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Doctrine of Equitable Recoupment: Collector vs. University of Sto. Tomas, 104 Phil 1062

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24 views2 pages

Doctrine of Equitable Recoupment: Collector vs. University of Sto. Tomas, 104 Phil 1062

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‭Doctrine of Equitable Recoupment‬

‭Collector vs. University of Sto. Tomas, 104 Phil 1062‬

‭FACTS‬ ‭ISSUES‬ ‭RULING‬

I‭ n‬ ‭this‬ ‭case,‬ ‭the‬ ‭University‬ ‭of‬ ‭Santo‬ ‭Tomas‬ I‭ s‬ ‭Executive‬ ‭Order‬ ‭No.‬ ‭401-A,‬ ‭which‬ ‭ he‬ ‭Supreme‬ ‭Court‬ ‭ruled‬ ‭that‬ ‭Executive‬
T
‭(UST)‬ ‭was‬ ‭the‬ ‭petitioner,‬ ‭and‬ ‭the‬ ‭Board‬ ‭of‬ ‭establishes‬ ‭the‬ ‭Board‬ ‭of‬ ‭Tax‬ ‭Appeals‬ ‭and‬ ‭Order‬ ‭No.‬ ‭401-A‬ ‭is‬ ‭null‬ ‭and‬ ‭void‬ ‭to‬ ‭the‬
‭Tax‬‭Appeals‬‭was‬‭the‬‭respondent.‬‭The‬‭dispute‬ ‭grants‬ ‭it‬ ‭exclusive‬ ‭jurisdiction‬ ‭over‬ ‭certain‬ ‭extent‬ ‭that‬ ‭it‬ ‭interferes‬ ‭with‬ ‭the‬‭jurisdiction‬
‭revolved‬ ‭around‬ ‭an‬ ‭income‬ ‭tax‬ ‭assessment‬ ‭tax‬ ‭matters,‬ ‭valid‬ ‭in‬ ‭so‬ ‭far‬ ‭as‬ ‭it‬ ‭deprives‬ ‭of‬‭the‬‭courts‬‭of‬‭first‬‭instance‬‭in‬‭cases‬‭arising‬
‭made‬ ‭by‬ ‭the‬ ‭Collector‬ ‭of‬ ‭Internal‬ ‭Revenue,‬ ‭courts‬‭of‬‭first‬‭instance‬‭of‬‭their‬‭jurisdiction‬‭to‬ ‭under‬ ‭internal‬ ‭revenue‬ ‭law,‬ ‭customs‬ ‭law,‬
‭which‬ ‭assessed‬ ‭UST‬ ‭a‬ ‭total‬ ‭of‬ ‭PHP‬ ‭hear cases involving the recovery of taxes?‬ ‭and‬ ‭assessment‬ ‭law.‬ ‭However,‬ ‭the‬ ‭Order‬ ‭is‬
‭574,811.41‬ ‭for‬ ‭the‬ ‭fiscal‬ ‭years‬ ‭1946‬ ‭to‬ ‭valid‬ ‭concerning‬ ‭its‬ ‭provisions‬ ‭affecting‬ ‭the‬
‭1950.‬ ‭organization‬ ‭and‬ ‭administrative‬ ‭functions‬ ‭of‬
‭the Board of Tax Appeals.‬
‭ ST,‬ ‭a‬ ‭private‬ ‭non-stock‬ ‭corporation‬
U
‭established‬ ‭for‬ ‭educational‬ ‭purposes,‬ ‭ he‬ ‭Court's‬ ‭decision‬ ‭was‬ ‭grounded‬ ‭in‬ ‭the‬
T
‭received‬ ‭an‬ ‭initial‬ ‭notification‬ ‭on‬ ‭July‬ ‭26,‬ ‭interpretation‬‭of‬‭Republic‬‭Act‬‭No.‬‭422,‬‭which‬
‭1950,‬ ‭indicating‬ ‭it‬ ‭owed‬ ‭PHP‬ ‭718,514.27‬ ‭in‬ ‭authorized‬ ‭the‬ ‭President‬ ‭to‬ ‭reorganize‬
‭income‬ ‭tax,‬ ‭which‬ ‭included‬ ‭a‬ ‭25%‬ ‭executive‬ ‭departments‬ ‭to‬‭enhance‬‭efficiency‬
‭surcharge.‬‭After‬‭removing‬‭the‬‭surcharge,‬‭the‬ ‭and‬ ‭economy.‬ ‭The‬ ‭Court‬ ‭held‬ ‭that‬ ‭this‬
‭assessed‬ ‭amount‬ ‭was‬ ‭reduced.‬ ‭UST‬ ‭paid‬ ‭a‬ ‭authority‬‭was‬‭limited‬‭to‬‭reorganization‬‭within‬
