CALTEX PHILIPPINES VS CA

G.R. 925585 MAY 8, 1992

Davide, J.:
FACTS:
In 1989, COA sent a letter to Caltex directing it to remit to OPSF its collection of the additional tax on
petroleum authorized under PD 1956 and pending such remittance, all of its claims from the OPSF shall
be held in abeyance. Petitioner requested COA for the early release of its reimbursement certificates
from the OPSF covering claims with the Office of Energy Affairs. COA denied the same.
ISSUE:
Whether or not petitioner can avail of the right to offset any amount that it may be required under the
law to remit to the OPSF against any amount that it may receive by way of reimbursement.
RULING:
It is a settled rule that a taxpayer may not offset taxes due from the claims that he may have against the
government. Taxes cannot be the subject of compensation because the government and taxpayer are
not mutually debtors and creditors of each other and a claim for taxes is not such a debt, demand,
contract or judgment as is allowed to be set-off.
The oil companies merely acted as agents for the government in the latter’s collection since taxes are
passed unto the end-users, the consuming public.

DOMINGO VS GARLITOS
G.R. NO. 18993 June 29, 1963
Labrador, J.:
FACTS:
In Domingo vs. Moscoso, the Supreme Court declared as final and executor the order of the lower court
for the payment of estate and inheritance taxes, charges and penalties amounting to Php 40,058.55 by
the estate of the of the late Walter Price. The petition for execution filed by the fiscal was denied by the
lower court. The court held that the execution is unjustified as the Government is indebted to the estate
for Php262,200 and ordered the amount of inheritance taxes can be deducted from the Government’s
indebtedness to the estate.
ISSUE:
Whether or not a tax and a debt may be compensated.
RULING:
The court having jurisdiction of the Estate had found that the claim of the Estate against the government
has been recognized and the amount has already been appropriated by a corresponding law. Both the
claim of the Government for inheritance taxes and the claim of the intestate for services rendered have
already become overdue and demandable is well as fully liquidated. Compensation takes place by
operation of law and both debts are extinguished to the concurrent amount. Therefore the petitioner
has no clear right to execute the judgment for taxes against the estate of the deceased Walter Price.