Marcos II v CA

GR No 120880, June 5, 1997

FACTS:
The Cir is being questioned by petitioner for assessing and collecting through the
summary remedy of levy on real property, estate and income tax delinquencies upon
the estate and properties of the late Ferdinand Marcos despite the pendency of the
proceedings on the probate of the will of the late president.

ISSUE:
Are summary tax remedies affected by the probate proceedings?

RULING:
No. From the foregoing, it is discernible that 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 be therefore be argued that the tax bureau erred in
proceeding with the levying sale of the properties on the ground that it was required to
seek court approval.

Digest # 2

MARCOS II vs. CA
273 SCRA 47, GR No. 120880, June 5, 1997
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 after it failed to file estate tax returns. 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.
Petitioner also pointed out that applying Memorandum Circular No. 38-68, the BIR's
Notices of Levy on the Marcos properties were issued beyond the allowed period, and
are therefore null and void.

Issue:
Whether or not the contentions of Bongbong Marcos are correct
Ruling:
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's estate is not a mandatory requirement in the collection of estate taxes. 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.
On the issue of prescription, the omission to file an estate tax return, and the subsequent
failure to contest or appeal the assessment made by the BIR is fatal to the petitioner's
cause, as under Sec.223 of the NIRC, in case of failure to file a return, the tax may be
assessed at anytime within 10 years after the omission, and any tax so assessed may be
collected by levy upon real property within 3 years (now 5 years) following the
assessment of the tax. Since the estate tax assessment had become final and
unappealable by the petitioner's default as regards protesting the validity of the said
assessment, there is no reason why the BIR cannot continue with the collection of the
said tax.

G.R. No. 120880 June 5, 1997

FERDINAND R. MARCOS II, petitioner,

vs.
COURT OF APPEALS, THE COMMISSIONER OF THE BUREAU OF INTERNAL
REVENUE and HERMINIA D. DE GUZMAN, respondents.

TORRES, JR., J.:

In this Petition for Review on Certiorari, Government action is once again assailed as
precipitate and unfair, suffering the basic and oftly implored requisites of due process
of law. Specifically, the petition assails the Decision 1of the Court of Appeals dated
November 29, 1994 in CA-G.R. SP No. 31363, where the said court held:

In view of all the foregoing, we rule that the deficiency income tax
assessments and estate tax assessment, are already final and
(u)nappealable-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.

WHEREFORE, premises considered, judgment is hereby rendered

DISMISSING the petition for certiorari with prayer for Restraining Order
and Injunction.

No pronouncements as to costs.

SO ORDERED.

More than seven years since the demise of the late Ferdinand E. Marcos, the former
President of the Republic of the Philippines, the matter of the settlement of his estate,
and its dues to the government in estate taxes, are still unresolved, the latter issue being
now before this Court for resolution. Specifically, petitioner Ferdinand R. Marcos II, the
eldest son of the decedent, questions the actuations of the respondent Commissioner of
Internal Revenue in assessing, and collecting through the summary remedy of Levy on
Real Properties, estate and income tax delinquencies upon the estate and properties of
his father, despite the pendency of the proceedings on probate of the will of the late
president, which is docketed as Sp. Proc. No. 10279 in the Regional Trial Court of Pasig,
Branch 156.

Petitioner had filed with the respondent Court of Appeals a Petition for Certiorari and
Prohibition with an application for writ of preliminary injunction and/or temporary
restraining order on June 28, 1993, seeking to —

I. Annul and set aside the Notices of Levy on real property dated February
22, 1993 and May 20, 1993, issued by respondent Commissioner of Internal
Revenue;

II. Annul and set aside the Notices of Sale dated May 26, 1993;

III. Enjoin the Head Revenue Executive Assistant Director II (Collection

Service), from proceeding with the Auction of the real properties covered
by Notices of Sale.
After the parties had pleaded their case, the Court of Appeals rendered its Decision 2 on
November 29, 1994, ruling that the deficiency assessments for estate and income tax
made upon the petitioner and the estate of the deceased President Marcos have already
become final and unappealable, and may thus be enforced by the summary remedy of
levying upon the properties of the late President, as was done by the respondent
Commissioner of Internal Revenue.

