[A.M. OCA IPI No. 12-202-CA-J. January 15, 2013]

EN BANC

RE: VERIFIED COMPLAINT OF AMA LAND, INC. AGAINST HON. DANTON Q. BUESER, HON. SESINANDO E. VILLON AND HON. RICARDO R. ROSARIO, ASSOCIATE JUSTICES OF THE COURT OF APPEALS.

SYLLABUS

of the Ruling of the Court

1. LEGAL ETHICS; JUSTICES; KNOWINGLY RENDERING UNJUST JUDGMENT AND OTHER MISCONDUCT, NOT PROVEN.In this case, AMALI had already filed a petition for review on certiorari challenging the questioned order of the respondent CA Justices, which is still pending final action by the Court. Consequently, a decision on the validity of the proceedings and propriety of the orders of the respondent CA Justices in this administrative proceeding would be premature. Besides, even if the subject decision or portions thereof turn out to be erroneous, administrative liability will only attach upon proof that the actions of the respondent CA Justices were motivated by bad faith, dishonesty or hatred, or attended by fraud or corruption, which were not sufficiently shown to exist in this case. Neither was bias as well as partially established. Acts or conduct of the judge clearly indicative of arbitrariness or prejudice must be clearly shown before he can be branded the stigma of being biased and partial. In the same vein, bad faith or malice cannot be inferred simply because the judgment or order is adverse to a party. Here, other than AMALI's bare and selfserving claim that respondent CA Justices "conspired with WWRAI's counsel in knowingly and in bad faith rendering an unjust judgment and in committing*** other misconduct," no act clearly indicative of bias and partially was alleged except for the claim that respondent CA Justices misapplied the law and jurisprudence. Thus, the presumption that the respondent judge has regularly performed his duties

shall prevail. Moreover, the matters raised are best addressed to the evaluation of the Court in the resolution of AMALI's petition for review on certiorari.

OPINION OF THE COURT

PERLAS-BERNABE, J.:

On October 2, 2012, AMA Land, Inc. (AMALI) filed an administrative complaint before the Office of the Court Administrator (OCA), charging respondent Honorable Court of Appeals (CA) Associate Justices Danton Q. Bueser, Sesinando E. Villon, and Ricardo R. Rosario (respondent CA Justices) with the following violations: (a) Section 8, Rule 140 of the Rules of Court, specifically for dishonesty and violation of the Anti-Graft and Corrupt Practices Law (Republic Act No. 3019), gross misconduct constituting violations of the Code of Judicial Conduct, and knowingly rendering an unjust judgment or order; and (b) pertinent provisions of the Code of Judicial Conduct1 and Canons of Judicial Ethics, for issuing the Decision2 dated June 14, 2012 in CAG.R. SP No. 118994 filed by Wack Wack Residents Associations, Inc. (WWRAI) enjoining AMALI from continuing with its project construction pending the determination of its petition for declaration of right of way against WWRAI before the Regional Trial Court of Pasig City, Branch 264 (RTC-Pasig).

The Facts

The controversy started in the mid-1990s when AMALI commenced the construction of a 37-floor commercial/residential building located at Epifanio Delos Santos Avenue (EDSA) corner Fordham Street, Wack-Wack Village, Mandaluyong City. After securing the required licenses and permits, AMALI notified WWRAI, the owner of Fordham Street, of its intention to use the said street as an access road and staging area of the project. Not having received any response, AMALI proceeded to temporarily enclose the job site and set up a field office along Fordham Street. However, WWRAI fenced off the said street which prompted AMALI to file before the RTC-Pasig a petition3 to enforce an easement of right of way pursuant to Article 649 in relation to Article 656 of the Civil Code. AMALI also prayed for a temporary restraining order (TRO) and a writ of preliminary mandatory injunction to enjoin WWRAI from demolishing and removing its temporary field office, fencing off Fordham Street, and preventing its

access to the construction site.

In its Answer, WWRAI averred that AMALI's project violated applicable zoning ordinances; the licenses and permits secured therefor were irregular and unlawful; the project is a nuisance; and EDSA should instead be utilized as the staging area of the project. Apart from praying for the dismissal of the complaint, WWRAI interposed a counterclaim for actual and exemplary damages, attorney's fees and costs of suit, and prayed for a TRO and writ of preliminary mandatory injunction for AMALI to immediately cease and desist with its project construction.

