Case Digest (G.R. No. L-41376-77)
Case Digest (G.R. No. L-41376-77)
Facts:
Northern Lines, Inc., petitioner, G.R. Nos. L-41376-77, June 29, 1988, Supreme Court Third Division, Cortes, J., writing for the Court. Petitioner is a domestic shipping corporation which, in 1960, procured two vessels under Contracts of Conditional Purchase and Sale from the Reparations Commission: the "Don Salvador" (formerly "Magsaysay") and the "Don Amando" (formerly "Estancia"). Although released to petitioner as end-user, title remained in the name of the Reparations Commission.
The Commissioner of Customs assessed compensating tax on each vessel (P123,951.50 and P122,332.99). Petitioner appealed administratively to the Commissioner of Internal Revenue, who sustained the assessment. Thereafter petitioner filed two petitions for review with preliminary injunctions in the Court of Tax Appeals (C.T.A. Cases Nos. 955 and 960). The CTA granted preliminary injunctions, but on November 29, 1971 rendered a joint decision sustaining the assessment and ordering payment; its denial of petitioner’s motion for reconsideration followed on March 21, 1972.
Petitioner sought relief from the Supreme Court in earlier proceedings (G.R. Nos. L-35070-71) but the appeal was denied in a June 1, 1972 resolution; motions to remand were also denied. Meanwhile, petitioner sought renovation of its utilization contracts with the Reparations Commission but was refused (Resolutions No. 268 and No. 346, October 10 and December 13, 1972). After the Commissioner of Internal Revenue sent a demand letter (November 3, 1972) and petitioner failed to pay, P.D. No. 332 (amending the Reparations Law) became effective November 9, 1973.
Petitioner applied under P.D. No. 332 to restructure its delinquent accounts (letter dated February 4, 1974). The Commissioner of Internal Revenue moved for issuance of a writ of execution on June 20, 1974; the CTA granted the writ on October 11, 1974. On February 14, 1975 petitioner and the Reparations Commission executed a Memorandum of Agreement restructuring petitioner’s delinquent accounts under P.D. No. 332. Petitioner then moved (March 11, 1975) to quash the writ of execution, asserting that the Memorandum effectively renovated its utilization contracts and thus entitled it to exemption from compensating tax under the Reparations Law as amended. The CTA denied the motion in a resolution dated August 4, 1975.
Petitioner filed the present petition for review of the CTA resolution in the Supreme Court, attacking (1) the CTA’s view that a final and executory decision cannot be renovated, and (2) the CTA’s refusal to treat compliance with P.D. No. 332 as compliance with the renovation requirement of R.A. No. 3079 (the amendatory act to R.A. No. 1789). No separate concurring or dissenting opinions were filed.
Issues:
- May a final and executory judgment be renovated or novated by a subsequent agreement entered into by a nonparty such that execution of the judgment may be quashed?
- Does compliance with P.D. No. 332 (restructuring delinquent accounts) satisfy the renovation requirement in Section 20 of R.A. No. 3079 so as to entitle an existing end-user to exemption from compensating tax under R.A. No. 1789, as amended?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)