1.
Cebu Portland Cement v CTA for the purpose of computing the period of
I. Nature of cement as a manufactured
sproduct rather than a mineral product
is well-settled
The nature of cement as a "manufactured
product" (rather than a "mineral product") is
well-settled. The issue has repeatedly
presented itself as a threshold question for
determining the basis for computing the ad
valorem mining tax to be paid by cement
Companies. No pronouncement was made in
these cases that as a "manufactured product"
cement is subject to sales tax because this was
not at issue.
The decision sought to be reconsidered here
referred to the legislative history of Republic Act
No. 1299 which introduced a definition of the
terms "mineral" and "mineral products" in Sec.
246 of the Tax Code. Given the legislative
intent, the holding in the CEPOC case (G.R.
No. L-20563) that cement was subject to sales
tax prior to the effectivity f Republic Act No.
1299 cannot be construed to mean that, after
the law took effect, cement ceased to be so
subject to the tax. To erase any and all
misconceptions that may have been spawned
by reliance on the case of Cebu Portland
Cement Co. v. Collector of Internal Revenue, L-
20563, October 29, 1968 (28 SCRA 789)
penned by Justice Eugenio Angeles, the Court
has expressly overruled it insofar as it may
conflict with the decision of August 10, 1983,
now subject of these motions
reconsideration.
II. Prescription
Filing of income tax return cannot be
considered as substantial compliance with the
requirement of filing sales tax return;
assessment made by the commission in 1968
not barred by the five year prescriptive period;
We agree with the Commissioner. It has been
held in Butuan Sawmill Inc. v. CTA, supra, that
the filing of an income tax return cannot be
considered as substantial compliance with the
requirement of filing sales tax returns, in the
same way that an income tax return cannot be
considered as a return for compensating tax
prescription under Sec. 331. (Citing Bisaya
Land Transportation Co., Inc. v. Collector of
Internal Revenue, G.R. Nos. L-12100 and L-
11812, May 29, 1959). There being no sales
tax returns filed by CEPOC, the statute of
stations in Sec. 331 did not begin to run
against the government. The assessment
made by the Commissioner in 1968 on
CEPOC's cement sales during the period from
July 1, 1959 to December 31, 1960 is not
barred by the five-year prescriptive period.
Absent a return or when the return is false or
fraudulent, the applicable period is ten (10)
days from the discovery of the fraud, falsity or
omission. The question in this case is: When
was CEPOC's omission to file that return
deemed discovered by the government, so as
to start the running of said period.
2. Municipality of Makati v CA
I. Properties of a municipality, whether
real or personal, which are necessary
for public use cannot be attached and
sold at an execution sale to satisfy a
money judgment against a
municipality. Public funds are not
subject to levy and execution, unless
otherwise provided for by statute
for
In this jurisdiction, well-settled is the rule that
public funds are not subject to levy and
execution, unless otherwise provided for by
statute.More particularly, the properties of a
municipality, whether real or personal, which
are necessary for public use cannot be
attached and sold at execution sale to satisfy a
money judgment against the municipality.
Municipal revenues derived from taxes,
licenses and market fees, and which are
intended primarily and exclusively for the
purpose of financing the governmental
activities and functions of the municipality, are
exempt from execution. The foregoing rule
finds application in the case at bar. Absent a
showing that the municipal council of Makati
has passed an ordinance appropriating from
its public funds an amount corresponding to
the balance due under the RTC decision dated
June 4, 1987, less the sum of P99,743.94
deposited in Account No. S/A 265-537154-3,
no levy under execution may be validly
effected on the public funds of petitioner
deposited in Account No. S/A 263-530850-7.
Where a municipality fails without justifiable
cause to pay a final money judgment against
it, the claimant may avail of mandamus to
compel the enactment and approval of the
necessary appropriation ordinance and the
corresponding disbursement of municipal
funds.
Nevertheless, this is not to say that private
respondent and PSB are left with no legal
recourse. Where a municipality fails or
refuses, without justifiable reason, to effect
payment of a final money judgment rendered
against it, the claimant may avail of the
remedy of mandamus in order to compel the
enactment and approval of the necessary
appropriation ordinance, and the
corresponding disbursement of municipal
funds thereto.
II. Just compensation
This Court will not condone petitioner's blatant
refusal to settle its legal obligation arising from
expropriation proceedings it had in fact
initiated. It cannot be over-emphasized that,
within the context of the State's inherent power
of eminent domain,. . . [j]ust compensation
means not only the correct determination of
the amount to be paid to the owner of the land
but also the payment of the land within a
reasonable time from its taking. Without
prompt payment, compensation cannot be
considered "just" for the property owner is
made to suffer the consequence of being
immediately deprived of his land while being
made to wait for a decade or more before
actually receiving the amount necessary to
cope with his loss.
3. CIR v Algue
I. Collection of taxes should be made in
accordance with law.
Taxes are the lifeblood of the government and
so should be collected without unnecessary
hindrance On the other hand, such collection
should be made in accordance with law as any
arbitrariness will negate the very reason for
government itself. It is therefore necessary to
reconcile the apparently conflicting interests of
the authorities and the taxpayers so that the
real purpose of taxation, which is the
promotion of the common good, may be
achieved.
II. Appeal of the decision from the CIR
with the CTA is 30 days from receipt
thereof,
The appeal may be made within thirty days
after receipt of the decision or ruling
challenged.It is true that as a rule the warrant
of distraint and levy is "proof of the finality of
the assessment" and renders hopeless a
request for reconsideration," being
"tantamount to an outright denial thereof and
makes the said request deemed rejected." But
there is a special circumstance in the case at
bar that prevents application of this accepted
doctrine.
III. Warrant of distraint and levy. Rule that
the warrant of distraint and levy is
proof of the finality of assessment.
Exception is where there is letter of
protest after receipt of notice of
assessment.
It is true that as a rule the warrant of distraint
and levy is "proof of the finality of the
assessment" and renders hopeless a request
for reconsideration," being "tantamount to an
outright denial thereof and makes the said
request deemed rejected." But there is a
special circumstance in the case at bar that
prevents application of this accepted doctrine.
The proven fact is that four days after the
private respondent received the petitioner's
notice of assessment, it filed its letter of protest.
This was apparently not taken into account
before the warrant of distraint and levy was
issued; indeed, such protest could not be
located in the office of the petitioner. It was only
after Atty. Guevara gave the BIR a copy of the
protest that it was, if at all, considered by the
tax authorities. During the intervening period,
the warrant was premature and could therefore
not be served.
IV. Protest filed was not pro-forma but
was based on strong legal
consideration.
It thus had the effect of suspending on
January 18, 1965, when it was filed, the
reglementary period which started on the date
the assessment was received, viz., January
14, 1965. The period started running again
only on April 7, 1965, when the private
respondent was definitely informed of the
implied rejection of the said protest and the
warrant was finally served on it. Hence, when
the appeal was filed on April 23, 1965, only 20
days of the reglementary period had been
consumed.
V. Payment in promotional fees is not
fictitious. Claim of 75,000 deduction is
proper. Strict business procedures are
not applied in family corporations.
We agree with the respondent court that the
amount of the promotional fees was not
excessive. The total commission paid by the
Philippine Sugar Estate Development Co. to
the private respondent was P125,000.00..
After deducting the said fees, Algue still had a
balance of P50,000.00 as clear profit from the
transaction. The amount of P75,000.00 was
60% of the total commission. This was a
reasonable proportion, considering that it was
the payees who did practically everything,
from the formation of the Vegetable Oil
Investment Corporation to the actual purchase
by it of the Sugar Estate properties.
