CTA Case No. 931 (Decision)

~ E ;' J11 .IC OF TH - PHILIPPIN '. 0 0U \.T OF TAX APfEAL_, � QUEZON CI1'Y . .2HILIPPINE l�~.CETYLE SiE CONPANY ' Petitioner, - versus- C. T . A . CASES Nos . . 931 '& 1019 TI-'E COHl:I '.SIONK. OF INTEHNAL RE'vENU!i' 1 Respondent . x- - - - - - - - - - - -x DECI S I 0 N These are appeals from the decisions of the respondent denying petitioner ' s claims for refund of sales tax in the aggregate amount of i �908 . 63 (:.668 . 90 in C . T. ll � No . 931 and ~239 . 73 in C. T. A. No . 1019) . . Since these cases were jointly heard and they involve similar facts and the same issue, the appeals are herein decided together . Petitioner is a domestic corporation engaged in the manufa cture and sale of oxygen and acetylene gases . On several occasions enumerated hereunder, petitioner paid the seven per cent (7%) sales tax on its sales of oxyget � and acetylene gases to the National Power Corporation , pursuant to Section 186 of the Na- . tional Internal Revenue Code. The breakdown of the tax paid by petitioner follm-1s: C . T . l . No . 931 Date .�?aid Official .Re- 9- 18- 58 ceipt No. Amo u n t 6- 13- 60 �-533 . 57 6-16- 60 187004 75 . 22 J.~:.- 1089337 37 . 94 A-1623726

D:SCISI01 �, CT.... Nos . 931 & 1019 I - 2- 17 .33 7- 11- 60 i'~ - 1090082 4 . 84 '7-15- 60 A- 2017272 �-668 . 90 A- 2124015 C. T. A. No . 1019 -~ - 1091023 � 11. 78 d-15- 60 43 . 85 A- 1091901 16 . 85 8- 8- 60 A- 2247392 A-2261368 5. 50 9- 12- 60 1- - 1092662 9- 14- 60 J.-1093407 13 . 08 10-11- 60 13 . 78 ~-i.- 2274633 40 . 96 10-13- 60 26.82 ll- 11- 60 1\.-2216918 lt7 . 42 i - 2443927 11- 18- 60 6 . 15 f~ - 20L1-619 13 . 24 12-13- 60 12- 20- 60 r 239 . 73 1-19- 61 aGGRJGf~TE AEOUNT - ~908 . 63. Subsequently, petitioner claimed the refund of the said tax on the gro und that the National PO\ver Corporation is exempt from sales tax . The claims for refund were denied by respondent on the ground that the exemption granted to the National Power Corporation under the provisions of 3epublic Act -o . 358 refers only to direct taxes and does not extend to indirect taxes . Similarly , all the requests for reconsideration were denied . Hence, these appeals . The common issue to be resolved in these cases is whether or not the Philippine Acetylene Company is exempt from the payment of sales tax on its sales of oxygen and acetylene gases to the National Power Cor- poration . In relation to C. T. A. Uo . 931 , the question of

DECISION - .' , CTA Hos . 931 & 1019 I ,_ 3 - prescription of petitioner ' s right to institute a suit for the recovery of the amount off-533 . 57 \vas also raised . Petitioner contends that under the provision of 3epublic Act 1 o . 358 , as amended by Republic Act No . 987 , the National Power Corporation is exempt from the payment of "all taxes , 11 and therefore, the sales of oxygen and acetylene gases to the said corporation are also exempt from the payment of sales tax . The pertinent provision of the said law provides as follows: 11SEC . 2 . To facilitate payment of its indebtedness , the National Power Corpora- . tion shall be exempt from all taxes, except real property tax , and from all duties, fees, imposts , charges and restrictions of the Bepublic of .the Philippines, its prov- inces , cities and municipalities . n The issue is not new . In similar cases involving the same parties , this Court consistently held: ~~", .fe find the contention of the peti- tioner without merit . To our mind~ under the above quoted provision of oect1on 2, , l epublic � ct No . 3 58 , the National Power Corporation is exempt from the payment of only those taxes directly payable by it. ,\s correctly stated by the .c<;xecutive Secretary in his letter dated February 26, 1955 to the General hanager of the National Power Corporation, ' the exemption granted by Republic Act No . 358 applies only to direct taxes but does not extend to indirect taxes. x x x that doc- trine of tax immunity is not applicable where the tax is an inci.irec t tax col- lectible from the manufacturer , producer or importer. '

