Sep 10, 2020 @ 0:41

SC reverses Manila court’s order to open books of Shell, Caltex, Petron

The Supreme Court (SC) overturned a lower court’s decision directing the country’s three major oil companies to open their financial books for an investigation of alleged monopoly and “predatory pricing” practices.

In a 27-page decision dated July 30 penned by Associate Justice Ramon Paul Hernando and released Wednesday, the high court reversed the 2009 ruling of the Manila Regional Trial Court (RTC) asking the Bureau of Customs (BOC), Bureau of Internal Revenue (BIR) and the Commission on Audit (COA) to examine the book of accounts of Pilipinas Shell Petroleum Corporation, Caltex Philippines Inc., and Petron Corporation.

The SC made permanent the temporary restraining order (TRO) against the implementation of the orders of the Manila RTC and dismissed the petition filed by the civil advocacy group Social Justice Society (SJS).

The BOC, BIR and COA sought the issuance of the TRO to stop Manila RTC Branch 26 Presiding Judge Silvino Pampilo Jr. from enforcing its orders compelling them to form a panel of auditors to open and examine the books of the three oil firms.

The agencies say it was beyond their mandates to conduct audits relative to anti-trust violations.

The SC said it is the Department of Energy-Department of Justice (DOE-DOJ) Joint Task Force that has the sole power and authority to monitor, investigate, and endorse the filing of a complaint against oil companies.

The trial court initially resolved to refer the case to the DOE-DOJ Joint Task Force for investigation and determination of whether the Big 3 were in violation of Section 11 (Anti-Trust Safeguards) of Republic Act 8479 or the Downstream Oil Industry Deregulation Act of 1998.

“Considering that the remedy against cartelization is already provided by law, the public respondent trial court exceeded its jurisdiction and gravely abused its discretion when it ordered the COA, the BIR, and the BOC to open and examine the books of account of the Big 3 and allowed private respondent [lawyer Vladimir] Cabigao, a certified public accountant, to become part of the panel of examiners,” the SC said. “Clearly, the RTC not only failed to uphold the law but worse, he contravened the law”

The SC explained that it is beyond the mandates of COA, the BIR and the BOC to open and examine the books of accounts of the three oil firms which are not public entities nor considered as non-governmental entities receiving financial aid from the government.

The SC said while the BIR is authorized to examine books, paper, record, or other data of taxpayers, it is limited to the purpose of ascertaining the correctness of any return, or in making a return when none was made, or in determining the liability of any person for any internal revenue tax, or in collection such liability, or evaluating the person’s tax compliance.

The BOC, on the other hand, is authorized to audit or examine all books, records, and documents of importers necessary or relevant for the purpose of collecting the proper duties and taxes.

“Since there are no taxes or duties involved in this case, the BIR and the BOC likewise have no power and authority to open and examine the books of accounts of the Big 3,” the court ruled. (PNA)

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