G.R. No. 141973 June 28, 2005PHILIPPINE PHOSPHATE FERTILIZER CORPORATION, petitioner, vs.COMMISSIONER OF INTERNAL REVENUE, respondent.

Once more, we stand by our ruling that:If the State expects its taxpayers to observe fairness and honesty in paying their taxes, so must it apply the same standard against itself in refunding excess payments. When it is undisputed that a taxpayer is entitled to a refund, the State should not invoke technicalities to keep money not belonging to it. No one, not even the State, should enrich oneself at the expense of another.1The antecedents of this case are as follows:Philippine Phosphate Fertilizer Corporation (Philphos) is a domestic corporation registered with the Export Processing Zone Authority (EPZA). It manufactures fertilizers for domestic and international distribution and as such, utilizes fuel, oil and other petroleum products which it procures locally from Petron Philippines Corporation (Petron). Petron initially pays the Bureau of Internal Revenue (BIR) and the Bureau of Customs the taxes and duties imposed upon the petroleum products. Petron is then reimbursed by petitioner when Petron sells such petroleum products to the petitioner. In a letter dated August 28, 1995, petitioner sought a refund of specific taxes paid on the purchases of petroleum products from Petron for the period of September 1993 to December 1994 in the total amount of P602,349.00 which claim is pursuant to the incentives it enjoyed by virtue of its EPZA registration. Since the two-year period within which petitioner could file a case for tax refund before the Court of Tax Appeals (CTA) was about to expire and no action had been taken by the BIR, petitioner instituted a petition for review before the CTA against the Commissioner of Internal Revenue (CIR).2 During the trial, to prove that the duties imposed upon the petroleum products delivered to petitioner by Petron had been duly paid for by petitioner, petitioner presented a Certification from Petron dated August 17, 1995; a schedule of petroleum products sold and delivered to petitioner detailing the volume of sales and the excise taxes paid thereon; photocopies of Authority to Accept Payment for Excise Taxes issued by the CIR pertaining to petroleum products purchased; as well as the testimony of Sylvia Osorio, officer of Petron, to attest to the summary and certification presented.3 The CIR did not present any evidence to controvert the ones presented by petitioner nor did it file an opposition to petitioners formal offer of evidence.4On August 11, 1998, the CTA promulgated its Decision finding that while petitioner is exempt from the payment of excise taxes, it failed to sufficiently prove that it is entitled to refund in this particular case since it did not submit invoices to support the summary of petroleum products sold and delivered to it by Petron.5 The CTA rationalized thus:[P]etitioner, as an EPZA registered enterprise is exempted from the payment of excise taxes, and if said taxes were passed on by the supplier to EPZA registered enterprise like the petitioner, tax credit shall be granted to the latter. The fact that it was not the petitioner who had paid the taxes directly to the Bureau of Internal Revenue does not have an adverse effect on petitioners action for refund. The law granting the exemption makes no distinction as to the circumstances when the law shall apply. Since the law makes no distinction, neither should we. The exemption is so broad as to cover the present situation. Since an export processing zone is not considered to be covered by Philippine customs and internal revenue laws, the taxes paid by the petitioner on the petroleum products should be refunded or credited in its favor. Thus, the only thing left for us to do is to determine whether or not petitioner is entitled to the amount claimed for refund. After a careful scrutiny of the evidence presented, however, there appears to be a dispute with respect to the amount claimed. Petitioner submitted in evidence a certification issued by Petron to prove that the duties imposed upon the petroleum products delivered to petitioner by Petron had been duly paid for by petitioner (Exhibit "A", p. 71, CTA records). Petitioner likewise presented a schedule of petroleum products sold and delivered to petitioner detailing the volume of sales and the excise taxes paid thereon (Exhibits "A-1" to "A-1a", pp. 72-73, CTA records). However, to show that Petron had previously paid the excise taxes on these petroleum products, petitioner presented photocopies of Authority to Accept Payment for Excise Taxes issued by respondent pertaining to petroleum products purchased (Exhibits "A-2" to "A-80), pp. 74-152, CTA records).Although these Authority to Accept Payment for Excise Taxes reflect therein the amount of excise taxes paid by Petron to respondent, this Court cannot verify the exact amount of excise taxes which correspond to the petroleum products delivered to petitioner. This Authority to Accept Payment for Excise Taxes only proves the payment of millions of pesos in excise taxes made by Petron during the period covered by the claim but they fail to show to this Court which part of this huge amount actually represents the excise taxes paid on the petroleum products actually delivered to herein petitioner. Petitioner merely presented a summary of petroleum products sold and delivered by Petron during the period covered by the claim. We cannot, by the summary alone, ascertain the veracity of the amount being claimed neither can it prove the existence of the invoices being referred to therein. Petitioner should have submitted the invoices supporting the schedules of petroleum products sold and delivered to it by Petron. These invoices would reveal whether or not the amount claimed for refund by petitioner is correct.In an action for refund/credits the taxpayer has the burden of showing that the taxes paid are erroneously collected and that failure to meet such a burden is fatal to his cause. Tax refunds partake of the nature of the tax exemptions and therefore cannot be allowed unless granted in the most explicit and categorical language. The grant of refund privileges must be strictly construed against the taxpayer and liberally in favor of the government. (citations omitted)lawphil.netPetitioner has the burden to prove the material allegations in its petition as well as the truth of its claim.6 (Emphasis supplied) disposing of the case as follows:WHEREFORE, in view of the foregoing, the claim of refund of petitioner in the amount of P602,349.00 is hereby DENIED for lack of merit.7On August 31, 1998, petitioner filed a motion for reconsideration alleging that it failed to submit invoices because it thought that the presentation of said invoices was not necessary to prove the claim for refund, since petitioners previous claims, in CTA Case Nos. 4654, 4993 and 4994,8 involving similar facts, were granted by the CTA even without the presentation of invoices. It then prayed that the CTA decision be reconsidered and its claim for refund be allowed, or in the alternative, allow petitioner to present and offer the invoices in evidence to present its claim.9The CTA denied the motion for reconsideration on January 6, 1999, explaining as follows:It is important to note at the outset that Petitioners reliance on CTA Case Nos. 4994, 4654 and 4993 is misplaced because during the hearings of these cases up to the time of formal offer of evidence, CTA Circular No. 1-95 was not yet in effect. The nature and presentation of evidence involving voluminous documents prior to the effectivity of CTA Circular No. 1-95 differ from that which is required by this Court from the effectivity of said Circular beginning January 25, 1995. In the instant case, the Petition for Review was filed on September 1, 1995. It is obviously clear that the provisions of CTA Circular 1-95 already applied to Petitioners presentation of evidence. Quoted hereunder are portions of CTA Circular 1-95:1. The party who desires to introduce as evidence such voluminous documents must present: (a) Summary containing the total amount/s of the tax account or tax paid for the period involved and a chronological or numerical list of the numbers, dates and amounts covered by the invoices or receipts; and (b) a Certification of an independent Certified Public Accountant attesting to the correctness of the contents of the summary after making an examination and evaluation of the voluminous receipts and invoices. Such summary and certification must properly be identified by a competent witness from the accounting firm.2. The method of individual presentation of each and every receipt or invoice or other documents for marking, identification and comparison with the originals thereof need not be done before the Court or the Commissioner anymore after the introduction of the summary and CPA certification. It is enough that the