Anti-Graft League of the Philippines (AGLP)

August 4, 1997 BIR RULING [DA-259-97] MEMORANDUM FOR : The Commissioner RE : Anti-Graft League of the Philippines (AGLP) This refers to the request of AGLP dated March 13, 1997 for the modification/amendment of the dispositive part of BIR Ruling No. 048-93 dated January 22, 1993 to the effect that the same be given a retroactive effect. It may be recalled that in BIR Ruling No. 048-93 , a case pertaining to LTI, this Bureau revoked its earlier Ruling numbered 206-91 dated October 4, 1991 and essentially adhered to the principle of the ''prospective nature of revocatory rulings", thus: " In view thereon, and considering the fact that the Department of Justice has rendered an opinion (Opinion No. 122, S1992 dated September 21, 1992) declining to rule on the issue of your eligibility to be registered with the Board of Investments as a preferred non-pioneer enterprise, BIR Ruling No. 50(h)-000-00-205-91 dated October 4, 1991 IS HEREBY REVOKED. It is understood, however, that the revocation is prospective; hence, it will not affect your transaction between October 4, 1991 and the issuance of this ruling ." Such pronouncement, in effect, overturned and nullified the dispositive portion of BIR Ruling No. 206-91 which states: AICDSa " Therefore, this Office hereby certifies that the Laguna Technopark, Inc. NEED NOT PAY the creditable withholding tax on the sale of its industrial lots sharing the four years that said enterprise is enjoying an income tax holiday, effective February 28, 1991 ." Having issued these two (2) rulings, AGLP comes now before us to request for the modification of BIR Ruling No. 048-93 to give the latter a retroactive application. In answer to AGLP's request, the Law Division, thru the Legal Service, drafted a proposed Ruling which to date remains unsigned, denying AGLP's request to modify/amend BIR Ruling No. 048-93 for lack of legal basis. In the interim, AGLP thru Col. Cornelio D. De Guzman, furnished a copy of the Supreme Court Decision in CIR vs. CTA, Eastern Extension Australasia (195 SCRA 444) believing that the same is a case in point that may assist in the resolution of the issue now before this Office. Again, the Law Division, thru the Legal Service, in its drafted Ruling acted adversely on the request after finding that the case of CIR vs. CTA , Eastern Extension is obviously off tangent. We agree. The facts of the case and the issues involved in Eastern are not the same as that case of LTI. That being the case, that Decision has no relevance at all in the case at hand. Furthermore, a ruling approved and issued at one point in time with the trimmings of regularity remains valid until further revoked, and therefore should not be disturbed unless based on valid, legal grounds. If such ruling is revoked later on, we are not constrained to re-open the issue unless revocation/reversal/modification is warranted under any of the conditions set forth under Sec. 246 of the Tax Code, as amended. In view thereof, we believe that the Law Division is correct in recommending the denial of AGLP's request and we concur with them in toto . (SGD.) SIXTO S. ESQUIVIAS IV OIC, Asst. Commissioner Legal Service