Case Doctrine

Doosan The corporate taxpayer's excess tax credits or overpaid income tax in a
Heavy given taxable year may either be refunded (either in the form of cash or
Industrie tax credit certificate) or carried over and applied against the income tax
s vs. CTA liabilities of the succeeding taxable years. The carry-over option,
however, once taken is irrevocable for the taxable period and no
application for a tax refund or issuance of a tax credit certificate shall
then be allowed.

The reckoning date of the two-year prescriptive period for instituting a

suit or proceeding for refund of excess and unutilized CWT is the date of
filing of the Final Adjustment Return (Annual ITR)

We stress that the pertinent provisions of law and established

jurisprudence evidently demonstrate that there is no need for the
claimant, respondent in this case, to prove actual remittance by the
withholding agent (payor) to the BIR.
Philippin The CTA preliminarily discussed the need to determine if taxpayer is
e Plaza entitled to abatement prior to deciding on the refund. The Court said that
Holdings the propriety of the abatement will ultimately determine if taxpayer is
vs. CIR entitled to a refund. However, the Court also found that taxpayer did not
file an administrative claim prior to filing the amended Petition for Review.
An administrative claim, being a requirement of law, is jurisdictional.
Hence, the lack of which is fatal to taxpayers claim. *File administrative
claim for refund before filing Petition for Review
Air The taxpayer did not fail to exhaust administrative remedies by not
Philippin appealing to the SOF and OP. The basis of the findings in BIR Ruling No.
es Corp. 001- 2003 is the 2002 DOE Certification which only covered the year
vs. CIR 2001 and the first half of 2002, while the subject importation in this case
was made in the year 2007. Thus, the Court may rule on taxpayer's claim
for refund without ruling on the failure of taxpayer to
appeal the BIR Ruling No. 001-2003

There are 2 requisites for the tax exemption:

a) that the imported materials were used in the operations of taxpayer;
and
b) that said materials are not available locally in
sufficient quantities and at a reasonable price.
As to the first requisite, taxpayer was able to prove such through its
witnesses and the certification from CAAP. As to the second requisite,
taxpayer also proved the same by presenting a comparison of price
quotations from different local sellers with the imported price. Taxpayer
also presented the estimated demand of Jet A-1 in the Philippines
alongside the estimated volume of production of the year. Such were
sufficient to establish that the conditions for the tax benefit in its charter
are present.
Marubeni Taxpayer is not entitled to refunds. Taxpayer misunderstood the
vs. CIR requirements of the RMC.

For item (a), taxpayer submitted sales invoices that it issued to Marubeni-
Tokyo. However, the main purpose of provision "A-8.a" of RMC No. 42-
2003 is to prove that the offsetting arrangement is actually in place, by
proving that taxpayer has payables to the foreign parent or its affiliates
against which taxpayer's receivables (i.e., from its sale of goods and
services to Marubeni-Tokyo) were offset. On the other hand, taxpayers
 evidence proved the liability of the foreign company, not its own.

As to item (b), taxpayer presented several service agreements which

govern the services that taxpayer will provide to Marubeni-Tokyo.
However, it is clear that what is required is the presentation of other
contracts that bring about liabilities which are offset against receivables
from export sales. Clearly, the provision pertains to payables of taxpayer
owed to Marubeni Tokyo that will be offset against the receivables arising
from its direct exports and commission income, and not the other way
around.
Lastly, taxpayer contends that it was able to present evidence of
proceeds of loans by
submitting the Mutual Account Ledger which details the offsetting of
payables between taxpayer and Marubeni-Tokyo. However, it should be
emphasized that the amount of foreign currency remittances was the net
amount of all transactions with Marubeni Tokyo which included not only
the receivables arising from export sales of goods and commission
income but also advances and reimbursements made by taxpayer for
Marubeni Tokyo. Given that there were no transaction flows, nor
supporting schedules and reconciliations presented, it was not possible
for the Court to determine the amount of export sales and
RCD vs. To be entitled to the relief [refund of its excess/unutilized creditable
CIR withholding taxes], as follows:
1. The claim for refund was filed within the two-year prescriptive period
as provided under Section 204 (C)6 in relation to Section 2297of the NIRC
of 1997, as amended;
2. The fact of withholding is established by a copy of a statement duly
issued by the payor (withholding agent) to the payee, showing the
amount paid and the amount of tax withheld therefrom;
3. That the income upon which the taxes were withheld was included in
the return of the recipient.

Proof of actual remittance by the respondent is not needed in order to

prove withholding and remittance of taxes to petitioner. Section 2.58.3
(B) of Revenue Regulation No. 2-98 clearly provides that proof of
remittance is the responsibility of the withholding agent and not of the
taxpayer-refund claimant

Sections 57 and 58 of the NIRC of 1997, as amended, the withholding of

income tax and the remittance thereof to the BIR is the responsibility of
the payor and not the payee.

