1/12/2020 G.R. No.

112745
Toda is S nda , Jan ar 12, 2020

C S E I J I O I J I L R AUSL E
S preme Co rt
Co rt of Appeals

Rep blic of theCo

Philippines
rt of Ta Appeals
SUPREMESandiganba
COURT an
Manila
Regional Trial Co rt

EN BANC
Metropolitan Trial Co rt
M nicipal Trial Co rt
M nicipal Circ it Trial Co rt
G.R. N . 112745 O 16, 1997 M nicipal Trial Co rt

AQUILINO T. LARIN, petitioner,

s.
THE EXECUTIVE SECRETAR , SECRETAR OF FINANCE, COMMISSIONER OF THE BUREAU OF INTERNAL
REVENUE AND THE COMMITTEE CREATED TO INVESTIGATE THE ADMINISTRATIVE COMPLAINT AGAINST
AQUILINO T. LARIN, COMPOSED OF FRUMENCIO A. LAGUSTAN, JOSE B. ALEJANDRINO AND JAIME M.
MA A, respondents.

TORRES, JR., .:

Challenged in this petition is the alidit of petitioner's remo al from ser ice as Assistant Commissioner of the
E cise Ta Ser ice of the B rea of Internal Re en e. Incidentall , he q estions Memorand m Order No. 164
iss ed b the Office of the President, hich pro ides for the creation of "A Committee to In estigate the
Administrati e Complaint Against Aq ilino T. Larin, Assistant Commissioner, B rea of Internal Re en e" as ell as
the in estigation made in p rs ance thereto, and Administrati e Order No. 101 dated December 2, 1993 hich
fo nd him g ilt of gra e miscond ct in the administrati e charge and imposed pon him the penalt of dismissal
from office.

Like ise, petitioner seeks to assail the legalit of E ec ti e Order No. 132, iss ed b President Ramos on October
26, 1993, hich pro ides for the "Streamlining of the B rea of Internal Re en e," and of its implementing r les
iss ed b the B rea of Internal Re en e, namel : a) Administrati e Order No. 4-93, hich pro ides for the
"Organi ational Str ct re and Statement of General F nctions of Offices in the National Office" and b)
Administrati e Order No. 5-93, hich pro ides for "Redefining the Areas of J risdiction and Ren mbering of
Regional And District Offices."

The antecedent facts of the instant case as s ccinctl related b the Solicitor General are as follo s:

On September 18, 1992,1 a decision as rendered b the Sandiganba an con icting herein petitioner Aq ilino T.
Larin, Re en e Specific Ta Officer, then Assistant Commissioner of the B rea of Internal Re en e and his co-
acc sed (e cept J stino E. Galban, Jr.) of the crimes of iolation of Section 268 (4) of the National Internal Re en e
Code and Section 3 (e) of R.A. 3019 in Criminal Cases Nos. 14208-14209, entitled "People of the Philippines,
Plaintiff s. Aq ilino T. Larin, Teodoro T. Pareno, J stino E. Galban, Jr. and Potenciana N. E angelista, Acc sed,"
the dispositi e portion of the j dgment reads:

WHEREFORE, j dgment is no rendered in Criminal Cases Nos. 14208 and 14209 con icting
acc sed Assistant Commissioner for Specific Ta AQUILINO T. LARIN, Chief of the Alcohol Ta
Di ision TEODORO P. PARENO, and Chief of the Re en e Acco nting Di ision POTENCIANA M.
EVANGELISTA:

SO ORDERED.

The fact of petitioner's con iction as reported to the President of the Philippines b the then Acting Finance
Secretar Leong thro gh a memorand m dated J ne 4, 1993. The memorand m states, i e a ia:

This is a report in the case of Assistant Commissioner AQUILINO T. LARIN of the E cise Ta Ser ice,
B rea of Internal Re en e, a presidential appointee, one of those con icted in Criminal Case Nos.
14208-14209, entitled "People of the Philippines s. Aq ilino T. Larin, et. al." referred to the Department
of Finance b the Commissioner of Internal Re en e.