receipts, invoices and other documents covering the said accounts or payments must be pre-marked by the party concerned and submitted to the Court in order to be made accessible to the adverse party whenever she/he desires to check and verify the correctness of the summary and CPA certification. However, the originals of the said receipts, invoices or documents should be ready for verification and comparison in case doubts on the authenticity of the particular documents presented is raised during the hearing of the case.It can be revealed from the evidence presented by the Petitioner that it failed to present a certification of an independent Certified Public Accountant, as well as the invoices supporting the schedules of petroleum products sold and delivered to it by Petron. From this perspective alone, the claim for refund was correctly denied. Now that an unfavorable decision has been rendered by this Court, Petitioner belatedly seeks to present the invoices as additional evidence.The prayer to present additional evidence partakes of the nature of a motion for new trial under Section 1 Rule 37 of the 1997 Rules of Civil Procedure. It has already been emphasized in several cases that failure to present evidence already existing at the time of trial does not warrant the grant of a new trial because said evidence can no longer be considered newly discovered but is more in the nature of forgotten evidence. Neither can such inadvertence on the part of the counsel to present said evidence qualify as excusable negligence.10 (Emphasis supplied)CTA Presiding Judge Ernesto D. Acosta dissented with the view that in the interest of justice, petitioner should be given a chance to prove its case by allowing it to present the invoices of its purchases.11 He reasoned that:A review of the schedule of invoices, Exhibits "A-1" "A-1-a", reveals that there are only about ninety four (94) invoices which does not need the assistance of an independent CPA. It can easily be presented before this Court or before a Clerk of Court for markings and comparison.The reason advanced by the Petitioner was that they thought the presentation by the Manager of Petron Corporation of a duly notarized certification (supporting the schedules of invoices), coupled with testimonies of witness, Mrs. Sylvia Osorio of Petron Corporation, are enough to prove their case. Respondent did not even controvert said exhibits and testimonies.1avvphi1.zw+ It is this Court that raised doubts on the veracity of the claim in view of the absence of the invoices. This ground could easily fall under the phrase "mistake or excusable negligence" as a ground for new trial under Sec. 1(a) of Rule 37 and not under the phrase "newly discovered evidence" as stated in our said resolution. The denial of this motion is too harsh considering that this case is only civil in nature, govern (sic) merely by the rule on preponderance of evidence.12On January 25, 1999, petitioner filed another motion for reconsideration with motion for new trial praying that it be allowed to present an additional witness and to have invoices and receipts pre-marked in accordance with CTA Circular No. 1-95.13 The CTA denied the same for the reason that it found no convincing reason to reverse its earlier decision and the motion for new trial was filed beyond the period prescribed by Sec. 1, Rule 37 of the Rules of Court as well as for appeals as provided under Sec. 4, Rule 43.14Petitioner then went to the Court of Appeals (CA) which issued the herein assailed Resolution dismissing the petition for review, to wit:Considering that the "AFFIDAVIT OF NON-FORUM SHOPPING" was executed by petitioners counsel, when under Adm. Circular No. 04-94, the petitioner should be the one to certify as to the facts and undertakings as required; and since any violation of the circular "shall be a cause for the dismissal" of the petition, the petition for review is hereby DENIED DUE COURSE OUTRIGHT, and is DISMISSED.SO ORDERED.15The motion for reconsideration was likewise denied.16Hence the present petition raising the following issues:1. Whether or not the Court of Tax Appeals should have granted petitioners claim for refund.2. Whether or not the Court of Appeals should have given due course to the Petition for Review.17Anent the first issue, petitioner argues that: the CTA erred in denying its claim for refund for its failure to present invoices and receipts; the evidence it adduced, which the CIR did not controvert nor contest, is sufficient to support petitioners claim for refund or tax credit; as opined by the Presiding Judge of the CTA in his dissenting opinion, the failure of petitioner to present invoices and receipts is a minor infraction of CTA Circular No. 1-95 which should not defeat petitioners right to refund; there is nothing in said circular which will support the contention of the CTA that the petitioner is mandated to present the invoices in the present case; the CTA, in its previous decisions involving the petitioner, one of which was even affirmed by the CA, held that a refund may be granted solely on the basis of certifications issued by Petron;18 if it is the avowed purpose of CTA Circular No. 1-95 to ensure the speedy administration of justice, it should not compel petitioner to present additional voluminous evidence which will require the presentation of a Certified Public Accountant (CPA) for court examination aside from entailing additional costs to petitioner; petitioners counsel was of the honest belief that he was not required to adhere to what is provided in CTA Circular No. 1-95; petitioner should not be burdened by the infraction of its counsel and should be given the fullest opportunity to establish the merits of its action rather than for it to lose property on mere technicalities; it has also been held that evidence not offered and formally presented in evidence during the trial may still be considered by a court in the exercise of its discretion so as not to allow a mere technicality to overcome justice and fairness; petitioner should be granted its claim for refund, or, in the alternative, be given an opportunity to present the pre-marked invoices in accordance with CTA Circular No. 1-95.19As to the second issue, petitioner explains that: its counsel was of the belief that he was authorized to execute the affidavit of non-forum shopping; in any event, its counsel immediately attached to the motion a copy of the affidavit of non-forum shopping executed by petitioners President, Ramon C. Avecilla as soon as he learned of his error; and Supreme Court Administrative Circular No. 04-94 should be liberally construed following Maricalum Mining Corp. vs. NLRC,20 Loyola vs. Court of Appeals,21 and Philippine Fishing Boat Officers and Engineers Union vs. Court of Industrial Relations.22It then prayed that: the resolutions of the CA and the Decision of the CTA be reversed; and an order be issued to award petitioner tax credit certificate/refund in the amount of P602,349.00 representing excise taxes paid for the period of September 1993 to December 1994 or in the alternative to allow petitioner to adduce evidence before the CTA to support its case.23The CIR, in his Comment, contends that: the burden of proving entitlement to the refund/credit rests upon petitioner; the CTA was correct in requiring the submission of the invoices to support the schedules presented especially in this case where the CTA cannot determine which part of the huge amount paid by Petron actually represents the excise taxes paid on the petroleum products actually delivered to petitioner; the schedules are self-serving and if not corroborated by evidence have no evidentiary weight; the CTA is not precluded from requiring other evidence which will once and for all erase doubts to the claim for refund; claims for refund, partaking of the nature of tax exemptions, are construed in strictissimi juris against the taxpayer and liberally in favor of the taxing authority; even setting aside the requirements in CTA Circular No. 1-95, petitioner is still obliged to present the invoices in order to corroborate the entries in the summary and to reveal whether or not the amount claimed for refund by petitioner is correct; petitioners Motion for Reconsideration and Motion for New Trial filed on January 25, 1999 were properly denied by the CTA for having been filed out of time; and the CTAs decision must be respected on appeal since it has developed an expertise on the subject.24Anent the second issue, respondent avers that the CA did not err in dismissing the petition for review on the ground that the affidavit of non-forum shopping was executed by petitioners counsel contrary to the requirements in Sec. 5, Rule 7 of the Rules of Court; and that the denial of the motion for reconsideration was also proper since the failure to comply with the requirements of non-forum shopping shall not be curable by mere amendment to the complaint.25

