CTA Case No. 22366 (Decision)

ftEPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS NILA RE U LIC ! HILI I , Plaintiff, ... v rs s - M. I I IVIL to. 22366 o , and IL Y, as F THE PH LIP I PREIG T l '!ESg I . � , efendants. x- � - - - - - � - - - M - � -x D CI I0 f his is an acti n fil d y th epublic of the hilippines for th c llection of inc for t he fi cal y ars 19 48, 1949 nd 1951 a11e ed1y ue fr~J the efendants D minador Po Can1as and 1anila encil Co apany as succes r f th Philippin Conso- l id te Freight Lines, Inc ihe cas was orig"na1ly filed with the o rt of First Instance of ,anila n arch 23 1 1954 prior to t c r ati n th rt of Tax ppe ls a d w s r anded to this ourt for fin 1 d ter inat.ion pursuant to ction 22 of epu lie ct � 1125. efore the case ~as re anded t this Court y t he C urt of First Instanc of anila, th defendants thru counsel moved f r th dis,issa1 of t he case on t h grou ds of lac of jurisdiction an prescript! ns action . Without res l ving the said motion in one way r anot her, the ourt of First Instance of 1 nila in an or'er dated epte ber 27, 1954 re nded t he case to this Court for in ispositio � 265 265

DECZSl � � ILA <:Dll. CAS � 22366 .. 2 .. the issue of pre�crlption., not being indubitable an inv lving as it ~o� questions of facts, this Court, !n its resolutien of Dec er 1. 1954, eni the o- tlon. to 1 l$& in the igttrl! witho.ut .prejucUce to its eoBsi eratien, t. ether with the othe:e- it& _el thereof 1n th� final disp sition of the e se and re ire the f dents to ans r plaintiff's complaint. ft�r all ,tht issues have o�~ joint ith t . ��t filing ef ef�ndants� answ r , th case was for bear- in. ~ the erit$. to which the parties a reed to submit ,� the matter or ecision �n all issues based on the fol~ l ing stipulation .f fact&s �1. That the LAINTUF !s a political entity with capacity to suel� while DEFENDA t, D inador Po Canlas, is. a f �lipino cititen, of legal age, with office and postal address at c rner Rilal Avenue ixtensten and Lan.. .tones R&aRdi1l.a.MPaleanbcoinl 1CR izal 1 and the de fen- ant. su cces sor in pany~ interest of the Philippine consolidated freight Lines. Inc., is a corporation duly organized and existing under and by virtue of the laws of the Philippin�s and with of- fice and p()stal address at alabon, Rizal; �2. that on pril 14. 1951, Dominador . � Caolas acquired by puNhast all the trans� portat!on equipments as well as the franchise f th� 'Philippine Consolidated Freight Lines, ��1. Ineo' to op rate within the Clark Field ir �a. That pursuant to the records of the tcur!tits and Exchange Commission, tbt 'Manila Pencil Company', is the sQC� etesor of the 'Philippine Consolidated freight Lines~ Inc.�, with Dominador Po .canlas as President and General ana;er; �4. That the ' Manila Pencil C pany' ��� d all � bligatiens that the 'Philippine Censolidated Freight Lines, Inco 1 had ith third persons in conne;tien � ith its past operation; 266

