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Pilipinas Shell Petrolium Corp v.


G.R. No. 172598; December 21, 2007

Facts: In 1988, BIR sent a collection letter to Petitioner Pilipinas Shell Petroleum Corporation (PSPC) for alleged
deficiency excise tax liabilities of PhP 1,705,028,008.06 for the taxable years 1992 and 1994 to 1997, inclusive
of delinquency surcharges and interest. As basis for the collection letter, the BIR alleged that PSPC is not a
qualified transferee of the TCCs it acquired from other BOI-registered companies. These alleged excise tax
deficiencies covered by the collection letter were already paid by PSPC with TCCs acquired through, and issued
and duly authorized by the Center, and duly covered by Tax Debit Memoranda (TDM) of both the Center and
BIR, with the latter also issuing the corresponding Accept Payment for Excise Taxes (APETs).

PSPC protested the collection letter, but it was denied. Because of respondent inaction on a motion for
reconsideration PSPC filed a petition for review before the CTA.

In 1999, the CTA ruled that the use by PSPC of the TCCs was legal and valid, and that respondents attempt to
collect alleged delinquent taxes and penalties from PSPC without an assessment constitutes denial of due
process. Respondent elevated CTA Decision to the Court of Appeals (CA) through a petition for review.

Despite the pendency of this case, PSPC received assessment letter from respondent for excise tax
deficiencies, surcharges, and interest based on the first batch of cancelled TCCs and TDM covering PSPCs use
of the TCCs. All these cancelled TDM and TCCs were also part of the subject matter of the now pending before
the CA.

PSPC protested the assessment letter, but the protest was denied by the BIR, constraining it to file another case
before the CTA. Subsequently, CTA ruled in favor of PSPC and accordingly cancelled and set aside the
assessment issued by the respondent. Respondent motion for reconsideration of the above decision which was
rejected thus respondent appealed the above decision before the CTA En Banc.

The CTA En Banc ruled in favor of respondent and ordered PSPC to pay the amount of P570,577,401.61 as
deficiency excise tax for the taxable years 1992 and 1994 to 1997, inclusive of 25% surcharge and 20% interest.

Issue: Whether or not petitioner is liable for the assessment of deficiency excise tax after the validly issued
TCCs were subsequently cancelled for having been issued fraudulently

Held: No. Petitioner is not liable for the assessment of deficiency excise tax.

In the instant case, with due application, approval, and acceptance of the payment by PSPC of the subject TCCs
for its then outstanding excise tax liabilities in 1992 and 1994 to 1997, the subject TCCs have been canceled as
the money value of the tax credits these represented have been used up. Therefore, the DOF through the
Center may not now cancel the subject TCCs as these have already been canceled and used up after their
acceptance as payment for PSPCs excise tax liabilities. What has been used up, debited, and canceled cannot
anymore be declared to be void, ineffective, and canceled anew.

Besides, it is indubitable that with the issuance of the corresponding TDM, not only is the TCC canceled when
fully utilized, but the payment is also final subject only to a post-audit on computational errors. Under RR 5-
2000, a TDM is a certification, duly issued by the Commissioner or his duly authorized representative, reduced in
a BIR Accountable Form in accordance with the prescribed formalities, acknowledging that the taxpayer named
therein has duly paid his internal revenue tax liability in the form of and through the use of a Tax Credit
Certificate, duly issued and existing in accordance with the provisions of these Regulations. The Tax Debit
Memo shall serve as the official receipt from the BIR evidencing a taxpayers payment or satisfaction of his tax
obligation. The amount shown therein shall be charged against and deducted from the credit balance of the
aforesaid Tax Credit Certificate.

Thus, with the due issuance of TDM by the Center and TDM by the BIR, the payments made by PSPC with the
use of the subject TCCs have been effected and consummated as the TDMs serve as the official receipts
evidencing PSPCs payment or satisfaction of its tax obligation. Moreover, the BIR not only issued the
corresponding TDM, but it also issued ATAPETs which doubly show the payment of the subject excise taxes of

Based on the above discussion, we hold that respondent erroneously and without factual and legal basis levied
the assessment. Consequently, the CTA En Banc erred in sustaining respondents assessment.

