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CASE NO. 1:

G.R. No. 159647 April 15, 2005

COMMISSIONER OF INTERNAL REVENUE,Petitioners,vs.CENTRAL LUZON DRUG CORPORATION,Respondent.

D E C I S I O N

PANGANIBAN,J.:

The 20 percent discount required by the law to be given to seniorcitizens is a tax credit, not merely a tax deductionfrom the gross

income or gross sale of the establishment concerned. A tax creditisused by a private establishment only after the tax has beencomputed; a tax deduction, before the tax is computed. RA 7432unconditionally grants a tax creditto all covered entities. Thus, theprovisions of the revenue regulation that withdraw or modify suchgrant are void. Basic is the rule that administrative regulations cannotamend or revoke the law.

The Case

Before us is a Petition for Review1under Rule 45 of the Rules of Court,seeking to set aside the August 29, 2002 Decision2and the August 11,

2003 Resolution3

of the Court of Appeals (CA) in CA-GR SP No. 67439.The assailed Decision reads as follows:

"WHEREFORE, premises considered, the Resolution appealed fromis AFFIRMEDin toto. No costs."4

The assailed Resolution denied petitioners Motion for Reconsideration.

The Facts

The CA narrated the antecedent facts as follows:

"Respondent is a domestic corporation primarily engaged in retailingof medicines and other pharmaceutical products. In 1996, it operatedsix (6) drugstores under the business name and style Mercury Drug.

"From January to December 1996, respondent granted twenty (20%)percent sales discount to qualified seniorcitizens on their purchases ofmedicines pursuant to Republic Act No. [R.A.] 7432 and itsImplementing Rules and Regulations. For the said period, the amountallegedly representing the 20% sales discount granted by respondent

to qualified senior citizens totaled P904,769.00.

"On April 15, 1997, respondent filed its Annual Income Tax Return fortaxable year 1996 declaring therein that it incurred net losses from itsoperations.

"On January 16, 1998, respondent filed with petitioner a claim for taxrefund/credit in the amount of P904,769.00 allegedly arising from the

20% sales discount granted by respondent to qualified senior citizens incompliance with [R.A.] 7432. Unable to obtain affirmative responsefrom petitioner, respondent elevated its claim to the Court of TaxAppeals [(CTA or Tax Court)] viaa Petition for Review.

"On February 12, 2001, the Tax Court rendered a Decision5dismissingrespondents Petition for lack of merit. In said decision, the [CTA]

justified its ruling with the following ratiocination:
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x x x, if no tax has been paid to the government, erroneously or

illegally, or if no amount is due and collectible from the taxpayer, taxrefund or tax credit is unavailing. Moreover, whether the recovery ofthe tax is made by means of a claim for refund or tax credit, beforerecovery is allowed[,] it must be first established that there was anactual collection and receipt by the government of the tax sought to

be recovered. x x x.

x x xx x x x x x

Prescinding from the above, it could logically be deduced that tax

credit is premised on the existence of tax liabilityon the part oftaxpayer. In other words, if there is no tax liability, tax credit is notavailable.

"Respondent lodged a Motion for Reconsideration. The [CTA], in itsassailed resolution,6granted respondents motion for reconsiderationand ordered herein petitioner to issue a Tax Credit Certificate in favor

of respondent citing the decision of the then Special Fourth Division of[the CA] in CA G.R. SP No. 60057 entitled Central [Luzon] DrugCorporation vs. Commissioner of Internal Revenuepromulgated onMay 31, 2001, to wit:

However, Sec. 229 clearly does not apply in the instant case becausethe tax sought to be refunded or credited by petitioner was noterroneously paid or illegally collected. We take exception to the CTAs

sweeping but unfounded statement that both tax refundand taxcredit are modes of recovering taxes which are either erroneously orillegally paid to the government. Tax refunds or credits do not

exclusively pertain to illegally collected or erroneously paid taxes asthey may be other circumstances where a refund is warranted. The taxrefund provided under Section 229 deals exclusively with illegallycollected or erroneously paid taxes but there are other possiblesituations, such as the refund of excess estimated corporate quarterly

income tax paid, or that of excess input tax paid by a VAT-registeredperson, or that of excise tax paid on goods locally produced ormanufactured but actually exported. The standards and mechanicsfor the grant of a refund or credit under these situations are differentfrom that under Sec. 229. Sec. 4[.a)] of R.A. 7432, is yet anotherinstance of a tax credit and it does not in any way refer to illegally

collected or erroneously paid taxes, x x x."7

Ruling of the Court of Appeals

The CA affirmed in totothe Resolution of the Court of Tax Appeals(CTA) ordering petitioner to issue a tax credit certificate in favor ofrespondent in the reduced amount of P903,038.39. It reasoned that

Republic Act No. (RA) 7432 required neither a tax liability nor apayment of taxes by private establishments prior to the availment of atax credit. Moreover, such credit is not tantamount to an unintendedbenefit from the law, but rather a just compensation for the taking ofprivate property for public use.

Hence this Petition.8

The Issues

Petitioner raises the following issues for our consideration:

"Whether the Court of Appeals erred in holding that respondent mayclaim the 20% sales discount as a tax credit instead of as a deductionfrom gross income or gross sales.

"Whether the Court of Appeals erred in holding that respondent is

entitled to a refund."9
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These two issues may be summed up in only one: whether respondent,despite incurring a net loss, may still claim the 20 percent salesdiscount as a tax credit.

The Courts Ruling

The Petition is not meritorious.

Sole Issue:

Claim of 20 Percent Sales Discount

as Tax CreditDespite Net Loss

Section 4a) of RA 743210grants to senior citizens the privilege ofobtaining a 20 percent discount on their purchase of medicine fromany private establishment in the country.11The latter may then claimthe cost of the discount as a tax credit.12But can such credit be

claimed, even though an establishment operates at a loss?

We answer in the affirmative.

Tax Credit versus

Tax Deduction

Although the term is not specifically defined in our Tax Code,13taxcreditgenerally refers to an amount that is "subtracted directly fromones total tax liability."14It is an "allowance against the tax itself"15or "adeduction from what is owed"16by a taxpayer to the government.

Examples of tax creditsare withheld taxes, payments of estimated tax,and investment tax credits.17

Tax creditshould be understood in relation to other tax concepts. Oneof these is tax deduction-- defined as a subtraction "from income fortax purposes,"18or an amount that is "allowed by law to reduceincome prior to [the] application of the tax rate to compute theamount of tax which is due."19An example of a tax deductionis any ofthe allowable deductions enumerated in Section 3420of the Tax Code.

A tax creditdiffers from a tax deduction. On the one hand, a taxcreditreduces the tax due, including -- whenever applicable --the income taxthat is determined after applying the correspondingtax rates to taxable income.21Atax deduction, on the other, reducesthe income that is subject to tax22in order to arrive at taxableincome.23To think of the former as the latter is to avoid, if not entirelyconfuse, the issue. A tax creditis used only afterthe tax has beencomputed; a tax deduction, before.

Tax Liability Required

for Tax Credit

Since a tax creditis used to reduce directly the tax that is due, thereought to be a tax liability beforethe tax creditcan be applied. Withoutthat liability, any tax creditapplication will be useless. There will be noreason for deducting the latter when there is, to begin with, no existingobligation to the government. However, as will be presented shortly,the existenceof a tax credit or its grantby law is not the same asthe availmentor useof such credit. While the grant is mandatory, theavailment or use is not.

If a net lossis reported by, and no other taxes are currently due from, abusiness establishment, there will obviously be no tax liability againstwhich any tax creditcan be applied.24For the establishment tochoose the immediate availment of a tax creditwill be premature andimpracticable. Nevertheless, the irrefutable fact remains that, under
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RA 7432, Congress has granted without conditions a tax creditbenefitto all covered establishments.

Although this tax creditbenefit is available, it need not be used bylosing ventures, since there is no tax liability that calls for its application.Neither can it be reduced to nil by the quick yet callow stroke of an

administrative pen, simply because no reduction of taxes can instantlybe effected. By its nature, the tax creditmay still be deducted froma future, not a present, tax liability, without which it does not have anyuse. In the meantime, it need not move. But it breathes.

Prior Tax Payments Not

Required for Tax Credit

While a tax liability is essential to the availment or useof any tax credit,prior tax payments are not. On the contrary, for the existence orgrantsolely of such credit, neither a tax liability nor a prior tax payment

is needed. The Tax Code is in fact replete with provisions granting orallowing tax credits, even though no taxes have been previously paid.

For example, in computing the estate tax due, Section 86(E) allowsa tax credit-- subject to certain limitations -- for estate taxes paid to aforeign country. Also found in Section 101(C) is a similar provision fordonors taxes -- again when paid to a foreign country -- in computingfor the donors tax due. The tax creditsin both instances allude to theprior payment of taxes, even if not made to our government.

Under Section 110, a VAT (Value-Added Tax)- registered personengaging in transactions -- whether or not subject to the VAT -- is alsoallowed a tax creditthat includes a ratable portion of any input taxnot directly attributable to either activity. This input tax may eitherbethe VAT on the purchase or importation of goods or services that ismerely due from -- not necessarily paid by -- such VAT-registered

person in the course of trade or business; orthe transitional input taxdetermined in accordance with Section 111(A). The latter type may infact be an amount equivalent to only eight percent of the value of aVAT-registered persons beginning inventory of goods, materials andsupplies, when such amount -- as computed -- is higher than theactual VAT paid on the said items.25Clearly from this provision, the tax

creditrefers to an input tax that is either due only or given a value bymere comparison with the VAT actually paid -- then later prorated. Notax is actually paid prior to the availment of such credit.

In Section 111(B), a one and a half percent input tax creditthat ismerely presumptive is allowed. For the purchase of primary agriculturalproducts used as inputs -- either in the processing of sardines, mackereland milk, or in the manufacture of refined sugar and cooking oil -- andfor the contract price of public work contracts entered into with thegovernment, again, no prior tax payments are needed for the use ofthe tax credit.

More important, a VAT-registered person whose sales are zero-rated oreffectively zero-rated may, under Section 112(A), apply for theissuance of a tax creditcertificate for the amount of creditable inputtaxes merely due -- again not necessarily paid to -- the governmentand attributable to such sales, to the extent that the input taxes havenot been applied against output taxes.26Where a taxpayeris engaged in zero-rated or effectively zero-rated sales and also intaxable or exempt sales, the amount of creditable input taxes duethat are not directly and entirely attributable to any one of thesetransactions shall be proportionately allocated on the basis of thevolume of sales. Indeed, in availing of such tax creditfor VAT purposes,this provision -- as well as the one earlier mentioned -- shows that theprior payment of taxes is not a requisite.

It may be argued that Section 28(B)(5)(b) of the Tax Code is anotherillustration of a tax creditallowed, even though no prior tax payments
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are not required. Specifically, in this provision, the imposition of a finalwithholding tax rate on cash and/or property dividends received by anonresident foreign corporation from a domestic corporation issubjected to the condition that a foreign tax creditwill be given by thedomiciliary country in an amount equivalent to taxes that are merelydeemed paid.27Although true, this provision actually refers to the tax

creditas a conditiononly for the imposition of a lower tax rate, not asa deductionfrom the corresponding tax liability. Besides, it is not ourgovernment but the domiciliary country that credits against theincome tax payable to the latter by the foreign corporation, the tax tobe foregone or spared.28

In contrast, Section 34(C)(3), in relation to Section 34(C)(7)(b),categorically allows as credits, against the income tax imposableunder Title II, the amount of income taxes merely incurred -- notnecessarily paid -- by a domestic corporation during a taxable year inany foreign country. Moreover, Section 34(C)(5) provides that for suchtaxes incurred but not paid, a tax creditmay be allowed, subject tothe condition precedent that the taxpayer shall simply give a bondwith sureties satisfactory to and approved by petitioner, in such sum asmay be required; and further conditioned upon payment by thetaxpayer of any tax found due, upon petitioners redetermination of it.

In addition to the above-cited provisions in the Tax Code, there arealso tax treaties and special laws that grant or allow tax credits, eventhough no prior tax payments have been made.

Under the treaties in which the tax creditmethod is used as a relief toavoid double taxation, income that is taxed in thestate of sourceisalso taxable in thestate of residence, but the tax paid in the former ismerely allowed as a credit against the tax levied in thelatter.29Apparently, payment is made to thestate of source, notthestate of residence. No tax, therefore, has been previouslypaid tothe latter.

Under special laws that particularly affect businesses, there can alsobe tax creditincentives. To illustrate, the incentives provided for inArticle 48 of Presidential Decree No. (PD) 1789, as amended by BatasPambansa Blg. (BP) 391, include tax creditsequivalent to either fivepercent of the net value earned, or five or ten percent of the net localcontent of exports.30In order to avail of such credits under the said law

and still achieve its objectives, no prior tax payments are necessary.

