1.

LBP VS CACAYURAN
FACTS: Through Resolutions, the Sangguniang Bayan authorized its thenMayor Eufranio Eriguel to enter into a P4M and P28-loans with LBP to construct
10 kiosks at the Public Plaza and for the construction of a commercial center
within the premises of the Public Plaza. To secure the Loans, the Municipality
used as collateral, among others, a 2,323.75-square meter lot situated at the
south eastern portion of the Public Plaza.
A group of residents, led by Cacayuran, opposed the redevelopment of the
Public Plaza and the funding therefor thru the Subject Loans, claiming that these
were highly irregular, violative of the law, and detrimental to public interests, and
will result to wanton desecration of the [Public Plaza]. Invoking his right as a
taxpayer, he filed a Complaint against LBP and various officers of the
Municipality assailing the validity of the aforesaid loan agreements and praying
that the commercialization of the Public Plaza be enjoined.
LBP asserted that Cacayuran did not have any cause of action since he
was not privy to the loan agreements entered into by LBP and the Municipality.
During the pendency of the proceedings, the construction of the Agoo
Peoples Center was completed. Later on, the Sangguniang Bayan passed a
Municipal Ordinance declaring the area where such building stood as
patrimonial property of the Municipality.
RTC declared the Subject Loans null and void because the resolutions
approving the procurement of the same were passed in a highly irregular
manner and thus, ultra vires. Thus, the Municipality was not bound by the
Subject Loans and that the municipal officers should, instead, be held personally
liable for the same. Since the Plaza Lot is a property for public use, it cannot be
used as collateral for the Subject Loans.
Aggrieved, LBP and the municipal officers appealed to the CA. The CA
affirmed with modification the RTCs decision excluding Vice Mayor Eslao from
any personal liability arising from the Subject Loans. It held that, considering that
the issue at hand involved public interest of transcendental importance and the
Resolutions invalidly passed due to SBs noncompliance with LGC. The Plaza
Lot, which served as collateral for the Subject Loans, is property of public
dominion and thus, cannot be appropriated either by the State or by private
persons; and (4) the Subject Loans are ultra vires because they were transacted
without proper authority and their collateralization constituted improper
disbursement of public funds.
Dissatisfied, Land Bank filed the instant petition.
Thus the LBP, with the intervention of the Municipality as an indispensable

party, filed with the SC different motions.

ISSUE: HELD:
1. WON the Municipality is an indispensable party
YES. Considering that the parties to the loan are LBP and the Municipality,
the latter is an indispensable party and it is a requirement that it be impleaded.
Thus, the SC deemed it proper to remand the case to the RTC.

A. Cacayurans standing to sue

It is hornbook principle that a taxpayer is allowed to sue where there is a
claim that public funds are illegally disbursed, or that public money is being
deflected to any improper purpose, or that there is wastage of public funds
through the enforcement of an invalid or unconstitutional law. For a taxpayers
suit to prosper, two requisites must be met namely, (1) public funds derived from
taxation are disbursed by a political subdivision or instrumentality and in doing
so, a law is violated or some irregularity is committed; and (2) the petitioner is
directly affected by the alleged act. Records reveal that the foregoing requisites
are present in the instant case.
The proceeds from the Subject Loans had already been converted into
public funds by the Municipalitys receipt thereof. Funds coming from private
sources become impressed with the characteristics of public funds when they
are under official custody.33
Accordingly, the first requisite has been clearly met.
Second, as a resident-taxpayer of the Municipality, Cacayuran is directly
affected by the conversion of the Agoo Plaza which was funded by the proceeds
of the Subject Loans. It is well-settled that public plazas are properties for public
use and no one can exercise over it the rights of a private owner.

B. Validity of the Subject Resolutions

While the authorization of the municipal mayor need not be in the form of an
ordinance, the obligation which the said local executive is authorized to enter
into must be made pursuant to a law or ordinance.
In the present case, while Mayor Eriguels authorization to contract the

Subject Loans was not contained as it need not be contained in the form of
an ordinance, the said loans and even the Redevelopment Plan itself were not
approved pursuant to any law or ordinance but through mere resolutions.
[The distinction between ordinances and resolutions is well-perceived.
While ordinances are laws and possess a general and permanent character,
resolutions are merely declarations of the sentiment or opinion of a lawmaking
body on a specific matter and are temporary in nature. As opposed to
ordinances, "no rights can be conferred by and be inferred from a resolution." In
this accord, it cannot be denied that the SB violated Section 444(b)(1)(vi) of the
LGC altogether.]
Noticeably, the passage of the Subject Resolutions was also tainted with
other irregularities, such as (1) the SBs failure to submit the Subject Resolutions
to the Sangguniang Panlalawigan of La Union for its review contrary to Section
56 of the LGC; and (2) the lack of publication and posting in contravention of
Section 59 of the LGC. In fine, Land Bank cannot rely on the Subject
Resolutions as basis to validate the Subject Loans.

C. Ultra vires nature of the Subject Loans

Generally, an ultra vires act is one committed outside the object for which a
corporation is created as defined by the law of its organization and therefore
beyond the powers conferred upon it by law.
[There are two (2) types of ultra vires acts. [There is a distinction between
an act utterly beyond the jurisdiction of a municipal corporation and the irregular
exercise of a basic power under the legislative grant in matters not in
themselves jurisdictional. The former are ultra vires in the primary sense and
void; the latter, ultra vires only in a secondary sense which does not preclude
ratification or the application of the doctrine of estoppel in the interest of equity
and essential justice.]
An act which is outside of the municipalitys jurisdiction is considered as a
void ultra vires act, while an act attended only by an irregularity but remains
within the municipalitys power is considered as an ultra vires act subject to
ratification and/or validation.
[To the former belongs municipal contracts which (a) are entered into
beyond the express, implied or inherent powers of the local government unit;
and (b) do not comply with the substantive requirements of law e.g., when
expenditure of public funds is to be made, there must be an actual appropriation
and certificate of availability of funds; while to the latter belongs those which (a)
are entered into by the improper department, board, officer of agent; and (b)do

not comply with the formal requirements of a written contract e.g., the Statute of
Frauds.]
Subject Loans belong to the first class of ultra vires acts deemed as
void.
Records disclose that the said loans were executed by the Municipality for
the purpose of funding the conversion of the Agoo Plaza into a commercial
center pursuant to the Redevelopment Plan. However, the conversion of the
said plaza is beyond the Municipalitys jurisdiction considering the propertys
nature as one for public use and thereby, forming part of the public dominion.
Accordingly, it cannot be the object of appropriation either by the State or by
private persons. Nor can it be the subject of lease or any other contractual
undertaking.
Article 1409(1) of the Civil Code provides that a contract whose purpose is
contrary to law, morals, good customs, public order or public policy is considered
void and as such, creates no rights or obligations or any juridical relations.
Consequently, given the unlawful purpose behind the Subject Loans which is to
fund the commercialization of the Agoo Plaza pursuant to the Redevelopment
Plan, they are considered as ultra vires in the primary sense thus, rendering
them void and in effect, non-binding on the Municipality.
At this juncture, it is equally observed that the land on which the Agoo Plaza
is situated cannot be converted into patrimonial property absent any express
grant by the national government. As public land used for public use, the
foregoing lot rightfully belongs to and is subject to the administration and control
of the Republic of the Philippines. Hence, without the said grant, the Municipality
has no right to claim it as patrimonial property.
Nevertheless, while the Subject Loans cannot bind the Municipality for
being ultra vires, the officers who authorized the passage of the Subject
Resolutions are personally liable. Case law states that public officials can be
held personally accountable for acts claimed to have been performed in
connection with official duties where they have acted ultra vires, 55 as in this
case.

had the option of using either the Itemized or OSD method in preparing their
quarterly ITRs, provided only one method shall be applied in preparing the
annual ITR.
During the first three (3) quarters of the taxable year 2009, respondent
used the itemized method of deduction in determining its income tax payable in
accordance with Section 7 of RR No. 16-2008.
On February 24, 2010, BIR issued RR No. 02-2010 and RMC No. 016-1014
on February 26, 2010, amending Section 6 and 7 of RR No. 16-2008 and
applying it to the taxable year 2009.
On April 12, 2010 COL filed its Annual ITR for taxable year 2009 using the
OSD and paid the corresponding income tax due. On April 15, 2010, COL paid
under protest an additional income tax amounting to Php 8,960,245.00 in order
to avoid the imposition of interests, penalties, surcharges, and other increments
should respondent require COL to use the itemized method of deduction for its
Annual ITR.
On October 11, 2011, COL filed an application for the refund of and/or the
issuance of TCCs for the excess income tax paid during the taxable year 2009
amounting to Php 8,960,245.00.
In view of petitioner's inaction on the claim and the lapse of the prescriptive
period on filing a judicial claim, respondent filed on April 03, 2012 its Petition for
Review with the CTA. CTA Third Division rendered its Decision granting
respondent's petition, and directing the issuance of a TCC in its favor.
Petitioner filed a Motion for Reconsideration with the CTA Third Division
which was denied for lack of Merit. Thus, this petition.
Petitioner argues that RR No. 02-2010 was rendered strictly as an
interpretative ruling. She maintains that her interpretation of Section 34(L) of the
NIRC, through RR No. 02-2010, cannot be considered as retroactive, and as
such, was rendered strictly as an interpretative ruling, and not as subordinate
legislation designed to implement a primary legislation by providing details
thereof.
ISSUE:
1. WON the CTA-3D erred in ordering a tax credit certificate in favor of
respondent representing the additional income tax paid under protest
NO. Since petitioner has failed to show the existence of any of the
exceptions enumerated in Section 246 of the NIRC of 1997 against respondent,
and this Court sees none, RR No. 02-2010 cannot be given retroactive
application. Correspondingly, RR No. 16-2008 may still be made as a basis for
the application for the claim for refund of respondent.
2. CIR VS COL FINANCIAL
FACTS:
On November 26, 2008, the BIR issued RR No. 16-2008 where taxpayers

Documentation submitted by respondent is more than enough for petitioner

to determine if respondent did not comply with the submission of complete
documents in support of its administrative claim for refund. As such, there is no
merit to petitioner's assertion that the documents submitted by respondent were
grossly insufficient.

