SEMIRARA MINING CORPORATION v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY FIRST DIVISION SEMIRARA MINING C.T.A. CASE NO. 7867 CORPORATION, Petitioner, Members: - versus - ACOSTA, Chairperson UY,and FASON-VICTORINO, JJ. COMMISSIONER OF INTERNAL Promulgated: REVENUE, � ',J~ \N O'i 20H ; 1 o:<;&,�~ Res pond ent. x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x DECISION FABON-VICTORINO, J.: STATEMENT OF THE CASE In this Peti lio n for Revi ew fil ed on February 04, 2009, petitioner Semirar a Mining Corporation (SMC) seeks a refund or iss uan ce of a Tax Credit Certificate (TCC) for the amount of P15,292,054. 9 3, a.ll egedly representing the final withholding value - add ed tax (VAT) on its sa les of coal for the month of January 2007, which the National Power Corporation (NPC) erroneously withheld / ~\v.-

DECISION C. T.A. CASE NO . 7867 Pag e 2 of 27 and remitted to th e Bureau of Internal Revenue (BIR) on February 9, 2007. Petitioner SMC is a duly organized and existing domestic corporation with principal office at 2nd Floor, DMCI Plaza Building, 2281 Don Chino Race s Avenue, Maka t i City. 1 Respondent, on the other hand, is the duly appointed Commissioner of I nternal Revenue (CIR) with the authority to determine and approve application for refund or issuance of TCC, with office address at the sth Floor, BIR Building, Agham Road, Diliman, Quezon City. 2 Petition er states that it is engaged in the exploration, mining, extraction and sal e of ship coal, coke and other coal products and by - products and acq uisition, ownership and exercise of the rights and privileges und er the coal operating contract/s, executed by virtue of Presidenti al Decree (PD) No. 972, otherwise known as the "Coal Developm ent Act of 1976". It is registered with the BIR as a Non-VAT enterprise with Taxpayer Identification No. (TIN) 000-190- 324-000. 3 Presently, it operates a coal mine in Semirara, Ca luya, J Antique and sell s its co al production to the National Power 1 Paragrap h 1, Stipu lation of Facts, Join t Stipu lati on of Fa cts and I ssues (JSFI), Docket, p . 262. 2 Paragraph 3, JSF!, Docket, Ibid. 1 Exhibit B.

~ DECISION C. T.A . CASE NO. 7867 Pag e 3 of 27 Corporation (NPC), a governm ent-own ed and control led corporation in accord ance with t he duly executed Coal Supply Agreement betw een NPC and SCC4 . On July 11, 19775 petition er 's predecessors - in-interest6 entered into a Coal Ope rating Contract (COC) 7 with the Philippine Governm ent, t hroug h th e En ergy Dev elopment Board (EDB) of then Mini st ry of Energy 8 pu rs uant t o PD No . 972. Subsequently, the COC and all th e rights, privil eges and ob ligations appurtenant thereto w ere t ra nsferred to Sem irara Coal Corporation (SCC) - now the petition er - by virtue of a Dee d of Assignment dated April 7, 1980. Th e COC has a life of until 20 27 .9 Th e COC im plem ents th e decla red state policy stated in PD . No. 9 72 t o acce lera t e th e ex ploration, development, exploitation, production and utili za ti on of th e country 's coal resources. In line with this poli cy , Sect ion 16 of PD No. 9 7 2 provides for various in ce ntives t o COC ope rat o rs, in cluding ta x ex emptions as follows: / � Paragrap h 6, Statement of Facts and the Case, Petition, Docket, Ibid. 5 Paragraph 2, Stipu lation of Facts, JSFI, Docket, p. 262. 6 Th e predecessors - in - interes t of petiti one r were Vulcan Indu stria l and Min eral Ex ploration Corporation (VIMEC) and Sulu Sea Oil Deve lopment Corporation (S SODC) . 7 Exhi bit "C-1" . 8 Paragrap h 5, Statement o f Fac t s and the Case, Petiti on for Rev iew (Petition), Docket, p. 3. " Exhs. D and S; TSN, J. Tabor, July 9, 2009, pp. 11 - 13.

DECISION C. T.A. CASE NO. 7867 Pa ge 4 of 27 "Section 16. Incentives to Operators. The provisions of any law to the contrary notwithstanding, a contract executed under this Decree may provide that the operator shall have the foll ow ing incentives: a) Exemption from all taxes except income tax; b) Exemption from payment of tariff duties and com pensating ta x on importation of machin ery and equipment and spare parts and materials required for the coal operations subject t o the following conditions ... " (Emphasis supplied) The foregoin g provision was in turn incorporated in the terms and conditions of the COC, to wit: "Section V. Rights and Obligations of the Parti es 5 .2. The OPERATOR shall have the followin g rights: a) Ex emption from all tax es (national and loca l) except income tax10.. . " (Emphasis Suppli ed) Petitioner furth e r c laims that Section 109 of Repub li c Act No . 8424 or the Natio nal Internal Revenue Code of 1997 (NIRC of 1997), 11 also e xe mpte d petitioner from VAT on its sale or importation of coal, thus: J 10 Paragrap h 7 , Statement or Fa cts and the Case, Petiti on, Docket, pp . 3- 4. 11 An Act Am endin g the National Interna l Revenue Code, as Amend ed, and for Oth er Purposes.

DECISION C. T.A . CASE NO. 786 7 Pag e 5 of 27 " Secti o n 109. Ex empt Transactions.- The followi ng shall be exempt from value added tax: (e) Sale or importation of coal, natural gas, in w ha te ver form or state, and petroleum produ cts (except lubrication oil, pr-ocessed gas , grease, wa x , and pet ro leum) subj ect to excise tax under Titl e VI.. ." (Emphasis supplied) Howev er, whe n th e NIRC of 1997 was amended and R.A. 9337 became effectiv e in November 2005, respondent began to withhold final withholding VAT of five percent (5�/o) on coal billings of petition er claiming th at coal sales by petitioner were no longer exempt from VAT12 pursuant to Section 114 (C) of the law, which reads as follows : "(C ) Withh olding of Valu e-a dded Ta x . - The Govern ment or any of its political subdivisions, in strume nta lities or agencies, including govern ment-owned or -controlled corporations (GOCCs) sha ll, before making payment on acco u nt of eac h pu rc hase of goods and services w hi ch ar e su bj ect to the value-added tax impo sed in Section s 106 and 108 of this Code, deduct and withhold a final value -added tax at th e rate of five percent (5 % ) of the gross paym ent t hereo f : Th e value-adde d ta x w ithh eld und er this Se ction / sha ll be r em itted within t en ( 10) days following t/ th e end of th e month th e withholding was m ade 13 " . 12 Ex hibi t " E". 13 Parag raph 9 , Sta t em ent of Facts and the Case , Petiti on, Docket, p. 5 .

DECISION C. T.A. CASE NO. 7867 In view th ereo f, pet ition er requested for a BIR prono uncement that its sale of coa l to NPC was still exempt from VAT, notwithstanding the effe ctivity of the amendatory law. On March 7, 200 7, res pondent issued BIR Ru li ng No. 0006- 2007 14 , sustaining petitioner's position in this wise: " ... [S]in ce the tax exemp tion on the sale of coal prod ucts is premised on PO 972 which is a special law, and w hi ch Section 109(k) of the Tax Code, as amen ded so specifically provides to be the ba sis of the VAT exe mption, the same shall apply to coal produced by SMC pursuant to the co c. In view of the fo regoing, this office hereby rules t hat since the main object of the COC for wh ich the ta x exe mption was granted is t he active exploration, development and produ ction of coa l reso urces, SMC's sales of coal produced by virtue of a COC with EDB remain exempt from VAT pursuant to Section 109 (k) of the Tax Code, as amended by R.A. 933 7, in relation to PO 972, as amended15 .. ." (Emphasis supp li ed) Immediately petitioner furnished the NPC with a copy of the BIR Ruling and demanded that the latter immediately cease from deducting and w ithholding the final VAT from its payment to petitioner's sales o f coa l. NPC however continued to withho ld the / 1 Exhibit " F" . ' 15 Paragraph 10, Statem ent of Fac t s and th e Case , Petition, Docket, p. 6.

DECISION C. T.A. CASE NO. 7867 final VAT for th e month of January 200716 and remitted the same to th e BIR on Feb ru ary 9, 2007, as indicated in the following documents: (a) Mo nthly Remittance Return of Value -Added Tax and Oth er Perce ntag e Taxes Withh eld (BIR Form No. 1600) filed by NPC with th e BIR o n Februa ry 9, 2007 17 ; (b) Revenue Official Receipt No . 030160 4 6 18 (BIR Form No. 2524; (c) Certificates of Final Tax Withh eld at So urce (BI R Form No. 2306) issued by BPC to petition er 19 ; and (d) NPC's Certifi cation dated December 10, 200720 , ce rtifying th e amo un t of final VAT withheld by NPC for petitioner's January 200 7 coa l sa les21 . On May 21, 200 7, petition er filed with Revenue District Office No. 12 1 (ROO 121 ), Larg e Taxpay ers' Division of the BIR an application (BIR Fo rm No. 1914) for issuance of TCC together with all th e suppo rtin g doc um ents, in th e amount of P15,292,054.93, representing th e fin al w ithh olding VAT on coal billings of petition er for th e month of Janu ary 2007. 22 To date, the said application / remains unresolve d by respond ent, r esulting in the filing of the instant petition . 16 Paragraph 11, Stateme nt of Fa ct s and th e Case, Petition, Docket, Ibid. 17 Exhibit " G". 18 Exhibit "G-2". 19 Ex hibits " H" to " H-69". 20 Ex hibit " ! ". 2 1 Parag raph 12, Statem ent of Fa cts and the Ca se, Petiti on, Docket, p. 6. 22 Paragrap h 4, JSFI , Docket, p. 263 .

DECISION C. T.A. CASE NO . 7867 In the Answ er fil ed on March 12, 2009, respondent moves to dismiss the instant petition for lack of cause of action. Respondent posits, among others, that the claim for tax refund is still subject of administrative inves tigation and/or examination by respondent. Moreover, petition er is yet to prove that both the administrative and judicial claims for refund were seasonably filed in accordance with Section 112 (A) and (C) and 229 of the Tax Code, as amended. Full com pliance with t he requisites of the law for entitlement must aJso be established. The presumption that the collection and payment of taxes were in accordance with law, rules and regulations must as well be overturned. Further, petitioner's exemption from VAT und er R.A. 8424 has been deleted in Republic Act No. 9337 or the New Expa nded Value-Added Tax 23 . Such only means that petiti oner's sale or importation of coal and natural gas, in whatever form and state shall now be subject to VAT. Assuming that petitioner is exempt from VAT, it is still liable under Section 109(z) of the old VAT Law having issued a VAT invoice or receipt rende ring it liable for VAT without the benefit of input ta x credit. More importantly, the present action has already prescribed. Und er Section 112 of the NIRC of 1997, respondent had 120 days, within w hi ch to act on petitioner's claim filed on May 2 1 , J 23 Section 109 paragraph (e) of the Ta x Code, as amended.

DECISION C. T.A. CASE NO. 7867 Pa ge 9 of 27 2007 or until September 24, 2007. Thereafter, it had 30 days to file its judicial claim. However, the instant petition was filed only on February 2, 2009, or almost two years from the time the administrative claim was lodged in violation of Section 112 of the Ta x Code of 1997. Besides, claims for refund are strictly construed against the claim a nt for it is deemed an exemption from taxation and liberally in favo r of the taxing authority 24 . Anent, petitioner's claim that its ta x exe mption is under the mantle of constitutional protection against non-impairment of contract, respondent posits that ta x exempti ons granted under a legislative franchise are subject to amendment, alteration, repeal by Congress when the common good requires25 . On March 24, 2009, the parties filed their respective Pre-Trial Briefs26 and their Joint Stipulation of Facts and Issues on April 13, 2009, which the Co urt approved on April 15, 2009 27 . Trial ensued during which the parties presented their J respective pieces of evid ence - documentary and testimonial. 24 Commiss ioner of I nte rnal Revenu e vs, Manila Mining Corp ., 468 SCRA 57 1. 25 Mani la Electric Co. vs. Province of Lag una and Be ni to R. Ba lazo , G.R . No. 13 1359 , May 5 , 2009 . 26 Pe ti t ioner's Pre-Tria l Bri ef, Docket, pp. 246 - 254; Res ponden t 's Pre-Tr ial Br ief , Docket, pp . 25 5-259. 27 Docket, pp . 266.

DECISION C. T.A. CASE NO. 786 7 On January 29 , 2010, the peti t ion was deemed submitted for decision after respond ent filed a Memorandum on January 4, 2010 and petitioner, on January 18, 2010. THE ISSU ES In their Join t Stipulation of Facts and Issues, the parties submitted the foll owing for the resolution of the Court: "1 . Whether or not petitio ner is entitled to a refund or issuance of a tax credit certificate in the amount of P15,292,054.9~, representin g � the final withholding VAT withhe ld by NPC on its payments for the month of January 2007 for petitioner's sales of coal to NPC, and r emitted by NPC to the BIRon February 9, 2007. 2. Whether or not petitio ner's claim for tax u edit certificate of t he final withholding VAT with held by NPC on its payments for the month of January 2007 is duly substantiated by documentary evid ence . 3 . Whether or not Presid ential decree No. 972 ( 1976) ot herw ise known as the "Coal Development Act of 1976," was repealed by Repub li c Act No. 9337 (2005). 4. J Whether or not petitioner has exhausted all admi ni strative remedies before filing this Petition ."

