Republic of the Philippines

COURT OF TAX APPEALS

Quezon City

ENBANC
*********

COMMISSIONER OF INTERNAL REVENUE, CTA EB No. 1123

Petitioner, (CTA Case No. 8140)

Present:

DEL ROSARIO, PJ,

CASTANEDA, JR.,
-versus- BAUTISTA,
UY,
CASANOVA,
FABON-VICTORINO,
MINDARO-GRULLA,
COTANGCO-MANALASTAS, and
BASES CONVERSION AND DEVELOPMENT RINGPIS-LIBAN, JJ.
AUTHORITY,
Respondent. Promulgated:

DEC 16 2014
x--------------------------------------------------------------------~--------~--~-:~~~~~---x
DECISION

CASTANEDA, JR., J. :

This is a Petition for Review by the Commissioner of Internal Revenue

seeking to reverse and set aside the Decision 1 and the Resolution 2 dated September
13, 2013 and January 30, 2014, respectively, of the Court of Tax Appeals-First
Division (Court in Division) in the case entitled Bases Conversion and Development
Authority -versus- Commissioner of Internal Revenue, and docketed as CTA Case
No. 8140.

This appeal stemmed from the ruling of the Court in Division ordering
petitioner to refund the amount of ~101 ,637.466.40 representing creditable Jt-
1
Penned by Presiding Justice Roman G. Del Rosario and concurred in by Associate Justices
Erlinda P. Uy and Cielito N. Mindaro-Grulla. Rollo, pp. 51-76.
2
Id. at 77-79.
DECISION
CTA EB No. 1123 { CTA case No. 8140)
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withholding tax paid on July 31, 2008 in favor of respondent in connection with the
sale/disposition of the 12,036 square meter property located at Fort Bonifacio,
Taguig City and is known as the "Expanded Big Delta Lots."

The Facts

The factual backdrop as found by the Court in Division and as borne from the
records is as follows:

On May 23, 2008, [respondent] entered into four

separate Contracts to Sell, involving the 12,036 sq. m.
"Expanded Big Delta Lots" (subject property) located in
Bonifacio Global City, Taguig City, with 18-14 Property
Holdings, Incorporated, 14-8B Property Holdings Incorporated,
The Net Group Project Management Corporation, and The Net
Group Property Management Corporation (buyer-companies) ,
all members of the Unincorporated Joint Venture (identified as
the "Net Group"), for the total purchase price of
P2,032,749,327.96, detailed as follows:

Exhibit Buyer Area TCT No. Purchase Price

A 18-14 Property 3,600 sq. m. TCT No. 238-P P608,000,796.00
Holdings, Inc. and 239-P
8 14-88 Property 3,150 sq. m. TC No. 240-P 532,000,696.50
Holdings, Inc.
c The Net Group 2,861 sq. m. TC No. 241-P 483,191,743.71
Project
Management
Corp.
D The Net Group 2,425 sq. m. TC No. 242-P 409,556,091.75
Property
Management
Corp.
TOTAL -
_fl2,032,I49,327 .96

In a letter dated May 26, 2008, which [respondent]

received on May 27, 2008, the Net Group informed
[respondent] that it would defer the remittance of the amount of
P1 01,637,466.40 to the BIR, representing the amount of CWT,
which it withheld in relation to the above-mentioned sale
transactions until [respondent] could present on or before June
9, 2008, a written confirmation from the BIR that no CWT was
due for the said sale.

[Respondent] wrote a letter to the CIR, which the BIR

received on May 28, 2008, requesting a confirmation that it is
exempted from all taxes and fees , including CWT and value
added tax (VAT) on the sale/disposition of the 12,036 sq. m. ~
DECISION
CTA EB No. 1123 (CTA case No. 8140)
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"Expanded Big Delta Lots" in Fort Bonifacio. [Respondent],

however, received no reply from the CIR.

On July 23, 2008, [respondent] and the buyer-

companies, as withholding agents, remitted to BIR ROO No. 44
the amount of P1 01,637,466.40 representing five percent (5%)
CWT on the P2,032,749,327.96 total purchase price of the
subject properties to wit:

Payment Form BIR Tax

Withholding agent (BIR Form No. Payment CWT
0605) (Exhibit) Deposit Slip
(Exhibit)
The NetGroup
Property J K R 20.477,804.59
Management Corp.
18-14 Property M N 15,200,019.90
Holdings, Inc.
18-14 Property p Q 15,200,019.90
Holdings, Inc.
14-88 Property s T 26,600,034.83
Holdings, Inc.
The Net Group v w 24,159,587.19
Project Management
Corp.
Total P1 01 ,637,466.41

The buyer-companies accordingly issued Certificates of

Creditable Tax Withheld at Source (BIR Form No. 2307) in the
name of [respondent], summarized as follows:

Withholding Agent Certificate of

Creditable Tax CWT
Withheld at Source
(Exhibit)
The NetGroup Property
Management Corp. L P20,477,804.59
18-14 Property Holdings, Inc. 0 15,200,019.90
18-14 Property Holdings, Inc. R 15,200,019.90
14-88 Property Holdings, Inc. u 26,600,034.83
The Net Group Project X 24,159,587.19
Management Corp.
TOTAL P1 01,637,466.41

On March 9, 2009, [respondent] filed a letter dated

February 28, 2009 (with attachments) with [petitioner] claiming
for a refund of the amount of P101 ,637,466.40, allegedly
representing erroneously or illegally collected CWT relative to
the sale of the above-mentioned property.

[Petitioner] failed to act on [respondent's] claim for

refund , prompting [respondent] to file the instant Petition for
Review on July 29, 2010. fv
DEGSION
CTA EB No. 1123 {CTA case No. 8140)
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In the Resolution dated October 18, 2010, [the Court in

Division] admitted [petitioner's] belatedly filed Answer. In her
Answer, [petitioner] interposed the following special and
affirmative defenses:

"5. She reiterates and re-pleads the

preceding paragraphs of this Answer as part of
her Special and Affirmative Defenses.

6. [Repondent's] alleged claim for refund

is subject to administrative routinary
investigation/examination by the Bureau .

7. [Respondent] failed to demonstrate

that the tax subject of the case at bar was
erroneously or illegally collected.

8. [Respondent] must show that it has

complied with the provisions of Sections 204(c)
and 229 of the National Internal Revenue Code
(NIRC) of 1997, as amended, on the prescriptive
period for claiming tax refund/credit.

