MANILA - The Court of Appeals (CA) has upheld an earlier resolution by the Department of Justice (DOJ) that the Government Service Insurance System (GSIS) did not miss tax payments amounting to P2.60 billion from 2001 to 2003.

In an 11-page decision penned by Arcangelita Romilla-Lontok, the CA's sixth division dismissed the Bureau of Internal Revenue's (BIR) claim that the DOJ had no jurisdiction to rule on the validity of the tax assessment issued against GSIS on the non-payment of documentary stamp tax. The DOJ declared the said assessment as null and void.

Citing Sec. 7 of Republic Act 1125, the BIR said the Court of Tax Appeals (CTA) is the one that has jurisdiction to hear cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, and penalties imposed under the National Internal Revenue Code (NIRC).

But the CA argued that Presidential Decree No. 242 should prevail over RA 1125 since it was implemented on July 9, 1973 while the latter was implemented as early as June 16, 1954.

The Supreme Court, according to the CA, had earlier affirmed its ruling in a previous case that there is an irreconcilable "repugnance" between RA 1125 and PD 242.

Being so, the CA held that "the latest expression of the legislative will, should prevail" over the one which took effect earlier.

PD 242 is an act prescribing the procedure for administrative settlement of disputes between government instrumentalities.

In maintaining that the DOJ has jurisdiction over the case, the GSIS and OSG used as its basis Sections 1 and 3 of PD 242 which provide that all disputes, claims and controversies involving government offices, including government-owned or controlled corporations shall be administratively settled except cases already pending in court at the effectivity of the law.

It further states that cases involving questions of law shall be settled by the Solicitor General when it comes to disputes of claims or controversies between or among government agencies; the Government Corporate Counsel with respect to disputes among government-woned or controlled corporations being served by the OGCC; and the Secretary of Justice with respect to all other disputes not within the jurisdiction of the Solgen and the OGCC.

Aside from declaring as null and void the tax assessment issued by the BIR against GSIS, the DOJ also ordered the case to be remanded to the BIR and directed it to conduct a new assessment on the withholding tax liabilities of the GSIS.