GR L 24213; (March, 1968) (Digest)
G.R. No. L-24213 March 13, 1968
VICTORIAS MILLING CO., INC., petitioner, vs. THE COURT OF TAX APPEALS, THE PROVINCIAL ASSESSOR AND THE PROVINCIAL TREASURER OF NEGROS OCCIDENTAL, respondents.
FACTS
Petitioner Victorias Milling Co., Inc. (Victorias) paid real property taxes under protest for the years 1948 to 1953 on its machineries, which were assessed by the Provincial Assessor of Negros Occidental. Victorias contended that the assessor erroneously used the “fixed percentage of diminishing book value method” for depreciation instead of the “straight line method” mandated by a Department of Finance Provincial Circular dated February 7, 1940. Victorias did not appeal these assessments to the Provincial Board of Assessment Appeals as required by law. Instead, it filed a complaint for refund with the Court of First Instance of Negros Occidental in 1953. The trial court ordered a refund, but this judgment was later set aside by the Supreme Court for lack of jurisdiction, the case having been transferred to the Court of Tax Appeals (CTA). The CTA dismissed the case, ruling that the assessments were merely “erroneous,” not “illegal and void,” and therefore Victorias’s failure to exhaust the administrative remedy of appeal to the Provincial Board of Assessment Appeals was fatal.
ISSUE
Whether or not the Court of First Instance (and subsequently the Court of Tax Appeals) had jurisdiction to entertain Victorias’s complaint for refund, or whether Victorias was required to first appeal the assessments to the Provincial Board of Assessment Appeals.
RULING
The Supreme Court affirmed the decision of the Court of Tax Appeals, holding that the assessments were erroneous, not illegal and void. The Provincial Assessor had the power to make the assessments under the Assessment Law. The deviation from the prescribed “straight line method” of depreciation was an error in the exercise of that power, not an act without power. Consequently, under Section 17 of the Assessment Law, Victorias’s exclusive remedy was to appeal to the Provincial Board of Assessment Appeals within 60 days. By failing to exhaust this administrative remedy, Victorias could not resort directly to the courts. The doctrine of primacy of administrative remedy applies, vesting initial jurisdiction in the Provincial Board of Assessment Appeals to the exclusion of the courts. The petition was dismissed.