VILLARICA PAWNSHOP, INC. v. COMMISSIONER OF INTERNAL REVENUE

REPUBliC Of THE PHiliPPINES Coon of .Jax Appeals QUEZON CITY JIIBAKC VILLARICA PAWNSHOP, INC., C.T.A. E.B. NO. 293 Petitioner, (C.T.A. CASE NO. 7047) Present: -versus- ACOSTA, P.J. CASTANEDA, JR., BAUTISTA, I UY, CASANOVA, and PALANCA-ENRIQUEZ, JJ. COMMISSIONER OF INTERNAL Promulgated: REVENUE, JAN 1 6, 2003.<1)-~t',,,f.)va "rt~-� Respondent. _ _ _ _ _ _ ___.:;_/'_ '/?/ti'JI ', Jl!}\ ' X-- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -X jG DECISION UY, J.: This is a Petition for Review before the Court of Tax Appeals En Bane filed on July 27, 2007 seeking a review of the Decision and Resolution dated October 30, 2006 and June 19, 2007, respectively, rendered by the First Division of this Court1 (Court in Division) in C. T. A. Case No. 7047 entitled "Villarica Pawnshop: Inc.,. petitioner; 'vs. Commissioner of Internal Rev�enue, respondent", pursuant to Section 18 of Republic Act No. 9282, the dispositive portions of which read as follows: ~\ 1 Ponencia of Associate Justice Lovell R. Bautista, and concurred by Presiding Justice Ernesto D. Acosta and Associate Justice Caesar A. Casanova.

DECISION C.T.A. EB NO. 293 Decision promulgated on October 30, 2006: "WHEREFORE, premises considered, the Petition for Review is PARTIALLY GRANTED. The deficiency VAT assessment in the amount of P6,950,066.85 for taxab~ year 1997 is hereby CANCELLED and .SET ASIOE�and the respondent is ORDERED to issue the con'esponding Authority to Cancel Assessment. The amount of P50,000.00 imposed by way of compromise penalties is likewise CANCELLED. However, the deficiency DST assessment for taxable year 1997 is hereby AFFIRMED. Accordingly, petitionE:;r is ORDERED to PAY respondent the amount of P545,220.00 representing deficiency DST for taxable year 1997, plus 20% delinquency interest from February 20, 2001 until fully paid pursuant to Section 249 of the 1993, NIRC, as amended. SO ORDERED." Resolution promulgated on��June 19, 2007: "WHEREFORE, premises considered, petitioner's Motion for Recon:sideration is hereby DENIED for lack of merit. so ORDERED. II THE FACJ"$ The undisputed facts, as found by the Court in Division, are as follows: Petitioner, Villarica Pawnshop, Inc., a corporation duly existing and organized under and by virtue of the laws of the Republic of the Philippines, is engaged in the pawnshop business with principal address at 876-N Aurora I Blvd., Cubao, Quezon City. Respondent, Commissioner of Internal Revenue, on the other hand, is the duly appointed officer authorized to assess internal revenue taxes, among others, with office address at the BIR Building, BIR ' Road, Quezon City and herein represented by Regional Director Teodorica R. Arcega, with office address at BIR Revenue Region No. 6, 4th Floor BIR Building, Anda Circle, Port Area, Manila;

� J DECISION 1./ C.T.A. EB NO. 293 On January 18, 2001, petitioner receiVed from the Commissioner of Internal Revenue Demand Letters with attached Assessment Notice No. 32- :97, all dated January 16, 2001, apprising it of it~Value Added Tax (VAT) and Documentary Stamp Tax (DST) liabilities in the amou':lts of P6,950,066.85 and P545,220.00, respectively, and compromise penalties for the taxable year 1997. On February 2, 2001, petitioner protested the assessments on the grounds, among others, that pawnshops are not liable to pay the VAT and a pawn ticket is not subject to DST. On June 24, 2001, petitioner received from the respondent a Letter of Demand dated July 12, 2001 for it to pay the amounts of P6,975,006.85 and P570,220.00 representing deficiency VAT and DST, respectively, pursuant to the Memorandum dated May 31, 2001 issued by Atty. Mario A. Saldevar sustaining petitioner's liability for deficiency VAT and DST. Then, on August 14, 2003, petitioner received a 1st Notice dated April 23, 2002 issued by Chief Edna L. Tesorero of the Collection Section of the BIR Revenue Region No. 6, Revenue District Office No. 32. Subsequently, on June 4, 2004, the BIR, through respondent Commissioner of Internal Revenue, and the Chamber of Pawnbrokers of the Philippines, Inc. (CPPI) entered into a Memorandum of Agreement (MOA) for the settlement of all the VAT liabilities of pawnshops for the taxable period of 1996 to 2002. Under the MOA, for the taxable years 1996 to 2002, the members of the CPPI undertook to pay twe11ty-five percent (25%) of their assessed VAT liability, as assessed by the BIR or based on self-assessment by the members.~

DECISION ) C.T.A. EB NO. 293 In accordance with the terms of the MOA, petitioner settled its VAT liability for the taxable years 2000 to 2002 on June 27, 2004 and for the VAT liability for the taxable years 1996 to 1999, ps\itioner settled the same on December 15, 2004. In a letter dated July 19, 2004 and received by petitioner on August 3, 2004, Regional Director Teodorica R. Arcega denied with finality petitioner's protest. Thus, on September 2, 2004, petitioner filed a Petition for Review of the said Final Decision with the First Division of this Court docketed as C.T.A. Case No. 7047. In its Decision promulgated on October 10, 20062 , the Court in Division ordered the respondent to set aside the VAT assessment and to issue the corresponding Authority to Cancel Assessment on the ground that the petitioner has complied with the MOA executed by the respondent and the CPPI by paying on December 15, 2004, 25% of its basic VAT liability for the years 1996 up to 1999, thereby rendering the deficiency VAT assessment for taxable year 1997 moot and academic. However, the Court in Division ordered the petitioner to pay the DST assessment amounting to P545,220.00, citing the recent case of Michel J. Lhuillier Pawnshop, Inc. vs. Commissioner of Internal Revenue3 wherein the Supreme Court finally put to rest the issue as to why all pledges, such as the security offered to the pawnee in satisfaction of the pawner's indebtedness, are subject to DST under Sections 173 �and 1'95 of the National Internal Revenue Code (NIRC) of 1997. The Supreme Court said that "(i)t is clear from the foregoing provisions that the subject of a DST is not limited to the document embodying the~ 2 Docket, pp. 51 - 64. 3 G.R. No. 166786, May 3, 2006.

' DECISION J . C.T.A. EB NO. 293 enumerated transactions. A DST is an excise tax on the exercise of a right or privilege to transfer obligations, rights or properties incident thereto."4 Petitioner file! its Motion for Partial Reco~;=;ideration on November 22, 2006 seeking the partial reconsideration of the aforesaid Decision but the same was denied by the Court in Division in the assailed Resolution dated June 19, 2007 5. THE ISSUES The petitioner ratses the following issues for the Court En Bane's consideration: A. Whether or not the pawn ticket may be subjected to DST under Section 195 of the NIRC of 1997; B. Whether or not the pawnshop business, in general, and Villarica, in particular, are subjed to VAT under Section 105 in conjunction with Section 108 of the NIRC of 1997. PETITIONER'S ARGUMENTS With respect to the issue as to whether or not petitioner's pawn ticket is subject to DST, petitioner argues that since the DST assessment is solely based on Revenue Memorandum Order (RMO) No. 15-91 and Revenue Memorandum Circular (RMC) No. 43-91, which have already been rendered .. void by the Supreme Court on July 15, 2003 in the case pf Commissioner of Internal Revenue vs. Michel J. Lhuillier Pawnshop, Inc. in G.R. No. 150947, therefore, it necessarily follows that the said assessment is also void. ~ ~� 4 Ibid. 5 Docket, pp. 65- 69.

