Finance v. Muñez

LAZARO-JAVIER, J.:

The Case This Petition for Certiorari1 seeks to nullify the following dispositions of the Regional Trial Court (RTC)-Branch 60, Cadiz City, in Special Civil Action (SCA) No. 88-C entitled "In the Matter of Declaratory Relief on the Validity of BIR Revenue Regulations No. 13-2013 "Amending Section 2(b) of Revenue Regulations No. 13-08, Relative to the Definition of Raw Sugar for Value-Added Tax purposes, Rural Sugar Planters' Association, Inc., Northern Negros Planters Association, Inc., Confederation of Sugar Producers Associations, Inc., United Sugar Producers Federation of the Philippines, Inc., National Federation of Sugar Producers (NFSP), Inc. v. Perfecto L. Aranas, in his capacity as the Regional Director of the Bureau of Internal Revenue for Region XII, Kim Jacinto-Henares, in her capacity as the Commissioner of Internal Revenue and Cesar V. Purisima in his capacity as the Secretary of Finance, with prayer for temporary restraining order and/or writ of preliminary injunction: 1) Consolidated Orders dated October 22, 20132 granting the application for a Writ of Preliminary Injunction against the implementation of Revenue Regulation No. (RR) 13-2013 imposing Value-Added Taxes (VAT) on the sale of raw sugar; 2) Order dated October 23, 20133 approving respondents' surety bond in the amount of ₱1,000,000.00; 3) The Writ of Preliminary Injunction4 enjoining petitioners from implementing RR 13-2013 and preserving the status quo ante bellum pending determination of the case on the merits; and 4) Order dated January 14, 20145 denying petitioners' motion for reconsideration.

Antecedents On September 19, 2008, the Bureau of Internal Revenue (BIR) issued RR 13-2008, prescribing the updated and consolidated policies and procedures for the advance payment of VAT on the sale of refined sugar6 pursuant to Republic Act No. 9337.7 Under Section 2(b) thereof, "raw sugar" is defined as: (b) Raw Sugar refers to sugar whose content of sucrose by weight in dry state, corresponds to a polarimeter reading of less than 99.5°. Cane sugar produced each production year shall be classified, for internal revenue purposes, as follows: 1.

"A" is raw sugar which is intended for export to the United States Market. 2.

"B" is raw sugar which is intended for the Domestic Market. 3.

"C" is raw sugar which is reserved for, but have not yet matured for release to the Domestic Market. 4.

"D" is raw sugar which is intended for export to the World Market. 5.

"E" is reclassified "D" sugar for sale to Food Processors/Exporters operating Customs Bonded Warehouse (CBW) or to an enterprise located within the special processing export zone.8 On September 20, 2013, then Department of Finance Secretary Cesar Antonio V. Purisima (DoF Sec. Purisima),9 upon recommendation of Commissioner of Internal Revenue Kim S. Jacinto-Henares (CIR Henares),10 issued RR 13-2013, defining raw sugar, as follows: REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE BUREAU OF INTERNAL REVENUE Date: September 20, 2013 REVENUE REGULATIONS NO.

13-2013 SUBJECT: Amending Section 2 (b) of Revenue Regulations No.1aшphi1 13-08, Relative to the Definition of Raw Sugar for Value Added Tax Purposes TO: All Internal Revenue Officers and Others Concerned