i. Exclusive Original and Appellate Jurisdiction Over Civil Cases

Declaratory Relief in Tax Cases

In CIR v. Standard Insurance Co., Inc., G.R. No. 219340, 28 April 2021¹, Respondent filed a declaratory relief action in the RTC to determine the constitutionality of Sections 108² and 184³ of the Tax Code with respect to taxes paid by non-life insurance companies. One of the elements for a proper declaratory relief is that adequate relief is not available through other means. However, the correct remedy was to appeal the assessment with the CTA. The Court ruled that the RTC did not have jurisdiction as the declaratory relief action was procedurally improper as a remedy.

Tax Cases NOT filed with the CTA but with SOJ

P.D. 242⁴ expressly provides that all disputes and claims solely between governmental agencies and offices, including GOCCs, shall be administratively settled or adjudicated by the SOJ, the Solicitor General, or the Government Corporate Counsel, depending on the issues and government agencies involved. As this case only involves questions of law, the SOJ has jurisdiction. This rule applies when there are no private parties involved. Disputes covered by P.D. 242 must first undergo the prescribed administrative resolution, subject to the applicable avenues of review. The fact that P.D. 242 is a special law and the Tax Code⁵ is a general law is also basis to apply the former.

The decision of the SOJ is appealable to the Office of the President and then onwards to the Court of Appeals but the Supreme Court nevertheless decided on the issue to not further delay the disposition of the same. (PSALM vs. CIR, G.R. No. 198146)⁶

Cases Within the Jurisdiction of the Court in Divisions

• Decisions of or inaction of the CIR
• In cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties in relation thereto; or
• Other matters arising under the NIRC or other laws administered by the BIR

Definition of “Other Matters”

The term other matters is limited only by the qualifying phrase that follows it. The appellate jurisdiction of the CTA is not limited to cases which involve decisions of the CIR on matters relating to assessments or refunds. The second part of the provision covers other cases that arise out of the NIRC or related laws administered by the BIR. (CIR v. Hambrecht & Quist Philippines, Inc., G.R. No. 169225, 17 November 2010)⁷

• Decisions, orders or resolutions of the RTCs in local tax cases decided or resolved by them in the exercise of their original jurisdiction
• 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 of other penalties in relation thereto; or
• Other matters arising under the Customs Law or other laws administered by the Bureau of Customs
• 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 TCC⁸
• Decisions of the DTI Secretary in the case of nonagricultural product, commodity or article and the DA Secretary in case of agricultural product, commodity or article, involving dumping and countervailing duties under Sections 301⁹ and 302 of the TCC and safeguard measures under the Safeguard Measures Act (RA 8800¹⁰) where either party may appeal the decision to impose or not to impose said duties. (Rule 4, A.M. No. 05-11-07-CTA, Section 3[a]¹¹)

Regulatory Fees Not Within CTA Jurisdiction

The primary reason for the CTA’s lack of jurisdiction is that what was imposed under the questioned ordinance are not taxes but are instead regulatory fees, specifically to address the environmental depredation of the said special projects. As such, the case that originated from the RTC is not considered a local tax case over which the CTA has jurisdiction. (Smart Communications, Inc. v. Municipality of Malvar, G.R. No. 204429, 27 October 2014)¹²

Separately, in the 2018 Resolution of the MR filed by Petron, the SC ruled that in conjunction with the Banco De Oro¹³ ruling that the CTA has jurisdiction to resolve all tax matters (which includes the validity of the CIR’s interpretation and consequent imposition of excise tax on alkylate), the Court finds it proper to reconsider its decision. Petron concerned an excise-tax dispute; it did not reclassify Malvar’s regulatory fees as taxes. (CIR v. CTA and Petron Corporation, G.R. No. 207843)¹⁴

A Taxpayer Cannot File A Petition For Certiorari Under Rule 65 Directly to the Supreme Court to Question a Revenue Regulation

The CIR and the Secretary of Finance issued the regulations on the excise tax on importation of petroleum products into the BCDA in the exercise of their quasi-legislative or rule-making powers, not judicial or quasi-judicial functions. Thus, the same is outside the scope of a petition for certiorari. The Court lastly ruled that it shall not entertain a direct resort to them unless there are exceptional and compelling circumstances. (Clark Investors and Locators Association, Inc. v. Secretary of Finance and Commissioner of Internal Revenue, G.R. No. 200670, 6 July 2015)¹⁵

Declaratory Relief in Tax Cases

In CIR v. Standard Insurance Co., Inc., G.R. No. 219340, 28 April 2021¹⁶, Respondent filed a declaratory relief action in the RTC to determine the constitutionality of Sections 108¹⁷ and 184¹⁸ of the Tax Code with respect to taxes paid by non-life insurance companies. One of the elements for a proper declaratory relief is that adequate relief is not available through other means. However, the correct remedy was to appeal the assessment with the CTA. The Court ruled that the RTC did not have jurisdiction as the declaratory relief action was procedurally improper as a remedy.

