[ G.R. No. L-7992. October 30, 1957 ] 102 Phil. 189
[ G.R. No. L-7992. October 30, 1957 ]
REPUBLIC OF THE PHILIPPINES, PLAINTIFF AND APPELLEE, VS. LUZON INDUSTRIAL CORPORATION AND MANILA SURETY & FIDELITY CO., INC., DEFENDANTS AND APPELLANTS. D E C I S I O N
BENGZON, J.:
Appeal from a judgment requiring defendants to pay 25 per cent surcharge for delinquency in the payment of taxes.
The case was submitted, in the court below, upon a stipulation of facts, which as summarized in the appealed decision were the following:
“Defendant Luzon Industrial Corporation was obligated to pay the plaintiff the amount of P36,232.93 for sales, tax on coconut oil, for the period from January 1, 1948 to March 31, 1948, and payable on or before April 20, 1948.
“On April 20, 1948, defendant Luzon Industrial Corporation made out its Check No. E-106782 drawn on the Hongkong Shanghai Banking Corporation, in the amount of P36,232.93, and payable to the City Treasurer of Manila. It sent its messenger to the Office of. the City Treasurer of Manila on the said date, with instructions to pay over the said check to the City Treasurer. The messenger stayed in the premises of the City Treasurer’s Office until 4:00 o’clock in the afternoon but was unable to make payment due to numerous taxpayers lined up in front of the office. Sensing that his turn may not reach him on time, the messenger sent the check by mail to the City Treasurer and was received by the latter on April 22, 1948. Upon receipt of the check on April 22, 1948, the City Treasurer applied the amount thereof to the payment of the sales tax due from Luzon Industrial Corporation, and referred the matter to the Collector of Internal Revenue for the imposition of the statutory surcharge of 25 per cent. Inasmuch as the check was actually received on April 22, 1948, the Collector of Internal Revenue decided to impose the 25 per cent surcharge as provided for in section 183 of the Revenue Code. Upon refusal of the Luzon Industrial Corporation to pay the surcharge, the Collector of Internal Revenue issued a warrant of distraint and levy against the properties of the former. The Luzon Industrial Corporation demurred of the writ and in order to suspend the execution of the same, agreed to furnish a bond, jointly and severally, with the defendant Manila Surety & Fidelity Co., Inc. to guarantee payment of the tax. Notwithstanding demands made by the plaintiff, defendants failed and refused to make good the amount of the bond, alleging that the surcharge sought to be imposed is null and void and not legally demandable.”
The question is whether the tax should be deemed to have been paid on April 20 as appellants contend, or on April 22 as appellees and the lower court maintain. If on the first date, reversal of the judgment is indicated; if on the last, affirmance should be ordered.
Admittedly the Internal Revenue Law has no provisions regarding tax payments by mail. But the Bureau of Internal Revenue that was given power to issue rules and regulations for the implementation of the Internal Revenue Laws, promulgated in 1926 its General Circular No. 206, dated October 27, 1926, the burden of which was that tax remittances by mail are deemed to have been received as payment on the day they were actually received, not on the day they were mailed. However in 1927 the Governor General issued Executive Order No. 92 of the following tenor:
“* * *. A taxpayer who makes a remittance through the mails of cither money order, cash or check covering1 a tax due from him shall be considered delinquent and subject to the payment of the surcharge or statutory penalty hereinabove mentioned where it can not be proven that the remittance was deposited in the mails in ample time to reach the office of the tax collector on or before the close of office hours on the last day for the payment of the tax.”
The court below applied this Executive Order. Having found that as the check had been deposited in the mail after office hours on April 20, it could not in due course have reached the Manila Treasurer’s Office on the same date, the Hon. Manuel Mejia, Judge, held the payment to have been effected out of time. The deadline was April 20, it must be recalled.
Nevertheless, appellants claim that this Executive Order has become obsolete, things having “greatly changed” and “business expanded” since 1927. They also claim it was repealed impliedly by Commonwealth Act No. 466 (National Internal Revenue Code) effective since the year 1939. Both contentions have no sound basis. As a matter of fact in 1943 this Court applied (and upheld) such Executive Order in Jamora vs. Meer, 74 Phil. 22. Therein this Court declared the taxpayer delinquent who deposited his remittance by registered mail after 4:00 o’clock in the afternoon of March 20, 1939—the deadline for payment—such mail having been in due course received on March 21; and this . Court approved the surcharge of 25 per cent collected for delinquency, by the revenue officials.
The appellants do not impugn the legal power of the then Governor General to issue the above executive order, which by the way, was recommended by the Insular Auditor, the Collector of Internal Revenue and the Department of Finance. [1] Indeed no taxpayer should be heard to complain on that score, the said order being in effect beneficial to his class in the sense that even if his payment is actually received in the collecting government office after the last day fixed by law for such payment, still he will not be considered delinquent if he shows he had deposited his remittance in the post office in time to be received in regular course on the due date.
Again it is contended that the governing principle is section 1 of Rule 27 of the Rules of Court:
“Section 1. Filing with the Court, defined.—The filing of pleadings, appearances, motions, notices, orders and other papers with the court as required by these rules shall be made by filing them with the clerk of the court. The date of mailing of motions, pleadings, or any other papers or payments or deposits, as shown by the post-office registry receipt, shall be considered as the date of their filing, payment, or deposit in this court.”
Yet that rule applies expressly to payments or deposits of money “in the court.” It does not cover payments made in other government offices; and it could not do so, for the simple reason that it had been promulgated by this Supreme Court in the exercise of its power under the Constitution to regulate procedure “in all courts” and we could not have attempted to extend our power of regulation to1 administrative matters under the Executive Department in charge of tax receipts or collections.
Lastly and as an alternative prayer, appellants request that the surcharge be reduced by the court in accordance with Article 1154 [2] of the Civil Code which gives the judge power to “equitably modify the penalty when the principal obligation has been partly or irregularly fulfilled by the debtor.” They say, by sending its messenger to the City Treasurer’s Office, the taxpayer “undoubtedly demonstrated its good faith and (made) efforts to pay its obligation on time.” We agree with the trial judge that this article refers to penalties prescribed in contracts—which is not the matter before us. The case of Treasurer vs. Rodis (40 Phil. 850) invoked by appellants involved the penalty provided in a bond, which is a contractual obligation. Therein the court could exercise, and did exercise the power to equitably modify the penalty.
In this instance the law directs the collection of 25 per cent surcharge; and this we held to be mandatory on the Collector, who has no discretion in the matter (Lim Co Chui vs. Posadas, 47 Phil. 460).
In view of the foregoing, the appealed judgment will be affirmed with costs against appellants.
Paras C. J., Padilla, Montemayor, Reyes A., Bautista Angelo, Labrador, Conception, Reyes J.B.L. and Endencia, JJ., concur.