[G.R. No. 118043. July 23, 1998]

Petitioner, now the Jardine-CMG Life Insurance Company, Inc., is a domestic corporation engaged in the life
insurance business. It issued shares of stock as stock dividends and paid documentary stamp taxes on each
certificate on the basis of its par value. The CIR, held Lincoln liable based on the book value of the shares, and
consequently, should be used as basis for determining the amount of the documentary stamp tax. Accordingly,
the CIR issued a deficiency documentary stamp tax assessment. Lincoln appealed the Commissioners ruling to
the CTA, which held that the amount of the documentary stamp tax should be based on the par value stated on
each certificate of stock. In turn, CIR appealed to the Court of Appeals which, reversed the CTAs decision.
ISSUE: Whether in determining the amount to be paid as documentary stamp tax, it is the par value of the
certificates of stock or the book value of the shares which should be considered.

HELD: The par value of the certificates of stock should be the basis for determining the amount to be paid as
documentary stamp tax. First, the NIRC Sec. 224 provides that On every original issue, whether on
organization, reorganization or for any lawful purpose, of certificates of stock by any association, company or
corporation, there shall be collected a documentary stamp tax of one peso and ten centavos on each two
hundred pesos, or fractional part thereof, of the par value of such certificates
There is no basis for considering stock dividends as a distinct class from ordinary shares of stock since under
this provision only certificates of stock are required to be distinguished (into either one with par value or one
without) rather than the classes of shares themselves.
A stock certificate is merely evidence of a share of stock and not the share itself. (Sec. 63, Corporation Code).
Stock dividends are in the nature of shares of stock, the consideration for which is the amount of unrestricted
retained earnings converted into equity in the corporations books. There is, therefore, no reason for determining
the actual value of such dividends for purposes of the documentary stamp tax if the certificates representing
them indicate a par value.
Second. The documentary stamp tax here is not levied upon the specific transaction which gives rise to such
original issuance but on the privilege of issuing certificates of stock. A documentary stamp tax is in the nature of
an excise tax. It is not imposed upon the business transacted but is an excise upon the privilege, opportunity or
facility offered at exchanges for the transaction of the business.

Davao Gulf Lumber vs. CIR

GR No. 117359, July 23, 1998
293 SCRA 77

FACTS: Republic Act No. 1435 entitles miners and forest concessioners to the refund of 25% of the specific
taxes paid by the oil companies, which were eventually passed on to the user--the petitioner in this case--in the
purchase price of the oil products. Petitioner filed before respondent Commissioner of Internal Revenue (CIR) a
claim for refund in the amount representing 25% of the specific taxes actually paid on the above-mentioned fuels
and oils that were used by petitioner in its operations. However petitioner asserts that equity and justice
demands that the refund should be based on the increased rates of specific taxes which it actually paid, as
prescribed in Sections 153 and 156 of the NIRC. Public respondent, on the other hand, contends that it should
be based on specific taxes deemed paid under Sections 1 and 2 of RA 1435.
ISSUE: Should the petitioner be entitled under Republic Act No. 1435 to the refund of 25% of the amount of
specific taxes it actually paid on various refined and manufactured mineral oils and other oil products, and not on
the taxes deemed paid and passed on to them, as end-users, by the oil companies?

HELD: No. According to an eminent authority on taxation, "there is no tax exemption solely on the ground of
equity." Thus, the tax refund should be based on the taxes deemed paid. Because taxes are the lifeblood of the
nation, statutes that allow exemptions are construed strictly against the grantee and liberally in favor of the
government. Otherwise stated, any exemption from the payment of a tax must be clearly stated in the language
of the law; it cannot be merely implied therefrom.

CIR vs. Rosemarie Acosta

G.R. No. 154068 August 3, 2007

Quisombing, J.:


Acosta is an employee of Intel and was assigned in a foreign country. During that period Intel withheld
the taxes due and remitted them to BIR. Respondent claimed overpayment of taxes and filed petition for review
with CTA. CTA dismissed the petition for failure to file a written claim for refund with the CIR a condition
precedent to the filing of a petition for review with the CTA. CA reversed the decision reasoning that Acostas
filing of an amended return indicating an overpayment was sufficient compliance with the requirement of a
written claim.


Whether or not CTA has jurisdiction to take cognizance of respondents petition for review.


A party seeking an administrative rimedy must not merely initiate the prescribed administrative
procedure to obtain relie but also to pursue it to its appropriate conclusion before seeking judicial intervention in
order to give administrative agency an opportunity to decide the matter itself correctly and prevent unnecessary
and premature resort to court action. At the time respondent filed her amended return, the 1997, NIRC was not
yet in effect, hence respondent had no reason to think that the filing of an amended return would constitute the
written claim required by law.

