FIRST DIVISION
BPI LEASING
CORPORATION,
Petitioner,
G.R.
No.
127624
November 18, 2003
-versus-
THE HONORABLE
COURT
OF APPEALS,
COURT OF TAX APPEAL
AND
COMMISSIONER OF
INTERNAL REVENUE,
Respondents.
D E C I S I O N
AZCUNA,
J.:
The present Petition
for Review on Certiorari assails the Decision[1]
of the Court of Appeals in CA-G.R. SP No. 38223 and its subsequent
Resolution[2]
denying the Motion for Reconsideration. The assailed decision and
resolution
affirmed the decision of the Court of Tax Appeals (CTA) which denied
petitioner
BPI Leasing Corporation's (BLC) claim for tax refund in CTA Case No.
4252.chanrobles virtuallaw libraryred
The facts are not disputed.cralaw:red
BLC is a corporation
engaged in the business of leasing properties.[3]
For the calendar year 1986, BLC paid the Commissioner of Internal
Revenue
(CIR) a total of P1,139,041.49 representing 4% "contractor's percentage
tax" then imposed by Section 205 of the National Internal Revenue Code
(NIRC), based on its gross rentals from equipment leasing for the said
year amounting to P27,783,725.42.[4]chanrobles virtuallaw libraryred
On November 10, 1986,
the CIR issued Revenue Regulation 19-86. Section 6.2 thereof provided
that
finance and leasing companies registered under Republic Act 5980 shall
be subject to gross receipt tax of 5%-3%-1% on actual income earned.
This
means that companies registered under Republic Act 5980, such as BLC,
are
not liable for "contractor's percentage tax" under Section 205 but are,
instead, subject to "gross receipts tax" under Section 260 (now Section
122) of the NIRC. Since BLC had earlier paid the aforementioned
"contractor's
percentage tax," it re-computed its tax liabilities under the "gross
receipts
tax" and arrived at the amount of P361,924.44.chanrobles virtuallaw libraryred
On April 11, 1988, BLC
filed a claim for a refund with the CIR for the amount of P777,117.05,
representing the difference between the P1,139,041.49 it had paid as
"contractor's
percentage tax" and P361,924.44 it should have paid for "gross receipts
tax."[5]
Four days later, to stop the running of the prescriptive period for
refunds,
petitioner filed a petition for review with the CTA.[6]chanrobles virtuallaw libraryred
In a decision dated
May 13, 1994,[7]
the CTA dismissed the petition and denied BLC's claim of refund. The
CTA
held that Revenue Regulation 19-86, as amended, may only be applied
prospectively
such that it only covers all leases written on or after January 1,
1987,
as stated under Section 7 of said revenue regulation:chanrobles virtuallaw libraryred
Sec. 7.
Effectivity.-
These regulations shall take effect on January 1, 1987 and shall be
applicable
to all leases written on or after the said date.
The CTA ruled that,
since
BLC's rental income was all received prior to 1986, it follows that
this
was derived from lease transactions prior to January 1, 1987, and
hence,
not covered by the revenue regulation.chanrobles virtuallaw libraryred
A motion for reconsideration
of the CTA's decision was filed, but was denied in a resolution dated
July
26, 1995.[8]
BLC then appealed the case to the Court of Appeals, which issued the
aforementioned
assailed decision and resolution.[9]
Hence, the present petition.chanrobles virtuallaw libraryred
In seeking to reverse
the denial of its claim for tax refund, BLC submits that the Court of
Appeals
and the CTA erred in not ruling that Revenue Regulation 19-86 may be
applied
retroactively so as to allow BLC's claim for a refund of P777,117.05.chanrobles virtuallaw libraryred
Respondents, on the
other hand, maintain that the provision on the date of effectivity of
Revenue
Regulation 19-86 is clear and unequivocal, leaving no room for
interpretation
on its prospective application. In addition, respondents argue that the
petition should be dismissed on the ground that the
Verification/Certification
of Non-Forum Shopping was signed by the counsel of record and not by
BLC,
through a duly authorized representative, in violation of Supreme Court
Circular 28-91.chanrobles virtuallaw libraryred
In a resolution dated
March 29, 2000,[10]
the petition was given due course and the Court required the parties to
file their respective Memoranda. Upon submission of the Memoranda, the
issues in this case were delineated, as follows:[11]chanrobles virtuallaw libraryred
WHETHER THE
INSTANT
PETITION FOR REVIEW ON CERTIORARI SUBSTANTIALLY COMPLIES WITH SUPREME
COURT
CIRCULAR 28-91.
WHETHER REVENUE
REGULATION
19-86, AS AMENDED, IS LEGISLATIVE OR INTERPRETATIVE IN NATURE.
WHETHER REVENUE
REGULATION
19-86, AS AMENDED, IS PROSPECTIVE OR RETROACTIVE IN ITS APPLICATION.
WHETHER
PETITIONER,
AS FOUND BY THE COURT OF APPEALS, FAILED TO MEET THE QUANTUM OF
EVIDENCE
REQUIRED IN REFUND CASES.chanrobles virtuallaw libraryred
WHETHER
PETITIONER,
AS FOUND BY THE COURT OF APPEALS, IS ESTOPPED FROM CLAIMING ITS PRESENT
REFUND.