DECIS I - � ILA CIVIL CAS NO. 22366 . �o. Th t during the fi scal years ended Augu s~ 31, 1947, August 31, 1948, August 31, � 1949 and ugust S1, 1951 , the DEFE . I.A ! 1 ' hi1ippine Consolidated Fre "ght Lin s, Ine. ', op rate a fr ight and carg as well as passen- er bus ser ice within the Cla ri: Field rea, a ' nite tat ?: ilit ry as , y virtu of Licenses issu in it f or by th hilippine- iukyus Command ( hilryco 1, an instrum ntality of th Unit d States rmy in th Philippin s and the inc was erived xcl~s ively fro th . operatio of such services ithin the lark Field r ir� ase; � 6. hat t he 'FE i , � .anila enci1 Compaoy ', thru its predecessor, the' hilip- pine Consolidated Fr ight Lines, Inc 1 ' fil d income tax returns for t fiscal y ars ending August 31, 1947, u ust 1, n 1N94o8ve1 Au ust 31, 1949 nd August 31, , mbe r 28, 19 4 7, 1951 o c er 1 , l 8 , ce er 1, 1949 and Decem- b r 31, 1951, r , spectively, sho ing income tax s du in the su. s .of e4s1p285c . 74, 2 1, 733 . 66 , 7� 3.57 and ~~332 a 00 ~ r t ive l y; �1. That the said inc ome taxes were a$- sesse4 by th ol ector of Inter nal evenue un er Income Tax Assessment ios . A-90230....471 dat d D l e ber 1, 1947� A-123327-48, dat d January 3, 1949, A-120361-49 , dated January 9.,. 195 , 43 C-18-51, dated Januar y 17, 19 2, and eficienc inc me tax �for fiscal year end- in Dece b r 31,1947, under Assessment No. � -120597-48/47, dat d 1arch 31~ 1949 1 in t he u of 1, 4.97; " � That the DEFENDANT, t anila Pencil Compa y' pai the sum of , � part pa ent f t ' o i come tax due f or 947; c 119 � That the DEFE T 1El anila P9nc � 1 � aoy' has filed ben , AISCO Bond Oo 419, iss ed y the iAss ociated I s uranc e panyd Sur e t y C nder which D FE T i �� o nh .:me~', � ! t he s m of �39lo70 , u til t he whole s m is paid , to avoid istr int of it properties by the P I NTIFF for failure to pay t he am unt of �3,332.00 income tax assessment issued again t the Dr:FE.NDANT for t c year 1951; 11 10. That the DEFEJID tiT, ~ Manil a Pencil Co paoy', paid the su of 3, 526.47 on said bon as f llows: Datt 2f E vment Amount� Paid arch 3,� 1954 451541 391.79 pril :R 1954 39lo79 456324

DECISI � � anil CIVll CASE O. 22366 - 4� ay 26, 19 4 418352 391.79 un 1, 19 4 5185 391 . 79 July 13, 1954 1005457 391.79 529158 Qer 12, 1 ~4 l. 9 3anu ry 20, 1955 52~632 ""91.79 391.79 ove , er 5, ;t l9~ 5298 2 391,79 March 3, 1955 3,526.47 5 3478 "11. That on the basis of a decisi n of the D ar ent of r inance, I ri ~,.. Sept- r 15, 1953, cancelled the income tax as- se sment n tices referred to in paragraph 7 against the 'Philippine Consoli ated Freigh Lines, :i: c.', on th .,roun ' that i is i.hin the exempti n granted by the Mil itary ases a.r er: nt et e . the nited at a d the hil ippines which decision was, h ~ever, sub- j to the revte by the ard f ax pp ls; "12. That h d cision of h 'F entioned in the prece ing par r ph tas f r- ar to the Boar f Ta ppeals f r rev� o ~ on September 15, 953; �13. That the said d cision ca ceiling a ~as r v r d ' y h ar of ~e tax Appe ls by resolutj.on (TC~x Appeal t'o. 136 ~ date ove.1 ber 20, 1953 c p of hich resolu- 3! t i n s received by P II IFF n December 2 s 19 an y counsel f r Defendants on Decen er 24, 953; �r4. rr.at pursuant to the esol tion of th Jqard of Tax 1 peal ,. r:- Id IFF, on Feb- ruary 6, 19 4, emanded payt~EHrt of the �ncome ax a essments ~en �oned i paragr ph 7 f this tipulation fro the ' Philippin Consoli- ated re �ght Lines, r~ c.� ; 15. That up n DE�E�ID � T 1 ~ failure t pay th afor ... 1e tioned i c tax lia ilities, P r~ t F filed in �he Court of f�r st Insta ce of anila, on ~a i2l 3C1 19 54, a complaint for its collec� in rch ase � Oo 2236 ; and iv 8 1 6. ha t arti re er o them- selva~ the right t SJ it additional ovi- ce , oral a ell as documer �ary. '� ~ a e athered fr o1. the i ula i n f f cts a$ ell as t e oran of the parties, this case r ... volves ainly on t wo f ndament"'l i suesr 268

