CTA dismisses BIR’s P4.2 billion tax deficiency case vs. PSALM

Adrian Ayalin, ABS-CBN News

Posted at Oct 09 2018 09:18 PM

MANILA - The Court of Tax Appeals has dismissed a petition for review filed by the Bureau of Internal Revenue on the collection of P4.227 billion deficiency in value-added tax (VAT) liabilities from the Power Sector Assets and Liabilities Management Corporation.

In the CTA en banc decision promulgated October 1, 2018, the court said it does not have jurisdiction over disputes between government agencies.

It stressed that Presidential Decree No. 242 or the "Act Prescribing the Procedure for Administrative Settlement or Adjudication of Disputes, Claims and Controversies Between or Among Government Offices, Agencies and Instrumentalities, including Government-Owned or Controlled Corporations (GOCC) and for other Purpose” will apply in the cases involving BIR and PSALM.

The decree states that in all cases involving government agencies and questions of law, the Secretary of Justice has exclusive jurisdiction.

The CTA also emphasized that the decree was used by the Supreme Court en banc on another case which also involved the two parties. 

The issue on VAT collection for taxable year 2009 pertains to the sale of assets of the National Power Corporation.

“With the afore-cited provisions of laws and the recent pronouncement by the Supreme Court En Banc, it is plain that the instant case between PSALM Corporation, a GOCC and the BIR, a government bureau, involving the disputed deficiency VAT assessment on PSALM Corporation’s proceeds from privatization of NPC’s assets, is within the jurisdiction of the Secretary of Justice. Therefore, the court is bereft of jurisdiction to take cognizance of the present case,” the CTA said. 

The CTA decision was penned by Associate Justice Esperanza Fabon-Victorino, with the concurrence of Associate Justices Juanito Castaneda, Jr. and Cielito Mindaro-Grulla.

The court added that according to the Administrative Code of 1987, jurisdiction over disputes between government agencies are either vested in the Solicitor General, the Government Corporate Counsel or the Justice Secretary. 

The CTA also dsmissed the petition for review filed by PSALM against the BIR on taxes on privatization activities and incidental transactions.

Associate Justice Ma. Belen Ringpis-Liban dissented from the majority decision while Presiding Justice Roman Del Rosario inhibited from the proceedings.

In her dissenting opinion, Ringpis-Liban maintained that the CTA has jurisdiction over the petitions as Republic Act No. 9282 which elevated the CTA to the level of collegiate court with special jurisdiction superseded the older PD No. 242 and Administrative Code. 

“It has been said that if two or more laws on the same subject cannot possibly be reconciled or harmonized, one has to give way in favor of the other. Either the two laws are reconciled and harmonized or, if they cannot, the earlier one must yield to the later one, it being the later expression of legislative will,” Ringpis-Liban said.