Court of Tax Appeals

1. Commissioner of Internal Revenue vs. Court of Appeals and Atlas Consolidated Mining and
Development Corporation
G. R. No. 104151, 10 March 1995
242 SCRA 289

Facts:
Atlas Consolidated Mining was assessed twice by the BIR to pay P12,391,070.51 and P13,531,466.80 ad
valorem taxes, in which the former protested both assessments. It filed two separate petitions for
review with the CTA which ruled in favor of Atlas, absolving its liability to pay the said ad valorem taxes
with regard to copper and silver, but held its liability to pay the same tax due to its late payment, and
later affirmed by the CA.

Issue:
Whether or not the decision made by the CTA regarding its decision on resolving tax problems can be
set aside.

Held:
No.
The Commissioner of Internal Revenue argues that the ruling in the case above stated is not binding,
considering that the incumbent Commissioner of Internal Revenue is not bound by decisions or rulings
of his predecessor when he finds that a different construction of the law should be adopted, invoking
therefor the doctrine enunciated in Hilado vs. Collector of Internal Revenue, et al. This trenches on
specious reasoning. What was involved in the Hilado case was a previous ruling of a former
Commissioner of Internal Revenue. In the case at bar, the Commissioner based his findings on a previous
decision rendered by the Court of Tax Appeals itself.

The Court of Tax Appeals is not a mere superior administrative agency or tribunal but is a part of the
judicial system of the Philippines. It was created by Congress pursuant to Republic Act No. 1125,
effective June 16, 1954, as a centralized court specializing in tax cases. It is a regular court vested with
exclusive appellate jurisdiction over cases arising under the National Internal Revenue Code, the Tariff
and Customs Code, and the Assessment Law.

Although only the decisions of the Supreme Court establish jurisprudence or doctrines in this
jurisdiction, nonetheless the decisions of subordinate courts have a persuasive effect and may serve as
judicial guides. It is even possible that such a conclusion or pronouncement can be raised to the status
of a doctrine if, after it has been subjected to test in the crucible of analysis and revision the Supreme
Court should find that it has merits and qualities sufficient for its consecration as a rule of jurisprudence.

Furthermore, as a matter of practice and principle, the Supreme Court will not set aside the conclusion
reached by an agency such as the Court of Tax Appeals, which is, by the very nature of its function,
dedicated exclusively to the study and consideration of tax problems and has necessarily developed an
expertise on the subject, unless there has been an abuse or improvident exercise of authority on its
part.
2. Commissioner of Internal Revenue v. Philippine American Life Insurance Company
G. R. No. 105208, 29 May 1995
244 SCRA 446

Facts:
Philippine American Life Insurance Company (Philam) paid its first and second quarterly corporate
income taxes, in which it declared its net taxable income and tax refund in the third quarter. In the
fourth quarter, Philam suffered losses and had no income tax liability in which it used its tax refund from
the first two quarters in which they paid taxes. The next year, Philam suffered another loss and declared
no tax liability, but applied their overpaid income taxes for the previous year as tax credit. Philam filed a
claim for tax refund and later on a petition for review with the CTA with respect for the same tax refund
claim. It filed another claim for tax refund with the appellate division of the CIR and later on another
petition for review with the CTA with respect to the said claim. The CTA ruled in favor of Philam and
affirmed by the CA.

Issue:
Whether or not Philam has satisfactorily shown by competent evidence that it is entitled to the tax
refund.

Held:
It may be observed that although quarterly taxes due are required to be paid within sixty days from the
close of each quarter, the fact that the amount shall be deducted from the tax due for the succeeding
quarter shows that until a final adjustment return shall have been filed, the taxes paid in the preceding
quarters are merely partial taxes due from a corporation. Neither amount can serve as the final figure to
quantify what is due the government nor what should be refunded to the corporation. This
interpretation may be gleaned from the last paragraph of Section 69 of the Tax Code which provides
that the refundable amount, in case a refund is due a corporation, is that amount which is shown on its
final adjustment return and not on its quarterly returns.

Therefore, when private respondent paid P3,246,141.00 on May 30, 1983, it would not have been able
to ascertain on that date, that the said amount was refundable. The same applies with cogency to the
payment of P396,874.00 on August 29, 1983.

Clearly, the prescriptive period of two years should commence to run only from the time that the refund
is ascertained, which can only be determined after a final adjustment return is accomplished. In the
present case, this date is April 16, 1984, and two years from this date would be April 16, 1986. The
record shows that the claim for refund was filed on December 10, 1985 and the petition for review was
brought before the CTA on January 2, 1986. Both dates are within the two-year reglementary period.
Private respondent being a corporation, Section 292 (now Section 230) cannot serve as the sole basis for
determining the two-year prescriptive period for refunds. As we have earlier said in the TMX Sales case,
Sections 68, 69, and 70 on Quarterly Corporate Income Tax Payment and Section 321 should be
considered in conjunction with it. Moreover, even if the two-year period had already lapsed, the same is
not jurisdictional and may be suspended for reasons of equity and other special circumstances.

Petitioner also raises the issue of whether or not private respondent has satisfactorily shown by
competent evidence that it is entitled to the amount sought to be refunded. This being a question of
fact, this Court is bound by the findings of the Court of Tax Appeals which has clearly established the
propriety of private respondent’s claim for refund for excess 1983 quarterly income tax payments. On
the other hand, petitioner Commissioner of Internal Revenue has failed to present any documentary or
testimonial evidence in support of his case. Instead, he opted to postpone the hearings several times
and later chose to submit the case for decision on the basis of the records and pleadings of instant case.

To repeat, we find that private respondent has presented sufficient evidence in support of its claim for
refund, whereas petitioner has failed to controvert the same adequately.

3. Filipinas Investment and Finance Corporation vs Commissioner of Internal Revenue

G. R. No. L-23501, 16 May 1967
20 SCRA 50

Facts:
The CIR assessed Filipinas Investment an advance sales tax of P5,007.00 for an automobile purchase
from a tax-exempt individual plus P3,000.00 compromise penalty, totaling P5,307.00, which the latter
disputed the said assessment. After the denial of the dispute by the CIR, Filipinas Investment filed a
petition for review with the CTA, which ruled in favor of the CIR after finding that the corporation took
33 days to file its petition for review.

Issue:
Whether or not Filipinas Investment complied with the 30-day period to file a petition for review with
the CTA.

