Notes on Jurisdiction and CTA Proceedings by Prof. Eric Recalde

JURISTS BAR REVIEW CENTER™
Jurisdiction and CTA Proceedings

Atty. Eric R. Recalde
Jurisdiction, in general -
a. Supreme Court has original certiorari jurisdiction pursuant to Sec. 1, Art. VIII of the
Constitution.
By law, lower courts also have certiorari jurisdiction; hence, the Supreme Court’s
assumption of jurisdiction is discretionary. It may refuse to assume jurisdiction due to the
principle of hierarchy of courts unless the case involves important issues the resolution of
which will provide guidance to lower courts in deciding similar issues in the future or the
case involves matters of transcendental importance.
b. Supreme Court has appellate jurisdiction on cases decided by lower courts involving,
among others: a) the constitutionality or validity of any law, ordinance, or regulation; b) the
legality of any tax, impost, assessment, or toll, or any penalty imposed in relation thereto;
and c) error or question of law, pursuant to Sec. 5, Art. VIII of the Constitution.
In City of Manila, et. al vs Hon. Caridad Cuerdo, et al.,1 the Supreme Court
recognized for the first time that the CTA has jurisdiction over a special civil action for
certiorari assailing an interlocutory order (i.e., writ of preliminary injunction against
collection through administrative remedies) issued by the RTC in a local tax case.
Notably, the CTA law is silent on the certiorari jurisdiction of the CTA, unlike BP 129
on the certiorari jurisdiction of the RTC and of the CA, whether or not in aid of its appellate
jurisdiction. The basis is Sec. 1, Art. VIII of the Constitution, which declares the judicial
power is “vested in one Supreme Court and in such lower courts as may be established
by law.” Such power includes certiorari jurisdiction.
Cuerdo involved a local tax assessment case decided by the RTC in its original
jurisdiction. The RTC’s decision is appealable to the CTA. Hence, the RTC’s interlocutory
order (i.e., grant of writ of preliminary injunction against collection through administrative
remedies) could be questioned by way of certiorari with the CTA “in aid of its appellate
jurisdiction.” The filing of the certiorari petition with the CA would be improper. There
would be split jurisdiction, specifically when the main case is appealed to the CTA.
In PPA v. City of Davao, 2 the Supreme Court reiterated this rule where the real
property tax assessment was already pending with the CTA (i.e., appeal from the denial of
the CBAA) when the certiorari petition was filed with the CA to enjoin the auction of a
taxpayer's properties in relation to that case. The CTA upheld PPA’s RPT exemption and
ruled in favor of PPA. The CA, in turn, dismissed the certiorari petition on the that the CTA
had exclusive jurisdiction to decide on the matter. It also held there was forum shopping
when the case was filed with the CA despite the pendency of appeal on the main case
before the CTA. The Supreme Court upheld the CA decision.
c. Sec. 19 of BP 129 vests on RTC exclusive original jurisdiction in civil actions in which the
subject of litigation is incapable of pecuniary estimation. Rule 63 provides the rules on
declaratory relief petitions, in particular in questioning the constitutionality or validity of any
law, ordinance, or regulation. The petition must be filed before its breach.
1 G.R. No. 175723, February 4, 2014. See also CE Casecnan Water and Energy Company v. Province of
Nueva Ecija, G.R. No. 196278, June 17, 2015.
2 G.R. No. 190324, June 06, 2018.
2021 Notes on Jurisdiction and CTA Proceedings for Jurists Bar Review Center by Atty. Eric R. Recalde. Copying, dissemination,
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P a g e 1 | 14
d. Sec. 7 of the CTA Law specifically enumerates the cases falling under the CTA’s exclusive
appellate jurisdiction and original jurisdiction over criminal and civil actions. It provides:
“The CTA shall exercise:
a. Exclusive appellate jurisdiction to review by appeal, as herein provided:
1. Decisions of the Commissioner of Internal Revenue in cases involving

disputed assessments, refunds of internal revenue taxes, fees or other
charges, penalties in relation thereto, or other matters arising under the
National Internal Revenue or other laws administered by the Bureau of
Internal Revenue;
2. Inaction by the Commissioner of Internal Revenue in cases involving

disputed assessments, refunds of internal revenue taxes, fees or other
charges, penalties in relations thereto, or other matters arising under the
National Internal Revenue Code or other laws administered by the Bureau of
Internal Revenue, where the National Internal Revenue Code provides a
specific period of action, in which case the inaction shall be deemed a denial;
3. Decisions, orders or resolutions of the Regional Trial Courts in local tax

cases originally decided or resolved by them in the exercise of their original
or appellate jurisdiction;
4. Decisions of the Commissioner of Customs in cases involving liability for

customs duties, fees or other money charges, seizure, detention or release
of property affected, fines, forfeitures or other penalties in relation thereto, or
other matters arising under the Customs Law or other laws administered by
the Bureau of Customs;
5. Decisions of the Central Board of Assessment Appeals in the exercise of

its appellate jurisdiction over cases involving the assessment and taxation of
real property originally decided by the provincial or city board of assessment
appeals;
6. Decisions of the Secretary of Finance on customs cases elevated to him

automatically for review from decisions of the Commissioner of Customs
which are adverse to the Government under Section 2315 of the Tariff and
Customs Code;
7. Decisions of the Secretary of Trade and Industry, in the case of

