Procter & Gamble Asia, Pte. Ltd. v. Commissioner of Internal Revenue

FIRST DIVISION [C.T.A. CASE NO. 7523. March 15, 2011.] PROCTER & GAMBLE ASIA PTE., LTD. , petitioner , vs . COMMISSIONER OF INTERNAL REVENUE , respondent . [C.T.A. CASE NO. 7556. March 15, 2011.] PROCTER & GAMBLE ASIA PTE., LTD. , petitioner , vs . COMMISSIONER OF INTERNAL REVENUE , respondent . RESOLUTION UY , J p : Before us is petitioner's "MOTION FOR RECONSIDERATION" filed on January 27, 2011, with respondent's "COMMENT/OPPOSITION (To Petitioner's Motion for Reconsideration)" filed on January 31, 2011 and petitioner's "REPLY (To Respondent's Comment/Opposition)" filed on February 14, 2011. Petitioner prays that the Decision dated January 17, 2011, dismissing the instant case for being prematurely filed, be set aside and that the said case be decided based on merits. In support thereof, petitioner raises the following arguments: (a) the decision of the First Division of the Supreme Court in the case of Aichi Forging Company of Asia, Inc. (Aichi case) , 1 relied upon by this Court in dismissing petitioner's case, overlooked, if not contravened Article VIII, Section 4(3) of the Philippine Constitution; (b) the doctrine laid down in the Aichi case (assuming it is constitutional), reversing existing doctrine passed upon and approved by the Supreme Court in a long line of cases, should be applied prospectively (not to cases pending at the CTA prior to Aichi case ) pursuant to Article 8 in relation to Article 4 of the Civil Code and existing jurisprudence; (c) the 120 day-30 day rule mentioned in Section 112 (D), now Section 112 (C), of the NIRC is directory or permissive not mandatory based on existing Court of Appeals and Supreme Court decisions; (d) the Aichi decision should yield to the pronouncement of the Supreme Court in BPI-Family Savings Bank case and subsequent cases, that substantial justice, equity and fair play prevail over technicalities and legalism; (e) the two year prescriptive period to file judicial claim under Section 229 of the National Internal Revenue Code (NIRC), as amended, will not entirely render Section 112 (D), now Section 112 (C), of the NIRC nugatory; and (f) the Supreme Court had ruled that while jurisdiction is conferred by law, estoppel sets in when a party participates in all stages of the case before challenging the jurisdiction of the lower court. cTCADI On the other hand, respondent counters that the doctrine in the Aichi case is the applicable doctrine and that this Court has the power to dismiss motu propio the instant petition on the ground of lack of jurisdiction. In reply, petitioner reiterates the prospective application of the Aichi case and also contends that its Motion for Reconsideration is not pro forma considering that the arguments and reasons therein were raised for the first time as the same never became an issue prior to the advent of the Aichi case . In summary, the issues for resolution before this Court are: (a) whether or not the doctrine in the Aichi case should be applied in this case; and (b) whether or not the active participation of respondent, without raising as an issue the lack of jurisdiction of this Court to entertain the instant case, would prevent this Court from dismissing the case motu proprio . Based on the arguments raised by both parties, We find in favor of respondent. The Aichi Case is applicable Petitioner tries to convince this Court not to apply the doctrine in the Aichi case . This, We cannot do. Only the Supreme Court itself can change or abandon a precedent enunciated by it; it cannot be done by an inferior court, nor even by the legislature except when the latter amends or repeals the law itself. 2 The Supreme Court, by tradition and in our system of judicial administration, has the last word on what the law is. 3 There is only one Supreme Court from whose decisions all other courts should take their bearings. 4 This Court is not barred from dismissing the instant case motu propio Petitioner asserts that since respondent actively participated without challenging the jurisdiction of this Court, this Court is now without authority to dismiss this case motu propio on the ground of estoppel by laches. In support thereof, petitioner cites the cases of Tijam vs. Sibonghanoy , 5 La'o vs. Republic of the Philippines , 6 and Bernardo vs. Heirs of Eusebio Villegas. 7 We are not persuaded. In order for this Court to apply the doctrine enunciated in the afore-cited cases, it must first be shown that the facts therein are substantially the same with the instant case, otherwise, the doctrine will not apply. After reviewing the said cases, We found that the commonality of facts in the afore-cited cases involve a party, who after actively participating in the proceedings before a court, seeks the reversal of that court's unfavorable decision by alleging its lack of jurisdiction. The facts in this case are different. It involves this Court's own initiative in dismissing the instant case on the ground of lack of jurisdiction. As such, We find no reason to apply the doctrine in the aforesaid cases. In addition, Section 1, Rule 9 of the Rules of Court, as amended, provides: "Rule 9 EFFECT OF FAILURE TO PLEAD SECTION 1. Defenses and objections not pleaded. Defenses and objections not pleaded either in a motion to dismiss or in the answer are deemed waived. However, when it appears from the pleadings or the evidence on record that the court has no jurisdiction over the subject matter , that there is another action pending between the same parties for the same cause, or that the action is barred by a prior judgment or by statute of limitations, the court shall dismiss the same." (Emphases supplied) The rules are clear; this Court has the power to motu propio dismiss a case on the ground of lack of jurisdiction. Courts are bound to take notice of the limits of their authority and they may, by their own motion, even though the question is not raised by the pleadings, or not even suggested by counsel, recognize the want of jurisdiction and act accordingly by staying pleadings, dismissing the action, or otherwise noticing the defect, at any stage of the proceedings. 8 WHEREFORE , premises considered, petitioner's Motion for Reconsideration is hereby DENIED for lack of merit. HEcaIC SO ORDERED. (SGD.) ERLINDA P. UY Associate Justice Ernesto D. Acosta, P.J. and Esperanza R. Fabon-Victorino, J., concur. Footnotes 1. Commissioner of Internal Revenue vs. Aichi Forging Company Asia, Inc. , G.R. No. 184823, October 16, 2010. 2. Agpalo, Statutory Construction, 2009 ed., p. 204. 3. Nacuray et al. vs. NLRC , G.R. Nos. 114924-27, March 18, 1997. 4. Commissioner of Internal Revenue vs. Michael J. Lhuiller Pawnshop, Inc. G.R. No. 150947, July 15, 2003. 5. 23 SCRA 29. 6. 479 SCRA 439, January 23, 2006. 7. 615 SCRA 466. 8. Ace Publications, Inc. vs. Commissioner of Internal Revenue , L-18808, May 29, 1964.