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II.
SUGGESTED ANSWER:
No. The CTA is devoid of jurisdiction to entertain appeaks from the decision
of the City Board of Assessment Appeals. Said decision is instead appealable to the
Central Board of Assessment Appeals, which under the Local Government Code,
has appellate jurisdiction over decisions of Local Board of Assessment Appeals, L-
50466, May 31, 1982).
CTA
2. Has the RTC jurisdiction over the collection case filed by the BIR?
Explain.
SUGGESTED ANSWERS:
Yes, the BIR is correct. In case where the estate has been distributed to the
heirs, the collection remedies available to the BIR in collecting tax liabilities of an
estate may either (1) sue all the heirs and collect from each of them the amount of
tax proportionate to the inheritance received or (2) by virtue of the lien created
under Section 219, sue only one heir and subject the property he received from the
estate to the payment of the estate tax. The BIR, therefore, is correct in pursuing the
second remedy although this will give rise to the right of the heir who pays to seek
reimbursement from the other heirs. (CIR v. Pineda, 21 SCRA 105). In no case,
however, can the BIR enforce the tax liability in excess of the share of the widow in
the inheritance.
1.) Yes, the CTA has jurisdiction over the case because this qualifies as an
appeal from the Commissioner’s decisions on disputed assessment. When the
Commissioner decided to collect the tax assessed with our first deciding taxpayer’s
protest, the effect of the Commissioner’s action of filling a judicial action for
collection is a decision of denial of the protest, in which event the taxpayer may file
and appeal with the CTA. (Republic v. Lim Tian Tend & Sons, Inc., 16 SCRA 584;
Dayrit v. Cruz, L-39910, Sept. 26, 1988).
2.) The RTC has no jurisdiction over the collection case filed by the BIR.
The filling of an appeal with the CTA has effect of divesting the RTC of jurisdiction
over the collection case. At the moment the taxpayer appeals the case to the Court of
Tax Appeals in view of the Commissioner’s filling of the collection case with the
RTC which was considered as a decision of denial, it gives a justifiable basis of the
taxpayer to move for dismissal in the RTC of the Government’s action to collect the
tax liability under dispute. (Yabes v. Flojo, 15 SCRA 278; San Juan v. Vasquez, 3
SCRA 92). There is no final, executory and demandable assessment which can be
enforced by the BIR, once a timely appeal is filed.
CTA
V.
SUGGESTED ANSWERS:
The CTA has jurisdiction over the case. The appealable decision is the one
which categorically stated that the Commissioner’s action on the disputed
assessment is final and, therefore, the reckoning of the 30-day period to appeal was
on June 9, 1997. The filing of the petition for review with the CTA was timely made.
The Supreme Court has ruled that the CIR must categorically state that his action
on a disputed assessment is final otherwise, the period to appeal will not commence
to run. That final action can not be implied from the mere issuance of a warrant of
distraint and levy. (CIR v. Union Shipping Corporation, 185 SCRA 547).
CTA
(b) Under the above factual setting, the taxpayer, instead of questioning the
assessment he received n 15 January 1996 paid, on 01 March 1996 the “deficiency tax”
assessed. The taxpayer requested a refund from the Commissioner by submitting a
written claim on 01 March 1997. It was denied. The taxpayer, on 15 March 1997, filed a
petition for review with the Court of Appeals. Could the petition still be entertained?
Answer:
(a) No. Before taxpayer can avail of judicial remedy the must first exhaust
administrative remedies by filing a pretest within 30 days from receipt of the assessment.
It is the Commissioner’s decision on the protest that give the Tax Court jurisdiction over
the case provided that the appeal is filed within 30 days from receipt of the
Commissioner decision. An assessment by the BIR is not Commissioner decision from
which a petition for review may be filed with the Court of Tax Appeals. Rather, it is the
action taken by the Commissioner in response to the taxpayer’s protest on the assessment
that would constitute the appeallable decision (Section 7, RA 1125).
(b) No, the petition for review can not be entertained by the Court of Appeals,
since decisions of the Commissioner on cases involving claim for tax refunds are within
the exclusive and primary jurisdiction of the Court of Tax Appeals (Section 7, RA 1125).
