Misamis Oriental Association of Coco Traders, Inc. vs. Department of Finance Secretary [G.R. No.

108524. November 10, 1994]

Facts: Petitioner Misamis Oriental Association of Coco Traders, Inc. is a domestic corporation whose
members, individually or collectively, are engaged in the buying and selling of copra in Misamis Oriental.
The petitioner alleges that prior to the issuance of Revenue Memorandum Circular 47-91 on June 11, 1991,
which implemented VAT Ruling 190-90, copra was classified as agricultural food product under $ 103(b) of
the National Internal Revenue Code and, therefore, exempt from VAT at all stages of production or
distribution. Under Sec. 103(b) of the NIRC, the sale of agricultural food products in their original state is
exempt from VAT at all stages of production or distribution. The reclassification had the effect of denying
to the petitioner the exemption it previously enjoyed when copra was classified as an agricultural food
product under 103(b) of the NIRC. Petitioner challenges RMC No. 47-91 on various grounds.
Issues:
(1) Whether the BIR is the proper the competent government agency to determine the proper classification
of food products.
(2) Whether RMC No. 47-91 is discriminatory and violative of the equal protection clause of the
Constitution.
Held: The court, as to the first issue, ruled in the affirmative. The BIR, as the government agency charged
with the implementation and interpretation of the tax laws, is entitled to great respect. In interpreting Section
103 of the NIRC, the Commissioner of Internal Revenue correctly gave it a strict construction consistent
with the rule that tax exemptions must be strictly construed against the taxpayer and liberally in favor of the
state. The ruling was made by the Commissioner of Internal Revenue in the exercise of his power under
245 of the NIRC to "make rulings or opinions in connection with the implementation of the provisions of
internal revenue laws, including rulings on the classification of articles for sales tax and similar purposes.
With regard to the second issue, the court ruled in the negative. Petitioner likewise claims that RMC No.
47-91 is violative of the equal protection clause because while coconut farmers and copra producers are
exempt, traders and dealers are not, although both sell copra in its original state. Petitioners add that oil
millers do not enjoy tax credit out of the VAT payment of traders and dealers. The argument has no merit.
There is a material or substantial difference between coconut farmers and copra producers, on the one
hand, and copra traders and dealers, on the other. The former produce and sell copra, the latter merely sell
copra. The Constitution does not forbid the differential treatment of persons so long as there is a reasonable
basis for classifying them differently. It is not true that oil millers are exempt from VAT. Pursuant to 102
of the NIRC, they are subject to 10% VAT on the sale of services.
Case Digests: Labor Law
CALALANG v. WILLIAMS, 70 PHIL 726, GR No. 47800, December 2, 1940

FACTS: The National Traffic Commission resolved that animal-drawn vehicles be prohibited from passing along
some major streets such a Rizal Ave. in Manila for a period of one year from the date of the opening of the Colgante
Bridge to traffic. The Secretary of Public Works approved the resolution on August 10,1940. The Mayor of Manila
and the Acting Chief of Police of Manila have enforced the rules and regulation. As a consequence, all animal-drawn
vehicles are not allowed to pass and pick up passengers in the places above mentioned to the detriment not only of
their owners but of the riding public as well.

ISSUE: Does the rule infringe upon the constitutional precept regarding the promotion of social justice? What is
Social Justice?

HELD: No. The regulation aims to promote safe transit and avoid obstructions on national roads in the interest and
convenience of the public. Persons and property may be subject to all kinds of restraints and burdens in order to secure
the general comfort, health, and prosperity of the State. To this fundamental aims of the government, the rights of the
individual are subordinated.
Social justice is neither communism, nor despotism, nor atomism, nor anarchy, but the humanization of laws and
the equalization of social and economic forces by the State so that justice in its rational and objectively secular
conception may at least be approximated. Social justice means the promotion of the welfare of all the people, the
adoption by the Government of measures calculated to insure economic stability of all the competent elements of
society, through the maintenance of a proper economic and social equilibrium in the interrelations of the members of
the community, constitutionally, through the adoption of measures legally justifiable, or extra-constitutionally,
through the exercise of powers underlying the existence of all governments on the time-honored principles of Salus
Populi est Suprema Lex.(Justice Laurel)

