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REGIONALTRIALCOURT
NATIONALCAPITALJI'DICIAL REGION
BRANCH146. MAKATI CITY
MEMORANDUM
6s-2012
NO.
FIRST
E.BANK
TOWER
AS
CORPOMTION,
CONDQMINIUM
BY
ITS
REPRESENTED
HEREIN
j,
CHAIRMAN/Pf,.ESIDENT ENGR.
VICTORIO.{. AMANTE,
Petltloner,
.vrBusBUREAUOF INTERNALREVENUE
(BIR) , AS HEREINREPRESENTED
KIM S.
BY TTS COMMISSIONER
REVENUE
and
IACINTO-HENARES
DISTRICT OFFICER RICARDO B.
ESPERmJ,
',.|
Respondents.
X----------'.'
-'-------X
by petltlonr
the valldlty of
{eclarlngthe rlghts
ier, lncludlng the
Bureau
rsepondent
amounb of
nulngJudlclal
way of conUnulng
TheJudldrldetcrmlnatlon
sf
Judldrl conslgnrtlon.
the valldityof RMCNo. 65-2012as wdl as the dcdareUonof rlghts
and dutlegthere und6r on thc part of pdltlonr, F ncca$ry md
propr under the drcumstrnces, for suctr detsrmlnatlon and
dechmUonwould termlnate t}tc uncartrlnty or controversywhlch
grve rlseto the lnstantectlon.
ln lts Comrnnt,thc Buroru of Internrl R.venuo (BIR),
throughthe Offlceof th. Solldtor Generalavcrrcdtiat thc rerncdy
of dcclrratoryrellrf, ls no longerproptr rlrrcotha ercrllcd R.y.nue
Clrculrr already took effcct la* Octobr 31, 2072. Reepondcnt
allogcdthrt the hrury whlch pc00onersceksto avoE pryrnent of
lncomc tax and value added tax lmposod by BIR Rorcnue
lrlcrnorandum
Clrcular65-2012(RMCNo -65-2012)on thr collectlon
of assocladonduee, Hownver,by petldoneis own allegrtlonc,tJt
acsalldlcsuancealrcrdy took cllect on October31, 2012. It hm
alreadypald, throughJudlclalconslgnmert,the valuc addedtax
lmposedby RMCNo.65-2012and gavcrlseto the InJurysoughtto
be avoldedby the peUUon.Hnce,dedaratoryrellaf ls no longer
Propr.
Respondents
BIR throughthdr own LlUgrilonDlvldonalso
fllad a separatoCommenton thc petltlon.Repondentsallcgodthat
thc petltlon lacks proper verlllcauon slnce thcn ls lnsufidffit
verlflcaUon,
the peUUon
ehouldbe dccmedas an undgnedpleadlng.
Respondentsalso averrcd that the peUUonrhould bc dlrrnlsecd
applylngth6 doctrh of prlmaryJurlsdlcuon,
Respond.nts
malnbln
that courtscannotand wlll not ddcrmlner controvemy
Involvlnga
questlonwhlchls wlthln theJurlsdlcflonof the rdndnlitreUvtrlbunal
prlorto the rasolutlon
of thrt que3uonby thr ldmlnlstruUve
trlbunal,
where the quastlondernandsthe excrclscof sound admlnlstratlvc
dlscreUonrsqulrlngthe spclrl knowledge,or;rdrlcnccrnd ssrvlccs
of the admlnlstratfvctrlbunal to determlnetechnlcaland Intrlcate
mattsrs of fact. It ls notLvorthy
that hcreln peutloncrl edmltedly
addrcssedthe mattcr to rspondent Commtssloncrof Intemal
R.venue (GR) wlthout wrltlng for rn approprht ruply from the
latter. In fact, eeveralcondornfnlurn
corporatlonsrdcrrd th tssrJGs
prassedby petltlonersto th Ltw Dlvlslonof thc Bureauof Intcmal
Revenuefor further darlflca$on.UlUmatdy, tt would be the
Secretaryof the Departrnentof Flnancethrt wlll exerdse prlmery
Jurlsdldlonover the lesuesralsd In the lnstantpcdUon.The lssue
requlr$ the technlcal knowledgc and xprlncc of theee
admlnlstratlve agcncles concerned.Clearly, petlUoner has not
exhaustcdall admlnlgtrrtlveremedleeprlorto lts r$ort to thls Court.