� DECISION , C.T.A. EB NO. 293 Further, petitioner points out that since respondent never claimed that a pawn ticket is an "evidence of the exercise of the privilege to enter into a contract of pledge!' as the basis for t1'le DST asses~ment, 'the Court in Division �., cannot supplant the legal basis of.the assessment, particularly with one that has never been raised, nor can it cure an assessment that is void ab initio. Lastly, petitioner maintains that Presidential Decree (PO) No. 114 (Pawnshop Regulation Act) categorically provides that a pawn ticket is not an "evidence of indebtedness" and in using the words "evidence of the exercise of the privilege to enter int~ a contract of pledge" in lieu of the words "evidence of indebtedness", the Court in Division circumvented, in effect, PO No. 114. With respect to the second issue, We take note that the Court in Division considered the said issue as moot and academic arising from petitioner's payment of 25% of its basic VAT for the years 1996 - 1999 pursuant to the compromise under the MOA executed by the Chamber of Pawnbrokers of the Philippines, Inc (CPPI) and the Bureau of Internal Revenue. However, petitioner stresses that considering that pawnshops are not included among the enumerated items in Section' 108 of the NIRC of 1997, pawnshops should not be included under the term "similar services" that are considered to be subject to VAT since the circumstances affecting the nature of the pawning business are vastly different from those of lending investors. Moreover, petitioner points out that despite the numerous amendments on the tax laws, still, pawnshops are not included in the long list of service( 67 .I

DECISION ' � . C.T.A. EB NO. 293 that are subject to VAT; thus, allegedly showing that Congress never intended f to, and actually did not, subjed�pawnshops to VAT. In conclusion, petitioner prays that t~~ Court En Bane declare the DST �;, Assess.ment and Final Demand for Payment for such deficiency as null and void for lack of legal and factual basis, direct the BIR to issue the corresponding Authority to Cancel Assessment, and declare that pawnshops are not liable for VAT. RESPONDENT'S COUNTER-ARGUMENTS On the contrary, respondent contends that while it is true that PO No. 114 (Pawnshop Regulation Act) defines a pawn ticket as the pawnbroker's "receipt" for a pawn, this does not detract from the fact that such receipt is also an instrument evidencing pledge. Thus, pawnshop tickets maybe both a receipt and a pledge document at the same time. It does not matter whether s~h pawnshop ticket is designated by name as a receipt or pledge. What matters is the nature of the instrument considering that the DST is imposed on the transaction itself, not merely on the instrument. Additionally, respondent puts forth the doctrine enunciated in the ... decisioP. of the Supreme Court in the case of Michel J. Lhuil/ier Pawnshop, . Inc. vs~ Commissio.ner of Internal /~evenue6 to be applicable in this case . because, in both cases, the DST assessments were both assessed based on Section 195 of the NIRC of 1997. Thus, the Supreme Court is allegedly right ' when it ruled therein that, there is no way that Section 195 of the NIRC of 1997 be interpreted in favor of the pawnshop owner; that Section 195 unqualifiedly subjects all pledges to DST as it states that "on every xxx pledge ~ 6 Supra. ~ 68.

, DECISION C.T.A. EB .'NO. 293 xxx there shall be collecte.d ? documentary stamp tax xxx." The provision is ' allegedly clear, categorical and needs no further interpretation or construction and the explicit tenor thereof requires hardly) anything that a �simple application. Furthermore, according to respondent, only those instruments, documents and papers or transactions that are enumerated in Section 199 of the NIRC of 1997 will be considered as exempt from DST because laws granting exemption from tax are construed in strictissimi juris against the taxpayers. Pawn transactions do not fall under the enumeration found in the said section, therefore, it is subject to DST. On the issue of the VAT assessmen~, ~espondent argues that the law is clear, simple and unambiguous when it states that all sellers of goods, properties and services whose aggregate gross annual sales of articles and I or services exceed P550,000.00 will be covered by VAT unless such sales are either zero-rated VAT or exempt from VAT. The act of lending money on personal property delivered as security for loan and the subsequent payment of interest imposed on a borrower undoubtedly constitutes a sale of services for a fee, remuneration or consideration subject to VAT under Section 108 of the NIRC of 1997. Respondent likewise stresses that the enumeration of sale of services or use or lease of properties subject to VAT in Section 108 of the NIRC of 1997 is not exclusive so as to exempt petitioner since the law speaks of "all kinds of services". At the same time, the use of the word "including" preceding the enumeration is not a limitation on the transactions expressly T.tr.\ mentioned to be subject to VA

