CIR V PAL
CIR V PAL
180066
INTERNAL REVENUE,
Petitioner, Present:
YNARES-SANTIAGO, J.,
Chairperson,
CHICO-NAZARIO,
VELASCO, JR.,
- versus - NACHURA, and
PERALTA, JJ.
Promulgated:
DECISION
CHICO-NAZARIO, J.:
Before this Court is a Petition for Review on Certiorari, under Rule 45 of the
Revised Rules of Court, seeking the reversal and setting aside of the
Decision[1] dated 9 August 2007 and Resolution[2]dated 11 October 2007 of the
Court of Tax Appeals (CTA) en banc in CTA E.B. No. 246. The CTA en
banc affirmed the Decision[3] dated 31 July 2006 of the CTA Second Division in
C.T.A. Case No. 7010, ordering the cancellation and withdrawal of Preliminary
Assessment Notice (PAN) No. INC FY-3-31-01-000094 dated 3 September
2003 and Formal Letter of Demand dated 12 January 2004, issued by the Bureau of
Internal Revenue (BIR) against respondent Philippine Airlines, Inc. (PAL), for the
payment of Minimum Corporate Income Tax (MCIT) in the amount
of P272,421,886.58.
For its fiscal year ending 31 March 2001 (FY 2000-2001), PAL allegedly incurred
zero taxable income,[6] which left it with unapplied creditable withholding tax[7] in
the amount of P2,334,377.95.PAL did not pay any MCIT for the period.
Acting on the aforementioned letter of PAL, the Large Taxpayers Audit and
Investigation Division 1 (LTAID 1) of the BIR Large Taxpayers Service (LTS),
issued on 16 August 2002, Tax Verification Notice No. 00201448, authorizing
Revenue Officer Jacinto Cueto, Jr. (Cueto) to verify the supporting documents and
pertinent records relative to the claim of PAL for refund of its unapplied creditable
withholding tax for FY 2000-20001. In a letter dated 19 August 2003, LTAID 1
Chief Armit S. Linsangan invited PAL to an informal conference at the BIR National
Office in Diliman, Quezon City, on 27 August 2003, at 10:00 a.m., to discuss the
results of the investigation conducted by Revenue Officer Cueto, supervised by
Revenue Officer Madelyn T. Sacluti.
On 12 January 2004, the LTAID 1 sent PAL a Formal Letter of Demand for
deficiency MCIT for FY 2000-2001 in the amount of P271,421,88658, based on the
following calculation:
PAL filed a Petition for Review with the CTA, which was docketed as C.T.A. Case
No. 7010 and raffled to the CTA Second Division. The CTA Second Division
promulgated its Decision on 31 July 2006, ruling in favor of PAL. The dispositive
portion of the judgment of the CTA Second Division reads:
In a Resolution dated 2 January 2007, the CTA Second Division denied the
Motion for Reconsideration of the CIR.
It was then the turn of the CIR to file a Petition for Review with the CTA en banc,
docketed as C.T.A. E.B. No. 246. The CTA en banc found that the cited legal
provisions and jurisprudence are teeming with life with respect to the grant of tax
exemption too vivid to pass unnoticed, and that the Court in Division correctly ruled
in favor of the respondent [PAL] granting its petition for the cancellation of
Assessment Notice No. INC FY-3-31-01-000094 and Formal Letter of Demand for
the deficiency MCIT in the amount of P272,421,886.58.[12] Consequently, the
CTA en bancdenied the Petition of the CIR for lack of merit. The CTA en
banc likewise denied the Motion for Reconsideration of the CIR in a Resolution
dated 11 October 2007.
Hence, the CIR comes before this Court via the instant Petition for Review
on Certiorari, based on the grounds stated hereunder:
There is only one vital issue that the Court must resolve in the Petition at bar, i.e.,
whether PAL is liable for deficiency MCIT for FY 2000-2001.
Presidential Decree No. 1590, the franchise of PAL, contains provisions specifically
governing the taxation of said corporation, to wit:
(a) To depreciate its assets to the extent of not more than twice as
fast the normal rate of depreciation; and
Section 14. The grantee shall pay either the franchise tax or the
basic corporate income tax on quarterly basis to the Commissioner of
Internal Revenue. Within sixty (60) days after the end of each of the first
three quarters of the taxable calendar or fiscal year, the quarterly franchise
or income-tax return shall be filed and payment of either the franchise or
income tax shall be made by the grantee.
