Jurisdiction of CTA 2016

TAXATION LAW | Jurisdiction of CTA | 2016 A.

final and executory assessments for taxes, fees, charges and penalties: Provided, however, That collection cases where the principal amount of taxes and fees, exclusive of charges and penalties, claimed is less than One million pesos (P1,000,000.00) shall be tried by the proper Municipal Trial Court, Metropolitan Trial Court and Regional Trial Court.

Jurisdiction of the Court of Tax Appeals

Section 7 Republic Act No. 1125, as amended by Republic Act No. 9282 The CTA shall exercise: a.

Exclusive appellate jurisdiction to review by appeal, appeal, as herein provided: 2. 1.

2.

3.

4.

5.

6.

7.

b.

Exclusive appellate jurisdiction in tax collection cases: a Over appeals from the judgments, resolutions or orders of the Regional Trial Courts in tax collection cases originally decided by them, in their respective territorial jurisdiction. b Over petitions for review of the judgments, resolutions or orders of the Regional Trial Courts in the Exercise of their appellate jurisdiction over tax collection cases originally decided by the Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts, in their respective  jurisdiction.

RULE 4 RRCTA JURISDICTION OF THE COURT SECTION 1. Jurisdiction of the Court.  Court.  – The Court shall exercise exclusive original jurisdiction over or appellate jurisdiction to review by appeal the cases specified in Republic Act No. 1125, Section 7, as amended by Republic Act No. 9282, Section 7. (n) SEC. 2. Cases within the jurisdiction of the Court en banc. – banc. – The Court en banc shall exercise exclusive appellate jurisdiction to review by appeal the following: (a) Decisions or resolutions on motions for reconsideration or new trial of the Court in Divisions in the exercise of its exclusive appellate jurisdiction over: (1) Cases arising from administrative agencies – Bureau of Internal Revenue, Bureau of Customs, Department of Finance, Department of Trade and Industry, Department of Agriculture; (2) Local tax cases decided by the Regional Trial Courts in the exercise of their original jurisdiction; and (3) Tax collection cases decided by the Regional Trial Courts in the exercise of their original jurisdiction involving final and executory assessments for taxes, fees, charges and penalties, where the principal amount of taxes and penalties claimed is less than one million pesos; (b) Decisions, resolutions or orders of the Regional Trial Courts in local tax cases decided or resolved by them in the exercise of their appellate jurisdiction;

Jurisdiction over cases involving criminal offenses as herein provided: 1.

2.

c.

Decisions of the Commissioner of Internal Internal Revenue in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties in relation thereto, or other matters arising under the National Internal Revenue or other laws administered by the Bureau of Internal Revenue; Inaction by the Commissioner of Internal Revenue in cases cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties in relations thereto, or other matters arising under the National Internal Revenue Code or other laws administered by the Bureau of Internal Revenue, where the National Internal Revenue Code provides a specific period of action, in which case the inaction shall be deemed a denial; Decisions, orders or resolutions of the Regional Regional Trial Courts in local tax cases originally decided or resolved by them in the exercise of their original or appellate jurisdiction; Decisions of the Commissioner of Customs in cases involving liability for customs duties, fees or other money charges, seizure, detention or release of property affected, fines, forfeitures or other penalties in relation thereto, or other matters arising under the Customs Law or other laws administered by the Bureau of Customs; Decisions of the Central Board of Assessment Assessment Appeals in the exercise of its appellate jurisdiction over cases involving the assessment and taxation of real property originally decided by the provincial or city board of assessment appeals; Decisions of the Secretary of Finance Finance on customs cases elevated to him automatically for review from decisions of the Commissioner of Customs which are adverse to the Government under Section 2315 of the Tariff and Customs Code; Decisions of the Secretary of Trade Trade and and Industry, Industry, in the case of nonagricultural product, commodity or article, and the Secretary of Agriculture in the case of agricultural product, commodity or article, involving dumping and countervailing duties under Section 301 and 302, respectively, of the Tariff and Customs Code, and safeguard measures under Republic Act No. 8800, where either party may appeal the decision to impose or not to impose said duties.

Exclusive original jurisdiction over all criminal offenses arising from violations of the National Internal Revenue Code or Tariff and Customs Code and other laws administered by the Bureau of Internal Revenue or the Bureau of Customs: Provided, however, That offenses or felonies mentioned in this paragraph where the principal amount o taxes and fees, exclusive of charges and penalties, claimed is less than One million pesos (P1,000,000.00) or where there is no specified amount claimed shall be tried by the regular Courts and the jurisdiction of the CTA shall be appellate. Any provision of law or the Rules of Court to the contrary notwithstanding, the criminal action and the corresponding civil action for the recovery of civil liability for taxes and penalties shall at all times be simultaneously instituted with, and jointly determined in the same proceeding by the CTA, the filing of the criminal action being deemed to necessarily carry with it the filing of the civil action, and no right to reserve the filling of such civil action separately from the criminal action will be recognized. Exclusive appellate jurisdiction in criminal offenses: a. Over appeals from the judgments, resolutions or orders of the Regional Trial Courts in tax cases originally decided by them, in their respected territorial jurisdiction. b. Over petitions petitions for review of the judgments, resolutions or orders of the Regional Trial Courts in the exercise of their appellate jurisdiction over tax cases originally decided by the Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts in their respective jurisdiction.

Jurisdiction over tax collection cases as herein provided: 1.

