TCCs were fraudulently procured.

Issue/s:

WON the CA correctly referred the records of the collection case

2. Exclusive appellate jurisdiction in tax collection

cases:

to the CTA for proper disposition of the appeal taken by CIR.NO

or orders of the Regional Trial Courts in tax

Held/Ratio: WHEREFORE, the petition is GRANTED. Accordingly, the

collection cases originally decided by them in

Resolutions dated June 7, 2013 and November 4, 2013 of the Court of

Appeals (CA) in CA-G.R. CV No. 99594 are hereby REVERSED and
SET ASIDE. Accordingly, a new one is entered DISMISSING the
appeal of CIR Bureau of Customs to the Court of Appeals.

their respective territorial jurisdiction.

xxxx
Similarly, Section 3, Rule 4 of the Revised Rules of the Court of Tax
Appeals, as amended,38 states:
o Sec. 3. Cases within the jurisdiction of the Court in Divisions.

NO. The CA erred in referring the records of the collection case to

acquire, among others, jurisdiction over the subject matter. It is

The Court in Divisions shall exercise:

xxxx
c. Exclusive jurisdiction over tax collections cases, to wit:
xxxx
2. Appellate jurisdiction over appeals from the

axiomatic that jurisdiction over the subject matter is the power to

judgments, resolutions or orders of the Regional

hear and determine the general class to which the proceedings in

Trial Courts in tax collection cases originally

question belong; it is conferred by law and not by the consent or

decided by them within their respective territorial

acquiescence of any or all of the parties or by erroneous belief of the

jurisdiction.
The foregoing provisions explicitly provide that the CTA has

the CTA for proper disposition of the appeal taken by CIR.

Jurisdiction is defined as the power and authority of a court to hear,
try, and decide a case. In order for the court or an adjudicative body
to have authority to dispose of the case on the merits, it must

court that it exists. Thus, when a court has no jurisdiction over

a. Over appeals from the judgments, resolutions

the subject matter, the only power it has is to dismiss the

exclusive appellate jurisdiction over tax collection cases originally

action.
Section 7 of RA 1125, as amended by RA 9282, reads:
o Sec. 7. Jurisdiction. The CTA shall exercise:
xxxx
c. Jurisdiction over tax collection cases as herein provided
xxxx

decided by the RTC.

In the instant case, the CA has no jurisdiction over CIRs appeal;

hence, it cannot perform any action on the same except to order its
dismissal pursuant to Section 2, Rule 5039 of the Rules of Court.
Therefore, the act of the CA in referring CIRs wrongful appeal before

it to the CTA under the guise of furthering the interests of substantial

justice is blatantly erroneous, and thus, stands to be corrected.

Finally, in view of CIRs availment of a wrong mode of appeal via

notice of appeal stating that it was elevating the case to the CA

instead of appealing by way of a petition for review to the CTA within

thirty (30) days from receipt of a copy of the RTCs Order, as
required by Section 11 of RA 1125, as amended by Section 9 of RA
928243 the Court is constrained to deem the RTCs dismissal of
CIRs collection case against Mitsubishi final and executory.
It is settled that the perfection of an appeal in the manner and within

P154k ++ pertaining to its local business tax.

the period set by law is not only mandatory, but jurisdictional as well,
and that failure to perfect an appeal within the period fixed by law
renders the judgment appealed from final and executory.

Feb. 8 Treasurer acknowledged payment and said she will

wait for the formal protest by the CBC.
Mar. 27 CBC said its letter of Jan. 15 is already its formal
protest.

===INACTION==

Apr. 17 filed a Pet for Review before the RTC.

Issue:
1. W/N the protest was valid. Yes no formal requirements
so long as objections and reasons therefor are stated.
2. W/N the petition is meritorious. NO filed out of time.
Appeal is a statutory right, so you must comply with all

CHINA BANKING CORPORATION VS. TREASURER OF MANILA

(Villarivera)
[GR. No. 204117; July 1, 2015]
No formal requirement to protest an assessment. So long as objections
and reasons therefor are stated.
Recit-Ready:
Facts:

jurisdiction.
Held/Ratio:
1. No formal requirement, so long as objections and
reasons therefor were stated in the protest.
o

In this case, CBC was unequivocal in its objection.

Arguments were stated. That it was not liable to pay

the additional tax imposed under the subject

In Jan. 2007, China Banking (CBC) was assessed by the

Treasurer of Manila for deficiency tax for P267k ++.

requirements of law. Failure to do so, court no

Jan. 15 - CBC paid but protested, alleging double taxation of

ordinance.
o

That the imposition "constitute[d] double taxation"

and, for said reason, invalid.

Despite its objection, it remitted the total amount of

Feb. 8 Treasurer acknowledged receipt of payment and informed

P267,128.70

CBC that she will wait for CBCs formal protest letter.

under

protest

"to

avoid

penalties/surcharges and any threat of closure.

On March 27, CBC wrote a letter-reply reiterating that it already

protested in its Letter dated January 12, 2007.

2. NO. Pet was filed out of Time. Sec. 195 LGC.

in the letter, CBC averred that pursuant to Sec. 195 LGC,

Re: Reckoning of Prescriptive Period

Treasurer had until March 16, 2007 within which to decide the

Reckoning period must be from Jan. 15 (60 days from Jan.

protest,

15 to appeal to the court of competent jurisdiction) OR 30

considering that Treasurer received the Letter dated February 8,

2007, four days after the deadline to decide and petitioner did

days after the lapse of 60 days (inaction).

not even resolve the protest,

This case: INACTION, so from Jan.15:
60d + 30d = Apr. 16. (CBC filed Apr. 17 Tsk!)

CBC already formally demanded the refund of the amount of

P154,398.50, representing the business tax collected under
Section 21 of the Manila Revenue Code.

Re: Jurisdiction of RTC. (ONLY JUST IN CASE SIR ASKS)

April 17, respondent CBC filed a Petition for Review with the RTC of

SC said even assuming filed on time, RTC had no

Manila, raising the issue of its liability to pay the local business

jurisdiction because the claim was P154k++, below the

tax (or if there was double taxation).

jurisdiction of RTC. Should be with MTC.

RTC- ifo of CBC. The ordinance upon which the tax was imposed was
unconstitutional (decided upon in another case)

This case: P154,398.50, so appeal to MTC not RTC.

MR-denied.
CTA and CTA En-Banc Reversed the RTC. (so ifo Taxation) because

Facts:

the Pet for Review was filed out of time.

In January 2007, CBC was assessed P267,128.70 by petitioner City

Treasurer of Manila, consisting of local business tax, business permits,

Issue/s:

and other fees for taxable year 2007.

W/N CBC validly protested its assessment. YES. No formal

Jan. 15, 2007 - CBC paid the amount and filed a protest (letter

requirement specified in law. Valid so long as it states the taxpayers

was dated Jan. 12, 2007) alleging double taxation.

objection to the assessment and the reasons therefor.

Perfection of an appeal in the manner and within the period laid down
Held:

by law is not only mandatory but also jurisdictional. The failure to

No formal requirement, so long as objections and reasons

perfect an appeal precludes the appellate court from acquiring

therefor were stated in the protest.

jurisdiction over the case.

In this case, CBC was unequivocal in its objection.

At the risk of being repetitious, the Court declares that the right to

It argued that it was not liable to pay the additional tax imposed

appeal is not a natural right nor a part of due process. It is merely a

under the subject ordinance.

statutory privilege, and may be exercised only in the manner and in

That the imposition "constitute[d] double taxation" and, for said

accordance with the provisions of the law.

reason, invalid.

Despite its objection, it remitted the total amount of P267,128.70

Assuming filed on time: RTC has no jurisdiction.

under protest "to avoid penalties/surcharges and any threat of

Section 195 of the Local Government Code which states that the

closure.

remedy of the taxpayer whose protest is denied by the local treasurer is

"to appeal with the court of competent jurisdiction."

Re: Reckoning of Prescriptive Period

Period within which the City Treasurer must act on the protest, and the

R.A. No. 9282, the authority to exercise either original or appellate

consequent period to appeal a "denial due to inaction," should be

jurisdiction over local tax cases depended on the amount of the

reckoned from January 15, 2007, the date CBC filed its protest,

claim.

and not March 27, 2007 (when CBC reiterated that it had already
protested).

B.P. 129, as amended provides:

Consequently, CBC had lost its right to challenge the City Treasurers

Sec. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts

"denial due to inaction." On this matter, Section 195 of the LGC is

and Municipal Circuit Trial Courts in Civil Cases. Metropolitan Trial

clear.

1 SECTION 195. Protest of Assessment. -When the local treasurer or his duly authorized

representative finds that correct taxes, fees, or charges have not been paid, he shall issue a notice
of assessment stating the nature of the tax, fee or charge, the amount of deficiency, the
surcharges, interests and penalties. Within sixty (60) days from the receipt of the notice of
assessment, the taxpayer may file a written protest with the local treasurer contesting the
assessment; otherwise, the assessment shall become final and executory. The local treasurer

shall decide the protest within sixty (60) days from the time of its filing. If the local treasurer finds
the protest to be wholly or partly meritorious, he shall issue a notice canceling wholly or partially
the assessment. However, if the local treasurer finds the assessment to be wholly or partly correct,
he shall deny the protest wholly or partly with notice to the taxpayer. The taxpayer shall have
thirty (30) days from the receipt of the denial of the protest or from the lapse of the sixty
(60)-day period prescribed herein within which to appeal with the court of competent
jurisdiction otherwise the assessment becomes conclusive and unappealable.

Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts shall

Held: NO. The Collector of Customs issued the Customs

exercise:

Memorandum Circular based on an interpretation (letter)

(1) Exclusive original jurisdiction over civil actions and probate

by the CIR of the Tax Code (an exercise of her quasi-

proceedings, testate and intestate, including the grant of provisional

legislative function). The interpretation of tax laws is an

remedies in proper cases, where the value of the personal property,

exercise by the CIR of her quasi-legislative function

estate, or amount of the demand does not exceed One hundred

which is subject to review by the Secretary of Finance,

thousand pesos (P100,000.00) or, in Metro Manila where such

not the CTA. Thus, this is NOT appealable to the CTA

personal property, estate, or amount of the demand does not exceed

(as only those in the exercise of her quasi-judicial

Two hundred thousand pesos (P200,000.00) x x x x

function are appealable to the CTA). Furthermore,

Petron should have first appealed the ruling of the

This case: P154,398.50, so appeal to MTC not RTC

customs collector to the Commissioner of Customs.

Thus,

in

this

case,

Petron

failed

to

exhaust

administrative remedies.
CIR vs. CTA & Petron (Vanslembrouck)
[GR. No. 207843; July 15, 2015]

Facts:

CTA, wag ka assuming kung wala ka namang jurisdiction

Petron is engaged in the manufacture of petroleum products. It

imports alkylate as a blending component for the manufacture of

Recit-Ready:
Facts:Petron imported alkylate as a component for its gasoline.

said that the importation was exempt from excise tax as it was not

It was assessed excise tax by the customs collector.

among those enumerated in the NIRC as subject to excise tax.

o This was however, without prejudice to the final resolution of

Petron brought a Petition for Review with the CTA

assailing the collection of the tax.
Issue/s: WON the CTA correctly assumed jurisdiction over
the case?

gasoline.
It imported alkylate (22 separate importations) for which the CIR

the BIR whether the item was subject to excise tax.

Subsequently, in June 2012, Petron imported alkylate. It was
however subjected to excise taxes of P4.35/liter by the customs
collector as evidenced by the Import Entry and Internal Revenue
Declaration (IEIRD).

It was supposedly premised on a certain Customs

abuse of discretion when it assumed authority to take cognizance of

Memorandum Circular (CMC No. 164-2012) issued by the

the case despite its lack of jurisdiction to do so

Commissioner of Customs (COC) which implemented a

The CIR asserts that:

Letter issued by the CIR saying that: "Alkylate is subject to

The interpretation of the subject tax provision, (i.e., Section

excise tax under Section 148(e) of the NIRC."

In view of the assessment, Petron filed before the CTA a petition for

148 (e) of the NIRC, embodied in CMC No. 164-2012), is an

review, on WON its importation of alkylate was subject to excise tax.

o The CIR filed a MTD on grounds of lack of jurisdiction and

reviewable by the Secretary of Finance, whose decision, in

exercise of her quasi-legislative function which is

turn, is appealable to the Office of the President and,

prematurity.
Initially, the CTA granted the CIR's motion and dismissed the

ultimately, to the regular courts.

o

case.
However, on Petron's Motion for Reconsideration, the CTA gave due

Only her quasi judicial functions or the authority to decide

disputed assessments, refunds, penalties and the like are
subject to the exclusive appellate jurisdiction of the CTA.

course to Petron's petition and found that:

a) the controversy was not essentially for the determination of

She likewise contends that the petition suffers from

prematurity due to Petron's failure to exhaust all available

the constitutionality, legality or validity of a law, rule or

remedies within the administrative level in accordance with

regulation but a question on the propriety or soundness of

the Tariff and Customs Code (TCC).

the CIR's interpretation of Section 148 (e) of the NIRC which

falls within the exclusive jurisdiction of the CTA under
Section 4 thereof, particularly under the phrase "other
matters arising under [the NIRC]"; and
b) there are attending circumstances that exempt the case from

Issue/s:

WON the CTA properly assumed jurisdiction over the

petition assailing the imposition of excise tax on Petron's

the rule on non-exhaustion of administrative remedies, such

importation of alkylate based on Section 148 (e) of the NIRC?

as the great irreparable damage that may be suffered by

NO

Petron from the CIR's final assessment of excise tax on its

importation.
Aggrieved, the CIR sought immediate recourse to the Court,
through the instant petition, alleging that the CTA committed grave

Held/Ratio: Petition GRANTED. The CIR's position is well-grounded.

Section 4 of the NIRC. Power of the Commissioner to

fees or other charges, penalties in relation

Interpret Tax Laws and to Decide Tax Cases confers upon the

thereto, or other matters arising under the

CIR both:

National

The CIR correctly argues that the CTA had no jurisdiction to

the Court of Tax Appeals.

necessarily

Conversely, it has no jurisdiction to determine the validity of a

involve

declaration

of

the

validity

or

constitutionality of the CIR's interpretation of Section 148 (e) of

The CTA is a court of special jurisdiction, with power to review

the NIRC, which is subject to the exclusive review by the

Secretary of Finance and ultimately by the regular courts.

In British American Tobacco v. Camacho, the Court ruled that

ruling issued by the CIR or the COC in the exercise of their

the CTA's jurisdiction to resolve tax disputes EXCLUDES the

quasi-legislative powers to interpret tax laws.

power to rule on the constitutionality or validity of a law,

These observations may be deduced from a reading of Section

rule or regulation, to wit:

7 of RA 1125 entitled "An Act Creating the Court of Tax

Petron's petition before the CTA ultimately challenged the

take cognizance of the petition as its resolution would

the CIR or the COC.

laws

subject to the exclusive appellate jurisdiction of

by appeal decisions involving tax disputes rendered by either

other

provision.

(b) the power to decide tax cases in the exercise of her

or

legality and constitutionality of the CIR's interpretation of a tax

subject to review by the Secretary of Finance.

quasi-judicial function.

Revenue

administered by the Bureau of Internal Revenue;

(a) the power to interpret tax laws in the exercise of her

quasi-legislative function;

Internal

While the above statute confers on the CTA jurisdiction

Appeals," enumerating the cases over which the CTA may

to resolve tax disputes in general, this does not include

exercise its jurisdiction.

cases where the constitutionality of a law or rule is

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

challenged.

Exclusive appellate jurisdiction to review by appeal, as

Where what is assailed is the validity or constitutionality

of a law, or a rule or regulation issued by the

herein provided:

Decisions of the Commissioner of Internal

administrative agency in the performance of its quasi

Revenue

legislative function, the regular courts have jurisdiction

in

cases

involving

disputed

assessments, refunds of internal revenue taxes,

to pass upon the same.

As the CIR aptly pointed out, the phrase "other matters arising

exercise of her quasi-legislative functions, the proper

4 of the NIRC, should be understood as pertaining to those

recourse against the subject tax ruling expressed in CMC No.

matters directly related to the preceding phrase "disputed

164-2012 is a review by the Secretary of Finance and

assessments, refunds of internal revenue taxes, fees or other

ultimately the regular courts.

Besides, Petron prematurely invoked the jurisdiction of the CTA.

therefore not be taken in isolation to invoke the jurisdiction of the

Under Section 7 of RA 1125, what is appealable to the CTA is

CTA.

the decision of the COC over a customs collector's adverse

In other words, the subject phrase should be used only in

ruling on a taxpayer's protest:

reference to cases that are, to begin with, subject to the

SEC. 7. Jurisdiction. - The CTA shall exercise exclusive

exclusive appellate jurisdiction of the CTA, i.e., those

appellate jurisdiction to review by appeal, as herein

controversies over which the CIR had exercised her quasi-

provided:

judicial

Hence, as the CIR's interpretation of a tax provision involves an

under this Code," as stated in the second paragraph of Section

charges, penalties imposed in relation thereto" and must

functions

or

her

power

to

decide

disputed

Decisions of the Commissioner of Internal

assessments, refunds or internal revenue taxes, fees or other

Revenue

charges, penalties imposed in relation thereto, NOT to those

assessments, refunds of internal revenue taxes,

that involved the CIR's exercise of quasi-legislative powers.

fees or other charges, penalties in relation

In Enrile v. Court of Appeals, the Court, applying the statutory

thereto, or other matters arising under the

construction principle of ejusdem generis, explained the import

National

of using the general clause "other matters arising under the

administered by the Bureau of Internal Revenue;

Customs Law or other law or part of law administered by the

in

Internal

cases

involving

Revenue

or

disputed

other

laws

Decisions of the Commissioner of Customs in

Bureau of Customs" in the enumeration of cases subject to the

cases involving liability for customs duties, fees

exclusive appellate jurisdiction of the CTA, saying that:

or other money charges, seizure, detention or

The 'other matters' that may come under the general

release of property affected, fines, forfeitures or

clause should be of the same nature as those that

other penalties in relation thereto, or other

have preceded them applying the rule of construction

matters arising under the Customs Law or other

known as ejusdem generis.

laws administered by the Bureau of Customs;

Section 11 of RA 1125 is no less categorical in stating that what

possible adverse ruling therein to the COC, reasoning that such

may be the subject of an appeal to the CTA is a decision,

a procedure would be costly and impractical, and would unjustly

ruling or inaction of the CIR or the COC, among others.

delay the resolution of the issues which, being purely legal in

In this case, there was even no tax assessment to speak of.

nature anyway, were also beyond the authority of the customs

While the customs collector himself admittedd that the

collector to resolve with finality.

computation he had written at the back page of the IEIRD

This admission is at once decisive of the issue of the

CTA's jurisdiction over the petition.

served as the final assessment imposing excise tax on Petron's

importation of alkylate, the Court concurs with the CIR's stance

There being no protest ruling by the customs collector

that the subject IEIRD was not yet the customs collector's final

that was appealed to the COC, the filing of the petition

assessment that could be the proper subject of review.

before the CTA was premature as there was nothing yet

first for review before the COC and not directly to the
o

Verily, the fact that there is no decision by the COC to appeal

CTA.

from highlights Petron's failure to exhaust administrative

It should be stressed that the CTA has no jurisdiction to

remedies prescribed by law.

review by appeal, decisions of the customs collector.

o

to review.

And even if it were, the same should have been brought

While there are exceptions to the principle of exhaustion

The TCC prescribes that a party adversely affected by a

of administrative remedies, it has not been sufficiently

ruling or decision of the customs collector may protest

shown that the present case falls under any of the

such ruling or decision upon payment of the amount due

exceptions.

and, if aggrieved by the action of the customs collector

on the matter under protest, may have the same
o

reviewed by the COC.

CIR v. LEAL (FajardoRK)

It is only after the COC shall have made an adverse

[GR. No. 113459; November 18, 2002]

ruling on the matter may the aggrieved party file an

appeal to the CTA.

Recit-Ready:

Notably, Petron admitted to not having filed a protest of the

Facts: The CIR issued an RMO No. 15-91 which imposes 5%

assessment before the customs collector and elevating a

lending investors tax on pawnshops based on their

gross income and requiring all investigating units of the

the CTA, not the RTC. Indeed, the CA erred in holding

Bureau to investigate and assess the lending investors

that the RTC order should have been challenged before

tax. This was an offshoot of petitioners evaluation that

SC.

the nature of pawnshop business is similar to that of

lending investors. CIR then issued RMO subjecting the
pawn ticket to the DST under the tax code. Respondent
were adversely affected by the revenue orders and

Facts:

asked for reconsideration of both RMO No. 15-91 and

on dealers in securities and lending investors, the CIR issued

RMC No. 43-91 filed with the RTC a petition for

Memorandum Order (RMO) No. 15-91

o It imposes 5% lending investors tax on pawnshops

prohibition to implement such revenue orders.

based

(1) Whether or not the CTA has jurisdiction to review the

ruling of the CIRYes the CTA has JD

The questioned RMO and RMC are actually rulings or

opinions of the Commissioner implementing the Tax
Code on the taxability of Pawnshops. Under RA 1125,

imposed in relation thereto or other matters arising under

the NIRC or other laws or part of law administered by the
BIR. Clearly then, she should have filed her petition with

income

and

requiring

all

assess the lending investors tax due from them.

The issuance of RMO No. 15-91 was an offshoot of petitioners

the pawn ticket to the DST under the tax code.

The respondent was adversely affected by the revenue orders and
asked for reconsideration of both RMO No. 15-91 and RMC No. 4391 filed with the RTC a petition for prohibition to implement such

exclusive appellate jurisdiction to review by appeal, the

assessments, refunds, fees, or other charges, penalties

gross

lending investors.
Subsequently, petitioner issued RMO Circular No. 43-91, subjecting

Section 7 (The JD of the CTA)it shall exercise

decisions of the CIR in cases involving disputed

their

evaluation that the nature of pawnshop business is similar to that of

Held: The jurisdiction to review rulings of the Commissioner

pertains to the CTA and NOT the RTC.

on

investigating units of the Bureau to investigate and

Issue/s:

Pursuant to Sec. 116 of the Tax Code which imposes percentage tax

revenue orders.
The CIR, through the OSG, filed a motion to dismiss on the ground
that the RTC has no jurisdiction to review the questioned revenue
orders.

Their MTD was denied holding that the revenue orders are not

gross income pursuant to Section 116 of the Tax Code, as

assessments to implement a Tax Code provision, but are in effect

amended.

new taxes which are not provided under the Code.

The CA affirmed the order issued by the RTC

Such revenue orders were issued pursuant to petitioners

powers under Section 245 of the Tax Code regarding the
authority of the Secretary of Finance to determine articles

Issue/s:

similar or analogous to those subject to a rate of sales tax under

Whether or not the Court of Tax Appeals has jurisdiction to review

ruling of the CIRYes, the CTA has JD

certain category enumerated in Sections 163 and 165 of this

Held/Ratio:

Commissioner of Internal Revenue to make rulings or opinions

Code shall be without prejudice to the power of the

in connection with the implementation ruling on the classification

Yes the CTA has jurisdiction. The jurisdiction to review rulings of

the Commissioner pertains to the CTA and NOT the RTC.

The questioned RMO and RMC are actually rulings or opinions

of the Commissioner implementing the Tax Code on the
taxability of Pawnshops. This is clear from petitioners RMO No.
15-91 which reads:
A restudy of P.D. 114 (the Pawnshop Regulation Act)
shows that the principal activity of pawnshops is lending
money at interest and incidentally accepting a pawn of
personal property delivered by the pawner to the pawnee
as security for the loan (Sec. 3, ibid.). Clearly, this makes
pawnshop business akin to lending investors business
activity which is broad enough to encompass the business
of lending money at interest by any person whether natural
or juridical. Such being the case, pawnshops shall be
subject to the 5% lending investors tax based on their

of articles of sales and similar purpose.

Under RA 1125 (An Act Creating the CTA), Sec 7. Jurisdiction
The Court of Tax Appeals shall exercise exclusive appellate
jurisdiction to review by appeal, the decisions of the CIR in
cases involving disputed assessments, refunds, fees or other
charges, penalties imposed in relation thereto or other matters
arising under the NIRC or other laws or part of law administered
by the BIR.
SEC. 11. Who may appeal; effect of appeal.Any person,
association or corporation adversely affected by a decision or
ruling of the Commissioner of Internal Revenue, or the
Commissioner of Customs or any provincial or city Board of
Assessment Appeals may file an appeal in the Court of Tax
Appeals within thirty days after the receipt of such decision or
ruling.

x x x x x x x x. (emphasis added)

public auction. Asia International Auctioneers is engaged

SEC. 18. x x x.No judicial proceedings against the

in the importation of second hand cars which they sell to

Government involving matters arising under the National

the public through public auction.

Internal Revenue Code, the Customs Law or the Assessment

Law shall be maintained, except as herein provided, until and

The petitioners filed before the RTC a complaint stating

unless an appeal has been previously filed with the Court of Tax

that the RMC is unconstitutional and is an ultra vires act.

Appeals and disposed of in accordance with the provisions of

The CIR filed a motion to dismiss stating that the RTC

this Act.

has no jurisdiction over the case. In the meantime, the

x x x x x x x x x. (emphasis added)

BIR District Officer sent a PAN to the petitioner for

unpaid VAT on auction sales.

Respondent Josefina Leal, being a pawnshop owner is assailing

the revenue orders imposing 5% lending investors tax on

Issue:

pawnshops issued by petitioner.

WON the RTC has jurisdiction over the case. (NO)

Clearly then, she should have filed her petition with the CTA, not
the RTC. Indeed, the CA erred in holding that the RTC order
should have been challenged before SC.

ASIA INTERNATIONAL AUCTIONEERS, INC. v. PARAYNO, JR. (Go)

[GR. No. 163445; December 18, 2007]
An RMC is a ruling or opinion of the CIR, thus the CTA will have
jurisdiction in cases which question RMCs
Recit-Ready:
Facts: The CIR issued RMC 31-2003 which sets the guidelines

Held: In ruling for the CIR, the SC noted that Sec. 7 of R.A.
1125 vests with the CTA the exclusive appellate
jurisdiction to review decisions of the CIR in cases
involving disputed assessments, refunds of internal
revenue taxes, fees, or other charges, penalties imposed
in relation thereto, or other matters arising under the
NIRC or other laws or part of law administered by
the BIR. An RMC is considered as an administrative
ruling, which is issued from time to time by the CIR.

for the taxation of imported motor vehicles in the Subic

In the case at bar, the assailed RMC is a ruling of the

Free Port Zone and other free port zones that are sold at

CIR on the tax treatment of motor vehicles sold at public

of Asia International for unpaid VAT on auction sales

auction within the SSEZ pursuant to R.A. 7227. This

RMC was issued in accordance with the power of the
CIR to interpret tax laws. Thus, the petitioners should
have filed their case with the CTA and not the RTC.

conducted on June 6-8, 2003.

Petitioners arguments against the Motion to Dismiss:
o The jurisdiction over the case properly pertains to the
regular courts since it is an action to declare as
unconstitutional, void and against the provisions of RA

Facts:

Congress enacted R.A. 7227 creating the Subic Special Economic

Zone (SSEZ), which extended a number of economic or tax

imposed taxes, rather, it challenges the authority of the

incentives therein.
On June 3, 2003, CIR Parayno issued RMC 31-2003 setting the

Uniform Guidelines on the Taxation of Imported Motor Vehicles

through the Subic Free Port Zone and Other Freeport Zones that are

Sold at Public Auction.

The petitioner, Asia International Auctioneers, is a corporation
organized under Philippine laws with principal place of business
within the SSEZ. It is engaged in the importation of mainly
secondhand or used motor vehicles and heavy transportation or

construction equipment which it sells to the public through auction.

The petitioner filed a case with the RTC of Olongapo, praying for the
nullification of RMC 31-2003 stating that it is unconstitutional and is

an ultra vires act.

The CIR filed a motion to dismiss alleging: (1) the RTC has no
jurisdiction over the case; and (2) non-exhaustion of administrative
remedies.
o In the meantime, BIR Revenue District Officer Tambis
sent a 10-day Preliminary Notice (PAN) to the president

7227 the RMC issued by the CIR.

It does not challenge the rate, structure or figures of
CIR to impose and collect said taxes.
The challenge on the authority of the CIR to issue the
RMC does not fall within the jurisdiction of the CTA.

Issue:
WON the RTC has jurisdiction over the case
NO
Held/Ratio: Petition DENIED.
NO. The case at bar properly falls within the jurisdiction of the
CTA.
o Sec. 7 of R.A. 1125 states that the Court of Tax Appeals shall
exercise exclusive appellate jurisdiction to review by appeal:
o Decisions of the Commissioner of Internal
Revenue

in

cases

involving

disputed

assessments, refunds of internal revenue taxes, fees

or other charges, penalties imposed in relation
thereto, or other matters arising under the National

Internal Revenue Code or other laws or part of law

subject to the exclusive appellate jurisdiction of

administered by the Bureau of Internal Revenue.

The SC has held that RMCs are considered administrative

the Court of Tax Appeals.

With the foregoing, it is the CTA which has jurisdiction over the case.

rulings, which are issued from time to time by the CIR.

In the case at bar, the assailed RMC is a ruling or opinion of the

ASIA INTERNATIONAL AUCTIONEERS, INC. v. PARAYNO, JR. (Go)

CIR on the tax treatment of motor vehicles sold at public auction

[GR. No. 163445; December 18, 2007]

within the SSEZ to implement R.A. 7227 which provides that the

An RMC is a ruling or opinion of the CIR, thus the CTA will have

exportation or removal of goods from the territory of the SSEZ to

jurisdiction in cases which question RMCs

the other parts of the Philippine territory shall be subject to

customs duties and taxes under the Customs and Tariff Code and

Recit-Ready:

other relevant tax laws of the Philippines.

RMC 31-2003 was issued pursuant to the power of the CIR under

Facts: The CIR issued RMC 31-2003 which sets the guidelines

Sec. 4 of the NIRC.

o Section 4. Power of the Commissioner to Interpret Tax

Free Port Zone and other free port zones that are sold at

for the taxation of imported motor vehicles in the Subic

public auction. Asia International Auctioneers is engaged

Laws and to Decide Tax Cases. -- The power to

in the importation of second hand cars which they sell to

interpret the provisions of this Code and other tax

the public through public auction.

laws shall be under the exclusive and original

jurisdiction of the Commissioner, subject to

The petitioners filed before the RTC a complaint stating

review by the Secretary of Finance.

that the RMC is unconstitutional and is an ultra vires act.

The CIR filed a motion to dismiss stating that the RTC

The power to decide disputed assessments, refunds

has no jurisdiction over the case. In the meantime, the

of internal revenue taxes, fees or other charges,

BIR District Officer sent a PAN to the petitioner for

penalties imposed in relation thereto, or other

unpaid VAT on auction sales.

matters arising under this Code or other laws or

portions thereof administered by the Bureau of
Internal Revenue is vested in the Commissioner,

Issue:
WON the RTC has jurisdiction over the case. (NO)

The petitioner, Asia International Auctioneers, is a corporation

Held: In ruling for the CIR, the SC noted that Sec. 7 of R.A.

organized under Philippine laws with principal place of business

1125 vests with the CTA the exclusive appellate

within the SSEZ. It is engaged in the importation of mainly

jurisdiction to review decisions of the CIR in cases

secondhand or used motor vehicles and heavy transportation or

involving disputed assessments, refunds of internal

construction equipment which it sells to the public through auction.

The petitioner filed a case with the RTC of Olongapo, praying for the

revenue taxes, fees, or other charges, penalties imposed

nullification of RMC 31-2003 stating that it is unconstitutional and is

in relation thereto, or other matters arising under the

NIRC or other laws or part of law administered by
the BIR. An RMC is considered as an administrative

an ultra vires act.

The CIR filed a motion to dismiss alleging: (1) the RTC has no
jurisdiction over the case; and (2) non-exhaustion of administrative

ruling, which is issued from time to time by the CIR.

remedies.
o In the meantime, BIR Revenue District Officer Tambis

In the case at bar, the assailed RMC is a ruling of the

sent a 10-day Preliminary Notice (PAN) to the president

CIR on the tax treatment of motor vehicles sold at public

of Asia International for unpaid VAT on auction sales

auction within the SSEZ pursuant to R.A. 7227. This

RMC was issued in accordance with the power of the
CIR to interpret tax laws. Thus, the petitioners should
have filed their case with the CTA and not the RTC.

conducted on June 6-8, 2003.

