Reinald Raven L.

Guerrero Taxation Law 1

SURIGAO CONSOLIDATED MINING CO. vs. COLLECTOR OF INTERNAL

REVENUE

FACTS:
Surigao Consolidated Mining Company had its principal office in the City of
Iloilo, and was operating its mining concessions in Mainit, Surigao. Pursuant to section
246 of the Internal Revenue Code, it filed a bond and had been regularly filing its
returns for minerals removed from its mines during each calendar quarter and
paying ad valorem tax thereon within 20 days after the close of every quarter. In each
case, computation of the ad valorem tax was based on the market value of the
minerals set forth in the returns. Due to the interruption of the communications due to
the outbreak of the war, the principal office of Surigao Consolidated lost contact with
its mines and never received the production reports for the fourth quarter of 1941. In
order to avoid incurring any tax penalty, it deposited a check amount of P27,000.00
payable to and indorsed in favor of the City Treasurer (of Iloilo) in payment of the ad
valorem taxes for the fourth quarter of 1941.
After the termination of the war, Commonwealth Act No. 722 was enacted,
which provided for the filing of returns for minerals removed during the last quarter of
1941 up to December 31, 1945 and the payment of ad valorem tax on said minerals
to February 28, 1946.
Surigao Consolidated in its final submission filed its tax returns with a request
for refund amounting to P17,051.14 for the paid taxes during the war, invoking
Republic Act No. 81 which provided for tax condonation of unpaid taxes during the
course of the war. It argues that since the law condones the taxes due from taxpayers
who failed to pay their taxes, it would be unfair to deny this benefit to those taxpayers
who had been prompt in paying theirs.
CIR denied the request for the refundon the ground that the money already paid
as ad valorem tax was legally due to the Government. The Court of Tax Appeals,
likewise rendered its decision denying the claim for refund.

ISSUE: Is Surigao Consolidated entitled to the refund of ad valorem tax?

HELD:
No, Surigao Consolidated is not entitled to the refund. R.A. 81 clearly refers to
the condonation of unpaid taxes only. The condonation of a tax liability is equivalent
and is in the nature of a tax exemption. Being so, it should be sustained only when
expressed in explicit terms, and it cannot be extended beyond the plain meaning of
those terms. It is the universal rule that he who claims an exemption from his share of
the common burden of taxation must justify his claim by showing that the Legislature
intended to exempt him by words too plain to be mistaken.
Petitioner failed to point any portion of the law that explicitly provides for a refund of
those taxpayers who had paid their taxes on the items and under circumstances
mentioned in the RA 81. Thus Surigao Consolidated is not entitled to such exemption.