CTA Case No. 3720

DECISION -

Rhone Foulena-France

Vials and athers 60, 220,83 6% 4 O99 3 1,424.74 Tablets TOR 7 87 OA AF 9 O77 BP 13,187.26

Janssen Fharman

caiticals OAS OLB. Le A OWE ZO eh BF Ook

TOTALS

Based an the above computation, petitianer SEFO acerued the amount of F418,95S2.08 as royalties clus ta the petitianer SEF T and paid the corresponding withholding tax of F1l46,633,.22 (first two items above). The latter amount formed part of the total tax paid af FI6S,O89.85, Far latter dated August 2, 198% (Exh, H) the Technology Transfer Board (TTE) approved the licensing agreement between petitioners GEFO and SEFIO (Exh. G), effective fram December 8, 1978 (exh. Ge) and up ta December 7, 1985 (Exh. G4). Said approval was subject to certain amendments as follows:

"x ow ¢ subject to the attached general terms anc candi tians af registratian and the following:

Frea-Registratian Conditions:

Amendment of the Cantract as

follows:

1. To reflect aun Art. TIL, Secs. 3.9 and 3.02 rayalty rates of 330 oh Of net sales an pharma~ ceutical products and 2% af net a an CONSUME health oducts!

pr (Exhs. H and Hei) Accordingly, SEFO adjusted ats intercampany accaunt with SEF T an arcder ta carrect the overacerued royalty due to the decrease in the appraved royalty rates ahbove-mentianed. (exhs. Wy Jed, d-2, and Kkemd).

Ags a result of the qualified approval by the Technology Transfer Board, SEFO should have only accrued AS rayalties the tatal amount af BeOL,4F1 8.10 and withheld the amount af FR7,996.35 aS an tax thereon. Hence « there WAS an qveracerual of royalty of F1l67,533,98 (Exh. I) and a resulting overpayment af withhalding tax by FOG8,636,.89, broken dawn as follows:

Non--resicernt TTE Rayalty Payment aia A Approved that a Net, Sales

Fharina

ceutical Products FO,564,981.15 my A Pee) P49 AS PR? Ae SO

Consumer

Frade ts stg hat A vont 2 OF voennnmnadl CO Oe TOTALS Peal, 418.10 FR7 , 996, 0S 3834

Consequently, the amount of FSE,6346.89 or the difference between the tax paid (F146,6233.22) and the correct amount af tax that shauld have been paid (F87,9946.35) (Exhs. 1, I-1l, I-2 and I-53) was erraneously withheld and paid ta the government.

On January 13, 1984 petitioners filed their claim for refund (Exh. F) with the respondent’ a Bureau, likewise, the instant petition for review.

The case before Us presents no dispute as ta the relatively simple material facts. After petitioners formally offered their evidence the respondent eaxpediently submitted the case far decision an the basis of the pleadings sans the requisite BIR records probably “Lost in the agblivion of fargotten lore." And, Since ane whe prays for judgment on the pleadings wai theout offering proof as to the truth of his allegations, must be understood ta have submitted the truth of all the material and relevant allegations for the oppasing party, and ta rest his motion for judqment an these allegations taken together with such of his own as are admitted (Bauermann v. Cases, I) Phil, 386; Evangelista v. De Ia Rosa, et al., 76 3832 Phild. LLG), respondent, as pointed oat by petitioner may be considered as nat questianing seriously petitioner’s entitlement to its claim for refund. Mare so when the evidence presented, which Was not digputed. by respandent sufficiently establishes petitioner's right to the refund." (Commonwealth Management and Service Corporation v. Commissitoner of a Internal Revenue, CTA Caze No. S232, June 2a, (985), Going by such pronouncement and insofar as the same is brought to bear upon the petitioner’s case at bar, there can he no accasion to speculate upon what rule should apnmly.

All told, the basis of the claim is not short of specific support ain terms of tractable data openiy laid and fully disclosed, as such deserves the credence that shauld mormally be accorded in the absence of contrary evidence af relevance and competence required to bash that patina of validity aver the claim. And the records make it clear that the requisite statements or certifications of the tax withheld, paid and remitted upon which tacked the refundable amount claimed could readily furnish 333 the legal hasis far a definite resalve Burk apprapriate action thereon appears dawdled in a limbo of lingering verification, which comes as an aggravated chutepah, $0 to apeak. Fetitioaner oar ary similarly circumstanced taxpayer for that matter deserves a measure of fair dealing in a more expeditiaqus and competently responsive actian.

Suffice ait therefore, bath the circumstances Obtaining and the relevant legal standards campel the conclusion that petitioners have proved entitlement ta ai favorable determination for the desired relief.

WHEREFORE, the refund of the amount sought is hereby ordered the respondent. No pronouncement as to costs.

Associate Jude

WE CONCUIPR :

Quraale y

AMANTE /ILLER

Fresiding Judge

(on leave) CONSTANTE C. ROAQUIN

Agssaciate Judge

CERTIFICATION

I hereby certify that this decision WAS reached after due consultatian amang the members of the Court of Tax Appeals in accordance with Section 12, Article VITT of the Constitution.

Fresidiftg Judde

Court of Tax Appeals

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