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, liable for business taxes based on its gross income/revenue for January to
August 1998.
Petitioner, versus
Prefatorily, it is necessary to distinguish between a business tax vis--vis an
Business taxes imposed in the exercise of police power for regulatory
purposes are paid for the privilege of carrying on a business in the year the
G.R. No. 154092] tax was paid. It is paid at the beginning of the year as a fee to allow the
business to operate for the rest of the year. It is deemed a prerequisite to
July 14, 2005 the conduct of business.
Facts Income tax, on the other hand, is a tax on all yearly profits arising from
property, professions, trades or offices, or as a tax on a persons income,
Petitioner is a domestic corporation engaged in the manufacturing,
emoluments, profits and the like. It is tax on income, whether net or gross
importing, exporting and wholesaling of petroleum products. Petitioners
realized in one taxable year.[15] It is due on or before the 15th day of the
principal office was at national development company building, located in
4th month following the close of the taxpayers taxable year and is generally
respondent’s jurisdiction. On 1998, they filed with the city treasurer of
regarded as an excise tax, levied upon the right of a person or entity to
Makati for the retirement of its business within the city.
receive income or profits.
Said retirement of business was granted with petitioner paying the
Based on this foregoing provision, on the year an establishment retires or
assesment business taxes, however, under protest.
terminates its business within the municipality, it would be required to
On 1999. Petitioner claimed for a refund but this was denied contending pay the difference in the amount if the tax collected, based on the previous
that it did not retire its business but merely transferred, hence not entitled years gross sales or receipts, is less than the actual tax due based on the
to a refund. Petitioner elevated the matter to the RTC, the court denying current years gross sales or receipts.
the claim.
For the year 1998, petitioner paid a total of P2,262,122.48 to the City
According to petitioner, the 1997 gross sales/revenue is merely the basis Treasurer of Makati[18] as business taxes for the year 1998. The amount of
for the amount of business taxes due for the privilege of carrying on a tax as computed based on petitioners gross sales for 1998 is
business in the year when the tax was paid. only P1,331,638.84. Since the amount paid is more than the amount
computed based on petitioners actual gross sales for 1998, petitioner upon
respondents argue that since local taxes, which include business taxes, are its retirement is not liable for additional taxes to the City of Makati. Thus,
paid either within the first twenty days of January of each year or of each we find that the respondent erroneously treated the assessment and
subsequent quarter, as the case may be, what the taxpayer actually pays collection of business tax as if it were income tax, by rendering an
during the recorded calendar year is actually its business tax for the additional assessment of P1,331,638.84 for the revenue generated for the
preceding year. year 1998.
Issue: is petitioner entitled to a refund? NATIONAL POWER CORPORATION, petitioner,
Ruling: Yes vs.
The trial court erred when it said that the payments made by petitioner in
1998 are payments for business tax incurred in 1997 which only accrued G.R. No. 149110 April 9, 2003
in January 1998. Likewise, it erred when it ruled that petitioner was still
Facts In view of the afore-quoted provision of the LGC, the doctrine in Basco vs.
Philippine Amusement and Gaming Corporation44 relied upon by the
Petitioner is a government-owned and controlled corporation created petitioner to support its claim no longer applies. To emphasize,
under Commonwealth Act No. 120, as amended.4 It is tasked to undertake the Basco case was decided prior to the effectivity of the LGC, when no law
the "development of hydroelectric generations of power and the production empowering the local government units to tax instrumentalities of the
of electricity from nuclear, geothermal and other sources, as well as, the National Government was in effect.
transmission of electric power on a nationwide basis."
section 151 in relation to section 137 of the LGC clearly authorizes the
Petitioner, whose capital stock was subscribed and paid wholly by the respondent city government to impose on the petitioner the franchise tax
Philippine Government,10 refused to pay the tax assessment. It argued in question.
that the respondent has no authority to impose tax on government entities.
Petitioner also contended that as a non-profit organization, it is exempted o determine whether the petitioner is covered by the franchise tax in
from the payment of all forms of taxes, charges, duties or fees11 in question, the following requisites should concur: (1) that petitioner has a
accordance with sec. 13 of Rep. Act No. 6395. "franchise" in the sense of a secondary or special franchise; and (2) that it
is exercising its rights or privileges under this franchise within the
The RTC ruled in favor of petitioner. The court said that local government territory of the respondent city government.
have no power to tax instrumentalities of the national government.
Petitioner fulfills the first requisite. Commonwealth Act No. 120, as
Court of Appeals reversed the trial court's Order17 on the ground that
amended by Rep. Act No. 7395, constitutes petitioner's primary and
section 193, in relation to sections 137 and 151 of the LGC, expressly
secondary franchises. It serves as the petitioner's charter, defining its
withdrew the exemptions granted to the petitioner.
