G.R. No. 271701 - Dissenting Opinion

G.R. No. 271701, May 6, 2025,
♦ Decision, Zalameda, [J]
♦ Concurring and Dissenting Opinion, Leonen, [J]
♦ Separate Concurring Opinion, Caguioa, [J]
♦ Dissenting Opinion, Lazaro-Javier, [J]
♦ Concurring and Dissenting Opinion, Inting, [J]
♦ Dissenting Opinion, Lopez, [J]

COMMISSIONER OF INTERNAL REVENUE, PETITIONER,
vs.
NIPPON EXPRESS PHILIPPINES CORPORATION, RESPONDENT.

The majority concluded that this Court has the exclusive jurisdiction over petitions for certiorari against interlocutory orders of the Court of Tax Appeals (CTA) acting in divisions.

The CTA is a highly specialized body created specifically to review tax cases. It exercises its adjudicative powers, functions, and duties en banc or in Divisions.1 The tax court acts as an appellate court in reviewing by appeal decisions, resolutions, or orders of any of its divisions, among other things.2 To effectively exercise its appellate jurisdiction, therefore, the CTA sitting en banc must have the authority to take cognizance of petitions for certiorari imputing grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any of its divisions in aid of its appellate jurisdiction. To rule otherwise would lead to an absurd situation where one court decides an appeal in the main case while another court rules on an incident in the very same case.3

Briefly, the petition for review on certiorari4 filed by the Commissioner of Internal Revenue (CIR) challenges the August 29, 2023 Decision5 and January 26, 2024 Resolution6 of the CTA En Banc in CTA EB Case No. 2580 that dismissed the CIR's petition for lack of jurisdiction. The CIR questioned the interlocutory rulings of the CTA Division before the CTA En Banc, which declared the CIR in default for its failure to file a hard copy of the Answer to the petition filed by Nippon Express Philippines Corporation (Nippon Express) and allowed Nippon Express to present its evidence ex parte.

At the onset, the case is already moot, considering the developments on the main case and the subject matter of the present petition for certiorari. The records of the CTA would show that the CTA Division promulgated a Decision on September 28, 2023, denying Nippon Express's petition for lack of merit, and a Resolution on January 29, 2024 that denied Nippon Express' motion for reconsideration on the main case.7

A case becomes moot when it ceases to present a justiciable controversy by supervening events so that an adjudication of the case or a declaration on the issue would be of no practical value or use.8 In such an instance, there is no actual substantial relief to which a petitioner would be entitled and which would be negated by the dismissal of the petition.9 Accordingly, courts generally decline jurisdiction over such a case or dismiss it on the ground of mootness since the judgment will not serve any useful purpose or have any practical legal effect because, in the nature of things, it cannot be enforced.10

Consequently, there is no more justiciable controversy on the propriety of allowing the presentation of Nippon Express's evidence ex parte. The CTA Division already decided on the main case.

In any case, the Court may decide cases otherwise moot and academic if it is capable of repetition yet evading review and to formulate controlling principles to guide the bench, the bar, and the public,11 as in this case.

Certiorari power of the CTA En Banc over decisions, resolutions, or orders of the CTA Division

There is no question, the July 21, 2021 and November 17, 2021 Resolutions of the CTA Division are interlocutory orders since they did not finally dispose of the case on the merits.12 The CTA Division merely declared the CIR in default for its failure to file a hard copy of the Answer to the petition filed by Nippon Express and allowed Nippon Express to present its evidence ex parte.

The issue now is this: which court has jurisdiction over interlocutory orders of the CTA Division?

Jurisdiction is defined as the power and authority of a court to hear, try, and decide a case.13 It is never presumed but is conferred by law.14 As early as in Ker & Co., Ltd. v. Court of Tax Appeals,15 the Court emphasized that "the Tax Court is a court of special jurisdiction. As such, it can only take cognizance of such matters as are clearly within its jurisdiction."

