UPDATES ON CERTAIN LEGISLATIONS AND JURISPRUDENCE IN TAXATION ON

NOVEMBER 9, 2008

BY: ATTY. DAN A. MACATANGAY, CPA

1. INTRODUCTION

1.1 GENERAL PRINCIPLES

1.2 FRAMEWORK OF TAXATION

2. LEGISLATIONS/REVENUE REGULATIONS

2.1 REPUBLIC ACT NO. 9504, AN ACT AMENDING SECTIONS 24, 25, 34, 35, 51 AND
79 OF THE TAX CODE RELATIVE TO WITHHOLDING ON COMPENSATION INCOME
AND OTHER CONCERNS; [Personal, Additional & Standard Deduction increased to P50K,
P25K and 40%, respectively.]

2.2 REVENUE REGULATIONS NO. 10-2008 IMPLEMENTING R.A. NO. 9504

2.3 REVENUE REGULATIONS NO. 6-2008 CONSOLIDATED REGULATIONS ON SALE

OF SHARES CLASSIFIED AS CAPITAL ASSETS

2.4 REVENUE REGULATIONS NO. 4-2007, AMENDING R.R. NO. 16-2005 – VAT
REVENUE REGULATIONS

3 JURISPRUDENCE

3.1 CIR v Isabela Cultural Corp GR 17223 TD Feb 12, 2007 – All-Events Test applied in
recognizing income or liability under accrual method of accounting. Expenses incurred in prior
year cannot be claimed as expense in another. For a taxpayer using the accrual method, the
determinative question is, when do the facts present themselves in such a manner that the
taxpayer must recognize income or expense? The accrual of income and expense is permitted
when the all-events test has been met. This test requires: (1) fixing of a right to income or
liability to pay; and (2) the availability of the reasonable accurate determination of such income
or liability.

3.2 Philex Mining v CIR GR 148187 Apr 16, 2008 - Power of Attorney for operation of
mining claims deemed partnership; write off of bad debts not warranted; it was investment thus
not debt; alleged debtor has not filed for bankruptcy; assumed guaranteed obligations were not
yet due.

3.3 CIR v General Foods, 401 SCRA 545. - Advertising expenses are period costs deductible
in the year incurred or paid. However, they may be considered capital expenditures if so
substantial in promoting a single brand.

3.4 M.E. Holding Corp v CA, CTA & CIR GR 163193, Mar 3, 2008 – 20% Senior Citizens
Discount is a tax credit deductible from tax liability; Note: On February 26, 2004, RA 9257, or
The Expanded Senior Citizens Act of 2003, amending RA 7432, was signed into law, ushering
in, upon its effectivity on March 21, 2004, a new tax treatment for this discount from tax credit
to tax deduction].

3.5 PLDT v CIR GR 157264 Jan 31, 2008 – Separation pay due to redundancy. Proof of
receipt by employees of the pay and the remittance of the withholding tax to the BIR are
material to the claim for refund of erroneously paid withholding tax on separation pay. Also, it
must be shown that employees declared the income and the tax paid to the BIR through
withholding. Rules on presenting voluminous documents in CTA also discussed.

