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Dean, Saint Louis University School of Law, Baguio City Head of the Department of Commercial Laws and Taxation (SLU) Bar Reviewer in Commercial Laws and Taxation, Albano Bar Review Center & ChanRobles Internet Bar Review

b o 1. RThe University of the West (UW) is a non-stock, non-profit educational institution. the year, it plans torconstruct a building which will be used as n theDuring afollows: 2 to 4 floors will bea classrooms, the 5 floor will be office spaces, B the first floor will be divided into five (5) spaces which will leased to canteen s for school supplies. UW plans to charge each Ch while concessionaires and bookstores/shops e tenant monthly lease rentals of Php50,000. UW shall use all collections solely for l b educational purposes. UW inquires from you if it will be liable for the following: (a) o(b) real property tax; (c) income tax on the rentals; and (d) building permit fees; R value-added tax on leasing. Discuss. r n a a Suggested Answer: B h sbe as follows: C e The implications of the given facts upon UW shall l b (a) As to building permit fees—UWo shall be liable. The tax exemption granted to nonstock, non-profit educational institutions R under Section (4)(3), Article XIV of the 1987 r and duties all Constitution does not apply in n The said exemption frees from taxes a a this case.non-profit revenues and assets of non-stock, educational institutions which are used B h actually, directly and exclusively for educational purposes. The present imposition is not a s the project and the tax but a regulatory C fee, as it is paid to defray the cost of inspecting e l The exaction is levied plans to ensure that they are conformable with safety standards. b under the police power of the State. UW, therefore, cannot claim exemption from such o imposition. (See: Angeles University Foundation v.R City of Angeles, G.R. No. 189999, 27 June 2012) r n a a B 1987 (b) As to real property tax—UW shall be liable. Section 28(3), Article VI of the h s Cbuildings, and improvements, actually,e directly and Constitution provides that all lands, exclusively used for religious, charitable or educational purposes shall l be exempt from b taxation. Thus, for the tax exemption to apply, the property should be exclusively, or put in oproperty is used for another way, solely, used for exempt purposes. Here, a portion of the R commercial purposes. Hence, the portion that does not comply with the requirement set r ntax. However, with regard to forth by the Constitution should be subject to real property a a the portion actually, directly and exclusively used for educational purposes, no real B h property tax should be imposed. s C e l (Note: **This may no longer be part of the answer. ** Even if the income from the property b is used for educational purposes, still, the real property tax exemption will not apply o because what is meant by actual, direct and exclusive use of the property forR charitable purposes is the direct and immediate and actual application of the property anitself to the h C e l b Ro nd

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purposes for which the charitable institution is organized. It is not the use of the income from the real property that is determinative of whether the property is used for tax-exempt purposes.)

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(c) As to income tax on the rentals—UW shall not be liable. Section (4)(3), Article XIV of the 1987 Constitution provides that all revenues and assets of non-stock, non-profit educational institutions which are used actually, directly and exclusively for educational purposes shall be free from taxes and duties. It is the use, and not the source, of the income which is determinative of its exemption. The rentals collected by UW are used actually, directly and exclusively for educational purposes. Thus, the said rentals should be free from income tax.