Section 2, Rule 4 of A.M. No. 05-11-07-CTA16 or the Revised Rules of the Court of Tax Appeals (RRCTA) enumerates cases cognizable by the CTA En Banc, to wit:

Interestingly, the RRCTA merely provides for the appellate jurisdiction of the CTA En Banc over decisions, resolutions, or orders of the CTA Division, whether in the exercise of their original or appellate jurisdiction. On the other hand, Section 2, Rule 2 of the RRCTA provides for the tax court en banc's original jurisdiction:

The Court shall sit en banc in the exercise of its administrative, ceremonial and non-adjudicative functions.

Indeed, the RRCTA is silent on whether the CTA En Banc also exercises original jurisdiction over interlocutory orders or judgments of one of its divisions. Surely, the proper remedy to question an interlocutory order on the ground of grave abuse of discretion amounting to lack or excess of jurisdiction is not an appeal, but a special civil action for certiorari under Rule 65 of the Rules of Court. Section 1, Rule 41 of the Rules of Court provides:

The Court has previously ruled against the power of the CTA En Banc to issue writs of certiorari on interlocutory orders of the CTA Division.

In Commissioner of Internal Revenue v. Court of Tax Appeals and CBK Power Company Limited,17 the Court ruled that an order of the CTA Division declaring a party in default is an interlocutory order properly cognizable by the Supreme Court under Rule 65. Thus, in Commissioner of Internal Revenue v. Court of Tax Appeals (First Division) and Pilipinas Shell Petroleum Corporation,18 we held that the CTA En Banc has no jurisdiction over the CTA Second Division's denial of the Omnibus Motion, being an interlocutory order. Further, in Commissioner of Internal Revenue v. Court of Tax Appeals-Third Division and City Super, Incorporated,19 the questioned CTA Division Resolutions partially disposed of the issue in the main case. These are interlocutory orders that are properly subject to a Rule 65 petition before the Supreme Court. The Court reiterated this rule in the recent case of MT Alpine Magnolia v. Commissioner of Bureau of Customs.20

In all these cases, the Court ruled against the authority of the CTA En Banc to take cognizance of certiorari petitions on interlocutory orders of the CTA Division for two reasons. First, Republic Act (RA) No. 928221 and the RRCTA do not provide for such certiorari jurisdiction of the CTA En Banc. Second, a petition for certiorari is a special civil action raising issues of lack or excess of jurisdiction; thus, it cannot be filed in the same tribunal whose actions are being assailed. Instead, it is cognizable by a higher tribunal, which, in the case of the CTA, is the Supreme Court.22 This is because, like this Court, the Court of Appeals, and the Sandiganbayan, the CTA is a collegial court. There can be no hierarchy in a collegial court between its divisions and en banc. We explained the reason d'etre of the prohibition in Commissioner of Internal Revenue v. Kepco Ilijan Corp. (Kepco):23

It is the same situation among other collegial courts. To illustrate, the Supreme Court or the Court of Appeals may sit and adjudicate cases in divisions consisting of only a number of members, and such adjudication is already regarded as the decision of the Court itself. It is provided for in the Constitution, Article VIII, Section 4 (1) and BP Blg. 129, Section 4, respectively. The divisions are not considered separate and distinct courts but are divisions of one and the same court; there is no hierarchy of courts within the Supreme Court and the Court of Appeals, for they each remain as one court notwithstanding that they also work in divisions. The Supreme Court sitting en banc is not an appellate court vis-a-vis its divisions, and it exercises no appellate jurisdiction over the latter. As for the Court of Appeals en banc, it sits as such only for the purpose of exercising administrative, ceremonial, or other non-adjudicatory functions.

In turn, the CTA Division's final judgments, resolutions, or orders are cognizable by the CTA En Banc by appeal or petition for certiorari. Thus, in Commissioner of Internal Revenue v. Court of Tax Appeals Second Division and QL Development Inc.,24 we held that the CIR erroneously filed a certiorari petition with the Court since the CTA Division Resolutions being questioned were final judgments on the deficiency assessment. The CIR should have filed an appeal through a petition for review with the CTA En Banc. In People v. Court of Tax Appeals-Third Division, Jacinto C Ligot and Erlinda Y Ligot,25 the Court declared that the CTA En Banc has jurisdiction over a Rule 65 petition assailing the CTA Division's judgment of acquittal. Similarly, in People v. Court of Tax Appeals, Second Division and Joselito B. Rap,26 we ruled that it is the CTA En Banc that has the certiorari power over the Decision and Resolution of the CTA Division acquitting the accused:

While certiorari is generally a proper remedy in questioning an order of acquittal, the BIR erred when it filed the present petition directly before the Court. The correct recourse in this case would have been to initiate certiorari proceedings before the CTA En Banc.

