Admin Cases (jan 19).docx

United States vs. Dorr



There can be no conviction for any of the offenses described in the section of which complaint was based, unless it is for the offense of publishing a scurrilous libel against the Government of the US or the Insular Government of the PI.



“The Insular Government of the Philippine Islands”

Facts: 

Defendants have been convicted upon a complaint charging them with the offense of writing, publishing and circulating a scurrilous libel against the Government of the United States and the Insular Government of the Philippine Islands.



Complaint is based upon Sec.8 of Act No. 292 of the Commission.

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Alleged libel was published as an editorial in the issue of the Manila Freedom of April 6, 1902, under the caption of “A few hard facts”

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The attack was basically on the appointment of natives to important government positions, specifically: Tecson as justice of the peace, Trinidad and Pardo de Tavera as Commissioners.





The uttering of seditious words or speeches;

o

The writing, publishing, or circulating of scurrilous libels against the Government of the United States or the Insular Government of the Philippine Islands;

o

The writing, publishing, or circulating of libels which tend to disturb or obstruct any lawful officer in executing his office;

o

Or which tend to instigate others to cabal or meet together for unlawful purposes;

o

Or which suggest conspiracies or riots;

o

Or which tend to stir up the people against the lawful authorities or to disturb the peace of the community, the safety and order of the Government;

o

Knowingly concealing such evil practices.

or

incite

rebellious

The article in question is described in the complaint as "a scurrilous libel against the Government of the United States and the Insular Government of the Philippine Islands, which tends to obstruct the lawful officers of the United States and the Insular Government of the Philippine Islands in the execution of their offices…

Issue: 

Whether or not the published article constitutes a violation under Sec. 8 or Act No. 292

Ruling: 

The court however, agreed that the article in question has none of the seditious tendencies described in Sec. 8of Act No. 292.

Government - institution of aggregate of institutions by which an independent society makes and carries out those rules of action which are necessary to enable men to live in a social state, or which are imposed upon the people forming that society by those who possess the power or authority of prescribing them.

o

Administration - the aggregate of those persons in whose hands the reins of government are for the time being.



The article in question contains no attack upon the governmental system or authority of the US or on the form of government by a Civil Commission and a Civil Governor.



The attack was on the character of men who are in the government.



The publication of the article, therefore, no seditious tendency being apparent, constitutes no offense under Act No. 292, Sec. 8.



Judgement of conviction reversed.



Defendants acquitted.

Sec. 8 of Act No. 292 defines offenses as: o

o



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After a preliminary investigation, the Administrative Case was "considered closed for lack of merit."

On December 1988, another charge sheet, was filed against Beja by the PPA General Manager also for dishonesty… o

The charge consisted of six (6) different specifications of administrative offenses including fraud against the PPA in the total amount of P218,000.00.

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PPA general manager indorsed it to the AAB for "appropriate action."

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At the scheduled hearing, Beja asked for continuance on the ground that he needed time to study the charges against him.

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The AAB proceeded to hear the case and gave Beja an opportunity to present evidence. However, on February 20, 1989, Beja filed a petition for certiorari with preliminary injunction before the Regional Trial Court of Misamis Oriental.

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Two days later, he filed with the AAB a manifestation and motion to suspend the hearing of Administrative Case on account of the pendency of the certiorari proceeding before the court. AAB denied the motion and continued with the hearing of the administrative case.

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Meanwhile, a decision was rendered by the AAB in Administrative Case and ruled not in favor of Mr. Beja.

Republic of the Philippines SUPREME COURT Manila EN BANC Issue: G.R. No. 97149 March 31, 1992 FIDENCIO Y. BEJA, SR., petitioner, vs. COURT OF APPEALS, HONORABLE REINERIO O. REYES, in his capacity as Secretary of the Department of Transportation and Communications; COMMODORE ROGELIO A. DAYAN, in his capacity as General Manager of the Philippine Ports Authority; DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS, ADMINISTRATIVE ACTION BOARD; and JUSTICE ONOFRE A. VILLALUZ, in his capacity as Chairman of the Administrative Action Board, DOTC, respondents.



