San Miguel Brewery, Inc. v. Commissioner of Internal Revenue

EN BANC [C.T.A. EB CASE NO. 2320. June 6, 2022.] (C.T.A. Case No. 9223) SAN MIGUEL BREWERY, INC. , petitioner , vs . COMMISSIONER OF INTERNAL REVENUE , respondent . [C.T.A. EB CASE NO. 2327. June 6, 2022.] (C.T.A. Case No. 9223) COMMISSIONER OF INTERNAL REVENUE , petitioner , vs . SAN MIGUEL BREWERY, INC. , respondent . RESOLUTION CASTAEDA, JR. , J p : For resolution of the Court En Banc is petitioner Commissioner of Internal Revenue's (CIR) Motion for Reconsideration (Re: Decision promulgated 21 February 2022) in CTA EB No. 2327, filed on March 8, 2022, n with respondent San Miguel Brewery, Inc.'s (SMBI) Comment on/Opposition to "Motion for Reconsideration. . ." dated March 3, 2022 of Commissioner of Internal Revenue, filed on April 21, 2022. For easy reference, the dispositive portion of the assailed Decision reads: "WHEREFORE , in view thereof, the instant Petitions for Review in CTA EB No. 2320 and CTA EB No. 2327 are DENIED , for lack of merit. SO ORDERED." 1 In his motion, petitioner CIR observes that respondent SMBI primarily seeks to nullify the relevant provisions of Revenue Memorandum Circular No. 90-2012. Hence, he raises the issue that the Court of Tax Appeals (CTA) has no jurisdiction to determine the validity of the rules, regulations and other administrative issuances of the BIR. On the other hand, respondent SMBI observes in its comment that petitioner CIR merely rehashed his arguments. After careful consideration of the present issue, the Court En Banc resolves to deny the instant motion. As clearly explained in the Banco de Oro case 2 as cited by the Court in Division: "The Court of Tax Appeals has undoubted jurisdiction to pass upon the constitutionality or validity of a tax law or regulation when raised by the taxpayer as a defense in disputing or contesting an assessment or claiming a refund. It is only in the lawful exercise of its power to pass upon all matters brought before it, as sanctioned by Section 7 of Republic Act No. 1125, as amended. This Court, however, declares that the Court of Tax Appeals may likewise take cognizance of cases directly challenging the constitutionality or validity of a tax law or regulation or administrative issuance (revenue orders, revenue memorandum circulars, rulings)." Thus, the Supreme Court categorically declared that the CTA has jurisdiction to rule upon the validity of a tax law or regulation when raised by the taxpayer as a defense in claiming a refund, as in this case. Considering the foregoing, the Court En Banc finds petitioner's argument untenable and as such, the denial of the instant motion is in order. WHEREFORE , petitioner Commissioner of Internal Revenue's Motion for Reconsideration (Re: Decision promulgated 21 February 2022) in CTA EB No. 2327 is DENIED , for lack of merit. SO ORDERED. (SGD.) JUANITO C. CASTAEDA, JR. Associate Justice Roman G. del Rosario, P.J., Erlinda P. Uy, Ma. Belen M. Ringpis-Liban, Catherine T. Manahan, Jean Marie A. Bacorro-Villena, Maria Rowena Modesto-San Pedro, Marian Ivy F. Reyes-Fajardo and Lanee S. Cui-David, JJ., concur. Footnotes 1. Court En Banc Docket, p. 172. 2. G.R. No. 198756, August 16, 2016, 800 SCRA 392. n Note from the Publisher: Written as "March 8, 202" in the official document.