YAMANE v.

BA LEPANTO CONDOMINUM CORPORATION

G.R. No. 154993 October 25, 2005
Facts:

Respondent BA-Lepanto Condominium Corporation is a duly organized condominium

corporation constituted in accordance with the Condominium Act, which owns and
holds title to the common and limited common areas of the BA-Lepanto Condominium
(the “Condominium”), situated in Paseo de Roxas, Makati City. Its membership
comprises the various unit owners of the Condominium. The Corporation is authorized,
under Article V of its Amended By-Laws, to collect regular assessments from its
members for operating expenses, capital expenditures on the common areas, and
other special assessments as provided for in the Master Deed with Declaration of
Restrictions of the Condominium.
On 15 December 1998, the Corporation received a Notice of Assessment dated 14
December 1998 signed by the City Treasurer. Through counsel, the Corporation
responded with a written tax protest dated 12 February 1999, addressed to the City
Treasurer. It was evident in the protest that the Corporation was perplexed on the
statutory basis of the tax assessment. It asserted that there has no basis as the
Corporation is not liable for business taxes and surcharges and interest thereon, under
the Makati [Revenue] Code or even under the Local Government Code.
From the denial of the protest, the Corporation filed an Appeal with the Regional Trial
Court (RTC) of Makati. On 1 March 2000, the Makati RTC Branch 57 rendered a
Decision dismissing the appeal for lack of merit. Accepting the premise laid by the City
Treasurer, the RTC acknowledged, in sadly risible language, the RTC concluded that the
activities of the Corporation fell squarely under the definition of “business” under
Section 13(b) of the Local Government Code, and thus subject to local business
taxation.
From this Decision of the RTC, the Corporation filed a Petition for Review under Rule 42
of the Rules of Civil Procedure with the Court of Appeals. Initially, the petition was
dismissed outright on the ground that only decisions of the RTC brought on appeal
from a first level court could be elevated for review under the mode of review
prescribed under Rule 42. However, the Corporation pointed out in its Motion for
Reconsideration that under Section 195 of the Local Government Code, the remedy of
the taxpayer on the denial of the protest filed with the local treasurer is to appeal the
denial with the court of competent jurisdiction. Persuaded by this contention, the
Court of Appeals reinstated the petition.
On 7 June 2002, the Court of Appeals Special Sixteenth Division rendered the Decision
and reversed the RTC decision and declared that the Corporation was not liable to pay
business taxes to the City of Makati.

Issue:
Whether the City of Makati may collect business taxes on condominium corporations.
Held:
No, because the condominium existence is not intended for the incurrence of profit
but to shoulder the expenses for the maintenance of the Condominium project.
Under Section 151 of the Local Government Code, cities such as Makati are authorized
to levy the same taxes fees and charges as provinces and municipalities. In Article II,
Title II, Book II of the Local Government Code, governing municipal taxes, where the
provisions on business taxation relevant to this petition may be found. Also, nowhere
therein is there any citation made by the City Treasurer of any provision of the
Revenue Code which would serve as the legal authority for the collection of business
taxes from condominiums in Makati.
In the instant case, the assessment which appears to be based solely on the
Corporation’s collection of assessments from unit owners, such assessments being
utilized to defray the necessary expenses for the Condominium Project and the
common areas. There is no contemplation of business, no orientation towards profit in
this case. The assailed tax assessment has no basis under the Local Government Code
or the Makati Revenue Code, and the insistence of the city in its collection of the void
tax constitutes an attempt at deprivation of property without due process of law.
Hence, the collection of business taxes from condominiums in Makati is void.

