842 Phil.

1087

FIRST DIVISION
[ G.R. No. 219340. November 07, 2018 ]
COMMISSIONER OF INTERNAL REVENUE, PETITIONER, VS.
STANDARD INSURANCE CO., INC., RESPONDENT.

DECISION

BERSAMIN, J.:

At issue is the authority of the Regional Trial Court (RTC) to enjoin the enforcement
or implementation of Section 108 and Section 184 of the National Internal Revenue
Code of 1997 (NIRC) through an original action for declaratory relief.

The Case

This appeal by petition for review on certiorari is being directly brought by the
Commissioner of Internal Revenue (petitioner)[1] to challenge the judgment
rendered on May 8, 2015[2] and the order issued on July 10, 2015,[3] whereby the
Regional Trial Court (RTC), Branch 66, in Makati City in Civil Case No. 14-1330, an
action for declaratory relief initiated by the respondent, respectively permanently
enjoined the petitioner, or any persons acting on her behalf from proceeding with
the implementation or enforcement of Section 108 and Section 184 of the NIRC
against the respondent, and denied her motion for reconsideration.

Antecedents

On February 13, 2014, the respondent received from the Bureau of Internal
Revenue (BIR) a Preliminary Assessment Notice (PAN) regarding its liability
amounting to P377,038,679.55 arising from a deficiency in the payment of
documentary stamp taxes (DST) for taxable year 2011. The respondent contested
the PAN through its letter dated February 27, 2014, but the petitioner nonetheless
sent to it a formal letter of demand dated March 27, 2014. Although the respondent
requested reconsideration on April 22, 2014,[4] it received on December 4, 2014 the
Final Decision on Disputed Assessment (FDDA) dated November 25, 2014, declaring
its liability for the DST deficiency, including interest and compromise penalty,
totaling P418,830,567.46.[5] On December 11, 2014, it sought reconsideration of
the FDDA, and objected to the tax imposed pursuant to Section 184 of the NIRC as
violative of the constitutional limitations on taxation. [6]

Meanwhile, the respondent also received a demand for the payment of its deficiency
income tax, value-added tax, premium tax, DST, expanded withholding tax, and
fringe benefit tax for taxable year 2012,[7] and deficiency DST for taxable year
2013.[8]

On December 19, 2014, the respondent commenced Civil Case No. 14-1330 in the
RTC (with prayer for issuance of a temporary restraining order (TRO) or of a writ of
preliminary injunction) for the judicial determination of the constitutionality of
Section 108 and Section 184 of the NIRC with respect to the taxes to be paid by
non-life insurance companies. In its petition, the respondent contended that the
facts of the case must be appreciated in light of the effectivity of Republic Act (R.A.)
No. 1000 I entitled An Act Reducing the Taxes on Life Insurance Policies, whereby
the tax rate for life insurance premiums was reduced from 5% to 2%; and the
pendency of deliberations on House Bill (H.B.) No. 3235 entitled An Act
Rationalizing the Taxes Imposed on Non-Life Insurance Policies, whereby an equal
treatment for both life and non-life companies was being sought as a response to
the supposed inequality generated by the enactment of R.A. No. 10001.

On December 23, 2014, the RTC issued the TRO prayed for by enjoining the BIR, its
agents, representatives, assignees, or any persons acting for and in its behalf from
implementing the provisions of the NIRC adverted to with respect to the FDDA for
the respondent's taxable year 2011, and to the pending assessments for taxable
years 2012 and 2013.

Later, on January 13, 2015, the RTC issued the writ of preliminary injunction.

On May 8, 2015, the RTC rendered the assailed judgment wherein it opined that
although taxes were self-assessing, the tax system merely created liability on the
part of the taxpayers who still retained the right to contest the particular application
of the tax laws; and holding that the exercise of such right to contest was not
considered a breach of the provision itself as to deter the action for declaratory
relief,[9] and decreed thusly:
WHEREFORE, premises considered, the respondent, its agents, representatives, or
any persons acting on its behalf is hereby permanently enjoined from proceeding
with the implementation or enforcement of Sections 108 and 184 of the National
Internal Revenue Code against petitioner Standard Insurance Co., Inc. until the
Congress shall have enacted and passed into law House Bill No. 3235 in conformity
with the provisions of the Constitution.

SO ORDERED.[10]
The petitioner moved for reconsideration of the judgment, but on July 10, 2015 the
RTC denied the motion for reconsideration.[11]

Hence, the petitioner has appealed directly to the Court,[12] stating that:

I.

THE TRIAL COURT ERRED IN TAKING COGNIZANCE OF THE INSTANT CASE

BECAUSE A PETITION FOR DECLARATORY RELIEF IS NOT APPLICABLE TO CONTEST
TAX ASSESSMENTS.
 II.

THE TRIAL COURT ERRED IN TAKING COGNIZANCE OF THE INSTANT CASE

BECAUSE THE PETITION FOR DECLARATORY RELIEF IS FATALLY DEFECTIVE FOR
FAILING TO SATISFY THE BASIC REQUISITES UNDER RULE 63 OF THE RULES OF
COURT.

III.

THE TRIAL COURT ERRED IN ADJUDGING SECTIONS 108 AND 184 OF THE NIRC AS
VIOLATIVE OF THE EQUAL PROTECTION CLAUSE.

IV.

THE TRIAL COURT GRAVELY ERRED IN GRANTING INJUNCTIVE RELIEF IN FAVOR

OF RESPONDENT, THE SAME (I) BEING SPECIFICALLY PROHIBITED BY SECTION
218 OF THE NIRC; AND (II) HAVING BEEN GRANTED WITHOUT FACTUAL OR LEGAL
BASIS.

V.

THE TRIAL COURT ERRED IN ACCORDING THE RELIEF ADJUDGED, GIVEN THAT:
(A) THE RESULTANT REMEDY FALLS OUTSIDE THE PURVIEW OF AN ACTION FOR
DECLARATORY RELIEF; AND (II) IT IS VIOLATIVE OF THE RULE THAT JUDICIAL
DECISIONS MUST FINALLY DETERMINE THE RIGHTS, OBLIGATIONS AND
RESPONSIBILITIES OF PARTIES.[13]
Two substantial issues are presented for resolution. The first is the propriety of the
action for declaratory relief; the other, the legal competence of the RTC to take
cognizance of the action for declaratory relief.

