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 PART ONE: COMMERCIAL LAW
I. BUSINESS ORGANIZATIONS

1. AAA and BBB were dummy directors/incorporators of CyberOne PH, a domestic corporation
organized and existing under Philippine laws. CyberOne AU is a foreign corporation organized and
existing under the laws of Australia which owns the majority shares of CyberOne PH. AAA and BBB
filed a complaint against CyberOne PH and CyberOne AU for illegal dismissal. They contended that
CyberOne AU exercised a certain degree of control over the finances, policies and practices of
CyberOne PH. Will the doctrine of piercing the veil of corporate fiction automatically apply against
CyberOne PH?
No. The doctrine of piercing the corporate veil applies only in three basic instances, namely: (a) when the
separate distinct corporate personality defeats public convenience, as when the corporate fiction is used as a
vehicle for the evasion of an existing obligation; (b) in fraud cases, or when the corporate entity is used to
justify a wrong, protect a fraud, or defend a crime; or (c) is used in alter ego cases, i.e., where a corporation is
essentially a farce, since it is a mere alter ego or business conduit of a person, or where the corporation is so
organized and controlled and its affairs conducted as to make it merely an instrumentality, agency, conduit or
adjunct of another corporation. The application of the doctrine of piercing the corporate veil is unwarranted in
the present case. First, no evidence was presented to prove that CyberOne PH was organized for the
purpose of defeating public convenience or evading an existing obligation. Second, petitioners failed to allege
any fraudulent acts committed by CyberOne PH in order to justify a wrong, protect a fraud, or defend a crime.
Lastly, the mere fact that CyberOne PH's major stockholders are CyberOne AU and respondent Mikrut does
not prove that CyberOne PH was organized and controlled and its affairs conducted in a manner that made it
merely an instrumentality, agency, conduit or adjunct of CyberOne AU. In order to disregard the separate
corporate personality of a corporation, the wrongdoing must be clearly and convincingly established. (Gesolgon
vs. Cyberone Ph., Inc., [G.R. No. 210741. October 14, 2020.])

2. AAA filed a complaint for illegal dismissal against CCC Corp. and its officers. However, AAA failed to
allege and credibly show that the officers, being the director or the manager, assented to patently
unlawful acts of CCC Corp., or that they were guilty of gross negligence or bad faith in the
performance of their official duties. Can the officers of CCC Corp. be held liable for illegal dismissal of
AAA despite the failure of AAA to allege their unlawful acts?
No, the officers of CCC Corp. cannot be held liable. Basic is the rule that a corporation has a separate and
distinct personality apart from its directors, officers, or owners. In exceptional cases, courts find it proper to
breach this corporate personality in order to make directors, officers, or owners solidarily liable for the
companies' acts. Under Section 31 of the Corporation Code, directors or officers who willfully and knowingly
assent to patently unlawful acts of the corporation, who are guilty of gross negligence or bad faith in
managing the corporation's affairs, or who acquire personal interest in conflict with their duties shall be
solidarily liable for all damages suffered by the corporation. In this case, AAA did not allege any specific act of
the individual private respondents to warrant a finding of solidary liability. (Teletech Customer Care Management
Philippines, Inc. vs. Gerona, Jr., [G.R. No. 219166. November 10, 2021.])

3. May corporate officers be held personally liable for the obligations of the corporation?
Yes. Settled is the rule that a director or officer shall only be personally liable for the obligations of the
corporation, if the following conditions concur: (1) the complainant alleged in the complaint that the director or
officer assented to patently unlawful acts of the corporation, or that the officer was guilty of gross negligence
or bad faith; and (2) the complainant clearly and convincingly proved such unlawful acts, negligence or bad
faith." Basic is the principle that a corporation is vested by law with a personality separate and distinct from
that of each person composing or representing it. Equally fundamental is the general rule that corporate
officers cannot be held personally liable for the consequences of their acts, for as long as these are for and on
behalf of the corporation, within the scope of their authority and in good faith. The separate corporate
personality is a shield against the personal liability of corporate officers, whose acts are properly attributed to
the corporation. Personal liability of a corporate director, trustee or officer along (although not necessarily)
with the corporation may so validly attach, as a rule, only when: 1. He assents (a) to a patently unlawful act of
the corporation, or (b) for bad faith or gross negligence in directing its affairs, or (c) for conflict of interest,
resulting in damages to the corporation, its stockholders or other persons; 2. He consents to the issuance of
watered stocks or who, having knowledge thereof, does not forthwith file with the corporate secretary his
written objection thereto; 3. He agrees to hold himself personally and solidarily liable with the corporation; or
4. He is made, by a specific provision of law, to personally answer for his corporate action. (Atienza vs. Golden
Ram Engineering Supplies & Equipment Corporation, [G.R. No. 205405. June 28, 2021.])

