Dissension in the Court: July 2013

In a decision penned by Justice Peralta and promulgated last July 1, 2013, the Third Division of the Supreme Court ruled that just compensation for property taken by the government in 1940 should be Php0.70/sqm, its fair market value (FMV) at the time of taking, and not Php10,000/sqm, its FMV at the time of filing of the claim for just compensation by the landowners in 1995, nor Php1,500/sqm, its reasonable value as determined by the Provincial Appraisal Committee (PAC) appointed by the lower court in 1999 to determine just compensation.

Private respondents owned land in Bulacan that was taken by the DPWH in 1940 and used for the construction of the MacArthur Highway, without the owners’ consent and without the necessary expropriation proceedings.  In 1994, respondents demanded payment of the FMV of the land but petitioner DPWH District Engineer Contreras offered to pay Php0.70/sqm per resolution of the PAC of Bulacan.  Unsatisfied with the offer, respondents demanded the return of their property or the payment of compensation at current FMV.  As their demand remained unheeded, respondents filed a Complaint on March 1995 for recovery of possession with damages against petitioners DPWH Secretary and DPWH District Engineer.

Continue reading

Dissension in the Court: June 2013

By a vote of seven justices, with three inhibiting, one absent, and four dissenting, the Supreme Court – in a decision penned by J. Perez and promulgated last June 25, 2013 – dismissed this petition for certiorari assailing the earlier Resolutions of public respondent COMELEC which ordered the cancellation of petitioner’s Certificate of Candidacy (CoC) for the position of Representative of the lone district of Marinduque.

This case stemmed from a petition to deny due course or to cancel petitioner Reyes’s CoC filed on October 2012 by private respondent Tan with the COMELEC alleging that Reyes misrepresented in her CoC that (a) she is single and a resident of Marinduque, when she is married to Rep. Mandanas of Bauan, Batangas and a resident of that town (and also of Quezon City as admitted in the Directory of Congressional Spouses of the House of Representatives), and (b) she is a Filipino citizen and not a permanent resident of another country, when she is an American citizen and a permanent resident of the United States.

In her answer, Reyes averred that (a) she is not legally married to Rep. Mandanas, thus his residence cannot be attributed to her, and (b) the evidence presented by Tan does not support the allegation that she is a permanent resident or citizen of the United States.

Continue reading

Dissension in the Court: April 2013

The 1987 Constitution allows only one (1) member of a bicameral Congress to sit in the Judicial and Bar Council (JBC). This, according to the Supreme Court in a majority decision penned by J. Mendoza and promulgated last April 16, 2013, was the intention of the framers of the Constitution who conceived of the JBC as an independent body representative of all the stakeholders in the judicial appointment process to recommend nominees to the President in order to rid such process of partisan political activities, and carefully worded Section 8, Article VIII of the 1987 Constitution in this wise:

Section 8. (1) A Judicial and Bar Council is hereby created under the supervision of the Supreme Court composed of the Chief Justice as ex officio Chairman, the Secretary of Justice, and a representative of the Congress as ex officio Members, a representative of the Integrated Bar, a professor of law, retired Member of the Supreme Court, and a representative of the private sector.

Continue reading

Dissension in the Court: March 2013

In a majority decision penned by J. Perlas-Bernabe and promulgated last March 19, 2013, the Supreme Court reversed the decision of the House of Representatives Electoral Tribunal (HRET) which declared the validity of private respondent Lucy Torres-Gomez’s substitution of Richard Gomez as the Liberal Party’s replacement candidate for the position of Leyte Representative.

The records clearly show that (i) Richard filed his certificate of candidacy (CoC) misrepresenting in his CoC that he resided in Ormoc City (in light of the Constitutional requirement that members of the House of Representatives be residents of their respective districts at least one year immediately preceding the day of the election) when he in fact resided in Greenhills, Mandaluyong City, (ii) an opposing candidate, Juntilla, filed a petition asking the COMELEC to disqualify Richard and to deny due course to or cancel his CoC for material misrepresentation regarding his residence, (iii) the COMELEC First Division granted Juntilla’s petition without any qualification although its resolution only spoke of disqualifying Richard without denying due course to or canceling his CoC, (iv) only Richard moved for reconsideration of the above resolution; Juntilla did not, (v) the COMELEC En Banc issued a resolution denying Richard’s motion for reconsideration and after the latter filed a Manifestation accepting the decision to enable a substitute to take his place, the COMELEC En Banc issued an Order declaring its resolution final and executory, (vi) Lucy promptly filed her CoC together with the Liberal Party endorsement as the party’s official substitute candidate vice Richard, (vii) over Juntilla’s opposing claim that there should be no substitution because there is no candidate to substitute for, the COMELEC En Banc issued a resolution allowing the substitution on the basis that the COMELEC First Division resolution only spoke of disqualifying Richard without denying due course to or canceling his CoC, (viii) Juntilla filed a motion for reconsideration of this En Banc order but, pending resolution of his motion, local elections were conducted and Lucy was proclaimed winner, (ix) 12 days after Lucy’s proclamation, one of her losing opponents, petitioner Tagolina, filed a petition for quo warranto before the HRET to oust Lucy from her congressional seat claiming, among others, that she did not validly substitute Richard since the latter’s CoC was void ab initio, (x) the HRET dismissed the quo warranto petition and held that the substitution was valid noting that the COMELEC First Division resolution only spoke of disqualifying Richard without denying due course to or canceling his CoC.

Continue reading

Dissension in the Court: February 2013

The primary issue in the three (3) consolidated cases involving San Roque Power, Taganito Mining and Philex Mining decided last February 12, 2013 revolves around the proper period for filing the judicial claim for refund or credit of creditable input tax. Under Section 112(A) and 112(C) of the Tax Code, a taxpayer whose sales are zero-rated or effectively zero-rated can file his administrative claim for refund or credit at anytime within two (2) years after the taxable quarter when the sales were made and, after full or partial denial of the claim or failure of the Commissioner to act on his application within 120 days from submission of the same, he may, within 30 days from receipt of the decision denying the claim or after the expiration of the 120-day period, file his judicial claim with the CTA.

These cases all involved the timely filing by the taxpayers of their administrative claims with the Commissioner of Internal Revenue. However, San Roque and Taganito both prematurely filed their judicial claims without waiting for the 120-day period (for the Commissioner to act on their administrative claims) to lapse, whereas Philex was a case of late filing since it did not file its judicial claim until after 426 days beyond the 120 + 30 day periods. Voting 9 to 6, the majority, in a decision penned by Justice Carpio, denied tax refund or credit to San Roque and Philex, but granted the same to Taganito.

The majority denied refund to San Roque on the basis, among others, that the waiting period for filing a judicial claim is mandatory and jurisdictional and has been in the Tax Code for more than 15 years before San Roque filed its judicial claim in April 10, 2003 (barely 13 days after it filed its administrative claim). The majority, however, granted refund to Taganito who, although like San Roque filed its judicial claim without waiting for the 120-day period to lapse, was deemed to have filed its judicial claim on time since it was filed on February 14, 2007 or after the issuance of BIR Ruling No. DA-489-03 on December 10, 2003 (which states that the taxpayer need not wait for the 120-day period to lapse before it could seek judicial relief with the CTA) but before the October 6, 2010 Supreme Court (SC) decision in Commissioner of Internal Revenue v. Aichi Forging Company of Asia (reinstating the 120+30 day periods as mandatory and jurisdictional). The majority held that since the Commissioner has exclusive and original jurisdiction to interpret tax laws under Section 4 of the Tax Code, a taxpayer should not be prejudiced by an erroneous interpretation by the Commissioner and, under Section 246, a reversal of a BIR ruling cannot adversely prejudice a taxpayer like Taganito who in good faith relied on it prior to its reversal.

Continue reading

Dissension in the Court: January 2013

The same legal issue resolved in the earlier case of Fort Bonifacio Development Corporation v. Commissioner of Internal Revenue (G.R. Nos. 158885 & 170680, 2 October 2009) – regarding the proper interpretation of Section 105 (now Section 111(A)) of the National Internal Revenue Code (“Tax Code”) – was again raised in the recent case of Fort Bonifacio Development Corporation vs. Commissioner of Internal Revenue and Revenue District Officer, Revenue District No. 44, Taguig and Pateros, Bureau of Internal Revenue (G.R. No. 173425, January 22, 2013), resulting in the same decision and dissenting opinion.

Section 105 of the old Tax Code provides:

SEC. 105. Transitional input tax credits. – A person who becomes liable to value-added tax or any person who elects to be a VAT-registered person shall, subject to the filing of an inventory prescribed by regulations, be allowed input tax on his beginning inventory of good, materials and supplies equivalent to 8% of the value of such inventory or the actual value-added tax paid on such goods, materials and supplies, whichever is higher, which shall be creditable against the output tax. (Emphasis supplied.)

The recent case began with the purchase by Fort Bonifacio Development Corporation (“FBDC”) on February 8, 1995 from the national government of a portion of the Fort Bonifacio Global City.  On January 1, 1996, RA 7716 restructured the VAT system by, among others, extending the VAT to real properties held primarily for sale to customers or held for lease in the ordinary course of trade of business.

Continue reading