DECIS tON � D.A CIVIL SE NO. 22366 1. nether not the defendants, as successor$ 332 (e} ther f. � el tive t � t he first issu , t e defendants herein coot nd that they re n t subject t th pay- ment of inc tax on the Inc realited by them from the operation of the Clark F!eld us Li � they b se \beir claim on tiel VIII of the Philippine nited tetes Ba$es greement, which re�ds le. f ollow.t: " E VICE I IN Tf� BASES "1. It is mutually agr ed that th Unite States stall have the right t esta- blish on bases free of all licenses, fees, sales, .excise or other taxes, or imposts Govern ent agencies,including exchanges, esses an social ~lubs, f r the exclusive use of the United tates militarf force an authoriJed civilian personne � and their fa ilieso The 1�.rchandise or s rvices sold or disp nse by such ag RCies shall b fre of all taxes~ duties and in spection by t hilippin authoritieso AdministratiYe m a~ ,sure ...shall be taken by t he appropriate au... the�ritie$ of the United St tes t� prevent the r esale of goods hich are sold under the provision f this Article to persons not 269

D!CISl .- li.A {;lVJI CASE � 123~6 �� 6- -�nt1tl t� buy good$ at $ ch agenc1e$f eg�� a� ~ enerally, t � pr vent abuses f the prJ!r 1 sh a llg_oer�ncot~op. uenr-da�tiron�l. 1$ rticle. Th r- �t .ee such .nd. authorities an the htllpp es t this I �2. Exc�pt �� uy h pro�1.d in �ther~.. gr�em~nt :~- ao person $hall habitua � ly ~en. er ~Y profess! nal ter�~�� 1n a � u� except to or fctr the \Jntt St tes or to or for the pers�ns e ti ne in t e pr~ . d~ tAg par�gre.ph. usUess shall e1ta-. bli1be in a as�� it ing nd rst that the ern ent agenei s mentioned i~ the pre� ceding pa~�graph shall aot b ~�gar e s business fer thae, purpose of this Article.� (43 O. G. No. P� 1020 at 1028�1029} . Th defendant�S' claim tba.t tn.y are. �concession� aires� in Cf�tltemplatt�n of the afo,rtc.ited""' article and �� uehare �ntitled to th exempt!en grant d th r�in. �o Th�y predicate their sta on Opini~s 64 and 195, series of 1952. of the ectetary of h�tic� wbe~ein it as held that the licenses g:ranted to the defendants ~... !thin the te%m �concessi~n�. Th� plaintiff, on th ther hand~ does not ispute -tht fact that the transportation facilities operated by the defendants constitute a ser�ice or a concession and as such are f'l"ee of the taxes �nu rated in Al'title X\fiit �f the Phillpp1ne~nited States ases Agr�ement. Plaintiff~ h ever, c nt�nds that the exemption granted therein d �� n t ext no to the pa nt ef 1~ e taxes. letvied �r collected on the !nco e, gains or profits ear ed or mad� by such concessionaire& wit.h1n tb& ase. In B.T. Ao Case, No. 178 entitled 19The anila P n- of ' ell Company, as successor in interest th Philip� plfte Consolidated Freight Lines. Inc �� Petitloo.r ws. J. ARt.nie Araneta, as Collector �f lnte:t"nal It enue,

