Commissioner of Internal Revenue versus

The Insular Life Assurance Co. LTD.,

G.R. No. 197192, June 4, 2014
First Division, Reyes, J.

Facts: The Insular Life Insurance (Insular Life) is a registered corporation and
non-stock mutual life insurer with the Securities and Exchange Commission.
Insular Life received an assessment notice with Formal Letter of Demand
showing deficiency Documentary Stamp Taxes (DST) on its premiums on direct
business for the calendar yr of 2002. Insular Life filed its protest, yet denied by
the CIR in a final decision on disputed assessment for lack of factual and legal
bases. In the CTA, the decision was reversed exempting Insular Life from DST.
The MR was denied, and at the CTA en banc, the petition for review was
likewise denied hence a petition for review on certiorari to the Supreme Court.
The CIR contends that since Insular Life is not registered with the Cooperative
Development Authority (CDA) he is not considered as a cooperative company
and is not entitled to the DST Exemption.

Issue(s): Whether the CTA En banc erred in exempting Insular Life from DST.

Decision: No, Petition denied. The Court has pronounced in Republic of the
Philippines v. Sunlife Assurance Company of Canada9 that "[u]nder the Tax
Code although respondent is a cooperative, registration with the CDA is not
necessary in order for it to be exempt from the payment of both percentage
taxes on insurance premiums, under Section 121; and documentary stamp
taxes on policies of insurance or annuities it grants, under Section 199. The said
provision states that, a cooperative company who grants policies of insurance
or annuities among others, shall be exempt from DST. In the Case of Sunlife
Assurance the Court justified that registration with CDA was not essential in
three respects: first, no provision in the tax code requires cooperative
companies to register with the CDA, Second; the Cooperative Code requires
registration but only applies to organization composed primarily of small
producers and consumers who voluntarily joined to form a business enterprise
that they themselves owned, controlled, and patronized, and only to those
who were previously covered by such law; Third, the Insurance Code does not
require registration with the CDA.1âwphi1 "The provisions of this Code primarily
govern insurance contracts; only if a particular matter in question is not
specifically provided for shall the provisions of the Civil Code on contracts and
special laws govern. Stare decisis et non quieta movere.

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