9. Taxes remitted to the BIR are

presumed to have been made in the regular
course of business and in accordance with the
provisions of law.

10. [Respondent] failed to substantiate its

claim for refund/issuance of tax credit certificate
in the amount of One Hundred Million Six
Hundred Thirty Seven Thousand Four Hundred
Sixty Six Pesos and 40/100 (P101 ,637,466.40)
representing alleged unutilized creditable
withholding tax for taxable year 2008.

11. [Respondent], in its Petition for

Review, alleged that it is a government
instrumentality that is vested with corporate
powers duly organized and existing under and by
virtue of Republic Act No. 7227 otherwise known
as the Bases Conversion and Development Act
of 1992.

12. By virtue of which , it likewise alleged

that Section 8 of aforesaid RA [7]227 as pt----
DECISION
CTA EB No. 1123 (CTA Case No. 8140)
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amended by RA 7917 intended the proceeds of

its sale to be exempt from the payment of all
forms of taxes. It alleged that Section 8 as
amended by RA 7917 avers:

The provisions of law to the contrary

notwithstanding, the proceeds of the sale
thereof shall not be diminished and,
therefore, exempt from all forms of taxes
and fees.

It bears stressing that RA 7917 was

approved and enacted into law on February 24,
1995.

Contrary to the aforesaid provision of law,

[petitioner] humbly manifests that with the advent
of the NIRC of 1997, as amended, which took
effect on January 1, 1998, [respondent], being a
government entity, is liable to pay income tax
pursuant to the provision of Section 27(C) thereof
which explicitly provides:

'C) Government-owned or Controlled-

Corporations, Agencies or Instrumentalities.
- The provisions of existing special or
general laws to the contrary
notwithstanding, all corporations ,
agencies, or instrumentalities owned or
controlled by the Government, except the
Government Service Insurance System
(GSIS), the Social Security System (SSS),
the Philippine Health Insurance Corporation
(PHIC), the Philippine Charity Sweepstakes
Office (PCSO) and the Philippine
Amusement and Gaming Corporation
(PAGCOR), shall pay such rate of tax
upon their taxable income as are imposed
by this Section upon corporations or
associations engaged in a similar business,
industry or activity.' (Emphasis and
underscoring supplied)

On the basis of the foregoing provision of

law, it is clear as water that [respondent], being a
governmental instrumentality owned and
controlled by the Government is liable to pay rp.-
DECISION
CTA EB No. 1123 {CTA Case No. 8140)
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income tax. It is quite important to emphasize

that this is notwithstanding any provision of
existing special law like RA 7227. Hence, the
NIRC of 1997 which was implemented in 1998
shall be supreme and remain in force over RA
7917 which took effect in 1995. As can be
gleaned, the only government-run entities that
are exempt from the payment of income tax are
limited to GSIS, SSS, PHIC, PCSO and
PAGCOR. Petitioner, being not one of those
excluded from the coverage, is therefore, not
exempt from the payment of income taxes.

It is basic precept in statutory construction

that when the law is clear, the function of the
courts is simple (sic) to apply the law. Time and
again, where the law speaks in clear and
categorical language, there is no room for
interpretation, vacillation, or equivocation; there
is room only for application.

In relation thereto, the NIRC of 1997, as

amended by Republic Act No. 9337 on July 1,
2005 provides:

'Section 1. Section 27 of the National Internal

Revenue Code of 1997, as amended, is hereby
further amended to read as follows:

Sec. 27. Rates of Income Tax on Domestic

Corporations. -

XXX

(C) Government-owned or -Controlled

Corporations, Agencies or Instrumentalities.
- The provisions of existing special or
general laws to the contrary
notwithstanding, all corporations,
agencies, or instrumentalities owned or
controlled by the Government, except the
Government Service and Insurance System
(GSIS), the Social Security System (SSS),
the Philippine Health Insurance Corporation
(PHIC), and the Philippine Charity
Sweepstakes Office (PCSO), shall pay
such rate of tax upon their taxable <jt-
DECISION
CTA EB No. 1123 (CTA Case No. 8140)
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income as are imposed by this Section

upon corporations or associations engaged
in a similar business, industry or activity.
XXX

Sec. 24. Repealing Clause. -The following

laws or provisions of laws are hereby
repealed and the persons and/or
transactions affected herein are made
subject to the value-added tax subject to the
provisions of Title IV of the National Internal
Revenue Code of 1997, as amended:

XXX

(C) All other laws, acts, decrees, executive

orders, issuances and rules and regulations
or parts thereof which are contrary to and
inconsistent with any provisions of this Act
are hereby repealed , amended or modified
accordingly.

XXX

Sec. 26. Effectivity Clause. - This Act shall

take effect on July 1, 2005. Xxx (Emphasis
and underscoring supplied)

Again , by express provision of RA 9337, it

is a glaring reality that government
instrumentalities are still liable to pay income tax.
The only remaining four (4) institutions that are
exempt to pay income tax are the GSIS, SSS,
PHIC and PCSO. Ergo, [respondent], being a
government instrumentality and not excluded
from the exempt institutions, is still liable to pay
the income taxes.

In the case entitled, 'Fiorencio Eugenio vs.

Secretary Franklin M. Drilon et a/.,' the Supreme
Court held:

'xxx The intent of the law, as culled from

the situation, circumstances and conditions
it sought to remedy, must be enforced. On ~
DEaSJON
CTA EB No. 1123 (CTA Case No. 8140)
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this point, a leading authority on statutory

construction stressed:

The intent of a statute is law . The intent is

the vital part, the essence of the law, and
the primary rule of construction is to
ascertain and give effect to the intent. The
intention of the legislature in enacting a
law is the law itself, and must be
enforced when ascertained, although it
may not be consistent with the strict
letter of the statute. Courts will not
follow the letter of a statute when it leads
away from the true intent and purpose of
the legislature and to conclusions
inconsistent with the general purpose of
the act . . . . In construing statutes, the
proper course is to start out and follow the
trite intent of the legislature and to adopt
that sense which harmonizes best with the
context and promotes in the fullest manner
the apparent policy and objects of the
legislature.' (Emphasis and underscoring
supplied.)

