Cases for CTA Jurisdiction

Ursal vs. CA Ursal as City Assessor of Cebu assess for taxation certain real properties of Noel and Samson, and upon protest the Cebu Board of Assessment Appeals reduced the assessments. Ursal took the matter to CTA insisting on his valuation but was dismissed saying that it was late and that the assessor had no personality to bring the matter before it. CTA properly denied the appeal of Ursal. First, Ursal as assessor had no personality to resort to the CTA. The rulings of the Board of Assessment Appeals did not "adversely affect" him or his office. The CTA was not created to decide mere conflicts of opinion between administrative officers or agencies. Second, Republic Act No. 1125 creating the CTA did not grant it blanket authority to decide any and all tax disputes. The Act necessarily limited its authority to those matters enumerated therein. Republic Act No. 1125 is a complete law by itself and expressly enumerates the matters which the CTA may consider which is presumably to act only on protests of private persons adversely affected by the tax, custom, or assessment. CIR vs. Villa Villa and his wife filed joint income tax returns. The BIR determined assessments for deficiency income tax and residence tax. Without contesting the said assessments in the BIR, he filed a petition for review in the CTA. Initially, CTA took cognizance of the appeal and tried the case in its merits. In this case, parties submit voluntarily to the jurisdiction of CTA. At no stage of the proceedings have they raised the issue of jurisdiction. The law conferring jurisdiction on CTA is Sec. 7 of RA 1125 which states that CTA has exclusive appellate jurisdiction Decisions of the CIR in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties imposed in relation thereto, or other matters arising under NIRC. The word "decisions" has been interpreted to mean the decisions of the CIR on the protest of the taxpayer against the assessments. Definitely, said word does not signify the assessment itself. Where a taxpayer questions an assessment and asks the Collector to reconsider or cancel the same because the taxpayer believes he is not liable, the assessment becomes a "disputed assessment" that the Collector must decide, and the taxpayer can appeal to the Court of Tax Appeals only upon receipt of the decision of the Collector on the disputed assessment. Since in the instant case the taxpayer appealed the assessment of the CIR without previously contesting the same, the appeal was premature and the CTA had no jurisdiction to entertain said appeal.. As such, it can take cognizance only of such matters as are clearly within its jurisdiction.

Philippine Refining Co. vs. CA Petitioner was assessed by CIR to pay deficiency tax for 1985 amounting to P1.8M. Petitioner protested the assessment on ground that it was based on erroneous allowances of bad debts and interest expense although both are allowable deductions. CIR denied the protest by it subsequent issuance of a warrant of garnishment. Petitioner filed a petition for review with CTA on the same assignment of error. CTA reduced the deficiency income tax assessment to P237K. The Court ruled that no explanation was offered by petitionerwhy the unpaid account of several of its debtor was written of as bad debt. The worthlessness of the debts involved are sought to be established by the mere self-serving testimony of its financial consultant. The contentions of PRC that nobody is in a better position to determine when an obligation becomes a bad debt than the creditor itself, and that its judgment should not be substituted by that of respondent court as it is PRC which has the facilities in ascertaining the collectibility or uncollectibility of these debts, are presumptuous and uncalled for. The Court of Tax Appeals is a highly specialized body specifically created for the purpose of reviewing tax cases. Through its expertise, it is undeniably competent to determine the issue of whether or not the debt is deductible through the evidence presented before it. Because of this recognized expertise, the findings of the CTA will not ordinarily be reviewed absent a showing of gross error or abuse on its part. The findings of fact of the CTA are binding on this Court in the absence of strong reasons for this Court to delve into facts.

