TAX CASES

1. STA LUCIA DEVT INC v. Petitioner is the registered owner of several parcels of land with TCT Nos. 39112, 39110 and 38457, all of which indicated that the
CITY PASIG lots were located in Barrio Tatlong Kawayan, Municipality of Pasig.

The parcel of land covered by TCT No. 39112 was consolidated with that covered by TCT No. 518403, which was situated in Barrio
Tatlong Kawayan, Municipality of Cainta, Province of Rizal.The two combined lots were subsequently partitioned into three, for
which TCT Nos. 532250, 598424, and 599131, now all bearing the Cainta address, were issued.
TCT No. 39110 was also divided into two lots, becoming TCT Nos. 92869 and 92870.The lot covered by TCT No. 38457 was not
segregated, but a commercial building owned by Sta. Lucia East Commercial Center, Inc., a separate corporation, was built on it.

Upon Pasig’s petition to correct the location stated in TCT Nos. 532250, 598424, and 599131, the Land Registration Court ordered
the amendment of the TCTs to read that the lots with respect to TCT No. 39112 were located in Barrio Tatlong Kawayan, Pasig
City.

On January 31, 1994, Cainta filed a petition for the settlement of its land boundary dispute with Pasig before the Antipolo RTC
docketed as Civil Case No. 94-3006, is still pending up to this date.

On November 28, 1995, Pasig filed a Complaint, docketed as Civil Case No. 65420, against Sta. Lucia for the collection of real
estate taxes, including penalties and interests, on the lots covered by TCT Nos. 532250, 598424, 599131, 92869, 92870 and
38457, including the improvements thereon.

Sta. Lucia alleged that it had been religiously paying its real estate taxes to Cainta, just like what its predecessors-in-interest did,
by virtue of the demands and assessments made and the Tax Declarations issued by Cainta on the claim that the subject properties
were within its territorial jurisdiction. Sta. Lucia further argued that since 1913, the real estate taxes for the lots covered by the
above TCTs had been paid to Cainta.

Cainta moved to intervene on the ground that its interest would be greatly affected by the outcome of the case. It averred that it
had been collecting the real property taxes on the subject properties even before Sta. Lucia acquired them. Cainta further
asseverated that the establishment of the boundary monuments would show that the subject properties are within its metes and
bounds.

Sta. Lucia and Cainta thereafter moved for the suspension of the proceedings, and claimed that the pending petition in the Antipolo
RTC, for the settlement of boundary dispute between Cainta and Pasig, presented a prejudicial question to the resolution of the
case. The RTC denied such for lack of merit. Holding that the TCTs were conclusive evidence as to its ownership and location, the
RTC, rendered a decision in favor of Pasig.

Judgment is likewise rendered against the intervenor Municipality of Cainta, Rizal, ordering it to refund to Sta. Lucia Realty and
Development, Inc. the realty tax payments improperly collected and received by the former from the latter in the aggregate amount
ofP358, 403.68.

After Sta. Lucia and Cainta filed their Notices of Appeal, Pasig, on September 11, 1998, filed a Motion for Reconsideration of the
RTCs August 10, 1998 Decision.
The RTC granted Pasigs motion and modified its earlier decision to include the realty taxes due on the improvements on the subject
lots.
Sta. Lucia assailed the RTCs order granting the execution which was granted by the CA. It added that the boundary dispute case
presented a prejudicial question which must be decided before Pasig can collect the realty taxes due over the subject properties.

Meanwhile, the appeal filed by Sta. Lucia and Cainta was decided by the CA affirming RTCs decision declaring that there was no
proper legal basis to suspend the proceedings.

Sta. Lucia and Cainta filed separate Motions for Reconsideration which was denied by the CA.
Hence, these petitions.

ISSUES:

Whether the RTC and the CA were correct in deciding Pasig’s Complaint without waiting for the resolution of the boundary dispute
case between Pasig and Cainta?

Whether Sta. Lucia should continue paying its real property taxes to Cainta, as it alleged to have always done, or to Pasig, as the
location stated in Sta. Lucia’s TCTs?

HELD:

The petition is granted.

POLITICAL LAW: authority of the local government unit to collect real property taxes

The Court agrees with the CA that the resolution of the boundary dispute between Pasig and Cainta would determine which local
government unit is entitled to collect realty taxes from Sta. Lucia

Under Sections 5 and 57 of the Real Property Tax Code, the authority to collect real property taxes is vested in the locality where
the property is situated. This requisite was reiterated in Sections 201 and 233 of the Local Government Code.

The only import of these provisions is that, while a local government unit is authorized under several laws to collect real estate tax
on properties falling under its territorial jurisdiction,it is imperative to first show that these properties are unquestionably within its
geographical boundaries.

The importance of drawing with precise strokes the territorial boundaries of a local unit of government cannot be overemphasized.
The boundariesmust be clear for they define the limits of the territorial jurisdiction of a local government unit.It can legitimately
exercise powers of government only within the limits of its territorial jurisdiction.Beyond these limits,its acts are ultra vires.

Needless to state, any uncertainty in the boundaries of local government units will sow costly conflicts in the exercise of
governmental powers which ultimately will prejudice the people's welfare. This is the evil sought to be avoided by the Local
Government Code in requiring that the land area of a local government unit must be spelled out in metes and bounds, with technical
descriptions.
Clearly therefore, the local government unit entitled to collect real property taxes from Sta. Lucia must undoubtedly show that the
subject properties are situated within its territorial jurisdiction; otherwise, it would be acting beyond the powers vested to it by law.

Although it is true that Pasig is the locality stated in the TCTs of the subject properties, both Sta. Lucia and Cainta aver that the
metes and bounds of the subject properties, as they are described in the TCTs, reveal that they are within Caintas boundaries.
 This only means that there may be a conflict between the location as stated and the location as technically described in the
TCTs.Mere reliance therefore on the face of the TCTs will not suffice as they can only be conclusive evidence of the subject
properties locations if both the stated and described locations point to the same area.

The Antipolo RTC, wherein the boundary dispute case between Pasig and Cainta is pending, would be able to best determine once
and for all the precise metes and bounds of both Pasigs and Caintas respective territorial jurisdictions.The resolution of this dispute
would necessarily ascertain the extent and reach of each local governments authority, a prerequisite in the proper exercise of their
powers, one of which is the power of taxation.

In light of the foregoing, the Pasig RTC should have held in abeyance the proceedings in Civil Case No. 65420, in view of the fact
that the outcome of the boundary dispute case before the Antipolo RTC will undeniably affect both Pasigs and Caintas rights. In
the meantime, to avoid further animosity, Sta. Lucia is directed to deposit thesucceedingreal property taxes due on the subject
properties, in an escrow account with the Land Bank of the Philippines.

The decision and resolution of the Court of Appeals are set aside.

2. SAN JUAN v. CASTRO Petitioner, registered owners of real properties in Marikina City, with consent of his wife, conveyed by deed of assignment, the
properties to the Saints and Angels Realty Corp. (SARC), by virtue of incorporations, in exchange for shares of stock therein with
a par value of P2,000,000.0, placed in San Juan’s name and the remaining par value in the name of his wife. Respondents’
representatives went to the City Treasurer’s Office of Marikina to pay the transfer tax based on the consideration stated in the deed
of assignment. City Treasurer Castro informed him however that the tax due is based on the fair market value of the property.
Petitioner protested the basis of the tax due. To which, the respondent replied stating that in cases of transfer or real property not
involving monetary consideration, it is certain that the fair market value or the zonal value of the property is the basis of the tax
rate.
Petitioner filed before the RTC of Marikina a petition for mandamus and damages against respondent in his capacity as City
Treasurer, among others, praying that respondent be compelled to “perform a ministerial duty to accept payment of transfer tax
based on the actual consideration” of the transfer and assignment”, citing Section 135 of the LGC.

