CTA Case No. 126 (Resolution)

ftEPUBLIC OP THE PHILIPPINES COURT OF TAX APPEALS MANILA LI M T.LO , DY HENG and DEE HUE , Petitjoners , _. - versus - C. I.A .. C SE NO. 126 THE COLLECTOR OF INTE L REVENUE , Respondent. x- - - - ~ - - ~ - ~ ~ - - ~ ~ x ES0 L UT ~0 N This is a pet5t~on for review of the dec{s{on of the Collector of Internal Revenue requirj_ng the pet~tioners , L"m r � o ; Dy Hen and Dee Hue , to pay the sums of �946 . 25 , � 1 , 663 .. 16 and ~5 , 242 . 36 , respe c t~ve1y , as manufacturers ' fixed and percentage taxes , surcharge and penalty imposed by the National Internal Revenue Code .. The case was orig{nally instiiuted 5n the former Board of Tax Appeal s wh5 c h dismissed the appeal and aff "rmed tho dec "s{on of the respondent . (See B ~ T ..A. Case No . 102, Dec ember 13 , 1~52 . ) On December 22 , 1952 said pet{tioners filed a ~ot{on for reconsideration wh~ch was deni_ed by the Board on Dec ember 29 , 195�2.. On February 2 , 1953 , the pet. tioners appealed to the Supreme Court , whic h appeal w s dism~ssed w~thout pro - judi_c e on Mar c h 30 , 1954 (G .. Ro No. L- 6470 , March 30 , 1954 . ) The dec ision of the Supreme Court bec ame final and executory on ril 29 , 1954o The mot5ons of peti- t i oners for re5n s tatement of the case ~n the Supreme ourt were denied on the ground that said motions were f.i_1ed long after the resolution of Mar c h 30 , 1954 , dis- �

RE OLUTION C. T. � C SE 0 126 2 missing the appeal in said case without prejudice , had become final . \Jhen the Supreme Court dismissed the case without prejudice for lack of jurisdiction , the provisions of xecutive Order No . 401 -A, series of 1951 in re - gard to appeals from the decisions of the defunct Board of Tax � ppeals having been invalidated by said . Court (University of Stoo Tomas v. Board of Tax p- . peals , G� � � No . L- 5701 , June 23 , 1953) , petitioners were left free to institute the proper judicial pro- ceedings in a court of competent jurisdiction after complying with the requisites provided by law. The appeal of petitioners from the decision of the Board ' of Tax ppeals was dismissed on larch 30 , 1954 , which dismissal became final and executory on April 29 , l954o Republic ct No . 1125 , creating this Court , not having as yet been approved at the time , the sole remedy of petitioners was to pay the taxes assessed against them, file a claim in writing for refund thereof with the Collector of Internal Revenue with- in 2 years after pa~1ent , and , within the same period , with or without a decision being rendered by the Collector, institute an action for recovery in the proper Court of First Instance. (Sec . 306 , National Internal evenue Code . ) This was the sole remedy provided by law in case a taxpayer desired to contest in court the validity of an internal revenue tax which he believed to be erroneously or illegally col - lected. The said remedy being exclusive , no other �;::-

:\ESOLUTION C. T. A. C' SE NOo 126 3 remedy could be substituted for ito The records do not show that petitioners took any step to comply with the requirements of Section 306 of the Revenue Codeo Instead , they waited until May 5 , 1955 , when they filed with this Court the present petition for review , or about ten months after the organization of t hi s Court o Republic Ac t No. 1125 creating this Court was approved and took effect on June 16 , 1954. Section 7 of said Act confers upon a taxpayer the ri ght to appeal from a decision of the Collector of I nternal Revenue without first ' paying the tax , and sec tion 11 provides that su c h appeal must be filed with thi~ Court within 30 days after receipt of the decision . Obviously , the petition for review in the instant case filed with this Court on May 5 , 1955 , was filed out of time (the de cision of re spondent having ~een . I rendered sometime in 1952) and may be dismis s ed motu proprio by this Court for lack of jurisdic tion . The fact that the appeal to the former Board of Tax Ap- peals was filed on time , and fro m there it was elevated to t he Supreme Court which dismissed the appeal with- out prejudice , did not have the effect of perpetuating t he right of petitioner to institute in this Court proc eedings for the review of the decision of respon- dent . This has been t he view consistently adhered to in various cases already decided by this Court. (See Jaime Bauti s ta v. Co l l~c tor of Internal Revenue , Co T. A o No . 39 , June 20 , 1955; Sta . Clara Lumber Co o,

RESOLUTION C. T. A. C SE NO o 126 4 Inc . Vo Collector � of Int . Rev., c. T. A. No. 91 , Sept. 20 , 1955; Ipekdjian Merchandising Co �. , Inc., c. To A. No . 107 , Oc t . l , 1955; Marsman Development Co . v . Collector of Int . Revo , C. T. Ao Nos . 116 & 117 , Nov . 14 , 1955. ) Considering , however$ the confused situation caused by the invalidation of the provisions of Executive Order Noo 401-A regarding appeals from the decisions of the Board of Tax Appeals to the Supreme Court and the c onsequent dismi ssal by said Court of various tax ca s es appealed to it , we have taken quite a liberal view of the question relative to the period within whic h such cases may be institu - ted in this Court . We have held that in such c ases the petitions for review of the decisions of the Col- lector of Internal Revenue could be filed with this Court within 30 days fromv:;uly 21 , 1954 , when it was formally organized with the appointment of two of its Judges and t he adoption by it (provisionally) of the rules of the Board of Tax Appealso We quote from a decision in a case similar to the instant c ase: "With the creation of this Court on Jui)e 16, 1954 , a new remedy was made available to the petitioner , i . eo, to ' file an appeal in the Court of Tax Ap- peals within t hirty days after the re- ceipt of su c h decision or rulin~ .' (Sec - tion 11 , Republic Ac t No . 1125. ) Con- sidering the c ircumstanc es of the instant case , the petitioner could have availed itself of this new remedy , and for reasons of equity , this Court by a unanimous c on- currence of its members , has resolved that the thirty (30) day period within

RESOLUTION C. T. A. C SE NO . 126 5 which to appeal to this Court _in cases of similar nature , should be counted not from the receipt of respondent ' s decision dated ~ovember 5 , 1951, or of the Supreme Court 's resolution of March 30, 1954, dismissing petitioner's appeal without prejudice , but from July 21 , 1954 , when this Court was already regularly functioning with the appointment of its two Judges and its Clerk of Court and with the adoption by it in the interim of the ules and Regulations of the de- funct Board of Tax ppeals for the guid- ance and observance of taxpayers who would like to question the decisions of the Collector of Internal evenue. X X X X "In the case at bar , inasmuch as petit~oner Stao Clara Lumber Co ., Inc . filed its petition for review only on arch 5, 1955, or almost 9 months after the creation of this Court and far be- yond July 21 , 1954, when this Court was ready and open for business , we are of the opinion that the same was filed be - yond the reglementary period within which to perfect an appeal to this Court , as fixed by Section 11 of � epublic ct No . 1125r (Sta . Clara Lumber Co., Inc . v� . Coll~ctor of Internal Re venue, Co T. � No . 91 , Sept . 20, 1955� see also �,larsman Development Co . v . Collector of Internal evenue , C. T. � Nos o 116 & 117, No vo 14 , 1955. ) This case is exactly on all fours with the cases already decided by this Courto ~e find nothing of record which would justify the application to this case of a different rule . It is argued that petitioners could not have filed with this Court a petition for review within 30 days from July 21 , 1954 , because on July 3, 1954 , they filed a motion for reinstatement of the case with the Supreme Court and the case was decided only on February 11, 1955. The motion for reinstatement was filed with the Supreme Court solely for the purpose

RESOLUTION Co T. A. CASE NO o 126 6 of seeking a review of the case on the merits by said Court under Section 21 of Republic Act No . 1125, authorizing said Court to decide on the merit s all cases decided by the former Board of Tax ' ppeals and thence appealed to the Supreme Court and were then pending in that Court at the time of the approval of said Act on June 16 , 1954. The motion for reinstate - ment was filed long after the decision of the Supreme Court had become final and executory. It was admitted- ly a futile attempt to revive what had long been pro- nounced dead. For this Court to consider the filing with the Supreme Court of a motion for reinstatement of a case that had been previously dismissed by said Court, and had long become final , as a justification for the filing of petitions for review beyond the legal period , would do violence to the law which prescribes a certain and definite period within which appeals mu st be perfected . If the view of petitioners is correct, the law would be rendered nugatory. In the case of a decision of the Gollector of Internal Revenue which has become final because no appeal has been filed with this vourt within 30 days after receipt of the decision , the taxpayer concerned could , if we are to believe petitioners in this case, by the simple ex- pedient of merely filing a request for reconsideration , say after one year , revive his right to appeal . ,Je find no sanction for it in law or in equityo Finally, it is alleged that to dismiss the present petition for review would be to require the parties to

� -S LUTIO C. T. � u E N � 126 7 litigate anew on the same issue, which is contrary to the spirit of Section 2, ule 1 of the ules of Court , requiring courts to assist the parties obtain a speedy �and inexpensive suitso Under the law, the petitioners herein may pay the taxes assessed against them , request refund thereof within 2 years after payment , and appeal from the decision of the Collect- or of Internal evenue within the time prescribed by law, if the claim for refund is deniedo That this remedy is still available to petitioners may be ad- tnitted; but the existence of another remedy and the conse quent delay and expense to be entailed where the improper remedy is to be dismissed are not valid reasons for this Court to disregard the plain and spe- cific provisions of law. Our sole function is to interprete the law; we can not legislateo FO THE F REGOI -1G CONSIDE. TION~ , the herein petition for review is hereby dismissed with costs against petitionerso ~ anila, January 31 , 1956.