THE Court of Tax Appeals (CTA) dismissed for lack of jurisdiction a petition by the Department of Energy (DoE) to reverse the decision of the Bureau of Internal Revenue (BIR) finding it liable for alleged excise tax deficiency worth P593.7 million.
In an 18-page decision dated May 16, the CTA third division said that while it has jurisdiction over disputed tax assessments, Presidential Decree No. 242 provides that the resolution of cases involving government offices, agencies, and corporations must be settled by the Secretary of Justice or the Solicitor-General.
It also cited a Supreme Court decision which noted that under Chapter 14 of Executive Order No. 292, or Administrative Code of 1987, stating that the Secretary of Justice, as attorney-general of the government and ex-officio legal adviser of all government-owned or controlled corporations, is expowered to settle cases involving questions of law.
The Solicitor-General, on the other hand, has the authority settle cases involving mixed questions of law and fact, or factual issues only, if the dispute is between or among government departments, bureaus, or corporations, to which it is the principal law officer or general counsel.
“The above-quoted jurisprudence is applicable to the present case considering that the subject disputed assessment is between the Department of Energy and the Bureau of Internal Revenue, both government entities. Thus, in light of the foregoing ruling of the Supreme Court, this Court has no jurisdiction over the present case,” the CTA ruled.
“Lack of jurisdiction of the court over an action or the subject matter of an action cannot be cured by the silence, acquiescence, or even by express consent of the parties. If the court has no jurisdiction over the nature of an action, its only jurisdiction is to dismiss the case. The court could not decide the case on the merits,” it added.
The CTA also ordered the decision to be forwarded to the Office of the Solicitor-General.
The DoE filed the petition following the tax assessment of the BIR over its alleged deficiency taxes on exported crude oil from service contracts operated by Galoc Production Company from June to December 2011 and for 2012.
It said in its first protest to the BIR that the “owner” referred under the Section 30 (A)(1) of the Tax Code, the basis for the tax assessment, refers to the service contractor and not the DoE which is “an agent or instrumentality of the State,” and does not own a mining claim or concession.
The BIR in its answer to the CTA petition, on the other hand, said DoE, “as owner of the mining claim,” is liable to pay the excise taxes on the export of crude oil from the Galoc Production Company in accordance with Section 130 (A) (1) of the Tax Code, which states that in case of indigenous petroleum, or other natural gases, excise tax shall be paid the buyer while excise tax on exported products shall be paid by owner, concessionaire or operator of the mining claim.
The ruling was written by Associate Justice by Associate Justice Erlinda P. Uy and was concurred in by Associate Justice Ma. Belen M. Ringpis-Liban. — Vann Marlo M. Villegas