Facts:

The case involves CJH Development Corporation (petitioner) and the Bureau of Internal Revenue (BIR), Bureau of Customs (BOC), and District Collector of Customs Edward O. Baltazar (respondents). The events leading to this case began with Proclamation No. 420, issued by then-President Fidel V. Ramos on January 24, 1996, which established a Special Economic Zone (SEZ) in Camp John Hay, Baguio City. This proclamation granted the SEZ various incentives, including tax exemptions for businesses operating within its jurisdiction. However, a significant portion of this proclamation was later declared unconstitutional by the Supreme Court in the case of John Hay Peoples Alternative Coalition v. Lim, which ruled that the tax exemptions were null and void from the outset. This decision became final on March 29, 2005.

Following this ruling, the Office of the City Treasurer of Baguio sent a demand letter to CJH on January 16, 2004, for real property taxes amounting to over P101 million, ...

Facts:

Background of the Case:

1. Proclamation No. 420 was issued by then President Fidel V. Ramos to create a Special Economic Zone (SEZ) in a portion of Camp John Hay in Baguio City. Section 3 of the Proclamation granted the SEZ the same incentives enjoyed by the Subic SEZ, including tax exemptions and duty-free importations of raw materials, capital, and equipment.

Issuance of Regulations: 2. In line with Proclamation No. 420, the Bureau of Internal Revenue (BIR) issued Revenue Regulations No. 12-97, and the Bureau of Customs (BOC) issued Customs Administrative Order No. 2-98 to implement the rules within the Camp John Hay SEZ.

Unconstitutionality of Section 3: 3. Section 3 of Proclamation No. 420 was declared unconstitutional in part by the Supreme Court in John Hay Peoples Alternative Coalition v. Lim. The Court ruled that the second sentence of Section 3, which granted tax exemptions, was null and void. The rest of the Proclamation remained valid.

Demand for Taxes: 4. Following the Supreme Court's decision, the Office of the City Treasurer of Baguio sent a demand letter to CJH Development Corporation (CJH) for unpaid real property taxes amounting to P101,935,634.17. The BOC also demanded P71,983,753.00 in duties and taxes for importations made by CJH from 1998 to 2004. The BIR treated CJH as an ordinary corporation subject to regular corporate income tax and VAT.

CJH's Challenge: 5. CJH questioned the retroactive application of the Supreme Court's decision, arguing that the assessments violated the non-retroactive principle under the Tariff and Customs Code. CJH filed a petition for declaratory relief, which the Regional Trial Court (RTC) dismissed, holding that the decision in John Hay Peoples Alternative Coalition applied retroactively and that declaratory relief was not the proper remedy.

Issue:

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Ruling:

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Ratio:

1. Declaratory Relief and Tax Assessments: Declaratory relief is not available to challenge tax assessments. Commonwealth Act No. 55, which prohibits the use of declaratory relief in tax cases, is still in effect. The proper remedy for a taxpayer contesting an assessment is to follow the administrative and judicial procedures outlined in the Tariff and Customs Code, including filing a protest and appealing to the Court of Tax Appeals.

2. Subject Matter of Declaratory Relief: The subject matter of declaratory relief must be a deed, will, contract, or statute, not a court decision. A court decision cannot be the subject of a declaratory relief petition. If a party disagrees with a court decision, the appropriate remedies are a motion for reconsideration, new trial, or clarificatory judgment.

3. Retroactivity of Judicial Decisions: The Court did not address the retroactivity of the decision in John Hay Peoples Alternative Coalition because the issue was already pending in another case involving CJH. The Court emphasized that the question of retroactivity should be resolved in that case.

Conclusion:

The Supreme Court denied CJH's petition, holding that declaratory relief is not the proper remedy for challenging tax assessments and that the retroactivity of the decision in John Hay Peoples Alternative Coalition should be resolved in a separate pending case.