For clarity, we shall first discuss the issue of whether or not the CA should have given due course to the petition for review.The primary question that has to be resolved is whether an Affidavit of Non-Forum Shopping, erroneously signed by counsel, may be cured by subsequent compliance.Generally, subsequent compliance with the requirement of affidavit of non-forum shopping does not excuse a party from failure to comply in the first instance.26Supreme Court Administrative Circular No. 04-94 of Section 5, Rule 7 of the 1997 Rules of Civil Procedure which requires the pleader to submit a certificate of non-forum shopping to be executed by the plaintiff or principal party is mandatory.27 A certification of the plaintiffs counsel will not suffice for the reason that it is petitioner, and not the counsel, who is in the best position to know whether he actually filed or caused the filing of a petition.28 A certification against forum shopping signed by counsel is a defective certification that is equivalent to non-compliance with the requirement and constitutes a valid cause for the dismissal of the petition.29 Hence, strictly speaking, the CA was correct in dismissing the petition.There are instances, however, when we treated compliance with the rule with relative liberality, especially when there are circumstances or compelling reasons making the strict application of the rule clearly unjustified.30In the case of Far Eastern Shipping Co. vs. Court of Appeals,31 while we said that, strictly, a certification against forum shopping by counsel is a defective certification, the verification, signed by petitioners counsel in said case, is substantial compliance inasmuch as it served the purpose of the Rules of informing the Court of the pendency of another action or proceeding involving the same issues.32 We then explained that procedural rules are instruments in the speedy and efficient administration of justice which should be used to achieve such end and not to derail it.33In Damasco vs. NLRC,34 the certifications against forum shopping were erroneously signed by petitioners lawyers, which, generally, would warrant the outright dismissal of their actions.35 We resolved however that as a matter of social justice, technicality should not be allowed to stand in the way of equitably and completely resolving the rights and obligations of the parties.36 In Cavile vs. Heirs of Clarita Cavile,37 we likewise held that the merits of the substantive aspects of the case may be deemed as "special circumstance" for the Court to take cognizance of a petition although the certification against forum shopping was executed and signed by only one of the petitioners.38 Finally, in Sy Chin vs. Court of Appeals,39 we categorically stated that while a petition may be flawed as the certificate of non-forum shopping was signed only by counsel and not by the party, such procedural lapse may be overlooked in the interest of substantial justice.40Here, the affidavit of non-forum shopping was signed by petitioners counsel. Upon receipt of the resolution of the CA, however, which dismissed its petition for non-compliance with the rules on affidavit of non-forum shopping, petitioner submitted, together with its motion for reconsideration, an affidavit signed by petitioners president in compliance with the said rule.41 We deem this to be sufficient especially in view of the merits of the case, which may be considered as a special circumstance or a compelling reason that would justify tempering the hard consequence of the procedural requirement on non-forum shopping.42Which brings us to the other issue of whether or not the CTA should have granted petitioners claim for refund.The general rule is that claimants of tax refunds bear the burden of proving the factual basis of their claims.43 This is because tax refunds are in the nature of tax exemptions, the statutes of which are construed strictissimi juris against the taxpayer and liberally in favor of the taxing authority.44 Taxes are the lifeblood of the nation, therefore statutes that allow exemptions are construed strictly against the grantee and liberally in favor of the government.45In this case, there is no dispute that petitioner is entitled to exemption from the payment of excise taxes by virtue of its being an EPZA registered enterprise.46 As stated by the CTA, the only thing left to be determined is whether or not petitioner is entitled to the amount claimed for refund.47Petitioners entire claim for refund, however, was denied for petitioners failure to present invoices allegedly in violation of CTA Circular No. 1-95. But nowhere in said Circular is it stated that invoices are required to be presented in claiming refunds. What the Circular states is that:1. The party who desires to introduce as evidence such voluminous documents must present: (a) Summary containing the total amount/s of the tax account or tax paid for the period involved and a chronological or numerical list of the numbers, dates and amounts covered by the invoices or receipts; and (b) a Certification of an independent Certified Public Accountant attesting to the correctness of the contents of the summary after making an examination and evaluation of the voluminous receipts and invoices. Such summary and certification must properly be identified by a competent witness from the accounting firm. (Emphasis supplied)The CTA in denying petitioners motion for reconsideration, also mentioned for the first time that petitioners failure to present "a certification of an independent CPA" is another ground that justified the denial of its claim for refund.Again, we find such reasoning to be erroneous. The certification of an independent CPA is not another mandatory requirement under the Circular which petitioner failed to comply with. It is rather a requirement that must accompany the invoices should one decide to present invoices under the Circular. Since petitioner did not present invoices, on the assumption that such were not necessary in this case, it logically did not present a certification because there was nothing to certify.The CTA also could not deny that in its previous decisions involving petitioners claims for refund, invoices were not deemed necessary to grant such claims. It merely said that in said decisions, CTA Circular No. 1-95 was not yet in effect.48 Since CTA Circular No. 1-95 did not make it mandatory to present invoices, coupled with the previous cases of petitioner where the certifications issued by Petron sufficed, it is understandable that petitioner did not think it necessary to present invoices and the accompanying certifications when it filed the present case for refund before the CTA.Even then, petitioner, in its motion for reconsideration, asked the CTA for an opportunity to present invoices to substantiate its claims. But this was denied by the CTA explaining that its prayer to present additional evidence partakes of the nature of a motion for new trial under Section 1, Rule 37 of the Rules of Court. The CTA held that under such rule, failure to present evidence already existing at the time of trial does not warrant the grant of a new trial because such evidence is not newly discovered but is more in the nature of forgotten evidence which is not excusable.49On this point, we agree with the dissenting opinion of CTA Presiding Judge Ernesto D. Acosta who stated that:The reason advanced by the Petitionerthat they thought the presentation by the Manager of Petron Corporation of a duly notarized certification (supporting the schedules of invoices), coupled with testimonies of witness, Mrs. Sylvia Osorio of Petron Corporation, are enough to prove their case could easily fall under the phrase "mistake or excusable negligence" as a ground for new trial under Sec. 1(a) of Rule 37 and not under the phrase "newly discovered evidence" as stated in our said resolution. The denial of this motion is too harsh considering that this case is only civil in nature, govern (sic) merely by the rule on preponderance of evidence.50Sec. 1, Rule 37 of the Rules of Court provides as follows:SECTION 1. Grounds of and period for filing motion for new trial or reconsideration.--- Within the period for taking an appeal, the aggrieved party may move the trial court to set aside the judgment or final order and grant a new trial for one or more of the following causes materially affecting the substantial rights of said party:(a) Fraud, accident, mistake or excusable negligence which ordinary prudence could not have guarded against and by reason of which such aggrieved party has probably been impaired in his rights; or(b) Newly discovered evidence, which could not, with reasonable diligence, have discovered and produced at the trial, and which if presented would probably alter the result.It is true that petitioner could not move for new trial on the basis of newly discovered evidence because in order to have a new trial on the basis of newly discovered evidence, it must be proved that: (a) the evidence was discovered after the trial; (b) such evidence could not have been discovered and produced at the trial with reasonable diligence; (c) it is material, not merely cumulative, corroborative or impeaching; and (d) it is of such weight that, if admitted, will probably change the judgment.51 This does not mean however, that petitioner is altogether barred from having a new trial. As pointed out by Judge Acosta, the reasons put forth by petitioner could fall under mistake or excusable negligence.The "mistake" that is allowable in Rule 37 is one which ordinary prudence could not have guarded against.52 Negligence to be "excusable" must also be one which ordinary diligence and prudence could not have guarded against and by reason of which the rights of an aggrieved party have probably been impaired.53 The test of excusable negligence is whether a party has acted with ordinary prudence while transacting important business.54In this case, it cannot be said that petitioner did not act with ordinary prudence in claiming its refund with the CTA, in light of its previous cases with the CTA which did not require invoices and the non-mandatory nature of CTA Circular No. 1-95.Respondent also argues that petitioners motion for new trial was filed out of time and should therefore be dismissed in view of Sec. 1, Rule 37 and Sec. 4, Rule 43 of the Rules of Court.Sec. 1, Rule 37 provides that:Section 1. Grounds of and period for filing motion for new trial or reconsideration.--- Within the period for taking an appeal, the aggrieved party may move the trial court to set aside the judgment or final order and grant a new trial and Sec. 4, Rule 43 holds thatSection 4. Period of appeal. --- The appeal shall be taken within fifteen (15) days from notice of the award, judgment, final order or resolution, or from the date of its last publication, if publication is required by law for its effectivity, or of the denial of petitioners motion for new trial or reconsideration duly filed in accordance with the governing law of the court or agency a quo. Only one (1) motion for reconsideration shall be allowed. Upon proper motion and the payment of the full amount of the docket fee before the expiration of the reglementary period, the Court of Appeals may grant an additional period of fifteen (15) days only within which to file the petition for review. No further extension shall be granted except for the most compelling reason and in no case to exceed fifteen (15) days.It is borne by the records however that in its first motion for reconsideration duly filed on time, petitioner had already prayed that it be allowed to present and offer the pieces of evidence deemed lacking by the CTA in its Decision dated August 11, 1998.55 Thus, while it named its pleading as a Motion for New Trial only in its motion dated January 25, 1999, petitioner should not be deemed to have moved for new trial only at such time.We reiterate the fundamental principle that technical rules of procedure are not ends in themselves but are primarily designed to aid in the administration of justice.56 And in cases before tax courts, Rules of Court applies only by analogy or in a suppletory character and whenever practicable and convenient shall be liberally construed in order to promote its objective of securing a just, speedy and inexpensive disposition of every action and proceeding.57 The quest for orderly presentation of issues is not an absolute.58 It should not bar the courts from considering undisputed facts to arrive at a just determination of a controversy.59 This is because, after all, the paramount consideration remains the ascertainment of truth.60 Section 8 of R.A. No. 1125 creating the CTA also expressly provides that it shall not be governed strictly by technical rules of evidence.61Since it is not disputed that petitioner is entitled to tax exemption, it should not be precluded from presenting evidence to substantiate the amount of refund it is claiming on mere technicality especially in this case, where the failure to present invoices at the first instance was adequately explained by petitioner.As we pronounced in BPI-Family Savings Bank, Inc. vs. Court of Appeals:62Technicalities and legalisms, however exalted, should not be misused by the government to keep money not belonging to it and thereby enrich itself at the expense of its law-abiding citizens. If the State expects its taxpayers to observe fairness and honesty in paying their taxes, so must it apply the same standard against itself in refunding excess payments of such taxes. Indeed, the State must lead by its own example of honor, dignity and uprightness.63

