G.R. No.

L-28329 August 17, 1975

COMMISSIONER OF CUSTOMS, petitioner,
vs.
ESSO STANDARD EASTERN, INC., (Formerly: Standard-Vacuum Refining Corp.
(Phil.), 

FACTS:
Respondent overpaid its 1959 income tax by P221,033.00. It was granted a tax credit
by the Commissioner accordingly on 1964. However, ESSOs payment of its income tax
for 1960 was found to be short by P367,994.00. The Commissioner (of Internal
Revenue) wrote to ESSO demanding payment of the deficiency tax, together with
interest thereon for the period from 1961 to 1964. ESSO paid under protest the amount
alleged to be due, including the interest as reckoned by the Commissioner. It protested
the computation of interest, contending it was more than that properly due. It claimed
that it should not have been required to pay interest on the total amount of the
deficiency tax, P367,994.00, but only on the amount of P146,961.00—representing the
difference between said deficiency, P367,994.00, and ESSOs earlier overpayment of
P221,033.00 (for which it had been granted a tax credit). ESSO thus asked for a refund.
The Internal Revenue Commissioner denied the claim for refund. ESSO appealed to the
Court of Tax Appeals which ordered payment to ESSO of its refund-claim representing
overpaid interest.

The Commissioner argued the tax credit of P221,033.00 was approved only on year
1964, it could not be availed of in reduction of ESSOs earlier tax deficiency for the year
1960; as of that year, 1960, there was as yet no tax credit to speak of, which would
reduce the deficiency tax liability for 1960. In support of his position, the Commissioner
invokes the provisions of Section 51 of the Tax Code.

ISSUE:

Whether or not the interest on delinquency should be applied on the full tax deficiency
of P367,994.00 despite the existence of overpayment in the amount of P221,033.00.

RULING:
NO. Petition was denied. Decision of CTA was affirmed.

The fact is that, as respondent Court of Tax Appeals has stressed, as early as 1960, the
Government already had in its hands the sum of P221,033.00 representing excess
payment. Having been paid and received by mistake, as petitioner Commissioner
subsequently acknowledged, that sum unquestionably belonged to ESSO, and the
Government had the obligation to return it to ESSO That acknowledgment of the
erroneous payment came some four (4) years afterwards in nowise negates or detracts
from its actuality. The obligation to return money mistakenly paid arises from the
moment that payment is made, and not from the time that the payee admits the
obligation to reimburse.The obligation to return money mistakenly paid arises from the
moment that payment is made, and not from the time that the payee admits the
obligation to reimburse. The obligation of the payee to reimburse an amount paid to him
results from the mistake, not from the payee’s confession of the mistake or recognition
of the obligation to reimburse.

A literal interpretation is to be rejected if it would be unjust or lead to absurd results.

Statutes should receive a sensible construction, such as will give effect to the legislative
intention and so as to avoid an unjust or absurd conclusion.

G.R. Nos. L-30793-94 July 30, 1979

MISAEL P. VERA, as Commissioner of Internal Revenue, and THE FAIR TRADE

BOARD, petitioners,
vs.
HON. SERAFIN R. CUEVAS, as Judge of the Court of First Instance of Manila,
Branch IV, INSTITUTE OF EVAPORATED FILLED MILK MANUFACTURERS OF
THE PHILIPPINES, INC., CONSOLIDATED PHILIPPINES, INC., GENERAL MILK
COMPANY (PHIL.) INC., and MILK INDUSTRIES, INC., respondents.

FACTS:
This is a petition for certiorari and prohibition with preliminary injunction, seeking to set
aside the writs of preliminary injunction issued in Civil Cases Nos 52276 and 52383 of
the Court of First Instance of Manila. The first case is an action for injunction to restrain
the Commissioner of Internal Revenue from requiring the respondent Filled Milk
Companies to print on the labels of their products the words "This milk is not suitable for
nourishment for infants less than one year of age" or other equivalent words, as
required in Section 169 of the Tax Code.The second case is an action to enjoin
proceedings in the Fair Trade Board on the complaints against Filled Milk Companies
for mislabelling and/or misbranding of milk products.

ISSUE:
Whether or no milk are required Companies to print on the labels of their products the
words "This milk is not suitable for nourishment for infants less than one year of age" or
other equivalent words, as required in Section 169 of the Tax Code.