The cases against Pareno and E angelista are being acted pon b the B rea of Internal Re en e as
the are non-presidential appointees.

It is clear from the foregoing that Mr. Larin has been fo nd be ond reasonable do bt to ha e committed
acts constit ting gra e miscond ct. Under the Ci il Ser ice La s and R les hich req ire onl
preponderance of e idence, gra e miscond ct is p nishable b dismissal.

Acting b a thorit of the President, Sr. Dep t E ec ti e Secretar Leonardo A. Q is mbing iss ed Memorand m
Order No. 164 dated A g st 25, 1993 hich pro ides for the creation of an E ec ti e Committee to in estigate the
administrati e charge against herein petitioner Aq ilino T. Larin. It states th s:

A Committee is hereb created to in estigate the administrati e complaint filed against Aq ilino T.
Larin, Assistant Commissioner, B rea of Internal Re en e, to be composed of:

Att . Fr mencio A. Lag stan Chairman

Assistant E ec ti e Secretar for Legislation

Mr. Jose B. Alejandro Member

Presidential Assistant

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Att . Jaime M. Ma a Member
Assistant Commissioner for Inspector Ser ices
B rea of Internal Re en e

The Committee shall ha e all the po ers and prerogati es of (an) in estigating committee nder the
Administrati e Code of 1987 incl ding the po er to s mmon itnesses, administer oath or take
testimon or e idence rele ant to the in estigation b s bpoena ad testificand m and s bpoena d ce
ec .

The Committee shall con ene immediatel , cond ct the in estigation in the most e peditio s manner,
and terminate the same as soon as practicable from its first sched led date of hearing.

Conseq entl , the Committee directed the petitioner to respond to the administrati e charge le eled against him
thro gh a letter dated September 17, 1993, th s:

Presidential Memorand m Order No. 164 dated A g st 25, 1993, a ero cop of hich is hereto
attached for o r read reference, created an In estigation Committee to look into the charges against
o hich are also the s bject of the Criminal Cases No. 14208 and 14209 entitled Pe e f he
Phi i i e . A i i T . La i , et. al.

The Committee has in its possession a certified tr e cop of the Decision of the Sandiganba an in the
abo e-mentioned cases.

P rs ant to Presidential Memorand m Order No. 164, o are hereb directed to file o r position
paper on the aforementioned charges ithin se en (7) da s from receipt hereof . . . .

Fail re to file the req ired position paper shall be considered as a ai er on o r part to s bmit s ch
paper or to be heard, in hich case, the Committee shall deem the case s bmitted on the basis of the
doc ments and records at hand.

In compliance, petitioner s bmitted a letter dated September 30, 1993 hich as addressed to Att . Fr mencio A.
Lag stan, the Chairman of the In estigating Committee. In said latter, he asserts that,

The case being s b-j dice, I ma not, therefore, comment on the merits of the iss es in ol ed for fear
of being cited in contempt of Co rt. This position paper is th s limited to f rnishing the Committee
pertinent doc ments s bmitted ith the S preme Co rt and other trib nal hich took cogni ance of the
case in the past, as follo s:

The foregoing doc ments readil sho that am not administrati el liable or criminall c lpable of the
charges le eled against me, and that the aforesaid cases are mere persec tions ca sed to be filed and
are being orchestrated b ta pa ers ho ere prej diced b m lti-million peso assessments I ca sed
to be iss ed against them in m official capacit as Assistant Commissioner, E cise Ta Office of the
B rea of Internal Re en e.

In the same letter, petitioner claims that the administrati e complaint against him is alread barred: a) on
j risdictional gro nd as the Office of the Omb dsman had alread taken cogni ance of the case and had ca sed the
filing onl of the criminal charges against him, b) b res j dicata, c) b do ble jeopard , and d) beca se to proceed
ith the case o ld be red ndant, oppressi e and a plain persec tion against him.

