IN THE MATTER TO DECLARE IN CONTEMPT OF COURT HON. SIMEON A.

DATUMANONG in the latter’s

capacity as Secretary of the Department of Public Works and Highways
G.R. No. 150274
4 August 2006

FACTS:

The Ombudsman Task Force on Public Works and Highways filed with the Office of the Ombudsman an
administrative complaint for dishonesty, falsification of official documents, grave misconduct, gross neglect of duty,
violation of office rules and regulations, and conduct prejudicial to the service against petitioner Jimmie F. Tel-
Equen and several others, relative to the anomalous payment of ₱553,900.00 of the bailey bridge components
owned by the government.

ADMINISTRATIVE ADJUDICATION BUREAU OF THE OFFICE OF THE OMBUDSMAN - GUILTY

The Administrative Adjudication Bureau of the Office of the Ombudsman found respondents guilty of
dishonesty, falsification of public documents, misconduct and conduct prejudicial to the best interest of the service
and ordered their dismissal from the service with accessory penalties.

After the denial of motions for reconsideration, three petitions were filed before the Supreme Court which
were consolidated and referred to the Court of Appeals. (Appeals from decisions of the Ombudsman in
administrative cases should be referred to the appellate court under Rule 43 of the Rules of Court)

COURT OF APPEALS – AFFIRMED DECISION AND DISMISSED THEM FROM SERVICE; EXONERATED 2
RESPONDENTS FOR LACK OF EVIDENCE

The Court of Appeals affirmed with modification the decision of the Administrative Adjudication Bureau of
the Office of the Ombudsman petitioner and two co-accused guilty as charged and dismissed them from the service
while the other two respondents were exonerated from administrative liability for lack of evidence.

Petitioner, together with his two co-accused, appealed from the decision of the Court of Appeals. While the
appeal was still pending, Secretary Datumanong issued a Memorandum Order dismissing them from the service.
Hence, Tel-Equen filed a petition to cite Secretary Datumanong in contempt of court for issuing the said
Memorandum Order.

ISSUE:

Whether or not Datumanong should be cited in contempt

HELD:

The Supreme Court held that the contempt power must be exercised judiciously and sparingly with utmost
self-restraint with the end in view of utilizing the same for correction and preservation of the dignity of the court,
not for retaliation or vindication. The issuance of the Memorandum Order was not a contumacious conduct
(implies wilfulness, bad faith or with deliberate intent to cause injustice) tending, directly or indirectly or indirectly,
to impede, obstruct or degrade the administration of justice. It may be considered only an error of judgment or a
result of confusion with regard to the following rules: 1. Administrative Code of 1987 which state that the decisions
of the CSC are immediately executory even pending appeal; and 2. Rules of Procedure under the Ombudsman Act
(which should be applied in this case) which state that all other decisions of the Office of the Ombudsman which
imposed penalties that are not enumerated in Section 27 are not final, unappealable and immediately executory.

Secretary Datumanong cannot be held in contempt of court for issuing the Memorandum Order in the
absence of malice or wrongful conduct in issuing it. However, two events supervened since the filing of the petition
that would support its dismissal. First, the Supreme Court in G.R. No. 144694 (Petitioners’ appeal) affirmed the
decisions of the Court of Appeals and Administrative Adjudication Bureau of the Office of the Ombudsman ordering
his dismissal. Second, Section 7, Rule III of the Rules of Procedure of the Office of the Ombudsman was amended by
Administrative Order No. 17 to the effect that the decisions of the Office of the Ombudsman are executory even if
pending appeal.

The petition to cite former Secretary Simeon A. Datumanong of the DPWH in contempt of court for issuing
Memorandum Order dated October 5, 2001 dismissing petitioner Jimmie F. Tel-Equen from the service is
DISMISSED for lack of merit.

DOCTRINE/S:

 Where there are two statutes that apply to a particular case, that which was specially designed for the said
case must prevail over the other.
 Procedural laws are construed to be applicable to actions pending and undetermined at the time of their
passage, and are deemed retroactive in that sense and to that extent. As a general rule, the retroactive
application of procedural laws cannot be considered violative of any personal rights because not vested right
may attach to nor rise therefrom.

