COMMISSIONLR OI IN1LRNAL RLVLNUL, et al. v.

PRIML1OWN
PROPLR1Y GROUP, INC.
G.R. No. J62JSS, 28 August 2007, Corona, J. (Iirst Division)

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erioa.. e o.teriori aerogat riori.

Gilbert \ap, ice chair o Primetown Property Group, Inc. ,Primetown,, applied on
March 11, 1999 or the reund or credit o income tax Primetown paid in 199. It contends
that it is entitled to it because it suered losses that year due to the increase in the cost o
labor and materials, the diiculty in obtaining inancing or projects, and collecting
receiables. Notwithstanding this, Primetown still paid its quarterly corporate income tax
and remitted creditable withholding tax rom real estate sales to the BIR. 1hus, it claims
entitlement to a reund.

On May 13, 1999, reenue oicer Llizabeth \. Santos required Primetown to submit
additional documents to which the latter complied with. loweer, its claim was not acted
upon which prompted it to ile a petition or reiew in the Court o 1ax Appeals ,C1A, on
April 14, 2000.

C1A dismissed the petition as it was iled beyond the two-year prescriptie period
or iling a judicial claim or tax reund or tax credit in accordance with Section 229 o the
National Internal Reenue Code ,NIRC,. According to the C1A, the two-year prescriptie
period is equialent to 30 days pursuant to Article 13 o the Ciil Code wherein years are
o three hundred sixty-ie days each`. Since Primetown iled its inal adjusted return on
April 14, 1998 and that the year 2000 was a leap year, the petition was iled 31 days ater
Primetown iled its inal adjusted return, thereore beyond the reglementary period.

On appeal, the Court o Appeals reersed the decision o C1A. It ruled in aor o
Primetown saying that Article 13 o the Ciil Code did not distinguish between a regular year
and a leap year and thus it was iled on time.

1he Commissioner o Internal Reenue and Arturo Parcero appealed beore the
Supreme Court stating that tax reunds, being in the nature o an exemption, should be
strictly construed against claimants. lence, the claim should hae been iled on or beore
April 13, 2000 or within 30 days, reckoned rom the time it iled its inal adjusted return.

ISSUL:

\hether or not the petition was iled within the two-year period rom the date o
payment

HLLD:

Petition DLNILD.

Article 13 o the Ciil Code proides that when the law speaks o a year, it is
understood to be equialent to 365 days. loweer, LO 292 or the Administratie Code o
198, a subsequent law, was enacted. It proides in Section 31 that a year shall be
understood to be twele calendar months`. 1he Supreme Court deines a calendar month
as a month designated in the calendar without regard to the number o days it may
contain`.

Due to the inconsistency, the Court held that the Administratie Code o 198
impliedly repealed Article 13 o the Ciil Code as the proisions are irreconcilable. 1he
Court explained that a law may be repealed expressly or impliedly. Although there is a
repealing clause in the law, it cannot be said as express because there is no speciic
designation o the law to be repealed. 1hus, it is simply an implied repeal which are generally
not aored. 1he test now is whether the subsequent law encompasses entirely the subject
matter o the ormer law and they cannot be logically or reasonably reconciled. But as it was
ound out, both laws encompass the same subject matter, i.e., the computation o legal
periods which makes an implied repeal possible.

Therefore, applying Section 31, Chapter VIII, Book I of the Administrative Code
of 1987, Primetown's petition which was filed on April 14, 2000, was filed on the last day
of the 24
th
calendar month from the day Primetown filed its final adjusted return. Hence,
it was filed within the reglementary period.