DEPSION ' . C.T.A ..EB NO. 293 THE COURT EN BANG'S RULING .The Petition is devoid of merit. A careful and closer look at the arguments set forth by the petitioner in ' . the instant petition for review, and its annexes, v:h:>uld readily reveal that the grounds relied upon and the matters raised herein are mere restatements of petitioner's previous arguments raised before the Court in Division that had already been exhaustively discussed and passed upon in the assailed Decision and Resolution promulgated on October 30, 2006 and June 19, 2007, respectively. With the end view, however, of further clarifying the Decision of the Court in Division, WfP look into the provisions on DST in the NIRC of 1997, particularly, Sections 173 and 195 thereof, which read as follows: "SEC. 173. Stamp Taxes Upon Documents, Loan Agreements, Instruments, and Papers. - Upon documents, instruments, loan agreements and papers, and upon acceptances, assignments, sales and transfers of the obligation, right or property incident thereto, there shall be levied, collected and paid for, and in respect of the transaction so had or accomplished, the corresponding documentary stamp taxes x x x." (Emphasis supplied) "SEC. 195. Stamp Tax on Mortgages, Pledges, and Deeds of Trust. - On every mortgage or pledge of lands, estate, or. property, real or personal, heritable or movable, whatsoever, where the same shall be made as security for the payment of any definite and certain sum of money lent at the time or previously due and owing or forborne to be paid, being payable and on any conveyance of land, estate, or property whatsoever, in trust or to be sold, or� otherwise converted into money which shall be and intended only as security, either by express stipulation or otherwise, there shall be collected a documentary stamp tax at the following rates: (a) When the amount secured does not exceed Five thousand pesos (P5,000), Twenty pesos (P20). (b) On each Five thousand pesos (P5,000), or fractional part thereof in excess of~~ ,'~ \)..

, DECISION C.T.A. EB NO. 293 Five thousand pesos (P5,000), an additional tax of Ten pesos (1 0.00). x x x x." (Emphasis supplied) It is clear from the foregoing provisions that the subject of a DST is not limited to the document, pawn ticket per se, embodying those transactions enumerated, but rather, it is the transaction involved that is being taxed. A DST is an excise tax on the exercise ~f.~ a right or privilege to transfer ..., � obligations, rights or properties incident thereto. 7 It is really imposed on the privilege to enter into a transaction rather on the document. The law taxes the document because of the transaction which it embodies. 8 Thus, We agree with the finding of the Court in Division when it said that: "From the foregoing (referring to the afore-quoted legal provisions), on every pledge of personal property made as a security for the payment of a certain sum of money, a documentary stamp tax is hereby imposed. Thus, the pawn tickets issued by the petitioner evidencing its exercise of the privilege to enter into a contract of pledge are subject to DST. In fact, the Supreme Court, in the more recent case of MICHEL J. LHUILLIER PAWNSHOP, INC. vs. COMMISSIONER OF INTERNAL REVENUE, finally put to rest the issue of why all pledges such as the security offered to the pawnee in satisfaction. of the pawner's indebtedness are subject to DST under Sections 173 and 195. We quote: 'lt"is clear from the foregoing provisions (referring In Philippine Home Assurance Corporation vs. Court of Appeals, it was held that: "In general, documentary stamp taxes are levied on the exercise by persons of certain privileges conferred by law for the creation, revision, or termination of specific legal relationships through the execution of specific instruments. Examples of such privileges, the exercise of which, as X! ~ 7 Michel J. Lhuillier Pawnshop, Inc. vs. Commissi6ner of Internal Revenue, Ibid. 8 The Law on Transfer and Business Taxation, HectorS. de Leon, 1998 ed., p.351.