(c) Decisions, resolutions or orders of the Regional Trial Courts in tax collection cases decided or resolved by them in the exercise of their appellate jurisdiction; (d) Decisions, resolutions or orders on motions for reconsideration or new trial of the Court in Division in the exercise of its exclusive original jurisdiction over tax collection cases; (e) Decisions of the Central Board of Assessment Appeals (CBAA) in the exercise of its appellate jurisdiction over cases involving the assessment and taxation of real property originally decided by the provincial or city board of assessment appeals; (f) Decisions, resolutions or orders on motions for reconsideration or new trial of the Court in Division in the exercise of its exclusive original jurisdiction over cases involving criminal offenses arising from violations of the National Internal Revenue Code or the Tariff and Customs Code and other laws administered by the Bureau of Internal Revenue or Bureau of Customs; (g) Decisions, resolutions or orders on motions for reconsideration or new trial of the Court in Division in the exercise of its exclusive appellate jurisdiction over criminal offenses mentioned in the preceding subparagraph; and (h) Decisions, resolutions or orders of the Regional trial Courts in the exercise of their appellate jurisdiction over criminal offenses mentioned in subparagraph (f). (n) SEC. 3. Cases within the jurisdiction of the Court in Divisions.  Divisions.   – The Court in Divisions shall exercise: (a) Exclusive original or appellate jurisdiction to review by appeal the following: (1) Decisions of the Commissioner of Internal Revenue in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties in relation thereto, or other matters arising under the National Internal Revenue Code or other laws administered by the Bureau of Internal Revenue;

Exclusive original jurisdiction in tax collection cases involving

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TAXATION LAW | Jurisdiction of CTA | 2016 (2) Inaction by the Commissioner of Internal Revenue in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties in relation thereto, or other matters arising under the National Internal Revenue Code or other laws administered by the Bureau of Internal Revenue, where the National Internal Revenue Code or other applicable law provides a specific period for action: Provided, that in case of disputed assessments, the inaction of the Commissioner of Internal Revenue within the one hundred eighty day-period under Section 228 of the National Internal revenue Code shall be deemed a denial for purposes of allowing the taxpayer to appeal his case to the Court and does not necessarily constitute a formal decision of the Commissioner of Internal Revenue on the tax case; Provided, further, that should the taxpayer opt to await the final decision of the Commissioner of Internal Revenue on the disputed assessments beyond the one hundred eighty day-period abovementioned, the taxpayer may appeal such final decision to the Court under Section 3(a), Rule 8 of these Rules; and Provided, still further, that in the case of claims for refund of taxes erroneously or illegally collected, the taxpayer must file a petition for review with the Court prior to the expiration of the two-year period under Section 229 of the National Internal Revenue Code; (3) Decisions, resolutions or orders of the Regional Trial Courts in local tax cases decided or resolved by them in the exercise of their original jurisdiction; (4) Decisions of the Commissioner of Customs in cases involving liability for customs duties, fees or other money charges, seizure, detention or release of property affected, fines, forfeitures of other penalties in relation thereto, or other matters arising under the Customs Law or other laws administered by the Bureau of Customs; (5) Decisions of the Secretary of Finance on customs cases elevated to him automatically for review from decisions of the Commissioner of Customs adverse to the Government under Section 2315 of the Tariff and Customs Code; and (6) Decisions of the Secretary of Trade and Industry, in the case of nonagricultural product, commodity or article, and the Secretary of Agriculture, in the case of agricultural product, commodity or article, involving dumping and countervailing duties under Section 301 and 302, respectively, of the Tariff and Customs Code, and safeguard measures under Republic Act No. 8800, where either party may appeal the decision to impose or not to impose said duties; (b) Exclusive jurisdiction over cases involving criminal offenses, to wit: (1) Original jurisdiction over all criminal offenses arising from violations of the National internal Revenue Code or Tariff and Customs Code and other laws administered by the Bureau of Internal Revenue of the Bureau of Customs, where the principal amount of taxes and fees, exclusive of charges and penalties, claimed is one million pesos or more; and (2) Appellate jurisdiction over appeals from the judgments, resolutions or orders of the Regional Trial Courts in their original jurisdiction in criminal offenses arising from violations of the National Internal Revenue Code or Tariff and Customs Code and other laws administered by the Bureau of Internal Revenue or Bureau of Customs, where the principal amount of taxes and fees, exclusive of charges and penalties, claimed is less than one million pesos or where there is no specified amount claimed; (c) Exclusive jurisdiction over tax collections cases, to wit: (1) Original jurisdiction in tax collection cases involving final and executory assessments for taxes, fees, charges and penalties, where the principal amount of taxes and fees, exclusive of charges and penalties, claimed is one million pesos or more; and (2) Appellate jurisdiction over appeals from the judgments, resolutions or orders of the Regional Trial Courts in tax collection cases originally decided by them within their respective territorial jurisdiction. (n)

1. Exclusive appellate jurisdiction over civil tax cases a) Cases within the jurisdiction of the CTA Divisions (1)

Decisions of the Commissioner of Internal Revenue in “Disputed  Assessments”

