Supreme Transliner, Inc. et al. v. BPI Family Savings Bank, Inc.

,
G.R. No. 165617, February 25, 2011

FACTS:

Supreme Transliner took out a loan from respondent and was unable to pay. The
respondent bank extrajudicially foreclosed the collateral and, before the expiration of
the one-year redemption period, the mortgagors notified the bank of its intention to
redeem the property.

ISSUE:

Is the mortgagee-bank liable to pay the capital gains tax upon the execution of the
certificate of sale and before the expiry of the redemption period?

RULING:

NO. It is clear that in foreclosure sale there is no actual transfer of the mortgaged real property
until after the expiration of the one-year period and title is consolidated in the name of the
mortgagee in case of non-redemption. This is because before the period expires there is yet no
transfer of title and no profit or gain is realized by the mortgagor.

CIR v. Trustmark Holdings Corporation

(CTA EB No. 1697 dated January 31, 2019)

FACTS:
Respondent receive LOA dated May 14, 2010 covering January 1, 2009-December
31, 2009. The tax examination was continued by another revenue officer by virtue of
a MOA dated December 1, 2014.
Respondent also received NIC dated October 19, 2011, requesting it to appear for
an informal conference within 15 days from receipt at BIR National Office.
On November 25, 2011, respondent filed a letter with petitioner, stating its
willingness to pay the basic taxes due upon receipt of PAN. On December 23, 2011,
respondent received the PAN with details of discrepancy for deficiency of DST.
On December 28, 2011, respondent paid the basic DST due. On October 28, 2014,
respondent received Formal Letter of Demand finding it liable for deficiency DST.

ISSUE:
WON surcharge and interest of the DST be cancelled.

RULING:
YES. Numerous rulings issued by the BIR, respondent had the reason enough to
sustain a belief that its intercompany advances were not subject to DST. With the
constant change in the BIR Ruling, no clear and definite stance was established on the
matter prior to the 2011 Filinvest case upon which respondent could lean on.

IBM Plaza Condominum Association, Inc. v. CIR

(CTA Case No. 8740 dated January 24, 2020)
FACTS:
ISSUE:
RULING:

People vs Enviroaire, Inc.

CTA Crim Case No. 0-408, September 4, 2019 (An Assessment is not
necessary prior to the filing of a criminal complaint)

FACTS:
ISSUE:
RULING:

CIR, v. Wellington Investment & Manufacturing Corporation

CTA EB Case No. 1773, April 11, 2019.

FACTS:
ISSUE:
RULING:

21.   CIR vs San Miquel Foods, Inc. CTA EB 1880 re Case No. 9046, January 7,
2020

FACTS:
ISSUE:
RULING:

26.   New Coast Hotel, Inc. v. CIR CTA EB NO. 1758, 1 October 2019

FACTS:
ISSUE:
RULING:

31.   Medicard Philippines v. CIR (G.R. No. 222743, April 5, 2017)

FACTS:
MEDICARD was ordered by the CTA to pay CIR VAT deficiency at 220 million
pesos plus 20% interest per annum from January 25, 2007.

Finding some discrepancies between MEDICARD's Income Tax Returns (ITR) and
VAT Returns, the CIR informed MEDICARD and issued a Letter Notice (LN). A
PAN was issued against MEDICARD for deficiency VAT. A FAN was received by
MEDICARD on January 4, 2008 for alleged deficiency VAT for taxable year 2006 in
the total amount of Pl 96,614,476.69,10 inclusive of penalties.

More importantly, MEDICARD raised the issue of lack of Letter of Authority (LOA)
on the part of the revenue officer who conducted the examination. The CIR, on the
other hand, posits that the LN is enough compliance with the LOA requirement,
arguing that the use of computers to detect discrepancies dispenses with the
requirement of LOA.

Furthermore, the CIR argued that the amounts earmarked and eventually paid by
MEDICARD to medical service providers form part of gross receipts for VAT
purposes. The CTA EB sided with the CIR.

ISSUE:
Can the LN replace the LOA requirement? What is the status of the assessment?

RULING:
No, the LN cannot replace the LOA requirement.
An LOA is the authority given to the appropriate revenue officer assigned to perform
assessment functions. In the absence of such an authority, the assessment or
examination is a nullity.