Whether or not the Secretary of the Department of Transportation and Communications (DOTC) and/or its Administrative Action Board (AAB) have jurisdictions over administrative cases involving personnel below the rank of Assistant General Manager of the Philippine Ports Authority (PPA), an agency attached to the said Department.

Ruling: Contention of the Petitioner: Petitioner contends that under this provision, the PPA Board of Directors and not the PPA General Manager is the "proper disciplining authority.

Facts: 

Petitioner Fidencio Y. Beja, Sr. was first employed by the PPA as arrastre supervisor in 1975.

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In 1988, as a result of the reorganization of the PPA, he was appointed Terminal Supervisor.

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On October 1988, the PPA General Manager, Rogelio A. Dayan, filed Administrative Case against petitioner Beja and Hernando G. Villaluz for grave dishonesty, grave misconduct, willful violation of reasonable office rules and regulations and conduct prejudicial to the best interest of the service. o

Beja and Villaluz allegedly erroneously assessed storage fees resulting in the loss of P38,150.77 on the part of the PPA.



Imposed during the pendency of an administrative investigation, preventive suspension is not a penalty in itself.



It is merely a measure of precaution so that the employee who is charged may be separated, for obvious reasons, from the scene of his alleged misfeasance while the same is being investigated.

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Thus, preventive suspension is distinct administrative penalty of removal from office

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While the former may be imposed on a respondent during the investigation of the charges against him, the latter is the penalty which may only be meted upon him at the termination of the investigation or the final disposition of the case.

from

the

The PPA general manager is the disciplining authority who may, by himself and without the approval of the PPA Board of Directors, subject a respondent in an administrative case to preventive suspension. His disciplinary powers are sanctioned, not only by Sec. 8 of P.D. No. 857 aforequoted, but also by Sec. 37 of P.D. No. 807 granting heads of agencies the "jurisdiction to investigate and decide matters involving disciplinary actions against officers and employees" in the PPA. 





On December 23, 1975, P.D. No. 505 was substituted by P.D. No. 857, See. 4(a) thereof created the Philippine Ports Authority which would be "attached" to the then Department of Public Works, Transportation and Communication. When Executive Order No. 125 dated January 30, 1987 reorganizing the Ministry of Transportation and Communications was issued, the PPA retained its "attached" status. Even Executive Order No. 292 or the Administrative Code of 1987 classified the PPA as an agency "attached" to the Department of Transportation and Communications (DOTC). Sec. 24 of Book IV, Title XV, Chapter 6 of the same Code provides that the agencies attached to the DOTC "shall continue to operate and function in accordance with the respective charters or laws creating them, except when they conflict with this Code."

Attachment of an agency to a Department is one of the three administrative relationships mentioned in Book IV, Chapter 7 of the Administrative Code of 1987, the other two being supervision and control and administrative supervision. 

Attachment. — (a) This refers to the lateral relationship between the Department or its equivalent and the attached agency or corporation for purposes of policy and program coordination. o

An attached agency has a larger measure of independence from the Department to which it is attached than one which is under departmental supervision and control or administrative supervision. This is borne out by the "lateral relationship" between the Department and the attached agency.

o

The attachment is merely for "policy and program coordination."

o

With respect to administrative matters, the independence of an attached agency from Departmental control and supervision is further reinforced by the fact that even an agency under a Department's administrative supervision is free from Departmental interference with respect to appointments and other personnel actions "in accordance with the decentralization of personnel functions" under the Administrative Code of 1987.

Application to the case: 

During such investigation, the PPA General Manager, as earlier stated, may subject the employee concerned to preventive suspension.



Only after gathering sufficient facts may the PPA General Manager impose the proper penalty in accordance with

law. It is the latter action which requires the approval of the PPA Board of Directors. 14 

From an adverse decision of the PPA General Manager and the Board of Directors, the employee concerned may elevate the matter to the Department Head or Secretary. Otherwise, he may appeal directly to the Civil Service Commission.

