THIRD DIVISION

[G.R. No. 197151. October 22, 2012.]

SM LAND, INC. (Formerly Shoemart, Inc.) and WATSONS

PERSONAL CARE STORES, PHILS., INC., petitioners, vs. CITY
OF MANILA, LIBERTY TOLEDO, in her official capacity as the
City Treasurer of Manila and JOSEPH SANTIAGO, in his official
capacity as the Chief of License Division of the City of Manila,
respondents.

DECISION

PERALTA, J : p

Before the Court is a petition for review on certiorari under Rule 45 of the
Rules of Court seeking to reverse and set aside the Decision 1(1) and Resolution
2(2) of the Court of Tax Appeals (CTA) En Banc, dated December 17, 2010 and
May 27, 2011, respectively, in CTA EB No. 548. The assailed Decision affirmed
the July 3, 2009 Decision 3(3) and September 30, 2009 Resolution 4(4) of the CTA
Second Division in CTA AC No. 51, while the questioned Resolution denied
herein petitioners' Motion for Reconsideration. TDcHCa

The factual and procedural antecedents of the case are as follows:

On the strength of the provisions of Tax Ordinance Nos. 7988 and 8011,
which amended Ordinance No. 7794, also known as the Revenue Code of Manila,
herein respondent City of Manila assessed herein petitioners, together with their
other sister companies, increased rates of business taxes for the year 2003 and the
first to third quarters of 2004.

Petitioners and their sister companies paid the additional taxes under
protest.

Subsequently, petitioners and their sister companies claimed with herein

respondent City Treasurer of Manila a credit or refund of the increased business
taxes which they paid for the period abovementioned. However, the City Treasurer
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 denied their claim.

Aggrieved, petitioners and their sister companies filed with the Regional
Trial Court (RTC) of Pasay City a Complaint for Refund and/or Issuance of Tax
Credit of Taxes Illegally Collected. 5(5)

On July 10, 2007, the RTC rendered a summary judgment in favor of herein
petitioners, disposing as follows:

WHEREFORE, this Court renders judgment in plaintiffs' favor and

directs the defendants to grant a refund/tax credit:

(a) To Plaintiff SM Mart, Inc. —

i. The amount of P3,543,318.97 representing

overpayment of increased local business taxes under Sections 15, 16,
17, 18, and 19, under the rates imposed by Ordinance Nos. 7988 and
8011, and

ii. The amount of P17,519,133.16 representing payment of

the Section 21 tax;

(b) To Plaintiff SM Prime Holdings, Inc. —

i. The amount of P667,377.21 representing overpayment

of increased local business taxes under Sections 15, 16, 17, 18, and
19, under the rates imposed by Ordinance Nos. 7988 and 8011, and
ESacHC

ii. The amount of P6,711,068.38 representing payment of

the Section 21 tax;

(c) To Plaintiff Shoemart, Inc. —

i. The amount of P691,887.07 representing overpayment

of increased local business taxes under Section 17, under the rates
imposed by Ordinance Nos. 7988 and 8011, and

ii. The amount of P2,954,520.24 representing payment of

the Section 21 tax;

(d) To Plaintiff Star Appliances Center —

i. The amount of P700,974.98 representing overpayment

of increased local business taxes under Section 17, under the rates
imposed by Ordinance Nos. 7988 and 8011, and

ii. The amount of P3,459,812.76 representing payment of

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 the Section 21 tax;

(e) To Plaintiff Supervalue, Inc. —

i. The amount of P1,360,984.69 representing

overpayment of increased local business taxes under Sections 17 and
18, under the rates imposed by Ordinance Nos. 7988 and 8011, and

ii. The amount of P2,774,859.82 representing payment of

the Section 21 tax;

(f) To Plaintiff Ace Hardware Philippines, Inc. —

i. The amount of P202,175.67 representing overpayment

of increased local business taxes under Section 17, under the rates
imposed by Ordinance Nos. 7988 and 8011, and

ii. The amount of P988,347.16 representing payment of

the Section 21 tax; CTEDSI

(g) To Plaintiff Watsons Personal Care Stores Philippines, Inc. —

i. The amount of P214,667.73 representing overpayment

of increased local business taxes under Section 17, under the rates
imposed by Ordinance Nos. 7988 and 8011, and

ii. The amount of P636,857.15 representing payment of

the Section 21 tax;

