TAX 2 Digests (Locgov)

8/3/2019 TAX 2 Digests (Locgov)

1/28

Taxation II Prof.MovidoA2010

GARCIA V EXECUTIVE SECRETARY

BASTIDA V CUSTOMS COLLECTOR35 SCRA 448

Castro; October 24, 1970

FACTS-Layug, a customs examiner discovered in the airportin the two Minifons (wire recorder) of Bastidaconsigned to a certain priest in Italy various checks,money orders, and traveler's checks all payable in USdollars amounting to a total of $13,780 and $3,149.50and several US dollar bills of different denominations inthe total amount of P630. The Customs authoritiesseized the two cardboard boxes and all the contentsthereof, alleging violation of Section 1363(f) and (m)sub-paragraphs 3 and 4, of the Revised AdministrativeCode, 1 as well as Central Bank Circular 20 asimplemented by Circular 42 2 (in relation to Section1363 [f] of the same Code) because although anExport Control Committee permit and Central Bankexport license covered the exportation of the Minifons,the various checks, money orders and dollar bills werenot covered by any Central Bank license. Central Bank,promulgated Circular 133 permitting any person to buyUS dollars at the prevailing market rate and export thesame without prior specific licensing from the CentralBank. Circular furthermore repealed all previouscirculars inconsistent therewith. Bastida contendedthat the bulk of the property seized consists of checkswhich are not subject to forfeiture because they arenot "merchandise" as contemplated by Sections 1363and 1419 of the Revised Administrative Code, and thateven assuming arguendo that the properties seized fallwithin the meaning of "merchandise" as defined by the

said Code, their forfeiture has become academic inview of the repeal of Central Bank Circulars 20 and 42by Circular 133.CTA affirmed.

ISSUESWhat is a Merchandise?

HELDThe Revised Administrative Code defines merchandisewhen used with reference to importations orexportations, includes goods, wares, and in generalanything that may be made the subject of importationor exportation. Checks, money orders and dollar bills

properly fall within the concept of "merchandise" asused in the Revised Administrative Code. US Dollarsare merchandise. Checks as bills of exchange, arenegotiable instruments and may be bought and soldlike a commodity. Money orders, also considered asbills of exchange of limited negotiability, possess thesame attributes as other negotiable instruments. Thus,they may be bought and sold like checks.

DispositionACCORDINGLY, the decision of the Court of TaxAppeals appealed from is affirmed, at petitioner's cost.

GARCIA V EXECUTIVE SECRETARY

TAADA V ANGARAPanganiban; 272 SCRA 18; May 2, 1997

NATUREPetition for certiorari, prohibition and mandamuspraying (1) for the nullification, on constitutionalgrounds, of the Phil. Senates concurrence in thePresidential ratification of the WTO Agreement and (2)for the prohibition of its implementation andenforcement

FACTS-Like many other developing countries, the Philippines

joined WTO as a founding member with the goal ofimproving Philippine access to foreign markets,especially its major trading partners, through thereduction of tariffs on its exports, particularlyagricultural and industrial products.

-Arguing mainly (1) that the WTO requires thePhilippines to place nationals and products of member-countries on the same footing as Filipinos and localproducts and (2) that the WTO intrudes, limits and/orimpairs the constitutional powers of both Congress andthe Supreme Court, the instant petition before thisCourt assails the WTO Agreement for violating themandate of the 1987 Constitution.1 Petitioners claim

1Article II, Sec. 19. The State shall develop a self-reliant and

independent national economy effectively controlled byFilipinos.Article XII, Sec. 10. xxx The Congress shall enact measuresthat will encourage the formation and operation of enterpriseswhose capital is wholly owned by Filipinos. In the grant of

that the WTO proviso derogates from the Legislaturespower to tax.[Note: While the Constitution allows Congress toauthorize the President to fix tariff rates, import andexport quotas, tonnage and wharfage dues, and otherduties or imposts, such authority is subject tospecified limits and . . . such limitations andrestrictions as Congress may provide (e.g., throughSec. 401 of the Tariff and Customs Code).]

ISSUEWON the provisions of the WTO Agreement undulylimit, restrict and impair Philippine sovereignty(legislative power)

HELD: NO-While sovereignty has traditionally been deemedabsolute and all-encompassing on the domestic level,it is however subject to restrictions and limitationsvoluntarily agreed to by the Philippines, expressly orimpliedly, as a member of the family of nations.Unquestionably, the Constitution did not envision ahermit-type isolation of the country from the rest ofthe world. By the doctrine of incorporation, the countryis bound by generally accepted principles ofinternational law, which are considered to beautomatically part of our own laws. One of the oldestand most fundamental rules in international law ispacta sunt servanda international agreements mustbe performed in good faith.-By their inherent nature, treaties really limit or restrictthe absoluteness of sovereignty. By their voluntary act,nations may surrender some aspects of their statepower in exchange for greater benefits granted by orderived from a convention or pact. The sovereignty ofa state therefore cannot in fact and in reality be

considered absolute. Certain restrictions enter into thepicture: (1) limitations imposed by the very nature ofmembership in the family of nations and (2) limitationsimposed by treaty stipulations.-The underlying consideration in this partial surrenderof sovereignty is the reciprocal commitment of theother contracting states in granting the same privilegeand immunities to the Philippines, its officials and its

rights, privileges, and concessions covering the nationaleconomy and patrimony, the State shall give preference toqualified Filipinos.Sec. 12. The State shall promote the preferential use of Filipinolabor, domestic materials and locally produced goods, andadopt measures that help make them competitive.

- 1 -


2/28


citizens. The same reciprocity characterizes thePhilippine commitments under WTO-GATT.Other Relevant Statements of the Court: The WTOAgreement grants developing countries a more lenienttreatment, giving their domestic industries someprotection from the rush of foreign competition.-With respect to tariffs in general, preferentialtreatment is given to developing countries in terms ofthe amount of tariff reduction and the period withinwhich the reduction is to be spread out. Specifically,GATT requires an average tariff reduction rate of 36%for developed countries to be effected within a periodof six (6) years while developing countries includingthe Philippines are required to effect an averagetariff reduction of only 24% within ten (10) years.-In respect to domestic subsidy, GATT requiresdeveloped countries to reduce domestic support toagricultural products by 20% over six (6) years, ascompared to only 13% for developing countries to beeffected within ten (10) years.-In regard to export subsidy for agricultural products,GATT requires developed countries to reduce theirbudgetary outlays for export subsidy by 36% andexport volumes receiving export subsidy by 21% withina period of six (6) years. For developing countries,however, the reduction rate is only two-thirds of thatprescribed for developed countries and a longer periodof ten (10) years within which to effect such reduction.-Moreover, GATT itself has provided built-in protectionfrom unfair foreign competition and trade practicesincluding anti-dumping measures, countervailingmeasures and safeguards against import surges.Where local businesses are jeopardized by unfairforeign competition, the Philippines can avail of thesemeasures.-There is hardly therefore any basis for the statement

that under the WTO, local industries and enterpriseswill all be wiped out and that Filipinos will be deprivedof control of the economy. Quite the contrary, theweaker situations of developing nations like thePhilippines have been taken into account; thus, therewould be no basis to say that in joining the WTO, therespondents have gravely abused their discretion.

True, they have made a bold decision to steer the shipof state into the yet uncharted sea of economicliberalization. But such decision cannot be set aside onthe ground of grave abuse of discretion, simplybecause we disagree with it or simply because webelieve only in other economic policies.

-The constitutional policy of a "self-reliant andindependent national economy" does not necessarilyrule out the entry of foreign investments, goods andservices. It contemplates neither "economic seclusion"nor "mendicancy in the international community." TheWTO reliance on "most favored nation," "nationaltreatment," and "trade without discrimination" cannotbe struck down as unconstitutional as in fact they arerules of equality and reciprocity that apply to all WTOmembers.Epilogue-It is true that broad constitutional principles requirethe State to develop an independent national economyeffectively controlled by Filipinos; and to protect and/orprefer Filipino labor, products, domestic materials andlocally produced goods. But it is equally true that suchprinciples while serving as judicial and legislativeguides are not in themselves sources of causes ofaction. Moreover, there are other equally fundamentalconstitutional principles relied upon by the Senatewhich mandate the pursuit of a "trade policy thatserves the general welfare and utilizes all forms andarrangements of exchange on the basis of equality andreciprocity" and the promotion of industries "which arecompetitive in both domestic and foreign markets,"thereby justifying its acceptance of said treaty. So too,the alleged impairment of sovereignty in the exerciseof legislative and judicial powers is balanced by theadoption of the generally accepted principles ofinternational law as part of the law of the land and theadherence of the Constitution to the policy ofcooperation and amity with all nations.DispositionPetition is dismissed for lack of merit.

UY CHACO SONS V COLLECTOR OFCUSTOMS

G.R. No. L-7618TRENT; March 27, 1913

NATUREAn appeal from a judgment of the CFI of Manilaconfirming a decision of the Collector of Customs tothe effect that white lead manufactured in a boundedwarehouse in the United States from pig lead importedfrom Spain without the payment of duty is not entitledto free entry into the Philippine Islands.