4. What are the two tests to determine whether a foreign corporation is doing business in the
Philippines?
Substance test Continuity test
Whether the foreign corporation is continuing the The term [doing business] implies a continuity of
body of the business or enterprise for which it was commercial dealings and arrangements, and
organized or whether it has substantially retired from contemplates, to that extent, the performance of
it and turned it over to another. acts or works or the exercise of some of the
functions normally incident to, and in the
progressive prosecution of, the purpose and object
of its organization.
(Magna Ready Mix Concrete Corporation vs. Andersen Bjornstad Kane Jacobs, Inc., G.R. No. 196158. January 20, 2021.)

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5. AAA, a corporation organized and existing under the laws of the Philippines, and BBB, a corporation
organized and existing under the laws of the State of Washington, USA, which has no license in doing
business in the Philippines, entered into a contract. Can AAA challenge BBB’s legal capacity to sue?
No, BBB has no legal capacity to sue for doing business in the Philippines without procuring the necessary
license. A corporation has legal status only in the state that granted it personality. Hence, a foreign
corporation has no personality in the Philippines, much less legal capacity to file a case, unless it procures a
license as provided by law. However, AAA was already estopped from challenging BBB's legal capacity when
it entered into a contract with it. The doctrine of estoppel states that the other contracting party may no longer
challenge the foreign corporation's personality after acknowledging the same by entering into a contract with
it. (Magna Ready Mix Concrete Corporation vs. Andersen Bjornstad Kane Jacobs, Inc., [G.R. No. 196158. January 20, 2021.])

6. What is the concept of isolated transaction where a foreign corporation may sue without license?
The phrase "isolated transaction" is a transaction or series of transactions set apart from the common
business of a foreign enterprise in the sense that there is no intention to engage in a progressive pursuit of
the purpose and object of the business organization. Whether a foreign corporation is "doing business" does
not necessarily depend upon the frequency of its transactions, but more upon the nature and character of the
transactions. A single act may be considered as either doing business or an isolated transaction depending
on its nature. It may be considered as doing business if it implies a continuity of commercial dealings and
contemplates the performance of acts or the exercise of functions normally incidental to and in the
progressive pursuit of its purpose. Contrarily, it may be considered as an isolated transaction if it is different
from or not related to the common business of the foreign corporation in the sense that there is no objective to
increasingly pursue its purpose or object. And as stated, a license is not required if the foreign corporation is
suing on an isolated transaction. (Magna Ready Mix Concrete Corporation vs. Andersen Bjornstad Kane Jacobs, Inc., [G.R. No.
196158. January 20, 2021.])

7. BBB, a corporation organized and existing under the laws of the State of Washington, USA, sued
AAA, a corporation organized and existing under the laws of the Philippines, for breach of their
contract which shows that BBB was to render professional services to AAA for a fee. These
professional services included the following: (1) providing master plant site layout and plant design;
(2) providing plant operation procedures and organization matrix; (3) providing plant management
and production staff training; (4) providing plant construction and operation start-up services; and (5)
providing consultation services for developing a precast plant program. BBB alleged in its Complaint
that it was suing on an isolated transaction based on its contract with AAA but admitting at the same
time that it did not have a license to do business in the Philippines. Was BBB indeed suing on an
isolated transaction?
No, BBB was not suing on an isolated transaction. BBB's act of entering into a contract with AAA does not fall
into the category of isolated transactions. BBB was performing acts that were in progressive pursuit of its
business purpose, which involved consultation and design services. Though it was a single transaction, BBB's
act of entering into a contract with AAA constitutes doing business in the Philippines. It cannot be considered
as an isolated transaction because the act is related to BBB's specific business purpose. Thus, in doing
business without a license, BBB had no legal capacity to sue in the Philippines. (Magna Ready Mix Concrete
Corporation vs. Andersen Bjornstad Kane Jacobs, Inc., [G.R. No. 196158. January 20, 2021.])

II. BANKING LAWS

8. Spouses AAA opened a deposit account with Allied Bank. Due to several discrepancies and
transactions, Allied Bank’s Regional Head, Barcelona, ordered the debit of the remaining balance
from the spouses’ account, which resulted in the closure of said account. Allied Bank alleges that it
holds valid title to the account of the Spouses and hence, it had every right to close said account. In
framing its arguments, Allied Bank defines its banking relationship with the Spouses AAA in the
negative as "not that which is ordinarily between a bank and its depositor." The bank asseverates that
it owns the funds which inadvertently found its way into the Spouses AAA's account. Is the argument
of Allied Bank tenable?
No. Republic Act 8791 (RA 8791) or the General Banking Law of 2000 enshrines the fiduciary nature of
banking that requires high standards of integrity and performance. The statute now reflects jurisprudential
holdings that the banking industry is impressed with public interest requiring banks to assume a degree of
diligence higher than that of a good father of a family. Thus, all banks are charged with extraordinary diligence
in the handling and care of its deposits as well as the highest degree of diligence in the selection and
supervision of its employees. The foregoing obligation of banks is absolute and deemed written into every
deposit agreement with its depositors.

