March 2010 Philippine Supreme Court Decisions on Tax Law

Here are selected March 2010 rulings of the Supreme Court of the Philippines on tax law:

Constitutionality; justiciable controversy. A dispute ripens into a judicial controversy by the mere enactment of a questioned law or the approval of a challenged act, even without any other overt act. Thus, there is no need to wait until the concerned taxpayers have shut down their operations as a result of the questioned minimum corporate income tax (MCIT) or creditable withholding tax (CWT). Chamber of Real Estate and Builders’ Associations, Inc. vs. The Hon. Executive Secretary Alberto Romulo, et al., G.R. No. 160756, March 9, 2010.

Court of Tax Appeals; issues not raised. Failure by the Commissioner of Internal Revenue (CIR) to timely plead and prove before the CTA the defenses that Toshiba was VAT-exempt under Republic Act No. 7916 and that its export sales were VAT-exempt under the Tax Code is deemed a waiver of such defenses. Toshiba Information Equipment (Phils.), Inc. vs. Commissioner of Internal Revenue, G.R. No. 157594, March 9, 2010.

CTA; judicial admissions. An admission made in a stipulation of facts at pre-trial by the parties is considered a judicial admission and, under the Rules of Court, requires no proof. Such admission may be controverted only by a showing that it was made through a palpable mistake or that no such admission was made. Toshiba Information Equipment (Phils.), Inc. vs. Commissioner of Internal Revenue, G.R. No. 157594, March 9, 2010.

Creditable withholding tax (CWT); constitutionality; due process. Imposition of CWT does not constitute a deprivation of property without due process because seller may claim tax refund if net income is less than the taxes withheld. Practical problems in claiming tax refund do not affect the constitutionality and validity of CWT as a method of collecting tax. Chamber of Real Estate and Builders’ Associations, Inc. vs. The Hon. Executive Secretary Alberto Romulo, et al., G.R. No. 160756, March 9, 2010.

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