G.R. No. 92585. May 08, 1992
CALTEX PHILIPPINES, INC., PETITIONER, VS. THE HONORABLE COMMISSION ON AUDIT, HONORABLE COMMISSIONER BARTOLOME C. FERNANDEZ AND HONORABLE COMMISSIONER ALBERTO P. CRUZ, RESPONDENTS.
DAVIDE, JR., J.:
This is a petition erroneously brought under Rule 44 of the Rules
of Court[1] questioning the
authority of the Commission on Audit (COA) in disallowing petitioner’s claims
for reimbursement from the Oil Price Stabilization Fund (OPSF) and seeking the
reversal of said Commission’s decision denying its claims for recovery of
financing charges from the Fund and reimbursement of underrecovery arising from
sales to the National Power Corporation, Atlas Consolidated Mining and
Development Corporation (ATLAS) and Marcopper Mining Corporation (MARCOPPER),
preventing it from exercising the right to offset its remittances against its
reimbursement vis-a-vis the OPSF and disallowing its claims which are
still pending resolution before the Office of Energy Affairs (OEA) and the
Department of Finance (DOF).
Pursuant to the 1987 Constitution,[2]
any decision, order or ruling of the Constitutional Commissions[3]
may be brought to this Court on certiorari by the aggrieved party
within thirty (30) days from receipt of a copy thereof. The certiorari referred to is the
special civil action for certiorari under Rule 65 of the Rules of Court.[4]
Considering, however, that the allegations that the COA acted
with: (a) total lack of jurisdiction in completely ignoring and showing
absolutely no respect for the findings and rulings of the administrator of the
fund itself and in disallowing a claim which is still pending resolution at the
OEA level, and (b) “grave abuse of discretion and completely without
jurisdiction”[5]
in declaring that petitioner cannot avail of the right to offset any amount
that it may be required under the law to remit to the OPSF against any amount
that it may receive by way of reimbursement therefrom are sufficient to bring
this petition within Rule 65 of the Rules of Court, and, considering further
the importance of the issues raised, the error in the designation of the remedy
pursued will, in this instance, be excused.
The issues raised revolve around the OPSF created under Section 8
of Presidential Decree (P.D.) No. 1956, as amended by Executive Order (E.O.)
No. 137. As amended, said Section 8
reads as follows:
“SECTION 8. There is hereby
created a Trust Account in the books of accounts of the Ministry of Energy to
be designated as Oil Price Stabilization Fund (OPSF) for the purpose of
minimizing frequent price changes brought about by exchange rate adjustments
and/or changes in world market prices of crude oil and imported petroleum
products. The Oil Price Stabilization
Fund may be sourced from any of the following:
a) Any increase in the tax collection from ad
valorem tax or customs duty imposed on petroleum products subject to
tax under this Decree arising from exchange rate adjustment, as may be
determined by the Minister of Finance in consultation with the Board of Energy;
b) Any increase in the tax collection as a
result of the lifting of tax exemptions of government corporations, as may be
determined by the Minister of Finance in consultation with the Board of Energy;
c) Any additional amount to be imposed on petroleum
products to augment the resources of the Fund through an appropriate Order that
may be issued by the Board of Energy requiring payment by persons or companies
engaged in the business of importing, manufacturing and/or marketing petroleum
products;
d) Any resulting peso cost differentials in case
the actual peso costs paid by oil companies in the importation of crude oil and
petroleum products is less than the peso costs computed using the reference
foreign exchange rate as fixed by the Board of Energy.
The Fund herein created shall be used for the following:
1) To reimburse the oil companies for cost
increases in crude oil and imported petroleum products resulting from exchange
rate adjustment and/or increase in world market prices of crude oil;
2) To reimburse the oil companies for possible
cost underrecovery incurred as a result of the reduction of domestic prices of
petroleum products. The magnitude of
the underrecovery, if any, shall be determined by the Ministry of Finance. `Cost underrecovery’ shall include the
following:
i. Reduction in oil company take as directed
by the Board of Energy without the corresponding reduction in the landed cost
of oil inventories in the possession of the oil companies at the time of the
price change;
ii. Reduction in internal ad valorem taxes
as a result of foregoing government mandated price reductions;
iii. Other factors as may be determined by the
Ministry of Finance to result in cost underrecovery.
The Oil Price Stabilization Fund (OPSF) shall be administered by
the Ministry of Energy.”
The material operative facts of this case, as gathered from the
pleadings of the parties, are not disputed.
On 2 February 1989, the COA sent a letter to Caltex Philippines,
Inc. (CPI), hereinafter referred to as Petitioner, directing the latter to
remit to the OPSF its collection, excluding that unremitted for the years 1986
and 1988, of the additional tax on petroleum products authorized under the
aforesaid Section 8 of P.D. No. 1956 which, as of 31 December 1987, amounted to
P335,037,649.00 and informing it that, pending such remittance, all of its
claims for reimbursement from the OPSF shall be held in abeyance.[6]
On 9 March 1989, the COA sent another letter to petitioner
informing it that partial verification with the OEA showed that the grand total
of its unremitted collections of the above tax is P1,287,668,820.00, broken
down as follows:
1986 – P233,190,916.00
1987 – 335,065,650.00
1988 – 719,412,254.00;
directing it to remit the same, with
interest and surcharges thereon, within sixty (60) days from receipt of the
letter; advising it that the COA will hold in abeyance the audit of all its
claims for reimbursement from the OPSF; and directing it to desist from further
offsetting the taxes collected against outstanding claims in 1989 and
subsequent periods.[7]
In its letter of 3 May 1989, petitioner requested the COA for an
early release of its reimbursement certificates from the OPSF covering claims
with the Office of Energy Affairs since June 1987 up to March 1989, invoking in
support thereof COA Circular No. 89-299 on the lifting of pre-audit of
government transactions of national government agencies and government-owned or
controlled corporations.[8]
In its Answer dated 8 May 1989, the COA denied petitioner’s
request for the early release of the reimbursement certificates from the OPSF
and repeated its earlier directive to petitioner to forward payment of the
latter’s unremitted collections to the OPSF to facilitate COA’s audit action on
the reimbursement claims.[9]
By way of a reply, petitioner, in a letter dated 31 May 1989,
submitted to the COA a proposal for the payment of the collections and the
recovery of claims, since the outright payment of the sum of P1.287 billion to the
OEA as a prerequisite for the processing of said claims against the OPSF will
cause a very serious impairment of its cash position.[10]
The proposal reads:
“We, therefore, very respectfully propose the following:
(1) Any procedural arrangement acceptable to COA
to facilitate monitoring of payments and reimbursements will be administered by
the ERB/Finance Dept./OEA, as agencies designated by law to administer/regulate
OPSF.
(2) For the retroactive period, Caltex will
deliver to OEA, P1.287 billion as payment to OPSF, similarly OEA will deliver
to Caltex the same amount in cash reimbursement from OPSF.