3.6 Carmelino Pansacola v CIR, GR 159991, Nov 16, 2006 – Effectivity of the increased
personal exemptions - In Umali v Estanislao, GR 104037 & 104069, May 29, 1992, 209 SCRA
446, we noted that despite being given authority by Section 29 (1) (4) of the National Internal
Revenue Code of 1977 to adjust these exemptions, no adjustments were made to cover 1989.
Note that Rep. Act No. 7167 is entitled “An Act Adjusting the Basic Personal and Additional
Exemptions Allowable to Individuals for Income Tax Purposes to the Poverty Threshold Level,
Amending for the Purpose Section 29, Paragraph (L), Items (1) and (2) (A), of the National
Internal Revenue Code, As Amended, and For Other Purposes.” Thus, we said in Umali, that
the adjustment provided by Rep. Act No. 7167 effective 1992, should consider the poverty
threshold level in 1991, the time it was enacted. And we observed therein that since the
exemptions would especially benefit lower and middle-income taxpayers, the exemption should
be made to cover the past year 1991. To such an extent, Rep. Act No. 7167 was a social
legislation intended to remedy the non-adjustment in 1989. And as cited in Umali, this
legislative intent is also clear in the records of the House of Representatives’ Journal. This is
not so in the case at bar. There is nothing in the NIRC that expresses any such intent. The
policy declarations in its enactment do not indicate it was a social legislation that adjusted
personal and additional exemptions according to the poverty threshold level nor is there any
indication that its application should retroact. At the time petitioner filed his 1997 return and
paid the tax due thereon in April 1998, the increased amounts of personal and additional
exemptions in Section 35 were not yet available. It has not yet accrued as of December 31,
1997, the last day of his taxable year. Petitioner’s taxable income covers his income for the
calendar year 1997. The law cannot be given retroactive effect. It is established that tax laws
are prospective in application, unless it is expressly provided to apply retroactively. In the
NIRC, we note, there is no specific mention that the increased amounts of personal and
additional exemptions under Section 35 shall be given retroactive effect. Conformably too,
personal and additional exemptions are considered as deductions from gross income.
Deductions for income tax purposes partake of the nature of tax exemptions, hence strictly
construed against the taxpayer and cannot be allowed unless granted in the most explicit and
categorical language too plain to be mistaken.They cannot be extended by mere implication or
inference. And, where a provision of law speaks categorically, the need for interpretation is
obviated, no plausible pretense being entertained to justify non-compliance. All that has to be
done is to apply it in every case that falls within its terms. Note: RA 9504 took effect in July
2008 increased personal exemptions regardless of status to uniform amount of P50K.
Additional exemption is increased to P25K. The issue is whether it should retroact to Jan 2008,

3.7 CIR v Meralco, GR 121666 Oct 10, 2007 – Filing of ITR with excess payment applied for
credit and refund; proof required: inclusion of income and fact of withholding; Quarterly &
Final Adjusted ITR together with proof of payments; accountant testified on the documents and
there was no cross or objection to offer of evidence; no need prove each and every item in the
return since the CIR can still examine the return with 3 years from filing of ITR. Findings of
fact of CA and CTA respected by the SC. Note the amendment to the law applied in this case
under 1986 NIRC v 1997 NIRC provisions.

3.8 State Land Investment Corp v CIR 171956 Jan 18, 2008 – Excess creditable tax may be
refunded or credited at the option of the taxpayer under former Sec 69, now Sec 76. Under then
Sec 69 excess taxes may be credited vs the following year only, after that need to be claimed for
refund within two years from payment which SIC did. MR filed with CTA included 1999 &
2000 ITRs showing losses, thus 1997 excess tax credit could have not been applied in 1999.
Doctrines: SC is not trier of facts but if lower court mis-appreciated facts or failed to notice
facts tht could change conclusion then it can review facts. Solutio indebiti applied vs
government. Refund granted. Note: counting of 2 years starts from filing of final return.

3.9 CIR V. ROSEMARIE ACOSTA AUG 2007 SC CASE – Requirement to file claim for
refund with BIR before going to CTA under old and new NIRC
3.10 Rafael Dizon v CTA & BIR, GR 140944, Apr 30, 2008, SC held that the value of
the claims against the estate as of the date of death was the amount deductible from gross estate
even if said claims had been reduced thereafter due to compromise.

3.11 CIR v Mirant Pagbiao Corp GR172129 Sep 12, 2008 Sale of power by Mirant to
NPC is subject to zero rate VAT because NPC is exempt both to direct and indirect tax. Excess
input tax of Mirant can be claimed for refund or credit with 2 years from close of the taxable
quarter when the sale was made under Sec 112(A) of the NIRC and not from date of payment
under Sec 204 and 229 of the NIRC. Since the input tax was belatedly paid beyond the two year
period, the claim for refund was denied on the ground of prescription.

3.12 Atlas Mining Consolidated v CIR, GR 14104 & 148763, Jun 8, 2007 – Key
issues: (1) prescription of the claims of petitioner corporation for input VAT refund/credit; (2)
validity and applicability of Revenue Regulations No. 2-88 imposing upon petitioner
corporation, as a requirement for the VAT zero-rating of its sales, the burden of proving that the
buyer companies were not just BOI-registered but also exporting 70% of their total annual
production; (3) sufficiency of evidence presented by petitioner corporation to establish that it is
indeed entitled to input VAT refund/credit; and (4) legal ground for granting the motion of
petitioner corporation for re-opening of its cases or holding of new trial before the CTA so it
could be given the opportunity to present the required evidence.