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s e l b (Note: **This may no longer be part of the answer. ** Notwithstanding the provisions of owhich apparently imposes income tax on income by tax-exempt Section 30 of the NIRC R corporations sourced from their activities conducted for profit or from the use of their properties irrespective income, ar still, UW should not be liable an of the disposition of such B because h as a non-stock, non-profit educational institution, its exemption is not simply s by the Constitution cannot be C but constitutional. An exemptioneprovided statutory modified, altered, increased or decreased bylstatutory provisions.) b o (d) As to value-added tax on leasing—UW should not be liable. The Constitution provides R of all revenues and assets of non-stock, non-profit an omnibus exemption from taxation r for educational n educational institution which are actually, directly and exclusively a used a purposes. Value-added h tax is still a tax on the revenue; hence, it is covered by the B constitutional exemption. was able to comply s UWpurposes. C This is specially true in this case esince with the requirement that the revenue be used solely for educational l b (Note: This answer might be contrary to rulings o issued by the BIR, but between the Constitution and the rulings of the BIR, it is obvious R that the provisions of the Constitution should prevail.) r n a a Bto the 2. Congress passed a law amendingh certain provisions of the NIRC. Pursuant s C issued the implementing revenue said law, the Secretary of Finance e regulation l thereof. Mike, a taxpayer aggrieved by the amendment and its implementing rules, b filed a petition for prohibition and/or injunction before the Regional Trial Court of oof the said law and Quezon City, seeking to prohibit and/or enjoin the enforcement R its implementing rules. In his Petition, Mike advanced then argument that the said law r and its implementing rules are violative of certain provisions of the Constitution. a a The Solicitor General, on the other hand, moved to hdismiss the case due to lack of B jurisdiction on the ground that the case shouldC have been filed before the Court of s Tax Appeals. If you were the judge who will resolve the motion, would you grant it? le b Suggested Answer: Ro njurisdiction No, I will not grant the motion. While the Court of Tax Appeals (CTA) has the a to resolve tax disputes in general, where what is assailed is the validity or constitutionality h C e l b Ro www.chanroblesbar.com : www.chanroblesbar.com.ph

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of a law, or a rule or regulation issued by the administrative agency in the performance of its quasi-legislative function, the regular courts and the not the CTA have jurisdiction to pass upon the same. ( British American Tobacco v. Camacho, et al. , G.R. No. 163583 dated August 20, 2008).

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b o 3. LL is a Filipino employed by MM Corporation, a domestic corporation. MM R Corporation has a subsidiary in Indonesia, known as SS Corporation. MM rduring the latter’s startup phase, to help the n sent LL to SS Corporation a aCorporation B For the year 2012, LL stayed in Indonesia subsidiary during its takeoff operations. h a period of 8 months. Thereafter, returned to MM Corporation. While in SS C for es theheamount Corporation, LL regularlylreceived equivalent to his salaries in MM Corporation, and an additional b amount equivalent to his salary in SS Corporation; o but both payments were made by MM Corporation. Are the said amounts subject to R income tax? r n a a Suggested Answer: B h s C Philippine income tax. LL is considered as a The salaries received by LL are not subject toe l whose work required him to be physically non-resident citizen because he is a Filipino b present abroad most of the time during the taxable year (Sec. 22E, NIRC). As such nono resident citizen, he is taxable only on income derived from Philippine sources (Sec. 23, R NIRC). The salaries of LL fromn being employed abroad are incomes from rwithout because a these are compensation fora services rendered outside the Philippines (Sec. 42, NIRC). In h determining whether compensation for service rendered is from B within our without, the s C only question to address is where was the service rendered. Here, the service was rendered e were l in Indonesia. Thus, regardless of the fact that the payments made by a domestic b corporation, this will not, in itself result to the income being sourced from within the Philippines. Ro r nY due to the latter’s negligence in driving 4. In a suit for damages filed by X against a a his motor vehicle, the court awarded B h the following in favor of X: Php100,000 representing the amount spentC by X for his hospitalization and medication; s e three Php200,000 for moral and exemplary damages; Php150,000 representing l months unearned salary as X was not able to report to his employment due to his b injuries; Php30,000 lost profits, as X was not able to use his caro he was leasing R which to others; and Php600,000 representing the current replacement cost of the X’s car, r originally valued at Php500,000. Are these receipts part of a anX’s taxable income? B h Suggested Answer: s C e l The amount representing expenses for hospitalization and medication are not taxable b income because they are mere reimbursements of actual damages sustained byo X. The payments of moral and exemplary damages, as well as the three months unearned R salary, are likewise excluded from taxation as they are considered as compensationn for a personal a injury, which, under Section 32(B)(4) of the NIRC, is non-taxable. h C e l b Ro www.chanroblesbar.com : www.chanroblesbar.com.ph

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The lost profits are taxable, since there is a gain/income on the part of X that is not considered as part of compensation from personal injuries or sickness. Since the said payment is arising from profits, the same should be income taxable.

