CTA Case No. 4360 (Decision)

REPUBLIC OF THE PHILIPPJMES COURT OF TAX APPEALS QUKZ:O N CITY CENTRAL VEGETABLE OIL, MANUFACTUR ING CO., INC., Pe titioner~ C.T.A. CASE NO. 4360 COMMISSIONER OF INTERNAL REVENUE, Respondent. -- �-� ... -- - �- >: DE C I X0 N This involves an assessment and demand against pr:>ti.t..i.nnP-r �for�� defi ciency 3% miller 's tax in the ~mount of P1~575~514.70 for the year 1986 contained in the Deputy Commissioner Eufracio D. Santos ' l ~tter d~ted November 17~ 1988. T l 1r~ i'\Ssr->ssment arose fr�om the disallowance of pf?t .i. t.inrlet~ 's r-r;>quest �for ta:.: credit of the sa les ta:: i.. �1: r .=li.d on cnnt:."'i.ner� s and pc.~ckaqin g materials i'l q ;:.dnc;t the :'> ~{. miller � 's ta }: due on its gross sales nf erli..hlP oi l and a lli ed products. ThP f.=\cts C'\re undisputed and are quoted below: Petitioner is a manufacturer of edib l e and coconut /coprameal cake and such other coconut related oi l subject to the miller's ti"l:.: of 3/.. Petitioner also m ;:.mufi"\ct.L~r� es lard~ detergent and laundry soap subject to the sa les tax of 10% . In 1. 986 ~ petitioner purch as ed a c;pPcifiPd number of containers and

DECISION - CTA CASE NO. 4360 - � 2 ����� p~~kaginq ma tRri a l s for its edible oil fr �om i t:s sup pli ers a nd p aid th e sa" Ies ta x due thF!reon. Aft.e1��� c"\ n investigation conducted by re�;o; pnnrlent' s Revenue E>la miner , Assessment No tice No. FAS - B- 86 - 88- 001661-001664 dat.P-d Apr- .i.l 22 !t 1988 was is sLted again s t pPt "i tioner� �for d ef ir.::iency miller� s tax in thP tot~ l ~mount of P1~575,514.70, dPtails of whi c h are as follows: !____9.....� .. .6 F._i...r_!?. t __Q~_C\.r.t_e_r_ t Pe.fj. J;.:i.._go_~_y_ -~~ J1.! ~ .E?.r_:__~ ....I.s.~~ Net ta~~ble sa le s E!.J..5.1..!.4.~ ~.?..~ !_;q 3% Miller's tax due thereon Less: Sa l es ta~ paid 335,425.90 Deficiency miller's tax Add: 25% Surc h arge � � �-���-�-��-~I.?.... Z_~~-~. :Z:..!. 20% In t. fr. 4 -2 1-86 to 246,663.19 4 - 2 1 -- 88 61,665.80 TOTAL AMOUNT DUE AND COLLECTIBLE 123,331.60 ,t ......9....J3___f?_ ? ~c:q oq ..J~ Y? .r.:.t.~r.::. p~_JJ. c::!.E?D.C.Y. _~%..J:Ulle.r...:.JLT""x._ Net taxable sa les P. _E.J_ ~.-~.~~....~z~~ .P...z. 3% Miller's ta x due thereon Less: Sales tax paid 249,427.37 Deficiency miller's tax -�-��-��--���--1~_,_.1.1.Z.~. ~;;. ndd: 25% Surc h arge p 206,950.(14 20% Int. fr. 7-21 - 86 to 51,737.51 4-21- 88 90,540.64 TOTAL AMOUNT DUE AND COLLECTIBLE !.___9. _~ __�.>.. I .h..i.rd.. __!A.~J.~t:.t.~..r.:. P.e>.f...t_~_j,~o.~_y____~_ ..t!.!J...!. E?.r ..:_~--..I.~.>.5.. Net taxable sales eJ_Q,._Z;? 2 .�..~~9..! -~.1. 3% Miller 's tax due thereon Less: Sa l es tax paid 312,609.63 Deficiency miller's tax Add: 25% Surc ha rge ----��-�� �2~... ~.9..tt.!. ~.~- 259~114.81 20% Int. fr. 10-2 1- 86 to 64~778.70 4 - 21 -�� 88 97,168.05 TOTAL AMOUNT DUE AND COLLECTIBLE e=. ~.::c"c'~~= Y.= ~ , Qg,;l~.,-~6.,

