Case Digest (G.R. No. 109976) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In Philippine National Oil Company v. Court of Appeals, PNOC placed funds with the Philippine National Bank (PNB) from October 1984 to October 1986. Under Presidential Decree No. 1931, PNOC lost its tax exemptions as of June 1984, yet PNB failed to withhold the 15 percent final tax on interest income. In June 1986 PNOC offered to set off its tax liability (~₱304 million) against a claim for refund/credit of the National Power Corporation (₱335 million). The Bureau of Internal Revenue (BIR) then demanded payment from PNB (₱376 million) and PNOC reiterated a set-off proposal. In June 1987 PNOC shifted tactics and offered a compromise under Executive Order No. 44, paying 30 percent of the basic tax (~₱91 million). The BIR Commissioner accepted, and PNOC paid ₱93.96 million, allowing Savellano—an informer who prompted the inquiry—to receive ₱14.09 million (15 percent of the amount collected). Savellano later claimed the full 15 percent on the original deficiency (₱385.96 million), s Case Digest (G.R. No. 109976) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Consolidation and Origin
- Two Petitions for Review on Certiorari filed by PNOC (G.R. No. 109976) and PNB (G.R. No. 112800) against CA decisions in CA-G.R. SP Nos. 29583 and 29526, affirming CTA Case No. 4249.
- Private respondent Tirso B. Savellano’s sworn information (24 June 1986) to the BIR led to investigation of PNOC’s money placements with PNB.
- BIR Actions and Compromise
- BIR demand letters (8 Aug 1986 to PNOC; 8 Oct 1986 to PNB) assessed PNOC’s basic tax liability at ₱304.4 M (plus interest/surcharges) and PNB’s withholding tax at ₱376.3 M.
- PNOC’s compromise proposals:
- Sept–Oct 1986: Offset its tax liability against NAPOCOR’s refund claim (rejected as premature).
- 9 June 1987: Offer to pay 30% of basic tax (₱91.0 M) under EO 44; accepted by Commissioner Tan (22 June 1987).
- PNOC paid ₱93.96 M; PNB paid prior withholding. Savellano received ₱14.09 M (15% of amount collected).
- Post-Compromise Events
- Savellano’s demand for balance reward (₱43.80 M) denied by Commissioner Tan; he filed Petition for Review ad cautelam with the CTA (8 April 1988).
- New Commissioner Ong (16 Jan 1991) revoked compromise as without legal basis and issued demand to PNB for ₱294.96 M; PNB’s protest denied.
- CTA (28 May 1992) ruled compromise void, ordered enforcement of 8 Oct 1986 assessment against PNB, and additional informer’s reward ₱44.24 M; CA affirmed; PNOC/PNB filed certiorari.
Issues:
- Whether the CTA had jurisdiction over Savellano’s Petition.
- Whether the EO 44 compromise agreement is valid and binding.
- Whether the 8 Oct 1986 withholding tax assessment against PNB is final and enforceable.
- Whether Savellano is entitled to the additional informer’s reward.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)