EN BANC
[G.R. No. 80046. April 18, 1988.]
ZAPATA MARINE SERVICES, LTD., S.A., petitioner, vs. COURT OF TAX APPEALS, ET AL., respondents.
RESOLUTION
Gentlemen:
Quoted hereunder, for your information, is a resolution of the Third Division of this Court dated April 18, 1988:
Petition for review of the decision of the respondent court in a claim for tax refund.
Petitioner is a resident foreign corporation engaged in the business of furnishing by charter or otherwise specialized offshore service and supply vessels to offshore oil drilling rigs as an international carrier.
Sometime in 1979, petitioner entered into contracts with the Amoco Philippine Petroleum Company (AMOCO), Citco Philippine Petroleum Corporation (CITCO) and Philippine Cities Services, Inc. (PCSI), duly qualified service contractors under P.D. No. 87, otherwise known as the "Oil Exploration and Development Act of 1972."
From the payment for services rendered by petitioner, amounts totaling P706,186.88, equivalent to 8% of gross income, were withheld and remitted to the Bureau of Internal Revenue.
On September 4, 1981, petitioner filed with respondent Commissioner a claim for refund of P308,956.76.
Petitioner contended that as an international carrier, the amounts withheld should have been 4 1/2% only ( 2 1/2% income tax and 2% carrier's tax), hence, there was an overpayment of P308,956.76.
On October 22, 1931, petitioner filed a petition for review with the respondent court as respondent commissioner neither granted nor acted upon the claim for refund.
In its decision dated March 30, 1987, the respondent court dismissed the petition, holding that petitioner's business is incidental to or in the nature of engaging in petroleum operations as defined under Sec. 3, par. (d) of P.D. No. 87 and that petitioner is a sub-contractor within the contemplation of P.D. No. 1354, hence, subject to the 8% final tax.
Petitioner moved for a reconsideration, but was denied in the Resolution dated September 7, 1987 of the respondent Court.
Hence, this petition.
Petitioner argues that international carriage is excluded from the parameter of petroleum operations; that petitioner as an international carrier is already subject to the 2 1/2% income tax on gross Philippine billings; that then Comm. Efren I. Plana has ruled that petitioner is an international carrier, hence, subject only to the 2 1/2% income tax; and, that the revocation of said ruling may not be applied retroactively because it will cause prejudice to petitioner.
Considering the services rendered by petitioner to the service contractors engaged in petroleum operations pursuant to its contract with them, to wit:
1. Carrying supplies to offshore platforms and drilling rigs. These supplies only consist of those items which are necessary to sustain an offshore petroleum exploration or production operation. Supplies include, but are not limited to: food, water, fuel, bulk cement and drilling fluids, drilling and logging tools, tubulars and machinery. The above supplies are always provided by the charterer of the supply ship.
2. Carrying personnel to and from offshore platforms and drilling rigs. These personnel are operating personnel or other drilling contractor's personnel.
3. Possibly, positioning and assisting the offshore self-propelled drillship in its movements. This includes handling the rigs mooring system consisting of chains, anchors, wires and buoys.
and the definition of "petroleum operations" under Sec. 3(d) of P.D. 87, to wit:
(d) 'Petroleum operations' means searching for and obtaining petroleum within the Philippines through drilling and pressure or suction or the like, and all other operations incidental thereto. It includes the transportation, storage, handling and sale (whether for export or for domestic consumption) of petroleum so obtained but does not include any: (1)transportation of petroleum outside the Philippines; (2) processing or refining at a refinery; or (3)any transactions in the products so refined.
petitioner is a sub-contractor within the contemplation of Sec. 1 of P.D. 354, which states:
Section 1. Tax on sub-contractors. — Every sub-contractor, whether domestic or foreign, entering into a contract with service contractor engaged in petroleum operations in the Philippines shall be liable to a final tax equivalent to eight percent (8%) of its gross income derived from such contract, such tax to be in lieu of any and all taxes, whether national or local: Provided, however, That any income received from all other sources within and without the Philippines in case of domestic sub-contractors and within the Philippines, in case of foreign sub-contractors shall be subject to the regular income tax imposed under the National Internal Revenue Code. The term 'gross income' means all income earned or received as a result of the contract entered into by the sub-contractor with a service contractor engaged in petroleum operations in the Philippines under Presidential Decree No. 87. cdt
hence, aside from being subject to the regular tax on income from all other sources within the Philippines, petitioner is also subject to the final tax equivalent to 8% of its gross income derived from its contract with the service contractors engaged in petroleum operations.
Considering also that the construction of a statute by those administering it is not binding on their successors if thereafter, as in this case, the latter become satisfied that a different construction should be given, presumably because the facts subsequently gathered by them are materially different from the facts on which the previous construction is based, the ruling of the then Comm. Plana adverted to by petitioner may be revoked by respondent Commissioner and the revocation may be applied retroactively without causing prejudice to petitioner since petitioner acquired no vested right from said ruling as it arose from a wrong interpretation of the law.
ACCORDINGLY, the Court Resolved to Dismiss the petition for lack of merit.
Very truly yours,
JULIETA Y. CARREONClerk of CourtThird Division