FORT BONIFACIO DEVELOPMENT CORPORATION (Corp.) v. COMMISSIONER OF INTERNAL REVENUE (CIR), REGIONAL DIRECTOR, REVENUE REGION NO.

8, and CHIEF, ASSESSMENT DIVISION, REVENUE REGION NO. 8, BIR & FORT BONIFACIO DEVELOPMENT CORPORATION v. COMMISSIONER OF INTERNAL REVENUE, REVENUE DISTRICT OFFICER, REVENUE DISTRICT NO. 44, TAGUIG and PATEROS, BUREAU OF INTERNAL REVENUE. G.R. No. 1 888 ! G.R. No. 1"#$8#, 1#%&%&##', EN BANC, LEONARDO%DE CASTRO, J.: ONE LINE( Ad)*n*+,-a,*./ -01/ o- -/201a,*on 3anno, 3on,-a./n/ ,4/ 1a5 on 54*34 *, *+ 6a+/d. (Sec. 4.105-1 of RR 7-95 is an administrative r !e and re" !ation imp!ementin" an e#istin" !a$% & 'erm sed in 'anada v ' vera) NATURE( (otion for Reconsideration of SC)s *ecision dated +pri! ,, ,009 $-ic- "ranted t-e conso!idated petitions of petitioner .ort /onifacio *eve!opment Corporation (Corp.) $-ere t-e C C0R $as (1) restrained from co!!ectin" from t-e Corp. t-e amo nt of 1,2,413,723.00 representin" t-e transitiona! inp t ta# credit d e it for t-e fo rt- 4 arter of 19956 and (,) directed to ref nd to t-e Corp. t-e amo nt of 1347,741,595.74 paid as o tp t 7+' for t-e t-ird 4 arter of 1997 in !i"-t of t-e persistin" transitiona! inp t ta# credit avai!a8!e to t-e Corp. for t-e said 4 arter, or to iss e a ta# credit correspondin" to s c- amo nt. FACTS( 0n t-e +pri! ,, ,009 *ecision, $-ic- is $-at C0R $ants to 8e reconsidered in t-is case, t-e Co rt str c9 do$n Section 4.105-1 of RR 7-95 for 8ein" in conf!ict $it- t-e !a$. 0t -e!d t-at t-e C0R -ad no po$er to !imit t-e meanin" and covera"e of t-e term 72ood+7 in Section 105 of t-e :!d ;0RC sans stat tor< a t-orit< or 8asis and = stification to ma9e s c- !imitation. '-is it did $-en it restricted t-e app!ication of Section 105 in t-e case of rea! estate dea!ers on!< to improvements on t-e rea! propert< 8e!on"in" to t-eir 8e"innin" inventor<.
ISSUES: 1. WON CIR Revenue Regulations 7-95 validly repealed Section 105 as a ended !y "O #7$. #. WON CIR Revenue Regulations % &-97 repealed CIR Revenue Regulations % 7-95 HELD: 1. NO' ad in rule and reg less t(an statutes #. )"S' no repealing cause does not ean a lac* o+ intent to repeal.

1. > ?: ;o. ,73 @1927A & contains 8*-+, VAT 1a5. 0t amended severa! provisions of t-e 0nterna! Reven e Code of 1925 (:!d ;0RC). 0n anticipation of t-e pro8a8!e 8 rdens of t-e s-ift to t-e 7+' s<stem it a!!o$ed ne$!< 7+'-re"istered persons to avai! of a ,-an+*,*ona1 *n90, ,a: 3-/d*, as provided for in Section 105 of t-e :!d ;0RC. Section 105 as amended 8< ?: ,73.
Sec. 105. 'ransitiona! 0np t 'a# Credits. B + person $-o 8ecomes !ia8!e to va! e-added ta# or an< person $-o e!ects to 8e a 7+'-re"istered person s-a!!, s 8=ect to t-e fi!in" of an inventor< as prescri8ed 8< re" !ations, 8e a!!o$ed inp t ta# on -is 8e"innin" inventor< of "oods, materia!s and s pp!ies e4 iva!ent to 2C of t-e va! e of s c- inventor< or t-e act a! va! eadded ta# paid on s c- "oods, materia!s and s pp!ies, $-ic-ever is -i"-er, $-ic- s-a!! 8e credita8!e a"ainst t-e o tp t ta#.

> R+ 7715 @1995A - amended Sec. 100 of :!d ;0RC 8< imposin" for t-e first time .a10/%add/d%,a: on +a1/ o8 -/a1 9-o9/-,*/+. '-e amendment 8asica!!< states t-at a 10C 7+' s-a!! 8e imposed pon "oods or properties% amon" ot-ers. 0t c!arified t-at t-e term "oods and properties% s-a!! mean a!! tan"i8!e and intan"i8!e o8=ects $-ic- are capa8!e of pec niar< estimation and s-a!! inc! deD (+) Rea! properties -e!d primari!< for sa!e to c stomers or -e!d for !ease in t-e ordinar< co rse of trade or 8 siness6 ### Eo$ever, R+ 7715 did not amend t-e provisions of S?C 105 of t-e :!d ;0RC, re"ardin" ,-an+*,*ona1 *n90, ,a: 3-/d*,.

> R+ 24,4 (1997) - ;ationa! 0nterna! Reven e Code of 1997 (;e$ ;0RC) -o$ever amended Sec. 105 specifica!!< 8< Sec. 111(+) of t-e ;e$ ;0RC '-e provisions on t-e transitiona! inp t ta# credit are no$ em8odied in Section 111(+) of t-e ;e$ ;0RC, $-ic- readsD
Section 111. Transitional/Presumptive Input Tax Credits. & (+) Transitional Input Tax Credits. - + person $-o 8ecomes !ia8!e to va! e-added ta# or an< person $-o e!ects to 8e a 7+'-re"istered person s-a!!, s 8=ect to t-e fi!in" of an inventor< accordin" to r !es and re" !ations prescri8ed 8< t-e Secretar< of finance, pon recommendation of t-e Commissioner, 8e a!!o$ed inp t ta# on -is 8e"innin" inventor< of "oods, materia!s and s pp!ies e4 iva!ent for 2C of t-e va! e of s cinventor< or t-e act a! va! e-added ta# paid on s c- "oods, materia!s and s pp!ies, $-ic-ever is -i"-er, $-ic- s-a!! 8e credita8!e a"ainst t-e o tp t ta#. @?mp-asis SC)s.A%

Rule on statutory construction & sections of t-e !a$ cannot 8e interpreted apart from eac- ot-er. +!! of it m st 8e considered in fi#in" t-e meanin" of an< of its parts in order to prod ce a -armonio s $-o!e. Rule applied - stat tor< definition of t-e term F"oods or propertiesF !eaves no room for do 8t. Sec. 100. 7a! e-added ta# on sa!e of "oods or properties. & (a) Rate and 8ase of ta#. & ###. (1) '-e term G"oods or properties) s-a!! mean a!! tan"i8!e and intan"i8!e o8=ects $-ic- are capa8!e of pec niar< estimation and s-a!! inc! deD (+) Rea! properties -e!d primari!< for sa!e to c stomers or -e!d for !ease in t-e ordinar< co rse of trade or 8 siness6 ###. Sec 100 of t-e :!d ;0RC defined t4/ ,/-) 72ood+ o- 9-o9/-,*/+7 6; ,4/ 0na)6*20o0+ ,/-)+ 7-/a1 9-o9/-,*/+ 4/1d 9-*)a-*1; 8o- +a1/ ,o 3o+,0)/-+ o- 4/1d 8o- 1/a+/ *n ,4/ o-d*na-; 3o0-+/ o8 60+*n/++.7 '-e term F"oodsF as sed in Section 105 of t-e same code co !d not -ave a different meanin". '-is -as 8een e#p!ained in t-e prior *ecision. ADMINISTRATIVE RULE IN ISSUE( RR ;o. 7-95 is an +dministrative R !e and Re" !ation 8ased pon t-e e#istin" stat tes :!d and ;e$ ;0RC. Section 4.100-1 of $-ic- made 8< t-e /0R $-ic- inc! des in its en meration of F"oods or propertiesF s c- Frea! properties -e!d primari!< for sa!e to c stomers or -e!d for !ease in t-e ordinar< co rse of trade or 8 siness.F Said definition $as ta9en from t-e ver< stat tor< !an" a"e of Section 100 of t-e :!d ;0RC. S/3,*on 4.1# %1 o8 RR no. "%' 4o5/./- 1*)*,/d ,4*+ d/8*n*,*on ,o 7*)9-o./)/n,+7 % BIR ,40+ no, on1; 3on,-a./n/d ,4/ d/8*n*,*on o8 72ood+7 a+ 9-o.*d/d *n ,4/ O1d NIRC, 60, a1+o ,4/ d/8*n*,*on 54*34 ,4/ +a)/ -/./n0/ -/201a,*on *,+/18 4a+ 9-o.*d/d. Section 4.105-1 of RR 7-95 restricted t-e definition of F"oodsF, viHD
Eo$ever, in t-e case of rea! estate dea!ers, t-e 8asis of t-e pres mptive inp t ta# s-a!! 8e t-e improvements, s c- as 8 i!din"s, roads, draina"e s<stems, and ot-er simi!ar str ct res, constr cted on or after t-e effectivit< of ?: ,73 (Ian ar< 1, 1922).

Pa- <, A-,. " o8 NCC, +,a,/+ ,4a, an ad)*n*+,-a,*./ -01/ o- -/201a,*on 3anno, 3on,-a./n/ ,4/ 1a5 on 54*34 *, *+ 6a+/d. RR "%' *+ *n3on+*+,/n, 5*,4 S/3,*on 1# *n+o8a- a+ ,4/ d/8*n*,*on o8 ,4/ ,/-) 72ood+7 *+ 3on3/-n/d. '-is is a!read< a !e"is!ative act t-at is 8e<ond t-e a t-orit< of t-e C0R and t-e Secretar< of .inance more so $-en t-e !a$ $-ic- t-e administrative r !e is contravenin" is a!so t-e !a$ $-ic- it is 8ased pon. +dmin r !es s-o !d not 8e in contradiction to, 8 t in conformit< $it-, t-e standards prescri8ed 8< !a$. RULE( 0n order to 8e va!id, an administrative r !e or re" !ation m st conform, not contradict, t-e provisions of t-e ena8!in" !a$. +n imp!ementin" r !e or re" !ation cannot modif<, e#pand, or s 8tract from t-e !a$ it is intended to imp!ement. +n< r !e t-at is not consistent $it- t-e stat te itse!f is n !! and void.

'- s, RR 7-95, insofar as it restricts t-e definition of F"oodsF as 8asis of transitiona! inp t ta# credit nder Section 105 is a n !!it<. ,. :n Ian ar< 1, 1997, RR 5-97 $as iss ed 8< t-e Commissioner of 0nterna! Reven e. RR 5-97 $as 8asica!!< a reiteration of t-e same Section 4.105-1 of RR 7-95, e#cept t-at t-e RR 5-97 de!eted t-e fo!!o$in" para"rap-.
Eo$ever, in t-e case of rea! estate dea!ers, t-e 8asis of t-e pres mptive inp t ta# s-a!! 8e t-e improvements, s c- as 8 i!din"s, roads, draina"e s<stems, and ot-er simi!ar str ct res, constr cted on or after t-e effectivit< of ?.:. ,73 (Ian ar< 1, 1922).

0t is c!ear, t-erefore, t-at nder RR 5-97, t-e a!!o$a8!e transitiona! inp t ta# credit is not !imited to improvements on rea! properties. '-e partic !ar provision of RR 7-95 -as effective!< 8een repea!ed 8< RR 5-97 $-ic- is no$ in consonance $it- Section 100 of t-e ;0RC, insofar as the definition of real properties as goods is concerned. T4/ 8a*10-/ ,o add a +9/3*8*3 -/9/a1*n2 31a0+/ 5o01d no, n/3/++a-*1; *nd*3a,/ ,4a, ,4/-/ 5a+ no *n,/n, ,o -/9/a1 RR "%' . T4/ 8a3, ,4a, ,4/ a8o-/=0o,/d 9a-a2-a94 5a+ d/1/,/d 3-/a,/d an *--/3on3*1a61/ *n3on+*+,/n3; and -/902nan3; 6/,5//n ,4/ 9-o.*+*on+ o8 RR $%'" and RR "%' .