PILMICO-MAURI FOODS CORP. v. CIR, , GR No.

175651, 2016-09-14
Facts:

[PMFC] is a corporation, organized and existing under the laws of the Philippines, with
principal place of business at Aboitiz Corporate Center, Banilad, Cebu City.The books of accounts
of [PMFC] pertaining to 1996 were examined by the [CIR] thru Revenue Officer Eugenio D.
Maestrado of Revenue District No. 81 (Cebu City North District) for deficiency income, value-
added [tax] (VAT) and withholding tax liabilities.

The foregoing Assessment Notices were all received by [PMFC] on December 1, 1998.
On December 29, 1998, [PMFC] filed a protest letter against the aforementioned deficiency tax
assessments through the Regional Director, Revenue Region No. 13, Cebu City.

In a final decision of the [CIR] on the disputed assessments dated July 3, 2000, the
deficiency tax liabilities of [PMFC] were reduced from P9,761,750.02 to P3,020,259.30

PMFC] filed its Petition for Review on August 9, 2000.

After trial on the merits, the [CTA] in Division rendered the assailed Decision affirming
the assessments but in the reduced amount of P2,804,920.36 (inclusive of surcharge and
deficiency interest) representing [PMFC's] Income, VAT and Withholding Tax deficiencies for the
taxable year 1996 plus 20% delinquency interest per annum until fully paid.

rendered... rendered... date... date... date

From the total purchases of P5,893,694.64 which have been disallowed, it seems that a
portion thereof amounting to P1,280,268.19 (729,663.64 + 550,604.55) has no supporting sales
invoices because of [PMFC's] failure to present said invoices.

The sales invoices contain alterations particularly in the name of the purchaser giving
rise to serious doubts regarding their authenticity and if they were really issued to [PMFC].

Exhibit B-11 does not even have any date indicated therein, which is a clear violation of
Section 238 of the NIRC of 1977 which required that the official receipts must show the date of
the transaction.

Besides, in order to support its claim, [PMFC] should have presented the following vital
documents, namely, 1) Written Offsetting Agreement; 2) proof of payment by [PMFC] to Pilmico
Foods Corporation; and 3) Financial Statements for the year 1996 of Pilmico Foods Corporation
to establish the fact that Pilmico Foods Corporation did not deduct the amount of raw materials
being claimed by [PMFC].Considering that the official receipts and sales invoices presented by
[PMFC] failed to comply with the requirements of Section 238 of the NIRC of 1977, the
disallowance by the [CIR] of the claimed deduction for raw materials is proper.

PMFC] filed a Motion for Partial Consideration on January 21, 2005 x x x but x x x
[PMFC's] Motion for Reconsideration was denied in a Resolution dated May 19, 2005 for lack of
merit
Unperturbed, PMFC then filed a petition for review before the CTA en banc

CTA en banc denied the motion for reconsideration

Issues:

The Honorable CTA First Division deprived PMFC of due process of law and the CTA
assumed an executive function when it substituted a legal basis other than that stated in the
assessment and pleading of the CIR, contrary to law.

Since the legal basis cited by the CTA supporting the validity of the assessment was never raised
by the CIR, PMFC was deprived of its constitutional right to be apprised of the legal basis of the
assessment.

Ruling:

The Court affirms but modifies the herein assailed decision and resolution.

Due process was not violated.

CIR and PMFC both agreed that among the issues for resolution was "whether or not the
P5,895,694.66 purchases of raw materials are unsupported."

CIR had stated the material facts and the law upon which they were based.

The CTA, on the other hand, is not bound to rule solely on the basis of the laws cited by
the CIR. Were it otherwise, the tax court's appellate power of review shall be rendered useless.

PMFC was at the outset aware that the lack or inadequacy of supporting documents to
justify the deductions claimed from the gross income was among the issues raised for resolution
before the CTA.

he Court recognizes that the CTA, which by the very nature of its function is dedicated
exclusively to the consideration of tax problems, has necessarily developed an expertise on the
subject, and its conclusions will not be overturned unless there has been an abuse or
improvident exercise of authority.

MODIFICATION thereof, the legal interest of six percent (6%) per annum reckoned from
the finality of this Resolution until full satisfaction, is here imposed upon the amount of
P2,804,920.36 to be paid by Pilmico-Mauri Foods Corporation to the Commissioner of Internal
Revenue.

