PHILIPPINE LONG DISTANCETELEPHONE COMPANY,INC., petitioner, vs. CITY OF DAVAOand ADELAIDA B. BARCELONA, in hercapaci! a" he Ci! Trea"#rer $%Da&a$, respondents.'G.R. N$. ()*+,-.A#.#" //, /00(1SECOND DIVISION D E C I S I O NMENDO2A, J.3This is a petition for reviewon certiorari under Rule 45 of the 199Rules ofCivil!ro"edureof theresolution#$1% dated &une '(# ')))# of the Re*ionalTrial Court# +ran"h 1(# Davao Cit,#a-r.in* the ta/ assess.ent of petitionerand the denial of its "lai. for ta/ refund 0,the Cit, Treasurer of Davao1The fa"ts are as follows2On &anuar, 1999# petitioner !hilippine3on*Distan"eTelephoneCo1# In"1 4!3DT5applied for a 6a,or7s !er.it to operate itsDavao6etroE/"han*e1Respondent Cit,of Davao withheld a"tion on theappli"ation pendin* pa,.ent 0, petitionerof thelo"al fran"hiseta/inthea.ountof!(#891#9951' for the :rst to the fourth;uarter of 19991$'% In a letter dated 6a, (1#1999#$(% petitioner protested theassess.ent of the lo"al fran"hise ta/ andre;uestedarefundof thefran"hiseta/paid 0, it for the ,ear 199 and the :rst tothe third ;uarters of 19991!etitioner"ontendedthat it was e/e.pt fro.thepa,.ent of fran"hise ta/ 0ased on anopinion of the +ureau of 3o"al u*ust (# 19911Se"tion 1' of said fran"hise# liBewise# "ontains the ?in lieu of all ta/esA proviso1In this "onne"tion# Se"tion '( of R> 9'5# ;uoted hereunder# whi"h was approved on 6ar"h 1# 1995# provides for the e;ualit, of treat.ent in the tele"o..uni"ations industr,2?SEC1 '(1E;ualit, of Treat.ent in the Tele"o..uni"ations Industr,1 C >n, advanta*e# favor# privile*e# e/e.ption# or i..unit, *ranted under e/istin* fran"hises# or .a, hereafter 0e *ranted# shall ipso fa"to 0e"o.e part of previousl, *ranted tele"o..uni"ations fran"hises and shall 0e a""orded i..ediatel, and un"onditionall, to the *rantees of su"h fran"hises2 Provided, however# That the fore*oin* shall neither appl, to nor aDe"t provisions of tele"o..uni"ations fran"hises "on"ernin* territor, "overed 0, the fran"hise# the life span of the fran"hise# or the t,pe of servi"e authoriEed 0, the fran"hise1A 4Fnders"orin* supplied15On the 0asis of the afore;uoted Se"tion '(of R> 9'5# !3DT as a tele"o..uni"ationsfran"hise holder 0e"o.es auto.ati"all, "overed 0, the ta/ e/e.ption provisions ofR> 9'5# whi"h tooB eDe"t on 6ar"h 18# 19951>""ordin*l,# !3DT shall 0e e/e.pt fro. the pa,.ent of fran"hise and 0usiness ta/es i.posa0le 0, 3 9'5 on 6ar"h 18# 19951Gowever# !3DT shall 0e lia0le topa, the fran"hise and 0usiness ta/es on its*ross re"eipts realiEed fro. &anuar, 1# 199' up to 6ar"h 15# 1995# durin* whi"h period !3DT was not enHo,in* the ?.ost favored "lauseA proviso of R> )'5 4si"51$4%In a letter dated Septe.0er '# 1999#respondent >delaida +1 +ar"elona# Cit,Treasurer of Davao# denied the protest and"lai.forta/refundof petitioner#$5% "itin*the le*alopinion of the Cit, 3e*alO-"erof Davao and >rt1 1)# I1 of Ordinan"e No1'()# Series of 1991# as a.ended 0,Ordinan"e No1 519# Series of 199'# whi"hprovides2Notwithstandin* an, e/e.ption *ranted 0, an, law or other spe"ial law# there is here0, i.posed a ta/ on 0usinesses enHo,in* a fran"hise# at a rate of Sevent,J:ve per"ent 45@5 of one per"ent 41@5 of the *ross annual re"eipts for the pre"edin* "alendar ,ear 0ased on the in"o.e or re"eipts realiEed within the territorial Hurisdi"tion of Davao Cit,1$8%!etitioner re"eived respondent Cit,Treasurer7sorder of denial onO"to0er 1#19991 On Nove.0er (# 1999# it :led apetition in the Re*ional Trial Court ofDavaoseeBin*a reversal of respondentCit, Treasurer7s denial of petitioner7sprotest and the refund of the fran"hise ta/paid 0, it for the ,ear 1999 in the a.ountof !'#59)#9'91'(1The petition was :ledpursuant toII195and198of the3o"al1 No1 18)51No"lai. for refund of fran"hise ta/es paid in199 was .ade as the sa.e had alread,pres"ri0edunderI198of the31No1 9'5# inrelationtothefran"hisesofs was said 0, the Supre.e Court of Tennessee in 6e.phis vs1 F1 R !1 +anB 491 Tenn1# 548# 55)5# ?The ri*ht of ta/ation is inherent in the State1 It is a prero*ative essential to the perpetuit, of the *overn.entK and he who "lai.s an e/e.ption fro. the "o..on 0urden .ust Hustif, his "lai. 0, the "learest *rant of or*ani" or statute law1AOther utteran"es e;uall, or .ore e.phati" "o.e readil, to hand fro. the hi*hest authorit,1In Ohio 