SECOND DIVISION
SAN
PABLO MANUFACTURING G.R. No. 147749
CORPORATION,
Petitioner,
Present:
PUNO,
J., Chairperson,
SANDOVAL-GUTIERREZ,
- v e r s u s - CORONA,
AZCUNA
and
GARCIA, JJ.
COMMISSIONER
OF INTERNAL
REVENUE ,*
Respondent. Promulgated:
June 22, 2006
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D E C I S I O N
CORONA, J.:
In this petition for review under
Rule 45 of the Rules of Court, San Pablo Manufacturing Corporation (SPMC)
assails the July 19, 2000[1]
and April 3, 2001 resolutions of the Court of Appeals in CA-G.R. SP No. 59139.
SPMC is a domestic corporation
engaged in the business of milling, manufacturing and exporting of coconut oil
and other allied products. It was assessed and ordered to pay by the
Commissioner of Internal Revenue the total amount of P8,182,182.85[2]
representing deficiency miller’s tax and manufacturer’s sales tax,[3]
among other deficiency taxes,[4]
for taxable year 1987. The deficiency miller’s tax was imposed on SPMC’s sales
of crude oil to United Coconut Chemicals, Inc. (UNICHEM) while the deficiency
sales tax was applied on its sales of corn and edible oil as manufactured
products.
SPMC opposed the assessments but the
Commissioner denied its protest. SPMC appealed the denial of its protest to the
Court of Tax Appeals (CTA) by way of a petition for review docketed as CTA Case
No. 5423.
In its March 10, 2000 decision, the
CTA cancelled SPMC’s liability for deficiency manufacturer’s tax on the sales
of corn and edible oils but upheld the Commissioner’s assessment for the deficiency
miller’s tax. SPMC moved for the partial reconsideration of the CTA affirmation
of the miller’s tax assessment but it was denied.
SPMC elevated the case to the Court
of Appeals via a petition for review of the CTA decision insofar as it upheld
the deficiency miller’s tax assessment. In its July 19, 2000 resolution, the
appellate court dismissed the petition on the principal ground[5]
that the verification attached to it was signed merely by SPMC’s chief
financial officer ― without the corporate secretary’s certificate, board
resolution or power of attorney authorizing him to sign the verification and
certification against forum shopping. SPMC sought a reconsideration of the
resolution but the same was denied. Hence, this petition.
Did the Court of Appeals err when it
dismissed SPMC’s appeal?
SPMC contends that its appeal should
have been given due course since it substantially complied with the
requirements on verification and certification against forum shopping. It
insists on the liberal application of the rules because, on the merits of the
petition, SPMC was not liable for the 3% miller’s tax. It maintains that the
crude oil which it sold to UNICHEM was actually exported by UNICHEM as an
ingredient of fatty acid and glycerine, hence, not subject to miller’s tax
pursuant to Section 168 of the 1987 Tax Code.
For SPMC, Section 168 of the 1987 Tax
Code contemplates two exemptions from the miller’s tax: (a) the milled products
in their original state were actually exported by the miller himself or by
another person, and (b) the milled products sold by the miller were actually
exported as an ingredient or part of any manufactured article by the buyer or
manufacturer of the milled products. The exportation may be effected by
the miller himself or by the buyer or manufacturer of the milled products. Since
UNICHEM, the buyer of SPMC’s milled products, subsequently exported said
products, SPMC should be exempted from the miller’s tax.
The petition must fail.
Under
Rule 43, Section 5 of the Rules of Court, appeals from the CTA and
quasi-judicial agencies to the Court of Appeals should be verified. A pleading
required to be verified which lacks proper verification shall be treated as an
unsigned pleading.[6]
Moreover, a petition for review under
Rule 43 requires a sworn certification against forum shopping.[7]
Failure of the petitioner to comply with any of the requirements of a petition
for review is sufficient ground for the dismissal of the petition.[8]
A corporation may exercise the powers
expressly conferred upon it by the Corporation Code and those that are implied
by or are incidental to its existence through its board of directors and/or
duly authorized officers and agents.[9]
Hence, physical acts, like the signing of documents, can be performed only by
natural persons duly authorized for the purpose by corporate by-laws or by
specific act of the board of directors.[10]
In the absence of authority from the board of directors, no person, not even
the officers of the corporation, can bind the corporation.[11]
SPMC’s petition in the Court of
Appeals did not indicate that the person who signed the
verification/certification on non-forum shopping was authorized to do so. SPMC
merely relied on the alleged inherent power of its chief financial officer to
represent SPMC in all matters regarding the finances of the corporation
including, among others, the filing of suits to defend or protect it from
assessments and to recover erroneously paid taxes. SPMC even admitted that no
power of attorney, secretary’s certificate or board resolution to prove the
affiant’s authority was attached to the petition. Thus, the petition was not
properly verified. Since the petition lacked proper verification, it was to be
treated as an unsigned pleading subject to dismissal.[12]
In PET Plans, Inc. v. Court of
Appeals,[13]
the Court upheld the dismissal by the Court of Appeals of the petition on the
ground that the verification and certification against forum shopping was
signed by PET Plans, Inc.’s first vice-president for legal affairs/corporate
secretary without any certification that he was authorized to sign in behalf of
the corporation.