Held:
No.
It should be noted that respondent Commissioner's letter-assessment of April 18, 1961 became a
"disputed" assessment when petitioner requested for the cancellation and or withdrawal of the same in
its letter of May 15, 1961 (St. Stephen's Association vs. Collector of Internal Revenue, G.R. No. L-11238,
August 21, 1958); that respondent's letter of August 17, 1962, denying petitioner's request for
cancellation constitutes the decision on the "disputed" assessment, which is appealable to the Tax
Court, as contemplated under Sections 7 and 11 of Republic Act No. 1125; that petitioner's letter of
September 28, 1962 which respondent received on October 1, 1962 is a mere pro-forma request for
reconsideration of the letter-decision of August 17, 1962 and did not adduce new facts or arguments;
and that respondent's letter of July 22, 1963 which petitioner received on August 12, 1963 is the
resolution on the said request for reconsideration (North Camarines Lumber Co., Inc. vs. Collector of
Internal Revenue, G.R. No. L-12353, September 30, 1960).

The appellant's contention that the letter-decision of August 17, 1962 did not touch on its allegation in
its preceding letter (of May 15, 1961) that the automobile had passed through three previous non-tax
exempt-owners before reaching appellant's hands is not tenable. The Commissioner's letter aforesaid
expressly declared that, "According to the findings of our examiners, your client is the first non-tax
exempt entity to acquire ownership over the car in question;" and these words directly contradicted and
overruled appellant's pretense.

Considering that the period to appeal from a decision of the Commissioner of Internal Revenue to the
Tax Court under Republic Act No. 1125 is jurisdictional and non-extendable, and that a taxpayer may not
delay indefinitely a tax assessment by reiterating his original defenses over and over again, without,
substantial variation, the Tax Court correctly dismissed the petition for review filed by petitioner.
4. Commissioner of Internal Revenue v. Union Shipping Corporation
G. R. No. 66160, 21 May 1990
185 SCRA 547

Facts:
Yee Fong Hong, Ltd. and Union Shipping Corporation were assessed by the CIR the total sum of
P583,155.22 as deficiency income taxes, but it was protested by Union Shipping, followed by the
issuance of a warrant of distraint and levy by the CIR, without ruling on the said protest. Union Shipping
requested for the reinvestigation of the assessment and for the reconsideration of the summary
collection. The CIR, without acting on the said remedies, filed a collection case in the then CFI against
Union Shipping, in which a petition for review was filed afterwards. The CTA ruled in favor of Union
Shipping.

Issue:
Whether or not the period to appeal with the CTA commenced to run from the receipt of the warrant of
distraint and levy.

Held:
Yes.
There appears to be no dispute that petitioner did not rule on private respondent’s motion for
reconsideration but contrary to the above ruling of this Court, left private respondent in the dark as to
which action of the Commissioner is the decision appealable to the Court of Tax Appeals. Had he
categorically stated that he denies private respondent’s motion for reconsideration and that his action
constitutes his final determination on the disputed assessment, private respondent without needless
difficulty would have been able to determine when his right to appeal accrues and the resulting
confusion would have been avoided.

Much later, this Court reiterated the above-mentioned dictum in a ruling applicable on all fours to the
issue in the case at bar, that the reviewable decision of the Bureau of Internal Revenue is that contained
in the letter of its Commissioner, that such constitutes the final decision on the matter which may be
appealed to the Court of Tax Appeals and not the warrants of distraint (Advertising Associates, Inc. v.
Court of Appeals, 133 SCRA 769 [1984] italics supplied). It was likewise stressed that the procedure
enunciated is demanded by the pressing need for fair play, regularity and orderliness in administrative
action.

Under the circumstances, the Commissioner of Internal Revenue, not having clearly signified his final
action on the disputed assessment, legally the period to appeal has not commenced to run. Thus, it was
only when private respondent received the summons on the civil suit for collection of deficiency income
on December 28, 1978 that the period to appeal commenced to run.

The request for reinvestigation and reconsideration was in effect considered denied by petitioner when
the latter filed a civil suit for collection of deficiency income. So that on January 10, 1979 when private
respondent filed the appeal with the Court of Tax Appeals, it consumed a total of only thirteen (13) days
well within the thirty day period to appeal pursuant to Section 11 of R.A. 1125.
5. Yabes v. Flojo
G. R. No. L-46954, 20 July 1982
115 SCRA 278

Facts:
Doroteo Yabes was assessed by the CIR to pay percentage taxes plus surcharges and compromise
penalty, but the former protested the said assessment on the ground that his agreements with the
International Harvester Macleod, Inc. were of purchase and sale, and not of agency, hence he claimed
he was not liable to pay such kind of taxes. Yabes sought to reinvestigate the assessment but it was
denied due to lack of presentation of evidence to offset the findings of the CIR. He filed a tax waiver and
filed for the extension of the prescriptive period. However, he died and no settlement proceedings
occurred. The CTA ruled in favor of Yabes but was reversed by the Supreme Court in a previous case.
After the prescriptive period lapsed, an assessment was issued by the CIR to the heirs of Yabes, but they
filed a petition for review with the CTA, following the action filed by the CIR to the then CFI. The trial
court ruled in favor of CIR.

Issue:
Whether or not the period for filing of the petition for review with the CTA was complied.

Held:
Yes.
There is no reason for Us to disagree from or reverse the Court of Tax Appeals’ conclusion that under
the circumstances of this case, what may be considered as final decision or assessment of the
Commissioner is the filing of the complaint for collection in the respondent Court of First Instance of
Cagayan, the summons of which was served on petitioners on January 20, 1971, and that therefore the
appeal with the Court of Tax Appeals in CTA Case No. 2216 was filed on time. The respondent Court of
First Instance of Cagayan can only acquire jurisdiction over this case filed against the heirs of the
taxpayer if the assessment made by the Commissioner of Internal Revenue had become final and
incontestable. If the contrary is established, as this Court holds it to be, considering the aforementioned
conclusion of the Court of Tax Appeals on the finality and incontestability of the assessment made by
the Commissioner is correct, then the Court of Tax Appeals has exclusive jurisdiction over this case.
Petitioners received the summons in Civil Case No. II-7 of the respondent Court of First Instance of
Cagayan on January 20, 1971, and petitioners filed their appeal with the Court of Tax Appeals in CTA
Case No. 2216, on February 12, 1971, well within the thirty-day prescriptive period under Section 11 of
Republic Act No. 1125. The Court of Tax Appeals has exclusive appellate jurisdiction to review on appeal
any decision of the Collector of Internal Revenue in cases involving disputed assessments and other
matters arising under the National Internal Revenue Code.