3ife Ins1 and Trust Co1 vs1 De0olt 418 Goward# 4185# it was said 0, Chief &usti"e Tane,# that the ri*ht of ta/ation will not 0e held to have 0een surrendered# ?unless the intention to surrender is .anifested 0, words too plain to 0e .istaBen1AIn the "ase of the Delaware Railroad Ta/ 419 Lalla"e# ')8# ''85# the Supre.e Court of the Fnited States said that the surrender# when "lai.ed# .ust 0e shown 0, "lear# una.0i*uous lan*ua*e# whi"h will ad.it of no reasona0le "onstru"tion "onsistent with the reservation of the power1If a dou0t arises as to the intent of the le*islature# that dou0t .ust 0e solved in favor of the State1In Erie Railwa, Co.pan, vs1 Co..onwealth of !enns,lvania 4'1 Lalla"e# 49'# 4995# 6r1 &usti"e Gunt# speaBin* of e/e.ptions# o0served that a State "annot strip itself of the .ost essential power of ta/ation 0, dou0tful words1?It "annot# 0, a.0i*uous lan*ua*e# 0e deprived of this hi*hest attri0ute of soverei*nt,1AIn Tennessee vs1 Lhitworth 411 F1 S1# 1'9# 1(85# it was said2 ?In all "ases of this Bind the ;uestion is as to the intent of the le*islature# the presu.ption alwa,s 0ein* a*ainst an, surrender of the ta/in* power1A In =arrin*ton vs1 Tennessee and Count, of Shel0, 495 F1 S1# 89# 8985# 6r1 &usti"e Swa,ne said2 ?1 1 1 Lhen e/e.ption is "lai.ed# it .ust 0e shown indu0ita0l, to e/ist1>t the outset# ever, presu.ption is a*ainst it1> wellJfounded dou0t is fatal to the "lai.1It is onl, when the ter.s of the "on"ession are too e/pli"it to ad.it fairl, of an, other "onstru"tion that the proposition "an 0e supported1AThe ta/ e/e.ption .ust 0e e/pressedin the statute in "lear lan*ua*e that leavesno dou0t of the intention of the le*islatureto *rant su"h e/e.ption1 >nd# even if it is*ranted# the e/e.ption .ust 0einterpretedin strictissimi !uris a*ainst theta/pa,er and li0erall, in favor of the ta/in*authorit,1$1'%In the present "ase# petitioner Husti:esits "lai.of ta/ e/e.ption 0, strainedinferen"es1=irst# it "ites R1>1 No1 9'5#otherwise Bnown as the !u0li"Tele"o..uni"ations !oli", >"t of the!hilippines# I'( of whi"h reads2SEC1 '(.E"ualit# of Treatment in the Telecommunications Industr#. S >n, advanta*e# favor# privile*e# e/e.ption# or i..unit, *ranted under e/istin* fran"hises# or .a, hereafter 0e *ranted# shall ipso facto 0e"o.e part of previousl, *ranted tele"o..uni"ations fran"hises and shall 0e a""orded i..ediatel, and un"onditionall, to the *rantees of su"h fran"hises2 Provided, however, That the fore*oin* shall neither appl, to nor aDe"t provisions of tele"o..uni"ations fran"hises "on"ernin* territor, "overed 0, the fran"hise# the life span of the fran"hise# or the t,pe of servi"e authoriEed0, the fran"hise1!etitioner then "lai.s that S.art and"t No1 9'5 "ontains the*eneral provisions# statin* that the >"tshall 0e Bnown as the !u0li"Tele"o..uni"ations !oli", >"t of the!hilippines# and a de:nition of ter.s1$15% >rt1 II provides for its poli"ies ando0He"tives# whi"h is to foster thei.prove.ent and e/pansion oftele"o..uni"ations servi"es in the"ountr, throu*h2 415 the "onstru"tionoftele"o..uni"ations infrastru"ture andinter"onne"tionfa"ilities# havin*in.indthe e-"ient use of the radio fre;uen",spe"tru.ande/tensionof 0asi"servi"esto areas not ,et servedK 4'5 fair# Hust# andreasona0le rates and tariD "har*esK 4(5sta0le# transparent# and fair ad.inistrativepro"essesK 445 relian"e on privateenterprise for dire"t provision oftele"o..uni"ations servi"esK 455 dispersalof ownership of tele"o..uni"ationsentities in "o.plian"e with the"onstitutional .andate to de.o"ratiEe theownership of pu0li" utilitiesK 485en"oura*e.ent of the esta0lish.ent ofinter"onne"tion with other "ountries toprovide a""ess to international"o..uni"ations hi*hwa,s anddevelop.ent of a "o.petitive e/portJoriented do.esti" tele"o..uni"ations.anufa"turin* industr,K and 45develop.ent of hu.an resour"es sBillsand "apa0ilities to sustain the *rowth anddevelop.ent of tele"o..uni"ations1$18%>rt1 III provides for itsad.inistration1The operational andad.inistrativefun"tionsaredele*atedtothe National Tele"o..uni"ationsCo..ission 4NTC5# while poli",J.aBin*#resear"h# and ne*otiations in internationaltele"o..uni"ations.attersareleft withthe Depart.ent of Transportation andCo..uni"ations1$1%>rt1 IV "lassi:es the "ate*ories oftele"o..uni"ations entities as2 3o"alE/"han*e Operator# InterJE/"han*eCarrier# International Carrier# ValueJ>ddedServi"e !rovider# 6o0ile Radio Servi"es#and Radio !a*in* Servi"es1$19% >rt1 Vprovides for the use of other servi"es andfa"ilities# su"h as "usto.er pre.isese;uip.ent# whi"h .a, 0e used within thepre.ises of tele"o..uni"ationssu0s"ri0ers su0He"t onl, to there;uire.ent that it is t,peJapproved 0, theNTC# andradiofre;uen",spe"tru.# theassi*n.ent of whi"hshall 0esu0He"t toperiodi" review1$19%>rt1 VI# entitled=ran"hise# RatesandRevenueDeter.ination# provides for there;uire.ent to o0tain a fran"hise fro.Con*ress and a Certi:"ate of !u0li"Convenien"eandNe"essit,fro.theNTC0efore a tele"o..uni"ations entit, "an0e*inits operations1It alsoprovides fortheNTC7sresidual powertore*ulatetheratesor tariDswhenruinous"o.petitionresults or when a .onopol, or a "artel or"o.0ination in restraint of free"o.petition e/ists and the rates or tariDsaredistortedoruna0letofun"tionfreel,and the pu0li" is adversel, aDe"ted1Thereis also a provision relatin* to revenuesharin* arran*e.ents 0etween interJ"onne"tin* "arriers1$')%>rt1 VII provides for the ri*hts oftele"o..uni"ations users1$'1%>rt1 VIII# entitledTele"o..uni"ationsDevelop.ent# where I'( is found# providesfor pu0li" ownership oftele"o..uni"ations entities# privatiEationof e/istin*fa"ilities# andthee;ualit,oftreat.ent provision1$''%>rt1 IN "ontains the =inal !rovisions1$'(%R1>1 No1 9'5 is thus a le*islativeena"t.ent desi*ned to set the nationalpoli", on tele"o..uni"ations and providethe stru"tures to i.ple.ent it to Beep upwith the te"hnolo*i"al advan"es in theindustr, and the needs of the pu0li"1Thethrustof thelawistopro.ote*raduall,the dere*ulation of the entr,# pri"in*# andoperations of all pu0li"tele"o..uni"ations entities and thuspro.ote a level pla,in* :eld in thetele"o..uni"ations industr,1$'4%There isnothin* in the lan*ua*e of I'( nor in thepro"eedin*s of 0oth the Gouse ofRepresentatives and the Senate inena"tin* R1>1 No1 9'5 whi"h shows that it"onte.plates the *rant of ta/ e/e.ptionsto all tele"o..uni"ations entities#in"ludin* those whose e/e.ptions had0een withdrawn 0, the 31No1 9'5 "ould "onte.plate e/e.ptionfro. "ertain re*ulator, or reportin*re;uire.ents# 0earin* in .ind the poli", ofthelaw1It isnoteworth,that# inholdin*S.art and ppeals#$'8% ahi*hl,spe"ialiEed"ourtwhi"h perfor.s Hudi"ial fun"tions as it was"reatedfor thereviewof ta/"ases1$'% In"ontrast# the +3 18) 43nother e/e.ption *ranted 0, the law in line with its poli", of dere*ulation is the e/e.ption fro. the re;uire.ent of se"urin* per.its fro. the NTC ever, ti.e a tele"o..uni"ations "o.pan, i.ports e;uip.ent1Ta/ e/e.ptions should 0e *ranted onl, 0, "lear and une;uivo"al provision of law on the 0asis of lan*ua*e too plain to 0e .istaBen1

The CITY OF ILOILO,Mr.ROMEO V.MANI7AN, in hi" capaci! a" he Trea"#rer $% I8$i8$ Ci!# !etitioners# VS1 SMARTCOMM9NICATIONS, INC. 5SMART6# Respondent1G.R. N$. (,-/,0=e0ruar, '# '))9SECOND DIVISION D E C I S I O NBRION, J12 +efore this Court is the appeal0, certiorari :led 0, the Cit,of Iloilo 4petitioner5 under Rule 45 of theRules of Court seeBin* to set aside thede"isionof theRe*ional Trial Court 4,TC5of Iloilo Cit,# +ran"h '9# whi"h de"lared thatrespondent S6>RT Co..uni"ations# In"14+-A,T5 is e/e.pt fro.thepa,.ent oflo"al fran"hise and 0usiness ta/es1 BAC7GRO9ND FACTS The fa"ts of the "ase are not indispute1S6>RT re"eived a letter ofassess.ent dated =e0ruar, 1'# '))' fro.petitioner re;uirin* it to pa, de:"ien",lo"al fran"hiseand0usinessta/es4inthea.ount of !84#5451'9# plus interests andsur"har*es5 whi"h it in"urred for the ,ears199 to '))11S6>RT protested theassess.ent 0, sendin* a letterdated =e0ruar, 15# '))' to the Cit,Treasurer1It "lai.ed e/e.ption fro.pa,.ent of lo"al fran"hiseand0usinessta/es 0ased on Se"tion 9 of its le*islativefran"hise under Repu0li" >"t 4,.A.5 No1'944+-A,T.sfranchise51 FnderS6>RT7sfran"hise# it was re;uired to pa, a fran"hiseta/ e;uivalent to (@ of all*ross re"eipts#whi"h a.ount shall 0e in lieu of allta/es1S6>RT "ontends that the ?in lieu ofall ta/esA "lause "overs lo"al fran"hise and0usiness ta/es1 S6>RT si.ilarl, invoBed R1>1 No19'5 or the !u0li" Tele"o..uni"ations!oli", >"t 4Pu(lic Telecoms Act5 whoseSe"tion '( de"lares that an, e/istin*privile*e# in"entive# advanta*e# ore/e.ption *ranted under e/istin*fran"hisesshall ipsofacto 0e"o.epart ofpreviousl, *rantedJtele"o..uni"ationsfran"hise1S6>RT"ontendsthat 0,virtueof Se"tion'(# ta/e/e.ptions*ranted0,the le*islature to other holders oftele"o..uni"ations fran"hise .a, 0ee/tended to and availed of 0, S6>RT1 Throu*h a letter dated >pril 4# '))'#petitioner denied S6>RT7s protest# "itin*the failure of S6>RT to "o.pl, with Se"tion'5' of R1>1 No1 18) or the 3o"alRT o0He"tedto thepetitioner7sdenial of itsprotest 0,institutin*a"asea*ainst petitioner 0eforetheRTCof IloiloCit,1$1%The trial "ourt ruled in favour ofS6>RT and de"lared thetele"o..uni"ations:r.e/e.ptfro.thepa,.ent of lo"al fran"hiseand0usinessta/esK$'%it a*reedwithS6>RT7s "lai.ofe/e.ption under Se"tion 9 of its fran"hiseand Se"tion '( of the !u0li" Tele"o.s >"t1$(% =ro.this Hud*.ent# petitioner :lesthis petition for review on certiorari raisin*the sole issue of whether S6>RT is e/e.ptfro.thepa,.ent of lo"al fran"hiseand0usiness ta/es1

THE CO9RT:S R9LING S6>RTreliesontwoprovisionsoflaw to support its "lai. for ta/ e/e.ption2Se"tion 9 of S6>RT7s fran"hise and Se"tion'( of the !u0li" Tele"o.s >"t1>fter areview of pertinent laws and Hurispruden"eU parti"ularl,of +-A,TCommunications,Inc. v. Cit# of )avao#$4% a "ase whi"h#e/"ept for the respondent# involves thesa.eset of fa"ts andissues U we:ndS6>RT7s "lai. for e/e.ption to 0eunfounded1 Conse;uentl,# we :nd thepetition .eritorious1 The 0asi" prin"iple in the"onstru"tion of laws *rantin* ta/e/e.ptions has 0een ver, sta0le1>s earl,as 1918# in the "ase of/overnment of thePhilippine Islands v. -onte de Piedad#$5% this Court has de"lared that he who"lai.s an e/e.ption fro. his share of the"o..on0urdenof ta/ation.ust Hustif,his "lai.0,showin* that the 3e*islatureintended to e/e.pt hi. 0, words too plainto 0e 0e,ond dou0t or .istaBe1Thisdo"trinewas repeatedinthe19'8"aseof Asiatic Petroleum v. lanes#$8% as well asinthe"aseof $or!av. Commissioner ofInternal ,evenue%CI,&$% de"idedin19811Citin*>.eri"anHurispruden"e# theCourtstated in E. ,odrigue0, Inc. v. CI,2$9% The ri*ht of ta/ation isinherent in the State1 It is aprero*ativeessential totheperpetuit, of the*overn.entK and he who"lai.s an e/e.ption fro.the "o..on 0urden# .ustHustif, his "lai. 0, the"learest*rant of or*ani"orstatute law /// Lhene/e.ption is "lai.ed# it.ust 0eshownindu0ita0l,to e/ist1 >t the outset# ever,presu.ptionisa*ainstit1 >wellJfounded dou0t is fatalto the "lai.K it is onl, whenthe ter.s of the "on"essionare too e/pli"it to ad.itfairl, of an, other"onstru"tion that theproposition "an 0esupported1 In the re"ent "ase of )igitalTelecommunications, Inc. v. Cit#/overnment of $atangas, et al.#$9% weadheredtothesa.eprin"iplewhenwesaid2 > ta/ e/e.ption "annotarise fro. va*ueinferen"e111Ta/ e/e.ptions.ust 0e "lear andune;uivo"al1> ta/pa,er"lai.in* a ta/ e/e.ption.ust point to a spe"i:"provision of law"onferrin*on the ta/pa,er# in "lear andplain ter.s# e/e.ption fro.a "o..on 0urden1>n,dou0t whether a ta/e/e.ption e/ists is resolveda*ainst the ta/pa,er1 The 0urden therefore is on S6>RT to provethat# 0ased on its fran"hise and the !u0li"Tele"o.s>"t# it isentitledtoe/e.ptionfro. the lo"al fran"hise and 0usiness ta/es0ein* "olle"ted 0, the petitioner1 Claim for Exemption underSMARTs franchise Se"tion 9 of S6>RT7s fran"hisestates2 Se"tion 91 Taxprovisions1 SThe*rantee#its su""essors or assi*nsshall 0e lia0le to pa, thesa.e ta/es on their realestate 0uildin*s andpersonal propert,#e/"lusiveofV this fran"hise# as otherpersons or "orporationswhi"harenowor hereafter.a,0ere;uired0,lawtopa,1 In addition thereto# he.ranee, i" "#cce""$r"$r a""i.n" "ha88 pa! a%ranchi"e a; e#"ine""ran"aced #nder i"%ranchi"e. B# Aheherhe %ranchi"e a;e;e?pi$n A$#8dinc8#dee;e?pi$n %r$?e;aci$n" >! >$h he8$ca8 and he nai$na8.$&ern?en i" n$#nelso# the se"ondpara*raph of Se"tion 9speaBs of ta/ returns :ledand ta/es paid to the?Co..issioner of InternalRevenue or his dul,authoriEed representativeina""ordan"e with theNational Internal RevenueCode1A6oreover# thesa.epara*raph de"lares that theta/ returns ?shall 0e su0He"tto audit 0, the +ureau ofInternal Revenue1A Nothin*is .entioned in Se"tion 9a0out lo"alta/es1 The"learintent is for the ?in lieu of allta/esA"lausetoappl,onl,tota/esundertheNationalInternal RevenueCodeandnot to lo"al ta/es1 Nonetheless# evenif Se"tion9ofS6>RT7s fran"hise "an 0e "onstrued as"overin* lo"al ta/es as well# relian"ethereon would now 0e unavailin*1The ?inlieu of all ta/esA "lause 0asi"all, e/e.ptsS6>RT fro. pa,in* all other Binds of ta/esfor as lon* as it pa,s the (@ fran"hise ta/Kit is the fran"hise ta/ that shall 0e in lieu ofall ta/es# andnotan,otherfor.of ta/1$18% =ran"hise ta/es on tele"o..uni"ations"o.panies# however# have 0een a0olished0,R1>1No1 18ortheE/pandedValueJ>dded Ta/ 3aw4E12AT aw5# whi"h wasena"ted0,Con*resson &anuar,1# 19981$1%To repla"e the fran"hise ta/# the EJV>T3aw i.posed a 1)@$19% valueJadded ta/ ontele"o..uni"ations "o.panies underSe"tion 1)9 of the National InternalRevenue Code1$19%The ?in lieu of all ta/esA"lause in the le*islative fran"hise of S6>RThas thus 0e"o.e functus o3cio# .adeinoperative for la"B of a fran"hise ta/1$')% S6>RT7s "lai.for e/e.ptionfro.lo"al 0usinessandfran"hiseta/es0asedonSe"tion9of itsfran"hiseisthereforeunfounded1 Claim for ExemptionUnder u!lic Telecoms Act S6>RT additionall, invoBesthe?e;ualit, "lauseAunder Se"tion'(of the !u0li" Tele"o.s >"t2 SECTION/*. E"ualit# of Treatmentin theTelecommunications$ndustr#. F An!ad&ana.e, %a&$r,pri&i8e.e, e;e?pi$n, $ri??#ni! .raned#ndere;i"in. %ranchi"e", $r?a! herea%er >e.raned, "ha88 ipsofacto >ec$?e par $%pre&i$#"8! .ranede8ec$??#nicai$n"%ranchi"e and "ha88 >eacc$rded i??ediae8!and #nc$ndii$na88! $he .ranee" $% "#ch%ranchi"e"2 !rovided#however# That the fore*oin*shall neither appl, to noraDe"t provisions oftele"o..uni"ationsfran"hises "on"ernin*territor, "overed 0, thefran"hise# the life span ofthe fran"hise# or the t,pe ofservi"e authoriEed 0, thefran"hise1$E.phasissupplied1% >s in the "ase of +-A,T v. Cit# of )avao#$'1% S6>RT posits that sin"e the fran"hise oftele"o..uni"ations "o.panies *rantedafter the ena"t.ent of its fran"hise"ontained provisions e/e.ptin* these"o.panies fro.0oth national and lo"alta/es# theseprivile*es shoulde/tendtoand 0ene:t S6>RT# appl,in* the ?e;ualit,"lauseA a0ove1The petitioner# on theother hand# 0elieves that the "lai.ede/e.ption under Se"tion '( of the !u0li"Tele"o.s >"t is si.ilarl, unfounded1 Le a*ree with the petitioner1 Lhether Se"tion '( of the "ited lawe/tends ta/ e/e.ptions *ranted 0,Con*ress to new fran"hise holders toe/istin*ones has 0eenansweredinthene*ative in the "ase of P)T v. Cit# of)avao1$''%The ter. ?e/e.ptionA in Se"tion'(of the!u0li" Tele"o.s >"t does not.eanta/e/e.ptionK rather# it referstoe/e.ption fro. "ertain re*ulator, orreportin* re;uire.ents i.posed 0,*overn.ent a*en"ies su"h as the NationalTele"o..uni"ations Co..ission1Thethrust of the !u0li" Tele"o.s >"t is topro.ote the *radual dere*ulation of entr,#pri"in*# and operations of all pu0li"tele"o..uni"ations entities# andthus tolevel the pla,in* :eld in thetele"o..uni"ations industr,1Thelan*ua*e of Se"tion '( and thepro"eedin*s of 0othGouses of Con*ressare0ereft of an,thin*that wouldsi*nif,the *rant of ta/ e/e.ptions to alltele"o..uni"ations entities1$'(% Intent to*rant ta/e/e.ption"annot therefore0edis"erned fro. the lawK the ter.?e/e.ptionA istoo *eneral to in"lude ta/e/e.ption and runs "ounter to there;uire.ent that the *rant of ta/e/e.ptionshould0estatedin"lear andune;uivo"al lan*ua*e too plain to 0e0e,ond dou0t or .istaBe1 Surchar%e and $nterests Sin"e S6>RT "annot validl, "lai.an, ta/ e/e.ption 0ased either on Se"tion9 of its fran"hise or Se"tion '( of the!u0li" Tele"o.s >"t# it follows thatpetitioner "an i.pose and "olle"t the lo"alfran"hise and 0usiness ta/es a.ountin*to !84#5451'9 it assessed a*ainstS6>RT1>sidefro.these# S6>RTshouldalso 0e .ade to pa, sur"har*e andinterests on the ta/es due1 Thesettledruleisthat *oodfaithand honest 0elief that one is not su0He"t tota/ on the 0asis of previous interpretationof *overn.ent a*en"ies tasBed toi.ple.ent the ta/ laws are su-"ientHusti:"ation to delete the i.position ofsur"har*es and interest1$'4%In refutin*lia0ilit, for the lo"al fran"hise and 0usinessta/es# wedonot0elieveS6>RTreliedin*ood faith in the :ndin*s and "on"lusion ofthe +ureau of 3o"al RT lia0le to pa, thelo"al fran"hise and 0usiness ta/esa.ountin* to !84#5451'9# assesseda*ainst it 0, petitioner# plus thesur"har*es and interest due thereon1 SO ORDERED. >RTFRO D1+RION>sso"iate&usti"e $1'% Se"tion 1(1Franchise Tax1U N$Aih"andin. an! e;e?pi$n.raned >! an! 8aA $r $her "pecia88aA# theprovin"e.a,i.poseata/on0usinesses enHo,in* a fran"hise# at therate not e/"eedin* :ft, per"ent 45)@5 ofone per"ent 41@5 of the *ross annualre"eiptsforthepre"edin*"alendar,ear0ased on the in"o.in* re"eipt# or realiEedwithin its territorial Hurisdi"tion1 / / /1$E.phasis supplied1%$19% The ta/ rate is now 1'@ per RJV>T 3aw1$'9% SEC1 41 Powerof theCommissionertoInterpret Tax aws and to )ecide Cases. UThepowertointerprettheprovisionsofthis Code $NIRC% and other ta/ laws shall0e under the e/"lusive and ori*inalHurisdi"tions of the Co..issioner# su0He"tto review0, the Se"retar, of =inan"e1///1MACTAN CEB9 INTERNATIONALAIRPORT A9THORITY, petitioner, vs.HON. FERDINAND G. MARCOS, in hi"capaci! a" he Pre"idin. G#d.e $% heRe.i$na8 Tria8 C$#r, Branch /0, Ce>#Ci!, THE CITY OF CEB9, repre"ened>! i" Ma!$r, HON. TOMAS R.OSMEHA, and E9STAI9IO B.CESA, respondents.'G.R. N$. (/00+/.Sepe?>er ((,(EE,1TGIRD DIVISION D E C I S I O NDAVIDE, GR., J.3=or review under Rule 45 of the Rulesof Court on a pure ;uestion of law are thede"ision of '' 6ar"h 1995$1% of theRe*ional Trial Court 4RTC5 of Ce0u Cit,#+ran"h ')# dis.issin* the petition forde"larator,relief inCivil CaseNo1 CE+J189))# entitled ?-actan Ce(uInternational Airport Authorit#vs. Cit#ofCe(u#A and its order of 4 6a,1995$'%den,in* the .otion to re"onsiderthe de"ision1Le resolved to *ive due "ourse to thispetition for it raises issues dwellin* on thes"ope of the ta/in* power of lo"al*overn.ent units and the li.its of ta/e/e.ption privile*es of *overn.entJowned and "ontrolled "orporations1The un"ontradi"ted fa"tualante"edents are su..ariEed in the instantpetition as follows2!etitioner 6a"tan Ce0u International >irport >uthorit, 46CI>>5 was "reated 0, virtue of Repu0li" >"t No1 8959# .andated to ?prin"ipall, undertaBe the e"ono.i"al# e-"ient and eDe"tive "ontrol# .ana*e.ent and supervision of the 6a"tan International >irport in the !rovin"e of Ce0u and the 3ahu* >irport in Ce0u Cit,# / / / and su"h other airports as .a, 0e esta0lished in the !rovin"e of Ce0u/ / /A 4Se"1 (# R> 895951It is also .andated to2a5 en"oura*e# pro.ote and develop international and do.esti" air tra-" in theCentral Visa,as and 6indanao re*ions as a.eans of .aBin* the re*ions "enters of international trade and touris.# and a""eleratin* the develop.ent of the .eans of transportation and "o..uni"ation in the "ountr,K and#05 up*rade the servi"es and fa"ilitiesof the airports and to for.ulate internationall, a""epta0le standards of airport a""o..odation and servi"e1Sin"e the ti.e of its "reation# petitioner 6CI>> enHo,ed the privile*e of e/e.ption fro. pa,.ent of realt, ta/es in a""ordan"e with Se"tion 14 of its Charter2Se"1 141 Tax Exemptions1 JJ The >uthorit, shall 0e e/e.pt fro. realt, ta/es i.posed 0, the National # 44# 1)949(15# IJ6# 919# 919# 91(J=# 941# 94'# 94#!sd1# 48 and 991J>5# lo"ated at +arrio >pas and +arrio Oasa.0a*an# 3ahu*# Ce0u Cit,# in the total a.ount of !'#''9#)9191!etitioner o0He"ted to su"h de.and for pa,.ent as 0aseless and unHusti:ed# "lai.in* in its favor the afore"ited Se"tion 14 of R> 8959 whi"h e/e.pts it fro. pa,.ent of realt, ta/es1It was also asserted that it is an instru.entalit, of the*overn.ent perfor.in* *overn.ental fun"tions# "itin* Se"tion 1(( of the 3o"al No1 89(9# nonJsto"B and nonJpro:t hospitals and edu"ational institutions# are here0, withdrawn upon the eDe"tivit, of this Code1 4unders"orin* supplied5/ / /Se"tion '(41 Exemptions from ,eal Propert# Taxes1 S / / /4a5/ / // / /4e5/ / /E/"ept as provided herein# an, e/e.ption fro. pa,.ent of real propert, ta/ previousl, *ranted to# or presentl, enHo,ed0, all persons# whether natural or Huridi"al#in"ludin* *overn.entJowned or "ontrolled "orporations are here0, withdrawn upon the eDe"tivit, of this Code1>s the Cit, of Ce0u was a0out to issue a warrant of lev, a*ainst the properties of petitioner# the latter was "o.pelled to pa, its ta/ a""ount ?under protestA and thereafter :led a !etition for De"larator, Relief with the Re*ional Trial Court of Ce0u#+ran"h ')# on De"e.0er '9# 199416CI>>0asi"all, "ontended that the ta/in* powersof lo"al *overn.ent units do not e/tend to the lev, of ta/es or fees of an, Bind on an instru.entalit, of the national *overn.ent1 !etitioner insisted that while it is indeed a *overn.entJowned "orporation# it nonetheless stands on the sa.e footin* as an a*en", or instru.entalit, of the national *overn.ent0, the ver, nature of its powers and fun"tions1Respondent Cit,# however# asserted that 6CI>> is not an instru.entalit, of the *overn.ent 0ut .erel, a *overn.entJowned "orporation perfor.in* proprietar, fun"tions1>s su"h# all e/e.ptions previousl, *ranted to it were dee.ed withdrawn 0, operation of law# as providedunder Se"tions 19( and '(4 of the 3o"al "lose readin* of the New 3o"al 18) provides the e/press "an"ellation and withdrawal of e/e.ption of ta/es 0, *overn.entJowned and "ontrolled "orporation per Se"tions after the eDe"tivit, of said Code on &anuar, 1# 199'#to wit2 $pro"eeds to ;uote Se"tions 19( and '(4%!etitioners "lai.ed that its real properties assessed 0, respondent Cit, 8959 to pa, the sa.e 4"itin* Se"tion 14 of R> 895951Gowever# R> 18) e/pressl, provides that ?>ll *eneral and spe"ial laws# a"ts# "it, "harters# de"rees $si"%# e/e"utive orders# pro"la.ations and ad.inistrative re*ulations# or part of parts thereof whi"h are in"onsistent with an, of the provisions of this Code are here0, repealed or .odi:ed a""ordin*l,1A 4QfQ# Se"tion 5(4# R> 18)51Lith that repealin* "lause in R> 18)# it is safe to infer and state that the ta/ e/e.ption provided for in R> 8959 "reatin* petitioner had 0een e/pressl, repealed 0, the provisions of the New 3o"al s a *eneral rule# the power to ta/ isan in"ident of soverei*nt, and is unli.itedin its ran*e# a"Bnowled*in* in its ver,naturenoli.its# sothat se"urit,a*ainstits a0use is to 0e found onl, in theresponsi0ilit, of the le*islature whi"hi.poses the ta/ on the"onstituen", whoare to pa, it1 Nevertheless# eDe"tiveli.itations thereon .a, 0e i.posed 0, thepeoplethrou*htheir Constitutions1$1(% OurConstitution# for instan"e# provides thattheruleof ta/ationshall 0eunifor.ande;uita0le and Con*ress shall evolve apro*ressive s,ste. of ta/ation1$14%Sopotent indeedis the power that it wason"e opined that ?the power to ta/involves the power to destro,1A$15% Veril,#ta/ation is a destru"tive power whi"hinterfereswiththepersonal andpropert,ri*hts of the people and taBes fro. the. aportion of their propert, for the support ofthe *overn.ent1>""ordin*l,# ta/ statutes.ust 0e "onstrued stri"tl, a*ainst the*overn.ent andli0erall,infavor of theta/pa,er1$18% +ut sin"eta/es arewhat wepa, for "iviliEed so"iet,#$1% or are thelife0lood of the nation# the lawfrownsa*ainst e/e.ptions fro. ta/ation andstatutes *rantin* ta/ e/e.ptions are thus"onstrued strictissimi !uris a*ainst theta/pa,er and li0erall, in favor of the ta/in*authorit,1$19% > "lai. of e/e.ption fro. ta/pa,.ents .ust 0e "learl, shown and0ased on lan*ua*e in the law too plain to0e .istaBen1$19% Elsewise stated# ta/ation isthe rule# e/e.ption therefro. is thee/"eption1$')% Gowever# if the *rantee ofthe e/e.ption is a politi"al su0division orinstru.entalit,# the ri*id rule of"onstru"tiondoesnot appl,0e"ausethepra"ti"al eDe"t of the e/e.ption is .erel,to redu"e the a.ount of .one, that has to0e handled 0, the *overn.ent in the"ourse of its operations1$'1%The power to ta/ is pri.aril, vested inthe Con*ressK however# in our Hurisdi"tion#it .a, 0e e/er"ised 0, lo"al le*islative0odies# nolon*er .erel,0,virtueof avalid dele*ation as 0efore# 0ut pursuant todire"t authorit, "onferred 0, Se"tion 5#>rti"leNof theConstitution1$''% Fnder thelatter# thee/er"iseof thepower.a,0esu0He"ttosu"h*uidelines andli.itationsas the Con*ress .a, provide whi"h#however# .ust 0e "onsistent with the0asi" poli", of lo"al autono.,1There"an0eno;uestionthatunderSe"tion 14 of R1>1 No1 8959 the petitioneris e/e.pt fro. the pa,.ent of realt, ta/esi.posed0,theNational rea .a, lev, an annual ad valorem ta/ on real propert, su"h as land# 0uildin*# .a"hiner,#and other i.prove.ents not hereafter spe"i:"all, e/e.pted1Se"tion'(4of the3ll .a"hineries ande;uip.ent that are a"tuall,#dire"tl, and e/"lusivel, used 0,lo"al water distri"ts and*overn.entJowned or"ontrolled "orporationsen*a*ed in the suppl, anddistri0ution of water andQor*eneration and trans.ission ofele"tri" powerK4d5>ll realpropert, owned0, dul, re*istered "ooperativesasprovidedforunderR1>1No189(9K and4e56a"hiner, ande;uip.ent