ManilaSECOND
DIVISION
FERDINAND
R.
MARCOS
II,
Petitioner,
G.
R.
No. 120880
June
5,
1997
-versus-
COURT
OF APPEALS,
THE COMMISSIONER
OF THE BUREAU OF
INTERNAL REVENUE
and HERMINIA D.
DE GUZMAN,
Respondents.
D
E C I S I
O N
TORRES,
JR., J.:
In this petition for review
on certiorari, government action is once again assailed as precipitate
and unfair, suffering the basic and oftly implored requisites of due
process
of law. Specifically, the petition assails the Decision[1]
of the Court of Appeals dated November 29, 1994 in CA-G. R. SP No.
31363,
where the said court held:
"In view of all the
foregoing, we rule that the deficiency income tax assessments and
estate
tax assessment, are already final and [u]nappealable-and-the subsequent
levy of real properties is a tax remedy resorted to by the government,
sanctioned by Sections 213 and 218 of the National Internal Revenue
Code.
This summary tax remedy is distinct and separate from the other tax
remedies
[such as Judicial Civil actions and Criminal actions], and is not
affected
or precluded by the pendency of any other tax remedies instituted by
the
government.
"WHEREFORE,
premises
considered, judgment is hereby rendered DISMISSING the petition for
certiorari
with prayer for Restraining Order and Injunction. No pronouncements as
to costs.
"SO ORDERED."
More than seven years since
the demise of the late Ferdinand E. Marcos, the former President of the
Republic of the Philippines, the matter of the settlement of his
estate,
and its dues to the government in estate taxes, are still unresolved,
the
latter issue being now before this Court for resolution. Specifically,
petitioner Ferdinand R. Marcos II, the eldest son of the decedent,
questions
the actuations of the respondent Commissioner of Internal Revenue in
assessing,
and collecting through the summary remedy of Levy on Real Properties,
estate
and income tax delinquencies upon the estate and properties of his
father,
despite the pendency of the proceedings on probate of the will of the
late
president, which is docketed as Sp. Proc. No. 10279 in the Regional
Trial
Court of Pasig, Branch 156.
Petitioner had filed
with the respondent Court of Appeals a petition for certiorari and
prohibition
with an application for writ of preliminary injunction and/or temporary
restraining order on June 28, 1993, seeking to:
I.chanrobles virtual law libraryAnnul and
set
aside the Notices of Levy on real property dated February 22, 1993 and
May 20, 1993, issued by respondent Commissioner of Internal Revenue;II.chanrobles virtual law libraryAnnul and
set
aside the Notices of Sale dated May 26, 1993;III.chanrobles virtual law libraryEnjoin the
Head
Revenue Executive Assistant Director II [Collection Service], from
proceeding
with the Auction of the real properties covered by Notices of Sale.chanrobles virtual law library
After the parties had pleaded
their case, the Court of Appeals rendered its Decision[2]
on November 29, 1994, ruling that the deficiency assessments for estate
and income tax made upon the petitioner and the estate of the deceased
President Marcos have already become final and unappealable, and may
thus
be enforced by the summary remedy of levying upon the properties of the
late President, as was done by the respondent Commissioner of Internal
Revenue.
"WHEREFORE, premises
considered judgment is hereby rendered DISMISSING the petition for
Certiorari
with prayer for Restraining Order and Injunction. No
pronouncements
as to cost.
"SO ORDERED."
Unperturbed, petitioner
is now before us assailing the validity of the appellate court's
decision,
assigning the following as errors:
A.chanrobles virtual law libraryRESPONDENT COURT
MANIFESTLY
ERRED IN RULING THAT THE SUMMARY TAX REMEDIES RESORTED TO BY THE
GOVERNMENT
ARE NOT AFFECTED AND PRECLUDED BY THE PENDENCY OF THE SPECIAL
PROCEEDING
FOR THE ALLOWANCE OF THE LATE PRESIDENT'S ALLEGED WILL. TO THE
CONTRARY,
THIS PROBATE PROCEEDING PRECISELY PLACED ALL PROPERTIES WHICH FORM PART
OF THE LATE PRESIDENT'S ESTATE IN CUSTODIA LEGIS OF THE PROBATE COURT
TO
THE EXCLUSION OF ALL OTHER COURTS AND ADMINISTRATIVE AGENCIES.chanrobles virtual law library
B.chanrobles virtual law library
RESPONDENT
COURT
ARBITRARILY ERRED IN SWEEPINGLY DECIDING THAT SINCE THE TAX ASSESSMENTS
OF PETITIONER AND HIS PARENTS HAD ALREADY BECOME FINAL AND
UNAPPEALABLE,
THERE WAS NO NEED TO GO INTO THE MERITS OF THE GROUNDS CITED IN THE
PETITION.
INDEPENDENT OF WHETHER THE TAX ASSESSMENTS HAD ALREADY BECOME FINAL,
HOWEVER,
PETITIONER HAS THE RIGHT TO QUESTION THE UNLAWFUL MANNER AND METHOD IN
WHICH TAX COLLECTION IS SOUGHT TO BE ENFORCED BY RESPONDENTS
COMMISSIONER
AND DE GUZMAN. THUS, RESPONDENT COURT SHOULD HAVE FAVORABLY CONSIDERED
THE MERITS OF THE FOLLOWING GROUNDS IN THE PETITION:
[1] The Notices
of Levy on Real Property were issued beyond the period provided in the
Revenue Memorandum Circular No. 38-68.chanrobles virtual law library
[2] [a] The
numerous
pending court cases questioning the late President's ownership or
interests
in several properties (both personal and real) make the total value of
his estate, and the consequent estate tax due, incapable of exact
pecuniary
determination at this time. Thus, respondents' assessment of the estate
tax and their issuance of the Notices of Levy and Sale are premature,
confiscatory
and oppressive.chanrobles virtual law library
[b]
Petitioner, as
one of the late President's compulsory heirs, was never notified, much
less served with copies of the Notices of Levy, contrary to the mandate
of Section 213 of the NIRC. As such, petitioner was never given an
opportunity
to contest the Notices in violation of his right to due process of law.chanrobles virtual law library
C.chanrobles virtual law library
ON ACCOUNT OF
THE
CLEAR MERIT OF THE PETITION, RESPONDENT COURT MANIFESTLY ERRED IN
RULING
THAT IT HAD NO POWER TO GRANT INJUNCTIVE RELIEF TO PETITIONER. SECTION
219 OF THE NIRC NOTWITHSTANDING, COURTS POSSESS THE POWER TO ISSUE A
WRIT
OF PRELIMINARY INJUNCTION TO RESTRAIN RESPONDENTS COMMISSIONER'S AND DE
GUZMAN'S ARBITRARY METHOD OF COLLECTING THE ALLEGED DEFICIENCY ESTATE
AND
INCOME TAXES BY MEANS OF LEVY.chanrobles virtual law library
The facts as found by the
appellate court are undisputed, and are hereby adopted:
On September 29, 1989,
former President Ferdinand Marcos died in Honolulu, Hawaii, USA.
On June 27, 1990, a Special Tax Audit Team was created to conduct
investigations
and examinations of the tax liabilities and obligations of the late
president,
as well as that of his family, associates and "cronies". Said audit
team
concluded its investigation with a Memorandum dated July 26, 1991. The
investigation disclosed that the Marcoses failed to file a written
notice
of the death of the decedent, an estate tax returns (sic),
as well as several income tax returns covering the years 1982 to
1986,
all in violation of the National Internal Revenue Code (NIRC).cralaw:red
Subsequently, criminal
charges were filed against Mrs. Imelda R. Marcos before the Regional
Trial
of Quezon City for violations of Sections 82, 83 and 84 (as penalized
under
Sections 253 and 254 in relation to Section 252 a and b) of the
National
Internal Revenue Code (NIRC). The Commissioner of Internal
Revenue
thereby caused the preparation and filing of the Estate Tax Return for
the estate of the late president, the Income Tax Returns of the Spouses
Marcos for the years 1985 to 1986, and the Income Tax Returns of
petitioner
Ferdinand "Bongbong" Marcos II for the years 1982 to 1985.cralaw:red
On July 26, 1991, the
BIR issued the following: (1) Deficiency estate tax assessment no.
FAC-2-89-91-002464
[against the estate of the late president Ferdinand Marcos in the
amount
of P23,293,607,638.00 Pesos]; (2) Deficiency income tax assessment no.
FAC-1-85-91-002452 and Deficiency income tax assessment no.
FAC-1-86-91-002451
[against the Spouses Ferdinand and Imelda Marcos in the amounts of
P149,551.70
and P184,009,737.40 representing deficiency income tax for the years
1985
and 1986]; (3) Deficiency income tax assessment nos. FAC-1-82-91-002460
to FAC-1-85-91-002463 [against petitioner Ferdinand "Bongbong" Marcos
II
in the amounts of P258.70 pesos; P9,386.40 Pesos; P4,388.30 Pesos; and
P6,376.60 Pesos representing his deficiency income taxes for the years
1982 to 1985].cralaw:red
The Commissioner of
Internal Revenue avers that copies of the deficiency estate and income
tax assessments were all personally and constructively served on August
26, 1991 and September 12, 1991 upon Mrs. Imelda Marcos (through her
caretaker
Mr. Martinez) at her last known address at No. 204 Ortega St., San
Juan,
M.M. (Annexes "D" and "E" of the Petition). Likewise, copies of the
deficiency
tax assessments issued against petitioner Ferdinand "Bongbong" Marcos
II
were also personally and constructively served upon him (through his
caretaker)
on September 12, 1991, at his last known address at Don Mariano Marcos
St. corner P. Guevarra St., San Juan, M.M. (Annexes "J" and "J-1" of
the
Petition). Thereafter, Formal Assessment notices were served on October
20, 1992, upon Mrs. Marcos c/o petitioner, at his office, House of
Representatives,
Batasan Pambansa, Quezon City. Moreover, a notice to Taxpayer inviting
Mrs. Marcos (or her duly authorized representative or counsel), to a
conference,
was furnished the counsel of Mrs. Marcos, Dean Antonio Coronel
but
to no avail.cralaw:red
The deficiency tax assessments
were not protested administratively, by Mrs. Marcos and the other heirs
of the late president, within 30 days from service of said
assessments.
On February 22, 1993,
the BIR Commissioner issued twenty-two notices of levy on real property
against certain parcels of land owned by the Marcoses to satisfy
the alleged estate tax and deficiency income taxes of Spouses Marcos.cralaw:red
On May 20, 1993, four
more Notices of Levy on real property were issued for the purpose of
satisfying
the deficiency income taxes.cralaw:red
On May 26, 1993, additional
four (4) notices of Levy on real property were again issued. The
foregoing
tax remedies were resorted to pursuant to Sections 205 and 213 of the
National
Internal Revenue Code [NIRC].cralaw:red
In response to a letter
dated March 12, 1993 sent by Atty. Loreto Ata (counsel of herein
petitioner)
calling the attention of the BIR and requesting that they be duly
notified
of any action taken by the BIR affecting the interest of their client
Ferdinand
"Bongbong" Marcos II, as well as the interest of the late
president
copies of the aforesaid notices were, served on April 7, 1993 and on
June
10, 1993, upon Mrs. Imelda Marcos, the petitioner, and their counsel of
record, "De Borja, Medialdea, Ata, Bello, Guevarra and Serapio Law
Office".cralaw:red
Notices of sale at public
auction were posted on May 26, 1993, at the lobby of the City Hall of
Tacloban
City. The public auction for the sale of the eleven (11) parcels of
land
took place on July 5, 1993. There being no bidder, the lots were
declared
forfeited in favor of the government.cralaw:red
On June 25, 1993, petitioner
Ferdinand "Bongbong" Marcos II filed the instant petition for
certiorari
and prohibition under Rule 65 of the Rules of Court, with prayer for
temporary
restraining order and/or writ of preliminary injunction.cralaw:red
It has been repeatedly
observed, and not without merit, that the enforcement of tax laws and
the
collection of taxes, is of paramount importance for the sustenance of
government.
Taxes are the lifeblood of the government and should be collected
without
unnecessary hindrance. However, such collection should be made in
accordance
with law as any arbitrariness will negate the very reason for
government
itself. It is therefore necessary to reconcile the apparently
conflicting
interests of the authorities and the taxpayers so that the real purpose
of taxation, which is the promotion of the common good, may be
achieved.[3]
Whether or not the proper
avenues of assessment and collection of the said tax obligations were
taken
by the respondent Bureau is now the subject of the Court's inquiry.cralaw:red
Petitioner posits that
notices of levy, notices of sale, and subsequent sale of properties of
the late President Marcos effected by the BIR are null and void for
disregarding
the established procedure for the enforcement of taxes due upon the
estate
of the deceased. The case of Domingo vs. Garlitos[4]
is specifically cited to bolster the argument that "the ordinary
procedure
by which to settle claims of indebtedness against the estate of a
deceased,
person, as in an inheritance [estate] tax, is for the claimant to
present
a claim before the probate court so that said court may order the
administrator
to pay the amount therefor." This remedy is allegedly, exclusive, and
cannot
be effected through any other means.cralaw:red
Petitioner goes further,
submitting that the probate court is not precluded from denying a
request
by the government for the immediate payment of taxes, and should order
the payment of the same only within the period fixed by the probate
court
for the payment of all the debts of the decedent. In this regard,
petitioner
cites the case of Collector of Internal Revenue vs. The Administratrix
of the Estate of Echarri (67 Phil. 502), where it was held that:
The case of Pineda vs.
Court of First Instance of Tayabas and Collector of Internal Revenue
(52
Phil 803), relied upon by the petitioner-appellant is good authority on
the proposition that the court having control over the administration
proceedings
has jurisdiction to entertain the claim presented by the government for
taxes due and to order the administrator to pay the tax should it find
that the assessment was proper, and that the tax was legal, due and
collectible.
And the rule laid down in that case must be understood in relation to
the
case of Collector of Customs vs. Haygood, supra., as to the procedure
to
be followed in a given case by the government to effectuate the
collection
of the tax. Categorically stated, where during the pendency of judicial
administration over the estate of a deceased person a claim for taxes
is
presented by the government, the court has the authority to order
payment
by the administrator; but, in the same way that it has authority to
order
payment or satisfaction, it also has the negative authority to deny the
same. While there are cases where courts are required to perform
certain
duties mandatory and ministerial in character, the function of the
court
in a case of the present character is not one of them; and here, the
court
cannot be an organism endowed with latitude of judgment in one
direction,
and converted into a mere mechanical contrivance in another direction.cralaw:red
On the other hand, it
is argued by the BIR, that the state's authority to collect internal
revenue
taxes is paramount. Thus, the pendency of probate proceedings over the
estate of the deceased does not preclude the assessment and collection,
through summary remedies, of estate taxes over the same. According to
the
respondent, claims for payment of estate and income taxes due and
assessed
after the death of the decedent need not be presented in the form of a
claim against the estate. These can and should be paid immediately. The
probate court is not the government agency to decide whether an estate
is liable for payment of estate of income taxes. Well-settled is the
rule
that the probate court is a court with special and limited jurisdiction.cralaw:red
Concededly, the authority
of the Regional Trial Court, sitting, albeit with limited jurisdiction,
as a probate court over estate of deceased individual, is not a
trifling
thing. The court's jurisdiction, once invoked, and made effective,
cannot
be treated with indifference nor should it be ignored with impunity by
the very parties invoking its authority. In testament to this, it
has been held that it is within the jurisdiction of the probate court
to
approve the sale of properties of a deceased person by his prospective
heirs before final adjudication;[5]
to determine who are the heirs of the decedent;[6]
the recognition of a natural child;[7]
the status of a woman claiming to be the legal wife of the decedent;[8]
the legality of disinheritance of an heir by the testator;[9]
and to pass upon the validity of a waiver of hereditary rights.[10]
The pivotal question
the court is tasked to resolve refers to the authority of the Bureau of
Internal Revenue to collect by the summary remedy of levying upon, and
sale of real properties of the decedent, estate tax deficiencies,
without
the cognition and authority of the court sitting in probate over the
supposed
will of the deceased. The nature of the process of estate tax
collection
has been described as follows:
Strictly speaking, the
assessment of an inheritance tax does not directly involve the
administration
of a decedent's estate, although it may be viewed as an incident to the
complete settlement of an estate, and, under some statutes, it is made
the duty of the probate court to make the amount of the inheritance tax
a part of the final decree of distribution of the estate. It is not
against
the property of decedent, nor is it a claim against the estate as such,
but it is against the interest or property right which the heir,
legatee,
devisee, etc., has in the property formerly held by decedent. Further,
under some statutes, it has been held that it is not a suit or
controversy
between the parties, nor is it an adversary proceeding between the
state
and the person who owes the tax on the inheritance. However, under
other
statutes it has been held that the hearing and determination of the
cash
value of the assets and the determination of the tax are adversary
proceedings.
The proceeding has been held to be necessarily a proceeding in rem.[11]
In the Philippine experience,
the enforcement and collection of estate tax, is executive in
character,
as the legislature has seen it fit to ascribe this task to the Bureau
of
Internal Revenue. Section 3 of the National Internal Revenue Code
attests
to this:
"Sec. 3. Powers
and duties of the Bureau. The powers and duties of the Bureau
of Internal Revenue shall comprehend the assessment and collection of
all
national internal revenue taxes, fees, and charges, and the enforcement
of all forfeitures, penalties, and fines connected therewith, including
the execution of judgments in all cases decided in its favor by the
Court
of Tax Appeals and the ordinary courts. Said Bureau shall also give
effect
to and administer the supervisory and police power conferred to it by
this
Code or other laws."