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The Php100,000 representing the difference between the current replacement cost of the car (Php600,000) and its original value (Php500,000) is taxable. In determining the gain or loss or for tax purposes, comparison must be had between the amount received as against the cost (or adjusted basis). Here, X received Php600,000 for a car costing Php500,000. The difference, therefore, is a gain that is subject to income tax.

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5. B Corporation had excessive quarterly corporate income tax payments for the year 2011 in the amount of Php50M. For the year 2012, B Corporation had income tax liability of Php30M, for which the corporation did not pay any income tax anymore, as it credited the amount from its 2011 overpayment. Since B Corporation still has a remaining overpayment of Php20M, it filed in 2013 a claim for refund of the said overpayment. Were the actions taken by B Corporation proper?

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The action of B Corporation in crediting the excessive quarterly payments for the year 2011 against the income tax liability for 2012 is proper, as this is expressly allowed by Section 76 of the NIRC. When a corporation has excessive quarterly payments, it may either file a claim for refund or credit the overpayment against the income tax liabilities of the corporation of the succeeding quarters of the next taxable years. However, the availment of this crediting scheme is irrevocable, and, as a consequence, there will be no more right to file a claim for refund which will be entertained. Consequently, the action taken by B Corporation in filing a claim for refund of Php20M is not proper. The recourse of B Corporation is to continue crediting the said amount against its income tax liabilities of the succeeding quarters until the same is exhausted.

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r a 6. ZZ, a Filipino residing in Manila, owns a residential condominium unit in B ago. California, USA, which he bought h for an amount of Php10M five years s Cuse the said condominium unit, ZZ esold the same Anticipating that he will no longer l for a consideration of Php20M. Discuss the income tax consequence of the b transaction on ZZ. o R Suggested Answer: r n a a B ZZ should declare as part of his gross income a capital h gain of Php5M. As a resident citizen, s ZZ shall be liable for income tax on every income sourced from within or without the C Philippines. In this case, ZZ sold a real property classified as capital asset, but its locationl is e outside the country. Hence, the transaction is not subject to the 6% capital gainsb tax. o Consequently, any gain on the part of ZZ should be reported as part of the gross income. R n ZZ’s actual income is Php10M, derived by deducting the cost of Php10M from the selling a price of Php20M. However, since ZZ is an individual and the asset is a capital asset, the h C e l b Ro an

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r a And considering that ZZ has held the asset for a long-term holding period rule shall B50%apply. holding period, only of the gain, or the amount of Php5M, shall be recognized for s e income tax purposes. l b 7. Spouses H and W have a child named Q. Q will get married to R. To help the Ro spouses in their new life as married individuals, H and W decided to would-be rHow shall H and W be liable for donor’s tax? n to Q and R an amount of Php1M. a adonate B h Suggested Answer: s C e When spouses make joint ldonations, their respective donor’s tax liabilities shall be b separate determined. Thus, the amount they have donated shall be split. H and W shall be o each be liable for donor’s tax, using the schedular rates under Section 99 of the NIRC, based R on their respective rto Php250,000, less Php10,000 n donation made in favor of Q equivalent deduction for each of them due to a gift on accounta of marriage. The schedular rate is a applied because the relationship of the parties is ofB relatives. However, with respect to the h C made in favor of R, as the latter iseans in-law (and, therefore, for donor’s tax donation purposes considered as a stranger), H and W lshall be liable for donor’s tax using a 30% tax rate based on their respective donations b of Php250,000, without any deduction allowed. o R 8. The residential house and lot of PP was extrajudicially foreclosed by Metrobank. r equivalent to nbid in the amount of Php6M, whichawas The bank submitted a winning a the outstanding obligation of PP. A perusal of the property, however, shows that the B h lot is a 1,000 squareC meter lot with a zonal value of Php3,000 square meter and a shaspera tax e tax declaration fair market value of Php2,000. The house declaration fair l market value of Php3.5M. What is the tax base of the capital gains tax, if any, and b when should the payment be made? o R Suggested Answer: r a an B as h The basis of the 6% capital gains tax is Php6.5M. For sales of real property classified s Cis imposed on the selling price or fairemarket value capital asset, the 6% capital gains tax l of Metrobank, whichever is higher. In this case, the selling price is the amount of the bid b which is Php6M. The fair market value is the higher amount between the zonal value of the oThe lot’s zonal value is BIR, or the amount appearing in the tax declaration of the property. R higher, yielding a total of Php3M. This amount, added to the n fair market value of the house r which is Php3.5M, will result to Php6.5M—an amount higher a a than the selling price. B h s The capital gains tax should be paid within a period of 30 days from the lapse of the C e redemption period, if no redemption is effected. It is because it is only after the lapse of the l b redemption period that transfer of ownership over the property shall be considered as effective. Ro 9. X’s claim for refund was denied by the Commissioner of Internal n Revenue on 1 a September 2014. He intended to file his Petition before the Court of Tax Appeals on 1 h C e l b Ro www.chanroblesbar.com : www.chanroblesbar.com.ph

