LIM CO CHUI, PETITIONER, VS. JUAN POSADAS, JR., COLLECTOR OF INTERNAL REVENUE, RESPONDENT.

These are original proceedings in mandamus brought by the Chinese
merchant Lim Co Chui, hereafter referred to as the petitioner, against
Juan Posadas, Collector of Internal Revenue, hereafter referred to as
the respondent, which have arisen out of the riots directed against the
Chinese between October 18 and October 20, 1924, and which have for
their purpose the remission of the penalties imposed on the Chinese for
failure to pay their sales taxes on time. The demurrer interposed by
the Attorney-General rests on the statutory aground that the complaint
does not state facts sufficient to constitute a cause of action.

The petitioner is a Chinese alien residing in the City of Manila,
Philippines. He is the owner of three dry goods stores located in
Manila. During the quarter comprising the months of July, August, and
September, 1924, the gross value of the merchandise sold in these
establishments amounted to P33,808.34. The tax of one and one-half per
cent on the business transacted during this calender quarter was
P507.13.

On October 18, 19, and 20, 1924, there existed in
the City of Manila a riot against the Chinese. Under such conditions,
they were forced to stay in their homes, especially on October 20th
when the riot was at its height. As alleged in the complaint, “in order
to end said riot it was thought proper and expedient on the part of the
Chinese citizens to close their homes and stores and in fact they did
close them as a result of a mutual agreement had thereon.”

On account of the conditions above described, the petitioner was
prevented from making a return on October 20, 1924, the last day for
paying the taxes due. Instead, on that day a representative of the
Chinese Chamber of Commerce acting for and on behalf of all Chinese
citizens, requested the respondent to extend the time prescribed for
the payment of the taxes. This request was denied by the respondent on
the ground that he had no authority to grant it. Subsequently, the same
representative of the Chinese asked the respondent to accept payment of
taxes due on the business conducted by all Chinese citizens which they
were not able to pay on October 20, 1924, without requiring the
additional increase of twenty-five per cent as a penalty.

On
October 21, 1924, the petitioner tendered payment to the respondent of
the tax due on his business, stating at the same time that his delay
was due to the riot. On November 3, 1924, the respondent refused to
accept said payment saying that according to existing law, he had
neither power nor discretion to accept the tax without the additional
penalty of tweny-five per cent. On request for reconsideration, the
respondent again declared that he lacked power to grant the request,
although admitting that the additional tax of twenty-five per cent
“seems unjust and excessive.”

On the above facts taken from
the allegations of the complaint as admitted by the respondent, we are
asked to declare that the Collector of Internal Revenue has
discretionary power to remit additional percentage taxes and are asked
to require the said Collector to exercise his discretion. Two
provisions of law, sections 1458 and 1582 of the Administrative Code as
amended, are cited in support of the petition.

Section 1458
of the Administrative Code, as last amended by Act No. 3074, provides
the following: “The percentage taxes on business shall be payable at
the end of each calendar quarter in the amount lawfully due on the
business transacted during each quarter * * *. If the percentage tax on
any business is not paid within the time prescribed above the amount of
the tax shall be increased by twenty-five per centum, the increment to
be a part of the tax.” This provision is mandatory. It provides a plan
which works out automatically. It confers no discretion on the
Collector of Internal Revenue. That official may not disregard the law
and substitute therefor his own personal judgment.

Section
1582 of the Administrative Code, as amended by Act No. 2835, provides
the following; “The Collector of Internal Revenue * * * may remit
before payment any tax that appears to be unjustly assessed or
excessive.” This provision confers discretion on the Collector of
Internal Revenue in certain cases but not in the instant case. The
twenty-five per cent penalty for non-payment is not “unjustly assessed”
because it is not assessed at all, and is not “excessive” because it is
merely the amount specifically fixed by the law. The Collector of
Internal Revenue simply collects that which the law has said that he
must collect. He is not authorized to refund taxes as a matter of
gratuity.

It may possibly be, as intimated by Judge Cooley
in his standard treatise on Taxation, volume 2, page 901, that “there
might be excuses for non-payment which would justify the interference
of the courts.” The maxim is: Impossibilium nulla obligatio est.
There is no obligation to do impossible things. But here, there is no
allegation in the complaint that the inability of the Chinese to pay
their taxes on time was due to any order by the Government or to any
action taken by the Government, and no allegation that the delay in
payment was caused by the fault of him to whom it was to be paid. On
the contrary, the averment in the complaint is that the Chinese closed
their homes and stores and stayed therein “as a result of a mutual
agreement had thereon.”

The demurrer is sustained, and
unless the petitioner shall within a period of five days so amend his
complaint as to state a cause of action, it shall be dismissed with
costs against him. So ordered.

Villamor, Ostrand, Johns, and Romualdez, JJ., concur.

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CONCURRING

JOHNSON, ACTING CHIEF JUSTICE:

I
agree that the writ of mandamus should not issue in the present case. I
am of the opinion, however, in the interest of justice, that the
discretion conferred upon the respondent should have been exercised in
favor of the petitioner. It is clear to my mind that, by reason of the
existence of a riot in the City of Manila at the time the taxes became
due and payable, it was impossible for the petitioner to have left his
house or place of business. It was not his fault. He did all he could
to pay his taxes when due, and should not have been penalized for
things which he could not prevent. The respondent had a discretion to
grant relief to the petitioner and should have done so as a matter of
simple justice.