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It is, therefore, clear that the transmittal of the complaint by the PPA General Manager to the AAB was premature.

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The PPA General Manager should have first conducted an investigation, made the proper recommendation for the imposable penalty and sought its approval by the PPA Board of Directors.

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It was discretionary on the part of the herein petitioner to elevate the case to the then DOTC Secretary Reyes.

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Only then could the AAB take jurisdiction of the case.

WHEREFORE, the decision of the Court of Appeals is AFFIRMED insofar as it upholds the power of the PPA General Manager to subject petitioner to preventive suspension and REVERSED insofar as it validates the jurisdiction of the DOTC and/or the AAB to act on Administrative Case No. PPA-AAB-1-049-89 and rules that due process has been accorded the petitioner.

G.R. No. 118712 October 6, 1995 LAND BANK OF THE PHILIPPINES, petitioner, vs. COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F. SANTIAGO, AGRICULTURAL MANAGEMENT & DEVELOPMENT CORP., respondents. G.R. No. 118745 October 6, 1995

DEPARTMENT OF AGRARIAN REFORM, represented by the Secretary of Agrarian Reform, petitioner, vs. COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F. SANTIAGO, AGRICULTURAL MANAGEMENT & DEVELOPMENT CORP., ET AL., respondents. FACTS: 

Private respondents (Pedro L. Yap, Heirs of Emiliano Santiago and Agricultural Management and Development Corporation-AMADCOR) are landowners whose landholdings were acquired by the DAR and subjected to transfer schemes to qualified beneficiaries under the Comprehensive Agrarian Reform Law (CARL, Republic Act No. 6657).



Aggrieved by the alleged lapses of the DAR and the Landbank with respect to the valuation and payment of compensation for their land pursuant to the provisions of RA 6657, private respondents questioned the validity of DAR Administrative Order No. 6, Series of 1992 and DAR Administrative Order No. 9, Series of 1990, and sought to compel the DAR to expedite the pending summary administrative proceedings to finally determine the just compensation of their properties, and the Landbank to deposit in cash and bonds the amounts respectively "earmarked", "reserved" and "deposited in trust accounts" for private respondents, and to allow them to withdraw the same.



Private respondents argued that Administrative Order No. 9, Series of 1990 was issued without jurisdiction and with grave abuse of discretion because it permits the opening of trust accounts by the Landbank, in lieu of depositing in cash or bonds in an accessible bank designated by the DAR, the compensation for the land before it is taken and the titles are cancelled as provided under Section 16(e) of RA 6657.



Private respondents also assail the fact that the DAR and the Landbank merely "earmarked", "deposited in trust" or "reserved" the compensation in their names as landowners despite the clear mandate that before taking possession of the property, the compensation must be deposited in cash or in bonds.



Petitioner DAR, however, maintained that Administrative Order No. 9 is a valid exercise of its rule-making power pursuant to Section 49 of RA 6657.Moreover, the DAR maintained that the issuance of the "Certificate of Deposit" by the Landbank was a substantial compliance with Section 16(e) of RA 6657.



For its part, petitioner Landbank declared that the issuance of the Certificates of Deposits was in consonance with

Republic of the Philippines SUPREME COURT Manila SECOND DIVISION

Circular Nos. 29, 29-A and 54 of the Land Registration Authority where the words "reserved/deposited" were also used. Issue: 

Whether or not DAR Administrative Order No. 9, Series of 1990, insofar as it provides for the opening of trust accounts in lieu of deposit in cash or in bonds is null and void

o



In the present suit, the DAR clearly overstepped the limits of its power to enact rules and regulations when it issued Administrative Circular No. 9.



There is no basis in allowing the opening of a trust account in behalf of the landowner as compensation for his property because, as heretofore discussed, Section 16(e) of RA 6657 is very specific that the deposit must be made only in "cash" or in "LBP bonds".

