G.R. No. L-14519; July 26, 1960
REPUBLIC OF THE PHILIPPINES, plaintiff-appellant, vs. LUIS G. ABLAZA, defendant-appellee.

FACTS

On October 3, 1951, the Collector of Internal Revenue assessed income taxes against Luis G. Ablaza for the years 1945, 1946, 1947, and 1948, totaling P5,254.70. On October 16, 1951, Ablaza’s accountants requested a reinvestigation of his tax liability, which the Collector granted on October 17, 1951. The accountants submitted their own computation on October 30, 1951, and a supplemental memorandum on October 23, 1952. On March 10, 1954, the accountants sent a letter to the Bureau of Internal Revenue, noting that the case was still under the reinvestigation requested in 1951, and requested to be furnished a copy of the detailed computation of the tax liability once the reinvestigation was terminated. After reinvestigation, the Collector made a final assessment of P2,066.56 on February 11, 1957. Upon receiving notice, Ablaza’s accountants protested on May 8, 1957, claiming the right to collect had prescribed. The Collector filed an action in the Court of First Instance to recover the amount. The lower court dismissed the action, upholding Ablaza’s claim of prescription. The Government appealed, arguing the prescriptive period was suspended, particularly by the accountants’ letter of March 10, 1954.

ISSUE

Whether the prescriptive period for the Government to collect the assessed income taxes had already lapsed, specifically, whether the letter dated March 10, 1954, from Ablaza’s accountants constituted a request for a further or new investigation that would continue the suspension of the prescriptive period.

RULING

The Supreme Court affirmed the judgment of the lower court, dismissing the action. The Court held that the prescriptive period for collection had prescribed. The letter of March 10, 1954, did not constitute a request for a new or further investigation distinct from the one requested on October 16, 1951. The letter merely referred to the ongoing reinvestigation initiated by the 1951 request and asked to be furnished a copy of the computation upon its termination. It did not imply a demand for a new investigation. Therefore, the suspension of the prescriptive period, which began with the 1951 reinvestigation request, was not continued by the 1954 letter. The Court emphasized that the law on prescription is a remedial measure intended to protect taxpayers from prolonged uncertainty and harassment, and it should be interpreted to fulfill this beneficial purpose. The appeal was found without merit.