WHEREFORE, premises considered judgment is hereby rendered

DISMISSING the petition for Certiorari with prayer for Restraining Order
and Injunction.

No pronouncements as to cost.

SO ORDERED.

Unperturbed, petitioner is now before us assailing the validity of the appellate court's
decision, assigning the following as errors:

A. RESPONDENT COURT MANIFESTLY ERRED IN RULING THAT

THE SUMMARY TAX REMEDIES RESORTED TO BY THE
GOVERNMENT ARE NOT AFFECTED AND PRECLUDED BY THE
PENDENCY OF THE SPECIAL PROCEEDING FOR THE ALLOWANCE
OF THE LATE PRESIDENT'S ALLEGED WILL. TO THE CONTRARY,
THIS PROBATE PROCEEDING PRECISELY PLACED ALL PROPERTIES
WHICH FORM PART OF THE LATE PRESIDENT'S ESTATE IN
CUSTODIA LEGIS OF THE PROBATE COURT TO THE EXCLUSION OF
ALL OTHER COURTS AND ADMINISTRATIVE AGENCIES.

B. RESPONDENT COURT ARBITRARILY ERRED IN SWEEPINGLY

DECIDING THAT SINCE THE TAX ASSESSMENTS OF PETITIONER
AND HIS PARENTS HAD ALREADY BECOME FINAL AND
UNAPPEALABLE, THERE WAS NO NEED TO GO INTO THE MERITS
OF THE GROUNDS CITED IN THE PETITION. INDEPENDENT OF
WHETHER THE TAX ASSESSMENTS HAD ALREADY BECOME FINAL,
HOWEVER, PETITIONER HAS THE RIGHT TO QUESTION THE
UNLAWFUL MANNER AND METHOD IN WHICH TAX COLLECTION
IS SOUGHT TO BE ENFORCED BY RESPONDENTS COMMISSIONER
AND DE GUZMAN. THUS, RESPONDENT COURT SHOULD HAVE
FAVORABLY CONSIDERED THE MERITS OF THE FOLLOWING
GROUNDS IN THE PETITION:
 (1) The Notices of Levy on Real Property were issued
beyond the period provided in the Revenue Memorandum
Circular No. 38-68.

(2) [a] The numerous pending court cases questioning the

late President's ownership or interests in several properties
(both personal and real) make the total value of his estate,
and the consequent estate tax due, incapable of exact
pecuniary determination at this time. Thus, respondents'
assessment of the estate tax and their issuance of the Notices
of Levy and Sale are premature, confiscatory and oppressive.

[b] Petitioner, as one of the late President's compulsory heirs,

was never notified, much less served with copies of the
Notices of Levy, contrary to the mandate of Section 213 of
the NIRC. As such, petitioner was never given an
opportunity to contest the Notices in violation of his right to
due process of law.

C. ON ACCOUNT OF THE CLEAR MERIT OF THE PETITION,

RESPONDENT COURT MANIFESTLY ERRED IN RULING THAT IT
HAD NO POWER TO GRANT INJUNCTIVE RELIEF TO PETITIONER.
SECTION 219 OF THE NIRC NOTWITHSTANDING, COURTS POSSESS
THE POWER TO ISSUE A WRIT OF PRELIMINARY INJUNCTION TO
RESTRAIN RESPONDENTS COMMISSIONER'S AND DE GUZMAN'S
ARBITRARY METHOD OF COLLECTING THE ALLEGED DEFICIENCY
ESTATE AND INCOME TAXES BY MEANS OF LEVY.

The facts as found by the appellate court are undisputed, and are hereby adopted:

On September 29, 1989, former President Ferdinand Marcos died in

Honolulu, Hawaii, USA.

