G.R. No. 119786 - ATLAS CONSOLIDATED MINING AND DEVELOPMENT CORPORATION, VS. COMMISSIONER OF INTERNAL REVENUE, COURT OF TAX APPEALS AND COURT OF APPEALS.

Ruling

ACCORDINGLY, the decision in G.R. Nos. 83583-84 is hereby MODIFIED. The private respondents CLAIM for REFUND is GRANTED, computed on the basis of the amounts deemed paid under Sections 1 and 2 of R.A. NO. 1435, without interest. "We rule, therefore, that since Atlass claims for refund cover specific taxes paid before 1985, it should be granted the refund based on the rates specified by Sections 1 and 2 of R.A. No. 1435 and not on the increased rates under Sections 153 and 156 of the Tax Code of 1977, provided the claims are not yet barred by prescription. (Underscoring supplied.)" [10] Petitioner also calls attention to the apparent conflict between Insular Lumber v. Court of Appeals [11] and Commissioner of Internal Revenue v. Atlas Consolidated Mining and Development Corporation [12] (First Atlas Case), on the one hand, and Rio Tuba and the Second Atlas Case, on the other. This issue has been laid to rest by the Court in Davao Gulf: "xxx. Neither Insular Lumber Co. nor the first Atlas case ruled on the issue of whether the refund privilege under Section 5 should be computed based on the specific tax deemed paid under Sections 1 and 2 of RA 1435, regardless of what was actually paid under the increased rates. Rio Tuba and the second Atlas case did. "Insular Lumber Co. decided a claim for refund on specific tax paid on petroleum products purchased in the year 1963, when the increased rates under the NIRC of 1977 were not yet in effect. Thus, the issue now before us did not exist at the time, since the applicable rates were still those prescribed under Sections 1 and 2 of RA 1435. "On the other hand, the issue raised in the first Atlas case was whether the claimant was entitled to the refund under Section 5, notwithstanding its failure to pay any additional tax under a municipal or city ordinance. Although Atlas purchased petroleum products in the years 1976 to 1978 when the rates had already been changed, the Court did not decide or make any pronouncement on the issue in that case. "Clearly, it is impossible for these two decisions to clash with our pronouncement in Rio Tuba and second Atlas case, in which we ruled that the refund granted be computed on the basis of the amounts deemed paid under Sections 1 and 2 of RA 1435. In this light, we find no basis for petitioners invocation of the constitutional proscription that no doctrine or principle of law laid down by the Court in a decision rendered en banc or in a division may be modified or reversed except by the Court sitting en banc. " Likewise, Davao Gulf has already debunked petitioners argument that not applying Sections 142 and 145 of the NIRC rendered the CTA Decision unfair and arbitrary. The Court ruled: "Finally, petitioner asserts that equity and justice demand that the computation of the tax refunds be based on actual amounts paid under Sections 153 and 156 of the NIRC. We disagree. According to an eminent authority on taxation, there is no tax exemption solely on the ground