Expansion of Court of Tax Appeals' powers

Court creation, composition, and tenure

The Court of Tax Appeals (CTA) is created as a court of the same level as the Court of Appeals, possessing all the inherent powers of a Court of Justice (Section 1).
The CTA is composed of a Presiding Justice and five (5) Associate Justices, making the Court a collegiate court (Section 1).
The incumbent Presiding Judge and Associate Judges continue in office and bear the new titles of Presiding Justice and Associate Justices (Section 1).
The Presiding Justice and the most Senior Associate Justice serve as chairmen of the two (2) Divisions, while the additional three (3) Justices and succeeding members are appointed by the President upon nomination by the Judicial and Bar Council (Section 1).
The Presiding Justice is designated in the appointment; precedence among Associate Justices is based on date of appointment, or the order in which appointments were issued when dates coincide (Section 1).
The Presiding Justice and Associate Justices have the same qualifications, rank, category, salary, emoluments, and other privileges, are subject to the same inhibitions and disqualifications, and enjoy the same retirement and other benefits as those provided for the Presiding Justice and Associate Justices of the Court of Appeals (Section 1).
When Court of Appeals salaries are increased, the increases are correspondingly extended to the CTA’s Presiding Justice and Associate Justices (Section 1).
CTA Justices hold office during good behavior, until age seventy (70), or until incapacitated, unless removed for the same causes and in the same manner provided by law for members of the judiciary of equivalent rank (Section 1).

Sessions, quorum, and voting

The CTA may sit en banc or in two (2) Divisions, with each Division consisting of three (3) Justices (Section 2).
A quorum for en banc sessions consists of four (4) Justices, while a quorum for Division sessions consists of two (2) Justices (Section 2).
When the required quorum cannot be constituted due to vacancy, disqualification, inhibition, disability, or any other lawful cause, the Presiding Justice designates any Justice of other Divisions to sit temporarily (Section 2).
The affirmative votes of four (4) members for en banc or two (2) members for a Division are necessary to render a decision or resolution (Section 2).

Clerks and subordinate personnel

The CTA has a Clerk of Court and three (3) Division Clerks of Court, appointed by the Supreme Court (Section 3).
No person may be appointed Clerk of Court or Division Clerk of Court unless he is duly authorized to practice law in the Philippines (Section 3).
The Clerk of Court and Division Clerks of Court exercise the same powers and perform the same duties as their counterparts in the Court of Appeals, as applicable or analogous, and act under the direction of the Court (Section 3).
The Clerk and Division Clerks have the same rank, privileges, salary, emoluments, retirement and other benefits as those provided for Court of Appeals clerks (Section 3).
The Supreme Court appoints all CTA officials and employees in accordance with the Civil Service Law, fixes their salaries, and prescribes their duties (Section 4).

Disqualifications, conflicts, and practice bar

CTA Justices and officers are prohibited from intervening, directly or indirectly, in the management or control of any private enterprise that may be affected by the Court’s functions (Section 5).
Justices of the CTA are disqualified from sitting in any case on the same grounds as Rule 137 of the Rules of Court for disqualification of judicial officers (Section 5).
A person who has served in the CTA in a permanent capacity as Presiding Justice or Associate Justice is barred from practicing as counsel before the CTA for one (1) year from his retirement or resignation (Section 5).

Place of office, hearings, and court powers

The CTA’s principal office is in Metro Manila (Section 6).
The CTA holds hearings at the time and place it designates by order in writing (Section 6).
The CTA has authority to administer oaths, receive evidence, summon witnesses by subpoena, and require production of papers or documents by subpoena duces tecum (Section 8).
The CTA’s contempt power is exercised in accordance with Rule seventy-one of the Rules of Court, for the same causes, under the same procedure, and with the same penalties provided therein (Section 8).

CTA jurisdiction: tax, customs, real property, and criminal

The CTA exercises exclusive appellate jurisdiction to review, by appeal, specified issuances and inaction of government bodies (Section 7).
The CTA reviews decisions of the Commissioner of Internal Revenue involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties related thereto, or other matters arising under the National Internal Revenue or other laws administered by the Bureau of Internal Revenue (Section 7).
The CTA reviews inaction by the Commissioner of Internal Revenue in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties related thereto, or other matters under the National Internal Revenue Code or other laws administered by the Bureau of Internal Revenue where the National Internal Revenue Code provides a specific period of action; inaction is deemed a denial (Section 7).
The CTA reviews decisions, orders, or resolutions of the Regional Trial Courts in local tax cases originally decided or resolved by them in the exercise of their original or appellate jurisdiction (Section 7).
The CTA reviews decisions of the Commissioner of Customs involving liability for customs duties, fees or other money charges, seizure, detention or release of property affected, fines, forfeitures or other penalties related thereto, or other matters arising under the Customs Law or other laws administered by the Bureau of Customs (Section 7).
The CTA reviews decisions of the Central Board of Assessment Appeals in its appellate jurisdiction over cases involving assessment and taxation of real property originally decided by provincial or city boards of assessment appeals (Section 7).
The CTA reviews decisions of the Secretary of Finance on customs cases elevated automatically for review from decisions of the Commissioner of Customs adverse to the Government under Section 2315 of the Tariff and Customs Code (Section 7).
The CTA reviews decisions of the Secretary of Trade and Industry for non-agricultural products/commodities/articles and the Secretary of Agriculture for agricultural products/commodities/articles involving dumping and countervailing duties under Section 301 and 302, respectively, of the Tariff and Customs Code, and safeguard measures under Republic Act No. 8800, where either party may appeal the decision to impose or not to impose said duties (Section 7).
The CTA exercises exclusive original jurisdiction over all criminal offenses arising from violations of the National Internal Revenue Code, the Tariff and Customs Code, and other laws administered by the Bureau of Internal Revenue or the Bureau of Customs—except that offenses or felonies where the principal amount of taxes and fees, exclusive of charges and penalties, claimed is less than One million pesos (P1,000,000.00), or where there is no specified amount claimed, are tried by the regular Courts and the CTA’s jurisdiction is appellate (Section 7).
In the CTA’s exclusive original-jurisdiction criminal and related civil matters, the criminal action and the corresponding civil action for recovery of civil liability for taxes and penalties are simultaneously instituted with and jointly determined in the same proceeding by the CTA, with the filing of the criminal action deemed to carry with it the filing of the civil action; no right to reserve separate filing of the civil action is recognized (Section 7).
The CTA exercises exclusive appellate jurisdiction in criminal offenses over:
- appeals from RTC judgments, resolutions, or orders in tax cases originally decided by them in their territorial jurisdiction; and
- petitions for review of RTC judgments, resolutions, or orders in the exercise of their appellate jurisdiction over tax cases originally decided by Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts in their respective jurisdiction (Section 7).
The CTA exercises exclusive original jurisdiction in tax collection cases involving final and executory assessments for taxes, fees, charges and penalties, except that collection cases where the principal amount of taxes and fees, exclusive of charges and penalties, claimed is less than One million pesos (P1,000,000.00) are tried by the proper Municipal Trial Court, Metropolitan Trial Court, and Regional Trial Court (Section 7).
The CTA exercises exclusive appellate jurisdiction in tax collection cases over appeals from RTC decisions, resolutions, or orders in tax collection cases originally decided by them in their territorial jurisdiction, and over petitions for review of RTC decisions, resolutions, or orders in their appellate jurisdiction over tax collection cases originally decided by Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts in their respective jurisdiction (Section 7).

