1. Alejandro Ty v. Hon. Aurelio C.

Trampe
GR No. 117577,
December 1, 1995 

FACTS: The Municipal Assessor of Pasig sent a notice of assessment to petitioners for certain
real properties located in Pasig City. The assessor having denied the letter of petitioner for
reconsideration, they filed a petition with the RTC to declare the tax assessment void and
enjoin the collection of taxes based on the assessment. The RTC denied the petition for lack of
merit. The petitioners argue that the assessment is void for failure to comply with PD 921 which
provides for the preparation of schedule of values within Metro Manila to be prepared jointly
by the City Assessors of the districts within said area. However, respondents argue that PD 921
was impliedly repealed by the Local Government Code of 1991 as the same vests the authority
to assess with the Municipal/City Assessors. 

ISSUE: W/N RA 7160 (LGC of 1991) repealed the provisions of PD 921

RULING: No. PD 921 is still a good law and the schedule of values prepared solely by the
municipal assessor is illegal and void. If the intention of the legislature was to abrogate PD 921,
it would have included it in such repealing clause. An implied repeal will not be allowed unless
it is convincingly and unambiguously demonstrated that the two laws are clearly repugnant &
inconsistent that they cannot co-exist. While RA 7160 covers almost governmental functions
delegated to local governments units, PD 921 embraces only the Metropolitan Manila Area and
is limited especially to the assessment and collection of real estate (& some other taxes).
Therefore, it is obvious that harmony in these provisions is not only possible, but in fact
desirable, necessary and consistent with the legislative intent & policy. By this harmonization,
the preamble of both statutes shall be fulfilled.

2. Drilon v. Lim
G.R. No. 112497
August 4, 1994

Facts:
Then Secretary of Justice Franklin M. Drilon, pursuant to the authority granted upon him by
Section 187 of the LGC and upon appeal of concerned parties, declared the Manila Revenue 
Code null and void for non-compliance with the prescribed procedure in thge enactment of
local  tax ordinances and for containing provisions contrary to law and public policy. Upon
appeal to the RTC, the trial judge reversed the order of petitioner and, in addition, declared
Section 187 of the LGC unconstitutional as it gave the Secretary of Justice the power of control 
over local governments in violation of the principle of local autonomy mandated by the 
Constitution. The RTC ruled that the Executive only had the power of supervision and not 
control
The principal issue in this case is the constitutionality of Section 187 of the Local   Government
Code. 

Held:
The SC overruled the trial court insofar as it declared Section 187 unconstitutional. The power
of control encompasses the power to lay down the rules in the accomplishment of an act. If
they are not followed, the one in control may order the act done, re-done, or do it himself. On
the other hand, the power to supervise only entails a determination of WON the rules were
followed and to have the work done or re-done in accordance with the prescribed rules.
Contrary to the holding of the lower court, the SC said that the provision only gave the
Secretary of Justice the power to supervise, not control, in that the Secretary of Justice could
only determine the constitutionality or legality of the local tax ordinance and revoke them on
such grounds. The provision did not em power the Secretary to substitute his own judgment for
the judgment of the LGU; the Secretary was not authorized by Section 187 to determine
whether the law was wise or reasonable or otherwise a generally bad law. He was given no
discretion in the matter. That notwithstanding, the SC agreed with the trial court in that the
procedural requirements for the passage of the ordinance were fulfilled. The initial decision of
the Secretary, it said, was a result of the insufficient time it gave to the respondents to procure
the necessary evidence of such procedural compliance. The Manila Revenue Code was upheld.
(Note: No mention was made in the final decision regarding the provisions contrary to law and
public policy earlier cited by the Secretary as additional grounds.)

3. City of Manila, et al vs. Judge Colet, and Malaysian Airline System

G.R. No. 120051
December 10, 2014

Facts:
The Manila Revenue Code was enacted by the City Council of Manila. Section 21(B) of said Code
stated that, a tax of three percent (3%) per annum on the gross sales or receipts of the
preceding calendar year is hereby imposed on the gross receipts of keepers of garages, cars for
rent or hire driven by the lessee, transportation contractors, persons who transport passenger
or freight for hire, and common carriers by land, air or water, except owners of bancas and
owners of animal-drawn two-wheel vehicle. Shortly thereafter, Ordinance No. 7807 was
enacted by the City Council of Manila which imposed a lower tax rate on the businesses from
THREE PERCENT 3% to a tax of FIFTY PERCENT (50%) of ONE PERCENT (1%) per annum. Various
businesses that were covered by the ordinance assailed the constitutionality of the ordinance.
They claim that one of the common limitations on the power to tax of LGUs is Section 133(j) of
the Local Government Code which states that the taxing powers of the LGUs shall not extend to
the transportation business. It was further claimed that in case of any doubt, any tax ordinance
or revenue measure shall be construed strictly against the LGU enacting it and liberally in favor
of the taxpayer, for taxes, being burdens, are not to be presumed beyond what the applicable
statute expressly and clearly declares. The City of Manila contended that it is irrelevant which
of Sections 133(j) and 143(h) of the LGC is the special or general provision since there is an
exempting clause in Section 133, that is, “Unless otherwise provided herein,” which means that
even if the businesses enumerated therein are exempted from the levy of local tax, if there is a
provision to the contrary, such as Section 143(h), the Sanggunian concerned could still impose
the local tax. To rule otherwise and adopt the construction put forward by the opposing parties
would render Section 143(h) of the LGC a hollow provision.

ISSUE: Is the tax imposed by the ordinance valid?

RULING: No. Among the common limitations on the taxing power of LGUs is Section 133(j) of
the LGC, which states that “unless otherwise provided herein,” the UST Law Review, Vol. LIX,
No. 1, May 2015 taxing power of LGUs shall not extend to “taxes on the gross receipts of
transportation contractors and persons engaged in the transportation of passengers or freight
by hire and common carriers by air, land or water, except as provided in this Code.” Section
133(j) of the LGC clearly and unambiguously proscribes LGUs from imposing any tax on the
gross receipts of transportation contractors, persons engaged in the transportation of
passengers or freight by hire, and common carriers by air, land, or water. Yet, confusion arose
from the phrase “unless otherwise provided herein,” found at the beginning of the said
provision. In contrast, Section 143 of the LGC defines the general power of the municipality (as
well as the city, if read in relation to Section 151 of the same Code) to tax businesses within its
jurisdiction. The omnibus grant of power to municipalities and cities under Section 143(h) of the
LGC cannot overcome the specific exception/exemption in Section 133(j) of the same Code. This
is in accord with the rule on statutory construction that specific provisions must prevail over
general ones. In the case at bar, the sanggunian of the municipality or city cannot enact an
ordinance imposing business tax on the gross receipts of transportation contractors, persons
engaged in the transportation of passengers or freight by hire, and common carriers by air,
land, or water, when said sanggunian was already specifically prohibited from doing so. Any
exception to the express prohibition under Section 133(j) of the LGC should be just as specific
and unambiguous. Section 5(b) of the LGC itself states that in case of doubt, any tax ordinance
or revenue measure shall be construed strictly against the local government unit enacting it,
and liberally in favor of the taxpayer.

4. Batangas City v. Pilipinas Shell

G.R. No. 187631
July 8, 2015

FACTS: Batangas City sent Shell a notice of assessment demanding the payment of
P92,373,720.50 and P312,656,253.04 as business taxes for its manufacture and distribution of
petroleum products. In addition, Shell was required and assessed to pay the amount of
P4,299,851.00 as Mayor's Permit Fee based on the gross sales of its Tabagao Refinery.
Shell protested the assessment saying that it is not liable to pay the amount and that the
Mayor's Permit Fees are exorbitant, confiscatory, arbitrary, unreasonable and not
commensurable with the cost of issuing a license. Shell paid under protest.

ISSUE: Does Batangas have the power to collect taxes from Shell on its manufacture and
distribution of petroleum products?

HELD: No, Batangas does not have said power under the Local Government Code.
Section 133 of the LGC puts a limitation on LGUs power to tax. They shall have no power to levy
taxes, fees or charges on petroleum products. Thus, the omnibus grant of power to LGUs under
Section 143(h) of the LGC cannot overcome the specific exception or exemption in Section
133(h) of the same Code.

5. Municipality of Cainta vs. City of Pasig and Uniwide

G.R. No. 176703
June 28, 2017

FACTS: Petitioner Uniwide does business on parcels of land covered by Transfer Certificate of

Title (TCT) Nos. 72983, 74003, and PT-74468 (subject properties). The location of the parcels of
land is indicated as being in Pasig.

In 1989, Uniwide applied for and was issued a building permit by Pasig for its building. Uniwide
also secured the requisite Mayor's Permit for its business from Pasig and consequently paid
thereto its business and realty taxes, fees, and other charges from 1989 to 1996.

However, beginning 1997, Uniwide did not file any application for renewal of its Mayor's Permit
in Pasig nor paid the local taxes thereto. Instead, it paid local taxes to Cainta after the latter
gave it notice, supported by documentary proof of its claims, that the subject properties were
within Cainta's territorial jurisdiction.

ISSUE:
1. For local taxes, whether the location of property should be determined by that indicated
in the TCT despite documents showing otherwise;

HELD: For purposes of complying with local tax liabilities, the taxpayer is entitled to rely on the
location stated in the certificate of title.Under the Local Government Code (LGC), local business
taxes are payable for every separate or distinct establishment or place where business subject
to the tax is conducted, which must be paid by the person conducting the same. Section 150
therein provides the situs of taxation.The tax thereon shall accrue and shall be paid to the
municipality where such branch or sales outlet is located.
Since it is clear that local business taxes and realty taxes are to be collected by the local
government unit where the business is conducted or the real property is located, the primordial
question is: how is location determined for purposes of identifying the LGU entitled to collect
taxes.

6. City of Pasig vs. Manila Electric Company

G.R. No. 181710
March 7, 2018

FACTS:
 1992: The Sangguniang Bayan of the Municipality of Pasig enacted Ordinance No.
25,1992 which imposed a franchise tax on all business venture operations carried out
through through a franchise within the municipality.
 1995: The Municipality of Pasig was converted into a highly urbanized city by virtue
ofR.A. 7829.R.A. 7829
 2001: The Treasurer’s Office of the City Government of Pasig informed MERALCO, a
grantee of a legislative franchise, that it is liable to pay taxes for the period 19   pay taxes
for the periods 1996 to 1999 pursuant to Municipal Ordinance No. 25. The city,
thereafter, on two separate occasions, demanded payment of the said tax exclusive of
penalties.
 MERALCO protested the validity of the demand and subsequently instituted an action
before the RTC for the annulment of the said demand with prayer for a temporary
restraining order and a writ of preliminary injunction.
 RTC: ruled in favor of the City of Pasig. Upon appeal, CA y of Pasig. Upon appeal, CA
reversed the RTC ruling. Hence, this instant appeal.

ISSUE: 
a. Whether or not Section 32 of Municipal Ordinance No. 25 is void for being in direct
contravention with Section 142 of the LGC (prohibitory law). YES

RATIO:
Unlike a city, a municipality is bereft of authority to levy franchise tax, the ordinance enacted
for that purpose is void. The conversion of the municipality into a city does not lend validity to
the void ordinance. Neither does it authorize the collection of the tax under the said ordinance. 

It is not disputed that at the time the ordinance in question was enacted in 1992, the local
government of Pasig, then a municipality, had no authority to levy franchise tax. Article 5 of the
Civil Code explicitly provides, "acts executed against the provisions of mandatory or prohibitory
laws shall be void, except when the law itself authorizes their validity." 
Section 32 of Municipal Ordinance No. 25 is, thus, void for being in direct contravention with
Section 142 of the LGC. Being void, it cannot be given any legal effect. An assessment and
collection to the said ordinance is, perforce, legally infirm.

7. City of Manila vs. Cosmos Bottling Corporation

G.R. No. 196681
June 27, 2018

Facts:
City of Manila assessed [Cosmos] local business taxes and regulatory fees in the total amount of
P1,226,781.05, as contained in the Statement of Account dated Janu Account dated January 15,
2007. 

[Cosmos] protested the assessment through a letter dated January 18, 2007, arguing that Tax
Ordinance Nos. 7988 and 8011, amending the Revenue Code of Manila (RCM), have been
declared null and void. [Cosmos] also argued that the collection of local business tax under
Section 21 of the RCM in in addition to Section 14 of the same code constitutes double taxation.

Issue: 
WON the assessment against Cosmos under Sec 21 and sec 14 of RC1 and sec 14 of RCM
constitutes double

Ruling:
The collection of taxes under both Sections 14 and 21 of the Revenue Code of Manila
constitutes double taxation. While the city of Manila could impose against Cosmos a
manufacturer's tax under Section 14 of Ordinance No. 7794, or the Revenue Code of Manila, it
cannot at the same time impose the tax under Section 21 of the same code; otherwise, an
obnoxious  double taxation  would set  in. 

The petitioners erroneously argue that double taxation is wanting for the reason that the tax
imposed under Section 21 is imposed on a different object and of a different nature as that in
Section 14. The argument is not novel. Indifferent nature as that in Section 14. The argument is
not novel. In The City of Manila v. Coca-Cola Bottlers, the Court explained––[T]here 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: 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.
 8. NPC vs. City of Cabanatuan
G.R. No. 177332
October 1, 2014

FACTS: Respondent assessed the NAPOCOR a franchise tax amounting to P808,606.41,

representing 75% of 1% of its gross receipts for 1992. NAPOCOR refused to pay, arguing that it
is exempt from paying the franchise tax. Consequently, the City filed a complaint before the
Regional Trial Court of Cabanatuan City, demanding NAPOCOR to pay the assessed tax due plus
25% surcharge and interest of 2% per month of the unpaid tax, and costs of suit. The trial court
dismissed the case for lack of merit which the Court of Appeals reversed holding that petitioner
is liable for franchise tax. The decision then became final and executory which the City sought
for the execution of the judgment and the subsequent payment of the tax liability. However,
NAPOCOR disputes the interpretation of the City when it imposed the 25% surcharge penalty
on a yearly basis instead of imposing it on the total basic tax due for the taxable years 1992 to
2002. Petitioner holds that in doing such, the trial court have allegedly varied and/or exceeded
the terms of the judgment sought to be executed. 

ISSUE: What did the Court of Appeals meant by the phrase "in all cases, topay a surcharge of
25% of the tax due and unpaid" in the dispositive portion. 

RULING:
The excise taxes are still due, even though the articles are removed merely for storage in some
other place and are not actually sold or consumed." The excise tax based on weight, volume
capacity or any other physical unit of measurement is referred to as "specific tax." If based on
selling price or other specified value, it is referred to as "ad valorem" tax.

The surcharge is a civil penalty imposed once to late payment of a tax. The yearly accrual of the
25% surcharge is unconscionable. There is nothing in the Court of Appeals' decision that would
justify the interpretation that the statutory penalty of 25% surcharge should be charged yearly
from due date until full payment. If that was the intention of the Court of Appeals, it should
have so expressly stated in the dispositive portion of its decision. It is a fundamental rule that
the execution cannot be wider in scope or exceed the judgment or decision on which it is
based; otherwise, it has no validity. We cannot impose a penalty for nonpayment of a tax
greater than what the law provides, to do so would amount to a deprivation of property
without due process of law.

9. China Banking Corporation vs. City Treasurer of Manila, G.R. No. 204117, July 1, 2015

FACTS:
In January 2007, the City Treasurer of Manila assessed China Bank Corporation (CBC) a tax
liability consisting of local business tax, business permits, and other fees for taxable year 2007.
On 15 January 2007, CBC paid the assessed amount and protested in a letter the imposition of
additional business tax.

On 27 March 2007, CBC reiterated its protest and, citing the inaction of the City Treasurer on its
protest, demanded for the refund of the tax paid under protest. On 17 April 2007, it filed a
judicial claim for refund with the RTC.

ISSUE:
Whether or not petitioner’s protest against the assessment was properly filed.

HELD:
YES. The law does not prescribe any formal requirement to constitute a valid protest. It is
sufficient if what has been filed contains the spontaneous declaration made to acquire or keep
some right or to prevent an impending damage. Accordingly, a protest is valid so long as it
states the taxpayer’s objection to the assessment and the reasons therefor.

In this case, CBC was able to properly file its protest against the assessment of the City
Treasurer when it filed its letter on 15 January 2007 questioning the imposition while paying
the assessed amount. In the said letter, the petitioner was unequivocal in its objection , stating
that it took exception to the assessment made by the City Treasurer and its reasons for doing
so.

Lung Center of the Philippines v. Quezon City,

GR  144104
June 29,

FACTS: The petitioner Lung Center of the Philippines is the registered owner of a parcel of land
located at Quezon City and erected in the middle is a hospital known as the Lung Center of the
Philippines.

The petitioner accepts paying and non-paying patients. It also renders medical services to out-
patients, both paying and non-paying, as well as private leases.

Both the land and the hospital building of the petitioner were assessed for real property taxes
in the amount of P4,554,860 by the City Assessor of Quezon City.

The petitioner filed a Claim for Exemption5 from real property taxes with the City Assessor,
stating that it is a charitable institution within the context of Section 28(3), Article VI of the
1987 Constitution.

ISSUES:  whether the real properties of the petitioner are exempt from real property taxes.
RULING: 
No. Those portions of its real property that are leased to private entities are not exempt from
real property taxes as these are not actually, directly and exclusively used for charitable
purposes.

The petitioner failed to prove that the entirety of its real property is actually, directly and
exclusively used for charitable purposes. While portions of the hospital are used for the
treatment of patients and the dispensation of medical services to them, whether paying or non-
paying, other portions thereof are being leased to private individuals for their clinics and a
canteen.

Hence, the portions of the land leased to private entities as well as those parts of the hospital
leased to private individuals are not exempt from such taxes. On the other hand, the portions
of the land occupied by the hospital and portions of the hospital used for its patients, whether
paying or non-paying, are exempt from real property taxes.

2.Mactan Airport Authority vs Marcos

GR NO. 120082
September 11, 1996

FACTS
MCIAA enjoyed the privilege of exemption from payment of realty taxes in accordance with
Section 14 of its Charter. However, the Office of the Treasurer of the City of Cebu, demanded
payment for realty taxes on several parcels of land belonging to the petitioner in the total
amount of P2,229,078.79. Petitioner objected to such demand for payment as baseless and
unjustified. Respondent City refused to cancel and set aside petitioner’s realty tax account,
insisting that the MCIAA is a government-controlled corporation whose tax exemption privilege
has been withdrawn by virtue of Sections 193 and 234 of the Local Government Code that took
effect on January 1, 1992.

ISSUE
Whether the petitioner is a taxable person

RULING
No. MCIAA cannot claim that it was never a “taxable person” under its Charter. It was only
exempted from the payment of real property taxes.  The grant of the privilege only in respect of
this tax is conclusive proof of the legislative intent to make it a taxable person subject to all
taxes, except real property tax.

3. Manila International Airport Authority vs CA

GR no. 155650
July 20, 2006
FACTS
MIAA received Final Notices of Real Estate Tax Delinquency from the City of Parañaque for the
taxable years 1992 to 2001 on the ground that an international airport is not among the
exceptions mentioned in Section 193 of the Local Government Code. Thus, respondents assert
that MIAA cannot claim that the Airport Lands and Buildings are exempt from real estate tax.

ISSUE
WON Airport Lands and Buildings of MIAA are exempt from real estate tax under existing laws?

RULING
Yes. The Airport Lands and Buildings of MIAA are property of public dominion and therefore
owned by the State or the Republic of the Philippines. The Airport Lands and Buildings are
devoted to public use because they are used by the public for international and domestic travel
and transportation. The fact that the MIAA collects terminal fees and other charges from the
public does not remove the character of the Airport Lands and Buildings as properties for public
use.

City Government of Quezon City v. Bayan Telecommunications, Inc.

G.R. No.162015
March 6, 2006

FACTS:

Respondent Bayan Telecommunications, Inc. (Bayantel) is a legislative franchise holder under

Republic Act (R.A.) No. 3259 (1961) to establish and operate radio stations for domestic
telecommunications, radiophone, broadcasting and telecasting.  Section 14 (a) of R.A. No. 3259
states: “The grantee shall be liable to pay the same taxes on its real estate, buildings and
personal property, exclusive of the franchise, xxx”. In 1992, R.A. No. 7160, otherwise known as
the “Local Government Code of 1991” (LGC) took effect. Section 232 of the Code grants local
government units within the Metro Manila Area the power to levy tax on real properties.

Barely few months after the LGC took effect, Congress enacted R.A. No. 7633, amending
Bayantel’s original franchise. The Section 11 of the amendatory contained the following
tax provision: “The grantee, its successors or assigns shall be liable to pay the same taxes on
their real estate, buildings and personal property, exclusive of this franchise, xxx“. In 1993, the
government of Quezon City enacted an ordinance otherwise known as the Quezon City
Revenue Code withdrawing tax exemption privileges.

ISSUE:
Whether or not Bayantel’s real properties in Quezon City are exempt from real property taxes
under its franchise.

RULING:

YES. A clash between the inherent taxing power of the legislature, which necessarily includes
the power to exempt, and the local government’s delegated power to tax under the aegis of
the 1987 Constitution must be ruled in favor of the former. The grant of taxing powers to LGUs
under the Constitution and the LGC does not affect the power of Congress to grant exemptions
to certain persons, pursuant to a declared national policy. The legal effect of the constitutional
grant to local governments simply means that in interpreting statutory provisions on municipal
taxing powers, doubts must be resolved in favor of municipal corporations.

STA. LUCIA REALTY & DEVELOPMENT, INC. V. CITY OF PASIG

G.R. NO. 166838 (667 PHIL 171-189)
JUNE 15, 2011

FACTS: 

Petitioner Sta. Lucia Realty & Development, Inc. (Sta. Lucia) is the registered
owner of several parcels of land with Transfer Certificates of Title (TCT) Nos. 39112, 39110 and
38457, all of which indicated that the lots were located in Barrio Tatlong Kawayan, Municipality
of Pasig (Pasig).

On January 31, 1994, Cainta filed a petition for the settlement of its land boundary dispute with
Pasig before the RTC, Branch 74 of Antipolo City (Antipolo RTC). This case, 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 (the subject properties).

ISSUE: 

WON THE ISSUE ON GEOGRAPHICAL LOCATION OF THE PROPERTY IS PREJUDICIAL QUESTION

BEFORE A LGC MAY COLLECT REAL PROPERTY TAXES.

HELD:

YES. 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.
Accentuating on the importance of delineating territorial boundaries, this Court, in Mariano, Jr.
v. Commission on Elections said:
The importance of drawing with precise strokes the territorial boundaries of a local unit of
government cannot be overemphasized. The boundaries must 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.

Ty v Trampe
G.R. No. 117577
[December 1, 1995]

FACTS:

Petitioner Alejandro B. Ty is a resident of and registered owner of lands and buildings in the
Municipality (now City) of Pasig, while petitioner MVR Picture Tube, Inc. is a corporation duly
organized and existing under Philippine laws and is likewise a registered owner of lands and
buildings in said Municipality. Respondent Assessor sent a notice of assessment respecting
certain real properties of petitioners located in Pasig, Metro Manila.

Petitioners assail the legality of the Schedule of Market Values used as basis for the new tax
assessments being enforced by respondents Municipal Assessor and Municipal Treasurer of
Pasig. Petitioners through counsel "requested the Municipal Assessor to reconsider the subject
assessments" The schedule of market values and the assessments prepared solely by the
municipal assessor, in accordance with LGC of 1991 (RA7160) are invalid and illegal because the
said Code did not effectively repeal the previous law on the matter (PD 921) PD 921 was not
expressly repealed nor impliedly repealed by LGC of 1991(RA 7160) and is therefore the
applicable statute.

ISSUE:

WON Republic Act No. 7160, otherwise known as the Local Government Code of 1991, repealed
the provisions of Presidential Decree No. 921;

RULING:
The foregoing partakes of the nature of a general repealing provision. It is a basic rule of
statutory construction that repeals by implication are not favored.
An implied repeal will not be allowed unless it is convincingly and unambiguously demonstrated
that the two laws are so clearly repugnant and patently inconsistent that they cannot co-exist.
This is based on the rationale that the will of the legislature cannot be overturned by the
judicial function of construction and interpretation. Courts cannot take the place of Congress in
repealing statutes. Their function is to try to harmonize, as much as possible, seeming conflicts
in the laws and resolve doubts in favor of their validity and co-existence.

The two laws are not co-extensive and mutually inclusive in their scope and purpose.

CALLANTA VS. OMBUDSMAN

G.R. Nos. 115253-74
[January 30, 1998]

FACTS:
In several similarly worded letter-complaints dated December 19, 1991, the City of Cebu
simultaneously filed criminal and administrative charges against the above-enumerated officers
and staff of the City Assessor's Office for "violations of Section 106 of the Real Property Tax
Code[,] for gross negligence or willful under-assessment of real properties within the city's
taxing jurisdiction and for violation of Sec. 3 (e) of R.A. 3019, otherwise known as the Anti-Graft
and Corrupt Practices Act[,] for the act of causing undue injury to the City Government by giving
private persons unwarranted benefits, advantages or preferences in the discharge of their
official and administrative functions through manifest partiality, evident bad faith or gross
inexcusable negligence by reassessing the real properties of taxpayers without any authority
whatsoever, thereby resulting in the reduction of tax assessments to the prejudice of the city
government x x x." Specifically, the administrative charges were for "dishonesty and/or serious
irregularities in the performance of duties/public functions."

ISSUE:
WON the assessor acted illegally and in grave misconduct by adjusting/correcting the valuations
of the tax declarations subject of the complaints.

RULING:
To repeat, Sec. 22 clearly provides three (3) occasions when assessments of real properties may
be made by the local assessor. In the case at bar, the second instance gave rise to the revised
assessed values for which the property owners subsequently sought reconsideration. Sec. 30 of
the same Code is equally clear that the aggrieved owners should have brought their appeals
before the LBAA. Unfortunately, despite the advice to this effect contained in their respective
notices of assessment, the owners chose to bring their requests for a review/readjustment
before the city assessor, a remedy not sanctioned by the law. To allow this procedure would
indeed invite corruption in the system of appraisal and assessment. It conveniently courts a
graft-prone situation where values of real property may be initially set unreasonably high, and
then subsequently reduced upon the request of a property owner. In the latter instance,
allusions of a possible covert, illicit trade-off cannot be avoided, and in fact can conveniently
take place. Such occasion for mischief must be prevented and excised from our system.

MACTAN CEBU INTERNATIONAL AIRPORT AUTHORITY vs. HON. FERDINAND J. MARCOS

G.R. No. 120082
[September 11, 1996]

FACTS:

Under its charter, the MCIAA shall be exempt from realty taxes imposed by the National
Government or any of its political subdivisions, agencies and instrumentalities. In 1994, the
Local Government Unit (LGU) of Cebu City demanded payment for realty taxes on several
parcels of land belonging to MCIAA.

MCIAA objected to the same as baseless and unjustified, claiming its exemption under its
charter. Also, it cites the LGC stating that LGUs taxing power does not extend to taxes, fees or
charges of any kind on the National Government, its agencies and instrumentalities, and local
government units.

ISSUES:
Is MCIAA exempt from realty taxation?

HELD:

No, MCIAA is not exempt from realty tax by the City of Cebu. First, its tax exemption under its
charter has already been withdrawn. Second, while it is true that LGUs cannot levy tax on
property of the Republic of the Philippines or the National Government (outside Metro Manila),
the beneficial use of property should not be given to a taxable person.

Here, MCIAA is already the owner of the parcels of land in question. Hence, even the exemption
under the LGC cannot apply.
Realty Tax

Testate Estate of Concordia Lim vs. City of Manila

GR No. 90639
[February 21, 1990]
FACTS:

The late Lim obtained a real estate loan from GSIS and mortgaged 2 parcels of land which was
foreclosed due to nonpayment of the loan. GSIS, being the highest bidder, bought the property.
No right of redemption was exercised and title was issued to GSIS in 1977. However, the Board
of Trustees of GSIS granted the estate of Lim the right to repurchase and a Deed of Sale was
executed in 1979.

The City Treasurer of Manila required plaintiff to pay the real estate taxes due on the properties
for 1977, 1978 and 1979 and it was paid under protest. A case was filed by the plaintiff against
the GSIS to recover the said payment.

ISSUE:

Who is liable to pay the real estate taxes for the years 1977, 1978, and first quarter of 1979?

RULING:

The one liable is the person who has the actual beneficial use and possession of the
property.

In real estate taxation, unpaid taxes attaches to the property and is chargeable against the
taxable person who has the actual beneficial use and possession of it regardless of whether or
not he is the owner. In this case, to impose the real property tax on the estate which is neither
the owner nor the beneficial user of the property during the designated periods would be
contrary to law and unjust. If plaintiff intended to assume the taxes for the prior periods, the
contract should have specifically stated the same. Hence the tax assessed and collected from
plaintiff is not valid.

MINDANAO BUS COMPANY v. THE CITY ASSESSOR & TREASURER and the BOARD OF TAX
APPEALS of Cagayan de Oro City
G.R. No. L-17870
[September 29, 1962]

FACTS:

Petitioner is a public utility solely engaged in transporting passengers and cargoes by motor
trucks. It owns a land where it maintains and operates a garage for its TPU motor trucks; a
repair shop; blacksmith and carpentry shops, and with machineries placed therein, its TPU
trucks are made; body constructed; and same are repaired in a condition to be serviceable in
the TPU land transportation business it operates.
The machineries have never been or were never used as industrial equipment to produce
finished products for sale, nor to repair machineries, parts and the like offered to the general
public indiscriminately for business or commercial purposes.

Respondent City Assessor of Cagayan de Oro City assessed at P4,400 petitioner’s above-
mentioned equipment. Petitioner appealed the assessment to the respondent Board of Tax
Appeals on the ground that the same are not realty. The Board of Tax Appeals of the City
sustained the city assessor, so petitioner herein filed with the Court of Tax Appeals a petition
for the review of the assessment.

ISSUE:

Should the tools and equipment in the petitioner company’s repair shop be considered
immovable taxable real properties?

RULING:

NO. Movable equipment to be immobilized in contemplation of the law must first be “essential
and principal elements” of an industry or works without which such industry or works would be
“unable to function or carry on the industrial purpose for which it was established.” The tools
and equipment are not essential and principle municipal elements of petitioner’s business of
transporting passengers and cargoes by motor trucks. They are merely incidentals — acquired
as movables and used only for expediency to facilitate and/or improve its service. The
transportation business could be carried on without the repair or service shop if its rolling
equipment is repaired or serviced in another shop belonging to another.

Caltex (Philippines) Inc., vs. Central Board of Assessment Appeals and City Assessor of Pasay
G.R. No. L-47943
[May 31, 1982]

FACTS:

This case is about the realty tax on machinery and equipment installed by Caltex (Philippines)
Inc. in its gas stations located on leased land. The machines and equipment consists of
underground tanks, elevated tank, elevated water tanks, water tanks, gasoline pumps,
computing pumps, water pumps, car washer, car hoists, truck hoists, air compressors and
tireflators. The city assessor of Pasay City characterized the said items of gas station equipment
and machinery as taxable realty. The realty tax on said equipment amounts to P4,541.10
annually (p. 52, Rollo). The city board of tax appeals ruled that they are personalty. The
assessor appealed to the Central Board of Assessment Appeals. The Board, which was in its
decision of June 3, 1977 that the said machines and equipment are real property under the Real
Property Tax Code, Presidential Decree No. 464, which took effect on June 1, 1974.

ISSUE:

Whether the pieces of gas station equipment and machinery already enumerated are subject to
realty tax

RULING:

Yes. This issue has to be resolved primarily under the provisions of the Assessment Law and the
Real Property Tax Code. Under, Sec. 38 of the said law: “Machinery shall embrace machines,
mechanical contrivances, instruments, appliances and apparatus attached to the real estate. It
includes the physical facilities available for production, as well as the installations and
appurtenant service facilities, together with all other equipment designed for or essential to its
manufacturing, industrial or agricultural purposes.”

The equipment and machinery, are considered as appurtenances to the gas station building or
shed owned by Caltex (as to which it is subject to realty tax) and which fixtures are necessary to
the operation of the gas station, for without them the gas station would be useless, and which
have been attached or affixed permanently to the gas station site or embedded therein, are
taxable improvements and machinery within the meaning of the Assessment Law and the Real
Property Tax Code. Improvements on land are commonly taxed as realty even though for some
purposes they might be considered personalty. "It is a familiar phenomenon to see things
classed as real property for purposes of taxation which on general principle might be
considered personal property"

MERALCO SECURITIES INDUSTRIAL CORPORATION vs.

CENTRAL BOARD OF ASSESSMENT APPEALS, BOARD OF ASSESSMENT APPEALS OF LAGUNA
and PROVINCIAL ASSESSOR OF LAGUNA
G.R. No. L-46245    
[May 31, 1982]

FACTS:

Pursuant to a pipeline concession issued under the Petroleum Act of 1949, Republic Act No.
387, Meralco Securities installed from Batangas to Manila a pipeline system consisting of
cylindrical steel pipes joined together and buried not less than one meter below the surface
along the shoulder of the public highway. The pipes are embedded in the soil and are firmly and
solidly welded together so as to preclude breakage or damage thereto and prevent leakage or
seepage of the oil. The valves are welded to the pipes so as to make the pipeline system one
single piece of property from end to end.
In order to repair, replace, remove or transfer segments of the pipeline, the pipes have to be
cold-cut by means of a rotary hard-metal pipe-cutter after digging or excavating them out of the
ground where they are buried. In points where the pipeline traversed rivers or creeks, the pipes
were laid beneath the bed thereof. Hence, the pipes are permanently attached to the land.
Pursuant to the Assessment Law, Commonwealth Act No. 470, the provincial assessor of Laguna
treated the pipeline as real property and issued tax declarations, containing the assessed values
of portions of the pipeline.
Meralco appealed the assessments to the defendants, but the latter ruled that pipeline is
subject to realty tax. The defendants argued that the pipeline is subject to realty tax because
they are contemplated in Assessment Law and Real Property Tax Code; that they do not fall
within the category of property exempt from realty tax under those laws; that Articles 415 &
416 of the Civil Code, defining real and personal property have no applications to this case
because these pipes are constructions adhered to soil and things attached to the land in a fixed
manner, and that Meralco Securities is not exempt from realty tax under petroleum law.
Meralco insists that its pipeline is not subject to realty tax because it is not real property within
the meaning of Art. 415.

ISSUE:

Whether the aforementioned pipelines are subject to realty tax.

RULING:

Yes, the pipelines are subject to realty tax.

Section 2 of the Assessment Law provides that the realty tax is due “on real property, including
land, buildings, machinery, and other improvements.” This provision is reproduced with some
modification in Section 38, Real Property Tax Code, which provides that “there shall be levied,
assessed, and collected xxx annual ad valorem tax on real property such as land, buildings,
machinery, and other improvements affixed or attached to real property xxx.”
It is incontestable that the pipeline of Meralco Securities does not fall within any of the classes
of exempt real property enumerated in section 3 of the Assessment Law and section 40 of the
Real Property Tax Code.
.

City of Baguio vs. Busuego

G.R. No. L-29772
[Sept. 18, 1980]

FACTS:

This tax collection suit instituted by the City of Baguio, against appellant Fernando S. Busuego,
originated in the City Court and was subsequently elevated to the Court of First Instance.
On August 11, 1959 defendant and the Government Service Insurance System, a government
corporation, executed, by and between themselves, a "Contract to Sell" over the property
described in the complaint. The agreed purchase price for the property has not yet been fully
paid and the GSIS has up to the present time, title of the property in question.

Under Commonwealth Act No. 186, the GSIS as well as its property are exempt from payment
of all types and kinds of taxes. The property involved in this case has been consistently assessed
by the City of Baguio in the name of the GSIS and the unpaid z taxes, per records of the City
Treasurer's Office, on the property for the period from 1962 to 1966 amounts to 1,656.00.
Demands were made on the defendant for payment of the aforesaid taxes but said defendant
refused and failed to pay the same.
Paragraph 2 of the contract entered into by the GSIS and the defendant-appellant manifests the
latter's willingness at the signing thereof to pay and shoulder all taxes and assessments on the
subject property and insurance thereon during the term of the said contract.

ISSUE:

WON Busuego is now estopped to deny his liability to pay the taxes

RULING:

YES. In view of his acceptance of this condition, he is now estopped to deny his liability to pay
the taxes. And, on the other hand, when the GSIS sold the property and imposed said condition,
the agency although exempt from the payment of taxes clearly indicated that the property
became taxable upon its delivery to the purchaser" and that "the sole determinative factor for
exemption from realty taxes is the "use" to which the property is devoted. And where "use" is
the test, the ownership is immaterial.

In the instant case, although the property was still in the name of the GSIS pending the
payment of the full price its use and possession was already transferred to the defendant."
Such contractual stipulation that the purchaser on installments pay the real estate taxes
pending completion of payments, although the seller who retained title is exempt from such
taxes, is valid and binding, absent any law to the contrary and none has been cited by
appellant.c

SSS vs. Bacolod City

GR L-35726
[21 July 1982]

FACTS:
The Social Security System (SSS) is a government agency created under RA 1161. In pursuance
of its operations, SSS maintains a number of regional offices, one of which is a 5-storey building
occupying 4 parcels of land in Bacolod City. Said building and lands were assessed for taxation.
For failure to pay the realty taxes thereon, the city levid upon said properties. SSS sought
reconsideration on the ground that SSS is a government-owned and -controlled corporation
and is exempt from payment of real estate taxes.

ISSUE:

Whether SSS property in Bacolod City is tax-exempt.

RULING:

The distinction whether the government-owned or controlled corporation exercises ministrant

or proprietory function is of no relevance as the exemption does not relate to legal fees but on
realty taxes. The Charter of Bacolod City does not contain any qualification whatsoever in
providing from the exemption from real estate taxes of lands and building owned by the
Government.

It is axiomatic that when public property is involved, exemption is the rule and taxation is the
exception. PD 24, amending the Social Security Act of 1954, has already removed all doubts as
to the exemption of the SS from taxation (Section 16).

THE BOARD OF ASSESSMENT APPEALS OF ZAMBOANGA DEL SUR vs. SAMAR MINING
COMPANY, INC. and the COURT OF TAX APPEALS
G.R. No. L-28034
[February 27, 1971]

FACTS:

Samar Mining (Samico) owned a mine and mill in Buug, Zamboanga del Sur. To connect them to
the pier in Pamintayan, Zamboanga del Sur, the company built the 42-km gravel pit Samico
Road, construction of which was finished in 1959. Since the road traversed public lands, Samico
filed miscellaneous lease applications for right of way with the Bureau of Lands and the Bureau
of Forestry in 1958 and 1959, respectively. Temporary permits were granted, and eventually
the lease applications were granted on Oct. 7, 1965; but the lease contracts were never
executed.

On June 5, 1964, Samico received an assessment letter from the petitioner Provincial Assessor,
charging them P1,117,900.00 as real estate tax on the taxable portion of Samico Road. Samico
appealed the assessment to petitioner BAA on the ground that the road was not a taxable
improvement because it was constructed entirely on public land within the meaning of Sec. 2 of
CA 470 and the decision of the SC in Bislig Bay Lumber Co. v. Surigao. The BAA upheld the
assessment but held it unenforceable until the lease contracts were executed. Samico moved
for reconsideration, but the BAA, in a decision dated Aug. 3, 1965, not only denied the appeal
but made the assessment immediately enforceable, with the amount due accruing from the
date of completion of the road in 1959. Upon second denial by the BAA, Samico elevated its
case to the Court of Tax Appeals.

ISSUE:

WON the road constructed on alienable public land leased to Samico is taxable.

RULING:

NO. The argument is untenable. The road in issue in the Bislig Bay case was exempted not
because it was built on inalienable lands but because it formed an integral part of the public
land upon which it was built; and because it was owned by the Government through accession.
Section 3(a) of the Assessment Law does not distinguish between alienable or inalienable lands;
as long as the land is of public domain, it is tax-exempt.

BAA and the Provincial Assessor argue that the road is an improvement and, therefore, taxable
under Section 2 of the Assessment Law (Commonwealth Act No. 470) which provides as
follows: "Sec. 2. Incidence of real property tax. - Except in chartered cities, there shall be levied,
assessed, and collected, an annual ad valorem tax on real property including land, buildings,
machinery, and other improvements not hereinafter specifically exempted."

City Treasurer of QC vs. CA

G.R. No. 120974
Dec. 22, 1997

FACTS:
Alberto Sta. Maria owned a parcel of land covered by TCT No. 68818 which he sold in 1964 to
Teresa Valencia who, as a consequence, had the title canceled and TCT No. 79818 issued in her
name. She however failed to have the tax declaration transferred in her name. Thus she paid
the real estate taxes from 1964 to 1978 in the name of its previous owner Alberto Sta. Maria. In
the auction sale on 29 February 1984 the spouses Romeo and Verna Chua bought the land in
question, which was already covered by TCT No. 79818 in the name of Teresa L. Valencia. On 5
March 1984 a certificate of sale was issued to the Chua spouses but it showed on its face that
the land was still covered by TCT No. 68818 and not TCT No. 79818. Apparently, the Office of
the City Treasurer was unaware that TCT No. 68818 had already been canceled by TCT No.
79818. However, in the Final Bill of Sale issued to the Chua spouses on 15 May 1985 TCT No.
79818 still appeared in the name of Alberto Sta. Maria, the former owner, so that the vendee
spouses lost no time in filing a petition with the Regional Trial Court of Quezon City for the
cancellation of TCT No. 79818 and the issuance of a new title in their name. On 20 December
1973 Valencia entered into a contract of sale of the property on installment with a mortgage in
favor of respondent Bernardita C. Tolentino. However, from 1979 to 1983 Valencia failed to pay
the real estate taxes due on the land. As a result, notices of tax delinquency and intent to sell
the property were sent to Alberto Sta. Sometime in April 1989, as purchasers of the property in
the auction sale, the Chuas demanded delivery of possession from Bernardita C. Tolentino and
Teresa L. Valencia.

ISSUE:
Whether or not the auction sale is valid?

RULING:
In ascertaining the identity of the delinquent taxpayer, for purposes of notifying him of his tax
delinquency and the prospect of a distraint and auction of his delinquent property, petitioner
City Treasurer should not have simply relied on the tax declaration. The property being covered
by the Torrens system, it would have been more prudent for him, which was not difficult to do,
to verify from the Office of the Register of Deeds of Quezon City where the property is situated
and as to who the registered owner was at the time the auction sale was to take place, to
determine who the real delinquent taxpayer was within the purview of the third paragraph of
Sec. 73. For one who is no longer the lawful owner of the land cannot be considered the
“present registered owner” because, apparently, he has already lost interest in the property,
hence is not expected to defend the property from the sale at auction. The purpose of PD No.
464 is to collect taxes from the delinquent taxpayer and, logically, one who is no longer the
owner of the property cannot be considered the delinquent taxpayer

NPC vs. Presiding Judge of RTC-Branch 25

CDO, G.R . No. 72477
Oct. 16, 1990

Facts: On October 10, 1984, the Province of Misamis Oriental filed a complaint with the
Regional Trial Court of Cagayan de Oro City against NAPOCOR for the collection of real property
tax and special education fund tax in the amounts covering the period 1978 to 1984. Petitioner
NAPOCOR then defendant therein, filed a motion to dismiss on the grounds that the court has
no jurisdiction over the action or suit and that it is not the proper forum for the adjudication of
the case. In support of this motion NAPOCOR cited Presidential Decree No. 242 dated July 9,
1973 which provides that disputes between agencies of the government including govemment-
owned or controlled corporations shall be administratively settled or adjudicated by the
Secretary of Justice. On July 23, 1985, Barangay Aplaya, Municipality of Jasaan, Misamis
Oriental filed a complaint in intervention contending that non-payment by NAPOCOR of real
property taxes would adversely affect its interest since under the law, ten percent (10%) of the
real property tax collected on properties within its jurisdiction shall accrue to the general fund
of the barangay. Thereafter, the case was set for trial.

Issue: Whether Petitioner was exempt from RPT.

Ruling: No.
Petitioner alleges that what has been withdrawn is its exemption from taxes, duties, and fees
which are payable to the national government while its exemption from taxes, duties and fees
payable to government branches, agencies and instrumentalities remains unaffected.
Considering that real property taxes are payable to the local government, NAPOCOR maintains
that it is exempt therefrom.
We find the above argument untenable. It reads into the law a distinction that is not there. It is
contrary to the clear intent of the law to withdraw from all units of government, including
government-owned or controlled corporations their exemptions from all kinds of taxes. Had it
been otherwise, then the law would have said so. Not having distinguished as to the kinds of
tax exemptions withdrawn, the plain meaning is that all tax exemptions are covered. There the
law does not distinguish, neither must we.

Reyes vs. Almanzor

G.R. No. 4983 9 – 46
April 26, 1991

Facts: Petitioners JBL Reyes et al. owned a parcel of land in Tondo which are leased and
occupied as dwelling units by tenants who were paying monthly rentals of not exceeding P300.
Sometimes in 1971 the Rental Freezing Law was passed prohibiting for one year from its
effectivity, an increase in monthly rentals of dwelling units where rentals do not exceed three
hundred pesos (P300.00), so that the Reyeses were precluded from raising the rents and from
ejecting the tenants. In 1973, respondent City Assessor of Manila re-classified and reassessed
the value of the subject properties based on the schedule of market values, which entailed an
increase in the corresponding tax rates prompting petitioners to file a Memorandum of
Disagreement averring that the reassessments made were "excessive, unwarranted,
inequitable, confiscatory and unconstitutional" considering that the taxes imposed upon them
greatly exceeded the annual income derived from their properties. They argued that the
income approach should have been used in determining the land values instead of the
comparable sales approach which the City Assessor adopted.

ISSUE: Whether or not the approach on tax assessment used by the City Assessor reasonable?
RULING: No. The taxing power has the authority to make a reasonable and natural classification
for purposes of taxation but the government's act must not be prompted by a spirit of hostility,
or at the very least discrimination that finds no support in reason. It suffices then that the laws
operate equally and uniformly on all persons under similar circumstances or that all persons
must be treated in the same manner, the conditions not being different both in the privileges
conferred and the liabilities imposed. Consequently, it stands to reason that petitioners who
are burdened by the government by its Rental Freezing Laws (then R.A. No. 6359 and P.D. 20)
under the principle of social justice should not now be penalized by the same government by
the imposition of excessive taxes petitioners can ill afford and eventually result in the forfeiture
of their properties.

Pecson vs. CA
G.R. No. 105360
May 25, 1993

FACTS:
1. Petitioner’s property in Quezon City was sold to Nepomuceno at a public auction after
he failed to pay real estate tax delinquencies.
a. Notices of the sale of the property were sent to petitioner at “No. 79 Paquita
Street, Sampaloc Manila” and were also published in the Times Journal on
October 6, 13, and 30.
b. The property was sold to Nepomuceno and since petitioner failed to redeem the
property, title was consolidated in Nepomuceno.
2. Later, petitioner learned of the sale at public auction, so he filed suit against
Nepomuceno, along with Tan and Nuguid who bought the same property from
Nepomuceno, to have the title to the property annulled.
a. Petitioner claimed that the sale was void because no notice of the sale at public
auction was sent to him. He also claimed that he was not informed of his right to
redeem the property within one year.

ISSUES:
WON there was proper posting and announcement of the public auction as required by
the Real Property Tax Code
HELD:
The question on the posting of the notices and the announcement of the sale is a question of
fact, which SC will not inquire into and review.
Petition denied and decision of Court of Appeals affirmed.

Mathay vs. Sec. of Finance

G.R. No. 102319
Dec. 16, 1993

Facts: On March 21, 1991, Ismael A. Mathay, Jr., describing himself as "a member of Congress,
and registered owner of lands in Quezon City and resident of Metro Manila," instituted in this
Court a special civil action of prohibition against Victor Macalincag, then the Undersecretary of
Finance, the City Assessor and the City Treasurer of Quezon City. The action was docketed as
G.R. No. 97618.
His petition sought the perpetual enjoinment, as unconstitutional and void, of "(a) the schedule
of market values prepared by respondent City Assessor for all classes of real property situated
in Quezon City ("to take effect not earlier than January 1, 1991," and "implemented gradually
over a three-year period on a 1/3 2/3 2/3 scheme"), (b) the approval of said schedule by
respondent Victor Macalincag, (c) the revised and/or increased assessments of the properties
prepared by the City Assessor based on the illegal schedule of market values, and (d) the
oppressive and excessive real estate tax increases being implemented by respondents City
Assessor and City Treasurer pursuant to the illegal schedule of market values and unlawful
approval, all in violation of the Constitution and laws. The essential foundation of the
petitioner's thesis of the nullity of the schedule of market values is that it was prepared by the
respondent City Assessor alone, independently of the other City Assessors within the
Metropolitan Manila Area, this being in patent violation of the explicit requirement of Section 9
of Presidential decree No. 921.

Issue: Whether the Schedule of Market Values, prepared solely by the Municipal Assessor of
Pasig, for lands in Pasig, Metro Manila, was void for being contrary to n 9 of P.D. 921.

Ruling: Section 9 of P.D. 921 is specific and mandatory. The undisputed fact that the City
Assessor of Quezon City solely prepared the Schedule of Market Values in question, without the
participation of the other City Assessors of Metropolitan Manila, with the City Assessor of
Manila acting as Chairman, indicates that the said Schedule of Market Values was prepared
contrary to and unauthorized under Section 9 of P.D. 921 and its implementing rule on Section
1.02 of AR No. 7-77. The conclusion is, therefore, inevitable that the said Schedule of Market
Values, having been prepared by the respondent City Assessor contrary to the express provision
of and without authority under Section 9 is illegal and therefore void.
Patalinghug vs. CA
G.R. No. 104786
Jan. 27, 1994

FACTS: On November 17, 1982, the Sangguniang Panglungsod of Davao city enacted Ordinance
No. 363 or otherwise known as the "Expanded Zoning Ordinance of Davao City.
Several residents then filed a complaint regarding such construction stating that petitioner
violated Ordinance No. 363 since the said funeral parlor was located within a 50-meter radius
from the Iglesia ni Kristo chapel and several resident structures. The Sangguniang Panlungsod
conducted an investigation based on the complaint and found that a residential structure
owned by Mr. Wilfred Tepoot was only 8 inches to the south of the funeral parlor.
Nevertheless, petitioner still continued with the construction and was finished by November of
1987.
Private respondents herein filed on September 6, 1988 a case for the declaration of nullity of
the building permit with preliminary prohibitory and mandatory injunction and/or restraining
order with the trial court. The trial court rendered its decision, dismissing the said complaint.
The trial court based such dismissal according to their own ocular inspection, stating that Iglesia
Ni Cristo chapel and a building owned by Cribillo was more than 50 meters away from the
funeral parlor. Furthermore, the residential building owned by Mr. Teepot, although only inches
away from the said structure, was being rented by a certain Mr. Asiaten, who actually uses such
for his laundry business. Such building was considered an industrial one. Respondent’s suit was
also considered premature as they failed to exhaust all the administrative remedies provided by
the Ordinance. Respondents appealed the said decision to the Court of Appeals, which reversed
the decision of the lower court stating that although the buildings owned by Iglesia and Cribillo
were beyond the 50 meter radius, still, the said structure was constructed within the 50 meter
radius measured from Teepot’s building. The CA still considered Teepot’s building as a
residential building evidenced by the tax declarations submitted.

ISSUE: Whether or not Mr. Patalinghug's operation of a funeral home constitutes permissible
use within a particular district or zone in Davao City.

RULING: Petitioner did not violate Section 8 of Ordinance No. 363. The question on whether or
not Mr. Teepot’s building is residential or not was already resolved by the lower court and said
resolution is considered binding. Examining the testimony of Councilor Vergara, it shows that
the said building was used for dual purpose, both as a dwelling place and as a laundry shop. Its
use as a residence however was not fully substantiated. Furthermore, a tax declaration is not
conclusive of the nature of the property for zoning purposes; “A property may have been
declared by its owner as residential for real estate taxation purposes but it may well be within a
commercial zone.” The evidentiary value of a tax declaration under the Real Property Tax Code
states that “a tax declaration only enables the assessor to identify the same for assessment
levels.” Said tax declaration does not bind assessors since appraisal and assessment are based
on the actual use of the said property. Once the government has reclassified an area as
commercial, as what Ordinance 363 was implemented for, the determination for zoning
purposes must prevail. The declaration of the said area as a commercial zone is in accordance
with the exercise of police power by the Sangguniang Panglungsod to promote the good order
and general welfare of its constituents.

Sesbreño vs. CBAA

G.R. No. 1065 88
March 24, 1997

FACTS: On April 3, 1980, petitioner purchased from Estrella Benedicto Tan two (2) parcels of
land covered by Transfer Certificate of Title No. T-55917 issued by the Register of Deeds of
Cebu City 3 and described in the deed of sale as follows:

"A parcel of land (Lot 308 of the Cadastral Survey of Cebu), with the improvements thereon,
situated in the City of Cebu (formerly Municipality of Cebu), containing an area of Forty Nine
(49) square meters, more or less . . .

A parcel of land (Lot 309 of the Cadastral Survey of Cebu), with the improvements thereon,
situated in the City of Cebu, containing an area of Forty Eight (48) square meters, more or
less . . ."

The conveyance included "a residential house of strong materials constructed on the lots
above-mentioned" located in Cebu City.

Thereafter, petitioner declared the real property constructed on the said lots for purposes of
tax assessment as a residential house of strong materials with a floor area of sixty (60) square
meters. Effective in the year 1980, the declared property was assessed by Respondent City
Assessor of Cebu City under Tax Declaration No. 02-20454 at a market value of P60,000.00 and
an assessed value of P36,900.00.

During a tax-mapping operation conducted in February 1989, the field inspectors of the Cebu
City Assessor discovered that the real property declared has excess portion not declared by the
petitioner that's why when they re-assessed the property value, it increased to P499,860.00, of
which the petitioner protested for being "excessive and unconscionable".

The petitioner claims that Respondent CBAA err in considering the issue of back taxes, the same
being closely related to an error properly raised. The Respondent CBAA applied Section 25 of
PD 464 which had authorized the imposition of back taxes.
ISSUE: Is Respondent CBAA gravely erred in misinterpreting or misapplying Section 24 and 25 of
P.D. 464.

HELD:

No, the CBAA is correct in interpreting and applying Section 24 and 25 of P.D. 464.
Section 24 merely lays down the general rule that assessments under PD 464 are to be given
prospective application. It cannot be construed in such a manner as to eliminate the imposition
of back taxes. If Section 24, instead of Section 25, were made to apply as suggested by
petitioner, he would in effect be excused from the payment of back taxes on the undeclared
excess area of his property. The Court, clearly, cannot allow a taxpayer to evade his obligation
to the government by letting him pay taxes on a property based on its gross undervaluation at
P60,000.00, when the same had then a current market value of P449,860.00.

Lopez v. City of Manila

GR No. 127139
Feb. 19, 1999

FACTS: Section 219 of Republic Act 7160 (R.A. 7160) or the Local Government Code of 1991
requires the conduct of the general revision of real property. The revision of real property
assessments prescribed therein was not yet enforced in the City of Manila. Upon receipt of
Memorandum Circular No. 04-95 from the Bureau of Local Government Finance relating to the
failure of most of the cities and municipalities of Metropolitan Manila, including the City of
Manila, to conduct the general revision of real property and after obtaining the necessary funds
from the City Council, the City Assessor began the process of general revision based on the
updated fair market values of the real properties. The City Assessor’s Office submitted the
proposed schedule of fair market values to the City Council for its appropriate action. The
council then enacted Manila Ordinance No. 7894 which was approved. With the
implementation of the ordinance, the tax on the land owned by the petitioner was increase
hence he filed a special proceeding for the declaration of nullity of the City of Manila Ordinance
No. 7894 for being “unjust, excessive, oppressive or confiscatory.” Manila Ordinance No. 7905
took effect thereafter, reducing by fifty percent (50%) the assessment levels (depending on the
use of property, e.g., residential, commercial) for the computation of tax due. The new
ordinance amended the assessment levels provided by Section 74, paragraph (A) of Manila
Ordinance No. 7794.. Despite the amendment brought about by Manila Ordinance No. 7905,
the controversy proceeded. The trial court dismissed the case for failure of the petitioner to
exhaust administrative remedies.

ISSUE: W/N the doctrine of exhaustion of administrative remedies may be dispensed with in
the instant case.
HELD: NO. As a general rule, where the law provides for the remedies against the action of an
administrative board, body, or officer, relief to courts can be sought only after exhausting all
remedies provided. The reason rests upon the presumption that the administrative body, if
given the chance to correct its mistake or error, may amend its decision on a given matter and
decide it properly. Therefore, where a remedy is available within the administrative machinery,
this should be resorted to before resort can be made to the courts, not only to give the
administrative agency the opportunity to decide the matter by itself correctly, but also to
prevent unnecessary and premature resort to courts. “One of the reasons for the doctrine of
exhaustion is the separation of powers which enjoins upon the judiciary a becoming policy of
non-interference with matters coming primarily within the competence of other department. x
x x There are however a number of instances when the doctrine may be dispensed with and
judicial action validly resorted to immediately. Among these exceptional cases are: (1) when the
question raised is purely legal, (2) when the administrative body is in estoppel; (3) when the act
complained of is patently illegal; (4) when there is urgent need for judicial intervention; (5)
when the claim involved is small; (6) when irreparable damage will be suffered; (7) when there
is no other plain, speedy and adequate remedy; (8) when strong public interest is involved; (9)
when the subject of controversy is private land; and (10) in quo-warranto proceeding (citation
omitted). In the court’s opinion, however, the instant petition does not fall within any of the
exceptions above-mentioned.

24.
Cag. Robina vs. CA
G.R. No. 122451
Oct. 12, 2000

Facts:
In 1990, the Assets Privatization Trust (APT) offered for sale all the assets and properties of the
Cagayan Sugar Corporation (CASUCO), which had been foreclosed and transferred to APT by the
Development Bank of the Philippines. The APT set the floor bid price for the said properties at
three hundred fifty five million pesos (P355,000,000.00).Petitioner, as the highest bidder,
acquired the aforesaid properties for a total price of P464,000,000.00. Among the properties
bought by petitioner were sugar mill machineries located at the CASUCO millsite in Sto.
Domingo, Piat, Cagayan. The market value of these machineries was pegged at
P391,623,520.00 and the assessed value was set at P313,298,820.00 under Tax Declaration No.
5355.
On October 18, 1990, the Provincial Assessor of Cagayan issued a "Notice of Assessment of Real
Property" to petitioner covering the machineries installed at the CASUCO millsite based on the
market value of P391,623,520.00 and the assessed value thereof at P313,298,820.00. On
February 8, 1991, petitioner appealed the assessment to the LBAA, on the ground that it was
excessive, erroneous, and unjust.
Issue
Did the Court of Appeals err in finding the assessment of petitioner's machineries proper and
correct under the Real Property Tax Code?

Ruling:
We agree with petitioner that Section 28 of the Real Property Tax Code provides for a formula
for computing the current market value of machineries. However, Section 28 must be read in
consonance with Section 3 (n) of the said law, which defines "market value." Under the latter
provision, the LBAA and CBAA were not precluded from adopting various approaches to value
determination, including adopting the APT "floor bid price" for petitioner's properties. As
correctly pointed out by the CBAA and affirmed by the court a quo:
Valuation on the basis of a floor bid price is not bereft of any basis in law. One of the
approaches to value is the Sales Analysis Approach or the Market Data Approach where the
source of market data for valuation is from offer of sales or bids of real property. Valuation
based on the floor bid price belongs to this approach, pursuant to Section 3(n)…

Light Rail Transit vs. CBAA

G.R. No. 127616
Oct. 12, 2000

FACTS: Light Rail Transit Authority (LRTA) is a government-owned and controlled corporation
created and organized under E.O. No. 603. It provides that LRTA is responsible for the
construction, operation, maintenance and/or lease of light rail transit system in the Philippines.
It fulfilment of its purpose it acquired real properties and eventually constructed structural
improvements including buildings, carriageways, passenger terminal stations, and installed
various kinds of machinery and equipment and facilities in order to operate. In 1984, the City
Assessor of Manila assessed the real properties of LRTA including the improvements it
constructed and installed, as provided in the Real Property Tax Code, commencing with the
year 1985. LRTA paid almost all the real property taxes except the taxes for the carriageways
and passenger terminal stations. It reasoned that those properties are not real properties under
the Real Property Tax Code being for public use or purpose, but the City Assessor denied the
claim. LRTA appealed with the Local Board of Assessment Appeals of Manila (LBAA-Manila) but
was also denied by the latter. LBAA-Manila held that the carriageways and passenger terminal
stations are improvements; thus they are real property under the Real Property Tax Code. The
Court of Appeals (CA) also denied the appeal of LRTA. CA added to the ruling of the LBAA-
Manila that the properties in question were not owned by the government; thus no exemption
should be given. The CA also held that LRTA is a taxable entity and it uses the LRT system for its
benefit. Lastly the CA explained that LRTA is a profit-oriented enterprise who only serves those
paying the fare.

ISSUE: Whether LRTA’s carriageways and passenger terminal stations are subject to real
property taxes.
 HELD: Both carriageways and passenger terminal stations are subject to real property taxes.
The Supreme Court raised three points in its ruling: First, the improvements in question are real
property due to its characteristics. For tax purposes the concept of industrial accession as
pointed out by LRTA is not important, rather it should be determined based on the real
property’s incidents and from its natural and legal effects. As illustrated in the case, the
carriageways and passenger terminal stations despite its attachment to public roads still shows
its physical separability being elevated structures and inaccessible to the public. The Court
further pointed out that the accessibility of public roads are different from the improvements
since the latter are accessible to the train and its passengers. Second, the basis of assessment
or its actual use of the properties are for those who can afford the fare. The LRT is different
with public roads as to its actual use. Public roads are freely utilized by all types of vehicles and
people, but the improvements made by are only accessible to trains and those who can afford
the fare imposed. Third, LRTA failed to show proof that it can claim exemption from real
property tax. An important law pointed out by the Court was E.O. No. 603 which created and
organized LRTA, but it did not state that it can claim exemption from real property taxes. Article
4 of E.O. No. 603 only provides exemption as to direct and indirect taxes, duties or fees in
connection with the importation of equipment not locally available.

Capitol Wireless v. Provincial Treasurer of Batangas

G.R. No. 180110
May 30, 2016

Facts: Petitioner, Capitol Wireless, Inc. (CapWire), is a Philippine corporation in the business of
providing international telecommunication services. It has signed agreements with other local
and foreign telecommunications companies covering an international network of submarine
cable systems such as: the Asia Pacific Cable Network System (APCN), the Brunei-Malaysia-
Philippines Cable Network System (BMPCNS), the Philippines-Italy (SEA-ME-WE-3 CNS), and the
Guam Philippines (GP-CNS) systems. The agreements provide for co-ownership and other rights
among the parties over the network. Petitioner claims that it is co-owner only of the so called
“Wet Segment” of the APCN, while the landing stations or terminals and Segment E of APCN
located in Nasugbu, Batangas are allegedly owned by PLDT. Moreover, it alleges that the Wet
Segment is laid in international, and not Philippine waters. For loan restructuring purposes,
petitioner engaged an appraiser to assess the market value of the international submarine
cable system and the cost to CapWire. It then submitted a Sworn Statement of True Value of
Real Properties at the Provincial Treasurer’s Office in Batangas City, for the Wet Segment of the
system. Respondent Provincial Assessor of Batangas had determined that the submarine cable
systems described in CapWire’s Sworn Statement are taxable real property. Petitioner
contested this by reasoning that the cable system lies outside of Philippine territory i.e.
international waters. Petitioner received a Warrant of Levy and a Notice of Auction Sale from
respondent. Petitioner filed a Petition for Prohibition and Declaration of Nullity of Warrant of
Levy, Notice of Auction Sale and/or Auction Sale with the RTC of Batangas City. RTC issued an
order dismissing the petition: (1) for failure to follow the requisite of payment under protest; as
well as (2) failure to appeal to the Local Board of Assessment Appeals (LBAA), as provided for in
Sections 206 and 226 of R.A. 7160 or the Local Government Code.

Issue: WHETHER THE SUBMARINE COMMUNICATIONS CABLE BE CLASSIFIED AS TAXABLE REAL

PROPERTY BY THE LOCAL GOVERNMENTS? Yes.

Ruling: Submarine or undersea communication cables are akin to electric transmission lines
which this Court has recently declared in MERALCO vs City Assessor 2 and City Treasurer of
Lucena City, as no longer exempted from real property tax and may qualify as “machinery”
subject to real property tax under the Local Government Code. The Court sees no reason to
distinguish between submarine cables used for communication and aerial or underground wires
or lines used for electric transmission, so that both pieces of property do not merit a different
treatment in the aspect of real property taxation. Both electric lines and communication cables
are not directly adhered to the soil but pass through posts, relays or landing stations, but both
may be classified as “machinery” under Article 415 (5), NCC for the simple reason that such
pieces of equipment serve the owner’s business or tend to meet the needs of his industry or
works that are on real estate. Petitioner also failed to prove that it is exempted from payment
of real property tax.

Provincial Assessor of Agusan del Sur v. Filipinas Palm Oil Plantation,

G.R. No. 183416,
October 5, 2016

Facts: Filipinas Palm Oil Plantation, Inc. leased a 7,000-hectare property owned by the NDC-
Guthrie Plantations, Inc. - NDC-Guthrie Estates, Inc. (NGPI-NGEI) Cooperatives. The company
was later assessed by the Provincial Assessor of Agusan del Sur of real property taxes over the
leased land, the roads constructed therein, as well as the company’s road equipment and mini
haulers, which the Provincial Assessor considered as machineries subject to real property tax.

Issue: Whether Filipinas Palm Oil Plantation can be assessed of RPT over the land.

Ruling: The SC held that Filipinas cannot be assessed with real property taxes over the land
because under Section 133(n) of the LGC, the taxing power of local government units shall not
extend to the levy of taxes, fees, or charges on duly registered cooperatives under the
Cooperative Code. Nor can Filipinas be assessed for the roads constructed within the leased
property because said roads are owned by the government by right of accession, and all
properties owned by the government, without any distinction, are exempt from taxation.

Nonetheless, the SC held that the Provincial Assessor can properly assess real property taxes
against Filipinas over the latter’s road equipment and mini haulers because these movables fall
under the definition of machineries subject to real property tax under Section 199(o) of the
LGC.
City of Lapu Lapu vs. PEZA
G.R. no. 184203

Facts:
In 1995, the PEZA was created by virtue of Republic Act No.  7916 or “the Special Economic
Zone Act of 1995” to operate, administer, manage, and develop economic zones in the
country. The PEZA was granted the power to register, regulate, and supervise the enterprises
located in the economic zones. By virtue of the law, the export processing zone in Mariveles,
Bataan became the Bataan Economic Zone and the Mactan Export Processing Zone the Mactan
Economic Zone.
The City contends that due to the enactment of the LGC, specifically withdrawing all tax
exemptions and with the PEZA law of 1995 which did not have any provisions on tax
exemptions, it maintains that PEZA is liable for real property tax.

Issue: Whether or not PEZA should be exempted from real property taxation.

Held: Yes. Under Section 234(a) of the Local Government Code, real properties owned by the
Republic of the Philippines are exempt from real property taxes. Properties owned by the state
are either property of public dominion or patrimonial property as per Art. 420.
Citing Manila International Airport Authority: Properties of public dominion, being for public
use, are not subject to levy, encumbrance or disposition through public or private sale. Any
encumbrance, levy on execution or auction sale of any property of public dominion is void for
being contrary to public policy. Essential public services will stop if properties of public
dominion are subject to encumbrances, foreclosures and auction sale.
In this case, the properties sought to be taxed are located in publicly owned economic zones. 
These economic zones are property of public dominion – sites which were reserved by
President Marcos under Proclamation No. 1811, Series of 1979 (Mactan).
Petition Denied.

DEMAALA V. COMMISSION ON AUDIT

G.R. NO. 199752
[FEBRUARY 17, 2015]

FACTS: The Sangguniang Panlalawigan of Palawan enacted Provincial Ordinance No. 332-A,
Series of 1995, entitled “An Ordinance Approving and Adopting the Code Governing the
Revision of Assessments, Classification and Valuation of Real Properties in the Province of
Palawan” (Ordinance). Chapter 5, Section 48 of the Ordinance provides for an additional levy on
real property tax for the special education fund at the rate of one-half percent or 0.5% as
follows:
Section 48. Additional Levy on Real Property Tax for Special Education Fund. — There is hereby
levied an annual tax at the rate of one-half percent (1/2%) of the assessed value property tax.
The proceeds thereof shall exclusively accrue to the Special Education Fund (SEF).
In conformity with Section 48 of the Ordinance, the Municipality of Narra, Palawan, with
Demaala as mayor, collected from owners of real properties located within its territory an
annual tax as special education fund at the rate of 0.5% of the assessed value of the property
subject to tax. This collection was effected through the municipal treasurer.
On post-audit, Audit Team Leader Juanito A. Nostratis issued Audit Observation Memorandum
(AOM) No. 03-005 dated August 7, 2003 in which he noted supposed deficiencies in the special
education fund collected by the Municipality of Narra. He questioned the levy of the special
education fund at the rate of only 0.5% rather than at 1%, the rate stated in Section 235 of
Republic Act No. 7160, otherwise known as the Local Government Code of 1991 (Local
Government Code).
After evaluating AOM No. 03-005, Regional Cluster Director Sy issued NC No. 2004-04-101
dated August 30, 2004 in the amount of P1,125,416.56. He held Demaala, the municipal
treasurer of Narra, and all special education fund payors liable for the deficiency in special
education fund collections.

ISSUES:
WON THE SEF RATE IS DISCRETIONARY

HELD: 
YES. Section 235’s permissive language is unqualified. Moreover, there is no limiting qualifier to
the articulated rate of 1% which unequivocally indicates that any and all special education fund
collections must be at such rate.
At most, there is a seeming ambiguity in Section 235. Consistent with what has earlier been
discussed however, any such ambiguity must be read in favor of local fiscal autonomy. As in San
Juan v. Civil Service Commission, the scales must weigh in favor of the local government unit.
Fiscal autonomy entails “the power to create . . . own sources of revenue.” In turn, this power
necessarily entails enabling local government units with the capacity to create revenue sources
in accordance with the realities and contingencies present in their specific contexts. The power
to create must mean the local government units’ power to create what is most appropriate and
optimal for them; otherwise, they would be mere automatons that are turned on and off to
perform prearranged operations.

NATIONAL POWER CORPORATION v. THE PROVINCIAL TREASURER OF BENGUETG.R. No.

209303
November 14, 2016

FACTS: NPC is a government-owned and controlled created to undertake the development of

power generation and production from hydroelectric or other sources, and may undertake the
construction, operation and maintenance of power plants, dams, reservoirs, and other works. It
operates and maintains the Binga Hydro-Electric Power Plant. Respondents are representatives
of the province of Benguet. In May 2000, the Municipal Assessor of Itogon, Benguet assessed
NPC the amount of P62,645,668.80 real property tax for the properties located within the Binga
Hydro-Electric Power Plant.On March 17, 2006, NPC received a letter dated February 16, 2006
from OIC- Provincial Treasurer of Benguet demanding the payment of real property tax
delinquency in the amount of P62,645,668.80. On April 20, 2006, NPC challenged before the
Local Board of Assessment Appeals (LBAA) the legality of the assessment and the authority of
the respondents to assess and collect real property taxes from it when its properties are
exempt pursuant to Section 234 (b) and (c) of Republic Act (R.A.) No. 7160, otherwise known as
the Local Government Code (LGC) of 1991. In the letters dated September 3, 2000 and April 19,
2001, NPC filed its requests for exemption, which the respondent Municipal Treasurer of
Itogon, Benguet has not acted upon. In their Answer dated June 30, 2006, respondents alleged
that NPC's properties were not exempt from tax since the properties were classified in their tax
declarations as "industrial," "for industrial use," or "machineries" and "equipment." There was
no evidence that the properties were being used for generation and transmission of electric
power. Respondents alleged that the period to assess had not prescribed as the demand letter
in 2006 was for collection of delinquency taxes, and not an initial assessment which was issued
in 2003 but was not settled by NPC.

ISSUE: Whether the CTA en banc erred in dismissing the petition based on prescription

RULING: No. NPC has thirty (30) days from August 9, 2006 or not later than September 8, 2006
within which to appeal to the Central Board of Assessment Appeals (CBAA). Clearly timeliness
has been considerably breached when the herein Appeal reached this Board on November 22,
2006, seventy-five (75) days, way beyond the September 8, 2006 deadline. While it is evident in
jurisprudence that the filing of motion for reconsideration before the LBAA is allowed, this
Court finds that, inevitably, the filing of the appeal before the CBAA through registered mail on
November 16, 2006 was already late. It is settled that the "fresh period rule" in the case of
Domingo Neypes, et al. v. Court of Appeals, et al. applies only to judicial appeals and not to
administrative appeals. In the instant case, the subject appeal, i.e., appeal from a decision of
the LBAA to the CBAA, is not judicial but administrative in nature. Thus, the "fresh period rule"
in Neypes does not apply. Contrary to NPC's allegation that it has 30 days from receipt of the
Order denying its motion for reconsideration within which to appeal before the CBAA, it only
has the remaining 14 days from the 30-day period of appeal.

R.V Marzan Freight vs. CA/ Shiela’s Manufacturing

GRN 128064

Facts:
Philfire issued insurance policy to R.V Marzan, owner of a customs bonded warehouse. Shiela’s
manufacturing engaged in the garment business, the consignee of raw materials from Taiwan.
The BOC treated the materials as subject to ordinary import taxes and were not immediate
released to respondent. The consignee failed to file the requisite import entry and to claim the
cargo.BOC authorized petitioners for stripping and safekeeping after 5 months, notice of
abandonment giving respondents 15 days from notice to file entry the file cargoes without
prejudice to right of the consignee to redeem articles cargoes would redeemed abandoned and
be sold at public auction. After a month the declaration of abandonment has become final and
executory but before inventory and sale public auction of goods the warehouse was burned.
Philfire paid 12,000.00 for the warehouse. After the Lapse of more than 2 years from the arrival
of the cargo, the private respondent filed a complaint for damaged before RTC. Petitioner
arrived that there is no private of Contract between them since the cargo was received from
BOC and that respondent failed to claim the cargo, pay taxes thus not entitled to insurance
proceeds.

Issue:
Whether or not the trial court had jurisdiction to review and declare ineffective the declaration
of the BOC in abandonment proceedings and that the government ipso facto became the
owner thereof.

Ruling:
The declaration that the cargo was abandoned for the failure to file the import entry was
ineffective because notice of proceedings of abandonment was not given to the consignee.
Evidently, the resolution of this issue is within the exclusive competence of the District Collector
of Customs, the Commissioner of Customs and within the appellate jurisdiction of CTA.
The rule has RTC has no review powers over such proceedings is anchored upon the policy of
placing un necessary hindrance on the government drive not only to prevent smuggling and
other frauds upon customs, but more importantly, to render effective and efficient the
collection of import and export duties due the State, which enables the government to carry
out the functions it has been instituted to the perform. The trial court should have dismissed
the complaint without prejudice to the right of the private respondent to ventilate the issue
before the Commissioner of the Customs and/or CTA.

VICENTE VILLAFLOR vs. COURT OF APPEALS and NASIPIT LUMBER CO., INC
G.R. No. 95694
October 9, 1997

Facts:
The Petitioner bought a large tract of land containing one hundred forty (140) hectares to four
(4) different owners in 1940. The land was part of the public domain, but the petitioners
predecessor in interest over which he acquired the property, have been in open, exclusive and
notorious possession of the same for sometime. After acquisition, petitioner asserts exclusive
rights thereof for more than fifty (50) years.
In 1946, petitioner entered into a lease agreement with respondent Nasipit Lumber Co.Inc.
However, an “Agreement for the Relinquishment of Rights” was entered into by both parties in
1950. The respondent having complied all the requirements agreed upon, assumed ownership
and possession of the property since then. Respondent corporation likewise filed a sales
application in 1950 over the property to bolster his claim which the Bureau of Land otherwise
granted on the same year as proof of an “Order of Award” issued.
In 1974 or twenty four (24) years had passed, when petitioner, questioned and made several
collateral and extraneous claims against the respondent. However, the Bureau of Lands
dismissed the claim, arguing that petitioner no longer has any substantial rights to question the
validity of acquisition of the respondent and the subsequent issuance of free patent by the
Bureau of Lands. Unperturbed, petitioner filed a motion for reconsideration at the Ministry of
Natural Resources which likewise dismissed the petition.

ISSUE:
Whether or not the sale is valid.

HELD:
No. The provision of the law is specific that public lands can only be acquired in the manner
provided for therein and not otherwise(Sec. 11, CA. No. 141, as amended). In his sales
application, petitioner expressly admitted that said property was public land. This is formidable
evidence as it amounts to an admission against interest. The records show that Villaflor had
applied for the purchase of lands in question with this Office (Sales Application V-807) on 2
December 1948. There is a condition in the sales application to the effect that he recognizes
that the land covered by the same is of public domain and any and all rights he may have with
respect thereto by virtue of continuous occupation and cultivation are relinquished to the
Government of which Villaflor is very much aware. It also appears that Villaflor had paid for the
publication fees appurtenant to the sale of the land. He participated in the public auction where
he was declared the successful bidder. He had fully paid the purchase price thereof. It would be
a height of absurdity for Villaflor to be buying that which is owned by him if his claim of private
ownership thereof is to be believed. The area in dispute is not the private property of the
petitioner.
It is a basic assumption of public policy that lands of whatever classification belong to the state.
Unless alienated in accordance with law, it retains its rights over the same as dominus.

BOC and EEIB vs. Ogario

G.R. No. 138081
March 30, 2000

FACTS:

On December 9, 1998, Felipe Bartolome, District Collector of Customs of Cebu, issued a

Warrant of Seizure and Detention of 25,000 bags of rice, bearing the name of “SNOWMAN,
Milled in Palawan.” According to the EIIB, the rice was landed in Palawan by a foreign vessel
and then placed in sacks marked “SNOWMAN, Milled in Palawan.” It was then shipped to Cebu
City on board the vessel M/V “Alberto.” Forfeiture proceedings were commenced but
respondents filed a complaint for injunction with the RTC of Cebu City, impugning the issuance
of the Warrant.

The RTC ruled in favor of respondents and ordered the return of the goods. Meanwhile, in the
forfeiture proceedings before the Collector of Customs of Cebu, a decision was rendered
ordering the goods forfeited in favor of the government.

ISSUE:
Whether or not the RTC has jurisdiction to pass upon the validity of seizure and forfeiture
proceedings

HELD:

There is no question that Regional Trial Courts are devoid of any competence to pass upon the
validity or regularity of seizure and forfeiture proceedings conducted by the BOC and to enjoin
or otherwise interfere with these proceedings. The Collector of Customs sitting in seizure and
forfeiture proceedings has exclusive jurisdiction to hear and determine all questions touching
on the seizure and forfeiture of dutiable goods. The Regional Trial Courts are precluded from
assuming cognizance over such matters even through petitions for certiorari, prohibition or
mandamus.

The rule that RTCs have no review powers over such proceedings is anchored upon the policy of
placing no unnecessary hindrance on the government’s drive, not only to prevent smuggling
and other frauds upon Customs, but more importantly, to render effective and efficient the
collection of import and export duties due the State, which enables the government to carry
out the functions it has been instituted to perform.

Even if the seizure by the Collector of Customs were illegal, such act does not deprive the BOC
of jurisdiction thereon.

ALBERTO DE JOYA vs. HON. GREGORIO T. LANTIN

Facts:
Francindy Commercial of 953-H Ylaya St., Manila (Francisco Dy, proprietor), purchased from
Ernerose Commercial of Cebu City (Ernesto J. Uy, proprietor) 90 bales of assorted textiles and
rags valued at P117,731.00. Ernerose Commercial shipped the merchandise from Cebu City, to
Manila, as follows: (1) 50 bales declared as rayon rags aboard M/V Magsaysay, voyage 229, bill
of lading No. 1, arriving in North Harbor, Manila on October 5, 1964; and (2) 40 bales declared
as rayon rags aboard M/V Quirino, voyage 139, bill of lading No. 4, arriving in North Harbor, on
October 6, 1964. When the goods were about to leave customs premises, Customs authorities
held them for further verification. And upon their examination they were found to be different
from the declaration the cargo manifest of the carrying vessels aforementioned.Francindy
Commercial subsequently demanded on October 14, 15 and 23 the release of the goods.
Asserted as grounds for release were: Francindy Commercial is a purchaser in good faith; a local
purchase was involved so the Customs bureau has no right to examine the goods; and that the
goods came from a coastwise port.

Issue: WON the Customs bureau has jurisdiction to seize the goods and institute forfeiture
proceedings against them?
Ruling: The goods in question are imported articles entered at the Port of Cebu.  Should they be
found to have been released irregularly from Customs custody in Cebu City, they are subject to
seizure and forfeiture, the proceedings for which comes within the jurisdiction of the Bureau of
Customs pursuant to Republic Act 1937.
Said proceedings should be followed; the owner of the goods may set up defenses therein
(Pacis v. Averia, L-22526, Nov. 29, 1966).  From the decision of the Commissioner of Customs
appeal lies to the Court of Tax Appeals, as provided in Sec. 2402 of Republic Act 1937 and Sec.
11 of Republic Act 1125.  To permit recourse to the Court of First Instance in cases of seizure of
imported goods would in effect render ineffective the power of the Customs authorities under
the Tariff Code and deprive the Court of Tax Appeals of one of its exclusive appellate
jurisdictions.  As this Court has ruled in Pacis v. Averia, supra, Republic Acts 1937 and 1125 vest
jurisdiction over seizure and forfeiture proceedings exclusively upon the Bureau of Customs and
the Court of Tax Appeals.  Such law being special in nature, while the Judiciary Act defining the
jurisdiction of Courts of First Instance is a general legislation, not to mention that the former
are later enactments, the Court of First Instance should yield to the jurisdiction of the Customs
authorities.

Air Manila v Balatbat

G.R. No. L-29064
April 29, 1971

Facts:
On April 1, 1968, Philippine Airlines (PAL) petitioned the Civil Aeronautics Board (CAB) for
approval of a proposed schedule of flights. The action on the petition was deferred for
further study. CAB passed Resolution No. 109 (68), referring PAL’s petition to a hearing
examiner for economic justification. On May 28, 1968, CAB issued its Resolution No. 139
(68), approving the proposed schedule for a period of 30 days, subject to certain conditions.
On May 31, 1968, Air Manila, Inc. filed a petition claiming that CAB acted without or in
excess of jurisdiction and/or with abuse of discretion in issuing its Resolution No. 139 (68).
It is Air Manila’s allegation that the proposed new schedule, involving an increase of
frequencies, would not only saturate the routes served also by Air Manila, but would also
affect its schedule; that CAB's approval of said Domestic Traffic Schedule without receiving
the evidence of the parties constituted a deprivation of Air Manila’s right to be heard; and
that such authorization to PAL to operate the proposed schedule without economic
justification amounted to a capricious and whimsical exercise by the Board of its power
amounting to lack of jurisdiction.

Issue:
Whether or not the Civil Aeronautics Board acted without or in excess of jurisdiction and/or
with abuse of discretion in issuing its Resolution No. 139 (68).

Ruling:
 There is no merit to the contention of Air Manila. It has been correctly said that
administrative proceedings are not exempt from the operation of certain basic and
fundamental procedural principles, such as the due process requirements in investigations
and trials. And this administrative due process is recognized to include (a) the right to notice,
be it actual or constructive, of the institution of the proceedings that may affect a person's
legal rights; (b) reasonable opportunity to appear and defend his rights, introduce witnesses
and relevant evidence in his favor, (c) a tribunal so constituted as to give him reasonable
assurance of honesty and impartiality, and one of competent Jurisdiction; and (d) a finding or
decision by that tribunal supported by substantial evidence presented at the hearing, or at
least contained in the records or disclosed to the parties affected.

IBARRA P. ORTEGA v. SOCIAL SECURITY COMMISSION, GR No. 176150, 2008-06-25

Facts:
Petitioner Ibarra P. Ortega assails the Court of Appeals' August 7, 2006 Decision[1] dismissing
his petition for review and upholding the denial by respondent Social Security Commission (SSC)
of his application for total permanent... disability benefits, and the Resolution[2] of January 16,
2007 denying his motions for reconsideration and inhibition.
Petitioner, a member of respondent Social Security System (SSS), filed claims for partial
permanent disability benefits on account of his condition of Generalized Arthritis and Partial
Ankylosis,[3] which claims the SSS granted for a total monthly pension... of 23 months.
After the expiration of his disability pension, petitioner filed with the SSS Malabon Branch Office
on April 26, 2000 a claim for total permanent disability benefits.
His application... was denied, however, on the ground that he... was already granted disability
benefits for the same illness and physical examination showed no progression of illness.
Further claiming to be afflicted with rheumatoid arthritis of both hands affecting all fingers and
both palms,[11] petitioner contended that the medical opinion of the SSS physician who
interviewed him for less than three minutes cannot prevail over the... findings of his physicians
who have been treating him over a long period of time.
Meanwhile, by letter of July 17, 2000, the SSS Legal Department denied a reconsideration of the
denial of his claim,[13] prompting petitioner to submit a letter-opposition of August 15, 2000.
Petitioner's motion for reconsideration having been denied by Order[28] of January 29, 2003,
petitioner appealed via Rule 43 to the Court of Appeals[29] which promulgated in CA-G.R. SP
No. 75653 the assailed issuances affirming in... toto the SSC Resolution and Order.
ndeed, the evidence indicates that petitioner's condition at the time material to the case does
not fall under the enumeration in the above-quoted provisions of the Social Security Law.
Moreover, as correctly held by the appellate court, the proviso of such provisions on the...
percentage degree of disability applies when there is a related deterioration of the illness
previously considered as partial permanent disability. In this case, there is dearth of evidence
on the proposition that petitioner's array of illnesses is related to Generalized
Arthritis and Partial Ankylosis of the specific body parts.

Issues:
whether he is entitled to total permanent disability benefits from the SSS given his "angioplasty
operation of the heart, coronary artery disease, ischemic heart disease, severe hypertension
and a host of other serious illnesses filed with the SSS

Ruling:
In this case, the SSS medical examiners are tasked by law to analyze the extent of personal
incapacity resulting from disease or injury. Oftentimes, a physician who is adequately versed in
the knowledge of anatomy and physiology will find himself deficient when called upon to...
express an opinion on the permanent changes resulting from a disability. Unlike the general
practitioner who merely concerns himself with the examination of his patient for purposes of
diagnosis and treatment, the medical examiner has to consider varied factors and ascertain
the... claimant's related history and subjective complaints.[66] The members of this Court
cannot strip their judicial robe and don the physician's gown, so to speak, in a pretense to
correlate variances in medical findings.
Finding no cogent reason to discuss the ancillary issues, the Court dismisses the petition,
without prejudice to the filing of a new application by petitioner who is not left without any
recourse in his legal bout respecting his supervening claims anchored mainly on Coronary
Artery Disease 1VD and Diabetes Mellitus Type 2, these illnesses having been found to be
dissimilar from the subject matter of the present action.[67]
WHEREFORE, the petition is, in light of the foregoing disquisitions, DENIED.

Feeder International Line PTE, Ltd. vs. Court of Appeals

GR 94262
31 May 1991

Facts: The M/T "ULU WAI" a foreign vessel of Honduran registry, owned and operated by
Feeder International Shipping Lines of Singapore, left Singapore on 6 May 1986 carrying 1,100
metric tons of gas oil and 1,000 metric tons of fuel oil consigned to Far East Synergy
Corporation of Zamboanga, Philippines. On 14 May 1986, the vessel anchored at the vicinity of
Guiuanon Island in Iloilo without notifying the Iloilo customs authorities. The presence of the
vessel only came to the knowledge of the Iloilo authorities by information of the civilian
informer in the area. Acting on said information, the Acting District Collector of Iloilo dispatched
a Customs team on 19 May 1986 to verify the report. The Customs team found out that the
vessel did not have on board the required ship and shipping documents, except for a clearance
from the port authorities of Singapore clearing the vessel for "Zamboan." In view thereof, the
vessel and its cargo were held and a Warrant of Seizure and Detention over the same was
issued after due investigation. Feeder International Line PTE Ltd, through its agent Feeder
International (Phils.) Inc. then filed its Motion to Dismiss and to Quash the Warrants of Seizure
and Detention which the District Collector denied in his Order dated 12 December 1986. In the
course of the forfeiture proceedings, the parties, through their respective counsel, agreed on a
stipulation of facts. On 17 March 1987, the District Collector issued his decision, finding the M/T
"ULU WAI" guilty of violating Section 2530 (a) of the Tariff and Customs Code of the Philippines
(PD 1464), as amended, while her cargo of 1,100 M/T Gas Oil and 1,000 M/T Fuel Oil are found
guilty of violating Section 2530 (a), (f), and (1-1) under the same Code and are hereby forfeited
in favor of the Republic of the Philippines. Feeder International appealed to the Commissioner
of Customs who rendered a decision dated 13 May 1987, affirming the decisin of the District
Collector of Customs of Iloilo in toto. On 25 June 1987, Feeder International filed a petition for
review of the decisions of the Collector and the Commissioner of Customs with the Court of Tax
Appeals, praying for the issuance of a writ of preliminary injunction and/or a restraining order
to enjoin the Commissioner from implementing his decision.

Issue: Whether a forfeiture proceeding is penal in nature, and whether the corporation can
invoke the right to be presumed innocent.

Held: A forfeiture proceeding under tariff and customs laws is not penal in nature, contrary to
the argument advanced by Feeder International. In the case of People vs. Court of First Instance
of Rizal, etc., et al., the Court made an exhaustive analysis of the nature of forfeiture
proceedings, in relation to criminal proceedings, holding therein that "seizure and forfeiture
proceedings under the tariff and customs laws are not criminal in nature as they do not result in
the conviction of the offender nor in the imposition of the penalty provided for in Section 3601
of the Code. As can be gleaned from Section 2533 of the code, seizure proceedings are purely
civil and administrative in character, the main purpose of which is to enforce the administrative
fines or forfeiture incident to unlawful importation of goods or their deliberate possession. The
penalty in seizure cases is distinct and separate from the criminal liability that might be
imposed against the indicted importer or possessor and both kinds of penalties may be
imposed. Considering, therefore, that proceedings for the forfeiture of goods illegally imported
are not criminal in nature since they do not result in the conviction of the wrongdoer nor in the
imposition upon him of a penalty, proof beyond reasonable doubt is not required in order to
justify the forfeiture of the goods. The degree of proof required is merely substantial evidence
which means such relevant evidence as a reasonable mind might accept as adequate to support
a conclusion. Further, a corporate entity has no personality to invoke the right to be presumed
innocent which right is available only to an individual who is an accused in a criminal case.
Herein, the Court finds and so hold that the Government has sufficiently established that an
illegal importation, or at least an attempt thereof, has been committed with the use of the
vessel M/T "ULU WAI," thus warranting the forfeiture of said vessel and its cargo pursuant to
the provisions of the Tariff and Customs Code. Feeder International is guilty of illegal
importation, there having been an intent to unload, is amply supported by substantial evidence.
The findings of fact of the Court of Appeals are in consonance with the findings of both the
Collector and the Commissioner of Customs, as affirmed by the Court of Tax Appeals..

CARRARA MARBLE PHILIPPINES, INC., v. COMMISSIONER OF CUSTOMS

Facts: On April 10, 1987, the Collector of Customs conducted a public auction sale of various
articles duly declared abandoned after appropriate proceedings. Included in the sale was Lot 15
advertised as "15 tons more or less, of marble processing machine and grinding machine, rusty
and in junk condition," stored at the Mina Amapola CY-CFS, Taguig, Metro Manila, since 1979.
Lot 15 was awarded to Engr. Franklin G. Policarpio as the highest bidder thereof, after payment
of P61, 250.00.

On April 21, 1987, after Engr. Policarpio had taken delivery of said lot, he wrote the Collector of
Customs informing him that the following items supposed to be part of Lot 15 were missing: a
Special Circular Saw (for vertical and horizontal cutting of strips Model Block Tailor BK-1200
with switch gear and contractor control and reinforcement main motor) and a Diamond Sawing
Machine (Model TBS 500D, including switch gear cabinet with contractor for all motors).

The missing machineries were later found installed in the compound of petitioner Carrara
Marble Philippines, Inc., Lipa City, Batangas, true to the information furnished by Engr.
Policarpio himself.

Consequently, for alleged violations of Section 2536 (non-payment of duties and taxes) and
Section 2530[e] (illegal removal of articles from the warehouse) of the Tariff and Customs Code
(TCC), the aforesaid machineries were seized (per Warrant of Seizure and Detention dated May
29, 1991) from the compound of petitioner at Banay-banay, Lipa City.

Issue: Was the dismissal of the petition by the Court of Appeals under Section 1, Rule 9 of its
Revised Internal Rules of Procedure correct?

Ruling: Petitioner cannot find fault with the denial of its motion for reconsideration. It admitted
non-compliance with the requisites of Section 1, Rule 9 of the Revised Internal Rules of
Procedure of the Court of Appeals, for indeed nothing in the motion indicated that it was filed
on time. Its Compliance anteriorly filed did not cure the defect. It must be stressed that the rule
was designed to save the Court of Appeals from reviewing the record to determine whether the
motion was indeed filed on time.

PPA v Fuentes
GR No. 91259
April 6, 1991

FACTS: This petition for review with prayer for a writ of preliminary injunction and/or
restraining order filed by petitioners, Philippine Ports Authority ("PPA" for brevity), Port
Manager Bienvenido Basco and the Port District Manager, Ernesto Fernando of Davao City,
challenges the jurisdiction of the Regional Trial Court of Davao City, Branch 17, in a case
involving the legality of port charges imposed by the PPA on the respondent Terminal Facilities
and Services Corporation ("TEFASCO" for brevity). The port charges in question include: (1)
100% wharfage dues and berthing fees and (2) the 10% government share in
arrastre/stevedoring revenues and/or privilege fee, pursuant to Section 1213 of the Tariff and
Customs Code.
On July 11, 1974, P.D. No. 505 was promulgated, creating the Philippine Ports Authority (PPA).
The Decree was later amended by P.D. No. 857 dated December 23, 1975 (otherwise known as
the Revised PPA Charter). Under the Decree, the PPA is entrusted with the function of carrying
out an integrated program for the planning, development, financing and operation of ports and
port districts throughout the country. The powers, duties and jurisdiction of the Bureau of
Customs concerning arrastre operations were transferred to and vested in the petitioner PPA
(Philippine Ports Authority vs. Mendoza, 138 SCRA 496, 503). Pursuant to said decree, PPA was
authorized to "regulate the rates or charges for port services or port related services so that,
taking one year with another, such rates or charges furnish adequate working capital and
produce an adequate return on the assets of the Authority" (PPA) (Section 20[b] and "to levy
dues, rates, or charges for the use of the premises, works, appliances, facilities, or for services
provided by or belonging to the Authority or any other organization concerned with port
operations" (Section 6[b] [IX]). Furthermore, the PPA was authorized to impose a ten percent
(10%) charge on the monthly gross earnings of the operators of arrastre and stevedoring
services (also known as Government Share).
In its Board Resolution No. 7 dated April 21, 1976 embodying the "Memorandum Agreement,"
PPA laid down the terms and conditions under TEFASCO was allowed to construct specialized
port and terminal facilities for incoming and outgoing foreign and domestic vessels and
authorized to render port services, particularly, arrastre and stevedoring services on incoming
and outgoing cargoes loaded on or unloaded from foreign and domestic vessels. On August 30,
1988, TEFASCO filed in the trial court a complaint for "declaration of nullity, prohibition,
mandamus and damages with writ of preliminary injunction" against PPA.
In an order dated December 14, 1988 , the trial court granted TEFASCO's application for a writ
of preliminary injunction. In an order dated June 21, 1989, Judge Fuentes denied the motion.

ISSUE: WON Jurisdiction is upon the Court of Tax Appeals to review appeals from decisions or
rulings of the Philippine Ports Authority?

RULING: Since jurisdiction is conferred by law (Commissioner of Internal Revenue vs. Villa, 22
SCRA 4); and under P.D. 857, the collection of port charges ceased to be an administrative
function of the Bureau of Customs and was transferred to the PPA; that neither P.D. 857 nor
R.A. 1125 contains a provision for an appeal to the Court of Tax Appeals from decisions of the
PPA; and further considering that the Court of Tax Appeals is a specialized court of limited
jurisdiction, no appellate jurisdiction over PPA decisions may be vested in the Court of Tax
Appeals by mere implication. This issue was set at rest by the decision of this Court in Victorias
Milling Co., Inc. vs. Court of Tax Appeals (CTA Case No. 3466, Victorias Milling Co., Inc. vs. PPA),
G.R. No. 66381, February 29, 1984, where we ruled:
There is no law or statute which expressly vests jurisdiction upon the Court of Tax Appeals to
review appeals from decisions or rulings of the Philippine Ports Authority . . . . The jurisdiction
of a court to take cognizance of a case, we believe, should be clearly conferred and should not
be deemed to exist on mere implication, specifically with respect to the Court of Tax Appeals
which is a specialized court of limited jurisdiction. (Emphasis supplied.)
In view of the foregoing, we deem it unnecessary to discuss the other issues raised in the
petition.

ILLUH ASAALI, HATIB ABDURASID v. THE COMMISSIONER OF CUSTOMS

GR No. L-24170,        

December 16, 1968

Facts:

At noontime of September 10, 1950, five sailing vessels, from Borneo toward the ports of Tawi-
tawi and Sulu, were spotted and intercepted in high seas by the Custom Patrol Team. The said
patrol team aboard Boat ST-23 found out that the five vessels contained 181 cases of “Herald”
cigarettes, 9 cases of “Camel” cigarettes, and some rattan chairs. The sailing vessels were all
Philippine registered, owned and manned by Filipino residents from Sulu. Petitioners, however,
possessed no permit from the Commissioner of Customs so that they can engage in the
importation of the goods they carry (as required by Section 1363 [a] of the Revised
Administrative Code). Also, the goods the petitioners carry were not covered by RA 426 or the
Import Control Law. The Custom Patrol Team then seized the goods even if they were in the
high seas. Petitioners claim that the interception and seizure of the items were illegal because
they were intercepted outside the territory of the Philippines. Also, the petitioners contend
that they could not have been engaged to the importation of the above-mentioned items to
incur the forfeiture under Section 1363 of the Revised Administrative Code. The Court of Tax
Appeals held that Section 1363 should be applied because all the vessels were all headed to
Tawi-tawi. No import license and permit were carried violating RA 426. Their course, that is—
they are about to enter the Philippine territory, announced loudly that they were about to
import these items in the Philippines.

Issues:

Whether or not the interception and seizure by customs officials of the vessels valid in the
contention that importation had not yet begun and that the seizure was effected outside our
territorial waters.

Ruling:

The Court affirmed the decision of the Court of Tax Appeals stating that “it is quite irrational for
Filipino sailors …to sneak out of the Philippines…and come a long way back laden with highly
taxable goods only to turn about upon reaching the brink of our territorial waters and head for
another country”. Further, the Court said that the contention, regarding the apprehension and
seizure of the items, of the petitioner-appellant is without merit. The vessels are all Philippine
registered and are therefore under the jurisdiction of the Philippines as expressed in the
Revised Penal Code. The petitioners also violated Section 1363(a). Therefore, the action taken
then by the Commissioner of Customs was in accordance to the law.

Commissioner of Customs vs. Manila Star Ferry Inc., et al. 

G.R. No. L-31776-78

Facts: 

          Private respondents Manila Star Ferry, Inc. and the United Navigation & Transport
Corporation are domestic corporations engaged in the lighterage business and are the owners
and operators, respectively, of the tugboat Orestes and the barge-lighter UN-L-106. Private
respondent Ceaba Shipping Agency, Inc. (Ceaba) is the local shipping agent of the Chiat Lee
Navigation Trading Co. of Hongkong, the registered owner and operator of the S/S Argo, an
ocean-going vessel. 

On June 12, 1966, the S/S Argo, the Orestes and the UN-L-106, as well as two wooden
bancas of unknown ownership, were apprehended for smuggling by a patrol boat of the
Philippine Navy along the Explosives Anchorage Area of Manila Bay. The patrol boat caught the
crew of the S/S Argo in the act of unloading foreign-made goods onto the UN-L-106, which was
towed by the Orestes and escorted by the two wooden bancas. All of the goods consisting of
330 cases of foreign-made cigarettes, assorted ladies' wear, clothing material and plastic bags
were not manifested and declared by the vessel for discharge in Manila. No proper notice of
arrival of the S/S Argo was given to the local customs authorities. 

Consequently, seizure and forfeiture proceedings were separately instituted before the
Collector of Customs for the Port of Manila against the S/S Argo and its cargo, the Orestes, the
UN-L-106  and the two bancas, charging them with violations of Section 2530 (a), (b) and (c) of
the Tariff and Customs Code. Criminal charges were likewise filed against the officers and crew
of said vessels and watercraft. 

Issues: 
1. Whether or not the S/S Argo, a vessel engaged in smuggling "in a port of entry", can
be   forfeited. 
 
Held: 

1. Section 2530(a) of the Tariff and Customs Code in unmistakable terms provides that a
vessel engaged in smuggling "in a port of entry" cannot be forfeited. This is the clear and
plain meaning of the law. It is not within the province of the Court to inquire into the
wisdom of the law, for indeed, we are bound by the words of the statute. Neither can we
put words in the mouths of the lawmaker. A verba legis non est recedendum. 
 It was only in 1972, after this case was instituted, when the questioned exception
("except a port of entry") in Section 2530(a) of the Tariff and Customs Code was deleted by P.D.
No. 74. 

Nevertheless, although the vessel cannot be forfeited, it is subject to a fine of not more
than P10,000.00 for failure to supply the requisite manifest for the unloaded cargo under
Section 2521 of the Tariff and Customs Code. 

The barge-lighter UN-L-106 and the tugboat Orestes, on the other hand, are subject to
forfeiture under paragraph (c) of Section 2530 of the Tariff and Customs Code. The barge-lighter
and tugboat fall under the term "vessel" which includes every sort of boat, craft or other
artificial contrivance used, or capable of being used, as a means of transportation on water (R.A.
No. 1937, Section 3514). Said section 2530 (c) prescribes the forfeiture of any vessel or aircraft
into which shall be transferred cargo unladen contrary to law before the arrival of the vessel or
aircraft at her port of destination. Manila was not the port of destination, much less a port of
call of the S/S Argo, the importing vessel. The S/S Argo left Hongkong and was bound for
Jesselton, North Borneo, Djakarta and Surabaja, Indonesia; and yet it stopped at the Port of
Manila to unload the smuggled goods onto the UN-L-106 and the Orestes. 

Viduya v Berdiago

73 SCRA 553 (1976)

FACTS:

Respondent Berdiago is the owner of a Rolls Royce car, Model 1966, which arrived in the
Port of Manila on January 8, 1968. However, the petitioner, Jose Viduya, then Collector of
Customs of Manila, obtained reliable intelligence that fraudulent documents were used by
Berdiago in securing the release of the car from the Bureau of Customs, making it appear
therein that the car was a 1961 model instead of a 1966 one, thus enabling respondent to pay a
much lower customs duty.

There was, accordingly, a formal demand for the payment of the sum to cover the deficiency,
respondent manifesting his willingness to do so but failing to live up to his promise. As the car
was kept in a dwelling house at the Yabut Compound, two officials of the Customs Police
Service as duly authorized agents of petitioner, applied to respondent Judge for a warrant to
search said dwelling house and to seize the Rolls Royce car found therein.

Berdiago filed a motion to quash the search warrant issued by the court based on lack of
probable cause to issue the warrant. Collector Viduya opposed, alleging that Berdiago could not
rely on the constitutional right against unreasonable search and seizure because it was not
shown that he owned the dwelling house which was searched. Nonetheless, respondent Judge
in the challenged order quashed such search warrant. Hence, this petition.
ISSUE: Whether or not respondent Judge committed grave abuse of discretion in quashing the
warrant

HELD: The Court opined that except in the case of the search of a dwelling house, persons
exercising police authority under the customs law may effect search and seizure without a
search warrant in the enforcement of customs laws. There is justification then for the insistence
on the part of private respondent that probable cause be shown. So respondent Judge found in
issuing the search warrant.

Apparently, he was persuaded to quash it when he noted that the warrant for seizure and
detention came later than its issuance. In thus acting, respondent Judge apparently overlooked
that long before the search warrant was applied for, to be specific on April 15, 1968, the
misdeclaration and underpayment was already noted and that thereafter on April 24, 1968,
private respondent himself agreed to make good the further amount due but not in the sum
demanded.

As the car was kept in a dwelling house, petitioner through two of his officers in the Customs
Police Service applied for and was able to obtain the search warrant. Had there been no such
move on the part of petitioner, the duties expressly enjoined on him by law assess and collect
all lawful revenues, to prevent and suppress smuggling and other frauds and to enforce tariff
and customs law would not have been performed.

Bastida v Commissioner of Customs

GR No L-24011, October 24, 1970

FACTS:

Customs authorities seized from respondent various checks, money orders, and traveler's
checks payable in US dollars. The respondent opposed as to the forfeiture of these checks
contending that they are not "merchandise" as contemplated by law.

ISSUE: Whether or not the various check may be forfeited.

HELD: Yes. Merchandise, when used with reference to importations or exportations , includes
goods, wares, and in general anything that may be made the subject of importation or
exportation. That part of the definition of "merchandise" which states, "in general anything that
may be made the subject of importation or exportation," is sufficiently clear and
comprehensive to include checks and money orders.
Chia v Acting COC
GR No. 43810, September 26,1989
FACTS:
A verified report of a confidential informant that asserted electronic and electrical equipment
and other articles illegally imported into the Philippines by a syndicate engaged in unlawful
“shipside” activities (foreign goods are unloaded form foreign ships in transit through the
Bureau of Customs, thereby evading payment of the corresponding customs duties, and were
found inside the “Tom’s electronics” and “Sony Merchandising” after valuation, the Collector
of Customs issued warrants of seizure and detention Nos: 14925 ad 14925-A.
Various electronics equipment like cassette tape recorders, car stereos, phonograph needles,
portable TV sets, imported long playing records, spare parts of TVs and Radios and other
electrical appliances
ISSUE: Whether the warrants of seizure and detention are general warrant issued in violation
of Rule 126, Sections 3 of Rules of Court?
HELD: Petition dismissed.
RATIONALE:
Section 2208 (Customs) – Tariff and Customs Code – Right of Police Officer to enter in closure,
a warehouse, store, or other building or in closure used for keeping or storage or articles does
not become a dwelling house within the meaning.
Section 2536 (Seizure of other articles) – The Commissioner of Customs and Collector of
Customs and or any other Customs officer, with the prior authorization in writing by the
commissioner, may demand evidence of payment of duties and taxes on foreign articles.
Search of Dwelling House (Section 2209) – Upon warrant issued by a Judge of the Court or
such other responsible officers as may be authorized by law, upon sworn application showing
probable cause and particularly describing the place to be searched and the person or thing to
be seized.
The warrants issued by the Collector of Customs in this case were not general warrant, as
erroneously alleged by petitioner for they identified the stores to be seized, described the
articles to be seized and specified the provision of the Tariff and Customs Code

National Development Company Vs Collector of Customs

GR No. L-19180, 31 October 1963
9 SCRA 429

FACTS:
            The customs authorities found that the vessel carried on board an unmanifested cargo
consisting of one television set, and respondent Collector of Customs sent a written notice to
the operator of the vessel and the latter answered stating that the television set was not cargo
and so was not required by law to be manifested. The operator requested an investigation and
hearing but respondent finding the operator’s explanation not satisfactory imposed on the
vessel a fine of P5,000.00, ordering said fine to be paid within 48 hours from receipt, with a
threat that the vessel would be denied clearance and a warrant of seizure would be issued if
the fine will not be paid.

            NDC, as owner, and operator AV Rocha filed for special civil action for certiorari before
the CFI of Manila against the respondent. Respondent contended that petitioners have not
exhausted all available administrative remedies, one of which is to appeal to the Commissioner
of Customs.

ISSUE:    Whether or not the contention of respondent is correct.

HELD:    The Court held in the negative. Respondent Collector committed grave abuse of
discretion because petitioner NDC was not given an opportunity to prove that the television set
involved is not a cargo that needs to be manifested. Exhaustion of administrative remedies is
not required where the appeal to the administrative superior is not a plain, speedy or adequate
remedy in the ordinary course of law, as where it is undisputed that the respondent officer has
acted in utter disregard of the principle of due process

REPUBLIC vs. CFI MANILA and MAYER STEEL PIPE CORP.

G.R. No. 43747
September 2, 1992

FACTS:
In November 13, 1975, the CFI of Manila issued an injunction enjoining the Collector of Customs
(Collector) from enforcing an order to seize some packages of machinery from the Private
Respondent, Mayer Steel Pipe Corporation. 
The complaint with the CFI alleged the lack of due process in the proceedings leading to the
order.

ISSUE: Whether or not the CFI has the jurisdiction to issue an injunction over the order of the
Collector.

HELD: The mandate of the law is very specific.  Section 2312 of the Tariff and Customs Code
provides:
"SEC. 2312. Decision or Action by Collector in Protest And Seizure Cases. — When a protest in
proper form is presented in a case where protest is required, the Collector shall issue an order
for hearing within fifteen (15) days from receipt of the protest and hear the matter thus
presented. Upon the termination of the hearing, the Collector shall render a decision within
thirty (30) days, and if the protest is sustained, in whole or in part, he shall make the
appropriate order, the entry reliquidated if necessary."

On the other hand, Section 2313 of the same law states:

Review by Commissioner. — The person aggrieved by the decision or action of the Collector in
any matter presented upon protest or by his action in any case of seizure may, within fifteen
(15) days after notification in writing by the Collector of his action or decision, give written
notice to the Collector and one copy furnished to the Commissioner of his desire to have the
matter reviewed by the Commissioner. Thereupon the Collector shall forthwith transmit all the
records of the proceedings to the Commissioner, who shall approve, modify or reverse the
action or decision of the collector and take such steps and make such orders as may be
necessary to give effect to his decision.

Section 7 of R.A. No. 1125 (An Act Creating the Court of Tax Appeals) also provides:
Jurisdiction — The Court of Tax Appeals shall exercise exclusive appellate jurisdiction to review
by appeal, as herein provided —
x       x       x
(2) Decisions of the Commissioner of Customs in cases involving liability for customs duties, fees
or other money charges; seizure, detention or release of property affected: fines forfeitures or
other penalties imposed in relation thereto; or other matters arising under the Customs Law or
other law or part of the law administered by the Bureau of Customs.

Feeder International Line v. CA

197 SCRA 842

Facts:
The M/T „ULU WAI‟ a foreign vessel of Honduran registry, owned and operated by Feeder
International Shipping Lines of Singapore, left Singapore on May 6, 1986 carrying 1,100 metric
tons of gas oil and 1,000 metric tons of fuel oil consigned to Far East Synergy Corporation of
Zamboanga, Philippines. On May 14, 1986, the vessel anchored at the vicinity of Guiuanon
Island in Iloilo without notifying the Iloilo customs authorities. The presence of the vessel only
came to the knowledge of the Iloilo authorities by information of the civilian informer in the
area. Acting on said information, the Acting District Collector of Iloilo dispatched a Customs
team on May 19, 1986 to verify the report. The Customs team found out that the vessel did not
have on board the required ship and shipping documents, except for a clearance from the port
authorities of Singapore clearing the vessel for „Zamboanga.‟ The District Collector issued his
decision finding the said vessel and her cargo in violation of the Tariff and Customs Code of the
Philippines (PD 1464). The same was affirmed by both Custom Commissioner and Court of Tax
Appeals.

Issue: Whether or not the petitioner was deprived of property without due
process of law in that its right to be presumed innocent was not recognized .
Ruling:
No, the petitioner, which is a corporate entity, has no personality to invoke the right to be
presumed innocent which right is available only to an individual who is an accused in a criminal
case.

Republic v Lim Tian Teng

16 SCRA 584

Facts: Lim Tian Teng Sons & Co., a domestic corporation with principal office in Cebu City,
engaged in 1951 and 1952, among others, in the exportation of copra. The copra was weighted
before shipment in the port of departure and upon arrival in the port of destination. The weight
before shipment was called copra outturn. To allow for loss in weight due to shrinkage said
exporter collected only 95% of the amount appearing in the letter of credit covering every
copra outturn. The 5% balance remained outstanding until final liquidation and adjustment.

On March 30, 1953 Lim Tian Teng Sons & Co. filed its income tax return for 1952 based on
accrued income and expenses. Its return showed a loss of P55, 109.98. It took up as part of the
beginning inventory for 1952 the copra outturn shipped in 1951 in the sum of P95,500.00
already partially collected, as part of its outstanding stock as of December 31, 1951.

In the audit and examination of taxpayer’s 1952 income tax return, the CIR eliminated the
P95,500.00 outturn from the beginning inventory for 1952 and considered it as accrued income
for 1951. This increased taxpayer’s 1952 net taxable income. Accordingly, in a letter dated
January 16, 1957 received by Lim Tian. On January 30, 1957, the CIR assessed a deficiency
income tax of P10,074.00 and 50% surcharge them amounting to 5,037.00 and demanded
payment thereof not later than February 15, 1954.

Issue: Whether or not the Commissioner is required to rule first on the taxpayer’s request for
reinvestigation before he can go to count for collecting the tax assessed.

Held: Nowhere in the Tax Code is the Commissioner required to rule first on the taxpayer’s
request for reinvestigation before he can go to court for the purpose of collecting the tax
assessed. According to the court, the legislative policy is to give the Commissioner much
latitude in the speedy and prompt collection of taxes because it is on taxation that the
government depends to obtain the means to carry in its operations.

When the commissioner did not reply to the tax payer’s request for
reinvestigation/reconsideration and instead referred the case to the solicitor general for judicial
collection, this was indicative of his decision against reinvestigation
CIR v Alikpala

GR No. L-32542, November 26, 1970

FACTS:

The Commissioner of Customs and the Collector of Customs for the port of Manila have come
to this Court on a petition for certiorari and prohibition with preliminary injunction, to declare
null and void and set aside certain orders of respondent Court of First Instance of Manila, Judge
Federico C. Alikpala presiding, in Civil Case No. 80655 entitled "Gonzalo Sy, doing business
under the name and style of Gonzalo Sy Trading, and Tomas Y. de Leon, doing business under
the name and style of T. Y. de Leon Enterprises, petitioners, vs. The Commissioner of Customs
and the Collector of Customs, respondents." That case was a petition for injunction with a
prayer for a writ of preliminary injunction.

The basic order complained of is that issued on August 26, 1970. On September 23, 1970 this
Court gave, due course to the present petition and resolved to issue a restraining order
"enjoining respondent Judge from executing his order dated August 26, 1970 ... insofar as it
directed the petitioners herein from releasing to the custody of the respondents the imported
goods in question." In due time the respondents filed their answer to the petition and
subsequently both parties submitted their respective memorandum in lieu of oral argument.

ISSUE: Whether or not respondent Court gravely abused its discretion in issuing the orders
complained of, particularly that dated August 26, 1970

HELD: The options presented in this case are few and clearcut: (1) to sell the imported fresh
fruits at public auction, as the petitioners due insist; (2) to release them to the private
respondents upon the filing of sufficient surety bonds, as respondent Court has directed; and
(3) to require the private respondents to file a cash bond instead.

CIR v Ayala Securities Corp. and CTA

GR No. L-29485, March 31, 1976

FACTS:

Respondent, in a letter dated April 19, 1961 protested against the assessment issued by
petitioner in a letter dated February 21 1961 on its retained and accumulated surplus
pertaining to the taxable year 1955 and sought reconsideration thereof. On February 21, 1963,
respondent received a letter dated February 18, 1963 from petitioner calling the attention of
the respondent to its outstanding and unpaid tax and thereby requesting for the payment of
the same within five (5) days from receipt of the said letter.

Believing the aforesaid letter to be a denial of its protest, respondent corporation filed a
petition for review with CTA.

ISSUE: Whether or not the February 18, 1963 letter amounted to a denial of respondent's
protest.

HELD: Yes. The letter of February 18, 1963 is tantamount to a denial of the reconsideration or
protest of the respondent corporation on the assessment made by the petitioner, considering
that the said letter is in itself a reiteration of the demand by the BIR for the settlement of the
assessment already made, and for the immediate payment in spite of the vehement protest of
the respondent corporation on April 21, 1961. This certainly is a clear indication of the firm
stand of the petitioner against the reconsideration of the disputed assessment in view of the
continued refusal of the respondent corporation to execute waiver of the period of limitation
upon the assessment in question. This being so, the said letter amounts to a decision on a
disputed or protested assessment.

4CIR vs. Gonzales

L-19495
Nov. 24, 1966

Facts:
In 1948, Matias Yusay died leaving behind two heirs, namely, Jose Yusay and Lilia Yusay
Gonzales. Jose was appointed as administrator. He filed an estate and inheritance tax return in
1949. The Bureau of Internal Revenue (BIR) conducted a tax audit and the BIR found that there
was an under-declaration in the return filed. In 1953 however, a project of partition between
the two heirs was submitted to the BIR. The estate was to be divided as follows: 1/3 for
Gonzales and 2/3 for Jose. The BIR then conducted another investigation in July 1957 with the
same result – there was a huge under-declaration. In February 1958, the Commissioner of
Internal Revenue issued a final assessment notice (FAN) against the entire estate. In November
1959, Gonzales questioned the validity of the FAN issued in 1958. She averred that it was issued
way beyond the prescriptive period of 5 years (under the old tax code). The return was filed by
Jose in 1949 and so the CIR’s right to make an assessment has already prescribed in 1958.

Issue:
Whether or not Gonzales is correct
Ruling:
No. It was found that Jose filed a return which was so defective that the CIR cannot make a
correct computation on the taxes due. When a tax return is so defective, it is as if there is no
return filed, hence, it is considered that the taxpayer omitted to file a return. As such, the five
year prescriptive period to make an assessment (NOTE: Under the National Internal Revenue
Code of 1997, prescriptive period for normal assessment is 3 years) is extended to 10 years.
And the counting of the prescriptive period shall run from the discovery of the omission (or
fraud or falsity in appropriate cases). In the case at bar, the omission was deemed to be
discovered in the re-investigation conducted in July 1957. Hence, the FAN issued in February
1958 was well within the ten year prescriptive period. Gonzales was adjudged to pay the
deficiency tax in the FAN, without prejudice to her right to ask reimbursement from Jose’s
estate (Jose already died).

Surigao Electric vs. CTA

L-25289
June 28, 1974
COC vs. Planters Product
GR 82618
March 16, 1989
DYPAC vs. CTA
L-31369
Oct. 18, 1977

FACTS: There is no debate that the petitioner's case is covered by Section 7 of Republic Act
1125 and, therefore, comes within the jurisdiction of the respondent court. But was said
jurisdiction invoked by the petitioner within the period prescribed by Section 11? The central
question is: which was the appealable decision of the Commissioner, the letter dated October
18, 1967 which was received by the petitioner on November 7, 1967, as the respondents
contend, or the letter of May 23, 1968 which was received by the petitioner on June 5, 1968, as
the petitioner insists? If the latter, then the petition for review filed with the respondent court
on July 5, 1968 was timely; if not, the assessment had become final and executory.

ISSUE: What is the point from which to appeal?

RULING: We hold that the point from which the period to appeal should be counted is the
receipt by the petitioner on November 7, 1967 of the letter dated October 18, 1967 of the
respondent Commissioner
The argument then that in computing the 30-day period prescribed by Section 11 of Republic
Act No. 1125, the letter of the respondent Commissioner of May 23, 1968 denying the third
request for reconsideration addressed to the Secretary of Finance should be considered as the
final decision contemplated in Section 7, becomes untenable.
It is worth mentioning in this connection that all the petitions for reconsideration were
premised on the same grounds. By his successive motions, the petitioner was able to delay the
payment of the taxes due from it for two years, which, of course, is inimical to the interests of
the State. The third request for reconsideration directed to the Secretary of Finance did not
adduce new grounds. It may, therefore, be considered a mere pro-forma motion intended for
the convenience of the petitioner.

8Morales vs. CIR

L-16759
aug. 31, 1966

FACTS: On December 18, 1959 the Tax Court, finding that what was properly appealable to it
was respondent's letter-decision of December 28, 1956 and not that of December 5, 1958,
ruled that the appeal was filed out of time and so dismissed the petition motu proprio. This is
the ruling that is now before Us for review.
Petitioner assails the ruling as erroneous and points out that in his petition for review before
the Court of Tax Appeals he specifically stated that respondent's letter of December 5, 1958
was the decision he was appealing from, and therefore his petition, filed only three days later,
was timely.

ISSUE: On what particular issue decided by respondent did petitioner seek a review in the Court
of Tax Appeals?

RULING: Petitioner says there is no proof as to when he received the letter-decision of

December 28, 1956. But it cannot be denied that he did receive it. While in his memorandum
he raises a doubt on the point, in his brief he impliedly admits such receipt by alleging that he
chose to ignore said letter and "to treat it as an innocuous demand." At any rate, on March 25,
1958 petitioner personally received respondent's letter of the same date, making reference to
the demand for payment contained in the letter of December 28, 1956. Consequently, even if
only the receipt of the second letter be considered as notice of the decision, the petition for
review filed in the Court of Tax Appeals on December 8, 1958 was still out of time.
Finally, since petitioner insists that he is not appealing from the decision of December 28, 1956,
the same has become final and unappealable (Uy Ham v. Republic, L-13809, October 20, 1959;
Republic v. Del Rosario, L-10460, March 11, 1959; Republic v. Manila Port Service, L-18028,
November 27, 1964) and the matter resolved therein, that is, whether or not the deficiency
assessments against him were barred by prescription, could no longer be reopened through the
expedient of an appeal from the denial of petitioner's request for cancellation of the warrant of
distraint and levy.

Tuazon & Legarda vs. CIR

L-18552
Sept. 30, 1965

FACTS: The respondent contends that his letter dated July 3, 1959 wherein he demanded of
petitioner the payment of the reduced assessment of P2,814.95, plus the compromise penalty,
is the decision appealable to the Court of Tax Appeals, and that, as a consequence, the period
of appeal should be counted from the date when petitioner received notice thereof, namely
August 12, 1959.
Upon the other hand, petitioner claims that the petition for review was filed within the 30-day
period because the latter should be counted from January 20, 1960, the date when it was
served with the warrant of distraint and levy.

ISSUE: Whether the petition for review was filed within the 30-day period prescribed in Section
11 of Republic Act No. 1125

RULING: The letter of respondent dated July 3, 1959 was, in legal contemplation, the ruling or
decision from which petitioner should have appealed to the Court of Tax Appeals; that from
August 12, 1959 — when petitioner received said letter — to the 15th of the same month and
year — the date when petitioner, by way of a motion for reconsideration, reiterated its written
request for authority to destroy the distilled spirits and compounded liquors in its possession —
petitioner consumed three (3) days of the period of appeal, that from October 15, 1959 — the
date when petitioner received respondent's letter of September 30, 1959 denying his second
request for authority to destroy the merchandise taxed — to February 11, 1960 when the
petition for review was filed, more than three months elapsed.
In computing the period of appeal in this case, the court believe that petitioner's last written
request for authority to destroy the distilled spirits and compounded liquors in question did not
suspend the running of said period, because it was a mere reiteration of two previous petitions
already denied by respondent. Consequently, the conclusion is inevitable that when petitioner
filed its petition for review with the Court of Tax Appeals, the questioned assessment had
already become final, executory and incontrovertible.

Roman Catholic vs. CIR

 L-16683
Jan. 31, 1962

FACTS: On December 4, 1957, respondent issued a warrant of distraint and levy against the
properties of the Roman Catholic Church of D. Jakosalem St., Cebu City, to satisfy the sums of
P1,916.25 and P2,617.65 as deficiency income tax and surcharge due for 1955 and 1956.
On February 7, 1958, petitioner paid under protest the total amount of P5,201.52 as income tax
for the years 1955 and 1956, including surcharge and interests. And on February 1, 1958, he
filed before this Court his petition for review. (Annex "E", Petition, pp. 1-3).
The respondent Collector (now Commissioner) of Internal Revenue set up several defenses, one
of which is that petitioner failed to file a claim for refund of the taxes paid as required by
Section 306 of the Tax Code, which claim for the refund is allegedly mandatory and a condition
precedent to an action for the recovery of the taxes paid; and the Tax Court, convinced that the
lack of a claim for refund was fatal to petitioner's appeal, dismissed the same for lack of
jurisdiction to take cognizance thereof. From this ruling, the petitioner appealed to this Court.

ISSUE: WON the appeal was taken within the 30-day period prescribed by section 11 of RA No.
1125.

RULING: The court find the dismissal of petitioner's appeal to be substantially correct, for the
reason that said appeal was not taken within the thirty (30) day period prescribed by section 11
of Republic Act No. 1125. The petitioner has submitted not less than three (3) motions of
requests for the reconsideration of his Tax Assessments Nos. 17-EC-00301-55 and 17-AC-
600107-56. The first he submitted to the Regional Director, and it was denied on July 18, 1957;
the second was on August 18, 1957, addressed to the Collector of Internal Revenue, and was
denied by the latter on November 5, 1957, in a letter received by petitioner on November 21,
1957; and the third request was made on November 23, 1957, and again denied on January 20,
1958, modified to petitioner on February 1, 1958. All motions for reconsideration were
premised on the same grounds, deduction of the depreciation of the buildings in question. The
appeal to the Tax Court was filed only on February 19, 1958.
By these successive motions for reconsideration, the petitioner managed to delay the review of
his case by the Tax Court for nearly two years. Such delays are plainly inimical to the general
interest, ascertainment and collection of taxes being essential to the maintenance of the State.
The decision by the Collector of Internal Revenue dated November 5, 1957, denying the second
request for reconsideration of the assessment, was certainly reviewable by the Court of Tax
Appeals. Hence, the 30-day appeal period should be counted from November 21, 1957, when
the taxpayer received copy of the Collector's ruling. The running of the period was not
interrupted by the filing of the third request for reconsideration, because the latter did not
advance new grounds not previously alleged, and was, therefore, merely pro forma. Therefore,
petitioner's petition for review should have been lodged with the Tax Court not later than
December 21, 1957, but it was actually filed only on February 1, 1958.
1CIR vs. Union Shipping
GR No. 66160
May 21, 1990

Yabes vs. Flojo,

L-46954
July 20, 1982

Facts: In May 1962, Doroteo Yabes received an assessment notice from the Commissioner of
Internal Revenue (CIR) demanding him to pay P15k in taxes. Doroteo filed a protest within the
prescribed period. The protest was initially denied in September 1962 however, a few days
after the denial, the CIR advised Doroteo to execute a waiver of the statute of limitations (SOL)
and to allow the CIR to hold in abeyance the ruling of his case until a similar case (Cirilo
Constantino Case) which involves exactly the same issue would be decided by the Court of Tax
Appeals (CTA). Doroteo complied but while waiting for the CTA to decide that case, Doroteo
died. The CTA finally decided the Constantino Case but the same was appealed to the Supreme
Court (SC). And so the CIR asked the successors-in-interest of Doroteo, Elpidio and Severino
Yabes, to execute another waiver while waiting for the SC decision. The waiver was duly
executed and it extended the period of prescription within which the CIR may collect the
assessed tax to December 31, 1970.
The Constantino Case was decided by the SC in February 1970. On December 4, 1970, before
the lapse of the extended period (12/31/70), the CIR filed a tax collection suit against the estate
of Doroteo Yabes with the Court of First Instance (CFI) of Cagayan. Elpidio et al received the
summons on January 20, 1971. Elpidio et al then filed an appeal with the CTA on February 12,
1971. At the same time, Elpidio et al filed a motion to dismiss (MTD) the collection suit with CFI
Cagayan on the ground that the filing of the collection suit is a denial by the CIR of the protest;
that such denial is appealable to the CTA; that CFI Cagayan therefore has no jurisdiction over
the case. However, Judge Napoleon Flojo of CFI Cagayan denied the MTD.

Issue: Whether or not respondent Court of First Instance can lawfully acquire jurisdiction over a
contested assessment made by the Commissioner of Internal Revenue against the deceased
taxpayer Doroteo Yabes, which has not yet become final, executory and incontestable, and
which assessment is being contested by petitioners in the Court of Tax Appeals, Case No. 2216,
and still pending consideration.

Held: The jurisdiction of the CFI is wanting in this case. The respondent Court of First Instance
of Cagayan can only acquire jurisdiction over this case filed against the heirs of the taxpayer if
the assessment made by the Commissioner of Internal Revenue had become final and
incontestable. If the contrary is established, as this Court holds it to be, considering the
aforementioned conclusion of the Court of Tax Appeals on the finality and incontestability of
the assessment made by the Commissioner is correct, then the Court of Tax Appeals has
exclusive jurisdiction over this case. Petitioners received the summons in Civil Case No. II-7 of
the respondent Court of First Instance of Cagayan on January 20, 1971, and petitioners filed
their appeal with the Court of Tax Appeals in CTA Case No. 2216, on February 12, 1971, well
within the thirty-day prescriptive period under Section 11 of Republic Act No. 1125. The Court
of Tax Appeals has exclusive appellate jurisdiction to review on appeal any decision of the
Collector of Internal Revenue in cases involving disputed assessments and other matters arising
under the National Internal Revenue Code.

CIR vs. Concepcio

L-23912
March 15, 1968
Facts: In CTA Case No. 669, respondent Jose Concepcion, as ancillary administrator of the estate
of Mary H. Mitchell Roberts, and respondent Jack F. Mitchell-Roberts, husband of the deceased,
sought a refund of the sum of P1,181.33 and P2,616.10 representing estate and inheritance
taxes on 50 shares of stock of Edward J. Nell Company issued in the names of both spouses "as
joint tenants with full rights of survivorship and not as tenants in common." The above
assessment was made by petitioner Commissioner of Internal Revenue on the ground that
there was a transmission to the husband of one-half share thereof upon the death of the wife,
the above shares being conjugal property. Respondents maintained on the other hand that
there was no transmission of property since under English law, ownership of all property
acquired during the marriage vests in the husband. Moreover, the shares of stock were issued
to the spouses "as joint tenants with full rights of survivorship and not as tenants in common."
Not being agreeable to the theory entertained by petitioner Commissioner of Internal Revenue,
respondents, in a previous case, CTA Case No. 168, appealed such a decision under Republic Act
No. 1125. The Court of Tax Appeals, however, dismissed such an appeal as the petition for
review because it was filed beyond the reglementary period of 30 days. That decision rendered
on April 29, 1957, became final.
Issue: Whether a taxpayer who had lost his right to dispute the validity of an assessment, the
period for appealing to the Court of Tax Appeals having expired, as found by such Court in a
previous case in a decision now final, and who thereafter paid under protest could then, relying
on Section 306 of the National Internal Revenue Code sue for recovery on the ground of its
illegality?

Held: No. In Republic v. Lim Tian Teng Sons & Co., Inc.,6 the above doctrine was reaffirmed
categorically in this language: "Taxpayer's failure to appeal to the Court of Tax Appeals in due
time made the assessment in question final, executory and demandable, And when the action
was instituted on September 2, 1958 to enforce the deficiency assessment in question, it was
already barred from disputing the correctness of the assessment or invoking any defense that
would reopen the question of his tax liability on the merits. Otherwise, the period of thirty days
for appeal to the Court of Tax Appeals would make little sense." Once the matter has reached
the stage of finality in view of the failure to appeal, it logically follows, in the appropriate
language of Justice Makalintal, in Morales v. Collector of Internal Revenue, that it "could no
longer be reopened through the expedient of an appeal from the denial of petitioner's request
for cancellation of the warrant of distraint and levy."

Aguinaldo vs. CIR

L-29790
Feb. 25, 1982

FACTS: Aguinaldo Industries Corp. is engaged in the manufacture of fishing nets, a tax-exempt
industry, and the manufacture of furniture. For accounting purposes, each division is provided
with separate books of accounts. Previously, Aguinaldo Industries acquired a parcel of land in
Muntinglupa,Rizal, as site of the fishing net factory. This transaction was entered in the books
of the Fish Nets Division of the Company.
Later, Aguinaldo Industries, it sold the said property, the profit from this sale which was
entered in the books of the Fish Nets Division as miscellaneous income to distinguish it from its
tax-exempt income. Petitioner filed two separate income tax returns and after investigation of
these returns, the examiners of the BIR found that the Fish Nets Division deducted from its
gross income P61,187.48 as additional remuneration paid to the officers of Aguinaldo
Industries. The examiner recommended the disallowance of the deduction. It appears from the
books that such deduction was claimed as part of the selling expenses of the land in
Muntinglupa. Aguinaldo Industries insists that said amount should be allowed as deduction
because it was paid to its officers as allowance or bonus pursuant to Section 3 of its by-laws.

ISSUE: Whether the bonus given to the officers of Aguinaldo upon the sale of its Muntinglupa
land is an ordinary and necessary business expense deductible for income tax purposes?

RULING: No. In general, only those ordinary and necessary expenses paid or incurred during the
taxable year in carrying on any trade or business, including a reasonable allowance for personal
services actually rendered can be claimed as a deductible. The bonus given to the officers of the
Aguinaldo Industries as their share of the profit realized from the sale of the land cannot be
deemed a deductible expense for tax purposes, even if the aforesaid sale could be considered
as a transact ion for Carrying on the trade or business of the Aguinaldo Industries and the grant
of the bonus to the corporate officers pursuant to Aguinaldo Industries’ by -laws could, as an
intra-corporate matter, be sustained.
Evidence show that the sale was effected through a broker who was paid by Aguinaldo
Industries a commission for his services. On the other hand, there is absolutely no evidence of
any service actually rendered by Aguinaldo Industries’ officers which could be the basis of a
grant to them of a bonus out of the profit derived from the sale. This being so, the payment of a
bonus to them out of the gain realized from the sale cannot be considered as a selling expense;
nor can it be deemed reasonable and necessary so as to make it deductible for tax purposes.
Thus, the extraordinary and unusual amounts paid by Aguinaldo to these directors in the guise
and form of compensation for their supposed services as such, without any relation to the
measure of their actual services, cannot be regarded as ordinary and necessary expenses within
the meaning of the law.

CIR vs. Procter,

GR No. 66838
April 15, 1988

Facts: Procter and Gamble Philippines declared dividends payable to its parent company and
sole stockholder, P&G USA. Such dividends amounted to Php 24.1M. P&G Phil paid a 35%
dividend withholding tax to the BIR which amounted to Php 8.3M It subsequently filed a claim
with the Commissioner of Internal Revenue for a refund or tax credit, claiming that pursuant to
Section 24(b)(1) of the National Internal Revenue Code, as amended by Presidential Decree No.
369, the applicable rate of withholding tax on the dividends remitted was only 15%.
ISSUE: Whether or not private respondent is entitled to the preferential 15% tax rate on
dividends declared and remitted to its parent corporation.

RULING: No. there is nothing in the aforecited provision that would justify tax return of the
disputed 15% to the private respondent. Furthermore, as ably argued by the petitioner, the
private respondent failed to meet certain conditions necessary in order that the dividends
received by the non-resident parent company in the United States may be subject to the
preferential 15% tax instead of 35%. Among other things, the private respondent failed: (1) to
show the actual amount credited by the U.S. government against the income tax due from
PMC-U.S.A. on the dividends received from private respondent; (2) to present the income tax
return of its mother company for 1975 when the dividends were received; and (3) to submit
any duly authenticated document showing that the U.S. government credited the 20% tax
deemed paid in the Philippines.

Plaridel v. CIR
GR L-21520

FACTS: Petitioner Plaridel Surety & Insurance Co., is a domestic corporation engaged in the
bonding business. On November 9, 1950, petitioner, as surety, and Constancio San Jose, as
principal, solidarily executed a performance bond in the penal sum of P30,600.00 in favor of the
P. L. Galang Machinery Co., Inc., to secure the performance of San Jose's contractual obligation
to produce and supply logs to the latter. San Jose later failed to deliver the logs to Galang
Machinery and the latter sued on the performance bond. On October 1, 1952, the Court of First
Instance adjudged San Jose and petitioner liable. On February 19 and March 20, 1957,
petitioner effected payment in favor of Galang Machinery in the total sum of P44,490.00
pursuant to the final decision. In its income tax return for the year 1957, petitioner claimed the
said amount of P44,490.00 as deductible loss from its gross income and, accordingly, paid the
amount of P136.00 as its income tax for 1957. The Commissioner of Internal Revenue
disallowed the claimed deduction of P44,490.00 and assessed against petitioner the sum of
P8,898.00, plus interest, as deficiency income tax for the year 1957.

ISSUE: WON the P44,490.00 paid by petitioner to Galang Machinery is a deductible loss for
income tax purposes.

RULING: No. Loss is deductible only in the taxable year it actually happens or is sustained.
However, if it is compensable by insurance or otherwise, deduction for the loss suffered is
postponed to a subsequent year, which, to be precise, is that year in which it appears that no
compensation at all can be had, or that there is a remaining or net loss, i.e., no full
compensation. There is no question that the year in which the petitioner Insurance Co. effected
payment to Galang Machinery pursuant to a final decision occurred in 1957. However, under
the same court decision, San Jose and Cuervo were obligated to reimburse petitioner for
whatever payments it would make to Galang Machinery. Clearly, petitioner's loss is
compensable otherwise (than by insurance).itc-alf It should follow, then, that the loss
deduction can not be claimed in 1957.

CIR v. Wander

FACTS: Wander is a domestic corporation, which is a wholly owned subsidiary of Glaro SA Ltd, a
Swiss corporation not engaged in trade or business in the Philippines. In two instances, Wander
filed its withholding tax return and remitted to Glaro (the parent company) dividends, on which
35% tax was withheld and paid to the BIR. Wandee now files a claim for refund of the withheld
tax contending that it is liable only to 15% withholding tax pursuant to Section 24B1 of the Tax
Code. The BIR did not act upon the claim filed by Wander so the corporation filed a petition to
the CTA.

ISSUE: Whether or not Wander is entitled to the 15% withholding tax rate

RULING: Yes. The dividends received from a domestic corporation is liable to a 15% withholding
tax, provided that the country in which the foreign corporation is domiciled shall allow a tax
credit against the taxes due to have been paid in the Philippines. In the case, Switzerland did
not impose any tax on the dividends received by Glaro thus it should be considered as a full
satisfaction of the given condition.

Abra Valley College v Aquino

GR No. L-39086, June 15, 1988

FACTS: Petitioner, an educational corporation and institution of higher learning duly

incorporated with the SEC in 1948 filed a complaint to annul and declare void the Notice of
Seizure and the Notice of Sale of its lot and building located at Bangue, Abra for nonpayment of
real estate taxes and penalties amounting to P5,140.31. The trial court ruled for the
government holding that the second floor of the building is being used by the director for
residential purposes and that the ground floor used and rented by Northern Marketing
Corporation, a commercial establishment, and thus the property is not being used for
educational purposes.

ISSUE: Whether or not the lot and building are used exclusively for educational purposes.

RULING: In the case at bar, the lease of the first floor of the building to the Northern Marketing
Corporation cannot by any stretch of the imagination be considered incidental to the purpose
of education. The test of exemption from taxation is the use of the property for purposes
mentioned in the Constitution. Thus, half of the assessed tax should be returned to petitioner
COC v. Claribel
19 SCRA 234

FACTS: On September 14, 2005, PNB filed a Motion for Partial Reconsideration, asserting its
entitlement to be refunded the amount of P445,578.92, by explaining each transaction involved
and pinpointed by the CTA Division. This however was still denied by the CTA Division in its
Resolution[16] dated November 15, 2005, for lack of merit. Aggrieved, PNB, filed a partial
appeal by way of Petition for Review under Section 18 of Republic Act No. 9282[18] before the
CTA En Banc, to review and modify the CTA Division's August 11, 2005 Decision. This petition
was received by the CTA En Banc on December 27, 2005, four days beyond the additional 15
days granted to PNB to file its petition.

ISSUE: WON the petition for review was correctly denied

RULING: Yes. To recall, PNB filed its petition with the CTA En Banc four days beyond the
extended period granted to it to file such petition. PNB argues that it was filed on time since it
was mailed on the last day of the extended period, which was on December 23, 2005. It has
been established that a pleading "filed by ordinary mail or by private messengerial service x x x
is deemed filed on the day it is actually received by the court, and not on the day it was mailed
or delivered to the messengerial service." It is worthy to note that PNB already asked for an
additional period of 15 days within which to file its petition for review with the CTA En Banc.
This period expired on December 23, 2005. Knowing fully well that December 23, 2005 not only
fell on a Friday, followed by three consecutive non-working days, but also belonged to the
busiest holiday season of the year, PNB should have exercised more prudence and foresight in
filing its petition.

Panoja v. David
1 SCRA 608

FACTS: Pantoja filed this petition for prohibition in the Cebu court of first instance charging the
respondent officers with lack of jurisdiction and abuse of discretion, even as he denied liability
for the internal revenue tax. He said they had given him no opportunity to be heard. He further
alleged prescription of the tax liability and consequent lack of power on the part of the
respondent Collector to levy and distraint his property, inviting attention to the eleven (11)
years that had elapsed from the assessment in 1939 to the distraint in 1950. The three
respondents (the Collector and the two treasurers), moved to dismiss on the ground of lack of
jurisdiction and of cause of action. The court of first instance after denying the motion, and the
subsequent motion to reconsider, set the case for hearing on September 2, 1954. Meanwhile,
the Court of Tax Appeals was organized in June 1954. So, on July 21, 1954, upon motion of
respondents, the Cebu court transferred the case to the Court of Tax Appeals pursuant to sec.
22 of Republic Act 1125.

ISSUE: WON the Court of Tax Appeals has jurisdiction to annul distraint orders by the Collector
of Internal Revenue.

RULING: Yes. The power of the Court of Tax Appeals to act on petitions for the annulment of
distraint orders by the Collector of Internal Revenue has been recognized by this Court in
Collector of Internal Revenue v. Zulueta, 53 Off. Gaz. 6532 and Blaquera v. Rodriguez, 54 Off.
Gaz. 8632. In the first, the reason for annulling was - like the present case - prescription of the
right of the Collecting Officers to issue the warrant of distraint. In the second, this Court
reiterated the view that the Court of Tax Appeals constituted the legal forum wherein to discuss
the validity of a distraint by the Collector of Internal Revenue. Again, in Collector v. Avelino, L-
9202, November 19, 1956, we held that proceedings to invalidate a warrant of distraint or levy
did not violate the prohibition against injunctions to restrain the collection of taxes, because
the proceedings were directed at the right of the Collector to collect it by distraint or levy.

Filipinas Investment v. Commissioner

GR L-23501

FACTS: Respondent Commissioner of Internal Revenue, through the Director of Regional District
No. 3, issued a letter dated April 18, 1961, to petitioner Filipinas Investment & Finance
Corporation, assessing against the latter the sum of P5,007.00 as advance sales tax on an
automobile which it purchased from a tax-exempt individual, plus P300.00 as compromise
penalty, or a total of P5,307.00. Believing itself not liable therefor, petitioner, through counsel,
disputed the above assessment in a letter dated May 15, 1961, and requested that the same be
cancelled and/or withdrawn. (Exhs. 3, B, CTA rec., pp. 64-65). Meanwhile, BIR Assistant
Regional Director Toledo followed up said assessment with a demand letter dated June 21,
1961. Petitioner appealed to the CTA but on August 8, 1964, the Tax Court, after finding that
petitioner consumed thirty-three (33) days in filing its petition for review from the date of
receipt of respondent Commissioner's ruling on the disputed assessment.

ISSUE: WON the petition for review was filed out of time

RULING: Yes. The appealed resolution should be affirmed. It should be noted that respondent
Commissioner's letter-assessment of April 18, 1961 became a "disputed" assessment when
petitioner requested for the cancellation and or withdrawal of the same in its letter of May 15,
1961 (St. Stephen's Association v. Collector of Internal Revenue, G.R. No. L-11238, August 21,
1958); that respondent's letter of August 17, 1962, denying petitioner's request for cancellation
constitutes the decision on the "disputed" assessment, which is appealable to the Tax Court, as
contemplated under Sections 7 and 11 of Republic Act No. 1125;1 that petitioner's letter of
September 28, 1962 which respondent received on October 1, 1962 is a mere pro-forma
request for reconsideration of the letter-decision of August 17, 1962 and did not adduce new
facts or arguments; and that respondent's letter of July 22, 1963 which petitioner received on
August 12, 1963 is the resolution on the said request for reconsideration (North Camarines
Lumber Co., Inc. v. Collector of Internal Revenue, G.R. No. L- 12353, September 30, 1960).

Advertising Associates Inc. v. CA

FACTS: This case is about the liability of Advertising Associates, Inc. for P382,700.16 as 3%
contractor’s percentage tax on its rental income from the lease of neon signs and billboards
imposed by Section 191 of the Tax Code. More than a year later, Acting Commissioner Efren I
Plana wrote a letter dated May 23, 1979 in answer to the requests of the taxpayer for the
cancellation of the assessments and the withdrawal of the warrants of distraint. Advertising
Associates received a letter on June 18, 1979. Nineteen days later or on July 7, it filed its
petition for review since the letter contained the statement “it constitutes our final decision”.

ISSUE: Whether the petition was filed out of time

RULING: No. Petition for review was filed on time. The reviewable decision is that contained in
Commissioner Plana’s letter of May 23, 1979 and not the warrants of distraint. The directive is
in consonance with the Court’s dictum that the Commissioner should always indicate to the
taxpayer in clear and unequivocal language what constitutes his final determination of the
disputed assessment.

Philippine Airlines vs. CIR

G.R. No. 206079-80 & 206309, January 17, 2018

FACTS: G.R. Nos. 206079-80 involves the Petition filed by PAL questioning the denial of its claim
for refund of P510,233.16 and US$65,877.07, representing the final income tax withheld by
Chinabank, PBCom, and Standard Chartered. Meanwhile, G.R. No. 206309 involves the Petition
filed by the Commissioner of Internal Revenue (Commissioner) assailing the grant to PAL of the
tax refund of P1,237,646.43, representing the final income tax withheld and remitted by
JPMorgan. PAL asserts that it is entitled to a refund of the withheld taxes because it is
exempted from paying the tax on interest income under its franchise, Presidential Decree No.
1590. However, the Commissioner refused to grant the claim, arguing that PAL failed to prove
the remittance of the withheld taxes to the Bureau of Internal Revenue.
ISSUE: Whether or not PAL is required to prove the remittance to the Bureau of Internal
Revenue of the final withholding tax on its interest from currency bank deposits to be entitled
to tax refund

RULING: No. Remittance need not be proven. PAL needs only to prove that taxes were withheld
from its interest income. To claim a refund, this Court rules that PAL needs only to prove that
taxes were withheld. Taxes withheld by the withholding agent are deemed to be the full and
final payment of the income tax due from the income earner or payee. In Commissioner of
internal Revenue v. Philippine National Bank: The certificate of creditable tax withheld at source
is the competent proof to establish the fact that taxes are withheld. It is not necessary for the
person who executed and prepared the certificate of creditable tax withheld at source to be
presented and to testify personally to prove the authenticity of the certificates.

City of Manila v Hon Grecia – Cuerdo

FACTS:
Petitioner City of Manila, through its treasurer, petitioner Liberty Toledo, assessed taxes for the
taxable period from January to 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.

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.

Philippine American Life and General Insurance Company v Secretary of Finance

FACTS: The Philippine American Life and General Insurance Company (Philamlife) used to own
498,590 Class A shares in Philam Care Health Systems, Inc. (PhilamCare), representing 49.89%
of the latter’s outstanding capital stock. In 2009, Philamlife offered to sell its shareholdings in
PhilamCare through competitive bidding. Thus, on September 24, 2009, petitioner’s Class A
shares were sold for USD 2, 190,000, or PhP 104,259,330 to STI Investments, the highest bidder.
Philamlife filed an application for a certificate authorizing registration/tax clearance with the
Bureau of Internal Revenue (BIR) to facilitate the transfer of the shares. Months later, petitioner
was informed that it needed to secure a BIR ruling in connection with its application due to
potential donor’s tax liability. In compliance, Philamlife, requested a ruling to confirm that the
sale was not subject to donor’s tax. However, the Commissioner on Internal Revenue
(Commissioner) denied Philamlife’s request through a BIR Ruling. The CIR stated that donor’s
tax is imposable on the price difference of the book value and the selling price.

ISSUE: Whether or not the CA has jurisdiction over contested decisions of the Secretary of
Finance

RULING: The CTA not the CA has jurisdiction over the matter.
Indeed, to leave undetermined the mode of appeal from the Secretary of Finance would be an
injustice to taxpayers prejudiced by his adverse rulings. To remedy this situation, the Court
implies from the purpose of RA 1125 and its amendatory laws that the CTA is the proper forum
with which to institute the appeal. This is not, and should not, in any way, be taken as a
derogation of the power of the Office of President but merely as recognition that matters
calling for technical knowledge should be handled by the agency or quasi-judicial body with
specialization over the controversy. As the specialized quasi-judicial agency mandated to
adjudicate tax, customs, and assessment cases, there can be no other court of appellate
jurisdiction that can decide the issues raised in the CA petition, which involves the tax
treatment of the shares of stocks sold.
Banco de Oro v. Republic
G.R. No. 198756
January 13, 2015

FACTS; The Bureau of Treasury (BTr) in a notice announced the auction of 10- year Zero-Coupon
Bonds denominated as the Poverty Eradication and Alleviation Certificates or the PEACE Bonds
on October 16, 2001, which the BTr states shall not be subject to 20% final withholding tax
since the issue is limited to 19 buyers/lenders. At the auction, Rizal Commercial Banking
Corporation (RCBC) participated on behalf of Caucus of Development NGO Networks (CODE-
NGO) and won the bid. Thus, bonds were issued to RCBC, who, as appointed issue manager and
lead underwriter of CODE-NGO, then sold and distributed said government bonds to petitioner-
banks.

On October 7, 2011, barely 11 days before maturity of the PEACe Bonds, the BIR issued the
following: BIR Ruling No. 370- 201119 declaring that the PEACe Bonds, being deposit
substitutes, were subject to 20% final withholding tax . Under this, DOF directed BTr to
withhold 20% final tax from the face value of the PEACe Bonds. BIR Ruling No. DA 378-201157
clarified that the final withholding tax should be imposed and withheld not only on RCBC/CODE
NGO but also on all subsequent holders of the Bonds.

ISSUE: Does CTA have jurisdiction to determine the constitutionality or validity of tax laws, rules
and regulations, and other administrative issuances of CIR?

HELD: YES. CTA has jurisdiction and may take cognizance of cases directly challenging
constitutionality or validity of a tax law, regulation or administrative issuance such as revenue
order, revenue memorandum circular, and ruling. RA 9282: appeals from the decisions of quasi-
judicial agencies on tax-related problems must be brought exclusively to the CTA

Philippine American Life and General Insurance Company v Secretary of Finance

FACTS: The Philippine American Life and General Insurance Company (Philamlife) used to own
498,590 Class A shares in Philam Care Health Systems, Inc. (PhilamCare), representing 49.89%
of the latter’s outstanding capital stock. In 2009, Philamlife offered to sell its shareholdings in
PhilamCare through competitive bidding. Thus, on September 24, 2009, petitioner’s Class A
shares were sold for USD 2, 190,000, or PhP 104,259,330 to STI Investments, the highest bidder.
Philamlife filed an application for a certificate authorizing registration/tax clearance with the
Bureau of Internal Revenue (BIR) to facilitate the transfer of the shares. Months later, petitioner
was informed that it needed to secure a BIR ruling in connection with its application due to
potential donor’s tax liability. In compliance, Philamlife, requested a ruling to confirm that the
sale was not subject to donor’s tax. However, the Commissioner on Internal Revenue
(Commissioner) denied Philamlife’s request through a BIR Ruling. The CIR stated that donor’s
tax is imposable on the price difference of the book value and the selling price.

ISSUE: Whether or not the CA has jurisdiction over contested decisions of the Secretary of
Finance

RULING: The CTA not the CA has jurisdiction over the matter.
Indeed, to leave undetermined the mode of appeal from the Secretary of Finance would be an
injustice to taxpayers prejudiced by his adverse rulings. To remedy this situation, the Court
implies from the purpose of RA 1125 and its amendatory laws that the CTA is the proper forum
with which to institute the appeal. This is not, and should not, in any way, be taken as a
derogation of the power of the Office of President but merely as recognition that matters
calling for technical knowledge should be handled by the agency or quasi-judicial body with
specialization over the controversy. As the specialized quasi-judicial agency mandated to
adjudicate tax, customs, and assessment cases, there can be no other court of appellate
jurisdiction that can decide the issues raised in the CA petition, which involves the tax
treatment of the shares of stocks sold.

Philippine Ports Authority vs. The City of Davao

G.R. No. 190324
June 6, 2018

FACTS: Philippine Ports Authority received a letter from the City Assessor of Davao for the
assessment and collection of real property taxes against its administered properties located at
Sasa Port. It appealed the assessment via registered mail to the Local Board of Assessment
Appeals through the Office of the City Treasurer of Davao. Pending this appeal, Davao posted a
notice of sale of delinquent real properties, including the three (3) properties subject of this
case.

The LBAA dismissed the PPA's appeal for having been filed out of time, and for its lack of
jurisdiction on the latter's tax exemption. Appeal to CBAA. Denied. Thus, it filed an appeal with
the CTA. PPA petitioned for certiorari in the CA, questioning the tax and the auction sale, saying
there is no other speedy and adequate remedy. Pending the petition in the CA, the CTA granted
PPA's appeal, resolving in its favor the issue of its liability for the real estate tax of Sasa Port and
its buildings. No appeal to SC. Final, executory.

ISSUE: Whether or not the Court of Appeals had jurisdiction to issue the injunctive relief prayed
for by petitioner Philippine Ports Authority
HELD: PETITION DENIED. In real property tax cases such as this, the remedy of a taxpayer
depends on the stage in which the LGU is enforcing the tax. Moreover, jurisdiction is conferred
by law.

Petitioner has failed to cite any law supporting its contention that the Court of Appeals has
jurisdiction over this case. On the other hand, Section 7, paragraph (a)(5) of Republic Act No.
1125, as amended by Republic Act No. 9282, provides that the Court of Tax Appeals has
exclusive appellate jurisdiction over CBAA decisions.

The Central Board of Assessment Appeals April 7, 2005 Decision assailed by petitioner before
the Court of Appeals was rendered in the exercise of its appellate jurisdiction over the real
property tax assessment of its properties. Clearly, this falls within the above-cited provision.
Indeed, there is no dispute that this CBAA decision constitutes one of the cases covered by the
CTA's' exclusive jurisdiction.