Title
Auyong Hian vs. The Honorable Court of Tax Appeals
Case
G. R. No. L-25181
Decision Date
Apr 11, 1967
Petitioner challenged tobacco import forfeiture; Supreme Court ruled Court of Tax Appeals has jurisdiction to review legality and validity of seizure.
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Case Digest (G. R. No. L-25181)

Facts:

License Application and Expiration of Import Control Law: Petitioner Auyong Hian applied for and was granted four no-dollar remittance licenses to import Virginia leaf tobacco with an aggregate value of two million dollars. The application was filed on June 29, 1953, and approved on June 30, 1953, the day the Import Control Law (Republic Act 650) expired.

Arrival of Tobacco Shipment: On December 30, 1961, 600 hogsheads of Virginia leaf tobacco arrived in the Philippines aboard the SS Fernstate. The Collector of Customs of Manila refused to release the shipment, questioning the legality of the importation.

Mandamus Action and Jurisdictional Issue: Petitioner filed a mandamus action in the Court of First Instance of Manila (Civil Case No. 49639) to compel the release of the tobacco. On March 19, 1962, Judge Manuel Barcelona ordered the release of the tobacco upon the filing of a bond of P300,000. The Commissioner of Customs and the Collector of Customs challenged this order in the Supreme Court (G.R. No. L-19597), which ruled that the Court of First Instance had no jurisdiction to order the release of the tobacco and declared the importation illegal.

Seizure Proceedings: On November 8, 1962, the Collector of Customs initiated seizure proceedings (Seizure Identification No. 6669) against the tobacco. On April 23, 1963, the Collector declared the tobacco forfeited and ordered its sale at public auction.

Attachment and Injunction Proceedings: On May 13, 1963, Tomas Cloma initiated a separate civil action (Civil Case No. 53874) and obtained a writ of attachment over the tobacco. The Collector of Customs filed a third-party claim, but Judge Francisco Arca issued a restraining order preventing the sale. The Collector of Customs challenged this restraining order in the Supreme Court (G.R. No. L-21389), which ruled that Judge Arca had no jurisdiction over the matter.

Appeal to Commissioner of Customs and Court of Tax Appeals: Petitioner appealed the Collector's decision to the Commissioner of Customs, who affirmed the forfeiture on December 7, 1964. Petitioner then appealed to the Court of Tax Appeals, which dismissed the appeal on June 22, 1965, citing lack of jurisdiction due to the Supreme Court's prior ruling on the illegality of the importation.

Issue:

  1. Whether the Court of Tax Appeals has jurisdiction to entertain petitioner's appeal from the decision of the Commissioner of Customs.
  2. Whether the Supreme Court's prior rulings in G.R. No. L-19597 and G.R. No. L-21389 bar the Court of Tax Appeals from reviewing the case.
  3. Whether the importation of the tobacco was illegal and the forfeiture and sale were valid.

Ruling:

The Supreme Court held that the Court of Tax Appeals has jurisdiction to entertain petitioner's appeal. The Court set aside the resolutions of the Court of Tax Appeals dated June 22, 1965, August 31, 1965, and September 18, 1965, and remanded the case to the Court of Tax Appeals for further proceedings and decision.

Ratio:

  1. Jurisdiction of the Court of Tax Appeals: The Court of Tax Appeals has exclusive appellate jurisdiction over decisions of the Commissioner of Customs involving the seizure, forfeiture, and disposition of imported goods. The Supreme Court's prior rulings in G.R. No. L-19597 and G.R. No. L-21389 only addressed jurisdictional issues and did not preclude the Court of Tax Appeals from reviewing the administrative proceedings related to the importation.

  2. Issues Raised in the Appeal: Petitioner's appeal raised substantial issues, including the legality of the forfeiture, the classification of the importation as "relatively prohibited" or "absolutely prohibited," and the validity of the sale of the tobacco. These issues fall within the jurisdiction of the Court of Tax Appeals and require resolution.

  3. Administrative Proceedings: The Supreme Court recognized the ongoing administrative proceedings and the timely appeal filed by petitioner to the Commissioner of Customs and subsequently to the Court of Tax Appeals. The Court emphasized that the Commissioner of Customs and the Court of Tax Appeals have the authority to resolve these matters, even though the Supreme Court had previously declared the importation illegal.

In conclusion, the Court of Tax Appeals erred in dismissing petitioner's appeal for lack of jurisdiction and should proceed to resolve the issues raised in the appeal.


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