Vi. It is the burden of the taxpayer to prove the
validity of the transactions
The private respondent has proved that the
payment of the fees was necessary and
reasonable in the light of the efforts exerted by
the payees in inducing investors and
prominent businessmen to venture in an
experimental enterprise and involve
themselves in a new business requiring
millions of pesos. This was no mean feat and
should be, as it was, sufficiently recompensed.
VII. Rationale of Taxation
It is said that taxes are what we pay for
civilization society. Without taxes, the
government would be paralyzed for lack of the
motive power to activate and operate it.
Hence, despite the natural reluctance to
surrender part of one's hard earned income to
the taxing authorities, every person who is
able to must contribute his share in the
running of the government. The government
for its part, is expected to respond in the form
of tangible and intangible benefits intended to
improve the lives of the people and enhance
their moral and material values. This symbiotic
relationship is the rationale of taxation and
should dispel the erroneous notion that it is an
arbitrary method of exaction by those in the
seat of power.
4. BPI Family Savings Bank v CA
I. As a rule, the factual findings of the
appellate court are binding upon the Supreme
Court; the exception is when a judgment is
based on misapprehension of facts or when
the appellate court failed to notice certain
relevant facts, which if considered, would
justify a different conclusion.
II. If a taxpayer suffered a net loss, incurring
no tax liability to which a previous year’s tax
credit could be applied, there is no reason for
the BIR to withhold the tax refund which
rightfully belongs to the taxpayer.
It should be stressed that the rationale of the
rules of procedure is to secure a just
determination of every action. They are tools
designed to facilitate the attainment of justice.
But there can be no just determination of the
present action if we ignore, on grounds of strict
technicality, the Return submitted before the
CTA and even before this Court. To repeat,
the undisputed fact is that petitioner suffered a
net loss in 1990; accordingly, it incurred no tax
liability to which the tax credit could be
applied. Consequently, there is no reason for
the BIR and this Court to withhold the tax
refund which rightfully belongs to the
petitioner.
III. Technicalities and legalisms, however
exalted, should not be misused by the
government to keep money not belonging to it
and thereby enrich itself at the expense of its
law-abiding citizens-if the State expects its
taxpayers to observe fairness and honesty in
paying their taxes, so it must apply the same
standard against itself in refunding excess
payments of such taxes.
respondents argue that tax refunds are in the
nature of tax exemptions and are to be
construed strictissimi juris against the
claimant. Under the facts of this case, we hold
that petitioner has established its claim.
Petitioner may have failed to strictly comply
with the rules of procedure; it may have even
been negligent. These circumstances,
however, should not compel the Court to
disregard this cold, undisputed fact: that
petitioner suffered a net loss in 1990, and that
it could not have applied the amount claimed
as tax credits.
5. CIR v Tokyo Shipping
I. A claim for refund is in the nature of a
claim for exemption and should be
construed in strictissimi juris against
the taxpayer.
We agree with petitioner that a claim for refund
is in the nature of a claim for exemption and
should be construed in strictissimi juris against
the taxpayer.Likewise, there can be no
disagreement with petitioner's stance that
private respondent has the burden of proof to
establish the factual basis of its claim for tax
refund.
6. CIR v Mitsubishi Metal Corp
I.Findings of fact of the COurt of Tax Appeals
are entitled to the highest respect and can only
be disturbed on appeal if they are not
supported by substantial evidence or if there is
a showing of gross error or abuse on the part
of the tax court.
Time and again, we have ruled that findings of
fact of the Court of Tax Appeals are entitled to
the highest respect and can only be disturbed
on appeal if they are not supported by
substantial evidence or if there is a showing of
gross error or abuse on the part of the tax
court. Thus, ordinarily, we could give due
consideration to the holding of respondent
court that Mitsubishi is a mere agent of
Eximbank. Compelling circumstances
obtaining and proven in these cases, however,
warrant a departure from said general rule
since we are convinced that there is a
misapprehension of facts on the part of the tax
court to the extent that its conclusions are
speculative in nature.
II.The agreement is strictly between Mitsubishi
as creditor in the contract of loan and Atlas as
the seller of the copper concentrates;
Mitsubishi was not a mere agent in said
transaction
The loan and sales contract between Mitsubishi
and Atlas does not contain any direct or
inferential reference to Eximbank whatsoever.
The agreement is strictly between Mitsubishi as
creditor in the contract of loan and Atlas as the
seller of the copper concentrates. From the
categorical language used in the document,
one prestation was in consideration of the
other. The specific terms and the reciprocal
nature of their obligations make it implausible,
if not vacuous to give credit to the cavalier
assertion that Mitsubishi was a mere agent in
said transaction.
III. Rule is settled that laws granting exemption
from tax are construed strictissimi juris against
the taxpayer and liberally in favor of the taxing
power.
Taxation is the rule and exemption is the
exception. The burden of proof rests upon the
party claiming exemption to prove that it is in
fact covered by the exemption so claimed,
which onus petitioners have failed to
discharge. Significantly, private respondents
are not even among the entities which, under
Section 29 (b) (7) (A) of the tax code, are
entitled to exemption and which should
indispensably be the party in interest in this
case
7. PBCOM v. CIR
I. Due process of law under the
Constitution does not require judicial
proceedings in tax cases. It is of
utmost importance that the modes
adopted to enforce the collection of
taxes levied should be summary and
interfered with as little as possible.
Basic is the principle that "taxes are the
lifeblood of the nation." The primary purpose is
to generate funds for the State to finance the
needs of the citizenry and to advance the
common weal. Due process of law under the
Constitution does not require judicial
proceedings in tax cases. This must
necessarily be so because it is upon taxation
that the government chiefly relies to obtain the
means to carry on its operations and it is of
utmost importance that the modes adopted to
enforce the collection of taxes levied should be
summary and interfered with as little as
possible.
II. Fundamental is the rule that the State
cannot be put in estoppel by the
mistakes or errors of its officials or
agents.
Further, fundamental is the rule that the State
cannot be put in estoppel by the mistakes or
errors of its officials or agents. As pointed out
by the respondent courts, the nullification of
RMC No. 7-85 issued by the Acting
Commissioner of Internal Revenue is an
administrative interpretation which is not in
harmony with Sec. 230 of 1977 NIRC. for
being contrary to the express provision of a
statute. Hence, his interpretation could not be
given weight for to do so would, in effect,
amend the statute.
8. Sison v. Ancheta
I. The Constitution sets forth the
restriction to the power to tax.
he power to tax moreover, to borrow from
Justice Malcolm, "is an attribute of
sovereignty. It is the strongest of all the
powers of of government." It is, of course, to
be admitted that for all its plenitude 'the power
to tax is not unconfined. There are restrictions.
The Constitution sets forth such limits .
Adversely affecting as it does properly rights,
both the due process and equal protection
clauses inay properly be invoked, all petitioner
does, to invalidate in appropriate cases a
revenue measure. if it were otherwise, there
would -be truth to the 1803 dictum of Chief
Justice Marshall that "the power to tax involves
the power to destroy." In a separate opinion in
Graves v. New York, Justice Frankfurter, after
referring to it as an 1, unfortunate remark
characterized it as "a flourish of rhetoric
[attributable to] the intellectual fashion of the
times following] a free use of absolutes." This
is merely to emphasize that it is riot and there
cannot be such a constitutional mandate.
Justice Frankfurter could rightfully conclude:
"The web of unreality spun from Marshall's
famous dictum was brushed away by one
stroke of Mr. Justice Holmess pen: 'The power
to tax is not the power to destroy while this
Court sits." So it is in the Philippines.
II. A bare allegation that Batas 135,
which sets different income tax
schedules for income tax earners and
business or professional income
earners, is arbitrary and does not
suffice to invalidate tax statute.