What contract, if any, existed between Allied Bank and the Spouses AAA?
There is a deposit agreement between Allied Bank and the Spouses Mario AAA. The savings deposit
agreement between the bank and the depositor is the contract that determines the rights and obligations of
the parties as in a simple loan. In contemplation of the fiduciary nature of a bank-depositor relationship, the
law imposes on the bank a higher standard of integrity and performance in complying with its obligations
under the contract of simple loan, beyond those required of non-bank debtors under a similar contract of
simple loan. (Allied Banking Corporation vs. Spouses Macam, [G.R. No. 200635. February 1, 2021.])

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 III. INSURANCE LAW

9. AAA obtained Compulsory Third Party Liability (CTPL) insurance from BBB, an insurance company,
and Excess Cover for Third Party Bodily and Death Liability from CCC for the same vehicle. Later, he
was involved in an accident and paid PHP100,000 in hospital and medical expenses for the pedestrian
he sideswiped. He filed insurance claims with both BBB and CCC. BBB claims that most of the
expenses are not covered in the schedule of indemnities and should be shouldered by CCC pursuant
to the excess coverage. Meanwhile, CCC contends that it should pay less than BBB because its
liability begins only when the liability of BBB has been exhausted. Were the expenses not covered or
in excess of the limits in the schedule of indemnities for the account of the CTPL insurance provider?
No, these are for the account of the excess coverage provider. The limit of liability with regard to the items
listed in the Schedule of Indemnities is the amount provided therein; the limit of liability with regard to other
kinds of damages not listed in the same Schedule of Indemnities is the total amount of insurance coverage.
The amounts in excess of the limits of liability in the schedule for items listed therein are not covered by the
total coverage. Such excess is already for the personal account of the insured or an excess coverage
provider. Therefore, Stronghold's liability with regard to injuries provided in its policy's Schedule of Indemnities
is subject to the limits provided therein. Any excess will not be for its account, and will be for the account of
the excess coverage provider—Malayan in this case. (Malayan Insurance v. Stronghold Insurance [G.R. No. 203060. June
28, 2021.])

10. A policy condition states that an insured shall give notice to the insurer of any insurance or
insurances already effected, or which may subsequently be effected, covering any of the property or
properties of said insured, and for failure to do so, in case of loss or damage, all benefits under the
policy shall be deemed forfeited. Is the insured entitled to the proceeds of the fire insurance policy
from two different insurers who insured the same property under the same peril despite the former’s
non-disclosure of co-insurance under their insurance contracts?
No. Where the insurance policy specifies as a condition the disclosure of existing co-insurers, non-disclosure
thereof is a violation that entitles the insurer to avoid the policy. This condition is common in fire insurance
policies and is known as the "other insurance clause." (Multi-Ware Manufacturing Corporation vs. Cibeles Insurance
Corporation, [G.R. No. 230528. February 1, 2021.])

11. Where the parties to an insurance contract stipulates that the insurance claim must be brought within
12 months from receipt of notice of such rejection. Does the 12-month period refer to 360 days?
No, it is 365 days. Section 3 of the Insurance Code provides that a condition, stipulation or agreement in any
policy of insurance, limiting the time for commencing an action thereunder to a period of less than one year
from the time when the cause of action accrues, is void. This is also consistent with Article 13 of the Civil
Code which provides that when the law speaks of a year, it is understood to be equivalent to 365 days. (Alpha
Plus International Enterprises Corp., vs. Philippine Charter Insurance Corp., [G.R. No. 203756. February 10, 2021.])

12. When does the one-year prescription commence in bringing an insurance claim from the insurance
company?
Prescriptive period for the insured's action for indemnity should be reckoned from the "final rejection" of the
claim. The "final rejection" simply means denial by the insurer of the claims of the insured and not the
rejection or denial by the insurer of the insured's motion or request for reconsideration. Hence, the rejection
referred to should be construed as the rejection in the first instance. (Alpha Plus International Enterprises Corp., vs.
Philippine Charter Insurance Corp., [G.R. No. 203756. February 10, 2021.])

13. AAA Corporation seeks to recover fire insurance indemnity from BBB, an insurance company. AAA
filed a collection suit against BBB where it prayed inter alia, for actual damages without specifying
any definite amount and for legal interest. It later filed an Amended Complaint praying for similar
reliefs as stated in its original complaint but, this time, it specifically claimed the amount of P300
million as actual damages and that respondents be ordered to pay "two (2) times the legal interest
per annum on the proceeds of the policies for the duration of the delay." What is an exception to the
settled rule that the filing of an amended pleading for an insurance claim does not retroact to the date
of the filing of the original pleading; hence, the statute of limitation runs until the submission of the
amendment? Does the exception apply in the present case?
An exception is when the amended pleading introduced new demands that were not specified and averred
expressly in the original complaint. In the present case, the exception does not apply to allow the period of
prescription to run and for prescription to ultimately set in. AAA essentially introduced new demands against
BBB in their Amended Complaint. Verily, as the Amended Complaint superseded the original complaint of
petitioner, the suit of the latter is deemed to have been commenced on the date of filing of the Amended
Complaint. (Alpha Plus International Enterprises Corp., vs. Philippine Charter Insurance Corp., [G.R. No. 203756. February 10, 2021.])

IV. INTELLECTUAL PROPERTY CODE (R.A. No. 8293)

14. What is the effect of a certificate of registration of a mark?
A certificate of registration of a mark is prima facie evidence of the validity of the registration, the registrant's
ownership of the mark, and of the registrant's exclusive right to use the same in connection with the goods or

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 services and those that are related thereto specified in the certificate. (Kolin Electronics Co., Inc. vs. Taiwan Kolin Corp.
LTD, [G.R. No. 221347. December 1, 2021.])

15. When can the presumption of validity of the certificate of registration of a mark be challenged?
The presumption may be challenged and rebutted when an adverse party, in the appropriate action, can show
that the certificate of registration is not reflective of ownership of the holder, such as when: (1) the first
registrant has acquired ownership of the mark through registration but subsequently lost the same due to
non-use or abandonment (e.g., failure to file the Declaration of Actual Use); (2) the registration was done in
bad faith; (3) the mark itself becomes generic; (4) the mark was registered contrary to the IP Code (e.g., when
a generic mark was successfully registered for some reason); or (5) the registered mark is being used by, or
with the permission of, the registrant so as to misrepresent the source of the goods or services on or in
connection with which the mark is used. (Kolin Electronics Co., Inc. vs. Taiwan Kolin Corp. LTD, [G.R. No. 221347. December
1, 2021.])

16. Does AAA’s right to exclusively use the "KOLIN" mark under Class 35 for the business of
manufacturing, importing, assembling, or selling electronic equipment or apparatus necessarily
include the right to register its domain name containing KOLIN as the dominant feature?
Yes. Having been granted the right to exclusively use the "KOLIN" mark for the business of manufacturing,
importing, assembling, or selling electronic equipment or apparatus, AAA’s application for registration of its
domain name containing the "KOLIN" mark for the same goods and services as its Class 35 registration for
"KOLIN" is merely an exercise of its right under its Class 35 registration. In today's internet-wired market,
selling electronic equipment or apparatus will ideally involve the registration of a domain name to establish an
online presence. Information on the products sold by an enterprise must necessarily be provided in all
avenues, whether through print, media, or online. (Kolin Electronics Co., Inc. vs. Taiwan Kolin Corp. LTD, [G.R. No. 221347.
December 1, 2021.])

17. What are the elements of Unfair Competition?

The essential elements of an action for unfair competition are: (1) confusing similarity in the general
appearance of the goods, and (2) intent to deceive the public and defraud a competitor. The confusing
similarity may or may not result from similarity in the marks, but may result from other external factors in the
packaging or presentation of the goods. Likelihood of confusion of goods or business is a relative concept, to
be determined only according to peculiar circumstances of each case.53 The element of intent to deceive and
to defraud may be inferred from the similarity of the appearance of the goods as offered for sale to the public.
(Kho vs. Summerville General Merchandising & Co., Inc., [G.R. No. 213400. August 4, 2021.])

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 PART TWO: TAXATION LAW
I. GENERAL PRINCIPLES
18. What is tax amnesty?
Tax amnesty refers to the “absolute waiver by a sovereign of its right to collect taxes and power to impose
penalties on persons or entities guilty of violating a tax law. Tax amnesty aims to grant a general reprieve to
tax evaders who wish to come clean by giving them an opportunity to straighten out their records. (Bureau of
Internal Revenue vs. Cagang, G.R. No. 230104. March 16, 2022.)

19. How should tax amnesties be construed?

A tax amnesty, much like a tax exemption, is never favored or presumed in law. The grant of a tax amnesty,
similar to a tax exemption, must be construed strictly against the taxpayer and liberally in favor of the taxing
authority. (Bureau of Internal Revenue vs. Cagang, G.R. No. 230104. March 16, 2022.)

20. Is AAA entitled to the amnesty tax under Republic Act 9480 (RA 9480) for the withholding taxes
assessed against it?
No. Withholding taxes are not covered by the amnesty program. AAA is disqualified to avail of the tax
amnesty for its withholding tax liabilities in accordance with Section 8(a) of RA 9480 and Section 5(a) of its
IRR. (Bureau of Internal Revenue vs. Cagang, G.R. No. 230104. March 16, 2022.)

