tax-hec

8/2/2019 tax-hec

http://slidepdf.com/reader/full/tax-hec 1/10

G.R. No. 106611 July 21, 1994 COMMISSIONER OF INTERNAL REVENUE, petitioner,

vs.COURT OF APPEALS, CITYTRUST BANKING CORPORATION and COURT OF TAXAPPEALS, respondents.

Facts

Private respondent corporation filed a claim for refund with the Bureau of

Internal Revenue (BIR) in the amount of P19,971,745.00 representing thealleged aggregate of the excess of its carried-over total quarterly paymentsover the actual income tax due, plus carried-over withholding tax paymentson government securities and rental income, as computed in its final incometax return for the calendar year ending December 31, 1985.

Two days later, or on August 28, 1986, in order to interrupt the running of

the prescriptive period, Citytrust filed a petition with the Court of Tax Appeals,docketed therein as CTA Case No. 4099, claiming the refund of its incometax overpayments for the years 1983, 1984 and 1985 in the total amount ofP19,971,745.00.

8/2/2019 tax-hec


IssueWhether or not Tax Refund may be granted without evidence presented.

Held

It is axiomatic that the Government cannot and must not be estoppedparticularly in matters involving taxes. Taxes are the lifeblood of the nationthrough which the government agencies continue to operate and with which the

State effects its functions for the welfare of its constituents. The errors ofcertain administrative officers should never be allowed to jeopardize theGovernment's financial position, 22 especially in the case at bar where theamount involves millions of pesos the collection whereof, if justified, stands tobe prejudiced just because of bureaucratic lethargy.

8/2/2019 tax-hec


MANILA RACE HORSE TRAINERS ASSOCIATION, INC., and JUAN T.SORDAN, plaintiffs-appellants,

vs.MANUEL DE LA FUENTE, defendant-appellee

88 Phil. 60 Facts

The Manila Race Horses Trainers Association, Inc., a non-stockcorporation duly organized and existing under and by virtue of the laws of thePhilippines, who allege that they are owners of boarding stables for race horsesand that their rights as such are affected by Ordinance No. 3065 of the City ofManila approved on July 1, 1947. They made the Mayor of Manila defendant andprayed that said ordinance be declared invalid as violative of the PhilippineConstitution.

First, it is maintained that the ordinance under consideration is a tax onrace horses as distinct from boarding stables. It is argued that by section 2 thebasis of the license fees "is the number of race horses kept or maintained in theboarding stables to be paid by the maintainers at the rate of P10.00 a year foreach race horse;" that "the fee is increased correspondingly P10 for eachadditional race horse maintained or fed in the stable;" and that "by the same

token, an empty stable for race horse pays no license fee at all."

8/2/2019 tax-hec


IssueWhether or not the Ordinance is unconstitutional

HeldThe owners of boarding stables for race horses and, for that matter, the

race horse owners themselves, who in the scheme of shifting may carry thetaxation burden, are a class by themselves and appropriately taxed where ownersof other kinds of horses are taxed less or not at all, considering that equity intaxation is generally conceived in terms of ability to pay in relation to the benefitsreceived by the taxpayer and by the public from the business or property taxed.Race horses are devoted to gambling if legalized, their owners derive fat incomeand the public hardly any profit from horse racing, and this business demandsrelatively heavy police supervision. Taking everything into account, the

differentiation against which the plaintiffs complain conforms to the practicaldictates of justice and equity and is not discrimatory within the meaning of theConstitution.

8/2/2019 tax-hec


LUTZ VS. ARANETA98 Phil 148, G.R. No. L-7859

22 Dec 1955Facts

Walter Lutz, as the Judicial Administrator of the Intestate Estate ofAntonio Jayme Ledesma, seeks to recover from J. Antonio Araneta, the Collector

of Internal Revenue, the sum of money paid by the estate as taxes, pursuant tothe Sugar Adjustment Act. Under Section 3 of said Act, taxes are levied on theowners or persons in control of the lands devoted to the cultivation of sugar cane.Furthermore, Section 6 states all the collections made under said Act shall be foraid and support of the sugar industry exclusively. Lutz contends that suchpurpose is not a matter of public concern hence making the tax levied for that

cause unconstitutional and void. The Court of First Instance dismissed hispetition, thus this appeal before the Supreme Court.

8/2/2019 tax-hec


Issue

Whether or Not the tax levied under the Sugar Adjustment Act ( CommonwealthAct 567) is unconstitutional

HeldThe tax levied under the Sugar Adjustment Act is constitutional. The tax

under said Act is levied with a regulatory purpose, to provide means for the

rehabilitation and stabilization of the threatened sugar industry. Since sugarproduction is one of the great industries of our nation, its promotion, protection,and advancement, therefore redounds greatly to the general welfare. Hence, saidobjectives of the Act is a public concern and is therefore constitutional. It followsthat the Legislature may determine within reasonable bounds what is necessaryfor its protection and expedient for its promotion. If objectives and methods are

alike constitutionally valid, no reason is seen why the state may not levy taxes toraise funds for their prosecution and attainment. Taxation may be made with theimplement of the state’s police power. In addition, it is only rational that the taxesbe obtained from those that will directly benefit from it. Therefore, the tax leviedunder the Sugar Adjustment Act is held to be constitutional.

8/2/2019 tax-hec


IN RE STATE RAILROAD TAX CASES, 92 U.S. 575 (1875)

92 U.S. 575

Facts

These were bills of injunction to restrain the collection of taxes assessedon certain railroads in the State of Illinois, and, as they raised the same questionsof law, were heard together. The complainants in the first-mentioned case aretrustees and mortgagees of the Toledo, Peoria, and Warsaw Railroad Company; inthe second, stockholders in the Chicago and Alton Railroad Company; and in thethird, stockholders in the Chicago, Burlington, and Quincy Railroad Company.

8/2/2019 tax-hec


IssueWhether or not the questioned tax statutes conform with uniformity of taxation

Held

There can be no doubt that all the classes named in this 92 U.S. 575 612 clause,including pedlers, showmen, innkeepers, ferries, express, insurance, and telegraph

companies, are taken out of the general rule of uniformity prescribed by the firstclause, and the only limitation as to them is that of uniformity as to the class uponwhich the law shall operate; that is, innkeepers may be taxed by one, ferries byanother, railroads by another, provided that the rule as to innkeepers be uniform asto all innkeepers, the rule as to ferries uniform as to all ferries, and the rule as torailroad companies be uniform as to all railroad companies. As we have seen no

evidence that the rule by which railroad property is taxed is not uniform in its actionon all the railroad companies of Illinois, we can perceive no opposition to theconstitution of the State in that rule

8/2/2019 tax-hec


ABRA VALLEY COLLEGE, INC., represented by PEDRO V. BORGONIA,petitioner,

vs.

HON. JUAN P. AQUINO, Judge, Court of First Instance, Abra; ARMIN M.CARIAGA, Provincial Treasurer, Abra; GASPAR V. BOSQUE, MunicipalTreasurer, Bangued, Abra; HEIRS OF PATERNO MILLARE, respondents

FactsPetitioner, an educational corporation and institution of higher learning duly

incorporated with the Securities and Exchange Commission in 1948, filed acomplaint on July 10, 1972 in the court a quo to annul and declare void the "Noticeof Seizure' and the "Notice of Sale" of its lot and building located at Bangued, Abra,for non-payment of real estate taxes and penalties amounting to P5,140.31. Said"Notice of Seizure" of the college lot and building is duly registered in the name of

petitioner, on July 6, 1972, by respondents Municipal Treasurer and ProvincialTreasurer, was issued for the satisfaction of the said taxes thereon. The "Notice ofSale" was caused to be served upon the petitioner by the respondent treasurers onJuly 8, 1972 for the sale at public auction of said college lot and building, which salewas held on the same date. Dr. Paterno Millare, then Municipal Mayor of Bangued,Abra, offered the highest bid of P6,000.00 which was duly accepted. The certificate

of sale was correspondingly issued to him.

8/2/2019 tax-hec


IssueWhether or not the property of petitioner is tax exempt

Held It must be stressed however, that while this Court allows a more liberal andnon-restrictive interpretation of the phrase "exclusively used for educationalpurposes" as provided for in Article VI, Section 22, paragraph 3 of the 1935Philippine Constitution, reasonable emphasis has always been made thatexemption extends to facilities which are incidental to and reasonably necessary for

the accomplishment of the main purposes. Otherwise stated, the use of the schoolbuilding or lot for commercial purposes is neither contemplated by law, nor by

jurisprudence. Thus, while the use of the second floor of the main building in thecase at bar for residential purposes of the Director and his family, may find

justification under the concept of incidental use, which is complimentary to the mainor primary purpose—educational, the lease of the first floor thereof to the Northern

Marketing Corporation cannot by any stretch of the imagination be consideredincidental to the purpose of education.

tax-hec

Documents