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Geromo, Felix Louis T.

Southern Cross Cement vs PCMC, July 8, 2004

RATIONALE: A writ of attachment shall not issue to enjoin tax collection.

Facts:

Petitioner Southern Cross Cement Corporation (Southern Cross) is a domestic

corporation engaged in the business of cement manufacturing, production and

importation

On 22 May 2001, respondent Department of Trade and Industry (DTI) accepted anapplication from Philcemcor (PCMC), alleging that the importation of gray Portlandcement in increased quantities has caused declines in domestic production, capacityutilization, market share, sales and employment; as well as caused depressed localprices. Accordingly, Philcemcor sought the imposition at first of provisional, then later,definitive safeguard measures on the import of cement pursuant to the SMA (Rep. ActNo. 8800, also known as the Safeguard Measures Act.

After preliminary investigation, the Bureau of Import Services of the DTI, determined

that critical circumstances existed justifying the imposition of provisional measures. theDTI then issued an Order, imposing a provisional measure equivalent to Twenty Pesosand Sixty Centavos (P20.60) per forty (40) kilogram bag on all importations of grayPortland cement for a period not exceeding two hundred (200) days from the date ofissuance by the Bureau of Customs (BOC) of the implementing Customs MemorandumOrder. The corresponding Customs Memorandum Order was issued on 10 December2001, to take effect that same day and to remain in force for two hundred (200) days

Due to DTIs imposition of the provisional measure, Southern Cross filed with the Court

a Very Urgent Application for a Temporary Restraining Order and/or A Writ of

Preliminary Injunction (TRO Application), seeking to enjoin the DTI Secretary fromenforcing his decision.

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Issue:

Whether or not a writ ofpreliminary injunction enjoining the collection of taxes is proper?

Rulings:

The court cannot grant a writ of preliminary injunction enjoining the collection of taxes, apreemptory judicial act which is frowned upon, unless there is a statutory basis for it. In that

regard, Section 218 of the Tax Reform Act of 1997 prohibits any court from granting an

injunction to restrain the collection of any national internal revenue tax, fee or charge imposed

by the internal revenue code. Therefore, a writ of attachment shall not issue to enjoin tax

collection.