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G.R. No.

L-30232 July 29, 1988

REVENUE, respondents-appellees.
H. San Luis & V.L. Simbulan for petitioner-appellant.

This is a petition for review of the October 21, 1968 Decision + of the Court of Ta !ppeals in CT! Case "o. 1#8#,
$%u&on 'tevedorin( Corporation v. )on. *a+on Oben, Co++issioner, ,ureau of -nternal *evenue$, den.in( the various clai+s for
ta refund/ and the 0ebruar. 21, 1969 *esolution of the sa+e court den.in( the +otion for reconsideration.
)erein petitioner-appellant, in 1961 and 1962, for the repair and +aintenance of its tu(boats,
i+ported variousen(ine parts and other e2uip+ent for which it paid, under protest, the assessed
co+pensatin( ta. 3nable to secure a ta refund fro+ the Co++issioner of -nternal *evenue, on
4anuar. 2, 196#, it filed a 5etition for *eview 6*ollo, pp. 1#-187 with the Court of Ta !ppeals,
doc8eted therein as CT! Case "o. 1#8#, pra.in( a+on( others, that it be (ranted the refund of the
a+ount of 599,##2.19. The Court of Ta !ppeals, however, in a Decision dated October 21, 1969
6Ibid., pp. 22-2:7, denied the various clai+s for ta refund. The decretal portion of the said decision
<)=*=0O*=, findin( petitioner>s various clai+s for refund a+ountin( to
599,##2.19 without sufficient le(al ?ustification, the said clai+s have to be, as the.
are hereb., denied. <ith costs a(ainst petitioner.
On 4anuar. 2#, 1969, petitioner-appellant filed a @otion for *econsideration 6Ibid., pp. 28-9#7, but
the sa+e was denied in a *esolution dated 0ebruar. 21, 1969 6Ibid., p. 9A7. )ence, the instant
This Court, in a *esolution dated @arch 19, 1969, (ave due course to the petition 6Ibid., p. #17.
5etitioner-appellant raised three 697 assi(n+ents of error, to wit;
The lower court erred in holdin( that the petitioner-appellant is en(a(ed in business
as stevedore, the wor8 of unloadin( and loadin( of a vessel in port, contrar. to the
evidence on record.
The lower court erred in not holdin( that the business in which petitioner-appellant is
en(a(ed, is part and parcel of the shippin( industr..
The lower court erred in not allowin( the refund sou(ht b. petitioner-appellant.
The instant petition is without +erit.
The pivotal issue in this case is whether or not petitioner>s tu(boats$ can be interpreted to be
included in the ter+ $car(o vessels$ for purposes of the ta ee+ption provided for in 'ection 191 of
the "ational -nternal *evenue Code, as a+ended b. *epublic !ct "o. 91:6.
'aid law provides;
'ec. 191. Compensating tax. B ... !nd 5rovided further, That the ta i+posed in this
section shall not appl. to articles to be used b. the i+porter hi+self in the
+anufacture or preparation of articles sub?ect to specific ta or those for consi(n+ent
abroad and are to for+ part thereof or to articles to be used b. the i+porter hi+self
as passen(er andCor car(o vessel, whether coastwise or ocean(oin(, includin(
en(ines and spare parts of said vessel. ....
5etitioner contends that tugboats are e+braced and included in the ter+ cargo vessel under the ta
ee+ption provisions of 'ection 191 of the *evenue Code, as a+ended b. *epublic !ct. "o. 91:6.
)e ar(ues that in le(al conte+plation, the tu(boat and a bar(e loaded with car(oes with the for+er
towin( the latter for loadin( and unloadin( of a vessel in part, constitute a sin(le vessel. !ccordin(l.,
it concludes that the en(ines, spare parts and e2uip+ent i+ported b. it and used in the repair and
+aintenance of its tu(boats are ee+pt fro+ co+pensatin( ta 6*ollo, p. 297.
On the other hand, respondents-appellees counter that petitioner-appellant>s $tu(boats$ are not
$Car(o vessel$ because the. are neither desi(ned nor used for carr.in( andCor transportin( persons
or (oods b. the+selves but are +ainl. e+plo.ed for towin( and pullin( purposes. !s such, it cannot
be clai+ed that the tu(boats in 2uestion are used in carr.in( and transportin( passen(ers or
car(oes as a co++on carrier b. water, either coastwise or ocean(oin( and, therefore, not within the
purview of 'ection 191 of the Ta Code, as a+ended b. *epublic !ct "o. 91:6 6,rief for
*espondents-!ppellees, pp. #A7.
This Court has laid down the rule that $as the power of taation is a hi(h prero(ative of soverei(nt.,
the relin2uish+ent is never presu+ed and an. reduction or di+unition thereof with respect to its
+ode or its rate, +ust be strictl. construed, and the sa+e +ust be coached in clear and
un+ista8able ter+s in order that it +a. be applied.$ 68# C.4.'. pp. 6A9-8117, @ore specificall.
stated, the (eneral rule is that an. clai+ for ee+ption fro+ the ta statute should be strictl.
construed a(ainst the tapa.er 6!ctin( Co++issioner of Custo+s v. @anila =lectric Co. et al., 69
'C*! #69 D19::E and Co++issioner of -nternal *evenue v. 5.4. Fiener Co. %td., et al., 6A 'C*! 1#2
!s correctl. anal.&ed b. the Court of Ta !ppeals, in order that the i+portations in 2uestion +a. be
declared ee+pt fro+ the co+pensatin( ta, it is indispensable that the re2uire+ents of the
a+endator. law be co+plied with, na+el.; 617 the en(ines and spare parts +ust be used b. the
i+porter hi+self as a passen(er andCor car(o, vessel/ and 627 the said passen(er andCor car(o
vessel +ust be used in coastwise or ocean(oin( navi(ation 6Decision, CT! Case "o. 1#8#/ *ollo, p.
!s pointed out b. the Court of Ta !ppeals, the a+endator. provisions of *epublic !ct "o. 91:6 li+it
ta ee+ption fro+ the co+pensatin( ta to i+ported ite+s to be used b. the i+porter hi+self as
operator of passen(er andCor car(o vessel 6Ibid., p. 2A7.
!s 2uoted in the decision of the Court of Ta !ppeals, a tu(boat is defined as follows;
! tugboat is a stron(l. built, powerful stea+ or power vessel, used for towin( and,
now, also used for attendance on vessel. 6<ebster "ew -nternational Dictionar., 2nd
! tugboat is a diesel or stea+ power vessel desi(ned pri+aril. for +ovin( lar(e
ships to and fro+ piers for towin( bar(es and li(hters in harbors, rivers and canals.
6=nc.clopedia -nternational Grolier, Hol. 18, p. 2A67.
! tug is a stea+ vessel built for towin(, s.non.+ous with tu(boat. 6,ouvier>s %aw
Dictionar..7 6*ollo, p. 2#7.
3nder the fore(oin( definitions, petitioner>s tu(boats clearl. do not fall under the cate(ories of
passen(er andCor car(o vessels. Thus, it is a cardinal principle of statutor. construction that where a
provision of law spea8s cate(oricall., the need for interpretation is obviated, no plausible pretense
bein( entertained to ?ustif. non-co+pliance. !ll that has to be done is to appl. it in ever. case that
falls within its ter+s 6!llied ,ro8era(e Corp. v. Co++issioner of Custo+s, %-2:6#1, #1 'C*! AAA
D19:1E/ Iui?ano, etc. v. D,5, %-26#19, 9A 'C*! 2:1 D19:1E7.
!nd, even if construction and interpretation of the law is insisted upon, followin( another
funda+ental rule that statutes are to be construed in the li(ht of purposes to be achieved and the
evils sou(ht to be re+edied 65eople v. 5urisi+a etc., et al., %-#21A1-66, 86 'C*! A## D19:8E, it will
be noted that the le(islature in a+endin( 'ection 191 of the Ta Code b. *epublic !ct 91:6, as
appearin( in the records, intended to provide incentives and induce+ents to bolster the shippin(
industr. and not the business of stevedorin(, as +anifested in the sponsorship speech of 'enator
Gil 5u.at 6*ollo, p. 267.
On anal.sis of petitioner-appellant>s transactions, the Court of Ta !ppeals found that no evidence
was adduced b. petitioner-appellant that tu(boats are passen(er andCor car(o vessels used in the
shippin( industr. as an independent business. On the contrar., petitioner-appellant>s own evidence
supports the view that it is en(a(ed as a stevedore, that is, the wor8 of unloadin( and loadin( of a
vessel in port/ and towin( of bar(es containin( car(oes is a part of petitioner>s underta8in( as a
stevedore. -n fact, even its trade na+e is indicative that its sole and principal business is stevedorin(
and li(htera(e, taed under 'ection 191 of the "ational -nternal *evenue Code as a contractor, and
not an entit. which transports passen(ers or frei(ht for hire which is taed under 'ection 192 of the
sa+e Code as a co++on carrier b. water 6Decision, CT! Case "o. 1#8#/ *ollo, p. 2A7.
3nder the circu+stances, there appears to be no plausible reason to disturb the findin(s and
conclusion of the Court of Ta !ppeals.
!s a +atter of principle, this Court will not set aside the conclusion reached b. an a(enc. such as
the Court of Ta !ppeals, which is, b. the ver. nature of its function, dedicated eclusivel. to the
stud. and consideration of ta proble+s and has necessaril. developed an epertise on the sub?ect
unless there has been an abuse or i+provident eercise of authorit. 6*e.es v. Co++issioner of
-nternal *evenue, 2# 'C*! 199 D1981E7, which is not present in the instant case.
5*=@-'=' CO"'-D=*=D, the instant petition is D-'@-''=D and the decision of the Court of Ta
!ppeals is !00-*@=D.
'O O*D=*=D.