North Camarines Sur Lumber Co.

vs CIR

FACTS: The petitioner North Camarines Lumber Co., is a domestic corporation engaged in a
lumber business. On July 19 and July 31, 1951 it sold more than 2M board feet of logs to
General Lumber Co. with the agreement that the latter would pay the sales taxes. The CIR,
upon consultation officially advised the parties that the bureau interposes no objection so long
as the tax due shall be covered by a surety. General Lumber complied, but later failed, with the
surety, to pay the tax liabilities, and so the respondent collector required the petitioner to pay
thru a letter dated August 30, 1955. Twice did the petitioner filed a request for reconsideration
before finally submitting the denied request for appeal before the Court of Tax Appeals. The
CTA dismissed the appeal as it was clearly filed out of time. The petitioner had consumed thirty-
three days from the receipt of the demand, before filing the appeal. Petitioner argued that in
computing the 30-day period in perfecting the appeal the letter of the respondent Collector
dated January 30, 1956, denying the second request for reconsideration, should be considered
as the final decision contemplated in Section 7, and not the letter of demand dated August
30,1955.

ISSUE: whether or not the contention of north camarines lumber co. is tenable

HELD: No. This contention is untenable. SC rules “We cannot countenance that theory that
would make the commencement of the statutory 30-day period solely dependent on the will of
the taxpayer and place the latter in a position to put off indefinitely and at his convenience the
finality of a tax assessment”. Such an absurd procedure would be detrimental to the interest of
the Government, for "taxes are the lifeblood of the government, and their prompt and certain
availability is an imperious need."
Philex Mining vs CIR

ISSUE: Whether or not taxes can be subject to set-off or compensation for the reason that the
petitioner has pending claims for VAT credit/refund

HELD: No. Philex's claim is an outright disregard of the basic principle in tax law that taxes are the
lifeblood of the government and so should be collected without unnecessary hindrance. Evidently, to
countenance Philex's whimsical reason would render ineffective our tax collection system, it finds no
support in law or in jurisprudence. To be sure, Philex cannot be allowed to refuse the payment of its tax
liabilities on the ground that it has a pending tax claim for refund or credit against the government
which has not yet been granted .Taxes cannot be subject to compensation for the simple reason
that the government and the taxpayer are not creditors and debtors of each other. There is a
material distinction between a tax and debt. Debts are due to the Government in its corporate
capacity, while taxes are due to the Government in its sovereign capacity. There can be no
off-setting of taxes against the claims that the taxpayer may have against the government. A
person cannot refuse to pay a tax on the ground that the government owes him an amount
equal to or greater than the tax being collected. The collection of a tax cannot await the results
of a lawsuit against the government.