Title
CDCP Mining Corp. vs. Commissioner of Internal Revenue
Case
G.R. No. 122213
Decision Date
Jul 28, 2005
CDCP sought a refund for specific taxes on fuel used in mining, claiming higher rates under E.O. 262. The Supreme Court denied, ruling refunds must follow R.A. 1435 rates, upholding stare decisis and rejecting claims for periods beyond the prescriptive limit.

Case Digest (G.R. No. 122213)
Expanded Legal Reasoning Model

Facts:

  • Procedural History
    • Two separate petitions for review were filed:
1.1. One by the Commissioner of Internal Revenue (G.R. No. 122161). 1.2. Another by CDCP Mining Corporation (G.R. No. 122213).
  • A series of decisions preceded this petition:
2.1. The Court of Tax Appeals (CTA) rendered a decision on August 9, 1994 awarding a refund of ₱38,461.86. 2.2. The Court of Appeals modified this decision on November 9, 1994, recalculating the refund to ₱1,598,675.25. 2.3. In a subsequent ruling (G.R. No. 122161, February 1, 1999), the Supreme Court affirmed the CTA decision, thereby rejecting the application of higher tax rates.
  • Factual Background of the Claim
    • During the period from July 1, 1980, to June 30, 1982, CDCP used manufactured mineral oil, motor fuel, diesel, and fuel oil exclusively in the operation of its mining concession.
    • On September 6, 1982, CDCP filed a claim with the Commissioner of Internal Revenue for a refund amounting to ₱9,962,299.71, representing 25% of the specific taxes paid on its fuel purchases.
    • Due to inaction on the claim, CDCP lodged a petition for review with the CTA on October 8, 1982.
    • The Commissioner officially denied the refund on January 2, 1984.
  • Chronology and Judicial Proceedings
    • After due trial, the CTA ruled on August 9, 1994 that CDCP was entitled to a refund of only ₱38,461.86 (without interest), basing its computation on the specific tax rates under Sections 1 and 2 of R.A. No. 1435.
    • The Court of Appeals, in its November 9, 1994 ruling, modified the CTA decision and computed the refund using the provisions of the 1977 National Internal Revenue Code (NIRC).
    • CDCP later asserted that it was entitled to a much higher refund of ₱3,226,809.15, a figure that significantly differed from the amounts awarded in previous decisions.
    • Notably, no further pleadings have been filed by the parties since 1996, raising potential issues about the mootness of the present petition.
  • Statutory and Legal Framework
    • Republic Act (R.A.) No. 1435 provides that, upon proof of actual use of oil in mining operations, a 25% refund of the specific tax paid is available.
    • The controversy concerns whether the refund should be computed based on:
2.1. The tax rates as originally set out in Sections 1 and 2 of R.A. No. 1435 (as held by the CTA), or 2.2. The increased rates under Sections 153 and 156 of the 1977 NIRC (as applied by the Court of Appeals).
  • Additional regulatory developments include Executive Order (E.O.) No. 262, which increased the specific tax rates effective March 21, 1981, though its applicability to the refund computation is contested.
  • Procedural Posture and Mootness Considerations
    • Even though the conflicting claims were effectively settled in the earlier final decision (G.R. No. 122161), CDCP has reasserted a higher refund claim in the present petition.
    • The parties have not indicated any reason for mootness since no new filings or arguments have been made since 1996.

Issues:

  • Whether the computation of the tax refund should be based on:
    • The specific tax rates prescribed in Sections 1 and 2 of R.A. No. 1435, or
    • The increased rates under Sections 153 and 156 of the 1977 NIRC.
  • Whether CDCP Mining Corporation is entitled to a refund amount of ₱3,226,809.15, which is significantly higher than the refund previously determined by the CTA and modified by the Court of Appeals.
  • Whether the Court of Appeals erred:
    • In applying the tax rates from the 1977 NIRC, and
    • In failing to admit the amendatory effect of Executive Order No. 262 on the tax rates during the relevant period.
  • Whether the prolonged inaction by the parties (with no pleadings since 1996) renders the present petition moot, despite the potential residual legal issues concerning refund computation.

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Doctrine:

  • (Subscriber-Only)
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