Philippine Amusement and Gaming Corporation v. Bureau of Internal Revenue G.R. No. 208731, January 27, 2016 Facts: PAGCOR received a FAN on 17 January 2008, filed its protest to the FAN addressed to RD Misajon on 24 January 2008, filed yet another protest

addressed to the CIR on 14 August 2008, and then filed a petition before the CTA on 11 March 2009. There was no action on PAGCOR's protests filed on 24 January 2008 and 14 August 2008. PAGCOR would like this Court to rule that its protest before the CIR starts a new period from which to determine the last day to file its petition before the CTA. Held: The relevant portions of Section 228 of the NIRC of 1997 provide: SEC. 228. Protesting of Assessment. - When the Commissioner or his duly authorized representative finds that proper taxes should be assessed, he shall first notify the taxpayer of his f indings: x x x. xxxx Within a period to be prescribed by implementing rules and regulations, the taxpayer shall be required to respond to said notice. If the taxpayer fails to respond, the Commissioner or his duly authorized representative shall issue an assessment based on his findings. Such assessment may be protested administratively by filing a request for reconsideration or reinvestigation within thirty (30) days from receipt of the assessment in such form and manner as may be prescribed by implementing rules and regulations. Within sixty (60) days from filing of the protest, all relevant supporting documents shall have been submitted; otherwise, the assessment shall become final. If the protest is denied in whole or in part, or is not acted upon within one hundred eighty (180) days from submission of documents, the taxpayer adversely affected by the decision or inaction may appeal to the Court of Tax  Appeals within thirty (30) days from receipt of the said decision, or from the lapse of one hundred eighty (180)-day period; otherwise, the decision shall become final, executory and demandable.

Section 3.1.5 of Revenue Regulations No. 12-99, implementing Section 228 above, provides: 3.1.5. Disputed Assessment. - The taxpayer or his duly authorized representative may protest administratively against the aforesaid formal letter of demand and assessment notice within thirty (30) days from date of receipt t hereof, x x x. xxxx If the taxpayer fails to file a valid protest against the formal letter of demand and assessment notice within thirty (30) days from date of receipt thereof, the assessment shall become final, executory and demandable. If the protest is denied, in whole or in part, by the Commissioner, the taxpayer may appeal to the Court of Tax Appeals within thirty (30) days from the date of receipt of the said decision, otherwise, the assessment shall become final, executory and demandable. In general, if the protest is denied, in whole or in part, by the Commissioner or his duly authorized representative, the taxpayer may appeal to the Court of Tax  Appeals within thirty (30) days from date of receipt of the said decision, otherwise, the assessment shall become final executory and demandable: Provided, however, that if the taxpayer elevates his protest to the Commissioner within thirty (30) days from date of receipt of the final decision of the Commissioner's duly authorized representative, the latter's decision shall not be considered final, executory and demandable, in which case, the protest shall be decided by the Commissioner. If the Commissioner or his duly authorized representative fails to act on the taxpayer's protest within one hundred eighty (180) days from date of submission, by the taxpayer, of the required documents in support of his protest, the taxpayer may appeal to the Court of Tax Appeals within thirty (30) days from the lapse of the said 180-day period, otherwise the assessment shall become final, executory and demandable. Following the verba legis  doctrine, the law must be applied exactly as worded 15 since it is clear, plain, and unequivocal.  A textual reading of Section 3.1.5 gives a protesting taxpayer like PAGCOR only three options: 1. If the protest is wholly or partially denied by the CIR or   his authorized representative, then the taxpayer may appeal to the CTA within 30 days from receipt of the whole or partial denial of the protest. 2. If the protest is wholly or partially denied by the CIR's authorized representative, then the taxpayer may appeal to the CIR within 30 days from receipt of the whole or partial denial of the protest. 3. If the CIR or his authorized representative failed to act upon the protest within 180 days from submission of the required supporting documents, then the taxpayer may appeal to the CTA within 30 days from the lapse of the 180-day period.

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TAXATION LAW | Jurisdiction of CTA | 2016 To further clarify the three options: A whole or partial denial by the CIR's authorized representative may be appealed to the CIR or the CTA. A whole or partial denial by the CIR may be appealed to the CTA. The CIR or the CIR's authorized representative's failure to act may be appealed to the CTA. There is no mention of an appeal to the CIR from the failure to act by the CIR's authorized representative. PAGCOR did not wait for the RD or the CIR's decision on its protest. PAGCOR made separate and   successive filings before the RD and the CIR before it filed its petition with the CTA. We shall illustrate below how PAGCOR failed to follow the clear directive of Section 228 and Section 3.1.5. PAGCOR's protest to the RD on 24 January 2008 was filed within the 30-day period prescribed in Section 228 and Section 3.1.5. The RD did not release any decision on PAGCOR's protest; thus, PAGCOR was unable to make use of the first option as described above to justify an appeal to the CTA. The effect of the lack of decision from the RD is the same, whether we consider PAGCOR's April 2008 submission of documents or not. Under the third option described above, even if we grant leeway to PAGCOR and consider its unspecified April 2008 submission, PAGCOR still should have waited for the RD's decision until 27 October 2008, or 180 days from 30 April 2008. PAGCOR then had 30 days from 27 October 2008, or until 26 November 2008, to file its petition before the CTA. PAGCOR, however, did not make use of the third option. PAGCOR did not file a petition before the CTA on or before 26 November 2008. Under the second option, PAGCOR ought to have waited for the RD's whole or partial denial of its protest before it filed an appeal before the CIR. PAGCOR rendered the second option moot when it formulated its own rule and chose to ignore the clear text of Section 3.1.5. PAGCOR "elevated an appeal" to the CIR on 13 August 2008 without  any decision from the RD, then filed a petition before the CTA on 11 March 2009. A textual reading of Section 228 and Section 3.1.5 will readily show that neither Section 228 nor Section 3.1.5 provides for the remedy of an appeal to the CIR in case of the RD's failure to act. The third option states that the remedy for failure to act by the CIR or his authorized representative is to file an appeal to the CTA within 30 days after the lapse of 180 days from the submission of the required supporting documents. PAGCOR clearly failed to do this. If we consider, for the sake of argument, PAGCOR's submission before the CIR as a separate protest and not as an appeal, then such protest should be denied for having been filed out of time. PAGCOR only had 30 days from 17 January 2008 within which to file its protest. This period ended on 16 February 2008. PAGCOR filed its submission before the CIR on 13 August 2008. When PAGCOR filed its petition before the CTA, it is clear that PAGCOR failed to make use of any of the three options described above. A petition before the CTA may only be made after a whole or partial denial of the protest by the CIR or the CIR's authorized representative. When PAGCOR filed its petition before the CTA on 11 March 2009, there was still no denial of PAGCOR's protest by either the RD or the CIR. Therefore, under the first option, PAGCOR's petition before the CTA had no cause of action because it was prematurely filed. The CIR made an unequivocal denial of PAGCOR's protest only on 18 July 2011, when the CIR sought to collect from PAGCOR the amount of P46,589,507.65. The CIR's denial further puts PAGCOR in a bind, because it can no longer amend its petition before the CTA. NOTES: FDDA issued by a representative Deemed denial – BIR does not lose jurisdiction VAT refund under 112 excess unutilized – denial – when 120 days lapses the BIR can no longer process the refund (2)