On June 27, 1990, a Special Tax Audit Team was created to conduct
investigations and examinations of the tax liabilities and obligations of the
late president, as well as that of his family, associates and "cronies". Said
audit team concluded its investigation with a Memorandum dated July 26,
1991. The investigation disclosed that the Marcoses failed to file a written
notice of the death of the decedent, an estate tax returns [sic], as well as
several income tax returns covering the years 1982 to 1986, — all in
violation of the National Internal Revenue Code (NIRC).
Subsequently, criminal charges were filed against Mrs. Imelda R. Marcos
before the Regional Trial of Quezon City for violations of Sections 82, 83
and 84 (has penalized under Sections 253 and 254 in relation to Section 252
— a & b) of the National Internal Revenue Code (NIRC).

The Commissioner of Internal Revenue thereby caused the preparation

and filing of the Estate Tax Return for the estate of the late president, the
Income Tax Returns of the Spouses Marcos for the years 1985 to 1986, and
the Income Tax Returns of petitioner Ferdinand "Bongbong" Marcos II for
the years 1982 to 1985.

On July 26, 1991, the BIR issued the following: (1) Deficiency estate tax
assessment no. FAC-2-89-91-002464 (against the estate of the late president
Ferdinand Marcos in the amount of P23,293,607,638.00 Pesos); (2)
Deficiency income tax assessment no. FAC-1-85-91-002452 and Deficiency
income tax assessment no. FAC-1-86-91-002451 (against the Spouses
Ferdinand and Imelda Marcos in the amounts of P149,551.70 and
P184,009,737.40 representing deficiency income tax for the years 1985 and
1986); (3) Deficiency income tax assessment nos. FAC-1-82-91-002460 to
FAC-1-85-91-002463 (against petitioner Ferdinand "Bongbong" Marcos II
in the amounts of P258.70 pesos; P9,386.40 Pesos; P4,388.30 Pesos; and
P6,376.60 Pesos representing his deficiency income taxes for the years 1982
to 1985).

The Commissioner of Internal Revenue avers that copies of the deficiency

estate and income tax assessments were all personally and constructively
served on August 26, 1991 and September 12, 1991 upon Mrs. Imelda
Marcos (through her caretaker Mr. Martinez) at her last known address at
No. 204 Ortega St., San Juan, M.M. (Annexes "D" and "E" of the Petition).
Likewise, copies of the deficiency tax assessments issued against
petitioner Ferdinand "Bongbong" Marcos II were also personally and
constructively served upon him (through his caretaker) on September 12,
1991, at his last known address at Don Mariano Marcos St. corner P.
Guevarra St., San Juan, M.M. (Annexes "J" and "J-1" of the Petition).
Thereafter, Formal Assessment notices were served on October 20, 1992,
upon Mrs. Marcos c/o petitioner, at his office, House of Representatives,
Batasan Pambansa, Quezon City. Moreover, a notice to Taxpayer inviting
Mrs. Marcos (or her duly authorized representative or counsel), to a
conference, was furnished the counsel of Mrs. Marcos, Dean Antonio
Coronel — but to no avail.
 The deficiency tax assessments were not protested administratively, by
Mrs. Marcos and the other heirs of the late president, within 30 days from
service of said assessments.

On February 22, 1993, the BIR Commissioner issued twenty-two notices of

levy on real property against certain parcels of land owned by the
Marcoses — to satisfy the alleged estate tax and deficiency income taxes of
Spouses Marcos.

On May 20, 1993, four more Notices of Levy on real property were issued
for the purpose of satisfying the deficiency income taxes.

On May 26, 1993, additional four (4) notices of Levy on real property were
again issued. The foregoing tax remedies were resorted to pursuant to
Sections 205 and 213 of the National Internal Revenue Code (NIRC).

In response to a letter dated March 12, 1993 sent by Atty. Loreto Ata
(counsel of herein petitioner) calling the attention of the BIR and
requesting that they be duly notified of any action taken by the BIR
affecting the interest of their client Ferdinand "Bongbong" Marcos II, as
well as the interest of the late president — copies of the aforesaid notices
were, served on April 7, 1993 and on June 10, 1993, upon Mrs. Imelda
Marcos, the petitioner, and their counsel of record, "De Borja, Medialdea,
Ata, Bello, Guevarra and Serapio Law Office".

