THIRD DIVISION taxes on quarry resources extracted by Republic Cement from

private lands pursuant to Section 21 of Provincial Ordinance No.

3. This agreement and modus vivendi were embodied in a joint
manifestation and motion signed by Governor Roberto
G.R. No. 126232 November 27, 1998 Pagdanganan, on behalf of the Province of Bulacan, by Provincial
Treasurer Florence Chavez, and by Provincial Legal Officer
Manuel Siayngco, as petitioners' counsel and filed with the Court
THE PROVINCE OF BULACAN, ROBERTO M. of Appeals on December 13, 1994. In a resolution dated
PAGDANGANAN, FLORENCE CHAVES, and MANUEL DJ December 29, 1994, the appellate court approved the same and
SIAYNGCO in their capacity as PROVINCIAL GOVERNOR, limited the issue to be resolved to the question of whether or not
PROVINCIAL TREASURER, PROVINCIAL LEGAL the provincial government could impose taxes on stones, sand,
ADVISER, respectively, petitioners, gravel, earth and other quarry resources extracted from private
vs. lands.
THE HONORABLE COURT OF APPEALS (FORMER SPECIAL
12TH DIVISION), REPUBLIC CEMENT
CORPORATION, respondents. After due trial, the Court of Appeals, on September 27, 1995,
rendered the following judgment:

