BPI V. CA; G.R. No.

127624

November 18, 2003

PARTIES: BPI EASING C!RP!RATI!N " petitioner, T#E #!N!RAB E C!$RT !% APPEA S, C!$RT !% TA& APPEA AN' C!((ISSI!NER !% INTERNA REVEN$E " respondents. P!NENTE: A)C$NA, J.: %ACTS: For the calendar year 1986, BPI Leasing Corporation, Inc. (BLC) paid the Commissioner o Internal !e"en#e (CI!) a total o P1,1$9,%&1.&9 representing &' (contractor)s percentage ta*( then imposed +y ,ection -%. o the /ational Internal !e"en#e Code (/I!C), +ased on its gross rentals rom e0#ipment leasing or the said year amo#nting to P-1,18$,1-..&-. 2n /o"em+er 1%, 1986, the CI! iss#ed !! 19386. ,ection 6.- thereo pro"ided that inance and leasing companies registered #nder !ep#+lic 4ct .98% shall +e s#+5ect to gross receipt ta* o .'3$'31' on act#al income earned. 6his means that companies registered #nder !ep#+lic 4ct .98%, s#ch as BLC, are not lia+le or (contractor)s percentage ta*( #nder ,ection -%. +#t are, instead, s#+5ect to (gross receipts ta*( #nder ,ection -6% (no7 ,ection 1--) o the /I!C. ,ince BLC had earlier paid the a orementioned (contractor)s percentage ta*,( it re3comp#ted its ta* lia+ilities #nder the (gross receipts ta*( and arri"ed at the amo#nt o P$61,9-&.&&. BLC iled a claim or a re #nd 7ith the CI! or the amo#nt o P111,111.%., representing the di erence +et7een the P1,1$9,%&1.&9 it had paid as (contractor)s percentage ta*( and P$61,9-&.&& it sho#ld ha"e paid or (gross receipts ta*.( 6he C64 dismissed the petition and denied BLC)s claim o re #nd and held that !! 19386, may only +e applied prospecti"ely s#ch that it only co"ers all leases 7ritten on or a ter 8an#ary 1, 1981. 6he C64 r#led that, since BLC)s rental income 7as all recei"ed prior to 1986, it ollo7s that this 7as deri"ed rom lease transactions prior to 8an#ary 1, 1981, and hence, not co"ered +y the !!. 4 motion or reconsideration o the C64)s decision 7as iled, +#t 7as denied. BLC then appealed the case to the Co#rt o 4ppeals. BLC s#+mits that the Co#rt o 4ppeals and the C64 erred in not r#ling that !! 19386 may +e applied retroacti"ely so as to allo7 BLC)s claim or a re #nd o P111,111.%.. !espondents, on the other hand, maintain that the pro"ision on the date o e ecti"ity o !! 19386 is clear and #ne0#i"ocal, lea"ing no room or interpretation on its prospecti"e application. ISS$ES: 92/ !! 19386 is legislati"e or interpretati"e in nat#re. 92/ !! 19386 is prospecti"e or retroacti"e in nat#re. 92/ BPI ailed to meet the 0#ant#m o e"idence re0#ired in re #nd cases. R$ E: 1ST ISS$E " BLC attempts to con"ince the Co#rt that !! 19386 is legislati"e rather than interpretati"e in character and hence, sho#ld retroact to the date o e ecti"ity o the la7 it see:s to interpret. 4 legislati"e r#le is in the matter o s#+ordinate legislation, designed to implement a primary legislation +y pro"iding the details thereo . 4n interpretati"e r#le, on the other hand, is designed to pro"ide g#idelines to the la7 7hich the administrati"e agency is in charge o en orcing. 6he Co#rt inds the 0#estioned !! to +e legislati"e in nat#re. ,ection 1 o !! 19386 plainly states that it 7as prom#lgated p#rs#ant to ,ection -11 o the /I!C (no7 ,ection -&&), an e*press grant o a#thority to the ,ecretary o Finance to prom#lgate all need #l r#les and reg#lations or the e ecti"e en orcement o the pro"isions o the /I!C. ;erily, it cannot +e disp#ted that !! 19386 7as iss#ed p#rs#ant to the r#le3ma:ing po7er o the ,ecretary o Finance, th#s ma:ing it legislati"e, and not interpretati"e as alleged +y BLC. BLC #rther posits that, it is in"alid or 7ant o d#e process as no prior notice, p#+lication and p#+lic hearing attended the iss#ance thereo . 6o s#pport its "ie7, BLC cited CI! ". Fort#ne 6o+acco, et

al., 7herein the Co#rt n#lli ied a re"en#e memorand#m circ#lar 7hich reclassi ied certain cigarettes and s#+5ected them to a higher ta* rate, holding it in"alid or lac: o notice, p#+lication and p#+lic hearing. In this case, !! 19386 7o#ld +e +ene icial to the ta*payers as they are s#+5ected to lesser ta*es. Petitioner, in act, is in"o:ing !! 19386 as the "ery +asis o its claim or re #nd. I it 7ere in"alid, then petitioner all the more has no right to a re #nd. 2N' ISS$E " 6he Co#rt no7 resol"es 7hether its application sho#ld +e prospecti"e or retroacti"e. ,tat#tes, incl#ding administrati"e r#les and reg#lations, operate prospecti"ely only, #nless the legislati"e intent to the contrary is mani est +y e*press terms or +y necessary implication. In the present case, there is no indication that the !! may operate retroacti"ely. F#rthermore, there is an e*press pro"ision stating that it (shall ta:e e ect on 8an#ary 1, 1981,( and that it (shall +e applica+le to all leases 7ritten on or a ter the said date.( 6h#s, BLC is not in a position to in"o:e the pro"isions o !! 19386 or lease rentals it recei"ed prior to 8an#ary 1, 1981. 3R' ISS$E " 6a* re #nds are in the nat#re o ta* e*emptions. 4s s#ch, these are to +e strictly constr#ed against the person or entity claiming the e*emption. 6he +#rden o proo is #pon him 7ho claims the e*emption and he m#st +e a+le to 5#sti y his claim +y the clearest grant #nder Constit#tional or stat#tory la7, and he cannot +e permitted to rely #pon "ag#e implications. /othing that BLC has raised 5#sti ies a ta* re #nd. *#ERE%!RE, the petition or re"ie7 is here+y 'ENIE', and the assailed decision and resol#tion o the Co#rt o 4ppeals are A%%IR(E'. /o prono#ncement as to costs. S! !R'ERE'. PRINCIP ES INV! VE': Legislati"e or Interpreti"e nat#re o ,tat#te Prospecti"e or !etroacti"e e ect o 2rdinances