nonagricultural product, commodity or article, and the Secretary of
Agriculture in the case of agricultural product, commodity or article, involving
dumping and countervailing duties under Section 301 and 302, respectively,
of the Tariff and Customs Code, and safeguard measures under Republic
Act No. 8800, where either party may appeal the decision to impose or not
to impose said duties.
b. Jurisdiction over cases involving criminal offenses as herein provided:
1. Exclusive original jurisdiction over all criminal offenses arising from

violations of the National Internal Revenue Code or Tariff and Customs Code
and other laws administered by the Bureau of Internal Revenue or the
Bureau of Customs: Provided, however, That offenses or felonies mentioned
in this paragraph where the principal amount o taxes and fees, exclusive of
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charges and penalties, claimed is less than One million pesos
(P1,000,000.00) or where there is no specified amount claimed shall be tried
by the regular Courts and the jurisdiction of the CTA shall be appellate. Any
provision of law or the Rules of Court to the contrary notwithstanding, the
criminal action and the corresponding civil action for the recovery of civil
liability for taxes and penalties shall at all times be simultaneously instituted
with, and jointly determined in the same proceeding by the CTA, the filing of
the criminal action being deemed to necessarily carry with it the filing of the
civil action, and no right to reserve the filling of such civil action separately
from the criminal action will be recognized.
2. Exclusive appellate jurisdiction in criminal offenses:
a. Over appeals from the judgments, resolutions or orders of the

Regional Trial Courts in tax cases originally decided by them, in their
respected territorial jurisdiction.
b. Over petitions for review of the judgments, resolutions or orders of

the Regional Trial Courts in the exercise of their appellate jurisdiction
over tax cases originally decided by the Metropolitan Trial Courts,
Municipal Trial Courts and Municipal Circuit Trial Courts in their
respective jurisdiction.
c. Jurisdiction over tax collection cases as herein provided:
1. Exclusive original jurisdiction in tax collection cases involving final and

executory assessments for taxes, fees, charges and penalties: Provided,
however, That collection cases where the principal amount of taxes and fees,
exclusive of charges and penalties, claimed is less than One million pesos
(P1,000,000.00) shall be tried by the proper Municipal Trial Court,
Metropolitan Trial Court and Regional Trial Court.
2. Exclusive appellate jurisdiction in tax collection cases:
a. Over appeals from the judgments, resolutions or orders of the

Regional Trial Courts in tax collection cases originally decided by
them, in their respective territorial jurisdiction.
b. Over petitions for review of the judgments, resolutions or orders of

the Regional Trial Courts in the Exercise of their appellate jurisdiction
over tax collection cases originally decided by the Metropolitan Trial
Courts, Municipal Trial Courts and Municipal Circuit Trial Courts, in
their respective jurisdiction."
Rule when questioning a revenue ordinance or measure -
a. Sec. 187 of the LGC provides any question on the constitutionality or legality of tax
ordinances or revenue measures. The “appeal” must be filed with the Secretary of Justice
within thirty (30) days from the effectivity of the questioned ordinance or revenue measure.
The Secretary of Justice is given 60 days to decide on the appeal. The aggrieved party
has 30 days from receipt of decision or lapse of the 60-day period where there is inaction
to commence appropriate proceedings with a court of competent jurisdiction.
Purpose of the Sec. 187 proceeding -
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The appeal to the Secretary of Justice is part of the administrative supervision
mechanism contemplated in Sec. 4, Art. X of the Constitution, which provides:
“Section 4. The President of the Philippines shall exercise general supervision

over local governments. Provinces with respect to component cities and
municipalities, and cities and municipalities with respect to component
barangays, shall ensure that the acts of their component units are within the
scope of their prescribed powers and functions.”
This provision is implemented by Sec. 56 of the LGC, specifically the “review of

component city and municipal ordinances or resolutions by the Sangguniang
Panlalawigan,” and complemented by Sec. 187 of the LGC.
Nature of review by the Secretary of Justice -
The action of the Secretary of Justice should be consistent with the administrative
supervision of the President over LGUs. See Drilon v. Lim, et.al. 3. In most of the cases,
the Sec. 187 proceeding is considered to be part of exhaustion of administrative remedy,
which is generally a condition precedent in commencing a Rule 63 proceeding questioning
the constitutionality or validity of a revenue ordinance.
However, there is a case where the action of the Secretary of Justice is considered
to be in the exercise of its quasi-judicial power, and such decision is reviewable by certiorari
under Rule 65 with the Court of Appeals. (See De Lima v. City of Manila, 4 where there
was a timely appeal to the Secretary of Justice; a decision was made and was questioned
via ad cautelam petition with RTC. According to the Supreme Court, the petition should
have been filed with the CA. Nevertheless, it declared the ordinance void.) Ordinarily, a
decision of an administrative agency in the exercise of its quasi-judicial power is reviewable
by appeal pursuant to Rule 43.
Contemplated proceeding following the decision or inaction -
The contemplated appropriate proceeding is a declaratory relief (Rule 63)

proceeding. There is no breach at this point. While the Sec. 187 appeal does not suspend
the effectivity of the ordinance, the 30-day period to appeal, the 60-day period for the
Secretary of Justice, and the 30-day period to commence appropriate proceeding could
not ripen into an assessment case.
Consequence when a party fails to commence a Sec. 187 proceeding -
As a rule, the party’s failure to to commence a Sec. 187 proceeding within the
prescribed period precludes such party in making a collateral attack against the revenue
ordinance or measure. See Jardine Davies Insurance Brokers, Inc. v. Aliposa, 5 which
ruled the taxpayer is “proscribed from filing its complaint with the trial court assailing the
validity of the ordinance for the reason that it failed to appeal to the Secretary of Justice
within 30 days from the effectivity date of the ordinance, as mandated by Section 187 of
the Local Government Code.” In this case, the Department of Justice (DOJ), on petition of
a different taxpayer, declared null and void a revenue ordinance. The LGU questioned
such decision of the DOJ in court. In the meantime, the LGU continued to implement the
ordinance. Jardine Davies was assessed under such ordinance. Jardine Davies, relying
on the aforementioned DOJ decision, posited in its complaint that the ordinance which was
3 G.R. No. 112497, Aug. 4, 1994.