Principles:

when a taxpayer claims a deduction, he must point to some specific provision of the statute in
which that deduction is authorized and must be able to prove that he is entitled to the deduction
which the law allows.
statutory test of deductibility where it is axiomatic that to be deductible as a business expense,
three conditions are imposed, namely: (1) the expense must be ordinary and necessary; (2) it
must be paid or incurred within the taxable year, and (3) it must be paid or incurred in carrying
on a trade or business. In addition, not only must the taxpayer meet the business test, he must
substantially prove by evidence or records the deductions claimed under the law, otherwise, the
same will be disallowed. The mere allegation of the taxpayer that an item of expense is ordinary
and necessary does not justify its deduction.

Digests created by other users

Commissioner on Internal Revenue V. Court of Tax Appeals

Facts

In Commissioner of Internal Revenue V. Manila Hotel Corporation, SC overruled Court of

Tax Appeals decision that caterer’s tax under RA 6110 is illegal because it was vetoed by Former
President Marcos and Congress had not taken steps to override the veto. SC ruled in this case
that the law has always imposed a 3% caterer’s tax, as provided in Par 1, Sec 206 of the Tax Code.

Presently, Manila Golf and Country Club, a non-stock corporation claims that it is
exempt from the 3% on gross receipts because President Marcos vetoed Sec 191-A of RA 6110
(Omnibus Tax Law). President Marcos vetoed Sec 191-A because according to him it would 1)
shift the burden of taxation to the consuming public and 2) restrain the development of hotels
which are essential to the tourist industry. The protestation of the club was denied by petitioners
saying that Sec 42 was not entirely vetoed but merely the words “hotels, motels, resthouses.”
House of Ways and Means concurred with petitioners stating that veto message only seems to
object with certain portions of 191-A and that can be gleaned by the reasons given by the
President.

Issue

WON veto referred to the entire section or merely the 20% tax on gross receipts of
operators and proprietors of eating places within hotels, motels and resthouses.

Held and Ratio

President does not have the power to repeal an existing tax. Therefore, he could not
have repealed the 2% caterer’s tax.

CTA agreed with respondent club that president vetoed only a certain part. CTA
mentioned that President can veto only an entire item, and not just words. The President
intentionally only vetoed a few words in Sec 191-A. Assuming that the veto could not apply to
just one provision but all would render the Presidential veto void and still in favor of petitioner.

Inclusion of “hotels, motels, resthouses” in the 20% caterer’s tax bracket are items.
President has the right to veto such item, that which is subject to tax and tax rate. It does not
refer to an entire section. To construe item as an entire section would be to tie his hands to
either completely agree with a section he has objections with or to disagree with an entire
section where he only has a portion he disagrees with.
 Commissioner of Internal Revenue vs. Algue Inc.
GR No. L-28896 | Feb. 17, 1988

Facts:
· Algue Inc. is a domestic corp engaged in engineering, construction and other allied activities
· On Jan. 14, 1965, the corp received a letter from the CIR regarding its delinquency income taxes
from 1958-1959, amtg to P83,183.85
· A letter of protest or reconsideration was filed by Algue Inc on Jan 18
· On March 12, a warrant of distraint and levy was presented to Algue Inc. thru its counsel, Atty.
Guevara, who refused to receive it on the ground of the pending protest
· Since the protest was not found on the records, a file copy from the corp was produced and
given to BIR Agent Reyes, who deferred service of the warrant
· On April 7, Atty. Guevara was informed that the BIR was not taking any action on the protest
and it was only then that he accepted the warrant of distraint and levy earlier sought to be
served
· On April 23, Algue filed a petition for review of the decision of the CIR with the Court of Tax
Appeals
· CIR contentions:
- the claimed deduction of P75,000.00 was properly disallowed because it was not an ordinary
reasonable or necessary business expense
- payments are fictitious because most of the payees are members of the same family in control
of Algue and that there is not enough substantiation of such payments
· CTA: 75K had been legitimately paid by Algue Inc. for actual services rendered in the form of
promotional fees. These were collected by the Payees for their work in the creation of the
Vegetable Oil Investment Corporation of the Philippines and its subsequent purchase of the
properties of the Philippine Sugar Estate Development Company.

