FIRST DIVISION
COMMISSIONER OF INTERNAL G.R. No. 162155
REVENUE and ARTURO V.
PARCERO in his official
capacity as Revenue
District
Officer of Revenue
District
No. 049 (Makati),
Petitioners, Present:
PUNO,
C.J., Chairperson,
SANDOVAL-GUTIERREZ,
- v e r s u s - CORONA,
AZCUNA
and
GARCIA,
JJ.
PRIMETOWN
PROPERTY
GROUP, INC.,
Respondent. Promulgated:
August 28, 2007
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D E C I S I O N
CORONA, J.:
This petition for review on certiorari[1] seeks to set aside the
August 1, 2003 decision[2] of the Court of Appeals
(CA) in CA-G.R. SP No. 64782 and its February 9, 2004 resolution denying
reconsideration.[3]
On
March 11, 1999, Gilbert Yap, vice chair of respondent Primetown Property Group,
Inc., applied for the refund or credit of income tax respondent paid in 1997.
In Yap's letter to petitioner revenue district officer Arturo V. Parcero of
Revenue District No. 049 (Makati) of the Bureau of Internal Revenue (BIR),[4] he explained that the increase in the cost of
labor and materials and difficulty in obtaining financing for projects and
collecting receivables caused the real estate industry to slowdown.[5] As a consequence, while
business was good during the first quarter of 1997, respondent suffered losses
amounting to P71,879,228 that year.[6]
According
to Yap, because respondent suffered losses, it was not liable for income taxes.[7] Nevertheless, respondent
paid its quarterly corporate income tax and remitted creditable withholding tax
from real estate sales to the BIR in the total amount of P26,318,398.32.[8] Therefore, respondent was
entitled to tax refund or tax credit.[9]
On
May 13, 1999, revenue officer Elizabeth Y. Santos required respondent to submit
additional documents to support its claim.[10] Respondent complied but
its claim was not acted upon. Thus, on April 14, 2000, it filed a petition for
review[11] in the Court of Tax
Appeals (CTA).
On
December 15, 2000, the CTA dismissed the petition as it was filed beyond the
two-year prescriptive period for filing a judicial claim for tax refund or tax
credit.[12] It invoked Section 229 of
the National Internal Revenue Code (NIRC):
Sec. 229. Recovery
of Taxes Erroneously or Illegally Collected. -- No suit or proceeding shall be maintained
in any court for the recovery of any national internal revenue tax hereafter
alleged to have been erroneously or illegally assessed or collected, or of any
penalty claimed to have been collected without authority, or of any sum alleged
to have been excessively or in any manner wrongfully collected, until a claim
for refund or credit has been duly filed with the Commissioner; but such suit
or proceeding may be maintained, whether or not such tax, penalty, or sum has been
paid under protest or duress.
In any case, no such suit or
proceeding shall be filed after the expiration of two (2) years from the date
of payment of the tax or penalty regardless of any supervening cause that may
arise after payment: Provided, however, That the Commissioner may,
even without a claim therefor, refund or credit any tax, where on the face of
the return upon which payment was made, such payment appears clearly to have
been erroneously paid. (emphasis supplied)
The CTA found that respondent filed
its final adjusted return on April 14, 1998. Thus, its right to claim a refund
or credit commenced on that date.[13]
The
tax court applied Article 13 of the Civil Code which states:
Art. 13. When the
law speaks of years, months, days or nights, it shall be understood that years
are of three hundred sixty-five days each; months, of thirty days; days, of
twenty-four hours, and nights from sunset to sunrise.
If the months are
designated by their name, they shall be computed by the number of days which
they respectively have.