Decisions of the Commissioner of Internal Revenue in “Other matters”

The appellate jurisdiction of the CTA is not limited to cases which involve decisions of the Commissioner of Internal Revenue on matters relating to assessments or refunds. The second part of the provision covers other cases that arise out of the NIRC or related laws administered by the Bureau of Internal Revenue. The wording of the provision is clear and simple. It gives the CTA the  jurisdiction to determine if the warrant of distraint and levy issued by the BIR is valid and to rule if the Waiver of Statute of Limitations was validly effected. This is not the first case where the CTA validly ruled on issues that did not relate directly to a disputed assessment or a claim for refund. In Pantoja v. David, we upheld the jurisdiction of the CTA to act on a petition to invalidate and annul the distraint orders of the Commissioner of Internal Revenue. Also, in Commissioner of Internal Revenue v. Court of Appeals, the decision of the CTA declaring several waivers executed by the taxpayer as null and void, thus invalidating the assessments issued by the BIR, was upheld by this Court. [Philippine Journalist,

Inc. v. Commissioner of Internal Revenue, G.R. No. 162852, December 16, 2004] Commissioner of Internal Revenue v. Hambrecht & Quist Philippines G.R. No. 169225, November 17, 2010 Facts: CIR argued that, after the lapse of the 30-day period to protest, respondent (taxpayer) may no longer dispute the correctness of the assessment and its appeal to the CTA should be dismissed. The CIR took issue with the CTAs pronouncement that it had jurisdiction to decide other matters related to the tax assessment such as the issue on the right to collect the same since the CIR maintains that when the law says that the CTA has jurisdiction over other matters, it presupposes that the tax assessment has not become final and unappealable. Ruling: The term other matters is limited only by the qualifying phrase that follows it. Thus, on the strength of such observation, we have previously ruled that the appellate jurisdiction of the CTA is not limited to cases which involve decisions of the CIR on matters relating to assessments or refunds. The second part of the provision covers other cases that arise out of the National Internal Revenue Code (NIRC) or related laws administered by the Bureau of Internal Revenue (BIR). In the case at bar, the issue at hand is whether or not the BIRs right to collect taxes had already prescribed and that is a subject matter falling under Section 223(c) of the 1986 NIRC, the law applicable at the time the disputed assessment was made. In connection therewith, Section 3 of the 1986 NIRC states that the collection of taxes is one of the duties of the BIR. Thus, from the foregoing, the issue of prescription of the BIRs right to collect taxes may be considered as covered by the term other matters over which the CTA has appellate jurisdiction. Furthermore, the phraseology of Section 7, number (1), denotes an intent to view the CTAs jurisdiction over disputed assessments and over other matters arising under the NIRC or other laws administered by the BIR as separate and independent of each other. This runs counter to petitioners theory that the latter is qualified by the status of the former, i.e., an other matter must not be a final and unappealable tax assessment or, alternatively, must be a disputed assessment. Commissioner of Internal Revenue vs. Corporation CTA EB Case No. 1149 dated March 3, 2016

SVI

Information

Services

Facts: SVI Information Services Corporation is a domestic corporation principally engaged in the business of providing information and related services in the areas of information technology, finance, economics, investments, and real estate. The Commissioner issued a Letter of Authority authorizing the examination of the books of accounts and other financial records of SVI for the taxable year 2007. Subsequently, SVI received a FAN and a Formal Letter of Demand. Thus, it filed a Petition for Review where the Second Division decided in favor of SVI on the ground, among others, of prescription. The Commissioner then filed a Petition for Review seeking the reversal of the decision of the Second Division on the ground of lack of jurisdiction of the CTA to decide on the Payment Collection Letter. The Commissioner argued that what is involved is not a collection case but a dispute as to the validity of the Payment Collection Letter.  According to the Commissioner, deciding on such issue is tantamount to suspending payment, levy, distraint, and/ or sale of any property. Ruling: Citing Commissioner of Internal Revenue vs. Hambrecht & Quist Philippines, CTA ruled that its jurisdiction is not limited to cases which involve decisions of the CIR on matters relating to assessments or refunds. The second part of the Section 7(a)(1) of Republic Act No. 1125 covers other cases that arise out of the National Internal Revenue Code. Thus, the Second Division had the jurisdiction issue the assailed decision. The CTA also annulled the assessment made by the BIR for violation of SVI’s right to due process. In this case, the Commissioner failed to prove the delivery and receipt of the PAN after SVI denied receiving the same. The fact that SVI received the FAN and the Formal Letter of Demand will not suffice to accord due process to SVI. Thus, the assessment made by the BIR was annulled. Commissioner of Internal Revenue v. Leal, G.R. No. 113459, November 18, 2002

Asia International Auctioneers, Inc. v. Parayno G.R. No. 163445, December 18, 2007 Facts: Petitioners contend that jurisdiction over the case at bar properly pertains to the regular courts as this is an action to declare as unconstitutional, void and against the provisions of [R.A. No.] 7227 the RMCs issued by the CIR. They explain that they do not challenge the rate, structure or figures of the imposed taxes, rather they challenge the authority of the respondent Commissioner to impose and collect the said taxes. They claim that the challenge on the authority of the CIR to

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TAXATION LAW | Jurisdiction of CTA | 2016 issue the RMCs does not fall within the jurisdiction of the Court of Tax Appeals (CTA). Ruling: RMCs are considered administrative rulings  which are issued from time to time by the CIR. In the case at bar, the assailed revenue regulations and revenue memorandum circulars are actually rulings or opinions of the CIR on the tax treatment of motor vehicles sold at public auction within the SSEZ to implement Section 12 of R.A. No. 7227 which provides that exportation or removal of goods from the territory of the [SSEZ] to the other parts of the Philippine territory shall be subject to customs duties and taxes under the Customs and Tariff Code and other relevant tax laws of the Philippines. They were issued pursuant to the power of the CIR under Section 4 of the National Internal Revenue Code. Petitioners failure to ask the CIR for a reconsideration of the assailed revenue regulations and RMCs is another reason why the instant case should be dismissed. It is settled that the premature invocation of the court's intervention is fatal to one's cause of action. I f a remedy within the administrative machinery can still be resorted to by giving the administrative officer every opportunity to decide on a matter that comes within his jurisdiction, then such remedy must first be exhausted before the courts power of judicial review can be sought. The party with an administrative remedy must not only initiate the prescribed administrative procedure to obtain relief but also pursue it to its appropriate conclusion before seeking judicial intervention in order to give the administrative agency an opportunity to decide the matter itself correctly and prevent unnecessary and premature resort to the court.

b) Cases within the jurisdiction of the CTA En Banc Section 2, Rule 4, RRCTA The Court en banc shall exercise exclusive appellate  jurisdiction to review by appeal the following: (a) Decisions or resolutions on motions for reconsideration or new trial of the Court in Divisions in the exercise of its exclusive appellate jurisdiction over: (1)

Cases arising from administrative agencies – Bureau of Internal Revenue, Bureau of Customs, Department of Finance, Department of Trade and Industry, Department of Agriculture;

(2)

Local tax cases decided by the Regional Trial Courts in the exercise of their original jurisdiction; and

(3)

Tax collection cases decided by the Regional Trial Courts in the exercise of their original jurisdiction involving final and executory assessments for taxes, fees, charges and penalties, where the principal amount of taxes and penalties claimed is less than one million pesos;

(b) Decisions, resolutions or orders of t he Regional Trial Courts in local tax cases decided or resolved by them in the exercise of their appellate jurisdiction; (c) Decisions, resolutions or orders of the Regional Trial Courts in tax collection cases decided or resolved by them in the exercise of their appellate jurisdiction;

Can CTA rule on the validity of revenue regulations and memorandum? YES. CTA is deemed granted with powers of certiorari by implication. CTA can now rule not only on the propriety of an assessment or tax treatment of a certain transaction, but also on the validity of the revenue regulation or revenue memorandum circular on which the said assessment is based. (Philippine  American Life and General Insurance Company v. Secretary of Finance and Commissioner of Internal Revenue, G.R. No. 210987, November 24, 2014) Can a party directly file a petition for review under Rule 65 to the SC assailing the validity of a BIR Ruling without taking the matter to the CTA? YES, provided that the nature and importance of the issues raised and the novelty thereof constitute exceptional and compelling circumstance to justify resort to the SC in the first instance. Generally, review of CIR rulings fall within the jurisdiction of the CTA. However, direct recourse to the Supreme Court may be allowed when it is dictated by public welfare and the advancement of public policy, or demanded by the broader interest of justice, or the orders complained of were found to be patent nullities, or the appeal was considered as clearly an inappropriate remedy. (Banco de Oro v. Republic, G.R. No. 198756, January 13, 2015)

(d) Decisions, resolutions or orders on motions for reconsideration or new trial of the Court in Division in the exercise of its exclusive original jurisdiction over tax collection cases; (e) Decisions of the Central Board of Assessment Appeals (CBAA) in the exercise of its appellate jurisdiction over cases involving the assessment and taxation of real property originally decided by the provincial or city board of assessment appeals; (f) Decisions, resolutions or orders on motions for reconsideration or new trial of the Court in Division in the exercise of its exclusive original jurisdiction over cases involving criminal offenses arising from violations of the National Internal Revenue Code or the Tariff and Customs Code and other laws administered by the Bureau of Internal Revenue or Bureau of Customs; (g) Decisions, resolutions or orders on motions for reconsideration or new trial of the Court in Division in the exercise of its exclusive appellate jurisdiction over criminal offenses mentioned in the preceding subparagraph; and (h) Decisions, resolutions or orders of the Regional trial Courts in the exercise of their appellate jurisdiction over criminal offenses mentioned in subparagraph (f).

Does the CTA has jurisdiction over tax abatement cases? YES. The CTA has the power to determine whether or not petitioner’s previously denied application for abatement of surcharge should be granted. Such is within the jurisdiction of the CTA under “other matters arising under the National Internal Revenue or other laws administered by the BIR.” [Qatar Company v. Commissioner of Internal Revenue, CTA Case No. 8816, January 22, 2016]

The appellate jurisdiction of this Court is not limited to cases which involve decisions of the Commissioner of Internal Revenue on matters relating to assessments or refunds. This Court also has jurisdiction in other cases that arise out of the NIRC or related laws administered by the Bureau of Internal Revenue pursuant to Section 7 (a) (1) of Republic Act (RA) No. 1125, An Act Creating the Court of Tax Appeals, as amended ,as well as Rule 4, Section 3 (a) (1), in relation to Rule 8, Section 4(a), of the RRCTA. [Commissioner of Internal Revenue v. Elric Auxiliary Services, Inc., CTA EB No. 1174, March 3, 2016] (3) Decisions of Commissioner of Customs

(1) Divisions

Decisions of the CTA

Can an aggrieved party directly appeal to the SC under Rule 45 assailing an adverse decision and resolution of a CTA Division? NO. The CTA En Banc has exclusive jurisdiction over appeals from the decisions of its divisions pursuant to Section 2 Rule 4 of RRCTA. [ Duty Free Philippines v. Bureau of Internal Revenue, G.R. No. 197228, October 8, 2014] (a) Interlocutor  y Orders by CTA Divisions Can a denial to Motion to Quash by CTA Division be a proper subject of an appeal or a petition for certiorari?

the

Can CTA review the validity of a ruling interpreting tax laws issued by the CIR or COC? NO. The CTA has no jurisdiction to determine the validity of a ruling issued by the CIR or the COC in the exercise of their quasi-legislative powers to interpret tax laws. The CTA is a court of special jurisdiction, with power to review by appeal decisions involving tax disputes rendered by either the CIR or the COC. CTA has exclusive appellate jurisdiction over cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties imposed in relation thereto, or other matters arising under t his Code or other laws or portions thereof administered by the BIR. (Commissioner of Internal Revenue v. Court of Tax Appeals and Petron Corporation, G.R. No. 207843, July 15, 2015)

 As a general rule, the denial of a motion to quash is an interlocutory order which is not the proper subject of an appeal or a petition for certiorari. This is to avoid multiplicity of appeals in a single action, which necessarily suspend the hearing and decision on the merits of the case during the pendency of the appeal. If such appeal were allowed, the trial on the merits of the case would necessarily be delayed for a considerable length of time, and compel the adverse party to incur unnecessary expenses, for one of the parties may interpose as many appeals as incidental questions may be raised by him, and interlocutory orders rendered or issued by the lower court. While the general rule proscribes the appeal of an interlocutory order, there are also recognized exceptions to the same. The general rule is not absolute. Where special circumstances clearly demonstrate the inadequacy of an appeal, then the special civil action of certiorari  or prohibition may exceptionally be allowed. This Court recognizes that under certain situations, recourse to extraordinary legal remedies, such as a petition for certiorari , is considered proper to question the denial of a motion to quash (or

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TAXATION LAW | Jurisdiction of CTA | 2016 any other interlocutory order) in the interest of a more enlightened and substantial justice; or to promote public welfare and public policy; or when the cases have attracted nationwide attention, making it essential to proceed with dispatch in the consideration thereof; or when the order was rendered with grave abuse of discretion. Certiorari  is an appropriate remedy to assail an interlocutory order (1) when the tribunal issued such order without or in excess of jurisdiction or with grave abuse of discretion; and (2) when the assailed interlocutory order is patently erroneous, and the remedy of appeal would not afford adequate and expeditious relief. Recourse to a petition for certiorari to assail an interlocutory order is now expressly recognized in the ultimate paragraph of Section 1, Rule 41 of the Revised Rules of Court (Judy Anne Santos v. People G.R. No. 173176,  August 26, 2008)

Does CTA en banc have jurisdiction over interlocutory orders issued by CTA Divisions? NO. CTA en banc has jurisdiction over a final order or judgment but not over interlocutory orders issued by the CTA in division. Where the judgment or final order is not appealable, the aggrieved party may file an appropriate special civil action under Rule 65. [Commissioner of Internal Revenue v. Court of Tax  Appeals and CBK Power, G.R. No. 203054-55, July 29, 2015] Does CTA En Banc have jurisdiction over interlocutory orders issued by st CTA 1  division? NO. The CTA En Banc has jurisdiction over final order or judgment by the Court in Division but not over interlocutory order issued by the Court in Division. It cannot be subject to an appeal before the CTA En Banc except only as part of an ordinary appeal that may eventually be taken by petitioner from the final  judgment. Only final order or judgment of the Court in Division may be subject for an appeal on a motion for reconsideration or new trial to the Court En Banc by petition for review under Rule 43 of ROC. No appeal may be taken from an interlocutory order. [Macario Lim Gaw v CIR, CTA EB No. 1247, May 20, 2016] c)

