Title
Blue Bar Coconut Phil. vs. Tantuico, Jr.
Case
G.R. No. L-47051
Decision Date
Jul 29, 1988
The Philippine Coconut Authority (PCA) levied coconut product sales to fund subsidies, but disputes arose over COA audits, levy collections, and subsidy claims. The Supreme Court upheld COA's jurisdiction, dismissed the petition, and deferred to COA's expertise in resolving technical issues.
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Case Digest (G.R. No. L-47051)

Facts:

Creation of the Philippine Coconut Authority (PCA) and Stabilization Fund

  • On June 30, 1973, Presidential Decree No. 232 created the Philippine Coconut Authority (PCA) with an 11-member governing board, later reduced to 9 members by Presidential Decree No. 271, and finally to 7 members by Presidential Decree No. 623.
  • On August 20, 1973, Presidential Decree No. 276 established the Coconut Consumers Stabilization Fund (CCSF). The PCA was authorized to impose a levy of P15.00 per 100 kilograms of copra or its equivalent in other coconut products on every first sale, effective August 10, 1973. The proceeds were to be deposited in a separate trust fund and used to subsidize the sale of coconut-based products at controlled prices.

Collection of Levies and Subsidy Claims

  • The petitioners, all end-users of coconut products, were responsible for collecting and remitting the CCSF levies.
  • On January 8, 1975, the PCA Governing Board issued Resolution No. 01-75, reducing the levy rates. On January 29, 1975, the same Board issued Resolution No. 018-75, deferring the collection of levies from the desiccated coconut industry for six months.
  • The reduced Governing Board under PD No. 623 was formally constituted on February 26, 1975.

Audit and Dispute Over Subsidy Claims

  • In 1976, the Commission on Audit (COA) initiated a special audit of coconut end-user companies, including the petitioners, regarding their CCSF levy collections and subsidies received.
  • The COA Acting Chairman directed the PCA to collect short levies and overpaid subsidies, and to apply subsidy claims to settle short levies if the petitioners failed to remit the amounts due.
  • The petitioners contested the COA's findings, arguing that the overpayments and deficiencies were due to the COA's refusal to recognize the validity of PCA Resolutions Nos. 01-75 and 018-75.
  • The COA Chairman eventually agreed to release the withheld subsidy payments, provided the petitioners posted a bond equivalent to the disputed claims. However, the petitioners found the terms unacceptable and filed a petition for certiorari, prohibition, and mandamus.

Petitioners' Contentions

  • The petitioners argued that the COA had no jurisdiction to:
    1. Assess CCSF levies against them or make them personally liable.
    2. Withhold their subsidy reimbursement claims.
    3. Set off subsidy payments against alleged levy shortages.
    4. Audit private corporations like the petitioners.
    5. Deny their right to appeal to the Supreme Court.

Issue:

  1. Whether the COA had jurisdiction to assess CCSF levies, withhold subsidies, and audit private corporations.
  2. Whether the PCA Resolutions Nos. 01-75 and 018-75 were valid and enforceable.
  3. Whether the COA acted with grave abuse of discretion in disregarding the PCA resolutions and imposing conditions for the release of subsidies.
  4. Whether the petitioners were entitled to their subsidy claims despite the COA's findings of short levies and overpayments.

Ruling:

The Supreme Court dismissed the petition for lack of merit. The Court held that:

  • The COA had jurisdiction to audit the petitioners as they were handling government funds in the form of subsidies.
  • The issue of the validity of PCA Resolutions Nos. 01-75 and 018-75 became moot when the President clarified that the PCA Governing Board continued to function until the new Board was formally constituted.
  • The COA's actions were not arbitrary or in grave abuse of discretion, as the petitioners failed to provide sufficient evidence to prove otherwise.
  • The Court applied the principle of primary jurisdiction, deferring to the COA's expertise in resolving technical and factual issues related to the CCSF levies and subsidies.

Ratio:

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