composition, capitalization, the appointment and the specific duties of its
Petitioner, however, submits that it is not liable to pay an annual franchise corporate officers, and its corporate life span.
tax to the respondent city government. It contends that sections 137 and
Petitioner also fulfills the second requisite. It is operating within the
151 of the LGC in relation to section 131, limit the taxing power of the
respondent city government's territorial jurisdiction pursuant to the
respondent city government to private entities that are engaged in trade powers granted to it by Commonwealth Act No. 120, as amended. From its
or occupation for profit.2
operations in the City of Cabanatuan, petitioner realized a gross income of
1.Petitioner also alleges that it is an instrumentality of the National P107,814,187.96 in 1992. Fulfilling both requisites, petitioner is, and ought
Government,25 and as such, may not be taxed by the respondent city to be, subject of the franchise tax in question.
To stress, a franchise tax is imposed based not on the ownership but on the
Petitioner contends that section 193 of Rep. Act No. 7160, withdrawing the exercise by the corporation of a privilege to do business. The taxable entity
tax privileges of government-owned or controlled corporations, is in the is the corporation which exercises the franchise, and not the individual
nature of an implied repeal. A special law, its charter cannot be amended stockholders. By virtue of its charter, petitioner was created as a separate
or modified impliedly by the local government code which is a general law. and distinct entity from the National Government. It can sue and be sued
under its own name,61 and can exercise all the powers of a corporation
Finally, petitioner submits that the charter of the NPC, being a valid under the Corporation Code.62
exercise of police power, should prevail over the LGC.
To be sure, the ownership by the National Government of its entire capital
Issue: WON petitioner is correct in claiming that it is exempt from stock does not necessarily imply that petitioner is not engaged in business.
A closer reading of its charter reveals that even the legislature treats the
Ruling. No. character of the petitioner's enterprise as a "business," although it limits
petitioner's profits to twelve percent (12%). he main difference is that the
petitioner is mandated to devote "all its returns from its capital On 25 February 2000, the City Mayor of Manila approved Tax Ordinance
investment, as well as excess revenues from its operation, for No. 7988, otherwise known as Revised Revenue Code of the City
expansion"70 while other franchise holders have the option to distribute of Manila repealing Tax Ordinance No. 7794 entitled, Revenue Code of the
their profits to its stockholders by declaring dividends. City of Manila. Tax Ordinance No. 7988 amended certain sections of Tax
Ordinance No. 7794 by increasing the tax rates applicable to certain
section 193 of the LGC withdrew, subject to limited exceptions, the
establishments operating within the territorial jurisdiction of the City
sweeping tax privileges previously enjoyed by private and public of Manila, including herein petitioner.
corporations. Contrary to the contention of petitioner, section 193 of the
LGC is an express, albeit general, repeal of all statutes granting tax Aggrieved, petitioner questions the constitutionality of the said ordinance
exemptions from local taxes. by invoking Section 187 of the LGC. The DOJ secretary, issued a
resolution in favor ofpeittioner and the said ordinance was declared null
It is a basic precept of statutory construction that the express mention of
and void and withut legal effect. The DOJ secretary ruled in the matter in
one person, thing, act, or consequence excludes all others as expressed in
terms of the failure of the City in following the publication procedures as
the familiar maxim expressio unius est exclusio alterius.73 Not being a provided in the IRR of the LGC.
local water district, a cooperative registered under R.A. No. 6938, or a non-
stock and non-profit hospital or educational institution, petitioner clearly However the city of Manila continued to assess businessby virtue of the
does not belong to the exception. It is therefore incumbent upon the Tax ordinance. Hence a complaint before the RTC of Manila was filed,
petitioner to point to some provisions of the LGC that expressly grant it where the court ruled in favor of petitioner.
exemption from local taxes.
During the pendency of the said case, the City Mayor of Manila approved
But this would be an exercise in futility. Section 137 of the LGC clearly on 22 February 2001 Tax Ordinance No. 8011 entitled, An Ordinance
states that the LGUs can impose franchise tax "notwithstanding any Amending Certain Sections of Ordinance No. 7988.
exemption granted by any law or other special law." This particular
provision of the LGC does not admit any exception. Said tax ordinance was again challenged by petitioner before the DOJ
through a Petition questioning the legality of the aforementioned tax
It is worth mentioning that section 192 of the LGC empowers the LGUs, ordinance on the grounds that (1) said tax ordinance amends a tax
through ordinances duly approved, to grant tax exemptions, initiatives or ordinance previously declared null and void and without legal effect by the
reliefs.77 But in enacting section 37 of Ordinance No. 165-92 which imposes DOJ; and (2) said tax ordinance was likewise not published upon its
an annual franchise tax "notwithstanding any exemption granted by law approval in accordance with Section 188 of the Local Government Code of
or other special law," the respondent city government clearly did not intend 1991.
to exempt the petitioner from the coverage thereof.