It is basic that the CTA En Banc has appellate jurisdiction over decisions, resolutions, or orders on motions for reconsideration or new trial rendered by a CTA Division in cases involving tax crimes. Consequently, the CTA En Banc is also vested with the power to issue writs of certiorari when necessary, in aid of such appellate jurisdiction. In other words, the Court has no power to take cognizance of the present petition taken that jurisdiction over certiorari petitions assailing a CTA Division ruling is vested with the CTA En Banc.

On the other hand, in Kepco, the issue was whether the CTA En Banc may annul the final and executory decision of one of its divisions. We ruled in the negative, applying the rule on the immutability of judgments and stating that there is no hierarchy between the en banc and any of its divisions. Thus:

Meanwhile, the Court recognized the CTA En Banc's inherent power to issue writs of certiorari against interlocutory orders of the Regional Trial Court (RTC) in a local tax case in aid of its exclusive appellate jurisdiction for the first time in City of Manila v. Grecia-Cuerdo27 (Grecia-Cuerdo), viz.:

Our ruling in Grecia-Cuerdo finds its basis in the judicial power of the Supreme Court to determine grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government28 as well as the exclusive jurisdiction of the CTA to resolve all tax problems. We emphasized, however, that the CTA's power to issue writs of certiorari must be in aid of its appellate jurisdiction.

In Breslin v. Luzon Stevedoring Co.,29 the Court ruled that the remedy is in aid of the court's appellate jurisdiction when it "has jurisdiction to review, by appeal or writ of error, the final orders or decisions" of the particular court or tribunal. We reiterated this principle in Bulilis v. Nuez30 and Galang, Jr. v. Geronimo.31 In J.M. Tuason & Co., Inc. v. Jaramillo,32 we clarified that "only in those cases where the parties have a right to appeal to that Court" that the writ of certiorari may be issued for the "said court could not validly entertain the petitions filed in these cases unless the judgments and orders of execution complained of could have been appealed" to them. Grecia-Cuerdo continues:

Elsewise stated, if the subject matter of the principal action falls within the exclusive appellate jurisdiction of the CTA, whether acting en banc or any of its divisions, then the CTA can issue writs of certiorari in aid of its appellate jurisdiction.

The CTA En Banc has jurisdiction over petitions for certiorari assailing the interlocutory order or judgment issued by the CTA Division.

A writ of certiorari is an extraordinary remedy to correct errors of jurisdiction of judicial and quasi-judicial bodies as well as grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the government. Section 1, Rule 65 of the Rules of Court reads:

Section 1. Petition for certiorari. — When any tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of its or his jurisdiction, and there is no appeal, or any plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered annulling or modifying the proceedings of such tribunal, board or officer, and granting such incidental reliefs as law and justice may require.

The petition shall be accompanied by a certified true copy of the judgment, order or resolution subject thereof, copies of all pleadings and documents relevant and pertinent thereto, and a sworn certification of non-forum shopping as provided in the third paragraph of Section 3, Rule 46.

Certiorari, as a special civil action, is an original action invoking the original jurisdiction of a court to annul or modify the proceedings of a tribunal, board or officer exercising judicial or quasi-judicial functions. It is an original and independent action not part of the trial or the proceedings on the original case.33 Simply stated, a certiorari petition is not a continuation of the appellate process borne out of the original case but a separate action focused on actions in excess or wanting of jurisdiction.34

The writ has been characterized as a "supervisory writ" used by superior courts to keep lower courts within the bounds of their jurisdictions, thereby ensuring orderliness in lower courts' rulings.35 It is issued by a higher court against the proceedings of the lower courts under its control and supervision.36 Thus, in Garcia v. De Jesus,37 the Court held that the COMELEC does not have certiorari power over the Regional Trial Court, although exercising appellate jurisdiction since the COMELEC is not a judicial tribunal and merely exercises administrative and quasi-judicial powers. Likewise, in Department of Agrarian Reform Adjudication Board v. Lubrica,38 we ruled that the DARAB does not have the power to correct errors of jurisdiction over the RARAD since its supervisory authority is only limited to administrative supervision and/or control.