Substantial justice dictates that the government should not keep money that
does not belong to it at the expense of citizens. Respondent sufficiently proved
that there was indeed an erroneous or illegally collected tax and thus, entitled to
TCC.
2. WON the RR No. 02-2010 supported by RMC No. 016-1014 is valid on
retroactive application
NO. Respondent is correct in saying that the test on whether or not a
revocation, modification, or reversal of a tax regulation can be given retroactive
effect is not whether the ruling partakes of the nature of an interpretative or
substantial legislation, but rather the effect on the taxpayers. If the taxpayers are
prejudiced because a new interpretation of the regulation removes a benefit
provided by a previous interpretation, then the new interpretation is retroactive.
Section 246 of the NIRC is clear on its prohibition against retroactive rulings.
One must take into account that prior to the issuance of RR No. 02-2010,
petitioner issued RR No. 16-2008 on November 26, 2008 which was, at the time
of filing by the respondent of its quarterly income tax returns for the first 3
quarters of 2009, the controlling regulation.
Upon petitioner's issuance of RR No. 02-2010 on February 18, 2010 and as
clarified by RMC No. 16-2010 later on, all these modified the rules prescribed by
RR No. 16-2008. Under RR No. 02-2010 and RMC No. 16-2010, BIR curtailed
the taxpayer's option to choose the deduction method from quarter to quarter,
which was previously allowed under RR No. 16-2008. The BIR now required
taxpayers to choose the deduction method during its first quarterly filing, by
indicating on the form whether it will opt for the itemized or OSD deduction. The
choice of deduction method during the first quarter obligates the taxpayer to use
the same method throughout the taxable year, as well as in preparation of the
annual ITR.
Having lost this option upon the issuance of RR No. 02-2010, the same
should not be given retroactive application for being prejudicial to the rights of
the taxpayers, including herein respondent.

3. CIR VS PUREGOLD
FACTS:
Puregold is engaged in the sale of various consumer goods exclusively
within the Clark Special Economic Zone (CSEZ), and operates its store under
the authority and jurisdiction of Clark Development Corporation (CDC) and
CSEZ.
As an enterprise located within CSEZ and registered with the CDC,
Puregold had been issued Certificate of Tax Exemption which enumerated the
tax incentives granted to it, including tax and duty-free importation of goods.
Thus, in accordance with the tax exemption certificates granted to respondent
Puregold, it filed its Annual Income Tax Returns and paid the five percent (5%)
preferential tax, in lieu of all other national and local taxes for the period of
January 1998 to May 2004.
On July 25, 2005, in Coconut Oil Refiners v. Torres, however, the SC
annulled the adverted Sec. 5 of EO 80, in effect withdrawing the preferential tax
treatment enjoyed by all businesses located in the CSEZ.
On November 7, 2005, then BIR Deputy Commissioner for Special
Concems/OIC-Large Taxpayers Service Kim Jacinto-Henares issued a PAN
regarding unpaid VAT and excise tax on wines, liquors and tobacco products
imported by Puregold from January 1998 to May 2004 which the latter protested.
Pending the resolution of Puregold's protest, Congress enacted RA 9399
specifically to grant a tax amnesty to business enterprises affected by this
Court's rulings in John Hay People's Coalition v. Lim and Coconut Oil Refiners.
Under RA 9399, availment of the tax amnesty relieves the qualified taxpayers of
any civil, criminal and/or administrative liabilities arising from, or incident to,
nonpayment of taxes, duties and other charges..

On July 27, 2007, Puregold availed itself of the tax amnesty under RA 9399,
filing for the purpose the necessary requirements and paying the amnesty tax.
Nonetheless, on October 26, 2007, Puregold received a formal letter of demand
from the BIR for the payment of P2,780,610,174.51 supposedly representing
deficiency VAT and excise taxes on its importations of alcohol and tobacco
products from January 1998 to May 2004.

A tax amnesty, by nature, is designed to be a general grant of clemency and

the only exceptions are those specifically mentioned. It is significant to note that
there is nothing in Sec. 1 of RA 9399 that excludes Sec. 131(A) of the 1997
NIRC from the amnesty. In fact, there is no mention at all of any tax or duty
imposed by the 1997 NIRC as being specifically excluded from the coverage of
the tax amnesty.

In its response-letter, Puregold, thru counsel, requested the cancellation of

the assessment on the ground that it has already availed of the tax amnesty
under RA 9399. This notwithstanding, BIR issued on June 23, 2008 a Final
Decision on Disputed Assessment stating that the availment of the tax amnesty
under RA 9399 did not relieve Puregold of its liability for deficiency VAT, excise
taxes, and inspection fees under Sec. 13l(A) of the 1997 NIRC.

Clearly, the only exclusions that RA 9399 and its implementing rules
mention are those taxes on goods that are taken out of the special economic
zone. Yet, the petitioner herself admits that the assessment against Puregold
does not involve such goods, but only those that were imported by Puregold into
the CSEZ.

The CTA Second Division ruled that Puregold is entitled to tax amnesty,
which was affirmed by the CTA En Banc.
ISSUE: HELD:

If Congress intended Sec. 131 of the 1997 NIRC to be an exception to the

general grant of amnesty given under RA 9399, it could have easily so provided
in either the law itself, or even the implementing rules. In implementing tax
amnesty laws, the CIR cannot now insert an exception where there is none
under the law. And this Court cannot sanction such action.

