CIR vs. Kepco Ilijan Corporation

 G.R. No. 199422

COMMISSIONER OF INTERNAL REVENUE, Petitioner,

vs.

KEPCO ILIJAN CORPORATION, Respondent.

FACTS:

Kepco filed with the BIR its claim for refund in the amount of ₱49,569,448.73 representing input tax incurred for the first and second quarters of the calendar year 2000 from its importation and domestic purchases of capital goods and services preparatory to its production and sales of electricity to the National Power Corporation.

Petitioner did not act upon respondent's claim for refund or issuance of tax credit certificate. Consequently, respondent filed a Petition for Review.

In her Answer, petitioner alleged inter alia Special and Affirmative Defenses: that the petition was prematurely filed for respondent's failure to exhaust administrative remedies; 

CTA First Division rendered a decision finding petitioner entitled to a refund.

There being no motion for reconsideration filed by the petitioner, the abovementioned decision became final and executory and a corresponding Entry of Judgment was issued.

Petitioner alleges that she learned only of the Decision and the subsequent issuance of the writ of March 7, 2011 when the Office of the Deputy Commissioner for Legal and Inspection Group received a Memorandum from the Appellate Division of the National Office recommending the issuance of a Tax Credit Certificate in favor of the respondent in the amount of ₱443,447,184.50.

Accordingly, on April 11, 2011 petitioner filed a petition for annulment of judgment with the CTA En Banc, praying for the following reliefs: (1) that the Decision of the CTA First Division in CTA be annulled and set aside; (2) that the Entry of Judgment and Writ of Execution be nullified; and (3) that the CTA First Division be directed to re-open the case to allow petitioner to submit her memoranda setting forth her substantial legal defenses.

CTA En Banc issued a Resolution dismissing the petition. Petitioner filed a motion for reconsideration, but the same was denied.

Hence, this petition.

ISSUES:

(1) Whether the CTA En Banc has jurisdiction to take cognizance of the petition for annulment of judgment filed by petitioner.

(2) Whether the CTA En Banc correctly deny the petition for annulment of judgment filed by petitioner?

RULING:

(1) None, the Revised Rules of the CTA and even the Rules of Court which apply suppletorily thereto provide for no instance in which the en banc may reverse, annul or void a final decision of a division. 

What Rule 47, provides is with certain conditions, for annulment of judgment done by a superior court, like the Court of Appeals, against the final judgment, decision or ruling of an inferior court, which is the Regional Trial Court, based on the grounds of extrinsic' fraud and lack of .jurisdiction. The Regional Trial Court, in turn, also is empowered to, upon a similar action, annul a judgment or ruling of the Metropolitan or Municipal Trial Courts within its territorial jurisdiction. But said Rules are silent as to whether a collegial court sitting en banc may annul a final judgment of its own division.

The silence of the Rules may be attributed to the need to preserve the principles that there can be no hierarchy within a collegial court between its divisions and the en banc, and that a court's judgment, once final, is immutable.

Nevertheless, there will be extraordinary cases, when the interest of justice highly demands it, where final judgments of the Court of Appeals, the CTA or any other inferior court may still be vacated or subjected to the Supreme Court's modification, reversal, annulment or declaration as void. But it will be accomplished not through the same species of original action or petition for annulment as that found in Rule 47 of the Rules of Court, but through any of the actions over which the Supreme Court has original jurisdiction as specified in the Constitution, like 65 of the Rules of Court.

(2) Yes, the petition designated as one for annulment of judgment (following Rule 47) was legally and procedurally infirm and, thus, was soundly dismissed by the CTA En Banc on such ground. 

In this case, since the petition invoked the gross and palpable negligence of petitioner's counsel which is allegedly tantamount to its being deprived of due process and its day in court as party-litigant and, as it also invokes lack of jurisdiction of the CTA First Division to entertain the petition filed by private respondent since the same allegedly fails to comply with the reglementary periods for judicial remedies involving administrative claims for refund of excess unutilized input VAT under the National Internal Revenue Code (NIRC), which periods it claims to be jurisdictional, then the proper remedy that petitioner should have availed of was indeed a petition for certiorari under Rule 65, an original or independent action premised on the public respondent having acted without or in excess of jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction. 

Hence, what remained as a remedy for the petitioner was to file a petition for certiorari under Rule 65, which could have been filed as an original action before SC and not before the CTA En Banc. 

Certiorari is available when there is no appeal or any other plain, speedy and adequate remedy in the ordinary course of law, such as in the case at bar.