G.R. No. L-25181 January 11, 1967
AUYONG HIAN (HONG WHUA HANG), petitioner-appellant, vs. THE HONORABLE COURT OF TAX APPEALS and COLLECTOR OF CUSTOMS, and COMMISSIONER OF CUSTOMS, respondents-appellees.

FACTS

Petitioner Auyong Hian was granted four no-dollar remittance licenses to import Virginia leaf tobacco on June 30, 1953, the day the Import Control Law (Republic Act 650) expired. The shipment of 600 hogsheads of tobacco arrived on December 30, 1961. The Collector of Customs refused its release. Petitioner filed a mandamus action in the Court of First Instance of Manila (Civil Case No. 49639), which ordered the release upon filing a bond. In G.R. No. L-19597 (Climaco, et al. v. Barcelona, et al.), the Supreme Court ruled on July 31, 1962, that the CFI had no jurisdiction and declared the importation illegal as it was made long after the Import Control Law expired and contravened Republic Acts Nos. 698 and 1194. Subsequently, on November 8, 1962, the Collector of Customs instituted seizure proceedings (Seizure Identification No. 6669). On April 23, 1963, the Collector declared the tobacco forfeited and ordered its sale. Petitioner appealed to the Commissioner of Customs. Meanwhile, in a separate civil case (No. 53874) filed by Tomas Cloma against Auyong Hian, Judge Francisco Arca issued a writ of attachment and later a preliminary injunction against the Collector of Customs to prevent the sale. In G.R. No. L-21839 (Collector of Customs, et al. v. Arca, et al.), the Supreme Court ruled on July 17, 1964, that Judge Arca had no jurisdiction and set aside his orders, reiterating that the importation was illegal. The Supreme Court, however, maintained a preliminary injunction restraining the Collector from selling the tobacco. The Commissioner of Customs affirmed the Collector’s forfeiture decision on December 7, 1964. Petitioner appealed to the Court of Tax Appeals (CTA Case No. 1560). The respondents filed a motion to dismiss, arguing the Supreme Court’s decisions in the Barcelona and Arca cases constituted res judicata. The CTA granted the motion to dismiss, stating the issues had already been conclusively settled by the Supreme Court. Petitioner appealed this CTA resolution.

ISSUE

Whether the Court of Tax Appeals erred in dismissing petitioner’s appeal from the decision of the Commissioner of Customs on the ground of res judicata, given the prior Supreme Court rulings declaring the importation illegal.

RULING

The Supreme Court set aside the resolutions of the Court of Tax Appeals and remanded the case for further proceedings. The Court held that the doctrine of res judicata did not apply. The issues decided in the prior Supreme Court cases (G.R. No. L-19597 and G.R. No. L-21839) were limited to the jurisdiction of the Courts of First Instance to interfere with customs seizure proceedings and to the legality of the importation based on the expiration of the Import Control Law and contravention of other laws. The appeal before the CTA raised distinct issues: (1) whether the seizure and forfeiture proceedings were conducted in accordance with the Tariff and Customs Code, (2) whether the alleged sale of the tobacco to the Consolidated Tobacco Industries of the Philippines (CTIP) was valid, and (3) whether the release of the tobacco to CTIP by the Collector was legal. These issues pertaining to the regularity of the customs administrative proceedings and the disposition of the seized property were not and could not have been litigated in the prior cases, which were certiorari proceedings questioning judicial jurisdiction. Therefore, the CTA had jurisdiction to entertain the appeal and should proceed to determine it on the merits.