G.R. No. 86625 December 22, 1989
DEVELOPMENT BANK OF THE PHILIPPINES, petitioner, vs. THE COURT OF APPEALS and THE COMMISSIONER OF CUSTOMS, respondents.

FACTS

The Development Bank of the Philippines (DBP) imported computer equipment and paid customs duties and taxes totaling P5,562,926. It subsequently sought a refund from the Commissioner of Customs based on Section 4(c) of Executive Order No. 1087. The Commissioner denied the claim. DBP then appealed to the Court of Tax Appeals (CTA), which ruled in its favor and ordered the refund. The Commissioner appealed this decision to the Supreme Court via certiorari.
The Supreme Court, en banc, referred the appeal to the Court of Appeals (CA) pursuant to Section 9 of Batas Pambansa Blg. 129, which vested exclusive appellate jurisdiction over CTA decisions in the CA. The CA, however, annulled the CTA’s decision. It held that the CTA had no jurisdiction over the dispute in the first place. The CA applied Presidential Decree No. 242, which mandates the administrative settlement of disputes solely between government agencies and instrumentalities, excluding constitutional offices.

ISSUE

The primary issue is whether the Court of Appeals correctly held that the Court of Tax Appeals lacked jurisdiction over the refund dispute between DBP and the Commissioner of Customs, and whether P.D. No. 242 governs such intra-governmental disputes.

RULING

The Supreme Court denied DBP’s petition and affirmed the Court of Appeals’ decision. The ruling is grounded on two key legal principles. First, the Court clarified the proper appellate jurisdiction. While Republic Act No. 1125 originally provided for appeals from the CTA to go directly to the Supreme Court, this was modified by Batas Pambansa Blg. 129 (The Judiciary Reorganization Act of 1980). Section 9 of this law explicitly grants the Court of Appeals exclusive appellate jurisdiction over decisions of quasi-judicial agencies, including the CTA. Therefore, the CA correctly exercised its authority in reviewing the CTA’s decision.
Second, and more substantively, the Court upheld the application of P.D. No. 242. This decree was enacted precisely to avoid unnecessary litigation between government entities, which ultimately share the same real party in interest—the Government itself. It establishes a mandatory administrative mechanism for settling disputes “solely between or among” government agencies and instrumentalities. The dispute between DBP, a government-owned bank, and the Commissioner of Customs, a bureau of the national government, falls squarely within this category. Consequently, the CTA erred in taking cognizance of the case. The proper remedy for DBP was to seek administrative settlement as outlined in P.D. No. 242, not judicial recourse before the CTA. The later enactment of P.D. No. 242, expressing a specific legislative policy for intra-governmental disputes, prevails over the general jurisdictional grant to the CTA under the earlier R.A. No. 1125.