TAX1.17 Corona v. United Harbor Pilots Association of the Phil.

FACTS: PPA promulgated PPAAO-03-85 which embodied the Rules and Regulations Governing Pilotage Services.
Subsequently, PPA-AO No. 04-92 was issued which provides that all existing regular appointments which have been
previously issued shall remain valid up to 31 December 1992 only and that all appointments to harbor pilot positions
in all pilotage districts shall henceforth, be only for a term of one (1) year subject to yearly renewal or cancellation.
Respondents questioned PPA-AO No. 04-92 and requested for the suspension of its implementation but their
request remain unheeded. They appealed to the OP. OP dismissed the appeal/petition.

ISSUE: Whether or not the order was issued in disregard of respondents right against deprivation of property without
due process of law?

RULING: Yes. The order was a violation of the respondents’ property rights of their profession. Continue with
citation in the book.

TAX2.17 Meralco Securities Corp. v. Savellano

FACTS: Juan Maniago informed the CIR that MERALCO Securities Corp did not pay the proper taxes from 1962 to
1966. The CIR conducted an investigation and it found out that MERALCO did actually pay the proper amount of tax
due within said period. The CIR then informed Maniago of its decision and also informed him that since no deficiency
tax was collected, Maniago is not entitled to the informer’s reward.
Maniago then filed a petition for mandamus against the CIR to compel it to impose the alleged deficiency
tax assessment on Meralco and to award to him the corresponding informer's reward.

ISSUE: Whether the CIR may be compelled by the mandamus issued by the respondent judge.

RULING: No. see citation in the book.

TAX3.17 Manila Electric Co. v. Public Service Commission

HELD: A tax statute may be attacked in the courts not only by reason by non-observance or violation of the
constitutional limitations on the exercise of the taxing power, but also on account of violation or non-observance of
the procedure laid down by the fundamental law on the enactment of legislation.

TAX4.17 CREBA v. Exec. Sec.

FACTS: Petitioner claims that the MCIT is unconstitutional because it is highly oppressive, arbitrary and confiscatory
which amounts to deprivation of property without due process of law. It explains that gross income as defined under
said provision only considers the cost of goods sold and other direct expenses; other major expenditures, such as
administrative and interest expenses which are equally necessary to produce gross income, were not taken into
account. Thus, pegging the tax base of the MCIT to a corporations gross income is tantamount to a confiscation of
capital because gross income, unlike net income, is not realized gain

RULING: NO. MCIT does not tax capital but only taxes income as shown by the fact that the MCIT is arrived at by
deducting the capital spent by a corporation in the sale of its goods, i.e., the cost of goods and other direct expenses
from gross sales. Besides, there are sufficient safeguards that exist for the MCIT: (1) it is only imposed on the 4th year
of operations; (2) the law allows the carry forward of any excess MCIT paid over the normal income tax; and (3) the
Secretary of Finance can suspend the imposition of MCIT in justifiable instances.

TAX5.17 ABS-CBN Broadcasting Corp. v. CTA

FACTS: same with 5.9

ISSUE: Whether CIR is not precluded from adopting a position contrary from what was previously taken
RULING: No, Commissioner of Collector is precluded from adopting a position inconsistent with one previously
taken where injustice would result therefrom, or where there has been a misrepresentation to the taxpayer.

TAX6.17 Commissioner v. Benguet Corp.

FACTS: Respondent, relying on VAT Ruling No. 3788-88 issued by CIR Santos, which declared that the sale of gold
to Central Bank is considered as export sale subject to zero-rate. Relying on its zero-rated status and the above
issuances, respondent sold gold to the Central Bank and entered into transactions that resulted in input VAT incurred
in relation to the subject sales of gold. It then filed applications for tax refunds/credits corresponding to input VAT
which were expressly disallowed by the CIR. The express disallowance of respondents application for refunds/credits
and the issuance of deficiency assessments against it were based on BIR VAT Ruling No. 008-92 which was issued
subsequent to the consummation of the subject sales of gold to the Central Bank which provides that sales of gold to
the Central Bank shall not be considered as export sales and thus, shall be subject to 10% VAT.

ISSUE: whether the subsequent VAT ruling may validly be given retroactive effect

RULING: No. Applying the ruling retroactively would be prejudicial to the taxpayer.

TAX7.17 Phil. Healthcare Providers v. Commissioner

FACTS: President Aquino issued E.O. No. 273, amending the NIRC of 1977 by imposing VAT on the sale of goods
and services. This E.O. took effect in 1988.
Before the effectivity of E.O. No. 273, respondent wrote the CIR inquiring whether the services it provides to the
participants in its health care program are exempt from the payment of the VAT. CIR said that it is exempt.
Meanwhile, in 1996, Expanded VAT Law took effect, amending further the NIRC of 1977.
In the interim, in 1999, the BIR sent respondent a PAN for deficiency in its payment of the VAT and DST for
taxable years 1996-97. Respondent filed for protest.