(3) The COA audit will commence immediately and
will be conducted expeditiously.
(4) The review of current claims (1989) will be
conducted expeditiously to preclude further accumulation of reimbursement from
OPSF.”
On 7 June 1989, the COA, with the Chairman taking no part, handed
down Decision No. 921 accepting the above-stated proposal but prohibiting
petitioner from further offsetting remittances and reimbursements for the
current and ensuing years.[11]
Decision No. 921 reads:
“This pertains to the
within separate requests of Mr. Manuel A. Estrella, President, Petron
Corporation, and Mr. Francis Ablan, President and Managing Director, Caltex
(Philippines) Inc., for reconsideration of this Commission’s adverse action
embodied in its letters dated February 2, 1989 and March 9, 1989, the former
directing immediate remittance to the Oil Price Stabilization Fund of
collections made by the firms pursuant to P.D. 1956, as amended by E.O. No.
137, S. 1987, and the latter reiterating the same directive but further
advising the firms to desist from offsetting collections against their claims
with the notice that `this Commission will hold in abeyance the audit of all x x
x claims for reimbursement from the OPSF’.
It appears that under
letters of authority issued by the Chairman, Energy Regulatory Board, the
aforenamed oil companies were allowed to offset the amounts due to the Oil
Price Stabilization Fund against their outstanding claims from the said Fund
for the calendar years 1987 and 1988, pending with the then Ministry of Energy,
the government entity charged with administering the OPSF. This
Commission, however, expressing serious doubts as to the propriety of the
offsetting of all types of reimbursements from the OPSF against all categories
of remittances, advised these oil companies that such offsetting was bereft of legal basis. Aggrieved
thereby, these companies now
seek reconsideration and in support thereof clearly manifest their intent to
make arrangements for the remittance to the Office of Energy Affairs of the
amount of collections equivalent to what has been previously offset, provided that this
Commission authorizes the Office
of Energy Affairs to prepare the corresponding checks representing
reimbursement from the OPSF. It is
alleged that the implementation of such an arrangement, whereby the remittance
of collections due to the OPSF and the reimbursement of claims from the Fund
shall be made within a period of not more than one week from each other, will
benefit the Fund and not unduly jeopardize the continuing daily cash
requirements of these firms.
Upon a circumspect evaluation of the circumstances herein
obtaining, this Commission perceives no further objectionable feature in the
proposed arrangement, provided that 15% of whatever amount is due from the Fund
is retained by the Office of Energy Affairs, the same to be answerable for
suspensions or disallowances, errors or discrepancies which may be noted in the
course of audit and surcharges for late remittances without prejudice to
similar future retentions to answer for any deficiency in such surcharges, and
provided further that no offsetting of remittances and reimbursements for the
current and ensuing years shall be allowed.”
Pursuant to this decision, the COA, on
18 August 1989, sent the following letter to Executive Director Wenceslao R. De
la Paz of the Office of Energy Affairs:[12]
“Dear Atty. dela Paz:
Pursuant to the Commission
on Audit Decision No. 921 dated June 7, 1989, and based on our initial
verification of documents submitted to us by your Office in support of Caltex
(Philippines), Inc. offsets (sic) for the year 1986 to May 31, 1989, as well as
its outstanding claims against the Oil Price Stabilization Fund (OPSF) as of
May 31, 1989, we are pleased to inform your Office that Caltex (Philippines),
Inc. shall be required to remit to OPSF an amount of P1,505,668,906,
representing remittances to the OPSF which were offset against its claims reimbursements
(net of unsubmitted claims). In
addition, the Commission hereby authorize (sic) the Office of Energy Affairs
(OEA) to cause payment of P1,959,182,612 to Caltex, representing claims
initially allowed in audit, the details of which are presented hereunder: x x x
As presented in the foregoing computation the disallowances
totalled P387,683,535, which included P130,420,235 representing those claims
disallowed by OEA, details of which is (sic) shown in Schedule 1 as summarized
as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
The reasons for the disallowances are discussed hereunder:
a. Recovery of Financing Charges
Review of the provisions of P.D. 1596 as amended by E.O. 137 seems
to indicate that recovery of financing charges by oil companies is not among
the items for which the OPSF may be utilized. Therefore, it is our view that recovery of financing charges has no
legal basis. The mechanism for such
claims is provided in DOF Circular 1-87.
b. Product Sales – Sales to International
Vessels/Airlines
BOE Resolution No. 87-01 dated February 7, 1987 as implemented by
OEA Order No. 87-03-095 indicating that (sic) February 7, 1987 as the
effectivity date that (sic) oil companies should pay OPSF impost on export
sales of petroleum products. Effective
February 7, 1987 sales to international vessels/airlines should not be included
as part of its domestic sales. Changing
the effectivity date of the resolution from February 7, 1987 to October 20,
1987 as covered by subsequent ERB Resolution No. 88-12 dated November 18, 1988
has allowed Caltex to include in their domestic sales volumes to international
vessels/airlines and claim the corresponding reimbursements from OPSF during
the period. It is our opinion that the
effectivity of the said resolution should be February 7, 1987.
c. Inventory losses – Settlement of Ad
Valorem
We reviewed the system of handling Borrow and Loan (BLA)
transactions including the related BLA, agreement, as they affect the claims
for reimbursements of ad valorem taxes. We observed that oil companies immediately settle ad valorem taxes
for BLA transaction (sic). Loan
balances therefore are not tax paid inventories of Caltex subject to
reimbursements but those of the borrower. Hence, we recommend reduction of the claim for July, August, and
November, 1987 amounting to P14,034,786.
d. Sales to Atlas/Marcopper
LOI No. 1416 dated July 17, 1984 provides that `I hereby order and
direct the suspension of payment of all taxes, duties, fees, imposts and other
charges whether direct or indirect due and payable by the copper mining
companies in distress to the national and local governments.’ It is our opinion that LOI 1416 which
implements the exemption from payment of OPSF imposts as effected by OEA has no
legal basis.
Furthermore, we wish to emphasize that payment to Caltex (Phil.)
Inc., of the amount as herein authorized shall be subject to availability of
funds of OPSF as of May 31, 1989 and applicable auditing rules and
regulations. With regard to the
disallowances, it is further informed that the aggrieved party has 30 days
within which to appeal the decision of the Commission in accordance with law.”
