Power Sector Assets and Liabilities Management Corp. v. Commissioner of Internal Revenue

EN BANC [C.T.A. EB CASE NO. 1282. May 17, 2016.] (C.T.A. Case No. 8475) POWER SECTOR ASSETS AND LIABILITIES MANAGEMENT CORPORATION , petitioner , vs. COMMISSIONER OF INTERNAL REVENUE , respondent . DECISION MINDARO-GRULLA , J p : Submitted for decision is a Petition for Review for the Court En Banc under Rule 4, Section 2 (a) (1), in relation to Rule 8, Section 4 (b) of the 2005 Revised Rules of the Court of Tax Appeals (RRCTA), 1 as amended, of the Decision 2 dated December 2, 2014, rendered by the Third Division of this Court in CTA Case No. 8475, and its Resolution 3 dated February 25, 2015. The Third Division of this Court held that petitioner Power Sector Assets and Liabilities Management Corporation is liable for Value Added Tax (VAT). Petitioner assailed both the aforesaid Decision and Resolution, the dispositive portions of which, respectively, read as follows: Decision dated December 2, 2014: " WHEREFORE , premises considered, the instant Petition for Review is hereby PARTIALLY GRANTED . Accordingly, the assessments issued by respondent against petitioner covering taxable year 2008 for deficiency value added tax are UPHELD but in the MODIFIED AMOUNT of NINE BILLION FIVE HUNDRED SIXTY SIX MILLION SIXTY TWO THOUSAND FIVE HUNDRED SEVENTY ONE and 44/100 PESOS (P9,566,062,571.44) , inclusive of twenty percent (20%) interest imposed upon Section 249(A) of the Tax Code, as amended. In addition, petitioner is hereby ORDERED TO PAY : a) Deficiency interest at the rate of 20% per annum on the basic deficiency VAT of P6,439,713,829.91 computed from June 30, 2011 until full payment thereof pursuant to Section 249(B) of the NIRC of 1997; b) Delinquency interest at the rate of 20% per annum on the basic deficiency VAT of P6,439,713,829.91 June 30, 2011 51 n until full payment thereof pursuant to Section 249 (C) (3) of the NIRC of 1997, as amended; and c) Delinquency interest at the rate of 20% per annum on the deficiency interest which have accrued as afore-stated in (a) computed from June 30, 2011 until full payment thereof pursuant to Section 249(C)(3) of the NIRC of 1997, as amended. SO ORDERED. " Resolution dated February 25, 2015: " WHEREFORE , premises considered, respondent Commissioner of Internal Revenue's "Motion for Reconsideration" is hereby DENIED for lack of merit. SO ORDERED. " The pertinent facts as narrated by this Court's Division in its Decision read as follows: " Petitioner is a Philippine government-owned entity created under Section 49 of Republic Act (R.A.) No. 9136, otherwise known as the Electric Power Industry Reform Act of 2001 (EPIRA) which took ownership of all existing National Power Corporation (NPC) generation assets, liabilities, Independent Power Producer (IPP) contracts, real estate and all other disposable assets. Furthermore, it was mandated to manage the orderly sale, disposition, and privatization of NPC generation assets, real estate and other disposable assets, and IPP contracts with the objective of liquidating all NPC financial obligations and stranded contract costs in an optional manner. Respondent is the duly appointed Commissioner of Internal Revenue (CIR), vested with authority to carry out all the functions, duties and responsibilities of the Bureau of Internal Revenue (BIR), including inter alia, the power to decide, approve and grant claims for refund or tax credit of internal revenue taxes. She holds office at the BIR National Office Building, Agham Road, Diliman, Quezon City where she may be served with notices and other processes of this Honorable Court. On June 9, 2011, respondent issued a Final Assessment Notice (FAN) covered by Assessment VT-08-00072, alleging that for the taxable year-ending December 31, 2008, petitioner has an alleged deficiency VAT of P10,103,158,715.06, inclusive of penalties and interest, . . . : xxx xxx xxx. On July 7, 2011, petitioner filed its administrative protest against the FAN with the Large Taxpayers Service (LTS) of the LT Audit and Investigation Division II (LTAID) of the BIR. On September 5, 2011, petitioner filed its supplemental protest reiterating its substantive defenses. On March 19, 2012, respondent issued the Final Decision on the Disputed Assessment (FDDA) denying petitioner's protest for lack of factual and legal basis. Aggrieved thereby, petitioner filed herein Petition for Review. In her Answer, respondent interposed the following special and affirmative defenses: (1) petitioner PSALM is liable to pay deficiency VAT for failure to declare gross receipts subject to VAT in its VAT returns for the year-ending December 31, 2008; (2) Section 105 of the Tax Code, as amended, provides that any person who in the course of trade or business, sells, barters, exchanges, leases goods or properties and renders services shall be subject to VAT imposed in Sections 106 and 108 of the same code; and, (3) Revenue Regulations (RR) No. 04-2007, amending relevant provisions of RR No. 16-2005, subjected to VAT the sale of real properties not primarily held for sale or for lease but used in business. On August 3, 2012, respondent filed her Pre-Trial Brief. Petitioner, on the other hand, filed its Pre-Trial Brief on August 14, 2012. Thereafter, both parties submitted their Joint Stipulation of Facts and Issues (JSFI) on September 26, 2012. However, this Court in a Resolution dated October 2, 2012, directed both parties to submit a Supplemental Joint Stipulation of Facts and Issues since their initial JSFI failed to indicate the list of documents and witnesses for presentation as well as the hearing dates agreed upon. In compliance, both parties submitted their Supplemental Joint Stipulation of Facts and Issues on November 5, 2012. Still feeling the need to include additional documents, the parties further submitted a Second Supplemental Joint Stipulation of Facts and Issues on January 30, 2013. This Court approved the same in our (sic) [a] Resolution dated February 20, 2013. Accordingly, this Court issued a Pre-Trial Order on March 1, 2013, declaring the pre-trial terminated and ordering petitioner to proceed with the initial presentation of its evidence. On April 3, 2013, this Court issued an Order transferring the case to this Court's Third Division, chaired by Hon. Lovell R. Bautista, pursuant to CTA Administrative Circular No. 01-2013. On June 24, 2013, petitioner filed its Formal Offer of Evidence, offering Exhibits "A" to "AAAAA", inclusive of sub-markings. In response, respondent filed her Comment (Re: Petitioner's Formal Offer of Evidence) on July 9, 2013, stating she has no objection to the admission of petitioner's enumerated exhibits, without however, necessarily admitting the materiality, relevancy, and probative value as well as the validity of the purpose for which the said exhibits were offered in evidence. In a Resolution dated July 15, 2013, this Court admitted all exhibits formally offered by petitioner and deemed the latter to have rested its case. Then, on September 24, 2013, respondent filed her Formal Offer of Evidence, offering Exhibits "R-1" to "R-18", inclusive of sub-markings. In its Comment, petitioner objected to the admission of respondent's formal offer of evidence for being baseless and self-serving. In the October 17, 2013 Resolution, this Court admitted all of respondent's exhibits and further ordered both parties to submit their respective memoranda within thirty (30) days thereafter. On December 6, 2013, petitioner submitted its Memorandum, while respondent submitted her Memorandum on December 20, 2013. Thus, this Court, in a Resolution dated January 2, 2014, deemed the case submitted for decision. On December 2, 2014, this Court's Division partially granted the petition. This Court's Division held that BIR Ruling No. 20-2002 has been superseded by the enactment of R.A. No. 9337, 4 making petitioner liable for deficiency VAT. Accordingly, the assessments issued by respondent against petitioner covering the taxable year 2008 for deficiency value added tax were upheld but in a modified amount. CAIHTE Petitioner filed a Motion for Reconsideration. Said motion was denied for lack of merit. Hence, the present petition. Petitioner raised the following issues: "A. WHETHER PSALM IS LIABLE FOR VAT ON SALE OF GENERATING ASSETS. B. WHETHER PSALM IS LIABLE FOR VAT ON THE LEASE OF NAGA COMPLEX. C. WHETHER PSALM IS LIABLE FOR VAT ON THE COLLECTION OF INCOME. D. WHETHER PSALM IS LIABLE FOR VAT ON COLLECTION OF RECEIVABLES." Petitioner claims that the findings of this Court's Division lack factual and legal basis. Petitioner maintains that its privatization activities such as the sale of power, as mandated by the EPIRA, are not conducted in the ordinary course of trade or business. Petitioner argued that its privatization activities are a government undertaking coursed through petitioner. In sum, petitioner insists that it is not liable for VAT on sale of generating assets, lease of Naga Complex, collection of income and receivables on the ground that these do not arise in the ordinary course of trade or business. Thereafter, the Court directed the parties to file their respective memoranda. Petitioner filed its memorandum on August 14, 2015 while respondent failed to file her memorandum. Thus, in a Resolution dated September 11, 2015, the case was submitted for decision. The pivotal issue is whether petitioner's sale of generating assets, lease of Naga Complex, collection of income and receivables are done in the ordinary course of trade or business in order for it to be liable to VAT. Stated differently, the issue is whether petitioner is liable to pay the deficiency VAT of P9,566,062,571.44 and the assessed interest. We resolve. Petitioner Power Sector Assets and Liabilities Management Corporation (PSALM) is a government-owned and controlled corporation created by virtue of Republic Act No. 9136, otherwise known as the Electric Power Industry Reform Act (EPIRA) of 2001, 5 which shall take ownership of all existing NPC generation assets, liabilities, IPP contracts, real estate and all other disposable assets. Likewise, all outstanding obligations of the NPC arising from loans, issuances of bonds, securities and other instruments of indebtedness were transferred to and assumed by petitioner PSALM Corp. Its principal purpose is to manage the orderly sale, disposition, and privatization of the National Power Corporations (NPCs) generation assets, real estate and other disposable assets, and Independent Power Producer (IPP) contracts, with the objective of liquidating all NPC financial obligations and stranded contract costs in an optimal manner. 