LAW OF BASIC TAXATION IN THE PHILIPPINES
review of their superiors who may countermand or affirm them. The
Government is never estopped to collect legitimate taxes because of
the error committed by its agents (Visayan Cebu Terminal Co., Inc. v.
Commissioner Internal Revenue, L-19530 and 19444, Feb. 27, 1965).
‘Then, too, it is important to consider that a favorable finding or
position taken by the BIR in an investigation involving a particular
taxpayer should not be a ground for according the same treatment toa
different taxpayer in another investigation if in that previous
investigation error was committed. According to one decided case, the
Government is not bound by the errors committed by its agents in
previous investigations and assessments (Tan Guan v. CTA, et al.,
L-23676, Apr. 27, 1967).
‘The principle in tax law enforcement is: The Government is not
estopped by the mistakes or errors ofits agents; erroneous application
and enforcement of law by public officers do not block the subsequent
correct application of statutes (E. Rodriguez, Inc. v. Collector of
Internal Revenue, L-23041, July 31 1969; Commissioner of Internal
Revenue v. Court of Tax Appeals, et al., G.R. No. 106611, July 21,
1994; Philippine Basketball Association v. Court of Appeals, et al,
G.R. No, 119122, Aug. 8, 2000).
Similarly, estoppel does not apply to deprive the Government of its
right to raise defenses even if those defenses are being raised only for
the first time on appeal (Commissioner of Internal Revenue v. Procter
& Gamble Philippine Manufacturing Corp., supra).
‘Thus, in the Procter & Gamble case, supra, involving the refund
of alleged over-withheld final withholding tax on dividends paid out to
a non-resident foreign corporation, the defense of the Government
‘against the claim for refund to the effect that a mere withholding
agent is not the proper party that should claim such refund, was not
interposed by the Government in the lower court but was raised only
for the first time on appeal.
‘The Supreme Court, however, sustained the Government's position
and ruled that estoppel does not preclude the Government from its
right to bring up such defense even for the first time on appeal.
However, the Supreme Court, in a subsequent resolution, ruled
that the BIR should not be allowed to defeat an otherwise valid claim
for refund by raising the question of the withholding agent's alleged
incapacity to file the claim for refund for the first time on appeal.
According to the Court, the Government must follow the same rules of
procedure which bind private parties (Commissioner of Internal
Revenue v. Procter & Gamble Philippine Manufacturing Corp., G.R.
No. 66838, Dec. 2, 1991 [Resolution]; see Chapter IX, infra).
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‘TAX ADMINISTRATION AND ENFORCEMENT
Where it appears that in a case involving a claim for refund of
allegedly overpaid taxes, the Government was bereft of any factual
basis to oppose such claim and present evidence to dispute the same
bocwuse of the delay and inaction ofa division in the BIR to submit the
corresponding report on the investigation, the Government is not
loprived ofits right to file a motion for reconsideration against decision
of the CTA allowing the refund in question. It is a well established
principle that the Government is not estopped by the mistakes or
nogligence of its officials and employees (Commissioner of Internal
Revenue v. Court of Appeals, et al., supra).
Exceptionally, however, the Court ruled in Commissioner of
Internal Revenue v. Court of Appeals, et al. (G.R. No. 117982, Feb. 6,
1997) that, “(a)dmittedly the Government is not estopped from collecting,
taxes legally due because of mistakes or errors ofits agents. But like
other principles of law, this admits of exceptions in the interest of
Justice and fair play, as where injustice will result to the taxpayer.”
‘Then, too, in Commissioner of Intefnal Revenue v. Court of Appeals,
etal. (G.R_ No. 107136, Feb. 23, 1999), it was emphasized that “(t) his
Court is mindful of the well-entrenched principle that the government
is never estopped from collecting taxes because of mistakes or errors
on the part ofits agents but this rule admits of exceptions in the interest
of justice and fair play. x xx”
IS THERE ESTOPPEL AGAINST THE TAXPAYER? Whil
the principle of estoppel may not be invoked against the Government,
this is not necessarily true in the case of the taxpayer. So, for instance,
as in one decided case (Collector of Internal Revenue v. Suyoc
Consolidated Mining Co., 104 Phil. 819), the taxpayer made several
requests for the reinvestigation of its tax liabilities such that the
Government, acceding to the taxpayer's request, postponed the
collection ofits liability. The taxpayer cannot later on be permitted to
raise the defense of prescription inasmuch as his previous requests for
reinvestigation have the effect of placing him in estoppel.
NATURE AND KINDS OF ASSESSMENTS. An assessment is
the official action of an administrative officer in determining the amount
of tax due from a taxpayer, or it may be a notice to the effect that the
amount therein stated is due from the taxpayer as a tax with a demand
for payment of the tax or deficiency stated therein (Matic, Taxation in
the Philippines, Vol. I, p. 270 citing Bisaya Land Transportation Co.
v. Collector of Internal Revenue, 105 Phil. 1338 [Unrep.]).
175