Corollary thereto, in 'Republic of the Philippines

et a/. vs. Car/ito Lacap,' the Supreme Court
eloquently propounded:

'The 'plain meaning rule' or verbal legis in

statutory construction is that if the statute is
clear, plain and free from ambiguity, it must
be given its literal meaning and applied
without interpretation. The rule derived from
the maxim Index animi sermo est (speech is
the index of intention) rests on a valid
presumption that the words employed by
the legislature in a statute correctly express
its intention or will and preclude the court
from construing it differently. The legislature
is presumed to know the meaning of the
words, to have used words advisedly, and
to have expressed its intent by use of such
words as are found in the statute. Verba
legis non est recedendum, of from the
words of a statute there should be no
departure.' rv
DECISION
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In the case of 'Martin Centeno vs. Hon.

Victoria Villalon-Pornillos et at.', the Supreme
Court had the occasion to say:

'xxx Indeed, it is an elementary rule of

statutory construction that the express
mention of one person, thing , act, or
consequence excludes all others. This rule
is expressed in the familiar maxim
'expressio unius est exclusion alterius.'
Where a statute, by its terms, is expressly
limited to certain mattes, it may not, by
interpretation or construction , be extended
to others. The rule proceeds from the
premise that the legislature would not
have made specified enumerations in a
statute had the intention been not to
restrict its meaning and to confine its
terms to those expressly mentioned. xxx'
(Emphasis and underscoring supplied)

Suffice it to say that the taxes withhold

(sic) from [respondent] out of the income it
derived from the sale of real properties to the
unincorporated joint venture identified as the
'NetGroup' is a form of Income tax that will be
credited in its favor and declared under CWT
(SIR Form No. 2307). The CWT becomes part
and parcel of the Quarterly and Annual Income
Tax Return of [respondent] to be used for the
purpose of offsetting the income tax liabilities of
[respondent] for a given taxable year. The CWT
paid is deducted from the income tax liabilities of
[respondent] shown in its Annual Income Tax
Return to arrive at the remaining income tax still
payable.

13. Having established that [respondent]

is liable to pay CWT while its buyers, the
'NetGroup', are obliged to remit the withholding
taxes due, the following pertinent provisions of
law are applicable relative to the manner of
computing, payment and remittance of the CWT.

RR 6-2001 dated July 31, 2001 provides: f-

DECISION
CTA EB No. 1123 {CTA Case No. 8140)
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'SECTION 3. Revised Rules of

Creditable Withholding Tax- Section 2.57.2
of Revenue Regulations 2-98, as amended,
is hereby further amended to read as
follows:

XXX

J. Gross Selling Price of (sic) total

amount of consideration or its equivalent
paid to the seller/owner for the sale,
exchange or transfer of real property
classified as ordinary asset - A creditable
withholding tax based on the Gross Selling
Price/total amount of consideration or the
Fair Market Value determined in
accordance with Section 6(E) of the Code,
whichever is higher, paid to the seller/owner
for the sale, transfer or exchange of real
property, other than capital asset, shall be
imposed upon the withholding agent/buyer,
in accordance with the following schedule:

XXX

B. Upon the following values of real

property, where the seller/transferor is
habitually engaged in real estate business;

XXX

With a selling price of more than

Two Million Pesos 5%

XXX

If the buyer is an individual not engaged

in trade or business, the following rules
shall apply:

(i) If the sale is a sale of property on the

installment plan, that is payments
in the year do not exceed 25% of
the selling price, no withholding tax
is required to be made on the
periodic installment payments. In
such a case, the applicable tax rate yv
DECISION
CTA EB No. 1123 {CTA Case No. 8140)
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of tax (sic) based on the gross

selling price or fair market value of
the property, whichever is higher
shall be withheld on the last
installment or installments to be paid
to the seller until the tax is fully paid;

(ii) If on the other hand, the sale is on a

'cash basis' or is a 'deferred
payment sale on installment plan'
(that is, payments in the year of
sale exceed 25% of the selling
price), the buyer shall withhold the
tax based on the gross selling price
or fair market value of the property,
whichever is higher, on the first
installment.

However, if the buyer is engaged in

trade or business, whether a corporation or
otherwise, these rules shall apply:

(i) If the sale is a sale of property on the

installment plan (that is, payments in
the year of sale do not exceed 25%
of the selling price), the tax shall be
deducted and withheld by the buyer
on every installment.

(ii) If, on the other hand, the sale is not

on a 'cash basis' or is a 'deferred-
payment sale not on the installment
plan' (that is, payments in the year of
sale exceed 25% of the selling
price), the buyer shall withhold the
tax based on the gross selling price
or fair market value of the property,
whichever is higher, on the first
installment.'

SECTION 4. Time for Filing of Withholding Tax

and VAT Returns and the Payment of Taxes
Due Thereon. -
XXX F
DECISION
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(1) Section 2.58 (A) (2) and 2.81 of RR No.

2-98, as amended are hereby further
amended to read as follows:

Section 2.58 - RETURNS AND

PAYMENTS OF TAXES WITHHELD AT
SOURCE

(A) Monthly return and payments of

taxes

XXX

(2) WHEN TO FILE-

(a) For both large and non-large

taxpayers , the withholding tax
returns, whether creditable or final
(including final withhold (sic] taxes
on interest from any currency bank
deposit and yield or any other
monetary benefit from deposit
substitutes and from trust funds
and similar arrangements) shall be
filed and payments should be
made, within ten (10) days after
the end of each month, except for
taxes withheld for the month of
December of each year, which
shall be filed on or before January
15 of the following year.

(b) With respect, however, to

taxpayers, whether large or non-
large, who availed of the
Electronic Filing and Payment
System (EFPS), the deadline for
electronically filing the applicable
withholding tax returns and paying
the taxes due thereon via the
EFPS shall be five (5) days later
than the deadlines set above'.
(Emphasis and underscoring
supplied)

Corollary thereto, Revenue Regulations

No. 12-2001 dated September 7, 2001 provides: ft.-
DEOSION
CTA EB No. 1123 ( CTA Case No. 8140)
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'Section 4. Time of Withholding. -

Section 2.57.4 of RR 2-98 is hereby
amended, to read as follows:

Section 2.57.4. Time of Withholding -

The obligation of the payor to deduct and
withhold the tax under Section 2.57 of
these Regulations arises at the time an
income payment is paid or payable, or the
income payment is accrued or recorded as
an expense or asset, whichever is
applicable in the payor's books, whichever
comes first. The term 'payable' refers to the
date the obligation becomes due,
demandable or legally enforceable.'
(Emphasis and underscoring supplied)

[Respondent] allegedly sold properties to

an unincorporated joint venture called the
'NetGroup' on May 23, 2008 for the total
purchase price of Two Billion Thirty Two Million
Seven Hundred Forty Nine Thousand Three
Hundred Twenty Seven Pesos and 96/100
(P2,032,749,327.96) broken down as follows:
Date of Name of Buyer Purchase Price Oownpayment on Rate of Balance 31.Jul· 5%CWTon Date of
Contract to Sell May 23.2008 Oownpayment 08 Gross Selling Remittance
Price
23-May-08 18-14 Property 608.000,796.00 179,461 ,615.15 30% 428,539,180.85 30,400,039.80 31-Jul-08
Holdings Inc. I
I
23-May-08 14-88 Property 532,000,696.50 157,028,913.26 30% 374,971,783.24 26,600,034.83 31-Jul-08
Holdings, Inc. I
23-May-08 NeiGroup Project 483,191 ,743.71 142,622,133.60 30% 340,569,610.11 24,159,587.19 31-Jul-08
Mngt Corp.
23-May-08 NetGroup Project 409,556,091.75 120,887,337.90 30% 288,668,753.76 20,477,804.59 31-Jul-08 !
Mngt Corp. I

Total 2,032,749,327.96 600,000,000.00 1,432,749,327.96 101 ,637,466.40

Based on the foregoing provision of law,

the 'NetGroup', being a withholding agent, is
under obligation to deduct and withhold the tax
which arises at the time the income payments
are made on May 23, 2008. Although the terms
of the contract provide that payments are made
on installment basis, where the down payment is
made upon signing the contract and the last
payment on or before July 23, 2008, still, since
full payment and not only 25% were made within
the entire year, the withholding agent shall
withhold the CWT based on the gross selling
price or fair market value of the property,
whichever is higher, on the first installment. In f
DEGSJON
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which case, the CWT should be withheld on May

23, 2008. The amount of the CWT shown in the
diagram should be remitted within ten (10) days
of the following month. The only exception to the
rule is when [respondent] is considered an EFPS
taxpayer, in which case, the remittance should be
made 5 days after the deadline set or fifteen (15)
days following the month of sale.

In the case at hand, [respondent] should

pay the entire CWT on the date of the actual sale
on May 23, 2008 and not only July 23, 2008. For
having belatedly paid the same, through its
withholding agent, on July 23, 2008, the
withholding agent ought to pay the interest and
surcharges as provided under Section 248 and
249 of the NIRC of the 1997, as amended. In
addition, the Withholding Agent failed to file BIR
Form No. 1606 (Withholding Tax Remittance
Return [For Transactions Involving Real Property
Other than Capital Asset including Taxable and
Exempt]).

14. [Respondent] anchored its assertion

that it is exempt from the payment of CWT on the
basis of the tax rulings it alleged in its Petition for
Review. [Respondent] heavily invoked and relied
on said rulings in applying for refund of the CWT
it allegedly paid to [petitioner]. Assuming for the
sake of arguments that indeed said rulings were
issued by [petitioner], still it must be stressed that
[petitioner's] filing of the Answer is tantamount to
a revocation of the tax rulings issued.

In the case entitled 'Commissioner of

Internal Revenue, petitioner vs. Burmeister and
Wain Scandinavian Contractor Mindanao, Inc.
respondent, the Supreme Court had the occasion
to say:

'Petitioner's filing of his Answer

before the CTA challenging respondent's
claim for refund effectively serves as a
revocation of VAT Ruling No. 003-99 and
BIR Ruling No. 023-95. However, such
revocation cannot be given retroactive
effect since it will prejudice respondent. <jL-
DEaSJON
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Changing respondent's status will deprive

respondent of a refund of a substantial
amount representing excess output tax.
Section 246 of the Tax Code provides that
any revocation of a ruling by the
Commissioner of Internal Revenue shall not
be given retroactive application if the
revocation will prejudice the taxpayer.
Further, there is no showing of the
existence of any of the exceptions
enumerated in Section 246 of the Tax Code
for the retroactive application of such
revocation.

However, upon the filing of petitioner's

Answer dated 2 March 2000 before the CTA
contesting respondent's claim for refund,
respondent's services shall be subject to
the regular 10% VAT. Such filing is deemed
a revocation of Vat Ruling No. 003-99 and
BIR Ruling No. 023-95'. (Emphasis and
underscoring supplied)

It must be stressed that tax rulings issued

and alleged in the Petition for Review do not
pertain to the particular sale transaction made by
[respondent]. In addition, tax [r]ulings are issued
primarily based on the facts presented by the
applicants. Hence, tax rulings may vary from time
to time depending on the set of facts that may be
presented. As the concluding remarks of tax
rulings state:

'This ruling is issued on the basis of the

foregoing facts are (sic) represented.
However, if upon investigation, it will be
ascertained that the facts are different,
then this ruling shall be considered null and
void.' (Emphasis and underscoring
supplied)

Ergo, tax rulings are not considered final,

hence, may be the subject of revocation at any
time depending on the further investigation that
may be conducted .(&
DECISION
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It must likewise be stressed that

[respondent] did not request for a tax ruling
before the Office of the Commissioner of Internal
Revenue prior to the intended sale on May 23,
2008. It was only on May 28, 2008 that
[respondent] was able to request for a ruling
which is way beyond the May 23, 2008 sale
transactions.

The Four (4) Contracts to Sell made and

entered into on May 23, 2008 by [respondent]
and its buyers reveal the following :

'ARTICLE IV.
TITLE AND OWNERSHIP OF SUBJECT
PROPERY

SECTION 1. Title to the Subject Property. -

Title to the subject property is reserved in
the name of BCDA until full and complete
payment of the Purchase Price. Only upon
full and complete payment by the BUYER of
the purchase price in accordance with the
provisions of Article Ill Section 1 above shall
BCDA execute a Deed of Absolute Sale in
favour of the BUYER, which shall
substantially be in the form attached thereto
as Annex 'H'. Coincidentally with the signing
of the Deed of Absolute Sale, and (iii) Real
Property Tax Clearance covering the
subject property as well as the document
evidencing payment of the Creditable
Withholding Tax due on the sale of the
Subject Property, if any.