used for pollution"ontrol and environ.entalprote"tion1E/"ept as provided herein# an, e/e.ption fro. pa,.ent of real propert, ta/ previousl, *ranted to# or presentl, enHo,ed0,# all persons# whether natural or Huridi"al# in"ludin* all *overn.entJowned or "ontrolled "orporations are here0, withdrawn upon the eDe"tivit, of this Code1Thesee/e.ptions are0asedontheownership# "hara"ter# and use of thepropert,1Thus24a55wnershipExemptions1E/e.ptions fro.real propert, ta/es on the 0asisof ownership are real propertiesowned 0,2 4i5 the Repu0li"# 4ii5 aprovin"e# 4iii5 a "it,# 4iv5 a.uni"ipalit,# 4v5 a 0aran*a,#and 4vi5 re*istered"ooperatives1405CharacterExemptions1E/e.pted fro.real propert, ta/es on the 0asisof their "hara"ter are2 4i5"harita0le institutions# 4ii5housesandte.plesof pra,erliBe "hur"hes# parsona*es or"onvents appurtenant thereto#.os;ues# and 4iii5 nonJpro:t orreli*ious "e.eteries14"54sageexemptions1E/e.pted fro.real propert, ta/es on the 0asisof the a"tual# dire"t ande/"lusive use to whi"h the, aredevoted are2 4i5 all lands#0uildin*s and i.prove.entswhi"h are a"tuall, dire"tl, ande/"lusivel, used for reli*ious#"harita0le or edu"ationalpurposesK 4ii5 all .a"hineriesand e;uip.ent a"tuall,#dire"tl, and e/"lusivel, used 0,lo"al water distri"ts or 0,*overn.entJowned or"ontrolled "orporationsen*a*ed in the suppl, anddistri0ution of water andQor*eneration and trans.ission ofele"tri" powerK and 4iii5 all.a"hiner, and e;uip.ent usedfor pollution "ontrol andenviron.ental prote"tion1To help provide a health, environ.ent in the .idst of the .oderniEation of the "ountr,# all .a"hiner, and e;uip.ent for pollution "ontrol and environ.ental prote"tion .a, not 0e ta/ed 0, lo"al *overn.ents1'1 5ther Exemptions Withdrawn1>ll other e/e.ptions previousl, *ranted to natural or Huridi"al persons in"ludin* *overn.entJowned or "ontrolled "orporations are withdrawn upon the eDe"tivit, of the Code1$'8%Se"tion 19( of the 3s to ta/ e/e.ptions or in"entives*ranted to or presentl, enHo,ed 0, naturalor Huridi"al persons# in"ludin* *overn.entJowned and "ontrolled "orporations# Se"tion19( of the 3""ordin*l,# the position taBen 0, thepetitioner is untena0le1Relian"e on $ascovs. Philippine Amusement and /amingCorporation$(9% is unavailin* sin"e it wasde"ided 0efore the eDe"tivit, of the3M+EENERCISED+M TGE3OC>3 3ETIVE +ODIES1S Thepower to ta/ is pri.aril, vested in theCon*ressK however# in our Hurisdi"tion#it .a, 0e e/er"ised 0, lo"al le*islative0odies# no lon*er .erel, 0, virtue of avalid dele*ation as 0efore# 0utpursuant to dire"t authorit, "onferred0, Se"tion 5# >rti"le N of theConstitution1Fnder the latter# thee/er"ise of the power .a, 0e su0He"ttosu"h*uidelinesandli.itationsasthe Con*ress .a, provide whi"h#however# .ust 0e "onsistent with the0asi" poli", of lo"al autono.,1 The3rti"le N of the Constitution# providesfor thee/er"ise0,lo"al *overn.entunits of their power to ta/# the s"opethereof or its li.itations# and thee/e.ptions fro. ta/ation1Se"tion1(( of the 3ll other e/e.ptionspreviousl, *ranted to natural orHuridi"al persons in"ludin**overn.entJowned or "ontrolled"orporations are withdrawn uponeDe"tivit, of the Code151 ID1K RE!F+3IC O= TGE !GI3I!!INES >SDISTINTION>3d.inistrativeCode of 19915These ?autono.ousre*ions# provin"ial# "it,# .uni"ipal or0aran*a, su0divisionsA are thepoliti"al su0divisions14Se"tion 1#>rti"leN# 199Constitution15 Ontheother hand# ?National n ?a*en",A ofthe uthorit, was "reated 0, virtue of R1>1 8959# .andated to prin"ipall, undertaBe the e"ono.i"al# e-"ient# and eDe"tive "ontrol# .ana*e.ent# and supervision of the 6a"tan International >irport and 3ahu* >irport# and su"h other airports as .a, 0e esta0lished in Ce0u1Sin"e the ti.e of its "reation# petitioner 6CI>> enHo,ed the privile*e of e/e.ption fro. pa,.ent of realt, ta/es in a""ordan"e with Se"tion 14 of its "harter1 Gowever# on O"to0er 11# 1994# 6r1 Eusta;uio +1 Cesa# O-"er in Char*e# O-"eof the Treasurer of the Cit, of Ce0u# de.anded pa,.ent fro. realt, ta/es in the total a.ount of !'''9)9191 !etitioner o0He"ted to su"h de.and for pa,.ent as 0aseless and unHusti:ed "lai.in* in its favor the afore "ited Se"tion14 of R1>1 89591 It was also asserted that itis an instru.entalit, of the *overn.ent perfor.in* *overn.ental fun"tions# "itin* Se"tion 1(( of the 3o"al