Coca-Cola Bottlers PH Inc., v.

City of Manila, Liberty Toledo (City

Treasurer) and Joseph Santiago (Chief of Licensing Division)
G.R. No. 156252; June 27, 2006; Chico-Nazario, J;
Facts:

Coca-Cola Bottlers Philippines, Inc. (COCA-COLA) is a corporation engaged in

the business of manufacturing and selling beverages. It maintains a sales
office in the City of Manila.
[Feb 25, 2000] The City of Manila approved Tax Ordinance No. 7988
(Revised Revenue Code of the City of Manila)
o It increased the tax rates applicable to certain establishments
operating in the City, including COCA-COLA.
o It likewise amended Sec. 21 of the old tax code by deleting the
phrase: all registered business in the City of Manila that are already
paying the aforementioned tax shall be exempted from payment
thereof.
COCA-COLA filed before the DOJ (invoking Sec. 187 of the LGC) a petition
against the City of Manila and its Sangguniang Panglungsod questioning the
legality of said Sec. 21 of Tax Ordinance 7988.
o It alleged that the provision imposed additional business tax on
business that are already subject to business tax under other sections
of the Code, beyond the taxing power of the City
[Aug. 17, 2000] DOJ Resolution: Declared Tax Ordinance 7988 null and void
and without legal effect.
o According to DOJ, the City of Manila violated Sec. 188 of the LGC and
its IRR because it failed to comply with the mandatory requirement
that after approval of any tax ordinance or revenue measures they
should be published in full for 3 consecutive days in a newspaper of
local circulation. The City only published the Ordinance once May
22, 2000 issue of the Philippine post.
o It is clear from the provisions of the LGC and its IRR that the
requirement of publication is MANDATORY and leaves no choice. The
use of the word shall is imperative. The essence of publication is
simply to inform the people and the entities who may likely be
affected, of the existence of the tax measure.
o The strict observance of the said procedural requirement is the only
safeguard against any unjust and unreasonable exercise of the taxing
powers, ensuring that the taxpayers are notified through publication
of the existence of the measure, and are therefore able to voice out
their views or objections to the said measure. For, after all, taxes are
obligatory exactions or enforced contributions corollary to taking of
property.
The City failed to file an MR or appeal so the Resolution lapsed into
finality.
On another incident: A certain Atty. Aurelio, in behalf of his client, Singer
Sewing Machine Co., requested an opinion from the Bureau of Local

Government finance (BLGF) WON the City has the right to impose Tax
Ordinance 7988 despite DOJs Resolution.
o [Nov. 2000] The BLGF issued an Indorsement ordering the City
Treasurer to cease and desist from enforcing Tax Ordinance
7988 in view of DOJs resolution.
Despite the Resolution and the Indorsement the city continued to assess
COCA-COLA with business tax for 2001.
COCA-COLA filed a Complaint with RTC Manila to enjoin the City and its
treasurer from implementing the ordinance.
o [Nov. 2001] the RTC decided in favour of COCA-COLA declaring the
injunction against the City permanent, enjoining implementation of
the Tax Ordinance 7988.
[Feb 2001] During the pendency of the case: the City of Manila approved
Tax Ordinance 8011 which amended certain sections of 7988.
[July 2001] This Ordinance was again assailed by COCA-COLA
before the DOJ. The DOJ likewise declared 8011 as null and void
saying it has no effect since it amended something that has
been previously declared NULL and void. The DOJ said the City
should have enacted a tax measure complying strictly with the
requirements of law.
The City appealed this decision with the RTC then the SC. On
[Jun 23, 2003] the Supreme Court denied the Citys MR with
FINALITY. [So July 2001 Resolution declaring 8011 as void final
only as of Jun. 2003]
[May 2002] the City filed with RTC Manila an MR of its Nov. 2001 decision
(see third bullet of this page) on the basis of its enactment of Tax ordinance
8011 which amended 7988 (which was not yet declared void with finality at
that time)
o RTC Manila granted the Citys MR and dismissed COCA-COLAs
case for injunction.
COCA-COLA is now assailing said decision of the RTC.

Issues:
WON the RTC was correct in granting the Citys MR and in dismissing COCACOLAs complaint - NO.
Ratio:

It is undisputed that Tax Ordinance 7988 has already been declared by the
DOJ Secretary, in its [Aug 2000] Resolution, as null and void and without
legal effect due to the Citys failure to satisfy the requirement that
the ordinance be published for 3 consecutive days as required by
law. The City never appealed this resolution so it attained finality after the
lapse of the period of appeal.
Furthermore, the RTC of Manila reiterated this failure to follow procedure in
enactment of tax measures (as mandated by Sec. 188 of the LGC) in its
[Nov. 2001] Decision therefore Tax 7988 is really null and void. BUT despite

this, in its [May 2002] Ruling the RTC dismissed COCA-COLAs complaint on
the basis of Tax Ordinance 8011 which purportedly amended 7988.
Tax Ordinance 8011 is likewise null and void. As elucidated by the DOJ :
respondent should have enacted another tax measure which strictly
complies with the requirements of law, both procedural and substantive. The
passage of the assailed ordinance did not have the effect of curing the
defects of Ordinance No. 7988 which, any way, does not legally exist."
People v. Lim: if an order or law sought to be amended is invalid, then it
does not legally exist, and there should be no occasion or need to amend it.