Ruling of the Court

The appeal is meritorious.

1.

The injunctive relief is not available as a remedy to assail the collection of

a tax

The more substantial reason that should have impelled the RTC to desist from
taking cognizance of the respondent's petition for declaratory relief except to
dismiss the petition was its lack of jurisdiction.

We start by reminding the respondent about the inflexible policy that taxes, being
the lifeblood of the Government, should be collected promptly and without
hindrance or delay. Obeisance to this policy is unquestionably dictated by law itself.
Indeed, Section 218 of the NIRC expressly provides that "[n]o court shall have the
authority to grant an injunction to restrain the collection of any national internal
revenue tax, fee or charge imposed by th[e] [NIRC]."[14] Also, pursuant to Section
11[15] of R.A. No. 1125, as amended, the decisions or rulings of the Commissioner of
Internal Revenue, among others, assessing any tax, or levying, or distraining, or
selling any property of taxpayers for the satisfaction of their tax liabilities are
immediately executory, and their enforcement is not to be suspended by any
appeals thereof to the Court of Tax Appeals unless "in the opinion of the Court [of
Tax Appeals] the collection by the Bureau of Internal Revenue or the Commissioner
of Customs may jeopardize the interest of the Government and/or the taxpayer," in
which case the Court of Tax Appeals "at any stage of the proceeding may suspend
the said collection and require the taxpayer either to deposit the amount claimed or
to file a surety bond for not more than double the amount."

In view of the foregoing, the RTC not only grossly erred in giving due course to the
petition for declaratory relief, and in ultimately deciding to permanently enjoin the
enforcement of the specified provisions of the NIRC against the respondent, but
even worse acted without jurisdiction.

2.

Action for declaratory relief was procedurally improper as a remedy

We further indicate that even assuming, arguendo, that the RTC had jurisdiction to
act on the petition in Civil Case No. 14-1330, it nevertheless misappreciated the
propriety of declaratory relief as a remedy.

An action for declaratory relief is governed by Section 1, Rule 63 of the Rules of

Court.[16] It is predicated on the attendance of several requisites, specifically: (1)
the subject matter of the controversy must be a deed, will, contract or other written
instrument, statute, executive order or regulation, or ordinance; (2) the terms of
said documents and the validity thereof are doubtful and require judicial
construction; (3) there must have been no breach of the documents in question;
(4) there must be an actual justiciable controversy or the "ripening seeds" of one
between persons whose interests are adverse; (5) the issue must be ripe for
judicial determination; and (6) adequate relief is not available through other means
or other forms of action or proceeding.[17]

The third, fourth, fifth and sixth requisites were patently wanting.

Firstly, the third requisite was not met due to the subject of the action (i.e. statute)
having been infringed or transgressed prior to the institution of the action.[18] We
observe in this regard that the RTC seemed to believe that the tax assessments
issued had merely created a liability against the respondent as the taxpayer, and
that its suit for declaratory relief was but consistent with protesting the
assessments. The RTC's belief was absolutely devoid of legal foundation, however,
simply because internal revenue taxes, being self-assessing, required no further
assessment to give rise to the liability of the taxpayer.[19]

Specifically, the assessments for DST deficiencies of the respondent for the years
2011, 2012 and 2013, as imposed pursuant to Section 184 of the NIRC were the
subject of the respondent's petition for declaratory relief. Said legal provision
states:
Section 184. Stamp Tax on Policies of Insurance Upon Property. - On all policies of
insurance or other instruments by whatever name the same may be called, by
which insurance shall be made or renewed upon property of any description,
including rents or profits, against peril by sea or on inland waters, or by fire or
lightning, there shall be collected a documentary stamp tax of Fifty centavos
(P0.50) on each Four pesos (P4.00), or fractional part thereof, of the amount of
premium charged: Provided, however, That no documentary stamp tax shall be
collected on reinsurance contracts or on any instrument by which cession or
acceptance of insurance risks under any reinsurance agreement is effected or
recorded.
What was being thereby taxed was the privilege of issuing insurance policies;
hence, the taxes accrued at the time the insurance policies were issued. Verily, the
violation of Section 184 of the NIRC occurred upon the taxpayer's failure or refusal
to pay the correct DST due at the time of issuing the non-life insurance policies.
Inasmuch as the cause of action for the payment of the DSTs pursuant to Section
108[20] and Section 184 of the NIRC accrued upon the respondent's failure to pay
the DST at least for taxable year 2011 despite notice and demand, the RTC could
not procedurally take cognizance of the action for declaratory relief.

Secondly, the apprehension of the respondent that it could be rendered technically

insolvent through the imposition of the iniquitous taxes imposed by Section 108 and
Section 184 of the NIRC,[21] laws that were valid and binding, did not render the
action for declaratory relief fall within the purview of an actual controversy that was
ripe for judicial determination. The respondent was thereby engaging in speculation
or conjecture, or arguing on probabilities, not actualities. Therein lay the
prematurity of its action, for a justiciable controversy refers to an existing case or
controversy that is appropriate or ripe for judicial determination, not one that is
conjectural or merely anticipatory.[22]

Admittedly, the respondent sought in the RTC the determination of its right to be
assessed the correct taxes under Section 108 and Section 184 of the NIRC by
contending said tax provisions to be invalid and unconstitutional for their unequal
treatment of life and non-life insurance policies. The respondent cited R.A. No.
10001 and House Bill No. 3235 in support of its contention. Obviously, the
challenge mounted by the respondent against the tax provisions in question could
be said to be based on a contingency that might or might not occur. This is because
the Congress has not yet addressed the difference in tax treatment of the life and
non-life insurance policies. Under the circumstances, the respondent would not be
entitled to declaratory relief because its right - still dependent upon contingent
legislation - was still inchoate.

