DIGEST: De Borja v.s. De Borja 58 Phil.

811 (1933)
FACTS:
Quintin de Borja, a judicial administrator of the deceased Marcelo de Borja filed a case before the Court of First
Instance of Rizal to recover from Francisco de Borja (defendant) a sum of Php 61,376.56. This was owed to the
deceased for money loaned to and collected by him from other persons with an obligation to render an accounting.
The defendant made counterclaims for alleged sums of money.The lower court ruled that the plaintiff was entitl ed to
recover Php 33,218.86 from the defendant and by way of counterclaim is entitled to Php 39,683.00 from the plaintiff.
Also, the lower court rendered judgment in favor of the defendant in the sum of Php 6,464,14 with legal interest
thereon from the date of the counterclaim with costs. Both parties appealed. The liquidation made by the trial court
was made out of careful analysis of the oral and documentary evidence.
ISSUE:
Whether or not the plaintiff is entitled for recovery?
HELD:
NO. The plaintiff appellants contention that the defendants claimed had prescribed already was untenable. The
period of prescription is 10 years with the provisions of section 43 (1) of the Civil Code Procedure. Neither the plaintiff
is entitled to the interest claimed. Defendant acted in his capacity as attorney-in-fact of his deceased father and there
was no evidence that the entrusted money was converted for his use. What existed between the parties was a mere
gratuitous commadatum and the most of the deceased bound himself to do was to pay the taxes on the properties in
question.
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VERA v. FERNANDEZ
GR No. L-31364 March 30, 1979
89 SCRA 199

FACTS: The BIR filed on July 29, 1969 a motion for allowance of claim and for payment of taxes representing the estate's tax
deficiencies in 1963 to 1964 in the intestate proceedings of Luis Tongoy. The administrator opposed arguing that the claim was
already barred by the statute of limitation, Section 2 and Section 5 of Rule 86 of the Rules of Court which provides that all claims
for money against the decedent, arising from contracts, express or implied, whether the same be due, not due, or contingent, all
claims for funeral expenses and expenses for the last sickness of the decedent, and judgment for money against the decedent,
must be filed within the time limited in the notice; otherwise they are barred forever.

ISSUE: Does the statute of non-claims of the Rules of Court bar the claim of the government for unpaid taxes?

HELD: No. The reason for the more liberal treatment of claims for taxes against a decedent's estate in the form of exception from
the application of the statute of non-claims, is not hard to find. Taxes are the lifeblood of the Government and their prompt and
certain availability are imperious need. (CIR vs. Pineda, 21 SCRA 105). Upon taxation depends the Government ability to serve
the people for whose benefit taxes are collected. To safeguard such interest, neglect or omission of government officials entrusted
with the collection of taxes should not be allowed to bring harm or detriment to the people, in the same manner as private persons
may be made to suffer individually on account of his own negligence, the presumption being that they take good care of their
personal affairs. This should not hold true to government officials with respect to matters not of their own personal concern. This
is the philosophy behind the government's exception, as a general rule, from the operation of the principle of estoppel.
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CIR v. YMCA
GR No. 124043, October 14, 1998
298 SCRA 83

FACTS: Private Respondent YMCA--a non-stock, non-profit institution, which conducts various programs beneficial to the
public pursuant to its religious, educational and charitable objectives--leases out a portion of its premises to small shop owners,
like restaurants and canteen operators, deriving substantial income for such. Seeing this, the commissioner of internal revenue
(CIR) issued an assessment to private respondent for deficiency income tax, deficiency expanded withholding taxes on rentals
and professional fees and deficiency withholding tax on wages. YMCA opposed arguing that its rental income is not subject to
tax, mainly because of the provisions of Section 27 of NIRC which provides that civic league or organizations not organized for
profit but operate exclusively for promotion of social welfare and those organized exclusively for pleasure, recreation and other
non-profitble businesses shall not be taxed.

ISSUE: Is the contention of YMCA tenable?

HELD: No. Because taxes are the lifeblood of the nation, the Court has always applied the doctrine of strict in interpretation in
construing tax exemptions. Furthermore, a claim of statutory exemption from taxation should be manifest and unmistakable from
the language of the law on which it is based. Thus, the claimed exemption "must expressly be granted in a statute stated in a
language too clear to be mistaken."
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DAVAO GULF LUMBER CORP v. CIR
GR No. 117359, July 23, 1998
293 SCRA 77

FACTS: Republic Act No. 1435 entitles miners and forest concessioners to the refund of 25% of the specific taxes paid by the oil
companies, which were eventually passed on to the user--the petitioner in this case--in the purchase price of the oil products.
Petitioner filed before respondent Commissioner of Internal Revenue (CIR) a claim for refund in the amount representing 25% of
the specific taxes actually paid on the above-mentioned fuels and oils that were used by petitioner in its operations. However
petitioner asserts that equity and justice demands that the refund should be based on the increased rates of specific taxes which it
actually paid, as prescribed in Sections 153 and 156 of the NIRC. Public respondent, on the other hand, contends that it should be
based on specific taxes deemed paid under Sections 1 and 2 of RA 1435.

ISSUE: Should the petitioner be entitled under Republic Act No. 1435 to the refund of 25% of the amount of specific taxes it
actually paid on various refined and manufactured mineral oils and other oil products, and not on the taxes deemed paid and
passed on to them, as end-users, by the oil companies?

HELD: No. According to an eminent authority on taxation, "there is no tax exemption solely on the ground of equity." Thus, the
tax refund should be based on the taxes deemed paid. Because taxes are the lifeblood of the nation, statutes that allow exemptions
are construed strictly against the grantee and liberally in favor of the government. Otherwise stated, any exemption from the
payment of a tax must be clearly stated in the language of the law; it cannot be merely implied therefrom.
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MARCOS II v. CA
GR No. 120880, June 5, 1997
293 SCRA 77

FACTS: Bongbong Marcos sought for the reversal of the ruling of the Court of Appeals to grant CIR's petition to levy the
properties of the late Pres. Marcos to cover the payment of his tax delinquencies during the period of his exile in the US. The
Marcos family was assessed by the BIR, and notices were constructively served to the Marcoses, however the assessment were
not protested administratively by Mrs. Marcos and the heirs of the late president so that they became final and unappealable after
the period for filing of opposition has prescribed. Marcos contends that the properties could not be levied to cover the tax dues
because they are still pending probate with the court, and settlement of tax deficiencies could not be had, unless there is an order
by the probate court or until the probate proceedings are terminated.

ISSUE: Is the contention of Bongbong Marcos correct?

HELD: No. The deficiency income tax assessments and estate tax assessment are already final and unappealable -and-the
subsequent levy of real properties is a tax remedy resorted to by the government, sanctioned by Section 213 and 218 of the
National Internal Revenue Code. This summary tax remedy is distinct and separate from the other tax remedies (such as Judicial
Civil actions and Criminal actions), and is not affected or precluded by the pendency of any other tax remedies instituted by the
government.
The approval of the court, sitting in probate, or as a settlement tribunal over the deceased is not a mandatory requirement in the
collection of estate taxes. It cannot therefore be argued that the Tax Bureau erred in proceeding with the levying and sale of the
properties allegedly owned by the late President, on the ground that it was required to seek first the probate court's sanction.
There is nothing in the Tax Code, and in the pertinent remedial laws that implies the necessity of the probate or estate settlement
court's approval of the state's claim for estate taxes, before the same can be enforced and collected.
On the contrary, under Section 87 of the NIRC, it is the probate or settlement court which is bidden not to authorize the executor
or judicial administrator of the decedent's estate to deliver any distributive share to any party interested in the estate, unless it is
shown a Certification by the Commissioner of Internal Revenue that the estate taxes have been paid. This provision disproves the
petitioner's contention that it is the probate court which approves the assessment and collection of the estate tax.
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PUNSALAN v. MUN. BOARD OF CITY OF MANILA
GR No. L-23645, October 29, 1968
95 PHIL 46

FACTS: The plaintiffs--two lawyers, medical practitioner, a dental surgeon, a CPA, and a pharmacist--sought the annulment of
Ordinance No.3398 of the City of Manila which imposes a municipal occupation tax on persons exercising various professions in
the city and penalizes non-payment of the tax, contending in substance that this ordinance and the law authorizing it constitute
class legislation, are unjust and oppressive, and authorize what amounts to double taxation. The burden of plaintiffs' complaint is
not that the professions to which they respectively belong have been singled out for the imposition of this municipal occupation
tax, but that while the law has authorized the City of Manila to impose the said tax, it has withheld that authority from other
chartered cities, not to mention municipalities.

ISSUE: Does the law constitute a class legislation? Is it for the Court to determine which political unit should impose taxes and
which should not?

HELD: No. It is not for the courts to judge what particular cities or municipalities should be empowered to impose occupation
taxes in addition to those imposed by the National Government. That matter is peculiarly within the domain of the political
departments and the courts would do well not to encroach upon it. Moreover, as the seat of the National Government and with a
population and volume of trade many times that of any other Philippine city or municipality, Manila, no doubt, offers a more
lucrative field for the practice of the professions, so that it is but fair that the professionals in Manila be made to pay a higher
occupation tax than their brethren in the provinces.
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CIR vs CTA
FACTS:A petition for review of the decision of the BIR denying the tax refund of Citytrust wasfiled with the CTA. It was
submitted for decision based solely on the pleadings and evidencesubmitted by Citytrust. CIR could not present any evidence by
reason of the repeated failureof the Tax Credit/Refund Division of the BIR to transmit the records of the case, as well asthe
investigation report thereon, to the Solicitor General. The CTA rendered its decisionordering BIR to grant a refund to Citytrust in
the amount of P13,314,506.14. The CAaffirmed the judgment of the CTA.
Issue: Whether or not Citytrust is entitled to a refund.
HELD:It is a long and firmly settled rule of law that the government is not bound by the errorscommitted by its agents. In the
performance of its government functions, the State cannot be estopped by the neglect of its agents and officers. Although the
government maygenerally be estopped through affirmative acts of public officers acting within their authority, their neglect or
omission of public duties as exemplified in this case will notand should not produce that effect. Nowhere is the aforestated rule
more true than in thefield of taxation. It is axiomatic that the government cannot and must be estopped particularly in matters
involving taxes. Taxes are the lifeblood of the nation through whichthe government agencies continue to operate and with which
the State effects its functionsfor the welfare of its constituents. The errors of certain administrative officers should never be
allowed to jeopardize the government's financial position, especially in the case at bar where the amount involves millions of
pesos the collection whereof, if justified, stands to be prejudiced just because of bureaucratic lethargy.Judgment of the CA is SET
ASIDE and the case is REMANDED to the CTA for further proceedings and appropriate action.
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