New Rules on the Registration and Sale of Pre-Need Plans Under Section 16 of the Securities Regulation Code

EN BANC [C.T.A. EB CASE NO. 535 . July 27, 2011.] (C.T.A. Case No. 6547) COMMISSIONER OF INTERNAL REVENUE , petitioner , vs . PILIPINAS SHELL PETROLEUM CORPORATION , respondent . RESOLUTION MINDARO-GRULLA , J p : Submitted for resolution are petitioner's Motion for Reconsideration filed on March 14, 2011 of the Decision of the Court En Banc dated February 22, 2011 and respondent's Comment/Opposition [To: Motion for Reconsideration Dated 09 March 2011] thereto filed on April 25, 2011. The dispositive portion of the assailed Decision reads: " WHEREFORE , the instant Petition for Review is hereby DENIED for lack of merit. The assailed Decision dated April 30, 2009 and assailed Resolution dated August 18, 2009 are AFFIRMED . SO ORDERED. " In her motion, petitioner reiterates the following arguments before this Court, to wit: 1. This Court should have deviated from the Principle of Stare Decisis considering the substantially huge amount of money involved in the instant case, the unmitigated fraud that attended the procurement and transfer of the subject Transfer Credit Certificates, (TCCs) and the resultant loss to the government; 1 2. This Court erred in not resolving the issue on the validity of the TCCs despite proofs of fraudulent acquisition of the subject TCCs; 2 3. This Court erred in declaring respondent as an innocent transferee in good faith and for value, and thus may not be unjustly prejudiced by the fraudulent procurement of the TCCs. Instead, petitioner avers that respondent's claim of good faith is immaterial because it was well aware that it is subject to post-audit examination as indicated in the face of the TCCs. Moreover, as an assignee of the TCCs, it merely stepped into the shoes of the transferors and thus subject to the conditions imposed therein; 3 IEAHca 4. The government should not bear the loss and damage resulting from the cancellation of the TCCs as the concerned government agencies were not aware of any fraud and misrepresentations committed by the transferors when it procured the TCCs including its fraudulent transfers thereof. Hence, petitioner asseverates that respondent should be liable to pay the tax and should be the one to go after its transferors; 4 5. Respondent was not denied due process of law as the procedures laid down in Revenue Regulation No. 12-99 is not applicable. The Collection Letter is not an assessment for deficiency excise tax but a demand for payment of unpaid excise tax liabilities. Further, respondent was given the opportunity to dispute the Collection Letter before the Warrant of Distraint and/or Levy was issued to enforce the collection of unpaid tax liabilities; 5 6. The period to assess and collect respondent's unpaid excise taxes has not prescribed as the instant controversy involves false return and the applicable provisions are Sections 130(A)(2) and 222 of the NIRC; 6 7. Respondent is liable to pay surcharges and interests pursuant to Sections 248 and 249 of the NIRC for its failure to pay the amount of excise taxes due on or before the date prescribed by law. 7 On its part, respondent proffers the counter-arguments in its Comment/Opposition, as follows: 1. The Motion for Reconsideration should be expunged from the Honorable Court's records for being pro forma considering that it merely rehashes and restates the baseless arguments raised by petitioner CIR in its pleadings, which the Honorable Court already passed upon and rejected, and thus, presents no cogent reason for the reversal of the Decision dated 21 February 2011; 2. The Honorable Court correctly ruled that the issues in the instant case are not novel and that it was proper for the Court of Tax Appeals 2nd Division to have adhered to the case of Pilipinas Shell Petroleum Corporation vs. Commissioner of Internal Revenue, 541 SCRA 316 (2007) under the Principle of Stare Decisis ; 3. Respondent is an innocent purchaser for value and petitioner utterly failed to prove any fraud on the part of respondent; 4. Assuming arguendo that fraud was present in the issuance of the original TCCs, such fraud cannot prejudice respondent PSPC, an innocent purchaser for value; 5. Petitioner and the Department of Finance ("DOF")/One-Stop-Shop Center Inter-Agency Tax Credit and Duty Drawback Center ("Center") are estopped from invalidating the transfer and utilization of the TCCs and collecting anew the excise tax from respondent; 6. Petitioner's authority to assess and collect the excise taxes has already prescribed; cTECHI 7. The issuance of the Collection Letters and the Warrant constitutes violations of respondent's right to due process of law. a. Even assuming arguendo that the Collection Letters may be deemed as assessments, they fail to comply with the requirements of Section 228 of the Tax Code. b. The Collection Letters even fail to comply with the requirements of Revenue Regulations No. 12-99. 