Philippine Match Co. Ltd. vs. Cebu City

GR L-30745, 18 January 1978
Facts: Cebu City imposed a quarterly tax (sales tax of 1%) on gross sales or receipts of
merchants, dealers, importers and manufacturers or any commodity doing business in
Cebu City, through Ordinance 279. Section 9 of the Ordinance provided that, for the
purpose of the tax, “all deliveries of goods or commodities stored in Cebu City, or if not
stored are sold in that city shall be considered as sales in the city and shall be taxable.”
Philippine Match Co. Ltd., with principal office in Manila, questioned the legality of the
tax collected by the City of Cebu on sales of matches stored by the company in Cebu
City but delivered to customers outside the city.
Issue: Whether the City of Cebu can tax sales of matches which were perfected and
paid for in Cebu City but where the matches were delivered to customers outside the
city.
Held: The city can validly tax the sales of matches to customers outside of the city as
long as the orders were booked and paid for in the company’s branch office in the city.
Those matches can be regarded as sold in the city, as contemplated in the ordinance,
because the matches were delivered to the carrier in Cebu City.
Generally, delivery to the carrier is delivery to the buyer (Article 1523, Civil Code). A
different interpretation would defeat the tax ordinance in question or encourage tax
evasion through the simple expedient of arranging for the delivery of the matches at
the outskirts of the city though the purchases were effected and paid for in the
company’s branch office in the city. The municipal board of the city is empowered to
provide for the levy and collection of taxes for general and special purposes in
accordance with law.

Ty v Trampe GR 117577
FACTS:
Petitioner Alejandro B. Ty is a resident of and registered owner of lands and
buildings in the Municipality (now City) of Pasig, while petitioner MVR Picture
Tube, Inc. is a corporation duly organized and existing under Philippine laws
and is likewise a registered owner of lands and buildings in said Municipality
Respondent Assessor sent a notice of assessment respecting certain real
properties of petitioners located in Pasig, Metro Manila
Petitioners assail the legality of the Schedule of Market Values used as basis
for the new tax assessments being enforced by respondents Municipal
Assessor and Municipal Treasurer of Pasig. Petitioners through counsel
"request(ed) the Municipal Assessor to reconsider the subject assessments"

- The schedule of market values and the assessments prepared solely by

the municipal assessor, in accordance with LGC of 1991 (RA7160) are
invalid and illegal because the said Code did not effectively repeal the
previous law on the matter (PD 921)
- PD 921 was not expressly repealed nor impliedly repealed by LGC of
1991(RA 7160)and is therefore the applicable statute.

Respondents counters that PD 921 and LGC of 1991(RA 7160) are clearly &
unequivocally incompatible since both dwell on the same subject matter (preparation
of schedule of values for real property in Metro Manila area)

Not satisfied, petitioners, filed with the RTC a Petition for Prohibition with prayer
for a restraining order and/or writ of preliminary injunction to declare null and
void the new tax assessments and to enjoin the collection of real estate taxes
based on said assessments.

RTC: Denied petition.

No mention of CA decision

ISSUE:
WON Republic Act No. 7160, otherwise known as the Local Government Code of
1991, repealed the provisions of Presidential Decree No. 921;

HELD

The foregoing partakes of the nature of a general repealing provision. It is a

basic rule of statutory construction that repeals by implication are not favored.

An implied repeal will not be allowed unless it is convincingly and

unambiguously demonstrated that the two laws are so clearly repugnant and
patently inconsistent that they cannot co-exist. This is based on the rationale
 that the will of the legislature cannot be overturned by the judicial function of
construction and interpretation. Courts cannot take the place of Congress in
repealing statutes. Their function is to try to harmonize, as much as possible,
seeming conflicts in the laws and resolve doubts in favor of their validity and
co-existence.
By this harmonization, both the preamble of P.D. 921 decreeing that the real
estate taxes shall "not unduly burden the taxpayer" and the "operative
principle of decentralization" provided under Sec. 3, R.A. 7160 encouraging
local government units to "consolidate or coordinate their efforts, services
and resources" shall be fulfilled. Indeed the essence of joint local action for
common good so cherished in the Local Government Code finds concrete
expression in this harmonization.
Since it is now clear that P.D. 921 is still good law, it is equally clear that this Court's
ruling in the Mathay/Javier/Puyat-Reyes (court just mentioned this case and
provided a exhaustion of remedies ratio) cases is still the prevailing and applicable
doctrine. And, applying the said ruling in the present case, it is likewise clear that
the schedule of values prepared solely by the respondent municipal assessor is
illegal and void.

