CTA Case No. 1635 (Decision)

REPUBLIC or THE PHIL1PP IMI8 COURT OF TAX APPEALS QUE ZO N CITY MARINDUQUE MINING & IND STR I AL CORP. , Petitioner, - versus - C.T.A. CASES NOS. & 163~ 16~4 COMMISSIONER OF . INTERNAL REVENUE, Respon d e nt. X- - - - - - - --- --x DEC I S I O. N These cases invol va two separate c 1aims for refund in the sums of P1,916.54 and P9,224.34, respectively, or an agg regat e amount of P11,140.88, representing 25% of specific paid on manufactured oils used by petitioner in i ts mining operations during the ye a r 1963. Scii\i d case s ware consolidated and tried j ointly. As gleaned from t he r ec ords and pl e oilldings of the parties, it appears that petitioner, corpor&\tion duly org cilm i:z ed in accordance with law is engaged in mining in the Philippines. From January to May 1963, it conducted mining opera\tions at Bagacay, Hin�bangan, Samar and from April to December 1963, in Bagacay, Samar and Sipalay, Negros Occidental. 75

.. DECISION - CTA CASES NOS. 1635 & 1 6~4 - 2- During the period under review~ petitioner purchased from Caltex (Phil&.) Inc. .and Esso Standard Eastern, Inc. manufactured oils on which specific taxes have been paid. Invoking Sections 1 and 5 of Republic Act No. 1435~ petitioner filed the following claims for refundt 1. On Oc tober 5, 1964, the amount representing 25Y. of the specific taxes paid on the manuf actured oils used in the Bagacay Mine covering the period from January to May 1963 (p. 401 .~ BIR rec., CTA Case No. 1635J; and ' 2. On Ap ril 23, 1965, the amount represe nt ing 25% of the specific t axes paid on the manufactured oils u sed in the Bagacay and Sipal ay Mines covering the period from April to December 1963 (p. 567, BIR re c . , CTA Case No. 1654J. Said claims for refund were respectively denied by respondent in letters recei ved by petitioner on December 1, 196 4 a nd May 25 , 1965, on the ground that the privilege of par tial tax refund granted by Section 5 of Republic Act No. 1435 to those using oils in the operation of forest and min ing concessions is lim~ted to a period of five (5 ) years, the same to be counted from June 14, 19 ~6, the date the aforesaid Act took effect. On December 7, 1964, petition er filed its request for reconsideration of the decision now l i t igated in C.T.A. Case No. 1635 fpp. 405- 406, BIR 76

DECISION - CTA CASES NOS. 1635 & 1654 - 3- r ec � .) . However~ n o requ e s t for reconsideration was filed with respect to t he decision appealed in C.T.A. Case No. 1654. On May 18, 1965 and June 22, 1965, petitioner appealed to this Court. Petitioner contends that partial refund gr-anted by Section 5 of Republic Act No. 1435 is clear i\nd unambiguous~ and there is no express or implied pr-oviso in the law limiting the par-tial tax refund pr-ivilege fo r miners and forest concessionair-es to �f i v e-year- period only. Respondent on the othe r hand , maintains that the five-year limitation pe riod for partial refund of taxes paid for fuel and lubr-icating oils used in agricultur-e and aviation pr-ovided in Section 1 of Republic Act No. 1435 is also applicable to oils used by miners or- forest concessionaires in their operations. Considering that the above- entitled cases involve similar facts a nd ide ntical in issue with the cases brought on appea 1 t o the Supr-eme Court, the parties dur-ing trial submitted the same for decision on the basis of the pleadings. And the issue n6w raised has since been adjudged in the cases of Insular Lu�ber Co. 115. Court o'f Tax Appfl~tls, . t Ill. ~and Coaaissionttr o'f Int�rnal R�v�nu� liS. Court o"f Tax Apptutls, �t al., 104 SCRA 77

DECISION - CTA CASES NOS. 1635 & 1654 - 4- 718. In disposing of the question in controversy, the Supreme Court en bane affirmed the decision appealed from and ruled that there is no basis in applying the limitation of the operative period provided for oils used in agriculture and aviation to the provision on the refund to miners and forest concessionaires. Nevertheless, with respect to the claim for refund of the sum of P1,916.54 which is the amount litigated in C.T. A. Case No. 1635, it appears that the same represent 25/. of the specific ta xes paid on fuel and lubricati ng oils used from January to May 1963 . The c 1aim for refund for the Sti\i d sum was filed with respondent on October 5, 1964 and the petition for review was filed on May 18, 1965, more than two years after the use of the oils, that is, after the petitioner's right thereto had prescribed in the light of the doctrine laid down in the case of Coaaissioner of Internal Rev�nu� vs. Insular Luaber Co. and the Cour t of Tax App�als, 21 SCRA 1237, wherein the Supreme Court saids In this caste, i t was the .LI1!~D...J,..9~~ of the manufactured mineral oils and fuels in the operation of its forest concession which gave Insular Lumber Company the right to claim refund of 25/. of the spec! f ic tal-< paid thereon. The claim for refund was filed with the Commissioner of Internal Revenue on

DECISION - CTA CASES NOS. 1635 & 1654 5- Febl"� u a r-y 2~:. ~ 1 961 .:?~ nd tile pE!lt:i. t:inn �for review was �fil ed in th>:> Court of Ta:�( AppPals on Febr�uar y 1 '7, .l9fl2. Bo th the a�f ol~ esaid dat.e f..; are rnc:we t h a n two years .:~ fter� 1958 ~ the year the oils and fuel s ~~er� e actually us~HL ConseqL\f.:mt.ly~ the rig ht to c l aim rPfund of t he t~x in question has prescribed. On the cl im for refund of the sum of amount in volved in C. T .A. Case No. 1654, it ma y be stated that this cou rt has consist ntly <i\\dhered to the rule that claim for refund shou ld b f irs t f iled with t he Commissi o ner of Internal Revenue~ and the subsequent appea l t o the Court of Tax Appeals must in no case be f iled beyond the two-year period from the occurrence o f the supervening cause which gave rise to the righ t of refund or payme nt of the tax as th e case ma y be. vs. Vic'tori�s #filling Co�pany, Inc., 22 SCRA 121 Collttc'tor vs. Court of Tax Appeals, 1 SCRA 87 .1 and Dttntal Surgflry vs. Court o f Ta x Apptta ls, 102 PhiL. 912). In the present case, it will be noted that although the claim for refund was filed on April 23, 1965, the petition for review was filed only on June 22 , 1965 praying for partial refund of .. ....,

DECISION - CTA CASES NOS. 163~ & 1654 - 6- specific taxes paid on oils used from April to December 1963. Following therefore the ruling in the aforecited cases~ this court finds that only a portion of the amount claimed~ i.e., from April to June 21~ 1963 has prescribed. Consequent ly , pe titioner is entitled to the partial refund of the a mount corresponding to the specific taxes paid on oils used from June 22, 1963 to December 1963, pursuant to the provisions of Section 306 (now Sec. 292) of the Tax Code. WHEREFORE, the ppealed decision in C.T.A. Case No. 163~ is hereby affirmed with costs against petitioner, and the appealed decision in C.T.A. Case No. 1654 is modified as indicated above. Without pronouncement as to costs. SO ORDERED. Quezon City, Metro Manila, May 17, 1991. C".'--R-O-A-Q-�UIN Judge WE CONCURs re~\Q o~ ERNESTO D. ACOSTA Associate Judge an

.. DECISION - CTA CASES NOS. 1635 & 1654 - 7- CERTII!'ICATIOM I hereby certify that this decision was reached after due consultation among the members of the Court of Tax Appeals in accordance with Sec tion 13, Article VIII of the Constitution. ~~ Court of T~x Appeals R.l