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A question of jurisdiction

In order for a court to hear and decide cases, it must have jurisdiction over the subject
matter, the cause of action and the parties involved. This is a must for all the courts, be
they trial courts, such as the Municipal Trial Court (MTC) or the Regional Trial Court
(RTC), or specialty courts, such as the Sandiganbayan or the Court of Tax Appeals
(CTA). The same rule applies to the highest court of the land, the Supreme Court (SC),
subject, of course, to certain exceptions.

The issue of jurisdiction is such an essential element that the courts can, motu propio,
dismiss a case if they find that they have no jurisdiction over the case filed before them.
The Supreme Court, in a particular case, has stated the rule that courts are bound to
take notice of the limits of their authority and they may, by their own motion, even though
the question is not raised by the pleadings or suggested by counsel, recognize the want
of jurisdiction and act accordingly by staying the pleadings, dismissing the action, or
otherwise noticing the defect, at any stage of the proceeding (Ace Publications Inc. v.
Commission of Customs and the Collector of Customs, 11 SCRA 153).

This particular principle on jurisdiction was again put to a test when the CTA dismissed a
case involving a protest on local tax assessment, initially filed with the RTC, for lack of
the latters jurisdiction (CTA AC No. 66 dated October 1, 2010). In this case, the
petitioner-taxpayer was assessed by the city treasurer of Manila for local business tax,
business permits and other fees for 2007. The taxpayer was likewise assessed another
local business tax based on Section 21 of the Revenue Code of the City of Manila.

The petitioner-taxpayer filed a protest letter alleging that it is not liable to pay the amount
assessed under Section 21 and that the same constituted double taxation. Thus, the
petitioner, paid, under protest, on January 15, 2007, the amount assessed under Section
21 of the Revenue Code of Manila.

Due to the failure on the part of the City of Manila to render a decision on the protest
filed by the petitioner-taxpayer, the latter, on April 17, 2007, filed a petition for review
with the RTC in Manila, raising the issue of its liability to the local business tax imposed
under Section 21 of the Manila Revenue Code. With the RTC ruling in favor of the
taxpayer and ordering the city government of Manila to refund the amount paid under
Section 21 of the Revenue Code of the City of Manila, the city treasurer of Manila filed
an appeal before the CTA.

The CTA, after examining the evidence on record, ruled in favor of the city treasurer of
Manila, stating that the RTC has no jurisdiction over the petition for review filed by the
petitioner-taxpayer.

Based on the records of the case, the taxpayer was assessed for deficiency local tax,
including the assessment made under Section 21 of the Revenue Code of Manila, which
was paid under protest on January 15, 2007. By virtue of Section 195 of the LGC, the
city treasurer of Manila had 60 days from January 15, or until March 16, 2007, to decide
the protest. Since the city treasurer failed to act on the protest filed, the taxpayer had 30
days from March 16, 2007, or until April 16, 2007, to file an appeal with the RTC.
Because the petitioner-taxpayer filed his appeal only on April 17, 2007, one day beyond
the 30-day period provided under Section 195 of the LGC, the RTC no longer had the
authority to rule on the validity of the assessment.

It has been settled in a number of SC decisions that the perfection of an appeal in the
manner and within the period prescribed by law is not only mandatory but jurisdictional
as well, and where the lack of jurisdiction is clearly apparent in the face of the pleadings
filed with the trial court, the action or case may be dismissed, motu propio, by the
appellate court, even if the case had been elevated for review on different grounds.
Prescriptive periods should, therefore, be properly observed.

The author is a senior associate of Du-Baladad and Associates Law Offices (BDB Law).
If you have any comments or questions concerning the article, you can e-mail the author
at kristine.casa-siervo@bdblaw.com.ph or call 403-2001 local 340.