Fortune Tobacco Corp. v. Commissioner of Internal Revenue

THIRD DIVISION

[G.R. No. 192576. February 25, 2013.]

FORTUNE TOBACCO CORPORATION, petitioner, vs. COMMISSIONER OF INTERNAL REVENUE, respondent.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, Third Division, issued a Resolution dated February 25, 2013, which reads as follows:

"G.R. No. 192576 (Fortune Tobacco Corporation v. Commissioner of Internal Revenue). — This resolves the Petition for Review on Certiorari under Rule 45 of the Rules of Court, which seeks the review of the Court of Tax Appeals En Banc Decision 1 dated March 12, 2010 and Resolution 2 dated June 11, 2010.

On December 16, 1999, the Secretary of Finance issued Revenue Regulations (RR) No. 17-99 for the purpose of implementing the provision for a 12% increase of excise tax on, among others, cigars and cigarettes packed by machines by January 1, 2000.

Resultantly, Fortune Tobacco Corporation (FTC) paid excise taxes on all cigarettes manufactured and removed from its place of production for the following period:

PERIOD	PAYMENT
January 1, 2000 to January 31, 2000	P585,705,250.00
February 1, 2000 to December 31, 2001	P19,366,783,535.00
January 1, 2002 to December 31, 2002	P11,359,578,560.00

FTC subsequently sought administrative redress for refund before the Commissioner of Internal Revenue (CIR) on the following dates: AaEDcS

PERIOD	ADMINISTRATIVE	AMOUNT
	FILING OF CLAIM	CLAIMED
January 1, 2000 to	February 07, 2000	P35,651,410.00
January 31, 2000
February 1, 2000 to	Various claims filed	P644,735,615.00
December 31, 2001	from March 21, 2000-
	January 28, 2002
January 1, 2002 to	February 03, 2003	P355,385,920.00
December 31, 2002

Due to the CIR's inaction on its refund claim, FTC filed Petitions for Review docketed as CTA Case Nos. 6365 and 6383 with the Court of Tax Appeals (CTA), praying for the refund of P35,651,410.00 and P644,735,615.00 representing overpaid excise taxes for January 1, 2000 to January 31, 2000 and February 1, 2000 to December 31, 2001, respectively, with the common issue of whether or not the last paragraph of Section 1 of RR No. 17-66 is in conformity with Section 145 of the 1997 Tax Code.

On October 21, 2002, the CTA granted the claim for refund of FTC in CTA Case Nos. 6365 and 6383.

On March 12, 2003, FTC commenced another petition, premised on the same issue raised in CTA Case Nos. 6365 and 6383, docketed as CTA Case No. 6612, claiming for refund in the amount of P355,385,920.00 for the period January 1, 2002 to December 31, 2002.

Upon motion for reconsideration filed by the CIR, the CTA denied FTC's claim pertaining to CTA Case Nos. 6365 and 6383. FTC filed consolidated Motions for Reconsideration in CTA Case Nos. 6365 and 6383. In response, the CTA reversed its earlier resolution and reinstated its former decision granting FTC's claim for refund on November 4, 2003.

On December 10, 2003, the CIR filed before the Court of Appeals (CA) a Petition for Review docketed as CA-G.R. SP No. 80675 questioning the Resolution dated November 4, 2003, pertaining to the consolidated case of CTA Case Nos. 6365 and 6383.

Meanwhile, on December 4, 2003, in CTA Case No. 6612, the CTA ruled on the invalidity of RR No. 17-99, thus, granting FTC's claim for refund in the amount of P355,385,920.00. CHTAIc

On April 28, 2004, the CIR filed a Motion for Reconsideration, but it was denied. Thus, the CIR filed an appeal before the CA which was docketed as CA-G.R. SP No. 83165.

In resolving the consolidated Petitions for Review docketed as CA-G.R. SP Nos. 80675 and 83165 filed by the CIR, the CA rendered a Decision dated September 28, 2004 affirming FTC's refund claim of erroneously paid excise taxes in the amounts of P680,387,025.00 and P355,385,920.00, respectively. The Motion for Reconsideration filed by the CIR was likewise denied by the CA in a Resolution dated March 1, 2005.