21. In 2005, the Bureau of Internal Revenue (BIR) filed with the Department of Justice (DOJ) a criminal
complaint for violations of Sections 254 and 255 of the National Internal Revenue Code (NIRC) against
AAA. In 2008, AAA availed of tax amnesty. In 2009, Informations were filed against him before the
Court of Tax Appeals (CTA). Is she immune from criminal liability?
Yes. She was not disqualified to avail of the tax amnesty because at the time she availed of it, there was no
pending criminal case against her. And even though there was already a pending criminal complaint against
her before the DOJ such fact cannot disqualify her from availing of the tax amnesty because this is not
included in the list of exceptions under Section 8 of Republic Ac 9480 (RA 9480). Under Section 8(e) of RA
9480, only those with pending criminal cases in court for tax evasion and other criminal offenses under the
NIRC, and the felonies of frauds, illegal exactions and transactions, and malversation of public funds and
property, under Chapters III and IV of Title VII of the Revised Penal Code, are excluded. People vs. Tuyay, (G.R.
No. 206579. December 1, 2021)

II. NATIONAL TAXATION

22. Unioil received a Formal Letter of Demand and Final Assessment Notice (FAN) without first receiving
a Preliminary Assessment Notice (PAN). Unioil filed its protest to the FAN and thereafter filed a
Petition for Review with the Court of Tax Appeals (CTA) considering the inaction of Commissioner of
Internal Revenue (CIR). Was Unioil denied due process?
Yes. The CIR's failure to comply with the notice requirements under Section 228 of the 1997 NIRC effectively
denied Unioil of its right to due process. Consequently, the CIR's assessment was void. (Commissioner of Internal
Revenue vs. Unioil Corporation, G.R. No. 204405, August 4, 2021)

23. What are the rules on the determination of the prescriptive period for filing a tax refund or credit of
unutilized input VAT under Section 112 of the Tax Code?
(1) An administrative claim must be filed with the CIR within two years after the close of the taxable quarter
when the zero-rated or effectively zero rated sales were made.
(2) The CIR has 120 days from the date of submission of complete documents in support of the administrative
claim within which to decide whether to grant a refund or issue a tax credit certificate. The 120-day period
may extend beyond the two-year period from the filing of the administrative claim if the claim is filed in the
later part of the two-year period. If the 120-day period expires without any decision from the CIR, then the
administrative claim may be considered to be denied by inaction.
(3) A judicial claim must be filed, with the CTA within 30 days from the receipt of the CIR's decision denying
the administrative claim or from the expiration of the 120-day period without any action from the CIR.
(4) All taxpayers, however, can rely on BIR Ruling No. DA-489-03 from the time of its issuance on 10
December 2003 up to its reversal by this Court in Aichi on 6 October 2010, as an exception to the
mandatory and jurisdictional 120+30 day periods. It expressly provides that a taxpayer-claimant may seek
judicial relief with the CTA by filing a petition for review without waiting for the 120-day period to lapse
(Hedcor Sibulan, Inc. vs. Commissioner of Internal Revenue, G.R. No. 202093. September 15, 2021 citing Mindanao II Geothermal
Partnership v. Commissioner of Internal Revenue, G.R. No. 193301, March 11, 2013; see also Energy Development Corporation vs.
Commissioner of Internal Revenue, G.R. No. 203367. March 17, 2021; Harte-Hanks Philippines, Inc. vs. Commissioner of Internal
Revenue, G.R. No. 205189. March 7, 2022)

Note: TRAIN law amended Section 112, reducing the period for the CIR to decide from 120 days to 90 days.

24. On January 21, 2010, AAA filed its original Quarterly Value Added Tax (VAT) Return for the fourth
quarter of 2009. Subsequently, on September 13, 2011, it filed an amended Quarterly VAT Return for its
total zero-rated sales, importation of goods, and purchases of services. AAA filed its claim for
refund/tax credit on September 28, 2011, attaching therewith the necessary documents. The CIR failed
to act on AAA's administrative claim for refund which prompted AAA to file a Petition for Review with
the CTA on January 27, 2012. Was AAA’s appeal before CTA for tax refund or credit seasonably filed?
Yes. Section 112(c) of the National Internal Revenue Code provides that the running of the 120-day period for
the CIR to decide the claim for refund commences from the time of the submission of complete documents in

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 support of the tax refund application. Here, AAA filed its application for tax refund, attaching therewith the
necessary documents, on September 28, 2011. Within the period of 120 days from September 28, 2011, the
CIR could have notified AAA, by way of a request, to submit additional documents which he/she deems
necessary. Considering that no notice was given by the CIR or no other action was taken within the said 120
days, AAA had 30 days from January 26, 2012, the expiration of the 120-day period, or until February 26,
2012, to appeal to the CTA. (Commissioner of Internal Revenue vs. Philex Mining Corporation, G.R. No. 218057. January 18,
2021.)

