San Juan v.

Vasquez

G.R. No. L-16814             September 19, 1961

Facts: Petitioner San Juan in this case filed a special civil action of certiorari
and prohibition against the lower court judge from taking cognizance of a
collection case filed against him by the Commissioner of IR. The antecedent
facts showed that on June 50, 1954, the Collector of Internal Revenue wrote
the accountant of petitioner informing him that the latter is given a period of
grace up to July 16, 1954, to pay the deficiency taxes without penalty, or until
July 31, 1954, within which to submit evidence to show that the assessments
of the respondent Commissioner are incorrect. The Accountant sent a
communication to the Commissioner on July 30, 1954 explaining why the
claimed amount is not due and owing from respondent. Nothing was heard
from the Commisioner on the matter until on February 25, 1959 when the
Collector brought the action in the CFI which the petitioner seeks to enjoin.

ISSUE: WON the CFI has jurisdiction to take cognizance of a collection case
filed on the basis of a disputed assessment.

HELD: No, the CFI has no jurisdiction. The Court found that the assessment
was duly disputed by the petitioner for San Juan citing a sufficient basis – in
fact and in law – to support his claim that the amount is not due and owing
and filing a timely appeal at the CTA. The Collector may not overlook the fact
that the assessment had been disputed as the objections to the assessment
had been made at the opportune time. He may not ignore the positive dispute
against the assessment by immediately bringing an action to collect, thus
depriving the taxpayer of his right to appeal the disputed assessment. As the
legality and correctness of the assessment is in dispute, the CTA has
exclusive appellate jurisdiction based on RA 1125, Section 7.