Davao v. Randy Allied Ventures, Inc.

G.R. No. 241697, July 29, 2019.

Second Division
PERLAS-BERNABE, J.:

Lessons Applicable:  non-bank financial intermediary, local business tax

Laws Applicable:

FACTS:

Randy Allied Ventures, Inc. (RAVI) is one of the Coconut Industry Investment Fund
(CIIF) holding companies established to own and hold the shares of stock of San
Miguel Corporation (SMC).
January 24, 2012: Supreme Court decision in Philippine Coconut Producers
Federation, Inc. v. Republic (COCOFED), G.R. Nos. 177857-58 and 178793, declared
the CIIF companies, including RAVI, and the CIIF block of SMC shares as "public
funds necessarily owned by the Government”.
January 17, 2013: RAVI filed with the Regional Trial Court (RTC), a claim for refund
or credit of erroneously and illegally collected LBT for the taxable year 2010 in the
amount of P503,346.00, corresponding to its dividends from its SMC preferred
shares, on the mistaken assumption that it is a non-bank financial intermediary
(NBFI).
RTC: Denied the claim for refund or credit.  Being a financial intermediary, RAVI's
income from dividends and interests is subject to LBT under Section 143 (f) of
Republic Act (RA) No. 7160, or the Local Government Code of 1991 (LGC).  It is its
principal source of income, in line with the primary purpose stated in its Amended
AOI.
RAVI filed a Petition for Review with the CTA First Division.
 CTA First Division granted the petition and held that RAVI is a holding company and
not an NBFI subject to LBT and denied City of Davao’s Motion for Reconsideration
(MR)
CTA EB: Denied City of Davao’s petition for lack of merit.  RAVI cannot be
considered an NBFI for failing to meet the requisites provided under the General
Banking Law, Manual of Regulations for Non-Bank Financial Institutions, and the
National Internal Revenue Code, i.e., it is not authorized to act as an NBFI by the
Bangko Sentral ng Pilipinas (BSP); its principal function does not relate to NBFI
activities; and that while its primary purpose may involve one of the activities
enumerated in the BSP Manual, there was no proof that it performed such
activities as its principal function and on a regular and recurring basis.

ISSUE: WON CTA EB erred in finding that RAVI is not an NBFI subject to LBT under
Section 143 (f) of the LGC

HELD: Petition is denied.

Essentially, LBT are taxes imposed by local government units on the privilege of
doing business within their jurisdictions.  "Doing business" means some "trade or
commercial activity regularly engaged in as a means of livelihood or with a view to
profit."  LBT imposed pursuant to Section 143 (f) is premised on the fact that the
persons made liable for such tax are banks or other financial institutions by virtue
of their being engaged in the business as such. This is why the LBT are imposed on
their gross receipts from "interest, commissions and discounts from lending
activities, income from financial leasing, dividends, rentals on property and profit
from exchange or sale of property, insurance premium."
In order to be considered as an NBFI under the National Internal Revenue Code,
banking laws, and pertinent regulations, the following must concur:
a.    The person or entity is authorized by the BSP to perform quasi-banking
functions;
b.    The principal functions of said person or entity include the lending,
investing or placement of funds or evidences of indebtedness or equity
deposited to them, acquired by them, or otherwise coursed through them,
either for their own account or for the account of others; 
c.    The person or entity must perform any of the following functions on a
regular and recurring, not on an isolated basis, to wit:
i.    Receive funds from 1 group of persons, irrespective of number,
through traditional deposits, or issuance of debt or equity securities;
and make available/lend these funds to another person or entity,
and in the process acquire debt or equity securities;
ii.    Use principally the funds received for acquiring various types of
debt or equity securities
iii.    Borrow against, or lend on, or buy or sell debt or equity
securities.
A "'holding company' is 'organized' and is basically conducting its business by
investing substantially in the equity securities of another company for the purpose
of controlling their policies (as opposed to directly engaging in operating activities)
and 'holding' them in a conglomerate or umbrella structure along with other
subsidiaries."While holding companies may partake in investment activities, this
does not per se qualify them as financial intermediaries that are actively dealing in
the same. Financial intermediaries are regulated by the BSP because they deal with
public funds when they offer quasi-banking functions. On the other hand, a holding
company is not similarly regulated because any investment activities it conducts
 are mere incidental operations, since its main purpose is to hold shares for policy-
controlling purposes