. ., - Respondent e h ld that under A~t1~1 XVIII 4f tb PhUl.ppin . tatts . a t Agreem nt, a u. '"' . A7t y eonce$$1 1 ire a�t Clar. Pield ~ a s. i ex- empt fr or� ixe , a d p rcent~te taxes. e&ti a& to hether or no � iru:o tAxes r i~lu e in the ext pti n under atd.d Arti� cle of t e a � ent wa$ not :raise in that case and 1t is nly w that this Court is called up n to e~ eicie thia iss �� he de� t _al"d �� ppeals, h v r, tn fax l~ppeal o. 145 ent,itl "In ~"� -el ita for refun of f"x ag iat, Petitioner�, involvin s� .i.lar f cts baJl - casi n t pa G p.a"' this iss _ tqu.arely h lding that� �Th i~ t x o tbQ Qperator is inclu~ed in the �xempti p:revid f r in t � ilitary a e agre� ent. The incom& tax. ls a tax on �individu-.1 citizens or Hsidents, in accordance with cti n 21 of the Tax C It is not a ta� on sen!Ce.s rend�red 1ft tbe- � "litary bas as con � .la in tbe ilita~ y aase agree ent aferequoted. lt is � personal tax im ose y law for nn i !vidual re$i4ent of the Philippines. As a proof th t said ex- emption is limited in its acope is t he f act that in paragraph 2 ef the contract sign d by the Commanding Officer o the ase a d � aguiat, it provides that the eperat as� s & ~omplet liability or �ll taxes. li- cen��� an inc 8$ ef the o ~ator.� � fully agree a � opt as our awn the abov- ruling of the 4ef net S.ard ef Tax Appeals nd for furth r c1ar1- w ld like to ad s thin . aor/ . casual raadift ef the oontMWr$lal nt:l.cle I er!ftgs t� our att fttlon .... significant f ts by ich we can readUy see that def�ndants� stand is difficult 27 1 ---- -..-.... - - -~- .- - ~----

IlA � ~ 66 - a .. t $\l&t i � irst and fore ost is the f ct that Ar"ti cl I o the ilipp n �Unite Stat0s Bases Ag.r n is entitl d �s l a d rvices i hin the sea� ~ l ile inc e tax s r tre t in rtiel XII f �� gr em n � or v r~ par g aph l f rticle _III enu erat s th t x s fr en h g ~1 or cone ithin th bases r to be ex pte , t .-....~~..� f!tu. s 1.e2, excis Th pro isio o s n t enti n � ~hondise or s&rviceG s ld o ispe .s b s c ag ;cies t o fr~ f all tax s du i s an �n - ti y th hil!pp~ e. � autl rit! !n this rP-S� pect it is si nifl..,ant e d t not ~ th t t e ex p- ien acc ord lee 1 cone ssi ires op _ating ithi � � .y an vJl a s in t � Philippines belong t that c las of taxes usu l l y i pos d o th enj y- nt f privil g s or th pur suit f a usi s or cu- pati n. o 1lier in s i p ragr ph f �t cl III is there ny enti n t x, hich � tax n net inc nd not a tax on m rchar.dis o:t service. / ( I The d fendant cl ir:l that inc t � p rtak_s of th t r of a ex9ise tnx and there� r f 11 wit in th sco e of the e amption in sai p r gra and articl 1wh �c cific lly mentions exci s luded the ein./ The d fendants har fund upp rt in thi c ntenti n on s me orican case h r n it held �ha ~;; an inc tax is an exc i se t x an n t tax on prop r ty. H ver, the d fendants s t th f ct that th s r lings er pre- '�' , :J. 272

DECISION ... MANILA CIVIL CA E NO. 22366 � .. 9 - .mls d n comparis n of dir ct nd in ir ct tax s and n taxes on property in contra-dis in<:ti n it txcise taxes . 0 Excis " as us d in rticle XVIII . f tbt hilippin - Unit d tat s Ba e r nt cent . � plates taxes imp sed on t h p rf r engage ent in cc p tion, r nja nt .f privil �� incl ding operation f otor vehicl s on public �i9h�� lys. (State vs. Fields, 0 i pp.. 5 .E. d 7 147.)J1In one merican ca e, h line f de arcati n �twe'en the two taxes was dra ;vn thus / "An excise tax is n in ir c (;barg� for tbe privilege of fol lo ing ~n ccupa� tion or trade or carryi 9 n a ousiness.i J while 'inc e' tax is a. dir et tax and ~s as directly imposed as is a tax on lan � " (u.s. v. Philadelphia, a & � R. Co., D.<;. ~ Pa. 262 F. 188. 190.) f/ ,. . oreover, an income tax is one � posed on indivi- duals ile an excise tax is one pos on good � r.ight or property~ An income tax i one hich relates to the pr duct or income fro property or fro usiness pursuits. It h-.s been defin d as a tax on th ye rly prClfits arising from property, professions, trades or � ffices or as a tax on a person's income, molu ents, profits and th like, or the exc ss thereof over a certain amount. { ords & Phrases, Vol. 15 A, p. 159. ~ hile an excise tax is a tax impo ed on t h manufacture1 sale� r consumption of commo !ties within the country� licenses t pursu c rt in occupations, an on corp� orate prlvilegeso (Vinup v. City of eattle, 120 � 2d 464, 465; 11 ash. 2d 630). 27 3

D ClSION � NILA CIVIL E O. 22366 -1 - fu rther mor ) the exem t ion s from the p yment of inca t ax a e t reated in Article XII o the Philippine � un.tt� t at es ses Agree8ent which reads: -..1" �~ IN AL RE IE.NUE TA u::r. PTIO � (! ) 1 o member of t he Uni t tates r med _.F r c s except Filipino c i t izens , serv- ing in t h Phil ippi nes i n connect! n !th the ses and residing in he Philippines by rea son nl y of such rvi c e , or his de - pendents , shall be lia le to pay income tax i n t he Phil ippin s except in resp et of inc lite derived fro.. Philippine sources. " ( 2) No national of the United tates s erviu i h hilippine in e onn cti n with t he c nstruc t i n, mainteaance , opera- tion or f n t he as and r siding in t he Ph il ipp i~e s by r a son only of such emplo en r his spous and minor c hildr �en nd de endent parents f either spouse , shall l ia 1 to pay inco e tax in the Philipp nes exce t in re p ct of inc ome derived f ro Phili i sources or ourc e other than the United Stat s. 9 (3) N person referred to paragraphs l an _2 o hi s a id xticl a be lia 1 to pay the gov)r ment or 1 cal auth rities of t he Phil �ppi e a y pol or r si nc t. x, or any irnpo vt r export duties, or any oth r tax on per s al prop r t y im orted f or hi Jn s e provided , that privat oJned vel i cles shall u j c o pay oll i f only: wh n certified as ' eing use for L ili- tary purposes by appropriate Unite tat es authorit ie s, t he n r mal license pl ate fee; therwis , t he n rmal lie nse pl at an r egi .. trati n fees; � (4) No national f t e United States, or c orporation organi zed under he law of th Un i t ed 'tates, resident in the Uni.ted Sta es , shall be lia le to pay in e ax i h Phil- ippines in respect f any profi ts derived nder contract made in the United tat s i t h t he Government of the United tates in c onnec tion with the c onstruction , mai enanc , op a i and defen se of the bases , or any tax i n the atur a l i ce i r ct o a servi ce or work for t e United tates in connec tion i t h the construc tion, aint nanc , op ra io and defense of t he as s. 27 4

