Fort Bonifacio Corp. v. Commissioner of Internal Revenue

FIRST DIVISION [CA-G.R. SP No. 76540. April 30, 2007.] FORT BONIFACIO DEVELOPMENT CORPORATION , petitioner , vs .COMMISSIONER OF INTERNAL REVENUE and REVENUE DISTRICT OFFICER, REVENUE DISTRICT NO. 44, TAGUIG & PATEROS, BUREAU OF INTERNAL REVENUE , respondents . D E C I S I O N DIMAAMPAO , J p : This is a Petition for Review assailing the Resolution 1 dated 28 March 2003 of the Court of Tax Appeals which denied petitioner's claim for tax refund amounting to P77,151,020,46. Caught in this legal quagmire is petitioner Fort Bonifacio Development Corporation, a domestic corporation engaged in real estate business. Forty five percent (45%) of petitioner's issued and outstanding capital stock is owned by the Bases Conversion and Development Authority (BCDA), a wholly owned government corporation created pursuant to Republic Act No. 7227; 2 while the remaining fifty five percent (55%) is owned by Bonifacio Land Corporation, a consortium of private domestic corporations. 3 In May 1996, petitioner started to develop parcels of land within a newtown development area known as the Fort Bonifacio Global City ("Global City"),located within Fort Bonifacio, Taguig, Metro Manila. By October 1996, petitioner began selling these Global City lots to interested buyers. Petitioner recounted that before the lots at Global City were transferred and conveyed 4 to it by the National Government by virtue of Republic Act No. 7227 5 and Executive Order No. 40 6 dated 8 December 1992, these lands were formerly part of the Fort Bonifacio reservation. 7 Petitioner did not pay any value-added tax upon purchasing the lots from the National Government. 8 cHAaCE With the eventual enactment of Republic Act No. 7716, 9 or the Expanded Value-Added Tax Law, value-added tax was imposed on the sale of real properties. 10 Petitioner claimed it was directly affected by this new imposition because the sale of real estate property became subject to value-added tax, a burden that it did not take into account when it tendered its bid for the acquisition of the Global City property. 11 To ease the adverse effect of the newly imposed burden upon it, petitioner sought to avail of the transitional input tax credit under Section 105 12 of the National Internal Revenue Code, as amended by Executive Order No. 273, 13 by submitting to the Revenue District Office No. 44 of the Bureau of Internal Revenue (BIR) the requisite inventory of its properties. 14 Incidentally, for the first quarter of 1998, petitioner earned P903,427,264.20 15 from the sale and lease of Global City lots, thereby making it liable for the payment of P90,342,726.42 16 output tax. 17 To pay said taxes, petitioner made cash payments in the aggregate amount of P77,151,020.46, and utilized its regular input tax credit of P39,878,959.37 on purchases of goods and services. 18 Subsequently, on 22 November 1999, petitioner filed a claim for refund of the aforementioned P77,151,020.46 which it alleged was erroneously collected "due to the fact that no transitional or presumptive input tax credit on ...(the) beginning land inventory was taken into account in making such payment." 19 Petitioner recalled it had previously filed claims for refund on 8 October 1998, 17 November 1998, 11 February 1999, 11 May 1999, and 10 September 1999, in the amounts of P269,340,469.45, P359,652,009.47, P486,355,846.78, P347,741,695.74, and P15,036,891.26, respectively. 20 After deducting these amounts from the total input tax credit of P5,698,200,256.00, the difference was more than enough to cover the disputed P77,151,020.46 refund. As it turned out, the BIR did not act on the claim for refund prompting petitioner to file a Petition for Review 21 before the Court of Tax Appeals, docketed as CTA Case No. 6021. In its Answer, 22 respondent Commissioner of Internal Revenue ("respondent Commissioner") asserted that the transitional input tax credit claimed by petitioner cannot be allowed following the mandate of Revenue Regulations No. 7-95, 23 which provides that the basis of the transitional input tax for real estate dealers shall be the improvements, such as buildings, roads, drainage systems and other similar structures constructed on or after 1 January 1998. Revenue Regulations No. 7-95 did not include therein the cost of the land. DTIaHE Insisting that the claim for refund has no basis, respondent Commissioner likewise posited that: (1) petitioner purchased and acquired the properties covered by its inventory under a VAT-free sale transaction given that its vendor, the National Government did not pass on any VAT or sales tax as part of the purchase price; and (2) petitioner belatedly submitted its inventory on 19 September 1996 in contravention of Revenue Regulations No. 7-95, which mandated that said inventory must be filed with the Revenue District Office before 31 January 1996. Weighing the respective arguments of the parties, the Court of Tax Appeals (CTA) rendered its Decision 24 dated 30 January 2002 granting petitioner's claim for refund in the amount of P77,151,020.46. Pertinent portions of the Decision read: "xxx xxx xxx This Court, in upholding the position taken by the Petitioner, is convinced that Section 105 of the Tax Code is clear in itself. Explicit therefrom is the fact that a taxpayer shall be allowed a transitional/presumptive input tax credits based on the value of its beginning inventory of goods which is defined in Section 100 as to encompass even real property. Said finding is fully explained in the case of Fort Bonifacio Development Corporation vs. Commissioner of Internal Revenue, et al.,CTA Case No. 5962, December 7, 2001, which provides, thus : xxx xxx xxx There is nothing in (Section 105 of the NIRC) which conveys that the 8% transitional input tax shall be based on the value of the improvements of such goods, materials or supplies. Moreover, Section 100(a)(1)(A), in relation to Sections 104(a)(2)(B) and 105 all of the Tax Code which provide that the presumptive input tax of 8% on the cost of the inventory of goods or properties as of December 31, 1995 shall mean all tangible and intangible objects which are capable of pecuniary estimation and shall include: (a) real properties held primarily for sale to customer or held for lease in the ordinary course of trade or business and not only to improvements. As relative hereto, Section 100(1)(A) of the NIRC, as amended by Republic Act No. 7716, provides that the term "goods or properties" shall mean all tangible and intangible objects which are capable of pecuniary estimation and shall include real properties held primarily for sale to customers or held for lease in the ordinary course of trade or business. In this regard, We come to the logical conclusion that the 8% transitional input tax provided for under Section 105 in relation to Section 100 of the NIRC, may be based on the value of the taxpayer's beginning inventory of real properties and not only on the improvements thereon . xxx xxx xxx A circumspect scrutiny of the entire text of Revenue Regulations No. 7-95 will reveal some inconsistencies which could crush the contention propounded by the Respondent as to the basis of the transitional/presumptive input tax. It was observed that the transitory provisions contain contradictions that all the more prove the point that Respondent erred in basing the transitional input tax credit of real estate dealers on the value of the improvements." 25 (Emphasis supplied) On 13 March 2002, respondent Commissioner filed its Motion for Reconsideration 26 insisting that Revenue Regulations No. 7-95 was valid as it merely implemented the clear mandate of the statute. Respondent Commissioner also harped on the rule that exemptions from taxation must be construed strictissimi juris against the taxpayer and liberally in favor of the taxing authority inasmuch as the power of taxation is necessary to the continued existence of the government. aSIHcT Petitioner vigorously opposed the Motion for Reconsideration maintaining that said pleading was a worthless scrap of paper for it was not duly accompanied by the requisite notice of hearing. 27 Respondent Commissioner forthwith submitted the contentious notice of hearing explaining that it inadvertently failed to attach the same in its Motion for Reconsideration. 28 On 28 March 2003, the court a quo rendered the assailed Resolution 29 finding merit in respondent Commissioner's position. In a complete turn-about of its previous stance, the court a quo held: "After a careful review of the records of the case as well as the laws and jurisprudence pertinent thereto, this court finds the arguments of respondents worthy of reconsideration. We agree with the position taken by the respondents that Revenue Regulations No. 7-95 is not contrary to the basic law which it seeks to implement. As clearly worded, Section 105 of the Tax Code provides that a person who becomes liable to the value-added tax or any person who elects to be a VAT-registered person shall be allowed 8% transitional input tax subject to the filing of an inventory as prescribed by regulations. Section 105, which requires the filing of an inventory for the grant of the transitional input tax, is couched in a manner where there is a need fear an implementing rule or regulation to carry its intendment. True to wordings, the BIR issued Revenue Regulations No. 7-95 (specifically Section 4.105-1) which succinctly mentioned that the basis of the presumptive input tax shall be the improvements in case of real estate dealers. The said regulations are not contrary to the provisions of Section(s) 100 and 105 of the 1996 Tax Code as said provisions are so clear that they are ripe for application. 