Commissioner of Internal Revenue vs. Nippon Express Philippines Corporation

The CTA En Banc has no certiorari jurisdiction over interlocutory orders or judgments issued by its own Divisions; such petitions for certiorari under Rule 65 are cognizable exclusively by the Supreme Court. The CTA En Banc's jurisdiction is strictly appellate and limited to final decisions, resolutions, or orders of the CTA Division, and the exercise of certiorari presupposes a relationship of superiority between distinct tribunals—a relationship that does not exist between the CTA En Banc and its Divisions, which are merely different organizational configurations of the same collegial court.

The Commissioner of Internal Revenue (CIR) is the head of the Bureau of Internal Revenue, the government agency tasked with assessing and collecting national internal revenue taxes. Nippon Express Philippines Corporation is a corporate taxpayer that sought a refund or issuance of a tax credit certificate for unutilized input value-added tax attributable to zero-rated sales. The Court of Tax Appeals (CTA) is a special collegial court of the same level as the Court of Appeals, created under Republic Act No. 1125, as amended by Republic Act Nos. 9282 and 9503, with exclusive jurisdiction over tax cases. The CTA may sit En Banc or in three Divisions, each Division consisting of three Justices. Under the statutory framework, the CTA En Banc exercises exclusive appellate jurisdiction over decisions, resolutions, or orders of the CTA Division on motions for reconsideration or new trial, while the CTA Division exercises original and appellate jurisdiction over tax cases arising from administrative agencies and lower courts. The Revised Rules of the Court of Tax Appeals (RRCTA), promulgated as A.M. No. 05-11-07-CTA, mirrors this jurisdictional framework but is silent on whether the CTA En Banc may entertain petitions for certiorari under Rule 65 assailing interlocutory orders of its own Divisions.

On January 15, 2021, Nippon Express Philippines Corporation filed a Petition for Review with the CTA Second Division, docketed as CTA Case No. 10450, seeking the refund or issuance of a tax credit certificate in the amount of PHP 43,068,252.54, allegedly representing its unutilized input value-added tax attributable to zero-rated sales made during the period from April 1 to June 30, 2018. The Commissioner of Internal Revenue, as respondent in that proceeding, sought and obtained several extensions of time to file an answer. On May 6, 2021, the CIR electronically filed and served its Answer to the Petition.

Despite the electronic filing, the CIR failed to submit the hard copy of its Answer as required under CTA En Banc Resolution No. 4-2021. On July 21, 2021, the CTA Division issued a Resolution noting the absence of the hard copy and setting the case for ex parte presentation of Nippon Express's evidence on September 8, 2021. The CIR moved for reconsideration, explaining that the former handling lawyer—who had been reassigned to another division of the bureau—had inadvertently failed to provide the CTA with the hard copy within the extended period, and that the hard copy had already been filed on October 4, 2021. The CIR urged the relaxation of procedural rules in the interest of substantial justice.

By its Resolution dated November 17, 2021, the CTA Division denied the CIR's Motion for Reconsideration, ruling that the former counsel's negligence was inexcusable, and maintained the ex parte hearing schedule. Aggrieved, the CIR elevated the matter to the CTA En Banc via a Petition for Certiorari under Rule 65 of the Rules of Court, docketed as CTA EB No. 2580, imputing grave abuse of discretion amounting to lack or excess of jurisdiction on the part of the CTA Division and arguing that Nippon Express should not be allowed to present its evidence ex parte.

On August 29, 2023, the CTA En Banc issued the assailed Decision dismissing the CIR's Petition for lack of jurisdiction. The CTA En Banc determined that it was without jurisdiction over the questioned Resolutions of the CTA Division, as these were interlocutory in nature. The dismissal resulted from the lack of a majority vote in favor of the petition, with four Associate Justices voting to dismiss and the Presiding Justice and three Associate Justices dissenting. The CIR filed a Motion for Reconsideration, arguing that the CTA En Banc possesses jurisdiction over a special civil action for certiorari under Rule 65 to assail interlocutory orders issued by a CTA Division. In its Resolution dated January 26, 2024, the CTA En Banc denied the Motion for Reconsideration for lack of merit, citing prior jurisprudence holding that the proper remedy to challenge interlocutory orders of a CTA Division is a petition for certiorari filed directly before the Supreme Court. Meanwhile, the CTA Division had promulgated a Decision on September 28, 2023, denying Nippon Express's Petition for lack of merit, and a Resolution on January 29, 2024, denying Nippon Express's motion for reconsideration on the main case—developments that rendered the present Petition moot.