On 8 September 1989, petitioner filed an Omnibus Request for the
Reconsideration of the decision based on the following grounds:[13]
“A) COA-DISALLOWED CLAIMS ARE AUTHORIZED UNDER
EXISTING RULES, ORDERS, RESOLUTIONS, CIRCULARS ISSUED BY THE DEPARTMENT OF
FINANCE AND THE ENERGY REGULATORY BOARD PURSUANT TO EXECUTIVE ORDER NO. 137.
x x x
B) ADMINISTRATIVE INTERPRETATIONS IN THE COURSE
OF EXERCISE OF EXECUTIVE POWER BY DEPARTMENT OF FINANCE AND ENERGY REGULATORY
BOARD ARE LEGAL AND SHOULD BE RESPECTED AND APPLIED UNLESS DECLARED NULL AND
VOID BY COURTS OR REPEALED BY LEGISLATION.
x X X
C) LEGAL BASIS FOR RETENTION OF OFFSET ARRANGEMENT,
AS AUTHORIZED BY THE EXECUTIVE BRANCH OF GOVERNMENT, REMAINS VALID.”
x x x
On 6 November 1989, petitioner filed with the COA a Supplemental
Omnibus Request for Reconsideration. [14]
On 16 February 1990, the COA, with Chairman Domingo taking no
part and with Commissioner Fernandez dissenting in part, handed down Decision
No. 1171 affirming the disallowance for recovery of financing charges,
inventory losses, and sales to MARCOPPER and ATLAS, while allowing the recovery
of product sales or those arising from export sales.[15]
Decision No. 1171 reads as follows:
“Anent the recovery of financing charges, you contend
that Caltex Phil. Inc. has the authority to recover financing charges from the
OPSF on the basis of Department of Finance (DOF) Circular 1-87, dated February
18,1987, which allowed oil companies to ‘recover cost of financing working
capital associated with crude oil shipments,’ and provided a schedule of
reimbursement in terms of peso per barrel. It appears that on November 6, 1989, the DOF issued a memorandum to the
President of the Philippines explaining the nature of these financing charges
and justifying their reimbursement as follows:
`As part of your program to promote economic recovery, … oil
companies (were authorized) to refinance their imports of crude oil and
petroleum products from the normal trade credit of 30 days up to 360 days from
date of loading Conformably …, the oil companies deferred their foreign
exchange remittances for purchases by refinancing their import bills from the
normal 30-day payment term up to the desired 360 days. This refinancing of importations carried
additional costs (financing charges) which then became, due to government
mandate, an inherent part of the cost of the purchases of our country’s oil
requirement.’
We beg to disagree with such contention. The justification that financing charges increased oil costs and
the schedule of reimbursement rate in peso per barrel (Exhibit 1) used to
support alleged increase (sic) were not validated in our independent inquiry. As manifested in Exhibit 2, using the same
formula which the DOF used in arriving at the reimbursement rate but using
comparable percentages instead of pesos, the ineluctable conclusion is that the
oil companies are actually gaining rather than losing from the extension of
credit because such extension enables them to invest the collections in
marketable securities which have much higher rates than those they incur due to
the extension. The Data we used were
obtained from CPI (CALTEX) Management and can easily be verified from our
records.
With respect to product sales or those arising
from sales to international vessels or
airlines, x x x, it is believed that export sales (product sales) are
entitled to claim refund from the OPSF.
As regard your claim for underrecovery arising from
inventory losses, x x x It is the considered view of this
Commission that the OPSF is not liable to refund such surtax on inventory
losses because these are paid to BIR and not to OPSF, in view of which CPI
(CALTEX) should seek refund from BIR. x x x.
Finally, as regards the sales to Atlas and
Marcopper, it is represented that you are entitled to claim recovery
from the OPSF pursuant to LOI 1416 issued on July 17, 1984, since these copper mining
companies did not pay CPI (CALTEX) and OPSF imposts which were added to the
selling price.
Upon a circumspect evaluation, this Commission believes and so
holds that the CPI (CALTEX) has no authority to claim reimbursement for this
uncollected OPSF impost because LOI 1416 dated July 17, 1984, which exempts
distressed mining companies from ‘all taxes, duties, import fees and other
charges’ was issued when OPSF was not yet in existence and could not have
contemplated OPSF imposts at the time of its formulation. Moreover, it is evident that OPSF was not
created to aid distressed mining companies but rather to help the domestic oil
industry by stabilizing oil prices.”
Unsatisfied with the decision, petitioner filed on 28 March 1990
the present petition wherein it imputes to the COA the commission of the
following errors:[16]
“I
RESPONDENT COMMISSION ERRED IN DISALLOWING RECOVERY OF FINANCING
CHARGES FROM THE OPSF.
II
RESPONDENT COMMISSION ERRED IN DISALLOWING CPI’s[17]
CLAIM FOR REIMBURSEMENT OF UNDERRECOVERY ARISING FROM SALES TO NPC.
III
RESPONDENT COMMISSION ERRED IN DENYING CPI’s CLAIMS FOR
REIMBURSEMENT ON SALES TO ATLAS AND MARCOPPER.
IV
RESPONDENT COMMISSION ERRED IN PREVENTING CPI FROM EXERCISING ITS
LEGAL RIGHT TO OFFSET ITS REMITTANCES AGAINST ITS REIMBURSEMENT VIS-A-VIS THE
OPSF.
V
RESPONDENT COMMISSION ERRED IN DISALLOWING CPI’s CLAIMS WHICH ARE
STILL PENDING RESOLUTION BY (SIC) THE OEA AND THE DOF.”
In the Resolution of 5 April 1990, this Court required the respondents
to comment on the petition within ten (10) days from notice.[18]
On 6 September 1990, respondents COA and Commissioners Fernandez
and Cruz, assisted by the Office of the Solicitor General, filed their Comment.[19]
This Court resolved to give due course to this petition on 30 May
1991 and required the parties to file their respective Memoranda within twenty
(20) days from notice.[20]
In a Manifestation dated 18 July 1991, the Office of the
Solicitor General prays that the Comment filed on 6 September 1990 be
considered as the Memorandum for respondents.[21]
Upon the other hand, petitioner filed its Memorandum on 14 August
1991.
I. Petitioner dwells
lengthily on its first assigned error contending, in support thereof, that:
(1) In view of the expanded role of the OPSF pursuant to Executive
Order No. 137, which added a second purpose, to wit:
“2) To reimburse the oil companies for possible cost underrecovery incurred
as a result of the reduction of domestic prices of petroleum products. The magnitude of the underrecovery, if any,
shall be determined by the Ministry of Finance. ‘Cost underrecovery shall include the following:
i.
Reduction in oil company take as directed by the Board of
Energy without the corresponding reduction in the landed cost of oil inventories
in the possession of the oil companies at the time of the price change;
ii.
Reduction in internal ad valorem taxes as a result of
foregoing government mandated price reductions;
iii.
Other factors as may be determined by the Ministry
of Finance to result in cost underrecovery.”
the “other factors”
mentioned therein that may be determined by the Ministry (now Department) of
Finance may include financing charges for “in essence, financing charges
constitute unrecovered cost of acquisition of crude oil incurred by the oil
companies,” as explained in the 6 November 1989 Memorandum to the President of
the Department of Finance; they “directly translate to cost underrecovery in
cases where the money market placement rates decline and at the same time the
tax on interest income increases. The relationship is such that the presence
of underrecovery or overrecovery is directly dependent on the amount and extent of financing charges.”
