CTA Case No. 702 (Decision)

NATIONAL POWER CORPORATION, C.T.A. CASE NO. 702 / Petitioner, ... versus - JOSE ARANAS and MELECIO OOMINGO, Respondents. X - - - .. -- --X -- DECISION From May 30, 1953 to June 30, 19551 the peti- . tioner, a Government corporation, purd1ased lumber from the Heald _Lvrober Company for the aggregate amount of 9702,816.38. It appears that the sales tax due on said sales of lumber at the rate of 5% of the gross selling price, imposed by Section 186 of the National Internal Revenue Code, as amended, was not paid by the seller upon the representation of petitioner that its purchases were not taxable, and that should it be finally held that the tax was due it would assume liability for such tax. Upon insistence of respondent on collecti~g the tax on said sales, petitioner secured an opinion of the (, Secretary of Justice {Op. No. 106, dated May 14, 1954) to the effect that purchases of petitioner were exempt from tax under its charter, Republic Act No. 358. This opinion was, however, revoked by the Cabinet on February 25, 1955. Convinced of its liability~�~eti~i?ner paid � .. ::~o~ the total sales tax in the sum -.....o_ ( ~5,140.82� but re- fused to pay the 25% surcharge for late payment as /; .. ��.

DECISION - C.T.A. CASE NO. 702 - 2- provided in Section l83(A) of the Revenue Code in the sum of 8,785.25. Petitioner contends that the surcharge should not be imposed in view of the fact that the fail- ure to pay the tax on time was due to the opinion of the Secretary of Justice. Respondent decided to impose and collect the surcharge on the ground that he has no dis- cretion on the m~tter, hence this appeal. There is no question as regards the legality of the tax. The sole issue relates to the legality of the im- position � of the surcharge of 25% of the tax for failure to pay the same on time as provided in Section l83(A) of the Revenue Code. The main argument of petitioner in refusing to pay the 25% surcharge in this case is that the failure to pay the tax on time was due to an opinion of the Secretary of Justice, relying upon an opinion contained in Lim Co Chui v. Posadas, 47 Phil. 460, which readss �It may possibly be, as intimated by Judge Cooley in his standard treatise on Taxation, volume 2, page 901, that 'there might be excuses for non-payment which would justify the interference of the Courts'. The maxim is~ lmpossibilium nulla obligatio est. There is no obliga- tion to~ impossible things.� It is not true, however, that the failure to pay the tax in question within the period prescribed by law was due to the opinion of the Secretary of Justice. The records show that the taxable transactions were ef- fected from May 30, 1953 to June 30, 1955. The opinion of the Secretary of Justice was rendered on May 14 1 1954, and it was revoked on February 25, 1955. On

DECISION - C. T.A. CASE NO . 702 -3- transactions effected prior to the opinion of the Sec- retary of Justice, the tax was not paid on time, and on transactions effected ~fter its revocation, the tax was not also paid on time . The entire amount of the tax was paid only on October 14, 1955, long after the surcharge had accrued. It is not correct to lay the blame on the opinion of the Secretary of Justice for failure to pay the tax in this case within the statutory period. Finding the decision appealed from in order, the same is hereby affirmed. Accordingly, petitioner is ordered to pay the sum of 81 785.25 within thirty days . from the date this decision becomes final. Without pronouncement as to costs. SO ORDERED. Manila, November 29 , 1962. ROMAN M. UMALI Associate Judge WE CONCURS ~~ Presiding Judge