Mean hile, the President iss ed the challenged E ec ti e Order No. 132 dated October 26, 1993 hich mandates
=
for the streamlining of the B rea of Internal Re en e. Under said order, some positions and f nctions are either
abolished, renamed, decentrali ed or transferred to other offices, hile other offices are also created. The E cise
Ta Ser ice or the Specific Ta Ser ice, of hich petitioner as the Assistant Commissioner, as one of those
offices that as abolished b said e ec ti e order.

The corresponding implementing r les of E ec ti e Order No. 132, namel , Re en e Administrati e Orders Nos. 4-
93 and 5-93, ere s bseq entl iss ed b the B rea of Internal Re en e.

On October 27, 1993, or one da after the prom lgation of E ec ti e Order No. 132, the President appointed the
follo ing as BIR Assistant Commissioners:

1. Bernardo A. Friane a

2. Dominador L. Gal ra

3. Jaime D. Gon ales

4. Lilia C. G illermo

5. Ri alina S. Magalona

6. Victorino C. Mamalateo

7. Jaime M. Ma a

8. Antonio N. Pangilinan

9. Melchor S. Ramos

10. Joel L. Tan-Torres

Conseq entl , the President, in the assailed Administrati e Order No. 101 dated December 2, 1993, fo nd petitioner
g ilt of gra e miscond ct in the administrati e charge and imposed pon him the penalt of dismissal ith forfeit re
of his lea e credits and retirement benefits incl ding disq alification for reappointment in the go ernment ser ice.

Aggrie ed, petitioner filed directl ith this Co rt the instant petition on December 13, 1993 to q estion basicall his
alleged nla f l remo al from office.

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On April 17, 1996 and hile the instant petition is pending, this Co rt set aside the con iction of petitioner in
Criminal Case Nos. 14208 and 14209.

In his petition, petitioner challenged the a thorit of the President to dismiss him from office. He arg ed that in so far
as presidential appointees ho are Career E ec ti e Ser ice Officers are concerned, the President e ercises onl
the po er of control not the po er to remo e. He also a erred that the administrati e in estigation cond cted nder
Memorand m Order No. 164 is oid as it iolated his right to d e process. According to him, the letter of the
Committee dated September 17, 1993 and his position paper dated September 30, 1993 are not s fficient for
p rposes of compl ing ith the req irements of d e process. He alleged that he as not informed of the
administrati e charges le eled against him nor as he gi en official notice of his dismissal.

Petitioner like ise claimed that he as remo ed as a res lt of the reorgani ation made b the E ec ti e
#
Department in the BIR p rs ant to E ec ti e Order No. 132. Th s, he assailed said E ec ti e Order No. 132 and its
implementing r les, namel , Re en e Administrati e Orders 4-93 and 5-93 for being ltra ires. He claimed that
there is et no la enacted b Congress hich a thori es the reorgani ation b the E ec ti e Department of
e ec ti e agencies, partic larl the B rea of Internal Re en e. He said that the reorgani ation so ght to be
effected b the E ec ti e Department on the basis of E.O. No. 132 is tainted ith bad faith in apparent iolation of
Section 2 of R.A. 6656, other ise kno n as the Act Protecting the Sec rit of Ten re of Ci il Ser ice Officers and
Emplo ees in the Implementation of Go ernment Reorgani ation.

On the other hand. respondents contended that since petitioner is a presidential appointee, he falls nder the
disciplining a thorit of the President. The also contended that E.O. No. 132 and its implementing r les ere
alidl iss ed p rs ant to Sections 48 and 62 of Rep blic Act No. 7645. Apart from this, the other legal bases of
E.O. No. 132 as stated in its preamble are Section 63 of E.O. No. 127 (Reorgani ing the Ministr of Finance), and
Section 20, Book III of E.O. No. 292, other ise kno n as the Administrati e Code of 1987. In addition, it is clear that
in Section 11 of R.A. No. 6656 f t re reorgani ation is e pressl contemplated and nothing in said la that prohibits
s bseq ent reorgani ation thro gh an e ec ti e order. Significantl , respondents clarified that petitioner as not
dismissed b irt e of EO 132. Respondents claimed that he as remo ed from office beca se he as fo nd g ilt
of gra e miscond ct in the administrati e cases filed against him.

