G.R. No. 258947 - Commissioner of Internal Revenue vs. Court of Tax Appeals, 2nd Division

On October 30, 2012, QL Development, Inc. (QLDI) received a Letter of Authority (LOA SN eLA2010000021857) covering taxable year (TY) 2010.
On November 28, 2014, the Commissioner of Internal Revenue (CIR) served a Preliminary Assessment Notice (PAN) with Details of Discrepancies; QLDI submitted its reply on December 15, 2014.
On December 12, 2014, the CIR issued a Formal Assessment Notice/Formal Letter of Demand (FAN/FLD) with Details of Discrepancies; QLDI did not file a protest within 30 days.
The CIR issued a Final Decision on Disputed Assessment (FDDA) dated February 11, 2015, received by QLDI on March 3, 2015. QLDI requested reconsideration on March 30, 2015, which the CIR denied in a Decision dated February 4, 2020, thereafter demanding payment of deficiency taxes and compromise penalties for TY 2010.

On June 30, 2020, QLDI filed a Petition for Review with the CTA Second Division, challenging the CIR’s February 4, 2020 decision and asserting that the CIR’s right to collect had prescribed. On March 5, 2021, QLDI filed a Motion for Early Resolution of the Issue of Prescription with a motion to defer pre-trial.
By Order of February 1, 2021, the CTA Division submitted the prescription issue for resolution. On June 7, 2021, it granted QLDI’s motion, held that the CIR’s right to collect expired five years after December 12, 2014, and cancelled the TY 2010 assessment.
The CIR moved for reconsideration. On December 11, 2021, the CTA Division denied the motion, approved QLDI’s surety bond, and enjoined the CIR from collecting the deficiency taxes by distraint, levy, or otherwise.

On March 29, 2022, the CIR filed a Rule 65 Petition for Certiorari and Prohibition directly with the Supreme Court, with an urgent prayer for a Temporary Restraining Order (TRO) and writ of preliminary injunction to enjoin the CTA Second Division from proceeding with CTA Case No. 10291 and from enforcing the prohibition against tax collection.
The CIR alleged grave abuse of discretion and lack of jurisdiction in the CTA Resolutions dated June 7 and December 11, 2021, contending these were interlocutory orders and that the CTA Division lacked power to suspend or enjoin tax collection.

Whether the CIR’s Rule 65 Petition is the proper remedy for assailing the CTA Second Division’s Resolutions.
Whether the CTA Second Division had jurisdiction to decide the prescription of the CIR’s right to collect taxes under the NIRC and RA 1125, as amended.
Whether the CIR’s right to collect deficiency taxes for TY 2010 had already prescribed.
Whether the CTA Second Division validly enjoined the CIR from collecting taxes under its injunctive powers.