RAFAEL MORALES, PETITIONER, VS. COLLECTOR OF INTERNAL REVENUE, RESPONDENT.

In
compliance with Section 92 of the National Internal Revenue Code
petitioner, on December 27, 1950, informed respondent that his wife
Belen Lansangan had died the previous November 1, leaving real and
personal properties. On April 28, 1951 petitioner filed with the Bureau
of Internal Revenue a copy of the deed of extrajudicial partition which
he and his two daughters had executed. On April 20, 1951 respondent
issued a notice tentatively assessing the estate tax at P1,272.53 and
the inheritance tax at P1,404.85. Said sums were paid by petitioner.

On
May 14, 1956 respondent issued a new assessment for P641.39 and P631.60
as deficiency estate and inheritance taxes, respectively, with interest
in both instances, or a total of P1,272.99; and on October 11, 1956
respondent asked petitioner to pay the amount within ten days. On
October 15, 1956 petitioner addressed a letter to respondent,
contending that under Section 331 of the Internal Revenue Code
reassessment of the taxes had already prescribed, because more than
five years had elapsed since the submission of the deed of
extrajudicial partition on which the original assessments were based.

On
December 28, 1956 respondent rejected the claim of prescription and
reiterated his demand for payment. A reminder was sent to petitioner on
March 26, 1958, with the warning that after five days summary remedies
provided by law for the collection of the taxes would be resorted to.

On
October 14, 1958 respondent served on petitioner a warrant of distraint
and levy, with the corresponding notices of seizure and sale. The sale
of the distrained properties was scheduled to be held on December 15,
1958.

On November 17, 1958 petitioner
requested the cancellation of the warrant of distraint and levy, but
respondent denied the request on December 5, 1958.

On
December 8, 1958 petitioner filed with the Court of Tax Appeals a
“petition for review,” stating therein that it was “an appeal from the
decision of the Respondent, as contained in his letter dated December
5, 1958.”

On December 18, 1959 the Tax Court,
finding that what was properly appealable to it was respondent’s
letter-decision of December 28, 1956 and not that of December 5, 1958,
ruled that the appeal was filed out of time and so dismissed the
petition motu propio. This is the ruling that is now before Us for
review.

Petitioner assails the ruling as
erroneous and points out that in his petition for review before the
Court of Tax Appeals he specifically stated that respondent’s letter of
December 5, 1958 was the decision he was appealing from, and therefore
his petition, filed only three days later, was timely.

We
do not consider said statement made by petitioner in his petition as
decisive. The pivotal question is, on what particular issue decided by
respondent did petitioner seek a review in the Court of Tax Appeals?

The
allegations in the petition filed in said Court are clear: that the
warrant of distraint and levy as well as the notices of seizure and
sale issued by respondent were null and void because the deficiency
estate and inheritance tax assessments on which they were based, both
dated May 14, 1956, were issued more than five years after petitioner
filed his tax return on April 28, 1951 (presumably referring to the
deed of extrajudicial partition on which the original assessments were
based).

This question of prescription was the
same one raised by petitioner in his letter to respondent of October
15, 1956, wherein he said that a reassessment of his tax liability was
no longer feasible by reason of the lapse of the five-year period. It
was the question that respondent decided in his reply-letter to
petitioner dated December 28, 1956, rejecting the latter’s plea on the
ground that the law applicable was not Section 331 but rather Section
332 (a) of the Tax Code, ^[1]
which fixes a ten-year prescriptive period, no tax return having been
filed by petitioner in this case. In other words, it was the very
question decided by respondent on December 28, 1956 that petitioner
sought to present to the Court of Tax Appeals in his petition for
review, the decision being then properly appealable because it was on a
“disputed assessment” within the meaning of Section 7 (par. 1) of
Republic Act No. 1125 (creating the Court of Tax Appeals), which states
that this Court “shall exercise exclusive appellate jurisdiction to
review by appeal x x x: (1) decisions of the Collector of Internal
Revenue in cases involving disputed assessments x x x.”

