G.R. No. 179085 January 21, 2010 Facts: Petitioner was assessed for deficiency Value dded !a" and #ocu$entary %ta$& !a" on t'e &re$ise t'at, for t'e Value dded !a", it was en(a(ed in t'e sale of ser)ices. Issues: *'et'er or not t'e Petitioner is lia+le for t'e Value dded !a", *'et'er or not t'e i$&osition of surc'ar(e and interest +e wai)ed on t'e i$&osition of deficiency #ocu$entary %ta$& !a", Ruling: N-. %ince Petitioner is considered a non.+an/ financial inter$ediary, it is su+0ect to 101 V! for t'e ta" years 1992 to 2002 +ut since t'e collection of Value dded !a" fro$ non.+an/ financial inter$ediaries was s&ecifically deferred +y law, Petitioner is not lia+le for Value dded !a" durin( t'ese ta" years. *it' t'e full i$&le$entation of t'e Value dded !a" syste$ on non.+an/ financial inter$ediaries startin( January 1, 2003, Petitioner is lia+le for 101 Value dded !a" for said ta" year. nd +e(innin( 2004 u& to t'e &resent, +y )irtue of R.. No. 9238, &etitioner is no lon(er lia+le for V! +ut it is su+0ect to &ercenta(e ta" on (ross recei&ts fro$ 01 to 51, as t'e case $ay +e. 56%. Petitioner7s ar(u$ent a(ainst lia+ility for surc'ar(es and interest t'at it was in (ood fait' in not &ayin( docu$entary sta$& ta"es, it 'a)in( relied on t'e rulin(s of res&ondent 89R and t'e 8! t'at &awn tic/ets are not su+0ect to docu$entary sta$& ta"es : was found to +e $eritorious. Good fait' and 'onest +elief t'at one is not su+0ect to ta" on t'e +asis of &re)ious inter&retations of (o)ern$ent a(encies tas/ed to i$&le$ent t'e ta" law are sufficient 0ustification to delete t'e i$&osition of surc'ar(es and interest. National Power Corporation v. Province of Queon an! "unicipalit# of Pagbilao G.R. No. 171582 January 25, 2010 Facts: !'e Pro)ince of ;ue<on assessed =irant Pa(+ilao 8or&oration>=irant? for un&aid real &ro&erty ta"es in t'e a$ount of P1.5@illion for t'e $ac'ineries located in its &ower &lant in Pa(+ilao, ;ue<on. Na&ocor, w'ic' entered into a @uild.-&erate.!ransfer >@-!? (ree$ent >entitled 6ner(y 8on)ersion (ree$ent? wit' =irant, was furnis'ed a co&y of t'e ta" assess$ent. Na&ocor >nota bene, not =irant? &rotested t'e assess$ent+efore t'e Aocal @oard of ssess$ent &&eals >A@?, clai$in( entitle$ent to t'e ta$ e$emptions &ro)ided under %ection 234of t'e Aocal Go)ern$ent 8ode. nd assu$in( t'at it cannot clai$ t'e said ta" e"e$&tions, Na&ocor ar(ued t'at it is entitled to certain ta$ privileges.
!o &ro)e t'at it 'ad le(al interest in t'e ta"ed $ac'ineries, Na&ocor relied onB 1. t'e sti&ulation in t'e @-! (ree$ent t'at aut'ori<ed t'e transfer of owners'i& to Na&ocor after 25 yearsC 2. its aut'ority to control and su&er)ise t'e construction and o&eration of t'e &ower &lantC and 3. its o+li(ation to &ay for all ta"es t'at $ay +e incurred, as &ro)ided in t'e @-! (ree$ent.