In computing a
period, the first day shall be excluded, and the last included. (emphasis supplied)
Thus, according to the CTA, the
two-year prescriptive period under Section 229 of the NIRC for the filing of
judicial claims was equivalent to 730 days. Because the year 2000 was a leap
year, respondent's petition, which was filed 731 days[14] after respondent filed
its final adjusted return, was filed beyond the reglementary period.[15]
Respondent
moved for reconsideration but it was denied.[16] Hence, it filed an appeal
in the CA.[17]
On
August 1, 2003, the CA reversed and set aside the decision of the CTA.[18] It ruled that Article 13
of the Civil Code did not distinguish between a regular year and a leap year. According
to the CA:
The rule that a year
has 365 days applies, notwithstanding the fact that a particular year is a leap
year.[19]
In other words, even if the year 2000
was a leap year, the periods covered by April 15, 1998 to April 14, 1999 and
April 15, 1999 to April 14, 2000 should still be counted as 365 days each or a
total of 730 days. A statute which is clear and explicit shall be neither
interpreted nor construed.[20]
Petitioners
moved for reconsideration but it was denied.[21] Thus, this appeal.
Petitioners
contend that tax refunds, being in the nature of an exemption, should be
strictly construed against claimants.[22] Section 229 of the NIRC
should be strictly applied against respondent inasmuch as it has been
consistently held that the prescriptive period (for the filing of tax refunds
and tax credits) begins to run on the day claimants file their final adjusted
returns.[23]
Hence, the claim should have been filed on or before April 13, 2000 or within
730 days, reckoned from the time respondent filed its final adjusted return.
The
conclusion of the CA that respondent filed its petition for review in the CTA
within the two-year prescriptive period provided in Section 229 of the NIRC is
correct. Its basis, however, is not.
The
rule is that the two-year prescriptive period is reckoned from the filing of
the final adjusted return.[24] But how should the two-year prescriptive
period be computed?
As
already quoted, Article 13 of the Civil Code provides that when the law speaks
of a year, it is understood to be equivalent to 365 days. In National
Marketing Corporation v. Tecson,[25] we ruled that a year is
equivalent to 365 days regardless of whether it is a regular year or a leap
year.[26]
However,
in 1987, EO[27]
292 or the Administrative Code of 1987 was enacted. Section 31, Chapter VIII,
Book I thereof provides:
Sec. 31.
Legal Periods. — “Year” shall be understood to be twelve calendar
months; “month” of thirty days, unless it refers to a specific calendar
month in which case it shall be computed according to the number of days the
specific month contains; “day”, to a day of twenty-four hours and; “night” from
sunrise to sunset. (emphasis supplied)
A calendar month is “a month
designated in the calendar without regard to the number of days it may
contain.”[28] It is the “period of time running from
the beginning of a certain numbered day up to, but not including, the
corresponding numbered day of the next month, and if there is not a sufficient
number of days in the next month, then up to and including the last day of that
month.”[29] To illustrate, one
calendar month from December 31, 2007 will be from January 1, 2008 to January
31, 2008; one calendar month from January 31, 2008 will be from February 1,
2008 until February 29, 2008.[30]
A
law may be repealed expressly (by a categorical declaration that the law is
revoked and abrogated by another) or impliedly (when the provisions of a more
recent law cannot be reasonably reconciled with the previous one).[31] Section 27, Book VII (Final Provisions) of
the Administrative Code of 1987 states:
Sec. 27. Repealing
clause. — All laws, decrees, orders, rules and regulation, or portions
thereof, inconsistent with this Code are hereby repealed or modified
accordingly.
A repealing clause like Sec. 27 above
is not an express repealing clause because it fails to identify or designate
the laws to be abolished.[32] Thus, the provision above
only impliedly repealed all laws inconsistent with the
Administrative Code of 1987.
Implied
repeals, however, are not favored. An implied repeal must have been clearly and
unmistakably intended by the legislature. The test is whether the subsequent
law encompasses entirely the subject matter of the former law and they cannot
be logically or reasonably reconciled.[33]
Both
Article 13 of the Civil Code and Section
31, Chapter VIII, Book I of the Administrative Code of 1987 deal with the same
subject matter — the computation of legal periods. Under the Civil Code, a year
is equivalent to 365 days whether it be a regular year or a leap year.
Under the Administrative Code of 1987, however, a year is composed of 12
calendar months. Needless to state, under the Administrative Code of 1987, the
number of days is irrelevant.