Thus, it was in Vera vs.
Fernandez[12]
that the court recognized the liberal treatment of claims for taxes
charged
against the estate of the decedent. Such taxes, we said, were exempted
from the application of the statute of non-claims, and this is
justified
by the necessity of government funding, immortalized in the maxim that
taxes are the lifeblood of the government. Vectigalia nervi sunt
rei
publicae. Taxes are the sinews of the state.
Taxes assessed against
the estate of a deceased person, after administration is opened, need
not
be submitted to the committee on claims in the ordinary course of
administration.
In the exercise of its control over the administrator, the court may
direct
the payment of such taxes upon motion showing that the taxes have been
assessed against the estate.cralaw:red
Such liberal treatment
of internal revenue taxes in the probate proceedings extends so far,
even
to allowing the enforcement of tax obligations against the heirs of the
decedent, even after distribution of the estate's properties.cralaw:red
Claims for taxes, whether
assessed before or after the death of the deceased, can be collected
from
the heirs even after the distribution of the properties of the
decedent.
They are exempted from the application of the statute of non-claims.
The
heirs shall be liable therefor, in proportion to their share in the
inheritance.[13]
Thus, the Government
has two ways of collecting the taxes in question. One, by going after
all
the heirs and collecting from each one of them the amount of the tax
proportionate
to the inheritance received. Another remedy, pursuant to the lien
created
by Section 315 of the Tax Code upon all property and rights to property
belong to the taxpayer for unpaid income tax, is by subjecting said
property
of the estate which is in the hands of an heir or transferee to the
payment
of the tax due the estate. [Commissioner of Internal Revenue vs.
Pineda,
21 SCRA 105, September 15, 1967]
From the foregoing,
it is discernible that the approval of the court, sitting in probate,
or
as a settlement tribunal over the deceased is not a mandatory
requirement
in the collection of estate taxes. It cannot therefore be argued that
the
Tax Bureau erred in proceeding with the levying and sale of the
properties
allegedly owned by the late President, on the ground that it was
required
to seek first the probate court's sanction. There is nothing in the Tax
Code, and in the pertinent remedial laws that implies the necessity of
the probate or estate settlement court's approval of the state's claim
for estate taxes, before the same can be enforced and collected.cralaw:red
On the contrary, under
Section 87 of the NIRC, it is the probate or settlement court which is
bidden not to authorize the executor or judicial administrator of the
decedent's
estate to deliver any distributive share to any party interested in the
estate, unless it is shown a Certification by the Commissioner of
Internal
Revenue that the estate taxes have been paid. This provision disproves
the petitioner's contention that it is the probate court which approves
the assessment and collection of the estate tax.cralaw:red
If there is any issue
as to the validity of the BIR's decision to assess the estate taxes,
this
should have been pursued through the proper administrative and judicial
avenues provided for by law.
Section 229 of the
NIRC tells us how:
"Sec. 229. Protesting
of assessment. When the Commissioner of Internal Revenue or
his
duly authorized representative finds that proper taxes should be
assessed,
he shall first notify the taxpayer of his findings. Within a period to
be prescribed by implementing regulations, the taxpayer shall be
required
to respond to said notice. If the taxpayer fails to respond, the
Commissioner
shall issue an assessment based on his findings.
"Such assessment may
be protested administratively by filing a request for reconsideration
or
reinvestigation in such form and manner as may be prescribed by
implementing
regulations within (30) days from receipt of the assessment; otherwise,
the assessment shall become final and unappealable.
"If the protest is
denied in whole or in part, the individual, association or corporation
adversely affected by the decision on the protest may appeal to the
Court
of Tax Appeals within thirty (30) days from receipt of said decision;
otherwise,
the decision shall become final, executory and demandable."(As inserted by P.D. 1773)
Apart from failing to file
the required estate tax return within the time required for the filing
of the same, petitioner, and the other heirs never questioned the
assessments
served upon them, allowing the same to lapse into finality, and
prompting
the BIR to collect the said taxes by levying upon the properties left
by
President Marcos. Petitioner submits, however, that "while
the assessment of taxes may have been validly undertaken by the
Government,
collection thereof may have been done in violation of the law. Thus,
the
manner and method in which the latter is enforced may be questioned
separately,
and irrespective of the finality of the former, because the Government
does not have the unbridled discretion to enforce collection without
regard
to the clear provision of law."[14]
Petitioner specifically
points out that applying Memorandum Circular No. 38-68, implementing
Sections
318 and 324 of the old tax code [Republic Act 5203], the BIR's Notices
of Levy on the Marcos properties, were issued beyond the allowed
period,
and are therefore null and void:
xxx the Notices of Levy
on Real Property (Annexes "O" to "NN" of Annex "C" of this Petition) in
satisfaction of said assessments were still issued by respondents well
beyond the period mandated in Revenue Memorandum Circular No. 38-68.
These
Notices of Levy were issued only on 22 February 1993 and 20 May 1993
when
at least seventeen (17) months had already lapsed from the last service
of tax assessment on 12 September 1991. As no notices of distraint of
personal
property were first issued by respondents, the latter should have
complied
with Revenue Memorandum Circular No. 38-68 and issued these Notices of
Levy not earlier than three (3) months nor later than six (6) months
from
12 September 1991. In accordance with the Circular, respondents only
had
until 12 March 1992 (the last day of the sixth month) within which to
issue
these Notices of Levy. The Notices of Levy, having been issued beyond
the
period allowed by law, are thus void and of no effect.[15]
We hold otherwise. The
Notices of Levy upon real property were issued within the prescriptive
period and in accordance with the provisions of the present Tax Code.
The
deficiency tax assessment, having already become final, executory, and
demandable, the same can now be collected through the summary remedy of
distraint or levy pursuant to Section 205 of the NIRC.cralaw:red
The applicable provision
in regard to the prescriptive period for the assessment and collection
of tax deficiency in this instance is Article 223 of the NIRC, which
pertinently
provides:
"Sec. 223. Exceptions
as to a 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 (10) years after the discovery of the falsity,
fraud,
or omission: Provided, That, in a fraud assessment which has become
final
and executory, the fact of fraud shall be judicially taken cognizance
of
in the civil or criminal action for the collection thereof.
"(c) Any internal
revenue
tax which has been assessed within the period of limitation above
prescribed,
may be collected by distraint or levy or by a proceeding in court
within
three years following the assessment of the tax.
The omission to file an
estate tax return, and the subsequent failure to contest or appeal the
assessment made by the BIR is fatal to the petitioner's cause, as under
the above-cited provision, in case of failure to file a return, the tax
may be assessed at any time within ten years after the omission, and
any
tax so assessed may be collected by levy upon real property within
three
years following the assessment of the tax. Since the estate tax
assessment
had become final and unappealable by the petitioner's default as
regards
protesting the validity of the said assessment, there is now no reason
why the BIR cannot continue with the collection of the said tax. Any
objection
against the assessment should have been pursued following the avenue
paved
in Section 229 of the NIRC on protests on assessments of internal
revenue
taxes.
Petitioner further argues
that "the numerous pending court cases questioning the late president's
ownership or interests in several properties (both real and personal)
make
the total value of his estate, and the consequent estate tax due,
incapable
of exact pecuniary determination at this time. Thus, respondents'
assessment
of the estate tax and their issuance of the Notices of Levy and sale
are
premature and oppressive." He points out the pendency of Sandiganbayan
Civil Cases Nos. 0001-0034 and 0141, which were filed by the government
to question the ownership and interests of the late President in real
and
personal properties located within and outside the Philippines.
Petitioner,
however, omits to allege whether the properties levied upon by the BIR
in the collection of estate taxes upon the decedent's estate were among
those involved in the said cases pending in the Sandiganbayan. Indeed,
the court is at a loss as to how these cases are relevant to the matter
at issue. The mere fact that the decedent has pending cases involving
ill-gotten
wealth does not affect the enforcement of tax assessments over the
properties
indubitably included in his estate.cralaw:red
Petitioner also expresses
his reservation as to the propriety of the BIR's total assessment of
P23,292,607,638.00,
stating that this amount deviates from the findings of the Department
of
Justice's Panel of Prosecutors as per its resolution of 20 September
1991.
Allegedly, this is clear evidence of the uncertainty on the part of the
Government as to the total value of the estate of the late President.
This is, to our mind,
the petitioner's last ditch effort to assail the assessment of estate
tax
which had already become final and unappealable.cralaw:red
It is not the Department
of Justice which is the government agency tasked to determine the
amount
of taxes due upon the subject estate, but the Bureau of Internal
Revenue,[16]
whose determinations and assessments are presumed correct and made in
good
faith.[17]
The taxpayer has the duty of proving otherwise. In the absence of proof
of any irregularities in the performance of official duties, an
assessment
will not be disturbed. Even an assessment based on estimates is prima
facie
valid and lawful where it does not appear to have been arrived at
arbitrarily
or capriciously. The burden of proof is upon the complaining party to
show
clearly that the assessment is erroneous. Failure to present proof of
error
in the assessment will justify the judicial affirmance of said
assessment.[18]
In this instance, petitioner has not pointed out one single provision
in
the Memorandum of the Special Audit Team which gave rise to the
questioned
assessment, which bears a trace of falsity. Indeed, the petitioner's
attack
on the assessment bears mainly on the alleged improbable and
unconscionable
amount of the taxes charged. But mere rhetoric cannot supply the basis
for the charge of impropriety of the assessments made.cralaw:red
Moreover, these objections
to the assessments should have been raised, considering the ample
remedies
afforded the taxpayer by the Tax Code, with the Bureau of Internal
Revenue
and the Court of Tax Appeals, as described earlier, and cannot be
raised
now via Petition for Certiorari, under the pretext of grave abuse of
discretion.
The course of action taken by the petitioner reflects his disregard or
even repugnance of the established institutions for governance in the
scheme
of a well-ordered society. The subject tax assessments having become
final,
executory and enforceable, the same can no longer be contested by means
of a disguised protest. In the main, Certiorari may not be used as a
substitute
for a lost appeal or remedy.[19]
This judicial policy becomes more pronounced in view of the absence of
sufficient attack against the actuations of government.cralaw:red
On the matter of sufficiency
of service of Notices of Assessment to the petitioner, we find the
respondent
appellate court's pronouncements sound and resilient to petitioner's
attacks.cralaw:red
Anent grounds 3(b) and
(B) both alleging/claiming lack of notice We find, after
considering
the facts and circumstances, as well as evidences, that there was
sufficient,
constructive and/or actual notice of assessments, levy and sale, sent
to
herein petitioner Ferdinand "Bongbong" Marcos as well as to his mother
Mrs. Imelda Marcos.cralaw:red
Even if we are to rule
out the notices of assessments personally given to the caretaker of
Mrs.
Marcos at the latter's last known address, on August 26, 1991 and
September
12, 1991, as well as the notices of assessment personally given to the
caretaker of petitioner also at his last known address on September 12,
1991 the subsequent notices given thereafter could no longer be
ignored
as they were sent at a time when petitioner was already here in the
Philippines,
and at a place where said notices would surely be called to
petitioner's
attention, and received by responsible persons of sufficient age and
discretion.cralaw:red
Thus, on October 20,
1992, formal assessment notices were served upon Mrs. Marcos c/o the
petitioner,
at his office, House of Representatives, Batasan Pambansa, Q.C.
(Annexes
"A", "A-1", "A-2", "A-3"; pp. 207-210, Comment/Memorandum of OSG).
Moreover,
a notice to taxpayer dated October 8, 1992 inviting Mrs. Marcos to a
conference
relative to her tax liabilities, was furnished the counsel of Mrs.
Marcos,
Dean Antonio Coronel (Annex "B", p. 211, ibid). Thereafter, copies of
Notices
were also served upon Mrs. Imelda Marcos, the petitioner and their
counsel
"De Borja, Medialdea, Ata, Bello, Guevarra and Serapio Law Office", on
April 7, 1993 and June 10, 1993. Despite all of these Notices,
petitioner
never lifted a finger to protest the assessments, [upon which the Levy
and sale of properties were based], nor appealed the same to the Court
of Tax Appeals.cralaw:red
There being sufficient
service of Notices to herein petitioner (and his mother) and it
appearing
that petitioner continuously ignored said Notices despite several
opportunities
given him to file a protest and to thereafter appeal to the Court of
Tax
Appeals, the tax assessments subject of this case, upon which the
levy and sale of properties were based, could no longer be contested
(directly
or indirectly) via this instant petition for certiorari.[20]
Petitioner argues that
all the questioned Notices of Levy, however, must be nullified for
having
been issued without validly serving copies thereof to the petitioner.
As
a mandatory heir of the decedent, petitioner avers that he has an
interest
in the subject estate, and notices of levy upon its properties should
have
been served upon him.cralaw:red
We do not agree. In
the case of notices of levy issued to satisfy the delinquent estate
tax,
the delinquent taxpayer is the Estate of the decedent, and not
necessarily,
and exclusively, the petitioner as heir of the deceased. In the same
vein,
in the matter of income tax delinquency of the late president and his
spouse,
petitioner is not the taxpayer liable. Thus, it follows that service of
notices of levy in satisfaction of these tax delinquencies upon the
petitioner
is not required by law, as under Section 213 of the NIRC, which
pertinently
states:
"xxx
xxx
xxx
"xxx Levy shall be
effected
by writing upon said certificate a description of the property upon
which
levy is made. At the same time, written notice of the levy shall be
mailed
to or served upon the Register of Deeds of the province or city where
the
property is located and upon the delinquent taxpayer, or if he be
absent
from the Philippines, to his agent or the manager of the business in
respect
to which the liability arose, or if there be none, to the occupant of
the
property in question.
"xxx
xxx
xxx"
The foregoing notwithstanding,
the record shows that notices of warrants of distraint and levy of sale
were furnished the counsel of petitioner on April 7, 1993, and June 10,
1993, and the petitioner himself on April 12, 1993 at his office at the
Batasang Pambansa.[21]
We cannot therefore, countenance petitioner's insistence that he was
denied
due process. Where there was an opportunity to raise objections to
government
action, and such opportunity was disregarded, for no justifiable
reason,
the party claiming oppression then becomes the oppressor of the orderly
functions of government. He who comes to court must come with clean
hands.
Otherwise, he not only taints his name, but ridicules the very
structure
of established authority.
IN VIEW WHEREOF, the
Court RESOLVED to DENY the present petition. The Decision of the Court
of Appeals dated November 29, 1994 is hereby AFFIRMED in all respects.cralaw:red
SO ORDERED.cralaw:red
Regalado, Romero, Puno
and Mendoza, JJ., concur.
________________________________
Endnotes
[1]
Penned by Associate Justice Asaali S. Isnani, Chairman; Justices Corona
Ibay Somera and Celia Lipana Reyes, concurring.
[2]
Annex "A", Petition, p. 80, Rollo.
[3]
Commissioner of Internal Revenue vs. Algue, Inc., et. al., G.R. No.
L-28896,
February 17, 1988, 158 SCRA 9.
[4]
G.R. No. L-18994, June 29, 8 SCRA 443.
[5]
Acebedo vs. Abesamis, G.R. No. 102380, 18 January 1993, 217 SCRA 186.
[6]
Reyes vs. Ysip, G.R. No. 7516, May 12, 1955, 97 Phil 11.
[7]
Gaas vs. Fortich, G.R. No. 3154, Dec. 28, 1929, 54 Phil 196.
[8]
Torres vs. Javier, May 24, 1916 34 Phil 382.
[9]
Pecson vs. Mediavillo, G.R. No. 7890, September 29, 1914, 28 Phil 81.
[10]
Borromeo-Herrera vs. Borromeo, et. al., L-41171, July 23, 1982.
[11]
85 C.J.S. No. 1191, pp. 1056-1057.
[12]
No. L-31364, March 30, 1979, 89 SCRA 199.
[13]
Pineda vs. Court of First Instance of Tayabas, G.R. No. 30921, February
16, 1929, 52 Phil 805; Government vs. Pamintuan, G.R. No. 33139,
October
11, 1930, 55 Phil 13.
[14]
Petition, p. 50, Rollo.
[15]
Ibid., pp. 57-58.
[16]Section 16, National Internal Revenue Code.
[17]
Interprovincial Autobus Co., Inc. vs. Collector of Internal Revenue,
G.R.
No. 6741, January 31, 1956, 98 Phil 290; CIR vs. Construction Resources
Asia, Inc., G.R. No. 98230, November 25, 1986, 145 SCRA 671; Sy Po vs.
Court of Tax Appeals, et. al., G.R. No. L-81446, August 18, 1988, 164
SCRA
524; CIR vs. Bohol Land Transportation Co., 58 O.G. 2407 [1960].
[18]
Gutierrez vs. Villegas, G.R. No. L-17117, July 31, 1963, 8 SCRA 527.
[19]
De la Paz vs. Panis, G.R. No. 57023, June 22, 1995, 245 SCRA 242
[20]
Court of Appeals Decision, pp. 12-13, Rollo.
[21]
Affidavit of Service by the Revenue Officer of the Collection and
Enforcement
Division of the BIR, Annex "D", Comment/Memorandum of the Commissioner
of Internal Revenue in the Court of Appeals. |