PAL VS EDU

FACTS: This case is about PAL AIRLINE who is engaged in air transportation and under the legislative
franchise. Under the said franchise, PAL is exempt from the payment of taxes . They are only entitled to
pay 2% of its gross income from its operation in lieu of payment of taxes, permit etc...However, Land
Transportation Commissioner Romeo F. Elevate issued a regulation otherwise known as the Land and
Transportation and Traffic Code, requiring all tax exempt entities to pay motor vehicle registration fees.
Despite PAL's protestations, Elevate refused to register PAL's motor vehicles unless the amounts
imposed under Republic Act 4136 were paid. PAL thus paid the registration fees of its motor vehicles
under protest. After paying under protest, PAL through counsel, wrote a letter to Land Transportation
Commissioner Romeo Edu demanding a refund of the amounts paid. Edu denied the request for refund.
Hence, PAL filed a complaint against Edu and National Treasurer Ubaldo Carbonell.

The trial court dismissed PAL's complaint. PAL appealed to the Court of Appeals which in turn certified
the case to the Supreme Court.

ISSUE:

Whether or not motor vehicle registration fees are considered as taxes

RULING:

Yes. If the purpose is primarily revenue, or if revenue is one of the real and substantial purposes, then
the exaction is properly called a tax. An example of this is the motor vehicle registration fees. The motor
vehicle registration fees are actually taxes intended for additional revenues of the government even if
one fifth or less of the amount collected is set aside for the operating expenses of the agency
administering the program.

DAVAO GULF LUMBER CORPORATION VS CIR

FACTS:Davao Gulf Lumber Corporation, a licensed forest concessionaire possessing a Timber License
Agreement granted by the Ministry of Natural Resources (Now DENR), purchased from various oil
companies refined and manufactured oils as well as motor and diesel fuels for its exploitation and
operation. Republic Act No. 1435 entitles miners and forest concessioners to the refund of 25% of the
specific taxes paid by the oil companies, which were eventually passed on to the user (the petitioner in
this case) in the purchase price of the oil products. Petitioner filed before respondent Commissioner of
Internal Revenue a claim for refund in the amount representing 25% of the specific taxes actually paid
on the above-mentioned fuels and oils that were used by petitioner in its operations. However
petitioner asserts that equity and justice demands that the refund should be based on the increased
rates of specific taxes which it actually paid, as prescribed in Sections 153 and 156 of the NIRC. Public
respondent, on the other hand, contends that it should be based on specific taxes deemed paid under
Sections 1 and 2 of RA 1435.
ISSUE: Should the petitioner be entitled under Republic Act No. 1435 to the refund of 25% of the
amount of specific taxes it actually paid on various refined and manufactured mineral oils and other oil
products, and not on the taxes deemed paid and passed on to them, as end-users, by the oil companies?

HELD: The tax refund should be based on the taxes deemed paid. Because taxes are the lifeblood of the
nation, statutes that allow exemptions are construed strictly against the grantee and liberally in favor of
the government. Any exemption from the payment of a tax must be clearly stated in the language of the
law; it cannot be merely implied therefrom.

DEUTSCHE BANK AG MANILA VS CIR

facts: Deutsche Bank applied for a tax refund on the ground that it mistakenly paid the wrong branch
profit remittance tax rate of 15%. It claimed that it is covered by the preferential tax rate of 10% under
the RP-Germany Tax Treaty. The CTA held that petitioner is not entitled to the tax refund because it did
not comply with the 15-day mandatory period of application with the ITAD which was held in Mirant v.
CIR to be mandatory.

issue: Whether or not Petitioner is capable of refund?

RULING: The SC held that Deutsche Bank is entitled to the tax refund because we are bound to comply
with the treaty of pacta sunt servanda, which demands the performance in good faith of treaty
obligations on the part of the states that enter into the agreement. Every treaty in force is binding upon
the parties, and obligations under the treaty must be performed by them in good faith. More
importantly, treaties have the force and effect of law in this jurisdiction.

The CTA ruling that prior application for a tax treaty relief is mandatory, and noncompliance with this
prerequisite is fatal to the taxpayer's availment of the preferential tax rate. We disagree.

A minute resolution is not a binding precedent. Mirant v. CIR does not create a binding precedent
because it is just a minute resolution, not a decision of the SC.

CIR VS FORTUNE TOBACCO CORPORATION

FACTS: fORTUNE TOBACCO CORPORATION is the manufacturer/producer of champion, winston, camel,

salem cigarettes. Prior to January 1, 1997, the above-mentioned cigarette brands were subject to ad
valorem tax, however on January 1, 1997, R.A. No. 8240 took effect whereby a shift from the ad
valorem tax system to the specific tax system was made and subjecting the aforesaid cigarette brands to
specific tax . The rates of excise tax on cigars and cigarettes shall be increased by twelve percent (12%)
on January 1, 2000.
To implement the provisions for a twelve percent (12%) increase of excise tax on, cigars and cigarettes
packed by machines by January 1, 2000, the Secretary of Finance issued Revenue Regulations No. 17-99,
dated December 16, 1999, which provides the increase on the applicable tax rates on cigar and
cigarettes. Pursuant to this law, Petitoner paid in advance the excise tax and filed an administrative
claim to CIR for tax refund for the illegaly collected tax.

ISSUE: whether or not FORTUNE TOBBACCO CORP is capable of refund?

RULING: YES,The Government is not exempt from the application of solutio indebiti. The taxpayer
expects fair dealing from the Government, and the latter has the duty to refund without any
unreasonable delay what it has erroneously collected. If the State expects its taxpayers to observe
fairness and honesty in paying their taxes, it must hold itself against the same standard in refunding
excess payments of such taxes. It should not unjustly enrich itself at the expense of taxpayers.And so,
given its essence, a claim for tax refund necessitates only preponderance of evidence for its approbation
like in any other ordinary civil case.

A claim for tax refund may be based on the following: (a) erroneously or illegally assessed or collected
internal revenue taxes; (b) penalties imposed without authority; and (c) any sum alleged to have been
excessive or in any manner wrongfully collected.