A.M. No. RTJ-14-2369, RTJ-14-2372 - Department of Justice vs. Mislang

The petitioner, Demetrio R. Alcantara, is the registered owner of a 301‑square meter lot in Panorama Homes, Buhangin, Davao City, originally titled under Transfer Certificate of Title (TCT) No. T‑113015.
The respondents include the Republic of the Philippines through its agency, the Bureau of Internal Revenue (BIR) – Revenue Region No. 11‑B of Davao City – and its officials (namely Amerigo D. Villegas, Themistocles R. Montalban, Teodorica R. Arcega, and Jose C. Batausa), the Register of Deeds of Davao City, and Maximo Lagahit.

Alcantara filed his income tax returns for 1982 and 1983.
In subsequent years, particularly starting December 14, 1987, communications from the BIR notified him of a deficiency in his income tax and fixed tax, which included amounts for interest, surcharge, and compromise penalty.
Demand letters and assessment notices were issued on February 15, 1988, detailing deficiencies amounting to approximately P30,797.36 (plus additional amounts in separate demand letters), yet Alcantara did not respond.

On August 12, 1991, an official issued a Warrant of Distraint and/or Levy against Alcantara’s property, even though proper service was questionable since the taxpayer’s current whereabouts were not confirmed.
A Notice of Seizure of Real Property was subsequently issued, indicating that the property would be levied to satisfy the tax liability, with the address still reflecting his last known residence in Davao City.
Following the seizure, on May 4, 1992, a Declaration of Forfeiture was issued when no sufficient bid materialized at auction.

On May 13, 1993, a letter from a BIR officer triggered the cancellation of the original TCT No. T‑113015 by the Register of Deeds of Davao City and the issuance of a new title (TCT No. T‑195677) in the name of the Republic of the Philippines.
The BIR later conducted a resale auction pursuant to legal requirements under Section 217 of the National Internal Revenue Code.
On June 9, 1995, a public auction resulted in Maximo Lagahit emerging as the highest bidder, and a deed of sale was executed on June 29, 1995, accompanied by the issuance of a new title (TCT No. T‑244532) in Lagahit’s name.

In 1997, Alcantara filed a complaint in the Regional Trial Court (RTC) asserting that the series of administrative acts and subsequent transfers were illegal, irregular, and void due to the absence of due process.
He challenged the validity of the BIR’s assessment, the seizure and forfeiture proceedings, the subsequent sale, and the cancellation of his original title.
His complaint sought the nullification of the notices and deeds, a declaration of nullity of the titles issued, and an order for reconveyance of the property, including claims for moral, exemplary, attorney’s fees, and other damages.

The RTC initially dismissed Alcantara’s complaint, holding that the BIR relied on the address provided in the tax returns, and that due process was observed in the administrative proceedings.
The Court of Appeals (CA) later dismissed his appeal on two grounds: (a) lack of jurisdiction by the RTC as his complaint essentially challenged the tax assessment; and (b) failure to exhaust available administrative remedies as required by the tax laws.
It was underscored that, under the law, a taxpayer must first exhaust administrative remedies (by filing for reconsideration or a claim for refund) before resorting to judicial proceedings.

Whether the RTC had jurisdiction to try and decide a complaint that essentially challenges the validity of the tax assessment and collection procedures carried out by the BIR.
Whether the CA correctly dismissed the appeal on the basis that the RTC was not the proper forum for the issues raised.

Whether Alcantara’s failure to first resort to the administrative remedies—namely protesting the tax assessment or filing a claim for refund—rendered his judicial remedy premature and improper.
The impact of the finality provision in Section 229 of P.D. No. 1158, which deems an assessment unappealable once the prescribed period lapses without administrative protest.

Whether the Court of Tax Appeals (CTA) was the proper appellate body to examine the challenged issues regarding tax assessments and related administrative actions.
Whether the CA erred in ruling that the proper appellate forum for such disputes is exclusively the CTA, not the CA.