25. In filing for tax refund or credit with the CIR, which requires complete documents, who will determine
the completeness of the documents submitted?
For purposes of determining when the supporting documents have been completed - it is the taxpayer who
ultimately determines when complete documents have been submitted for the purpose of commencing and
continuing the running of the 120-day period. The taxpayer may have already completed the necessary
documents the moment he filed his administrative claim, in which case, the 120-day period is reckoned from
the date of filing. The taxpayer may have also filed the complete documents on the 30th day from filing of his
application, pursuant to Revenue Memorandum Circular (RMC) No. 49-2003. He may very well have filed his
supporting documents on the first day he was notified by the BIR of the lack of necessary documents. In such
cases, the 120-day period is computed from the date the taxpayer is able to submit the complete documents
in support of his application.

Lest it be misunderstood, the benefit given to the taxpayer to determine when it should complete its
submission of documents is not unbridled. Under RMC No. 49-2003, if in the course of the investigation and
processing of the claim, additional documents are required for the proper determination of the legitimacy of
the claim, the taxpayer-claimant shall submit such documents within thirty (30) days from the request of the
investigating/processing office. Notice, by way of a request from the tax collection authority to produce the
complete documents, is essential. (Commissioner of Internal Revenue vs. Philex Mining Corporation, G.R. No. 218057. January
18, 2021.)

26. Is the submission of the subsidiary sales journal and subsidiary purchase journal indispensable to
support a claim for tax refund?
No. Section 112(A) of the NIRC, which enumerates the requisites for a taxpayer to be entitled to a tax refund
or credit, does not require subsidiary journals as part of the substantiation requirements. The particulars
recorded in the subsidiary journals do not affect the character of an invoice or receipt as a "VAT invoice/official
receipt." The law does not require that subsidiary journals where the sales and purchases (and the output
taxes and their corresponding input taxes) were recorded, are also kept. Indeed, courts may not, in the guise
of interpretation, enlarge the scope of a statute and include therein situations not provided nor intended by the
lawmakers. (Commissioner of Internal Revenue vs. Philex Mining Corporation, G.R. No. 218057. January 18, 2021.)

27. What is the period provided by law for BIR to assess and collect internal revenue taxes?
Section 203 of the NIRC, as amended, provides for a period of three (3) years for the BIR to assess and
collect internal revenue taxes, counted from the last day prescribed by law for the filing of the return or from
the day the return was filed, whichever comes later. Consequently, any assessment issued after the expiration
of such period is no longer valid and effective. (La Flor Dela Isabela, Inc. vs. Commissioner of Internal Revenue, G.R. No.
202105. April 28, 2021)

28. Can the government still collect deficiency taxes when the assessment is issued to the taxpayer
beyond the prescriptive period?
No. Section 222(b) of the NIRC provides that any internal revenue tax which has been assessed within the
period of limitation may be collected by distraint or levy or by a proceeding in court within five years from the
assessment. The law is clear that for a collection to be valid, the assessment must be within the period of
limitation. Essentially, when the assessment is issued beyond the prescriptive period, the government's right
to collect deficiency taxes also prescribes. Hence, there is no more basis for its collection save for certain
exceptions. (La Flor Dela Isabela, Inc. vs. Commissioner of Internal Revenue, G.R. No. 202105. April 28, 2021)

29. What are the requirements in filing waivers of the statute of limitations to extend the CIR's period to
assess and collect the deficiency taxes?
BIR issued Revenue Memorandum Order (RMO) No. 20-90, which provides for the guidelines in the proper
execution of the waiver of statute of limitations under the NIRC. It holds that a valid waiver of statute of
limitations must be: (a) in writing; (b) agreed to by both the Commissioner and the taxpayer; (c) before the
expiration of the ordinary prescriptive periods for assessment and collection; and (d) for a definite period
beyond ordinary prescriptive period for assessment and collection. The period agreed upon can still be
extended by subsequent written agreement, provided that it is executed prior to the expiration of the first
period agreed upon.

The Court had invalidated waivers which did not strictly comply with the provisions of RMO No. 20-90 and
Revenue Delegation of Authority Order (RDAO) No. 05-01, such as, but not limited to: (a) failure to state the
specific date within which the BIR may assess and collect revenue taxes; (b) failure to sign by the CIR as
mandated by law or by his duly authorized representative; (c) failure to indicate the date of acceptance to
determine whether the waiver was validly accepted before the expiration of the original three-year period; (d)
failure to furnish the taxpayer of a copy of the waiver; (e) failure to indicate on the original copies of the
waivers the date of receipt by the taxpayer of their file copy; (f) execution of the waivers without the written
authority of the taxpayer's representative to sign the waiver on their behalf; (g) absence of any proof that the

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 taxpayer was furnished a copy of the waiver; (h) a waiver signed by the Assistant Commissioner-Large
Taxpayers Service and not by the CIR; (i) failure to specify the kind and amount of tax due; and (j) a waiver
which refers to a request for extension of time within which to present additional documents and not for
reinvestigation and/or reconsideration of the pending internal revenue case. (La Flor Dela Isabela, Inc. vs.
Commissioner of Internal Revenue, G.R. No. 202105. April 28, 2021)

