Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 127624 November 18, 2003
BPI LESING CORPORTION, petitioner,
vs.
T!E !ONORBLE COURT O" PPELS, COURT O" T# PPEL N$
COMMISSIONER O" INTERNL RE%ENUE, respondents.
&CUN, J.'
The present petition for revie on certiorari assails the decision
!
of the "ourt of #ppeals in "#$
%.R. SP No. &'((& and its subse)uent resolution
(
den*in+ the ,otion for reconsideration. The
assailed decision and resolution affir,ed the decision of the "ourt of Ta- #ppeals ."T#/ hich
denied petitioner 0PI 1easin+ "orporation2s .01"/ clai, for ta- refund in "T# "ase No. 3(4(.
The facts are not disputed.
01" is a corporation en+a+ed in the business of leasin+ properties.
&
For the calendar *ear !5'6,
01" paid the "o,,issioner of Internal Revenue ."IR/ a total of P!,!&5,73!.35 representin+ 38
9contractor2s percenta+e ta-9 then i,posed b* Section (74 of the National Internal Revenue
"ode .NIR"/, based on its +ross rentals fro, e)uip,ent leasin+ for the said *ear a,ountin+ to
P(:,:'&,:(4.3(.
3
On Nove,ber !7, !5'6, the "IR issued Revenue Re+ulation !5$'6. Section 6.( thereof provided
that finance and leasin+ co,panies re+istered under Republic #ct 45'7 shall be sub;ect to +ross
receipt ta- of 48$&8$!8 on actual inco,e earned. This ,eans that co,panies re+istered under
Republic #ct 45'7, such as 01", are not liable for 9contractor2s percenta+e ta-9 under Section
(74 but are, instead, sub;ect to 9+ross receipts ta-9 under Section (67 .no Section !((/ of the
NIR". Since 01" had earlier paid the afore,entioned 9contractor2s percenta+e ta-,9 it re$
co,puted its ta- liabilities under the 9+ross receipts ta-9 and arrived at the a,ount of
P&6!,5(3.33.
On #pril !!, !5'', 01" filed a clai, for a refund ith the "IR for the a,ount of P:::,!!:.74,
representin+ the difference beteen the P!,!&5,73!.35 it had paid as 9contractor2s percenta+e
ta-9 and P&6!,5(3.33 it should have paid for 9+ross receipts ta-.9
4
Four da*s later, to stop the
runnin+ of the prescriptive period for refunds, petitioner filed a petition for revie ith the
"T#.
6
In a decision dated Ma* !&, !553,
:
the "T# dis,issed the petition and denied 01"2s clai, of
refund. The "T# held that Revenue Re+ulation !5$'6, as a,ended, ,a* onl* be applied
prospectivel* such that it onl* covers all leases ritten on or after <anuar* !, !5':, as stated
under Section : of said revenue re+ulation=
Se()*o+ 7. E,,e()*v*)- > These re+ulations shall ta?e effect on <anuar* !, !5': and shall
be applicable to all leases ritten on or after the said date.
The "T# ruled that, since 01"2s rental inco,e as all received prior to !5'6, it follos that this
as derived fro, lease transactions prior to <anuar* !, !5':, and hence, not covered b* the
revenue re+ulation.
# ,otion for reconsideration of the "T#2s decision as filed, but as denied in a resolution
dated <ul* (6, !554.
'
01" then appealed the case to the "ourt of #ppeals, hich issued the
afore,entioned assailed decision and resolution.
5
@ence, the present petition.
In see?in+ to reverse the denial of its clai, for ta- refund, 01" sub,its that the "ourt of
#ppeals and the "T# erred in not rulin+ that Revenue Re+ulation !5$'6 ,a* be applied
retroactivel* so as to allo 01"2s clai, for a refund of P:::,!!:.74.
Respondents, on the other hand, ,aintain that the provision on the date of effectivit* of Revenue
Re+ulation !5$'6 is clear and une)uivocal, leavin+ no roo, for interpretation on its prospective
application. In addition, respondents ar+ue that the petition should be dis,issed on the +round
that the VerificationA"ertification of Non$Foru, Shoppin+ as si+ned b* the counsel of record
and not b* 01", throu+h a dul* authoriBed representative, in violation of Supre,e "ourt
"ircular ('$5!.
In a resolution dated March (5, (777,
!7
the petition as +iven due course and the "ourt re)uired
the parties to file their respective Me,oranda. Cpon sub,ission of the Me,oranda, the issues in
this case ere delineated, as follos=
!!
D@ET@ER T@E INST#NT PETITION FOR REVIED ON "ERTIOR#RI
SC0ST#NTI#11F "OMP1IES DIT@ SCPREME "OCRT "IR"C1#R ('$5!.
D@ET@ER REVENCE RE%C1#TION !5$'6, #S #MENDED, IS 1E%IS1#TIVE OR
INTERPRET#TIVE IN N#TCRE.
D@ET@ER REVENCE RE%C1#TION !5$'6, #S #MENDED, IS PROSPE"TIVE
OR RETRO#"TIVE IN ITS #PP1I"#TION.
D@ET@ER PETITIONER, #S FOCND 0F T@E "OCRT OF #PPE#1S, F#I1ED TO
MEET T@E GC#NTCM OF EVIDEN"E REGCIRED IN REFCND "#SES.
D@ET@ER PETITIONER, #S FOCND 0F T@E "OCRT OF #PPE#1S, IS
ESTOPPED FROM "1#IMIN% ITS PRESENT REFCND.
#s to the first issue, the "ourt a+rees ith respondents2 contention that the petition should be
dis,issed outri+ht for failure to co,pl* ith Supre,e "ourt "ircular ('$5!, no incorporated as
Section ( of Rule 3( of the Rules of "ourt. The records plainl* sho, and this has not been
denied b* 01", that the certification as e-ecuted b* counsel ho has not been shon to have
specific authorit* to si+n the sa,e for 01".
In BA Savings Bank v. Sia,
!(
it as held that the certificate of non$foru, shoppin+ ,a* be
si+ned, for and on behalf of a corporation, b* a specificall* authoriBed la*er ho has personal
?noled+e of the facts re)uired to be disclosed in such docu,ent. This rulin+, hoever, does not
,ean that an* la*er, actin+ on behalf of the corporation he is representin+, ,a* routinel* si+n a
certification of non$foru, shoppin+. The "ourt e,phasiBes that the la*er ,ust be 9specificall*
authoriBed9 in order validl* to si+n the certification.
"orporations have no poers e-cept those e-pressl* conferred upon the, b* the "orporation
"ode and those that are i,plied b* or are incidental to its e-istence. These poers are e-ercised
throu+h their board of directors andAor dul* authoriBed officers and a+ents. @ence, ph*sical acts,
li?e the si+nin+ of docu,ents, can be perfor,ed onl* b* natural persons dul* authoriBed for the
purpose b* corporate b*las or b* specific act of the board of directors.
!&
The records are bereft of the authorit* of 01"2s counsel to institute the present petition and to
si+n the certification of non$foru, shoppin+. Dhile said counsel ,a* be the counsel of record
for 01", the representation does not vest upon hi, the authorit* to e-ecute the certification on
behalf of his client. There ,ust be a resolution issued b* the board of directors that specificall*
authoriBes hi, to institute the petition and e-ecute the certification, for it is onl* then that his
actions can be le+all* bindin+ upon 01".
01" hoever insists that there as substantial co,pliance ith S" "ircular No. ('$5! because
the verificationAcertification as issued b* a counsel ho had full personal ?noled+e that no
other petition or action has been filed or is pendin+ before an* other tribunal. #ccordin+ to 01",
said counsel2s la fir, has handled this case fro, the ver* be+innin+ and could ver* ell attest
andAor certif* to the absence of an instituted or pendin+ case involvin+ the sa,e or si,ilar issues.
The ar+u,ent of substantial co,pliance deserves no ,erit, +iven the "ourt2s rulin+ in
Mendigorin v. Cabantog=
!3

HThe "# held that there as substantial co,pliance ith the Rules of "ourt, citin+
Di,a+iba vs. Montalvo, <r. I(7( S"R# 63!J to the effect that a la*er ho assu,es
responsibilit* for a clientKs cause has the dut* to ?no the entire histor* of the case,
especiall* if an* liti+ation is co,,enced. This vie, hoever, no lon+er holds
authoritative value in the li+ht of Di+ital Microave "orporation vs. "# I&(' S"R#
('6J, here it as held that the reason the certification a+ainst foru, shoppin+ is
re)uired to be acco,plished b* petitioner hi,self is that onl* the petitioner hi,self has
actual ?noled+e of hether or not he has initiated si,ilar actions or proceedin+s in
other courts or tribunals. Even counsel of record ,a* be unaare of such fact. To our
,ind, this vie is ,ore in accord ith the intent and purpose of Revised "ircular No. ('$
5!.
"learl*, therefore, the present petition lac?s the proper certification as strictl* re)uired b*
;urisprudence and the Rules of "ourt.
Even if the "ourt ere to i+nore the aforesaid procedural infir,it*, a perusal of the ar+u,ents
raised in the petition indicates that a resolution on the ,erits ould nevertheless *ield the sa,e
outco,e.
01" atte,pts to convince the "ourt that Revenue Re+ulation !5$'6 is le+islative rather than
interpretative in character and hence, should retroact to the date of effectivit* of the la it see?s
to interpret.
