G.R. No. L-17414, November 30, 1962
Victorias Milling Co., Inc. vs. The Honorable Auditor General of the Philippines

FACTS

Victorias Milling Co., Inc. (petitioner) paid wharfage fees totaling P422,664.11 to customs collectors in Iloilo, Cebu, and Manila for its export and import shipments from June 1955 to June 1957. The payments were made under the belief they were legally due. On June 30, 1958, the Court of Appeals decided Superior Gas and Equipment Co. v. Commissioner of Customs, interpreting Republic Act No. 1371 to exempt from wharfage fees imports unloaded on private wharves. Relying on this, the petitioner, on October 7, 1958, sought refunds from the customs collectors, arguing its shipments were loaded/unloaded shipside without using government wharves. The collectors denied the claims because no formal written protest was filed within the 30-day period required by customs law. The Commissioner of Customs also refused appeal due to this lack of protest.
Subsequently, on February 14, 1959, the petitioner filed a claim with the Auditor General. It argued the collections were void, the payments were made by mistake, and a quasi-contract of solutio indebiti (payment not due) arose under the Civil Code, obliging the government to refund. The Auditor General, in a letter dated July 19, 1960, declined jurisdiction. He ruled that claims for refund of customs dues fall under the exclusive jurisdiction of the Collector of Customs and the Commissioner of Customs, subject to review by the Court of Tax Appeals, pursuant to the Tariff and Customs Code (formerly Sections 1370-1372 of the Revised Administrative Code).

ISSUE

Whether the Auditor General has jurisdiction to entertain the petitioner’s claim for refund of wharfage fees based on the principle of solutio indebiti.

RULING

No, the Auditor General correctly refused jurisdiction. The Supreme Court affirmed the Auditor General’s decision. The legal logic is anchored on the exclusivity of the remedy provided under customs law. Sections 1370 and 1371 of the Revised Administrative Code (now embodied in the Tariff and Customs Code) prescribe the specific and exclusive procedure for contesting the imposition or collection of customs duties, fees, or charges: a taxpayer must file a written protest with the Collector of Customs within 30 days from payment. This statutory remedy is mandatory. The petitioner’s failure to file a timely protest within the prescribed period rendered the collector’s assessment final and unappealable through the customs administrative channel.
The Court rejected the petitioner’s attempt to circumvent this exclusive procedure by re-framing the claim as one arising from solutio indebiti cognizable by the Auditor General under general auditing laws. To allow such a parallel avenue would nullify the specific statutory time limit for protests in customs matters. The Court emphasized that the law refers to cases “subject to protest,” not merely those “protested.” The applicability of the exclusive customs procedure is determined by the nature of the claim (a refund of customs charges), not by the taxpayer’s choice of legal theory or its failure to protest. Since the claim fundamentally sought the refund of wharfage fees—a customs charge—it fell squarely within the exclusive jurisdiction of the customs authorities, thereby precluding the Auditor General’s jurisdiction.