The Certificates of Creditable Tax Withheld at Source issued by the

withholding agents of the government are prima facie proof of actual
payment by herein respondent-payee to the government itself through
said agents."
GJM vs. The CIR has three (3) years from the date of the actual filing of the return
CIR or from the last day of prescribed by law for the filing of the return,
whichever is later, to assess internal revenue taxes.

If the taxpayer denies having received an assessment from the BIR, it

then becomes incumbent upon the latter to prove by competent evidence
that such notice was indeed received by the addressee. To prove the fact
of mailing, it is essential to present the registry receipt issued by the
Bureau of Posts or the Registry return card which would have been signed
 by the taxpayer or its authorized representative. And if said documents
could not be located, the CIR should have, at the very least, submitted to
the Court a certification issued by the Bureau of Posts and any other
pertinent document executed with its intervention. The Court does not
put much credence to the self-serving documentations made by the BIR
personnel

The BIR's failure to prove GJM's receipt of the assessment leads to no

other conclusion but that no assessment was issued. Consequently, the
government's right to issue an assessment for the said period has already
prescribed.
Sps. Section 11 of R.A. No. 1125, as amended by R.A. No. 9282, embodies the
Pacquiao rule that an appeal to the CTA from the decision of the CIR will not
vs. CTA suspend the payment, levy, distraint, and/or sale of any property of the
taxpayer for the satisfaction of his tax liability as provided by existing law.
When, in the view of the CTA, the collection may jeopardize the interest of
the Government and/or the taxpayer, it may suspend the said collection
and require the taxpayer either to deposit the amount claimed or to file a
surety bond.
Essentially, the petitioners ascribe grave abuse of discretion on them part
of the CTA when it issued the subject resolutions requiring them to
deposit the amount of P3,298,514,894.35 or post a bond in the amount of
P4,947,772,341.53 as a condition for its order enjoining the CIR from
collecting the taxes from them.
It is clear that the authority of the courts to issue injunctive writs to
restrain the collection of tax and to dispense with the deposit of the
amount claimed or the filing of the required bond is not simply confined
to cases where prescription has set in. As explained by the Court in those
cases, whenever it is determined by the
courts that the method employed by the Collector of Internal Revenue in
the collection of tax is not sanctioned by law, the bond requirement under
Section 11 of R.A. No. 1125 should be dispensed with. The purpose of the
rule is not only to prevent jeopardizing the interest of the taxpayer, but
more importantly, to prevent the absurd situation wherein the court
would declare that the collection by the summary methods of distraint
and levy was violative of law, and then, in the same breath require the
petitioner to deposit or file a bond as a prerequisite for the issuance of a
writ of injunction.
As the CTA is in a better position to make such a preliminary
determination, a remand to the CTA is in order. To resolve the issue of
whether the petitioners should be required to post the security bond
under Section 11 of R.A. No. 1125, and, if so, in what amount, the CTA
must take into account
Liquigaz A_ _v_o_i_d_ _F_D_D_A_ _d_o_e_s_ _n_o_t_ _i_p_s_o_ _f_a_c_t_o_
vs. CIR _r_e_n_d_e_r_ _t_h_e_ _a_s_s_e_s_s_m_e_n_t_ _v_o_i_d_ _
Where a taxpayer questions an assessment and asks the Collector to
reconsider or cancel the same because he (taxpayer) believes that he is
not liable therefor, the assessment becomes a disputed assessment
that the Collector must decide, and the taxpayer can appeal to the CTA
only upon receipt of the of the decision of the Collector on the disputed
assessment.