From all the foregoing instances, it is evident that prior tax paymentsare not indispensable to the availment of atax credit. Thus, the CAcorrectly held that the availment under RA 7432 did not require priortax payments by private establishments concerned.31However, we donot agree with its finding32that the carry-over of tax creditsunder thesaid special law to succeeding taxable periods, and even theirapplication against internal revenuetaxes, did not necessitate theexistence of a tax liability.

The examples above show that a tax liability is certainly important inthe availment or use, not the existence or grant, of a tax credit.Regarding this matter, a private establishment reporting a net lossin itsfinancial statements is no different from another that presents a netincome. Both are entitled to the tax creditprovided for under RA 7432,since the law itself accords that unconditional benefit. However, forthe losing establishment to immediately apply such credit, where notax is due, will be an improvident usance.

Sections 2.i and 4 of Revenue

Regulations No. 2-94 Erroneous

RA 7432 specifically allows private establishments to claim as taxcreditthe amount of discounts they grant.33In turn, the ImplementingRules and Regulations, issued pursuant thereto, provide theprocedures for its availment.34To deny such credit, despite the plain
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mandate of the law and the regulations carrying out that mandate, isindefensible.

First, the definition given by petitioner is erroneous. It refers to taxcreditas the amount representing the 20 percent discount that "shallbe deducted by the said establishments from their gross incomefor

income tax purposes and from their gross salesfor value-added tax orother percentage tax purposes."35In ordinary business language,the tax creditrepresents the amount of such discount. However, themanner by which the discount shall be credited against taxes has notbeen clarified by the revenue regulations.

By ordinary acceptation, a discount is an "abatement or reductionmade from the gross amount or value of anything."36To be moreprecise, it is in business parlance "a deduction or lowering of anamount of money;"37or "a reduction from the full amount or value ofsomething, especially a price."38In business there are many kinds ofdiscount, the most common of which is that affecting the income

statement39or financial report upon which the income taxis based.

Business Discounts

Deducted from Gross Sales

A cash discount, for example, is one granted by businessestablishments to credit customersfor their prompt payment.40It is a"reduction in price offered to the purchaser if payment is made withina shorter period of time than the maximum time specified."41Alsoreferred to as asales discounton the part of the seller and a purchasediscounton the part of the buyer, it may be expressed in suchterms as "5/10, n/30."42

A quantity discount, however, is a "reduction in price allowed forpurchases made in large quantities, justified by savings in packaging,shipping, and handling."43It is also called a volume or bulk discount.44

A "percentage reduction from the list price x x x allowed bymanufacturers to wholesalers and by wholesalers to retailers"45is

known as a trade discount. No entry for it need be made in themanual or computerized books of accounts, since the purchase orsale is already valued at the net price actually charged thebuyer.46The purpose for the discount is to encourage trading orincrease sales, and the prices at which the purchased goods may beresold are also suggested.47Even a chain discount-- a series ofdiscounts from one list price -- is recorded at net.48

Finally, akin to a trade discountis a functional discount. It is "asuppliers price discount given to a purchaser based on the [latters]

role in the [formers] distribution system."49This role usually involveswarehousing or advertising.

Based on this discussion, we find that the nature of asales discountispeculiar. Applying generally accepted accounting principles (GAAP)in the country, this type of discount is reflected in the income

statement50as a line item deducted -- along with returns, allowances,rebates and other similar expenses -- from gross salesto arrive atnet

sales.51This type of presentation is resorted to, because the accountsreceivableandsalesfigures that arise fromsales discounts, -- as well asfrom quantity, volumeor bulk discounts-- are recorded in the manualand computerized books of accountsand reflected in the financialstatements at the gross amounts of the invoices.52This manner ofrecording credit sales -- known as the gross method-- is most widelyused, because it is simple, more convenient to apply than the netmethod, and produces no material errors over time.53
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However, under the net methodused inrecording trade, chain or functional discounts, only the net amounts ofthe invoices -- after the discounts have been deducted -- arerecorded in the books of accounts54and reflected in the financialstatements. A separate line item cannot be shown,55because thetransactions themselves involving bothaccounts

receivableandsaleshave already been entered into, net of the saiddiscounts.

The termsales discountsis not expressly defined in the Tax Code, butone provision adverts to amounts whose sum -- along withsales

returns, allowancesand cost of goods sold56-- is deducted from grosssalesto come up with the gross income, profitor margin57derived frombusiness.58In another provision therein,sales discountsthat are grantedand indicated in the invoices at the time of sale -- and that do notdepend upon the happening of any future event -- may be excludedfrom the gross saleswithin the same quarter they were given.59Whiledeterminative only of the VAT, the latter provision also appears as asuitable reference point for income tax purposes already embraced inthe former. After all, these two provisions affirm thatsales discountsareamounts that are always deductible from gross sales.

Reason for the Senior Citizen Discount:

The Law, Not Prompt Payment

A distinguishing feature of the implementing rules of RA 7432 is theprivate establishments outright deduction of the discount from the

invoice price of the medicine sold to the senior citizen.60It is, therefore,expected that for each retail sale made under this law, the discountperiod lasts no more than a day, because such discount is given -- and

the net amount thereof collected -- immediately upon perfection ofthe sale.61Although prompt payment is made for an arms-lengthtransaction by the senior citizen, the real and compelling reason for

the private establishment giving the discount is that the law itselfmakes it mandatory.

What RA 7432 grants the senior citizen is a mere discount privilege, notasales discountor any of the above discounts in particular. Promptpayment is not the reason for (although a necessary consequence of)

such grant. To be sure, the privilege enjoyed by the senior citizen mustbe equivalent to the tax creditbenefit enjoyed by the privateestablishment granting the discount. Yet, under the revenueregulations promulgated by our tax authorities, this benefit has beenerroneously likened and confined to asales discount.

To a senior citizen, the monetary effect of the privilege may be thesame as that resulting from asales discount. However, to a privateestablishment, the effect is different from a simple reduction in pricethat results from such discount. In other words, the tax creditbenefit isnot the same as asales discount. To repeat from our earlier discourse,this benefit cannot and should not be treated as a tax deduction.

To stress, the effect of asales discounton the incomestatementand income tax returnof an establishment covered by RA7432 is different from that resulting from the availmentor useof its taxcreditbenefit. While the former is a deduction before, the latter is adeduction after, the income taxis computed. As mentioned earlier, adiscount is not necessarily asales discount, and a tax creditfor asimple discount privilege should not be automatically treated likeasales discount. Ubi lex non distinguit, nec nos distinguere debemus.Where the law does not distinguish, we ought not to distinguish.

