Dr. Esteban Medina, Dr. Jose De La Rosa, Mr.

Enrique Santamaria, and Benguet

Development Co., Inc., versus City of Baguio
G.R. No. L-4060, August 29, 1952
En Banc, Bautista Angelo, J.

FACTS:
Esteban Medina (Medina) and Jose Y. de la Rosa (de la Rosa), owners and
operators of movie houses in the City of Baguio, paid, under protest, the amounts
of P1, 200 and P1,800, respectively, for municipal license pursuant to Ordinance
no. 99. Further, Medina and Enrique Santamaria (Santamaria), also an owner and
operator of a movie house in the city of Baguio, paid for additional taxes under
Ordinance no. 62. On the other hand, Benguet Development Co., Inc., (BDC) paid
under Ordinance No. 100 the amount of P3, 554.44 as specific tax for gasoline and
oil. Thereafter, Medina, de la Rosa, Santamaria and BDC brought an action in the
Court of First Instance of Baguio seeking to nullify Ordinances Nos. 62, 99and 100 of
the City Council of Baguio on the ground that they were enacted without
authority or power, and are oppressive, unjust and unreasonable, and to recover
the taxes and fees they had paid as itemized in the complaint. After trial, the court
rendered decision declaring Ordinances Nos. 99 and 100 valid and legal but
rendering Ordinance No. 62 null and void while denying the claim of the plaintiffs
for reimbursement of the different amounts paid by them. From this decision only
the plaintiffs appealed assigning from errors as committed by the lower court.

ISSUE(S):
WON respondent City of Baguio has the power to levy a tax upon theaters
and gasoline stations which are operated within its limits

DECISION:
Under Republic Act No. 329, the city council of Baguio has now the power
to tax, to license and to regulate provided that the subjects affected be one of
those included in the charter of the City of Baguio. In this sense, Ordinance No. 99
of Baguio, which fixes the license fees to be paid by persons, entities or
corporations who may engage in business within said City, cannot be considered
ultra vires whether its purpose be to levy a tax or impose a license fee. The
terminology used is of no consequence.

The city council of Baguio does not have the power to levy a specific tax on
items or articles covered by the business of the taxpayer. Unlike a sovereign state,
a municipal corporation is clothed with no inherent power of taxation. Its charter
must plainly show an intent to confer that power or the municipality cannot
assume it. And the power when granted is to be construed strictissimi juris. An
examination of section 2553(c), of the Revised Administrative Code, as amended,
will reveal that the power given to the city of Baguio to tax, to license and to
regulate only refers to the business of the taxpayer and not to the articles used in
said business. In other words, the power to levy a percentage tax or a specific tax
has been expressly withheld. Therefore, Ordinance No. 100 of Baguio, levying a
specific tax on gasoline and oil sold in that city, is null and void.
Uy Matiao & Co., Inc., versus The City of Cebu, Miguel Raffian, as Mayor; Anatolio
Ynclino as City Treasurer and Jesus E. Zabate, as Assistant City Treasurer of Cebu
City
G.R. No. L-4887, May 30, 1953
En Banc, Padilla, J.

FACTS:
Uy Matiao & Co., Inc., a domestic corporation, paid under protest the fees
for the storage in its warehouse in the City of Cebu of copra and/or hemp and/or
for engaging in buying and/or selling copra and/or hemp in the said City provided
for in Ordinance No. 38, series of 1948, as amended by Ordinance No. 46, series of
1947, of the City of Cebu on the ground that the fee imposed by said ordinance is
un- authorized.

ISSUE(S):
WON City of Cebu is authorized under its charter to impose the collection of
tax or license free provided in Ordinance No. 38, series of 1948, as amended by
Ordinance No. 46, series of 1947.

DECISION:
Section 17, Commonwealth Act No. 58, provides that the Municipal Board
shall have the following legislative powers: xxxx

(m) To tax, fix the license free for, regulate the business, and fix the location
of xxxx , coal, oil, gasoline, benzine, turpentine, hemp, cotton, nitroglycerine,
petrolium, or any of the products thereof and of all other highly combustible or
explosive materials, and other establishment likely to endanger the public safety or
give rise to conflagrations or explotions, xxxx.

The fact that copra is not mentioned in section 17 (m), Com. Act No. 58,
does not mean the copra is excluded, because oil is in the enumeration and the
main component ingredient or constituent part of copra, which is the dried meat
of the coconut, is oil. There is then an express authority of the city of Cebu Tax, fix
the license fee for regulate the business and fix the location of match factories,
etc., the storage and sale of gun powder, oil, etc., and other establishments likely
to endanger the public safety or give rise to the conflagrations or explosions. Also,
under its charter the City of Cebu May Tax or impose a license fee on any person,
firm or corporation engaged in the business of buying and selling the storing copra
in a warehouse located in the city, oil being the main component ingredient of
copra, house used for keeping or storing copra is an establishment likely to
endanger the public safety or likely to give rise to conflagrations or explosions or
explosions. True, copra is not highly combustible or explosive material, but once
ignited, the fire resulting therefrom, because of oil it contains, is difficult to put
under control by water and to extinguish it the use of chemicals would be
necessary. For that reason such a warehouse is likely to endanger the public safety
or likely to give rise to configlations.
 The Shell Co. of P.I., LTD., versus E.E. Vao, as Municipal Treasurer of the
Municipality of Cordova, Province of Cebu
G.R. No. L-6093, February 24, 1954
En Banc, Padilla, J.

FACTS:
The Municipal Council of Cordova, Province of Cebu, adopted the
following ordinances: No. 10, series of 1946, which imposes an annual tax of P150
on occupation or the exercise of the privilege of installation manager; No. 9, series
of 1947, which imposes an annual tax of P40 for local deposits in drums of
combustible and inflammable materials and an annual tax of P200 for tin can
factories; and No. 11, series of 1948, which imposes an annual tax of P150 on tin
can factories having a maximum output capacity of 30,000 tin cans. The Shell Co.
of P.I. Ltd., a foreign corporation, filed suit for the refund of the taxes paid by it, on
the ground that the ordinances imposing such taxes are ultra vires.

ISSUE(S):
(1)WON ordinance No. 10, series of 1946 is discriminatory and hostile
because there is no other person in the locality who exercises such "designation" or
occupation. (2)WON Ordinance No. 9, series of 1947 and No. 11, series of 1948 are
unauthorized and illegal

DECISION:
1. The fact that there is no other person in the locality who exercises such a
"designation" or calling does not make the ordinance discriminatory and hostile,
inasmuch as it is and will be applicable to any person or firm who exercises such
calling or occupation named or designated as "installation manager."

2. The permit and the fee referred to may be required and charged by the
Municipal Council of Cordova in the exercise of its regulative authority, whereas
the ordinance which imposes the taxes in question was adopted under and
pursuant to the provisions of Commonwealth Act No. 472, which authorizes
municipal councils and municipal district councils "to impose license taxes upon
persons engaged in any occupation or business, or exercising privileges in the
municipality or municipal district, by requiring them to secure licenses at rates fixed
by the municipal council or municipal district council," which shall be just and
uniform but not "percentage taxes and taxes on specified articles."

Lastly, Ordinance No. 11, series of 1948, is valid and lawful, because it is
neither a percentage tax nor one on specified articles which are the only
exceptions provided in section 1, Commonwealth Act No. 472. Neither does it fall
under any of the prohibitions provided for in section 3 of the same Act.
 Julio Llamado versus Commissioner of Customs
G.R. No. L-28809, May 16, 1983
First Division, Plana, J.

FACTS:
Llamado's plane was involved in a smuggling operation when it was used to
bring lamps for the transportation of blue seal cigarettes. A warrant of seizure and
detention of the plane was issued and after the hearing it was forfeited by the
government applying Section 2530 of the Tariff and Customs Code. On appeal,
the CTA affirmed the decision of the Collector of Customs. Llamado contends that
the plane cannot be forfeited under the Code for it did not come from a foreign
country nor did it carry or unload cigarettes in any place in the Philippines. It was
not actually used in transporting the cigarettes but was merely used to bring the
lamps to the airstrip and as such, it is not subject to forfeiture under Philippine laws.

ISSUE(S):
WON the Cessna plane was used in the unlawful importation of cigarettes
within the meaning of Section 2530 (a) of the Tariff and Customs Code.

DECISION:
Section 2530(a) of the Tariff and Customs Code, provides that "Any vessel or
aircraft, cargo or articles and other objects shall, under the following conditions,
be subject to forfeiture:" (a) Any vessel or aircraft, including cargo, which shall be
used unlawfully in the importation or exportation of articles into or from any
Philippine ports or place except a port of entry; and any vessel which, being of less
than thirty tons capacity shall be used in the importation of articles into any
Philippine port or place except into a port of the Sulu sea where importation in
such vessel may be authorized by the Commissioner, with the approval of the
department head." Under the foregoing legal provision, in order to warrant
forfeiture, it is not necessary that the vessel or aircraft must itself carry the
contraband. There is nothing in the law that so requires.

In the case at bar, it is undeniable that the Alabat adventure was entirely
and solely a smuggling operation; and the Cessna were deliberately used to
insure its successful prosecution. It brought the smugglers to Alabat and
subsequently delivered the necessary lighting paraphernalia to citable the cargo
plane to take off without peril and transport the smuggled cigarettes to Luzon. In
our view, this complementary if collateral, use of the Cessna for smuggling
operation is sufficient for it to be deemed to have been used unlawfully in the
importation or smuggling of blue seal cigarettes. The participation of the Cessna
as above described, was legally an active involvement of the said plane in, and
constituted an unlawful use thereof for smuggling or illegal importation within the
meaning of Section 2530 (a) of the Tariff and Customs Code. Note that
"importation," by law, commences when the carrying vessel or aircraft enters the
jurisdiction of the Philippines with intention to unload; and it is "deemed terminated
(only) upon payment of the duties taxes and other charges due upon the articles,
or (the same has been) secured to be paid . . . and the legal permit for withdrawal
shall have been granted." (Tariff and Customs Code, Section 1202).
 Compania General De Tobacos De Filipinas versus Acting Commissioner of
Customs
G.R. No. L-24247, May 13, 1968
En Banc, Castro, J.

FACTS:
Vessels Rita Maersk and Effie Maersk docked at the Bugo pier at the port of
Cagayan de Oro, for doing which the Collector of Customs of the port levied and
assessed on them the sum of P379.25 as berthing fees. The petitioner Compania
General de Tabacos de Filipinas, as agent of the ships, protested the imposition
and collection of the fees on the ground that the Bugo pier is owned and
operated by the Philippine Packing Corporation, and that under Section 2903
berthing fees are assessable only against a vessel berthing at a Government pier
or wharf. It maintains that such charges can be collected only if the Government
affords pier and wharf facilities in the port. The petitioner contending that it was
exempt from the payment of such fees, asked for a refund of what it had paid.

ISSUE(S):
WON a vessel, engaged in foreign trade, which berths at a privately-owned
wharf or pier is liable to the payment of berthing fees under Section 2903 of the
Tariff and Customs Code.

DECISION:
A vessel, engaged in foreign trade, which berths at a privately-owned wharf
or pier is liable to the payment of berthing fees under Section 2903 of the Tariff and
Customs Code. The governments right to collect berthing charges is not planted
upon the condition that the pier be publicly owned. The statute employs the word
pier - without more. Nothing there said speaks of private or public pier. Where the
law does not exact the nature of ownership as a condition, that condition should
not be read into the law. The law is clear. It thus results that a vessel which as
much as comes within any slip, channel, basin, river or canal under the jurisdiction
of any port in the Philippines is subject to the charge. It is unnecessary that the
vessel be moored to a pier or to a berthed vessel. Port facilities afford benefits to
the vessels mentioned in the statute; and the maintenance and development of
the port, and the purchase, conditioning and replacement of the equipment
thereof - all to enable such vessels to make use of pier or wharf are the concern
of the government. Petitioners vessels enjoy the benefits of such governmental
undertaking. Petitioner should thus contribute thereto.
 Good Day Trading Corporation versus Board of Tax Appeals (BTA)
G.R. No. L-6574, July 31, 1954
En Banc, Montemayor, J.

FACTS:
Good Day Trading Corporation (GDT) imported cases of Chesterfield
cigarettes and sold them to one Buenaventura Isletas companions, the sale
being conditioned on the buyer paying all the specific taxes or filing a surety bond
with the Bureau of Internal Revenue (BIR). When Isletas companions failed to show
evidence that they had either paid the specific taxes or filed the corresponding
surety bond, GDT decided to rescind the sale and made an initial payment of
P8,800 to the Collector of BIR as special taxes and withdraw from storage 40 cases
of cigarettes. The warehouseman, however, refused delivery saying that Isleta and
companions claimed ownership of the whole shipment because they already had
submitted with the BIR certificates of indebtedness (Back Pay) for payment of all
the specific taxes, which according to them have already been approved and
accepted by the Bureau. GDT then asked for the refund of the P8,800 paid by it in
cash, in view of the full payment of the specific taxes on the cigarettes by the
buyers. The Collector of BIR granted the refund and his action was approved by
the Secretary of Finance. No appeal was taken from said decision; but because
the amount involved was more than P5,000 the case was brought before the BTA
for final resolution. The Board not only reversed the decision of the Collector of
Internal Revenue granting the refund of P8,800 but it also rejected the payment of
the entire amount of specific taxes in certificates of indebtedness, and ordered
petitioner to pay the balance in cash.

ISSUE(S):
(1) WON the Board of Tax Appeals had neither authority nor jurisdiction to
order petitioner to pay the whole of said specific taxes. (2) WON Backpay
certificates can be used for the payment of Taxes.

DECISION:
If a shipment stored, pursuant to existing law, in a bonded warehouse under
the custody of the Bureau of Customs is sold, while in storage to another person,
the specific taxes on the shipment may be paid either by the importer or the
buyer, as owner under section 125 of the National Internal Revenue Code. Where
no appeal was taken from the decision of the Collector of Internal Revenue, as
approved by the Secretary of Finance, authorizing the refund of specific taxes
paid by the importer, in view of its full payment by the buyers of the stored
shipment, and because the amount involved exceeded P5,000 the approval of
the Court of Tax Appeals under section 9 of Executive Order No. 401-A becomes
necessary, the latter court should consider only the amount and propriety of the
refund and nothing more.

Whether or not owners of backpay certificates should be given certificates

of indebtedness ostensibly to be used to pay taxes but in reality to be speculated
upon and negotiated by some unscrupulous person, is not for the Court of tax
Appeals to determine, but is wholly the legal concern of the Treasurer of the
Philippines and the Department to be affected after by the use of said certificate
of indebtedness.
 Luzon Brokerage Co., Inc. versus Juan Posadas, jr., as Collector of Internal
Revenue
G.R. No. 27822, December 24, 1927
En Banc, Villa-Real, J.

FACTS:

The present appeal was taken by the plaintiff, the Luzon Brokerage Co., Inc.,
from the judgment of the Court of First Instance of Manila which affirmed the
decision of the Collector of Internal Revenue on the internal-revenue tax imposed
on certain playing cards, upholding the action taken by him under the provisions
of Act No. 3246, and dismissed the complaint, with the costs.

According to the stipulation of facts and the admissions made during the
trial, the boxes of playing cards arrived in the port of Manila on November 20,
1925, at 8 oclock in the morning, but were not declared for payment of the
internal-revenue tax until December 1st of the same year, neither was the amount
of the estimated tax deposited, nor was permission requested to withdraw said
boxes from the customhouse, except on December 2, 1925.

ISSUE(S):
WON the date of the withdrawal of said playing cards from the
customhouse determined the rate of internal-revenue tax to be paid thereon.

DECISION:

The law in force for the payment of internal-revenue taxes on imported

merchandise at the time of the arrival of the playing cards in question, was section
7, Act No. 2835, amending section 1498 of the Administrative Code, and the one
in force on the date upon which the declaration for the payment of the internal-
revenue tax on said imported merchandise was made, was Act No. 3246, which
became effective December 1, 1925.

If the importer or owner of the imported merchandise may select the time in
which he should pay the amount of the internal-revenue tax on the same from the
time it arrives in the port of Manila until it is withdrawn from the customhouse, and
the herein plaintiff-appellant not having taken advantage of the favorable
provisions of section 1498 of the Revised Administrative Code as amended by
section 7 of Act No. 2835, and not having paid the internal-revenue tax while said
section was in force, but only after the new law, Act No. 3246, went into effect, it
cannot now make claim for the recovery of the internal-revenue tax paid under
the law in force at the time payment was made.

Briefly, then, the time for the payment of the internal-revenue tax on
merchandise, from the date of arrival in port until just before it is withdrawn from
the customhouse, depending upon the will of the importer or owner, the law in
force at the time the payment is made must prevail; because, voluntary human
acts are governed by the laws in force at the time they are done, unless there is a
legal provision to the contrary.
TAXATION II

CASE DIGEST ON
EXCISE TAX

SUBMITTED BY:
MAE BERNADETTE M. ESTANISLAO
PLM JD2-1, S.Y. 2016-2017

SUBMITTED TO:
ATTY. PETER M. MANZANO