July 29, 1988
Ponente: Paras, J.
FACTS
Luzon Stevedoring imported engine parts and other equipment to repair and maintain its tugboats.
The parts were assessed with a compensating tax by the CIR. Luzon Stevedoring paid the tax under protest, claiming that tugboats are embraced and included in the term "cargo vessel" under the tax exemption provisions of Section 190 of the Revenue Code, as amended by R.A. No. 3176. Both the CIR and CTA denied his claim.
RULING
The SC ruled for the CIR.
Drawing from the various definitions of the word "tugboat" from various sources, the SC concluded that Luzon Stevedoring's tugboats clearly do not fall under the categories of passenger and/or cargo vessels.
Thus, it is a cardinal principle of statutory construction that where a provision of law speaks categorically, the need for interpretation is obviated, no plausible pretense being entertained to justify non-compliance.
The general rule is that any claim for exemption from the tax statute should be strictly construed against the taxpayer.