PLDT vs. City of Davao PLDT paid a franchise tax, which was paid in lieu of all taxes on this franchise or earnings thereof pursuant to RA 7082. The exemption from all taxes on this franchise or earnings thereof was subsequently withdrawn by RA 7160 (LGC), which gave local government units the power to tax businesses enjoying a franchise on the basis of income received or earned by them within their territorial jurisdiction. The City of Davao enacted Ordinance No. 519 which provides that notwithstanding any exemption granted by law or other special laws, there is hereby imposed a tax on businesses enjoying a franchise, a rate of seventy-five percent (75%) of one percent (1%) of the gross annual receipts for the preceding calendar year based on the income receipts realized within the territorial jurisdiction of Davao City. Subsequently, RA 7925 was enacted. Sec. 23 of which provides that any advantage, favor, privilege, exemption, or immunity granted under existing franchises, or may hereafter be granted, shall ipso facto become part of previously granted telecommunications franchises and shall be accorded immediately

and unconditionally to the grantees of such franchises. PLDT claimed exemption from payment of franchise tax on the basis of opinion of the Bureau of Local Government Finance (BLGF)that petitioner is exempt from payment of franchise and business taxes imposable by local government units upon the effectivity of Republic Act No. 7925 The ruling of the BLGF has been considered in this case. But unlike the Court of Tax Appeals, which is a special court created for the purpose of reviewing tax cases, the BLGF was created merely to provide consultative services and technical assistance to local governments and the general public on local taxation and other related matters. Thus, the rule that the "Court will not set aside conclusions rendered by the CTA, which is, by the very nature of its function, dedicated exclusively to the study and consideration of tax problems and has necessarily developed an expertise on the subject, unless there has been an abuse or improvident exercise of authority" cannot apply in the case of BLGF. Allied Banking vs. CIR Allied Bank received from the CIR a PAN of deficiency DST in the amount of around P12M. Allied protested and thereafter received a Formal Letter of Demand with Assessment Notices. Allied filed within 30 days from the receipt of the Formal Letter of Demand a petition for review in the CTA. It was dismissed because the CTA ratiocinated that it is neither the assessment nor the formal demand letter itself that is appealable to the CTA. It is the decision of the CIR on the disputed assessment that can be appealed to the CTA. CTA says administrative is necessary first. The case is an exception to the exhaustion of administrative remedies, by way of estoppel from the part of BIR. It appears from the foregoing demand letter that the CIR has already made a final decision on the matter and that the remedy of petitioner is to appeal the final decision within 30 days. Allied cannot be faulted for relying on the Formal Letter of Demand since the language used and the tenor of the demand letter indicate that it is the final decision of the respondent on the matter.The Formal Letter of Demand which was not administratively protested by the petitioner can be considered a final decision of the CIR appealable to the CTA because the words used, specifically the words "final decision" and "appeal", taken together led petitioner to believe that the Formal Letter of Demand with Assessment Notices was in fact the final decision of the CIR on the letter-protest it filed and that the available remedy was to appeal the same to the CTA. CIR vs. Leal CIR issued RMO 15-91 imposing 5% lending investors tax on pawnshops based on their gross income and requiring all investigating units of BIR to assess the lending investors tax due them., pursuant to Sec 116 of the NIRC. Subsequently, CIR issued RMC 43-91 subjecting the pawn ticket to DST. Affected, respondents, owner of Josefinas

pawnshops, asked for a reconsideration of the RMO and RMC but was denied with finality by CIR. Thus, respondent filed with RTC a petition for prohibition against CIR from implementing the revenue orders. CIR filed a motion to dismiss but was denied by the RTC. While the CA correctly took cognizance of the petition for certiorari, however, the jurisdiction to review the rulings of the CIR pertains to the CTA, not to the RTC.The questioned RMO No. 1591 and RMC No. 43-91 are actually rulings or opinions of the Commissioner implementing the Tax Code on the taxability of pawnshops. Such revenue orders were issued pursuant to CIRs powers the Tax Code. As such, it comes within the purview of Republic Act No. 1125, Section 7 of which provides that the Court of Tax Appeals shall exercise exclusive appellate jurisdiction to review by appeal x x x decisions of the Collector of Internal Revenue in x x x matters arising under the National Internal Revenue Code or other law or part of the law administered by the Bureau of Internal Revenue.