Sections 2.i and 4 of Revenue Regulations No. (RR) 2-94 define taxcreditas the 20 percent discount deductible from grossincomefor income taxpurposes, or from gross salesfor VAT or otherpercentage tax purposes. In effect, the tax creditbenefit under RA7432 is related to asales discount. This contrived definition is improper,
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considering that the latter has to be deducted from gross salesin orderto compute the gross incomein theincome statementand cannot bededucted again, even for purposes of computing the income tax.

When the law says that the cost of the discount may be claimed asa tax credit, it means that the amount -- when claimed -- shall betreated as a reduction from any tax liability, plain and simple. Theoption to avail of the tax creditbenefit depends upon the existence ofa tax liability, but to limit the benefit to asales discount-- which is noteven identical to the discount privilege that is granted by law -- doesnot define it at all and serves no useful purpose. The definition must,therefore, be stricken down.

Laws Not Amended

by Regulations

Second, the law cannot be amended by a mere regulation. In fact, aregulation that "operates to create a rule out of harmony withthe statute is a mere nullity";62it cannot prevail.

It is a cardinal rule that courts "will and should respect thecontemporaneous construction placed upon a statute by theexecutive officers whose duty it is to enforce it x x x."63In the scheme of

judicial tax administration, the need for certainty and predictability inthe implementation of tax laws is crucial.64Our tax authorities fill in thedetails that "Congress may not have the opportunity or competenceto provide."65The regulations these authorities issue are relied upon bytaxpayers, who are certain that these will be followed by thecourts.66Courts, however, will not uphold these authoritiesinterpretations when clearly absurd, erroneous or improper.

In the present case, the tax authorities have given the term taxcreditin Sections 2.i and 4 of RR 2-94 a meaning utterly in contrast to

what RA 7432 provides. Their interpretation has muddled up the intentof Congress in granting a mere discount privilege, not asales discount.The administrative agency issuing these regulations may not enlarge,alter or restrict the provisions of the law it administers; it cannot engraftadditional requirements not contemplated by the legislature.67

In case of conflict, the law must prevail.68A "regulation adoptedpursuant to law is law."69Conversely, a regulation or any portionthereof not adopted pursuant to law is no law and has neither theforce nor the effect of law.70

Availment of Tax

Credit Voluntary

Third, the word mayin the text of the statute71implies that theavailability of the tax creditbenefit is neither unrestricted normandatory.72There is no absolute right conferred upon respondent, orany similar taxpayer, to avail itself of the tax creditremedy whenever itchooses; "neither does it impose a duty on the part of the governmentto sit back and allow an important facet of tax collection to be at thesole control and discretion of the taxpayer."73For the tax authorities tocompel respondent to deduct the 20 percent discount from eitherits gross incomeor its gross sales74is, therefore, not only to make animposition without basis in law, but also to blatantly contravene thelaw itself.

What Section 4.a of RA 7432 means is that the tax creditbenefit ismerely permissive, not imperative. Respondent is given two options --either to claim or not to claim the cost of the discounts as a tax credit.

In fact, it may even ignore the credit and simply consider the gestureas an act of beneficence, an expression of its social conscience.
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Granting that there is a tax liability and respondent claims such cost asa tax credit, then the tax creditcan easily be applied. If there is none,the credit cannot be used and will just have to be carried over andrevalidated75accordingly. If, however, the business continues tooperate at a loss and no other taxes are due, thus compelling it toclose shop, the credit can never be applied and will be lostaltogether.

In other words, it is the existence or the lack of a tax liability thatdetermines whether the cost of the discounts can be used as a taxcredit. RA 7432 does not give respondent the unfettered right to availitself of the credit whenever it pleases. Neither does it allow our taxadministrators to expand or contract the legislative mandate. "Theplain meaning rule orverba legisin statutory construction is thusapplicable x x x. Where the words of a statute are clear, plain and freefrom ambiguity, it must be given its literal meaning and appliedwithout attempted interpretation."76

Tax CreditBenefit

Deemed Just Compensation

Fourth, Sections 2.i and 4 of RR 2-94 deny the exercise by the State ofits power of eminent domain. Be it stressed that the privilege enjoyedby senior citizens does not come directlyfrom the State, but ratherfrom the private establishments concerned. Accordingly, the taxcreditbenefit granted to these establishments can be deemed astheirjust compensationfor private property taken by the State forpublic use.77

The concept of public useis no longer confined to the traditional

notion of use by the public, but held synonymous with publicinterest, public benefit, public welfare, and public convenience.78Thediscount privilege to which our senior citizens are entitled is actually a

benefit enjoyed by the general public to which these citizens belong.The discounts given would have entered the coffers and formed partof the gross salesof the private establishments concerned, were it notfor RA 7432. The permanent reduction in their total revenues is a forcedsubsidy corresponding to the taking of private property for public useor benefit.

As a result of the 20 percent discount imposed by RA 7432, respondentbecomes entitled to ajust compensation. This term refers not only tothe issuance of a tax creditcertificate indicating the correct amountof the discounts given, but also to the promptness in its release.Equivalent to the payment of property taken by the State, suchissuance -- when not done within areasonable timefrom the grant ofthe discounts -- cannot be considered asjust compensation. In effect,respondent is made to suffer the consequences of being immediatelydeprived of its revenues while awaiting actual receipt, through thecertificate, of the equivalent amount it needs to cope with thereduction in its revenues.79

Besides, the taxation power can also be used as an implement for theexercise of the power of eminent domain.80Tax measures are but"enforced contributions exacted on pain of penal sanctions"81and"clearly imposed for apublic purpose."82In recent years, the power totax has indeed become a most effective tool to realize social

justice, public welfare, and the equitable distribution of wealth.83

While it is a declared commitment under Section 1 of RA 7432, socialjustice "cannot be invoked to trample on the rights of property ownerswho under our Constitution and laws are also entitled to protection.The social justice consecrated in our [C]onstitution [is] not intended totake away rights from a person and give them to another who is not

entitled thereto."84For this reason, a just compensation for income thatis taken away from respondent becomes necessary. It is in the tax
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creditthat our legislators find support to realize social justice, and noadministrative body can alter that fact.

