Case Digest (G.R. No. 210251)
Facts:
Secretary of Finance Cesar V. Purisima and Commissioner of Internal Revenue Kim S. Jacinto‑Henares v. Philippine Tobacco Institute, Inc., G.R. No. 210251, April 17, 2017, Supreme Court Second Division, Carpio, J., writing for the Court.
On 20 December 2012, President Aquino signed Republic Act No. 10351 (the Sin Tax Reform Law), which amended Section 145(C) of the National Internal Revenue Code (NIRC) to restructure excise taxes on cigarettes. Section 145(C) set excise rates “per pack” for cigarettes packed by machine and expressly permitted such cigarettes to be “packed in twenties and other packaging combinations of not more than twenty.” The statute directed that the rates be increased thereafter by revenue regulations issued by the Secretary of Finance.
On 21 December 2012, the Secretary of Finance, upon the recommendation of the Commissioner of Internal Revenue (CIR), issued Revenue Regulations No. 17‑2012 (RR 17‑2012). Section 11 of RR 17‑2012 provided that where cigarettes were packed in combinations not exceeding 20 sticks (e.g., 5s, 10s), the net retail price of each individual small package (each 5s or 10s pouch) would be the basis for imposing the tax. Thereafter, on 27 December 2012 the CIR issued Revenue Memorandum Circular No. 90‑2012 (RMC 90‑2012) whose Annex “D‑1” listed specific brands and converted certain 2010 Bureau of Internal Revenue (BIR) survey prices into per‑pouch prices pursuant to Section 11.
PMFTC, Inc., a member of Philippine Tobacco Institute, Inc. (PTI), paid the excise taxes necessary to withdraw cigarettes but notified the CIR (in a written protest dated as in the source) that payment was made under protest. On 26 February 2013, PTI filed a petition for declaratory relief with application for preliminary injunction in the Regional Trial Court (RTC) of Las Piñas City, docketed as SCA Case No. 13‑0003, seeking to declare RR 17‑2012 §11 and Annex “D‑1” of RMC 90‑2012 null and void insofar as they imposed excise tax on individual pouches of 5s and 10s that are bundled into packaging combinations not exceeding 20 sticks.
By Decision dated 7 October 2013, the RTC, Branch 253, Las Piñas City granted the petition and declared the assailed portions of RR 17‑2012 and RMC 90‑2012 null and void, ordering respondents to cease and desist from implementing Section 11 and the Annex “D‑1” insofar as cigarettes packed by machine were concerned, and holding that the tax under RA 10351 should be imposed on the whole packaging combination of 20 sticks regardless of internal pouching. The Secretary of Finance and the CIR sought review in the Supreme Court by a petition for review on certiorari under Rul...(Pro-only)
Issues:
- Did the RTC err in nullifying Section 11 of RR 17‑2012 and Annex “D‑1” of RMC 90‑2012 insofar as those issuances impose excise tax on packaging combinations of 5’s, 10’s, etc., not exceeding 20 sticks, when RA 10351 taxes “per pack” of cigarette...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
- (Pro-only)
Doctrine:
- (Pro-only)