As to the first issue,
the Court agrees with respondents' contention that the petition should
be dismissed outright for failure to comply with Supreme Court Circular
28-91, now incorporated as Section 2 of Rule 42 of the Rules
of Court. The records plainly show, and this has not been denied by
BLC, that the certification was executed by counsel who has not been
shown
to have specific authority to sign the same for BLC.chanrobles virtuallaw libraryred
In BA Savings Bank v.
Sia,[12]
it was held that the certificate of non-forum shopping may be signed,
for
and on behalf of a corporation, by a specifically authorized lawyer who
has personal knowledge of the facts required to be disclosed in such
document.
This ruling, however, does not mean that any lawyer, acting on behalf
of
the corporation he is representing, may routinely sign a certification
of non-forum shopping. The Court emphasizes that the lawyer must be
"specifically
authorized" in order validly to sign the certification.chanrobles virtuallaw libraryred
Corporations have no
powers except those expressly conferred upon them by the Corporation
Code
and those that are implied by or are incidental to its existence. These
powers are exercised through their board of directors and/or duly
authorized
officers and agents. Hence, physical acts, like the signing of
documents,
can be performed only by natural persons duly authorized for the
purpose
by corporate bylaws or by specific act of the board of directors.[13]
The records are bereft
of the authority of BLC's counsel to institute the present petition and
to sign the certification of non-forum shopping. While said counsel may
be the counsel of record for BLC, the representation does not vest upon
him the authority to execute the certification on behalf of his client.
There must be a resolution issued by the board of directors that
specifically
authorizes him to institute the petition and execute the certification,
for it is only then that his actions can be legally binding upon BLC.chanrobles virtuallaw libraryred
BLC however insists
that there was substantial compliance with SC Circular No. 28-91
because
the verification/certification was issued by a counsel who had full
personal
knowledge that no other petition or action has been filed or is pending
before any other tribunal. According to BLC, said counsel's law firm
has
handled this case from the very beginning and could very well attest
and/or
certify to the absence of an instituted or pending case involving the
same
or similar issues.cralaw:red
The argument of substantial
compliance deserves no merit, given the Court's ruling in Mendigorin v.
Cabantog:[14]
x
x
x The CA held that there was substantial compliance with
the
Rules of Court, citing Dimagiba vs. Montalvo, Jr. (202 S CRA 641) to
the
effect that a lawyer who assumes responsibility for a client's cause
has
the duty to know the entire history of the case, especially if any
litigation
is commenced. This view, however, no longer holds authoritative value
in
the light of Digital Microwave Corporation vs. CA [328 SCRA 286], where
it was held that the reason the certification against forum shopping is
required to be accomplished by petitioner himself is that only the
petitioner
himself has actual knowledge of whether or not he has initiated similar
actions or proceedings in other courts or tribunals. Even counsel of
record
may be unaware of such fact. To our mind, this view is more in accord
with
the intent and purpose of Revised Circular No. 28-91.
Clearly, therefore, the
present petition lacks the proper certification as strictly required by
jurisprudence and the Rules
of Court.
Even if the court were
to ignore the aforesaid procedural infirmity, a perusal of the
arguments
raised in the petition, indicates that a resolution on the merits would
nevertheless yield the same outcome.chanrobles virtuallaw libraryred
BLC attempts to convince
the Court that Revenue Regulation 19-86 is legislative rather than
interpretative
in character and hence, should retroact to the date of effectivity of
the
law it seeks to interpret.chanrobles virtuallaw libraryred
Administrative issuances
may be distinguished according to their nature and substance:
legislative
and interpretative. A legislative rule is in the matter of subordinate
legislation, designed to implement a primary legislation by providing
the
details thereof. An interpretative rule, on the other hand, is designed
to provide guidelines to the law which the administrative agency is in
charge of enforcing.[15]chanrobles virtuallaw libraryred
The Court finds the
questioned revenue regulation to be legislative in nature. Section 1 of
Revenue Regulation 19-86 plainly states that it was promulgated
pursuant
to Section 277 of the NIRC.
Section 277 (now Section 244) is an express grant of authority to the
Secretary
of Finance to promulgate all needful rules and regulations for the
effective
enforcement of the provisions of the NIRC.
In Paper Industries Corporation of the Philippines v. Court of Appeals,[16]
the Court recognized that the application of Section 277 calls for none
other than the exercise of quasi-legislative or rule-making authority.
Verily, it cannot be disputed that Revenue Regulation 19-86 was issued
pursuant to the rule-making power of the Secretary of Finance, thus
making
it legislative, and not interpretative as alleged by BLC.chanrobles virtuallaw libraryred
BLC further posits that,
assuming the revenue regulation is legislative in nature, it is invalid
for want of due process as no prior notice, publication and public
hearing
attended the issuance thereof. To support its view, BLC cited CIR v.
