Intel Philippines Manufacturing, Inc. v. Court of Tax Appeals

ELEVENTH DIVISION [CA-G.R. SP No. 75239. June 17, 2004.] INTEL PHILIPPINES MANUFACTURING, INC. petitioner, vs . THE HONORABLE COURT OF TAX APPEALS AND THE HONORABLE COMMISSIONER OF INTERNAL REVENUE , respondents . D E C I S I O N ENRIQUEZ , JR . , J p : This is a Petition for Certiorari under Rule 65 of the 1997 Rules of Civil Procedure, as amended, seeking to set aside the Order of the Court of Tax Appeals made in open court at the hearing of October 7, 2002, declaring Intel Philippines Manufacturing Inc. (hereafter petitioner), to have waived the right to present its evidence and the Resolution dated November 20, 2002 denying petitioner's verbal motion for reconsideration of the aforesaid Order. The dispositive portion of which reads as follows: "Considering the series of absences and request for resetting made by petitioner's counsel since April 03, 2002 when Petitioner was first required to present its case and the disregard by petitioner's counsel of the warning of this Court, the verbal motion for reconsideration of the Order of this Court considering petitioner have waived its right to present further evidence is hereby DENIED. Let this case be heard on JAN 08 2003 for the initial presentation of respondent's evidence. SO ORDERED." The facts of the case as culled from the records are as follows: The petitioner filed before the Commissioner of Internal Revenue (hereafter CIR) a claim for refund of VAT payments in the amount of Twenty Five Million Three Thousand Two Hundred One Pesos and Sixty-One Centavos (Php25,003,201.61) covering the period from October 1, 1999 up to December 31, 1999. Due to the inaction of the CIR, petitioner elevated the claim to the Court of Tax Appeals (hereafter CTA) on December 21, 2001, via Petition for Review. The hearing for the petition was scheduled on April 3, 2002. In an Ex Parte Motion to Cancel Hearing dated April 2, 2002, petitioner asked for the postponement of the scheduled hearing on the ground that Atty. Jeffrey Jaminola (hereafter Atty. Jaminola), one of the handling lawyers, unexpectedly resigned from the firm engaged by petitioner, and that the other handling lawyer, Atty. Dexter Coloso (hereafter Atty. Coloso) had prior commitments with another client of the firm. The hearing was reset to May 7, 2002, on which date Atty. Coloso failed to appear on the mistaken belief that the case would be heard the following day, May 8, 2002, for this was the date requested in the Ex Parte Motion to Cancel Hearing. Moreover, the notice of hearing failed to reach Atty. Coloso because said notice was addressed to prior counsel, Atty. Jaminola. The next hearing was scheduled on June 4, 2002, but said hearing was rescheduled because of the non-appearance of the CIR's counsel. Subsequently, the hearing calendared for July 8, 2002, was called-off due to a typhoon. The trial on August 21, 2002 was also rescheduled, at petitioner's instance, on the ground that its counsel, Atty. Coloso, was taken ill. The CTA granted the petitioner's motion but with a final warning that any further postponement will not be allowed. On the hearing set for October 7, 2002, the CIR was neither present nor was it represented. Petitioner was likewise not represented by counsel because the handling lawyer, Atty. Coloso, ceased to be connected with the law firm engaged by petitioner. During said hearing, the CTA, in open court, issued the assailed order declaring that petitioner had effectively waived its right to present evidence by reason of it's counsel's non-appearance. Petitioner's new handling lawyer, Atty. Pepito G. Po (hereafter Atty. Po), discovered the above-mentioned order only on the hearing of November 13, 2002. Upon learning this, Atty. Po strongly objected to the order and moved for reconsideration. Since there was no objection from opposing counsel, the CTA instructed Atty. Po to formally file a motion for reconsideration. The motion for reconsideration was filed on November 19, 2002. Consequently, the CTA issued the assailed resolution denying petitioner's motion. Hence, this petition raising the sole error that: I THE HONORABLE COURT OF TAX APPEALS ACTED WHIMSICALLY, ARBITRARILY AND OPPRESSIVELY IN DECLARING THE PETITIONER TO HAVE WAIVED ITS RIGHT TO PRESENT EVIDENCE AND HAD THEREFORE ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION. The petition is impressed with merit. Postponements and continuances of trials are parts and parcels of our procedural system of dispensing justice ( Gapoy vs. Adil, 81 SCRA 739) . While it is true that delays in court proceedings should be avoided, speed in judicial administration should not be promoted at the expense of justice. The desideratum of an expeditious disposition of cases is obviously not an absolute proscription of postponements of hearings. The court's discretion on the matter should always be predicated on the consideration that more than the convenience of the courts or the parties of the case, the ends of justice and fairness would be served thereby (Garces vs. Valenzuela, 170 SCRA 745) . In the case at bar, the surrounding circumstances warrant the postponements. First, the non-appearance of petitioner's counsel on the scheduled trial on April 3, 2002 was sufficiently explained in the Ex Parte Motion to Cancel Hearing filed by petitioner. The CTA found good reasons for the deferment and granted the motion. In the second instance, the failure of the handling lawyer, Atty. Coloso, to appear on the hearing set for May 7, 2002, was due to the fact that the notice of hearing sent by the CTA was still addressed to petitioner's previous counsel. The third time was on August 21, 2002, when petitioner was not duly represented because of its counsel's illness. The reasons set forth are far from being arbitrary and dilatory. Although the fourth non-attendance of petitioner's counsel cannot be justified by the fact of Atty. Coloso's resignation from the law firm and the absence of a proper turn-over of cases, it would be most unfair to deprive petitioner its right to present evidence and support its claim. Exception to the rule that the negligence and mistakes of counsel binds the client is when the negligence is so gross, reckless and inexcusable that the client is deprived of his day in court ( Sapad vs. Court of Appeals , 348 SCRA 212). It is of paramount importance that as much as possible each party to a case be accorded free and full opportunity to ventilate his claims and defenses to the end that all the facts may be laid before the Court and the case decided completely on its merits, even if in the process some delay may place ( Garces vs. Valenzuela, Ibid ). This is especially true when the delay does not result to any substantial prejudice to the other party, like in the case at bar, where every postponement benefits the CIR for the latter is still holding the alleged overpayments. Thus, it cannot be argued that the absences were "manifestly dilatory" because any further delay would only prejudice petitioner. WHEREFORE, premises considered, the petition is hereby GRANTED. The Order of the Court of Tax Appeals dated October 7, 2002 and the Resolution dated November 20, 2002 are ANNULLED and SET AIDE. The Court of Tax Appeals is ordered to conduct further proceedings in CTA Case No. 6369 with dispatch. CEaDAc SO ORDERED. Brawner and Roxas, JJ . , concur.