The LN cannot replace the LOA required under the law even if the same was
issued by the CIR himself. Under RR No. 12-2002, LN is issued to a person found
to have underreported sales/receipts per data generated under the RELIEF system.
Upon receipt of the LN, a taxpayer may avail of the BIR's Voluntary Assessment
and Abatement Program. If a taxpayer fails or refuses to avail of the said program,
the BIR may avail of administrative and criminal remedies, particularly closure,
criminal action, or audit and investigation. Since the law specifically requires an
LOA and RMO No. 32-2005 requires the conversion of the previously issued LN to
an LOA, the absence thereof cannot be simply swept under the rug, as the CIR
would have it. In fact, Revenue Memorandum Circular No. 40-2003 considers an
LN as a notice of audit or investigation only for the purpose of disqualifying the
taxpayer from amending his returns.

The revenue officers not having authority to examine MEDICARD in the first place,
the assessment issued by the CIR is inescapably void.

35.   GS MTE Grains Corporation v. CIR (CTA Case No. 8837, March 19, 2018)

FACTS:
ISSUE:
RULING:

39.   Ten-Four Readymix Concrete, Inc. v. CIR (CTA Case No. 10081 dated
January 16, 2020)

FACTS:
ISSUE:
RULING:

43.   San Miguel Brewery v. CIR (CTA EB No. 1772 dated January 24, 2019)

FACTS:
ISSUE:
RULING:

47.   CIR vs SMC Stock Transfer Service Corp CTA Case No. 889 June 26,
2013

FACTS:
ISSUE:
RULING:

51.   CIR vs Philippine Tobacco Flue-Curing and Redrying Corporation CTA

1218 and 1220 April 11, 2016

FACTS:
ISSUE:
RULING:

55.   Collector v. Bautista, L-12250, L-12259, May 27, 1959

FACTS:
ISSUE:
RULING:

59.   CIR v. Union Shipping, GR 66160, May 21, 1990.

FACTS:
Petitioner assessed private respondent for deficiency taxes due for years 1971 and
1972. Private respondent protested the assessment but petitioner instead issued on
Novermber 25, 1976 a warrant of distraint and levy. The latter reiterated its request
for reinvestigation of the assessment and for reconsideration of the summary
collection through the Warrant of Distraint and Levy. Again without action on the
request for reinvestigation and reconsideration of the Warrant, a petitioner filed a
collection suit against private respondent. Summons was issued against the latter
on December 28, 1978. On January 10, 1979, private respondent filed its petition
for review with the CTA.

ISSUE:
WON petitioner’s decision has become final and executory for failure of private
respondent to timely appear before the CTA.

RULING:
NO. There appears to be no dispute that petitioner did not rule on private
respondent’s motion for reconsideration but left the latter in the dark as to which
action of the Commissioner is the decision appealable to the CTA. Had he
categorically stated that he denies private respondent’s motion for reconsideration
and that his action constitutes his determination on the disputed assessment,
private respondent without needless difficulty would have been able to determine
when his right to appeal accrues and the resulting confusion would have been
avoided.

The request for reinvestigation and reconsideration was in effect considered denied
by petitioner when the latter filed a civil suit for collection of deficiency. So when
private respondent filed the appeal with the CTA, it consumed a total of only 13
days, well within the 30-day period to appeal pursuant to Section 11 of RA No.
1125.

63.   Gibbs v. Commissioner, L-17406, November 29, 1965

FACTS:
February 6, 1956, the respondent Commissioner of Internal Revenue issued
against the petitioners, "Finley J. Gibbs and Diane P. Gibbs, c/o Francisco
Collantes, Rm. 301, Cepoc Bldg., Dasmariñas, Manila" Deficiency Income Tax
Assessment for 1950, with demand to pay on or before March 15, 1956. Allison
Gibbs questioned disallowance of items which gave rise to the deficiency
assessment and requested for a correction. This was denied by the Commissioner.

Allison Gibbs paid 16,853 in protest. Afterwards, she demanded refund of the
payment by October 4, or else she will file a Petition for Review with the CTA with
damages of 6% interest per annum plus atty. fees of 25% of the amount involved.
However, the Commissioner again denied the refund.

Gibbs wrote another letter to reiterate the demand for refund on the ground that the
deficiency assessment was illegal and that the letter was not a rulingon the claim
for refund. Certain claims for tax credits were also raised. She demanded payment
by Ocrober 1, 1958 or else they would file a case in the CTA.

A petition was filed "Petition for Review and Refund of Income Tax with Motion for
Suspension of Collection of Additional Taxes". The CTA dismissed for lack of
jurisdiction.