In BPI Leasing Corporation v.
Court of Appeals,[14]
the Court ruled that the petition should be dismissed outright on the ground
that the verification/certification against forum shopping was signed by BPI
Leasing Corporation’s counsel with no specific authority to do so. Since the
counsel was purportedly acting for the corporation, he needed a resolution
issued by the board of directors that specifically authorized him to institute
the petition and execute the certification.
Only then would his actions be legally binding on the corporation.[15]
In this case, therefore, the
appellate court did not commit an error when it dismissed the petition on the
ground that it was signed by a person who had not been issued any authority by
the board of directors to represent the corporation.
Neither can the Court subscribe to
SPMC’s claim of substantial compliance or to its plea for a liberal application
of the rules. Save for the most persuasive of reasons, strict compliance with
procedural rules is enjoined to facilitate the orderly administration of
justice.[16]
Substantial compliance will not suffice in a matter involving strict observance
such as the requirement on non-forum shopping,[17]
as well as verification. Utter disregard of the rules cannot justly be
rationalized by harping on the policy of liberal construction.[18]
But even if the fatal procedural
infirmity were to be disregarded, the petition must still fail for lack of
merit.
As the CTA correctly ruled, SPMC’s
sale of crude coconut oil to UNICHEM was subject to the 3% miller’s tax.
Section 168 of the 1987 Tax Code provided:
Sec. 168. Percentage tax upon proprietors or
operators of rope factories, sugar central mills, coconut oil mills, palm oil
mills, cassava mills and desiccated coconut factories. Proprietors or operators of rope factories,
sugar central and mills, coconut oil mills, palm oil mills, cassava mills and
desiccated coconut factories, shall pay a tax equivalent to three percent (3%)
of the gross value in money of all the rope, sugar, coconut oil, palm oil,
cassava flour or starch, dessicated coconut, manufactured, processed or milled
by them, including the by-product of the raw materials from which said articles
are produced, processed or manufactured, such tax to be based on the actual
selling price or market value of these articles at the time they leave the
factory or mill warehouse: Provided, however, That this tax shall not apply
to rope, coconut oil, palm oil and the by-product of copra from which it is
produced or manufactured and dessicated coconut, if such rope, coconut oil,
palm oil, copra by-products and dessicated coconuts, shall be removed for
exportation by the proprietor or operator of the factory or the miller himself,
and are actually exported without returning to the Philippines, whether in
their original state or as an ingredient or part of any manufactured article or
products: Provided further, That
where the planter or the owner of the raw materials is the exporter of the
aforementioned milled or manufactured products, he shall be entitled to a tax
credit of the miller's taxes withheld by the proprietor or operator of the
factory or mill, corresponding to the quantity exported, which may be used
against any internal revenue tax directly due from him: and Provided, finally,
That credit for any sales, miller's or excise taxes paid on raw materials or
supplies used in the milling process shall not be allowed against the miller's
tax due, except in the case of a proprietor or operator of a refined sugar
factory as provided hereunder. (emphasis supplied)
The language of the exempting clause
of Section 168 of the 1987 Tax Code was clear. The tax exemption applied only
to the exportation of rope, coconut oil, palm oil, copra by-products and
dessicated coconuts, whether in their original state or as an ingredient or part
of any manufactured article or products, by the proprietor or operator of the
factory or by the miller himself.
The language of the exemption proviso
did not warrant the interpretation advanced by SPMC. Nowhere did it provide
that the exportation made by the purchaser of the materials enumerated in the
exempting clause or the manufacturer of products utilizing the said materials was
covered by the exemption. Since SPMC’s situation was not within the ambit of
the exemption, it was subject to the 3% miller’s tax imposed under Section 168
of the 1987 Tax Code.
