POWER SECTOR ASSETS AND LIABILITIES MANAGEMENT CORPORATION VS. CIR, GR NO. 198146 DATED AUGUST 8, 20 - POWER SECTOR ASSETS AND LIABILITIES MANAGEMENT

POWER SECTOR ASSETS AND LIABILITIES MANAGEMENT CORPORATION VS. CIR, GR NO. 198146 DATED AUGUST 8, 20

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POWER SECTOR ASSETS AND LIABILITIES MANAGEMENT CORPORATION VS. CIR, GR NO. 198146 DATED AUGUST 8, 2017 G.R. No. 198146 POWER SECTOR ASSETS AND LIABILITIES MANAGEMENT CORPORATION, Petitioner, vs. COMMISSIONER OF INTERNAL REVENUE, Respondent D E C I S I O N CARPIO, J.: The Case This petition for review 1 assails the 27 September 2010 Decision 2 and the 3 August 2011 Resolution 3 of the Court of Appeals in CA-G.R. SP No. 108156. The Court of Appeals nullified the Decisions dated 13 March 2008 and 14 January 2009 of the Secretary of Justice in OSJ Case No. 2007- 3 for lack of jurisdiction. The Facts Petitioner Power Sector Assets and Liabilities Management Corporation (PSALM) is a government-owned and controlled corporation created under Republic Act No. 9136 (RA 9136), also known as the Electric Power Industry Reform Act of 2001 (EPIRA). 4 Section 50 of RA 9136 states that the principal purpose of PSALM is to manage the orderly sale, disposition, and privatization of the National Power Corporation (NPC) generation assets, real estate and other disposable assets, and Independent Power Producer (IPP) contracts with the objective of liquidating all NPC financial obligations and stranded contract costs in an optimal manner. PSALM conducted public biddings for the privatization of the Pantabangan-Masiway Hydroelectric Power Plant (Pantabangan-Masiway Plant) and Magat Hydroelectric Power Plant (Magat Plant) on 8 September 2006 and 14 December 2006, respectively. First Gen Hydropower Corporation with its $129 Million bid and SN Aboitiz Power Corporation with its $530 Million bid were the winning bidders for the PantabanganMasiway Plant and Magat Plant, respectively. On 28 August 2007, the NPC received a letter 5 dated 14 August 2007 from the Bureau of Internal Revenue (BIR) demanding immediate payment of ₱3,813,080,472 6 deficiency value-added tax (VAT) for the sale of the Pantabangan-Masiway Plant and Magat Plant. The NPC indorsed BIR's demand letter to PSALM. On 30 August 2007, the BIR, NPC, and PSALM executed a Memorandum of Agreement (MOA), 7 wherein they agreed that: A) NPC/PSALM shall remit under protest to the BIR the amount of Php 3,813,080,472.00, representing basic VAT as shown in the BIR letter dated August 14, 2007, upon execution of this Memorandum of Agreement (MOA). B) This remittance shall be without prejudice to the outcome of the resolution of the Issues before the appropriate courts or body. 1
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C) NPC/PSALM and BIR mutually undertake to seek final resolution of the Issues by the appropriate courts or body. D) BIR shall waive any and all interests and surcharges on the aforesaid BIR letter, except when the case is elevated by the BIR before an appellate court. E) Nothing contained in this MOA shall be claimed or construed to be an admission against interest as to any party or evidence of any liability or wrongdoing whatsoever nor an abandonment of any position taken by NPC/PSALM in connection with the Issues.
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