Publishing the Decision of the Court of Appeals in the Case Entitled "Republic of the Philippines, vs. Froilan Calleja," CA-G R. No. 44320-R Promulgated on March 2, 1972

October 4, 1972 REVENUE MEMORANDUM ORDER NO. 34-72 SUBJECT : Publishing the Decision of the Court of Appeals in the Case Entitled "Republic of the Philippines, vs. Froilan Calleja," CA-G R. No. 44320-R Promulgated on March 2, 1972 TO : All Internal Revenue Officers, Employees and Others Concerned For the information and guidance of all concerned, there is quoted hereunder the pertinent portion of the decision of the Court of Appeals in the case entitled "Republic of the Philippines, vs. Froilan Calleja,": "The assessment is a condition precedent or a necessary requirement before judicial action may be taken against the taxpayer under Section 332. Art. 331 expressly provides that "no proceeding in court without assessment for the collection of such taxes should be begun after the expiration of such period." It is the assessment that gives rise to the cause of action. The return in this case of the taxes to be paid by the defendant, was made when he submitted the auxiliary invoices on May 17, 1948, August 17, 1948 and May 21, 1951. The assessment was made by the Acting Commissioner of Internal Revenue only on November 7, 1962, when he addressed the letter (Exh. B) to the defendant at Claveria, Cagayan. More than five (5) years had passed since the submission of the last auxiliary invoice on May 21, 1951. While the action in this particular case was filed within five (5) years from the time of the assessment, the assessment was not made within five (5) years from the submission of the return required by Section 331. The cause of action of plaintiff had not therefore arisen for failure to comply with the condition precedent for the collection of taxes thru judicial proceedings under Section 332. cd Pursuant to the foregoing decision, the auxiliary invoice is considered a return as contemplated by Section 331 of the Tax Code, and therefore forest charges due on forest products should be assessed within five years from the date it is submitted to the Collection Agent. The auxiliary invoice is to be submitted to the Revenue Collection Agents of the municipalities where the forest products have been cut or gathered (Section 11, Regulation No. 85). In view thereof, internal revenue officers and others concerned are hereby instructed to see to it that forest charges are assessed immediately and not later than five (5) years from the date of submission of the auxiliary invoice to the said Revenue Collection Agent in order that the right to assess may not prescribe. Publicity Internal Revenue Officers and others charged with the enforcement of internal revenue laws are hereby enjoined to give this Order as wide a publicity as possible. MISAEL P. VERA Commissioner of Internal Revenue