CTA Case No. 4854 (Decision)

HFI'llnlJ(' (11' '1f!f l'lllLll'P!':f�-; (:I l\1 I�: T 0 F I' -\ ;, !\ I' I' I ' �\ I :; 1JI 1 1:/cJr~ <:IT~� T () n \ �~; 1\ � n: n f' IU l S '\ .l I< . , l'r� I i 1. i C>!lf-' 1�, TilE c:cl~ltll';:;ln~JI<H <JF f'JTII~N:\1, ltJ�:\'ENlTf':, X- - - X lll:c: I~~ ION bt�nnght by lH~t:it.i()net� [Ill~ t�:1;; rpfund of alleged PrrnnPnus overp:Jymellt ul a1l v :l I () 1'1' II! ill I I! (, :un u 1111 t uf Pl:/.3,929.00 :1nd \'all!e-adderl t::JXI'S of P.l2,t,IJ'S.UO. P P t i t i o tt ~~ r T nnHI s !'. . T P Ill p r� o s n .J r . i s ;t F i I i l' i '111 , 1' I legal [�lttd 1:~th'YP ,. hy pro[essiun. Ill petit�iuHPr imported from tltP l!nited States, :1 l 1)fl') ll()dgf' C n t a v n 11 1>'11 i cIt i 11 - 1 [\ I�' h'li I l :11�r� !>nih Tit i �co gi[t: ir,; ('r>Vf:'I'Pd hy a Deed nf IJcJ!lill:illtt P.'\PCHL<~d on Oc�t"IH�t� 30, ]q{)() [aV!Jt� r1f pr>l it illllf'l' (1<\lti!Jit "n") . i L s i Ill[ H.l r� t a t i ' 111 , p e L i 1. i <1 11 t' t� a p p I i_ f'' d h 1 r impor�t;olt ion ~,;�itlt the !Jr~t�actment uf TrndP "N ()- Dn 1 1 nt� Imp n r� t s ()r ~tolot� Vf'hicles" :-1T!d \�':ts 480

DECISION - C.T.A. Case No. 4854 - 2- subsequently givert the authority by the Bureau of Import Services to import one ( 1) unit 1985 Dodge Caravan (Exhibit "C"). The Dodge Caravan vehicle was shipped from New York, USA, to the Philippines and arrived here on June 14' 1991 covered by a Bill of Lading tvhich described the shipment: as a 1985 Dodge Caravan (used) with a gross weight: of 1769 kgs. (Exhibit "D"). Upou the shipment's arrival, p e t i t i one r f i 1 e d w i t h 1- he B urea u of Customs an Import Entry and Internal Revenue Declaration .� dated June 1 4 � 1991 (Exhibit "E") , and the subject vehicle \vas consequently examined and appraised by Customs examinPrs to determine the amount of duties and other taxes that: should be paid by the petitioner. Upon examination, the principal appraiser of the Bnt�eau of Customs computed the fc>llot-'ing charges to bP paid hy the petitioner without imposing the ad valorem tax, thus: Customs Duty P W\ , r::, 7 t, . 00 Ad Va lot�em Tax 22,53].00 Vnltu~-Arlded Tax - rTo6-;To7:'Cm TOTAL AHOUNT TO BE PAID f{espondent, through Hegio11ol Director� PPlicidad Viray, did not agree \-'it:h the foregoing computation and instead issued an Authority to Helease Tmt�n t�tetl Goods (Exhi!Jit "G") upon the payment of internal revenue taxes listed therein iu the total sum of P158,854.00, computed as tollows: 481

DECISION - C.T.A. Case No. 4854 - 3- Ad Valorem'Tnx Pl23,929.00 3 It, 9 2 5. 00 Vnlue-Added Tax - PL58,854.00 TOTAL INTERNAL REVENUE TAX E s� T 0 B E P A I D Petitioner objectetl to the impnsitiott of tile ad valorem tax because he maintains that it i.s a ten-seater vehicle 1.vhich falls outside the clefiniti.ort o( an automobile therefore no longer subject to the ad valorem tax. However, in order to effect the release of the vehicle, petitioner, on .June 26, 1991, pr1id under protest the followittg duties and� taxes: Customs Dttty p 8 3' 5 714. 00 50% Ad Valorem Tax 124,259.00 Value-Added Tax - 35,018.00 T0 TAL P242,851.00 This payment is covered by a certificate of payment No. 146370 (Exhibit "H") and official receipt no. 34997672 (Exhibit "I"). In a letter elated July 3, 1L91, petitioner filed a claim for refund in the amount of P123,929.00 represPnting the alleged erroneous payment or the 50% ad valorem tax and the allegetl overpayment of v�llue-added tax based on the following grounds: 1.) Subject motor vehicle is not subject~ in view of the finding of the to ad valorem tax that the same is H 10-seater CUstoms examiner . y e., h. l c l e ; ~ . 2~. ) The actual condition of the motor veJllcfe_ ~..Ja!"' no l JISed as basis of the 482

