GR L 5692; (March, 1954) (Digest)
G.R. No. L-5692 March 5, 1954
SURIGAO CONSOLIDATED MINING CO., INC., plaintiff-appellant, vs. THE ADMINISTRATOR OF INTERNAL REVENUE, defendant-appellee.
FACTS
On February 26, 1948, the plaintiff, Surigao Consolidated Mining Co., Inc., filed a complaint in the Court of First Instance of Manila against the Administrator of Internal Revenue. The plaintiff sought the refund of the sum of P17,051.14 with legal interest, which it claimed was an excess amount collected by the defendant as ad valorem tax on gold extracted from its mining claim. During the hearing on February 28, 1952, the judge, upon being informed of the creation of the Board of Tax Appeals, ordered the Solicitor General to submit a memorandum. Subsequently, on March 12, 1952, the court, believing that the Board of Tax Appeals created by the President under Executive Order No. 401-A, series of 1951, had exclusive jurisdiction over the case, dismissed the complaint without costs. The plaintiff appealed this order of dismissal.
ISSUE
Whether the Board of Tax Appeals, created by the President through Executive Order No. 401-A, has exclusive jurisdiction to hear appeals against resolutions of the Administrator of Internal Revenue regarding the refund of taxes erroneously collected, thereby depriving the Courts of First Instance of their jurisdiction over such cases.
RULING
The Supreme Court reversed the order of dismissal. The Court held that while Republic Act No. 422 authorized the President to reorganize the various offices of the executive department, the judicial branch was not included. The power to “define, prescribe and apportion the jurisdiction of the various courts” is vested exclusively in Congress under Article VIII, Section 2 of the Constitution . By providing in Executive Order No. 401-A that the Board of Tax Appeals would have exclusive jurisdiction over appeals concerning tax refunds, the President effectively deprived the Courts of First Instance of their jurisdiction over such cases. This action contravened the express constitutional provision. Citing the precedent set in University of Santo Tomas vs. Board of Tax Appeals (G.R. No. L-5701, June 23, 1953), the Court emphasized that it is dangerous to allow the Chief Executive to alter court jurisdiction through executive orders, as it invests him with a power he does not possess. The case was remanded to the court of origin for further proceedings. No costs were awarded.