After hearing AMALI's application for injunctive relief, the RTC-Pasig, in its Order dated July 24, 1997, granted AMALI's prayer and directed WWRAI to allow the use of Fordham Street as a temporary easement of right of way. Apparently, WWRAI's application for TRO and/or writ of preliminary injunction in its counterclaim was not heard.

rehabilitation, which was later approved. Among the recommendations contained in the approved rehabilitation plan was the conversion of the use of the 37-floor commercial/residential tower (AMA Tower) to a 34-floor residential condominium. AMALI thus, prayed that the City of Mandaluyong be ordered to issue an amended building permit.

In a bid to stop AMALI from continuing with its project construction, WWRAI sought from the RTC-Pasig in January 2010, the hearing of its application for TRO and/or writ of preliminary mandatory injunction prayed for in its counterclaim. After due proceedings, the court denied the application in the Order dated October 28, 2010, and directed the building officials of Mandaluyong City to act on AMALI's application for permit to construct. The concerned officials, however, denied AMALI's application for an amended building permit on November 5, 2010 due to the expiration of the previously issued building permit, non-compliance with the prescribed height and open space limitations, and failure to submit the required new locational and barangay clearance. Notwithstanding, the RTC-Pasig refused to reconsider the denial of WWRAI's application for injunction.

On the other hand, the RTC-Muntinlupa, where AMALI's petition for corporate rehabilitation was pending, directed the Office of the Building Official and/or Office of the City Engineer of Mandaluyong City, in the Orders dated September 9, 2010 and November 12, 2010, to issue an amended building permit. Thus, Building Permit No. 08-2011-004810 was issued on February 4, 2011. But even with such issuance, the Building Official and/or Mandaluyong City Engineer filed a petition for certiorari before the CA (docketed as CA-G.R. SP No. 117037) assailing the above Orders which,

committed by a judge in the exercise of his adjudicative functions cannot be corrected through administrative proceedings, but should instead be assailed through available judicial remedies. 19 Disciplinary proceedings against judges do not complement, supplement or substitute judicial remedies and, thus, cannot be pursued simultaneously with the judicial remedies accorded to parties aggrieved by their erroneous orders or judgments.20

In Equitable PCI Bank, Inc. v. Laviña, 21 we ruled that resort to and exhaustion of judicial remedies and a final ruling on the matter, are prerequisites for the taking of appropriate measures against the judges concerned, whether of criminal, civil or administrative nature. If the assailed act is subsequently found and declared to be correct, there would be no occasion to proceed against him at all.

In this case AMALI, had already filed a petition for review on certiorari 22 challenging the questioned order of the respondent CA Justices, which is still pending final action by the Court. Consequently, a decision on the validity of the proceedings and propriety of the orders of the respondent CA Justices in this administrative proceeding would be premature. 23 Besides, even if the subject decision or portions thereof turn out to be erroneous, administrative liability will only attach upon proof that the actions of the respondent CA Justices were motivated by bad faith, dishonesty or hatred, or attended by fraud or corruption, 24 which were not sufficiently shown to exist in this case. Neither was bias as well as partiality established. Acts or conduct of the judge

19 Maylas, Jr. v. Sese, 529, Phil. 594, 597, (2006); Bautista v. Abdulwahid, A.M. OCA IPI No. 06-97- CA-J, May 2, 2006, 488 SCRA 428 434.

20 Monticalbo v. Maraya, Jr., A.M. No. RTJ-092197, April 13, 2011, 648 SCRA 573, 583, citing Flores v. Abesamis, 341 Phil. 299, 313 (1997).

21 530 Phil. 441, 452, 453 (2006).

22 But without filing a motion or reconsideration before the CA.

23 Salcedo v. Caguioa, 467 Phil. 20, 28 (2004). 24 Supra note 20 at 577.

clearly indicative of arbitrariness or prejudice must be clearly shown before he can be branded the stigma of being biased and partial. In the same vein, bad faith or malice cannot be inferred simply because the judgment or order is adverse to a party. 25 Here, other than AMALI's bare and selfserving claim that respondent CA Justices "conspired with WWRAI's counsel in knowingly and in bad faith rendering an unjust judgment and in committing *** other misconduct, "26 no act clearly indicative of bias and partiality was alleged except for the claim that respondent CA Justices misapplied the law and jurisprudence. Thus, the presumption that the respondent judge has regularly performed his duties shall prevail. Moreover, the matters raised are best addressed to the evaluation of the Court in the resolution of AMALI's petition for review on certiorari.

Finally, resort to administrative disciplinary action prior to the final resolution of the judicial issues involved constitutes an abuse of court processes that serves to disrupt rather than promote the orderly administration of justice and further clog the

courts' dockets. Those who seek relief from the courts must not be allowed to ignore basic legal rules and abuse court processes in their efforts to vindicate their rights.27

WHEREFORE, the Court DISMISSES the administrative complaint against the Honorable Court Appeals Associate Justices DANTON Q. BUESER, SESINANDO E. VILLON AND RICARDO R. ROSARIO for utter lack of merit; and CAUTIONS complainant AMA Land, Inc. against the filing of similar unfounded and baseless actions in the future WITH STERN WARNING that a repetition thereof shall be dealt with more severely.

SO ORDERED.

Sereno, CJ., Carpio, Velasco, Jr., Leonardo-de Castro, Peralta, Bersamin, del Castillo, Abad, Villarama, Jr., Perez, Mendoza, Reyes and Leonen, JJ., concur.

Brion, J., on leave

[G.R. No. 173425. January 22, 2013]

EN BANC

FORT BONIFACIO DEVELOPMENT CORPORATION, Petitioner, vs. COMMISSIONER OF INTERNAL REVENUE and REVENUE DISTRICT OFFICER, REVENUE DISTRICT No. 44, TAGUIG and PATEROS, BUREAU OF INTERNAL REVENUE, Respondents.

SYLLABUS

of the Ruling of the Court

1. TAXATION; VALUE ADDED TAX (VAT); TRANSITIONAL INPUT TAX CREDIT; PRIOR PAYMENT OF TAXES IS NOT NECESSARY BEFORE A TAXPAYER COULD AVAIL OF THE 8% TRANSITIONAL INPUT TAX CREDIT.[P]rior payment of taxes is not necessary before a taxpayer could avail of the 8% transitional input tax credit. This position is solidly supported by law and jurisprudence, viz: [S]ection 105 of the old National Internal Revenue Code (NIRC) clearly provides that for a taxpayer to avail of the 8% transitional input tax credit, all that is required from the taxpayer is to file a beginning inventory with the Bureau of Internal Revenue (BIR). It was never mentioned in Section 105 that prior payment of taxes is a requirement.* [S]ince the law (Section 105 of the NIRC) does not provide for prior payment of taxes, to require it now would be tantamount to judicial legislation which, to state the obvious, is not allowed.

**

**

REGISTERED TAXPAYERS, WHO DO NOT HAVE ANY OUTPUT TAX, IS NOT PROHIBITED; TRANSITIONAL INPUT TAX CREDITS AND CREDITABLE INPUT TAXES DISTINGUISED. - [S]ection 112 of the Tax Code speaks of zero-rated or effectively zero-rated sales. Notably, the transaction involved in this case is not zerorated or effectively zero-rated sales. [A] careful reading of Section 112 of the Tax Code would show that it allows either a cash refund or a tax credit for input VAT on zerorated or effectively zero-rated sales. Contrary to the Dissent, Section 112 of the Tax Code does not prohibit cash refund or tax credit of transitional input tax in the case of zero-rated or effectively zero-rated VAT registered taxpayers, who do not have any output VAT. The phrase "except transitional input tax" in Section 112 of the Tax Code was inserted to distinguish creditable input tax from transitional input tax credit. Transitional input tax credits are input taxes on a taxpayer's beginning inventory of goods, materials, and supplies equivalent to 8% (then 2%) or the actual VAT paid on such goods, materials and supplies, whichever is higher. It may only be availed of once by first-time VAT taxpayers. Creditable input taxes, on the other hand, are input taxes of VAT taxpayers in the course of their trade or business, which should be applied within two years after the close of the taxable quarter when the sales were made.