Light Rail Transit Authority v. Bureau of Internal Revenue

 Light Rail Transit Authority v. Bureau of Internal Revenue 

G.R. No. 231238

June 20, 2022 

 

Whether or not the Court of Tax Appeals had jurisdiction over petitioner Light Rail Transit Authority's Petition for Review. Subsumed in this issue is whether or not the Final Decision on the Disputed Assessment is the final decision of the respondent Commissioner of Internal Revenue appealable to the Court of Tax Appeals 

Yes. The June 30, 2014 Letter denying petitioner's appeal was the final decision on the protest that is appealable to the Court of Tax Appeals. With petitioner having filed its Petition for Review within 30 days from receipt of the June 30, 2014 Letter, the Court of Tax Appeals had jurisdiction over the petitioner's Petition for Review.||| Decisions of the Commissioner in cases involving disputed assessments" mean decisions of the Commissioner on the protest to the assessment, not the assessment itself. The protest may either be a request for reconsideration or a request for reinvestigation, and the decision on the protest, which may also be rendered by a duly authorized representative of the Commissioner — must be final, i.e., not merely tentative in character.  Here, there was inaction on the part of the respondent on the petitioner's appeal of the Final Decision on a Disputed Assessment. And under the circumstances, this Court finds that the petitioner genuinely chose to await the Commissioner's final decision on its appeal. To our mind, the option was made in good faith, not as an afterthought or "legal maneuver" to claim that the assessment had not yet become final. This is shown by the petitioner's replies to the Revenue District Officer when the latter issued the Preliminary Collection Letter and Final Notice Before Seizure. In both reply letters, petitioner said that "it will act on the matter as soon as we receive the Commissioner's decision on our appeal." Indeed, petitioner filed the Petition for Review with the Court of Tax Appeals only after the issuance of the June 30, 2014 Letter that decided its May 6, 2011 appeal to the Office of the Commissioner. 

Enforcement of collection remedies pending appeal with the CIR is void and should be of no force and effect. 

 

Subsection 3.1.5 of Revenue Regulations No. 12-99 is clear that if the protest is elevated to the Commissioner of Internal Revenue (CIR), "the latter's decision shall not be considered final, executory and demandable, in which case, the protest shall be decided by the Commissioner. 

 

The issuance therefore of a Preliminary 

Collection Letter, the Final Notice Before Seizure, and the Warrant of Distraint and/or Levy pending appeal with the Commissioner of Internal Revenue shall not be considered a decision of the latter. More importantly, all of these were issued on the premise that "delinquent taxes" exist, an incorrect premise. 

 

Thus, the enforcement of collection remedies denying the request for reconsideration all emanated from a non-demandable assessment. As such, all were void and should be of no force and effect.