The Supreme Court has denied the petition of Pilipinas Shell Petroleum Corporation (Shell) to stop the Manila Regional Trial Court (RTC) from hearing for lack of jurisdiction a collection case involving Shell and the Bureau of Customs (BOC).

In a decision penned by Justice Renato C. Corona, the Court’s First Division affirmed the ruling of the Court of Appeals that the RTC has jurisdiction over the BOC’s complaint for collection for outstanding customs duties and taxes against Shell, despite a pending petition on the same matter filed by the petroleum corporation before the Court of Tax Appeals (CTA).

The Court ruled that under the Judiciary Reorganization Act of 1980, as amended, RTCs have jurisdiction in all cases not within the exclusive jurisdiction of any court, tribunal, person, or body exercising judicial or quasi-judicial functions.

The Court held further that the BOC need not wait for the resolution of the case pending before the CTA before the BOC collects Shell’s outstanding liabilities “for such delay will unduly restrain the performance of BOC’s functions.” If the ultimate outcome of the CTA case turns out to be favorable to Shell, the law affords adequate remedy for Shell to seek a refund, the Court added, thus ordering the RTC to proceed with the case.

Shell filed a case before the CTA assailing the action of the Department of Finance (DOF) after the latter had cancelled the tax credit certificates (TCCs) used by Shell as payment for its taxes and import duties. Alleging that the TCCs had been fraudulently issued, the DOF ordered Shell to pay the BOC and the Bureau of Internal Revenue (BIR) the value of the cancelled TCCs. Upon BOC’s filing of a complaint of collection before Branch 19 of the Manila RTC, Shell moved to dismiss the case and transfer it to the CTA to be treated as a counterclaim in the petition for review before the said court. (GR No. 161953, Pilipinas Shell v. Republic, March 6, 2008)