Philippine Journalists vs. CIR Petitioner filed an annual income tax return for the year 1994 and paid 10M in taxes. In 1995, BIR examined PJs books and found deficiency taxes. In 1997, RDO invited petitioners representative for an informal conference in order for petitioner to object to the proposed assessment. Petitioner executed a Waiver of Statute of Limitation under the NIRC. On December 1998, BIR issued the final assessment on petitioner amounting to 111M. Petitioner contests the assessment mainly because it was made beyond the 3 year period since the taxes became due in the end of the 1994 calendar year. On the other hand, the BIR argues that petitioner executed a waiver of the statute of limitations, giving the BIR more time to assess. The first assigned error relates to the jurisdiction of the CTA over the issues in this case. CA ruled that only decisions of the BIR denying a request for reconsideration or reinvestigation may be appealed to the CTA. Since the petitioner did not file a request for reinvestigation or reconsideration within thirty (30) days, the assessment notices became final and unappealable. The petitioner now argue that the case was brought to the CTA because the warrant of distraint or levy was illegally issued and that no assessment was issued because it was based on an invalid waiver of the statutes of limitations. We agree with petitioner. Section 7 of Republic Act No. 1125, provides that the CTA has jurisdiction over X X X other matters arising under the National Internal Revenue Code or other laws or part of law

administered by the Bureau of Internal Revenue. The appellate jurisdiction of the CTA is not limited to cases CIR on matters relating to assessments or refunds. The second part of the provision covers other cases that arise out of the NIRC or related laws administered by the Bureau of Internal Revenue. The wording of the provision is clear and simple. It gives the CTA the jurisdiction to determine if the warrant of distraint and levy issued by the BIR is valid and to rule if the Waiver of Statute of Limitations was validly effected. Thus, the CTA may act on a petition to invalidate and annul the distraint orders of the CIR or declaring several waivers executed by the taxpayer as null and void, thus invalidating the assessments issued by the BIR. PNOC vs. CA BIR requested PNOC to settle its liability for taxes on the interest earned by its money placements with PNB and which PNB did not withhold. PNOC wrote BIR and made an offer to compromise its tax liability, estimated at P304M against NAPOCORs pending claim for tax refund. CIR accepted the compromise. Private respondent Savellanowas paid the informer's reward in the total amount of P14M, representing 15% of tax collected by the BIR from PNOC and PNB. But private respondent Savellano, demanded from BIR the payment of the balance of his informer's reward and sought reconsideration of CIRs decision to compromise the tax liability of PNOC. While the aforesaid Motion for Reconsideration was still pending with the BIR, private respondent Savellano filed a Petition for Review with the CTA, alleging that CIR acted with grave abuse of discretion in entering into a compromise agreement that resulted in "a gross and unconscionable diminution" of his reward. Private respondent Savellano prayed for the enforcement and collection of the total tax assessment against taxpayer PNOC and/or withholding agent PNB; and the payment to him by CIR of the 15% informer's reward on the total tax collected.The CTA ruled that the compromise agreement between BIR and PNB and PNOC is without force, and ruled that Private respondent be paid the balance of the informers reward. PNB assailed the decision of CTA on ground that the BIR demand letter should be considered as a new assessment against PNB. As a new assessment, it gave rise to a new dispute and controversy solely between the BIR and PNB that should be administratively settled or adjudicated Does CTA have jurisdiction over the case? The demand letter did not constitute a new assessment against PNB.The issuance by the BIR of the demand letter was merely a development in the continuing effort of the BIR to collect the tax assessed against PNOC and PNB way back in 1986. Thedemand letter actually referred to the withholding tax assessment first issued in 1986 and its eventual settlement through a compromise agreement. In addition, the computation of the