Issue:
W/N the Collector of Internal Revenue correctly disallowed the P75,000.00 deduction
claimed by Algue as legitimate business expenses in its income tax returns

Ruling:
· Taxes are the lifeblood of the government and so should be collected without unnecessary
hindrance, made in accordance with law.
· RA 1125: the appeal may be made within thirty days after receipt of the decision or ruling
challenged
· During the intervening period, the warrant was premature and could therefore not be served.
· Originally, CIR claimed that the 75K promotional fees to be personal holding company income,
but later on conformed to the decision of CTA
· There is no dispute that the payees duly reported their respective shares of the fees in their
income tax returns and paid the corresponding taxes thereon. CTA also found, after examining
the evidence, that no distribution of dividends was involved
· CIR suggests a tax dodge, an attempt to evade a legitimate assessment by involving an
imaginary deduction
· Algue Inc. was a family corporation where strict business procedures were not applied and
immediate issuance of receipts was not required. at the end of the year, when the books were to
be closed, each payee made an accounting of all of the fees received by him or her, to make up
the total of P75,000.00. This arrangement was understandable in view of the close relationship
among the persons in the family corporation
· The amount of the promotional fees was not excessive. The total commission paid by the
Philippine Sugar Estate Development Co. to Algue Inc. was P125K. After deducting the said fees,
Algue still had a balance of P50,000.00 as clear profit from the transaction. The amount of
P75,000.00 was 60% of the total commission. This was a reasonable proportion, considering that
it was the payees who did practically everything, from the formation of the Vegetable Oil
Investment Corporation to the actual purchase by it of the Sugar Estate properties.
· Sec. 30 of the Tax Code: allowed deductions in the net income – Expenses - All the ordinary and
necessary expenses paid or incurred during the taxable year in carrying on any trade or business,
including a reasonable allowance for salaries or other compensation for personal services actually
rendered xxx
· the burden is on the taxpayer to prove the validity of the claimed deduction
· In this case, Algue Inc. has proved that the payment of the fees was necessary and reasonable in
the light of the efforts exerted by the payees in inducing investors and prominent businessmen
to venture in an experimental enterprise and involve themselves in a new business requiring
millions of pesos.
· Taxes are what we pay for civilization society. Without taxes, the government would be
paralyzed for lack of the motive power to activate and operate it. Hence, despite the natural
reluctance to surrender part of one's hard earned income to the taxing authorities, every person
who is able to must contribute his share in the running of the government. The government for
its part, is expected to respond in the form of tangible and intangible benefits intended to
improve the lives of the people and enhance their moral and material values
· Taxation must be exercised reasonably and in accordance with the prescribed procedure. If it is
not, then the taxpayer has a right to complain and the courts will then come to his succor
 Commissioner of Internal Revenue vs Algue Inc., and Court of Tax Appeals
GR No. L-28896 , February 17, 1988

Facts:
The Philippine Sugar Estate Development Company had earlier appointed Algue Inc., as its agent,
authorizing it to sell its land, factories and oil manufacturing process.As such,the corporation
worked for the formation of the Vegetable Oil Investment Corporation, until they were able to
purchased the PSEDC properties. For this sale, Algue Inc., received as agent a commission of
P126, 000.00, and it was from this commission that the P75, 000.00 promotional fees were paid
to Alberto Guevara, Jr., Eduardo Guevara, Isabel Guevara, Edith, O'Farell, and Pablo Sanchez.

Commissioner of Internal Revenue contends that the claimed deduction is not allowed because it
was not an ordinary reasonable or necessary business expense. The Court of Tax Appeals had
seen it differently. Agreeing with Algue Inc., it held that the said amount had been legitimately
paid by the private respondent for actual services rendered. The payment was in the form of
promotional fees.

Issue:
Whether or not the Collector of Internal Revenue correctly disallowed the P75, 000.00 deduction
claimed by private respondent Algue Inc., as legitimate business expenses in its income tax
returns.

Ruling:
No, The Supreme Court agrees with the respondent court that the amount of the promotional
fees was not excessive. The P75,000.00 was 60% of the total commission. This was a reasonable
proportion, considering that it was the payees who did practically everything, from the formation
of the Vegetable Oil Investment Corporation to the actual purchase by it of the Sugar Estate
properties.

The claimed deduction by the private respondent was permitted under the Internal Revenue
Code and should therefore not have been disallowed by the petitioner.
CIR v. YMCA
GR No. 124043, October 14, 1998
298 SCRA 83

FACTS: Private Respondent YMCA--a non-stock, non-profit institution, which conducts various
programs beneficial to the public pursuant to its religious, educational and charitable objectives--
leases out a portion of its premises to small shop owners, like restaurants and canteen operators,
deriving substantial income for such. Seeing this, the Commissioner of Internal Revenue (CIR)
issued an assessment to private respondent for deficiency income tax, deficiency expanded
withholding taxes on rentals and professional fees and deficiency withholding tax on wages.
YMCA opposed arguing that its rental income is not subject to tax, mainly because of the
provisions of Section 27 of NIRC which provides that civic league or organizations not organized
for profit but operate exclusively for promotion of social welfare and those organized exclusively
for pleasure, recreation and other non-profitble businesses shall not be taxed.