,. DECISION CTA CASE NO. 4360 1 .. .9. ...B.... 6 F our.tt! .. I:JqC\.rt~c Qe f i != i e 0 t:::. Y....} .X....J1!JJ.g_r.. ~ ..?.._..IC\.!.:!. Net taxable sales e__f;l_,_~ 7~-LQ,LQ..~-~ 3% Miller ' s t~x due thereon Less : SAles tax paid 252~582.98 Deficiency miller's tax ndd: 25% SurchArge -�� -�� -��----.!~ ,..P.<21 .�7.9.. p 2::~9,081.19 20% Int. fr. 1 -2 1-87 to 4 - 2 1 �- 88 I 59' '77C>. 3() TOTAL AMOUNT DUE AND COLLECTIBLE 74,712.87 On June 29~ 1988~ petitioner filed \"'ith n:~spondent a letter dated June 27~ 1788 requesting for reconsideration of the a hove d eficiency miller's tax assessments~ ccmtending that the final p rovision of Section 165 of the Tax Code dors not apply to sales tax paid on cnntai ners and packaging materials, llP.nce , the amount paid therefor '!Should h .:~ve been cn?dited against the miller's tax assessed against it. Again, thru l rt t.!?r- dated September 28 ~ 1988, petitionPr reiterated its request for r�.. ecmlsider� at.ion. On No v ember 17~ 1988~ respondent fi.nc'\lly c~me up ~�lith his decision denying petitioner ' s request for reconsideration~ full text of which reads as followss November 17, 1988 Central Vegetable Oil Man ufa cturing Co.~ Inc. P . 0 . Bm: 2816 Ma n i 1 a Attention: ttc~ __!l. .~m~.?. . .J.:..b.t,.L~. f'.r.::~.~;i,q~n.t. Gentlemen: We have received your letter of September 28, 1988, relative to our assessment

DECISION CTA CASE NO. 4360 - 4 .... ~g~inst your company in the as amount o �f F'1~575~514.75, the deficiency miller's tax for ye<"r 1986. Section 168 of the Tax Code prov ides that sa l es ~ mi 1 l er' s or e>:c:ise ta>H2S paid on r.::w-1 mater�ia ls or supplies u~erl in the milling p~oc:es3 shall not be allowed against the miller 's tax due. You contend that since packaging material s an? nat used in the millinq proce ss then~ the sales t~xe s paid thereon should be i'lllm'led as S\ . c::r::. ?.~~,t:t; agai nst the miller� � s ta:�: due bee ause they do not fall within the scope of the pro hi bi t.ion. Tt i s our position~ ho1-1ever ~ that s:i.nc:e the law s per: i �f .i.e:: a 11 y noes not a 11 ow ta xes raid on the raw materials or S llf'J1 J ies u sed in the mi ll .i.n g rroc::Pss as a credit against the miller 's tax due~ with more reason should the sa les taxes pa .i.d r~r1 rnater-�ial s nat used in the mi ll ing rw�oc::ess be allowed as a credit against the m:i ller� � s t.=~ >: due. The re is no pr� ovi~; ion of l a1.-1 which allows suc h a credit- to-be made. In v .i.e~" of the above~ 1"e ,,H- r~ r �p i. terat.ing t:he assessme nt r� e f et- r-�ed to above. We r�eques t that you make payment immediately sa that this case may be considered closed and terminated. Very truly yours, (SGD.) EUFRACIO D. SANTOS Deputy Commissioner On May 7 ~ 1 989 ~ petitioner filed the in s t a nt Petition for Review with this

