G.R. No. 209324 - Republic vs. Pilipinas Shell Petroleum Corporation

The case involves the Republic of the Philippines, represented by the Bureau of Customs (BOC), as petitioner, and Pilipinas Shell Petroleum Corporation (PSPC) as respondent, with Filipino Way Industries (FWI) also implicated.
PSPC, a domestic corporation registered with the Board of Investments, is engaged in the importation, refining, and sale of petroleum products.

Filipino Way Industries (FWI) executed a Deed of Assignment on May 7, 1997, transferring several Tax Credit Certificates (TCCs) to PSPC with a total face value of P10,088,912.00.
The TCCs were accepted by the Bureau of Customs, based on the belief that they were good and valid, and PSPC used them to settle customs duties and taxes on its oil importations.
The One-Stop Shop Inter-Agency Tax Credit and Duty Drawback Center, composed of representatives from the Department of Finance (DOF), BOI, BOC, and Bureau of Internal Revenue (BIR), oversees the processing and transfer of TCCs.

On November 3, 1999, the Center, via then Finance Secretary, informed both the BIR and Customs Commissioner that several Tax Debit Memos (TDMs) issued against PSPC and other companies were based on TCCs found to have been fraudulently issued and transferred.
The Center’s findings led to the cancellation of the TCCs utilized by PSPC. It demanded payment from the oil companies corresponding to the amount represented by the TCCs, including penalties, surcharges, and interests.

On April 3, 2002, the Republic, through the BOC, filed a collection suit in the Regional Trial Court (RTC) of Manila, Branch 49, for the recovery of P10,088,912.00, representing unpaid duties and taxes after the cancellation of the TCCs.
PSPC challenged the jurisdiction of the RTC and argued that the collection complaint was premature given its pending petition for review before the Court of Tax Appeals (CTA).
The RTC denied PSPC’s motion to dismiss and proceeded with pre-trial, resulting in further motions for summary judgment and reconsideration by PSPC.

Initially, the RTC granted summary judgment in favor of PSPC, finding no genuine issues of fact regarding the utilization of the TCCs, notably after a reversal of its earlier denial on motion for summary judgment.
PSPC then sought appellate relief by petitioning for certiorari before the Court of Appeals (CA) and later before the Supreme Court, challenging both the mode of appeal and the substance of the summary judgment.
The CA affirmed the RTC’s orders on summary judgment and rejected arguments regarding jurisdiction, the prescriptive period, and the applicability of the precedent set in Pilipinas Shell Petroleum Corporation v. CIR.

Petitioner (the Republic) contended that the TCCs were fraudulently issued and transferred, and that relying on the previous ruling in Pilipinas Shell Petroleum Corporation v. CIR was misplaced because that decision involved deficiency taxes and not a civil collection case.
Respondent (PSPC) argued that it acted as a bona fide transferee in good faith and for value, having relied on the approval of the TCC transfers by the Center.
The proceedings involved crucial issues on whether the summary judgment was proper, whether pure questions of law were raised that warranted a petition for review on certiorari under Rule 45, and whether prescription barred the Republic’s cause of action.

Whether the appeal raised by the Republic involves purely questions of law, making the remedy a petition for review on certiorari under Rule 45 rather than an appeal under Rule 41.
Whether the erroneous mode of appeal (filing a notice of appeal instead of a petition for review) automatically renders the judgment final and executory.

Whether the RTC properly rendered summary judgment on the basis that no genuine factual issues existed regarding PSPC’s status as a transferee in good faith and for value.
Whether the issue of alleged fraud in the issuance and transfer of the TCCs, which necessitates the presentation of evidence at trial, should have precluded the rendering of summary judgment.

Whether Pilipinas Shell Petroleum Corporation v. CIR should control the present case under the doctrine of stare decisis, considering the factual distinctions between the cases.
Whether the previous decision meant to confer an absolute presumption of good faith on PSPC, thereby barring any inquiry into fraud.

Whether the Republic’s cause of action is barred by prescription, given that the collection suit was filed several years after the TCCs had been utilized for payment, seemingly exceeding the one-year prescriptive period.