PHIL PHOSPHATE FERTILIZER V. CIR (REMEDIAL, TAX)

If the State expects its taxpayers to observe fairness and honesty in paying their taxes, so must it apply the same standards against itself in refunding excessive payments. When it is undisputed that a taxpayer is entitled to a refund, the State should not invoke technicalities to keep money not belonging to it. No one, not even the State, should enrich oneself at the expense of another.

Sec. 1, Rule 37 of the Rules of Court provides as follows:

SECTION 1. Grounds of and period for filing motion for new trial or reconsideration - Within the period for taking an appeal, the aggrieved party may move for the trial court to set aside the judgment or final order and grant a new trial for one or more of the following causes materially affecting the substantial rights of said party:

1. Fraud, accident, mistake, or excusable negligence which ordinary prudence could not have guarded against and by reason of which such aggrieved party has probably been impaired in his rights; or
2. Newly discovered evidence, which could not, with reasonable diligence, have discovered and produced at the trial, and which if presented would probably alter the result.

It is true that petitioner could not move for new trial on the basis of newly discovered evidence because in order to have a new trial on the basis of newly discovered evidence, it must be proved that:

1. the evidence was discovered after the trial;
2. such evidence could not have been discovered and produced at the trial with reasonable diligence;
3. it is material, not merely cumulative, corroborative, or impeaching; and
4. it is of such weight that if admitted, will probably change the judgment.

This does not mean however, that petitioner is altogether barred from having a new trial. As pointed out by Judge Acosta, the reasons put forth by petitioner should fall under mistake or excusable negligence.

The mistake that is allowed in Rule 37 is one which ordinary prudence could not have guarded against. Negligence to be excusable must also be one which ordinary diligence and prudence could not have guarded against and by reason of which the rights of an aggrieved party have probably been impaired. the test of excusable negligence is whether a party has acted with ordinary prudence while transacting important business.

In this case, it cannot be said that petitioner did not act with ordinary prudence in claiming its refund with the CTA, in light of its previous cases with CTA which did not require invoices and the non-mandatory nature of the CTA circular.

It is borne by the records however that in its first motion for reconsideration duly filed on time, petitioner had already prayed that it be allowed to present and offer evidence deemed lacking by CTA in its Decision of 11 August 1998. Thus, while it named its pleading as a Motion for New Trial only in its motion dated 25 January 1999, petitioner should not be deemed to have moved for new trial only at such time.