ABAKADA Guro Party List v.

Purisima
G.R. No. 166715 August 14, 2008
Facts:
RA 9335 (Attrition Act of 2005), a tax reform legislation, was enacted to optimize the
revenue-generation capability and collection of the Bureau of Internal Revenue (BIR) and the
Bureau of Customs (BOC).
The DOF, DBM, NEDA, BIR, BOC and the Civil Service Commission (CSC) were tasked to
promulgate and issue the implementing rules and regulations of RA 9335, to be approved by a Joint
Congressional Oversight Committee created for such purpose.
Petitioners assail, among others, the creation of a congressional oversight committee under
Section 12 of RA 9335 on the ground that it violates the doctrine of separation of powers. While the
legislative function is deemed accomplished and completed upon the enactment and approval of
the law, the creation of the congressional oversight committee permits legislative participation in
the implementation and enforcement of the law.
Issue:
Was the creation of Congressional Oversight Committee unconstitutional?
Ruling:
Yes. Legislative veto is a statutory provision requiring the President or an administrative
agency to present the proposed implementing rules and regulations of a law to Congress which, by
itself or through a committee formed by it, retains a "right" or "power" to approve or disapprove
such regulations before they take effect. It radically changes the design or structure of the
Constitution’s diagram of power as it entrusts to Congress a direct role in enforcing, applying or
implementing its own laws.
Congress has two options when enacting legislation to define national policy within the
broad horizons of its legislative competence. It can itself formulate the details or it can assign to the
executive branch the responsibility for making necessary managerial decisions in conformity with
those standards. In the latter case, the law must be complete in all its essential terms and conditions
when it leaves the hands of the legislature. Thus, what is left for the executive branch or the
concerned administrative agency when it formulates rules and regulations implementing the law is
to fill up details (supplementary rule-making) or ascertain facts necessary to bring the law into
actual operation (contingent rule-making).
Congress, in the guise of assuming the role of an overseer, may not pass upon the legality of
implementing rules and regulations by subjecting them to its stamp of approval without disturbing
the calculated balance of powers established by the Constitution. In exercising discretion to
approve or disapprove the IRR based on a determination of whether or not they conformed with
the provisions of RA 9335, Congress arrogated judicial power unto itself, a power exclusively vested
in this Court by the Constitution.
Thus, the creation of Congressional Oversight Committee is unconstitutional.
 British American Tobacco v. Camacho
G.R. No. 163583 August 20, 2008
Facts:
Paragraph (c) of Section 145 provides for four tiers of tax rates based on the net retail
price per pack of cigarettes. To determine the applicable tax rates of existing cigarette brands, a
survey of the net retail prices per pack of cigarettes was conducted as of October 1, 1996. As such,
new brands of cigarettes shall be taxed according to their current net retail price while existing or
"old" brands shall be taxed based on their net retail price as of October 1, 1996.
To implement RA 8240, the Bureau of Internal Revenue (BIR) issued Revenue Regulations
No. 1-97, which classified the existing brands of cigarettes as those duly registered or active brands
prior to January 1, 1997. New brands, or those registered after January 1, 1997, shall be initially
assessed at their suggested retail price until such time that the appropriate survey to determine
their current net retail price is conducted.
On February 17, 2003, Revenue Regulations No. 9-2003, amended Revenue Regulations
No. 1-97 by providing, among others, a periodic review every two years or earlier of the current net
retail price of new brands and variants thereof for the purpose of establishing and updating their
tax classification.
Pursuant thereto, Revenue Memorandum Order No. 6-2003 was issued on March 11,
2003, prescribing the guidelines and procedures in establishing current net retail prices of new
brands of cigarettes and alcohol products.
Subsequently, Revenue Regulations No. 22-2003 was issued on August 8, 2003 to
implement the revised tax classification of certain new brands introduced in the market after
January 1, 1997, based on the survey of their current net retail price.
British American Tobacco asserts that Revenue Regulations No. 1-97, as amended by
Revenue Regulations No. 9-2003, Revenue Regulations No. 22-2003 and Revenue Memorandum
Order No. 6-2003, are invalid insofar as they empower the BIR to reclassify or update the
classification of new brands of cigarettes based on their current net retail prices every two years or
earlier.
Issue:
Are RR Nos. 1-97 as amended by RR No. 9-2003, RR No. 22-2003, and RMO No. 6-2003
invalid?
Ruling:
Yes. They are invalid as they empower the BIR to reclassify or update the classification of
new brands of cigarettes based on their current NRP every two years or earlier. The
abovementioned revenue regulations unjustifiably emasculate the operation of Section 145 of the
NIRC because they authorize the Commissioner of Internal Revenue to update the tax classification
of new brands every two years or earlier subject only to its issuance of the appropriate Revenue
Regulations, when nowhere in Section 145 is such authority granted to the Bureau. Unless
expressly granted to the BIR, the power to reclassify cigarette brands remains a prerogative of the
legislature which cannot be usurped by the former.