SPMC’s proposed interpretation unduly
enlarged the scope of the exemption clause. The rule is that the exemption must
not be so enlarged by construction since the reasonable presumption is that the
State has granted in express terms all it intended to grant and that, unless
the privilege is limited to the very terms of the statute, the favor would be
intended beyond what was meant.[19]
Where the law enumerates the subject
or condition upon which it applies, it is to be construed as excluding from its
effects all those not expressly mentioned. Expressio unius est exclusio alterius.
Anything that is not included in the enumeration is excluded therefrom and a
meaning that does not appear nor is intended or reflected in the very language
of the statute cannot be placed therein.[20]
The rule proceeds from the premise that the legislature would not have made
specific enumerations in a statute if it had the intention not to restrict its
meaning and confine its terms to those expressly mentioned.[21]
The rule of expressio unius est
exclusio alterius is a canon of restrictive interpretation.[22]
Its application in this case is consistent with the construction of tax
exemptions in strictissimi juris against the taxpayer. To allow SPMC’s
claim for tax exemption will violate these established principles and unduly
derogate sovereign authority.
WHEREFORE, the petition is hereby DENIED.
Costs against petitioner.
SO
ORDERED.
Associate Justice
W E C O N C U R :
Associate
Justice
Chairperson
Associate Justice
I
attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Court’s Division.
Associate
Justice
Chairperson, Second
Division
Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson’s Attestation, I certify that the conclusions in the above decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.
Chief
Justice
* The petition names both the Court of Tax Appeals and the Court of Appeals as respondents. However, under Sec. 6, Rule 43 of the Rules of Court, the lower court need not be impleaded as a party in the petition for review filed with the Court of Appeals. Thus, the Court of Tax Appeals should not have been impleaded in the action filed with the Court of Appeals. On the other hand, under Sec. 4, Rule 45, the lower court need not be impleaded in petitions for review filed before this Court. Hence, both the Court of Tax Appeals and the Court of Appeals were excluded from the title.
[1] Penned by Associate Justice Ramon Mabutas, Jr. and concurred in by Associate Justices Demetrio G. Demetria and Jose L. Sabio, Jr. of the Eighth Division of the Court of Appeals; rollo, p. 31.
[2] Inclusive of interest, surcharge and other penalties.
[3] Covered by assessment nos.
FAS-4-87-90-000-511 in the amount of P4,596,093.58 and
FAS-4-87-90-000-512 in the amount of P3,586,089.27, respectively.
[4] SPMC was also assessed for the
following deficiency taxes for taxable year 1987: miller’s tax for P215,476.18
(FAS-4-87-90-000-510), percentage taxes for P42,221.92
(FAS-4-87-90-000-513) and P35,300.29 (FAS-4-87-90-000-514), increment of
P2,298.78 on late payment (FAS-4-87-90-000-515) and fixed taxes for P495.78,
P495.00 and P1,090.44 (FAS-4-87-90-000-516 to
FAS-4-87-90-000-518). These deficiencies were settled through payment.
[5] Another ground for the dismissal of the petition was SPMC’s failure to attach copies of all pleadings and other material portions of the record as would support the allegations in the petition.
[6] Section 4, Rule 7, Rules of Court.
[7] Cf. Section 6, Rule 43, Rules of Court.
[8] Cf. Section 7, Rule 43, Rules of Court.
[9] BPI Leasing Corporation v. Court of Appeals, G.R. No. 127624, 18 November 2003, 416 SCRA 4.
[10] Id.
[11] Public Estates Authority v. Uy, 423 Phil. 407 (2001).
[12] Soller v. Commission on Elections, G.R. No. 139853, 5 September 2000, 339 SCRA 685.
[13] G.R. No. 148287, 23 November 2004, 443 SCRA 510.
[14] Supra at note 9.
[15] Id.
[16] PET Plans, Inc. v. Court of Appeals, supra.
[17] Spouses Ortiz v. Court of Appeals, 360 Phil. 95 (1998).
[18] Chua
v. Santos, G.R. No. 132467, 18 October 2004, 440 SCRA 365.
[19] Lung Center of the Philippines v. Quezon City, G.R. No. 144104, 29 June 2004, 433 SCRA 119.
[20] Singapore Airlines Local Employees v. National Labor Relations Commission, 215 Phil. 420 (1984).
[21] Canet v. Decena, G.R. No. 155344, 20 January 2004, 420 SCRA 388.
[22] Malinias v. COMELEC, 439 Phil. 319 (2002).