Unfazed, the CIR elevated the case to this Court docketed as G.R. Nos. 167274-75 on May 4, 2005.

On July 21, 2008, this Court rendered a Decision affirming the grant of FTC's claim for refund. It declared as invalid RR No. 17-99 and treated it as an "unauthorized administrative legislation."

The CIR filed a Motion for Reconsideration against said decision, but to no avail.

Considering that the Court's decision has already become final and executory, FTC moved for the execution of the Court's decision dated July 21, 2008 which, in effect, affirmed CA-G.R. SP No. 80675, pertaining to CTA Case Nos. 6365 and 6383, and CA-G.R. SP No. 83165, pertaining to CTA Case No. 6612.

However, on April 14, 2009, the CTA First Division issued a Writ of Execution pertaining only to the amount of P680,387,025.00 representing FTC's erroneously paid excise taxes in relation to CTA Case Nos. 6365 and 6383.

As a result, FTC moved for the issuance of an additional Writ of Execution in CA-G.R. SP No. 83165, pertaining to CTA Case No. 6612. However, the same was denied by the CTA First Division on the ground that the dispositive portion of G.R. Nos. 167274-75 only pertained to CA-G.R. SP No. 80675. FTC moved for reconsideration, but the same was denied in a Resolution dated August 10, 2009.

FTC then filed a Petition for Review before the CTA En Banc. In a Decision dated March 12, 2010, the CTA En Banc dismissed FTC's petition on the ground that a writ of execution may not vary the terms of the judgment it seeks to enforce nor may it go beyond the terms of the judgment sought to be executed. caHCSD

Undeterred, FTC filed a Motion for Reconsideration against said Decision, which was denied by the CTA En Banc in a Resolution dated June 11, 2010.

Hence, the present petition.

In the case at bar, the Court is faced with a rare situation where after referring to the body of the decision, there appears an inadvertent omission in the fallo of the Decision, which warrants clarification from the Court in the main case.

Verily, deeply ingrained in our jurisprudence is the principle that when a judgment attains finality, it becomes immutable and unalterable and any amendment or alteration, which substantially affects a final and executory judgment, is null and void for lack of jurisdiction, including the entire proceedings held for that purpose. 3 As such, it may no longer be modified in any respect even if the modification is meant to correct erroneous conclusions of fact or law and whether it will be made by the court that rendered it or by the highest court of the land. 4

However, it is also an established doctrine that when the dispositive portion of a judgment, which has become final and executory, contains a clerical error or an ambiguity arising from an inadvertent omission, such error or ambiguity may be clarified by reference to the body of the decision itself. 5

In fact, in Castelo v. Court of Appeals, 6 this Court, citing Reinsurance Company of the Orient, Inc. v. Court of Appeals, held that even a judgment which has become final and executory may be clarified under certain circumstances. The dispositive portion of the judgment may, for instance, contain an error clearly clerical in nature or an ambiguity arising from inadvertent omission, which error may be rectified or ambiguity clarified and the omission supplied by reference primarily to the body of the decision itself. 7

Again, in Insular Life Assurance Company, Ltd. v. Toyota Bel Air, Inc., 8 this Court held that to grasp and delve into the true intent and meaning of a decision, no specific portion thereof should be resorted to — the decision must be considered in its entirety. It further ruled that the Court may resort to pleadings of the parties, its findings of facts and conclusions of law as expressed in the body of the decision to clarify any ambiguities caused by any inadvertent omission or mistake in the dispositive portion. 9

In the present case, it is clear that no mention or even an allusion to CA-G.R. SP No. 83165 was made by the Court in the fallo of its decision in G.R. Nos. 167274-75. It explicitly states —

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals in CA-G.R. SP No. 80675, dated 28 September 2004, and its Resolution, dated 1 March 2005, are AFFIRMED. No pronouncement as to costs. 10

However, a careful review of the Court's decision in G.R. Nos. 167274-75 reveals that the CIR appealed both CA-G.R. SP No. 80675 and CA-G.R. SP No. 83165 before this Court. STcHEI