6 Thus, petitioner's claim that its transactions are not "in course of trade or business" since the privatization activities is not in pursuit of any commercial or profitable activity, citing the case of CIR vs. Magsaysay Lines, Inc. 7 Petitioner is subject to VAT and the sale of generating assets, lease of Naga Complex, collection of income and receivables are done in the course of trade or business. Section 105 of the National Internal Revenue Code of 1997, as amended provides that: Sec. 105. Persons Liable. Any person who, in the course of trade or business, sells, barters, exchanges, leases goods or properties, renders services, and any person who imports goods shall be subject to the value-added tax (VAT) imposed in Sections 106 and 108 of this Code. The value-added tax is an indirect tax and the amount of tax may be shifted or passed on to the buyer, transferee or lessee of the goods, properties or services. This rule shall likewise apply to existing sale or lease of goods, properties or services at the time of the effectivity of Republic Act No. 7716. The phrase "in the course of trade or business" means the regular conduct or pursuit of a commercial or an economic activity, including transactions incidental thereto, by any person regardless of whether or not the person engaged therein is a nonstock, nonprofit organization (irrespective of the disposition of its net income and whether or not it sells exclusively to members of their guests), or government entity. The rule of regularity, to the contrary notwithstanding, services as defined in this Code rendered in the Philippines by nonresident foreign persons shall be considered as being rendered in the course of trade or business. (Emphasis supplied) The phrase "in course of trade or business" is defined as the regular conduct or pursuit of a commercial or an economic activity, including transactions incidental thereto by any person or government entity. In the case of CIR vs. Magsaysay Lines, Inc. , 8 The Supreme Court had the occasion to rule on what is not "in course of trade or business". The Supreme Court held that the sale of a vessel was an isolated transaction since it was involuntary, made pursuant to the declared policy of government for privatization and could no longer be repeated or carried on with regularity is not in the course of trade or business, to wit: "That the sale of the vessels was not in the ordinary course of trade or business of NDC was appreciated by both the CTA and the Court of Appeals, . . . . We cite with approval the CTA's explanation on this point: In Imperial v. Collector of Internal Revenue , G.R. No. L-7924, September 30, 1955 (97 Phil. 992), the term carrying on business does not mean the performance of a single disconnected act, but means conducting, prosecuting and continuing business by performing progressively all the acts normally incident thereof; while doing business conveys the idea of business being done, not from time to time, but all the time. [J. Aranas, UPDATED NATIONAL INTERNAL REVENUE CODE (WITH ANNOTATIONS), pp. 608-9 (1988)]. Course of business is what is usually done in the management of trade or business. [ Idmi v. Weeks & Russel , 99 So. 761, 764, 135 Miss. 65, cited in Words & Phrases, Vol. 10, (1984)]. What is clear therefore, based on the aforecited jurisprudence, is that course of business or doing business connotes regularity of activity. In the instant case, the sale was an isolated transaction. The sale which was involuntary and made pursuant to the declared policy of Government for privatization could no longer be repeated or carried on with regularity. It should be emphasized that the normal VAT-registered activity of NDC is leasing personal property. This finding is confirmed by the Revised Charter of the NDC which bears no indication that the NDC was created for the primary purpose of selling real property. The conclusion that the sale was not in the course of trade or business, which the CIR does not dispute before this Court, should have definitively settled the matter. Any sale, barter or exchange of goods or services not in the course of trade or business is not subject to VAT. " Thus, petitioner argued that PSALM's privatization activities is not in the course of trade or business as each sale is considered an isolated transaction not subject to VAT. However, the abovementioned jurisprudence is not in all fours with the instant case. While both sales were made pursuant to the declared policy of government for privatization, the sale in the instant case cannot be considered as isolated transaction. In the instant case, the sale of the National Power Corporation's (NPC's) generation assets, real estate and other disposable assets, and Independent Power Producer (IPP) contracts in an optimal manner is the main mandate of petitioner while in the case of CIR vs. Magsaysay Lines, Inc. , 9 there was no indication that NDC was created for the primary purpose of selling real property and that the normal VAT-registered activity of NDC is leasing personal property. Conducting, prosecuting and continuing the sale, disposition, and privatization of the National Power Corporation (NPC) by performing progressively all the acts normally incident thereof to optimize the value and sale prices of these assets is the principal purpose for which petitioner was created . It is for this purpose that that the sale, disposition, and privatization of the National Power Corporation (NPC) be in the optimal manner, mainly not for a loss but optimally for a gain. It is a regular conduct or economic activity of a government owned and controlled corporation, as such, the sale of generating assets, lease of Naga Complex, collection of income and receivables cannot be said to be isolated transactions not subject to VAT. Nevertheless, VAT is a tax on transactions, imposed at every stage of the distribution process on the sale, barter, exchange of goods or property, and on the performance of services, even in the absence of profit attributable thereto. 10 The term "in the course of trade or business" requires the regular conduct or pursuit of a commercial or an economic activity, regardless of whether or not the entity is profit-oriented. 11 Moreover, We find that the passage of R.A. No. 9337 12 on July 1, 2005 put the electric power industry, including National Power Corporation and PSALM under the VAT system, the Division of this Court correctly ruled as follows: Based on the records of the case, it is undisputed that the enactment of R.A. 9337 on July 1, 2005 placed the Electric Power industry under the VAT system. Particularly, the amended provisions therein mandated that the sale of electricity by generation companies, transmission and distributions companies shall be subject to VAT on the basis of Sections 106 and 108 of the Tax Code, as amended. Sections 106 and 108, as amended, now reads as follows: "SEC. 106. Value-Added Tax on Sale of Goods or Properties. (A) Rate and Base of Tax. There shall be levied, assessed and collected on every sale, barter or exchange of goods or properties, a value-added tax equivalent to ten percent (10%) of the gross selling price or gross value in money of the goods or properties sold, bartered or exchanged, such tax to be paid by the seller or transferor. (1) The term 'goods or properties' shall mean all tangible and intangible objects which are capable of pecuniary estimation and shall include: (a) Real properties held primarily for sale to customers or held for lease in the ordinary course of trade or business; (b) The right or the privilege to use patent, copyright, design or model, plan secret formula or process, goodwill, trademark, trade brand or other like property or right; DETACa (c) The right or the privilege to use in the Philippines of any industrial, commercial or scientific equipment; (d) The right or the privilege to use motion picture films, films, tapes and discs; and (e) Radio, television, satellite transmission and cable television time. The term 'gross selling price' means the total amount of money or its equivalent which the purchaser pays or is obligated to pay to the seller in consideration of the sale, barter or exchange of the goods or properties, excluding the value-added tax. The excise tax, if any, on such goods or properties shall form part of the gross selling price. xxx xxx xxx. SEC. 108. Value-added Tax on Sale of Services and Use or Lease of Properties. (A) Rate and Base of Tax. There shall be levied, assessed and collected, a value-added tax equivalent to ten percent (10%) of gross receipts derived from the sale or exchange of services, including the use or lease of properties. The phrase 'sale or exchange of services' means the performance of all kinds of services in the Philippines for others for a fee, remuneration or consideration, including those performed or rendered by . . . lessors of property, whether personal or real . . . sales of electricity by generation companies, transmission, and distribution companies ; . . ." Section 106 imposes VAT on "all kinds of goods and properties" sold in the Philippines. The term "goods and properties" have been given an all encompassing meaning to include the sale of the generation assets of petitioner. Therefore, the sale of the Masinloc Plant, Ambuklao/Binga and the collection from the Pantabangan sales fall under that umbrella and should be deemed subject to VAT unless some provision of law expressly exempts it. Likewise, Section 108 imposes VAT on gross receipts of lessors of property and to those arising from the sale of electricity by generation companies, transmission and distribution companies. With the enactment of R.A. No. 9337, the electric power industry's main business activities were made subject to VAT. Therefore, by classifying petitioner's income from its main business activity as subject to VAT, it follows that its incidental income shall likewise be subject to VAT. Concomitantly, petitioner's sale of generating assets, lease of Naga Complex, collection of income and receivables are done in the course of trade or business and is subject to VAT. In fine, We find no cogent