FACTS

- The white lead referred to was imported into thePhilippine Islands directly from the US in one bottomwithout transshipment en route; that same wasproduced in the United States from pig lead importedinto the United States from Spain, and that no dutywas paid upon said pig lead upon its importationinto US, notwithstanding the fact that the tariff law ofthe United States in force at the time of its importationimposed a tax thereon.- The same was put into a bonded warehouse upon itsarrival in the US, and was then subjected to what isknown as the "Dutch" of "Stack" process.- No duty was paid upon any of the foreign material(used in the Dutch of Stack process) imported into theUnited States, and which was used in the production ofthe white lead as imported into the Philippine Islands.- The duty prescribed by the US Tariff Law of 1909 wasnot applied to the pig lead in question because theimporters took advantage of the provisions of section23 (quoted post) of the said law. This section permitsof the importation of foreign materials for themanufacture of articles in the United States withoutthe payment of duty, provided the finished article isexported directly to foreign countries or to thePhilippine Islands.- The white lead was manufactured under theseconditions, and the pig lead entering into itscomposition thereby escaped the imposition of theduty prescribed for that article by paragraph 182 of theUnited States Tariff Law.

ISSUE(S)1. WON the manufactured article is to be admitted

into Philippine Islands free of duty under theabove facts.

HELDRatioReasoning

Section 5 of the United States Tariff Law:That in consideration of the exemption aforesaid,all articles, the growth, product, or manufacture ofthe United States, upon which no drawback ofcustoms duties has been allowed therein, shall beadmitted to the Philippine Islands from the UnitedStates free of duty.

Section 12 of Philippine Tariff Law:That all articles, except rice, the growth, product,or manufacture of the United States and itspossessions to which the customs tariff in

- 2 -


3/28


force in the United States is applied andupon which no drawback of custom dutieshad been allowed therein, going into thePhilippine Islands shall hereafter be admittedtherein free of customs duty when the same areshipped directly from the country of origin to thecountry of destination.

- Uy Chaco claims these provisions are harmoniouswith each other, while the Collector claims that Sec. 12of the Philippine Tariff law prevails over Sec. 5.- It is a well-recognized rule of construction that astatute repeals prior enactments in so far as the sameare inconsistent and irreconcilable with it. If by noconstruction can both provisions stand together, thelater Act must prevail as expressing the latest will ofthe Legislature.

US Tariff Law: August 5, 1909, at 5:05 PMeffective August 6, 1909.

Phil Tariff Law: August 5, 1909, 5:08 PM,effective after sixty days (subsequent both asthe time of passage and the time of taking

effect).- In this regard, Sec. 12 prevails over Sec. 5.- Uy Chaco claims that the to which clause qualifiesthe term possessions. Collector on the other handclaims that it limits the term articles.- This provision does not limit the term articlesbecause it must be considered that such constructionof the section imposes two conditions upon an articlewhich would enter the Philippine Islands free of duty:(1) It must be an article of American growth, product,or manufacture "to which the customs tariff in force inthe United States is applied;" and (2) "upon which nodrawback of customs duties has been allowed. Thetariff in force in the United States is not appliedto any article of purely domestic origin. As

American articles of purely domestic origin would failto comply with the first condition, it would beunnecessary to consider whether they could complywith the second.- Clearly, by the addition of the words "and itspossessions" it was desired to further extend theprivilege of free entry into Philippine Islands ofAmerican articles by including not only what might becalled the United States proper, but somethingadditional. So the words "and its possessions" wereadded to avoid any doubt that it was the intention ofCongress that not only articles from the mainlandshould be permitted to enter the Philippine Islands

free, but also articles from other territories within thejurisdiction of the United States.- Unrestricted, the phrase "the United States and itspossessions" would include the Philippine Islandsthemselves, as well as the Islands of Guam and

Tutuila, which were meant to be excluded. But if weallow the "to which" clause to modify "possessions" allambiguity immediately disappears.- Articles of American origin coming from the mainlandor from any territory under the jurisdiction of theUnited States, to which the tariff in force in the UnitedStates is applied, are to be admitted free, providedonly there is no drawback of customs duties.(The preamble of that Act provides that it shall apply tothe United States and all of its possessions except thePhilippine Islands and the Islands of Guam and

Tutuila.)- Again, it will be noted that the words "is applied" areused in the "to which" clause, while in the "uponwhich" clause the verb is "has been allowed." Now,while we are ready to concede that the United States

Tariff is applied to every article of American growth,product, or manufacture containing foreign material, inthe sense that the tariff was applied to the foreignmaterial contained in such article upon its importationinto the country, we cannot assent to the statementthat the tariff is applied to the finished article whichseeks entrance into the Philippine Islands.- The tariff spends its force when the foreignmaterial contained in the finished article entersthe country as raw material, and has nothingfurther to do with it. In point of time, the applicationof the tariff to the article occurs before a drawback ofduties, and there is therefore more reason to place theverb of the "to which" clause in the past than there isfor expressing the action of the "upon which" clause inthe past.

American articles wholly of domestic origin cannotpossibly labor under the disqualification of adrawback of United States customs duties, asnone are ever assessed.

American articles made wholly or in part of foreignmaterials which foreign materials enter the UnitedStates without the payment of duty by reason oftheir being on the free list may enter thePhilippines free of duty for the same reason.

American articles made wholly or in part of foreignmaterials, which foreign materials paid the regularduty upon entering the United States, may alsoenter the Philippines free, provided they can show

that no drawback of the duty collected has beenallowed.

- In this case, the shipment of white lead, which is thesubject of this controversy, although in one sense anarticle of American manufacture, is not comprehendedwithin any of these three classes.

DRAWBACK - a device resorted to for enabling acommodity affected by taxes to be exported andsold in the foreign markets upon the same termsas if it had not been taxed at all.

- Any materials used in the manufacture of such goods,and any packages, coverings, vessels, brands, andlabels used in putting up the same may, under theregulations of the Secretary of the Treasury, beconveyed without the payment of revenue tax or dutyinto any bonded manufacturing warehouse, andimported goods may, under the aforesaid regulations,be transferred without the exaction of duty from anybonded warehouse into any bonded manufacturing

warehouse; but this privilege shall not be held to applyto implements, machinery, or apparatus to be used inthe construction or repair of any bondedmanufacturing warehouse or for the prosecution of thebusiness carried on therein.- if we accede to the proposition that articles somanufactured are admitted free into the Philippinesunder section 12, is not only to afford these bondedmanufacturing warehousemen a better market in thePhilippine Islands than is allowed to foreignmanufacturers, but to give them a preference in thatmarket over those American industries whichmanufacture the same article of materials have paidduty. And this advantage over legitimatemanufacturers may be greater than might at first be

supposed.- It is clear that under the proposed exemption fromPhilippine customs duties of articles manufactured inbond, those American manufacturers who are notconducting their business under bond are placed at adistinct disadvantage in competing with their bondedbrothers in the Philippine market. If the manufacturedarticle (white lead in this case) produced under bond inthe United States is to be allowed free entry into thePhilippines, it is subject to no duty at all.- By section 5 of its own customs tariff, the UnitedStates remits the duty upon certain articles comingfrom the Philippine Islands. In the same section, and"in consideration" for the exemptions provided, it is set

- 3 -


4/28


forth that all articles of American growth, product, ormanufacture upon which no drawback of customsduties has been allowed in the United States shall beadmitted to the Philippines free of duty.- Upon examination of the registration placed upon thefree entry of American merchandise into the PhilippineIslands, i.e., that there shall be no drawback ofcustoms duties thereon, there appears the furtherindication of the view Congress took upon thisquestion.- A drawback of customs duty presupposes a collectionof customs duty, and a customs duty can only becollected upon imports.- Every article imported into the Philippines and fromwhich revenue is obtained for the support of ourGovernment could escape the payment of this revenueby simply being subjected to a manufacturing processunder bond in the United States. Not only would thispro tanto deprive the Philippine Government of itsrevenues make its revenue tariff a "vain and uselessthing," but in exact proportion to the magnitude ofsuch a movement it would deprive the United States ofa preferential market in the Philippines, which was the"consideration" for the exemption from duty cominginto the United States of certain Philippine products.

DISPOSITIONJudgment is affirmed.

COMMISSIONER V DELGADO184 SCRA 579

PADILLA,J.; April 26, 1990

NATUREPetition for Review from decision of the CTA

FACTS- The vessel SS Eurygenes arrived in the port of Manilaand discharged a shipment of 123 bales of assortedtextile remnants The gross weight of the shipment asdeclared in the Bill of Lading was 61,500 pounds. Butupon examination and appraisal by customsauthorities, it was found that the actual weight thereofwas 136,343 pounds.- Respondent CTA found the vessel, represented by itsagent, private respondent Delgado Shipping Agency, tohave violated Sec. 2523 of the Tariff and CustomsCode. But respondent Court of Tax Appeals in its said

decision reduced the fine originally imposed bypetitioner from P58,400.00 to only P18,000.00.

ISSUE/S1. WON CTA erred in reducing the fine

HELD1. YESRatio Section 2523 of the Tariff and Customs Codereads: If the gross weight of any article described inthe manifest exceeds by more than 20% the grossweight as declared in the manifest or bill of ladingthereof, and the Collector shall be of the opinion thatsuch discrepancy was due to the carelessness orincompetency of the master or pilot in command,owner or employee of the vessel or aircraft, a fine ofnot more than 15% of the value of the article may beimposed upon the importing vessel.Reasoning Respondent court itself found there wasinexcusable laxity on the part of the master or ownerof the vessel, resulting in the excessive discrepancy inthe declared weight of the cargo, and held that thefine imposed by petitioner was not really unjust,oppressive and confiscatory and not more than 15% ofthe value of the merchandise.Disposition The decision of respondent court ishereby MODIFIED by setting aside the reduction in finetherein ordered, and REINSTATING the administrativefine of P58,400.00 imposed in the petitioner's decision.

NOTE: A cargo manifest is a bill of lading; a list of thecargo and passengers being transported in a vessel.

