G.R. No. 190680 : Commissioner of Internal Revenue v. Court of Tax Appeals and Ayala Land, Inc.
FIRST DIVISION
G.R. No. 190680 : September 13, 2012
COMMISSIONER OF INTERNAL REVENUE, Petitioner, v. COURT OF TAX APPEALS and AYALA LAND, INC., Respondents.
R E S O L U T I O N
REYES, J.:
Subject of this petition for certiorari under Rule 65 of the Rules of Court is the Resolution1ςrνll dated October 30, 2009 of the Court of Tax Appeals (CTA) en bane in CTA EB No. 402, which dismissed herein petitioner Commissioner of Internal Revenue's (CIR) petition for relief from judgment under Rule 38 of the Rules of Court.
The factual antecedents that led to the filing of this petition are as follows: In 2005, private respondent Ayala Land, Inc. (ALI) filed with the CTA a petition for review2ςrνll to question the CIRs assessment against it for deficiency value-added tax (VAT) for the calendar year 2003. Before the tax court, the CIR and ALI filed their Joint Stipulation of Facts and Issues, which was cited in the present petition to read in part:chanroblesvirtuallawlibrary
Petitioner (herein private respondent) is primarily engaged in the sale and/or lease of real properties and, among others, likewise owns and operates theatres or cinemas.
Petitioner received respondents (herein petitioner) Final Assessment Notice (hereinafter referred to as the 2003 FAN) dated 29 October 2004 whereby respondent was assessing petitioner alleged deficiency 10% value added tax (VAT) on its alleged income from cinema operations for the taxable year 2003 in the aggregate amount of One Hundred Three Million Three Hundred Forty-Six Thousand Six Hundred Ninety-One and 40/100 Pesos (P 103,346,691.40) inclusive of 20% interest.
On 10 December 2004, petitioner filed its protest with the office of respondent contesting the factual and legal bases of the VAT assessment.
On 28 April 2005, petitioner received respondents 25 April 2005 Decision denying petitioners protest, with a notation that the same constitutes respondents Final Decision on the matter.
Petitioner received on 23 November 2004, respondents 19 November 2004 Letter of Authority No. 0002949 for the examination of ALL INTERNAL REVENUE TAXES of petitioner from 1 January 2003 to 31 December 2003.
In order to protect its right, petitioner filed the Petition for Review pursuant to Section 228 of the Tax Code.3ςrνll
Proceedings ensued. On April 11, 2008, the CTA Second Division rendered its Decision granting ALIs petition for review. The assessment against ALI for deficiency VAT in the amount of P 103,346,691.40 for the calendar year 2003 was ordered cancelled and set aside. The CIRs motion for reconsideration was denied, prompting him to file an appeal to the CTA en banc.
On February 12, 2009, the CTA en banc rendered its Decision affirming the decision of the CTA Second Division. Feeling aggrieved, the CIR filed a motion for reconsideration, but this was denied by the CTA en banc in its Resolution dated March 25, 2009.
The CIR claims that neither he nor his statutory counsel, the Office of the Solicitor General (OSG), received a copy of the CTA en bancs resolution denying his motion for reconsideration. It then came as a surprise to him when he received on June 17, 2009 a copy of the CTA en bancs Resolution dated June 10, 2009 which provided that the CTA Decision dated February 12, 2009 had become final and executory. The CIR then filed on July 2, 2009 a Manifestation with the Motion to Reconsider Resolution Ordering Entry of Judgment,4ςrνll questioning the CTAs entry of judgment and seeking the following reliefs: (1) for the CTA to withdraw its resolution ordering the issuance of entry of judgment; (2) for the CTA to resolve the CIRs motion for reconsideration filed on March 4, 2009; and (3) should there be an existing resolution of the motion for reconsideration, for the CTA to serve a copy thereof upon the CIR and his counsel. The petitioner explained in his manifestation:chanroblesvirtuallawlibrary
On 17 June 2009, he received Resolution dated 10 June 2009 holding that in the absence of an appeal, the Honorable Courts Decision dated 12 February 2009 has become final and executory.
Thus, the Honorable Court ordered the issuance of an Entry of Judgment in this case.
