July 23, 1998
Ponente: Panganiban, J.
FACTS
Davao Gulf, a licensed forest concessionaire, purchased various types of oils from different oil companies. Said companies paid specific taxes imposed on the sail of the products, and being included in the purchase price, said taxes were eventually passed on to the user, Davao Gulf.
The latter claimed for a refund based on Insular v. CTA and RA 1435.
The CTA only granted a partial refund as some claims have already prescribed and some were not included in the original claim.
As for the other purchases, CTA granted the partial refund but based on R.A. 1435 and not on the higher rates paid by Davao Gulf under the NIRC.
RULING
The SC decided in favor of the CTA.
A tax cannot be imposed unless it is supported by the clear and express language of a statute; on the other hand, once the tax is unquestionably imposed, a claim of exemption from tax payments must be clearly shown and based on language in the law too plain to be mistaken.
Since the partial refund authorized under Section 5 of R.A. 1435 is in the nature of a tax exemption, it must be construed strictissimi juris against the grantee.
Therefore, Davao Gulf's claim of refund must expressly be granted in a statute stated in a language too clear to be mistaken. According to an eminent authority on taxation, “there is no tax exemption solely on the, ground of equity.”
