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  • Cir Vs Cenvoco GR No. 107135 Facts

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    Hariette Kim Tiongson
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    This case involves a dispute between the Central Vegetable Oil Manufacturing Co. (CENVOCO) and the Commissioner of Internal Revenue (CIR) regarding whether CENVOCO could credit sales tax paid on containers and packaging materials against its miller's tax. The Court of Tax Appeals and the Court of Appeals both held that CENVOCO was not liable for deficiency miller's tax because containers and packaging materials are not considered "raw materials" used in the milling process under Section 168 of the Tax Code. The Supreme Court affirmed, finding that the restriction in Section 168 on crediting sales tax against miller's tax is limited to raw materials used in milling, so sales tax paid on other materials like containers can

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    CIR vs Cenvoco CAse digests

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    Cir vs Cenvoco

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    This case involves a dispute between the Central Vegetable Oil Manufacturing Co. (CENVOCO) and the Commissioner of Internal Revenue (CIR) regarding whether CENVOCO could credit sales tax paid on containers and packaging materials against its miller's tax. The Court of Tax Appeals and the Court of Appeals both held that CENVOCO was not liable for deficiency miller's tax because containers and packaging materials are not considered "raw materials" used in the milling process under Section 168 of the Tax Code. The Supreme Court affirmed, finding that the restriction in Section 168 on crediting sales tax against miller's tax is limited to raw materials used in milling, so sales tax paid on other materials like containers can

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    © All Rights Reserved
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    Download as docx, pdf, or txt
    503 views2 pages

    Cir Vs Cenvoco GR No. 107135 Facts

    Uploaded by

    Hariette Kim Tiongson
    This case involves a dispute between the Central Vegetable Oil Manufacturing Co. (CENVOCO) and the Commissioner of Internal Revenue (CIR) regarding whether CENVOCO could credit sales tax paid on containers and packaging materials against its miller's tax. The Court of Tax Appeals and the Court of Appeals both held that CENVOCO was not liable for deficiency miller's tax because containers and packaging materials are not considered "raw materials" used in the milling process under Section 168 of the Tax Code. The Supreme Court affirmed, finding that the restriction in Section 168 on crediting sales tax against miller's tax is limited to raw materials used in milling, so sales tax paid on other materials like containers can

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    Download as docx, pdf, or txt
    of 2

    CIR VS CENVOCO

    GR No. 107135

    FACTS:

     Petitioner Central Vegetable Oil Manufacturing Co. (CENVOCO) is a


    manufacturer of coconut oil, subject to the miller’s tax of 3%
     Petitioner purchased containers and packaging materials for its edible oil and
    paid the sales tax due thereon.
     An Assessment notice was issued against petitioner for miller’s tax deficiency.
     Petitioner filed a letter requesting for reconsideration of the deficiency,
    contending that Section 168 of the Tax Code does not apply to sales tax paid
    on containers and packaging materials, hence, the amount paid therefor
    should have been credited against the miller’s tax assessed against it.
     Respondent CIR wrote to CENVOCO that under Section 168 of the Tax Code
    provides that sales, miller’s, or excise taxes paid on raw materials or supplies
    used in the milling process shall not be allowed against the miller’s tax due.
    o That since the law specifically does not allow taxes paid on the raw
    materials or supplies used in the milling process as a credit against the
    miller’s tax due, with more reasons should the sales taxes paid on
    materials not used in the milling process be allowed as a credit against
    the miller’s tax due. There is no provision of law which allows such a
    credit-to-be made.
     Petitioner filed a petition for review with the Court of Tax Appeals, which held
    that petitioner CENVOCO is not liable for deficiency miller’s tax.
    o It held that containers and packages cannot be considered “raw
    materials” utilized in the milling process.
     Appealed to the CA, the decision of the CTA was affirmed.

    ISSUE:

    Whether or not the sales tax paid by CENVOCO when it purchased containers and
    packaging materials for its milled products can be credited against the deficiency
    miller’s tax due thereon.

    HELD:

    YES.

    Under Section 168 of the Old Tax Code, the restriction in the said provision, however
    is limited only to sales, miller’s, or excise taxes paid “on raw materials used in the
    milling process”.

    Under the rules of statutory construction, exceptions, as a general rule, should be


    strictly but reasonably construed. That all doubts should be resolved in favor of the
    general provisions rather than the exception. Where a general rule is established by
    statute with exceptions, the court will not curtail the former nor add to the latter by
    implication.
    The exception provided for in Section 168 of the old Tax Code should thus be strictly
    construed. Conformably, the sales, miller’s and excise taxes paid on all other
    materials, such as the sales taxes paid on containers and packaging materials of the
    milled products under consideration, may be credited against the millers’s tax due
    therefor.

    The basic rule of interpretation that words and phrases used in the statute, in the
    absence of clear legislative intent to the contrary, should be given their plain,
    ordinary, and common usage or meaning.

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