deficiency withholding tax was based on the figures from the 1986 assessments against PNOC and PNB. The CTA correctly retained jurisdiction over the case by virtue of Republic Act No. 1125.Having established that the BIR demand letter did not constitute a new assessment, then, there could be no basis for PNB's claim that any dispute arising from the new assessment should only be between BIR and PNB. The CTA, however, correctly sustained its jurisdiction and continued the proceedings; and, in effect, rejected DOJ's claim of jurisdiction to administratively settle or adjudicate BIR's assessment against PNB. In his Petition before the CTA, private respondent Savellano requested a review of the decisions of CIR to enter into a compromise agreement with PNOC and to reject his claim for additional informer's reward. Thus, he submitted questions of law involving interpretation of EO 44 which authorized the BIR Commissioner to compromise delinquent accounts and Sec 316 of NIRC which granted to the informer a reward equivalent to 15% of the actual amount recovered or collected by the BIR. These should undoubtedly be considered as matters arising from the NIRC and other laws being administered by the BIR, thus, appealable to the CTA under Section 7(1) of Rep. Act No. 1125. PNB, however, insists on the jurisdiction of the DOJ over its appeal of the deficiency withholding tax assessment by virtue of P.D. No. 242. However, it is an established rule of statutory construction that between a general law and a special law, the special law prevails. P.D. No. 242 is a general law that deals with administrative settlement or adjudication of disputes, claims and controversies between or among government offices, agencies and instrumentalities, including government-owned or controlled corporations. On the other hand, Rep. Act No. 1125 is a special law dealing with a specific subject matter the creation of the CTA, which shall exercise exclusive appellate jurisdiction over the tax disputes and controversies enumerated therein.

CIR vs. Hambrecht & Quist Respondent informed BIR of its change of business address. Respondent received a letter from BIR demanding payment of alleged deficiency income and expanded withholding taxes for year 1989 which resulted from disallowance of certain items of expense. Respondent protested against the alleged deficiency tax assessment. 8 years later, respondent was informed that its protest was denied on ground that that was filed beyond the 30 day reglamentary period. Respondent filed a petition for review with CTA which held that the assessment was already final and unappelable but CIR failed to collect within

the prescriptive period. Petition assails the jurisdiction of CTA on ground that after the lapse of the 30 day period to protest, respondent may no longer dispute the correctness of the assessment and its appeal to the CTA should be dismissed. The appellate jurisdiction of the CTA is not limited to cases which involve decisions of the CIR on matters relating to assessments or refunds. The second part of the provision covers other cases that arise out of the National Internal Revenue Code (NIRC) or related laws administered by the Bureau of Internal Revenue (BIR).In the case at bar, the issue at hand is whether or not the BIRs right to collect taxes had already prescribed and that is a subject matter falling under Section 223(c) of the 1986 NIRC. Thus, from the foregoing, the issue of prescription of the BIRs right to collect taxes may be considered as covered by the term "other matters" over which the CTA has appellate jurisdiction. This runs counter to petitioners theory that the latter is qualified by the status of the former, i.e., an "other matter" must not be a final and unappealable tax assessment or, alternatively, must be a disputed assessment.The validity of the assessment itself is a separate and distinct issue from the issue of whether the right of the CIR to collect the validly assessed tax has prescribed. This issue of prescription, being a matter provided for by the NIRC, is well within the jurisdiction of the CTA to decide. RCBS vs. CIR Petitioner filed a petition for review with CTA for failure of the CIR to act on its disputed tax assessment. CTA denied the petition because it was not filed within the reglamentary period. RCBC maintained that its former counsels failure to file petition for review with the CTA within the reglamentary period was excusable. If the protest is denied in whole or in part, or is not acted upon within one hundred eighty (180) days from submission of documents, the taxpayer adversely affected by the decision or inaction may appeal to the Court of Tax Appeals within (30) days from receipt of the said decision, or from the lapse of the one hundred eighty (180)-day period; otherwise the decision shall become final, executory and demandable. (If a statutory remedy provides as a condition precedent that the action to enforce it must be commenced within a prescribed time, such requirement is jurisdictional and failure to comply therewith may be raised in a motion to dismiss. In fine, the failure to comply with the 30-day statutory period would bar the appeal and deprive the Court of Tax Appeals of its jurisdiction to entertain and determine the correctness of the assessment.

Petitioner issues customs bonds to its clients in favor of the BOC, which secure the release of imported goods from BOC without prior payment of corresponding customs duties. Petitioner and its client bind themselves to pay the BOC the value of the bonds. Republic, represented by BOC, filed a complaint against petition for collection of money with damages before RTC alleging that petition had outstanding unliquidated customs bonds with BOC which was granted. CA dismissed the appeal filed by petitioner on ground that it has no jurisdiction over the appeal and the same lies with CTA because the case is a tax collection case. Although the original obligation of petitioner arose from non-payment of taxes, the complaint against petitioner is predicated upon the bond executed by them. Thus, respondents right originally arising from law has become a right based upon a written contract, the bond being a contract between Respondent and Petitioner. RA 9282 amended Section 7 of RA 1125 and provided that the CTA shall have Exclusive appellate jurisdiction to review by appeal decisions, orders or resolutions of the Regional Trial Courts in local tax cases originally decided or resolved by them in the exercise of their original or appellate jurisdiction. In the case at bar, the original complaint filed with the trial court was in the nature of a collection case. An action to collect on a bond used to secure the payment of taxes is not a tax collection case, but rather a simple case for enforcement of a contractual liability. Verily, the instant case is not a tax collection case; hence, appellate jurisdiction over the petition properly lies with the CA and not the Court of Tax Appeals. Commissioner of Customs vs. CA The vessel M/V Star Ace coming from Singapore with cargo entered the Port of San Fernando, La Union for repairs, with an appraised value of P200M. The BOC became suspicious that the vessels purpose was really to smuggle its cargo into the country, seizure proceedings were instituted and subsequently, Warrants of Seizure and Detention were issued for the vessel and its cargo Respondent Urbino claimed a preferred maritime lien under a Salvage Agreement. Thus, to protect his claim, Urbino filed a Motion to Dismiss and a Motion to Lift Warrant of Seizure and Detention. In addition, he filed a case for Prohibition, Mandamus and Damages before the RTC to restrain the District Collector of Customs from interfering with his salvage operation. The RTC dismissed the case for lack of jurisdiction because of the pending seizure and detention cases. Case was elevated to CA. Petitioner assails the jurisdiction of the CA. Going back to the seizure and detention proceedings, the decision of the District Collector of Customs was to forfeit the vessel and cargo in favor of the Government. This decision was affirmed by the Commissioner of Customs. Three appeals were then filed with the Court of Tax Appeals (CTA) by different

Philippine British Assurance vs. Republic of the Philippines

parties, excluding Urbino, who claimed an interest in the vessel and cargo. The Court rules in favor of the Commissioner of Customs. First, decision of the RTC, in so far as it relates to the vessel M/V "Star Ace," is void as jurisdiction was never acquired over the vessel since it failed to acquire either actual or constructive possession over it. On the other hand, the BOC acquired jurisdiction over the res ahead and to the exclusion of the RTC. The forfeiture proceedings conducted by the BOC are in the nature of proceedings in rem and jurisdiction was obtained from the moment the vessel entered the SFLU port. The forfeiture proceedings were instituted and the vessel was seized even before the filing of the RTC. As regards the jurisdiction of the CTA, allegations of ownership neither divest the Collector of Customs of such jurisdiction nor confer upon the trial court jurisdiction over the case. Ownership of goods or the legality of its acquisition can be raised as defenses in a seizure proceeding. The actions of the Collectors of Customs are appealable to the Commissioner of Customs, whose decision, in turn, is subject to the exclusive appellate jurisdiction of the CTA. Clearly, issues of ownership over goods in the custody of custom officials are within the power of the CTA to determine.

present their evidence accordingly if they desire the Court to take such evidence into consideration. As cases filed before it are litigated de novo, party litigants should prove every minute aspect of their cases. No evidentiary value can be given the purchase invoices or receipts submitted to the BIR as the rules on documentary evidence require that these documents must be formally offered before the CTA. Hence, it is necessary for the Petitioner to show proof that it had indeed paid the said input taxes during the year 1991. In the case at bar, Petitioner failed to discharge this duty. It did not adduce in evidence the sales invoice, receipts or other documents showing the input value added tax on the purchase of goods and services. Thus, the argument of respondent that the certification of an independent CPA attesting to the correctness of the contents thereof is insufficient as what is required is CTA Circular No. 10-97, requires that the photocopies of invoices, receipts and other documents covering said accounts or payments must be pre-marked by the party and submitted to this Court.

