Atlas Mamba

8/12/2019 Atlas Mamba

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ATLAS CONSOLIDATED MINING AND DEVELOPMENT CORPORATION,petitioner, vs.

COMMISSIONER OF INTERNAL REVENUE, COURT OF TAX APPEALS and COURT OF

APPEALS, respondents.

D E C I S I O N

PANGANIBAN,J.:

In Davao Gulf Lumber Corporation v. Commissioner of Internal Revenue and Court of

Appeals,i[1]the Court en bancunequivocally held that the tax refund under Republic Act No.

1435 is computed on the basis of the specific tax deemed paid under Sections 1 and 2 thereof,not on the increased rates actually paid under the 1977 NIRC. We adhere to such ruling.

The Case

Petitioner challenges, under Rule 45 of the Rules of Court, the March 30, 1995 Decision of the

Court of Appealsii[2]in CA-GR SP No. 34081, which affirmed the December 24, 1991Decisioniii[3]of the Court of Tax Appeals (CTA), which in turn denied the claim of thepetitioner for refund/tax credit of 25 percent of the specific tax it actually paid for the petroleum

products purchased for its mining operations.

The Facts

The antecedent facts are summarized by the Court of Appeals as follows:iv[4]

(1) Petitioner is a domestic corporation engaged in the business of mining copper from itsmineral land and concessions in Toledo City, Cebu. During the periods under review, beginning

from September 1974 through July 1983, petitioner purchased from its suppliers, PetrophilCorporation and Mobil Oil Philippines, referred to hereinafter respectively as Petrophil andMobil Oil, quantities of manufactured oil and other fuels, like diesel and coco-diesel. It actually

used these oils and fuels in its mining operations to run various items of machinery and

equipment, motors and vehicles;

(2) Petrophil and Mobil Oil paid the specific taxes imposed by Sections 153 and 156

(formerly Section 142 and 145) of the 1977 National Internal Revenue Code (NIRC) on all theoils and fuels they manufactured from which was drawn the quantity sold to the petitioner for use

in its operations;

(3) On June 14, 1956, Republic Act No. 1435, [An Act to Provide Means for Increasing theHighway Discretionary Funds], granted in Section 5 thereof, a refund of 25% of the specific

taxes paid on oil products used by miners and forest concessionaires in their operations, to wit:

The proceeds of the additional tax on manufactured oils shall accrue to the road and bridges

funds of the political subdivision for whose benefit the tax is collected; provided, however, thatwhenever any oils mentioned above are used by miners or forest concessionaires in their

operations, twenty-five percentum (25%) of the specific tax paid thereon shall be refunded by the


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Collector of Internal Revenue upon submission of proof of actual use of oils under similar

conditions enumerated in subparagraphs one and two of Section one hereof, amending section

one hundred forty-two of the Internal Revenue Code; Provided, further, that no new road shall beconstructed unless the routes or location thereof shall have been approved by the Commissioner

of Public Works and Highways after a determination that such road can be made part of an

integral and articulated route in the Philippine Highway System, as required in section twenty-sixof the Philippine Highway Act of 1953.

(4) Invoking Section 5 of Republic Act 1435, petitioner filed with the Court of Tax Appealsseveral petitions seeking the refund of 15% of specific taxes paid on oil products which it

purchased and used in its mining operations at various times in the following amounts:

C.T.A. Case No. Amount Claimed Period Covered

2840 P 3,928,614.19 Sept. 1974 - June 19763091 10,311,887.34 May 1978 - Feb. 1980

3426 8,972,165.34 March 1980 - Dec. 19813696 11,220,895.07 Jan. 1982 - July 1983

Total P34,433,563.94

(5) The aforecited cases were consolidated. On December 24, 1991, the Tax Court rendered

a Decision denying the claims for refund on the basis of the Decision of the Supreme Court in

Commissioner of Internal Revenue vs. Rio Tuba Nickel Mining Corporation and Court of TaxAppeals, G.R. Nos. 83583-84, September 30, 1991, wherein it was held that the refund privilege

granted by Section 5 of R.A. 1435 was impliedly repealed with the issuance of Presidential

Decree No. 711, which took effect on July 1, 1975, abolishing all special and fiduciary funds;

(6) Petitioner appealed the Tax Courts Decision to this Court under CA-G.R. Sp. No. 27676,

entitled Atlas Consolidated Mining and Development Corp. vs. Commissioner of InternalRevenue and Court of Tax Appeals. On March 31, 1993, the Eleventh Division of this Court

rendered a Decision setting aside the Tax Courts Decision and remanding the cases to the Tax

Court for proper determination of the total amount of specific taxes paid and the corresponding

tax refund or credit to which petitioner is entitled;

(7) The decision of this Court was based on a Supreme Court Resolution dated March 25,

1992 and a Resolution dated June 15, 1992 modifying the Decision in Rio Tuba (supra), in thatthe refund privilege granted under Section 5 of R.A. 1435 was available up to 1985 since the

Highway Special Fund was abolished only in 1986. Furthermore, said Resolutions ruled that the

amount of specific taxes refundable should be computed on the basis of the rates of specific tax

prescribed under Sections 1 and 2 of R.A. 1435 and not on the increased rates mandated underSections 153 and 156 of the Tax Code:

(8) Thus, this Court said:


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Thus, the respondent courts decision of December 24, 1991 should be SET ASIDE. The

instant tax cases should be remanded to the respondent court for proper evaluation of the

petitioners evidence to determine the total amount of specific taxes and the 25% refund or taxcredit based on the specific tax rates prescribed in Sections 1 and 2 of RA 1435 in view of the

allegation of the petitioner in the instant petition that the respondent court failed to consider

certain exhibits or cited wrong exhibits. (underscoring ours)

(9) On April 29, 1993, an Entry of Judgment was issued in CA - G.R. SP No. 27676 stating

that the Decision therein had already become final and executory;

(10) On April 18, 1994, after hearing, the Tax Court issued a Resolution computing the 25%

specific tax refund based on the rates of specific tax prescribed in Sections 1 and 2 of RA 1435and came out with the following amounts refundable:

1) CTA Case No. 2840 - P208,129.57

2) CTA Case No. 3091 - 358,864.83

3) CTA Case No. 3426 - 270,369.02

4) CTA Case No. 3696 - 264,315.46

Total P1,101,678.88.

As earlier noted, the Court of Appeals affirmed the CTA Decision. Hence, this petition for

review.v[5]

The Ruling of the Court of Appeals

In affirming the Decision of the Court of Tax Appeals, Respondent Court relied on the Supreme

Court ruling in CIR v. Rio Tubavi[6]that the refund should be computed on the basis of the ratesdeemed paid under RA 1435, not on the increased rates actually paid under the NIRC.

