G.R. No. 119786 September 22, 1998
Atlas Consolidated Mining and Development Corporation, petitioner, vs. Commissioner of Internal Revenue, Court of Tax Appeals and Court of Appeals, respondents.

FACTS

Petitioner Atlas Consolidated Mining and Development Corporation is a domestic corporation engaged in mining copper in Toledo City, Cebu. From September 1974 through July 1983, it purchased manufactured oils and fuels (like diesel and coco-diesel) from Petrophil Corporation and Mobil Oil Philippines, which the suppliers used in its mining operations. The suppliers paid the specific taxes imposed by Sections 153 and 156 of the 1977 National Internal Revenue Code (NIRC) on these products. Invoking Section 5 of Republic Act No. 1435, which grants a refund of 25% of specific taxes paid on oil products used by miners in their operations, petitioner filed several petitions with the Court of Tax Appeals (CTA) seeking refunds totaling P34,433,563.94 for specific taxes paid during various periods. The CTA initially denied the claims based on a Supreme Court ruling that the refund privilege was impliedly repealed. However, upon appeal, the Court of Appeals remanded the cases to the CTA for proper determination of the refund amount, following Supreme Court Resolutions which held that the refund privilege under RA 1435 was available up to 1985 and that the refundable amount should be computed based on the specific tax rates prescribed in Sections 1 and 2 of RA 1435, not on the increased rates under the NIRC. On remand, the CTA computed the 25% refund based on the RA 1435 rates, amounting to P1,101,678.88. The Court of Appeals affirmed this CTA Decision. Petitioner now challenges this computation, arguing that the refund should be based on the increased rates it actually paid under the NIRC.

ISSUE

Whether the 25% tax refund under Section 5 of Republic Act No. 1435 should be computed on the basis of the specific tax rates actually paid by the petitioner under the 1977 NIRC (Sections 153 and 156) or on the basis of the specific tax rates deemed paid under Sections 1 and 2 of RA 1435.

RULING

The Supreme Court DENIED the petition and AFFIRMED the Decision of the Court of Appeals. The tax refund under Section 5 of RA 1435 must be computed on the basis of the specific tax deemed paid under Sections 1 and 2 of RA 1435, not on the increased rates actually paid under the 1977 NIRC. The Court adhered to its unequivocal ruling in Davao Gulf Lumber Corporation v. Commissioner of Internal Revenue and Court of Appeals (G.R. No. 117359, July 23, 1998), which reiterated the principle established in Commissioner of Internal Revenue v. Rio Tuba Nickel Mining Corporation. The Court explained that previous cases cited by the petitioner, such as Insular Lumber Co. v. CTA and the first Atlas case, did not rule on the specific computation issue presented here, as they involved different circumstances or issues. The constitutional proscription against modifying en banc rulings was not violated, as the en banc decision in Davao Gulf settled the matter. Furthermore, equity cannot justify a tax exemption or refund based on amounts not prescribed by the law granting the refund privilege.