Concrete Aggregates Inc. v. CTA and Comm.

Of Internal Revenue
G.R. No. 55793

May 18, 1990

Regalado, J.
Doctrine: Article 1467 The habituality of the production of goods for the
general public characterizes the business of petitioner (the court ruled that the
petitioner is a manufacturer since it failed to passed the test of a contractor under
1467).
Facts: Petitioner complained the sales assessment conducted by agents of
respondent commissioner, assessing its business with 7% sales tax, it being a
manufacturer. Instead of paying, he brought the matter to the Court of Tax
Appeals who then concluded that petitioner is a manufacturer subject to 7% sales
tax. Eventually, petitioner seeks annulment of such decision and contended that it
is a contractor under the meaning of Section 191 of Tax Code. That its business
falls under other construction work contractor and that it produced asphalt
and concrete mix upon previous orders only, as such petitioner must be subject to
3% contractors tax.
Issue: W/N petitioner is a contractor and must be subject to 3% sales tax.
Held: No. The Court ruled that the respondent court found that petitioner was
formed and organized primarily as a manufacturer having aggregate plants and
asphalt mixing machinery. It failed to passed the test of a contractor under Art.
1467 of the N.C.C. : a contract for the delivery at a certain priceof an article
which the vendor in the ordinary course of his business manufactures or procures
for the general market, whether the same is on hand at the time or not, is a
contract of sale, but if the goods are to be manufactured specially for the
customer and upon his special order, and not for the general market, it is a
contract for a piece of work. The habituality of the production of goods for the
general public characterizes the business of petitioner.
The petition is denied.