SUMMARY OF SIGNIFICANT SC CASES (January 2010)

By: Bryan Joseph L. Mallillin

1. The recording of the information in the Official Registry Book of the BIR is a mandatory
requirement before a taxpayer may be excluded from the coverage of the Voluntary
Assessment Program (VAP).
It is evident from the Revenue Memorandum Orders (RMOs) issued by the CIR that in addition to
the filing of the verified information, the same should also be duly recorded in the Official Registry
Book of the BIR. For a person to be excluded from the coverage of the VAP, the verified
information must not only be filed under Section 281 of the Tax Code, it must also be duly recorded
in the Official Registry Book of the BIR before the date of availment under the VAP. Petitioners
failure to effect compliance with the recording in the Official Registry Book of the BIR means that
respondent Ariete, even if under investigation, can avail of the benefits of the VAP. Consequently,
respondent is relieved from any criminal or civil liability incident to the non-filing of a return.
Commissioner of Internal Revenue v. Julieta Ariete, G.R. No. 164152, January 21, 2010
2. If the protest is denied or is not acted upon within one hundred eighty (180) days from
submission of documents, the taxpayer adversely affected may appeal to the Court of Tax
Appeals within thirty (30) days from receipt of the said decision, or from the lapse of the one
hundred eighty (180)-day period; otherwise, the decision shall become final.
In this case, petitioners administrative protest was denied by Final Decision on Disputed
Assessment which petitioner received on August 4, 2005. Under Section 228 of the 1997 Tax Code,
petitioner had 30 days to appeal respondents denial of its protest to the CTA, as such petitioner had
until September 3, 2005 to file a petition for review before the CTA Division. It filed one, however,
on October 20, 2005, hence, it was filed out of time. A motion for reconsideration of the denial of
the administrative protest does not toll the 30-day period to appeal to the CTA. Fishwealth
Canning Corporation v. Commissioner of Internal Revenue, G.R. No. 179343, January 21, 2010
3. Republic Act (R.A.) No. 9238 classified pawnshops as Other Non-bank Financial
Intermediaries, hence already exempt from VAT.
With the enactment of R.A. No. 9238 in 2004, the services of banks, non-bank financial
intermediaries, finance companies, and other financial intermediaries not performing quasi-banking
functions were specifically exempted from VAT, and the 0% to 5% percentage tax on gross receipts
on other non-bank financial intermediaries was reimposed under Section 122 of the Tax Code of
1997. Since the imposition of VAT on pawnshops, which are non-bank financial intermediaries, was
deferred for the tax years 1996 to 2002, petitioner Tambunting Pawnshop is not liable for VAT for
the tax year 1999.
On the issue of liability for documentary stamp tax (DST) on petitioners pawn tickets, the Court
held that DST is an excise tax on the exercise of a right or privilege to transfer obligations, rights or
properties incident thereto; pledge is among these privileges, the exercise of which is subject to
DST. Tambunting Pawnshop, Inc. v. Commissioner of Internal Revenue, G.R. No. 179085,
January 21, 2010
4. Cooperatives are not required to withhold taxes on interest from savings and time
deposits of their members.
The interpretation in BIR Ruling No. 551-888 that cooperatives are not required to withhold the
corresponding tax on the interest from savings and time deposits of their members, which was
reiterated in BIR Ruling [DA-591-2006], applies to the instant case.
In addition, the legislative intent to give cooperatives a preferential tax treatment is apparent in
Articles 61 and 62 of RA 6938 (Cooperative Code of the Philippines). This exemption extends to
members of cooperatives, which would be consistent with the intent of the legislature. Thus,
although the tax exemption only mentions cooperatives, this should be construed to include the
members, pursuant to Article 126 of RA 6938. Dumaguete Cathedral Credit Cooperative
(DUCCO) v. Commissioner of Internal Revenue, G.R. No. 182722, January 22, 2010