GR L 24192; (May, 1968) (Digest)
G.R. No. L-24192 May 22, 1968
COMMISSIONER OF CUSTOMS, petitioner, vs. CALTEX (PHILIPPINES), INC., and COURT of TAX APPEALS, respondents.
FACTS
During the period from January to September 1959, Caltex (Philippines), Inc. imported 32 shipments of assorted goods into the Port of Cebu. The Collector of Customs assessed and collected the special import tax under Republic Act No. 1394 at the rate of 17% for January to June 1959 importations and 15.3% for subsequent shipments, totaling P125,138.00. Caltex filed protests, claiming the correct rate for 1959 was 11.9% as per Section 1 of R.A. 1394. The Collector of Customs of Cebu, affirmed by the Commissioner of Customs, held that the applicable rate was 15.3% pursuant to Presidential Proclamation No. 601 dated July 14, 1959. The Court of Tax Appeals ordered a refund of P33,766.00 to Caltex, ruling the proclamation was effective only after its publication. The Commissioner of Customs appealed.
ISSUE
What is the applicable rate of the special import tax on the importations in question, and from when did Presidential Proclamation No. 601, which increased the rate, take effect?
RULING
The Supreme Court reversed the decision of the Court of Tax Appeals. The applicable rate is 15.3%, effective from January 1, 1959. The phrase “succeeding calendar year” in Section 2 of R.A. 1394 refers to the year following the calendar year in which the total revenue from customs duties and special import tax fell below the 1955 exchange tax proceeds (which was 1958), not the year succeeding the proclamation’s issuance. The proclamation could not be issued before the end of the year in which the revenue shortfall occurred, and making it effective only upon publication would unduly delay the necessary fiscal remedy. The Court held that Section 11 of the Revised Administrative Code, on laws taking effect 15 days after publication, does not apply to executive proclamations, especially when the proclamation itself provides a specific effective date (“during the calendar year 1959, starting from January 1”). Furthermore, tax laws like Proclamation No. 601 are not penal in nature and may have retrospective operation. The amount refundable to Caltex was modified to P7,571.00.