Petitioners arguments against the Motion to Dismiss:
o The jurisdiction over the case properly pertains to the
regular courts since it is an action to declare as
unconstitutional, void and against the provisions of RA

Facts:

Congress enacted R.A. 7227 creating the Subic Special Economic

Zone (SSEZ), which extended a number of economic or tax

imposed taxes, rather, it challenges the authority of the

incentives therein.
On June 3, 2003, CIR Parayno issued RMC 31-2003 setting the

Uniform Guidelines on the Taxation of Imported Motor Vehicles

through the Subic Free Port Zone and Other Freeport Zones that are
Sold at Public Auction.

7227 the RMC issued by the CIR.

It does not challenge the rate, structure or figures of
CIR to impose and collect said taxes.
The challenge on the authority of the CIR to issue the
RMC does not fall within the jurisdiction of the CTA.

Issue:
WON the RTC has jurisdiction over the case

NO

Section 4. Power of the Commissioner to Interpret Tax

Laws and to Decide Tax Cases. -- The power to

Held/Ratio: Petition DENIED.

interpret the provisions of this Code and other tax

laws shall be under the exclusive and original

NO. The case at bar properly falls within the jurisdiction of the

jurisdiction of the Commissioner, subject to

CTA.
o Sec. 7 of R.A. 1125 states that the Court of Tax Appeals shall

review by the Secretary of Finance.

The power to decide disputed assessments, refunds

exercise exclusive appellate jurisdiction to review by appeal:

o Decisions of the Commissioner of Internal
Revenue

in

cases

involving

of internal revenue taxes, fees or other charges,

disputed

penalties imposed in relation thereto, or other

assessments, refunds of internal revenue taxes, fees

matters arising under this Code or other laws or

or other charges, penalties imposed in relation

portions thereof administered by the Bureau of

thereto, or other matters arising under the National

Internal Revenue is vested in the Commissioner,

Internal Revenue Code or other laws or part of law

subject to the exclusive appellate jurisdiction of

administered by the Bureau of Internal Revenue.

The SC has held that RMCs are considered administrative

rulings, which are issued from time to time by the CIR.

In the case at bar, the assailed RMC is a ruling or opinion of the

the Court of Tax Appeals.

With the foregoing, it is the CTA which has jurisdiction over the case.
CIR v. HAMBRECHT AND QUIST PHILIPPINES INC. (Lim, Q.)

CIR on the tax treatment of motor vehicles sold at public auction

[GR. No. 169225; November 17, 2010.]

within the SSEZ to implement R.A. 7227 which provides that the

CTA has jurisdiction over Other Matters

exportation or removal of goods from the territory of the SSEZ to

the other parts of the Philippine territory shall be subject to

Recit-Ready:

customs duties and taxes under the Customs and Tariff Code and

Facts: The assessment against Hambrecht & Quist had

other relevant tax laws of the Philippines.

RMC 31-2003 was issued pursuant to the power of the CIR under

become final and unappelable since there was a failure

Sec. 4 of the NIRC.

law. However, the CTA held that the BIR failed to collect

to protest the same within the 30-day period provided by

within the prescribed time and thus ordered the

cancellation of the assessment notice. The CIR disputed

request. The right to collect has indeed prescribed since

the jurisdiction of the CTA arguing that since the

there was no proof that the request for reinvestigation

assessment had become final and unappealable, the

was in fact granted/acted upon by the CIR. Thus, the

taxpayer can no longer dispute the correctness of the

period to collect was never suspended.

assessment even before the CTA.

Facts:
Issue/s:

Respondent, Hambrecht and Quist Philippines Inc. (HQPI),

the

informed the Bureau of Internal Revenue (BIR), through its West-

governments right to collect the tax has prescribed.

YES
2) WON the period to collect the assessment has

Makati District Office of its change of business address.

o Said letter was duly received by the BIR West Makati on

1) WON

the

CTA

has

jurisdiction

to

rule that

prescribed.
YES

February 18, 1993.

On November 4, 1993, HQPI received a tracer letter or followup
letter

dated

October

11,

1993

issued

by

the

Accounts

Receivable/Billing Division of the BIRs National Office and signed by

Held:

then Assistant Chief Mr. Manuel B. Mina, demanding for payment of

1) YES. The appellate jurisdiction of the CTA is not limited to

alleged deficiency income and expanded withholding taxes for the

cases which involve decisions of the CIR on matters relating

to assessments or refunds. The CTA Law clearly bestows

taxable year 1989 amounting to P2,936,560.87.

o On December 3, 1993, HQPI, through its external

jurisdiction to the CTA even on other matters arising

auditors, filed its protest letter against the alleged

under the National Internal Revenue Code. Thus, the

issue of whether the right of the CIR to collect has

deficiency tax assessments for 1989.

The alleged deficiency income tax assessment apparently resulted

prescribed, collection being one of the duties of the BIR, is

from an adjustment made to respondents taxable income for the

considered covered by the term other matters.

year 1989, on account of the disallowance of certain items of

2) YES. Two requisites must concur before the period to enforce

expense, namely, professional fees paid, donations, repairs and

collection may be suspended: (a) that the taxpayer requests

maintenance, salaries and wages, and management fees.

o The latter item of expense, the management fees, made

for reinvestigation, and (b) that petitioner grants such

up the bulk of the disallowance, the examiner alleging,

among others, that petitioner failed to withhold the

o

appropriate tax.
This is also the same basis for the imposition of the
deficiency

withholding

tax

assessment

on

Regulations) does not impose or prescribe EWT on

management fees paid to a nonresident.
On November 7, 2001, nearly eight (8) years later, HQPIs
external auditors received a letter from the CIR, dated October
27, 2001.
o

and

withdrawal

of

Assessment Notice No. 001543895668.

Petitioners Motion for Reconsideration and Supplemental Motion for
Reconsideration of said Decision filed on October 14, 2004 and
November 22, 2004, respectively, were denied for lack of merit.

Issue/s:

final decision denying its protest on the ground that the

right to collect the tax has prescribed.

YES
2) WON the period to collect the assessment has prescribed.
YES

period prescribed in then Section 229 of the National

Internal Revenue Code.
HQPI filed a Petition for Review before the Court of Tax Appeals, to
appeal the final decision of the CIR denying its protest against the
deficiency income and withholding tax assessments issued for
taxable year 1989.
CTA Original Division held that the subject assessment notice
sent by registered mail on January 8, 1993 to HQPI former place
of business was valid and binding since respondent only gave
formal notice of its change of address on February 18, 1993. Thus,
the assessment had become final and unappealable for failure
of respondent to file a protest within the 30day period provided
by law.

prescriptive period; and

(b) directed the cancellation

1) WON the CTA has jurisdiction to rule that the governments

allegedly filed beyond the 30day reglementary

The letter advised the HQPI that CIR had rendered a

protest against the disputed tax assessment was

However, the CTA held that:

o (a) the CIR failed to collect the assessed taxes within the

the

management fees. Revenue Regulations No. 685 (EWT

Held/Ratio: WHEREFORE, the petition is DENIED. The assailed

Decision of the Court of Tax Appeals (CTA) En Banc dated August 12,
2005 is AFFIRMED.
1) YES. The jurisdiction of the CTA is governed by Section 7 of
Republic Act No. 1125, as amended, and the term other
matters referred to by the CIR in its argument can be found in
number (1) of the aforementioned provision.2

2 Section 7. Jurisdiction.The Court of Tax Appeals shall exercise exclusive appellate

jurisdiction to review by appeal, as herein provided 1. Decisions of the Commissioner of Internal
Revenue in cases involving disputed assessments, refunds of internal revenue taxes, fees or other
charges, penalties imposed in relation thereto, or other matters arising under the National
Internal Revenue Code or other law as part of law administered by the Bureau of Internal

The appellate jurisdiction of the CTA is not limited to cases which

The mere filing of a protest letter which is not granted does

involve decisions of the CIR on matters relating to assessments

not operate to suspend the running of the period to collect

or refunds. The second part of the provision covers other cases

taxes.
In the case at bar, the records show that HQPI filed a request for

that arise out of the National Internal Revenue Code (NIRC) or

related laws administered by the Bureau of Internal Revenue

reinvestigation on December 3, 1993, however, there is no

(BIR).
The fact that an assessment has become final for failure of the

indication that the CIR acted upon respondents protest. The

taxpayer to file a protest within the time allowed only means that

to collect was never suspended.

request for reinvestigation was not granted. Thus, the period

the validity or correctness of the assessment may no longer be

o

questioned on appeal.
However, the validity of the assessment itself is a separate and
distinct issue from the issue of whether the right of the CIR to
collect the validly assessed tax has prescribed. This issue of
prescription, being a matter provided for by the NIRC, is well
within the jurisdiction of the CTA to decide.

2) YES. Two requisites must concur before the period to enforce

collection may be suspended: (a) that the taxpayer requests for
reinvestigation, and (b) that petitioner grants such request. In
this case, the request for reinvestigation was not granted.
o In order to suspend the running of the prescriptive periods for
assessment and collection, the request for reinvestigation
must be granted by the CIR.

LASCONA v. CIR (Austria)

[GR. No. 171251; March 5, 2012]
Last mo na[mang] decision after more than 180 days, so LAS[t] CO
NA[mang] chance to appeal within 30 days after receipt of your decision
on my protest
Recit-Ready:
Facts:On March 12, 1999, Petitioner Lascona Land Co. Inc.
(Lascona) received an Assessment Notice for a
deficiency income tax of P753,266.56 in 1993 to
Petitioner Lascona Land Co. Inc. (Lascona). The latter
filed a protest but was denied by the OIC Reg. Dir Odulio
on the ground that the case was not elevated to the
Court of Tax Appeals as mandated by the provisions

Revenue. (Emphasis supplied.)

of the last paragraph of Section 228 of the Tax Code.

By virtue thereof, the said assessment notice has

of such decision

become final, executory and demandable. On April

12, 1999, Lascona appeal to the CTA.

These options are mutually exclusive and resort to one

bars the application of the other.

Issue/s:
Whether the subject assessment has become final,

Therefore, Lascona, when it filed an appeal on April 12,

executory and demandable due to the failure of petitioner

1999 before the CTA, after its receipt of the Letter dated

to file an appeal before the CTA within thirty (30) days from

March 3, 1999 on March 12, 1999, the appeal was timely

the lapse of the One Hundred Eighty (180) day period

made as it was filed within 30 days after receipt of the

pursuant to Section 228 of the NIRC NO

Held: NO. Petitioner Lascona has the option to await the

final decisions and appeal such final decisions to
the CTA within 30 day after the receipt of a copy of

copy of the decision

Facts:

On March 27, 1998, the Commissioner of Internal Revenue (CIR)

issued Assessment Notice No. 000004793 4075 against Lascona

such decision, even after the expiration of the 180-

Land Co., Inc. (Lascona) informing the latter of its alleged

day period fixed by law for the COR to act on the

deficiency income tax for the year 1993 in the amount of

disputed assessment.

P753,266.56
Consequently, on April 20, 1998, Lascona filed a letter protest, but

In case of the inaction of the CIR on the protested

was denied in a letter dates March 3, 1999 by Norberto R. Odulio,

assessment, while we reiteratethe taxpayer has

Officer-in- Charge (OIC), Regional Director, Bureau of Internal

two options, either:

Revenue, Revenue Region No. 8, Makati City

o xxx We cannot give due course to your request to cancel or set

(1) file a petition for review with the CTA within 30 days
after the expiration of the 180-day period or
(2) await the final decision of the Commissioner on the

aside the assessment notice issued to your client for the reason

disputed assessment and appeal such final decision

as mandated by the provisions of the last paragraph of

to the CTA within 30 days after the receipt of a copy

Section 228 of the Tax Code. By virtue thereof, the said

that the case was not elevated to the Court of Tax Appeals

assessment notice has become final, executory and

protest within one hundred eighty (180) days

demandable.
On April 12, 1999, Lascona appealed the decision before the

from date of submission, by the taxpayer, of the

CTA
o Lascona alleged that the Regional Director erred in ruling that

taxpayer may appeal to the Court of Tax Appeals

the failure to appeal to the CTA within thirty (30) days from the

180-day period; otherwise, the assessment shall

required documents in support of his protest, the

within thirty (30) days from the lapse of the said

lapse of the 180-day period rendered the assessment final and

o

executory.
The CIR, however, maintained that Lascona's failure to timely

become final, executory and demandable.

the CTA denied the CIR's motion for reconsideration for lack of
merit.
o The CTA held that Revenue Regulations No. 12-99 must

file an appeal with the CTA after the lapse of the 180-day
reglementary period provided under Section 228 of the National
Internal Revenue Code (NIRC) resulted to the finality of the

assessment.
The CTA, in its Decision, nullified the subject assessment
o It held that in cases of inaction by the CIR on the protested

assessment becoming final, executory and demandable by

assessment, Section 228 of the NIRC provided two options for

and demandable should the taxpayer adversely affected by the

reason of the inaction by the Commissioner, while the

latter[Sec.228] referred to decisions becoming final, executory

the taxpayer: (1) appeal to the CTA within thirty (30) days from

decision fail to appeal before the CTA within the prescribed

the lapse of the one hundred eighty (180) day period, or (2) wait
until the Commissioner decides on his protest before he

conform to Section 228 of the NIRC

It pointed out that the former [RR 12-99] spoke of an

elevates the case.

CIR moved for reconsideration.
o It argued that in declaring the subject assessment as final,

period.
Finally, it emphasized that in cases of discrepancy, Section 228

of the NIRC must prevail over the revenue regulations.

CIR filed an appeal before the CA.
Court of Appeals granted the CIR's petition and further declared that

executory and demandable, it did so pursuant to Section 3

the subject Assessment Notice No. 000004793407 dated March 27,

(3.1.5) of Revenue Regulations No. 1299 dated September 6,

1998 as final, executory and demandable.

Petitioner Lascona, invoking Section 3, Rule 4 of the Revised Rules

1999:

If the Commissioner or his duly authorized

of the Court of Tax Appeals, maintains that in case of inaction by the

representative fails to act on the taxpayer's

CIR on the protested assessment, it has the option to either:

1) appeal to the CTA within 30 days from the lapse of the 180day period; or
2)await the final decision of the Commissioner on the disputed
assessment even beyond the 180-day periodin which case, the

180-day period fixed by law for the COR to act on the disputed
assessment.

taxpayer may appeal such final decision within 30 days from the

the inaction of the CIR, it did not intend to limit it to a single

receipt of the said decision.

Corollarily, petitioner posits that when the Commissioner failed to act

remedy of filing of an appeal after the lapse of the 180-day

prescribed period.
o Precisely, when a taxpayer protested an assessment, he

on its protest within the 180-day period, it had the option to await for

As in Section 228, when the law provided for the remedy to appeal

naturally expects the CIR to decide either positively or

the final decision of the Commissioner on the protest, which it did

Respondent, however, insists that in case of the inaction by the
Commissioner on the protested assessment within the 180day

negatively.
A taxpayer cannot be prejudiced if he chooses to wait

reglementary period, petitioner should have appealed the inaction to

for the final decision of the CIR on the protested

the CTA

assessment.
More so, because the law and jurisprudence have always

contemplated a scenario where the CIR will decide on the

Issue/s:
Whether the subject assessment has become final, executory and
demandable due to the failure of petitioner to file an appeal before

protested assessment.
It must be emphasized, however, that in case of the inaction of
the CIR on the protested assessment, while we reiteratethe

the CTA within thirty (30) days from the lapse of the One Hundred
Eighty (180)day period pursuant to Section 228 of the NIRC NO

taxpayer has two options, either:

(1) file a petition for review with the CTA within 30 days after

Held/Ratio: The petition is MERITORIOUS. Section 228 of the NIRC is

the expiration of the 180-day period or

(2) await the final decision of the Commissioner on the

instructional as to the remedies of a taxpayer in case of the inaction of

disputed assessment and appeal such final decision to the

the Commissioner on the protested assessment.