‭portion‬‭of‬‭the‬‭tax‬‭under‬‭protest‬‭and‬‭secured‬ ‭the‬ ‭executive‬ ‭branch‬ ‭and‬ ‭did‬ ‭not‬ ‭extend‬ ‭to‬
‭the‬ ‭remaining‬ ‭balance‬ ‭through‬ ‭a‬‭real‬‭estate‬ ‭altering‬ ‭the‬ ‭jurisdiction‬ ‭of‬ ‭judicial‬ ‭courts,‬ ‭a‬
‭mortgage.‬ ‭power‬ ‭exclusively‬ ‭vested‬‭in‬‭Congress‬‭by‬‭the‬
‭Constitution (Article VIII, Section 2).‬
‭ ubsequently,‬ ‭UST‬ ‭sought‬ ‭reconsideration‬
S
‭from‬ ‭the‬ ‭Secretary‬ ‭of‬ ‭Finance,‬ ‭who‬ ‭ he‬ ‭Court‬ ‭emphasized‬ ‭that‬ ‭while‬ ‭the‬
T
‭instructed‬ ‭them‬ ‭to‬ ‭file‬ ‭a‬ ‭petition‬ ‭for‬ ‭review‬ ‭President‬ ‭could‬ ‭create‬ ‭the‬ ‭Board‬ ‭of‬ ‭Tax‬
‭with‬ ‭the‬ ‭Board‬ ‭of‬ ‭Tax‬ ‭Appeals‬ ‭under‬ ‭Appeals‬ ‭as‬ ‭part‬ ‭of‬ ‭the‬ ‭Department‬ ‭of‬
‭Executive‬ ‭Order‬ ‭No.‬ ‭401-A.‬ ‭While‬ ‭UST‬ ‭Finance,‬ ‭he‬ ‭could‬ ‭not‬ ‭deprive‬ ‭courts‬ ‭of‬‭first‬
‭complied,‬ ‭it‬ ‭also‬ ‭challenged‬ ‭the‬ ‭Board's‬ ‭instance‬ ‭of‬ ‭their‬ ‭jurisdiction‬ ‭over‬ ‭tax‬ ‭cases.‬
‭jurisdiction,‬‭arguing‬‭that‬‭the‬‭Executive‬‭Order‬ ‭This‬ ‭would‬ ‭constitute‬ ‭an‬ ‭overreach‬ ‭of‬
‭unlawfully‬ ‭deprived‬ ‭the‬ ‭courts‬ ‭of‬ ‭first‬ ‭executive‬ ‭power‬ ‭and‬ ‭an‬ ‭encroachment‬ ‭on‬
‭instance‬ ‭of‬ ‭their‬ ‭jurisdiction‬ ‭over‬ ‭tax‬ ‭legislative‬ ‭authority.‬ ‭Consequently,‬ ‭the‬
‭recovery cases.‬ ‭provisions‬ ‭of‬ ‭Executive‬ ‭Order‬ ‭No.‬ ‭401-A‬
‭related‬‭to‬‭"Court‬‭Review‬‭of‬‭Board‬‭Decisions"‬
‭ he‬ ‭Board‬ ‭of‬ ‭Tax‬ ‭Appeals‬ ‭denied‬ ‭UST's‬
T ‭were declared null and void.‬
‭motion‬ ‭and‬ ‭assumed‬ ‭jurisdiction‬ ‭over‬ ‭the‬
‭matter,‬ ‭prompting‬ ‭UST‬ ‭to‬ ‭file‬ ‭a‬ ‭petition‬ ‭for‬ I‭ n‬‭this‬‭case,‬‭the‬‭Supreme‬‭Court‬‭also‬‭invoked‬
‭certiorari‬ ‭and‬ ‭prohibition‬ ‭to‬ ‭prevent‬ ‭the‬ ‭the‬ ‭doctrine‬ ‭of‬ ‭equitable‬ ‭recoupment,‬‭which‬
‭Board‬ ‭from‬ ‭hearing‬ ‭the‬ ‭case.‬ ‭The‬ ‭Supreme‬ ‭allows‬ ‭a‬ ‭taxpayer‬ ‭to‬ ‭claim‬ ‭a‬ ‭refund‬ ‭for‬
‭Court granted the injunction.‬ ‭ verpaid‬ ‭taxes‬ ‭even‬ ‭if‬ ‭the‬ ‭statute‬ ‭of‬
o
‭limitations‬ ‭for‬ ‭filing‬ ‭a‬ ‭refund‬ ‭has‬ ‭expired.‬
‭The‬ ‭Court‬‭recognized‬‭that‬‭UST‬‭had‬‭overpaid‬
‭its‬ ‭taxes,‬ ‭and‬ ‭applying‬ ‭the‬ ‭doctrine‬ ‭of‬
‭equitable‬ ‭recoupment‬ ‭would‬ ‭prevent‬ ‭unjust‬
‭enrichment‬ ‭at‬ ‭the‬ ‭expense‬ ‭of‬ ‭the‬ ‭taxpayer.‬
‭This‬ ‭principle‬ ‭supports‬ ‭fairness‬ ‭in‬ ‭tax‬
‭assessments,‬ ‭ensuring‬ ‭that‬ ‭taxpayers‬ ‭are‬
‭not‬ ‭unduly‬ ‭burdened‬ ‭by‬ ‭improper‬ ‭tax‬
‭assessments.‬

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