reason to reverse the Third Division's findings. WHEREFORE premises considered, the petition is DENIED for lack of merit. The Decision of the Third Division of this Court in CTA Case No. 8475, promulgated on December 2, 2014 and its Resolution, promulgated on February 25, 2015, are hereby AFFIRMED . No pronouncement as to costs. SO ORDERED. (SGD.) CIELITO N. MINDARO-GRULLA Associate Justice Lovell R. Bautista, Caesar A. Casanova, Esperanza R. Fabon-Victorino, Amelia R. Cotangco-Manalastas and Ma. Belen Ringpis-Liban, JJ., concur. Roman G. del Rosario, P.J., with Dissenting Opinion. Juanito C. Castaeda, Jr., J., with Separate Concurring Opinion. Erlinda P. Uy, J., with Concurring and Dissenting Opinion. Separate Opinions DEL ROSARIO , P.J., dissenting opinion : With utmost respect to the ponencia of my esteemed colleague, I could not assent to affirm the assailed Decision of the Court in Division which sustained with modification respondent Commissioner of Internal Revenue's assessment against petitioner Power Sector Assets and Liabilities Management Corporation (PSALM) for deficiency Value Added Tax (VAT) of P9,566,062,571.44 plus deficiency interest and delinquency interest pursuant to Section 249 (B) and (C) (3) of the National Internal Revenue Code of 1997, as amended, covering taxable year 2008. To begin with, it is true that petitioner's sale of generation assets, lease of Naga Complex, and collection of income 1 are in line with the statutory mandate of petitioner 2 that can be considered as activities made " in the course of trade or business " contemplated under Section 105 of the NIRC, viz. : "SEC. 105. Persons Liable . Any person who, in the course of trade or business, sells barters, exchanges, leases goods or properties, renders services, and any person who imports goods shall be subject to the value-added tax (VAT) imposed in Sections 106 to 108 of this Code. The value-added tax is an indirect tax and the amount of tax may be shifted or passed on to the buyer, transferee or lessee of the goods, properties or services. This rule shall likewise apply to existing contracts of sale or lease of goods, properties or services at the time of the effectivity of Republic Act No. 7716. The phrase 'in the course of trade or business' means the regular conduct or pursuit of a commercial or an economic activity, including transactions incidental thereto, by any person regardless of whether or not the person engaged therein is a non-stock, nonprofit private organization (irrespective of the disposition of its net income and whether or not it sells exclusively to members or their guests), or government entity. The rule of regularity, to the contrary notwithstanding, services as defined in this Code rendered in the Philippines by nonresident foreign persons shall be considered as being rendered in the course of trade or business." Records, however, disclosed that petitioner relied in good faith on BIR Ruling No. 020-02 dated May 13, 2002 as shown in its protests dated July 5, 2011 and August 31, 2011. 3 The text of petitioner's query, as specified in BIR Ruling No. 020-02, reads: "Power Sector Assets & Liabilities Management Corporation Energy Center, Merrit Road Fort Bonifacio, Taguig Metro Manila Attention: Edgardo M. Del Fonso President Gentlemen: This refers to your letters dated November 12 and 20, 2001 and February 8, 2002 requesting for confirmation of your understanding of the tax consequences arising from or incidental to the privatization of the National Power Corporation (NPC) and taxation of the entities created pursuant to Republic Act (R.A.) No. 9136, also known as the "Electric Power Industry Reform Act of 2001". I. MATTERS ON WHICH RULING IS REQUESTED xxx xxx xxx C. On the privatization of NPC assets: xxx xxx xxx 2) The privatization of assets by PSALM is not subject to VAT; . . ." In resolving the query, BIR Ruling No. 020-02 is clear and categorical in declaring that since "the disposition or sale of the assets is a consequence of PSALM's mandate . . ., the same will be considered an isolated transaction, which will therefore not be subject to VAT (BIR Ruling No. 113-98 dated July 23, 1998)," thus: "C. Privatization of Assets. As stated earlier, the following ruling is based on the law existing as of the date of this ruling. 1. Gain from the sale by PSALM of the generation facilities to qualified buyers is not subject to income tax. The eventual sale, disposition or privatization of the generation assets, real estate and other disposable assets, and IPP contracts, will be a mere incident to, or a necessary consequence of, the generation activity that PSALM will undertake as discussed in B.1., above, which should therefore not be taxed as an independent business in itself. ( De la Rama Steamship Co. vs. Comm. of Internal Revenue, Ibid. ). Accordingly, any income that PSALM may derive from such sale will also not be subject to income tax. 2. Privatization of assets by PSALM is not subject to VAT. Pursuant to Section 105 in relation to Section 106, both of the Tax Code of 1997, a value-added tax equivalent to ten percent (10%) of the gross selling price or gross value in money of the goods, is collected from any person, who, in the course of trade or business, sells, barters, exchanges, leases goods or properties, which tax shall be paid by the seller or transferor. The phrase "in the course of trade or business" means the regular conduct or pursuit of a commercial activity, including transactions incidental thereto. Since the disposition or sale of the assets is a consequence of PSALM's mandate to ensure the orderly sale or disposition of the property and thereafter to liquidate the outstanding loans and obligations of NPC, utilizing the proceeds from sales and other property contributed to it, including the proceeds from the Universal Charge, and not conducted in pursuit of any commercial or profitable activity, including transactions incidental thereto, the same will be considered an isolated transaction, which will therefore not be subject to VAT . (BIR Ruling No. 113-98 dated July 23, 1998)" (Boldfacing and underscoring supplied) In Commissioner of Internal Revenue vs. San Roque Power Corporation; Taganito Mining Corporation vs. Commissioner of Internal Revenue; Philex Mining Corporation vs. Commissioner of Internal Revenue , 4 the Supreme Court elucidated on the significance of a BIR Ruling issued by the Commissioner of Internal Revenue (CIR) vis--vis its non-retroactive application, viz. : " BIR Ruling No. DA-489-03 does provide a valid claim for equitable estoppel under Section 246 of the Tax Code . BIR Ruling No. DA-489-03 expressly states that the 'taxpayer-claimant need not wait for the lapse of the 120-day period before it could seek judicial relief with the CTA by way of Petition for Review.' Prior to this ruling, the BIR held, as shown by its position in the Court of Appeals, that the expiration of the 120-day period is mandatory and jurisdictional before a judicial claim can be filed. There is no dispute that the 120-day period is mandatory and jurisdictional, and that the CTA does not acquire jurisdiction over a judicial claim that is filed before the expiration of the 120-day period. There are, however, two exceptions to this rule. The first exception is if the Commissioner, through a specific ruling , misleads a particular taxpayer to prematurely file a judicial claim with the CTA. Such specific ruling is applicable only to such particular taxpayer. The second exception is where the Commissioner, through a general interpretative rule issued under Section 4 of the Tax Code, misleads all taxpayers into filing prematurely judicial claims with the CTA. In these cases, the Commissioner cannot be allowed to later on question the CTA's assumption of jurisdiction over such claim since equitable estoppel has set in as expressly authorized under Section 246 of the Tax Code. aDSIHc xxx xxx xxx Since the Commissioner has exclusive and original jurisdiction to interpret tax laws, taxpayers acting in good faith should not be made to suffer for adhering to general interpretative rules of the Commissioner interpreting tax laws, should such interpretation later turn out to be erroneous and be reversed by the Commissioner or this Court. Indeed, Section 246 of the Tax Code expressly provides that a reversal of a BIR regulation or ruling cannot adversely prejudice a taxpayer who in good faith relied on the BIR regulation or ruling prior to its reversal . Section 246 provides as follows: Sec. 246. Non-Retroactivity of Rulings. Any revocation, modification or reversal of any of the rules and regulations promulgated in accordance with the preceding Sections or any of the rulings or circulars promulgated by the Commissioner shall not be given retroactive application if the revocation, modification or reversal will be prejudicial to the taxpayers, except in the following cases: (a) Where the taxpayer deliberately misstates or omits material facts from his return or any document required of him by the Bureau of Internal Revenue; (b) Where the facts subsequently gathered by the Bureau of Internal Revenue are materially different from the facts on which the ruling is based; or (c) Where the taxpayer acted in bad faith. (Emphasis supplied) Thus, a general interpretative rule issued by the Commissioner may be relied upon by taxpayers from the time the rule is issued up to its reversal by the Commissioner or this Court. Section 246 is not limited to a reversal only by the Commissioner because this Section expressly states, "Any revocation, modification or reversal" without specifying who made the revocation, modification or reversal. Hence, a reversal by this Court is covered under Section 246. Taxpayers should not be prejudiced by an erroneous interpretation by the Commissioner, particularly on a difficult question of law . . . ." (Boldfacing and underscoring supplied) As stated, a "specific ruling" of the CIR is applicable to a particular taxpayer. Consistent therewith, BIR Ruling No. 020-02 (declaring that disposition or sale of assets as a consequence of PSALM's mandate, including transactions incidental thereto, are not subject to VAT) must necessarily be applicable to petitioner who, after all, relied thereon in good faith. Needless to say, respondent must be bound by the terms of its own ruling pursuant to Section 246 of the Tax Code . In the language of Commissioner