Ruling of the Surpreme Court: 

Section 16 (e) of RA 6657; Law explicit that deposit in cash or in LBP bonds; Law clear to warrant an expanded construction of the term “deposit”. o

(e) Upon receipt by the landowner of the corresponding payment or, in case of rejection or no response from the landowner, upon the deposit with an accessible bank designated by the DAR of the compensation in cash or in LBP bonds in accordance with this Act, the DAR shall take immediate possession of the land and shall request the proper Register of Deeds to issue a Transfer Certificate of Title (TCT) in the name of the Republic of the Philippines. . . . (emphasis supplied) 





And in case there is a discrepancy between the basic law and an implementing rule or regulation, it is the former that prevails.

o

FIRST DIVISION

Nowhere does it appear nor can it be inferred that the deposit can be made in any other form. If it were the intention to include a "trust account" among the valid modes of deposit, that should have been made express, or at least, qualifying words ought to have appeared from which it can be fairly deduced that a "trust account" is allowed.

The conclusive effect of administrative construction is not absolute. o

Republic of the Philippines SUPREME COURT Manila

G.R. No. 103533 December 15, 1998 MANILA JOCKEY CLUB, INC. AND PHILIPPINE RACING CLUB, INC., petitioners, vs. THE COURT OF APPEALS AND PHILIPPINE RACING COMMISSION, respondents. FACTS: 

On June 18, 1948, Congress approved Republic Act No. 309, entitled "An Act to Regulate Horse-Racing in the Philippines."

Action of an administrative agency may be disturbed or set aside by the judicial department if there is an error of law, a grave abuse of power or lack of jurisdiction or grave abuse of discretion clearly conflicting with either the letter or the spirit of a legislative enactment.



In this regard, it must be stressed that the function of promulgating rules and regulations may be legitimately exercised only for the purpose of carrying the provisions of the law into effect.

On March 20, 1974, Presidential Decree No. 420 was issued creating the Philippine Racing Commission (PHILRACOM), giving it exclusive jurisdiction and control over every aspect of the conduct of horse racing, including the framing and scheduling of races.



In connection with the new schedule of races, petitioners made a joint query regarding the ownership of breakages accumulated during Wednesday races. In response to the query, PHILRACOM rendered its opinion in a letter dated September 20, 1978. It declared that the breakages belonged to the racing clubs concerned



On December 16, 1986 President Corazon Aquino amended certain provisions Sec. 4 of R.A. 8631 and Sec. 6 of R.A. 6632 through Executive Orders No. 88 and 89. Under these Executive Orders, breakages were allocated to beneficiaries, as follows:

o

The power of administrative agencies is thus confined to implementing the law or putting it into effect.

o

Corollary to this is that administrative regulations cannot extend the law and amend a legislative enactment,for settled is the rule that administrative regulations must be in harmony with the provisions of the law.

o

o

It provided for the distribution of gross receipts from the sale of betting tickets, but is silent on the allocation of so-called "breakages."

Provincial or city hospitals 25%

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o

Rehabilitation of drug addicts 25% 50%

o

For the benefit of Philippine

o

Racing Commission 50% 25%

o

Charitable institutions 25%

On April 23, 1987, PHILRACOM itself addressed a query to the Office of the President asking which agency is entitled to dispose of the proceeds of the "breakages" derived from the Tuesday and Wednesday races.

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As a rule, a franchise springs from contracts between the sovereign power and the private corporation for purposes of individual advantage as well as public benefit.

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Thus, a franchise partakes of a double nature and character.

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In so far as it affects or concerns the public, it is public juris and subject to governmental control.

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The legislature may prescribe the conditions and terms upon which it may be held, and the duty of grantee to the public exercising it.

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In a letter dated May 21, 1987, the Office of the President, through then Deputy Executive Secretary Catalino Macaraig, Jr., replied that "the disposition of the breakages rightfully belongs to PHILRACOM, not only those derived from the Saturday, Sunday and holiday races, but also from the Tuesday and Wednesday races in accordance with the distribution scheme prescribed in said Executive Orders".



As grantees of a franchise, petitioners derive their existence from the same. Petitioners' operations are governed by all existing rules relative to horse racing provided they are not inconsistent with each other and could be reasonably harmonized. Therefore, the applicable laws are R.A. 309, as amended, R.A. 6631 and 6632, as amended by E.O. 88 and 89, P.D. 420 and the orders issued PHILRACOM.



Controversy arose when herein respondent PHILRACOM, sent a series of demand letters to petitioners MJCI and PRCI, requesting its share in the "breakages" of mid-weekraces and proof of remittances to other legal beneficiaries as provided under the franchise laws. Petitioners ignored said demand.



A reasonable reading of the horse racing laws favors the determination that the entities enumerated in the distribution scheme provided under R.A. Nos. 6631 and 6632, as amended by Executive Orders 88 and 89, are the rightful beneficiaries of breakages from mid-week races. Petitioners should therefore remit the proceeds of breakages to those benefactors designated by the aforesaid laws.

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The holding of horse races on Wednesdays is in addition to the existing schedule of races authorized by law.

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Since this new schedule became part of R.A. 6631 and 6632 the set of procedures in the franchise laws applicable to the conduct of horse racing business must likewise be applicable to Wednesday or other mid-week races.

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Proceeding to the subsidiary issue, the period for the remittance of breakages to the beneficiaries should have commenced from the time PHILRACOM authorized the holding of mid-week races because R.A. Nos. 6631 and 6632 were ready in effect then.



The petitioners should have properly set aside amount for the defunct PAAF, until an alternative beneficiary was designated, which as subsequently provided for by Executive Order Nos. 88 and 89



While herein petitioners might have relied on a prior opinion issued by an administrative body, the wellentrenched principle is that the State could not be estopped by a mistake committed by its officials or agents. Well-settled also is the rule that the erroneous application of the law by public officers does not prevent a subsequent correct application of the law. Although there was an initial interpretation of the law by PHILRACOM, a court of law could not be precluded from setting that interpretation aside if later on it is shown to be inappropriate



WHEREFORE, there being no reversible error, the appealed decision and the resolution of the respondent Court of Appeals in CA-G.R. SP No. 25251, are hereby AFFIRMED, and the instant petition is hereby DENIED for lack of merit.

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Costs against petitioners.

Ruling of the RTC: In Favor of the Petitioners. Executive Orders Nos. 88 and 89 do not and cannot cover the disposition and allocation of mid-week races, particularly those authorized to be held during Tuesdays, Wednesdays and those which are not authorized under Republic Acts 6631 and 6632;

The ownership by the Manila Jockey Club, Inc. and the Philippine Racing Club, Inc. of the breakages they derive from mid-week races shall not be disturbed, with the reminder that the breakages should be strictly and wholly utilized for the purpose for which ownership thereof has been vested upon said racing entities. Ruling of the CA: Ruled in Favor of Philracom Issue: The main issue brought by the parties for the Court's resolution is: Who are the rightful beneficiaries of the breakages derived from midweek races? This issue also carries an ancillary question: assuming PHILRACOM is entitled to the mid-week breakages under the law, should the petitioners remit the money from the time the mid-week races started, or only upon the promulgation of E.O. Nos. 88 and 89? Ruling of the Supreme Court: 

Franchise laws are privileges conferred by the government on corporations to do that "which does not belong to the citizens of the country generally by common right".

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-46496

February 27, 1940

ANG TIBAY, represented by TORIBIO TEODORO, manager and propietor, and

NATIONAL WORKERS BROTHERHOOD, petitioners, vs. THE COURT OF INDUSTRIAL RELATIONS and NATIONAL LABOR UNION, INC., respondents. b.

Facts: 

Teodoro Toribio owns and operates Ang Tibay, a leather company which supplies the Philippine Army.



Due to alleged shortage of leather, Toribio caused the layoff of members of National Labor Union (NLU). NLU averred that Toribio’s act is not valid.

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

The decision must have something to support itself

d.

