CASE: EDWARD SAN JUAN vs.

HONORABLE JUDGE CONRADO VASQUEZ, of the

Court of First Instance of Manila Branch II, and the HONORABLE COMMISSIONER
OF INTERNAL REVENUE
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 Commissioner on the
matter until on February 25, 1959 when the Collector brought the action in the CFI which
the petitioner seeks to enjoin.

ISSUE:
Whether or not 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.