522 Phil. 497
WHEREFORE, in view of all the foregoing, the instant petition for review is hereby GRANTED. Revenue Memorandum Order No. 15-91 and Revenue Memorandum Circular No. 43-91, insofar as they classify pawnshops as lending investors subject to 5% lending investor's tax, are hereby declared NULL and VOID for being contrary to law and the Constitution. Accordingly, Assessment Notice No. 81-PT-13-94-97-6-73, dated June 13, 1997, is likewise CANCELLED and SET ASIDE.The CTA ruled, among others, that for taxation purposes, a pawnshop business cannot be classified as a lending investor as both are subject to different tax treatments. Thus, they may not be treated alike for the purpose of imposing the 5% lending investor's tax.
First. Under Section 192, paragraph 3, sub-paragraphs (dd) and (ff) of the NIRC of 1997, prior to its amendment by E.O. No. 273, as well as Section 161, paragraph 2, sub-paragraphs (dd) and (ff) of the NIRC of 1986, pawnshops and lending investors were subjected to different tax treatments, thus:(3) Other Fixed Taxes. - The following fixed taxes shall be collected as follows, the amount stated being for the whole year, when not otherwise specified:
Under the principle of stare decisis et non quieta movere (follow past precedents and do not disturb what has been settled), it is our duty to apply our previous ruling in Commissioner of Internal Revenue v. Michael J. Lhuillier Pawnshop to the instant case. Once a case has been decided one way, any other case involving exactly the same point at issue, as in the case at bar, should be decided in the same manner.(dd) Lending Investors -
- In chartered cities and first class municipalities, one thousand pesos;
- In second and third class municipalities, five hundred pesos;
- In fourth and fifth class municipalities and municipal districts, two hundred fifty pesos: Provided, That lending investors who do business as such in more than one province shall pay a tax of one thousand pesos.x x x(ff) Pawnshops, one thousand pesos.
Second. Congress never intended pawnshops to be treated in the same way as lending investors. Section 116 of the NIRC of 1977, as renumbered and rearranged by E.O. No. 273, was basically lifted from Section 175 (formerly Sec. 209, NIRC of 1977, as amended by P.D. 1739, Sept. 17, 1980) of the NIRC of 1986, which treated both tax subjects differently. Section 175 of the latter Code reads as follows:Sec. 175. Percentage tax on dealers in securities, lending investors. - Dealers in securities shall pay a tax equivalent to six percent (6%) of their gross income. Lending investors shall pay a tax equivalent to five percent (5%) of their gross income. (As amended by P.D. No. 1739, P.D. No. 1959, and P.D. No. 1994).
We note that the definition of lending investors found in Section 157 (u) of the NIRC of 1986 is not found in the NIRC of 1977, as amended by E.O. No. 273, where Section 116 invoked by the CIR is found. However, as emphasized earlier, both the NIRC of 1986 and NIRC of 1977 dealt with pawnshops and lending investors differently. Verily then, it was the intent of Congress to deal with both subjects differently. Hence, we must likewise interpret the statute to conform to such legislative intent.
Third. Section 116 of the NIRC of 1977, as amended by E.O. No. 273, subjects to percentage tax dealers in securities and lending investors only. There is no mention of pawnshops. Under the maxim expressio unius est exclusio alterius, the mention of one thing implies the exclusion of another thing not mentioned. Thus, if a statute enumerates the things upon which it is to operate, everything else must necessarily and by implication be excluded from its operation and effect (Vera v. Fernandez, L-31364, March 30, 1979, 89 SCRA 199, 203). This rule, as a guide to probable legislative intent, is based upon the rules of logic and natural workings of the human mind (Republic v. Estenzo, L-35376, September 11, 1980, 99 SCRA 651, 656).
Fourth. The BIR had ruled several times prior to the issuance of RMO No. 15-91 and RMC No. 43-91 that pawnshops were not subject to the 5% percentage tax imposed by Section 116 of the NIRC of 1977, as amended by E.O. No. 273. This was even admitted by the CIR in RMO No. 15-91 itself. Considering that Section 116 of the NIRC of 1977, as amended, was practically lifted from Section 175 of the NIRC of 1986, as amended, and there being no change in the law, the interpretation thereof should not have been altered.
x x x
x x x R.A. No. 7716 (An Act Restructuring the Value-added Tax (VAT) System, Widening Its Tax Base and Enhancing Its Administrative, and for These Purposes Amending and Repealing the Relevant Provisions of the National Internal Revenue Code, as amended, and for Other Purposes.) repealed Section 116 of NIRC of 1977, as amended, which was the basis of RMO No. 15-91 and RMC No. 43-91, thus:
x x x
Since Section 116 of the NIRC of 1977, which breathed life on the questioned administrative issuances, had already been repealed, RMO 15-91 and RMC 43-91, which depended upon it, are deemed automatically repealed. Hence, even granting that pawnshops are included within the term lending investors, the assessment from May 27, 1994 onward would have no leg to stand on.
Adding to the invalidity of RMC No. 43-91 and RMO No. 15-91 is the absence of publication. While the rule-making authority of the CIR is not doubted, like any other government agency, the CIR may not disregard legal requirements or applicable principles in the exercise of quasi-legislative powers.
x x x
RMO No. 15-91 and RMC No. 43-91 cannot be viewed simply as implementing rules or corrective measures revoking in the process the previous rulings of past Commissioners. Specifically, they would have been amendatory provisions applicable to pawnshops. x x x. The due observance of the requirements of notice, hearing, and publication should not have been ignored.
x x x
In view of the foregoing, RMO No. 15-91 and RMC No. 4391 are hereby declared null and void. Consequently, Lhuillier is not liable to pay the 5% lending investor's tax. (Underscoring supplied)