UNIVERSITY OF SANTO TOMAS, petitioner, vs.

THE BOARD OF TAX

APPEALS, respondent.

G.R. No. L-5701 | June 23, 1953

BAUTISTA ANGELO, J.:

DOCTRINE:

The power conferred to make regulations for carrying a statute into effect must
be exercised within the powers delegated, that is to say, must be confined to
details for regulating the mode of proceeding to carry into effect the law as it
has been enacted, and it cannot be extended to amending or adding to the
requirements of the statute itself; but it is to be presumed that regulations
adopted were to carry out only the provisions of the statute and not to embrace
matters not covered, nor intended to be covered, thereby. Rules that operate to
subvert the statute may not be framed under a delegation of power to the
executive.

FACTS:

The Collector of Internal Revenue notified petitioner that its income tax as an
educational institution was subject to income tax. By agreement reached with the
Secretary of Finance, petitioner was allowed to pay said tax under protest. Petitioner
submitted to the Secretary of Finance a memorandum on the correct interpretation of
section 27 (e) of the National Internal Revenue Code in connection with its request for
reconsideration of the decision of said Secretary holding petitioner subject to income
tax on its income from tuition fees.

Petitioner then received a letter from the Secretary of Finance giving it 30 days
from receipt thereof within which to file a petition for review with the Board of Tax
Appeals in accordance with the rules promulgated by said Board under Executive Order
No. 401-A. Petitioner filed with respondent a petition for review which was docketed as
B.T.A. case No. 35. On the same date, petitioner filed a motion in said case No. 35
wherein, among other grounds, it questioned the jurisdiction of respondent to take
cognizance of the petition for review because Executive Order No. 401-A under which it
assumes to act is of doubtful validity in that it deprives the courts of first instance of
their jurisdiction to act on cases involving the recovery of taxes illegally collected under
section 306 of the National Internal Revenue Code.

ISSUE:

Whether or not EO No. 401-A is valid.

HELD:

NO. Executive Order No. 401-A is null and void in so far as it interferes with the
jurisdiction of the courts of first instance in cases arising not only under the internal
revenue law but also customs law and assessment law, but is valid with regard to the
rest of its provisions in so far as they affect the organization and administrative
functions of the Board of Tax Appeals. Under ssection 306, petitioner could file an
action in court for the recovery of the tax in question within the period therein
provided, and yet, in view of the provisions of Executive Order No. 401-A, it cannot do
so unless it first brings the matter before respondent whose decision is appealable to
the Supreme Court, and if no appeal is taken, the decision becomes final and
conclusive. Executive Order No. 401-A has the effect of depriving the courts of first
instance of their jurisdiction to act on internal revenue cases, as well as those arising
under the customs law and assessment law. The power conferred to make regulations
for carrying a statute into effect must be exercised within the powers delegated, that is
to say, must be confined to details for regulating the mode of proceeding to carry into
effect the law as it has been enacted, and it cannot be extended to amending or adding
to the requirements of the statute itself; but it is to be presumed that regulations
adopted were to carry out only the provisions of the statute and not to embrace matters
not covered, nor intended to be covered, thereby. Rules that operate to subvert the
statute may not be framed under a delegation of power to the executive.

DISPOSITIVE PORTION:

Wherefore, petition is hereby granted, without costs.