Facts: Davao Gulf Lumber Corp. is a licensed forest concessionaire possessing a Timber License Agreement granted by the Ministry of Natural Resources (now Department of Environment and Natural Resources). From July 1, 1980 to January 31, 1982 petitioner purchased, from various oil companies refined and manufactured mineral oils as well as motor and diesel fuels, which it used exclusively for the exploitation and operation of its forest concession. Said oil companies paid the specific taxes imposed under 153 and 156 of the NIRC, on the sale of said products. Being included in the purchase price of the oil products, the specific taxes paid by the oil companies were eventually passed on to the user, the petitioner in this case.
On December 13, 1982, petitioner filed before Respondent Commissioner of Internal Revenue (CIR) a claimed for refund in the amount of P120,825.11, representing 25% of the specific taxes actually paid on the abovementioned fuels and oils that were used by petitioner in its operations as forest concessionaire.
Petitioner complied with the procedure for refund, including the submission of proof of the actual use of the aforementioned oils in its forest concession as required by the above-quoted law. Petitioner, in support of its claim for refund, submitted to the CIR the affidavits of its general manager, the president of the Philippine Wood Products Association, and 3 disinterested persons, all attesting that the manufactured diesel and fuel oils were actually used in the exploitation and operation of its forest.
On January 20, 1983, petitioner filed at the CTA a petition for review. On June 21, 1994, the CTA rendered decision finding petitioner entitled to a partial refund of specific taxes the latter had paid in the reduced amount of P2,923.15.
Insisting that the basis for computing the refund should be the increased rates prescribed by Secs. 153 and 156 of the NIRC, petitioner elevated the matter to the CA. CA affirmed the decision of the CTA. Hence, this petition.
Issue: Whether or not the petitioner is entitled to the tax refund under the increased rates prescribed by Secs. 153 and 156 of the NIRC.
Held: At the outset, it must be stressed that the petitioner is entitled to a partial refund under Sec. 5 of RA 1435, which was enacted to provide means for increasing the Highway Special Fund. The gasoline and fuel purchased by mining and lumber concessionaires are used within their compounds and roads, and their vehicles seldom used the National Highways, they do not directly benefit from the Fund and its use. The Highway Special Fund was abolished in 1985, but since petitioner purchased the subject manufactured diesel and fuel oils from July 1, 1980 to January 31, 1982, it is entitled to claim the refund under Sec. 5 of RA 1435.
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 Sec. 5 RA 1435, is in the nature of a tax exemption, it must be construed strictissimi juris against the grantee. Hence, petitioners claim of refund on the basis of the specific taxes it actually paid must expressly be granted in a statute stated in a language too clear to be mistaken.
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