PETITIONER’S ARGUMENT:
- Respondent court erred in ruling that their petition for review was filed
outside the 30-day period prescribed by Section 8 of Republic Act No. 1125
because (a) there is neither evidence nor record that the petitioners received a copy
of the letter of October 26, 1956 denying their claim for refund, and (b) the aforesaid
letter of October 26, 1956 is not a denial of their claim for refund.
- they never received a copy of the letter denying their claim for refund. They
say Gibbs was never their legal counsel, only an agent or attorney-infact
- However, it was Allison Gibbs their attorney-in-fact who received a copy of
the same. In support of this, it is argued that prior to October 26, 1956, Allison J.
Gibbs had explicitly qualified his signature to all his correspondences regarding the
disputed assessment as "attorney-in-fact." Furthermore, it is urged that as might be
seen on the face of the assessment notice itself, the real legal counsel of the
petitioners in the matter of the said assessment was Atty. Francisco Collantes.

- CTA erred in ruling that claim for tax credit had already expired because it
pertained to tax payments made in 1951, and the protest was made only in 1958.

o They insist that they could not be deemed to have paid 1951 tax obligation
until February 1957 because they merely contributed to the withholding tax system
in 1951 and claimed certain refunds against their contribution at the end of the said
tax year and they received notice of the resolution on their claim for such refund
only on February 19, 1957. Basically, income tax assessments against which
claims for refund have been lodged and which are covered by taxes withheld at the
source shall be considered paid, not at the time such tax obligations fall due, but,
only when the claims for refund against the assessments are finally resolved by the
authorities.

RESPONDENT’S ARGUMENT: : CTA has no jurisdiction because case was filed

beyond the 30-day period from receipt of respondent's decision

ISSUE:
W/N the petition was filed beyond the 30-day period
Whether the withholding tax credits amount to payment for the purpose of
determining the two-year period as provided for by Section 306 of the Internal
Revenue Code.

RULING:

YES. General rule is that it runs from receipt of the assailed order. In this case, the
receipt of October 26, 1956; case was filed October 1958.
YES. Contribution to withholding tax system performs, and extinguishes his tax
obligation during the year. Taxpayer whose income is withheld at source will be
deemed to have paid tax liability when the same falls due at the end of the tax year.
That will start the running of the 2-year prescriptive period prescribed in Sec. 306
with respect to the payments efffected through the withholding tax system.

67.   United Airlines v. CIR, G.R. No. 178788, September 29, 2010

FACTS:
Petitioner used to be an online carrier but ceased operating cargo flights from the
Philippines starting 2001. It is now an offline international air carrier but has a
general sales agent in the Philippines which sells passage documents for its off-line
flights for carriage of passengers and cargo. It filed a claim for refund on the Gross
Philippine Billings (GPB) tax it paid. The CTA ruled that Petitioner was not liable for
the GBP but was liable to pay 32% tax on its net income derived from the sales of
passage documents in the Philippines.

ISSUE:
Is Petitioner liable for either the GPB or the 32% tax?
RULING:
32% tax. The Court reiterated the ruling in South African Airways and BOAC stating
that it is the sale of tickets which is the revenue-generating activity subject to
Philippine tax. The correct interpretation of the applicable rules is that, if an
international air carrier maintains flights to and from the Philippines, it shall be taxed
at the rate of 2 1/2% of its Gross Philippine Billings, while international air carriers
that do not have flights to and from the Philippines but nonetheless earn income
from other activities in the country will be taxed at the rate of 32% of such income.

The Court also ruled that “to avoid multiplicity of suits and unnecessary difficulties
and expenses” the issue of deficiency tax assessment be resolved jointly with the
its claim for refund – and doing so does not violate the rule against offsetting of
taxes.

71.   Commissioner v. Court of Tax Appeals and Fortune Tobacco, GR119761,

August 29, 1996

FACTS:
‘Champion,’ ‘Hope,’ and ‘More’ were classified as foreign brands since they were
listed in the World Tobacco Directory as belonging to foreign companies.

However, Fortune Tobacco changed the names of ‘Hope’ to ‘Hope Luxury’ and
‘More’ to ‘Premium More,’ thereby removing the said brands from the foreign brand
category and registered as a local brand.” Ad Valorem taxes were imposed on
these brands.

RMC 37-93, Reclassification of Cigarettes Subject to Excise Tax, was issued by the
BIR which aims to collect deficiencies on ad valorem taxes against Fortune
Tobacco following their reclassification as foreign branded cigarettes.

“HOPE,” “MORE” and “CHAMPION” being manufactured by Fortune Tobacco

Corporation were considered locally manufactured cigarettes bearing a foreign
brand subject to the 55% ad valorem tax on cigarettes under RA 7654.

Fortune Tobacco filed a petition for review with the CTA. RMC 37-93 is found to be
defective, invalid and unenforceable.

The CA sustained the decision of the CTA. Hence, this appeal.

