taxation cases 2nd batch

8/3/2019 Taxation Cases 2nd Batch

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1st quarter 1947 13,241.07

2nd quarter 1947 15,774.55

3rd quarter 1947 14,654.13

4th quarter 1947 12,590.94

1st quarter 1948 11,143.90

2nd quarter 1948 14,715.26

3rd quarter 1948 38,333.83

4th quarter 1948 16,179.90

1st quarter 1949 23,975.10

2nd quarter 1949 17,802.08

3rd quarter 1949 16,640.79

4th quarter 1949 15,961.38

1st quarter 1950 18,562.46

2nd quarter 1950 21,816.32

3rd quarter 1950 25,004.55

4th quarter 1950 45,287.92

1st quarter 1951 37,841.21

2nd quarter 1951 29,103.98

3rd quarter 1951 20,181.10

4th quarter 1951 22,968.91

1st quarter 1952 23,002.65

2nd quarter 1952 17,626.96

3rd quarter 1952 17,921.01

4th quarter 1952 24,180.72

1st quarter 1953 29,516.21

2. That the parties hereby reserve the right to present evidence of other facts not

herein stipulated.

WHEREFORE, it is respectfully prayed that this case be set for hearing so that theparties may present further evidence on their behalf. (Record on Appeal, pp. 15-

16).

When the case was set for hearing, plaintiff proved, among other things, that it has

been in existence in the Philippines since 1899, and that its parent society is in New

York, United States of America; that its, contiguous real properties located at Isaac

Peral are exempt from real estate taxes; and that it was never required to pay any

municipal license fee or tax before the war, nor does the American Bible Society inthe United States pay any license fee or sales tax for the sale of bible therein.

Plaintiff further tried to establish that it never made any profit from the sale of its


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ifi ll idi f th ithd l f h ti i il " d th t


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specifically providing for the withdrawal of such exemptions, privileges," and that

"upon the effectivity of the Local Government Code all exemptions except only as

provided therein can no longer be invoked by MERALCO to disclaim liability for the

local tax." In fine, the Court has viewed its previous rulings as laying stress more on

the legislative intent of the amendatory law whether the tax exemption privilege

is to be withdrawn or not rather than on whether the law can withdraw, withoutviolating the Constitution, the tax exemption or not.

While the Court has, not too infrequently, referred to tax exemptions contained in

special franchises as being in the nature of contracts and a part of the inducement

for carrying on the franchise, these exemptions, nevertheless, are far from being

strictly contractual in nature. Contractual tax exemptions, in the real sense of the

term and where the non-impairment clause of the Constitution can rightly be

invoked, are those agreed to by the taxing authority in contracts, such as thosecontained in government bonds or debentures, lawfully entered into by them under

enabling laws in which the government, acting in its private capacity, sheds its cloak

of authority and waives its governmental immunity. Truly, tax exemptions of this

kind may not be revoked without impairing the obligations of contracts.14

These

contractual tax exemptions, however, are not to be confused with tax exemptions

granted under franchises. A franchise partakes the nature of a grant which is

beyond the purview of the non-impairment clause of the Constitution.15

Indeed,

Article XII, Section 11, of the 1987 Constitution, like its precursor provisions in the

1935 and the 1973 Constitutions, is explicit that no franchise for the operation of a

public utility shall be granted except under the condition that such privilege shall be

subject to amendment, alteration or repeal by Congress as and when the common

good so requires.

WHEREFORE, the instant petition is hereby DISMISSED. No costs.

SO ORDERED.


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Finance:49


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It is enough to say that the parties to a contract cannot, through the exercise of

prophetic discernment, fetter the exercise of the taxing power of the State. For not

only are existing laws read into contracts in order to fix obligations as between

parties, but the reservation of essential attributes of sovereign power is also read

into contracts as a basic postulate of the legal order. The policy of protecting

contracts against impairment presupposes the maintenance of a government

which retains adequate authority to secure the peace and good order of society.

In truth, the Contract Clause has never been thought as a limitation on the exercise

of the States power of taxation save only where a tax exemption has been granted

for a valid consideration. x x x.

WHEREFORE, the instant petition is DENIED for lack of merit. Costs againstpetitioner.

SO ORDERED.


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the law now stands, ABS-CBN is no longer subject to a franchise tax. It is now liable

for VAT.


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WHEREFORE, the petition is GRANTED and the appealed Decision REVERSED AND

SET ASIDE. The petition in the trial court for refund of local franchise tax

is DISMISSED.

SO ORDERED.


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of medical services to them, whether paying or non-paying, other portions thereof

are being leased to private individuals for their clinics and a canteen. Further, a

portion of the land is being leased to a private individual for her business enterprise

under the business name "Elliptical Orchids and Garden Center." Indeed, the


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petitioners evidence shows that it collected P1,136,483.45 as rentals in 1991

and P1,679,999.28 for 1992 from the said lessees.

Accordingly, we hold that the portions of the land leased to private entities as well

as those parts of the hospital leased to private individuals are not exempt from such

taxes.45

On the other hand, the portions of the land occupied by the hospital and

portions of the hospital used for its patients, whether paying or non-paying, are

exempt from real property taxes.

IN LIGHT OF ALL THE FOREGOING, the petition is PARTIALLY GRANTED. The

respondent Quezon City Assessor is hereby DIRECTED to determine, after duehearing, the precise portions of the land and the area thereof which are leased to

private persons, and to compute the real property taxes due thereon as provided

for by law.

SO ORDERED.


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It has been said that taxes are the lifeblood of the government. In this case, it is justan enema, a first-aid measure to resuscitate an economy in distress. The Court isneither blind nor is it turning a deaf ear on the plight of the masses. But it does nothave the panacea for the malady that the law seeks to remedy. As in other cases,the Court cannot strike down a law as unconstitutional simply because of its yokes.

Let us not be overly influenced by the plea that for every wrong there is a remedy,


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and that the judiciary should stand ready to afford relief. There are undoubtedlymany wrongs the judicature may not correct, for instance, those involving politicalquestions. . . .

Let us likewise disabuse our minds from the notion that the judiciary is therepository of remedies for all political or social ills; We should not forget that theConstitution has judiciously allocated the powers of government to three distinctand separate compartments; and that judicial interpretation has tended to thepreservation of the independence of the three, and a zealous regard of the

prerogatives of each, knowing full well that one is not the guardian of the othersand that, for official wrong-doing, each may be brought to account, either byimpeachment, trial or by the ballot box.

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The words of the Court in Vera vs. Avelino101

holds true then, as it still holds truenow. All things considered, there is no raison d'tre for the unconstitutionality ofR.A. No. 9337.

WHEREFORE, Republic Act No. 9337 not being unconstitutional, the petitions in G.R.Nos. 168056, 168207, 168461, 168463, and 168730, are hereby DISMISSED.

There being no constitutional impediment to the full enforcement andimplementation of R.A. No. 9337, the temporary restraining order issued by theCourt on July 1, 2005 is LIFTED upon finality of herein decision.

SO ORDERED.


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Given the above perspective, the amount PLDT paid in the concept of advance salestax and compensating tax on the 1992 to 1994 importations were, in context,erroneous tax payments and would theoretically be refundable. It should beemphasized, however, that, such importations were, when made, already subject toVAT.

Factoring in the fact that a portion of the claim was barred by prescription, the CTAhad determined that PLDT is entitled to a total refundable amountof P94 673 422 00 (P87 257 031 00 of compensating tax + P7 416 391 00


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of P94,673,422.00 (P87,257,031.00 of compensating tax + P7,416,391.00=P94,673,422.00). Accordingly, it behooves the BIR to grant a refund of the advancesales tax and compensating tax in the total amount of P94,673,422.00, subject tothe condition that PLDT present proof of payment of the corresponding VAT on saidtransactions.

WHEREFORE, the petition is partially GRANTED. The Decision of the Court ofAppeals in CA-G.R. No. 47895 dated September 17, 1999 is MODIFIED. TheCommissioner of Internal Revenue is ORDERED to issue a Tax Credit Certificate or torefund to PLDT only the of P94,673,422.00 advance sales tax and compensating taxerroneously collected by the Bureau of Customs from October 1, 1992 to May 31,1994, less the VAT which may have been due on the importations in question, buthave otherwise remained uncollected.

SO ORDERED.


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The exemption granted under Section 135 (b) of the NIRC of 1997 and Article 4(2) of

the Air Transport Agreement between RP and Singapore cannot, without a clear

showing of legislative intent, be construed as including indirect taxes. Statutes

granting tax exemptions must be construed in strictissimi juris against the taxpayer

and liberally in favor of the taxing authority,43

and if an exemption is found to exist,

it must not be enlarged by construction.44

WHEREFORE, the petition is DENIED.


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Costs against petitioner.

SO ORDERED.


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insurance claims other than those reported in its audited financial statement as of

December 31, 1989, attached hereto as "Annex B" and made a part hereof. The

business of Cibeles has at all times been conducted in full compliance with all

applicable laws, rules and regulations. SELLER undertakes and agrees to hold the

BUYER and Cibeles free from any and all income tax liabilities of Cibeles for the

fiscal years 1987, 1988 and 1989.39

[Underscoring Supplied].

When the late Toda undertook and agreed "to hold the BUYER and Cibeles freefrom any all income tax liabilities of Cibeles for the fiscal years 1987, 1988, and


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1989," he thereby voluntarily held himself personally liable therefor. Respondent

estate cannot, therefore, deny liability for CICs deficiency income tax for the year

1989 by invoking the separate corporate personality of CIC, since its obligation

arose from Todas contractual undertaking, as contained in the Deed of Sale of

Shares of Stock.

WHEREFORE, in view of all the foregoing, the petition is hereby GRANTED. Thedecision of the Court of Appeals of 31 January 2001 in CA-G.R. SP No. 57799

is REVERSED and SET ASIDE, and another one is hereby rendered ordering

respondent Estate of Benigno P. Toda Jr. to pay P79,099,999.22 as deficiency

income tax of Cibeles Insurance Corporation for the year 1989, plus legal interest

from 1 May 1994 until the amount is fully paid.

Costs against respondent.

SO ORDERED.

taxation cases 2nd batch

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