BANK OF THE PHILS. vs. TRINIDADGR No. 16014

FACTS:P & CO. executed a chattel mortgage upon certain personalty in favor of B. The chattel mortgage was duly registered and said personalty remained in the possession of the mortgagor, P & CO. Subsequently, and while said chattel mortgage was subsisting, it was discovered that P & CO. owed the government a certain amount by way of taxes, and the Collector of Internal Revenue seized and distrained the personalty mortgaged to B, and had the same advertised for sale to satisfy said amount. To prevent the sale, B paid said taxes under protest and brought an action against the Collector of Internal Revenue to recover the amount so paid.

HELD:Judgment for the plaintiff. The personal property mortgaged by P & CO. to B was not subject to seizure for the payment of taxes due from P & CO. The property used in the business or occupation, referred to in section 149 of Act No. 2339 (Sec. 1558, Act No. 2711), can only mean property belonging to the owner of the business or occupation. A chattel mortgage being a conditional sale of personal property the dominion with respect to the mortgaged personalty rests with the mortgagee, so long as the mortgage exists. Such property ceases to be the property of the debtor for the reason that it has become the property of the creditor, in like manner as the dominion of a thing sold is transferred to the purchaser and ceases to belong to the vendor from the moment of the delivery thereof as a result of the sale.

CIR vs. NLRC GR No. 74965

Facts: On January 12, 1984, the CIR demanded payment from private respondent Maritime Company of the Philippines of deficiency common carriers tax, fixed tax, 6% commercial brokers tax, documentary stamp tax, income tax and withholding tax totaling P17,284,882.45. The assessment became final and executory, and with private respondents failure to pay the tax liabilities, the CIR issued warrants of distraint of personal property and levy of real property which were duly served on January 23, 1985. On April 16, 1985, a receipt of goods, articles and things was executed covering, among others, 6 barges as proof of constructive distraint of property but the same was not signed by any representative of private respondent because of the refusal of the persons actually in possession of the barges.

It appeared that 4 of the barges constructively distrained were also levied upon by a deputy sheriff of Manila on July 20, 1985 and sold at public auction to satisfy a judgment for unpaid wages and other benefits of employees of private respondent.

The National Internal Revenue Code provides for the collection of delinquent taxes by any of the following remedies: (a) distraint of personal property or levy of real property of the delinquent taxpayer and (b) civil or criminal action.

Constructive distraint of the property of a taxpayer. To safeguard the interest of the Government, the Commissioner of Internal Revenue may place under constructive distraint the property of a delinquent taxpayer or any taxpayer who, in his opinion, is retiring from any business subject to tax, or intends to leave the Philippines, or remove his property therefrom, or hide or conceal his property, or perform any act tending to obstruct the proceedings, for collecting the tax due or which may be due from him.

It is settled that the claim of the government predicated on a tax lien is superior to the claim of a private litigant predicated on a judgment. The tax lien attaches not only from the service of the warrant of distraint of personal property but from the time the tax became due and payable. Besides, the distraint on the subject properties of the Maritime Company of the Philippines as well as the notice of their seizure were made by petitioner, through the Commissioner of the Internal Revenue, long before the writ of the execution was issued by the Regional Trial Court of Manila, Branch 31. There is no question then that at the time the writ of execution was issued, the two (2) barges, MPC-1 and MCP-4, were no longer properties of the Maritime Company of the Philippines. The power of the court in execution of judgments extends only to properties unquestionably belonging to the judgment debtor. Execution sales affect the rights of the judgment debtor only, and the purchaser in an auction sale acquires only such right as the judgment debtor had at the time of sale. It is also well-settled that the sheriff is not authorized to attach or levy on property not belonging to the judgment debtor.

CIR vs. BATANGAS TRANSPORTATION CORP.GR No. L-9692

HELD:

law defined the term "corporation" as including partnerships no matter how created or organized, thereby indicating that "a joint venture need not be undertaken in any of the standard forms, or in conformity with the usual requirements of the law on partnerships, in order that one could be deemed constituted for purposes of the tax on corporations";

we believe and hold that the Joint Emergency Operation or sole management or joint venture in this case falls under the provisions of section 84 (b) of the Internal Revenue Code, and consequently, it is liable to income tax provided for in section 24 of the same code.

that the tax laws provide for a prescriptive period within which the tax collectors may make assessments and reassessments in order to collect all the taxes due to the Government, and that if the Collector of Internal Revenue is not allowed to amend his assessment before the Court of Tax Appeals, and since he may make a subsequent reassessment to collect additional sums within the same subject of his original assessment, provided it is done within the prescriptive period, that would lead to multiplicity of suits which the law does not encourage