DEClSI � I CBn. CASE 'Oo 22366 ... 11 - , fr the a ove ot d article on o ld readily see that tlle exemption fr inc e tax. may e invo e only b the follo ing: (1) members of th United St�tes rmy wh �r� t � ilip , J {2) nati n ls o tb - Unit � States, and (3) corp rationil orga ile in .:c:'� and r�sid -nts of the nited �tats. Ovi usly, the efendants her-ein ar t a ong th se exe pte fro t h� paymeftt of income tax. As a atter Q fact, th y are expressly exc pte fr the exempti n � p ra- graph 1 �f Art..ic le II which reads in pu-t as ollows: �� r .of the United tat s r e Fo.r~e FiliRio� i~~iztn�, ser ing in t ili i . s i c n- nectitn with the bases x x x x sh � l e liabl te pay i come tax in the hili pines x x x x ." � bviously, if the xempti n wa$ in en ed to be applicable th t erica a Filipi o c nc ssio aires within the as , the treaty oul . un ou te ly hav s sta.t in n� unc rtain ter san would . ot iave a e the e.: pti.on. In order that such inc e in ques i n ay considere exe pt from the tax, the law ust e clearly an �e init ly pro ide. It cannot s~ ply be inf rred therefrom. e find no justificati n � i~raasing the sc pe of the exe ption beyond that hich th Philippi e� nited States ases Agreement intende to cover. " _xempt1ons fr om taxation ar highly disfavored in""la ; and h ho �1 ims .n ex mp- tion m\Jst be able to justify his claim y the elearest grant of .organic O:r statute la � An �xemptlon from 275 - . - - -�--~~~--'""""""'--....~~--~----------.-......~---

�cDEzvCuIS. l� ItA . o. 22886 .. 12 ... ur en cannot b . p r mitt <i t exis t � pon ag implic ati n . " (Asia tic Petroleum Co. v � Lanes s 49 Phil . 466- 475; al so H use vs . Poe das 53 il. 338t G v �t of the Philippin vs. nte e 1 d . d �,.f as PhU. 338. The s c ond issue call f rr t e pplication and 1aterpret ti f section 3 1 and 332 f t ti cal Intern 1 Code the pertinent por i . � f hich r�� as f ell � ec. 331. eri d of l imitati n up n a$sessment and c ollec t i on . Except s pro- vid in the succeedin section, internal r ev nu taxes shall be as sessed within f i v y ar aft r t h r turn s. file ,. nd no proc ding i n court without assessment for t he coll ecti of sue tax s shall b gu � aft r t he ex iration f such per iod~ x x x x �sec. 332. Exce ptions s to eri of 1 � it@ti . e f s.sessment .and ~ollect! n t axe .~ X X X X X � (c) Where the assessment f any in- tern l revenua tax has be n ade i � t p riod of 1 mitati n � ov prescribed sue � t ax ay c ollect by i st ra i n an lev or " a proceedi ng in co r t , b t only i f - gun ) i t hin five year . after t e ss- - ent of t he tax, or \ 2.) pr i r to t h expira- ti�n of any period f t collection a r eed upon �n writing oy the Col 1ector of Internal �ven e and the taxpay r ' or h . ira ~ tion of such f ive- y ar pe:riodo ! h ~riod $Q .agre& upon y e xt nd by q agreement$ in wr it i ng made befor �t h pira- tion t h p ri d pre �a l y gr d � I i r eed b~twe. n h partie t.a he i co t�a r t~rn of the hil ippi ne Consolidated reight \ tine�~ It�c. ' 1ere file d :1 � asse s s ed o +... f ql lowing '\ cl�t _s : Rtfuan �1�n�d1edYear- D-Watae-s f!_ e_ g. 31, 1941 ov. 28, 1947 aec ; ~ ,1, 1947 4 , 285 t74 27 6

