G.R. No. L-24186 May 31, 1973
MODESTO T. FLORES, as Administrator of the Testate Estate of the late Mary McDonald Bachrach, petitioner, vs. COURT OF TAX APPEALS and THE COMMISSIONER OF THE INTERNAL REVENUE, respondents.

FACTS

The Court of Tax Appeals (CTA) rendered a judgment on December 29, 1964, upholding an income tax assessment against the estate of Mary McDonald Bachrach for the period January 1 to August 9, 1960. The CTA ordered the estate administrator, Modesto T. Flores, to pay the Commissioner of Internal Revenue the sum of P316,541.00 plus interest. Flores appealed this decision to the Supreme Court via a petition for review, and the case was submitted for decision on January 20, 1966.
While the appeal was pending, President Ferdinand E. Marcos issued Presidential Decree No. 68 on November 24, 1972, which granted a tax amnesty. The decree provided for a 40% reduction of delinquent tax accounts, including those under protest or pending in court, if the reduced amount was paid in full on or before January 31, 1973. On January 10, 1973, petitioner Flores, as administrator, paid the amount of P266,375.11 to the Bureau of Internal Revenue, which represented more than 60% of the original tax liability as computed under the CTA judgment. He then filed a motion to dismiss his own appeal, citing his availment of the tax amnesty.

ISSUE

Whether the petitioner’s payment of the reduced tax liability under Presidential Decree No. 68 rendered the pending appeal moot and academic.

RULING

Yes, the Supreme Court dismissed the petition for review, ruling the case had become moot and academic. The legal logic is grounded in the doctrine of mootness, which holds that courts will not determine cases where no actual controversy exists or where the issues have been resolved by subsequent events. By voluntarily paying the reduced tax amount prescribed under PD No. 68, the petitioner effectively accepted the finality of the tax liability, albeit at a discounted rate. The Solicitor General confirmed that the payment constituted full compliance with the amnesty decree and its implementing revenue regulations. Section 4 of PD No. 68 explicitly states that after full settlement under its terms, the taxpayer “shall be free of any civil, criminal or administrative liability insofar as his tax case is involved.” Consequently, the petitioner’s act of availing the amnesty extinguished the very tax obligation that was the subject of the appeal. Since the core dispute over the payment of the assessed tax was resolved by the petitioner’s own action under the amnesty, there remained no live controversy for the Supreme Court to adjudicate. The Court thus dismissed the petition without costs.