The difficulty confronting petitioner is thus
apparent. He alleges arbitrariness. A mere
allegation, as here. does not suffice. There
must be a factual foundation of such
unconstitutional taint. Considering that
petitioner here would condemn such a
provision as void or its face, he has not made
out a case. This is merely to adhere to the
authoritative doctrine that were the due
process and equal protection clauses are
invoked, considering that they arc not fixed
rules but rather broad standards, there is a
need for of such persuasive character as
would lead to such a conclusion. Absent such
a showing, the presumption of validity must
prevail
III. The State is free to select the subjects
of taxation and inequalities
consequent to its exercise infringe no
constitutional limitation.
The equal protection clause is, of course,
inspired by the noble concept of approximating
the Ideal of the laws benefits being available to
all and the affairs of men being governed by
that serene and impartial uniformity, which is
of the very essence of the Idea of law. There
is, however, wisdom, as well as realism in
these words of Justice Frankfurter: "The
equality at which the 'equal protection' clause
aims is not a disembodied equality. The
Fourteenth Amendment enjoins 'the equal
protection of the laws,' and laws are not
abstract propositions. They do not relate to
abstract units A, B and C, but are expressions
of policy arising out of specific difficulties,
address to the attainment of specific ends by
the use of specific remedies. The Constitution
does not require things which are different in
fact or opinion to be treated in law as though
they were the same." Hence the constant
reiteration of the view that classification if
rational in character is allowable. As a matter
of fact, in a leading case of Lutz V. Araneta,
this Court, through Justice J.B.L. Reyes, went
so far as to hold "at any rate, it is inherent in
the power to tax that a state be free to select
the subjects of taxation, and it has been
repeatedly held that 'inequalities which result
from a singling out of one particular class for
taxation, or exemption infringe no
constitutional limitation.'
IV. Uniformity in taxation quite similar to
the standard of equal protection.
"The rule of uniformity does not call for
perfect uniformity or perfect equality,
because this is hardly attainable." The
problem of classification did not
present itself in that case. It did not
arise until nine years later, when the
Supreme Court held: "Equality and
uniformity in taxation means that all
taxable articles or kinds of property of
the same class shall be taxed at the
same rate. The taxing power has the
authority to make reasonable and
natural classifications for purposes of
taxation, As clarified by Justice
Tuason, where "the differentiation"
complained of "conforms to the
practical dictates of justice and equity"
it "is not discriminatory within the
meaning of this clause and is
therefore uniform." There is quite a
similarity then to the standard of equal
protection for all that is required is that
the tax "applies equally to all persons,
firms and corporations placed in
similar situation."
V. Taxpayers may be classified into
different categories where it rests on
real differences.
Apparently, what misled petitioner is his failure
to take into consideration the distinction
between a tax rate and a tax base. There is no
legal objection to a broader tax base or
taxable income by eliminating all deductible
items and at the same time reducing the
applicable tax rate. Taxpayers may be
classified into different categories. To repeat,
it. is enough that the classification must rest
upon substantial distinctions that make real
differences.
9. Reyes v. Almanzor
 I. Collection of taxes should be made in
accordance with law as any
arbitrariness will negate the very
reason for government itself.
Verily, taxes are the lifeblood of the
government and so should be
collected without unnecessary
hindrance. However, such collection
should be made in accordance with
law as any arbitrariness will negate
the very reason for government itself.
It is therefore necessary to reconcile
the apparently conflicting interests of
the authorities and the taxpayers so
that the real purpose of taxations,
which is the promotion of the common
good, may be achieved
(Commissioner of Internal Revenue v.
Algue, Inc., Et Al., 158 SCRA 9
[1988]). Consequently, it stands to
reason that petitioners who are
burdened by the government by its
Rental Freezing Laws (then R.A. No.
6359 and P.D. 20) under the principle
of social justice should not now be
penalized by the same government by
the imposition of excessive taxes
petitioners can ill afford and eventually
result in the forfeiture of their
properties.
II. Appraisal and assessment of real
propery; the appraisal and
assessment of real property for
taxation purposes is that the property
must be appraised at its current and
fair market value.
10. Nitafan v. CIR
I. The salaries of members of the
Judiciary are subject to the general
income tax applied to all taxpayers.
Although such intent was somehow and
inadvertently not clearly set forth in the final
text of the 1987 Constitution, the deliberations
of the1986 Constitutional Commission negate
the contention that the intent of the framers is
to revert to the original concept of non-
diminution of salaries of judicial officers.
Justices and judges are not only the citizens
whose income has been reduced in accepting
service in government and yet subject to
income tax. Such is true also of Cabinet
members and all other employees.
11. PAL v Secretary of Finance AND
12. Tolentino v. Secretary of Finance
I. A bill originating in the House of
Representatives may undergo such
extensive changes in the Senate that
the result may be a rewriting of the
whole; As a result of the Senate
action, a distinct bill may be produced
and to insist that a revenue statute
may substantially be the same as the
House bill would be to deny the
Senate's power not only to "concur
with amendments" but also to propose
amendments.
II. Legislative power is vested in the Congress
of th Philippines, consisting of a Senate and a
House of Representatives," not in any
particular chamber.
III. There is really no difference between the
Senate preserving the House Bill up to the
enacting clause and then writing its own
version following the enacting clause and, on
the other hand, separately presenting a bill of
its own on the same subject matter.
IV. The Constitution means that the intiative
for filing revenue, tariff or tax bills, bills
authorizing an increase of the public debt,
private bills and bills of local application must
come from the House of Representatives and
that it does not prohibit the filing in the Senate
of a substitute bill in anticipation of its receipt
of the bill from the House.
V. Presidential certification on urgency of a bill
dispenses with the requirement not only of
printing but also that of reading the bill on
separate days.
VI. A third version of the bill may result from
the conference committee, which is
considered an "amendment in the nature of a
substitute," the only requirement being that the
third version be germane to the subject of the
House and Senate bills. The report of the
conference committee needs the approval of
both houses of COngress to become valis as
an act of the legislative department.
VII. The grant of a franchise for the operation
of a public utility is subject to amendment,
alteration or repeal by Congress when the
common good so requires.
VIII. Expanded value added tax law. Even with
due recognition of its high estate and its
importance in a democratic society, the press
is not immune from general regulation by the
State.
IX. The free exercise of religion clause does
not prohibit imposing a generally applicable
sales and use tax on the sale of religious
materials by a religious organization.
X. The VAT registration fee is a mere
admininstative fee, one not imposed on the
exercise of privilege, much less a
constitutional right.
XI. Regressivity is not a negative standard for
courts to enforce since what Congress is
required by the Constitution to do is to "evolve
a progressive system of taxation."
.
13. Abakada Guro v Executive Secretary
I. The VAT is a tax on spending or
consumption- it is levied on the sale, barter,
exchange or lease of goods or properties and
services; Being an indirect taxon expenditure,
the seller of goods or services may pass on
the amount of tax paid to the buyer.
II. In the Philippines, the value-added system
of sales taxation has long been in existence,
albeit in a different mode- prior to 1978, the
system was a single-stage tax computed
under the "cost deduction method" and was
payable only by the original sellers, then the
single-stage system was subsequently
modified, and a mixture of the "cost deduction
method" and "tax credit method" was used to
determine the value added tax payable; Under
the "tax credit method," an entity can credit
against or subtract from the VAT charged on
its sales or outputs the VAT paid onits
purchases, inputs and imports.
III. Since there is no question that the revenue
bill originated in the House of Representatives,
the Senate was acting within its constitutional
power to introduce amendments to the House
bill hen it included provision in Senate Bill No.
1950 amending corporate income taxes,
percentage, excise and franchise taxes- Article
VI, Sec. 24 of the Constitution does not
contain any prohibition or limitation on the
extent of amendments that may be introduced
by the senate to the House Revenue bill.