WHEREFORE, the petition is GRANTED. The assailed resolution is SET ASIDE and the case REMANDED to the Court of Tax Appeals for the reception of evidence, particularly invoices supporting the schedules of petroleum products sold and delivered to petitioner by Petron and the corresponding certification of an independent Certified Public Accountant, for the proper and immediate determination of the amount to be refunded to petitioner.SO ORDERED.

G.R. No. 86625 December 22, 1989DEVELOPMENT BANK OF THE PHILIPPINES, petitioner,vs.THE COURT OF APPEALS and THE COMMISSIONER OF CUSTOMS, respondents.

The Chief Legal Counsel for petitioner.The Development Bank of the Philippines imported IBM computer equipment from the United States, and in connection therewith paid to the Bureau of Customs duties, compensating taxes and import processing fees in the aggregate sum of P 5,562,926.00. It thereafter asked for a refund of the amount paid, invoking Section 4(c) of Executive Order No. 1087 (eff., Jan. 20,1986). The Customs Commissioner refused to grant the refund, maintaining that the customs duties, taxes and fees had been correctly imposed and collected. 1The DBP appealed to the Court of Tax Appeals, which on July 31, 1987 adjudicated the controversy in its favor, ordering the Commissioner of Customs "to refund to ... (it [the DBP]) the amount of P 5,562,926.00 it paid to the Bureau of Customs ... (which) shall be applied and credited to the payment of the subscribed capital stock of the Government in the Bank." 2The Commissioner in turn came up to this Court on an appeal by certiorari, his appeal being docketed as G.R. No. 79635. By Resolution of the Court en banc dated September 15, 1987, however, the appeal was referred to the Court of Appeals for the reason that "(s)uch cases emanating from the Court of Tax Appeals now fall within the exclusive appellate jurisdiction of the Court of Appeals under Section 9 of Batas Pambansa Blg. 129."In the Court of Appeals the case was docketed as CA-G.R. SP No. 12887. And in due course, the Ninth Division of the Court of Appeals rendered judgment under date of October 3, 1988, 3 annulling and setting aside that of the Court of Tax Appeals. The Court of Appeals sustained the position of the Customs Commissioner that it was grave error for the Court of Tax Appeals to have taken cognizance of the case in view of the explicit provisions of Presidential Decree No. 242, 4 pertinently providing that:SECTION 1. Provisions of law to the contrary notwithstanding, all disputes, claims and controversies solely between or among the departments, bureaus, offices, agencies and instrumentalities of the National Government, including government-owned or controlled corporations but excluding constitutional offices or agencies, arising from the interpretation and application of statutes, contracts or agreements, shall henceforth be administratively settled or adjudicated as provided hereinafter: Provided, That this shall not apply to cases already pending in court at the time of the effectivity of this decree.The Appellate Tribunal thus held that the controversy between the DBP and the Commissioner of Customs was not within the jurisdiction of the CTA and should have been decided in accordance with the mode of settlement and adjudication set forth in Sections 2 and 3 of P.D. No. 242, viz:SEC. 2. In all cases involving only questions of law, the same shall be submitted to and settled or adjudicated by the Secretary of Justice, as Attorney General and ex officio legal adviser of all government-owned or controlled corporations and entities, in consonance with section 83 of the Revised Administrative Code. His ruling or determination of the question in each case shall be conclusive and binding upon all the parties concerned.SEC. 3. Cases involving mixed questions of law and of fact or only factual issues shall be submitted to and settled or adjudicated by:(a) The Solicitor General, with respect to disputes or claims or controversies between or among the departments, bureaus, offices and other agencies of the National Government;(b) The Government Corporate Counsel, with respect to disputes or claims or controversies between or among the government-owned or controlled corporations or entities being served by the Office of the Government Corporate Counsel; and(c) The Secretary of Justice, with respect to all other disputes or claims or controversies which do not fall under the categories mentioned in paragraphs (a) and (b).The Appellate Court ruled that Section 7 (2) of Republic Act No. 1125-pursuant to which the Court of Tax Appeals had therefore been exercising exclusive appellate jurisdiction over decisions of the Commissioner of Customs in cases involving liability for customs duties, fees or other money charges, inter alia- had been superseded by said P.D. No. 242, it being "a settled rule of statutory construction that where there is irreconcilable repugnancy between two statutes anent the same subject matter-as there is between P.D. No. 242 and Sec. 7 (2) of R.A. No. 1125 in regard to the manner of settlement of disputes involving customs duties, etc. between government offices, agencies and corporations-the one of late enactment, being the latest expression of the legislative will, should prevail over the other which is of earlier enactment." 5Its motion for reconsideration having been denied on January 10, 1989, 6 the DBP has filed a petition for review on certiorari with this Court, praying for reversal of the decision of the Court of Appeals on the ground that:1) said Court had no jurisdiction to review decisions of the Court of Tax Appeals, this pertaining exclusively to the Supreme Court; and2) said Court had erred in applying P.D. No. 242 in resolution of the controversy. 7The petition is without merit.The Court reaffirms its earlier resolution that it is the Court of Appeals which is now vested with exclusive appellate jurisdiction over the Court of Tax Appeals and other quasi-judicial agencies, instrumentalities, boards, or commissions.It is true that originally, appeals from the Court of Tax Appeals could be taken only to the Supreme Court. This was so stated in Section 18 8 and Section 19 9 of Republic Act No. 1125 (eff., June 16, 1954). There were then, as explained by this Court. 10... two ways of elevating ... (the)case to the Supreme Court, i.e., first, by filing in the Court a quo a notice of appeal and with this Court a petition for review x x (Sec. 18, Rep. Act 1125), and second, by causing such ruling, order or decision of the Court of Tax Appeals likewise reviewed by us upon a writ of certiorari in proper cases. Premised on these provisions, it may be alleged that when a case is taken up to this Court by petition for review, We could go over the evidence on record and pass upon the questions of fact; but that in cases of review upon petition for a writ of certiorari, this Court could only pass upon issues involving questions of law. In answer to these possible argument We may say that when the interest of justice so demands, We may interchangeably consider petitions for review as petitions for a writ of certiorari and vice-versa, and if We have the power to consider the evidence to determine the facts in cases of review, We find no plausible reason for depriving this Court of such power in petitions for certiorari specially if We consider that in the latter cases the petitioner oftenly charges the respondent court with the commission of grave abuse of discretion the determination of which usually depends on the facts and circumstances of the points in controversy. ...It is noteworthy that Republic Act No. 5440 (eff., September 9, 1968) amended Section 17 of Republic Act No. 296, otherwise known as the Judiciary Act of 1948, by explicitly including the Court of Tax Appeals- together with the Commission on Elections and such quasi-judicial agencies as the Court of Industrial Relations, the Public Service Commission and the Workmen's Compensation Commission-as among the entities whose final judgments and decrees were subject to review by the Supreme Court "on certiorari as the law or rules of court may provide."These provisions no longer control, in view of the comprehensive provisions of Batas Pambansa Bilang 129 granting to the Intermediate Appellate Court (now the Court of Appeals) "(e)xclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders or awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or commissions, except those falling within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the provisions of this Act, and of subparagraph (1) of the third paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of 1948." The fact that, as the DBP argues, the Court of Tax Appeals is not among the agencies reorganized by said Batas Pambansa Bilang 129, 11 is of no moment. What is essential, and indisputable, is that the law did not, as the DBP imagines, deal only with "Changes in the rules on procedures;" and that not only was the Court of Appeals reorganized, but its jurisdiction and powers were also broadened by Section 9 of the Batas. Its original jurisdiction to issue writs of mandamus, prohibition, certiorari and habeas corpus, which theretofore could be exercised only in aid of its appellate jurisdiction, was expanded by (1) extending it so as to include the writ of quo warranto, and also (2) empowering it to issue all said extraordinary writs "whether or not in aid of its appellate jurisdiction. " Its appellate jurisdiction was also extended to cover not only final judgments of Regional Trial Courts, but also "all final judgments, decisions, resolutions, orders or awards of ... quasi-judicial agencies, istrumentalities, boards or commmissions, except those falling within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the provisions of this Act, and of sub-paragraph (1) of the third paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of 1948," it being noteworthy in this connection that the text of the law is broad and comprehensive, and the explicitly stated exceptions have no reference whatever to the Court of Tax Appeals. Indeed, the intention to expand the original and appellate jurisdiction of the Court of Appeals over quasi-judicial agencies, instrumentalities, boards, or commissions, is further stressed by the last paragraph of Section 9 which excludes from its provisions, only the "decisions and interlocutory orders issued under the Labor Code of the Philippines and by the Central Board of Assessment Appeals."Since final judgments or decrees of the Court of Tax Appeals are now within the exclusive appellate jurisdiction of the Court of Appeals, and since appeals by certiorari may properly be taken only to this Court, it follows that the mode of appeal from the Court of Tax Appeals to the Court of Appeals should be by notice of appeal cum petition for review, consistently with mode of appeal from other quasi-judicial bodies and agencies prescribed by Republic Act No. 5434 (eff., September 9,1968), 12 and that formerly provided for by Republic Act No. 1125, supra. It is on this basis that the interim or transitional rules adopted in this Court's en banc Resolution of January 11, 1983 on the subject prescribe that "x x appeals to the Intermediate Appellate Court from quasi-judicial bodies shall continue to be governed by the provisions of Republic Act No. 5434 insofar as the same is not inconsistent with the provisions of B.P. Blg. 129. " 13The Court also rejects the DBP's second argument and expresses with the conclusion of the Court of Appeals- and the basic premises thereof that there is an "irreconcilable repugnancy ... between Section 7(2) of R.A. No. 1125 and P.D. No. 242," and hence, that the later enactment (P.D. No. 242), being the latest expression of the legislative will, should prevail over the earlier.IN VIEW OF THE FOREGOING, the Court Resolved to DENY the petition for lack of merit, and AFFIRM the challenged Decision of the Court of Appeals.IT SO ORDERED.Fernan, C.J., Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin, Sarmiento, Cortes, Grio-Aquino, Medialdea and Regalado, JJ., concur.Footnotes1 Rollo, p. 8.2 Id., p. 9.3 Id., pp. 21-25. The opinion was written for the Division by Lombos-de la Fuente, J., and concurred in by Martinez and Pe, JJ.4 Entitled "(An Act) Prescribing the Procedure for Administrative Settlement or Adjudication of Disputes, Claims and Controversies Between or Among Government Offices, Agencies and Instrumentalities, including Government-Owned or Controlled Corporations, and for Other Purposes." The avowed purpose of the decree was "to avoid litigations in court where government lawyers appear for x x (government offices, agencies and instrumentalities) to espouse and protect their respective interests although, in the ultimate analysis, there is but one real party in interest-the Government itself-in such litigations and to avoid, too, "needlessly contributing to the clogged dockets of the courts x x (and) dissipating or wasting the time and energies not onlythat of the courts but also of the government lawyers and the considerable expenses incurred in the filing and prosecution of judicial actions."5 Rollo, p. 24.6 Id., p. 28.7 Id. p. 10.8 Providing in part as follows: "Any party adversely affected by any ruling, order or decision of the Court of Tax Appeals may appeal therefrom to the Supreme Court by filing with the said Court a notice of appeal and with the Supreme Court a petition for review, within thirty days from the date he receives notice of said ruling, order or decision. ...9 xx Any ruling, order or decision of the Court of Tax Appeals may likewise be reviewed by the Supreme Court upon a writ of certiorari in proper cases. Proceedings in the Supreme Court upon a writ of certiorari or a petition for review, as the case may be shall, be in accordance with the provisions of the Rules of Court or such rules as the Supreme Court may prescribe.10 Collector of Internal Revenue v. Aznar, et al., 102 Phil. 979,985-986 (Jan. 31, 1958).11 The courts reorganized were the Intermediate Appellate Court (now the Court of Appeals, of course), the Courts of First Instance (now the Regional Trial Courts), and the City, Municipal and Municipal Circuit Courts (now the Metropolitan Trial Courts, the Municipal Courts and the Municipal Circuit Trial Courts), said courts, together with the Supreme Court forming what is known as the "Integrated Judicial System" in this jurisdiction as distinguished from other courts and quasi-judicial agencies.12 The Act deals with appeals from the Court of Agrarian Relations; the Secretary of Labor under Section 7 of RA 602; the Department of Labor under Sec. 23, RA 875; the Land Registration Commission, the Securities and Exchange Commission, the Civil Aeronautics Board, the Patent Office, the Agricultural Inventions Board.13 Par. 22(c).

