Facts:

The case involves Atlas Consolidated Mining and Development Corporation (petitioner) against the Commissioner of Internal Revenue, the Court of Tax Appeals (CTA), and the Court of Appeals (respondents). The events leading to this case began when the petitioner, a domestic corporation engaged in copper mining in Toledo City, Cebu, purchased various petroleum products from Petrophil Corporation and Mobil Oil Philippines from September 1974 to July 1983. These products, including diesel and coco-diesel, were utilized in the petitioner’s mining operations. Both suppliers paid specific taxes on these products under Sections 153 and 156 of the 1977 National Internal Revenue Code (NIRC).

On June 14, 1956, Republic Act No. 1435 was enacted, which allowed for a 25% refund of specific taxes paid on oil products used by miners and forest concessionaires. Relying on this provision, the petitioner filed several petitions with the CTA seeking refunds totaling P34,433,563.94 for specific...

Facts:

Background of the Case

• Petitioner: Atlas Consolidated Mining and Development Corporation, a domestic mining corporation engaged in the mining of copper from its mineral lands and concessions in Toledo City, Cebu.
• Nature of Business: The petitioner purchased petroleum products—manufactured oil, diesel, and coco-diesel—from its suppliers (Petrophil Corporation and Mobil Oil Philippines) for use in running machinery, equipment, motors, and vehicles essential to its mining operations.

Taxation and Refund Provision

• Specific Tax Imposition:

- The petroleum products were subject to specific taxes imposed under Sections 153 and 156 of the 1977 National Internal Revenue Code (NIRC), which were formerly designated as Sections 142 and 145 under earlier tax codes. - The suppliers (Petrophil and Mobil Oil) remitted these specific taxes, which formed the basis of the petitioner’s subsequent refund claims. - Republic Act No. 1435 grants a partial refund (25%) of the specific tax paid on petroleum products used by miners and forest concessionaires. - Section 5 of RA 1435 expressly provides that when oil products are used by such entities, 25% of the specific tax paid is refundable upon presentation of sufficient proof of use. - There was an issue regarding whether the 25% refund should be computed on the basis of the lower specific tax rates prescribed under Sections 1 and 2 of RA 1435 or on the higher, increased rates mandated by the amended 1977 NIRC. - Earlier Supreme Court rulings, notably in Davao Gulf Lumber Corporation and Rio Tuba Nickel Mining Corporation cases, have addressed the computation method for such refunds.

Procedural History

• Initial Refund Claims:

- The petitioner filed several petitions with the Court of Tax Appeals (CTA) seeking a refund (or tax credit) of 25% of the specific tax paid on oil products for various periods. - Specific Claims: - The Court of Tax Appeals rendered a Decision on December 24, 1991, denying the petitioner’s refund claims based on prior Supreme Court decisions (notably in the Rio Tuba case) that argued the refund privilege under RA 1435 was impliedly repealed by Presidential Decree No. 711. - The petitioner, under Rule 45 of the Rules of Court, elevated the matter challenging the CTA decision. - On March 31, 1993, the Eleventh Division of the Supreme Court set aside the CTA Decision and remanded the case for proper computation of the refundable amount. - Subsequent resolutions (including one dated April 18, 1994) computed the 25% refund based on the rates stipulated in RA 1435, arriving at a total refund of P1,101,678.88. - The Court of Appeals, in affirming the CTA decision, relied on the precedent established in Rio Tuba and reiterated that the refund must be based on the specific tax deemed paid under Sections 1 and 2 of RA 1435.

Issue:

Computation Basis for the Tax Refund

• Whether the refund of 25% should be computed on the basis of:
• The specific tax rates prescribed under Sections 1 and 2 of RA 1435, or
• The actual, increased rates paid under Sections 153 and 156 of the 1977 NIRC.

Application of Precedents and Judicial Interpretations

• Whether the Court of Appeals erred by relying on the division’s decision in the Rio Tuba case and failing to apply the Supreme Court en banc ruling in Insular Lumber Co. vs. CTA.
• Whether the interpretation and application of Section 5 of RA 1435 were misapplied in light of established legal principles concerning tax exemptions and refund privileges.

Consideration of Amended Tax Rates

• Whether the court should have taken into account the increased tax rates imposed by subsequent amendatory laws, given that the petitioner’s actual tax payments reflect these higher rates.

Consistency with Statutory and Jurisprudential Framework

• Whether the decisions of the CTA and the Court of Appeals, in aligning with the Rio Tuba and subsequent Atlas cases, properly applied the statutory provision and prior jurisprudence concerning the computation of tax refunds.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)