(2) The claim for recovery of financing charges
has clear legal and factual basis; it was filed on the basis of Department of
Finance Circular No. 1-87, dated 18 February 1987, which provides:
“To allow oil companies to recover the costs of financing working capital associated with crude
oil shipments, the following guidelines on the utilization of the Oil Price
Stabilization Fund pertaining to the payment of the foregoing (sic) exchange
risk premium and recovery of financing charges will be implemented:
1. The OPSF foreign exchange premium shall be
reduced to a flat rate of one (1) percent for the first (6) months and 1/32 of
one percent per month thereafter up to a maximum period of one year, to be
applied on crude oil’ shipments from January 1, 1987. Shipments with outstanding financing as of January 1, 1987 shall
be charged on the basis of the fee applicable to the remaining period of
financing.
2. In addition, for shipments loaded after
January 1987, oil companies shall be allowed to recover financing charges
directly from the OPSF per barrel of crude oil based on the following schedule:
Financing
Period Reimbursement
Rate
Pesos per Barrel
Less than 180 days None
180 days to 239
days 1.90
241 (sic) days to
299 4.02
300 days to 369
(sic) days 6.16
360 days or more 8.28
The above rates shall be subject to review every sixty days.”[22]
Pursuant to this circular, the Department of Finance, in its
letter of 18 February 1987, advised the Office of Energy Affairs as follows:
“HON. VICENTE T. PATERNO
Deputy Executive Secretary
For Energy Affairs
Office of the President
Makati, Metro Manila
Dear Sir:
This refers to the letters of the Oil
Industry dated December 4, 1986 and February 5, 1987 and subsequent discussions
held by the Price Review committee on February 6, 1987.
On the basis of the representations made, the Department of Finance
recognizes the necessity to reduce the foreign exchange risk premium accruing
to the Oil Price Stabilization Fund (OPSF). Such a reduction would allow the industry to recover partly associated
financing charges on crude oil imports. Accordingly, the OPSF foreign exchange risk fee shall be reduced to a
flat charge of 1% for the first six (6) months plus 1/32% of 1% per month
thereafter up to a maximum period of one year, effective January 1, 1987. In addition, since the prevailing company
take would still leave unrecovered financing charges, reimbursement may be
secured from the OPSF in accordance with the provisions of the attached Department
of Finance circular.”[23]
Acting on this letter, the OEA issued on 4 May 1987 Order No.
87-05-096 which contains the guidelines for the computation of the foreign
exchange risk fee and the recovery of financing charges from the OPSF, to wit:
“B.
FINANCE CHARGES
1. Oil companies shall be allowed to recover
financing charges directly from the OPSF for both crude and product shipments
loaded after January 1, 1987 based
on the following rates:
Financing
Period Reimbursement
Rate
(PBbl.)
Less than 180 days None
180 days to 239
days 1.90
240 days to 229
(sic) days 4.02
300 days to 359
days 6.16
360 days to more 8.28
2. The above rates shall be subject to review every sixty days.”[24]
Then on 22 November 1988, the Department of Finance issued
Circular No. 4-88 imposing further guidelines on the recoverability of
financing charges, to wit:
“Following are the supplemental rules to Department of Finance
Circular No. 1-87 dated February 18, 1987 which allowed the recovery of
financing charges directly from the Oil Price Stabilization Fund. (OPSF):
1. The claim for reimbursement shall be on a per
shipment basis.
2. The claim shall be filed with the Office of
Energy Affairs together with the claim on peso cost differential for a
particular shipment and duly certified supporting documents provided for under
Ministry of Finance No. 11-85.
3. The reimbursement shall be on the form of
reimbursement certificate (Annex A) to be issued by the Office of Energy
Affairs. The said certificate may be
used to offset against amounts payable to the OPSF. The oil companies may also redeem said certificates in cash if
not utilized, subject to availability of funds.”[25]
The OEA disseminated this Circular to all
oil companies in its Memorandum Circular No. 88-12-017.[26]
The COA can neither ignore these issuances nor formulate its own
interpretation of the laws in the light of the determination of executive
agencies. The determination by the
Department of Finance and the OEA that financing charges are recoverable from
the OPSF is entitled to great weight and consideration.[27] The function of the
COA, particularly in the matter of allowing or disallowing certain
expenditures, is limited to the promulgation of accounting and auditing rules
for, among others, the disallowance of irregular, unnecessary, excessive,
extravagant, or unconscionable expenditures, or uses of government funds and
properties.[28]
(3) Denial of petitioner’s claim for reimbursement
would be inequitable. Additionally,
COA’s claim that petitioner is gaining, instead of losing, from the extension
of credit, is belatedly raised and not supported by expert analysis.
In impeaching the validity of petitioner’s assertions, the
respondents argue that:
1. The Constitution gives the COA discretionary
power to disapprove irregular or unnecessary government expenditures and as the
monetary claims of petitioner are not allowed by law, the COA acted within its
jurisdiction in denying them;
2. P.D. No. 1956 and E.O. No. 137 do not allow
reimbursement of financing charges from the OPSF;
3. Under the principle of ejusdem generis,
the “other factors” mentioned in the second purpose of the OPSF
pursuant to E.O. No. 137 can only include “factors which are of the same nature
or analogous to those enumerated;”
4. In allowing reimbursement of financing
charges from OPSF, Circular No. 1-87 of the Department of Finance violates P.D.
No. 1956 and E.O. No. 137; and
5. Department of Finance rules and regulations
implementing P.D. No. 1956 do not likewise allow reimbursement of financing
charges.[29]
We find no merit in the first assigned error.
As to the power of the COA, which must
first be resolved in view of its primacy, We find the theory of petitioner —
that such does not extend to the disallowance of irregular, unnecessary,
excessive, extravagant, or unconscionable expenditures, or use of government
funds and properties, but only to the promulgation of accounting and auditing
rules for, among others, such disallowance — to be untenable in the light of
the provisions of the 1987 Constitution and related laws.
Section 2, Subdivision D, Article IX
of the 1987 Constitution expressly provides:
“SECTION 2(1). The Commission
on Audit shall have the power, authority, and duty to examine, audit, and
settle all accounts pertaining to the revenue and receipts of, and expenditures
or uses of funds and property, owned or held in trust by, or pertaining to, the
Government, or any of its subdivisions, agencies, or instrumentalities,
including government-owned and controlled corporations with original charters,
and on a post-audit basis: (a) constitutional bodies, commissions and offices
that have been granted fiscal autonomy under this Constitution; (b) autonomous
state colleges and universities; (c) other government-owned or controlled
corporations and their subsidiaries; and (d) such non-governmental entities
receiving subsidy or equity, directly or indirectly, from or through the
government, which are required by law or the granting institution to submit to
such audit as a condition of subsidy or equity. However, where the internal control system of the audited
agencies is inadequate, the Commission may adopt such measures, including
temporary or special pre-audit, as are necessary and appropriate to correct the
deficiencies. It shall keep the general
accounts of the Government and, for such period as may be provided by law,
preserve the vouchers and other supporting papers pertaining thereto.
