Bases Conversion and Development Authority vs. Commissioner of Internal Revenue

DECISION

COT ANGCO-MANALASTAS, J.:

On appeal before the Court En Bane is the resolution of the CTA First Division, dated June 9, 2011 , which denied petitioner's Motions fo r Reconsideration of the fo llowing:

a) March 28, 2011 Reso lution denying petitioner's Petition for Review; and b) Apri I 26, 2011 Resolution accepting petitioner's Motion for Reconsideration, but subject to the caveat that its payment of docket fees after the lapse of the reglementary period does not cure the jurisdictional defect. V

CTA EB No. 797 (C.T.A. Case No. 8176) Bases Conversion and Development Authority vs. Commissioner of Internal Revenue

The Facts

1 Petitioner is duly organized and existing by virtue of R.A. 7227, as amended, with principal office located at BCDA Corporate Center, 2nd Floor, Bonifacio Technology Center, 31 51 Street, Crescent Park West, Bonifacio Global City, Taguig City. It may be served with notices and legal processes through the Office of the Government Corporate Counsel (OGCC), located at 3rd Floor, MWSS Building, Katipunan Road, Balm·a, Quezon City.

Respondent Commissioner of Internal Revenue (CIR) is vested with the authority to carry out all functions, duties and responsibilities of the Bureau of Internal Revenue (BIR), including, inter alia, the power to decide, approve, and grant claims for refunds and/or issue tax credit certificates of erroneously paid or illegally collected internal revenue taxes.

On October 8, 2010, petitioner filed a Petition for Review with the CTA in order to preserve its right to pursue its claim for refund of the Creditable Withholding Tax (CWT) in the amount of P 122,079,442.53, which was paid under protest from March 19, 2008 to October 8, 2008. The CWT which petitioner paid under protest was in connection with its sale of the BCDA-allocated units as its share in the Serendra Project pursuant to the Joint Development Agreement with Ayala Land, Inc. The Petition for Review was filed with a Request for Exemption from the Payment of Filing Fees in the amount ofPI ,209,457.90. On October 20, 20 I 0, the CTA First Division denied petitioner's Request for Exemption and ordered it to pay the filing fees within five days from notic e. ~

CTA EB No. 797 (C.T.A. Case No. 8176) Bases Conversion and Development Authority vs. Commissioner of Internal Revenue

Petitioner moved for reconsideration which was denied by the CT A First Division on February 8, 2011 . BCDA was once again ordered to pay the filing fees within fi ve days from notice, otherwise, the Petition for Review will be dismissed. Petitioner fi led a petition for review with the CT A En Bane on February 25, 20 II , which petition was returned and not deemed fi led without the payment of the correct legal fees. Petitioner once again emphasized its position that it is exempt from the payment of such fees.

On March 28, 20 II , the petition before the CT A First Division was dismissed. Petitioner attempted to file its Motion for Reconsideration, however, the Officer-In- Charge of the First Division refused to receive the checks for the payment of the fil ing fees, and the Motion for Reconsideration. BCDA then fi led its Motion for Reconsideration by registered mail.

Subsequently, petitioner fil ed a manifestation stating the incidents relating to the filing of its Motion for Reconsideration. The CTA First Division, April 26, 20 II , issued its Resolution, the dispositive portion of which states: "WH EREFORE, findin g no reason to deny rece ipt of the supposed Motion for Reconsideration of the Petitioner on the dismissal of its Petition for Review, the Executi ve Clerk of Court III of this Division, Atty. Margarette Y. Guzman, is hereby DIRECTED to allow petitioner BCDA to fil e the same, or to accept, said pleading which was allegedly mailed through registered maiL upon receipt thereof, and to commence the procedure in pay ing the prescribed docket fees, subject to the caveat herein stated, should petitioner BCDA dec ide to pursue its case."

On May I 7, 2011 , petitioner moved for reconsideration of the Apri I 26, 20 1 1 resolution and prayed that it be allowed to pay the prescribed docket fees of P¹ ,209,457.90 without qualification. On June 9, 20 11 , the CTA First Division denied both motions for reconsideration. ~

DECISION

CT A EB No. 797 (C.T.A. Case No. 81 76) Bases Conversion and Development Authority vs. Commissioner of Internal Revenue

The Issues²

Petitioner relies on the following grounds:

I.

The CTA, First Division erred in dismissing BCDA's Petition for Review for non-payment of the prescribed docket fees within the prescribed period.

II.

The CTA, First Division erred in ruling that BCDA is a government owned and controlled corporation and as such, is not exempt from payment of legal fees under Section 22, Rule 141 of the Rules of Court, as amended.

