**Facts:**
1. **Initial Assessment (2014):** On February 13, 2014, Standard Insurance Co., Inc. (hereafter “Standard Insurance”) received a Preliminary Assessment Notice (PAN) from the Bureau of Internal Revenue (BIR) concerning its alleged documentary stamp tax (DST) deficiency for the taxable year 2011, amounting to PHP 377,038,679.55.
2. **Protest and Formal Demand:** Standard Insurance contested the PAN, but the Commissioner of Internal Revenue (CIR) issued a formal letter of demand. Despite a request for reconsideration by Standard Insurance, the CIR issued a Final Decision on Disputed Assessment (FDDA) on December 4, 2014, declaring a liability of PHP 418,830,567.46, inclusive of interest and compromise penalty.
3. **Petition in Regional Trial Court (RTC):** Standard Insurance opposed the FDDA and the tax imposed under Section 184 of the NIRC, claiming violations of constitutional principles. They filed a Petition for Declaratory Relief on December 19, 2014, before the RTC, requesting a temporary restraining order (TRO) and a writ of preliminary injunction (WPI) against the enforcement of Sections 108 and 184 of the NIRC until legislative changes were enacted.
4. **Interim RTC Orders:** The RTC granted a TRO on December 23, 2014, and a WPI on January 13, 2015. The WPI restrained the CIR from collecting the disputed taxes. The CIR’s motions to dismiss the case for failure to meet the requirements for declaratory relief were denied in February 2015.
5. **RTC Decision (May 2015):** On May 8, 2015, the RTC permanently enjoined the CIR from implementing Sections 108 and 184 of the NIRC on Standard Insurance until Congress enacted relevant legislation. The CIR’s motion for reconsideration was denied on July 10, 2015.
6. **Court of Appeals Dismissal:** An appeal by the CIR to the Court of Appeals (CA) via a Petition for Certiorari was dismissed due to procedural lapses by the CIR.
7. **Petition for Review on Certiorari:** The CIR then filed a Petition for Review on Certiorari before the Supreme Court, challenging the RTC’s jurisdiction and its granting of injunctive relief.
**Issues:**
1. **Was there forum shopping by the CIR?**
2. **Did the RTC have jurisdiction over the Petition for Declaratory Relief filed by Standard Insurance?**
3. **Did the RTC err in granting injunctive relief concerning tax collection under Sections 108 and 184 of the NIRC?**
4. **Did the RTC correctly apply the requisites of a declaratory relief action under Rule 63?**
**Court’s Decision:**
1. **Forum Shopping:** The Supreme Court held that there was no forum shopping. Different issues were raised before the RTC and CA, not fulfilling elements of litis pendencia.
2. **Jurisdiction over Declaratory Relief:** The Court ruled that the RTC lacked jurisdiction, as the declaratory relief is unsuitable for contesting tax assessments. Commonwealth Act No. 55 excludes tax issues from declaratory relief scope.
3. **Injunctive Relief against Tax Collection:** The Court annulled the injunctive relief, stressing that Section 218 of the NIRC prohibits injunctions against tax collection, unless specified exceptions apply.
4. **Requisites of Declaratory Relief:** The action did not satisfy the required elements of no prior breach and a justiciable controversy ripe for judicial determination. Alternative legal remedies were also available but not pursued by Standard Insurance.
**Doctrine:**
The case reiterates that declaratory relief is not appropriate for tax disputes. It confirms the statutory bar against injunctions impeding tax collection processes except in narrowly defined situations handled by the Court of Tax Appeals (CTA).
**Class Notes:**
– **Declaratory Relief:** Requires no breach, an actual controversy, and alternative remedies must be unavailable.
– **NIRC Section 218:** Courts cannot enjoin tax collection unless conditions in RA 1125 apply.
– **Forum Shopping Elements:** Predictive features include identity of parties, cause of action, and relief sought.
**Historical Background:**
The ruling reflects a consistent approach by Philippine courts to protect the swift and unimpeded collection of taxes, which are vital for governmental functions. Furthermore, it showcases the judiciary’s reluctance to intervene in legislative tax impositions, upholding separation of powers principles.
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