CTA Case No. 4045 (Decision)

tt:i.J' �ll. K: OlP 'H : 1-liUl'f'<l'�''� ~OU T 0' TAX APP�AU Q:uao C:J nr �' ' DEVELOPME NT BANK OF THE PHILIPPINE ~:;. Petit:ion er, - versus - C.T.A. CASE NO. 4045 THE COMMISSIONER OF CUSTOMS, Respondent. X- - - - - - - - - - - - - X f131 /g7 DECI S I 0 N The case be fore Us p rese n ts no dispu te a s to the relatively simple material � facts but the parties seem trying to get t h e better of each oth~r over by a quibble as tJ the proper import of Section 4(c ) , Executive Order No. 1078, dated January 10 , 1986, 1hich provides : "The amount of taxes due on the income of the Bank beginning with CY 1985 as well as such ot her taxes, duties,fees , assessments , charges and other imposts due on all trans- action s or operations of the Bank) is hereby appropriated under this Executive Order to be automatic ~ Jly applied to the payment of the sub- scription of the Government in the capital stock is fully paid for. 0 Petitioner governmental financial institu t io n c~eated and operat e d pursuant to R.A. No. 85, as I '

DECI SION - - 2- CTA CASE NO. 4045 ,. . amended, imported from the United States for its ow n use various IBM computer equipm e n t sometime durin9 t he period from May, 1985 to January, 1986 . The total amou nt of E5, 562 , 926.00 r e present ing the correspondi ng customs duties , compensating taxes and import proc ess ing fees was accordingl y paid to the Bureau of Customs. Pursuant to the pro vjsio n of Section 4, su pr.�_, petitioner r equested the refund of s uch paym e nts on Febr ua ry 4, 1 986 but whi c h res- pond ent denied in a l etter to petitioner on March 4, 19 86 . Hen ce, t hi s petition f or review. The respondent Comm i ss ion er o f Customs poses the jurisdictional iss ue by averring t ha t " all d:s- putes, cla ims and co ntro versies solely between or among the depa rt ments, bureaus , offices, agen ci e s and in str um enta lit i es of the Nation al Go vernmen t , including governme nt-ow ned or controlled co rp orations but excluding constitutional offi ces o6 ag en cies, aris i ng fr om interp r etation an d Ap pli~atio n of sta tutes~ contracts or ag re 8ments s ha ll hencefor th be a dmi- nistrativ ely settled o r a djurl icated" b y the Secretary o f Jus tice. (Section 1, PD 242 .) \ 450

DEf:ISIO - 3- CTA CASE NO. 4045 i '' Furthermore, SecU.on 3(e) o f R.A . !35 (not R.A 25 as menti o ned by resporJent) a s nmcn~cd, has specif:i.c refere nce � nly to the ~.w ount.]f tn xes on the Bank's incpme and such o'her taxes due on ol l ot her transa ct ions necessary or ir c:identnl to peti- tioner's banking bu~;iness. �rhe act of import-ation is certainl y not necessary no r incidental to pet i- tion er ' s banking business. And, the lone and ex pr ss m n t i o n o f t. he t. e r m " t. a x e s " i n t h e 1 a w 'vJi t h o u t s i rn i l a r and expre ss rnenl:ion of the phr ase "c Ls t orns duties nnd f ees" ind ubitab l y means the exc lu sion of the latter from the co vera ge of the law, reading - 11 Se ction =~(e) . Th e nmou nt. of taxe:~ du e to the National , o-..: er nm ent o n income begin nin g with the calendar yea r 1978 as we ll ss taxes d ue on all ot her transac t ions of th e Ba nk-be'9"Inrlinq with lh e c al endar year 1905 is hereby appropriated under this Dec ree t o be aut omatica l l y applie d to th e payment o f the s ub sc ribed co p ital s tock of the go ve rnm ent in the Bank .' As to Section 4 o f Executive Order 1078 , dated Januar y 10 , 1986, which was pe titi o ner ' s b~s1s for the ap p lication o f its ref un d r eq ue s t , the same i s only a mere execuljve or de r as again s t R.A. 25 (sic) as amended by P.D. 1980, the law in po int and which should prev~il . We do not r eac h the s ame conclusion as the res- p o n de n t Co mml s s i o n e r �:J f Cus t o :~1 s � \ 45

DECISION - CT A CA SE NO . 4045 - 4- Al l that we need to state i s th a t the adminis- trati ve remedy con f erred under PD 242 in no wi se lessens nor muffles petitioner's ri ght of acc ess to a judicial dete rm i n ation . A perusal of Section 7 of R.A. 1125 will readily s how that this Court has jurisdiction over th e case at bar , as thus - Sec. 7. Jurisdiction.- The Court of Tax Appea ls shall exerc i se exclusiv e appellate juris dictio n to review by a ppeal, as herein prov id ed - X)( X XXX XXX (2) Decisi ons of the Commissio ner of Customs in cases i nvolvirig l iability for customs duties, fees or other money charges; s e i z ure , detention or release of prop ert y a ff ected ; fines, fo rfei tures o r oth e r pen a lt ies imposed in relation thereto; or o ther matters arising under the Cu s toms l aws or oth e r l aw or part of l aw ad mi nist ered by the Bureau of Cu stoms ; and xxx. The ob jec tion interposed limiting the application of the term 11 taxes" as to exclude from its coverage customs du ties and other fee as contained in Secti on 3(e) of RA 85 as am e nded by PO 1980 n eed not bel abor Ed. T~e " ta xes due on all o ther trans act ions of the Bank" co ul d be taken in the generic sense and must apply, gene r a lly speaking, to all kinds of exaction which become pub lic I funds. Moreover, Section 4(c) cd Executive Order No . 1078 \

DEC ISIO N - - 5 �- CTA CASE NO. 40 45 /' rest a ted in th e c l ea r est te no r and terms th e af ore- s ai d provi s io n of PD 1 98 0~ p r ov id_inrj , "as wel l as .. such other t axe s , d uti es, F ees , assess~ents , c h arges and other i mposts due on all t ransactio n s o r ope r ati o nr; of the Bank". And , co n tr ary t o t h e respo nd e n t ' s a s s e rtion, e xe cutiv e ord ers p r o mu l gate d by the Pres id e n t in the exe r cis e of leg is l a t ive p owers wh enever t h e same are v alidly de l e g a t ed by t h e l e!;Jis l <Jt u re or, nt prese t, directly c o nferred b y t h e Co ns t i tu tio n h ave tho force and effect of l aws . Let i :. s uffi ce t h a t in t h e i.n sta n t c c:1s e , "pet i t io n e r is not see k ing e xem pt i on fr om cu st o ms duti es an d taxes due on the e quipment; ne ither i s it co nt e s tj ng t hat t he equipment is s ub j e ct t o c us t om s taxa tion. Al l t h e peti - tioner i s re qu es ting it ( s i c) that \<hat e v e :r c u st om s duties and tax e s may be d ue on t h e eq u ipme n t shou l d be applied to p et ition e r' s c ap it al i m;t.ead of payi. rHJ t he same to t he Bure a u o f Cus t o ms . Th is inte n t is clearly e x p r e s s e d b y t h e Ex e c u t i v e 0 r d e r No � 1 0 7 8 � " A n d , vJ e fin d nothing arn bi.g u o u s nor obs c u r e i n t h e lang u age of Executive Ord er No. 1 078 ins o far as t he same is bro u ght to bear upon the c ir c u ms t a nc es of the petitioner i n the I c1:i se at ba r . Pe tit i on er n ee d n o t pay directly to the I \

.. DECISION �- CT/~ CA ' E NO. L(Ql;';i .. Bureau of Cusloms the ~u s t oms duties, rompensaling t a x a n d i mp o r t p r o c e s EJ .i. n g f e e , b 1.: t \'1 h <1t. r.~ v e r 111 .:1 y b e due on the importaticn, the same be applied and credited to the Government's s ub s��r.'p Lion to pet�- tioner ' s capital sto"k. WHEREFnnE, r es pond ent i.s l.er by ordered to rr'fund to the p~titioner lhe amou nt o f eS, S62.~26 .00 it pnjd the Bureau o f Customs but such amount n f i 111p or t liabilitie s due on the imr ort. ntions s l�,n l 1 he n pp]jt-"rl and credil:ecl to the pnym ont of t.l1e r;u h ~;c r iilf.' d cupitiil stock of t he Governm ent in the Ba'nk, SO ORDERED . Que z on Cit y , Metro Ma n'la , July 31 , 1987, ;~tzf~;,~ 1\' c. )<..>_) �I )t~.. l��:C,i�.... 1 t-�' cl cj :.." ,__. \'i c cor�.J cuR : �1-~~;A~~----A~-~~-()~/��/ Af'1A NTE F ILLEH Pres/ g Judge ~ /�"~~ 1:::.(;-:j/',l.~ ~ ...... ~ v' CON TANTr C. ROAQUIN ssociate Judg e \ 450