G.R. No. 260912, August 17, 2022
THE DEPARTMENT OF ENERGY, PETITIONER, VS. COURT OF TAX APPEALS, RESPONDENT.

FACTS

The Bureau of Internal Revenue (BIR) issued a tax assessment against the Department of Energy (DOE). The DOE contested this assessment before the Court of Tax Appeals (CTA). The CTA, however, dismissed the case for lack of jurisdiction. The CTA En Banc affirmed this dismissal, ruling that it was not the proper forum to adjudicate the tax dispute. The DOE elevated the matter to the Supreme Court, arguing that the CTA has jurisdiction over the case pursuant to the National Internal Revenue Code.
The core controversy centered on which authority possesses jurisdiction to resolve a disputed tax assessment when both the assessing body (BIR) and the entity assessed (DOE) are agencies of the National Government. The DOE insisted on CTA jurisdiction, while the BIR, through the Solicitor General, maintained that the dispute must be resolved administratively by the Secretary of Justice under prevailing laws and jurisprudence.

ISSUE

Whether the Court of Tax Appeals has jurisdiction over a tax dispute solely between two government agencies, specifically between the Bureau of Internal Revenue and the Department of Energy.

RULING

The Supreme Court DENIED the Petition, affirming the CTA En Banc’s dismissal. The Court held that the CTA does not have jurisdiction; exclusive jurisdiction lies with the Secretary of Justice. The legal logic is anchored on Presidential Decree No. 242 and its codification in the Administrative Code of 1987, which provide a specific mechanism for resolving inter-agency disputes.
These laws mandate that all disputes, claims, and controversies solely between or among national government agencies, including government-owned and controlled corporations, must be administratively settled. For cases involving only questions of law—such as the interpretation of tax statutes applicable to a government agency—the Secretary of Justice, as the Attorney-General, has the conclusive and binding authority to adjudicate. The Court applied its landmark En Banc ruling in Power Sector Assets and Liabilities Management Corporation v. Commissioner of Internal Revenue, which categorically resolved that tax disputes exclusively between government entities fall outside CTA jurisdiction. The CTA’s jurisdiction under the Tax Code and RA 9282 is general, but PD 242 and the Administrative Code provide a special, mandatory procedure for intra-governmental conflicts. This special law prevails over the general law. Therefore, the proper recourse for the DOE was to seek a resolution from the Secretary of Justice, not to file a petition with the CTA.