Philippine Petroleum Corporation v.

Municipality of Pililia

Facts:
Petitioner, Philippine Petroleum Corporation (PPC) owns and maintains an oil refinery
conductingbusiness within the municipality of Pililia, Rizal. P.D. 231 or the local tax code of
1973 provide for theMunicipality of impose taxes on business any article of commerce.
Thereafter, Provincial Circular 26-73was issued directing all provincial, City and municipal
treasurers to refrain from collecting any localimposed in petroleum products. In 1974, P.D. 426
amended certain provisions of P.D. 231. Themunicipality of Pililia, through Municipal Tax
ordinance 1, S-1974, imposed tax on business. In the RTC,respondent received a favorable
decision, directing herein petitioner to pay the tax and fees impose untoit. Petitioner contended
that Provincial Arcular 26-73 suspended the effectively of local tax ordinances of the local tax
code.
Issue:
Whether or not Provincial Circular No. 26-73 supersedes the provisions of P.D. 231 as amended
by P.D.426?
Held:
The court ruled in the negative, stating that in case of di
screpancy between the basic law and on
implementing rule or regulation, the former prevails. P.D. 426, amending the local tax code repealed
P.C. No. 26-73 and 26-
A73 where section 19 of which stated the municipality may impose taxes on business manufact
urers importers or producers of any article of commerce of whatever kind or
nature
Thus, the order of the lower court was affirmed by SC with certain modification. In the case
atbar, the provisions of the local tax code of 1974 supersedes P.C. 26-73, likewise upholding
theconstitutional right granted to local autonomy to imposed taxes.