G.R. No. L-36181 – G.R. No. L-36748 – 203 Phil. 173 – 117 SCRA 804 – Taxation Law – Basic Principles – Courts Cannot Issue Mandamus to Compel CIR to Collect Taxes
In 1967, Juan Maniago informed the Commissioner of Internal Revenue (CIR) that MERALCO Securities Corporation did not pay the proper taxes from 1962 to 1966. The CIR conducted an investigation and it found out that MERALCO did actually pay the proper amount of tax due within said period. The CIR then informed Maniago of its decision and also informed him that since no deficiency tax was collected, Maniago is not entitled to the informer’s reward then offered to individuals who report tax evaders.
Maniago then filed a petition for mandamus against the CIR. After hearing, Judge Victorino Savellano granted Maniago’s petition and ordered the CIR to collect the deficiency taxes and further ordered the CIR to pay Maniago’s informer’s reward.
ISSUE: Whether or not Judge Savellano is correct.
HELD: No. The power to assess or not to assess tax deficiency against a taxpayer is a discretionary function vested in the CIR. As such, the CIR may not be compelled by mandamus. Mandamus only lies to enforce the performance of a ministerial act or duty and not to control the performance of a discretionary power. Especially so in this case where the CIR found that no tax deficiency is due. It should be noted further that regular courts have no jurisdiction over the subject matter of this case. Section 7 of Republic Act No. 1125, enacted June 16, 1954, granted to the Court of Tax Appeals exclusive appellate jurisdiction to review by appeal, among others, decisions of the Commissioner of Internal Revenue in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties imposed in relation thereto, or other matters arising under the National Internal Revenue Code or other law or part of law administered by the Bureau of Internal Revenue.
