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EDU, 164 SCRA 320 (1988) Facts of the case: The disputed registration fees were imposed by the commissioner Elevate pursuant to Section 8, RA 4136, the Land Transportation and Traffic Code. PAL as a corporation is engaged in the air transportation business under the legislative franchise. Under its franchise, PAL is exempt from the payment of taxes. In 1971 however, appellee Commissioner elevate issued a regulation requiring all tax exempt entities, among them PAL to pay motor vehicle registration fees. Despite PAL s protest, appellee refused to register the appellant s motor vehicles unless the amounts imposed were paid. PAL thus paid, under protest, P19,529.75 as registration fees of its motor vehicles. After paying under protest, PAL wrote to Commissioner Edu demanding a refund of the amounts paid, invoking Calalang vs. Lorenzo where it was held that motor vehicle registration fees are in reality taxes from the payment of which PAL is exempt by virtue of its legislative franchise. Edu denied request for refund based on Republic v. Phil. Rabbit Bus, that motor vehicle registration fees are regulatory and not revenue measures and, therefore, do not come within the exemption granted to PAL under its franchise. PAL filed the complaint against LTC Commissioner EDu and National Treasurer Carbonell. ISSUE: What is the nature of motor vehicle registration fees? Are they taxes or regulatory fees? RULING ON TAX VS. LICENSE AND REGULATORY FEE SC ruled that motor vehicles registration fees are TAXES. Fees may be regarded as taxes even though they also serve as instruments of regulation because taxation may be made as an implementation of the State s police power. But if the purpose is primarily REVENUE, or if revenue is atleast, one of the real and substantial purposes, then the exaction is properly called a TAX. RULING ON PURPOSES OF TAX, OBJECTIVE OF TAXATION: GENERAL, FISCAL REVENUE The Legislative intent and purpose behind the law requiring owners of vehicles , to pay for their registration is mainly to raise funds for the construction and maintenance of highways and, to a much lesser degree, pay for the operating expenses of the administering agency. It is possible for an exaction to be both a tax and a regulation. License fees are charges, looked to as a source of revenue as well as a means of regulation. The fees may be properly regarded as taxes eventhough they also serve as an instrument of regulation. If the purpose is primarily revenue, or if revenue is atleast one of the real and substantial purposes, then the exaction is properly called a TAX. RULING ON NON-DELEGABILITY OF THE POWER TO TAX It is clear from the provisions of section 73 of Commonwealth Act 123 and section 61 of the Land Transportation and Traffic Code that the legislative intent and purpose behind the law requiring owners of vehicles
he went to court. These are not to be understood as taxes because such fees are very minimal to be revenue-raising. which was granted. but upon the necessity of money for the support of the State. pay for the operating expenses of the administering agency. Moore was appointed as Trustee. 59 (b) of the Code as taxes like the motor vehicle registration fee and chauffers license fee. the property shall pass to Matthew Hanley. a surcharge of 25% should be added. 61. Simply put.74 for the inheritance tax against the estate.to pay for their registration is mainly to raise funds for the construction and maintenance of highways and to a much lesser degree. leaving a will and considerable amount of real and personal properties. if the exaction under RA 4136 were merely a regulatory fee. no one is allowed to object to or resist payment of taxes solely because no personal benefit to him can be pointed out as arising from the tax. and since he was not refuned. The tax and interest due were not paid within ten days after the ate of notice and demand thereof by the Collector.10) and additional fees for change of registration (sec. RULING ON THE THEORY AND BASIS OF TAXATION Taxes are essential to the existence of the government. ISSUE: WON there is delinquency of taxes RULING ON THE DELINQUENCY IN THE PAYMENT OF TAXES YES. Such fees are to go into the expenditures of the Land Transportation Commission as provided for in the last proviso of Sec. The date fixed for the payment of the tax and interest was 11/30/31. until replaced by Lorenzo. the estate became liable for the payment of the surcharge. The plaintiff paid under protest. the beneficiary in this case. Thus they are not mentioned by Sec. The court thought it better to appoint a trustee and 10 years after the death of Hanley. As the tax and interest due were not paid on that date. Demand was made by the Deputy Collector upon Moore in a communication dated 10/16/31. There is a valid delegation to the Land Transportation Office. Motor vehicle registration fees are at present exacted pursuant to the Land Transportation and Traffic Code are actually taxes intended for additional revenues of government even if one-fifth or less of the amount collected is set aside for the operating expenses of the agency administering the program. Proceedings for the probate of his will and the settlement and distribution of his estate were begun in the Court of First Instance of Zamboanga. RA4136 also speaks of other fees such as the special permit fees for certain types of motor vehicles (sec.052. The interest due should be computed from that date and it is error on the part of the defendant to compute it one month later.11). The Collector filed with the CFI for the collection of P2. LORENZO VS. POSADAS 64 PHIL 353 (1937) Facts of the case: Thomas Hanley died in Zamboanga. The obligation to pay taxes rests not upon the privileges enjoyed by or the protection afforded to the citizen by the government. For this reason. The delinquency in payment occurred on the date when Moore became trustee because delivery of the Estate to the trustee was in essence delivery of the same estate to the cestui que trust (fedeicommissary). the imposition on RA 5448 need not be an additional tax. The provision of law requiring the payment of interest in appropriate cases is mandatory. .
the court ruled in favor of Gotamco. ruled that the laws in question are confiscatory and oppressive and declared them INOPERATIVE and WITHOUR FORCE AND EFFECT insofar as petitioners are concerned. it is intended or desired.Commissioner vs. Jewellers questions the constitutionality of certain provisions of the NIRC and Tariff and Customs Code of the Philippines. In inviting bids for the construction of the building. 27 February 1987 Facts of the Case: The World Trade Organization (WHO) decided to construct a building to house its offices. SANTOS 277 SCRA 617 (1997) Facts of the case: Guild of Phil.. CIR VS. The WHO issued a certification that Gotamco should be exempted. while indirect taxes are those that are demanded in the first instance from one person in the expectation and intention that he can shift the burden to someone else. It is their contention that present Tariff and tax structure increases manufacturing costs and render local jewelry manufacturers uncompetitive against other countries. the Contractee s (WHO) exemption from indirect taxes implies that contractor (Gotamco) is exempt from contractor s tax. Raised in the Court of Tax Appeals. The Commissioner opined that a 3% contractor s tax should be due from the contractor. in support of their position. Petitioners also impugn the decision by asserting that there was no showing that the tax laws on jewelry are confiscatory. the contractor s tax is payable by the contractor but it is the owner of the building that shoulders the burden of the tax because the same is shifted by the contractor to the owner as a matter of self-preservation. Hence. Such tax is an indirect tax on the organization. but the Commissioner insisted on the tax. as well as the other United Nations Offices in Manila. Issue: Whether Gotamco is likewise from the contractor s tax in lieu of WHO s exemption from indirect taxes. Herein. RULING ON CLASSIFICATION OF TAXES:AS TO WHO SHOULDERS THE BURDEN AS Direct taxes are those that are demanded from the very person who. ISSUE: whether RTC has authority to pass judgment upon taxation policy of the government. RULING OF THE COURT: . John Gotamco GR L-31092. in comparison to tax rates levied in the country. as the payment thereof or its inclusion in the bid price would have meant an increase in the construction cost of the building. Judge Santos of RTC Pasig. the WHO informed the bidders of its tax exemptions. Petitioner CIR assailed decision rendered by respondent judge contending that the latter has no authority to pass judgment upon the taxation policy of the government. they submitted what they purported to be an exhaustive study of the tax rates on jewelry prevailing in other Asian countries. The contract was awarded to John Gotamco and Sons. should pay them.
This is not to say that RTC has no power whatsoever to declare a law unconstitutional. he says that what impelled him to bring this action were several news reports 2 bannered in a number of broadsheets sometime in September 1997." -Chavez is the same person initiated the prosecution of the Marcoses and their cronies who committed unmitigated plunder of the public treasury and the systematic subjugation of the country's economy. that is whether or not it has been passed according to the provisions laid down by law. But this authority does not extend to deciding questions which pertain to legislative policy. . extent (rate). and thus cannot inquire as to the reasons for its existence. between the government (through PCGG) and the Marcos heirs. These news items referred to (1) the alleged discovery of billions of dollars of Marcos assets deposited in various coded accounts in Swiss banks. be they ongoing or perfected. RTC can only look into the validity of a provision. RTC have the power to declare the law unconstitutional but this authority does not extend to deciding questions which pertain to legislative policy. object (purpose). . coverage (subject) and situs (place) of taxation. on how to split or share these assets. and (2) to compel respondent[s] to make public all negotiations and agreement. and all documents related to or relating to such negotiations and agreement between the PCGG and the Marcos heirs. With the legislature primarily lies the discretion to determine the nature (kind). CHAVEZ vs PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT 299 SCRA 744 (1998) Facts of the Case: -Petitioner Francisco I Chavez (in his capacity as taxpayer. RULING ON THE EXTENT OF LEGISLATIVE POWER TO TAX SC held that it is within the power f the legislature whether to tax jewelry or not. citizen and a former government official) initiated this original action seeking (1) to prohibit and enjoin respondents [PCGG and its chairman] from privately entering into.The policy of the courts is to avoid ruling on constitutional questions and to presume that the acts of the political departments are valid in the absence of a clear and unmistakable showing to the contrary. He claims that any compromise on the alleged billions of including . Marcos . and (2) the reported execution of a compromise. perfecting and/or executing any agreement with the heirs of the late President Ferdinand E. -PETITIONER DEMANDS that respondents make public any and all negotiations and agreements pertaining to PCGG's task of recovering the Marcoses' ill-gotten wealth. relating to and concerning the properties and assets of Ferdinand Marcos located in the Philippines and/or abroad the so-called Marcos gold hoard".
PCGG may not yet be compelled to make any disclosure. 28 [Article II]. The right of the people to information on matters of public concern shall be recognized." since it has a "debilitating effect on the country's economy" that would be greatly prejudicial to the national interest of the Filipino people. this appeal. CTA ordered petitioner to refund said amount to Alhambra. CA affirming such decision. because there is no showing that he has asked the PCGG to disclose the negotiations and the Agreements. on the removals of cigarette products from their place of production during the period Nov. the State adopts and implements a policy of full public disclosure of all its transactions involving public interest RULING OF THE COURT ON WHO MAY QUESTION THE VALIDITY OF A TAX MEASURE OR EXPENDITURE OF TAXES SC finds the petition of Frank Chavez meritorious because as a tax payer. transactions. 1991 private respondent received a letter dated April 26.29. and to documents. 2.ill-gotten wealth involves an issue of "paramount public interest. however.835. and papers pertaining to official acts. 1991. On May 7. shall be afforded the citizen. it was denied by the latter at the same time increasing the amount assessed to P520.62. (Alhambra) is a domestic corporation engaged in the manufacture and sale of cigar and cigarette products. Inc.835. CA AND ALHAMBRA 267 SCRA 557 (1997) Facts of the Case: Alhambra industries.29. that petitioner's action is premature. On December 1. or decisions. Alhambra filed a petition for review with the CTA. ISSUE: whether private respondent's reliance on a void BIR ruling conferred upon the latter a vested right to apply the same in the computation of its ad valorem tax and claim for tax refund . And even if he has. 1991 from the Commissioner of Internal Revenue assessing its deficiency Ad Valorem Tax (AVT) in the total amount of P488. Hence. Access to official records. subject to such limitations as may be provided by law. the people in general have a right to know the transactions or deals being contrived and effected by the government. -PETITIONER INVOKES Sec. though. They claim. since the proposed terms and conditions of the Agreements have not become effective and binding. Alhambra filed protest against amount assessed by the CIR. hence. -RESPONDENT ANSWERS that they do not deny forging a compromise agreement with the Marcos heirs. 7 [Article III]. CIR VS. Sec. The Agreement between PCGG and Marcos is Null and void because contrary to law and constitution. inclusive of increments.396. 1990 to January 22. as well as to government research data used as basis for policy development. he has the legal personality to file the petition since ill-gotten wealth belongs to the Filipino people. despite payment under protest the amount of P520. 1993. Subject to reasonable conditions prescribed by law.
private respondent received from Commissioner of Internal Revenue (CIR) a demand letter dated 3 June 1983. The IPC is a Philippine unit engaged in social science studies of Philippine society and culture. On 8 July 1983. The Commissioner should have determined first if private respondent was covered by Section 205. CA. affirmed the decision of the Court of Tax Appeals. Court of Appeals. and an assessment dated 27 June 1983 in the sum of P1. there leaving no room for interpretation. No pronouncement as to cost. the respondent court set aside respondent s decision. One auxiliary unit is the Institute of Philippine Culture (IPC). as where injustice will result to the taxpayer. assessing private respondent the sum of P174. Denying said tax liabilities. The failure of private respondent to consult petitioner does not imply bad faith on the part of the former.97 for alleged deficiency contractor s tax. private respondent requested for a reconsideration or reinvestigation of the modified assessment.141. CTA AND ATENEO GR 115349. While the petition was pending before the respondent court. It is obviously both illogical and impractical to determine who are exempted without first determining who are covered by the aforesaid provision. 18 April 1997 (271 SCRA 605) Facts of the Case Private respondent.55 to P46.RULING ON EQUAL PROTECTION OF THE LAWS The government is not stopped from collecting taxes legally due because of mistake/errors of its agents. petitioner issued a final decision dated 3 August 1988 reducing the assessment for deficiency contractor s tax from P193.516. which has no legal personality separate and distinct from that of private respondent.41 exclusive of surcharge and interest for the fiscal year ended 31 March 1978. At the same time.043.837 for alleged deficiency income tax. and canceling the deficiency contractor s tax assessment in the amount of P46. Occasionally. Held: The Commissioner erred in applying the principles of tax exemption without first applying the well-settled doctrine of strict interpretation in the imposition of taxes. Issues: y y Whether the private respondent has the burden of proof in the tax case. On 27 April 1994. On 17 March 988. non-profit educational institution with auxiliary units and branches all over the Philippines. Unsatisfied. both for the fiscal year ended 31 March 1978.475. the Ateneo de Manila University.41. private respondent sent petitioner a letter-protest and subsequently filed with the latter a memorandum contesting the validity of the assessments. in CA-GR SP 31790. petitioner rendered a letter-decision canceling the assessment for deficiency income tax but modifying the assessment for deficiency contractor s tax by increasing the amount due to P193. As regards. private foundations and government agencies. Whether the private respondent is taxable as an independent contractor. On 12 July 1993.475. this admits of exceptions in the interest of justice and fair play. is a non-stock. it accepts sponsorships for its research activities from international organizations. petitioner s argument the private respondent should have made consultations with it before private respondent used the computation mandated by BIR ruling 473-88 suffice it to state that the BIR ruling was clear and categorical.516. CIR VS. applying the rule of strict . Not in accord with said decision. it filed in the respondent court a petition for review of the said letter-decision of the petitioner. exclusive of surcharge and interest.55. petitioner came to Supreme Court via a petition for review.
Ateneo IPC is an auxillary unit performing the act of independent contractor. to public service. before asking Ateneo to prove its exemption therefrom. we can only agree with both the Court of Tax Appeals and the Court of Appeals that education and not profit is motive for undertaking the research projects. the funds received by Ateneo s IPC are not given in the concept of a fee/price in exchange for the performance of a service or delivery of an object. The doctrine in the interpretation of tax laws is that a statute will not be construed as imposing a tax unless it does so clearly. The Supreme Court denied the petition and affirmed the assailed Decision of the Court of Appeals. Funds received by the Ateneo de Manila University are technically not a fee. They may however fall as gifts or donations which are tax-exempt as shown by private respondent s compliance with the requirement of Section 123 of the National Internal Revenue Code providing for the exemption of such gifts to an educational institution. The research activities of the IPC is done in pursuance of maintaining Ateneo University s statuts and not in the course of an independent business of selling such research without profit in mind. expressly. and unambiguously.interpretation of laws imposing taxes and other burdens on the populace. Tax cannot be imposed without clear and express words for that purpose. In case of doubt. The Court ruled that the private respondent is not a contractor selling its services for a fee but an academic institution conducting these researches pursuant to its commitments to education and. such statutes are to be construed most strongly against the government and in favor of the subjects or citizens because burdens are not to be imposed nor presumed to be imposed beyond what statutes expressly and clearly import. RULING ON PROHIBITION AGAINST TAXATION OF NON-STOCK. Accordingly. the general rule of requiring adherence to the letter in construing statutes applies with peculiar strictness to tax laws and the provisions of a taxing act are not to be extended by implication. In the present case. following the rule of construction where the tax exemptions are to be strictly construed against the taxpayer . Ateneo s Institute of Philippine Culture never sold its services for a fee to anyone or was ever engaged in a business apart from and independently of the academic purposes of the university. NON-PROFIT EDUCATIONAL INSTITUTION There is no evidence that Ateneo s Institute of Philippine Culture ever sold its services for a fee to anyone or was ever engaged in business apart from and independently of the academic purposes of the university. ultimately. . For the institute to have tenaciously continued operating for so long despite its accumulation of significant losses.
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