IV. A delegation is valid only if the ;aw
(a) is complete in itself, setting forth the policy
to be executed, carried out or implemented by
the delegate, and
(b) fixes a standard- the limits of which are
sufficiently determinate and determinable- to
which the delegate must conform in the
performance of his function; A sufficient
standard is one which defines legislative
policy, marks its limits, maps out its
boundaries and specifies the public agency to
apply it.
V. The case before the Court is not a
delegation of legislative power-it is simply a
delegation of ascertainment of facts upon
which enforcements and administration of the
increased rate under the law is contingent. No
discretion would be exercised by the
President.
14. CIR v Botelbo Shipping
I. Under R.A. 1789, reparations goods
obtained by private parties are subject ot
compensating tax since section 14 of said law
exempts them only from customs duties,
consular fees and special import tax.
II. Every tax exemption implies a waiver of the
right to collect what otherwise would be due to
the government,
III. The avowed purpose of a tax exemption is
some public benefit or interest, which the
lawmaking body considers sufficient to offset
the monetary loss entailed in the grant of
exemption.
IV.Constitution does not bar tax exemptions.
V. Tax-exemptions for end-users who
purchased reparations goods before June 17,
1961.
It is true that Republic Act No. 3079 does not
explicitly declare that those who purchased
reparations goods prior to June 17, 1961, are
exempt from the compensating tax. It does not
say so, because they do not really enjoy such
exemption, unless they comply with the
proviso in Section 20 of said Act, by applying
for the renovation of their respective utilization
contracts, "in order to avail of any provision of
the Amendatory Act which is more favorable"
to the applicant. In other words, it is manifest,
from the language of said section 20, that the
same intended to give such buyers the
opportunity to be treated "in like manner and to
the same extent as an end-user filing his
application after this approval of this
Amendatory Act."
15. Tan v Del Rosario
I. Simplified Net Income Taxation; RA No.
7496 did not adopt a gross income, but have
retiained the net income, taxation scheme.
On the basis of the above language of the law,
it would be difficult to accept petitioner's view
that the amendatory law should be considered
as having now adopted a gross income,
instead of as having still retained the net
income, taxation scheme. The allowance for
deductible items, it is true, may have
significantly been reduced by the questioned
law in comparison with that which has
prevailed prior to the amendment; limiting,
however, allowable deductions from gross
income is neither discordant with, nor opposed
to, the net income tax concept. The fact of the
matter is still that various deductions, which
are by no means inconsequential, continue to
be well provided under the new law.
II. Uniformity of taxation merely requires that
all subjects or objects of taxation, similarly
situated, are to be treated alike both in
privileges and liabilities.
Uniformity of taxation, like the kindred concept
of equal protection, merely requires that all
subjects or objects of taxation, similarly
situated, are to be treated alike both in
privileges and liabilities (Juan Luna
Subdivision vs. Sarmiento, 91 Phil. 371).
Uniformity does not forfend classification as
long as: (1) the standards that are used
therefor are substantial and not arbitrary, (2)
the categorization is germane to achieve the
legislative purpose, (3) the law applies, all
things being equal, to both present and future
conditions, and (4) the classification applies
equally well to all those belonging to the same
class
III. The legislative intent is to increasingly shift
the income tax system towards the schedular
approach in the income taxation of individual
taxpayers and to maintain, by and large, the
present global treatment on taxable
corporation.
What may instead be perceived to be apparent
from the amendatory law is the legislative
intent to increasingly shift the income tax
system towards the schedular approach2 in
the income taxation of individual taxpayers
and to maintain, by and large, the present
global treatment3 on taxable corporations. We
certainly do not view this classification to be
arbitrary and inappropriate.
IV. Schedular Approach is a system employed
where the income tax treatment varies and
made to depend on the kind or category of
taxable income of the taxpayer.
V. Global treatment is a system where the tax
treatment views indifferently the tax base and
generally treats in common all categories of
taxable income of the taxpayer,
VI. A general professional partnership, unlike
an ordinary business partnership, is not itself
an income taxpayer, as the income tax is
imposed not on the professional partnership
but on the partners themselves in their
individual capacity.
The Court, first of all, should like to correct the
apparent misconception that general
professional partnerships are subject to the
payment of income tax or that there is a
difference in the tax treatment between
individuals engaged in business or in the
practice of their respective professions and
partners in general professional partnerships.
The fact of the matter is that a general
professional partnership, unlike an ordinary
business partnership (which is treated as a
corporation for income tax purposes and so
subject to the corporate income tax), is not
itself an income taxpayer. The income tax is
imposed not on the professional partnership,
which is tax exempt, but on the partners
themselves in their individual capacity
computed on their distributive shares of
partnership profits.
VII.Partnerships under the Tax Code are
subject to income tax which are by law
assimilated to be within the context of, and so
legally contemplated as, corporations.
Partnerships are, under the Code, either
"taxable partnerships" or "exempt
partnerships." Ordinarily, partnerships, no
matter how created or organized, are subject
to income tax (and thus alluded to as "taxable
partnerships") which, for purposes of the
above categorization, are by law assimilated to
be within the context of, and so legally
contemplated as, corporations. Except for few
variances, such as in the application of the
"constructive receipt rule" in the derivation of
income, the income tax approach is alike to
both juridical persons.
VIII. SNIT is not intended to cover corporations
or partnerships which are independently
subject to the payment of the income tax.
IX. Exempt partnerships are not similarly
identified as corporations nor even considered
as independent taxable entities for income tax
purposes.
"Exempt partnerships," upon the other hand,
are not similarly identified as corporations nor
even considered as independent taxable
entities for income tax purposes. A general
professional partnership is such an
example.Here, the partners themselves, not
the partnership (although it is still obligated to
file an income tax return [mainly for
administration and data]), are liable for the
payment of income tax in their individual
capacity computed on their respective and
distributive shares of profits. In the
determination of the tax liability, a partner does
so as an individual, and there is no choice on
the matter. In fine, under the Tax Code on
income taxation, the general professional
partnership is deemed to be no more than a
mere mechanism or a flow-through entity in
the generation of income and the ultimate
distribution of such income to, respectively,
each of the individual partners.
16. Maceda v Macaraeg
I. The National Power Corporation is tax-
exempt from all forms of taxes based on the
history of statutes granting it tax exemption
privileges.
One common theme in all these laws is that
the NPC must be enable to pay its
indebtedness 56which, as of P.D. No. 938,
was P12 Billion in total domestic
indebtedness, at any one time, and U$4 Billion
in total foreign loans at any one time. The NPC
must be and has to be exempt from all forms
of taxes if this goal is to be achieved.
By virtue of P.D. No. 938 NPC's capital stock
was raised to P8 Billion. It must be
remembered that to pay the government share
in its capital stock P.D. No. 758 was issued
mandating that P200 Million would be
appropriated annually to cover the said unpaid
subscription of the Government in NPC's
authorized capital stock. And significantly one
of the sources of this annual appropriation of
P200 million is TAX MONEY accruing to the
General Fund of the Government. It does not
stand to reason then that former President
Marcos would order P200 Million to be taken
partially or totally from tax money to be used to
pay the Government subscription in the NPC,
on one hand, and then order the NPC to pay
all its indirect taxes, on the other.chanroblesv
II. Oil companies shall pay for fuel oil taxes on
oil supplied to the National Power Corporation.