ISSUE: Whether or not the assessment made pursuant to a new law is correct

RULING: No. Applying the ruling retroactively would be prejudicial to the taxpayer. The CIR is precluded from
adopting a position contrary to one previously taken where injustice would result to the taxpayer.

TAX8.17 Commissioner v. Michel Lhuiller Pawnshop

FACTS: CIR issued RMO No. 15-91, which was clarified by RMO No. 43-91 imposing a 5% lending investors tax
on pawnshops. Later on, the BIR issued an Assessment Notice against Lhuillier demanding payment of deficiency
percentage. Lhuillier filed an administrative contending that neither the Tax Code nor the VAT Law expressly imposes
5% percentage tax on the gross income of pawnshops; that pawnshops are different from lending investors, which are
subject to the 5% percentage tax under the specific provision of the Tax Code; that RMO No. 15-91 is not
implementing any provision of the Internal Revenue laws but is a new and additional tax measure on pawnshops,
which only Congress could enact.

ISSUE: Whether pawnshops included in the term lending investors for the purpose of imposing the 5% percentage
tax under the NIRC.

RULING: No. see book citation.

TAX9.17 CIR v. Filinvest Development Corp.

FACTS: same with 9.8

ISSUE: Whether the CIR can impute theoretical interest on the advances made by Filinvest to its affiliates
RULING: No. The power of CIR to distribute or allocate gross income and deductions does not include the power to
impute “theoretical interests” to the controlled taxpayer’s transactions. The rule under the Civil Code that “no interest
shall be due unless expressly stipulated in writing” was also applied in this case.

TAX10.17 Commissioner v. Ariete

FACTS: An informer filed an affidavit with the Special Investigation Division (SID) stating that no ITRs were filed
by the taxpayer for the years 1994-1996 which was confirmed by revenue officers. CIR offered Voluntary Assessment
Program (VAP), the taxpayer availed of the benefits under said VAP.
However, later on, the BIR issued letter of authority and after tax audit, issued FAN. The FAN was timely
protested, but was denied, so the taxpayer filed an appeal to the CTA. The CTA cancelled the assessment stated that
respondent’s case was not duly recorded in the Official Registry Book of the BIR before she availed of the VAP. CA
affirmed the CTA decision.

ISSUE: Whether the CA erred in holding that the recording in the Official Registry Book of the BIR of the information
filed by the informer is a mandatory requirement before a taxpayer-applicant may be excluded from the coverage of
the VAP.

RULING: Yes. The recording in the Official Registry Book of the BIR of the information filed by the informer is a
mandatory requirement before a taxpayer-applicant may be excluded from the coverage of the VAP. The court
explained that where the language of the law is clear and equivocal, it must be given its literal application and applied
without interpretation.

TAX11.17 Commissioner v. Philex Mining Corp.

The law presumes that the BIR had sufficiently passed upon the taxpayer’s compliance, much more the details of the
SALN, before acceptance of the acceptance of the applicable amnesty tax payment. In the instant case, the CIR even
failed to file a timely MR when the Court resolved PMC’s availment of the tax amnesty. Thus, he cannot raise at this
point in time that the CTA can inquire into the correctness of PMC’s SALN, when the CIR itself could have easily
denied the acceptance of PMC’s availment of the tax amnesty.

TAX13.17 PLDT v. Public Service Commission

FACTS: This case is about the interpretation and application of Sec 40 (e) of the Public Service Act. The provision
lays down as basis for computing the amount of supervision and/or regulation fees payable by a public utility.
Petitioners questions the "confiscatory and unreasonable" character of the fees, if considered as taxes and
computed on the basis of "the property and equipment." Respondent argued that to interpret the supervision and/or
regulation fees in question as taxes under the theory that the intention is to raise revenue would entail self-defeating
consequences which, in the ultimate analysis, would be contrary to public interest.

RULING: The nature and amount of such fees must be reasonably related to the cost of such supervision and/or
regulation. It is equally clear that to base the computation of the fees on the value of the properties and equipment of
the petitioners, with or without depreciation, would be to ignore altogether the requirement of such reasonable relation.
The taxpayer may question the amount of the tax and/or penalty being collected as too high, confiscatory or
excessive in violation of the provision of the Constitution. To prove this point, documentary evidence, data, and
statistics must be submitted.

TAX14.17 Philippine Stock Exchange v. Commissioner

FACTS:

Petitioner received four (4) assessment notices together with their corresponding demand letters. Petitioner argued
that the present assessments are null and void for having been issued without stating the law and the facts from which
the assessments were made. According to petitioner, it could only presume that the same issues discussed with the
BIR examiners during the preliminary investigation were the same issues raised in the questioned assessments.
ISSUE:
Whether the Assessment is null and void for having been issued without stating the law and the facts on which the
Assessment is based.

RULING: CTA do not agree with the petitioner that it was not informed of the law and the facts from which the
assessments were based for if it was not informed, it could not have protested the assessments in detail.
Add citation in the book.