Republic of the Philippines vs. IAC and Spouses Pastor (G.R. No. 69344. April 26, 1991)

26 Apr


Roberto L. Bautista for private respondents.



Republic of the Philippines, through the Bureau of Internal Revenue, commenced an action in the Court of First Instance (now Regional Trial Court), to collect from the spouses Antonio Pastor and Clara Reyes-Pastor deficiency income taxes for the years 1955 to 1959 with surcharge and monthly interest, and costs. The Pastors filed a motion to dismiss the complaint, but the motion was denied. They filed an answer admitting there was an assessment against them for income tax deficiency but denying liability therefor. They contended that they had availed of the tax amnesty under P.D.’s Nos. 23, 213 and 370 and had paid the corresponding amnesty taxes amounting of their reported untaxed income under P.D. 23, and a final payment on October 26, 1973 under P.D. 370 evidenced by the Government’s Official Receipt. The trial court held that the respondents had settled their income tax deficiency for the years 1955 to 1959, not under P.D. 23 or P.D. 370, but under P.D. 213.

The Government appealed to the Intermediate Appellant Court, alleging that the private respondents were not qualified to avail of the tax amnesty under P.D. 213 for the benefits of that decree are available only to persons who had no pending assessment for unpaid taxes, as provided in Revenue Regulations Nos. 8-72 and 7-73. Since the Pastors did in fact have a pending assessment against them, they were precluded from availing of the amnesty granted in P.D.’s Nos. 23 and 213. The Government further argued that “tax exemptions should be interpreted strictissimi juris against the taxpayer. The Intermediate Appellate Court (now Court of Appeals) rendered a decision dismissing the Government’s appeal and holding that the payment of deficiency income taxes by the Pastors under PD. No. 213, and the acceptance thereof by the Government, operated to divest the latter of its right to further recover deficiency income taxes from the private respondents pursuant to the existing deficiency tax assessment against them.


Whether or not the tax amnesty payments made by the private respondents bar an action for recovery of deficient income taxes under P.D.’s Nos. 23, 213 and 370.


YES. Petition for review is denied.


[T]he Government is estopped from collecting the difference between the deficiency tax assessment and the amount already paid by them as amnesty tax. The finding of the appellate court that the deficiency income taxes were paid by the Pastors, and accepted by the Government, under P.D. 213, granting amnesty to persons who are required by law to file income tax returns but who failed to do so, is entitled to the highest respect and may not be disturbed except under exceptional circumstances

The rule is that in case of doubt, tax statutes are to be construed strictly against the Government and liberally in favor of the taxpayer strictisimi juris for taxes, being burdens, are not to be presumed beyond what the applicable statute (in this case P.D. 213) expressly and clearly declares.


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