By the very nature of indirect taxation, the
economic burden of such taxation is expected
to be passed on through the channels of
commerce to the user or consumer of the
goods sold. Because, however, the NPC has
been exempted from both direct and indirect
taxation, the NPC must beheld exempted from
absorbing the economic burden of indirect
taxation. This means, on the one hand, that
the oil companies which wish to sell to NPC
absorb all or part of the economic burden of
the taxes previously paid to BIR, which could
they shift to NPC if NPC did not enjoy
exemption from indirect taxes. This means
also, on the other hand, that the NPC may
refuse to pay the part of the "normal" purchase
price of bunker fuel oil which represents all or
part of the taxes previously paid by the oil
companies to BIR. If NPC nonetheless
purchases such oil from the oil companies -
because to do so may be more convenient
and ultimately less costly for NPC than NPC
itself importing and hauling and storing the oil
from overseas - NPC is entitled to be
reimbursed by the BIR for that part of the
buying price of NPC which verifiably
represents the tax already paid by the oil
company-vendor to the BIR.
III. NAPOCOR may claim tax credit on claims
reasonably filed under Sec. 230 of the NIRC.
17. Abakada Guro v Executive Secretary
(repeated case)
18. Tan v Mun of Pagbilao
I. Municipal councils without power to impose
specific tax nor to impose wharfage fees.
The ordinance imposes certain charges and/or
fees on articles or merchandise landed upon,
or loaded from a certain whard and on the strip
of shoreline adjacent, thereto, measuring 300
meters, is ultra vires and hence, null and void,
because the said ordinance charges a specific
sum, ranging from one centavo and up, by the
hear or number and requires assessment
beyond a listing and classification of the
objects to be charged.The phraseology of the
above paragraph points to the fact that the
charges collected pursuant thereto,
correspond to the words "berthing, unloading
and loading of cargoes or merchandise" which
fall under the category of wharfage fees. The
change or the designation of the said fees as
"rental of municipal property" did not change
their basic character as "wharfage fees". Being
a specific tax, the municipality has no right to
impose the same, for taxation is an attribute of
sovereignty which municipal corporation do
not enjoy.
II. Payments made under invalid acts
refundable.
19. PAL v Edu
I. Registration fees of motor vehicles are
exacted pursuant to the Land Transportation
and Traffic Code. These are actually taxes
intended for additional revenue of the
government.
If the purpose is primarily revenue, or if
revenue is, at least, one of the real and
substantial purposes, then the exaction is
properly called a tax (Umali, Id.) Such is the
case of motor vehicle registration fees. The
conclusions become inescapable in view of
Section 70(b) of Rep. Act 587 quoted in the
Calalang case. The same provision appears
as Section 591-593). in the Land
Transportation code. It is patent therefrom that
the legislators had in mind a regulatory tax as
the law refers to the imposition on the
registration, operation or ownership of a motor
vehicle as a "tax or fee." Though nowhere in
Rep. Act 4136 does the law specifically state
that the imposition is a tax, Section 591-593).
speaks of "taxes." or fees ... for the registration
or operation or on the ownership of any motor
vehicle, or for the exercise of the profession of
chauffeur ..." making the intent to impose a tax
more apparent.
II. The purpose behind the law requiring
owners of vehicles to pay their registration is
mainly to raise revenue for the construction
and maintenance of highways.
Presently, Sec. 61 of the Land Transportation
and Traffic Code provides:
Sec. 61. Disposal of Mortgage. Collected—
Monies collected under the provisions of this
Act shall be deposited in a special trust
account in the National Treasury to constitute
the Highway Special Fund, which shall be
apportioned and expended in accordance with
the provisions of the" Philippine Highway Act
of 1935. "Provided, however, That the amount
necessary to maintain and equip the Land
Transportation Commission but not to exceed
twenty per cent of the total collection during
one year, shall be set aside for the purpose.
(As amended by RA 64-67, approved August
6, 1971).
It appears clear from the above provisions that
the legislative intent and purpose behind the
law requiring owners of vehicles to pay for
their registration is mainly to raise funds for the
construction and maintenance of highways
and to a much lesser degree, pay for the
operating expenses of the administering
agency. On the other hand, the Philippine
Rabbit case mentions a presumption arising
from the use of the term "fees," which appears
to have been favored by the legislature to
distinguish fees from other taxes such as
those mentioned in Section 13 of Rep. Act
4136 which reads:
Sec. 13. Payment of taxes upon registration.—
No original registration of motor vehicles
subject to payment of taxes, customs s duties
or other charges shall be accepted unless
proof of payment of the taxes due thereon has
been presented to the Commission.
referring to taxes other than those imposed on
the registration, operation or ownership of a
motor vehicle (Sec. 59, b, Rep. Act 4136, as
amended).
III. The nature of an exaction is to be
determined by the purpose for which it is being
exacted, if the purpose is primarily revenue, or
if revenue is at least one of the substantial
purposes, then the exaction is property called
a tax.
20. Esso Standard v. CIR
I. Margin fee is not a tax but an exaction
designed to curb the excessive
demands upon international reserves.
A margin levy on foreign exchange is a form of
exchange control or restriction designed to
discourage imports and encourage exports,
and ultimately, 'curtail any excessive demand
upon the international reserve' in order to
stabilize the currency. Originally adopted to
cope with balance of payment pressures,
exchange restrictions have come to serve
various purposes, such as limiting non-
essential imports, protecting domestic industry
and when combined with the use of multiple
currency rates providing a source of revenue
to the government, and are in many
developing countries regarded as a more or
less inevitable concomitant of their economic
development programs. The different
measures of exchange control or restriction
cover different phases of foreign exchange
transactions, i.e., in quantitative restriction, the
control is on the amount of foreign exchange
allowable. In the case of the margin levy, the
immediate impact is on the rate of foreign
exchange; in fact, its main fsunction is to
control the exchange rate without changing the
par value of the peso as fixed in the Bretton
Woods Agreement Act. For a member nation
is not supposed to alter its exchange rate (at
par value) to correct a merely temporary
disequilibrium in its balance of payments. By
its nature, the margin levy is part of the rate of
exchange as fixed by the government.
As to the contention that the margin levy is a
tax on the purchase of foreign exchange and
hence should not form part of the exchange
rate, suffice it to state that We have already
held the contrary for the reason that a tax is
levied to provide revenue for government
operations, while the proceeds of the margin
fee are applied to strengthen our country's
international reserves.
II. Margin fees are not expenses in connection
with the business of the petitioners.
III. The rule that claims for deductions are a
matter of legislative grace; Burden of justifying
a deduction lies on the taxpayer.
IV. Esso, having assumed an expense
properly attributable to its head office, cannot
claim the same as an ordinary and necessary
expense paid or incurred in carrying on its own
trade or business.
ESSO has not shown that the remittance to
the head office of part of its profits was made
in furtherance of its own trade or business.
The petitioner merely presumed that all
corporate expenses are necessary and
appropriate in the absence of a showing that
they are illegal or ultra vires. This is error. The
public respondent is correct when it asserts
that "the paramount rule is that claims for
deductions are a matter of legislative grace
and do not turn on mere equitable
considerations ... . The taxpayer in every
instance has the burden of justifying the
allowance of any deduction claimed."
It is clear that ESSO, having assumed an
expense properly attributable to its head office,
cannot now claim this as an ordinary and
necessary expense paid or incurred in carrying
on its own trade or business.
21. Lozano v Energy Regulatory Board
I. The Oil Price Stabilization Fund must not be
understood to be a funding designed to
guarantee oil firms' profits. It is established
precisely to protect the consuming public from
the erratic movement of oil prices and to
preclude oil companies from taking advantage
of fluctuations occurring every so often.
The OPSF, as the Court held in the aforecited
CACP cases, must not be understood to be a
funding designed to guarantee oil firms’ profits
although as a subsidy, or a trust account, the
Court has no doubt that oil firms make money
from it. As we held there, however, the OPSF
was established precisely to protect the
consuming public from the erratic movement
of oil prices and to preclude oil companies
from taking advantage of fluctuations occurring
every so often. As a buffer mechanism, it
stabilizes domestic prices by bringing about a
uniform rate rather than leaving pricing to the
caprices of the market.