Notices of sale at public auction were posted on May 26, 1993, at the lobby
of the City Hall of Tacloban City. The public auction for the sale of the
eleven (11) parcels of land took place on July 5, 1993. There being no
bidder, the lots were declared forfeited in favor of the government.

On June 25, 1993, petitioner Ferdinand "Bongbong" Marcos II filed the

instant petition for certiorari and prohibition under Rule 65 of the Rules of
Court, with prayer for temporary restraining order and/or writ of
preliminary injunction.

It has been repeatedly observed, and not without merit, that the enforcement of tax laws
and the collection of taxes, is of paramount importance for the sustenance of
government. Taxes are the lifeblood of the government and should be collected without
unnecessary hindrance. However, such collection should be made in accordance with
law as any arbitrariness will negate the very reason for government itself. It is therefore
necessary to reconcile the apparently conflicting interests of the authorities and the
taxpayers so that the real purpose of taxation, which is the promotion of the common
good, may be achieved. 3
Whether or not the proper avenues of assessment and collection of the said tax
obligations were taken by the respondent Bureau is now the subject of the Court's
inquiry.

Petitioner posits that notices of levy, notices of sale, and subsequent sale of properties of
the late President Marcos effected by the BIR are null and void for disregarding the
established procedure for the enforcement of taxes due upon the estate of the deceased.
The case of Domingo vs. Garlitos 4 is specifically cited to bolster the argument that "the
ordinary procedure by which to settle claims of indebtedness against the estate of a
deceased, person, as in an inheritance (estate) tax, is for the claimant to present a claim
before the probate court so that said court may order the administrator to pay the
amount therefor." This remedy is allegedly, exclusive, and cannot be effected through
any other means.

Petitioner goes further, submitting that the probate court is not precluded from denying
a request by the government for the immediate payment of taxes, and should order the
payment of the same only within the period fixed by the probate court for the payment
of all the debts of the decedent. In this regard, petitioner cites the case of Collector of
Internal Revenue vs. The Administratrix of the Estate of Echarri (67 Phil 502), where it was
held that:

The case of Pineda vs. Court of First Instance of Tayabas and Collector of
Internal Revenue (52 Phil 803), relied upon by the petitioner-appellant is
good authority on the proposition that the court having control over the
administration proceedings has jurisdiction to entertain the claim
presented by the government for taxes due and to order the administrator
to pay the tax should it find that the assessment was proper, and that the
tax was legal, due and collectible. And the rule laid down in that case
must be understood in relation to the case of Collector of Customs
vs. Haygood, supra., as to the procedure to be followed in a given case by
the government to effectuate the collection of the tax. Categorically stated,
where during the pendency of judicial administration over the estate of a
deceased person a claim for taxes is presented by the government, the
court has the authority to order payment by the administrator; but, in the
same way that it has authority to order payment or satisfaction, it also has
the negative authority to deny the same. While there are cases where
courts are required to perform certain duties mandatory and ministerial in
character, the function of the court in a case of the present character is not
one of them; and here, the court cannot be an organism endowed with
latitude of judgment in one direction, and converted into a mere
mechanical contrivance in another direction.
On the other hand, it is argued by the BIR, that the state's authority to collect internal
revenue taxes is paramount. Thus, the pendency of probate proceedings over the estate
of the deceased does not preclude the assessment and collection, through summary
remedies, of estate taxes over the same. According to the respondent, claims for
payment of estate and income taxes due and assessed after the death of the decedent
need not be presented in the form of a claim against the estate. These can and should be
paid immediately. The probate court is not the government agency to decide whether
an estate is liable for payment of estate of income taxes. Well-settled is the rule that the
probate court is a court with special and limited jurisdiction.

