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#10 PAL V. CIR REYESTOPIC: WHO CAN CLAIM FOR RETURNS
FOREXEMPTIONS ON EXCISE TAX
DOCTRINE:The rule that the only the statutory taxpayer
should fle or claims or returns o excise tax should notapply
where the law clearly grants the party to which theeconomic burden
o the tax is shited, an exemption romboth direct and indirect
taxes.
FACTS:1. Caltex sold imported Jet A-1 uel to A! or its
domestic operations. Conse"uently, Caltex fledwith the #$% its
&xcise Tax %eturns or etroleumproducts.
a. '. ( ) excise tax due thereon.'. A! recei*ed rom Caltex an
A*iation #illing $n*oice
oe the purchased a*iation uel amounting to +1, (/(.0/, reecting
the amount o 0', 22( asthe related excise tax on the
transaction.
. A! sought a reund o the excise tax passed on toit by
Caltex.
a. $t hinged its reund claim on its operatingranchise 34 10(56
which conerred upon itcertain tax pri*ileges on its purchase
andimportation o a*iation gas, uel and oil,
including those which are passed to it by theseller and7or
importer thereo.b. Asserted it had legal personality to fle tax
reund./. CTA 4i*ision- denied A!8s petition
a. 9nly a statutory taxpayer 3Caltex6 may see:a reund o excise
taxes paid. &*en i burdenwas shited to A!, it cannot be deemed
astatutory taxpayer 3$!;A$% CA&6
b. A!8s claim or reund should be denied onaccount o !9$ no.
1/rmed CTA 4i*ision
ISSUE/S:1. ?9= A! has legal personality to claim or reund
o the passed on excise taxes. @&'. ?9= ale o imported
a*iation uel by Caltex to A!
is co*ered by !9$ 1/ciently pro*ed its entitlement to
reund
RATIO:FIRST ISSUE: PALS le!l "e$%&!l'() (% *le ! +l!',%-
e+'$e (!e$
1. A! argues that the doctrine in sil:air *. C$% isinapplicable
in its case because it has legalpersonality to fle the tax reund on
account o itstax exemption pri*ileges under its legislati*eranchise
which co*ers both direct and indirecttaxes.
'. $n cases in*ol*ing excise tax exemptions onpetroleum
products, the court has consistently held
that it is the statutory taxpayer who is entitled toclaim a tax
reund based thereon and not the partywho merely bears its economic
burden.
a. il:air case- the proper party to "uestion, orsee: a reund o
an indirect tax is thestatutory tax payer, the person on whom
thetax is imposed by law and who paid thesame e*en i he shits the
burden thereo toanother.
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. owe*er, the abo*e rule should not apply wherethe law clearly
grants the party to which theeconomic burden o the tax is shited,
an exemptionrom both direct and indirect taxes. As such, thelatter
must be allowed to claim a tax reund e*en i
he is not considered the statutory taxpayer.3)aceda *. )acaraig
*is-B-*is sil:air *. cir6
/. ropriety o a tax reund claim is hinged on the :indo exemption
which orms its basis. $ the lawconers an exemption on both direct
or indirecttaxes, claimant is entitled to a tax reund e*en i itonly
bears the economic burden o the applicabletax.
a. $n this case, A!8s ranchise grants it anexemption rom both
direct and indirecttaxes on its purchase o petroleum
products.3section 1, chec: ull text6
b. $n *iew o A!8s payment o either the basiccorporate income tax
or ranchise tax,whiche*er is lower, A! is exempt rompaying DaE
taxes directly due rom orimposable upon it as the purchaser o
thesubFect petroleum productsG and DbE the costo the taxes billed
or passed on to it by theseller, producer, manuacturer, or importer
othe said products either as part o the
purchase price or by mutual agreement orother arrangement.c.
Hi*en the oregoing direct and indirect tax
exemptions under its ranchise, A! isendowed with the legal
standing to fle thesubFect tax reund claim, notwithstanding theact
that it is not the statutory taxpayer ascontemplated by law.
SECOND ISSUE: C%e!e %- LOI 12
1. !9$ 1/