Tax Cases NOT filed with the CTA but with SOJ

P.D. 242¹⁹ expressly provides that all disputes and claims solely between governmental agencies and offices, including GOCCs, shall be administratively settled or adjudicated by the SOJ, the Solicitor General, or the Government Corporate Counsel, depending on the issues and government agencies involved. As this case only involves questions of law, the SOJ has jurisdiction. This rule applies when there are no private parties involved. Disputes covered by P.D. 242 must first undergo the prescribed administrative resolution, subject to the applicable avenues of review. The fact that P.D. 242 is a special law and the Tax Code²⁰ is a general law is also basis to apply the former.

The decision of the SOJ is appealable to the Office of the President and then onwards to the Court of Appeals but the Supreme Court nevertheless decided on the issue to not further delay the disposition of the same. (PSALM vs. CIR, G.R. No. 198146²¹)

NATURE OF THE COURT OF TAX APPEALS

EXCLUSIVE ORIGINAL AND APPELLATE JURISDICTION OVER CIVIL CASES

Cases Within the Jurisdiction of the Court in Divisions

• Decisions of or inaction of the CIR
• In cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties in relation thereto; or
• Other matters arising under the NIRC or other laws administered by the BIR

Definition of “Other Matters”

The term other matters is limited only by the qualifying phrase that follows it. The appellate jurisdiction of the CTA is not limited to cases which involve decisions of the CIR on matters relating to assessments or refunds. The second part of the provision covers other cases that arise out of the NIRC or related laws administered by the BIR. (Hambrecht & Quist)²²

• Decisions, orders or resolutions of the RTCs in local tax cases decided or resolved by them in the exercise of their original jurisdiction
• 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 of other penalties in relation thereto; or
• Other matters arising under the Customs Law or other laws administered by the Bureau of Customs
• 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 the Customs Modernization and Tariff Act (R.A. No. 10863)²³
• Decisions of the DTI Secretary in the case of nonagricultural product, commodity or article and the DA Secretary in case of agricultural product, commodity or article, involving dumping and countervailing duties under Sections 301²⁴ and 302 of the TCC and safeguard measures under the Safeguard Measures Act (RA 8800²⁵) where either party may appeal the decision to impose or not to impose said duties. (Rule 4, A.M. No. 05-11-07-CTA, Section 3[a]²⁶)

Regulatory Fees Not Within CTA Jurisdiction

The primary reason for the CTA’s lack of jurisdiction is that what was imposed under the questioned ordinance are not taxes but are instead regulatory fees, specifically to address the environmental depredation of the said special projects. As such, the case that originated from the RTC is not considered a local tax case over which the CTA has jurisdiction. (Smart Communications, Inc. v. Municipality of Malvar)²⁷

In a separate excise-tax dispute, the SC ruled in the 2018 Resolution of the MR filed by Petron that in conjunction with the Banco De Oro²⁸ ruling that the CTA has jurisdiction to resolve all tax matters (which includes the validity of the CIR’s interpretation and consequent imposition of excise tax on alkylate), the Court finds it proper to reconsider its decision. Petron did not reclassify Malvar’s regulatory fees as taxes. (CIR v. CTA and Petron Corporation, G.R. No. 207843)²⁹

A Taxpayer Cannot File A Petition For Certiorari Under Rule 65 Directly to the Supreme Court to Question a Revenue Regulation

The CIR and the Secretary of Finance issued the regulations on the excise tax on importation of petroleum products into the BCDA in the exercise of their quasilegislative or rule-making powers, not judicial or quasijudicial functions. Thus, the same is outside the scope of a petition for certiorari. The Court lastly ruled that it shall not entertain a direct resort to them unless there are exceptional and compelling circumstances. (Clark Investors and Locators Association, Inc. v. Secretary of Finance and Commissioner of Internal Revenue³⁰)