RULING:
Restraining the defendant, Commissioner of internal Revenue, his agents, or
employees from requiring plaintiffs to print on the labels of their filled milk products the
words: "This milk is not suitable for nourishment for infants less than one year of age" or
words with equivalent import and declaring as null and void and without authority in law.
restraining perpetually the respondent Fair Trade Board, its agents or employees from
continuing in the investigation of the complaints against petitioners docketed as FTB I.S.
No. 2, or any charges related to the manufacture or sale by the petitioners of their filled
milk products and declaring as null the proceedings so far undertaken by the
respondent Board on said complaints.

Centeno vs. Pernillos and People (G.R. No. 113092. September 01, 1994)
MARTIN CENTENO, petitioner, 
vs.
HON. VICTORIA VILLALON-PORNILLOS, Presiding Judge of the Regional Trial
Court of Malolos, Bulacan, Branch 10, and THE PEOPLE OF THE
PHILIPPINES, respondents.
Santiago V. Marcos, Jr. for petitioner.
Ponente: REGALADO J.
FACTS:
Respondent Judge filed a case against petitioner in violation of Presidential Decree No.
1564, or the Solicitation Permit Law, before the Municipal Trial Court (criminal case).
Petitioner filed a motion to quash the information on the ground that the facts alleged
therein do not constitute an offense, claiming that Presidential Decree No. 1564 only
covers solicitations made for charitable or public welfare purposes, but not those made
for a religious purpose such as the construction of a chapel. This was denied by the trial
court, and petitioner’s motion for reconsideration having met the same fate, trial on the
merits ensued. Trial court found petitioner guilty beyond reasonable doubt. The motion
for reconsideration of the decision was denied by the court.
ISSUE:
Whether or not the phrase “charitable purposes” should be construed in its broadest
sense so as to include a religious purpose.
HELD:
NO. Decision appealed was reversed and set aside. Petitioner was acquitted.
RATIO:
[S]olicitation for religious purposes may be subject to proper regulation by the State in
the exercise of police power. However, in the case at bar, considering that solicitations
intended for a religious purpose are not within the coverage of Presidential Decree No.
1564, as earlier demonstrated, petitioner cannot be held criminally liable therefor.
[I]t is a well-entrenched rule that penal laws are to be construed strictly against the State
and liberally in favor of the accused. They are not to be extended or enlarged by
implications, intendments, analogies or equitable considerations.
[I]t is an elementary rule of statutory construction that the express mention of one
person, thing, act, or consequence excludes all others. This rule is expressed in the
familiar maxim “expressio unius est exclusio alterius.” Where a statute, by its terms, is
expressly limited to certain matters, it may not, by interpretation or construction, be
extended to others. The rule proceeds from the premise that the legislature would not
have made specified enumerations in a statute had the intention been not to restrict its
meaning and to confine its terms to those expressly mentioned.

People vs. Walpan Ladjaalam y Milapil (G.R. No. 136149-51. September 19, 2000)
PEOPLE OF THE PHILIPPINES, appellee,
vs. 
WALPAN LADJAALAM y MIHAJIL alias “WARPAN,” appellant.
Ponente: PANGANIBAN
FACTS:
The trial court found the appellant guilty of maintaining a drug den, an offense for which
was sentenced to reclusion perpetua. Appelant’s guilt was established by the testimony
of Prosecution Witness , who himself had used the extension house of appellant as a
drug den on several occasions, including the time of the raid. The former’s testimony
was corroborated by all the raiding police officers who testified before the court.  That
appelant did not deny ownership of the house and its extension lent credence to the
prosecution’s story.
The trial court also convicted appellant of direct assault with multiple counts of
attempted homicide. It found that “[t]he act of the accused [of] firing an M14 rifle [at] the
policemen[,] who were about to enter his house to serve a search warrant x x x”
constituted such complex crime. Aside from finding appellant guilty of direct assault with
multiple attempted homicide, the trial court convicted him also of the separate offense of
illegal possession of firearms under PD 1866, as amended by RA 8294, and sentenced
him to 6 years of prision correccional to 8 years of prision mayor.
ISSUE:
Whether or not appellant can be convicted separately of illegal possession of firearms
after using said firearm in the commission of another crime.
HELD:
NO. The appealed Decision was affirmed with modifications. Appellant is found guilty
only of two offenses: (1) direct assault and multiple attempted homicide with the use of
a weapon and (2) maintaining a drug den.
RATIO:
The law is clear: the accused can be convicted of simple illegal possession of firearms,
provided that “no other crime was committed by the person arrested.” If the intention of
the law in the second paragraph were to refer only to homicide and murder, it should
have expressly said so, as it did in the third paragraph. Verily, where the law does not
distinguish, neither should [the courts].
The Court is aware that this ruling effectively exonerates appellant of illegal possession
of an M-14 rifle, an offense which normally carries a penalty heavier than that for direct
assault. While the penalty for the first is prision mayor, for the second it is only prision
correccional. Indeed, the accused may evade conviction for illegal possession of
firearms by using such weapons in committing an even lighter offense, like alarm and
scandal or slight physical injuries, both of which are punishable by arresto menor. This
consequence, however, necessarily arises from the language of RA 8294, whose
wisdom is not subject to the Court’s review. Any perception that the result reached here
appears unwise should be addressed to Congress. Indeed, the Court has no discretion
to give statutes a new meaning detached from the manifest intendment and language of
the legislature. [The Court’s] task is constitutionally confined only to applying the law
and jurisprudence to the proven facts, and [this Court] have done so in this case.