DECISION CTA CASE NO. 4360 �- 5 -� Ho not- a b 1e Cour��t a ss ai 1 inq the validity of th e h e r-ein ta >: a s se s sment. ( pp. 98- 1(>1, CTA r ec . ) The o nly i s sue pos ed for our deter-mination is whether- or not petitioner is liable for deficiency mill e r � s ta >: for the yeat'� .1986 in the amount of F'.1~575~514. 7 0. The question in this case hinges on the a pplica t i on of the final proviso of Section 168 of the National Internal Revenue Code which r-eads& "Pr� ovided~ finally~ that credit for a ny s ~ l es , miller ' s or excise taxes paid on r a w materials or- supplies used in the mi lling pr-oces s shall not be allowed a q a i n s t . the miller-,. s ta N dLte !' >:>~>! �� Acc ord i n g to respondent, the aforesaid prevision c l ea rly and s pecifically does not allow taxes paid nn rr a ~~ ma terials or supplies used in the milling p r o cess a s a cr-edit against the miller- ' s tax due. And there being no specific provision allowing such t a}: c n=.~dit, the sale s ta>: paid on materials not u s e d i n the milling process cannot be allowed as a c r- e dit i'\ g e:d.n s t thf.? miller's tax due. Simply put, the i ssue is:

DECISION CTA CASE NO. 4360 - 6- Petitioner ' s contention is to the effect that respondent erred in not allowing petitioner to credit the sales tax it paid on the containers and packaging materials against the miller ' s ta>: a sses!5ed against it because the final proviso of S ection 168 o �f the National Internal Revenue Code does not app 1y in the case at bar and that it is e ntitled to a tax credit pursuant to the ruling of the n Commi ss ioner Ruben Ancheta. Pet.i tioner� is of the opinion that the a ppl ication of the final proviso of Section 168 is prepos terou s and de v oid of reason because .tt.LE?.. the following reasons : First: The raw materials used by petitioner in manufacturing edible oil <:1 r e copt- a <:1nd /or coconut oi 1. In other ltlo r� d s ~ the term "u s ed" in the final provi s o of Section 168 of the NIRC refers or .i c.:.:, strictly confined to "raw ma t e r�ial 5 " or supplies fed~ supplied or put into the apparatus~ equipment~ m<:1 c hin e r�y or its adjuncts that cause or e xecute the milling process. On the other hand~ the containers, such as tin cans~ and/or packages are not used or fed into the milling machinery nor were ever intended for� conversion to form part of the finished product, i.e.~ refined coconut/edible oil. Consequently~ it would be absurd to say that said containers and packages are "used in the mi. 11 inq process"~ for the process

DECISION CTA CASE NO. 4360 - 7- in v ol v es "grinding~ crushing~ st.amping, cutting~ shaping or polishing" ( s~e THE DICTIONARY~ by TIME~ COPYRIGHT 1974 ~ p. 'P~4). It is one of the primary canons of construction that all statutes should rPcei V P. a r-�easonabl e interpretation~ i f thP meaning of the statute is at all doubtful. It has been a well-entrenched dor:tr.ine in our� jurisdiction that ">n:x in the inte rpretation of statutes levying t r.n:es or� duties~ that in case of doubt~ s u c h statute~; are to be construed most s tr-ongly again s t the government and in �fav o r o �f the s ubjects or citizens, b eca u se bur-den s are not to be imposed, nor� pr� ps umed t .o be imposed beyond what statutes e x press ly and clearly import ( CClmm i ? _s i or~_g- r ..c:l..f........JE.l.t.g r.::o.~1 . . . . .J~~Y-f?..D.I,_lg _ ....Y.!?.! . f: i r:-_e m_~Q__ : ?... . ... I. n~ur::~D.t; .E!__ Gq. , 168 SCRA 315; ljan i 1 a R_~_i_ l r::g~q- ___G.q.!. ___Y.~...~ ....__C.qlLe..~;_.tQC .... ...P:f.. r:ust,q1ns ~ 52 Phi 1. 950; C.P.JJE?.!==J:()r.:, _ y _!?,__! ...-.La Tgncjeo.::~,_ __Inc_~, 5 SCRA 665; l...!,g_Q!]____ $._t_~;>y_._ C.:o ~ .. . ..Y?. __ T.r.-. :i.o.:t9 ac;l_~ 43 Phi 1 . 803) � Further� more, s ince the interpretation given by respondent would result to ab s ur. di t.y, such construction must be pere mptor i 1y a voided ( ~~.9-~?._IT.l~..-- .. __ y_s ..~ . Ei.f.t~ ir.l , 79 Phi 1. 95; p_:t,gt;,nQ_____...Y?..! . BE.!t_1ab~J tt~tiPD. F..iDC:,D.f:..~. ..... C:P!.P. !.., 91 Phi 1. 108 ~ P.~PP~ E'_ ys _. YJ. :U ~opgy_~ ~ 1 SCRA 1248; !-agd~meg _____ V_? ! ... -~-g\.9 ~ 12 SCRA 626; G.!:,t~Y-~r.~ vs � .J. f'J..P<:= E!r::t.te.?, 16 SCRA 370) . SECOND: Re s pondent ' s interpretation of the term raw materials is contrary to law and juris prudence. Thus~ raw ma t e r :i.a l s as used in the definition of "m a nuf ac ture"~ denotes materials from wh ic h final product is made (Black ' ~ Law Dictionary~ 4th ed.~ citing State vs. He nnessy Co., 71 Mont. 301~ 230, p. 64~ 65). And consistent with said definition, Revenue Regulations Nos. 2-86 and 11 - 86 [effective January 1, 1986 and Augu s t l~ 1986~ respectively] which gov ern the filing of quarterly percentage t a~ return and payment thereof under the p r o v i s ions, i _TI...tf?..r. __ a.:Ll.i!!:, of Section 168 of thP NIRC, define raw materials or materi al, to wit:

DECISION CTA CASE NO. 4360 - 8- "any ar~ tic l e "'hie h when u s ed in the MANUFACTURE of another article~ become3 a homogenous p a r t thereof~ such th a t. it can no longer be identified in its original state nor may be removed therefrom without destroying or r� enrlel~ ing u s eless the f :i!ni shed article to which it has been m!::> r- gP.d~ mi>:ed or dissolved." Te s ted in the light of the foregoing s tAtutory definition~ i t i s evident that c rntainers and packages used by p e t i t:i.oner are not ~-.~i thin the purview of �t-.he f ina 1 prov .i so of Section 168 of the NI RC � Uq 9. ~ L?..!:~.~) c.:!~ I?.J..Y ~ -��-� C:.Q!.l.:t:.:' !.D...I?.[..?............. ~.IJ.~j p_ac:kag~.? .. _ar.e _ __f :i.-.DJ.?.Dgt:1. ...... P..!:9Q LI~J:..? .... .~t1.!J. E?...... !:~~ rna i;_er� i a 1 s ~rf? - ~?.. ye;>:t;__ j:q___ b~ . _!n.::\O.l.Jfc;\I::;J:qr. ~.9. ... p Y:"OC??Sf'?d _ C)_[ _ (Tl_i)JE:?P ... __.:i,Q '1:9.......f!l'1. i.?.IJ.f?.Q......9.9QQ.?'!.. A.s . suc;IJ L .... c:..on.J~.:i,D .I?L.. ?._._ ~o.ff ........ . P.~� .k~gf?.�. .. ....?Cil?. ?epa r e~. te ....and... 9J?..:t: i _IJf:...t... . .f.r:Qm.____t:,.b_~ -----fj,l}j._?..bJ~'Q good?, io _J;hgJ . :tbe___.fPr:.m~r. ......ar.:.~.--..1-tt_:!tt?.~..Q....~!;?. r:-ec ep:t:ac ~. es ~ _ ... l')_ot .......... ..::\?._____ ipg _r:_~g_.t~n:t.? ____ Pr::: C()rJ1poneQ ts , _ o_f ___the _J~.'I:.:t~.r:. As a .C:.9l.:IJL....9..1?. gr::ac;e ~ it is pertinent to note the case of Ca 1te:-:...... ( r::ll:i.J ?. ~J.... Jn~--~---' ���--Y?..'!........t:t.~.DJ. ~.......P.P...r:....t. ~eryi~~ (17 SCRA 1075) where the Supreme Court aptly defined containers and/or packages " >: :-:>: a P0. c:!::a.g_~_ .is a bun d 1 e made up for transportation; ~ packet; a bale; a parcel; or that in t!..tJ..!.c:.IJ����------~.nYJht...o_g___ __. !~. pac:tf-!d; a box~ case, barrel, crate, etc. in ~b..!.!;.!l... qQQQ.?...... ~..r.!1!.. pa_~ ~q=?.9. ; a cont~iner" (Undersc oring Ours) The def .in i t.ion is an emphatic rejection of _r~~-2-.P..Qr..~_Q.!=?.n t:..:. E. ...-.........�.9.!1.?...~.r.J,..!!; t:..-tQD_ ............_.J:. !l~ .t . pe t .:t. .t .t qo_~r :..?. .__c.;_gn..t. ?.:tm:;o.r:.? ...A.oq ......P..~�.k..?.9J~2--~r.g r..<'\ lfol ..........JT1.~ :t: E'L.:t. .i:\J.?............... l.J?.~c::f_______,t._n _____t b_l;'_____.J!.li .U _!.o.g_ P .r.:-.oc.~_??. ( pp. 80-82, CTA rec. ) Respondent contends pLtnsuan t to Revenue Regulations 2 -- 86 and 11 - 86 and BIR Ruling

DECISION CTA CASE NO. 4360 ��- 9 -- No . 66 -�� 027 d a ted ,Janu ary 29~ 1966, " :t.b~:t .. f:Q[.l_.!;_~_:ini'?.J:.?.. This c onte ntion i s without merit. Suffice it to sa y t h a t 111h a t 1-'J as d e �f ined in the cited Revenue r<r? gul ~ t io n s , i s the term "r::-~.~---m.~tgr _i..~.l..~". Said neve nu e Re gu 1 a tions did not define "!=;g_n.j;_l!,l_~_!}ar._~" or "P."".c:;J~ag,ing ____________ ma:te.r:!~J .!?. ". Clearly therefore res po nd e nt 's c ontention that the containers and p ac l : r.~ ge s a re r<'\w materials is untenable. Sec tion 168 of the National Internal Revenue Cod e e}: p ress ly l i mi t s the articles subject to pe r cPntage ta x [mill e r ' s tax] to the following, viz : :fl o u r: ..<:Jr .. _st_~EC:. b. , ltl'?..2:i.r.: c:. ~J::g~L ..~..Qc;;__O_I'}ht_:t;, manufactured, pl'�oc esse d or mi 11 ed by them, inc 1 uding the .P.Y.:::. from which said i:\r tic l es ar e pr-oduced, proces s ed, or manufactured." (p. 11 6 , CTA r ec .) Fr o m the aforesaid enumer~tion, .i. t i s unqttesti cmi'\bl e th a t containers and packaging ma ter"' i a l s ar e not subj e ct to mil .ler's t.:n:. As s u c h, the alleged miller-'s tax assessed against pe tition e r- for- its containers and packaging m ate r ial~. , i.n the fit�� s t place, has no basis, in �f a c t a nd in 1 c:wJ . (pp. 116 - 117~ CTA rec.) Further-more, the cited BIR Ruling No. 66- 027 h 21s n o 1e g a 1 e f �fr:>c t v-Jh atso eve r in this case~ for i t