RODRIGUEZ V CAInfra

COMMISSIONER V CTA188 SCRA 61

FELICIANO; July 30, 1990

FACTS- Fernando Everett", a vessel owned by privaterespondent Everett Steamship Corporation arrived inthe port of Manila, discharging assorted textileremnants. In its Bill of Lading, it declared that itsshipment was 17,500 lbs. Upon examination by customauthorities, the actual weight of the shipment wasfound to be 62,869 lbs.- The Chief of the Law Division of the Bureau of

Customs asked the respondent to explain thediscrepancy. The respondent said that it was theshipper was the one who provided the particulars ofthe subject shipment, including the weight thereof.- The Bureau of Customs was not satisfied with theexplanation and initiated an administrative proceedingagainst the respondent. The Collector of customsrendered a decision finding the "Fernando Everett" orits owner liable for a fine of P22,617.00 representingfifteen percent (15%) of the total value of theshipment, for violation of Section 2523 of the Tariff andCustoms Code. Section 2523 reads as follows:

Sec. 2523. Discrepancy betweenactual & declared weight ofmanifested article. ? If the grossweight of any article or packagedescribed in the manifest exceed bymore than twenty per centum thegross weight as declared in themanifest or bill of lading thereof, andthe Collector shall be of the opinionthat such discrepancy was due to thecarelessness or incompetency of themaster or pilot in command, owneror employee of the vessel or aircraft,a fine of not more than fifteen percentum of the value of the packageor article in respect to which thediscrepancy exists, may be imposedupon the importing vessel or aircraft.

- The Commissioner of Customs affirmed the decisionof the collector. Upon appeal by the respondent to theCTA, the CTA affirmed the decision but reduced thefine to P5000. The petitioner herein wants to reinstatethe fine imposed by the Commissioner.

ISSUE/S1. WON there is a duty on the part of the captain of avessel or of a shipowner to determine the true weightof cargo to be loaded on board the vessel2. WON the discrepancy in the instant case betweenthe actual and the declared weight of the shipmentinvolved was due to the carelessness or incompetencyof the captain of the vessel3. WON the reduction of the fine was proper

HELD1. YESRatio A vessel's master, owner or employees areindeed burdened with the duty "to check and verify the

- 4 -


5/28


correct weight of its cargoReasoning In Commissioner of Customs v. Court ofTax Appeals and Delgado Shipping Agencies, 1 thisCourt held that a duty of verifying the correct weight ofa cargo shipment is imposed by Section 2523 of the

Tariff and Customs Code itself:5. Finally, contrary to respondent'scontention, the vessel's master,owner or employee are duty boundunder the cited codal section underpain of the penalty of fine thereinprovided to check and verify thecorrect weight of the cargo orshipment so as to prevent amisdeclaration or underdeclaration ofweight. The vessel master'sdischarge of such obligation imposedby law to properly determine andverify the weight of cargos carried byit is certaintly pertinent to andimportant for the proper assessmentof the collectible custom duties andtaxes, and is not a burdensome taskin the present era of containerizedcargos

2. YESReasoning A difference of more than twenty percent(20%) between the actual gross weight of a shipmentand its declared gross weight is not a de minimismatter; on the contrary, it is sufficiently substantial soas reasonably to give rise to a presumption juristantum that some negligence or failure to exercisesome technical duty had occurred. The actual practiceof the Commissioner of Customs in cases of this kindmay be seen to be based upon such presumption;where a discrepancy of more than twenty percent(20%) of the stated weight is shown, the Collector ofCustoms requires, as noted earlier, the vessel, itscaptain or owner to show cause why an administrativefine should not be imposed upon the offending vesselunder Section 2523 of the Tariff and Customs Code.

The greater the discrepancy between declared grossweight and actual gross weight of a shipment, thestronger that presumption becomes until at some pointit is well-nigh conclusive. In the case of the "FernandoEverett", the discrepancy amounted to 259per centumof the declared gross weight. Given that level ofdiscrepancy, there must have been either grossnegligence amounting to bad faith, or obvious

incompetence, on the part of the captain of the vesselor the shipowner or its employees in failing to detectthe gross underdeclaration of the weight of theshipment.

3. No.ReasoningThe authority is lodged in the Collector ofCustoms and the Commissioner of Customs and noteither in the Court of Tax Appeals or this Court. Thepublic respondent Court of Tax Appeals was notwarranted in substituting its judgment for that of theCommissioner of Customs as to the amount of the fineproperly imposable in the circumstances of this case,unless, of course, a grave abuse of discretion. Therewas no showing of such abuse. The CTA merelyreduced the fine since it felt that the 15% fine was"harsh and unreasonable" stating that this was the firstoffense of the "Fernando Everett".

Disposition Petition is granted.

COMM V DELGADOsupra

REPUBLIC V PERALTA150 SCRA 37

Feliciano J; May 20, 1987

FACTS:-Quality Tobacco Corporation (Insolvent) filed forvoluntary insolvency. In the voluntary insolvencyproceedings commenced in May 1977 several claims ofcreditors were filed which included separation pays foremployee unions, inspection fees of the BOC andCustoms Duties and Taxes.-the trial court ruled that the separation pay claims ofthe NLRC were preferred over the claims of the BOCand BIR based on Art.110 of the Labor Code.-The BOC and BIR questioned such preference.

ISSUE: WON separation pay claims are preferred overduties and taxes in insolvency proceedings.

Held: YES-"duties, taxes and fees due [on specific movableproperty of the insolvent] to the State or anysubdivision thereof" (Article 2241 [1]) and "taxes dueupon the [insolvent's] land or building (2242 [1])"standfirst in preference in respect of the particular movable

or immovable property to which the tax liens haveattached. Article 2243 is quite explicit: "[T]axesmentioned in number 1, Article 2241 and number 1,

Article 2242 shall first be satisfied. " The claims listedin numbers 2 to 13 in Article 2241 and in numbers 2 to10 in Articles 2242, all come after taxes in order ofprecedence; such claims enjoy their privilegedcharacter as liens and may be paid only to the extentthat taxes have been paid from the proceeds of thespecific property involved (or from any other sources)and only in respect of the remaining balance of suchproceeds.BUT-the claim of the Bureau of Customs for unpaidcustoms duties and taxes enjoys the status of aspecially preferred credit under Article 2241, No. 1, ofthe Civil Code only in respect of the articlesimportation of which by the Insolvent resulted in theassessment of the unpaid taxes and duties, and whichare still in the custody or subject to the control of theBureau of Customs. The goods imported on oneoccasion are not subject to a lien for customs dutiesand taxes assessed upon other importations thoughalso effected by the Insolvent. Customs duties andtaxes which remain unsatisfied after levy upon theimported articles on which such duties and taxes aredue, would have to be paid out of the Insolvent's "freeproperty" in accordance with the order of preferenceembodied in Article 2244 of the Civil Code. Suchunsatisfied customs duties and taxes would fall withinArticle 2244, No. 9, of the Civil Code and hence wouldbe ninth in priority

RODRIGUEZ V CA248 SCRA 288

PUNO; September 18, 1995

FACTS- Petitioners Angel, Eulogio, Jose (all surnamedRodriguez) and Tomas Ngo, together with Manuel Pena(deceased) and Alfredo Fiesta (at large) were chargedwith a violation of Sec 3602 in relation to Sec 3601 ofthe Tariff and Customs Code.- Sep 9, 1983: the S/S Neptune Agate arrived at theManila International Port from HK carrying, amongothers, a 40-foot container van containing 29,000 kilosconsisting of 44,885,015 yards of 100% cotton-dyedfabric. The fabric had a home consumption value ofU.S. $93,809.68 and a dutiable value of P1,032,047.10

- 5 -


6/28


and was consigned to "Philippine Inter-Fashion, Inc.," adomestic corporation engaged in the manufacture ofgarments for export.- Meanwhile, Ernesto Ereno filed with the Bureau ofCustoms a Special Permit to Transfer seeking totransfer the said container van from the ManilaInternational Container Port to Customs BondedWarehouse No. 725 of the Philippine Inter-Fashion, Inc.at Bagong Bayan, Dasmarias, Cavite. The permitappeared to have been approved and signed by theproper Customs authorities on the basis of which saidcontainer was released. The container was loaded on atruck to be escorted by Customs guard (Fiesta) until itsreceipt at the Customs Bonded Warehouse at Cavite.Once outside the Customs zone, the truck didnt go toCavite but went to White Plains Subdivision in QC.- The truck entered the subdivision towards thedirection of Pena's residence. The vehicle wasmaneuvering when it hit the perimeter wall at theother end of the subdivision. Forthwith, Pena informedson-in-law, Eulogio Rodriguez, who lived in the samecompound, to remove the cargo from the stalledvehicle and transfer the same to their compound.Eulogio acceded to this request.- The following morning, Eulogio called his brothers,Angel and Jose, to help him transport the textile toParanaque. They were delivered some 80 rolls of thetextile to the residence of Tomas Ngo. They madeanother delivery in the afternoon.- The next day, Jose and Angel were on their way tomake a 3rd delivery when they were intercepted byagents of the Customs Intelligence and InvestigationDivision.- Earlier, Col. Guillermo Parayno, Jr., then Chief of theCustoms Intelligence and Investigation Division,noticed that the container van consigned to thePhilippine Inter-Fashion, Inc., was missing from thecontainer yard. On inquiry, the Pres of the saidcompany denied ordering any shipment from abroadand claimed that they were not expecting any suchcargo. Immediately, Col. Parayno formed teams totrace the movement of the container.- A team of agents was on its way to White Plainssubdivision when they spotted the delivery van. Theyordered the driver to stop. The agents foundpetitioners Angel and Jose Rodriguez, a driver and ahelper. They opened the van and found it full of textile.