Concededly, the authority of the Regional Trial Court, sitting, albeit with limited
jurisdiction, as a probate court over estate of deceased individual, is not a trifling thing.
The court's jurisdiction, once invoked, and made effective, cannot be treated with
indifference nor should it be ignored with impunity by the very parties invoking its
authority.

In testament to this, it has been held that it is within the jurisdiction of the probate court
to approve the sale of properties of a deceased person by his prospective heirs before
final adjudication; 5 to determine who are the heirs of the decedent; 6 the recognition of
a natural child; 7 the status of a woman claiming to be the legal wife of the
decedent; 8 the legality of disinheritance of an heir by the testator; 9 and to pass upon
the validity of a waiver of hereditary rights. 10

The pivotal question the court is tasked to resolve refers to the authority of the Bureau
of Internal Revenue to collect by the summary remedy of levying upon, and sale of real
properties of the decedent, estate tax deficiencies, without the cognition and authority
of the court sitting in probate over the supposed will of the deceased.

The nature of the process of estate tax collection has been described as follows:

Strictly speaking, the assessment of an inheritance tax does not directly

involve the administration of a decedent's estate, although it may be
viewed as an incident to the complete settlement of an estate, and, under
some statutes, it is made the duty of the probate court to make the amount
of the inheritance tax a part of the final decree of distribution of the estate.
It is not against the property of decedent, nor is it a claim against the
estate as such, but it is against the interest or property right which the
heir, legatee, devisee, etc., has in the property formerly held by decedent.
Further, under some statutes, it has been held that it is not a suit or
controversy between the parties, nor is it an adversary proceeding
between the state and the person who owes the tax on the inheritance.
However, under other statutes it has been held that the hearing and
determination of the cash value of the assets and the determination of the
 tax are adversary proceedings. The proceeding has been held to be
necessarily a proceeding in rem. 11

In the Philippine experience, the enforcement and collection of estate tax, is executive in
character, as the legislature has seen it fit to ascribe this task to the Bureau of Internal
Revenue. Section 3 of the National Internal Revenue Code attests to this:

Sec. 3. Powers and duties of the Bureau. — The powers and duties of the
Bureau of Internal Revenue shall comprehend the assessment and
collection of all national internal revenue taxes, fees, and charges, and the
enforcement of all forfeitures, penalties, and fines connected therewith,
including the execution of judgments in all cases decided in its favor by
the Court of Tax Appeals and the ordinary courts. Said Bureau shall also
give effect to and administer the supervisory and police power conferred
to it by this Code or other laws.

Thus, it was in Vera vs. Fernandez 12 that the court recognized the liberal treatment of
claims for taxes charged against the estate of the decedent. Such taxes, we said, were
exempted from the application of the statute of non-claims, and this is justified by the
necessity of government funding, immortalized in the maxim that taxes are the
lifeblood of the government. Vectigalia nervi sunt rei publicae — taxes are the sinews of
the state.

Taxes assessed against the estate of a deceased person, after

administration is opened, need not be submitted to the committee on
claims in the ordinary course of administration. In the exercise of its
control over the administrator, the court may direct the payment of such
taxes upon motion showing that the taxes have been assessed against the
estate.

Such liberal treatment of internal revenue taxes in the probate proceedings extends so
far, even to allowing the enforcement of tax obligations against the heirs of the
decedent, even after distribution of the estate's properties.

Claims for taxes, whether assessed before or after the death of the
deceased, can be collected from the heirs even after the distribution of the
properties of the decedent. They are exempted from the application of the
statute of non-claims. The heirs shall be liable therefor, in proportion to
their share in the inheritance. 13

Thus, the Government has two ways of collecting the taxes in question.
One, by going after all the heirs and collecting from each one of them the
amount of the tax proportionate to the inheritance received. Another
 remedy, pursuant to the lien created by Section 315 of the Tax Code upon
all property and rights to property belong to the taxpayer for unpaid
income tax, is by subjecting said property of the estate which is in the
hands of an heir or transferee to the payment of the tax due the estate.
(Commissioner of Internal Revenue vs. Pineda, 21 SCRA 105, September
15, 1967.)

