Advertisement

SC junks order on oil companies to open book of accounts

The Supreme Court stopped a Manila City regional trial court from compelling the country’s three major oil companies to subject their book of accounts for examination amid allegations of monopoly, predatory pricing and cartelization.

The court, in a 27-page en banc decision authored by Associate Justice Ramon Paul Hernando, unanimously resolved to reverse the order issued by the Manila City RTC in 2009 directing the Bureau of Customs, Bureau of Internal Revenue and the Commission on Audit to examine the book of accounts of Pilipinas Shell Petroleum Corp., Caltex Philippines Inc. and Petron Corp..

It also made permanent the temporary restraining order it issued on Aug. 4, 2009, enjoining the implementation of the orders of the Manila RTC and accordingly dismissed the petition for declaratory relief by the Social Justice Society.

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

The government agencies refused to comply with the order of the lower court, saying it was beyond their mandates to conduct audit relative to anti-trust violations.

The SC’s 15-member bench, in reversing the lower court’s decision, ruled that it is the Department of Energy-Department of Justice Joint Task Force that has the sole power and authority to monitor, investigate and endorse the filing of complaint against oil companies.

The RTC 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 or the Downstream Oil Industry Deregulation Act of 1998.

Members of the joint task force said there was no violation of the provisions of RA 8479 committed by the oil firms.

“And 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 ruled.

“Clearly, the RTC not only failed to uphold the law but worse, he contravened the law,” the tribunal said.

The SC said 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.

It said the oil firms are not public entities nor considered as non-governmental entities receiving financial aid from the government to allow scrutiny by COA.

The SC said the agencies are not authorized to examine books, paper, record or other data of taxpayers but only to ascertain 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.

It said while the BOC is authorized to audit or examine all books, records and documents of importers, there are no taxes or duties involved in the case.

Topics: Supreme Court , Manila City regional trial court , book of accounts
COMMENT DISCLAIMER: Reader comments posted on this Web site are not in any way endorsed by Manila Standard. Comments are views by manilastandard.net readers who exercise their right to free expression and they do not necessarily represent or reflect the position or viewpoint of manilastandard.net. While reserving this publication’s right to delete comments that are deemed offensive, indecent or inconsistent with Manila Standard editorial standards, Manila Standard may not be held liable for any false information posted by readers in this comments section.
AdvertisementGMA-Working Pillars of the House
Advertisement