Title
Blaquera vs. Rodriguez
Case
G.R. No. L-10935
Decision Date
Apr 28, 1958
Tax dispute over P3,625 deficiency; Court of First Instance lacked jurisdiction; Supreme Court ruled proper forum is Court of Tax Appeals.
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Case Digest (G.R. No. L-10935)

Facts:

  1. Initiation of the Case:

    • On May 10, 1956, respondent Hao Giok San filed a complaint (Civil Case No. R4514) in the Court of First Instance of Cebu against Silverio Blaquera, the Collector of Internal Revenue.
    • The complaint sought to enjoin the petitioner from collecting deficiency percentage taxes, surcharges, penalties, and compromise totaling P3,625, and from levying on Hao Giok San's property to satisfy the tax liability.
    • A writ of preliminary injunction was issued ex-parte by respondent Judge Jose S. Rodriguez upon Hao Giok San's filing of a bond.
  2. Tax Dispute:

    • On November 12, 1955, Deputy Collector of Internal Revenue Jose Aranas sent a letter to Hao Giok San demanding payment of P3,625 for alleged deficiency percentage taxes, including a 25% surcharge and a P50 compromise for late payment.
    • Hao Giok San, through counsel, denied liability, claiming he had paid all taxes in full and owed nothing to the government.
  3. Legal Proceedings:

    • The petitioner (Blaquera) filed a motion to dismiss the complaint, arguing that the Court of First Instance of Cebu lacked jurisdiction over the case. The motion was denied by Judge Rodriguez.
    • A petition for reconsideration was also dismissed, prompting Blaquera to file a petition for prohibition with the Supreme Court.
  4. Jurisdictional Issue:

    • The central issue was whether the Court of First Instance of Cebu had jurisdiction to hear the case, given that the matter involved the collection of deficiency taxes and the enforcement of tax laws under the National Internal Revenue Code.

Issue:

  1. Whether the Court of First Instance of Cebu had jurisdiction to hear and decide Civil Case No. R4514, which involved the collection of deficiency percentage taxes and the enforcement of tax laws.
  2. Whether the proper forum for resolving disputes over tax assessments and collections is the Court of Tax Appeals, as provided under Section 7 of Republic Act No. 1125.

Ruling:

The Supreme Court granted the petition for prohibition. It held that the Court of First Instance of Cebu lacked jurisdiction over the case. The proper forum for resolving disputes involving tax assessments, collections, and related matters is the Court of Tax Appeals, as explicitly provided under Section 7 of Republic Act No. 1125.

The Court set aside the orders of Judge Rodriguez and made the preliminary injunction issued by the Supreme Court permanent. Costs were imposed on respondent Hao Giok San.

Ratio:

  1. Exclusive Jurisdiction of the Court of Tax Appeals:

    • Under Section 7 of Republic Act No. 1125, the Court of Tax Appeals has exclusive appellate jurisdiction to review decisions of the Collector of Internal Revenue involving disputed assessments, refunds, penalties, and other matters arising under the National Internal Revenue Code.
    • The case filed by Hao Giok San involved a disputed tax assessment and the legality of enforcement actions (levy and distraint), which fall squarely within the jurisdiction of the Court of Tax Appeals.
  2. Improper Forum:

    • The Court of First Instance of Cebu is not the proper forum for resolving tax disputes of this nature. The filing of the case in the lower court was a procedural error, as the matter should have been brought before the Court of Tax Appeals.
  3. Judicial Efficiency and Legal Certainty:

    • The Supreme Court emphasized the importance of adhering to jurisdictional rules to ensure judicial efficiency and legal certainty. Allowing tax disputes to be litigated in improper forums would lead to confusion and undermine the specialized role of the Court of Tax Appeals.


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