Lastly, the respondent's adequate remedy upon receipt of the FDDA for the DST
deficiency for taxable year 2011 was not the action for declaratory relief but an
appeal taken in due course to the Court of Tax Appeals. Instead of appealing in due
course to the CTA, however, it resorted to the RTC to seek and obtain declaratory
relief. By choosing the wrong remedy, the respondent lost its proper and true
recourse. Worse, the choice of the wrong remedy rendered the assessment for the
DST deficiency for taxable year 2011 final as a consequence. As such, the petition
for declaratory relief, assuming its propriety as a remedy for the respondent,
became mooted by the finality of the assessment.

With not all the requisites for the remedy of declaratory relief being present, the
respondent's petition for declaratory relief had no legal support and should have
been dismissed by the RTC.

WHEREFORE, the Court GRANTS the petition for review

on certiorari; ANNULS and SETS ASIDE the decision rendered in Civil Case No.
14-1330 on May 8, 2015 by the Regional Trial Court, Branch 66, in Makati
City; DISMISSES Civil Case No. 14-1330 on the ground of lack of
jurisdiction; QUASHES the writ of preliminary injunction issued against the
Commissioner of Internal Revenue in Civil Case No. 14-1330 for being issued
without jurisdiction; and ORDERS the respondent to pay the costs of suit.

SO ORDERED.

Jardeleza, Tijam, and A. Reyes, Jr.,* JJ., concur.

Gesmundo,** J., on wellness leave.

*
 In lieu of Associate Justice Mariano C. Del Castillo, who inhibited due to close
relations to the lawyer of a party, per the raffle of September 24, 2018.

**
 Additional Member, per Special Order No. 2607 dated October 10, 2018; on
wellness leave.

[1]
 Hon. Commissioner Kim Jacinto-Henares.

[2]
 Rollo, pp. 76-85; penned by Presiding Judge Joselito C. Villarosa.

[3]
 Id. at 73-75.

[4]
 Id. at 76.

[5]
 Id. at 135.

[6]
 Id.

[7]
 Id.

[8]
 Id. at 136.

[9]
 Id. at 76-85.
[10]
 Id. at 85.

[11]
 Id. at 73-75.

[12]
 Id. at 25-68.

[13]
 Id. at 32-33.

[14]
 Angeles City v. Angeles Electric Corporation, G.R. No. 166134, June 29, 2010,
622 SCRA 43, 51-52.

[15]
 Section 11. Who may appeal; effect of appeal. - Any person association or
corporation adversely affected by a decision or ruling of the Collector of Internal
Revenue, the Collector of Customs or any provincial or city Board of Assessment
Appeals may file an appeal in the Court of Tax Appeals within thirty days after the
receipt of such decision or ruling.

No appeal taken to the Court of Tax Appeals from the decision of the Collector of
Internal Revenue or the Collector of Customs shall suspend the payment, levy,
distraint, and or sale of any property of the taxpayer for the satisfaction of his tax
liability as provided by existing law; Provided, however, That when in the opinion of
the Court the collection by the Bureau of Internal Revenue or the Commissioner of
Customs may jeopardize the interest of the Government and/or the taxpayer the
Court at any stage of the proceeding may suspend the said collection and require
the taxpayer either to deposit the amount claimed or to file a surety bond for not
more than double the amount with the Court.

[16]
 Section 1. Who May File Petition. - Any person interested under a deed, will,
contract or other written instrument, or whose rights are affected by a statute,
executive order or regulation, ordinance, or any other governmental regulation
may, before breach or violation thereof, bring an action in the appropriate Regional
Trial Court to determine any question of construction or validity arising, and for a
declaration of his rights or duties, thereunder.

xxxx

[17]
 Republic v. Roque, G.R. No. 204603, September 24, 2013, 706 SCRA 273, 283.

[18]
 Tambunting, Jr. v. Sumabat, G.R. No. 144101, September 16, 2005, 470 SCRA
92, 96.

[19]
 Tupaz v. Ulep, G.R. No. 127777, October 1, 1999, 316 SCRA 118, 126.

[20]
 SECTION 108. Value-added Tax on Sale of Services and Use or Lease of
Properties.-

(A) Rate and Base of Tax. - There shall be levied, assessed and collected, a value-
added tax equivalent to ten percent (10%) of gross receipts derived from the sale
or exchange of services, including the use or lease of properties.

The phrase 'sale or exchange of services' means the performance of all kinds of
services in the Philippines for others for a fee, remuneration or consideration,
including those performed or rendered by construction and service contractors;
stock, real estate, commercial, customs and immigration brokers; lessors of
property, whether personal or real; warehousing services; lessors or distributors of
cinematographic films; persons engaged in milling, processing, manufacturing or
repacking goods for others; proprietors, operators or keepers of hotels, motels,
resthouses, pension houses, inns, resorts; proprietors or operators of restaurants,
refreshment parlors, cafes and other eating places, including clubs and caterers;
dealers in securities; lending investors; transportation contractors on their
transport of goods or cargoes, including persons who transport goods or cargoes for
hire and other domestic common carriers by land, air and water relative to their
transport of goods or cargoes; services of franchise grantees of telephone and
telegraph, radio and television broadcasting and all other franchise grantees except
those under Section 119 of this Code; services of banks, non-bank financial
intermediaries and finance companies; and non-life insurance companies (except
their crop insurances), including surety, fidelity, indemnity and bonding companies;
and similar services regardless of whether or not the performance thereof calls for
the exercise or use of the physical or mental faculties. The phrase 'sale or exchange
of services' shall likewise include:

(1) The lease or the use of or the right or privilege to use any copyright, patent,
design or model, plan, secret formula or process, goodwill, trademark, trade brand
or other like property or right;

(2) The lease or the use of, or the right to use of any industrial, commercial or
scientific equipment;

(3) The supply of scientific, technical, industrial or commercial knowledge or

information;

(4) The supply of any assistance that is ancillary and subsidiary to and is furnished
as a means of enabling the application or enjoyment of any such property, or right
as is mentioned in subparagraph (2) or any such knowledge or information as is
mentioned in subparagraph (3);

(5) The supply of services by a nonresident person or his employee in connection

with the use of property or rights belonging to, or the installation or operation of
any brand, machinery or other apparatus purchased from such nonresident person;

(6) The supply of technical advice, assistance or services rendered in connection

with technical management or administration of any scientific, industrial or
commercial undertaking, venture, project or scheme;

(7) The lease of motion picture films, films, tapes and discs; and
(8) The lease or the use of or the right to use radio, television, satellite
transmission and cable television time.

Lease of properties shall be subject to the tax herein imposed irrespective of the
place where the contract of lease or licensing agreement was executed if the
property is leased or used in the Philippines.

The term 'gross receipts' means the total amount of money or its equivalent
representing the contract price, compensation, service fee, rental or royalty,
including the amount charged for materials supplied with the services and deposits
and advanced payments actually or constructively received during the taxable
quarter for the services performed or to be performed for another person, excluding
value-added tax.

(B) Transactions Subject to Zero Percent (0%) Rate. - The following services

performed in the Philippines by VAT-registered persons shall be subject to zero
percent (0%) rate:

(1) Processing, manufacturing or repacking goods for other persons doing business
outside the Philippines which goods are subsequently exported, where the services
are paid for in acceptable foreign currency and accounted for in accordance with the
rules and regulations of the Bangko Sentral ng Pilipinas (BSP);

(2) Services other than those mentioned in the preceding paragraph, the
consideration for which is paid for in acceptable foreign currency and accounted for
in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas
(BSP);

(3) Services rendered to persons or entities whose exemption under special laws or
international agreements to which the Philippines is a signatory effectively subjects
the supply of such services to zero percent (0%) rate;

(4) Services rendered to vessels engaged exclusively in international shipping; and

(5) Services performed by subcontractors and/or contractors in processing,

converting, or manufacturing goods for an enterprise whose export sales exceed
seventy percent (70%) of total annual production. x x x

[21]
 Rollo, p. 144.

[22]
 Republic v. Roque, supra, note 17, at 284.
  
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THIRD DIVISION
[ G.R. No. 219340. April 28, 2021 ]
COMMISSIONER OF INTERNAL REVENUE, PETITIONER, VS.
STANDARD INSURANCE CO., INC., RESPONDENT.

RESOLUTION

HERNANDO, J.:

For Our Resolution is the Motion for Reconsideration [1] of the November 7, 2018
Decision[2] which granted the Petition for Review on Certiorari[3] of petitioner
Commissioner of Internal Revenue (CIR), which sought the reversal of the May 8,
2015 Decision[4] and the July 10, 2015 Order[5] in Civil Case No. 14-1330 by the
Regional Trial Court (RTC), Branch 66 of Makati City.

The RTC Decision and RTC Order granted respondent Standard Insurance Co. Inc.'s
(Standard Insurance) Petition for Declaratory Relief and permanently enjoined the
CIR and its agents from implementing Sections 108 and 184 of the National
Internal Revenue Code (NIRC) against Standard Insurance until Congress enacts
House Bill No. 3235 (HB 3235) entitled An Act Rationalizing the Taxes Imposed on
Non-Life Insurance Policies into law.[6]

The Antecedent Facts:

Petitioner CIR is the head of the Bureau of Internal Revenue (BIR), a government
agency tasked with the power and duty of assessing and collecting all national
internal revenue taxes, fees, and charges among others. [7] Respondent Standard
Insurance is a domestic corporation duly organized and existing under Philippine
laws and engaged in the business of non-life insurance. [8]

On February 13, 2014, respondent received from the BIR a Preliminary Assessment
Notice (PAN) regarding its liability amounting to P377,038,679.55 arising from a
deficiency in the payment of documentary stamp taxes (DST) for taxable year
2011.[9] Standard Insurance contested the PAN[10] but the CIR nonetheless sent it a
formal letter of demand.[11] Although respondent requested reconsideration,[12] it
received on December 4, 2014 the Final Decision on Disputed Assessment (FDDA)
dated November 25, 2014, declaring its liability for the DST deficiency, including
interest and compromise penalty, totaling P418,830,567.46. [13] On December 11,
2014, it sought reconsideration of the FDDA, and objected to the tax imposed
pursuant to Section 184 of the NIRC as violative of the constitutional limitations on
taxation.[14]

Meanwhile, respondent also received a demand for the payment of its deficiency
income tax, value-added tax (VAT), premium tax, DST, expanded withholding tax,
and fringe benefit tax for taxable year 2012 which respondent protested in its letter
dated December 10, 2014 on the ground that the VAT rate and DST rate imposed
on premiums charged on non-life property insurance pursuant to Sections 108 and
184 of the NIRC are violative of the constitutional limitations on taxation.
[15]
 Respondent also received a demand for payment of deficiency DST for taxable
year 2013.[16]

On December 19, 2014, Standard Insurance commenced Civil Case No. 14-1330 in
the RTC with prayer for issuance of a temporary restraining order (TRO) and a writ
of preliminary injunction (WPI) for the judicial determination of the constitutionality
of Sections 108 and 184 of the NIRC with respect to the taxes charged against the
non-life insurance companies.[17]

In its Petition, the respondent contended that the facts of the case must be
appreciated in light of the effectivity of Republic Act No. 10001 (RA 10001)
entitled An Act Reducing the Taxes on Life Insurance Policies, whereby the tax rate
for life insurance premiums was reduced from 5% to 2%; and the pendency of
deliberations on House Bill 3235, whereby an equal treatment for both life and non-
life companies was being sought as a response to the supposed inequality
generated by the enactment of RA 10001.[18]

Ruling of the Regional Trial Court:

On December 23, 2014, the RTC issued a TRO enjoining the BIR, its agents,
representatives, assignees, or any persons acting for and in its behalf from
implementing the provisions of the NIRC adverted to with respect to the FDDA for
the respondent's taxable year 2011, and to the pending assessments for taxable
years 2012 and 2013.[19]

On January 13, 2015, the RTC issued an Order granting the application for WPI of
respondent and thereby ordering the CIR and his/her representatives to refrain
from further proceeding with the implementation or enforcement of Sections 108
and 184 of the NIRC until further orders, upon posting by respondent of the
requisite bond.[20]
Thereafter, the RTC issued the WPI on January 14, 2015 and an Order on February
18, 2015: (a) dismissing the CIR's motion to set hearing for dismissal of the case
on the ground that the issues contained therein can be resolved simultaneously
with the main case; (b) denying the CIR's motion for reconsideration to the RTC's
issuance of the WPI on January 13, 2015; and (c) denying Standard Insurance's
motion to declare petitioner in default.[21] The RTC Orders dated January 13, 2015
and February 18, 2015 thereafter became the subject of a Petition
for Certiorari filed with the Court of Appeals (CA).