ISSUE:
Is RMC 37-93 a mere interpretative ruling, therefore not requiring, for its effectivity,
hearing and filing with the UP Law Center?

RULING:
A reading of RMC 37-93, particularly considering the circumstances under which it
has been issued, convinces us that the circular cannot be viewed simply as a
corrective measure (revoking in the process the previous holdings of past
Commissioners) or merely as construing Section 142(c)(1) of the NIRC, as
amended, but has, in fact and most importantly, been made in order to place “Hope
Luxury,” “Premium More” and “Champion” within the classification of locally
manufactured cigarettes bearing foreign brands and to thereby have them covered
by RA 7654.

Specifically, the new law would have its amendatory provisions applied to locally
manufactured cigarettes which at the time of its effectivity were not so classified as
bearing foreign brands. Prior to the issuance of the questioned circular, “Hope
Luxury,” “Premium More,” and “Champion” cigarettes were in the category of locally
manufactured cigarettes not bearing foreign brand subject to 45% ad valorem tax.
Hence, without RMC 37-93, the enactment of RA 7654, would have had no new tax
rate consequence on private respondent’s products. Evidently, in order to place
“Hope Luxury,” “Premium More,” and “Champion” cigarettes within the scope of the
amendatory law and subject them to an increased tax rate, the now disputed RMC
37-93 had to be issued. In so doing, the BIR not simply intrepreted the law; verily, it
legislated under its quasi-legislative authority.The due observance of the
requirements of notice, of hearing, and of publication should not have been then
ignored.

Indeed, the BIR itself, in its RMC 10-86, has observed and provided:

In order that there shall be a just enforcement of rules and regulations, in conformity
with the basic element of due process, the following procedures are hereby
prescribed for the drafting, issuance and implementation of the said Revenue Tax
Issuances:

(1) This Circular shall apply only to (a) Revenue Regulations; (b) Revenue Audit
Memorandum Orders; and (c) Revenue Memorandum Circulars and Revenue
Memorandum Orders bearing on internal revenue tax rules and regulations.

(2) Except when the law otherwise expressly provides, the aforesaid internal
revenue tax issuances shall not begin to be operative until after due notice thereof
may be fairly presumed.

Due notice of the said issuances may be fairly presumed only after the following
procedures have been taken;

xxx xxx xxx

(5) Strict compliance with the foregoing procedures is enjoined.

Nothing on record could tell us that it was either impossible or impracticable for the
BIR to observe and comply with the above requirements before giving effect to its
questioned circular.

All taken, the Court is convinced that the hastily promulgated RMC 37-93 has fallen
short of a valid and effective administrative issuance.

The decision of the Court of Appeals, sustaining that of the Court of Tax Appeals, is
AFFIRMED.

75.   CIR v. Phil. Global Communications, GR No. 167146, October 31, 2006.

FACTS:
Respondent on April 21 1994 received a PAN dated April 13, 1994 for deficiency
income tax. The following day, it received a FAN. It protested against the FAN in 2
protest letters dated May 6 and 23, 1994. In both letters, respondent requested for
the cancellation of the tax assessment. Which they alleged was invalid for lack of
factual and legal basis.

On October 16, 2002, respondent received from the CIR a Final Decision dated
October 8, 2002 denying respondent’s protest against the FAN and affirming the
same in toto.

ISSUE:
WON the respondent’s administrative protest embodied in two letters suspended
the running of the statute of limitations.

RULING:
NO. Where the taxpayer merely filed 2 protest letters requesting for a
reconsideration, and where the BIR could not have conducted a reinvestigation
because no new or additional evidence was submitted, the running of statute of
limitations cannot be interrupted.

