Professional Documents
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FACTS:
Of relevance to this controversy is the tax provision of Rep. Act No. 3259,
embodied in Section 14 thereof, which reads:
On January 1, 1992, Rep. Act No. 7160, otherwise known as the Local
Government Code of 1991 (LGC), took effect. Section 232 of the Code grants
local government units within the Metro Manila Area the power to levy tax on real
properties, thus:
On July 20, 1992, barely few months after the LGC took effect, Congress
enacted Rep. Act No. 7633, amending Bayantels original franchise. The
amendatory law (Rep. Act No. 7633) contained the following tax provision:
RULING:
other properties of Bayantel directly used in the pursuit of its business are
beyond the pale of the delegated taxing power of local governments. In a very
real sense, therefore, real properties of Bayantel, save
those exclusive of its franchise, are subject to realty taxes. Ultimately,
therefore, the inevitable result was that all realties which are actually, directly and
exclusively used in the operation of its franchise are exempted from any property
tax.
, Section 14 of Rep. Act No. 3259 which was deemed impliedly repealed
by Section 234 of the LGC was expressly revived under Section 14 of Rep. Act
No. 7633. In concrete terms, the realty tax exemption heretofore enjoyed by
Bayantel under its original franchise, but subsequently withdrawn by force
of Section 234 of the LGC, has been restored by Section 14 of Rep. Act No.
7633.
Rep. Act No. 7633 was enacted subsequent to the LGC. Perfectly aware that the
LGC has already withdrawn Bayantels former exemption from realty taxes,
Congress opted to pass Rep. Act No. 7633 using, under Section 11 thereof,
exactly the same defining phrase exclusive of this franchise which was the
basis for Bayantels exemption from realty taxes prior to the LGC. In plain
language, Section 11 of Rep. Act No. 7633 states that the grantee, its
successors or assigns shall be liable to pay the same taxes on their real estate,
buildings and personal property, exclusive of this franchise, as other persons or
corporations are now or hereafter may be required by law to pay. The Court
views this subsequent piece of legislation as an express and real intention on
the part of Congress to once again remove from the LGCs delegated taxing
power, all of the franchisees (Bayantels) properties that are actually, directly and
exclusively used in the pursuit of its franchise.
FACTS:
On 17 February 1994, Republic Act No. 7678 (RA 7678)[4] granted petitioner a
25-year franchise to install, operate and maintain telecommunications systems
throughout the Philippines.
RULING:
The issue in this case involves the interpretation of the phrase exclusive of this
franchise in the first sentence of Section 5 of RA 7678.
Section 5 of RA 7678 states:
The grantee shall file the return with and pay the tax due thereon to
the Commissioner of Internal Revenue or his duly authorized
representative in accordance with the National Internal Revenue
Code and the return shall be subject to audit by the Bureau of
Internal Revenue. (Boldfacing and underscoring supplied)
The first sentence of Section 5 clearly states that the legislative franchisee shall
be liable to pay the following taxes: (1) the same taxes on its real estate,
buildings, and personal property exclusive of this franchise as other persons
or corporations are now or hereafter may be required by law to pay; (2) franchise
tax as may be prescribed by law of all gross receipts of the telephone or other
telecommunications businesses transacted under this franchise; [28] and (3)
income taxes payable under Title II of the National Internal Revenue Code.
A plain reading shows that the phrase exclusive of this franchise is meant
to exclude the legislative franchise from the properties subject to taxes under the
first sentence. In effect, petitioners franchise, which is a personal property, is not
subject to the taxes imposed on properties under the first sentence of Section 5.
However, petitioners gross receipts from its franchise are subject to the franchise
tax under the second sentence of Section 5.
DENY the petition. We AFFIRM the 2 May 2002 and 19 November 2002 Orders
of the Regional Trial Court.
EVANGELINE AALA VS GLOBE TELECOM
Petitioners protested against the construction of Globes cell site antenna around
the vicinity due to security, safety concerns, and health hazards that may cause
them such as the exposure to radiation.
The Executive Judge issued a 72-hour TRO and was extended into 20-day
period. However, Globe filed an opposition with Motion to Dismiss.