30 xxx xxx xxx WHEREFORE, in view of the foregoing, the instant Motion for Reconsideration filed by respondents is hereby GRANTED. Accordingly, petitioner's claim for refund of the alleged overpaid Value-Added Tax in the amount of P77,151,020.46 covering the first quarter of 1998 is hereby DENIED for lack of merit. SO ORDERED." 31 (Emphasis supplied) CITaSA Hence, this Petition for Review anchored on the following assignment of errors: I. THE COURT OF TAX APPEALS ERRED IN TAKING COGNIZANCE OF RESPONDENTS' MOTION FOR RECONSIDERATION OF THE DECISION OF JANUARY 30, 2002 NOTWITHSTANDING THAT SAID MOTION DID NOT CONTAIN, AND WAS NOT ACCOMPANIED BY, THE REQUIRED NOTICE OF HEARING. II. THE COURT OF TAX APPEALS ERRED IN HOLDING THAT SECTION 4.105-1 OF REVENUE REGULATIONS NO. 7-95 OF THE BUREAU OF INTERNAL REVENUE IS NOT CONTRARY TO THE PROVISIONS OF SECTIONS 100 AND 105 OF THE NATIONAL INTERNAL REVENUE CODE. III. THE COURT OF TAX APPEALS ERRED IN NOT HOLDING THAT THE 8% INPUT TAX CREDIT MAY BE BASED ON THE VALUE OF THE TAXPAYER'S BEGINNING INVENTORY OF LAND. IV. THE COURT OF TAX APPEALS ERRED IN HOLDING THAT PETITIONER IS NOT ENTITLED TO THE INPUT TAX CREDIT PROVIDED FOR IN SECTION 105 OF THE NATIONAL INTERNAL REVENUE CODE BECAUSE IT HAD NOT PREVIOUSLY PAID VALUE-ADDED TAXES OR OTHER BUSINESS TAXES ON ITS INVENTORY OF LAND. V. THE COURT OF TAX APPEALS VIRTUALLY AMENDED SECTION 105 OF THE NATIONAL INTERNAL REVENUE CODE BY REQUIRING A CONDITION NOT PROVIDED FOR THEREIN. VI. THE COURT OF TAX APPEALS ERRED IN NOT HOLDING THAT THE INPUT TAX CREDIT CLAIMED BY PETITIONER IS STATUTORILY PRESUMED. VII. THE COURT OF TAX APPEALS ERRED IN DENYING PETITIONER'S CLAIM FOR REFUND. cDAEIH Guided by pertinent law and jurisprudence, a review of the records convinced Us that the Petition is bereft of merit . To Our mind, the key to resolving the jugular issue of this controversy involves a deeper analysis on how the much-contested transitional input tax credit has been encrypted in the country's value-added tax (VAT) system. Though the passage of time, laws on VAT have immensely evolved. In the Philippines, the value-added system of sales taxation has long been in existence, albeit in a different mode. Prior to 1978, the system was a single-stage tax computed under the "cost deduction method" and was payable only by the original sellers. It was only in 1987, when President Corazon C. Aquino issued Executive Order No. 273 , 32 that the VAT system was rationalized by imposing a multi-stage tax rate of 0% or 10% on all sales using the "tax credit method." 33 Significantly, Section 99 of the National Internal Revenue Code, as amended by E.O. No. 273 ,dictates in no uncertain terms the transactions covered by VAT: "Sec. 99. Persons liable . Any person who, in the course of trade or business, sells, barters or exchanges goods, renders services, or engages in similar transactions and any person who imports goods shall be subject to the value-added tax imposed in Sections 100-102 of this Code." As clearly worded in the afore-quoted law, VAT is imposed on any person who in the course of trade or business, sells, barters, or exchanges goods, renders services, or engages in similar transaction, and any person who imports goods, whether or not for business purposes. So that, if the object of the transaction is immobilized by incorporation to an immovable structure at the time of the sale or by destination in the premises where it is used to meet the needs of the industry or works thereon carried, the sale thereof is exempt from VAT, as VAT is not applicable to real property. 34 Given that the VAT eliminated privilege taxes, multiple rated sales tax on manufacturers and producers, advance sales tax and compensating tax on importations, 35 lawmakers intended a smooth transition from the non-VAT to the VAT system. This was precisely the purpose of` the disputed transitional input tax credit provided for in E.O. No. 273: "SEC. 105. Transitional input tax credits . A person who becomes liable to value-added tax or any person who elects to be a VAT-registered person shall, subject to the filing of an inventory as prescribed by regulations, be allowed input tax on his beginning inventory of goods, materials and supplies equivalent to 8% 36 of the value of such inventory or the actual value-added tax paid on such goods, materials and supplies, whichever is higher, which shall be creditable against the output tax ." (Emphasis supplied) aHIDAE In the meantime, the sizeable revenue expected from the collection of VAT as imposed by E.O. No. 273 was sadly a mere illusive reverie. Serious fiscal deficit continued to haunt the country. Congress hoped to rescue the nation from this inescapable cataclysm. In the interpellations conducted for Senate Bill 1630, 37 then Senator Ernesto Herrera proposed that the coverage of the VAT be expanded to include imposition thereof on the sale, barter or exchange of real properties ,among others. Thus "When the value-added tax was introduced in the Philippines in 1988 via Executive Order No. 273, it held a lot of promise for the Philippine tax system. The Philippine VAT was intended to be broad-based, covering the sale of all goods and services including importations. Exports would be zero-rated and only very few exemptions would be granted to promote certain policy objectives. A comprehensive VAT would have been the ideal structure. Sadly, however, what eventually evolve was not was envisioned. A number of activities, particularly in services, remained outside the VAT ambit. These include catering, restaurants, hotels, intangibles, and amusement activities. There is also a wide array of exemptions from VAT including those which generate substantial income and value-added. To exclude services from its coverage is the surest way to make the VAT inelastic and inequitable. This is because services account for 44 percent of GNP and a significant fraction of the income of the affluent is spent on services. The failure to cover services prevents VAT revenues from growing with the GNP and frees the affluent from taxation. 38 xxx xxx xxx Now, the sale of pesticide is among those which are excluded, which we are now including; the real property or the land developers are excluded, and now, we would like to include these, and there are certain exemptions granted to certain sectors which should not be included. Therefore, under this proposal, we are including them in the coverage of the VAT. 39 xxx xxx xxx Mr. President, one of the very profitable industries in the country today is real estate development. The revenue potential of this sector is about P750 million. Right now, they are exempted from the coverage of VAT. The Committee strongly believes that they have to be covered, but we will see to it that the threshold of P10,000 again in the case of rental in urban centers should be reviewed. 40 xxx xxx xxx Mr. President, what is exempted here is the sale of real property by one who is not engaged in real estate business. It means that if one's business is in real estate, he is engaged in the selling of properties, then he is covered. But if one is an owner of a particular property and he would like to sell his property, he is not covered. He is exempted because that is not his regular business." 41 (Emphasis supplied) Inevitably, Republic Act No. 7716 , 42 was signed into law expanding the coverage of VAT to include imposition thereof on the sale, barter or exchange and such other transactions involving real properties "Sec. 100. Value-added-tax on sale of goods or properties . (a) Rate and base of tax. There shall be levied, assessed and collected on every sale, barter or exchange of goods or properties , a value-added tax equivalent to 10% of the gross selling price or gross value in money of the goods, or properties sold, bartered or exchanged, such tax to be paid by the seller or transferor. xxx xxx xxx (Emphasis supplied) R.A. No. 7716 retained the provision on transitional input tax credit. Parenthetically, the Commissioner of Internal Revenue promulgated Revenue Regulations No. 7-95 which laid down, among others, the basis of the transitional input tax credit for real estate dealers: "Sec. 4.105-1. Transitional input tax on beginning inventories . Taxpayers who became VAT-registered persons upon effectivity of R.A. No. 7716 who have exceeded the minimum turnover of P500,000.00 or who voluntarily register even if their turnover does not exceed P500,000.00 shall be entitled to a presumptive input tax on the inventory on hand as of December 31, 1995 on the following: (a) goods purchased for resale in their present condition; (b) materials purchased for further processing, but which have not yet undergone processing; (c) goods which have been manufactured by the taxpayer; (d) goods in process and supplies, all of which are for sale or for use in the course of the taxpayer's trade or business as a VAT-registered person. cDCHaS However, in the case of real estate dealers, the basis of the presumptive input tax shall be the improvements, such as buildings, roads, drainage systems, and other similar structures, constructed on or after the effectivity of E.O. 273 (January 1, 1998) . xxx xxx xxx" (Emphasis supplied) The Regulation unmistakably allows credit for transitional input tax of any person who becomes liable to VAT or who elects to be a VAT-registered person. More particularly, real estate dealers who were beforehand not subject to VAT are allowed a tax credit to cushion the staggering effect of the newly imposed 10% output VAT liability under R.A. No. 7716. Bearing in mind the purpose of the transitional input tax credit under the VAT system, We find it incongruous to grant petitioner's claim for tax refund. We take note of the fact that petitioner acquired the Global City lots from the National Government. The transaction was not subject to any sales or business tax. Since the seller did not pass on any tax liability to petitioner, the latter may not claim tax credit. Clearly then, petitioner cannot simply demand that it is entitled to the transitional input tax credit. We agree with the dissenting opinion of Presiding Judge Ernesto D. Acosta of the CTA whose view was later adopted by the majority "What the law seeks to prevent in granting the benefit of transitional input tax credit is the scenario wherein the taxpayer to whom the tax is passed on could not utilize the tax it paid due to the transition from the sales tax system to the VAT system or in the case of EVAT law, the transition from being exempt from VAT to being subject to VAT as in the case of real estate dealers. Evidently, in order to avail of such benefit there must be a prior payment of VAT or sales tax ." 43 (Emphasis supplied) And as succinctly ratiocinated in the assailed Resolution dated 28 March 2003 "...(T)he government did not pass on any VAT or any other business tax to the petitioner as part of the purchase price of the real estate. To allow petitioner the 8% Transitional Input Tax to offset his output VAT liability without having paid any previous tax has the net effect of granting petitioner an outright bonus in the amount equivalent to the said 8% transitional input tax which reduces his 10% output VAT liability contrary to the concept of the grant of transitional input tax ." 44 (Emphasis supplied) HTSaEC Another point. Section 105 45 of the National Internal Revenue Code, as amended by E.O. No. 273 explicitly provides that the transitional input tax credit shall be based on "the beginning inventory of goods, materials and supplies or the actual value-added tax paid on such goods, materials and supplies, whichever is higher". Note that the law did not simply say the transitional input tax credit shall be 8% of the beginning inventory of goods, materials and supplies. Instead, lawmakers went on to say that the creditable input tax shall be whichever is higher between the value of the inventory and the actual VAT paid. Necessarily then, a comparison of these two figures would have to be made. This strengthens Our view that previous payment of the VAT is indispensable to determine the actual value of the input tax creditable against the output tax. So too, this is in consonance with the present tax credit method adopted in this jurisdiction whereby an entity can credit against or subtract from the VAT charged on its sales or outputs the VAT paid on its purchases, inputs and imports. 46 We proceed to traverse another argument raised in this controversy. Petitioner insists that the term "goods" which was one of the bases in computing the transitional input tax credit 47 must be construed so as to include real properties held primarily for sale to customers. 48 Petitioner posits that respondent Commissioner practically rewrote the law when it issued Revenue Regulations No. 7-95 which limited the basis of the 8% transitional input tax credit to the value of improvements alone. Petitioner is clearly mistaken. The term "goods" has been defined to mean any movable or tangible objects which are appreciable or tangible. 49 More specifically, the word "good" is always used to designate wares, commodities, and personal chattels; and does not include chattels real. 50 "Real property" on the other hand, refers to land, and generally whatever is erected or growing upon or affirmed to land. 51 It is therefore quite absurd to equate "goods" as being synonymous to "properties".The vast difference between the terms "goods" and "real properties" is so obvious that petitioner's assertion must be struck down for being utterly baseless and specious. Along this line, We uphold the validity of Revenue Regulations No. 7-95. The authority of the Secretary of Finance, in conjunction with the Commissioner of Internal Revenue, to promulgate all needful rules and regulations for the effective enforcement of internal revenue laws cannot be controverted. Neither can it be disputed that such rules and regulations, as well as administrative opinions and rulings, ordinarily should deserve weight and respect by the courts. Much more fundamental than either of the above, however, is that all such issuances must not override, but must remain consistent and in harmony with, the law they seek to apply and implement. Administrative rules and regulations are intended to carry out, neither to supplant nor to modify, the law. 52 Revenue Regulations No. 7-95 is clearly not inconsistent with the prevailing statute insofar as the provision on transitional input tax credit is concerned. CIDcHA Again, in his dissenting opinion, Judge Acosta opines, and We Quote: "Respondent was correct in basing the 8% transitional input tax credit on the value of the improvements on the land such as buildings, roads, drainage systems and similar structures constructed on or after the effectivity of Executive Order 273, pursuant to the wordings of Section 4.105-1 of Revenue Regulations No. 7-95. . . . Such basis is consistent with the purpose of the transitional input tax credit because when a real estate dealer puts up improvements on the real properties as those enumerated in Revenue Regulations No. 7-95, VAT is necessarily passed on to them either as part of the acquisition cost of the materials used in the building the improvements or as part of the cost of the services rendered in building the same. So in the event those lots with improvements are sold by the dealers upon the effectivity the E-VAT law or thereafter, the VAT passed on to them can be utilized to pay their output VAT liabilities. It is wrong therefore for the Petitioner to state that Section 4.105-1 of Revenue Regulations No. 7-95 is contrary to law, rather we find it to be consistent and in harmony with the law it seeks to implement." 53 (Emphasis supplied) Finally, We rule on the procedural issue. Petitioner desperately seeks to impress upon Us that respondent Commissioner's Motion for Reconsideration of the CTA's Decision 54 dated 30 January 2002 was a worthless scrap of paper for it was not accompanied by the requisite Notice of Hearing. Suffice it to say that respondent Commissioner owed up to its inadvertence in failing to attach the contentious Notice of Hearing, and submitted, albeit late, the said pleading. 55 The CTA apparently excused such inadvertence and squarely ruled on the substantial issues raised in the Motion for Reconsideration. We find that the higher interest of justice demands that the respondent Commissioner's inadvertence be excused pro hac vice. WHEREFORE, the Petition for Review is DENIED. SO ORDERED. TIcAaH Reyes and Guaria, III, JJ., concur. Footnotes 1. Rollo ,pp. 241-246. 2. Entitled "An Act Accelerating the Conversion of Military Reservations into Other Productive Uses, Creating the Bases Conversion and Development Authority for the Purpose, Providing Funds Therefor and for Other Purposes", approved on 13 March 1992. 3. Stipulation of Facts, Documents and Issues, paragraphs 1.04 to 1.05; Rollo ,p. 127. 4. As proof of its ownership, Special Patent No. 3596, and later Original Certificate of Title No. SP-001 was registered in petitioner's name, Rollo ,pp. 90-97. 5. Supra at Note 2. 6. Entitled "Implementing The Provisions Of Republic Act No. 7227 Authorizing The Bases Conversion And Development Authority (BCDA) To Raise Funds Through The Sale Of Metro Manila Military Camps Transferred To BCDA To Form Part Of Its Capitalization And To Be Used For The Purposes Stated In Said Act" approved on 8 December 1992. 7. Stipulation of Facts, Documents and Issues, paragraphs 1.06 and 1.08; Rollo ,p. 128. 8. Paragraph 1.02 of the Petition for Review; Rollo ,p. 10. 9. Entitled "An Act Restructuring the Value-Added Tax (VAT) System, Widening its Tax Base and Enhancing its Administration, and For These Purposes Amending and Repealing the Relevant Provisions of the National Internal Revenue Code, As Amended, And For Other Purposes", approved on 5 May 1994. 10. Section 100 of the National Internal Revenue Code, as amended by Republic Act No. 7716. 11. Paragraphs 1.02 and 1.03 of the Petition for Review, pp. 10-11. 12. Section 105. "Transitional input tax credits. A person who becomes liable to value-added tax or any person who elects to be a VAT-registered person shall, subject to the filing of an inventory as prescribed by regulations, be allowed input tax on his beginning inventory of goods, materials and supplies equivalent to 8% of the value of such inventory or the actual value-added tax paid on such goods, materials and supplies, whichever is higher, which shall be creditable against the output tax." 13. Entitled "Adopting a Value-Added Tax, Amending for this Purpose Certain Provisions of the National Internal Revenue Code, and for Other Purposes", which took effect on 1 January 1988. 14. Submitted on 19 September 1996; Rollo ,pp. 99-100. 15. Paragraph 1.11 of the Stipulation of Facts, Documents and Issues; Rollo ,p. 129. 16. Ibid. 17. Rollo ,pp. 101-102. 18. Paragraph 1.12 of the Stipulation of Facts, Documents and Issues; Rollo ,p. 129. 19. Rollo ,p. 103. 20. Stipulation of Facts, Documents and Issues, Paragraph 1.14; Rollo ,pp. 129-130. 21. Rollo ,pp. 77-89. 22. Rollo ,pp. 123-125. 23. Dated 9 December 1995. 24. Rollo ,pp. 184-201. 25. Pages 11-12 of the Decision dated 30 January 2002; Rollo ,pp. 194-195. 26. Rollo ,pp. 212-215. 27. Manifestation dated 4 March 2002; Rollo ,pp. 216-218. 28. Manifestation dated 13 March 2002; Rollo ,pp. 219-221. 29. Rollo ,pp. 240-246. 30. Pages 3-4 of the assailed Resolution dated 28 March 2003; Rollo ,pp. 242-243. 31. Page 6 of the assailed Resolution dated 28 March 2003, Rollo ,pp. 246. 32. Entitled "Adopting a Value-Added Tax, Amending for this Purpose Certain Provisions of the National Internal Revenue Code, and for Other Purposes", which took effect on 1 January 1988. 33. Abakada Guro Party List v. Ermita ,469 SCRA 1, 91-92 (2005). 34. VAT Ruling No. 051, 29 May 1991. The Nati onal Internal Revenue C ode Annotated by Hector S. De Leon, pp. 347-348 (Fifth Edition, 1994). 35. See Kapatiran ng mga Naglilingkod sa Pamahalaan ng Pilipinas, Inc. v. Tan, 163 SCRA 371, 379 (1988). 36. The latest amendment to the VAT as provided under Sec. 111 of Republic Act No. 9337 (Value-Added Tax Law of 2005) which took effect on 1 July 2005 reads: "A person who becomes liable to value-added tax or any person who elects to be a VAT-registered person shall, subject to the filing of an inventory according to rules and regulations prescribed by the Secretary of Finance, upon recommendation of the Commissioner, be allowed input tax on his beginning inventory of goods, materials and supplies equivalent to 2% of the value of such inventory or the actual value-added tax paid on such goods, materials and supplies, whichever is higher, which shall be creditable against the output tax." 37. Entitled "An Act Restructuring the Value-Added Tax (VAT) System to Widen its Tax Base and Enhance its Administration, Amending for These Purposes Sections 99, 100, 102, 103, 104, 105, 107, 108, and 110 of Title IV, 112 of Title V, and 236, 237 and 238 of Title IX, and Repealing Sections 113, 114 and 116 of Title V, all of the N ational Internal Re venue Co de, as ame nded, and for Other Purposes." 38. Held on 8 February 1994. 39. Held on 21 March 1994. 40. Held on 22 March 1994. 41. Ibid. 42. Entitled "An Act Restructuring the Value-Added Tax (VAT) System, Widening its Tax Base and Enhancing its Administration, and For These Purposes Amending and Repealing the Relevant Provisions of the National Internal Revenue Code, As amended, And For Other Purposes" approved on 5 May 1994. 43. Rollo ,p. 208. 44. Page 6 of the assailed Resolution; Rollo ,p. 246. 45. Sec. 111 of Republic Act No. 9337 (Value-Added Tax Law of 2005) dated 26 July 2004. Supra at Note. 36. 46. See Commissioner of Internal Revenue v. Seagate Technology (Philippines) ,451 SCRA 132, 142 (2005). 47. "Sec. 105. Transitional input tax credits. A person who becomes liable to value-added tax or any person who elects to be a VAT-registered person shall, subject to the filing of an inventory as prescribed by regulations, be allowed input tax on his beginning inventory of goods, materials and supplies equivalent 8% of the value of such inventory or the actual value-added tax paid on such goods, materials and supplies, whichever is higher, which shall be creditable against the output tax." (Emphasis supplied.) 48. Section 100 of the National Internal Revenue Code (NIRC), as amended by Republic Act No. 7716. Now Section 106 of the same Code, as further amended by Republic Act No. 9337 or The Value-Added Tax Law of 2005. 49. Revenue Regulations No. 5-87. 50. Bouvier's Law Dictionary, Third Revision, Vol. I, p. 1364, reprinted in 1975. 51. Bouvier's Law Dictionary, Third Revision, Vol. II, p. 2816, reprinted in 1975. 52. Commissioner of Internal Revenue v. Court of Appeals , 240 SCRA 368, 372 (1995). 53. Rollo ,p. 210. 54. Rollo ,pp. 184-201. 55. Manifestation dated 13 March 2002; Rollo ,pp. 219-221.