Venus v. Posadas
REITERATIONFacts
The Antecedents: Bartolome Venus instituted an action on July 27, 1928, to recover P1,641.60 paid as internal revenue tax under protest on March 19, 1924. Procedural History: The Court of First Instance ruled in favor of the plaintiff, ordering the Collector of Internal Revenue to refund the amount paid under protest. The Petition: The Collector of Internal Revenue appealed the decision, primarily relying on the defense of prescription.
Issue(s)
Whether the action to recover the internal revenue tax paid under protest has prescribed. Whether the prescriptive period under Section 1579 of the Administrative Code is absolute.
Ruling
The Supreme Court reversed the decision of the lower court, holding that the right to recover the tax had prescribed. The defendant, Juan Posadas, Jr., as Collector of Internal Revenue, was absolved from the complaint.
Ratio Decidendi
On the issue of prescription: The Court held that more than four years elapsed from the time the tax was paid under protest until the action to recover was instituted. Section 1579 of the Administrative Code explicitly provides a period of only two years after the payment of an internal revenue tax under protest within which an action for its recovery may be brought. The Court found no reason to deviate from this statutory period. The defense of prescription was therefore sustained, leading to the reversal of the lower court's decision. On the nature of the prescriptive period: The Court clarified that the two-year period provided in Section 1579 of the Administrative Code is absolute and not merely permissive. This provision is derived from the United States Revised Statutes, and American courts have consistently applied such prescriptive periods. The Court found no justification for ignoring this statutory limitation in the Philippine jurisdiction. Therefore, the lower court's reliance on the case of Zaragoza vs. Alfonso was misplaced, as that case involved a different type of tax and the issue of prescription was not raised.
Main Doctrine
The two-year prescriptive period provided in Section 1579 of the Administrative Code for the recovery of internal revenue taxes paid under protest is absolute and must be strictly applied.