There is no doubt that the increase in oil prices
in question (not to mention another one
impending, which the Court understands has
been under consideration by policy-makers)
spells hard(er) times for the Filipino people.
The Court can not, however, debate the
wisdom of policy or the logic behind it (unless
it is otherwise arbitrary), not because the Court
agrees with policy, but because the Court is
not the suitable forum for debate. It is a
question best judged by the political
leadership which after all, determines
policy, and ultimately, by the electorate,
that stands to be better for it or worse off,
either in the short or long run.
At this point, the Court shares the indignation
of the people over the conspiracy of events
and regrets its own powerlessness, if by this
Decision it has been powerless. The
constitutional scheme of things has simply left
it with no choice.
II. While under EO 172, a hearing is
indispensable, the Board is not precluded from
ordering, ex parte, a provisional increase in
the price of petroleum products.
Senator Maceda and Atty. Lozano, in
questioning the lack of a hearing, have
overlooked the provisions of Section 8 of
Executive Order No. 172, which we
quote:jgc:chanrobles.com.ph
"SECTION 8. Authority to Grant Provisional
Relief . — The Board may, upon the filing of
an application, petition or complaint or at any
stage thereafter and without prior hearing, on
the basis of supporting papers duly verified or
authenticated, grant provisional relief on
motion of a party in the case or on its own
initiative, without prejudice to a final decision
after hearing, should the Board find that the
pleadings, together with such affidavits,
documents and other evidence which may be
submitted in support of the motion,
substantially support the provisional order:
Provided, That the Board shall immediately
schedule and conduct a hearing thereon within
thirty (30) days thereafter, upon publication
and notice to all affected parties.chanrobles
law library
As the Order itself indicates, the authority for
provisional increase falls within the above
provision.
There is no merit in the Senator’s contention
that the "applicable" provision is Section 3,
paragraph (e) of the Executive Order, which
we quote:chanrob1es virtual 1aw library
(e) Whenever the Board has determined that
there is a shortage of any petroleum product,
or when public interest so requires, it may take
such steps as it may consider necessary,
including the temporary adjustment of the
levels of prices of petroleum products and the
payment to the Oil Price Stabilization Fund
created under Presidential Decree No. 1956
by persons or entities engaged in the
petroleum industry of such amounts as may be
determined by the Board, which will enable the
importer to recover its cost of importation.
What must be stressed is that while under
Executive Order No. 172, a hearing is
indispensable, it does not preclude the Board
from ordering, ex parte, a provisional increase,
as it did here, subject to its final disposition of
whether or not: (1) to make it permanent; (2) to
reduce or increase it further; or (3) to deny the
application. Section 37 paragraph (e) is akin to
a temporary restraining order or a writ of
preliminary attachment issued by the courts,
which are given ex parte, and which are
subject to the resolution of the main case.
22. Meralco Securities v CBAA
I, A petition for certiorari can be availed of to
review the decision of the Central Board of
Assessment Appeals in the absence of judicial
review of the board's decision provided for in
the Real Property Tax Code.
We hold that certiorari was properly availed of
in this case. It is a writ issued by a superior court
to an inferior court, board or officer exercising
judicial or quasi-judicial functions whereby the
record of a particular case is ordered to be
elevated for review and correction in matters of
law The rule is that as to administrative
agencies exercising quasi-judicial power there
is an underlying power in the courts to
scrutinize the acts of such agencies on
questions of law and jurisdiction even though
no right of review is given by the statute
"The purpose of judicial review is to keep the
administrative agency within its jurisdiction and
protect substantial rights of parties affected by
its decisions." The review is a part of the system
of checks and balances which is a limitation on
the separation of powers and which forestalls
arbitrary and unjust adjudications.
II.The Pipeline System of Meralco Securities
classified as real property and subject to tax
they being machinery or improvements and do
not fall within the classes of exempt real
property.
Meralco Securities insists that its pipeline is not
subject to realty tax because it is not real
property within the meaning of article 415. This
contention is not sustainable under the
provisions of the Assessment Law, the Real
Property Tax Code and the Civil Code.
Section 2 of the Assessment Law provides that
the realty tax is due "on real property, including
land, buildings, machinery, and other
improvements" not specifically exempted in
section 3 thereof. This provision is reproduced
with some modification in the Real Property Tax
Code which provides:
SEC. 38. Incidence of Real Property Tax.—
There shall be levied, assessed and collected
in all provinces, cities and municipalities an
annual ad valorem tax on real property, such as
land, buildings, machinery and other
improvements affixed or attached to real
property not hereinafter specifically exempted.
* authorized to impose a license fee and to tax
It is incontestable that the pipeline of Meralco
Securities does not fall within any of the classes
of exempt real property enumerated in section
3 of the Assessment Law and section 40 of the
Real Property Tax Code.
III. The Petroleum Law does not exempt
Meralco Securities from payment of realty
taxes.
Meralco Securities argues that the realty tax is
a local tax or levy and not a tax of general
application. This argument is untenable
because the realty tax has always been
imposed by the lawmaking body and later by
the President of the Philippines in the exercise
of his lawmaking powers, as shown in section
342 et seq. of the Revised Administrative Code,
Act No. 3995, Commonwealth Act No. 470 and
Presidential Decree No. 464.
The realty tax is enforced throughout the
Philippines and not merely in a particular
municipality or city but the proceeds of the tax
accrue to the province, city, municipality and
barrio where the realty taxed is situated (Sec.
86, P.D. No. 464). In contrast, a local tax is
imposed by the municipal or city council by
virtue of the Local Tax Code, Presidential
Decree No. 231, which took effect on July 1,
1973
23. Procter and Gamble v. Municipality of
Jagna
I.A municipality is authorized to impose three
kinds of licenses.
1. a license for regulation of useful occupation
or enterpise; 2. license for restriction or
regulation of non-useful occupations or
enterprises; and 3. license for revenue
II. The Municipality of Jagna, Bohol is
for revenue purposes.
III. Storage fees imposed by a municipality is
actually a municipal license tax or fee on
persons, firms, or corporations storing copra in
a bodega in the municipality.
The storage fee under the questioned
ordinance is actually a municipal license tax or
fee on persons, firms or corporations, like
plaintiff, exercising the privilege of storing
copra in a bodega within the Municipality's
territorial jurisdiction. License tax, in many
instances, refers to "revenue-raising exactions
on privileges or activities."
IV. Imposition by a municipality of storage fees
authorized by a general grant of authority
under CA No, 472
V. Buying and selling and storing copra is
properly the subject of regulation within the
police power granted to municipalities under
the general welfare clause.
VI. Municipal corporations allowed wide
discretion in determining the rates of
imposable license fees including police power
measures; Voiding of ordinance by courts
taken only when the rates imposed, which is
allegedly oppressive, excessive, and
prohibited, is sufficiently proved.
Municipal corporations 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
municipal conditions and the nature of the
business being taxed as well as other factors
relevant to the issue of arbitrariness or
unreasonableness of the questioned rates,
Courts will go slow in writing off an Ordinance.
8 In the case at bar, appellant has not
sufficiently shown that the rate imposed by the
questioned Ordinance is oppressive, excessive
and prohibitive.
VII.Concept of Storage Fee.
The storage fee imposed under the question
Ordinance is actually a municipal license tax
or fee on persons, firms and corporations, like
plaintiff, exercising the privilege of storing
copra in a bodega within the Municipality's
territorial jurisdiction. For the term "license tax"
has not acquired a fixed meaning. It is often
used indiscriminately to designate impositions
exacted for the exercise of various privileges.
