GR 109193; (February, 2000) (Digest)
G.R. No. 109193 February 1, 2000
REPUBLIC OF THE PHILIPPINES, petitioner, vs. THE COURT OF APPEALS and PRECISION PRINTING INC., respondents.
FACTS
The Bureau of Internal Revenue (BIR) issued a final and demandable assessment notice on June 10, 1985, against Precision Printing, Inc. for deficiency income tax for 1981 amounting to P248,406.11. The corporation failed to pay despite repeated demands. Subsequently, on October 31, 1986, Precision Printing filed a Tax Amnesty Return pursuant to Executive Order No. 41, as amended by E.O. Nos. 54 and 64, covering unpaid taxes for the years 1981 to 1985. The BIR later filed a collection suit on June 9, 1990.
ISSUE
Whether or not the Court of Appeals erred in affirming the trial court’s dismissal of the collection case on the ground that the private respondent’s tax liability was extinguished by its availment of the tax amnesty under Executive Order No. 41.
RULING
The Supreme Court ruled that the tax liability was extinguished. The legal logic centers on the interpretation of the tax amnesty law. Executive Order No. 41 was a general grant of amnesty for unpaid income taxes for 1981 to 1985, with no exclusionary clause for tax liabilities already assessed prior to its effectivity on August 22, 1986. The BIR’s implementing Revenue Memorandum Order (RMO) 4-87, which limited the amnesty’s application to assessments issued after August 21, 1986, could not validly restrict the scope of the executive order.
An administrative issuance, such as the RMO, must be in harmony with the law it seeks to implement; it cannot modify, limit, or supplant the law. Since E.O. 41 itself contained no such limitation, the RMO’s restrictive provision was invalid. The Court, citing Commissioner of Internal Revenue vs. Court of Appeals, held that the unavoidable conclusion is that the amnesty was designed to cover all tax liabilities for the specified years, including those already assessed, provided the taxpayer complied with the conditions. Therefore, Precision Printing’s proper filing of the amnesty return extinguished its tax deficiency. The petition was denied and the Court of Appeals’ decision was affirmed.