NO. Petitioner Lascona has the option to await the final decisions
and appeal such final decisions to the CTA within 30 day after the
receipt of a copy of such decision, even after the expiration of the

CTA within 30 days after the receipt of a copy of such

decision
these options are mutually exclusive and resort to one bars the
application of the other.

Accordingly, considering that Lascona opted to await the final

thereafter issued a warrant for distraint/levy, yielding the

decision of the Commissioner on the protested assessment, it then

same result. The Court of Appeals ruled that only

has the right to appeal such final decision to the Court by filing

decisions

a petition for review within thirty days after receipt of a copy of

reconsideration or reinvestigation may be appealed to

such decision or ruling, even after the expiration of the 180-day

the CTA. Since PJI did not file a request for

period fixed by law for the Commissioner of Internal made

reinvestigation or reconsideration within thirty (30)

Revenue to act on the disputed assessments.

Thus, Lascona, when it filed an appeal on April 12, 1999 before

days, the assessment notices became final and

the CTA, after its receipt of the Letter dated March 3, 1999 on

the CTA because the warrant of distraint or levy was

taxpayer against the assessments. Definitely, said word does

not signify the assessment itself.

for

Held: SC held that the CTA had jurisdiction over the case, as
the law gave the CTA the jurisdiction to determine if the
warrant of distraint/levy issued by the BIR is valid and to
rule if the Waiver of Statute of Limitations was validly
effected. Based on Section 7 of the Act Creating the

The limit (of CTA jurisdiction in decisions of the CIR on matters only

CTA, the appellate jurisdiction of the CTA is not

relating to assessments or refunds) does not exist Cady, Mean Girls

limited to cases which involve decisions of the CIR

on matters relating to assessments or refunds.

Recit-Ready:
Facts: PJI was assessed deficiency tax. In 1995. A
rendering PJI liable for tax deficiencies. In 1998, PJI was

request

Issue: WON CTA has jurisdiction YES

[GR 162582; Dec. 16, 2004]

reinvestigation took place which yielded the same result

of limitations.

PHILIPPINE JOURNALISTS v. CIR (Diploma)

denying

because it was based on an invalid waiver of the statutes

the word "decisions" in paragraph 1, Section 7 of Republic Act No.

of the Commissioner of Internal Revenue on the protest of the

BIR

illegally issued and that no assessment was issued

days after receipt of the copy of the decision

As early as the case of CIR v. Villa, it was already established that
1125, quoted above, has been interpreted to mean the decisions

the

unappealable. CIR argues that the case was brought to

March 12, 1999, the appeal was timely as it was filed within 30

of

Facts:

In April 1995, the Philippine Journalists, Inc. (PJI) filed its ITR for the

limitations which in turn make the FAN issued in

In 1995, a tax audit was conducted by the BIR, where it was found

December 1998 void.

formal requirement and not vital to the validity of the waiver.

It also contended that there is no need to furnish PJI a copy of the

waiver because in the first place, it was PJI, through its

executed a waiver of the statute of limitations, whereby PJI agreed

representative, who was making the waiver so it should know about

to waive the running of the prescriptive period of the governments

it

Further, there is no need to place a specific date as to how long the

Said right was set to expire on April 17, 1998 but due to

prescriptive period should be extended because PJI was waiving

the additional evidence that PJI sought to present, the

the prescriptive period and was not asking to extend it.

government needed more time.

CIR argued that the placing of the acceptance date is merely a

In the same month, the Comptroller of PJI (Lorenza Tolentino)

right to make an assessment.

In September 1997, PJI asked that it be allowed to present its

evidence to dispute the finding.

As such, there was no valid waiver of the statute of

year 1994.
that PJI was liable for a tax deficiency.

The Court of Appeals ruled that only decisions of the BIR denying a

A reinvestigation took place which yielded the same result rendering

request for reconsideration or reinvestigation may be appealed to

PJI liable for tax deficiencies.

the CTA.

In December 1998, a formal assessment notice (FAN) was sent via

Since PJI did not file a request for reinvestigation or

registered mail to PJI. Subsequently, a warrant for distraint/levy was

reconsideration within thirty (30) days, the assessment

issued against the assets of PJI.

notices became final and unappealable.

o
o

PJI filed a protest which eventually reached the Court of

CIR argues that the case was brought to the CTA

Tax Appeals. PJI averred that the waiver executed by

because the warrant of distraint or levy was illegally

Tolentino was incomplete;

issued and that no assessment was issued because it

that no acceptance date was indicated to show that the

was based on an invalid waiver of the statutes of

waiver was accepted by BIR;

limitations.

that no copy was furnished PJI; that the waiver was an

unlimited waiver because it did not indicate as to how
long the extension of the prescriptive period should last.

Issue: WON CTA has jurisdiction YES

Held/Ratio: WHEREFORE, premises considered, the instant petition

for review is GRANTED. The Decision of the Court of Appeals dated

This is not the first case where the CTA validly ruled on issues that

August 5, 2003 and its Resolution dated March 31, 2004 are

did not relate directly to a disputed assessment or a claim for refund.

o In Pantoja v. David, we upheld the jurisdiction of the CTA to act

REVERSED and SET ASIDE. The Decision of the Court of Tax

on a petition to invalidate and annul the distraint orders of the

Appeals in CTA Case No. 6108 dated May 14, 2002, declaring Warrant

Commissioner of Internal Revenue.

In Commissioner of Internal Revenue v. Court of Appeals, the

of Distraint and/or Levy No. 33-06-046 null and void, is REINSTATED.

Section 7 of the RA 1125 [An Act Creating the CTA] provides:

o SEC. 7. Jurisdiction. The Court of Tax Appeals shall

decision of the CTA declaring several waivers executed by the

taxpayer as null and void, thus invalidating the assessments
issued by the BIR, was upheld by this Court.

exercise exclusive appellate jurisdiction to review by

appeal: Decisions of the Commissioner of Internal
Revenue in cases involving disputed assessments,
refunds of internal revenue taxes, fees or other charges,
penalties imposed in relation thereto, or other matters
arising under the National Internal Revenue Code or
other laws or part of law administered by the Bureau

of Internal Revenue.
Thus, the appellate jurisdiction of the CTA is not limited to
cases which involve decisions of the CIR on matters relating to

PHILIPPINE BRITISH ASSURANCE COMPANY INC. v. REPUBLIC

OF THE PHILIPPINES (Ong)
[GR. No. 185588; February 2, 2010]
It is the CA which has appellate jurisdiction over an action to collect on
a bond used to secure the payment of taxes as is not a tax collection
case but rather, a simple case for enforcement of a contractual liability.
Recit-Ready:

assessments or refunds.
The second part of the provision covers other cases that arise out of

Facts: Philippine British Assurance Company is an insurance

the NIRC or related laws administered by the Bureau of Internal

of the BOC. These bonds secure the release of imported

Revenue.
The law gave the CTA the jurisdiction to determine if the

goods in order that the goods may be released without

warrant of distraint/levy issued by the BIR is valid and to rule if

these bonds, petitioner and its clients jointly and

the Waiver of Statute of Limitations was validly effected.

severally bind themselves to pay the BOC the face value

company that issues customs bonds to its clients in favor

prior payment of the customs duties and taxes. Under

of the bonds in the event that they expire without either

the imported goods being re-exported or the proper

and not a tax collection case. It also did not follow the

duties and taxes being paid. The BOC filed a complaint

proper prosecution of a tax collection case. The instant

against petitioner for collection of money with damages

case is not a tax collection case, hence, the CA has

before the RTC for outstanding unliquidated customs

jurisdiction over the case.

bonds with the BOC. The RTC ruled in its favor.

Petitioner appealed to the CA which dismissed the case
for lack of jurisdiction. According to the CA, it should

Facts:

Philippine British Assurance Company Inc. is an insurance company

existing under and by virtue of the laws of the Philippines.

Petitioner issues customs bonds to its clients in favor of the BOC.

have been filed with the CTA since it is a tax collection

case.

These bonds secure the release of imported goods in order that the
goods may be released from the BOC without prior payment of the

Issue/s:

customs duties and taxes.

o Under these bonds, petitioner and its clients jointly and

WON the CTA has jurisdiction over the case.

severally bind themselves to pay the BOC the face value

Held:No. An action to collect on a bond used to secure the

of the bonds, in the event that the bonds expire without

payment of taxes is not a tax collection case but

either the imported goods being re-exported or the

rather, a simple case for enforcement of a contractual

liability.

complaint against petitioner for collection of money with damages

The original complaint filed with the RTC was in the nature

before the RTC for outstanding unliquidated customs bonds with the

of a collection case, purportedly to collect on the

obligation of petitioner by virtue of the bonds executed by
it in favor of respondent, essentially a contractual
obligation.

proper duties and taxes being paid.

On Dec. 9, 2003, the Republic, represented by the BOC, filed a

BOC.
The RTC ruled in favor of the BOC. MR was denied.
Petitioner appealed to the CA.
o The CA dismissed the case for lack of jurisdiction. It
ruled that the instant case is a tax collection case and

The BOC did not consider the case as one for tax
collection. It instituted a complaint for collection of money

Petitioner:

should be filed with the CTA.

In as much as Respondents right was initially based on

collection case. It also did not follow the proper prosecution of a

its right to collect duties and taxes, the same was

converted to a right arising out of a contract, the bond
being a contract between Respondent and Petitioner.

tax collection case.

Certainly, the administrative agencies tasked with the prosecution
of cases within their specific area of concern should know the
nature of the action to be filed and the proper procedure by which

Issue/s:

they can collect on liabilities to it. Here, the BOCs actions reveal

WON the CTA has jurisdiction over the case.

NO

its position that indeed the case was not a tax collection case but
an action for the enforcement of a contractual obligation. Hence,
appellate jurisdiction over the petition properly lies with the CA

Held/Ratio: An action to collect a bond used to secure the

and not the Court of Tax Appeals.

payment of taxes is not a tax collection case but rather, a simple

case for enforcement of a contractual liability.

FISHWEALTH CANNING CORP. v. CIR (Cualoping)

[GR. No. 179343; January 21, 2010]

NO.
o The original complaint filed with the RTC was in the nature of a
collection case, purportedly to collect on the obligation of
petitioner by virtue of the bonds executed by it in favor of
o

respondent, essentially a contractual obligation.

In the Mambulao Lumber Company case, the court ruled that the
NIRCs provisions on prescription are inapplicable to the case
since the action is based upon a surety bond and it cannot be
considered a tax collection case, rather, it is an action based on a

contract.
The instant case is not a tax collection case, hence, the CA has

jurisdiction over the case.

The BOC did not consider the case as one for tax collection. It
instituted a complaint for collection of money and not a tax

MR does not toll the 30 day period to appeal denial of protest of FAN
Recit-Ready:
Facts:
CIR examined the books of FCC and found them to have tax
deficiencies, and these were eventually settled. Later the CIR
conducted a reinvestigation over the same period and
demanded payment for more deficiencies. CIR issued a Final
Assessment Notice and also denied FCCs letter of protest on
August 4, 2000. Instead of appealing to the CTA, FCC filed a
letter of reconsideration. The CIR eventually sent a collection
letter to demand payment, and on October 20, 2005 FCC filed
a petition in the CTA as a response.

CIR thereafter issued a Final Decision on Disputed Assessment

Issue/s:

dated August 2, 2005, which FCC received on August 4, 2005,

WON the petition before the court of tax appeals was filed out of

denying its letter of protest, apprising it of its income tax and VAT

time?

liabilities in the amounts of "P15,396,905.24 and P63,688,434.40

[sic], respectively, for the taxable year 1999," and requesting the

Held: YES

immediate payment thereof, "inclusive of penalties incident to

Section 228 of the tax code explicitly states that that if a protest

delinquency."
o CIR added that if FCC disagreed, it may appeal to the

is denied, there is a 30 day period to appeal it with the CTA. A

Court of Tax Appeals (CTA) "within thirty (30) days from

motion for reconsideration of the denial of the administrative

date of receipt hereof, otherwise our said deficiency

protest does not toll the 30-day period to appeal to the CTA. In

income and value-added taxes assessments shall

this case, FCC should have filed their petition in the CTA before
September 3, 2005 (30 days after denial of their letter of
protest).

investigation disclosed that FCC was liable in the amount

of P2,395,826.88, and these were eventually settled on August 30,

Review before the CTA.

CIR ordered the examination of the internal revenue taxes for the
taxable year 1999 of Fishwealth Canning Corp. (FCC). The

2005, a Letter of Reconsideration dated August 31, 2005.

CIR eventually sent a collection letter to demand payment, and
FCC responded by filing on October 20, 2005 a Petition for

Facts:

become final, executory, and demandable."

Instead of appealing to the CTA, FCC filed, on September 1,

Issue/s:
WON the petition before the court of tax appeals was filed out of time?

2000.
On August 25, 2000, CIR reinvestigated FCCs books of accounts

Held/Ratio: YES.

covering the same period for the purpose of which it issued a

subpoena duces tecum.

CIR sent, on August 6, 2003, a Final Assessment Notice of income
tax and VAT deficiencies totaling P67,597,336.75 for the taxable
year 1999, which was contested by FCC.

Section 228 of the 1997 Tax Code provides that an assessment:

x x x may be protested administratively by filing a request for
reconsideration or reinvestigation within thirty (30) days from
receipt of the assessment in such form and manner as may

be prescribed by implementing rules and regulations. Within

CITY OF MANILA V. COCA-COLA BOTTLERS PHILIPPINES, INC.

sixty (60) days from filing of the protest, all relevant

(Pascual)

supporting documents shall have been submitted; otherwise,

[GR. No. 181845; August 4, 2009]

the assessment shall become final.

To appeal an adverse decision or ruling of the RTC to the CTA, the

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
decision or inaction may appeal to the Court of Tax Appeals
within thirty (30) days from receipt of the said decision, or
from the lapse of the one hundred eighty (180)-day period;
otherwise, the decision shall become final, executory and
demandable. (underscoring supplied)1avvphi1
o

FCCs administrative protest was denied by Final Decision on

Disputed Assessment dated August 2, 2005 issued by respondent
and which petitioner received on August 4, 2005. Under the abovequoted Section 228 of the 1997 Tax Code, petitioner had 30 days to

appeal respondents denial of its protest to the CTA.

Since FCC received the denial of its administrative protest on
August 4, 2005, it had until September 3, 2005 to file a petition for
review before the CTA Division. It filed one, however, on October

20, 2005, hence, it was filed out of time.

A motion for reconsideration of the denial of the administrative
protest does not toll the 30-day period to appeal to the CTA.

taxpayer must file a Petition for Review with the CTA within 30 days of
said adverse decision, extendable by another 15 days as suppletorily
provided by the Rules of Court
Recit-Ready:
Facts: The City of Manila assessed Coca-Cola deficiency taxes
on the basis of local tax ordinances. However, in a
separate case, these ordinances were declared null and
void by the Supreme Court. Coca-Cola filed an action
with the RTC of Manila, seeking the cancellation of the
assessment and an adverse decision was rendered
against the City of Manila. The City of Manila attempted
to file a Pettion for Review with the CTA, but the same
was dismissed for allegedly being filed beyond the
reglementary period.
Issue/s:
1. WON petitioners substantially complied with the
reglementary period to timely appeal the case for
review before the CTA? (Main Issue)YES for the period
but they still messed up procedurally by not submitting all
the required attachments.

2. WON the ruling of the SC in the earlier Coca-Cola Case

On 25 February 2000, however, the City of Manila approved Tax

is doctrinal and controlling in the instant case?--YES

3. WON petitioner can still assess taxes under the tax

Ordinance 7988later amended by Tax Ordinance 8011which

ordinances?--NO
4. WON the enforcement of the tax ordinance amounted

deleting the proviso found therein, which stated that all registred

amended certain sections of Tax Ordinance 7794, particularly by

businesses in the City of Manila that are already paying the

to double taxation?--YES

aforementioned (business) tax shall be exempted from payment

thereof.
o

Held:

The ordinances, however, were later declated null and

1. YES. When the petitioners filed their Petition for

void by the Supreme Court in another case. (Coca-cola

Review on 30 May 2007, it was still within the

v. City of Manila)
There, it was found that Tax Ordinance 7988 was

reglementary period as it was within the 15-days

extendable period from the original 30-day period

enacted in contravention of the provisions of the Local

within which such a Petition could be filed.

2. YES. The Coca-Cola case is applicable to the instant

Government Code and [2] Tax Ordinance 8011 could not

case.
3. NO. The tax ordinances were declared null and void

cure the defects of 7988, which was null and void.

Before the Court rendered the abovementioned decision, though,
petitioner assessed respondent on the basis of the ordinances for

and cannot have any legal effect. The amendments to

deficiency local business taxes, penalties, and interest, in the total

the tax ordinances, likewise, could not be said to have

amount of P18, 583, 932.04.

o Respondent filed a protest on the ground that the

cured the defects as there was legally nothing to cure.

4. YES. The enforcement would have amounted to double
taxation.

assessment amounted to double taxation.

When petitioner did not respond to the protest, they filed an action
with the RTC of Manila an action for the cancellation of the

Facts:

Prior to 25 February 2000, Coca-cole had been paying the City of

assessment.
o Initially, the RTC dismissed the case, finding that there

Manila local business taxes only under Sec 14 of Tax Ordinance

was no double taxation, but later granted the motion for

7794 as it was expressly exempted from the business tax.

reconsideration.

The latter ruling of the RTC was in conformity with the

1. YES. When the petitioners filed their Petition for Review on 30

ruling of the SC in the other Coca-Cola case.

Take Note of these dates:
o 20 April 2007petitioners received a copy of the

May 2007, it was still within the reglementary period as it was

adverse order of the RTC

4 May 2007petitioners filed a Motion for Extension,

within the 15-days extendable period from the original 30-day

period within which such a Petition could be filed.
Under RA 9282, to appeal an adverse decision or ruling of the
RTC to the CTA, the taxpayer must file a Petition for Review

grounded on the belief that the reglementary period for

o

with the CTA within 30 days of said adverse decision or ruling.

o Though the same provision is silent as to whether such

filing their Petition was to expire on 5 May 2007

18 May 2007petitioners filed a Motion for Extention of

30-day period can be extended or not, the law does

time, prior to the lapse of the 30-day period

The CTA, dismissed the Petition for Review on procedural grounds,

provide that the Petition for Review shall be filed with the
CTA following the procedure analogous to Rule 42 of the

deciding that the same was filed beyond the reglementary period.

Revised Rules of Civil Procedure.

This rule provides that the Petition for Review

Issue/s:
1. WON petitioners substantially complied with the reglementary

must be filed with the Court of Appeals within:

The original 15-dau period from receipt of

period to timely appeal the case for review before the CTA?
(Main Issue)YES for the period but they still messed up

the

procedurally by not submitting all the required attachments.

2. WON the ruling of the SC in the earlier Coca-Cola Case is
doctrinal and controlling in the instant case?
3. WON petitioner can still assess taxes under the tax
ordinances?
4. WON the enforcement of the tax ordinance amounted to

or

final

order

to

be

appealed;
An extended period of 15 days from the

lapse of the original period; and

Only for the most compelling reasons,
another extended period not to exceed 15
days from the lapse of the first extended

double taxation?
Held/Ratio: Petition for Review is hereby DENIED.

judgment

period.
Following the abovementioned rules, the 30-day original period
for filing a petition for review with the CTA may be extended for a
period of 15 days and no further extension shall be allowed

thereafter, except only for the most compelling reasons, in which

case the extended period shall not exceed 15 days.

In this case, then, the CTA did err in finding that petitioners
failed

to

file

their

Petition

for

Review

within

adverse order of the RTC; thus petitioners had 30

days (until 20 May 2007) within which to file

18, 2007. (Still within the 30-day period and

the

reglementary period.
o Quick Recap of the Timeline of Events:
20 April 2007petitioners received a copy of the

their Petition for Review.

4 May 2007petitioners filed a Motion for

Pasok sa reglementary period yay)

However, there were other procedural reasons for which the
CTA dismissed the Petition for Review.
o The Revised Rules of the CTA requires that:
The parties shall file 11 signed copies of every
paper for cases before the Court en banc and 6

Extension, grounded on the belief that the

signed copies for cases before a Division of the

reglementary period for filing their Petition was to

Court in addition to the signed original copy;

A clearly legible duplicate original or certified true

was

copy of the decision appealed from shall be

superfluous and unnecessary as it was still

attached to the petition.

The Revised Rules of the CTA do not provide for the

the

adverse

decision)This

motion

within the original 30 day period.

18 May 2007petitioners filed a Motion for

consequences of non-compliance but the Rules of

Court, again, apply suppletorily.
Effect of Failure to comply with requirements

Extention of time, prior to the lapse of the 30-day

periodShould have been granted by the CTA

the failure of the petitioner to comply with any of

as, in reality, this was only their first Motion

o

SHOULD have been granted by the CTA)

Date when Petition for Review was filed: 30 May
2007. (30-Day Period + 10-Day Extension =

expire on 5 May 2007 (15 days after receipt of

Motion for Extension of Time was filed on May

the foregoing requirementsshall be sufficient

for Extension of Time.

Thus, when the petitioners filed their Petition for
Review with the CTA on 30 May 2007, they were able
to comply with the reglementary period for filing
such a petition.
Original 30-day period: Ends on May 20, 2007.

ground for the dismissal thereof.

In this case, the Petition for Review consisted only of 1
copy and all the attachments thereto were merely
machine copies.

Thus the SC sustained the CTAs dismissal in this

Furthermore, if they were to be taxed under the original tax

regard.
2. YES. The Coca-Cola case is applicable to the instant case.

ordinance, as it was worded before all the amendments, such

(Putting the discussions for 2-4 under here because the SC

would indeed amount to double taxation.

o Recall: For double taxation to be present, the two taxes

only discussed these issues briefly after getting through the

must be imposed on the same subject matter,f or the

procedural matters.)
Petitioners argument that the other Coca-Cola case cannot

same purpose, by the same taxing authority, within the

apply to the instant case simply cannot stand as the pivotal

taxes must be of the same kind or character.

In this case and under the abovementioned test, the

same jurisdiction, during the same taxing period, and the

issue in that case was whether the Tax Ordinances were null

and void, which the Court resolved that they were.

o Thus, said Tax Ordinances could not have any legal
o

constituted double taxation.

effect.
The City of Manila never appealed from that decision

PHILIPPINE

and so the same attained finality after the lapse of the

COMPANY v SECRETARY OF FINANCE (Guzman)

period for appeal of the same.

Tax Ordinance 8011, which amended Tax Ordinance

[GR. No. 210987; November 24, 2014]

7988, did not cure the effects of the latter as, since it
was null and void, there was legally nothing to cureit
o

taxes that were sought to be imposed would have

did not exist.

As such, respondent cannot be taxed under any of these

ordinances.
Petitioners tried to make an argument that they could still tax the
respondents under the original tax ordinance but under the
original ordinance, the respondents were expressly exempted
from the payment of the local business taxes imposed by the
ordinance.

AMERICAN

LIFE

AND

GENERAL

INSURANCE

Decisions of the Secretary of Finance are appealable to the CTA

Recit-Ready:
Facts:

Philamlife owned 498,590 Class A shares in

PhilamCare, representing 49.89% of the latter's outstanding

capital stock.

In 2009,

Philamlife, offered to sell its

shareholdings in PhilamCare through competitive bidding. On

September 24, 2009, Philamlife's shares were sold for PhP
104,259,330 based on the prevailing exchange rate at the time
of the sale, to STI Investments, Inc., who emerged as the
highest bidder. Thereafter, petitioner was informed that it

needed to secure a BIR ruling in connection with its application

representing 49.89% of the latter's outstanding capital stock. In

due to potential donors tax liability. In compliance, petitioner,

2009, Philamlife, offered to sell its shareholdings in PhilamCare

on January 4, 2012, requested a ruling to confirm that the sale

was not subject to donors tax. CIR denied Philamlifes
request. It determined that the selling price of the shares was

through competitive bidding.

National Internal Revenue Code (NIRC). Petitioner requested

of the sale, to STI Investments, Inc.

application for a certificate authorizing registration/tax clearance

Thereafter, Petitioner elevated the case via Petition for Review

with the BIR Large Taxpayers Service Division to facilitate the

under Rule 43. with the Court or Appeals. The CA denied the

transfer of the shares. Months later, petitioner was informed that

case for lack of jurisdiction.

WON the CA has jurisdiction over the case NO

Held:
No. Reviews by the Secretary of Finance pursuant its powers to
interpret laws and decide tax cases are appealable to the CTA.
The CTA is the proper forum with which to institute the appeal.
As the specialized quasi-judicial agency mandated to adjudicate
tax, customs, and assessment cases, there can be no other
court of appellate jurisdiction that can decide the issues raised,
which involves the tax treatment of the shares of stocks sold.
Facts:

After the sale was completed and the necessary documentary

stamp and capital gains taxes were paid, Philamlife filed an

Secretary of Finance to review BIR Ruling but to no avail.

Issue/s:

On September 24, 2009, Philamlife's shares were sold for PhP

104,259,330 based on the prevailing exchange rate at the time

lower than their book value. As such, donors tax became

imposable on the price difference pursuant to Sec. 100 of the

Philamlife owned 498,590 Class A shares in PhilamCare,

it needed to secure a BIR ruling in connection with its

application due to potential donors tax liability

In compliance, petitioner, on January 4, 2012, requested a ruling

to confirm that the sale was not subject to donors tax. CIR
denied Philamlifes request. It determined that the selling price
of the shares was lower than their book value. As such, donors
tax became imposable on the price difference pursuant to Sec.
100 of the National Internal Revenue Code (NIRC).

Petitioner requested Secretary of Finance to review BIR Ruling

but to no avail. Thereafter, Petitioner elevated the case via
Petition for Review under Rule 43. with the Court or Appeals.
The CA denied the case for lack of jurisdiction.

Petitioner postulates that there is a need to differentiate the

WON the CA has jurisdiction over the case NO

rulings promulgated by the respondent Commissioner relating to

those rendered under the first paragraph of Sec. 4 of the NIRC,

Held/Ratio:

which are appealable to the Secretary of Finance, from those

Admittedly, there is no provision in law that expressly provides where

rendered under the second paragraph of Sec. 4 of the NIRC,

exactly the ruling of the Secretary of Finance under the adverted NIRC

which are subject to review on appeal with the CTA to wit:

provision is appealable to. However, We find that Sec. 7(a)(1) of RA

1125, as amended, addresses the seeming gap in the law as it vests

SECTION 4. Power of the Commissioner to Interpret

Tax Laws and to Decide Tax Cases. The power to
interpret the

provisions of this Code and other tax laws

shall

be under the exclusive and original jurisdiction of the

Commissioner, subject to review by the Secretary of Finance.
The power to decide disputed assessments, refunds of internal
revenue taxes, fees or other charges, penalties imposed in

the CTA, albeit impliedly, with jurisdiction over the CA petition as "other
matters" arising under the NIRC or other laws administered by the BIR.
As stated:
Sec. 7. Jurisdiction.- The CTA shall exercise:
a. Exclusive appellate jurisdiction to review by appeal, as herein
provided:

relation thereto, or other matters arising under this Code or other

1. Decisions of the Commissioner of Internal Revenue in cases

laws or portions thereof administered by the Bureau of Internal

involving disputed assessments, refunds of internal revenue taxes, fees

Revenue is vested in the Commissioner, subject to the exclusive

or other charges, penalties in relation thereto, or other matters arising

appellate jurisdiction of the Court of Tax Appeals.

under the National Internal Revenue or other laws administered by the

Petitioner asserts that appeals questioning the decisions of the

Bureau of Internal Revenue. (emphasis supplied)

Secretary of Finance in the exercise of its power of review under

Even though the provision suggests that it only covers rulings of the

Sec. 4 of the NIRC are not within the CTAs limited special

Commissioner, We hold that it is, nonetheless, sufficient enough to

jurisdiction and, according to petitioner, are appealable to the CA via

include appeals from the Secretarys review under Sec. 4 of the NIRC.

a Rule 43 petition for review.

As the specialized quasi-judicial agency mandated to adjudicate tax,

Issue/s:

customs, and assessment cases, there can be no other court of

appellate jurisdiction that can decide the issues raised, which involves

consideration shall be deemed a gift. Thus, even if there is no actual

the tax treatment of the shares of stocks sold.

donation, the difference in price is considered a donation by fiction of

NOTE (in case sir asks): The Court also ruled that the CTA may issue

law. Philamlife is liable for donors tax.

writs of certiorari notwithstanding the fact that there is no express grant

of such power, Section 1, Article VIII of the 1987 Constitution provides,
nonetheless, that judicial power shall be vested in one Supreme Court
and in such lower courts as may be established by law and that judicial
power includes the duty of the courts of justice to settle actual

CLARK

INVESTORS

AND

LOCATORS

ASSOCIATION

SECRETARY OF FINANCE (Lim, J.)

[G.R. No. 200670; July 6, 2006]
Magreklamo ka sa taong may paki.

controversies involving rights which are legally demandable and

Recit-Ready:
enforceable, and to determine whether or not there has been a grave
abuse of discretion amounting to lack or excess of jurisdiction on theFacts: Congress enacted RA No. 7227 which provides for the creation
part of any branch or instrumentality of the Government. On the
strength of the above constitutional provisions, it can be fairly
interpreted that the power of the CTA includes that of determining
whether or not there has been grave abuse of discretion amounting to
lack or excess of jurisdiction on the part of the RTC in issuing an
interlocutory order in cases falling within the exclusive appellate
jurisdiction of the tax court. It, thus, follows that the CTA, by
constitutional mandate, is vested with jurisdiction to issue writs of
certiorari in these cases. Indeed, in order for any appellate court to
effectively exercise its appellate jurisdiction, it must have the authority to

of the Subic Special Economic Zone and was given an in-lieu of

all taxes provision. Congress also enacted RA No. 9400 which
extended the benefits under RA No. 7227 to the Clark Freeport
Zone. On February 17, 2012, the DOFissued RR 2-2012 which
imposed VAT and excise tax on the importation of petroleum
and petroleum products from abroad and into the Freeport or
Economic Zones. Petitioner, which represents the businesses
and enterprises within the Clark Freeport Zone, filed a petition
for certiorari alleging that respondents acted with grave abuse of
discretion in issuing RR 2-2012. It argues that by imposing the

issue, among others, a writ of certiorari

VAT and excise tax on the importation of petroleum and

On the issue of donors tax liability: The absence of donative intent

Economic Zones, RR 2-2012 unilaterally revoked the tax

does not exempt the sales of stock transaction from donor's tax since

exemption granted by RA No. 7227 and RA No. 9400 to the

Sec. 100 of the NIRC categorically states that the amount by which the

businesses and enterprises operating within the Subic Special

fair market value of the property exceeded the value of the

petroleum products from abroad and into the Freeport or

vs

Economic Zone and Clark Freeport Zone.

On March 1992, Congress enacted RA No. 7227 which mandated

the accelerated conversion of the Clark and Subic military

WON SC has jurisdiction over the petition filed? NO.

reservations into special economic zones.

Section 12 thereof provides for the creation of the Subic Special

Held: In ruling for respondents, the court held it was an

Economic Zone (SSEZ).

Based on Section 12 (c), in lieu of national and local taxes, all

Issue/s:

businesses and enterprises operating within the SSEZ shall pay a

improper remedy. First, the BIR did not act in any judicial
or quasi-judicial capacity. RR2-2012 was issued based
on its rule-making powers. Second, though it was a

aforementioned tax and fiscal incentives under RA No. 7227 to the

petition for certiorari, it was actually a petition for

declaratory relief which is the exclusive jurisdiction of
RTC. Lastly, though the SC, CA and RTC has concurrent

quo

warranto,

habeas

corpus

and

injunction, such concurrence does not give the petitioner

unrestricted freedom of choice of court forum.

importation of petroleum and petroleum products from abroad and

Court shall not entertain a direct resort to this Court

courts, and exceptional and compelling circumstances
justify the availment of the extraordinary remedy of writ
of certiorari.

Facts:

of raw materials, capital and equipment.

On February 2012, the DOF, upon recommendation of the BIR,
issued RR 2-2012 which imposed VAT and excise tax on the

The

unless the remedy cannot be obtained in the appropriate

Clark Freeport Zone (CFZ).