CTA
VIII
On June 1, 2003, Global Bank received a final notice of assessment from the
BIR for deficiency documentary stamp tax in the amount of P5 Million. On June 30,
2003, Global Bank filed a request for consideration with the Commissioner of
Internal Revenue. The Commissioner denied the request for reconsideration only on
May 30, 2006, at the same time serving on Global Bank a warrant of distraint to
collect the deficiency tax. If you were its counsel, what will be you advice to the
bank? Explain. (5%)
Alternative Answer:
The denial for the request for reconsideration is the final decision of the CIR. I
would advise Global Bank to appeal the denial to the Court of Tax Appeals (CTA) within
30 days from receipt. I will further advise the bank to file a motion for injunction with the
Court of Tax Appeals to enjoin the Commissioner from enforcing the assessment pending
resolution of the appeal. While an appeal to the CTA will not suspend the payment, levy,
distraint, and/or sale of any property of the taxpayer for the satisfaction of its tax liability,
the CTA is authorized to give injunctive relief if the enforcement would jeoperadize the
interest of the taxpayer, as in this case, where the assessment has not become final
(Lacsina Land Co. v. CIR, CTA Case No. 5777, January 4, 2000; See also Revised
CTA Rules, approved by the Supreme Court on December 15, 2005).
Alternative Answer:
I will advice the Bank to promptly pay the deficiency documentary stamp tax and
the interest charges to avoid any further increase in the tax liability. The Bank should
have appealed to the Court of Tax Appeals when the BIR failed to decide on its Request
for Reconsideration within thirty (30) days after the inaction of the BIR for one hundred
eighty (180) days or on December 31, 2003. The Tax Assessment has already become
final, executory an unappealable as that point (BPI v. CIR, G.R. No. 139736, October
17, 2005).
CTA
XII
If you were the judge, will you dismiss the case? (5%)
(NOTA BENE: This conepts pertains to the VAT law which is excluded from
the bar coverage, Guidelines for 2008 Bar Examination, June 15, 2006)
*2004*
CTA
X
A. On March 12, 2001, REN paid his taxes. Ten months later, he realized that
he had overpaid and so he immediately filed a claim for refund with the Commissioner of
Internal Revenue. On February 27, 2003, he received the decision of the Commissioner
denying REN’s claim for refund. On March 24, 2003, REN filed an appeal with the Court
of Tax Appeals. Was his appeal filed on time or not? Reason. (5%)
SUGGESTED ANSWER:
A. The appeal was not filed in time. The two-year period of limitation for
filing a claim for refund is not only a limitation for pursuing the claim at the
administrative level but also a limitation for appealing the case to the Court of Tax
Appeals. The law provides that “no suit or proceeding shall be filed after the
expiration of two years from the date of the payment of the tax or penalty regardless
of any supervening cause that may arise after payment (Section 299, NIRC). Since
the appeal was only made on March 24, 2003, more than two years had already
elapsed form the time the taxes were paid on March 12, 2003. Accordingly, REN had
lost his judicial remedy because of prescription.
B. A law was passed exempting doctors and lawyers form the operation of
the value added tax. Other professionals complained and filed a suit questioning the law
for being discriminatory and violative of the equal protection clause if the Constitution
since complaints were not given the same exemption. Is the suit meritorious or not?
Reason briefly. (5%)
SUGGESTED ANSWER:
No. The suit is not meritorious. The equal protection clause of the
Constitution merely requires that all persons subjected to legislation shall be treated
alike, under like circumstances and conditions, both in the privileges conferred and
in the liabilities imposed. The equality in taxation rule is not violated if classification
or distinction are made as long as the same are based on reasonable and substantial
differences. (Pepsi-Cola Bottling Co., Inc. v. City of Butuan, 24 SCRA 789 [1968]).
In the instantcase, the professions of doctors and lawyers are not principally
aimed at earning money but for the service of the people. The exemption granted to
doctors and lawyers from the operation of the VAT is justified, as it is not discriminatory
against the other professionals because they have reasonable and substantial differences
in the conduct of their professions.