DECISION CTA CASE NO. 4360 ... 10 -- i s de P- med revoked , repea led or superseJded by the c ited Revenue Regulations 2-86 and 11-86. And be s ides~ the s ubject matter of t he said BIR Ruling No. 66- 027 is not Sec ti o n 168 of the NIRC but "Section 188(e) of the Ta:�: Code" in relation to "Republic Act No. 4086" (AN ACT TO PROMOTE THE TEXTILE INDUSTRY IJF THE PHILIPPINES BY EXEMPTING~ UNDER CERTAIN CONDI TIO NS , IMPOR TATIONS OF NEEDED nAW MA TERIALS , CHE MI CALS ~ DY EST UF FS AND SPARE PARTS AND THE SUBSEQUENT MANUFACTURE AND SALE OF PRODUCTS DERIVED THFT~EFROI"1 ~ FROM DUTIES AND TAXES~ BY CREAliNG A SPECIAL FUND FOR VITAL RESEARCH~ AND FOR OfHFR PURPOS EB). Therefore~ respondent cannot seek refuge in said BIR Ruling No . 66 - 027. P~::>t.itioner contends that i t is entitled to a tax credit pursuan t to the Ruling of the theJn Commi s~5 ioner~ Ruben Anc heta dated De tober 18 ~ 1984 }' v ,, N>!X This refers to your letter dated Septe mber 5, .1984 requesting tha t the 10% sales tax paid on container cans purchased by you, be credited against the 2% (n ow 3% ) miller's tax due on the refined coconut edi ble oil. It. is repr�e s e nted that yoLI proces s copra .:md/or coconut oi 1 and sell the r�efined edible oi l in cans; that said cans are purchased from can manufacturers who in turn bill to you the price of the

DECISION CTA CASE NO. 4360 - 1.1 �- cans and the 101. tc:D: paid thereon which are separate ly s hown on the invoice; and that the cost of the cans, including the 25% miller's tax is computed. In reply~ I have the honor to inform you thAt your request is hereby granted. >! >: >~ ( P-~-~~i� f .J. ~.......-.Q-~.~- y __g_~ r} --��.~L......l:\!;_~j;_y_~ '1.~�-��--l;_q_!-. ..__Y.~--~- G.gtnn.t.i,s?iDOE.?.Y': ~ G.F<. No. L-17'708~ April 30, 1965)." (Emphasis s upplied.) c: i ting the case of Pacific Oxygen 8( Acetylene Co. vs . Commissio ner~ G.R. L- 17708, April 30, 1965. The above ruling of the Commissioner Ruben nncheta dated October 18, 1984 was effective and in 'force t.olhen pet.i tioner avai 1 ed i tse 1 f o �f the t;:ou: credit in .1986 of a specified number of containers a nd packaging materia l s. Such being the case, the s aid t~u 1 inq can not be revoked by the November 17, 1988 opinion of the Deputy Commissioner Eufracio D. Santos (E x h. F) as in that way, to apply it retr-oactively, would clearly be prejudicial to pr?ti tioner- . Sec tion 278 of the National Internal Revenue Corle states as follows: "f:'!orJ ::. r.:gtJ~PC\<;: _t.i.Y.:i.:.tY.... -.. .9:L ____ r .1-!..L!D.9.2. Any revocation, modification, or reversal of a ny of the rules and regulations promulgated in accordance with the preceding sec: tion or any of the ru 1 ings or circulars promulgated by the Commissioner shall not be given retroactive application lf...__,.......__!:_bg r _E.?..'<.'.9!=. 9.t..t..9.D L . ,_ll}pg,t. .fi.r: 2.\t.:!PO."'- ...... 9r__,_......r..!"'YBL~.C\.!.. ~.! :i.J) .. ......... I??__ ._pr._f?juq;i.c! ~ L._._t..Q. ........t..h~. - ....t.c.l~.P.!W.~_r. >:7:x." (Underscoring ours)