The ltimate iss e to be resol ed in the instant case falls on the determination of the alidit of petitioner's dismissal
from office. Incidentall , in order to resol e this matter, it is imperati e that We consider these q estions: a) Who has
the po er to discipline the petitioner?, b) Were the proceedings taken p rs ant to Memorand m Order No. 164 in
accord ith d e process?, c) What is the effect of petitioner's acq ittal in the criminal case to his administrati e
charge?, d) Does the President ha e the po er to reorgani e the BIR or to iss e the q estioned E.O. NO. 132?,
and e) Is the reorgani ation of BIR p rs ant to E.O. No. 132 tainted ith bad faith?

At the o tset, it is orth to note that the position of Assistant Commissioner of the BIR is part of the Career
E ec ti e Ser ice.2 Under the la ,3 Career E ec ti e Ser ice officers, namel , Undersecretar , Assistant Secretar ,
B rea Director, Assistant B rea Director, Regional Director, Assistant Regional Director, Chief of Department
Ser ice and other officers of eq i alent rank as ma be identified b the Career E ec ti e Ser ice Board, are all
appointed b the President. Concededl , petitioner as appointed as Assistant Commissioner in Jan ar , 1987 b
then President Aq ino. Th s, petitioner is a presidential appointee ho belongs to career ser ice of the Ci il
Ser ice. Being a presidential appointee, he comes nder the direct disciplining a thorit of the President. This is in
line ith the ell settled principle that the "po er to remo e is inherent in the po er to appoint" conferred to the
#

President b Section 16, Article VII of the Constit tion. Th s, it is inel ctabl clear that Memorand m Order No. 164,
hich created a committee to in estigate the administrati e charge against petitioner, as iss ed p rs ant to the
po er of remo al of the President. This po er of remo al, ho e er, is not an absol te one hich accepts no
reser ation. It m st be pointed o t that petitioner is a career ser ice officer. Under the Administrati e Code of 1987,
career ser ice is characteri ed b the e istence of sec rit of ten re, as contra-disting ished from non-career
ser ice hose ten re is co-termin s ith that of the appointing a thorit or s bject to his pleas re, or limited to a
period specified b la or to the d ration of a partic lar project for hich p rpose the emplo ment as made. As a
career ser ice officer, petitioner enjo s the right to sec rit of ten re. No less than the 1987 Constit tion g arantees
the right of sec rit of ten re of the emplo ees of the ci il ser ice. Specificall , Section 36 of P.D. No. 807, as
amended, other ise kno n as Ci il Ser ice Decree of the Philippines, is emphatic that career ser ice officers and
emplo ees ho enjo sec rit of ten re ma be remo ed onl for an of the ca ses en merated in said la . In other
ords, the fact that petitioner is a presidential appointee does not gi e the appointing a thorit the license to remo e
him at ill or at his pleas re for it is an admitted fact that he is like ise a career ser ice officer ho nder the la is
the recipient of ten rial protection, th s, ma onl be remo ed for a ca se and in accordance ith proced ral d e
process.

Was petitioner then remo ed from office for a legal ca se nder a alid proceeding?

Altho gh the proceedings taken complied ith the req irements of proced ral d e process, this Co rt, ho e er,
considers that petitioner as not dismissed for a alid ca se.

