1. Vera vs. Fernandez 89 SCRA 199 Facts: A Motion for allowance
of claim and for payment of taxes was filed on june 3, 1969
representing the claim of indebtedness of the late Luis D. Tongoy
for deficiency of income taxes. The administrator opposed the
motion on the ground that the claim was barred under Section 5,
Rule 86 of the Rules of Court. Respondent judge Fernandez dismissed
the claim. On September 18, 1969, a motion for reconsideration was
filed, which was thereafter denied.
Issue: Whether the claim for the payment of taxes is barred
under Rule 86 of the Rules of Court
Held: No, the claim for the payment of taxes is not barred. In
the case of Commissioner of Internal Revenue vs. Ilagan Electric
& Ice Plant, it was held that the prescription of taxes are
governed by the NIRC and not by other provisions of law. Also, in
the case of Pineda vs. CFI of Tayabas, it was pointed out that the
court may direct the payment of taxes upon motion showing that the
taxes have been assessed against the estate. Claims for taxes may
be collected even after the estate has been distributed among the
heirs. The reason for the liberal treatment of claims for taxes as
exception from the statute of non-claims is that taxes are the
lifeblood of the Government and their prompt and certain
availability are imperious need. To safeguard the interest of the
people, neglect or omission to collect such should not be allowed
to detriment other people.
case 5 CIR v. CTA 234 SCRA 348
FACTS: A petition for review of the decision of the BIR denying
the tax refund of Citytrust was filed with the CTA. It was
submitted for decision based solely on the pleadings and evidence
submitted by Citytrust. CIR could not present any evidence by
reason of the repeated failure of the Tax Credit/Refund Division of
the BIR to transmit the records of the case, as well as the
investigation report thereon, to the Solicitor General. The CTA
rendered its decision ordering BIR to grant a refund to Citytrust
in the amount of P13,314,506.14. The CA affirmed the judgment of
the CTA.Issue: Whether or not Citytrust is entitled to a
refund.
HELD: It is a long and firmly settled rule of law that the
government is not bound by the errors committed by its agents. In
the performance of its government functions, the State can not be
estopped by the neglect of its agents and officers. Although the
government may generally be estopped through affirmative acts of
public officers acting within their authority, their neglect or
omission of public duties as exemplified in this case will not and
should not produce that effect. Nowhere is the aforestated rule
more true than in the field of taxation. It is axiomatic that the
government cannot and must be estopped particularly in matters
involving taxes. Taxes are the lifeblood of the nation through
which the government agencies continue to operate and with which
the State effects its functions for the welfare of its
constituents. The errors of certain administrative officers should
never be allowed to jeopardize the government's financial position,
especially in the case at bar where the amount involves millions of
pesos the collection whereof, if justified, stands to be prejudiced
just because of bureaucratic lethargy. Judgment of the CA is SET
ASIDE and the case is REMANDED to the CTA for further proceedings
and appropriate action.
Case #6 - Commissioner vs. Algue, 158 SCRA 9 Facts: The
Philippine Sugar Estate Development Company (PSEDC). Appointed
Algue Inc. as its agent. Algue received a commission of 125,000.00
and it was from their commission that it paid organizers of VOICP
75,000.00 in proportional fees. He received an assessment from the
CIR. He filed a letter of protest or reconsideration. The CIR
contends that the claimed deduction was properly disallowed because
it was not an ordinary, reasonable or necessary expense. Issue: Is
the CIR correct? Ruling: No. Taxes are the lifeblood of the
government and should be collected without unnecessary hindrance.
Every person who is able to pay must contribute his share in the
running of the government. The government for its part is expected
to respond in the form of tangible and intangible benefits intended
to improve the lives of the people and enhance their moral and
material values. This symbiotic relationship is the rationale of
taxation and should dispel the erroneous notion that is an
arbitrary method of exaction by those in the seat of power. On the
other hand, such collection should be made in accordance with law
as any arbitrariness will negate the very reason for government
itself.
case 7 COMMISSIONER OF INTERNAL REVENUE, petitioner, vs. COURT
OF APPEALS, COURT OF TAX APPEALS and YOUNG MEN'S CHRISTIAN
ASSOCIATION OF THE PHILIPPINES, INC., respondents. PANGANIBAN, J.:
Facts: Private Respondent YMCA is a non-stock, non-profit
institution, which conducts various programs and activities that
are beneficial to the public, especially the young people, pursuant
to its religious, educational and charitable objectives. YMCA
earned income from leasing out a portion of its premises to small
shop owners, like restaurants and canteen operators, and from
parking fees collected from non-members. The commissioner of
internal revenue (CIR) issued an assessment to private respondent,
in the total amount of P415,615.01 including surcharge and
interest, for deficiency income tax, deficiency expanded
withholding taxes on rentals and professional fees and deficiency
withholding tax on wages. YMCA formally protested the assessment
and. The CIR denied the claims of YMCA. Issue: Whether or not the
income derived from rentals of real property owned by YMCA,
established as a welfare, educational, and charitable non-profit
corporation, is subject to income tax under the NIRC and the
Constitution. Held: The SC agree with the CIR that while the income
received by the organizations enumerated in Section 27 (now Section
26) of the NIRC is, as a rule, exempted from the payment of tax "in
respect to income received by them as such," the exemption does not
apply to income derived ". . . from any of their properties, real
or personal, or from any of their activities conducted for profit,
regardless of the disposition made of such income . . . ." The CIR
adds that "rental income derived by a tax-exempt organization from
the lease of its properties, real or personal, [is] not, therefore,
exempt from income taxation, even if such income [is] exclusively
used for the accomplishment of its objectives." Because taxes are
the lifeblood of the nation, the Court has always applied the
doctrine of strict in interpretation in construing tax exemptions.
Furthermore, a claim of statutory exemption from taxation should be
manifest. and unmistakable from the language of the law on which it
is based. Thus, the claimed exemption "must expressly be granted in
a statute stated in a language too clear to be mistaken." Private
respondent also invokes Article XIV, Section 4, par. 3 of the
Constitution, claiming that the YMCA "is a nonstock, non-profit
educational institution whose revenues and assets are used
actually, directly and exclusively for educational purposes so it
is exempt from taxes on its properties and income." The Court
reiterate that private respondent is exempt from the payment of
property tax, but not income tax on the rentals from its property.
The bare allegation alone that it is a non-stock, non-profit
educational institution is insufficient to justify its exemption
from the payment of income tax. Laws allowing tax exemption are
construed strictissimi juris. Hence, for the YMCA to be granted the
exemption it claims under the aforecited provision, it must prove
with substantial evidence that (1) it falls under the
classification non-stock, non-profit educational institution; and
(2) the income it seeks to be exempted from taxation is used
actually, directly, and exclusively for educational purposes.
However, the Court notes that not a scintilla of evidence was
submitted by private respondent to prove that it met the said
requisites.
10. PHILIPPINE BANK OF COMMUNICATIONS, petitioner, VS.
COMMISSIONER OF INTERNAL REVENUE, COURT OF TAX APPEALS and COURT OF
APPEALS, respondent. G.R. No. 112024 January 28, 1999 Facts:
Petitioner, Philippine Bank of Communications (PBCom), a commercial
banking corporation duly organized under Philippine laws, filed its
quarterly income tax returns for the first and second quarters of
1985, repo rted profits, and paid the total income tax of
P5,016,954.00. The taxes due were settled by applying PBCom's tax
credit memos and accordingly, the Bureau of Internal Revenue (BIR)
issued Tax Debit Memo Nos. 0746-85 and 0747-85 for P3,401,701.00
and P1,615,253.00, respectively. Subsequently, however, PBCom
suffered losses so that when it filed its Annual Income Tax Returns
for the yearended December 31, 1986, the petitioner likewise
reported a net loss of P14,129,602.00, and thus declared no tax
payable for the year. But during these two years, PBCom earned
rental income from leased properties. The lessees withheld and
remitted to the BIR withholding creditable taxes of P282,795.50 in
1985 and P234,077.69 in 1986. On August 7, 1987, petitioner
requested the Commissioner of Internal Revenue (CIR), among others,
for a tax credit of P5,016,954.00 representing the overpayment of
taxes in the first and second quarters of 1985. Thereafter, on July
25, 1988, petitioner filed a claim for refund of creditable taxes
withheld by their lessees from property rentals in 1985 for
P282,795.50 and in 1986 for P234,077.69. Pending the investigation
of the respondent CIR, petitioner instituted a Petition for Review
on November 18, 1988 before the Court of Tax Appeals (CTA). On May
20, 1993, the CTA rendered a decision which denied the request of
petitioner for a tax refund or credit in the sum amount of
P5,299,749.95, on the ground that it was filed beyond the two-year
reglementary period provided for by law. The petitioner's claim for
refund in 1986 amounting to P234,077.69 was likewise denied on the
assumption that it was automatically credited by PBCom against its
tax payment in the succeeding year. On June 22, 1993, petitioner
filed a Motion for Reconsideration of the CTA's decision but the
same was denied due course for lack of merit. Thereafter, PBCom
filed a petition for review of said decision and resolution of the
CTA with the Court of Appeals (CA). However on September 22, 1993,
the CA affirmed in toto the CTA's resolution dated July 20, 1993,
hence this petition. Petitioner argues that its claims for refund
and tax credits are not yet barred by prescription relying on the
applicability of Revenue Memorandum Circular No. 7-85 issued on
April 1, 1985. The circular states that overpaid income taxes are
not covered by the two-year prescriptive period under the tax Code
and that taxpayers may claim refund or tax credits for the excess
quarterly income tax with the BIR within ten (10) years. Issue:
Whether or not the Court of Appeals erred in denying the plea for
tax refund or tax credits on the ground of prescription, despite
petitioner's reliance on Revenue Memorandum Circular No. 7-85,
changing the prescriptive period of two years to ten years. Held:
Contrary to the petitioner's contention, the relaxation of revenue
regulations by RMC 7-85 is not warranted as it disregards the
two-year prescriptive period set by law. Basic is the principle
that "taxes are the lifeblood of the nation." The primary purpose
is to generate funds for the State to finance the needs of the
citizenry and to advance the common weal. Due process of law under
the Constitution does not require judicial proceedings in tax
cases. This must necessarily be so because it is upon taxation that
the government chiefly relies to obtain the means to carry on its
operations and it is of utmost importance that the modes adopted to
enforce the collection of taxes levied should be summary and
interfered with as little as possible. Claims for refund or tax
credit should be exercised within the time fixed by law because the
BIR being an administrative body enforced to collect taxes; its
functions should not be unduly delayed or hampered by incidental
matters. The rule states that the taxpayer may file a claim for
refund or credit with the Commissioner of Internal Revenue, within
two (2) years after payment of tax, before any suit in CTA is
commenced. The two-year prescriptive period provided, should be
computed from the time of filing the Adjustment Return and final
payment of the tax for the year.