Interlocutory Orders issued by RTC in the exercise of their original jurisdiction

Does CTA have appellate jurisdiction over an interlocutory order for tax refund issued by RTC? YES. The CTA has jurisdiction over a special civil action for certiorari assailing an interlocutory order issued by the RTC in a local tax case. In order for any appellate court to effectively exercise its appellate jurisdiction, it must have the authority to issue, among others, a writ of certiorari. In transferring exclusive  jurisdiction over appealed tax cases to the CTA, it can reasonably be assumed that the law intended to transfer also such power as is deemed necessary, if not indispensable, in aid of such appellate jurisdiction. There is no perceivable reason why the transfer should only be considered as partial, not total. (City of Manila v. Hon. Grecia-Cuerdo, G.R. No. 175723, February 4, 2014) d)

Validity of issuances in the exercise of quasi-legislative or rule-making powers

British American Tobacco v. Camacho G.R. No. 163583, August 20, 2008 Fact: British American Tobacco claims that the challenge to the validity of the BIR issuances should have been brought by petitioner before the Court of Tax  Appeals (CTA) and not the RTC because it is the CTA which has exclusive appellate jurisdiction over decisions of the BIR in tax disputes. Ruling: The case is properly filed before the RTC. While the above statute confers on the CTA jurisdiction to resolve tax disputes in general, this does not include cases where the constitutionality of a law or rule is challenged. Where what is assailed is the validity or constitutionality of a law, or a rule or regulation issued by the administrative agency in the performance of its quasi-legislative function, the regular courts have jurisdiction to pass upon the same. The determination of whether a specific rule or set of rules issued by an administrative agency contravenes the law or the constitution is within the jurisdiction of the regular courts. Indeed, the Constitution vests the power of judicial review or the power to declare a law, treaty, international or executive agreement, presidential decree, order, instruction, ordinance, or regulation in the courts, including the regional trial courts. This is within t he scope of judicial power, which includes the authority of the courts to determine in an appropriate action the validity of the acts of the political departments. Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government. The petition for injunction filed by petitioner

before the RTC is a direct attack on the constitutionality of Section 145(C) of the NIRC, as amended, and the validity of its implementing rules and regulations. In fact, the RTC limited the resolution of the subject case to the issue of the constitutionality of the assailed provisions. The determination of whether the assailed law and its implementing rules and regulations contravene the Constitution is within the jurisdiction of regular courts. The Constitution vests the power of judicial review or the power to declare a law, treaty, international or executive agreement, presidential decree, order, instruction, ordinance, or regulation in the courts, including the regional trial courts. [British American Tobacco v. Camacho, G.R. No. 163583, August 20, 2008] Can an aggrieved party file a petition for certiorari to the SC assailing a revenue regulation issued by the Secretary of Finance in the exercise of his quasi-legislative or rule-making power? NO, CTA en banc has no jurisdiction over the case. A petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure is a special civil action that may be invoked only against a tribunal, board or officer exercising judicial or quasi judicial functions. Respondents do not fall within the ambit of a tribunal, board, or officer exercising judicial or quasi-judicial functions. They issued RR 2-2012 in the exercise of their quasi-legislative or rule-making powers, and not judicial or quasi-judicial functions. Respondents did not adjudicate the rights of the parties. RR 2-2012 was issued by the Secretary of Finance based on Section 244 of the NIRC. The application of Section 244 of the NIRC is an exercise of quasilegislative or rule-making powers of the Secretary of Finance, and since RR 22012 was issued by the Secretary of Finance based on Section 244 of the NIRC, such administrative issuance is therefore quasi-legislative in nature which is outside the scope of a petition for certiorari. [Clark Investors and Locators  Association v. Secretary of Finance, G.R. No. 200670, July 6, 2015]  Does CTA have jurisdiction to review by appeal, decisions of the customs collector? NO. A party adversely affected by a ruling or decision of the customs collector may protest such ruling or decision upon payment of the amount due and, if aggrieved by the action of the customs collector on the matter under protest, may have the same reviewed by the COC. It is only after the COC shall have made an adverse ruling on the matter may the aggrieved party file an appeal to the CTA. The CIR’s interpretation of a tax provision involves an exercise of her quasilegislative functions; the proper recourse against it is a r eview by the Secretary of Finance and ultimately to the regular courts. [Commissioner of Internal Revenue v. Court of Tax Appeals and Petron Corporation, G.R. No. 207843, July 15, 2015]  Does CTA have jurisdiction over the validity of Customs Circulars and CIR Ruling or opinion? NO. The proper recourse should have been with the Secretary of Finance and then with the regular courts, thereby complying with the rule of exhaustion of remedies. When it comes to the constitutionality of a law, rule, or regulation, the CTA has no power to decide the same. The jurisdiction of the CTA to resolve tax disputes excludes the power to rule on the constitutionality or validity of a law, rule, or regulation. Such authority is vested with t he regular courts. Administrative rulings such as rulings by the BIR have been aptly described as the best guess of the moment and incidentally often contain such well-considered and sound law; but they do not prevent an entire change of front at any time and are mere advisory-sort of information to the taxpayer. In short, administrative rulings by the BIR (or the BOC) are issued basically to interpret tax laws. [Petron Corporation v. CIR CTA Case No. 8544, May 17, 2016]  Does the CTA has jurisdiction over the validity of a ruling i ssued by CIR? NO. The CIR’s interpretation of a tax provision involves an exercise of her quasilegislative functions, the proper recourse against it is a review by the Secretary of Finance and ultimately to the regular courts. The CTA is a court of special  jurisdiction, with power to review by appeal decision involving tax disputes rendered either by the CIR or the COC. Conversely, it has no jurisdiction to determine the validity of a ruling issued by the CIR or the COC in the exercise of their quasi-legislative powers to interpret tax laws. !"#$$%&&%#'() #+ ,'-()'./ 0(1('2( 13 "#2)- #+ 4.5 677(./& .'8 9(-)#' "#)7#).-%#': ;303 ?@AB: C2/D EF:  =>EFG

