COLLECTOR of INTERNAL REVENUE v. YUSECO and CTA  Sept.
 Sept. 1 – CIR demanded payment plus penalties incident to delinquency, but did
October 28, 1961 | Padilla, J. | Scope and Nature of Taxation
Digester: Bathan, Maria Aurelia
SUMMARY: Yuseco did not file income tax returns for 1945 and 1946. The CIR
assessed and demanded P134.14 and P7563.28 (which was later reduced to P2447.80)
from Yuseco. Yuseco requested several times for a reinvestigation of his case, which the
CIR denied. The CIR issued a warrant of distraint and levy upon Yuseco’s properties
(twice, because the first was not executed). Yuseco filed a petition for prohibition before
the CTA. CTA ruled in favor of Yuseco and declared the warrant of distraint and levy
as null and void. The CIR argued that under the NIRC, the taxpayer cannot bring in the
CTA an independent special civil action for prohibition without taking to said court an
appeal from the decision or ruling of the CIR. SC ruled in favor of the CIR.
DOCTRINE: Taxes being the chief source of revenue for the Government to keep it
running must be paid immediately and without delay. A taxpayer who feels aggrieved by
the decision of a revenue officer and appeals to the CTA must pay the tax assessed,
except that, if in the opinion of the Court the collection would jeopardize the interest of
the Government and/or the taxpayer, it could suspend the collection and require the
taxpayer either to deposit the amount claimed or to file a surety bond for not more than
double the amount of the tax assessed.
FACTS:
 Yuseco (respondent) did not file income tax returns for 1945 and 1946. The
revenue examiners, upon finding out, accordingly made income tax returns for
Yuseco upon which the Collector (petitioner) assessed against and demanded
P134.14 and P7563.28 representing alleged income taxes and corresponding
surcharges.
 Sept. 1, 1948 – Yuseco requested to be informed as to how the assessments were
arrived at. CIR provided the information sought and demanded the payment of
said assessments.
 Oct. 4 – Yuseco asked to be given an opportunity to be heard, but was denied by
the CIR. CIR demanded for payment two more times (Dec. 13 & June 29, 1949).
 July 28, 1949 – Yuseco requested for a reinvestigation of the case but was again
denied by CIR (and demanded for payment again).
 Apr. 3, 1951 – Yuseco renewed his request and nothing was heard of the matter
for almost three years thereafter.
 Jan. 6, 1953 – CIR issued a warrant of distraint and levy upon Yuseco’s properties,
but was not executed.
 Jan. 16 – Yuseco sought the withdrawal and/or reconsideration of said warrant.
 July 2 – CIR issued a revised assessment notice which reduced the amount for the
1946 income tax to P2447.30 including surcharge.
 July 18 – Yuseco asked that he be informed of the action upon his petition for
reinvestigation. A month later, Yuseco reiterated his previous request along with
the acknowledgment of his receipt of the revised assessment.
not take any further action to effect collection of the assessment.
 Jan. 20, 1955 – CIR issued again a warrant of distraint and levy, this time only to
effect collection of P2447.80 (income tax for 1946).
 Dec. 20, 1955 – The distraint being still enforced, Yuseco filed his petition for
prohibition before the Court of Tax Appeals.
 Court of Tax Appeals: Declared the warrant of distraint and levy issued by the
CIR as null and void and directed the CIR to return the properties seized. CTA
also enjoined the CIR from taking any further proceeding to effect collection.
 MR by CIR was denied.
 CIR’s argument: Under Sections 316 and 330 of the National Internal Revenue
Code, respondent taxpayer cannot bring in the CTA an independent special civil
action for prohibition without taking to said court an appeal from the decision or
ruling of the CIR in the cases provided for in Sections 7 1, 92 & 113 of RA 1125.
RULING: Petition granted. CTA decision is annulled and set aside.
Whether the CTA has original jurisdiction to issue writs of prohibition and
injunction independently of, and apart from, an appealed case – NO.
 The provisions mentioned by the CIR refer and limit only to appeals from
decisions or rulings of the CIR, Commissioner of Customs and Provincial/City
Boards of Assessment Appeals in the proper cases. Nowhere does the law
expressly vest in the CTA original jurisdiction to issue writs of prohibition and
injunction independently of, and apart from, an appealed case.
1 SEC. 7. Jurisdiction. — The Court of Tax Appeals shall exercise exclusive appellate jurisdiction
to review by appeal, as herein provided —
(1) Decisions of the Collector of Internal Revenue in cases involving disputed assessments,
refunds of internal revenue taxes, fees or other charges, penalties imposed in relation thereto, or
other matters arising under the National Internal Revenue Code or other law or part of law
administered by the Bureau of Internal Revenue; xxx
2 SEC. 9. Fees. — The Court shall fix reasonable fees for the filing of an appeal, for certified document, and
for other authorized services rendered by the Court or its personnel.
3 SEC. 11. Who may appeal; effect of appeal. — Any person, association or corporation adversely
affected by a decision or ruling of the Collector of Internal Revenue, the Collector of Customs or
any provincial or city Board of Assessment Appeals may file an appeal in the Court of Tax Appeals
within thirty days after the receipt of such decision or ruling.
No appeal taken to the Court of Tax Appeals from the decision of the Collector of Internal
Revenue or the Collector of Customs shall suspend the payment, levy, distraint, and/or sale of
any property of the taxpayer for the satisfaction of his tax liability as provided by existing law;
Provided, however, That when in the opinion of the Court the collection by the Bureau of
Internal Revenue or the Commissioner of Customs may jeopardize the interest of the
Government and/or the taxpayer the Court at any stage of the proceeding may suspend the said
collection and require the taxpayer either to deposit the amount claimed or to file a surety bond
for not more than double the amount with the Court.
 Under Section 11, to suspend the collection of taxes is merely ancillary to and in
furtherance of its appellate jurisdiction in the cases mentioned in Sec. 7.
 The explanatory note of the bill creating the CTA provides: It is proposed in the
attached bill (House Bill 175) to establish not merely an administrative body but a
regular court vested with exclusive appellate jurisdiction over cases arising under
the National Internal Revenue Code, Customs Law and the Assessment Law.
 The Court quoted Congressman Castañeda (one of the proponents): HB 175 has
for its purpose the creation of a regular court of tax appeals. It has exclusive
jurisdiction with reference to matters or cases arising from the Internal Revenue
Code, the Customs Law and Assessment Law. The case will have to be appealed
from the CIR, the Collector of Customs or the Assessors, to the Court of Tax
Appeals, then to the Supreme Court.
 The intention of Congress was to vest the CTA with jurisdiction to issue such
writs only in aid of its appellate jurisdiction in cases appealed to it and not to
clothe it with original jurisdiction to issue them.
 (TOPIC) Taxes being the chief source of revenue for the Government to keep it
running must be paid immediately and without delay. A taxpayer who feels
aggrieved by the decision of a revenue officer and appeals to the CTA must pay
the tax assessed, except that, if in the opinion of the Court the collection would
jeopardize the interest of the Government and/or the taxpayer, it could suspend
the collection and require the taxpayer either to deposit the amount claimed or to
file a surety bond for not more than double the amount of the tax assessed.