15. Caltex Philippines vs. Commission on Audit (COA) GR 92585, 8
May 1992 En Banc, Davide (J): 12 concur, 2 took no part FACTS: On 2
February 1989, the COA sent a letter to Caltex Philippines, Inc.
(CPI), hereinafter referred to as Petitioner, directing the latter
to remit to the OPSF its collection, excluding that unremitted for
the years 1986 and 1988, of the additional tax on petroleum
products authorized under the aforesaid Section 8 of P.D. No. 1956
which as of 31 December 1987, amounted to 335,037,649.00 and
informing it that, pending such remittance, all of its claims for
from the OPSF shall be held in abeyance. Caltex in its letter of 3
May 1989, petitioner requested the COA for an early release of its
reimbursement certificates from the OPSF covering claims with the
Office of energy Affairs In its Answer dated 8 May 1989, the COA
denied petitioner's request for the early release of the
reimbursement certificates from the OPSF. COA further prohibited
Caltex from offseting remittances and reimbursements for the
current and ensuing years ISSUE: Whether the amounts due from
Caltex to the OPSF may be offsetted against Caltex outstanding
claims from said funds. HELD: NO. A taxpayer may not offset taxes
due from the claims that he may have against the government.
Although petitioner's financing losses, if indeed incurred, may
constitute cost underecovery in the sense that such were incurred
as a result of the inability to fully offset financing expenses
from yields in money market placements, they do not, however, fall
under the foregoing provision of P.D. No. 1956, as amended, because
the same did not result from the reduction of the domestic price of
petroleum products. Until paragraph (2), Section 8 of the decree,
as amended, is further amended by Congress, this Court can do
nothing. Taxation is no longer envisioned as a measure merely to
raise revenue to support the existence of government; taxes may be
levied with a regulatory purpose to provide means for the
rehabilitation and stabilization of a threatened industry which is
affected with public interest as to be within the police power of
the state.
M u n i c i p a l i t
16) G.R. Nos. 89898-99 October 1, 1990 MUNICIPALITY OF MAKATI,
petitioner, vs. THE HONORABLE COURT OF APPEALS, HON. SALVADOR P. DE
GUZMAN, JR., as Judge RTC of Makati, Branch CXLII ADMIRAL FINANCE
CREDITORS CONSORTIUM, INC., and SHERIFF SILVINO R.
PASTRANA,respondents. FACTS: The present petition for review is an
off-shoot of expropriation proceedings initiated by petitioner
Municipality of Makati against private respondent Admiral Finance
Creditors Consortium, Inc., Home Building System & Realty
Corporation and one Arceli P. Jo, involving a parcel of land and
improvements thereon located at Mayapis St., San Antonio Village,
Makati and registered in the name of Arceli P. Jo under TCT No.
S-5499. It appears that the action for eminent domain was filed on
May 20, 1986, Attached to petitioner's complaint was a
certification that a bank account (Account No. S/A 265-537154-3)
had been opened with the PNB Buendia Branch under petitioner's name
containing the sum of P417,510.00, made pursuant to the provisions
of Pres. Decree No. 42. After due hearing where the parties
presented their respective appraisal reports regarding the value of
the property, respondent RTC judge rendered a decision on June 4,
1987, fixing the appraised value of the property at P5,291,666.00,
and ordering petitioner to pay this amount minus the advanced
payment of P338,160.00 which was earlier released to private
respondent. After this decision became final and executory, private
respondent moved for the issuance of a writ of execution. This
motion was granted by respondent RTC judge. After issuance of the
writ of execution, a Notice of Garnishment dated January 14, 1988
was served by respondent sheriff Silvino R. Pastrana upon the
manager of the PNB Buendia Branch. However, respondent sheriff was
informed that a "hold code" was placed on the account of
petitioner. As a result of this, private respondent filed a motion
dated January 27, 1988 praying that an order be issued directing
the bank to deliver to respondent sheriff the amount equivalent to
the unpaid balance due under the RTC decision dated June 4, 1987.
Petitioner filed a motion to lift the garnishment, on the ground
that the manner of payment of the expropriation amount should be
done in installments which the respondent RTC judge failed to state
in his decision. Private respondent filed its opposition to the
motion. Pending resolution of the above motions, petitioner filed
on July 20, 1988 a "Manifestation" informing the court that private
respondent was no longer the true and lawful owner of the subject
property because a new title over the property had been registered
in the name of Philippine Savings Bank, Inc. (PSB) Respondent RTC
judge issued an order requiring PSB to make available the documents
pertaining to its transactions over the subject property, and the
PNB Buendia Branch to reveal the amount in petitioner's account
which was garnished by respondent sheriff. In compliance with this
order, PSB filed a manifestation informing the court that it had
consolidated its ownership over the property as mortgagee/purchaser
at an extrajudicial foreclosure sale held on April 20, 1987. After
several conferences, PSB and private respondent entered into a
compromise agreement whereby they agreed to divide between
themselves the compensation due from the expropriation proceedings.
Respondent trial judge subsequently issued an order dated September
8, 1988 which: (1) approved the compromise agreement; (2) ordered
PNB Buendia Branch to immediately release to PSB the sum of
P4,953,506.45 which corresponds to the balance of the appraised
value of the subject property under the RTC decision dated June 4,
1987, from the garnished account of petitioner; and, (3) ordered
PSB and private respondent to execute the necessary deed of
conveyance over the subject property in favor of petitioner.
Petitioner's motion to lift the garnishment was denied. Petitioner
filed a motion for reconsideration, which was duly opposed by
private respondent. On the other hand, for failure of the manager
of the PNB Buendia Branch to comply with the order dated September
8, 1988, private respondent filed two succeeding motions to require
the bank manager to show cause why he should not be held in
contempt of court. During the hearings conducted for the above
motions, the general manager of the PNB Buendia Branch, a Mr.
Antonio Bautista, informed the court that he was still waiting for
proper authorization from the PNB head office enabling him to make
a disbursement for the amount so ordered. For its part, petitioner
contended that its funds at the PNB Buendia Branch could neither be
garnished nor levied upon execution, for to do so would result in
the disbursement of public funds without the proper appropriation
required under the law, citing the case of Republic of the
Philippines v. Palacio [G.R. No. L-20322, May 29, 1968, 23 SCRA
899]. Respondent trial judge issued an order dated December 21,
1988 denying petitioner's motion for reconsideration on the ground
that the doctrine enunciated in Republic v. Palacio did not apply
to the case because petitioner's PNB Account No. S/A 265-537154-3
was an account specifically opened for the expropriation
proceedings of the subject property pursuant to Pres. Decree No.
42. Petitioner and the bank manager of PNB Buendia Branch then
filed separate petitions, the Court of Appeals dismissed both
petitions for lack of merit, sustained the jurisdiction of
respondent RTC judge over the funds contained in petitioner's PNB
Account No. 265-537154-3, and affirmed his authority to levy on
such funds.
Its motion for reconsideration having been denied by the Court
of Appeals, petitioner now files the present petition for review
with prayer for preliminary injunction. Issue: Whether or not the
money in the bank account of the petitioner can be disbursed to the
private respondent. Held: There is merit in this contention. The
funds deposited in the second PNB Account No. S/A 263-530850-7 are
public funds of the municipal government. In this jurisdiction,
well-settled is the rule that public funds are not subject to levy
and execution, unless otherwise provided for by statute More
particularly, the properties of a municipality, whether real or
personal, which are necessary for public use cannot be attached and
sold at execution sale to satisfy a money judgment against the
municipality. Municipal revenues derived from taxes, licenses and
market fees, and which are intended primarily and exclusively for
the purpose of financing the governmental activities and functions
of the municipality, are exempt from execution The foregoing rule
finds application in the case at bar. Absent a showing that the
municipal council of Makati has passed an ordinance appropriating
from its public funds an amount corresponding to the balance due
under the RTC decision dated June 4, 1987, less the sum of
P99,743.94 deposited in Account No. S/A 265-537154-3, no levy under
execution may be validly effected on the public funds of petitioner
deposited in Account No. S/A 263-530850-7. Nevertheless, this is
not to say that private respondent and PSB are left with no legal
recourse. Where a municipality fails or refuses, without
justifiable reason, to effect payment of a final money judgment
rendered against it, the claimant may avail of the remedy of
mandamus in order to compel the enactment and approval of the
necessary appropriation ordinance, and the corresponding
disbursement of municipal funds therefor In the case at bar, the
validity of the RTC decision dated June 4, 1987 is not disputed by
petitioner. No appeal was taken therefrom. For three years now,
petitioner has enjoyed possession and use of the subject property
notwithstanding its inexcusable failure to comply with its legal
obligation to pay just compensation. Petitioner has benefited from
its possession of the property since the same has been the site of
Makati West High School since the school year 19861987. This Court
will not condone petitioner's blatant refusal to settle its legal
obligation arising from expropriation proceedings it had in fact
initiated. The State's power of eminent domain should be exercised
within the bounds of fair play and justice. In the case at bar,
considering that valuable property has been taken, the compensation
to be paid fixed and the municipality is in full possession and
utilizing the property for public purpose, for three (3) years, the
Court finds that the municipality has had more than reasonable time
to pay full compensation.
17. Roxas Y Cia vs CTA Facts: Roxas Siblings inherited
properties, one of which is an agricultural land in Nasugbu
Batangas. The tenants who have all been tilling the subject lands
expressed their desire to purchase from the Roxas siblings the
parcels which they actually occupied. The government, in consonance
with its constitutional mandate to acquire big landed estates and
apportion them among the tenant farmers, persuaded the Roxas
siblings to sell their landholdings. Since the government did not
have funds to cover the purchase price, loans were granted and
Roxas siblings allowed payment through installment. Roxas derived
from said installments a net gain, 50% of which was reported for
income tax purposes as gain on the sale of capital asset. The CIR
subsequently demanded among others, payment for real estate dealers
tax referring to the act of subdividing the Nasugbu farmlands and
selling them to the farmer occupants on installment. Issue: WON
Roxas siblings should be imposed with a real estate dealers tax in
view of the sale of Nasugbu farmlands. Held: No. The court held
that the sale was not only in consonance with, but more in
obedience to the request and pursuant to the policy of the
government to allocate lands to the landless. It was the bounden
duty of the government to pay the agreed compensation after it had
persuaded the Roxas siblings to sell. The court went on to discuss
the power of taxation is sometimes called the power to destroy.
Therefore it should be exercised with caution to minimize injury to
the proprietary rights of a taxpayer. It must be exercised fairly,
equally and uniformly, lest the tax collector kill the hen that
lays the golden egg. In order to maintain the general publics trust
and confidence, this power must be used justly and not
treacherously. It does not conform with the sense of justice for
the government to persuade the taxpayer to lend it a helping hand
and later on penalize him for duly answering the urgent call. Roxas
cannot therefore be considered as a real estate dealer. Thus,
pursuant to the tax code, the lands sold are capital assets and
gain derived thereof is capital gain taxable only to the extent of
50%.
#18 G.R. No. 90776 June 3, 1991 PHILIPPINE PETROLEUM
CORPORATION, petitioner, vs. MUNICIPALITY OF PILILLA, RIZAL,
Represented by MAYOR NICOMEDES F. PATENIA, respondent. FACTS:
Petitioner is a business enterprise engaged in the manufacture of
lubricated oil basestock which is a petroleum product, with its
refinery plant situated at Malaya, Pililla, Rizal. PPC owns and
maintains an oil refinery including 49 storage tanks for its
petroleum products in Malaya, Pililla, Rizal. Under Section 142 of
the NIRC of 1939, manufactured oils and other fuels are subject to
specific tax. On June 28, 1973, PD 231 (Local Tax Code) was issued
enacted. Sections 19 and 19 (a) provide that the municipality may
impose taxes on business, except on those for which fixed taxes are
provided on manufacturers, importers or producers of any article of
commerce of whatever kind or nature, including brewers, distillers,
rectifiers, repackers, and compounders of liquors, distilled
spirits and/or wines in accordance with the schedule listed
therein. The Secretary of Finance issued Provincial Circular No.
26-73 (December 27, 1973) directed to all provincial, city and
municipal treasurers to refrain from collecting any local tax
imposed in old or new tax ordinances in the business of
manufacturing, wholesaling, retailing, or dealing in petroleum
products subject to the specific tax under the NIRC. Provincial
Circular No. 26 A-73 (January 9, 1973)was also issued instructing
all City Treasurers to refrain from collecting any local tax
imposed in tax ordinances enacted before or after the effectivity
of the Local Tax Code, on the businesses of manufacturing,
wholesaling, retailing, or dealing in, petroleum products subject
to the specific tax under the NIRC. Respondent enacted Municipal
Tax Ordinance No. 1, S-1974 otherwise known as "The Pililla Tax
Code of 1974" which took effect on July 1, 1974. Sections 9 and 10
of the said ordinance imposed a tax on business, except for those
for which fixed taxes are provided in the Local Tax Code on
manufacturers, importers, or producers of any article of commerce
of whatever kind or nature, including brewers, distillers,
rectifiers, repackers, and compounders of liquors, distilled
spirits and/or wines in accordance with the schedule found in the
Local Tax Code, as well as mayor's permit, sanitary inspection fee
and storage permit fee for flammable, combustible or explosive
substances, while Section 139 of the disputed ordinance imposed
surcharges and interests on unpaid taxes, fees or charges. On April
13, 1974, P.D. 436 was promulgated increasing the specific tax on
lubricating oils, gasoline, bunker fuel oil, diesel fuel oil and
other similar petroleum products levied under Sections 142, 144 and
145 of the NIRC, and granting provinces, cities and municipalities
certain shares in the specific tax on such products in lieu of
local taxes imposed on petroleum products. The questioned Municipal
Tax Ordinance No. 1 was reviewed and approved by the Provincial
Treasurer of Rizal, but was not implemented and/or enforced by the
Municipality of Pililla because of its having been suspended up to
now in view of Provincial Circular Nos. 26-73 and 26 A-73. On June
3, 1977, P.D. 1158 otherwise known as the National Internal Revenue
Code of 1977 was enacted, Section 153 of which specifically imposes
specific tax on refined and manufactured mineral oils and motor
fuels. Enforcing the provisions of the ordinance, the respondent
filed a complaint against PPC for the collection of the business
tax from 1979 to 1986; storage permit fees from 1975 to 1986;
mayor's permit and sanitary inspection fees from 1975 to 1984. PPC,
however, have already paid the last- named fees starting 1985. The
RTC rendered a decision against petitioner. ISSUE: WON PPC whose
oil products are subject to specific tax under the NIRC, is still
liable to pay (a) tax on business and (b) storage fees, considering
Provincial Circular No. 6-77; and mayor's permit and sanitary
inspection fee unto the respondent Municipality of Pililla, Rizal,
based on Municipal Ordinance No. 1.
HELD: There is no question that Pililla's Municipal Tax
Ordinance No. 1 imposing the assailed taxes, fees and charges is
valid especially Section 9 (A) which according to the trial court
"was lifted in toto and/or is a literal reproduction of Section 19
(a) of the Local Tax Code as amended by P.D. No. 426." It conforms
with the mandate of said law. But P.D. No. 426 amending the Local
Tax Code is deemed to have repealed Provincial Circular Nos. 26-73
and 26 A-73 issued by the Secretary of Finance when Sections 19 and
19 (a), were carried over into P.D. No. 426 and no exemptions were
given to manufacturers, wholesalers, retailers, or dealers in
petroleum products. Well-settled is the rule that administrative
regulations must be in harmony with the provisions of the law.
Furthermore, while Section 2 of P.D. 436 prohibits the imposition
of local taxes on petroleum products, said decree did not amend
Sections 19 and 19 (a) of P.D. 231 as amended by P.D. 426, wherein
the municipality is granted the right to levy taxes on business of
manufacturers, importers, producers of any article of commerce of
whatever kind or nature. A tax on business is distinct from a tax
on the article itself. Thus, if the imposition of tax on business
of manufacturers, etc. in petroleum products contravenes a declared
national policy, it should have been expressly stated in P.D. No.
436. The exercise by local governments of the power to tax is
ordained by the present Constitution. To allow the continuous
effectivity of the prohibition set forth in PC No. 26-73 (1) would
be tantamount to restricting their power to tax by mere
administrative issuances.
Case 21 PETRON CORPORATION v. MAYOR TOBIAS M. TIANGCO and
MUNICIPAL TREASURER MANUEL T. ENRIQUEZ of the MUNIPALITY OF
NAVOTAS, METRO MANILA G.R. 158881, 16 April 2006, Second Division,
(Tinga, J.) While local government units are authorized to burden
all such other class of goods with taxes, fees and charges,
excepting excise taxes, a specific prohibition is imposed barring
the levying of any other type of taxes with respect to petroleum
products.
In accordance to the New Navotas Revenue Code or Ordinance
92-03, petitioner Petron Corporation was assessed a total tax of
P6,259,087.62. Petron filed a letter protest arguing that it is
exempt from paying local business taxes as provided by Article 232
(h) of the Implementing Rules of the Local Government Code. The
letter-protest was denied. A Complaint for Cancellation of
Assessment was filed before the Regional Trial Court (RTC) of
Malabon. The RTC dismissed the Complaint and required Petron to pay
the assessed tax. A Motion for Reconsideration was filed but it was
later denied by the court. Hence, the filing of this petition.
ISSUE: Whether or not a local government unit is empowered under
the Local Government Code (LGC) to impose business taxes on persons
or entities engaged in the sale of petroleum HELD: Petition
GRANTED. Section 133(h) of the LGC reads as follows: Sec. 133.
Common Limitations on the Taxing Powers of Local Government Units.