To put it differently, a private establishment that merely breaks even85-- without the discounts yet -- will surely start to incur losses because ofsuch discounts. The same effect is expected if its mark-up is less than 20percent, and if all its sales come from retail purchases by seniorcitizens. Aside from the observation we have already raised earlier, itwill also be grossly unfair to an establishment if the discounts will betreated merely as deductions from either its gross incomeor its gross

sales. Operating at a loss through no fault of its own, it will realize thatthe tax creditlimitation under RR 2-94 is inutile, if not improper. Worse,profit-generating businesses will be put in a better position if they availthemselves of tax creditsdenied those that are losing, because notaxes are due from the latter.

Grant of Tax Credit

Intended by the Legislature

Fifth, RA 7432 itself seeks to adopt measures whereby senior citizens areassisted by the community as a whole and to establish a programbeneficial to them.86These objectives are consonant with theconstitutional policy of making "health x x x services available to all thepeople at affordable cost"87and of giving "priority for the needs of the

x x x elderly."88Sections 2.i and 4 of RR 2-94, however, contradict theseconstitutional policies and statutory objectives.

Furthermore, Congress has allowed all private establishments asimple tax credit, not a deduction. In fact, no cash outlay is requiredfrom the government for the availmentor useof such credit. The

deliberations on February 5, 1992 of the Bicameral ConferenceCommittee Meeting on Social Justice, which finalized RA 7432, disclosethe true intent of our legislators to treat thesales discountsas a tax

credit, rather than as a deduction from gross income. We quote fromthose deliberations as follows:

"THE CHAIRMAN (Rep. Unico). By the way, before that ano, aboutdeductions from taxable income. I think we incorporated there aprovision na - on the responsibility of the private hospitals anddrugstores, hindi ba?

SEN. ANGARA. Oo.

THE CHAIRMAN. (Rep. Unico), So, I think we have to put in also aprovision here about the deductions from taxable income of thatprivate hospitals, di ba ganon 'yan?

MS. ADVENTO. Kaya lang po sir, and mga discounts po nila affectinggovernment and public institutions, so, puwede na po nating hindiisama yung mga less deductions ng taxable income.

THE CHAIRMAN. (Rep. Unico). Puwede na. Yung about the privatehospitals. Yung isiningit natin?

MS. ADVENTO. Singit na po ba yung 15% on credit. (inaudible/did notuse the microphone).

SEN. ANGARA. Hindi pa, hindi pa.

THE CHAIRMAN. (Rep. Unico) Ah, 'di pa ba naisama natin?

SEN. ANGARA. Oo. You want to insert that?

THE CHAIRMAN (Rep. Unico). Yung ang proposal ni Senator Shahani, e.
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SEN. ANGARA. In the case of private hospitals they got the grant of15% discount, provided that, the private hospitals can claim theexpense as a tax credit.

REP. AQUINO. Yah could be allowed as deductions in theperpetrations of (inaudible) income.

SEN. ANGARA. I-tax credit na lang natin para walang cash-out ano?

REP. AQUINO. Oo, tax credit. Tama, Okay. Hospitals ba o lahat ngestablishments na covered.

THE CHAIRMAN. (Rep. Unico). Sa kuwan lang yon, as private hospitalslang.

REP. AQUINO. Ano ba yung establishments na covered?

SEN. ANGARA. Restaurant lodging houses, recreation centers.

REP. AQUINO. All establishments covered siguro?

SEN. ANGARA. From all establishments. Alisin na natin 'Yung kuwankung ganon. Can we go back to Section 4 ha?

REP. AQUINO. Oho.

SEN. ANGARA. Letter A. To capture that thought, we'll say the grant of20% discount from all establishments et cetera, et cetera, providedthat said establishments - provided that private establishments mayclaim the cost as a tax credit. Ganon ba 'yon?

REP. AQUINO. Yah.

SEN. ANGARA. Dahil kung government, they don't need to claim it.

THE CHAIRMAN. (Rep. Unico). Tax credit.

SEN. ANGARA.As a tax credit [rather] than a kuwan - deduction,Okay.

REP. AQUINO Okay.

SEN. ANGARA. Sige Okay. Di subject to style na lang sa Letter A" .89

Special Law

Over General Law

Sixth and last, RA 7432 is a special law that should prevail over the TaxCode -- a general law. "x x x [T]he rule is that on a specific matter thespecial law shall prevail over the general law, which shallbe resorted to only to supply deficiencies in the former."90In addition,"[w]here there are two statutes, the earlier special and the latergeneral -- the terms of the general broad enough to include thematter provided for in the special -- the fact that one is special andthe other is general creates a presumption that the special is to beconsidered as remaining an exception to the general,91one as ageneral law of the land, the other as the law of a particular case."92"Itis a canon of statutory construction that a laterstatute, general in itstermsand not expressly repealing a prior specialstatute, will ordinarilynot affect the special provisions of such earlier statute."93

RA 7432 is an earlier law not expressly repealed by, and thereforeremains an exception to, the Tax Code -- a later law. When the formerstates that a tax creditmay be claimed, then the requirement of priortax payments under certain provisions of the latter, as discussed

above, cannot be made to apply. Neither can the instances of orreferences to a tax deductionunder the Tax Code94be made to
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restrict RA 7432. No provision of any revenue regulation can supplantor modify the acts of Congress.

WHEREFORE, the Petition is hereby DENIED. The assailed Decision andResolution of the Court of Appeals AFFIRMED. No pronouncement asto costs.

SO ORDERED.

CASE NO. 2

G.R. No. L-26379 December 27, 1969

WILLIAM C. REAGAN, ETC.,petitioner,vs.COMMISSIONER OF INTERNAL REVENUE,respondent.

Quasha, Asperilla, Blanco, Zafra and Tayag for petitioner.

Office of the Solicitor General Antonio P. Barredo, Assistant Solicitor

General Felicisimo R. Rosete, Solicitor Lolita O. Gal-lang and

Special Attorney Gamaliel H. Mantolino for respondent.

FERNANDO,J.:

A question novel in character, the answer to which has far-reachingimplications, is raised by petitioner William C.Reagan, at one time acivilian employee of an American corporation providing technicalassistance to the United States Air Force in the Philippines. He woulddispute the payment of the income tax assessed on him byrespondent Commissioner of Internal Revenue on an amount realizedby him on a sale of his automobile to a member of the United StatesMarine Corps, the transaction having taken place at the Clark Field AirBase at Pampanga. It is his contention, seriously and earnestlyexpressed, that in legal contemplation the sale was made outsidePhilippine territory and therefore beyond our jurisdictional power totax.

