Systra Philippines v. Revenue

CORONA, J.:

This resolves petitioner Systra Philippines, Inc.'s (1) motion for leave to file a second motion for reconsideration and (2) second motion for reconsideration of the Court's March 28, 2007 resolution. On March 9, 2007, petitioner filed a petition for review on certiorari assailing the January 18, 2007 decision1 of the Court of Tax Appeals (CTA) in CTA EB Case No. 135. The Court denied the petition in its March 28, 2007 resolution on the following grounds: (a) failure of petitioner's counsel to submit his IBP2 O.R.3 number showing proof of payment of IBP dues for the current year (the IBP O.R. No. was for 2006, i.e.

, it was dated November 20, 2006); (b) submitting a verification of the petition, certification of non-forum shopping and affidavit of service that failed to comply with the 2004 Rules on Notarial Practice with respect to competent evidence of affiants' identities and (c) failure to give an explanation why service was not done personally as required by Section 11, Rule 13 in relation to Section 3, Rule 45 and Section 5(d), Rule 56 of the Rules of Court. On July 5, 2007, petitioner's motion for reconsideration was denied with finality as there was no compelling reason to warrant a modification of the March 28, 2007 resolution. Thus, the present motions.

Petitioner claims that this Court has granted second and even third motions for reconsideration for "extraordinarily persuasive reasons." It avers that this Court should look into the importance of the issues involved in deciding whether leave to file a second motion for reconsideration should be granted or not. It prays that its petition should not be denied on the basis of procedural lapses alone and points out that the substantial amount involved in the petition justifies relaxation of technical rules.

It asserts that there is an important legal issue involved in this case: whether the exercise of the option to carry over excess income tax credits under Section 76 of the National Internal Revenue Code of 1997, as amended (Tax Code) bars a taxpayer from claiming the excess tax credits for refund even if the amount remains unutilized in the succeeding taxable year. Finally, it contends that the assailed CTA decision was contradictory to the decisions of the Court of Appeals (CA)4 in Bank of the Philippine Islands v. Commissioner of Internal Revenue 5 and Raytheon Ebasco Overseas Ltd. Philippine Branch v. Commissioner of Internal Revenue 6 which involved the same issue as that in this case. According to petitioner, in view of those CA decisions, it is unjust to deprive it of the right to claim a refund.

We deny petitioner's motions. A Second Motion For Reconsideration Is Prohibited The denial of a motion for reconsideration is final. It means that the Court will no longer entertain and consider further arguments or submissions from the parties respecting the correctness of its decision or resolution.7 It signifies that, in the Court's considered view, nothing more is left to be discussed, clarified or done in the case since all issues raised have been passed upon and definitely resolved.

Any other issue which could and should have been raised is deemed waived and is no longer available as ground for a second motion. A denial with finality underscores that the case is considered closed.8 Thus, as a rule, a second motion for reconsideration is a prohibited pleading.9 The Court stressed in Ortigas and Company Limited Partnership v. Velasco :10 A second motion for reconsideration is forbidden except for extraordinarily persuasive reasons, and only upon express leave first obtained.11 (emphasis supplied) It is true that procedural rules may be relaxed in the interest of substantial justice.

They are not, however, to be disdained as mere technicalities that may be ignored at will to suit the convenience of a party.12 They are intended to ensure the orderly administration of justice and the protection of substantive rights in judicial proceedings.13 Thus, procedural rules are not to be belittled or dismissed simply because their non-observance may have resulted in prejudicing a party's substantive rights.14 Like all rules, they are required to be followed except only when, for the most persuasive of reasons, they may be relaxed to relieve a litigant of negative consequences commensurate with the degree of thoughtlessness in not complying with the prescribed procedure.15 In this case, contrary to petitioner's claim, there was no compelling reason to excuse non-compliance with the rules. Nor were the grounds raised by it extraordinarily persuasive.16 Moreover, petitioner can neither properly nor successfully rely on the decisions of the CA in the Bank of the Philippine Islands and Raytheon Ebasco Overseas Ltd. Philippine Branch cases.

First, the CA and the CTA are now of the same level pursuant to RA 9282.17 Decisions of the CA are thus no longer superior to nor reversive of those of the CTA. Second, a decision of the CA in an action in personam binds only the parties in that case. A third party in an action in personam cannot claim any right arising from a decision therein.

Finally and most importantly, while a ruling of the CA on any question of law is not conclusive on this Court, all rulings of this Court on questions of law are conclusive and binding on all courts including the CA. All courts must take their bearings from the decisions of this Court.18 On The Substantive Aspect, The Petition Has No Merit The antecedents of this case are as follows: On April 16, 2001, petitioner filed with the [Bureau of Internal Revenue (BIR)] its Annual Income Tax Return ("ITR") for the taxable year ended December 31, 2000 declaring revenues in the amount of [₱18,252,719] the bulk of which consists of income from management consultancy services rendered to the Philippine Branch of Group Systra SA, France. Subjecting said income from consultancy services of petitioner to 5% creditable withholding tax, a total amount of [₱4,703,019] was declared by petitioner as creditable taxes withheld for the taxable year 2000.

For the same period, petitioner reflected a total gross income of [₱3,752,129], a net loss of [₱17,930] and a minimum corporate income tax (MCIT) of [₱75,043]. Said MCIT of ₱75,043 was offset against its total tax credits for the year 2000 amounting to [₱4,703,019] thereby leaving a total unutilized tax credits of [₱4,627,976], computed as follows: Gross Income ₱3,752,129.00 Less: Deductions ₱3,770,059.00 Net loss