CTA Case No. 2223 (Resolution)

� -\�PUBLIC OJ' TIE PHILIPPINEI ' COURT OF TAX APP~..lLI QUEZON CITY lvlANILJ-i. STOCK EXCHANGE, INC ., Pe titioner, - versus - C. T�� .CASE No . 2223 � C:Of.1HI~SIONEH OF INTERNAL .REVENUE, Respondent . x- - - - - - - - - -;c RES 0 LUTI 0 N This is in connection with a motion to dismiss the petition for review filed by responde nt Commissioner of Internal Revenue on May 3, 1971 on the grounds of lack of �jurisdiction and failure to state a cause of action. It appears that petitioner, through its auditors, Sycip, Gorres, Velayo & Co . , wrote a let ter dated Hay 26, 1969 to respondent requesting exemption from the duty of filing the annual income tax return and the pay- ment oi' income tax for being � a busines:;; league, chamber of commerce or board of trade in accordance vli th the. provisions of Section 27(f) of the Tax Code, in relation to Section 24- of the Revenue Regulations No. 2 . In a letter dated February 5, 1971, respondent de- nied petitioner ' s request for exemption and ruled that petitioner is not a business league , chamber o:.::- co.mmerce or board of trade under Section 27(f) and ordered peti- tioner to 11fi le an income tax return after every calendar or fiscal year , in accordance with Section 4-6 of the Tax Code, as amended, and pay income tax on its net inc ome . 11

RESOLUTION - �I ' CTA CASE No . 2223 2 Considering said letter of respondent dated Feb- _. ruary 5, 1971 as a dec i ston, petitioner appealed the same to this Court by filing on Harcll: 4, 1971 a peti- tion for ' revievl. On May 3, 1971, respondent filed a motion to dis- miss the petition for revie111 on the ground~ that this Court laclcs jurisdl ction over the appeal and that the petition for review does not state a cause of action. He contends that the ruling contained in his letter dated February 5, 1971 that petitione r is not a business league , chamber o~ commerce or boar.d of trade as co.ntem- �plated under Section 27(f') and that it is not exempt from tax on its net income , i s not a dec i sion appealable to this Court within the purview of. Section 7(1 ) of Republic Act No. 1125. He argues that t his is not a case involv- ing a disp uted assessment and , citing the case of Feli- pe B. Ollada vs . Court of Tax Appeals , et al. ( 99 Phil. 604) as authority , concludes that this Court has no juris- diction over the same . On the other hand, petition~r in its opposition to the motion t o dismiss contends tl}at the ruling of respond- ent fall under the clause "or other matters arising under the National Internal Revenue Code 11 in Section 7(1) of Republic Ac t No. 1125. It explains that said ruling �ordering petitioner to file an income tax return and pay a tax on its net income .is of the same nature as a deci- � , ~----~~--

RESOLUTION - CTA CASE No . 2223 3 s ion on a disputed assessment which constitutes a final determination of its status and liability f.:or income tax purposes . (Pp . 3-4, Opposition to Notion to Dismiss . ) FiIna1l"'Y , peti t .ioner contends that the ruling infringes upon the right of petitioner to be exempted from filing .I income ta."<: return iind _. p..,y:ing j_ncome .t-.x. 'vJe are in accord with respondent that this Court has no jurisdiction over the case and that the petition for review states no cause of action. The main conten- tion of petitioner t~t the ruling of respondent appealed from in this case falls under the clause in Section 7(1) of Republic Act No . 1125 11or other matters arising under the National Internal Revenue Codeu, is without merit . The term ttother matters" mentioned in Section 7(1) of Republic Act No . 1125 has been interpreted to include cases of the sam\3 nature as disputed assessments and re- funds of intexnal revenue taxes, fees or surcharges im- posed by the National Internal Revenue Code. nNote that the lav.1 gives to the Court of Tax Appeals exclusive appellate juris- diction to revietv the decisions of the Collector- of Internal 1,1evenue , the Commis- sioner of Customs , and the provincial or city Boards of Assessment Appeals . Note also that in defining the cases that ID<:tY be reviewed the laitl begins by enumerating them and then adds a general clause per- taining to other matters that may aris e under the National Internal Revenue Code, the Customs law and the ssessment Law . This sho\vs� that the 1other matters' that may come under the general clause should be of the same nature as � t hose that have p.receded t hem aj!plying the rule of' co.ns- struction known as eiusdefll ge,neris. In