Issues: *'et'er or not t'e &etitioner can file t'e &rotest a(ainst t'e real &ro&erty ta" assess$ent, *'et'er or not t'e Petitioner can clai$ e"e$&tion fro$ t'e RP! (i)en t'e @-! arran(e$ent wit' =irant, *'et'er or not t'e &ay$ent under &rotest reDuired +efore an a&&eal to t'e A@ is $ade, %&'(: N-. !'e two entities )ested wit' &ersonality to contest an assess$ent are >a? t'e owner or >+? t'e &erson wit' le(al interest in t'e &ro&erty. NP8 is neit'er t'e owner nor t'e &ossessorEuser of t'e su+0ect $ac'ineries e)en if it will acDuire owners'i& of t'e &lant at t'e end of 25 years. !'e 8ourt said t'at le(al interest s'ould +e an interest t'at is actual and $aterial, direct and i$$ediate, not si$&ly contin(ent or e"&ectant. *'ile t'e Petitioner does indeed assu$e res&onsi+ility for t'e ta"es due on t'e &ower &lant and its $ac'ineries, t'e ta" lia+ility referred to is t'e lia+ility arisin( fro$ law t'at t'e local (o)ern$ent unit can ri('tfully and successfully enforce, not t'e contractual lia+ility t'at is enforcea+le +etween t'e &arties to a contract. !'e local (o)ern$ent units can neit'er +e co$&elled to reco(ni<e t'e &rotest of a ta" assess$ent fro$ t'e Petitioner, an entity a(ainst w'o$ it cannot enforce t'e ta" lia+ility. !'e AG8 &ro)ides t'at $ere &ecuniary interest is not sufficientC our law 'as reDuired le(al interest in t'e &ro&erty ta"ed +efore any ad$inistrati)e or 0udicial re$edy can +e a)ailed. !'e ri('t to a&&eal a ta" assess$ent is a &urely statutory ri('tC w'et'er a &erson c'allen(in( an assess$ent +ears suc' a relation to t'e real &ro&erty +ein( assessed as to entitle 'i$ t'e ri('t to a&&eal is deter$ined +y t'e a&&lica+le statute in t'is case, our own AG8, not F% federal or state ta" laws. N-. !o successfully clai$ e"e$&tion under %ection 234 >c? of t'e AG8, t'e clai$ant $ust &ro)e two ele$entsB a? t'e $ac'ineries and eDui&$ent are actually, directly, and e"clusi)ely used +y local water districts and (o)ern$ent. owned or controlled cor&orationsC and +? t'e local water districts and (o)ern$ent.owned and controlled cor&orations clai$in( e"e$&tion $ust +e en(a(ed in t'e su&&ly and distri+ution of water andEor t'e (eneration and trans$ission of electric &ower. Ga)in( failed to co$&ly wit' +ot' reDuire$ents, t'e clai$ for e"e$&tion $ust fall. 56%. 9f a ta"&ayer dis&utes t'e reasona+leness of an increase in a real &ro&erty ta" assess$ent, 'e is reDuired to Hfirst &ay t'e ta"H under &rotest. !'e case of !y does not a&&ly as it in)ol)ed a situation w'ere t'e ta"&ayer was Duestionin( t'e )ery aut'ority and &ower of t'e assessor, actin( solely and inde&endently, to i$&ose t'e assess$ent and of t'e treasurer to collect t'e ta". clai$ for ta" e"e$&tion, w'et'er full or &artial, does not Duestion t'e aut'ority of local assessors to assess real &ro&erty ta". !'e local assessor 'as t'e aut'ority to assess t'e &ro&erty for realty ta"es, and any su+seDuent clai$ for e"e$&tion s'all +e allowed only w'en sufficient &roof 'as +een adduced su&&ortin( t'e clai$. %ince Na&ocor was si$&ly Duestionin( t'e correctness of t'e assess$ent, it s'ould 'a)e first co$&lied wit' %ection252, &articularly t'e reDuire$ent of &ay$ent under &rotest. Na&ocorIs failure to &ro)e t'at t'is reDuire$ent 'as +een co$&lied wit' t'us renders its ad$inistrati)e &rotest under %ection 222 of t'e AG8 wit'out any effect. No &rotest s'all +een entertained unless t'e ta"&ayer first &ays t'e ta". (ia v. )ecretar# of Finance *.R. No. +,-../ July 19, 2011