On the other hand, the CTA En Banc may be considered a "higher" or "superior" court than its Divisions in view of the express grant of jurisdiction to review by appeal decisions, orders, or resolutions of the Divisions. Under the CTA's present set-up, the Division's decision, order, or resolution in a civil or criminal case is always appealable to the en banc.39 Unlike the Court of Appeals, or the Supreme Court, the CTA sitting en banc exercises appellate jurisdiction over any of its divisions. It may revisit facts and re-examine evidence already determined by the division in aid of its appellate jurisdiction. The CTA En Banc may reverse or modify the division's judgment, except those that had become final and executory. Consequently, a decision rendered by any of the divisions is not a final decision of the court. Under the current structure of the CTA, therefore, the CTA En Banc is considered a separate and distinct court – a "higher court" than any of its divisions. This is not true for the Court of Appeals or the Supreme Court. The Court of Appeals en banc and the Supreme Court en banc do not have appellate jurisdiction over their divisions.40 Accordingly, a ruling of any of their division is the court's final decision on the matter, regardless of whether it was rendered by the division or en banc.

During the deliberations of this case, Associate Justice Alfredo Benjamin S. Caguioa posits that RA No. 9282 merely "established an appellate structure that allows the full court to collectively review rulings of its division." "R.A. No. 9282 did not create a hierarchy between the CTA En Banc and its divisions." "The legislative intent was to establish a clear appellate process within the CTA, but not to turn the CTA En Banc into a supervisory body with certiorari jurisdiction over its own divisions." Associate Justice Japar B. Dimaampao further opined that "[r]ather than introducing the CTA En Banc as a 'superior' court to the CTA in Division, it is merely a secondary check on the Division's factual conclusion." But then, "introducing this second check could not have been intended to grant the CTA En Banc greater authority or supervision over the CTA in Division. Simply put, it is not a 'higher tribunal' per se."

Senate President Franklin M. Drilon emphasized in his sponsorship speech the conversion of the CTA into an appellate court that specializes in tax cases so that decisions of the CTA sitting in Division shall now be appealed to the en banc, instead of the Court of Appeals.

Mr. President, another important feature of this measure is that appeals from decisions of the Court of Tax Appeals are no longer appealable to the Court of Appeals. Under the modified appeal procedure, the decision of a division of the Court of Tax Appeals may be appealed to the Court of Tax Appeals en banc. The decision of the Court of Tax Appeals en banc may in turn be directly appealed to the Supreme Court only on a question of law. This is expected to facilitate court proceedings in tax cases since the Court of Tax Appeals has admittedly the necessary expertise in tax matters. Moreover, there will be less divisive rulings on tax matters since appeal shall be made only to the Court of Tax Appeals en banc instead of the Court of Appeals with its many divisions.41

The foregoing is aligned with the intent of the House of Representatives when it tackled House Bill Nos. 854, 2862, and 5044, which elevated the rank of the CTA to the level of a collegiate court. One of the co-authors of the bill, Representative Exequiel B. Javier, explained the effect of converting the CTA as a collegiate court, as follows:

... Under my bill, of course, once the Court of Tax Appeals is constituted as a collegiate court with 9 divisions, the appeal will go to the Court of Appeals on questions of fact, questions of law and so forth. Of course, only questions of law will be elevated to the Supreme Court. But I understand that, according to Judge Acosta, who is the presiding judge of the Court of Tax Appeals, we may have to eliminate the appeal to the Court of Appeals because it's quite illogical that a collegiate court with an expertise on tax matters... tax matters so they appealed to the Court of Appeals and no offense to Justice Agcaoili. The Court of Appeals is a court of general appellate jurisdiction under all cases. So it not also help de-clog the dockets of the Court of Appeals. So the appeal would be from the division of the Court of Tax Appeals to the Court of [Tax] Appeals en banc and whatever decision en banc reaches then it goes to the Supreme Court for appeal on certiorari only on three grounds. Abuse of discretion, serious errors of facts and question of law.42