CaseDig: Asia Int'l. Auctioneers vs Parayno

G.R. No. 163445, 18 December 2007
Posted by: Vincent Albien V. Arnado on 31 July 2018

FACTS:

Congress enacted Republic Act (R.A.) No. 7227 creating the Subic Special Economic
Zone (SSEZ) and extending a number of economic or tax incentives therein. In case of
conflict between national and local laws with respect to tax exemption privileges in the
[SSEZ], the same shall be resolved in favor of the latter.

On June 3, 2003, then CIR Guillermo L. Parayno, Jr. issued Revenue Memorandum
Circular (RMC) No. 31-2003 setting the "Uniform Guidelines on the Taxation of
Imported Motor Vehicles through the Subic Free Port Zone and Other Freeport Zones
that are Sold at Public Auction.

Petitioners Asia International Auctioneers, Inc. (AIAI) and Subic Bay Motors
Corporation are corporations organized under Philippine laws with principal place of
business within the SSEZ. They are engaged in the importation of mainly secondhand
or used motor vehicles and heavy transportation or construction equipment which
they sell to the public through auction.

Petitioners filed a complaint before the RTC of Olongapo City, praying for the
nullification of RMC No. 31-2003 for being unconstitutional and an ultra vires act.

RTC granted the petitioners' application for the issuance of a writ of preliminary
injunction.

Court of Appeals Regional Trial Court, On March 31, 2004,said that Branch 74, of
Olongapo City is hereby declared bereft of jurisdiction to take cognizance of Civil Case.

ISSUE:

Which Court- the regular courts of justice established under Batas Pambansa Blg. 129
or the Court of Tax Appeals – is the proper court of jurisdiction to hear a case to
declare Revenue Memorandum Circulars unconstitutional and against an existing law
where the challenge does not involve the rate and figures of the imposed taxes?

HELD:

The arguments are unmeritorious.

Jurisdiction is defined as the power and authority of a court to hear, try and decide a
case.23 The issue is so basic that it may be raised at any stage of the proceedings, even
on appeal.24 In fact, courts may take cognizance of the issue even if not raised by the
parties themselves.25 There is thus no reason to preclude the CA from ruling on this
issue even if allegedly, the same has not yet been resolved by the trial court.

As to the second issue, petitioners' arguments do not sway. R.A. No. 1125, as
amended, states:

Sec. 7. Jurisdiction.—The Court of Tax Appeals shall exercise exclusive appellate

jurisdiction to review by appeal, as herein provided—

(1) Decisions of the Commissioner of Internal Revenue in cases involving disputed

assessments, refunds of internal revenue taxes, fees or other charges, penalties
imposed in relation thereto, or other matters arising under the National Internal
Revenue Code or other laws or part of law administered by the Bureau of Internal
Revenue; x x x (emphases supplied)

We have held that RMCs are considered administrative rulings which are issued from
time to time by the CIR. In the case at bar, the assailed revenue regulations and
revenue memorandum circulars are actually rulings or opinions of the CIR on the tax
treatment of motor vehicles sold at public auction within the SSEZ to implement
Section 12 of R.A. No. 7227 which provides that "exportation or removal of goods from
the territory of the [SSEZ] to the other parts of the Philippine territory shall be subject
to customs duties and taxes under the Customs and Tariff Code and other relevant tax
laws of the Philippines." They were issued pursuant to the power of the CIR under
Section 4 of the National Internal Revenue Code.