ISSUE:
When can a protest of assessment be availed of?

RULING:
Under Section 195 of the Local Government Code, a taxpayer who disagrees with a tax assessment made by a local treasurer
may file a written protest thereof:
SECTION 195. Protest of Assessment. – When the local treasurer or his duly authorized representative finds that the correct taxes,
fees, or charges have not been paid, he shall issue a notice of assessment stating the nature of the tax, fee, or charge, the amount
of deficiency, the surcharges, interests and penalties. Within sixty (60) days from the receipt of the notice of assessment, the
taxpayer may file a written protest with the local treasurer contesting the assessment; otherwise, the assessment shall become
final and executory. The local treasurer shall decide the protest within sixty (60) days from the time of its filing. If the local treasurer
finds the protest to be wholly or partly meritorious, he shall issue a notice cancelling wholly or partially the assessment. However,
if the local treasurer finds the assessment to be wholly or partly correct, he shall deny the protest wholly or partly with notice to the
taxpayer. The taxpayer shall have thirty (30) days from the receipt of the denial of the protest or from the lapse of the sixty-day
(60) period prescribed herein within which to appeal with the court of competent jurisdiction, otherwise the assessment becomes
conclusive and unappealable.
That petitioner protested in writing against the assessment of tax due and the basis thereof is on record as in fact it was on that
account that respondent sent him the above-quoted July 15, 2005 letter which operated as a denial of petitioner’s written protest.
 Petitioner should thus have, following the earlier above-quoted Section 195 of the Local Government Code, either appealed the
assessment before the court of competent jurisdiction[15] or paid the tax and then sought a refund.
Petitioner did not observe any of these remedies available to him, however. He instead opted to file a petition for mandamus to
compel respondent to accept payment of transfer tax as computed by him.
3. MOBIL PHILIPPINES v. On August 20, 1998, Petitioner, a domestic corporation engaged in the manufacturing, importing, exporting and wholesaling of
CITY TREASURER OF petroleum products, filed an application with the City Treasurer of Makati for the retirement of its business within the City of Makati
MAKATI as it moved its principal place of business to Pasig City. In its application, petitioner declared its gross sales/receipts as follows:
Gross Sales Receipt for Calendar Year 1997 - P453,799,493.29 and Gross Sales Receipt for Calendar Year 1998, January
to August - P267,952,766.67. Upon evaluation of petitioner’s application, then OIC of the License Division, Ms. Jesusa E. Cuneta,
issued to petitioner, a billing slip assessing the following taxes against petitioner: P 566,468.12 For the 4th Quarter of 1998 (based
on 1997 gross sales) and P 1,331,638.84 For the Gross Sales made in 1998, with the total assessed business taxes of P
1,898,106.96. On September 11, 1998, petitioner paid the assessed amount of P1,898,106.96 under protest. The City Treasurer
issued therefor Official Receipt No. 9065025C and approved the petitioner’s application for retirement of business from Makati to
Pasig City. On July 21, 1999, petitioner filed a claim for P1,331,638.84 refund which was denied. Subsequently, petitioner filed a
petition with the RTC of Pasig City, seeking the refund of business taxes erroneously collected by the City of Makati. In its Decision,
the trial court ruled that the assessment of the Chief of the License Division of Makati is therefore with legal basis and does not
constitute double taxation. Petitioner filed a Motion for Reconsideration which was denied and, hence this appeal.

ISSUE: Whether or not the business taxes paid by petitioner in 1998 is for its business taxes for 1997 or 1998?

HELD: Business taxes imposed in the exercise of police power for regulatory purposes are paid for the privilege of carrying on a
business in the year the tax was paid. It is paid at the beginning of the year as a fee to allow the business to operate for the rest
of the year. It is deemed a prerequisite to the conduct of business. Income tax, on the other hand, is a tax on all yearly profits
arising from property, professions, trades or offices, or as a tax on a person’s income, emoluments, profits and the like. It is tax on
income, whether net or gross realized in one taxable year. It is due on or before the 15 th day of the 4th month following the close of
the taxpayer’s taxable year and is generally regarded as an excise tax, levied upon the right of a person or entity to receive income
or profits.

Under the Makati Revenue Code, it appears that the business tax, like income tax, is computed based on the previous year’s
figures. This is the reason for the confusion. A newly-started business is already liable for business taxes (i.e. license fees) at the
start of the quarter when it commences operations. In computing the amount of tax due for the first quarter of operations, the
business’ capital investment is used as the basis. For the subsequent quarters of the first year, the tax is based on the gross
sales/receipts for the previous quarter. In the following year(s), the business is then taxed based on the gross sales or receipts of
the previous year. Thus, the business taxes paid in the year 1998 is for the privilege of engaging in business for the same year,
and not for having engaged in business for 1997.

Upon its transfer, petitioner was apparently subjected to Sec. 3A.11 par. (g) of Makati Revenue Code which provides that on the
year an establishment retires or terminates its business within the municipality, it would be required to pay the difference in the
amount if the tax collected, based on the previous year’s gross sales or receipts, is less than the actual tax due based on the
current year’s gross sales or receipts. In this case, for the year 1998, petitioner paid a total of P2,262,122.48 to the City Treasurer
of Makati as business taxes for the year 1998. The amount of tax as computed based on petitioner’s gross sales for 1998 is only
P1,331,638.84. Since the amount paid is more than the amount computed based on petitioner’s actual gross sales for 1998,
petitioner upon its retirement is not liable for additional taxes to the City of Makati. Thus, we find that the respondent erroneously
treated the assessment and collection of business tax as if it were income tax, by rendering an additional assessment of
P1,331,638.84 for the revenue generated for the year 1998.
 WHEREFORE, the assailed Decision is hereby REVERSED and respondents City Treasurer and Chief of the License Division of
Makati City are ordered to REFUND to petitioner business taxes paid in the amount of P1,331,638.84.

4. YAMANE v. BA LEPANTO Petitioner City Treasurer of Makati, Luz Yamane Respondent BA-Lepanto Condominium Corporation... is a duly organized
CONDOMINIUM CORP. condominium corporation... which owns and holds title to the common and limited common areas of the BA-Lepanto
Condominium... situated in Paseo de Roxas, Makati City.
The Corporation received a Notice of Assessment... signed by the City Treasurer. Liable to pay the correct city business taxes.
The Notice of Assessment was silent as to the statutory basis of the business taxes assessed. Corporation responded with a written
tax protest... submit that the Assessment has no basis as the Corporation is not liable for business taxes
Makati [Revenue] Code imposes business tax on owners or operators of any business.

Corporation is not an owner or operator of any business in the contemplation of the Makati [Revenue] Code and even the [Local
Government] Code It was submitted that the Corporation, as a condominium corporation, was organized not for profit... under its
articles of incorporation or by-laws to engage in profit-making activities
The protest was rejected by the City Treasurer. She insisted that the collection of dues from the unit owners was effected primarily...
for... profit. Corporation filed an Appeal with the Regional Trial Court (RTC) of Makati, dismissing the appeal for lack... of merit.

RTC concluded that the activities of the Corporation fell squarely under the definition of "business"... thus subject to local business
taxation Corporation filed a Petition for Review... with the Court of Appeals. appellate court... declared that the Corporation was not
liable to pay business taxes to the City of Makati.

The Corporation was not engaged in profit as its sole purpose was to hold title to the common areas in the condominium and to
maintain the condominium... assessment collected from unit owners limited to those... necessary to defray the expenses in the
maintenance of the common areas and management the condominium... the City Treasurer... argued that the Corporation is
engaged in business, for the dues collected from the different unit... owners... is utilized towards the beautification and maintenance
of the Condominium, resulting in "full appreciative living values" for the condominium units which would command better market
prices should they be sold in the future

Issues:
whether a local government unit can, under the Local Government Code, impel a condominium... corporation to pay business
taxes.[1]... whether the City of Makati may collect business taxes on condominium corporations.

Ruling:
Respondent BA-Lepanto Condominium Corporation (the "Corporation") is a duly organized condominium corporation
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.
Reference to the local tax ordinance is vital, for the... power of local government units to impose local taxes is exercised through
the appropriate ordinance enacted by the sanggunian, and not by the Local Government Code alone.[44] What determines tax
liability is the tax ordinance, the Local Government Code being the enabling law for the local legislative body. City Treasurer failed
to cite the specific statutory basis of the tax condominium corporations are generally exempt from local business taxation under
the Local Government Code.
The assessment 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.

Hence, the assailed tax assessment has no basis under the Local Government Code or the Makati Revenue Code
5. HAGONOY MARKET On October 1, 1996, the Sangguniang Bayan of Hagonoy, Bulacan enacted Ordinance No. 28 increasing the stall rentals of the
VENDOR ASSOC. v. market vendors in Hagonoy. Members of petitioner association participated in several public hearings conducted by the Sanggunian
MUN. HAGONOY Bayan. The ordinance was approved by the Acting Mayor on October 7, 1996. Copies of the ordinance were given to the Municipal
Treasurer and posted in three public places in lieu of publication as there was no newspaper of local circulation in the municipality.
On December 8, 1997, petitioner's president appealed to the Secretary of Justice. The appeal was dismissed for being filed out of
time. Petitioner appealed to the Court of Appeals. The appeal was dismissed for failure to attach certified true copies of the assailed
resolutions of the Secretary of Justice. On motion for reconsideration, petitioner explained that it exerted due diligence to get copies
of the resolutions but failed to do so on account of typhoon "Loleng." The motion was denied. Hence, the present recourse.

The appellate court should have tempered its strict application of procedural rules in view of the fortuitous event and considering
that litigation is not a game of technicalities.

Pursuant to the provisions of Section 187 of the 1991 Local Government Code, an appeal questioning the constitutionality or legality
of a tax ordinance must be filed within thirty (30) days from its effectivity to the Secretary of Justice. In the case at bar, the 􏰁ling of
the appeal more than a year after the effectivity of the ordinance is barred for being 􏰁led late and was rightly dismissed by the
Justice Secretary. Petition dismissed.

ADMINISTRATIVE LAW; LOCAL GOVERNMENT CODE; TAX ORDINANCE; 30- DAY PERIOD OF APPEAL TIME-BARRED IN
CASE AT BAR. — We hold that the petition should be dismissed as the appeal of the petitioner with the Secretary of Justice is
already time-barred. The applicable law is Section 187 of the 1991 Local Government Code. The aforecited law requires that an
appeal of a tax ordinance or revenue measure should be made to the Secretary of Justice within thirty (30) days from effectivity of
the ordinance and even during its pendency, the effectivity of the assailed ordinance shall not be suspended. In the case at bar,
Municipal Ordinance No. 28 took effect in October 1996. Petitioner 􏰁led its appeal only in December 1997, more than a year after
the effectivity of the ordinance in 1996. Clearly, the Secretary of Justice correctly dismissed it for being time-barred. At this point,
it is apropos to state that the time frame fixed by law for parties to avail of their legal remedies before competent courts is not a
"mere technicality" that can be easily brushed aside. The periods stated in Section 187 of the Local Government Code are
mandatory. Ordinance No. 28 is a revenue measure adopted by the municipality of Hagonoy to fix and collect public market stall
rentals. Being its lifeblood, collection of revenues by the government is of paramount importance. The funds for the operation of its
agencies and provision of basic services to its inhabitants are largely derived from its revenues and collections. Thus, it is essential
that the validity of revenue measures is not left uncertain for a considerable length of time. Hence, the law provided a time limit for
an aggrieved party to assail the legality of revenue measures and tax ordinances. cCHITA

3. ID.; ID.; ID.; PUBLIC HEARING PRESENT IN CASE AT BAR. — Petitioner's bold assertion that there was no public hearing
conducted prior to the passage of Kautusan Blg. 28 is belied by its own evidence. In petitioner's two (2) communications with the
Secretary of Justice, it enumerated the various objections raised by its members before the passage of the ordinance in several
meetings called by theSanggunian for the purpose. These show beyond doubt that petitioner was aware of the proposed increase
and in fact participated in the public hearings therefor. The respondent municipality likewise submitted the Minutes and Report of
the public hearings conducted by the Sangguniang Bayan's Committee on Appropriations and Market on February 6, July 15 and
August 19, all in 1996, for the proposed increase in the stall rentals. Petitioner cannot gripe that there was practically no public
hearing conducted as its objections to the proposed measure were not considered by the Sangguniang Bayan. To be sure, public
hearings are conducted by legislative bodies to allow interested parties to ventilate their views on a proposed law or ordinance.
These views, however, are not binding on the legislative body and it is not compelled by law to adopt the same. Sanggunian
members are elected by the people to make laws that will promote the general interest of their constituents. They are mandated to
use their discretion and best judgment in serving the people. Parties who participate in public hearings to give their opinions on a
proposed ordinance should not expect that their views would be patronized by their lawmakers.
 4. ID.; ID:, ID.; PUBLICATION OR POSTING; COMPLIED WITH IN CASE AT BAR. — On the issue of publication or posting,
Section 188 of the Local Government Code provides that . . . municipalities where there are no newspapers of local circulation, the
same may be posted in at least two (2) conspicuous and publicly accessible places." The records is bereft of any evidence to prove
petitioner's negative allegation that the subject ordinance was not posted as required by law. In contrast, the respondent
Sangguniang Bayan of the Municipality of Hagonoy, Bulacan, presented evidence which clearly shows that the procedure for the
enactment of the assailed ordinance was complied with. Municipal Ordinance No. 28 was enacted by the Sanggunian Bayan of
Hagonoy on October 1, 1996. Then Acting Municipal Mayor Maria Garcia Santos approved the Ordinance on October 7, 1996.
After its approval, copies of the Ordinance were given to the Municipal Treasurer on the same day. On November 9, 1996, the
Ordinance was approved by the Sangguniang Panlalawigan. The Ordinance was posted during the period from November 4-25,
1996 in three (3) public places, viz: in front of the municipal building, at the bulletin board of the Sta. Ana Parish Church and on the
front door of the Office of the Market Master in the public market. Posting was validly made in lieu of publication as there was no
newspaper of local circulation in the municipality of Hagonoy. This fact was known to and admitted by petitioner. Thus, petitioner's
ambiguous and unsupported claim that it was only "sometime in November 1997" that the Provincial Board approved Municipal
Ordinance No. 28 and so the posting could not have been made in November 1996 was sufficiently disproved by the positive
evidence of respondent municipality. Given the foregoing circumstances, petitioner cannot validly claim lack of knowledge of the
approved ordinance. The filing of its appeal a year after the effectivity of the subject ordinance is fatal to its cause.

5. ID.; ID.; ID.; NO LIMIT OF PERCENTAGE INCREASE TO TAX RATES. — Finally, even on the substantive points raised, the
petition must fail. Section 6 c.04 of the 1993 Municipal Revenue Code and Section 191 of the Local Government Code limiting the
percentage of increase that can be imposed apply to tax rates, not rentals. Neither can it be said that the rates were not uniformly
imposed or that the public markets included in the Ordinance were unreasonably determined or classified. To be sure, the
Ordinance covered the three (3) concrete public markets: the two-storey Bagong Palengke, the burnt but reconstructed Lumang
Palengke and the more recent Lumang Palengke with wet market. However, the Palengkeng Bagong Munisipyo or Gabaldon was
excluded from the increase in rentals as it is only a makeshift, dilapidated place, with no doors or protection for security, intended
for transient peddlers who used to sell their goods along the sidewalk.