CASE DIGEST: COMMISSIONER OF INTERNAL REVENUE, Petitioner, vs. LA

TONDENA DISTILLERS, INC. (LTDI [now GINEBRA SAN MIGUEL],
Respondent. (G.R. No. 175188; July 15, 2015)

PRINCIPLE: The transfer of real property to a surviving corporation pursuant to a

merger is not subject to Documentary Stamp Tax (DST).

FACTS:
La Tondeña (LT) entered into a merger with SBC, SMCJI and MBWC. So, the assets
and liabilities of the absorbed corporations were transferred to LT as surviving
corporation.

LT requested from the BIR a confirmation of the tax-free nature of the merger
process. BIR confirmed that no gain or loss shall be recognized by the absorbed
corporations as transferors of all assets and liabilities. Hence, tax-free. However, BIR
insisted that the transfer of assets, such as real properties, shall be subject to DST

BIR posits that DST is levied on the exercise of the privilege to convey real property
regardless of the manner of conveyance. LT, on the other hand, contends that DST is
imposed only on conveyances, deeds, instruments, or writing, where realty sold shall be
conveyed to a purchaser or buyer.
ISSUE:
Is transfer of real property to a surviving corporation pursuant to merger subject to
DST?

HELD:
No, it is not subject to DST. The DST law under the Tax Code does not include the
transfer of real property from one corporation to another pursuant to a merger.

In a merger, the real properties are not deemed "sold" to the surviving corporation and
the latter could not be considered as "purchaser" of realty since the real properties
subject of the merger were merely absorbed by the surviving corporation by operation of
law and these properties are deemed automatically transferred to and vested in the
surviving corporation without further act or deed. Therefore, the transfer of real
properties to the surviving corporation in pursuance of a merger is not subject to
documentary stamp tax.
Republic of the Philippines vs. IAC and Spouses Pastor (G.R. No. 69344. April
26, 1991)
REPUBLIC OF THE PHILIPPINES, petitioner,
vs.
INTERMEDIATE APPELLATE COURT and SPOUSES ANTONIO and CLARA
PASTOR, respondents.
Roberto L. Bautista for private respondents.
Ponente: GRIÑO-AQUINO
FACTS:
Republic of the Philippines, through the Bureau of Internal Revenue, commenced an
action in the Court of First Instance (now Regional Trial Court), to collect from the
spouses Antonio Pastor and Clara Reyes-Pastor deficiency income taxes for the years
1955 to 1959 with surcharge and monthly interest, and costs. The Pastors filed a motion
to dismiss the complaint, but the motion was denied. They filed an answer admitting
there was an assessment against them for income tax deficiency but denying liability
therefor. They contended that they had availed of the tax amnesty under P.D.’s Nos. 23,
213 and 370 and had paid the corresponding amnesty taxes amounting of their reported
untaxed income under P.D. 23, and a final payment on October 26, 1973 under P.D.
370 evidenced by the Government’s Official Receipt. The trial court held that the
respondents had settled their income tax deficiency for the years 1955 to 1959, not
under P.D. 23 or P.D. 370, but under P.D. 213.
The Government appealed to the Intermediate Appellant Court, alleging that the private
respondents were not qualified to avail of the tax amnesty under P.D. 213 for the
benefits of that decree are available only to persons who had no pending assessment
for unpaid taxes, as provided in Revenue Regulations Nos. 8-72 and 7-73. Since the
Pastors did in fact have a pending assessment against them, they were precluded from
availing of the amnesty granted in P.D.’s Nos. 23 and 213. The Government further
argued that “tax exemptions should be interpreted strictissimi juris against the taxpayer.
The Intermediate Appellate Court (now Court of Appeals) rendered a decision
dismissing the Government’s appeal and holding that the payment of deficiency income
taxes by the Pastors under PD. No. 213, and the acceptance thereof by the
Government, operated to divest the latter of its right to further recover deficiency income
taxes from the private respondents pursuant to the existing deficiency tax assessment
against them.
ISSUE:
Whether or not the tax amnesty payments made by the private respondents bar an
action for recovery of deficient income taxes under P.D.’s Nos. 23, 213 and 370.
HELD:
YES. Petition for review is denied.
RATIO:
[T]he Government is estopped from collecting the difference between the deficiency tax
assessment and the amount already paid by them as amnesty tax. The finding of the
appellate court that the deficiency income taxes were paid by the Pastors, and accepted
by the Government, under P.D. 213, granting amnesty to persons who are required by
law to file income tax returns but who failed to do so, is entitled to the highest respect
and may not be disturbed except under exceptional circumstances
The rule is that in case of doubt, tax statutes are to be construed strictly against the
Government and liberally in favor of the taxpayer strictisimi juris for taxes, being
burdens, are not to be presumed beyond what the applicable statute (in this case P.D.
213) expressly and clearly declares.

