Case Digest (G.R. No. 230112) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
Global Medical Center of Laguna, Inc. (GMCLI) engaged Ross Systems International, Inc. (RSII) on March 1, 2012 for the construction of a hospital in Cabuyao, Laguna, under a P248,500,000.00 contract calling for a 15 % down payment and monthly progress payments based on work accomplished. Section 9 of the contract made all service taxes RSII’s responsibility, and an arbitration clause provided CIAC jurisdiction. On April 12, 2015, RSII submitted Progress Billing No. 15 for 79.31 % completion (P9,228,286.77). GMCLI’s evaluation placed work at 78.84 % (P7,043,260.00). Discovering its failure to withhold the 2 % Creditable Withholding Tax (CWT) on Progress Billings Nos. 1–14, GMCLI on April 29, 2015 withheld 2 % CWT on the CUMULATIVE amount of Billings Nos. 1–15 (totaling P197,088,497.00), remitting P3,941,769.00 and paying only P3,101,491.00 for Billing No. 15. RSII claimed a remaining P4,884,778.92 and filed CIAC arbitration on August 6, 2015. On May 10, 2016, CIAC rendered its Fi Case Digest (G.R. No. 230112) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Contract and Progress Billings
- Global Medical Center of Laguna, Inc. (GMCLI) engaged Ross Systems International, Inc. (RSII) for P248,500,000 hospital construction, with 15% down payment and monthly progress billings; RSII responsible for taxes; contract contains arbitration clause.
- On April 12, 2015, RSII’s Progress Billing No. 15 claimed 79.31% completion (P9,228,286.77 incl. VAT); GMCLI evaluated at 78.84% (P7,043,260.00).
- Withholding Dispute and CIAC Proceedings
- GMCLI discovered failure to withhold 2% CWT on Billings 1–14; on April 29, 2015 it withheld 2% on cumulative Billings 1–15 (P197,088,497.00) = P3,941,769.00, paying RSII only P3,101,491.00 for Billing 15.
- RSII demanded P4,884,778.92 balance, alleging improper withholding; filed CIAC complaint on August 6, 2015. Preliminary and case management conferences, evidence, and Terms of Reference prepared.
- CIAC Final Award (May 10, 2016): CIAC has jurisdiction; GMCLI acted without authority in belatedly withholding CWT; RSII not entitled to release of P4,884,778.92 (RSII hadn’t paid income tax at remittance); RSII entitled to P1,088,214.33; denied moral damages and attorneys’ fees; costs shared proportionally.
- CA Proceedings and Rule 45 Petitions
- RSII petitioned the CA under Rule 43; CA Decision (Oct 28, 2016) affirmed CIAC award with modification, awarding RSII P1,088,214.83; denied both parties’ motions for reconsideration (Feb 21, 2017).
- GMCLI and RSII filed separate Rule 45 petitions, consolidated before the Supreme Court.
Issues:
- Consolidated Issues for the Supreme Court
- Is RSII entitled to release of P3,815,996.50 (2% CWT on Progress Billings 1–14) in addition to the awarded P1,088,214.83?
- Must GMCLI be ordered to issue to RSII the BIR Form 2307 (Certificate of Creditable Tax Withheld at Source) for the withheld CWT?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)