6. JARDINE DAVIES On July 5, 1993, the Department of Justice (DOJ), on petition of the Philippine Racing Club, Inc., declared null and void Municipal
INSURANCE BROKERS, Ordinance No. 922-072, otherwise known as the Makati Revenue Code, which provides, inter alia, for the schedule of real estate,
INC v. HON ALIPOSA business and franchise taxes in the Municipality of Makati at rates higher than those in the Metro Manila Revenue Code. Pending
resolution of its motion for reconsideration of the Resolution of the DOJ, the respondent Makati 􏰁led a petition ad cautelam with
the Regional Trial Court of Makati alleging validity of the Ordinance. In the meantime, respondent Makati continued to implement
the ordinance. Petitioner was assessed and billed by the respondents for taxes, fees and charges under the ordinance for the
second, third, and fourth quarters of 1993. Petitioner paid its quarterly business taxes without protest. On January 30, 1994,
petitioner requested the respondent Makati to compute its business tax liabilities in accordance with the Metro Manila Revenue
Code and not under the ordinance considering that it was already declared by the DOJ null and void. Petitioner asked that it be
credited for the amount it overpaid or to refund its overpayment. When the respondent Makati denied the request, petitioner 􏰁led
a complaint with the Regional Trial Court of Makati. The RTC dismissed the complaint on ground of prescription, holding that
petitioner failed to 􏰁le an opposition or protest within 60 days from the notice of assessment. Petitioner moved for reconsideration
alleging that it was not required to first file a protest with the respondent Makati before instituting its action for a refund of its
overpayment or for it to be credited for said overpayments. The motion for reconsideration was, however, denied by the trial court.
Hence, petitioner brought the matter before the Supreme Court.

The Court agreed with the petitioner that as a general precept, a taxpayer may file a complaint assailing the validity of the ordinance
and praying for a refund of its perceived overpayments without first filing a protest to the payment of taxes due under the ordinance.
However, it held that the petitioner was proscribed from filing its complaint with the trial court for the reason that petitioner failed to
appeal to the Secretary of Justice within 30 days from the effectivity date of the ordinance as mandated by Section 187 of the Local
Government Code. In Reyes v. Court of Appeals, the Court ruled that failure of a taxpayer to interpose the requisite appeal to the
Secretary of Justice is fatal to its complaint for a refund. The Court, therefore, denied the petition.

1. POLITICAL LAW; LOCAL GOVERNMENT CODE; LOCAL TAXATION; TAX ORDINANCE; A TAXPAYER MAY FILE A
COMPLAINT ASSAILING THE VALIDITY THEREOF AND PRAYING FOR A REFUND OF ITS PERCEIVED OVERPAYMENTS
WITHOUT FIRST FILING A PROTEST. — The Court agrees with petitioner that as a general precept, a taxpayer may file a
complaint assailing the validity of the ordinance and praying for a refund of its perceived overpayments without first filing a protest
to the payment of taxes due under the ordinance. This was our ruling in Ty v. Judge Trampe: . . . Hence, if a taxpayer disputes the
reasonableness of an increase in a real estate tax assessment, he is required to "first pay the tax" under protest. Otherwise, the
city or municipal treasurer will not act on his protest. In the case at bench, however, the petitioners are questioning the very authority
and power of the assessor, acting solely and independently, to impose the assessment and of the treasurer to collect the tax.
These are not questions merely of amounts of the increase in the tax but attacks on the very validity of any increase.

2. ID.; ID.; ID.; ID.; ANY QUESTION AS TO CONSTITUTIONALITY OR LEGALITY THEREOF MUST BE RAISED ON APPEAL
TO THE SECRETARY OF JUSTICE WITHIN THIRTY DAYS FROM EFFECTIVITY DATE THEREOF. — In this case, petitioner,
relying on the resolution of the Secretary of Justice in The Philippine Racing Club, Inc. v. Municipality of Makati case, posited in its
complaint that the ordinance which was the basis of respondent Makati for the collection of taxes from petitioner was null and void.
However, the Court agrees with the contention of respondents that petitioner was proscribed from filing its complaint with the RTC
of Makati for the reason that petitioner failed to appeal to the Secretary of Justice within 30 days from the effectivity date of the
ordinance as mandated by Section 187 of the Local Government Code which reads: Sec. 187 — Procedure for Approval and
Effectivity of Tax Ordinances and Revenue Measures; Mandatory Public Hearings. — The procedure for approval of local tax
ordinances and revenue measures shall be in accordance with the provisions of this Code: Provided, That public hearings shall be
conducted for the purpose prior to the enactment thereof: Provided further, That any question on the constitutionality or legality of
tax ordinances or revenue measures may be raised on appeal within thirty (30) days from the effectivity thereof to the Secretary of
Justice who shall render a decision within sixty (60) days from the date of receipt of the appeal: Provided, however, That such
appeal shall not have the effect of suspending the effectivity of the ordinance and the accrual and payment of the tax, fee, or charge
levied therein: Provided, finally, That within thirty (30) days after receipt of the decision or the lapse of the sixty-day period without
the Secretary of Justice acting upon the appeal, the aggrieved party may file appropriate proceedings with a court of competent
jurisdiction.

3. ID.; ID.; ID.; ID.; ID.; FAILURE OF A TAXPAYER TO INTERPOSE THE REQUISITE APPEAL TO THE SECRETARY OF
JUSTICE IS FATAL TO ITS COMPLAINT FOR A REFUND. — In Reyes v. Court of Appeals, we ruled that failure of a taxpayer to
interpose the requisite appeal to the Secretary of Justice is fatal to its complaint for a refund: Clearly, the law requires that the
dissatisfied taxpayer who questions the validity or legality of a tax ordinance must 􏰁le his appeal to the Secretary of Justice, within
30 days from effectivity thereof. In case the Secretary decides the appeal, a period also of 30 days is allowed for an aggrieved
party to go to court. But if the Secretary does not act thereon, after the lapse of 60 days, a party could already proceed to seek
relief in court. These three separate periods are clearly given for compliance as a prerequisite before seeking redress in a
competent court. Such statutory periods are set to prevent delays as well as enhance the orderly and speedy discharge of judicial
functions. For this reason the courts construe these provisions of statutes as mandatory. A municipal tax ordinance empowers a
local government unit to impose taxes. The power to tax is the most effective instrument to raise needed revenues to finance and
support the myriad activities of local government units for the delivery of basic services essential to the promotion of the general
welfare and enhancement of peace, progress, and prosperity of the people. Consequently, any delay in implementing tax measures
would be to the detriment of the public. It is for this reason that protests over tax ordinances are required to be done within certain
time frames. In the instant case, it is our view that the failure of petitioners to appeal to the Secretary of Justice within 30 days as
required by Sec. 187 of R.A. 7160 is fatal to their cause.
7. RURAL BANK v. MUN. OF Upon the request of the municipal treasurer, in August 1990, Atty. Victor A.L. Valero, then the municipal attorney of the Municipality
MAKATI of Makati, went to the Rural Bank of Makati to inquire about the bank’s payments of taxes and fees to the municipality. Petitioner
Magdalena V. Landicho, corporate secretary of the bank, said that the bank was exempt from paying taxes under Republic Act No.
720, as amended.

On November 19, 1990, the municipality filed complaint with the Prosecutor’s Office, charging petitioners Esteban S. Silva,
president and general manager of the bank and Magdalena V. Landicho for violation of Section 21(a), Chapter II, Article 3 in relation
to Sections 105 and 169 of the Metropolitan Tax Code. On April 5, 1991, the municipality submitted two (2) Information with the
MTC against the respondent bank: 1) for non-payment of the mayor’s permit fee and 2) for non-payment of annual business tax.
While said cases were pending with the municipal court, respondent municipality ordered the closure of the bank. This prompted
petitioners to pay, under protest, the mayor’s permit fee and the annual fixed tax in the amount of P82,408.66.

On October 18, 1991, petitioners filed with the RTC a Complaint for Sum of Money and Damages. Petitioners alleged that they
were constrained to pay the amount of P82,408.66 because of the closure order, issued despite the pendency of the criminal cases
and the lack of any notice or assessment of the fees to be paid. They averred that the collection of the taxes/fees was oppressive,
arbitrary, unjust and illegal. Additionally, they alleged that respondent Atty. Valero had no power to enforce laws and ordinances,
thus his action in enforcing the collection of the permit fees and business taxes was ultra vires.

Respondent municipality asserted that petitioners’ payment of P82,408.66 was for a legal obligation because the payment of the
mayor’s permit fee as well as the municipal business license was required of all business concerns. According to respondent, said
requirement was in furtherance of the police power of the municipality to regulate businesses.

RTC rules in favor of the municipal of Makati. According to the trial court, the bank was engaged in business as a rural bank. Hence,
it should secure the necessary permit and business license, as well as pay the corresponding charges and fees. It found that the
municipality had authority to impose licenses and permit fees on persons engaging in business, under its police power embodied
under the general welfare clause. Also, the RTC declared unmeritorious petitioners’ claim for exemption under Rep. Act No. 720
since said exemption had been withdrawn by Executive Order No. 93 and the Rural Bank Act of 1992. These statutes no longer
exempted rural banks from paying corporate income taxes and local taxes, fees and charges.

The CA affirmed RTC’s decision in toto. CA also brushed aside petitioners’ claim that the general welfare clause is limited only to
legislative action. It declared that the exercise of police power by the municipality was mandated by the general welfare clause,
which authorizes the local government units to enact ordinances, not only to carry into effect and discharge such duties as are
conferred upon them by law, but also those for the good of the municipality and its inhabitants. This mandate includes the regulation
of useful occupations and enterprises. Hence the present complaint.

Petitioner bank claims that the closure of the bank was an improper exercise of police power because a municipal corporation has
no inherent but only delegated police power, which must be exercised not by the municipal mayor but by the municipal council
through the enactment of ordinances. It also assailed the Court of Appeals for invoking the General Welfare Clause embodied in
Section 16 of the Local Government Code of 1991, which took effect in 1992, when the closure of the bank was actually done on
July 31, 1991.

ISSUE: Whether or not the municipality’s police power covers the power to tax and the power to order the respondent’s bank
closure.

Rep. Act No. 720, as amended by Republic Act No. 4106, approved on July 19, 1964, had exempted rural banks with net assets
not exceeding one million pesos (P1,000,000) from the payment of all taxes, charges and fees. The records show that as of
December 29, 1986, petitioner bank’s net assets amounted only to P745,432.29. Hence, petitioner bank could claim to be exempt
from payment of all taxes, charges and fees under the aforementioned provision. However, EO 93 was issued by then President
Aquino, withdrawing all tax and duty incentives with certain exceptions. Notably, not included among the exceptions were those
granted to rural banks under Rep. Act No. 720. With the passage of said law, petitioner could no longer claim any exemption from
payment of business taxes and permit fees.

Indeed the Local Government Code of 1991 was not yet in effect when the municipality ordered petitioner bank’s closure on July
31, 1991. However, the general welfare clause invoked by the Court of Appeals is not found on the provisions of said law alone.
Even under the old Local Government Code (Batas Pambansa Blg. 337) which was then in effect, a general welfare clause was
provided for in Section 7 thereof.

Municipal corporations are agencies of the State for the promotion and maintenance of local self-government and as such are
endowed with police powers in order to effectively accomplish and carry out the declared objects of their creation. The authority of
a local government unit to exercise police power under a general welfare clause is not a recent development. This was already
provided for as early as the Administrative Code of 1917. Thus, the closure of the bank was a valid exercise of police power
pursuant to the general welfare clause contained in and restated by B.P. Blg. 337, which was then the law governing local
government units. No reversible error arises in this instance insofar as the validity of respondent municipality’s exercise of police
power for the general welfare is concerned.

The general welfare clause has two branches. The first, known as the general legislative power, authorizes the municipal council
to enact ordinances and make regulations not repugnant to law, as may be necessary to carry into effect and discharge the powers
and duties conferred upon the municipal council by law. The second, known as the police power proper, authorizes the municipality
to enact ordinances as may be necessary and proper for the health and safety, prosperity, morals, peace, good order, comfort,
and convenience of the municipality and its inhabitants, and for the protection of their property.

In the present case, the ordinances imposing licenses and requiring permits for any business establishment, for purposes of
regulation enacted by the municipal council of Makati, fall within the purview of the first branch of the general welfare clause.
Moreover, the ordinance of the municipality imposing the annual business tax is part of the power of taxation vested upon local
governments as provided for under Section 8 of B.P. Blg. 337.

Consequently, the municipal mayor, as chief executive, was clothed with authority to create a Special Task Force headed by
respondent Atty. Victor A.L. Valero to enforce and implement said ordinances and resolutions and to file appropriate charges and
prosecute violators. Respondent Valero could hardly be faulted for performing his official duties under the cited circumstances.

On the issue of the closure of the bank, we find that the bank was not engaged in any illegal or immoral activities to warrant its
outright closure. The appropriate remedies to enforce payment of delinquent taxes or fees are provided for in Section 62 of the
Local Tax Code. Said Section 62 did not provide for closure. Moreover, the order of closure violated petitioner’s right to due process,
considering that the records show that the bank exercised good faith and presented what it thought was a valid and legal justification
for not paying the required taxes and fees. The violation of a municipal ordinance does not empower a municipal mayor to avail of
extrajudicial remedies. It should have observed due process before ordering the bank’s closure.

WHEREFORE, the assailed Decision dated July 17, 2001, of the Court of Appeals in CA-G.R. CV No. 58214 is AFFIRMED with
MODIFICATIONS, so that (1) the order denying any claim for refunds and fees allegedly overpaid by the bank, as well as the denial
of any award for damages and unrealized profits, is hereby SUSTAINED; (2) the order decreeing the closure of petitioner bank is
SET ASIDE; and (3) the award of moral damages and attorney’s fees to Atty. Victor A.L. Valero is DELETED. No pronouncement
as to costs.
8. ANGELES CITY v On January 22, 2004, the City Treasurer issued a Notice of Assessment to Angeles Electric Corporation (AEC) for payment of business tax,
ANGELES CITY license fee and other charges for the period 1993 to 2004 in the total amount of P94,861,194.10. Within the period prescribed by law, AEC
ELECTRIC CORP protested the assessment. When the city Treasurer denied the protest and ordered petitioner to settle its obligation, petitioner filed with the RTC
a petition praying for the issuance of a TRO which was granted. The city government opposed on the ground that per NIRC the collection of
taxes cannot be enjoined.

ISSUE: Whether or not the collection of local government taxes can be enjoined.

The prohibition on the issuance of a writ of injunction to enjoin the collection of taxes applies only to national internal revenue taxes and not to
local taxes.
RATIO: There is no express provision in the Local Government Code prohibiting courts from issuing injunction to restrain local governments
from collecting taxes. Furthermore, when there is no other plain, speedy and adequate remedy available to the petitioner in the ordinary course
of law except this application for a temporary restraining order and/or writ of preliminary injunction to stop the auction sale and/or to enjoin and/or
restrain respondents from levying, annotating the levy, seizing, confiscating, garnishing, selling and disposing at public auction the properties
of petitioner, or otherwise exercising other administrative remedies against the petitioner and its properties, justifies the move of the petitioner
in seeking the injunctive reliefs sought for.
9. SMART v. MALVAR Smart constructed a telecommunications tower within the territorial jurisdiction of the Municipality for the purpose of receiving and
transmitting cellular communications within the covered area.
On 30 July 2003, the Municipality passed Ordinance No. 18, series of 2003, entitled "An Ordinance Regulating the Establishment
of Special Projects.". And on 24 August 2004, Smart received from the Permit and Licensing Division of the Office of the Mayor of
the Municipality an assessment letter with a schedule of payment for the total amount of ₱389,950.00 for the tower.

TOTAL PROJECT COST: PHP 11,000,000.00

For the Year 2001-2003
50% of 1% of the total project cost Php55,000.00
Add: 45% surcharge 24,750.00

Php79,750.00
Multiply by 3 yrs. (2001, 2002, 2003) Php239,250.00
For the year 2004
1% of the total project cost Php110,000.00
37% surcharge 40,700.00
==========
Php150,700.00
TOTAL Php389,950.00

The Municipality caused the posting of a closure notice on the telecommunications tower, due to alleged arrears in its payment.
On 9 September 2004, Smart filed a protest, claiming lack of due process in the issuance of the assessment and closure notice.
In the same protest, Smart challenged the validity of Ordinance No. 18 on which the assessment was based.
On 2 December 2008, the trial court rendered a Decision partly granting Smart’s Appeal/Petition. The trial court confined its
resolution of the case to the validity of the assessment and did not rule on the legality of Ordinance No. 18. The trial court held that
the assessment covering the period from 2001 to July 2003 was void since Ordinance No. 18 was approved only on 30 July 2003.
However, the trial court declared valid the assessment starting 1 October 2003, citing Article 4 of the Civil Code of the Philippines,
in relation to the provisions of Ordinance No. 18 and Section 166 of Republic Act No. 7160 or the Local Government Code of 1991
(LGC).
Issues:
 Were the fees imposed in Ordinance No. 18 taxes?
Ruling:
No, the fees are not taxes because the fees imposed in Ordinance No. 18 are primarily regulatory in nature, and not primarily
revenue-raising.
As clearly stated in its whereas clauses, the primary purpose of Ordinance No. 18 is to regulate the "placing, stringing, attaching,
installing, repair and construction of all gas mains, electric, telegraph and telephone wires, conduits, meters and other apparatus"
listed therein, which included Smart’s telecommunications tower. Clearly, the purpose of the assailed Ordinance is to regulate the
enumerated activities particularly related to the construction and maintenance of various structures. The fees in Ordinance No. 18
are not impositions on the building or structure itself; rather, they are impositions on the activity subject of government regulation,
such as the installation and construction of the structures.22
Since the main purpose of Ordinance No. 18 is to regulate certain construction activities of the identified special projects, which
included "cell sites" or telecommunications towers, the fees imposed in Ordinance No. 18 are primarily regulatory in nature, and
not primarily revenue-raising. While the fees may contribute to the revenues of the Municipality, this effect is merely incidental.
Thus, the fees imposed in Ordinance No. 18 are not taxes.

10. CITY OF MANILA v. HON. Petitioner City of Manila, through its treasurer, petitioner Liberty Toledo, assessed taxes for the taxable period from January to
GRECIA CUERDO December 2002 against the private respondents. In addition to the taxes purportedly due from private respondents pursuant to
Section 14, 15, 16, 17 of the Revised Revenue Code of Manila (RRCM), said assessment covered the local business taxes.
private respondents were constrained to pay the P 19,316,458.77 assessment under protest.

On January 24, 2004, private respondents filed before the RTC of Pasay City the complaint denominated as one for “Refund or
Recovery of Illegally and/or Erroneously–Collected Local Business Tax, Prohibition with Prayer to Issue TRO and Writ of
Preliminary Injunction The RTC granted private respondents’ application for a writ of preliminary injunction.

Petitioners filed a Motion for Reconsideration4 but the RTC denied. Petitioners then filed a special civil action for certiorari with the
CA but the CA dismissed petitioners’ petition for certiorari holding that it has no jurisdiction over the said petition. The CA ruled that
since appellate jurisdiction over private respondents’ complaint for tax refund, which was filed with the RTC, is vested in the Court
of Tax Appeals (CTA), pursuant to its expanded jurisdiction under Republic Act No. 9282 (RA 9282), it follows that a petition
for certiorari seeking nullification of an interlocutory order issued in the said case should, likewise, be filed with the CTA.

Petitioners filed a Motion for Reconsideration,7 but the CA denied it in its Resolution hence, this petition

ISSUE:
Whether or not the CTA has jurisdiction over a special civil action for certiorari assailing an interlocutory order issued by the RTC
in a local tax case.

HELD:
The CTA has jurisdiction over a special civil action for certiorari assailing an interlocutory order issued by the RTC in a local tax
case. In order for any appellate court to effectively exercise its appellate jurisdiction, it must have the authority to issue, among
others, a writ of certiorari. In transferring exclusive jurisdiction over appealed tax cases to the CTA, it can reasonably be assumed
that the law intended to transfer also such power as is deemed necessary, if not indispensable, in aid of such appellate jurisdiction.
There is no perceivable reason why the transfer should only be considered as partial, not total.

Consistent with the above pronouncement, the Court has held as early as the case of J.M. Tuason & Co., Inc. v. Jaramillo, et al.
[118 Phil. 1022 (1963)] that “if a case may be appealed to a particular court or judicial tribunal or body, then said court or judicial
tribunal or body has jurisdiction to issue the extraordinary writ of certiorari, in aid of its appellate jurisdiction.” This principle was
 affirmed in De Jesus v. Court of Appeals (G.R. No. 101630, August 24, 1992) where the Court stated that “a court may issue a writ
of certiorari in aid of its appellate jurisdiction if said court has jurisdiction to review, by appeal or writ of error, the final orders or
decisions of the lower court.

FALLO: petition is denied

11. PALMA DEV. CORP. v. Here in issue was the validity of Section 5G.01 of Municipal Revenue Code No. 09, Series of 1993, imposing service fee for the
MUN OF MALANGAS, use of respondent municipality's roads leading to the wharf and to any point along the shorelines within the jurisdiction of the
ZAMBUANGA municipality, and for police surveillance on all goods and equipments harbored or sheltered in the premises of the wharf and others
within the jurisdiction of the municipality. The Court ruled: the same was null and void for being violative of the Local Government
Code of 1991 or RA No. 7160. Section 133(e) thereof prohibits the imposition, in the guise of wharfage, of fees - as well as all other
taxes or charges in any form whatsoever - on goods or merchandise that pass through the territorial jurisdiction of the local
government units.

1. POLITICAL LAW; ADMINISTRATIVE LAW; LOCAL GOVERNMENT CODE OF 1991 (RA 7160); IMPOSITION OF TAXES,
FEES OR CHARGES UPON GOODS OR MERCHANDISE THAT PASS THROUGH TERRITORIAL JURISDICTION OF LOCAL
GOVERNMENT UNITS, PROHIBITED. — By express language of Sections 153 and 155 of RA No. 7160, local government units,
through their Sanggunian, may prescribe the terms and conditions for the imposition of toll fees or charges for the use of any public
road, pier or wharf funded and constructed by them. A service fee imposed on vehicles using municipal roads leading to the wharf
is thus valid. However, Section 133(e) of RA No. 7160 prohibits the imposition, in the guise of wharfage, of fees — as well as all
other taxes or charges in any form whatsoever — on goods or merchandise. It is therefore irrelevant if the fees imposed are actually
for police surveillance on the goods, because any other form of imposition on goods passing through the territorial jurisdiction of
the municipality is clearly prohibited by Section 133(e).ScAaHE

2. ID.; ID.; ID.; WHARFAGE, DEFINED. — Under Section 131(y) of RA No. 7160, wharfage is defined as "a fee assessed against
the cargo of a vessel engaged in foreign or domestic trade based on quantity, weight, or measure received and/or discharged by
vessel." It is apparent that a wharfage does not lose its basic character by being labeled as a service fee "for police surveillance
on all goods."ACIESH

