Case Summary (G.R. No. 156684)
Applicable Law
The legal framework governing this case includes Executive Order No. 401-A and the National Internal Revenue Code. Specifically, section 27 (e) of the National Internal Revenue Code and section 306, which outlines the procedure for recovering taxes erroneously or illegally collected. Additionally, Republic Act No. 422, granting the President authority to reorganize executive departments, is central to analyzing the jurisdictional claims in this case.
Initial Tax Assessment and Jurisdiction Issue
On July 26, 1950, the Collector of Internal Revenue informed the University that its income was subject to income tax, later assessing a total of P718,514.27, which was subsequently reduced to P574,811.41. After paying an initial amount under protest, the University sought to contest the assessment to the Board of Tax Appeals, questioning whether the Board had jurisdiction over such matters by indicating potential invalidity of Executive Order No. 401-A, which they claimed unlawfully deprived the courts of first instance of their jurisdiction over tax-related cases.
The Role of Executive Order No. 401-A
Executive Order No. 401-A essentially grants the Board of Tax Appeals "exclusive jurisdiction" to hear appeals from the Collector of Internal Revenue regarding disputed assessments and related tax matters. A critical aspect of the case is section 20 of the Executive Order, which mandates administrative review through the Board before any judicial proceeding is permitted against the Government concerning tax cases. The University argued that this provision obstructed their right to seek recovery of taxes through the courts, thereby violating section 306 of the National Internal Revenue Code.
Analysis of Jurisdiction
The court recognized that Executive Order No. 401-A effectively barred access to the courts for cases about the recovery of taxes, which presented a conflict with the rights afforded under section 306 of the National Internal Revenue Code. The court concluded that the Executive Order unlawfully extended the President's reorganizational powers delineated in Republic Act No. 422, which were intended solely for internal ex
...continue readingCase Syllabus (G.R. No. 156684)
Case Overview
- The case involves a petition for certiorari and prohibition filed by the University of Santo Tomas against the Board of Tax Appeals.
- The petitioner seeks to prevent the Board from hearing a petition related to an income tax assessment by the Collector of Internal Revenue.
- The assessment in question amounted to P574,811.41 for the fiscal years 1946 to 1950.
Background of the Case
- The University of Santo Tomas is identified as a private non-stock corporation dedicated exclusively to educational purposes.
- On July 26, 1950, the Collector of Internal Revenue informed the petitioner that it was liable for income tax, initially assessed at P718,514.27, including a 25% surcharge.
- The amount was later reduced to P574,811.41 after the surcharge was eliminated.
- The petitioner was allowed to pay the tax under protest, agreeing to a payment plan secured by a real estate mortgage.
Legal Proceedings Initiated by the Petitioner
- On July 26, 1951, the petitioner submitted a memorandum for reconsideration regarding the interpretation of Section 27 (e) of the National Internal Revenue Code.
- The Secretary of Finance required the petitioner to file a petition for review with the Board of Tax Appeals within 30 days.
- The petitioner filed a petition for review on March 31, 1952, designated as B.T.A. Case No. 35, and also filed a motion questioning the Board's jurisdiction.