The evidence must be "substantial." o

The Court of Industrial Relations (CIR) is a special court whose functions are specifically stated in the law of its creation which is the Commonwealth Act No. 103).



It is more an administrative board than a part of the integrated judicial system of the nation.

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It is not intended to be a mere receptive organ of the government.

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Unlike a court of justice which is essentially passive, acting only when its jurisdiction is invoked and deciding only cases that are presented to it by the parties litigant, the function of the CIR, as will appear from perusal of its organic law is more active, affirmative and dynamic.



It not only exercises judicial or quasi-judicial functions in the determination of disputes between employers and employees but its functions are far more comprehensive and extensive.

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It has jurisdiction over the entire Philippines, to consider, investigate, decide, and settle any question, matter controversy or disputes arising between, and/ or affecting employers and employees or laborers, and landlords and tenants or farm-laborers, and regulates the relations between them, subject to, and in accordance with, the provisions of CA 103.



The CIR is free from rigidity of certain procedural requirements, but this not mean that it can in justiciable cases coming before it, entirely ignore or disregard the fundamental and essential requirements of due process in trials and investigations of an administrative character.

There are cardinal primary rights which must be respected even in proceedings of this character: a.

Right to a hearing

It means such relevant evidence as a reasonable mind accept as adequate to support a conclusion."

e.

The decision must be based on the evidence presented at the hearing; or at least contained in the record and disclosed to the parties affected;

f.

The tribunal or body or any of its judges must act on its own independent consideration of the law and facts of the controversy, and not simply accept the views of a subordinate

g.

The Board or body should, in all controversial questions, render its decision in such manner that the parties to the proceeding can know the various Issue involved, and the reason for the decision rendered.

Held: 

Such right is conspicuously futile if the person or persons to whom the evidence is presented can thrust it aside without notice or consideration

c.

But Ang Tibay filed a motion for opposing the said motion

Functions of the Court of Industrial Relations as a special court

Right of the party interested or affected to present his own case and submit evidence in support thereof

The tribunal must consider the evidence presented o

The CIR, decided the case and elevated it to the SC, but a motion for new trial was raised by the NLU.

Issue: 

o

Accordingly, the motion for a new trial should be and the same is hereby granted, and the entire record of this case shall be remanded to the Court of Industrial Relations, with instruction that it reopen the case, receive all such evidence as may be relevant and otherwise proceed in accordance with the requirements set forth hereinabove. So ordered.

prescription, despite petitioner's reliance on RMC No. 7-85, changing the prescriptive period of two years to ten years? Contention of the Petitioner:

Republic of the Philippines SUPREME COURT Manila



Petitioner argues that its claims for refund and tax credits are not yet barred by prescription relying on the applicability of Revenue Memorandum Circular No. 7-85 issued on April 1, 1985.



The circular states that overpaid income taxes are not covered by the two-year prescriptive period under the tax Code and that taxpayers may claim refund or tax credits for the excess quarterly income tax with the BIR within ten (10) years under Article 1144 of the Civil Code.

SECOND DIVISION Ruling of the Supreme Court: 

After a careful study of the records and applicable jurisprudence on the matter, we find that, contrary to the petitioner's contention, the relaxation of revenue regulations by RMC 7-85 is not warranted as it disregards the two-year prescriptive period set by law.



From the same perspective, claims for refund or tax credit should be exercised within the time fixed by law because the BIR being an administrative body enforced to collect taxes, its functions should not be unduly delayed or hampered by incidental matters.



Sec. 230 of the National Internal Revenue Code (NIRC) of 1977 (now Sec. 229, NIRC of 1997):

G.R. No. 112024 January 28, 1999 PHILIPPINE BANK OF COMMUNICATIONS, petitioner, vs. COMMISSIONER OF INTERNAL REVENUE, COURT OF TAX APPEALS and COURT OF APPEALS, respondent. Facts: 

Petitioner, Philippine Bank of Communications (PBCom), a commercial banking corporation duly organized under Philippine laws, filed its quarterly income tax returns for the first and second quarters of 1985, reported profits, and paid the total income tax of 5M



The taxes due were settled by applying PBCom's tax credit memos and accordingly, the Bureau of Internal Revenue (BIR) issued Tax Debit Memo



Subsequently, however, PBCom suffered losses so that when it filed its Annual Income Tax Returns for the yearended in 1986, the petitioner likewise reported a net loss of P14M, and thus declared no tax payable for the year.