CIR vs. Ironcon Builders and Development Corp.G.R. No. 180042 , February 8, 2010Facts:
Respondent Ironcon Builders and Development Corporation (Ironcon) sought the refund by the Bureau of
Internal Revenue (BIR) of its income tax overpayment and excess creditable VAT. The Commissioner continued not
to act on its claims which made Ironcon to bring it up to CTA for review. CTA 2nd Division held that taxpayers have
the option to either carry over the excess credit or ask for a refund, as regards with the overpayment. Apparently, the
respondent filed two income tax returns for the year 2000, an original and an amended one. Although Ironcons
amended return indicated a preference for refund of the overpaid tax, the CTA ruled that respondents original
choice is regarded as irrevocable, pursuant to Sec.76 of R.A. No. 8424,and moreover found out that Ironcon actually
carried over the credit from the overpayment and applied it to the tax due for 2001, and hence, denied Ironcons
claim for the refund. As to the claim for VAT refund, CTA found that by the end of 2000, respondent had excess tax
credit carried over from 1999, an allowable input tax and a 6% creditable VAT, withheld and remitted by its clients,
which are deductible from Ironcons total output VAT liability of P20+M. The CTA ruled that respondent had no
more output VAT against which the excess creditable VAT withheld may be applied or credited, the VAT
withheld had been excessively paid. Because Ironcon did not present its VAT returns for the succeeding quarters
of 2001, 2nd Division denied the refund. Upon MfR of respondent, now attaching the required VAT returns, CTA then
granted the application having found that Ironcon sufficiently proved that its excess creditable VAT withheld was not
carried over or applied to any input VAT for 2001. CIR filed its own MfR for the amended decision, which CTA
denied, and CTA en banc denied. Petitioner CIRs main contention is that, since these amounts were withheld in
accordance with what the law provides, they cannot be regarded as erroneously or illegally collected as contemplated
in Sections 204(C) and 229 of the NIRC. Petitioner CIR also points out that since the NIRC does not specifically grant
taxpayers the option to refund excess creditable VAT withheld, it follows that such refund cannot be allowed. Excess
creditable VAT withheld is much unlike excess income taxes withheld.
Issue:
Whether or not creditable VAT withheld from a taxpayer in excess of its output VAT liability may be the subject of a
tax refund in place of a tax credit.
Held:
YES. In the latter case, Sections 76 and 58(D) of the NIRC specifically make the option to seek a refund available to
the taxpayer. The CIR submits thus that the only option available to taxpayers in case of excess creditable VAT
withheld is to apply the excess credits to succeeding quarters. But the amounts involved in this case are creditable
withholding taxes, not final taxes subject to withholding. As the CTA correctly points out, taxes withheld on certain
payments under the creditable withholding tax system are but intended to approximate the tax due from the payee.
The withheld taxes remitted to the BIR are treated as deposits or advances on the actual tax liability of the taxpayer,
subject to adjustment at the proper time when the actual tax liability can be fully and finally determined. Even if the
law does not expressly state that Ironcons excess creditable VAT withheld is refundable, it may be the subject of a
claim for refund as an erroneously collected tax under Sections 204(C) and 229. Even if the law does not expressly
state that Ironcons excess creditable VAT withheld is refundable, it may be the subject of a claim for refund as an
erroneously collected tax under Sections 204(C) and 229. The rule is that before a refund may be granted, respondent
Ironcon must show that it had not used the creditable amount or carried it over to succeeding taxable quarters.
Substantial justice dictates that the government should not keep money that does not belong to it at the expense of
citizens. Since he ought to know the tax records of all taxpayers, petitioner CIR could have easily disproved the
claimants allegations. That he chose not to amounts to a waiver of that right. Also, the CIR failed in this case to make
a timely objection to or comment on respondent Ironcons offer of the documents in question despite an opportunity
to do so.
11
Taking all these circumstances together, it was sufficiently proved that Ironcons excesscreditable VAT withheld was
not carried over to succeeding taxable quarters.