Congress relieved the Court of Appeals of jurisdiction to decide on appeal, decisions or rulings of the CTA (which now sits in Division). The appellate jurisdiction of the Court of Appeals was transferred to a new body – the CTA En Banc, while the former CTA (composed of a presiding judge and two judges) became the CTA Division. The present framework of the CTA created, in essence, two courts with unique and distinct jurisdictions.

Associate Justice Caguioa insisted that certiorari petition under Rule 65 of the Rules of Court is a remedy available only against lower courts and "not within the same judicial entity." Associate Justice Dimaampao explained that "the CTA En Banc is not a superior tribunal to the CTA in Division." However, the Court already recognized the authority of the CTA En Banc to review on certiorari final dispositions of its divisions in People v. Court of Tax Appeals-Third Division, Jacinto C. Ligot and Erlinda Y. Ligot44 and People v. Court of Tax Appeals, Second Division and Joselito B. Rap.45 We allowed resort to Rule 65 within the same collegiate court. The reason is obvious – when Congress transferred exclusive jurisdiction over appealed tax cases to the CTA, it also transferred such power as is deemed necessary, if not indispensable, in aid of such appellate jurisdiction.

Accordingly, I respectfully submit that there is no reason to limit our ruling in Grecia-Cuerdo to interlocutory orders of the RTC in a local tax case46 or to adverse rulings of the CIR or the Secretary of Finance,47 the Commissioner of Customs, or the Secretary of Trade and Industry on tax-related problems.48 The certiorari power of the CTA extends to the authority of the CTA en banc to determine grave abuse of discretion amounting to lack or excess of jurisdiction on any of its divisions, when necessary, in aid of its appellate jurisdiction. How can the CTA en banc effectively exercise its appellate jurisdiction over decisions, resolutions, or orders of the CTA Division if it cannot issue auxiliary writs necessary in aid of its appellate jurisdiction? To rule otherwise would be to sanction split jurisdiction, an absurd situation where one court decides an appeal in the main case, e.g., the CTA En Banc, while another court rules on an incident in the very same case, e.g., the Supreme Court.49 A piecemeal resort to one court and another gives rise to a multiplicity of suits.50 Split jurisdiction results in loss of time, waste of effort, augmented anxiety, and additional expense51 – clearly intolerable and abhorrent in a well-ordered administration of justice.52 Grecia-Cuerdo further elucidated:

If this Court were to sustain petitioners' contention that jurisdiction over their certiorari petition lies with the CA, this Court would be confirming the exercise by two judicial bodies, the CA and the CTA, of jurisdiction over basically the same subject matter — precisely the split-jurisdiction situation which is anathema to the orderly administration of justice. The Court cannot accept that such was the legislative motive, especially considering that the law expressly confers on the CTA, the tribunal with the specialized competence over tax and tariff matters, the role of judicial review over local tax cases without mention of any other court that may exercise such power. Thus, the Court agrees with the ruling of the CA that since appellate jurisdiction over private respondents' complaint for tax refund is vested in the CTA, it follows that a petition for certiorari seeking nullification of an interlocutory order issued in the said case should, likewise, be filed with the same court. To rule otherwise would lead to an absurd situation where one court decides an appeal in the main case while another court rules on an incident in the very same case.

Stated differently, it would be somewhat incongruent with the pronounced judicial abhorrence to split jurisdiction to conclude that the intention of the law is to divide the authority over a local tax case filed with the RTC by giving to the CA or this Court jurisdiction to issue a writ of certiorari against interlocutory orders of the RTC but giving to the CTA the jurisdiction over the appeal from the decision of the trial court in the same case. It is more in consonance with logic and legal soundness to conclude that the grant of appellate jurisdiction to the CTA over tax cases filed in and decided by the RTC carries with it the power to issue a writ of certiorari when necessary in aid of such appellate jurisdiction. The supervisory power or jurisdiction of the CTA to issue a writ of certiorari in aid of its appellate jurisdiction should co-exist with, and be a complement to, its appellate jurisdiction to review, by appeal, the final orders and decisions of the RTC, in order to have complete supervision over the acts of the latter.