It sho ld be noted that hat precipitated the creation of the in estigati e committee to look into the administrati e
charge against petitioner is his con iction b the Sandiganba an in Criminal Case Nos. 14208 and 14209. As
admitted b the respondents, the administrati e case against petitioner is based on the Sandiganba an Decision of
September 18, 1992. Th s, in the Administrati e Order No. 101 iss ed b Senior Dep t E ec ti e Secretar
Q is mbing hich fo nd petitioner g ilt of gra e miscond ct, it clearl states that:

This pertains to the administrati e charge against Assistant Commissioner Aq ilino T. Larin of the
B rea of Internal Re en e, for gra e miscond ct b irt e of a Memorand m signed b Acting
Secretar Leong of the Department of Finance, he ba i f a deci i handed do n b the Hon.
Sandiganba an con icting Larin, et. al. in Criminal Case Nos. 14208 and 14209.4

In a n tshell, the criminal cases against petitioner refer to his alleged iolation of Section 268 (4) of the National
Internal Re en e Code and of Section 3 (e) of R.A. No. 3019 as a conseq ence of his act of fa orabl
recommending the grant of ta credit to Tand a Distiller , Inc.. The pertinent portion of the j dgment of the
Sandiganba an reads:

As abo e pointed o t, the acc sed had conspired in kno ingl preparing false memoranda and
certification in order to effect a fra d pon ta es d e to the go ernment. B their separate acts hich
had res lted in an appropriate ta credit of P180,701,682.00 in fa or of Tand a . The go ernment had
been defra ded of a ta re en e for the f ll amo nt, if one is to look at the a ailments or tili ation
thereof (E hibits "AA" to "AA- 31-a"), or for a s bstantial portion thereof (P73,000,000.00) if e are to
rel on the letter of Dep t Commissioner E fracio D. Santos (E hibits "21" for all the acc sed).

As pointed o t abo e, the confl ence of acts and omissions committed b acc sed Larin, Pareno and
E angelista adeq atel pro e conspirac among them for no other p rpose than to bring abo t a ta
credit hich Tand a did not deser e. These misrepresentations as to ho m ch Tand a had paid in
ad alorem ta es ob io sl constit ted a fra d of ta re en e of the go ernment . . . .5

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Ho e er, it m st be stressed at this j nct re that the con iction of petitioner b the Sandiganba an as e a ide b
this Co rt in o r decision prom lgated on April 17, 1996 in G.R. Nos. 108037-38 and 107119-20. We specificall
r led in no ncertain terms that: a) petitioner can not be held negligent in rel ing on the certification of a co-eq al
nit in the BIR, b) it is not inc mbent pon Larin to go be ond the certification made b the Re en e Acco nting
Di ision that Tand a Distiller , Inc. had paid the ad alorem ta es, c) there is nothing irreg lar or an thing false in
Larin's marginal note on the memorand m addressed to Pareno, the Chief of Alcohol Ta Di ision ho as also one
of the acc sed, b t e ent all acq itted, in the said criminal cases, and d) there is no proof of act al agreement
bet een the acc sed, incl ding petitioner, to commit the illegal acts charged. We are emphatic in o r resol tion in
said cases that there is nothing "illegal ith the acts committed b the petitioner(s)." We also declare that "there is
no sho ing that petitioner(s) had acted irreg larl , or performed acts o tside of his (their) official f nctions."
Significantl , these acts hich. We categoricall declare to be not nla f l and improper in G.R. Nos. 108037-38
and G.R. Nos. 107119-20 are the er same acts for hich petitioner is held to be administrati el responsible. An
charge of malfeasance or misfeasance on the part of the petitioner is clearl belied b o r concl sion in said cases.
In the light of this decisi e prono ncement, We see no reason for the administrati e charge to contin e it m st,
th s, be dismissed.

We are not na are of the r le that since administrati e cases are independent from criminal actions for the same
act or omission, the dismissal or acq ittal of the criminal charge does not foreclose the instit tion of administrati e
action nor carr ith it the relief from administrati e liabilit .6 Ho e er, the circ mstantial setting of the instant case
sets it miles apart from the foregoing r le and placed it ell ithin the e ception. Corollaril , here the er basis of
the administrati e case against petitioner is his con iction in the criminal action hich as later on set aside b this
Co rt pon a categorical and clear finding that the acts for hich he as administrati el held liable are not nla f l
and irreg lar, the acq ittal of the petitioner in the criminal case necessaril entails the dismissal of the administrati e
action against him, beca se in s ch a case, there is no more basis nor j stifiable reason to maintain the
administrati e s it.

On the aspect of proced ral d e process, s ffice it to sa that petitioner as gi en e er chance to present his side.
The r le is ell settled that the essence of d e process in administrati e proceedings is that a part be afforded a
reasonable opport nit to be heard and to s bmit an e idence he ma ha e in s pport of his defense.7 The records
clearl sho that on October 1, 1993 petitioner s bmitted his letter-response dated September 30, 1993 to the
administrati e charge filed against him. Aside from his letter, he also s bmitted ario s doc ments attached as
anne es to his letter, all of hich are e idences s pporting his defense. Prior to this, he recei ed a letter dated
September 17, 1993 from the In estigation Committee req iring him to e plain his side concerning the charge. It
can not therefore be arg ed that petitioner as denied of d e process.

Let s no e amine E ec ti e Order No. 132.

As stated earlier, ith the iss ance of E ec ti e Order No. 132, some of the positions and offices, incl ding the
office of E cise Ta Ser ices of hich petitioner as the Assistant Commissioner, ere abolished or other ise
decentrali ed. Conseq entl , the President released the list of appointed Assistant Commissioners of the BIR.
Apparentl , petitioner as not incl ded.

We do not agree.

Under its preamble, E.O. No. 132 la s do n the legal bases of its iss ance, namel : a) Section 48 and 62 of R.A.
No. 7645, b) Section 63 of E.O. No. 127, and c) Section 20, Book III of E.O. No. 292.

Section 48 of R.A. 7645 pro ides that:

Sec. 48. Scaling Do n and Phase O t of Acti ities of Agencies Within the E ec ti e Branch. The
heads of departments, b rea s and offices and agencies are hereb directed to identif their respecti e
acti ities hich are no longer essential in the deli er of p blic ser ices and hich ma be ca ed
d , ha ed ab i hed, s bject to ci il ser ice r les and reg lations. . . . Ac a ca i g d ,
ha i g ab i i of the acti ities shall be effected p rs ant to Circ lars or Orders iss ed for the
p rpose b the Office of the President. (emphasis o rs)

Said pro ision clearl mentions the acts of "scaling do n, phasing o t and abolition" of offices onl and does not
co er the creation of offices or transfer of f nctions. Ne ertheless, the act of creating and decentrali ing is incl ded
in the s bseq ent pro ision of Section 62, hich pro ides that:

Sec. 62. Una thori ed organi ational charges. Unless other ise created b la or directed b the
President of the Philippines, no organi ational nit of charges in ke positions in an department or
agenc shall be a thori ed in their respecti e organi ation str ct res and be f nded from
appropriations b this Act. (emphasis o rs)

The foregoing pro ision e identl sho s that the President is a thori ed to effect organi ational charges incl ding
the creation of offices in the department or agenc concerned.

The contention of petitioner that the t o pro isions are riders deser es scant consideration. Well settled is the r le
that e er la has in its fa or the pres mption of constit tionalit .8 Unless and ntil a specific pro ision of the la is
declared in alid and nconstit tional, the same is alid and biding for all intents and p rposes.

Another legal basis of E.O. No. 132 is Section 20, Book III of E.O. No. 292 hich states:

Sec. 20. Resid al Po ers. Unless Congress pro ides other ise, the President shall e ercise ch
he e a d f ci e ed i he P e ide hich a e ided f de he a and hich
are not specificall en merated abo e or hich are not delegated b the President in accordance ith
la . (emphasis o rs)

This pro ision speaks of s ch other po ers ested in the President nder the la . What la then hich gi es him
the po er to reorgani e? It is Presidential Decree No. 17729 hich amended Presidential Decree No. 1416. These
decrees e pressl grant the President of the Philippines the contin ing a thorit to reorgani e the national
go ernment, hich incl des the po er to gro p, consolidate b rea s and agencies, to abolish offices, to transfer
f nctions, to create and classif f nctions, ser ices and acti ities and to standardi e salaries and materials. The
alidit of these t o decrees are nq estionable. The 1987 Constit tion clearl pro ides that "all la s, decrees,
e ec ti e orders, proclamations, letters of instr ctions and other e ec ti e iss ances not inconsistent ith this
Constit tion shall remain operati e ntil amended, repealed or re oked."10 So far, there is et no la amending or
repealing said decrees. Significantl , the Constit tion itself recogni es f t re reorgani ations in the go ernment as
hat is re ealed in Section 16 of Article XVIII, th s:

Sec. 16. Career ci il ser ice emplo ees separated from ser ice not for ca se b t as a res lt of the . . .
reorgani ation follo ing the ratification of this Constit tion shall be entitled to appropriate separation
pa . . .

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Ho e er, We can not consider E.O. No. 127 signed on Jan ar 30, 1987 as a legal basis for the reorgani ation of
the BIR. E.O. No. 127 sho ld be related to the second paragraph of Section 11 of Rep blic Act No. 6656.

Section 11 pro ides i e a ia:

In the case of the 1987 e ga i a i of the e ec ti e branch, all departments and agencies hich are
a thori ed b e ec ti e orders prom lgated b the President to reorgani e shall ha e i e da from
the appro al of this act ithin hich to implement their respecti e reorgani ation plans in accordance
ith the pro isions of this Act. (emphasis o rs)

E ec ti e Order No. 127 as part of the 1987 reorgani ation contemplated nder said pro ision. Ob io sl , it had
become stale b irt e of the e piration of the ninet da deadline period. It can not th s be sed as a proper basis
for the reorgani ation of the BIR. Ne ertheless, as sho n earlier, there are other legal bases to s stain the a thorit
of the President to iss e the q estioned E.O. NO. 132.

While the President's po er to reorgani e can not be denied, this does not mean ho e er that the reorgani ation
itself is properl made in accordance ith la . Well-settled is the r le that reorgani ation is regarded as alid
pro ided it is p rs ed in good faith. Th s, in Da i . Mi , this Co rt has had the occasion to clarif that:

As a general r le, a reorgani ation is carried o t in "good faith" if it is for the p rpose of econom or to
make b rea crac more efficient. In that e ent no dismissal or separation act all occ rs beca se the
position itself ceases to e ist. And in that case the sec rit of ten re o ld not be a Chinese all. Be
that as it ma , if the abolition hich is nothing else b t a separation or remo al, is done for political
reasons or p rposel to defeat sec rit of ten re, or other ise not in good faith, no alid abolition takes
place and hate er abolition is done is oid ab i i i . There is an in alid abolition as here there is
merel a change of nomenclat re of positions or here claims of econom are belied b the e istence
of ample f nds.11

In this regard, it is orth mentioning that Section 2 of R. A. No. 6656 lists do n the circ mstances e idencing bad
faith in the remo al of emplo ees as a res lt of the reorgani ation, th s:

Sec. 2. No officer or emplo ee in the career ser ice shall be remo ed e cept for a alid ca se and after
d e notice and hearing. A alid ca se for remo al e ists hen, p rs ant to a bona fide reorgani ation,
a position has been abolished or rendered red ndant or there is a need to merge, di ide, or consolidate
positions in order to meet the e igencies of the ser ice, or other la f l ca ses allo ed b the Ci il
Ser ice La . The e istence of an or some of the follo ing circ mstances ma be considered as
e idence of bad faith in the remo als made as a res lt of the reorgani ation, gi ing rise to a claim for
reinstatement or reappointment b an aggrie ed part :

a) Where there is a significant increase in the n mber of positions in the ne staffing pattern of the
department or agenc concerned;

b) Where an office is abolished and another performing s bstantiall the same f nctions is created;

c) Where inc mbents are replaced b those less q alified in terms of stat s of appointment,
performance and merit;

d) Where there is a reclassification of offices in the department or agenc concerned and the
reclassified offices perform s bstantiall the same f nctions as the original offices;

e) Where the remo al iolates the order of separation pro ided in Section 3 hereof.

