G.R. No. L-15934; October 31, 1961
Carmen Planas, petitioner, vs. Collector of Internal Revenue, respondent.

FACTS

Petitioner Carmen Planas was assessed for war profit tax and surcharge. After reinvestigations, the assessment was reduced to P47,847.45. She appealed to the Secretary of Finance, who affirmed the Collector’s action. Subsequently, she appealed to the Board of Tax Appeals, which, on May 29, 1952, largely affirmed the assessment but increased the valuation of her jewels. Planas appealed this Board decision to the Supreme Court (G.R. No. L-5866). In a minute resolution dated March 30, 1954, the Supreme Court dismissed her appeal without prejudice, citing its prior ruling in University of Sto. Tomas vs. Board of Tax Appeals. That UST case had declared Executive Order No. 401-A, which created the Board of Tax Appeals, void insofar as it conferred jurisdiction, as such grant was a legislative power belonging exclusively to Congress.
Meanwhile, Republic Act No. 1125 was approved on June 16, 1954, creating the Court of Tax Appeals. In 1958, the Solicitor General filed a motion with this new Court for execution of the old Board of Tax Appeals’ 1952 decision. The Court of Tax Appeals granted the motion in a 1959 resolution, prompting Planas to elevate the matter to the Supreme Court.

ISSUE

Whether the Court of Tax Appeals correctly ordered the execution of the decision rendered by the defunct Board of Tax Appeals.

RULING

No. The Supreme Court set aside the resolution of the Court of Tax Appeals. The legal logic hinges on the jurisdictional nullity of the Board of Tax Appeals’ decision. In the University of Sto. Tomas case, the Court declared Executive Order No. 401-A invalid for usurping Congress’s exclusive power to confer jurisdiction. Consequently, the Board of Tax Appeals lacked jurisdiction over internal revenue cases, rendering its decisions null and void. The Court’s 1954 dismissal of Planas’s appeal “without prejudice” implicitly affirmed this nullity regarding her case.
Republic Act No. 1125 (creating the Court of Tax Appeals) contained a saving clause in its Section 21, but it applied only to two specific exceptions: (a) cases already decided by the Board and appealed to the Supreme Court, and (b) cases pending before the Board at the time of the Act’s approval. Planas’s case fell under neither exception. It was not pending in the Supreme Court upon the Act’s approval, nor was it pending before the Board, as it had been decided two years prior. The Court rejected the Tax Court’s theory that the case was “pending execution” and thus fell under the second exception, noting this was inconsistent with the “without prejudice” dismissal which reserved Planas’s right to challenge her liability. A void decision, born from a lack of jurisdiction, is no decision at all in the eyes of the law and can never attain finality or become executory. Therefore, there was no valid decision for the Court of Tax Appeals to execute.