of Internal Revenue vs. Burmeister and Wain Scandinavian Contractor Mindanao, Inc. : 5 "Nevertheless, in seeking a refund of its excess output tax, respondent [Burmeister and Wain Scandinavian Contractor Mindanao, Inc.] relied on VAT Ruling No. 003-99,6[28] which reconfirmed BIR Ruling No. 023-957 insofar as it held that the services being rendered by BWSCMI is subject to VAT at zero percent (0%). Respondent's reliance on these BIR rulings binds petitioner [CIR] . Petitioners filing of his Answer before the CTA challenging respondents claim for refund effectively serves as a revocation of VAT Ruling No. 003-99 and BIR Ruling No. 023-95. However, such revocation cannot be given retroactive effect since it will prejudice respondent. Changing respondents status will deprive respondent of a refund of a substantial amount representing excess output tax. Section 246 of the Tax Code provides that any revocation of a ruling by the Commissioner of Internal Revenue shall not be given retroactive application if the revocation will prejudice the taxpayer . Further, there is no showing of the existence of any of the exceptions enumerated in Section 246 of the Tax Code for the retroactive application of such revocation." (Boldfacing supplied) Anent petitioner's lease of Naga Complex, absent any showing that the property involved is among those transferred from the National Power Corporation to petitioner which is subject of the privatization contemplated under Republic Act No. 9136, the same is excluded from the coverage of BIR Ruling No. 020-02. In fact, the Naga Complex may have been acquired by petitioner from a party other than NPC considering that under Section 51 of Republic Act No. 9136, 8 petitioner is authorized to acquire properties as may be necessary in the discharge of its functions. With regard to the assessed VAT on collection of receivables, records disclosed that the same pertain to the following, namely: (1) from employees for the excess utilization of the allowed mobile phone service; (2) inventory variance receivable from custodian; (3) refund of the insurance premiums paid by petitioner for the asset sold; and (4) interest received from BSP from dollar deposit. 9 By their very nature, the same should not be subject to VAT since they do not involve transactions made by petitioner in the nature of sale, barter, exchange, lease of goods or properties, performance of service, and even importation of goods as contemplated under Section 105 of the NIRC of 1997, as amended. On the basis of the foregoing discussion, the assessment issued by respondent against petitioner insofar as it relates to the proceeds from sales of generating assets, and from collection of income and receivables must perforce be cancelled and set aside. While the position I have taken above obviates any discussion on any other error committed by the Court in Division, I would like to expand my dissent to include that of the Court in Division's imposition of interests on deficiency VAT. I submit that deficiency interests cannot be imposed on all types of taxes or deficiency taxes, particularly on VAT. In this regard, I quote below the recent position I have taken in the consolidated cases of Commissioner of Internal Revenue vs. ESS Manufacturing Company, Inc., and ESS Manufacturing Company, Inc. vs. Commissioner of Internal Revenue 10 on the imposition of deficiency interest: ". . . I am not unaware of Paper Industries Corporation of the Philippines vs. Court of Appeals, Commissioner of Internal Revenue, and Court of Tax Appeals (PICOP) , 11 which somehow made mention of deficiency interest under the NIRC of 1977. I must stress, however, that PICOP cannot be relied upon to justify the imposition of deficiency interest on petitioner's excise tax liability. PICOP did not state nor resolve the issue whether or not the deficiency interest provided for in Section 249 (B) of the NIRC of 1997, as amended, may be imposed on tax other than donor's, estate, and income taxes. Thus, not having been resolved therein, PICOP cannot be considered as a doctrine on the matter. The case of Office of the Ombudsman vs. Honorable Court of Appeals and Former Deputy Ombudsman for the Visayas Arturo C. Mojica , 12 is instructive: "The legal maxim " stare decisis et non quieta movere " (follow past precedents and do not disturb what has been settled) states that where the same questions relating to the same event have been put forward by parties similarly situated as in a previous case litigated and decided by a competent court, the rule of stare decisis is a bar to any attempt relitigate the same issues. xxx xxx xxx Thus, where the issue involved was not raised nor presented to the court and not passed upon by the court in the previous case, the decision in the previous case is not stare decisis of the question presented ." (Emphasis supplied) If PICOP has any relevance to the present controversy, it is the doctrinal precedent that deficiency interest may be imposed only on tax specifically covered by the relevant provision of the NIRC of 1977 . Thus, the Court in PICOP , while recognizing that transaction tax is in the nature of income tax and that deficiency interest is imposable on income tax, nonetheless declined to impose such deficiency interest on transaction tax after noting the significant provisions of the NIRC of 1977: first , it is Section 51 (c)(1), (e)(1), and (3) which impose deficiency interest; second , Section 51 (c) (1) confines such deficiency interest on taxes covered by TITLE II; and, third , that transaction tax does not fall within TITLE II . Thus: " It will be seen that Section 51 (c) (1) and (e) (1) and (3), of the 1977 Tax Code, authorize the imposition of surcharge and interest only in respect of a " tax imposed by this Title ," that is to say, Title II on "Income Tax." It will also be seen that Section 72 of the 1977 Tax Code imposes a surcharge only in case of failure to file a return or list " required by this Title ," that is, Title II on "Income Tax." The thirty-five percent (35%) transaction tax is, however, imposed in the 1977 Tax Code by Section 210 (b) thereof which Section is embraced in Title V on "Taxes on Business" of that Code . Thus, while the thirty-five percent (35%) transaction tax is in truth a tax imposed on interest income earned by lenders or creditors purchasing commercial paper on the money market, the relevant provisions, i.e. , Section 210 (b), were not inserted in Title II of the 1977 Tax Code. The end result is that the thirty-five percent (35%) transaction tax is not one of the taxes in respect of which Section 51 (e) authorized the imposition of surcharge and interest and Section 72 the imposition of a fraud surcharge." (Emphases supplied) True, the Supreme Court in PICOP declared that the present provision of the NIRC mentions that additions on tax applies to all taxes. While such pronouncement may not be construed beyond the context in which it was made, PICOP simply confirmed that in general , certain penalties and charges are applicable to all types of tax or deficiency tax; PICOP, however, did not categorically construe the provision of Section 249 (B) that deals with "deficiency interest" on the type of tax "as defined in [the] Code." Note that the present NIRC is explicit with respect to the type of tax on which deficiency interest may be imposed, viz. : 'Section 249. Interest . (B) Deficiency Interest. Any deficiency in the tax due, as the term is defined in this Code , shall be subject to the interest prescribed in Subsection (A) hereof, which interest shall be assessed and collected from the date prescribed for its payment until the full payment thereof.' (Emphasis supplied) Section 249 (B) cannot be any clearer: the deficiency interest must refer only to 'deficiency in the tax due, as the term is defined in [the] Code .' Verily, as the law stands, only donor's, estate, and income taxes carry a provision on deficiency tax; they are the types of taxes on which such deficiency interest may be imposed. Finally, Sections 247 (a) and 249 (A) are general provisions that impose "additions" to the tax and "interest" thereon. Both sections may not be read in isolation from the relevant and specific provision of Section 249 (B) with respect to the imposition of "deficiency" interest, more so as all these provisions fall within the same Chapter I of Title X of the NIRC of 1997, as amended." Otherwise stated, Sections 247 (a) and 249 (A) must reasonably be read and construed subject to the provision of Section 249 (B) all these provisions being covered by the same Chapter I of Title X of the NIRC of 1997, as amended. In sum, deficiency interest may be imposed only on tax specifically covered by the relevant provisions of the NIRC, i.e., income tax, donor's tax and estate tax ; conversely, deficiency interest may not properly be imposed on the deficiency VAT assessed against petitioner PSALM. Also apt is my discussion in my Concurring and Dissenting Opinion in the Philippine Aerospace Development Corporation vs. Commissioner of Internal Revenue 13 which I quote below: ETHIDa Settled is the rule that laws imposing tax is construed strictly against the government and liberally in favor of the taxpayer. Unless clearly imposed by pertinent provision of law, deficiency interest as an additional tax burden should not simply be presumed. Thus, the obligation to pay deficiency interest may not be applied to taxes other than income tax, donor's tax and estate tax, irrespective of whether an assessment is issued or not. After all, the deficiency tax assessed is still subject to the delinquency interest rate of 20% per annum until fully paid. Truth be told, the delinquency interest rate of 20% is way more than the legal interest of 12% per annum . All told, I vote to PARTLY GRANT the Petition for Review. Accordingly, the assailed Decision of the Court in Division should be MODIFIED . The assessment issued by respondent against petitioner covering taxable year 2008 for deficiency Value-Added Tax insofar as it relates to the proceeds from sales of generating assets, and from collection of income and receivables should appropriately be cancelled and set aside. CASTAEDA, JR. , J., separate concurring opinion : I concur with the ponencia of my esteemed colleague, Associate Justice Cielito N. Mindaro-Grulla affirming the Decision of the Third Division of this Court dated