Ruling of the Court

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Section 22, Rule 141 of the Rules of Court, as amended, provides for the exemption from the payment of filing fees, as follows: "Sec. 22. Government Exempt. - The Republic o f the Philippines, its agencies and instrumentalities are exempt from paying the legal fees provided in the Ru le. Loca l governments and government-owned or - contro lled corporations with or w ithout independent charters are not exempt from paying such fees. xxx" Petitioner's argument hinges on its classification as a government instrumentality instead of as a government-owned or - controlled corporation (GOCC).

If it is an instrumentality then it is exempt from the payment of fees required under the Rules of Court. If it is a GOCC, then it is still liable for such fi ling fees.

Petitioner relies primarily on the rulings of the Supreme Court in Manila International Airport Authority (M!AA) vs. Court of Appeals) where the Supreme Court declared that the MIAA was a government instrumentality vested with corporate powers. In making this declaration, the Supreme Court included petitioner in the enumeration of national government instrumentalities vested by law with £,.-

CTA EB No. 797 (C.T.A. Case No. 8176) Bases Conversion and Development Authority vs. Commissioner of Internal Revenue juridical personalities without any specific discussion with respect to BCDA. Thus, we agree with the CT A Division that such determination, in relation to petitioner herein, was a mere obiter dictum.

Petitioner's reliance on Executive Order (E.O.) No. 5964 is misplaced. E.O. 596 merely defines and includes "government instrumentality vested with corporate powers" or "government corporate entities" under the jurisdiction of the Office of the Government Corporate Counsel (OGCC) as principal law office of government- owned or controlled corporations (GOCCs). This has little impact on petitioner since Section 18 of R.A. No. 7227 specifically provides that the Government Corporate Counsel shall be the ex officio legal counsel of BCDA. Clearly, BCDA was very early on classified as a GOCC.

Even E.O. 596 highlights that the distinction created by the Supreme Court is for the purposes of the provisions of the Local Government Code on real estate taxes, and other fees and charges imposed by local government units. It is clear that petitioner and petitioner's counsel understood this distinction, since despite the promulgation of the MIAA case on July 20, 2006, and E.O. 596 on December 29, 2006, petitioner continued to pay filing fees when it filed cases before the Supreme Court, as certified by the Deputy Clerk of Court and Chief Judicial Records Office of the Supreme Court. 5 Indeed, petitioner continued to file and pay filing fees 6 before the Supreme Court even after the promulgation of Philippine Fisheries Development Authority vs.(r- 4 Defining and Including "Government Instrumentality Vested with Corporate Powers " or ··Government Corporate Entities·· under the Jurisdiction olthe Office o/the Government Corporate Counsel (OGCC) as Principal Law Office ol Government-Owned or Controlled Corporations (GOCCs) andjiJr Other Purposes. December 29, 2006.

5 Rollo, pp. 108-109.

6 I bid.

CTA EB No. 797 (C.T.A. Case No. 81 76) Bases Conversion and Deve lopment Authority vs. Commissioner of Internal Revenue

Court of Appeal:/ on July 31, 2007; and Manila International Airport Authority vs. City of Pasay, et al. 8 on April 2, 2009, which again included BCDA as a government instrumentality with corporate powers.

Petitioner now alleges that its position as a government instrumentality was further supported with the enactment of Republic Act (R.A.) No. 10149, entitled An Act to Promote Financial Viability and Fiscal Discipline in Government-Owned or - Controlled Corporations and to Strengthen the Role of the State in its Governance and Management to Make Them More Responsive to the Needs of Public Interest and for Other Purposes, which provides:

"Section 3. Definiti on of Terms. -

XXX

(n) Government Instrumentalities with Corporate Powers

(GICP)/Government

Corporate

Entities

(GCE)

refer to instrumentalities or agencies of the government, which are neither corporations nor agencies integrated with in the departmental framework, but vested by law with special functions or jurisdiction, endowed with some if not all corporate powers, administering special fund s, and enj oying operational autonomy usually through a charter including, but not limited to, the fo llowing: the Manila International Airport Authority (MI AA), the Phil ippine Po11s Authority (PPA), the Philippine Deposit Insurance Corporation (PDIC), the Metropolitan Waterworks and

Sewerage System

(MWSS), the Laguna Lake Development Authority (LLDA), the Ph ilippine Fisheries Development Authority (PFDA), the Bases Conversion and Development Authority (BCDA), the Cebu Port Authority (CPA), the Cagayan de Oro Port Authority, the San Fernando Po11 Authority, the Local Water Utilities Administration (LW UA) and the Asian Producti vity Organization (A PO)." While the above definition includes petitioner BCDA as a government instrumentality with corporate powers, Section 3(o) specifically provides that for the purposes of said Act, government instrumentalities with corporate powers and government corporate entities shall be included in the term GOCC. ~