Such a plea, far-fetched and implausible, on its face betraying nokinship with reality, he would justify by invoking, mistakenly as willhereafter be more fully shown an observation to that effect in a 1951

opinion, 1petitioner ignoring that such utterance was made purely asa flourish of rhetoric and by way of emphasizing the decisionreached,that the trading firm as purchaser of army goods must respond for


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the sales taxes due from an importer, as the American armedforces being exempt could not be taxed as such under the NationalInternal Revenue Code.2Such an assumption, inspired by thecommendable aim to render unavailing any attempt at taxevasion on the part of such vendee, found expression anew in a 1962decision,3coupled with the reminder however, to render the truthunmistakable, that "the areas covered by the United States MilitaryBases are not foreign territories both in the political and geographicalsense."

As thus clarified, it is manifest that such a view amounts at most toa legal fiction and is moreover obiter. It certainly cannot control theresolution of the specific question that confronts us. We declare ourstand in an unequivocal manner. The sale having taken place on whatindisputably is Philippine territory, petitioner's liability for the incometax due as a result thereof was unavoidable. As the Court of TaxAppeals reached a similar conclusion, we sustain its decision nowbefore us on appeal.

In the decision appealed from, the Court of Tax Appeals, after statingthe nature of the case, started the recital of facts thus: "It appears thatpetitioner, a citizen of the United States and an employee of BendixRadio, Division of Bendix Aviation Corporation, which providestechnical assistance to the United States Air Force, was assigned atClark Air Base, Philippines, on or about July 7, 1959 ... . Nine (9) monthsthereafter and before his tour of duty expired, petitioner imported onApril 22, 1960 a tax-free 1960 Cadillac car with accessories valued at$6,443.83, including freight, insurance and other charges."4Then camethe following: "On July 11, 1960, more than two (2) months after the1960 Cadillac car was imported into the Philippines, petitionerrequested the Base Commander, Clark Air Base, for a permit to sell the

car, which was granted provided that the sale was made to amember of the United States Armed Forces or a citizen of the UnitedStates employed in the U.S. military bases in the Philippines. On the

same date, July 11, 1960, petitioner sold his car for $6,600.00 to acertain Willie Johnson, Jr. (Private first class), United States MarineCorps, Sangley Point, Cavite, Philippines, as shown by a Bill of Sale . . .executed at Clark Air Base. On the same date, Pfc. Willie (William)Johnson, Jr. sold the car to Fred Meneses for P32,000.00 as evidencedby a deed of sale executed in Manila."5

As a result of the transaction thus made, respondent Commissioner ofInternal Revenue, after deducting the landed cost of the car as well asthe personal exemption to which petitioner was entitled, fixed as hisnet taxable income arising from such transaction the amount ofP17,912.34, rendering him liable for income tax in the sum of P2,979.00.After paying the sum, he sought a refund from respondent claimingthat he was exempt, but pending action on his request for refund, hefiled the case with the Court of Tax Appeals seeking recovery of thesum of P2,979.00 plus the legal rate of interest.

As noted in the appealed decision: "The only issue submitted for ourresolution is whether or not the said income tax of P2,979.00 was legally

collected by respondent for petitioner."6After discussing the legalissues raised, primarily the contention that the Clark Air Base "in legalcontemplation, is a base outside the Philippines" the sale thereforehaving taken place on "foreign soil", the Court of Tax Appeals foundnothing objectionable in the assessment and thereafter the paymentof P2,979.00 as income tax and denied the refund on the same.Hence, this appeal predicated on a legal theory we cannot accept.Petitioner cannot make out a case for reversal.

1. Resort to fundamentals is unavoidable to place things in their properperspective, petitioner apparently feeling justified in his refusal to deferto basic postulates of constitutional and international law, induced no

doubt by the weight he would accord to the observation made by thisCourt in the two opinions earlier referred to. To repeat, scant comfort, if


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at all is to be derived from such an obiter dictum, one which is likewisefar from reflecting the fact as it is.

Nothing is better settled than that the Philippines being independentand sovereign, its authority may be exercised over its entire domain.There is no portion thereof that is beyond its power. Within its limits, itsdecrees are supreme, its commands paramount. Its laws governtherein, and everyone to whom it applies must submit to its terms. Thatis the extent of its jurisdiction, both territorial and personal. Necessarily,likewise, it has to be exclusive. If it were not thus, there is a diminutionof its sovereignty.

It is to be admitted that any state may, by its consent, express orimplied, submit to a restriction of its sovereign rights. There may thus bea curtailment of what otherwise is a power plenary in character. That isthe concept of sovereignty as auto-limitation, which, in the succinctlanguage of Jellinek, "is the property of a state-force due to which ithas the exclusive capacity of legal self-determination and self-restriction."7A state then, if it chooses to, may refrain from the exercise

of what otherwise is illimitable competence.

Its laws may as to some persons found within its territory no longercontrol. Nor does the matter end there. It is not precluded fromallowing another power to participate in the exercise of jurisdictionalright over certain portions of its territory. If it does so, it by no meansfollows that such areas become impressed with an alien character.They retain their status as native soil. They are still subject to itsauthority. Its jurisdiction may be diminished, but it does not disappear.So it is with the bases under lease to the American armed forces byvirtue of the military basesagreement of 1947. They are not andcannot be foreign territory.

Decisions coming from petitioner's native land, penned by jurists ofrepute, speak to that effect with impressive unanimity. We start with

the citation from Chief Justice Marshall, announced in the leadingcase of Schooner Exchange v. M'Faddon,8an 1812 decision: "The

jurisdiction of the nation within its own territory is necessarily exclusiveand absolute. It is susceptible of no limitation not imposed by itself. Anyrestriction upon it, deriving validity from an external source, wouldimply a diminution of its sovereignty to the extent of the restriction, andan investment of that sovereignty to the same extent in that power

which could impose such restriction." After which came thisparagraph: "All exceptions, therefore, to the full and complete powerof a nation within its own territories, must be traced up to the consentof the nation itself. They can flow from no other legitimate source."

Chief Justice Taney, in an 1857 decision,9affirmed the fundamentalprinciple of everyone within the territorial domain of a state beingsubject to its commands: "For undoubtedly every person who is foundwithin the limits of a government, whether the temporary purposes oras a resident, is bound by its laws." It is no exaggeration then for JusticeBrewer to stress that the United States government "is one having

jurisdiction over every foot of soil within its territory, and acting directly

upon each [individual found therein]; . . ."10

Not too long ago, there was a reiteration of such a view, this time fromthe pen of Justice Van Devanter. Thus: "It now is settled in the UnitedStates and recognized elsewhere that the territory subject to its

jurisdiction includes the land areas under its dominion and control theports, harbors, bays, and other in closed arms of the sea along itscoast, and a marginal belt of the sea extending from the coast lineoutward a marine league, or 3 geographic miles."11He could citemoreover, in addition to many American decisions, such eminenttreatise-writers as Kent, Moore, Hyde, Wilson, Westlake, Wheaton andOppenheim.