In many instances, it refers to revenue-raising
exactions on privileges or activities.
VIII.As to Double Taxation, the tax imposed by
a municipality on soap and other similar
products of petitioner company different from
the tax imposed on privilege of storing copra in
a bodega within the municipality.
For double taxation to exist, the same property
must be taxed twice, when it should be taxed
but once. Double taxation has also been
defined as taxing the same person twice by
the same jurisdiction for the same thing.
Surely, a tax on plaintiff's products is different
from a tax on the privilege of storing copra in a
bodega situated within the territorial boundary
of defendant municipality.
IX. Storage fee imposed by the municipality
not a tax on export where fee is imposed not
only upon copra to be exported but also upon
copra sold and to be used for domestic
purposes.
We have held that only where there is a clear
showing that what is being taxed is an export
to any foreign country would the prohibition
come into play.When the Ordinance itself
speaks of "exportable" copra, the meaning
conveyed is not exclusively export to a foreign
country but shipment out of the municipality.
The storage fee impugned is not a tax on
export because it is imposed not only upon
copra to be exported but also upon copra sold
and to be used for domestic purposes if stored
in any warehouse in the Municipality and the
weight thereof is 100 kilos or more.
X. The action to recover municipal license
taxes under Art. 1145 (2) of the Civil Code is 6
years.

However, we find merit in plaintiff's contention
that the lower Court erred in ruling that its action
has prescribed under Article 1149 of the Civil
Code, which provides for a period of five years
for all actions whose periods are not fixed in
that Code. The case of Municipality of Opon vs.
Caltex Phil., is authority for the view that the
period for prescription of actions to recover
municipal license taxes is six years under
Article 1145(2) of the Civil Code. Thus,
plaintiff's action brought within six years from
the time the right of action first accrued in 1958
has not yet prescribed.
24. Golden Lumber Trading v. City of
Butuan
I. Power to tax municipal corporations
construed strictly against them
The rule is well-settled that municipal
corporations, unlike sovereign states, are
clothed with no power of taxation; that its
charter or a statute must clearly show an intent
to confer that power or the municipal
corporation cannot assume and exercise it,
and that any such power granted must be
construed strictly, any doubt or ambiguity
arising out from the terms of the grant to be
resolved against the municipality.
II. Power of the city to tax lumber mills does
not include power to tax sale of lumber by
them.
III. Municipal corporations cannot impose
taxes on forest products.
IV. Character of tax determined not by title of
act but by its operation.
Appellants' claim that the questioned tax is one
on business or a privilege tax for the operation
of a lumber mill or a lumber yard is without
merit.
The character or nature of a tax is determined
not by the title of the act or ordinance imposing
it but by its operation, practical results and
incidents (Dawson vs. Distilleries, etc., 255 U.S.
288, 65 L. Ed. 638; Association of Customs
Brokers, Inc., et al. vs. The Municipal Board, et
al., G.R. No. L-4376, May 22, 1953).
Neither the original ordinance in question nor
the amendatory ones show that the tax
provided for therein is imposed by reason of the
enjoyment of the privilege to engage in a
particular trade or business. Neither do they
provide that payment thereof is a condition
precedent to the enjoyment of such privilege or
that its non-payment would result in the
cancellation of any previous license granted.
The only consequence of its non-payment
appears to be the imposition of a surcharge or
liability to suffer the penal sanctions prescribed
in Section 3 of the original ordinance. These
circumstances lead Us to the conclusion that
the questioned tax cannot be considered as
one imposed upon a party for engaging in the
business of operating a lumber mill or a lumber
yard.
25. City of Ozamis v. Lumapas
I. Municipal power to tax should be strictly
construed.
The rule is well-settled that municipal
corporations, being mere creatures of the law,
have only such powers as are expressly
granted to them and those which are
necessarily implied or incidental to the
exercise thereof, and the power to tax is
inherent upon the State and it can only be
exercised by Congress, unless delegated or
conferred by it to a municipal corporation. As
such, said corporation has only such powers
as the legislative department may have
deemed fit to grant. By reason of the limited
powers of local governments and the nature
thereof, said powers are to be construed
strictissimi juris and any doubt or ambiguity
arising out of the terms used in granting said
powers must be construed against the
municipality
II.Municipalities are empowered to regulate the
use of the street.
The City of Ozamiz has been clothed with full
power to control and regulate its streets for the
purpose of promoting the public health, safety
and welfare. Indeed, municipal power to
regulate the use of streets is a delegation of
the police power of the national government,
and in the exercise of such power, a municipal
corporation can make all necessary and
desirable regulations which are reasonable
and manifestly in the interest of public safety
and convenience.
III. Municipalities may charge "parking fees" on
vehicles that stop and load or unload on public
streets.
It is not pretended, however, that the public
utility vehicles are subject to the payment, if
they pass without stopping thru the aforesaid
sections of Zulueta Street. Considering that the
public utility vehicles are only charged the fee
when said vehicles stop on "any portion of the
existing parking areas for the purpose of
loading or unloading passengers or cargoes",
the fees collected are actually in the nature of
parking fees and not toll fees for the use of
Zulueta Street. This is clear from the Stipulation
of Facts which shows that fees were not
exacted for mere passage thru the street but for
stopping in the designated parking areas
therein to unload or load passengers or
cargoes. It was not, therefore a toll fee for the
use of public roads, within the context of
Section 59[b] of Republic Act No. 4136, which
requires the authorization of the President of
the Philippines.
IV. P1.00 maximum regulatory fee is a
reasonable charge for use by vehicles of
designated places for loading and unloading.
The Municipal Board of Ozamiz City is
expressly granted by its Charter the power to
regulate the use of its streets. The ordinance
in question appears to have been enacted in
pursuance of this grant. The parking fee
imposed is minimal in amount, the maximum
being only P1.00 a day for each passenger
bus and P1.00 for each cargo truck, the rates
being lower for smaller types of vehicles. This
indicates that its purpose is not for revenue but
for regulation. Moreover, it is undeniable that
by designating a specific place wherein
passenger and freight vehicles may load and
unload passengers and cargoes, benefits are
accorded to the city's residents in the form of
increased safety and convenience arising from
the decongestion of traffic.
26. Apostolic Prefect v Treasurer of Baguio
(full text in Spanish)
I. The Apostolic Prefect is liable to pay
for the special assessment
In its broad meaning, tax includes both general
taxes and special assessment. Yet, there is a
recognized distinction between them. An
assessment is confined to local impositions
upon property for the payment of the cost of
public improvements in its immediate vicinity
and levied with reference to special benefits to
the property assessed.
A special assessment is not, strictly speaking,
a tax; and neither the decree nor the
Constitution exempt the Apostolic Prefect from
payment of said special assessment.
Furthermore, assuming arguendo that
exemption may encompass such assessment,
the Apostolic Prefect cannot claim exemption
as it has not proven the property in question is
used exclusively for religious purposes; but
that it appears that the same is being used to
other non-religious purposes.
27. Victoria Milling v. Philippine Ports
Authority
I. Remedy of an appeal for an adverse ruling
of the Philippine Ports Authority to the Office of
the President, although not provided for by PD
505 and 857, is governed by the rules
promulgated by the PPA pursuant to PS 857.

These contentions are untenable for while it is
true that neither Presidential Decree No. 505
nor Presidential Decree No. 857 provides for
the remedy of appeal to the Office of the
President, nevertheless, Presidential Decree
No. 857 empowers the PPA to promulgate
such rules as would aid it in accomplishing its
purpose.
II. Administrative rules and regulations issued
in accordance with law, like PPA
Administrative Order No. 1377 providing for
appeal to the Office of the President, have the
force and effect of law.
