365 Phil. 572
QUISUMBING, J.:
"WHEREFORE, the respondent, COMMISSIONER OF INTERNAL REVENUE is hereby ordered to REFUND in favor of petitioner, PHILEX MINING CORP., the sum of P16,747.36 without interest, equivalent to 25% partial refund of specific taxes paid on its purchases of gasoline, oils and lubricants, diesel and fuel oils pursuant to the provision of Section 5 of Republic Act No. 1435, in relation to Section 142 (b) and (c) of the National Internal Revenue Code and Section 145 as prescribed under Sections 1 and 2 of R.A. No. 1435.As set forth in the decision of the Court of Appeals, the following relevant incidents took place:
No pronouncement as to costs.
SO ORDERED."[2]
There are two clear-cut issues now raised before the Court:
"I. BASING THE REFUND ON THE AMOUNTS DEEMED PAID UNDER SECTIONS 1 AND 2 OF R.A. NO. 1435 IS CONTRARY TO THE SUPREME COURT'S EN BANC DECISION IN INSULAR LUMBER CO. V. COURT OF TAX APPEALS WHICH GRANTED THE CLAIM FOR PARTIAL REFUND ON THE BASIS OF SPECIFIC TAXES ACTUALLY PAID BY THE CLAIMANT WITHOUT QUALIFICATION OR LIMITATION."II. THE SAID RULING OF THE RESPONDENT COURT IGNORES THE INCREASE IN RATES IMPOSED BY SUCCEEDING AMENDATORY LAWS, UNDER WHICH THE PETITIONER PAID THE SPECIFIC TAXES ON MANUFACTURED AND DIESEL FUELS."III. IN MAKING THE RULING, THE RESPONDENT COURT WENT AGAINST THE ESTABLISHED RULES OF CONSTRUCTION IN THAT IT LENT ITSELF TO INTERPRETING SECTION 5 OF R.A. NO. 1435, WHEN THE CONSTRUCTION OF SAID LAW IS NOT NECESSARY."IV. SECTIONS 1 AND 2 OF R.A. NO. 1435 ARE NOT THE OPERATIVE PROVISIONS TO BE APPLIED BUT RATHER, SECTIONS 142 AND 145 (WHICH WOULD BECOME SECTIONS 153 AND 156) OF THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED."V. BASING THE COMPUTATION OF THE PARTIAL TAX REFUND ON SECTIONS 1 AND 2 OF R.A. NO. 1435, RATHER THAN ON SECTIONS 153 AND 156 OF THE NATIONAL INTERNAL REVENUE CODE, IS UNFAIR, ERRONEOUS, ARBITRARY, INEQUITABLE AND OPPRESSIVE."[3]
"Sec. 5 of R.A. 1435 -- The proceeds of the additional tax on manufactured oils shall accrue to the road and bridge funds of the political subdivision for whose benefit the tax is collected: Provided, however, That whenever any oils mentioned above are used by miners or forest concessionaires in their operations, twenty-five per centum of the specific tax paid thereon shall be refunded by the Collector of Internal Revenue upon submission of proof of actual use of oils and under similar conditions enumerated in sub-paragraphs one and two of section one hereof, amending section one hundred forty-two of the Internal Revenue Code: Provided, further, That no new road shall be constructed unless the routes or location thereof shall have been approved by the Commissioner of Public Highways after a determination that such road can be made part of an integral and articulated route in the Philippine Highway System, as required in section twenty-six of the Philippine Highway Act of 1953."In 1977, P.D. 1158 codified all existing laws. Sections 142 and 145 of the Tax Code, as amended by Sections 1 and 2 of R.A. 1435 were re-numbered to Sections 153 and 156.[6] Later, these sections were amended by P.D. No. 1672 and subsequently by E.O. 672 increasing the tax rates for certain oil and fuel products.[7] When the Highway Special Fund was abolished in 1985, the reason for the refund ceased to exist.
"x x x Since the partial refund authorized under Section 5, R.A. 1435, is in the nature of a tax exemption, it must be construed strictissimi juris against the grantee. Hence, petitioner's claim of refund on the basis of the specific taxes it actually paid must expressly be granted in a statute stated in a language too clear to be mistaken.In Davao Gulf, the Court also laid to rest the alleged conflict between the Insular Lumber and the Rio Tuba decisions, in this manner:
We have carefully scrutinized R.A. 1435 and the subsequent pertinent statutes and found no expression of a legislative will authorizing a refund based on the higher rates claimed by petitioner. x x x When the law itself does not explicitly provide that a refund under R.A. 1435 may be based on higher rates which were non-existent at the time of its enactment, this Court cannot presume otherwise. A legislative lacuna cannot be filled by judicial fiat." (citations omitted)[15]
"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 R.A. 1435.The subsequent codification of tax laws under the 1977 NIRC, Sections 153 and 156, mandated the increased rates of specific taxes levied on manufactured oils, other fuels and diesel fuel oils. Although Philex Mining Corporation paid the taxes on their oil and fuel purchases based on the increased rates, the latter law did not specifically provide for a refund based on the increased rates. Since the grant of refund privileges must be strictly construed against the taxpayer, the basis for the refund remains to be the amounts deemed paid under Sections 1 and 2 of R.A. 1435.[17] Furthermore, the claims for refund which were not filed with the CIR and those that prescribed must be deemed excluded, for being outside the ambit of the legislative enactment.x x x x x x x x x
Clearly it is impossible for these two decisions to clash with our pronouncements 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 R.A. 1435. In the light, we find no basis for petitioner's 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 division may be modified or reversed except by the Court sitting en banc.'
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 of equity.'" (citations omitted)[16]
"x x x [T]he rule is that no interest on refund of tax can be awarded unless authorized by law or the collection of the tax was attended by arbitrariness. An action is not arbitrary when exercised honestly and upon due consideration where there is room for two opinions, however much it may be believed that an erroneous conclusion was reached. Arbitrariness presupposes inexcusable or obstinate disregard of legal provisions. None of the exceptions are present in the case at bar. Respondent's decision denying petitioner's claim for refund was based on an honest interpretation of law. We, therefore see no reason why petitioner should be entitled to the payment of interest. (citations omitted)"[18]WHEREFORE, the instant petition is hereby DENIED, and the assailed decision of the Court of Appeals is hereby AFFIRMED.