Commissioner of Internal Revenue vs. Burmeister and Wain Scandinavian Contractor Mindanao, Inc.

(January 22, 2007

The Case This petition for review[1] seeks to set aside the 16 April 2002 Decision[2] of the Court of Appeals in CA-G ! "# $o 66%&1 affir'in( the ) Au(ust 2001 Decision[%] of the Court of Ta* Appeals +CTA, The CTA ordered the Co''issioner of -nternal !evenue +petitioner, to issue a ta* credit certificate for #6.//&.60/ 61 in favor of 2ur'eister and 3ain "candinavian Contractor 4indanao. -nc +respondent,

The Antecedents The CTA su''ari5ed the facts. which the Court of Appeals adopted. as follows6
[!espondent] is a do'estic corporation dul7 or(ani5ed and e*istin( under and 87 virtue of the laws of the #hilippines with principal address located at Daru'a 2uildin(. 9ose # :aurel Avenue. :anan(. Davao Cit7 -t is represented that a forei(n consortiu' co'posed of 2ur'eister and 3ain "candinavian Contractor A;" +23"C-Den'ark,. 4itsui <n(ineerin( and "hip8uildin(. :td . and 4itsui and Co . :td entered into a contract with the $ational #ower Corporation +$A#=C=!, for the operation and 'aintenance of [$A#=C=!>s] two power 8ar(es The Consortiu' appointed 23"CDen'ark as its coordination 'ana(er 23"C-Den'ark esta8lished [respondent] which su8contracted the actual operation and 'aintenance of $A#=C=!>s two power 8ar(es as well as the perfor'ance of other duties and acts which necessaril7 have to 8e done in the #hilippines $A#=C=! paid capacit7 and ener(7 fees to the Consortiu' in a 'i*ture of currencies +4ark. ?en. and #eso, The freel7 converti8le

non-#eso co'ponent is deposited directl7 to the Consortiu'>s 8ank accounts in Den'ark and 9apan. while the #eso-deno'inated co'ponent is deposited in a separate and special desi(nated 8ank account in the #hilippines =n the other hand. the Consortiu' pa7s [respondent] in forei(n currenc7 inwardl7 re'itted to the #hilippines throu(h the 8ankin( s7ste' -n order to ascertain the ta* i'plications of the a8ove transactions. [respondent] sou(ht a rulin( fro' the 2-! which responded with 2-! !ulin( $o 02%-/0 dated @e8ruar7 1&. 1//0. declarin( therein that if [respondent] chooses to re(ister as a AAT person and the consideration for its services is paid for in accepta8le forei(n currenc7 and accounted for in accordance with the rules and re(ulations of the 2an(ko "entral n( #ilipinas. the aforesaid services shall 8e su8Bect to AAT at 5ero-rate [!espondent] chose to re(ister as a AAT ta*pa7er =n 4a7 26. 1//0. the Certificate of !e(istration 8earin( !D= Control $o /0-11%001006 was issued in favor of [respondent] 87 the !evenue District =ffice $o 11% of Davao Cit7 @or the 7ear 1//6. [respondent] seasona8l7 filed its Cuarterl7 Aalue-Added Ta* !eturns reflectin(. a'on( others. a total 5ero-rated sales of#1&1.%11.1)/ 62 with AAT input ta*es of #%.%61.11& 1&. detailed as follows6 Dtr <*h Date @iled Eero-!ated "ales AAT -nput Ta* ---------------------------------------------------------------------------------1st 2nd %rd &th Totals < @ G F 0&-1)-/6 01-16-/6 10-1&-/6 01-20-/1 # %%.01/.601 01 %1.10).)6% %% %&.1/6.%12 %0 &2.//2.%02 )1 #1&1.%11.1)/ 62 #60)./0% &) 106.)02 66 /%0.21/ 1& 1.060.1%) )6 #%.%61.11& 1&

=n Dece'8er 2/. 1//1. [respondent] availed of the Aoluntar7 Assess'ent #ro(ra' +AA#, of the 2-! -t alle(edl7 'isinterpreted !evenue !e(ulations $o 0-/6 dated @e8ruar7 20. 1//6 to 8e applica8le to its case !evenue !e(ulations $o 0-/6 provides in part thus6