• CTA En Banc's Inherent Certiorari Authority: Petitioner maintained that the CTA En Banc inherently possesses the authority to issue a writ of certiorari, when necessary, in aid of its appellate jurisdiction, adopting the position of CTA Presiding Justice Roman G. Del Rosario's Dissenting Opinion in CTA EB No. 2580.
• Hierarchy of Courts and Procedural Trap: Petitioner argued that if the CTA En Banc's dismissal of certiorari petitions for lack of jurisdiction were upheld, aggrieved parties would be forced to elevate such petitions directly to the Supreme Court, which would also be constrained to dismiss them on the ground that no prior petition had been filed before the CTA En Banc, pursuant to the principle of hierarchy of courts.
• Split-Jurisdiction Concern: Petitioner asserted that requiring parties to file an appeal before the CTA En Banc to question the decision of a CTA Division, while simultaneously filing a petition for certiorari before the Supreme Court to challenge an interlocutory order in the same case, would result in a split-jurisdiction scenario where both tribunals exercise jurisdiction over the same subject matter—an outcome undermining the orderly administration of justice.

• Proper Forum for Certiorari: Respondent countered that the proper remedy against an interlocutory order issued by a CTA Division is a petition for certiorari under Rule 65 filed directly before the Supreme Court, not with the CTA En Banc.
• CTA Divisions Are Not Lower Courts: Respondent argued that the CTA's certiorari power over interlocutory orders is limited to those issued by lower courts, and CTA Divisions are not lower courts in relation to the CTA En Banc.
• Limited Scope of CTA En Banc Certiorari: Respondent echoed the view that the proper interpretation of jurisprudence should be that the CTA En Banc's jurisdiction over a petition for certiorari under Rule 65 is limited to those involving a judgment or final order of a CTA Division that cannot be the subject of an appeal before the CTA En Banc, such as a judgment of acquittal, which by way of exception may still be reviewed by the CTA En Banc via certiorari.

• Jurisdiction over Certiorari: Whether the CTA En Banc gravely erred in dismissing the CIR's Petition for Certiorari on the ground that it has no jurisdiction over the same, i.e., whether a petition for certiorari under Rule 65 challenging an interlocutory order of a CTA Division falls under the jurisdiction of the Supreme Court or the CTA En Banc.
• Mootness: Whether the case should be resolved despite having been rendered moot by supervening developments in the main case before the CTA Division.

• Jurisdiction over Certiorari: No. The CTA En Banc has no jurisdiction over petitions for certiorari under Rule 65 assailing interlocutory orders of a CTA Division; such petitions are cognizable by the Supreme Court.
• Mootness: Yes, the case was rendered moot, but the Court resolved the jurisdictional issue as it is capable of repetition yet evading review and to formulate controlling principles to guide the bench, the bar, and the public.