Pursuant to the aforequoted provision, PPA
enacted Administrative Order No. 13-77
precisely to govern, among others, appeals
from PPA decisions. It is now finally settled that
administrative rules and regulations issued in
accordance with law, like PPA Administrative
Order No. 13-77, have the force and effect of
law (Valerio vs. Secretary of Agriculture and
Natural Resources, 7 SCRA 719; Antique
Sawmills, Inc. vs. Zayco, et al., 17 SCRA 316;
and Macailing vs. Andrada, 31 SCRA 126), and
are binding on all persons dealing with that
body.
III. The right to appeal is merely a statutory
privilege.
It is merely axiomatic that the right to appeal is
merely a statutory privilege and may be
exercised only in the manner and in
accordance with the provision of law.
IV. Fees and charges being collected by PPA
are not for the use of the wharf that the
petitioner owns but for the privilege of
navigating in public waters, of leaving harbors
and berthing on public streams or waters.
V. The 10% government share of earnings of
arrastre and stevedoring operators under PD
857 is in the nature of a contractual
compensation.
As to the requirement to remit 10% of the
handling charges, Section 6B-(ix) of the
Presidential Decree No. 857 authorized the
PPA "To levy dues, rates, or charges for the use
of the premises, works, appliances, facilities, or
for services provided by or belonging to the
Authority, or any organization concerned with
port operations." This 10% government share
of earnings of arrastre and stevedoring
operators is in the nature of contractual
compensation to which a person desiring to
operate arrastre service must agree as a
condition to the grant of the permit to operate.
28. CIR v Prieto
I. Requisite in order that interest may be
deductible.
for interest to be deductible, it must be shown
that there be an indebtedness, that there
should be interest upon it, and that what is
claimed as an interest deduction should have
been paid or accrued within the year.
II.Tax as an indebtedness; interest paid for
late payment of donor's tax is deductible.
The term "indebtedness" as used in the Tax
Code of the United States containing similar
provisions as in the above-quoted section has
been defined as an unconditional and legally
enforceable obligation for the payment of
money.1awphîl.nèt (Federal Taxes Vol. 2, p.
13,019, Prentice-Hall, Inc.; Merten's Law of
Federal Income Taxation, Vol. 4, p. 542.)
Within the meaning of that definition, it is
apparent that a tax may be considered an
indebtedness.
III. When Revenue Regulation NO. 2 is not
applicable
Although Section 80 of Revenue Regulation
No. 2 (known as Income Tax Regulations)
promulgated by the Department of Finance.
which provides that "the word 'taxes' means
taxes proper and no deductions should be
allowed for amounts representing interest,
surcharge or penalties incident to
delinquency," implements section 30 (c) of the
Tax Code governing deductions of taxes, the
same is inapplicable to a case where the
taxpayer seeks to come under section 30 (b)
of the same Code providing for deduction of
interest on indebtedness.
IV. Taxpayer not precluded from claiming
interest payment as deduction.
Although interest payment for delinquency
taxes is not deductible as tax under section 30
(c) of the Tax Code and section 80 od the
Income Tax Regulations, the taxpayer is not
precluded thereby from claiming said interest
payment as a deduction under section 30 (b)
of the same Code.
29. CIR v. Ca Central Vegetable Mfg. Co
I. As a general rule, exceptions should be
strictly but reasonably construed- they extend
only so far as their language fairly warrants,
and all doubts should be resolved in favor of
the general provisions rather than the
exception.
II.The exception provided for in Sec 168 of the
old Tax Code should be strictly construed.
Under the rules of statutory construction,
exceptions, as a general rule, should be strictly
but reasonably construed. They extend only so
far as their language fairly warrants, and all
doubts should be resolved in favor of the
general provisions rather than the exception.
Where a general rule is established by statute
with exceptions, the court will not curtail the
former nor add to the latter by implication. . . .
(Samson vs. Court of Appeals, 145 SCRA 659
[1986]).
The exception provided for in Section 168 of the
old Tax Code should thus be strictly construed.
Conformably, the sales, miller's and excise
taxes paid on all Other materials (except on raw
materials used in the milling process), such as
the sales taxes paid on containers and
packaging materials of the milled products
under consideration, may be credited against
the miller's tax due therefor.
III. The Supreme Court is mindful of the well-
entrenched principle that the government is
never estopped from collecting taxes because
of mistakes or errors on the part of its agents,
but this rule admits of exceptions in the
interest of justice and equity.
According to petitioner, to hold, as what the
Court of Appeals did, that a reversal of the
aforesaid ruling would be violative of the rule on
non-retroactivity of rulings of tax officials when
prejudicial to the taxpayer (Section 278 of the
old Tax Code) would, in effect, create a
perpetual exemption in favor of CENVOCO
although there may be subsequent changes in
circumstances warranting a reversal.
This Court is mindful of the well-entrenched
principle that the government is never estopped
from collecting taxes because of mistakes or
errors on the part of its agents, but this rule
admits of exceptions in the interest of justice
and fairplay. (ABS CBN Broadcasting Corp. vs.
Court of Tax Appeals, 108 SCRA 151 [1951])
More so in the present case, where we discern
no error in allowing the sales taxes paid by
CENVOCO on the containers and packages of
its milled products, to be credited against the
deficiency miller's tax due thereon, for a proper
application of the law.
IV.Tax burdens are not to be imposed nor
presumed to be imposed beyond what the
statute expressly and clearly imports, tax
statues being construed strictissimi juris
against the government.
V. It has been the long standing policy and
practice of the Supreme Court to respect
conclusions arrived at by quasi-judicial
agencies, especially the Court of Tax Appeals
which, by the nature of its functions, is
dedicated exclusively to the study and
consideration of tax problems, and which has
thus developed an expertise on the subject,
unless an abuse or improvident exercise of its
authority is shown.
It has been the long standing policy and
practice of this Court to respect conclusions
arrived at by quasi-judicial agencies,
especially the Court of Tax Appeals which: by
the nature of its functions, is dedicated
exclusively to the study and consideration of
tax problems, and which has thus developed
an expertise on the subject, unless an abuse
or improvident exercise of its authority is
shown. Finding no such abuse or improvident
exercise of authority or discretion under the
premises, the decision of the Court of Appeals,
affirming that of the Court of Tax Appeals,
should be upheld.
30. Luzon Stevedoring v CTA
I. Any claim for exemption from the tax statute
should be strictly construed against the
taxpayer. Where a provision of law speaks
categorically, the need for interpretation is
obviated, no plausible pretense being
entertained to justify on non-compliance. All
that has to be done is to apply it in every case
that falls within its terms. Statutes are to be
construed in the light of purposes to be
achieved and the evils sought to be remedied.
The legislature, in amending Section 190 of
the TaxCode of RA 3176, intended to provide
incentives and inducements to bolster the
shipping industry and not the business of
stevedoring. This Court will not set aside the
conclusion reached by an agency such as the
CTA which is by the very nature of its function,
dedicated exclusively to the study and
consideration of the tax problems an has
necessarily developed an expertise on the
subject unless there has been an abuse or
improvident exercise of authority.
II.When importations are exempted from
compensating tax.
n order that the importations may be declared
exempt from the compensating tax, it is
indispensable that the requirements of the
amendatory law be complied with, namely; (1)
the engines and spare parts must be used by
the importer himself as a passenger and/or
cargo vessel; and (2) the said passenger
and/or cargo vessel must be used in coastwise
or oceangoing navigation.
III. Tugboat is not a cargo vessel.
Tugboats are not cargo vessel because they
are neither designed nor used for carrying
and/or transporting persons or goods by
themselves but are mainly employed for
towing and pulling passengers or cargoes as a
common carrier by water, either coastwise or
oceangoing and therefore, not within the
purview of Section 190 of the Tax Code, as
amended.