GR L 11192; (April, 1958) (Digest)
G.R. No. L-11192; April 16, 1958
SILVERIO BLAQUERA, as Collector of Internal Revenue, petitioner, vs. HON. JUDGE JOSE S. RODRIGUEZ, ET AL., respondents.
FACTS
The Cebu Olympian Company (plaintiff) filed an action in the Court of First Instance of Cebu against the Collector of Internal Revenue (defendant) to enjoin the collection of alleged deficiency percentage taxes totaling P10,518.75 and to recover consequential and moral damages. The plaintiff alleged it had fully paid its taxes directly to the city treasurer and had not employed a business agent as claimed by the Collector. Despite this, the Collector threatened to levy on the plaintiff’s properties. The trial court granted an ex parte writ of preliminary injunction. The Collector moved to dismiss the complaint for lack of jurisdiction, contending the case involved a disputed tax assessment and collection matter falling under the exclusive appellate jurisdiction of the Court of Tax Appeals pursuant to Section 7 of Republic Act No. 1125 . The trial court denied the motion to dismiss and the motion for reconsideration, prompting the Collector to file this petition for certiorari.
ISSUE
Whether the Court of First Instance had jurisdiction over the action to enjoin the collection of deficiency taxes and for damages, or whether such action fell under the exclusive appellate jurisdiction of the Court of Tax Appeals under Section 7 of Republic Act No. 1125 .
RULING
The Supreme Court granted the petition. It ruled that the case fell within the exclusive appellate jurisdiction of the Court of Tax Appeals. The action sought to contest the Collector’s assessment and collection of deficiency taxes through coercive measures like distraint and levy, which are matters arising under the National Internal Revenue Code. The plaintiff’s claim of full payment did not remove the case from the Court of Tax Appeals’ jurisdiction, as it still constituted a “disputed assessment.” The claim for damages was merely incidental to the main tax dispute. The Supreme Court cited the precedent in Millares, et al. vs. Judge Amparo, et al., which held that Republic Act No. 1125 removed from regular courts the jurisdiction to review decisions of revenue and customs authorities on matters now exclusively reviewable by the Court of Tax Appeals. The orders of the respondent judge were set aside and the preliminary injunction issued by the Supreme Court was made permanent.