, DECISION (.T.A. EB NO. 293 Pagellofl7 effected� tflrough t~e� issuance of particular documents, �are subject to the payment of documentary stamp taxes are leases of lands, mott~Cilges, pledges, and trusts, and conv~lctnce~ of real ~property." (Emphasis add,~d).: � Pledge is among the privileges, the exercise of which is subject to DST. A pledge may be defined as an accessory, real and unilateral contract by virtue of which the debtor or a third person delivers to the <?reditor or to a third person movable property as security for the performance of the principal obligation, upon the fulfillment of which the thing pledged, with all its accessions and accessories, shall be returned to the debtor or to the third person. This is essentially the business of pawnshops. which are defined under Section 3 of Presidential Decree No. '114, or the Pawnshop Regulation Act, as persons or entities engaged in lending money on personal property delivered as security for loans. XXX Section 3 of the Pawnshop Regulation Act defines a pawn ticket as follows: 'Pawn ticket' is the pawnbrokers' receipt for a pawn. It is neither a security nor a printed evidence of indebtedness." True, the law does not consider said ticket as an evidence of security or indebtedness. 1 However, for the purposes of taxation, the same pawn ticket is proof of an exercise of a taxable privilege of concluding a contract of pledge. At any rate. it is not said ticket that creates the pawnshop's obligation to pay DST but the exercise of the privilege to enter into a contract of pledge. There is therefore no basis in petitioner's assertion that a DST is literally� a tax on a document and that no tax may be imposed on a pawn ticket." (Underscoring Ours) It is a settled principle that equity and law always exalt substance over form. It is the nature of the instrument which will determine whether it will be subjected to DST or not. Thus, it does not matter that the pawn ticket is defined by PO No. 114 as a receipt for a pawn. This does not alter the fact that such receipt is also the document evidencing a pledge contract that is) �~I~~

,DECISION ' . C.'T�. A. EB NO. 293 Page l2 of17 f . subj~ct to DST. 9 In fact, even P.O. No. 114 itself acknowledges that ' pawnshops enter into contracts of pledge when it defined a "pawn" as the J ... . ~~ . .~ ~ '. personal property delivered by the �~awner to t~e pawnee as security for� a ~- ' �� ..Io'� on .10 Petitioner's reliance on the declarlition of nullity of RMO No. 15-91 and RMC No. 43-91 in the case of COMMISSIONER OF INTERNAL REVENUE vs. MICHEL J. LHUILLIER PAWNSHOP, INC. is misplaced whereby it argues that since these reyenue memorandums, over which the DST assessment is. solely based, have been declared null and void by the Supreme Court, the DST. assessment- made by the respondent against the ' � I petitioner is void ab initio. RMC No. 43-91 is actually a clarification of RMO No. 15-91 which classified pawnshops as "lending investors" and imposed upon them a 5% lending investor's tax, while RMC No. 43-91 declared, in addition, that since pawnshops are considered as lending investors effective January 1, 1991, they also become subject to documentary stamp taxes. It should be noted that in the Michel J. Lhuillier Pawnshop Inc, case, the main issue therein is whether or not pawnshops are included in the term "fending investors" for the purpose of imposing the 5% percentage tax under I then Section 116 of the NIRC of 1977, as, amended by EO No. 273. And in said case, the Supreme Court declared, among others, and in relation to RMC No. 43-91, that pawnshops cannot be classified as lending investors for purposes of imposing the 5% percentage tax. Note that in the above- ~ ~ 9 Westchester Corporation vs. Commissioner oflnternal Revenue, C.T.A. EB No. 127, May I7, 2006. �1 Commissioner of lntemal Revenue vs. Antam Pawnshop Corp., CA-G.R. SP No. 79117, January 21, 2005.