Acting Commissioner of Customs v. Manila Electric Company, 77 SCRA 469

ARTICLE 10. IN CASE OF DOUBT IN THE INTERPRETATION AND APPLICATION
OF LAWS, IT IS PRESUMED THAT THE LAWMAKING BODY INTENDED RIGHT
AND JUSTICE TO PREVAIL.
FACTS:
The Acting Commissioner of Customs, the late Norberto Romualdez, Jr., said that the
private respondent Manila Electric Company was not exempt for shipment of insulating
oil from the payment of special import tax under Republic Act No. 1394.
The Meralco claimed that they were exempted from paying tax shipment of insulating oil
because under  the R.A 1364 of Sec. 6 implied that the exemption from said tax 
equipment and spare parts for use in industries and also exempts insulators from all
taxes of whatever kind and nature. The grantee shall be liable to pay the same taxes
upon its real estate, buildings, plant (not including poles, wires, transformers, and
insulators), machinery and personal property as other persons are required by law to
pay but in consideration of the franchise that the above “exempts it from all taxes of
whatever nature, and by whatever authority, with respect to its insulators in
consideration for the payment of the percentage tax on its gross earnings.”
ISSUE :
Does the insulating oils can be construed as insulator?
RULING:
Yes, because the insulating oils imported by petitioner are ‘used for cooling as well as
for insulating and when used in oil circuit breakers, they are ‘required to maintain
insulation.
The decision appealed from not being in accordance with law, the same is hereby
reversed. Respondent is ordered to refund to petitioner the sum of P995.00 within thirty
days from the date this decision becomes final, without pronouncement as to costs.” It
was therein made clear that private respondent was not liable for the payment of the
special import tax under Republic Act No. 1394.
Such a ruling was reaffirmed in subsequent decisions. It does not mean, however, that
petitioner should prevail, for as was unequivocally set forth in the leading ease
of Republic Flour Mills v. Commissioner of Internal Revenue, this Court speaking
through Justice J.B.L. Reyes. “It is true that in the construction of tax statutes tax
exemptions (and deductions are of this nature) are not favored in the law, and are
construed strictissimi juris against the taxpayer. However, it is equally a recognized
principle that where the provision of the law is clear and unambiguous, so that there is
no occasion for the court’s seeking the legislative intent, the law must be taken as it is,
devoid of judicial addition or subtraction.
The petition for review is dismissed and no costs.

[CASE DIGEST] MISAMIS ORIENTAL ASSOC. v. DOF (G.R. No. 108524)

November 10, 1994

Ponente: Mendoza, J.

FACTS:

Petitioner is engaged in the buying and selling of copra in Misamis Oriental. The
petitioner questions Revenue Memorandum Circular 47-91 issued by the respondent, in
which copra was classified as agricultural non-food product effectively removing copra
as one of the exemptions under Section 103 of the NIRC.

Section 103a of the NIRC states that the sale of agricultural non-food products in their
original state is exempt from VAT only if the sale is made by the primary producer or
owner of the land from which the same are produced and not by any other person or
entity. Section 103b states the sale of agricultural food products in their original state is
exempt from VAT at all stages of production or distribution regardless of who the seller
is - which the petitioner enjoys. The reclassification had the effect of denying to the
petitioner this exemption when copra was classified as an agricultural food product.

Petitioner filed a motion for prohibition.

ISSUE: Whether the Circular is valid.

RULING:
Yes. The Court first stated that the CIR gave the circular a strict construction consistent
with the rule that tax exemptions must be strictly construed against the taxpayer and
liberally in favor of the state.

The Court also stated that the Circular is not discriminatory and in violation of the equal
protection clause. Petitioner likened copra farmers / producers, who are exempted from
VAT and copra traders, which the Court disagreed.

Lastly, petitioners argued that the Circular was counterproductive which the Court
answers that it is a question of wisdom or policy which should be addressed to
respondent officials and to Congress.

RESINS V AUDITOR GENERAL
L – 17888 | October 29, 1968 | J. Fernando
 
Facts:
Petitioner Resins Inc, as in Casco v. Gimenez, seeks a refund from respondent Central
Bank on the claim that it was exempt from the margin fee under RA 2609 for the
importation of urea and formaldehyde, as separate units, used for the production of
synthetic glue, of which it was a manufacturer.
Since the specific language of the Act speak of “urea formaldehyde” and petitioner
admittedly did import urea and formaldehyde separately, it can be exempted if the law
was construed to read “urea and formaldehyde.”
 
Issue: W/N Resin’s contention is with merit
 
Held:
No. “Urea formaldehyde” is clearly a finished product, which is patently distinct from
“urea” and “formaldehyde” as separate articles. Resins contend that the approved
Congress bill contained the conjunction “and” and that Congress intended to exempt
urea and formaldehyde separately, citing statements made on the floor of the Senate.
Said individual statements do not necessarily reflect the view of the Senate, much less
of the House of Representatives. It is also well settled that the enrolled bill is conclusive
upon the courts. If there has been any mistake in the printing of the bill, the remedy is
by amendment or curative language not by judicial decree.
Additionally, refund partakes of a nature of an exemption, it cannot be allowed unless
granted in the most explicit and categorical language. The Court has held that
exemption from taxation is not favored and never presumed, so that if granted it must
be strictly construed against the taxpayer (strictissimi juris). Petition denied.

Ong Chia vs. Republic of the Philippines (G.R. No. 127240. March, 27, 2000)
ONG CHIA, petitioner,
vs.
REPUBLIC OF THE PHILIPPINES and THE COURT OF APPEALS, respondents.
Ponente: MENDOZA
FACTS:
The trial court granted the petition and admitted petitioner to Philippine citizenship. The
State, however, through the Office of the Solicitor General, among others for having
failed to state all his former placer of residence in violation of C.A. No. 473, §7 and to
support his petition with the appropriate documentary evidence. Petitioner admits that
he failed to mention said address in his petition, but argues that since the Immigrant
Certificate of Residence containing it had been fully published, with the petition and the
other annexes, such publication constitutes substantial compliance with §7.
ISSUE:
Whether or not the documents annexed by the State to its appelant’s brief without
having been presented and formally offered as evidence under Rule 132, Section 34 of
the Revised Rules on Evidence justified the reversal of of the Trial Court’s decision.
HELD:
YES. Decision of the Court of Appeals was affirmed. Petition was denied.
RATIO:
It is settled that naturalization laws should be rigidly enforced and strictly construed in
favor of the government and against the applicant. [T]he rule of strict application of the
law in naturalization cases defeat petitioner’s argument of “substantial compliance” with
the requirement under the Revised Naturalization Law.
[T]he reason for the rule prohibiting the admission of evidence which has not been
formally offered is to afford the opposite party the chance to object to their admissibility.
Petitioner cannot claim that he was deprived of the right to object to the authenticity of
the documents submitted to the appellate court by the State.