CTA Case No. 229 (Resolution)

' 1\EPUBLIC F THE PIDLIPPINES CO :\T OF TAX APPEALS MANLLA tl '� 'i , e titioner, - ver sus - C� T. � nS � hU. 229 J3Ul Ci">V vF Ir-JT , 1~, L 1 dVE1'illE , [ espondent . x- - - ~ - - - - - - - - - - x retitioner , an operator of a ric e h.ill in Bantay , !loc os Jur j was required by respondent , in ) a lette r dated ~ove~oer 13 1 1952 , to pay ~l , U25 . 78 as defi c ien c y perc entage tax in c ludi~s surc harse ~ for the period fro1.1 the first quarter of 1951 to the sec ond quarter of 1952, pursuant to 3 ctions 183 and 189 of the 1,ational Internal 1 evenue Code , plus i--20 o00 as c o:-apro:aise in c as petitioner des� red to settle extrajudi c ial y ~is penal liaoility under Sec tion 209 for violation of said Jec tions 18 and 189 $ 1-lot sati s ied with the as se SS!J1ent , petitioner t requested that the c ase oe r eviewed oy the Con- fe r enc e ~taff of the Bureau of Internal � evenue . -During the hearing , petitioner offered to settle the c ase by co.11pro~.1ise by virtue of whic h he would pay a-1 2 . 50 in full and c o iplete settle;nent of the c ase . The Co ferenc e Jtaff , after c onsiderins the c irc u.nstan c es of the c ase , favorably re c o.n..1ended the settle.nent of the c ase by C0111promi se , but it believed that �t he a,aount of ;. lC2o 50 offered by pe -

m-~6LUTIOh - � C � T. A . CJ-.vi. l\cD . 229 - 2- titioner was too low , and for this reason it suy- 9ested the a.1ount of i-3C0.,0U 1 whic h was approved by � respondent . Kcc ordinslY t in a letter dated April 5 � 1954 , petitioner was advised that his offer to c o,.lprol;1ise the c ase was a c ceptable , out that his offer of :;.-102o 50 was "too low and inadequate a 11 H.es - pondent then su'::J;ested that the su.:1 of c 3(,0 . c0 would 0e ac c eptable , which ar,ount c ould De paid 11 i 1ilue - diately upon your receipt nereof to the de0uty pro- vinc ial treasurer thereat so that this c ase ;nay be c losed. 11 Page 69 , BIR re c ords o) ~~titioner not having answered the letter of respondent dated April 5 , 1954 , the latter wrote another letter on usust 8 , 1J55 , statins that "unless you effe c t pay 1ent of the said su ,n of ~3(.;~.) . 00 io the Deputy Irovinc ial Treasurer thereat , on or Defore .' ugust 20 , 1�955 , this Offic e vtill at onc e pro c eed to take drasti c a c tion asains~ you in a c- c ordanc e vvith law , 1.Jitnout further notic e . " (rage 7U , Bid. re c ords . ) P etitioncr 1 in a letter- d2.ted August 18 , 1~55 , asain requested that the c ase be revievved. , s.;i ving rise to the i iapli c ation that the c6unterproposal of respondent was not acc eptaolc to t he former o ( Pase 72 , .DIH re c ords . ) On ..3epte.,io er 24 , 1955 , respondent advised petitioner that not - withstanding his alle2ations , "this Offic e c an find no valid reason �co further reduce the said amount of :t 3CX.... . Uv , �' feti tioner was , therefore , requested to f-;ay tlle said a, lOUnt 11 vVlthin ten llJ J days fro ,.l

r.!vGLUTIOL - � ~. f. .n . C, .vL .,L;. 22') - 3- fOUr rec ei;;t ~~ereor , u1 vrder �tL,at this case 11 2-.y 0e c loseC: . '1 11 January 4 , l 'J5 6 ) pet:!. tioner filed ui th this Court 2 r ct:!.�cion fo:c revie\: of t h e al - le'ded de c _sio,1 of responde:1t rec:uirin;J the for�.er u to pa f i <:iCA.� . co alles,edl y C:....1c as }Jcrc entase tax and ~oun~el for respondent , on Januar � 14 , 1 9 ~ filed Cl ..otion to dis ..liSS tLe ret:..tion for .... ev-~t?W Oil the ';;.rounds that lJ ti1is .:::ourt has no jurisdic - tion over the c a se , and ( 2) t he etition stat e s no c a us e of a ct i on., lt is alleged that this Cour t has no j uri s- di ct i on to e ~tert a i n t he her e i n p et i tio n f or r evie\J f or t he r eason tha t i t was filed 0eyo:1d the &. - day };Cr i od pr ovided in 5:ec ti on 11 of Hepu.)lic : ..c t . .o . 1125 ., .Je quote fr o1.1 tlie " �..otion to Dis....L.ss: 11 �t'� c ' s 11 Un ~'cr "~ ;. J.i..J.- 14 .rorC~ ..,.J O;-'-.-i..l ..J l~CA~c'L�..-c:J 7 _..;_-c' ..l. .1.. obvious tr,at t;le finnl decisio�1 in t11e :..nstant c ase o{ t:1e ro sponclent is con- tained it1 nis letter ciatec.i .'l.pril :: , 1 J::4 ., .~<. :1<i ; ct:L tioncr ad.1i ts ii1 ~� arn~raph 5 o[ -c..1e ,.Jeti t~_on tLat ne re c ei vetl ::ne cle c i S.Lon ~E tne reSJOndent c ontai~ed in a le t t~r -~a tee.. /\u0u st 2 , 1�J:. r:- , de.aanc.:..n0 pn y..1e:1t of the su 1. o� :..-~CO . Cv . in his letter of .- .uc u st 18 , 1 )55 oeti tioikr ad1.�i t s uavin c.. recc::.ved resl)ondent 1 s lettc~ dated u n - ~ ust " , 195:J . � It .ay therefore De safclf c::. ssu. .eU. that petitioner r0 c ci v0d :cespo~1 - C:ent ' s letter 0-~te~..-t , u:Just ~ , 11}:.55 so .e - tl ,e ,JCfore .urJust 1.:2 , 1)::,::, . Under sec- tion 11 of l epu 'Jli c ��c t .. o . 1125 it r :co - vides t11a t a:-1 y pe r son , asso c i~ tion or ~or)oration a dverselt ef:e c ted 0y a de - c ision or rulin�~ o f the Collec cor of Ll - t croal .i.E-venu e ..1ay �i.::.e ~~1 a1 :)ec-.1 ~n L1e Court of fax �. ,Jpcals v.iL:i.n t�r�_rtt (2L) days after the rec eipt of suc h dec!sion or rulins . Inas ru c h a s t he instant ~e t ition was filed vlith tnis r:onor able :..::ou r t on l y on Januar y 4 , 1)56 , or .:ore tha:-1 fi v e 5) .1ont h s - ~fter the re c ei~t o f respondent ' s , ...

�~~v~ULU.Jl'< - (.;. T. . � '--"' �E r"o. 229 - 4- de c1s1on , it is obvious that the same was filed oeyond the re~l~nentary period . Hence , this Honorable ~ourt has no juris - di c tion to take co~nizance of this case . " 3oth petitioner and respondent sean to a~ree that the final decision of respondent in this case � which is appealaole to this Court is tne decision contained in the letter of respondent dated April 5 , 1Y54. Tnis is erron~ous. As al=eady adverted to aDove J the decision of respondent requiring pe - titioner to pay ~1 , 025 . 78 was contained in the letter of the forr:~ er dated ~.ove,.lber 13 , 1952 . Dur- ing the hearing conducted by the Conference 0taff petitioner offered to co.nprodlise the case 0y tne pa~nent of ~102 . 50o To this proposal , respondent replied in his letter of ~pril 5 , 1954 that he was a0reeaole to the co,.1pror,1ise settler,1ent of the case provided the amount offered would be increased to ~3W . <.X.; . The said letter of i pril 5 , 1')54 states , in part , as follows: 11 However , your offer to extraju - dicially settle the c ase oy the pa~nent of the su:,1 of ;..lv2 ~ 5 is too low and inadequate . It is , therefore , sus.;gested that you increase your offer to i30U . 00 and pay iilinediately �upon your receipt hereof to the deputy provincial trea- surer thereat so that this case may De closed. " It is quite clear that the letter of i.pril 5 , 1954 dlerely contained a counterproposal for the settlement of the case oy comprooise , which is authorized under� Jection 3C) of the National In- tarnal ..levenue Code . It is in no way a decision �

