CALTEX PHILIPPINES VS COMMISSION ON AUDIT FACTS: COA directed Caltex Philippines Inc.

( CPI ) to remit to the Oil Price Stabilization Fund ( OPSF ) its collection of the additional tax on petroleum products pursuant to P.D. 1956, as well as unremitted collection of the above tax covering the years 1986-1988, with interests and surcharges and advising it that all its claims for reimbursement from the OPSF shall be held in abeyance pending such remittance. COA further directed petitioner oil company to desist from further offsetting the taxes collected against outstanding claims for 1989 and subsequent periods. Its motion for reconsideration of the eventual decision of the COA on the matter having been denied, CPI imputes that COA erred, inter alia, in preventing the former from exercising the right to offset its remittances against its reimbursement. ISSUE: Whether or not the amounts due to the OPSF from CPI may be offset against the CPIs outstanding claims from said fund RULING: It is settled that a taxpayer may not offset taxes due from claims that he may have against the Government. Taxes cannot be the subject of compensation because the Government and the taxpayer are not mutually creditors and debtors of each other and a claim for taxes is not such a debt, demand, contract or judgment as is allowed to be set off.

OSMENA vs ORBOS FACTS: Under P.D. 1956, the Oil Price Stabilization Fund ( OPSF ) was created as a special fund for reimbursing oil companies for cost increases in crude oil and imported petroleum products resulting from exchange rate adjustments and from increases I world market prices of crude oil. The OPSF was reclassified into a trust liability account by virtue of E.O. 1024 in 1985 and was ordered released to the Ministry ( now, Department ) of Energy. Said executive order also authorized the investment of the fund in government securities, with earnings therefrom accruing to the fund. E.O. 137, issued on Feb. 27, 1987, amended P.D. 1956 by expanding the grounds for reimbursement by oil companies for possible cost under recovery due to reduction of domestic prices of petroleum produced, as determined by the Department of Finance. Petitioner avers that the creation of the trust fund violates Sec. 29(3), Art. VI of the C