CIR VS.

LEAL
GR. No. 113459, November 18, 2002
Facts:Pursuant to Sec. 116 of the Tax Code which imposes percentage tax on dealers in securities and lending investors, the Commissioner of Internal Revenue issued Memorandum Order (RMO) No. 15-91 imposing five percent (5%) lending investors tax on pawnshops based on their gross income and requiring all investigating units of the Bureau to investigate and assess the lending investors tax due from them. The issuance of RMO No. 15-91 was an offshoot of petitioners evaluation that the nature of pawnshop business is similar to that of

lending

investors.

Subsequently,

petitioner

issued

Revenue

Memorandum Circular No. 43-91, subjecting the pawn ticket to the documentary stamp tax as prescribed in Title VII of the Tax Code.
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CIR VS. LEAL

GR. No. 113459, November 18, 2002
The respondent, adversely affected by those revenue orders, asked for a reconsideration of both RMO No. 15-91 and RMC No. 43-91, filed with the RTC a petition for prohibition to implement such revenue orders. The CIR, through the OSG, filed a motion to dismiss the petition on the ground that the RTC has no jurisdiction to review the questioned revenue orders and to enjoin their implementation but the same was denied, holding that the revenue orders are not assessments to implement a Tax Code provision, but are in effect new taxes (against

pawnshops) which are not provided for under the Code, and which
only Congress is empowered to impose. The Court of Appeals affirmed the order issued by the RTC.
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CIR VS. LEAL

GR. No. 113459, November 18, 2002
Issue: Whether or not the Court of Tax Appeals has jurisdiction to review rulings of the CIR. Held: The jurisdiction to review rulings of the Commissioner pertains to the Court of Tax Appeals and NOT to the RTC. The questioned RMO and RMC are actually rulings or opinions of the Commissioner implementing

the Tax Code on the taxability of the Pawnshops. Under RA 1125, An Act
Creating the Court of Tax Appeals, Sec. 7 Jurisdiction The Court of Tax Appeals shall exercise exclusive appellate jurisdiction to review by appeal, the decisions of the CIR in cases involving disputed assessments, refunds, fees or other charges, penalties imposed in relation thereto, or other matters arising under the National Revenue Code or other laws or part of
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law administered by the Bureau of Internal Revenue.

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