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G.R. No. 106611 July 21, 1994

COMMISSIONER OF INTERNAL REVENUE, petitioner, vs.
COURT OF APPEALS, CITYTRUST BANKING CORPORATION and COURT
OF TAX APPEALS, respondents.

FACTS: Respondent corporation Citytrust filed a refund of tax overpayments with the
BIR by which the latter denied on the ground of prescription. Citytrust filed a petition for
review before the CTA. The case was submitted for decision based solely on the
pleadings and evidence submitted by the respondent because the CIR could not present
any evidence by reason of the repeated failure of the Tax Credit/Refud Division of the
BIR to transmit the records of the case, as well as the investigation report thereon, to the
Solicitor General. CTA rendered the decision ordering BIR to grant the respondent's
request for tax refund amounting to P 13,314,506.14.
ISSUE: Whether or not failure of the CIR to present evidence in a tax case to support the
government is sufficient ground to bar the latter from further assessment of tax
HELD: The Supreme Court remanded the case to the Court of Tax Appeals for further
proceedings, particularly the reception of evidence for the CIR. The Government is not
bound by the errors committed by its agents in the performance of its governmental
functions, the State cannot be estopped by the neglect of its agent and officers. Although
the Government may generally be estopped through the affirmative acts of public officers
acting within their authority, their neglect or omission of public duties as exemplified in
this
case
will
not
and
should
not
produce
that
effect.
Nowhere is the aforestated rule more true than in the field of taxation. It is axiomatic that
the Government cannot and must not be estopped particularly in matters involving taxes.
Taxes are the lifeblood of the nation through which the government agencies continue to
operate and with which the State effects its functions for the welfare of its constituents.
The errors of certain administrative officers should never be allowed to jeopardize the
Government's financial position, especially in the case at bar where the amount involves
millions of pesos the collection whereof, if justified, stands to be prejudiced just because
of bureaucratic lethargy. Thus, it is proper that the case be remanded back to the CTA for
further proceedings and reception of evidence.

[G.R. No. 112024. January 28, 1999]

PHILIPPINE BANK OF COMMUNICATIONS, petitioner, vs. COMMISSIONER
OF INTERNAL REVENUE, COURT OF TAX APPEALS and COURT OF
APPEALS, respondents.
FACTS: Petitioner banking corporation filed its quarterly income tax returns for the first
and second quarters of 1985, reported profits, and paid the total income tax of
P5,016,954.00. The taxes due were settled by applying PBCom's tax credit memos.
Subsequently, however, PBCom suffered losses so that when it filed its Annual Income
Tax Returns for the year-ended December 31, 1986, the petitioner likewise reported a net
loss and thus declared no tax payable for the year. But during these two years, PBCom
earned rental income from leased properties. Subsequently, Petitioner requested the
Commissioner of Internal Revenue, among others, for a tax credit of P5,016,954.00
representing the overpayment of taxes in the first and second quarters of 1985.
Thereafter, petitioner filed a claim for refund of creditable taxes withheld by their lessees.
Pending investigation of the CIR, petitioner instituted a Petition for Review on November
18, 1988 before the Court of Tax Appeals (CTA).
The CTA rendered a decision which, as stated on the outset, denied the request of
petitioner for a tax refund or credit in the sum amount of P5,299,749.95, on the ground
that it was filed beyond the two-year reglementary period provided for by law. The
petitioner's claim for refund in 1986 amounting to P234,077.69 was likewise denied on
the assumption that it was automatically credited by PBCom against its tax payment in
the succeeding year.
ISSUE: Whether the Court of Appeals erred in denying the plea for tax refund or tax
credits on the ground of prescription
HELD: No. Basic is the principle that "taxes are the lifeblood of the nation." The primary
purpose is to generate funds for the State to finance the needs of the citizenry and to
advance the common weal. 13 Due process of law under the Constitution does not require
judicial proceedings in tax cases. This must necessarily be so because it is upon taxation
that the government chiefly relies to obtain the means to carry on its operations and it is
of utmost importance that the modes adopted to enforce the collection of taxes levied
should be summary and interfered with as little as possible.
From the same perspective, claims for refund or tax credit should be exercised within the
time fixed by law because the BIR being an administrative body enforced to collect taxes,
its functions should not be unduly delayed or hampered by incidental matters.

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BENJAMIN P. GOMEZ, petitioner-appellee,

vs.
ENRICO PALOMAR, in his capacity as Postmaster General, HON. BRIGIDO R.
VALENCIA, in his capacity as Secretary of Public Works and Communications, and
DOMINGO GOPEZ, in his capacity as Acting Postmaster of San Fernando,
Pampanga, respondent-appellants.
FACTS: Petitioner Benjamin Gomez mailed a letter at the post office in San Fernando,
Pampanga. It did not bear the special anti-TB stamp required by the RA 1635. It was
returned to the petitioner. Petitioner now assails the constitutionality of the statute
claiming that RA 1635 otherwise known as the Anti-TB Stamp law is violative of the
equal protection clause because it constitutes mail users into a class for the purpose of the
tax while leaving untaxed the rest of the population and that even among postal patrons
the statute discriminatorily grants exemptions. The petitioner further argues that the tax in
question is invalid, first, because it is not levied for a public purpose as no special
benefits accrue to mail users as taxpayers, and second, because it violates the rule of
uniformity in taxation.
ISSUE: WON there was a valid exercise of taxing power through RA 1635
The Supreme Court dismissed the complaint. By public purpose, the taxpayer is
constitutionally entitled is that derived from his enjoyment of the privileges of living in
an organized society, established and safeguarded by the devotion of taxes to public
purposes. Any other view would preclude the levying of taxes except as they are used to
compensate for the burden on those who pay them and would involve the abandonment
of the most fundamental principle of government that it exists primarily to provide for
the common good.15
The rule of uniformity and equality of taxation infringed by the imposition of a flat rate
rather than a graduated tax. A tax need not be measured by the weight of the mail or the
extent of the service rendered. Considerations of administrative convenience and cost
afford an adequate ground for classification. The same considerations may induce the
legislature to impose a flat tax which in effect is a charge for the transaction, operating
equally on all persons within the class regardless of the amount involved.