As a matter of fact, the eminent commentator Hyde in his three-volume work on International Law, as interpreted and applied by the


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United States, made clear that not even the embassy premises of aforeign power are to be considered outside the territorial domain ofthe host state. Thus: "The ground occupied by an embassy is not in factthe territory of the foreign State to which the premises belong throughpossession or ownership. The lawfulness or unlawfulness of acts therecommitted is determined by the territorial sovereign. If an attachecommits an offense within the precincts of an embassy, his immunity

from prosecution is not because he has not violated the local law, butrather for the reason that the individual is exempt from prosecution. If aperson not so exempt, or whose immunity is waived, similarly commits acrime therein, the territorial sovereign, if it secures custody of theoffender, may subject him to prosecution, even though its criminalcode normally does not contemplate the punishment of one whocommits an offense outside of the national domain. It is not believed,therefore, that an ambassador himself possesses the right to exercise

jurisdiction, contrary to the will of the State of his sojourn, even withinhis embassy with respect to acts there committed. Nor is thereapparent at the present time any tendency on the part of States toacquiesce in his exercise of it."12

2. In the light of the above, the first and crucial error imputed to theCourt of Tax Appeals to the effect that it should have held that theClark Air Force is foreign soil or territory for purposes of income taxlegislation is clearly without support in law. As thus correctly viewed,petitioner's hope for the reversal of the decision completely fadesaway. There is nothing in the Military Bases Agreement that lendssupport to such an assertion. It has not become foreign soil or territory.This country's jurisdictional rights therein, certainly not excluding thepower to tax, have been preserved. As to certain tax matters, anappropriate exemption was provided for.

Petitioner could not have been unaware that to maintain the contrarywould be to defy reality and would be an affront to the law. While hisfirst assigned error is thus worded, he would seek to impart plausibility

to his claim by the ostensible invocation of the exemption clause in theAgreement by virtue of which a "national of the United States servingin or employed in the Philippines in connection with the construction,maintenance, operation or defense of the bases and residing in thePhilippines only by reason of such employment" is not to be taxed onhis income unless "derived from Philippine source or sources other thanthe United States sources."13The reliance, to repeat, is more apparent

than real for as noted at the outset of this opinion, petitioner placesmore faith not on the language of the provision on exemption but ona sentiment given expression in a 1951 opinion of this Court, whichwould be made to yield such an unwarranted interpretation at warwith the controlling constitutional and international law principles. Atany rate, even if such a contention were more adequately pressedand insisted upon, it is on its face devoid of merit as the source clearlywas Philippine.

In Saura Import and Export Co. v. Meer,14the case above referred to,this Court affirmed a decision rendered about seven monthspreviously,15holding liable as an importer, within the contemplation of

the National Internal Revenue Code provision, the trading firm thatpurchased army goods from a United States government agency inthe Philippines. It is easily understandable why. If it were not thus, taxevasion would have been facilitated. The United States forces thatbrought in such equipment later disposed of as surplus, when nolonger needed for military purposes, was beyond the reach of our taxstatutes.

Justice Tuason, who spoke for the Court, adhered to such a rationale,quoting extensively from the earlier opinion. He could have stoppedthere. He chose not to do so. The transaction having occurred in 1946,not so long after the liberation of the Philippines, he proceeded to

discuss the role of the American military contingent in the Philippines asa belligerent occupant. In the course of such a dissertion, drawing onhis well-known gift for rhetoric and cognizant that he was making an as


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if statement, he did say: "While in army bases or installations within thePhilippines those goods were in contemplation of law on foreign soil."

It is thus evident that the first, and thereafter the controlling, decisionas to the liability for sales taxes as an importer by the purchaser, couldhave been reached without any need for such expression as thatgiven utterance by Justice Tuason. Its value then as an authoritative

doctrine cannot be as much as petitioner would mistakenly attach toit. It was clearly obiternot being necessary for the resolution of theissue before this Court.16It was an opinion "uttered by the way."17Itcould not then be controlling on the question before us now, theliability of the petitioner for income tax which, as announced at theopening of this opinion, is squarely raised for the first time.18

On this point, Chief Justice Marshall could again be listened to withprofit. Thus: "It is a maxim, not to be disregarded, that generalexpressions, in every opinion, are to be taken in connection with thecase in which those expressions are used. If they go beyond the case,they may be respected, but ought not to control the judgment in a

subsequent suit when the very point is presented for decision."19

Nor did the fact that such utterance of Justice Tuason was cited in CoPo v. Collector of Internal Revenue,20a 1962 decision relied upon bypetitioner, put a different complexion on the matter. Again, it was byway of pure embellishment, there being no need to repeat it, to reachthe conclusion that it was the purchaser of army goods, this time frommilitary bases, that must respond for the advance sales taxes asimporter. Again, the purpose that animated the reiteration of such aview was clearly to emphasize that through the employment of such afiction, tax evasion is precluded. What is more, how far divorced fromthe truth was such statement was emphasized by Justice Barrera, who

penned the Co Po opinion, thus: "It is true that the areas covered bythe United States Military Bases are not foreign territories both in thepolitical and geographical sense."21

Justice Tuason moreover made explicit that rather than correspondingwith reality, what was said by him was in the way of a legal fiction.Note his stress on "in contemplation of law." To lend further support to aconclusion already announced, being at that a confirmation of whathad been arrived at in the earlier case, distinguished by its soundappreciation of the issue then before this Court and to preclude anytax evasion, an observation certainly not to be taken literally was thus

given utterance.

This is not to say that it should have been ignored altogetherafterwards. It could be utilized again, as it undoubtedly was, especiallyso for the purpose intended, namely to stigmatize as without support inlaw any attempt on the part of a taxpayer to escape an obligationincumbent upon him. So it was quoted with that end in view in the CoPo case. It certainly does not justify any effort to render futile thecollection of a tax legally due, as here. That was farthest from thethought of Justice Tuason.

