TAX 1

Syllabus – Pages 1 and 2

1. G.R. No. L-29059 December 15, 1987

COMMISSIONER OF INTERNAL REVENUE, petitioner,

vs.
CEBU PORTLAND CEMENT COMPANY and COURT OF TAX APPEALS, respondents.

FACTS:
By virtue of a decision of the Court of Tax Appeals, as modified on appeal by the Supreme Court, the Commissioner
of Internal Revenue was ordered to refund to the Cebu Portland Cement Company the amount of P 359,408.98,
representing overpayments of ad valorem taxes on cement produced and sold by it after October 1957.

Following the denial of motions for reconsideration filed by both the petitioner and the private respondent, the
latter moved for a writ of execution to enforce the said judgment. The motion was opposed by the petitioner on
the ground that the private respondent had an outstanding sales tax liability to which the judgment debt had
already been credited. In fact, it was stressed, there was still a balance owing on the sales taxes in the amount of P
4,789,279.85 plus 28% surcharge.

On April 22, 1968, the Court of Tax Appeals granted the motion, holding that the alleged sales tax liability of the
private respondent was still being questioned and therefore could not be set-off against the refund.

Issue:

Whether or not assessment of taxes can be enforced even if there is a case contesting it.

RULING:

The argument that the assessment cannot as yet be enforced because it is still being contested loses sight of the
urgency of the need to collect taxes as "the lifeblood of the government." If the payment of taxes could be
postponed by simply questioning their validity, the machinery of the state would grind to a halt and all government
functions would be paralyzed. That is the reason why, save for the exception already noted, the Tax Code provides:

Sec. 291. Injunction not available to restrain collection of tax. — No court shall have authority to
grant an injunction to restrain the collection of any national internal revenue tax, fee or charge
imposed by this Code.

It goes without saying that this injunction is available not only when the assessment is already being questioned in
a court of justice but more so if, as in the instant case, the challenge to the assessment is still-and only-on the
administrative level. There is all the more reason to apply the rule here because it appears that even after crediting
of the refund against the tax deficiency, a balance of more than P 4 million is still due from the private respondent.

To require the petitioner to actually refund to the private respondent the amount of the judgment debt, which he
will later have the right to distrain for payment of its sales tax liability is
 2. G.R. Nos. 89898-99 October 1, 1990

MUNICIPALITY OF MAKATI, petitioner,

vs.
THE HONORABLE COURT OF APPEALS, HON. SALVADOR P. DE GUZMAN, JR., as Judge RTC of Makati, Branch
CXLII ADMIRAL FINANCE CREDITORS CONSORTIUM, INC., and SHERIFF SILVINO R. PASTRANA, respondents.

FACTS:
The present petition for review is an off-shoot of expropriation proceedings initiated by petitioner
Municipality of Makati against Admiral Finance Creditors Consortium, Inc., Home Building System &
Realty Corporation and one Arceli P. Jo, involving a parcel of land and improvements thereon located at
Mayapis St., San Antonio Village, Makati and registered in the name of Arceli P. Jo.

After due hearing where the parties presented their respective appraisal reports regarding the value
of the property, respondent RTC judge fixed the appraised value of the property and ordered
petitioner to pay this amount minus the advanced payment of P338,160.00 which was earlier
released to private respondent.

RTC granted the motion for writ of execution filed by private respondent. A Notice of Garnishment
was served by respondent sheriff upon the manager of the PNB Buendia branch but was informed
that a "hold code" was placed on the account of petitioner. As a result of this, private respondent
filed a motion praying that an order be issued directing the bank to deliver to respondent sheriff the
amount equivalent to the unpaid balance due under the RTC decision.