"<CT-=$" & 102-2+8,+2, and & 10%-1+2,+c, of !evenue !e(ulations $o 1-/0 are here87 a'ended to read as follows6 "ection & 102-2+8,+2, G H"ervices other than processin(. 'anufacturin( or repackin( for other persons doin( 8usiness outside the #hilippines for (oods which are su8seCuentl7 e*ported. as well as services 87 a resident to a non-resident forei(n client such as proBect studies. infor'ation services. en(ineerin( and architectural desi(ns and other si'ilar services. the consideration for which is paid for in accepta8le forei(n currenc7 and accounted for in accordance with the rules and re(ulations of the 2"# I *** *** ****

-n [confor'it7] with the aforecited !evenue !e(ulations. [respondent] su8Bected its sale of services to the Consortiu' to the 10J AAT in the total a'ount of #10%.00).%%) 11 representin( April to Dece'8er 1//6 sales since said !evenue !e(ulations $o 0-/6 8eca'e effective onl7 on April 1//6 The su' of #&%.)/%./01 01. representin( 9anuar7 to 4arch 1//6 sales was su8Bected to 5ero rate ConseCuentl7. [respondent] filed its 1//6 a'ended AAT return consolidatin( therein the AAT output and input ta*es for the four calendar Cuarters of 1//6 -t paid the a'ount of#6.//&.60/ 61 throu(h 2-!>s collectin( a(ent. #C-2ank. as its output ta* lia8ilit7 for the 7ear 1//6. co'puted as follows6 A'ount su8Bect to 10J AAT #10%.00).%%) 11 4ultipl7 87 10J AAT =utput Ta* # 10.%00.)%% )1 :ess6 1//6 -nput AAT # %.%61.11& 1& AAT =utput Ta* #a7a8le # 6.//&.60/ 61 =n 9anuar7 1.1///. [respondent] was a8le to secure AAT !ulin( $o 00%-// fro' the AAT !eview Co''ittee which reconfir'ed 2-! !ulin( $o 02%-/0 Hinsofar as it held that the services 8ein( rendered 87 23"C4- is su8Bect to AAT at 5ero percent +0J, I

=n the stren(th of the afore'entioned rulin(s. [respondent] on April 22.1///. filed a clai' for the issuance of a ta* credit certificate with !evenue District $o 11% of the 2-! [!espondent] 8elieved that it erroneousl7 paid the output AAT for 1//6 due to its avail'ent of the Aoluntar7 Assess'ent #ro(ra' +AA#, of the 2-! [&]

=n 21 Dece'8er 1///. respondent filed a petition for review with the CTA in order to toll the runnin( of the two-7ear prescriptive period under the Ta* Code

The Ruling of the Court of Tax Appeals

-n its ) Au(ust 2001 Decision. the CTA ordered petitioner to issue a ta* credit certificate for #6.//&.60/ 61 in favor of respondent The CTA>s rulin( stated6
[!espondent>s] sale of services to the Consortiu' [was] paid for in accepta8le forei(n currenc7 inwardl7 re'itted to the #hilippines and accounted for in accordance with the rules and re(ulations of 2an(ko "entral n( #ilipinas These were esta8lished 87 various 2#Credit 4e'os showin( re'ittances in Danish Kroner +DKK, and L" dollars +L"M, as pa7'ents for the specific invoices 8illed 87 [respondent] to the consortiu' These re'ittances were further certified 87 the 2ranch 4ana(er * * * of 2#--Davao :anan( 2ranch to represent pa7'ents for su8-contract fees that ca'e fro' Den Danske Aktieselska8 2ank-Den'ark for the account of [respondent] Clearl7. [respondent>s] sale of services to the Consortiu' is su8Bect to AAT at 0J pursuant to "ection 10)+2,+2, of the Ta* Code **** The 5ero-ratin( of [respondent>s] sale of services to the Consortiu' was even confir'ed 87 the [petitioner] in 2-! !ulin( $o 02%-/0 dated @e8ruar7 10. 1//0. and later 87 AAT !ulin( $o 00%-// dated 9anuar7 1.1///. * * *

"ince it is apparent that the pa7'ents for the services rendered 87 [respondent] were indeed su8Bect to AAT at 5ero percent. it follows that it 'istakenl7 availed of the Aoluntar7 Assess'ent #ro(ra' 87 pa7in( output ta* for its sale of services * * * * * * Considerin( the principle of solutio indebiti which reCuires the return of what has 8een delivered 87 'istake. the [petitioner] is o8li(ated to issue the ta* credit certificate pra7ed for 87 [respondent] * * *[0]

