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G.R. No. 112497, August 4, 1994
Cruz, J.
Facts:
The principal issue in this case is the constitutionality of
Section 187 of the Local Government Code 1. The Secretary of
Justice (on appeal to him of four oil companies and a taxpayer)
declared Ordinance No. 7794 (Manila Revenue Code) null and void
for non-compliance with the procedure in the enactment of tax
ordinances and for containing certain provisions contrary to law
and public policy.
The RTC revoked the Secretarys resolution and sustained
the ordinance. It declared Sec 187 of the LGC as unconstitutional
because it vests on the Secretary the power of control over LGUs in
violation of the policy of local autonomy mandated in the
Constitution. The Secretary argues that the annulled Section 187 is
constitutional and that the procedural requirements for the
enactment of tax ordinances as specified in the Local Government
Code had indeed not been observed. (Petition originally dismissed
by the Court due to failure to submit certified true copy of the
decision, but reinstated it anyway.)
Issue:
WON the lower court has jurisdiction to consider the
constitutionality of Sec 187 of the LGC
Held:
Yes. BP 129 vests in the regional trial courts jurisdiction over
all civil cases in which the subject of the litigation is incapable of
pecuniary estimation. Moreover, Article X, Section 5(2), of the
Constitution vests in the Supreme Court appellate jurisdiction over
final judgments and orders of lower courts in all cases in which the
constitutionality or validity of any treaty, international or executive
agreement, law, presidential decree, proclamation, order,
instruction, ordinance, or regulation is in question.
Procedure For Approval And Effectivity Of Tax Ordinances And Revenue Measures; Mandatory Public Hearings.
The procedure for approval of local tax ordinances and revenue measures shall be in accordance with the
provisions of this Code: Provided, That public hearings shall be conducted for the purpose prior to the enactment
thereof; Provided, further, That any question on the constitutionality or legality of tax ordinances or revenue
measures may be raised on appeal within thirty (30) days from the effectivity thereof to the Secretary of Justice
who shall render a decision within sixty (60) days from the date of receipt of the appeal: Provided, however, That
such appeal shall not have the effect of suspending the effectivity of the ordinance and the accrual and payment
of the tax, fee, or charge levied therein: Provided, finally, That within thirty (30) days after receipt of the decision
or the lapse of the sixty-day period without the Secretary of Justice acting upon the appeal, the aggrieved party
may file appropriate proceedings with a court of competent jurisdiction.
a. SUMMARY OF RATIO:
i. Ganzon is under the impression that the
Constitution has left the President mere
supervisory powers, which supposedly
excludes the power of investigation, and
denied her control, which allegedly
embraces disciplinary authority. It is a
mistaken impression because legally,
supervision is not incompatible with
disciplinary authority. The SC had
occasion to discuss the scope and extent
of the power of supervision by the
President over
local government officials in contrast to
the power of control given to him over
executive officials of
our government wherein it was
emphasized that the two terms, control
and supervision, are two different things
which differ one from the other in
meaning and extent.
In administration law supervision
means overseeing or the power or
authority of an officer to see that
subordinate officers perform their
duties. If the latter fail or neglect to
fulfill them the former may take such
action or step as prescribed by law to
make them perform their duties. Control,
on the other hand, means the power of
an officer to alter or modify or nullify of
set aside what a subordinate officer had
done in the performance of his duties
and to substitute the judgment of the
former for that of the latter. But from
this pronouncement it cannot be
reasonably inferred that the power of
supervision of the President over
local government officials does not
include the power of investigation
when in his opinion the good of the
public service so requires.
ii. The Secretary of Local Government, as
the alter ego of the president, in
suspending Ganzon is exercising a valid
2. Other
a.
b.
c.
Basco v. PAGCOR
Facts: PAGCOR was created under PD 1869 to enable the
Government to regulate and centralize all games of chance
authorized by existing franchise or permitted by law. To attain its
objectives (centralize and integrate the right and authority to
or the Local Government Code of 1991, than the old decree invoked
by petitioner.
On 14 February 1996, petitioner MERALCO filed with the RTC a
complaint for refund against the Province of Laguna and also Benito
R. Balazo in his capacity as the Provincial Treasurer of Laguna. RTC
dismissed the complaint holding that the power to tax exercised by
the province of Laguna was valid.
ISSUE: Whether or not the power to tax was validly exercised.
HELD: Prefatorily, it might be well to recall that local governments
do not have the inherent power to tax except to the extent that
such power might be delegated to them either by the basic law or
by statute. Presently, under Article X of the 1987 Constitution, a
general delegation of that power has been given in favor of local
government units.
Under the regime of the 1935 Constitution no similar delegation of
tax powers was provided, and local government units instead
derived their tax powers under a limited statutory authority.
Whereas, then, the delegation of tax powers granted at that time
by statute to local governments was confined and defined (outside
of which the power was deemed withheld), the present
constitutional rule (starting with the 1973 Constitution), however,
would broadly confer such tax powers subject only to specific
exceptions that the law might prescribe.