1. WON tax amnesty granted under RA 9399 applicable to Puregold

YES. The allegation of the CIR regarding the principal place of business of
Puregold cannot be considered for first time on appeal, hence, Puregold is
entitled to avail of the tax amnesty under RA 9399.
RA 9399 does not prescribe that the amnesty-seeking taxpayer has its
principal office inside the CSEZ. It merely requires that such taxpayer be
registered and operating within the said zone. The documents presented
sufficiently prove that Puregold is registered as a locator by the CDC to operate
business within the CSEZ. Also, evidence satisfactorily show that Puregold has
been selling its goods exclusively within the CSEZ. Clearly, the location of
Puregold's principal office is not, standing alone, an argument against its
availment of the tax amnesty under RA 9399 because there is no question that
its actual operations were within the jurisdiction of the CSEZ.
2. WON RA 9399 grants amnesty from liability to pay taxes covers VAT
and excise tax under Section 131 of the 1997 NIRC
YES. The issue on the coverage and applicability of RA 9399 to Puregold
has already been addressed and disposed of by the CT A when it pointed out
that RA 9399 covers all applicable tax and duty liabilities, inclusive of fines,
penalties, interests and other additions thereto. Consequently, the government,
through the enactment of RA 9399, has expressed its intention to waive its right
to collect taxes, which in this case is the tax imposed under Sec. 131 (A) of the
1997 NIRC, subject to the condition that Puregold has complied with the
requirements provided therein.

4. FORTUNE TOBACCO VS CIR

FACTS:
In G.R. No. 167274-275 and G.R. No. 180006, the SC sustained petitioners
claim for refund of overpaid excise taxes for the period covering January 1, 2002
to December 31, 2002; paid in 2003 and the period covering January 1 to May
31, 2004. The subject claim for refund involves the amount of excise taxes
allegedly overpaid during the period beginning June 1, 2004 up to December 31,
2004.
Petitioner is the manufacturer/producer of different cigarette brands, with tax
rate classification based on net retail price prescribed by R.A. No. 4280.
Prior to January 1, 1997, the cigarette brands were subject to ad valorem
tax pursuant to then Section 142 of the Tax Code of 1977, as amended.

However, on January 1, 1997, R.A. No. 8240 took effect causing a shift from the
ad valorem tax (AVT) system to the specific tax system. As a result of such shift,
the cigarette brands were subjected to specific tax under Section 145 of the Tax
Code of 1997.
To implement the provisions for a 12% increase of excise tax on cigars and
cigarettes packed by machines by January 1, 2000, the Secretary of Finance,
upon recommendation of the respondent CIR, issued RR No. 17-99 which
provides that the new specific tax rate for any existing brand of cigars, cigarettes
packed by machine, distilled spirits, wines and fermented liquor shall not be
lower than the excise tax that is actually being paid prior to January 1, 2000.
On 31 March 2005, petitioner filed a claim for tax credit or refund under the
1997 NIRC for erroneously or illegally collected specific taxes covering the
period June to December 31, 2004 in the total amount of Php219,566,450.00.
On November 14, 2005, petitioner filed a Petition for Review which was
raffled to the Former First Division of this Court. Respondent in his Answer
raised among others, as a Special and Affirmative Defense, that the amount
being claimed by petitioner as alleged overpaid excise tax for the period
covering 1 June to 31 December 2004, is not properly documented.
After trial on the merits, the Former CTA First Division ruled that RR 17-99
is contrary to law and that there is insufficiency of evidence on the claim for
refund.
Petitioner filed its motion for reconsideration which was denied by the
Former First Division. Petitioner elevated its claim to the CTA En Banc, but was
rebuffed after the tax tribunal found no cause to reverse the findings and
conclusions of the CTA Division.
Petitioner claims that it paid a total amount of P219,566,450.00 in overpaid
excise taxes. For petitioner, considering that the CTA found RR 17-99 to be
contrary to law, there should be no obstacle to the refund of the total amount
excess excise taxes it had paid.
ISSUE: HELD:
WON petitioner is entitled to the refund of alleged excess excise tax paid
NO. The CTA committed no reversible error in denying petitioners claim for
tax refund for insufficient evidence because petitioner relied heavily on
photocopied documents to prove its claim. In this case, petitioner did not even
attempt to provide a plausible reason as to why the original copies of the
documents presented could not be produced before the CTA or any reason that
the application of any of the exceptions could be justified. Although petitioner

presented a witness to prove its claim, it appears that this witness was not even
a signatory to any of the disputed documentary evidence.
Petitioner failed to offer any proof or tender of excluded evidence. It utterly
failed to not only comply with the basic procedural requirement of presenting
only the original copies of its documentary evidence, but also to adhere to the
requirement to properly make its offer of proof or tender of excluded evidence
for the proper consideration of the appellate tribunal.
Even if the Court would consider petitioners otherwise excluded evidence,
the same would still fail to sufficiently prove the petitioners entitlement to its
claim for refund. It is petitioners burden to prove the allegations made in its
claim for refund. For a claim for refund to be granted, the manner in proving it
must be in accordance with the prescribed rules of evidence. It would have been
erroneous had the CTA En Banc relied on petitioner's own Excise Tax Refund
Computation Summary or the unsatisfactory explanation of its lone witness to
justify its claim for tax refund. The failure of petitioner to prove its claim in
accordance with the settled evidentiary rules merits its dismissal.
Claims for tax refunds are in the nature of tax exemptions which result in
loss of revenue for the government. Upon the person claiming an exemption
from tax payments rests the burden of justifying the exemption by words too
plain to be mistaken and too categorical to be misinterpreted; it is never
presumed nor be allowed solely on the ground of equity. In addition, one who
claims that he is entitled to a tax refund must not only claim that the transaction
subject of tax is clearly and unequivocally not subject to tax - the amount of the
claim must still be proven in the normal course, in accordance with the
prescribed rules on evidence.
After all, taxes are the lifeblood of the nation.