What is more, the statement on its face is, to repeat, a legal fiction. This

is not to discount the uses of afictio juris in the science of the law. I twas Cardozo who pointed out its value as a device "to advance theends of justice" although at times it could be "clumsy" and even"offensive".22Certainly, then, while far from objectionable as thusenunciated, this observation of Justice Tuason could be misused ormisconstrued in a clumsy manner to reach an offensive result. Torepeat, properly used, a legal fiction could be relied upon by the law,as Frankfurter noted, in the pursuit of legitimate ends.23Petitioner thenwould be well-advised to take to heart such counsel of care andcircumspection before invoking not a legal fiction that would avoid amockery of the law by avoiding tax evasion but what clearly is amisinterpretation thereof, leading to results that would have shocked

its originator.


17/25

The conclusion is thus irresistible that the crucial error assigned, the onlyone that calls for discussion to the effect that for income tax purposesthe Clark Air Force Base is outside Philippine territory, is utterly withoutmerit. So we have said earlier.

3. To impute then to the statement of Justice Tuason the meaning thatpetitioner would fasten on it is, to paraphrase Frankfurter, to be guilty

of succumbing to the vice of literalness. To so conclude is, whether bydesign or inadvertence, to misread it. It certainly is not susceptible ofthe mischievous consequences now sought to be fastened on it bypetitioner.

That it would be fraught with such peril to the enforcement of our taxstatutes on the military bases under lease to the American armedforces could not have been within the contemplation of JusticeTuason. To so attribute such a bizarre consequence is to be guilty of agrave disservice to the memory of a great jurist. For his real andgenuine sentiment on the matter in consonance with the imperativemandate of controlling constitutional and international law concepts

was categorically set forth by him, not as an obiterbut as the rationaleof the decision, in People v. Acierto24thus: "By the [Military Bases]Agreement, it should be noted, the Philippine Government merelyconsents that the United States exercise jurisdiction in certain cases.The consent was given purely as a matter of comity, courtesy, orexpediency over the bases as part of the Philippine territory ordivested itself completely of jurisdiction over offenses committedtherein."

Nor did he stop there. He did stress further the full extent of ourterritorial jurisdiction in words that do not admit of doubt. Thus: "Thisprovision is not and can not on principle or authority be construed as a

limitation upon the rights of the Philippine Government. If anything, it isan emphatic recognition and reaffirmation of Philippine sovereigntyover the bases and of the truth that all jurisdictional rights granted to

the United States and not exercised by the latter are reserved by thePhilippines for itself."25

It is in the same spirit that we approach the specific questionconfronting us in this litigation. We hold, as announced at the outset,that petitioner was liable for the income tax arising from a sale of hisautomobile in the Clark Field Air Base, which clearly is and cannot

otherwise be other than, within our territorial jurisdiction to tax.

4. With the mist thus lifted from the situation as it truly presents itself,there is nothing that stands in the way of an affirmance of the Court ofTax Appeals decision. No useful purpose would be served bydiscussing the other assigned errors, petitioner himself being fully awarethat if the Clark Air Force Base is to be considered, as it ought to beand as it is, Philippine soil or territory, his claim for exemption from theincome tax due was distinguished only by its futility.

There is further satisfaction in finding ourselves unable to indulgepetitioner in his plea for reversal. We thus manifest fealty to a

pronouncement made time and time again that the law does not lookwith favor on tax exemptions and that he who would seek to be thusprivileged must justify it by words too plain to be mistaken and toocategorical to be misinterpreted.26Petitioner had not done so.Petitioner cannot do so.

WHEREFORE, the decision of the Court of Tax Appeals of May 12, 1966denying the refund of P2,979.00 as the income tax paid by petitioner isaffirmed. With costs against petitioner.


18/25

Republic of the PhilippinesSUPREME COURT

Manila

THIRD DIVISION

G.R. No. 180356 February 16, 2010

SOUTH AFRICAN AIRWAYS,Petitioner,vs.COMMISSIONER OF INTERNAL REVENUE,Respondent.

D E C I S I O N

VELASCO, JR.,J.:

The Case

This Petition for Review on Certiorari under Rule 45 seeks the reversal ofthe July 19, 2007 Decision1and October 30, 2007 Resolution2ofthe Court of Tax Appeals (CTA) En Banc in CTA E.B. Case No. 210,entitled South AfricanAirways v. Commissioner of Internal Revenue. Theassailed decision affirmed the Decision dated May 10, 20063andResolution dated August 11, 20064rendered by the CTA First Division.

The Facts

Petitioner South African Airways is a foreign corporation organized andexisting under and by virtue of the laws of the Republic of South Africa.

Its principal office is located at Airways Park, Jones Road,Johannesburg International Airport, South Africa. In the Philippines, it isan internal air carrier having no landing rights in the country. Petitioner

has a general sales agent in the Philippines, Aerotel LimitedCorporation (Aerotel). Aerotel sells passage documents forcompensation or commission for petitioners off-line flights for thecarriage of passengers and cargo between ports or points outside theterritorial jurisdiction of the Philippines. Petitioner is not registered withthe Securities and Exchange Commission as a corporation, branchoffice, or partnership. It is not licensed to do business in the Philippines.

For the taxable year 2000, petitioner filed separate quarterly andannual income tax returns for its off-line flights, summarized as follows:

Period Date Filed

For Passenger

1st Quarter2nd Quarter3rd Quarter4th Quarter

May 30, 2000August 29, 2000

November 29, 2000April 16, 2000

Ph

Sub-total Ph

For Cargo

1st Quarter2nd Quarter3rd Quarter4th Quarter

May 30, 2000August 29, 2000

November 29, 2000April 16, 2000

Ph

Sub-total Ph

TOTAL

Thereafter, on February 5, 2003, petitioner filed with the Bureauof Internal Revenue, Revenue District Office No. 47, a claim for the

refund of the amount of PhP 1,727,766.38 as erroneously paid tax onGross Philippine Billings (GPB) for the taxable year 2000. Such claim wasunheeded. Thus, on April 14, 2003, petitioner filed a Petition for Review
http://www.lawphil.net/judjuris/juri2010/feb2010/gr_180356_2010.html#fnt1http://www.lawphil.net/judjuris/juri2010/feb2010/gr_180356_2010.html#fnt1http://www.lawphil.net/judjuris/juri2010/feb2010/gr_180356_2010.html#fnt2http://www.lawphil.net/judjuris/juri2010/feb2010/gr_180356_2010.html#fnt2http://www.lawphil.net/judjuris/juri2010/feb2010/gr_180356_2010.html#fnt3http://www.lawphil.net/judju

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