Said tax ordinance was rendered by the DOJ secretary again as null and
Versus CITY OF MANILA, LIBERTY M.TOLEDO City Treasurer and void. After a series of denied MRs with a petitioner for certiorari reaching
JOSEPH SANTIAGO Chief, Licensing Division, the SC, which was, again denied.

Respondents. G.R. No. 156252

Despite the nullity of Tax Ordinance No. 7988, the court a quo, in the
assailed Order, dated 8 May 2002, went on to dismiss petitioners case on
Petitioner Coca-Cola Bottlers Philippines, Inc. is a corporation engaged in the force of the enactment of Tax Ordinance No. 8011, amending Tax
the business of manufacturing and selling beverages and maintains a sales Ordinance No. 7988.
office located in the City of Manila. Issue: WON the assailed ordinance is null and void
Ericsson Telecommunications, Inc. (petitioner), a corporation with
principal office in Pasig City, is engaged in the design, engineering, and
Ruling: Yes. marketing of telecommunication facilities/system.
It is undisputed from the facts of the case that Tax Ordinance No. 7988 has Petitioner received assessment notice for business tax deficiency on two
already been declared by the DOJ Secretary, in its Order, dated 17 August separate occasions. Petitioner protested that the local business tax
2000, as null and void and without legal effect due to respondents failure computation should be based on gross receipts and not on gross revenue.
to satisfy the requirement that said ordinance be published for three
consecutive days as required by law. Neither is there quibbling on the fact On both grounds, the protest was denied by respondent. This prompted
that the said Order of the DOJ was never appealed by the City of Manila, petitioner to elevate the matter to the RTC praying the annulment and
thus, it had attained finality after the lapse of the period to appeal. cancellation of petitioners deficiency.

the RTC of Manila, Branch 21, in its Decision dated 28 November 2001, The RTC ruled in favor of petitioner but this was overturned by the CA.
reiterated the findings of the DOJ Secretary that respondents failed to
follow the procedure in the enactment of tax measures as mandated by Respondent assessed deficiency local business taxes on petitioner based on
Section 188 of the Local Government Code of 1991, in that they failed to the latter gross revenue as reported in its financial statements, arguing
publish Tax Ordinance No. 7988 for three consecutive days in a newspaper that gross receipts is synonymous with gross earnings/revenue, which, in
turn, includes uncollected earnings. Petitioner, however, contends that
of local circulation. From the foregoing, it is evident that Tax Ordinance
only the portion of the revenues which were actually and constructively
No. 7988 is null and void as said ordinance was published only for one day
received should be considered in determining its tax base.
in the 22 May 2000 issue of the Philippine Post in contravention of the
unmistakable directive of the Local Government Code of 1991. Issue: WON local business tax on contractors should be based on gross
receipts or gross revenue.
Significantly, said amending ordinance was likewise declared null and void
by the DOJ Secretary in a Resolution, dated 5 July 2001, elucidating Ruling: Gross receipts
that [I]nstead of amending Ordinance No. 7988, [herein] respondent
should have enacted another tax measure which strictly complies with the Insofar as petitioner is concerned, the applicable provision is subsection
requirements of law, both procedural and substantive. The passage of the (e), Section 143 of the same Code covering contractors and other
assailed ordinance did not have the effect of curing the defects of Ordinance independent contractors. The above provision specifically refers
No. 7988 which, any way, does not legally exist. Said Resolution of the DOJ to gross receipts which is defined under Section 131 of the Local
Secretary had, as well, attained finality by virtue of the dismissal with Government Code,
finality by this Court of respondents Petition for Review on Certiorari in
The law is clear. Gross receipts include money or its equivalent actually or
G.R. No. 157490 assailing the dismissal by the RTC of Manila, Branch 17,
constructively received in consideration of services rendered or articles
of its appeal due to lack of jurisdiction in its Order, dated 11 August 2003.
sold, exchanged or leased, whether actual or constructive.
There is, therefore, constructive receipt, when the consideration for the
Versus CITY OF PASIG, represented by its City Mayor, Hon. Vicente P. articles sold, exchanged or leased, or the services rendered has already
Eusebio, et al G.R. NO. 17666 2007 been placed under the control of the person who sold the goods or rendered
the services without any restriction by the payor.

In contrast, gross revenue covers money or its equivalent actually or

Facts constructively received, including the value of services rendered or articles
sold, exchanged or leased, the payment of which is yet to be received. This
is in consonance with the International Financial Reporting
Standards,[21] which defines revenue as the gross inflow of economic
benefits (cash, receivables, and other assets) arising from the ordinary
operating activities of an enterprise (such as sales of goods, sales of
services, interest, royalties, and dividends),[22] which is measured at the Respondent received a revised assessment of over its machineries and
fair value of the consideration received or receivable. pieces of equipment on 2007. The assessment represented deficiency of real
property tax due from 1994 up to 2007.
In petitioners case, its audited financial statements reflect income or
revenue which accrued to it during the taxable period although not yet Respondent contested the assessment contending that the subject
actually or constructively received or paid. This is because petitioner uses assessment pertained to properties previously declared and that the
the accrual method of accounting, where income is reportable when all the assessment, covering 10 years is not allowed under the LGC; that a valid
events have occurred that fix the taxpayers right to receive the income, and assessment should only cover 1997 to 2007 and that certain items were not
the amount can be determined with reasonable accuracy; the right to excluded in the assessment and neither was there any prompt
receive income, and not the actual receipt, determines when to include the determination of the fair market value of the properties.
amount in gross income.[25]
Nevertheless, petitioner filed a follow up notice with a warning that the
properties would be levied and auctioned when respondent fails to pay.
The imposition of local business tax based on petitioners gross revenue will Respondent filed a notice to petitioner about its pending appeal. However
inevitably result in the constitutionally proscribed double taxation taxing petitioner replied that only the payment would bar the realty taxes due
of the same person twice by the same jurisdiction for the same pursuant to sec. 231 and 252 of the LGC.
thing[26] inasmuch as petitioners revenue or income for a taxable year will
definitely include its gross receipts already reported during the previous Petron on 2007 received a notice of the sale of its properties, On even date,
year and for which local business tax has already been paid. Petron filed with the Regional Trial Court of Bataan the instant case
(docketed as Civil Case No. 8801) for prohibition with prayer for the
issuance of a temporary restraining order (TRO) and preliminary
EMERLINDA S. TALENTO in her capacity as the Provincial

Treasurer of the Province of Bataan, The trial court issued a TRO for 20 days which the petitioner filed an
urgent motion for immediate dissolution. The issuance of writ of
Petitioner, Present: preliminary injunction was given in favor of respondent Petron provided
they will post a bond.
Petitioner elevated the matter directly to the SC via rule 65 of the RoC.

Presiding Judge of the Regional Trial

Issue: WON the collection of taxes can be suspended by reason of an appeal
Court of Bataan, Branch 3, and Promulgated:
and posting of a surety bond.

Note: there was error in using the correct mode of appeal here. It should
G.R. No. 180884 have been rule 45 of the RoC . There’s also failure to comply with the 15
day reglementary period. Hence rendering the order of the trial court final
2008 and executory.
No appeal taken to the Court of Appeals from the Collector of Internal
Revenue x x x shall suspend the payment, levy, distraint, and/or sale of
any property for the satisfaction of his tax liability as provided by existing
law. Provided, however, That when in the opinion of the Court the
collection by the aforementioned government agencies may jeopardize the
The urgency and paramount necessity for the issuance of a writ of interest of the Government and/or the taxpayer the Court at any stage of
injunction becomes relevant in the instant case considering that what is the processing may suspend the collection and require the taxpayer either
being enjoined is the sale by public auction of the properties of Petron to deposit the amount claimed or to file a surety bond for not more than
amounting to at least P1.7 billion and which properties are vital to its double the amount with the Court
business operations. If at all, the repercussions and far-reaching
implications of the sale of these properties on the operations of Petron
merit the issuance of a writ of preliminary injunction in its favor. ROMULO D. SAN JUAN, Petitioner,
We are not unaware of the doctrine that taxes are the lifeblood of the Versus RICARDO L. CASTRO, in his capacity as City Treasurer of
government, without which it can not properly perform its functions; and Marikina City, Respondent.
that appeal shall not suspend the collection of realty taxes. However, there
is an exception to the foregoing rule, i.e., where the taxpayer has shown a G.R. No. 174617
clear and unmistakable right to refuse or to hold in abeyance the payment
of taxes. In the instant case, we note that respondent contested the revised
assessment on the following grounds:that the subject assessment Petitioner conveyed by deed of assignment the properties it owned to
pertained to properties that have been previously declared; that the Saints and Angels Realty Corporation, in exchange for shares of stock
assessment covered periods of more than 10 years which is not allowed therein. Respondent went to the office of the Marikina City Treasurer to
under the LGC; that the fair market value or replacement cost used by pay the transfer tax based on the consideration stated in the Deed of
petitioner included items which should be properly excluded; that prompt Assignment, he was informed however, that the tax is based on the fair
payment of discounts were not considered in determining the fair market market value of the property.
value; and that the subject assessment should take effect a year after or on
January 1, 2008. To our mind, the resolution of these issues would have a Petitioner, in writing protested the basis of the tax which was followed by
direct bearing on the assessment made by petitioner. Hence, it is necessary filing before the RTC of Marikina a petitioner for mandamus and damages
that the issues must first be passed upon before the properties of against the city treasurer and the same be compelled to perform a
respondent is sold in public auction. ministerial duty that is to accept the payment of the transfer tax based on
the consideration of the assignment.

Before the RTC, respondent commented on the petition thus;

In addition to the fact that the issues raised by the respondent would have
a direct impact on the validity of the assessment made by the petitioner, [M]onetary consideration as used in Section 135 of R.A. 7160 does not only
we also note that respondent has posted a surety bond equivalent to the pertain to the price or money involved but likewise, as in the case of
amount of the assessment due. donations or barters, this refers to the value or monetary equivalent of
what is received by the transferor.
Corollarily, Section 11 of Republic Act No. 9282,[23] which amended
Republic Act No. 1125 (The Law Creating the Court of Tax Appeals)

Section 11: Who may appeal; mode of appeal; effect of appeal

In the case at hand, the monetary consideration involved is the par value court of competent jurisdiction [15] or paid the tax and then sought a
of shares of stocks acquired by the petitioner in exchange for his real refund.[16]

Petitioner did not observe any of these remedies available to him,

The respondent did not refuse to accept payment, it is the petitioner that however. He instead opted to file a petition for mandamus to compel
refuses to pay the correct amount of transfer tax. respondent to accept payment of transfer tax as computed by him.

The petitioner did not exhaust the available administrative

remedies. Under the Local Government Code, the petitioner should have
filed an appeal on the tax assessment and made a payment under protest
pending the resolution thereof.The issues raised in the case therein, being
matters of facts and law, the petitioner should have availed of the aforesaid
relief before resorting to a court action. x x x

The subject of this Petition is the performance of a duty which is not

ministerial in character. Assessment of tax liabilities or obligations and
the corresponding duty to collect the same involves a degree of discretion.

Issue: WON mandamus was the proper remedy of petitioner.

Ruling: NO. In the case at bar, the condition that there is no other plain,
speedy and adequate remedy in the ordinary course of law is absent.

In the case at bar, the condition that there is no other plain, speedy and
adequate remedy in the ordinary course of law is absent.

That petitioner protested in writing against the assessment of tax due and
the basis thereof is on record as in fact it was on that account that
respondent sent him the above-quoted July 15, 2005 letter which operated
as a denial of petitioners written protest.

Petitioner should thus have, following the earlier above-quoted Section 195
of the Local Government Code, either appealed the assessment before the

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