30. Has AAA's obligation to pay Income Tax (IT) and VAT deficiency been absolved by its availment of the
tax amnesty on October 8. 2007, despite the fact that the CIR already issued the Final Decision on
Disputed Assessment (FDDA) on July 9, 2007?
Yes. Jurisprudence provides that only persons with "tax cases subject of final and executory judgment by the
courts" are disqualified to avail of the Tax Amnesty Program under RA 9480, which means that there must be
a final and executory judgment promulgated by a court. The FDDA issued by the BIR is not a tax case subject
of final and executory judgment by the court as contemplated under Section 8(f) of RA 9480. Hence, even
with the issuance of the subject FDDA, AAA is not disqualified to avail of the immunities and privileges under
RA 9480. (La Flor Dela Isabela, Inc. vs. Commissioner of Internal Revenue, G.R. No. 202105. April 28, 2021)

31. Is the filing of compromise agreement for Expanded Withholding Tax (EWT) and Withholding Tax for
Compensation (WTC) subsequent to the filing for Tax Amnesty under RA 9480 considered an
abandonment of the availment of Tax Amnesty requested?
No, it is not considered as an abandonment of its availment of the tax amnesty under RA 9480. This is
especially when the Tax Amnesty Program does not include its assessed EWT and WTC deficiencies. (La Flor
Dela Isabela, Inc. vs. Commissioner of Internal Revenue, G.R. No. 202105. April 28, 2021)

32. Will estoppel apply as an exception to the statute of limitations on assessment of taxes?
No, the doctrine of estoppel cannot be applied as an exception to the statute of limitations on assessment of
taxes considering that the BIR provides a detailed procedure for the proper execution of waiver which must be
strictly followed. The BIR cannot simply invoke the doctrine of estoppel to conceal its failure to comply with its
own issuances. It cannot just collect taxes based on an already prescribed assessment, even when taxes are
considered the lifeblood of the government. A waiver of the statute of limitations is a derogation of a
taxpayer's right to security against prolonged and unscrupulous investigations. Thus, it must be carefully and
strictly construed. Hence, both the assessment and collection should be made in accordance with law as any
arbitrariness will negate the very reason for government itself. (La Flor Dela Isabela, Inc. vs. Commissioner of Internal
Revenue, G.R. No. 202105. April 28, 2021)

33. What are the requisites for claiming a tax credit or a refund of Credited Withholding Taxes (CWT)?
The requisites for claiming a tax credit or a refund of CWT are as follows: 1) The claim must be filed with the
CIR within the two (2)-year period from the date of payment of the tax; 2) It must be shown on the return that
the income received was declared as part of the gross income; and 3) The fact of withholding must be
established by a copy of a statement duly issued by the payor to the payee showing the amount paid and the
amount of the tax withheld. (Commissioner of Internal Revenue vs. Philippine Bank of Communications, G.R. No. 211348.
February 23, 2022.)

34. AAA filed its administrative claim on April 3, 2009, and its judicial claim before the CTA on April 15,
2009. If its claim covers its Annual Income Tax Return for taxable year 2006, which it filed on April 16,
2007, did it file the administrative claim and judicial claim within the prescribed period?
Yes. Sections 204(C) and 229 of the NIRC provide for a two (2)-year prescriptive period in claiming a tax
credit/refund from the date of the filing of the final adjustment return. The two-year prescriptive period to claim
a refund actually commences to run, at the earliest, on the date of the filing of the adjusted final tax return
because this is where the figures of the gross receipts and deductions have been audited and adjusted,
reflective of the results of the operations of a business enterprise. Thus, it is only when the Adjustment Return
covering the whole year is filed that the taxpayer would know whether a tax is still due or a refund can be
claimed based on the adjusted and audited figures. As applied in this case, AAA's claims were within the
two-year prescriptive period. (Commissioner of Internal Revenue vs. Philippine Bank of Communications, G.R. No. 211348.
February 23, 2022.)

35. AAA filed for CWT refund/credit for taxable year 2006 and it presented the required BIR Forms as to
the amount of Php 7,738,179.01. Upon checking its General Ledger and Annual Income Tax Return,
the amount of income payments (P4,624,554.63) based on the aggregate amount stipulated therein
differs in its declared claim in the BIR Forms. Which amount should be credited?
The amount of P4,624,554.63 is the only amount of CWT claimed by AAA that complied with the requirement
under the law. In determining the CWT amount to be credited, the same must not only be supported by the
required BIR Forms but it must also correspond with the income included in the tax return of the claimant,
upon which the taxes were withheld. (Commissioner of Internal Revenue vs. Philippine Bank of Communications, G.R. No.
211348. February 23, 2022.)

36. Will the six-year prescriptive period for actions based on solutio indebiti under Article 1145 of the Civil
Code apply to a claim for refund of excise taxes erroneously collected covered under the Tax Reform
Act of 1997?
No. Given that the excise taxes are imposed and collected under the Tax Reform Act of 1997, then its claim
for refund or credit of said taxes illegally or erroneously collected shall logically be governed by the same law,
including the applicable prescriptive period for such claim. There is no need to refer to the Civil Code
provisions on quasi-contract. The Tax Reform Act of 1997 is a special law, and it is a basic tenet in statutory

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 construction that between a general law and a special law, the special law prevails. (Commissioner of Internal
Revenue vs. San Miguel Corporation, G.R. No. 180740. November 11, 2019)

III. LOCAL TAXATION

37. Is Municipal Order 93-95, which imposes franchise tax on the operation of public utilities, a legally
binding ordinance?
No. Section 25 of MO 93-35 was evidently passed beyond the powers of a municipality in clear contravention
of RA 7160. MO 93-35 was passed by the Sangguniang Bayan of the Municipality of Muntinlupa. This is
plainly ultra vires considering the clear and categorical provisions of Section 142 in relation to Sections 134,
137 and 151 of Republic Act 7160 (RA 7160) vesting to the provinces and cities the power to impose, levy,
and collect a franchise tax. Muntinlupa being then a municipality definitely had no power or authority to enact
the subject franchise tax ordinance. (Manila Electric Company vs. City of Muntinlupa, G.R. No. 198529. February 9, 2021)

38. Are the properties, consisting of lands, buildings, machineries, carriageways, and passenger terminal
stations, owned by Light Rail Transit Authority (LRTA) exempt from real property taxes?
Yes. The properties of LRTA are properties of public dominion and therefore owned by the State or the
Republic of the Philippines. Railroads are of a similar nature with roads, as both are man-made constructions
on land to facilitate the passage of certain vehicles. In fact, the LRT's railroads and terminals are anchored at
certain points, on public roads, similar with elevated highways. The mere fact that LRTA collects fees and
other charges from the public does not remove the character of the railroads and terminals as properties for
public use. The operation by the government of an elevated highway or expressway with a tool does not
change the character of the road as one for public use. Thus, the inescapable conclusion is that the
properties of the LRTA are not merely patrimonial properties, but are properties of the public domain
that cannot be subjected to real property tax. (Light Rail Transit Authority vs. City of Pasay, G.R. No. 211209, June 28, 2022)

IV. JUDICIAL REMEDIES

39. Does the Court of Tax Appeals have the jurisdiction to decide the validity of Warrant of Distraint
and/or Levy (WDL) issued by the CIR?
Yes, Section 7 of Republic Act 9282 (RA 9282) provides for the exclusive appellate jurisdiction of the CTA on
matters arising under the NIRC or other law administered by the Bureau of Internal Revenue (BIR). The CTA's
appellate jurisdiction is not limited to cases involving decisions of the CIR on matters relating to assessments
or refunds. Section 7 (a)(2) of RA 9282 also covers "other matter arising under the National Internal Revenue
Code or other laws administered by the Bureau of Internal Revenue." Clearly, the CTA has jurisdiction to
determine whether the WDL issued by the BIR is valid and rule on the validity of the waivers of the statute of
limitations and application for tax amnesty under RA 9480. (La Flor Dela Isabela, Inc. vs. Commissioner of Internal
Revenue, G.R. No. 202105. April 28, 2021)

40. Does failure to comply with the requirements of an administrative claim for CWT refund/credit
preclude judicial claim?
No. What is vital in the determination of a judicial claim for a tax credit/refund of CWT is the evidence
presented before the CTA, regardless of the body of evidence found in the administrative claim. The
independence of the judicial claim for a tax credit/refund CWT from its administrative counterpart is implied in
the National Internal Revenue Code (NIRC), which allows the filing of both claims contemporaneously within
the two-year prescriptive period. Sections 204(C) and 229 of the NlRC. With reference to Section 229 of the
NIRC, the only requirement for a judicial claim of tax credit/refund to be maintained is that a claim of refund or
credit has been filed before the CIR; there is no mention in the law that the claim before the CIR should be
acted upon first before a judicial claim may be filed. (Commissioner of Internal Revenue vs. Philippine Bank of
Communications, G.R. No. 211348. February 23, 2022.)

41. Are courts empowered to grant an injunction against the collection of taxes?
As a general rule, no. Courts are not empowered to grant an injunction against the collection of taxes. A
principle deeply embedded in our jurisprudence is that taxes being the lifeblood of the government should be
collected promptly, without unnecessary hindrance or delay. In line with this principle, Section 218 of the NIRC
expressly provides that no court shall have the authority to grant an injunction to restrain the collection of any
national internal revenue tax, fee or charge imposed by the code. An exception to this rule, provided under
Section 11 of Republic Act 1125, obtains only when in the opinion of the Court of Tax Appeals the collection
thereof may jeopardize the interest of the government and/or the taxpayer. (Commissioner of Internal Revenue vs.
Standard Insurance Co., G.R. No. 219340. April 28, 2021)

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