CTA Case No. 2901 (Decision)

--~----_,..,..---......,....-----.,......,.......,....--,. - -.--~- ----~--=--=�=�=-�-=<.=..=.~.::..--;;;-...~..- - --- =-= - ��= - =~=~-=:.:_ J'E I' lJl\:.I C 0~;� 'frll1. P.l!!.l' 'i'IN~l.~ COUR1, C~~� 'J /'..:..: A.PP�'7 Al S OU~ZON CH'il .r .. c:c .r EJ;\ l'.! ~; L:tf\CE I<Ii\~; :~J (> .~ ,: -� �ere I�J, 1 etiti.c ner , �- v e rE;us ~.. h:.L~/ ::-::t.1 S , Respondent . X- - - - - - - - - - - - - - X D }; (; I Di.s:)ut. od bj peti t i o ne r.~ ..,;a:l Grace Ein i.n g Co:q)l.)ro.tion i s the ri s ht of r espondent Cnm~~~sioner of I nte rn a l chrc mj to o re r � moved t r am petitioner ' s ~ inn si t e . pr inci r<:cl offi c e ;_:nd addrccss at. Carmen , Cage.yan de: Oro Cit~ . On OctotPr 2~ , 197 6 1 iL p a i d to ~ h e municipal treasurer of ~ . l u ~ij i a , M i s2mi~ Gr i onta l, the amount -- - �- of i:� ? l, 06 7 . ?.0 re[)r'2~> r:n tin e! the <~d Vi..1...l--o-n--"�m� :-. a~< on 1 , ::;oo l o c ated i n the same mun ic i pa l ity . Of fic i a l Re c eipt ~o . 538678 7 u (P r o vi nc ial / City T r easurer ' s Gener a l 288

�~------- --- �---.- --- � DEC I EllC N CTA C~S E NO . 290 1 - 2- Re c e i p t) da t e d Cc tcber 22 , 1 9 7 6 1 e videncing payme nt of t he t ax , was d u l y is s ued by Mu nici pal Treasure r Luci o L . J a mp i t as dep uty of t h e p r ovi n cia l tr e asur e r of Misa mis Ori e n t a l . ( p . 11 , DI R Re c ords .) The amo unt of ~ 21 , 06 7. 2 0 was ac t u a lly receiv e d on Z. cb ru a r y 25 , 1 9 7 7 b y t iv.: co l.l c~ cti o n aqe nt of t h e Bur eo. u o f Int e rna l P.evenu e o f .t�.l u b ij i d , f��Ji ::>um is Or ien- t a l , wh en Munici pa l Tre a sur e r Luci o L . J ampi t r em i t ted t he t a x t c h im un ddc a mun ic ipa l v o ucher a l so da t e d Feb r ua ry 2 5 , 1 9 77 . In r emitti ng the sa i d amoun t , the munici pa l v o uc her s t a t e s : To r em i t t a nce of ~d v alo r em 1>2 1 , 067 . 2 0 ~ ax wh ich wa s in ad v er t ent l y pa i d in t:. h e Of fice: of t h e ;;; n ici p a l T r eas ur e r unde r UR No . 5 3 B6 7 C7 da ted Oc t . 22 , 1 9 77 v1h .i.ch umo unt s h o u l d h a ve heen � to t h e BI R Co ll c ct ic n Ag ent , h e n ce t h is re'n it.t an ce Bec a use o f pe ti t i o n e r ' s f a ilu r e t c p ay th e a d Y.�l ~?X.�.i!! t ax of P 21 , 0 6 7 o 2 0 wi t hin tr1e peric d pr c=s c r i bcd by U1P r: r o v i:.:; i on cf t.r1e U lE.' n .Se ct. i. cm 24.5 (now :-:J ect:i o n 25 6 } o f th e � Na ti o n a l Intern a l Rev e nu e Code , r e spon d ent in a l c t tc:: r dated i\uc;us t. 1 8 , 1 9 77 , wh ich ~,; a s r e c e iv ed by pe titi o n er o n Au gus t 2 3 , 1 9 7 7 , dema nded f r om Sa n Gr ace Mi ning Co r p or a ti on the s um of P 5 , 26 6 . 8 0 r ep re- s en t i ng 2 5% surcha r g e f o r la t e pay me n t , de t a il s o f whic h ar c as f e ll ows : 2S9

DECISION - C'l'A Ci\SE U) . 2 9 01 - 3- Gross Sales of 1,500 tons Pl , 053 1 360 . 00 Chromi t�2 Ore . 02 Mu ltip li ed by th e ad valorem p 21,0 67. 2 0 t ax r a te 5 , 266 .. 8_Q Ad v alorem taxes due Add: 25% surcharge for P 261 334 0 00 late payment _ _}1,0 67 .00 Total ad valorem ta xes due Less : Amo unt paid un de r p 5,266.80 O . I . l'lo . 5652519 da�t.ed Feb . 25 , 1 9 77 R\ L!\NC.i~ OF ~,D Vl ,LO R!:i:!'l T /,XE:) DUE P.ND C OLLECTIB:~,E vvvvvvvv vvvvv On Augus t 24 , ~ 9 77, pcti tioner n:oquc;sJced respondent , t hru the Regiona l Director of R~venue Region No . 10-A , fo r r eccnside~aticn cf the assessmen t of ~5 , 266 . 80 1 allet;ing thot. it \vas n c.. t l a t e j_n paying the ad v a lorem tax due the Government . Fctitione~ ' s req u est for reccnsideraticn was , however , denied by r Pspond ent on Augus t 26 , 1 9 7 7G Hende this ap pea l . tf ter respondent has asked for the dismissal of th is ca se f o r l ack of inter P~ t on the 9ar t of petitioner c o1m~>e l or r ep r esent.a tive to a[.;pe ar in G.ny of the schedu l ed h~ar i ngs , petitione r on June 16, 1979 fi l ed a written man if estntion submitting the case f o r decision without triG.l as follows : (pp o 43-44, CTA Records . ) That , as the main issue in the abov e - entitled ca se is purel y a ques tion of l aw , to wit , whether Petit ione r, who, instead of paying with t he Offic e of the Rev e nue Collector cf the Bureau of Internal Revenue, the Ad-Va lor em Tax fer its mineral pays to the Of fice of the ~unicipa l Tre~surer , 290

DECISICN - CTA CA~E NC . 2901 - 4- should be penalized with a surcharge of 25% of the Ad-Valorem Tax , in view of the l ate remittanc e by the Office of the Muni- c ipal Treasurer of the amount it has c ollected fr om Petitioner to the Office of the Bureau of Internal revenue Collector, it is therefore submitting the case to the Honorab le Ccurt f o r its res o lution a nd/o r decision on said question of l aw without anymore going to trial. Petitioner admlt.s at l e ast "chat it paid its ad v a lor em t ax t o the wr ong office or gover~ment o ffi ci al . Oddly , h ow Pvcr , it .blames the Office of th e Muni c ipa l Tr easurcr 1 t o ~1om payment was wrong full y made by i t, as th e~ cause of its failur E'; to pay i �ts ad valorc-;m tux within the per io d prescri bed b y l aw . And averring t hat it shou l d not be pena li zed wi th the surcharge of 25% " in view of th~~ late r emittan c e by the Office of the Munici p a l Treasu r~r of the amount it has collected fr om Petiti o ner ," inf e rc n ti e:1ll y 1 it would seem t.hat. the municipa l treasurer shoulJ ~ e held l iab le for being r emissed in ~ottransmitting the t ax on ti me to t h e c ollection agent of r e spondent � .s a ptly stated by r espondent in paragraph 7 of hi s answ er, the Bur ea u of Internal Revenue is the so l e age n c y of the Go v ernment incharge of c oll e cti n g a nd r ec eiving payments of all inte:nal r ev enue taxes , fees or c ha r ges , includinl) ad val<_?L�!!! t a x . .Section 3 of the th en Nationa l Internal Revenue Code , wh i c h was i n effe c t at the time the 25% surcharge in q u es t ion was 2Dl

DECI Eil U ;' - CTA CAS E NO . 29 01 - 5 .� assessed a nd demanded, expres sly prov ides: SEC . 3 . Power s and duti e s of Bure au . - The p ow e r s and d u ties of the Bur e a u o f Int erna l Re v e nue shall c ompr e he nd the asses smen t and coll e ctic n of all nat i o na l inter na l reve nue t axes , f ees , a nd cha r ges , a nd the e n forc ement of a ll forf e iture s , pena l ti es , and f i nes con- n e cted th e r e wi th, incl ud ing th~ ex e cution o f judgments i n a ll cases d e cided in its favor b y th e Cou rt of Tax Appea ls and t h e o rd inary c c u r t s . Sa i d Bur e au s h a ll a lso g iv e e f fect to a nd a dmin i s t er t he supervisory and po lic e p o we r conf erred to i t by t h is Cod e o r other . \�:h il e 1.nO.c r the o l d provis i c n of .Se ct io n 6 of t h e Nationa l Interna l Rev enue Code , prov incia l and cit y treas ure r s , a nd t hei r deput ie s (munic ipal treas ure r s a r e depu t i es uf pr�cv incial t r eas urer s ) w e r ~? t'ne (.eput:Les of t h e Cor.u d ss i one r C)f I nter n a l Re v enue for the c o l cc t i c n o f n a ti ona l int_rna l r e v enue und the enfo r ceme n t of a l l la ws f a ll ing with i n the j ur iud i cticn of th8 Bureau cf In t0rna l Reve nue , Re- publi c -�-.ct t\o . 2 G5 5 , a p prov ed o n J une 1. 0 , 1 96 0 , de l e t ed t h i s p r ovis i o n cf the l a w a nd c reated i n the Bure a u o f I n �te r na l Rc~vernw p o si t i.o n s of c o ll ect:l.on a g e nts fo r different. cit:.ies c. nd tt. un i c i pa l itJ.os of the Phi l ippines . S ect ic n 5 of sa id Rep u blic Act No . 2 655 prov i dc:s : ~_;E c . 5 o ll.ny a nd a ll n .� :f: eren c es in th e Na ti ona l I nt e r nal Rev e n ue Code to the p r o- vi nci a l a nd city treasure rs a nd th e ir de- p u t ies , the i r functio ns and dut ies in c o n- n e c tio n wi t h i n t e r n al r e v e nu e shal l fr o m t he a p p r ova l of this Ac t b e d e em e d to r efer t o t he co llecti o n a g e nts o f th e Bur e a u of I nt e rna l Reve nue o

DECISI CN CTA CASE NG . 2 9 0 1 - 6- Si nce p rovincia l a nd c i t y trea s u rers , and their d e - p u t i es , a re .!2� l o n g er d e [JLl t i e s o f th e Comm is s i o ner of I nt e rn a l Rev e n 1e for th e c o l l e cti on o f n a ti on a l i nte r n al r ev enu e t a xes , fe es a nd charg es a nd the en- f o r c eme nt of 2 l l l a ws f a l l ins; ':J i t Li n th e~ j u ri sd ic t i on of th e Bu r eau of I n t erna l Re v e nue , p aywe nt of th e .s.Q v2 l o r em tax in ques t io n i n the C f f ice of t he .!'-�1u n i c i pa l rL' r easu r e r is no t paymen t: t o t~hr~ Bu rea u of Int.crna l Re v ~n u e as c on t enp i ated un der t h e provi s i o n o f Sect ion 24 5 of fue th e n Na ti o n a l I n t er n a l rre v e n ue Code e Ac - c o r ding ly 1 t h e i rnpos i ti cn on pe tition er o f t.h e amount o f P5 , 266 o8 0 rep r esenting surcharge fo r l ate paym8nt o f i �ts <1c1. ya lo r E:~!:r! t ax c_;n 1.:he 1 , 500 te n s of c hrom.i te o r e is i n accorda nce with l aw . And the contentio n of petit i one r that i t ac t ed in gooa f:J i U1 in paying i ts _?.d v u l orem ta x t o the rnuni - ci pa l trea s u r e r of Alubi j i d , His ami s Ori e n ta l, is o f n o morne n~ . It is a lr eady sett l ed th a t !~.c:J d f a. i �th i s p r escr ibed f or l ate paymen t o f t he ad v a l o r em tax unde r the t he n Sect io n 24 5 (n ow Secti cn 256 ) of the Na ti ona l I nt e rna l Reve nu e Code . Sec t i o n 24 5 do es not me r e l y v e:::;t i n ~:he Cornrnir;sioner of Int e rn a l Rt::venue the a u thcrity o r discretion to impose t h e 25% s u rch argeo The s a me is imp os e d by law it s e lfo I n t h is r espec t it is a n a logo u s t o t h e 2 5% s urc ha r ge pr es cr ib ed f o r 2~3

.. �~----------�-� ----�~----- -------�-- -......... .� I . DE C ISIOI\i CTA CA~E NC . 290 1 - 7- f a il ure to pay the 11 percentage tax on any bus i ness 11 withi n the time fixed by l aw (Sec t ion l83La7 of the then National Internal Revenu e Code ), the c ollection of which has been held to be mandatory and on whi ch t he Commissioner of Internal Revenue has no discretion . (Repub l ic Cement Corporat i on vs . Commissioner of I n ternal Revenue , L-20660 , J u ne 13 , 1968 , 23 SCRA 96 7 , ci ting Lim Co Chu v s . Posadas , 47 Ph i l . 460; Koppel (Phi l. ) , In c . vs . Coll e c~or of Internal Revenue , 87 Phil . 34 8 ; Repub l ic vs . Luz c n Industrial Corporation 1 02 Phil . 189 , 1 93 0 ) Consequen t ly, even if petitioner a c ted in good faith in paying to the municipal trea surer of Al u bi jid , i t is still li ab l e t o pay r 0sponde nt Comrni ss ioner of lnt e r� n c:~ l Revenue th e arnc�u nt o f F5 , 2C-6 o ~-~o as surcha rge for l ate payme nt of its ad valorem tax on 1 , 500 tc\ns of c hrcni te ore . ~HE~EFO RE , thP deci s i c n a ~p eal ed from is affirmed and petitioner San Grace Mining Corporution is orde red ( 30 ) day s after f in ,::J J. i ty of th.i s j udgrnen t. vli th costs . Gu ezo n City , Metro Man il a , ~e ptembcr 1 7, 19 7 9 . I CONCUH :) Q#'t~zt;:_~'~'L/ ~;�>.f-v-l.h~~~ '_1,.C~, _(;\�IL. LE' R Act i ng P resi d ing Jud ge '--- ! , /:). ---..., a-;; - �L . ,C CONST.Z\ 1-i'TE !:- . RO.AL UIN Assoc i a t e Judge 294