5. CHEVRON VS CIR
FACTS:
Chevron sold and delivered petroleum products to CDC in the period from
August-December 2007. Chevron did not pass on to CDC the excise taxes paid
on the importation of the petroleum products sold to CDC in taxable year 2007;
hence, on June 26, 2009, it filed an administrative claim for tax refund or
issuance of tax credit certificate in the amount of P6,542,400.00. Considering
that respondent CIR did not act on the administrative claim for tax refund or tax
credit, Chevron elevated its claim to the CTA by petition for review on June 29,
2009.
The CTA First Division denied Chevrons judicial claim for tax refund or tax
credit and Motion for Reconsideration. Chevron appealed to the CTA En Banc
which affirmed the ruling of the CTA First Division, stating that there was nothing
in Section 135(c) of the NIRC that explicitly exempted Chevron as the seller of
the imported petroleum products from the payment of the excise taxes; and
holding that because it did not fall under any of the categories exempted from
paying excise tax, Chevron was not entitled to the tax refund or tax credit.
Chevron sought reconsideration, but the CTA En Banc denied its motion.
Chevron appealed to SC (Second Division) but denied the petition for
review on certiorari for failure to show any reversible error on the part of the CTA
En Banc.
Hence, Chevron has filed the Motion for Reconsideration, submitting that it
was entitled to the tax refund or tax credit because ruling promulgated on April
25, 2012 in Pilipinas Shell, on which the CTA En Banc had based its denial of
the claim of Chevron, was meanwhile reconsidered by the Courts First Division
on February 19, 2014.
ISSUE: HELD:
WON Chevron was entitled to the tax refund or the tax credit for the excise
taxes paid on the importation of petroleum products that it had sold to
CDC in 2007, a tax-exempt entity under Section 135(c) of the NIRC
YES. Excise tax on petroleum products is essentially a tax on property, the

direct liability for which pertains to the statutory taxpayer. Any excise tax paid by
the statutory taxpayer on petroleum products sold to any of the entities or
agencies named in Section 135 of the NIRC exempt from excise tax is deemed
illegal or erroneous, and should be credited or refunded to the ayor pursuant to
Section 204 of the NIRC. This is because the exemption granted under Section
135 of the NIRC must be construed in favor of the property itself, that is, the
petroleum products.
Accordingly, the excise taxes that Chevron paid on its importation of
petroleum products subsequently sold to CDC were illegal and erroneous, and
should be credited or refunded to Chevron in accordance with Section 204 of the
NIRC.
Chevron, being the statutory taxpayer, paid the excise taxes on its
importation of the petroleum products.
Pursuant to Section 135(c) of the NIRC, petroleum products sold to entities
that are by law exempt from direct and indirect taxes are exempt from excise
tax. The phrase which are by law exempt from direct and indirect taxes
describes the entities to whom the petroleum products must be sold in order to
render the exemption operative. Section 135(c) should thus be construed as an
exemption in favor of the petroleum products on which the excise tax was levied
in the first place. The exemption cannot be granted to the buyers that is, the
entities that are by law exempt from direct and indirect taxes because they are
not under any legal duty to pay the excise tax.
Inasmuch as its liability for the payment of the excise taxes accrued
immediately upon importation and prior to the removal of the petroleum products
from the customs house, Chevron was bound to pay, and actually paid such
taxes. But the status of the petroleum products as exempt from the excise taxes
would be confirmed only upon their sale to CDC in 2007. Before then, Chevron
did not have any legal basis to claim the tax refund or the tax credit as to the
petroleum products.
Consequently, the payment of the excise taxes by Chevron upon its
importation of petroleum products was deemed illegal and erroneous upon the
sale of the petroleum products to CDC. Section 204 of the NIRC explicitly
allowed Chevron as the statutory taxpayer to claim the refund or the credit of the
excise taxes thereby paid.

In cases involving excise tax exemptions on petroleum products under

Section 135 of the NIRC, the Court has consistently held that it is the statutory
taxpayer, not the party who only bears the economic burden, who is entitled to
claim the tax refund or tax credit. But the Court has also made clear that this rule
does not apply where the law grants the party to whom the economic burden of
the tax is shifted by virtue of an exemption from both direct and indirect taxes. In
which case, such party must be allowed to claim the tax refund or tax credit
even if it is not considered as the statutory taxpayer under the law.
The general rule applies here because Chevron did not pass on to CDC the
excise taxes paid on the importation of the petroleum products, the latter being
exempt from indirect taxes by virtue of Section 24 of RA No. 7916, in relation to
Section 15 of Republic Act No. 9400, not because Section 135(c) of the NIRC
exempted CDC from the payment of excise tax.
Accordingly, conformably with Section 204(C) of the NIRC, and pertinent
jurisprudence, Chevron was entitled to the refund or credit of the excise taxes
erroneously paid on the importation of the petroleum products sold to CDC.

