Republic v. Sangle

[CA No. 32782-R. July 18, 1966.] REPUBLIC OF THE PHILIPPINES , plaintiff and appellee , vs . MARCIANO SANGLE , defendant and appellant . Amado Ungson, Jr . for defendant and appellant. Solicitor General Arturo A . Alafriz, Assistant Solicitor General Felicisimo R . Rosete and Special Attorney Angelina G . Gonzales for plaintiff and appellee. SYLLABUS TAXES AND ASSESSMENTS; SEC. 11, REP. ACT 1125; SCOPE. Section 11 of Republic Act No. 1125 covers not only cases where the taxpayer is being assessed more than what he is required to pay under the law, but also cases where a person is being made to pay certain taxes or surcharges when he is not the person supposed to pay. D E C I S I O N MARTIN , J p : This is an appeal from the decision of the Court of First Instance of Manila ordering the defendant-appellant to pay to the plaintiff-appellee the sum of P8,479.84 as amusement taxes and surcharges with legal interest from the date of the filing of the complaint until the full amount of P8,479.84 has been paid, and to pay the costs of the proceedings. LLphil It appears that defendant-appellant promoted a series of three (3) benefit boxing exhibitions at the Rizal Memorial Stadium on July 2, 1955, July 18, 1955 and August 10, 1955 (Exhibits "A", "B" and "C"). For the gross receipts deprived from said boxing exhibitions, the defendant-appellant failed to file the corresponding amusement tax returns in violation of Section 260 of the National Internal Revenue Code. As a result of the investigation conducted by the Bureau of Internal Revenue, the defendant-appellant stands liable to pay the amount of P2,055.00, P1,276.94, and P5,147.31 or a total sum of P8,479.84 as amusement taxes and surcharges. Accordingly, a letter of demand was sent to defendant-appellant on December 9, 1955 requiring him to make payment of the above amount. (Exhibit "C"). The latter, however, inspite of the letter of demand simply ignored the assessment without even trying to question or dispute it. On the date set for the hearing of the case defendant-appellant failed to appear so the trial court proceeded with the hearing without defendant-appellant or his counsel being present. On July 21, 1961 the trial court rendered a decision in favor of plaintiff-appellee. Then on August 21, 1961, defendant-appellant filed a motion for new trial which motion was denied on October 6, 1961. Thereafter a motion for reconsideration of the order denying the motion for new trial was filed by defendant-appellant and the lower court after considering the manifestation of defendant-appellant's counsel to the effect that he can submit the case for judgment on the merits after presenting certain documents which are allegedly in possession of plaintiff-appellee (R.A. p. 33) issued an order on December 2, 1961 setting aside its previous order denying the motion for new trial as well as its decision of July 1, 1961, and having the case calendared for further proceedings. A new hearing was held and the trial court based on the documentary evidence presented, rendered judgment ordering defendant-appellant to pay to plaintiff-appellee the sum of P8,479.85 as amusement taxes and surcharges with legal interest from the filing of the complaint until payment. From the decision, defendant-appellant appealed to this Court assigning the following errors: 1. The lower court erred in declaring that the question as to whether or not defendant was the promoter of the boxing exhibitions in question cannot now be entertained in view of Section 11 of Republic Act No. 1125. 2. That the decision of the trial court is contrary to law. The first assigned error is aimed at that portion of the lower court's decision which reads: "That the question as to whether or not the defendant was the promoter of the boxing exhibitions in question pertains to assessment. Consequently, the issue raised by the defendant that it was not the promoter of the said benefit boxing exhibitions cannot now be entertained. As already stated above, the assessment of the amusement taxes due on the aforementioned benefit boxing exhibitions has already become final executory and demandable due to the failure of the defendant to appeal to this Court of Tax Appeals . . .". He argues that the question as to whether or not a person is a promoter of a boxing exhibition not being a matter of assessment, the defendant-appellant will not be covered by the provision of Section 11 of Republic Act No. 1125 even if he did not appeal from the assessment made by the Collector of Internal Revenue within a period of thirty days after receipt of his ruling or decision. In fine, defendant-appellant wants to drive home the point that the provision of Section 11 is not applicable to him because his case is not one of over-assessment; that it is a case of an assessment being made on the wrong person, association or corporation. We do not find merit in this argument. Section 11 of Republic Act No. 1125 is quite explicit that: "Any person, association or corporation adversely affected by a decision or ruling of the Collector of Internal Revenue, Collector of Customs or any provincial or city Board of Assessment Appeals may file an appeal in the Court of Tax Appeals within thirty days after receipt of such decision or ruling." The evidence shows that the defendant-appellant received a letter of demand calling him to pay the