Respondent respectfully manifests that on 4 March 2009, he filed a Motion for Reconsideration of the Honorable Courts Decision dated 12 February 2009, the same decision which the Honorable Court has now deemed to be final and executory.
Further, a check with his records reveals that there is no Resolution which has been issued by the Honorable Court denying his Motion for Reconsideration. To double check, on three (3) occasions he has inquired from his counsel the Office of the Solicitor General, particularly State Solicitor Bernardo C. Villar, on whether he has received any Resolution on the Motion for Reconsideration. Respondent was informed that there was none.
Finally, he checked with the Honorable Court and was informed that there is a Resolution dated 25 March 2009. In short, while petitioner and his counsel were of the mind that the Motion for Reconsideration still had to be resolved, it appears that it already was.
However, it is respectfully manifested that petitioner and his counsel have not received the said Resolution and thus, such failure has prevented petitioner from filing the necessary Petition for Review before the Honorable Supreme Court. Such petition would have barred the Decision dated 12 February 2009 from attaining finality and eventual entry in the Book of Judgements.5ςrνll (Emphasis ours)
On July 29, 2009, the CTA en banc issued its Resolution denying the motion. It reasoned that per its records, the CIR and OSG had received on March 27, 2009 and March 30, 2009, respectively, a copy of the resolution denying the motion for reconsideration.6ςrνll The CIR received its copy of said Resolution dated July 29, 2009 on August 3, 2009.
The CIR then filed on October 2, 2009 with the CTA en banc a petition for relief7ςrνll asking that the entry of judgment in the case be recalled, and for the CIR and OSG to be served with copies of the Resolution dated March 25, 2009. To show the timeliness of the petition for relief, the CIR claimed that he knew of the Resolution dated March 25, 2009 only on August 3, 2009, when he received a copy of the Resolution dated July 29, 2009. He then claimed that the sixty (60)-day period for the filing of the petition for relief should be reckoned from August 3, 2009, giving him until October 2, 2009 to file it. Further, CIRs counsel Atty. Felix Paul R. Velasco III (Atty. Velasco) tried to explain the CIRs and OSGs alleged failure to receive the CTAs Resolution dated March 25, 2009, notwithstanding the CTAs records showing the contrary, by alleging in his Affidavit of Merit8ςrνll attached to the petition for relief that:chanroblesvirtuallawlibrary
14. I noted that, as stated by the Honorable CTA in its 29 July 2009 Resolution, there were rubber stamps of both petitioner and the OSG signifying receipt of the resolution. But given the fact that both petitioner and the OSG did not have copies of this Resolution, the only logical explanation is that the front notice page was indeed correct and stamped by both offices but the received enclosed order of the Honorable Court probably contained a different one. This error has happened to petitioner in other cases but these were subsequently and timely noticed and no detrimental effects occurred.9ςrνll
On October 30, 2009, the CTA en banc dismissed the petition for relief for having been filed out time, via the assailed resolution which reads in part:chanroblesvirtuallawlibrary
The Supreme Court has ruled that "a party filing a petition for relief from judgment must strictly comply with two reglementary periods; first, the petition must be filed within sixty (60) days from knowledge of the judgment, order or other proceeding to be set aside; and second, within a fixed period of six (6) months from entry of such judgment, order or other proceeding. Strict compliance with these periods is required because a petition for relief from judgment is a final act of liberality on the part of the State, which remedy cannot be allowed to erode any further the fundamental principle that a judgment, order or proceeding must, at some definite time, attain finality in order to put at last an end to litigation."
x x x x
In this case, petitioner seeks relief from judgment of the Court En Bancs Resolution dated March 25, 2009. Records show that petitioner learned of the Resolution dated March 25, 2009 when he received on June 17, 2009, the Resolution of the Court En Banc dated June 10, 2009 ordering the Entry of Judgment. This was in fact stated in petitioners "Manifestation with Motion to Reconsider Resolution Ordering Entry of Judgment" which petitioner filed on July 2, 2009. Hence, the 60 days should be counted from June 17, 2009 and the 60th day fell on August 16, 2009 which was a Sunday. Hence, the last day for the filing of the petition for relief was on August 17, 2009. Even if the 60-day period is counted from petitioners receipt of the Entry of Judgment on July 1, 2009, with the 60th day falling on August 30, 2009, the petition for relief filed on October 2, 2009 will still be filed beyond the 60-day period.10ςrνll (Emphasis ours)
Without filing a motion for reconsideration with the CTA en banc, the CIR filed the present petition for certiorari. The CIR argues that his 60-day period under Rule 38 should have been counted from August 3, 2009, when he received a copy of the Resolution dated July 29, 2009 and claimed to have first learned about the Resolution dated March 25, 2009 denying his motion for reconsideration.11ςrνll
The issue then for this Courts resolution is: Whether or not the CTA committed grave abuse of discretion amounting to lack or excess of jurisdiction in ruling that the petition for relief of the CIR was filed beyond the 60-day reglementary period under Rule 38.