• Jurisdiction over Certiorari: The CTA En Banc's jurisdiction is strictly appellate, confined to final decisions, resolutions, or orders of the CTA Division on motions for reconsideration or new trial, as expressly provided under Section 18 of Republic Act No. 1125, as amended by Republic Act No. 9282, and Section 2, Rule 4 of the RRCTA. Neither the enabling statutes nor the RRCTA expressly grants the CTA En Banc original certiorari jurisdiction over interlocutory orders of its Divisions. The exercise of certiorari presupposes a relationship of superiority—an act whereby a higher tribunal corrects the errors of a subordinate body. The CTA is a single collegial court; its En Banc and Divisions are merely different organizational configurations of the same judicial entity, not separate and distinct courts. No hierarchy exists between them. This principle was affirmed in Land Bank of the Philippines vs. Suntay and Commissioner of Internal Revenue vs. Kepco Ilijan Corporation, where the Court stressed that divisions of a collegial court are not separate courts and that there can be no hierarchy within a collegial court between its divisions and the En Banc. The CTA En Banc's appellate authority over final decisions does not equate to supervisory authority to issue writs of certiorari against its Divisions, because appellate jurisdiction deals with completed proceedings whereas supervisory jurisdiction through certiorari deals with ongoing proceedings—functions that are legally distinct. Allowing the CTA En Banc to entertain certiorari petitions against interlocutory orders of its Divisions would create a procedural anomaly whereby the same justices who issued the challenged order would adjudicate the alleged grave abuse of discretion stemming from their own actions, violating the maxim nemo debet esse judex in propria causa. The alleged implied authority of the CTA En Banc to issue certiorari cannot be deemed an inherent power emanating from its appellate jurisdiction, because the doctrine in City of Manila vs. Grecia-Cuerdo—which recognized the CTA's authority to issue writs of certiorari against interlocutory orders of the RTC in local tax cases—involved two distinct courts (the CTA and the RTC), not the same judicial entity reviewing its own internal units. Legislative intent behind Republic Act No. 9282, as reflected in Senate President Drilon's sponsorship speech, does not support characterizing the CTA En Banc as a superior tribunal over its Divisions; the amendment merely realigned appellate functions so that appeals from CTA Divisions would be resolved by the CTA En Banc instead of the Court of Appeals, promoting judicial specialization and efficiency. A consistent line of decisions—Commissioner of Internal Revenue vs. Court of Tax Appeals (CBK), Commissioner of Internal Revenue vs. Court of Tax Appeals (First Division) (PSPC), Commissioner of Internal Revenue vs. Court of Tax Appeals-Third Division (Citysuper), and Commissioner of Internal Revenue vs. Court of Tax Appeals Second Division (QL Development)—has held that the CTA En Banc has jurisdiction over final orders or judgments but not over interlocutory orders issued by the CTA Division, and that the proper remedy is a Rule 65 petition before the Supreme Court.

• Mootness: The case became moot because 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, denying Nippon Express's motion for reconsideration. There was no longer a justiciable controversy on the propriety of allowing the presentation of Nippon Express's evidence ex parte. Nevertheless, the Court exercised its discretion to resolve the jurisdictional issue under the recognized exception that a case capable of repetition yet evading review may be decided despite mootness, and to formulate controlling principles to guide the bench, the bar, and the public.

• Collegial Court Doctrine — No Internal Hierarchy — A collegial court's divisions are not separate and distinct courts but are divisions of one and the same court; there is no hierarchy of courts within a collegial court between its divisions and the En Banc. The actions taken and decisions rendered by any division are those of the court itself. Applied here to hold that the CTA En Banc is not a superior tribunal relative to its Divisions, and therefore cannot exercise certiorari jurisdiction over their interlocutory orders.

• Certiorari Requires Superiority — The writ of certiorari presupposes a relationship of superiority—an act whereby a higher tribunal corrects the errors of a subordinate body. Absent such hierarchy, the very premise of certiorari falls away, for without inferiority, there can be no supervisory correction. Applied to conclude that since the CTA En Banc and its Divisions are co-equal configurations of the same court, the CTA En Banc cannot issue writs of certiorari against its own Divisions.

• Appellate vs. Supervisory Jurisdiction Distinction — Appellate jurisdiction allows a court to review, reverse, affirm, or modify a final judgment or final order, requiring that proceedings are completed and a final disposition has been made. Supervisory jurisdiction, exercised through certiorari under Rule 65, is a remedy available while proceedings are still ongoing, addressing errors of jurisdiction. The two serve entirely different legal purposes. Applied to distinguish the CTA En Banc's appellate authority over final decisions from the supervisory power necessary to issue certiorari over interlocutory orders.

