SAN MIGUEL BREWERY INC. v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY ENBANC SAN MIGUEL BREWERY, INC., CTA EB No. 2320 Petitioner, (CTA Case No. 9223) - versus - COMMISSIONER OF INTERNAL CTA EB No. 2327 REVENUE, (CTA Case No. 9223) Respondent. X--------------------------------------------------X COMMISSIONER OF INTERNAL REVENUE, Petitioner, Present: - versus - Del Rosario, PJ, Castaneda, Jr., Uy, Ringpis-Liban, Manahan, Bacorro-Villena, Modesto-San Pedro, Reyes-Fajardo, and Cui-David, JJ Promulgated: SAN MIGUEL BREWERY, INC., J,IUN 0 62022 Respondent. (\J -------------------------------------------------------------------------------1-------------x x RESOLUTION CASTANEDA, JR., J.: For resolution of the Court En Bane is petitioner Commissioner of Internal Revenue's (CIR) Motion for Reconsideration (Re: Decision "--

RESOLUTION CTA EB NOS. 2320 & 2327 Page 2 of3 promulgated 21 February 2022) in CTA EB No. 2327, filed on March 8, 202, with respondent San Miguel Brewery, Inc.'s (SMBI) Comment on/Opposition to "Motion for Reconsideration ..." dated March 3, 2022 of Commissioner of Internal Revenue, filed on April 21, 2022. For easy reference, the dispositive portion of the assailed Decision reads: "WHEREFORE, in view thereof, the instant Petitions for Review in CTA EB No. 2320 and CTA EB No. 2327 are DENIED, for lack of merit. SO ORDERED."1 In his motion, petitioner CIR observes that respondent SMBI primarily seeks to nullify the relevant provisions of Revenue Memorandum Circular No. 90-2012. Hence, he raises the issue that the Court of Tax Appeals (CTA) has no jurisdiction to determine the validity of the rules, regulations and other administrative issuances of the BIR. On the other hand, respondent SMBI observes in its comment that petitioner CIR merely rehashed his arguments. After careful consideration of the present issue, the Court En Bane resolves to deny the instant motion. As clearly explained in the Banco de Oro case2 as cited by the Court in Division: "The Court of Tax Appeals has undoubted jurisdiction to pass upon the constitutionality or validity of a tax law or regulation when raised by the taxpayer as a defense in disputing or contesting an assessment or claiming a refund. It is only in the lawful exercise of its power to pass upon all matters brought before it, as sanctioned by Section 7 of Republic Act No. 1125, as amended. This Court, however, declares that the Court of Tax Appeals may likewise take cognizance of cases directly challenging the constitutionality or validity of a tax law or regulation or administrative issuance (revenue orders, revenue memorandum circulars, rulings)."lc- 1 Court En Bane Docket, p. 172. 2 G.R. No. 198756, August 16,2016,800 SCRA 392.

RESOLUTION CTA EB NOS. 2320 & 2327 Page 3 of3 Thus, the Supreme Court categorically declared that the CTA has jurisdiction to rule upon the validity of a tax law or regulation when raised by the taxpayer as a defense in claiming a refund, as in this case. Considering the foregoing, the Court En Bane finds petitioner's argument untenable and as such, the denial of the instant motion is in order. WHEREFORE, petitioner Commissioner of Internal Revenue's Motion for Reconsideration (Re: Decision promulgated 21 February 2022) in CTA EB No. 2327 is DENIED, for lack of merit. SO ORDERED. I�. Q.,a-_.t{; c.~"'-'-'~ WE CONCUR: riJANITO C. CASTANEDA, JR. Associate Justice Presiding Justice ~.a.- -1/L ER~.UY MA. BELEN M. RINGPIS-LIBAN Associate Justice Associate Justice /1~'7~/~ CX'THERINE T. MANAHAN Associate Justice ..- JEAN IVIAKU'~ MARIA Rf>w:El'iA'hvt'b:tlEsTo-.-,f\.1 ~ ~r.~,r~ MARIANI-ik F. RE~ES-FkoiARDO Associate Justice ~~~{, LANEE S. CUI-DAVID Associate Justice