plaintiff-appellee the sums of P2,055.59; P1,276.94, and P5,147.31 respectively, or a total of P8,479.84; that he has not appealed the aforesaid assessment of amusement tax or surcharge to the Court of Tax Appeals within the reglementary period prescribed by Section 11 of Republic Act No. 1125. We figure that the defendant-appellant is in a situation where he may be "adversely affected" by the decision or ruling of the Collector of Internal Revenue for undoubtedly he stands to answer for the liabilities arising from his ruling or decision. The provision of Section 11 of Republic Act No: 1125 is broad enough to cover not only cases where the taxpayer is being assessed more than what he is required to pay under the law, but also cases where a person is being made to pay certain taxes or surcharges when he is not the person supposed to pay. This Court agrees with the trial court in treating the question as to whether the defendant-appellant can be considered a promoter of the boxing exhibitions above referred to as one that relates to assessment. According to the Supreme Court, "an assessment is not an action or proceeding for the collection of taxes. It is merely a notice to the effect that the amount therein stated is due as tax and a demand for the payment thereof. It is a step preliminary, but essential, to the issuance of a warrant of distraint if still feasible and also to establish a cause for judicial action as the phrase is used is Section 316 of the Tax Code" (Alhambra Cigar & Cigarette Mfg. Co. vs . Internal Revenue, G.R. No. L-12026 and L-12131, May 29, 1959). If an assessment is merely a notice to the effect that the amount therein stated is due, then defendant-appellant cannot claim that the notice he received calling him to pay the amount of P8,479.84 to the government for promoting boxing exhibitions, is, not an assessment. The fact that he denies he is a promoter of the boxing exhibitions referred to makes the notice no less an assessment. And since the defendant-appellant did not appeal from said assessment within the reglementary period prescribed by Section 11 of Republic Act No. 1125, the same has become final, executory and demandable. He is therefore bound to honor the same. It is a settled jurisprudence that "when a person adversely affected by a decision or ruling of the Bureau of Internal Revenue has failed to appeal within 30 days after the receipt of the decision, the assessment becomes final, executory and demandable." (Republic vs . del Rosario, G.R. No. L-10460, March 11, 1959; Uy Ham vs . Republic, G.R. No. L-13809, October 20, 1959). In one case our Supreme Court quoted with approval a decision of the lower court concerning the finality of assessments and the reason for being so. The decision reads in part: "As it is really true that any person who is aggrieved by an assessment issued by the Collector of Internal Revenue is given only 30 days to appeal therefrom to the Court of Tax Appeals, the only effect should be that after that period should have expired that assessment can no longer be questioned by the taxpayer; and if this is the case as a necessary corollary, if afterwards the Government comes in and presents an action for the collection of the tax under the assessment, to permit the taxpayer in the case presented by the Government to question the assessment would have no other effect than to nullify the finality of the assessment made by the Bureau of Internal Revenue, notwithstanding that it had already become final under the provisions of Act 1125 in its Section 11; and the Court cannot construe the law to result in that absurdity. (Republic of the Philippines vs . Albert, G.R. No. L-12996, December 28, 1961). But, defendant-appellant insists that he is not the promoter of the alleged boxing exhibitions; that it was somebody else. This is not what the trial court found. According to the trial court: "Plaintiff presented the statements of income and expenses covering the said boxing benefit exhibitions (Exhibits "A", "B" and "C"). All these statements appear to have been signed by the defendant, Marciano R. Sangle, as promoter. Likewise, the reports of the investigating examiner of the Bureau of Internal Revenue regarding the tax liability of the defendant show that the latter promoted the boxing exhibitions in question (Exhibits "D", "E" and "F"). In the same manner, the boxing exhibitions (Exhibit "M') and July 15, 1955 (Exhibit "N") show that the defendant was the promoter of said boxing exhibitions (Exhibits "M-1" and "N-1"). The statement prepared by the Games and Amusement Board (Exhibit "O") also appears to show that the defendant was the promoter of the boxing exhibition stage on July 18, 1955 (Exhibit "O-1"). All these documentary evidences indubitably show that the defendant was, in truth and in fact, the promoter of the boxing benefit exhibitions stage at the Rizal Memorial Coliseum on July 2, 1955, July 18, 1955 and August 16, 1955." LLjur We have no reason to disturb the above findings and are in full accord with its conclusion that the defendant-appellant is the promoter of the tree (3) boxing exhibitions in question and as such should be liable for the amusement taxes and surcharges assessed on him by the Collector of Internal Revenue. IN VIEW OF THE FOREGOING, the judgment of the lower court is hereby affirmed in toto . SO ORDERED. Rodriguez and Lucero, JJ . , concur.