JOSE PANTOJA, PETITIONER, VS. SATURNINO DAVID, ETC., ET AL., RESPONDENTS.

This is a review of the resolution of the Court of Tax Appeals dated
January 7, 1956, dismissing Jose Pantoja’s “petition for prohibition.”

It appears that on November 16, 1939, the Collector of Internal Revenue
assessed against Pantoja the sum of P4,934.28 as fixed and percentage
taxes plus surcharges, upon sales allegedly made by him to Aboitiz
& Co. during the years 1935 to 1938; that upon Pantoja’s failure to
pay, the Collector issued a warrant of distraint and levy, on February
13, 1950 which resulted in the forfeiture to the Government of certain
real property of Pantoja in Danao, Cebu, for lack of bidders at the
time of the scheduled sale at public auction on January 30, 1951; that
on July 17, 1952, the Provincial Treasurer declaring the forfeiture to
have become absolute, ordered the municipal treasurer of Danao, Cebu to
get the forfeited property; that as the latter official had taken or
was about to take steps to recover the land, Pantoja filed this
petition for prohibition in the Cebu court of first instance charging
the respondent officers with lack of jurisdiction and abuse of
discretion, even as he denied liability for the internal revenue tax.
He said they had given him no opportunity to be heard. He further
alleged prescription of the tax liability and consequent lack of power
on the part of the respondent Collector to levy and distrain his
property, inviting attention to the eleven (11) years that had elapsed
from the assessment in 1939 to the distraint in 1950.

The
three respondents (the Collector and the two treasurers), moved to
dismiss on the ground of lack of jurisdiction and of cause of action.
The court of first instance after denying the motion, and the
subsequent motion to reconsider, set the case for hearing on September
2, 1954.

Meanwhile, the Court of Tax Appeals was organized
in June 1954. So, on July 21, 1954, upon motion of respondents, the
Cebu court transferred the case to the Court of Tax Appeals pursuant to
sec. 22 of Republic Act 1125.

Before the latter court,
respondents presented another motion to dismiss based on the game
grounds raised before the court of first instance. This time, their
motion was sustained. The tax court held in its appealed resolution:
(1) the petition constituted in effect an injunction proceeding, and
the Revenue Code provides that no court shall have authority to
restrain the collection of any internal revenue tax; (2) the remedy of
the petitioner is to pay the tax and then sue to recover the amount
paid; and (3) the distraint and levy amounted to collection of the tax
and there was nothing left to be prohibited or enjoined.

Wherefore, Pantoja filed this request for review. We find it to be meritorious.

The power of the Court of Tax Appeals to act on petitions for the
annulment of distraint orders by the Collector of Internal Revenue has
been recognized by this Court in Collector of Internal Revenue vs. Zulueta, 100 Phil., 872; 58 Off. Gaz. 6532 and Blaquera vs.
Rodriguez, 108, Phil., 335; 54 Off. Gaz. 8632. In the first, the reason
for annulling was—like the present case—prescription of the right of
the Collecting Officers to issue the warrant of distraint. In the
second, this Court reiterated the view that the Court of Tax Appeals
constituted the legal forum wherein to discuss the validity of a
distraint by the Collector of Internal Revenue. Again, in Collector vs.
Avevelino, 100 Phil., 327; 53 Off. Gaz., 645, we held that proceedings
to invalidate a warrant of distraint or levy did not violate the
prohibition against injunctions to restrain the collection of taxes,
because the proceedings were directed at the right of the Collector to collect it by distraint or levy. (See also Castro vs. Blaquera, 100 Phil., 981; 53 Off. Gaz. 2135.)

In view of these rulings the power and authority of the court a quo
may not be denied. If and when the allegations of Pantoja are properly
proved, it may and should annul the distraint on his property.

The record will be returned for further proceedings. So ordered.

Padilla, Bautista Angelo, Concepcion, Reyes, J. B. L., Barrera, Paredes and Dizon, JJ., concur.