Seven Seas Resorts and Leisure, Inc. v. Commissioners of Internal Revenue

FORMER SPECIAL SEVENTEENTH DIVISION [CA-G.R. SP No. 70810. December 13, 2002.] SEVEN SEAS RESORTS AND LEISURE, INC. , petitioner , vs . COMMISSIONER OF INTERNAL REVENUE and THE COURT OF TAX APPEALS , respondent . R E S O L U T I O N REYES , B. , J p : Before Us is a Motion for Reconsideration filed by petitioner, Seven Seas Resorts and Leisure, Inc. (Seven Seas for brevity), affecting the resolution of this Court promulgated on 27 June 2002, the decretal portion of which reads: "WHEREFORE, in view of the foregoing premises, the instant petition is hereby DISMISSED". (p. 38, rollo ) A prcis of the antecedent facts: On 04 February 2002, the Court of Tax Appeals (CTA) promulgated a resolution in CTA Case No. 5957 entitled "Seven Seas Resorts and Leisure, Inc.", which granted the respondent Commissioner of Internal Revenue's motion to dismiss filed on 15 November 2001 on the ground that petitioner Seven Seas' counsel failed to comply with an order of the Court of Tax Appeals. From the aforesaid order of dismissal, on 21 February 2002, petitioner Seven Seas filed an urgent motion for reconsideration of the above resolution of CTA. On the same date, it likewise filed an Urgent Motion to Admit Formal Offer of Evidence. Not to be outdone, respondent Commissioner of Internal Revenue (CIR) filed with the CTA an Opposition to the Motion for Reconsideration and Motion to Admit Formal Offer of Evidence dated 04 March 2002. In turn, Seven Seas filed an opposition thereto dated 01 April 2002. Thereafter, respondent CIR filed on 11 April 2002 Rejoinder to the Opposition/Comment dated 01 April 2002, raising a new fact which has not been brought to the attention of the CTA before, and which we believe to be material to the resolution of the case at hand. Respondent CIR in his Rejoinder made the disclosure that Assessment Notice No. 27-1-00456-95 dated 10 December 1998, and which is the subject matter of CTA Case No. 5957, had already been cancelled . We quote respondent CIR, viz : 1. Petitioner's Petition for Review No cause of Action, The Assessment Notice No. 27-1-00456-95 dated December 10, 1998 Having Been Cancelled Petitioner's Petition for Review should be dismissed for lack of cause of action since the Assessment Notice No. 27-1-00456-95 dated December 10, 1998 subject of the herein appeal, was cancelled after the filing of the petition for review. The Petitioner's petition for review was filed with the Court of Tax Appeals on October 29, 1999. About a month after, an Amended Assessment Notice No. 27-1-95 with the reduced tax liabilities was issued on November 26, 1999 demanding settlement of the 1995 deficiency final withholding tax liability of P412,093.54 and compromise penalty of P16,000, Percentage Tax of P1,016,654.68 and compromise penalty of P25,000, value-added tax of P369,449.56 and compromise penalty of P16,000". For its part, petitioner Seven Seas filed on 26 April 2002 an Opposition/Comment to Respondent CIR's Rejoinder to Petitioner Seven Seas' Opposition/Comment dated 01 April 2002. After considering the respective positions of petitioner Seven Seas and respondent CIR, the Court of Tax Appeals promulgated a resolution dated 03 May 2002, denying petitioner Seven Seas' Motion for Reconsideration, which ultimately means that the latter's petition for review is deemed dismissed . Hence, the filing of this instant petition for review before this court on 07 June 2002. In this petition, petitioner Seven Seas is seeking for the reversal of the CTA's resolutions dated 04 February 2002 and 03 May 2002, respectively, and further praying that the case be remanded to CTA, for admission of petitioner Seven Seas' formal offer of evidence and reception of additional evidence, if any, from both the petitioner and respondent. As fate had it, in our resolution promulgated on 27 June 2002, We dismissed the Petition for Review on the following grounds, to wit: "1. The verification and certification on non-forum shopping is defective for having been signed by a certain Petrovich N. Ong, Controller of the petitioner Seven Seas Resorts and Leisure, Inc., without the necessary Board resolution authorizing him to sue in behalf of the company. Our Supreme Court in the case of Premiere Marble Resources, Inc. vs. CA (263 SCRA 629) , held that in the absence of an authority from the board of directors, no person, not even the officers of the corporation, can validly bind the corporation. IcHTED 2. It lacks pertinent pleadings as would support the allegations in the petition which is violative of Section 6, Rule 43 of the Rules of Court". (p. 38, rollo ) Aggrieved, on 25 July 2002, petitioner Seven Seas filed with this court a Motion for Reconsideration alleging that we erred in dismissing its Petition for Review since the above-cited case of Premium Marble Resources, Inc. vs. CA is not applicable to the instant case and that there is substantial compliance with the rule on attachment of certified true copies of pertinent pleadings. In Premium Marble case, petitioner Seven Seas averred, a group of stockholders questioned before the court the authority of the officer of the company to cause the filing. In contrast, none of petitioner's stockholders or directors has ever question the authority of Mr. Petrovich N. Ong to cause the preparation and filing of the petition for review. Petitioner Seven Seas, as proof of Mr. Ong's authority, submitted with the Motion for Reconsideration a Secretary's Certificate attesting that petitioner's Board of Directors duly authorized Mr. Ong to cause the preparation and filing of the Petition for Review. Petitioner Seven Seas likewise averred that there was substantial compliance with the rule on attachment of certified true copies of pertinent pleading considering that while no certified true copies of the Resolutions of the Court of Tax Appeals dated February 4, 2002 and May 3, 2002, respectively were attached to the petition for review, certified true copies thereof were actually previously submitted to this Court when Petitioner filed its Motion for Extension of Time to File Petition for Review on May 23, 2002. Nonetheless, Petitioner submitted certified true copies of the following documents: 1. Resolution of the Court of Tax Appeals promulgated on February 4, 2002; 2. Resolution of the Court of Tax Appeals promulgated on May 3, 2002; 3. Urgent Motion for Reconsideration filed by Petitioner with the Court of Tax Appeals on February 21, 2002; 4. Urgent Motion to Admit Formal Offer of Evidence filed by Petitioner with the Court of Tax Appeals on February 21, 2002; 5. Opposition to the Motion for Reconsideration and Motion to Admit Formal Offer of Evidence dated March 4, 2002 filed by Respondent with the Court of Tax Appeals; 6. Opposition/Comment to Respondent's Opposition to Petitioner's Urgent Motion for Reconsideration and Petitioner's Motion to Admit Formal Offer of Evidence dated April 1, 2002 filed by Petitioner with the Court of Tax Appeals; 7. Respondent's Rejoinder to the Opposition/Comment dated April 1, 2002 filed with the Court of Tax Appeals on April 11, 2002; 8. Opposition/Comment dated April 1, 2002 filed by Petitioner with the Court of Tax Appeals on April 26, 2002. In its Comment/Opposition filed with this Court, Respondent CIR opposes Petitioner's Motion for Reconsideration on the following arguments: I. The verification and certification of non-forum shopping in the Petition for Review is defective. II. The Petition for Review lacks pertinent pleadings in support of the allegations in the petition. III. The dismissal of the case by the Court of Tax Appeals was justified for the obstinate refusal of Petitioner to comply with the order of the CTA. IV. There is no need to for the conduct of further proceedings before the CTA in view of (1) Petitioner's admission of the loss of subject matter and cause of action at the CTA and (2) the said Court has no jurisdiction over the Amended Assessment Notices No. 27-95 issued on November 26, 1999 because Petitioner is still protesting the said amended assessment notice with the BIR at the administrative level. V. Liberal Interpretation of technical rules does not apply if there is clear and obstinate refusal to obey said rules. Prescinding therefrom, We resolve to grant the Motion for Reconsideration and give due course to the Petition for Review. Petitioner Seven Seas in its Motion for Reconsideration submitted a sworn Secretary's Certificate attesting to the fact that the Board of Directors of Petitioner duly authorized Mr. Petrovich N. Ong to cause the preparation and filing of the Petition for Review. In Shipside Incorporated vs. Court of Appeals (352 SCRA 334) , the Supreme Court allowed the belated filing of a secretary's certificate attesting that the signatory to the petition was authorized to bring such action on behalf of the corporation. We quote the pertinent portion of the decision as follows: "In the instant case, the merits of petitioner's case should be considered special circumstances or compelling reasons that justify tempering the requirement in regard to the certificate of non-forum shopping. Moreover, in Loyola, Roadway, and Uy, the Court excused non-compliance with the requirement as to the certificate of non-forum shopping. With more reason should we allow the instant petition since petitioner did submit a certification on non-forum shopping, failing only to show proof that the signatory was authorized to do so. That petitioner subsequently submitted a secretary's certificate attesting that Balbin was authorized to file an action on behalf of petitioner likewise mitigates this oversight. It must also be kept in mind that while the requirement of the certificate of non-forum shopping is mandatory, nonetheless the requirements must not be interpreted too literally and thus defeat the objective of preventing the undesirable practice of forum-shopping ( Bernardo v. NLRC, 255 SCRA 108 [1996] ). Lastly, technical rules of procedure should be used to promote, not frustrate justice. While the swift unclogging of court dockets is a laudable objective, the granting of substantial justice is an even more urgent ideal." In the instant case, the Petition for Review was accomplished by a verification/certification signed by Mr. Petrovich N. Ong. Considering that Petitioner in its Motion for Reconsideration submitted to this Court a duly sworn Secretary's Certificate attesting to the fact that Mr. Petrovich N. Ong is duly authorized by Petitioner's Board of Directors to file the question, We believe that Petitioner substantially complied with the requirement on certificate of non-forum shopping. Likewise, Petitioner Seven Seas substantially complied with the requirement on submission of certified true copies of pertinent pleadings inasmuch as certified true copies of pertinent pleadings were subsequently submitted to this Court in its Motion for Reconsideration. Moreover, Petitioner previously submitted certified true copies of the assailed Resolutions of the Court of Tax Appeals in its Motion for Extension of Time to File Petition for Review filed on May 23, 2002. No less than the Supreme Court has held in Ambrosio vs. Intermediate Appellate Court (G.R. No. 75663, January 17, 1990) that: ". . . strict adherence to technical adjective rules should never be unexceptionally required, specially in the context of facts from which substantial compliance with the rules may be reasonably inferred; a contrary precept would result in a failure to decide cases on their merits. It should be the function of courts to afford parties-litigants the amplest opportunity for the proper and just determination of their cause, free from the constraint of technicalities. In the disposition of controversies, reasonable and justifiable liberality in the application of procedural rules should be the guiding principle, where otherwise substantial justice would be jeopardized; inadequacies and errors of form should be overlooked when they would defeat rather than help in arriving at a just and fair result as to the essential merits of any case." While We hold that Petitioner Seven Seas has complied with the above-discussed procedural requirements warranting reinstatement of the Petition for Review, We agree with Respondent CIR that there is no need to remand the case and conduct further proceedings before the Court of Tax Appeals considering that Assessment Notices No. 27-1-00456-95 and demand letters all dated December 10, 1998, which are the subject matter of the petition for review, have already been cancelled with the issuance of amended Assessment Notices No. 27-1-95. With the cancellation of Assessment Notices No. 27-1-00456-95, Petitioner Seven Seas had been deprived of a cause of action as it was precisely from this assessment that it appealed to the Court of Tax Appeals ( Elegado vs. Court of Tax Appeals, et al., G.R. No. L-68385, May 12, 1989 ). Thus, to conduct further proceedings in the case would be moot and academic. WHEREFORE, in view of the foregoing, the instant Petition for Review is hereby DISMISSED for lack of cause of action. SO ORDERED. Tria-Tirona and Sundiam, JJ . , concur.