COMMISSIONER OF INTERNAL REVENUE vs. SAN ROQUE POWER CORP.

G.R. No. 187485

707 SCRA 66

February 12, 2013

Supreme Court En Banc

FACTS:

On October 11, 1997, San Roque Power Corporation (San Roque) entered into a Power
Purchase Agreement (PPA) with the National Power Corporation (NPC) by building the San
Roque Multi-Purpose Project in San Manuel, Pangasinan.

The San Roque Multi-Purpose Project allegedly incurred, excess input VAT in the amount of
P559,709,337.54 for taxable year 2001 which it declared in its Quarterly VAT Returns filed
for the same year.

San Roque duly filed with the BIR separate claims for refund, amounting to
P559,709,337.54, representing unutilized input taxes as declared in its VAT returns for
taxable year 2001.

However, on March 28, 2003, San Roque filed amended Quarterly VAT Returns for the year
2001 since it increased its unutilized input VAT To the amount of P560,200,283.14. San
Roque filed with the BIR on the same date, separate amended claims for refund in the
aggregate amount of P560,200,283.14.

On April 10, 2003, a mere 13 days after it filed its amended administrative claim with the CIR
on March 28, 2003, San Roque filed a Petition for Review with the CTA.

CIR alleged that the claim by San Roque was prematurely filed with the CTA.

ISSUE:

WON San Roque is entitled to tax refund? NO.

HELD:

No. San Roque is not entitled to a tax refund because it failed to comply with the mandatory
and jurisdictional requirement of waiting 120 days before filing its judicial claim.

On April 10, 2003, a mere 13 days after it filed its amended administrative claim with the CIR
on March 28, 2003, San Roque filed a Petition for Review with the CTA, which showed that
San Roque did not wait for the 120-day period to lapse before filing its judicial claim.
Compliance with the 120-day waiting period is mandatory and jurisdictional, under RA
8424 or the Tax Reform Act of 1997. Failure to comply renders the petition void.
It violates the doctrine of exhaustion of administrative remedies and renders the petition
premature and without a cause of action, with the effect that the CTA does not acquire
jurisdiction over the taxpayers petition.
Article 5 of the Civil Code provides, "Acts executed against provisions of mandatory or
prohibitory laws shall be void, except when the law itself authorizes their validity."
Thus, San Roques petition with the CTA is a mere scrap of paper.
Well-settled is the rule that tax refunds or credits, just like tax exemptions, are strictly
construed against the taxpayer.
Whether the Atlas doctrine or the Mirant doctrine is applied to San Roque is immaterial
because what is at issue in the present case is San Roques non-compliance with the 120day mandatory and jurisdictional period, which is counted from the date it filed its
administrative claim with the CIR. The 120-day period may extend beyond the two-year
prescriptive period, as long as the administrative claim is filed within the two-year
prescriptive period. However, San Roques fatal mistake is that it did not wait for the CIR to
decide within the 120-day period, a mandatory period whether the Atlas or
the Mirant doctrine is applied.
Section 112(D) of the 1997 Tax Code is clear, unequivocal, and categorical that the CIR has
120 days to act on an administrative claim. The taxpayer can file the judicial claim

(1) Only within 30 days after the CIR partially or fully denies the claim within the 120- day
period, or
(2) only within 30 days from the expiration of the 120- day period if the CIR does not act
within the 120-day period.

Even if, contrary to all principles of statutory construction as well as plain common sense,
we gratuitously apply now Section 4.106-2(c) of Revenue Regulations No. 7-95, still San
Roque cannot recover any refund or credit because San Roque did not wait for the
60-day period to lapse, contrary to the express requirement in Section 4.106-2(c).

SC granted the petition of CIR to deny the tax refund or credit claim of San Roque.