But during these two years, PBCom earned rental income from leased properties.



On August 7, 1987, petitioner requested the Commissioner of Internal Revenue, among others, for a tax credit of P5M representing the overpayment of taxes in the first and second quarters of 1985. o



Petitioner also filed for refund of creditable taxes withheld by their lessees from property rentals.

Court of Tax Appeals (CTA) rendered a decision denying the request of petitioner for a tax refund or credit on the ground that it was filed beyond the two-year reglementary period provided for by law. The petitioner's claim for refund in 1986 for the taxes withheld by their lessees was likewise denied on the assumption that it was automatically credited by PBCom against its tax payment in the succeeding year.

Issue: 

Whether or not the Court of Appeals erred in denying the plea for tax refund or tax credits on the ground of

o

Sec. 230. Recovery of tax erroneously or illegally collected. x x x In any case, no such suit or proceedings shall begun after the expiration of two years from the date of payment of the tax or penalty regardless of any supervening cause that may arise after payment; Provided however, That the Commissioner may, even without a written claim therefor, refund or credit any tax, where on the face of the return upon which payment was made, such payment appears clearly to have been erroneously paid.



The rule states that the taxpayer may file a claim for refund or credit with the Commissioner of Internal Revenue, within two (2) years after payment of tax, before any suit in CTA is commenced. The two-year prescriptive period provided, should be computed from the time of filing the Adjustment Return and final payment of the tax for the year.



It bears repeating that Revenue memorandum-circulars are considered administrative rulings (in the sense of more specific and less general interpretations of tax laws) which are issued from time to time by the Commissioner of Internal Revenue.



It is widely accepted that the interpretation placed upon a statute by the executive officers, whose duty is to enforce it, is entitled to great respect by the courts.



Nevertheless, such interpretation is not conclusive and will be ignored if judicially found to be erroneous.



Thus, courts will not countenance administrative issuances that override, instead of remaining consistent and in harmony with the law they seek to apply and implement.

WHEREFORE, the, petition is hereby DENIED, The decision of the Court of Appeals (Court of Appeals affirmed in toto the CTA's resolution) appealed from is AFFIRMED, with COSTS against the petitioner.1âw

Republic of the Philippines SUPREME COURT Manila



However, the implementation of the BA/BE testing requirement was put on hold because there was no local facility capable of conducting the same.



The issuance of Circular No. 1, s. 1997 resumed the FDA’s implementation of the BA/BE testing requirement with the establishment of BA/BE testing facilities in the country.



Respondents manufacture and trade a "multisource pharmaceutical product" with the generic name of rifampicin for the treatment of adults and children suffering from pulmonary and extra-pulmonary tuberculosis.

March 5, 2014

REPUBLIC OF THE PHILIPPINES, represented by the BUREAU OF FOOD AND DRUGS (now FOOD AND DRUG ADMINISTRATION), Petitioner, vs. DRUGMAKER'S LABORATORIES, INC. and TERRAMEDIC, INC., Respondents.

In 1996, respondents applied for and were issued a CPR for such drug, valid for five (5) years, or until 2001.

o

At the time of the CPR’s issuance, Refam did not undergo BA/BE testing since there was still no facility capable of conducting BA/BE testing.

o

Sometime in 2001, respondents applied for and were granted numerous yearly renewals of their CPR for Refam, which lasted until November 15, 2006, albeit with the condition that they submit satisfactory BA/BE test results for said drug.



FDA sent a letter dated July 31, 2006 to respondents, stating that Refam is "not bioequivalent with the reference drug."



Thereafter, respondents filed a petition for prohibition and annulment of Circular Nos. 1 and 8, s. 1997 before the RTC, alleging that it is the DOH, and not the FDA, which was granted the authority to issue and implement rules concerning RA 3720.



During the pendency of the case, RA 9711, otherwise known as the "Food and Drug Administration [FDA] Act of 2009," was enacted into law.

SECOND DIVISION G.R. No. 190837

o

Issue: 

Whether or not the FDA may validly issue and implement Circular Nos. 1 and 8, s. 1997.

Facts: 



The FDA was created pursuant to Republic Act No. (RA) 3720, otherwise known as the "Food, Drug, and Cosmetic Act," primarily in order "to establish safety or efficacy standards and quality measures for foods, drugs and devices, and cosmetic product[s]." In 1989, the Department of Health (DOH), thru thenSecretary Alfredo R.A. Bengzon, issued Administrative Order No. (AO) 67, s. 1989, entitled "Revised Rules and Regulations on Registration of Pharmaceutical Products."

Contention of the FDA: 

The FDA contends that it has the authority to issue Circular Nos. 1 and 8, s. 1997 as it is the agency mandated by law to administer and enforce laws, including rules and regulations issued by the DOH, that pertain to the registration of pharmaceutical products.

Ruling of the Supreme Court:



Among others, it required drug manufacturers to register certain drug and medicine products with the FDA before they may release the same to the market for sale.



Administrative agencies may exercise quasi-legislative or rule-making powers only if there exists a law which delegates these powers to them.



In this relation, a satisfactory bioavailability/bioequivalence (BA/BE) test is needed for a manufacturer to secure a CPR for these products.



Accordingly, the rules so promulgated must be within the confines of the granting statute and must involve no discretion as to what the law shall be, but merely the authority to fix the details in the execution or enforcement of the policy set out in the law itself, so as to conform with

the doctrine of separation of powers and, as an adjunct, the doctrine of non-delegability of legislative power. 



o

a legislative rule,

o

an interpretative rule, or

o

a contingent rule.

Legislative rules are in the nature of subordinate legislation and designed to implement a primary legislation by providing the details thereof. They usually implement existing law, imposing general, extra-statutory obligations pursuant to authority properly delegated by Congress and effect a change in existing law or policy which affects individual rights and obligations.

Interpretative rules are intended to interpret, clarify or explain existing statutory regulations under which the administrative body operates. o

Their purpose or objective is merely to construe the statute being administered and purport to do no more than interpret the statute.

o

Simply, they try to say what the statute means and refer to no single person or party in particular but concern all those belonging to the same class which may be covered by the said rules.



Contingent rules are those issued by an administrative authority based on the existence of certain facts or things upon which the enforcement of the law depends.



In general, an administrative regulation needs to comply with the requirements laid down by Executive Order No. 292, s. 1987, otherwise known as the "Administrative Code of 1987," on prior notice, hearing, and publication in order to be valid and binding, except when the same is merely an interpretative rule.



In this regard, the FDA has been deputized by the same law to accept applications for registration of pharmaceuticals and, after due course, grant or reject such applications.



To this end, the said law expressly authorized the Secretary of Health, upon the recommendation of the FDA Director, to issue rules and regulations that pertain to the registration of pharmaceutical products.

An administrative regulation may be classified as:

o





o

This is because "[w]hen an administrative rule is merely interpretative in nature, its applicability needs nothing further than its bare issuance, for it gives no real consequence more than what the law itself has already prescribed.

o

When, on the other hand, the administrative rule goes beyond merely providing for the means that can facilitate or render least cumbersome the implementation of the law but substantially increases the burden of those governed, it behooves the agency to accord at least to those directly affected a chance to be heard, and thereafter to be duly informed, before that new issuance is given the force and effect of law."

In the case at bar, it is undisputed that RA 3720, as amended by Executive Order No. 175, s. 1987 prohibits, inter alia, the manufacture and sale of pharmaceutical products without obtaining the proper CPR from the FDA.