FIRST
DIVISION
[ G.R. No. 215801, January 15, 2020 ]
These twin cases refer to the: 1) Petition for Review filed by the Bureau of Intemal Revenue (BIR) (G.R. No. 215801); and 2) Special Civil Action for Certiorari initiated by the First E-Bank Tower Condominium Corp. (First E-Bank) (G.R. No. 218924). Both cases assail the following dispositions of the Court of Appeals in CA-G.R. CV No. 102266.
Facts:
The first E- bank filed a petition for declaratory relief
seeking to declare as invalid Revenue Memorandum Circular No. 65-2012 (RMC No.
65-2012). RMC No. 65-2012 entitled "Clarifying the Taxability of
Association Dues, Membership Fees and Other Assessments/ Charges Collected by
Condominium Corporations” which provides:
Income Tax -- The amounts paid in as dues or fees by
members and tenants of a condominium corporation form part of the gross income
of the latter subject to income tax.
Value-Added Tax (VAT)
-Association dues, membership fees, and other assessments/charges collected by
a condominium corporation are subject to VAT since they constitute income
payment or compensation for the beneficial services it provides to its members
and tenants.
The
phrase "in the course of trade or business" means the
regular conduct or pursuit of a commercial or an economic activity, including
transactions incidental thereto, by any person regardless of whether or not the
person engaged therein is a nonstock, nonprofit private organization
(irrespective of the disposition of its net income and whether or not it sells
exclusively to members or their guests), or government entity.
In
this provision it is clear that even a non-stock, non-profit organization or
government entity is liable to pay VAT on the sale of goods or services. This
conclusion was affirmed by the Supreme Court in Commissioner of Internal
Revenue v. Court of Appeals and Commonwealth Management and Services
Corporation, G.R. No. 125355, March 30, 2000.
In
its Petition, the First E-Bank essentially alleged: It was a non-stock
non-profit condominium corporation. It owned and possessed, through its
members, a condominium office building. RMC No. 65-2012 imposed on it two (2)
tax liabilities: 1) value-added tax (VAT) of P118,971. 53 and b) income tax
ofP665,904.12. That RMC No. 65-2012 burdened the owners of the condominium
units with income tax and VAT, and that RMC No. 65-2012 was oppressive and
confiscatory because it required condominium unit owners to produce additional
amounts for the thirty-two percent (32%) income tax and twelve percent (12%)
VAT.
So it
sent a Letter dated December 5, 2012 to the BIR Commissioner requesting
deferment of RMC No. 65-2012. The BIR and RDO Espiritu through the Office of
the Solicitor General (OSG) riposted that declaratory relief was no longer proper here considering that RMC No.
65-2012 already took effect on October 31, 2012. The alleged injury which the
First E-Bank sought to prevent had already arisen as of that date.
The Trial Court ruled the First E-Bank correctly resorted to a petition for declaratory relief for the purpose of invalidating RMC No. 65-2012. On this score, the trial court declared as invalid RMC No.
The
BIR et al. moved for reconsideration. The trial court denied the parties'
respective motions for reconsideration.
The
Court of Appeals dismissed the appeal of the First E-Bank and the joint appeal
of the BIR et al. on ground of lack of jurisdiction. It emphasized that
jurisdiction over the case was exclusively vested in the Court of Tax Appeals
since the trial court's impugned resolution involved a tax matter.
In G.R. No. 218924, the
First E-Bank initiated, on alleged ground of grave abuse of discretion, a Special
Civil Action for Certiorari to nullify the assailed dispositions of the
Court of Appeals.
In G.R. No. 215801, the
BIR et al. availed ofRu1e 45 of the Revised Rules of Court. They plead the same
legal issue pertaining to which court has jurisdiction over the trial court's
decision.
Issue:
Ruling:
No. A petition for declaratory relief
is not the proper remedy.
Declaratory relief requires
the following elements:
(1)
the subject matter of the controversy must be a deed, will, contract or other
written instrument, statute, executive order or regulation, or ordinance; (2)
the terms of said documents and the validity thereof are doubtful and require
judicial construction; (3) there must have been no breach of the documents in
question; (4) there must be an actual justiciable controversy or the
"ripening seeds" of one between persons whose interests are adverse;
(5) the issue must be ripe for judicial determination; and (6) adequate relief
is not available through other means or other forms of action or proceeding.
The
Court rules that certiorari or prohibition, not declaratory relief, is the proper remedy to assail the validity or
constitutionality of executive issuances.
DOTR
v. PPSTA: There is no actual case involved in a Petition for Declaratory Relief. It cannot, therefore,
be the proper vehicle to invoke the judicial review powers to declare a statute
unconstitutional.
To
question the constitutionality of the subject issuances, respondents should
have invoked the expanded certiorari jurisdiction under Section 1 of Article
VIII of the 1987 Constitution . The adverted section defines judicial power as
the power not only "to settle actual controversies involving rights which
are legally demandable and enforceable," but also "to determine
whether or not there has been a grave abuse of discretion amounting to lack or
excess of jurisdiction on the part of any branch or instrumentality of the
Government."
"the
remedies of certiorari and prohibition are necessarily broader in scope and
reach, and the writ of certiorari or prohibition may be issued to correct
errors of jurisdiction committed not only by a tribunal, corporation, board or
officer exercising judicial, quasi-judicial or ministerial functions, but also
to set right, undo[,] and restrain any act of grave abuse of discretion
amounting to lack or excess of jurisdiction by any branch or instrumentality of
the Government, even if the latter does not exercise judicial, quasi-judicial
or ministerial functions." Thus, petitions for certiorari and
prohibition are the proper remedies where an action of the legislative branch
is seriously alleged to have infringed the Constitution.
G.R. No. 218924
The First E-Bank faults the Court of Appeals with grave
abuse of discretion amounting to lack or excess of jurisdiction when the latter
dismissed the former's appeal from the trial court's Resolution. A petition for
certiorari is proper where the impugned dispositions, as in this case, are
tainted with grave abuse of discretion amounting to lack or excess of jurisdiction.
G.R. No. 215801
On the part of the BIR et al., they pursued the regular
route under Rule 45 of the Revised Rules of Court. Being the beneficiary of the
taxes paid by the First E-Bank, the State has no compelling need to avail of
the extraordinary remedy under Rule 65. Rule 45 is undoubtedly an available
remedy in the ordinary course of law.
No comments:
Post a Comment