THIRD DIVISION
G.R. No. 234446, July 24, 2019
VICTORIA MANUFACTURING CORPORATION EMPLOYEES UNION, PETITIONER, v. VICTORIA MANUFACTURING CORPORATION, RESPONDENT.
D E C I S I O N
A. REYES, JR., J.:
Like courts, administrative boards and officers vested with quasi-judicial power may only exercise jurisdiction over matters that their enabling statutes confer in them. This rule applies even though the parties hold out to the administrative agency concerned that it has jurisdiction over a particular dispute. Generally, lack of jurisdiction may be raised at any time, and is a defense that cannot be lost. However, by way of narrow exception, the doctrine of estoppel by laches, which rests on considerations of public policy, may effectively bar jurisdictional challenges. But it must be emphasized that the doctrine finds application only where the jurisdictional issue is so belatedly raised that it may be presumed o have been waived by the invoking party.
This is a petition for review on certiorari1 questioning the May 26, 2017 Decision2 and the August 30, 2017 Resolution3 rendered by the Court of Appeals (CA) in CA-G.R. SP No. 146672, through which the May 26, 2016 Decision4 of Voluntary Arbitrator (VA) Renato Q. Bello was set aside insofar as the respondent, Victoria Manufacturing Corporation (VMC), was ordered to reimburse the income tax withheld from the salaries of the members of the petitioner, Victoria Manufacturing Corporation Employees Union (VMCEU).
In response to VCM's letter, the BIR opined that VMCEU's members were not exempt from income tax, as what they were earning was above the statutory minimum wage mandated by Wage Order No. NCR-18.8
VMC wage structure pursuant to the CBA Minimum wage mandated by Wagee Order No. NCR-18 Basic wage P466.00 P451.00 COLA n/a P15.00 TOTAL P466.00 P466.00
WHEREFORE, premises considered, a decision is hereby rendered ORDERING respondent VICTORIA MANUFACTURING CORPORATION to:x x x x
2.) reimburse all its rank-and-file minimum wage earners who are exempt from income taxes with the amounts it erroneously withheld.x x x x
SO DECIDED.12Aggrieved, VMC sought relief before the CA through a petition for certiorari.13
ACCORDINGLY, the petition is GRANTED and the assailed Decision dated May 26, 2016, NULLIFIED.After the denial of its motion for reconsideration, VMCEU filed the instant petition, arguing that the CA should not have allowed VMC to question the VA's jurisdiction because the company: (1) actively participated in the arbitration proceedings and, at the time, never raised lack of jurisdiction; and (2) voluntarily bound itself, through the Submission Agreement, to abide by the VA's decision.18 Essentially, the union contends that the company was estopped from challenging the VA's jurisdiction.
SO ORDERED.17 (Emphasis in the original)
Art. 261. Jurisdiction of Voluntary Arbitrators or panel of Voluntary Arbitrators. The Voluntary Arbitrator or panel of Voluntary Arbitrators shall have original and exclusive jurisdiction to hear and decide all unresolved grievances arising from the interpretation or implementation of the Collective Bargaining Agreement and those arising from the interpretation or enforcement of company personnel policies x x x.Did the VA, pursuant to the above provisions, have jurisdiction to rule on the legality of VMC's act of withholding income tax from the salaries of VMCEU's members?