From the foregoing, it is clear that what is appealable to the CTA is the
decision of the CIR on disputed assessment and not the assessment
itself.
 Clearly, a decision of the CIR on a disputed assessment differs from the
assessment itself. Hence, the invalidity of one does not necessarily result
to the invalidity of the other unless the law or regulations otherwise
provide.
T_h_e_ _F_D_D_A_ _m_u_s_t_ _s_t_a_t_e_ _t_h_e_ _f_a_c_t_s_ _a_n_d_
_t_h_e_ _l_a_w_ _o_n_ _w_h_i_c_h_ _i_t_ _i_s_ _b_a_s_e_d_ _t_o_
_p_r_o_v_i_d_e_ _t_h_e_ _t_a_x_p_a_y_e_r_ _t_h_e_
_o_p_p_o_r_t_u_n_i_t_y_ _t_o_ _f_i_l_e_ _a_n_ _i_n_t_e_l_l_i_g_e_n_t_
_a_p_p_e_a_l_ _
The reason for requiring that taxpayers be informed in writing of the facts
and law on which the assessment is made is the constitutional guarantee
that no person shall be deprived of his property without due process of
law. Merely notifying the taxpayer of its tax liabilites without elaborating
on its details is insufficient.
The Court, however, finds that the CTA erred in concluding that the
assessment on EWT and FBT deficiency was void because the FDDA
covering the same was void. The assessment remains valid
notwithstanding the nullity of FDDA because the assessment itself differs
from the decision on the disputed assessment.
The Court agrees that the FDDA substantially informed Liquigaz of its tax
liabiliities with reggard to its WTC assessment. As highlighted by the CTA,
the basis for the assessment was the same for the FLD and the FDDA,
where the salaries reflected in thhe ITR and the alphalist were compared
resulting in discrepanct withholding taxes on compensation merely arose
from the modification of the tax rates used in the FDDA. The Court notes
it was Liquigaz which proposed the rate of 25.40% as a more appropriate
tax rate as it is represented the effective tax on compensation paid for
the taxable year 2005. As such, Liquigaz was effectively informed in
writing of the factual bases of its assessment for WTC because the basis
for the FDDa, with regards to the WTC, was identical with the FAN which
had a detail of discrepancy attached to it.
Capitol Submarine or undersea communications cables are akin to electric
Wireless transmission lines which this Court has recently declared in Manila
vs. Electric Company v. City Assessor and City Treasurer of Lucena City,37 as
Provincia "no longer exempted from real property tax" and may qualify as
l "machinery" subject to real property tax under the Local Government
Assessor Code. To the extent that the equipment's location is determinable to be
s of within the taxing authority's jurisdiction, the Court sees no reason to
Batangas distinguish between submarine cables used for communications and
aerial or underground wires or lines used for electric transmission, so that
both pieces of property do not merit a different treatment in the aspect of
real property taxation.

And even under Capwire's legislative franchise, RA 4387, which amended

RA 2037, where it may be derived that there was a grant of real property
tax exemption for properties that are part of its franchise, or directly
meet the needs of its business,53 such had been expressly withdrawn by
the Local Government Code, which took effect on January 1, 1992,
Sections 193 and 234 of which provide

LGC: tax exemptions or incentives granted to, or presently enjoyed by all

persons, whether natural or juridical, including government-owned or
controlled corporations, except local water districts, cooperatives duly
registered under R.A. No. 6938, nonstock and nonprofit hospitals and
educational institutions, are hereby withdrawn.
PNB vs. In claims for excess and unutilized creditable withholding tax, the
CIR submission of BIR Forms 2307 is to prove the fact of withholding of the
excess creditable withholding tax being claimed for refund. This is clear in
the provision of Section 58.3, RR 2-98, as amended, and in various rulings
of the Court.33 In the words of Section 2.58.3, RR 2-98, That the fact of
withholding is established by a copy of a statement duly issued by the
payor (withholding agent) to the payee showing the amount paid and the
amount of tax withheld therefrom.

Hence, the probative value of BIR Form 2307, which is basically a

statement showing the amount paid for the subject transaction and the
amount of tax withheld therefrom, is to establish only the fact of
withholding of the claimed creditable withholding tax. There is nothing in
BIR Form No. 2307 which would establish either utilization or non-
utilization, as the case may be, of the creditable withholding tax.

While perhaps it may be necessary to prove that the taxpayer did not use
the claimed creditable withholding tax to pay for his/its tax liabilities,
there is no basis in law or jurisprudence to say that BIR Form No. 2307 is
the only evidence that may be adduced to prove such non-use.

In this case, PNB was able to establish, through the evidence it presented,
that Gotesco did not in fact use the claimed creditable withholding taxes
to settle its tax liabilities,

Ergo, theevidence on record sufficiently proves that the claimed

creditable withholding tax was withheld and remitted to the BIR, that
such withholding and remittance was erroneous, and that the claimed
creditable withholding tax was not used by Gotesco to settle its tax
liabilities.

Refund granted
Demaala The taxing power granted by constitutional fiat to local government units
vs. COA exists in the wider context to ensure the autonomy of local
governments.

The Special Education Fund was created by virtue of R. A. No. 5447, which
is [a]n act creating a special education fund to be constituted from the
proceeds of an additional real property tax and a certain portion of the
taxes on Virginia-type cigarettes and duties on imported leaf tobacco,
defining the activities to be financed, creating school boards for the
purpose, and appropriating funds therefrom, which took effect on January
1, 1969. Pursuant thereto, P.D. No. 464, also known as the Real Property
Tax Code of the Philippines, imposed an annual tax of 1% on real property
which shall accrue to the SEF.47

Where the provision reads may, this word shows that it is not
mandatory but discretionary. It is an auxiliary verb indicating liberty,
opportunity, permission and possibility. The use of the word may in a
statute denotes that it is directory in nature and generally permissive
only.