(2) The Commission shall
have exclusive authority, subject to the limitations in this Article, to define
the scope of its audit and examination, establish the techniques and methods
required therefor, and promulgate accounting and auditing rules and
regulations, including those for the prevention and disallowance of irregular,
unnecessary, excessive, extravagant, or unconscionable expenditures, or uses of
government funds and properties.”
These present powers, consistent with the declared independence
of the Commission,[30]
are broader and more extensive than that conferred by the 1973
Constitution. Under the latter, the
Commission was empowered to:
“Examine, audit, and settle, in accordance with law and
regulations, all accounts pertaining to the revenues, and receipts of, and
expenditures or uses of funds and property, owned or held in trust by, or
pertaining to, the Government, or any of its subdivisions, agencies, or
instrumentalities including government-owned or controlled corporations; keep
the general accounts of the Government and, for such period as may be provided
by law, preserve the vouchers pertaining thereto; and promulgate accounting and
auditing rules and regulations including those for the prevention of irregular,
unnecessary, excessive, or extravagant expenditures or uses of funds and
property.”[31]
Upon the other hand, under the 1935 Constitution, the power and
authority of the COA’s precursor, the General Auditing Office, were,
unfortunately, limited; its very role was markedly passive. Section 2 of
Article XI thereof provided:
“SECTION 2. The Auditor
General shall examine, audit, and settle all accounts pertaining to the
revenues and receipts from whatever source, including trust funds derived from
bond issues; and audit, in accordance with law and administrative regulations,
all expenditures of funds or property pertaining to or held in trust by the
Government or the provinces or municipalities thereof. He shall keep the general accounts of the
Government and preserve the vouchers pertaining thereto. It shall be the duty of the Auditor General
to bring to the attention of the proper administrative officer expenditures of
funds or property which, in his opinion, are irregular, unnecessary, excessive,
or extravagant. He shall also perform
such other functions as may be prescribed by law.”
As clearly shown above, in respect to irregular, unnecessary,
excessive or extravagant expenditures or uses of funds, the 1935 Constitution
did not grant the Auditor General the power to issue rules and regulations to
prevent the same. His was merely to
bring that matter to the attention of the proper administrative officer.
The ruling on this particular point, quoted by petitioner from
the cases of Guevarra vs. Gimenez[32]
and Ramos vs. Aquino,[33]
are no longer controlling as the two (2) were decided in the light of the
1935 Constitution.
There can be no doubt, however, that the audit power of the
Auditor General under the 1935 Constitution and the Commission on Audit under
the 1973 Constitution authorized them to disallow illegal expenditures
of funds or uses of funds and property. Our present Constitution retains that same power and authority, further
strengthened by the definition of the COA’s general jurisdiction in Section 26
of the Government Auditing Code of the Philippines[34]
and Administrative Code of 1987.[35]
Pursuant to its power to promulgate accounting and auditing rules and
regulations for the prevention of irregular, unnecessary, excessive or
extravagant expenditures or uses of funds,[36]
the COA promulgated on 29 March 1977 COA Circular No. 77-55. Since the COA is responsible for the
enforcement of the rules and regulations, it goes without saying that failure
to comply with them is a ground for disapproving the payment of the proposed
expenditure. As observed by one of the
Commissioners of the 1986 Constitutional Commission, Fr. Joaquin G. Bernas:[37]
“It should be noted, however, that whereas under Article XI,
Section 2, of the 1935 Constitution the Auditor General could not correct ‘irregular,
unnecessary, excessive or extravagant’ expenditures of public funds but could
only ‘bring [the matter] to the attention of the proper administrative
officer.’ under the 1987 Constitution, as also under the 1973 Constitution, the
Commission on Audit can ‘promulgate accounting and auditing rules and
regulations including those for the prevention and disallowance of irregular,
unnecessary, excessive; extravagant, or unconscionable expenditures or uses of
government funds and properties.’ Hence, since the Commission on Audit must ultimately be responsible for
the enforcement of these rules and regulations, the failure to comply with
these regulations can be a ground for disapproving the payment of a proposed
expenditure.”
Indeed,
when the framers of the last two (2) Constitutions conferred upon the COA a
more active role and invested it with broader and more extensive powers,
they did not intend merely to make the COA a toothless tiger, but rather
envisioned a dynamic, effective, efficient and independent watchdog of the
Government.
The issue of the financing charges boils down to the validity of
Department of Finance Circular No. 1-87, Department of Finance Circular No.
4-88 and the implementing circulars of the OEA, issued pursuant to Section 8,
P.D. No. 1956, as amended by E.O. No. 137, authorizing it to determine “other
factors” which may result in cost underrecovery and a consequent reimbursement
from the OPSF.
The Solicitor General maintains that, following the doctrine of ejusdem
generis, financing charges are not included in “cost underrecovery”
and, therefore, cannot be considered as one of the “other factors.” Section 8
of P.D. No. 1956, as amended by E.O. No. 137, does not explicitly define what
“cost underrecovery” is. It merely
states what it includes. Thus:
“x x x ‘Cost underrecovery’ shall include the following:
i.
Reduction in oil company take as directed by the Board of
Energy without the corresponding reduction in the landed cost of oil
inventories in the possession of the oil companies at the time of the price
change;
ii.
Reduction in internal ad valorem taxes as a result of
foregoing government mandated price reductions;
iii.
Other factors as may be determined by the Ministry of Finance
to result in cost underrecovery.”
These “other factors” can include only
those which are of the same class or nature as the two specifically enumerated
in subparagraphs (i) and (ii). A common
characteristic of both is that they are in the nature of government mandated
price reductions. Hence, any other
factor which seeks to be a part of the enumeration, or which could qualify as a
cost underrecovery, must be of the same class or nature as those specifically
enumerated.
Petitioner, however, suggests that E.O. No. 137 intended to grant
the Department of Finance broad and unrestricted authority to determine or
define “other factors.”
Both views are unacceptable to this Court.
The rule of ejusdem generis states that “[w]here general
words follow an enumeration of persons or things, by words of a particular and
specific meaning, such general words are not to be construed in their widest
extent, but are held to be as applying only to persons or things of the same
kind or class as those specifically mentioned.”[38]
A reading of subparagraphs (i) and (ii) easily discloses that they do not have
a common characteristic. The first
relates to price reduction as directed by the Board of Energy while the second
refers to reduction in internal ad valorem taxes. Therefore, subparagraph (iii) cannot be
limited by the enumeration in these subparagraphs. What should be considered for purposes of determining the “other
factors” in subparagraph (iii) is the first sentence of paragraph (2) of
the Section which explicitly allows cost underrecovery only if such were
incurred as a result of the reduction of
domestic prices of petroleum products.