On May 8, 2015, the RTC rendered its Decision holding that although taxes were
self-assessing, the tax system merely created liability on the part of the taxpayers
who still retained the right to contest the particular application of the tax laws; and
holding that the exercise of such right to contest was not considered a breach of
the provision itself as to deter the action for declaratory relief, and decreed thusly.
[22]
 The dispositive portion of the RTC Decision reads:

WHEREFORE, premises considered, the respondent, its agents, representatives, or

any persons acting on its behalf is hereby permanently enjoined from proceeding
with the implementation or enforcement of Sections 108 and 184 of the National
Internal Revenue Code against petitioner Standard Insurance Co., Inc. until the
Congress shall have enacted and passed into law House Bill No. 3235 in conformity
with the provisions of the Constitution.

SO ORDERED.[23]

The CIR moved for reconsideration which the trial court denied for lack of merit in
its July 10, 2015 Order.[24]

Ruling of the Court of Appeals:

On April 27, 2014, petitioner filed a Petition for Certiorari before the CA pursuant to

Rule 65 of the Rules of Court to (a) set aside the Orders dated January 13, 2015
and February 18, 2015 of the RTC granting respondent's application for issuance of
a WPI and subsequent denial of the MR; and (b) dissolve the WPI dated 14 January
2015.[25] The Petition, which was docketed as CA-G.R. SP No. 140403, was later
dismissed by the appellate court in its October 30, 2015 Resolution for failure of the
petitioner to comply with the CA's August 19, 2015 Resolution to submit copies of
pertinent pleadings.[26]

Assailed Decision of the Court:

On September 7, 2015, petitioner filed a Petition for Review on Certiorari before Us

praying for the reversal and setting aside of the RTC Decision and RTC Order on the
following grounds: (a) The RTC erred in taking cognizance of the case because a
Petition for Declaratory Relief is not applicable to contest tax assessments and the
petition is fatally defective for failing to satisfy the basic requisites under Rule 63 of
the Rules of Court; (b) The RTC erred in adjudging Sections 108 and 184 of the
NIRC as violative of the equal protection clause; (c) The RTC gravely erred in
granting injunctive relief in favor of respondent, the same being specifically
prohibited by Section 218 of the NIRC and for having been issued despite the
absence of a clear legal right; and (d) The RTC erred in granting the relief provided
in the RTC Decision since the resultant remedy falls outside the purview of an
action for declaratory relief and it is violative of the rule that judicial decisions must
finally determine the rights, obligations, and responsibilities of parties. [27]

On November 7, 2018, We rendered the assailed Decision granting the Petition for
Review on Certiorari.[28] We ruled that the RTC grossly erred and acted without
jurisdiction in giving due course to the petition for declaratory relief and
permanently enjoining the enforcement of Sections 108 and 184 of the NIRC, in
violation of Section 218 of the NIRC and Section 11 of Republic Act No. 1125. The
dispositive portion of the assailed Decision reads:

WHEREFORE, the Court GRANTS the petition for review

on certiorari; ANNULS and SETS ASIDE the decision rendered in Civil Case No.
14-1330 on May 8, 2015 by the Regional Trial Court, Branch 66, in Makati
City; DISMISSES Civil Case No. 14-1330 on the ground of lack of
jurisdiction; QUASHES the writ of preliminary injunction issued against the
Commissioner of Internal Revenue in Civil Case No. 14-1330 for being issued
without jurisdiction; and ORDERS the respondent to pay the costs of suit.[29]

We opined that respondent's Petition for Declaratory Relief failed to comply with the
requisites for the said action, since the subject provisions, i.e., Sections 108 and
184 of the NIRC have been infringed by respondent prior to the institution of the
action. Moreover, respondent's allegation that it could be rendered insolvent
through the imposition of taxes imposed by Sections 108 and 184 of the NIRC did
not result in the action for declaratory relief becoming an actual controversy ripe for
judicial determination.

Hence, this Motion for Reconsideration.

Respondent argues that the Court erred in not dismissing the Petition outright on
the ground that petitioner committed deliberate and willful commission of forum
shopping, and that the issues raised in the Petition are factual in nature and are
barred under Rule 45 of the Rules of Court. Moreover, respondent alleges that the
RTC has jurisdiction to take cognizance of respondent's action for declaratory relief
and that the latter has fully satisfied the essential requisites of a petition for
declaratory relief under Rule 63 of the Rules of the Court. [30]

Lastly, the respondent argues that the Court erred in disregarding its clear and
unmistakable right to equal protection to uniformity and equitability of taxation, in
relying in Section 218 of the NIRC and in not finding that the RTC has jurisdiction to
issue injunctive writs and the latter lie against the implementation of
unconstitutional statutes, and in finding that the RTC violated the rule that judicial
decisions must finally determine the rights, obligations and responsibilities of the
parties.[31]
 Issues

To dispose of the instant case, the following issues must be resolved:

First, whether the Petition must be dismissed on the ground of forum shopping
and/or non-compliance with the certification against forum shopping requirement;

Second, whether the Petition must be dismissed on the ground of raising issues of
fact, which are barred under a Rule 45 petition;

Third, whether the RTC had the jurisdiction to take cognizance of respondent's
petition for declaratory relief and issue injunctive relief against the implementation
of Sections 108 and 184 of the NIRC; and

Fourth, whether the RTC should have dismissed respondent's petition for
declaratory relief for failure to comply with the essential requisites of a petition for
declaratory relief under Rule 63 of the Rules of Court.