DOMINGO NEYPES, LUZ FAUSTINO, ROGELIO FAUSTINO, LOLITO VICTORIANO, JACOB OBANIA and DOMINGO
CABACUNGAN vs. HON. COURT OF APPEALS, HEIRS OF BERNARDO DEL MUNDO, LAND BANK OF THE
PHILLIPPINES and HON. ANTONIO N. ROSALES
G.R. No. 141524
14 September 2005

FACTS:

Petitioners filed an action for annulment of judgment and titles of land and/or reconveyance and/or
reversion with preliminary injunction before the Regional Trial Court, Branch 43, of Roxas, Oriental Mindoro,
against the Bureau of Forest Development, Bureau of Lands, Land Bank of the Philippines and the heirs of Bernardo
del Mundo.

TRIAL COURT - DISMISSED

The trial court dismissed petitioners’ complaint on the ground that the action had already prescribed.
Petitioners allegedly received a copy of the order of dismissal on March 3, 1998 and, on the 15 th day thereafter or
on March 18, 1998, filed a motion for reconsideration. On July 1, 1998, the trial court issued another order
dismissing the motion for reconsideration which petitioners received on July 22, 1998. Five days later, on July 27,
1998, petitioners filed a notice of appeal and paid the appeal fees on August 3, 1998.

On August 4, 1998, the court a quo denied the notice of appeal, holding that it was filed eight days late.
Petitioners filed a motion for reconsideration but this too was denied.

COURT OF APPEALS – DISMISSED THE PETITION AND MOTION FOR RECONSIDERATION

Petitioners assailed the dismissal of the notice of appeal before the Court of Appeals via a petition for
certiorari and mandamus under Rule 65 of the 1997 Rules of Civil Procedure. They claimed that they had
seasonably filed their notice of appeal. When they filed their notice of appeal on July 27, 1998, only five days had
elapsed and they were well within the reglementary period for appeal. The Court of Appeals dismissed the petition
ruling that the 15-day period to appeal should have been reckoned from March 3, 1998 or the day they received the
February 12, 1998 order dismissing their complaint. Petitioners filed a motion for reconsideration of the decision
which was denied.

Hence, this petition for review under Rule 45 of the Rules of Court.

ISSUE:
 Whether or not petitioners filed their notice of appeal on time

HELD:

Based on Section 39 of BP 129 and Rule 41, Section 3 of the 1997 Rules of Procedure, an appeal should be
taken within 15 days from the notice of judgment or final order (one that finally disposes of a case, leaving nothing
more for the court to do with respect to it; an adjudication on the merits which, considering the evidence presented
at the trial, declares categorically what the rights and obligations of the parties are; or it may be an order or
judgment that dismisses an action) appealed from.

In Quelnan v. VHF Philippines, Inc., the Supreme Court reversed the trial court and declared that it was the
denial of the motion for reconsideration of an order of dismissal of a complaint which constituted the final order as
it was what ended the issues raised there. In Apuyan v. Haldeman et al. where Supreme Court considered the order
denying the petitioner’s motion for reconsideration as the final order which finally disposed if the issues involved
in the case. Based on the aforementioned cases, Supreme Court sustained petitioners’ view that the order dated
July 1, 1998 denying their motion for reconsideration was the final order contemplated in the Rules.

To standardize the appeal periods provided in the Rules and to afford litigants fair opportunity to appeal
their cases, the Court deems it practical to allow a fresh period of 15 days within which to file notice of appeal in
the Regional Trial Court, counted from the receipt of the order dismissing a motion for a new trial or motion for
reconsideration. Henceforth, the fresh period rule shall also apply to Rule 40 governing appeals from Municipal
Trial Courts to the Regional Trial Court; Rule 42 on petitions for review from the Regional Trial Courts to the Court
of Appeals; Rule 43 on appeals from quasi-judicial agencies to the Court of Appeals and Rule 45 governing appeals
by certiorari to the Supreme Court. The new rule aims to regiment or make the appeal period uniform, to be
counted from receipt of the order denying the motion for new trial, motion for reconsideration (whether full or
partial) or any final order or resolution.

Supreme Court held that petitioners seasonably filed their notice of appeal within the fresh period of 15
days, counted from July 22, 1998 (the date of receipt of notice denying their motion for reconsideration).

The petition was GRANTED and the assailed decision of the Court of Appeals was REVERSED and SET
ASIDE.

DOCTRINE/S:

 The right to appeal is neither a natural right nor a part of due process. It is merely a statutory privilege and
may be exercised only in the manner and in accordance with the provisions of the law.
 The perfection of an appeal in the manner and within the period permitted by law is not only mandatory but
also jurisdictional.
 The Supreme Court may promulgate procedural rules in all courts. It has the sole prerogative to amend, repeal
or even establish new rules for a more simplified and inexpensive process, and the speedy disposition of cases.