• Certiorari as an External Check — The procedural device of certiorari under Rule 65 is designed to serve as an external check upon grave abuse of discretion by a lower tribunal, presupposing a relationship between distinct judicial bodies—one subordinate, the other superior. Applied to hold that it is institutionally inappropriate for the CTA En Banc to exercise certiorari jurisdiction over interlocutory rulings of its own Divisions, as the same judicial entity would be reviewing its own prior conduct.

• Moot and Academic Exceptions — Courts will decide cases otherwise moot and academic if: (1) there is a grave violation of the Constitution; (2) the exceptional character of the situation and paramount public interest is involved; (3) the constitutional issue raised requires formulation of controlling principles to guide the bench, the bar, and the public; or (4) the case is capable of repetition yet evading review. Applied to justify resolution of the jurisdictional issue despite the case having been rendered moot.

• "the CTA En Banc has no certiorari power over the interlocutory issuances of its Division. Instead, petitions for certiorari assailing interlocutory orders or judgments of the CTA Divisions are cognizable by the Supreme Court." — This is the opening statement of the decision, articulating the core ruling and the Court's definitive clarification of the jurisdictional framework.

• "As such, the exercise of certiorari presupposes a relationship of superiority—an act whereby a higher tribunal corrects the errors of a subordinate body. Absent such hierarchy, the very premise of certiorari falls away, for without inferiority, there can be no supervisory correction." — This passage defines the doctrinal foundation for the ruling, explaining why certiorari cannot lie within the same collegial court.

• "The CTA En Banc and the CTA Division are merely configurations of the same judicial entity, exercising jurisdiction over tax cases as conferred by law. The CTA En Banc is not a separate tribunal relative to its Divisions; rather, it is the same tribunal convened in fuller assembly to exercise specific and limited appellate jurisdiction as vested by the law, not a higher court in a hierarchical sense." — This passage articulates the structural principle that the CTA En Banc and its Divisions are one court, not two tiers, which is central to the holding.

• "the silence of the Rules may be attributed to the need to preserve the principles that there can be no hierarchy within a collegial court between its divisions and the en banc, and that a court's judgment, once final, is immutable." — This quotation from Commissioner of Internal Revenue vs. Kepco Ilijan Corporation, adopted by the majority, underscores the jurisprudential basis for refusing to recognize an internal hierarchy within the CTA.

• Commissioner of Internal Revenue vs. Court of Tax Appeals and CBK Power Company Limited, 765 Phil. 140 (2015) — Controlling precedent. The Court held that the CTA En Banc has jurisdiction over a final order or judgment but not over interlocutory orders issued by the CTA Division, and that the proper remedy against an interlocutory order is a petition for certiorari before the Supreme Court. Applied directly to the present case, which involved an identical procedural posture—a CTA Division order declaring a party in default and allowing ex parte presentation of evidence.

• City of Manila vs. Grecia-Cuerdo, 726 Phil. 9 (2014) — Distinguished. The Court recognized the CTA's authority to issue writs of certiorari against interlocutory orders of the RTC in local tax cases, in aid of its appellate jurisdiction. The majority distinguished this case on the ground that it involved two distinct courts—the CTA and the RTC—whereas the present case involves the same judicial entity reviewing its own internal units.

• Commissioner of Internal Revenue vs. Kepco Ilijan Corporation, 787 Phil. 698 (2016) — Followed. The Court refused to recognize the CTA En Banc's power to annul a final and executory decision of one of its Divisions, stressing that there can be no hierarchy within a collegial court between its divisions and the En Banc. Applied to support the conclusion that the CTA En Banc is not a superior tribunal relative to its Divisions.

• Land Bank of the Philippines vs. Suntay, 678 Phil. 879 (2011) — Followed. The Court held that divisions of a court are not separate and distinct courts but are divisions of one and the same court. Applied by analogy to the CTA as a collegial court.

• People vs. Court of Tax Appeals-Third Division (Ligot), 932 Phil. 139 (2022) — Distinguished. The Court held that the CTA En Banc has jurisdiction over a Rule 65 petition assailing a CTA Division's judgment of acquittal. The majority distinguished this case on the ground that it involved a final judgment of acquittal, not an interlocutory order, and that the finality-of-acquittal doctrine and double jeopardy considerations justified a different procedural treatment.