G.R. No. 73705 August 27, 1987

VICTORIAS MILLING CO., INC., petitioner,vs.OFFICE OF THE PRESIDENTIAL ASSISTANT FOR LEGAL AFFAIRS and PHILIPPINE PORTS AUTHORITY, respondents.

This is a petition for review on certiorari of the July 27, 1984 Decision of the Office of the Presidential Assistant For Legal Affairs dismissing the appeal from the adverse ruling of the Philippine Ports Authority on the sole ground that the same was filed beyond the reglementary period.

On April 28, 1981, the Iloilo Port Manager of respondent Philippine Ports Authority (PPA for short) wrote petitioner Victorias Milling Co., requiring it to have its tugboats and barges undergo harbor formalities and pay entrance/clearance fees as well as berthing fees effective May 1, 1981. PPA, likewise, requiring petitioner to secure a permit for cargo handling operations at its Da-an Banua wharf and remit 10% of its gross income for said operations as the government's share.

To these demands, petitioner sent two (2) letters, both dated June 2, 1981, wherein it maintained that it is exempt from paying PPA any fee or charge because: (1) the wharf and an its facilities were built and installed in its land; (2) repair and maintenance thereof were and solely paid by it; (3) even the dredging and maintenance of the Malijao River Channel from Guimaras Strait up to said private wharf are being done by petitioner's equipment and personnel; and (4) at no time has the government ever spent a single centavo for such activities. Petitioner further added that the wharf was being used mainly to handle sugar purchased from district planters pursuant to existing milling agreements.

In reply, on November 3, 1981, PPA Iloilo sent petitioner a memorandum of PPA's Executive Officer, Maximo Dumlao, which justified the PPA's demands. Further request for reconsideration was denied on January 14, 1982.

On March 29, 1982, petitioner served notice to PPA that it is appealing the case to the Court of Tax Appeals; and accordingly, on March 31, 1982, petitioner filed a Petition for Review with the said Court, entitled "Victorias Milling Co., Inc. v. Philippine Ports Authority," and docketed therein as CTA Case No. 3466.

On January 10, 1984, the Court of Tax Appeals dismissed petitioner's action on the ground that it has no jurisdiction. It recommended that the appeal be addressed to the Office of the President.

On January 23, 1984, petitioner filed a Petition for Review with this Court, docketed as G.R. No. 66381, but the same was denied in a Resolution dated February 29, 1984.

On April 2, 1984, petitioner filed an appeal with the Office of the President, but in a Decision dated July 27, 1984 (Record, p. 22), the same was denied on the sole ground that it was filed beyond the reglementary period. A motion for Reconsideration was filed, but in an Order dated December 16, 1985, the same was denied (ibid., pp. 3-21): Hence, the instant petition.

The Second Division of this Court, in a Resolution dated June 2, 1986, resolved to require the respondents to comment (ibid., p. 45); and in compliance therewith, the Solicitor General filed his Comment on June 4, 1986 (Ibid., pp. 50-59).

In a Resolution of July 2, 1986, petitioner was required to file a reply (Ibid., p. 61) but before receipt of said resolution, the latter filed a motion on July 1, 1986 praying that it be granted leave to file a reply to respondents' Comment, and an extension of time up to June 30, 1986 within which to file the same. (Ibid., p. 62).

On July 18, 1986, petitioner filed its reply to respondents' Comment (Ibid., pp. 68-76).

The Second Division of this Court, in a Resolution dated August 25, 1986, resolved to give due course to the petition and to require the parties to file their respective simultaneous memoranda (Ibid., p. 78).

On October 8, 1986, the Solicitor General filed a Manifestation and Rejoinder, stating, among others, that respondents are adopting in toto their Comment of June 3, 1986 as their memorandum; with the clarification that the assailed PPA Administrative Order No. 13-77 was duly published in full in the nationwide circulated newspaper, "The Times Journal", on November 9,1977 (ibid., pp. 79-81).

The sole legal issue raised by the petitioner is

WHETHER OR NOT THE 30-DAY PERIOD FOR APPEAL UNIDER SECTION 131 OF PPA ADMINISTRATIVE ORDER NO. 13-77 WAS TOLLED BY THE PENDENCY OF THE PETITIONS FILED FIRST WITH THE COURT OF TAX APPEALS, AND THEN WITH THIS HONORABLE TRIBUNAL.

The instant petition is devoid of merit.

Petitioner, in holding that the recourse first to the Court of Tax Appeals and then to this Court tolled the period to appeal, submits that it was guided, in good faith, by considerations which lead to the assumption that procedural rules of appeal then enforced still hold true. It contends that when Republic Act No. 1125 (creating the Court of Tax Appeals) was passed in 1955, PPA was not yet in existence; and under the said law, the Court of Tax Appeals had exclusive appellate jurisdiction over appeals from decisions of the Commissioner of Customs regarding, among others, customs duties, fees and other money charges imposed by the Bureau under the Tariff and Customs Code. On the other hand, neither in Presidential Decree No. 505, creating the PPA on July 11, 1974 nor in Presidential Decree No. 857, revising its charter (said decrees, among others, merely transferred to the PPA the powers of the Bureau of Customs to impose and collect customs duties, fees and other money charges concerning the use of ports and facilities thereat) is there any provision governing appeals from decisions of the PPA on such matters, so that it is but reasonable to seek recourse with the Court of Tax Appeals. Petitioner, likewise, contends that an analysis of Presidential Decree No. 857, shows that the PPA is vested merely with corporate powers and duties (Sec. 6), which do not and can not include the power to legislate on procedural matters, much less to effectively take away from the Court of Tax Appeals the latter's appellate jurisdiction.

These contentions are untenable for while it is true that neither Presidential Decree No. 505 nor Presidential Decree No. 857 provides for the remedy of appeal to the Office of the President, nevertheless, Presidential Decree No. 857 empowers the PPA to promulgate such rules as would aid it in accomplishing its purpose. Section 6 of the said Decree provides

Sec. 6. Corporate Powers and Duties

a. The corporate duties of the Authority shall be:

xxx xxx xxx

(III) To prescribe rules and regulations, procedures, and guidelines governing the establishment, construction, maintenance, and operation of all other ports, including private ports in the country.

xxx xxx xxx

Pursuant to the aforequoted provision, PPA enacted Administrative Order No. 13-77 precisely to govern, among others, appeals from PPA decisions. It is now finally settled that administrative rules and regulations issued in accordance with law, like PPA Administrative Order No. 13-77, have the force and effect of law (Valerio vs. Secretary of Agriculture and Natural Resources, 7 SCRA 719; Antique Sawmills, Inc. vs. Zayco, et al., 17 SCRA 316; and Macailing vs. Andrada, 31 SCRA 126), and are binding on all persons dealing with that body.

As to petitioner's contention that Administrative Order No. 13-77, specifically its Section 131, only provides for appeal when the decision is adverse to the government, worth mentioning is the observation of the Solicitor General that petitioner misleads the Court. Said Section 131 provides

Sec. 131. Supervisory Authority of General Manager and PPA Board. If in any case involving assessment of port charges, the Port Manager/OIC renders a decision adverse to the government, such decision shall automatically be elevated to, and reviewed by, the General Manager of the authority; and if the Port Manager's decision would be affirmed by the General Manager, such decision shall be subject to further affirmation by the PPA Board before it shall become effective; Provided, however, that if within thirty (30) days from receipt of the record of the case by the General Manager, no decision is rendered, the decision under review shall become final and executory; Provided further, that any party aggrieved by the decision of the General Manager as affirmed by the PPA Board may appeal said decision to the Office of the President within thirty (30) days from receipt of a copy thereof. (Emphasis supplied).

From a cursory reading of the aforequoted provision, it is evident that the above contention has no basis.

As to petitioner's allegation that to its recollection there had been no prior publication of said PPA Administrative Order No. 13-77, the Solicitor General correctly pointed out that said Administrative Order was duly published in full in the nationwide newspaper, "The Times Journal", on November 9,1977.

Moreover, it must be stated that as correctly observed by the Solicitor General, the facts of this case show that petitioner's failure to appeal to the Office of the President on time stems entirely from its own negligence and not from a purported ignorance of the proper procedural steps to take. Petitioner had been aware of the rules governing PPA procedures. In fact, as embodied in the December 16, 1985 Order of the Office of the President, petitioner even assailed the PPA's rule making powers at the hearing before the Court of Tax Appeals.

It is axiomatic that the right to appeal is merely a statutory privilege and may be exercised only in the manner and in accordance with the provision of law (United CMC Textile Workers Union vs. Clave, 137 SCRA 346, citing the cases of Bello vs. Fernando, 4 SCRA 138; Aguila vs. Navarro, 55 Phil. 898; and Santiago vs. Valenzuela, 78 Phil. 397).

Furthermore, even if petitioner's appeal were to be given due course, the result would still be the same as it does not present a substantially meritorious case against the PPA.

Petitioner maintains and submits that there is no basis for the PPA to assess and impose the dues and charges it is collecting since the wharf is private, constructed and maintained at no expense to the government, and that it exists primarily so that its tugboats and barges may ferry the sugarcane of its Panay planters.

As correctly stated by the Solicitor General, the fees and charges PPA collects are not for the use of the wharf that petitioner owns but for the privilege of navigating in public waters, of entering and leaving public harbors and berthing on public streams or waters. (Rollo, pp. 056-057).

In Compaia General de Tabacos de Filipinas vs. Actg. Commissioner of Customs (23 SCRA 600), this Court laid down the rule that berthing charges against a vessel are collectible regardless of the fact that mooring or berthing is made from a private pier or wharf. This is because the government maintains bodies of water in navigable condition and it is to support its operations in this regard that dues and charges are imposed for the use of piers and wharves regardless of their ownership.

As to the requirement to remit 10% of the handling charges, Section 6B-(ix) of the Presidential Decree No. 857 authorized the PPA "To levy dues, rates, or charges for the use of the premises, works, appliances, facilities, or for services provided by or belonging to the Authority, or any organization concerned with port operations." This 10% government share of earnings of arrastre and stevedoring operators is in the nature of contractual compensation to which a person desiring to operate arrastre service must agree as a condition to the grant of the permit to operate.

PREMISES CONSIDERED, the instant petition is hereby DISMISSED.

SO ORDERED.

G.R. No. L-36181 October 23, 1982MERALCO SECURITIES CORPORATION (now FIRST PHILIPPINE HOLDINGS CORPORATION), petitioner,vs.HON. VICTORINO SAVELLANO and ASUNCION BARON VDA. DE MANIAGO, et al., as heirs of the late Juan G. Maniago, respondents.

G.R. No. L-36748 October 23, 1982COMMISSIONER OF INTERNAL REVENUE, petitioner,vs.HON. VICTORINO SAVELLANO and ASUNCION BARON VDA. DE MANIAGO, et al., as heirs of the late Juan G. Maniago, respondents.

G.R. No. L-36181San Juan, Africa, Gonzales & San Agustin for petitioner.Ramon A. Gonzales for respondents.

These are original actions for certiorari to set aside and annul the writ of mandamus issued by Judge Victorino A. Savellano of the Court of First Instance of Manila in Civil Case No. 80830 ordering petitioner Meralco Securities Corporation (now First Philippine Holdings Corporation) to pay, and petitioner Commissioner of Internal Revenue to collect from the former, the amount of P51,840,612.00, by way of alleged deficiency corporate income tax, plus interests and surcharges due thereon and to pay private respondents 25% of the total amount collectible as informer's reward.

On May 22, 1967, the late Juan G. Maniago (substituted in these proceedings by his wife and children) submitted to petitioner Commissioner of Internal Revenue confidential denunciation against the Meralco Securities Corporation for tax evasion for having paid income tax only on 25 % of the dividends it received from the Manila Electric Co. for the years 1962-1966, thereby allegedly shortchanging the government of income tax due from 75% of the said dividends.

Petitioner Commissioner of Internal Revenue caused the investigation of the denunciation after which he found and held that no deficiency corporate income tax was due from the Meralco Securities Corporation on the dividends it received from the Manila Electric Co., since under the law then prevailing (section 24[a] of the National Internal Revenue Code) "in the case of dividends received by a domestic or foreign resident corporation liable to (corporate income) tax under this Chapter . . . .only twenty-five per centum thereof shall be returnable for the purposes of the tax imposed under this section." The Commissioner accordingly rejected Maniago's contention that the Meralco from whom the dividends were received is "not a domestic corporation liable to tax under this Chapter." In a letter dated April 5, 1968, the Commissioner informed Maniago of his findings and ruling and therefore denied Maniago's claim for informer's reward on a non-existent deficiency. This action of the Commissioner was sustained by the Secretary of Finance in a 4th Indorsement dated May 11, 1971.

On August 28, 1970, Maniago filed a petition for mandamus, and subsequently an amended petition for mandamus, in the Court of First Instance of Manila, docketed therein as Civil Case No. 80830, against the Commissioner of Internal Revenue and the Meralco Securities Corporation to compel the Commissioner to impose the alleged deficiency tax assessment on the Meralco Securities Corporation and to award to him the corresponding informer's reward under the provisions of R.A. 2338.

On October 28, 1978, the Commissioner filed a motion to dismiss, arguing that since in matters of issuance and non-issuance of assessments, he is clothed under the National Internal Revenue Code and existing rules and regulations with discretionary power in evaluating the facts of a case and since mandamus win not lie to compel the performance of a discretionary power, he cannot be compelled to impose the alleged tax deficiency assessment against the Meralco Securities Corporation. He further argued that mandamus may not lie against him for that would be tantamount to a usurpation of executive powers, since the Office of the Commissioner of Internal Revenue is undeniably under the control of the executive department.

On the other hand, the Meralco Securities Corporation filed its answer, dated January 15, 1971, interposing as special and/or affirmative defenses that the petition states no cause of action, that the action is premature, that mandamus win not lie to compel the Commissioner of Internal Revenue to make an assessment and/or effect the collection of taxes upon a taxpayer, that since no taxes have actually been recovered and/or collected, Maniago has no right to recover the reward prayed for, that the action of petitioner had already prescribed and that respondent court has no jurisdiction over the subject matter as set forth in the petition, the same being cognizable only by the Court of Tax Appeals.

On January 10, 1973, the respondent judge rendered a decision granting the writ prayed for and ordering the Commissioner of Internal Revenue to assess and collect from the Meralco Securities Corporation the sum of P51,840,612.00 as deficiency corporate income tax for the period 1962 to 1969 plus interests and surcharges due thereon and to pay 25% thereof to Maniago as informer's reward.

All parties filed motions for reconsideration of the decision but the same were denied by respondent judge in his order dated April 6, 1973, with respondent judge denying respondents' claim for attorneys fees and for execution of the decision pending appeal.

Hence, the Commissioner filed a separate petition with this Court, docketed as G.R. No. L-36748 praying that the decision of respondent judge dated January 10, 1973 and his order dated April 6, 1973 be reconsidered for respondent judge has no jurisdiction over the subject matter of the case and that the issuance or non-issuance of a deficiency assessment is a prerogative of the Commissioner of Internal Revenue not reviewable by mandamus.

The Meralco Securities Corporation (now First Philippine Holdings Corporation) likewise appealed the same decision of respondent judge in G.R. No. L-36181 and in the Court's resolution dated June 13, 1973, the two cases were ordered consolidated.

We grant the petitions.

Respondent judge has no jurisdiction to take cognizance of the case because the subject matter thereof clearly falls within the scope of cases now exclusively within the jurisdiction of the Court of Tax Appeals. Section 7 of Republic Act No. 1125, enacted June 16, 1954, granted to the Court of Tax Appeals exclusive appellate jurisdiction to review by appeal, among others, decisions of the Commissioner of Internal Revenue in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties imposed in relation thereto, or other matters arising under the National Internal Revenue Code or other law or part of law administered by the Bureau of Internal Revenue. The law transferred to the Court of Tax Appeals jurisdiction over all cases involving said assessments previously cognizable by courts of first instance, and even those already pending in said courts. 1 The question of whether or not to impose a deficiency tax assessment on Meralco Securities Corporation undoubtedly comes within the purview of the words "disputed assessments" or of "other matters arising under the National Internal Revenue Code . . . .In the case of Blaquera vs. Rodriguez, et al, 2 this Court ruled that "the determination of the correctness or incorrectness of a tax assessment to which the taxpayer is not agreeable, falls within the jurisdiction of the Court of Tax Appeals and not of the Court of First Instance, for under the provisions of Section 7 of Republic Act No. 1125, the Court of Tax Appeals has exclusive appellate jurisdiction to review, on appeal, any decision of the Collector of Internal Revenue in cases involving disputed assessments and other matters arising under the National Internal Revenue Code or other law or part of law administered by the Bureau of Internal Revenue."

