CTA Case No. 2840 (Decision)

r REPUBLIC Of THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY ATLAS CONSOLIDATED MINING & DEVELOPMENT CORPORATION, Petitionttr, ' - ve r s Li s - C.T.A. CASE NO. 2840 COMMISSIONER OF INTERNAL REVENUE, X- - Respondent. - - - - - - )( ATLAS CONSOLIDATED MINING & DEVELOPMENT CORPORATION, Petitioner, - v er s Li s - C.T.A. CASE NO. 3091 COMMISSIONER OF INTERNAL REVENUE, - - )( Respondent. ------X ATLAS CONSOLIDATED MINING & DEVELOPMENT CORPORATION, Petitioner, - versLis - C.~.A. CASE NO . 3426 I,. COMMISSIONER OF INTERNAL I REVENUE, )( - - Respondent. I I t-2 2 CJ I - - - - - - )( ATLAS CONSOLIDATED MINING & DEVELOPMENT CORPORATION, Petitioner, - versLis - C.T.A. CASE NO. 3696 COMMISSIONER OF INTERNAL REVENUE, X- - - - - - Respondent. - )( 580

DECISION - CTA CASES NOS. 2840, 3091, 3426 & 3696 - 2- DE C s J: 0 N The above-captioned cases involve a claim for refund and/or tax credit by petitioner. These cases were consolidated for they involve the same taxpayer/claimant and same respond~nt, the same set of facts and circumstances, except far the period covered and the amount involved, the same kind or nature of evidence and the same issue. Petitioner in these consolidated cases is a mining corporation duly organized and existing under and by virtue of the laws of the Phi~__.ippines, and is engaged in the activity of mining in Toledo City. �'' It appea.rs that peti tftoner purchased on I�� various dates from Petrophil cdrporation and Mobil Oil Phils. manufactured oils and fuels wherein specific taHes due thereon have been paid in the total amount of P27,662,185.23 (see petitioner �s Exhibits G, G-1 to G-11, H, H-1 to H-7 . I, I-1 to I - 33 in CTA Case Ho. 2840.: E.>fhs. G, G-1 to G-101, G-1A to G-1<.HA in CTA Case No. 3091; D.� E and F .� G, G-1 to G-76, G-(a), G-1fa) to G-74(a} .� H, H-1 to H-207, H-(a), H-1fa) to G-74(a), H, H-1 to H-207 .� Hfa), H-1(a) to H-207fa) in CTA Ca s e Ho. 3426; 581

DECISION - CTA CASES NOS. 2840, 3091, 3426 & 3696 - 3- Exhs. D., D- 1 ., F ., F - 1 ., B and C in CTA Case No. On the basis of the aforesaid payments of specific: ta>tes~ petitioner believes it should be refunded 25% of taxes paid on those purc:h~ses pursuant to the provisions of S~c:tion 5 of Republic: Ac:t No. 1435 in relation to Sections 142 and 145 of the old Code (now Sections 153 and 156 of the 1977 Ta>: Code). Petitioner therefore~ in these consolidated c:ases filed on various dates its c:laim for ta>t credit before the Commissioner of Internal Revenue (see Exhs. A, B and C in Cta Case No. 2840; Exh. A in CTA Case No. 3091; Exh. A in CtA Case No. Petitioner wi thoLit waiting \Itor a decision of 'I respondent Commissioner on its v~'rious c: laims for refund in the above-captioned consolidated c:ases~ interposed its appeal to this Court. The only issue in these c:ases is whether or not petitioner is entitled to a tax credit of 25% of the specific: ta>t paid on petroleum products purchased and actually used and/or consumed in its mining operation at Toledo City pursuant to Section 5 of Republic: Ac:t No. 1435 in relation to Sections 153 C\nd 156 of the 1977 Ta>t Code. �� 582

DECISION - CTA CASES NOS. 2940, 3091, 3426 & 3696 - 4- The only issue in these cages is purely legal and no longer of first impression. In one case, the decision of the Court of Tax Appeals in granting petitioner� s c 1aim for refund on the 25% specific taxes paid was affirmed by the Supreme Court, when it stated that there is no limit to the partial refund of specific taxes paid for oils used by miners and forest concessionaires, while there is a limit to the partial refund of specific taxes for oils used in agriculture and aviation to five years, and that Sec. 5 of Republic Act No. 1435 which makes reference to sub-paragraphs 1 and 2 of Section 1 is merely for the purpose of prescribing the procedure of refund. (see Insular Lu�ber II Coapany vs. Court o~ Tax App�al� and Coa�ission�r 'I o~ Int�rnal Revenue~ G.R. No. ~-31057~ Hay 29~ Court o~ Tax Appeals and Insular Luaber� Coapany ., G.R. No. L-.311.37 ., 11ay 29., 1981 ., 104 SCRA 710). In another case~ the Supreme Court likewise iilffirmed again the decisions of the Court of Appeals and the Court of Tax Appeals when it stated that mining cilnd lumber concessionaires were granted th~ partial refund because the gasoline and fuel they consumed are mostly used within their own compound � and 583

DECISION - CTA CASES NOS. 2840, 3091, 3426 & 3696 -- 5 - roads. Republic Act 1434 gave these conces- sionaires relief in the form of a ta>: refund (see Resolution in the case of Coaaissioner of Internal Revenue vs. Atlas Consolidated lfinint} and Developaent Corporation, et al � .* G.R . No. 93631~ November 12~ 19901. However~ in the latest decision of the Supreme Court in the case of Coaaissioner of Internal Revenue vs. Rio Tuba Hickel #fining Corporation and Court of Tax Appeals, G.R. Nos. 83583-84~ Sept~mber 30, 1991~ the decision of the Court of Tax Appeals applying R.A. 1435 and granting the refund for specific taxes paid on fuels and oils used was ~et aside. The High Court deemed that R. A. 1435 had outlived its usefulness. The Supreme Court held: Thus we find that the disputed proviso found in Section 5 of RA No. 1435 was drafted to favor a particular group of ta:-: payers the miners and the lumbermen because it was "unfair" to subject them to the increased rates and in effect make them .subsidize the construction of highways from which they did not directly benefit. This i s the raison d � etre for the grant of partial tax exemption under RA No. 1435. Now~ if by virtue of PD No. 711~ the funds that have accrued from the various special funds are channeled to the so-called General Fund~ then there is no need or justification for the continued special treatment accorded to the miners. With PD No. 71 1~ any government project can be 58/:

DECISION - CTA CASES NOS. 2840, 3091, 3426 & 3696 - 6- the beneficiary of such funds as long as it is for the general welfare of the masses. Given the present concept of the general fund its wide application~ then the pt-ovi so in Section 5 of RA No. 1435 has trLtly become an anachronism. It is inevitable that~ soo ner or later~ the miners will stand to benefit from any of the government endeavors and it wi 11 no longer be correct to asseverate that the imposition of the increased rates in specific taxes to augment th� general fund for government undertakings is "unfair" to the miners because they are not directly convenienced. While we generally do not favor repeal by implication~ i t cannot be denied that situations can and do arise wherein we are left with no other alternative but to concede the point that a n earlier law has been impliedly repealed or revoked by a later law because of an obvious inconsistency . Tax measures~ in recent years~ have pro 1i fer a ted to a 1arming proportions. More often than not, they serve to worsen the already growing confusion in the mind s of our taxpayers. The~e is much to be said about the strong and persuasi ve arguments of both sides but we are compelled to abide by the maxim thc"lt all doubts must be resolved in favor of the ta>: ing au t hor i ty and that taH e xemptions (or ta H refunds for that matter) must be strictly construed and c an only be given force when the grant is clear and categorical. We therefore hold that the tax refunds in the amounts of P695,216. 36 and P859,076.90 in favor of private respondent Rio Tuba must be set aside." On the basis of the above-quoted decision~ this Court is therefore constrained to deny petitioner ' s claim for refund and/or tax credit. 585

DECISION - CTA CASES NOS. 2840, 3091, 3426 & 3696 - 7- WHEREFORE, petitioner's claim for refund in this consolidated cases is hereby DENIED. With costs against petitioner. SO ORDERED. Quezon City~ Metro Manila~ December 24, 1991. ~,.:i_;Q-.~ ERNESTO D. ACOSTA Associate �Judge I CONCUR: --- vj~ rf. ANTE ROAGUIN sociate Judge CERTIFICATION I hereby certify that this decision was reached after due consultation between the members of the Court of Tax Appeals in accordance with Section 13, Article VIII of the Constitution. ANTE'tU.~-RO-AGUIN Act' g Presiding Judge Cotrt of Tax Appeals 586