 
63. FAR EAST BANK AND TRUST COMPANY vs. CIRG.R. No. 138919 May 2, 2006FACTS
Petitioner is the trustee of various retirement plans established by several companies
for its employees. It reinvested these retirement funds in various money market
placements, bank deposits, etc. which earned interest income. Petitioner then claimed
for refund on the tax withheld and paid to the CIR for the four (4) quarters of 1993 on
the interest income on the ground that
employees’ 
 trusts are exempted by specific mandate of law from income taxation. However, these
claims for refund were denied. By this time, petitioner already had a pending petition
before the CTA involving the same legal issue but a previous taxable period. Petitioner
then filed a Motion to Admit Supplemental Petition seeking to include in that case the
tax refund claimed for 1993. However, the CTA denied such petition and advised
petitioner to file a separate petition for review for the refund of the withholding taxes
paid in 1993. Petitioner then filed another petition for review on its claim for refund for
1993 which was denied due to prescription.
ISSUE
WON the period for filing an action for tax refund has prescribed.
RULING
Yes. The Court ruled that the income from employee’s trusts is exempted from income
tax. However, period for filing an action for tax refund had prescribed. Since the
petition for review was only filed on 9 October 1995, petitioner could no longer claim
the refund of tax withheld for the period of January to 8 October 1995, the 2-year
prescriptive period having elapsed. The two-year prescriptive period for the refund of
erroneously paid taxes cannot be suspended by filing of the Supplemental Petition
because it did not give CTA jurisdiction over the new claim. The admission of
supplemental pleadings does not arise as a matter of right on the petitioner, but
remains in the sound discretion of the court. It is only upon the admission by the court
of the supplemental complaint that It may be deem to augment the original complaint.
Until such time, the court acquires no jurisdiction over such new claims as may be
raised in the supplemental complaint. In this case, the Court did not treat the
Supplemental Petition as having any judicial effect. The CTA acquired jurisdiction over
the claim for refund for taxes paid by petitioner in 1993 only upon the filing of the new
Petition for Review on 9 October 1995. Thus, the two-year period for filing an action
for tax refund had already prescribed.

NAIA VS PARAÑAQUE (GR NO. 155650 JULY 20, 2006)

Manila International Airport Authority vs Court of Appeals
GR No. 155650 July 20, 2006

Facts: Petitioner Manila International Airport Authority (MIAA) operates the Ninoy Aquino International
Airport (NAIA) complex in Parañaque City under Executive Order No. 9303, otherwise known as the
revised charter of the MIAA. EO 903 was issued on July 21, 1983 by then President Ferdinand E. Marcos.
Subsequently EO 909 and 298 amended the MIAA charter as operator of the international operator,
MIAA administers the land, improvements, and equipments within the NAIA complex. The MIAA charter
transferred to MIAA approximately 600 hectares of land, including the runways and buildings then under
the Bureau of Air Transportation. The MIAA charter provides that no portion of the land transferred to
MIAA shall be disposed of through sale or any other mode unless specifically approved by the President
of the Philippines. On March 21, 1997, the Office of the Government Corporate Counsel issued opinion
no. 061. The OGCC opined that the local government code of 1991 withdraw the exemption from real
estate tax granted to MIAA under section 21 of the MIAA charter. Thus, MIAA negotiated with
respondent city of Parañaque to pay the real estate tax imposed by the city. MIAA then paid some of the
real estate tax already due. On July 17, 2001, the City of Parañaque, through its city treasurer issued
notices of levy and warrants of levy on the airport lands and buildings. The mayor of the city of
Parañaque threatened to sell at public auction the airport lands and buildings should MIAA fail to pay
the real estate tax deliquency. MIAA thus sought clarification of OGCC opinion no. 061. On August 9,
2001, the OGCC issued opinion no. 147 clarifying OGCC opinion no. 061. The OGCC pointed out that
section 206 of the local government code requires persons exempt from real estate tax to show proof of
exemption. The OGCC opined that section 21 of the MIAA charter is the proof that MIAA is exempt from
real estate tax.

Issue: WON the airport lands and buildings are exempt from real estate tax.