#d,inistrative issuances ,a* be distin+uished accordin+ to their nature and substance=
le+islative and interpretative. # le+islative rule is in the ,atter of subordinate le+islation,
desi+ned to i,ple,ent a pri,ar* le+islation b* providin+ the details thereof. #n interpretative
rule, on the other hand, is desi+ned to provide +uidelines to the la hich the ad,inistrative
a+enc* is in char+e of enforcin+.
!4

The "ourt finds the )uestioned revenue re+ulation to be le+islative in nature. Section ! of
Revenue Re+ulation !5$'6 plainl* states that it as pro,ul+ated pursuant to Section (:: of the
NIR". Section (:: .no Section (33/ is an e-press +rant of authorit* to the Secretar* of Finance
to pro,ul+ate all needful rules and re+ulations for the effective enforce,ent of the provisions of
the NIR". In Paper Industries Corporation of the Philippines v. Court of Appeals,
!6
the "ourt
reco+niBed that the application of Section (:: calls for none other than the e-ercise of )uasi$
le+islative or rule$,a?in+ authorit*. Veril*, it cannot be disputed that Revenue Re+ulation !5$'6
as issued pursuant to the rule$,a?in+ poer of the Secretar* of Finance, thus ,a?in+ it
le+islative, and not interpretative as alle+ed b* 01".
01" further posits that, assu,in+ the revenue re+ulation is le+islative in nature, it is invalid for
ant of due process as no prior notice, publication and public hearin+ attended the issuance
thereof. To support its vie, 01" cited "IR v. Fortune Tobacco, et al.,
!:
herein the "ourt
nullified a revenue ,e,orandu, circular hich reclassified certain ci+arettes and sub;ected
the, to a hi+her ta- rate, holdin+ it invalid for lac? of notice, publication and public hearin+.
The doctrine enunciated in Fortune Tobacco, and reiterated in CIR v. Michel . !huillier
Pa"nshop, Inc.,
!'
is that hen an ad,inistrative rule .oe/ be-o+0 ,erel* providin+ for the
,eans that can facilitate or render less cu,berso,e the i,ple,entation of the la and
/1b/)2+)*233- *+(re2/e/ )4e b1r0e+ o, )4o/e .over+e0, it behooves the a+enc* to accord at least
to those directl* affected a chance to be heard and, thereafter, to be dul* infor,ed, before the
issuance is +iven the force and effect of la. In !huillier and Fortune Tobacco, the "ourt
invalidated the revenue ,e,oranda concerned because the sa,e increased the ta- liabilities of
the affected ta-pa*ers ithout affordin+ the, due process. In this case, Revenue Re+ulation !5$
'6 ould be beneficial to the ta-pa*ers as the* are sub;ected to lesser ta-es. Petitioner, in fact, is
invo?in+ Revenue Re+ulation !5$'6 as the ver* basis of its clai, for refund. If it ere invalid,
then petitioner all the ,ore has no ri+ht to a refund.
#fter upholdin+ the validit* of Revenue Re+ulation !5$'6, the "ourt no resolves hether its
application should be prospective or retroactive.
The principle is ell entrenched that statutes, includin+ ad,inistrative rules and re+ulations,
operate prospectivel* onl*, unless the le+islative intent to the contrar* is ,anifest b* e-press
ter,s or b* necessar* i,plication.
!5
In the present case, there is no indication that the revenue
re+ulation ,a* operate retroactivel*. Further,ore, there is an e-press provision statin+ that it
9shall ta?e effect on <anuar* !, !5':,9 and that it 9shall be applicable to all leases ritten on or
after the said date.9 0ein+ clear on its prospective application, it ,ust be +iven its literal ,eanin+
and applied ithout further interpretation.
(7
Thus, 01" is not in a position to invo?e the
provisions of Revenue Re+ulation !5$'6 for lease rentals it received prior to <anuar* !, !5':.
It is also apt to add that ta- refunds are in the nature of ta- e-e,ptions. #s such, these are
re+arded as in dero+ation of soverei+n authorit* and are to be strictl* construed a+ainst the
person or entit* clai,in+ the e-e,ption. The burden of proof is upon hi, ho clai,s the
e-e,ption and he ,ust be able to ;ustif* his clai, b* the clearest +rant under "onstitutional or
statutor* la, and he cannot be per,itted to rel* upon va+ue i,plications.
(!
Nothin+ that 01"
has raised ;ustifies a ta- refund.
It is not necessar* to rule on the re,ainin+ issues.
5!ERE"ORE, the petition for revie is hereb* $ENIE$, and the assailed decision and
resolution of the "ourt of #ppeals are ""IRME$. No pronounce,ent as to costs.
SO OR$ERE$.
#avide$ r.$ C..$ Panganiban$ %nares&Santiago$ and Carpio$ .$ concur.