(h) To Plaintiff Jollimart Phils., Corp. —

i. The amount of P98,223.61 representing overpayment of

increased local business taxes under Section 17, under the rates
imposed by Ordinance Nos. 7988 and 8011, and

ii. The amount of P296,178.13 representing payment of

the Section 21 tax;

(i) To Plaintiff Surplus Marketing Corporation —

i. The amount of P84,494.76 representing overpayment of

increased local business taxes under Section 17, under the rates
imposed by Ordinance Nos. 7988 and 8011, and

ii. The amount of P399,942.81 representing payment of

the Section 21 tax;

(j) To Plaintiff Signature Lines —

i. The amount of P49,566.91 representing overpayment of

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 increased local business taxes under Section 17, under the rates
imposed by Ordinance Nos. 7988 and 8011, and

ii. The amount of P222,565.79 representing payment of

the Section 21 tax.

No Costs. ScCIaA

SO ORDERED. 6(6)

The RTC held that Tax Ordinance Nos. 7988 and 8011, which were the
bases of the City of Manila in imposing the assailed additional business taxes on
petitioners and their co-plaintiffs, had already been declared null and void by this
Court in the case of Coca-Cola Bottlers Philippines, Inc. v. City of Manila. 7(7)
On this ground, the RTC ruled that respondents cannot use the assailed Ordinances
in imposing additional taxes on petitioners and their co-plaintiffs.

Respondents moved for reconsideration, but the RTC denied it in its Order
dated December 14, 2007.

After the CTA granted their request for extension of time, herein
respondents filed a petition for review with the tax court. 8(8) The case was raffled
to the Second Division of the said court.

On July 3, 2009, the CTA Second Division rendered its Decision, the
dispositive portion of which reads, thus:

WHEREFORE, premises considered, the instant Petition for

Review is hereby PARTIALLY GRANTED. The appealed Order dated
July 10, 2007 and Order dated December 14, 2007 of the Regional Trial
Court of Pasay City, Branch 115, in Civil Case No. 05-0051-CFM are
hereby MODIFIED. Accordingly, with the exception of Shoemart, Inc. and
Watsons Personal Care Stores, Phils., petitioners are hereby ORDERED to
REFUND the rest of the respondents, their erroneously paid local business
taxes for taxable year 2003 and for the first to third quarters of taxable year
2004 in the aggregate amount of THIRTY-NINE MILLION
SEVENTY-EIGHT THOUSAND NINE HUNDRED EIGHTY-EIGHT
PESOS AND 81/100 (P39,078,988.81), detailed as follows: 9(9) cIADaC

The CTA Second Division sustained the ruling of the RTC that Ordinance
Nos. 7988 and 8011 are null and void. Applying the doctrine of stare decisis, the
CTA Second Division held that the ruling in the Coca-Cola case cited by the RTC
is applicable in the present case as both cases involve substantially the same facts
and issues. The CTA Second Division, nonetheless, held that herein petitioners'
claims for tax refund should be denied because of their failure to comply with the
provisions of the Rules of Court requiring verification and submission of a
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 certificate of non-forum shopping. The CTA Second Division noted that
petitioners failed to attach to the complaint filed with the RTC their respective
Secretary's Certificates authorizing their supposed representative, a certain Atty.
Rex Enrico V. Cruz III (Atty. Cruz), to file the said complaint in their behalf. The
CTA also observed that in the Verification and Certification of Non-Forum
Shopping attached to the complaint, petitioner SM Land, Inc. was not included in
the list of corporations represented by the person who executed the said
Verification and Certification.

Petitioners filed a Motion for Partial Reconsideration. 10(10) Attached to

the said Motion was the Verification and Certification executed by Atty. Cruz as
the representative of petitioner SM Land, Inc. Also attached were petitioners'
Secretary's Certificates authorizing Atty. Cruz as their representative. The CTA
Second Division, however, denied the Motion for Partial Reconsideration in its
Resolution 11(11) dated September 30, 2009.

