100 Maceda vs Macaraig

G.R. No. 88291. May 31, 1991

Facts:
On November 3, 1986, Commonwealth Act No. 120 created the NPC as a public
corporation to undertake the development of hydraulic power and the production of power
from other sources. On June 4, 1949, Republic Act No. 358 granted NPC tax
and duty exemption privileges.

On September 10, 1971, Republic Act No. 6395, Section 13 provided in detail the
exemption of the NPC from all taxes, duties, fees, imposts and other charges by the
government and its instrumentalities.

On January 22, 1974, Presidential Decree No. 380 amended section 13, paragraphs (a)
and (d) of Republic Act No. 6395 by specifying, among others, the exemption of
NPC from such taxes, duties, fees, imposts and other charges imposed “directly or
indirectly,” on all petroleum products used by NPC in its operation. Presidential Decree
No. 938 dated May 27, 1976 further amended the aforesaid provision by integrating the
tax exemption in general terms under one paragraph.

On June 24, 1987 the FIRB issued Resolution No. 17-87 restoring NPC’s tax and duty
exemption privileges effective March 10, 1987. On October 5, 1987, the President,
through respondent Executive Secretary Macaraig, Jr., confirmed and approved FIRB
Resolution No. 17-87.

NPC filed a petition for refund of tax claims before the BIR. On

Issue: Whether or not NPC ceased to enjoy indirect tax and duty exemption with the
enactment of PD No. 938 on May 27, 1976

Held: NO.

Ruling:
The rule of strict construction of statutes granting tax exemptions does not apply in the
case of exemptions in favor of a governmental political subdivision or instrumentality.

P.D. No. 938 provides that its purpose is to maintain the tax exemption of NPC from all
forms of taxes including indirect taxes as provided for under R.A. No. 6395 and P.D. No.
380 if it is to attain its goals. Further, the construction of P.D. No. 938 by the Office charged
with its implementation should be given controlling weight.

The contention of petitioner that the exemption of NPC from indirect taxes under Section
13 of R.A. No. 6395 and P.D. No. 380, is deemed repealed by P.D. No. 938 when the
reference to it was deleted is not well-taken. Repeal by implication is not favored
unless it is manifest that the legislature so intended. As laws are presumed to be passed
with deliberation and with knowledge of all existing ones on the subject, it is logical to
conclude that in passing a statute it is not intended to interfere with or abrogate a
former law relating to the same subject matter, unless the repugnancy between the two is
not only irreconcilable but also clear and convincing as a result of the language used, or
unless the latter Act fully embraces the subject matter of the earlier.