G.R. No. L-22480 June 30, 1971
CARLOS MORAN SISON and PRISCILA F. SISON, petitioners, vs. COMMISSIONER OF INTERNAL REVENUE, respondent.

FACTS

Petitioners Carlos Moran Sison and Priscila F. Sison reported a 1949 assignment of real properties to Priscila Estate, Inc. in exchange for corporate shares, claiming deductible losses in their income tax return. The Commissioner of Internal Revenue assessed a deficiency income tax. The petitioners protested, and the case reached the Court of Tax Appeals (CTA), which dismissed the assessment on the ground of prescription. The Commissioner appealed to the Supreme Court in G.R. No. L-13739, which reversed the CTA, ruling that the right to assess had not prescribed.
Upon remand to the CTA, the petitioners filed a petition for a decision “on the merits,” arguing that the CTA should still hear evidence on the correctness of the tax deficiency itself. The Commissioner, conversely, moved for execution of the Supreme Court’s final judgment in G.R. No. L-13739. The CTA granted the Commissioner’s motion for execution and denied the petitioners’ petition, prompting this appeal.

ISSUE

Whether the Supreme Court’s decision in G.R. No. L-13739, which resolved only the issue of prescription, is final and executory, thereby precluding a further hearing on the merits and authorizing execution for the tax deficiency.

RULING

Yes. The Supreme Court affirmed the CTA resolution, holding its prior decision was final and executory, warranting execution. The Court rejected the petitioners’ argument that the decision was merely interlocutory. By definitively resolving the pivotal issue of prescription in favor of the government, the decision left no other substantial matter to be adjudicated; it effectively removed the legal barrier to the assessment’s enforceability.
The Court further held that the petitioners waived their right to a separate hearing on the merits. During the original CTA hearing, the court informed the parties it was hearing the whole case, including both prescription and the merits. The government presented its evidence on the deficiency, but the petitioners, focusing on prescription, consciously refrained from presenting counter-evidence on the merits after being warned by the court of the risk. This strategic choice constituted a waiver. The practice of the courts is to try a case as a whole to avoid delay. Consequently, upon the Supreme Court’s reversal on prescription, the CTA correctly deemed the case submitted for decision based on the existing record.
Finally, the dispositive portion’s lack of a specified collectible amount did not preclude execution. Under Section 14 of Republic Act No. 1125 , a CTA decision that a tax is barred is considered a decision of no deficiency. The converse logic applies: a Supreme Court decision that the tax is not barred must be understood as a decision that a deficiency exists. The Court in G.R. No. L-13739 had sustained the collector’s position, which was precisely that the petitioners were liable for the assessed amount of P5,535.02. Thus, execution for that sum was proper.