PURISIMA v. PTI

Secretary of Finance Cesar V. Purisima and Commissioner of Internal Revenue Kim S. Jacinto-Henares Vs. Philippine Tobacco Institute, Inc.

G.R. No. 210251

April 17, 2017

FACTS:

On December 20, 2012. Pres. Benigno Aquino III signed RA 10351 also known as the Sin Tax Reform Law. The mentioned Law amended RA 8424.  On December 21, 2012, the Sec. of Finance, upon the CIR’s recommendation, imposed tax individually on cigarette pouches of 5’s and 10’s even if bundled in packaging combinations not exceeding 20 sticks.

As a result, the PTI filed a petition before the RTC for declaratory relief with an application for writ of preliminary injunction. The RTC favored the PTI and granted its petition. Hence, the Sec. of Finance and the CIR through the Office of the Solicitor General filed an instant petition. Meanwhile, the SC issued a TRO against the PTI and RTC.

ISSUE:

Whether or not the RTC erred in granting the petition to impose tax on combination pouches of 5’s and 10’s not exceeding 20 sticks rather than taxing individually pouches of 5’s and 10’s.

RULING:

No, the SC affirmed the decision of the RTC.  Basing from the intention and clear interpretation of RA 10351, combined with the deliberation made during the bicameral conference of Congress, tax should be imposed on cigarette pouched by machine as packaging combination of 20 cigarette sticks as a whole and not to individual packaging combinations on pouches of 5’s and 10’s.  The SC stated further that the BIR went beyond its jurisdiction by imposing additional burden to the Tobacco Sector through issuance of its revenue regulations.  In so doing, the BIR made an amendment which was not under its functions.  The amendments of laws, according to SC, were one of Congress’ primary concerns and functions.