We resolve to deny the motion for reconsideration for lack of merit.

Petitioner is not guilty of forum

shopping and has complied with the
certification against non forum
shopping requirement under
Section 4, Rule 45 of the Rules of
Court.

Forum shopping exists when, as a result of an adverse decision in one forum, or in

anticipation thereof, a party seeks a favorable opinion in another forum through
means other than appeal or certiorari. There is forum shopping when the elements
of litis pendencia are present or where a final judgment in one case will amount
to res judicata in another. They are as follows: (a) identity of parties, or at least
such parties that represent the same interests in both actions, (b) identity of rights
or causes of action, and (c) identity of reliefs sought. [32]

In sum, both actions must involve the same transaction, same essential facts and
circumstances and must raise identical causes of action, subject matter, and issues.
Clearly, forum shopping does not exist where different orders were questioned, two
distinct causes of action and issues were raised, and two objectives were sought. [33]

Under the foregoing test, we find that petitioner did not commit forum shopping in
filing the instant Petition during the pendency of CA-G.R. SP No. 140403 with the
CA.

A careful reading of the allegations of the instant Petition with the Court and the
Petition for Certiorari filed with the CA indicate that the elements of litis
pendencia  are not present. At the outset, petitioner assailed different orders of the
RTC – the first pertaining to interlocutory orders of the RTC in connection with the
grant of the WPI and the other which decided the main action. Moreover, a
comparison of the allegations and reliefs sought in the instant Petition and the
Petition for Certiorari undoubtedly shows that petitioner prayed for different reliefs
and ultimately, sought different objectives.

Being interlocutory in nature, the RTC orders assailed in CA-G.R. SP No. 140403
dealt with the preliminary matter of whether the implementation of Sections 108
and 184 of the NIRC against respondent should be held in abeyance at a stage
when the trial on the merits has yet to be held and the judgment rendered. Thus,
petitioner, in assailing the RTC orders which granted and upheld the WPI in favor of
respondent, merely sought the dissolution of the said writ which prevented
petitioner from implementing Sections 108 and 184 against respondent until further
orders and while the main case had yet to be decided on the merits.

On the other hand, the RTC Order and RTC Decision assailed in the instant Petition
were in the nature of a final judgment or order which disposed of the main case on
the merits. This is so since the Petition for Declaratory Relief was granted, thereby
permanently enjoining petitioner from enforcing Sections 108 and 184 of the NIRC
against respondent until the Congress shall have enacted and passed into law HB
3235 in conformity with the provisions of the Constitution. Being in the nature of a
final judgment, petitioner merely pursued his correct remedy, which was to file a
Petition for Review on Certiorari under Rule 45 of the Rules of Court.

In any event, we note that the issue on forum shopping may be considered moot
once the proliferation of contradictory decisions, which is precisely what the
prohibition on forum shopping seeks to avoid, is no longer possible. [34] In
connection thereto, CA-G.R. SP No. 140403 has already been dismissed by the
appellate court on technical grounds; hence, the danger which the rules on forum
shopping seeks to prevent will no longer materialize in the instant case.

Respondent's claim that petitioner failed to comply with the requirement for a
certification against forum shopping must likewise fail. Section 4, Rule 45 of the
Rules of Court provides that the sworn certification against forum shopping must be
attached to the petition for review on certiorari.[35] In contrast, there is no
requirement that motions for extension of time be accompanied by a certification
against forum shopping.[36]

While the Court is not unaware that petitioner failed to disclose the proceedings in
the CA in the certification against forum shopping attached to its motion for
extension of time to file the Petition, we emphasize that petitioner nevertheless
promptly disclosed the said proceedings when it timely filed the Petition with the
required sworn certification against forum shopping. Thus, we consider the same to
be sufficient compliance with the requirement.

Petition raises only questions of law

that are cognizable through a Rule
45 petition.
It is settled that only questions of law should be raised in a petition for review
on certiorari filed under Rule 45 of the Rules of Court. [37]

A question of law exists when the doubt or controversy concerns the correct
application of law or jurisprudence to a certain set of facts; or when the issue does
not call for an examination of the probative value of the evidence presented, the
truth or falsehood of facts being admitted. A question of fact exists when the doubt
or difference arises as to the truth or falsehood of facts or when the query invites
calibration of the whole evidence considering mainly the credibility of the witnesses,
the existence and relevancy of specific surrounding circumstances, as well as their
relation to each other and to the whole, and the probability of the situation. [38]

Respondent alleges that the Petition raises questions of fact that the Court cannot
resolve without re-evaluating established or undisputed facts on which the trial
court based its ruling. However, an examination of the present petition shows that
petitioner is challenging the RTC's grant of the petition for declaratory relief on the
premise that a petition for declaratory relief is inapplicable to contest tax
assessments; that the petition for declaratory relief failed to comply with the basic
requisites of Rule 63 of the Rules of Court; and the constitutionality of Sections 108
and 184 of the NIRC vis-à-vis the equal protection clause. Moreover, petitioner
assailed the propriety of the RTC's grant of injunctive relief vis-a-vis Section 218 of
the NIRC and the rule that a judicial decision must bring a final determination of
rights, obligations, and responsibilities of parties. These are clearly questions of law
which merely call for an examination and interpretation of the prevailing law and
jurisprudence, and are cognizable by the Court in a petition for review on certiorari.

The RTC acted without jurisdiction

in taking cognizance of the Petition
for Declaratory Relief and issuing
an injunction against the collection
of taxes.

