Case Summary (G.R. No. 113459)
Applicable Law
The core statutes referenced include Section 116 of Presidential Decree No. 1158, which outlines the percentage tax obligations on dealers in securities and lending investors, and Republic Act No. 1125, which created the Court of Tax Appeals and defines its jurisdiction over revenue matters.
Revenue Orders and Denial of Request
The Commissioner of Internal Revenue issued Revenue Memorandum Order (RMO) No. 15-91, mandating a 5% lending investor's tax on pawnshops based on their gross income, following an interpretation that the nature of pawnshop business aligns with that of lending investors, as defined in the Tax Code. Respondent Leal sought reconsideration for both RMO No. 15-91 and Revenue Memorandum Circular (RMC) No. 43-91, which imposed a documentary stamp tax on pawn tickets, but her requests were denied, culminating in BIR Ruling No. 221-91.
Initiation of Legal Proceedings
On March 18, 1992, Leal filed a petition for prohibition against the Commissioner at the Regional Trial Court (RTC), resisting the implementation of the revenue orders. The Commissioner contested this with a motion to dismiss, arguing that the RTC lacked jurisdiction, as the case fell under the exclusive appellate jurisdiction of the Court of Tax Appeals for such revenue matters.
RTC Decision and Appeal
The RTC denied the motion to dismiss, asserting that the revenue orders represented new taxes outside the purview of the Tax Code, which only Congress could impose. The Commissioner then sought relief from the Court of Appeals through a petition for certiorari and prohibition, challenging the RTC's ruling. However, the Court of Appeals dismissed this petition, ruling that the RTC’s denial could not be immediately appealed to it but rather to the Supreme Court.
Jurisdictional Issues and Court Determinations
The case hinged on the interpretation of jurisdiction regarding the review of the revenue orders. The Supreme Court clarified that while the Court of Appeals has the original jurisdiction to issue extraordinary writs, such jurisdiction is not exclusive to it — both the Court of Appeals and the RTC share concurrent original jurisdiction when it pertains to certiorari, prohibition, or other writs.
Exclusive Appellate Jurisdiction of the Court of Tax Appeals
The Supreme Court reaffirmed that the jurisdiction over the decisions made by the Commissioner of Internal Revenue is held by the Court of Tax Appe
...continue readingCase Syllabus (G.R. No. 113459)
Case Overview
- This case revolves around the legality of Revenue Memorandum Order (RMO) No. 15-91 and Revenue Memorandum Circular (RMC) No. 43-91 issued by the Commissioner of Internal Revenue (CIR) imposing a 5% lending investor's tax on pawnshops.
- Respondent Josefina Leal, the owner of a pawnshop, contested these tax orders, ultimately leading to a petition filed in the Regional Trial Court (RTC) seeking to prohibit their implementation.
Background of the Case
- Under Section 116 of Presidential Decree No. 1158, dealers in securities and lending investors are liable to pay taxes based on their gross income.
- The CIR classified pawnshops as akin to lending investors, thereby imposing a lending investor’s tax through RMO No. 15-91.
- Following this, RMC No. 43-91 was also issued, which subjected pawn tickets to documentary stamp tax.
Procedural History
- Josefina Leal sought reconsideration of the tax orders, which was denied by the CIR.
- On March 18, 1992, she filed a petition for prohibition in the RTC, which was met with a motion to dismiss from the CIR, claiming the RTC lacked jurisdiction to review the revenue orders.
- The RTC denied the motion, stating that the revenue orders constituted new taxes not provided for under the Tax Code.
Court of Appeals Proceedings
- The CIR filed a petition for certiorari a