The
Tax Court cited the case of St. Stephen’s Association, et al. vs. The
Collector of Internal Revenue (G. R. No. L-11258, August 21, 1958 ),
where We held that “when a taxpayer questions an assessment and asks
the Collector to reconsider or cancel the same because he (the
taxpayer) believes he is not liable therefor, the assessment becomes a
‘disputed assessment’ that the Collector must decide.” The citation, We
believe, is apropos: it is from such a decision of the Collector, which
in this case was rendered on December 28, 1956 , that petitioner had
the right to appeal, within 30 days after notice (Sec. 11, Republic Act
No. 1125).

Petitioner claims that the St.
Stephen’s Association case does not apply here, because precisely it
was there held that of the two letters sent by the Collector of
Internal Revenue to the taxpayer denying cancellation of the disputed
assessment it was the second letter which was considered by this Court
as the “appealable decision.” But it should be noted that the ruling
was based on a statement in that second letter that “this decision
becomes final thirty days after your receipt hereof unless an appeal is
taken to the Court of Tax Appeals within the same period, in accordance
with the provisions of Republic Act 1125.” In other words, the
Collector himself indicated to the taxpayer what he considered as his
final decision, prior to which, in the language of this Court, he “must
have held the matter under advisement and considered his preceding
rulings as merely tentative in character, pending his final
determination and resolution of the merits of the arguments of fact and
law submitted by petitioners in support of their requests for the
cancellation and withdrawal of the assessment.”

In
the present case, the letter of December 28,1956 had the tenor of
finality. After disposing of petitioner’s claim of prescription, it
required him to pay not later than January 19, 1957. This insistence on
payment indicated unequivocally a denial of the plea for cancellation
of the assessment (Republic v. Lim Tian Teng Sons & Co., Inc.,
L-21731, March 31, 1966). Thus when respondent subsequently wrote to
petitioner again on March 25, 1958, he was already threatening to
employ summary methods of collection, as in fact he did later on.
Respondent’s letter of December 5, 1958 was not a decision on a
disputed assessment but referred merely to the manner of its
collection, that is, by distraint and levy, as to which the question of
prescription is not at all relevant.

Petitioner
says there is no proof as to when he received the letter-decision of
December 28, 1956. But it cannot be denied that he did receive it.
While in his memorandum he raises a doubt on the point, in his brief he
impliedly admits such receipt by alleging that he chose to ignore said
letter and “to treat it as an innocuous demand.” At any rate, on March
25, 1958 petitioner personally received respondent’s letter of the same
date, making reference to the demand for payment contained in the
letter of December 28, 1956. Consequently, even if only the receipt of
the second letter be considered as notice of the decision, the petition
for review filed in the Court of Tax Appeals on December 8, 1958 was
still out of time.

Finally, since petitioner
insists that he is not appealing from the decision of December 28,
1956, the same has become final and unappealable (Uy Ham v. Republic,
L-13809, October 20, 1959; Republic v. Del Rosario, L-10460, March 11,
1959; Republic v. Manila Port Service, L-18028, November 27, 1964) and
the matter resolved therein, that is, whether or not the deficiency
assessments against him were barred by prescription, could no longer be
reopened through the expedient of an appeal from the denial of
petitioner’s request for cancellation of the warrant of distraint and
levy.

The decision of the Court of Tax Appeals is affirmed, with costs against petitioner.

Concepcion, C.J., Reyes, JBL, Barrera, Dizon, Bengzon, Zaldivar, Sanchez, and Ruiz Castro, JJ., concur.
Regala, J., no part.

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^[1] SEC. 332. Exceptions as to
period of limitation of assessment and collection of taxes. – (a) In
the case of a false or fraudulent return with intent to evade tax or of
a failure to file a return, the tax may be assessed, or a proceeding in
court for the collection of such tax may be begun without assessment,
at any time within ten years after the discovery of the falsity, fraud,
or omission.” (Underscoring supplied.)