3.13 CIR v Primetown Realty, GR 161155 Aug 28, 2007 – Counting of 2-year period
for filing claim for refund is no longer in accordance with Art 13 of the Civil Code but under
Sec 31 of EO 227 - The Administrative Code of 1987. In the case at bar, there are 24 calendar
months in 2 years. For a Final Corporate ITR filed on Apr 14, 1998, the counting should start
from Apr 15, 1998 and end on Apr 14, 2000. The procedure is 1 month - Apr 15, 1998 to May
st

14, 1998 …. 24 month - Mar 15, 2000 to Apr 14, 2000. National Marketing v. Tecson, 139
th

Phil 584 (1969) is no longer controlling. The 2-year period should start to run from filing of the
final adjusted return.

3.14 CIR v Bursmeiters & Wain Scandinavian, GR 153205, Jan 2007) While the
government is not bound by the error of its agent in issuing a ruling, in the interest of justice
and fair play, reversal of ruling may not be given retro effect (CIR v Benguet Corp, 463 SCRA
28 (2005);

3.15 International Exchange Bank v CIR GR 171266 Apr 4, 2007 - Is a Savings

Account-Fixed Savings Deposit (FSD) evidenced by a passbook issued by International
Exchange Bank (petitioner) subject to documentary stamp tax (DST) for the years 1996 and
1997? Yes.
3.16 Antam Pawnshop v CIR GR 167962 Sep 19, 2008. Are pawnshop tickets subject to
DST? Yes. Considering that the pawn ticket issued by the pawnshop should contain the
foregoing, the pawn ticket is evidently a proof of a contract of pledge. We agree with petitioner
that the law does not consider the pawn ticket as a security nor a printed evidence of
indebtedness. However, what is subject to DST is not the ticket itself but the privilege of
entering into a contract of pledge. A documentary stamp tax is in the nature of an excise tax. It
is not imposed upon the business transacted but is an excise upon the privilege, opportunity or
facility offered at exchanges for the transaction of the business. It is an excise upon the
facilities used in the transaction of the business separate and apart from the business itself. In
general, documentary stamp taxes are levied on the exercise by persons of certain privileges
conferred by law for the creation, revision, or termination of specific legal relationships through
the execution of specific instruments. Examples of such privileges, the exercise of which, as
effected through the issuance of particular documents, are subject to the payment of
documentary stamp taxes are leases of lands, mortgages, pledges, and trusts and conveyances of
real property

3.17 BPI v CIR GR 137736, Oct 17, 2005 – Whether collection is barred by
prescription? What are the statutory and doctrinal exceptions to statute of limitations? When
does a request for reinvestigation suspends the running of the period? Read also the Wyett
Suaco and Suyoc cases cited therein.

3.18 [BPI v CIR GR 174942, Mar 7, 2008]- In order to suspend the running of the
prescriptive periods for assessment and collection, the request for reinvestigation must be
granted by the CIR.

3.19 CIR v Benigno Toda, 438 SCRA 290 (2004) - meaning of fraud; tax
avoidance/evasion; tax planning exercise declared as tax evasion.

3.20 CIR v Dominador Menguito GR 167560 Sep 17, 2008 – Corporation and Single
Proprietorship bearing similar names and owned by spouses considered as one the same
taxpayer based on overwhelming evidence that taxpayer treated and admitted them as one; post-
reporting and pre-assessment notice while required before a formal assessment is issued, the
absence of the former is not grave error as to deprive due process.

