Title
Antam Pawnshop Corp. vs. Commissioner of Internal Revenue
Case
G.R. No. 167962
Decision Date
Sep 19, 2008
Antam Pawnshop contested BIR's deficiency tax assessment, including DST on pawn tickets. SC ruled pawn tickets subject to DST as evidence of pledge contracts but waived surcharges due to Antam's good faith reliance on prior BIR interpretations.
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Case Digest (G.R. No. 167962)

Facts:

Background of the Case

  • Petitioner: Antam Pawnshop Corporation (Antam), a corporation engaged in the pawnshop business.
  • Respondent: Commissioner of Internal Revenue (CIR), responsible for assessing and collecting internal revenue taxes.

BIR Examination and Assessment

  • On October 27, 1999, the BIR issued a Letter of Authority to examine Antam’s books for the taxable year 1998.
  • On October 2, 2001, the BIR issued a pre-assessment notice for deficiency taxes, including Value Added Tax (VAT), Documentary Stamp Tax (DST), and Minimum Corporate Income Tax (MCIT).
  • On November 23, 2001, the BIR issued Assessment Notices for:
    • Deficiency VAT: P382,445.01
    • Deficiency MCIT: P687.69
    • Deficiency DST: P78,590.00
    • Compromise penalties: P28,200.00

Payment and Protest

  • On November 15, 2001, Antam paid P451.24 for MCIT.
  • On December 21, 2001, Antam filed a written protest with the BIR.
  • Due to BIR inaction, Antam filed a petition for review with the Court of Tax Appeals (CTA) on July 19, 2002.

CTA Decision

  • The CTA ruled on May 14, 2003, ordering Antam to pay:
    • Deficiency VAT: P382,445.01
    • Deficiency interest for late payment of MCIT: P233.74
    • Deficiency DST on subscribed capital stock: P15,000.00
  • The CTA cancelled the compromise penalty and held that pawn tickets are not subject to DST under Section 195 of the National Internal Revenue Code (NIRC).

CA Decision

  • The Court of Appeals (CA) reversed the CTA on January 21, 2005, ruling that pawn tickets are subject to DST.
  • The CA ordered Antam to pay P31,810.00 for deficiency DST, inclusive of surcharge and interest.

Issue:

  1. Main Issue: Are pawn tickets subject to Documentary Stamp Tax (DST) under Section 195 of the NIRC?
  2. Sub-Issue: If so, should Antam be liable for surcharges and delinquency interest?

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Conclusion:

  • The Supreme Court partially granted the petition, affirming the CA’s ruling that pawn tickets are subject to DST but deleting the surcharges and delinquency interest imposed on Antam.


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