Aepublic of the Philippine? ‘GOURT.OF Tax Appeals Insular Lumber Company vs. C.OTEDAE Case No. 1624 Revenue

* aEPUBLIC OF THE PHILIPPINE?

‘GOURT.OF TAX APPEALS INSULAR LUMBER COMPANY, Petitioner, = versus - C.oTedAe CASE No. 1624

REVENUE

Respondent.

DECISTIO8S

This case involves a claim for refund of the amount of #19,921.37 representing 25% of the specific ‘ax paid on manufectured mineral oi] and motor fuel utilized by petitioner in the operation of its forest concession in the year 1963.

Petitioner, a corporation organized and existing under the lawsof lew York, UsSeAey and duly author- ized to do business in the Philippines, is a forest concessionaire and a licensed operator of a sawmill (pars. 1«2, petition for review; respondent's MOMOe, pe 177, C.T.A. rec.).

In the year 1963, petitioner purchased eanufac- tured ofl and motor fuel which it used in the opere- tion of its forest concession, sawmill, planihg silis, power units, vehicles, dry kilne, water pumps, lawn mowers, and in furnishing free water and light to its employees, on which specific tax was paid.

In a letter dated December 22, 1964, petitioner 236

DECISTORN «

CTA CASE No. 162% a Claimed refund of 25), or the amount of #19,921.37, of the speeifie tax pala on the manufactured mineral 011 and motor fuel (xh. 4-1, pp. 124-115, Ueleds POCe). In @ letter Gated february 11, 1965 anc allegedly re- ceived by petitioner on Mare 31, 1965 (ich. By p. 67, CeTehe POG. teSeMey pp. Le-16, July 5, 1966), respond- ent denied petitioner's claim for refund. un April 29, 1965, petitioner appealed to this Court. The issues raised in this case ares

(2) whetser or not this Court has jurisdiction to entertain the instant appeals ead Selo amount, with respect te the issue of jurisdiction walech was raised for the first time by reepondcent in his memorandum, we find ac alternative but to resolve it since jurisdictien oun be raised at eny stage of the proceeding.

Nespondent contends that this Court has no juris- diction over the instant case for the reason that since respondent's decision dated february 123, 1965 was re- celved by petitioner on March 11, 1965, and the petition for review was filed on April 29, 1965, the appeal vas inetituted beyond the thirty-day period proviced by law.

we find respondent's contention unmeritorious, while it is alleged in the petition ior review that the

A372

DECISION «

@ecision dated February 11, 1965 was received by peti- tioner on Mareh 31, 1965, in the petitioner's semoran- dum submitted in support of its stand, it is averred that said deeision wos reesived on Mareh ll, 1965. That the receipt Sook place on Mareh 31, 1965 was testified to by lr. amano S, Maravilla, petitioner's Manila office manager, whieh testimedy has not been disputed by respondent. Hence, we are constrained te believe that the allegation in petitioner's memorandum regarding Meareh 11, 1965 as the date of receipt is merely a clerical error. In thig circumstance, this Court has jurisdietion over the questioned appeal.

we come now to the second issue. It is alleged that petitioner is not entitled to the refund on the greante (1) that Mepublie aet No. 1435 invoked by peti- tioner os « legal basis for the claim for refund is anconstitutional because the aforesaid law embraces more than one subjeets (2) that the privilege of tax refund provided for in Section 5 of Aepublie Ast iio, 1435 4s limited to a pericd of five (5) years from June 14, 1956, the date the aforesaid aet took effect, and as the manufactured ei] and fuel were purchased end consumed by petitioner in 1963, or sore than five years beyond June 14, 1956, the petitioner's claim for refund cannot prosper; (3) that there is no sufficient evidence

23R

DeCIsIon =

CTA CASE No. 162% to show that the specific taxes on the satd petroleum products were paid; an’ lestiy, (4%) that petitioner is not entitled to the refund of the entire anount Claimed as only a pertioa of the mineral o11 and aotor fuel was used in its logeing operations and the right to the recovery thereof has already preseribed.

. / The issue of the consti tutionality of Republic ast No. 1435 wes not set forth in respontent's answer to the petition for review. It was raised for the first time in the memorandum ef counsel for respondent. It is ergued that the refund proviso of Section § of | iepublic Act tio, 1435 is absolately incongruous with | the subject expressed in said act in violation ef artiele VI, Section ai, of the Constitution. | We do met find any incongrulty as charged by re- spondent. ‘The partial refund of specific tex under the conditions set forth in Section 5 ef Republic Act We. 1435 is not a deviation fron the sain purpose of saic law. This previso, referring as it does te spe- eifie tax on. of] and fuel as the main body of Neput- iie set Ro. 1435, is germane to the general subject of said act) With respect te the second ground, we fin? the same untenable. In a similar case decided by this Court, we helds | |

LS BCISIOA =

CTA Casi Wo. 162% ;

= x ® (me partial refund of specific t paid for oils used in agriculture and aviation, during a limited period, appsars in Section 142 of the Revenue Code while the partial refund of specific tax paid for ells used by miners and forest concessionaires, without limitation as to time, is te Section 5 ef the any ble feason for reading the limitation ef the operative period . provided for elias used in agriculture am aviation into the provision on the refund to ainers and forest con- cessionaires., Hote that seetion § of the Aet hes to provide expressly that the procedure for refund pro- vided in subparagraphs 1 aad 2 of Seetion 142 of the Revenue Code are applicable to revunds to ainers and forest econcessionaires otherwiee it weuld be deficient on this point since the provisions in Seetion 1*2 of the Revenue Code are not supposed to supplement the defleiencies in the provision granting partial re~- fumi to miners and forest eoneces- ow fa} avec “ining & Development Cerp. vs. Comm. of Int, Revs, Culede Case Nos, 1635 & 1708, Aug. 15, 19684) The third objection to the claims for refund is equally unmeritorious, Wxhibits i, l-l to li-9, i, I-1 to I-13, J and J-1 evidence the payment of speci- fie tex on the aineral 011 and eotor fuel in question.

as wegards respomient's contention to the effect 240

BRCISION «

GTA CASE He. 162% 6 thet, even granting that petitioner is entitled to a refund, the totel amount of $19,921.37 is not refundable for the reason that some of the petrol eun produets purchased were utilised by petitioner in mon-logging operations, we fine this contention in aceord with Section 5 ef Aepublic Act No. 1435. Under this lew, 254 of specific tax paid on o1) used by miners or forest concessionaires in their operations is refundable. In other wortis, only 25. of sach tax as was paid on ei] ased in the logging operations of forestry concessionaires is refundable. The author- ized refand of taxes is in effeet a tax exemption; «nd like a tax exemption provision, s grant of refund tust be strietiy construed. Since the operation of sawnilis is Cistinet from the operation of a forestry concession, the refund provision of Seetion 5 of Republic act No, 2435 cannot be extended to the operation of sawmills or other non-logging activities. )

The records show tnuat out of the ©1),921.37 re- presenting the 25) of specifie tax paid, only the amount of ©1%,598.05 was paid on of] utilized in log- ging operations.

Lastly, we find thet petitioner's right to claia the refand of a pertion of specific tax paid on the mineral 612 and moter fuel in question had alreacy prescribed. In the case of Atlas Consolidated Mining 241

DacisiIon - |

CTA GASE Ne. 162% end Development Corporation v. Commissioner of Inter- aal an we helds ( “WOth respect te the claim for tax erecit ay the aun py Ri 00 70 in ¢.?f a. a BR “i703, cope R ve ase HO.

pears the same represents ate the specific texes “7 on fuel and lubricating ofls used from the gore January 1 te December 31 of 962. The ¢liaim for refund or tax — credit for the salé sum was filed with respondent on October 15%, 1965 and "the petition for review was flied on November §, 1965, more than ~~: ears efter the use of the = is, after the petitioner's t Snorete "had revert io the lieht of the doctrine in the case

of Commissioner of Internal Revenue

WV. Inselar a. or Cenpeny and Court December 7) s 2 x."

Fellewing the doctrine laid dewn in the aforesaid case, the right to the refund ef 25% of the specific tax paid on of} and fue) ased prior to April 29, 1963, when the herein appesl wes filed, had already preseribed. Consequently, the total amount refundable to the peti- tioner is 10,560.20, somputed as follows:

7c quantity used f er Less quantity used for segeing . erations from mS 3 eeveosue ig A sand ror refund seeeree r Amount of specific tax aid on + tare 4 itera at | ash speaifi “say ea od ee @ by - able aaernucveveesneguae © “ »862.190 242

DEcIsiog -

OTA CASE Re. 1624 B. DIvse. FUSL Lit toted quantity used for aaaaik logging operations ....... 2,358,376 Less quantity used fer logging operations from dan. 33 1963 to April 28, 3 3 e@¢eeuas Basis fer refund eneeree roe as

\Conversions

—Eth4- e “Tf.

eV, = 1,536.94 Aedes) Amount of specifie tax peid on 1538. 9% LT,

at Ba OO per

® 1,535.

2584's i aati tax re- fun able Terre ee errr rr ree TS! 384.73

c. Li “quantity used for "idee apo: esesace 385, 064,53 Less emanate used f socsits © operations "te 28.29 : Hm April fe cae ise tank ons xz 2 9 e liters) eeesase Sane Basis for refund etrenee , sd Amount of gg a tax 302,345.15 Liters at 99.07 254 specific tex re- Puniable ereveosccessscccceccs Sp RIL 004 D. 3 speeifie tax re- ble per inves- tigation CCRC EHH DOS TERED EHS 22.3 Teteal specific tax refundable ...0..0+ PIS; Be0-28 243

DéicTsIOn +

CTS Case No. 162% WHERMPONS, finding petitioner entitled te the re- fund ef #10,560.20, instead ef £19,921.37, respondent is hereby ordered te refund the said sum of #10,960.20 te petitioner, witheut pronouncement as to costs.

SO O8DRRED, Quezon City, July 31, 1969.

ROMAN M, UMALI

Presiding Judge

I CONCURs

bore, bho AVANC TAA

Associate Judge