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r a October 2014, but the said date was declared as a non-working holiday. X thus filed B his Petition on 2 s October 2014, which is the next working day. e a. Was thel Petition before the Court of Tax Appeals timely filed? b o b. RAssume that 1 October 2014 is incidentally also the last day of the two-year period X to file a case of refund pursuant r to Section 229 of the National Internal n forCode, aRevenue would your answer bea the same? B h s C Suggested Answer: e l timely filed. It is well-settled that if the last day to file a Petition (a) Yes, the petition wasb o Sunday or Holiday, the same may be filed during the next for Review falls on a Saturday, R working day. r n a a (b) No, my is also the last day of the two-year B must hanswer will be different. If 1 Octobers 2014 periodC to file a case for refund, the filing of the Petition be done the working day prior e to the holiday. This is because the two-year period is a prescriptive period, and not a mere l Thus, if the taxpayer files the Petition after 1 reglementary period, to file a claim for refund. b October 2014, the same is already time-barred. Ro r to audit the n was issued to a team of BIR examiners 10. A Letter of Authority (LOA) a afor taxpayer Sony Philippines “the period 1997 and unverified prior years. ” It B h appears, however, that Sony was using the fiscal year, in that it reported its tax s” Deficiency taxes were C “April 1, 1997 to March 31, 1998. liabilities for the period e l 01 January 1998 to 31 discovered by the team of examiners covering the period b March 1998. This was contested by Sony as the same was not covered by the LOA. BIR o argued that the contested period is part of the taxable year of Sony. Did the BIR act R properly in assessing Sony for taxes covering the period 01 January 1998 to r 31 n March 1998? a a B s Suggested Answer: Ch e l examination, and to No. The function of a LOA is to notify the taxpayer of the subject of the b o went beyond the fix the scope of the BIR examiner’s authority. The BIR team of examiners R scope of its authority because the deficiency tax assessment was based on records from r January to March 1998 or using the fiscal year which endedn in March 31, 1998. The CIR a a knew which period should be covered by the investigation. If the CIR wanted to or intended B h the investigation to include the year 1998, it shouldC have done so by amending the LOA to s include the said period, or by issuing another LOA. A LOA should cover a taxable period not e l exceeding one taxable year. b o 11. The BIR, after conducting an audit investigation, issued a preliminary R assessment notice against T Corporation. T Corporation filed a letter-protest against andenying the preliminary assessment. The BIR, thereafter, wrote T Corporation the h letter-protest and stated that if the taxpayer disagrees with the findings of the BIR, it C e l b Ro www.chanroblesbar.com : www.chanroblesbar.com.ph

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may exercise its right of appealing to the Court of Tax Appeals. Thus, T Corporation, within thirty days from the receipt of the letter-denial, filed a Petition for Review with the Court of Tax Appeals. The BIR moved to dismiss the case on the ground that there was yet no protest of the assessment itself, as what the BIR denied was only the letter-protest regarding the preliminary assessment. Decide.

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b o RMotion to Dismiss must be denied. The taxpayer cannot be blamed for not filing a The n The language used and the tenorarof the letter of the BIR shows that it is the final aprotest. h decision of the CIR on the matter. ItB is the obligation of the CIR to indicate in a clear and C unequivocal language whetherehissaction constitutes his final determination of the issue so l that the taxpayer will know whether or not to appeal the action. In this case, the statement b that the denial is the final decision of the BIR, and if the of the BIR clearly indicates o taxpayer disagrees, it may appeal the final decision from receipt thereof. Thus, the CIR is R estopped in claiming that he did not intend the letter to be a final decision. This case, r of administrative remedies. n therefore, isa excepted from the requirement of exhaustion a (Allied Banking Corp. v. CIR, G.R. No. 175097, 05 February B 2010). h s C e 12. X Leasing Corporation is engaged in leasing its buildings and other properties. l After several years of leasing its building b located at Ortigas, it decided to sell the building. Is the sale subject to VAT? o R r Suggested Answer: a an B h subject to VAT. For sales to No. The sale, not being in the regular course of business, is not s C be subject to VAT, the same must be done in the regular course e of business. In this case, the l business of X is leasing and not selling. (Cf. CIR v. Magsaysay Lines, Inc. , GR No. 146984, 28 b July 2006). o R (Note: The answer above is different fromn Section 14, Revenue Regulations 4-2007 r a amending Revenue Regulations 16-2005. a In the said regulations, the sale of a property Bcourse h intended for lease, or the sale of a property even if not held for sale in the ordinary s Cin business, is also subject to VAT. I submit, of business, but such property is used however, e that the said provision in the regulation is contrary to the provisions of thel NIRC) b o in real estate (Second Note: It would be different if X Corporation were engaged R development because in such a case, the sale will be considered as one of the functions or r n businesses of the corporation. Thus, the sale will be subjecta to VAT. ) a B h 13. X Corporation is engaged in selling goods. Y Corporation, a real estate s C e developer, exchanged its real properties for shares of stocks of X Corporation, l resulting in Y Corporation gaining control of X Corporation. Discuss the incomebtax and VAT consequences of the event. Ro Suggested Answer: an h C e l b Ro Suggested Answer:

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As to income tax: there shall be no income tax consequence of the transaction as it qualifies as an income tax free exchange under Section 40(c) of the NIRC. The law states that no gain or loss shall be recognized if property is transferred to a corporation by a person in exchange for stock or unit of participation in such a corporation of which as a result of such exchange said person, alone or together with others, not exceeding four (4) persons, gains control of said corporation. The factual situation in the problem falls squarely within the said provision of law.

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As to VAT consequence, the inventory of goods of X Corporation is NOT subject to VAT, but the exchange of real properties of Y Corporation for the shares of X Corporation shall be subject to VAT. The goods of X Corporation will not be considered sold, as they are still owned by X Corporation, even if the control over X Corporation is now vested upon Y Corporation. However, the transfer of the real properties of Y Corporation to the shareholders of X Corporation (in order for Y Corporation to get the said shares and eventually take control of X Corporation) is subject to VAT, as there was effective transfer of ownership of the said real properties.

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14. K died, survived by his wife and three children. The estate tax was paid by the heirs and the estate settled and distributed among them. Each of the heirs received Php4M. Later, the BIR found out that the estate tax was not correctly paid, thus, the BIR issued deficiency estate taxes plus interest, surcharges and penalties totaling Php5M. Since the three children were already out of the country, the BIR was collecting the Php5M from K. Was the action taken by the BIR correct?

