CTA Case No. 4997 (Resolution)

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY FERNANDO C. DESCALSOTA, C.T.A. Case No. 4997 Petitioner, - versus - THE HONORABLE COBBISSIOHER OF INTERNAL REVENUE, REGIONAL DIRECTOR OF REGION XI and FRANCISCO H. TEHALA, ACCTG. CHIEF, COLLECTION EHFORCEBEHT UNIT, Respondents. X- - - - - - - - - - - - - - X RESOLUTION Presented bezore Us zor resolution is respondent~s Motion to Dismiss the instant petition zor review on the grounds that it states no cause of action since the reliefs prayed for are already moot and academic and the Court has no jurisdiction over the case. The antecedents oz the case as gathered from the records are as follows: Respondent issued Assessment Notices Nos. FAN- 1-80-86-000276 and FAN-4-80-86-000277 both dated January 20~ 1986 against Bay Integrated Stevedoring and Arrastre Corporation <BISACOR> pertaining to its 1980 deficiency income tax of P472~233.02 and deziciency percentage tax oz P47~871.18~ respectively for a total amount of P520~104.20. The said notices have become final and executory hence~ respondent issued Warrants of Distraint and/or Levy against the corporation~s properties. However~ the 1023

RESOLUTION - C.T.A. Case No. 4997 - 2- warrants could not be served against the corporation �or it had ceased operation and no properties o� the corporation can be �ound to answer �or its tax obligations. Upon veri�ication o� the Articles o� Incorporation o� BISACOR, respondent discovered that the incorporators have unpaid subscriptions to its capital stock in the amount o� P750,000.00. Herein petitioner, Fernando Descalsota is one o� the stockholders who have unpaid subscriptions to the capital stock o� the corporation in the amount o� P62,250.00 <p. 139, BIR records). Considering that the said unpaid capital stock subscriptions are receivables of the corporation and form part of its assets which creditors including the government, can proceed against to satisfy their claims, respondent demanded from petitioner the payment of P62,250.00, to be applied against BISACOR's tax liabilities. Petitioner refused to pay the same alleging that he had already waived his shares of stocks in favor of another and therefore can neither be held liable for the unpaid subscriptions nor for the unpaid taxes of the corporation <p. 185, BIR records>. However, no documents can be presented by petitioner in support of its contention. Accordingly, respondent issued Warrant of Distraint and/or Levy against petitioner's properties <p. 171, BIR records). The warrant was duly served and petitioner's property was thereafter sold at public auction (p. 53, CTA records>. Petitioner, through counsel, �iled the instant petition �or review on June 7, 1993 praying �or temporary restraining order, injunction and alternative prayer �or annulment o� sale <pp. 1-5, CTA records>. Respondent countered with the herein Motion to Dismiss <pp. 43-52, CTA records). Jurisdiction o� the court over the subject matter is con�erred by the sovereign authority which organizes courts <Pomeroy's Code Remedies, 492>. Jurisdiction o� a particular action is acquired by the �iling o� pleadings which shows the case to be within the general class o� 102

RESOLUTION - C.T.A. Case No. 4997 - 3- cases which the court has jurisdiction to hear and determine <21 C.J.S., 122). Republic Act No. 1125 has con�erred jurisdiction to the Court o� Tax Appeals over cases involving tax matters, to wit: SEC. 7. Jurisdiction. The Court o� Tax Appeals shall exercise exclusive appellate jurisdiction to review by appeal, as herein provided - (1) Decisions o� the Commissioner o� Internal Revenue in cases involving disputed assessments, re�unds o� internal revenue taxes, �ees or other charges, penalties imposed in relation thereto, or other matters arising under the National Internal Revenue Code or other law or part o� law administered by the Bureau o� Internal Revenue; XXX XXX XXX In relation to the above, Section 11 o� R.A. No. 1125 provides: SEC. 11. Who may appeal; e��ect o� appeal. Any person, association or corporation adversely a��ected by a decision or ruling o� the Commissioner o� Internal Revenue, the Collector o� Customs or any Provincial or City Board o� Assessment Appeals may �ile an appeal in the Court o� Tax Appeals within thirty days a�ter the receipt o� such decision or ruling. No appeal taken to the Court o� Tax Appeals �rom the decision o� the Commissioner o� Internal Revenue or the Collector o� Customs shall suspend the payment, levy, distraint, and/or sale o� any property o� the taxpayer �or the satis�action o� his tax liabilities as provided by existing law: Provided, however, that when in the opinion o� the Court the collection by the Bureau o� Internal Revenue or the Commissioner o� Customs may jeopardize the 102

' RESOLUTION - C.T.A. Case No. 4997 -4- interest o� the Government and/or the taxpayer the Court at any stage o� the proceeding may suspend the said collection and require the taxpayer either to deposit the amount claimed or to �ile a surety bond �or not more than double the amount with the Court. A cursory reading o� the �oregoing provisions o� law would immediately disclose that the instant petition �or review does not �all within the ambit o� this Court's jurisdiction. What is sought by petitioner in the case at bar, inasmuch as the property distrained/levied upon had already been sold at public auction, is the annulment o� said sale on the ground that he cannot allegedly be held answerable �or BISACOR's corporate tax liabilities since he has ceased to be a stockholder o� the corporation when he waived his shares o� stock in �avor o� another who assumed the payment o� the unpaid capital stock subscription. There is no tax assessment that is being disputed in this case. Questions pertaining to the de�iciency assessment can nowhere be �ound. In �act, the assessment has become �inal, executory and demandable. Action to en�orce collection thereo� had been actually e��ected with the auction o� petitioner's property by respondent. 1026

RESOLUTION - �' C.T.A. Case No. 4997 - 5- WHEREFORE, the Court - hereby resolves to dismiss the instant petition �or review �or lack o� jurisdiction. SO ORDERED. Quezon City, Metro Manila, December 16, 1993. ERNESTO D. ACOSTA RAMON 0. DE VE A GRUBA Associate Jud e Judge