G.R. No. L-47883 - Lakas ng Bayan vs. Commission on Elections

Rio Tuba Nickel Mining Corporation, a private respondent, filed a petition seeking reconsideration of the decision rendered in G.R. Nos. 83583-84 dated September 30, 1991 by the Court of Tax Appeals.
The petition sought a refund of specific taxes paid on manufactured oils and diesel fuel oil, which were originally paid under the provisions of R.A. No. 1435.

R.A. No. 1435 granted mining and lumber companies a refund privilege of twenty-five (25%) percent on the specific taxes imposed on manufactured oils and diesel fuel oil.
The refund privilege was originally justified on the basis that these specific taxes were intended to fund the Highway Special Fund, from which miners and lumbermen were presumed not to benefit directly.
Presidential Decree (P.D.) No. 711 abolished all special and fiduciary funds by channeling them into the General Fund, leading to the view that the refund privilege was impliedly repealed.

Under R.A. No. 1435, the specific taxes paid by mining and lumber companies were credited to the Highway Special Fund to finance highway construction projects.
The rationale was that since these companies typically utilized their own roads, taxing them at lower rates would prevent them from unfairly subsidizing national highway projects.
Despite the enactment of P.D. No. 711 which took effect on July 1, 1975, evidence showed that the Highway Special Fund continued to exist until 1985 and was only finally channeled to the General Fund in 1986.
The persistence of the Highway Special Fund until 1985 posed a factual question: whether the refund privilege under R.A. No. 1435 ceased immediately with P.D. No. 711 or continued until the fund’s actual abolition.

The refund claim by Rio Tuba covers specific tax payments made from 1980 to July 1983, a period during which the Highway Special Fund was still maintained.
Although the taxes were originally based on the rates specified by Sections 1 and 2 of R.A. No. 1435, subsequent payments were made under the increased rates mandated by Sections 153 and 156 of the National Internal Revenue Code of 1977.
Precedent from Insular Lumber Co. v. Court of Tax Appeals emphasized that tax exemptions or refund privileges must be granted in explicit and categorical language, meaning any ambiguity should be construed strictly against the taxpayer.

Whether Section 5 of R.A. No. 1435, which provided the refund privilege for specific taxes, was impliedly repealed by P.D. No. 711 with the abolition of special funds.
Whether the existence of the Highway Special Fund up to 1985 should affect the interpretation of the refund rights originally granted by R.A. No. 1435.

Whether mining and logging companies like Rio Tuba are entitled to a refund on taxes paid during the period when the Highway Special Fund was still operative (i.e., up to 1985).
How the refund should be computed: on the basis of the tax amounts "deemed paid" as per R.A. No. 1435 or on the increased tax rates imposed by the National Internal Revenue Code of 1977.