GR L 15477; (October, 1960) (Digest)
G.R. No. L-15477; October 22, 1960
Republic of the Philippines, plaintiff-appellant, vs. Victoriano Medrano, Sr., defendant-appellee.
FACTS
In June 1958, the Republic of the Philippines filed a complaint in the Court of First Instance of Oriental Mindoro against Victoriano Medrano, Sr. The complaint sought to recover the sums of P4,827.00 and P3,864.00 as deficiency income tax and additional deficiency income tax for the year 1949, plus surcharge and interest. It alleged that the Collector of Internal Revenue made these assessments on September 26, 1953, and October 29, 1954, with notices and requests for payment served upon the defendant. The complaint further alleged that the defendant failed to contest these assessments before the Court of Tax Appeals in accordance with Republic Act No. 1125 and refused to pay despite repeated demands. Instead of filing an answer, the defendant moved to dismiss the case on the ground that the court lacked jurisdiction, asserting that the matter was properly cognizable by the Court of Tax Appeals. The trial court sustained the motion and dismissed the case. The plaintiff’s motion for reconsideration was denied, prompting this appeal.
ISSUE
Whether the Court of First Instance has jurisdiction over a suit to collect a deficiency income tax assessment that has become final and executory due to the taxpayer’s failure to appeal it to the Court of Tax Appeals.
RULING
Yes. The Supreme Court reversed the dismissal order and remanded the record to the trial court for appropriate action. The Court held, citing its precedent in Republic vs. Del Rosario (105 Phil., 277), that the case did not fall under Section 7 of Republic Act No. 1125 , which grants the Court of Tax Appeals jurisdiction over disputed assessments. The defendant’s failure to appeal the Collector’s assessment to the Court of Tax Appeals rendered the assessment final and executory. Consequently, the assessment became a demandable obligation, and the refusal to pay did not convert it into a disputable matter for the Tax Court to adjudicate. Therefore, the Court of First Instance properly had jurisdiction over the government’s suit for collection. Costs were imposed on the appellee.