Under the now prevailing Constitution, where there is neither a
grant nor a prohibition by statute, the tax power must be deemed
to exist although Congress may provide statutory limitations and
guidelines.
The basic rationale for the current rule is to safeguard the viability
and self-sufficiency of local government units by directly granting
them general and broad tax powers. Nevertheless, the fundamental
law did not intend the delegation to be absolute and unconditional;
the constitutional objective obviously is to ensure that, while the
local government units are being strengthened and made more
autonomous, the legislature must still see to it that (a) the taxpayer
will not be over-burdened or saddled with multiple and
unreasonable impositions; (b) each local government unit will have
its fair share of available resources; (c) the resources of the
national government will not be unduly disturbed; and (d) local
taxation will be fair, uniform, and just. The 1991 Code explicitly
authorizes provincial governments, notwithstanding any
exemption granted by any law or other special law, x x x (to)
The appellate court reversed the RTC and declared that the
Corporation was not liable to pay business taxes to the City of
Makati.
Upon denial of her Motion for
Reconsideration,http://www.lawphil.net/judjuris/juri2005/oct20
05/gr_154993_2005.html - fnt21 the City Treasurer elevated the
present Petition for Review under Rule 45. It is argued that the
Corporation is engaged in business, for the dues collected from the
different unit owners is utilized towards the beautification and
maintenance of the Condominium, resulting in "full appreciative
living values" for the condominium units which would command
better market prices should they be sold in the future. The City
Treasurer likewise avers that the rationale for business taxes is not
on the income received or profit earned by the business, but the
privilege to engage in business.
The City Treasurer also claims that the Corporation had filed the
wrong mode of appeal before the Court of Appeals when the latter
filed its Petition for Review under Rule 42. It is reasoned that the
decision of the Makati RTC was rendered in the exercise of original
jurisdiction, it being the first court which took cognizance of the
case. Accordingly, with the Corporation having pursued an
erroneous mode of appeal, the RTC Decision is deemed to have
become final and executory.
Issues and Ruling:
Procedural:
1) Procedural: Whether the RTC, in deciding an appeal
taken from a denial of a protest by a local treasurer
under Section 195 of the Local Government Code,
exercises "original jurisdiction" or "appellate
jurisdiction? Original
There are 2 conflicting views on this issue:
a) Position of CA: RTC, in reviewing denials of
protests by local treasurers, exercises appellate
jurisdiction. This is anchored on the language of
Sec. 195 of the LGC which states that the remedy
of the taxpayer whose protest is denied by the
local treasurer is to appeal with the court of
competent jurisdiction. The LGC however does
not elaborate on how such appeal should be
undertaken.
to burden all such other class of goods with "taxes, fees and
charges," excepting excise taxes, a specific prohibition is imposed
barring the levying of any other type of taxes with respect to
petroleum products.
QUEZON CITY and THE CITY TREASURER OF QUEZON CITYs, vs.
ABS-CBN BROADCASTING CORPORATION. [G.R. No. 166408.
October 6, 2008.]
Facts: Under Section 31, Article 13 of the Quezon City Revenue
Code of 1993, 3 a franchise tax was imposed on businesses
operating within its jurisdiction. ABS-CBN had been paying local
franchise tax imposed by Quezon City. However, in view of the
provision in R.A. No. 9766 that it "shall pay a franchise tax . . . in
lieu of all taxes", the corporation developed the opinion that it is
not liable to pay the local franchise tax imposed by Quezon City.
Consequently, ABS-CBN paid under protest the local franchise tax
imposed by Quezon City on the dates, in the amounts and under
the official receipts. For failure to obtain any response from the
Quezon City Treasurer, ABS-CBN filed a complaint before the RTC in
Quezon City seeking the declaration of nullity of the imposition of
local franchise tax by the City Government of Quezon City for being
unconstitutional. It likewise prayed for the refund of local franchise
tax. RTC and CA rendered judgment declaring as invalid the
imposition on and collection from ABS-CBN of local franchise tax.
Issue/ Held: W/N ABS-CBN is liable for franchise taxes imposed by a
local government unit- NO
Ratio: The "in lieu of all taxes" provision in the franchise of ABSCBN does not expressly provide what kind of taxes ABS-CBN is
exempted from. It is not clear whether the exemption would include
both local, whether municipal, city or provincial, and national tax.
What is clear is that ABS-CBN shall be liable to pay three (3)
percent franchise tax and income taxes under Title II of the NIRC.
But whether the "in lieu of all taxes provision" would include
exemption from local tax is not unequivocal. The right to exemption
from local franchise tax must be clearly established and cannot be
made out of inference or implications but must be laid beyond
reasonable doubt. Verily, the uncertainty in the "in lieu of all taxes"
provision should be construed against ABS-CBN. ABS-CBN has the
burden to prove that it is in fact covered by the exemption so
claimed. ABS-CBN miserably failed in this regard.