79.   CIR v. Gonzales, et al., G.R. No. 177279, October 13, 20108.

FACTS:
Pursuant to Letter of Authority issued by CIR, the Revenue Officers of Tax Fraud
Division (TFD) conducted a fraud investigation for all internal revenue taxes to
determine the tax liabilities of L.M. Camus Engineering Corporation (LMCEC)
According to an “informer” LMCEC had undeclared income for years 1997, 1998
and 1999.
For failure to comply with the subpoena duces tecum issued in connection with the
tax fraud investigation, a criminal complaint was filed by the BIR against LMCEC for
violation of Section 266 (Failure to Obey Summons) of the NIRC before the Office
of the City Prosecutor. (I.S. No. 00-956)
Based on data obtained from an “informer” and various clients of LMCEC, it was
discovered that LMCEC filed fraudulent tax returns with substantial under-
declarations of taxable income for the years 1997, 1998 and 1999.
CIR’s assessed and sent LMCEC Preliminary Assessment Notice with the total
deficiency amounting to P430,958,005.90 covering the said period. Personal
service of formal demand letter was also made by CIR however, due to refusal of
representatives of LMCEC to receive said notices & demand letter, CIR resorted to
constructive notice in accordance with Section 3, Revenue Regulations (RR) No.
1299.
The CIR referred to the Secretary of Justice for preliminary investigation its
complaint against LMCEC, Luis Camus and Lino Mendoza were sued in their
capacities as President and Controller respectively. (case docket I.S. No 2003-774)
Camus and Mendoza assail the validity of the complaint claiming that assessment
notices are invalid since they don’t have serial numbers. They further aver that the
company had already undergone a series of routine examinations for the years
1997, 1998 and 1999 for under the NIRC, only one examination of the books of
accounts is allowed per taxable year.
LMCEC further averred that it had availed of the Bureau’s Tax Amnesty Programs
(Economic Recovery Assistance Payment (ERAP) Program and the Voluntary
Assessment Program (VAP) for 1998 and 1999; for 1997, its tax liability was
terminated and closed under Letter of Termination issued by the CIR. Said
programs are claimed to have granted LMCEC immunity from audit, thus, BIR is
now estopped from further taking action concerning said taxable years.
LMCEC claims that the alleged informant is fictitious and his true identity and
personality cannot be produced.
As to LMCEC’s availment of the VAP and ERAP programs, the Certificate of
Immunity from Audit was issued to it by the BIR
The Chief State Prosecutor dismissed the complaint instituted by BIR since the
payments were made by LMCEC under ERAP and VAP which were offered to
taxpayers by the BIR itself. The latter is now in estoppel to insist on the criminal
prosecution of the respondent taxpayer and that the voluntary payments made
thereunder are in the nature of a tax amnesty.
The Secretary of Justice and the Court of Appeals concurred with the Chief State
Prosecutor. Hence, this petition was filed before the Supreme Court.

ISSUE:
Whether or not LMCEC and its corporate Officers may be prosecuted for violation
of Section 254 (Attempt to Evade or Defeat Tax) and 255 (Willful Failure to Supply
Correct and Accurate Information and Pay Tax)

RULING:
Yes. The Supreme Court ruled in favor of the CIR.
Tax evasion
For the crime of tax evasion in particular, compliance by the taxpayer with such
subpoena, if any had been issued, is irrelevant. As the Court held in Ungab v. Cusi,
Jr., “the crime is complete when the taxpayer has x x x knowingly and willfully filed
a fraudulent return with intent to evade and defeat x x x the tax.”
Obtaining information from an “informer”
The lack of consent of the taxpayer under investigation does not imply that the BIR
obtained the information from third parties illegally or that the information received
is false or malicious. Nor does the lack of consent preclude the BIR from assessing
deficiency taxes on the taxpayer based on the documents.
In the same vein, LMCEC cannot be allowed to escape criminal prosecution under
Sections 254 and 255 of the NIRC by mere imputation of a “fictitious” or disqualified
informant under Section 282 simply because the Bureau insisted on maintaining the
confidentiality of the identity and personal circumstances of said “informer”.
Notice of Assessment
A notice of assessment is a declaration of deficiency taxes issued to a taxpayer
who fails to respond to a Pre-Assessment Notice (PAN) within the prescribed period
of time, or whose reply to the PAN was found to be without merit.
The Notice of Assessment shall inform the taxpayer of this fact, and that the report
of investigation submitted by the Revenue Officer conducting the audit shall be
given due course.
The formal letter of demand calling for payment of the taxpayer’s deficiency tax or
taxes shall state the fact, the law, rules and regulations or jurisprudence on which
the assessment is based, otherwise the formal letter of demand and the notice of
assessment shall be void.
Formality of Control Number
Formality of a control number in the assessment notice is not a requirement for its
validity but rather the contents thereof which should inform the taxpayer of the
declaration of deficiency tax against said taxpayer.
Both the formal letter of demand and the notice of assessment shall be void if the
former failed to state the fact, the law, rules and regulations or jurisprudence on
which the assessment is based, which is a mandatory requirement under Section
228 of the NIRC.
Immunity from Audit and Investigation
R No. 2-99, to which ERAP is under, explained in its Policy Statement that
considering the scarcity of financial and human resources as well as the time
constraints within which the Bureau has to “clean the Bureau’s backlog of unaudited
tax returns in order to keep updated and be focused with the most current
accounts” in preparation for the full implementation of a computerized tax
administration, the said revenue regulation was issued “providing for last priority in
audit and investigation of tax returns” to accomplish the said objective “without,
however, compromising the revenue collection that would have been generated
from audit and enforcement activities.”