A reading of some of the pro isions of the q estioned E.O. No. 132 clearl leads s to an inescapable concl sion
that there are circ mstances considered as e idences of bad faith in the reorgani ation of the BIR.

Section 1.1.2 of said e ec ti e order pro ides that:

1.1.2 The Intelligence and In estigation Office and the Inspection Ser ice are abolished. An
Intelligence and In estigation Ser ice is
hereb created to absorb the a e f c i of the abolished office and ser ice. . . . (emphasis o rs)

This pro ision is a clear ill stration of the circ mstance mentioned in Section 2 (b) of R.A. No. 6656 that an office is
abolished and another one performing s bstantiall the same f nction is created.

Another circ mstance is the creation of ser ices and di isions in the BIR res lting to a significant increase in the
n mber of positions in the said b rea as contemplated in paragraph (a) of Section 2 of R.A. No. 6656. Under
Section 1.3 of E.O. No. 132, the Information S stems Gro p has t o ne l created S stems Ser ices. Aside from
this, si ne di isions are also created. Under Section 1.2.1, three more di isions of the Assessment Ser ice are
formed. With these ne l created offices, there is no do bt that a significant increase of positions ill
correspondingl follo .

F rthermore, it is percei able that the non-reappointment of the petitioner as Assistant Commissioner iolates
Section 4 of R.A. No. 6656. Under said pro ision, officers holding permanent appointments are gi en preference for
appointment to the ne positions in the appro ed staffing pattern comparable to their former positions or in case
there are not eno gh comparable positions to positions ne t lo er in rank. It is ndeniable that petitioner is a career
e ec ti e officer ho is holding a permanent position. Hence, he sho ld ha e been gi en preference for
appointment in the position of Assistant Commissioner. As claimed b petitioner, Antonio Pangilinan ho as one of
those appointed as Assistant Commissioner, "is an o tsider of sorts to the B rea , not ha ing been an inc mbent
officer of the B rea at the time of the reorgani ation." We sho ld not lose sight of the second paragraph of Section
4 of R.A. No. 6656 hich e plicitl states that no ne emplo ees shall be taken in ntil all permanent officers shall
ha e been appointed for permanent position.

IN VIEW OF THE FOREGOING, the petition is granted, and petitioner is hereb reinstated to his position as
Assistant Commissioner itho t loss of seniorit rights and shall be entitled to f ll back ages from the time of his
separation from ser ice ntil act al reinstatement nless, in the mean hile, he o ld ha e reached the comp lsor
retirement age of si t -fi e ears in hich case, he shall be deemed to ha e retired at s ch age and entitled
thereafter to the corresponding retirement benefits.

SO ORDERED.

Na a a, C.J., Da ide, J ., R e , Be i , Me , P , Vi g, Ka a , Me d a, F a ci c , He i i a, J .
a d Pa ga iba , JJ., c c .

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Rega ad , J., i ea e.

1 The Office of the Solicitor General inad ertentl dated it as December 1, 1992.

2 See Flore a s. Ongpin, G.R. Nos. 81356 and 86156, Febr ar 26, 1990 , 182 SCRA 692, 707.

3 P.D. No. 807, as amended, other ise kno n as the Ci il Ser ice Decree of the Philippines; E.O. No.
292, other ise kno n as the Administrati e Code of 1987.

4R p. 94.

5R p. 113.

6 Police Commission s. Lood, No. L-34230, March 31, 1980 , 96 SCRA 819; Office of the Co rt
Administrator s. Enriq e , A.M. No. P-89-290, Jan ar 29, 1993, 218 SCRA 1.

7 Midas To ch Food Corp. s. NLRC, G.R. No. 111639, J l 29, 1996, 259 SCRA 652.

8 Abbas s. COMELEC, 179 SCRA 287.

9 Official Ga ette Vol. 78, No. 40, pp. 5486-2, 3.

10 Section 3 of Article XVIII.

11 176 SCRA 84.

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