• Payumo vs. Sandiganbayan, 669 Phil. 545 (2011) — Cited for the definition of "collegial" as relating to a collegium or group of colleagues, where members act on the basis of consensus or majority rule.

• Madrigal Transport, Inc. vs. Lapanday Holdings Corporation, 479 Phil. 768 (2004) — Cited for the substantial distinctions between appeal and certiorari as to purpose and subject matter, supporting the distinction between appellate and supervisory jurisdiction.

• Pepsi-Cola Bottling Company vs. Martinez, 198 Phil. 296 (1982) — Cited for the principle that jurisdiction is never presumed but must be conferred by law in words that do not admit of doubt.

• Lim Tanhu vs. Ramolete, 160 Phil. 1101 (1975) — Cited for the essential purpose of certiorari as keeping proceedings in lower courts and tribunals within legal bounds.

• Section 7, Republic Act No. 1125, as amended by Republic Act Nos. 9282 and 9503 — Defines the jurisdiction of the CTA, including its exclusive appellate jurisdiction over decisions of the CIR, the Commissioner of Customs, the Secretary of Finance, the Central Board of Assessment Appeals, and the RTCs in local tax and tax collection cases. Applied to establish that the CTA's jurisdiction is statutory and limited to what is expressly conferred.

• Section 18, Republic Act No. 1125, as amended by Republic Act No. 9282 — Provides that a party adversely affected by a resolution of a Division of the CTA on a motion for reconsideration or new trial may file a petition for review with the CTA En Banc. Applied to show that the CTA En Banc's appellate jurisdiction is limited to resolutions on motions for reconsideration or new trial, presupposing a final disposition.

• Section 2, Rule 4, A.M. No. 05-11-07-CTA (RRCTA) — Enumerates the cases within the exclusive appellate jurisdiction of the CTA En Banc, including decisions or resolutions on motions for reconsideration or new trial of the CTA in Divisions. Applied to confirm that the CTA En Banc's jurisdiction is strictly appellate and confined to final dispositions.

• Section 2, Rule 2, A.M. No. 05-11-07-CTA (RRCTA) — Provides that the CTA shall sit En Banc in the exercise of its administrative, ceremonial, and non-adjudicative functions. Applied to show that the RRCTA does not grant the CTA En Banc original adjudicatory jurisdiction over interlocutory orders of its Divisions.

• Section 2, Republic Act No. 1125, as amended — Provides that the CTA may sit En Banc or in three Divisions, each Division consisting of three Justices, and that five affirmative votes of the Court En Banc are necessary to reverse a decision of a Division. Applied to demonstrate that the CTA is one judicial entity with different procedural compositions, and to highlight the voting-threshold dissonance that would arise if certiorari were allowed before the En Banc.

• Section 1, Rule 65, Rules of Court — Governs the petition for certiorari, available when a tribunal, board, or officer exercising judicial or quasi-judicial functions has acted without or in excess of jurisdiction or with grave abuse of discretion, and there is no appeal or plain, speedy, and adequate remedy in the ordinary course of law. Applied to define the nature and requisites of the writ.

• Section 1, Rule 41, Rules of Court — Provides that no appeal may be taken from an interlocutory order, and that in such instances the aggrieved party may file an appropriate special civil action under Rule 65. Applied to establish that interlocutory orders are not appealable and may only be assailed through certiorari.

• Section 6, Rule 135, Rules of Court — Provides that when by law jurisdiction is conferred on a court or judicial officer, all auxiliary writs, processes, and other means necessary to carry it into effect may be employed. Cited by the dissenting opinions in support of the argument that the CTA En Banc's appellate jurisdiction carries with it the implied power to issue writs of certiorari in aid thereof.

• Section 1, Article VIII, 1987 Constitution — Vests judicial power in the Supreme Court and such lower courts as may be established by law, including the duty to determine whether there has been grave abuse of discretion amounting to lack or excess of jurisdiction. Cited in Grecia-Cuerdo as the constitutional basis for the CTA's power to issue writs of certiorari; distinguished by the majority as applicable only to the CTA's authority over lower courts, not over its own Divisions.

