G.R. No. L-12518. October 28, 1961.
COLLECTOR OF INTERNAL REVENUE, petitioner, vs. J.C. YUSECO and THE COURT OF TAX APPEALS, respondents.

FACTS

Respondent J.C. Yuseco did not file income tax returns for 1945 and 1946. The Collector of Internal Revenue, after investigation, assessed deficiency taxes against him. A series of demands and requests for reinvestigation ensued from 1948. On July 2, 1953, the Collector issued a revised assessment for 1946. On January 20, 1955, the Collector issued a warrant of distraint and levy to collect the 1946 tax. Without paying the tax or appealing the assessment to the Court of Tax Appeals (CTA), Yuseco filed an original petition for prohibition with the CTA on December 12, 1955, seeking to enjoin the collection and to declare the warrant null and void.
The CTA granted Yuseco’s petition, declaring the warrant void and enjoining the Collector from using summary collection methods. The Collector assails this judgment, contending the CTA had no jurisdiction to entertain an original action for prohibition, as its jurisdiction is purely appellate under Republic Act No. 1125 .

ISSUE

Whether the Court of Tax Appeals has original jurisdiction to issue writs of prohibition or injunction to restrain the collection of taxes, independent of an appeal from a decision of the Collector of Internal Revenue.

RULING

No. The Supreme Court annulled the CTA’s decision, holding it acted without jurisdiction. The legal logic is anchored on the explicit statutory grant and legislative intent behind Republic Act No. 1125 , which created the CTA. Sections 7 and 11 of the Act unequivocally provide that the CTA shall exercise “exclusive appellate jurisdiction” to review by appeal decisions of the Collector of Internal Revenue. A taxpayer adversely affected by a Collector’s decision must appeal within thirty days.
The Court examined the legislative deliberations, noting the law’s proponents consistently described the CTA as a court with appellate, not original, jurisdiction. Its power to issue auxiliary writs, such as prohibition or injunction, exists only “in aid of its appellate jurisdiction” over cases properly appealed to it. It cannot entertain independent original actions challenging tax collection. The policy rationale is to ensure prompt tax collection, vital for government operations. The proper remedy for a taxpayer contesting an assessment is to appeal to the CTA, and the law itself (Section 11) provides a mechanism to suspend collection by depositing the amount or filing a bond if collection would jeopardize government or taxpayer interests. Since Yuseco did not appeal the assessment but filed an original prohibition action, the CTA had no authority to act on it.