4 G.R. No. 222886, October 17, 2018.
5
G.R. No. 118900, February 27, 2003.
P a g e 4 | 14
the basis of the assessment was null and void. See also Reyes v. CA6 and Hagonoy
Market Vendor Association v. Municipality of Hagonoy, Bulacan.7
b. There are cases where the Sec. 187 proceeding (as part of exhaustion of administrative
remedy) may be dispensed with. They may be filed with the RTC (and then appealed to
the Supreme Court by way of petition for review on certiorari) or directly with the Supreme
Court.
Case/s filed with the RTC without prior Sec. 187 proceeding:
- Alta Vista Golf and Country Club, v. City of Cebu 8 (where a petition for Injunction,
Prohibition, Mandamus, and Declaration of Nullity of Ordinance was immediately
filed with the trial court). Rule 63 proceeding was improper since there was a prior
assessment. The Rule 65 petition involved a collateral attack on the validity of the
ordinance. The petitioner eventually appealed the RTC decision directly to the
Supreme Court through a Rule 45 petition on pure question of law.
Cases filed with the SC without prior Sec. 187 process (where a declaratory relief petition
may be treated as a prohibition or mandamus petition) -
As mentioned, the Supreme Court has original certiorari jurisdiction and may
dispense compliance with the principle of hierarchy of courts when the case involves
important issues the resolution of which will provide guidance to lower courts in deciding
similar issues in the future or the case involves matters of transcendental importance.
- Ferrer, Jr. vs. Bautista9 (SC en Banc case) (assailing the constitutionality and
legality of a revenue ordinance, specifically the Socialized Housing Tax and
Garbage Fee). In this case, the petitioner already paid the tax and fee in question
before filing the petition.
- Alliance of Quezon City Homeowners’ Association, Inc. v. Quezon City

Government10 (assailing the constitutionality and legality of a revenue ordinance
revising the schedule of values of real properties). In this case, the question
revenue ordinance has taken effect and the petition was filed months later. The
Supreme Court eventually denied the petition as it was filed by an organization
having no capacity to sue.
Rule when questioning a local tax assessment -
a. A local tax assessment may be questioned through a protest pursuant to Sec. 195 of the
LGC, or through payment under protest pursuant to Sec. 195 and Sec. 196 of the LGC.
Period to appeal -
Under Sec. 195, the protest must be in writing and made within sixty (60) days from
receipt of the notice of assessment. Payment under protest is not required. It also provides
the remedy against an adverse decision or when thee is inaction. Section 195 provides:
“xxx The taxpayer shall have thirty (30) days from the receipt of the
denial of the protest or from the lapse of the sixty (60) day period prescribed
6 G.R. No. 118233, December 10, 1999.

7 G.R. No. 137621, Feb. 6, 2002.
8
G.R. No. 180235, January 20, 2016.
9 G.R. No. 210551, June 30, 2015.
10 G.R. No. 230651, 18 September 2018.
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herein within which to appeal with the court of competent jurisdiction
otherwise the assessment becomes conclusive and unappealable.”
Court of competent jurisdiction -
While the law mentions appeal with the court of competent jurisdiction, Yamane v.
BA Lepanto Condominium Corporation11 clarifies the action must be filed with the court of
competent jurisdiction in the exercise of its original jurisdiction. China Banking Corporation
v. City of Manila12 reiterates this rule. (Note: China Banking Corporation v. City of Manila13
is a refund or a payment under protest case.) Such court in this case should be the MTC,
and not the RTC, considering the amount of the claim in dispute. RA 11576 provides the
adjusted jurisdictional amounts of trial courts (using a P2 million threshold) in civil actions.
Special rule when there is payment under protest -
A local tax assessment may be questioned through payment under protest pursuant
to Sec. 195 and Sec. 196 of the LGC.
Where there is payment under protest, the taxpayer has no benefit of the full 2-year
period under Sec. 196. The taxpayer must file a judicial action within 30 days following the
denial or inaction by the local treasurer on the protest or claim for refund. See City
Treasurer of Manila v. Philippine Beverage Partners, Inc., 14 International Container
Terminal Services, Inc. v. The City of Manila,15 and City of Manila v. Cosmos Bottling Corp.
16
b. The CTA has no immediate appellate jurisdiction. A taxpayer cannot appeal directly to the
CTA. Before a local tax case can reach the CTA, the same must have been initially
decided by the Regional Trial Court, either in the exercise of its original jurisdiction or its
appellate jurisdiction.
Under Sec. 7(a) of the CTA law, the CTA shall exercise exclusive appellate
jurisdiction to review by appeal over “decisions, orders or resolutions of the Regional Trial
Courts in local tax cases originally decided or resolved by them in the exercise of their
original or appellate jurisdiction.”
Rule when questioning a real property tax assessment -
a. A real property tax assessment may be questioned when there is dispute on its
reasonableness through payment under protest or when there is dispute on the authority
to issue the assessment through a petition for prohibition.
Section 226 (appeal to LBAA) and Section 252 (payment under protest) allow a
taxpayer to question the reasonableness of the amount assessed before the city treasurer
and then appeal to the Local Board of Assessment Appeals. Section 187, on the other
hand, allows an aggrieved taxpayer to question the validity or legality of a tax ordinance
by duly filing an appeal before the Secretary of Justice before seeking judicial intervention.
b. Payment under protest is required to question the reasonableness of a real property tax
assessment.
11 G.R. No. 154993, Oct. 25, 2005