3. ID.; ID.; ID.; BENEFITS FROM THE USE OF MUNICIPAL ROADS AND WHARF, NOT UNJUST ENRICHMENT WHERE THE
SAME RESULTED FROM THE INFRASTRUCTURE THAT THE MUNICIPALITY WAS MANDATED BY LAW TO PROVIDE. —
Unpersuasive is the contention of respondent that petitioner would unjustly be enriched at the former's expense. Though the rules
thereon apply equally well to the government, for unjust enrichment to be deemed present, two conditions must generally concur:
(a) a person is unjustly bene􏰁ted, and (b) such bene􏰁t is derived at another's expense or damage. In the instant case, the bene􏰁ts
from the use of the municipal roads and the wharf were not unjustly derived by petitioner. Those bene􏰁ts resulted from the
infrastructure that the municipality was mandated by law to provide. There is no unjust enrichment where the one receiving the
benefit has a legal right or entitlement thereto, or when there is no causal relation between one's enrichment and the other's
impoverishment. HIAE

12. ERICSSON Ericsson Telecommunications, Inc. (petitioner), a corporation with principal office in Pasig City (respondent), is engaged in the
TELECOMMUNICATIONS design, engineering, and marketing of telecommunication facilities/system. In an Assessment Notice dated October 25, 2000
INC. v. CITY OF PASIG issued by the City Treasurer of Pasig City, petitioner was assessed a business tax deficiency for the years 1998 and 1999
amounting to P9,466,885.00 and P4,993,682.00, respectively, based on its gross revenues as reported in its audited financial
statements for the years 1997 and 1998. Petitioner filed a Protest claiming that the computation of the local business tax should
be based on gross receipts and not on gross revenue.
 Respondent issued another Notice of Assessment to petitioner on November 19, 2001, this time based on business tax deficiencies
for the years 2000 and 2001, amounting to P4,665,775.51 and P4,710,242.93, respectively, based on its gross revenues for the
years 1999 and 2000. Again, petitioner filed a Protest, reiterating its position that the local business tax should be based on gross
receipts and not gross revenue. Respondent denied petitioner’s protest and gave the latter 30 days within which to appeal the
denial.
Petitioner filed a petition for review with the RTC of Pasig, praying for the annulment and cancellation of petitioner’s deficiency local
business taxes totaling P17,262,205.66.

ISSUE:
What is the extent of the Power of Local Taxation?

RULING:
The power to tax is primarily vested in the Congress; however, it may be exercised by local legislative bodies pursuant to direct
authority conferred by Section 5, Article X of the Constitution. Under the latter, the exercise of the power may be subject to such
guidelines and limitations as Congress may provide. Respondent assessed deficiency local business taxes on petitioner based on
the latter’s gross revenue as reported in its financial statements, arguing that gross receipts is synonymous with gross
earnings/revenue, which, in turn, includes uncollected earnings. Petitioner, however, contends that only the portion of the
revenues which were actually and constructively received should be considered in determining its tax base.

Thus, respondent committed a palpable error when it assessed petitioner’s local business tax based on its gross revenue as
reported in its audited financial statements, as Section 143 of the Local Government Code and Section 22(e) of the Pasig Revenue
Code clearly provide that the tax should be computed based on gross receipts.

13. CITY OF MANILA v. Petitioner City of Manila is a public corporation empowered to collect and assess business taxes, revenue fees, and permit fees,
COCA-COLA through its officers, petitioners Toledo and Santiago, in their capacities as City Treasurer and Chief of the Licensing Division,
respectively. On the... other hand, respondent Coca-Cola Bottlers Philippines, Inc. is a corporation engaged in the business of
manufacturing and selling beverages, and which maintains a sales office in the City of Manila
Prior to 25 February 2000, respondent had been paying the City of Manila local business tax only under Section 14 of Tax Ordinance
No. 7794,[6] being expressly exempted from the business tax under Section 21 of the same tax ordinance
Petitioner City of Manila subsequently approved on 25 February 2000, Tax Ordinance No. 7988,[7] amending certain sections of
Tax Ordinance No. 7794, particularly: (1) Section 14, by increasing the tax rates applicable to certain establishments operating...
within the territorial jurisdiction of the City of Manila; and (2) Section 21, by deleting the proviso found therein, which stated "that all
registered businesses in the City of Manila that are already paying the aforementioned tax shall be exempted from payment
thereof."

Petitioner City of Manila approved only after a year, on 22 February 2001, another tax ordinance, Tax Ordinance No. 8011,
amending Tax Ordinance No. 7988.

Tax Ordinances No. 7988 and No. 8011 were later declared by the Court null and void in Coca-Cola Bottlers Philippines, Inc. v.
City of Manila[8] (Coca-Cola case) for the following reasons: (1) Tax Ordinance No. 7988 was enacted in... contravention of the
provisions of the Local Government Code (LGC) of 1991 and its implementing rules and regulations; and (2) Tax Ordinance No.
8011 could not cure the defects of Tax Ordinance No. 7988, which did not legally exist.
However, before the Court could declare Tax Ordinance No. 7988 and Tax Ordinance No. 8011 null and void, petitioner City of
Manila assessed respondent on the basis of Section 21 of Tax Ordinance No. 7794, as amended by the aforementioned tax
ordinances, for deficiency local... business taxes, penalties, and interest, in the total amount of P18,583,932.04, for the third and
fourth quarters of the year 2000
Respondent filed a protest with petitioner Toledo on the ground that the said assessment amounted to double taxation, as
respondent was taxed... twice, i.e., under Sections 14 and 21 of Tax Ordinance No. 7794, as amended by Tax Ordinances No.
7988 and No. 8011. Petitioner Toledo did not respond to the protest of respondent.
The RTC, though, in an Order[10] dated 16 November 2006, granted the Motion for Reconsideration of respondent, decreed the
cancellation and withdrawal of the assessment against the latter, and barred petitioners from... further imposing/assessing local
business taxes against respondent under Section 21 of Tax Ordinance No. 7794... the CTA First Division already issued a
Resolution dismissing C.T.A. AC No. 31 for failure of petitioners to timely file their Petition for Review on 20 May 2007.

The CTA en banc rendered its Decision on 18 January 2008, dismissing the Petition for Review of petitioners and affirming the
Resolutions dated 24 May 2007, 8 June 2007, and 26 July 2007 of the CTA First Division. The CTA en banc similarly denied the
Motion for Reconsideration of petitioners in a Resolution dated 18 February 2008.

Issues:
WHETHER OR NOT THE ENFORCEMENT OF [SECTION] 21 OF THE [TAX ORDINANCE NO. 7794, AS AMENDED]
CONSTITUTES DOUBLE TAXATION

Ruling:
Section 14 of Tax Ordinance No. 7794 imposes local business tax on manufacturers, etc. of liquors, distilled spirits, wines, and any
other article of commerce, pursuant to Section 143(a) of the LGC. On the other hand, the local business tax under Section 21 of
Tax Ordinance No. 7794 is imposed upon persons selling goods and services in the course of trade or business, and those
importing goods for business or otherwise, who, pursuant to Section 143(h) of the LGC, are subject to excise tax, value-added tax
(VAT), or percentage tax under... the National Internal Revenue Code (NIRC). Thus, there can be no double taxation when
respondent is being taxed under both Sections 14 and 21 of Tax Ordinance No. 7794, for under the first, it is being taxed as a
manufacturer; while under the second, it is being taxed as a... person selling goods in the course of trade or business subject to
excise, VAT, or percentage tax.

Emphasis must be given to the fact that prior to the passage of Tax Ordinance No. 7988 and Tax Ordinance No. 8011 by petitioner
City of Manila, petitioners subjected and assessed respondent only for the local business tax under Section 14 of Tax Ordinance
No. 7794, but never... under Section 21 of the same. This was due to the clear and unambiguous proviso in Section 21 of Tax
Ordinance No. 7794, which stated that "all registered business in the City of Manila that are already paying the aforementioned tax
shall be exempted from payment... thereof." The "aforementioned tax" referred to in said proviso refers to local business tax. Stated
differently, Section 21 of Tax Ordinance No. 7794 exempts from the payment of the local business tax imposed by said section,
businesses that are already paying such tax... under other sections of the same tax ordinance. The said proviso, however, was
deleted from Section 21 of Tax Ordinance No. 7794 by Tax Ordinances No. 7988 and No. 8011. Following this deletion, petitioners
began assessing respondent for the local business tax under Section 21 of Tax Ordinance No. 7794, as amended.

The Court easily infers from the foregoing circumstances that petitioners themselves believed that prior to Tax Ordinance No. 7988
and Tax Ordinance No. 8011, respondent was exempt from the local business tax under Section 21 of Tax Ordinance No. 7794.
Hence, petitioners had to... wait for the deletion of the exempting proviso in Section 21 of Tax Ordinance No. 7794 by Tax Ordinance
No. 7988 and Tax Ordinance No. 8011 before they assessed respondent for the local business tax under said section

Petitioners obstinately ignore the exempting proviso in Section 21 of Tax Ordinance No. 7794, to their own detriment. Said
exempting proviso was precisely included in said section so as to avoid double taxation
Double taxation means taxing the same property twice when it should be taxed only once; that is, "taxing the same person twice
by the same jurisdiction for the same thing." It is obnoxious when the taxpayer is taxed twice, when it should be but once. Otherwise
described as "direct duplicate taxation," the two taxes must be imposed on the same subject matter, for the same purpose, by the
 same taxing authority, within the same jurisdiction, during the same taxing period; and the taxes must be of the same kind or...
character.[18]

Using the aforementioned test, the Court finds that there is indeed double taxation if respondent is subjected to the taxes under
both Sections 14 and 21 of Tax Ordinance No. 7794, since these are being imposed: (1) on the same subject matter - the privilege
of doing business in... the City of Manila; (2) for the same purpose - to make persons conducting business within the City of Manila
contribute to city revenues; (3) by the same taxing authority - petitioner City of Manila; (4) within the same taxing jurisdiction - within
the territorial jurisdiction... of the City of Manila; (5) for the same taxing periods - per calendar year; and (6) of the same kind or
character - a local business tax imposed on gross sales or receipts of the business.

WHEREFORE, premises considered, the instant Petition for Review on Certiorari is hereby DENIED

14. CHINA BANKING v. CITY THE HONORABLE COURT OF TAX APPEALS GRAVELY ERRED IN DISREGARDING THE LAW AND INTEREST OF
TREASURER OF MANILA SUBSTANTIAL JUSTICE BY REVERSING THE RULING OF THE TRIAL COURT SOLELY BECAUSE OF ITS ASSUMED
PRONOUNCEMENT THAT THE ORIGINAL PETITION WAS FILED ONE (1) DAY BEYOND THE REGLEMENTARY PERIOD?

CBC asserts that it filed the proper written protest but for lack of any action from the City Treasurer, it was prompted to file its
petition for review with the RTC. The petitioner insists on the invalidity of the City Treasurer's assessment. It pointed out that the
basis of the assessment, Ordinance Nos. 7988 and 8110, had been declared unconstitutional by the Court in Coca-Cola, and that
the Office of the Mayor of Manila even directed the City Treasurer to cease and desist from assessing and imposing Section 21 of
the said ordinances.

For CBC, its one (1) day delay in filing its appeal with the RTC should have been excused by the CTA because the delay was "not
much of a heavy harm and was due to [the] honest mistake and excusable negligence" of its former counsel.
For her part, the City Treasurer filed her Memorandum for the Respondent where she contended that CBC never filed a formal
letter of protest to state the grounds for its objection while admitting that it had paid the assessed amount under protest. She
claimed that CBC simply filed a petition for review with the RTC without filing a formal letter of protest. Without a formal letter of
protest, the City Treasurer argued that its claim for refund should be dismissed because Section 195 of the Local Government
Code stated that "No case or proceeding shall be maintained in any court for recovery of any tax, fee or charged erroneously or
illegally collected until a written claim for refund has been filed with the local treasurer."
The City Treasurer also questioned the jurisdiction of the RTC in entertaining the petition for review filed before it as well as the
timeliness of the filing of the petitioner's appeal.

Protest validly filed.

15. FILM DEV. COUNCIL v. The City of Cebu passed Ordinance No. 69 whereby Sections 42 and 43 thereof require proprietors, lessees or operators of
COLON HERITAGE theatres, cinemas, concert halls, circuses, boxing stadia, and other places of amusement, to pay an amusement tax equivalent to
REALTY CORP thirty percent (30%) of the gross receipts of admission fees to the Office of the City Treasurer of Cebu City. Thereafter, Republic
Act (R.A.) No. 9167, Sections 13 and 14 thereof states that producers of graded A and B films shall be entitled to incentives
equivalent to the amusement tax imposed and collected on such graded films. The Film Development Council of the Philippines
(FDCP), in implementing the statute, argued that the Congress restricted the delegated power of the City of Cebu in imposing
amusement taxes, when it enacted Secs. 13 and 14 of R.A. No. 9167. The lower court ruled, however, that said provisions are
contrary to the basic policy in local autonomy that all taxes, fees, and charges imposed by the LGUs shall accrue exclusively to
them, as articulated in Article X, Sec. 5 of the 1987 Constitution.

Issue:
Whether or not Secs. 13 and 14 of R.A. No. 9167 violates fiscal autonomy
Ruling:
Yes, Secs. 13 and 14 of R.A. No. 9167 violates fiscal autonomy.

The basic rationale for the current rule on local fiscal autonomy is the strengthening of LGUs and the safeguarding of their
viability and self-sufficiency through a direct grant of general and broad tax powers. Nevertheless, the fundamental law did not
intend the delegation to be absolute and unconditional. The legislature must still see to it that (a) the taxpayer will not be over-
burdened or saddled with multiple and unreasonable impositions; (b) each LGU will have its fair share of available resources; (c)
the resources of the national government will not be unduly disturbed; and (d) local taxation will be fair, uniform, and just.
It is beyond cavil that the City of Cebu had the authority to issue its City Ordinance No. LXIX and impose an amusement
tax on cinemas pursuant to Sec. 140 in relation to Sec. 151 of the LGC. Sec. 140 states, among other things, that a “province may
levy an amusement tax to be collected from the proprietors, lessees, or operators of theaters, cinemas, concert halls, circuses,
boxing stadia, and other places of amusement at a rate of not more than thirty percent (30%) of the gross receipts from admission
fees.” By operation of said Sec. 151, extending to them the authority of provinces and municipalities to levy certain taxes, fees, and
charges, cities, such as respondent city government, may therefore validly levy amusement taxes subject to the parameters set
forth under the law.

For RA 9167, however, the covered LGUs were deprived of the income which they will otherwise be collecting should they
impose amusement taxes, or, in petitioner’s own words, “Section 14 of [RA 9167] can be viewed as an express and real intention
on the part of Congress to remove from the LGU’s delegated taxing power, all revenues from the amusement taxes on graded films
which would otherwise accrue to [them] pursuant to Section 140 of the [LGC].”

Taking the resulting scheme into consideration, it is apparent that what Congress did in this instance was not to exclude
the authority to levy amusement taxes from the taxing power of the covered LGUs, but to earmark, if not altogether confiscate, the
income to be received by the LGU from the taxpayers in favor of and for transmittal to FDCP, instead of the taxing authority. This,
to Our mind, is in clear contravention of the constitutional command that taxes levied by LGUs shall accrue exclusively to said LGU
and is repugnant to the power of LGUs to apportion their resources in line with their priorities.