DECISION C. T.A. CASE NO. 786 7 THE RULING OF THE COURT Petitioner is entitled to the refund prayed for as its sales or importations of coa l, natural gas in whatever form or state are exempt from VAT PO No. 97 2 declares the Government's policy to accelerate the exploration, development, exploitation, production and utilization of the cou ntry 's coal resources. Precisely the Philippine Government and petitioner's predecessor's-in-i nterest, namely, Vulcan Industrial and Mineral Exploration Corporation (VIMEC) and Sulu Sea Oil Development Corporation (SSODC) and Energy Development Board of then Ministry of Energy, exec uted the COC to breathe life into this policy. To promote the project and encoura ge operators as well as investors, the law itself provided incentives such as tax exemptions expressly granted unto them by virtue of Section 16(a) thereof, which reads as follows: "Presidential Decree No. 972 J Promulgating an Act to Promote an Accelerated Exploration, Development, Exploitation, Production and Utilization of Coal SEC. 16. Incentives to Operators. The provisions of any law to the contrary notwithstanding, a contract executed under this Decree may provide that the operator shal l have th e fol lowing in centives

DECISION C. T.A. CASE NO. 7867 (a) Ex emption from all ta xes except income tax; (b) Exemption from payment of tariff duties and co mpensating tax on importation of machinery and equipment to spare parts and material s required for the coal ope rati ons subject to the following co nditions .. . (Emphasis supplied)" This tax-e xemp tion was expressly incorporated in Section 5.2 of the COC as foll ows : "Secti on V. Rights and Obligations of the Parti es 5.2 . The OPERATOR shall have the following rights: (a) Exemption from all taxes (national and loca l) excep t income tax.. ." (emphasis supplied) From the foregoing provisions, petitioner as a coal mine operator, is entitled to claim the incentive of exemption from all taxes, both national and local, other than income tax. It may be noted that und e r Section 21 of the NIRC of 1997, VAT is among the enumerated taxes, fees and charges deemed to be national taxes from which petitioner may claim exemption from paying. For ready J reference, the provision is as follows:

DECISION C. T.A. CASE NO. 7867 "Sec. 21. Sources of Revenue. - The following taxes, fees and charges are deemed to be nationa l internal revenue taxes: (a) Income tax; (b) Estate and donor's tax; (c) . Value-added tax ; (d) Other percentage taxes; (e) Excise taxes; (f) Documentary stamp taxes; and (g) Such other taxes as are or hereafte,- may be imposed and collected by the Bureau of Internal Revenue." Thus, except for income tax, petitioner may cla im exemption from paying VAT on its transactions under the COC. Moreover, in one of its earli er rulings, specifically in VAT Ru ling No. 557-88, the BIR clarified that petitioner is indeed exempt from VAT pursuant to Section 16 of PD No . 972, which exemption has been incorporated in its COC. The BIR stated: " ... [P]ursuant to Section 16 of Presidential Decree No. 972, coal operators are exempt from the following: 1. All taxes except income tax. 2. Payment of tariff duties and compensating tax on the importation of machinery and equipment operations under some conditions. XXX XXX XXX In view of this, small scale contractors and coal / operators are exempt from VAT under Sec. 103 (u) of the Ta x Code as amended by Exec utive Order No. 273 J provided, that the exemption from all taxes except income tax is incorporated into the service and operating contracts granted by the government of

DECISION C. T.A. CASE NO . 7867 Pag e 14 of 2 7 the Philippines pursuant to PD 97228 ". (Emphasis supplied) Anent respondent's contention that the grant of exemption upon petitioner under R.A. 8424 has been removed when R.A. 9337. took effect in November 2005, suffice it to say that change of heart on the part of th e BIR does not appear. In fact, about two years from the effectivity of R.A. 9337, the BIR in its Ruling No. 006- 2007 29 maintained its previous stand that petitioner is exempt from VAT on its coal sal es under the COC. The BIR relevantly states: " ... [S]in ce th e tax exemption on the sale of coal products is premised on PD 972 which is a special law, and which Section 109(k) of the Tax Code, as amended so specifically provide to be the basis of the VAT exemption, th e same shall apply to coal produced by SMC pursuant to th e COC. .. In vi ew of the foregoing, this office hereby rules that since th e main . object of the COC for which the tax exemption wa s granted is the active exploration, development and produ ction of coal resources, SMC's sales of coal produ ces by virtue of COC with EDB remain exempt from VAT pursuant to Section 109(k) of the Tax Code, as am ended by R.A. No. 9337, in relation to PD 972, as amen de d... " As regards th e alleged repeal of the provisions pertinent to this case, which according to respondent effectively removed .J 28 VAT Rulin g No. 557-88 dated Dec. 3, 1988 add ressed to Mr. W .R. de la Paz , Exec utive Director, Office of En ergy Affa irs. 29 Ex hibi t " F"

DECISION C. T.A . CA SE NO. 7867 petitioner's exemption from VAT, the repealing clause of RA 9337, Section 24 pertinently states: "S ec. 24 . Repealing Clause. - The following laws or provisions of laws are hereby repealed and the persons and/or tran sactions affected herein are made subject to the value -add ed ta x subject to the provisions of Title IV of the Nation al Internal Revenue Code of 1997, as amended: (A) Section 13 of R.A. No. 6395 on the exemption from value-added ta x of National Power Corporation ( NPC); (B) Se ction 6, fifth paragraph of R.A. No. 9136 on the zero VAT rate imposed on the sales of generated [power by generation companies; and (C) All other laws, acts, decrees, executive orders, issu ance s and rules and regulations or parts thereof which are contrary to and inconsistent with any provisions of this Act are hereby repealed, amended or modified accordingly. " Indeed, th ere is no indication t hat RA 9337 repealed PD No. 972 or any section or paragraph thereof, whether express or implied. It has bee n ruled that a special law such as PD No. 972 cannot be repeal ed, amended or altered by a subsequent genera l law by mere impli ca tion. 30 If the intent to repeal is not clear, the later act should be construed as a continuation of, and not a substitute for, th e earlier act. 31 The legislature is presumed to know the existing laws; if it intended a repeal of the earlier law, it t/ 30 Manzano vs. Valera, G.R. No. 122068, July 08, 1998. 31 Social Justi ce Society vs. Atienza, Jr., G.R. No. 156052, Feb ru ary 13, 2008.

DECISION C. T.A. CASE NO . 7867 should have so ex pressed that intention in the subsequent statute . Thus, a statute wi ll not be dee m ed to have been impliedly repealed by anoth er enacted subsequ ent th ereto unless there is a showing that a pl ain, unavo idab le and irre concilable repugnancy exists betw ee n th e tw o. 32 Abse nt a n ex press repeal, as in this case, a sub sequ ent la w can not be con strued as repealing a prior one unless an irreco ncil a bl e inco nsiste ncy or repugnancy ex ists in th e terms of th e new and old laws. 33 An ex press repeal, is one wherein a statute dec lares , usuall y in its re pea ling clause, th at a particular and specifi c law, id entified by its number or titl e, is repealed . Absent thi s spec ifi c requ irem ent, an ex press repeal may not be pres um ed. 34 Th er e bein g no plain and irrecon cilable repugnancy between th e re levant pro vi sions of th e pertin ent laws and considering that th e re pealing clause of R.A . No. 9 3 37, specifi cally Section 24 th ereo f did not ex press ly in clud e P.D. 97 2 in its enumeration of repea led laws or prov isio ns, it is pl ain that the latter has not bee n repea led by R.A. No . 9337 and petiti oner may still invoke in its J fav or VAT exe mp tio n under t he COC. 32 Freedom fro m Debt Coa li tion vs . Energy Regulatory Commission, G.R. No . 161113, June 15, 2004 33 Peop le v. Benipayo. G.R . No. 154473, April 24, 2009; Photokina Marketing v. Benipayo, G.R. No. 155573. 34 Pene ra v. COMELEC, G.R. No. 181613, Sept ember 11, 2009 .

DECISION C. T.A. CASE NO . 786 7 Section 109 (k) of RA 9337 provides as well that transactions which are exempt under special laws are also exempt from VAT, thus: "Sec. 109. Ex empt Transactions. - (1) Subject to the provisions of Subsection (2) hereof, the following transactions shall be exempt from the value-added tax: XXX XXX XXX (k) Transactions which are exempt under international agreements to wh ich the Philippines is a signatory or under special laws, except those under Presidential Decree No. 529. (Emphasis supplied) Significantly, in Semirara Mining Corporation vs. Commissioner of Internal Revenue, 35 the foregoing issues had been laid to rest by this Court, in this fashion: "Th e inh erent power of the state to impose taxes includes the power to grant ta x exemptions. Tax exemptions may be granted either by the Constitution or by an act . of legislature, subject to limitations as the Constitution may provide . The tax exemption being availed of by the petitioner is a ta x exemption granted by an act of legislature, wh ich is, P.D. No. 972. Under Section 16 of the said law , operators of coal operating contracts are given various incentives, which include exemption from all ta xe s except incom e tax . Furthermore, the said incentive or ta x exe mption provided for by P.O. 972 was embodied and incorporated in Section 5 .2 of the Coal Operating Contract between petition er and the Philippine Government. I n the pres en t case, the petitioner is seeking exemption from VAT. As provided under Section 21 of the 1997 T ax Code, VAT is one of the national 35 CTA Case No. 771 7, Oc tobe r 13, 2009 ./

DECISION C. T.A. CASE NO . 7867 interna l rev enu e t axes , hence, ex em pt ion from VAT fa ll s within the ex e mptions provided by P. D . 972 an d its Coal Operating Contract. Furthermore, petit ioner's clai m for exemption from payment of the VAT is also covered by the 1997 Tax Code notwithstanding its amendment by R.A. 9337, as provided by Section 109 (K), w hich reads as follows "REPUBLIC ACT NO . 9337 AN ACT AMENDING SECTIONS 27, 28, 34, 106, 107, 108, 109, 110, 111, 112, 113, 114, 116, 117, 11 9, 121, 148, 151, 236, 237 AND 288 OF T HE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AM EN DED, AND FOR OTHER PURPOSES Sec. 7. Section 109 of the same Code, as amended, is here by further amended to read as fo ll ows : ?EC. 109 . Exe mpt Transa ctions . - (1) Subject to the provisions of subsection ( 2) hereof, the following transactions shall be exempt from the value-added tax: XX X XXX XXX (K) Transactions which are exempt under intern ational agreements to which t he Phi lippin es is a signatory or under special laws, except those under Presidential Decree No. 529; XX X XXX xxx" Based on the aforequoted provision of Section 109, petitione r is entitled to exemption from VAT since its sa le of coal is exempted from VAT as provided under a special law, which is PD 972. In its last effort to prove that petitioner is not entitled to a tax refund or to be issued a tax credit certificate, respondent avers that the tax exemption under P.D. 972 � has been effectively repealed by R.A. 9337, specifically by Section 24, which provides: XX X XXX XXX In the case at bar, there is no express repea l sin ce as stated by the petitioner, there is no ex press mention of P.D. 972 in th e Repealing clause of R.A . 9337. As ru led by the Supreme Court in the case of Mecano vs /

DECISION C. T.A. CASE NO. 7867 Page 19 of 2 7 Commission on Audit, it is sett led that an express repeal is a declaration in a statute, usually in its repealing clause, that a particular and specific law, identified by its number and t itl e is repealed; all other repeals are implied repeals. Likew ise, there cannot be an implied repeal since repeal of laws shou ld be made clear and expressed. Repeals by implication are not favored as laws are presumed to be passed with deliberation and full knowledge of all laws existing on the subject; Furth ermore, a law cannot be deemed repea led unless it is clearly manifest that the legislature so intended it. Considering that the exemption of the petitioner from all taxes except income tax, as provided by P.O. 972, is not enumerated in Section 24 of R.A. 9337, the tax exemption of petitioner still subsists." (Emphasis supp li ed) Contrary to respondent's contention, petitioner submitted various documents to substantiate its claim that NPC erroneously withheld and remitted to the BIR the amount of P15,292,054.93, allegedly representing 5% final withholding VAT on NPC's gross paym ents for coal purchases from petitioner for the month of January 2007. The following documents were presented during the trial, to wit: (a) "Monthly Remittance Return of Value-Added Tax and other Percentage Taxes Withheld" (BIR Form No. 1600) filed by NPC with the BIRon February 9, 2007; 36 (b) "Alph abetical List of Payees from Whom Taxes Were Withh eld for the Month of January 2007" (BIR Form No. / 36 Exhibit "G"

DECISION C. T.A. CASE NO. 786 7 1600- Schedule II) filed by NPC with the BIR on February 9, 2007 ;37 (c) Revenue Official Receipt No. 03016046 (BIR Form No. 2524); 38 (d) "Certificate of Final Tax Withheld at Source" (BIR Form No. 2306) issued by NPC to petitioner; 39 (e) NPC's "Certification" dated December 10,2007, certifying the amount of final VAT withheld by NPC from its gro ss payments made in January 2007 ; 40 (f) Various sales invoices and debit memoranda issued by the petition er to NPC reflecting its gross billings to NPC for January 2007; 41 In fine, petiti o ner's claimed 5�/o final withholding VAT in the amount of P15,29 2,054.91 has been substantiated, broken down as follows: Exhibit Gross Income Rate Fina l VAT Withh e ld Payment 5% H 5% p 107,331.99 H- 1 p 2,146,639 .82 5% H-2 1,881,317.15 5% 94,065 .86� H-3 1,980,479 .12 5% H-4 1,509,614.85 5% 99,023.96 H-5 2,204,602. 54 5% H-6 587,656.46 5% 75,480.74 H-7 2,311,749.4 1 5% H- 8 2,089 ,088. 91 5% 110,230.13 H-9 2,820,818.27 5% H-10 2,673,574.5 1 5% 29,382 .82 H- 11 1,928,710 .37 5% H- 12 2,438 ,055.59 5% 115,587.47 H- 13 2,160,518.42 104,454.4442 2,220 ,558.43 141,040.91 133,678.7243 96,435.52 121,902.78 108,025.92 111,027.92 37 Ex hi bit " G- 1" . / 38 Ex hibit " G- 2 " . 39 Ex hibits "H" to " H-6 9 " . 40 Ex hib it " ! " . 41 Exhibits " J" to " J-2". 42 Am ount per ce rtifi ca t e is P l0 4 ,454. 4 5 but am o unt per remittance return is P104,454.44 . 43 Am o unt per ce rtifi cate is P133,678 .73 but am ount pe r re mittan ce return is P133,678 .72 .

DECISION C. T.A. CASE NO . 78 6 7 H-14 1,919,427.75 5% 95,971.39 H- 15 144,591.60 H- 16 2,891 ,831.97 5% 142,837.43 H-17 161,796.75 H- 18 2,856 ,748.61 5% 141,830.92 H-19 133,463.06 H-20 3,235 ,934.97 5% 103,997.92 H-21 142,598.90 H-22 2,836,618.40 . 5% 134,653.92 H-23 135,300.05 H-24 2,669 ,261.10 5% 140,484.79 H-25 144,227.44 H-26 2,079,958 .49 5% 100,037.00 H-27 126,409.57 H-28 2,851,977 .99 5% 143,953.87 H-29 143,317.66 H-3 0 2,693 ,078.35 5% 108,331.69 H-3 1 125,375.20 H-32 2, 706,00 1.07 5% 143,762.97 H-33 140,550.09 H-34 2,809 ,69 5. 74 5% 125,289.65 H-35 332,052.69 H-36 2,884,548.80 5% 126,900.29 H-37 302,717.27 H-38 2,000,739 .90 5% H-39 98,087.73 H-40 2,528, 19 1.44 5% 432,104.40 H-41 138,955.05 H-42 2,879 ,077.48 5% 432,151.44 H-4 3 156,727.23 H-44 2,866,35 3.18 5% 441,564.34 H-45 158,934.96 H-4 6 2,166,633 .76 5% 435,764.56 H-47 103,300.98 H-48 2,507,503. 96 5% 430,089.04 H-49 12S,616.S7 H-SO 2",875,259.36 5% 443,619.9S H-S1 2,8 11,001.85 5% 1S3,119.61 H-S2 H-S3 2,505,792 .98 5% 34,S91.18 H-S4 440,009.1S 6,641,053 .80 5% 126,008.3S H-SS 441,367.83 H-S6 2,538,005 .82 5% 167,706.01 H- S7 H-S8 6,054 ,345.46 5% 43S,106.33 H-S9 131,S3S.80 1,961,754.67 5% / 300,01S.74 8 ,642,088 .06 5% 437,367.90 2 ,779 ,100 .92 5% 8,643 ,028 .87 5% 3,134,544 .55 5% 8,831,286. 79 5% 3,178,699 .21 5% 8,715,29 1.15 5% 2,066,019.S4 S 0lo 8,601,780.87 S 01o 2,S12,331.41 S 01o 8,872,398.92 S 0lo 3,062,392.29 S 0lo 691,823.67 S 01o 8,800,183.08 S 01o 2,S20,167.04 S 0lo 8,827,3S6.68 S 01o 3,3S4,120.22 S% 8,702,126.60 S 01o 2,630,71S.99 S 01o 6,000,314.71 S% 8, 7 ~L_l?8 .04 S 0lo

DECISION C. T.A. CASE NO . 7867 Pa ge 22 of 27 H-60 8, 720,827.70 S0lo 436,041.39 H- 61 8,777,113.29 S01o 438,8SS.66 H-62 6,123,869.S7 S0lo 306,193.48 H-63 8,6SS,180.37 S01o 432,7S9.02 H-64 8,898, 182.79 S% 444,909.14 H-6S 8,689,8S2.99 S0lo 434,492.6S H- 66 8,880,314.1S S0lo 444,01S. 71 H- 67 8,600,129.71 S0lo 430,006.49 H-68 8,810,134.7S S% 440,S06.74 H- 6 9 8,648,183.S9 S01o 432,409.18 p 15,292,054.91 Total: In the sam e vein, there is no merit to respondent's protestation that petition er fail ed to submit all relevant documents in the administrative lev el rendering recourse to the Court premature on acco unt of failure to ex haust administrative remedies. In Commissioner of Internal Revenue vs. Manila Mining Corporation, 44 it was r ul ed that documentary evidence presented before respondent in the administrative proceeding have no evidentiary valu e unl ess offered before this Court where the cases are litigated de novo, thus: Und er Section 8 of RA 1125, the CTA is described as a court of recor-d. As cas es filed before it are litigated de novo, party litigants shou ld prov e every minute aspect of their cases . No ev id entiary value can be given the purchase in voices or receipts submitted to the BIR as the rules on docum entary ev id ence requ ire that these documents must be formally offered before the CTA. / 44 G.R. No. 153204, Au gust 31, 2005.