DECISION ' ' C.'T;~,"EB NO. 293 'P~tl3. ?.r 17 .�� ,; . m�'�entif'::med case, there was no similar enumeration as to the kind of services ' ; ~- as: hJ Section 108 of the NIRC of 1997, .b~t congress expressly deleted . . pa~ns'hops from the enumeratiort of those sybjeG~ to 5% percentage tax.~� � ' �' I .' ' ' ' . Nowh.ere was it ruled therein that �pawnshops are not subject to DST or to �' Value Added Tax (VAT). In fact, such was never an issue in said case because the pawnshop involved was not assessed to pay DST. ! Now, with regard to the second issue, We look into the pertinent provisions of Section 108 of the NIRC of 1997 relating to VAT on sale of services. We quote: "SEC. 108. Value-added Tax on Sale of Services and Use or Lease of Properties. - (A) Rate and Base of Tax. -There shall be levied, assessed and collected, a value-added tax equivalent to ten percent (1 0%) of gross receipts derived from the sale or exchange of services, including the use or lease of properties. The phrase 'sale or exchange of services' means the performance of all kinds of services in the Philippines for others for a fee, remuneration or consideration, including those performed or rendered by construction and service contractors; stock, real estate, commercial, customs and immigration brokers; lessors of property, whether personal or real; war~housing services; lessors or distributors of cinematographic films; persons engaged in milling, processing, manufacturing or r~pc;tcking !)oods for others; proprietors, operators or keepers of hotels', motels, rest houses, pension houses, inns, resorts; proprietors or operators of restaurants, refreshment parlors, cafes and other eating places, including clubs and caterers; dealers in securities; lending investors; transportation contractors on their transport of goods or cargoes, including persons who transport goods or cargoes for hire and other domestic common carriers by land, air and water relative to their transport of goods or cargoes; services of franchise grantees of telephone and telegraph, radio and television broadcasting and all other franchise grantees except those under Section 119 of this Code; services of banks, non- bank financial intermediaries and finance companies; and non- life insurance companies (except their crop insurances), including surety, fidelity, indemnity and bonding companies; and~\ ? �1

DECISION , ' C.T.A. EB NO. 293 similar services regardless of whether or not the performance thereof calls for the exercise or use of the physical or mental faculties ..xxx" (Emphasis supplied) i '. ~ From the above provision�, it 'i3_Very clear that,the sale or exchange of � .~ . i" s~rvices is subject to VAT and it d~fine.s the phrase "sale of services" as the � . ~"performance of all kinds of servi~es for others for a fee, remuneration or consideration". As long as the entity p_rovides service for a fee, remuneration or consideration, then the service rendered is subject to value-added tax. 11 Such is broad eno'ugh to cover the kind of service that is lending money in consideration of personal pro~~rties delivered by clients of pawnshops as security for loans, which without such pawn, the latter will not extend any loan to the borrower. In addition, the enumeration found under Section 108 (A) is not exclusive and is intended only as an example of persons or businesses performing services for a fee, remuneration or consideration. Thus, other I persons performing services for a fee, remuneration or consideration, who are not expressly mentioned in the enumeration, are also subject to VATY To confine� the applicability of Section 108 to the enumerated entities would negate the unequivocal meaning of the phrase "performance of all kinds of services". 13 Even under the principle of "Ejusdem Generis", We can say that for VAT purposes, the functions of a pawnshop is similar to a "lending investor:', as specifically enumerated under Section 108 of the NIRC of 1997. ~ 11 Commissioner of Internal Revenue vs. Commonwealth Management Services Corp., G.R. No. 125355, March 30,2000, 329 SCRA 237. 12 Commissioner of Internal Revenue vs. first Express Pawnshop Company, Inc., C.T.A. EB No. 60 and First Express Pawnshop Company, Inc. vs. Commissioner of Internal Revenue, C.T.A. EB No. 62, March 24, 2006. 13 Kwik Loans Pawnshop, Inc. vs. Commissioner of Internal Revenue, C.A.-G.R. SP No. 79158, November 18, 2005. Commissioner of Internal Revenue vs. Trustworthy Pawnshop, Inc., C.A.-G.R. SP No.68593, December 5, 2005.