Mirallosa v. Carmel Development Inc., G.R. No. 194538, November 27, 2013
SUBJECT: Effect of Constitutionality Modern View (Statutory Construction)

FACTS:
Respondent Carmel Development, Inc. was the registered owner of a Caloocan property known
as the Pangarap Village located at Barrio Makatipo, Caloocan City. The said property is
registered under the name of Carmel Farms Inc. under a Transfer Certificate Title (TCT). One of
the lots in the said title is presently occupied by Petitioner Moreto Mirallosa. On September 14,
1973, P.D. 293 was issued invalidating the titles of respondent and declared them open for
disposition to the members of the Malacaang Homeowners Association, Inc. (MHAI). However,
on January 29, 1988 as decided on the case of Tuason, P.D. 293 was declared as
unconstitutional. In effect, on February 17, 1988 Carmel Farms Inc. restored its ownership of the
property. Meanwhile, sometime in 1995, Petitioner took over the lot in question by virtue of an

Affidavit executed by Pelagio M. Juan (petitioners predecessor who was a member of MHAI).In
the basis of Tuason case, the respondent filed a Complaint for Unlawful Detainer before the
Metropolitan Trial court (MeTC) wherefore the petitioner was ordered to vacate the property in
question among others. The petitioner appealed to the RTC. RTC then rendered a Decision to
reverse and set aside the findings of MeTC which led to dismissal of the complaint. On
September 24, 2008, respondent appealed to Court of Appeals and decided to reversed and set
aside the Decision of RTC and then reinstated the decision of MeTC.

ISSUES:

(1) Whether or not the MeTC had jurisdiction over the case

(2) Whether or not Tuason case may be applied here, despite petitioner not being a party to the
case

(3) Whether or not petitioner is a builder in good faith

HELD:

(1) Yes. In this case, what was once a legal possession of petitioner, emanating from P.D. 293,
later became illegal by the pronouncement in Tuason that the law was unconstitutional.

(2) Yes. Tuason may be applied despite petitioner not being a party to that case, because an
unconstitutional law produces no effect and confers no right upon any person.

(3) No. Since petitioner only started occupying the property sometime in 1995, or about seven
years after Tuason was promulgated, he should have been aware of the binding effect of that
ruling. Since all judicial decisions form part of the law of the land, its existence should be on one
hand, x x x matter of mandatory judicial notice; on the other, ignorantia. legis non excusat.

Petition for Certiorari is DISMISSED, AFFIRMED the Decision and Resolution of Court of
Appeals

Planters Products Inc vs Fertiphil Corp

G.R. No. 166006

March 14, 2008

FACTS: Petitioner PPI and respondent Fertiphil are private corporations incorporated under
Philippine laws, both engaged in the importation and distribution of fertilizers, pesticides and
agricultural chemicals.
Marcos issued Letter of Instruction (LOI) 1465, imposing a capital recovery component of
Php10.00 per bag of fertilizer. The levy was to continue until adequate capital was raised to
make PPI financially viable. Fertiphil remitted to the Fertilizer and Pesticide Authority (FPA),
which was then remitted the depository bank of PPI. Fertiphil paid P6,689,144 to FPA from
1985 to 1986.
After the 1986 Edsa Revolution, FPA voluntarily stopped the imposition of the P10 levy. Fertiphil
demanded from PPI a refund of the amount it remitted, however PPI refused. Fertiphil filed a
complaint for collection and damages, questioning the constitutionality of LOI 1465, claiming
that it was unjust, unreasonable, oppressive, invalid and an unlawful imposition that amounted
to a denial of due process. PPI argues that Fertiphil has no locus standi to question the
constitutionality of LOI No. 1465 because it does not have a "personal and substantial interest in

the case or will sustain direct injury as a result of its enforcement." It asserts that Fertiphil did
not suffer any damage from the imposition because "incidence of the levy fell on the ultimate
consumer or the farmers themselves, not on the seller fertilizer company.
ISSUE: Whether or not Fertiphil has locus standi to question the constitutionality of LOI No.
1465.
What is the power of taxation?
RULING: Fertiphil has locus standi because it suffered direct injury; doctrine of standing is a
mere procedural technicality which may be waived.
The imposition of the levy was an exercise of the taxation power of the state. While it is true
that the power to tax can be used as an implement of police power, the primary purpose of the
levy was revenue generation. If the purpose is primarily revenue, or if revenue is, at least, one
of the real and substantial purposes, then the exaction is properly called a tax.
Police power and the power of taxation are inherent powers of the State. These powers are
distinct and have different tests for validity. Police power is the power of the State to enact
legislation that may interfere with personal liberty or property in order to promote the general
welfare, while the power of taxation is the power to levy taxes to be used for public purpose.
The main purpose of police power is the regulation of a behavior or conduct, while taxation is
revenue generation. The "lawful subjects" and "lawful means" tests are used to determine the
validity of a law enacted under the police power. The power of taxation, on the other hand, is
circumscribed by inherent and constitutional limitations.
=)*george*