The driver and helper disclosed that they came fromthe residence of Pena and that they were taking themto Paranaque.

- The team proceeded to Pena 's residence where Col.Parayno informed Pena that they were going to searchhis house for the textile. Pena denied possessing orkeeping any textile and invited Col. Parayno and hismen inside his house. The Customs agents lookedaround and found behind Pena's house a structure thatappeared to be a stock room. They opened the roomand found nothing. They noticed another room behind,opened it and found it full of the same textile as thosethey saw in the delivery van.- Pena informed them that the stock room belonged toEulogio who also owned the house behind it. Penalikewise claimed that the textile belonged to a certain"Rolly" whose truck hit the subdivision wall near hishouse and that the textile was being stored in hiscompound until delivery to Paranaque.- The next day, Customs agents, armed with searchwarrant, went to Ngo's residence in Paranaque. Theydiscovered in his bodega several rolls of the sametextile they found in the delivery van and in Pena'scompound. The agents seized all the textile they foundin the delivery van, in Pena's compound and in Ngo'sresidence. They conducted an investigation anddiscovered that the container van did not belong to theconsignee and that it was released from the containerport by virtue of a Special Permit to Transfer in whichall signatures of the approving Customs personnel,except for one, were forged.- Rodriguez brothers claim that the textile belonged toone "Rolly" who asked Pena for help to transport itafter his truck met an accident near Pena's residence.Eulogio claimed that Pena in turn asked him to transferthe textile from the stalled truck and keep them safe inhis servants' quarters. Rolly returned the followingmorning and again requested him, through Pena, totransport the textile to Paranaque for a considerationof P4k. Eulogio agreed. He however was not feelingvery well, so he called up Jose and requested him todeliver the cargo to Paranaque. Angel happened to bein Jose's house and so they proceeded to White Plainsand with some of their helpers loaded textile into oneof Pena's vans. They followed Rolly, who was in his car,to the residence of Ngo in Paranaque. Ngo met themand the cargo was unloaded in his house. The brotherand their helpers returned to White Plains without Rollyand made another delivery in the afternoon. They wereon their way to make a 3rd delivery the following daywhen they were intercepted by the Customs agents.- Ngo, for his defense, claimed that he merelypurchased the textile from Rolly who offered 30,000

yards to him in Divisoria. Rolly allegedly assured himthat he got the textile from an auction sale at theBureau of Customs and that all customs duties andtaxes thereon had already been paid.- TC found them guilty. CA affirmed. MFR denied.

ISSUES1. WON the CA erred in convicting petitioners ofsmuggling.

HELD1. NO.Ratio While it is true that the evidence does not showtheir participation in the release of the smuggledcargo, petitioners were actually found to have been inpossession of the textile after its release. Petitionershave never disputed but in fact admitted theirpossession of the textile and as a result of thisadmission, they are presumed to have been engagedin smuggling pursuant to the last paragraph of Section3601 of the Code. The burden of proof shifted to them.

To rebut this presumption, it is not enough forpetitioners to claim good faith and lack of knowledgeof the unlawful source of textile. Petitioners shouldhave presented evidence to support their claim.Reasoning Petitioners ascribe all their acts to Penawho has long since died and to Rolly who has sincedisappeared, if he ever existed. Their testimony ishearsay and self-serving.On the contrary, the evidence shows that the truckcarrying the textile left the container port for Pena'sresidence. The truck was allowed to enter the privatesubdivision because Pena was a registered homeownerand he sought permission for it to go to his house.Clearly, the container was actually intended fordelivery at Pena's compound.It is difficult to comprehend why the Rodriguezbrothers went out of their way to help Rolly whom theynever knew when Pena provided the delivery van andRolly himself had some helpers to load and unload thecargo. The brothers were businessmen. Eulogio andAngel were engaged in general merchandise and hadtheir own stores at the Zaragosa Shopping Center in

Tondo, Manila.Eulogio said that Pena gave him the job because hewanted him to earn extra money. This claim he madeincredible by the fact that the brothers were totransport the textile for a fee of P4,000.00. If theyneeded the extra money, they never bothered to askfor it or any portion thereof from Rolly or Pena. Rolly

- 6 -


7/28


did not return to White Plains after the first deliverybut Jose and Angel continued to work and evenintended to finish the job without exerting any effort toensure payment therefor.Ngo's claim likewise cannot be given credence. Hetestified that he asked Rolly if the taxes on the textilehad been paid, and that Rolly answered in theaffirmative and in fact assured him that he wouldpresent the tax receipts later. After the first delivery,Rolly said that he needed the receipts to show theauthorities during the delivery. And yet Ngo, who wasengaged in the buy and sell business of plasticmaterials and textile, never bothered to check orglance at these tax receipts. Rolly disappeared withoutleaving any receipts with Jose and Angel and neitherdid the brothers ask for said receipts.Indeed, petitioners' claim of good faith and lack ofknowledge of the origin of the textile cannot stand inthe light of contrary evidence. As the lower courts wellfound, petitioners have miserably failed to rebut thepresumption that they were engaged in smuggling atthe time they were apprehended.DispositionIN VIEW WHEREOF, the petition is DENIEDand the Decision dated February 28, 1990 and theResolution dated November 9, 1993 of the Court ofAppeals in CA-G.R. CR No. 06220 are hereby affirmed.Costs against petitioners.

COMM V CAMPOS RUEDA188 SCRA 613

Medialdea; August 20, 1990

FACTS:-Campos Rueda Corporation imported 46 cartons(consisting of 27,000 pieces) of Tungsol flashers.Before the goods arrived at the port of Manila, Campos

Rueda filed with the Collector of Customs of Manila arequest for value information for the declaration of theimported flashers under Tariff Heading No. 85.09 ofthe Tariff and Customs Code at 30% ad valorem duty,for classification purpose. The Customs appraiserhowever, re-classified the goods under Tariff HeadingNo. 85.19 of the Tariff and Customs Code at 50% advalorem.-Campos Rueda paid duties and taxes in protest. Therefund of which was granted by the CTA-Commissioner of Customs appealed decision

ISSUE: WON the classification of the imported Tungsolflashers should fall under Tariff Heading No. 85.09 at

30% ad valorem or under Tariff Heading No. 8-5.19 at50% ad valorem, both under the Tariff and CustomsCode. (Simply WON refund was correct)

HELD: YES-Tariff Heading No. 85.09 of the Tariff and CustomsCode provides:85.09. Electrical lighting and signalling equipment andelectrical windscreen wipers, defrosters and demisters,for cycles or motor vehicles ad val. 30%.On the other hand, the same Code provides under

Tariff Heading No. 85.19:85.19. Electrical apparatus for making and breakingelectrical circuits, for the protection of electricalcircuits, or for making connections to or in electriccircuits (for example, switches, relays, fuses, lightingarresters, surge suppressors, plugs, lamp-holders and

junction boxes); resistors, fixed or variable (includingpotentiometers), other than heating resistors, printedcircuits, switch boards (other than telephoneswitchboards) and control panels-Petitioner contends that the imported flashers shouldbe classified under Tariff Heading No. 85.19. Thedocuments covering the importation of the goods showthat they are "electrical lighting and signalling parts."Hence, being parts only of a whole signallingequipment, the flashers by themselves cannot functionas a signalling equipment. The imported article can beconsidered merely as electrical apparatus for makingand breaking electrical circuits falling under TariffHeading No. 85.19 of the Tariff and Customs Code.-Private respondent Campos Rueda Corporation, on theother hand, contends that the imported flashers shouldbe classified under Tariff Heading No.85.09 contendingthat the subject importations are electrical apparatusused on motor vehicles for signalling purposes, that is,to signal right or left hand turn by means of electricalflashers in front and at the rear of motor vehicles.-SC: Parts of machines, apparatus of appliances whichare suitable for use solely or principally with aparticular kind of machine or with a number ofmachines falling within a specific heading, as a rule,are to be classified with the machines in the sameheading There being a clear showing that the subjectimported flashers are to he used solely and principallyto signal or indicate a right or left hand turn in frontand at the rear of motor vehicles, they should beclassified under Tariff Heading No. 85.09 as electricallighting and signalling equipment.

-In the case ofLa Compaa General de Tobacos deFilipinas v. United States, 8 Phil. 438, it was ruled that:

The general purpose for which an article is used mustgovern the assessment of duty; any other rule wouldlead to confusion and injustice. It is the general use towhich articles are chiefly adopted and for which theyare chiefly used that determine their character withinthe meaning of the Tariff laws. It is the predominatinguse to which articles are generally applied or used thatdetermines their character for the purpose of fixing theduty, and not the specific or special use which anyparticular importer may make of the articles imported(Hartranft v. Langfeld, 125 U.S., 128).

COCONUT OIL REFINERS ASSOCIATIONV TORRES

G.R. No. 132527AZCUNA; July 29, 2005

FACTS- On March 13, 1992, RA 7227 was enacted, providingfor, among other things, the sound and balancedconversion of the Clark and Subic military reservationsand their extensions into alternative productive uses inthe form of special economic zones.- Sec12 of RA 7227 provides: [a] that the Subic SpecialEconomic Zone (SSEZ) shall be developed into a self-sustaining, industrial, commercial, financial andinvestment center, [b] that SSEZ shall be operated andmanaged as a separate customs territory ensuring freeflow or movement of goods and capital w/in, into andexported out of SSEZ, as well as provide incentivessuch as tax and duty-free importations of rawmaterials, capital and equipment. But, exportation orremoval of goods from SSEZ to other parts of Phils.shall be subject to customs duties and taxes under the

TCCP and other relevant tax laws of the Phils.- Sec 15 (On Clark and other economic zones)authorizes the Pres. to create by executiveproclamation a Special Economic Zone covering thelands occupied by the Clark military reservations andits contiguous extensions.- On April 3, 1993, Pres. Ramos issued EO 80, whichdeclared, among others, that Clark shall have all theapplicable incentives granted to SSEZ under RA 7227.Pursuant to EO 80, the BCDA passed Board ResolutionNo. 93-05-034, allowing the tax and duty-free sale atretail of consumer goods imported via Clark forconsumption outside the CSEZ

- 7 -


8/28


- President then issued EO 97, Clarifying the Tax andDuty Free Incentive Within the SSEZ Pursuant to RA.7227. In part it says that: [a] Tax and duty-freeimportations shall apply only to raw materials, capitalgoods and equipment [b]The exportation or removalof tax and duty-free goods from SSEZ to other parts ofPhils shall be subject to duties and taxes underrelevant Phil laws.- EO 97-A was also issued. Sec.1 says: The ff.guidelines shall govern the tax and duty-free privilegew/in the Secured Area of SSEZ:1.1 The Secured Area shall be the onlycompletely tax and duty-free area in the SSEFPZ.Business enterprises and individuals (Filipinos andforeigners) residing w/in the Secured Area are free toimport raw materials, capital goods, equipment, andconsumer items tax and duty-free. Consumptionitems, however, must be consumed within the SecuredArea. Removal of raw materials, capital goods,equipment and consumer items out of the SecuredArea for sale to non-SSEFPZ registered enterprisesshall be subject to the usual taxes and duties....

1.2. Residents of the SSEFPZ living outside theSecured Area can purchase and bring out of theSecured Area to other parts of the Philippine territoryconsumer items worth not exceeding US$100 permonth per person. Only residents age 15 and over areentitled to this privilege.1.3. Filipinos not residing within the SSEFPZ canpurchase and bring out of the Secured Area to otherparts of Phils consumer items worth not exceedingUS$200 per year per person. Only Filipinos age 15 andover are entitled to this privilege.- Petitioners filed the petition against Exec. Sec. Torres,the Bases Conversion Development Authority (BCDA),the Clark Development Corporation (CDC) and theSubic Bay Metropolitan Authority (SBMA), fromcontinuing with, the operation of tax and duty-freeshops located at the SSEZ and CSEZ, and to declarethe following issuances as unconstitutional, illegal, andvoid: EO 80, Sec5; EO 97-A, and the Board Resolutionof BCDA, Sec. 4.

ISSUES1 WON RA 7227 allowed only tax and duty-freeimportation of raw materials, capital and equipment,thus EO 97-A constitutes executive legislation2 WON Sec.5 EO 80, and Sec. 4 of BCDA BoardResolution No. 93-05-034 constitute executive

legislation in providing for tax and duty free privileges,contrary to RA 7227.3 WON the questioned issuances constitute executivelegislation for allowing the removal of consumer goodsand items from the zones w/o payment duties andtaxes in violation of RA 7227 as Sec 12 provides for thetaxation of goods that are exported or removed fromthe SSEZ to other parts of the Phils.

HELD1 NO.- While it is true that Sec 12 (b) of RA 7227 mentionsonly raw materials, capital and equipment, this doesnot necessarily mean that the tax and duty-free buyingprivilege is limited to these types of articles to theexclusion of consumer goods. In construing statutes,the true intent of the Legislature must be considered.- There appears to be no logic in following the narrowinterpretation petitioners urge. To limit the tax-freeimportation privilege of enterprises located inside thespecial economic zone only to raw materials, capitaland equipment clearly runs counter to the intention ofthe Legislature to create a free port where the freeflow of goods or capital within, into, and out of thezones is insured.- The phrase tax and duty-free importations of rawmaterials, capital and equipment was merely cited asan example of incentives that may be given to entitiesoperating within the zone. The Senate proceedingsclearly negate the narrow interpretation of petitioners.- HOWEVER, the second sentences of paragraphs1.2 and 1.3 of EO 97-A, allowing tax and duty-freeremoval of goods to certain individuals, even in alimited amount, from the Secured Area of the SSEZ,are null and void for being contrary to Sec. 12 ofRA 7227 which clearly provides that exportation orremoval of goods from the territory of SSEZ to otherparts of the Philippine territory shall be subject tocustoms duties and taxes under the Customs and TariffCode and other relevant tax laws of the Phils.

2 YES.- While Sec. 12 of RA7227 expressly provides for thegrant of incentives to the SSEZ, it fails to make anysimilar grant in favor of other economic zones,including the CSEZ. Tax and duty-free incentivesbeing in the nature of tax exemptions, the basisthereof should be categorically and unmistakablyexpressed from the language of the statute.Consequently, in the absence of any express grant of

tax and duty-free privileges to the CSEZ in RA 7227,there would be no legal basis to uphold the questionedportions of two issuances: Sec 5 of EO 80 and Sec 4of BCDA Board Resolution No. 93-05-034, which bothpertain to the CSEZ. In a similar case John Hay v Lim,SC sustained the argument and ruled that theincentives under RA 7227 are exclusive only to theSSEZ. The President, therefore, had no authority toextend their application to John Hay.

3. MOOT and ACADEMIC. The removal of goods fromSSEZ w/out payment of customs duties and taxes isnot authorized by RA 7227- On Sept. 26, 1997, EO 444 was issued, curtailing theduty-free shopping privileges in the SSEZ and the CSEZto prevent abuse of duty-free privilege and to protectlocal industries from unfair competition. A perusalprovisions of EO 444 indicates that effective January 1,1999, the grant of duty-free shopping privileges todomestic tourists and to residents living adjacent toSSEZ and the CSEZ had been revoked.- Oct. 20, 2000, EO 303 was issued, amending EO 444.Sec 2 of EO 303 declared that all special shoppingprivileges as granted under Section 3 of EO 444 arehereby deemed terminated. The grant of duty freeshopping privileges shall be restricted to qualifiedindividuals as provided by law. At that point, theshopping privileges currently being enjoyed by OFWs,Balikbayans, and tourists traveling to and from foreigndestinations, draw authority not from the issuancesbeing assailed herein, but from EO 46 and RA 6768,both enacted prior to promulgation of RA 7227.- Thus, it appears that petitioners objection to theallowance of tax-free removal of goods from thespecial economic zones as previously authorized bythe questioned issuances has become moot andacademic.In any event, Sec 12 (b) of RA. 7227, clearly providesthat exportation or removal of goods from SSEZterritory to other parts of the Phil. territory shall besubject to customs duties and taxes under theCustoms and Tariff Code and other relevant tax laws ofthe Philippines. Thus, the removal of goods from theSSEZ to other parts of the Philippine territory withoutpayment of said customs duties and taxes is notauthorized by RA 7227.

Re Other Issues: [a] No violation of equal protectionclause: It satisfies the requisites for reasonableclassification. [b] No unfair competition: The mere fact

- 8 -


9/28


10/28


as important a dimension of "the national economy,general welfare and national security" as theprotection of local industries. And so customs dutiesmay be reduced or even removed precisely for thepurpose of protecting consumers from the high pricesand shoddy quality and inefficient service that tariff-protected and subsidized local manufacturers may

otherwise impose upon the community.- It seems also important to note that tariff rates arecommonly established and the corresponding customsduties levied and collected upon articles and goodswhich are not found at all and not produced in thePhilippines. In such cases, customs duties may be seento be imposed either for revenue purposes purely orperhaps, in certain cases, to discourage anyimportation of the items involved. In either case, it isclear that customs duties are levied and imposedentirely apart from whether or not there are anycompeting local industries to protect.Disposition Petition DISMISSED

PART I - LOCAL TAXATION

MERALCO V. CBAAMERALCO SECURITIES INDUSTRIAL

CORP. v CBAA114 SCRA 261

AQUINO; May 31, 1982

NATURESpecial Civil Action for certiorari

FACTS- Pursuant to a pipeline concession issued under the

Petroleum Act of 1949 (RA 387), Meralco Securitiesinstalled from Batangas to Manila a pipeline systemconsisting of cylindrical steel pipes joined together andburied not less than 1 meter below the surface alongthe shoulder of the public highway.- The pipes are embedded in the soil and are firmlyand solidly welded together. The valves are welded tothe pipes so as to make the pipeline system one singlepiece of property from end to end. In order to repair,replace, remove or transfer segments of the pipeline,the pipes have to be cold-cut by means of a rotaryhard-metal pipe-cutter after digging or excavatingthem out of the ground where they are buried. Inpoints where the pipeline traversed rivers or creeks,

the pipes were laid beneath the bed thereof. Hence,the pipes are permanently attached to the land.- However, segments of the pipeline can be movedfrom one place to another as shown in the permitissued by the Secretary of Public Works andCommunications which provides that the governmentreserves the right to require the removal or transfer of

the pipes by and at the concessionaire's expenseshould they be affected by any road repair orimprovement.- Pursuant to the Assessment Law, the provincialassessor of Laguna treated the pipeline as realproperty.- Meralco Securities appealed the assessments to theBoard of Assessment Appeals of Laguna which upheldthe assessments.- Meralco Securities brought the case to the CentralBoard of Assessment Appeals, which ruled that thepipeline is subject to realty tax.

