In Commission on Audit v. Pampilo, G.R. No. 188760/G.R. No. 189060/G.R. No. 189333 (30 June 2020), the Supreme Court ruled that the books of accounts of Pilipinas Shell Petroleum Corporation, Caltex Philippines, Inc., and Petron Corporation may not be opened and examined by the Commission on Audit (“COA”), Bureau of Internal Revenue (“BIR”), and Bureau of Customs (“BOC”) because said companies are beyond the audit jurisdiction of these three (3) agencies for the purposes of enforcing the anti-cartel provisions of the Downstream Oil Industry Deregulation Act.
As to the COA, the Supreme Court noted that said oil companies are not public entities nor are they nongovernmental entities receiving financial aid from the government. With respect to the BIR, its Commissioner is authorized to examine books, papers, records, 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 collecting 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 oil companies.
The Supreme Court also reiterated that it is the Joint Task Force of the Department of Energy and Department of Justice which has the sole power and authority to monitor, investigate, and endorse the filing of complaints regarding cartelization, if necessary, against oil companies.
Cruz Marcelo & Tenefrancia served as counsel for Pilipinas Shell Petroleum Corporation, with the team headed by Mr. John Jerico L. Balisnomo, Senior Partner and Head of the Litigation & Dispute Resolution Department.