3.21Fitness by Design v CIR GR 177982 Oct 17, 2008 – Petitioner was assessed for
deficiency Inc Tax, VAT & DST for the year 1995 in 2004. It protested on the ground that it
was barred by the 3-year prescription under Sec 205. However the BIR invoked Sec 222(a)
alleging that the return filed was fraudulent thus an exception to the 3-year period. Thereafter,
the CIR issued a warrant of Distraint and Levy. Thus, Petitioner went to the CTA on the issues
of prescription and fraud and, where it moved for issuance of Subpeona Testeficandum and
interrogatories addressed to revenue officers and the informer who allegedly obtained records
from the Petitioner and submitted to BIR, but the CTA denied on the ground that it is irrelevant
to the issue and that it would violate RA 2338 (secrecy of informant). A criminal case was also
filed against the officers and accountant of Petitioner. Issue: 1. Whether CTA abused its
discretion in denying petitioner’s motion. – No, said the SC. There was no grave abuse of
discretion since the matters sought were not relevant and some of them ware available in the
records. The purpose of petitioner was to establish that informer illegally obtained documents.
2. Whether documents illegally obtained from petitioner can be used as evidence against it –
Yes, Petitioner’s lack of consent does not, however, imply that the BIR obtained them illegally
or that the information received is false or malicious. Nor does the lack of consent preclude the
BIR from assessing deficiency taxes on petitioner based on the documents pursuant to Sec 5 of
the NIRC granting CIR to obtain information, documents, etc. The law thus allows the BIR
access to all relevant or material records and data in the person of the taxpayer, and the BIR can
accept documents, which cannot be admitted in a judicial proceeding where the Rules of Court
are strictly observed. (See Hantex Case) To require the consent of the taxpayer would defeat the
intent of the law to help the BIR assess and collect the correct amount of taxes. 3. Whether
petitioner can invoke its right to cross examine witnesses against it – No. Petitioner’s invocation
of the rights of an accused in a criminal prosecution to cross examine the witness against him
and to have compulsory process issued to secure the attendance of witnesses and the production
of other evidence in his behalf does not lie. CTA Case No. 7160 is not a criminal prosecution,
and even granting that it is related to I.S. No. 2005-203, the respondents in the latter proceeding
are the officers and accountant of petitioner-corporation, not petitioner. From the complaint
and supporting affidavits in I.S. No. 2005-203, informer does not even appear to be a witness
against the respondents therein.

3.22 Pilipinas Shell v Rep of Phils (BOC) GR 161953, Mar 6, 2008 – In 1997 and 1998
Pilipinas Shell paid duties and taxes due on its importations with the TCCs it acquired from
various sources with the approval of the BOI, One Stop Shop and DOF. Subsequently, these
were cancelled allegedly because they were acquired fraudulently and the BOC demanded
payment of the duties and taxes paid with these TCCs. Shell protested on Dec 23, 1999 but
BOC did not act, hence the appeal to CTA. While pending, on Apr 3, 2002 BOC filed a
collection case with RTC with respect to a TCC on the ground that it was spurious and thus was
invalidated. Shell moved to dismiss questioning the jurisdiction of the RTC and stating that
only when the assessment has become final and executory could the BOC file a collection case
but was denied. CA denied appeal saying the demand for payment was not an assessment that
could be protested. thus RTC and not CTA has jurisdiction. Ruling: Assessments inform
taxpayers of their tax liabilities. Under the TCCP, the assessment is in the form of a liquidation
made on the face of the import entry return and approved by the Collector of Customs.
Liquidation is the final computation and ascertainment by the Collector of Customs of the
duties due on imported merchandise based on official reports as to the quantity, character and
value thereof, and the Collector of Customs' own finding as to the applicable rate of duty. A
liquidation is considered to have been made when the entry is officially stamped “liquidated.”
An assessment or liquidation by the BoC attains finality and conclusiveness one year from the
date of the final payment of duties except when: (a) there was fraud; (b) there is a pending
protest or (c) the liquidation of import entry was merely tentative. None of the foregoing
exceptions is present in this case. These duties and taxes are the personal liability of the
importer and they constitute a lien to the articles while in customs custody. RTC has jurisdiction
under old CTA Law. Note: Now CTA has exclusive original jurisdiction in collection cases for
P1 Million or more claims.;

3.23Chevron Phils v. Commissioner of Bureau of Customs, GR 178759, Aug 11, 2008 –

Effective date of reduction of tariff rate from 10% to 3% per RA 8180 (Apr 16, 1996) while
importations arrived in the Phils prior to Apr 16, 1996; Import Entry Declarations [IED] were
filed prior to said later date but the Import Entry Internal Revenue Declarations [IEIRD] were
filed after said date. Chevron paid customs duties at 3%. Three years later, an informer reported
the transactions and investigation conducted. The CBOC declared the importations abandoned
for failure to enter them within 30 days from unloading and issued assessments for more than
P1 Billion. Hence the appeal to CTA division which ruled that 10% applied per Sec 204, 205
and 1408; there was fraud but no abandonment. Both parties went to CTA en banc, which ruled
that there was abandonment because IEIRD was not filed within 30 days per Sec 1301 in rel
Sec 205, thus abandonment ensued per Sec 1801 and 1802; notice of abandonment per CMO
15-94 was not necessary because Chevron had knowledge; and agreed there was fraud for
failure file entry that was intended to avoid higher rate of duties. Issues: 1. whether “entry”
under Section 1301 in relation to Section 1801 of the TCC refers to the IED or the IEIRD?\ The
filing of the IEIRDs has several important purposes: to ascertain the value of the imported
articles, collect the correct and final amount of customs duties and avoid smuggling of goods
into the country. Entry refers to both. They must be filed within 30 days. 2. whether fraud was
perpetrated by petitioner? yes there was fraud. Fraud, in its general sense, is deemed to
comprise anything calculated to deceive, including all acts, omissions, and concealment
involving a breach of legal or equitable duty, trust or confidence justly reposed, resulting in the
damage to another, or by which an undue and unconscionable advantage is taken of another. It
is a question of fact and the circumstances constituting it must be alleged and proved in the
court below. The finding of the lower court as to the existence or non-existence of fraud is final
and cannot be reviewed here unless clearly shown to be erroneous. In this case, fraud was
established by the IPD-CIIS of the BOC. Both the CTA First Division and en banc agreed
completely with this finding. Chevron bided its time to avail of lower rate. Hence, due to the
presence of fraud, the one year prescriptive period of the finality of liquidation under Section
1603 was inapplicable and 3. whether the importations can be considered abandoned under
Section 1801. Yes, per Sec 1801 as amended by RA 7651. Notice was not necessary because
BOC learned of fraud after 3 years and importations had been released. Abandoned article ipso
facto deemed the property of the government per Sec 1802. This section cannot be questioned
as unconstitutional collaterally. Besides, there is clear intent to do away with seizure
proceedings in abandonment. Ordered to pay (P893,781,768.21) plus six percent (6%) legal
interest per annum accruing from the date of promulgation of this decision until its finality.
Upon finality of this decision, the sum so awarded shall bear interest at the rate of twelve
percent (12%) per annum until its full satisfaction.
3.24 AGFHA Inc. v CTA (EB) and CIR GR 172051 Jul 27, 2007 – Forfeiture
proceedings under Sec 2530(f)(1), (3-5) of TCCP [effect of loss of shipment in the custody of
customs on the liability of importer/owner]

3.25 Pilipinas Shell Petroleum Corp v CIR GR 172598 Dec 21, 2007 – Assessment of
deficiency excise tax after validly issued TCCs were subsequently cancelled for having been
issued fraudulently. Prescription based on fraud or omission in filing excise tax return
construed. Nature of TCCs and publication of MOA and other issuances requirement discussed.
Petition granted and assessment cancelled.

3.26 CIR v Fortune Tobacco - GR 167274 Jul 21, 2008 – Under Sec 145 of the NIRC,
the rates of excise tax on cigars and cigarettes under paragraphs (1), (2) (3) and (4) hereof, shall
be increased by twelve percent (12%) on January 1, 2000. On the other hand, Revenue
Regulations No. 17-99 in the last paragraph of Section 1 thereof, provides “(t)hat the new
specific tax rate for any existing brand of cigars, cigarettes packed by machine, distilled spirits,
wines and fermented liquor shall not be lower than the excise tax that is actually being paid
prior to January 1, 2000.” The RR was questioned. The SC ruled that the rule making power of
the CIR cannot override the law which it seeks to implement. RR adding a qualification in
increasing the excise tax on cigarettes is invalid since that qualification is not found in the law.