ISSUE:
Issues:
RULING:
Held:
On Health Hazard
The appellants contend the ruling of the trial court that the perceived health risk
of the cell site is unfounded. They deem that in light of the findings of the World
Health organization (WHO) that there are gaps in knowledge that have been
identified for further research to make better assess health risks. But the RTC
which the CA also affirmed ruled in favor of the appellee Globe by relying heavily
on the present stand of the Bureau of Health Devices and Technology that the
radiation emitted by cell site antennas is not hazardous to human health if the
minimum safe distance is observed.
On Environmental Concerns
On Preliminary Injunction
The main action for injunctions is distinct from the provisional or ancillary remedy
of preliminary injunction which cannot exist except only as part or an incident of
an independent action or proceeding. As a matter of course, in an action for
injunction, the auxiliary remedy of preliminary injunction, whether prohibitory or
mandatory, may issue.
The CA sustained the trial courts dismissal of the main action for Injunction.
Appellants were not entitled to a writ of preliminary injunction, much more to a
judgment embodying a final injunction.
The Appeal is Denied for lack of merit. The Decision of the RTC is hereby
Affirmed. No Costs.
FACTS:
The Facts
In 1957, Republic Act No. 2036 (RA 2036)[3] granted RCPI a fifty-year
franchise. Section 14 of RA 2036, as amended by Republic Act No. 4054 (RA
4054) in 1964, reads:
Sec. 14. In consideration of the franchise and rights hereby granted and any
provision of law to the contrary notwithstanding, the grantee shall pay the same
taxes as are now or may hereafter be required by law from other individuals,
copartnerships, private, public or quasi-public associations, corporations or joint
stock companies, on real estate, buildings and other personal property except
radio equipment, machinery and spare parts needed in connection with the
business of the grantee, which shall be exempt from customs duties, tariffs and
other taxes, as well as those properties declared exempt in this section. In
consideration of the franchise, a tax equal to one and one-half per centum of all
gross receipts from the business transacted under this franchise by the grantee
shall be paid to the Treasurer of the Philippines each year, within ten days after
the audit and approval of the accounts as prescribed in this Act. Said tax shall
be in lieu of any and all taxes of any kind, nature or description levied,
established or collected by any authority whatsoever, municipal, provincial
or national, from which taxes the grantee is hereby expressly exempted.
(Emphasis supplied)
RCPI protested the assessment before the Local Board of Assessment Appeals
(LBAA).[6] RCPI claimed that all its assessed properties are personal properties
and thus exempt from the real property tax.
RCPI also pointed out that its franchise exempts RCPI from paying any and
all taxes of any kind, nature or description in exchange for its payment of tax
equal to one and one-half per cent on all gross receipts from the business
conducted under its franchise. RCPI further claimed that any deviation from its
franchise would violate the non-impairment of contract clause of the Constitution.
Finally, RCPI stated that the value of the properties assessed has depreciated
since their acquisition in the 1960s.
The Provincial Assessor of South Cotabato (provincial assessor) opposed
RCPIs claims on all points. The provincial assessor insisted that the assessed
properties are subject to the real property tax.
The CBAA ruled that RCPI was liable for the real property tax on the assessed
properties. RCPI could also not invoke the non-impairment of contract clause
since no legal right of RCPI was violated.
appellate court modified the CBAA ruling. The appellate court ruled that Section
14 of RA 2036, as amended by RA 4054, clearly exempts RCPI from tax on radio
equipment, machinery, and spare parts needed in connection with its business.
Therefore, RCPI is not liable for real property tax on the generating sets, and on
its radio relay station tower and its accessories consisting of two units of UHF
communication equipment, power distribution unit boar, and battery charger,
which are actually varying types of radio equipment.
