GR 192536; (March, 2017) (Digest)
G.R. No. 192536 March 15, 2017
DEMETRIO R. ALCANTARA, Petitioner, vs. REPUBLIC OF THE PHILIPPINES, THRU ITS AGENCY, BUREAU OF INTERNAL REVENUE, REVENUE REGION NO. 11-B, DAVAO CITY; AMERIGO D. VILLEGAS, REVENUE ENFORCEMENT OFFICER, REVENUE REGION NO.11-B; TEODORICA R. ARCEGA, ASSISTANT REGIONAL DIRECTOR, BIR REVENUE REGION NO. 11-B; JOSE C. BATAUSA, REGIONAL DIRECTOR, BIR REVENUE REGION NO.11-B; THEMISTOCLES R. MONTALBAN, ASSISTANT COMMISSIONER, COLLECTION SERVICE OF BIR; REGISTER OF DEEDS OF DAVAO CITY; and MAXIMO LAGAHIT, Respondents.
FACTS
Petitioner Demetrio Alcantara was the owner of a parcel of land in Davao City. The Bureau of Internal Revenue (BIR) assessed him for deficiency income taxes for 1982 and 1983, issuing demand letters in 1988. Alcantara did not respond or protest the assessment. Consequently, the BIR issued a Warrant of Distraint and/or Levy in 1991, followed by a Notice of Seizure and a Declaration of Forfeiture of his property for non-payment. The property was forfeited to the government, and a new title was issued in its name.
Alcantara filed a complaint in the Regional Trial Court (RTC) for declaration of nullity of the notice of seizure, declaration of forfeiture, and deed of sale, and for specific performance for reconveyance of the property. The RTC dismissed his complaint. Alcantara appealed to the Court of Appeals (CA), which also dismissed the appeal. He then elevated the case to the Supreme Court via a petition for review on certiorari.
ISSUE
Whether the RTC had jurisdiction over Alcantara’s complaint, which assailed the tax assessment and collection proceedings conducted by the BIR.
RULING
The Supreme Court denied the petition and affirmed the CA’s dismissal. The Court held that the RTC lacked jurisdiction over the complaint. Alcantara’s action, although framed as one for reconveyance and nullity, was fundamentally a challenge to the tax assessment and the ensuing collection by the Commissioner of Internal Revenue. Under Republic Act No. 1125 (prior to its amendment by R.A. No. 9282 ), the Court of Tax Appeals (CTA) exercised exclusive appellate jurisdiction over decisions of the Commissioner of Internal Revenue involving disputed assessments, refunds, and matters arising under the Tax Code.
Since Alcantara failed to administratively protest the assessment or seek a refund or credit with the Commissioner, the assessment became final and executory. His direct resort to the RTC was improper. The principle of exhaustion of administrative remedies required him to first contest the assessment within the BIR before seeking judicial relief. Furthermore, an appeal erroneously taken to the CA, as was done here when the CTA had exclusive jurisdiction, warrants outright dismissal under the Rules of Court. Therefore, the RTC correctly dismissed the complaint for lack of jurisdiction.