Case Digest (G.R. No. 202789)
Case Digest (G.R. No. 202789)
Facts:
Commissioner of Internal Revenue v. Puregold Duty Free, Inc., G.R. No. 202789, June 22, 2015, Supreme Court Third Division, Velasco Jr., J., writing for the Court.The respondent, Puregold Duty Free, Inc., operated a duty-free retail store within the Clark Special Economic Zone (CSEZ) and was issued Certificates of Registration/Tax Exemption by the Clark Development Corporation (CDC) that afforded it preferential tax treatment, including duty- and tax-free importations and a five percent (5%) preferential tax in lieu of national and local taxes for the period January 1998–May 2004. Those incentives were claimed under Executive Order No. 80 and RA 7227 as implemented for the CSEZ.
After this Court in Coconut Oil Refiners v. Torre (July 29, 2005) invalidated Section 5 of EO 80 insofar as it purported to extend RA 7227 incentives to CSEZ operators, the Bureau of Internal Revenue (BIR) issued a Preliminary Assessment Notice on November 7, 2005, asserting deficiency VAT and excise taxes on Puregold’s imports of distilled spirits, wines and cigarettes (Jan. 1998–May 2004). Puregold protested. Congress subsequently enacted RA 9399 (signed March 20, 2007), a one-time remedial amnesty for registered enterprises operating in specified SEZs affected by the John Hay and Coconut Oil decisions; Puregold paid the P25,000 amnesty tax and filed notice on July 27, 2007.
Despite availment, the BIR issued a formal demand (Oct. 26, 2007) and on June 23, 2008 a Final Decision on Disputed Assessment maintaining the deficiencies. Puregold filed a petition for review with the Court of Tax Appeals (CTA) on July 22, 2008. The CTA Second Division, after receiving Puregold’s evidence of registration/operation in CSEZ and of compliance with RA 9399, issued a November 25, 2010 Resolution cancelling the assessment; its January 20, 2011 Resolution denied the CIR’s motion for reconsideration. The CIR elevated the matter to the CTA En Banc; the CTA En Banc on May 9, 2012 denied the CIR’s petition and on July 18, 2012 denied reconsideration. The CIR filed a Rule 45 petition with the Supreme Court to annul the CTA en banc rulings. Justice Villarama, Jr. filed a dissent (joined by Justice Mendoza); Justices Peralta and Reyes concurred with the majority.
Issues:
- May the Commissioner of Internal Revenue raise for the first time on appeal the factual claim that Puregold’s principal place of business is Metro Manila and therefore disqualify it from RA 9399 amnesty?
- Does the remedial tax amnesty under RA 9399 cover the deficiency VAT and excise taxes assessed under Section 131(A) of the 1997 National Internal Revenue Code for Puregold’s importations into the CSEZ during January 1998–May 2004?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)