12 G.R. No. 204117, July 01, 2015.
13 G.R. No. 204117, July 01, 2015.
14 G.R. No. 233556, September 11, 2019.
15 G.R. No. 185622, 17 October 2018.
16 G.R. No. 196681, 27 June 2018.
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- City of Lapu-Lapu v. PEZA17 clarifies a declaratory relief petition by an
exempt taxpayer is improper to assail demands for payment of RPT by
local treasurers. A demand letter for the payment of RPT amounts to a
breach of the taxpayer’s right rendering the declaratory relief petition
improper. The correct remedy is either to pay under protest in case of
erroneous assessments where the correctness of the amount assessed
is in issue, or to file an action for injunction before the regular courts in
case of illegal assessments where the assessment was issued without
authority.
- Systems Plus Computer College of Caloocan City v. Local Government

of Caloocan City, et.al. (2003) declares a petition for mandamus is not a
remedy against an adverse decision of a local assessor. A taxpayer
cannot bypass the authority of the LBAA in reviewing an adverse ruling
or action of the provincial, city or municipal assessor in the assessment
of property.
- Napocor v. The Provincial Treasurer of Benguet, et. al. 18 reiterates its

ruling in Camp John Hay Development Corporation v. Central Board
Assessment Appeals 19 that “a claim for exemption from payment of real
property taxes does not actually question the assessor’s authority to
assess and collect such taxes, but pertains to the reasonableness or
correctness of the assessment by the local assessor, a question of fact
which should be resolved, at the very first instance, by the LBAA.”
Exception when appeal is not speedy and adequate remedy -
- The City Government of Quezon City, et.al., v. Bayan

Telecommunications, Inc.20 illustrates a case when appeal to LBAA is not
speedy and adequate remedy. The Supreme Court noted that an appeal
to the LBAA, to be properly considered, required prior payment under
protest. In this case, the amount which was required to be paid, in the
light of the then prevailing Asian financial crisis, may have been difficult
to produce. It was thus understandable why Bayantel opted to withdraw
its earlier appeal with the LBAA and, instead, filed its petition for
prohibition with urgent application for injunctive relief.
c. Payment under protest is not required when the real property tax assessment is issued
without authority or invalid.
- Herarc Corporation Realty v. Provincial Treasurer of Batangas21 explains

direct recourse to the RTC is warranted when the issue of the legality or
validity of the assessment is a question of law. A taxpayer not satisfied
with the RTC decision must file a petition for review before the Court of
Tax Appeals (CTA), instead of a direct petition with the Supreme Court
by way of certiorari under Rule 45. The same is true even when the issue
is legal (i.e., lack of authority to issue assessment) and not factual (i.e.,
reasonableness of assessment).
17 G.R. No. 184203, 26 November 2014.

18 G.R. No. 209303, November 14, 2016.
19 G.R. No. 169234, October 2, 2013.
20 G.R. No. 162015, Mar. 6, 2006.
21
G.R. No. 210736, September 05, 2018.
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- National Power Corporation v. Municipal Government of Navotas et al. 22
explains when assessments were issues without authority, specifically
when tax exemption was specifically in issue. It also reiterates the rule
that the CTA Division has jurisdiction to review by appeal the decisions,
rulings and resolutions of the RTC over local tax cases.
d. A declaratory relief (Rule 63) petition may assail the validity of tax ordinance.
- National Power Corporation v. Municipal Government of Navotas et al. 23

reiterates the rule that the CTA Division has jurisdiction to review by
appeal the decisions, rulings and resolutions of the RTC over local tax
cases, which includes a declaratory petition questioning the validity (and
not on reasonableness) of real property tax assessment.
e. A petition for certiorari, prohibition, and mandamus with a prayer for the issuance of a
temporary restraining order (TRO) and/or writ of preliminary injunction may be filed with
the Supreme Court.
- Alliance of Quezon City Homeowners’ Association, Inc. v. Quezon City

Government24 recognizes the remedy of a petition for certiorari,
prohibition, and mandamus with a prayer for the issuance of a temporary
restraining order (TRO) and/or writ of preliminary injunction filed with the
Supreme Court, assailing the constitutionality and legality of a revenue
ordinance revising the schedule of values of real properties. The
Supreme Court recognized the possible exception to the exhaustion of
administrative remedies, specifically when strong public interest is
involved. It cited Ferrer, Jr. v. Bautista (Ferrer, Jr.) allowing the direct
resort to the Supreme Court, noting that the challenged ordinances would
"adversely affect the property interests of all paying constituents of
[QC]," and that it would serve as a test case for the guidance of other
local government units in crafting ordinances. However, it dismissed the
petition due to petitioner’s lack of legal capacity to sue.
Rule when questioning an interlocutory order in a tax case-
a. A certiorari petition may be filed with the CTA in questioning an interlocutory order of the
trial court.
- City of Manila, et. al vs Hon. Caridad Cuerdo, et al.,25 held the CTA has
jurisdiction over a special civil action for certiorari assailing an
interlocutory order (i.e., writ of preliminary injunction against collection
through administrative remedies) issued by the RTC in a local tax case.
- Province of Leyte v. Energy Development Corporation,26 upheld CA’s

assumption of certiorari jurisdiction questioning the RTC’s writ of
injunction against collection of local franchise tax, despite its earlier
decision in CE Casecnan Water and Energy Company v. Province of
22 G.R. No. 192300, 24 November 2014.

