CTA Case No. 32 (Decision)

r , RE UBLIC OF THE PHILIPPINES COURT OF TAX APPEALS MANILA L .CI::L:C.TO T . VIDUY$. , C. T. ih C SE ~ifO . 32 .Petitioner, - versus - COLti;CTOr;. O:i!, ..L IHT._.I'.~Ji .t<..e.VEl~-u.i:l , Deputy Collector of Internal He. venue, and r.:uJ.;Ic- i1.L Tri.b.~u.rw:.;R of San Fernando, La Union, Respondents . x- - - - - - - - - - - - - - - - -x DECISION This is an appeal interposed b:y h.arcelino T. Viduya to recover from the respondents the sum of �943 . 20 which he has paid to the rrspondent Iv.unicipal Treasurer of San Fernando, La Union , by vJay of co1TI9ensating tax . It appears that on November 7, 1952, David H. Sencin- diver , Jr ., a member of the staff of the tlmerican ~mbassy in the Philippines, brought from the United States a 1950 I.:odel Juick Sedanet bearing Lot or Eo . 59877521.~, which he had acquired for his pers onal use in Virginia and registered \~ith the Lotor Vehicles Division of that State in his own name (.i!..xhibit C-1) . Upon its arrival in the ~:)hilippines , the vehicle vJas re- leased to David H. Sencindiver, Jr . b/ our customs authorities vdthout requiring him to pay the com9ensatinr; tax prescribed under section 190 of the ~Jational Internal Levenue Code , he being �a citizen of the Dnited States and member of the staff of the merican Embassy in the Philippines and therefore exempt from such tax. On ::ovember 7, 1952, Javid II . Sencind.iver , Jr . registered his autoraobile vJith the Lotor Vehicles Office for which he vJas

.uhGISIUX - c . 'I' . li . c ~-.t~ :ro . 32 . - 2- issued the correspondinG certificate of registration , Ioxhibit D-1, and a 118FL11 plate reserved for members of the diplomatic corps and other a�-'encies of the U. ~; . Government in the t'hil- ippines . On .Jecember 4 , 1953 , Sencindiver sold the veh::..cle to the petitioner herein , L arcclino 'I' . Viduya . 'l'he buyer immediately recistered the transfer in his name by obtai.ninc: from the Lotor Vehicles Office the certificate of r"'t:;istration, Jxb.ibit F . On June 22, 1954, the Bureau of :::uternal n.evenue demanded from the petitioner the payment of :..-943 . 20 as compGnsatin[! tax on thE� automobile v1hich the latter had bought from David II . Sen- cindivcr , Jr ., pursuant to thE:: orovision of section 190 of the 1'iational Internal hevenue Code as iL1plem<:;nted by BIF. General Cir- culars ~~os . V-145 and V- 152, datE'd l'Tovember 20, 1952 and Larch 10, 1953, respectively . 'l'he tax demanded , as computed and itemized b:. the Eureau of Internal Revenue , is as follows: IIBlue Book" value ~;1 , 320 . 00 0 � � � � � � � � � � � � � � � � � � � � Less : 157~ thereof ......... . ...... . _ _128 . QQ il.dd ; zre ic;ht from the ~�est Coast ~1 , 122 . 00 to the Philippines �������������� _ _1..2Q . OO \~1 , 572 . 00 or Total landed cost �������������������� P.3 , 144. 00 305; tax due thereof ............. On October 8 , 1954, after an exchange of correspondence VJith the r~�spondent Collector of Internal Lsvenue , the petitioner paid the amount demanded under protest as evidenced b;;. the r .. c:::ipt , .c.:xhibit G. On October 19, 1951.., the petitioner appealed the case to this Court for revievJ vJithout first filint; a formal claim for

.J~CISIUH - C. 'l' . i. . C~{�"� IJO . 32 . - 3- r.sfund of the amount in questioD from the resyor:dents as re- <mired under sectLm 306 of the ;.�.ctional Internal Revenue CodE: . 'l'he issues raised in this appeal are as follovJs: 1. �dould payment under protest vdthout a formal claim for refund by the petitioner of the tax ~aid by him to the rcsp"Jndent be sufficient compliance V�li th the provision of section 306 of the .,c:tional Internal 1 avenue Code so as to confer jurisdiction upon this Court to hear and decide this ap_t?eal? 2. Could the purchase of the automobile in ques- tion by petitioner from ,.; avid H. Sencindiver, Jr ., a member of ths staff of the Qmorican .tmbassy in the :Philipp ines be considered as an 11importation or pur- chase from without the .Philippines" as contemplated by section 190 of the l.ational Internal : ....v~nue Code? The petitioner claims that the protest he had made upon payin~ the amount of i~/+3 . 20 to the I:unicipal TrsasurEr of La .� Union as -well as the lettl:..rs �which he had i"ritten to the rss- pondent Coll ector of Internal H,,venue protesting ar�ainst the assessment before paying the same , are equivalent to a formal claim for r E.;fund as required by section 306 of the 1:ational In- te.cnal _,evenue Code and therefore viith such ) rot e>st and letters, he has sufficiGntly complied vJith the conditions precedent essential to confer upon this �Jlmrt jurisdiction to hear and decide his appeal. h.oreover , petitioner claims that tho ques- tion of jurisdiction was nEver raised before this Court by res- pondents in a motion to dismiss nor in their ansvJer to tl1e.... _t?eti- tion for revievJ and , the refore , such omissiom constitute a vJaiver of objection to jurisdiction on their part . 'I'he Suprer.1e Court ha:t occasio�'1 to decide a similar issue in the case of �.ee Poco c: Co . vs . Juan Posadas Jr . 64 Phi l. 640- 666 , i~here it held that:

.. , ;).i,l;C::!:~-IJlJ - c . �.c . n . Cl:t.rl.. riO . 32 . - 4- 11'.l.'he prot... st , hovJsve r , is not sufficient . The law requires the taxpayer to regu:,;.st the decision of th8 collector , and such requirement is not merely directory but charly mandatory , as may be inferred from the words : 1and shall thereU'_Jon requ st the decisicm of the Collector of Internal l-i.e venue . 1 'fakin[ into consideration that the protest is en- tered for the sole ~:JUrpose of preservint; the tax- payer ' s rie:ht to question the lecality of the tax , hence thi:: necessity of the latter requestinL the de- cision of thE Collector of IntJrnal =�-cvenue , and in order that said official may have an oppor�tunity to rEnder a decision vJ:Lth knov;ledce of the facts of the case , the taxpayer must state in his pet:!. tion his re::~sans for questianine; the lerality of thE: tax and for demand inc the r-:-fund of the amount paid by him � 11 11x x x x x Failure to com)ly ':!ith this re- quis ite is fatal because it has been repeatEdly held that no action for the recovery of a tax :)aid can 1:e maintained vJithout strictly complying 11ith each and every one of the condit i ons requirEJd by the lavJ to that effect . n The Supreme Court, in interpr�;tint,; section 306 of the r.a- tional Internal Revenue Code in th6 subsequent case of Santiago Berme jo vs The Collector of Internal Revenue , GJ-,:. . J:Io . :U- 3029 , July 25 , l95D, reiterated its ruling in the bee :t-aco case thus : 11'l'he lav-J cl arly stipulates that after payine:; the tax , the citizen must submit a claim for n.i'und before resorting to the courts . The idea probably is , first , to afford the collector an opportunity to correct the action of subordinate officers; and second , to notify the Government that such taxes have been questioned , and the not ice should then be born6 in mind in estimat- int; the r evenue avai1able for <:XpEJnditure . revious objections to the tax may not take the place of that claim for refund , because there nay be some reason to beJ.iev.a that , in payinc , the taxpayer has finally come to realize the validity of the assessment . b.nyYJay , strict compliance v�ith the conditions iml)Of.d for th�' return of revenue collected is a doctrine consistently applied here and in the United States . " (see also P . J . Kiener Co ., Ltd . vs . SaturninoDavid , Colle ctor of Internal ~.eVI-'nUe , G.E . 1~0 . ::.. -5163 , i.prH 22 , 1953) . ~~e find no merit in the contention of petitioner that the failure on the part of respondents to raise before this Court the question of jurisdiction in a motion to dismiss or in their

DECISIJL - C. ':' . A. Cb.C � :Tu . 32 . - 5- ans�Jer to the petition for reviovJ , constituteS a v�aiver of s uch objection on their part . Objecti ons to the timeliness of a motion to dismiss for laclc of jurisdiction are unavail- ing , since the court may raise such issue at any time even on its ovm motion . (p . 215 , Vol . I , 1952 Ldition , �Loran 1s Comment s on th~ :.uh r of Court . ) Havin:_ thus decided that this Court is without juris- diction to ent~rtain the pr,sEnt appeal for failure on the part of petitioner to file a formal claim for refund with the Bureau of I!1ternal r.evenue after .paying the amount of �943 . 20 , as required under rection 306 of the ,;ational Internal :2-e - venue Code , v;e deem tt therefore unnecessary to decide the second issue bearinc on the merits of the case . HIETJ!Jl"OiE , let this case be, as it is hereby dismissed , for lack of jurisdiction, vJith costs against pE titionE:Jr . r-::anila, February 15 , 1955 . I-- I concur: /~~~~ ,.. LAI.I.!i.dO N �;.._. PresidinG Judt;e