2.

Criminal cases a) Exclusive original jurisdiction

Section 3(b)(1), Rule 4, RRCTA Original jurisdiction over all criminal offenses arising from violations of the National internal Revenue Code or Tariff and Customs Code and other laws administered by the Bureau of Internal Revenue of the Bureau of Customs, where the principal amount of taxes and fees, exclusive of charges and penalties, claimed is one million pesos or more;

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TAXATION LAW | Jurisdiction of CTA | 2016 b)

Exclusive appellate jurisdiction

Section 3(b)(2), Rule 4, RRCTA Appellate jurisdiction over appeals from the  judgments, resolutions or orders of the Regional Trial Courts in their original  jurisdiction in criminal offenses arising from violations of the National Internal Revenue Code or Tariff and Customs Code and other laws administered by the Bureau of Internal Revenue or Bureau of Customs, where the principal amount of taxes and fees, exclusive of charges and penalties, claimed is less than one million pesos or where there is no specified amount claimed; c)

period prescribed by law is not only mandatory but also jurisdictional and failure of a party to conform to the rules regarding appeal will render the judgment final and executory. (Mitsubishi Motors Philippines Corporation v. Bureau of Customs, G.R. No. 209830, June 17, 2015)

Resolutions of the Department of Justice in Preliminary Investigations

Does the CTA has jurisdiction to review through a petition for certiorari the DOJ resolution in preliminary investigations involving tax and tariff offenses? Yes. As the CTA has jurisdiction over a special civil action for certiorari  questioning an interlocutory order of the RTC in a local tax case via express constitutional mandate and for being inherent in the exercise of its appellate  jurisdiction, it can also be reasonably concluded based on the same premise that the CTA has original jurisdiction over a petition for certiorari assailing the DOJ resolution in a preliminary investigation involving tax and tariff offenses. If the Court were to rule that jurisdiction over a petition for certiorari   assailing such DOJ resolution lies with the CA, it would be confirming the exercise by two  judicial bodies, the CA and the CTA, of jurisdiction over basically the same subject matter - precisely the split-jurisdiction situation which is anathema to the orderly administration of justice. The Court cannot accept that such was the legislative intent, especially considering that R.A. No. 9282 expressly confers on the CTA, the tribunal with the specialized competence over tax and tariff matters, the role of judicial review over local tax cases without mention of any other court that may exercise such power. Concededly, there is no clear statement under R.A. No. 1125, the amendatory R.A. No. 9282, let alone in the Constitution, that the CTA has original jurisdiction over a petition for certiorari . By virtue of Section 1, Article VIII of the 1987 Constitution, vesting judicial power in the Supreme Court and such lower courts as may be established by law, to determine whether or not there has been a grave abuse of discretion on the part of any branch or instrumentality of the Government, in relation to Section 5(5), Article VIII thereof, vesting upon it the power to promulgate rules concerning practice and procedure in all courts, the Court thus declares that the CA's original jurisdiction over a petition for certiorari   assailing the DOJ resolution in a preliminary investigation involving tax and tariff offenses was necessarily transferred to the CTA pursuant to Section 7 of R.A. No. 9282,  and that such petition shall be governed by Rule 65 of the Rules of Court, as amended. Accordingly, it is the CTA, not the CA, which has jurisdiction over the petition for certiorari assailing the DOJ resolution of dismissal of the BOC's complaint-affidavit against private respondents for violation of the TCCR. (Bureau of Customs v. Hon. Devanadera, G.R. No. 193253, September 8, 2015)

3.

Judicial action for collection of taxes

Section 3(c), Rule 4, RRCTA Original jurisdiction in tax collection cases involving final and executory assessments for taxes, fees, charges and penalties, where the principal amount of taxes and fees, exclusive of charges and penalties, claimed is one million pesos or more; a) Exclusive original jurisdiction Section 3(c)(1), Rule 4, RRCTA Original jurisdiction in tax collection cases involving final and executory assessments for taxes, fees, charges and penalties, where the principal amount of taxes and fees, exclusive of charges and penalties, claimed is one million pesos or more; b) Exclusive appellate jurisdiction Section 3(c)(2), Rule 4, RRCTA  Appellate jurisdiction over appeals from the judgments, resolutions or orders of the Regional Trial Courts in tax collection cases originally decided by them within their respective territorial jurisdiction.

Can the CA refer an appeal involving collection of taxes to the CTA instead of dismissing it outright? NO. CA has no jurisdiction over the subject matter and the only power it has is to dismiss the action. The perfection of an appeal in the manner and within the

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