#etitioner filed a petition for review with the Court of Appeals. which dis'issed the petition for lack of 'erit and affir'ed the CTA decision [6] Fence. this petition

The Court of Appeals Ruling

-n affir'in( the CTA. the Court of Appeals reBected petitioner>s view that since respondent>s services are not destined for consu'ption a8road. the7 are not of the sa'e nature as proBect studies. infor'ation services. en(ineerin( and architectural desi(ns. and other si'ilar services 'entioned in "ection & 102-2+8,+2, of !evenue !e(ulations $o 0-/6[1] as su8Bect to 0J AAT Thus. accordin( to petitioner. respondent>s services cannot le(all7 Cualif7 for 0J AAT 8ut are su8Bect to the re(ular 10J AAT [)] The Court of Appeals found untena8le petitioner>s contention that under AAT !ulin( $o 0&0-/). respondent>s services should 8e destined for consu'ption a8road to enBo7 5ero-ratin( Contrar7 to petitioner>s interpretation. there are two kinds of transactions or services su8Bect to 5ero percent AAT under AAT !ulin( $o 0&0-/) These are +a, services other than repackin( (oods for other persons doin( 8usiness outside the #hilippines which (oods are su8seCuentl7 e*portedN and +8, services 87 a resident to a non-resident

forei(n client. such as proBect studies. infor'ation services. en(ineerin( and architectural desi(ns and other si'ilar services. the consideration for which is paid for in accepta8le forei(n currenc7 and accounted for in accordance with the rules and re(ulations of the Bangko Sentral ng Pilipinas +2"#, [/] The Court of Appeals stated that Honl7 the first classification is reCuired 87 the provision to 8e consu'ed a8road in order to 8e ta*ed at 5ero rate -n * * * the a8sence of such e*press or i'plied stipulation in the statute. the second classification need not 8e consu'ed a8road I[10] The Court of Appeals further held that assu'in( petitioner>s interpretation of "ection & 102-2+8,+2, of !evenue !e(ulations $o 0-/6 is correct. such ad'inistrative provision is void 8ein( an a'end'ent to the Ta* Code #etitioner went 8e7ond 'erel7 providin( the i'ple'entin( details 87 addin( another reCuire'ent to 5ero-ratin( HThis is indicated 87 the additional phrase Oas well as services 87 a resident to a non-resident forei(n client. such as proBect studies. infor'ation services and en(ineerin( and architectural desi(ns and other si'ilar services > -n effect. this phrase adds not Bust one 8ut two reCuisites6 +a, services 'ust 8e rendered 87 a resident to a non-residentN and +8, these 'ust 8e in the nature of proBect studies. infor'ation services. etc I[11] The Court of Appeals e*plained that under "ection 10)+8,+2, of the Ta* Code.[12] for services which were perfor'ed in the #hilippines to enBo7 5ero-ratin(. these 'ust co'pl7 onl7 with two reCuisites. to wit6 +1, pa7'ent in accepta8le forei(n currenc7 and +2, accounted for in accordance with the rules of the 2"# "ection 10)+8,+2, of the Ta* Code does not provide that services 'ust 8e Hdestined for consu'ption a8roadI in order to 8e AAT 5ero-rated [1%] The Court of Appeals disa(reed with petitioner>s ar(u'ent that our AAT law (enerall7 follows the destination principle +i e . e*ports e*e'pt. i'ports ta*a8le, [1&] The Court of Appeals stated that Hif indeed the Odestination principle> underlies and is the 8asis of the AAT laws. then petitioner>s proper re'ed7 would 8e to reco''end an a'end'ent of "ection 10)+8,+2, to Con(ress 3ithout such a'end'ent. however. petitioner should appl7 the ter's of the 8asic law #etitioner could not resort to ad'inistrative le(islation. as what [he] had done in this case I[10]

The Issue The lone issue for resolution is whether respondent is entitled to the refund of #6.//&.60/ 61 as erroneousl7 paid output AAT for the 7ear 1//6 [16]

The Ruling of the Court 3e den7 the petition At the outset. the Court declares that the denial of the instant petition is not on the (round that respondent>s services are su8Bect to 0J AAT !ather. it is 8ased on the non-retroactivit7 of the preBudicial revocation of 2-! !ulin( $o 02%/0[11] and AAT !ulin( $o 00%-//.[1)] which held that respondent>s services are su8Bect to 0J AAT and which respondent invoked in appl7in( for refund of the output AAT "ection 102+8, of the Ta* Code. [1/] the applica8le provision in 1//6 when respondent rendered the services and paid the AAT in Cuestion. enu'erates which services are 5ero-rated. thus6
+8, Transactions subject to zero-rate P The followin( services perfor'ed in the #hilippines 87 AAT-re(istered persons shall 8e su8Bect to 0J6 +1, #rocessin(. 'anufacturin( or repackin( (oods for other persons doing business outside the Philippines which (oods are su8seCuentl7 e*ported. where the services are paid for in accepta8le forei(n currenc7 and accounted for in accordance with the rules and re(ulations of the Bangko Sentral ng Pilipinas +2"#,N +2, Services other than those mentioned in the preceding subparagraph. the consideration for which is paid for in accepta8le forei(n currenc7 and accounted for in accordance with the rules and re(ulations of the Bangko Sentral ng Pilipinas +2"#,N

+%, "ervices rendered to persons or entities whose e*e'ption under special laws or international a(ree'ents to which the #hilippines is a si(nator7 effectivel7 su8Bects the suppl7 of such services to 5ero rateN +&, "ervices rendered to vessels en(a(ed e*clusivel7 in international shippin(N and +0, "ervices perfor'ed 87 su8contractors and;or contractors in processin(. convertin(. or 'anufacturin( (oods for an enterprise whose e*port sales e*ceed sevent7 percent +10J, of total annual production +<'phasis supplied,

-n insistin( that its services should 8e 5ero-rated. respondent clai's that it co'plied with the reCuire'ents of the Ta* Code for 5ero ratin( under the second para(raph of "ection 102+8, !espondent asserts that +1, the pa7'ent of its service fees was in accepta8le forei(n currenc7. +2, there was inward re'ittance of the forei(n currenc7 into the #hilippines. and +%, accountin( of such re'ittance was in accordance with 2"# rules 4oreover. respondent contends that its services which Hconstitute the actual operation and 'ana(e'ent of two +2, power 8ar(es in 4indanaoI are not Heven re'otel7 si'ilar to proBect studies. infor'ation services and en(ineerin( and architectural desi(ns under "ection & 102-2+8,+2, of !evenue !e(ulations $o 0-/6 I As such. respondent>s services need not 8e Hdestined to 8e consu'ed a8road in order to 8e AAT 5ero-rated I !espondent is 'istaken The Ta* Code not onl7 reCuires that the services 8e other than Hprocessin(. 'anufacturin( or repackin( of (oodsI and that pa7'ent for such services 8e in accepta8le forei(n currenc7 accounted for in accordance with 2"# rules Another essential condition for Cualification to 5ero-ratin( under "ection 102+8,+2, is that the recipient of such services is doing business outsidethe Philippines. 3hile this reCuire'ent is not e*pressl7 stated in the second para(raph of "ection 102+8,. this is clearl7 provided in the first para(raph of "ection 102+8, where the listed services 'ust 8e for other persons doing business outside the

Philippines.! The phrase Hfor other persons doin( 8usiness outside the #hilippinesI not onl7 refers to the services enu'erated in the first para(raph of "ection 102+8,. 8ut also pertains to the (eneral ter' HservicesI appearin( in the second para(raph of "ection 102+8, -n short. services other than processin(. 'anufacturin(. or repackin( of (oods 'ust likewise 8e perfor'ed for persons doin( 8usiness outside the #hilippines This can onl7 8e the lo(ical interpretation of "ection 102+8,+2, -f the provider and recipient of the Hother servicesI are 8oth doin( 8usiness in the #hilippines. the pa7'ent of forei(n currenc7 is irrelevant =therwise. those su8Bect to the re(ular AAT under "ection 102+a, can avoid pa7in( the AAT 87 si'pl7 stipulatin( pa7'ent in forei(n currenc7 inwardl7 re'itted 87 the recipient of services To interpret "ection 102+8,+2, to appl7 to a pa7er-recipient of services doin( 8usiness in the #hilippines is to 'ake the pa7'ent of the re(ular AAT under "ection 102+a, dependent on the (enerosit7 of the ta*pa7er The provider of services can choose to pa7 the re(ular AAT or avoid it 87 stipulatin( pa7'ent in forei(n currenc7 inwardl7 re'itted 87 the pa7er-recipient "uch interpretation re'oves "ection 102+a, as a ta* 'easure in the Ta* Code. an interpretation this Court cannot sanction A ta* is a 'andator7 e*action. not a voluntar7 contri8ution 3hen "ection 102+8,+2, stipulates pa7'ent in Haccepta8le forei(n currenc7I under 2"# rules. the law clearl7 envisions the pa7er-recipient of services to 8e doin( 8usiness outside the #hilippines =nl7 those not doin( 8usiness in the #hilippines can 8e reCuired under 2"# rules[20] to pa7 in accepta8le forei(n currenc7 for their purchase of (oods or services fro' the #hilippines -n a do'estic transaction. where the provider and recipient of services are 8oth doin( 8usiness in the #hilippines. the 2"# cannot reCuire an7 part7 to 'ake pa7'ent in forei(n currenc7 "ervices covered 87 "ection 102+8, +1, and +2, are in the nature of e*port sales since the pa7er-recipient of services is doin( 8usiness outside the #hilippines Lnder 2"# rules.[21] the proceeds of e*port sales 'ust 8e reported to the Bangko Sentral ngPilipinas Thus. there is reason to reCuire the provider of services under "ection 102+8, +1, and +2, to account for the forei(n currenc7 proceeds to the 2"# The sa'e rationale does not appl7 if the provider and recipient of the services are 8oth doin( 8usiness in the #hilippines since their

transaction is not in the nature of an e*port sale even if pa7'ent is deno'inated in forei(n currenc7 @urther. when the provider and recipient of services are both doin( 8usiness in the #hilippines. their transaction falls sCuarel7 under "ection 102+a, (overnin( domestic sale or e*chan(e of services -ndeed. this is a purel7 local sale or e*chan(e of services su8Bect to the re(ular AAT. unless of course the transaction falls under the other provisions of "ection 102+8, Thus. when "ection 102+8,+2, speaks of H"s#ervices other than those mentioned in the preceding subparagraph$! the le(islative intent is that onl7 the services are different 8etween su8para(raphs 1 and 2 The reCuire'ents for 5eroratin(. includin( the essential condition that the recipient of services is doin( 8usiness outside the #hilippines. re'ain the sa'e under 8oth su8para(raphs "i(nificantl7. the a'ended "ection 10)+8,[22] [previousl7 "ection 102+8,] of the present Ta* Code clarifies this le(islative intent <*pressl7 included a'on( the transactions su8Bect to 0J AAT are H"s]ervices other than those 'entioned in the [first] para(raph [of "ection 10)+8,] rendered to a person engaged in business conducted outside the Philippines or to a nonresident person not engaged in business %ho is outside the Philippines when the services are perfor'ed. the consideration for which is paid for in accepta8le forei(n currenc7 and accounted for in accordance with the rules and re(ulations of the 2"# I

-n this case. the pa7er-recipient of respondent>s services is the Consortiu' which is a Boint-venture doin( 8usiness in the #hilippines 3hile the Consortiu'>s principal 'e'8ers are non-resident forei(n corporations. the Consortium itself is doing business in the Philippines This is shown clearl7 in 2-! !ulin( $o 02%/0 which states that the contract 8etween the Consortiu' and $A#=C=! is for a &'-(ear term$ thus6
This refers to 7our letter dated 9anuar7 1&. 1//& reCuestin( for a clarification of the ta* i'plications of a contract 8etween a consortiu' co'posed of 2ur'eister Q 3ain "candinavian Contractor A;" +H23"CI,. 4itsui <n(ineerin( Q "hip8uildin(. :td +4<",. and 4itsui Q Co . :td +H4-T"L-I,. all referred to hereinafter as the HConsortiu'I. and the $ational #ower Corporation

+H$A#=C=!I, for the operation and maintenance of t%o &))-*ega%att po%er barges + Po%er ,arges!- ac.uired b( /AP0C0R for a &'-(ear term. [2%] +<'phasis supplied,

Considerin( this len(th of ti'e. the Consortiu'>s operation and 'aintenance of $A#=C=!>s power 8ar(es cannot 8e classified as a sin(le or isolated transaction The Consortiu' does not fall under "ection 102+8,+2, which reCuires that the recipient of the services 'ust 8e a person doin( 8usiness outside the #hilippines Therefore. respondent>s services to the Consortiu'. not 8ein( supplied to a person doin( 8usiness outside the #hilippines. cannot le(all7 Cualif7 for 0J AAT !espondent. as su8contractor of the Consortiu'. operates and 'aintains $A#=C=!>s power 8ar(es in the #hilippines $A#=C=! pa7s the Consortiu'. throu(h its non-resident partners. partl7 in forei(n currenc7 outwardl7 re'itted -n turn. the Consortiu' pa7s respondent also in forei(n currenc7 inwardl7 re'itted and accounted for in accordance with 2"# rules This pa7'ent sche'e does not entitle respondent to 0J AAT As the Court held in Commissioner of Internal Revenue v. merican !"press International# Inc. $P%ilippine Branc%&.[2&] the place of pa7'ent is i''aterial. 'uch less is the place where the output of the service is ulti'atel7 used An essential condition for entitle'ent to 0J AAT under "ection 102+8,+1, and +2, is that the recipient of the services is a person doin( 8usiness outside the #hilippines In this case$ the recipient of the services is the Consortium$ %hich is doing business not outside$ but %ithin the Philippines because it has a &'-(ear contract to operate and maintain/AP0C0Rs t%o &))-mega%att po%er barges in *indanao. The Court reco(ni5es the rule that the AAT s7ste' (enerall7 follows the Hdestination principleI +e*ports are 5ero-rated whereas i'ports are ta*ed, Fowever. as the Court stated in merican !"press. there is an e*ception to this rule [20] This e*ception refers to the 0J AAT on services enu'erated in "ection 102 and perfor'ed in the #hilippines @or services covered 87 "ection 102+8,+1, and +2,. the recipient of the services 'ust 8e a person doin( 8usiness outside the #hilippines Thus. to 8e e*e'pt fro' the destination principle under "ection 102+8,+1, and +2,. the services 'ust 8e +a, perfor'ed in the #hilippinesN

+8, for a person doin( 8usiness outside the #hilippinesN and +c, paid in accepta8le forei(n currenc7 accounted for in accordance with 2"# rules !espondent>s reliance on the rulin( in merican !"press[26] is 'isplaced That case involved a recipient of services. specificall7 A'erican <*press -nternational. -nc +Fon(kon( 2ranch,. doin( 8usiness outside the #hilippines There. the Court stated6
!espondent [A'erican <*press -nternational. -nc +#hilippine 2ranch,] is a AAT-re(istered person that facilitates the collection and pa7'ent of receiva8les 8elon(in( to its non-resident foreign client [A'erican <*press -nternational. -nc +Fon(kon( 2ranch,]. for which it (ets paid in accepta8le forei(n currenc7 inwardl7 re'itted and accounted for in accordance with 2"# rules and re(ulations * * * *[21] +<'phasis supplied,

-n contrast. this case involves a recipient of services G the Consortiu' G which is doin( 8usiness in the #hilippines Fence. A'erican <*press> services were su8Bect to 0J AAT. while respondent>s services should 8e su8Bect to 10J AAT $evertheless. in seekin( a refund of its e*cess output ta*. respondent relied on AAT !ulin( $o 00%-//.[2)] which reconfir'ed 2-! !ulin( $o 02%[2/] /0 Hinsofar as it held that the services 8ein( rendered 87 23"C4- is su8Bect to AAT at 5ero percent +0J, I !espondent>s reliance on these 2-! rulin(s 8inds petitioner #etitioner>s filin( of his Answer 8efore the CTA challen(in( respondent>s clai' for refund effectivel7 serves as a revocation of AAT !ulin( $o 00%-// and 2-! !ulin( $o 02%-/0 Fowever. such revocation cannot 8e (iven retroactive effect since it will preBudice respondent Chan(in( respondent>s status will deprive respondent of a refund of a su8stantial a'ount representin( e*cess output ta* [%0] "ection 2&6 of the Ta* Code provides that an7 revocation of a rulin( 87 the Co''issioner of -nternal !evenue shall not 8e (iven retroactive application if the revocation will preBudice the ta*pa7er @urther. there is no showin( of the e*istence of an7 of the e*ceptions enu'erated in "ection 2&6 of the Ta* Code for the retroactive application of such revocation

Fowever. upon the filin( of petitioner>s Answer dated 2 4arch 2000 8efore the CTA contestin( respondent>s clai' for refund. respondent>s [%1] services shall 8e su8Bect to the re(ular 10J AAT "uch filin( is dee'ed a revocation of AAT !ulin( $o 00%-// and 2-! !ulin( $o 02%-/0 123R340R3. the Court 53/I3S the petition S0 0R53R35