Aggrieved, petitioners filed a petition for review with the CTA En Banc,
contending that: (1) the CTA Second Division erred in holding that the 30-day
period provided by law within which to appeal decisions of the RTC to the CTA
may be extended; and (2) the CTA Second Division committed error in denying
herein petitioners' claim for tax refund on the ground that they violated the rules
on verification and certification of non-forum shopping.

On December 17, 2010, the CTA En Banc rendered its assailed Decision
affirming in toto the judgment of the CTA Second Division.

Petitioners' Motion for Reconsideration was subsequently denied by the

CTA En Banc in its Resolution dated May 27, 2011.

Hence, the present petition anchored on the following arguments:

A. SECTION 11, REPUBLIC ACT NO. 1125, AS AMENDED

BY REPUBLIC ACT NO. 9282, CLEARLY DID NOT INTEND FOR THE
THIRTY (30)-DAY PERIOD TO APPEAL DECISIONS OF THE
REGIONAL TRIAL COURT TO THE CTA TO BE EXTENDIBLE; AND
DcCHTa

B. ASSUMING HYPOTHETICALLY THAT THE CTA WAS

CORRECT IN GRANTING RESPONDENTS AN EXTENSION, THERE
WERE STILL COMPELLING REASONS TO JUSTIFY THE
RELAXATION OF THE RULES REQUIRING VERIFICATION AND
CERTIFICATION OF NON-FORUM SHOPPING. 12(12)

The Court finds the petition meritorious. Nonetheless, the Court does not
fully agree with petitioners' contentions.

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 In the first argument raised, the Court is not persuaded by petitioners'
insistence that the 30-day period to appeal decisions of the RTC to the CTA is
non-extendible.

Petitioners cited cases decided by this Court wherein it was held that the
30-day period within which to file an appeal with the CTA is jurisdictional and
non-extendible. However, these rulings had been superseded by this Court's
decision in the case of City of Manila v. Coca-Cola Bottlers, Philippines, Inc.,
13(13) as correctly cited by the CTA En Banc. Suffice it to say that this Court's
ruling in the said case is instructive, to wit:

xxx xxx xxx

The period to appeal the decision or ruling of the RTC to the CTA
via a Petition for Review, is specifically governed by Section 11 of Republic
Act No. 9282, and Section 3 (a), Rule 8 of the Revised Rules of the CTA.

Section 11 of Republic Act No. 9282 provides:

SEC. 11. Who May Appeal; Mode of Appeal; Effect of

Appeal. — Any party adversely affected by a decision, ruling or
inaction of the Commissioner of Internal Revenue, the
Commissioner of Customs, the Secretary of Finance, the Secretary of
Trade and Industry or the Secretary of Agriculture or the Central
Board of Assessment Appeals or the Regional Trial Courts may file
an Appeal with the CTA within thirty (30) days after the receipt of
such decision or ruling or after the expiration of the period fixed by
law for action as referred to in Section 7(a)(2) herein.

Appeal shall be made by filing a petition for review under a

procedure analogous to that provided for under Rule 42 of the 1997
Rules of Civil Procedure with the CTA within thirty (30) days from the
receipt of the decision or ruling or in the case of inaction as herein provided,
from the expiration of the period fixed by law to act thereon. . . . . (Emphasis
supplied.) SITCcE

Section 3(a), Rule 8 of the Revised Rules of the CTA states:

SEC. 3. Who may appeal; period to file petition. — (a)

A party adversely affected by a decision, ruling or the inaction of the
Commissioner of Internal Revenue on disputed assessments or
claims for refund of internal revenue taxes, or by a decision or ruling
of the Commissioner of Customs, the Secretary of Finance, the
Secretary of Trade and Industry, the Secretary of Agriculture, or a
Regional Trial Court in the exercise of its original jurisdiction may
appeal to the Court by petition for review filed within thirty days
after receipt of a copy of such decision or ruling, or expiration of the
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 period fixed by law for the Commissioner of Internal Revenue to act
on the disputed assessments. . . . . (Emphasis supplied.)