Thus, the businesses and enterprises within the CFZ are similarly
exempt from the payment of all taxes and duties on the importation

jurisdiction to issue writs of certiorari, prohibition,

mandamus,

preferential gross income tax rate of five percent (5%).

Meanwhile, Congress enacted RA No. 9400 which extended the

into the Freeport or Economic Zones.On March 2012, petitioner, which represents the businesses and
enterprises within the CFZ, filed the instant petition alleging that
respondents acted with grave abuse of discretion in issuing RR 22012.
o It argues that by imposing the VAT and excise tax on the
importation of petroleum and petroleum products from abroad
and into the Freeport or Economic Zones, RR 2-2012
unilaterally revoked the tax exemption granted by RA No. 7227

and RA No. 9400 to the businesses and enterprises operating

(3) there is no appeal or any plain, speedy, and adequate

within the SSEZ and CFZ.

Respondents, through the OSG, contend that the petition must be
denied outright because the petition for certiorari cannot be used to
assail RR 2-2012 which was issued by the respondents in the

remedy in the ordinary course of law.

o

exercise of their quasi-legislative or rule-making powers.

o The OSG invokes the doctrine of hierarchy of courts.
o Finally, the OSG points out that RR2-2012 allows the

Firstly, BIR did not act in any judicial or quasi-judicial capacity.

BIR issued RR 2-2012 in the exercise of their quasilegislative or rule-making powers, and not judicial or quasi

judicial functions.
Respondents did not adjudicate or determine the rights of the

parties.
To determine whether a Revenue Regulation is quasi-

businesses and enterprises operating within the SSEZ and CFZ

to claim for a tax refund upon submission of competent proof

that they used the imported fuel exclusively within the SSEZ and

legislative in nature, we must examine the legal basis of the

CFZ.
Thus, the OSG claimed that RR 2-2012 is consistent with RA

Secretary of Finance in the issuance thereof.

In BPI Leasing Corporation v. CA, the Court ruled that RR 19-

No. 7227 and RA No. 9400.

86 was quasi-legislative in nature because it was issued by

Issue/s:

the Secretary of Finance in the exercise of his rule-making

WON the SC has jurisdiction over the petition filed? -- NO.

powers under Section 244 of the NIRC

In the same way, RR 2-2012 is based on Section 244, and is

Held/Ratio:

therefore quasi-legislative in nature which is outside the

NO. The Court denies the petition for being an improper remedy.
o For a special civil action for certiorari to prosper, the following

scope of a petition for certiorari.

requisites must concur:

Secondly, though it is a petition for certiorari, it actually seeks

(1) it must be directed against a tribunal, board, or officer

the declaration of the unconstitutionality and illegality of the

exercising judicial or quasi-judicial functions;

questioned rule.
In reality, it is of one for declaratory relief over which this

(2) the tribunal, board, or officer must have acted without or

in excess of jurisdiction or with grave abuse of discretion
amounting to lack or excess of jurisdiction; and

Court has only appellate, not original, jurisdiction.

This Court does not have original jurisdiction over a petition

In Chamber of Real Estate and Builders Association, Inc.

for declaratory relief even if only questions of law are

(CREBA) v. Secretary of Agrarian Reform, the Court provided

examples of such exceptional and compelling circumstances:

involved.
The special civil action of declaratory relief falls under the

(b) Government of [the] United States of America v. Hon.

exclusive jurisdiction of the RTC.

The Rules of Court is explicit that such action shall be
brought before the appropriate Regional Trial Court.

(c) Commission on Elections v. Judge Quijano-Padilla, on

(a) Chavez v. Romulo, on citizens' right to bear anus;

Purganan, on bail in extradition proceedings;
government

Lastly, although this Court, the CA and the RTC have concurrent

modernization

and

(d) Buklod ng Kawaning EIIB v. Hon. Sec. Zamora, on

quo warranto, habeas corpus and injunction, such concurrence

status and existence of a public office; and

does not give the petitioner unrestricted freedom of choice of

(e) Hon. Fortich v. Hon. Corona, on the so-called "Win-Win

court forum.
The rationale for this rule is two-fold:

Resolution" of the Office of the President which modified

the approval of the conversion to agro-industrial area.

(1) it would be an imposition upon the precious time of this

Court; and

In the case at bar, petitioner failed to allege such exceptional

and compelling circumstances which justify a direct resort to

(2) it would cause an inevitable and resultant delay,

intended or otherwise, in the adjudication of cases, which in

some instances had to be remanded or referred to the

this Court.
In view of the serious procedural and technical defects of the
petition, there is no need for this Court to resolve the other

lower court as the proper forum under the rules of

issues raised by the petitioner.

procedure, or as better equipped to resolve the issues

involving

computerization of voters' registration list;

jurisdiction to issue writs of certiorari, prohibition, mandamus,

because this Court is not a trier of facts.

contract

SMART COMMUNICATIONS, INC. VS. MUNICIPALITY OF MALVAR

The Court shall not entertain a direct resort to this Court

(LUNA)

unless the remedy cannot be obtained in the appropriate

[GR. No. 204429; February 18, 2014]

courts, and exceptional and compelling circumstances

CTA has no jurisdiction over a decision of the RTC involving regulatory

justify the availment of the extraordinary remedy of writ

fees.

of certiorari.

Recit-Ready:

Smart constructed a telecommunications tower within the territorial

Facts: Petitioner received a closure order from the Respondent

jurisdiction of the Municipality. The construction of the tower was for

for the non-payment of dues arising out of an ordinance

the purpose of receiving and transmitting cellular communications

regulating the establishment of special projects, which

within the covered area.

On 30 July 2003, the Municipality passed Ordinance No. 18, series

included

Petitioners

telecommunications

tower.

of 2003, entitled "An Ordinance Regulating the Establishment of

Petitioner protested and upon denial of the protest

appealed the same to the Regional Trial Court of
Tanauan questioning as well the validity of the

Division of the Office of the Mayor of the Municipality an assessment

ordinance. Thereafter, Petitioner appealed the RTCs

letter with a schedule of payment for the total amount of

decision to the CTA which dismissed the same for lack of

P389,950.00 for Smarts telecommunications tower. Due to the

jurisdiction claiming that it cannot resolve cases where

alleged arrears in the payment of the assessment, the Municipality

the constitutionality of a law or rule is challenged.

Issue/s:
Does the CTA have jurisdiction over a decision of the RTC on a

also

NO. The primary reason for the CTAs lack of jurisdiction is that
what was imposed under the questioned ordinance are not
taxes but are instead regulatory fees, specifically to address the

the

posting

of

closure

notice

on

the

telecommunications tower.
On 9 September 2004, Smart filed a protest, claiming lack of due
same protest, Smart challenged the validity of Ordinance No. 18 on

which the assessment was based.

In a letter dated 28 September 2004, the Municipality denied Smarts

protest.
RTC partially granted Smarts petition, but did not rule on the legality
of Ordinance No. 18. It declared that Smart is only liable for fees

environmental depredation of the said special projects. As such,

starting October 1, 2003, and null and void insofar as the

the case that originated from the RTC is not considered a local

assessment made from 2001 to 2003. MR denied. CTA denied. CTA

tax case over which the CTA has jurisdiction.

Facts:

caused

process in the issuance of the assessment and closure notice. In the

purported tax case?

Held:

Special Projects."
On 24 August 2004, Smart received from the Permit and Licensing

MR also denied. CTA en banc denied. CTA en banc likewise denied.

SMARTs arguments:

CTA erred in refusing to take cognizance of the case and for

imposed

dismissing the case for lack of jurisdiction considering the

fees

on

various

structures,

which

included

telecommunications towers.
The fees are not imposed to regulate the administrative,

unique factual circumstances involved.

The fees imposed in Ordinance No. 18 are actually taxes since

telecommunications entities, such as Smarts; rather, to regulate

they are not regulatory but rather, revenue-raising.

Municipality is encroaching on the regulatory powers of the
National Telecommunications Commission (NTC). Smart cites

cell sites or telecommunications tower.

technical,

financial,

or

marketing

operations

of

the installation and maintenance of physical structures Smarts

Section 5(g) of Republic Act No. 7925 which provides that the
NTC, in the exercise of its regulatory powers, shall impose such
fees and charges as may be necessary to cover reasonable
costs and expenses for the regulation and supervision of the
operations of telecommunications entities. Thus, Smart alleges
that the regulation of telecommunications entities and all
aspects of its operations is specifically lodged by law on the

NTC.
Malvars arguments:
o Said Ordinance is not a tax ordinance but a regulatory fee
imposed to regulate the placing, stringing, attaching, installing,
repair and construction of all gas mains, electric, telegraph and
telephone wires, conduits, meters and other apparatus, and
provide for the correction, condemnation or removal of the same
when found to be dangerous, defective or otherwise hazardous
o

to the welfare of the inhabitant.

It was also envisioned to address the foreseen "environmental
depredation" to be brought about by these "special projects" to
the Municipality. Pursuant to these objectives, the Municipality

Issue/s:
3) WON the fees are taxes
NO
4) WON CTA should have take cognizance of the case.
-- NO
5) WON the fees are unjust and unreasonable.
NO
Held/Ratio: Petition DENIED.
1)

NO. The fees are NOT taxes.

o Since the main purpose of Ordinance No. 18 is to regulate certain
construction activities of the identified special projects, which
included "cell sites" or telecommunications towers, the fees
imposed in Ordinance No. 18 are primarily regulatory in nature,
and not primarily revenue-raising. While the fees may contribute
to the revenues of the Municipality, this effect is merely incidental.
Thus, the fees imposed in Ordinance No. 18 are not taxes.

Progressive Development Corporation v. Quezon City: if the

h) Written consent from subdivision association or the

generating of revenue is the primary purpose and regulation is

residence of the area concerned if the special projects is

merely incidental, the imposition is a tax; but if regulation is the

located within the residential zone.

i) Barangay Council Resolution endorsing the special

primary purpose, the fact that incidentally revenue is also

o

obtained does not make the imposition a tax.

Victorias Milling Co., Inc. v. Municipality of Victorias: the purpose

Upon the expiration of 180 days and the proponents of

and effect of the imposition determine whether it is a tax or a fee,

special projects shall apply for final [development permit] and

and that the lack of any standards for such imposition gives the
o

they are require[d] to submit the following:

a) evaluation from the committee where the Vice Mayor

presumption that the same is a tax.

Ordinance No. 18 expressly provides for the standards which

refers the special project

b) Certification that all local fees have been paid.

Smart must satisfy prior to the issuance of the specified permits,

clearly indicating that the fees are regulatory in nature. These
requirements are as follows:
SECTION 5. Requirements and Procedures in Securing
Preliminary Development Permit.
The following documents shall be submitted to the SB
Secretary in triplicate:
a) zoning clearance
b) Vicinity Map
c) Site Plan
d) Evidence of ownership
e) Certificate true copy of NTC Provisional Authority in case
of Cellsites, telephone or telegraph line, ERB in case of

projects.
SECTION 6. Requirement for Final Development Permit

Even if the fees do not appear in Section 143 or any other

provision in the LGC, the Municipality is empowered to impose
taxes, fees and charges, not specifically enumerated in the LGC
or taxed under the Tax Code or other applicable law according to
Section 186 of the LGC. Thus they dont encroach on NTCs
powers.

2) NO. CTA correctly refused to take cognizance of the case.

o Considering that the fees in Ordinance No. 18 are not in the

gasoline station, power plant, and other concerned national

nature

of

local

taxes,

and

Smart

is

questioning

the

agencies
f) Conversion order from DAR is located within agricultural

constitutionality of the ordinance, the CTA correctly dismissed the

petition for lack of jurisdiction. Likewise, Section 187 of the LGC,

zone.
g) Radiation Protection Evaluation.

which outlines the procedure for questioning the constitutionality

of a tax ordinance, is inapplicable, rendering unnecessary the

resolution of the issue on non-exhaustion of administrative

NATIONAL POWER CORPORATION vs. MUNICIPAL GOVERNMENT

remedies.

OF

3) NO.
o An ordinance carries with it the presumption of validity. The
question of reasonableness though is open to judicial inquiry.
Much should be left thus to the discretion of municipal
authorities. Courts will go slow in writing off an ordinance as
unreasonable unless the amount is so excessive as to be
prohibitive, arbitrary, unreasonable, oppressive, or confiscatory.
A rule which has gained acceptance is that factors relevant to
such an inquiry are the municipal conditions as a whole and the
o

nature of the business made subject to imposition.

To justify the nullification of the law or its implementation, there
must be a clear and unequivocal, not a doubtful, breach of the
Constitution. In case of doubt in the sufficiency of proof
establishing unconstitutionality, the Court must sustain legislation
because "to invalidate [a law] based on xx x baseless
supposition is an affront to the wisdom not only of the legislature
that passed it but also of the executive which approved it." This
presumption of constitutionality can be overcome only by the
clearest showing that there was indeed an infraction of the
Constitution, and only when such a conclusion is reached by the
required majority may the Court pronounce, in the discharge of
the duty it cannot escape, that the challenged act must be struck
down.

NAVOTAS,

SANGGUNIANG

BAYAN

OF

NAVOTAS

AND

MANUEL T. ENRIQUEZ, in his capacity as Municipal Treasurer of

Navotas, G.R. No. 192300, November 24, 2014, J. Peralta
NAPOCOR led a petition for declaratory relief based on the
assessments of real property taxes the Municipality of Navotas
imposed. It then questioned the legality of the tax imposition. On
appeal, the CTA En Banc ruled that the RTC has jurisdiction over the
case even though administrative remedies were not exhausted. The
Court clari ed that although there are instances were resort to judicial
action is allowed, it is not so in the case at hand.
The fact that a separate chapter is devoted to the treatment of real
property taxes, and a distinct appeal procedure is provided therefor
does not justify an inference that Section 7(a)(3) of R.A. 9282 pertains
only to local taxes other than real property taxes. Rather, the term "local
taxes" in the aforementioned provision should be considered in its
general and comprehensive sense, which embraces real property tax
assessments, in line with the precept Generalia verba sunt generaliter
inteligenciawhat is generally spoken shall be generally understood.
Based on the foregoing, the general meaning of "local taxes" should be
adopted in relation to Paragraph (a)(3) of Section 7 of R.A. 9282, which
necessarily includes real property taxes.
In ne, if a taxpayer is not satis ed with the decision of the CBAA or the
RTC, as the case may be, the taxpayer may le, within thirty (30) days
from receipt of the assailed decision, a petition for review with the CTA
pursuant to Section 7(a) of R.A. 9282. In cases where the question

involves the amount of the tax or the correctness thereof, the appeal

Issue/s:

will be pursuant to Section 7(a)(5) of R.A. 9282. When the appeal

1) WON CA erred in dismissing petitioners case for lack of

comes from a judicial remedy which questions the authority of the local

jurisdiction?

government to impose the tax, Section 7(a)(3) of R.A. 9282 applies.

Thereafter, such decision, ruling or resolution may be further reviewed

Held: 1) No it did not. The jurisdiction for such a scenario is

by the CT A En Banc pursuant to Section 2, Rule 4 of the Revised

lodged with the CTA because as the law expressly

Rules of the CTA.

confers on the CTA, the tribunal with the specialized

competence over tax and tariff matters, the role of

CITY OF MANILA v. GRECIA-CUERDO (Layno)

judicial review over local tax cases without mention of

[GR. No. 175723; FEB. 4, 2014]

any other court that may exercise such power. Thus, the

If appellate jurisdiction if vested with CTA, it follows that a petition for

Court agrees with the ruling of the CA that since

certiorari seeking nullification of an interlocutory order issued in the

appellate jurisdiction over private respondents' complaint

same case should likewise be filed in the said Court (even if the RAs

for tax refund is vested in the CTA, it follows that a

creating CTA did not explicitly say so.)

petition

for

certiorari

seeking

nullification

of

an

interlocutory order issued in the said case should,

Recit-Ready:

likewise, be filed with the same court. To rule otherwise

Facts: Petitioner City of Manila assessed taxes against stores

would lead to an absurd situation where one court

owned by SM like Ace Hardware, Watsons, and Surplus,

decides an appeal in the main case while another court

etc. SM was constrained to pay P19M for the

rules on an incident in the very same case.

assessment under protest. They thereafter filed with

RTC Pasay a complaint for the recovery of what they
paid. RTC granted their Writ of Preliminary Injunction to
which the City of Manila assailed by filing a Rule 65 to

Facts:

The record shows that petitioner City of Manila, through its

the CA. CA dismissed their petition for not having

treasurer, petitioner Liberty Toledo, assessed taxes for the taxable

jurisdiction over it.

period

from

January

to

December

2002

against

private

respondents SM Mart, Inc., SM Prime Holdings, Inc., Star

Appliances Center, Supervalue, Inc., Ace Hardware Philippines,

Issue/s:

Inc., Watsons Personal Care Stores Phils., Inc., Jollimart

WON CA erred in dismissing the case for lack of jurisdiction?

-NO

Philippines Corp., Surplus Marketing Corp. and Signature Lines. In

addition to the taxes purportedly due from private respondents
pursuant to the Revised Revenue Code of Manila, said assessment
covered the local business taxes petitioners were authorized to
collect. Because payment of the taxes assessed was a
precondition for the issuance of their business permits, private
respondents

were

constrained

to

pay

the

P19,316,458.77

assessment under protest.

Private respondents then filed in the RTC of Pasay the complaint

denominated as one for "Refund or Recovery of Illegally and/or
Erroneously-Collected Local Business Tax, Prohibition with Prayer
to Issue TRO and Writ of Preliminary Injunction" before the public
respondents sala. The RTC granted the writ of preliminary
injunction. To this granting of injunction (Injunction Order)
petitioners filed an MR which was denied hence they filed a Rule
65 to CA.

CA dismissed petitioners' petition for certiorari holding that it has no

jurisdiction over the said petition. The CA ruled that since appellate
jurisdiction over private respondents' complaint for tax refund,
which was filed with the RTC, is vested in the Court of Tax Appeals.
It follows that a petition for certiorari seeking nullification of an
interlocutory order issued in the said case should, likewise, be filed
with the CTA.

Held/Ratio: WHEREFORE, the petition is DENIED.

Without first resolving the above issues, this Court finds that the instant
petition should be denied for being moot and academic. Upon perusal
of the original records of the instant case, this Court discovered that a
Decision in the main case had already been rendered by the RTC
granting the tax refunds and that the public respondents were enjoined
from collecting taxes pursuant to Sec. 21 of their Revenue Code of
Manila.

The basic question posed before this Court is whether or not the
CTA has jurisdiction over a special civil action for certiorari
assailing an interlocutory order issued by the RTC in a local tax
case to which the Court rules in the affirmative. As culled from RA
1125, the law that created the CTA, and RA 9282 expanding the
jurisdiction of the CTA, while it is clearly stated that the it has
exclusive appellate jurisdiction over decisions, orders or resolutions
of the RTCs in local tax cases originally decided or resolved by
them in the exercise of their original or appellate jurisdiction, there
is no categorical statement under RA 1125 as well as the
amendatory RA 9282, which provides that the CTA has jurisdiction
over petitions for certiorari assailing interlocutory orders issued by
the RTC in local tax cases filed before it.

Section 1, Article VIII of the 1987 Constitution provides,

especially considering that the law expressly confers on the CTA,

nonetheless, that judicial power shall be vested in one Supreme

the tribunal with the specialized competence over tax and tariff

Court and in such lower courts as may be established by law and

matters, the role of judicial review over local tax cases without

that judicial power includes the duty of the courts of justice to settle

mention of any other court that may exercise such power. Thus, the

actual controversies involving rights which are legally demandable

Court agrees with the ruling of the CA that since appellate

and enforceable, and to determine whether or not there has been a

jurisdiction over private respondents' complaint for tax refund is

grave abuse of discretion amounting to lack or excess of

vested in the CTA, it follows that a petition for certiorari seeking

jurisdiction on the part of any branch or instrumentality of the

nullification of an interlocutory order issued in the said case should,

Government.

likewise, be filed with the same court. To rule otherwise would lead
to an absurd situation where one court decides an appeal in the

On the strength of the above constitutional provision, it can be fairly

main case while another court rules on an incident in the very

interpreted that the power of the CTA includes that of determining

same case.

whether or not there has been grave abuse of discretion amounting

to lack or excess of jurisdiction on the part of the RTC in issuing an

Stated differently, it would be somewhat incongruent with the

interlocutory order in cases falling within the exclusive appellate

pronounced judicial abhorrence to split jurisdiction to conclude that

jurisdiction of the tax court. It, thus, follows that the CTA, by

the intention of the law is to divide the authority over a local tax

constitutional mandate, is vested with jurisdiction to issue writs of

case filed with the RTC by giving to the CA or this Court jurisdiction

certiorari in these cases.

to issue a writ of certiorari against interlocutory orders of the RTC

Now, if the SC were to sustain petitioners' contention that

jurisdiction over their certiorari petition lies with the CA, this Court
would be confirming the exercise by two judicial bodies, the CA and
the CTA, of jurisdiction over basically the same subject matter
precisely the split-jurisdiction situation which is anathema to the
orderly administration of justice.

The Court cannot accept that such was the legislative motive,

but giving to the CTA the jurisdiction over the appeal from the
decision of the trial court in the same case. It is more in
consonance with logic and legal soundness to conclude that the
grant of appellate jurisdiction to the CTA over tax cases filed in and
decided by the RTC carries with it the power to issue a writ of
certiorari when necessary in aid of such appellate jurisdiction. The
supervisory power or jurisdiction of the CTA to issue a writ of
certiorari in aid of its appellate jurisdiction should co-exist with, and
be a complement to, its appellate jurisdiction to review, by appeal,

the final orders and decisions of the RTC, in order to have

Facts:

complete supervision over the acts of the latter.

COMMISSIONER OF CUSTOMS v. MARINA SALES, INC. (Ocampo)

Sunquick juice concentrates and usually imports raw materials into

[G.R. No. 183868; November 22, 2010]

the country. In the past the Bureau of Customs (BOC) assessed said

CTA En Banc: MagMR ka muna sa Division bago ka pumunta sakin.

Recit-Ready:
Facts: The BOC examiners recommended to the VCRC the

type of importations under Tariff Heading H.S. 2106.90 10 with a 1%

import duty rate.

However, on March 6, 2003, the BOC examiners contested the tariff
classification made by the respondent and recommended to the

reclassification of the importations of respondent Marina

Collector of Customs to reclassify respondents importation with a

from being subject to 1% import duty rate to 7%. VCRC

adopted such recommendation. Respondent filed a

Respondent Marina Sales, Inc. is engaged in the manufacture of

corresponding 7% import duty rate.

Respondent executed an undertaking that it will pay when the

petition for review before the CTA. Its Second Division

reclassification (i.e., from 1% to 7% import duty rate) is finally

ruled in favor of respondent. The petitioner appealed the

determined as correct in order to prevent the withholding of its

same to the CTA En Banc without filing a prior MR

importations.
The Valuation and Classification Review Committee (VCRC)

before said Division. Thus, it dismissed the petition on

such ground in accordance with the Revised Rules of

reclassified the subject importations of respondent at 7% import duty

CTA.

rate. Respondent interposed a petition for review before the CTA.

CTA Second Division ruled in favor of respondent holding that its

Issue: WON the dismissal by the CTA En Banc on mere

classification with 1% import duty rate was the most appropriate and

technicality will result in injustice and unfairness to the petitioner

descriptive of the disputed importations.

Petitioner disagreed with said decision and elevated the case to the

Held: NO. Before the CTA En Banc could take cognizance of

the petition for review concerning a case falling under its
exclusive

appellate

jurisdiction,

the

litigant

must

sufficiently show that it sought prior reconsideration or

moved for a new trial with the concerned CTA division.

CTA En Banc via a petition for review. However, the latter dismissed
the petition for failure to file the required Motion for Reconsideration
before the CTA Second Division prior to elevating the case to CTA
En Banc in accordance with Section 1, Rule 8 of the Revised Rules
of the Court of Tax Appeals.

Issue:
WON the dismissal by the CTA En Banc on mere technicality will

JUDY ANNE SANTOS v. PEOPLE OF THE PHILIPPINES and BIR

(De Luis)

result in injustice and unfairness to the petitioner NO

[GR. No. 173176; August 26, 2008]

Held/Ratio: Wherefore, the petition is DENIED.

unappealable.

No. Before the CTA En Banc could take cognizance of the petition

Recit-Ready:

for review concerning a case falling under its exclusive appellate

Facts: BIR Commissioner Parayno wrote to DOJ Secretary

Raul Gonzales regarding the possible filing of criminal charges
against Judy Anne Santos for tax evasion. The BIR
Commissioner summarized Santoss ITR and concluded that
she substantially underdeclared her income in different taxable
years, this constituted a prima facie evidence of false or
fraudulent return under the NIRC. Accordingly, Prosecutor
Torrevillas issued a Resolution finding probable cause and
recommending the filing of criminal information against Santos.
Pursuant to this, an Information for violation of Section 255 in
relation to Sections 254 and 248(b) of the NIRC was filed with
the CTA First Division on Nov. 3, 2005. Petitioner filed a motion
to quash the information, which was denied by the CTA First
Division. Consequently, petitioner filed a motion with the CTA en
banc a Motion for Extension of Time to File Petition for Review.
She filed her Petition for Review with the CTA en banc on June
16, 2006. However, the CTA en banc denied petitioners Motion
for Extension of Time to File Petition for Review because a
ruling denying a motion to quash is only an interlocutory order,
as such, it cannot be made the subject of an appeal.
Juday appealed to the Supreme Court alleging that the

jurisdiction, the litigant must sufficiently show that it sought prior

reconsideration or moved for a new trial with the concerned CTA
division.
o The Court agreed with the CTA En Banc that the Commissioner
failed to comply with the mandatory provisions of Rule 8, Section
1 of the Revised Rules of the Court of Tax Appeals requiring that
the petition for review of a decision or resolution of the Court in
Division must be preceded by the filing of a timely motion for
reconsideration or new trial with the Division. The word "must"
clearly indicates the mandatory, not merely directory, nature of a
o

requirement.
The Court also held that procedural rules are not to be trifled with
or be excused simply because their non-compliance may have
resulted in prejudicing a partys substantive rights. Rules are
meant to be followed. They may be relaxed only for very exigent
and persuasive reasons to relieve a litigant of an injustice not
commensurate to his careless non-observance of the prescribed
rules.

The denial of a motion to quash is an interlocutory order and, thus,

resolution of the CTA Divison denying a motion to quash is a

proper subject of an appeal to the CTA en banc under Section
18 of R.A. 1125, because the law does not say that only a
resolution that constitutes a final disposition of a case may be
appealed to the CTA en banc.
Issue/s:
WON a resolution of the CTA Division denying a motion to
quash is a proper subject of an appeal to the CTA en banc
under Section 11 of R.A. 9282 (CTA Law)
NO

denial of motion to quash is an interlocutory order, which is not

the proper subject of an appeal or a petition for certiorari.
Even if her Petition for Review is to be treated as a petition for
certiorari, it is dismissible for lack of merit, because the
Prosecuting Attorney Torrevillas (Prosecutor appointed by the
DOJ) has the authority to file the information by virtue of the
approval of the BIR Commissioner through his letter to the DOJ
Secretary. Also, the filing of the said information was not in
violation of petitioners constitutional rights to due process and
equal protection of laws.
Facts:

On May 19, 2005, BIR Commissioner Guillermo Parayno wrote to

the DOJ Secretay Raul Gonzales regarding the possible filing of

Held:
Petitioner cannot file a Petition for Review with the CTA en banc
to appeal the Resolution of the CTA First Division denying her
Motion to Quash. The Resolution is interlocutory and, thus,
unappealable. The petition for review under Section 18 of
Republic Act No. 1125, as amended, may be new to the CTA,
but it is actually a mode of appeal long available in courts of
general jurisdiction. The CTA merely adopts the procedure for
petitions for review and appeals long established and practiced
in other Philippine courts. Accordingly, doctrines, principles,
rules, and precedents laid down in jurisprudence by this Court
as regards petitions for review and appeals in courts of general
jurisdiction should likewise bind the CTA, and it cannot depart
therefrom. It is a general rule in the rules of procedure that the

criminal charges against Judy Anne Santos.

In said letter, BIR Commissioner Parayno summarized the findings of
the investigating BIR officers that petitioner, in her Annual Income
Tax Return for taxable year 2002 filed with the BIR, declared an
income of P8,033,332.70 derived from her talent fees solely from
ABS-CBN; initial documents gathered from the BIR offices and those
given by petitioners accountant and third parties, however, confirmed
that petitioner received in 2002 income in the amount of at
least P14,796,234.70, not only from ABS-CBN, but also from other
sources, such as movies and product endorsements; the estimated
tax liability arising from petitioners underdeclaration amounted
to P1,718,925.52,

including

incremental

penalties;

the

non-

declaration by petitioner of an amount equivalent to at least 84.18%

of the income declared in her return was considered a substantial

underdeclaration of income, which constituted prima facie evidence

of false or fraudulent return under Section 248(B) of the NIRC, as
amended; and petitioners failure to account as part of her income

the professional fees she received from sources other than ABSCBN and her underdeclaration of the income she received from
ABS-CBN amounted to manifest violations of Sections 254 and 255,

as well as Section 248(B) of the NIRC, as amended.

Prosecution Attorney Olivia Laroza-Torrevillas issued a Resolution
dated Oct. 21, 2005, finding probable cause and recommending the
filing of criminal information against Santos. Chief State Prosecutor
Jovencito R. Puno approved the Resolution. Pursuant to this, an
information for violation of Section 255 in relation to Sections 254

and 248(b) of the NIRC was filed with the CTA on Nov. 3, 2005.
The CTA First Division then issued a warrant for the arrest of
petitioner. The tax court lifted and recalled the warrant of arrest on
21 December 2005 after petitioner voluntarily appeared and
submitted herself to its jurisdiction and filed the required bail bond in

the amount ofP20,000.00.

On Jan. 10, 2006, petitioner filed with the CTA First Division a
Motion to Quash the information on the following grounds: 1) the
facts alleged do not constitute an offense; 2) the officer who filed the
information had no authority to do so; 3) the Honorable CTA has no
jurisdiction over the subject matter of the case; and 4) the
information is void ab initio, for being violative of due process, and
the equal protection of laws.
The CTA First Division denied the petitioners Motion to Quash and
accordingly scheduled her arraignment on March 2, 1006. Petitioner

filed a Motion for Reconsideration and/or Reinvestigation, which was

again denied by the CTA First Division
On June 1, 2006, petitioner filed with the CTA en banc a Motion for
Extension of Time to File Petition for Review. She filed her Petition
for Review with the CTA en banc on June 16, 2006. However, the
CTA en banc denied petitioners Motion for Extension of Time to File
Petition for Review because a ruling denying a motion to quash is
only an interlocutory order, as such, it cannot be made the subject of
an appeal.
Juday appealed to the Supreme Court alleging that the resolution of
the CTA Divison denying a motion to quash is a proper subject of an
appeal to the CTA en banc under Section 18 of R.A. 1125, because
the law does not say that only a resolution that constitutes a final
disposition of a case may be appealed to the CTA en banc.

Issue/s:
WON a resolution of the CTA Division denying a motion to quash
is a proper subject of an appeal to the CTA en banc under Section
11 of R.A. 9282 (CTA Law)
NO
Held/Ratio: Petition DENIED. The CTA en banc did not err in denying
petitioners Motion for Extension of Time to File Petition for Review.
NO. Petitioner cannot file a Petition for Review with the CTA en
banc to appeal the Resolution of the CTA First Division denying
her Motion to Quash. The Resolution is interlocutory and, thus,
unappealable. Even if her Petition for Review is to be treated as a
petition for certiorari, it is dismissible for lack of merit.

The petition for review under Section 18 of Republic Act No. 1125,
as amended, may be new to the CTA, but it is actually a mode of
appeal long available in courts of general jurisdiction. Hence, the
Revised CTA Rules no longer elaborated on it but merely referred to
existing rules of procedure on petitions for review and appeals. The
CTA merely adopts the procedure for petitions for review and
appeals long established and practiced in other Philippine courts.
Accordingly, doctrines, principles, rules, and precedents laid down
in jurisprudence by this Court as regards petitions for review and
appeals in courts of general jurisdiction should likewise bind the
CTA, and it cannot depart therefrom.
It is a general rule in the rules of procedure that the denial of

motion to quash is an interlocutory order which is not the proper

subject of an appeal or a petition for certiorari.
According to Section 1, Rule 41 of the Revised Rules of
Court, governing appeals from the Regional Trial Courts
(RTCs) to the Court of Appeals, an appeal may be taken
only from a judgment or final order that completely disposes
of the case or of a matter therein when declared by the
Rules to be appealable. Said provision, thus, explicitly states
that no appeal may be taken from an interlocutory order.
After a final order or judgment, the court should have
nothing more to do in respect of the relative rights of the
parties to the case. Conversely, "an order that does not
finally dispose of the case and does not end the Court's task
of adjudicating the parties' contentions in determining their
rights and liabilities as regards each other, but obviously
indicates that other things remain to be done by the Court, is
interlocutory.

Another recognized reason of the law in permitting appeal

only from a final order or judgment, and not from an
interlocutory or incidental one, is to avoid multiplicity of
appeals in a single action, which must necessarily suspend
the hearing and decision on the merits of the case during
the pendency of the appeal.
The remedy of an accused from the denial of his or her motion to
quash is an appeal from the judgment after trial on the merits. The
accused, after the denial of his motion to quash, should have
proceeded with the trial of the case in the court below, and if final
judgment is rendered against him, he could then appeal, and, upon
such appeal, present the questions which he sought to be decided
by the appellate court in a petition for certiorari.
While the general rule proscribes the appeal of an interlocutory
order, there are also recognized exceptions to the same. Where
special circumstances clearly demonstrate the inadequacy of an
appeal, then the special civil action of certiorari or prohibition
(Rule 65) may exceptionally be allowed.
This Court recognizes that under certain situations, recourse
to extraordinary legal remedies, such as a petition
for certiorari, is considered proper to question the denial of a
motion to quash (or any other interlocutory order) in the
interest of a "more enlightened and substantial justice or to
promote public welfare and public policy; or when the cases
"have attracted nationwide attention, making it essential to
proceed with dispatch in the consideration thereof"; or when
the order was rendered with grave abuse of discretion.
Certiorari is an appropriate remedy to assail an interlocutory
order (1) when the tribunal issued such order without or in
excess of jurisdiction or with grave abuse of discretion; and

(2) when the assailed interlocutory order is patently

erroneous, and the remedy of appeal would not afford
adequate and expeditious relief.
As to whether the CTA en banc, under its expanded jurisdiction in
Republic Act No. 9282, has been granted jurisdiction over special
civil actions for certiorari is not raised as an issue in the Petition at
bar, thus, precluding the Court from making a definitive
pronouncement thereon. However, even if such an issue is
answered in the negative, it would not substantially affect the ruling
of this Court herein, for a party whose motion to quash had been
denied may still seek recourse, under exceptional and meritorious
circumstances, via a special civil action for certiorari with this Court,
refuting petitioners assertion of a procedural void.
Assuming that the CTA en banc, as an exception to the general
rule, allowed and treated petitioners Petition for Review in
C.T.A. EB. CRIM. No. 001 as a special civil action
for certiorari, it would still be dismissible for lack of merit.
Petitioner argues that the information was filed without the
approval of the BIR Commissioner in violation of Section
220 of the NIRC. This argument must fail in light of BIR
Commissioner Paraynos letter dated 19 May 2005 to DOJ
Secretary
Gonzales
referring
"for
preliminary
investigation and filing of an information in court if
evidence so warrants," the findings of the BIR officers
recommending the criminal prosecution of petitioner. In said
letter, BIR Commissioner Parayno already gave his prior
approval to the filing of an information in court should the
DOJ, based on the evidence submitted, find probable cause
against petitioner during the preliminary investigation.

Section 220 of the NIRC, as amended, simply requires that

the BIR Commissioner approve the institution of civil or
criminal action against a tax law violator, but it does not
describe in what form such approval must be given.
Petitioner asserts that it is the City Prosecutor under the
Quezon City Charter, who has the authority to investigate
and prosecute offenses allegedly committed within the
jurisdiction of Quezon City. This argument is untenable
because the charge against petitioner is already within the
exclusive original jurisdiction of the CTA. The City
Prosecutor does not have the authority to appear before the
CTA, which is now the same rank as the Court of Appeals.
The proper prosecutor in this case is the Chief State
Prosecutor, who exercises control and supervision over City
Prosecutors.
Petitioner alleges that she has been denied due process and
equal protection of the laws when similar charges for
violation of the NIRC, against Regina Encarnacion A.
Velasquez (Velasquez) were dismissed by the DOJ the
reason that Velasquezs tax liability was not yet fully
determined when the charges were filed.
This contention lacks merit. First, a motion to quash
should be based on a defect in the information,
which is evident on its face. The Information against
petitioner appears valid on its face; and that it was
filed in violation of her constitutional rights to due
process and equal protection of the laws is not
evident on the face thereof. As pointed out by the
CTA First Division, the more appropriate recourse
petitioner should have taken, given the dismissal of

similar charges against Velasquez, was to appeal

with the DOJ Secretary the Resolution of the Office
of the State Prosecutor recommending the filing of
an information against her.
Second, petitioner cannot claim denial of due
process when she was given the opportunity to file
her affidavits and other pleadings and submit
evidence before the DOJ during the preliminary
investigation of her case and before the Information
was filed against her.
Third, petitioner was not able to duly establish to the
satisfaction of this Court that she and Velasquez
were indeed similarly situated, i.e., that they
committed identical acts for which they were charged
with the violation of the same provisions of the NIRC;
and that they presented similar arguments and
evidence in their defense - yet, they were treated
differently. In the case at bar, no evidence of a clear
and intentional discrimination against petitioner was
shown, whether by Prosecution Attorney Torrevillas
in recommending the filing of Information against
petitioner or by the CTA First Division in denying
petitioners Motion to Quash. The only basis for
petitioners claim of denial of equal protection of the
laws was the dismissal of the charges against
Velasquez while those against her were not.

CIR v. CBK POWER COMPANY LIMITED (Lim, Q.)

[GR. No. 20305455 ; July 29, 2015]

CTA En Banc has jurisdiction over final order or judgment but not over
interlocutory orders issued by the CTA in division.
Recit-Ready:
Facts: Private respondent, CBK Power Company Limited
(CBK), is a special purpose entity. Petitioner is the duly
appointed Commissioner of Internal Revenue. CBK filed
with the CTA a judicial claim for the issuance of a tax
credit certificate. After various procedural aspects, the
CTA issued the first assailed Resolution, allowing
the petitioner to present its evidence ex parte.
Respondent was ordered to file its comment on the
motion to lift order of default but failed to do so.
Petitioner filed a motion for reconsideration on April 27,
2012. The CTA directed private respondent to file its
Comment thereto but failed to do so. CTA issued the
second assailed Resolution denying the motion to lift
order of default stating Section 5 of Rule 18 of the
Revised Rules of Court. Petitioner filed a motion for
reconsideration, which the respondent denied. CBK
claims that petitioner chose an erroneous remedy
when it filed a petition for certiorari with the
Supreme Court since the proper remedy on any
adverse resolution of any division of the CTA is an
appeal by way of a petition for review with the CTA
En Banc.

Court is in conformity with the rules.

Issue/s:

(*As a general rule, decisions of the CTA in division are

still only appealable to the CTA en banc and not to

WON an interlocutory order (Order of Default) issued by

the Supreme Court.)

a division of the CTA be brought directly on certiorari to

the Supreme Court even without appealing the same to
the CTA en banc?
YES

Facts:

Private respondent, CBK Power Company Limited (CBK), is a

special purpose entity engaged in all aspects of
(1) design, financing, construction, testing, commissioning,
operation, maintenance, management, and ownership of

Held: YES. It is clear that the CTA En Banc has jurisdiction

over

Kalayaan II pumped storage hydroelectric power plant, the new

interlocutory orders issued by the CTA in division.

Caliraya Spillway in Laguna; and

(2) the rehabilitation, expansion, commissioning, operation,

over

final

order

or

judgment

but

not

Given the differences between a final judgment and an

maintenance and management of the Caliraya, Botocan, and

interlocutory order, there is no doubt that the CTA Order

Kalayaan I hydroelectric power plants and their related facilities

dated December 23, 2011 granting private respondents

motion to declare petitioner as in default and allowing
respondent to present its evidence ex parte, is an

vested with authority to act as such, inter alia, the power to decide,

interlocutory order as it did not finally dispose of the

approve and grant refunds or tax credit of erroneously or illegally

case on the merits but will proceed for the reception

of the formers evidence to determine its entitlement
to its judicial claim for tax credit certificates.
The CTA en banc has clear jurisdiction over final orders
or judgments but not over interlocutory orders issued
by the CTA in division. As no appeal can be taken from
the questioned order to declare in default, Petitioners
filing of the instant petition for certiorari with the Supreme

in Laguna.
Petitioner is the duly appointed Commissioner of Internal Revenue

collected internal revenue taxes as provided by law.

On March 30, 2011, CBK filed with the CTA a judicial claim for
the issuance of a tax credit certificate in the amount of
P17,784,968.91, representing unutilized input taxes on its local
purchases and importations of goods other than capital goods, local
purchases

of

services,

payment

of

services

rendered

by

nonresidents, including unutilized amortized input taxes on capital

goods exceeding one million for the period of January 1, 2009 to

March 31, 2009, all attributable to zerorated sales for the same

However, on the December 1, 2011 pretrial conference, Atty.

period.

Sandico failed to appear, thus private respondent moved that

o The case was docketed as CTA Case No. 8246.

On May 30, 2011, petitioner received summons requiring it to

answer. Petitioner complied and filed the Answer.

Petitioner then received a notice of pretrial conference set on July

21, 2011. Petitioner filed its pretrial brief.

Earlier, CBK filed another judicial claim for the issuance of a tax

credit certificate in the amount of P31,680,290.87.

o The case was docketed as CTA Case No. 8302.
Subsequently, CBK filed a motion for consolidation and

Resolution, allowing the petitioner to present its evidence ex

the petition for review. Petitioners lawyer, filed his Answer.

The pretrial conference for CTA Case No. 8302 was set on
September 29, 2011. Thus, private respondent filed a motion for
consolidation and postponement of the pretrial conference for CTA

Case No. 8302.

In a Resolution dated October 14, 2011, the CTA granted the motion
for consolidation and set the pretrial conference on November 3,

2011.
Atty. Mauricio failed to appear at the scheduled pretrial conference
as he was on leave for health reasons from October to December

2011.
The pretrial was reset to December 1, 2011. Petitioners counsel,
Atty. Sandico, who was then assigned to handle the consolidated
cases, filed his consolidated pretrial brief on November 15, 2011.

parte.
On January 6, 2012, petitioner filed a Motion to Lift Order of Default
alleging that the failure to attend the pretrial conference on
November 3, 2011 was due to confusion in office procedure in
relation to the consolidation of CTA Case No. 8246 with CTA Case
No. 8302 since the latter was being handled by a different lawyer;

postponement of the pretrial conference scheduled for CTA Case

No. 8246.
On July 19, 2011 petitioner received summons requiring it to answer

petitioner be declared in default.

On December 23, 2011, the CTA issued the first assailed

that when the pretrial conference was reset to December 1, 2011,

petitioners counsel, Atty. Sandico, had to attend the hearing of
another case in the CTAs First Division also at 9:00 a.m., hence, he
unintentionally missed the pretrial conference of the consolidated

cases.
Respondent was ordered to file its comment on the motion to

lift order of default but failed to do so.

On April 19, 2012, the CTA issued the second assailed
Resolution denying the motion to lift order of default stating
Section 5 of Rule 18 of the Revised Rules of Court.3

3 Sec. 5. Effect of failure to appear.The failure of the plaintiff to appear when so required

pursuant to the next preceding section shall be cause for dismissal of the action. The dismissal
shall be with prejudice, unless otherwise ordered by the court. A similar failure on the part of the
defendant shall be cause to allow the plaintiff to present his evidence ex parte and the court to
render judgment on the basis thereof.

Petitioner filed a motion for reconsideration on April 27, 2012.

YES. It is clear that the CTA En Banc has jurisdiction over final

The CTA directed private respondent to file its Comment thereto but

order or judgment but not over interlocutory orders issued by the

CTA in division.

failed to do so.
In a Resolution dated June 13, 2012, the CTA denied the motion

for reconsideration.
CBK claims that petitioner chose an erroneous remedy when it

from a decision, resolution, or order of the CTA Division, was

filed a petition for certiorari with the Supreme Court since the

been available in Philippine courts of general jurisdiction. Hence,

proper remedy on any adverse resolution of any division of the

CTA is an appeal by way of a petition for review with the CTA

En Banc.
It claims that it is what is provided under Section 2(a)(1) of Rule 4 of
the Revised Rules of the Court of Tax Appeals (RRCTA) that the
Court En Banc shall exercise exclusive appellate jurisdiction to
review by appeal the decision or resolutions on motions for
reconsideration or new trial of the Court in division in the exercise of
its

exclusive

appellate

jurisdiction

over

cases

arising

from

administrative agencies such as the Bureau of Internal Revenue.

Issue/s:
WON an interlocutory order (Order of Default) issued by a division
of the CTA be brought directly on certiorari to the Supreme Court
even without appealing the same to the CTA en banc?
YES
Held/Ratio: WHEREFORE, the petition for certiorari is GRANTED.

Although the filing of a petition for review with the CTA En Banc
newly made available to the CTA, such mode of appeal has long
the Revised CTA Rules no longer elaborated on it but merely
referred to existing rules of procedure on petitions for review and
appeals

According to the Rules of Court,4 the petition for review to be filed

Given the differences between a final judgment and an

with the CTA En Banc as the mode for appealing a decision,

interlocutory order, there is no doubt that the CTA Order dated

resolution, or order of the CTA Division, under Section 18 of

December 23, 2011 granting private respondents motion to

Republic Act No. 1125, as amended, is not a totally new remedy.

To the contrary, the CTA merely adopts the procedure for petitions

declare petitioner as in default and allowing respondent to present

for review and appeals long established and practiced in other

finally dispose of the case on the merits but will proceed for

its evidence ex parte, is an interlocutory order as it did not

Philippine courts. Accordingly, doctrines, principles, rules, and

the reception of the formers evidence to determine its

precedents laid down in jurisprudence by this Court as regards

petitions for review and appeals in courts of general jurisdiction
should likewise bind the CTA, and it cannot depart therefrom.

entitlement to its judicial claim for tax credit certificates.

Even the CTAs subsequent orders denying petitioners motion to
lift order of default and denying reconsideration thereof are all
interlocutory orders since they pertain to the order of default.

4 RULE 7 PROCEDURE IN THE COURT OF TAX APPEALS SEC. 1. Applicability of the Rules of
the Court of Appeals. The procedure in the Court En Banc or in Divisions in original and in
appealed cases shall be the same as those in petitions for review and appeals before the Court of
Appeals pursuant to the applicable provisions of Rules 42, 43, 44 and 46 of the Rules of Court,
except as otherwise provided for in these Rules.
RULE 8 PROCEDURE IN CIVIL CASES
SEC. 4. Where to appeal; mode of appeal.
(b) An appeal from a decision or resolution of the Court in Division on a motion for reconsideration
or new trial shall be taken to the Court by petition for review as provided in Rule 43 of the Rules of
Court. The Court En Banc shall act on the appeal.
RULE 9 PROCEDURE IN CRIMINAL CASES
SEC. 1. Review of cases in the Court.The review of criminal cases in the Court En Banc or in
Division shall be governed by the applicable provisions of Rule 124 of the Rules of Court.
SEC. 9. Appeal; period to appeal.
(b) An appeal to the Court En Banc in criminal cases decided by the Court in Division shall be
taken by filing a petition for review as provided in Rule 43 of the Rules of Court within fifteen days
from receipt of a copy of the decision or resolution appealed from. The Court may, for good cause,
extend the time for filing of the petition for review for an additional period not exceeding fifteen
days.

Since the CTA Orders are merely interlocutory, no appeal can be

taken therefrom. Hence, petitioners filing of the instant petition
for certiorari assailing the interlocutory orders issued by the CTA
is in conformity with the above quoted provision.