Thus, even assuming arguendo that the right granted the taxpayers affected to question and appeal disputed assessments, under section 7 of Republic Act No. 1125, may be availed of by strangers or informers like the late Maniago, the most that he could have done was to appeal to the Court of Tax Appeals the ruling of petitioner Commissioner of Internal Revenue within thirty (30) days from receipt thereof pursuant to section 11 of Republic Act No. 1125. 3 He failed to take such an appeal to the tax court. The ruling is clearly final and no longer subject to review by the courts. 4

It is furthermore a well-recognized rule that mandamus only lies to enforce the performance of a ministerial act or duty 5 and not to control the performance of a discretionary power. 6 Purely administrative and discretionary functions may not be interfered with by the courts. 7 Discretion, as thus intended, means the power or right conferred upon the office by law of acting officially under certain circumstances according to the dictates of his own judgment and conscience and not controlled by the judgment or conscience of others. 8 mandamus may not be resorted to so as to interfere with the manner in which the discretion shall be exercised or to influence or coerce a particular determination. 9

In an analogous case, where a petitioner sought to compel the Rehabilitation Finance Corporation to accept payment of the balance of his indebtedness with his backpay certificates, the Court ruled that "mandamus does not compel the Rehabilitation Finance Corporation to accept backpay certificates in payment of outstanding loans. Although there is no provision expressly authorizing such acceptance, nor is there one prohibiting it, yet the duty imposed by the Backpay Law upon said corporation as to the acceptance or discount of backpay certificates is neither clear nor ministerial, but discretionary merely, and such special civil action does not issue to control the exercise of discretion of a public officer." 10 Likewise, we have held that courts have no power to order the Commissioner of Customs to confiscate goods imported in violation of the Import Control Law, R.A. 426, as said forfeiture is subject to the discretion of the said official, 11 nor may courts control the determination of whether or not an applicant for a visa has a non-immigrant status or whether his entry into this country would be contrary to public safety for it is not a simple ministerial function but an exercise of discretion. 12

Moreover, since the office of the Commissioner of Internal Revenue is charged with the administration of revenue laws, which is the primary responsibility of the executive branch of the government, mandamus may not he against the Commissioner to compel him to impose a tax assessment not found by him to be due or proper for that would be tantamount to a usurpation of executive functions. As we held in the case of Commissioner of Immigration vs. Arca 13 anent this principle, "the administration of immigration laws is the primary responsibility of the executive branch of the government. Extensions of stay of aliens are discretionary on the part of immigration authorities, and neither a petition for mandamus nor one for certiorari can compel the Commissioner of Immigration to extend the stay of an alien whose period to stay has expired.

Such discretionary power vested in the proper executive official, in the absence of arbitrariness or grave abuse so as to go beyond the statutory authority, is not subject to the contrary judgment or control of others. " "Discretion," when applied to public functionaries, means a power or right conferred upon them by law of acting officially, under certain circumstances, uncontrolled by the judgment or consciences of others. A purely ministerial act or duty in contradiction to a discretional act is one which an officer or tribunal performs in a given state of facts, in a prescribed manner, in obedience to the mandate of a legal authority, without regard to or the exercise of his own judgment upon the propriety or impropriety of the act done. If the law imposes a duty upon a public officer and gives him the right to decide how or when the duty shall be performed, such duty is discretionary and not ministerial. The duty is ministerial only when the discharge of the same requires neither the exercise of official discretion or judgment." 14

Thus, after the Commissioner who is specifically charged by law with the task of enforcing and implementing the tax laws and the collection of taxes had after a mature and thorough study rendered his decision or ruling that no tax is due or collectible, and his decision is sustained by the Secretary, now Minister of Finance (whose act is that of the President unless reprobated), such decision or ruling is a valid exercise of discretion in the performance of official duty and cannot be controlled much less reversed by mandamus. A contrary view, whereby any stranger or informer would be allowed to usurp and control the official functions of the Commissioner of Internal Revenue would create disorder and confusion, if not chaos and total disruption of the operations of the government.

Considering then that respondent judge may not order by mandamus the Commissioner to issue the assessment against Meralco Securities Corporation when no such assessment has been found to be due, no deficiency taxes may therefore be assessed and collected against the said corporation. Since no taxes are to be collected, no informer's reward is due to private respondents as the informer's heirs. Informer's reward is contingent upon the payment and collection of unpaid or deficiency taxes. An informer is entitled by way of reward only to a percentage of the taxes actually assessed and collected. Since no assessment, much less any collection, has been made in the instant case, respondent judge's writ for the Commissioner to pay respondents 25% informer's reward is gross error and without factual nor legal basis.

WHEREFORE, the petitions are hereby granted and the questioned decision of respondent judge dated January 10, 1973 and order dated April 6, 1973 are hereby reversed and set aside. With costs against private respondents.

G.R. No. L-29466 May 18, 1978

ABOITIZ AND CO., INC., VISAYAN COCONUT GROWERS, INC., LU DO AND LU YM CORP., FEDERAL MARKETING CORP., OVERSEAS COMMODITY CORP., SOUTHERN PRODUCTS IMPORT AND EXPORT CORP., INTERNATIONAL COPRA EXPORT CORP., EAST VISAYAS PRODUCTS, GRAN EXPORT CORP., AIC DEVELOPMENT CORP., KAYLIN INTERNATIONAL, INC., and JOMASCO, INC., plaintiffs-appellees,vs.THE COLLECTOR OF CUSTOMS OF CEBU, in his capacity as Acting General Manager of the Cebu Customs Arrastre Service, and CEBU PORT TERMINAL, INC., defendants-appellants.

Juan, Collas, Jr., Guerrero & Torres and Marcelo B. Fernan for plaintiffs-appellees.

Juan T. David, Ernesto Morales, Eduardo P. Gabriel & Eddy A. Deen and Osmea & Ramirez for defendant-appellant Cebu Port Terminal, Inc.

Solicitor General Estelito P. Mendoza, Assistant Solicitor General Nathanael P. de Pano, Jr. and Solicitor Jesus P. Mapanao for defendant-appellant The Collector of Customs of Cebu.

This case is about the legality of the arrastre and checking charges which the Collector of Customs of Cebu collected on export cargo. Also in issue are the jurisdiction of the Court of First Instance and the Court of Tax Appeals to entertain that question, whether the petitioners had exhausted their administrative remedies, and whether the action is an unwarranted suit against the State.

Legal background. The Tariff and Customs Code, Republic Act No. 1937, in Title VII of its Book II (Customs Law), which title deals with the fees, dues and charges collectible by the Bureau of Customs, contains Part 5 which specifies the arrastre rates chargeable at the Ports of Manila, Cebu, Zamboanga, Davao, Iloilo and other ports (Secs. 3101 to 3108).

Arrastre refers to the handling of cargo on the wharf or between the establishment of the consignee or shipper and the ship's tackle. (Compania Maritima vs. Allied Free Workers Union, L-28999, May 24, 1977, 77 SCRA 24, 26). "Arrastre charge is the amount which the owner, consignee, or agent of either, of article or baggage has to pay for the handling, receiving and custody of the imported or exported article or the baggage of the passengers" (Sec. 3101, Tariff and Customs Code).

Sections 3102, 3104 and 3106 of the Tariff and Customs Code provide for the arrastre charges collectible on export cargo which is loaded in the Ports of Manila, Zamboanga and Iloilo, respectively.

In contrast, sections 3103 and 3105 of the Code, as originally enacted, inexplicably do not contain any provisions as to the arrastre charges on export cargo which is shipped from the Ports of Cebu and Davao, lively, although the two sections fix the arrastre charges for handling import cargo. (Customs Administrative Order No. 23-7066 O. G. 11053, fixes the arrastre charges, including those for export cargo, collectible at the Port of San Fernando.)

In the case of the Port of Davao, the Secretary of Finance in 1960 directed that the arrastre charges for export cargo loaded in the Port of Iloilo, as provided in section 3106(b), should be collected in the Port of Davao (Exh. 3 and 9).

For the Port of Cebu, the Secretary of Finance in his first indorsement of March 18, 1965 adopted the recommendation of the Commissioner of Customs (who was "amazed" because section 3103 does not provide for the arrastre charges for handling export cargo in the Port of Cebu) that the arrastre charges for export cargo which is loaded in the Port of Iloilo should also be collected on export cargo which is loaded in the Port of Cebu (Exh. 4 and 5).

The deficiency (call it a hiatus valde deflendus) in sections 3103 and 3105 (as to the arrastre charges on export cargo) could have been easily cured by means of amendatory legislation. But, instead of resorting to that simple expedient, the Commissioner of Customs and the Secretary of Finance chose to fill that deplorable gap by means of an administrative regulation.

Thus, on September 2, 1965, the Acting Commissioner of Customs, with the approval of the Secretary of Finance, issued Customs Administrative Order (CAO) No. 1-66 (62 O.G. 1759). It should be stressed that in CAO No. 1-66 arrastre charges for export cargo loaded in the Ports of Cebu and Davao are provided for. That order was issued pursuant to section 551 of the Revised Administrative Code and sections 608 and 3108 of the Tariff and Customs Code.

The arrastre charges for handling export cargo at the Port of Iloilo were incorporated into the management contract executed between the Bureau of Customs and Cebu Port Terminal Inc. dated October 19, 1966 (Exhs. 2 and 5). That contractual provision is the point of controversy in this case.

Customs Administrative Order CAO No. 15-70 dated September 7, 1970, issued by the Acting Commissioner of Customs and approved by the Acting Secretary of Finance, also pursuant to the legal provisions cited above, went farther than CAO No. 1-66 (66 O. G. 9434).

CAO No. 15-70 inserted in section 3103 (which, as already noted, governs the collection of arrastre charges in the Port of Cebu) provisions for the collection of checking charges, arrastre charges on export cargo, transit cargo and heavy cargo, pier lighting service, hire of auto-trucks, and water service. Those provisions are not found in section 3103 as originally enacted.

So CAO, No. 15-70 also supplied the deficiencies of the original enactment and increased the rates of arrastre charges. That was effected by the Commissioner of Customs and the Secretary of Finance by virtue of their power to make an rules and regulations necessary for the enforcement of the Tariff and Customs Code.

In the instant case, petitioners' contention is that the deficiency of section 3103, as to the arrastre charges for handling export cargo at the Port of Cebu, should be supplied by a statutory enactment and not by administrative regulations and that, in the absence of proper legislation, arrastre charges cannot be collected for handling export cargo in the Port of Cebu. That contention arose under the facts now to be stated.

