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[G.R. No. 105014. December 1, 2004]

PILIPINAS KAO vs. CA

Gentlemen:

Quoted hereunder, for your information, is a resolution of this Court dated DEC 1 2004.

G.R. No. 105014 (Pilipinas Kao, Inc., vs. Court of Appeals and Board of Investments.)

In a Decision dated December 18, 2001, this Court ordered respondent herein, the Board of Investments (BOI), to grant tax credits due to petitioner Pilipinas Kao, Incorporated. The dispositive portion of said Decision reads as follows:

WHEREFORE, the petition is GRANTED. Accordingly, the Decision dated November 26,1991 of respondent court in CA-G.R. SP No. 24979 and its Resolution dated April 8, 1992, denying petitioner's motion for reconsideration, the Board Resolution of respondent Board of Investments (BOI) dated May 10,1990, and its Letters dated August 1, 1990 and March 11, 1991, are hereby SET ASIDE.

Respondent BOI is ordered to grant the tax credits due to petitioner for its registered expanded capacity in the year 1988 and onwards, computed strictly in accordance with Articles 48(c) in relation to 45(c) of P.D. 1789, as amended by P.D. 391, subject only to deductions provided in the cited provisions of the law, and without applying the base figure under the Manual of Operations of respondent BOI.

SO ORDERED. ^[1] cralaw

The Solicitor General received a copy of the Decision on January 24, 2002 and moved for reconsideration on February 8, 2002. ^[2] cralaw After requiring the petitioner to file its comment on the Solicitor General's motion, ^[3] cralaw this Court denied the same on July 9, 2002, for not having ventilated grounds substantial enough to justify a reversal of the Decision. ^[4] cralaw Hence, entry of judgment was made on July 19, 2002. ^[5] cralaw

On September 25, 2003, the petitioner filed before this Court a motion to compel the execution of the aforesaid judgment. ^[6] cralaw This was granted on November 10, 2003 and this Court ordered the BOI, through Chairman Gregorio Domingo, to comply with the Decision under pain of contempt. ^[7] cralaw

On January 8, 2004, however, the Solicitor General manifested to this Court that as early as 1992, the authority to issue Tax Credit Certificates (TCCs) was no longer vested in the BOI. Administrative Order No. 266, which was issued on February 7, 1992, created the One-Stop-Shop Inter-Agency Tax Credit and Duty Drawback Center (CENTER) for the processing of all tax credits and duty drawbacks. ^[8] cralaw

In a subsequent manifestation, the Solicitor General also averred that the BOI had written numerous requests to the Department of Finance (DOF) and conducted several meetings with them together with the petitioner's representatives, to implement the judgment in this case. Consequently, the CENTER Executive Committee, on November 20, 2003, resolved that the BOI shall validate the amount of tax credit and endorse the same to the CENTER Executive Committee. Thereafter, the Executive Committee will recommend to the Secretary of Finance the release of the TCCs in favor of the petitioner in the amount validated by the BOI and affirmed by the Executive Committee. Pursuant to this agreement, the BOI validated the amount of Seventy Seven Million Eight Hundred Sixty Two Thousand and Nineteen Pesos (P77,862,019.00) as tax credit due to the petitioner and endorsed the same to the CENTER. The CENTER Executive Committee then adopted Resolution No. 246-29-2004 dated January 28, 2004, which reads:

RESOLVED, as it is hereby resolved that the Executive Committee approves the release of the tax credit for Net Local Content and Net Value earned amounting to P77,862,019.00 to Pilipinas Kao, Inc. (PKI) subject to approval of the Secretary of the Department of Finance;

RESOLVED FURTHER that from the aforesaid amount, P2,149,618.00 shall automatically be deducted as repayment of fees and duties waived on capital equipment importation under E.O. 1045. The said deduction shall accordingly be reflected on the dorsal portion of the tax credit certificate;

RESOLVED FURTHERMORE that PKI shall be required to submit a copy of the following documents:

a.������ Articles of Incorporation and By-laws;

b.������ Company Board Resolution covered by the Secretary's Certificate on the following:

b.1��������� Authori[ty] to receive TCCs and communications from the Center;

b.2��������� Authori[ty] to sign and file requests for tax debit memo;

b.3��������� Authori[ty] to sign and file requests for transfer.

The Solicitor General also attached to his manifestation a letter ^[9] cralaw to the petitioner dated June 22, 2004 by the Undersecretary of Finance, Ma. Gracia Pulido-Tan, expressing concern that the CENTER was not a party to the case and intimating that they are constrained from readily presenting the same as a successor in interest of the BOI. Thus, the undersecretary opined that it would be best if this Court issued an order directing the BOI and/or the CENTER to satisfy the judgment.

WHEREFORE, in view of the foregoing, the Solicitor General is hereby ordered to effect the proper substitution and/or addition of parties for purposes of execution within fifteen (15) days from receipt hereof.

Very truly yours,

(Sgd.) ENRIQUETA ESGUERRA-VIDAL
Clerk of Court

Endnotes:

^[1] cralaw Rollo, pp. 332 to 359.

^[2] cralaw Rollo , pp. 360 to 377.

^[3] cralaw Rollo , p. 379.

^[4] cralaw Rollo , p. 460.

^[5] cralaw Rollo , pp. 462 to 463.

^[6] cralaw Rollo , pp. 468 to 482.

^[7] cralaw Rollo , p. 483.

^[8] cralaw SECTION 1. Creation of a One-Stop-ShopInter-Agency Tax Credit and DutyDrawbackCenter. - A One-Stop-Shop Inter-Agency Tax Credit and Duty Drawback Center (CENTER) is hereby created for the purposes of achieving an orderly and expeditious processing of tax credits and duty drawbacks under Executive Order No. 226; Presidential Decree No. 1789 as amended by Batas Pambansa Blg. 391, as amended; Letter of Instructions No. 1355; Executive Order No. 765; RP-US Military Agreement; Section 106(c), Tariff and Customs Code of the Philippines; Section 106, National Internal Revenue Code; and such other applicable laws.

x x x

SECTION 5. Issuance of Tax Credit Certificates and/ or Duty Drawback.-The Secretary of Finance shall designate his representatives who shall, upon the recommendation of the CENTER, issue tax credit certificates within thirty (30) working days from acceptance of applications for the enjoyment thereof.

^[9] cralaw Rollo, p. 493.

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