Archive for March, 2011


LEGAL NOTE 0045 – THE PESCANO CASE. ADDENDUM TO THE NOTE ON THE IMPEACHMENT OF OMBUDSMAN MERCEDITAS N. GUTIERREZ.

SOURCE: VIEWPOINT – Spotless hands

By Juan Mercado

Philippine Daily Inquirer First Posted 06:33:00 03/22/2011 Filed Under: Impeachment, Military, Graft & Corruption

 

EXCERPT: THE PESTANO CASE:

Despite threats, 24-year-old Pestaño bucked loading 14,000 board feet of “hot” logs, shabu and guns aboard BRP Bacolod where he served as cargo master. His body, bearing gunshot wounds, was discovered in his cabin.

Suicide, ruled the Navy within 24 hours. The NBI waffled. No, Senate Report No. 800 bluntly countered. Pestaño was bludgeoned, shot to death, and his body rigged to appear he took his life, wrote Sen. Marcelo Fernan.

 

EXCERPT: OTHERS WERE ALSO KILLED OR DISAPPEARED

Among the desaparecidos is Zosimo Villanueva of Tawi-Tawi naval station. He tipped Pestaño on the hot logs and shabu. He was “lost at sea while on a mission.” The UN says, “Foul play is suspected.”

Bacolod City’s radio operator Fidel Tagaytay was ordered to report to Navy headquarters, says his wife Leonila. He too disappeared. There has been “no action/investigation by the Navy,” the UN snapped.

Ensign Alvin Farone was aboard the Bacolod when Pestaño was slain. He contacted Marissa, Pestaño’s sister, saying he wanted “to tell what really happened to Phillip.” A long silence followed. He died. And dead men tell no tales?

 

WHAT DID THE UN COMMISSION SAY?

For years, the ombudsman pooh-poohed Senate Report No. 800, Raul Pangalangan wrote in the Inquirer. But that precisely was the document the UN Commission on Human Rights in Geneva relied on. Here is the UP law professor’s concise summary:

“Close to 15 years elapsed since the death of the victim, the [parents] are still ignorant of the circumstances surrounding their son’s death, and [Philippine] authorities have yet to initiate an independent investigation.

“[T]he Ombudsman deemed it necessary to conduct further proceedings in [August 2007]. Since that date, no suspect was prosecuted, or tried, let alone convicted… The [Philippines is in] breach of its obligation … to properly investigate the death of [Philip], prosecute perpetrators, and ensure redress.”

EXCERPT: WHAT DID VIEWPOINT SAY?

“They were faceless, powerless enlisted men,” Viewpoint noted on Sept. 13, 2010. “They were like trees, felled in the forest. No one sees. No one knows. No one cares. Perhaps, impeachment may spark a glimmer of hope. Perhaps.”

 

FULL ARTICLE

WILL CONGRESS ram through Resolution 1089 and lob it to the Senate? The resolution impeaches Merceditas Gutierrez for “betrayal of public trust.” On the eve of a plenary vote, a once-foregone conclusion turned problematic.

Gutierrez embalmed cases like those of the euro generals and Mega Pacific computers, says the rap sheet. But Iglesia ni Cristo officials covertly badgered congressmen to spring Gutierrez, House justice committee chair Rep. Niel Tupas Jr. fumes. Bogus text messages threaten pork barrel cuts.

“The Ombudsman’s office … failed to act on any of 44 complaints alleging extrajudicial executions attributed to state agents,” UN Special Rapporteur on Extrajudicial Execution Philip Alston noted. “There is a passivity bordering on abdication of responsibility.”

Assuming the House doesn’t buckle, Gutierrez won’t be alone in the dock. With her will be a Senate still haunted by the “Craven Eleven” incident. That refers to the 11 senators who voted to seal the “second envelope” of evidence during the Joseph Estrada impeachment trial. This triggered People Power II.

