Title
Source: Supreme Court
Commissioner of Internal Revenue vs. Court of Tax Appeals
Case
G.R. No. 203054-55
Decision Date
Jul 29, 2015
CIR defaulted in CTA pre-trial; SC ruled certiorari proper remedy, found CTA abused discretion, remanded for evidence presentation.

Case Summary (G.R. No. 203054-55)

Procedural Background and Claims

On March 30, 2011, CBK Power Company Limited filed a judicial claim in the Court of Tax Appeals (CTA) for a tax credit certificate amounting to P17,784,968.91, citing unutilized input taxes for the period from January 1 to March 31, 2009. This case was registered as CTA Case No. 8246. A subsequent claim was filed on June 28, 2011, for another amount of P31,680,290.87, relating to the period from April 1 to June 30, 2009, constituting CTA Case No. 8302.

Pre-Trial and Consolidation

After the procedural steps were initiated through summons and answers filed by the petitioner’s counsel, both cases were consolidated, and a pre-trial conference was scheduled. The initial sessions encountered difficulties due to the absence of the petitioner’s attorneys, leading to a motion by the respondent to declare the petitioner in default.

Default Orders and Responses

On December 23, 2011, the CTA issued an order allowing the respondent to present evidence ex parte due to the petitioner’s failure to attend relevant conferences. Following this, the petitioner filed a motion to lift the order of default, arguing that the reasons for non-attendance were justifiable and not indicative of intent to evade court procedures. The CTA denied this motion on April 19, 2012, emphasizing the procedural rules regarding attendance at pre-trial conferences.

Jurisdictional and Procedural Issues

The petitioner contended that the CTA gravely abused its discretion by imposing default on a party that had actively engaged in the case and promptly filed necessary documents. The primary argument against the CTA’s refusal was the characterization of its orders—specifically, whether the CTA’s orders were final or interlocutory. The petitioner maintained that the ex parte order constituted an interlocutory order, which typically lacks appealability under existing legal frameworks.

Legal Framework and Jurisprudence

In addressing the nature of the orders, the Court found support in previous jurisprudence distinguishing final judgments from interlocutory orders. An interlocutory order does not conclude a case but rather leaves open issues for determination. The CTA's actions relating to the default order were thereby identified as interlocutory and subject to review through a petition for certiorari, emphasizing that procedural errors should not impede the substantive merits of a party's claims.

Discretionar

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