further rrgued ln lB Commentthat Declarutory
Respondent
Rellefls not avallablcwhenthere le breachof etrtute bcforel?llngof
tctlon. The complalntfor dcclrratoryrellsf wlll not prosperlf filed
aftsr a contract,statute or rlght has been breachedor vlolated.In
the presentcascsuchls prcclsdythe Cturtlon rrlslng from the frcte
aflegedIn the petltlon for declaratoryrClf. Wlthholdlngof taxss
lrwfullydue to thc aovernmcntls r blatantbreachof RMC65-2012.
of the parUes
After submlsslonof the rspectlveMemorundum
dellneatlngthelr rsspcctlveposltlonsand arguments,thls Courtwlll
ow regolveth peUUon.
Stappdof non Qtsnutlsthe lssusIn thls cts botleddown
to the followlng:
Rellefls props;
1. Whethera Pqtltlonfor Declaratory
Clrcular65-2012ls valld'
Flernorundum
2. WhetherRevenue
Rul63 Sectlon1 (1) of the Rulesof Courtprovldos:
Secflrcn1 ' who may llts' ' Any personlnbrestad
undr,r a deed, wlll, @ntra,ct or otltsf wrtttan
ln*rument or whassrtgh|sarc afiE+tcd DYe statutcr
executlveorder or rqulatbn, ordinane or anf other
governmentat rcgulatlon may bfore brcach or
v'ntatbn thererr|,brlng an actlon ln the apgoprlate
exryt
lbreCIn
(C)
l0
t0 ,t
ll
t2
are not Includedas part of lts Incomeand thcrcforeof the VAT' The
advent of the Mamorandum Clrcular 65-2012 lseud by the
commlssionerchangesthe trx lllblllty of pestlonerln the snsathtt
It ls now subjectto tax. It createda new tax burdenupon petftloner.
pegloner thln could not be faulted to conslgnfudlclally as they
clalm, the vat amount pendtng resolutlon of the petltlon for
declsrEtory rellef hereln flled. Raspondent BlR Commissloner
shoutdhave accordedpetluonerth oPportunityto be h'rd, whlch
was the bone of contntlonof th lctter sent to the Honorcble
Commlsdonerwhlchwas not actedupon'
The RevenueMemorsndumClrcular dld not only clerlfy an
exlsunglaw,butchangesltshportandlntsrpretatlonthatlnso
th rlEhtof the petltloneras . tax paYr'
dolng lt preJudlces
Further, the above clted case of Comrnl$loner of Customsand
th8 Dlstrlct collector of the Port of sublc ys. Hypernlx Fecds
G.R. No. 179579,dated February1, 201a, 8.Gaseof
Corporatlon,
stmitar tmpdrt also glve lrnportanccto the requtremsntof notlca and
hearlng and pub[Catlon before a regulatlon could be glYen an
lmprimatur of valldity, the guprerneCourt ddarEdl
" ConsldcrlnE that ths queffinad
woud aM
regulttlon
l3
t4
In vlew of the foregolng,the DeclaratoryReliefls
WHEREFORE,
glven due course.The lssuanceof RevenueMemorandumClrcularNo.
OS-ZOfZb herebydeclaredto havebeen invalldlylssued.
SOORDERED.
MakatlClty, Septmber5, 2013.
Cc:
Atty. Jo6D. Melgarejo
Counselfor mitionr
BZLA2 LapujapuSt.,
NEwCaoitolEstates I
Ave., QuezonCitY
Commonweahh
Atty. BmardimPaulSomera,Jr'
BIR
ForRespondenrt
Officeof thE.SolicitorGneral
134 AmorsoloSt., LegopiVillaga
Mak ti City
LitigationDivision
Burgaud IntArnalRevEnue
Rm.703, BIRBldg.,
Diliman,QuezonCttY
Mcv/llrct ebank vs. blr'retolution