CIR vs. Manila Mining Corp. Respondent is registered with BIR as a VAT registered enterprise. In 1991, its gold sales to BSP amounted to P200M. it filed its VAT returns. However, relying on a letter from BIR Deputy Commissioner that gold sold to BSP is considered an export sale and therefore zero-rated, it filed an application for tax refund. As CIR filed to act o the application within 60 days from filing, it filed a Petition for Review against the CIR before the CTA seeking the issuance of a tax credit certificate covering its input VAT payments for taxable year of 1991. CIR however assails the veracity of the amounts in respondents VAT returns and application. CTA denied respondents claim for refund for failure to prove that it paid the amounts as such as no sales invoice, receipts or other documents were presented. It pronounced that a mere listing of VAT invoices and receipts, without being offered and actually verified by the CTA cannot prove the truthfulness of the contents of the invoices. For a judicial claim for refund to prosper, respondent must not only prove that it is a VAT registered entity and that it filed its claims within the prescriptive period, but also must substantiate the input VAT paid by purchase invoices or official receipts which respondent failed to do. Section 8 of Republic Act 1125 provides that the CTA shall be a court of record and as such it is required to conduct a formal trial (trial de novo) where the parties must

While the CTA is not governed strictly by technical rules of evidence, as rules of procedure are not ends in themselves but are primarily intended as tools in the administration of justice, the presentation of the purchase receipts and/or invoices is not mere procedural technicality which may be disregarded considering that it is the only means by which the CTA may ascertain and verify the truth of respondents claims.

City of Manila vs. Coca-Cola Bottlers Prior to Feb 25, 2000, Respondent Coke had been paying City of Manila local business tax under Sec 14 of Tax Ordinance 7794 (Tax on manufacturers and assemblers), being exempted from payment of tax under Sec 21 (Tax on Businesses subject to Excise, VAT or percentage Tax). It was later amended, making respondent liable to pay local business tax both under Sec 14 and Sec 21. City of Manila assessed respondents of P18.6M tax deficiency which Coke protested contending double taxation. Petitioner did not respond to the protest. Thus, respondent filed with RTC an action for cancellation of the assessment against respondent for business taxes. Petition was granted in compliance with an earlier decision declaring the amendments null and void. Petitioner filed with CTA 2 Motions for Extension of Time to File Petition for Review, praying for a 15-day extension and an additional 10-day extension within which to file their petition. Upon filing their Petition for Review, the same was dismissed by CTA First Division for being filed out of time. CTA en banc affirmed. The period to appeal the decision or ruling of the RTC to the CTA via a Petition for Review is specifically governed by Section 11 of Republic Act No. 9282 and