There
obviously exists a manifest incompatibility in the manner of computing legal
periods under the Civil Code and the Administrative Code of 1987. For this
reason, we hold that Section 31, Chapter VIII, Book I of the Administrative
Code of 1987, being the more recent law, governs the computation of legal
periods. Lex posteriori derogat priori.
Applying
Section 31, Chapter VIII, Book I of the Administrative Code of 1987 to this
case, the two-year prescriptive period (reckoned from the time respondent filed
its final adjusted return[34] on April 14, 1998) consisted
of 24 calendar months, computed as follows:
|
Year 1 |
1st |
calendar month |
April 15, 1998 |
to |
May 14, 1998 |
|
|
2nd |
calendar month |
May 15, 1998 |
to |
June 14, 1998 |
|
|
3rd |
calendar month |
June 15, 1998 |
to |
July 14, 1998 |
|
|
4th |
calendar month |
July 15, 1998 |
to |
August 14, 1998 |
|
|
5th |
calendar month |
August 15, 1998 |
to |
September 14, 1998 |
|
|
6th |
calendar month |
September 15, 1998 |
to |
October 14, 1998 |
|
|
7th |
calendar month |
October 15, 1998 |
to |
November 14, 1998 |
|
|
8th |
calendar month |
November 15, 1998 |
to |
December 14, 1998 |
|
|
9th |
calendar month |
December 15, 1998 |
to |
January 14, 1999 |
|
|
10th |
calendar month |
January 15, 1999 |
to |
February 14, 1999 |
|
|
11th |
calendar month |
February 15, 1999 |
to |
March 14, 1999 |
|
|
12th |
calendar month |
March 15, 1999 |
to |
April 14, 1999 |
|
Year 2 |
13th |
calendar month |
April 15, 1999 |
to |
May 14, 1999 |
|
|
14th |
calendar month |
May 15, 1999 |
to |
June 14, 1999 |
|
|
15th |
calendar month |
June 15, 1999 |
to |
July 14, 1999 |
|
|
16th |
calendar month |
July 15, 1999 |
to |
August 14, 1999 |
|
|
17th |
calendar month |
August 15, 1999 |
to |
September 14, 1999 |
|
|
18th |
calendar month |
September 15, 1999 |
to |
October 14, 1999 |
|
|
19th |
calendar month |
October 15, 1999 |
to |
November 14, 1999 |
|
|
20th |
calendar month |
November 15, 1999 |
to |
December 14, 1999 |
|
|
21st |
calendar month |
December 15, 1999 |
to |
January 14, 2000 |
|
|
22nd |
calendar month |
January 15, 2000 |
to |
February 14, 2000 |
|
|
23rd |
calendar month |
February 15, 2000 |
to |
March 14, 2000 |
|
|
24th |
calendar month |
March 15, 2000 |
to |
April 14, 2000 |
|
|
|
|
|
|
|
We
therefore hold that respondent's petition (filed on April 14, 2000) was filed
on the last day of the 24th calendar month from the day respondent
filed its final adjusted return. Hence, it was filed within the reglementary
period.
Accordingly,
the petition is hereby DENIED. The case is REMANDED to the Court of
Tax Appeals which is ordered to expeditiously proceed to hear C.T.A. Case No.
6113 entitled Primetown Property Group, Inc. v. Commissioner of Internal
Revenue and Arturo V. Parcero.
No costs.
SO
ORDERED.
RENATO C. CORONA
Associate Justice
WE CONCUR:
REYNATO S. PUNO
Chief Justice
Chairperson
ANGELINA SANDOVAL-GUTIERREZ ADOLFO S. AZCUNA
Associate Justice Associate Justice
CANCIO C. GARCIA
Associate Justice
Pursuant
to Section 13, Article VIII of the Constitution, 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.
REYNATO S. PUNO
[1] Under Rule 45 of the Rules of Court.
[2] Penned by Associate Justice Marina L. Buzon and concurred in by Associate Justices Rebecca de Guia-Salvador and Jose C. Mendoza of the Special Fifteenth Division of the Court of Appeals. Rollo, pp. 21-25.
[3] Penned by Associate Justice Marina L. Buzon and concurred in by Associate Justices Rebecca de Guia-Salvador and Jose C. Mendoza of the Former Special Fifteenth Division of the Court of Appeals. Id., pp. 26-28.
[4] Id., pp. 37-42.
[5] Id., pp. 39-40.
[6] Id. This was the period of economic slowdown known as the “Asian (Financial) Crisis” which started in mid-1997.
[7] Id., p. 41.
[8] Summary of Tax/Payments for 1997:
|
Quarter |
Corporate Income Tax |
Creditable Withholding Tax |
TOTAL |
|
1st |
|
|
|
|
2nd |
15,694,502.00 |
633,175.00 |
16,327,677.00 |
|
3rd |
2,419,868.81 |
3,154,506.51 |
5,574,375.32 |
|
4th |
|
288,481.00 |
288,481.00 |
|
|
|
|
|
Id., p. 40.
[9] Id., p. 41.
[10] Id., pp. 78-79.
[11] Docketed as C.T.A. Case No. 6113. Id., pp. 192-199.
[12] Penned by Presiding Judge Ernesto D. Acosta and concurred in by Associate Judges Amancio Q. Saga (retired) and Ramon O. de Veyra (retired). Dated December 15, 2000. Id., pp. 187-190.
[13] CIR v. CA, 361 Phil. 359, 364-365 (1999).
[14] The
computation was as follows:
April 15, 1998 to April 14, 1999 ----------------------- 365 days
April 15, 1999 to April 14, 2000 (leap year) ---------- 366 days
TOTAL 731 days
[15] Rollo, p. 190.
[16] Id., p. 191.
[17] Docketed as CA-G.R. SP No. 64782. Id., pp. 180-186. (This case observes the procedure in RA 1125 prior to the amendments of RA 9282.)
[18] Id., pp. 21-25. Under RA 9282 which took effect on April 22, 2004, decisions of the CTA are now appealable to the Supreme Court.
[19] Id., p. 24.
[20] Id.
[21] Id., pp. 26-28.
[22] Id., p. 13.
[23] Id., p. 15.
[24] Tax Code, Sec. 229 and supra note 12 at 367. See also ACCRA Investments Corporation v. CA., G.R. No. 96322, 20 December 1991, 204 SCRA 957. See also CIR v. Philippine American Life Insurance Co., G.R. No. 105208, 29 May 1995, 244 SCRA 446.
[25] 139 Phil. 584 (1969).
[26] Id., pp. 588-589 citing People v. del Rosario, 97 Phil 70, 71 (1955).
[27] Executive Order
[28] Gutierrez v. Carpio, 53 Phil. 334, 335-336 (1929).
[29] Section 9, Time, 74 AmJur 2d 593 citing Re Lynch's Estate, 123 Utah 57, 254 P2d 454.
[30] This is pursuant to Article 13(3) of the Civil Code which provides that “[i]n computing a period, the first day shall be excluded, and the last day included.”
Cf. Rules of Court, Rule 22, Sec. 1. The section provides:
Section 1. How to compute time. In computing any period of time prescribed or allowed by this Rules, or by the order of the court, or by any applicable statute, the day of the act or event from which the designated period of time begins to run is to be excluded and the date of performance included. If the last day of the period, as thus computed, falls on a Saturday, a Sunday or a legal holiday in the place where the court sits, the time shall not run until the next working day. (emphasis supplied)
[31] Jose Jesus G. Laurel, Statutory Construction: Cases and Materials, 1999 ed., 176 citing Black's Law Dictionary, 4th ed., 1463.
[32] Agujetas v. Court of Appeals, G.R. No. 106560, 23 August 1996, 261 SCRA 17, 32.
[33] David v. Commission on Election, G.R. No. 127116, 08 April 1997, 271 SCRA 90, 103.
[34] Supra note 25.