ISSUESWON the pipeline is subject to real property tax

HELDYES.- Sec 2 of the Assessment Law: realty tax is due "onreal property, including land, buildings, machinery, andother improvements" not specifically exempted insection 3 thereof.- Sec 38 Real Property Tax Code: Incidence of RealProperty Tax. There shall be levied, assessed andcollected in all provinces, cities and municipalities anannual ad valorem taxon real property, such as land,buildings, machinery and other improvements affixedor attached to real property not hereinafter specificallyexempted.- The pipeline of Meralco Securities does not fall withinany of the classes of exempt real property enumeratedin Sec 3 of the Assessment Law and Sec 40 of the RealProperty Tax Code.- Pipeline means a line of pipe connected to pumps,valves and control devices for conveying liquids, gasesor finely divided solids. It is a line of pipe running uponor in the earth, carrying with it the right to the use ofthe soil in which it is placed.- Article 415[l] and [3] CC provides that real propertymay consist of constructions of all kinds adhered tothe soil and everything attached to an immovable in afixed manner, in such a way that it cannot be

separated therefrom without breaking the material ordeterioration of the object.- The pipeline system is indubitably a constructionadhering to the soil. It is attached to the land in such away that it cannot be separated therefrom withoutdismantling the steel pipes which were welded to formthe pipeline.

- Insofar as the pipeline uses valves, pumps andcontrol devices to maintain the flow of oil, it is in asense machinery within the meaning of the RealProperty Tax Code.- Note that what are being characterized as realproperty are not the steel pipes but the pipelinesystem as a whole.- A pipeline for conveying petroleum has beenregarded as real property for tax purposes.- Meralco Securities contends that the Petroleum Lawexempts it from the payment of realty taxes, aspredicated on Art 102 of that law exempting MeralcoSecurities from local taxes and making it liable fortaxes of general application. Meralco Securities arguesthat the realty tax is a local tax or levy and not a tax ofgeneral application.- Realty tax has always been imposed by thelawmaking body and later by the President of thePhilippines in the exercise of his lawmaking powers, asshown in section 342 et seq. of the Revised AdminCode, Act No. 3995, Commonwealth Act No. 470 andPD 464.- The realty tax is enforced throughout the Philippinesand not merely in a particular municipality or city butthe proceeds of the tax accrue to the province, city,municipality and barrio where the realty taxed issituated (Sec. 86, PD 464). In contrast, a local tax isimposed by the municipal or city council by virtue ofthe Local Tax Code, PD 231.Dispositive Petition dismissed; questioned decisionand resolution affirmed.

CALTEX V. CBAA AND CITY ASSESSOROF PASAY

114 SCRA 196May 31, 1982

FACTS- Caltex was assessed realty tax on machinery &equipment installed in its gas stations on leased lands.(underground tanks, elevanted tanks, elevated watertanks, water tanks, gasoline pumps, etc.)

- 10 -


11/28


- Those are loaned by Caltex to gas station operatorsunder lease agreement. The operators must returnthem. The lessor of the land doesnt become theowner of the machines & equipment.- City Assessor of Pasay said those are taxable realty.City Board of Tax Appeals said theyre personalty.- Assessor appealed to Central Board of Assessment

Appeals.- Central Board of Assessment Appeals said theyrereal prop.- Caltex filed this certiorari petition.

ISSUEWON the equipment / machineries are real or personalproperty

HELDREAL PROP- bec as appurtenances to the gas station, theyrenecessary to the operation of the gas station.- bec improvements on land are commonly taxed asrealty even though for some purposes they might beconsidered personalty. Standard Oil v. Jaramillo

FELS ENERGY, INC v. THE PROVINCE OFBATANGAS and

THE OFFICE OF THE PROVINCIALASSESSOR OF BATANGAS

G.R. No. 168557and

NPC v. LOCAL BOARD OF ASSESSMENTAPPEALS OF BATANGAS, LAURO C.

ANDAYA, in his capacity as theAssessor of the Province of Batangas,

and the PROVINCE OF BATANGASrepresented by its Provincial Assessor

G.R. No. 170628Callejo, Sr. / February 16, 2007

Nature: CertiorariFacts:-These are consolidated cases assailing CA decisionsthat were dismissed on the ground of prescription.-In 1993, NPC entered into a lease contract with PolarEnergy, Inc. over 3x30 MW diesel engine power bargesmoored at Balayan Bay in Calaca, Batangas. The

Energy Conversion Agreement was for a period of 5years. Article 10 of which reads:

10.1 RESPONSIBILITY. NAPOCOR shall beresponsible for the payment of (a) all taxes, importduties, fees, charges and other levies imposed by theNational Government of the Republic of the Philippinesor any agency or instrumentality thereof to which

POLAR may be or become subject to or in relation tothe performance of their obligations under thisagreement (other than (i) taxes imposed or calculatedon the basis of the net income of POLAR and PersonalIncome Taxes of its employees and (ii) construction

permit fees, environmental permit fees and othersimilar fees and charges) and (b) all real estate taxesand assessments, rates and other charges in respectof the Power Barges.-Subsequently, Polar Energy, Inc. assigned its rightsunder the agreement to FELS. The NPC initiallyopposed the assignment of rights.-In 1995, FELS received an assessment of real propertytaxes on the power barges from Provincial AssessorAndaya of Batangas City. The assessed tax, whichlikewise covered those due for 1994, amounted toP56,184,088.40 per annum. FELS referred the matterto NPC, reminding it of its obligation under theAgreement to pay all real estate taxes. It then gaveNPC the full power and authority to represent it in anyconference regarding the real property assessment ofthe Provincial Assessor.-NPC sought reconsideration of Andayas decision toassess real property taxes on the power barges.However, the motion was denied on and the ProvincialAssessor advised NPC to pay the assessment. Thisprompted NPC to file a petition with the Local Board ofAssessment Appeals (LBAA) for the setting aside of theassessment and the declaration of the barges as non-taxable items; it also prayed that should LBAA find thebarges to be taxable, the Provincial Assessor bedirected to make the necessary corrections.-In its Answer to the petition, the Provincial Assessoraverred that the barges were real property forpurposes of taxation under Sec. 199(c) of RA No. 7160.-Before the case was decided by the LBAA, NPC filed aManifestation, informing the LBAA that the Departmentof Finance (DOF) had rendered an opinion where it isclearly stated that power barges are not real propertysubject to real property assessment.-the LBAA rendered a Resolution denying the petitionand ordered FELS to pay the real estate tax. The LBAAruled that the power plant facilities, while they may be

classified as movable or personal property, arenevertheless considered real property for taxationpurposes because they are installed at a specificlocation with a character of permanency. The LBAAalso pointed out that the owner of the barges, FELS, aprivate corporation is the one being taxed, not NPC. Amere agreement making NPC responsible for the

payment of all real estate taxes and assessments willnot justify the exemption of FELS; such a privilege canonly be granted to NPC and cannot be extended toFELS. Finally, the LBAA also ruled that the petition wasfiled out of time.-Aggrieved, FELS appealed the LBAAs ruling to theCentral Board of Assessment Appeals (CBAA).-In1996, the Provincial Treasurer of Batangas Cityissued a Notice of Levy and Warrant by Distraint overthe power barges, seeking to collect real propertytaxes amounting to P232,602,125.91. FELS then filed aMotion to Lift Levy, praying that the ProvincialAssessor be further restrained by the CBAA fromenforcing the disputed assessment during thependency of the appeal which was granted by CBAA.-Meantime, the NPC filed a Motion for Intervention inthe proceedings before the CBAA w/c was approved bythe CBAA.-During the pendency of the case, both FELS and NPCfiled several motions to admit bond to guarantee thepayment of real property taxes assessed by theProvincial Assessor (in the event that the judgment beunfavorable to them). The bonds were duly approvedby the CBAA.-the CBAA found the power barges exempt from realproperty tax and that the power barges belong to NPC;since they are actually, directly and exclusively usedby it, the power barges are covered by the exemptionsunder Sec 234(c) of R.A. No. 7160. As to the other

jurisdictional issue, the CBAA ruled that prescriptiondid not preclude the NPC from pursuing its claim fortax exemption in accordance with Sec 206 of R.A. No.7160.-The Provincial Assessor filed a MFR. CBAA reversed itsearlier decision affirming that of the LBAAs. FELS andNPC filed separate MFRs, which were timely opposedby the Provincial Assessor. The CBAA denied the saidmotions. Both appealed to the CA.- CA held that the right to question the assessment ofthe Provincial Assessor had already prescribed uponthe failure of FELS to appeal the disputed assessmentto the LBAA within the period prescribed by law. SinceFELS had lost the right to question the assessment, the

- 11 -


12/28


right of the Provincial Government to collect the taxwas already absolute. (NPC and FELS filed severalother MFRs but those were denied as well.)

Issues:1. WON the appeal before the LBAA was time-

barred

2. WON the power barges are real property thussubject to real property taxes

HELD:1.Yes.- FELS argued that when NPC moved to have theassessment reconsidered, the running of the period tofile an appeal with the LBAA was tolled. NPC posits thatthe 60-day period for appealing to the LBAA should bereckoned from its receipt of the denial of its motion forreconsideration.- SC citing Callanta case: The last action of the localassessor on a particular assessment shall be the noticeof assessment; it is this last action which gives theowner of the property the right to appeal to the LBAA.