At the outset, this Court holds that a dismissal of the petition is warranted in view of the petitioners failure to file before the CTA en banc a motion for reconsideration of the assailed resolution. The settled rule is that a motion for reconsideration is a condition sine qua non for the filing of a petition for certiorari. Its purpose is to grant an opportunity for the court to correct any actual or perceived error attributed to it by the re-examination of the legal and factual circumstances of the case. The rationale of the rule rests upon the presumption that the court or administrative body which issued the assailed order or resolution may amend the same, if given the chance to correct its mistake or error. The "plain speedy, and adequate remedy" referred to in Section 1, Rule 65 of the Rules of Court is a motion for reconsideration of the questioned order or resolution.12ςrνll While the rule is not absolute and admits of settled exceptions, none of the exceptions attend the present petition.
Even if we set aside this procedural infirmity, the petition is dismissible. In resolving the substantive issue, it is crucial to determine the date when the petitioner learned of the CTA en bancs Resolution dated March 25, 2009, as Section 3, Rule 38 of the Rules of Court provides:chanroblesvirtuallawlibrary
Sec. 3. Time for filing petition; contents and verification. A petition provided for in either of the preceding sections of this Rule must be verified, filed within sixty (60) days after the petitioner learns of the judgment, final order, or other proceeding to be set aside, and not more than six (6) months after such judgment or final order was entered, or such proceeding was taken; and must be accompanied with affidavits showing the fraud, accident, mistake, or excusable negligence relied upon, and the facts constituting the petitioners good and substantial cause of action or defense, as the case may be. (Emphasis ours)
By the CIRs own evidence and admissions, particularly in the narration of facts in the petition for relief, the OSGs letter and the affidavit of merit attached thereto, it is evident that both the CIR and the OSG had known of the CTAs Resolution dated March 25, 2009 long before August 3,
2009. Granting that we give credence to the CIRs argument that he could not have known of the Resolution dated March 25, 2009 by his receipt on June 17, 2009 of the Resolution dated June 10, 2009, the CIRs petition for relief was still filed out of time.
The CIRs claim that it was only on August 3, 2009 that he learned of the CTAs denial of his motion for reconsideration is belied by records showing that as of June 22, 2009, he already knew of such fact. The information was relayed by the CTA to the CIR, when the latter inquired from the court about the status of the case and the courts action on his motion for reconsideration. It was precisely because of such knowledge that he filed on July 2, 2009 the manifestation and motion pertaining to the CTAs order of entry of judgment. Pertinent portions of his petition for relief read:chanroblesvirtuallawlibrary
On 17 June 2009, he received a Resolution of the Honorable Court dated 10 June 2009 ordering the issuance of the Entry of Judgment in the present case, x x x:
x x x x
Petitioners handling counsel was surprised that the above emphasized decision dated 12 February 2009 had become final considering that he had filed a timely Motion for Reconsideration on 4 March 2009.
Investigating further, he called the Honorable Court and was informed that his Motion for Reconsideration filed by registered mail on 4 March 2009 was received by the Honorable Court on 11 March 2009. He was also informed that the last document on file there was a Resolution dated 25 March 2009. He then searched his records and found no such Resolution. Petitioner then tried to confirm the same from petitioners official counsel, the Office of the Solicitor General (OSG) through the assigned Solicitor, Atty. Bernardo C. Villar. He was then informed that, same as handling counsel, the latter was also waiting for the resolution of the Motion for Reconsideration filed on 4 March 2009 and likewise, did not receive any copy of any resolution for that matter. The OSG then formalized this information through a letter dated 24 June 2009. x x x.13ςrνll (Emphasis ours)
In the letter14ςrνll dated June 24, 2009 attached to the petition for relief as Annex "A", State Solicitor Bernardo C. Villar mentioned that on June 22, 2009, he and Atty. Velasco had discussed the CTAs prior issuance of a resolution denying their motion for reconsideration, thus:chanroblesvirtuallawlibrary
This pertains to the CTA Notice of Resolution dated June 10, 2009 (directing entry of judgment), a copy of which was received by the OSG on June 17, 2009, and further to our telephone discussion on Monday, June 22, 2009.
As we have discussed, the OSG has not previously received any resolution on the motion for reconsideration which you filed with the CTA. However, you pointed out that CTA records tend to show that there had been such a resolution and that BIR was already notified of the same sometime in March 2009.15ςrνll (Emphasis ours)
The CIR then can no longer validly dispute that he had known of the CTAs Resolution dated March 25, 2009 on June 22, 2009. Even as we reckon the 60-day period under Section 3, Rule 38 from said date, the petitioner only had until August 21, 2009 within which to file a petition for relief. Since August 21, 2009, a Friday, was a non-working holiday, the petitioner should have filed the petition at the latest on August 24, 2009. The CIRs filing with the CTA of the petition for relief on October 2, 2009 then did not conform to the 60-day requirement.
Significantly, the OSG also opined, and had so advised the CIR, that the petition for relief was indeed filed out of time. Attached to the petitioners Compliance16ςrνll with this Courts Resolution17ςrνll dated May 30, 2011 is the OSGs letter18ςrνll dated September 22, 2009, addressed to the BIR and which reads:chanroblesvirtuallawlibrary
We regret to inform you that we cannot be of help to you in filing a petition for relief since you are the ones on record representing the BIR before the Court of Tax Appeals. As you well know, our participation in these matters are limited to filing an appeal with the Supreme Court in due time. This is precisely what we meant in our previous letters as the kind of assistance that we can provide you.
Furthermore, as far as we are concerned, there is doubt in the propriety of filing a petition for relief at this time. Please note that from your receipt on June 17, 2009 of the entry of judgment, you filed a "Manifestation and Motion to Reconsider Resolution Ordering Entry of Judgment" dated July 1, 2009 instead of a petition for relief. In the meantime, the 60 days period (from actual knowledge) under Section 3, Rule 38 within which to file the edition for relief continued to run and has expired already.19ςrνll (Emphasis ours)
Given the foregoing, this Court finds no cogent reason to grant petitioner's plea for the issuance of a writ of certiorari. An act of a court or tribunal may only be considered as committed in grave abuse of discretion when the same is performed in a capricious or whimsical exercise of judgment, which is equivalent to lack of jurisdiction. The abuse of discretion must be so patent and gross as to amount to an evasion of positive duty or to a vi1iual refusal to perform a duty enjoined by law or to act at all in contemplation of law, as where the power is exercised in an arbitrary and despotic manner by reason of passion or personal hostility.20ςrνll There was no such grave abuse of discretion in this case because the CIR's petition for relief was indeed filed out of time.ςηαοblενιrυαllαωlιbrαr
WHEREFORE, premises considered, the petition is DISMISSED.ςrαlαωlιbrαr
SO ORDERED.
Endnotes:
1ςrνll Rollo, pp. 21-25.
2ςrνll Docketed as CTA Case No. 7261.
3ςrνll Rollo, pp. 4-5.
4ςrνll Id. at 114-118.
5ςrνll Id. at 114-115.
6ςrνll Id. at 7.
7ςrνll Id. at 36-51.
8ςrνll Id. at 54-57.
9ςrνll Id. at 55.
10ςrνll Id. at 23-24.
11ςrνll Id. at 12.
12ςrνll Metro Transit Organization, Inc. v. Piglas NFWU-KMU, G.R. No. 175460, April 14, 2008, 551 SCRA 326, 337.
13ςrνll Rollo, pp. 38-39.
14ςrνll Id. at 53.
15ςrνll Id.
16ςrνll Id. at 90-95.
17ςrνll Id. at 81-82.
18ςrνll Id. at 96.
19ςrνll Id.
20ςrνll (Source unreadable)