Although petitioner’s financing losses, if indeed incurred, may
constitute cost under recovery in the sense that such were incurred as a result
of the inability to fully offset financing expenses from yields in money market
placements, they do not, however, fall under the foregoing provision of P.D.
No. 1956, as amended, because the same did not result from the reduction of the
domestic price of petroleum products. Until paragraph (2), Section 8 of the decree, as amended, is further
amended by Congress, this Court can do nothing. The duty of this Court is not to legislate, but to apply or
interpret the law. Be that as it may,
this Court wishes to emphasize that as the facts in this case have shown, it
was at the behest of the Government that petitioner refinanced its oil import
payments from the normal 30-day trade credit to a maximum of 360 days. Petitioner could be correct in its assertion
that owing to the extended period for payment, the financial institution which
refinanced said payments charged a higher interest, thereby resulting in higher
financing expenses for the petitioner. It would appear then that equity considerations dictate that petitioner
should somehow be allowed to recover its financing losses, if any, which may
have been sustained because it accommodated the request of the Government. Although under Section 29 of the National
Internal Revenue Code such losses may be deducted from gross income, the effect
of that loss would be merely to reduce its taxable income, but not to actually
wipe out such losses. The
Government then may consider some positive measures to help petitioner and
others similarly situated to obtain substantial relief. An amendment, as aforestated, may then be in
order.
Upon the other hand, to accept petitioner’s theory of
“unrestricted authority” on the part of the Department of Finance to determine
or define “other factors” is to uphold an undue delegation of legislative
power, it clearly appearing that the subject provision does not provide any
standard for the exercise of the authority. It is a fundamental rule that delegation of legislative power may be
sustained only upon the ground that some standard for its exercise is provided
and that the legislature, in making the delegation, has prescribed the manner
of the exercise of the delegated authority.[39]
Finally, whether petitioner gained or lost by reason of the
extensive credit is rendered irrelevant by reason of the foregoing
disquisitions. It may nevertheless be
stated that petitioner failed to disprove COA’s claim that it had in fact
gained in the process. Otherwise
stated, petitioner failed to sufficiently show that it incurred a loss. Such being the case, how can petitioner
claim for reimbursement? It cannot have its cake and eat it too.
II. Anent the claims
arising from sales to the National Power Corporation, We find for the
petitioner. The respondents themselves
admit in their Comment that underrecovery arising from sales to NPC are
reimbursable because NPC was granted full exemption from the payment of taxes;
to prove this, respondents trace the laws providing for such exemption.[40]
The last law cited is the Fiscal Incentives Regulatory Board’s Resolution No.
17-87 of 24 June 1987 which provides, in part, “that the tax and duty exemption
privileges of the National Power Corporation, including those pertaining to its
domestic purchases of petroleum and petroleum products … are restored
effective March 10, 1987.” In a Memorandum issued on 5 October 1987 by the
Office of the President, NPC’s tax exemption was confirmed and approved.
Furthermore, as pointed out by respondents, the intention to
exempt sales of petroleum products to the NPC is evident in the recently passed
Republic Act No. 6952 establishing the Petroleum Price Standby Fund to support
the OPSF.[41]
The pertinent part of Section 2, Republic Act No. 6952 provides:
“SECTION 2. Application of
the Fund shall be subject to the following conditions:
(1) That the Fund shall
be used to reimburse the oil companies for (a) cost increases of imported crude
oil and finished petroleum products resulting from foreign exchange rate
adjustments and/or increases in world market prices of crude oil; (b) cost
underrecovery incurred as a result of
fuel oil sales to the National Power
Corporation (NPC); and (c) other cost underrecoveries incurred as
may be finally decided by the Supreme Court; x x x”
Hence, petitioner can recover its claim arising from sales of petroleum
products to the National Power Corporation.
III. With respect to its
claim for reimbursement on sales to ATLAS and MARCOPPER, petitioner relies on
Letter of Instruction (LOI) 1416, dated 17 July 1984, which ordered the
suspension of payments of all taxes, duties, fees and other charges, whether
direct or indirect, due and payable by the copper mining companies in distress
to the national government. Pursuant to
this LOI, then Minister of Energy, Hon. Geronimo Velasco, issued Memorandum
Circular No. 84-11-22 advising the oil companies that Atlas Consolidated Mining
Corporation and Marcopper Mining Corporation are among those declared to be in
distress.
In denying the claims arising from sales to ATLAS and MARCOPPER,
the COA, in its 18 August 1989 letter to Executive Director Wenceslao R.
de la Paz, states that “it is our opinion that LOI 1416 which implements the
exemption from payment of OPSF imposts as effected by OEA has no legal basis;” [42]
in its Decision No.1171, it ruled that “the CPI (CALTEX) (Caltex) has no
authority to claim reimbursement for this uncollected impost because LOI 1416
dated July 17, 1984, … was issued when OPSF was not yet in existence and
could not have contemplated OPSF imposts at the time of its formulation.”[43]
It is further stated that: “Moreover, it is evident that OPSF was not created
to aid distressed mining companies but rather to help the domestic oil industry
by stabilizing oil prices.”
In sustaining COA’s stand, respondents
vigorously maintain that LOI 1416 could not have intended to exempt said
distressed mining companies from the payment of OPSF dues for the following
reasons:
“a. LOI 1416 granting the alleged exemption was
issued on July 17, 1984. P.D. 1956 creating the OPSF was promulgated on October
10, 1984, while E.O. 137, amending P.D. 1956, was issued on February 25, 1987.
b. LOI 1416 was issued in 1984 to assist
distressed copper mining companies in line with the government’s effort to
prevent the collapse of the copper industry. P.D. 1956, as amended, was issued
for the purpose of ‘minimizing frequent price changes brought about by exchange
rate adjustments and/or changes in world market prices of crude oil and
imported petroleum products’; and
c. LOI 1416 caused the ‘suspension of all
taxes, duties, fees, imposts and other charges, whether direct or indirect, due
and payable by the copper mining companies in distress to the National and
Local Governments …’ On the other hand, OPSF dues are not payable by (sic)
distressed copper companies but by oil companies. It is to be noted that the copper mining companies do not pay
OPSF dues. Rather, such imposts are
built in or already incorporated in the prices of oil products.”[44]
Lastly, respondents allege that while LOI 1416 suspends the
payment of taxes by distressed mining companies, it does not accord petitioner
the same privilege with respect to its obligation to pay OPSF dues.
We concur with the disquisitions of the respondents. Aside from such reasons, however, it is
apparent that LOI 1416 was never published in the Official Gazette[45]
as required by Article 2 of the Civil Code, which reads:
“Laws shall take effect after fifteen days following the completion
of their publication in the Official Gazette, unless it is otherwise provided.
x x x”
In applying said provision, this Court ruled in the case of Tañada
vs. Tuvera: [46]
“WHEREFORE, the Court hereby orders respondents to publish in the
Official Gazette all unpublished presidential issuances which are of general
application, and unless so published they shall have no binding force and
effect.”