- Unless otherwise provided herein, the exercise of the taxing
powers of provinces, cities, municipalities, and Barangays shall
not extend to the levy of the following: xxx (h) Excise taxes on
articles enumerated under the National Internal Revenue Code, as
amended, and taxes, fees or charges on petroleum products;
Evidently, Section 133 prescribes the limitations on the capacity
of local government units to exercise their taxing powers otherwise
granted to them under the LGC. Apparently, paragraph (h) of the
Section mentions two kinds of taxes which cannot be imposed by
local government units, namely: excise taxes on articles enumerated
under the National Internal Revenue Code [(NIRC)], as amended; and
taxes, fees or charges on petroleum products. The power of a
municipality to impose business taxes is provided for in Section
143 of the LGC. Under the provision, a municipality is authorized
to impose business taxes on a whole host of business activities.
Suffice it to say, unless there is another provision of law which
states otherwise, Section 143, broad in scope as it is, would
undoubtedly cover the business of selling diesel fuels, or any
other petroleum product for that matter. Section 133(h) provides
two kinds of taxes which cannot be imposed by local government
units: excise taxes on articles enumerated under the NIRC, as
amended; and taxes, fees or charges on petroleum products. There is
no doubt that among the excise taxes on articles enumerated under
the NIRC are those levied on petroleum products, per Section 148 of
the NIRC. The power of a municipality to impose business taxes
derives from Section 143 of the Code that specifically enumerates
several types of business on which it may impose taxes, including
manufacturers, wholesalers, distributors, dealers of any article of
commerce of whatever nature; those engaged in the export or
commerce of essential commodities; retailers; contractors and other
independent contractors; banks and financial institutions; and
peddlers engaged in the sale of any merchandise or article of
commerce. This obviously broad power is further supplemented by
paragraph (h) of Section 143 which authorizes the sanggunian to
impose taxes on any other businesses not otherwise specified under
Section 143 which the sanggunian concerned may deem proper to
tax.
This ability of local government units to impose business or
other local taxes is ultimately rooted in the 1987 Constitution.
Section 5, Article X assures that [e]ach local government unit
shall have the power to create its own sources of revenues and to
levy taxes, fees and charges, though the power is subject to such
guidelines and limitations as the Congress may provide. There is no
doubt that following the 1987 Constitution and the Code, the fiscal
autonomy of local government units has received greater affirmation
than ever. Previous decisions that have been skeptical of the
viability, if not the wisdom of reposing fiscal autonomy to local
government units have fallen by the wayside. Section 5(a) of the
Code states that [a]ny provision on a power of a local government
unit shall be liberally interpreted in its favor, and in case of
doubt, any question thereon shall be resolved in favor of
devolution of powers and of the lower local government unit. But
somewhat conversely, Section 5(b) then proceeds to assert that [i]n
case of doubt, any tax ordinance or revenue measure shall be
construed strictly against the local government unit enacting it,
and liberally in favor of the taxpayer. And this latter
qualification has to be respected as a constitutionally authorized
limitation which Congress has seen fit to provide. Evidently, local
fiscal autonomy should not necessarily translate into abject
deference to the power of local government units to impose taxes.
Section 133(h) states that local government units shall not extend
to the levy of xxx taxes, fees or charges on petroleum products.
Respondents assert that the phrase taxes, fees or charges on
petroleum products pertains to the imposition of direct or excise
taxes on petroleum products, and not business taxes. If the phrase
actually pertains to excise taxes, then it would be an exercise in
utter redundancy, since the preceding phrase already prohibits the
imposition of excise taxes on articles already subject to such
taxes under the NIRC, such as petroleum products. There would be no
sense on the part of the legislature to twice emphasize in the same
sentence that excise taxes on petroleum products are beyond the
pale of local government taxation. The Court concedes that a tax on
a business is distinct from a tax on the article itself, or for
that matter, that a business tax is distinct from an excise tax.
However, such distinction is immaterial insofar as the latter part
of Section 133(h) is concerned, for the phrase taxes, fees or
charges on petroleum products does not qualify the kind of taxes,
fees or charges that could withstand the absolute prohibition
imposed by the provision. It would have been a different matter had
Congress, in crafting Section 133(h), barred excise taxes or direct
taxes, or any category of taxes only, for then it would be
understood that only such specified taxes on petroleum products
could not be imposed under the prohibition. The absence of such a
qualification leads to the conclusion that all sorts of taxes on
petroleum products, including business taxes, are prohibited by
Section 133(h). Where the law does not distinguish, we should not
distinguish. The language of Section 133(h) makes plain that the
prohibition with respect to petroleum products extends not only to
excise taxes thereon, but all taxes, fees and charges. The earlier
reference in paragraph (h) to excise taxes comprehends a wider
range of subjects of taxation: all articles already covered by
excise taxation under the NIRC, such as alcohol products, tobacco
products, mineral products, automobiles, and such non-essential
goods as jewelry, goods made of precious metals, perfumes, and
yachts and other vessels intended for pleasure or sports. In
contrast, the later reference to taxes, fees and charges pertains
only to one class of articles of the many subjects of excise taxes,
specifically, petroleum products. While local government units are
authorized to burden all such other class of goods with taxes, fees
and charges, excepting excise taxes, a specific prohibition is
imposed barring the levying of any other type of taxes with respect
to petroleum products.
23. HYDRO RESOURCES CONTRACTORS CORPORATION, petitioner, vs. THE
COURT OF TAX APPEALS and THE HON. DEPUTY MINISTER OF FINANCE,
ALFREDO PIO DE RODA, respondents. 1990 Dec 21 2nd Division G.R. No.
80276 FACTS: The National Irrigation Administration (NIA) entered
into an agreement, sometime in August 1978, with petitioner Hydro
Resources Contractors Corporation (Hydro for short), for the
construction of the Magat River Multipurpose Project in Isabela.
Under the aforesaid contract, petitioner was allowed to procure new
construction equipment, spare parts and tools from abroad, the
payment for which was advanced by NIA under a financing plan
embodied in the contract. By the terms of the contract NIA
undertakes payment of all the import duties and taxes incident to
the importations deductible from the proceeds of the contract
price. HYDRO shall repay NIA in full the value of the construction
equipment out of the same proceeds before eventual transfer or
taking ownership of subject construction equipment upon termination
of the contract. NIA reneged and failed in the compliance of its
tax obligations. In the meantime, HYDRO had fully repaid the value
of the construction equipment so much so that NIA executed deeds of
sale covering the same and transferring the ownership thereof in
favor of petitioner. Upon the transfer of the ownership of the said
equipment HYDRO was assessed by the Bureau of Customs the
corresponding customs duty and compensating tax. This amount was
paid by HYDRO to the Bureau of Customs. In addition, HYDRO was
assessed additional 3% ad valorem duty prescribed in Executive
Order 860. HYDRO also paid this amount but this time under protest.
The Collector of Customs acted favorably on petitioner's protest
and ordered the refund of the amount paid for the ad valorem duty
in the form of tax credit. The Acting Commissioner of Customs
affirmed the ruling of the Collector of Customs. These findings of
the Collector of Customs as well as the Acting Customs Commissioner
were reversed by the Deputy Minister of Finance. Petitioner
appealed to the Court of Tax Appeals but the same affirmed the
ruling of the Deputy Minister of Finance denying petitioner's claim
for refund. ISSUE: WHETHER OR NOT THE HYDRO RESOURCES IS LIABLE FOR
THE PAYMENT OF AD VALOREM TAX? HELD: No, it is not liable for the
payment of ad valorem tax. The subsequent executions of the Deeds
of Sale of the equipment in question on December 6, 1982 and March
24, 1983 are not relevant and material in the consideration of the
application of Executive Order No. 860 because said Deeds of Sale
were mere formalities in the implementation of Contract No. MPI-C-1
executed on August 1978, which should be reckoned and construed as
the actual date of sale. This must be so because the contract of
purchase and sale of the NIA-
financed/owned equipment to Hydro took place in 1978 when
Contract No. MPI-C-1 was signed by NIA and HYDRO wherein the
contracting parties provided for their financing, procurement,
delivery, repayment, transfer of possession and ownership. The said
scheme contemplated a Contract of Sale within the purview of Art.
1458 of the Civil Code. "Let it suffice that the procurement of the
equipment, as earlier stated, was not on a tax exempt basis as the
import liabilities thereon have been secured to be paid under the
terms of the financial scheme in the contract. The formality of
vesting of title over the equipment was not an unwarranted
expectation but a matter of an implementation of a pre- existing
agreement, hence, the imported articles can only be subject to the
rates of import duties/taxes prevailing at the time of entry or
withdrawal from customs' custody (Sec. 205, TCC) in 1978 and 1979,
thus foreclosing any retroactive application of the 1982 Executive
Order.
27. Gerochi vs DOE Facts: Petitioners filed an original action
praying that Section 34 of Republic Act (RA) 9136, otherwise known
as the Electric Power Industry Reform Act of 2001 (EPIRA), imposing
the Universal Charge, and Rule 18 of the Rules and Regulations
(IRR) which seeks to implement the said imposition, be declared
unconstitutional. Petitioners contend, among others, that the
assailed provision of law and are unconstitutional since the
universal charge provided for under Sec. 34 of the EPIRA and sought
to be implemented under Sec. 2, Rule 18 of the IRR of the said law
is a tax which is to be collected from all electric end-users and
self-generating entities. Petitioners contend that the Universal
Charge has the characteristics of a tax and is collected to fund
the operations of the NPC. On the other hand, respondent PSALM
through the Office of the Government Corporate Counsel (OGCC)
contends that unlike a tax which is imposed to provide income for
public purposes, such as support of the government, administration
of the law, or payment of public expenses, the assailed Universal
Charge is levied for a specific regulatory purpose, which is to
ensure the viability of the country's electric power industry.
Respondents further contend that said Universal Charge does not
possess the essential characteristics of a tax, that its imposition
would redound to the benefit of the electric power industry and not
to the public, and that its rate is uniformly levied on electricity
end-users, unlike a tax which is imposed based on the individual
taxpayer's ability to pay. ISSUE: Whether or not the Universal
Charge imposed under Sec. 34 of the EPIRA is a tax. HELD: The power
to tax is based on the principle that taxes are the lifeblood of
the government, and their prompt and certain availability is an
imperious need. Thus, the theory behind the exercise of the power
to tax emanates from necessity; without taxes, government cannot
fulfill its mandate of promoting the general welfare and well-being
of the people. On the other hand, police power is the power of the
state to promote public welfare by restraining and regulating the
use of liberty and property.It is the most pervasive, the least
limitable, and the most demanding of the three fundamental powers
of the State. In exacting the assailed Universal Charge through
Sec. 34 of the EPIRA, the State's police power, particularly its
regulatory dimension, is invoked. Such can be deduced from Sec. 34
which enumerates the purposes for which the Universal Charge is
imposed and which can be amply discerned as regulatory in
character. The EPIRA resonates such regulatory purposes. It is a
well-established doctrine that the taxing power may be used as an
implement of police power. In Valmonte v. Energy Regulatory Board,
et al.and in Gaston v. Republic Planters Bank, this Court held that
the Oil Price Stabilization Fund (OPSF) and the Sugar Stabilization
Fund (SSF) were exactions made in the exercise of the police
power.
28. GOMEZ V. PALOMAR Facts Herein petitioner Benjamin Gomez
questions the constitutionality of Republic Act 1635, as amended by
RA 2631 (Anti-TB Stamp Law), which provides as follows: To help
raise funds for the Philippine Tuberculosis Society, the Director
of Posts shall order for the period from August nineteen to
September thirty every year the printing and issue of semi-postal
stamps of different denominations with face value showing the
regular postage charge plus the additional amount of five centavos
for the said purpose, and during the said period, no mail matter
shall be accepted in the mails unless it bears such semi-postal
stamps: Provided, That no such additional charge of five centavos
shall be imposed on newspapers. The additional proceeds realized
from the sale of the semi-postal stamps shall constitute a special
fund and be deposited with the National Treasury to be expended by
the Philippine Tuberculosis Society in carrying out its noble work
to prevent and eradicate tuberculosis. On September l5, 1963
petitioner mailed a letter at the post office in San Fernando,
Pampanga. Because this letter, addressed to a certain Agustin
Aquino of 1014 Dagohoy Street, Singalong, Manila did not bear the
special anti-TB stamp required by the statute, it was returned to
the petitioner. In view of this development, the petitioner brought
suit for declaratory relief in the Court of First Instance of
Pampanga, to test the constitutionality of the statute, as well as
the implementing administrative orders issued, contending that it
violates the equal protection clause of the Constitution as well as
the rule of uniformity and equality of taxation. The lower court
declared the statute and the orders unconstitutional; hence this
appeal by the respondent postal authorities. Issue: Whether or not
RA 1635 violates the equal protection clause and the rule of
uniformity and equality of taxation Ruling It is said that the
statute is violative of the equal protection clause of the
Constitution. More specifically the claim is made that it
constitutes mail users into a class for the purpose of the tax
while leaving untaxed the rest of the population and that even
among postal patrons the statute discriminatorily grants exemption
to newspapers while Administrative Order 9 of the respondent
Postmaster General grants a similar exemption to offices performing
governmental functions. The five centavo charge levied by Republic
Act 1635, as amended, is in the nature of an excise tax, laid upon
the exercise of a privilege, namely, the privilege of using the
mails. As such the objections leveled against it must be viewed in
the light of applicable principles of taxation. It is settled that
the legislature has the inherent power to select the subjects of
taxation and to grant exemptions. In the field of taxation, more
than in other areas, the legislature possesses the greatest freedom
in classification. The reason for this is that traditionally,
classification has been a device for fitting tax programs to local
needs and usages in order to achieve an equitable distribution of
the tax burden. While the principle that there must be a reasonable
relationship between classification made by the legislation and its
purpose is undoubtedly true in some contexts, it has no application
to a measure whose sole purpose is to raise revenue. So long as the
classification imposed is based upon some standard capable of
reasonable comprehension, be that standard based upon ability to
produce revenue or some other legitimate distinction, equal
protection of the law has been afforded. The classification of mail
users is not without any reason. It is based on ability to pay, let
alone the enjoyment of a privilege, and on administrative
convenience. In the allocation of the tax burden, Congress must
have concluded that the contribution to the anti-TB fund can be
assured by those who can afford the use of the mails. It is not
accurate to say that the statute constituted mail users into a
class. Mail users were already a class by themselves even before
the enactment of the statue and all that the legislature did was
merely to select their class. Legislation is essentially empiric
and Republic Act 1635, as amended, no more than reflects a
distinction that exists in fact. Moreover, granted the power to
select the subject of taxation, the State's power to grant
exemption must likewise be conceded as a necessary corollary. The
legislature may withhold the burden of the tax in order to foster
what it conceives to be a beneficent enterprise, such as the case
of newspapers. As for the Government and its instrumentalities,
their exemption rests on the State's sovereign immunity from
taxation. The State cannot be taxed without its consent. Finally,
the rule of uniformity and equality of taxation is not infringed by
the imposition of a flat rate rather than a graduated tax. A tax
need not be measured by the weight of the mail or the extent of the
service rendered. Considerations of administrative convenience and
cost afford an adequate ground for classification. The same
considerations may induce the legislature to impose a flat tax
which in effect is a charge for the transaction, operating equally
on all persons within the class regardless of the amount
involved.
29. Punsalan vs Municipal Board of the City of Manila. G.R. No.
L-4817 May 26, 1954 Facts:This suit was commenced by two lawyers, a
medical practitioner, a public accountant, a dental surgeon and a
pharmacist, purportedly "in their own behalf and in behalf of other
professionals practising in the City of Manila who may desire to
join it." Object of the suit is the annulment of Ordinance No. 3398
of the City of Manila together with the provision of the Manila
charter authorizing it and the refund of taxes collected under the
ordinance but paid under protest. The ordinance in question imposes
a municipal occupation tax on persons exercising various
professions in the city and penalizes non-payment of the tax "by a
fine of not more than two hundred pesos or by imprisonment of not
more than six months, or by both such fine and imprisonment in the
discretion of the court." Among the professions taxed were those to
which plaintiffs belong. Required tax by the questioned ordinance
was paid under protest. The lower court upheld the validity of the
charter provision but declared the ordinance itself illegal and
void on the ground that the penalty there in provided for
nonpayment of the tax was not legally authorized. Issue: Whether
the ordinance and the law authorizing it constitute class
legislation, are unjust and oppressive, and authorize what amounts
to double taxation. Held:The lower court was in error in saying
that the imposition of the penalty provided for in the ordinance
was without the authority of law. Section 18 of Manila Charter in
fact authorize to fix tax and provide penalty as much as what has
been provided in the Ordinance in question. Regarding "class
legislation", Plaintiffs' complaint is that while the law has
authorized the City of Manila to impose the said tax, it has
withheld that authority from other chartered cities, not to mention
municipalities. it is not for the courts to judge what particular
cities or municipalities should be empowered to impose occupation
taxes in addition to those imposed by the National Government. That
matter is peculiarly within the domain of the political departments
and the courts would do well not to encroach upon it. Moreover, as
the seat of the National Government and with a population and
volume of trade many times that of any other Philippine city or
municipality, Manila, no doubt, offers a more lucrative field for
the practice of the professions, so that it is but fair that the
professionals in Manila be made to pay a higher occupation tax than
their brethren in the provinces. Plaintiffs brand the ordinance
unjust and oppressive because they say that it creates
discrimination within a class in that while professionals with
offices in Manila have to pay the tax, outsiders who have no
offices in the city but practice their profession therein are not
subject to the tax this requires judicial determination. The
argument against double taxation may not be invoked where one tax
is imposed by the state and the other is imposed by the city it
being widely recognized that there is nothing inherently obnoxious
in the requirement that license fees or taxes be exacted with
respect to the same occupation, calling or activity by both the
state and the political subdivisions thereof.
31. Meriwether vs. Garrett 102 US 472 October 1880 Facts: The
city of Memphis, Tennesee is a municipal corporation with the
ordinary powers to make contracts and to levy and collect taxes to
meet its expenditures. In June 1987, it was financially in a bad
condition. On February 28, 1879, herein appellee Robert Garrett and
others filed a bill against the City of Memphis, Tennessee
asserting that they are the owners and holders of overdue bonds and
other indebtedness and that because of the malfeasance and
incompetency of the officers charged with the collection of taxes,
a large proportion remained uncollected, thus resulting to
incompetency. Thus, they pray for the appointment of a receiver and
that Garrett be given the powers stated in Chapter 71 of Acts of
1877, including the power to collect all outstanding indebtedness
and claim of every kind, to settle the complainants debts.
Thereafter, the legislature of Tennessee passed Chapter 10, of Acts
of 1879 repealing the charters of certain municipal corporations
and Chapter 11, of Acts of 1879 establishing taxing districts and
providing the means of local government for the same. On March 13,
1879, the legislature passed Chapter 92, of Acts of 1879, imposing
the collection and disposal of taxes assessed for municipal
corporations of Tennessee whose charters have been or may be
repealed, or which may surrender their Charters, and for the
compromise settlement of the debts of such extinct municipal
corporations. Pursuant to the Acts passed, the Governor of
Tennessee appointed Minor Meriwether as receiver and back-tax
collector. The complainants filed an amended and supplemental bill
alleging that the appointment of Meriwether is interfering and
hindering Mr. Latham as receiver of the court. Though the
petitioners themselves were indebted to the city of Memphis, they
refused to pay to Latham. Thus, the defendants filed for injunction
restraining Meriweather from collecting taxes. The presiding judge
held that the parties and other creditors may recover the debts due
them and that all the assets and property of the city, including
unpaid taxes may be applied as payment of the debts. Latham, as
receiver, was directed to retain possession of all the assets and
property and may be disposed only through court order. Meriwether
appealed before the SC. Issue: Whether the court has the right to
seize and impound the assets of the Corporation and place those in
the hands of the receiver. Whether the court has the power to
collect the taxes due the creditors before the repealing of the
charters. Whether the appointment of Meriwether as receiver and
back-tax collector can be validly made by an act of the
legislature. Held: Properties that are held for public use cannot
be subjected to the payment of the debts of the city. Upon the
repeal of the Charter, these properties are automatically
transferred to the control of the State. Also, private properties
may not be used as payments for the debt, except through taxation.
The power of taxation is legislative, and cannot be exercised by
any other than the legislative. Taxes levied according to law
before the repeal of the charter, other than such that were levied
in obedience to the special requirement of contracts, and those
that were levied under judicial direction for the payment of
judgments recovered against the city, cannot be collected through
the instrumentality of a court of chancery at the instance of the
creditors of the city. Such taxes can only be collected under
authority from the legislature. If there is none, the remedy is to
appeal to the legislature, which could grant the same. Lastly, the
receiver and back-tax collector appointed under the authority of
the act of March 13, 1879, is a public officer, clothed with
authority from the legislature for the collection of the taxes
levied before the repeal
of the charter. The funds collected by him from taxes levied
under judicial direction cannot be appropriated to any other uses
than those for which they were raised. He, as well as any other
agent of the State charged with the duty of their collection, can
be compelled by appropriate judicial orders to proceed with the
collection of such taxes by sale of property or by suit or in any
other way authorized by law, and to apply the proceeds upon the
judgments. The decree of the court below is reversed. The cause is
remanded, with instructions to dismiss the bills, without
prejudice. If, on the settlement of the accounts of the receiver
herein, it shall be found he has any money in his hands collected
on taxes levied under judicial direction to pay judgments in favor
of parties to the suit, an order may be made directing its
appropriation to the payment of such judgment.
37. Tio vs. Videogram Regulatory Board Gr. No. L-75697 June 18,
1987 Melencio-Herrera, J. Facts: The petition assails the
constitutionality of Presidential Decree No. 1987 entitled "An Act
Creating the Videogram Regulatory Board" with broad powers to
regulate and supervise the videogram industry. The DECREE imposes a
tax of 30% on the gross receipts and petitioners argue that the tax
imposed is harsh, confiscatory, oppressive and/or in unlawful
restraint of trade in violation of the due process clause of the
Constitution. Issue: WON that the tax provision of the DECREE is a
rider and is without merit. Held: The Constitutional requirement
that "every bill shall embrace only one subject which shall be
expressed in the title thereof" is sufficiently complied with if
the title be comprehensive enough to include the general purpose
which a statute seeks to achieve. The tax provision is allied and
germane to, and is reasonably necessary for the accomplishment of,
the general object of the DECREE, which is the regulation of the
video industry through the Videogram Regulatory Board. The tax
provision is not inconsistent with, nor foreign to that general
subject and title. The levy of the 30% tax is for a public purpose.
It was imposed primarily to answer the need for regulating the
video industry, particularly because of the rampant film piracy,
the flagrant violation of intellectual property rights, and the
proliferation of pornographic video tapes. The tax imposed by the
DECREE is not only a regulatory but also a revenue measure prompted
by the realization that earnings of videogram establishments of
around P600 million per annum have not been subjected to tax,
thereby depriving the Government of an additional source of
revenue. And while it was also an objective of the DECREE to
protect the movie industry, the tax remains a valid imposition.
Taxation has been made the implement of the state's police power.
Petition is hereby dismissed.
38.Abakada Guro Party List, et al. vs. Ermita, G.R. No. 168056,
9/1/05 Facts: Petitioners filed a petition for prohibition on
5/27/05 before R.A. No. 9337 took effect. They question the
constitutionality of Sections 4, 5, & 6 of said law, amending
Sections 106, 107, & 108, respectively of the National Internal
Revenue Code. Section 4 imposes a 10% VAT on sale of goods and
properties, Section 5 imposes a 10% VAT on importation of goods,
& Section 6 imposes a 10% VAT on sale of services and use or
lease of properties. These questioned provisions contain a uniform
proviso authorizing the President, upon recommendation of the
Secretary of Finance, to raise the VAT rate to 12%, effective
1/1/06, after any of the following conditions has been satisfied:
1. Value-added tax collection as a percentage of Gross Domestic
Product (GDP) of the previous years exceeds two and four-fifth
percent (2 4/5%); or 2. National gov't deficit as a percentage of
GDP of the previous year exceeds one and one-half percent (1 1/2%).
Petitioners argue that the law is unconstitutional, as it
constitutes abandonment by Congress of its exclusive authority to
fix the rate of taxes under Article VI, Section 28 (2) of the 1987
Philippine Constitution. Issue: Whether or not R.A. 9337 is
unconstitutional Held: It has been said that taxes are the
lifeblood of the gov't. In this case, it is just an enema, a
first-aid measure to resuscitate an economy in distress. The Court
is neither blind nor is it turning a deaf ear on the plight of the
masses. But IT does not have the panacea for the malady that the
law seeks to remedy. As in other cases, the Court cannot strike
down a law as unconstitutional simply because of its yokes.
Congress did not delegate the power to tax but the mere
implementation of the law. The intent and will to increase the VAT
rate to 12% came from Congress and the task of the President is to
simply execute the legislative policy. That Congress chose to do so
in such a manner that is not within the province of the Court to
inquire into, its task being to interpret the law. The VAT is a tax
on spending or consumption it is levied on the sale, barter,
exchange or lease of goods or properties and services. Being an
indirect tax on expenditure, the seller of goods or services may
pass on the amount of tax paid to the buyer. In contrast, a direct
tax is a tax for which a taxpayer is directly liable on the
transaction or business it engages in, without transferring the
burden to someone else.
44) GR No. L-47252 April 18, 1941 THE APOSTOLIC OF THE MOUNTAIN
PROVINCE PREFECT vs.. THE TREASURER OF THE CITY OF BAGUIO, FACTS:
In 1937, an ordinance (Ord. 137) was passed in the City of Baguio.
The said ordinance sought to assess properties of property owners
within the defined city limits. APMP, on the other hand, is a
religious corporation duly established under Philippine laws.
Pursuant to the ordinance, it contributed a total amount of
P1,019.37. It filed the said contribution in protest. APMP later
averred that it should be exempt from the said special contribution
since as a religious institution, it has a constitutionally
guaranteed right not to be taxed including its properties.
ISSUE: Whether or not APMP is exempt from taxes. HELD: The test
of exemption from taxation is the use of the property for purposes
mentioned in the Constitution. Based on Justice Cooleys words:
"While the word 'tax' in its broad meaning, includes both general
taxes and special assessments, and in a general sense a tax is an
assessment, and an assessment is a tax, yet there is a recognized
distinction between them in that assessment is confined to local
impositions upon property for the payment of the cost of public
improvements in its immediate vicinity and levied with reference to
special benefits to the property assessed. The differences between
a special assessment and a tax are that (1) a special assessment
can be levied only on land; (2) a special assessment cannot (at
least in most states) be made a personal liability of the person
assessed; (3) a special assessment is based wholly on benefits; and
(4) a special assessment is exceptional both as to time and
locality. The imposition of a charge on all property, real and
personal, in a prescribed area, is a tax and not an assessment,
although the purpose is to make a local improvement on a street or
highway. A charge imposed only on property owners benefited is a
special assessment rather than a tax notwithstanding the statute
calls it a tax." In the case at bar, the Prefect cannot claim
exemption because the assessment is not taxation per se but rather
a system for the benefits of the inhabitants of the city. According
to the stipulation of facts, the appellant can not invoke with
success the exemption established by the Constitucion because was
not incorporated nor proven that their Property exactly who paid
the special tax were used exclusively for religious. True, it
stipulated that the properties were dedicated to religious
purposes, but not agreed or proved that such use was exclusive, and
may therefore be that the properties to be more devoted to
religious purposes and to use also be earmarked for other purposes
nonreligious.
As for the validity of Ordinance No. 137 as amended, it is
undeniable that Baguio City is authorized by section 8 (1) of Law
No. 1963, now Article 2553 (1) of the Revised Administrative Code,
for discussed creating the special tax to repay the cats caused by
drainage and sewerage system that was built for the benefit of all
inhabitants of that city.
45. VICTORIAS MILLING CO., INC., plaintiff-appellant, vs. THE
MUNICIPALITY OF VICTORIAS, PROVINCE OF NEGROS OCCIDENTAL,
defendant-appellant. G.R. No. L-21183 Facts: The disputed ordinance
was approved by the municipal Council of Victorias on September 22,
1956 by way of an amendment to two municipal ordinances separately
imposing license taxes on operators of sugar centrals and sugar
refineries. The changes were: with respect to sugar centrals, by
increasing the rates of license taxes; and as to sugar refineries,
by increasing the rates of license taxes as well as the range of
graduated schedule of annual output capacity. Ordinance No. 1 is
labeled "An Ordinance Amending Ordinance No. 25, Series of 1953 and
Ordinance No. 18, Series of 1947 on Sugar Central by Increasing the
Rates on Sugar Refinery Mill by Increasing the Range of Graduated
Schedule on Capacity Annual Output Respectively". Of importance are
the provisions of Section 1(m) relating to sugar centrals and
Section 2(m) covering sugar refineries with specific reference to
the maximum annual license tax, viz: Section No. 1 Any person,
corporation or other forms of Companies, operating Sugar Central or
engage[d] in the manufacture of centrifugal sugar shall be required
to pay the following annual municipal license tax, payable
quarterly, to wit: (m) Sugar Central with mill having a capacity of
producing an annual output of from 1,500,001 piculs or more shall
be required to pay an annual municipal license tax of P40,000.00.
Section No. 2 Any person, corporation or other forms of Companies
shall be required to pay an annual municipal license tax for the
operation of Sugar Refinery Mill at the following rates: (m) Sugar
Refinery with mill having a capacity of producing an annual output
of from 1,750,001 bags of 100 lbs. or more shall be required to pay
an annual municipal license tax of P40,000.00. For, the production
of plaintiff Victorias Milling Co., Inc. in both its sugar central
and its sugar refinery located in the Municipality of Victorias
comes within these items in the schedule. Plaintiff filed asked for
judgment declaring Ordinance No. 1, series of 1956, null and void.
The reasons put forth by plaintiff are that: (a) the ordinance
exceeds the amounts fixed in Provincial Circular 12-A issued by the
Finance Department on February 27, 1940; (b) it is discriminatory
since it singles out plaintiff which is the only operator of a
sugar central and a sugar refinery within the jurisdiction of
defendant municipality; (c) it constitutes double taxation; and (d)
the national government has preempted the field of taxation with
respect to sugar centrals or refineries. Issue: Whether or not
Ordinance No. 1, series of 1956, of the Municipality of Victorias,
Negros Occidental is valid. Held: To be recalled at this point is
that Ordinance No. 1, series of 1956, is but an amendment of
Ordinance No. 18, series of 1947, in reference to refineries, and
Ordinance No. 25, series of 1953, covering sugar centrals.
Ordinance No. 18 imposes "municipal taxes on persons, firms or
corporations operating refinery mills in this municipality."
Ordinance No. 25 speaks of municipal taxes "relative to the output
of the sugar centrals." What are these taxes for? Resolution No. 60
of the municipal council of Victorias, adopted also on September
22, 1956 in conjunction with Ordinance No. 1, series of 1956,
furnishes a ready answer. It reads in part: WHEREAS, the Municipal
Treasurer informed the Municipal Council of the revenue of the
Municipality and the heavy obligations which confront it because of
the implementation of Minimum Wage Law on the salaries and wages it
pays to its municipal employees and laborers thus greatly draining
the Municipal Treasury; September 27, 1968
WHEREAS, this local administration is committed to the plan of
ameliorating the deplorable situation existing in the barrios,
sitios and rural areas by giving them essential and necessary
facilities calculated to improve conditions thereat thru
improvements of roads and feeder roads; WHEREAS, one of the causes
of the municipality's financial difficulty is low rates of
municipal taxes imposed by some of the ordinances enacted by the
local legislative body; WHEREAS, [in] . . . the ordinances known as
Ordinance No. 25, Series of 1953, dealing on theoperation of Sugar
Central, and Ordinance No. 18, Series of 1947, which exclusively
deals with the operation of Sugar Refinery Mill, the rates so given
are rates suggested and determined by the Provincial Circular No.
12-A, dated February 27, 1940 issued by the Department of Finance
as regards to Sugar Centrals; WHEREAS, the Municipal Council has
come to the conclusion that the rates provided for in such
ordinances are no longer adequate if made in keeping with the
present high cost of living; WHEREAS, the Municipal Council has
also taken cognizance of the fact that the price of sugar per picul
today is more than twice its pre-war average price; . . . . Given
the purposes just mentioned, we find no warrant in logic to give
our assent to the view that the ordinance in question is solely for
regulatory purpose. Plain is the meaning conveyed. The ordinance is
for raising money. To say otherwise is to misread the purpose of
the ordinance.1awphl.nt We should not hang so heavy a meaning on
the use of the term "municipal license tax". This does not
necessarily connote the idea that the tax is imposed as the lower
court would want it to mean a revenue measure in the guise of a
license tax. For really, this runs counter to the declared purpose
to make money. Besides, the term "license tax" has not acquired a
fixed meaning. It is often "used indiscriminately to designate
impositions exacted for the exercise of various privileges." It
does not refer solely to a license for regulation. In many
instances, it refers to "revenue-raising exactions on privileges or
activities." On the other hand, license fees are commonly called
taxes. But, legally speaking, the latter are "for the purpose of
raising revenues," in contrast to the former which are imposed "in
the exercise of police power for purposes of regulation." We
accordingly say that the designation given by the municipal
authorities does not decide whether the imposition is properly a
license tax or a license fee. The determining factors are the
purpose and effect of the imposition as may be apparent from the
provisions of the ordinance. Precisely because of these
considerations the present imposition must be treated as a levy for
revenue purposes. A quick glance at the big amount of maximum
annual tax set forth in the ordinance, P40,000.00 for sugar
centrals, and P40,000.00 for sugar refineries, will readily
convince one that the tax is really a revenue tax. And then, we
read in the ordinance nothing which would as much as indicate that
the tax imposed is merely for police inspection, supervision or
regulation. The Supreme Court ruled that Ordinance No. 1, series of
1956, of the Municipality of Victorias, was promulgated not in the
exercise of the municipality's regulatory power but as a revenue
measure a tax on occupation or business. The authority to impose
such tax is backed by the express grant of power in Section 1 of
Commonwealth Act 472. Judgment is hereby rendered: declaring valid
and subsisting Ordinance No. 1, series of 1956, of the Municipality
of Victorias, Province of Negros Occidental.
#46 G.R. No. L-16254 February 21, 1922 G.A. CUUNJIENG,
plaintiff-appellee, vs. FRED L. PATSTONE, engineer of the city of
Manila, defendant-appellant. FACTS: The plaintiff desires a erect a
warehouse on Azcarraga Street but is denied a building permit until
be shall have made provision for the construction of an arcade over
the side walk in front of the building and until he shall have
further complied with section 1 of Ordinance No.301 of the City of
Manila, i.e. payment of of the assessed value of the land. The
plaintiff refuses to construct the arcade and to comply with the
ordinance in question on the grounds that the arcade is unnecessary
and unsuitable for his warehouse and that the city has no power to
require its construction; and that the ordinance in exacting the
payment of a fee of one-half of the assessed value of the city of
land covered by the arcade is in excess of the legislative powers
of the Municipal Board and, therefore, unconstitutional. It seems,
however, to be conceded that under the climatic conditions here
existing, arcades are both useful and desirable from the standpoint
of public convenience and that the Municipal Board, under the
general welfare of the city charter, has power to provide for the
construction of arcades on certain by assignment of. ISSUE: Whether
the fee was validly imposed. HELD: No. The city does not posses
such an extraordinary power as that of compelling property holders
to lease the portions of the public sidewalks, which adjoin their
lands, requires no argument. The charge of one-half of the assessed
value imposed on applicants for building permits can therefore, not
be considered as rent, and to be valid must either be a tax or a
license fee. In imposing a fee equal to one-half of the assessed
value of the portion of the sidewalk covered by the arcade in
question, the Municipal Board of the city of Manila exceeded its
powers. The construction of buildings is a useful enterprises and
the amount of the license fee should therefore be limited to the
cost of licensing, regulating, and surveillance. It appears that
without the arcade the normal fee for the building permit would
have been about P31, with the arcade the fee exacted is P525.60. It
does not appear that the cost of licensing, regulating, and
surveillance would be materially increased through the construction
of the arcade, and it is therefore clear that the excess fee is
imposed for the purpose of revenue There is nothing in the
character of the city of Manila indicating an intention on the part
of the Legislature to confer power on the Municipal Board to impose
a license tax for revenue on the construction of buildings. The
power conferred in relation to such construction is considered
merely as police power from which, as we have seen, taxing power is
not inferred. Under the circumstances, to hold the fee in this case
valid would amount to judicial legislation, particularly
undesirable in the present instance where the Legislature, upon its
attention being called to the matter, would no doubt willingly
grant as much power as could wisely be placed in the hands of the
municipality. Therefore, the City of Manila has the power to
require the construction of arcades in certain circumstances but
that the license fee prescribed by city Ordinance No. 301 is
illegal.
47. City of Iloilo vs Villanueva Facts: Spouses Villanueva are
owners of apartment houses in Iloilo where a city ordinance was
passed imposing license tax fees for tenant houses. The spouses
Villanueva refused to pay the taxes and the City of Iloilo filed a
case to recover the same. Spouses Villanueva contend that the
ordinance under which the tax infringes the powers granted to the
city by its charter and that the said ordinance is violative of the
constitutional provisions requiring uniformity of taxation upon the
theory that it is oppressive, unreasonable and discriminatory.
Because of the issue on constitutionality, the case was elevated to
the court of first instance. Issue: WON the municipal board imposed
the license fees as a revenue measure and therefore exceeded the
powers granted to it by its charter. Held: Yes. The court held that
although the municipal board was granted with the power to impose a
license fee in exercise of its police power, the license fee for
the purpose of raising revenue is not warranted. Imposing a license
fee to raise revenues must be expressly granted by the charter or
statute and is not to be implied from the conferred power to
license and merely regulate. The court distinguished authority to
impose a license in exercise of police power from the exercise of
power to tax. If the fee is designed to raise substantially more
than the cost of the regulation to which it purports to be an
incident, its purpose is to raise revenue. If it is a fee to be
attached to a particular provision for regulation, and appears to
be imposed to cover the cost of that regulation, then it is merely
a regulatory measure. Further, it is well settled that a municipal
corporation, unlike a sovereign state, is clothed with no inherent
power of taxation. The charter or statute must plainly show an
intent to confer that power or the municipality cannot assume it.
It not appearing that the power to tax owners of tenement houses is
one among those clearly and expressly granted to the city of Iloilo
by its charter, the exercise of such power cannot be assumed and
hence the ordinance in question is ultra vires in so far as its
taxes a tenement house such as those belonging to the spouses
Villanueva
Case 51 E S S O S T A N D A R D E A S T E R N , I N C v s .
COMMISSIONEROFINTERNALREVENUEG.R. Nos. L-28508-9, July 7, 1989 F CS
AT: In CTA Case No. 1251, Esso Standard Eastern Inc.(E sso ) d e d
u cte d fro m its g ro ss in co m e fo r 1 9 5 9 , a s p a rt o f i
t s o r d i n a r y a n d n e c e s s a r y b u s i n e s s e x p e
n s e s , t h e a m o u n t i t h a d s p e n t f o r d r i l l i n
g a n d e x p l o r a t i o n of its petroleum concessions. This c
l a i m w a s d i s a l l o w e d b y the Commissioner of Internal
Revenue (CIR) on the ground that the expenses should be capitalized
and might be written off as a loss only when a "dry hole" should
result. Esso then file d a n a m e n d e d re tu rn w h e re it a
ske d fo r th e re fu n d o f P323,279.00 by reason of its
abandonment as dry holes of s e v e r a l o f i t s o i l w e l l s
. A l s o c l a i m e d a s o r d i n a r y a n d n e c e s s a r y
e x p e n s e s i n t h e s a m e r e t u r n w a s t h e a m o u n
t o f P 3 4 0 ,8 2 2 .0 4 , re p re se n tin g m a rg in fe e s it
h a d p a id to th e Central Bank on its profit remittances to its
New York head o ffice . O n A u g u st 5 , 1 9 6 4 , th e C IR g ra
n te d a ta x cre d it o f P 2 2 1 ,0 3 3 .0 0 o n ly , d isa llo w
in g th e cla im e d d e d u ctio n fo r the margin fees paid on
the ground that the margin fees paid to the Central Bank could not
be considered taxes or allowed as deductible business expenses.
Esso appealed to the Court of T a x A p p e a ls (C T A ) fo r th e
re fu n d o f th e m a rg in fe e s it h a d earlier paid
contending that the margin fees were deductible from gross i n c o
m e e i t h e r a s a t a x o r a s a n ordinary and necessary
business expense. However, E s s o s appeal was denied. ISSUE: 1. W
h e t h e r o r n o t t h e m a r g i n f e e s a r e t a x e s 2.
Whether or not the margin fees are necessary and ordinary business
expenses. RULING: 1 . N o . A t a x i s l e v i e d t o p r o v i d
e r e v e n u e f o r government operations, while the proceeds of
the margin fee are applied to strengthen our country's
international reserves. T h e m a rg in fe e w a s im p o se d b y
th e S ta te in th e e xe rcise o f i t s p o l i c e p o w e r a n
d n o t t h e p o w e r o f t a x a t i o n . 2. N o . Ordinarily,
an expense will be considered 'necessary' where the expenditure is
appropriate and helpful in the development of th e ta xp a ye r's b
u sin e ss. It is 'o rd in a ry' w h e n it co n n o te s a p a ym
e n t w h ich is n o rm a l in re la tio n to th e b u sin e ss o f
th e t a x p a y e r a n d t h e s u r r o u n d i n g
circumstances. Since the margin fees in question were incurred for
the r e m i t t a n c e of funds to Esso's Head Office in New York,
which is a separate a n d d i s t i n c t i n c o m e t a x p a y e
r f r o m t h e b r a n c h i n t h e P h ilip p in e s, fo r its d
isp o sa l a b ro a d , it ca n n e v e r b e sa id therefore that
the margin fees were appropriate and helpful in t h e d e v e l o p
m e n t o f E s s o ' s b u s i n e s s i n t h e P h i l i p p i n
e s e xclu sive ly o r w e re in cu rre d fo r p u rp o se s p ro p
e r to th e co n d u ct o f th e a ffa irs o f E sso 's b ra n ch
in th e P h ilip p in e s e x c l u s i v e l y o r f o r t h e p u
r p o s e o f r e a l i z i n g a p r o f i t o r o f minimizing a
loss in the Philippines exclusively
53. PHILIPPINE AIRLINES, INC. (PAL), plaintiff-appellant, vs.
ROMEO F. EDU, in his capacity as Land Transportation Commissioner,
and UBALDO CARBONELL, in his capacity as National Treasurer,
defendants-appellants. 1988 Aug 15En Banc G.R. No. L-41383 FACTS:
Under its franchise, PAL is exempt from the payment of taxes.
However, LTO Commissioner issued a regulation requiring all tax
exempt entities, among them PAL to pay motor vehicle registration
fees. Despite PAL's protestations, the appellee refused to register
the appellant's motor vehicles unless the amounts imposed under
Republic Act 4136 were paid. The appellant thus paid, under
protest. After paying under protest, PAL demanded a refund of the
amounts paid, invoking the ruling in Calalang v. Lorenzo (97 Phil.
212 [1951]) where it was held that motor vehicle registration fees
are in reality taxes from the payment of which PAL is exempt by
virtue of its legislative franchise. Edu denied the request for
refund basing his action on the decision in Republic v. Philippine
Rabbit Bus Lines, Inc., (32 SCRA 211, March 30, 1970) to the effect
that motor vehicle registration fees are regulatory exactions and
not revenue measures and, therefore, do not come within the
exemption granted to PAL under its franchise. Hence, PAL filed the
complaint against Land Transportation Commissioner Romeo F. Edu and
National Treasurer Ubaldo Carbonell. The trial court rendered a
decision dismissing the appellant's complaint "guided by the later
ruling laid down by the Supreme Court in the case of Republic v.
Philippine Rabbit Bus Lines, Inc. (supra)." From this judgment, PAL
appealed to the Court of Appeals which certified the case to us.
ISSUE: What is the nature of motor vehicle registration fees? Are
they taxes or regulatory fees? HELD: The motor vehicle registration
fees are taxes. It appears that the expenditures of the Motor
Vehicle Office are but a small portion ---- about 5 per centum ----
of the total collections from motor vehicle registration fees. And
as proof that the money collected is not intended for the
expenditures of that office, the law itself provides that all such
money shall accrue to the funds for the construction and
maintenance of public roads, streets and bridges. It is thus
obvious that the fees are not collected for regulatory purposes,
that is to say, as an incident to the enforcement of regulations
governing the operation of motor vehicles on public highways, for
their express object is to provide revenue with which the
Government is to discharge one of its principal functions ---- the
construction and maintenance of public highways for everybody's
use. They are veritable taxes, not merely fees.
If the purpose is primarily revenue, or if revenue is, at least,
one of the real and substantial purposes, then the exaction is
properly called a tax (Umali, id.) Such is the case of motor
vehicle registration fees. The conclusions become inescapable in
view of Section 70(b) of Rep. Act 587 quoted in the Calalang case.
The same provision appears as Section 59(b) in the Land
Transportation Code. It is patent there from that the legislators
had in mind a regulatory tax as the law refers to the imposition on
the registration, operation or ownership of a motor vehicle as a
"tax or fee." Though nowhere in Rep. Act 4136 does the law
specifically state that the imposition is a tax, Section 59(b)
speaks of "taxes or fees . . . for the registration or operation or
on the ownership of any motor vehicle, or for the exercise of the
profession of chauffeur . . ." making the intent to impose a tax
more apparent. Thus, even Rep. Act 5448 cited by the respondents,
speak of an "additional tax," where the law could have referred to
an original tax and not one in addition to the tax already imposed
on the registration, operation, or ownership of a motor vehicle
under Rep. Act 4136. Simply put, if the exaction under Rep. Act
4136 were merely a regulatory fee, the imposition in Rep. Act 5448
need not be an "additional" tax. Rep. Act 4136 also speaks of other
"fees" such as the special permit fees for certain types of motor
vehicles (Sec. 10) and additional fees for change of registration
(Sec. 11). These are not to be understood as taxes because such
fees are very minimal to be revenue-raising. Thus, they are not
mentioned by Sec. 59(b) of the Code as taxes like the motor vehicle
registration fee and chauffeurs' license fee. Such fees are to go
into the expenditures of the Land Transportation Commission as
provided for in the last proviso of sec. 61, aforequoted. SECOND
ISSUE: May the respondent administrative agency be required to
refund the amounts stated in the complaint of PAL? The answer is
NO. The claim for refund is made for payments given in 1971. It is
not clear from the records as to what payments were made in
succeeding years. We have ruled that Section 24 of Rep. Act No.
5431, dated June 27, 1968, repealed all earlier tax exemptions of
corporate taxpayers found in legislative franch