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Jul 22, 2008

G.R. No. 146941, Aug. 9, 2007

  • Findings of fact of the CTA is entitled the greatest respect
  • Stare decisis et non quieta movere


Filinvest filed a claim for refund, or in the alternative, the issuance of TCC with CIR in the amount of P4,178,134.00 representing excess creditable withholding taxes for taxable years 1994, 1995, and 1996.

When CIR had not resolved petitioner’s claim for refund and the 2-yr prescriptive period was about to lapse, the latter filed a Petition for Review with the CTA, which, however, dismissed the petition for review for insufficiency of evidence because petitioner failed to present in evidence its 1997 income tax return. CA also denied the petition for review subsequently filed on the same ground of insufficiency of evidence.


  • Whether or not petitioner is entitled to the tax refund or tax credit


CA erred (1) in denying the claim for tax refund on the sole ground of failure to present in evidence its Annual Income Tax Return for Corporations for 1997 despite holding that it had complied with all the requirements to sustain a claim for tax refund; (2) relying on CTA cases cited in its Decision as jurisprudential basis to support its ruling; (3) not ruling that Sec. 34, Rule 132, RoC, being a procedural rule, should be liberally construed in order that substantial justice due petitioner shall have been served; and (4) not ruling that, petitioner having proved that it paid excess taxes for taxable years 1995 and 196, has shifted the burden of evidence to respondent CIR to show the factual basis to deny petitioner’s claim.


In claims for tax refund, the burden of proof of refundability rests with claimant. Petitioner did not comply with the rules on formal offer of evidence. CA did not err in relying on CTA cases because the latter is an authority on matters of taxation and therefore its resolutions carry great weight.


Petitioner is entitled to the tax refund or tax credit.

Factual findings of the CTA, as affirmed by the CA, are entitled to the highest respect and will not be disturbed on appeal unless it is shown that the lower courts committed gross error in the appreciation of facts.

The appellate court itself acknowledges that petitioner had complied with the requirements to sustain a claim for tax refund or credit. In the light of RA 1125, as amended, the law creating the CTA, provides that proceedings therein shall not be governed strictly by technical rules of evidence. Moreover, this Court has held time and again that technicalities should not be used to defeat substantive rights, especially those that have been established as a matter of fact.

The CA, likewise, erred in relying on CTA decisions as jurisprudential basis for its decision. By tradition and in our system of judicial administration this Court has the last word on what the law is, and that its decisions applying or interpreting the laws or the Constitution form part of the legal system of the country, all other courts should take their bearings from the decisions of this Court, ever mindful of what this Court said fifty-seven years ago in People vs. Vera that “a becoming modesty of inferior courts demands conscious realization of the position that they occupy in the interrelation and operation of the integrated judicial system of the nation.”

The principle of stare decisis et non quieta movere, enjoins adherence to judicial precedents. It requires our courts to follow a rule already established in a final decision of the Supreme Court. That decision becomes a judicial precedent to be followed in subsequent cases by all courts in the land.

In ruling the case, the Court adopted its own ruling in BPI-Family Savings Bank vs. Court of Appeals.


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