G.R. No. L-23534 May 16, 1967
JOSE A. ARCHES, petitioner-appellant, vs. ANACLETO I. BELLOSILLO and JAIME ARANETA, respondents-appellees.

FACTS

Petitioner-appellant Jose A. Arches filed his income tax return for 1953 on February 27, 1954. On February 26, 1959, within five years, deficiency income tax and residence tax assessments for 1953 were issued against him. These assessments were not disputed. On December 29, 1960, the Republic, represented by the Bureau of Internal Revenue Regional Director, filed a suit in the municipal court of Roxas City to recover the sum of P4,441.25 from Arches as deficiency taxes. Arches moved to dismiss the complaint on two grounds: first, that it did not expressly show the approval of the Revenue Commissioner as required by Section 308 of the Tax Code; and second, that the action had prescribed. The municipal court denied his motion to dismiss and his subsequent motion for reconsideration. Arches then filed a petition for certiorari and prohibition with the Court of First Instance of Capiz, assailing the municipal court’s order. The trial court dismissed his petition, prompting this appeal.

ISSUE

The sole issue is the correctness of the Court of First Instance’s dismissal of Arches’ petition for certiorari and prohibition.

RULING

The Supreme Court affirmed the dismissal of the petition. The municipal court had jurisdiction over the parties and the subject matter, as the amount demanded was less than P5,000.00, making it a simple action for recovery of a sum of money. The alleged lack of the Revenue Commissioner’s express approval on the complaint was not a jurisdictional defect but one affecting capacity to sue or the cause of action. Any error by the municipal court in ruling on this matter was an error of judgment, not correctible by certiorari. Furthermore, the municipal court did not commit grave abuse of discretion in relying on Memorandum Order No. V-634, wherein the Revenue Commissioner delegated his functions, including the approval of court actions under Section 308 of the Tax Code, to Regional Directors. This regulation has the force of law. The verification by the Regional Director on the complaint, stating he caused its preparation and believed its allegations to be true, constituted sufficient approval. The order denying a motion to dismiss is interlocutory, and the proper remedy is to await a judgment on the merits and then appeal. Regarding prescription, the Court ruled that the applicable prescriptive period for bringing a civil action is five years from the date of assessment under Section 332 of the Tax Code, not the three-year period under Section 51(d) which applies only to summary remedies of distraint and levy. The action was filed on December 29, 1960, which was within five years from the assessment date of February 26, 1959. Therefore, the Court of First Instance committed no error in dismissing the petition. Costs were imposed on petitioner-appellant.