Facts:

On May 10, 1956, Hao Giok San filed a complaint against Silverio Blaquera, the Collector of Internal Revenue, in the Court of First Instance of Cebu, presided over by Judge Jose S. Rodriguez. The case was docketed as Civil Case No. R4514. The complaint sought to enjoin Blaquera and his agents from collecting a total of P3,625, which included deficiency percentage taxes, surcharges, and penalties. The court issued a writ of preliminary injunction ex-parte on the same day after Hao Giok San posted a bond for the amount in question. On May 26, 1956, Blaquera filed a motion to dismiss the complaint, arguing that the Court of First Instance lacked jurisdiction over the matter and requested the lifting of the preliminary injunction. This motion was denied by Judge Rodriguez, and a subsequent petition for reconsideration was also dismissed. Consequently, Blaquera sought a writ of prohibition from the Supreme Court to restrain Judge Rodriguez from taking cognizance of the case, to pr...

Facts:

Initiation of the Proceedings

• On May 10, 1956, respondent Hao Giok San filed a complaint in the Court of First Instance of Cebu, 14th Judicial District, presided over by Judge Jose S. Rodriguez (respondent), seeking an injunction against the petitioner, Silverio Blaquera, Collector of Internal Revenue, and his agents.
• The relief sought was to enjoin the petitioner and his agents from collecting the deficiency percentage taxes, surcharges, penalties, and a compromise amounting to P3,625, and to prevent the levy or distraint on Hao Giok San’s properties.

Issuance of the Preliminary Injunction

• On the same day the complaint was filed, after the petitioner’s submission of a bond in the amount of P3,625, Judge Rodriguez ex-parte issued a writ of preliminary injunction in accordance with the relief prayed.
• The injunction was aimed at maintaining the status quo pending the resolution of the dispute about the collection of the disputed tax deficiency.

Petitioner's Motion and Subsequent Petition

• On May 26, 1956, the petitioner filed a motion to dismiss the complaint on the ground of lack of jurisdiction by the Court of First Instance to hear a case involving tax deficiency assessment.
• Despite the petitioner's motion and a subsequent petition for reconsideration, the respondent Judge denied the relief, prompting the petitioner to file the present petition seeking:
• A writ of prohibition to restrain Judge Rodriguez from taking cognizance of Civil Case No. R4514.
• A temporary injunction to prevent enforcement of the preliminary injunction issued.
• Eventually, a request to make permanent the writ of preliminary injunction issued by this Court.

Tax Assessment and Correspondence

• On November 12, 1955, Deputy Collector of Internal Revenue, Jose Aranas, communicated to Hao Giok San regarding his alleged short payment of percentage taxes.
• The report indicated a short payment on certain official receipts, attributing a deficiency tax amount of P2,900 with an additional 25% surcharge, leading to a total demand of P3,625.
• The message further warned of the enforcement of collection through summary remedies and potential prosecution for violation of the National Internal Revenue Code.
• Hao Giok San, via his counsel and through subsequent correspondence (on November 21 and December 19, 1955), contested the claim by insisting that he had fully paid the correct percentage taxes since the commencement of his business.
• The correspondence culminated in Hao Giok San resorting to filing a civil case to review and contest the collection measures, including any potential levy or distraint by the collector.

Jurisdictional Controversy

• The central dispute in the civil case was the question of whether the Court of First Instance of Cebu had proper jurisdiction over a matter that involves the collection of deficiency percentage taxes and the enforcement actions related thereto.
• The petitioner argued that, under Section 7 of Republic Act No. 1125, the subject matter—involving disputed tax assessments and related matters—must be exclusively reviewed by the Court of Tax Appeals on appeal.

Issue:

Jurisdiction of the Court of First Instance

• Whether the Court of First Instance of Cebu has the jurisdiction to try a civil case involving the contestation of the collection of deficiency percentage taxes and the enforcement of levy and distraint on Hao Giok San’s properties.
• Whether the Court of First Instance’s intervention in a case fundamentally involving tax assessments contravenes the exclusive appellate jurisdiction provided to the Court of Tax Appeals under Section 7 of Republic Act No. 1125.

Proper Remedy and Appeal Process

• Whether the relief sought by Hao Giok San in the civil action is the appropriate remedy for addressing a dispute over a tax deficiency assessment, or if such disputes should be resolved solely through an appeal in the Court of Tax Appeals.
• Whether the issuance of a preliminary injunction by Judge Rodriguez, and the subsequent refusal to lift it despite the petitioner’s motion and petition for reconsideration, was proper given the statutory allocation of jurisdiction.

Enforcement of Administrative Tax Collection Actions

• Whether the enforcement actions taken by the petitioner, pursuant to the communication from the Deputy Collector of Internal Revenue, are subject to judicial review in a trial court setting or should be exclusively a matter for appellate review by the Court of Tax Appeals.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)