ISSUE: Is the contention of YMCA tenable?

HELD: No. Because taxes are the lifeblood of the nation, the Court has always applied the
doctrine of strict in interpretation in construing tax exemptions. Furthermore, a claim of
statutory exemption from taxation should be manifest and unmistakable from the language of
the law on which it is based. Thus, the claimed exemption "must expressly be granted in a statute
stated in a language too clear to be mistaken."
DAVAO GULF LUMBER CORP v. CIR
GR No. 117359, July 23, 1998
293 SCRA 77

FACTS: Republic Act No. 1435 entitles miners and forest concessioners to the refund of 25% of
the specific taxes paid by the oil companies, which were eventually passed on to the user--the
petitioner in this case--in the purchase price of the oil products. Petitioner filed before
respondent Commissioner of Internal Revenue (CIR) a claim for refund in the amount
representing 25% of the specific taxes actually paid on the above-mentioned fuels and oils that
were used by petitioner in its operations. However petitioner asserts that equity and justice
demands that the refund should be based on the increased rates of specific taxes which it
actually paid, as prescribed in Sections 153 and 156 of the NIRC. Public respondent, on the other
hand, contends that it should be based on specific taxes deemed paid under Sections 1 and 2 of
RA 1435.

ISSUE: Should the petitioner be entitled under Republic Act No. 1435 to the refund of 25% of the
amount of specific taxes it actually paid on various refined and manufactured mineral oils and
other oil products, and not on the taxes deemed paid and passed on to them, as end-users, by
the oil companies?

HELD: No. According to an eminent authority on taxation, "there is no tax exemption solely on
the ground of equity." Thus, the tax refund should be based on the taxes deemed paid. Because
taxes are the lifeblood of the nation, statutes that allow exemptions are construed strictly
against the grantee and liberally in favor of the government. Otherwise stated, any exemption
from the payment of a tax must be clearly stated in the language of the law; it cannot be merely
implied therefrom.
MARCOS II v. CA
GR No. 120880, June 5, 1997
293 SCRA 77

FACTS: Bongbong Marcos sought for the reversal of the ruling of the Court of Appeals to grant
CIR's petition to levy the properties of the late Pres. Marcos to cover the payment of his tax
delinquencies during the period of his exile in the US. The Marcos family was assessed by the BIR,
and notices were constructively served to the Marcoses, however the assessment were not
protested administratively by Mrs. Marcos and the heirs of the late president so that they
became final and unappealable after the period for filing of opposition has prescribed. Marcos
contends that the properties could not be levied to cover the tax dues because they are still
pending probate with the court, and settlement of tax deficiencies could not be had, unless there
is an order by the probate court or until the probate proceedings are terminated.

ISSUE: Is the contention of Bongbong Marcos correct?

HELD: No. The deficiency income tax assessments and estate tax assessment are already final
and unappealable -and-the subsequent levy of real properties is a tax remedy resorted to by the
government, sanctioned by Section 213 and 218 of the National Internal Revenue Code. This
summary tax remedy is distinct and separate from the other tax remedies (such as Judicial Civil
actions and Criminal actions), and is not affected or precluded by the pendency of any other tax
remedies instituted by the government
.
The approval of the court, sitting in probate, or as a settlement tribunal over the deceased is
not a mandatory requirement in the collection of estate taxes. It cannot therefore be argued that
the Tax Bureau erred in proceeding with the levying and sale of the properties allegedly owned
by the late President, on the ground that it was required to seek first the probate court's
sanction. There is nothing in the Tax Code, and in the pertinent remedial laws that implies the
necessity of the probate or estate settlement court's approval of the state's claim for estate
taxes, before the same can be enforced and collected.

On the contrary, under Section 87 of the NIRC, it is the probate or settlement court which is
bidden not to authorize the executor or judicial administrator of the decedent's estate to deliver
any distributive share to any party interested in the estate, unless it is shown a Certification by
the Commissioner of Internal Revenue that the estate taxes have been paid. This provision
disproves the petitioner's contention that it is the probate court which approves the assessment
and collection of the estate tax.
REYES v. ALMANZOR
GR Nos. L-49839-46, April 26, 1991
196 SCRA 322

FACTS: Petitioners JBL Reyes et al. owned a parcel of land in Tondo which are leased and
occupied as dwelling units by tenants who were paying monthly rentals of not exceeding P300.
Sometimes in 1971 the Rental Freezing Law was passed prohibiting for one year from its
effectivity, an increase in monthly rentals of dwelling units where rentals do not exceed three
hundred pesos (P300.00), so that the Reyeses were precluded from raising the rents and from
ejecting the tenants. In 1973, respondent City Assessor of Manila re-classified and reassessed the
value of the subject properties based on the schedule of market values, which entailed an
increase in the corresponding tax rates prompting petitioners to file a Memorandum of
Disagreement averring that the reassessments made were "excessive, unwarranted, inequitable,
confiscatory and unconstitutional" considering that the taxes imposed upon them greatly
exceeded the annual income derived from their properties. They argued that the income
approach should have been used in determining the land values instead of the comparable sales
approach which the City Assessor adopted.

ISSUE: Is the approach on tax assessment used by the City Assessor reasonable?

HELD: No. The taxing power has the authority to make a reasonable and natural classification for
purposes of taxation but the government's act must not be prompted by a spirit of hostility, or at
the very least discrimination that finds no support in reason. It suffices then that the laws
operate equally and uniformly on all persons under similar circumstances or that all persons
must be treated in the same manner, the conditions not being different both in the privileges
conferred and the liabilities imposed.

Consequently, it stands to reason that petitioners who are burdened by the government by its
Rental Freezing Laws (then R.A. No. 6359 and P.D. 20) under the principle of social justice should
not now be penalized by the same government by the imposition of excessive taxes petitioners
can ill afford and eventually result in the forfeiture of their properties.
PHIL. BANK OF COMMUNICATIONS v. CIR
GR No. 112024, January 28, 1999
302 SCRA 250

FACTS: Petitioner PBCom filed its first and second quarter income tax returns, reported profits,
and paid income taxes amounting to P5.2M in 1985. However, at the end of the year PBCom
suffered losses so that when it filed its Annual Income Tax Returns for the year-ended December
31, 1986, the petitioner likewise reported a net loss of P14.1 M, and thus declared no tax payable
for the year. In 1988, the bank requested from CIR for a tax credit and tax refunds representing
overpayment of taxes. Pending investigation of the respondent CIR, petitioner instituted a
Petition for Review before the Court of Tax Appeals (CTA). CTA denied its petition for tax credit
and refund for failing to file within the prescriptive period to which the petitioner belies arguing
the Revenue Circular No.7-85 issued by the CIR itself states that claim for overpaid taxes are not
covered by the two-year prescriptive period mandated under the Tax Code.

ISSUE: Is the contention of the petitioner correct? Is the revenue circular a valid exemption to the
NIRC?

HELD: No. The relaxation of revenue regulations by RMC 7-85 is not warranted as it disregards
the two-year prescriptive period set by law.

Basic is the principle that "taxes are the lifeblood of the nation." The primary purpose is to
generate funds for the State to finance the needs of the citizenry and to advance the common
weal. Due process of law under the Constitution does not require judicial proceedings in tax
cases. This must necessarily be so because it is upon taxation that the government chiefly relies
to obtain the means to carry on its operations and it is of utmost importance that the modes
adopted to enforce the collection of taxes levied should be summary and interfered with as little
as possible.

From the same perspective, claims for refund or tax credit should be exercised within the time
fixed by law because the BIR being an administrative body enforced to collect taxes, its functions
should not be unduly delayed or hampered by incidental matters
PHIL. GUARANTY CO., INC. v. CIR
GR No. L-22074, April 30, 1965
13 SCRA 775

FACTS: The petitioner Philippine Guaranty Co., Inc., a domestic insurance company, entered into
reinsurance contracts with foreign insurance companies not doing business in the country,
thereby ceding to foreign reinsurers a portion of the premiums on insurance it has originally
underwritten in the Philippines. The premiums paid by such companies were excluded by the
petitioner from its gross income when it file its income tax returns for 1953 and 1954.
Furthermore, it did not withhold or pay tax on them. Consequently, the CIR assessed against the
petitioner withholding taxes on the ceded reinsurance premiums to which the latter protested
the assessment on the ground that the premiums are not subject to tax for the premiums did not
constitute income from sources within the Philippines because the foreign reinsurers did not
engage in business in the Philippines, and CIR's previous rulings did not require insurance
companies to withhold income tax due from foreign companies.