• Gesmundo, C.J.
• Hernando, J.
• Gaerlan, J.
• J. Lopez, J.
• Dimaampao, J.
• Marquez, J.
• Kho, Jr., J.
• Singh, J. (concurring and on leave)

Caguioa, J. filed a Separate Concurring Opinion emphasizing that the precise question had already been directly addressed and resolved by the Court in a consistent line of decisions (CBK, PSPC, Citysuper, and QL Development), and that Grecia-Cuerdo does not authorize the CTA En Banc to exercise certiorari over interlocutory orders of its own Divisions because that case involved a hierarchical relationship between two distinct courts—the CTA and the RTC. Justice Caguioa further stressed that the legislative intent behind Republic Act No. 9282 did not support characterizing the CTA En Banc as a superior tribunal over its Divisions, and that the proper process for challenging interlocutory orders requires first filing a motion for reconsideration before the CTA Division that issued the order, followed by a Rule 65 petition before the Supreme Court.

• Leonen, SAJ — Concurred with the majority that the petition should be denied as moot, but maintained that a petition for certiorari under Rule 65 challenging an interlocutory order of a CTA Division falls under the jurisdiction of the CTA En Banc. Justice Leonen argued that the CTA is the only collegial court that sits En Banc to review decisions of its own divisions, creating a semblance of hierarchy that enables it to take cognizance of certiorari petitions. Relying on Grecia-Cuerdo and People vs. Court of Tax Appeals (Ligot), he contended that the grant of exclusive appellate jurisdiction to the CTA En Banc carries with it the power to issue writs of certiorari in aid of such jurisdiction, and that the rule requiring express conferment of certiorari power applies only to quasi-judicial tribunals, not to regular courts like the CTA.

• Lazaro-Javier, J. — Dissented, arguing that the CTA En Banc possesses certiorari jurisdiction over interlocutory orders of its Divisions. Justice Lazaro-Javier contended that the Rules of Court, which have suppletory application to the RRCTA, provide that all auxiliary writs necessary to carry jurisdiction into effect may be employed, and that under Grecia-Cuerdo, the grant of appellate jurisdiction carries with it the power to issue writs of certiorari in aid thereof. She further argued that recognizing the CTA En Banc's authority would be more in keeping with the doctrine of hierarchy of courts, as direct recourse to the Supreme Court is improper absent special and important reasons.

• Inting, J. — Concurred that the petition was moot but dissented from the majority's core ruling. Justice Inting argued that the power to issue a writ of certiorari is a constitutional grant inherent in judicial power under Section 1, Article VIII of the 1987 Constitution, not a mere statutory creation. He contended that the majority's reliance on Kepco was misplaced because the statement regarding the absence of hierarchy within a collegial court was obiter dictum, and that CBK did not fully account for the qualifying clause in Section 1, Rule 41 allowing Rule 65 petitions for non-appealable orders. He further argued that a functional hierarchy exists within the CTA by legislative design, that the nemo judex principle is inapplicable given Congress's deliberate two-tiered structure, and that mandating direct recourse to the Supreme Court violates the doctrine of hierarchy of courts.

• M. Lopez, J. — Dissented, arguing that the CTA En Banc has primary jurisdiction to determine grave abuse of discretion on all interlocutory orders issued by its Divisions. Justice Lopez contended that the CTA En Banc is effectively a separate and distinct court from its Divisions because, unlike the Supreme Court or the Court of Appeals En Banc, it exercises appellate jurisdiction over its Divisions. Relying on Grecia-Cuerdo and legislative deliberations, he argued that Congress transferred the Court of Appeals' appellate jurisdiction over CTA decisions to the CTA En Banc, creating two courts with unique jurisdictions, and that the CTA En Banc's certiorari power over its Divisions is consistent with the doctrine of hierarchy of courts.

• Rosario, J. — Joined the dissenting opinion of Justice Lazaro-Javier.