FACTS
On April 22, 1975, Mega General Merchandising wrote the Commissioner of Internal Revenue for clarification as to whether imported crude paraffin wax is subject to specific tax under the Tax Code.
Former Commissioner Misael P. Vera in his reply said that it certain kinds of wax (not including paraffin) was subject to tax. Mega General in a letter, dated November 27, 1975, requested for a refund or tax credit of the amount of P321,436.79 representing the difference between the amount paid as specific tax and the 7 percent advance sales tax. Since the Section 142(i) of the Tax Code, as amended by P.D. No. 392 does not make any distinction as to the kind of wax subject to specific tax, then Acting Commissioner of Internal Revenue Efren I. Plana, on January 28,1977 denied respondent Mega General's claim for refund or tax.
Subsequently, however, Plana granted the corporation’s claim for refund or credit pertaining to the importation made 18 April 1975. The Corporation protested the tax assessment of May 8, 1978, which protest was denied by the CIR.
RULING
The Court ruled in favor of the CIR.
Rulings cannot, as a rule, be given retroactive effect. Additionally, a BIR ruling will be given more weight than a letter by the Acting Commissioner. The SC held that the letter of Commissioner Plana dated January 11, 1978 did not in any way revoke his ruling dated January 28, 1977, which ruling applied the specific tax to wax (without distinction).
The reason he removed in 1978 Mega General's liability for the specific tax was not because he wanted to revoke, expressly or implicitly, his ruling of January 28, 1977 but because the P321,436.79 tax referred to importation before January 28, 1977 and hence still covered by the ruling of Commissioner Vera, and not by the January 28,1977 ruling of Commissioner Plana.