“The Senate that will judge Merceditas is composed of ‘Craven Eleven’ remnants,” e-mailed Enrique Angeles from Buena Park, California. “These are Miriam Santiago, Juan Ponce Enrile, Gringo Honasan and Tito Sotto.”

“Big ticket items” like P728-million fertilizer mess and the $329-million NBN-ZTE scandal stoked intense interest. Do they bear fingerprints of former President Gloria Macapagal- Arroyo and the former first gentleman as some insist?

Gutierrez thus finds in the same dock the invisible but felt presence of Arroyo and Consort. Hindi siya nag-iisa.

This battered country needs another marred impeachment process like a hole in the head. Gutierrez may not be “Ms Sunshine.” But she deserves a fair shake.

So do the complainants, like Felipe and Evelyn Pestaño. They have battled for 15 years to get justice for their murdered son Phillip, a Philippine Military Academy graduate.

Despite threats, 24-year-old Pestaño bucked loading 14,000 board feet of “hot” logs, shabu and guns aboard BRP Bacolod where he served as cargo master. His body, bearing gunshot wounds, was discovered in his cabin.

Suicide, ruled the Navy within 24 hours. The NBI waffled. No, Senate Report No. 800 bluntly countered. Pestaño was bludgeoned, shot to death, and his body rigged to appear he took his life, wrote Sen. Marcelo Fernan.

For years, the ombudsman pooh-poohed Senate Report No. 800, Raul Pangalangan wrote in the Inquirer. But that precisely was the document the UN Commission on Human Rights in Geneva relied on. Here is the UP law professor’s concise summary:

“Close to 15 years elapsed since the death of the victim, the [parents] are still ignorant of the circumstances surrounding their son’s death, and [Philippine] authorities have yet to initiate an independent investigation.

“[T]he Ombudsman deemed it necessary to conduct further proceedings in [August 2007]. Since that date, no suspect was prosecuted, or tried, let alone convicted… The [Philippines is in] breach of its obligation … to properly investigate the death of [Philip], prosecute perpetrators, and ensure redress.”

“Well, Gutierrez finally acted on the Pestaño plea,” Pangalangan wryly added. “She dismissed it. To add sting to the injury, she served her dismissal order on Pestaño’s parents the day after they signed the impeachment complaint against her.”

Space constraints probably didn’t allow the cerebral dean to amplify his statement: “The UN committee found that within four months of Pestaño’s death, three of his Navy comrades all died or disappeared in mysterious circumstances.”

May we stitch in details, drawn from the same UN report. A skewed justice system here results in a “voiceless legion of the walking dead (who) are no one’s constituency.”

Among the desaparecidos is Zosimo Villanueva of Tawi-Tawi naval station. He tipped Pestaño on the hot logs and shabu. He was “lost at sea while on a mission.” The UN says, “Foul play is suspected.”

Bacolod City’s radio operator Fidel Tagaytay was ordered to report to Navy headquarters, says his wife Leonila. He too disappeared. There has been “no action/investigation by the Navy,” the UN snapped.

Ensign Alvin Farone was aboard the Bacolod when Pestaño was slain. He contacted Marissa, Pestaño’s sister, saying he wanted “to tell what really happened to Phillip.” A long silence followed. He died. And dead men tell no tales?

The Pestaños claim that Farone’s demise was “suspicious. It should have been investigated.” Again, the Philippines didn’t even comment on this case.

“They were faceless, powerless enlisted men,” Viewpoint noted on Sept. 13, 2010. “They were like trees, felled in the forest. No one sees. No one knows. No one cares. Perhaps, impeachment may spark a glimmer of hope. Perhaps.”

Possible resource persons, meanwhile fidget. Former Agriculture Secretary Luis Lorenzo skipped town in 2005, hours before the Senate started its inquiry into fertilizer fraud to bankroll Arroyo’s election. Undersecretary Jocelyn “Joc-joc” Bolante scrammed a year later.

