CASE DIGEST: Commissioner of Internal Revenue vs. Court of Tax Appeals and CBK Power Company Limited

 

COMMISSIONER OF INTERNAL REVENUE, petitioner, vs. COURT OF TAX APPEALS and CBK POWER COMPANY LIMITED, respondents

G.R. Nos. 203054-55. July 29, 2015.

 

FACTS:

Private respondent CBK Power Company Limited is a special purpose entity engaged in all aspects of (1) design, financing, construction, testing, commissioning, operation, maintenance, management, and ownership of Kalayaan II pumped storage hydroelectric power plant, the new Caliraya Spillway in Laguna; and (2) the rehabilitation, expansion, commissioning, operation, maintenance and management of the Caliraya, Botocan, and Kalayaan I hydroelectric power plants and their related facilities in Laguna. Petitioner is the duly appointed Commissioner of Internal Revenue vested with authority to act as such, inter alia, the power to decide, approve and grant refunds or tax credit of erroneously or illegally collected internal revenue taxes as provided by law.

On March 30, 2011, private respondent filed with the CTA a judicial claim for the issuance of a tax credit certificate in the amount of P17,784,968.91, representing unutilized input taxes on its local purchases and importations of goods other than capital goods, local purchases of services, payment of services rendered by nonresidents, including unutilized amortized input taxes on capital goods exceeding one million for the period of January 1, 2009 to March 31, 2009, all attributable to zero-rated sales for the same period, pursuant to Section 112(A) of the 1997 Tax Code.

Earlier, on June 28, 2011, private respondent filed another judicial claim for the issuance of a tax credit certificate in the amount of P31,680,290.87, representing unutilized input taxes on its local purchases and importations of goods other than capital goods, local purchases of services, including unutilized amortized input taxes on capital goods exceeding one million for the period of April 1, 2009 to June 30, 2009, all attributable to the zero-rated sales for the same period.

Subsequently, private respondent filed a motion for consolidation.

On October 14, 2011, the CTA granted the motion for consolidation and set the pretrial conference on November 3, 2011. Atty. Mauricio failed to appear at the scheduled pretrial conference as he was on leave for health reasons from October to December 2011. The pretrial was reset to December 1, 2011. Petitioner’s counsel, Atty. Sandico, who was then assigned to handle the consolidated cases, filed his consolidated pretrial brief on November 15, 2011. However, on the December 1, 2011 pretrial conference, Atty. Sandico failed to appear, thus private respondent moved that petitioner be declared in default.

On January 6, 2012, petitioner filed a Motion to Lift Order of Default alleging that the failure to attend the pretrial conference on November 3, 2011 was due to confusion in office procedure in relation to the consolidation of the cases since the 2 cases were handled by different lawyer; that when the pretrial conference was reset to December 1, 2011, petitioner’s counsel, Atty. Sandico, had to attend the hearing of another case in the CTA’s First Division also at 9:00 a.m., hence, he unintentionally missed the pretrial conference of the consolidated cases. Private respondent as ordered to file its comment on the motion to lift order of default but failed to do so.

On April 19, 2012, the CTA issued the second assailed Resolution denying the motion to lift order of default.

Petitioner filed a motion for reconsideration on April 27, 2012. The CTA directed private respondent to file its Comment thereto but failed to do so.

In a Resolution dated June 13, 2012, the CTA denied the motion for reconsideration.

Petitioner files the instant petition for certiorari.

ISSUE:

WON the filing of a petition for certiorari under rule 65 is proper

RULING:

Indeed, the filing of a petition for review with the CTA En Banc from a decision, resolution, or order of a CTA Division is a remedy newly made available in proceedings before the CTA, necessarily adopted to conform to and address the changes in the CTA.

The amendments introduced by Republic Act No. 9282 to Republic Act No. 1125 elevated the rank of the CTA to a collegiate court, with the same rank as the Court of Appeals, and increased the number of its members to one Presiding Justice and five Associate Justices. The CTA is now allowed to sit En Banc or in two Divisions with each Division consisting of three Justices. Four Justices shall constitute a quorum for sessions En Banc, and the affirmative votes of four members of the Court En Banc are necessary for the rendition of a decision or resolution; while two Justices shall constitute a quorum for sessions of a Division and the affirmative votes of two members of the Division shall be necessary for the rendition of a decision or resolution.

Although the filing of a petition for review with the CTA En Banc from a decision, resolution, or order of the CTA Division, was newly made available to the CTA, such mode of appeal has long been available in Philippine courts of general jurisdiction. Hence, the Revised CTA Rules no longer elaborated on it but merely referred to existing rules of procedure on petitions for review and appeals.

According to Section 1, Rule 41 of the Revised Rules of Court, governing appeals from the Regional Trial Courts (RTCs) to the Court of Appeals, an appeal may be taken only from a judgment or final order that completely disposes of the case or of a matter therein when declared by the Rules to be appealable. Said provision, thus, explicitly states that no appeal may be taken from an interlocutory order.

It is, therefore, clear that the CTA En Banc has jurisdiction over final order or judgment but not over interlocutory orders issued by the CTA in division.

The CTA Order dated December 23, 2011 granting private respondent’s motion to declare petitioner as in default and allowing respondent to present its evidence ex parte, is an interlocutory order as it did not finally dispose of the case on the merits but will proceed for the reception of the former’s evidence to determine its entitlement to its judicial claim for tax credit certificates. Even the CTA’s subsequent orders denying petitioner’s motion to lift order of default and denying reconsideration thereof are all interlocutory orders since they pertain to the order of default.

Since the CTA Orders are merely interlocutory, no appeal can be taken therefrom. m. Section 1, Rule 41 of the 1997 Rules of Civil Procedure, as amended, which applies suppletorily to proceedings before the Court of Tax Appeals, provides:

Section 1. Subject of appeal.—An appeal may be taken from a judgment or final order that completely disposes of the case, or of a particular matter therein when declared by these Rules to be appealable.

No appeal may be taken from:

x x x x

(c) An interlocutory order

In all the above instances where the judgment or final order is not appealable, the aggrieved party may file an appropriate special civil action under Rule 65.

Hence, petitioner’s filing of the instant petition for certiorari assailing the interlocutory orders issued by the CTA is in conformity with the above quoted provision.