CTA likewise stressed that even the date of filing of the Final Adjustment return was omitted,
inadvertently or otherwise, by respondent in her petition for review. This is fatal to respondents claim, for it
deprived the CTA of its jurisdiction over the subject matter of the case.

Finally, revenue statutes are substantive laws and in no sense must with that of remedial laws.
Revenue laws are not intended to be liberally constructed.

Southern Cross Cement vs PCMC, July 8, 2004

RATIONALE: A writ of attachment shall not issue to enjoin tax collection.


Petitioner Southern Cross Cement Corporation (Southern Cross) is a domestic corporation engaged in the
business of cement manufacturing, production and importation

On 22 May 2001, respondent Department of Trade and Industry (DTI) accepted an application from Philcemcor
(PCMC), alleging that the importation of gray Portland cement in increased quantities has caused declines in
domestic production, capacity utilization, market share, sales and employment; as well as caused depressed
local prices. Accordingly, Philcemcor sought the imposition at first of provisional, then later, definitive safeguard
measures on the import of cement pursuant to the SMA (Rep. Act No. 8800, also known as the Safeguard
Measures Act.
After preliminary investigation, the Bureau of Import Services of the DTI, determined that critical circumstances
existed justifying the imposition of provisional measures. the DTI then issued an Order, imposing a provisional
measure equivalent to Twenty Pesos and Sixty Centavos (P20.60) per forty (40) kilogram bag on all importations
of gray Portland cement for a period not exceeding two hundred (200) days from the date of issuance by the
Bureau of Customs (BOC) of the implementing Customs Memorandum Order. The corresponding Customs
Memorandum Order was issued on 10 December 2001, to take effect that same day and to remain in force for
two hundred (200) days

Due to DTIs imposition of the provisional measure, Southern Cross filed with the Court a Very Urgent
Application for a Temporary Restraining Order and/or A Writ of Preliminary Injunction (TRO Application),
seeking to enjoin the DTI Secretary from enforcing his decision.


Whether or not a writ of preliminary injunction enjoining the collection of taxes is proper?


The court cannot grant a writ of preliminary injunction enjoining the collection of taxes, a preemptory judicial act
which is frowned upon, unless there is a statutory basis for it. In that regard, Section 218 of the Tax Reform Act
of 1997 prohibits any court from granting an injunction to restrain the collection of any national internal revenue
tax, fee or charge imposed by the internal revenue code. Therefore, a writ of attachment shall not issue to enjoin
tax collection.

Facts: Commonwealth Act No. 567, otherwise known as Sugar Adjustment Act was promulgated in 1940 to
stabilize the sugar industry so as to prepare it for the eventuality of the loss of its preferential position in the
United States market and the impositionof export taxes. Plaintiff, Walter Lutz, in his capacity as Judicial
Administrator of the Intestate Estate of Antonio Jayme Ledesma, seeks to recover from the Collector of Internal
Revenue the sum of P14,666.40 paid by the estate as taxes, under Sec.3 of the Act, alleging that such tax is
unconstitutional and void, being levied for the aid and support of the sugar industry exclusively, which in
plaintiffs opinion is not a public purpose for which a tax may be constitutionally levied. The action has
been dismissed by the Court of First Instance.

Issue: Whether or not the tax imposed is constitutional.

Held: Yes. The act is primarily an exercise of the police power. It is shown in the Act that the tax is levied with a
regulatory purpose, to provide means for the rehabilitation and stabilization of the threatened sugar industry.

It is inherent in the power to tax that a state be free to select the subjects of taxation, and it has been repeatedly
held that inequalities which result from a singling out of one particular class for taxation or exemption infringe no
constitutional limitation.

The funds raised under the Act should be exclusively spent in aid of the sugar industry, since it is that
very enterprise that is being protected. It may be that other industries are also in need of similar protection; but
the legislature is not required by the Constitution to adhere to a policy of all or none.

Republic of the Philippines v Bacolod-Murcia (1966)

Republic of the Philippines v Bacolod-Murcia GR No. L-19824, L-19825, L-19826

July 9, 1966
RA 632 created the Philippine Sugar Institute, a semi-public corporation. In 1951, the Institute acquired the
Insular Sugar Refinery for P3.07 million payable in installments from the proceeds of the Sugar tax to be
collected under RA 632. The operation of the refinery for 1954 to 1957 was disastrous as the Institute suffered
tremendous losses. Contending that the purchase of refinery with money from the Institutes fund was not
authorized under RA 632, and that the continued operation of the refinery is inimical to their interest, Bacolod-
Murcia Milling Co., Ma-ao Sugar Central, Talisay-Silay Milling Co. and the Central Azucarera del Danao refused
to continue with their contribution to said fund. The trial court found them liable under RA 632. Hence, this

Are the milling companies liable?

Yes. The special assessment or levy for the Philippine Sugar Institute Fund is not so much an exercise of the
power of
taxation, nor the imposition of a special assessment, but the exercise of police power for the general welfare of
the entire country. It is, therefore, an exercise of a sovereign power which no private citizen may lawfully resist.
Section 2a of the charter authorizes Philsugin to acquire the refinery in question. The financial loss resulting from
the operation thereof is no means an index that the industry did profit therefrom, as other gains of a different
nature (such as experience) may have been realized.


Respondent. G.R. No. 181371, March 02, 2011


On April 13, 2005, petitioner filed with respondent Commissioner of Internal Revenue (CIR) a request for the
issuance of a tax credit certificate in the amount of P32,170,409, representing the 20% sales discounts allegedly
granted to senior citizens for the year 2002.

On April 14, 2005, petitioner filed with the Court of Tax Appeals (CTA) a Petition for Review.

On July 23, 2007, the First Division of the CTA rendered a Decision denying petitioner's claim for insufficiency of

Aggrieved, petitioner moved for reconsideration but the First Division of the CTA denied the same in a
Resolution dated September 12, 2007.

On October 3, 2007, petitioner filed a Motion for Extension of Time to File Petition for Review on Certiorari with
the CTA En Banc.

On October 19, 2007, petitioner filed with the CTA En Banc a Petition for Review, docketed as CTA En Banc
Case No. 316.

On December 4, 2007, the CTA En Banc resolved to deny due course, and accordingly, dismissed the Petition
for Review.

This prompted petitioner to file before us a Petition for Review on Certiorari under Rule 45 of the Rules of Court
to set aside the Resolutions dated December 4, 2007 and January 17, 2008 of the CTA En Banc.

In response, comments were filed by the respondent and the Office of the Solicitor General (OSG), as counsel
for respondent.

However, instead of filing a reply to the comments, petitioner filed a Motion to Withdraw, praying that the case be
dismissed without prejudice. According to petitioner, the amount of tax credit being claimed for 2002 would just
be included in its future claims for issuance of a tax credit certificate since the said amount was carried over to
its 2003 Income Tax Return (ITR).

The OSG does not oppose the Motion to Withdraw. However, citing Section 2, Rule 17 of the Rules of Court, the
OSG argues that the withdrawal of the instant case is no longer a matter of right on the part of petitioner, but is
discretionary upon the Court. The OSG also calls attention to the failure of Mr. Jacinto J. Conception, the person
who signed the Verification and Certification of Non-forum Shopping, to exhibit before the notary public a valid
Identification Card. The OSG insists that such failure renders the instant Petition defective. Thus, it should be
dismissed with prejudice.

ISSUE: Whether the dismissal should be with prejudice against petitioner.


YES. Section 1, Rule 13 of the Internal Rules of the Supreme Court provides that "[a] case shall be deemed
submitted for decision or resolution upon the filing of the last pleading, brief, or memorandum that the Court or
its Rules require." In the instant case, records show that on August 19, 2009, we resolved to require petitioner to
file a reply. Instead of complying, petitioner opted to file a motion to withdraw. Clearly, by requiring petitioner to
file its Reply, the Court has not yet deemed the case submitted for decision or resolution. Thus, we resolve to
grant petitioner's Motion to Withdraw.

However, we agree with the OSG that the dismissal of the instant case should be with prejudice. By withdrawing
the appeal, petitioner is deemed to have accepted the decision of the CTA. And since the CTA had already
denied petitioner's request for the issuance of a tax credit certificate in the amount of P32,170,409 for
insufficiency of evidence, it may no longer be included in petitioner's future claims. Petitioner cannot be allowed
to circumvent the denial of its request for a tax credit by abandoning its appeal and filing a new claim. To
reiterate, "an appellant who withdraws his appeal x x x must face the consequence of his withdrawal, such as
the decision of the court a quo becoming final and executory."