Garcia v. Office of the Ombudsman
REITERATIONFacts
The Antecedents: Petitioner Azucena B. Garcia, Department Manager III for administration of the National Development Company (NDC), availed herself of an early retirement program in March 1995 under Republic Act No. 1616. NDC approved her application and paid her retirement benefits. However, private respondents, NDC officials, deducted withholding tax from the portion of her provident fund benefits exceeding her personal contribution. Procedural History: Petitioner protested the deduction and requested a refund, claiming the benefits were tax-exempt. Upon refusal, she filed a complaint with the Office of the Ombudsman for violation of Section 3(e) of Republic Act No. 3019 (Anti-Graft and Corrupt Practices Act). On September 30, 1996, the Ombudsman dismissed her complaint. The Petition: Petitioner filed a petition for certiorari with the Supreme Court, seeking to annul the Ombudsman's resolution, arguing that the Ombudsman acted with grave abuse of discretion in dismissing her complaint.
Issue(s)
Whether or not the respondent Ombudsman acted with grave abuse of discretion in dismissing petitioner's complaint for violation of Section 3(e) of Republic Act No. 3019, as amended, against private respondents for deducting withholding taxes on the amount of provident fund benefits petitioner received over and above her personal contribution.
Ruling
The Court denies the petition for review on certiorari and affirms the resolution of the Ombudsman dismissing petitioner's complaint.
Ratio Decidendi
On the issue of whether the Ombudsman acted with grave abuse of discretion in dismissing the complaint: The Court ruled that the Ombudsman did not act with grave abuse of discretion. The elements of violation of Section 3(e) of Republic Act No. 3019 require that the public officer causes undue injury to any party, and that such injury is caused by giving unwarranted benefits, advantage or preference, or that the public officer acted with manifest partiality, evident bad faith or gross inexcusable negligence. In this case, the private respondents merely complied with their duty under the law as guided by the prevailing opinion of the Bureau of Internal Revenue (BIR) at the time, which stated that provident fund benefits above the employee's personal contribution were taxable. To have exempted the petitioner from withholding tax would have subjected the private respondents to liability. They could not have foreseen a subsequent change in the BIR's opinion. Therefore, the petitioner failed to show actual damage, nor did she demonstrate that the private respondents acted with evident bad faith or gross inexcusable negligence. The subsequent change in the BIR's opinion, while favoring the petitioner, does not retroactively render the private respondents' prior actions, made in good faith reliance on the prevailing legal opinion, as constituting bad faith or gross negligence. Consequently, the Ombudsman correctly dismissed the complaint as the elements of the offense were not met.
Main Doctrine
Public officers who deduct withholding taxes from provident fund benefits, acting in compliance with the prevailing opinion of the Bureau of Internal Revenue at the time, cannot be held liable for violation of Section 3(e) of Republic Act No. 3019 for causing undue injury or acting with manifest partiality, evident bad faith, or gross inexcusable negligence, even if the said opinion is later reversed.