The clear legislative intent was for new brands to benefit from the same freezing
mechanism which was intended to give stability as the BIR would be prevented from tinkering with
the classification since it would remain unchanged despite the increase in the NRP of previously
classified brands. To reiterate, in enacting RA 8240, Congress categorically rejected the DOF
proposal and Senate Version which would have empowered the DOF and BIR to periodically adjust
the excise tax rate and tax brackets, and to periodically resurvey and reclassify cigarette brands.
The power of the BIR under the special law was only to validate the suggested net retail
price of the new brand against the net retail price. Such classification of new brands and brands
introduced shall not be revised except by an act of Congress.
 CIR v. Burroughs Limited
G.R. No. L-66653 June 19, 1986
Facts:
Burroughs Limited is a foreign corporation authorized to engage in trade or business in the
Philippines. It applied to remit to its parent company abroad the amount of P7,647,058.00. On
March 14, 1979, it paid the 15% branch profit remittance tax, pursuant to Sec. 24 (b) (2) (ii) and
remitted to its head office the amount of P6,499,999.30. Claiming that the 15% profit remittance tax
should have been computed on the basis of the amount actually remitted (P6,499,999.30) and not
on the amount before profit remittance tax (P7,647,058.00), Burroughs Limited filed a claim for the
refund or tax credit of the amount of P172,058.90 representing alleged overpaid branch profit
remittance tax.
In a BIR Ruling dated January 21, 1980, Section 24 (b) (2) (ii) had been interpreted to mean
that "the tax base upon which the 15% branch profit remittance tax shall be imposed is the
profit actually remitted abroad and not on the total branch profits out of which the remittance is to
be made. However, the CIR contends that Burroughs Limited is no longer entitled to a refund
because Memorandum Circular No. 8-82 dated March 17, 1982 had revoked and/or repealed the
BIR ruling of January 21, 1980. The said memorandum circular states—
Considering that the 15% branch profit remittance tax is imposed and collected at source,
necessarily the tax base should be the amount actually applied for by the branch with the Central
Bank of the Philippines as profit to be remitted abroad.
Issue:
Can the new revenue ruling be retroactively applied?
Ruling:
No. What is applicable in the case at bar is still the Revenue Ruling of January 21, 1980
because Burroughs Limited paid the branch profit remittance tax in question on March 14, 1979.
Memorandum Circular No. 8-82 dated March 17, 1982 cannot be given retroactive effect in the light
of Section 327 of the National Internal Revenue Code which provides for the non-retroactivity of
rulings, except in the following cases (a) where the taxpayer deliberately misstates or omits material
facts from his return or in any document required of him by the Bureau of Internal Revenue; (b) where
the facts subsequently gathered by the Bureau of Internal Revenue are materially different from the
facts on which the ruling is based, or (c) where the taxpayer acted in bad faith. 
The prejudice that would result to Burroughs Limited by a retroactive application of
Memorandum Circular No. 8-82 is beyond question for it would be deprived of the substantial
amount of P172,058.90. And, insofar as the enumerated exceptions are concerned, admittedly,
Burroughs Limited does not fall under any of them. Moreover, the case involved a complicated issue
due to the ambiguity of the law.
Therefore, Memorandum Circular No. 8-82 cannot be retroactively applied.
 CIR v. CA and Fortune Tobacco
G.R. No. 119761 August 29, 1996
Facts:
Fortune Tobacco Corporation is engaged in the manufacture of different brands of
cigarettes, among others are, “Hope Luxury”, “Premium More”, and “Champion”. These are classified
as local brands taxed at 45% or 20% as provided under Republic Act No. 7654.
About a month after the enactment of RA 7654, Revenue Memorandum Circular No. 37-93
was issued. It provides that "HOPE," "MORE" and "CHAMPION" being manufactured by Fortune
Tobacco Corporation are considered locally manufactured cigarettes bearing a foreign brand
subject to the 55% ad valorem tax on cigarettes.
The CIR opines that RMC 37-93 is merely an interpretative ruling of the BIR which can thus
become effective without any prior need for notice and hearing, nor publication.
Issue:
Is RMC 37-93 a legislative rule or an interpretative rule?
Ruling:
Legislative Rule. A legislative rule is in the nature of subordinate legislation, designed to
implement a primary legislation by providing the details thereof. In the same way that laws must have
the benefit of public hearing, it is generally required that before a legislative rule is adopted there
must be hearing. There must be a publication which should be done at least two (2) weeks before
the hearing. A legislative rule substantially adds to or increases the burden of those governed. It has
the force and effect of law.
On the other hand, interpretative rules are designed to provide guidelines to the law which
the administrative agency is in charge of enforcing. Its applicability needs nothing further than its
bare issuance for it gives no real consequence more than what the law itself has already prescribed.
It merely provides for the means that can facilitate or render least cumbersome the implementation
of the law.