COMMISSIONER OF INTERNAL REVENUE vs. MIRANT PAGBILAO CORPORATION

G.R. No. 159593
12 October 2006

FACTS:

Mirant Pagbilao Corporation is a domestic corporation duly organized and existing under and by virtue of
the laws of the Philippines. It is licensed by the Securities and Exchange Commission to principally engage in the
business of power generation and subsequent sale thereof. It is registered with the Bureau of Internal Revenue as a
VAT registered entity.
 For the period April 1, 1996 to December 31, 1996, MPC seasonably filed its Quarterly VAT Returns
reflecting accumulated input taxes in the amount of ₱39,330,500.85 which were allegedly paid by MPC to the
suppliers of capital goods and services for the construction and development of the power generating plant and
other related facilities.

Pursuant to the procedures prescribed under Revenue Regulations No. 7-95, as amended, MPC filed an
application for tax credit or refund of the unutilized VAT paid on capital goods. Without waiting for an answer from
the BIR Commissioner, MPC filed the instant petition for review in order to toll the running of the two-year
prescriptive period for claiming refund under the law.

BIR COMMISSIONER – FILING OF PETITION IS PREMATURE

The BIR Commissioner answered that the filing of the present petition is premature since MPC’s claim for
refund is still pending investigation and consideration before the office of the BIR Commissioner accordingly. The
BIR Commissioner averred that it is incumbent upon MPC to show that the claim for tax credit has been filed within
the prescriptive period under the Tax Code; and the taxes paid are presumed to have been collected and received in
accordance with law and revenue regulations.

While the case was pending trial, a revenue officer was assigned by the Revenue District Officer to
investigate MPC’s application for tax credit or refund of input taxes. A memorandum order was submitted
recommending a favorable action but in a reduced amount of ₱49,616.40 representing unpaid input taxes on
capital goods.

Due to the voluminous nature of evidence presented, MPC availed of the services of an independent
Certified Public Accountant pursuant to CTA Circular No. 1-95, as amended. A report was presented stating the
audit procedures performed and the finding that out of the total claimed input taxes of ₱39,330,500.85, only the
sum of ₱28,745,502.40 was properly supported by valid invoices and/or official receipts.

COURT OF TAX APPEALS – RULED IN FAVOR OF MPC BUT REDUCED THE AMOUNT OF REFUND; DENIED BIR
COMMISSIONER’S MOTION FOR RECONSIDERATION; DISMISSED PETITION FOR REVIEW FOR LACK OF MERIT

The CTA ruled in favor of MPC and declared that MPC had overwhelmingly proved, through VAT invoices
and official receipts it had presented, that its purchases of goods and services were necessary in the construction of
power plant facilities which it used in its business of power generation and sale. The tax court, however, reduced
the amount of refund to which MPC was entitled. The CTA subsequently denied the BIR Commissioner’s Motion for
Reconsideration.

Aggrieved, the BIR Commissioner filed with the Court of Appeals a Petition for Review, identifying and
discussing as grounds for its Petition arguments that were totally new and were never raised before the CTA. The
CTA found no merit in the BIR Commissioner’s Petition. It pronounced that: 1.) the BIR Commissioner cannot
validly change his theory of the case on appeal; 2) the MPC is not a public utility within the contemplation of law;
3.) the sale by MPC of its generated power to the National Power Corporation (NAPOCOR) is subject to VAT at zero
percent rate; and 4.) the MPC, as a VAT-registered taxpayer, may apply for tax credit.

Refusing to give up to his cause, BIR Commissioner filed a petition for review before the Supreme Court on
the ground that the Court of Appeals committed reversible error in affirming the decision of the CTA. He argues
that 1.) the observance of procedural rules may be relaxed considering that technicalities are not ends in
themselves but exist to protect and promote substantive rights of the parties; and 2.) a tax refund is in the nature of
a tax exemption which must be construed strictly against the taxpayer. He reiterates his position that MPC, a public
utility, is exempt from VAT, subject instead to franchise tax and, thus, not entitled to a refund of input VAT on its
purchase of capital goods and services.

ISSUE:

Whether or not Mirant Pagbilao Corporation is entitled to a tax credit

HELD:

DOCTRINE/S:

 Provisions in tax refund and credit are construed strictly against the taxpayer as they are in the nature of a tax
exemption. (special and affirmative defense of BIR Commissioner)
 In an action for refund or tax credit, the taxpayer has the burden to show that the taxes paid were erroneously
or illegally paid and failure to sustain the said burden is fatal to the action for refund. (special and affirmative
defense of BIR Commissioner)