DECI SION C. T.A. CASE NO. 7867 Pag e 2 3 of 27 Under the cited jurisprudence, petitioner must substantiate its claim for refund, regardless of the outcome of the proceeding before the administrative body, as it did before this Court. As to respond ent's contention that the Petition for Review was not seasonably fil ed on February 04, 2009 or two (2) years from remittance of the subject amount to the BIRon February 09, 2007, in violation of Section 112 of the NIRC, let it be stressed that the amount involved pertains to final withholding VAT on petitioner's exempt sale of coal to NPC for the month of January 2007 erroneously withh e ld by NPC, not to zero rated or effectively zero rated sale as contemplated under Section 112 of the Tax Code. Therefore, the applicable provisions are Sections 204(C) and 229 of the NIRC of 1997, as amended, which provide as follows: "SEC. 204. Authority of the Commissioner to Compromise, Abate and Refund or Credit Taxes. - The Commission er may- XXX XXX XXX (C) Credit or refund ta xes erroneously or illegally receiv ed or pen alti es imposed without authority, refund the valu e of intemal revenue stamps when they are retum ed in good condition by the purchaser, and, in his discretion, redeem or change unused stamped that have been rendered unfit for use and refund their value upon proof of destru cti on. No credit or refund of taxes or penalties sh all be allow ed unless the ta xpayer files in writing with t he Commission er a claim for credit or refund within two ( 2) yea rs after the payment of the tax or / penalty: Provided, however, that a retum filed showing

DECI SION C. T.A. CASE NO. 786 7 an overpaym ent shall be considered as a written claim for credit or refund ..." SEC. 22 9 . Recovery of Tax Erroneously or Illegally Collected. - No suit or proceeding shall be maintained in any court fo r � th e recovery of any national internal revenue ta x hereafter alleg ed to have been erroneously or ill egally assessed or collected, or of any penalty claim ed t o h ave bee n coll ect ed without authority, or of any sum all eged to hav e been excessively or in any mann er wrongfully co llected, until a claim for refund or credit has been duly filed with the Commissioner; but su ch suit or proceeding may be maintained, whether or not su ch ta x , penalt y, or sum ha s been paid under protest or duress. In any case , no su ch suit or proceeding shall be filed after t he ex piration of two (2) years from the date of payment of the tax or penalty regardless of any sup erv enin g . ca use tha t may arise after payment: Provided, however, that th e Commissioner may, even w ithout a w ri tte n claim th er efore, refund or credit any t ax , w here on t he face of th e return upon which payment was made, such payment appears clearly to have been erron eou sly pa id ." Admittedly , th e subject claim pertains to final withholding VAT which mu st be re mitted within ten (10) days following the end of the month wh en t he withholding was made pursuant to Section 114(C) of the NIRC of 1997, as amend ed, which reads as follows: "SE C. 11 4 . Re turn and Payment of Value -Added Ta x . XXX XXX XX X (C) Withh olding of Valu e-Added Tax . - The Government or any of its political subdivisions, instrum entalities or ag encies, including government- owned or co ntroll ed corporations (GOCCs) shall, before making paym ent on account of ea ch purchase of goods from sell ers and services rendered by contractors which are subj ect to th e ~a lu e add ed ta x impos:d in Secti?ns / 106 and 108 of th1 s Cod e, deduct and Withhold a fmal

DECISION C. T.A. CASE NO . 7867 value added ta x at the rate of five percent (5%) of the gross paym ent thereof: Provided, that the payment for lease or use of properties o r property rights to nonresid ent owners shall be subject to ten percent ( 10%) withholding tax at the time of payment. For purposes of this Section, t he payor or person in control of the payment shall be consi dered as the withholding agent. The value -a dded ta x withheld under this section shall be remitted w ithin ten ( 10) days following the end of the month the withho lding was made." Reckoned from February 9, 200745 , or the date the NPC remitted the final w ithh olding VAT on its January 2007 payments to petition er, th e administrative claim f iled on May 21,200746 and the Petition for Review fil ed on Fe~ruary 4, 2009 were clearly within the two year prescriptive period provided for by law. All to ld, th e instant petition is meritorious. Petitioner is exempt from VAT pursuant to Section 109(K) of the NIRC of 1997, as amended, in relation to Section 16 of P.D. No. 972. A fortiori, respondent is und er ob lig ation to refund or issue a TCC in favor of petition er in the amount of P15,292,054.91, in accordance with Sections 204 and 22 9 of the NIRC of 1997, as amended. WHEREFOR E, the instant Petition for Review is GRANTED. Accordingly, respondent is hereby DIRECTED TO REFUND OR / 4 5 Ex hibit "G" 46 Ex hibits "J" to "J-2" an d "K"

DECISION C. T.A. CASE NO. 7867 ISSUE A TAX CREDIT CERTIFICATE in favor of petitioner in the amount of P15, 292 ,054.91, representing the final withholding value-added tax (VAT) on its sales of coal for the month of January 2007, which the National Pow er Corporation (NPC) erroneously withh eld and remitted to the Bureau of Internal Revenue (BIR) on February 9, 2007 . SO ORDERED . We concur: t~'-- ' Q~ ERNESTO D. ACOSTA Pres iding Justice E~. UY Asso ciate Ju stice

DECISION C. T.A. CASE NO . 7867 CERTIFICATION Pursuant to Artic le VIII, Section 13 of the Constitution, it is hereby certified th at th e conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of th e Court's Division. L..-e- v . ~,.;f.,_ ERNESTO D. ACOSTA Presiding Justice