Surigao Consolidated Mining v. Administrador de Rentas Internas
REITERATIONFacts
The Antecedents: Surigao Consolidated Mining Co., Inc. (Surigao) filed a complaint against the Collector of Internal Revenue (CIR) for the reimbursement of P17,051.14, which it alleged was excessively collected as ad valorem tax on gold extracted from its mining properties. Procedural History: On February 28, 1952, the Court of First Instance (CFI) of Manila, upon being informed of the creation of the Board of Tax Appeals (BTA), ordered the Solicitor General to submit a memorandum. On March 12, 1952, the CFI, believing that the BTA, created by Executive Order No. 401-A, Series of 1951, had exclusive jurisdiction over the case, dismissed the complaint without costs. Surigao appealed this order to the Supreme Court. The Petition: Surigao appealed the CFI's order of dismissal, arguing that the CFI erred in divesting itself of jurisdiction.
Issue(s)
Whether the President, through an Executive Order, can divest courts of first instance of their jurisdiction to hear cases involving tax refunds.
Ruling
The Supreme Court revoked the order of dismissal and ordered the return of the case to the court of origin for further proceedings. No costs were awarded.
Ratio Decidendi
On Issue 1: The Supreme Court ruled that Republic Act (RA) No. 422, which authorizes the President to reorganize various offices of the executive department, does not extend to the judicial branch. The fundamental power to "define, prescribe y distribuir la jurisdiccion de los varios tribunales" (define, prescribe and distribute the jurisdiction of the various courts) is exclusively vested in Congress, as mandated by Title VIII, Article 2 of the Philippine Constitution. Therefore, when the President, through Executive Order No. 401-A, series of 1951, provided that the Tax Appeals Board would have exclusive jurisdiction to hear appeals against resolutions of the Administrator of Internal Revenue concerning refunds of unduly collected taxes, he effectively stripped the Courts of First Instance of their jurisdiction over such cases. This executive action was deemed contrary to the express provision of the Constitution, a principle that was previously affirmed in Universidad de Sto. Tomas contra Junta de Apelacion sobre Impuestos (G.R. No. L-5701, junio 23, 1953). The Court emphatically declared that it is dangerous to permit the Chief Executive to change the jurisdiction of the courts by means of executive orders, as this would invest him with a power he does not possess under the fundamental law.
Main Doctrine
An Executive Order issued by the President cannot divest the Courts of First Instance of their exclusive jurisdiction to hear and decide cases involving claims for reimbursement of taxes unduly collected, as such power is vested by the Constitution in Congress.