DECISI ILA ClVlL � 22366 .. 13 .. r:. � � .Aug. 31, 1947 t fici ncy Tax)M r . 31, 1949 1, .97 ...... �..._ 1948 ec. 1 1948 .JJaan�. 9- ,I 1 49 D c � 31, 1949 l9W 21 , 733. 6 1949 7,933.57 .. 1 51 � 9 1 an� 17. 1952 ;3,3 2. .... It is cla � y efend ts hat t e right gov �rn nt tA.) c oll ct inc. e ta es f or the fisc.al years 1947 and 1948 alre dy pr scri and t r s ul bt no 1 nger ny d fic1 y thereforo airt iff on th other hand eont ds that h col! ction .f such xes ts still it in t five (5 y r pr~scrip ive p rio f�r t collection of the tax invoki-n~ �. in this �nsta ce t e provisi ns f ection 332 {c) of the Tax d , cited a ve. 1�o bu tr s i stan , plaintiff furth r �� n� ��kes Gtion 333 of the same C which provi es or tb s spensi o the peri of l it ti pr vid in Sections 331 and 332 thereof and argues that duri g tb administr tiv revi of i case y th ard of Tax Appeals, fr pte er l5, 1 5 to ecemb 1953 or a perio of three {3) m nths and nine {9 d s, the perio of pr s~ription to collect t e ta wa susp nde and shou'ld e deducted from th five (5 year period. r plaintiff r lies on le co .entaries of � Formill za on ection 33~. e quote: "In case a taxpayer appeals the assess ... ment f the Co 1 ctor f I ternal ev nue to the Secretary of Fi ance, n fx�om the Secre- tary of Finance t the r � si}i ' tt the C llec- tor of Internal venue i pr hibited ro ginning distraint and levy of taxes and during sai period the ru ing of the sta- tute sh uld b suspended." � (.Conunen arie an Jurisprudence on the ~ational Irternal R venue Code, Vol. II ., p. 965.} n the other hand, th def ndants contend that the right ef t he plaintiff to coll ct said taxes has 277 I

DECZ IO � IlA CIVIL CAS � 22366 - 14 - already prescribe. , si ~e r than five (5) years have el ps d fr he at f a ess ent t the date � e c nc r with efendant in r g rd to tw , items. Co p tin the ri d fr the date . f sses the ate. he e prese t acti f c llecti n a �f th s o D. ce er 1~ 7 h�� pt' scrlb as the s ho l hav en a t l ter _ha c- r 1,. 1952. he col1 cti n t tax assess on January 3, 1949 ha al prescr� d, th fiv -year p ri ha i g expired January 3, 1954. The ar � f plai tiff that the a i istrative r ie �us- pe ded t e n 1 f the p ri i f ec- ti 27 f xec tive Or er o. 401 0 ��ri s .f 1951, provid Sl ard of tax pp als r th d c si the oll ct r f Internal e e r the Commissi er f Cust shall spen the payaent, le y, distraint and/or sale f any p~operty of the taxpayer f�r the satisfaction f is tax liability as provid y xi ti 9 la s.� It is clear that th afore-ci e ection, did t forbi the C !lector f Inter al eve t proce ith the coll tian �f a tax, either y distrai er levy r y c rt proc edi eve durin the pendency ef the administrative revie � . Therefo~e, s ch admi- nistrative proceedin s id not suspend the r n 1 of the perio of p~escription for the collaction of t e tax in this case. e b lieve that th1 clear an un - 278

\. ... '; 4 DECIS ION � ILA CIVIL CASE NO. 22366 - 15 ... bi u a provision of la should control in this in- sta ce. tHE fOREGO G, e find th defen- IN vm dants lia le for the payment of th sums of � 1,004.97, 1.933. 57, li-3, 2~00 carr sponding to the defici ncy inco e tax assessment of arch ~ 1949 and to the in� come tax as . essment of January 9? 1900 an January 17, 1952,. respectively;, an they are hereby ordered to pay t t ollector Q� Internal evenue t he said amounts. together witll the c�orrespondl.ng surcharges and interests as pr vide by la~ � ith respect to th sums of . 4,28 .74 an 2l,.73 . 66 assa sed Decem er l,l 47 and Ja uary ' 194 ' respecti ely, the right of the plaintif t Collector o col ct t e same hl!'Vi g prescri � the t . rnal evenue is here y enjoine from collectin said ountso ith c sts again defe dants� � ilippi es" n 16, 1956. l CO . UR1 �1AN ssoci Presiding 3udge MARIANO NABL inhibited himselfo .. 279