The program named as “Economic Recovery Assistance Payment (ERAP)

Program” granted immunity from audit and investigation of income tax, VAT and
percentage tax returns for 1998. It expressly excluded withholding tax returns
(whether for income, VAT, or percentage tax purposes). Since such immunity from
audit and investigation does not preclude the collection of revenues generated from
audit and enforcement activities, it follows that the Bureau is likewise not barred
from collecting any tax deficiency discovered as a result of tax fraud investigations.
Respondent Secretary’s opinion that RR No. 2-99 contains the feature of a tax
amnesty is thus misplaced.

Tax Amnesty

Tax amnesty is a general pardon to taxpayers who want to start a clean tax slate. It
also gives the government a chance to collect uncollected tax from tax evaders
without having to go through the tedious process of a tax case.
Even assuming arguendo that the issuance of RR No. 2-99 is in the nature of tax
amnesty, it bears noting that a tax amnesty is never favored nor presumed in law.

If tax amnesty is granted by statute, the terms of the amnesty like that of a tax
exemption must be construed strictly against the taxpayer and liberally in favor of
the taxing authority.

Estoppel
The State can never be in estoppel and this is particularly true in matters involving
taxation.

83.   FEBTC v. CIR, G.R. No. 138919, May 2, 2006

FACTS:
Petitioner FEBTC filed with BIR an application for a tax credit/tax refund of alleged
excess payments of its gross receipts tax. FEBTC claimed it had overpaid its GRT
for the 3rd and 4th qtrs of 1994 and the entire 1995 amounting to P14,816,373.00.
Since no action was taken by the CIR on its claim, petitioner filed a case in the CTA
on October 18, 1996 to comply with the two-year reglementary period and avoid the
prescription of its action. On July 30, 1998, the CTA rendered a decision denying
the claim for lack of evidence. It appears that petitioner failed to file its formal offer
of evidence in the CTA, constraining the tax court to rule in favor of the CIR. As
explained by the CTA: …Its repeated non-appearance and failure to comply with
court procedures such as the filing of a formal offer of evidence ad memorandum
only serve to weaken, if not put a death knell, to its claim for refund.

ISSUE:
WON the bank was able to prove its entitlement to the refund.

RULING:
We deny the petition and rule against the FEBTC on two points.
First, well-settled is the rule that courts cannot consider evidence which has
not been formally offered. Parties are required to inform the courts of the purpose of
introducing their respective exhibits to assist the latter in ruling on their admissibility
in case an objection thereto is made. Without a formal offer of evidence, courts are
constrained to take no notice of the evidence even if it has been marked and
identified. Needless to say, the failure of petitioner to make a formal offer of
evidence was detrimental to its cause.
A tax refund is in the nature of tax exemption which must be construed
strictissimi juris against the taxpayer. To stress, the taxpayer must present
convincing evidence to substantiate a claim for refund. Without any documentary
evidence on record, petitioner failed to discharge the burden of proving its right to a
tax credit/tax refund. Therefore, the CTA and CA correctly denied its claim.

87.   Asia International v. Parayno, 540 SCRA 536 (2007)

FACTS:
ISSUE:
RULING:

2.       City of Davao and Bella Linda Tanjili v. Randy Allied Ventures, Inc., G.R. No.
241697, July 29, 2019

FACTS:
ISSUE:
RULING:

6.       Alejandro Ty v. Hon. Trampe & Municipal Assessor of Pasig, GR 117577,

December 1, 1995
FACTS:
ISSUE:
RULING:

10.   Phil. Match Co., Ltd. v. City of Cebu, 81 SCRA 99, January 18, 1999 (situs of
payment of local business tax)

FACTS:
ISSUE:
RULING:

14.   Yamane v. BA Lepanto Condo. Corp., SC GR 154993, October 25, 2005

FACTS:
ISSUE:
RULING:

18.   Consolidated cases of City of Manila et al vs RTC et al GR 124855 Dec. 10,

2014

FACTS:
ISSUE:
RULING:

22.   Michigan Holdings Inc. vs City Treasurer of Makati City CTA 1093 June 17,
2015

FACTS:
ISSUE:
RULING:

26.   The City Government of Calamba vs. The City of Makati and Fuji-Haya
International Corporation CTA (En Banc) Case No. 1829 promulgated 2 January
2020

FACTS:
ISSUE:
RULING:
4.       Manila International Airport Authority v. Court of Appeals, GR No. 155650,
July20, 2006

FACTS:

MIAA received Final Notices of Real Estate Tax Delinquency from the City of
Parañaque for the taxable years 1992 to 2001. MIAA’s real estate tax delinquency
was estimated at P624 million.

The City of Parañaque, through its City Treasurer, issued notices of levy and
warrants of levy on the Airport Lands and Buildings. The Mayor of the City of
Parañaque threatened to sell at public auction the Airport Lands and Buildings
should MIAA fail to pay the real estate tax delinquency.

MIAA filed with the Court of Appeals an original petition for prohibition and
injunction, with prayer for preliminary injunction or temporary restraining order. The
petition sought to restrain the City of Parañaque from imposing real estate tax on,
levying against, and auctioning for public sale the Airport Lands and Buildings.

Paranaque’s Contention: Section 193 of the Local Government Code expressly

withdrew the tax exemption privileges of “government-owned and-controlled
corporations” upon the effectivity of the Local Government Code. Respondents also
argue that a basic rule of statutory construction is that the express mention of one
person, thing, or act excludes all others. An international airport is not among the
exceptions mentioned in Section 193 of the Local Government Code. Thus,
respondents assert that MIAA cannot claim that the Airport Lands and Buildings are
exempt from real estate tax.

MIAA’s contention: Airport Lands and Buildings are owned by the Republic. The
government cannot tax itself. The reason for tax exemption of public property is that
its taxation would not inure to any public advantage, since in such a case the tax
debtor is also the tax creditor.

ISSUE:
WON Airport Lands and Buildings of MIAA are exempt from real estate tax under
existing laws? Yes. Ergo, the real estate tax assessments issued by the City of
Parañaque, and all proceedings taken pursuant to such assessments, are void.

RULING:
1. MIAA is Not a Government-Owned or Controlled Corporation

MIAA is not a government-owned or controlled corporation but an instrumentality of

the National Government and thus exempt from local taxation.

MIAA is not a stock corporation because it has no capital stock divided into shares.
MIAA has no stockholders or voting shares.

MIAA is also not a non-stock corporation because it has no members. A non-stock

corporation must have members.

MIAA is a government instrumentality vested with corporate powers to perform

efficiently its governmental functions. MIAA is like any other government
instrumentality, the only difference is that MIAA is vested with corporate powers.

When the law vests in a government instrumentality corporate powers, the

instrumentality does not become a corporation. Unless the government
instrumentality is organized as a stock or non-stock corporation, it remains a
government instrumentality exercising not only governmental but also corporate
powers. Thus, MIAA exercises the governmental powers of eminent domain, police
authority and the levying of fees and charges. At the same time, MIAA exercises “all
the powers of a corporation under the Corporation Law, insofar as these powers are
not inconsistent with the provisions of this Executive Order.”

2. Airport Lands and Buildings of MIAA are Owned by the Republic

a. Airport Lands and Buildings are of Public Dominion

The Airport Lands and Buildings of MIAA are property of public dominion and
therefore owned by the State or the Republic of the Philippines.

No one can dispute that properties of public dominion mentioned in Article 420 of
the Civil Code, like “roads, canals, rivers, torrents, ports and bridges constructed by
the State,” are owned by the State. The term “ports” includes seaports and airports.
The MIAA Airport Lands and Buildings constitute a “port” constructed by the State.
Under Article 420 of the Civil Code, the MIAA Airport Lands and Buildings are
properties of public dominion and thus owned by the State or the Republic of the
Philippines.

The Airport Lands and Buildings are devoted to public use because they are used
by the public for international and domestic travel and transportation. The fact that
the MIAA collects terminal fees and other charges from the public does not remove
the character of the Airport Lands and Buildings as properties for public use.
The charging of fees to the public does not determine the character of the property
whether it is of public dominion or not. Article 420 of the Civil Code defines property
of public dominion as one “intended for public use.” The terminal fees MIAA
charges to passengers, as well as the landing fees MIAA charges to airlines,
constitute the bulk of the income that maintains the operations of MIAA. The
collection of such fees does not change the character of MIAA as an airport for
public use. Such fees are often termed user’s tax. This means taxing those among
the public who actually use a public facility instead of taxing all the public including
those who never use the particular public facility.

b. Airport Lands and Buildings are Outside the Commerce of Man

The Court has also ruled that property of public dominion, being outside the
commerce of man, cannot be the subject of an auction sale.

Properties of public dominion, being for public use, are not subject to levy,
encumbrance or disposition through public or private sale. Any encumbrance, levy
on execution or auction sale of any property of public dominion is void for being
contrary to public policy. Essential public services will stop if properties of public
dominion are subject to encumbrances, foreclosures and auction sale. This will
happen if the City of Parañaque can foreclose and compel the auction sale of the
600-hectare runway of the MIAA for non-payment of real estate tax.

c. MIAA is a Mere Trustee of the Republic

MIAA is merely holding title to the Airport Lands and Buildings in trust for the
Republic. Section 48, Chapter 12, Book I of the Administrative Code allows
instrumentalities like MIAA to hold title to real properties owned by the Republic. n
MIAA’s case, its status as a mere trustee of the Airport Lands and Buildings is
clearer because even its executive head cannot sign the deed of conveyance on
behalf of the Republic. Only the President of the Republic can sign such deed of
conveyance.

d. Transfer to MIAA was Meant to Implement a Reorganization

The transfer of the Airport Lands and Buildings from the Bureau of Air
Transportation to MIAA was not meant to transfer beneficial ownership of these
assets from the Republic to MIAA. The purpose was merely toreorganize a division
in the Bureau of Air Transportation into a separate and autonomous body. The
Republic remains the beneficial owner of the Airport Lands and Buildings. MIAA
itself is owned solely by the Republic. No party claims any ownership rights over
MIAA’s assets adverse to the Republic.

e. Real Property Owned by the Republic is Not Taxable

Sec 234 of the LGC provides that real property owned by the Republic of the
Philippines or any of its political subdivisions except when the beneficial use thereof
has been granted, for consideration or otherwise, to a taxable person following are
exempted from payment of the real property tax.

However, portions of the Airport Lands and Buildings that MIAA leases to private
entities are not exempt from real estate tax. For example, the land area occupied by
hangars that MIAA leases to private corporations is subject to real estate tax.

8.       NAPOCOR vs Province of Pangasinan CTA Case 937 Nov 11, 2013)

FACTS:
ISSUE:
RULING:
3.       Pilipinas Shell Petroleum Corporation v Commissioner of Customs, G.R. No.
195876, December 05, 2016

FACTS:
The omnibus motion is anchored primarily on the alleged applicability of Chevron
Philippines, Inc. vs. Commissioner of the Bureau of Customs to the case at bar.
However, the court desisted from applying the doctrine laid down in Chevron
considering that the facts and circumstances therein are not in all fours with those
obtaining in the instant case. Thus, Chevron is not a precedent to the case at bar.
The facts and circumstances between the jurisprudence relied upon and the
pending controversy should not diverge on material points. But as clearly explained
in the assailed December 5, 2016 decision, the main difference between Chevron
and the case at bar lies in the attendance of fraud. In Chevron, evidence on record
established that Chevron committed fraud in its dealings. On the other hand, proof
that petitioner Pilipinas Shell was just as guilty was clearly wanting. Simply there
was no finding of fraud on the part of petitioner in the case at bar. In his dissent,
Associate Justice Peralta claims that fraud was committed by the petitioner when it
allegedly deliberately incurred delay in filing its Import Entry and Internal Revenue
Declaration in order to avail of the reduced tariff duty on oil importations, but as
exhaustively discussed in December 5, 2016 decision. The document was never
formally offered as evidence before the Court of Tax Appeals, therefore, bereft of
evidentiary value. Resultantly, no scintilla of proof was ever offered in evidence by
respondent Commissioner of Customs to substantiate the claim that Pilipinas Shell
acted in fraudulent manner. The allegations of fraud on the part of Pilipinas Shell is
mere conjecture and purely speculative. In the case at bar, petitioner filed its Import
Entry and Internal Revenue Declaration and paid the import duty of its shipments
on May 23, 1996. However, it only received a demand letter from public respondent
on July 27, 2000, or more than 4 years later. By this time, the one-year prescriptive
period had already elapsed. Justice Peralta and the respondent claim that the
government is no longer collecting tariff duties. Rather, it is exercising its ownership
right over the shipments, which were allegedly deemed abandoned by petitioner
because of the latter’s failure to timely file the IEIRD.

ISSUE:
Whether or not petitioner acted in fraudulent manner for ipso facto abandonment
doctrine be applied?

RULING:
No. Public respondent cannot harp on the Chevron ruling to excuse compliance
from the due notice requirement before the imported articles can be deemed
abandoned, for to do so would only downplay the Court’s finding anent the non-
attendance of fraud. It becomes abundantly clear that the notice requirement as
mandated in CMO 15-94 cannot be excused unless fraud is established. Fraud
being absent on the part of petitioner Pilipinas Shell, the ipso facto abandonment
doctrine cannot operate within the factual milieu of the instant case.

7.       BOC vs Devanadera, GR 193253, 769 Phil 231-278

FACTS:
ISSUE:
RULING: