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Resins, Inc. v. Auditor General

Resins, Inc. sought a tax refund, claiming exemption for importing urea and formaldehyde separately under Republic Act 2609. However, the Act refers to "urea formaldehyde" as a finished product, not the separate chemicals. While some legislative statements referred to "urea and formaldehyde", the enrolled bill passed by Congress used "urea formaldehyde". The court cannot speculate about mistakes, and individual statements do not reflect the full legislature's intent. Further, tax exemptions are strictly construed against the taxpayer, and the language of the Act did not explicitly and categorically grant the exemption Resins claimed. Therefore, the court held that Resins was not covered by the tax refund.

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174 views1 page

Resins, Inc. v. Auditor General

Resins, Inc. sought a tax refund, claiming exemption for importing urea and formaldehyde separately under Republic Act 2609. However, the Act refers to "urea formaldehyde" as a finished product, not the separate chemicals. While some legislative statements referred to "urea and formaldehyde", the enrolled bill passed by Congress used "urea formaldehyde". The court cannot speculate about mistakes, and individual statements do not reflect the full legislature's intent. Further, tax exemptions are strictly construed against the taxpayer, and the language of the Act did not explicitly and categorically grant the exemption Resins claimed. Therefore, the court held that Resins was not covered by the tax refund.

Uploaded by

Gyrsyl Jaisa Guerrero
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Taxation I

Case Digest Compilation


there was such a clear and manifest intention of legislative
Resins, Inc. v. Auditor General will as to compel such a refund.
1968
[EN BANC]

Facts: Petitioner here sought a refund from respondent


Central Bank on the claim that it was exempt from the
margin fee under Republic Act No. 2609 for the importation
of urea AND formaldehyde, as separate units, used for the
production of synthetic glue of which it was a manufacturer.
Since the specific language of the Act speak of "UREA
FORMALDEHYDE," and petitioner admittedly did import
UREA AND FORMALDEHYDE SEPARATELY, its plea could be
granted only if we could construe the above provision of law
to read "urea and formaldehyde." In the Casco Philippine
Chemical Co., Inc. v. Gimenez decision, we could not see
our way clear to doing so. We still cannot see it that way.
Hence, this petition must fail.

Issue: Whether or not Resins is covered of the tax refund.

Held: Our inability to indulge petitioner in the


aforecited Casco petition was made clear by the present
Chief Justice. Thus: "Hence, 'urea formaldehyde' is clearly a
finished product, which is patently distinct and different
from 'urea' and 'formaldehyde', as separate articles used in
the manufacture of the synthetic resins known as 'urea
formaldehyde'. Petitioner contends, however, that the bill
approved in Congress contained the copulative conjunction
'and' between the terms 'urea' and 'formaldehyde', and that
the members of Congress intended to exempt 'urea' and
'formaldehyde' separately as essential elements in the
manufacture of the synthetic resin glue called 'urea.
fomaldehyde' not the latter as a finished product, citing in
support of this view the statements made on the floor of
the Senate, during the consideration of the bill before said
House, by members thereof. But, said individual statements
do not necessarily reflect the view of the Senate. Much less
do they indicate the intent of the House of
Representatives ... Furthermore, it is well settled that the
enrolled bill — which uses the term 'urea formaldehyde'
instead of 'urea and formaldehyde' — is conclusive upon the
courts as regards the tenor of the measure passed by
Congress and approved by the President ... If there has
been any mistake in the printing of the bill before it was
certified by the officers of Congress and approved by the
Executive — on which we cannot speculate, without
jeopardizing the principle of separation of powers and
undermining one of the cornerstones of our democratic
system — the remedy is by amendment or curative
legislation, not by judicial decree."

Then, again, there is merit in the contention of the Solicitor


General, as counsel for respondent Central Bank, and the
Auditor General, that as a refund undoubtedly partakes of a
nature of an exemption, it cannot be allowed unless granted
in the most explicit and categorical language. As was held
by us in Commissioner of Internal Revenue vs.
Guerrero:5 "From 1906, in Catholic Church vs. Hastings to
1966, in Esso Standard Eastern, Inc. vs. Acting
Commissioner of Customs, it has been the constant and
uniform holding that exemption from taxation is not favored
and is never presumed, so that if granted it must be strictly
construed against the taxpayer. Affirmatively put, the law
frowns on exemption from taxation, hence, an exempting
provision should be construed strictissimi juris." Certainly,
whatever may be said of the statutory language found in
Republic Act 2609, it would be going too far to assert that

1
Based on the syllabus of Atty. Kriska Marna A. Buena
Ateneo De Davao University S.Y. 2020-2021
Digested by: Ampatuan, Ballos, Mahusay, Malicay, Nono, Paclibar, Picot, Teng

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