Wake Up, Philippines!

Relaxing the rules

Posted in Labor, Labor Law, Laws, Supreme Court Decisions by Erineus on February 18, 2009

Rules of procedure should not be applied in a very rigid and technical sense if the ends of justice will be defeated. This is once more illustrated in this case of Ed.

Ed was employed in a cement company (UCC) in 1996 starting as a planner in the motor pool section. In the course of his employment he was assigned and promoted to different positions. But when he was already in a supervisory level position, he got involved in an alleged theft of company property and after investigation establishing his culpability, was dismissed for loss of trust and confidence.

Thus Ed filed an action against UCC and its plant manager for illegal dismissal before the NLRC. In its decision the Labor Arbiter (LA) found UCC guilty of illegal dismissal as it failed to establish the commission of the theft much less Ed’s culpability. So the LA ordered Ed’s reinstatement with back wages plus moral and exemplary damages all totaling P1,185,835.25. Initially this was affirmed by the NLRC modifying only the award of moral and exemplary damages into P100,000 and P50,000. But on UCC’s motion for reconsideration the NLRC reversed and set aside its previous ruling and dismissed Ed’s complaint.

Posthaste, Ed filed a petition for certiorari in the Court of Appeals (CA). But the latter dismissed his petition outright for deficient payment of docket fee, failure of his counsel to indicate his Roll of Attorney’s number and the date and place of issue of his IBP OR, failure to append a legible copy of annex “E” and improper verification as it is not based on personal knowledge since it was only done by his wife as attorney-in-fact.

Ed filed a motion for reconsideration explaining the procedural lapses pointing out that: the petition itself contained a reservation on his willingness and readiness to pay the deficiency that may be further assessed as the fee he paid was based only on a prior inquiry via long distance. To settle the deficiency, he sent a postal money order for P1,000; the roll of attorney’s number as well as the IBP OR also appeared in the petition but in other parts; the illegible copy of annex “E” is only one of the annexes that should not merit outright dismissal and to cure it, he submitted a clearer copy; while the verification was executed by Ed’s wife whom he constituted as his attorney-in-fact only because he was then already working abroad.

Notwithstanding the exhaustive explanation, the CA still denied his motion for reconsideration. Was the CA correct?

No. Subsequent and substantial compliance by the appellant may warrant the relaxation of the rules of procedure. The rules of procedure are mere tools designed to expedite the decision or resolution of cases and other matters pending in court. Strict and rigid application of technicalities that tend to frustrate rather than promote substantial justice must be avoided. Case should be determined on the merits after full opportunity to all parties to ventilate their causes and defenses rather than on some technicality or procedural imperfections.

In this case Ed readily corrected the procedural lapses in his petition cited by the CA as reason for the dismissal thereof. In all, he subsequently and substantially complied with the procedural requirements initially found lacking or defective by the appellate court.

Undeniably, the CA was correct in dismissing outright his petition for certiorari. However, upon motion for reconsideration and with a full and complete explanation, the CA should have reconsidered its prior dismissal and reinstated the petition. It is not remiss for the CA to adjudge Ed’s case based on the merits especially with the conflicting decisions rendered by the NLRC (Hipol vs. NLRC etc. G.R. 181818, December 18, 2008).

Note: Books containing compilation of my articles on Labor Law and Criminal Law (Vols. I and II) are now available. Call tel. 7249445.

E-mail at: jcson@pldtdsl.net

A LAW EACH DAY (Keeps Trouble Away)
By Jose C. Sison
Updated February 18, 2009 12:00 AM
http://www.philstar.com/Article.aspx?articleId=441325&publicationSubCategoryId=64

View previous articles of this column.

SC rules on tax exemption for electric co-op

Posted in Cooperatives, Supreme Court, Supreme Court Decisions, Tax by Erineus on February 11, 2009

The Supreme Court (SC) has affirmed a Court of Appeals (CA) decision that ordered the Davao Oriental Electric Cooperative, Inc. to pay the Davao Oriental provincial government some R1.8 million in real estate taxes, excluding penalties and surcharges, from the time the government lifted the tax exemptions of electric cooperatives in 1984.

In a decision written by Chief Justice Reynato S. Puno, the SC affirmed the Nov. 15, 2005 CA decision that reversed the ruling of the regional trial court (RTC) that dismissed the collection suit filed by the province of Davao Oriental.

At the height of the economic crisis in 1984, the late President Ferdinand Marcos issued Presidential Decree No. 1955 that withdrew all exemptions from the payment of duties, taxes and other charges granted to private business enterprises engaged in any economic activity, including electric cooperatives.

Two years later on Jan. 8, 1986, Marcos issued PD 2008 that required the then Ministry of Finance to immediately restore the tax exemption of all electric cooperatives.

But after Marcos was replaced by then President Corazon C. Aquino, the latter issued Executive Order No. 93 that withdrew all tax and duty exemptions granted to private entities effective March 10, 1987.

The implementation of EO 93 for electric cooperatives was suspended until June 30, 1987.

On July 1, 1987, the government restored the tax and duty exemption privileges under PD 269, the law that created the electric cooperatives.

While the tax exemption was suspended, the Davao Oriental provincial government assessed the value of the province’s electric cooperative.

The assessment became final and executory after the cooperative failed to protest the assessment before the Board of Assessment Appeals.

In May, 2000, the Davao Oriental provincial government filed a collection suit before the RTC which dismissed the case.

On appeal, the CA reversed the RTC and ordered the cooperative to pay the provincial government some R1.8 million in realty taxes, excluding penalties and surcharges, from 1985 to 1989.

The cooperative elevated the case to the SC. The cooperative told the SC that it was exempted from the payment of real estate tax from 1984 to 1989 because the restoration of tax exemptions under Fiscal Incentive Review Board (FIRB) Resolution No. 2487 “retroacts” to the date of withdrawal of said exemptions.

In resolving the issue, the SC said that the CA was correct when the appellate court ruled that FIRB Resolution No. 24-87 “bares no indicia of retroactivity of its application.”

“A claim for exemption from tax payments must be clearly shown and be based on language in the law too plain to be mistaken. Elsewise stated, taxation is the rule, exemption therefrom is the exception,” the SC stressed.

At the same time, the SC said that when the electric cooperative failed to exhaust administrative remedies by appealing the assessment of its properties, it cannot assail the validity of the said assessment before the courts.

“Petitioner is deemed to have admitted the correctness of the assessment of its properties. In addition, Section 64 of PD No. 464 requires that the taxpayer must first pay under protest the tax assessed against him before he could seek recourse from the courts to assail its validity,” the SC pointed out.

“In view whereof, petitioner’s appeal is denied. The Nov. 15, 2005 decision of the Court of Appeals in CA-G.R. CV No. 67188 is affirmed,” it ruled.

Justices Antonio T. Carpio, Renato C. Corona, Adolfo S. Azcuna and Teresita J. Leonardo – de Castro concurred in the decision.

Source: http://www.mb.com.ph/archive_pages.php?url=http://www.mb.com.ph/issues/2009/02/07/MTNN20090207147541.html