The Senate blue ribbon committee, Commission on Audit and Philippine Center for Investigative Journalism confirmed the fraud. So did thousands of farmers.

Deported after his US asylum petition was rejected, Bolante today blames Lorenzo who pledges to cooperate with the Aquino administration. Two former fugitives squealing before an impeachment court guarantees drama.

Will the judges have, as the Italians say, mani politi (clean hands)?

(E-mail: juanlmercado@gmail.com)

 

CASE NO. 2011-0075: BELLE CORPORATION VS. COMMISSIONER OF INTERNAL REVENUE (G.R. NO. 181298, 2 MARCH 2011, DEL CASTILLO, J.) SUBJECT: TAX CREDIT OF UNUTILIZED EXCESS INCOME TAX PAYMENTS. (BRIEF TITLE: BELLE CORPORATION VS. CIR)

 

Republic of the Philippines

Supreme Court

Manila

FIRST DIVISION

BELLE CORPORATION,   G.R. No. 181298
Petitioner,    
     
    Present:
     
    CORONA, C.J., Chairperson,
– versus –   VELASCO, JR.,
    LEONARDO-DE CASTRO,
    DEL CASTILLO, and
    PEREZ, JJ.
     
COMMISSIONER OF

INTERNAL REVENUE,

   

Promulgated:

Respondent.   March 2, 2011

x – – – – – – – – – – – – – – – – – – – – – – – – – – – – — – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – x

 

R E S O L U T I O N

DEL CASTILLO, J.:

For Resolution is the Motion for Clarification[1] filed by petitioner Belle Corporation.  In the Motion, petitioner prays that our Decision dated January 10, 2011 be modified or clarified to indicate petitioner’s entitlement to a tax credit of unutilized excess income tax payments for the taxable year 1997.

In our Decision, we held that Section 76 of the 1997 National Internal Revenue Code (NIRC) and not Section 69 of the old NIRC applies.  Section 76 provides that a taxpayer has the option to file a claim for refund or to carry-over its excess income tax payments. The option to carry-over, however, is irrevocable.  Thus, once a taxpayer opted to carry-over its excess income tax payments, it can no longer seek refund of the unutilized excess income tax payments. The taxpayer, however, may apply the unutilized excess income tax payments as a tax credit to the succeeding taxable years until such has been fully applied pursuant to Section 76 of the NIRC.

In our Decision, we denied petitioner’s claim for refund because it has earlier opted to carry over its 1997 excess income tax payments by marking the tax credit option box in its 1997 income tax return.  We must clarify, however, that while petitioner may no longer file a claim for refund, it properly carried over its 1997 excess income tax payments by applying portions thereof to its 1998 and 1999 Minimum Corporate Income Tax in the amounts of P25,596,210.00 and P14,185,874.00, respectively. Pursuant to our ruling, petitioner may apply the unutilized excess income tax payments as a tax credit to the succeeding taxable years until fully utilized.  Thus, as of the taxable year 1999, petitioner still has an unutilized excess income tax payments ofP92,261,444.00 which may be carried over to the succeeding taxable years until fully utilized. 

IN VIEW OF THE FOREGOING, it is hereby clarified that although petitioner may no longer file a claim for refund, it may, however, apply the excess income tax payments for the taxable year 1997 as a tax credit to the succeeding taxable years until fully utilized.

SO ORDERED.

 

 

MARIANO C. DEL CASTILLO 

Associate Justice

 

 

WE CONCUR:

 

RENATO C. CORONA

Chief Justice

Chairperson

PRESBITERO J. VELASCO, JR.

Associate Justice

TERESITA J. LEONARDO-DE CASTRO

Associate Justice

 

JOSE PORTUGAL PEREZ

Associate Justice

 

C E R T I F I C A T I O N

            Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Resolution had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

 

RENATO C. CORONA

Chief Justice


[1]       Rollo, pp. 280-286.

 CASE NO. 2011-0075: CENTRAL LUZON DRUG CORPORATION VS. COMMISSIONER OF INTERNAL REVENUE (G.R. NO. 181371, 2 MARCH 2011, DEL CASTILLO, J.) SUBJECTS: WHEN MOTION TO WITHDRAW CASE IS ALLOWED; EFFECT OF WITHDRAWAL OF APPEAL. (BRIEF TITLE: CENTRAL LUZON DRUG VS. CIR) 

   

Republic of the Philippines

Supreme Court

Manila

FIRST DIVISION

CENTRAL LUZON DRUGCORPORATION,   G.R. No. 181371
Petitioner,    
    Present:
     
    CORONA, C. J., Chairperson,
– versus –   VELASCO, JR.,
    LEONARDO-DE CASTRO,
    DEL CASTILLO, and
    PEREZ, JJ.
COMMISSIONER OF INTERNAL REVENUE,    Promulgated:
Respondent.   March 2, 2011

x – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –  – – – – – – – – – – – – – – – – x

 

R E S O L U T I O N

 

DEL CASTILLO, J.:

 

When an appeal is withdrawn, the assailed decision becomes final and executory.

For Resolution is the Motion to Withdraw[1] filed by petitioner Central Luzon Drug Corporation, praying for the dismissal of the instant case without prejudice.

 

Factual Antecedents

 

Petitioner is a duly registered corporation engaged in the retail of medicines and other pharmaceutical products.[2]  It operates 22 drugstores located in Central Luzon under the business name and style of “Mercury Drug.”[3]

            On April 13, 2005, petitioner filed with respondent Commissioner of Internal Revenue (CIR) a request for the issuance of a tax credit certificate in the amount of P32,170,409, representing the 20% sales discounts allegedly granted to senior citizens for the year 2002.[4]  

On April 14, 2005, petitioner filed with the Court of Tax Appeals (CTA) a Petition for Review[5] which was docketed as CTA Case No. 7206 and raffled to the First Division of the CTA.

            On July 23, 2007, the First Division of the CTA rendered a Decision[6] denying petitioner’s claim for insufficiency of evidence.  The pertinent portion of the Decision reads:

Under petitioner’s Annual ITR and audited financial statements, it had gross sales amounting to P674,877,125.00.  However,  the Court cannot ascertain from the documents submitted by petitioner such as Schedule of Sales (net),  Schedule of Prepaid Tax-OSCA,  and Special Record Books for the year 2002,  whether its gross sales of P674,877,125.00 included its gross sales to senior citizens of P26,681,354.59.  TheSchedule of Prepaid Tax-OSCA, taken from the Special Record Books, showed its daily sales to qualified senior citizens and the corresponding twenty percent (20%) discount granted by each of the twenty-two branches of petitioner.  Meanwhile, the Schedule of Sales showed only its total monthly sales without indicating which portion therein were sales to senior citizens.  Petitioner should have presented its daily net sales as reflected in the general ledger, cash receipt books,  sales book or any other document whereby the Court can trace or verify that petitioner’s gross sales ofP674,877,125.00 for the year 2002 included its gross sales to senior citizens for the same year.

In sum, though the twenty percent (20%) sales discounts granted to senior citizens on their purchase of medicines should be treated as a tax credit and petitioner was able to substantiate the same, the instant petition will not prosper for petitioner’s failure to show that its gross sales to senior citizens were declared as part of its taxable income.

 

IN VIEW OF THE FOREGOING, the subject Petition for Review is hereby DENIED for insufficiency of evidence.

 

SO ORDERED.[7]

 

 

            Aggrieved, petitioner moved for reconsideration[8] but the First Division of the CTA denied the same in a Resolution[9]dated September 12, 2007. 

On October 3, 2007, petitioner filed a Motion for Extension of Time to File Petition for Review on Certiorari[10] with the CTA En Banc.

On October 19, 2007, petitioner filed with the CTA En Banc a Petition for Review,[11] docketed as CTA En Banc Case No. 316.

