COMMISSIONER OF INTERNAL REVENUE, PETITIONER, VS. JOSE CONCEPCION, AS ANCILLARY ADMINISTRATOR OF THE ESTATE OF MARY H. MITCHELL-ROBERTS (DECEASED), AND JACK F. MIT­CHELL-ROBERTS…

In this petition for the review of a decision of the Court of Tax
Appeals, the decisive question, one of first impression, is whether a taxpayer
who had lost his right to dispute the validity of an assessment, the period for
appealing to the Court of Tax Appeals having expired, as found by such Court in
a previous case in a decision now final, and who thereafter paid under protest
could then, relying on Section 306 of the National Internal Revenue Code^[1]
sue for recovery on the ground of its illegality?  The Court of Tax Appeals, in the decision
under review, answered in the affirmative. 
We hold otherwise and accordingly reverse.

In CTA Case No. 669, respondents Jose Concepcion,
as ancillary administrator of the estate of Mary H. Mitchell Roberts, and respondent
Jack F. Mitchell-Roberts, husband of the deceased, sought a refund of the sum
of P1,181.33 and P2, 616.10 representing estate and
inheritance taxes on 50 shares of stock of Edward J. Nell Company issued in the
names of both spouses “as joint tenants with full rights of survivorship
and not as tenants in common.”  The
above assessment was made by petitioner Commissioner of Internal Revenue on the
ground that there was a transmission to the husband of one-half share thereof
upon the death of the wife, the above shares being conjugal property.  Respondents maintained on the other hand that
there was no transmission of property since under English law, ownership of all
property acquired during the marriage vests in the husband.  Moreover, the shares of stock were issued to
the spouses “as joint tenants with full rights of survivorship and not as
tenants in common.”  Not being
agreeable to the theory entertained by petitioner Commissioner of Internal
Revenue, respondents, in a previous case, CTA Case No. 168, appealed such a
decision under Republic Act No. 1125. 
The Court of Tax Appeals, however, dismissed such an appeal as the peti­tion
for review because it was filed beyond the reglementary
period of 30 days.  That decision,
rendered on April 29, 1957, became final.

What next transpired was set forth in the appealed decision, CTA
Case No. 669, thus: “Whereupon, on June 14, 1957, peti­tioners paid the
taxes in question amounting to P1,181.33 (as estate tax) and P2, 616.10 (as
inheritance tax), inclusive of delinquency penalties, and at the same time
filed a claim for the refund of said amounts (Exh. A. BIR rec. pp. 83-87). 
In the claim for refund, petitioners also invoked the reciprocity
provision of Section 122 of the Revenue Code (CTA rec. pp. 92-93).  Without waiting for the decision of
respondent on the claim for refund, petitioners instituted the instant appeal
on June 11, 1959 in order
to avoid the prescriptive period of two years provided for in Section 306 of
the Revenue Code.”^[2]

Petitioner Commission of Internal Revenue, before the Court’ of
Tax Appeals, raised as one of its defenses the fact that res­pondents were
“estopped from denying the legality and
correctness of the assessment for
estate and inheritance taxes in view of the fact that
they paid the same in pursuance of a decision of the Commissioner which
has become final, executory and demand­able as a
result of the dismissal of CTA Case No. 168, * * *.”^[3]  Such a defense was considered unavailing by
the Court of Tax Appeals by virtue of its decision in La Paz y Buen Viaje Cigar & Cigarette
Factory v. Commissioner of Internal Revenue.^[4]  It was the view of the Court of Tax Appeals
that with no procedural obstacle to stand in the way and with the spouses, both
non­resident English subjects, being married in England, their pro­perty
relation thus being governed by English law, the national law of the husband,
by virtue of which there was no transmission of property from wife to husband, governs, with the result that no tax was demandable.  Petitioner Commissioner of Internal Revenue
was ordered to refund the inheritance and estate taxes paid in the amount of
P3, 797.43.  Hence this
petition for review.

The Court of Tax Appeals
in relying on its previous decision in the La Paz y Buen
Viaje Cigar & Cigarette Factory and ruling
against the defense of the finality of the assessment, after the dis­missal of the appeal in CTA No. 168
in view of the failure to have it filed within the reglementary period of thirty (30) days, must have been
of the belief that this Court, in affirming its decision on March 30, 1963,
without however passing on the above question, did give an indication of its
probable thinking on the matter.  Such is
not a correct appraisal of the situation however, for on March
30, 1963, the very
same day its La Paz y Buen Viaje
decision was affirmed, the opinion in Republic of the Philippines v. Lopez^[5] was handed down.  This is an appeal by the Republic from an
order of the Court of First Instance of Baguio
dismissing its complaint for collection of a deficiency income tax against
defendant Lopez on the ground that the action had prescribed.  After noting that prescription as a defense
did not lie, this Court, in an opinion  by Justice J. B. L. Reyes, likewise stated: “Another ground for
reversing the dismissal of the complaint is that the proper remedy of the
taxpayer against the assessment complained of was to appeal the ruling of the
Collector to the Court of Tax Appeals. * * *.”  The precise question in this litigation then,
while undoubtedly one of novelty, is not without illumination supplied by
radiations from past decisions.

For subsequently, in Republic v. Lim Tian
Teng Sons & Co., Inc.,^[6]
the above doctrine was reaffirmed categorically in this language:  “Taxpayer’s failure to appeal to the
Court of Tax Appeals in due time made the assessment in question final, executory and demandable. 
And when the action was instituted on September 2, 1958 to enforce the deficiency assessment in
question, it was already barred from disputing the correctness of the
assessment or invoking any defense that would reopen the question of his tax
liability on the merits.  Otherwise, the
period of thirty days for appeal to the Court of Tax Appeals would make
little-sense.”  Once the matter has
reached the stage of finality, in view of the failure to appeal, it logically
follows, in the appropriate language of Justice Makalintal,
in Morales v. Collector of Internal Revenue,^[7]
that it “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.”

In the same way then that the expedient of an appeal from a
denial of a tax request for cancellation of warrant of distraint
and levy cannot be utilized for the purpose of testing the legality of an
assessment, which had become conclusive and binding on the taxpayer, there
being no appeal, the procedure set forth in Section 306 of the National
Internal Revenue Code is not available to revive the right to contest the
validity of an assessment once the same had been irre­trievably lost not only
by the failure to appeal but likewise by the lapse of the reglementary
period within which to appeal could have been taken.  Clearly then, the liability of respondent Concepcion as an ancillary administrator of the estate of
the deceased wife and of
respondent Mitchell-Roberts as the husband for the amount of P1,181.33 as
estate tax and P2,616.10 as inheritance tax was beyond question.  Having paid the same, respondents are clearly
devoid of any legal right to sue for recovery. 
The decision of the Court of Tax Appeals ordering petitioner
Commissioner of Internal Revenue to refund the above total sum of P3,797.43 cannot stand.

WHEREFORE, the decision of the respondent Court of Tax
Appeals under review is reversed.  With costs against respondents.

Reyes, Acting C.J., Dizon, Makalintal, Bengzon, Zaldivar, Sanchez, Ruiz Castro, and Angeles, JJ., concur.

Concepcion, C.J., on official leave.

^[1]
Section 306 provides: “Recovery Of Tax Erroneously Or
Illegally Collected. – No suit or proceeding shall be maintained in any court
for the recovery of any national internal-revenue tax hereafter alleged to have
been erroneously or illegally assessed or collected, or of any penalty claimed
to have been collected without authority, or of any sum alleged to have been
excessive or in any manner wrongfully collected, until a claim for refund or
credit has been duly filed with the Collector of Internal Revenue; but such
suit or proceeding may be maintained, whether or not such tax, penalty, or sum
has been paid under protest or duress. 
In any case, no such suit or proceeding shall be begun after the
expiration of two years from the date of payment of the tax or penalty.”

^[2]
Brief for the Petitioner, Decision of
the Court of Tax Appeals, Appendix A, p. 41.

^[3]
Id., p. 42.

^[4]
Court of Tax Appeals Case No. 700, August 4,
1960.  The decision of the respondent Court of Tax
Appeals was affirmed by this Court in La Paz y Buen Viaje Cigar & Cigarette v. Collector of Internal
Revenue, G.R. No. L-17830, promulgated March 30, 1963.  The
opinion however by the then Justice, now Chief Justice, Concepcion
passed sub silentio on the question of
whether the failure on the part of a taxpayer to file its appeal within the reglementary period of
30 days under Republic Act No. 1125 closed all avenues available to the
taxpayer who disputes the legality of the assessment.

^[5]
G.R. No. L-18007,
March 30, 1963.

^[6]
G.R. No. L-21731, March 31, 1966, the opinion being penned
by Justice Bengzon.

^[7]
G.R. No. L-16759,
August 31, 1966.