Good Day Trading v.
Board of Tax Appeals (1954)
Petitioner: Good Day Trading Corporation
Respondent: Board of Tax Appeals
Ponente: Montemayor, J.
DOCTRINE:
Under the Code, either the owner or importer shall pay the specific taxes on
imported articles. So that if the sale of the cigarettes by the importer to the
owners of the certificates of indebtedness was valid, then said purchasers
become the owners of the shipment and could pay specific taxes.
FACTS:
1. GOOD DAY TRADING CORPORATION (GOOD DAY) imported
238 cases of Chesterfield cigarettes. A surety bond was filed in its
favor to secure the payment of specific taxes due on cigarette
importation.
2. While then cigarettes were in storage, GOOD DAY sold them to
BUENAVENTURA ISLETA for P32k, exclusive of specific taxes.
This sale was conditioned on the buyer paying all the specific taxes
within 15 days from agreement.
3. ISLETA informed GOOD DAY that he bought the cigarettes for his
companions, who intended to pay the specific taxes with their
backpay certifiates/certificates of indebtedness.
4. But despite several extensions to ISLETA and COMPANIONS, they
failed to show evidence of having paid the specific taxes or having
filed a surety bond. Hence, GOOD DAY decided to rescind the
sale.
5. GOOD DAY, on account of specific taxes, paid P8.8k to the CIR
and attempted to withdraw 40 cases of cigarettes. The
warehouseman refused, saying that ISLETA and COMPANIONS
claimed ownership over the shipment since theyve submitted the
certificates of indebtedness for payment of all specific taxes.
6. As it turns out, the BIR eventually approved the said certificates as
payment for specific taxes on cigarettes. The buyers withdrew all
the cigarettes thereafter.
7. Hence, GOOD DAY asked for refund of the P8.8k it paid in cash.
The CIR granted the refund.
But when it reached the Tax Board, the refund was deemed not
granted and further ordered GOOD DAY to pay the remaining
balance.
Essentially, what it means is that GOOD DAY was held
liable for the whole of specific taxes.
ISSUES:
WoN the Board of Tax appeals correctly denied the refund to GOOD
DAY
RULING + RATIO:
NO.
The main ground on which the Tax Board based its resolution is
that petitioner Good Day Trading Corporation is the importer of the
shipment of cigarettes and therefore is the one called upon to pay
the specific taxes, and consequently, should pay the same in cash.
o TAX BOARD: cites authorities defining what is meant by
an importer, namely, that the importer is the primary
consignee to whom the goods are sent and who himself
presents the invoices, makes the entry, receives the bill
of lading, and gets the goods, as distinguished from one
who may be the ultimate consignee, and that it does not
include a person who purchases the goods from the
importer after they have been brought within the
jurisdiction of the United States.
o GOOD DAY: argues that as per the Revised Administrative
Code, importation is not completed until the duties due
upon the merchandise have been paid and legal permit
for withdrawal shall have been granted; so that the
person or entity paying the duties due and receiving the
legal permit for withdrawal and actually withdrawing the
goods becomes the importer.
However, under our view of the case, whether or not petitioner is
the importer of the cigarettes in question, is of little import. Section
125 of the NIRC provides:
o SEC. 125. Payment of specific tax on imported articles.
Specific taxes on imported articles shall be paid by the
owner or importer to the customs officers, conformably
with regulations of the Department of Finance and before
the release of such articles from the customhouse.
Under said provision, either the owner or importer shall pay the
specific taxes on imported articles. So that if the sale of the
cigarettes by the importer to the owners of the certificates of
indebtedness was valid, then said purchasers become the
owners of the shipment and could pay the specific taxes.
DISPOSITION
The resolution of the Tax Board denying the refund of the P8,800 and
ordering petitioner to pay the balance of P43,560 is reversed.