G.R. No. L-20563 - Cebu Portland Cement Co. vs. Collector of Internal Revenue

Cebu Portland Cement Company, Petitioner, sought refund of P458,241.45 in percentage tax (sales tax) paid from November 1, 1954 to March, 1955, and P427,552.95 in ad valorem tax paid from April, 1955 to September 30, 1956, arising from sales of APO Portland cement.
Collector (now Commissioner) of Internal Revenue, Respondent, was the taxing authority from whom refunds were sought.

Prior to the effectivity of Republic Act No. 1299 on June 16, 1955, petitioner paid the percentage tax computed at 7% of the gross selling price inclusive of the cost of bag containers and gypsum used in manufacture.
After approval of Republic Act No. 1299, petitioner ceased paying the percentage tax and instead paid the ad valorem tax on the selling price after deducting the cost of containers.

Since 1952 petitioner protested imposition of the sales tax and on January 16, 1953 also protested payment of ad valorem tax.
Petitioner filed a written claim for refund in September 1955, which it reiterated on July 26, 1956.

Petitioner filed a petition for review in the Court of Tax Appeals on January 24, 1957, alleging entitlement to refund under Republic Act No. 1299.
The petition was amended on October 24, 1959, and again on June 23, 1961, to include claims for refund of alleged double payments of ad valorem tax.
The Court of Tax Appeals dismissed the petition, holding that:

petitioner was not exempt from percentage tax prior to the effectivity of Republic Act No. 1299 because cement was then a manufactured product;
petitioner could not deduct cost of raw materials, bag containers, and gypsum absent proof they had been previously subjected t...(Subscriber-Only)

Whether Republic Act No. 1299 applied retrospectively so as to exempt cement from the percentage tax prior to June 16, 1955.
Whether the cost of bag containers and gypsum were deductible from the gross selling price in computing the 7% percentage tax levied under section 186 of the Tax Code.
Whether Cebu Portland Cement Company or its customers was the proper party to seek refund of percentage tax amounts that were billed to and paid by customers.
Whether the action for refund of the percentage tax and of the alleged overpaid ad valorem tax had prescribed under section 306 of the Tax Code.

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