Title
Acoje Mining Co., Inc. vs. Commissioner of Internal Revenue
Case
G.R. No. L-19378
Decision Date
Mar 27, 1968
Acoje Mining failed to pay its 1957 income tax installment by the May 15, 1958 deadline, making the entire tax due and subject to interest from that date, as ruled by the Supreme Court.
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Case Digest (G.R. No. L-19378)

Facts:

  1. Statutory Background:

    • Section 51 of the National Internal Revenue Code (NIRC) governed the assessment and payment of income tax. It provided for the payment of taxes in installments, with specific deadlines for payment and penalties for non-compliance.
  2. Petitioner's Obligation:

    • Acoje Mining Company, Inc. (petitioner) was required to file its income tax return for 1957 by March 1, 1958. However, the Bureau of Internal Revenue (BIR) granted an extension until April 30, 1958, on the condition that 50% of the tax due be paid by May 15, 1958. Failure to comply would result in a 5% surcharge and 1% monthly interest on the entire tax due.
  3. Failure to Pay:

    • The petitioner filed its return on April 24, 1958, but failed to pay the 50% due by May 15, 1958. On May 24, 1958, the BIR issued an assessment notice allowing the petitioner to pay in two installments: the first by June 15, 1958, and the second by August 15, 1958. The petitioner still failed to pay.
  4. Payment and Dispute:

    • On March 16, 1959, the petitioner paid P1,303,693.98, covering the tax, surcharge, interest, and compromise penalty. However, the Commissioner of Internal Revenue demanded an additional P17,228.77, arguing that interest should be calculated on the entire tax due from May 16, 1958, to March 16, 1959.
  5. Legal Proceedings:

    • The petitioner contested the additional interest, arguing that the second installment was not due until August 15, 1958, and no notice or demand was made. The Court of Tax Appeals (CTA) ruled against the petitioner, holding that the entire tax became due on May 15, 1958, and interest accrued from that date.

Issue:

  1. Primary Issue:

    • Whether the petitioner's failure to pay the first installment of its 1957 income tax on May 15, 1958, made the entire tax due and demandable, thereby subjecting it to interest on the full amount from that date.
  2. Subsidiary Issue:

    • Whether the petitioner effectively elected to pay its tax in installments, and whether the BIR's notice and demand were necessary for the entire tax to become due.

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Conclusion:

The Supreme Court upheld the CTA's decision, ruling that the petitioner's failure to pay the first installment by May 15, 1958, made the entire tax due and subject to interest from that date. The Court rejected the petitioner's arguments regarding the necessity of notice and demand, emphasizing the automatic nature of the tax obligation under Section 51 of the NIRC.


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