13. CIR VS STANDARD CHARTERED BANK

FACTS:
On July 14, 2004, SCB received CIRs Formal Letter of Demand dated June
24, 2004, for alleged deficiency income tax, final income tax - FCDU, EWT,
WCT, FWT and increments for taxable year 1998 amounting to P33,326,211.37.
On August 12, 2004, SCB protested the said assessment by filing a letterprotest dated August 9, 2004 addressed to the BIR Deputy Commissioner for
Large Taxpayers' Service stating the factual and legal bases of the assessment,
and requested that it be withdrawn and cancelled.
In view of CIRs inaction on SCBs protest, on March 9, 2005, SCB filed the
present Petition for Review. CTA in Division granted SCB's petition for the
cancellation and setting aside of the subject Formal Letter of Demand and
Assessment Notices on the ground that petitioner's right to assess for the
deficiency taxes was already barred by prescription. Since the waivers for

extension of time to assess failed to strictly comply and conform with the
provisions of RMO 20-90 and thus, were invalid, it necessarily follows that the
subsequent waivers did not in any way cure these defects. Neither did it extend
the prescriptive period to assess.
ISSUE: HELD:
WON CIR's right to assess SCB for deficiency taxes has already
prescribed
YES. CIR's right to assess for deficiency taxes has already prescribed
under Section 203 of the NIRC of 1997, as amended, for failure to comply with
the requirements set forth in RMO No. 20-90 pertaining to the proper and valid
execution of a waiver of the Statute of Limitations, and in accordance with
existing jurisprudential pronouncements.
CIR only had three years, counted from the date of actual filing of the return
or from the last date prescribed by law for the filing of such return, whichever
comes later, to assess a national internal revenue tax or to begin a court
proceeding for the collection thereof without an assessment. The extension of
the original three-year prescriptive period by the execution of a valid waiver,
where the taxpayer and the CIR may stipulate to extend the period of
assessment by a written agreement executed prior to the lapse of the period
prescribed by law, and by subsequent written agreements before the expiration
of the period previously agreed upon.
In delineation of the same sense about the waiver of the Statute of
Limitations, RMO No. 20-90 and Revenue Delegation Authority Order (RDAO)
No. 05-01 were issued on 4 April 1990 and 2 August 2001, respectively. The
said revenue orders outline the procedure for the proper execution of a waiver.
The provisions of the RMO and RDAO explicitly show their mandatory nature,
requiring strict compliance. Hence, failure to comply with any of the requisites
renders a waiver defective and ineffectual.
Applying the rules and rulings, the waivers in question were defective and
did not validly extend the original three-year prescriptive period. The subject
waivers of the Statute of Limitations were in clear violation of RMO No. 20-90:
1) This case involves assessment amounting to more than P1,000,000.00.
For this, RMO No. 20-90 requires the Commissioner of Internal Revenue to sign
for the BIR.1avvphi1 A perusal of the First and Second Waivers of the Statute of
Limitations shows that they were signed by Assistant Commissioner-Large
Taxpayers Service Virginia L. Trinidad and Assistant Commissioner-Large
Taxpayers Service Edwin R. Abella respectively, and not by the Commissioner of
Internal Revenue;

2) The date of acceptance by the Assistant Commissioner-Large Taxpayers

Service Virginia L. Trinidad of the First Waiver was not indicated therein;

14. BOC VS DEVANADERA

FACTS:

3) The date of acceptance by the Assistant Commissioner-Large Taxpayers

Service Edwin R. Abella of the Second Waiver was not indicated therein;
4) The First and Second Waivers of Statute of Limitations did not specify the
kind and amount of the tax due; and
5) The tenor of the Waiver of the Statute of Limitations signed by petitioner's
authorized representative failed to comply with the prescribed requirements of
RMO No. 20-90. The subject waiver speaks of a request for extension of time
within which to present additional documents, whereas the waiver provided
under RMO No. 20-90 pertains to the approval by the Commissioner of Internal
Revenue of the taxpayer's request for re-investigation and/or reconsideration of
his/its pending internal revenue case.
Taking into consideration the foregoing defects in the First and Second
Waivers presented and admitted in evidence before the court a quo, the period
to assess the tax liabilities of respondent for taxable year 1998 was never
extended. Consequently, when the succeeding waivers of Statute of Limitations
were subsequently executed covering the same tax liabilities of respondent, and
there being no assessment having been issued as of that time, prescription has
already set in. Thus, the subject waivers did not extend the period to assess the
subject deficiency tax liabilities of respondent for taxable year 1998. The
aforesaid waivers cannot be considered as "subsequent written agreement(s)
made before the expiration of the period previously agreed upon" referred to in
the second sentence of the earlier quoted Section 222(b) of the NIRC of 1997,
as amended, since there is no "period previously agreed upon" to speak of.

UNIOIL Petroleum Philippines, Inc. is engaged in marketing, distribution,

and sale of petroleum, oil and other products, while its co-respondent OILINK
International, Inc. is engaged in manufacturing, importing, exporting, buying,
selling, or otherwise dealing in at wholesale and retails of petroleum, oil, gas and
of any and all refinements and byproducts thereof.
On January 30, 2007, BOC Commissioner Napoleon L. Morales issued
Audit Notification Letter (ANL) informing the President of OILINK that the Post
Entry Audit Group (PEAG) of the BOC will be conducting a compliance audit,
including the examination, inspection, verification and/or investigation of all
pertinent records of OILINK's import transactions for the past three (3)-year
period counted from the said date.
Although OILINK expressed its willingness to comply with the request, it did
not submit BOCs requested documents. Thus, Commissioner Morales approved
the filing of an administrative case against OILINK for failure to comply with the
requirements of CAO No. 4-2004 on July 30, 2007.
On December 14, 2007, the Legal Service of the BOC rendered a Decision
finding that OILINK violated Section IV.A.2(c) and (e) of CAO 4- 20047 when it
refused to furnish the Audit Team copies of the required documents, despite
repeated demands. This is without prejudice to the filing of a criminal case or
any appropriate legal action against the importer in order to protect the interest
of the government and deter other importers from committing the same offense.
Pursuant to the Decision dated December 14, 2007, Commissioner
Morales, in a letter, directed the President of OILINK to pay the BOC the
administrative fine of P2,764,859,304.80 for violation of CAO No. 4-2004, in
relation to Section 2504 of the TCCP, otherwise, the BOC will be compelled to
file the necessary legal action and put in force Section 1508 of the TCCP against
its succeeding shipments to protect the government's interest.
On April 23, 2008, a Hold Order was issued by Horacio P. Suansing, Jr.,
District Collector, Port of Manila, against all shipments of OILINK for failure to
settle its outstanding account with the BOC and to protect the interest of the
government pursuant to Section 1508 of the TCCP.
On May 2, 2008, Rochelle E. Vicencio, Corporate Administrative Supervisor
of UNIOIL, citing the existing Terminalling Agreement dated January 2, 2008
with OILINK for the Storage of UNIOIL's aromatic process oil and industrial
lubricating oils, requested District Collector Suansing Jr. to allow it to withdraw
base oils from OILINK's temporarily closed Terminal.