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The BIR is correct in collecting the deficiency estate tax from K alone. The rule is that when it comes to estate tax liabilities, all or some or any of the heirs may be held liable. However, the said heir(s) may be liable only up to the extent of his distributive share in the estate. It is here where the BIR committed an error. The extent of the liability of K should not exceed her distributive share in the estate, which is Php4M. She cannot be held liable for the entire Php5M.

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(Note: In the event K is made liable for the estate tax liability, her remedy is to run after her co-heirs for their respective share in such liability.)

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15. After an audit investigation, Internal Revenue Authorities issued a notice of informal conference to a taxpayer. The taxpayer questioned the basis for the proposed assessment, but this notwithstanding, the BIR still proceeded to issue a pre-assessment notice, stating therein the same factual and legal basis for the an impending assessment. The taxpayer again protested. Subsequently, a formal assessment was issued against the taxpayer indicating therein the supposed tax, surcharge, interest and compromise penalty due thereon. This time, however, the taxpayer was not provided with the written basis of the law and facts on which the assessment is based. Revenue authorities justified its action by stating that the basis

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of the assessment was advised upon the taxpayer during the informal conference and the pre-assessment stage. Is the assessment valid?

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The assessment is not valid. Section 228 of the NIRC clearly requires that an assessment should contain the facts and the law upon which it is based; otherwise, it is void. Here, the assessment did not contain the factual and legal bases for the assessment. Applying, therefore, the provisions of law, the assessment is void. The mere fact that the taxpayer was supposedly notified during the informal conference and pre-assessment stages of the basis for the assessment does not cure the defect. The mandate of the law is clear. And in this case, such was not complied with.

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16. The Municipality of Sta. Rosa enacted an ordinance which requires that all stores, restaurants, and other establishments selling liquor should pay a fixed annual fee of Php10,000,00. Subsequently, the Sangguniang Bayan proposed an ordinance imposing an additional tax on all business engaged in selling liquor equivalent to 5% of the amount of gross sales of the store during the past year. The municipal mayor refused to sign the ordinance on the ground that it would constitute double taxation, and that the ordinance is violative of Section 133 of the Local Government Code. The board, on the other hand, justified that there is no double taxation as the subjects of the taxes are different, and that there is no violation of Section 133 because the imposition is based not on current sales but on previous year’s gross sales. Is the refusal of the Mayor justified? Reason.

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s e l b The refusal of the Mayor is justified, not on the ground of double taxation but based on violation of Section 133 of the Local Government Code. Ro nnullity of a tax law. What is violative aof rthe Double taxation per se does not result in the a Constitution is direct duplicate taxation, Bbecome hfor in that instance, the tax impositions confiscatory. In this case, there is noC direct duplicate taxation because the impositions are s e of different nature and character. The fixed annual fee is in the naturelof a license fee imposed through the exercise of police power while the 5% tax on purchase or b consumption is a local tax imposed through the exercise of taxing powers. Ro r ninvalid. Section 133 of the Notwithstanding the foregoing, the proposed ordinance is still a a Local Government Code provides, among others, that it is prohibited for local government B h units to impose percentage taxes. The present imposition is a percentage tax, for the tax s C liability is directly based in proportion (or a particular percentage) to the tax base thereof.e l The mere fact that it is based on the preceding calendar year’s sales will not change the fact b that the imposition is still in the nature of a percentage tax. o R (Note: The above-stated answer is not conformable with the suggested answer in the 2004 n a answer in Bar Examination in Taxation. It must be pointed out, however, that the suggested h C e l b Ro Suggested Answer:

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the 2004 Bar Examination in Taxation did not consider the issue of violation of Section 133 of the Local Government Code and simply focused on the issue of double taxation.)