Respondent Court ruled:

Moreover, the latest ruling of the Supreme Court on the matter is its Decision dated May 10,

1994 in Commissioner of Internal Revenue vs. Hon. Court of Appeals and Atlas Consolidated

Mining and Development Corporation, G.R. No. 106913. This case also involves petitioners

claim for refund of 25% of specific taxes paid on oil products used in its mining operations for

the periods July-December 1976, January-December 1977 and January-May 1978, pursuant toSection 5 of R.A. 1435. The Supreme Court, applying Rio Tuba, held:

We rule, therefore, that since [Atlas] claims for refund cover specific taxes paid before 1985, it

should be granted the refund based on the rates specified by Sections 1 and 2 of R.A. No. 1435

and not on the increased rates under Sections 153 and 156 of the Tax Code of 1977, provided theclaims are not yet barred by prescription.


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The case at bar is no different from Rio Tuba and the aforecited G.R. No. 106913. Hence, the

instant petition is devoid of merit.

Notably, therefore, the decision of the Supreme Court in Insular Lumber Co. vs. CTA (G.R. No.

L-31057, 29 May 1981) and in Commissioner of Internal Revenue vs. Atlas Consolidated

Mining and Development Corporation, et al. (G.R. No. 93631, 12 November 1990) have beensuperseded by the decision of the Supreme [C]ourt in Commissioner of Internal Revenue vs. Rio

Tuba Nickel Mining Corp. and the Court of Tax Appeals and Atlas Consolidated Mining and

Development Corp. (G.R. No. 106913, dated May 10, 1994).vii[7]

The Issues

Petitioner argues that Respondent Court of Appeals committed the following errors:

I

Upholding the Tax Court decision and failing to apply the Supreme Courts En Banc decision inInsular Lumber Co. vs. CTA, thereby making as basis for its decision the Supreme Courtsdecision sitting in a division, in the Rio Tuba case.

II

Failing to apply the increase in rates imposed by succeeding amendatory laws, under whichpetitioner paid the specific taxes on manufactured oils and other fuels.

III

Unnecessarily interpreting Section 5 of Republic Act No. 1435, contrary to established legalprinciples.

IV

Failing to apply Sections 142 and 145 of the National Internal Revenue Code, as amended,

making the decision contrary to existing law and jurisprudence, resulting [in] unfair, erroneous,arbitrary, inequitable and oppressive consequences.

In sum, the main issue here is whether petitioner is entitled to the refund of 25 percent of specific

taxes it actually paid on various refined and manufactured mineral oils and other oil products

taxed under Sections 153 and 156 of the 1977 National Internal Revenue Code (Sections 142 and145, respectively, of the 1939 NIRC).

The Courts Ruling

The petition is devoid of merit.

Issue: Computation of Tax Refund


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Petitioner is a duly-licensed domestic corporation engaged in the business of mining copper from

its concessions. Because the petroleum products it had purchased were used in its mining

operations, it is entitled to claim a tax refund pursuant to RA 1435. The petroleum productswere originally subject to specific tax under Sections 142 and 145 of the 1939 NIRC, which were

amended by Sections 1 and 2 of RA 1435, respectively. At the time of the purchase of the

petroleum products, Sections 142 and 145 were respectively renumbered Sections 153 and 156of the 1977 NIRC, which imposed the higher rate of taxes petitioner paid.

It is undisputed that the refund privilege existed at the date the entitlement was being availed of.Commissioner of Internal Revenue v. Rio Tuba Nickel Mining Corporationviii[8]held that the

Highway Special Fund retained its status as a special fund up to 1985 or for 10 years after the

effectivity of Presidential Decree 711, which mandated that all funds that had accrued from

various special funds would be channeled to the general fund.

PD 711, which took effect on July 1, 1975, was invoked in previous cases as having impliedly

repealed RA 1435, thereby abolishing the refund privilege accorded to miners and loggers. Rio

Tuba, however, ruled that the privilege existed until 1985.

The only question in the present case, therefore, is the computation of the tax refund. As statedearlier, petitioner contends that the 25 percent refund should be based on the increased rates of

specific tax it had actually paid under the 1977 NIRC, not on the prescribed rates under RA

1435.

The issue presented before us is already settled. In Davao Gulf Lumber Corporation v.

Commissioner of Internal Revenue and Court of Appeals,ix[9]the Court en banc unanimouslyreiterated Rio Tuba and categorically held that the tax refund must be computed on the basis of

the specific tax deemed paid under Sections 1 and 2 of RA 1435, not on the increased rates

actually paid by the petitioners pursuant to Sections 153 and 156 of the NIRC. The Court held:

A tax cannot be imposed unless it is supported by the clear and express language of a statute[;]

on the other hand, once the tax is unquestionably imposed, [a] claim of exemption from taxpayments must be clearly shown and based on language in the law too plain to be mistaken.

Since the partial refund authorized under Section 5, RA 1435, is in the nature of a tax exemption,

it must be construed strictissimi juris against the grantee. Hence, petitioners claim of refundon the basis of the specific taxes it actually paid must expressly be granted in a statute stated in a

language too clear to be mistaken.

We have carefully scrutinized RA 1435 and the subsequent pertinent statutes and found noexpression of a legislative will authorizing a refund based on the higher rates claimed by

petitioner. The mere fact that the privilege of refund was included in Section 5, and not in

Section 1, is insufficient to support petitioners claim. When the law itself does not explicitlyprovide that a refund under RA 1435 may be based on higher rates which were nonexistent at the

time of its enactment, this Court cannot presume otherwise. A legislative lacuna cannot be filled

by judicial fiat.


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The issue is not really novel. In Commissioner of Internal Revenue vs. Court of Appeals and

Atlas Consolidated Mining and Development Corporation (the second Atlas case),the CIR

contended that the refund should be based on Sections 1 and 2 of RA 1435, not Sections 153 and156 of the NIRC of 1977. In categorically ruling that Private Respondent Atlas Consolidated

Mining and Development Corporation was entitled to a refund based on Sections 1 and 2 of RA

1435, the Court, through Mr. Justice Hilario G. Davide, Jr., reiterated our pronouncement inCommissioner of Internal Revenue vs. Rio Tuba Nickel and Mining Corporation:

Our Resolution of 25 March 1992 modifying our 30 September 1991 Decision in theRio Tubacase sets forth the controlling doctrine. In that Resolution, we stated:

Since the private respondents claim for refund covers specific taxes paid from 1980 to July1983 then we find that the private respondent is entitled to a refund. It should be made clear,

however, that Rio Tuba is not entitled to the whole amount it claims as refund.

The specific taxes on oils which Rio Tuba paid for the aforesaid period were no longer based on

the rates specified by Sections 1 and 2 of R.A. No. 1435 but on the increased rates mandatedunder Sections 153 and 156 of the National Internal Revenue Code of 1977. We note however,

that the latter law does not specifically provide for a refund to these mining and lumbercompanies of specific taxes paid on manufactured and diesel fuel oils.

InInsular Lumber Co. v. Court of Tax Appeals,(104 SCRA 710 [1981]), the Court held that theauthorized partial refund under Section 5 of R.A. No. 1435 partakes of the nature of a tax

exemption and therefore cannot be allowed unless granted in the most explicit and categorical

language. Since the grant of refund privileges must be strictly construed against the taxpayer,the basis for the refund shall be the amounts deemed paid under Sections 1 and 2 of R.A. No.

1435.

ACCORDINGLY, the decision in G.R. Nos. 83583-84 is hereby MODIFIED. The private

respondents CLAIM for REFUND is GRANTED, computed on the basis of the amounts

deemed paid under Sections 1 and 2 of R.A. NO. 1435, without interest.

Werule, therefore, that since Atlass claims for refund cover specific taxes paid before 1985, it

should be granted the refund based on the rates specified by Sections 1 and 2 of R.A. No. 1435and not on the increased rates under Sections 153 and 156 of the Tax Code of 1977, provided the

claims are not yet barred by prescription. (Underscoring supplied.)x[10]

Petitioner also calls attention to the apparent conflict between Insular Lumber v. Court of

Appealsxi[11]and Commissioner of Internal Revenue v. Atlas Consolidated Mining and

Development Corporationxii[12](First Atlas Case), on the one hand, and Rio Tuba and the

Second Atlas Case, on the other. This issue has been laid to rest by the Court in Davao Gulf:

xxx. NeitherInsular Lumber Co.nor the first Atlas case ruled on the issue of whether therefund privilege under Section 5 should be computed based on the specific tax deemed paid

under Sections 1 and 2 of RA 1435, regardless of what was actually paid under the increased

rates. Rio Tubaand the second Atlas case did.


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Insular Lumber Co. decided a claim for refund on specific tax paid on petroleum products

purchased in the year 1963, when the increased rates under the NIRC of 1977 were not yet in

effect. Thus, the issue now before us did not exist at the time, since the applicable rates werestill those prescribed under Sections 1 and 2 of RA 1435.

On the other hand, the issue raised in the first Atlas case was whether the claimant was entitledto the refund under Section 5, notwithstanding its failure to pay any additional tax under a

municipal or city ordinance. Although Atlas purchased petroleum products in the years 1976 to

1978 when the rates had already been changed, the Court did not decide or make anypronouncement on the issue in that case.

Clearly, it is impossible for these two decisions to clash with our pronouncement inRio Tubaand second Atlas case, in which we ruled that the refund granted be computed on the basis of the

amounts deemed paid under Sections 1 and 2 of RA 1435. In this light, we find no basis for

petitioners invocation of the constitutional proscription that no doctrine or principle of law laid

down by the Court in a decision rendered en bancor in a division may be modified or reversed

except by the Court sittingen banc.

Likewise,Davao Gulfhas already debunked petitioners argument that not applying Sections142 and 145 of the NIRC rendered the CTA Decision unfair and arbitrary. The Court ruled:

Finally, petitioner asserts that equity and justice demand that the computation of the taxrefunds be based on actual amounts paid under Sections 153 and 156 of the NIRC. We

disagree. According to an eminent authority on taxation, there is no tax exemption solely on the

ground of equity.

WHEREFORE, the petition is herebyDENIEDand the assailed Decision of the Court of

Appeals isAFFIRMED.

SO ORDERED.

Davide Jr. (Chairman), Bellossillo, Vitug and Quisumbing, JJ., concur.

i[1]GR No. 117359, July 23, 1998.

ii[2]Penned byJ. Jorge S. Imperial,ponenteand chairman; with the concurrence ofJJ. Corona

Ibay-Somera and Conrado M. Vazquez, Jr.

iii[3]Penned by Associate Judge Ernesto D. Acosta, with the concurrence of Associate JudgeConstante C. Roaquin.


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iv[4] CA Decision, pp. 1-4; rollo, pp. 30-33.

v[5]The case was deemed submitted for resolution on July 4, 1997, upon receipt by the Court of

petitioners Memorandum.vi[6]207 SCRA 549, March 25, 1992.vii[7]CA Decision, p. 9; rollo, p. 38.

viii[8]Supra.

ix[9]GR No. 117359, July 23, 1998, per Panganiban,J.

x[10]Supra, pp. 15-17.

xi[11] 104 SCRA 710, May 29, 1981.

xii[12]GR No. 93631, November 12, 1990.

G.R. No. 170574 January 30, 2009

PHILIPPINE BANKING CORPORATION (NOW: GLOBAL BUSINESS BANK, INC.),Petitioner,vs.

COMMISSIONER OF INTERNAL REVENUE,Respondent.

D E C I S I O N

CARPIO, J.:

The Case

The Philippine Banking Corporation, now, Global Business Bank, Inc., (petitioner) filed this

Petition for Review1to reverse the Court of Tax Appeals Decision

2dated 23 November 2005 in

CTA EB No. 63 (C.T.A. Case No. 6395). In the assailed decision, the Court of Tax AppealsEn

Bancordered petitioner to pay P17,595,488.75 and P47,767,756.24 as deficiency documentary

stamp taxes for the taxable years 1996 and 1997, respectively, on its bank product called

"Special/Super Savings Deposit Account" (SSDA).

The Facts

Petitioner is a domestic corporation duly licensed as a banking institution.3For the taxable years

1996 and 1997, petitioner offered its SSDA to its depositors. The SSDA is a form of a savings

deposit evidenced by a passbook and earning a higher interest rate than a regular savingsaccount. Petitioner believes that the SSDA is not subject to Documentary Stamp Tax (DST)

under Section 180 of the 1977 National Internal Revenue Code (NIRC), as amended.4
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On 10 January 2000, the Commissioner of Internal Revenue (respondent) sent petitioner a Final

Assessment Notice assessing deficiency DST based on the outstanding balances of its SSDA,

including increments, in the total sum of P17,595,488.75 for 1996 and P47,767,756.24 for 1997.

These assessments were based on the outstanding balances of the SSDA appearing in the

schedule attached to petitioners audited financial statements for the taxable years 1996 and1997.5

Petitioner claims that the SSDA is in the nature of a regular savings account since both types ofaccounts have the following common features:

a. They are both evidenced by a passbook;

b. The depositors can make deposits or withdrawals anytime which are not subject to

penalty; and

c. Both can have an Automatic Transfer Agreement (ATA) with the depositors current orchecking account.6

Petitioner alleges that the only difference between the regular savings account and the SSDA is

that the SSDA is for depositors who maintain savings deposits with a substantial average daily

balance, and as an incentive, they are given higher interest rates than regular savings accounts.These deposits are classified separately in petitioners financial statements in order to maintain a

separate record for savings deposits with substantial balances entitled to higher interest rates.7

Petitioner maintains that the tax assessments are erroneous because Section 180 of the 1977

NIRC does not include deposits evidenced by a passbook among the enumeration of instruments

subject to DST. Petitioner asserts that the language of the law is clear and requires nointerpretation.8Section 180 of the 1977 NIRC, as amended,

9provides:

Sec. 180. Stamp tax on all loan agreements, promissory notes, bills of exchange, drafts,

instruments and securities issued by the government or any of its instrumentalities,

certificates of deposit bearing interest and others not payable on sight or demand .On all

loan agreements signed abroad wherein the object of the contract is located or used in thePhilippines; bills of exchange (between points within the Philippines), drafts, instruments and

securities issued by the Government or any of its instrumentalities or certificates of depositsdrawing interest, or orders for the payment of any sum of money otherwise than at the sight or

on demand, or on all promissory notes, whether negotiable or non-negotiable, except bank notesissued for circulation, and on each renewal of any such note, there shall be collected a

documentary stamp tax of Thirty centavos (P0.30) on each Two hundred pesos, or fractional part

thereof, of the face value of any such agreement, bill of exchange, draft, certificate of deposit, or

note: provided, that only one documentary stamp tax shall be imposed on either loan agreement,or promissory note issued to secure such loan, whichever will yield a higher tax: provided,

however, that loan agreements or promissory notes the aggregate of which does not exceed Two

hundred fifty thousand pesos (P250,000) executed by an individual for his purchase oninstallment for his personal use or that of his family and not for business, resale, barter or hire of
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a house, lot, motor vehicle, appliance or furniture shall be exempt from the payment of the

documentary stamp tax provided under this section. (Boldfacing supplied)

Petitioner insists that the SSDA, being issued in the form of a passbook, cannot be construed as a

certificate of deposit subject to DST under Section 180 of the 1977 NIRC. Petitioner explainsthat the SSDA is a necessary offshoot of the deregulated interest rate regime in bank deposits.10

Petitioner elucidates:

With the removal of the respective interest rate ceilings on savings and time deposit, banks areenabled to legitimately offer higher rates on savings account which may even be at par with rates

on time deposit. Practically, the distinction between a savings and a time deposit was removed

insofar as interest rates are concerned. This being so, and for the legitimate purpose of further

enticing deposits for savings account, banks have evolved a productthe Super/Special SavingsAccountwhich offers the flexibility of a savings deposit but does away with the rigidity of a

time deposit account and with interest rate at par with the latter. This is offered as an incentive

for depositors who maintain or who wish to maintain deposits with substantial average dailybalance. Such depositors will be entitled to an attractive interest rate, a rate higher than that to

which the regular savings account is entitled. Just like an ordinary savings, Super/Special

Savings Deposits can be withdrawn anytime. Of course, to be entitled to preferential interest rate,

such account must conform to a stated minimum deposit balance within a specified holdingperiod. Otherwise, the depositor will lose the incentive of a higher interest rate and the account

will revert to an ordinary savings account and be entitled only to prevailing rates of interest

applicable to regular savings account. And unlike a time deposit account, the Super/SpecialSavings Account comes in the form of a passbook, hence need not be formally renewed in the

manner that a time deposit certificate has to be formally surrendered and renewed upon

maturity.11

Petitioner argues that the DST is imposed on the basis of a mere inference or perceived

implication of what the SSDA is supposed to be and not on the basis of what the law specificallystates. Petitioner points out the differences between the SSDA and time deposits:

12

Time Deposits SSDA

1. The holding period is fixed beforehand. 1. The holding period floats at the option ofthe depositor. It can be 30, 60, 90 or 120

days or more and as an incentive for

maintaining a longer holding period, the

depositor earns higher interest.

2. There is pre-termination because there is

no partial withdrawal of a certificate. Pre-termination results in the surrender and

cancellation of the certificate of deposit.

2. No pre-termination and the passbook

account is simply reverted to an ordinarysavings status in case of early or partial

withdrawal or if the required holding

period is not met.
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Petitioner also argues that even on the assumption that a passbook evidencing the SSDA is a

certificate of deposit, no DST will be imposed because only negotiable certificates of depositsare subject to tax under Section 180 of the 1977 NIRC.

13Petitioner reasons that a savings

passbook is not a negotiable instrument and it cannot be denied that savings passbooks havenever been taxed as certificates of deposits.14

Petitioner alleges that prior to the passage of Republic Act No. 924315

(RA 9243), there was no

law subjecting SSDA to DST during the taxable years 1996 and 1997. The amendatory provisionin RA 9243 now specifically includes "certificates or other evidences of deposits that are either

drawing interest significantly higher than the regular savings deposit taking into consideration

the size of the deposit and the risks involved or drawing interest and having a specific maturity

date."16

Petitioner admits that with this new taxing clause, its SSDA is now subject to DST.However, the fact remains that this provision was non-existent during the taxable years 1996 and

1997 subject of the assessments in the present case.17

Respondent, through the Office of the Solicitor General, contends that the SSDA is substantially

the same and identical to that of a time deposit account because in order to avail of the SSDA,

one has to deposit a minimum of P50,000 and this amount must be maintained for a requiredperiod of time to earn higher interest rates.

18In a time deposit account, the minimum deposit

requirement is P20,000 and this amount must be maintained for the agreed period to earn the

agreed interest rate. If a time deposit is pre-terminated, a penalty will be imposed resulting in alower interest income. In a regular savings account, the interest rate is fixed and there is no

penalty imposed for as long as the required minimum balance is maintained. Thus, respondent

asserts that the SSDA is a time deposit account, albeit in the guise of a regular savings account

evidenced by a passbook.19

Respondent explains that under Section 180 of the 1977 NIRC, certificates of deposits deriving

interest are subject to the payment of DST. Petitioners passbook evidencing its SSDA isconsidered a certificate of deposit, and being very similar to a time deposit account, it should be

subject to the payment of DST.20

Respondent also argues that Section 180 of the 1977 NIRC categorically states that certificates of

deposit deriving interest are subject to DST without limiting the enumeration to negotiable

certificates of deposit. Based on the definition of a certificate of deposit inFar East Bank andTrust Company v. Querimit,

21a certificate of deposit may or may not be negotiable, since it may

be payable only to the depositor.22

The Ruling of the Court of Tax Appeals

On 23 November 2005, the Court of Tax AppealsEn Banc(CTA) affirmed the Decision andResolution of the CTAs Second Division. The dispositive portion reads:

WHEREFORE, the instant petition is DENIEDfor lack of merit. Accordingly, the petitioner is

hereby ORDEREDto PAYthe amounts of P17,595,488.75 and P47,767,756.24 as deficiency
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documentary stamp taxes for the taxable years 1996 and 1997, plus 25% surcharge for late

payment and 20% annual delinquency interest for late payment from January 20, 2002 until fully

paid pursuant to Sections 248 and 249 of the Tax Code.23

The CTA ruled that a deposit account with the same features as a time deposit, i.e., a fixed termin order to earn a higher interest rate, is subject to DST imposed in Section 180 of the 1977NIRC.

24It is clear that "certificates of deposit drawing interest" are subject to DST. The CTA,

citingFar East Bank and Trust Company v. Querimit,25

defined a certificate of deposit as "awritten acknowledgment by a bank or banker of the receipt of a sum of money on deposit which

the bank or banker promises to pay to the depositor, to the order of the depositor, or some otherperson or his order, whereby the relation of debtor and creditor between the bank and the

depositor is created."26

The CTA pointed out that this Court neither referred to a particular form of deposit nor limited

the coverage to time deposits only. This Court used the term "written acknowledgment" which

means that for as long as there is some written memorandum of the fact that the bank accepted adeposit of a sum of money from a depositor, the writing constitutes a certificate of deposit. The

CTA held that a passbook representing an interest-earning deposit account issued by a bank

qualifies as a certificate of deposit drawing interest.27

The CTA emphasized that Section 180 of the 1977 NIRC imposes DST on documents, whether

the documents are negotiable or non-negotiable.28

The CTA held that petitioners argument thatSection 180 of the 1977 NIRC imposes the DST only on negotiable certificates of deposit as

implied from the old tax provision is erroneous.29

Section 217 of Commonwealth Act No. 466, as

amended (old NIRC) reads:

Sec. 217. Stamp tax on negotiable promissory notes, bills of exchange, drafts, certificate ofdeposit bearing interest and others not payable on sight or demand.- On all bills of

exchange (between points within the Philippines), drafts or certificates of deposit drawinginterest, or orders for the payment of any sum of money otherwise than at sight or on demand, orall negotiable promissory notes, except bank notes issued for circulation, and on each renewal

of any such note, there shall be collected a documentary stamp tax of four centavos on each twohundred pesos, or fractional part thereof, of the face value of any such bill of exchange, draft,

certificate of deposit, or note. (As amended by Sec. 6, Republic Act No. 40)30

(Emphasis in the

original)

The CTA observed that the requirement of negotiability pertains to promissory notes only. Such

intention is disclosed by the fact that the word negotiablewas written beforepromissory notes

followed by a comma, hence, the word negotiable modifies promissory notes only. Therefore,with respect to all other documents mentioned in Section 217 of the old NIRC, the attribute of

negotiability is not required.31

The CTA added that the applicable provision is Section 180 of the

1977 NIRC and not Section 217 of the old NIRC.32

Section 180 of the 1977 NIRC provides thatthe following are subject to DST, to wit: (1) Loan Agreements; (2) Bills of Exchange; (3) Drafts;

(4) Instruments and Securities issued by the Government or any of its instrumentalities; (5)

Certificates of Deposits drawing interest; (6) Orders for the payment of any sum of money
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otherwise than at sight or on demand; and (7) Promissory Notes, whether negotiable or non-

negotiable. Therefore, the DST is imposed on all certificates of deposit drawing interest without

any qualification.33

The CTA held that a certificate of time deposit, a type of a certificate of deposit drawing interest,is subject to DST. The CTA observed that the SSDA has the same nature and characteristics as atime deposit.

34The CTA discussed the similarities of a time deposit account with an SSDA:

In order for the depositor to earn the agreed higher interest rate in a Special/Super SavingsAccount, the required minimum amount of deposit must not only be met but should also be

maintained for a definite period. Thus, the Special/Super Savings Account is a deposit with a

fixed term. Withdrawal before the expiration of said fixed term results to the reduction of the

interest rate. The fixed term and reduction of interest rate in case of pre-termination areessentiallythe features of a time deposit. Hence, this Court concurs with the conclusion reached

in the assailed Decision that petitioners Special/Super Savings Deposits and certificates of time

deposit are substantially the same, if not one and the same product, and therefore both are subjectto the DST on certificates of deposit.35

The CTA stated that the fact that the SSDA is evidenced by a passbook is immaterial because indetermining whether certain instruments are subject to DST, substance would control over form

and labels.36

On 14 December 2005, petitioner appealed to this Court the CTA decision.37

The Issue

Petitioner submits this sole issue for our consideration: whether petitioners product calledSpecial/Super Savings Account is subject to DST under Section 180 of the 1977 NIRC prior to

the passage of RA 9243 in 2004.38

The Ruling of the Court

The issue in the present case is whether petitioners SSDAs are "certificates of deposits drawinginterest" as used in Section 180 of the 1977 NIRC. If they are, then the SSDAs are subject to

DST. If not, then they are merely regular savings account which concededly are not subject to

DST. So what are "certificates of deposits drawing interest," and how do they differ from a

regular savings account?

Section 180 of the 1977 NIRC, as amended, provides:

Sec. 180. Stamp tax on all loan agreements, promissory notes, bills of exchange, drafts,

instruments and securities issued by the government or any of its instrumentalities,

certificates of deposit bearing interest and others not payable on sight or demand .On all

loan agreements signed abroad wherein the object of the contract is located or used in the

Philippines; bills of exchange (between points within the Philippines), drafts, instruments and
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securities issued by the Government or any of its instrumentalities or certificates of deposits

drawing interest, or orders for the payment of any sum of money otherwise than at the sight or

on demand, or on all promissory notes, whether negotiable or non- negotiable, except bank notes

issued for circulation, and on each renewal of any such note, there shall be collected a

documentary stamp tax of Thirty centavos (P0.30) on each Two hundred pesos, or fractional partthereof, of the face value of any such agreement, bill of exchange, draft, certificate of deposit, or

note: provided, that only one documentary stamp tax shall be imposed on either loan agreement,or promissory note issued to secure such loan, whichever will yield a higher tax: provided,

however, that loan agreements or promissory notes the aggregate of which does not exceed Two

hundred fifty thousand pesos (P250,000) executed by an individual for his purchase oninstallment for his personal use or that of his family and not for business, resale, barter or hire of

a house, lot, motor vehicle, appliance or furniture shall be exempt from the payment of the

documentary stamp tax provided under this section. lavvphil.zw+(Boldfacing and underscoring

supplied)

InFar East Bank and Trust Company v. Querimit,

39

the Court defined a certificate of deposit as"a written acknowledgment by a bank or banker of the receipt of a sum of money on depositwhich the bank or banker promises to pay to the depositor, to the order of the depositor, or to

some other person or his order, whereby the relation of debtor and creditor between the bank and

the depositor is created." A certificate of deposit is also defined as "a receipt issued by a bank foran interest-bearing time deposit coming due at a specified future date."

40

The deposit operations of a bank as listed in the Bangko Sentral ng PilipinasManual ofRegulations for Banks

41consist of the following:

1. Demand Depositsare deposits, subject to withdrawal either by check or thru theautomated tellering machines which are otherwise known as current or checking

accounts. The Bank may or may not pay interest on these accounts.42

2. Savings Depositsare interest-bearing deposits which are withdrawable either upon

presentation of a properly accomplished withdrawal slip together with the corresponding

passbook or thru the automated tellering machines.43

3. Negotiable Order of Withdrawal Accountsare interest-bearing savings deposit which

are withdrawable by means of Negotiable Orders of Withdrawal.44

4. Time Depositsare interest-bearing deposits with specific maturity dates and

evidenced by certificates issued by the bank.45

Petitioner treats the SSDA as a regular savings deposit account since it is evidenced by a

passbook and allows withdrawal. Respondent treats the SSDA as a time deposit account becauseof the higher interest rates and holding period. It is then significant to differentiate a regular

savings deposit and a time deposit vis--vis the SSDA to determine if the SSDA is a certificate

of deposit drawing interest referred to in Section 180 of the 1977 NIRC. A comparison of asavings account, time deposit account, and SSDA is shown in the table below:
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Savings Account Time Deposit SSDA

Interest rate Regular savings interest Higher interest rate Higher interest rate

Period None Fixed Term Fixed Term

Evidenced by: Passbook Certificate of Time

Deposit

Passbook

Pre-termination None With penalty With penalty

Holding Period None Yes Yes

Withdrawal Allowed Withdrawal amounts

to pre-termination

Allowed provided

the minimum amount

to earn the higherinterest rate is

maintained,otherwise, the

regular savingsinterest rate will

apply.

Based on the definition and comparison, it is clear that a certificate of deposit drawing interest as

used in Section 180 of the 1977 NIRC refers to a time deposit account. As the Bureau of Internal

Revenue (BIR) explained in Revenue Memorandum Circular No. 16-2003,46

the distinct featuresof a certificate of deposit from a technical point of view are as follows:

a. Minimum deposit requirement;

b. Stated maturity period;

c. Interest rate is higher than the ordinary savings account;

d. Not payable on sight or demand, but upon maturity or in case of pre-termination, priornotice is required; and

e. Early withdrawal penalty in the form of partial loss or total loss of interest in case of

pre-termination.

The SSDA is for depositors who maintain savings deposits with substantial average daily

balance and which earn higher interest rates. The holding period of an SSDA floats at the option

of the depositor at 30, 60, 90, 120 days or more and for maintaining a longer holding period, thedepositor earns higher interest rates. There is no pre-termination of accounts in an SSDA because

the account is simply reverted to an ordinary savings status in case of early or partial withdrawal

or if the required holding period is not met. Based on the foregoing, the SSDA has all of thedistinct features of a certificate of deposit.
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Petitioner argues that a deposit account evidenced by a passbook cannot be construed as a

certificate of deposit subject to DST under Section 180 of the 1977 NIRC. InInternational

Exchange Bank v. Commissioner of Internal Revenue,47

this Court categorically ruled that a

passbook representing an interest earning deposit account issued by a bank qualifies as a

certificate of deposit drawing interest and should be subject to DST. The Court added that "adocument to be deemed a certificate of deposit requires no specific form as long as there is some

written memorandum that the bank accepted a deposit of a sum of money from a depositor."48

Petitioner also argues that prior to the passage of RA 9243, there was no law subjecting SSDA to

DST. InInternational Exchange Bank v. Commissioner of Internal Revenue,49

the Court held thatthe amendment to include "other evidences of deposits that are drawing interest significantly

higher than the regular savings deposit" was intended to eliminate the ambiguity. The Court

explained:

If at all, the further amendment was intended to eliminate precisely the scheme used by banks of

issuing passbooks to "cloak" its time deposits as regular savings deposits. This is reflected fromthe following exchanges between Mr. Miguel Andaya of the Bankers Association of the

Philippines and Senator Ralph Recto, Senate Chairman of the Committee on Ways and Means,

during the deliberations on Senate Bill No. 2518 which eventually became RA 9243:

MR. MIGUEL ANDAYA (Bankers Association of the Philippines). Just to clarify. Savings

deposit at the present is not subject to DST.

THE CHAIRMAN. Thats right.

MR. ANDAYA. Time deposit is subject.I agree with you in principle that if we are going to

encourage deposits, whether savings or time...

THE CHAIRMAN. Uh-huh.

MR. ANDAYA. ...its questionable whether we should tax it with DST at all, even the question

of imposing final withholding tax has been raised as an issue.

THE CHAIRMAN. If I had it my way, I'll cut it by half.

MR. ANDAYA. Yeah, but I guess concerning the constraint of government revenue, even the

industry itself right now is not pushing in that direction, but in the long term, when most of us in

this room are gone, we hope that DST will disappear from the face of this earth, no.

Now, I think the move of the DOF to expand the coverage of or to add that phrase, "Other

evidence of indebtedness," it just removed ambiguity.When we testified earlier in the House on

this very same bill, we did not interpose any objections if only for the sake of avoiding furtherambiguity in the implementation of DST on deposits. Because of what has happened so far is, we

don't know whether the examiner is gonna come in and say, "This savings deposit is not savings


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but its time deposit." So, I think what DOF has done is to eliminate any confusion. They said

that a deposit that has a maturity...


MR. ANDAYA. ...which is time, in effect, regardless of what form it takes should be subject toDST.

THE CHAIRMAN. Would you include savings deposit now?

MR. ANDAYA. So that if we cloaked a deposit as savings deposit but it has got a fixedmaturity...


MR. ANDAYA. ..that would fall under the purview. (Italics in the original)

DST is imposed on Certi f icates of Deposits Beari ng I nterest

including a special savings account evidenced by a passbook.

Documentary stamp tax is a tax on documents, instruments, loan agreements, and papers

evidencing the acceptance, assignment, sale or transfer of an obligation, right or propertyincident thereto. A DST is actually an excise tax because it is imposed on the transaction rather

than on the document.50

A DST is also levied on the exercise by persons of certain privileges

conferred by law for the creation, revision, or termination of specific legal relationships through

the execution of specific instruments.51

Hence, in imposing the DST, the Court considers not

only the document but also the nature and character of the transaction.

Section 180 of the 1977 NIRC imposes a DST of P0.30 on each P200 of the face value of anycertificate of deposit drawing interest. As correctly observed by the CTA, a certificate of deposit

is a written acknowledgment by a bank of the receipt of a sum of money on deposit which the

bank promises to pay to the depositor, to the order of the depositor, or to some other person orhis order, whereby the relation of debtor or creditor between the bank and the depositor is

created.52

Petitioners SSDA has the following features:

1. Although the money placed in the SSDA can be withdrawn anytime, the money issubject to a holding period in order to earn a higher interest rate. Otherwise, in case of

premature withdrawal, the depositor will not earn the preferred interest ranging from 8%

or higher but only the normal interest rate on regular savings deposit.

2. In order to qualify for an SSDA, the depositor must place a substantial amount of

money of not less than P50,000. This amount is even larger than what is needed to open a


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time deposit which is P20,000. Aside from the substantial amount of money required, this

amount must be maintained within a certain period just like a time deposit.

3. On the issue of penalty, in an SSDA, if the depositor withdraws the money and the

balance falls below the "minimum balance" of P50,000, the interest is reduced. Thiscondition is identical to that imposed on a time deposit that is withdrawn before maturity.53

Based on these features, it is clear that the SSDA is a certificate of deposit drawing interestsubject to DST even if it is evidenced by a passbook and non-negotiable in character. In

International Exchange Bank v. Commissioner of Internal Revenue,54

we held that:

A document to be deemed a certificate of deposit requires no specific form as long as there is

some written memorandum that the bank accepted a deposit of a sum of money from a depositor.

What is important and controlling is the nature or meaning conveyed by the passbook and not the

particular label or nomenclature attached to it, inasmuch as substance, not form, isparamount.lavvph!l.net

Moreover, a certificate of deposit may be payable to the depositor, to the order of the depositor,

or to some other person or his order. From the use of the conjunction or, instead of and, the

negotiable character of a certificate of deposit is immaterial in determining the imposition of

DST.55

InBanco de Oro Universal Bank v. Commissioner of Internal Revenue,56

this Court upheld the

CTAs decision and ruled:

The CTA en banc likewise declared that in practice, a time deposit transaction is covered by acertificate of deposit while petitioner's Investment Savings Account (ISA) transaction is through

a passbook. Despite the differences in the form of any documents, the CTA en bancruled that a

time deposit and ISA have essentially the same attributes and features. It explained that like time

deposit, ISA transactions bear a fixed term or maturity because the bank acknowledges receipt ofa sum of money on deposit which the bank promises to pay the depositor, bearer or to the order

of a bearer on a specified period of time. Section 180 of the 1997 NIRC does not prescribed the

form of a certificate of deposit. It may be any 'written acknowledgment by a bank of the receiptof money on deposit.' The definition of a certificate of deposit is all encompassing to include

a savings account deposit such as ISA. (Emphasis supplied)

Availment of the Tax Amnesty Program

On 24 May 2007, during the pendency of this case before this Court, Republic Act No. 9480 or"An Act Enhancing Revenue Administration and Collection by Granting an Amnesty on All

Unpaid Internal Revenue Taxes Imposed by the National Government for Taxable Year 2005

and Prior Years" (RA 9480), lapsed into law.

The pertinent provisions of RA 9480 are:
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Section 1. Coverage. There is hereby authorized and granted a tax amnesty which shall cover all

national internal revenue taxes for the taxable year 2005 and prior years , with or without

assessments duly issued therefor, that have remained unpaid as of December 31, 2005: Provided,

however, That the amnesty hereby authorized and granted shall not cover persons or cases

enumerated under Section 8 hereof.

x x x

Sec. 6.Immuni ties and Pri vileges. Those who availed themselves of the tax amnesty underSection 5 hereof, and have fully complied with all its conditions shall be entitled to the following

immunities and privileges:

1. The taxpayer shall be immune from the payment of taxes, as well as addition thereto,

and the appurtenant civil, criminal or administrative penalties under the National Internal

Revenue Code of 1997, as amended, arising from the failure to pay any and all internal

revenue taxes for taxable year 2005 and prior years.

x x x

Sec. 8. Exceptions.The tax amnesty provided in Section 5 hereof shall not extend to the

following persons or cases existing as of the effectivity of this Act:

1. Withholding agents with respect to their withholding tax liabilities;

2. Those with pending cases falling under the jurisdiction of the Presidential Commission

on Good Government;

3. Those with pending cases involving unexplained or unlawfully acquired wealth or

under the Anti-Graft and Corrupt Practices Act;

4. Those with pending cases filed in court involving violation of the Anti-Money

Laundering Law;

5. Those with pending criminal cases for tax evasion and other criminal offenses under

Chapter II of Title X of the National Internal Revenue Code of 1997, as amended, and thefelonies of frauds, illegal exactions and transactions, and malversation of public funds

and property under Chapters III and IV of Title VII of the Revised Penal Code; and

6. Tax cases subject of final and executory judgment by the courts.(Emphasis

supplied)

The Department of Finance (DOF) issued DOF Department Order No. 29-07 (DO 29-07).57

Section 6 of DO 29-07 provides:

SEC. 6. Method of Availment of Tax Amnesty. -


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1. Forms/Documents to be filed. - To avail of the general tax amnesty, concerned taxpayers shall

file the following documents/requirements:

a. Notice of Availment in such form as may be prescribed by the BIR;

b. Statements of Assets, Liabilities and Networth (SALN) as of December 31, 2005 insuch form, as may be prescribed by the BIR;

c. Tax Amnesty Return in such form as may be prescribed by the BIR.

x x x

The Acceptance of Payment Form, the Notice of Availment, the SALN, and the Tax Amnesty

Return shall be submitted to the RDO, which shall be received only after complete payment. The

completion of these requirements shall be deemed full compliance with the provisions of

RA 9480. (Emphasis supplied)

The BIR issued Revenue Memorandum Circular No. 19-2008 (RMC 19-2008).58

The pertinent

provisions are:

Who may avail of the amnesty?

The following taxpayers may avail of the Tax Amnesty Program:

P Individuals

P Estates and Trusts

P Corporations

P Cooperatives and tax-exempt entities that have become taxable as of December 31, 2005

P Other juridical entities including partnerships.

Fiscal year taxpayers may likewise avail of the tax amnesty using their Financial Statementending in any month of 2005.

EXCEPT:

Q Withholding agents with respect to their withholding tax liabilities

Q Those with pending cases:

Q Under the jurisdiction of the PCGG


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Q Involving violations of the Anti-Graft and Corrupt Practices Act

Q Involving violations of the Anti-Money Laundering Law

Q For tax evasion and other criminal offenses under the NIRC and/or the RPC

Q I ssues and cases which were ru led by any cour t (even wi thout f inali ty) in favor of the BIR

prior to amnesty availment of the taxpayer.(e.g. Taxpayers who have failed to observe orfollow BOI and/or PEZA rules on entitlement to Income Tax Holiday Incentives and other

incentives)

Q Cases involving issues ruled with finality by the Supreme Court prior to the effectivity of

RA 9480 (e.g. DST on Special Savings Account)

Q Taxes passed on and collected from customers for remittance to the BIR

Q Delinquent Accounts/Accounts Receivable considered as assets of the BIR/Government,including self-assessed tax. (Emphasis supplied)

The BIR also issued Revenue Memorandum Circular No. 69-2007 (RMC 69-2007).59

Thepertinent portion provides:

Q-32 May surviving or new corporations avail of the tax amnesty in behalf of the

corporations absorbed or dissolvedpursuant to a merger or consolidation that took effect prior

to Taxable Year 2005? Can they avail of the Tax Amnesty?

A-32 Yes, these companies can avail of the tax amnesty for purposes of obtaining tax clearancesfor the dissolved or absorbed corporations. (Emphasis supplied)

On 21 September 2007, Metropolitan Bank and Trust Company (Metrobank), the surviving

entity that absorbed petitioners banking business, filed a Tax Amnesty Return,60

paid the

amnesty tax and fully complied with all the requirements61

of the Tax Amnesty Program underRA 9480. Petitioner alleges that by virtue of this availment, petitioner is now deemed "immune

from the payment of taxes as well as additions thereto," and is statutorily discharged from paying

all internal revenue tax liabilities for the taxable year 2005 and prior years. Petitioner contendsthat the availment includes all deficiency tax assessments of the BIR subject of this petition.

A tax amnesty is a general pardon or the intentional overlooking by the State of its authority toimpose penalties on persons otherwise guilty of violation of a tax law. It partakes of an absolute

waiver by the government of its right to collect what is due it and to give tax evaders who wish

to relent a chance to start with a clean slate. A tax amnesty, much like a tax exemption, is neverfavored nor presumed in law. The grant of a tax amnesty, similar to a tax exemption, must be

construed strictly against the taxpayer and liberally in favor of the taxing authority.62
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The DST is one of the taxes covered by the Tax Amnesty Program under RA 9480.

63As

discussed above, petitioner is clearly liable to pay the DST on its SSDA for the years 1996 and

1997. However, petitioner, as the absorbed corporation, can avail of the tax amnesty benefits

granted to Metrobank.

Records show that Metrobank, a qualified tax amnesty applicant,64

has duly complied with therequirements enumerated in RA 9480, as implemented by DO 29-07 and RMC 19-2008.

65

Considering that the completion of these requirements shall be deemed full compliance with thetax amnesty program,

66the law mandates that the taxpayer shall thereafter be immune from the

payment of taxes, and additions thereto, as well as the appurtenant civil, criminal oradministrative penalties under the NIRC of 1997, as amended, arising from the failure to pay any

and all internal revenue taxes for taxable year 2005 and prior years.67

The BIRs inclusion of "issues and cases which were ruled by any court (even without finality)

in favor of the BIR prior to amnesty availment of the taxpayer" as one of the exceptions in RMC

19-2008 is misplaced. RA 9480 is specifically clear that the exceptions to the tax amnestyprogram include "tax cases subject of final and executory judgment by the courts." The present

case has not become final and executory when Metrobank availed of the tax amnesty program.

Wherefore, we GRANTthe petition, and SET ASIDEthe Court of Tax Appeals Decision

dated 23 November 2005 in CTA EB No. 63 solely in view of petitioners availment of the Tax

Amnesty Program.

SO ORDERED.

ANTONIO T. CARPIO

Associate Justice

WE CONCUR:

MA. ALICIA AUSTRIA-MARTINEZ**

Associate Justice

RENATO C. CORONAAssociate Justice

CONCHITA CARPIO MORALESAssociate Justice

TERESITA J. LEONARDO-DE CASTRO

Associate Justice

A T T E S T A T I O N

I attest that the conclusions in the above Decision had been reached in consultation before the

case was assigned to the writer of the opinion of the Courts Division.
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ANTONIO T. CARPIOAssociate Justice

Acting Chairperson*

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

Pursuant to Section 13, Article VIII of the Constitution, and the Division Acting Chairpersons

Attestation, I certify that the conclusions in the above Decision had been reached in consultation

before the case was assigned to the writer of the opinion of the Courts Division.

LEONARDO A. QUISUMBINGActing Chief Justice

Footnotes*Per Special Order No. 552-A.

**Designated member per Special Order No. 553.

***Designated member per Special Order No. 553.

1Under Rule 45 of the Rules of Court.

2Penned by Associate Justice Juanito C. Castaeda, Jr. with Presiding Justice Ernesto D.

Acosta, Associate Justices Lovell R. Bautista, Erlinda P. Uy, Olga Palance-Enriquez,concurring and Associate Justice Caesar A. Casanova, dissenting.

3Philippine Banking Corporation was merged with the Global Business Bank, Inc. On 4

September 2002, Global Business Bank, Inc. was changed into a holding company underthe name Global Business Holdings, Inc. On 11 October 2002, the banking business of

Global Business Bank, Inc. was subsequently transferred and absorbed by Metropolitan

Bank and Trust Company.

4Rollo, p. 5.

5

Id.6Id. at 7.

7Id. at 8.

8Id. at 14.
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9The 1977 NIRC was amended by Republic Act No. 7660. An Act Rationalizing Further

the Structure and Administration of the Documentary Stamp Tax, Amending for the

Purpose Certain Provisions of the National Internal Revenue Code, as Amended,

Allocating Funds for Specific Programs, and For Other Purposes (23 December 1993).

10Rollo, pp. 11-12.

11Id. at 13.

12Id. at 15-16.

13Id. at 16.

14Id. at 18.

15

An Act Rationalizing the Provisions of the Documentary Stamp Tax of the NationalInternal Revenue Code of 1997, as Amended and for other Purposes. Promulgated on 17February 2004.

16Rollo, pp. 22-23.

17Id. at 24.

18Id. at 429.

19Id. at 429-430.

20Id. at 430-431.

21424 Phil. 721 (2002).

22Rollo, p. 433.

23Id. at 36-37.

24Id. at 42-43.

25

Supra.26

Rollo, pp. 43-44.

27Id. at 44.

28Id.
http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt9http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt9http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt10http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt10http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt11http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt11http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt12http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt12http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt13http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt13http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt14http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt14http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt15http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt15http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt16http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt16http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt17http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt17http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt18http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt18http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt19http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt19http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt20http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt20http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt21http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt21http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt22http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt22http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt23http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt23http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt24http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt24http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt25http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt25http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt26http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt26http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt27http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt27http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt28http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt28http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt28http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt27http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt26http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt25http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt24http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt23http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt22http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt21http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt20http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt19http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt18http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt17http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt16http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt15http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt14http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt13http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt12http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt11http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt10http://www.lawphil.net/judjuris/juri2009/jan2009/gr_170574_2009.html#rnt9


25/78

29

Id. at 44-45.

30Id. at 45.

31

Id. at 45-46.32

Id. at 46.

33Id. at 46-47.

34Id. at 47.

35Id. at 48-49.

36Id. at 49.

37Id. at 3.

38Id. at 7.

39Supra note 21 at 730.

40Websters Third New International Dictionary, Unabridged.

41Issued 1993 and amended in 2005. Part II- Deposit and Borrowing Operations.

42

BSP Manual of Accounts for Expanded Commercial Banks and Commercial Banks 2-1-02-02, p. 27.

43Id., 2-1-02-04, at 28.

44Id., 2-1-02-06, at 28.

45Id., 2-1-02-08, at 29.

46BIR Revenue Memorandum Circular No. 16-2003, Defining the Term "Certificate of

Deposit" for the Purpose of Clarifying its Taxability Under Section 180 of the National

Internal Revenue Code (Tax Code) of 1997, 18 February 2003.47

G.R. No. 171266, 4 April

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