l-i.E0GLJT l()r.; - -..:. r . . . 0ho..3. 14C. 229 - 5- which is ap~eala0le to this 0ourt. retitioner is at liberty to accept or reject the co~nterorouosal of respondent , as in fnct he i '1lpl iedl y rejected it when he asKed for further review of the case in rno ref ore ' the pro- posal to co.npro.JJ.se the cc:se re.1ained open for further neJotiations , and if no asree1ent could oe reached , respondent ' s duty is to enforce nis deci- sion to collect the suJ of 1l ,L25,7P , the said de- cision having beco.ne final and unappealaole. 1\ taxpayer who feels hi~self ag~rieved 0y a decision of the ~ollector of Internal ;\evenue .nay appe '11 to this 0oJrt within 30 oda ys after r ?C e:Lpt of such decision , pursJant to Jectio~s 7 and 11 of J.epub l ic ,:..ct r~o. 1125. Jection 7 of s0.id / .ct pro- vides that this Court shall exercise exclusive ap- pellate jJrisdiction to review OJ anpe2l - ":.. eci sions of the 0oll ector of _: n- ternal J.evenue in c J. se s ::.nvol v:_n:: eli s- pJtcd ~ssessJent~ , refunds of intern~! revenue taxes , fees or other charses , penalties i .1rosci in relat.ion thereto , or other ..1at t er s ori sine_; Jn:ler the r~a tional lntern1l ;l.even�Je ..:;od.:; or other . lav~ or part of l2w ad.n.Lnis�tered oy the Jureau . of Internal Keven~e.~ The terr.1 �� decisions" nent ion�?d in ...; ~c -c~on 7 refers to deter 11inat ions ..1ade or arrived at ,) 1 the 0oll ec- tor which >VOJld ,Jeco :1e final and executory 'Jnless .�odlfled or reversed oy said official , or epoealed to a su;H~rior a~thority i.n accord? 1cc '.vi th lc~�i . .:)ecti.on :.L;~ of t:1e .Zevenue 0oJe ,~1t:1orizcs the 0ollector of .Internol 1\evsnue to nco. tpro~tiise "10J' civil or ot;ler c2_e ~ri:;ins; Jnder this 0o:le or other �

i E..30LUT:OIJ - C. T,.1 .� c,~E 1'~0 . 22'} ;" - 0- law or part of law ad~inistered by the Bureau of In- t ernal J.i.evenue . 11 The term 11 c ompromise 11 has Deen de - fined as - 11 s ettle1nent Dy aroi tration or by co0sent reachea ny mutual conces- sions; a reciprocal aoatement of ex- treme demands or rights , resulting in an agreell1ent? x x x 11 ( .: e0ster ' s 1\eW Internatlonal l..Jic tiQnaryo ) rihen respondent 1i10.de a counter- offer in his letter of i pril 5 1 1954 to the offer of compromise submitted by petitioner , it was not a decision made which vould become final and executory unless re - vised or !llOdified by the foru1er , or appealed to a superior authority . Petitioner , as we have said , was at perfect liberty to ac c ept or reject it; and in case of rejection , petitioner could not be legally bound oy the counter- offer , and neither could the respondent enforce the same . It follows that the counter- offer made by respondent in his letter of April 5 , 1954, is not a decision within the meaning of Sections 7 and 11 of ;epuolic h c t Nco 1125 , which is appealaole to this ~curt . Sven granting arguendo that the final deci- sion of respondent which is appealable to this Court is contained in the letter of August 5 , 1954 , we agree with counsel for respondent that the herein petition for review filed on January 4 , 1956 was filed out of time (Section 11 , Republi c ~c t ~o . 1125) , and that it states no cause of ac tion (Sec tion 2 , rlule 5 , rlules of the ~curt of Tax Appeals , 51 OoG. 11JO , 9 , P o 4635 , September , 1955) o

1 S0GLUTI0t� - C. f . ,. �o C~ ~J~ l~C o 229 - 7- petition for rev� ew is here-J} diS. tlissed , vdth costs asainst petitioner � ..:anila , Philippines , ,~ar c :1 :, 1 l956 o � J