G.R. No. 44372; November 3, 1938
BENITO GARCIA, plaintiff-appellee, vs. THE COLLECTOR OF INTERNAL REVENUE, defendant-appellant.

FACTS

Benito Garcia was sentenced in a criminal case to pay a fine for removing 616 liters of alcohol from the distillery of Jose B. Suntay to a distant store without first paying the specific tax. Subsequently, the Collector of Internal Revenue required Garcia to pay the specific tax of P204.08. Garcia paid under protest and filed a complaint to recover the amount. The lower court ruled in favor of Garcia, prompting the Collector to appeal.

ISSUE

Whether Benito Garcia, who was found in possession and in the act of removing the untaxed alcohol, is liable to pay the specific tax under the Revised Administrative Code, despite not being the manufacturer.

RULING

Yes. The Supreme Court reversed the lower court’s decision. Under Section 1479 of the Revised Administrative Code, the specific tax on domestic products shall be paid by the manufacturer, producer, owner, or person having possession thereof. Garcia was in possession of the alcohol when he removed it. His liability for the tax is separate from the criminal fine and the accessory penalty of confiscation imposed in the criminal case. The fact that the manufacturer (Suntay) typically pays and recovers the tax from the consumer is irrelevant, as the law expressly imposes the tax on the possessor at the time of removal to ensure its collection.

AI Generated by Armztrong.