CT A EB No. 797 (C.T.A. Case No. 8176) Bases Conversion and Development Authority vs. Commissioner of Internal Revenue

Indeed, E.O. 596 and R.A. 10149, taken together show the intent of the legislature to treat petitioner, continuously and as it has been previously treated, as a GOCC. Thus, under E.O. 596, petitioner continued to be represented by the OGCC, as befitting its status as a GOCC; and under R.A. I 0149, petitioner was treated as a GOCC with respect to financial viability and fiscal discipline. In fact, even petitioner has continuously acted as a GOCC with respect to its filing fees, as evidenced by the certification from the Supreme Court. It is notable that when the first MlAA case was promulgated, and E.O. 596 was issued, both in 2006, petitioner stil l continued to pay filing fees on its cases filed before the Supreme Court. Indeed, even after the MIAA case was reiterated in the PFDA case in 2007 and in the second MIAA case in 2009, petitioner still paid filing fees before the Supreme Court. Again, when R.A. 10149 was enacted in 2010, petitioner continued to pay its filing fees before the Supreme Court. What is notable is that it is only before this Court that petitioner requested for exemption from the payment of filing fees. As shown in the Supreme Court's cet1ification, even after petitioner filed its petition for review with the CTA on October 8, 2010, it then subsequently filed petitions and paid its filing fees before the Supreme Cow1 on November 15, 2010 for G.R. No. 194247, and again on December 21 , 20 I 0 for G.R. No. 194675.9 In light of the foregoing, we quote the June 9, 2011 Resolution of the CT A First Division, to wit:

" BCDA fails to raise any new and substantial arguments, and no cogent reason exists to warrant a consideration of the Court's Resolution dated March 28, 20 II dismissing its Petition for Review. ~ 9 Rollo, pp. I 08-1 09.

DECISION

CT A EB No. 797 (C.T.A. Case No. 81 76) Bases Conversion and Development Authority vs. Commiss ioner of Internal Revenue It must be emphas ized that payment in full of docket fees within the prescribed period is mandatory. It is an essential requirement without wh ich the decision appealed from would become final and executory as if no appeal had been filed. To repeat, in both original and appellate cases, the court acquires jurisdiction over the case only upon the payment of the prescribed docket fees. In this case, due to BCDA's non-payment of the prescribed legal fees within the prescribed period, this Court has not acquired jurisdiction over the case. Consequently, it is as if no appeal was ever fi led with this Court.

Even granting that BCDA was able to pay the prescribed legal fees on April 7, 20 I I without incident, that circumstance does not cure the jurisdictional defect, since almost two (2) months had elapsed from the time BCDA received a copy of the Resolution dated February 8, 2011 (i. e., on February II , 20 11 ), embodying this Court's directi ve for BCDA to pay the prescribed legal fees within fi ve (5) days from such receipt. The exchange of correspondence, in the interim, between BCDA and the Court's Executive Clerk of Court IV, Atty. Elvessa P. Apolinario, is of no moment, since it is the Colllt which ordered such payment, and not the sa id Court offi cial.

Moreover, it must be pointed out that the delay in the payment of lega l fees herein, coupled with the fact that BCDA had previously and promptly paid lega l fees to the Supreme Court when it fil ed certain cases before it, negates the existence of good fa ith, nor could it be considered as an "honest belief and position" on the part of BCDA that it is exempt therefrom.

Fina lly, the claim of BCDA that there is no indication that BCDA 's non-payment of the prescribed docket fees was done deliberately in defi ance of the Rules of Court is belied by its continuous refusal to pay the sa id fees, despite being allowed to do so with a caveat in the Court's Resolution dated April 26, 20 11 , under the pretext that BCDA would want to do so "without qualification".

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WHEREFORE, prem1ses considered, the instant Petition for Review 1s hereby DISMISSED.

Associate Justice

DECISION

CT A EB No. 797 (C.T.A. Case No. 8176) Bases Conversion and Deve lopment Authority vs. Commissioner of Internal Revenue

WE CONCUR:

t __z-tz.

~~ EnNES TO D. A COST A

Presiding Justice

~~~ C. ~~ct~ \2_ JiJA~NITO c. CASTANEDA/JR. '

Associate Justice

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CAESAR~NOVA

Associate Justice

o~~A~A~UEZ

Associate Justice

~N . ~1~-C~ CIELITO N. MINDARO-GRULLA

Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the above Decision has been reached in consultation with the members of the Court En Bane before the case was assigned to the writer of the opinion of the Court. ~ __..~ [, .

(? '-rYL_ ERNESTO D. ACOSTA

Presiding Justice