San Miguel Brewery Inc. v. CIR

 

San Miguel Brewery Inc. v. CIR

CTA EB NO. 2320

February 21, 2022

Doctrine:

The Court of Tax Appeals has undoubted jurisdiction to pass upon the constitutionality or validity of a tax Jaw or regulation when raised by the taxpayer as a defense in disputing or contesting an assessment or claiming a refund. It is only in the lawful exercise of its power to pass upon all matters brought before it, as sanctioned by Section 7 of Republic Act No. 1125, as amended.

Facts:

The respondent assails the jurisdiction of the Court over the case. According to him, petitioner primarily seeks to nullify a provision of RMC No. 90-2012 and the alleged action for refund of erroneously collected excise taxes is merely consequential thereto. Absent the nullification of RMC No. 90-2012, petitioner's cause of action has no leg to stand on. However, the authority to declare void an administrative issuance rest upon courts of general jurisdiction and not on courts of special jurisdiction such as the Court of Tax Appeals (CTA). Further, collateral attack on presumably valid administrative issuance is not allowed.

Issue:

Whether or not the CTA has jurisdiction to pass upon the constitutionality or validity of a tax law or regulation when raised by the taxpayer as a defense in disputing or contesting an assessment or claiming a refund.

Held: 

Yes. "In the case of San Miguel Brewery, Inc. v. Commissioner of Internal Revenue involving the same parties and issues but with different taxable periods, the CT A En Bane held that the Court has jurisdiction to determine the validity and/or constitutionality of rules and regulations, and other administrative issuances of the BIR, as pronounced by the Supreme Court En Bane in the case of Banco De Oro, et al. v. Republic, viz.: We revert to the earlier rulings in Rodriguez, Leal, and Asia International Auctioneers, Inc. The Court of Tax Appeals has exclusive jurisdiction to determine the constitutionality or validity of tax laws, rules and regulations, and other administrative issuances of the Commissioner of lnternal Revenue.

    In other words, within the judicial system, the law intends the Court of Tax Appeals to have exclusive jurisdiction to resolve all tax problems. Petitions for writs of certiorari against the acts and omissions of the said quasi-judicial agencies should, thus, be filed before the Court of Tax Appeals. Republic Act No. 9282, a special and later law than Batas Pambansa Big. 129 provides an exception to the original jurisdiction of the Regional Trial Courts over actions questioning the constitutionality or validity of tax laws or regulations. Except for local tax cases, actions directly challenging the constitutionality or validity of a tax law or regulation or administrative issuance may be filed directly before the Court of Tax Appeals.


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