8. The TCCs and related TDMs having already been utilized, are functus officio and, thus, can no longer be cancelled; 9. Petitioner cannot validly impose surcharge and interest on the allegedly deficient taxes. 8 Petitioner's motion is bereft of merit. A careful review of the Motion for Reconsideration reveals that the grounds relied upon by petitioner are but a mere rehash or reiteration of the arguments raised in her Petition for Review, which the Court En Banc had sufficiently passed upon and adequately discussed in the assailed Decision dated February 22, 2011. The main thrust of petitioner's arguments lies on this Court's application of the doctrines laid down by the Supreme Court in Pilipinas Shell Petroleum Corporation vs. Commissioner of Internal Revenue 9 (the " Shell Case ") in dismissing the instant Petition for Review based on the Principle of Stare Decisis . Petitioner wants this Court to deviate from the Principle of Stare Decisis and to set aside the pronouncement earlier made in the assailed Decision. As we have already discussed in the assailed Decision, the Shell Case is binding and applicable to the instant case following the doctrine of stare decisis et non quieta movere which means "to adhere to precedents and not to unsettle things which are established." 10 Under the doctrine of stare decisis, when the Supreme Court has once laid down a principle of law as applicable to a certain state of facts, it will adhere to that principle, and apply it to all future cases, where facts are substantially the same; regardless of whether the parties and property are the same. 11 It is based upon the legal principle or rule involved and not upon the judgment which results therefrom. 12 More importantly, the doctrine of stare decisis is one of policy grounded on the necessity for securing certainty and stability of judicial decisions, thus: Time and again, the court has held that it is a very desirable and necessary judicial practice that when a court has laid down a principle of law as applicable to a certain state of facts, it will adhere to that principle and apply it to all future cases in which the facts are substantially the same. Stare decisis et non quieta movere. Stand by the decisions and disturb not what is settled. Stare decisis simply means that for the sake of certainty, a conclusion reached in one case should be applied to those that follow if the facts are substantially the same, even though the parties may be different. It proceeds from the first principle of justice that, absent any powerful countervailing considerations, like cases ought to be decided alike. Thus, where the same questions relating to the same event have been put forward by the parties similarly situated as in a previous case litigated and decided by a competent court, the rule of stare decisis is a bar to any attempt to relitigate the same issue. 13 STcHEI In the instant case, it bears stressing that the legal rights and relations of the parties, the facts, the applicable laws, the causes of action, and the issues are exactly the same as those in the Shell Case , which was decided with finality by the Supreme Court. 14 Therefore, as the issue has been settled, it is the Court's duty to apply the ruling of the Supreme Court in the Shell Case based on the well-established principle of stare decisis . Significantly, based on the doctrine of stare decisis , the Decision of the Supreme Court in the Shell Case was similarly applied in a recent case entitled: Petron Corporation v. Commissioner of Internal Revenue. 15 Evidently, this is in consonance with the well-entrenched rule that the Supreme Court, by tradition and in our system of judicial administration, has the last word on what the law is. 16 It is the final arbiter of any justiciable controversy. 17 There is only one Supreme Court from whose decisions all other courts should take their bearings. 18 In view of the foregoing, we see no cogent reason to compel a modification or reversal of the said Decision. WHEREFORE , premises considered, petitioner's Motion for Reconsideration is hereby DENIED for lack of merit. SO ORDERED. (SGD.) CIELITO N. MINDARO-GRULLA Associate Justice Ernesto D. Acosta, P.J., Juanito C. Castaeda, Jr., Erlinda P. Uy, Caesar A. Casanova, Olga Palanca-Enriquez and Esperanza R. Fabon-Victorino, JJ., concur. Lovell R. Bautista and Amelia R. Cotangco-Manalastas, JJ., are on leave. Footnotes 1. En Banc Docket, pp. 982-984. 2. Id. at 984-991. 3. Id. at 991-995. 4. Id. at 995-997. 5. Id. at 997-999. 6. Id. at 999-1003. 7. Id. at 1003-1004. 8. Id. at 1025-1026. 9. G.R. No. 172598, December 21, 2007. 10. Lazatin, et al. v. Hon. Desierto, et al. , G.R. No. 147097, June 5, 2009. 11. Department of Transportation and Communication v. Cruz, G.R. No. 178256, July 23, 2008. 12. Id. 13. Supra note 10, citing Chinese Young Men's Christian Association of the Philippine Islands v. Remington Steel Corporation, G.R. No. 159422, March 28, 2008, 550 SCRA 180. 14. En Banc Docket, p. 946. 15. G.R. No. 180385, July 28, 2010. 16. Church Assistance Program, Inc. v. Hon. Sibulo, et al. , G.R. No. 76552, March 21, 1989. 17. Id. 18. Id.