GR L 6125; (March, 1955) (Digest)
G.R. No. L-6125 March 31, 1955
NORTH CAMARINES LUMBER CO., plaintiff-appellee, vs. SATURNINO DAVID, ETC., defendant-appellant.
FACTS
The North Camarines Lumber Co., Inc. purchased vessels from the Foreign Liquidation Commission. On June 21, 1946, it bought a motor vessel for P60,000 and paid a P2,100 compensating tax. On November 19, 1946, it purchased six barges for P18,000 and paid a P900 compensating tax. From September 29, 1947, to October 11, 1948, it made additional purchases of vessels, paying P8,045 in compensating taxes, which amount was later refunded by the Collector of Internal Revenue. The total amount in dispute is P3,000 (the sum of P2,100 and P900), which the Court of First Instance of Manila ordered the Collector to refund. The taxes were assessed under Section 190 of the National Internal Revenue Code ( Commonwealth Act No. 466 ), as amended. On June 9, 1949, Republic Act No. 361 further amended Section 190 by adding a paragraph stating that the phrase “commodities, goods, wares, or merchandise” shall not include vessels, their equipment and/or appurtenances purchased from abroad, before or after the Act’s effectivity. The appellee filed a complaint for refund on September 29, 1949.
ISSUE
Whether Republic Act No. 361 , which exempted vessels purchased abroad from the compensating tax, entitles the appellee to a refund of taxes paid more than two years before the filing of the complaint, notwithstanding the two-year prescriptive period for filing a tax refund claim under Section 306 of the National Internal Revenue Code.
RULING
The Supreme Court reversed the lower court’s decision and absolved the defendant-appellant from the complaint. The Court held that Republic Act No. 361 did not repeal by implication the two-year prescriptive period for filing tax refund claims established in Section 306 of the National Internal Revenue Code. The appellee’s theory that all compensating taxes paid on vessels at any time before the Act should be refunded, without time limitation, would lead to an absurd and unreasonable result. Repeals by implication are not favored. If Congress intended to repeal the prescription in Section 306, it would have done so expressly, as it did in other similar acts. Therefore, the claim for refund of the P3,000, which was paid more than two years before the complaint was filed on September 29, 1949 (specifically on June 21, 1946, and November 19, 1946), had already prescribed.