Section 3(a), Rule 8 of the Revised Rules of the CTA. The afore-quoted provisions provide that to appeal an adverse decision or ruling of the RTC to the CTA, the taxpayer must file a Petition for Review with the CTA within 30 days from receipt of said adverse decision or ruling of the RTC. However, Section 11 of Republic Act No. 9282 does state that the Petition for Review shall be filed with the CTA following the procedure analogous to Rule 42 of the Revised Rules of Civil Procedure. Section 1, Rule 42[16] of the Revised Rules of Civil Procedure provides that the Petition for Review of an adverse judgment or final order of the RTC must be filed with the Court of Appeals within: (1) the original 15-day period from receipt of the judgment or final order to be appealed; (2) an extended period of 15 days from the lapse of the original period; and (3) only for the most compelling reasons, another extended period not to exceed 15 days from the lapse of the first extended period. Following by analogy Section 1, Rule 42 of the Revised Rules of Civil Procedure, the 30day original period for filing a Petition for Review with the CTA under Section 11 of Republic Act No. 9282, as implemented by Section 3(a), Rule 8 of the Revised Rules of the CTA, may be extended for a period of 15 days. No further extension shall be allowed thereafter, except only for the most compelling reasons, in which case the extended period shall not exceed 15 days. In this case, the CTA First Division erred in finding that petitioners failed to file their Petition for Review in CTA within the reglementary period. Commission of Customs vs. Gelmart Industries Respondent is engaged in the manufacturing of embroidery and apparel products for export. Subsequently, it received consignment of various imported textile materials from its supplier to be manufactured into finished products for subsequent exportation. Petitioner issued a Memorandum requiring the 100% examination of all shipments consigned to respondent on its release from the piers. Thereafter petitioner conducted an ocular inspection of the warehouse Bonded Manufacturing Warehouse of petitioner, during which it was discovered that it was operating the Bra and Lace Division as well as the Auxiliary Division and no other lines of products. Subsequently, respondent received from one of its principals for the imported articles from Hong Kong of its intention to cancel the order and instructed respondent to return the shipment of raw materials back to it. Respondent, thus requested petitioner for authority to effect the reshipment. However, BOC issued seizure orders for alleged violation of the Tariff and Customs Code on ground that respondent misdeclared their shipments. Respondent filed a Memorandum of Appeal with Commissioner of Customs which affirmed the forfeiture orders issued by the Collector of Customs. However, CTA reversed

the decree of forfeiture issued by petitioner and ordered the release of respondents importation. Petitioner is denied for being procedurally infirm. Petitioners failure to file a motion for reconsideration of the assailed decision of the CTA First Division, or at least a petition for review with the CTA en banc, invoking the latters exclusive appellate jurisdiction to review decisions of the CTA divisions, rendered the assailed decision final and executory. Necessarily, all the arguments professed by petitioner on the validity of the seizure, detention and ultimate forfeiture of the subject shipments have been foreclosed Petitioner had indeed committed procedural missteps on his way to this Court. First, it failed to file a Motion for Reconsideration or New Trial before the CTA Division within 15 days from receipt of the decision before going to the CTA en banc. Second, Sec 11 of RA 9282 provides that a party adversely affected by a resolution of a CTA Division may on a motion for reconsideration or new trial file a petition for review with the CTA en banc. In turn, A party adversely affected by a decision or ruling of the CTA en banc may file with the SC a verified petition for review on certiorari pursuant to Rule 45 of the 1997 Rules of Civil Procedure as ordained under Sec. 12 of R.A. No. 9282. This petitioner failed to comply with. Third. Sec. 2, Rule 4 of the Revised Rules of the Court of Tax Appeals reiterates the exclusive appellate jurisdiction of the CTA en banc relative to the review of decisions or resolutions on motion for reconsideration or new trial of the courts two (2) divisions in cases arising from administrative agencies such as the Bureau of Customs.[13] Hence, the Court is without jurisdiction to review decisions rendered by a division of the CTA, exclusive appellate jurisdiction over which is vested in the CTA en banc.

TFS Inc. vs. CIR Petitioner received a PAN for deficiency VAT and expanded withholding tax. Insisting that there was no basis for the issuance of PAN, petitioner requested the BIT to withdraw and seta side the assessments. CIR however informed petitioner that a FAN was issued on 25 January 2002 and that petitioner had until 22 February 2002 to file a protest letter. On 20 Feb, petitioner protested the FAN. There being no action taken by the CIR, petitioner filed a Petition for Review with CTA which upheld the assessment issued against petitioner amounting to P11M. Its MR was also denied by CTA. Petitioner filed before CA a Motion for Extension of Time to File Petition for Review which was also dismissed for lack of jurisdiction in view of RA 9282. Realizing its error, petitioner filed with CTA en banc a petitioner a Petition for Review which was dismissed for being filed out of time.

Petitioner admits that it failed to timely file its Petition for Review with the proper court (CTA). However, it attributes the procedural lapse to the inadvertence or honest oversight of its counsel, who believed that at the time the petition, was filed, the CA still had jurisdiction since the rules and regulations to implement the newly enacted RA 9282 had not yet been issued and the membership of the CTA En Banc was not complete. Jurisdiction to review decisions or resolutions issued by the Divisions of the CTA is no longer with the CA but with the CTA En Banc. A party adversely affected by a resolution of a Division of the CTA on a motion for reconsideration or new trial, may file a petition for review with the CTA en banc. However, as in all cases, there are exceptions to the strict application of the rules for perfecting an appeal such as when the late filing of the notices of appeal were filed, the new rules applicable therein had just been recently issued. In the instant case, RA 9282 took effect on April 23, 2004, while petitioner filed its Petition for Review on Certiorari with the CA on August 24, 2004, or four months after the effectivity of the law. By then, petitioners counsel should have been aware of and familiar with the changes introduced by RA 9282. Thus, we find petitioners argument on the newness of RA 9282 a bit of a stretch. Petitioner likewise cannot validly claim that its erroneous filing of the petition with the CA was justified by the absence of the CTA rules and regulations and the incomplete membership of the CTA En Banc as these did not defer the effectivity and implementation of RA 9282. In fact, under Section 2 of RA 9282, the presence of four justices already constitutes a quorum for En Banc sessions and the affirmative votes of four members of the CTA En Banc are sufficient to render judgment. Thus, to us, the petitioners excuse of "inadvertence or honest oversight of counsel" deserves scant consideration. However, we will overlook this procedural lapse in the interest of substantial justice. Although a client is bound by the acts of his counsel, including the latters mistakes and negligence, a departure from this rule is warranted where such mistake or neglect would result in serious injustice to the client.29 Procedural rules may thus be relaxed for persuasive reasons to relieve a litigant of an injustice not commensurate with his failure to comply with the prescribed procedure. Such is the situation in this case.

thereof. Subsequently, respondents importation arrived at Manila International Port and paid the duties. However, BOC examiners contested the tariff classification if the said importation and recommended to the Collector of Customs to reclassify respondents importation (covering composite concentrates for simple dilution with water to make beverages) with a corresponding 7% import duty rate. To release the importation, respondent paid the reclassified rate. Respondent appealed before petitioner challenging the reclassification. Not being granted, respondent filed a petition for review before the CTA, CTA Second Division ruled in favor of respondent. Petitioner disagreed and elevated the case to the CTA en banc via a petition for review which dismissed the case on ground that petition failed to file before the Second Division the required MR before elevating the case to it. The Court agrees with the CTA En Banc that the Commissioner failed to comply with the mandatory provisions of Rule 8, Section 1 of the Revised Rules of the Court of Tax Appeals31 requiring that "the petition for review of a decision or resolution of the Court in Division must be preceded by the filing of a timely motion for reconsideration or new trial with the Division." The word "must" clearly indicates the mandatory -- not merely directory -- nature of a requirement. Before the CTA En Banc could take cognizance of the petition for review concerning a case falling under its exclusive appellate jurisdiction, the litigant must sufficiently show that it sought prior reconsideration or moved for a new trial with the concerned CTA division. Procedural rules are not to be trifled with or be excused simply because their non-compliance may have resulted in prejudicing a partys substantive rights.33 Rules are meant to be followed. They may be relaxed only for very exigent and persuasive reasons to relieve a litigant of an injustice not commensurate to his careless non-observance of the prescribed rules. At any rate, even if the Court accords liberality, the position of the Commissioner has no merit. After examining the records of the case, the Court is of the view that the import duty rate of 1%, as determined by the CTA Second Division, is correct.

Commissioner of Customs vs. Marina Sales Respondent was appointed by Co-Ro Food of Denmark, maker of Sunquick Juice, to be its manufacturing arm in the Philippines. As such, respondent imports raw materials. In the past, BOC assessed the said type of importation with a 1% import duty rate and paid duties in accordance