G.R. No. 230138 , January 13, 2021
ST. MARY’S ACADEMY CALOOCAN CITY, INC., PETITIONER, VS. HON. KIM JACINTO S. HENARES, IN HER OFFICIAL CAPACITY AS THE COMMISSIONER OF INTERNAL REVENUE, HON. GERARDO R. FLORENDO, IN HIS OFFICIAL CAPACITY AS REGIONAL DIRECTOR, BIR REVENUE REGION NO. 5, CALOOCAN CITY, AND HON. RENE D. DETABLAN, IN HIS OFFICIAL CAPACITY AS REVENUE DISTRICT OFFICER, BIR REVENUE DISTRICT NO. 27 (CALOOCAN CITY), AND THE REPUBLIC OF THE PHILIPPINES, RESPONDENTS.

FACTS

In July and August 2013, the Commissioner of Internal Revenue issued Revenue Memorandum Order (RMO) No. 20-2013 (providing guidelines for processing tax exemption applications) and Revenue Memorandum Circular (RMC) No. 52-2013 (setting deadlines for the validity of unused receipts/invoices and requiring a new authority to print). In November 2013, a Revenue District Officer informed St. Mary’s Academy, a non-stock, non-profit educational institution, that its receipts were no longer valid per RMC No. 52-2013 and demanded payment of a penalty for failure to apply for a new authority to print. St. Mary’s Academy asserted its tax-exempt status and argued it was not required to secure such authority. After the Bureau of Internal Revenue (BIR) insisted on the requirements, St. Mary’s Academy filed a Petition for Injunction and Prohibition before the Regional Trial Court (RTC) of Quezon City, seeking to declare RMO No. 20-2013 unconstitutional and RMC No. 52-2013 illegal as applied to non-stock, non-profit educational institutions. The RTC granted a preliminary injunction and subsequently declared the issuances unconstitutional and illegal. The BIR officials and the Republic appealed to the Court of Appeals (CA), which granted the appeal, set aside the RTC’s orders, and dismissed the petition, ruling that injunction and prohibition were improper remedies against issuances made pursuant to quasi-legislative power. St. Mary’s Academy filed the present Petition for Review on Certiorari.

ISSUE

Whether the Regional Trial Court had jurisdiction to rule on the constitutionality and validity of the revenue issuances (RMO No. 20-2013 and RMC No. 52-2013).

RULING

No. The Supreme Court denied the petition. It held that the Court of Tax Appeals (CTA), and not the Regional Trial Court, has exclusive jurisdiction to rule on the constitutionality and validity of revenue issuances by the Commissioner of Internal Revenue. The Court emphasized that Republic Act No. 9282 explicitly grants the CTA, sitting en banc, exclusive appellate jurisdiction to review decisions, orders, or resolutions of the RTC in local tax cases and to resolve questions on the constitutionality or validity of tax laws, rules, and regulations. Since the case involved a challenge to the constitutionality and validity of revenue issuances related to tax exemption and receipt-printing requirements, it fell within the exclusive jurisdiction of the CTA. The RTC’s decision was therefore void for lack of jurisdiction. The Court did not reach the substantive issues, as the proper remedy for the petitioner was to seek recourse from the CTA.