            On December 4, 2007, the CTA En Banc resolved to deny due course, and accordingly, dismissed the Petition for Review for failure of petitioner to attach a Verification, a Certification of Non-Forum Shopping, as well as a Special Power of Attorney and a Secretary’s Certificate, authorizing petitioner’s counsel to file the Petition for Review.[12]

            Petitioner sought reconsideration,[13] arguing that the Petition for Review was sufficient in form because the Verification and Certification of Non-Forum Shopping was already attached to the Motion for Extension of Time to File Petition for Review onCertiorari.  Petitioner submitted a Secretary’s Certificate to show that Mr. Jacinto J. Concepcion was authorized by petitioner to sign the Verification attached to the Motion for Extension of Time to File Petition for Review on Certiorari.

            On January 17, 2008, the CTA En Banc denied reconsideration.  It said:

The Court resolves to deny the Motion for Reconsideration.

The Verification and Certification of Non-Forum Shopping dated October 2, 2007 attached to petitioner’s Motion for Extension of Time cannot replace the Verification and Certification of Non-Forum Shopping required to be attached to the Petition for Review as this would contravene the very purpose for which it is required.  It is well to note that in the Verification and Certification of Non-Forum Shopping dated October 2, 2007, the affiant declared under oath, among others, that he has read the contents of the Petition and that they are true and correct of his own knowledge and belief; and that petitioner has not commenced any other action or proceeding involving the same issues in the Supreme Court, the Court of Appeals,  or any other tribunal or agency  and that there is no such action or proceeding pending in the Supreme Court, the Court of Appeals,  or any other tribunal or agency.  For this reason, the same cannot be used in the Petition for Review dated October 18, 2007as the affiant could not have read the Petition as it was not yet prepared at the time he executed the Verification and Certification of Non-Forum Shopping on October 2, 2007. It may not be amiss to stress that verification is required to secure an assurance that the allegations of the petition have been made in good faith, or are true and correct and not merely speculative.

Moreover, the subsequent filing of a Secretary’s Certificate serves no purpose as the instant Petition is not verified and does not contain a Certification of Non-Forum Shopping required by Section 2 of Rule 6 of the Revised Rules of the Court of Tax Appeals.

As the Supreme Court has said: “[o]bedience to the requirements of procedural rules is needed if we are to expect fair results therefrom, and utter disregard of the rules cannot justly be rationalized by harking on the policy of liberal construction. Time and again, the Supreme Court has strictly enforced the requirement of verification and certification of non-forum shopping under the Rules of Court.”

As a final note, the Court finds it necessary to reiterate that under prevailing procedural rules and jurisprudence, non-compliance with these requirements is a sufficient ground for the dismissal of the petition.

WHEREFORE, the Motion for Reconsideration is hereby DENIED for lack of merit.

 

SO ORDERED.[14]

This prompted petitioner to file before us a Petition for Review on Certiorari[15] under Rule 45 of the Rules of Court to set aside the Resolutions[16] dated December 4, 2007 and January 17, 2008 of the CTA En Banc.  

In response, comments[17] were filed by the respondent and the Office of  the Solicitor General (OSG), as counsel for respondent.

However, instead of filing a reply to the comments, petitioner filed a Motion to Withdraw, praying that the case be dismissed without prejudice. According to petitioner, the amount of tax credit being claimed for 2002 would just be included in its future claims for issuance of a tax credit certificate since the said amount was carried over to its 2003 Income Tax Return (ITR).[18]

The OSG does not oppose the Motion to Withdraw.  However, citing Section 2,[19]  Rule 17 of the Rules of Court, the OSG argues that the withdrawal of the instant case is no longer a matter of right on the part of petitioner, but is discretionary upon the Court.[20] The OSG also calls attention to the failure of Mr. Jacinto J. Conception, the person who signed the Verification and Certification of Non-forum Shopping, to exhibit before the notary public a valid Identification Card.[21]  The OSG insists that such failure renders the instant Petition defective.[22] Thus, it should be dismissed with prejudice.[23]

 

Our Ruling

 

            We grant the Motion to Withdraw.

Section 1, Rule 13 of the Internal Rules of the Supreme Court[24] provides that “[a] case shall be deemed submitted for decision or resolution upon the filing of the last pleading, brief, or memorandum that the Court or its Rules require.”  In the instant case, records show that on August 19, 2009,[25] we resolved to require petitioner to file a reply.  Instead of complying, petitioner opted to file a motion to withdraw.  Clearly, by requiring petitioner to file its Reply, the Court has not yet deemed the case submitted for decision or resolution.  Thus, we resolve to grant petitioner’s Motion to Withdraw.

However, we agree with the OSG that the dismissal of the instant case should be with prejudice.  By withdrawing the appeal, petitioner is deemed to have accepted the decision of the CTA. And since the CTA had already denied petitioner’s request for the issuance of a tax credit certificate in the amount of P32,170,409 for insufficiency of evidence, it may no longer be included in petitioner’s future claims.  Petitioner cannot be allowed to circumvent the denial of its request for a tax credit by abandoning its appeal and filing a new claim. To reiterate, “an appellant who withdraws his appeal x x x must face the consequence of his withdrawal, such as the decision of the court a quo becoming final and executory.”[26]

WHEREFORE, the Motion to Withdraw is hereby GRANTED.  The Petition for Review is hereby DISMISSED and the case is hereby declared CLOSED and TERMINATED.  No further pleadings or motions shall be entertained herein.  Let an entry of judgment in this case be made in due course.

SO ORDERED.

 

 

                        MARIANO C. DEL CASTILLO 

                        Associate Justice 

WE CONCUR: 

 

RENATO C. CORONA 

Chief Justice

Chairperson

PRESBITERO J. VELASCO, JR.Associate Justice TERESITA J. LEONARDO-DE CASTROAssociate Justice

 

JOSE PORTUGAL PEREZ

Associate Justice

 

 

 

 

 

C E R T I F I C A T I O N

            Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Resolution had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

 

RENATO C. CORONA

Chief Justice


[1]       Rollo, pp. 107-110.

[2]       Id. at 11.

[3]       Id.

[4]       Id. at 38.

[5]       Id.

[6]       Id. at 37-45.

[7]       Id. at 43-44.

[8]       Id. at 46-51.

[9]       Id. at 52-54.

[10]     Id. at. 24-27.

[11]     Id. at 28-36.

[12]     Id. at 56-57.

[13]     Id. at 58-61.

[14]     Id. at 63-64.

[15]     Id. at 10-65, with Annexes “A” to “E,” inclusive.

[16]     Id. at 55- 57 and 62-65.

[17]     Id. at 76-84 and 92-104.

[18]     Id. at 107.

[19]     SEC. 2. Dismissal upon motion of plaintiff. — Except as provided in the preceding section, a complaint shall not be dismissed at the plaintiff’s instance save upon approval of the court and upon such terms and conditions as the court deems proper. If a counterclaim has been pleaded by a defendant prior to the service upon him of the plaintiff’s motion for dismissal, the dismissal shall be limited to the complaint. The dismissal shall be without prejudice to the right of the defendant to prosecute his counterclaim in a separate action unless within fifteen (15) days from notice of the motion he manifests his preference to have his counterclaim resolved in the same action. Unless otherwise specified in the order, a dismissal under this paragraph shall be without prejudice. A class suit shall not be dismissed or compromised without the approval of the court.  

[20]     Rollo, p. 126.

[21]     Id. at 127-128.

[22]     Id.

[23]     Id. at 128.

[24]     A.M. No. 10-4-20-SC.

[25]     Rollo, p. 106.

[26]     Southwestern University v. Hon. Salvador, 179 Phil. 252, 257 (1979).