To begin with, Commonwealth Act No. 55 (CA 55) provides that petitions for
declaratory relief do not apply to cases where a taxpayer questions his liability for
the payment of any tax under any law administered by the BIR. Section 1 of CA 55
provides:

Section 1. Section one of Act Numbered Thirty-seven hundred and thirty-six is

hereby amended so as to read as follows:

SECTION 1. Construction. — Any person interested under a deed, contract or other

written instrument, or whose rights are affected by a statute, may bring an action
in a Court of First Instance to determine any question of construction or validity
arising under such deed, contract, instrument or statute and for a declaration of his
rights or duties thereunder: Provided, however, That the provisions of this Act
shall not apply to cases where a taxpayer questions his liability for the
payment of any tax, duty, or charge collectible under any law administered
by the Bureau of Customs or the Bureau of Internal Revenue. (Emphasis
supplied)

The Court has previously clarified that CA 55 has not been repealed by another
statute and remains to be good law.[39] Thus, the courts have no jurisdiction over
petitions for declaratory relief against the imposition of tax liability or validity of tax
assessments.

More importantly, a principle deeply embedded in our jurisprudence is that taxes

being the lifeblood of the government should be collected promptly, without
unnecessary hindrance or delay. In line with this principle, Section 218 of the
NIRC[40] expressly provides that no court shall have the authority to grant an
injunction to restrain the collection of any national internal revenue tax, fee or
charge imposed by the code. An exception to this rule, provided under Section 11
of RA 1125[41], obtains only when in the opinion of the Court of Tax Appeals (CTA)
the collection thereof may jeopardize the interest of the government and/or the
taxpayer.[42]

In the instant case, it is undisputed that respondent only proceeded with its petition
after receiving tax assessments from the BIR and after various requests for
reconsideration, where it notably already raised the alleged unconstitutionality of
Sections 108 and 184 of the NIRC as a ground to contest the tax assessment
against respondent. However, instead of appealing the assessments in the proper
forum, respondent filed with the RTC the Petition for Declaratory Relief with a
prayer for issuance of a TRO and WPI to enjoin the implementation of the
aforementioned provisions while the said petition is pending. In reality,
respondent's Petition for Declaratory Relief is utilized as a vehicle to assail and
prevent the enforcement of the tax assessments by alleging the supposed
unconstitutionality of Sections 108 and 184 of the NIRC. On this basis, the RTC
should have dismissed respondent's petition for lack of jurisdiction.

Thus, we reiterate our statement in the assailed Decision that the RTC acted
without jurisdiction in not only taking cognizance of respondent's petition, but in
issuing an injunction enjoining the BIR from proceeding with the implementation or
enforcement of Sections 108 and 184 of the NIRC against respondent.

Even assuming arguendo that the

RTC had jurisdiction over the
petition, the RTC should have
dismissed respondent's Petition for
Declaratory Relief for failure to
comply with the requisites for the
said action.

A petition for declaratory relief is an action instituted by a person interested in a

deed, will, contract or other written instrument, executive order or resolution, to
determine any question of construction or validity arising from the instrument,
executive order or regulation, or statute and for a declaration of his rights and
duties thereunder.[43] The said action must comply with the following requisites: (1)
the subject matter of the controversy must be a deed, will, contract or other written
instrument, statute, executive order or regulation, or ordinance; (2) the terms of
said documents and the validity thereof are doubtful and require judicial
construction; (3) there must have been no breach of the documents in question;
(4) there must be an actual justiciable controversy or the "ripening seeds" of one
between persons whose interests are adverse; (5) the issue must be ripe for
judicial determination; and (6) adequate relief is not available through other means
or other forms of action or proceeding.[44]

After a review of the records of the instant case, We find no reason to disturb our
finding that the RTC should have dismissed respondent's Petition for Declaratory
Relief for failure to comply with the abovementioned third, fourth, fifth and sixth
requisites.

In connection with the third requisite, the Court in City of Lapu-Lapu v. Philippine
Economic Zone Authority[45] ruled that the trial court should have dismissed
Philippine Economic Zone Authority's Petition for Declaratory Relief for lack of
jurisdiction in view of the City of Lapu Lapu and Province of Bataan's demand for
payment of real property taxes prior to the filing of the petition for declaratory
relief. The Court explained:

We rule that the [Philippine Economic Zone Authority] erred in availing itself of a
petition for declaratory relief against the City. The City had already issued
demand letters and real property tax assessment against the [Philippine
Economic Zone Authority], in violation of the [Philippine Economic Zone
Authority's] alleged tax-exempt status under its charter. The Special
Economic Zone Act of 1995, the subject matter of [Philippine Economic
Zone Authority's] petition for declaratory relief, had already been
breached. The trial court, therefore, had no jurisdiction over the petition
for declaratory relief."[46] (Emphasis supplied)

It is undisputed that respondent had already received assessments from the BIR for
deficiency documentary stamp taxes for the years 2011, 2012, and 2013 and
deficiency VAT for the year 2012, which were imposed pursuant to Sections 184
and 108 of the NIRC respectively, when it filed its Petition for Declaratory Relief
assailing the constitutionality of the said provisions. In view thereof, the RTC should
have already dismissed respondent's Petition for Declaratory Relief for lack of
jurisdiction.

Anent the fourth and fifth requisites, a justiciable controversy refers to an existing
case or controversy that is appropriate or ripe for judicial determination, not one
that is conjectural or merely anticipatory. A question is ripe for adjudication when
the act being challenged has had a direct adverse effect on the individual
challenging it.[47]
In the instant case, respondent's Petition for Declaratory Relief does not present a
justiciable controversy ripe for judicial determination. Respondent's petition failed
to demonstrate that respondent's legal rights are subject of an imminent or
threatened violation that should be prevented by the declaratory relief sought; the
apprehension that its business may be rendered technically insolvent in view of the
continued enforcement of the taxes under Sections 108 and 184 of the NIRC appear
to be merely conjectural and anticipatory.

Moreover, respondent's adequate remedy upon receipt of the FDDA for the DST
deficiency for taxable year 2011 was to file an appeal in due course with the CTA
instead of resorting to a petition for declaratory relief with the RTC. [48] Similarly, the
respondent's adequate remedy in the event of the issuance of a FAN in connection
with its assessments for deficiency VAT for taxable year 2012 was to protest the
same with the BIR and if denied, appeal such denial to the CTA or request for
reconsideration with the CIR.[49] Thus, the sixth requisite is likewise absent. In view
of the absence of the aforementioned requisites, the RTC should have dismissed
respondent's Petition for Declaratory Relief.

All told, this Court finds no reason to overturn the assailed Decision. The assailed
Decision is in accord with law and existing jurisprudence and with due regard to
extant facts and evidence.

WHEREFORE, the instant Motion for Reconsideration is

hereby DENIED with FINALITY for lack of merit.

No further pleadings shall be entertained in this case.

Let entry of final judgment be issued immediately.

SO ORDERED.

Leonen (Chairperson), Inting, Delos Santos, and J. Lopez, JJ., concur.

[1]
 Rollo, pp. 404-472.

[2]
 Id. at 394-403; penned by Chief Justice Lucas P. Bersamin (now a retired
Member of this Court) and concurred in by Associate Justices Francis H. Jardeleza
(now a retired Member of this Court), Noel Gimenez Tijam (now a retired Member
of this Court), and Andres B. Reyes, Jr. (now a retired Member of this Court).
Associate Justice Alexander G. Gesmundo was on wellness leave.

[3]
 Id. at 25-72.

[4]
 Id. at 76-85; penned by Presiding Judge Joselito C. Villarosa.

[5]
 Id. at 73-75.
[6]
 Id. at 73-85.

[7]
 Id. at 26.

[8]
 Id. at 132.

[9]
 Id. at 98.

[10]
 Id. at 103.

[11]
 Id. at 104-108.

[12]
 Id. at 109-115.

[13]
 Id. at 116-120.

[14]
 Id. at 135.

[15]
 Id. at 121-129, 135.

[16]
 Id. at 136.

[17]
 Id. at 395.

[18]
 Id. at 130-160.

[19]
 Id. at 77.

[20]
 Id. at 302-305.

[21]
 Id. at 306-307.

[22]
 Id. at 76-85.

[23]
 Id. at 85.

[24]
 Id. at 73-75.

[25]
 Id. at 297.

[26]
 Id. at 314-315.

[27]
 Id. at 25-71.

[28]
 Id. at 394-403.

[29]
 Id. at 401-402.
[30]
 Id. at 37-44.

[31]
 Id. at 44-56.

[32]
 Polanco v. Cruz, 598 Phil. 953, 958 (2009).

[33]
 Jose v. Javellana, 680 Phil. 13, 24 (2012).

[34]
 Belo Medical Group, Inc. v. Santos, 817 Phil. 381 (2017).

[35]
 RULES OF COURT, Rule 45, sec. 4. It reads:

Section 4. Contents of petition. — The petition shall be filed in eighteen (18)

copies, with the original copy intended for the court being indicated as such by the
petitioner and shall (a) state the full name of the appealing party as the petitioner
and the adverse party as respondent, without impleading the lower courts or judges
thereof either as petitioners or respondents; (b) indicate the material dates
showing when notice of the judgment or final order or resolution subject thereof
was received, when a motion for new trial or reconsideration, if any, was filed and
when notice of the denial thereof was received; (c) set forth concisely a statement
of the matters involved, and the reasons or arguments relied on for the allowance
of the petition; (d) be accompanied by a clearly legible duplicate original, or a
certified true copy of the judgment or final order or resolution certified by the clerk
of court of the court a quo and the requisite number of plain copies thereof, and
such material portions of the record as would support the petition; and (e) contain
a sworn certification against forum shopping as provided in the last
paragraph of section 2, Rule 42. (2a) (Emphasis supplied)

[36]
 Mega-Land Resources and Development Corp. v. C-E Construction Corp., 555
Phil. 591 (2007).

[37]
 RULES OF COURT, Rule 45, sec. 1. It reads:

SECTION 1. Filing of petition with Supreme Court. — A party desiring to appeal

by certiorari from a judgment or final order or resolution of the Court of Appeals,
the Sandiganbayan, the Regional Trial Court or other courts whenever authorized
by law, may file with the Supreme Court a verified petition for review on certiorari.
The petition shall raise only questions of law which must be distinctly set forth.
1a, 2a (Emphasis supplied)

[38]
 Tagulao v. People, G.R. No. 249735, February 3, 2020; citing People v. Dela
Cruz, 776 Phil. 653 (2016).

[39]
 CJH Development Corp. vs. BIR, 595 Phil. 1051, 1057-1058 (2008).

[40]
 NATIONAL INTERNAL REVENUE CODE, sec. 218. It reads:
SECTION 218.  Injunction not Available to Restrain Collection of Tax. — No court
shall have the authority to grant an injunction to restrain the collection of any
national internal revenue tax, fee or charge imposed by this Code.

[41]
 Section 11. Who may appeal; effect of appeal. — Any person association or
corporation adversely affected by a decision or ruling of the Collector of Internal
Revenue, the Collector of Customs or any provincial or city Board of Assessment
Appeals may file an appeal in the Court of Tax Appeals within thirty days after the
receipt of such decision or ruling.
No appeal taken to the Court of Tax Appeals from the decision of the Collector of
Internal Revenue or the Collector of Customs shall suspend the payment, levy,
distraint, and/or sale of any property of the taxpayer for the satisfaction of his tax
liability as provided by existing law; Provided, however, That when in the opinion
of the Court the collection by the Bureau of Internal Revenue or the
Commissioner of Customs may jeopardize the interest of the Government
and/or the taxpayer the Court at any stage of the proceeding may suspend
the said collection and require the taxpayer either to deposit the amount
claimed or to file a surety bond for not more than double the amount with
the Court (Emphasis supplied).

[42]
 Angeles City v. Angeles Electric Corporation, 636 Phil. 43, 51-52 (2010).

[43]
 Commission on Audit v. Pampilo, Jr., G.R. Nos. 188760, 189060 & 189333, June
30, 2020.

[44]
 Republic v. Roque, 718 Phil. 294, 304 (2013).

[45]
 748 Phil. 473 (2014).

[46]
 Id. at 515.

[47]
 Barrio Balagbag of Pasay City Neighborhood Association, Inc. v. Office of the
President, G.R. No. 230204 (2019).

[48]
 Section 3.1.4, Revenue Regulation (RR) No. 12-1999, as amended by RR 18-
2013.

[49]
 Id.

 
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