Here, RMC 37-93 has been made to place "Hope Luxury," "Premium More" and "Champion"
within the classification of locally manufactured cigarettes bearing foreign brands. Prior to the
issuance of RMC 37-93, "Hope Luxury," "Premium More," and "Champion" cigarettes were in the
category of locally manufactured cigarettes not bearing foreign brand subject to 45% ad
valorem tax. Hence, without RMC 37-93, the enactment of RA 7654, would have had no new tax rate
consequence on private respondent's products. Evidently, in order to place "Hope Luxury,"
"Premium More," and "Champion" cigarettes within the scope of the amendatory law and subject
them to an increased tax rate, the now disputed RMC 37-93 had to be issued. In so doing, the BIR
not simply interpreted the law; verily, it legislated under its quasi-legislative authority. The due
observance of the requirements of notice, of hearing, and of publication should not have been then
ignored.
Accordingly, RMC 37-93 is invalid and unenforceable.
 PB Com v. CIR
G.R. No. 112024 January 28, 1999
Facts:
On August 1987, PB Com requested for a tax credit representing the overpayment of taxes
in the first and second quarters of 1985; and on July 1988, creditable taxes withheld by their
lessees from property rentals in 1985 and 1986.
The CTA denied the request of PB Com for a tax refund or credit on the ground that it was
filed beyond the two-year reglementary period provided for by law.
PB Com argued that its claims for refund and tax credits are not yet barred by prescription
relying on the applicability of Revenue Memorandum Circular No. 7-85 issued on April 1, 1985. The
circular states that overpaid income taxes are not covered by the two-year prescriptive period
under the tax Code and that taxpayers may claim refund or tax credits for the excess quarterly
income tax with the BIR within ten (10) years under Article 1144 of the Civil Code. PB Com likewise
said that it relied in good faith on the formal assurances of BIR in RMC No. 7-85, hence can be
applied retroactively.
Issue:
Can the new circular be retroactively applied?
Ruling:
No. Section 230 of the National Internal Revenue Code (NIRC) states that the taxpayer may
file a claim for refund or credit with the Commissioner of Internal Revenue, within two (2) years
after payment of tax, before any suit in CTA is commenced. The two-year prescriptive period
provided, should be computed from the time of filing the Adjustment Return and final payment of
the tax for the year.
When the Acting Commissioner of Internal Revenue issued RMC 7-85, changing the
prescriptive period of two years to ten years on claims of excess quarterly income tax payments,
such circular created a clear inconsistency with the provision of Sec. 230 of 1977 NIRC. In so doing,
the BIR did not simply interpret the law; rather it legislated guidelines contrary to the statute
passed by Congress.
The nullification of RMC No. 7-85 issued by the Acting Commissioner of Internal Revenue is
an administrative interpretation which is not in harmony with Sec. 230 of 1977 NIRC for being
contrary to the express provision of a statute. Hence, his interpretation could not be given weight
for to do so would, in effect, amend the statute.
A memorandum-circular of a bureau head could not operate to vest a taxpayer with shield
against judicial action. For there are no vested rights to speak of respecting a wrong construction of
the law by the administrative officials and such wrong interpretation could not place the
Government in estoppel to correct or overrule the same.  Moreover, the non-retroactivity of rulings
by the Commissioner of Internal Revenue is not applicable in this case because the nullity of RMC
No. 7-85 was declared by respondent courts and not by the Commissioner of Internal Revenue.
Lastly, it must be noted that, as repeatedly held by this Court, a claim for refund is in the nature of a
claim for exemption and should be construed in strictissimi juris against the taxpayer.
 Pilipinas Total Gas, Inc. v. CIR
G.R. No. 207112 December 8, 2015
Facts:
On May 15, 2008, Total Gas filed an administrative claim for refund of unutilized
input VAT for the first two quarters of taxable year 2007, inclusive of supporting
documents. On August 28, 2008, Total Gas submitted additional supporting documents to
the BIR. On January 23, 2009, Total Gas elevated the matter to the CTA in view of the
inaction of the Commissioner of Internal Revenue (CIR).
The CTA En Banc ruled that the petition was filed out of time. It counted the running
of the 120-day period from the date the application for refund was filed or on May 15, 2008,
and thus ruled that the judicial claim was belatedly filed.

Issue:
Can the RMC 54-2014 be retroactively applied?
Ruling:
No.
Thus, for purposes of counting the 120-day period, it should be reckoned from
August 28, 2008, the date when Total Gas made its "submission of complete documents to
support its application" for refund of excess unutilized input VAT. Consequently, counting
from this later date, the BIR had 120 days to decide the claim or until December 26, 2008.
With absolutely no action or notice on the part of the BIR for 120 days, Total Gas had 30
days or until January 25, 2009 to file its judicial claim.
Total Gas, thus, timely filed its judicial claim on January 23, 2009.
 CIR v. San Roque Power Corporation
G.R. No. 187485 February 12, 2013
Facts:

Issue:
Ruling:
 CIR v. Leal
G.R. No. November 18, 2002
Facts:
Issue:
Ruling: