G.R. No. L-18208 November 27, 1964
REPUBLIC OF THE PHILIPPINES, plaintiff-appellant, vs. THE MANILA PORT SERVICE, defendant-appellee.

FACTS

The Commissioner of Internal Revenue assessed fixed and percentage taxes against the Manila Port Service for its arrastre operations. The Manila Port Service protested, claiming tax exemption through its mother company, the Manila Railroad Company. The Commissioner denied the protest and reiterated the demand for payment. The Manila Port Service did not appeal the Commissioner’s final assessment to the Court of Tax Appeals within the 30-day reglementary period.

ISSUE

Whether the assessment by the Commissioner of Internal Revenue had become final and executory, thereby precluding the Manila Port Service from disputing its tax liability in a regular court.

RULING

Yes. Under Republic Act No. 1125 , the Court of Tax Appeals has exclusive appellate jurisdiction to review decisions of the Commissioner on disputed assessments. A taxpayer must appeal an adverse decision of the Commissioner to the Court of Tax Appeals within 30 days from receipt. Failure to do so renders the assessment final, executory, and demandable. Since the Manila Port Service did not timely appeal, the assessment became final. Consequently, it could no longer contest the merits of the assessment in the subsequent collection case filed by the Republic in the Court of First Instance. The trial court erred in dismissing the complaint on the ground that the assessment was erroneous. The Supreme Court reversed the trial court’s decision and ordered the Manila Port Service to pay the assessed taxes.