Factual background. The Cebu Customs Arrastre Service, which was managed by the Collector of Customs of Cebu, collected arrastre and checking charges on products (principally copra) exported from Cebu beginning July 12, 1966. For general cargo, the arrastre charge was P2.80 per ton of 1,000 kilos or 40 cubic feet. The minimum charges for general cargo was P1.40. For twelve particular classes of merchandise (automobiles, coffee, flour, wood furniture, etc.), the arrastre charges were specified. The checking charge was P0.55 per ton for shipside deliveries.

On November 5, 1966, the arrastre work was turned over to Cebu Port-Terminal, Inc. which announced that it was going to collect the same arrastre and checking charges imposed by the Cebu Customs Arrastre Service.

As already stated, on October 19, 1966, Cebu Port Terminal Inc. entered into a management contract with the Commissioner of Customs. In that contract, it was designated as sole manager of the arrastre service at the Port of Cebu under the supervision of the Bureau of Customs. The arrastre charges are specified in paragraph 17(b) of the management contract which was approved by the military of Finance (Exh. 2). We have previously noted that, with inspect to the arrangement charges on export cargo those provided for the Port of Iloilo in section 3106 were made a part of that management contract in view of the fact that arrastre charges for export cargo for the Port Of Cebu are not provided for in section 3103 of the Tariff and Customs Code.

After that contract was cancelled, or on February 13, 1967, the Bureau of Customs again took over the arrastre service (Since May 1, 1977, the Philippine National Oil Company [PNOC] has been in charge of the arrastre service in the Port of Cebu.)

On July 30, 1966, twelve export filed in the Court of First Instance of Cebu a petition for certiorari against the Collector of Customs of Cebu as arrastre operator. The petition is really an injunction suit assailing the legality of the and charges on exports from the port of Cebu. The plaintiffs contended that the Charges were not authorized by section 3103 of the Tariff and Customs Code. An amended complaint was filed later for the purpose of impleading Cebu Port Terminal Inc. as arrastre operator. A preliminary injunction was issued.

That injunction against the collection of arrastre and checking charges was lifted in the lower court's order of January 10, 1967.

The trial court in its decision dated May 17, 1967 declared for lack of statutory authorization, the con of arrastre and charges on export cargo and ordered the defendants to refund the charges collection firm the plaintiffs or petitioners. The defendants or respondents appealed. *

The appellants contend that the lower court erred in not dismissing the petition for lack of jurisdiction, non-exhaustion of administrative remedies, and because of state immunity from suit and in holding that the arrastre charges in question were devoid of legal basis.

From the factual and legal background of this case, it is manifest that the appeal should be sustained on the grounds of lack of cause of action, or failure to exhaust administrative remedies, and lack of jurisdiction, meaning that the subject matter of the action fails within the exclusive jurisdiction of the Tax Court.

The record shows that, in spite of the silence of the law, respondent Collector of Customs imposed the arrastre charges in question in consonance with the directive of the Commissioner of Customs and the Secretary of Finance.

Instead of directly going to court, the petitioners should have appealed to the Secretary of Finance, through the Commissioner of Customs, or, they should have exhausted their administrative remedies (Sec. 79[c], Revised Administrative Code; Secs. 608, 712 2308 et seq. and 3501, Tariff and Customs Code; Acting Collector of Customs vs. Caluag, L-23925, May 24, 1967, 20 SCRA 204; Collector of Customs vs. Torres, L-22977, May 31, 1972, 45 SCRA 272).

If a litigant goes to court without first pursuing his administrative remedies, his action is premature or he has no cause of action to ventilate in court. His case is not ripe for judicial determination (Allied Brokerage Corporation vs. Commissioner of Customs, L-27641, August 31, 1971, 40 SCRA 555, 561; Pestanas vs. Dyogi L-25786, February 27, 1978, per Santos, G. S., J.; Pineda vs. Court of First Instance of Davao, 111 Phil 643).

As to the jurisdictional issue, section 7(2) of Republic Act No. 1125 provides that the Tax Court has exclusive appellate jurisdiction to review by appeal the "decisions of the Commissioner of Customs in cases involving liability for customs duties, fees or other money charges" and "Other matters under the Customs law Or Other law or Part of law administered by the Bureau of Customs (See sec. 2402, T and Customs Code).

There is no doubt that the collection of arrastre charges under the Tariff and customs Code falls within the appellate jurisdiction of the Tax Court. It is settled that the Tax Court is vested with exclusive appellee jurisdiction to review the decisions of the Commissioner of Customs in cases arising under the Customs Law, like the instant case, and that the Court of First Instance cannot, by means of certiorari prohibition or mandamus, review the said decisions Daud vs. Collector of Customs of the Port of Zamboanga City,L-24003, November 28, 1975, 68 SCRA 157; General Travel Service, Ltd. vs. David,L-19259, September 23, 1966, 18 SCRA 59, 67; Pacis vs. Averia, L-22526, November 29, 1966, 18 SCRA 907; Commissioner of Customs vs. Cloribel L-20266, January 31, 1967, 19 SCRA 234; Pacis vs. Geronimo, L-24068, April 23, 1974, 56 SCRA 683).

Hence. the trial court should have dismissed the certiorari or injunction case, not only on the ground of lack of cause of action (non-exhaustion of administrative remedies), but on the ground of palpable lack of jurisdiction. That was what the Court of First Instance of Manila did in Southwest Agricultural Marketing Corporation vs. Secretary of Finance, L-24797, October 8, 1968, 25 SCRA 452, a case strikingly similar to the instant case.

The Southwest case involves the arrastre charges collectible on export cargo loaded in the Port of Davao. As already shown the Port of Davao is in the same situation as the Port of Cebu insofar as arrastre charges for handling export cargo are concerned because the Tariff and Customs Code does not contain any provisions for the collection of arrastre charges on cargo exported from the Port of Davao. The Tariff and Customs Code contains provisions for the collection of arrastre charges on cargo exported only from the Ports of Zamboanga and Iloilo.

In the Southwest case, it appears that Gustavo A. Suarez, as arrastre contractor for the Port of Davao, was authorities by the Secretary of Finance in a communication dated September 30, 1960 to collect on export cargo loaded in the Port of Davao the arrastre charges provided for the Port of Iloilo by section 3106(b) of the Tariff and Customs Code. That authorization was made because, as repeatedly shown above, the Code is silent as to the arrastre charges collectible on cargo imported from the Ports of Davao and Cebu. Suarez required Southwest Agricultural Marketing Corporation to pay the said arrastre charges which had been made a part of his management contract.Challenging the legality of the collection of the said arrastre charges, in view of the silence of the Tariff and Customs Code on the matter, Southwest Agricultural Marketing Corporation filed an action in the Court of First Instance of Manila against Suarez and the Secretary of Finance to restrain the collection thereof.Defendants Suarez and Secretary of Finance filed a motion to dismiss on the ground that the case was within the jurisdiction of the Tax Court. The Manila court dismissed the action. Southwest Agricultural Marketing Corporation appealed.

It was held that, since the legality of the arrastre charges depends upon whether or not they are sanctioned by the Tariff and Customs Code, it was a case calling for the interpretation of the Code, which is administered by the Bureau of Customs. Consequently, the case was within the Tax Court's exclusive appellate jurisdiction (Millarez vs. Amparo, 97 Phil. 282).

As to the contention in that case that the appellate jurisdiction of the Tax Court could not be invoked because there was as yet no decision of the Commissioner of Customs, this Court disposed of it by observing that the plaintiff did not exhaust its administrative remedies and its failure to do so a lack of cause of action".

The instant case is governed by the controlling and dicisive ruling in the Southwest case. Here, it is obvious that the petitioners prematurely sought a judicial review of the Collector's imposition of arrastre charges on export cargo without giving the Commissioner of Customs and the Secretary of Finance an opportunity to redress their grievance. Moreover, the proper forum to pass upon the legality of the said arrastre charges is the Tax Court, a circumstance which strengthens the view that the petitioners should have exhausted their administrative remedies because, before the appellate jurisdiction of the Tax Court can be invoked, there should be an appealable decision of the Commissioner of Customs.

WHEREFORE, the lower court's decision is rev Petitioners complaint is dismissed with costs against them.

SO ORDERED.

G.R. No. L-29485 March 31, 1976COMMISSIONER OF INTERNAL REVENUE, petitioner,vs.AYALA SECURITIES CORPORATION and THE HONORABLE COURT OF TAX APPEALS, respondents.

Appeal from the decision of the Court of Tax Appeals dated June 20, 1968, in its CTA Case No. 1346, cancelling and declaring of no force and effect the assessment made by the petitioner, Commissioner of Internal Revenue, against the accumulated surplus of the respondent, Ayala Securities Corporation.

The factual background of the case is as follows:

On November 29, 1955, respondent Ayala Securities Corporation, a domestic corporation organized and existing under the laws of the Philippines, filed its income tax returns with the office of the petitioner for its fiscal year which ended on September 30, 1955. Attached to its income tax return was the audited financial statements of the respondent corporation as of September 30, 1955, showing a surplus of P2,758,442.37. The income tax due on the return of the respondent corporation was duly paid for within the time prescribed by law.

In a letter dated February 21, 1961, petitioner advised the respondent corporation of the assessment of P758.687.04 on its accumulated surplus reflected on its income tax return for the fiscal year which en