FELIPE B. OLLADA, PETITIONER AND APPELLANT, VS. THE SECRETARY OF FINANCE, ET AL., RESPONDENTS AND APPELLEES.

Direct appeal on questions of law from the decision of the Court of First
Instance of Manila in Civil Case No. 34731, dismissing appellant Ollada’s
petition for mandamus with preliminary injunction and damages.

The root of this case lies in Section 334 of the National Internal Revenue
Code, as amended by Republic Acts Nos. 438 and 658, that provides as
follows:

“Provided, however, that those whose quarterly sales, earnings, receipts, or
output do not exceed five thousand pesos shall keep and use a simplified set of
bookkeeping records duly authorized by the Secretary of Finance wherein all
transactions and results of operations are shown and from which all taxes due
the Government may readily be ascertained and determined anytime of the
year.”

Pursuant to the authority thus conferred upon the Secretary of Finance, the
latter promulgated Revenue Regulations No. V-13, a portion of which reads:

” ‘Simplified set of bookkeeping records’ consist of the record of daily
sales and cash deposits, the record of daily purchases, expenses, and cash
disbursements, record of the summary transactions, and the yearly statements of
net worth and operations, which may be in combined form or in separate booklets,
as illustrated in the forms forming part of those regulations. These forms may
be printed, mimeographed, typewritten or handwritten in print”

And consonant with said Revenue Regulations, the Secretary approved, for use
by taxpayers, simplified sets of bookkeeping records devised by Mrs. Sabina R.
Soriano and Messrs. Vicente I. Cruz, Yam Nam, and Jesus Lozada.

On January 25, 1956, the Secretary of Finance, again making use of his power
and authority under Republic Act No. 438, as amended by Republic Act No. 658,
amended Revenue Regulations No. V-13 by promulgating Revenue Regulations No.
V-43, which partly reads as follows:

“‘Simplified set of bookkeeping records’ consist of the records of daily
sales and cash receipts, the record of daily purchases, expenses and cash
disbursements, record of the summary of transactions, and the yearly statements
of net worth and operations, which may be in combined form or in separate
booklets. Said records should be especially designed for each class or kind of
trade or business and prepared by a Certified Public Accountant, should conform
substantially with the forms illustrated in Revenue Regulations No. V-13, should
be regularly bound and may be printed, mimeographed or
typewritten.”

Notwithstanding the promulgation of the foregoing amendatory Revenue
Regulations No. V-43, the Collector of Internal Revenue continued to accept and
approve for registration the simplified sets of bookkeeping records formerly
authorized under Revenue Regulations No V-13. It would appear that after the
promulgation of the subsequent Revenue Regulations No. V-43, Mr. Lozada, one of
those who prepared simplified sets of bookkeeping records under the anterior
Revenue Regulations No. V-13, raised the point whether his bookkeeping record
sets, as approved by the Secretary of Finance, could still be used after the
promulgation of Revenue Regulations No. V-13; and, in response to his query, the
latter answered that Revenue Regulations No. V-43 was not intended to have a
retroactive effect and could not, therefore, adversely affect those who, like
Mr. Lozada, had already acquired an accrued right to the use of their particular
kind of simplified sets of bookkeeping records.

Between October, 28, 1953 and October 15, 1956, appellant Felipe OUada, a
certified public accountant in the Philippines, prepared and devised his own
simplified sets of bookkeeping records, specially designed to suit each of the
different classes or kinds of business indicated therein, all of which were
approved by the Secretary ‘ of Finance upon recommendation of the Collector of
Internal Revenue.

The parties stipulated that, in devising, preparing and printing the
aforesaid simplified sets of bookkeeping records, appellant spent and invested
the sum of P42,746.50, not counting the cost and expenses of clerical and
editorial work. While there is no evidence showing the extent of similar
expenses incurred by Mrs. Sabina R. Soriano and Messrs. Vicente Cruz, Yam Nam
and Jesus Lozada in preparing their own versions of simplified sets of
bookkeeping records pursuant to Revenue Regulations No. V-13, like the
appellant, it may be assumed that they also made some investments in the
process.

The parties agree that the requirements of Revenue Regulations No. V-43
constitute a distinct improvement over the requirements of Revenue Regulations
No. V-13. Likewise, they admit that, in promulgating both regulations, the
Secretary of Finance acted within the prerogatives conferred upon him by
law.

Petitioner-appellant Ollada prays in these proceedings that
respondents-appellees Secretary of Finance and Collector (now Commissioner) of
Internal Revenue be enjoined from further accepting, authorizing, and tolerating
the use by the public of simplified sets of bookkeeping records that are not
prepared in accordance with Revenue Regulations No. V-43.

The National Internal Revenue Code has entrusted to the Secretary of Finance
the execution and implementation of Section 334, previously quoted. In carrying
out this mission, the Secretary promulgated Revenue Regulations Nos. V-13 and
V-43, and he was the one authorized to determine the respective spheres of
application of each. His later resolution that Revenue Regulation No. V-43 was
not intended to have retroactive effect (which in effect amounted to a ruling
that Regulation V-43 did not prohibit the use of simplified bookkeeping records
approved for use before V-43 became effective) was fully within the Secretary’s
powers and authority, and becomes part of the regulation itself. Not being
clearly unreasonable or arbitrary, the Secretary’s resolution is entitled to
recognition and respect from the Courts (Geukeko vs. Araneta, 101
Phil., 706; 54 Off. Gaz. [15] 4494). Surely, no one is better qualified to
interpret the intent behind these Revenue Regulations than the authority that
issued them.

Even granting, ad argumentum, that the subsequent permission to use
the old bookkeeping forms was incompatible with Revenue Regulations No. V-43,
such incompatibility would not render the permission illegal or void, since it
is not disputed that the Secretary may, at any time, amend or revoke any of the
Regulations issued by him so long as it is in consonance with the statutes (Sec.
334, N.I.R.C.).

For the purposes of the law, what is important is that the simplified
bookkeeping records should contain the necessary data from which the taxes due
may be ascertained, and the import of the disputed resolution is that those
records that were previously authorized, even if less convenient, are still
adequate for the purpose. That being the case, we fail to see how the petitioner
has ground for complaint. It may be true that his expected profits will be
reduced by the continued permission to use the records authorized under former
Revenue Regulations No. V-13, but that fact does not confer any right of action
upon him. The authority to print simplified records for sale to the public under
the new Regulations carries no assurance of monopoly or guarantee of a ready
market, and, as appellant himself admits, does not confer upon the licensee any
exclusive, irrevocable or vested property rights. In fact, such authority to
print is deemed subject to the implied condition that the Secretary may, at any
time, change or repeal any of the regulations issued by him, as he may see
fit.

In view of the foregoing, the judgment appealed from dismissing the petition
is affirmed. Appellant to pay the costs.

Paras, C.J., Bengzon, Padilla, Bautista Angelo, Labrador, Barrera,
Gutierrez David, and Paredes, JJ., concur.

Judgment affirmed.