3.27British American Tobacco v Sec Camacho, etc. GR 163583 Aug 20, 2008 - Whether
Congress acted improvidently in derogating, to a limited extent, the state’s interest in promoting
fair competition among the players in the industry, while pursuing other state interests regarding
the simplification of tax administration of sin products, elimination of potential areas for abuse
and corruption in tax collection, buoyant and stable revenue generation, and ease of projection
of revenues through the classification freeze provision, and whether the questioned provision is
the best means to achieve these state interests, necessarily go into the wisdom of the assailed
law which we cannot inquire into, much less overrule. The classification freeze provision has
not been shown to be precipitated by a veiled attempt, or hostile attitude on the part of Congress
to unduly favor older brands over newer brands. On the contrary, we must reasonably assume,
owing to the respect due a co-equal branch of government and as revealed by the Congressional
deliberations, that the enactment of the questioned provision was impelled by an earnest desire
to improve the efficiency and effectivity of the tax administration of sin products. For as long
as the legislative classification is rationally related to furthering some legitimate state interest,
as here, the rational-basis test is satisfied and the constitutional challenge is perfunctorily
defeated.

3.28 SilkAir v CIR GR 173594, Feb 5, 2008 – Exemption under Sec 135(b) of the Tax
Code [on Excise Tax] does not include exemption from indirect taxes. Also, the Air Transport
Agreement between RP and Singapore does not include indirect tax. The property party here to
file claim for refund is the local company who sold air fuel.
3.29 Smart Communications v City of Davao GR 155491 Sep 16, 2008 – Smart is
subject to Franchise Tax imposed by the Tax Code of Davao City pursuant to Sec 137 and 151
of LGC despite the provision of its franchise that the franchise tax imposed therein is in” lieu of
all other taxes.” This phrase refers to national taxes and not to local taxes. Unlike in Globe’s
franchise which covers both national and local taxes. Note: Smart is now subject to VAT,
Income tax, local taxes and real property tax. VAT has replaced the Franchise Tax imposed
under Telecom franchises.

3.30Quezon City v ABS CBN Broadcasting GR 166408 Oct 6, 2008 – is the provision in its
franchise issued after the enactment of the LGC withdrawing exemptions that the 3% franchise
tax is lieu of all other taxes, except income, exempts it from the 3% franchise tax? The present
controversy essentially boils down to a dispute between the inherent taxing power of Congress
and the delegated authority to tax of local governments under the 1987 Constitution and
effected under the LGC of 1991. Congress has the inherent power to tax, which includes the
power to grant tax exemptions. On the other hand, the power of Quezon City to tax is
prescribed by Section 151 in relation to Section 137 of the LGC which expressly provides that
notwithstanding any exemption granted by any law or other special law, the City may impose a
franchise tax. It must be noted that Section 137 of the LGC does not prohibit grant of future
exemptions. As earlier discussed, this Court in City Government of Quezon City v. Bayan
Telecommunications, Inc. sustained the power of Congress to grant tax exemptions over and
above the power of the local government’s delegated power to tax. The more pertinent issue
now to consider is whether or not by passing R.A. No. 7966, which contains the “in lieu of all
taxes” provision, Congress intended to exempt ABS-CBN from local franchise tax. The basis
for the rule on strict construction to statutory provisions granting tax exemptions or deductions
is to minimize differential treatment and foster impartiality, fairness and equality of treatment
among taxpayers. In sum, ABS-CBN’s claims for exemption must fail on twin grounds. First,
the “in lieu of all taxes” clause in its franchise failed to specify the taxes the company is sought
to be exempted from. Neither did it particularize the jurisdiction from which the taxing power is
withheld. Second, the clause has become functus officio because as the law now stands, ABS-
CBN is no longer subject to a franchise tax. It is now liable for VAT.

3.31 Digitel Telecommunications Phis. v Prov of Pangasinan GR 152534 Feb

23, 2007 – Issues affecting exemption from franchise tax and real property tax under the LGC.

3.32 Petron Corp v Mayor Tobias Tiangco of Navotas, GR 158881 Apr 16, 2008,
where the issue is whether sale of petroleum products may be subject to business taxes under
Navotas tax ordinance issued pursuant to Sec 143 of LGC or is it exempt under Sec 133(h) of
LGC and Art 232(h) of the IRR, the SC ruled that it is exempt.
3.33 Ericson v City of Pasig, GR 176667 Nov 22, 2007 – Basis of local taxes is Gross
Receipts per the local tax code. It cannot be Gross Income. Accrual Accounting of Income;
Financial reporting system; gross receipts v gross income; double taxation explained; question
of law v of facts; Rules 41, 45 and 56; local taxation.

