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The Commissioner of Internal Revenue vs. CTA 203054-55

The Commissioner of Internal Revenue filed a petition for certiorari against the Court of Tax Appeals' denial of its motion to lift an order of default. The Court of Tax Appeals declared the Commissioner in default for failing to appear at two pre-trial conferences regarding CBK Power Company's petitions for input tax credit. The Supreme Court granted the petition, finding that a petition for certiorari was the proper remedy and that the Court of Tax Appeals gravely abused its discretion in denying the motion to lift default, as there was no evidence the Commissioner intentionally disregarded the Court's authority and it immediately filed a motion to lift the order.

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264 views1 page

The Commissioner of Internal Revenue vs. CTA 203054-55

The Commissioner of Internal Revenue filed a petition for certiorari against the Court of Tax Appeals' denial of its motion to lift an order of default. The Court of Tax Appeals declared the Commissioner in default for failing to appear at two pre-trial conferences regarding CBK Power Company's petitions for input tax credit. The Supreme Court granted the petition, finding that a petition for certiorari was the proper remedy and that the Court of Tax Appeals gravely abused its discretion in denying the motion to lift default, as there was no evidence the Commissioner intentionally disregarded the Court's authority and it immediately filed a motion to lift the order.

Uploaded by

magen
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

The Commissioner of Internal Revenue versus

Court of Tax Appeals and CBK Power Company Limited


G.R. No. 203054-55, July 29, 2015
Third Division, Peralta, J.

Facts: CBK Power Company Limited (CBK) is a special purpose entity engaged
in hydroelectric power plant business in Caliraya, Botocan, and Laguna. The
Commissioner of Internal Revenue (CIR) is he who’s vested with power to
decide, approve, and grant tax refunds, tax credits of erroneously or illegally
collected internal revenue taxes as provided by law. CBK filed a judicial claim
for input tax credit with the Court of Tax Appeals (CTA), later it filed another.
The two petitions were consolidated. CIR’s counsel failed to appear during pre-
trial conference, and again on its rescheduled conference. CBK then moved
for the CIR to be declared in default. The CTA allowed CBK to present ex parte,
and denied CIR’s motion to lift order of default. CIR now files for certiorari upon
the CTA’s denial of his Motion for reconsideration.

Issue(s): (1)Whether a petition for certiorari is the proper remedy on an adverse


resolution of any division of the CTA (2) Whether the CTA acted with grave
abuse of discretion in denying CIR’s motion to lift order of default.

Decision: Petition Granted, CTA decision set aside. 1. The Revised CTA Rules
provide that it adopts the procedure for petitions for reviews and appeals of
the existing jurisprudence, rules and procedures. Pursuant to Section 1, Rule 41
of the Rules of Court, the CTA en banc has jurisdiction over final order or
judgment but not over interlocutory orders issued by the CTA in division.
Instead, pursuant to Section 1 rule 41 of the Rules of Civil procedure, the proper
remedy is a special civil action under rule 65 hence, the CIR was not mistaken
in its recourse to the Supreme Court. 2. CIR argues, he should not have been
declared in default in the first place since he had no intention to defy the
scheduled pre-trial conferences. Calalang v. Court of Appeals held that unless
a party's conduct is so negligent, irresponsible, contumacious, or dilatory as to
provide substantial grounds for dismissal for non-appearance, the courts
should consider lesser sanctions which would still amount into achieving the
desired end. We apply the same criteria on a defendant who fails to appear
at a pre-trial conference. Here, there was no showing that CIR intentionally
disregarded the CTA’s authority, the 2 cases was filed on different dates and
was handled by diff. lawyers, and when it was consolidated and scheduled,
both counsels were not able to attend one, for health concerns, the other had
to attend to another pre-trial conference. The Court also highlights that the
immediate filing of a motion to lift the order of default, should have been
indicative of a more reason to re-consider since its lifting would not prejudice
or deprive CBK’s right, specially when the latter did not file opposition.

Page 27 of 30

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