G.R. No. L-41631 December 17, 1976

HON. RAMON D. BAGATSING, as Mayor of the City of Manila; ROMAN G.
GARGANTIEL, as Secretary to the Mayor; THE MARKET ADMINISTRATOR;
and THE MUNICIPAL BOARD OF MANILA, petitioners,
vs.
HON. PEDRO A. RAMIREZ, in his capacity as Presiding Judge of the Court of
First Instance of Manila, Branch XXX and the FEDERATION OF MANILA
MARKET VENDORS, INC., respondents.
FACTS:
The Municipal Board of Manila enacted Ordinance No. 7522, An Ordinance Regulating
the Operation of Public Markets and Prescribing Fees for the Rentals of Stalls and
Providing Penalties for Violation thereof and for other Purposes. Respondent were
seeking the declaration of nullity of the Ordinance for the reason that a) the publication
requirement under the Revised Charter of the City of Manila has not been complied with,
b) the Market Committee was not given any participation in the enactment, c) Sec. 3(e) of
the Anti-Graft and Corrupt Practices Act has been violated, and d) the ordinance would
violate P.D. 7 prescribing the collection of fees and charges on livestock and animal
products.
ISSUE:
What law shall govern the publication of tax ordinance enacted by the Municipal Board
of Manila, the Revised City Charter or the Local Tax Code.
HELD:
The fact that one is a special law and the other a general law creates the presumption that
the special law is to be considered an exception to the general. The Revised Charter of
Manila speaks of ordinance in general whereas the Local Tax Code relates to
ordinances levying or imposing taxes, fees or other charges in particular. In regard
therefore, the Local Tax Code controls.

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G.R. No. 51593 November 5, 1992

NATIONAL DEVELOPMENT COMPANY, plaintiff-appellee,
vs. CEBU CITY and AUGUSTO PACIS as Treasurer of Cebu City, defendantappellants
G.R. No. L-29646 November 10, 1978
MAYOR ANTONIO J. VILLEGAS, petitioner,
vs.
HIU CHIONG TSAI PAO HO and JUDGE FRANCISCO ARCA, respondents.
FACTS: This is a petition for certiorari to review the decision respondent Judge
Francisco Arca of the Court of First Instance of Manila declaring Ordinance No. 6 37 of
the City of Manila null and void. Section 1 of said Ordinance No. 6537 4 prohibits aliens
from being employed or to engage or participate in any position or occupation or business
enumerated therein, whether permanent, temporary or casual, without first securing an
employment permit from the Mayor of Manila and paying the permit fee of P50.00,
subject to exceptions.
ISSUE: Whether or not rule on uniformity of taxation may be used as grounds in
declaring Ordinance No. 6537 null and void
HELD:
The SC reaffirmed the decision of the CFI. The contention that Ordinance No. 6537 is
not a purely tax or revenue measure because its principal purpose is regulatory in nature
has no merit. While it is true that the first part which requires that the alien shall secure
an employment permit from the Mayor involves the exercise of discretion and judgment
in the processing and approval or disapproval of applications for employment permits and
therefore is regulatory in character the second part which requires the payment of P50.00
as employee's fee is not regulatory but a revenue measure. The P50.00 fee is
unreasonable not only because it is excessive but because it fails to consider valid
substantial differences in situation among individual aliens who are required to pay it.

FACTS: Petitioner National Development Company (NDC), a government-owned or

controlled corporation (GOCC) existing by virtue of C.A. 182 and E.O. 399, is authorized
to engage in commercial, industrial, mining, agricultural and other enterprises necessary
or contributory to economic development or important to public interest. On 20 March
1970, NDC wrote the City Assessor demanding full refund of the real estate taxes paid
to CEBU claiming that the land and the warehouse standing thereon belonged to the
Republic and therefore exempt from taxation. CEBU did not acquiesce in the demand,
hence, the present suit filed 25 October 1972 in the Court of First Instance of Manila.
ISSUE:Is a public land reserved by the President for warehousing purposes in favor of a
government-owned or controlled corporation, as well as the warehouse subsequently
erected thereon, exempt from real property tax?
HELD: The National Development Company (NDC) is exempt from real estate tax on
the reserved land but liable for the warehouse erected thereon. A reserved land is defined
as a "[p]ublic land that has been withheld or kept back from sale or disposition."
The land remains "absolute property of the government." The government "does not part
with its title by reserving them (lands), but simply gives notice to all the world that it
desires them for a certain purpose." the warehouse constructed on a public reservation, a
different rule should apply because "[t]he exemption of public property from taxation
does not extend to improvements on the public lands made by pre-emptioners,
homesteaders and other claimants, or occupants, at their own expense, and these
are taxable by the state . . ." Consequently, the warehouse constructed on the reserved
land by NWC (now under administration by NDC), indeed, should properly be
assessed real estate tax as such improvement does not appear to belong to the Republic.