It is crystal clear from the afore-quoted provisions that to appeal an

adverse decision or ruling of the RTC to the CTA, the taxpayer must file a
Petition for Review with the CTA within 30 days from receipt of said
adverse decision or ruling of the RTC.

It is also true that the same provisions are silent as to whether such
30-day period can be extended or not. However, Section 11 of Republic Act
No. 9282 does state that the Petition for Review shall be filed with the CTA
following the procedure analogous to Rule 42 of the Revised Rules of
Civil Procedure. Section 1, Rule 42 of the Revised Rules of Civil Procedure
provides that the Petition for Review of an adverse judgment or final order
of the RTC must be filed with the Court of Appeals within: (1) the original
15-day period from receipt of the judgment or final order to be appealed; (2)
an extended period of 15 days from the lapse of the original period; and (3)
only for the most compelling reasons, another extended period not to
exceed 15 days from the lapse of the first extended period.

Following by analogy, Section 1, Rule 42 of the Revised Rules of

Civil Procedure, the 30-day original period for filing a Petition for Review
with the CTA under Section 11 of Republic Act No. 9282, as implemented
by Section 3 (a), Rule 8 of the Revised Rules of the CTA, may be extended
for a period of 15 days. No further extension shall be allowed thereafter,
except only for the most compelling reasons, in which case the extended
period shall not exceed 15 days. EHaASD

xxx xxx xxx 14(14)

Petitioners further contend that the Order of the CTA Second Division
granting petitioners' motion for extension to file their petition for review is invalid,
because at the time that the said motion was granted on March 4, 2008, this Court
has not yet promulgated its decision in the above-cited Coca-Cola case. It was
only on August 4, 2009 that this Court issued its decision in the said case and, that
petitioners reason out that the same is inapplicable to the instant case as the ruling
therein cannot be applied retroactively. Petitioners argue that, aside from the
Coca-Cola case, the CTA Second Division had no clear statutory authority or
jurisprudential basis in granting petitioners' motion for extension to file their
petition for review.

The Court does not agree.

At the time that the CTA Second Division granted petitioners' motion for
extension to file their petition for review, Republic Act 9282 15(15) (RA 9282),
which amended certain provisions of RA 1125, 16(16) were already in effect, 17(17)
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 and it is clearly provided therein that appeals from the RTC to the CTA shall
follow a procedure analogous to that provided for under Rule 42 of the Rules of
Court. Rule 42 of the said Rules, in turn, provides that the court may grant an
extension of fifteen (15) days within which to file the petition for review. Thus,
independent of the Coca-Cola case, the CTA Second Division had clear statutory
authority in granting petitioners' motion for extension. This Court's ruling in
Coca-Cola is a mere clarification and affirmation of what is provided for under the
provisions of RA 1125, as amended by RA 9282.

Nonetheless, the Court agrees with petitioners' contention in its second

argument that there are compelling reasons in the present case which justify the
relaxation of the rules on verification and certification of non-forum shopping.

It must be kept in mind that while the requirement of the certification of

non-forum shopping is mandatory, nonetheless, the requirements must not be
interpreted too literally and, thus, defeat the objective of preventing the
undesirable practice of forum shopping. 18(18) aCATSI

Time and again, this Court has held that rules of procedure are established
to secure substantial justice. 19(19) Being instruments for the speedy and efficient
administration of justice, they must be used to achieve such end, not to derail it.
20(20) In particular, when a strict and literal application of the rules on non-forum
shopping and verification will result in a patent denial of substantial justice, these
may be liberally construed. 21(21)

In the instant case, petitioner Watsons' procedural lapse was its belated
submission of a Secretary's Certificate authorizing Atty. Cruz as its representative.
On the other hand, petitioner SM Land, Inc.'s infraction was not only its late
submission of its Secretary's Certificate but also its failure to timely submit its
verification and certification of non-forum shopping.

In a number of cases, this Court has excused the belated filing of the
required verification and certification of non-forum shopping, citing that special
circumstances or compelling reasons make the strict application of the rule clearly
unjustified. 22(22) This Court ruled that substantial justice and the apparent merits
of the substantive aspect of the case are deemed special circumstances or
compelling reasons to relax the said rule.

In fact, this Court has held that even if there was complete non-compliance
with the rule on certification against forum shopping, the Court may still proceed
to decide the case on the merits, pursuant to its inherent power to suspend its own
rules on grounds, as stated above, of substantial justice and apparent merit of the
case. 23(23)

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 Thus, in Vda. de Formoso v. Philippine National Bank, 24(24) this Court
reiterated, in capsule form, the rule on non-compliance with the requirements on,
or submission of defective verification and certification of non-forum shopping, to
wit:

1) A distinction must be made between non-compliance with the

requirement on or submission of defective verification, and non-compliance
with the requirement on or submission of defective certification against
forum shopping.

2) As to verification, non-compliance therewith or a defect therein

does not necessarily render the pleading fatally defective. The Court may
order its submission or correction or act on the pleading if the attending
circumstances are such that strict compliance with the Rule may be
dispensed with in order that the ends of justice may be served thereby. cISAHT

3) Verification is deemed substantially complied with when one

who has ample knowledge to swear to the truth of the allegations in the
complaint or petition signs the verification, and when matters alleged in the
petition have been made in good faith or are true and correct.

4) As to certification against forum shopping, non-compliance

therewith or a defect therein, unlike in verification, is generally not
curable by its subsequent submission or correction thereof, unless there
is a need to relax the Rule on the ground of "substantial compliance" or
presence of "special circumstances or compelling reasons."

5) The certification against forum shopping must be signed by all

the plaintiffs or petitioners in a case; otherwise, those who did not sign will
be dropped as parties to the case. Under reasonable or justifiable
circumstances, however, as when all the plaintiffs or petitioners share a
common interest and invoke a common cause of action or defense, the
signature of only one of them in the certification against forum
shopping substantially complies with the Rule.

6) Finally, the certification against forum shopping must be

executed by the party-pleader, not by his counsel. If, however, for
reasonable or justifiable reasons, the party-pleader is unable to sign, he must
execute a Special Power of Attorney designating his counsel of record to
sign on his behalf. 25(25) (Emphasis supplied)

In the present case, there is no dispute that Tax Ordinance Nos. 7988 and
8011 have already been declared null and void by this Court as early as 2006 in
the case of Coca-Cola Bottlers Philippines, Inc. v. City of Manila. 26(26) The
nullity of the said Tax Ordinances is affirmed in the more recent case of City of
Manila v. Coca-Cola Bottlers Philippines, Inc., 27(27) as cited above. Thus, to the
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 mind of this Court, the unquestioned nullity of the above assailed Tax Ordinances
upon which petitioners were previously taxed, makes petitioners' claim for tax
refund clearly meritorious. In fact, petitioners' sister companies, which were their
co-plaintiffs in their Complaint filed with the RTC, were granted tax refund in
accordance with the judgments of the trial court, the CTA Second Division and the
CTA En Banc. On this basis, petitioners' meritorious claims are compelling
reasons to relax the rule on verification and certification of non-forum shopping.
ACIESH

In any case, it would bear to point out that petitioners and their co-plaintiffs
in the trial court filed their claim for tax refund as a collective group, because they
share a common interest and invoke a common cause of action. Hence, the
signature of the representative of the other co-plaintiffs may be considered as
substantial compliance with the rule on verification and certification of non-forum
shopping, consistent with this Court's pronouncement that when all the petitioners
share a common interest and invoke a common cause of action or defense, the
signature of only one of them in the certification against forum shopping
substantially complies with the rules. 28(28)

WHEREFORE, the instant petition is GRANTED. The Decision and

Resolution of the Court of Tax Appeals En Banc, dated December 17, 2010 and
May 27, 2011, respectively, in CTA EB No. 548, as well as the July 3, 2009
Decision and September 30, 2009 Resolution of the Court of Tax Appeals Second
Division in CTA AC No. 51, are REVERSED AND SET ASIDE and the Orders
of the Regional Trial Court of Pasay City, Branch 115, dated July 10, 2007 and
December 14, 2007, are REINSTATED.

SO ORDERED.

Velasco, Jr., Leonardo-de Castro, * (29)Abad and Mendoza, JJ., concur.

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