ISSUE:
The appellate court erred when it excluded RCPIs tower, relay station
building and machinery shed from tax exemption; and
2. The appellate court erred when it did not resolve the issue of nullity of
the tax declarations and assessments due to non-inclusion of
depreciation allowance.[17]
RULING:
As found by the appellate court, RCPIs radio relay station tower, radio station
building, and machinery shed are real properties and are thus subject to the real
property tax. Section 14 of RA 2036, as amended by RA 4054, states that [i]n
consideration of the franchise and rights hereby granted and any provision of law
to the contrary notwithstanding, the grantee shall pay the same taxes as are
now or may hereafter be required by law from other individuals,
copartnerships, private, public or quasi-public associations, corporations or joint
stock companies, on real estate, buildings and other personal property x x
x.[19] The clear language of Section 14 states that RCPI shall pay the real
estate tax.
from September 2000 to July 2001, all the fourteen telecommunications
franchises approved by Congress uniformly and expressly state that the
franchisee shall be subject to all taxes under the National Internal Revenue
Code, except the specific tax. The following is substantially the uniform tax
provision in these fourteen franchises:
Tax Provisions. The grantee, its successors or assigns, shall be subject to the
payment of all taxes, duties, fees, or charges and other impositions under the
National Internal Revenue Code of 1997, as amended, and other applicable
laws: Provided, That nothing herein shall be construed as repealing any specific
tax exemptions, incentives or privileges granted under any relevant law:
Provided, further, That all rights, privileges, benefits and exemptions accorded to
existing and future telecommunications entities shall likewise be extended to the
grantee.
RCPI cannot also invoke the equality of treatment clause under Section 23 of
Republic Act No. 7925
The franchises of Smart,[23] Islacom,[24] TeleTech,[25] Bell,[26] Major
Telecoms, Island Country, and IslaTel,[29] all expressly declare that the
[27] [28]
franchisee shall pay the real estate tax, using words similar to Section 14 of
RA 2036, as amended. The provisions of these subsequent telecommunication
franchises imposing the real estate tax on franchisees only confirm that RCPI is
subject to the real estate tax. Otherwise, RCPI will stick out like a sore thumb,
being the only telecommunications company exempt from the real estate tax, in
mockery of the spirit of equality of treatment that RCPI is invoking, not to mention
the violation of the constitutional rule on uniformity of taxation.
It is an elementary rule in taxation that exemptions are strictly construed
against the taxpayer and liberally in favor of the taxing authority. It is the
taxpayers duty to justify the exemption by words too plain to be mistaken and too
categorical to be misinterpreted.[30]
We have examined the records of this case and found that RCPI raised
before the LBAA and the CBAA the nullity of the assessments due to the non-
inclusion of depreciation allowance. Therefore, RCPI did not raise this issue for
the first time. However, even if we consider this issue, under the Real Property
Tax Code depreciation allowance applies only to machinery and not to real
property.[31]
RADIO COMM VS LOCAL BOARD OF ASSESSMENT APPEALS OF SOUTH
COTABATO
GR SP NO 47446 MARCH 29 2000
FACTS:
RCPI a fifty-year franchise. Section 14 of RA 2036, as amended by Republic
Act No. 4054 (RA 4054) in 1964, reads:
Sec. 14. In consideration of the franchise and rights hereby granted and any
provision of law to the contrary notwithstanding, the grantee shall pay the same
taxes as are now or may hereafter be required by law from other individuals,
copartnerships, private, public or quasi-public associations, corporations or joint
stock companies, on real estate, buildings and other personal property except
radio equipment, machinery and spare parts needed in connection with the
business of the grantee, which shall be exempt from customs duties, tariffs and
other taxes, as well as those properties declared exempt in this section. In
consideration of the franchise, a tax equal to one and one-half per centum of all
gross receipts from the business transacted under this franchise by the grantee
shall be paid to the Treasurer of the Philippines each year, within ten days after
the audit and approval of the accounts as prescribed in this Act. Said tax shall
be in lieu of any and all taxes of any kind, nature or description levied,
established or collected by any authority whatsoever, municipal, provincial
or national, from which taxes the grantee is hereby expressly exempted.
(Emphasis supplied)
while the tax exemption in favour of RCPI under section 14 of its franchise is of a
limited character with regards to radio equipment, machinery and spare parts
needed in connection with its business, rcpi enjoys tax exemption which covers
not only customs duties, tariffs and other export and import related taxes but also
real properties and personal property taxes
the tax exemption accorded to RCPIs business related machinery covers then its
machinery which are actually varying types of radio equipment.
the tower is however subject to real property tx since a tower is not strictly a radio
equipment as it only serves as a support for antennas and other communication
equipment mounted thereon for the transmission and reception of signals.
ISSUE:
RULING: