DOJ Opinion No. 094, s. 2004

DOJ OPINION NO. 094 , s. 2004 October 12, 2004 Commissioner Guillermo Parayno Bureau of Internal Revenue Quezon City Attention : Deputy Commissioner Jose Mario C. Bunag Legal & Inspection Group Sir : This has reference to your clarificatory letter dated August 12, 2004 relating to the alleged removal of the tax exemption privileges of the local water districts granted under Presidential Decree No. 198, as amended. The clarificatory information, it appears, is requested in view of the claimed numerous queries sent by these water districts not only to your Office but also to other government departments/agencies, including this Department, on the removal of their tax exemption privileges pursuant to Section 3 of Republic Act No. 7109, otherwise known as "An Act Granting Tax Exemption Privileges to Local Water Districts". 2004cdasia We regret that we are unable to issue confirmatory opinion on the clarificatory Information received. First. Section 6 of R.A. 7109 reads: Sec. 6. Rules and Regulations . The Secretary of Finance shall promulgate the rules and regulations necessary for the effective Implementation of this Act. Since the issue herein presented relates to the interpretation of the provisions of R.A. No. 7109, not to mention the law's implementing rules and regulations, and considering also the fact that under the above-quoted provision, it is the Secretary of the Department of Finance (DOF) who is mandated to issue the rules and regulations needed for the effective implementation of the law, the matter in issue, which would inevitably require an interpretation of the subject provision of the law and its implementing rules and regulations, must logically fall within the jurisdiction of the DOF Secretary. AHCTEa Pursuant to settled policy and precedents, the Secretary of Justice refrains from expressing his views on matters that fall within the primary jurisdiction of another office or agency, in this case the DOF, over which he exercises no revisory authority, unless requested by the office or agency concerned. This time-honored policy is dictated not only by practical considerations but also out of due respect and deference for the competence and expertise of the office or agency having primary jurisdiction to resolve the matters and for its familiarity with the policy repercussions of the issues, not to mention the logical recognition of the lawful exercise of an authority conferred by law. 1 This is especially true in the case where the DOF Secretary, who, as stated earlier, has jurisdiction over the issue, has yet to express his views thereon. Considering the mandate of the law, the Finance Secretary should first be accorded opportunity to express its views on the issue, which is clearly within its policy-sphere and jurisdiction, as said office is better situated not only to translate and explain the legislative intent and policy behind the law's enactment but also to give proper meaning to such intent and policy. 2 Second. Admittedly, the BIR is a government agency administratively placed under the supervision of the Department of Finance. 3 Apart from the fact that the DOF Secretary has yet to express his views thereon, this Department has also adhered to the policy that subordinate officials, on matters involving the performance of their respective duties and functions, should first consult the head of their Department who may, himself, competently resolve the same without the necessity of seeking advice from another office/s or who, himself, may request the opinion of the Secretary of Justice. 4 Third. The subject matter of your communication undeniably involves the substantive rights of private parties, i.e., the local water districts. Since the opinion of the Secretary is merely advisory in nature, 5 such opinion would not be binding upon said private parties which, if adversely affected by such opinion, may take issue therewith and contest it before the courts. As a matter of policy, therefore, the Secretary of Justice has consistently refrained from passing upon issues which, as in this case, is justiciable in nature or can be the subject of judicial litigation. 6 Nonetheless, solely for your information, Section 3 of Republic Act No. 7109, which you quoted in your letter, explicitly provides, to wit: Sec. 3. Period and Conditions of Exemptions . The tax exemption privileges provided for in Sections 1 and 2 to all water districts shall be enjoyed only for a period of five (5) years from the effectivity of this Act : Provided , That the water districts shall adopt internal control reforms that would bring about their economic and financial viability: Provided, further , That, for a water district to be entitled to the tax exemption, its appropriations for personal services, as well as for travel, transportation or representation expenses and purchase of motor vehicles, shall not be increased by more than twenty-five percent (25%) a year during the period of exemption. (Emphasis supplied) In statutory interpretation, nothing is more basic than the rule that where the words and phrases of a statute are not obscure and ambiguous, the meaning and intention of the legislature should be determined from the language employed, and where there is no ambiguity in the words, there should be no room for interpretation and construction; 7 there is only room for application. 8 Very truly yours, (SGD.) RAUL M. GONZALEZ Secretary Footnotes 1. Secretary of Justice Op. Nos. 81, 64, 62 and 4, s. 2004, all citing opinions; 2. Id ., No. 83, s. 2004; 3. Section 18, Chapter 4, Title II, Book IV, E.O. No. 292; 4. Sec. Of Justice Op. No. 29, s. 2003; also Nos. 48, 37 and 35, s. 2001; 5. Id ., Nos. 36 and 7, s. 2004; 6. Id ., Nos. 60, 14, 10 and 6, s. 2004; 7. Libanan vs . House of Representatives Electoral Tribunal , 283 SCRA 520; 8. Secretary of Justice Opinion No. 88, s. 2003, citing cases.