Commissioner of Customs v. Court of Tax Appeals

[CA-G.R. SP No. 12887. October 3, 1988.] [C.T.A. Case No. 4045] THE COMMISSIONER OF CUSTOMS , petitioner , vs . THE COURT OF TAX APPEALS and DEVELOPMENT BANK OF THE PHILIPPINES , respondents . Solicitor General Francisco I. Chavez, Assistant Solicitor General, Oswaldo D. Agcaoili, Solicitor Luisito P. Escuting for petitioner. Bonifacio M. Abad, Assistant Chief Legal Counsel, Rene joven Gallofin & Zerobio C. lloren, Office of the Legal Counsel (Development Bank of the Philippines) for respondent DBP. SYLLABUS 1. TAXATION; JURISDICTION OF THE COURT OF TAX APPEALS; TAX REMEDIES. The Administrative remedy conferred under P.D. No. 242 in no wise lessens or muffles petitioner's rights of access to a judicial determination. Section 7 of R.A. 1125 provides: "Sec. 7. Jurisdiction. The Court of Tax Appeals shall exercise exclusive appellate jurisdiction to review by appeal, as herein provided . . . (2) Decisions of the Commissioner of Customs in cases involving liability for customs duties, fees or other money charges; seizure, detention or release of property affected; fines, forfeitures or other matters arising under the Customs laws or part of law administered by the Bureau of Customs; and . . .," 2. ID.,; ID.,; STATUTORY CONSTRUCTION; JURISDICTION OF THE COURT OF TAX APPEALS IS EXPLICITLY PROVIDED IN P.D. 242, A LATER ENACTMENT SUPERSEDING R.A. 1125. Insofar as disputes between government offices, agencies and corporations are concerned P.D. No. 242, which was promulgated on July 9, 1973, must be deemed to have superseded the provisions of Section 7(2) of Republic Act No. 1125, which was priorly enacted on June 16, 1954, cited by the CTA, supra , and vesting in the Court of Tax Appeals exclusive appellate jurisdiction over decisions of the Commissioner of Customs in cases involving customs duties, etc. For it is a settled rule of statutory construction that where there is irreconcilable repugnancy between two statutes anent the same subject matter as there is between P.D. No. 242 and SEC. 7 (2) of R.A. 1125 in regard to the manner of settlement of disputes involving customs duties, etc. between government offices, agencies and corporations the one of latter enactment, being the latest expression of the legislative will, should prevail over the other which is of earlier enactment. PETITION FOR REVIEW of a judgment of the Court of Tax Appeals, Quezon City. D E C I S I O N LOMBOS-DE LA FUENTE , J p : Now before this Court is a Petition for Review of the Court of Tax Appeals (CTA) dated July 31, 1987 in C.T.A. Case No. 4045 entitled "Development Bank of the Philippines, Petitioner, versus The Commissioner of Customs, Respondent." The petition was originally filed with the Supreme Court which remanded the same to this Court or disposition considering that "such cases emanating from the Court of Tax Appeals now fall within the exclusive appellate jurisdiction of the Court of Appeals under Section 9 of Batas Pambansa Blg. 129." The record now before Us discloses the following antecedent facts/incidents: The Development Bank of the Philippines (DBP) imported from the United States during the period from May 1985 to January 1986 IBM computer equipment. Customs duties, compensating fees in the total amount of P5,562,926.00 were paid to the Bureau of Customs on said importations. DBP then asked for the refund of the abovesaid payments invoking Section 4(c) * of Executive Order No. 1087 dated January 20, 1986. Upon denial by the Commissioner of Customs of DBP's abovesaid claim for refund, DBP filed with the Court of Tax Appeals a petition for review of the decision of the Commissioner of Customs containing the abovesaid denial. The Court of Tax Appeals rendered the assailed decision ordering the refund, the dispositive portion of which reads: "WHEREFORE, respondent is hereby ordered to refund to the petitioner the amount of P5,562,926.00 it paid the Bureau of Customs but such amount of import liabilities due on the importations shall be applied and credited to the payment of the subscribed capital stock of the Government in the Bank." Hence, the present petition for review now before Us. DBP then filed a Motion To Dismiss the petition for review on the grounds that the same was merely intended to delay the promulgation of the decision of the CTA and that the CTA did not err assuming jurisdiction over the case which is the subject of the petition. Subsequently, the Commissioner of Customs thru counsel, the Office of the Solicitor General, filed his Comment of DBP's Motion to Dismiss, adopting by reference the allegations and arguments in his basic Petition. Said Motion to Dismiss and said Comment are deemed herein dealt with together with the basic Petition. Petitioner attributes to the CTA the following errors: 1. ". . . in assuming jurisdiction over a dispute involving two government offices; 2. ". . . in holding that customs taxes and duties due on importation of IBM computers be applied and credited to the Government's subscription to DBP's capita stock." In support of his position under the first assigned error, petitioner cites Presidential Decree No. 242 (entitled "PRESCRIBING THE PROCEDURE FOR ADMINISTRATIVE SETTLEMENT OR ADJUDICATION OF DISPUTES, CLAIMS AND CONTROVERSIES BETWEEN OR AMONG GOVERNMENT OFFICE, AGENCIES AND INSTRUMENTALITIES, INCLUDING GOVERNMENT-OWNED OR CONTROLLED CORPORATIONS, AND FOR OTHER PURPOSES"). Petitioner submits that under Section of said P.D., which provides: "Section 1. Provisions of law to the contrary notwithstanding, all disputes, claims and controversies solely between or among the departments, bureaus, offices, agencies and instrumentalities of the National Government, including government-owned or controlled corporations but excluding constitutional offices or agencies, arising from the interpretation and application of statutes, contracts or agreements, shall henceforth be administratively settled or adjudicated as provided hereinafter: Provided, That this shall not apply to cases already pending in court at the time of the effectivity of this decree." the present case should have been administratively settled or adjudicated as provided for therein, instead of being submitted to the Court of Tax Appeals in its exercise of appellate jurisdiction over decisions of the Commissioner of Customs. On the other hand, the Court of Tax Appeals justifies its assumption of jurisdiction over the case with the statement that "the administrative remedy conferred under P.D. No. 242 in no wise lessens or muffles petitioner's right to access to a judicial determination"; and cites Section 7 ** of R.A. 1125 as basis for the said court's assumption of jurisdiction over the case. We find the position of petitioner Commissioner of Customs well-taken. Indeed, the present case is one which falls within the purview of Presidential Decree No. 242. The office of the Commissioner of Customs is an office of the National Government charged with the administration and enforcement of customs laws; and respondent DBP is a government owned corporation. thus, both agencies are covered by Section 1 of P.D. No. 242, supra . It is clear that if We were to sustain the CTA in its assumption of jurisdiction over the present case, the very purpose for the enactment of P.D. No. 242 will have been defeated or nullified. These purposes are clearly enunciated in the Whereas Clauses of the Presidential Decree, namely: "WHEREAS, it is necessary in the public interest to provide for the administrative settlement or adjudication of disputes, claims and controversies between or among government offices, agencies and instrumentalities, including government-owned or controlled corporations to avoid litigations in court where government lawyers appear for such litigants to espouse and protect their respective interests altho, in the ultimate analysis, there is but one real party-in-interest the Government itself in such litigations; WHEREAS, court cases involving the said government entities and instrumentalities have needlessly contributed to the clogged dockets of the courts, aside from dissipating or wasting the time and energies of the courts but also of the government lawyers and the considerable expenses in the filing and prosecution of judicial actions ;" (Italics supplied.) Certainly, the referral of the present case to the CTA whose decisions are subject to review by this Court in the exercise of its exclusive jurisdiction would have if it has not already resulted in spawning the very evils sought to be avoided by P.D. No. 242, as evinced in its perambulatory clauses, above-quoted. Besides, the interpretation/implementation suggested by the CTA would make disputes between government offices, agencies and corporations involving customs duties, etc. an exception to the comprehensive and all-embracing scope of P.D. 242; and this does not appear to be envisioned in the language of said P.D. The administrative settlement provided for in p.D. 242, by explicit provision of Section 1 thereof supra , shall extend to " all disputes, claims and controversies solely between or among the departments, bureaus," etc., of the national Government, "including government-owned or controlled corporations," without exception. If it had been the intention of the law to make an exception of disputes involving customs duties, etc., P.D. 242 would have said so in section 1 thereof, but it did not. Moreover, insofar as disputes between government offices, agencies and corporations are concerned, P.D. No. 242, which was promulgated on July 9, 1973, must be deemed to have superseded the provisions of Section 792) of republic Act No. 1125, which was priorly enacted on June 16, 1954, cited by the CTA, supra , and vesting in the Court of Tax Appeals exclusive appellate jurisdiction over decisions of the Commissioner of Customs in cases involving customs duties, etc. For it is settled rule of statutory construction that where there is irreconcilable repugnancy between two statutes anent the same subject matter as there between P.D. No. 242 and Sec. 7(2) of R.A. No. 1125 in regard to the manner of settlement of disputes involving customs duties, etc. between government offices, agencies and corporations the one of later enactment, being the latest expression of the legislative will, should prevail over the other which is of earlier enactment. If there is any doubt at all left that the present dispute is one which should be settled administratively pursuant to P.D. No. 242, that doubt should be erased by Section 6 of said decree which expressly declares that "the final decisions rendered in the settlement or adjudication of all such disputes, claims or controversies shall have the same force and effect as final decisions of the courts of justice." It follows that the present dispute is one which does not fall within the jurisdiction of the CTA, and is one which should be decided according to Sections 2 *** and 3 **** of P.D. 242. The foregoing renders unnecessary a consideration of the merits of the case, raised by petitioner in the second assigned error. WHEREFORE, finding the petition to be well-taken, We hereby grant the same. The assailed decision of the court of Tax Appeals, dated July 31, 1987, should be, as it is hereby, annulled and set aside. The parties are hereby ordered to submit the case at bar to administrative settlement in accordance with P.D. No. 242. SO ORDERED. Martinez, AM and Pe, JJ ., concur. Petition granted with instructions. Footnotes * "The amount of taxes due on the income of the bank beginning with CY 1985 as well as such other taxes, duties, fees, assessments, charges and other imposts due on all transactions or operations of the Bank, is hereby appropriated under this Executive Order to be automatically applied to the payment of the subscription of the Government in the capital stock of the Bank until said capital stock is fully paid for." ** "SEC. 7. Jurisdiction . The Court of Tax Appeals shall exercise exclusive appellate jurisdiction to review by appeal, as herein provided ". . . (2)Decisions of the Commissioner of Customs in cases involving liability for customs duties, fees or other money charges; seizure, detention or release of property affected; fines, forfeitures or other penalties imposed in relation thereto; or other matters arising under the customs laws or other law or part of law administered by the Bureau of Customs; and . . . " *** "SEC. 2.in all cases involving only questions of law, the same shall be submitted to and settled or adjudicated by the Secretary of justice, as Attorney General and ex officio legal adviser of all government-owned or controlled corporations and entities, in consonance with section 83 of the Revised Administrative Code. His ruling or determination of the question in each case shall be conclusive and binding upon all the parties concerned." **** "SEC. 3.Cases involving mixed questions of law and of fact or only factual issues shall be submitted to and settled or adjudicated by: "(a)The Solicitor General, with respect to disputes or claims controversies between or among the departments, bureaus, offices and other agencies of the National Government; "(b)The Government Corporate Counsel, with respect to disputes or claims of controversies between or among the government-owned or controlled corporations or entities being served by the Office of the Government Corporate Counsel; and "(c)The Secretary of Justice, with respect to all other disputes or claims or controversies which do not fall under the categories mentioned in paragraphs (a) and (b)."