G.R. No. 136506 - Republic vs. Desierto

The case involves the estate of the deceased Juan de la Vina, represented by his judicial administratrix, as plaintiff and appellee.
The Government of the Philippine Islands is the respondent, acting as claimant and appellant, represented by the Solicitor-General.
The dispute arose over a claim filed by the Collector of Internal Revenue for unpaid income taxes allegedly due from the deceased's estate for the fiscal years 1919, 1920, 1923, 1924, 1926, 1928, 1929, 1930, and 1931.

The Collector of Internal Revenue filed the claim through the courts to collect back taxes from the estate.
The lower court ordered the estate, via its administratrix, to give priority to the payment of back taxes for the years 1926, 1928, 1929, 1930, and 1931, amounting to P6,265.25.
The court determined that the tax claims for the years 1919, 1920, 1923 and 1924 were barred by prescription under the six-year limitation rule set in section 43(2) of the Code of Civil Procedure.
The court also held that neither the 5 percent surcharge on the unpaid tax amount nor the 1 percent interest claimed could be collected, due to an exemption provided in section 9(a) of Act No. 2833 concerning claims on a deceased person's tax returns.

The judicial administratrix asserted that during the lifetime of Juan de la Vina, taxes for the years under dispute had been mostly paid except for the years 1928 and 1929.
It was argued that for 1928 no tax was due because of the extent of the income, and for 1929, a tax return was not submitted due to the taxpayer's ill health.
Despite these arguments, the administratrix did not challenge the court’s finding regarding the factual basis of the government’s claims, nor did she appeal the ruling ordering payment for the five specified years.

The primary factual matter is the acknowledgement that the government’s claim for back taxes, based on the evidence established, was undisputed by the administratrix.
Consequently, the sole issue for judicial review became whether the general prescription rules set forth in the Code of Civil Procedure apply to a government tax collection action in the context of an estate.

Whether the government's judicial action to collect back income taxes from an estate is subject to the six-year prescription period provided by the Code of Civil Procedure.

Does the application of the general law on prescription, particularly the six-year limitation, bind the government's tax collection actions?

Whether the principle that statutes of limitations do not run against the State—unless expressly provided by law—applies to actions for the collection of taxes filed through judicial channels.

Is the doctrine of sovereign immunity regarding prescription applicable in the context of this tax collection case?

Whether the three-year prescription period set out in section 9(a) of Act No. 2833 for the discovery of erroneous, false, or fraudulent returns extends to judicial actions for the collection of accrued income tax.

Should the action in court be conditioned on the discovery of the taxpayer’s erroneous return within three years, or is it exempt because it is a judicial collection?