Held: Yes. MIAA is a government instrumentality vested with corporate powers to perform efficiently its
governmental functions. MIAA is like any other government instrumentality, the only difference is that
MIAA is vested with corporate powers. Section 21 (10) of the introductory provisions of the
administrative code defines a government instrumentality as follows:

Sec 2 General terms defined

xxx

10.) Instrumentality refers to any agency of the national government, not integrated within the
department framework, vested with special functions or jurisdiction by law, endowed with some if not all
corporate powers, administering special funds, and enjoying operational autonomy, usually through a
charter.
When the law vests in a government instrumentality corporate powers, the instrumentality does not
become a corporation. Unless the government instrumentality is organized as a stock or non-stock
corporation, it remains a government instrumentality exercising not only governmental but also
corporate powers. Thus, MIAA exercises the governmental powers of eminent domain, police authority
and the surging of fees and charges. At the same time, MIAA exercises all the powers of a corporation
under the corporation law, in so far as these powers are not inconsistent with the provisions of this
executive order.

A government instrumentality like MIAA falls under section 133 (o) of the local government code, which
states:

Sec 133 Common limitations on the taxing powers of the local government units – Unless otherwise
provided herein, the exercise of the taxing power of the provinces, cities, municipalities and barangays
shall not extend to the levy of the following:

xxx

o.) Taxes, fees or charges of any kind on the national government, its agencies and instrumentalities and
local government units.

Section 133 (0) recognizes the basic principles that local governments cannot tax the national
government, which historically, merely delegated to the local governments the power to tax. While the
1987 constitution now includes taxation as one of the powers of the local governments, local
governments may only exercise such powers subject to such guidelines and limitations as the congress
may provide.

SHELL v. COC
Pilipinas Shell Petroleum Corporation vs. Commissioner of Customs

G.R. No. 195876

June 19, 2017

FACTS:

The omnibus motion is anchored primarily on the alleged applicability of Chevron Philippines, Inc. vs.
Commissioner of the Bureau of Customs to the case at bar. However, the court desisted from applying
the doctrine laid down in Chevron considering that the facts and circumstances therein are not in all
fours with those obtaining in the instant case. Thus, Chevron is not a precedent to the case at bar. The
facts and circumstances between the jurisprudence relied upon and the pending controversy should not
diverge on material points. But as clearly explained in the assailed December 5, 2016 decision, the main
difference between Chevron and the case at bar lies in the attendance of fraud. In Chevron, evidence on
record established that Chevron committed fraud in its dealings. On the other hand, proof that
petitioner Pilipinas Shell was just as guilty was clearly wanting. Simply there was no finding of fraud on
the part of petitioner in the case at bar. In his dissent, Associate Justice Peralta claims that fraud was
committed by the petitioner when it allegedly deliberately incurred delay in filing its Import Entry and
Internal Revenue Declaration in order to avail of the reduced tariff duty on oil importations, but as
exhaustively discussed in December 5, 2016 decision. The document was never formally offered as
evidence before the Court of Tax Appeals, therefore, bereft of evidentiary value. Resultantly, no scintilla
of proof was ever offered in evidence by respondent Commissioner of Customs to substantiate the claim
that Pilipinas Shell acted in fraudulent manner. The allegations of fraud on the part of Pilipinas Shell is
mere conjecture and purely speculative. In the case at bar, petitioner filed its Import Entry and Internal
Revenue Declaration and paid the import duty of its shipments on May 23, 1996. However, it only
received a demand letter from public respondent on July 27, 2000, or more than 4 years later. By this
time, the one-year prescriptive period had already elapsed. Justice Peralta and the respondent claim
that the government is no longer collecting tariff duties. Rather, it is exercising its ownership right over
the shipments, which were allegedly deemed abandoned by petitioner because of the latter’s failure to
timely file the IEIRD.

ISSUE:

Whether or not petitioner acted in fraudulent manner for ipso facto abandonment doctrine be applied?

HELD:

No. Public respondent cannot harp on the Chevron ruling to excuse compliance from the due notice
requirement before the imported articles can be deemed abandoned, for to do so would only downplay
the Court’s finding anent the non-attendance of fraud. It becomes abundantly clear that the notice
requirement as mandated in CMO 15-94 cannot be excused unless fraud is established. Fraud being
absent on the part of petitioner Pilipinas Shell, the ipso facto abandonment doctrine cannot operate
within the factual milieu of the instant case.