According to the afore-quoted provisions, the taxation of PAL, during the lifetime
of its franchise, shall be governed by two fundamental rules, particularly: (1) PAL
shall pay the Government either basic corporate income tax or franchise tax,
whichever is lower; and (2) the tax paid by PAL, under either of these alternatives,
shall be in lieu of all other taxes, duties, royalties, registration, license, and other fees
and charges, except only real property tax.
The basic corporate income tax of PAL shall be based on its annual net taxable
income, computed in accordance with the National Internal Revenue Code
(NIRC). Presidential Decree No. 1590 also explicitly authorizes PAL, in the
computation of its basic corporate income tax, to (1) depreciate its assets twice as
fast the normal rate of depreciation;[14] and (2) carry over as a deduction from taxable
income any net loss incurred in any year up to five years following the year of such
loss.[15]
Franchise tax, on the other hand, shall be two per cent (2%) of the gross revenues
derived by PAL from all sources, whether transport or nontransport
operations. However, with respect to international air-transport service, the
franchise tax shall only be imposed on the gross passenger, mail, and freight
revenues of PAL from its outgoing flights.
In its income tax return for FY 2000-2001, filed with the BIR, PAL reported no net
taxable income for the period, resulting in zero basic corporate income tax, which
would necessarily be lower than any franchise tax due from PAL for the same period.
The CIR, though, assessed PAL for MCIT for FY 2000-2001. It is the position of
the CIR that the MCIT is income tax for which PAL is liable. The CIR reasons that
Section 13(a) of Presidential Decree No. 1590 provides that the corporate income
tax of PAL shall be computed in accordance with the NIRC. And, since the NIRC
of 1997 imposes MCIT, and PAL has not applied for relief from the said tax, then
PAL is subject to the same.
The Court is not persuaded. The arguments of the CIR are contrary to the plain
meaning and obvious intent of Presidential Decree No. 1590, the franchise of PAL.
Income tax on domestic corporations is covered by Section 27 of the NIRC of
1997,[16] pertinent provisions of which are reproduced below for easy reference:
xxxx
Hence, a domestic corporation must pay whichever is higher of: (1) the income tax
under Section 27(A) of the NIRC of 1997, computed by applying the tax rate therein
to the taxable income of the corporation; or (2) the MCIT under Section 27(E), also
of the NIRC of 1997, equivalent to 2% of the gross income of the
corporation. Although this may be the general rule in determining the income tax
due from a domestic corporation under the NIRC of 1997, it can only be applied to
PAL to the extent allowed by the provisions in the franchise of PAL specifically
governing its taxation.
Section 13(a) of Presidential Decree No. 1590 requires that the basic corporate
income tax be computed in accordance with the NIRC. This means that PAL shall
compute its basic corporate income tax using the rate and basis prescribed by the
NIRC of 1997 for the said tax. There is nothing in Section 13(a) of Presidential
Decree No. 1590 to support the contention of the CIR that PAL is subject to the
entire Title II of the NIRC of 1997, entitled Tax on Income.
Second, Section 13(a) of Presidential Decree No. 1590 further provides that the basic
corporate income tax of PAL shall be based on its annual net taxable income. This
is consistent with Section 27(A) of the NIRC of 1997, which provides that the rate
of basic corporate income tax, which is 32% beginning 1 January 2000, shall be
imposed on the taxable income of the domestic corporation.
Taxable income is defined under Section 31 of the NIRC of 1997 as the pertinent
items of gross income specified in the said Code, less the deductions and/or
personal and additional exemptions, if any, authorized for such types of income
by the same Code or other special laws. The gross income, referred to in Section
31, is described in Section 32 of the NIRC of 1997 as income from whatever source,
including compensation for services; the conduct of trade or business or the exercise
of profession; dealings in property; interests; rents; royalties; dividends; annuities;
prizes and winnings; pensions; and a partners distributive share in the net income of
a general professional partnership.
Pursuant to the NIRC of 1997, the taxable income of a domestic corporation may be
arrived at by subtracting from gross income deductions authorized, not just by the
NIRC of 1997,[18] but also by special laws. Presidential Decree No. 1590 may be
considered as one of such special laws authorizing PAL, in computing its annual net
taxable income, on which its basic corporate income tax shall be based, to deduct
from its gross income the following: (1) depreciation of assets at twice the normal
rate; and (2) net loss carry-over up to five years following the year of such loss.