ISSUE: Are insurance companies not required to withhold tax on reinsurance premiums ceded to
foreign insurance companies, which deprives the government from collecting the tax due from
them?

HELD: No. The power to tax is an attribute of sovereignty. It is a power emanating from necessity.
It is a necessary burden to preserve the State's sovereignty and a means to give the citizenry an
army to resist an aggression, a navy to defend its shores from invasion, a corps of civil servants to
serve, public improvement designed for the enjoyment of the citizenry and those which come
within the State's territory, and facilities and protection which a government is supposed to
provide. Considering that the reinsurance premiums in question were afforded protection by the
government and the recipient foreign reinsurers exercised rights and privileges guaranteed by
our laws, such reinsurance premiums and reinsurers should share the burden of maintaining the
state.
The petitioner's defense of reliance of good faith on rulings of the CIR requiring no withholding
of tax due on reinsurance premiums may free the taxpayer from the payment of surcharges or
penalties imposed for failure to pay the corresponding withholding tax, but it certainly would not
exculpate it from liability to pay such withholding tax. The Government is not estopped from
collecting taxes by the mistakes or errors of its agents.
PHILEX MINING CORP. v. CIR
GR No. 125704, August 28, 1998
294 SCRA 687

FACTS: Petitioner Philex Mining Corp. assails the decision of the Court of Appeals affirming the
Court of Tax Appeals decision ordering it to pay the amount of P110.7 M as excise tax liability for
the period from the 2nd quarter of 1991 to the 2nd quarter of 1992 plus 20% annual interest
from 1994 until fully paid pursuant to Sections 248 and 249 of the Tax Code of 1977. Philex
protested the demand for payment of the tax liabilities stating that it has pending claims for VAT
input credit/refund for the taxes it paid for the years 1989 to 1991 in the amount of P120 M plus
interest. Therefore these claims for tax credit/refund should be applied against the tax liabilities.

ISSUE: Can there be an off-setting between the tax liabilities vis-a-vis claims of tax refund of the
petitioner?

HELD: No. Philex's claim is an outright disregard of the basic principle in tax law that taxes are the
lifeblood of the government and so should be collected without unnecessary hindrance.
Evidently, to countenance Philex's whimsical reason would render ineffective our tax collection
system. Too simplistic, it finds no support in law or in jurisprudence.

To be sure, Philex cannot be allowed to refuse the payment of its tax liabilities on the ground
that it has a pending tax claim for refund or credit against the government which has not yet
been granted.Taxes cannot be subject to compensation for the simple reason that the
government and the taxpayer are not creditors and debtors of each other. There is a material
distinction between a tax and debt. Debts are due to the Government in its corporate capacity,
while taxes are due to the Government in its sovereign capacity. xxx There can be no off-setting
of taxes against the claims that the taxpayer may have against the government. A person cannot
refuse to pay a tax on the ground that the government owes him an amount equal to or greater
than the tax being collected. The collection of a tax cannot await the results of a lawsuit against
the government.
NORTH CAMARINES LUMBER CO., INC. v. CIR
GR No. L-12353, September 30, 1960
109 PHIL 511

FACTS: The petitioner sold more than 2M boardfeet of logs to General Lumber Co. with the
agreement that the latter would pay the sales taxes. The CIR, upon consultation officially advised
the parties that the bureau interposes no objection so long as the tax due shall be covered by a
surety. General Lumber complied, but later failed, with the surety, to pay the tax liabilities, and
so the respondent collector required the petitioner to pay thru a letter dated August 30, 1955.
Twice did the petitioner filed a request for reconsideration before finally submitting the denied
request for appeal before the Court of Tax Appeals. The CTA dismissed the appeal as it was
clearly filed out of time. The petitioner had consumed thirty-three days from the receipt of the
demand, before filing the appeal. Petitioner argued that in computing the 30-day period in
perfecting the appeal the letter of the respondent Collector dated January 30, 1956, denying the
second request for reconsideration, should be considered as the final decision contemplated in
Section 7, and not the letter of demand dated August 30, 1955.

ISSUE: Is the contention of the petitioner tenable?

HELD: No. This contention is untenable. We cannot countenance that theory that would make
the commencement of the statutory 30-day period solely dependent on the will of the taxpayer
and place the latter in a position to put off indefinitely and at his convenience the finality of a tax
assessment. Such an absurd procedure would be detrimental to the interest of the Government,
for "taxes are the lifeblood of the government, and their prompt and certain availability is an
imperious need."