3.34 San Juan v Castro, Treasurer of Marikina City, GR 17461 Dec 27, 2007 – Basis
of Transfer Tax under the LGC (Sec 135) in case of transfer is consideration or FMV whichever
is higher. This point was not tackled by the SC. It based its decision on the procedure under Sec
195 – Protesting Assessment of LGC Treasurer cannot be compelled by mandamus to accept
payment based on consideration in the Deed of Assignment. Remedy is the procedure laid down
in the LGC.

3.35 GR No. 169836, Philippine Fisheries Development Authority vs. CA, July 31,
2007) - The Supreme Court recently stopped the Iloilo City government from auctioning off the
Iloilo Fishing Port Complex (IFPC) in satisfaction of the Philippine Fisheries Development
Authority (PFDA)’s alleged property tax delinquency amounting to Php5.07 Million. PFDA
leases portions of the IFPC to private firms and individuals. In a decision penned by Justice
Consuelo Ynares-Santiago, the Court’s Third Division granted the petition of the state-run
PDFA, which assailed the scheduled sale of the IFPC and its tax delinquency, asserting that it is
tax-exempt. The Court thus set aside the June 21, 2005 decision of the Court of Appeals (CA)
allowing the sale of the IFPC, which is part of a 21-hectare reclaimed lot in Iloilo City. The
PFDA appealed to the CA after the Iloilo City Assessor’s Office, Department of Finance, and
the Office of the President dismissed its petitions for tax exemption. The Court held that the
PFDA, as an instrumentality of the national government, is generally tax-exempt. Thus, it ruled
that the PFDA is liable to pay real property taxes assessed by the City of Iloilo on the IFPC only
with respect to those portions which are leased to private entities. Moreover, the Court held that
the IFPC, being a reclaimed property and thus part of public domain, cannot be the subject of a
sale and be sold at a public auction. As such, the tax delinquency has to be settled through
means other than the sale of the complex. The Court also declared the real property tax
assessments issued by the City of Iloilo on the land and buildings of the IFPC as void except on
those portions leased to the private parties. It also directed the City of Iloilo to refrain from
levying on the IFPC to satisfy the payment of the real property tax delinquency.

3.36 Fels Energy, Inc. v. The Province of Batangas and the Office of the
Provincial Assessor of Batangas, G.R. No. 168557; and National Power Corporation v.
Local Board of Assessment Appeals of Batangas and the Province of Batangas, G.R. No.
170628, February 16, 2007 - Power barges owned by NPC contractors are subject to RPT;
appeal from the decision of local assessor should be made to the Local Board of Assessment
Appeals within 60 days from receipt of the assessment. The Motion for Recon with the
 Assessor’s office does not toll the period as it is not sanctioned by the law. Exemption of NPC
does not extend to contractor.

1. EEEl Greco Ship Manning & Mgt Corp v. Bureau of Customs, GR 177188 Dec 4, 2008 –BOC
District Collector of Port of Manila issued Warrant of Seizure and Detention under Seizure
Identification No. __, Greco, as agent of the owner of vessel filed a Motion for Intervention and
Motion to Quash Warrant of Seizure Detention with Urgent Prayer for the Immediate Release
of M/V Neptune Breeze with the DCPOM, which in an Order granted the same on the ground
that M/V Criston and M/V Netune Breeze are not one and the same. Said Order was
automatically elevated to the BOC Commissioner who reversed the Order, holding that based
on the findings of PNP Crime Laboratory said vessels bore the same engine and generator serial
numbers. Thus, the forfeiture of the vessel by District Collector of Legaspi was affirmed. Greco
went to CTA Division and En Banc, which both affirmed the decision of Commissioner. Hence
the Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court to the SC.
Issues: Whether Greco was denied due process; Whether M/V Criston and M/V Nepture Breeze
are one and same; and whether M/V Neptune Breeze is qualified to be subject of forfeiture
under Sec 2531 of the TCC.