23 G.R. No. 192300, 24 November 2014.
24 G.R. No. 230651, 18 September 2018.
25 G.R. No. 175723, February 4, 2014. See also CE Casecnan Water and Energy Company v. Province of
Nueva Ecija, G.R. No. 196278, June 17, 2015.
26 G.R. No. 203124, June 22, 2015.
P a g e 8 | 14
Nueva Ecija27 involving real property assessment and questioning an
interlocutory order.
- City of Lapu-Lapu v. PEZA28 rules that the subject petition for injunction
filed before the Regional Trial Court is a local tax case originally decided
by the trial court in its original jurisdiction. Since the PEZA assailed a
judgment, not an interlocutory order, of the Regional Trial Court, the
PEZA’s proper remedy was an appeal to the Court of Tax Appeals.
b. A certiorari petition may be filed with the CTA in questioning an interlocutory order of the
DOJ
• Bureau of Customs v. Devanadera, et.al. (2015) ruled the decision of

the DOJ on its finding of absence (or presence) of probable cause for
criminal prosecution (under the TCCP, in this case) should be brought
to the CTA, and not to the CA.
c. The CTA en Banc has no certiorari jurisdiction questioning an interlocutory order of a CTA
Division.
• CIR v. CTA and CBK Power Company Limited (2015), clarifies the
remedy of a party questioning such order is to raise the same as an
error in the appeal from the main case.
Petitions for certiorari/prohibition with Supreme Court -
• Banco de Oro et. al., v. Republic of the Philippines et. al. (2015)
• Taxpayers, as an exception, have direct recourse to the Supreme Court to question
validity of an interpretative ruling of the Commissioner of Internal Revenue.
• The nature and importance of the issues raised to the investment and banking
industry with regard to a definitive declaration of whether government debt
instruments are deposit substitutes under existing laws, and the novelty thereof,
constitute exceptional and compelling circumstances to justify resort to SC in the first
instance.
Suspension of tax collection; bond -
• CIR v. Standard Insurance Co., Inc. (2018)

• The taxpayer’s adequate remedy upon receipt of the FDDA is not the action for
declaratory relief but an appeal taken in due course to the Court of Tax Appeals
(Instead of appealing in due course to the CTA, however, it resorted to the RTC to
seek and obtain declaratory relief)
• The injunctive relief is not available as a remedy to assail the collection of a tax.
• Spouses Emmanuel Pacquiao and Jinkee Pacquiao v. CTA- First Division and CIR
(2016)
• The CTA has authority to issue injunctive writs to restrain the collection of tax and to
dispense with the deposit of the amount claimed or the filing of the required bond,
whenever the method employed by the CIR in the collection of tax jeopardizes the
interests of a taxpayer for being patently in violation of the law.
• An appeal to the CTA from the decision of the CIR will not suspend the payment, levy,
distraint, and/ or sale of any property of the taxpayer in satisfaction of his tax liability.
27 G.R. No. 196278, June 17, 2015 citing City of Manila, et. al vs Hon. Caridad Cuerdo, et al., G.R. No. 175723,
February 4, 2014.
28 G.R. No. 184203, 26 November 2014.
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• An exception to this rule is when in the view of the CTA, the collection may jeopardize
the interest of the Government and/or the taxpayer, it may suspend the said collection
and require the taxpayer either to deposit the amount claimed or to file a surety bond.
• The determination of whether the methods, employed by the CIR in its assessment,
jeopardized the interests of a taxpayer for being patently in violation of the law is a
question of fact that calls for the reception of evidence which would serve as basis.
The CTA is in a better position to initiate this given its time and resources.
• Privatization and Management Office v. CTA (2019)

• The Republic of the Philippines need not give this security as it is presumed to be
always solvent and able to meet its obligations.
• PMO, being an agent of the national government, is not required to put up a bond
because to do so would be to indirectly require the state to submit such bond.
• Tridharma Marketing Corporation, v. CTA (2016)

• The CTA in Division fixed the amount of the bond at nearly five times the net worth
of the petitioner without conducting a preliminary hearing to ascertain whether there
were grounds to suspend the collection of the deficiency assessment on the ground
that such collection would jeopardize the interests of the taxpayer.
• Simply prescribing the amount of the bond like the initial 150% of the deficiency
assessment, or later on even reducing the amount of the bond to equal the
deficiency assessment would practically deny to the petitioner the meaningful
opportunity to contest the validity of the assessments, and would likely even
impoverish it as to force it out of business.
CTA proceedings
• Exxonmobil Petroleum And Chemical Holdings, Inc. – Philippine Branch v CIR (2011)
• The CTA may immediately conduct a preliminary hearing and decide on the affirmative
defense/s of the respondent (e.g., lack of jurisdiction, improper party) even prior to
trial, pursuant to Rule 16, Section 6 of the Rules of Court.
• CIR vs. Ironcor Builders (2010)

• The taxpayer’s failure to offer in evidence its quarterly returns for 2001 was not fatal
when it filed a motion for reconsideration, attached its 2001 returns, and, at the hearing
of the motion, had these returns marked as Exhibits. These Exhibits were admissible
even if they were offered only after trial had ended.
• Milwaukee Industries Corporation v CTA (2010)

• It was not grave abuse of discretion when the CTA denied the taxpayer’s request for
extension of time to present rebuttal evidence, when two similar requests were earlier
granted by the CTA and the taxpayer was not prepared to present evidence during the
rescheduled hearing.
Remedy to question decision of CTA Division
• Commissioner of Customs v. Marina Sales, Inc. (2010)

• The petition for review of a decision or resolution of the CTA Division must be preceded
by the filing of a timely motion for reconsideration or new trial with the CTA Division.
• CIR v. Kepco Ilijan Corporation (2016)

• A petition for annulment of judgment filed in the CTA En Banc is not the proper remedy
to annul a judgment rendered by its Division. The divisions are not considered
separate and distinct courts but are divisions of one and the same court. The
Supreme Court, Court of Appeals, Court of Tax Appeals sitting en banc is not an
P a g e 10 | 14
appellate court vis-à-vis its divisions, and it exercises no appellate jurisdiction over
the latter.
• There will be extraordinary cases, when the interest of justice highly demands it,
where final judgments of the Court of Appeals, the CTA or any other inferior court
may still be vacated or subjected to the Supreme Court’s modification, reversal,
annulment or declaration as void. But it will be accomplished not through the same
species of original action or petition for annulment as that found in Rule 47 of the
Rules of Court, but through any of the actions over which the Supreme Court has
original jurisdiction as specified in the Constitution like 65 of the Rules of Court. What
remained as a remedy for the petitioner was to file a petition for certiorari under Rule
65, which could have been filed as an original action before the Supreme Court, and
not before the CTA En Banc.
• In any event, the CTA First Divisions’ decision has become final and executory. By
the time the petition for review was filed by petition with the Supreme Court, more
than sixty (60) days have passed since petitioner’s alleged discovery of its loss in the
case as brought about by the alleged negligence or fraud of its counsel. Equally
apparent is the failure of petitioner’s responsible subordinates to supervise the said
counsel as well as the conduct and progress of the case.
• Duty Free Philippines v. BIR (2014)

• The Supreme Court has no jurisdiction to review a decision rendered by a division of
the CTA.
• The exclusive appellate jurisdiction over decisions rendered by a CTA division is
vested on the CTA en banc.
• A party adversely affected by the decision of the CTA division may, on motion for
reconsideration, file a petition for review with the CTA en banc. Thereafter, the
decision or ruling of the CTA en banc may be elevated to the Supreme Court. No
decision of the CTA division may be elevated to the Supreme Court under Rule 45 of
the Rules of Civil Procedure without passing through the CTA En Banc.
Omnibus rule; exceptions
• Toshiba Information Equipment (Phils), Inc. vs. CIR (2010)

• The failure of the CIR to timely plead and prove before the CTA the defenses or
objections that the taxpayer was VAT-exempt under Section 24 of Republic Act No.
7916, and that its export sales were VAT-exempt transactions under Section 103(q) of
the NIRC, the CIR is deemed to have waived the same.
• CIR v. Eastern Telecoms (2010)

• The CIR’s motion for reconsideration filed with the CTA raising the argument claimed
by the taxpayer to be a new matter has made such issue not to have been raised for
the first time on appeal.
• A taxpayer cannot validly claim to have been taken by surprise by the CIR’s arguments
when such arguments were based on the taxpayer’s documents formally offered as
evidence.
• Even if the CIR’s act were to be considered as a lapse in the observance of procedural
rules, such lapse will not work to entitle the taxpayer to a tax refund when the
established and uncontested facts have shown otherwise.
• CIR vs. Bank of Commerce (2013)

• The rule that no issue may be raised for the first time on appeal is not a hard and fast
rule as “jurisprudence declares that the appellate court is clothed with ample authority
to review matters, even if they are not assigned as errors in their appeal, if it finds that
their consideration is necessary in arriving at a just decision of the case.”
• Luzon Hydro Corporation vs CIR (2013)

P a g e 11 | 14
• While the concept of newly discovered evidence is applicable to litigations in which a
litigant seeks a new trial or the re-opening of the case in the trial court, seldom is the
concept appropriate when the litigation is already on appeal, especially before the SC
• A judicial claim for tax refund or tax credit brought to the CTA is by no means an original
action but an appeal by way of a petition for review of the taxpayer’s unsuccessful
administrative claim; hence, the taxpayer has to convince the CTA that the quasi-
judicial agency a quo should not have denied the claim, and to do so the taxpayer
should prove every minute aspect of its case by presenting, formally offering and
submitting its evidence to the CTA, including whatever was required for the successful
prosecution of the administrative claim as the means of demonstrating to the CTA that
its administrative claim should have been granted in the first place.
• In order that newly discovered evidence may be a ground for allowing a new trial, it
must be fairly shown that: (a) the evidence is discovered after the trial; (b) such
evidence could not have been discovered and produced at the trial even with the
exercise of reasonable diligence; (c) such evidence is material, not merely cumulative,
corroborative, or impeaching; and (d)such evidence is of such weight that it would
probably change the judgment if admitted
• CIR vs. Fort Bonifacio Development Corp (2010)