The procedure likewise does not permit the property

owner the remedy of filing a MFR before the localassessor.-Sec 226 of LGC provides:SECTION 226. Local Board of Assessment Appeals. Anyowner or person having legal interest in the propertywho is not satisfied with the action of the provincial,city or municipal assessor in the assessment of hisproperty may, within sixty (60) days from the date ofreceipt of the written notice of assessment, appeal tothe Board of Assessment Appeals of the province orcity by filing a petition under oath in the formprescribed for the purpose, together with copies of thetax declarations and such affidavits or documentssubmitted in support of the appeal.-The notice of assessment which the ProvincialAssessor sent to FELS on August 7, 1995, containedthe following statement:If you are not satisfied with this assessment, you may,within sixty (60) days from the date of receipt hereof,appeal to the Board of Assessment Appeals of the

province by filing a petition under oath on the formprescribed for the purpose, together with copies ofARP/Tax Declaration and such affidavits or documentssubmitted in support of the appeal.-Instead of appealing to the Board of AssessmentAppeals (as stated in the notice), NPC opted to file a

motion for reconsideration of the Provincial Assessorsdecision, a remedy not sanctioned by law.-The remedy of appeal to the LBAA is available from anadverse ruling or action of the provincial, city ormunicipal assessor in the assessment of the property.It follows then that the determination made by therespondent Provincial Assessor with regard to the

taxability of the subject real properties falls within itspower to assess properties for taxation purposessubject to appeal before the LBAA.

-SC quoting CA decision: (citing Meralco v. Barlis) If thetaxpayer fails to appeal in due course, the right of thelocal government to collect the taxes due with respectto the taxpayers property becomes absolute upon theexpiration of the period to appeal.It also bearsstressing that the taxpayers failure to question theassessment in the LBAA renders the assessment of thelocal assessor final, executory and demandable, thus,precluding the taxpayer from questioning thecorrectness of the assessment, or from invoking anydefense that would reopen the question of its liability

on the merits.- Elementary is the rule that the perfection of anappeal within the period therefore is both mandatoryand jurisdictional, and failure in this regard renders thedecision final and executory.

2. YES. As found by the appellate court, the CBAA andLBAA power barges are real property and are thussubject to real property tax. Tax assessments by taxexaminers are presumed correct and made in goodfaith, with the taxpayer having the burden of provingotherwise. Besides, factual findings of administrativebodies, which have acquired expertise in their field,are generally binding and conclusive upon the Court.-Art. 415 (9) NCC provides that "[d]ocks and structureswhich, though floating, are intended by their natureand object to remain at a fixed place on a river, lake,or coast" are considered immovable property. Thus,power barges are categorized as immovable propertyby destination, being in the nature of machinery andother implements intended by the owner for anindustry or work which may be carried on in a buildingor on a piece of land and which tend directly to meetthe needs of said industry or work.-SC affirmed the findings of the LBAA and CBAA thatthe owner of the taxable properties is FELS, which infine, is the entity being taxed by the local government.It follows then that FELS cannot escape liability from

the payment of realty taxes by invoking its exemptionin Sec. 234 (c) of R.A. No. 7160 (LGC).- The mere undertaking of petitioner NPC underSection 10.1 of the Agreement, that it shall beresponsible for the payment of all real estate taxes andassessments, does not justify the exemption. Theprivilege granted to petitioner NPC cannot be extended

to FELS. The covenant is between FELS and NPC anddoes not bind a third person not privy thereto, in thiscase, the Province of Batangas.-It must be pointed out that the protracted andcircuitous litigation has seriously resulted in the localgovernments deprivation of revenues. The power totax is an incident of sovereignty and is unlimited in itsmagnitude, acknowledging in its very nature noperimeter so that security against its abuse is to befound only in the responsibility of the legislature whichimposes the tax on the constituency who are to pay forit. The right of local government units to collect taxesdue must always be upheld to avoid severe taxerosion.-This consideration is consistent with the State policy

to guarantee the autonomy of local governments andthe objective of the Local Government Code that theyenjoy genuine and meaningful local autonomy toempower them to achieve their fullest development asself-reliant communities and make them effectivepartners in the attainment of national goals.Dispositive: Petition DENIED.

REYES V ALMANZOR196 SCRA 322

PARAS; APRIL 26, 1991

FACTSPetitioners J.B.L. Reyes, Edmundo and Milagros Reyes

are owners of parcels of land situated in Tondo andSta. Cruz Districts, City of Manila, which are leased andentirely occupied as dwelling sites by tenants. Saidtenants were paying monthly rentals not exceedingthree hundred pesos (P300.00) in July, 1971.-On July 14, 1971, the National Legislature enactedRepublic Act No. 6359 prohibiting for one year from itseffectivity, an increase in monthly rentals of dwellingunits or of lands on which another's dwelling is located,where such rentals do not exceed three hundred pesos(P300.00) a month but allowing an increase in rent bynot more than 10% thereafter. The said Act alsosuspended paragraph (1) of Article 1673 of the CivilCode for two years from its effectivity thereby

- 12 -


13/28


disallowing the ejectment of lessees upon theexpiration of the usual legal period of lease. OnOctober 12, 1972, Presidential Decree No. 20 amendedR.A. No. 6359 by making absolute the prohibition toincrease monthly rentals below P300.00 and byindefinitely suspending the aforementioned provisionof the Civil Code, excepting leases with a definite

period. Consequently, the Reyeses, petitioners herein,were precluded from raising the rentals and fromejecting the tenants.-In 1973, respondent City Assessor of Manila re-classified and reassessed the value of the subjectproperties based on the schedule of market valuesduly reviewed by the Secretary of Finance. Therevision, as expected, entailed an increase in thecorresponding tax rates prompting petitioners to file aMemorandum of Disagreement with the Board of TaxAssessment Appeals. They averred that thereassessments made were "excessive, unwarranted,inequitable, confiscatory and unconstitutional"considering that the taxes imposed upon them greatlyexceeded the annual income derived from their

properties. They argued that the income approachshould have been used in determining the land valuesinstead of the comparable sales approach which theCity Assessor adopted. The Boardof Tax AssessmentAppeals, however, considered the assessments valid.-The Reyeses appealed to the Central Board ofAssessment Appeals, which subsequently affirmed thedecision. Petitioner's subsequent motion forreconsideration was denied. Hence, this petition.

ISSUEWON the board erred in adopting the comparablesales approach method in fixing the assessed value ofappellants properties

HELDYES. Under Art. VIII, Sec. 17 (1) of the 1973Constitution, then enforced, the rule of taxation mustnot only be uniform, but must also be equitable andprogressive. Uniformity has been defined as thatprinciple by which all taxable articles or kinds ofproperty of the same class shall be taxed at the samerate (Churchill v. Concepcion, 34 Phil. 969 [1916]).

Taxation is said to be equitable when its burden fallson those better able to pay. Taxation is progressivewhen its rate goes up depending on the resources ofthe person affected (Ibid.). The power to tax "is an

attribute of sovereignty". In fact, it is the strongest ofall the powers of government.-But for all its plenitude the power to tax is notunconfined as there are restrictions. Adverselyeffecting as it does property rights, both the dueprocess and equal protection clauses of theConstitution may properly be invoked to invalidate in

appropriate cases a revenue measure. If it wereotherwise, there would be truth to the 1903 dictum ofChief Justice Marshall that "the power to tax involvesthe power to destroy." The web or unreality spun fromMarshall's famous dictum was brushed away by onestroke of Mr. Justice Holmes pen, thus: "The power totax is not the power to destroy while this Court sits. Soit is in the Philippines " (Sison, Jr. v. Ancheta, 130 SCRA655 [1984]; Obillos, Jr. v. Commissioner of InternalRevenue, 139 SCRA 439 [1985]).-In the same vein, the due process clause may beinvoked where a taxing statute is so arbitrary that itfinds no support in the Constitution. An obviousexample is where it can be shown to amount toconfiscation of property. That would be a clear abuse

of power (Sison v. Ancheta, supra).The taxing power has the authority to make areasonable and natural classification for purposes oftaxation but the government's act must not beprompted by a spirit of hostility, or at the very leastdiscrimination that finds no support in reason. Itsuffices then that the laws operate equally anduniformly on all persons under similar circumstances orthat all persons must be treated in the same manner,the conditions not being different both in the privilegesconferred and the liabilities imposed (Ibid., p. 662).-Finally under the Real Property Tax Code (P.D. 464 asamended), it is declared that the first FundamentalPrinciple to guide the appraisal and assessment of realproperty for taxation purposes is that the propertymust be "appraised at its current and fair marketvalue." By no strength of the imagination can themarket value of properties covered by P.D. No. 20 beequated with the market value of properties not socovered. The former has naturally a much lessermarket value in view of the rental restrictions.-Ironically, in the case at bar, not even the factorsdeterminant of the assessed value of subjectproperties under the "comparable sales approach"were presented by the public respondents, namely: (1)that the sale must represent a bonafide arm's lengthtransaction between a willing seller and a willing buyerand (2) the property must be comparable property.

Nothing can justify or support their view as it is ofjudicial notice that for properties covered by P.D. 20especially during the time in question, there werehardly any willing buyers. As a general rule, there wereno takers so that there can be no reasonable basis forthe conclusion that these properties were comparablewith other residential properties not burdened by P.D.

20. Neither can the given circumstances benonchalantly dismissed by public respondents asimposed under distressed conditions clearly implyingthat the same were merely temporary in character. Atthis point in time, the falsity of such premises cannotbe more convincingly demonstrated by the fact thatthe law has existed for around twenty (20) years withno end to it in sight.-Verily, taxes are the lifeblood of the government andso should be collected without unnecessary hindrance.However, such collection should be made inaccordance with law as any arbitrariness will negatethe very reason for government itself It is thereforenecessary to reconcile the apparently conflictinginterests of the authorities and the taxpayers so that

the real purpose of taxations, which is the promotion ofthe common good, may be achieved (Commissioner ofInternal Revenue v. Algue Inc., et al., 158 SCRA 9[1988]). Consequently, it stands to reason thatpetitioners who are burdened by the government by itsRental Freezing Laws (then R.A. No. 6359 and P.D. 20)under the principle of social justice should not now bepenalized by the same government by the impositionof excessive taxes petitioners can ill afford andeventually result in the forfeiture of their properties.