Appeal rights, filing modes, periods, and effects

Any party adversely affected by a decision or ruling or by inaction of the Commissioner of Internal Revenue, Commissioner of Customs, Secretary of Finance, Secretary of Trade and Industry, Secretary of Agriculture, Central Board of Assessment Appeals, or Regional Trial Courts may file an appeal with the CTA within thirty (30) days after receipt of the decision or ruling, or after the expiration of the period fixed by law for action for inaction cases (Section 9).
Appeals are filed as a petition for review under a procedure analogous to Rule 42 of the 1997 Rules of Civil Procedure within thirty (30) days from receipt of the decision or ruling or, for inaction, from expiration of the period fixed by law to act (Section 9).
A CTA Division hears the appeal, and when the appeal involves Central Board of Assessment Appeals or RTC decisions or rulings in the exercise of its appellate jurisdiction, the petition for review uses a procedure analogous to Rule 43 and the CTA hears the case en banc (Section 9).
Cases filed with the CTA under Section 7 are raffled to its Divisions, and a party adversely affected by a Division ruling, order, or decision may file a motion for reconsideration or new trial before the same Division within fifteen (15) days from notice (Section 9).
In criminal cases, the general rule applicable in regular Courts on matters of prosecution and appeal applies (Section 9).
Filing an appeal to the CTA does not suspend the payment, levy, distraint, and/or sale of taxpayer property for satisfaction of tax liability, as provided by existing law (Section 9).
The CTA may, at any stage of the proceeding, suspend collection when it finds that collection by the concerned government agencies may jeopardize the interests of the Government and/or the taxpayer, and require the taxpayer either to deposit the amount claimed or to file a surety bond for not more than double the amount with the Court (Section 9).
In criminal and collection cases covered by Section 7(b) and 7(c), the Government may directly file the cases with the CTA covering amounts within its exclusive and original jurisdiction (Section 9).

En banc prerequisite, certiorari review, and decisions

No civil proceeding involving matters arising under the National Internal Revenue Code, the Tariff and Customs Code, or the Local Government Code is maintained unless an appeal has been previously filed with the CTA and disposed of under the Act (Section 11).
A party adversely affected by a resolution of a CTA Division on a motion for reconsideration or new trial may file a petition for review with the CTA en banc (Section 11).
A party adversely affected by a CTA en banc decision or ruling may file a verified petition for review with the Supreme Court on certiorari under Rule 45 of the 1997 Rules of Civil Procedure (Section 12).
Cases brought before the CTA must be decided in accordance with Section 15, paragraph (1), Article VIII of the 1987 Constitution (Section 10).
CTA decisions must be in writing, stating clearly and distinctly the facts and the law on which they are based, and must be signed by the Justices concurring therein (Section 10).
The CTA must provide for publication of its decisions in the Official Gazette in a form and manner adopted for public information and use (Section 10).
Each Justice must certify on leave applications and salary vouchers (or payrolls) that all proceedings, petitions, and motions submitted for determination or decision for the period required by law or the Constitution have been decided on or before the certificate date; no leave is granted and no salary is paid without the certificate (Section 10).

Distraint and levy after CTA favorable ruling

Upon issuance of any CTA ruling, order, or decision favorable to the national government, the CTA shall issue an order authorizing the Bureau of Internal Revenue through the Commissioner to:
- seize and distrain goods, chattels, or effects; and
- seize and distraint personal property including stocks and other securities, debts, credits, bank accounts, and interests in and rights to personal property, and/or levy real property of the persons in sufficient quantity to satisfy the tax or charge together with any increment incident to delinquency (Section 13).
The distraint/levy remedy is not exclusive and does not preclude use of other means under the Rules of Court (Section 13).

Personnel continuity and transitional setup

Existing permanent CTA personnel are not adversely affected by the Act; they continue in office and are not removed or separated except for cause as provided by existing laws (Section 14).
Current CTA positions and salaries are upgraded to the level of their counterparts in the Court of Appeals (Section 14).
The incumbent Presiding Judge and Associate Judges form a Division pending constitution of the entire Court (Section 15).

Appropriations and repealing effect

The amount necessary to carry out the Act is included in the General Appropriations Act of the year following its enactment, and thereafter (Section 16).
All laws, executive orders, executive issuances, or letter instructions, or parts thereof, inconsistent with or contrary to the Act are repealed, amended, or modified accordingly (Section 17).

Separability and effectivity rule

If any section or provision of the Act is declared unconstitutional or invalid, the remaining parts not affected remain valid (Section 18).
The Act takes effect after fifteen (15) days following publication in at least (2) newspapers of general circulation (Section 19).