Philippine Supreme Court Resolutions > Year 2011 > October 2011 Resolutions > [G.R. No. 197290 : October 05, 2011] COMMISSIONER OF INTERNAL REVENUE V. COURT OF TAX APPEALS EN BANC AND PANAY POWER CORPORATION :

Please take notice that the Court, Second Division, issued a Resolution dated 05 October 2011 which reads as follows:

G.R. No. 197290 (Commissioner of Internal Revenue v. Court of Tax Appeals En Banc and Panay Power Corporation). - We resolve the Motion for Reconsideration dated September 16, 2011 filed by the Commissioner of Internal Revenue (CIR) to set aside our Resolution^[1] of August 3, 2011 that dismissed his petition for certiorari. In his petition, the CIR sought the reversal of the resolution^[2]  dated April 29, 2011 of the Court of Tax Appeals (CTA) en banc. We dismissed the petition for its failure to show that the questioned CTA en banc resolution was tainted with grave abuse of discretion.

In this motion for reconsideration, the CIR insists that the CTA en banc incorrectly dismissed his appeal on procedural grounds, specifically his failure to attach 11 copies of the motion for extension to file petition for review, which resulted in his having filed his petition for review beyond the prescriptive period. He points out that the government's coffers stand to lose the substantial amount of P2,593,801.89, if procedural rules are rigidly applied. This, according to the CIR, amounts to grave abuse of discretion amounting to lack or in excess of jurisdiction.^[3]

We deny the motion for reconsideration.

Grave abuse of discretion is characterized by the capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction. The abuse of discretion must be grave as where the power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility, and must be so patent and gross as to amount to an evasion of a positive duty or to a virtual refusal to perform the duty enjoined by, or to act at all in contemplation of, the law. It often consists of violations of the Constitution, law and jurisprudence, as well as gross misapprehensions of facts.^[4]

In this case, the CIR looks for leniency in procedural rules, which he admittedly violated, but even now fails to allege the substantial grounds to support his claim that the refund awarded to the petitioner is unjust or unlawful. During the proceedings before the Former Second Division of the CTA, it was noted that the CIR did not even present any evidence but instead submitted the case for decision based on the pleadings.^[5] On the other hand, respondent Panay Power Corporation presented documents proving that it had doubly paid its expanded withholding tax; two witnesses, who prepared the tax returns and paid the same tax twice,^[6] testified as well.

To merit the courts' liberality in the relaxation of procedural rules, the party must show reasonable cause in justifying its non-compliance with the rules and must convince the court that the outright dismissal of the petition would defeat the administration of substantive justice.^[7] The mere fact that government funds are in dispute does not make it imperative for a court to relax its procedural rules, where the government in the first place fails to present a credible claim. Thus, the CTA en banc's dismissal, based on procedural grounds, is correct as it does not in any way constitute abuse of discretion, grave or otherwise.

WHEREFORE, premises considered, we hereby DENY the Motion for Reconsideration for lack of merit.

SO ORDERED.

Very truly yours,

MA. LUISA L. LAUREA
  Division Clerk of Court

By:

(Sgd.) TERESITA AQUINO TUAZON
Deputy Division Clerk of Court

Endnotes:

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^[1] Rollo, pp. 98-99.

^[2] Id. at 94-96. 

^[3] Id. at 100-105. 

^[4] United Coconut Planters Bank v. Looyuko, G.R. No. 156337, September 28, 2007, 534 SCRA 322, 331; and Miranda v. Abaya, 370 Phil. 642, 663 (1999). 

^[5] Rollo, p. 69. 

^[6] Id. at 89, 72-73. 

^[7] Daikoku Electronics Philippines, Inc. v. Raza, G.R. No. 181688, June 5, 2009, 588 SCRA 78S, 795.