Primetown Property Group, Inc. v. Commissioner of Internal Revenue

SPECIAL FIFTEENTH DIVISION [CA-G.R. SP No. 64782. August 1, 2003.] PRIMETOWN PROPERTY GROUP, INC. , petitioner , vs . COMMISSIONER OF INTERNAL REVENUE and ARTURO V. PARCERO , respondents . D E C I S I O N BUZON , J p : Before us is a petition for review of the Resolution dated December 15, 2000 of the Court of Tax Appeals (CTA), which dismissed petitioner's claim for refund/tax credit in the amount of P26,318,399.00 for having been filed beyond the reglementary period, as well as the Resolution dated April 19, 2001 denying the motion for reconsideration thereof. On April 14, 1998, petitioner filed its corporate annual income tax return for taxable year 1997 and paid the total amount of P26,318,398.32. On April 14, 2000, petitioner filed a petition for review before the CTA alleging that its claim for refund/tax credit in the amount of P26,318,393.32 was not acted upon by respondents Arturo V. Parcero, Revenue District Officer, and the Commissioner of Internal Revenue. A motion to dismiss was filed by respondents alleging that the petition for review was filed beyond the two-year period provided under Section 230 of the National Internal Revenue Code, in view of the fact that the year 2000 was a leap year, so that the two-year period expired on April 13, 2000. Commenting thereon, petitioner argued that the two-year period is not jurisdictional and may be suspended for reasons of equity and other special circumstances, citing the case of Commissioner of Internal Revenue vs. Philippine American Life Insurance Co., 244 SCRA 446; that the ground relied upon for the dismissal of the petition is purely based on technicality; and that its claim is meritorious. In a Resolution dated December 15, 2000, the CTA dismissed the petition on the ground of prescription, reasoning as follows: "We are not persuaded by Petitioner's quite conflicting ratiocination. This is not a case of first impression. And claims for refund of this nature are governed by the provisions of the Tax Code and never by the New Civil Code. The case of Commissioner of Internal Revenue vs. Philippine American Life Insurance Co. (G.R. No. 105208, May 29, 1995), relied upon by the Petitioner finds no application in this case. The reason being that there are no present special circumstances which call for justice and equity. The PhilAm Life case cited a case where there was an erroneous interpretation of the law as well as the fact that there was an agreement to wait the decision of a similar case before proper action may be taken by the parties involved. Hence, the two-year reglementary period was not followed. CaSAcH In addition, equity is described as justice outside legality, which simply means that it cannot supplant although, it may, as often happens, supplement the law ( Aguila vs. Court of First Instance of Batangas, Br. 1 , 160 SCRA 532). Equity comes in only when the law is inadequate to provide essential justice ( National Federation of Sugar Workers vs. Ovejera , 114 SCRA 354). Indeed, equity is available only in the absence of law and not as its replacement. Section 230 (now 229) of the Tax Code is quite explicit in providing that 'no such suit or proceeding shall be begun after the expiration of two years from the date of payment of the tax or penalty regardless of any supervening cause that may arise after payment.' And the Supreme Court has interpreted this provision to mean that the two years shall be counted from the date the taxpayer filed its final adjustment return considering that it is only at this time when it can be finally ascertain whether the taxpayer has to pay additional income tax or is entitled to a refund of overpaid income taxes ( Commissioner of Internal Revenue vs. Court of Appeals, G.R. No. 117254 , January 21, 1999). In the case at bar, Petitioner filed its final adjustment return on April 14, 1998. Supposedly, it had until April 14, 2000 the day the instant Petition for Review was filed within which to file the legal remedy. However, the year 2000 is a leap year, the two-year period expired on April 13, 2000. It is then obvious that the claim was filed out of time." Petitioner's motion for reconsideration was denied by the CTA in a Resolution dated April 19, 2001. Hence, the instant petition for review contending that the CTA patently erred in dismissing its petition as it is not in accord with law and the applicable decisions of the Supreme Court. On the other hand, respondents argue that the decision of the CTA which is highly specialized body specifically created for the purpose of reviewing tax case, is entitled to respect. The petition is meritorious. Article 13 of the Civil Code reads: "ART. 13. When the laws speak of years, months, days or rights, it shall be understood that years are three hundred sixty-five days each; months, of thirty days; days, of twenty-four hours; and nights from sunset to sunrise. If months are designated by their name, they shall be computed by the number of days which they respectively have. In computing a period, the first day shall be excluded and the last day included." Settled is the rule that where the law does not distinguish, courts should not distinguish. Ube lex non distinguit nec nos distinguere debemos . 1 Inasmuch as Article 13 of the Civil Code does not distinguish between a regular year and a leap year, then the rule that a year has 365 days applies, notwithstanding that fact that a particular year is a leap year. For, when a statute is clear and explicit, there is no need for any extended court ratiocination on the law. There is no room for interpretation, vacillation or equivocation, there is room only for application. 2 WHEREFORE, the Resolutions dated December 15, 2001 and April 19, 2001 of the Court of Tax Appeals are REVERSED and SET ASIDE and the said Court is directed to give due course to the petition for review filed by petitioner. cdll SO ORDERED. De Guia-Salvador and * Mendoza, JJ ., concur. Footnotes *. Vice Justice Jose C. Reyes, Jr., who is on leave, per Office Order No. 151-03-CG dated July 15, 2003. 1. Recaa, Jr. vs. Court of Appeals , 349 SCRA 24, 33. 2. Caguioa vs. Lavia , 345 SCRA 49, 61.