Art. 262. Jurisdiction over other labor disputes. The Voluntary Arbitrator or panel of Voluntary Arbitrators, upon agreement of the parties, shall also hear and decide all other labor disputes including unfair labor practices and bargaining deadlocks.29
The [VA] has no competence to rule on the taxability of the gas allowance and on the propriety of the withholding of tax. These issues are clearly tax matters, and do not involve labor disputes. To be exact, they involve tax issues within a labor relations setting, as they pertain to questions of law on the application of Section 33 (A) of the [Tax Code]. They do not require the application of the Labor Code or the interpretation of the [Memorandum of Agreement] and/or company personnel policies. Furthermore, the company and the union cannot agree or compromise on the taxability of the gas allowance. Taxation is the State's inherent power; its imposition cannot be subject to the will of the parties.Honda Cars espouses a sound view. The ponencia recognized that the jurisdiction of an administrative body must be confined to matters within its specialized competence. Since the withholding of tax from employees' salaries is governed by the Tax Code, disputes involving the propriety or legality of withholding should be submitted to the CIR, the administrative body vested with the power to interpret tax laws, and not the VA, whose jurisdiction is limited to labor disputes. After all, quasi-judicial bodies only possess jurisdiction over matters that are conferred upon them by their enabling statutes.33
Under paragraph 1, Section 4 of the [Tax Code], the CIR shall have the exclusive and original jurisdiction to interpret the provisions of the [Tax Code] and other tax laws, subject to review by the Secretary of Finance. Consequently, if the company and/or the union desire/s to seek clarification of these issues, it/they should have requested for a tax ruling from the Bureau of Internal Revenue (BIR). x x x
x x x x
On the other hand, if the union disputes the withholding of tax and desires a refund of the withheld tax, it should have filed an administrative claim for refund with the CIR. Paragraph 2, Section 4 of the [Tax Code] expressly vests the CIR original jurisdiction over refunds of internal revenue taxes, fees or other charges, penalties imposed in relation thereto, or other tax matters.32 (Citations omitted)
x x x Whenever it appears that the court has no jurisdiction over the subject matter, the action shall be dismissed. This defense may be interposed at any time, during appeal or even after final judgment. Such is understandable, as this kind of jurisdiction is conferred by law and not within the courts, let alone the parties, to themselves determine or conveniently set aside.37 (Citations omitted)At this juncture, it should be stated that lack of jurisdiction is a serious defect that may be raised anytime, even for the first time on appeal, since it is a defense that is not subject to waiver.38
The Court, thus, wavered on when to apply the exceptional circumstance in Sibonghanoy and on when to apply the general rule x x x expounded at length in Calimlim. The general rule should, however, be, as it has always been, that the issue of jurisdiction may be raised at any stage of the proceedings, even on appeal, and is not lost by waiver or by estoppel. Estoppel by laches, to bar a litigant from asserting the court's absence or lack of jurisdiction, only supervenes in exceptional cases similar to the factual milieu of [Sibonghanoy]. Indeed, the fact that a person attempts to invoke unauthorized jurisdiction of a court does not estop him from thereafter challenging its jurisdiction over the subject matter, since such jurisdiction must arise by law and not by mere consent of the parties. This is especially true where the person seeking to invoke unauthorized jurisdiction of the court does not thereby secure any advantage or the adverse party does not suffer any harm.46 (Emphasis supplied)The above pronouncement was more recently reiterated in Adlawan v. Joaquino, et al.47viz.:
We emphasize that our ruling in Sibonghanoy establishes an exception which is to be applied only under extraordinary circumstances or to those cases similar to its factual situation. The rule to be followed is that the lack of a court's jurisdiction is a non-waivable defense that a party can raise at any stage of the proceedings in a case, even on appeal; the doctrine of estoppel, being the exception to such non-waivable defense, must be applied with great care and the equity must be strong in its favor.48 (Emphasis supplied)Taking the foregoing into account, it is clear that estoppel will not operate to confer jurisdiction upon a court, save in the most exceptional of cases.49 Without a law that grants the power to hear, try, and decide a particular type of action, a court may not, regardless of what the parties do or fail to do, afford any sort of relief in any such action filed before it. It follows then that, in those cases, any judgment or order other than one of dismissal is void for lack of jurisdiction.50 This must be the rule since no less than the Constitution provides that it is a function of the Congress to define, prescribe, and apportion the jurisdiction of courts.51 Nevertheless, jurisprudence has recognized that situations may arise where parties, as a matter of public policy, must be bound by judgments rendered even without jurisdiction.52 Such situations, however, are exceptional, and courts must exercise the highest degree of caution in their application of estoppel to bar jurisdictional challenges.53 That said, where the circumstances of a particular case are comparable to those attendant in Sibonghanoy, jurisdictional issues may no longer be entertained, and the doctrine of estoppel by laches will effectively bind the parties to the judgment rendered therein regardless of whether the dispensing court was vested with jurisdiction by statute. In such situations, lack of jurisdiction must be invoked so belatedly so as to give rise to "a presumption that the party entitled to assert it either has abandoned it or declined to assert it."54
Very truly yours, (SGD) MISAEL DOMINGO C. BATTUNG III Deputy Division Clerk of Court |
Endnotes:
1Rollo, pp. 3-14.
2 Penned by Associate Justice Amy C. Lazaro-Javier (now a member of the Court), with Associate Justices Manuel M. Barrios and Pedro B. Corales concurring; id. at 16-30.
3 Id. at 32.
4 Id. at 122-132.
5 Id. at 122.
6 Id.
7 Id. at 19-20.
8 Id. at 107.
9 Id. at 20.
10 Id. at 106.
11 Id. at 128-129.
12 Id. at 131
13 Id. at 133-156
14 Id. at 25.
15 Id. at 27.
16 Id. at 28.
17 Id. at 29.
18 Id. at 11.
19Anama v. Citibank, N.A. (formerly First National City Bank), G.R. No. 192048, December 13, 2017, 848 SCRA 459, 469.
20 37 Phil. 921 (1918).
21Perkins v. Dizon, 69 Phil. 186, 189 (1939).
22Bilag, et al. v. Ay-Ay, et al., 809 Phil. 236, 243 (2017).
23El Banco Español-Filipino v. Palanca, supra note 20, at 927.
24 Id.
25Padlan v. Sps. Dinglasan, 707 Phil. 83, 91 (2013).
26Mitsubishi Motors Philippines Corporation v. Bureau of Customs, 760 Phil. 954, 960 (2015).
27Imperial et al. v. Judge Armes, et al., 804 Phil. 439, 459 (2017).
28See Machado, et al. v. Gatdula, et al., 626 Phil. 457 (2010).
29 LABOR CODE, Book V, Title VII-A, Arts. 261-262.
30 747 Phil. 542 (2014).
31 Id. at 549.
32 Id. at 549-550.
33Fruehauf Electronics Philippines Corporation v. Technology Electronics Assembly and Management Pacific Corporation, 800 Phil. 721, 743 (2016).
34Machado, et al. v. Gatdula, et al., 626 Phil. 457, 468 (2010).
35Fruehauf Electronics Philippines Corporation v. Techno ogy Electronics Assembly and Management Pacific Corporation, supra at 748.
36 306 Phil. 84 (1994).
37 Id. at 96.
38Boston Equity Resources, Inc. v. Court of Appeals, 711 Phil. 451, 466 (2013).
39 131 Phil. 556 (1968).
40 Id.
41Regalado v. Go, 543 Phil. 578, 598 (2007), citing Oca v. Court of Appeals, 428 Phil. 696, 702 (2002).
42Tijam, et al. v. Sibonghanoy, supra note 39, at 563-564.
43Figueroa v. People, 580 Phil. 58, 74 (2008).
44 204 Phil. 25, 35 (1982).
45 Supra note 43, at 76.
46 Id.
47 787 Phil. 599 (2016).
48 Id. at 611.
49Duero v. Court of Appeals, 424 Phil. 12, 23 (2002).
50Figueroa v. People, supra note 43, at 77-78.
51 Pursuant to Article VIII, Section 2 of the Constitution, the Congress has the power to define, prescribe, and apportion the jurisdiction of various courts, except the Supreme Court, which may not be deprived of its jurisdiction over the cases defined under Section 5 of the same article. Further, pursuant to Article VI, Section 30, the Congress, with the Supreme Court's advice and concurrence, may increase the latter's appellate jurisdiction.
52Spouses Gonzaga v. Court of Appeals, 442 Phil. 735, 742 (2002).
53Duero v. Court of Appeals, supra note at 49, at 21.
54Sps. Erorita v. Sps. Dumlao, 779 Phil. 23, 30 (2016), citing Figueroa v. People, supra note 43.
55Far East Bank and Trust Company v. Chua, 763 Phil. 289, 304-305 (2015).
56Rollo, p. 20.
57 Id. at 21.
58 Id. at 16.
59 Id. at 155.
60Tijam, et al. v. Sibonghanoy, supra note 39.
61Rollo, p. 71.