The certiorari power to the CTA En Banc over interlocutory orders or resolutions of the Divisions is consistent with the rule on the hierarchy of courts.

The doctrine of hierarchy of courts requires that recourse must be first obtained from the lower courts to prevent inordinate demands upon the Court's time and attention, which are better devoted to those within its exclusive jurisdiction, and to prevent further overcrowding of this Court's docket.53 The doctrine was first introduced in People v. Cuaresma,54 viz:

This Court's original jurisdiction to issue writs of certiorari (as well as prohibition, mandamus, quo warranto, habeas corpus and injunction) is not exclusive. It is shared by this Court with Regional Trial Courts (formerly Courts of First Instance), which may issue the writ, enforceable in any part of their respective regions. It is also shared by this Court, and by the Regional Trial Court, with the Court of Appeals (formerly, Intermediate Appellate Court), although prior to the effectivity of Batas Pambansa Bilang 129 on August 14, 1981, the latter's competence to issue the extraordinary writs was restricted to those "in aid of its appellate jurisdiction." This concurrence of jurisdiction is not, however; to be taken as according to parties seeking any of the writs an absolute, unrestrained freedom of choice of the court to which application therefor will be directed. There is after all a hierarchy of courts. That hierarchy is determinative of the venue of appeals, and should also serve as a general determinant of the appropriate forum for petitions for the extraordinary writs. A becoming regard for that judicial hierarchy most certainly indicates that petitions for the issuance of extraordinary writs against first level ("inferior") courts should be filed with the Regional Trial Court, and those against the latter, with the Court of Appeals. A direct invocation of the Supreme Court's original jurisdiction to issue these writs should be allowed only when there are special and important reasons therefor, clearly and specifically set out in the petition. This is established policy. Tt is a policy that is necessary to prevent inordinate demands upon the Court's time and attention which are better devoted to those matters within its exclusive jurisdiction, and to prevent further over-crowding of the Court's docket. Indeed, the removal of the restriction on the jurisdiction of the Court of Appeals in this regard, supra — resulting from the deletion of the qualifying phrase, "in aid of its appellate jurisdiction" — was evidently intended precisely to relieve this Court pro tanto of the burden of dealing with applications for the extraordinary writs which, but for the expansion of the Appellate Court corresponding jurisdiction, would have had to be filed with it.

The Diocese of Bacolod v. Commission on Elections55 expounded on this doctrine, to wit:

The doctrine that requires respect for the hierarchy of courts was created by this court to ensure that every level of the judiciary performs its designated roles in an effective and efficient manner. Trial courts do not only determine the facts from the evaluation of the evidence presented before them. They are likewise competent to determine issues of law which may include the validity of an ordinance, statute, or even an executive issuance in relation to the Constitution. To effectively perform these functions, they are territorially organized into regions and then into branches. Their writs generally reach within those territorial boundaries. Necessarily, they mostly perform the all-important task of inferring the facts from the evidence as these are physically presented before them. In many instances, the facts occur within their territorial jurisdiction, which properly present the 'actual case' that makes ripe a determination of the constitutionality of such action. The consequences, of course, would be national in scope. There are, however, some cases where resort to courts at their level would not be practical considering their decisions could still be appealed before the higher courts, such as the Court of Appeals.

In other words, the Supreme Court may take cognizance and assume jurisdiction over special civil actions for certiorari only as a last resort and in exceptional cases. The CTA is a highly specialized body created to resolve all tax problems. It should be allowed to determine firsthand all matters relative to the exercise of its specific jurisdiction.

Accordingly, I maintain that the CTA En Banc has primary jurisdiction to determine grave abuse of discretion amounting to lack or excess of jurisdiction on all interlocutory orders or judgments issued by any of its divisions.