December 2, 2014 holding petitioner Power Sector Assets and Liabilities Management Corporation (PSALM) liable for value-added tax (VAT) on its sale of National Power Corporation's (NPC) generation assets, lease of Naga Complex, and collection of income and receivables. Nevertheless, I would like to elaborate on some points concerning the imposition of deficiency and delinquency interests by the Court in Division in its assailed Decision. The dispositive portion of the assailed Decision, in part, states: "In addition, petitioner is hereby ORDERED TO PAY : a) Deficiency interest at the rate of 20% per annum on the basic deficiency VAT of P6,439,713,829.91 computed from June 30, 2011 until full payment thereof pursuant to Section 249(B) of the NIRC of 1997; b) Delinquency interest at the rate of 20% per annum on the basic deficiency VAT of P6,439,713,829.91 [computed from] June 30, 2011 until full payment thereof pursuant to Section 249(C)(3) of the NIRC of 1997, as amended; and c) Delinquency interest at the rate of 20% per annum on the deficiency interest which have accrued as afore-stated in (a) computed from June 30, 2011 until full payment thereof pursuant to Section 249(C)(3) of the NIRC of 1997, as amended. SO ORDERED ." In connection with the above judgment, it bears reiterating that: 1. Section 247 (A) in relation to Section 249 (B) of the 1997 NIRC sanctions the imposition of deficiency interest on all deficiency taxes; 2. Section 249 of the 1997 NIRC authorizes the simultaneous imposition of deficiency interest and delinquency interest; and 3. The legislative history of the relevant provisions of the 1997 NIRC supports the simultaneous imposition of deficiency interest and delinquency interest. Section 247 (a) in relation to Section 249 (B) of the 1997 NIRC authorizes the imposition of deficiency interest on all taxes under the NIRC. The law is clear. There is no room left for interpretation. Section 247 (a) of the 1997 NIRC provides: " TITLE X STATUTORY OFFENSES AND PENALTIES CHAPTER I ADDITIONS TO THE TAX SECTION 247. General Provisions . (a) The additions to the tax or deficiency tax prescribed in this Chapter shall apply to all taxes , fees and charges imposed in this Code . The amount so added to the tax shall be collected at the same time, in the same manner and as part of the tax." (Emphasis and underscoring supplied) The text of Section 247 (a) states without any doubt that the additions under Chapter I, Title X are applicable to all taxes imposed under the code, i.e. , the 1997 NIRC. The authority to impose additions under that provision clearly extends to all taxes regardless of the title under which they are classified. Therefore, the law does not limit these additions only to the three (3) types of internal revenue taxes, namely, income (Title II), estate (Title III) and donor's tax (Title III). Their imposition applies with equal force and effect to the other taxes under the 1997 NIRC such as the value-added tax (Title IV), other percentage taxes (Title V), excise tax (Title VI) and documentary stamp tax (Title VII). Accordingly, the additions to the tax or deficiency tax such as, among others, Civil Penalties or Surcharges under Section 248, Deficiency Interest under Section 249 (B), Delinquency Interest under Section 249 (C), and Interest on Extended Payment under Section 249 (D) are applicable to the deficiency VAT of PSALM. It may be argued that because there are no definitions for deficiency withholding tax, value-added tax, percentage tax, excise tax or documentary stamp tax unlike those provided for income tax in Section 56 (B), for estate tax in Section 93 and for donor's tax in Section 104 then no deficiency interest can be imposed on other kinds of taxes provided under the 1997 NIRC. The lacuna or the missing definition was precisely addressed by Section 247 (a) when this provision was first legislated as a revision 1 to the 1977 NIRC and then subsequently reenacted in the 1997 NIRC. The Supreme Court discussed the history of this provision in Paper Industries Corporation of the Philippines (PICOP) v. Court of Appeals, et al . 2 In that case, the Supreme Court held that PICOP was not liable for interest and surcharge on the unpaid transaction tax because the 1977 Tax Code applicable at that time authorized the imposition of interest and surcharge only on taxes within Title II of the Code (Income Tax). Therefore, since transaction tax was embraced under a different title, Title V (Taxes on Business), the Court concluded that said transaction tax was not one of the taxes on which interest and surcharge could be imposed. Nonetheless, it further expounded that this inadvertence in the 1977 NIRC was cured subsequently by legislative fiat . Thus: "The CIR, both in its petition before the Court of Appeals and its Petition in the instant case, points to Section 51(e) of the 1977 Tax Code as its source of authority for assessing a surcharge and penalty interest in respect of the thirty-five percent (35%) transaction tax due from Picop. xxx xxx xxx It will be seen that Section 51(c)(1) and (e)(1) and (3), of the 1977 Tax Code, authorize the imposition of surcharge and interest only in respect of a ' tax imposed by this Title ,' that is to say, Title II on 'Income Tax . ' It will also be seen that Section 72 of the 1977 Tax Code imposes a surcharge only in case of failure to file a return or list ' required by this Title, ' that is, Title II on 'Income Tax.' The thirty-five percent (35%) transaction tax is, however, imposed in the 1977 Tax Code by Section 210 (b) thereof which Section is embraced in Title V on 'Taxes on Business' of that Code. Thus, while the thirty-five percent (35%) transaction tax is in truth a tax imposed on interest income earned by lenders or creditors purchasing commercial paper on the money market, the relevant provisions, i.e. , Section 210(b), were not inserted in Title II of the 1977 Tax Code. The end result is that the thirty-five percent (35%) transaction tax is not one of the taxes in respect of which Section 51(e) authorized the imposition of surcharge and interest and Section 72 the imposition of a fraud surcharge. It is not without reluctance that we reach the above conclusion on the basis of what may well have been an inadvertent error in legislative draftsmanship , a type of error common enough during the period of Martial Law in our country. Nevertheless, we are compelled to adopt this conclusion . We consider that the authority to impose what the present Tax Code calls (in Section 248) civil penalties consisting of additions to the tax due, must be expressly given in the enabling statute, in language too clear to be mistaken. The grant of that authority is not lightly to be assumed to have been made to administrative officials, even to one as highly placed as the Secretary of Finance. The state of the present law tends to reinforce our conclusion that Section 51 (c) and (e) of the 1977 Tax Code did not authorize the imposition of a surcharge and penalty interest for failure to pay the thirty-five percent (35%) transaction tax imposed under Section 210 (b) of the same Code. The corresponding provision in the current Tax Code very clearly embraces failure to pay all taxes imposed in the Tax Code , without any regard to the Title of the Code where provisions imposing particular taxes are textually located . Section 247 (a) of the NIRC, as amended, reads: Title X Statutory Offenses and Penalties Chapter I Additions to the Tax SECTION 247. General Provisions . (a) The additions to the tax or deficiency tax prescribed in this Chapter shall apply to all taxes, fees and charges imposed in this Code . The amount so added to the tax shall be collected at the same time, in the same manner and as part of the tax. . . . SECTION 248. Civil Penalties . (a) There shall be imposed, in addition to the tax required to be paid, penalty equivalent to twenty-five percent (25%) of the amount due , in the following cases: xxx xxx xxx (3) failure to pay the tax within the time prescribed for its payment; or xxx xxx xxx (c) the penalties imposed hereunder shall form part of the tax and the entire amount shall be subject to the interest prescribed in Section 249. SECTION 249. Interest . (a) In General. There shall be assessed and collected on any unpaid amount of tax, interest at the rate of twenty percent (20%) per annum or such higher rate as may be prescribed by regulations , from the date prescribed for payment until the amount is fully paid. . . . .' (Emphases supplied) In other words, Section 247 (a) of the current NIRC supplies what did not exist back in 1977 when Picop's liability for the thirty-five percent (35%) transaction tax became fixed. We do not believe we can fill that legislative lacuna by judicial fiat. There is nothing to suggest that Section 247(a) of the present Tax Code, which was inserted in 1985, was intended to be given retroactive application by the legislative authority ." (Underscoring and emphases supplied; citations omitted) cSEDTC In fact, this Court En Banc , through the ponencia of J. Mindaro-Grulla in Takenaka Corporation Philippine Branch v. CIR , 3 relied upon the same PICOP holding. To stress its point, the Court cited PICOP and stated that the deficiency interest imposed under Section 249 (B) of the 1997 NIRC does not apply merely to deficiency income, deficiency estate and deficiency donor's tax by virtue of Section 247 (a) of the same law. It reads: " Anent the issue on the applicability of deficiency interest under Section 249(B) of the NIRC of 1997, as amended, only to deficiency income tax, deficiency estate tax, and deficiency donor's tax , as held by the Court a quo , petitioner asseverates that such an interpretation would result to absurd conclusions as it would mean triple imposition of 20% interest under Section 249(A), 249(B), and 249(C) of the NIRC of 1997, simultaneously, effectively giving rise to at least 60% interest per annum . We agree with petitioner. The issue is no longer novel as the same was sufficiently discussed by the Supreme Court in Paper Industries Corporation of the Philippines (PICOP) v. Court of Appeals, et al. The Supreme Court held that Section 247(a) of the NIRC of 1977, as amended [now Section 247(a) of the NIRC of 1997, as amended] , very clearly embraces failure to pay all taxes imposed in the Tax Code , without any regard to the Title of the Code where provisions imposing particular taxes are textually located ." (emphases and underscoring supplied; citations omitted) In sum, PSALM's deficiency VAT was properly subjected to deficiency interest pursuant to Section 249 of the 1997 NIRC. Section 249 of the 1997 NIRC authorizes the simultaneous imposition of deficiency interest and delinquency interest. This Court En Banc has consistently held that the plain reading of Section 249 of the 1997 NIRC justifies the simultaneous imposition of deficiency interest and delinquency interest. Section 249, paragraphs (A), (B) and (C) are clear that the imposition of both the deficiency interest and delinquency interest are to be reckoned from the date prescribed for their payment and until the full payment thereof Section 249, paragraphs (A), (B) and (C) of the 1997 NIRC, read as follows: "SECTION 249. Interest . (A) In General. There shall be assessed and collected on any unpaid amount of tax, interest at the rate of twenty percent (20%) per annum, or such higher rate as may be prescribed by rules and regulations, from the date prescribed for payment until the amount is fully paid . (B) Deficiency Interest. Any deficiency in the tax due, as the term is defined in this Code, shall be subject to the interest prescribed in Subsection (A) hereof, which interest shall be assessed and collected from the date prescribed for its payment until the full payment thereof. (C) Delinquency Interest. In case of failure to pay: (1) The amount of the tax due on any return required to be filed, or (2) The amount of the tax due for which no return is required, or (3) A deficiency tax, or any surcharge or interest thereon on the due date appearing in the notice and demand of the Commissioner, there shall be assessed and collected on the unpaid amount, interest at the rate prescribed in Subsection (A) hereof until the amount is fully paid, which interest shall form part of the tax ." (Emphasis and underscoring supplied) The Supreme Court recently upheld this interpretation in a Resolution dated November 10, 2014 in Republic Cement [as surviving corporation in a merger involving FR Cement Corporation] v. Commissioner of Internal Revenue : 4 "After a careful perusal of the records, the Court resolves to DENY the instant petition and AFFIRM the July 18, 2012 Decision and November 21, 2012 Resolution of the Court of Tax Appeals (CTA) En Banc in CTA EB No. 821 for failure of Republic Cement Corporation (petitioner) to show that the CTA En Banc committed any reversible error in assessing it for deficiency creditable withholding value-added tax (CWVAT) for taxable year 1999 in the amount of P10,044,824.64, inclusive of 25% surcharge, and in imposing deficiency interest of 20% per annum on the basic deficiency CWVAT of P8,035,859.71 from January 25, 2000 until full payment thereof, as well as delinquency interest of 20% per annum on the total deficiency taxes of P10,044,824.64 and on the 20% deficiency interest that have accrued from January 31, 2005 until full payment thereof . As correctly ruled by the CTA En Banc , the simultaneous imposition of deficiency and delinquency interests are sanctioned under Section 249 of the National Internal Revenue Code (NIRC) , which explicitly provides that deficiency interest shall be reckoned from the date prescribed for payment of the deficiency tax until full payment thereof while delinquency interest shall also be collected computed from the due date prescribed under the Assessment Notice until full payment thereof. SO ORDERED ." (Underscoring and emphases supplied) In Medicard Philippines, Inc. v. CIR , 5 we also held that there is no legal obstacle for the Court in Division to simultaneously impose the deficiency interest and the delinquency interest: "In the case of Philippine Aerospace Development Corporation v. Commissioner of Internal Revenue , this Court exhaustively discussed the propriety of the simultaneous imposition of deficiency and delinquency interest, in this wise: 'The propriety of the simultaneous imposition of deficiency and delinquency interests was more definitively resolved in April 2013. This was in First Lepanto Taisho Insurance Corporation v. Commissioner of Internal Revenue , where the Supreme Court upheld a 2011 decision of this Court affirming the imposition of delinquency interest under Section 249(c)(3) of the 1997 NIRC. The Supreme Court ruled this imposition 'to be proper, because failure to pay the deficiency tax assessed within the time prescribed for its payment justifies the imposition of interest at the rate of twenty percent (20%) per annum, which interest shall be assessed and collected from the date prescribed for its payment until full payment is made.' Earlier in 2011, the Supreme Court sustained the 2005 rulings of this Court imposing 20% delinquency tax on deficiency taxes, inclusive of deficiency interest, in Rizal Commercial Banking Corporation v. Commissioner of Internal Revenue . In 2006, the Supreme Court also upheld a 2004 Court of Appeals decision where the latter imposed delinquency interest at 20% per annum in addition to the interest on deficiency VAT and deficiency documentary stamp tax, in Michel J. Lhuillier Pawnshop, Inc. v. Commissioner of Internal Revenue , although without discussion of the propriety of multiple simultaneous interests. And even earlier, in 2000, the Supreme Court likewise upheld the imposition of 20% annual delinquency interest on deficiency amusement tax, inclusive of 20% deficiency interest, in Philippine Basketball Association v. Court of Appeals, Court of Tax Appeals, and Commissioner of Internal Revenue . Actually, double interests have been sustained by the Supreme Court at least as early as 1971, in Commissioner of Internal Revenue v. Connel Bros. (Phil.) and Court of Tax Appeals . Under the tax law at the time, R.A. No. 2343 of 1959, these were the 'interest on deficiency' and what may be referred to as 'additional interest' (in case of non-payment within the prescribed period), at the rates of 6% per annum and 1% per month, respectively. It is abundantly clear, from the foregoing discussion of the law and jurisprudence, that under the circumstance laid down by Section 249(c)(3) of the Tax Reform Act of 1997 i.e. , in case of failure to pay a deficiency tax, or any surcharge or interest on such deficiency tax delinquency interest of 20% per annum shall be assessed and collected. The petitioner asked whether or not simultaneous deficiency and delinquency interests 'are allowed by law and equity.' The answer is in the law itself, which does not merely allow but prescribes simultaneous imposition under the aforecited circumstance. As this is undoubtedly proper under the law and petitioner has not assailed the validity of the law itself there is neither need nor duty for this Court to expand the discussion to the realm of equity, for 'equity is applied only in the absence of, and never against, statutory law, and the rule is that 'equity follows the law.'' Verily, We explained in the Philippine Aerospace case that, following the various and consistent rulings of the Supreme Court, there is nothing repugnant with the simultaneous imposition of deficiency and delinquency interests. Thus, the Court in Division is correct in imposing the aforesaid civil penalties in the instant case." In the same vein, Avon Products Manufacturing, Inc. v. CIR 6 discussed the legal bases for the Court's position on this point, thus: "Petitioner submits that the Court in Division seriously erred in its simultaneous imposition of the deficiency interest and the delinquency interest upon the amounts payable by petitioner. The latter argues that deficiency interest and delinquency interest provided under Section 249 (B) and 249 (C) of the NIRC are not intended to be imposed simultaneously. Otherwise, it will amount to an interest that is excessive, iniquitous, unconscionable and exorbitant. We do not agree with petitioner. Section 249 of the NIRC of 1997 provides: 'SEC. 249. Interest . (A) In General. There shall be assessed and collected on any unpaid amount of tax, interest at the rate of twenty percent (20%) per annum, or such higher rate as may be prescribed by rules and regulations, from the date prescribed for payment until the amount is fully paid. (B) Deficiency Interest . Any deficiency in the tax due, as the term is defined in this Code, shall be subject to the interest prescribed in Subsection (A) hereof, which interest shall be assessed and collected from the date prescribed for its payment until the full payment thereof. (C) Delinquency Interest . In case of failure to pay: (1) The amount of the tax due on any return required to be filed, or (2) The amount of the tax due for which no return is required, or SDAaTC (3) A deficiency tax, or any surcharge or interest thereon on the due date appearing in the notice and demand of the Commissioner, there shall be assessed and collected on the unpaid amount, interest at the rate prescribed in Subsection (A) hereof until the amount is fully paid, which interest shall form part of the tax. xxx xxx xxx.' Interest is imposed to compensate the State for the delay in paying the tax and for the concomitant use by the taxpayer of funds that rightfully should be in the government's hands. It is imposable upon failure of the taxpayer to pay the tax on the date fixed in the law for its payment. In this case, by its own argumentation, petitioner stresses that the deficiency interest under subsection (B) of Section 249 is applicable where the taxpayer is found to have a tax deficiency. Since We find in this Decision that petitioner is liable to the deficiency excise tax assessed by respondent, there can be no doubt that petitioner is likewise liable to the deficiency interest imposed by the Court in Division. Furthermore, We see no legal obstacle for the Court in Division to simultaneously impose the deficiency interest and the delinquency interest. Nowhere in Section 249 does it state that if subsection (B) is applicable, subsection (C) would be rendered inapplicable, or vice versa . Furthermore, there is no indication in the same Section 249 that the beginning of the imposition of delinquency interest under subsection (C) would end upon the imposition of deficiency interest under subsection (B). Especially so that both subsection (B) and subsection (C) provide that the interests shall respectively accrue until full payment thereof . It is a cardinal rule in statutory construction that no word, clause, sentence, provision or part of a statute shall be considered surplusage or superfluous, meaningless, void and insignificant. To this end, a construction which renders every word operative is preferred over that which makes some words idle and nugatory. This principle is expressed in the maxim Ut magis valeat quam pereat , that is, we choose the interpretation which gives effect to the whole of the statute its every word. Thus, every word of Section 249 should be given effect." (Underscoring supplied; citations omitted) The legislative history of the relevant provisions of the 1997 NIRC supports the simultaneous imposition of deficiency interest and delinquency interest. The legislative intent to impose deficiency interest concurrently with delinquency interest is underscored especially when viewed in the light of the revisions of the germane provisions of the 1977 NIRC 7 and the enactment of substantially the same revisions in the 1997 NIRC. The relevant provisions are quoted in the table below to facilitate reference: 1977 NIRC 1977 NIRC 1997 NIRC as amended by Presidential Decree as amended/revised by P.D. 1994, No. (P.D.) 1705, Section 14. Section 40 TITLE XI Additions to the Tax TITLE X Statutory Offenses and and General Penal Provisions Penalties CHAPTER I Additions to the CHAPTER I Additions to the Tax Tax Sec. 281. General provisions . Sec. 247 . General Provisions . (a) The additions to the tax or (a) The additions to the tax or deficiency tax prescribed in this deficiency tax prescribed in this Chapter shall apply to all taxes, fees Chapter shall apply to all taxes, fees and charges imposed in this Code. and charges imposed in this Code. The amount so added to the tax shall The amount so added to the tax shall be collected at the time, in the same be collected at the same time, in the manner and as part of the tax. same manner and as part of the tax. xxx xxx xxx xxx xxx xxx Sec. 88. Civil penalties . Sec. 282. Civil Penalties . . . . . . Sec. 248 . Civil Penalties . . . . . . (a) Individuals . . . . . . Sec. 283. Interest . Sec. 249 . Interest . (b) Corporations . (a) In general . There shall be (A) In General. There shall assessed and collected on any be assessed and collected on any (1) Deficiency, defined . . . . . . unpaid amount of tax, interest at the unpaid amount of tax, interest at the rate of twenty percent (20%) per rate of twenty percent (20%) per (2) (i) Interest . Interest upon annum , or such higher rate as may annum , or such higher rate as may the amount determined as a be prescribed by regulations, from be prescribed by rules and deficiency shall be assessed at the the date prescribed for payment until regulations, from the date prescribed same time as the deficiency; and the amount is fully paid. for payment until the amount is fully shall be paid upon notice and paid. demand from the Commissioner of Internal Revenue; and shall be (b) Deficiency interest . Any (B) Deficiency Interest . Any collected as part of the tax at the rate deficiency in the tax due , as the term deficiency in the tax due , as the term of twenty per centum per annum is defined in this Code, shall be is defined in this Code, shall be from the date prescribed for the subject to the interest prescribed in subject to the interest prescribed in payment of the tax to the date the paragraph (a) hereof, which interest Subsection (A) hereof, which deficiency is assessed: Provided , shall be assessed and collected from interest shall be assessed and That the maximum amount that the date prescribed for its payment collected from the date prescribed may be collected as interest on until the full payment thereof. for its payment until the full deficiency shall in no case exceed payment thereof. the amount corresponding to a period not later than the fifteenth day of April or the fifteenth day of fourth month following the close of the taxable year : Provided, further, That no interest on deficiency quarterly income tax shall be assessed at any time after assessment of the actual income tax due for the taxable year. (ii) Addition to estimated tax in case of nonpayment. (1) Tax shown on the quarterly return. Where the amount shown by the taxpayer as tax on its quarterly return or part of such amount, is not paid on or before the date prescribed for its payment, there shall be collected, as part of the tax interest upon such unpaid amount at the rate of twenty per centum per annum from the date prescribed for its payment until it is paid but not later than the fifteenth day of April or the fifteenth day of the fourth month following the close of the taxable year. (2) Deficiency. Where the (c) Delinquency interest . In case of (C) Delinquency Interest . In case deficiency, or interest on deficiency, failure to pay: of failure to pay: assessed under subsection (a) of this Section, or part thereof, is not paid (1) The amount of the tax due on (1) The amount of the tax due on in full within thirty days from the any return required to be filed, or any return required to be filed, or date of receipt by the taxpayer of the notice and demand from the (2) The amount of the tax due for (2) The amount of the tax due for Commissioner of Internal Revenue, which no return is required, or which no return is required, or there shall be collected upon such unpaid amount, as part of the tax, (3) A deficiency tax, or any (3) A deficiency tax, or any interest at the rate of twenty per surcharge or interest thereon, on the surcharge or interest thereon on the centum per annum from the date due date appearing in the notice and due date appearing in the notice and of receipt by the taxpayer of such demand of the Commissioner, demand of the Commissioner, notice and demand until it is paid not later than the fifteenth day of there shall be assessed and there shall be assessed and April or the fifteenth day of the collected, on the unpaid amount, collected on the unpaid amount, fourth month following the close interest at the rate prescribed in interest at the rate prescribed in of the taxable year . (emphases and paragraph (a) hereof until the Subsection (A) hereof until the underscoring supplied) amount is fully paid , which interest amount is fully paid , which interest shall form part of the tax. (emphases shall form part of the tax. (emphases and underscoring supplied) and underscoring supplied) By comparing the above-cited codal provisions, it can be seen from their texts that: 1. With respect to deficiency interest, when P.D. 1994 deleted the limiting clause " Provided, That the maximum amount that may be collected as interest on deficiency shall in no case exceed the amount corresponding to a period not later than the fifteenth day of April or the fifteenth day of fourth month following the close of the taxable year :" the legislature clearly intended to let the interest period run without a ceiling. Therefore: a. Before the revisions under P.D. 1994 , deficiency interest was computed at 20% per annum from the date prescribed for the payment of tax to the date the deficiency tax is assessed. But the amount of deficiency interest cannot exceed the limit imposed by the clause which, it is submitted, can be difficult to calculate due to the construction of the text. b. After the revisions under P.D. 1994 and even subsequently under the 1997 NIRC , deficiency interest is still computed at 20% per annum but the interest period is now allowed to run without the cap. Thus, interest is computed at 20% per annum from the date prescribed for the payment of tax, to the date the deficiency tax is assessed and, even extending beyond, until the date of full payment. 2. With respect to delinquency interest, it must be noted that: a. Even before the revision under P.D. 1994 , Section 88 (b) (2) (ii) (2) of the 1977 NIRC already imposed 20% interest 8 on " interest on deficiency ." However, the delinquency interest period was computed from the taxpayer's receipt of notice and demand until paid but again, with the limiting clause , "there shall be collected upon such unpaid amount, as part of the tax, interest at the rate of twenty per centum per annum from the date of receipt by the taxpayer of such notice and demand until it is paid not later than the fifteenth day of April or the fifteenth day of the fourth month following the close of the taxable year." b. After the revisions under P.D. 1994 and even subsequently under the 1997 NIRC , delinquency interest is still computed at 20% per annum but the interest period is now allowed to run without the ceiling. Thus, interest is computed at 20% per annum from the due date appearing in the notice and demand of the Commissioner until the date of full payment. 3. There is a legislated overlap in the imposition of the deficiency and of the delinquency interest. Specifically, both deficiency and delinquency interests toll concurrently from the due date appearing in the notice and demand of the Commissioner until the full payment. I have no compelling reason to deviate from the consistent holdings of this Court. I vote to DENY the instant Petition for Review. UY , J., concurring and dissenting opinion : With all due respect with the learned ponente and my other colleagues, while I concur with the ruling that petitioner is liable for value-added tax, I dissent on the imposition of the deficiency interest thereon, under Section 249 (B) of the National Internal Revenue Code of 1997, and the inclusion of said deficiency interest in the computation of delinquency interest under Section 249 (C) of the same Code. Section 249 of the NIRC of 1997 reads: "SEC. 249. Interest . (A) In General. There shall be assessed and collected on any unpaid amount of tax, interest at the rate of twenty percent (20%) per annum , or such higher rate as may be prescribed by the rules and regulations, from the date prescribed for its payment until the amount is fully paid. (B) Deficiency Interest. Any deficiency in the tax due, as the term is defined in this Code , shall be subject to the interest prescribed in Subsection (A) hereof, which interest shall be assessed and collected from the date prescribed for its payment until the full payment thereof. (C) Delinquency Interest . In case of failure to pay: xxx xxx xxx (3) A deficiency tax, or any surcharge or interest thereon on the due date appearing in the notice and demand of the Commissioner, there shall be assessed and collected on the unpaid amount, interest at the rate prescribed in Subsection (A) hereof until the amount is fully paid, which interest shall form part of the tax." (Emphases supplied) Based on the foregoing Section 249 (B), the " Deficiency Interest " shall be imposed on "[a] ny deficiency in the tax due, as the term is defined in this Code ", i.e. , as the term "deficiency" is defined in the NIRC of 1997. Relative thereto, an examination of the said Code discloses that there are only three (3) instances where it defines the term "deficiency", and this relates only and respectively to three (3) types of internal revenue taxes, namely, income tax, estate tax, and donor's tax, pursuant to Sections 56 (B), 93 and 104 of the NIRC of 1997, viz. : acEHCD "SEC. 56. Payment and Assessment of Income Tax for Individuals and Corporations . xxx xxx xxx (B) Assessment and Payment of Deficiency Tax . After the return is filed, the Commissioner shall examine its and assess the correct amount of the tax. The tax or deficiency income tax so discovered shall be paid upon notice and demand from the Commissioner. As used in this Chapter, 1 in respect of a tax imposed by this Title, 2 the term 'deficiency' means: (1) The amount by which the tax imposed by this Title exceeds the amount shown as the tax by the taxpayer upon his return; but the amount so shown on the return shall be increased by the amounts previously assessed (or collected without assessment) as a deficiency, and decreased by the amount previously abated, credited, returned or otherwise repaid in respect of such tax; or (2) If no amount is shown as the tax by the taxpayer upon his return, or if no return is made by the taxpayer, then the amount by which the tax exceeds the amounts previously assessed (or collected without assessment) as a deficiency; but such amounts previously assessed or collected without assessment shall first be decreased by the amounts previously abated, credited, returned or otherwise repaid in respect of such tax." (Emphasis supplied) "SEC. 93. Definition of Deficiency. As used in this Chapter, 3 the term 'deficiency' means: (a) The amount by which the tax imposed by this Chapter exceeds the amount shown as the tax by the executor, administrator or any of the heirs upon his return; but the amount so shown on the return shall first be increased by the amounts previously assessed (or collected without assessment) as a deficiency and decreased by the amounts previously abated, refunded or otherwise repaid in respect of such tax; or (b) If no amount is shown as the tax by the executor, administrator or any of the heirs upon his return, or if no return is made by the executor, administrator, or any heir, then the amount by which the tax exceeds the amounts previously assessed (or collected without assessment) as a deficiency; but such amounts previously assessed or collected without assessment shall first be decreased by the amounts previously abated, credited, returned or otherwise repaid in respect of such tax." (Emphasis supplied) "SEC. 104. Definitions . . . . The term 'deficiency' means: (a) the amount by which the tax imposed by this Chapter 4 exceeds the amount shown as the tax by the donor upon his return; but the amount so shown on the return shall first be increased by the amounts previously assessed (or collected without assessment) as a deficiency, and decreased by the amounts previously abated, refunded or otherwise repaid in respect of such tax, or (b) if no amount is shown as the tax by the donor upon his return, then the amount by which the tax exceeds the amounts previously assessed (or collected without assessment) as a deficiency, but such amounts previously assessed or collected without assessment shall first be decreased by the amounts previously abated, credited, returned or otherwise repaid in respect of such tax." (Emphasis supplied) Such being the case, the deficiency interest under Section 249 (B) should be applied only whenever there is a deficiency income tax, a deficiency estate tax, and a deficiency donor's tax. For this reason, in this case, no deficiency interest under Section 249 (B) should be imposed on the deficiency VAT assessed against petitioner. Correspondingly, the computation of the delinquency interest imposed under Section 249 (C) should not as well include the said deficiency interest. Correspondingly, I vote for the DELETION of: (1) the imposition of deficiency interest on petitioner at the rate of 20% per annum on the basic deficiency VAT in the amount of P6,439,713,829.91; and (2) the inclusion of said deficiency interest in the computation of the delinquency interest to be imposed on the same basic deficiency VAT. Footnotes 1. Sec. 2. Cases within the jurisdiction of the Court en banc . The Court en banc shall exercise exclusive appellate jurisdiction to review by appeal the following: (a) Decisions or resolutions on motions for reconsideration or new trial of the Court in Division in the exercise of its exclusive appellate jurisdiction over: (1) Cases arising from administrative agencies Bureau of Internal Revenue, Bureau of Customs, Department of Finance, Department of Trade and Industry, Department of Agriculture; xxx xxx xxx Sec. 4. Where to appeal; mode of appeal. (a) . . . . (b) An appeal from a decision or resolution of the Court in Division on a motion for reconsideration or new trial shall be taken to the Court by petition for review as provided in Rule 43 of the Rules of Court. The Court en banc shall act on the appeal. (c) . . . . 2. En banc Docket, pp. 29-48. 3. En banc Docket, pp. 53-55. 4. AN ACT AMENDING SECTIONS 27, 28, 34, 106, 107, 108, 109, 110, 111, 112, 113, 114, 116, 117, 119, 121, 148, 151, 236, 237 AND 288 OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED, AND FOR OTHER PURPOSES. 5. Section 49, Republic Act No. 9136 (Electric Power Industry Reform Act of 2001). SEC. 49. Creation of Power Sector Assets and Liabilities Management Corporation . There is hereby created a government-owned and -controlled corporation to be known as the "Power Sector Assets and Liabilities Management Corporation," hereinafter referred to as the "PSALM Corp.," which shall take ownership of all existing NPC generation assets, liabilities, IPP contracts, real estate and all other disposable assets. All outstanding obligations of the NPC arising from loans, issuances of bonds, securities and other instruments of indebtedness shall be transferred to and assumed by the PSALM Corp. within one hundred eighty (180) days from the approval of this Act. 6. Section 50, Republic Act No. 9136 (Electric Power Industry Reform Act of 2001). SEC. 50. Purpose and Objective, Domicile and Term of Existence . The principal purpose of the PSALM Corp. is to manage the orderly sale, disposition, and privatization of NPC generation assets, real estate and other disposable assets, and IPP contracts with the objective of liquidating all NPC financial obligations and stranded contract costs in an optimal manner. 7. G.R. No. 146984, dated July 28, 2006. 8. Ibid . 9. Ibid . 10. COMMISSIONER OF INTERNAL REVENUE vs. COURT OF APPEALS and COMMONWEALTH MANAGEMENT AND SERVICES CORPORATION , G.R. No. 125355, March 30, 2000. 11. Ibid . 12. AN ACT AMENDING SECTIONS 27, 28, 34, 106, 107, 108, 109, 110, 111, 112, 113, 114, 116, 117, 119, 121, 148, 151, 236, 237 AND 288 OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED, AND FOR OTHER PURPOSES. DEL ROSARIO, P.J., dissenting opinion: 1. Relating to income from bidding of generation assets, such as participation fee, data room access, photocopying charges and site visit fee per petitioner's protest dated July 5, 2011, BIR Records, pp. 140-151; 142. 2. Sections 50 and 51 of Republic Act No. 9136 provides: " SEC. 50. Purpose and Objective, Domicile and Term of Existence . The principal purpose of the PSALM Corp. is to manage the orderly sale, disposition, and privatization of NPC generation assets, real estate and other disposable assets, and IPP contracts with the objective of liquidating all NPC financial obligations and stranded contract costs in an optimal manner. . . . SEC. 51. Powers . The Corporation shall, in the performance of its functions and for the attainment of its objective, have the following powers: (a) . . . (b) To take title to and possession of, administer and conserve the assets transferred to it; to sell or dispose of the same at such price and under such terms and conditions as it may deem necessary or proper, subject to applicable laws, rules and regulations; . . . (i) To own, hold, acquire, or lease real and personal properties as may be necessary or required in the discharge of its functions; . . . 3. BIR Records, pp. 140-155. 4. G.R. Nos. 187485, 196113, 197156, February 12, 2013. 5. G.R. No. 153205, January 22, 2007. 8. n SEC. 51. Powers . The Corporation shall, in the performance of its functions and for the attainment of its objective, have the following powers: xxx xxx xxx (i) To own, hold, acquire, or lease real and personal properties as may be necessary or required in the discharge of its functions. 9. BIR Records, p. 134. 10. CTA EB Nos. 1169 and 1175, March 30, 2016. 11. G.R. Nos. 106949-50, December 1, 1995. 12. G.R. No. 146486, March 4, 2005. 13. CTA EB No. 1035, February 9, 2016. CASTAEDA, JR., J., separate concurring opinion: 1. Presidential Decree No. 1994. Please refer to the subsequent discussions in the opinion. 2. G.R. Nos. 106949-50, December 1, 1995 consolidated with Commissioner of Internal Revenue v. Paper Industries Corporation of the Philippines (PICOP), et al. , G.R. Nos. 106984-85, December 1, 1995. 3. CTA EB Case No. 745, September 4, 2012. 4. G.R. No. 204715. 5. CTA EB No. 1224, September 2, 2015. 6. CTA EB No. 1062, March 16, 2015. 7. Presidential Decree No. 1994 which took effect on January 1, 1986 made substantial revisions to the 1977 NIRC. 8. The term used by the 1977 NIRC, as amended by P.D. 1705, is "deficiency." UY, J., concurring and dissenting opinion: 1. Chapter IX RETURNS AND PAYMENT OF TAX. 2. Title II TAX ON INCOME. 3. CHAPTER I ESTATE TAX (under TITLE III ESTATE AND DONOR'S TAXES). 4. CHAPTER II DONOR'S TAX (under TITLE III ESTATE AND DONOR'S TAXES). n Note from the Publisher: Copied verbatim from the official copy. n Note from the Publisher: Copied verbatim from the official copy. Irregular numerical sequence.