On May 6, 2008, Commissioner Morales granted the request of UNIOIL to

withdraw its base oils stored at OILINK's terminal/depot based on the
Terminalling Agreement between the two companies, subject to the following
conditions:

Dissatisfied, the BOC filed a motion for reconsideration which was denied
by the public respondent, the Acting Secretary of Justice Agnes VST
Devanadera, in a Resolution dated December 28, 2009.
On March 11, 2010, the BOC filed a petition for certiorari with the CA.

1. Only Unioil products shall be withdrawn subject to proper inventory by the

BIR and BOC.
2. Appropriate duties and taxes due on the products to be withdrawn are
fully paid or settled.
3. The company should allow the operation/withdrawal to be closely
monitored and continuously underguarded by assigned Customs personnel.14

In the Resolution dated March 26, 2010, the CA dismissed outright the
petition due to procedural defects. In the Resolution dated August 4, 2010, the
CA denied the private respondents' motion for reconsideration of the March 26,
2010 Resolution.
Aggrieved, the BOC filed the instant petition for review on certiorari.
ISSUE: HELD:

On May 9, 2008, a Warrant of Seizure and Detention (WSD) was issued by

District Collector Suansing Jr., directing the BOC officials to seal and padlock
the oil tanks/depots of OILINK located in Bataan.
On May 12, 2008, Kenneth C. Pundanera, Operations Manager of UNIOIL,
requested Zaldy E. Almoradie, District Collector of Mariveles, Bataan, for
permission to release UNIOIL-owned products from OILINK's storage terminal.
District Collector Almoradie approved the release of the petroleum products. On
May 15, 2008, Pundanera wrote a clarificatory letter pursuant to the verbal
instruction of District Collector Almoradie to explain the withdrawal of products
from the Terminal of OILINK.

WON the CA has certiorari jurisdiction over the resolution of the

Acting Secretary of Justice, affirming the dismissal of the complaintaffidavit for violation of provisions of the TCCP due to lack of probable
cause
NO. With the enactment of R.A. No. 9282, amending R.A. No. 1125 by
expanding the jurisdiction of the CTA, enlarging its membership and elevating its
rank to the level of a collegiate court with special jurisdiction, CTA has
jurisdiction to review through a petition for certiorari the DOJ resolution in
preliminary investigations involving tax and tariff offenses.

In a complaint-affidavit dated December 15, 2008, Atty. Balmyrson M.

Valdez, a member of the petitioner BOC's Anti-Oil Smuggling Coordinating
Committee that investigated the illegal withdrawal by UNIOIL of oil products
consigned to OILINK, valued at P181,988,627.00 with corresponding duties and
taxes in the amount of P35,507,597.00, accused the private respondents of
violation of Sections 3601 and 3602, in relation to Sections 2503 and 2530,
paragraphs f and l (3), (4) and (5), of the TCCP.

The power of the CTA includes that of determining whether or not there has
been grave abuse of discretion amounting to lack or excess of jurisdiction on the
part of the RTC in issuing an interlocutory order in cases falling within the
exclusive appellate jurisdiction of the tax court. It, thus, follows that the CTA, by
constitutional mandate, is vested with jurisdiction to issue writs of certiorari in
these cases.

In a letter dated December 15, 2008, Commissioner Morales referred to the

Office of Chief State Prosecutor Jovencito R. Zuo the said complaintaffidavit,
together with its annexes, for preliminary investigation. During the said
investigation, BOC's counsel appeared and all of the private respondents
submitted their respective counter-affidavits.

Indeed, in order for any appellate court to effectively exercise its appellate
jurisdiction, it must have the authority to issue, among others, a writ of certiorari.
In transferring exclusive jurisdiction over appealed tax cases to the CTA, it can
reasonably be assumed that the law intended to transfer also such power as is
deemed necessary, if not indispensable, in aid of such appellate jurisdiction.
There is no perceivable reason why the transfer should only be considered as
partial, not total.

In a Resolution dated May 29, 2009, public respondent Arman A. De

Andres, State Prosecutor of the Department of Justice (DOJ), recommended the
dismissal of the complaint-affidavit for lack of probable cause. The Resolution
was approved by public respondents Assistant Chief State Prosecutor Pedrito L.
Rances and Chief State Prosecutor Zuo. On automatic review, the Resolution
was affirmed by then Secretary of Justice Raul M. Gonzales.

