G.R. No.

L-36181 October 23, 1982 allegedly shortchanging the government of

income tax due from 75% of the said dividends.
MERALCO SECURITIES CORPORATION (now
FIRST PHILIPPINE HOLDINGS Petitioner Commissioner of Internal Revenue
CORPORATION), petitioner, caused the investigation of the denunciation after
vs. which he found and held that no deficiency
HON. VICTORINO SAVELLANO and ASUNCION corporate income tax was due from the Meralco
BARON VDA. DE MANIAGO, et al., as heirs of Securities Corporation on the dividends it
the late Juan G. Maniago, respondents. received from the Manila Electric Co., since under
the law then prevailing (section 24[a] of the
G.R. No. L-36748 October 23, 1982 National Internal Revenue Code) "in the case of
dividends received by a domestic or foreign
COMMISSIONER OF INTERNAL resident corporation liable to (corporate income)
REVENUE, petitioner, tax under this Chapter . . . .only twenty-five per
vs. centum thereof shall be returnable for the
HON. VICTORINO SAVELLANO and ASUNCION purposes of the tax imposed under this section."
BARON VDA. DE MANIAGO, et al., as heirs of The Commissioner accordingly rejected Maniago's
the late Juan G. Maniago, respondents. contention that the Meralco from whom the
dividends were received is "not a domestic
G.R. No. L-36181 corporation liable to tax under this Chapter." In a
letter dated April 5, 1968, the Commissioner
San Juan, Africa, Gonzales & San Agustin for informed Maniago of his findings and ruling and
petitioner. therefore denied Maniago's claim for informer's
reward on a non-existent deficiency. This action of
Ramon A. Gonzales for respondents. the Commissioner was sustained by the Secretary
of Finance in a 4th Indorsement dated May 11,
1971.

TEEHANKEE, J.: On August 28, 1970, Maniago filed a petition for

mandamus, and subsequently an amended
These are original actions for certiorari to set petition for mandamus, in the Court of First
aside and annul the writ of mandamus issued by Instance of Manila, docketed therein as Civil Case
Judge Victorino A. Savellano of the Court of First No. 80830, against the Commissioner of Internal
Instance of Manila in Civil Case No. 80830 Revenue and the Meralco Securities Corporation
ordering petitioner Meralco Securities Corporation to compel the Commissioner to impose the
(now First Philippine Holdings Corporation) to pay, alleged deficiency tax assessment on the Meralco
and petitioner Commissioner of Internal Revenue Securities Corporation and to award to him the
to collect from the former, the amount of corresponding informer's reward under the
P51,840,612.00, by way of alleged deficiency provisions of R.A. 2338.
corporate income tax, plus interests and
surcharges due thereon and to pay private On October 28, 1978, the Commissioner filed a
respondents 25% of the total amount collectible motion to dismiss, arguing that since in matters
as informer's reward. of issuance and non-issuance of assessments, he
is clothed under the National Internal Revenue
On May 22, 1967, the late Juan G. Maniago Code and existing rules and regulations with
(substituted in these proceedings by his wife and discretionary power in evaluating the facts of a
children) submitted to petitioner Commissioner of case and since mandamus win not lie to compel
Internal Revenue confidential denunciation the performance of a discretionary power, he
against the Meralco Securities Corporation for tax cannot be compelled to impose the alleged tax
evasion for having paid income tax only on 25 % deficiency assessment against the Meralco
of the dividends it received from the Manila Securities Corporation. He further argued that
Electric Co. for the years 1962-1966, thereby mandamus may not lie against him for that would
be tantamount to a usurpation of executive
powers, since the Office of the Commissioner of dated June 13, 1973, the two cases were ordered
Internal Revenue is undeniably under the control consolidated.
of the executive department.
We grant the petitions.
On the other hand, the Meralco Securities
Corporation filed its answer, dated January 15, Respondent judge has no jurisdiction to take
1971, interposing as special and/or affirmative cognizance of the case because the subject
defenses that the petition states no cause of matter thereof clearly falls within the scope of
action, that the action is premature, that cases now exclusively within the jurisdiction of
mandamus win not lie to compel the the Court of Tax Appeals. Section 7 of Republic
Commissioner of Internal Revenue to make an Act No. 1125, enacted June 16, 1954, granted to
assessment and/or effect the collection of taxes the Court of Tax Appeals exclusive appellate
upon a taxpayer, that since no taxes have jurisdiction to review by appeal, among others,
actually been recovered and/or collected, decisions of the Commissioner of Internal
Maniago has no right to recover the reward Revenue in cases involving disputed
prayed for, that the action of petitioner had assessments, refunds of internal revenue taxes,
already prescribed and that respondent court has fees or other charges, penalties imposed in
no jurisdiction over the subject matter as set relation thereto, or other matters arising under
forth in the petition, the same being cognizable the National Internal Revenue Code or other law
only by the Court of Tax Appeals. or part of law administered by the Bureau of
Internal Revenue. The law transferred to the
On January 10, 1973, the respondent judge Court of Tax Appeals jurisdiction over all cases
rendered a decision granting the writ prayed for involving said assessments previously cognizable
and ordering the Commissioner of Internal by courts of first instance, and even those
Revenue to assess and collect from the Meralco already pending in said courts. 1 The question of
Securities Corporation the sum of P51,840,612.00 whether or not to impose a deficiency tax
as deficiency corporate income tax for the period assessment on Meralco Securities Corporation
1962 to 1969 plus interests and surcharges due undoubtedly comes within the purview of the
thereon and to pay 25% thereof to Maniago as words "disputed assessments" or of "other
informer's reward. matters arising under the National Internal
Revenue Code . . . .In the case of Blaquera vs.
All parties filed motions for reconsideration of the Rodriguez, et al, 2 this Court ruled that "the
decision but the same were denied by respondent determination of the correctness or incorrectness
judge in his order dated April 6, 1973, with of a tax assessment to which the taxpayer is not
respondent judge denying respondents' claim for agreeable, falls within the jurisdiction of the Court
attorneys fees and for execution of the decision of Tax Appeals and not of the Court of First
pending appeal. Instance, for under the provisions of Section 7 of
Republic Act No. 1125, the Court of Tax Appeals
Hence, the Commissioner filed a separate petition has exclusive appellate jurisdiction to review, on
with this Court, docketed as G.R. No. L-36748 appeal, any decision of the Collector of Internal
praying that the decision of respondent judge Revenue in cases involving disputed assessments
dated January 10, 1973 and his order dated April and other matters arising under the National
6, 1973 be reconsidered for respondent judge has Internal Revenue Code or other law or part of law
no jurisdiction over the subject matter of the case administered by the Bureau of Internal Revenue."
and that the issuance or non-issuance of a
deficiency assessment is a prerogative of the Thus, even assuming arguendo that the right
Commissioner of Internal Revenue not reviewable granted the taxpayers affected to question and
by mandamus. appeal disputed assessments, under section 7 of
Republic Act No. 1125, may be availed of by
The Meralco Securities Corporation (now First strangers or informers like the late Maniago, the
Philippine Holdings Corporation) likewise most that he could have done was to appeal to
appealed the same decision of respondent judge the Court of Tax Appeals the ruling of petitioner
in G.R. No. L-36181 and in the Court's resolution Commissioner of Internal Revenue within thirty
(30) days from receipt thereof pursuant to section the government, mandamus may not he against
11 of Republic Act No. 1125. 3 He failed to take the Commissioner to compel him to impose a tax
such an appeal to the tax court. The ruling is assessment not found by him to be due or proper
clearly final and no longer subject to review by for that would be tantamount to a usurpation of
the courts. 4 executive functions. As we held in the case
of Commissioner of Immigration vs. Arca 13 anent
It is furthermore a well-recognized rule that this principle, "the administration of immigration
mandamus only lies to enforce the performance laws is the primary responsibility of the executive
of a ministerial act or duty 5 and not to control the branch of the government. Extensions of stay of
performance of a discretionary power. 6 Purely aliens are discretionary on the part of
administrative and discretionary functions may immigration authorities, and neither a petition for
not be interfered with by the courts. 7 Discretion, mandamus nor one for certiorari can compel the
as thus intended, means the power or right Commissioner of Immigration to extend the stay
conferred upon the office by law of acting of an alien whose period to stay has expired.