In fact, in the main decision's statement of facts, this Court made specific mention of CA-G.R. SP No. 83165 as one of the cases being appealed before the Court, viz.:

CA G.R. SP No. 83165

The petition contains essentially similar facts, except that the said case questions the CTA's December 4, 2003 decision in CTA Case No. 6612 granting respondent's claim for refund of the amount of P355,385,920.00 representing erroneously or illegally collected specific taxes covering the period January 1, 2002 to December 31, 2002, as well as its March 17, 2004 Resolution denying a consideration thereof.

xxx xxx xxx

In both CTA Case Nos. 6365 and 6383 and CTA No. 6612, the Court of Tax Appeals reduced the issues to be resolved into two as stipulated by the parties, to wit: (1) Whether or not the last paragraph of Section 1 of Revenue Regulation[s] [No.] 17-99 is in accordance with the pertinent provisions of Republic Act [No.] 8240, now incorporated in Section 145 of the Tax Code of 1997; and (2) Whether or not petitioner is entitled to a refund of P35,651,410.00 as alleged overpaid excise tax for the month of January 2000. 11

Plainly, an apparent conflict exists between the dispositive portion and the body of the main decision. However, the present petition does not allow us to clarify the main decision. Instead, the petition to clarify the dispositive portion in G.R. Nos. 167274-75 should be acted upon in the main case.

Considering, that the issue here is the issuance of a writ of execution of the Judgment of the Court and therefore a continuation of the proceedings of the main case, in the interest of orderly proceedings and justice, this present petition should be consolidated with G.R. No. 167274-75, to be assigned to any of the members of the Division who participated in the rendition of the decision. In this particular case, there is only one remaining member of the original Division and in accordance with the Internal Rules, 12 the case should now be assigned to such remaining member 13 to be participated in by the four other members of the Division where the ponente is presently assigned.

WHEREFORE, let the instant petition be consolidated with G.R. No. 167274-75. TcDIEH

SO ORDERED."

Very truly yours,

(SGD.) LUCITA ABJELINA SORIANODivision Clerk of Court

 

Footnotes

1.Penned by Associate Justice Juanito C. Castañeda, Jr., with Associate Justices Ernesto D. Acosta, Lovell R. Bautista, Erlinda P. Uy, Caesar A. Casanova, and Olga Palanca-Enriquez, concurring; rollo, pp. 39-55.

2.Id. at 56-60.

3.Equatorial Realty Development, Inc. v. Mayfair Theater, Inc., G.R. No. 136221, May 12, 2000, 332 SCRA 139, 148; 387 Phil. 885, 895 (2000).

4.Republic v. Tango, G.R. No. 161062, July 31, 2009, 594 SCRA 560, 568.

5.Philippine Health Insurance Corporation v. Court of Appeals, G.R. No. 176276, November 28, 2008, 572 SCRA 720, 725-726. (Emphasis ours).

6.G.R. No. 96372, May 22, 1995, 244 SCRA 180; 314 Phil. 1 (1995).

7.Id. at 186; at 15. (Citation omitted).

8.G.R. No. 137884, March 28, 2008, 550 SCRA 70.

9.Id. at 86.

10.Commissioner of Internal Revenue v. Fortune Tobacco Corporation, G.R. Nos. 167274-75, July 21, 2008, 559 SCRA 160, 185.

11.Id. at 170.

12.Internal Rules of the Supreme Court (as Amended in the Resolutions dated July 6, 2010 and August 3, 2010).

13.Sec. 7. Resolutions of motions for reconsideration or clarification of decision or signed resolutions and all other motions and incident subsequently filed; creation of a Special Division. —

xxx xxx xxx.

    If the ponente has retired, is no longer a Member of the Court, is disqualified, or has inhibited himself of herself from acting on the motion for reconsideration or clarification, he or she shall be replaced through raffle by a new ponente who shall be chosen among the new Members of the Division who participated in the rendition of the decision or signed resolution and who concurred therein. If any one Member of the Court who participated and concurred in the rendition of the decision or signed resolution remains, he or she shall be designated as the new ponente.