Facts: Petitioners Renato V. Diaz and Aurora Ma. F. Timbol (petitioners) filed this petition for declaratory relief assailin the !alidity of the impendin imposition of !alue"added ta# (VAT) by the $ureau of %nternal Re!enue ($%R) on the collections of toll&ay operators. 'ourt treated the case as one of prohibition. Petitioners hold the !ie& that 'onress did not( &hen it enacted the )%R'( intend to include toll fees &ithin the meanin of *sale of ser!ices* that are sub+ect to VAT, that a toll fee is a *user-s ta#(* not asale of ser!ices, that to impose VAT on toll fees &ould amount to a ta# on public ser!ice, and that( since VAT &as ne!er factored into the formula for computin toll fees( its imposition &ould !iolate the non"impairment clause of the constitution .The o!ernment a!ers that the )%R' imposes VAT on all .inds of ser!ices of franchise rantees( includin toll &ay operations, that the 'ourt should see. the meanin and intent of the la& from the &ords used in the statute, and that the imposition of VAT on toll &ay operations has been the sub+ect as early as /001 of se!eral $%R rulins and circulars. The o!ernment also arues that petitioners ha!e no riht to in!o.e the non"impairment of contracts clause since they clearly ha!e no personal interest in e#istin toll operatin areements (T2As) bet&een the o!ernment and toll &ay operators. At any rate( the non"impairment clause cannot limit the 3tate-s so!erein ta#in po&er &hich is enerally read into contracts. Issue: *'et'er of not toll fees collected +y toll way o&erators +e su+0ect to V!, Ruling: YES. VAT is imposed on all kinds of services and toll way operators who are engaged in constructing maintaining and operating e!pressways are no different from lessors of property transportation contractors etc. Not only do t'ey fall under t'e +road ter$ under >1? +ut also co$e under t'ose descri+ed as Jall ot'er franc'ise (ranteesK w'ic' is not confined only to le(islati)e franc'ise (rantees since t'e law does not distin(uis'. !'ey are also not a franc'ise (rantee under %ection 119 w'ic' would 'a)e $ade t'e$ su+0ect to &ercenta(e ta" and not V!. Neit'er are t'e ser)ices &art of t'e enu$eration under %ection 109 on V!.e"e$&t transactions. !'e toll fee is not a userIs ta" and t'us it is &er$issi+le to i$&ose a V! on t'e said fee. !'e =9 case does not a&&ly and t'e 8ourt e$&'asi<ed t'at toll fees are not ta"es since t'ey are not assessed +y t'e @9R and do not (o t'e (eneral coffers of t'e (o)ern$ent. !oll fees are collected +y &ri)ate o&erators as rei$+urse$ent for t'eir costs and e"&enses wit' a )iew to a &rofit w'ile ta"es are i$&osed +y t'e (o)ern$ent as an attri+ute of its so)erei(nty. 6)en if t'e toll fees were treated as userIs ta", t'e V! can not +e dee$ed as a Lta" on ta"I since t'e V! is i$&osed on t'e toll way o&erator and t'e fact t'at it $i('t &ass. on t'e sa$e to t'e toll way user, it will not $a/e t'e latter directly lia+le for V! since t'e s'ifted V! si$&ly +eco$es &art of t'e cost to use t'e toll ways. !'e assertion t'at t'e V! i$&osed is not ad$inistrati)ely feasi+le (i)en t'e $anner +y w'ic' t'e @9R intends to i$&le$ent t'e V! >i.e., roundin( off t'e toll rates and &uttin( any e"cess collection in an escrow account? is not enou(' to in)alidate t'e law. Non.o+ser)ance of t'e canon of ad$inistrati)e feasi+ility will not render a ta" i$&osition in)alid Je"ce&t to t'e e"tent t'at s&ecific constitutional or statutory li$itations are i$&airedK. 8-==9%%9-N6R -M 9N!6RNA R6V6NF6 V%. %= PR9=6 G-A#9NG%, 9N8. *.R. No. +/01,/ No)e$+er 17, 2010 9%%F6B re t'e (ross recei&ts deri)ed +y o&erators or &ro&rietors of cine$aEt'eater 'ouses fro$ ad$ission tic/ets su+0ect to V!, G6A#B N-. *'ile >1? t'e enu$eration under %ection 108 on t'e V!.ta"a+le ser)ices is not e"'austi)e and >2? t'e said list includes Jt'e lease of $otion &icture fil$s, fil$s, ta&es and discsK, t'e said acti)ity 'owe)er is not t'e sa$e as s'owin( or e"'i+ition of $otion &ictures or fil$s. !'us, since t'e s'owin( or e"'i+ition of $otion &ictures or fil$s is not in t'e enu$eration, t'e 89R $ust s'ow t'at it falls under t'e &'rase Jsi$ilar ser)icesK. !'e re&eal of t'e Aocal !a" 8ode +y t'e AG8 of 1991 is not a le(al +asis for t'e i$&osition of V! on t'e (ross recei&ts of cine$aEt'eater o&erators or &ro&rietors deri)ed fro$ ad$ission tic/ets. !'e re$o)al of t'e &ro'i+ition >on t'e national (o)ern$ent to ta" certain acti)ities? under t'e Aocal !a" 8ode did not (rant nor restore to t'e national (o)ern$ent t'e &ower to i$&ose a$use$ent ta" on cine$aEt'eater o&erators or &ro&rietors. Neit'er did it e"&and t'e co)era(e of V!.