Section 235s permissive language is unqualified. Moreover, there is no

limiting qualifier to the articulated rate of 1% which unequivocally
indicates that any and all special education fund collections must be at
 such rate.
The actions of the officials of the Municipality of Narra are consistent with
the rule that ordinances are presumed valid. In finding liability,
respondent suggests that officers of the Municipality should not comply
with an ordinance duly passed by the Sangguniang Panlalawigan.

It is true that petitioner, as the local chief executive, was charged with
fidelity to our laws. However, it would be grossly unfair to sustain
respondents position. It implacably dwells on supposed non-compliance
with Section 235 but turns a blind eye on the context which precipitated
the collection made by the Municipality of Narra at the reduced rate of
0.5%.

The mayors actions were done pursuant to an ordinance which, at the

time of the collection, was yet to be invalidated.

It is basic that laws and local ordinances are presumed to be valid unless
and until the courts declare the contrary in clear and unequivocal
terms.62 Thus, the concerned officials of the Municipality of Narra,
Palawan must be deemed to have conducted themselves in good faith
and with regularity when they acted pursuant to Chapter 5, Section 48 of
Provincial Ordinance No. 332-A, Series of 1995, and collected the
additional levy for the special education fund at the rate of 0.5%.
Accordingly, it was improper for respondent to attribute personal liability
to petitioner and to require her to personally answer to the deficiency in
special education fund collections.
City of The CTA en banc affirmed the factual findings of the court in division,
Makati upholding the argument of the respondent corporation that its business
vs. Trans- consists of manufacture and sale of electricity, as it uses bunker fuel as
Asia raw material for its power generation plant and converts the same fuel by
mechanical and chemical process to electricity.
The CTA dismissed the argument of the city of Makati that since Trans-
Asia is also engaged in repairing and maintaining power plants, then it
could also be considered as a contractor. But the CTAs factual findings
indicated that Trans-Asia actually owns the power plant from which the
electricity it sells is generated, and as the owner it also needs to manage,
operate, maintain and repair its own power plant.

In the city of Makatis revenue code, the local business taxes assessed on
manufacturers is 52.5 percent of 1 percent of the total gross receipts of
the business during the preceding taxable year.
As a result of the CTAs reclassification of Trans-Asia as a manufacturer,
the corporation is entitled to a refund of local business taxes it paid in
excess of 52.5 percent of 1 percent of the total gross receipts.
National NGC is not exempt from paying real property tax
Grid Corp
vs. CBAA Section 939 of RA 9511 provides that NGCP shall pay "a franchise tax
equivalent to three percent (3%) of all gross receipts derived by the
Grantee from its operation under this franchise." This franchise tax is "in
lieu of income tax and any and all taxes, duties, fees and charges of
any kind, nature or description levied, established or collected by any
authority whatsoever, local or national, on its franchise, rights,
privileges, receipts, revenues and profits, and on properties used in
connection with its franchise, from which taxes, duties and
charges, the Grantee is hereby expressly exempted."
 It is very clear that NGCP's payment of franchise tax exempts it from
payment of real property taxes on properties used in connection with its
franchise. However, NGCP's tax exempt status on real property due to the
"in lieu of all taxes" clause is qualified: NGCP shall be liable to pay the
same tax as other corporations on real estate, buildings and personal
property exclusive of their franchise. The phrase "exclusive of this
franchise" means! that real estate, buildings, and personal property used
in the exercise of the franchise are not subject to the same tax as other
corporations. !

The CBAA should determine whether the subject properties are properties
used in connection with NGCP's franchise. If the subject properties are
usbd in connection with NGCP's franchise, then NGCP is exempt from
paying real property taxes on the subject properties. If the subject
properties are not used in connection with NGCP's franchise, then the
assessment level should be based on actual use, 40 in accordance with
Section 218(a-c) of the Local Government Code.41chanroblesl
Coca- There is indeed double taxation if respondent is subjected to the taxes
Cola under both Sections 14 and 21 of the tax ordinance since these are being
Bottlers imposed: (1) on the same subject matter the privilege of doing
vs. City business in the City of Manila; (2) for the same purpose to make
of Manila persons conducting business within the City of Manila contribute to city
revenues; (3) by the same taxing authority petitioner City of Manila; (4)
within the same taxing jurisdiction within the territorial jurisdiction of
the City of Manila; (5) for the same taxing periods per calendar year;
and (6) of the same kind or character a local business tax imposed on
gross sales or receipts of the business.