s e l of Benguet enacted an Ordinance levying amusement taxes 17. The Province b equivalent to 10% of the gross admission fees collected by resort operators. Is the Ordinance Ro valid? r n Answer: a aSuggested B h No, it is not valid. The impositionsis in the nature of a percentage tax, which, under Section C 133 eCode, cannot be levied by local governments (including of the Local Government l Provinces). The imposition bcannot be justified under the guise of an amusement tax under o Section 140 of the Local Government Code. The said provision allows Provinces to levy an amusement tax onR the gross admission fees of theaters, cinemas, concert halls, circuses, n boxing stadia and other places of amusement. Resortsrare not classified in the same athat the subject of the tax is a place a category of those subject to amusement tax, as it is clear B h where one seeks to enjoy by watching or viewing a show or performance. In a resort, while s C there may occasionally be visual engagement,e such is not the main purpose. (Pelizloy Realty l Corporation v. Province of Benguet, G.R. No. 183137, 10 April 2013). b onon-profit corporation which owns a hospital. X 18. X Corporation is a non-stock, R Corporation constructed a medical r its doctors in n arts center which is used to house exchange for a minimal a fee. For real property tax purposes,athe hospital was classified as belongingh to “special class” with an assessmentB level of 10%. On the s C other hand, the medical arts center was classified by the e assessor as “commercial” with a higher assessment level. Was the classificationl of the medical arts center as b “commercial” proper? o R Suggested Answer: r n a a been classified also as “special”. The factB that the No. The medical arts center should have h medical arts center is exclusively for the doctors of the hospital clearly removes it from s C e being classified as “commercial”. The operation of the medical arts center incidental to lisis incidental the operation of the hospital; thus, it is but proper that the activity which to b the main function of the hospital should be classified in the sameo manner as that of the hospital. (City Assessor of Cebu v. Association of Benevola De Cebu,R 8 June 2007). r n a a 19. The Collector of Customs commenced seizure proceedings over the goods B h imported by J. K, who claims to be the lawful owner of the goods subject of the s C seizure proceedings, filed a case before the Regional Trial Court (RTC) against the e l Bureau of Customs for recovery of possession with prayer for the issuance of a writ b of replevin. The trial court issued summons requiring the Collector to o file his responsive pleading. What is the best action to be taken by the Collector? R an Suggested Answer: h C e l b Ro www.chanroblesbar.com : www.chanroblesbar.com.ph

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b o R r and forfeiture proceedings. As to the case n Collector should continue with theaseizure aThe B move for the dismissal of the case, as the RTC has filed with the RTC, the Collector should h s sitting in seizure and forfeiture proceedings, has C no jurisdiction. The Collector ofeCustoms, exclusive and primary jurisdiction l to hear and determine all questions touching on the seizure and forfeiture ofb dutiable goods. The RTC has no jurisdiction to pass upon the othe seizure and forfeiture proceedings conducted by the Bureau of validity or regularity of R Customs. Neither has the RTC review powers over actions concerning seizure and r which is reviewable by the n conducted by the Collector of Customs forfeiture proceedings a a Commissioner of Customs whose decision, in return, is reviewable by the Court of Tax B h Appeals. s C e l be issued if its effect is to recover possession It is well-settled that a writ of replevin cannot b of goods which are already in custodia legis. Here, the goods, being the subject of seizure o and forfeiture proceedings, are R within the ambit of the quasi-judicial powers of the Collector. Hence, the goods aren r a a already considered as in custodia legis. B h 20. X imported certain articles, which he believes to have been improperly assessed s C X complied with the requisites by the Bureau of Customs. for a valid protest. His e l protest has now been pending for almost two years, without the Collector of Customs b the Court of Tax Appeals? acting on such protest. Can X already file an appeal before o R Suggested Answer: r n a a B X Even if the Collector did not act on X’s protest for almost two years, this will not authorize h s to file directly an appeal to the Court Cof Tax Appeals. The CTA’s jurisdictioneover customs protest matters is when there is an appeal from the decision of the l Commissioner of b Customs. In the present case, there is yet no decision to appeal to the CTA. The principle of o as no provision of “inaction as an implied denial” is not applicable to Customs protest cases, R the Tariff and Customs Code authorizes the application of such. r a an B h s C e l b Ro an h C e l b Ro www.chanroblesbar.com : www.chanroblesbar.com.ph