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CIR vs. Cebu Portland GRN L-29059 December 15, 19 ! J.

Cruz "acts# $%e CIR &as ordered to re'und to t%e Cebu Portland Cement Com(an) t%e amount o' P*59,+0 .9 , re(resent,n- over(a)ments o' ad valorem on cement (roduced and sold b) ,t a'ter /ctober 195!. "ollo&,n- den,al o' mot,ons 'or recons,derat,on ',led b) bot% t%e (et,t,oner and t%e (r,vate res(ondent, t%e latter moved 'or a &r,t o' e.ecut,on to en'orce t%e sa,d 0ud-ment. $%e mot,on &as o((osed b) t%e (et,t,oner on t%e -round t%at t%e (r,vate res(ondent %ad an outstand,n- sales ta. l,ab,l,t) to &%,c% t%e 0ud-ment debt %ad alread) been cred,ted. $%e C$1 -ranted t%e mot,on, %old,n- t%at t%e alle-ed sales ta. l,ab,l,t) o' t%e (r,vate res(ondent &as st,ll be,n- 2uest,oned and t%ere'ore could not be set-o'' a-a,nst t%e re'und. /n rev,e&, t%e CIR cla,ms t%at t%e re'und s%ould be c%ar-ed a-a,nst t%e ta. de',c,enc) o' t%e (r,vate res(ondent on t%e sales o' cement under 3ect,on 1 4 o' t%e $a. Code. 5,s (os,t,on ,s t%at cement ,s a manu'actured and not a m,neral (roduct and t%ere'ore not e.em(t 'rom sales 5e adds t%at en'orcement o' t%e sa,d ta. de',c,enc) &as (ro(erl) e''ected t%rou-% %,s (o&er o' d,stra,nt o' (ersonal (ro(ert) under 3ect,ons *14 and *1 o' t%e sa,d Code and, moreover, t%e collect,on o' an) nat,onal ,nternal revenue ta. ma) not be en0o,ned under 3ect,on *05, sub0ect onl) to t%e e.ce(t,on (rescr,bed ,n Re(. 1ct No. 1125. $%e (et,t,oner also den,es t%at t%e sales ta. assessments %ave alread) (rescr,bed because t%e (rescr,(t,ve (er,od s%ould be counted 'rom t%e ',l,n- o' t%e sales ta. returns, &%,c% %ad not )et been done b) t%e (r,vate res(ondent. "or ,ts (art, t%e (r,vate res(ondent d,scla,ms l,ab,l,t) 'or t%e sales, on t%e -round t%at cement ,s not a manu'actured (roduct but a m,neral (roduct. 1s suc%, ,t &as e.em(ted 'rom sales 1lso, t%e alle-ed sales ta. de',c,enc) could not as )et be en'orced a-a,nst ,t because t%e ta. assessment &as not )et ',nal, t%e same be,n- st,ll under (rotest and st,ll to be de',n,tel) resolved on t%e mer,ts. 6es,des, t%e assessment %ad alread) (rescr,bed, not %av,n- been made &,t%,n t%e re-lementar) ',ve-)ear (er,od 'rom t%e ',l,n- o' t%e ta. returns. Issues# 718 9%et%er cement be cons,dered a manu'actured (roduct so as to ,m(ose sales ta. u(on t%e cement com(an): 728 &%et%er t%e ',l,n- o' an ,ncome ta. return be cons,dered as substant,al com(l,ance &,t% t%e re2u,rement o' ',l,n- sales ta. returns so as to bar t%e (rescr,(t,ve (er,od: and, 7*8 &%et%er t%e assessment be en'orced &%,le st,ll be,n- contested. Rul,n-# 718 3ales ta. &as (ro(erl) ,m(osed u(on t%e cement com(an) 'or t%e reason t%at cement %as al&a)s been cons,dered a manu'actured (roduct and not a m,neral (roduct. 7Comm,ss,oner o' Internal Revenue v. Re(ubl,c Cement Cor(orat,on8. Cement ,s t%e (roduct o' a manu'actur,n- (rocess and ,s no lon-er t%e ;m,neral (roduct; contem(lated ,n t%e $a. Code 7,.e.: m,nerals sub0ected to s,m(le treatments8 'or t%e (ur(ose o' ,m(os,n- t%e ad valorem ta..

728 $%e cla,m o' t%e (r,vate res(ondent t%at t%e ',ve-)ear re-lementar) (er,od 'or t%e assessment o' ,ts ta. l,ab,l,t) started 'rom t%e t,me ,t ',led ,ts -ross sales returns on <une *0, 1942 must 'a,l. 9%at t%e com(an) ',led &as not t%e sales returns re2u,red ,n 3ect,on 1 *7n8 but t%e ad valorem ta. returns re2u,red under 3ect,on 2+5 o' t%e $a. Code. In order to ava,l ,tsel' o' t%e bene',ts o' t%e ',ve-)ear (rescr,(t,on (er,od under 3ect,on **1 o' t%e $a. Code, t%e ta.(a)er s%ould %ave ',led t%e re2u,red return 'or t%e ta. ,nvolved, t%at ,s, a sales ta. return. 76utuan 3a&m,ll, Inc. v. C$1, et al., G.R. No. L21514, 1(r,l 29, 1944, 14 3CR1 2!!8. $%e ',l,n- o' an ,ncome ta. return cannot be cons,dered as substant,al com(l,ance &,t% t%e re2u,rement o' ',l,n- sales ta. returns, ,n t%e same &a) t%at an ,ncome ta. return cannot be cons,dered as a return 'or com(ensat,n- ta. 'or t%e (ur(ose o' com(ut,n- t%e (er,od o' (rescr,(t,on under 3ec. **1. 7C,t,n- 6,sa)a Land $rans(ortat,on Co., Inc. v. Collector o' Internal Revenue, G.R. Nos. L-12100 and L-11 12, =a) 29, 19598. 7*8 $%e ar-ument t%at t%e assessment cannot as )et be en'orced because ,t ,s st,ll be,n- contested loses s,-%t o' t%e ur-enc) o' t%e need to collect as >t%e l,'eblood o' t%e -overnment.> I' t%e (a)ment o' could be (ost(oned b) s,m(l) 2uest,on,nt%e,r val,d,t), t%e mac%,ner) o' t%e state &ould -r,nd to a %alt and all -overnment 'unct,ons &ould be (aral)?ed. No court s%all %ave aut%or,t) to -rant an ,n0unct,on to restra,n t%e collect,on o' an) nat,onal ,nternal revenue ta., 'ee or c%ar-e ,m(osed b) t%e $a. Code. 73ect,on 291, $a. Code8. Pet,t,on -ranted, Resolut,on set as,de.

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