G.R. No. 190818 : June 5, 2013

FACTS: Respondent Liberty M. Toledo, as Treasurer of respondent City of Manila, assessed petitioners for their fourth quarter local business taxes. Consequently, petitioners paid the total assessed amount of P5,104,281.26 under protest. Petitioners informed the Office of the City Treasurer of Manila of the nature of the foregoing payment, assailing as well the unconstitutionality of Section 21 of the Manila Revenue Code. Petitioners’ protest was however denied. Petitioners then filed a case with the Regional Trial Court of Manila against respondents, reiterating their claim that Section 21 of the Manila Revenue Code is null and void. Accordingly, they sought the refund of the amount of local business taxes they previously paid. In their Motion to Dismiss and Answer, respondents averred that petitioners failed to file any written claim for tax refund or credit with the Office of the City Treasurer of Manila. Thereafter, petitioners sent respondents a Request for Admissions & Interrogatories which requested the admission of the fact that the former filed a written protest with the latter. Respondents did not respond to the said Request for Admission. The Regional Trial Court held that respondents’ assessment of local business tax under Section 21 of the Manila Revenue Code is null and void thereby, warranting the issuance of a tax refund, or tax credit in the alternative. On appeal, the Court of Tax Appeals reversed and set aside the RTC’s ruling and in effect, denied petitioners’ request for tax refund/credit. It held that petitioners failed to contest the denial of their protest before a court of competent jurisdiction within the period provided for under Section 195 of the Local Government Code, and thus, the assessment became conclusive and unappealable.

ISSUE: Whether or not the Court of Tax Appeals correctly gave due course to the respondents’ Petition for Review despite failure to comply with Rule 26? YES.

HELD: Yes. The scope of a request for admission and a party’s failure to comply with the same are governed by Rule 26 of the Rules of Court. Objections to any request for admission shall be submitted to the court by the party requested within the period for and prior to the filing of his sworn statement as contemplated in the preceding paragraph and his compliance therewith shall be deferred until such objections are resolved, which resolution shall be made as early as practicable. Once a party serves a request for admission regarding the truth of any material and relevant matter of fact, the party to whom such request is served is given a period of fifteen (15) days within which to file a sworn statement answering the same. Should the latter fail to file and serve such answer, each of the matters of which admission is requested shall be deemed admitted. The exception to this rule is when the party to whom such request for admission is served had already controverted the matters subject of such request in an earlier pleading. Otherwise stated, if the matters in a request for admission have already been admitted or denied in previous pleadings by the requested party, the latter cannot be compelled to admit or deny them anew, otherwise, it constitutes an utter redundancy and will be a useless, pointless process which petitioner should not be subjected to. In turn, the requesting party cannot reasonably expect a response to the request and thereafter, assume or even demand the application of the implied admission rule in Section 2, Rule 26. Records show that petitioners filed their Request for Admission with the RTC and also served the same on respondents, requesting that the fact that they filed a written claim for refund with the City Treasurer of Manila be admitted. Respondents, however, did not — and in fact, need not – reply to the same considering that they have already stated in their Motion to Dismiss and Answer that petitioners failed to file any written claim for tax refund or credit. In this regard, respondents are not deemed to have admitted the truth and veracity of petitioners’ requested fact.