Title: Jaca vs People and the Sandiganbayan; Gaviola vs People; Cesa vs PeopleGR Nos. 166967, 166974, 167167 Date: January 28, 2013Ponente: Brion, J.

Parties:Petitioners: Edna J. Jaca, Alan C. Gaviola, Eustaquio B. CesaRespondent: People of the Philippines and the Sandiganbayan

Facts:Petitioners occupied appointive positions in the city government of Cebu when the controversy arose: Gaviola was the City

Administrator, Cesa was the City Treasurer, and Jaca was the City Accountant. All three petitioners, together with a certain Benilda Bacasmas (Chief Cashier of the Cash Division under the Office of the City Treasurer), were charged and found guilty before the Sandiganbayan of violating Section 3 of RA No. 3109 or the Anti-Graft and Corrupt Practices Act. City Auditor Rodolfo Ariesga and his team conducted a surprise audit of the cash and other accounts handled by the accountable officers of the Cash Division, Office of the City Treasurer, including disbursing Officer Rosalinda G. Badana, the paymaster for eight departments in Cebu City government. The audit team covered the period from September 20, 1995 to March 5, 1998, the day Badana disappeared without notice from work. Badana was found to have incurred a cash shortage to a total of Php18,527,137.19. On the administrative aspect of the case, the Ombudsman found Jaca and Cesa guilty of simple neglect of duty and imposed on them the penalty of suspension for six months; while the case against petitioner Gaviola was dismissed for being moot and academic. On Cesa’s appeal, CA and SC sustained the Ombudsman’s ruling. The Ombudsman supported the findings of the Prosecution that the petitioners failed to comply with the laws, rules, and regulations governing granting, utilization, and liquidation of cash advances by allowing the vouchers for cash advances to lack an indicated specific purpose for which the amount was being requested, as well as lack the specified office or department to be paid, number of payees, and the payroll period to be paid. It was further found that the amounts requested were not equal to the amount of payroll for the specified pay period, and that the vouchers covering cash advances for the payment were not supported by payrolls needed for the purpose. Thus, although the monthly payroll of the eight departments within Badana’s responsibility required more than P5 million, the cash advance granted for each month averaged more than P7 million. Also, the petitioners repeatedly affixed their signatures and allowed the disbursement of public funds through cash advances, even if there were previously unliquidated cash advances.

Issue: - NO.

Ratio:The power to tax is inherent in the State as an attribute of sovereignty. The same is not true for provinces, cities, municipalities and barangays, as they are not the sovereign, but rather, are merely territorial and political subdivisions. As summarized in Icard v. City Council of Baguio, “the charter or statute must plainly show an intent to confer that power, or the municipality cannot assume it. And the power when granted is to be construed in strictissimi juris. Any doubt or ambiguity arising out of the term used in granting that power must be resolved against the municipality.” As such, the power of a province to tax is limited, and should be delegated to it either by the Constitution or by statute, as is also specified in Section 5, Article X of the 1987 Constitution. Section 133 of RA 7160 or the Local Government Code of 1991 (LGC) provides limitations on the taxing powers of LGUs, with Section 133 (i) specifically prohibiting LGUs to levy percentage or value-added tax (VAT) on sales, barters or exchanges or similar transactions on goods or services except as otherwise provided by the LGC. Pelizloy’s contention that Section 59, Article X of the Tax Ordinance levies a prohibited percentage tax is correct; however, provinces are not barred from imposing amusement taxes even if in the form of percentage taxes. An exception to the general rule laid down in Section 133 (i) can be found in Section 140, which expressly allows provinces to impose amusement taxes on “the proprietors, lessees, or operators of theaters, cinemas, concert halls, circuses, boxing stadia, and other places of amusement.” Following the principle of ejusdem generis, however, “resorts, swimming pools, bath houses, hot springs, and tourist spots” are not among those places expressly mentioned by Section 140 of the LGC as being subject to amusement taxes, nor can they be considered as included in the phrase, “other places of amusement.” Hence, Palm Grove Resort cannot be subject to amusement taxes.

Petition for Review on Certiorari granted.