Resolving the motion for reconsideration of said decision, this
Court, in its Resolution promulgated on 29 December 1986,[47]
ruled:
“We hold therefore that all statutes, including those of local
application and private laws, shall be published as a condition for their
effectivity, which shall begin fifteen days after publication unless a
different effectivity date is fixed by the legislature.
Covered by this rule are presidential decrees and executive orders
promulgated by the President in the exercise of legislative powers whenever the
same are validly delegated by the legislature or, at present, directly
conferred by the Constitution. Administrative rules and regulations must also be published if their
purpose is to enforce or implement existing laws pursuant also to a valid
delegation.
x x x
WHEREFORE, it is hereby declared that all laws as above defined
shall immediately upon their approval, or as soon thereafter as possible, be
published in full in the Official Gazette, to become effective only after
fifteen days from their publication, or on another date specified by the
legislature, in accordance with Article 2 of the Civil Code.”
LOI 1416 has, therefore, no binding force or effect as it was
never published in the Official Gazette after its issuance or at any time after
the decision in the abovementioned cases.
Article 2 of the Civil Code was, however, later amended by
Executive Order No. 200, issued on 18 June 1987. As amended, the said provision now reads:
“Laws shall take effect after fifteen days following the completion
of their publication either in the Official Gazette or in a newspaper of
general circulation in the Philippines, unless it is otherwise provided.”
We are not aware of the publication of LOI 1416 in any
newspaper of general circulation pursuant to Executive Order No. 200.
Furthermore, even granting arguendo that LOI 1416
has force and effect, petitioner’s claim must still fail. Tax exemptions as a general rule are
construed strictly against the grantee and liberally in favor of the taxing
authority.[48]
The burden of proof rests upon the party claiming exemption to prove that it is
in fact covered by the exemption so claimed. The party claiming exemption must therefore be expressly mentioned in
the exempting law or at least be within its purview by clear legislative
intent.
In the case at bar, petitioner failed to prove that it is
entitled, as a consequence of its sales to ATLAS and MARCOPPER, to claim
reimbursement from the OPSF under LOI 1416. Though LOI 1416 may suspend the payment of taxes by copper Mining
companies, it does not give petitioner the same privilege with respect to the
payment of OPSF dues.
IV. As to COA’s disallowance of the amount of P130,420,235.00,
petitioner maintains that the Department of Finance has still to issue a final
and definitive ruling thereon; accordingly, it was premature for COA to
disallow it. By doing so, the latter
acted beyond its jurisdiction.[49]
Respondents, on the other hand, contend that said amount was already disallowed
by the OEA for failure to substantiate it.[50]
In fact, when OEA submitted the claims of petitioner for pre-audit, the
abovementioned amount was already excluded.
An examination of the records of this case shows that petitioner
failed to prove or substantiate its contention that the amount of
P130,420,235.00 is still pending before the OEA and the DOF. Additionally, We find no reason to doubt the
submission of respondents that said amount has already been passed upon by the
OEA. Hence, the ruling of respondent
COA disapproving said claim must be upheld.
V. The last issue to be resolved in this case is whether or not
the amounts due to the OPSF from petitioner may be offset against petitioner’s
outstanding claims from said fund. Petitioner contends that it should be allowed to offset its claims from
the OPSF against its contributions to the fund as this has been allowed in the
past, particularly in the years 1987 and 1988.[51]
Furthermore, petitioner cites, as bases for offsetting, the
provisions of the New Civil Code on compensation and Section 21, Book V, Title
I-B of the Revised Administrative Code which provides for “Retention of Money
for Satisfaction of Indebtedness to Government.”[52]
Petitioner also mentions communications from the Board of Energy and the
Department of Finance that supposedly authorize compensation.
Respondents, on the other hand, citing Francia vs.
IAC and Fernandez,[53]
contend that there can be no offsetting of taxes against the claims that a taxpayer
may have against the government, as taxes do not arise from contracts or depend
upon the will of the taxpayer, but are imposed by law. Respondents also allege that petitioner’s
reliance on Section 21, Book V, Title I-B of the Revised Administrative Code is
misplaced because “while this provision empowers the COA to withhold payment of
a government indebtedness to a person who is also indebted to the government
and apply the government indebtedness to the satisfaction of the obligation of
the person to the government, like authority or right to make compensation is
not given to the private person.”[54]
The reason for this, as stated in Commissioner of Internal
Revenue vs. Algue, Inc.,[55]
is that money due the government, either in the form of taxes or other dues, is
its lifeblood and should be collected without hindrance. Thus, instead of giving petitioner a reason
for compensation or set-off, the Revised Administrative Code makes it the
respondents’ duty to collect petitioner’s indebtedness to the OPSF.
Refuting respondents’ contention, petitioner claims that the
amounts due from it do not arise as a result of taxation because “P.D. 1956, as
amended, did not create a source of taxation; it instead established a special
fund…,”[56]
and that the OPSF contributions do not go to the general fund of the
state and are not used for public purpose, i.e., not for the support of the
government, the administration of law, or the payment of public expenses. This alleged lack of a public purpose behind
OPSF exactions distinguishes such from a tax. Hence, the ruling in the Francia case is inapplicable.
Lastly, petitioner cites R.A. No. 6952 creating the Petroleum
Price Standby Fund to support the OPSF; the said law provides in part that:
“SECTION 2. Application of
the fund shall be subject to the following conditions:
x x x
(3) That no amount
of the Petroleum Price Standby Fund shall be used to pay any oil company which
has an outstanding obligation to the Government without said obligation being
offset first, subject to the requirements of compensation or offset under the
Civil Code.”
We find no merit in petitioner’s contention that the OPSF
contributions are not for a public purpose because they go to a special fund of
the government. Taxation is no longer
envisioned as a measure merely to raise revenue to support the existence of the
government; taxes may be levied with a regulatory purpose to provide means for
the rehabilitation and stabilization of a threatened industry which is affected
with public interest as to be within the police power of the’ state.[57]
There can be no doubt that the oil industry is greatly imbued with public
interest as it vitally affects the general welfare. Any unregulated increase in oil prices could hurt the lives of a
majority of the people and cause economic crisis of untold proportions. It would have a chain reaction in terms of,
among others, demands for wage increases and upward spiralling of the cost of
basic commodities. The stabilization
then of oil prices is one of prime concern which the state, via its police
power, may properly address.
Also, P.D. No. 1956, as amended
by E.O. No. 137, explicitly provides that the source of OPSF is taxation. No amount of semantical juggleries could dim
this fact.
It is settled that a taxpayer may not offset taxes due from the
claims that he may have against the government.[58]
Taxes cannot be the subject of compensation because the government and taxpayer
are not mutually creditors and debtors of each other and a claim for taxes is
not such a debt, demand, contract or judgment as is allowed to be set-off.[59]
We may even further state that technically, in respect to the
taxes for the OPSF, the oil companies merely act as agents for the Government
in the latter’s collection since the taxes are, in reality, passed unto the
end-users — the consuming public. In
that capacity, the petitioner, as one of such companies, has the primary
obligation to account for and remit the taxes collected to the administrator of
the OPSF. This duty stems from the
fiduciary relationship between the two; petitioner certainly cannot be
considered merely as a debtor. In
respect, therefore, to its collection for the OPSF vis-a-vis its
claims for reimbursement, no compensation is likewise legally feasible. Firstly, the Government and the petitioner
cannot be said to be mutually debtors and creditors of each other. Secondly, there is no proof that
petitioner’s claim is already due and liquidated. Under Article 1279 of the Civil Code, in order that compensation
may be proper, it is necessary that:
(1)
each one of the obligors be bound principally, and that he be
at the same time a principal creditor of the other;
(2)
both debts consist in a sum of money, or if the things due are
consumable, they be of the same kind, and also of the same quality if the
latter has been stated;
(3)
the two (2) debts be due;
(4)
they be liquidated and demandable;
(5)
over neither of them there be any retention or controversy,
commenced by third persons and communicated in due time to the debtor.
That compensation had been the practice in the past can set no
valid precedent. Such a practice has no
legal basis. Lastly, R.A. No. 6952 does
not authorize oil companies to offset their claims against their OPSF
contributions. Instead, it prohibits
the government from paying any amount from the Petroleum Price Standby Fund to
oil companies which have outstanding obligations with the government, without
said obligation being offset first subject to the rules on compensation in the
Civil Code.
WHEREFORE, in view of the foregoing, judgment is hereby
rendered AFFIRMING the challenged decision of the Commission on Audit, except
that portion thereof disallowing petitioner’s claim for reimbursement of
underrecovery arising from sales to the National Power Corporation, which is
hereby allowed.
With costs against petitioner.
SO ORDERED.
Narvasa, C.J., Melencio-Herrera, Gutierrez, Jr., Paras,
Feliciano, Padilla, Bidin, Griño-Aquino, Medialdea, Regalado, Romero, and Nocon, JJ., concur.
Cruz and
Bellosillo, JJ., no part.
[1]
Petitioner explicitly states in the opening paragraph of the
petition that its petition is for review under Section 1, Rule 44 of the Rules
of Court.
[2]
Section 7 Subdivision A, Article IX; see also Section 35, Chapter 5, Subtitle
B, Title I, Book V, Administrative Code of 1987.
[3]
The Civil Service Commission, the Commission on Elections and the Commission on
Audit.
[4]
Land Bank of the Philippines vs. COA, 190 SCRA 154 [1990].
[5]
Rollo, 6-7.
[6]
Rollo, 65.
[7]
Id., 66.
[8]
Rollo, 67-68.
[9]
Id., 76.
[10]
Id., 77.
[11]
Rollo, 58-59.
[12]
Rollo, 60-62.
[13]
Rollo, 78-89.
[14]
Id., 89-90.
[15]Rollo,
53-56. Commissioner Fernandez is of the
opinion that petitioner should be allowed to recover financing charges stating;
“I find merit in claimants (sic)
reliance on and invocation of Department of Finance Circular No. 1-87, dated
February 18, 1987, in support of such claims. To my mind, the authority
embodied in such circular coupled with the justification therefor as set forth
by the Secretary of Finance in his letter of even date to the then Deputy
Secretary for Energy Affairs as well as the Memorandum for the President dated
November 6, 1989 from the Acting Secretary of Finance, alluded to and subjoined
herein, cannot but deserve full faith and credit. I perceive no compelling reason for this Commission to overturn
or disturb these pronouncements which treat of a policy matter the resolution
which (sic) appropriately pertains to the executive agency concerned, the
Department of Finance in this case.”
[16]
Rollo, 8-9.
[17]
Caltex Philippines, Inc. petitioner herein.
[18]
Op. cit., 124.
[19]
Rollo, 143-185.
[20]
Id., 188.
[21]
Id., 191.
[22]
Rollo, 23.
[23]
Rollo, 24-25.
[24]
Id., 25.
[25]
Rollo, 25-26.
[26]
Id., 26.
[27]
Citing Ramos vs. CIR, 21 SCRA 1282 [1967]; Sagun vs. PHHC, 162
SCRA 411 [1988]; Hijo Plantation, Inc. vs. Central Bank, 164 SCRA 192
[1988]; Beautifont, Inc. vs. Court of Appeals, 157 SCRA 481 [1988].
[28]
Citing Section 11, Book V. Administrative Code of 1987; Guevara vs.
Gimenez, 6 SCRA 807 [1962].
[29]
Rollo, 155-164.
[30]
Section 1, Subdivision A, Article IX.
[31]
Paragraph 1, Section 2, Subdivision D, Article XII.
[32]
Supra.
[33]
39 SCRA 641 [1971].
[34]
P.D. No. 1445.
[35]
Section 11, Chapter 4, Subtitle B, Book V.
[36]
The 1987 Constitution adds one (1) more category of such expenditure or
use — unconscionable.
[37]
Bernas, J., The Constitution of the Republic
of the Philippines; A Commentary, vol. II,
1988 ed., 372.
[38]
Smith Bell and Co., Ltd. vs. Register of Deeds of Davao, 96 Phil. 53
[1954], citing BLACK on Interpretation of Law. 2nd ed.,
203; see also Republic vs. Migrino, 189 SCRA 289 [1990].
[39]
Philippine Communications Satellite Corp. vs. Alcuaz, et al., 180 SCRA
218 [1989].
[40]
Rollo, 176-177.
[41]
Id.,184.
[42]
Rollo, 62; Annex “C”, 3.
[43]
Id., 56; Annex “A”.
[44]
Rollo, 174-176.
[45]
As verified from the National Printing Office. A certification to this effect, dated 19 November 1991, signed by
Heriberto Bacalla, Chief, Official Gazette Publication, of the National
Printing Office, is attached to the rollo.
[46]
136 SCRA 27 [1985].
[47]
146 SCRA 446 [1986].
[48]
CIR vs. Mitsuibishi Metal Corp., 181 SCRA 214 [1990]; CIR vs.
P.J. Kiener Co. Ltd., 65 SCRA 142 [1975].
[49]
Rollo, 49.
[50]
Id., 173.
[51]
Rollo, 42-47.
[52]
Id., 48-49.
[53]
162 SCRA 753 [1988].
[54]
Op. cit., 171.
[55]
158 SCRA 9 [1988].
[56]
Petitioner’s Memorandum, 8.
[57]
Lutz vs. Araneta, 98 Phil. 148 [1955]; Gaston vs. Republic
Planters Bank, 158 SCRA 626 [1988].
[58]
Francia vs. IAC, supra.;
Republic vs. Mambulao Lumber Co., 4 SCRA 622 [1962].
[59]
Cordero vs. Gonda, 18 SCRA 331 [1966].