• The failure of the CIR to timely plead and prove before the CTA the defenses or
objections that the taxpayer was VAT-exempt under Section 24 of Republic Act No.
7916, and that its export sales were VAT-exempt transactions under Section 103(q) of
the NIRC, the CIR is deemed to have waived the same.
• Counsel’s predicament of being burdened with a heavy case load is not a defense
especially if he fails to sufficiently explain his failure to observe the Rules.
• Republic vs Shell (2015)

• Good faith is a question of fact to be determined in every case, even in cases
involving same parties and the same legal issues
• This case reiterates the principles in PSPC v Republic (2008), but rejected the
claim that PSPC can invoke said precedent to establish its good faith. Good
faith is a question of fact that must be proven in every case.
Limitation on right to withdraw the case
• Central Luzon Drug Corporation v CIR (2011)

• When an appeal is withdrawn, the assailed CTA decision becomes final and executory.
• The dismissal of the case is with prejudice. By withdrawing the appeal, the taxpayer
is deemed to have accepted the decision of the CTA. And since the CTA had already
denied the taxpayer’s request for the issuance of a tax credit certificate, it may no
longer be included in its future claims. It cannot be allowed to circumvent the denial of
its request for a tax credit by abandoning its appeal and filing a new claim.
• Nippon Express (Philippines) Corporation vs. CIR (2015)

• A case before the CTA Division may be withdrawn as a matter of right before a case is
submitted for decision, and at the discretion of the court thereafter, but in no case after
the CTA has rendered its decision. In rendering the decision on withdrawal, there must
be no suspicious circumstances prejudicial to the government.
Appeal to Supreme Court
• Hitachi Global Storage Technologies Philippines Corp. (formerly Hitachi Computer

Products (Asia) Corporation) vs. CIR (2010)
• In a petition filed pursuant to Rule 45, the assignment of errors must not impugn
against the CTA en Banc’s grave abuse of discretion amounting to lack or excess of
P a g e 12 | 14
jurisdiction, which are grounds in a petition for certiorari under Rule 65 of the Rules of
Court.
• Deustche Bank AG Manila Branch vs CIR (2013)

• When a minute resolution denies or dismisses a petition for failure to comply with
formal and substantive requirements, the challenged decision, together with its
findings of fact and legal conclusions, are deemed sustained. With respect to the same
subject matter and the same issues concerning the same parties, it constitutes res
judicata. However, if other parties or another subject matter (even with the same
parties and issues) is involved, the minute resolution is not binding precedent.
• Accenture, Inc. vs. CIR (2012)

• Even though a Petition was filed before a Supreme Court pronouncement in a separate
case (i.e., new doctrine in Burmeister) was promulgated, the pronouncement made in
that case may be applied to the pending petition without violating the rule against
retroactive
• When the Supreme Court decides a case, it does not pass a new law, but merely
interprets a preexisting one
• Such interpretation became part of the law from the moment it became effective. The
Supreme Court's construction merely establishes the contemporaneous legislative
intent that the interpreted law carried into effect.
• CIR vs Fortune Tobacco Corporation (2013)

• When there is a conflict between the dispositive portion of the decision and the body
thereof, the dispositive portion controls irrespective of what appears in the body of the
decision.
• The office of a judgment nunc pro tunc is to record some act of the court done at a
former time which was not then carried into the record, and the power of a court to
make such entries is restricted to placing upon the record evidence of judicial action
which has actually been taken
CTA “other matters” jurisdiction
• CIR vs. Hambrecht & Quist Philippines, Inc. (2010)

• Under the CTA Law, “other matters” includes the authority of the CTA to decide on a
petition questioning the right of the BIR to collect an assessment that has become final
and executory.
• The issue of prescription of the BIR’s right to collect taxes may be considered as
covered by the term “other matters” over which the CTA has appellate jurisdiction
• The Philippine American Life and General Insurance Company v. The Secretary of
Finance et al. (2014)
• Decision of the Secretary of Finance falls under “other matters, which is appealable
to the CTA
• The CIR’s power to interpret tax laws is subject to review by the Secretary of Finance
under Section 4 of the Tax Code. The decision of the Secretary of Finance is
appealable to the CTA as this falls under the ambit of “other matters” arising under
the Tax Code or other laws administered by the BIR under Sec. 7(a)(1) of RA 1125.
Matters not falling under CTA jurisdiction
• Smart Communications, Inc. vs Municipality of Malvar, Batangas (2014)

• The CTA’s jurisdiction is limited to questions over “decisions, orders or resolutions of
the Regional Trial Courts in local tax cases originally decided or resolved by them in
the exercise of their original or appellate jurisdiction.”
P a g e 13 | 14
• The court did not resolve a local tax case, since the amounts levied by Ordinance No.
18 are fees, which are regulatory in nature.
• Philippine British Assurance Company, Inc. vs. Republic of the Philippines (2010)
• An action to collect on a bond used to secure the payment of taxes is not a tax
collection case, but rather a simple case for enforcement of a contractual liability. The
BOC need not follow the procedure in the proper prosecution of a tax collection case.
• Appellate jurisdiction over such action (earlier filed with the RTC) lies with the CA and
not the CTA
• City of Lapu-Lapu v. PEZA (2014)

• A declaratory relief by an exempt taxpayer is improper to assail demands for payment
of RPT by local treasurers. Once a demand letter for the payment of RPT is issued,
there is already a breach of the taxpayer’s right which renders declaratory relief
improper.
• The correct remedy is either to pay under protest in case of erroneous assessments
where the correctness of the amount assessed is in issue, or to file an action for
injunction before the regular courts in case of illegal assessments where the
assessment was issued without authority.
Formal requirements
• Swedish Match Philippines, Inc vs. City Treasurer of Manila (2013)

• A verification signed without an authority from the board of directors is defective.
However, the requirement of verification is simply a condition affecting the form of the
pleading and non-compliance does not necessarily render the pleading fatally
defective. The court may in fact order the correction of the pleading if verification is
lacking or, it may act on the pleading although it may not have been verified, where it
is made evident that strict compliance with the rules may be dispensed with so that
the ends of justice may be served
• The following officials or employees of the company can sign the verification and
certification without need of a board resolution: (1) the Chairperson of the Board of
Directors, (2) the President of a corporation, (3) the General Manager or Acting
General Manager, (4) Personnel Officer, and (5) an Employment Specialist in a labor
case.
• In this case, the Petition filed with the RTC was accompanied by a Verification and
Certification of Non-Forum Shopping signed by a Finance Director, although without
proof of authority from the board. The belated submission of the Secretary’s Certificate
constitutes substantial compliance with Sections 4 and 5, Rule 7 of the 1997 Revised
Rules on Civil Procedure.
• Metro Manila Shopping Mecca Corp., et.al. vs Liberty Toledo, et.al. (2013)
• The reglementary period provided under Section 3, Rule 8 of the RRCTA is extendible
• Respondents’ submission of only one copy of the petition for review and their failure
to attach therewith a certified true copy of the RTC’s decision constitute mere formal
defects which may be relaxed in the interest of substantial justice.
• Under Rule 26, once a party serves a request for admission regarding the truth of any
material and relevant matter of fact, the party to whom such request is served is given
a period of fifteen (15) days within which to file a sworn statement answering the same.
Should the latter fail to file and serve such answer, each of the matters of which
admission is requested shall be deemed admitted.
• The exception to this rule is when the party to whom such request for admission is
served had already controverted the matters subject of such request in an earlier
pleading.
P a g e 14 | 14

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JURISTS BAR REVIEW CENTER™

Jurisdiction and CTA Proceedings

“The CTA shall exercise:

a. Exclusive appellate jurisdiction to review by appeal, as herein provided:

1. Decisions of the Commissioner of Internal Revenue in cases involving

2. Inaction by the Commissioner of Internal Revenue in cases involving

3. Decisions, orders or resolutions of the Regional Trial Courts in local tax

4. Decisions of the Commissioner of Customs in cases involving liability for

5. Decisions of the Central Board of Assessment Appeals in the exercise of

6. Decisions of the Secretary of Finance on customs cases elevated to him

7. Decisions of the Secretary of Trade and Industry, in the case of

b. Jurisdiction over cases involving criminal offenses as herein provided:

1. Exclusive original jurisdiction over all criminal offenses arising from

2. Exclusive appellate jurisdiction in criminal offenses:

a. Over appeals from the judgments, resolutions or orders of the

b. Over petitions for review of the judgments, resolutions or orders of

c. Jurisdiction over tax collection cases as herein provided:

1. Exclusive original jurisdiction in tax collection cases involving final and

2. Exclusive appellate jurisdiction in tax collection cases:

a. Over appeals from the judgments, resolutions or orders of the

b. Over petitions for review of the judgments, resolutions or orders of

Rule when questioning a revenue ordinance or measure -

Purpose of the Sec. 187 proceeding -

“Section 4. The President of the Philippines shall exercise general supervision

This provision is implemented by Sec. 56 of the LGC, specifically the “review of

Nature of review by the Secretary of Justice -

Contemplated proceeding following the decision or inaction -

The contemplated appropriate proceeding is a declaratory relief (Rule 63)

Consequence when a party fails to commence a Sec. 187 proceeding -

3 G.R. No. 112497, Aug. 4, 1994.

- Alliance of Quezon City Homeowners’ Association, Inc. v. Quezon City

Rule when questioning a local tax assessment -

6 G.R. No. 118233, December 10, 1999.

Court of competent jurisdiction -

Special rule when there is payment under protest -

Rule when questioning a real property tax assessment -

11 G.R. No. 154993, Oct. 25, 2005

- Systems Plus Computer College of Caloocan City v. Local Government

- Napocor v. The Provincial Treasurer of Benguet, et. al. 18 reiterates its

Exception when appeal is not speedy and adequate remedy -

- The City Government of Quezon City, et.al., v. Bayan

- Herarc Corporation Realty v. Provincial Treasurer of Batangas21 explains

17 G.R. No. 184203, 26 November 2014.

- National Power Corporation v. Municipal Government of Navotas et al. 23

- Alliance of Quezon City Homeowners’ Association, Inc. v. Quezon City

Rule when questioning an interlocutory order in a tax case-

- Province of Leyte v. Energy Development Corporation,26 upheld CA’s

22 G.R. No. 192300, 24 November 2014.

• Bureau of Customs v. Devanadera, et.al. (2015) ruled the decision of

Petitions for certiorari/prohibition with Supreme Court -

Suspension of tax collection; bond -

• CIR v. Standard Insurance Co., Inc. (2018)

• Privatization and Management Office v. CTA (2019)

• Tridharma Marketing Corporation, v. CTA (2016)

• CIR vs. Ironcor Builders (2010)

• Milwaukee Industries Corporation v CTA (2010)

Remedy to question decision of CTA Division

• Commissioner of Customs v. Marina Sales, Inc. (2010)

• CIR v. Kepco Ilijan Corporation (2016)