Fortune
Tobacco, et al.,[17]
wherein the Court nullified a revenue memorandum circular which
reclassified
certain cigarettes and subjected them to a higher tax rate, holding it
invalid for lack of notice, publication and public hearing.cralaw:red
The doctrine enunciated
in Fortune Tobacco, and reiterated in CIR v. Michel J. Lhuillier
Pawnshop,
Inc.,[18]
is that when an administrative rule goes beyond merely providing for
the
means that can facilitate or render less cumbersome the implementation
of the law and substantially increases the burden of those governed, it
behooves the agency to accord at least to those directly affected a
chance
to be heard and, thereafter, to be duly informed, before the issuance
is
given the force and effect of law. In Lhuillier and Fortune Tobacco,
the
Court invalidated the revenue memoranda concerned because the same
increased
the tax liabilities of the affected taxpayers without affording them
due
process. In this case, Revenue Regulation 19-86 would be beneficial to
the taxpayers as they are subjected to lesser taxes. Petitioner, in
fact,
is invoking Revenue Regulation 19-86 as the very basis of its claim for
refund. If it were invalid, then petitioner all the more has no right
to
a refund. chanrobles virtuallaw libraryred
After upholding the
validity of Revenue Regulation 19-86, the Court now resolves whether
its
application should be prospective or retroactive.cralaw:red
The principle is well
entrenched that statutes, including administrative rules and
regulations,
operate prospectively only, unless the legislative intent to the
contrary
is manifest by express terms or by necessary implication.[19]
In the present case, there is no indication that the revenue regulation
may operate retroactively. Furthermore, there is an express provision
stating
that it "shall take effect on January 1, 1987," and that it "shall be
applicable
to all leases written on or after the said date." Being clear on its
prospective
application, it must be given its literal meaning and applied without
further
interpretation.[20]
Thus, BLC is not in a position to invoke the provisions of Revenue
Regulation
19-86 for lease rentals it received prior to January 1, 1987.chanrobles virtuallaw libraryred
It is also apt to add
that tax refunds are in the nature of tax exemptions. As such, these
are
regarded as in derogation of sovereign authority and are to be strictly
construed against the person or entity claiming the exemption. The
burden
of proof is upon him who claims the exemption and he must be able to
justify
his claim by the clearest grant under Constitutional or statutory law,
and he cannot be permitted to rely upon vague implications.[21]
Nothing that BLC has raised justifies a tax refund.chanrobles virtuallaw libraryred
It is not necessary
to rule on the remaining issues.cralaw:red
WHEREFORE, the petition
for review is hereby DENIED, and the assailed decision and resolution
of
the Court of Appeals are AFFIRMED. No pronouncement as to costs.chanrobles virtuallaw libraryred
SO ORDERED.chanrobles virtuallaw libraryred
Davide, Jr., C.J., Panganiban,
Ynares-Santiago and Carpio, JJ.,
concur.chan
robles virtual law library
____________________________
Endnotes:
[1]
Rollo, pp. 28–36.chanrobles virtuallaw libraryred
[2]
Id., pp. 37–38.chanrobles virtuallaw libraryred
[3]
Id., p. 9.chanrobles virtuallaw libraryred
[4]
Id., pp. 89–96.chanrobles virtuallaw libraryred
[5]
Id., pp. 97–98.chanrobles virtuallaw libraryred
[6]
Id., pp. 87–88.chanrobles virtuallaw libraryred
[7]
Id., pp. 47–57.chanrobles virtuallaw libraryred
[8]
Id., pp. 70–78 & 46–57.chanrobles virtuallaw libraryred
[9]
Id., pp. 79–86.chanrobles virtuallaw libraryred
[10]
Id., p. 202.chanrobles virtuallaw libraryred
[11]
BLC's Memorandum dated July 20, 2000, Rollo, p. 236.
[12]
336 SCRA 484 (2000).chanrobles virtuallaw libraryred
[13]
Yao Ka Sin Trading v. Court of Appeals, 209 SCRA 763 (1992).
[14]
G.R. No. 136449, August 22, 2002.chanrobles virtuallaw libraryred
[15]
Misamis Oriental Association of Coco Traders, Inc. v. Department of
Finance
Secretary, 238 SCRA 63 (1994).
[16]
250 SCRA 434 (1995).chanrobles virtuallaw libraryred
[17]
261 SCRA 236 (1996).chanrobles virtuallaw libraryred
[18]
G.R. No. 150947, July 15, 2003.chanrobles virtuallaw libraryred
[19]
Republic v. Sandiganbayan, 269 SCRA 316 (1997), citing Lee v. Rodil,
175
SCRA 100 (1989) and State Prosecutors v. Muro, 236 SCRA 505 (1994);
Al-Amanah
Islamic Investment Bank of the Philippines v. Civil Service Commission,
207 SCRA 801 (1992).chanrobles virtuallaw libraryred
[20]
Bustamante v. NLRC, 265 SCRA 61 (1996).chanrobles virtuallaw libraryred
[21]
CIR v. Procter & Gamble Phil., 204 SCRA 377 (1991).chanrobles virtuallaw libraryred |