DECISION - C.T.A. Case No. 4854 - II - computation of the tax. Absolute reliance ou i t s red book v a 1u e wa s made \v i t ho u t t a k i 11 g i n to a c c o u n t: t h a L t h e mo t o 1� v e h i c 1e i s d a nw g e d i n some of its portions as indicated in the survey report and record. Respondent denied the claim for refund in a letter, dated June 15, 1992 (Exhibit "K"), and maintained that the Dodge Caravan imported by petitioner falls withi11 the definition of an automobile as provided by I~epublic Act 1186 therefore subject to Section 149 of t:he Tax Code imposing an ad valon~m tax u n sa i d i 111 port a t ion . This denial prompted the petitioner to file Litis petition on October 7, 1 q 9 2 '" i t h the prayer t h a t respuudent. be ordered to refund the amount of P123,929.00 representing alleged overpayment of the ad valorem tax and P12,lt85.00 as overpayment of value-added tax. Respondent in his answer presented the following special and Affirmative Defences: 4. Petitioner has failed to state any cause of action under Section 204 of the Tax Code, under which the Commissioner of Internal Revenue allegedly may credit or refund taxes erroneously or illegally received. In the instant case, petitioner begs the issue, as it has miserably failed to show 011 the face of the petition that the collection of the aforesaid tax liability in the amounts of Pl23,929.00 as erroneous overpayment of ad valorem tax and P12,485.00 as erroneous overpayment of value-added tax, plus interest due thereon, is illegal and e~roneous as aga,inst the tax payer is (sic) they are i_n the natut-'e.of tax exemption. � J, -~ ., ' �~ '.'. ~.� �, ; :~. :; 483

DECISION - C.T.A. Case No. 4854 - 5- 5 . Itt add i t i on , \ve 1 1 -set t 1 e d i s the doctrine that provisions ott the tax refund are construed strictly against the taxpayer as they are in the nature of tax exemption. 6. Besides, ill an act ion for refund the taxpayer has the burden to show that the taxes paid were erroneously or illegally paid and failure to <:\~ so is fata,l to the action fot' refund. 7. The Honorable Court has no jurisdiction over the instant case as the Petition fur Review was filed by petitioner after thirty (30) days Jrom the receipt of denial of the claim for refund, hence, petitioner's judicial actiott lor claim for refund had already prescribed. The foregoing facts raises 2 basic issues, to \vit: 1) Whether or not this Court has jurisdiction to take cognizance of this petition; 2) Assuming that this Court has 1985 Dodge jurisdiction, whether or not the subject to Caravan imported fly petitioner is the 507.. ad va lorern tax. With respect to the first: issue, respondent: asserts that thP petitioner's appeal was filed beyond the 30-day period provided in Section 11 of Republic Act 1125 and, therefore, this Court cattnot take cognizance of the same for lack oi jurisdiction. �P> e~\'" ~t. i�~ p>ner ' in his Memorandum filed on February 23, ��'- 199~ .~~Hlt~~Js 'the. lett~r ctellYJng his claim for refund ~ ~, ~- �� ��':: -J< �� ')'. that r .. ,- .:. � � � , ,� ,� �� ' .��� datetl �JJ.Ii�~~:-.��!S,�,!~~k�.W~S r~ceJvic:l.PY. p1e delivery unit of ). ' .,::(". . .' .�:i �: >' :-.,/ ~-~ ..~. -~ -~:.: :~0'~~; ,...~-�>;~ ~: ~<; . -~ ~- �__:�. '.'! 4 . , th~ l:ltn~i,;~ _of Pos); :~~F.�J.-~ar�n~.Pilis~p!:;�rbf~r 8, 1~92 and : i~:� ' : .�. .._::<~;: .:;-, ~::.,.;- -: ~�I ~!-. -�~ ~\ :'�/?~ ~ L~ . -;~ ~. :~:. ~~~- ~ ':: i~ ~--' ~~ :, . was recei~ed by hitn >~.tteih~JH~~riJpe(:~,-~�PltJ~ �.�.!lence thi'c> .. �' . ' 484

DECISION - C.T.A. Case No. 4854 - () - petition fot� revie1v filed ott October 7, 1992 \\18S WPl} within the 30-day period prescribed by Section ll of Republic Act 1 1 2 5 . He even went further to allege that the d~te of receipt by the Bureau of Post of said letter is sho1vn by Exhibit "L-Lt". A careful examination of the records of the case raises a serious doubt as to the veracity of petitioner's allegations embodied in his Hemorandum because a perusal of the evidence formally offered by petitioner and admitted by this Court on June 18, 1993, reveal that there is..,such exhibit as "L-Lt". In fact Exhibit "L" has only one submarking identified as Exhibit "L- 1 " \vh i c h refers to the entry under the column "Seating (Pass) on Exhibit "L" which reads "10" (page 32, CTA records). Neither can tlli s Cou r l locate any evidence which shows that the letter of deuial \vas indeed received by petitioner after September 8, 1992 or the date when Lhf~ Post Office received the same. Respondent, on the other hand, has confounded this clottd of doubt by her failure to submit her memorandum antl by her waiver in the presentation of her evidence. Neither did counsel for <-: ~ ~;~. ? . . ~~~ '�:� ��~ ;.,� . examination during the r.:~~PPlt(lei'}i 'pursua{~ia .thorough lack ' � ! :1. ,.. ? � ' '� i.. hearing&'.Pt this � � '. . �\�l; ��t,. of jurisdiction. 485

