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COMMISSIONER OF INTERNAL REVENUE, Petitioner, v. FILIPINAS COMPAIA DE SEGUROS,Respondent.

1. STATUTORY CONSTRUCTION; STATUTES, PROSPECTIVE IN OPERATION. A statute should be consde!ed as"!os"ect#e n ts o"e!aton $hethe! t enacts, a%ends o! !e"eals a ta&, unless the lan'ua'e o( the statute clea!l)de%ands o! e&"!esses that t shall ha#e a !et!oact#e e((ect.

*. TA+ A-S; REA ESTATE EAER/S TA+; I0POSITION O 2I32ER RATE O TA+ES ATER T2E TA+PAYER2AS PAI T2E TA+ UNER T2E O RATE. On 4anua!) 5, 1678, !es"ondent, n acco!dance $th the sn'le !atethen "!esc!bed unde! Secton 19* o( the Natonal Inte!nal Re#enue Code, "ad ts !eal estate deale!/s (&ed annual ta& (o!the )ea! 1678. Subse:uentl), sad Secton 19* o( the Code $as a%ended b) Re"ublc Act No. 181* $hch %"oses ne$and h'he! !ates o( !eal estate deale!/s ta&. secton *1 the!eo( "!o#des that the Act shall ta Subse:uentl) sad Secton 19* o( the Code $as a%ended b) Re"ublc Act No. 181*, $hch too< e((ect on Au'ust*5, 1678, b) "!o#dn' a scale o( '!aduated !ates= P17@ ( the annual nco%e o( the !eal estate deale! (!o% hsbusness as such s P5,@@@, but does not e&ceed P1@,@@@; P@@, ( such annual nco%e e&ceeds P1@,@@@ butdoes not e&ceed P@,@@@; and P7@@ ( such annual nco%e e&ceeds P@,@@@.

On 4une 1B, 167B, "ettone! Co%%ssone! o( Inte!nal Re#enue assessed and de%anded (!o% !es"ondent$hose annual nco%e e&ceeded P@,@@@.@@D the a%ount o( P7@.@@ as addtonal !eal estate deale!/s (&edannual ta& (o! the )ea! 1678.

> On 4ul) 18, 167B, !es"ondent $!ote a lette! to "ettone! statn' that the !eco!ds $ll sho$ that the !eal estatedeale!/s (&ed ta& (o! 1678 o( ths Co%"an) $as (ull) "ad b) us "!o! to the e((ect#t) o( Re"ublc Act No. 181*

$hch a%ended, a%on' othe! thn's, Sectons 1B9 and 19* o( the Natonal Inte!nal Re#enue Code.> On Octobe! *, 167B, "ettone! n(o!%ed !es"ondent that Re"ublc Act No. 1978 $hch too< e((ect 4une **, 167B

a%ended the date o( e((ect#t) o( Re"ublc Act 181* to 4anua!) 1, 167B. 2o$e#e!, the sad a%end%ent a""lesonl) to (&ed ta&es on occu"aton and not to (&ed ta&es on busness. 2ence, "ettone! nssted that !es"ondentshould "a) the a%ount o( P7@.@@ as addtonal !eal estate deale!/s (&ed annual ta& (o! the )ea! 1678.

> On No#e%be! *@, 167B, !es"ondent (led $th the Cou!t o( Ta& A""eals a "etton (o! !e#e$.> Pettone! (led hs ans$e! on ece%be! 8, 167B.> Pettone! "!actcall) ad%tted the %ate!al (actual alle'atons n the "etton (o! !e#e$. The case $as sub%tted

(o! ud'%ent on the "leadn's.> On No#e%be! **, 1679, the Cou!t o( Ta& A""eals !ende!ed a decson sustann' the contenton o( !es"ondent

co%"an) and o!de!n' the "ettone! Co%%ssone! o( Inte!nal Re#enue to desst (!o% collectn' the P7@.@@addtonal assess%ent.

Issue:

-hethe! R.A. 181* be '#en a !et!oact#e e((ect.

Held:

Snce the !es"ondent has "ad the annual ta& then "!esc!bed (o! the )ea! 1678, to !e:u!e t to "a) the addtonal ta&"!o#ded n Re"ublc Act 181* $ould !esult n the %"oston u"on !es"ondent o( a ta& bu!den to $hch t $as not lablebe(o!e the enact%ent o( sad a%endato!) act, thus !ende!n' ts o"e!aton !et!oact#e !athe! than "!os"ect#e, $hchcannot be done, as t $ould cont!a#ene Secton *1 o( sad Act as $ell as the establshed !ule !e'a!dn' the "!os"ect#t)o( o"e!aton o( statutes.

On the 'ene!al "!nc"le o( "!os"ect#t) o( statutes, on the lan'ua'e o( Re"ublc Act 181* tsel(, es"ecall) Secton *1

the!eo(, and on the bass o( ts ntended sco"e and "u!"ose as dsclosed n the Con'!essonal Reco!ds, $e (nd ou!sel#esn a'!ee%ent $th the Cou!t o( Ta& A""eals.

-he!e(o!e, the decson a""ealed (!o% s he!eb) a((!%ed, $thout costs.

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Re"ublc o( the Phl""nesSUPREME COURT

0anla

EN FANC

G.R. No. L-14! A"#$l %&, 1&'!

COMMISSIONER OF INTERNAL REVENUE,"ettone!,#s.FILIPINAS COMPAIA DE SEGUROS,!es"ondent.

Assistant Solicitor General Jose P. Alejandro and Special Attorney Jaime M. Maza for petitioner.Ramon T. Garcia for respondent.

(ARRERA, J.:

Res"ondent l"nas Co%"a?a de Se'u!os, an nsu!ance co%"an), s also en'a'ed n busness as a !eal estatedeale!. On 4anua!) 5, 1678, !es"ondent, n acco!dance $th the sn'le !ate then "!esc!bed unde! Secton 19* o( theNatonal Inte!nal Re#enue Code.1"ad the a%ount o( P17@.@@ as !eal estate deale!Gs (&ed annual ta& (o! the )ea!1678. Subse:uentl) sad Secton 19* o( the Code $as a%ended b) Re"ublc Act No. 181*, $hch too< e((ect on

Au'ust *5, 1678, b) "!o#dn' a s%all o( '!aduated !ates= P17@ ( the annual nco%e o( the !eal estate deale! (!o%hs busness as such s P5,@@@, but does not e&ceed P1@,@@@; P@@, ( such annual nco%e e&ceeds P1@,@@@ butdoes not e&ceed P@,@@@; and P7@@ ( such annual nco%e e&ceeds P@,@@@.

On 4une 1B, 167B, "ettone! Co%%ssone! o( Inte!nal Re#enue assessed and de%anded (!o% !es"ondent $hoseannual nco%e e&ceeded P@,@@@.@@D the a%ount o( P7@.@@ as addtonal !eal estate deale!Gs (&ed annual ta& (o!the )ea! 1678. On 4ul) 18, 167B, !es"ondent $!ote a lette! to "ettone! statn' that the !eco!ds $ll sho$ that the!eal estate deale!Gs (&ed ta& (o! 1678 o( ths Co%"an) $as (ull) "ad b) us "!o! to the e((ect#t) o( Re"ublc Act No.181* $hch a%ended, a%on' othe! thn's, Sectons 1B9 and 16* o( the Natonal Inte!nal Re#enue Code. And, asto the !et!oact#e e((ect o( sad Re"ublc Act No. 181*, !es"ondent added that the Re"ublc Act No. 1978 $hch,

a%on' othe! thn's, a%ended Secton 19* o( the Natonal Inte!nal Re#enue Code, Con'!ess has clea!l) sho$n tsntenton $hen t "!o#ded that the nc!ease n !ates o( ta&es en#soned b) Re"ublc Act No. 181* s to be %adee((ect#e as o( 1 4anua!) 167B.

On Octobe! *, 167B, "ettone! n(o!%ed !es"ondent that Re"ublc Act No. 1978 $hch too< e((ect 4une **, 167Ba%ended the date o( e((ect#t) o( Re"ublc Act 181* to 4anua!) 1, 167B. 2o$e#e!, the sad a%end%ent a""les onl)to (&ed ta&es on occu"aton and not to (&ed ta&es on busness. 2ence, "ettone! nssted that !es"ondent should"a) the a%ount o( P7@.@@ as addtonal !eal estate deale!Gs (&ed annual ta& (o! the )ea! 1678.

On No#e%be! *@, 167B, !es"ondent (led $th the Cou!t o( Ta& A""eals a "etton (o! !e#e$. To ths "etton,"ettone! (led hs ans$e! on ece%be! 8, 167B. As "ettone! "!actcall) ad%tted the %ate!al (actual alle'atons nthe "etton (o! !e#e$, the case $as sub%tted (o! ud'%ent on the "leadn's.

On No#e%be! **, 1679, the Cou!t o( Ta& A""eals !ende!ed a decson sustann' the contenton o( !es"ondentco%"an) and o!de!n' the "ettone! Co%%ssone! o( Inte!nal Re#enue to desst (!o% collectn' the P7@.@@addtonal assess%ent. !o% ths decson, "ettone! a""ealed to us.

As a !ule, la$s ha#e no !et!oact#e e((ect, unless the cont!a!) s "!o#ded. A!t. 5, C#l Code o( the Phl""nes;0anla T!adn' and Su""l) Co. #s. Santos, et al., 88 Phl., *B; a P!o#so!a l"na #s. edda, 88 Ph 7B.DOthe!$se stated, a state shouHd be consde! as "!os"ect#e n ts o"e!aton $hethe! t enacts, a%en o! !e"eals ata&, unless the lan'ua'e o( the statute clea!l) de%ands o! e&"!esses that t shall ha#e a !et!oact#e e((ect 81 C. 4.18@*, cted n o!e%o #s. Posadas, 85 Ph 7.D The !ule a""les $th '!eate! (o!ce to the case ba!, consde!n' thatRe"ublc Act No. 181*, $hch %"oses the ne$ and h'he! !ates o( !eal estate deale!Gs annual (&ed ta&, e&"!essl)"!o#des n Secton *1 the!eo( the sad Act shall ta

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Provided, further, That an) a%ount collected n e&cess o( the !ates n e((ect "!o! to 4anua!) one, nneteenhund!ed and ((t)>se#en, shall be !e(unded o! c!edted to the ta&"a)e! conce!ned subect to the "!o#sons o(secton th!ee hund!ed and nne o( ths Code. Sec. 19* bD *D 1D.D

Pettone!, ho$e#e!, contends that the abo#e>:uoted "!o#son !e(e!s onl) to (&ed ta&es on occu"aton and does notco#e! (&ed ta&es on busness, such as the !eal estate deale!Gs (&ed ta& he!en n#ol#ed. Ths s techncall) co!!ect,but $e note (!o% the delbe!atons n the Senate, $he!e the "!o#so n :ueston $as nt!oduced as an a%end%ent,that sad 2ouse Fll No. 7616 $hch beca%e Re"ublc Act No. 1978 $as consde!ed, a%ended, and enacted ntola$, n o!de! "!ecsel) that the n:utous e((ects $hch $e!e then ben' (elt b) ta&"a)e!s. n 'ene!al, on account o(

the a""!o#al o( Re"ublc Act No. 181*, -hch $as ben' '#en !et!oact#e e((ect b) the Fu!eau o( Inte!nal Re#enueb) collectn' these ta&es !et!oact#el) (!o% 4anua!) 1, 1678, be el%nated and co%"lants a'anst such acton be(nall) settled. See Senate Con'!essonal Reco!d, 0a) 5, 167B, "". 1@*1@.D

It s also to be obse!#ed that sad 2ouse Fll No. 7916 as o!'nall) "!esented, $as e&"!essl) ntended to a%endce!tan "!o#sons o( the Natonal Inte!nal Re#enue Code dealn' on (&ed ta&es on usiness. The "!o#sons n!es"ect o( (&ed ta& on occupation $e!e %e!el) subse:uentl) added. Ths $ould see% to ndcate that the "!o#so n:ueston $as ntended to co#e! not onl) (&ed ta&es on occu"aton, but also (&ed ta&es on busness. SenateCon'!essonal Reco!d, 0a!ch B, 167B, ". 555.DThe (act that sad "!o#so $as "laced onl) at the end o( "a!a'!a"hFD On occu"aton s not, the!e(o!e, #e$ o( the c!cu%stances, decs#e and un%sta