Facts:
Global Medical Center of Laguna, Inc. v. Ross Systems International, Inc., G.R. Nos.
230112 and
230119, May 11, 2021, Supreme Court En Banc, Caguioa, J., writing for the Court.
The consolidated petitions for review on certiorari under
Rule 45 assail the Court of Appeals’ Decision (Oct. 28, 2016) that modified and partially affirmed the Construction Industry Arbitration Commission’s (CIAC) final award (May 10, 2016). The CIAC award had held that
Global Medical Center of Laguna, Inc. (GMCLI) lacked authority to withhold and remit the 2% creditable withholding tax (CWT) on the cumulative amount of Progress Billings Nos. 1–15, and denied Ross Systems International, Inc. (RSII) the immediate release of the amount the withholding agent remitted to the BIR; the CA affirmed CIAC but awarded RSII a balance of P1,088,214.83. The CA denied motions for reconsideration (Feb. 21, 2017), prompting the consolidated petitions to this Court.
GMCLI contracted RSII to construct a hospital (contract price P248,500,000). RSII submitted Progress Billing No. 15 on April 12, 2015 (claimed 79.31% accomplishment). GMCLI evaluated that work at 78.84%, and after an internal audit discovered prior non-remittance of 2% CWT on Progress Billings Nos. 1–14, GMCLI on April 29, 2015 withheld 2% not only from Billing No. 15 but retroactively on the cumulative sum of Billings 1–15. GMCLI paid RSII P3,101,491 for Billing No. 15 after deducting the 2% on the cumulative P197,088,497.00 submitted by RSII. RSII demanded payment of P4,884,778.92 as balance for Billing No. 15 and filed an arbitration complaint with the CIAC (Aug. 6, 2015).
After hearings the CIAC held (May 10, 2016) that it had jurisdiction, that GMCLI had no authority to withhold the 2% CWT on the cumulative amount of Billings 1–15, but that RSII was not entitled to release of the P4,884,778.92 because when GMCLI remitted the cumulative withholding to the BIR RSII had not yet declared and paid its income tax on those payments; applying the doctrine of last clear chance analogously, CIAC placed the ensuing loss on RSII. The CIAC denied moral damages and att...
(Pro-only)
Issues:
- Whether RSII is entitled to release of P3,815,996.50 (the 2% CWT allegedly improperly withheld and remitted by GMCLI on Progress Billings Nos. 1–14) in addition to the balance of P1,088,214.83.
- Whether GMCLI may be ordered to issue to RSII the pertinent BIR Form 2307 (Certificate of Creditable T...(Pro-only)
Ruling:
Ratio:
Doctrine: