ABS-CBN vs. CTA G.R. No.

L-52307

Retroactive Effect of Tax Statues

Republic of the Philippines

Supreme Court Ruling

G.R. No. L-52307 October 12, 1981

ABS-CBN Broadcasting Corporation, Petitioner

vs.

Court of Tax Appeals and the Commissioner of Internal revenue, Respondent

FACTS:

The ABS-CBN Broadcasting Corporation (herein shall be called the “Company”) was engaged in the
business of telecasting local as well as foreign films acquired from foreign corporations not engaged
in trade or business with the Philippines. Under Section 24 (b) of the National Revenue Code, a
withholding tax of 30% (RA 2343). It was implemented through Circular No. V-334. Pursuant to the
foregoing, ABS-CBN dutifully withheld and turned over to the BIR the amount of 30% of one-half of
the film rentals paid by it to foreign corporations not engaged in trade or business within the
Philippines. The last year that ABS-CBN withheld taxes pursuant to the foregoing Circular was in
1968.

RA 5431 amended Section 24 (b) of the Tax Code increasing the tax rate from 30 % to 35 % and
revising the tax basis from “such amount” referring to rents, etc. to “gross income.” The following
was implemented by Circular No. 4-71.

Petitioner requested for a reconsideration and withdrawal of the assessment.

ISSUE/S:

Whether or not respondent can apply General Circular No. 4-71 retroactively and issue a deficiency
assessment against petitioner.

HELD/DECISION:

Any rulings or circulars promulgated by the CIR have no retroactive application when it would be
prejudicial to taxpayers. The retroactive application of Memorandum Circular No. 4-71 prejudices
ABS-CBN since:
1. The assessment and demand on petitioner to pay deficiency withholding income tax was also
made three years after 1968 for a period of time commencing in 1965.

2. ABS-CBN was no longer in a position to withhold taxes due from foreign corporations because it
had already remitted all film rentals and no longer had any control over them when the new
Circular was issued.

G.R. No. L-17624 June 30, 1962

AQUILINA LARGADO, petitioner-appellee,

vs.
JUDGE LUPO A. MASAGANDA, ETC., ET AL., respondents,
ANGELO DE LOS REYES, respondent-appellant.

Meliton A. Angeles for petitioner-appellee.

Ernesto V. Isaac for respondent-appellant.

BAUTISTA ANGELO, J.:

On January 7, 1960, Angelo de los Reyes filed a petition before the Justice of the Peace court of
Unisan, Quezon, praying that he be appointed guardian of the persons and properties of certain
minors.

The petition was given due course and was set for hearing on January 27, 1960. Aquilina Largado,
mother of the minors, because of the failure of her counsel to appear, was declared in default. Two
hours later, the counsel appeared and moved for the reconsideration of the order default, but the
same was denied. Thereupon, the justice of the peace court issued an order appointing Angelo de
los Reyes guardian as prayed for.

On February 17, 1960, Aquilina Largado filed a petition dismiss on the ground that said justice of
the peace court has no jurisdiction to appoint a guardian under Republic Act No. 2613, which was
enacted on August 1, 1959. This motion was also denied.

On February 17, 1960, Aquilina Largado filed a petition for certiorari with preliminary injunction
before the Court of First Instance of Quezon praying for the nullification of the orders entered by
the Justice of the Peace Court of Unisan as above specified on the ground of lack of jurisdiction
reiterating the same reasons already advanced in her motion to dismiss. And acting on it, the
court a quo granted ex parte the writ prayed for. In the meantime, respondents gave their answer
justifying the appointment Trade by the Justice of the Peace Court of Unisan, and after issues were
joined, the court a quo rendered decision holding that the Justice of the Peace Court of Unisan has
no jurisdiction to appoint a guardian because the same is prohibited by Republic Act No. 2613.

In due time, petitioner took the present appeal.1äwphï1.ñët

The issue posed before us is whether a justice of the peace court has jurisdiction to appoint a
guardian at the time the present petition was filed before the Justice of the Peace Court of Unisan.1
The court a quo answered the question in the negative relying on Section 10 of Republic Act No.
2613, which was enacted on August 1, 1959. Indeed, said section, which amends Section 88 of
Republic Act No. 296, known as the Judiciary Act of 1948, provides that the jurisdiction of the
justice of the peace courts shall not extend, among others, to the appointment of guardians even if
the Secretary of Justice has ruled otherwise in an opinion rendered in 1959. In this respect, we
agree with the court a quo, since the provisions of said Act are clear.

The contention that the insertion of the term "guardian" in said Section 10 was only due to an
oversight as opined by the Secretary of Justice may have some basis, considering the intent of
Congress in approving Republic Act 2613; nevertheless, we are of the opinion that the mistake
cannot be corrected by executive fiat, but by legislation. This is what Congress in effect did when on
June 17, 1961 it approved Republic Act No. 3090 rectifying the mistake committed (Section 5).
However, since said Act does not contain any saving clause, its provisions cannot be given
retroactive effect.

The foregoing discussion makes it unnecessary to dwell on the background of the law relative to the
jurisdiction of justice of the peace courts on matters pertaining to the appointment of guardians.

WHEREFORE, the decision appealed from is affirmed, with costs.

GR No. L-30061 (February 27, 1974)

People vs. Jabinal

FACTS:

Jabinal was found guilty of the crime of Illegal Possession of Firearm and Ammunition.

The accused admitted that on September 5, 1964, he was in possession of the revolver and the
ammunition described in the complaint, without the requisite license or permit. He, however,
claimed to be entitled to exoneration because, although he had no license or permit, he had an
appointment as Secret Agent from the Provincial Governor of Batangas and an appointment as
Confidential Agent from the PC Provincial Commander, and the said appointments expressly
carried with them the authority to possess and carry the firearm in question.

The accused contended before the court a quo that in view of his above-mentioned appointments as
Secret Agent and Confidential Agent, with authority to possess the firearm subject matter of the
prosecution, he was entitled to acquittal on the basis of the Supreme Court’s decision in People vs.
Macarandang(1959) and People vs. Lucero(1958) and not on the basis of the latest reversal and
abandonment in People vs. Mapa (1967).

ISSUE:

Whether or not appellant should be acquitted on the basis of the court’s rulings in Macarandang
and Lucero, or should his conviction stand in view of the complete reversal of the Macarandang and
Lucero doctrine in Mapa.
RULING:

Decisions of this Court, under Article 8 of the New Civil Code states that “Judicial decisions applying
or interpreting the laws or the Constitution shall form a part of the legal system … .” The settled rule
supported by numerous authorities is a restatement of legal maxim “legis interpretatio legis vim
obtinet” — the interpretation placed upon the written law by a competent court has the force of
law.

Appellant was appointed as Secret Agent and Confidential Agent and authorized to possess a
firearm pursuant to the prevailing doctrine enunciated in Macarandang and Lucero under which no
criminal liability would attach to his possession of said firearm in spite of the absence of a license
and permit therefor, appellant must be absolved. Certainly, appellant may not be punished for an
act which at the time it was done was held not to be punishable.

The appellant was acquitted.