SESBRENO v. CBAAGR 106588

Panganiban; March 24, 1997

FACTS-Petitioner bought land with improvements in Cebu in1980. He declared the property on the land as aresidential house of strong materials with floor area of60sqm. Effective 1980, the declared property wasassessed by the City Assessor of Cebu City at a marketvalue of P60,000.00 and an assessed value ofP36,900.00.-During a tax-mapping operation conducted inFebruary 1989, the field inspectors of the Cebu CityAssessor discovered that the real property was actually

- 13 -


14/28


a residential building consisting of 4 storeys with a fifthstorey used as a roof deck. The building had a totalfloor area of 500.20 sqm. The area for each floor was100.04 sqm. The building was found to have beenmade of Type II-A materials. On October 17, 1990,these findings were confirmed by the Board ofCommissioners in an ocular inspection conducted on

the subject property.-Based on the findings of the field inspectors,Respondent City Assessor of Cebu City issued a newtax declaration effective in the year 1989, cancelingthe old one, and assessing the building therein at a netmarket value of P499,860.00 and an assessed value ofP374,900.00. The 1981-1984 Schedule of Market Valuewas applied in the assessment.-Petitioner protested the new assessment for being"excessive and unconscionable," contending that itwas increased by more than 1,000%. The CBAAdismissed his protest. His appeal was met with anadditional assessment of back taxes.

ISSUES1) WON the raising of the issue of back taxes onappeal to the CBAA was proper2) WON petitioner is liable for back taxes

a) applicability of Sec 24, PD 464 (interpretation offor the first time)

b) definition of market value (petitioner is contendingthat the market value of the property, including theland was P100,000, the amount he paid when hebought it)

c) applicability of Sec 23, PD 464

HELD1) YES.An appelate court is clothed with ample authorityto review matters, even if they are not assignedas errors in their appeal, if it finds that theirconsideration is necessary in arriving at a justdecision of the case.-Although the foregoing specifically referred to"appellate courts," there appears no reason why theseshould not apply to appellate administrative agencies,where rules of procedure are liberally construed.

2) YES.a) Arguing that he should not be liable for back taxes,petitioner states that Respondent CBAA should haveapplied Section 24, instead of Section 25, of PD 464.

These statutory provisions read:"Section 24. Date of effectivity of

Assessment or Reassessment. All assessmentsor reassessments made after the first day of

January of any year shall take effect on the firstday of January of the succeeding year: Provided,however, That the reassessment of real property

due to its (1) partial or total destruction, or to (2)a major change in its actual use, or to any (3)great and sudden inflation or deflation of realproperty values, (4) or to the gross illegality ofthe assessment when made or to any otherabnormal cause, shall be made within ninety daysfrom the date any such cause or causes occurred,the same to take effect at the beginning of thequarter next following the reassessment.Section 25. Assessment of Property Subjectto Back Taxes. Real property declared for thefirst time shall have back taxes assessed againstit for the period during which it would have beenliable if assessed from the first in proper coursebut in no case for more than ten years prior to

the year of initial assessment; Provided, however,that the back taxes shall be computed on thebasis of the applicable schedule of values in forceduring the corresponding period.-If said taxes are paid before the expiration of thetax collection period next ensuing, no penalty fordelinquency shall be imposed, otherwise thetaxes shall be subject to all the penalties to whichthey would have been liable had they originallybecome delinquent after assessment of theproperty in the usual course."-Petitioner says that CBAA was wrong in applying Sec25 because the property has been declared forassessment as early as 1980 (and before that by theprevious owner) and not for the first time in 1989. Heis of course wrong in his interpretation of for the firsttime. In a similar case, it was held that it should notbe understood to apply only to real estate that have(sic) never been declared; as within the meaning ofsuch phrase, the excess areas resulting from therevision must be understood as never having beendeclared before.b) Market Value is defined as "the highest priceestimated in terms of money which the property willbuy if exposed for sale in the open market allowing areasonable time to find a purchaser who buys withknowledge of all uses to which it is adapted and forwhich it is capable of being used." It is also referred to

as "the price at which a willing seller would sell and awilling buyer would buy, neither being under abnormalpressure." (Sec 3(n), PD 464)-Contrary to petitioner's contention, acquisition costcannot be and is not the sole basis of the current andfair market value of a property. The current value oflike properties and their actual or potential uses,

among others, are also considered. Unscrupuloussellers of real estate often understate the selling pricein the deed of sale to minimize their tax liability.Moreover, the value of real property does not remainstagnant; it is unrealistic to expect that the currentmarket value of a property is the same as its cost ofacquisition ten years ago. In this light, a generalrevision of real property assessment is required by lawevery five (5) years to ensure that real properties areassessed at their current and fair market values.c) Petitioner argues that the CBAA erred in refusing toapply Section 23 of PD 464 which provides:Section 23. Certification of Revised Valuesto the Secretary of Finance. When theprovincial or city assessor shall have finished a

general revision of property assessments for anyprovince, municipality or city, he shall so certifyto the Secretary of Finance and the assessmentsshall become effective and taxes shall accrue andbe payable thereunder in accordance with theprovisions of this Code.-Petitioner claims that Respondent City Assessor ofCebu City has not yet completed the general revisionof property assessments for years 1981-1984 and hasnot yet submitted the certification required by Section23 of PD 464 to the Secretary of Finance; hence, hemay not yet be held liable to pay any assessment. Hewas wrong, of course, because the general revision inquestion was approved by the Sec Fin on May 22, 984,effective July 1, 1987. (hello, 1989 na!)

ALLIED BANKING CORPORATION VQUEZON CITY GOVERNMENT

G.R. No. 154126CARPIO-MORALES; October 15, 2005

NATUREAppeal by certiorari under Rule 45

FACTS

- 14 -


15/28


-On December 19, 1995, the Quezon City governmentenacted City Ordinance No. 357, Series of 1995,Section 3 of which reads:Section 3. The City Assessor shall undertake a generalrevision of real property assessments using as basisthe newly approved schedule specified in Sections 1and 2 hereof. He shall apply the new assessment level

of 15% for residential and 40% for commercial andindustrial classification, respectively as prescribed inSection 8 (a) of the 1993 Quezon City Revenue Code todetermine the assessed value of the land. Provided;however, that parcels of land sold, ceded,transferred and conveyed for remuneratoryconsideration after the effectivity of thisrevision shall be subject to real estate tax basedon the actual amount reflected in the deed ofconveyance or the current approved zonalvaluation of the Bureau of Internal Revenueprevailing at the time of sale, cession, transferand conveyance, whichever is higher, asevidenced by the certificate of payment of thecapital gains tax issued therefor.-Petitioner purchased from Liwanag C. Natividad a1,000 square meter parcel of land in the amount ofP38,000,000.00.-Prior to the sale, Natividad had been payingP85,050.00 as annual real property tax based on thepropertys fair market value of P4,500,000.00 andassessed value of P1,800,000.00.-After its acquisition of the property, petitioner was, inaccordance with Section 3 of the ordinance, requiredto pay P102,600.00 as quarterly real estate tax (orP410,400.00 annually), with the market value of theproperty pegged at P38,000,000.00 the considerationappearing in the Deed of Absolute Sale, and itsassessed value at P15,200,000.00.-Petitioner paid the quarterly real estate tax under

protest. In its protest with the City Treasurer, petitionerassailed Section 3 of the ordinance as null and void-Petitioner later sent a demand letter to the QC

Treasurers Office seeking a refund of the real estatetaxes it erroneously collected from it. It was denied onthe ground that the ordinance is presumed valid andlegal unless otherwise declared by a court ofcompetent jurisdiction.-Petitioner filed on August 11, 2000 a petition forprohibition and declaratory relief before the QuezonCity RTC for the declaration of nullity of Section 3 ofthe ordinance; the enjoining of respondents QuezonCity Treasurer, Quezon City Assessor, and City Mayor

of Quezon City from further implementing theordinance; for the Quezon City Treasurer to beordered to refund the amount representing the realproperty tax erroneously collected and paid underprotest; and for respondents to pay attorneys feesand costs of the suit.-On March 6, 2001, respondent Quezon City

Government enacted Ordinance No. SP-1032, S-2001which repealed the assailed proviso in Section 3 of the1995 Ordinance.-Respondents moved to dismiss the petition, averringthat the passage of the repealing ordinance hadrendered the petition moot and academic.-Petitioner opposed the motion, alleging that while itsaction for the declaration of nullity of the proviso wasrendered moot and academic by its repeal, its claim forrefund and attorneys fees had not been mooted, andthe trial court still had to determine if Section 3 of theordinance is null and void ab initio and perforce, maynot be enforced during the intervening period from thetime of its enactment until the time of its repeal.-TC granted respondents motion to dismiss

-MFR denied, hence, this appeal

ISSUEWON Section 3, Quezon City Ordinance No. 357, Seriesof 1995, which was abrogated for beingUNCONSTITUTIONAL can be the basis of collecting realestate taxes prior to its repealHELDNo.-The proviso in question is invalid as it adopts amethod of assessment or appraisal of real propertycontrary to the Local Gove

TAX 2 Digests (Locgov)

Documents

Transcript of TAX 2 Digests (Locgov)