DECISION CTA CASE NO. 4360 - L? -�� Th e tr e r:\ s on for� incorporating the afar-equated p rov i sion i n the Na tio n al Internal Revenue Code was apt l y d ec l a red by the Supreme Court in ABS-CBN Broa d cast ing Corpor a tion v s. CTA (No. G.R. L - 52306~ Oc t. 1 2 ~ 1 9 81; 1 0 8 SCRA 14 3 )~ thu s - "Thi s Court is not unaware of the ~'":.> 11 -� e ntr e nch e d princ ipl e that the Go v e rnm e nt is n eve r e s topped from co ll ec tinq ta >: es b e c a use o f mistakes or e r -ro r- s o n th e p ar t of its agents. In f r.~. c t ~ utm os t c aution s hould be taken in t h is n? g an:l. B u t~ l i ke othe r principles o �f l r.~. ~-.r ~ thi s al s o a dmit s o �f ~ >:cept.i.ons in th r:> int e:>n"'s t of justi c e a nd fair play. Th P i n ser ti o n o f Section 338-�A (now SPc t i nn 3';?7 ) i.nt o th e National Inter-nal Rev e:>n ue C o de~ �:~s h e ld in the case Tuazon ~ Jr- . vs . Lingad (58 SCRA~ p. 170), is ind ica ti ve of l e g i slative intention to su pr r1r� t the prin ci ple of good faith. In f ar:-t~ i n the Unit e d St a tes~ from where SPc t io n 2 4(b) was patt e rned~ i t has been h e ld t .h at th e C.q n.J~.i?.�J QIJ.~ L.....9 .C ...f_qLl _f?.�;:!;Qr.. j. s . ........R..t::-_E?cl urj e .c:l..... f.[p.[Tl_______{!'c;I.P.PJ:j , og..__ .. ~ ... -. PP.~J.t ,t_prJ. ir1 COIJ S i s.J .en t:......1-'Ji :th Of'lt;,'.. .PI'.:'.?Y .i,.QU.?J.Y _..,_t..�'.~ .~-1"! t.i '-'1 t~ e _,~ e __ JrU u.? c: e .......'-'J. ou_ l_~ _..r..~_�.t}_;tt....... . t..b..~ .r.::.!?...f.rPm ~ or whe re the re h as been a misre p rese n ta tion to the taxpayer." ( Emphas i s s upplied) Th e unde r l y ing principle of Section 338 - A~ now Sec t i o n 278 of the Ta x Code~ is to provide for the n o n - retroac tiv i ty of ruling s of the Commissioner of Int e r�nal Re venue (Tan Chong vs. Sec. of Labor~ 72 Phil. 307.) The principle of said provision i!S qood �f a ith in that "the Commis s ioner- or Col lee tor i s pr ec JudPd from adopting a position inconsi~tent

,,' . DECISION CTA CASE NO. 4360 - 1 ~) �� - with one previous l y taken where injustice would n ?sul t. therefrom ~ there has been mi s repres entation to the taxpayer." (ABS -CBN Broadca s ting Corporation vs. CT A~ citing Tiagon~ Inc. vs. Lingad~ 158 SCRA 1 30 .) In the case at bar , the imposition of the d e ficien c y miller's tax for the year 1986 will m .ln? 1 y n "s U 1 t to th e pt'"�ej udice and injustice to petitioner in that the s ales tax paid by petitioner on the containers will not be credited against the allegPd de ficiency miller ' s tax; petitioner will then be s ubject to tax twice considering that said miller 's tax i s based on the gross selling price of the r e f i n Pd coc onut Pdible oll on said containers. (pp. 11 5 - 116~ CTA rec.) Con sequ e ntly, the .t5.'J?...4. r�uling of Commissioner nub e n An c heta~ a ll ovling petitioner to credit the it paid on containers agains t the d e f .i.e ienc y mi 11 er' s t:ax on 1986 cannot be revoked o r r�epe aled by the ! .9.�.� ruling/opinion (E>:h. F) of Deputy Commissioner Santos . (p. 116, CTA rec:.) WHEREFORE, in view of the foregoing, petitioner Central Vegetable Oil Manufacturing Co., Inc., is not liable for deficiency miller�~ tax for the year 1986 in the amount of P1~515,514.70. 3~; ..J

DECISION CTA CASE NO. 4360 No pronouncement as to costs. SO ORDERED. Q u~ z on Ci t y ~ Phil i ppines~ December I CON CUR: CERTIFICATION I here by c ert i f y that this decision \.'las reac he d a f ter due c ons ultation between the members o f th ~ Co urt o f Tax App ea l s in accordance with S~ctio n 1 3 ~ Artic l e VIII of th e Con s titu REYES Presiding Judge Co urt of Tax Appeals