San Pablo Manufacturing Corp. v. CIR, GR No. 147749, June 22, 2006
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Joel RoblesSan Pablo Manufacturing Corp. v. CIR, GR No. 147749, June 22, 2006
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Joel RoblesCase Title with G.R.
# and Date
G.R. No. 147749, June 22, 2006
Ponente
CORONA, J.
Facts
San Pablo Manufacturing Corporation (SPMC), a domestic corporation engaged in milling,
manufacturing, and exporting coconut oil and allied products, was assessed by the Commissioner of
Internal Revenue (CIR) for deficiency taxes amounting to P8,182,182.85 for the taxable year 1987. This
amount included deficiency miller’s tax on SPMC’s sales of crude oil to United Coconut Chemicals, Inc.
(UNICHEM) and a deficiency sales tax on its sales of corn and edible oil. SPMC contested the
assessments, but the CIR denied its protest, prompting SPMC to appeal to the Court of Tax Appeals
(CTA).
The CTA ruled in favor of SPMC regarding the deficiency manufacturer’s tax on the sales of corn and
edible oils but upheld the deficiency miller’s tax assessment. SPMC's motion for partial reconsideration
of the miller’s tax assessment was denied. SPMC then brought the case to the Court of Appeals (CA),
challenging the CTA's decision on the miller’s tax. The CA dismissed the petition due to an improper
verification process as the verification and certification against forum shopping were signed by SPMC's
chief financial officer without proper authorization. SPMC's motion for reconsideration was also denied,
leading to this petition for review.
Relevant Issue (Statcon)
Did the Court of Appeals err in dismissing SPMC's appeal on the grounds of improper verification and
certification against forum shopping?
Ruling
The petition is denied.
The Supreme Court affirmed the CA’s dismissal of SPMC’s petition due to non-compliance with
procedural rules. Rule 43, Section 5 of the Rules of Court requires that appeals from the CTA and quasi-
judicial agencies to the CA be verified. A pleading that lacks proper verification is treated as unsigned
and can be dismissed. Additionally, a petition for review under Rule 43 necessitates a sworn certification
against forum shopping. Failure to meet these requirements justifies the dismissal of the petition.
SPMC’s petition in the CA lacked proper verification, as it did not indicate that the chief financial officer
who signed the verification and certification against forum shopping was authorized by the corporation’s
board of directors. SPMC admitted that no power of attorney, secretary’s certificate, or board resolution
was attached to the petition to prove the affiant’s authority. As a result, the CA correctly treated the
petition as an unsigned pleading and dismissed it.
The Supreme Court emphasized that strict compliance with procedural rules is essential to facilitate the
orderly administration of justice. Substantial compliance is insufficient in cases requiring strict
observance of rules, such as verification and non-forum shopping certifications. Procedural rules cannot
be disregarded under the guise of liberal construction.
Even if the procedural infirmity were overlooked, the petition would still fail on substantive grounds.
According to Section 168 of the 1987 Tax Code, the 3% miller’s tax exemption applies only to
exportation of products by the proprietor, operator, or miller of the factory. SPMC’s sale of crude
coconut oil to UNICHEM did not qualify for the exemption since the exportation was conducted by
UNICHEM, not SPMC. The exemption clause did not extend to purchasers or manufacturers using the
milled products for export.
The Supreme Court noted that the rule of expressio unius est exclusio alterius (the express mention of
one thing excludes all others) applies, supporting a restrictive interpretation of tax exemptions.
Therefore, SPMC’s interpretation, which expanded the scope of the exemption, was incorrect. Tax
exemptions must be construed strictly against the taxpayer, and any claim for exemption must fall
squarely within the statutory language.
Thus, the appellate court’s dismissal of the petition was upheld, reinforcing the importance of adhering
to procedural rules and the narrow interpretation of tax exemptions.
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