, DECISION <;::.T.A. EB NO. 293 Basic is the rule in statutory construction, that where the law speaks in ~. clear and categorical language, there is no room for interpretation. There is !. onl.y\ .room for application. This Courfhas n......... choiG~ but to see to it that its ' � mandate is obeyed .14 The provision �b~ Sect�i;n 108 is crystal clear as to its purpose of subjecting sales of atl kind~ of services to VAT. Moreover, the transaCtions of pawnshops are not among those enumerated in Section 109 of the NIRC of 1997 as exempt from VAT under Section 108(A). If it was indeed the int~ntion of the legislature to exciLJde pawnshops from the imposition of VAT, as petitioner claims, why was it not included in the enumerated exemptions? Thus, contrary to the claim of the petitioner, the Court En Bane concludes that it is the legislature's intent to subject pawnshops to VAT; otherwise, it could have included pawnshops among those exempted from VAT. However, in line with the MOA that was entered into by CPPI and the respondent covering a compromise settlement with regard 'to VAT liabilities of pawnshops for th~ taxable years 1996 - 2002, in which petitioner has accordingly paid for its VAT liabilities pursuant thereto, the deficiency VAT assessment for the taxable year 1997 is rendered moot. Hence, in the Decision dated October 30, 2006 of the Court in Division, it cancelled and set aside the said VAT assessment and ordered respondent to issue the corresponding Authority to Cancel Assessment. Well-settled is the rule that tax exemption must be expressed in the f I statute in clear language. The exemption must be interpreted in strictissimi 14 Commissioner oflnternal Revenue vs. American Express lnt'l., Inc. (Phil. Branch), G.R. No. 152609, J~me 29,2005. '/6

, DECISION ~.T.A. EB NO. 293 juris against the taxpayer and liberally in fa~o~ of the taxing authority. 15 For taxes, being the lifeblood of the gC?vernment, are meant to be paid without \ delay and often oblivious to contingen;.res qr� conditi9ns. 16 The tax exemption �cannot arise by mere implication and an! doubt about whether the tax oI . �exemption exists is strictly construed against the taxpayer and in favor of the taxing authority. 17 In the light of the foregoing discussions, the Court En Bane finds no reversible error committed by the Court in Division that would merit a reversal of its assailed Decision and Resolution dated October 30, 2'006 and June 19, 2007, respectively. WHEREFORE, premises considered, the instant petition is hereby DENIED and accordingly DISMISSED lack of merit. SO ORDERED. ~~ AEsRsoL~rr<e.ID-A'PY ustice WE CONCUR: (~--~- c~ ERNESTO D. ACOSTA Presiding Justice 15 Philippine Long Distance Telephone Company, Inc. vs. City of Bacolod, et al., G.R. No. 149179, July 15,2005. . 16 Dr. Felisa L. Vda. De San Agustin vs. Commissioner of Internal Rev~nue, G.R. No. 138485, September I0, 2001. 17 China Banking Corporation vs. Court of Appeals and Commissioner of Internal Revenue, G. R. Nos. 146749 and 147938, 403.SCRA 634, June 10,2003.

DECISION c_::.T.A. EB NO. 293 Q~ (2. ~~~ "9, . . (J\JANITO C. CASTANEDA:J~. ~ Associate Justice CAES~ANOVA ~(___-- Associate Justice OLGA PALANCA-ENRIQUEZ Associate Justice CERTIFICATION Pursuant to Section 13, Article VIII of .the Constitution, it is hereby certified that the conclusions in the above decision were reached in consultation before the case was assigned to the writer of the opinion of the Court En Bane. L~. c~~ ERNESTO D. ACOSTA Presiding Justice