Republic of the Philippines v. Marsman Development Company Remedies Case No.

57
and/or F.. !"R#$%%& in his capacity as 'i(uidator of MDC) #.R. No. '*+,-5. /pril 07& +-70
F/C1%2 Defendant corporation was a timber licensee holding Timber Licensee Agreement No. 37-A,
with concessions in the Municipalit of !asud and Monda"o, #amarines Norte. $ometime before %ctober
&', &('3 an in)estigation was conducted on the business operation and acti)ities of the corporation
leading to the disco)er that certain ta*es were due +from, it on logs produced from its concession. The
Deput #ollector of -nternal .e)enue issued three assessments totalling /'(,&33.70 are the sub1ect matter
of the instant case for collection.
-n a letter of the defendant corporation under the signature of its counsel, Att. /edro L. Moa, wherein it
is re2uested that said defendant be furnished with an itemi"ed statement of the said ta*es and wherein
notice is ser)ed of its intention to 2uestion the )alidit and the legalit of the assessments and to appear
before the #onference $taff of the !ureau of -nternal .e)enue in connection with the said ta*. -n repl to
the letter, the !ureau of -nternal .e)enue wrote Att. Moa a letter informing him that before the case
ma be acted upon b the #onference $taff, it was necessar that the defendant corporation compl
within &3 das from date of said letter, with the pro)isions of Dept. %rder No. 4&3 which re2uired, among
others, that re2uests for rein)estigation or ree*amination of ta* assessments shall be made in writing
under oath of the ta*paer concerned, specifing the ground or grounds relied upon for the re)ision of the
assessment and accompanied b such documents and other documents relied upon in support of the
re2uest5 and that, as a general rule, the re)ision will be granted onl upon pament of one-half of the total
assessments and upon filing of a bond to guarantee the pament of the balance of the ta*.
A follow-up letter was addressed to Att. Moa after disco)ering that the re2uirements mentioned in the
letters ha)e not been complied with inspite of the considerable length of time that had alread elapsed. -n
the last paragraph of the said letter, 6*hibit 7, the defendant corporation was warned that unless the
aforementioned re2uirements are complied with within fi)e +', das from receipt, the 3case 4ill be
considered abandoned and appropriate action 4ill be ta5en in accordance 4ith la43. Again, after
disco)ering that the letters ha)e remained unheeded b the defendant corporation, the latter was gi)en
another chance of compling with the re2uirements mentioned within fi)e das from receipt of said letter
otherwise, the !ureau of 6nternal Revenue 34ill be constrained to enforce the immediate collection
of the deficiency percenta7e ta8 and forest char7es due3. The !ureau of -nternal .e)enue issued 8final
ta* notices8 to the defendant corporation. 9owe)er, defendant corporation again protested the assessment
of /:',':&.;; and reiterated its re2uest for specification of the items disputing the assessment in 2uestion.
7inding no merit in the protests of the defendant corporation, a warrant of distraint and le) was issued
against it b the !ureau of -nternal .e)enue.
N%T6< -t should be obser)ed at this point that the corporation did not act on an of the Letters of
Assessment nor did it show an intention of compling with the same. -t merel =ept as=ing the #-. that
it be gi)en e*tensions and an itemi"ed statement of the said ta*es.
According to the .ecord on Appeal, and as additionall stated also b the trial court, the original
complaint filed on $eptember ', &('0 praed for the pament of onl /&3,;('.(;, and it was onl in an
amended complaint filed on August 4;, &('( and admitted on $eptember 43, &('( that, for the first time,
the amount of /'(,&33.70 was 1udiciall demanded to be paid.
6%%"$2 >hether the lower court erred in declaring that the notices of the #-. were the ?assessments@
that became final and e*ecutor.
$'D2 N9. -t is plain that the 9is 9onor +lower court, committed no error in holding that the period to
2uestion the ta* assessments herein in)ol)ed had alread e*pired when the #ommissioner of -nternal
.e)enue initiated this suit against defendants. Defendant corporation ac=nowledged receipt of the said
assessments wa bac=, and, in fact, it re2uested for a rein)estigation before the #onference $taff, but
when the !ureau demanded compliance with the prere2uisites aforementioned of such rein)estigation, the
corporation failed to compl. The corporation did as= for e*emption, but when this re2uest was denied,
again there was no compliance. -n )iew of such non-compliance, in its letter of March 3, &('', the
!ureau une2ui)ocall warned the corporation that should it fail further to compl, within fi)e das from
receipt thereof, the 8assessments +would, be considered final8. still no compliance came. $ubse2uent
follow-up letters brought no better results.
As it appears, therefore, appellant corporation, b its own omission, made it impossible for the !ureau of
-nternal .e)enue to act on its motion for reconsideration. Not that it would ha)e otherwise mattered, for it
has been held that the mere filing of such a motion does not suspend the running of the period for the
collection of the ta*,

which implies that an assessment made b the !ureau is supposed to be final and
e*ecutor, insofar as the ta*paer is concerned, unless re)ised b the !ureau in accordance with law and
regulations, but it is to be emphasi"ed that a ta*paer cannot dela the collection of ta*es b the simple
e*pedient of barel as=ing for clarification or reconsideration, )er often unnecessar and unwarranted,
without doing anthing to compl with the statutor and reglementar re2uirements for the
reconsideration of the assessment made against him. -n an e)ent, since appellant corporation did nothing
from December, &(': when it ac=nowledged receipt of the assessment now impugned to appeal the same,
if such an appeal was possible, to the #ourt of Ta* Appeals, e)en after it was warned b the !ureau of
-nternal .e)enue that its failure to compl with the re2uirements for reconsideration within fi)e +', das
would result in its being 8considered8 final, >e find no merit in appellantsA posture that the assessments
here in 2uestion has not et become final and e*ecutor. #onse2uentl, o)erruling of appellants
assignment of error is clearl in order.
As to argument thereunder that the 1udicial action for the reco)er of the bigger amount of /:',':&.;;
was not filed within fi)e +', ears from $eptember &3, &(':, the date of the earliest assessment, has
neither factual nor legal basis. As aptl e*plained b his 9onor, such argument proceeds from the
erroneous premises that because the amended complaint in which the said amount was first alleged and
demanded was formall admitted b the court onl on $eptember 43, &('( and that the filing of said
amended complaint on August 4;, &('( is immaterial. -n the procedural sense, the only purpose of
re(uirin7 leave of and formal admission by the court of an amended pleadin7 after issues have
already been :oined as to the ori7inal ones is to prevent the in:ection of other issues which might
either to be considered as barred alread or made the sub1ect of another proceeding, if the are not
anwa indispensable for the resolution of the original ones and no unnecessar multiplicit of suits
would result5 so, when the court ultimatel admits the amendment, the legal effect, for substanti)e
purposes, of such admission retroacts as a rule to the date of its actual filing.