Case Digest (G.R. No. L-22337)
Case Digest (G.R. No. L-22337)
Facts:
Philippine Tobacco Flue-Curing and Redrying Corporation v. The Commissioner of Internal Revenue, G.R. No. L-22337. June 14, 1969, the Supreme Court En Banc, Dizon, J., writing for the Court. Intervenor: C. Noli Aragon.Petitioner Philippine Tobacco Flue-Curing and Redrying Corporation (PTFRC) applied on August 13, 1957 for a barter permit under Republic Act No. 1194 with the Agricultural and Cooperative Finance Corporation (ACCFA) to export about 14 million pounds of locally grown sun-dried Virginia tobacco in exchange for roughly 10 million pounds of U.S. Virginia leaf tobacco to be imported. Because importation of that U.S. tobacco was then banned by Central Bank regulations, the ACCFA indorsed the application to the President, who approved it by a letter dated January 13, 1958. Pursuant to the Presidential directive, the No-Dollar Import Office issued Barter Permit No. BT-1830 (Special) on January 21, 1958, stating inter alia that the permit would be valid until January 21, 1960, was non-transferable (“this PERMIT cannot be transferred, assigned or negotiated”), and was issued “in accordance with Section 1(d) of Republic Act 1410” (as shown on the permit form).
Pursuant to the permit and between June 1958 and January 4, 1960 petitioner received and landed at Manila 9,997,772 lbs. of U.S. Virginia and/or Burley leaf tobacco consigned to petitioner. Before customs released the commodity, petitioner indorsed the bills of lading in blank to various local cigarette manufacturers. Those manufacturers presented the shipping documents and obtained release from Customs without payment of the advance sales tax, relying on the bills of lading and the sales contracts with petitioner.
On May 20, 1960 the Commissioner of Internal Revenue assessed petitioner for P2,507,693.17 as advance sales tax on the imported tobacco. Petitioner’s request for reconsideration was denied; petitioner filed a petition for review with the Court of Tax Appeals (CTA) on September 3, 1960. The CTA, by decision dated December 28, 1963, affirmed the assessment. Petitioner appealed to the Supreme Court, contesting (inter alia) the CTA’s characterization of the indorsements as illegal and not in the ordinary course of business, the CTA’s finding that indorsements were not in good faith, the refusal to treat the cigarette manufacturers as the importers for tax purposes, and the CTA’s finding that the barter permit was issued on condition that petitioner pay the advance sales tax.
Issues:
- Are the Court of Tax Appeals’ factual findings — specifically that the indorsements were not in good faith and that the barter permit was issued on condition that advance sales taxes be paid — reviewable by this Court in the present appeal?
- Did petitioner lawfully cease to be the importer by indorsing the bills of lading in blank and allocating the imported tobacco to local cigarette manufacturers prior to customs release, or did petitioner remain the importer for tax purposes?
- Did the endorsement and delivery of shipping documents to local cigarette manufacturers validly shift the legal importership to those manufacturers so as to avoid payment of the advance sales tax?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)