� RESOLUTION - CTA CASE No. 2223 other words, in order that a matter may come under the general clause, it is neces- - sary that it belongs to the same kind or class therein specifically enumerated. Otherwise, it should be deemed foreign or extraneous and is not included. 11 (Ollada v . Court of Tax Appeals, 99 Phil . 604, 609-610.) To the same effect is the decision .in Acting Col- lector of Customs v. Court of Tax Appeals, 102 Phil.- 241+, vJherein it was held : rtit will be noted that the final senten ce of pa~agraph 2 of this action 7, 'or �other matters arising under the Customs Law or other law or part of law administered by the Bureau of customs', comes after an enumeration of the class of cases cognizable by the court of Tax lLppeals, namely, those involving liabi- , lity for customs duties, fees or other money charges, and as contended by re- spondent intervenor, by the doctrine of ejusdem generis, in order that the . ' other matters arising under the customs lavJ or other law or part of law adminis- tered by the Bureau of customs' .may come within the jurisdiction of the Court, they should involve also li~bility for pa~ment of money to the Government (see Ollada vs . Cogrt of Tax Appeals, et al., L99 Phil. 6dt/, penned b:_r Nr . Justice F'elix Bautista ~.ngelo, squarely inter- preting the provisions of the. aforequoted 'Section 7(2) of li.ep o Act No . 1125). 11 The salient characteristic of disputed assess - mepts and refunds is that they involve the legality of a tax collection: i �n the first, payment of a defi - nite s urn as a tax th-:::t t has already accrued and deter- mined is demanded; while in the second, rei~bur!?ement of payments of a tax illegally or erroneously collected is sought. - They do not involve mere interpretations

:RESOLUTION - . CTA CASE No � . 2223 i 5 of a tax law before a demand for payment of a defi- nite amount as a. tax that has already accrued and determined has been made . Actions merely seeking an interpretation of a tax lavJ due to differences of opinion between the taxpayer and the Con~issioner of Internal Revenue , which is the essenc.e of this peti- tion , are ~ot of the same nature as actions on dis - puted assessments or refund . They are more in the na tt.ire of actions for declaratory relief which is barred by Act 3736, as amended by Commonwealth Act No . 55, prohibiting actions for declaratory relief in cases involving internal revenue taxes . As -we said in La Perla Cigar and Cigarette Factory, et al . , vs. The Secretary of Finance and the commissioner of Internal Revenue ( CTA 1892, Resolution- May 29, 1968 ) ; ilThere seems to be nothing in the provisions of Section 7 of Republic Act No. �1125 that confers jurisdiction on this Court to entertain petitions which are substantially in the form of actions for declaratory relief. Said section vests this Court with jurisdiction to review by appeal ' de- cisions of the Commissioner of In- ternal Revenue in cases involving dis- puted assessments , refund on .internal revenue taxes , _fees or other charges, penalties imposed in relation th~reto, or other matters arising under the National Internal Revenue Code or other law or part of law administered by the Bureau of Internal Revenue .' I

RESOLUTION - CTa CASE No . 2223 6 Disputed assessments and refunds presup- pose the accrual of a tax incident that calls for interpretation of a statu- tory provision which of course precludes petitions \vhich are in substance for ' declaratory relief. To be in keeping \vith this spirit the jurisdiction of this Court as regards 1other matters ' should be' interpreted as likewise pre- cluding petitions which are essentially for declaratory relief. At any rate, there is �nothing in section 7 from which we can clearly infer an intention to abrogate the policy categorically de- clared in Act 3736., as amended by Com- monwealth _ct No. 55, prohibiting ac - tions for declaratory relief in cases involving internal revenue taxes, fees and charges. A departure from a poli- cy is generally expressed in clear and unambiguous language." The purpose of Act 3736, as_ amended by Common- wealth Act 55, is obviously to prevent delay in � t he collection of taxes upon which the Government depends for its very existence ( National Dental Sup- ply Co. vs. Meer ; 90 Phil . 265, 269), and there is good authority to the effect that neither the Rules of Court nor Republic- Act 1125 has superseded it . (Rodriguez vs. Blaquera, G. R. No . 1-13941, Septem- ber 30, 1960.) One may well imagine what overlapping, repetitious and. cumbersome incidents can arise in the collection of taxes if every taxpayer \vere al-. lowed to bring to this Court actions �for declaratory relief in anticipation of an impending assessment.

RESOLUTI ON - CT.t CASE No . 2223 7 �~� .::IER~FORE , this petition is hereby dismissed f or l ack. of jurisdic tion on the Pl rt of this Court . S0 OHDEl.iED . uezon Ci t y , June 21 , 1971 . ill�it� LI ,L_ -t ~esidin~:kA~ ~ISL~ 0 R. ALV ~~ If l�10N 1 . 1.TV..ANC Er;jA As s o c iat e Judg~~ - Assoc iate Judge