DECISION - C.T.A. Case No. 4854 - 7- Be thnt as it mny, i t is we 1 l SPttlPd that jurisdiction over� the subject matter is fundamental for a court to cH � t u n a g i v e n c o n t r u v e 1' s y . It: is confert�ed by law, not hy consent of t:he parties. It can be challenged at any stage of the proceedings aud for lack of it, a court can dismiss a cas�> ex mero motu. (Commissioner of Internal RPvellue v. Villa, 22 SCHA 3). Section 11 of Republic Act 1125 which is at the core of this parl i cular controversy, provides i II p a 1� I. as follows Any person, association or corporation ad v e 1� s e 1 y a [ f e c t e d by a dec i s i <> 11 o 1� r 11 1 i n g u [ the Commissioner of Tnt:rrrwl HevPnue, the Co 1 1 e c to 1� o f C us I oms o 1 an y p t' o v i ll c i a 1 o r c i. t y or Boa r d of Ass e s s men t A p p e ~~ 1 s may f i 1 e an apperd in tllP Court u( Tax Appeals \vithin thirty days after the t�eceivt of such dec-rs��rati or ru 1 ing. (underscoring supp 1 ied) The aforecited provision reckons the counting of the thirty-day period from the recei}!t of the decision or ruling of the Commissioner as the s~an of time given tu the petitioner to f i 1e his appeal lo this Cuttrt, otherwise t.he denial nf the claim for refund becomes final. As applied to the instant case, the petition � itself which was filed on October 7,1992 does not contain any allegation as t:o the date \vhen the petitioner received ��, the letter of the Deputy Commissioner denying "" .:: � � � ; . . ..":�: < ll'i:s cln1m. for refund. Ilo\;,e,ve:r, <: t"tie pel i 1 jou gives . 486

DECISION - C.T.A. Case No. 4854 - 8- details as to the date when the petitioner filed his claim Eor refund and the fact that the respondent denied the same in a letter, dated .June 15, 1992 \.Jithout giving us any i n f o r ma t i o 11 as t. o t h e t i me 1 y f i l in g of t: h i s a p pea 1 which is, to say the least, very critical. It is a well-settled rule that the question as to whether or not a Court has jurisdiction over the subject matter of a case is determined from the allegations of the complaint, not the allegations in the answer (Multinational Village Homeowner's Association Inc. vs. Court of Appeals, 203 SCRA 1011; Orosa Jr. vs. Court of Appeals, 193 SCRA 391; Notre Dame de Lourdes Hospital vs. Mallare-Phi 1 ips, 197 SCRA 187). This r11le also holds true with regard to petitions for review filed with this Court which is found in Section 2, Rule 5, of the Rules of the Court of Tax Appeals, hereunder quoted: The Petition for HF�view shall cnntai.u a 1 1ega t i o 11 s show i n g j u l' i s d i c t ion i n t h e Co u r t , a concise statement: ot the ultimate f:<'tcLs and n summary statement of the issues invulvf~d in the case, as well as the reasons relied upun for ,the ~:eversal of the responrlenl 's rlf~cision. A . ;�:<:.~Q}c)y)r'>.f. the.f!�eslsion appe<;tled from slwll lw ���.�At~.ached tg t:he.�PetltfqtJ for Revjew. ��:i..:;. :~ "' . ~ Lhe r�ecn'[:Gl~ �o),t~hi8�. (..'. �<l~~f�P.f:ll'1 ic�ulnrly .' ~ncl:the�. f o r ~� e v ie \v e v t d .e. u c e : s t~ b s e rru en t 1 y � ;\ . :~ j } of f e 'red ll y p t 1! (~ t' I i tl on e r , g i v e s d f.;; f:. he r a i sou d ' e t re as 487

DECISION - C.T.A. Case No. 4854 - f) -- to \vh y this C0111'1 f-dtullld Ink~> cngniz:-tfiCP of this appt�nl, taking itttn consideration the allegation of respondellt that this acliou was filed beyoud the thirty-day p!>,J'iod prescribed by la1v. r n v i e lv o f t h c [ot�eguing, this pelit:iun is hereby dismissed fpr k l:l (: () I j tJ 1' i ~_; d i (' I i ()II I.J j I h 0 11 L t p 1' ( , II ( lllll (. (' IU 1-' 11 as to costs. SO ORDERED. �~ ~~!V' RAMON 0. DE VE Ass o e i u t e ,J u tlg WE CONCUR: <t:.~Q.~ ERNESTO D. ACOSTA Presiding ~UI�. K. GRUBA .lndg<~ ��. �Co . 'f. .? ';, 488

DECISION - C.T.A. Case No. 4854 - 10 - CERTIFICATION I hereby certify that this decision was reached \ after due consultatiott between the members of the Court of Tax Appe1:1l s iu accnrdnnce \vi th Sect ion 13, Article VIII of the Constitution. ~~ P t� Nd d J. n g .J u d g e Court of Tax Appeals 489