Harte-Hanks Philippines, Inc. v. Commissioner of Internal Revenue

FIRST DIVISION [C.T.A. CASE NOS. 7894 and 7941. August 13, 2012.] HARTE-HANKS PHILIPPINES, INC. , petitioner , vs . COMMISSIONER OF INTERNAL REVENUE , respondent . RESOLUTION UY , J p : For resolution is petitioner's " MOTION FOR RECONSIDERATION " filed on April 26, 2012, without respondent's comment thereto despite due notice, praying for the reversal of the Decision of this Court promulgated on March 29, 2012, the dispositive portion of which reads: IEAacT " WHEREFORE , premises considered, the instant Petitions for Review are hereby DISMISSED for lack of jurisdiction. SO ORDERED ." In support of its Motion for Reconsideration, petitioner raises the following points: "1. As held by this Court in Deutsche Knowledge Services Pte. Ltd. v. Commissioner of Internal Revenue 1 and CE Casecnan Water and Energy Company, Inc. v. Commissioner of Internal Revenue 2 as well as by the Court of Tax Appeals (CTA) En Banc in the case of UCPB Properties, Inc. v. Commissioner of Internal Revenue , 3 the premature filing of the judicial claim for refund is not jurisdictional but merely constitutes a failure to state a cause of action; 2. Respondent waived her right to raise the defense of failure to state a cause of action in her Answer; 3. The Aichi case did not overturn the ruling of the Supreme Court in A tl as Consolidated Mining and Development Corporation v. Commissioner of Internal Revenue , where the Supreme Court stated that Section 229, 1997 TaxCode applies to claims for refunds of value-added tax (VAT); and 4. Assuming arguendo that Aichi is applicable, the same should be applied prospectively." THE COURT'S RULING The Motion is bereft of merit. The arguments raised by petitioner in its Motion for Reconsideration have already been exhaustively passed upon by this Court in its assailed Decision. SaHTCE Previous rulings of this Court cannot prevail over the doctrine laid down by the Supreme Court. Petitioner invokes certain decisions of this Court in previous cases to persuade Us that the non-compliance with the 120-day period is not jurisdictional. However, said cases cannot be used as precedents in deciding the instant case, especially if to do so would run counter to a doctrine laid down by the Supreme Court. This must be so because the Supreme Court, by tradition and in Our system of judicial administration, has the last word on what the law is. It is the final arbiter of any justiciable controversy. 4 Thus, Our adherence to the doctrine laid down in the case of Commissioner of Internal Revenue vs. Aichi Forging Company of Asia, Inc. 5 (hereinafter referred to as the "Aichi case") is imperative. For this Court to rule otherwise would be to transgress the Constitution and arrogate upon itself a power that it does not by law possess. 6 As between the doctrines laid down in the A tl as case and the Ai ch i case, the latter should be followed. Petitioner is of the view that since the Aichi case was decided later by a Division of the Supreme Court, it could not have validly overturned the doctrine laid down in the previous case of Atlas Consolidated Mining and Development Corporation vs. Commissioner of Internal Revenue 7 (hereinafter referred to as the "Atlas case"). We agree. However, as between the two (2) different doctrines, We hereby adhere to the Aichi case in deciding the instant case as it involves a refund claim under Section 112 of the National Internal Revenue Code (NIRC) of 1997. To reiterate, the Atlas case was decided interpreting the pertinent provisions of the NIRC of 1977 [Presidential Decree No. (PD) 1158], as amended by Executive Order No. (EO) 273 8 (the law then in force), which took effect on January 1, 1988. 9 Upon the other hand, the Aichi case pertained to the refund/credit of input VAT for the period July 1, 2002 to September 30, 2002. Hence, it was decided applying and interpreting the said Section 112 of the NIRC of 1997, which took effect on January 1, 1998. 10 The interpretation of Section 112 of the N I RC of 1997 by the Supreme Court in the Ai ch i case constitutes as part of the law of the land as of the date it was originally passed. Petitioner's contention that the Aichi case should be applied prospectively is without merit. The Supreme Court's interpretation of a statute constitutes part of the law as of the date it was originally passed since it merely establishes the contemporaneous legislative intent that the interpreted law carried into effect. 11 In Columbia Pictures, Inc., et al. vs. Court of Appeals, et al. , 12 the very decision relied upon by petitioner, the Supreme Court qualified this principle, to wit: "It is consequently clear that a judicial interpretation becomes a part of the law as of the date that law was originally passed, subject only to the qualification that when a doctrine of this Court is overruled and a different view is adopted, and more so when there is a reversal thereof, the new doctrine should be applied prospectively and should not apply to parties who relied on the old doctrine and acted in good faith. To hold otherwise would be to deprive the law of its quality of fairness and justice then, if there is no recognition of what had transpired prior to such adjudication." IHDCcT Based on the foregoing, the general rule is that judicial interpretation becomes part of the law as of the date it was originally passed, and the exception thereto is that when a doctrine laid down by the High Court is subsequently overruled or reversed, in which case, the new doctrine will only be applied prospectively. As We have already stated, and to which petitioner agrees, the Aichi case did not overrule or reverse any existing doctrine laid down by the Supreme Court. This must be so because the doctrinal pronouncement in the said case was not rendered by the Supreme Court En Banc , but by a Division thereof ( i.e. , by its First Division). Relative thereto, it must be recalled that Section 4 (3), Article VIII of the 1987 Constitution provides that "no doctrine or principle of law laid down by the court in a decision rendered en banc or in division may be modified or reversed except by the court sitting en banc ". 13 If the said First Division of the High Court indeed intended to modify or reverse any existing doctrine or principle of law, it could have easily referred the case to the Court En Banc in accordance with Circular No. 2-89 14 dated February 7, 1989, but it did not. Such being the case, the interpretation of Section 112 of the NIRC of 1997 as embodied in the Aichi case constitutes part of the law of the land as of the date it was originally passed, i.e. , on January 1, 1998. 15 WHEREFORE , premises considered, petitioner's Motion for Reconsideration is hereby DENIED for lack of merit. SO ORDERED . (SGD.) ERLINDA P. UY Associate Justice Ernesto D. Acosta, P.J. and Esperanza Fabon-Victorino, J., concur. Footnotes 1. CTA Case No. 7695, March 7, 2011. 2. CTA Case No. 7891, May 19, 2011. 3. CTA EB Case No. 568, Resolution dated April 20, 2011. 4. Nacuray, et al. vs. National Labor Relations Commission, et al. , G.R. Nos. 114924-27, March 18, 1997. 5. G.R. No. 184823, October 6, 2010. 6. See Republic of the Philippines vs. Maj. Gen. Garcia , G.R. No. 167741, July 17, 2007. 7. G.R. Nos. 141104 and 148763, June 8, 2007. 8. ADOPTING A VALUE-ADDED TAX, AMENDING FOR THIS PURPOSE CERTAIN PROVISIONS OF THE NATIONAL INTERNAL REVENUE CODE, AND FOR OTHER PURPOSES. 9. Section 30, Executive Order No. 273, series of 1987. 10. Section 8, Republic Act No. 8424. 11. Victorias Milling Co., Inc. vs. Intermediate Appellate Court, et al. , G.R. No. 66880, August 2, 1991. 12. G.R. No. 110318, August 28, 1996. 13. Underscoring supplied. 14. SUBJECT: GUIDELINES AND RULES IN THE REFERRAL TO THE COURT EN BANC OF CASES ASSIGNED TO A DIVISION. 15. Section 8, Republic Act No. 8424.