In comparison, the 2% MCIT under Section 27(E) of the NIRC of 1997 shall be
based on the gross income of the domestic corporation. The Court notes that gross
income, as the basis for MCIT, is given a special definition under Section 27(E)(4)
of the NIRC of 1997, different from the general one under Section 34 of the same
Code.
According to the last paragraph of Section 27(E)(4) of the NIRC of 1997, gross
income of a domestic corporation engaged in the sale of service means gross
receipts, less sales returns, allowances, discounts and cost of services. Cost of
services refers to all direct costs and expenses necessarily incurred to provide the
services required by the customers and clients including (a) salaries and employee
benefits of personnel, consultants, and specialists directly rendering the service; and
(b) cost of facilities directly utilized in providing the service, such as depreciation or
rental of equipment used and cost of supplies.[19] Noticeably, inclusions in and
exclusions/deductions from gross income for MCIT purposes are limited to those
directly arising from the conduct of the taxpayers business. It is, thus, more limited
than the gross income used in the computation of basic corporate income tax.
In light of the foregoing, there is an apparent distinction under the NIRC of 1997
between taxable income, which is the basis for basic corporate income tax under
Section 27(A); and gross income, which is the basis for the MCIT under Section
27(E). The two terms have their respective technical meanings, and cannot be used
interchangeably. The same reasons prevent this Court from declaring that the basic
corporate income tax, for which PAL is liable under Section 13(a) of Presidential
Decree No. 1590, also covers MCIT under Section 27(E) of the NIRC of 1997, since
the basis for the first is the annual net taxable income, while the basis for the second
is gross income.
Third, even if the basic corporate income tax and the MCIT are both income taxes
under Section 27 of the NIRC of 1997, and one is paid in place of the other, the two
are distinct and separate taxes.
The Court again cites Commissioner of Internal Revenue v. Philippine Airlines,
Inc.,[20] wherein it held that income tax on the passive income [21] of a domestic
corporation, under Section 27(D) of the NIRC of 1997, is different from the basic
corporate income tax on the taxable income of a domestic corporation, imposed by
Section 27(A), also of the NIRC of 1997. Section 13 of Presidential Decree No. 1590
gives PAL the option to pay basic corporate income tax or franchise tax, whichever
is lower; and the tax so paid shall be in lieu of all other taxes, except real property
tax. The income tax on the passive income of PAL falls within the category of all
other taxes from which PAL is exempted, and which, if already collected, should be
refunded to PAL.
The Court herein treats MCIT in much the same way. Although both are income
taxes, the MCIT is different from the basic corporate income tax, not just in the rates,
but also in the bases for their computation. Not being covered by Section 13(a) of
Presidential Decree No. 1590, which makes PAL liable only for basic corporate
income tax, then MCIT is included in all other taxes from which PAL is exempted.
That, under general circumstances, the MCIT is paid in place of the basic corporate
income tax, when the former is higher than the latter, does not mean that these two
income taxes are one and the same. The said taxes are merely paid in the alternative,
giving the Government the opportunity to collect the higher amount between the
two. The situation is not much different from Section 13 of Presidential Decree No.
1590, which reversely allows PAL to pay, whichever is lower of the basic corporate
income tax or the franchise tax. It does not make the basic corporate income tax
indistinguishable from the franchise tax.
Given the fundamental differences between the basic corporate income tax and the
MCIT, presented in the preceding discussion, it is not baseless for this Court to rule
that, pursuant to the franchise of PAL, said corporation is subject to the first tax, yet
exempted from the second.
Fourth, the evident intent of Section 13 of Presidential Decree No. 1520 is to extend
to PAL tax concessions not ordinarily available to other domestic
corporations. Section 13 of Presidential Decree No. 1520 permits PAL to
pay whichever is lower of the basic corporate income tax or the franchise tax; and
the tax so paid shall be in lieu of all other taxes, except only real property
tax. Hence, under its franchise, PAL is to pay the least amount of tax possible.
Section 13 of Presidential Decree No. 1520 is not unusual. A public utility is granted
special tax treatment (including tax exceptions/exemptions) under its franchise, as
an inducement for the acceptance of the franchise and the rendition of public service
by the said public utility.[22] In this case, in addition to being a public utility
providing air-transport service, PAL is also the official flag carrier of the country.
The imposition of MCIT on PAL, as the CIR insists, would result in a situation that
contravenes the objective of Section 13 of Presidential Decree No. 1590. In effect,
PAL would not just have two, but three tax alternatives, namely, the basic corporate
income tax, MCIT, or franchise tax. More troublesome is the fact that, as between
the basic corporate income tax and the MCIT, PAL shall be made to pay whichever
is higher, irrefragably, in violation of the avowed intention of Section 13 of
Presidential Decree No. 1590 to make PAL pay for the lower amount of tax.
Fifth, the CIR posits that PAL may not invoke in the instant case the in lieu of all
other taxes clause in Section 13 of Presidential Decree No. 1520, if it did not pay
anything at all as basic corporate income tax or franchise tax. As a result, PAL
should be made liable for other taxes such as MCIT. This line of reasoning has been
dubbed as the Substitution Theory, and this is not the first time the CIR raised the
same. The Court already rejected the Substitution Theory in Commissioner of
Internal Revenue v. Philippine Airlines, Inc.,[23] to wit:
Substitution Theory
of the CIR Untenable
The fallacy of the CIRs argument is evident from the fact that
the payment of a measly sum of one peso would suffice to exempt PAL
from other taxes, whereas a zero liability arising from its losses would
not. There is no substantial distinction between a zero tax and a one-
peso tax liability. (Emphasis ours.)
Based on the same ratiocination, the Court finds the Substitution Theory
unacceptable in the present Petition.
The CIR alludes as well to Republic Act No. 9337, for reasons similar to those
behind the Substitution Theory. Section 22 of Republic Act No. 9337, more
popularly known as the Expanded Value Added Tax (E-VAT) Law, abolished the
franchise tax imposed by the charters of particularly identified public utilities,
including Presidential Decree No. 1590 of PAL. PAL may no longer exercise its
options or alternatives under Section 13 of Presidential Decree No. 1590, and is now
liable for both corporate income tax and the 12% VAT on its sale of services. The
CIR alleges that Republic Act No. 9337 reveals the intention of the Legislature to
make PAL share the tax burden of other domestic corporations.
The CIR seems to lose sight of the fact that the Petition at bar involves the liability
of PAL for MCIT for the fiscal year ending 31 March 2001. Republic Act No. 9337,
which took effect on 1 July 2005, cannot be applied retroactively[24] and any
amendment introduced by said statute affecting the taxation of PAL is immaterial in
the present case.
And sixth, Presidential Decree No. 1590 explicitly allows PAL, in computing its
basic corporate income tax, to carry over as deduction any net loss incurred in any
year, up to five years following the year of such loss. Therefore, Presidential Decree
No. 1590 does not only consider the possibility that, at the end of a taxable period,
PAL shall end up with zero annual net taxable income (when its deductions
exactly equal its gross income), as what happened in the case at bar, but also the
likelihood that PAL shall incur net loss (when its deductions exceed its gross
income). If PAL is subjected to MCIT, the provision in Presidential Decree No. 1590
on net loss carry-over will be rendered nugatory. Net loss carry-over is material only
in computing the annual net taxable income to be used as basis for the basic corporate
income tax of PAL; but PAL will never be able to avail itself of the basic corporate
income tax option when it is in a net loss position, because it will always then be
compelled to pay the necessarily higher MCIT.
Consequently, the insistence of the CIR to subject PAL to MCIT cannot be done
without contravening Presidential Decree No. 1520.
Between Presidential Decree No. 1520, on one hand, which is a special law
specifically governing the franchise of PAL, issued on 11 June 1978; and the NIRC
of 1997, on the other, which is a general law on national internal revenue taxes, that
took effect on 1 January 1998, the former prevails. The rule is that on a specific
matter, the special law shall prevail over the general law, which shall be resorted to
only to supply deficiencies in the former. In addition, where there are two statutes,
the earlier special and the later general the terms of the general broad enough to
include the matter provided for in the special the fact that one is special and the other
is general creates a presumption that the special is to be considered as remaining an
exception to the general, one as a general law of the land, the other as the law of a
particular case. It is a canon of statutory construction that a later statute, general in
its terms and not expressly repealing a prior special statute, will ordinarily not affect
the special provisions of such earlier statute.[25]
Neither can it be said that the NIRC of 1997 repealed or amended Presidential
Decree No. 1590.
While Section 16 of Presidential Decree No. 1590 provides that the franchise is
granted to PAL with the understanding that it shall be subject to amendment,
alteration, or repeal by competent authority when the public interest so requires,
Section 24 of the same Decree also states that the franchise or any portion thereof
may only be modified, amended, or repealed expressly by a special law or
decree that shall specifically modify, amend, or repeal said franchise or any portion
thereof. No such special law or decree exists herein.
The CIR cannot rely on Section 7(B) of Republic Act No. 8424, which amended the
NIRC in 1997 and reads as follows:
xxxx
The CIR reasons that PAL was a government-owned and controlled corporation
when Presidential Decree No. 1590, its franchise or charter, was issued in
1978. Since PAL was still operating under the very same charter when Republic Act
No. 8424 took effect in 1998, then the latter can repeal or amend the former by virtue
of Section 7(B).
A brief recount of the history of PAL is in order. PAL was established as a private
corporation under the general law of the Republic of the Philippines in February
1941. In November 1977, the government, through the Government Service
Insurance System (GSIS), acquired the majority shares in PAL. PAL was privatized
in January 1992 when the local consortium PR Holdings acquired a 67% stake
therein.[26]
It is true that when Presidential Decree No. 1590 was issued on 11 June 1978, PAL
was then a government-owned and controlled corporation; but when Republic Act
No. 8424, amending the NIRC, took effect on 1 January 1998, PAL was already a
private corporation for six years. The repealing clause under Section 7(B) of
Republic Act No. 8424 simply refers to charters of government-owned and
controlled corporations, which would simply and plainly mean corporations under
the ownership and control of the government at the time of effectivity of said
statute. It is already a stretch for the Court to read into said provision charters, issued
to what were then government-owned and controlled corporations that are now
private, but still operating under the same charters.
That the Legislature chose not to amend or repeal Presidential Decree No. 1590,
even after PAL was privatized, reveals the intent of the Legislature to let PAL
continue enjoying, as a private corporation, the very same rights and privileges under
the terms and conditions stated in said charter. From the moment PAL was
privatized, it had to be treated as a private corporation, and its charter became that
of a private corporation. It would be completely illogical to say that PAL is a private
corporation still operating under a charter of a government-owned and controlled
corporation.
The alternative argument of the CIR that the imposition of the MCIT is pursuant to
the amendment of the NIRC, and not of Presidential Decree No. 1590 is just as
specious. As has already been settled by this Court, the basic corporate income tax
under Section 13(a) of Presidential Decree No. 1590 relates to the general tax rate
under Section 27(A) of the NIRC of 1997, which is 32% by the year 2000, imposed
on taxable income. Thus, only provisions of the NIRC of 1997 necessary for the
computation of the basic corporate income tax apply to PAL. And even though
Republic Act No. 8424 amended the NIRC by introducing the MCIT, in what is now
Section 27(E) of the said Code, this amendment is actually irrelevant and should not
affect the taxation of PAL, since the MCIT is clearly distinct from the basic corporate
income tax referred to in Section 13(a) of Presidential Decree No. 1590, and from
which PAL is consequently exempt under the in lieu of all other taxes clause of its
charter.
The CIR calls the attention of the Court to RMC No. 66-2003, on Clarifying the
Taxability of Philippine Airlines (PAL) for Income Tax Purposes As Well As Other
Franchise Grantees Similarly Situated. According to RMC No. 66-2003:
The CIR attempts to sway this Court to adopt RMC No. 66-2003 since the
[c]onstruction by an executive branch of government of a particular law although
not binding upon the courts must be given weight as the construction comes from
the branch of the government called upon to implement the law.[27]
It is significant to note that RMC No. 66-2003 was issued only on 14 October 2003,
more than two years after FY 2000-2001 of PAL ended on 31 March 2001. This
violates the well-entrenched principle that statutes, including administrative rules
and regulations, operate prospectively only, unless the legislative intent to the
contrary is manifest by express terms or by necessary implication.[28]
Moreover, despite the claims of the CIR that RMC No. 66-2003 is just a clarificatory
and internal issuance, the Court observes that RMC No. 66-2003 does more than just
clarify a previous regulation and goes beyond mere internal administration. It
effectively increases the tax burden of PAL and other taxpayers who are similarly
situated, making them liable for a tax for which they were not liable
before. Therefore, RMC No. 66-2003 cannot be given effect without previous notice
or publication to those who will be affected thereby. In Commissioner of Internal
Revenue v. Court of Appeals,[29] the Court ratiocinated that:
Indeed, the BIR itself, in its RMC 10-86, has observed and
provided:
The Court, however, stops short of ruling on the validity of RMC No. 66-2003, for
it is not among the issues raised in the instant Petition. It only wishes to stress the
requirement of prior notice to PAL before RMC No. 66-2003 could have become
effective. Only after RMC No. 66-2003 was issued on 14 October 2003 could PAL
have been given notice of said circular, and only following such notice to PAL would
RMC No. 66-2003 have taken effect. Given this sequence, it is not possible to say
that RMC No. 66-2003 was already in effect and should have been strictly complied
with by PAL for its fiscal year which ended on 31 March 2001.
Even conceding that the construction of a statute by the CIR is to be given great
weight, the courts, which include the CTA, are not bound thereby if such
construction is erroneous or is clearly shown to be in conflict with the governing
statute or the Constitution or other laws. "It is the role of the Judiciary to refine and,
when necessary, correct constitutional (and/or statutory) interpretation, in the
context of the interactions of the three branches of the government."[30] It is
furthermore the rule of long standing that this Court will not set aside lightly the
conclusions reached by the CTA which, by the very nature of its functions, is
dedicated exclusively to the resolution of tax problems and has, accordingly,
developed an expertise on the subject, unless there has been an abuse or improvident
exercise of authority.[31] In the Petition at bar, the CTA en banc and in division both
adjudged that PAL is not liable for MCIT under Presidential Decree No. 1590, and
this Court has no sufficient basis to reverse them.
As to the assertions of the CIR that exemption from tax is not presumed, and the one
claiming it must be able to show that it indubitably exists, the Court recalls its
pronouncements in Commissioner of Internal Revenue v. Court of Appeals[32]:
We disagree. Petitioner Commissioner of Internal Revenue erred in
applying the principles of tax exemption without first applying the well-
settled doctrine of strict interpretation in the imposition of taxes. It is
obviously both illogical and impractical to determine who are
exempted without first determining who are covered by the aforesaid
provision. The Commissioner should have determined first if private
respondent was covered by Section 205, applying the rule of strict
interpretation of laws imposing taxes and other burdens on the populace,
before asking Ateneo to prove its exemption therefrom. The Court takes
this occasion to reiterate the hornbook doctrine in the interpretation of tax
laws that (a) statute will not be construed as imposing a tax unless it does
so clearly, expressly, and unambiguously. x x x (A) tax cannot be imposed
without clear and express words for that purpose. Accordingly, the
general rule of requiring adherence to the letter in construing statutes
applies with peculiar strictness to tax laws and the provisions of a
taxing act are not to be extended by implication. Parenthetically, in
answering the question of who is subject to tax statutes, it is basic
that in case of doubt, such statutes are to be construed most strongly
against the government and in favor of the subjects or citizens
because burdens are not to be imposed nor presumed to be imposed
beyond what statutes expressly and clearly import. (Emphases ours.)
For two decades following the grant of its franchise by Presidential Decree No. 1590
in 1978, PAL was only being held liable for the basic corporate income tax or
franchise tax, whichever was lower; and its payment of either tax was in lieu of all
other taxes, except real property tax, in accordance with the plain language of
Section 13 of the charter of PAL. Therefore, the exemption of PAL from all other
taxes was not just a presumption, but a previously established, accepted, and
respected fact, even for the BIR.
The MCIT was a new tax introduced by Republic Act No. 8424. Under the doctrine
of strict interpretation, the burden is upon the CIR to primarily prove that the new
MCIT provisions of the NIRC of 1997, clearly, expressly, and unambiguously
extend and apply to PAL, despite the latters existing tax exemption. To do this, the
CIR must convince the Court that the MCIT is a basic corporate income tax, [33] and
is not covered by the in lieu of all other taxes clause of Presidential Decree No.
1590. Since the CIR failed in this regard, the Court is left with no choice but to
consider the MCIT as one of all other taxes, from which PAL is exempt under the
explicit provisions of its charter.
Not being liable for MCIT in FY 2000-2001, it necessarily follows that PAL need
not apply for relief from said tax as the CIR maintains.
SO ORDERED.