XXX

SECTION 3. Taxes, Fees and Expenses -

Except for the Creditable Withholding Tax, if
any, all applicable taxes, fees and any other
charges related to the sale, transfer and
registration of the Subject Property, such
as, but not limited to, when such is
applicable, documentary stamp taxes
(DST), business or city taxes, transfer taxes
and registration fees and other charges
shall be for the account of the BUYER. xxx ji-
DEGSION
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ARTICLE V
DELIVERY OF THE SUBJECT PROPERTY

Section 1. Delivery of the Subject Property.

Upon full payment of the balance of the
Purchase Price and the execution of the
Deed of Absolute Sale, BCDA shall deliver
to the BUYER the Subject Property on an
'AS IS WHERE IS BASIS'. xxx
Coincidentally with BCDA's receipt of full
payment for the Balance of the Purchase
Price and the execution of the Deed of
Absolute Sale, BCDA shall deliver to the
BUYER (i) the Transfer Certificate of Titles
(TCT), (ii) the Tax Declarations' and (iii)
Real Property Tax Clearance covering the
Subject property, as well as the
document evidencing payment of the
Creditable Withholding Tax due on the
sale of the Subject property, if any.'
(Emphasis and underscoring supplied)

Based on the foregoing, it cannot be

gainsaid that [respondent], who prepared the
contract, provided a provision pertaining to the
payment Creditable Withholding Tax as a sine
qua non condition for the delivery of the property
and transfer of title over said property.
[Respondent] would not have included aforesaid
provision had it not been aware that it is liable for
payment of the corresponding CWT. It was
[respondent] who prepares the stipulations in the
contract, the buyers consented by affixing the
signature of its authorized representative or its
'adhesion' to bind the party.

In the case entitled, 'Federico Serra vs.

The Honorable Court of Tax Appeals and Rizal
Commercial Banking Corporation', the court held:

'A contract of adhesion is one wherein a

party, usually a corporation , prepares the
stipulations in the contract, while the other
party merely affixes his signature or his
'adhesion' thereto. These types of contracts
are as binding as ordinary contracts. r
DECISION
CTA EB No. 1123 {CTA Case No. 8140)
Page 1B of31
)(-----------------------------------------------)(

Because in reality, the party who adheres to

the contract is free to reject it entirely.
Although , this Court will not hesitate to rule
out blind adherence to terms where facts
and circumstances will show that it is
basically one-sided.' (Emphasis and
underscoring supplied)

15. In order to be entitled to the refund

being sought, [respondent] must satisfactorily
comply with the following requisites:

a.) That the claim for refund was filed within

the two-year prescriptive period as
provided under Section 204(c) in relation
to Section 229 of the NIRC of 1997;

b.) That the fact of withholding is

established by a copy of a statement
duly issued by the payor (withholding
agent) to the payee, showing the
amount paid and the amount of tax
withheld therefrom; and

c.) That the income upon which the taxes

were withheld were included in the
return of the recipient.

[Respondent] failed to state that the

Income pertaining to the sales made on May 23,
2008 were included as part of the Income
declared in its Annual Income Tax Returns for
taxable year 2008. In relation thereto, the
Financial Statements alleged in its Petition for
Review were not audited by the Commission of
Audit, hence, not reflective of the true financial
condition and net worth of [respondent].

As found in the document denominated as

'A Report of Independent Certified Public
Accountants to Accompany Income Tax Return'
duly signed by Ma. Sylva Z. lsiderio, State
Auditor V, Commission on Audit and which is
attached to the Petition for Review as Annex 'L',
it clearly provides: r
DECISION
CTA EB No. 1123 (CTA Case No. 8140)
Page 19 of31
)(-----------------------------------------------)(

'The accompanying balance sheet of the

Bases Conversion and Development
Authority as of December 31, 2009 and the
related statements of income for the year
then ended were prepared from the
Authority's books.

These financial statements are subject to

any additional adjustments as may be
disclosed upon the completion of our
examination. Since the audit is currently in
progress, we are unable to express an
opinion on the fairness of the presentation
of the financial statements.

Likewise, for the same reason stated

above, to date, we are not in a position to
comply with the required audited
financial statements of the above authority
for the year ended December 31 , 2009.
(Emphasis and underscoring supplied)

16. In an action for refund, the burden of

proof is on the taxpayer to establish its right to
refund , and failure to sustain the burden is fatal
to the claim for refund .

17. Claims for refund are construed strictly

against the claimant for the same partake the
nature of exemption from taxation.

18. Basic is the rule that tax refunds are

regarded as tax exemptions that are in
derogation of sovereign authority and are to be
construed in strictissimi juris against the person
or entity claiming the exemption (Philippine
Phosphate Fertilizer Corporation v.
Commissioner of Internal Revenue, G.R. No.
141973, June 28, 2005). The law does not look
with favor on tax exemptions and that he who
would seek to be thus privileged must justify it by
words too plain to be mistaken and too
categorical to be misinterpreted (Sealand Service
Vs. Court of Appeals, 357 SCRA 444)." (Citation
omitted) r
DECISION
CTA EB No. 1123 (CTA Case No. 8140)
Page 20 of31
)(-----------------------------------------------)(

Within the allowed period, [respondent] filed on

November 9, 2010 its Reply to [petitioner's] Answer.
[Respondent] states therein that (1) the proceeds from the sale
of the "Expanded Big Delta Lots" to the "NetGroup" is not
subject to CWT, and (2) the grant of tax exemption to
[respondent] pursuant to Section 8 of RA No. 7227, as
amended, prevails over the alleged withdrawal of exemption
pursuant to RA No. 8424 or the "Tax Reform Act of 1997''.

During pre-trial, both parties filed their respective pre-

trial briefs. The parties also filed their Joint Stipulation of Facts
and Issues on June 21 , 2011 and the Court approved it in the
Resolution dated June 23, 2011 . In the same Resolution, the
pre-trial was deemed terminated and the parties were ordered
to proceed with the trial.

During trial , [respondent] presented its testimonial and

documentary evidence. Its pieces of documentary evidence
were admitted in the Court's Resolution dated October 25,
2012. On the other hand, in a hearing held on January 16,
2013, [petitioner's] counsel manifested that she has no witness
to present. Upon motion of the parties, they were granted thirty
(30) days or until February 15, 201 3 to file their respective
memoranda.

The parties filed their respective memoranda within the

extended period allowed by this Court. Subsequently, the case
was submitted for decision on April 26, 2013.

The Court in Division was confronted with the issue of whether the
respondent enjoys exemption from all forms of taxes and if in the negative, whether
or not the proceeds on the sale of the Expanded Big Delta Lots in favor of the Net
Group are subject to Creditable Withholding Tax (CWT}.

The Court in Division ruled for the respondent by holding that while the latter
is not a tax exempt entity, the proceeds from its sale of a portion of Metro Manila
military camps are nevertheless exempt from all forms of taxes, including income tax
pursuant to its charter. Moreover, records indicate that the respondent faithfully
complied with the substantiation requirements for it to be entitled to a refund. The
dispositive portion of the assailed Decision and Resolution on the Motion for
Reconsideration provides:

Decision dated September 13, 2013: ?v'

DECISION
CTA EB No. 1123 (CTA Case No. 8140)
Page21 of31
)(-----------------------------------------------)(

WHEREFORE, premises considered, the instant Petition

for Review is hereby GRANTED. Accordingly, respondent
Commissioner of Internal Revenue is ORDERED to REFUND
in favor of petitioner BASES CONVERSION DEVELOPMENT
AUTHORITY the amount of ~1 01 ,637,466.40, representing
creditable withholding tax paid on July 31 , 2008 in connection
with the sale/disposition of the 12,036 square-meter property,
otherwise known as the "Expanded Big Delta Lots", located in
Fort Bonifacio, Taguig City.

SO ORDERED.3

Resolution dated January 30, 2014:

WHEREFORE, the motion for reconsideration filed by

respondent is DENIED for lack of merit.

SO ORDERED.4

Not satisfied with the findings and conclusions arrived at by the Court in
Division, petitioner elevated her present recourse before this Court via a Petition for
Review.s Acting on the petition, this Court in a resolution dated April 22, 2014
directed respondent to file its comment within ten (10) days from receipt thereof.6

With the respondent's comment on the petition dated June 3, 2014,7 the
Court gave due course to the petition for review and accordingly ordered both parties
to submit their respective memorandum within thirty (30) days from receipt of the
Court's Resolution.s

On July 31 , 2014, respondent filed its memorandum.9 For her part, petitioner
manifested that she is adopting the arguments previously raised in her Petition for
Review dated March 7, 2014 as her memorandum for this case. 10 Thereafter, on
August 28, 2014, the Court noted petitioner's manifestation and accordingly
submitted this case for decision.11 ~

3
Id. at 76.
4
Id. at 79.
5
Id. at 7-47.
6
Id. at 84-85.
7
Id. at 90-108.
8
Id. at 112-113.
9
Id. at 114-134.
10
Id. at 138-139.
11
Id. at 143-144.
DECISION
CTA EB No. 1123 {CTA Case No. 8140)
Page22of31
)(-----------------------------------------------)(

Hence, this Decision.

The Issues

Petitioner submits the following assignment of errors for the Court's

resolution, to wit:

I.

The Honorable Court erred in exempting respondent from

paying taxes . Respondent is not exempt to pay taxes pursuant
to Section 27 (C) of the National Internal Revenue Code of
1997, as amended.

II.

The Honorable Court erred when it did not rule whether

respondent failed to comply with the requisite that the income
from which taxes were withheld was included as part of its
gross income.

Ill.

The Honorable Court erred when it did not rule that respondent
failed to choose the option to refund its excess unutilized
creditable withholding tax in its 2008 ITR resulting to the
automatic carry-over of any excess tax credit for taxable year
2008.

The Court's Ruling

Respondent is not an exempt

corporation under Section 27(C) of the
1997 Tax Code.

In support of its position, petitioner argues that there is nothing in Section

27(C) of the National Internal Revenue Code of 1997, as amended (1997 Tax Code)
which states that the respondent is among those who are exempt from the payment
of income tax since only the Government Service Insurance System (GSIS), Social
Security System (SSS), Philippine Charity Sweepstakes Office (PCSO), and
Philippine Health Insurance Corporation (PHIC) are listed as exempt under the 1997
Tax Code. Petitioner mentions the withdrawal of the tax-exempt status of Philippine
Amusement and Gaming Corporation (PAGCOR) under Republic Act No. 9337, and p
DECISION
CTA EB No. 1123 {CTA Case No. 8140)
Page 23 of31
)(-----------------------------------------------)(

the addition of Local Water Districts (LWDs) as a tax-exempt corporation under

Republic Act No. 10026.

In other words, petitioner argues that only GSIS, SSS, PHIC, PAGCOR and
LWDs are listed under the law as a tax exempt corporation . Hence, respondent is
not among those who enjoy such similar exemption and this is consistent with the
principle in statutory construction expressio unius est exc/usio alterius.

We agree with the petitioner on this point. It is an elementary principle that

taxation is the rule and exemption is the exception.12 The burden of proof rests upon
the party claiming exemption to prove that it is, in fact, covered by the exemption so
claimed. 13 As a rule, tax exemptions are construed strongly against the claimant.
Exemptions must be shown to exist clearly and categorically and supported by a
clear legal provision.14

In the case at bar, nowhere in Section 27(C) of the 1997 Tax Code as
amended by Republic Act Nos. 9337 and 10026 where respondent is listed as
exempt from corporate income tax. This is founded on a basic precept of statutory
construction that the express mention of one person, thing, or act, or consequence
excludes all others as expressed in the familiar maxim expressio unius est exclusio
aJterius.1s

Ergo, the express mention of the GOCCs exempted from payment of

corporate income tax excludes all others. Not being excluded, respondent Bases
Conversion Development Authority must be regarded as coming within the purview
of the general ru le that GOCCs shall pay corporate income tax, expressed in the
maxim exceptio firmat regulam in casibus non exceptis [the express mention of
exceptions operates to exclude other exceptions ].16

However, the sale of the ~~Expanded

Big Delta Lots" is exempt from tax
under Republic Act No. 7227, as
amended by Republic Act No. 7917.

Petitioner argues that respondent's invocation of Republic Act No. 7227 must
fail. She claims that Sec. 27(C) of the 1997 Tax Code as further amended by
Republic Act Nos. 9337 and 10026 cannot be overridden by Republic Act No. 7227 ~

12
National Power Corporation v. Province of I sabela, G.R. No. 165827, June 16, 2006, 491 SCRA
169-184, 180.
13
Id.
14
Philip pine Amusement and Gaming Corporation v. The Bureau of Internal Revenue, G.R. No.
172087, March 15, 2011, 645 SCRA 338-366, 355.
15 ld.
16
Id . South Afr ican Ai!Ways v. Commissioner of I nternal Revenue, G.R. No . 180356, Fe bruary 16,
2010, 612 SCRA 665-684.
DEaSION
CTA EB No. 1123 ( CTA Case No. 8140)
Page24 of31
)(-----------------------------------------------)(

for the reason that a later law repeals an earlier one because it is the later legislative
will.

Respondent however took a different stance by arguing that although Section

27(C) does not make mention of its tax-exempt status, it is non sequitur that
Republic Act No. 7227 as amended by Republic Act No. 7917 was repealed either.
Moreover, the same 1997 Tax Code under Section 32(8)(7)(b) excludes from the
gross income and exempts from income tax, the income derived from the discharge
of any essential governmental functions accruing to the Government of the
Philippines or to any political subdivisions. Respondent also cited Section 2.57.5 of
Revenue Regulations No. 2-98 which provides that withholding of CWT should not
apply to income payments made to National Government and its instrumentalities.

As likewise mentioned in its comment, Section 8 of Republic Act No. 7227, as

amended by Republic Act No. 7917 clearly provides that the proceeds from
respondent's sale of government lands and other properties are exempt from all
forms of taxes and fees. Respondent hastened to add that under Administrative
Order No. 236, the proceeds from the sale of government lands and other properties
falling under Republic Act No. 7227, as amended are government funds and shall be
remitted to the National Treasury and eventually accrue to the General Fund of the
Government; that funds are automatically appropriated for the budget requirement of
the several beneficiary-agencies identified under Republic Act No. 7917.

We agree with the respondent.

Pertinent to the resolution of this issue is Republic Act No. 7227, as amended
by Republic Act No. 7917 of which Section 1 provides:

SECTION 1. Paragraph (d), Section 8 of Republic Act

No. 7227, otherwise known as the Bases Conversion
Development Act of 1992, is hereby amended to read as
follows:

(d) A proposed 30.15 hectares as relocation site for

families to be affected by circumferential road 5 and radial road
4 construction: Provided, further, That the boundaries and
technical descriptions of these exempt areas shall be
determined by an actual ground survey.

The President is hereby authorized to sell the above

lands, in whole or in part, which are hereby declared
alienable and disposable, pursuant to the provisions of
existing laws and regulations governing sales of
government properties: Provided, That no sale or disposition
of such lands will be undertaken until a development plan yv
DECISION
CTA EB No. 1123 {CTA case No. 8140)
Page 25 of31
)(-----------------------------------------------)(

embodying projects for conversion shall be approved by the

President in accordance with paragraph (b), Section 4 of this
Act. However, six (6) months after approval of this Act, the
President shall authorize the Conversion Authority to
dispose of certain areas in Fort Bonifacio and Villamor as
the latter so determines. The Conversion Authority shall
provide the President a report on any such disposition or
plan for disposition within one (1) month from such
disposition or preparation of such plan. The proceeds from
any sale, after deducting all expenses related to the sale of
portions of Metro Manila military camps as authorized under
this Act, shall be deemed appropriated for the purposes
herein provided for the following purposes with their
corresponding percent shares of proceeds: xxx

The provisions of law to the contrary notwithstanding,

the proceeds of the sale thereof shall not be diminished
and , therefor, exempt from all forms of taxes and fees. (With
emphasis)

By its very terms, proceeds of the sale of the respondent of portion of camps
located in Metro Manila are exempt from all forms of taxes. To tax the proceeds of
the sale would be to tax an appropriation made by law, a power that the
Commissioner of Internal Revenue does not haveY The sale is in the nature of
an obligation imposed by law in order to fulfill a public purpose.1a Thus, we
affirm the Court in Division when it explicitly held:

Thus, petitioner [herein respondent] is obliged to pay

corporate income tax under either the 1977 NIRC or the NIRC
of 1997, as amended by RA No. 9337, albeit petitioner's
[respondent's] income tax liability is limited to its taxable
income only. Since RA No. 7227, as amended by RA No. 7917
exempts the proceeds from the sale of portions of Metro Manila
military camps from all forms of taxes, which necessarily
includes income tax, said proceeds do not form part of
petitioner's taxable income. The proceeds of the sale of
portions of Metro Manila military camps, not being part of
petitioner's taxable income, are exempt from income tax and
consequently, from CWT. To emphasize, while petitioner is
not entitled to exemption from income tax, the proceeds
from the sale of portions of Metro Manila military camps
are tax exempt. (With Emphasis) V
17
Fort Bonifacio Development Corporation v. Commissioner of Internal Revenue, G.R. Nos.
164155 & 175543, February 25, 2013, 691 SCRA 523, 529.
18
Id. at 530.
DECISION
CTA EB No. 1123 {CTA Case No. 8140)
Page26 of31
)(-----------------------------------------------)(

Notably, if we sustain petitioner's barren assertions that respondent

should be taxed on its sale of the Expanded Big Delta Lots, such payment
would in effect have resulted in diminishing the proceeds of the sale that the
Republic received and turned over to the respondent to capitalize it.19 Under
Section 8 of Republic Act No. 7227, it is clear that the capital of the respondent,
which shall come from the sales proceeds and/or transfers of certain Metro Manila
military camps, was not intended to be diminished by the payment of tax.2o To
reiterate, Section 1 of Republic Act No. 7917 clearly exempted the proceeds of the
sale of the Fort Bonifacio land from all forms of taxes, including income taxes. This is
further supported by Administrative Order No. 236 entitled, "Prescribing Rules and
Regulations on the Collection, Remittance and Utilization of Sales Proceeds Under
Republic Act No. 7227, as amended by Republic Act No. 7917," which reads:

The proceeds from the sale of government lands and

other properties pursuant to Section 8 of RA 7227 as amended
by RA 7917, are hereby declared government funds and shall
be remitted to the National Treasury and shall accrue to the
General Fund of the Government.

Had Congress intended to repeal Republic Act 7227, as amended by

Republic Act No. 7917, it could have easily done so. It is a well settled rule of
statutory construction that repeals by implication are not favored . In order to effect a
repeal by implication, the later statute must be so irreconcilably inconsistent and
repugnant with the existing law that they cannot be made to reconcile and stand
together. The clearest case possible must be made before inference of implied
repeal may be drawn, for inconsistency is never presumed. There must be a
showing of repugnance clear and convincing in character. The language used in the
later statute must be such as to render it irreconcilable with what had been formerly
enacted. An inconsistency that falls short of that standard does not suffice.
Moreover, the failure to add a specific repealing clause indicates that the intent was f<-
19
Id. Section 8. Funding Scheme. - The capital of the Coversion Authority shall come
from the sales proceeds and/or transfers of certain Metro Manila military camps,
including all lands covered by Proclamation No. 423, series of 1957, commonly known
as Fort Bonifacio and Villamor (Nichols) Air Base, namely: x x x

xxxx

The President is hereby authorized to sell the above lands, in whole or in part, which are hereby
declared alienable and disposa ble pursuant to the provisions of existing laws and regulations
governing sa les of government properties: Provided, That no sale or disposition of such lands will
be undertaken until a development plan embodying projects for conversion shall be approved by
the President in accordance with paragraph (b), Section 4 of this Act. However, six (6)
months after approval of this Act, the President shall authorize the Conversion
Authority to dispose of certain areas in Fort Bonifacio and Villamor as the latter so
determines. The Conversion Authority shall provide the President a report on any such
disposition or plan for disposition within one (1) month from such disposition or preparation of
such plan. The proceeds from any sale, after deducting all expenses related to the sale,
of portions of Metro Manila military camps as authorized under this Act, shall be used
for the following purposes with their corresponding percent shares of proceeds: x x x
20 Id.
DECISION
CTA EB No. 1123 (CTA Case No. 8140)
Page27of31
)(-----------------------------------------------)(

not to repeal any existing law, unless an irreconcilable inconsistency and

repugnancy exist in terms of the new and old laws.21

In addition, between Republic Act No. 7227, as amended by Republic Act No.
7917, one hand, which is a special law governing the Bases Conversion and
Development Authority, which took effect in 1995; and the 1997 Tax Code, on the
other, which is the general law on national internal revenue taxes , that took effect on
January 1, 1998, the former prevails. 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.22

Therefore, consistent with the ruling of the Supreme Court in Fort Bonifacio
Development Corporation v. Commissioner of Internal Revenue,23 it is certain from
the respondent's charter, particularly in Section 8 of Republic Act No. 7227 that the
capital of BCDA, which shall come from the sales proceeds and transfers of certain
Metro Manila military camps are tax exempt.

The sale is an income derived by the

Government in the exercise of
governmental functions; hence,
excluded from gross income.
Moreover, Section 76 of the 1997 Tax
Code is inapplicable insofar as the
respondent's sale of the Expanded Big
Delta Lots is concerned.

Petitioner claims that in a claim for refund of CWT, respondent must prove
that the income from which taxes were withheld was included as part of the gross
income. Petitioner avers that the certificates of CWT, payment forms and deposit
slips are not sufficient to justify its refund claim-respondent must indicate in its
return that the income received must be declared as part of respondent's gross
income.

Petitioner further argues that the Court in Division did not rule on the issue
concerning respondent's failure to choose an option to refund or for issuance of tax })<-

21
Remman Enterprises, Inc., eta/. v. Professional Regulatory Board of Real Estate Service, eta/.,
G.R. No. 197676, February 4, 2014.
22
Commissioner of Internal Revenue v. Philippine Airlines, Inc., G.R. No. 180066, July 7, 2009,
592 SCRA 237-268, 259-260.
23
Supra at note 17.
DECISION
CTA EB No. 1123 {CTA Case No. 8140)
Page 2 B of31
)(-----------------------------------------------)(

credit certificate under Section 76 of the 1997 Tax Code. Petitioner hinges on the
fact that the act of the respondent in including its 2008 excess credit to its 2009
income tax return only shows that respondent already opted to carry over its
unutilized creditable withholding tax. Said carry-over could no longer be converted
into a claim for tax refund because of the irrevocability rule provided in Section 76 of
the 1997 Tax Code. Therefore, respondent is already barred from claiming the
refund .

Petitioner is mistaken.

Section 32 of the 1997 Tax Code, provides:

Sec. 32. Gross Income. -

xxxx

(B) Exclusions from Gross Income. - The following

items shall not be included in the gross income and shall be
exempt from taxation under this Title:

xxxx

(7) Miscellaneous Items.-

xxxx

(b) Income Derived by the Government or its

Political Subdivisions. - Income derived by any public
utility or from the exercise of any essential
governmental functions accruing to the Government
of the Philippines or to any political subdivisions
thereof. (Emphasis added)

xxxx

Further, under Sec. 2.57.5 of Revenue Regulations No. 2-98, the creditable
withholding tax system does not apply to the National Government and its
instrumentalities, which provides:

SECTION 2.57.5. Exemption from Withholding. - The

withholding of creditable withholding tax prescribed in these
Regulations shall not apply to income payments made to the
following: r
DEaSJON
CTA EB No. 1123 { CTA Case No. 8140)
Page30 of31
)(-----------------------------------------------)(

With all the foregoing discussions, the Court will no longer belabor on the
remaining arguments raised therein .

WHEREFORE, the instant petition is DENIED for lack of merit. Accordingly,

the assailed Decision and Resolution on the Motion for Reconsideration in CTA
Case No. 8140 are AFFIRMED.

SO ORDERED.

~ C-.QY-~, ~ .
00ANITO C. CASTANEDA, Jff.
Associate Justice

WE CONCUR:

ROMAN G. DEL ROSARIO

Presiding Justice
,.
LOVELL W. BAUTISTA

~
CAESAR A. CASANOVA
Associate Justice

~ N. M~,C~ ~ /- -a.L.-/ft
CIELITO N. MINDARO-GRULLA AMELIA R. COTANdCO-MANALASTAS
Associate Justice Associate Justice

Q:N. ~ ~ L_·
MA. BELEN M. RINGPIS-LIBAN
Associate Justice
DECISION
CTA EB No. 1123 {CTA case No. 8140)
Page 31 of31
)(-----------------------------------------------)(

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the
above Decision has been reached in consultation with the members of the Court en
bane before the case was assigned to the writer of the opinion of the Court.