From the foregoing, it is discernible that 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.

If there is any issue as to the validity of the BIR's decision to assess the estate taxes, this
should have been pursued through the proper administrative and judicial avenues
provided for by law.

Section 229 of the NIRC tells us how:

Sec. 229. Protesting of assessment. — When the Commissioner of Internal

Revenue or his duly authorized representative finds that proper taxes
should be assessed, he shall first notify the taxpayer of his findings.
Within a period to be prescribed by implementing regulations, the
taxpayer shall be required to respond to said notice. If the taxpayer fails to
respond, the Commissioner shall issue an assessment based on his
findings.

Such assessment may be protested administratively by filing a request for

reconsideration or reinvestigation in such form and manner as may be
prescribed by implementing regulations within (30) days from receipt of
the assessment; otherwise, the assessment shall become final and
unappealable.
 If the protest is denied in whole or in part, the individual, association or
corporation adversely affected by the decision on the protest may appeal
to the Court of Tax Appeals within thirty (30) days from receipt of said
decision; otherwise, the decision shall become final, executory and
demandable. (As inserted by P.D. 1773)

Apart from failing to file the required estate tax return within the time required for the
filing of the same, petitioner, and the other heirs never questioned the assessments
served upon them, allowing the same to lapse into finality, and prompting the BIR to
collect the said taxes by levying upon the properties left by President Marcos.

Petitioner submits, however, that "while the assessment of taxes may have been validly
undertaken by the Government, collection thereof may have been done in violation of
the law. Thus, the manner and method in which the latter is enforced may be
questioned separately, and irrespective of the finality of the former, because the
Government does not have the unbridled discretion to enforce collection without regard
to the clear provision of law." 14

Petitioner specifically points out that applying Memorandum Circular No. 38-68,
implementing Sections 318 and 324 of the old tax code (Republic Act 5203), the BIR's
Notices of Levy on the Marcos properties, were issued beyond the allowed period, and
are therefore null and void:

. . . the Notices of Levy on Real Property (Annexes O to NN of Annex C of

this Petition) in satisfaction of said assessments were still issued by
respondents well beyond the period mandated in Revenue Memorandum
Circular No. 38-68. These Notices of Levy were issued only on 22
February 1993 and 20 May 1993 when at least seventeen (17) months had
already lapsed from the last service of tax assessment on 12 September
1991. As no notices of distraint of personal property were first issued by
respondents, the latter should have complied with Revenue
Memorandum Circular No. 38-68 and issued these Notices of Levy not
earlier than three (3) months nor later than six (6) months from 12
September 1991. In accordance with the Circular, respondents only had
until 12 March 1992 (the last day of the sixth month) within which to issue
these Notices of Levy. The Notices of Levy, having been issued beyond
the period allowed by law, are thus void and of no effect. 15

We hold otherwise. The Notices of Levy upon real property were issued within the
prescriptive period and in accordance with the provisions of the present Tax Code. The
deficiency tax assessment, having already become final, executory, and demandable, the
same can now be collected through the summary remedy of distraint or levy pursuant
to Section 205 of the NIRC.
The applicable provision in regard to the prescriptive period for the assessment and
collection of tax deficiency in this instance is Article 223 of the NIRC, which pertinently
provides:

Sec. 223. Exceptions as to a period of limitation of assessment and

collection of taxes. — (a) In the case of a false or fraudulent return with
intent to evade tax or of a failure to file a return, the tax may be assessed,
or a proceeding in court for the collection of such tax may be begun
without assessment, at any time within ten (10) years after the discovery
of the falsity, fraud, or omission: Provided, That, in a fraud assessment
which has become final and executory, the fact of fraud shall be judicially
taken cognizance of in the civil or criminal action for the collection thereof.

xxx xxx xxx

(c) Any internal revenue tax which has been assessed within the period of
limitation above prescribed, may be collected by distraint or levy or by a
proceeding in court within three years following the assessment of the tax.

xxx xxx xxx

The omission to file an estate tax return, and the subsequent failure to contest or appeal
the assessment made by the BIR is fatal to the petitioner's cause, as under the above-
cited provision, in case of failure to file a return, the tax may be assessed at any time
within ten years after the omission, and any tax so assessed may be collected by levy
upon real property within three years following the assessment of the tax. Since the
estate tax assessment had become final and unappealable by the petitioner's default as
regards protesting the validity of the said assessment, there is now no reason why the
BIR cannot continue with the collection of the said tax. Any objection against the
assessment should have been pursued following the avenue paved in Section 229 of the
NIRC on protests on assessments of internal revenue taxes.

Petitioner further argues that "the numerous pending court cases questioning the late
president's ownership or interests in several properties (both real and personal) make
the total value of his estate, and the consequent estate tax due, incapable of exact
pecuniary determination at this time. Thus, respondents' assessment of the estate tax
and their issuance of the Notices of Levy and sale are premature and oppressive." He
points out the pendency of Sandiganbayan Civil Case Nos. 0001-0034 and 0141, which
were filed by the government to question the ownership and interests of the late
President in real and personal properties located within and outside the Philippines.
Petitioner, however, omits to allege whether the properties levied upon by the BIR in
the collection of estate taxes upon the decedent's estate were among those involved in
the said cases pending in the Sandiganbayan. Indeed, the court is at a loss as to how
these cases are relevant to the matter at issue. The mere fact that the decedent has
pending cases involving ill-gotten wealth does not affect the enforcement of tax
assessments over the properties indubitably included in his estate.

Petitioner also expresses his reservation as to the propriety of the BIR's total assessment
of P23,292,607,638.00, stating that this amount deviates from the findings of the
Department of Justice's Panel of Prosecutors as per its resolution of 20 September 1991.
Allegedly, this is clear evidence of the uncertainty on the part of the Government as to
the total value of the estate of the late President.

This is, to our mind, the petitioner's last ditch effort to assail the assessment of estate tax
which had already become final and unappealable.

It is not the Department of Justice which is the government agency tasked to determine
the amount of taxes due upon the subject estate, but the Bureau of Internal
Revenue, 16 whose determinations and assessments are presumed correct and made in
good faith. 17 The taxpayer has the duty of proving otherwise. In the absence of proof of
any irregularities in the performance of official duties, an assessment will not be
disturbed. Even an assessment based on estimates is prima facie valid and lawful where
it does not appear to have been arrived at arbitrarily or capriciously. The burden of
proof is upon the complaining party to show clearly that the assessment is erroneous.
Failure to present proof of error in the assessment will justify the judicial affirmance of
said assessment. 18 In this instance, petitioner has not pointed out one single provision
in the Memorandum of the Special Audit Team which gave rise to the questioned
assessment, which bears a trace of falsity. Indeed, the petitioner's attack on the
assessment bears mainly on the alleged improbable and unconscionable amount of the
taxes charged. But mere rhetoric cannot supply the basis for the charge of impropriety
of the assessments made.

Moreover, these objections to the assessments should have been raised, considering the
ample remedies afforded the taxpayer by the Tax Code, with the Bureau of Internal
Revenue and the Court of Tax Appeals, as described earlier, and cannot be raised now
via Petition for Certiorari, under the pretext of grave abuse of discretion. The course of
action taken by the petitioner reflects his disregard or even repugnance of the
established institutions for governance in the scheme of a well-ordered society. The
subject tax assessments having become final, executory and enforceable, the same can
no longer be contested by means of a disguised protest. In the main, Certiorari may not
be used as a substitute for a lost appeal or remedy. 19 This judicial policy becomes more
pronounced in view of the absence of sufficient attack against the actuations of
government.
On the matter of sufficiency of service of Notices of Assessment to the petitioner, we
find the respondent appellate court's pronouncements sound and resilient to
petitioner's attacks.

Anent grounds 3(b) and (B) — both alleging/claiming lack of notice — We

find, after considering the facts and circumstances, as well as evidences,
that there was sufficient, constructive and/or actual notice of assessments,
levy and sale, sent to herein petitioner Ferdinand "Bongbong" Marcos as
well as to his mother Mrs. Imelda Marcos.

Even if we are to rule out the notices of assessments personally given to

the caretaker of Mrs. Marcos at the latter's last known address, on August
26, 1991 and September 12, 1991, as well as the notices of assessment
personally given to the caretaker of petitioner also at his last known
address on September 12, 1991 — the subsequent notices given thereafter
could no longer be ignored as they were sent at a time when petitioner
was already here in the Philippines, and at a place where said notices
would surely be called to petitioner's attention, and received by
responsible persons of sufficient age and discretion.

Thus, on October 20, 1992, formal assessment notices were served upon
Mrs. Marcos c/o the petitioner, at his office, House of Representatives,
Batasan Pambansa, Q.C. (Annexes "A", "A-1", "A-2", "A-3"; pp. 207-210,
Comment/Memorandum of OSG). Moreover, a notice to taxpayer dated
October 8, 1992 inviting Mrs. Marcos to a conference relative to her tax
liabilities, was furnished the counsel of Mrs. Marcos — Dean Antonio
Coronel (Annex "B", p. 211, ibid). Thereafter, copies of Notices were also
served upon Mrs. Imelda Marcos, the petitioner and their counsel "De
Borja, Medialdea, Ata, Bello, Guevarra and Serapio Law Office", on April
7, 1993 and June 10, 1993. Despite all of these Notices, petitioner never
lifted a finger to protest the assessments, (upon which the Levy and sale of
properties were based), nor appealed the same to the Court of Tax
Appeals.

There being sufficient service of Notices to herein petitioner (and his

mother) and it appearing that petitioner continuously ignored said
Notices despite several opportunities given him to file a protest and to
thereafter appeal to the Court of Tax Appeals, — the tax assessments
subject of this case, upon which the levy and sale of properties were
based, could no longer be contested (directly or indirectly) via this instant
petition for certiorari. 20
Petitioner argues that all the questioned Notices of Levy, however, must be nullified for
having been issued without validly serving copies thereof to the petitioner. As a
mandatory heir of the decedent, petitioner avers that he has an interest in the subject
estate, and notices of levy upon its properties should have been served upon him.

We do not agree. In the case of notices of levy issued to satisfy the delinquent estate tax,
the delinquent taxpayer is the Estate of the decedent, and not necessarily, and
exclusively, the petitioner as heir of the deceased. In the same vein, in the matter of
income tax delinquency of the late president and his spouse, petitioner is not the
taxpayer liable. Thus, it follows that service of notices of levy in satisfaction of these tax
delinquencies upon the petitioner is not required by law, as under Section 213 of the
NIRC, which pertinently states:

xxx xxx xxx

. . . Levy shall be effected by writing upon said certificate a description of

the property upon which levy is made. At the same time, written notice of
the levy shall be mailed to or served upon the Register of Deeds of the
province or city where the property is located and upon the delinquent
taxpayer, or if he be absent from the Philippines, to his agent or the
manager of the business in respect to which the liability arose, or if there
be none, to the occupant of the property in question.

xxx xxx xxx

The foregoing notwithstanding, the record shows that notices of warrants of distraint
and levy of sale were furnished the counsel of petitioner on April 7, 1993, and June 10,
1993, and the petitioner himself on April 12, 1993 at his office at the Batasang
Pambansa. 21 We cannot therefore, countenance petitioner's insistence that he was
denied due process. Where there was an opportunity to raise objections to government
action, and such opportunity was disregarded, for no justifiable reason, the party
claiming oppression then becomes the oppressor of the orderly functions of
government. He who comes to court must come with clean hands. Otherwise, he not
only taints his name, but ridicules the very structure of established authority.

IN VIEW WHEREOF, the Court RESOLVED to DENY the present petition. The
Decision of the Court of Appeals dated November 29, 1994 is hereby AFFIRMED in all
respects.

SO ORDERED.