G.R. No. L-10935; April 28, 1958
SILVERIO BLAQUERA, as Collector of Internal Revenue, petitioner, vs. HON. JUDGE JOSE S. RODRIGUEZ, ETC., and HAO GIOK SAN, ETC., respondents.

FACTS

On May 10, 1956, respondent Hao Giok San filed a complaint (Civil Case No. R-4514) in the Court of First Instance of Cebu, presided by respondent Judge Jose S. Rodriguez, against petitioner Silverio Blaquera as Collector of Internal Revenue. The complaint sought to enjoin the petitioner and his agents from collecting deficiency percentage taxes, surcharges, penalties, and a compromise totaling P3,625, and from levying on execution any of Hao Giok San’s properties to satisfy said amount. The respondent Judge issued an ex-parte writ of preliminary injunction upon Hao Giok San’s filing of a bond. The petitioner moved to dismiss the complaint on the ground that the Court of First Instance lacked jurisdiction, and prayed for the lifting of the preliminary injunction. The motion was denied, and a petition for reconsideration was likewise dismissed. The petitioner then initiated the present petition for prohibition to restrain the respondent Judge from taking cognizance of Civil Case No. R-4514 for lack of jurisdiction, to secure a preliminary injunction to prevent the enforcement of the injunction issued in the civil case, and to make such injunction permanent. The dispute originated from a November 12, 1955, letter from Deputy Collector Jose Arañas demanding payment of P3,625 from Hao Giok San for alleged deficiency percentage taxes and a surcharge, plus a P50 compromise. Hao Giok San, through counsel, denied any liability, insisting he had paid all taxes in full. To prevent collection and levy, he filed the civil case.

ISSUE

Whether the Court of First Instance of Cebu has jurisdiction to try Civil Case No. R-4514, which involves the collection of deficiency percentage taxes and the enforcement thereof by levy and distraint, or whether such matter falls under the exclusive appellate jurisdiction of the Court of Tax Appeals.

RULING

The Supreme Court granted the petition. It held that the Court of First Instance of Cebu has no jurisdiction over the subject matter of Civil Case No. R-4514. The complaint sought to contest the right to collect the deficiency taxes and the legality of any levy or distraint, which are matters arising under the National Internal Revenue Code. Under Section 7 of Republic Act No. 1125, the Court of Tax Appeals exercises exclusive appellate jurisdiction to review by appeal decisions of the Collector of Internal Revenue in cases involving disputed assessments, refunds, penalties, or other matters arising under the National Internal Revenue Code. Therefore, the determination of the correctness of the tax assessment and the propriety of its collection falls within the exclusive appellate jurisdiction of the Court of Tax Appeals, not the Court of First Instance. The respondent Judge was prohibited from further taking cognizance of the civil case, his orders were set aside, and the preliminary injunction issued by the Supreme Court was made permanent.