COMMISSIONER OF INTERNAL REVENUE (CIR) VS. PHILIPPINE GLOBAL COMMUNICATIONS INC. (Philippine Global) G.R. No. !!"#" A$%$&' " **" Ca+pio Mo+ale& ,OCTRINE The amendment of a law, being part of the original which is already in force and eect, must necessarily become eective as part of the amended law at the time the amendment takes eect. FACTSRespondent operates under a legislative franchise granted by RA 46! to construct, maintain and operate communications systems by radio, wire, satellite and other means. "t was sub#ect to $% franchise ta& under 'ection ! (b) of the *"R+. 'aid provision of the *"R+ was amended by 'ection of -/AT 0aw which was passed in 114, wherein the payment of $% franchise ta& by a telecommunications telecommunications company re2uired re2uired under 'ection ! (b) of the Ta& +ode was omitted. After proper publication on 3ay , 114, it therefore became eective on 3ay , 114. 5n une $7, 114, in the case of Tolentino vs. 'ec. of 8inance, which assailed the constitutionality of the -/AT 0aw, issued a TR5 en#oining the enforcement enforcement and implementation. The TR5 was later on lifted. 5n account of the suspension of the implementation of the -/AT 0aw, respo esponde ndent nt 9led 9led with with :"R :"R a clai claim m for refun efund d of the the $% fran franch chis ise e ta& ta& it allegedly erroneously erroneously paid in the total amount of ;!7,!1<,<7.<. Respondent claimed that the passage of the -/AT law which omitted the $% franchise ta&. :"R having failed to act of its claim, respondent 9led a petition for review before the +TA. +TA granted the respondent=s claim, and ordered ordered petitioner to >R-8?*@ >R-8?*@ the amount of ;!7,!1<,<7.<. ;!7,!1<,<7.<. ;etitioner 9led a petitioner for review before the +A. The appellate aBrmed that of +TA. Cence this petition.
ISSUE-
Dhether or not respondent is liable to pay the $% franchise ta& under 'ection ! (b) of ;@ *o. < or the 1!! *ational "nternal Revenue +ode (*"R+) during the suspension of the enforcement or implementation of RA *o. !!6 or the -/AT 0aw which was passed in 114 amending such provision of the *"R+.
RULING;etition was grated. Respondent is liable to pay the $% franchise ta&. RATIO ,ECI,EN,I'ection of the -/AT 0aw omitted respondent for paying such ta& under 'ection $ of the -/AT 0aw, respondent=s /AT on sales of services. The eectivity because of the TR5.
the $% franchise ta& and e&cluded that said provision. Cowever, in sale of services is sub#ect to 7% of -/AT was however suspended
The TR5 restrained merely the implementation of those provisions of the -/AT 0aw which need to be implemented by the :"R and not those provisions which are selfoperative. "n the R3+ *o. !14, issued by the +"R on une $7, 114, said circular directed all internal revenue oBcers to comply with the directives that >All /at and non/AT persons shall be governed by the provisions of the *"R+ prior to its amendment by Republic Act. *o. !!6, and >All other amendment of the *"R+ made by RA !!6 shall be considered ineective until 'upreme +ourt has declared otherwise. Dhen the TR5 in Tolentino et al. was lifted, the ta& liability of respondent was, following the earlier 2uoted Revenue 3emorandum +ircular, governed by 'ection ! (b) of the Ta& +ode in which case it was liable to pay the $% franchise ta&. The abolition of the $% franchise ta& on telecommunications companies, and its replacement by the 7% /AT, was eective and implemented only on anuary , 116. To grant a refund of the franchise ta& it paid prior to the eectivity and implementation of the /AT would create a vacuum and thereby deprive the government from collecting either the /AT or the franchise ta&.
