ATLAS CONSOLIDATED MINING AND DEVELOPMENT CORP. vs.

COMMISSIONER OF INTERNAL REVENUE

[G.R. No. 159490, February 18, 2008] FACTS: Atlas is a corporation duly organized and existing under Philippine laws engaged in the production of copper concentrates for export. Atlas applied with the BIR for the issuance of a tax credit certificate or refund under Section 106(b) of the Tax Code. Atlas then filed a petition for review with the CTA on February 22, 1995 to prevent the running of the prescriptive period under Sec. 230 of the Tax Code. On October 13, 1997, the CTA rendered a Decision denying Atlas claim for tax credit or refund. Respondent CIR filed his Answer asserting that Atlas has the burden of proving erroneous or illegal payment of the tax being claimed for refund, as claims for refund are strictly construed against the taxpayer In denying Atlas claim for tax credit or refund, the CTA held that Atlas failed to present sufficient evidence to warrant the grant of tax credit or refund for the alleged input taxes paid by Atlas. Relying on Revenue Regulation No. (RR) 3-88 which was issued to implement the then VAT law and list the documents to be submitted in actions for refunds or tax credits of input taxes in export sales, it found that the documents submitted by Atlas did not comply with said regulation. It pointed out that Atlas failed to submit photocopies of export documents, invoices, or receipts evidencing the sale of goods and others. Atlas timely filed its Motion for Reconsideration of the above decision contending that it relied on Sec. 106 of the Tax Code which merely required proof that the foreign exchange proceeds has been accounted for in accordance with the regulations of the Central Bank of the Philippines. Consequently, Atlas asserted that the documents it presented, coupled with the testimony of its Accounting and Finance Manager sufficiently proved its case. It argued that RR 3-88 was issued for claims for refund of input VAT to be processed by the BIR, that is, for administrative claims, and not for judicial claims as in the present case. Anyhow, Atlas prayed for a re-trial, even as it admitted that it has committed a mistake or excusable negligence when the CTA ruled that RR 3-88 should be the one applied for Atlas to submit the basis required under the regulation. On Atlas appeal, the CA denied and dismissed Atlas petition on the ground of insufficiency of evidence to support Atlas action for tax credit or refund. ISSUE: Whether Atlas has sufficiently proven entitlement to a tax credit or refund. HELD: No.The Rules of Court, which is suppletory in quasi-judicial proceedings, particularly Sec. 349 of Rule 132, Revised Rules on Evidence, is clear that no evidence which has not been formally offered shall be considered. Thus, where the pertinent invoices or receipts purportedly evidencing the VAT paid by Atlas were not submitted, the courts a quo evidently could not determine the veracity of the input VAT Atlas has paid.

Moreover, when Atlas likewise failed to submit pertinent export documents to prove actual export sales with due certification from accredited banks on the export proceeds in foreign currency with the corresponding conversion rate into Philippine currency, the courts a quo likewise could not determine the veracity of the export sales as indicated in Atlas amended VAT return. It must be noted that the most competent evidence must be adduced and presented to prove the allegations in a complaint, petition, or protest before a judicial court. And where the best evidence cannot be submitted, secondary evidence may be presented. In the instant case, the pertinent documents which are the best pieces of evidence were not presented. Cruz Arevalo vs. Layosa Facts: An administrative complaint was filed against Judge Lydia Layosa by Josefina Cruz-Arevalo.

Cruz-Arevalo alleged that Judge Layosa was with manifest bias and partiality and ignorance of the law relative to Civil Case No. Q-03-50379: Josefina Cruz-Arevalo and Conrado Cruz v Home Development Mutual Fund and Federico S. Quimbo.

In the said civil case, Cruz-Arevalo was supposed to represent Conrado Cruz as the latter was to undergo medical treatment in the US.

Conrado Cruz executed an authorization letter and a special power of attorney (SPA), which Cruz-Arevalo presented during pre-trial.

Judge Layosa ruled that the authorization letter was defective because it was not duly notarized and authenticated. She likewise found the SPA defective because it pertains to the authority of Cruz-Arevalo to receive Conrado Cruzs contribution to the PAG-IBIG Provident Fund and not to represent him in the pre-trial of Case No. Q-03-50379.

Finding the absence of Conrado Cruz during pre-trial inexcusable and without proper representation in his behalf, i.e. nonsuited, Judge Layosa dismissed the civil case.

Complainant Cruz-Arevalo also assailed the order of Judge Layosa to exclude several paragraphs in the affidavit of Atty. Cecilio Y. Arevalo, Jr., which was adopted as the direct testimony of her witness, without giving her counsel a chance to comment on the objections raised by the defense.

Cruz-Arevalo further accused Judge Layosa of inaction, indifference, or collusion by silence with the defendants in the civil case for not acting on her Motions for Writs of Subpoena Duces Tecum and Ad Testificandum.

Issue: Is Judge Layosa administratively liable? NO. Held: Mere suspicion that a judge was partial is not enough. The acts of a judge in his/her judicial capacity are not subject to disciplinary action even though erroneous in the absence of fraud, dishonesty, or corruption, which complainant CruzArevalo failed to prove in this case. As regards the exclusion of certain paragraphs in the affidavit of complainants witness, the rule is that evidence formally offered by a party may be admitted or excluded by the court. If a partys offered documentary or object evidence is excluded, he may move or request that it be attached to form part of the record of the case. If the excluded evidence is oral, he may state for the record the name and personal circumstances of the witness and the substance of the proposed testimony. These procedures are known as offer of proof or tender of excluded evidence and are made for purposes of appeal. If an adverse judgement is eventually rendered against the offeror, he may in his appeal assign as error the rejection of the excluded evidence. The appellate court will better understand and appreciate the assignment of error if the evidence involved is included in the record of the case.

As regards the Motion for Writs of Subpoena Duces Tecum and Ad Testificandum, Judge Layosa was correct to not have entertained the same as the legal fees corresponding thereto were not paid. (Judge Layosa eventually issued the subpoena prayed for upon payment of the required legal fees.)

Note:

Judge Layosa eventually inhibited herself from the civil case, if only to assuage the fears of Cruz-Arevalo of not obtaining a fair and impartial trial.