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

SPECIAL SECOND DIVISION [C.T.A. CASE NOS. 7581 & 7639. March 9, 2011.] PROCTER & GAMBLE ASIA, PTE. LTD. , petitioner , vs . COMMISSIONER OF INTERNAL REVENUE , respondent . RESOLUTION UY , J p : This resolves petitioner's "Motion for Reconsideration" filed on December 2, 2010, without respondent's comment/opposition despite due notice, seeking for the reconsideration of the Decision promulgated on November 17, 2010, the dispositive portion of which reads: " WHEREFORE , in view of the foregoing considerations, the instant Petitions for Review docketed as CTA Case Nos. 7581 and 7639 are hereby DISMISSED for having been prematurely filed." Petitioner raises the following grounds for this Court's reconsideration: I THE DECISION OF THE FIRST DIVISION OF THE SUPREME COURT IN THE CASE OF AICHI FORGING COMPANY OF ASIA, INC., RELIED UPON BY THE HONORABLE COURT IN DISMISSING PETITIONER'S CASE IS NOT YET FINAL; HENCE, THE DISMISSAL IS PREMATURE AND SPECULATIVE. II GRANTING FOR THE SAKE OF ARGUMENT THAT THE DECISION ON THE AFORESAID CASE HAS BECOME FINAL AND EXECUTORY, THE DOCTRINE LAID DOWN THEREIN, REVERSING EXISTING DOCTRINE PASSED UPON AND APPROVED BY THE SUPREME COURT IN A LONG LINE OF CASES SHOULD BE APPLIED PROSPECTIVELY (not to case pending at the CTA prior to AICHI decision) PURSUANT TO ARTICLE 8 IN RELATION TO ARTICLE 4 OF THE CIVIL CODE AND EXISTING JURISPRUDENCE. III 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. IV 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 FAIRPLAY PREVAIL OVER TECHNICALITIES AND LEGALISM. STECDc V THE CONSTITUTION PROVIDES THAT NO DOCTRINE OR PRINCIPLE OF LAW LAID DOWN BY THE SUPREME COURT IN A DECISION RENDERED EN BANC OR IN DIVISION MAY BE MODIFIED OR REVERSED EXCEPT BY THE COURT SITTING EN BANC. VI WITH DUE RESPECT TO THE SUPREME COURT IN THE AICHI CASE, THE TWO YEAR PRESCRIPTIVE PERIOD TO FILE JUDICIAL CLAIM UNDER SECTION 229 OF THE NIRC, AS AMENDED WILL NOT ENTIRELY RENDER SECTION 112 (D), NOW SECTION 112 (C), OF THE NIRC NUGATORY. VII 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. Since the foregoing grounds are interrelated, the Court shall delve into and resolve them simultaneously. Petitioner primarily seeks for the reconsideration of the assailed Decision on the ground that the case of Commissioner of Internal Revenue vs. Aichi Forging Company of Asia, Inc. 1 (Aichi case) is not applicable to the instant Petition for Review. However, the Court cannot adopt a similar view. First, it is relevant to stress that by tradition and in our system of judicial administration, the Supreme Court has the last word on what the law is, and that its decisions applying or interpreting the laws or the Constitution form part of the legal system of the country, all other courts should take their bearings from the decisions of this Court. 2 In fact, it is the duty of lower courts to obey the decisions of the Supreme Court and render obeisance to its status as the apex of hierarchy of courts. 3 Accordingly, this Court cannot deviate from the pronouncement of the Supreme Court in the Aichi case which set forth the outright application of the provisions under Section 112 (C) of the National Internal Revenue Code (NIRC) of 1997, as amended. Hence, the application by this Court of the Aichi case interpreting the provisions of the NIRC of 1997, as amended, is clearly justified. Petitioner also contends that the "120 day-30 day" rule mentioned in Section 112 (D), now Section 112 (C), of the NIRC is directory or permissive and not mandatory. DHaEAS We are not impressed. It has been held that where the enabling statute indicates a procedure for administrative review, and provides a system of administrative appeal, or reconsideration, the courts, for reason of law, comity and convenience, will not entertain a case unless the available remedies have been resorted to and the appropriate authorities have been given an opportunity to act and correct the errors committed in the administrative forum. 4 Furthermore, rules of procedure, especially those prescribing the time within which certain acts must be done, have oft been held as absolutely indispensable to the prevention of needless delays and to the orderly and speedy discharge of business. The reason for rules of this nature is because the dispatch of business by courts would be impossible, and intolerable delays would result, without rules governing practice. Such rules are a necessary incident to the proper, efficient and orderly discharge of judicial functions. 5 In this case, Section 112 of the NIRC of 1997, as amended, specifically prescribe the periods within which the administrative claim for refund and the judicial appeal of the Commissioner's action or inaction on the said refund claim may be filed. Therefore, compliance with the periods provided therein is considered to be imperative and mandatory. At this juncture, it must be pointed out that the right to appeal is not a natural right or part of due process; it is merely a statutory privilege that has to be exercised only in the manner and in accordance with the provisions of law. The party who seeks to avail of the same must comply with the requirements of the rules. 6 Failing to do so, the right to appeal is lost. Verily, this Court committed no reversible error in finding that petitioner's premature filing of the Petition for Review due to its non-observance of the periods provided under Section 112 (C) of the NIRC of 1997, as amended; failed to effectively clothe this Court with jurisdiction to take cognizance of the instant case. Finding no cogent reason to reverse our previous ruling in the assailed Decision, this Court is left with no recourse but to deny the instant Motion . WHEREFORE , the instant Motion for Reconsideration is hereby DENIED for lack of merit. SO ORDERED. IaECcH (SGD.) ERLINDA P. UY Associate Justice Juanito C. Castaeda, Jr. and Olga Palanca-Enriquez, JJ., concur. Footnotes 1. G.R. No. 184823, October 6, 2010. 2. Caram Resources Corp. vs. Judge Maximo C. Contreras, Metc, Branch 61, Makati, Metro Manila , A.M. No. MTJ-93-849, October 26, 1994. 3. Commission on Higher Education vs. Atty. Felina S. Dasig , G.R. No. 172776, December 17, 2008. 4. Teotico vs. Agda , G.R. No. 87437, May 29, 1991. 5. Producers Bank of the Philippines vs. Honorable Court of Appeals, et al. , G.R. No. 126620. April 17, 2002; 381 SCRA 185. 6. Supra.