DECISION ~ C'l'it Nos . 931 & 1019 - lt - 11 The case at bar involves the assessment and payment of sales tax prescribed by action 186 of the Tax Code . It is a direct tax on sales of articles or goods ' to be \ pa i d by the manufacturer or producer ' - t he original sell er - li.ke the pe- titioner herein, and not by the buy- er . Therefore , petitioner Philippine Acetylene Company , t he manufacturer or producer of the oxygen and a cety- lene gases s old to the Na tional Pov;er Corporation , cannot claim exemption from the payment of sales tax simply because it3 buyer - t he Na tional Power Corporation - i s exemp t from t !1e pay- men t of all t axes . Exemp tions from taxa tlon are hi ghly disfavored in law and ca nnot be permitted to exist upon a vague implication . (&siatic Petro- leum Co . v s . Llanes , lt9 Phil . lt66 . ) 11 It is the univer sal and estab- lished rule tha t he who claims an exemption from his share of the common burden of taxation mus t justify his claj_m by shov.ling that t he Legislature intended to exempt him by \AJords too'-- plain to be mistaken . (Government vs . Monte de Piedad , 36 Phil . lt2 . ) Exemp- . tion from taxation mus t be shovm in- dubitably to exis t . The presumption is always against any surrender of the taxing pov1er . (Noli.na vs . afferty , 37 Phil . 5lt5. ) In the present case, the petitioner succeeded in showing to our satisfaction that the Na tiona.l Power Corporation is exempt from the payroont of all taxes, except real prop- erty tax , but it failed to prove that it is exempt from the payment of the sales tax assessed on the sales of oxygen and acetylene gases to the Na- tional Power Corporation . 111 ( Philip- p ine Acetylene Company v . The Com- missioner of Internal eve.nue, C. T. A. No . 898, Mar . 2, 1962 and Philippine Acetylene Company laban kay Komis - yonado Ng :\.entas In ternas, H. P. B. Bl g . 708 , Pasiya ng Ika 17 ng 8 etyembre, 1965. )

DEC I SION - � CTA Nos . 931 & 1019 - 5- We see no plausible reason to depa rt from the above- mentioned ruling . VIith res pect to the amount of i-533 . 57 pa i d by pe t itioner on September 18 , 1958 , it appears that the suit for r efund of the amoun t wa s incor - pora ted only in the Amended an6. Supplemental Peti- tion for Review filed with this Court on October 18 , 1960 . Applying the well established rule t ha t an amendment vJhich introduces a new or different .cause of a ction, making a new or different d emand , is equiva lent to a fresh suit , upon a new cause of a ction , and t he statute of limitations co ntinues to run until the amendment is filed (See Ruymann & Farris v . Dir . of Lands, etc ., 34 Phil . 428 , citing 25 Cyc ., 1308 , and ca ses cited . ) , we find that the action was instituted thirty- one (31) days beyond the period provided by law which reads as follmvs: 11Recoverv of tax erroneouslj!: .91: illegaii,y collected .- x x x. In any case , no such suit or proceeding shall be begun after the expiration of t wo years fro m the date of payment of the t ax or penalty . " (Sec . 306 , Na tional Internal Revenue Code) . The t axpaye r ' s f ai lure to comply wi t h the requirement regarding the institution of the a c tion or proceed- ing in court within two (2) years after t he payment of the tax is a bar to the recovery of the same , I

DECISIOl - C~C.i-l. Nos . 931 & 1019 - 6- irres :)ective of whether or not a claim for refund of such t a xes file d vii th the Collector of Internal ~evenue is still pending action by the latter . (College of Oral & Dental Surgery v . Coll ., G. R. ho . L- l04ll-6 , Jan . 28, 1958; Gibbs v . Co11. , G. ;.i . Ho . 1-13453 , Feb . 29 , 1960 and Ishc'lr Singh v . Com- missioner of Internal Hevenue, C.T . A. No . 1167, July 30 , 1965) . The action for recovery of the sum of �533 y5.7 theref ore, has already prescribed. /m~REJ.70 E, the above- entitled cases should be, as they are hereby 7-is'issed . With costs against petitioner . 0 ORD.'""R.Z.D . ~uezon City , October 12 , 1965. li EYES , Sr. siding Judge \1,f'i' CONCUR: