CASE DIGEST IN

TAXATION LAW II

SUBMITTED BY:

MOSANIF LAO USMAN

SHARIEF ISMAEL DIMA MACABANDO

AL-YASSIEN C. ABDULKARIM

SITTIE HANAN NUSKA ABDULSALAM

ABDEL JAFAR U. ONDI

May 28, 2022

 CITY OF MANILA VS HON. COLET AND MALAYSIAN AIRLINE SYSTEM

G.R. No. 120051

Facts:

The case involves 10 consolidated petitions involving several corporations

operating as “transportation contractors, persons who transport passenger or freight for
hire, and common carriers by land, air or water” with principal offices in Metro Manila.
The City of Manila Ordinance No. 7807impose business taxes on “transportation
contractors, persons who transport passenger or freight for hire, and common carriers
by land, air or water” at a rate of .5% per annum. However, the City of Manila compelled
payment of said business taxes pursuant to Section 21B of the Manila Revenue Code
(MRC)before issuance of the corresponding business permits for yr. 1994. Such was
questioned by corporations, consequently assailed said section of the MRC’s
constitutionality, and asked for refund of paid business tax.

Issue:

Whether or not Section 21B of the MRC as amended, unconstitutional?

Held:

Yes. It is held that the power to tax is not inherent in LGUs to whom the power
must be delegated by Congress, and must be exercised within the guidelines and
limitations that Congress may provide, this pursuant to Sec. 5 of Article X of the
Constitution. Moreover, the Local Government Code, provide limitations to the LGUs
taxing powers, among which; “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;” the proscription of
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.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. Also the LGC itself, on Rules of Interpretation, provides that in case of
doubt, any tax ordinance shall be construed strictly against the LGU en acting it, and
liberally in favor of the taxpayer. Furthermore, such a construction is pursuant to the
legislative intent to exclude from the taxing power of the LGU the imposition of business
tax against common carriers to prevent a duplication of the so-called “common carrier’s
tax.”

FILM DEVELOPMENT COUNCIL OF PHILIPPINES vs. COLON HERITAGE REALTY

CORPORATION

GR No. 203754

Facts:

Sometime in 1993, respondent City of Cebu, in its exercise of its power to

impose amusement taxes under Section 140 of the Local Government Code (LGC)
anchored on the constitutional policy on local autonomy, passed City Ordinance No.
LXIX otherwise known as the “Revised Omnibus Tax Ordinance of the City of Cebu (tax
ordinance).” Central to the case at bar are Sections 42 and 43, Chapter XI thereof which
require proprietors, lessees or operators of the actress, cinemas, concert halls,
circuses, boxing and other places of amusement, to pay an amusement tax equivalent
to thirty percent (30%) of the gross receipts of admission fees to the Office of the City
Treasurer of Cebu City.

In said letters, the proprietors and cinema operators, including private respondent
Colon Heritage Realty Corp. (Colon Heritage), operator of the Oriente theater, were
given ten (10) days from receipt thereof to pay the aforestated amounts to FDCP... the
city finally filed on May 18, 2009 before the RTC, Branch 14 a petition for... declaratory
relief with application for a writ of preliminary injunction, docketed as Civil Case No.
CEB-35529 (City of Cebu v. FDCP). In said petition, Cebu City sought the declaration of
Secs. 13 and 14 of RA 9167 as invalid and unconstitution

Issues:

Whether or not the RTC Branches 5 and 14 gravely erred in declaring Secs. 13
and 14 of RA 9167 invalid for being unconstitutional.

Ruling:
 RA 9167 violates local fiscal autonomy. Taking the resulting scheme into
consideration, it is apparent that what Congress did in this instance was not to exclude
the authority to levy amusement taxes from the taxing power of the covered LGUs, but
to earmark, if not altogether confiscate, the income to be received by the LGU from the
taxpayers in favor of and for transmittal to FDCP, instead of the taxing authority. This, to
Our mind, is in clear contravention of the constitutional command that taxes levied by
LGUs shall accrue exclusively to said LGU and is repugnant to the power of LGUs to
apportion their resources in line with their priorities.

FDCP and the producers of graded films, the legislature appropriated and
distributed the LGUs’ funds as though it were legally within its control under the guise of
setting a limitation on the LGUs’ exercise of their delegated taxing power. This,
undoubtedly, is a usurpation... of the latter’s exclusive prerogative to apportion their
funds, an impermissible intrusion into the LGUs’ constitutionally-protected domain which
puts to naught the guarantee of fiscal autonomy to municipal corporations enshrined in
our basic law.

QUEZON CITY v. ABS-CBN BROADCASTING CORPORATION

GR No. 166408

Facts:

On May 3, 1995, ABS-CBN was granted the franchise to install and operate radio
and television broadcasting stations in the Philippines under R.A. No. 7966. Section 8 of
R.A. No. 7966 provides the tax liabilities of ABS-CBN. ABS-CBN had been paying local
franchise tax imposed by Quezon City. However, in view of the above provision in R.A.
No. 9766. Quezon City argued that the "in lieu of all taxes" provision in R.A. No. 9766
could not have been intended to prevail over a constitutional mandate which ensures
the viability and self-sufficiency of local government units. Further, that taxes collectible
by and payable to the local government were distinct from taxes collectible by and
payable to the national government, considering that the Constitution specifically
declared that the taxes imposed by local government units "shall accrue exclusively to
the local governments."

Issues:
 Whether or not the phrase "in lieu of all taxes" indicated in the franchise of the
respondent appellee (Section 8 of RA 7966) serves to exempt it from the payment of the
local franchise tax imposed by the petitioners-appellants.

Held:

The "in lieu of all taxes" provision in its franchise does not exempt ABS-CBN
from payment of local franchise tax.The "in lieu of all taxes" provision in the franchise of
ABS-CBN does not expressly provide what kind of taxes ABS-CBN is exempted from. It
is not clear whether the exemption would include both local, whether municipal, city or
provincial, and national tax. What is clear is that ABS-CBN shall be liable to pay three
(3) percent franchise tax and income taxes under Title II of the NIRC. But whether the
"in lieu of all taxes provision" would include exemption from local tax is not unequivocal.

Futhermore, ABS-CBN's claims for exemption must fail on twin grounds. First,
the "in lieu of all taxes" clause in its franchise failed to specify the taxes the company is
sought to be exempted from. Neither did it particularize the jurisdiction from which the
taxing power is withheld. Second, the clause has become functus officio because as the
law now stands, ABS-CBN is no longer subject to a franchise tax. It is now liable for
VAT.

BENGUET CORPORATION VS. CENTRAL BOARD OF ASSESSMENT APPEALS

GR NO. 106041

Facts:

The realty tax assessment involved in this case amounts to Php 11, 319,304.00. It has
been imposed on the petitioner's tailings dam and the land thereunder over its
protest.The controversy arose in 1985 when the Provincial Assessor of Zambales
assessed the said properties as taxable improvements. The assessment was appealed
to the Board of Assessments Appeals of the Province of Zambales. The appeal was
dismissed.The petitioner seasonably elevated the matter to the CBAA which reversed
the dismissal of the appeal but, on the merits, agreed that "The tailings dam and the
lands submerged thereunder weresubject to realty tax.ISSUE:Whether the tailings dam
is subject to realty tax because it is an improvement upon the land.RULING:Yes. The
Real Property Tax Code does not carry a definition of "real property" and simply says
that the realty tax is imposed on "real property, such as lands, buildings, machinery.
 Petitioner, on the other hand, argued that the tailings dam cannot be said and
classified as an improvement upon the land within the meaning of the Real Property Tax
Code and thus is not subject to realty tax. It claimed that the tailings dam has no value
separate from and independent of the mine and is actually an integral part of the latter.
It is submerged underwater wastes from the mine and serves only as a pollution control
device which is a requirement imposed by law for mine business. It also claimed that
the dam will eventually benefit the local community as an irrigation facility after its
mining operation.

Issue:

Whether the tailings dam is an improvement upon the land, which is real property
and is therefore subject to realty tax.

Held:

Yes. The Real Property Tax Code does not carry a definition of "real property"
and simply says that the realty tax is imposed on "real property, such as lands,
buildings, machinery and other improvements affixed or attached to real property." In
the absence of such a definition, we apply Article 415 of the Civil Code. The tailings
dam in this case is an improvement upon the mine. The Real Property Tax Code
defines improvement as a valuable addition made to property or amelioration in its
condition, amounting to more than mere repairs or replacement of waste, costing labor
or capital and intended to enhance its value, beauty, or utility or to adapt it for new or
future purposes

MACTAN CEBU INTERNATIONAL AIRPORT AUTHORITY, petitioner, vs. HON.

FERDINAND J. MARCOS, in his capacity as the Presiding Judge of the Regional
Trial Court, Branch 20, Cebu City, THE CITY OF CEBU, represented by its Mayor
HON. TOMAS R. OSMEÑA, and EUSTAQUIO B. CESA, respondents.
G.R. No. 120082 September 11, 1996

FACTS:

Petitioner Mactan Cebu International Airport Authority (MCIAA) was created by

virtue of RA 6958, mandated to principally undertake the economical, efficient and
effective control, management and supervision of the Mactan International Airport in the
Province of Cebu and the Lahug Airport in Cebu City, and such other Airports as may
be established in the Province of Cebu. Section 1 thereof states that the authority shall
be exempt from realty taxes imposed by the National Government or any of its political
subdivisions, agencies and instrumentalities. However, the Treasurer of Cebu City
demanded payment for realty taxes from petitioner. Petitioner filed a declaratory relief
before the Regional Trial Court. The trial court dismissed the petitioner ruling that the
Local Government Code withdrew the tax exemption granted to Government owned and
controlled corporation.

ISSUE: Whether the city of Cebu has the power to impose taxes on petitioner.

HELD:

Yes. The general rule is that the power to tax is an incident of sovereignty and is
unlimited in its range, acknowledging in its very nature no limits, so that security against
its abuse is to be found only in the responsibility of the legislature which imposes the tax
on the constituency who are to pay it. Nevertheless, effective limitations thereon may be
imposed by the people through their Constitutions. Elsewise stated, taxation is the rule
and exemption is the exception, the exemption may thus be withdrawn at the pleasure
of the taxing authority. As to tax exemptions or incentives granted to or presently
enjoyed by natural or juridical persons, including GOCCs, section 193 of the LGC
prescribes the general rule, viz, they are withdrawn upon the effectivity of the LGC,
except those granted to local water districts, cooperatives, duly registered under RA
6938, non-stock and nonprofit hospitals and educational institutions and unless
otherwise provided in the LGC. Wherefore, the petitioner is denied.

NATIONAL POWER CORPORATION vs. CITY OF CABANATUAN, respondent.

G.R. No. 149110 April 9, 2003

FACTS:

Petitioner National Power Corporation (NAPOCOR) is a government-owned and

controlled corporation (GOCC) created under Commonwealth Act No. 120, as
amended. It is tasked to undertake the “development of hydroelectric generations of
power and the production of electricity from nuclear, geothermal, and other sources, as
well as the transmission of electric power on a nationwide basis.” For many years now,
NAPOCOR sells electric power to the resident Cabanatuan City, posting a gross income
of P107,814,187.96 in 1992. Pursuant to Section 37 of Ordinance No. 165-92, the
respondent assessed the petitioner a franchise tax amounting to P808,606.41,
representing 75% of 1% of the former’s gross receipts for the preceding year. Petitioner,
whose capital stock was subscribed and wholly paid by the Philippine Government,
refused to pay the tax assessment. It argued that the respondent has no authority to
impose tax on government entities. Petitioner also contend that as a non-profit
organization, it is exempted from the payment of all forms of taxes, charges, duties or
fees in accordance with Sec. 13 of RA 6395, as amended.
The respondent filed a collection suit in the RTC of Cabanatuan City, demanding
that petitioner pay the assessed tax, plus surcharge equivalent to 25% of the amount of
tax and 2% monthly interest. Respondent alleged that petitioner’s exemption from local
taxes has been repealed by Sec. 193 of RA 7160 (LGC).

ISSUE:

Whether or not respondent city government has the authority to issue Ordinance No.
165-92 and impose an annual tax on “businesses enjoying a franchise.

HELD:
Yes. Although as a general rule, LGUs cannot impose taxes, fees, or charges of
any kind on the National Government, its agencies and instrumentalities, this rule now
admits an exception, such as when specific provisions of the LGC authorize the LGUs
to impose taxes, fees or charges on the aforementioned entities. Here, Section 151 in
relation to Section 137 of the LGC clearly authorizes Cabanatuan government to
impose on NPC the franchise tax in question.

Camp John Hay vs CBAA

GR No. 169234, October 2, 2013

Facts:

In a letter dated March 21, 2002, respondent City assessor of Baguio City
notified petitioner Cam John Hay Development Corporation about the issuance against
it of thirty-six (36) Owner’s Copy of Assessment of Real Property (ARP), with ARP Nos.
01-07040-008887bto 01-07040-008922 covering various buildings pf petitioner and two
(2) parcels of land owned by the Bases Conversion Development Authority (BCDA) in
the John Hay Special Economic Zone (JHSEZ), Baguio City, which leased out to
petitioner.

In response, petitioner questioned the assessments in a letter dated April 3, 2002

for lack of legal basis due to the City Assessor’s failure to identify the specific properties
and its corresponding assessed values. The City Assessor replied in a letter dated April
11, 2002 that the subject ARPs against the buildings of petitioner located within the
JHSEZ were issued on the basis of the approved building permits obtained from the
City Engineer’s Office of Baguio City and pursuant to Section 201 to 205 of the RA. No.
7160 of the LGC of 1991.

Issue:

Whether or not the petitioner’s allegation that it is tax-exempt validates its petition
questioning the validity or real property assessments without paying under protest.

Ruling:

No. It is obvious that in order for a complete determination of petitioner’s alleged

exemption from payment of real property tax under RA No. 7160, there are factual
issues needed to be confirmed. Hence, being a question of fact, petitioner cannot do
without first resorting to the proper administrative remedies, or as previously discussed,
by paying under protest the tax assessed in compliance with Section 252 thereof.

NPC vs Municipal Government of Navotas,

GR No. 192300, November 24, 2014

Facts:

Petitioner National Power Corporation (NPC) is a government owned and

controlled corporation. Respondent Municipal Government of Navotas, is a local
government unit, hosting petitioner’s Navotas Power Stations I and II located in the
Municipality of Navotas. On the respective dates of November 16, 1988 and June 29,
1992, petitioner entered into a Build-Operate- and- Transfer Project Agreements
(BOTs) with Mirant Navotas I Corporation and Mirant Navotas II Corporation. petitioner
has the obligation to pay for all taxes, except business taxes, relative to the
implementation of the agreements. For the 1st quarter of 2003, petitioner paid
respondent Municipality, real property taxes in the amounts of P3,382,715.88 and
P4,973,869.83 for the MNC- I and MNC-II power stations, respectively. After the
said quarter, petitioner stopped paying the real property taxes, claiming exemption from
payment thereon pursuant to Section 234(c) of the Local Government Code (LGC)
of 1991.

On May 25, 2005, MNC-II received four notices from respondent Municipal
Treasurer informing MNC-I and MNC-II of their real property tax delinquencies for the
2nd, 3rd, and 4th quarters of calendar year 2003 and for the calendar years 2004 and
2005.

Issue:

Whether or not the CTA Second Division has jurisdiction to review the decision of
the RTC which concerns a petition for declaratory relief involving real property taxes.

Ruling:

Indeed, the CTA, sitting as Division, has jurisdiction to review by appeal the
decisions, rulings and resolutions of the RTC over local tax cases, which includes real
property taxes. This is evident from a perusal of the Local Government Code (LGC)
which includes the matter of Real Property Taxation under one of its main chapters. We,
therefore, disagree with the conclusion of the CTA En Banc that real property taxes
have always been treated by our laws separately from local taxes. Based on the
foregoing, the general meaning of "local taxes" should be adopted in relation to
Paragraph (a)(3) of Section 7 of R.A. 9282, which necessarily includes real property
taxes. Second, as correctly pointed out by petitioner, when the legality or validity of the
assessment is in question, and not its reasonableness or correctness, appeals to the
LBAA, and subsequently to the CBAA, pursuant to Sections 22614 and 22915 of the
LGC, are not necessary.

Stated differently, in the event that the taxpayer questions the authority and
power of the assessor to impose the assessment, and of the treasurer to collect the
real property tax, resort to judicial action may prosper. Although as a rule, administrative
remedies must first be exhausted before resort to judicial action can prosper, there is a
well-settled exception in cases where the controversy does not involve questions of fact
but only of law. In the present case, the parties, even during the proceedings in the
lower court on 11 April 1994, already agreed "that the issues in the petition are legal",
and thus, no evidence was presented in said court., if a taxpayer disputes the
reasonableness of an increase in a real estate tax assessment, he is required to "first
pay the tax" under protest. Otherwise, the city or municipal treasurer will not act on his
protest. In the case at bench, however, the petitioners are questioning the very
authority and power of the assessor, acting solely and independently, to impose
the assessment and of the treasurer to collect the tax. These are not questions merely
of amounts of the increase in the tax but attacks on the very validity of any increase.
Accordingly, if the only issue is the legality or validity of the assessment – a question of
law – direct recourse to the RTC is warranted. the issue is clearly legal given that it
involves an interpretation of the contract between the parties vis-à-vis the
applicable laws, i.e., which entity actually, directly and exclusively uses the subject
machineries and equipment. the CT A En Banc erred in dismissing the petition for
review en banc, and affirming the CTA Second Division’s position that the RTC has no
jurisdiction over the instant case for failure of petitioner to exhaust administrative
remedies which resulted in the finality of the assessment.

NPC vs CBAA

G.R. No. 171470

Facts: First Private Power Corporation (FPPC) entered into a Build-Operate-Transfer

(BOT) agreement with NAPOCOR for the construction of Bauang Diesel Power Plant
and creation of Bauang Power Plant Corporation (BPPC). The pertinent provisions of
the BOT agreement, include among others:“2.03 NAPOCORxxx shall be responsible for
the payment of all real estate taxes and assessments, rates, and other charges in
respect of the Site and the buildings and improvements thereon.” The Municipal
Assessor of Bauang issued a Notice of Assessment and Tax Bill to BPPC. NAPOCOR
sought tax exemption on the basis if Sec. 234(c) of R.A. No. 7160.

ISSUE: Under the terms of the BOT, can the GOCC be deemed the actual, direct, and
exclusive user of machineries and equipment for tax exemption purposes? If not, can it
pass on its tax-exempt status to its BOT partner, a private corporation, through the BOT
agreement?

Held: NO. Neither can NAPOCOR pass its tax–exempt status to its BOT partner.

NAPOCOR’s basis for its claimed exemption – Section 234(c) of the LGC – is clear and
not at all ambiguous in its terms. Exempt from real property taxation are: (a) all
machineries and equipment; (b) [that are] actually, directly, and exclusively used by; (c)
[local water districts and] government-owned or –controlled corporations engaged in the
[supply and distribution of water and/or] generation and transmission of electric power.
By [BOT’s] express terms, BPPC has complete ownership – both legal and beneficial –
of the project, including the machineries and equipment used, subject only to the
transfer of these properties without cost to NAPOCOR after the lapse of the period
agreed upon. As agreed upon, BPPC provided the funds for the construction of the
power plant, including the machineries and equipment needed for power generation;
thereafter, it actually operated and still operates the power plant, uses its machineries
and equipment, and receives payment for these activities and the electricity generated
under a defined compensation scheme. Notably, BPPC – as owner-user – is
responsible for any defect in the machineries and equipment.

Consistent with the BOT concept and as implemented, BPPC – the owner-manager-
operator of the project – is the actual user of its machineries and equipment. BPPC’s
ownership and use of the machineries and equipment are actual, direct, and immediate,
while NAPOCOR’s is contingent and, at this stage of the BOT Agreement, not sufficient
to support its claim for tax exemption.the power plant, uses its machineries and
equipment, and receives payment for these activities and the electricity generated under
a defined compensation scheme. Notably, BPPC – as owner-user – is responsible for
any defect in the machineries and equipment.

Consistent with the BOT concept and as implemented, BPPC – the owner-manager-
operator of the project – is the actual user of its machineries and equipment. BPPC’s
ownership and use of the machineries and equipment are actual, direct, and immediate,
while NAPOCOR’s is contingent and, at this stage of the BOT Agreement, not sufficient
to support its claim for tax exemption.

Olivarez vs Mayor Marquez

G.R. No. 155591

Facts: On Jul. 1, 1998, Pablo OLIVARES ET AL. received a final notice of real estate
tax delinquency from the Parañaque City Treasurer.

On Jul. 7, 1998, Olivares et al. replied with a letter of protest, seeking reinvestigation on
the following grounds:

(1) some of the taxes being collected have already prescribed and may no longer be
collected as provided in LGC 194

(2) some properties have been doubly taxed/assessed

(3) some properties being taxed are no longer existent

(4) some properties are exempt from taxation as they are being used exclusively for
educational purposes

(5) some errors are made in the assessment and collection of taxes due on their
properties.

On Jul. 24, 1998, Olivares et al. wrote another letter, which was not acted upon.

On Aug. 18, 1998, Olivares et.al. filed a civil case for certiorari, prohibition, and
mandamus before the Parañaque RTC questioning the assessment and levy made by
the Parañaque City Treasurer on their

properties.

The City Treasurer, Mayor, Assessor and other respondent CITY OFFICIALS filed a
motion to dismiss on 3 grounds: 1) the RTC has no jurisdiction over tax assessment
matters; 2) Olivares et al. failed to comply with the requirements of a tax protest; and 3)
the complaint states no cause of action.
 Olivares et al. opposed the MTD, claiming that the RTC has jurisdiction because the
complaint assails the authority of the City Officials to assess and collect the real estate
taxes, citing Ty v. Trampe.

 Jul. 24, 2002 – RTC dismissed the complaint on the following grounds:

1. Questions involving tax assessment are within the jurisdiction of the BIR.

2. It is improper for the RTC to prohibit or annul a tax assessment issued by the City
Assessor’s Office since it is legally inherent in the functions of their office. Any complaint
or protest thereto should be coursed through the BIR.

3. It appears on record that the City Treasurer’s Office had already responded to
Olivares et al.’s letter-protest. Hence, the prayer in the complaint asking that the City
Treasurer be ordered to act on it is now moot.

4. It is also of judicial notice that at present there is no longer any publication regarding
Olivares et al.’s tax delinquency. Hence, the prayer that this kind of publication be
ordered stopped is now, likewise, moot.

 With their MR having been denied, Olivares et al. filed the present petition with the
SC.

Issue/s:

1) WON the RTC has jurisdiction over cases questioning the power and authority of the
city assessor to assess and the city treasurer to collect real property tax. YES, but
Olivares et al. do not question such authority in their complaint)

2) WON the RTC erred in not declaring the assessments as confiscatory, oppressive,
illegal, unconstitutional, and therefore void (NO, because it has no jurisdiction)

RATIO: RECOURSE NOT PROPER FOR FAILURE TO EXHAUST ADMINISTRATIVE

REMEDIES; EXCEPTION TO THE RULE DOES NOT APPLY IN THIS CASE
Extraordinary remedies of certiorari, prohibition, and mandamus may be resorted to only
when there is no plain, speedy, and adequate remedy available.

Petitions for the issuance of these peremptory writs will not lie where administrative
remedies are available, in order to give the administrative body an opportunity to correct
the matter and prevent unnecessary and premature recourse to the courts.

Administrative remedies of real property taxpayers under the LGC.

252(a) requires the payment of the tax under protest. The protest in writing must be filed
within 30 days from payment to the LGU treasurer concerned, who shall decide the
protest within 60 days from receipt.

If the protest is denied or unacted upon within the 60-day period provided for in ¶(a), the
taxpayer’s recourse is with the Local Board of Assessment Appeals (LBAA) under LGC
226 et seq. [Chap. 3, Title 2, Book II] and then to the Central Board of Assessment
Appeals (CBAA), which exercises exclusive jurisdiction over “all appeals from the
decisions, orders and resolutions of the Local Boards involving contested assessments
of real properties, claims for tax refund and/or tax credits or overpayments of taxes. An
appeal may be taken to the CBAA by filing a notice of appeal within thirty days from
receipt thereof.”

From the CBAA, the dispute may then be taken to the Court of Appeals by filing a
verified petition for review under ROC 43.

Recourse to the court not proper in the case at bar; Allegations in the complaint and
nature of relief sought determine nature of action

Olivares et.al.: Recourse to the trial court is proper as they are questioning the very
authority of the City Officials to assess and collect the real estate taxes due on their
properties, and not merely the correctness of said amount. Olivares et al. were actually
assailing the correctness of the assessments in their petition before the RTC.

The allegations purportedly questioning the assessor’s authority to assess and collect
the taxes were obviously made in order to justify the filing of the petition with the RTC.
In fact, there is nothing in the said petition that supports their claim regarding the
assessor’s alleged lack of authority.

Olivares et.al. simply reiterated the 5 grounds they raised in their letter to the City
Treasurer (see facts) and that the City Officials committed grave abuse of discretion in
making the “improper, excessive and unlawful the collection of taxes against them.”
These arguments essentially involve questions of fact. Hence, the

petition should have been brought, at the very first instance, to the LBAA.

“Under the doctrine of primacy of administrative remedies, an error in the assessment

must be

administratively pursued to the exclusion of ordinary courts whose decisions would be

void for lack of jurisdiction. But an appeal shall not suspend the collection of the tax
assessed without prejudice to a later adjustment pending the outcome of the appeal.”
(MERALCO v. Barlis)

Even assuming that the assessor’s authority is indeed an issue, it must be pointed out
that in order for the RTC to resolve the petition, the issues of the correctness of the tax
assessment and collection must also necessarily be dealt with.

City of Manila vs Cosmos Bottling Corp

G.R. No. 196681, June 27, 2018

Facts: For the first quarter of 2007, the City of Manila assessed Cosmos local business
taxes and regulatory fees. Cosmos protested the assessment arguing that Tax
Ordinance have been declared null and void. It also argued that the collection of local
business tax under Section 21 of the RCM in addition to Section 14 of the same code
constitutes double taxation.
Cosmos tendered payment of only P131,994.23 which they posit is the correct
computation of their local business tax for the first quarter of 2007. This payment was
refused by the City Treasurer. Cosmos also received a letter from the City Treasurer
denying their protest and was constrained to pay the assessment of P1,226,78,1.05.
Cosmos filed its complaint with the RTC of Manila praying for the refund or issuance of
a tax credit certificate in the amount of P1,094,786.82.

RTC Manila: Ruled in favor of Cosmos but denied claim for refund

CTA 1st Division: City of Manila is ordered to refund or issue a tax credit certificate

Instead of filing a Motion for Reconsideration or new trial, directly filed with the CTA En
Banc a petition for review. CTA En Banc ruled that the direct resort to it without a prior
motion for reconsideration or new trial before the CTA Division violated Revised Rules
of the CTA.

Issue/s:

1. WON the CTA En Banc correctly dismissed the petition for review before it for failure
of the petitioners to file a motion for reconsideration or new trial with the CTA Division?
YES.

2. WON a taxpayer who had initially protested and paid the assessment may shift its
remedy to one of refund? YES.

Held:

1. Section 18 of R.A. No. 1125, as amended by R.A. 9282 and R.A. No. 9503, states
that filing of a motion for reconsideration or new trial before the CTA Division is an
indispensable requirement for filing an appeal before the CTA En Banc. Failure to file
such motion for reconsideration or new trial is cause for dismissal of the appeal before
the CTA En Banc.

2. A taxpayer who had protested and paid an assessment may later on institute an
action for refund.
The taxpayers' remedies of protesting an assessment and refund of taxes are stated in
Sections 195 and 196 of the LGC. The first provides the procedure for contesting an
assessment issued by the local treasurer; whereas, the second provides the procedure
for the recovery of an erroneously paid or illegally collected tax, fee or charge. The
foregoing clearly shows that a taxpayer facing an assessment may protest it and
alternatively: (1) appeal the assessment in court, or (2) pay the tax and thereafter seek
a refund.

Simply put, there are two conditions that must be satisfied in order to successfully
prosecute an action for refund in case the taxpayer had received an assessment. One,
pay the tax and administratively assail within 60 days the assessment before the local
treasurer, whether in a letter-protest or in a claim for refund. Two, bring an action in
court within thirty (30) days from decision or inaction by the local treasurer, whether
such action is denominated as an appeal from assessment and/or claim for refund of
erroneously or illegally.

COCA COLA BOTTLERS vs CITY OF MANILA G.R. No. 156252

FACTS:

The City Mayor of Manila approved Tax Ordinance No. 7988" repealing Tax Ordinance
No. 7794 entitled, "Revenue Code of the City of Manila." Tax Ordinance No. 7988
amended certain sections of Tax Ordinance No. 7794 by increasing the tax rates
applicable to certain establishments operating within the territorial jurisdiction of the City
of Manila, including herein petitioner Coca-Cola. Subject tax ordinance was published
only once, i.e., on the May 22, 2000 issue of the Philippine Post. Aggrieved by said tax
ordinance, petitioner filed a Petition before the Department of Justice (DOJ). On 17
August 2000, then DOJ Secretary issued a Resolution declaring Tax Ordinance No.
7988 null and void and without legal effect, the pertinent portions of which read: The
Local Government Code of 1991 provides: "Section 188. Publication of Tax Ordinances
and Revenue Measures. – Within ten (10) days after their approval, certified true copies
of all provincial, city and municipal tax ordinances or revenue measures shall be
published in full for three (3) consecutive days in a newspaper of local circulation;
Provided, however, that in provinces, cities, and municipalities where there are no
newspapers or local circulations the same may be posted in at least two (2)
conspicuous and publicly accessible places." (R.A. No. 7160) (stress supplied) Upon
the other hand, the Rules and Regulations Implementing the Local Government Code of
1991, insofar as pertinent, mandates: "Art. 277. Publication of Tax Ordinances and
Revenue Measures. – (a) within ten (10) days after their approval, certified true copies
of all provincial, city and municipal tax ordinances or revenue measures shall be
published in full for three (3) consecutive days in a newspaper of local circulation
provided that in provinces, cities and municipalities where there are no newspapers of
local circulation, the same may be posted in at least two (2) conspicuous and publicly
accessible places. If the tax ordinances or revenue measure contains penal provisions
as authorized under Art. 279 of this Rule, the gist of such tax ordinance or revenue
measure shall be published in a newspaper of general circulation within the province,
posting of such ordinance or measure shall be made in accessible and conspicuous
public places in all municipalities and cities of the province to which the sanggunian
enacting the ordinance or revenue measure belongs. In the case at bar, respondents,
by its failure to file their comments and present documentary evidence to show that the
mandatory requirement of law on publication, among other things, has been met, may
be deemed to have waived its right to controvert or dispute the documentary evidence
submitted by petitioner which indubitably show that, therefore, herein respondents failed
to satisfy the requirement that said ordinance shall be published for three (3)
consecutive days as required by law.” Despite the Resolution of the DOJ declaring Tax
Ordinance No. 7988 null and void and the directive of the BLGF that respondents cease
and desist from enforcing said tax ordinance, respondents continued to assess
petitioner business tax for the year 2001 based on the tax rates prescribed under Tax
Ordinance No. 7988. Thus, petitioner filed a Complaint with the RTC of Manila. During
the pendency of the said case, the City Mayor of Manila approved on 22 February 2001
Tax Ordinance No. 8011 entitled, "An Ordinance Amending Certain Sections of
Ordinance No. 7988." Said tax ordinance was again challenged by petitioner before the
DOJ who then issued a Resolution declaring Tax Ordinance No. 8011 null and void and
legally not existing. According to the DOJ Secretary: "If an order or law sought to be
amended is invalid, then it does not legally exist. There would be no occasion or need to
amend it.

ISSUE: Whether or not Tax Ordinance No. 7988 is null and void and of no legal effect.

RULING:

It is undisputed from the facts of the case that Tax Ordinance No. 7988 has already
been declared by the DOJ Secretary, in its Order, dated 17 August 2000, as null and
void and without legal effect due to respondents’ failure to satisfy the requirement that
said ordinance be published for three consecutive days as required by law. Neither is
there quibbling on the fact that the said Order of the DOJ was never appealed by the
City of Manila, thus, it had attained finality after the lapse of the period to appeal.
Furthermore, the RTC of Manila, Branch 21, in its Decision dated 28 November 2001,
reiterated the findings of the DOJ Secretary that respondents failed to follow the
procedure in the enactment of tax measures as mandated by Section 188 of the Local
Government Code of 1991, in that they failed to publish Tax Ordinance No. 7988 for
three consecutive days in a newspaper of local circulation. From the foregoing, it is
evident that Tax Ordinance No. 7988 is null and void as said ordinance was published
only for one day in the 22 May 2000 issue of the Philippine Post in contravention of the
unmistakable directive of the Local Government Code of 1991.

ASIATRUST DEVELOPMENT BANK v CIR

GR No. 201530 and 201680-81

FACTS:
 
Petitioner Asiatrust Dev’t Bank, Inc. received 3 Formal Letters of Demand (FLD) with
Assessment Notices for deficiency revenue taxes in amounts of 131.9M, 83M and 144M
for the years 1996-1998 in 2000.

Asiatrust protested the assessment notices. Due to the inaction of the CIR on the

protest, Asiatrust filed before the CTA a Petition for Review docketed as CTA Case No.
6209 praying for the cancellation of the tax assessments for deficiency income tax,
documentary stamp tax (DST) regular, DST - industry issue, final withholding tax,
expanded withholding tax, and fringe benefits tax issued against it by the CIR. In 2001,
new assessment notices for deficiency taxes in the amounts of 112M, 53M, 133M
covering the same years were issued. On the same day, Asiatrust partially paid said
deficiency tax assessments thus leaving the balances of 110M, 49M, and 124M. CIR
approved Asiatrust’s offer of compromise of DST and manifested during trial, that
Asiatrust availed of a tax abatement program fro its deficiency final withholding tax- trust
assessments for fiscal years ending ’96 and ’98 and that it paid 4.1M and 6M for the
fiscal years respectively. It availed of the provisions of the Tax Amnesty Law of 2007.
CTA division partially granted the petition declaring void the ’96 assessment for having
been issued beyond the 3year prescriptive period but affirmed the DST deficiency due
to failure of Asiatrust to present evidence. 
Total tax deficiency remained at 142M. On MR, CTA Division rendered an Amended
decision finding that Asiatrust is entitled to the immunities and privileges
granted in the Tax Amnesty Law. 

However, it reiterated its ruling that in the absence of a termination letter from the BIR, it

cannot consider Asiatrust's availment of the Tax Abatement Program. Partial
reconsideration and MR was denied. CTA En Banc denied appeal of the BIR for failure
to file a prior MR.

ISSUE: Whether or not Asiatrust’s correctly availed of the Tax abatement.

RULING:
An application for tax abatement is considered approved only upon the issuance
of a termination. RR No. 15-06 prescribes the guidelines on the implementation of the
one-time administrative abatement of all penalties/surcharges and interest on
delinquent accounts and assessments. Sec 4provides that a taxpayer may avail of the
program by:

1. Paying 100% of the basic tax assessment with an accredited agent bank or in its
absence, the revenue collection/ deputized treasurer of the RDO.

2. Penalties / surcharge and interest shall be cancelled by the concerned BIR Office
following existing rules and procedures.

3. The docket of the case shall be forwarded to the Office of the Commissioner,

thru the Deputy Commissioner for Operations Group for the issuance of a
Termination letter.

Without a termination letter, a tax assessment cannot be considered closed and

terminated. Asiatrust failed to present such letter to the BIR.

CITY OF MANILA v. COSMOS BOTTLING CORPORATION,

GR No. 196681, 2018-06

FACTS:
For the first quarter of 2007, the 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. Cosmos protested the assessment through a letter 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 addition to Section 14 of the same code constitutes
double taxation. Cosmos also tendered payment of only P131,994.23 which they posit
is the correct computation of their local business tax for the first quarter of 2007. This
payment was refused by the City Treasurer. Cosmos also received a letter from the City
Treasurer denying their protest Cosmos filed a claim for refund of P1,094,786.82 with
the Office of the City Treasurer raising the same grounds as discussed in their protest.
Cosmos filed its complaint with the RTC of Manila praying for the refund or issuance of
a tax credit certificate in the amount of P1,094,786.82. The RTC in its decision ruled in
favor of Cosmos but denied the claim for refund.
The CTA Division essentially ruled that the collection by the City Treasurer of Manila of
local business tax under both Section 21 and Section 14 of the Revenue Code of Manila
constituted double taxation. It also ruled that the City Treasurer cannot validly assess
local business tax based on the increased rates under Tax Ordinance Nos. 7988 and
8011 after the same have been declared null and void. Finally, the court held that
Cosmos Bottling Corporation's local business tax liability for the calendar year 2007
shall be computed based on the gross sales or receipts for the year 2006. Instead of
filing a motion for reconsideration or new trial, the petitioners directly filed with the CTA
En Banc a petition for review praying that the decision of the CTA Division be reversed
or set aside.
the CTA En Banc ruled that the direct resort to it without a prior motion for
reconsideration or new trial before the CTA Division violated Section 18 of Republic Act
(R.A.) No. 1125,[10] as amended by R.A. No. 9282 and R.A. No. 9503, and Section 1,
Rule 8 of the Revised Rules of the CTA (CTA Rules).

ISSUES:
Whether the CTA En Banc correctly dismissed the petition for review before it for failure
of the petitioners to file a motion for reconsideration or new trial with the CTA Division.
Whether a taxpayer who had initially protested and paid the assessment may shift its
remedy to one of refund.

RULING:
The filing of a motion for reconsideration or new trial before the CTA Division is an
indispensable requirement for filing an appeal before the CTA En Banc.
The CTA En Banc was correct in interpreting Section 18 of R.A. No. 1125, as amended
by R.A. 9282 and R.A. No. 9503 as requiring a prior motion for reconsideration or new
trial before the same division of the CTA that rendered the assailed decision before
filing a petition for review with the CTA En Banc. Failure to file such motion for
reconsideration or new trial is cause for dismissal of the appeal before the CTA En
Banc.
The rules are clear. Before the CTA En Banc could take cognizance of the petition for
review concerning a case falling under its exclusive appellate jurisdiction, the litigant
must sufficiently show that it sought prior reconsideration or moved for a new trial with
the concerned CTA division. Procedural rules are not to be trifled with or be excused
simply because their noncompliance may have resulted in prejudicing a party's
substantive rights. Rules are meant to be followed. They may be relaxed only for very
exigent and persuasive reasons to relieve a litigant of an injustice not commensurate to
his careless non-observance of the prescribed rules.
After a cursory examination of the records of the case, we find that the petitioners, as
determined by the CTA Division, erroneously assessed and collected from Cosmos
local business taxes for the first quarter of 2007; thus, a refund is warranted. The CTA
Division that the City of Manila cannot validly assess local business taxes under
Ordinance Nos. 7988 and 8011 because they are void and of no legal effect; the
collection of local business taxes under Section 21 in addition to Section 14 of the
Revenue Code of Manila constitutes double taxation; and the 2007 local business tax
assessed against Cosmos should be computed based on the latter's gross receipts in
2006.
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.
There is indeed double taxation if respondent is subjected to the taxes under both
Sections 14 and 21 of Tax Ordinance No. 7794, since these are being imposed: (1) on
the same subject matter — the privilege of doing business in the City of Manila; (2) for
the same purpose — to make persons conducting business within the City of Manila
contribute to city revenues; '(3) by the same taxing authority — petitioner City of Manila;
(4) within the same taxing jurisdiction — within the territorial jurisdiction of the City of
Manila; (5) for the same taxing periods per calendar year; and (6) of the same kind or
character — a local business tax imposed on gross sales or receipts of the business.
It is apparent from a perusal thereof that when a municipality or city has already
imposed a business tax on manufacturers, etc. of liquors, distilled spirits, wines, and
any other article of commerce, pursuant to Section 143(a) of the LGC, said municipality
or city may no longer subject the same manufacturers, etc. to a business tax under
Section 143(h) of the same Code. Section 143(h) may be imposed only on businesses
that are subject to excise tax, VAT, or percentage tax under the NIRC, and that are "not
otherwise specified in preceding paragraphs." In the same way, businesses such as
respondent's, already subject to a local business tax under Section 14 of Tax Ordinance
No. 7794 [which is based on Section 143(a) of the LGC], can no longer be made liable
for local business tax under Section 21 of the same Tax Ordinance
A taxpayer who had protested and paid an assessment may later on institute an action
for refund.
The taxpayers' remedies of protesting an assessment and refund of taxes are stated in
Sections 195 and 196 of the LGC,... Clearly, when a taxpayer is assessed a deficiency
local tax, fee or charge, he may protest it under Section 195 even without making
payment of such assessed tax, fee or charge. This is because the law on local
government taxation, save in the case of real property tax,[28] does not expressly
require "payment under protest" as a procedure prior to instituting the appropriate
proceeding in court. This implies that the success of a judicial action questioning the
validity or correctness of the assessment is not necessarily hinged on the previous
payment of the tax under protest. Needless to say, there is nothing to prevent the
taxpayer from paying the tax under protest or simultaneous to a protest. There are
compelling reasons why a taxpayer would prefer to pay while maintaining a protest
against the assessment For instance, a taxpayer who is engaged in business would be
hard-pressed to secure a business permit unless he pays an assessment for business
tax and/or regulatory fees. Also, a taxpayer may pay the assessment in order to avoid
further penalties, or save his properties from levy and distraint proceedings.
Where an assessment is to be protested or disputed, the taxpayer may proceed (a)
without payment, or (b) with payment of the assessed tax, fee or charge. Whether there
is payment of the assessed tax or not, it is clear that the protest in writing must be made
within sixty (60) days from receipt of the notice of assessment; otherwise, the
assessment shall become final and conclusive. Additionally, the subsequent court
action must be initiated within thirty (30) days from denial or inaction by the local
treasurer; otherwise, the assessment becomes conclusive and unappealable.
It must be understood, however, that in such latter case, the suit for refund is
conditioned on the prior filing of a written claim for refund or credit with the local
treasurer. In this instance, what may be considered as the administrative claim for
refund is the letter-protest submitted to the treasurer. Where the taxpayer had paid the
assessment, it can be expected that in the same letter-protest, he would also pray that
the taxes paid should be refunded to him. As previously mentioned, there is really no
particular form or style necessary for the protest of an assessment or claim of refund of
taxes. What is material is the substance of the letter submitted to the local treasurer.
Equally important is the institution of the judicial action for refund within thirty (30) days
from the denial of or inaction on the letter-protest or claim, not any time later, even if
within two (2) years from the date of payment (as expressly stated in Section 196).
Notice that the filing of such judicial claim for refund after questioning the assessment is
within the two-year prescriptive period specified in Section 196. Note too that the filing
date of such judicial action necessarily falls on the beginning portion of the two-year
period from the date of payment. Even though the suit is seemingly grounded on
Section 196, the taxpayer could not avail of the full extent of the two-year period within
which to initiate the action in court.
Under the circumstances, it is evident that Cosmos was fully justified in asking for the
refund of the assailed taxes after protesting the same before the local treasurer.
Consistent with the discussion in the premises, Cosmos may resort to, as it actually did,
the alternative procedure of seeking a refund after timely protesting and paying the
assessment. Considering that Cosmos initiated the judicial claim for refund within 30
days from receipt of the denial of its protest, it stands to reason that the assessment
which was validly protested had not yet attained finality.
WHEREFORE, the petition is DENIED for lack of merit.

COMMISSINER OFCUSTOMS vs. HYPERMIX GR No. 179579

FACTS:

November 7 2003, petitioner Commissioner of Customs issued CMO 27-2003

(CustomsMemorandum Order). Under the memorandum, for tariff purposes, wheat is
classified according to:

a) Importer or consignee
 b) Country of origin

c) Port of discharge.Depending on these factors wheat would be classified as either

as food grade or food feed.

The corresponding tariff for food grade wheat was 3%, for food feed grade 7%.4 a
month after the issuance of CMO 27-200 respondent filed a petition for declaratory for
Relief with the Regional Trial Court of Las Piñas City. Respondent contented that CMO
27-2003 was issued without following the mandate of the Revised Administrative Code
on public participation, prior notice, and publication or registration with University of the
Philippines Law Canter. Respondent also alleged that the regulation summarily
adjudged it to be a feed grade supplier without the benefit of prior assessment and
examination, despite having imported food grade wheat, it would be subjected to the 7%
tariff upon the arrival of the shipment, forcing to pay133%. Respondent also claimed
that the equal protection clause of the Constitution was violated and asserted that the
retroactive application of the regulation was confiscatory in nature. Petitioners filed a
Motion to Dismiss. They alleged that: 1. The RTC did not have jurisdiction over the
subject matter of the case, 2. an action for declaratory relief (Rule 63, Sec.1 “who may
file petition”) was improper, 3. CMO 27-2003 was internal administrative rule not
legislative in nature, and 4. The claims of respondent were speculative and premature,
because the Bureau of Customs had yet to examine respondent’s products.

RTC held that a petition for declaratory relief was proper remedy, and that respondent
was the proper party to file it.

ISSUE:

Whether or not the CMO 27-2003 of the petitioner met the requirements for the Revised
Administrative Code? Whether or not the content of the CMO 27-2003 met the
requirement of the equal protection clause of the Constitution

RULING:

NO.

The petitioners violated respondents’ right to due process in the issuance of CMO 27-
2003 when they failed to observe the requirements under the Administrative Code
which are:

Sec 3. Filing. (1) Every agency shall file with the University of the Philippines Law
Center three (3) certified copies of every rule adopted by it. Rules in force on the date of
effectively of this Code which are not filed within three (3) months from that date shall
not thereafter be the bases of any sanction against any party of persons. Sec 9. Public
Participation. - (1) If not otherwise required by law, an agency shall, as far as
practicable, publish or circulate notices of proposed rules and afford interested parties
the opportunity to submit their views prior to the adoption of any rule. In the fixing of
rates, no rule or final order shall be valid unless the proposed rates shall have been
published in a newspaper of general circulation at least 2 weeks before the first hearing
thereon. In case of opposition, the rules on contested cases shall be observed. CMO
27-2003 is not constitutional because it failed to meet the equal protection clause. We
do not see how the quality of wheat is affected by who imports it, where it is discharged
or which country it came from.

The Equal Protection Clause means that no person or class of persons shall be
deprived of the same protection of laws enjoyed by other persons or other classes in the
same place in the like circumstances. The guarantee of equal protection of laws is not
violated when there is a reasonable classification.

For a classification to be reasonable, it must be shown that

a) it rests on substantial distinctions;

b) it is germane to the purpose of the law;

c) it is not limited to existing conditions only; and

d) it applies equally to all members of the same class.

Petitioners violated respondents right to equal protection of laws when they provided
forum reasonable classification in the application of the regulation. Petitioner
Commissioner of Customs went beyond his powers of delegated authority when the
regulation limited the powers of the customs officer to examine and assess imported
articles.

CIR vs CTA and Petron Corporation

GR no. 207843

Petron is engaged in the manufacture and marketing of petroleum products,

imports alkalyte as a raw material or blending component for the manufacture of
ethanol-blended motor gasoline.

The CIR has ruled that alkalyte is exempt from the payment of the excise tax
because it was not among those articles enumerated as subject to excise tax under the
Title VI of the Republic Act No. 8424 or the 1997 NIRC.
Issue:

Whether or not it is under the jurisdiction of the CIR to interpret tax laws.

Ruling:

Yes. It is under the jurisdiction of CIR to interpret tax laws. According to Section 4
of the Tax Code, on the Power of the Commissioner to Interpret Tax Laws and to
Decide Tax Cases. The power to interpret the provisions of this Code and other tax laws
shall be under the exclusive and original jurisdiction of the Commissioner, subject to
review by the Secretary of Finance.

Applying the principle of ejusdem generis, the phrase 'other matters arising under
this Code' should be interpreted as of the same nature as those that have preceded
them. As such, the CIR was correct in its interpretation of Section 148 (e) of the NIRC to
include alkalyte among the articles subject to customs duties, as it is provided in the first
paragraph of Section 4 that the interpretation of the same is under the original
jurisdiction of the CIR.

City of Manila vs Grecia Cuerdo

GR No. 175723

Facts:

The record shows that petitioner City of Manila, through its treasurer, petitioner
Liberty Toledo, assessed taxes for the taxable period from January to December 2002
against private. respondents SM Mart, Inc., SM Prime Holdings, Inc., Star Appliances
Center, Supervalue, Inc., Ace Hardware Philippines, Inc., Watsons Personal Care
Stores Phils., Inc., Jollimart Philippines Corp., Surplus Marketing Corp. and Signature
Lines.

In its Order dated July 9, 2004, the RTC granted private respondents’ application
for a writ of preliminary injunction. Petitioners filed a Motion for Reconsideration but the
RTC denied it in its Order dated October 15, 2004. Petitioners then filed a special civil
action for certiorari with the CA assailing the July 9, 2004 and October 15, 2004 Orders
of the RTC.
 In its Resolution promulgated on April 6, 2006, the CA dismissed petitioners’
petition for certiorari holding that it has no jurisdiction over the said petition. The CA
ruled that since appellate jurisdiction over private respondents’ complaint for tax refund,
which was filed with the RTC, is vested in the Court of Tax Appeals (CTA), pursuant to
its expanded jurisdiction under Republic Act No. 9282 (RA 9282), it follows that a
petition for certiorari seeking nullification of an interlocutory order issued in the said
case should, likewise, be filed with the CTA.

Issue:

Whether or not the petition for certiorari must be filed to CTA not to the CA.

Ruling:

Yes. A perusal of the above provisions would show that, while it is clearly stated
that the CTA has exclusive appellate jurisdiction over decisions, orders or resolutions of
the RTCs in local tax cases originally decided or resolved by them in the exercise of
their original or appellate jurisdiction, there is no categorical statement under RA 1125
as well as the amendatory RA 9282, which provides that the CTA has jurisdiction over
petitions for certiorari assailing interlocutory orders issued by the RTC in local tax cases
filed before it.

CIR vs CTA and CBK Power Company Limited

GR No. 203054

Facts:

CBK Power Company Limited filed a CTA Case Nos. 8246 and 8302 on different
dates and were handled by different lawyers, i.e., Atty. Sandico and Atty. Mauricio,
respectively. The cases were later on consolidated and the pre-trial was set on
November 3, 2011 but, Atty. Mauricio, was not able to attend for health reasons; and
Atty. Sandico to whom the consolidated cases were later on assigned was not able to
attend the pre-trial on time on December 1, 2011 as he was attending another case in
another division of the CTA, CBK moved that CIR be declared in default.
 However, CIR filed a Motion to Lift Order of Default alleging that the failure to
attend the pre-trial conference on November 3, 2011 was due to confusion in office
procedure in relation to the consolidation of CTA since the latter was being handled by a
different lawyer; that when the pre-trial conference was reset to December 1, 2011,
petitioner's counsel had to attend the hearing of another case in the CTA's First
Division, he unintentionally missed the pre-trial conference of the consolidated cases.
CTA denied the motion to lift order of default, CTA denied as well the motion for
reconsideration.

CIR files the instant petition for certiorari raising among others CBK claims that
CIR chose an erroneous remedy when it filed a petition for certiorari with SC since the
proper remedy on any adverse resolution of any division of the CTA is an appeal by way
of a petition for review with the CTA en banc.

Issue:

Whether or not CBK is correct.

Ruling:

No. CTA en banc has jurisdiction over final order or judgment but not over
interlocutory orders issued by the CTA in division.

Given the differences between a final judgment and an interlocutory order, there
is no doubt that the CTA Order dated December 23, 2011 granting CBK motion to
declare CIR as in default and allowing CBK to present its evidence ex parte, is an
interlocutory order as it did not finally dispose of the case on the merits but will proceed
for the reception of the former's evidence to determine its entitlement to its judicial claim
for tax credit certificates. Even the CTA's subsequent orders denying CIR's motion to lift
order of default and denying reconsideration thereof are all interlocutory orders since
they pertain to the order of default. Since the CTA Orders are merely interlocutory, no
appeal can be taken therefrom.
 Team Sual Corporation vs CIR

GR no. 210032

Facts:

Respondent received from the Commissioner of Internal Revenue three formal

letters of Demand with assessment notices for deficiency of internal revenue taxes for
fiscal years ending June 30, 1996, 1997 and 1998 respectively.

Respondent protested such assessment notices. Due to the inaction of the

CIR of the protest ,the latter filed a petition for review with the Court of Tax Appeals,
which prayed for the cancellation of the tax assessments and deficiency income tax,
documentary stamp tax (DST), regular dst, industry issue, final withholding tax,
expanded withholding tax, and fringe benefit tax, issued against it by the CIR.

On April 19, 2005, the CIR approved the offered compromised of DST- regular
assessment for the fiscal year of June 30, 1996, 1997, 1998. However, respondent
claimed that it availed of the Abatement program for its deficiency final withholding tax,
trust assessments for the said fiscal years, 1996 and 1998.

The CTA division rendered its decision in favor of the CIR, where it stated that
respondent failed to produce the necessary document to prove its Tax abatement
application and the Tax amnesty Law.

respondent was not satisfied with the decision alleging that mere certification is
sufficient proof that gives them the right under the Tax Abatement program. Hence this
petition.

Issue:

Whether or not the Certification issued by BIR, is sufficient proof that respondent
availed of the Tax Abatement program.

Ruling:

No. According to the High court, the BIR issued prescribing the guidelines of the
implementation of the tax abatement program, where the last step in the abatement
process is the issuance of the termination letter. Since this termination letter proves that
the taxpayer’s application for tax abatement has been approved, thus without a
termination letter, a tax assessment cannot be considered closed and terminated.

Here, the respondent failed to present the termination letter, it only presented the
documentary proof that it applied for the abatement program and in the receipts as a
proof that it paid, however it does not prove that such application has been accepted.