Since appellate jurisdiction over private respondents' complaint for tax

refund is vested in the CTA, it follows that a petition for certiorari seeking
nullification of an interlocutory order issued in the said case should, likewise, be
filed with the same court. To rule otherwise would lead to an absurd situation
where one court decides an appeal in the main case while another court rules
on an incident in the very same case.
The court, in aid of its appellate jurisdiction, has authority to control all
auxiliary and incidental matters necessary to the efficient and proper exercise of
that jurisdiction. For this purpose, it may, when necessary, prohibit or restrain the
performance of any act which might interfere with the proper exercise of its
rightful jurisdiction in cases pending before it.
Lastly, it would not be amiss to point out that a court which is endowed with
a particular jurisdiction should have powers which are necessary to enable it to
act effectively within such jurisdiction. These should be regarded as powers
which are inherent in its jurisdiction and the court must possess them in order to
enforce its rules of practice and to suppress any abuses of its process and to
defeat any attempted thwarting of such process.
In this regard, Section 1 of RA 9282 states that the CTA shall be of the
same level as the CA and shall possess all the inherent powers of a court of
justice.
The authority of the CTA to take cognizance of petitions for certiorari
questioning interlocutory orders issued by the RTC in a local tax case is
included in the powers granted by the Constitution as well as inherent in the
exercise of its appellate jurisdiction.
Concededly, there is no clear statement under R.A. No. 1125, the
amendatory R.A. No. 9282, let alone in the Constitution, that the CTA has
original jurisdiction over a petition for certiorari. By virtue of Section 1, Article VIII
of the 1987 Constitution, vesting judicial power in the Supreme Court and such
lower courts as may be established by law, to determine whether or not there
has been a grave abuse of discretion on the part of any branch or
instrumentality of the Government, in relation to Section 5(5), Article VIII thereof,
vesting upon it the power to promulgate rules concerning practice and procedure
in all courts, the Court thus declares that the CA's original jurisdiction over a
petition for certiorari assailing the DOJ resolution in a preliminary investigation
involving tax and tariff offenses was necessarily transferred to the CTA pursuant
to Section 7 of R.A. No. 9282, and that such petition shall be governed by Rule
65 of the Rules of Court, as amended. Accordingly, it is the CTA, not the CA,
which has jurisdiction over the petition for certiorari assailing the DOJ resolution
of dismissal of the BOC's complaint-affidavit against private respondents for
violation of the TCCP.

15. MITSUBISHI VS BOC

FACTS:

BOC filed a collection suit for unpaid taxes and customs duties amounting
to P46,844,385.00 against Mitsubishi Motors Philippines Corporation before the
RTC-Manila. BOC alleged that from 1997-1998, petitioner was able to secure
tax credit certificates (TCCs) from various transportation companies; after which,
it made several importations and utilized said TCCs for the payment of various
customs duties and taxes in the aggregate amount of P46,844,385.00.
Since a post-audit investigation of the Department of Finance revealed that
the TCCs were fraudulently secured with the use of fake commercial and bank
documents, BOC demanded payment by MItsubishi of its unsettled tax and
customs duties, but did not pay.
Mitsubishi countered that it acquired the TCCs from their original holders in
good faith and that they were authentic, and thus, their remittance to respondent
should be considered as proper settlement of the taxes and customs duties it
incurred in connection with the importations.
RTC granted petitioners Demurrer to Plaintiffs Evidence, and accordingly,
dismissed respondents collection case on the ground of insufficiency of
evidence;finding that respondent had not shown any proof or substantial
evidence, clear and convincing, of fraud or conspiracy on the part of petitioner in
the procurement of the TCCs. BOC appealed to CA which referred the records
of the collection case to the CTA for proper disposition on the ground that it did
not have jurisdiction.
Aggrieved, Mitsubushi filed a motion for reconsideration arguing that since
the CA does not have jurisdiction over BOCs appeal, it cannot perform any
action on it except to order its dismissal. Said motion was denied, hence, this
petition.
ISSUE: HELD:
WON the CA correctly referred the records of the collection case to the

CTA for proper disposition of the appeal taken by BOC

NO.
Jurisdiction is defined as the power and authority of a court to hear, try, and
decide a case. In order for the court or an adjudicative body to have authority to
dispose of the case on the merits, it must acquire, among others, jurisdiction
over the subject matter. It is axiomatic that jurisdiction over the subject matter is
the power to hear and determine the general class to which the proceedings in
question belong; it is conferred by law and not by the consent or acquiescence
of any or all of the parties or by erroneous belief of the court that it exists. Thus,
when a court has no jurisdiction over the subject matter, the only power it has is
to dismiss the action.
Section 7 of Republic Act No. (RA) 1125, as amended by RA 9282, explicitly
provide that the CTA has exclusive appellate jurisdiction over tax collection
cases originally decided by the RTC.
In the instant case, the CA has no jurisdiction over respondents appeal;
hence, it cannot perform any action on the same except to order its dismissal
pursuant to Section 2, Rule 50 of the Rules of Court. Therefore, the act of the
CA in referring respondents wrongful appeal before it to the CTA under the
guise of furthering the interests of substantial justice is blatantly erroneous, and
thus, stands to be corrected.
In view of respondents availment of a wrong mode of appeal via notice of
appeal stating that it was elevating the case to the CA instead of appealing by
way of a petition for review to the CTA within 30 days from receipt of a copy of
the RTCs August 3, 2012 Order the Court is constrained to deem the RTC's
dismissal of respondent's collection case against petitioner final and executory. It
is settled that the perfection of an appeal in the manner and within the period set
by law is not only mandatory, but jurisdictional as well, and that failure to perfect
an appeal within the period fixed by law renders the judgment appealed from
final and executory.