Consolidated Cases of City of Manila, et al. vs. Hon.

Colet
G.R. No. 120051. December 10, 2014
Supreme Court En Banc, Leonardo-De Castro, J.

FACTS: The City of Manila, through its City Treasurer, began imposing and collecting the
business tax under Section 21(B) of the Manila Revenue Code (Code), as amended by
Ordinance No. 7807 (Ordinance). Section 21 (B) of the Code imposed business tax on
“transportation contractors, persons who transport passenger or freight for hire, and
common carriers by land, air or water” while the Ordinance amended such by lowering the
tax rate from 3% per annum to .5% per annum.

Because they were assessed and/or compelled to pay business taxes pursuant to Section
21(B) of the Manila Revenue Code, as amended, before they were issued their business
permits, several corporations, with principal offices in Manila and operating as
"transportation contractors, persons who transport passenger or freight for hire, and common
carriers by land, air or water," filed their respective petitions before the Manila RTC against
the City of Manila, Mayor Lim, Vice Mayor LitoAtienza (Atienza), the City Council of Manila
and City Treasurer Acevedo and questioned the constitutionality of Sec. 21 (B) for being
contrary to the Constitution and the Local Government Code, and asked for the refund of
what they had paid as business tax.

ISSUE: Whether or not Section 21(B) of the Manila Revenue Code, as amended by
Ordinance No. 7807 is unconstitutional

RULING:

Yes. Section 133(j) of the Local Government Code clearly and unambiguously proscribes
LGUs from imposing any tax on the gross receipts of transportation contractors, persons
engaged in the transportation of passengers or freight by hire, and common carriers by air,
land, or water. Yet, confusion arose from the phrase “unless otherwise provided herein,”
found at the beginning of the said provision, and the City of Manila anchors the validity of
Sec. 21 (B) on said phrase.