For want of jurisdiction over the case, the Court of First Instance of Cagayan should have dismissed the
complaint filed in Civil Case No. II-7. The recommendation of the Solicitor General that the lower court
hold in abeyance any action or proceeding in Civil Case No. II-7 until after the Court of Tax Appeals shall
have finally decided CTA Case No. 2216, is untenable since the lower court has no jurisdiction over the
case. Jurisdiction over an action includes jurisdiction over all interlocutory matters incidental to the case
and deemed necessary to preserve the subject matter of the suit or protect interests of the parties.
Absent jurisdiction over the case, it would be improper for the Court of First Instance of Cagayan to take
cognizance over the case and act upon interlocutory matters of the case, as well.
The dismissal of the complaint, however, is not sufficient. The ends of justice would best be served by
considering the complaint filed in Civil Case No. II-7 not only as a final notice of assessment but also as a
counterclaim in CTA Case No. 2216, in order to avoid mutiplicity of suits, as well as to expedite the
settlement of the controversy between the parties. After all, the two cases involve the same parties, the
same subject matter, and the same issue, which is the liability of the heirs of the deceased Doroteo
Yabes for commercial broker’s fixed and percentage taxes due from the said deceased.

6. Yaokasin v. Commissioner of Customs

G. R. No. 84111, 22 December 1989
180 SCRA 591

Facts:
The Philippine Coast Guard seized 9000 bags/sacks of refined sugar from a vessel and then turned over
to the Bureau of Customs. Despite showing proof of legality of the purchase which is local in origin, the
seizure was commenced. The District Collector of Customs ordered the release of the bags of sugar and
ordered the warehouse where the bags were stored to be sealed. Yaokasin filed for replevin with the
trial court which was granted. The Collector of Customs ruled that the bags of sugar were of foreign
origin and forfeited. The CA ruled in favor of the Commissioner of Customs.

Issue:
Whether or not the seizure of the bags of sugar is subject to automatic review by the Commissioner of
Customs.

Held:
Section 12 of the Integrated Reorganization Plan applies to petitioner’s shipment of 9,000 bags of sugar.
Taxes being the lifeblood of the Government, Section 12, which the Commissioner of Customs in his
Customs Memorandum Order No. 20-87, enjoined all collectors to follow strictly, is intended to protect
the interest of the Government in the collection of taxes and customs duties in those seizure and
protest cases which, without the automatic review provided therein, neither the Commissioner of
Customs nor the Secretary of Finance would probably ever know about. Without the automatic review
by the Commissioner of Customs and the Secretary of Finance, a collector in any of our country’s far-
flung ports, would have absolute and unbridled discretion to determine whether goods seized by him
are locally produced, hence, not dutiable, or of foreign origin, and therefore subject to payment of
customs duties and taxes. His decision, unless appealed by the aggrieved party (the owner of the goods),
would become final with no one the wiser except himself and the owner of the goods. The owner of the
goods cannot be expected to appeal the collector’s decision when it is favorable to him. A decision that
is favorable to the taxpayer would correspondingly be unfavorable to the Government, but who will
appeal the collector’s decision in that case? Certainly not the collector.

Evidently, it was to cure this anomalous situation (which may have already defrauded our government
of huge amounts of uncollected taxes), that the provision for automatic review by the Commissioner of
Customs and the Secretary of Finance of unappealed seizure and protest cases was conceived to protect
the government against corrupt and conniving customs collectors.

Section 12 of the Plan and Section 2313 of the Tariff and Customs Code do not conflict with each other.
They may coexist. Section 2313 of the Code provides for the procedure for the review of the decision of
a collector in seizure and protest cases upon appeal by the aggrieved party, i.e., the importer or owner
of the goods. On the other hand, Section 12 of the Plan refers to the general procedure in appeals in
seizure and protest cases with a special proviso on automatic review when the collector’s decision is
adverse to the government. Section 2313 and the proviso in Section 12, although they both relate to the
review of seizure and protest cases, refer to two different situations—when the collector’s decision is
adverse to the importer or owner of the goods, and when the decision is adverse to the government.

7. Marubeni Corporation v. Commissioner of Internal Revenue

G.R. No. 76573, 14 September 1989
177 SCRA 500

Facts:
Marubeni Corporation of Japan has equity investments in AG&P of Manila, in which the latter declared
and paid cash dividends to the former in the amount of P849,720 and withheld the 10% final dividend
tax for the 1st and 3rd quarters of 1981, in which he declared the same amount. AG&P directly remitted
the cash dividends to Marubeni in Tokyo the 10% final dividend tax and the withheld 15% for profit
remittance tax, which were paid to the BIR. Then, Marubeni sought a ruling from the BIR on whether or
not the dividends they received from AG&P are effectively connected with its conduct or business in the
Philippines as to be considered branch profits subject to the 15% profit remittance tax imposed under
the NIRC, which the BIR ruled that it is not such. Marubeni claimed for tax refund but it was denied. The
CTA affirmed the BIR ruling.

Issue:
Whether or not the petition for review with the CTA is governed by the provisions of Batas Pambansa
Blg. 129, or the Judicial Reorganization Act of 1980.

Held:
No.
There is one final point that must be settled. Respondent Commissioner of Internal Revenue is laboring
under the impression that the Court of Tax Appeals is covered by Batas Pambansa Blg. 129, otherwise
known as the Judiciary Reorganization Act of 1980. He alleges that the instant petition for review was
not perfected in accordance with Batas Pambansa Blg. 129 which provides that “the period of appeal
from final orders, resolutions, awards, judgments, or decisions of any court in all cases shall be fifteen
(15) days counted from the notice of the final order, resolution, award, judgment or decision appealed
from x x x.”

This is completely untenable. The cited BP Blg. 129 does not include the Court of Tax Appeals which has
been created by virtue of a special law, Republic Act No. 1125. Respondent court is not among those
courts specifically mentioned in Section 2 of BP Blg. 129 as falling within its scope.

Thus, under Section 18 of Republic Act No. 1125, a party adversely affected by an order, ruling or
decision of the Court of Tax Appeals is given thirty (30) days from notice to appeal therefrom.
Otherwise, said order, ruling, or decision shall become final.

Records show that petitioner received notice of the Court of Tax Appeals’s decision denying its claim for
refund on April 15, 1986. On the 30th day, or on May 15, 1986 (the last day for appeal), petitioner filed a
motion for reconsideration which respondent court subsequently denied on November 17, 1986, and
notice of which was received by petitioner on November 26, 1986. Two days later, or on November 28,
1986, petitioner simultaneously filed a notice of appeal with the Court of Tax Appeals and a petition for
review with the Supreme Court. From the foregoing, it is evident that the instant appeal was perfected
well within the 30-day period provided under R.A. No. 1125, the whole 30-day period to appeal having
begun to run again from notice of the denial of petitioner’s motion for reconsideration.

8. Bank of the Philippine Islands v. Commissioner of Internal Revenue

G. R. No. 144653, 28 August 2001
363 SCRA 840

Facts:
The Family Bank and Trust Company (FBTC) earned income which was withheld as tax by its lessees prior
to its merger with Bank of the Philippine Islands (BPI). FBTC suffered loss and had an excess credit. Upon
its dissolution, FBTC had its tax credit, which was used by its successor-in-interest BPI as tax refund but
the CIR refunded only the small amount of the tax credit of FBTC. BPI filed a petition for review with the
CTA which the latter dismissed the same. The CA affirmed the prior decision.

Issue:
Whether or not the prescriptive period will apply to BPI as the surviving corporation from the merger
with FBTC.

Held:
No.
Petitioner argues that to hold, as the Court of Tax Appeals and the Court of Appeals do, that §78 applies
in case a corporation contemplates dissolution would lead to absurd results. It contends that it is not
feasible for the certified public accountants to complete their report and audited financial statements,
which are required to be submitted together with the plan of dissolution to the SEC, within the period
contemplated by §78. It maintains that, in turn, the SEC would not have sufficient time to process the
papers considering that §78 also requires the submission of a tax clearance certificate before the SEC
can approve the plan of dissolution.

As the Court of Tax Appeals observed, however, petitioner could have asked for an extension of time to
file its income tax return under §47 of the NIRC which provides:

Extension of time to file returns.—The Commissioner of Internal Revenue may, in meritorious cases,
grant a reasonable extension of time for filing returns of income (or final and adjustment returns in the
case of corporations), subject to the provisions of section fifty-one of this Code.

Petitioner further argues that the filing of a Final Adjustment Return would fall due on July 30, 1985,
even before the due date for filing the quarterly return. This argument begs the question. It assumes
that a quarterly return was required when the fact is that, because its taxable year was shortened, the
FBTC did not have to file a quarterly return. In fact, petitioner presented no evidence that the FBTC ever
filed such quarterly return in 1985.

Finally, petitioner cites a hypothetical situation wherein the directors of a corporation would convene on
June 30, 2000 to plan the dissolution of the corporation on December 31, 2000, but would submit the
plan for dissolution earlier with the SEC, which, in turn, would approve the same on October 1, 2000.
Following §78 of the Tax Code, the corporation would be required to submit its complete return on
October 31, 2000, although its actual dissolution would take place only on December 31, 2000.
Suffice it to say that such a situation may likewise be remedied by resort to §47 of the Tax Code. The
corporation can ask for an extension of time to file a complete income tax return until December 31,
2000, when it would cease operations. This would obviate any difficulty which may arise out of the
discrepancies not covered by §78 of the Tax Code.

9. Afgha, Incorporated v. Court of Tax Appeals

G. R. No. 172051, 27 July 2007
528 SCRA 463

Facts:
A shipment of bales of text grey cloth was forfeited in violation of the Tariff and Customs Code. The
District Collector of Customs ordered the forfeiture of the shipment in favor of the government which
the Commissioner of Customs affirmed the same. The CTA granted the petition for review of Afgha,
which was affirmed by the CA.

Issue:
Whether or not the CTA has the power of review the appeal made by Afgha.

Held:
Yes.
Contrary to petitioner’s view, the assailed resolution is not an interlocutory order since it left nothing to
be done by the CTA with respect to the merits of the case. It is a final judgment which fully disposed of
the issue appurtenant to respondent’s liability to petitioner on account of the loss of the shipment.
Under Section 18 of Republic Act (R.A.) No. 1125, as amended by R.A. No. 9282, viz.:

“Sec. 18. Appeal to the Court of Tax Appeals En Banc.—No civil proceedings involving matters arising
from the National Internal Revenue Code or the Local Government Code shall be maintained, except as
herein provided, until and unless an appeal has been previously filed with the CTA and disposed of in
accordance with the provisions of this Act.

A party adversely affected by a resolution of a Division of the CTA on a motion for reconsideration or
new trial, may file a petition for review with the CTA en banc.” (Italics supplied),

a party adversely affected by a resolution of a Division of the CTA on a motion for reconsideration may
file an appeal to the CTA en banc. Likewise, Rule 8, Section 4, paragraph (b) of the Revised Rules of the
CTA provides:

SEC. 4. Where to appeal; mode of appeal.—x x x

(b) Appeal from a decision or resolution of the Court in Division on a motion for reconsideration or new
trial shall be taken to the Court by petition for review as provided in Rule 43 of the Rules of Court. The
Court en banc shall act on the appeal. (Italics supplied)

Clearly, it was well within the CTA’s power of review to entertain respondent’s appeal. The present
petition for certiorari, G.R. No. 173813, must thus be dismissed.
Respecting G.R. No. 172051, the same must be dismissed too on the ground that petitioner failed to
show that it has no plain, speedy and adequate remedy in the ordinary course of law against its
perceived grievance. Appeal was not only available. It was a speedy and adequate remedy.

Local Government Taxation

1. Everett Steamship Corporation v. Municipality of Medina

G. R. No. L-21191, 30 April 1966
16 SCRA 978

Facts:
The Municipality of Medina, Misamis Oriental assessed against Everett Steamship Corporation its
berthing fee, under the ordinance enacted by its municipal council, for having two of its vessels
anchored alongside the wharf of said municipality for the discharge of its cargo which was paid under
protest on the ground that the ordinance under which the same was collected was null and void being
ultra vires or beyond the power of the municipal council to enact, and when the refund was denied, the
corporation commenced an action for recovery against the municipality before the then CFI, which
declared the ordinance null and void.

Issue:
Whether or not the Municipality of Medina has the power to impose tax.

Held:
No.
The question that now arises is: Is there any legal provision granting the Municipality of Medina a clear
power to impose a tax or a license as a means of raising revenue that may be invoked by it as a
justification for the enactment of the ordinance under consideration?

The answer must be in the negative not only because there is no such clear grant of power but that the
existing laws on the matter apparently deny such power to the Municipality of Medina. We refer to
Commonwealth Act No. 472 and to the Local Autonomy Act embodied in Republic Act No. 2264.

Thus, Section 3 of Commonwealth Act No. 472 provides that “It shall be beyond the power of any
municipal council x x x to impose x x x customs duties, registration, wharfage, tonnage, and all other
kinds of customs fees, charges and dues.” And a similar provision is embodied in the Local Autonomy Act
as may be seen from Section 2 thereof which provides that no municipality may levy any of the
following: “customs duties, registration, wharfage on wharves owned by the national government,
tonnage, and all other kinds of customs fees, charges and dues.”

It is true that the legislature has not expressly included berthing fees in either of the legal provisions
abovequoted, but under the doctrine of ejusdem generis it may be said to fall under the general terms
“all other kinds of customs fees, charges, and dues.” Indeed, under the same ordinance in question,
berthing fee is defined as “the amount assessed against a vessel for mooring or berthing at a pier or
wharf of the municipality.” Since this fee is charged precisely for the use that a vessel may make of the
wharf of the Municipality of Medina, the same may partake of the nature of wharfage fee or tax which is
denied to a municipality by both Commonwealth Act 472 and the Local Autonomy Act. As already
stated, a municipal corporation does not have any inherent power to impose a tax or license as a means
of raising revenue and if such power is granted it should be construed in strictissimi juris. Under such
principle there is no doubt that the Municipality of Medina has acted beyond its power in enacting the
ordinance in question.

2. Northern Philippines Tobacco Corporation v. Municipality of Agoo, La Union

G. R. No. L-26447, 30 January 1970
31 SCRA 304

Facts:
The Municipal Council of Agoo, La Union enacted an ordinance imposing a municipal license tax to be
paid quarterly by the tobacco redrying plants. The Northern Philippines Tobacco Corporation filed with
the then CFI a petition to nullify the municipal ordinance in issue, contending that the said municipal
legislation was unauthorized, unjust, excessive, oppressive and confiscatory and, in its application, was
discriminatory to constitute a denial of the petitioner’s right to equal protection of the laws. The CFI
ruled in favor of the municipality.

Issue:
Whether or not the Municipality of Agoo has the power to impose municipal license taxes.

Held:
Yes.
Republic Act No. 2264 (known as the local Autopsy Act) in its section 2, expressly provides that subject
to specified exceptions not here applicable, “all chartered cities, municipalities and municipal districts
shall have authority to impose municipal license taxes or fees, upon persons engaged in any occupation
or business” and it is undeniable that redrying of tobacco is as much an occupation or business as
manufacturing or shoe making.

The circumstance that the rate of tax payable under the ordinance is made to some extent dependent
on the minimum and maximum quantity of tobacco redried per quarter, does not transform said tax into
a percentage or sales or income tax and does not bring the case out of the council’s authorized sphere
of action. It may be noted that, as framed in the ordinance, the volume of business is merely taken into
account in classifying the taxpayer’s business according to its size or extent of operations, for the
purpose of imposing the fixed graduated tax it has to pay; and that there is no set ratio between the tax
and the amount of tobacco redried.

It is even more far-fetched to say that the tax is an exaction on sales or income. As already stated, the
imposition here is a levy on the enjoyment of the privilege to engage in the business of redrying
tobacco, not on the operator’s making of sales or its receipt of income from the business.

Admittedly, the license tax being imposed on the business of redrying tobacco is not new. As the title of
the ordinance indicates, it is just an amendment to another ordinance existing and apparently in force
since 1960. Evidently, the main objection of appellant against Ordinance No. 11 is in the increase of the
rates, from one-fourth centavo (P.0025) for every kilo of tobacco redried in the plant as provided in the
amended ordinance, to one centavo (P.01) per kilo, an increase by 300% which, according to appellant,
is excessive, unjust, confiscatory and discriminatory.
3. Ormoc Sugar Co., Inc. v. Municipal Board of Ormoc City
G. R. No. L-24322, 21 July 1967
20 SCRA 739

Facts:
The Municipal Board of Ormoc City enacted an ordinance imposing a city tax on any and all productions
of centrifugal sugar locally sold or sold within the Philippines, which was challenged by Ormoc Sugar Co.
The trial court sustained the validity of the said ordinance.

Issue:
Whether or not the municipal ordinance enacted by the Municipal Board of Ormoc City is valid.

Held:
Yes.
The appeal must fail and the decision of the lower court affirmed. The question before this Court is one
of power. From and after June 19, 1959, when the Local Autonomy Act was enacted, the sphere of
autonomy of a chartered city in the enactment of taxing measures has been considerably enlarged. In
the language of the statute:

"SECTION 2. Taxation.—Any provision of law to the contrary notwithstanding, all chartered cities,
municipalities and municipal districts shall have authority to impose municipal license taxes or fees upon
persons engaged in any occupation or business, or exercising privileges in chartered Cities,
municipalities or municipal districts by requiring them to secure licenses at rates fixed by the municipal
board or city council of the city, the municipal council of the municipality, or the municipal district
council of the municipal district; to collect fees and charges for services rendered by the city,
municipality or municipal district; to regulate and impose reasonable fees for services rendered in
connection with any business, profession or occupation being conducted within the city, municipality or
municipal district and otherwise to levy for public purposes, just and uniform taxes, licenses or fees:
Provided, That municipalities and municipal districts shall, in no case impose any percentage tax on sales
or other taxes in any form based thereon nor impose taxes on articles subject to specific tax, except
gasoline, under the provisions of the National Internal Revenue Code. x x x."

In a number of decisions starting from City of Bacolod v. Gruet to Hodges v. Municipal Board decided
early this year, such broad taxing authority has been implemented and vitalized by this Court.

The last mentioned-case, Hodges v. Municipal Board, restated the controlling doctrine in this wise:

"No special difficulty attends the resolution of the main issue. Heretofore, we have announced the
doctrine that the grant of the power to tax to chartered cities under Section 2 of the Local Autonomy
Act is sufficiently plenary to cover 'everything, excepting those which are mentioned' therein, subject
only to the limitation that the tax so levied is for /public purposes, just and uniform' (Nin Bay Mining
Company vs. Municipality of Roxas, Province of Palawan, G.R. No. L-20125, July 20, 1965). There is no
showing, and we do not believe it is possible to show, that the tax levied, called by any name,—
percentage tax or sales tax—comes under any of the specific exceptions listed in section 2 of the Local
Autonomy Act. Not being excepted, it must be regarded as coming within the purview of the general
rule. As the maxim goes, 'Exceptio firmat regulam in casibus non exceptis'. Since its public purpose,
justness and uniformity of application are not disputed, the tax so levied must be sustained as valid."
In the light of the above, it cannot be said that the ordinance suffers from a constitutional or statutory
infirmity as claimed in the first alleged error. Nor is petitioner-appellant any more successful in its claim
in the second assigned error that the ordinance suffers from the taint of illegality, it being in restraint of
trade. In the absence of a clear and specific showing that there was a transgression of a constitutional
provision or repugnancy to a controlling statute, an objection of such a generalized character deserves
but scant sympathy from this Court. Considering the indubitable policy expressly set forth in the Local
Autonomy Act, the invocation of such a talismanic formula as "restraint of trade" without more no
longer suffices, assuming it ever did, to nullify a taxing ordinance, otherwise valid.

4. San Miguel Corporation v. The Municipal Council of Mandaue

G. R. No. L-30761, 11 July 1973
52 SCRA 43

Facts:
The Municipal Council of Mandaue, Cebu enacted an ordinance imposing a graduated quarterly fixed tax
based on the gross value of money or actual market value at the time of removal of the manufactured
articles ,from their factories or other manufacturing or processing establishments, which was based on
the authority of the Local Autonomy Act. San Miguel Corporation paid the imposed tax in protest and
then filed an action for annulment of the ordinance, in which the trial court ruled its validity.

Issue:
Whether or not the municipal council of Mandaue can impose any percentage taxes on sales "based on
the gross value in money or actual market value at the time of removal, of the manufactured products.

Held:
No.
Well settled is the rule that in the absence of legislative intent to the contrary, technical or commercial
terms and phrases, when used in tax statutes, are presumed to have been used in their technical sense
or in their trade or commercial meaning. Thus, the phrase "gross value in money" has a well-defined
meaning in our tax statutes. For instance, the term "gross value in money" of articles sold, bartered,
exchanged or transferred, as used in Sections 184, 185 and 186 of the National Internal Revenue Code,
has been invariably used as equivalent to "gross selling price" and has been construed as the total
amount of money or its equivalent which the purchaser pays to the vendor to receive or get the goods.
It must be noted that the ordinance specifically provides that the basis of the tax is the "gross value in
money or actual market value" of the manufactured article.

The phrase "actual market value" has been construed as the price which an article "would command in
the ordinary course of business, that is to say, when offered for sale by one willing to sell, but not under
compulsion to sell, and purchased by another who is willing to buy, but under no obligation to purchase
it, or the price which the property will bring in a fair market after fair and reasonable efforts have been
made to find a purchaser who will give the highest price for it. The "actual market value" of property, for
purposes of taxation, therefore means the selling price of the article in the course of ordinary business.

Considering that the phrase "gross value in money" is followed by the words "or actual market value", it
is evident that the latter was intended to explain and clarify the preceding phrase. For the word "or"
may be used as the equivalent of "that is to say" and gives that which precedes it the same significance
as that which follows it. It is not always disjunctive and is sometimes interpretative or expository of the
preceding word. Certainly We cannot assume that the phrase "or actual market value" was a mere
surplusage, for it serves to clarify and explain the meaning and import of the preceding phrase. In any
event, it is the duty of the courts, so far as reasonably practicable, to read and interpret a statute as to
give life and effect to all its provisions, so as to render it a harmonious whole.

It is also significant to note, that there is a set ratio between the amount of the tax and the volume of
sales. Thus if the "gross value in money or actual market value" of the beer removed from the factory
exceeds P37,500.00 per quarter, the taxpayer is required to pay a quarterly license tax of P160.00 plus
P0.30 for every P1,000,00 or fraction of the excess. In other words in excess of P37,500.00, the taxpayer
will pay to the municipality a certain amount of tax measured by a percentage of the sales. It is
therefore evident that the challenged ordinance was a transparent attempt on the part of the
municipality to impose a tax based on sales.

5. Progressive Development Corporation v. Quezon City

G. R. No. 36081, 24 April 1989
172 SCRA 629

Facts:
The Quezon City Council enacted an ordinance imposing supervision or license tax on privately-owned
markets in Quezon City. Progressive Development Corporation, who owns and operates Farmers Market
and Shopping Center, filed an action for prohibition on the ground that the said tax imposed is really an
income tax which is prohibited by Republic Act No. 2264, as amended. The trial court dismissed the case
ruling that the ordinance is not an income tax but a privilege tax or license fee which can be imposed by
local government units.

Issue:
Whether or not the supervision or license tax is considered an income tax.

Held:
No.
The term “tax” frequently applies to all kinds of exactions of monies which become public funds. It is
often loosely used to include levies for revenue as well as levies for regulatory purposes such that
license fees are frequently called taxes although license fee is a legal concept distinguishable from tax:
the former is imposed in the exercise of police power primarily for purposes of regulation, while the
latter is imposed under the taxing power primarily for purposes of raising revenues. Thus, if the
generating of revenue is the primary purpose and regulation is merely incidental, the imposition is a tax;
but if regulation is the primary purpose, the fact that incidentally revenue is also obtained does not
make the imposition a tax.

To be considered a license fee, the imposition questioned must relate to an occupation or activity that
so engages the public interest in health, morals, safety and development as to require regulation for the
protection and promotion of such public interest; the imposition must also bear a reasonable relation to
the probable expenses of regulation, taking into account not only the costs of direct regulation but also
its incidental consequences as well. When an activity, occupation or profession is of such a character
that inspection or supervision by public officials is reasonably necessary for the safeguarding and
furtherance of public health, morals and safety, or the general welfare, the legislature may provide that
such inspection or supervision or other form of regulation shall be carried out at the expense of the
persons engaged in such occupation or performing such activity, and that no one shall engage in the
occupation or carry out the activity until a fee or charge sufficient to cover the cost of the inspection or
supervision has been paid. Accordingly, a charge of a fixed sum which bears no relation at all to the cost
of inspection and regulation may be held to be a tax rather than an exercise of the police power.

In the case at bar, the “Farmers Market & Shopping Center” was built by virtue of Resolution No. 7350
passed on 30 January 1967 by respondents’s local legislative body authorizing petitioner to establish and
operate a market with a permit to sell fresh meat, fish, poultry and other foodstuffs. The same
resolution imposed upon petitioner, as a condition for continuous operation, the obligation to “abide by
and comply with the ordinances, rules and regulations prescribed for the establishment, operation and
maintenance of markets in Quezon City.” The “Farmers’ Market and Shopping Center” being a public
market in the sense of a market open to and inviting the patronage of the general public, even though
privately owned, petitioner’s operation thereof required a license issued by the respondent City, the
issuance of which, applying the standards set forth above, was done principally in the exercise of the
respondent’s police power. The operation of a privately owned market is, as correctly noted by the
Solicitor General, equivalent to or quite the same as the operation of a government-owned market; both
are established for the rendition of service to the general public, which warrants close supervision and
control by the respondent City, for the protection of the health of the public by insuring, e.g., the
maintenance of sanitary and hygienic conditions in the market, compliance of all food stuffs sold therein
with applicable food and drug and related standards, for the prevention of fraud and imposition upon
the buying public, and so forth.

We believe and so hold that the five percent (5%) tax imposed in Ordinance No. 9236 constitutes, not a
tax on income, not a city income tax (as distinguished from the national income tax imposed by the
National Internal Revenue Code) within the meaning of Section 2 (g) of the Local Autonomy Act, but
rather a license tax or fee for the regulation of the business in which the petitioner is engaged. While it
is true that the amount imposed by the questioned ordinances may be considered in determining
whether the exaction is really one for revenue or prohibition, instead of one of regulation under the
police power, it nevertheless will be presumed to be reasonable. Local governments are allowed wide
discretion in determining the rates of imposable license fees even in cases of purely police power
measures, in the absence of proof as to particular municipal conditions and the nature of the business
being taxed as well as other detailed factors relevant to the issue of arbitrariness or unreasonableness
of the questioned rates.

6. Iloilo Bottlers, Inc. v. City of Iloilo

G. R. No. L-52019, 19 August 1988
164 SCRA 607

Facts:
The Iloilo City Council enacted an ordinance imposing a municipal license tax on distributors of
softdrinks. Santiago Syjuco, Inc., which owned a bottling plant of Pepsi-Cola and Seven-Up, suffered
losses and later on closed operations, which led to it being sold to Iloilo Bottlers, Inc., which transferred
its plant outside the jurisdiction of the City of Iloilo. Before its transfer, the bottling company paid
municipal taxes and later on stopped doing so upon its relocation. The City of Iloilo demanded Iloilo
Bottlers to pay its taxes but the latter refused on the ground of its relocation outside the jurisdiction of
the city. A case was filed in which the trial court ruled in favor of Iloilo Bottlers. The CA certified the case
to the Supreme Court.

Issue:
Whether or not Iloilo Bottlers is liable for the license tax.
Held:
Yes.
To determine whether an entity engaged in the principal business of manufacturing, is likewise engaged
in the separate business of selling, its marketing system or sales operations must be looked into.

In several cases [See Central Azucarera de Don Pedro v. City of Manila and Sarmiento, supra; Cebu
Portland Cement Co. v. City of Manila and the City Treasurer, 108 Phil. 1063 (1960); Caltex (Philippines),
Inc. v. City of Manila and Cudiamat, supra], this Court had occasion to distinguish two marketing
systems:

Under the first system, the manufacturer enters into sales transactions and invoices the sales at its main
office where purchase orders are received and approved before delivery orders are sent to the
company’s warehouses, where in turn actual deliveries are made. No warehouse sales are made; nor are
separate stores maintained where products may be sold independently from the main office. The
warehouses only serve as storage sites and delivery points of the products earlier sold at the main
office.

Under the second system, sales transactions are entered into and perfected at stores or warehouses
maintained by the company. Any one who desires to purchase the product may go to the store or
warehouse and there purchase the merchandise. The stores and warehouses serve as selling centers.

Entities operating under the first system are NOT considered engaged in the separate business of selling
or dealing in their products, independent of their manufacturing business. Entities operating under the
second system are considered engaged in the separate business of selling.

In the case at bar, the company distributed its softdrinks by means of a fleet of delivery trucks which
went directly to customers in the different places in Iloilo province. Sales transactions with customers
were entered into and sales were perfected and consummated by route salesmen. Truck sales were
made independently of transactions in the main office. The delivery trucks were not used solely for the
purpose of delivering softdrinks previously sold at Pavia. They served as selling units. They were what
were called, until recently, “rolling stores”. The delivery trucks were therefore much the same as the
stores and warehouses under the second marketing system. Iloilo Bottlers, Inc. thus falls under the
second category above. That is, the corporation was engaged in the separate business of selling or
distributing soft-drinks, independently of its business of bottling them.

The tax imposed under Ordinance No. 5 is an excise tax. It is a tax on the privilege of distributing,
manufacturing or bottling softdrinks. Being an excise tax, it can be levied by the taxing authority only
when the acts, privileges or businesses are done or performed within the jurisdiction of said authority
[Commissioner of Internal Revenue v. British Overseas Airways Corp. and Court of Appeals, G.R. Nos.
65773-74, April 30, 1987, 149 SCRA 395, 410.] Specifically, the situs of the act of distributing, bottling or
manufacturing softdrinks must be within city limits, before an entity engaged in any of the activities may
be taxed in Iloilo City.
7. Municipality of San Fernando, La Union v. Sta. Romana
G. R. No. L-30159, 31 March 1987
149 SCRA 27

Facts:
The trucks coming from the Municipality of San Fernando in La Union were sent to the Municipality of
Luna in the same province to haul gravel and sand for the construction of a cement road in the
municipality of the former, and were charged unreasonable fees per truck load in the process. The
Municipality of San Fernando filed a complaint against the Municipality of Luna to stop collecting
unreasonable fees from trucks obtaining construction materials from the latter municipality. The said
collection was based from a municipal ordinance enacted by the Municipal Council of Luna. A case was
filed, in which the trial court ruled in favor of Luna.

Issue:
Whether or not the Municipality of Luna, La Union has the power to impose the license fees for
construction materials.

Held:
No.
This issue in the case at bar is now governed by Presidential Decree No. 231, enacting a Local Tax Code
(for Provinces, Cities, Municipalities and Barrios) which took effect on July 1, 1973. The Code provides:

"SEC. 10. Sand and gravel fee.—The province may levy and collect a fee of not exceeding seventy-five
centavos per cubic meter of ordinary stones, sand, gravel, earth and other materials extracted from
lakes, rivers, streams, creeks, and other public waters within the jurisdiction of the province.

'SEC. 22. Specific limitations on power.—Except as otherwise provided in this Code, the municipality
shall not levy the following:

(a) Taxes, fees, and charges that the province or city is authorized to levy in this Code;

(b) Taxes on articles, subject to specific tax under the provisions of the National Internal Revenue Code;
and

(c) Taxes and other impositions enumerated in Section 5, Chapter I of this Code."

Section 10 of aforesaid decree was later amended by Presidential Decree No. 426, dated March 30,
1974, and now reads:

"Sec. 10. Sand and gravel tax.—The province may levy and collect a tax of not exceeding seventy-five
centavos per cubic meter of ordinary stones, sand, gravel, earth and other materials extracted from
public and private lands of the government or from the beds of seas, lakes, rivers, streams, creeks and
other public waters within the jurisdiction of the province. The municipality where the materials are
extracted shall share in the proceeds of the tax herein authorized at a rate of not less than thirty per
cent thereof as may be determined by the Provincial Board.
"The permit to extract the materials shall be issued by the Director of Mines or his duly authorized
representative and the extraction thereof shall be governed by regulations issued by the Director of
Mines." (As amended by Presidential Decree No. 426).

Under the above-quoted provisions of the Local Tax Code, there is no question that the authority to
impose the license fees in dispute, properly belongs to the province concerned and not to the
Municipality of Luna which is specifically prohibited under Section 22 of the same Code "from levying
taxes, fees and charges that the province or city is authorized to levy in this Code.'' On the other hand,
the Municipality of San Fernando cannot extract sand and gravel from the Municipality of Luna without
paying the corresponding taxes or fees that may be imposed by the province of La Union.

8. Mathay v. Macalincag
G. R. No. 97618, 16 December 1993
228 SCRA 519

Facts:
Ismael Mathay, Rufino Javier and Consuelo Puyat-Reyes filed their special civil cases of prohibition
against then Finance Undersecretary Victor Macalincag, the City Assessor and the City Treasurer of
Quezon City and the municipal assessors and the municipal treasurers of Pasig and Makati, respectively,
to question the constitutionality and validity of the schedule of market values for all classes of real
property, and the assessment and excessive real estate taxes based on the illegal schedule of market
values and unlawful approval, all in violation of the Constitution and laws. A temporary restraining order
was issued for all cases filed. The Central Board of Assessment Appeals ruled in favor of the
complainants.

Issue:
Whether or not the schedule of market values for real property taxes in the local government units
concerned are valid.

Held:
No.
The Court has reviewed the records of all these three (3) cases and finds that the Central Board of
Assessment Appeals has proceeded correctly as regards their hearing and determination. It also agrees
with the Board’s conclusion that the Schedules of Market Values for real property located in Quezon
City, the Municipality of Pasig and the Municipality of Makati, respectively prepared solely by the City
Assessor of Quezon City, and the Municipal Assessors of Pasig and Makati, failed to comply with the
explicit requirements of Presidential Decree No. 921 in relation to the corresponding Administrative
Regulations promulgated by the Department of Finance (No. 7-77) on July 25, 1977, and are on that
account illegal and void. The Court therefore hereby approves and adopts as its own the following
dispositions made by the Central Board of Assessment Appeals in all said cases, to wit:

1) RE G.R. No. 97618 (CBAA Case No. 261)

“This Board hereby declares null and void, and, therefore, unenforceable, the subject Schedule of
Market Values for all classes of lands in Quezon City, as prepared solely by Respondent City Assessor,
being contrary to and in violation of Section 9 of P.D. No. 921.”

2) RE G.R. No. 97760 (CBAA Case No. 262)

“WHEREFORE, judgment is hereby rendered, declaring null and void the instant Schedule of Market
Values, prepared solely by the Municipal Assessor of Pasig, for lands in Pasig, Metro Manila, in violation
of Section 9 of P.D. 921. Respondents Municipal Assessor and Municipal Treasurer of Pasig, Metro
Manila, are hereby ordered to act accordingly.”

3) RE G.R. No. 102319 (CBAA Case No. 263)

“WHEREFORE, judgment is hereby rendered, declaring null and void the instant Schedule of Market
Values, prepared solely by the Municipal Assessor of Makati, for lands in Makati, Metro Manila, in
violation of Section 9, P.D. 921 and the Compromise Agreements, entered into by and between the
Petitioner and Respondents and among and between the Intervenors and Respondents, inexistent and
void and without force and effect. Respondents Municipal Assessor and Municipal Treasurer of Makati,
Metro Manila, are hereby ordered to act accordingly.”

9. Ty v. Trampe
G. R. No. 117577, 1 December 1995
250 SCRA 500

Facts:
The Municipal Assessor of Pasig assessed real properties owned by Alejandro Ty and MVR Picture Tube,
Inc. which was sought to be reconsidered by the latter. They filed with the RTC an action for prohibition
to declare null and void the new tax assessments and to enjoin the collection of real estate taxes based
on said assessments. The RTC, presided by Judge Aurelio Trampe, denied the petition for lack of merit.
Issue:
Whether or not Ty and MVR Picture Tube are required to exhaust administrative remedies prior to
seeking judicial relief.

Held:
No.
Although as a rule, administrative remedies must first be exhausted before resort to judicial action can
prosper, there is a well-settled exception in cases where the controversy does not involve questions of
fact but only of law. In the present case, the parties, even during the proceedings in the lower court on
11 April 1994, already agreed “that the issues in the petition are legal,” and thus, no evidence was
presented in said court. In laying down the powers of the Local Board of Assessment Appeals, R.A. 7160
provides in Sec. 229 (b) that “(t)he proceedings of the Board shall be conducted solely for the purpose of
ascertaining the facts x x x.” It follows that appeals to this Board may be fruitful only where questions of
fact are involved. Again, the protest contemplated under Sec. 252 of R.A. 7160 is needed where there is
a question as to the reasonableness of the amount assessed. Hence, if a taxpayer disputes the
reasonableness of an increase in a real estate tax assessment, he is required to “first pay the tax” under
protest. Otherwise, the city or municipal treasurer will not act on his protest. In the case at bench
however, the petitioners are questioning the very authority and power of the assessor, acting solely and
independently, to impose the assessment and of the treasurer to collect the tax. These are not
questions merely of amounts of the increase in the tax but attacks on the very validity of any increase.

Finally, it will be noted that in the consolidated cases of Mathay/Javier/Puyat-Reyes cited earlier, the
Supreme Court referred the petitions (which similarly questioned the schedules of market values
prepared solely by the respective assessors in the local government units concerned) to the Board of
Assessment Appeals, not for the latter to exercise its appellate jurisdiction, but rather to act only as a
factfinding commission. Said the Court thru Chief Justice Andres R. Narvasa:

“On November 5, 1991, the Court issued a Resolution clarifying its earlier one of May 16, 1991. It
pointed out that the authority of the Central Board of Assessment Appeals ‘to take cognizance of the
factual issues raised in these two cases by virtue of the referral by this Court in the exercise of its
extraordinary or certiorari jurisdiction should not be confused with its appellate jurisdiction over
appealed assessment cases under Section 36 of P.D. 464 otherwise known as the Real Property Tax
Code. The Board is not acting in its appellate jurisdiction in the instant cases, but rather, it is acting as a
Court-appointed fact-finding commission to assist the Court in resolving the factual issues raised in G.R.
Nos. 97618 and 97760.’”

In other words, the Court gave due course to the petitions therein in spite of the fact that the
petitioners had not, a priori, exhausted administrative remedies by filing an appeal before said Board.
Because there were factual issues raised in the Mathay, et al. cases, the Supreme Court constituted the
Central Board of Assessment Appeals as a fact-finding body to assist the Court in resolving said factual
issues. But in the instant proceedings, there are no such factual issues. Therefore, there is no reason to
require petitioners to exhaust the administrative remedies provided in R.A. 7160, nor to mandate a
referral by this Court to said Board.