officially under certain circumstances according
to the dictates of his own judgment and Such discretionary power vested in the proper
conscience and not controlled by the judgment or executive official, in the absence of arbitrariness
conscience of others. 8 mandamus may not be or grave abuse so as to go beyond the statutory
resorted to so as to interfere with the manner in authority, is not subject to the contrary judgment
which the discretion shall be exercised or to or control of others. " "Discretion," when applied
influence or coerce a particular determination. 9 to public functionaries, means a power or right
conferred upon them by law of acting officially,
In an analogous case, where a petitioner sought under certain circumstances, uncontrolled by the
to compel the Rehabilitation Finance Corporation judgment or consciences of others. A purely
to accept payment of the balance of his ministerial act or duty in contradiction to a
indebtedness with his backpay certificates, the discretional act is one which an officer or tribunal
Court ruled that "mandamus does not compel the performs in a given state of facts, in a prescribed
Rehabilitation Finance Corporation to accept manner, in obedience to the mandate of a legal
backpay certificates in payment of outstanding authority, without regard to or the exercise of his
loans. Although there is no provision expressly own judgment upon the propriety or impropriety
authorizing such acceptance, nor is there one of the act done. If the law imposes a duty upon a
prohibiting it, yet the duty imposed by the public officer and gives him the right to decide
Backpay Law upon said corporation as to the how or when the duty shall be performed, such
acceptance or discount of backpay certificates is duty is discretionary and not ministerial. The duty
neither clear nor ministerial, but discretionary is ministerial only when the discharge of the
merely, and such special civil action does not same requires neither the exercise of official
issue to control the exercise of discretion of a discretion or judgment." 14
public officer." 10 Likewise, we have held that
courts have no power to order the Commissioner Thus, after the Commissioner who is specifically
of Customs to confiscate goods imported in charged by law with the task of enforcing and
violation of the Import Control Law, R.A. 426, as implementing the tax laws and the collection of
said forfeiture is subject to the discretion of the taxes had after a mature and thorough study
said official, 11 nor may courts control the rendered his decision or ruling that no tax is due
determination of whether or not an applicant for or collectible, and his decision is sustained by the
a visa has a non-immigrant status or whether his Secretary, now Minister of Finance (whose act is
entry into this country would be contrary to that of the President unless reprobated), such
public safety for it is not a simple ministerial decision or ruling is a valid exercise of discretion
function but an exercise of discretion. 12 in the performance of official duty and cannot be
controlled much less reversed by mandamus. A
Moreover, since the office of the Commissioner of contrary view, whereby any stranger or informer
Internal Revenue is charged with the would be allowed to usurp and control the official
administration of revenue laws, which is the functions of the Commissioner of Internal
primary responsibility of the executive branch of Revenue would create disorder and confusion, if
not chaos and total disruption of the operations of collection, has been made in the instant case,
the government. respondent judge's writ for the Commissioner to
pay respondents 25% informer's reward is gross
Considering then that respondent judge may not error and without factual nor legal basis.
order by mandamus the Commissioner to issue
the assessment against Meralco Securities WHEREFORE, the petitions are hereby granted
Corporation when no such assessment has been and the questioned decision of respondent judge
found to be due, no deficiency taxes may dated January 10, 1973 and order dated April 6,
therefore be assessed and collected against the 1973 are hereby reversed and set aside. With
said corporation. Since no taxes are to be costs against private respondents.
collected, no informer's reward is due to private
respondents as the informer's heirs. Informer's Melencio-Herrera, Plana, Vasquez and Relova, JJ.,
reward is contingent upon the payment and concur.
collection of unpaid or deficiency taxes. An
informer is entitled by way of reward only to a Gutierrez, Jr., J., took no part.
percentage of the taxes actually assessed and
collected. Since no assessment, much less any