WHEREFORE, judgment is hereby rendered

declaring the Province of Bulacan under its
ROMERO, J.: Provincial Ordinance No. 3 entitled "An
Ordinance Enacting The Revenue Code of
Before us is a petition for certiorari seeking the reversal of the Bulacan Province" to be without legal authority to
decision of the Court of Appeals dated September 27, 1995 impose and assess taxes on quarry resources
declaring petitioner without authority to levy taxes on stones, extracted by RCC from private lands, hence the
sand, gravel, earth and other quarry resources extracted from interpretation of Respondent Treasurer of
private lands, as well as the August 26, 1996 resolution of the Chapter II, Article D, Section 21 of the Ordinance,
appellate court denying its motion for reconsideration. and the assessment made by the Province of
Bulacan against RCC is null and void.
The facts are as follows:
Petitioners' motion for reconsideration, as well as their
On June 26, 1992, the Sangguniang Panlalawigan of Bulacan supplemental motion for reconsideration, was denied by the
passed Provincial Ordinance No. 3, known as "An Ordinance appellate court on August 26, 1996, hence this appeal.
Enacting the Revenue Code of the Bulacan Province." which was
to take effect on July 1, 1992. Section 21 of the ordinance Petitioners claim that the Court of Appeals erred in:
provides as follows:
1. NOT HAVING OUTRIGHTLY
Sec. 21 Imposition of Tax. There is hereby levied DISMISSED THE SUBJECT
and collected a tax of 10% of the fair market PETITION ON THE GROUND
value in the locality per cubic meter of ordinary THAT THE SAME IS NOT THE
stones, sand, gravel, earth and other quarry APPROPRIATE REMEDY
resources, such, but not limited to marble, FROM THE TRIAL COURT'S
granite, volcanic cinders, basalt, tuff and rock GRANT OF THE PRIVATE
phosphate, extracted frompublic lands or from RESPONDENTS' (HEREIN
beds of seas, lakes, rivers, streams, creeks and PETITIONER) MOTION TO
other public waters within its territorial jurisdiction DISMISS;
(Emphasis ours)
2. NOT DISMISSING THE
Pursuant thereto, the Provincial Treasurer of Bulacan, in a letter SUBJECT PETITION FOR
dated November 11, 1993, assessed private respondent Republic BEING VIOLATIVE OF
Cement Corporation (hereafter Republic Cement) P2,524,692.13 CIRCULAR 2-90 ISSUED BY
for extracting limestone, shale and silica from several parcels THE SUPREME COURT;
of private land in the province during the third quarter of 1992 until
the second quarter of 1993. Believing that the province, on the 3. NOT DISMISSING THE
basis of above-said ordinance, had no authority to impose taxes PETITION FOR REVIEW ON
on quarry resources extracted from private lands, Republic THE GROUND THAT THE
Cement formally contested the same on December 23, 1993. The TRIAL COURT'S ORDER OF
same was, however, denied by the Provincial Treasurer on MAY 13, 1994 HAD LONG
January 17, 1994. Republic Cement, consequently filed a petition BECOME FINAL AND
for declaratory relief with the Regional Trial Court of Bulacan on EXECUTORY;
February 14, 1994. The province filed a motion to dismiss
Republic Cement's petition, which was granted by the trial court
4. GOING BEYOND THE
on May 13, 1993, which ruled that declaratory relief was improper,
PARAMETERS OF ITS
allegedly because a breach of the ordinance had been committed
APPELLATE JURISDICTION IN
by Republic Cement.
RENDERING THE
SEPTEMBER 27, 1995
On July 11, 1994, Republic Cement filed a petition DECISION;
for certiorari with the Supreme Court seeking to reverse the trial
court's dismissal of their petition. The Court, in a resolution dated
5. HOLDING THAT PRIVATE
July 27, 1994, referred the same to the Court of Appeals, where
it was docketed as CA G.R. SP No. 34915. The appellate court RESPONDENT (HEREIN
required petitioners to file a comment, which they did on PETITIONER) ARE
ESTOPPED FROM RAISING
September 7, 1994.
THE PROCEDURAL ISSUE IN
THE MOTION FOR
In the interim, the Province of Bulacan issued a warrant of levy RECONSIDERATION;
against Republic Cement, allegedly because of its unpaid tax
liabilities. Negotiations between Republic Cement and petitioners
resulted in an agreement and modus vivendi on December 12, 6. THE INTERPRETATION OF
SECTION 134 OF THE LOCAL
1994, whereby Republic Cement agreed to pay under protest
GOVERNMENT CODE AS
P1,262,346.00, 50% of the tax assessed by petitioner, in
exchange for the lifting of the warrant of levy. Furthermore, STATED IN THE SECOND TO
Republic Cement and petitioners agreed to limit the issue for THE LAST PARAGRAPH OF
PAGE 5 OF ITS SEPTEMBER
resolution by the Court of Appeals to the question as to whether
27, 1995 DECISION;
or not the provincial government could impose and/or assess
 7. SUSTAINING THE
ALLEGATIONS OF HEREIN
RESPONDENT WHICH
UNJUSTLY DEPRIVED
PETITIONER THE POWER TO
CREATE ITS OWN SOURCES
OF REVENUE;
8. DECLARING THAT THE
ASSESSMENT MADE BY THE
PROVINCE OF BULACAN
AGAINST RCC AS NULL AND
VOID WHICH IN EFFECT IS A
COLLATERAL ATTACK ON
PROVINCIAL ORDINANCE
NO. 3; AND
9. FAILING TO CONSIDER
THE REGALIAN DOCTRINE IN
FAVOR OF THE LOCAL
GOVERNMENT.
The issues raised by petitioners are devoid of merit. The number
and diversity of errors raised by appellants impel us, however, to
discuss the points raised seriatim.
In their first assignment of error, petitioners contend that instead
of filing a petition for certiorari with the Supreme Court, Republic
Cement should have appealed from the order of the trial court
dismissing their petition. CitingMartinez vs. CA,1 they allege that
a motion to dismiss is a final order, the remedy against which is
not a petition for certiorari, but an appeal, regardless of the
questions sought to be raised on appeal, whether of fact or of law,
whether involving jurisdiction or grave abuse of discretion of the
trial court.
Petitioners' argument is misleading. While it is true that the
remedy against a final order is an appeal, and not a petition
for certiorari, the petition referred to is a petition
for certiorari under Rule 65. As stated inMartinez, the party
aggrieved does not have the option to substitute the special civil
action of certiorari under Rule 65 for the remedy of appeal. The
existence and availability of the right of appeal are antithetical to
the availment of the special civil action of certiorari.
Republic Cement did not, however, file a petition
for certiorari under Rule 65, but an appeal by certiorari under
Rule 45. Even law students know that certiorari under Rule 45 is
a mode of appeal, an appeal from the Regional Trial Court being
taken in either of two ways (a) by writ of error (involving questions
of fact and law) and (b) by certiorari (limited only to issues of law),
with an appeal by certiorari being brought to the Supreme Court,
there being no provision of law for taking appeals by certiorari to
the Court of Appeals.2 It is thus clearly apparent that Republic
Cement correctly contested the trial court's order of dismissal by
filing an appeal by certiorari under Rule 45. In fact, petitioners, in
their second assignment of error, admit that a petition for review
on certiorari under Rule 45 is available to a party aggrieved by an
order granting a motion to dismiss. 3 They claim, however, that
Republic Cement could not avail of the same allegedly because
the latter raised issues of fact, which is prohibited, Rule 45
providing that "(t)he petition shall raise only questions of law
which must be distinctly set forth."4 In this respect, petitioners
claim that Republic Cement's petition should have been
dismissed by the appellate court, Circular 2-90 providing:
4. Erroneous Appeals. — An appeal taken to
either the Supreme Court or the Court of Appeals
by the wrong or inappropriate mode shall be
dismissed.
xxx xxx xxx
d) No transfer of appeals erroneously taken. —
No transfers of appeals erroneously taken to the
Supreme Court or to the Court of Appeals to
whichever of these Tribunals has appropriate
appellate jurisdiction will be allowed; continued
ignorance or wilful disregard of the law on
appeals will not be tolerated.
Petitioners even fault the Court for referring Republic Cement's
petition to the Court of Appeals, claiming that the same should
have been dismissed pursuant to Circular 2-90. Petitioners
conveniently overlook the other provisions of Circular 2-90,
specifically 4b) thereof, which provides:
b) Raising factual issues in appeal by certiorari.
— Although submission of issues of fact in an
appeal by certiorari taken to the Supreme Court
from the regional trial court is ordinarily
proscribed, the Supreme Court nonetheless
retains the option, in the exercise of its sound
discretion and considering the attendant
circumstances, either itself to take cognizance of
and decide such issues or to refer them to the
Court of Appeals for determination.
As can be clearly adduced from the foregoing, when an appeal
by certiorari under Rule 45 erroneously raises factual issues, the
Court has the option to refer the petition to the Court of Appeals.
The exercise by the Court of this option may not now be
questioned by petitioners.
As the trial court's order was properly appealed by Republic
Cement, the trial court's May 13, 1994 order never became final
and executory, rendering petitioner's third assignment of error
moot and academic.
Petitioners' fourth and fifth assignment of errors are likewise
without merit. Petitioners assert that the Court of Appeals could
only rule on the propriety of the trial court's dismissal of Republic
Cement's petition for declaratory relief, allegedly because that
was the sole relief sought by the latter in its petition for certiorari.
Petitioners claim that the appellate court overstepped its
jurisdiction when it declared null and void the assessment made
by the Province of Bulacan against Republic Cement.
Petitioners gloss over the fact that, during the proceedings before
the Court of Appeals, they entered into an agreement and modus
vivendi whereby they limited the issue for resolution to the
question as to whether or not the provincial government could
impose and/or assess taxes on stones, sand, gravel, earth and
other quarry resources extracted by Republic Cement from
private lands. This agreement and modus vivendi were approved
by the appellate court on December 29, 1994. All throughout the
proceedings, petitioners never questioned the authority of the
Court of Appeals to decide this issue, an issue which it brought
itself within the purview of the appellate court. Only when an
adverse decision was rendered by the Court of Appeals did
petitioners question the jurisdiction of the former.
Petitioners are barred by the doctrine of estoppel from contesting
the authority of the Court of Appeals to decide the instant case,
as this Court has consistently held that "(a) party cannot invoke
the jurisdiction of a court to secure affirmative relief against his
opponent and after obtaining or failing to obtain such relief,
repudiate or question that same jurisdiction." 5 The Supreme
Court frowns upon the undesirable practice of a party submitting
his case for decision and then accepting the judgment, only if
favorable, and attacking it for lack of jurisdiction when adverse.6
In a desperate attempt to ward off defeat, petitioners now
repudiate the above-mentioned agreement andmodus vivendi,
claiming that the same was not binding on the Province of
Bulacan, not having been authorized by the Sangguniang
Panlalawigan of Bulacan. While it is true that the Provincial
Governor can enter into contract and obligate the province only
upon authority of the sangguniang panlalawigan,7 the same is
inapplicable to the case at bar. The agreement and modus
vivendi may have been signed by petitioner Roberto
Pagdanganan, as Governor of the Province of Bulacan, without
authorization from thesangguniang panlalawigan, but it was also
signed by Manuel Siayngco, the Provincial Legal Officer, in his
capacity as such, and as counsel of petitioners.
It is a well-settled rule that all proceedings in court to enforce a
remedy, to bring a claim, demand, cause of action or subject
matter of a suit to hearing, trial, determination, judgment and
execution are within the exclusive control of the attorney. 8 With
respect to such matters of ordinary judicial procedure, the
attorney needs no special authority to bind his client. 9 Such
questions as what action or pleading to file, where and when to
file it, what are its formal requirements, what should be the theory
of the case, what defenses to raise, how may the claim or defense (A) Rates of Tax. — There shall be levied,
be proved, when to rest the case, as well as those affecting the assessed and collected on minerals, mineral
competency of a witness, the sufficiency, relevancy, materiality or products and quarry resources, excise tax as
immateriality of certain evidence and the burden of proof are follows:
within the authority of the attorney to decide. 10 Whatever decision
an attorney makes on any of these procedural questions, even if xxx xxx xxx
it adversely affects a client's case, will generally bind a client. The
agreement and modus vivendi signed by petitioners' counsel is
(2) On all nonmetallic minerals
binding upon petitioners, even if theSanggunian had not
and quarry resources, a tax of
authorized the same, limitation of issues being a procedural
two percent (2%) based on the
question falling within the exclusive authority of the attorney to
actual market value of the gross
decide.
output thereof at the time of
removal, in case of those locally
In any case, the remaining issues raised by petitioner are likewise extracted or produced; or the
devoid of merit, a province having no authority to impose taxes values used by the Bureau of
on stones, sand, gravel, earth and other quarry resources Customs in determining tariff
extracted from private lands. The pertinent provisions of the Local and customs duties, net of
Government Code are as follows: excise tax and value-added tax,
in the case of importation.
Sec. 134. Scope of Taxing Powers. — Except as
otherwise provided in this Code, the province xxx xxx xxx
may levy only the taxes, fees, and charges as
provided in this Article. (B) [Definition of Terms]. — for purposes of this
Section, the term-
Sec. 158. Tax on Sand, Gravel and Other Quarry
Resources. — The province may levy and collect
xxx xxx xxx
not more than ten percent (10%) of fair market
value in the locality per cubic meter of ordinary
stones, sand, gravel, earth, and other quarry (4) Quarry resources shall mean
resources, as defined under the National Internal any common stone or other
Revenue Code, as amended, extracted common mineral substances as
from public lands or from the beds of seas, lakes, the Director of the Bureau of
rivers, streams, creeks, and other public waters Mines and Geo-Sciences may
within its territorial jurisdiction. declare to be quarry resources
such as, but not restricted to,
marl, marble, granite, volcanic
xxx xxx xxx (Emphasis supplied)
cinders, basalt, tuff and rock
phosphate; Provided, That they
The appellate court, on the basis of Section 134, ruled that a contain no metal or metals or
province was empowered to impose taxes only on sand, gravel, other valuable minerals in
and other quarry resources extracted from public lands, its economically workable
authority to tax being limited by said provision only to those taxes, quantities.
fees and charges provided in Article One, Chapter 2, Title One of
Book II of the Local Government Code. 11 On the other hand,
It is clearly apparent from the above provision that the National
petitioners claim that Sections 129 12 and 186 13 of the Local Internal Revenue Code levies a tax on all quarry resources,
Government Code authorizes the province to impose taxes other regardless of origin, whether extracted from public or private land.
than those specifically enumerated under the Local Government
Thus, a province may not ordinarily impose taxes on stones,
Code.
sand, gravel, earth and other quarry resources, as the same are
already taxed under the National Internal Revenue Code. The
The Court of Appeals erred in ruling that a province can impose province can, however, impose a tax on stones, sand, gravel,
only the taxes specifically mentioned under the Local earth and other quarry resources extracted from public land
Government Code. As correctly pointed out by petitioners, because it is expressly empowered to do so under the Local
Section 186 allows a province to levy taxes other than those Government Code. As to stones, sand, gravel, earth and other
specifically enumerated under the Code, subject to the conditions quarry resources extracted from private land, however, it may not
specified therein. do so, because of the limitation provided by Section 133 of the
Code in relation to Section 151 of the National Internal Revenue
This finding, nevertheless, affords cold comfort to petitioners as Code.
they are still prohibited from imposing taxes on stones, sand,
gravel, earth and other quarry resources extracted from private Given the above disquisition, petitioners cannot claim that the
lands. The tax imposed by the Province of Bulacan is an excise appellate court unjustly deprived them of the power to create their
tax, being a tax upon the performance, carrying on, or exercise of sources of revenue, their assessment of taxes against Republic
an activity. 14 The Local Government Code provides: Cement being ultra vires, traversing as it does the limitations set
by the Local Government Code.
Sec. 133. — Common Limitations on the Taxing
Powers of Local Government Units. — Unless Petitioners likewise aver that the appellate court' s declaration of
otherwise provided herein, the exercise of the nullity of its assessment against Republic Cement is a collateral
taxing powers of provinces, cities, municipalities, attack on Provincial Ordinance No. 3, which is prohibited by public
and barangays shall not extend to the levy of the policy. 15 Contrary to petitioners' claim, the legality of the
following: ordinance was never questioned by the Court of Appeals. Rather,
what the appellate court questioned was petitioners' assessment
xxx xxx xxx of taxes on Republic Cement on the basis of Provincial Ordinance
No. 3, not the ordinance itself.
(h) Excise taxes on articles enumerated under
the National Internal Revenue Code, as Furthermore, Section 21 of Provincial Ordinance No. 3 is
amended, and taxes, fees or charges on practically only a reproduction of Section 138 of the Local
petroleum products; Government Code. A cursory reading of both would show that
both refer to ordinary sand, stone, gravel, earth and other quarry
A province may not, therefore, levy excise taxes on articles resources extracted from public lands. Even if we disregard the
already taxed by the National Internal Revenue Code. limitation set by Section 133 of the Local Government Code,
Unfortunately for petitioners, the National Internal Revenue Code petitioners may not, impose taxes on stones, sand, gravel, earth
provides: and other quarry resources extracted from private lands on the
basis of Section 21 of Provincial Ordinance No. 3 as the latter
Sec. 151. — Mineral Products. — clearly applies only to quarry resources extracted from public
lands. Petitioners may not invoke the Regalian doctrine to extend
the coverage of their ordinance to quarry resources extracted
from private lands, for taxes, being burdens, are not to be
presumed beyond what the applicable statute expressly and
clearly declares, tax statutes being construed strictissimi
juris against the government. 16

WHEREFORE, premises considered, the instant petition is

DISMISSED for lack of merit and the decision of the Court of
Appeals is hereby AFFIRMED in toto. Costs against petitioner.SO
ORDERED.
 THIRD DIVISION
G.R. No. 119122 August 8, 2000
PHILIPPINE BASKETBALL ASSOCIATION, petitioner,
vs.
COURT OF APPEALS, COURT OF TAX APPEALS, AND
COMMISSIONER OF INTERNAL REVENUE,respondents.
PURISIMA, J.:
At bar is a petition for review on certiorari under Rule 45 of the
Rules of Court seeking a review of the decision1 of the Court of
Appeals in CA-G.R. SP No. 34095 which affirmed the decision of
the Court of Tax Appeals in C.T.A. Case No. 4419.
The facts that matter are as follows:
On June 21, 1989, the petitioner received an assessment letter
from the Commissioner of Internal Revenue (respondent
Commissioner) for the payment of deficiency amusement tax
computed thus:
Deficiency Amusement Tax
al gross receipts 1987 P19,970,928.00
===========
% tax due thereon 2,995,639.20
s: Tax paid 602,063.35
iciency amusement tax P2,393,575.85
d: 75% surcharge 1,795,181.89
% interest (2 years) 1,675,503.10
P5,864,260.84
al Amount Due & Collectible ===========
On July 18, 1989, petitioner contested the assessment by filing a
protest with respondent Commissioner who denied the same on
November 6, 1989.
On January 8, 1990, petitioner filed a petition for review2 with the
Court of Tax Appeals (respondent CTA) questioning the denial by
respondent Commissioner of its tax protest.
On December 24, 1993, respondent CTA dismissed petitioner's
petition, holding:
"WHEREFORE, in all the foregoing, herein petition for review is
hereby DISMISSED for lack of merit and the Petitioner is hereby
ORDERED to PAY to the Respondent the amount of
P5,864,260.84 as deficiency amusement tax for the year 1987
plus 20% annual delinquency interest from July 22, 1989 which is
the due date appearing on the notice and demand of the
Commissioner (i.e. 30 days from receipt of the assessment) until
fully paid pursuant to the provisions of Sections 248 and 249 (c)
(3) of the Tax Code, as amended."3
Petitioner presented a motion for reconsideration4 of the said
decision but the same was denied by respondent CTA in a
resolution5 ALF dated April 8, 1994. Thereafter and within the
reglementary period for interposing appeals, petitioner appealed
the CTA decision to the Court of Appeals.
On November 21, 1994, the Court of Appeals rendered its
questioned Decision,6 affirming the decision of the CTA and
dismissing petitioner's appeal. Petitioner filed a Motion for
Reconsideration of said decision but to no avail. The same was
denied by the Court of Appeals in a Resolution7 dated January 31,
1995. Hence, this petition.1âwphi1.nêt
Undaunted, petitioner found its way to this Court via the present
petition, contending that:
"1. Respondent Court of Appeals erred in holding that the
jurisdiction to collect amusement taxes of PBA games is vested
in the national government to the exclusion of the local
governments.
"2. Respondent Court of Appeals erred in holding that Section 13
of the Local Tax Code of 1973 limits local government units to
theaters, cinematographs, concert halls, circuses and other
places of amusement in the collection of the amusement tax.
"3. Respondent Court of Appeals erred in holding that Revenue
Regulations No. 8-88 dated February 19, 1988 is an erroneous
interpretation of law.
"4. Respondent Court of Appeals erred in giving retroactive effect
to the revocation of Revenue Regulations 8-88.
"5. Respondent Court of Appeals erred when it failed to consider
the provisions of P.D. 851 the franchise of Petitioner, Section 8 of
which provides that amusement tax on admission receipts of
Petitioner is 5%.
"6. Respondent Court of Appeals erred in holding that the cession
of advertising and streamer spaces in the venue to a third person
is subject to amusement taxes.
"7. Respondent Court of Appeals erred in holding that the cession
of advertising and streamer spaces inside the venue is embraced
within the term 'gross receipts' as defined in Section 123 (6) of the
Tax Code.
"8. Respondent Court of Appeals erred in holding that the
amusement tax liability of Petitioner is subject to a 75%
surcharge."
The issues for resolution in this case may be simplified as follows:
1. Is the amusement tax on admission tickets to PBA games a
national or local tax? Otherwise put, who between the national
government and local government should petitioner pay
amusement taxes?
2. Is the cession of advertising and streamer spaces to Vintage
Enterprises, Inc. (VEI) subject to the payment of amusement tax?
3. If ever petitioner is liable for the payment of deficiency
amusement tax, is it liable to pay a seventy-five percent (75%)
surcharge on the deficiency amount due?
Petitioner contends that PD 231, otherwise known as the Local
Tax Code of 1973, transferred the power and authority to levy and
collect amusement taxes from the sale of admission tickets to
places of amusement from the national government to the local
governments. Petitioner cited BIR Memorandum Circular No. 49-
73 providing that the power to levy and collect amusement tax on
admission tickets was transferred to the local governments by
virtue of the Local Tax Code; and BIR Ruling No. 231-86 which
held that "the jurisdiction to levy amusement tax on gross receipts
from admission tickets to places of amusement was transferred
to local governments under P.D. No. 231, as amended."8 Further,
petitioner opined that even assuming arguendo that respondent
Commissioner revoked BIR Ruling No. 231-86, the reversal,
modification or revocation cannot be given retroactive effect since
even as late as 1988 (BIR Memorandum Circular No. 8-88),
respondent Commissioner still recognized the jurisdiction of local
governments to collect amusement taxes.
The Court is not persuaded by petitioner's asseverations.
The laws on the matter are succinct and clear and need no
elaborate disquisition. Section 13 of the Local Tax Code provides:
"SECTION 13. Amusement tax on admission. — The province
shall impose a tax on admission to be collected from the
proprietors, lessees, or operators of theaters, cinematographs,
concert halls, circuses and other places of amusement . . ."
The foregoing provision of law in point indicates that the province
can only impose a tax on admission from the proprietors, lessees,
or operators of theaters, cinematographs, concert halls,
circuses and other places of amusement. The authority to tax
professional basketball games is not therein included, as the
same is expressly embraced in PD 1959, which amended PD
1456 thus:
"SECTION 44. Section 268 of this Code, as amended, is hereby
further amended to read as follows:
'Sec. 268. Amusement taxes. — There shall be collected from the
proprietor, lessee or operator of cockpits, cabarets, night or day
clubs, boxing exhibitions, professional basketball games, Jai-
Alai, race tracks and bowling alleys, a tax equivalent to:
'1. Eighteen per centum in the case of cockpits;
'2. Eighteen per centum in the case of cabarets, night or day
clubs;
'3. Fifteen per centum in the case of boxing exhibitions;
'4. Fifteen per centum in the case of professional basketball
games as envisioned in Presidential Decree No. 871. Provided,
however. That the tax herein shall be in lieu of all other
percentage taxes of whatever nature and description;
'5. Thirty per centum in the case of Jai-Alai and race tracks; and
'6. Fifteen per centum in the case of bowling alleys of their gross
receipts, irrespective of whether or not any amount is charged or
paid for admission. For the purpose of the amusement tax, the
term gross receipts' embraces all the receipts of the proprietor,
lessee or operator of the amusement place. Said gross receipts
also include income from television, radio and motion picture
rights, if any. (A person or entity or association conducting any
activity subject to the tax herein imposed shall be similarly liable
for said tax with respect to such portion of the receipts derived by
him or it.)
'The taxes imposed herein shall be payable at the end of each
quarter and it shall be the duty of the proprietor, lessee, or
operator concerned, as well as any party liable, within twenty days
after the end of each quarter, to make a true and complete return
of the amount of the gross receipts derived during the preceding
quarter and pay the tax due thereon. If the tax is not paid within
the time prescribed above, the amount of the tax shall be
increased by twenty-five per centum, the increment to be part of
the tax.
'In case of willful neglect to file the return within the period
prescribed herein, or in case a false or fraudulent return is willfully
made, there shall be added to the tax or to the deficiency tax, in
case any payment has been made on the basis of the return
before the discovery of the falsity or fraud, a surcharge of fifty per
centum of its amount. The amount so added to any tax shall be
collected at the same time and in the same manner and as part
of the tax unless the tax has been paid before the discovery of the
falsity or fraud, in which case, the amount so assessed shall be
collected in the same manner as the tax." (emphasis ours)
From the foregoing it is clear that the "proprietor, lessee or
operator of . . . professional basketball games" is required to pay
an amusement tax equivalent to fifteen per centum (15%) of their
gross receipts to the Bureau of Internal Revenue, which payment
is a national tax. The said payment of amusement tax is in lieu of
all other percentage taxes of whatever nature and description.
While Section 13 of the Local Tax Code mentions "other places
of amusement", professional basketball games are definitely not
within its scope. Under the principle of ejusdem generis, where
general words follow an enumeration of persons or things, by
words of a particular and specific meaning, such general words
are not to be construed in their widest extent, but are to be held
as applying only to persons or things of the same kind or class as
those specifically mentioned.9 Thus, in determining the meaning
of the phrase "other places of amusement", one must refer to the
prior enumeration of theaters, cinematographs, concert halls and
circuses with artistic expression as their common characteristic.
Professional basketball games do not fall under the same
category as theaters, cinematographs, concert halls and circuses
as the latter basically belong to artistic forms of entertainment
while the former caters to sports and gaming.
A historical analysis of pertinent laws does reveal the legislative
intent to place professional basketball games within the ambit of
a national tax. The Local Tax Code, which became effective on
June 28, 1973, allowed the province to collect a tax on admission
from the proprietors, lessees, or operators of theaters,
cinematographs, concert halls, circuses and other places of
amusement. On January 6, 1976, the operation of petitioner was
placed under the supervision and regulation of the Games and
Amusement Board by virtue of PD 871, with the proviso (Section
8) that ". . . all professional basketball games conducted by the
Philippine Basketball Association shall only be subject to
amusement tax of five per cent of the gross receipts from the sale
of admission tickets." Then, on June 11, 1978, PD 1456 came into
effect, increasing the amusement tax to ten per cent, with a
categorical referral to PD 871, to wit, "[t]en per centum in the case
of professional basketball games as envisioned in Presidential
Decree No. 871 . . ." Later in 1984, PD 1959 increased the rate of
amusement tax to fifteen percent by making reference also to PD
871. With the reference to PD 871 by PD 1456 and PD 1959,
there is a recognition under the laws of this country that the
amusement tax on professional basketball games is a national,
and not a local, tax. Even up to the present, the category of
amusement taxes on professional basketball games as a national
tax remains the same. This is so provided under Section 12510 of
the 1997 National Internal Revenue Code. Section 14011 of the
Local Government Code of 1992 (Republic Act 7160), meanwhile,
retained the areas (theaters, cinematographs, concert halls,
circuses and other places of amusement) where the province may
levy an amusement tax without including therein professional
basketball games.
Likewise erroneous is the stance of petitioner that respondent
Commissioner's issuance of BIR Ruling No. 231-8612and BIR
Revenue Memorandum Circular No. 8-8813 — both upholding the
authority of the local government to collect amusement taxes —
should bind the government or that, if there is any revocation or
modification of said rule, the same should operate prospectively.
It bears stressing that the government can never be in estoppel,
particularly in matters involving taxes. It is a well-known rule that
erroneous application and enforcement of the law by public
officers do not preclude subsequent correct application of the
statute, and that the Government is never estopped by mistake or
error on the part of its agents.14
Untenable is the contention that income from the cession of
streamer and advertising spaces to VEI is not subject to
amusement tax. The questioned proviso may be found in Section
1 of PD 1456 which states:
"SECTION 1. Section 268 of the National Internal Revenue Code
of 1977, as amended, is hereby further amended to read as
follows:
'Sec. 268. Amusement taxes. — There shall be collected from the
proprietor, lessee or operator of cockpits, cabarets, night or day
clubs, boxing exhibitions, professional basketball games, Jai-Alai,
race tracks and bowling alleys, a tax equivalent to:
xxx xxx xxx
of their gross receipts, irrespective of whether or not any amount
is charged or paid for admission. For the purpose of the
amusement tax, the term gross receipts' embraces all the receipts
of the proprietor, lessee or operator of the amusement place. Said
gross receipts also include income from television, radio and
motion picture rights, if any. (A person, or entity or association
conducting any activity subject to the tax herein imposed shall be
similarly liable for said tax with respect to such portion of the
receipts derived by him or it.)" (emphasis ours)
The foregoing definition of gross receipts is broad enough to
embrace the cession of advertising and streamer spaces as the
same embraces all the receipts of the proprietor, lessee or
operator of the amusement place. The law being clear, there is
no need for an extended interpretation.15

The last issue for resolution concerns the liability of petitioner for
the payment of surcharge and interest on the deficiency amount
due. Petitioner contends that it is not liable, as it acted in good
faith, having relied upon the issuances of the respondent
Commissioner. This issue must necessarily fail as the same has
never been posed as an issue before the respondent court.
Issues not raised in the court a quo cannot be raised for the first
time on appeal.16

All things studiedly considered, the Court rules that the petitioner
is liable to pay amusement tax to the national government, and
not to the local government, in accordance with the rates
prescribed by PD 1959.

WHEREFORE, the Petition is DENIED, and the Decisions of the

Court of Appeals and Court of Tax Appeals dated November 21,
1994 and December 24, 1993, respectively AFFIRMED. No
pronouncement as to costs.1âwphi1.nêt

SO ORDERED.
THIRD DIVISION
G.R. No. 183137 April 10, 2013
PELIZLOY REALTY CORPORATION, represented herein by
its President, GREGORY K. LOY, Petitioner,
vs.
THE PROVINCE OF BENGUET, Respondent.
DECISION
LEONEN, J.:
The principal issue in this case is the scope of authority of a
province to impose an amusement tax.
This is a Petition for Review on Certiorari under Rule 45 of the
Rules of Court praying that the December 10, 2007 decision of
the Regional Trial Court,- Branch 62, La Trinidad, Benguet in Civil
Case No. 06-CV-2232 be reversed and set aside and a new one
issued in which: ( 1) respondent Province of Benguet is declared
as having no authority to levy amusement taxes on admission
fees for resorts, swimming pools, bath houses, hot springs, tourist
spots, and other places for recreation; (2) Section 59, Article X of
the Benguet Provincial Revenue Code of 2005 is declared null
and void; and (3) the respondent Province of Benguet is
permanently enjoined from enforcing Section 59, Article X of the
Benguet Provincial Revenue Code of 2005.
Petitioner Pelizloy Realty Corporation ("Pelizloy") owns Palm
Grove Resort, which is designed for recreation and which has
facilities like swimming pools, a spa and function halls. It is
located at Asin, Angalisan, Municipality of Tuba, Province of
Benguet.
On December 8, 2005, the Provincial Board of the Province of
Benguet approved Provincial Tax Ordinance No. 05-107,
otherwise known as the Benguet Revenue Code of 2005 ("Tax
Ordinance"). Section 59, Article X of the Tax Ordinance levied a
ten percent (10%) amusement tax on gross receipts from
admissions to "resorts, swimming pools, bath houses, hot springs
and tourist spots." Specifically, it provides the following:
Article Ten: Amusement Tax on Admission
Section 59. Imposition of Tax. There is hereby levied a tax to be
collected from the proprietors, lessees, or operators of theaters,
cinemas, concert halls, circuses, cockpits, dancing halls, dancing
schools, night or day clubs, and other places of amusement at the
rate of thirty percent (30%) of the gross receipts from admission
fees; and
A tax of ten percent (10%) of gross receipts from admission fees
for boxing, resorts, swimming pools, bath houses, hot springs,
and tourist spots is likewise levied. [Emphasis and underscoring
supplied]
Section 162 of the Tax Ordinance provided that the Tax
Ordinance shall take effect on January 1, 2006.
It was Pelizloy's position that the Tax Ordinance's imposition of a
10% amusement tax on gross receipts from admission fees for
resorts, swimming pools, bath houses, hot springs, and tourist
spots is an ultra vires act on the part of the Province of Benguet.
Thus, it filed an appeal/petition before the Secretary of Justice on
January 27, 2006.
The appeal/petition was filed within the thirty (30)-day period from
the effectivity of a tax ordinance allowed by Section 187 of
Republic Act No. 7160, otherwise known as the Local
Government Code (LGC).1 The appeal/petition was docketed as
MSO-OSJ Case No. 03-2006.
Under Section 187 of the LGC, the Secretary of Justice has sixty
(60) days from receipt of the appeal to render a decision. After the
lapse of which, the aggrieved party may file appropriate
proceedings with a court of competent jurisdiction.
Treating the Secretary of Justice's failure to decide on its
appeal/petition within the sixty (60) days provided by Section 187
of the LGC as an implied denial of such appeal/petition, Pelizloy
filed a Petition for Declaratory Relief and Injunction before the
Regional Trial Court, Branch 62, La Trinidad, Benguet. The
petition was docketed as Civil Case No. 06-CV-2232.
Pelizloy argued that Section 59, Article X of the Tax Ordinance
imposed a percentage tax in violation of the limitation on the
taxing powers of local government units (LGUs) under Section
133 (i) of the LGC. Thus, it was null and void ab initio. Section
133 (i) of the LGC provides:
Section 133. Common Limitations on the Taxing Powers of Local
Government Units. - Unless otherwise provided herein, the
exercise of the taxing powers of provinces, cities, municipalities,
and barangays shall not extend to the levy of the following:
xxx
(i) Percentage or value-added tax (VAT) on sales, barters or
exchanges or similar transactions on goods or services except as
otherwise provided herein
The Province of Benguet assailed the Petition for Declaratory
Relief and Injunction as an improper remedy. It alleged that once
a tax liability has attached, the only remedy of a taxpayer is to pay
the tax and to sue for recovery after exhausting administrative
remedies.2
On substantive grounds, the Province of Benguet argued that the
phrase ‘other places of amusement’ in Section 140 (a) of the
LGC3 encompasses resorts, swimming pools, bath houses, hot
springs, and tourist spots since "Article 220 (b) (sic)" of the LGC
defines "amusement" as "pleasurable diversion and
entertainment x x x synonymous to relaxation, avocation,
pastime, or fun."4 However, the Province of Benguet erroneously
cited Section 220 (b) of the LGC. Section 220 of the LGC refers
to valuation of real property for real estate tax purposes. Section
131 (b) of the LGC, the provision which actually defines
"amusement", states:
Section 131. Definition of Terms. - When used in this Title, the
term:
xxx
(b) "Amusement" is a pleasurable diversion and entertainment. It
is synonymous to relaxation, avocation, pastime, or fun On
December 10, 2007, the RTC rendered the assailed Decision
dismissing the Petition for Declaratory Relief and Injunction for
lack of merit.
Procedurally, the RTC ruled that Declaratory Relief was a proper
remedy. On the validity of Section 59, Article X of the Tax
Ordinance, the RTC noted that, while Section 59, Article X
imposes a percentage tax, Section 133 (i) of the LGC itself
allowed for exceptions. It noted that what the LGC prohibits is not
the imposition by LGUs of percentage taxes in general but the
"imposition and levy of percentage tax on sales, barters, etc., on
goods and services only."5It further gave credence to the
Province of Benguet's assertion that resorts, swimming pools,
bath houses, hot springs, and tourist spots are encompassed by
the phrase ‘other places of amusement’ in Section 140 of the
LGC.
On May 21, 2008, the RTC denied Pelizloy’s Motion for
Reconsideration.
Aggrieved, Pelizloy filed the present petition on June 10, 2008 on
pure questions of law. It assailed the legality of Section 59, Article
X of the Tax Ordinance as being a (supposedly) prohibited
percentage tax per Section 133 (i) of the LGC.
In its Comment, the Province of Benguet, erroneously citing
Section 40 of the LGC, argued that Section 59, Article X of the
Tax Ordinance does not levy a percentage tax "because the
imposition is not based on the total gross receipts of services of
the petitioner but solely and actually limited on the gross receipts
of the admission fees collected."6 In addition, it argued that
provinces can validly impose amusement taxes on resorts,
swimming pools, bath houses, hot springs, and tourist spots,
these being ‘amusement places’.
For resolution in this petition are the following issues:
1. Whether or not Section 59, Article X of Provincial Tax
Ordinance No. 05-107, otherwise known as the Benguet Revenue
Code of 2005, levies a percentage tax.
2. Whether or not provinces are authorized to impose amusement
taxes on admission fees to resorts, swimming pools, bath houses,
hot springs, and tourist spots for being "amusement places" under
the Local Government Code.
The power to tax "is an attribute of sovereignty,"7 and as such,
inheres in the State. Such, however, is not true for provinces,
cities, municipalities and barangays as they are not the
sovereign;8 rather, they are mere "territorial and political
subdivisions of the Republic of the Philippines".9
The rule governing the taxing power of provinces, cities,
muncipalities and barangays is summarized in Icard v. City
Council of Baguio:10
It is settled that a municipal corporation unlike a sovereign state
is clothed with no inherent power of taxation. The charter or
statute must plainly show an intent to confer that power or the
municipality, cannot assume it. And the power when granted is to
be construed in strictissimi juris. Any doubt or ambiguity arising
out of the term used in granting that power must be resolved
against the municipality. Inferences, implications, deductions – all
these – have no place in the interpretation of the taxing power of
a municipal corporation.11 [Underscoring supplied]
Therefore, the power of a province to tax is limited to the extent
that such power is delegated to it either by the Constitution or by
statute. Section 5, Article X of the 1987 Constitution is clear on
this point:
Section 5. Each local government unit shall have the power to
create its own sources of revenues and to levy taxes, fees and
charges subject to such guidelines and limitations as the
Congress may provide, consistent with the basic policy of local
autonomy. Such taxes, fees, and charges shall accrue exclusively
to the local governments. [Underscoring supplied]
Per Section 5, Article X of the 1987 Constitution, "the power to tax
is no longer vested exclusively on Congress; local legislative
bodies are now given direct authority to levy taxes, fees and other
charges."12 Nevertheless, such authority is "subject to such
guidelines and limitations as the Congress may provide".13
In conformity with Section 3, Article X of the 1987
Constitution,14 Congress enacted Republic Act No. 7160,
otherwise known as the Local Government Code of 1991. Book II
of the LGC governs local taxation and fiscal matters.
Relevant provisions of Book II of the LGC establish the
parameters of the taxing powers of LGUS found below.
First, Section 130 provides for the following fundamental
principles governing the taxing powers of LGUs:
1. Taxation shall be uniform in each LGU.
2. Taxes, fees, charges and other impositions shall:
a. be equitable and based as far as practicable on the taxpayer's
ability to pay;
b. be levied and collected only for public purposes;
c. not be unjust, excessive, oppressive, or confiscatory;
d. not be contrary to law, public policy, national economic policy,
or in the restraint of trade.
3. The collection of local taxes, fees, charges and other
impositions shall in no case be let to any private person.
4. The revenue collected pursuant to the provisions of the LGC
shall inure solely to the benefit of, and be subject to the disposition
by, the LGU levying the tax, fee, charge or other imposition unless
otherwise specifically provided by the LGC.
5. Each LGU shall, as far as practicable, evolve a progressive
system of taxation.
Second, Section 133 provides for the common limitations on the
taxing powers of LGUs. Specifically, Section 133 (i) prohibits the
levy by LGUs of percentage or value-added tax (VAT) on sales,
barters or exchanges or similar transactions on goods or services
except as otherwise provided by the LGC.
As it is Pelizloy’s contention that Section 59, Article X of the Tax
Ordinance levies a prohibited percentage tax, it is crucial to
understand first the concept of a percentage tax.
In Commissioner of Internal Revenue v. Citytrust Investment
Phils. Inc.,15 the Supreme Court defined percentage tax as a "tax
measured by a certain percentage of the gross selling price or
gross value in money of goods sold, bartered or imported; or of
the gross receipts or earnings derived by any person engaged in
the sale of services." Also, Republic Act No. 8424, otherwise
known as the National Internal Revenue Code (NIRC), in Section
125, Title V,16 lists amusement taxes as among the (other)
percentage taxes which are levied regardless of whether or not a
taxpayer is already liable to pay value-added tax (VAT).
Amusement taxes are fixed at a certain percentage of the gross
receipts incurred by certain specified establishments.
Thus, applying the definition in CIR v. Citytrust and drawing from
the treatment of amusement taxes by the NIRC, amusement
taxes are percentage taxes as correctly argued by Pelizloy.
However, provinces are not barred from levying amusement
taxes even if amusement taxes are a form of percentage taxes.
Section 133 (i) of the LGC prohibits the levy of percentage taxes
"except as otherwise provided" by the LGC.
Section 140 of the LGC provides:
SECTION 140. Amusement Tax - (a) The province may levy an
amusement tax to be collected from the proprietors, lessees, or
operators of theaters, cinemas, concert halls, circuses, boxing
stadia, and other places of amusement at a rate of not more than
thirty percent (30%) of the gross receipts from admission fees.
(b) In the case of theaters of cinemas, the tax shall first be
deducted and withheld by their proprietors, lessees, or operators
and paid to the provincial treasurer before the gross receipts are
divided between said proprietors, lessees, or operators and the
distributors of the cinematographic films.
(c) The holding of operas, concerts, dramas, recitals, painting and
art exhibitions, flower shows, musical programs, literary and
oratorical presentations, except pop, rock, or similar concerts
shall be exempt from the payment of the tax herein imposed.
(d) The Sangguniang Panlalawigan may prescribe the time,
manner, terms and conditions for the payment of tax. In case of
fraud or failure to pay the tax, the Sangguniang Panlalawigan may
impose such surcharges, interests and penalties.
(e) The proceeds from the amusement tax shall be shared equally
by the province and the municipality where such amusement
places are located. [Underscoring supplied]
Evidently, Section 140 of the LGC carves a clear exception to the
general rule in Section 133 (i). Section 140 expressly allows for
the imposition by provinces of amusement taxes on "the
proprietors, lessees, or operators of theaters, cinemas, concert
halls, circuses, boxing stadia, and other places of amusement."
However, resorts, swimming pools, bath houses, hot springs, and
tourist spots are not among those places expressly mentioned by
Section 140 of the LGC as being subject to amusement taxes.
Thus, the determination of whether amusement taxes may be
levied on admissions to resorts, swimming pools, bath houses,
hot springs, and tourist spots hinges on whether the phrase ‘other
places of amusement’ encompasses resorts, swimming pools,
bath houses, hot springs, and tourist spots.
Under the principle of ejusdem generis, "where a general word or
phrase follows an enumeration of particular and specific words of
the same class or where the latter follow the former, the general
word or phrase is to be construed to include, or to be restricted to
persons, things or cases akin to, resembling, or of the same kind
or class as those specifically mentioned."17
The purpose and rationale of the principle was explained by the
Court in National Power Corporation v. Angas18 as follows:
The purpose of the rule on ejusdem generis is to give effect to
both the particular and general words, by treating the particular
words as indicating the class and the general words as including
all that is embraced in said class, although not specifically named
by the particular words. This is justified on the ground that if the
lawmaking body intended the general terms to be used in their
unrestricted sense, it would have not made an enumeration of
particular subjects but would have used only general terms. [2
Sutherland, Statutory Construction, 3rd ed., pp. 395-400].19
In Philippine Basketball Association v. Court of Appeals,20 the
Supreme Court had an opportunity to interpret a starkly similar
provision or the counterpart provision of Section 140 of the LGC
in the Local Tax Code then in effect. Petitioner Philippine
Basketball Association (PBA) contended that it was subject to the
imposition by LGUs of amusement taxes (as opposed to
amusement taxes imposed by the national
government).1âwphi1 In support of its contentions, it cited
Section 13 of Presidential Decree No. 231, otherwise known as
the Local Tax Code of 1973, (which is analogous to Section 140
of the LGC) providing the following:
Section 13. Amusement tax on admission. - The province shall
impose a tax on admission to be collected from the proprietors,
lessees, or operators of theaters, cinematographs, concert halls,
circuses and other places of amusement xxx.
Applying the principle of ejusdem generis, the Supreme Court
rejected PBA's assertions and noted that:
In determining the meaning of the phrase 'other places of
amusement', one must refer to the prior enumeration of theaters,
cinematographs, concert halls and circuses with artistic
expression as their common characteristic. Professional
basketball games do not fall under the same category as theaters,
cinematographs, concert halls and circuses as the latter basically
belong to artistic forms of entertainment while the former caters
to sports and gaming.21 [Underscoring supplied]
However, even as the phrase ‘other places of amusement’ was
already clarified in Philippine Basketball Association, Section 140
of the LGC adds to the enumeration of 'places of amusement'
which may properly be subject to amusement tax. Section 140
specifically mentions 'boxing stadia' in addition to "theaters,
cinematographs, concert halls and circuses" which were already
mentioned in PD No. 231. Also, 'artistic expression' as a
characteristic does not pertain to 'boxing stadia'.
In the present case, the Court need not embark on a laborious
effort at statutory construction. Section 131 (c) of the LGC already
provides a clear definition of ‘amusement places’:
Section 131. Definition of Terms. - When used in this Title, the
term:
xxx
(c) "Amusement Places" include theaters, cinemas, concert halls,
circuses and other places of amusement where one seeks
admission to entertain oneself by seeing or viewing the show or
performances [Underscoring supplied]
Indeed, theaters, cinemas, concert halls, circuses, and boxing
stadia are bound by a common typifying characteristic in that they
are all venues primarily for the staging of spectacles or the holding
of public shows, exhibitions, performances, and other events
meant to be viewed by an audience. Accordingly, ‘other places of
amusement’ must be interpreted in light of the typifying
characteristic of being venues "where one seeks admission to
entertain oneself by seeing or viewing the show or performances"
or being venues primarily used to stage spectacles or hold public
shows, exhibitions, performances, and other events meant to be
viewed by an audience.
As defined in The New Oxford American Dictionary,22 ‘show’
means "a spectacle or display of something, typically an
impressive one";23 while ‘performance’ means "an act of staging
or presenting a play, a concert, or other form of
entertainment."24 As such, the ordinary definitions of the words
‘show’ and ‘performance’ denote not only visual engagement (i.e.,
the seeing or viewing of things) but also active doing (e.g.,
displaying, staging or presenting) such that actions are
manifested to, and (correspondingly) perceived by an audience.
Considering these, it is clear that resorts, swimming pools, bath
houses, hot springs and tourist spots cannot be considered
venues primarily "where one seeks admission to entertain oneself
by seeing or viewing the show or performances". While it is true
that they may be venues where people are visually engaged, they
are not primarily venues for their proprietors or operators to
actively display, stage or present shows and/or performances.
Thus, resorts, swimming pools, bath houses, hot springs and
tourist spots do not belong to the same category or class as
theaters, cinemas, concert halls, circuses, and boxing stadia. It
follows that they cannot be considered as among the ‘other
places of amusement’ contemplated by Section 140 of the LGC
and which may properly be subject to amusement taxes.
At this juncture, it is helpful to recall this Court’s pronouncements
in Icard:
The power to tax when granted to a province is to be construed
in strictissimi juris. Any doubt or ambiguity arising out of the term
used in granting that power must be resolved against the
province. Inferences, implications, deductions – all these – have
no place in the interpretation of the taxing power of a province.25
In this case, the definition of' amusement places' in Section 131
(c) of the LGC is a clear basis for determining what constitutes
the 'other places of amusement' which may properly be subject to
amusement tax impositions by provinces. There is no reason for
going beyond such basis. To do otherwise would be to
countenance an arbitrary interpretation/application of a tax law
and to inflict an injustice on unassuming taxpayers.
The previous pronouncements notwithstanding, it will be noted
that it is only the second paragraph of Section 59, Article X of the
Tax Ordinance which imposes amusement taxes on "resorts,
swimming pools, bath houses, hot springs, and tourist spots". The
first paragraph of Section 59, Article X of the Tax Ordinance refers
to "theaters, cinemas, concert halls, circuses, cockpits, dancing
halls, dancing schools, night or day clubs, and other places of
amusement".1âwphi1 In any case, the issues raised by Pelizloy
are pertinent only with respect to the second paragraph of Section
59, Article X of the Tax Ordinance. Thus, there is no reason to
invalidate the first paragraph of Section 59, Article X of the Tax
Ordinance. Any declaration as to the Province of Benguet's lack
of authority to levy amusement taxes must be limited to admission
fees to resorts, swimming pools, bath houses, hot springs and
tourist spots.
Moreover, the second paragraph of Section 59, Article X of the
Tax Ordinance is not limited to resorts, swimming pools, bath
houses, hot springs, and tourist spots but also covers admission
fees for boxing. As Section 140 of the LGC allows for the
imposition of amusement taxes on gross receipts from admission
fees to boxing stadia, Section 59, Article X of the Tax Ordinance
must be sustained with respect to admission fees from boxing
stadia.
WHEREFORE, the petition for review on certiorari is GRANTED.
The second paragraph of Section 59, Article X of the Benguet
Provincial Revenue Code of 2005, in so far as it imposes
amusement taxes on admission fees to resorts, swimming pools,
bath houses, hot springs and tourist spots, is declared null and
void. Respondent Province of Benguet is permanently enjoined
from enforcing the second paragraph of Section 59, Article X of
the Benguet Provincial Revenue Code of 2005 with respect to
resorts, swimming pools, bath houses, hot springs and tourist
spots.
SO ORDERED.

SECOND DIVISION
G.R. No. 180639 June 29, 2010
LEPANTO CONSOLIDATED MINING COMPANY, Petitioner,
vs.
HON. MAURICIO B. AMBANLOC, in his capacity as the Provincial
Treasurer of Benguet, Respondent.
DECISION
ABAD, J.:
This case is about the liability of a mining corporation for taxes imposed
by a province for the extraction of sand and gravel from areas covered
by its mining lease with the national government and used exclusively
in its mining operations.
The Facts and the Case
The national government issued to petitioner Lepanto Consolidated
Mining Company (Lepanto) a mining lease contract covering, among
others, its "TIKEM" leased mining claim at Sitio Nayak, Barrio Palasan
(Suyoc), Municipality of Mankayan, Benguet. The contract granted
Lepanto the right to extract and use for its purposes all mineral
deposits within the boundary lines of its mining claim. Upon inquiry,
the Mines and Geo-sciences Bureau of the Department of Environment
and Natural Resources (DENR) advised Lepanto that, under its contract,
it did not have to get a permit to extract and use sand and gravel from
within the mining claim for its operational and infrastructure needs.
Based on this advice, Lepanto proceeded to extract and remove sand,
gravel, and other earth materials from the mining site.
Lepanto used the quarried materials to back-fill stopes—portions of
the earth excavated as a result of mining—replacing what had been
mined to maintain the integrity of the ground. It also used sand and
gravel to construct and maintain concrete structures needed in its
mining operation, such as a tailings dam, access roads, and offices. Its
use of quarry resources, readily available within its mining claim, was
more practical and cheaper than having to outsource them.
Respondent Mauricio Ambanloc, the provincial treasurer of Benguet,
sent a demand letter to Lepanto, asking it to pay the province
₱1,901,893.22 as sand and gravel tax, for the quarry materials that it
extracted from its mining site from 1997 to 2000. Lepanto sent a letter-
protest to the provincial treasurer, but the latter denied the same,
insisting on payment.
Lepanto filed a petition with the Regional Trial Court (RTC) of Benguet
to question the assessment.1 The RTC ruled that Lepanto was liable for
the amount assessed, with interest at the rate of 2 percent per month
from the time the tax should have been paid. Lepanto appealed the
RTC decision to the Court of Tax Appeals (CTA) where it was raffled to
its Second Division.2 The Second Division affirmed the ruling of the RTC
with the modification that the interest of 2 percent per month shall not
exceed 36 months.3
Lepanto appealed the decision of the Second Division to the CTA En
Banc.4 Three justices of the CTA voted to affirm the decision but three
justices dissented. Because the needed vote of four members could not
be obtained, the En Banc dismissed the appeal, resulting in the
affirmance of the decision of the Second Division. Lepanto’s motion for
reconsideration met the same fate, hence, this appeal.
The Issue Presented
The sole issue presented in this case is whether or not Lepanto is liable
for the tax imposed by the Province of Benguet on the sand and gravel
that it extracted from within the area of its mining claim and used
exclusively in its mining operations.
The Court’s Rulings
One. Lepanto claims that the tax on sand and gravel applied only to
commercial extractions. In its case, it extracted these materials for use
solely in its mining operations. Lepanto did not supply other users for
some profit. Thus, its extractions were not commercial and should not
be subject to provincial tax.
The CTA’s Second Division held, however, that sand and gravel taxes
may be imposed even on non-commercial extractions. Since Section
138 of the Local Government Code (Republic Act 7160) authorized
provinces to impose a tax on the extraction of sand and gravel from
public lands, without distinguishing between personal and commercial
uses, then the tax should be deemed to cover extractions for both
purposes. The provision reads:
Sec. 138. Tax on Sand, Gravel and Other Quarry Resources. – The
province may levy and collect not more than ten percent (10%) fair
market value in the locality per cubic meter of ordinary stones, sand
gravel, earth, and other quarry resources, as defined under the
National Internal Revenue Code, as amended, extracted from public
lands or from the beds of seas, lakes, rivers, streams, creeks, and other
public waters within its territorial jurisdiction.
But the CTA Second Division ruling overlooks the fact that Republic Act
7160 is not the provincial government’s basis for taxing Lepanto’s
extraction. It is but the general law that delegates to provinces the
power to impose taxes on the extraction of quarry resources. As it
happens, the scope and validity of such delegation is not the issue in
this case. The question of Lepanto’s liability for tax should be
determined based on the revenue measure itself, which in this case,
was the Revised Benguet Revenue Code (the revenue code).5 The
relevant provisions of this provincial revenue code reads:
Article D. Tax on Sand, Gravel and Other Quarry Resources.
xxxx
SECTION 3. Imposition of Tax. There shall be levied a tax of ten (10)
percent of fair market value in the locality per cubic meter of ordinary
stones, sand, gravel, earth, and other quarry resources, x x x applied
for and expected to be extracted or removed from public lands x x x
within the territorial jurisdiction of Benguet Province.
This provision may not apply in case of gratuitous permits for
government projects within Benguet Province.
SECTION 4. Conditions for the Issuance of Permit.
xxxx
(g) The permittee shall within ten (10) days after the end of each month
submit to the Provincial Treasurer, the Municipal Treasurer and
Barangay Treasurer where the materials are extracted, copies of sworn
statement stating the quantity in terms of cubic meter and kind of
materials extracted or removed by him; the amount of tax or fees paid;
the quantity and kind of materials sold or disposed of during the period
covered by said report; the selling price per cubic meter; the names and
addresses of the buyers; and the quantity and kind of materials left in
stock.
xxxx
SECTION 5. Mode, Time and Place of Payment. The tax shall be paid to
the Provincial Treasurer or his duly authorized representative before
the approval by the Provincial Governor of the permit to extract or
remove the materials applied for and before the said materials are
extracted or removed. x x x
SECTION 6. Surcharges and Interests. Failure to pay the tax as provided
herein shall subject the permittee to a surcharge of Twenty-five (25%)
percent of the original amount of tax due plus Two (2%) percent per
month of the unpaid amount including the surcharges until such
amount is fully paid, but in no case shall the total amount or portion
thereof exceed thirty-six (36) months. x x x
Lepanto insists that the subject tax intended to cover only commercial
extractions since the provincial revenue code referred to "fair market
value of the resources," "quantity sold or disposed," "amount left in
stock," "selling price," and "buyers’ information."
Not necessarily. The provincial revenue code provides that the subject
tax had to be paid prior to the issuance of the permit to extract sand
and gravel. Its Article D, Section 2, enumerates four kinds of permits:
commercial, industrial, special, and gratuitous. Special permits covered
only personal use of the extracted materials and did not allow the
permitees to sell materials coming from his concession.6 Among
applicants for permits, however, only gratuitous permits were exempt
from the sand and gravel tax. It follows that persons who applied for
special permits needed to pay the tax, even though they did not extract
materials for commercial purposes. Thus, the tax needed to be paid
regardless of the applicability of the administrative and reportorial
requirements of that revenue code.

Two. Lepanto claims that the tax can only be levied against extractions
by persons or entities required to apply for permits to remove quarry
resources. Since the mining lease contract with the national
government granted it the right to extract and utilize all mineral
deposits from within its mining claim, Lepanto claims that it did not
need to apply for a separate permit from the local government.
Paragraph 9 of its Mining Lease Contract provides that:

This Lease hereby grants unto the LESSEE, his successors or assigns, the
right to extract and utilize for their own benefit all mineral deposits
within the boundary lines of the mining claim/s covered by this Lease
continued vertically downward.1avvphi1

But this merely declares that Lepanto’s extraction and use of mineral
deposits bears the consent of the national government, in line with the
principle that exploration of natural resources can only be done under
the control and supervision of the State. The contract makes no
mention of any exemption from securing government permits.

Lepanto invokes the Bureau of Mines and Geo-Sciences’ view that the
mining company did not require it to get any of the permits that Mines
Administrative Order MRD-27 might require.7 But that Bureau’s view
applied only to permits under MRD-27. The Bureau has no authority to
determine the applicability of local ordinances. Besides, even the
Bureau itself states that the exemption from MRD-27 is not absolute as
it shall not apply if the sand and gravel were to be disposed of
commercially. An exemption from the requirements of the provincial
government should have a clear basis, whether in law, ordinance, or
even from the contract itself. Unfortunately for Lepanto, it failed to
show its entitlement to such exemption.

Three. Lepanto relies on the principle that when a company is taxed on

its main business, it is no longer taxable for engaging in an activity that
is but a part of, incidental to, and necessary to such main business.
Lepanto points out that, since it did not extract and use sand and gravel
as independent activities but as integral parts of its mining operations,
it should not be subjected to a separate tax on the same.

But in the cases where this principle has been applied, the taxes which
were stricken down were in the nature of business taxes. The reasoning
behind those cases was that the incidental activity could not be treated
as a business separate and distinct from the main business of the
taxpayer. Here the tax is an excise tax imposed on the privilege of
extracting sand and gravel. And it is settled that provincial governments
can levy excise taxes on quarry resources independently from the
national government.8

WHEREFORE, the Court DENIES the petition and AFFIRMS the decision
of the Court of Tax Appeals En Banc in CTA EB 201 dated May 17, 2007.

SO ORDERED.
SECOND DIVISION
G.R. No. 162015 March 6, 2006
THE CITY GOVERNMENT OF QUEZON CITY, AND THE CITY TREASURER
OF QUEZON CITY, DR. VICTOR B. ENRIGA, Petitioners,
vs.
BAYAN TELECOMMUNICATIONS, INC., Respondent.
DECISION
GARCIA,J.:
Before the Court, on pure questions of law, is this petition for review
on certiorari under Rule 45 of the Rules of Court to nullify and set aside
the following issuances of the Regional Trial Court (RTC) of Quezon City,
Branch 227, in its Civil Case No. Q-02-47292, to wit:
1) Decision1 dated June 6, 2003, declaring respondent Bayan
Telecommunications, Inc. exempt from real estate taxation on its real
properties located in Quezon City; and
2) Order2 dated December 30, 2003, denying petitioners’ motion for
reconsideration.
The facts:
Respondent Bayan Telecommunications, Inc.3 (Bayantel) is a legislative
franchise holder under Republic Act (Rep. Act) No. 32594 to establish
and operate radio stations for domestic telecommunications,
radiophone, broadcasting and telecasting.
Of relevance to this controversy is the tax provision of Rep. Act No.
3259, embodied in Section 14 thereof, which reads:
SECTION 14. (a) The grantee shall be liable to pay the same taxes on its
real estate, buildings and personal property, exclusive of the franchise,
as other persons or corporations are now or hereafter may be required
by law to pay. (b) The grantee shall further pay to the Treasurer of the
Philippines each year, within ten days after the audit and approval of
the accounts as prescribed in this Act, one and one-half per centum of
all gross receipts from the business transacted under this franchise by
the said grantee (Emphasis supplied).
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:
SEC. 232. – Power to Levy Real Property Tax. – A province or city or a
municipality within the Metropolitan Manila Area may levy an annual
ad valorem tax on real property such as land, building, machinery and
other improvements not hereinafter specifically exempted.
Complementing the aforequoted provision is the second paragraph of
Section 234 of the same Code which withdrew any exemption from
realty tax heretofore granted to or enjoyed by all persons, natural or
juridical, to wit:
SEC. 234 - Exemptions from Real Property Tax. The following are
exempted from payment of the real property tax:
xxx xxx xxx
Except as provided herein, any exemption from payment of real
property tax previously granted to, or enjoyed by, all persons, whether
natural or juridical, including government-owned-or-controlled
corporations is hereby withdrawn upon effectivity of this Code
(Emphasis supplied).
On July 20, 1992, barely few months after the LGC took effect, Congress
enacted Rep. Act No. 7633, amending Bayantel’s original franchise. The
amendatory law (Rep. Act No. 7633) contained the following tax
provision:
SEC. 11. 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. In addition thereto, the
grantee, its successors or assigns shall pay a franchise tax equivalent to
three percent (3%) of all gross receipts of the telephone or other
telecommunications businesses transacted under this franchise by the
grantee, its successors or assigns and the said percentage shall be in
lieu of all taxes on this franchise or earnings thereof. Provided, That the
grantee, its successors or assigns shall continue to be liable for income
taxes payable under Title II of the National Internal Revenue Code ….
xxx. [Emphasis supplied]
It is undisputed that within the territorial boundary of Quezon City,
Bayantel owned several real properties on which it maintained various
telecommunications facilities. These real properties, as hereunder
described, are covered by the following tax declarations:
(a) Tax Declaration Nos. D-096-04071, D-096-04074, D-096-04072 and
D-096-04073 pertaining to Bayantel’s Head Office and Operations
Center in Roosevelt St., San Francisco del Monte, Quezon City allegedly
the nerve center of petitioner’s telecommunications franchise
operations, said Operation Center housing mainly petitioner’s Network
Operations Group and switching, transmission and related equipment;
(b) Tax Declaration Nos. D-124-01013, D-124-00939, D-124-00920 and
D-124-00941 covering Bayantel’s land, building and equipment in
Maginhawa St., Barangay East Teacher’s Village, Quezon City which
houses telecommunications facilities; and
(c) Tax Declaration Nos. D-011-10809, D-011-10810, D-011-10811, and
D-011-11540 referring to Bayantel’s Exchange Center located in Proj. 8,
Brgy. Bahay Toro, Tandang Sora, Quezon City which houses the
Network Operations Group and cover switching, transmission and
other related equipment.
In 1993, the government of Quezon City, pursuant to the taxing power
vested on local government units by Section 5, Article X of the 1987
Constitution, infra, in relation to Section 232 of the LGC, supra, enacted
City Ordinance No. SP-91, S-93, otherwise known as the Quezon City
Revenue Code (QCRC),5 imposing, under Section 5 thereof, a real
property tax on all real properties in Quezon City, and, reiterating in its
Section 6, the withdrawal of exemption from real property tax under
Section 234 of the LGC, supra. Furthermore, much like the LGC, the
QCRC, under its Section 230, withdrew tax exemption privileges in
general, as follows:
SEC. 230. Withdrawal of Tax Exemption Privileges. – Unless otherwise
provided in this Code, tax exemptions or incentives granted to, or
presently enjoyed by all persons, whether natural or juridical, including
government owned or controlled corporations, except local water
districts, cooperatives duly registered under RA 6938, non-stock and
non-profit hospitals and educational institutions, business enterprises
certified by the Board of Investments (BOI) as pioneer or non-pioneer
for a period of six (6) and four (4) years, respectively, … are hereby
withdrawn effective upon approval of this Code (Emphasis supplied).
Conformably with the City’s Revenue Code, new tax declarations for
Bayantel’s real properties in Quezon City were issued by the City
Assessor and were received by Bayantel on August 13, 1998, except
one (Tax Declaration No. 124-01013) which was received on July 14,
1999.
Meanwhile, on March 16, 1995, Rep. Act No. 7925,6 otherwise known
as the "Public Telecommunications Policy Act of the Philippines,"
envisaged to level the playing field among telecommunications
companies, took effect. Section 23 of the Act provides:
SEC. 23. Equality of Treatment in the Telecommunications Industry. –
Any advantage, favor, privilege, exemption, or immunity granted under
existing franchises, or may hereafter be granted, shall ipso facto
become part of previously granted telecommunications franchises and
shall be accorded immediately and unconditionally to the grantees of
such franchises: Provided, however, That the foregoing shall neither
apply to nor affect provisions of telecommunications franchises
concerning territory covered by the franchise, the life span of the
franchise, or the type of service authorized by the franchise.
On January 7, 1999, Bayantel wrote the office of the City Assessor
seeking the exclusion of its real properties in the city from the roll of
taxable real properties. With its request having been denied, Bayantel
interposed an appeal with the Local Board of Assessment Appeals
(LBAA). And, evidently on its firm belief of its exempt status, Bayantel
did not pay the real property taxes assessed against it by the Quezon
City government.
On account thereof, the Quezon City Treasurer sent out notices of
delinquency for the total amount of P43,878,208.18, followed by the
issuance of several warrants of levy against Bayantel’s properties
preparatory to their sale at a public auction set on July 30, 2002.
Threatened with the imminent loss of its properties, Bayantel
immediately withdrew its appeal with the LBAA and instead filed with
the RTC of Quezon City a petition for prohibition with an urgent
application for a temporary restraining order (TRO) and/or writ of
preliminary injunction, thereat docketed as Civil Case No. Q-02-47292,
which was raffled to Branch 227 of the court.
On July 29, 2002, or in the eve of the public auction scheduled the
following day, the lower court issued a TRO, followed, after due
hearing, by a writ of preliminary injunction via its order of August 20,
2002.
And, having heard the parties on the merits, the same court came out
with its challenged Decision of June 6, 2003, the dispositive portion of
which reads:
WHEREFORE, premises considered, pursuant to the enabling franchise
under Section 11 of Republic Act No. 7633, the real estate properties
and buildings of petitioner [now, respondent Bayantel] which have
been admitted to be used in the operation of petitioner’s franchise
described in the following tax declarations are hereby DECLARED
exempt from real estate taxation:
(1) Tax Declaration No. D-096-04071 –
(2) Tax Declaration No. D-096-04074 –
(3) Tax Declaration No. D-124-01013 –
(4) Tax Declaration No. D-011-10810 –
(5) Tax Declaration No. D-011-10811 –
(6) Tax Declaration No. D-011-10809 –
(7) Tax Declaration No. D-124-00941 –
(8) Tax Declaration No. D-124-00940 –
(9) Tax Declaration No. D-124-00939 –
(10) Tax Declaration No. D-096-04072 –
(11) Tax Declaration No. D-096-04073 –
(12) Tax Declaration No. D-011-11540 –
The preliminary prohibitory injunction issued in the August 20, 2002
Order of this Court is hereby made permanent. Since this is a resolution
of a purely legal issue, there is no pronouncement as to costs.
SO ORDERED.
Their motion for reconsideration having been denied by the court in its
Order dated December 30, 2003, petitioners elevated the case directly
to this Court on pure questions of law, ascribing to the lower court the
following errors:
I. [I]n declaring the real properties of respondent exempt from real
property taxes notwithstanding the fact that the tax exemption
granted to Bayantel in its original franchise had been withdrawn by the
[LGC] and that the said exemption was not restored by the enactment
of RA 7633.
II. [In] declaring the real properties of respondent exempt from real
property taxes notwithstanding the enactment of the [QCRC] which
withdrew the tax exemption which may have been granted by RA 7633.
III. [In] declaring the real properties of respondent exempt from real
property taxes notwithstanding the vague and ambiguous grant of tax
exemption provided under Section 11 of RA 7633.
IV. [In] declaring the real properties of respondent exempt from real
property taxes notwithstanding the fact that [it] had failed to exhaust
administrative remedies in its claim for real property tax exemption.
(Words in bracket added.)
As we see it, the errors assigned may ultimately be reduced to two (2)
basic issues, namely:
1. Whether or not Bayantel’s real properties in Quezon City are exempt
from real property taxes under its legislative franchise; and
2. Whether or not Bayantel is required to exhaust administrative
remedies before seeking judicial relief with the trial court.
We shall first address the second issue, the same being procedural in
nature.
Petitioners argue that Bayantel had failed to avail itself of the
administrative remedies provided for under the LGC, adding that the
trial court erred in giving due course to Bayantel’s petition for
prohibition. To petitioners, the appeal mechanics under the LGC
constitute Bayantel’s plain and speedy remedy in this case.
The Court does not agree.
Petitions for prohibition are governed by the following provision of
Rule 65 of the Rules of Court:
SEC. 2. Petition for prohibition. – When the proceedings of any tribunal,
… are without or in excess of its or his jurisdiction, or with grave abuse
of discretion amounting to lack or excess of jurisdiction, and there is no
appeal or any other plain, speedy, and adequate remedy in the
ordinary course of law, a person aggrieved thereby may file a verified
petition in the proper court, alleging the facts with certainty and
praying that judgment be rendered commanding the respondent to
desist from further proceedings in the action or matter specified
therein, or otherwise, granting such incidental reliefs as law and justice
may require.
With the reality that Bayantel’s real properties were already levied
upon on account of its nonpayment of real estate taxes thereon, the
Court agrees with Bayantel that an appeal to the LBAA is not a speedy
and adequate remedy within the context of the aforequoted Section 2
of Rule 65. This is not to mention of the auction sale of said properties
already scheduled on July 30, 2002.
Moreover, one of the recognized exceptions to the exhaustion- of-
administrative remedies rule is when, as here, only legal issues are to
be resolved. In fact, the Court, cognizant of the nature of the questions
presently involved, gave due course to the instant petition. As the
Court has said in Ty vs. Trampe:7
xxx. Although as a rule, administrative remedies must first be
exhausted before resort to judicial action can prosper, there is a well-
settled exception in cases where the controversy does not involve
questions of fact but only of law. xxx.
Lest it be overlooked, an appeal to the LBAA, to be properly considered,
required prior payment under protest of the amount of
P43,878,208.18, a figure which, in the light of the then prevailing Asian
financial crisis, may have been difficult to raise up. Given this reality, an
appeal to the LBAA may not be considered as a plain, speedy and
adequate remedy. It is thus understandable why Bayantel opted to
withdraw its earlier appeal with the LBAA and, instead, filed its petition
for prohibition with urgent application for injunctive relief in Civil Case
No. Q-02-47292. The remedy availed of by Bayantel under Section 2,
Rule 65 of the Rules of Court must be upheld.
This brings the Court to the more weighty question of whether or not
Bayantel’s real properties in Quezon City are, under its franchise,
exempt from real property tax.
The lower court resolved the issue in the affirmative, basically owing to
the phrase "exclusive of this franchise" found in Section 11 of
Bayantel’s amended franchise, Rep. Act No. 7633. To petitioners,
however, the language of Section 11 of Rep. Act No. 7633 is neither
clear nor unequivocal. The elaborate and extensive discussion devoted
by the trial court on the meaning and import of said phrase, they add,
suggests as much. It is petitioners’ thesis that Bayantel was in no time
given any express exemption from the payment of real property tax
under its amendatory franchise.
There seems to be no issue as to Bayantel’s exemption from real estate
taxes by virtue of the term "exclusive of the franchise" qualifying the
phrase "same taxes on its real estate, buildings and personal property,"
found in Section 14, supra, of its franchise, Rep. Act No. 3259, as
originally granted.
The legislative intent expressed in the phrase "exclusive of this
franchise" cannot be construed other than distinguishing between two
(2) sets of properties, be they real or personal, owned by the
franchisee, namely, (a) those actually, directly and exclusively used in
its radio or telecommunications business, and (b) those properties
which are not so used. It is worthy to note that the properties subject
of the present controversy are only those which are admittedly falling
under the first category.
To the mind of the Court, Section 14 of Rep. Act No. 3259 effectively
works to grant or delegate to local governments of Congress’ inherent
power to tax the franchisee’s properties belonging to the second group
of properties indicated above, that is, all properties which, "exclusive
of this franchise," are not actually and directly used in the pursuit of its
franchise. As may be recalled, the taxing power of local governments
under both the 1935 and the 1973 Constitutions solely depended upon
an enabling law. Absent such enabling law, local government units
were without authority to impose and collect taxes on real properties
within their respective territorial jurisdictions. While Section 14 of Rep.
Act No. 3259 may be validly viewed as an implied delegation of power
to tax, the delegation under that provision, as couched, is limited to
impositions over properties of the franchisee which are not actually,
directly and exclusively used in the pursuit of its franchise. Necessarily,
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.
Bayantel’s franchise being national in character, the "exemption" thus
granted under Section 14 of Rep. Act No. 3259 applies to all its real or
personal properties found anywhere within the Philippine archipelago.
However, with the LGC’s taking effect on January 1, 1992, Bayantel’s
"exemption" from real estate taxes for properties of whatever kind
located within the Metro Manila area was, by force of Section 234 of
the Code, supra, expressly withdrawn. But, not long thereafter,
however, or on July 20, 1992, Congress passed Rep. Act No. 7633
amending Bayantel’s original franchise. Worthy of note is that Section
11 of Rep. Act No. 7633 is a virtual reenacment of the tax provision, i.e.,
Section 14, supra, of Bayantel’s original franchise under Rep. Act No.
3259. Stated otherwise, 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.
The Court has taken stock of the fact that by virtue of Section 5, Article
X of the 1987 Constitution,8 local governments are empowered to levy
taxes. And pursuant to this constitutional empowerment, juxtaposed
with Section 2329 of the LGC, the Quezon City government enacted in
1993 its local Revenue Code, imposing real property tax on all real
properties found within its territorial jurisdiction. And as earlier stated,
the City’s Revenue Code, just like the LGC, expressly withdrew, under
Section 230 thereof, supra, all tax exemption privileges in general.
This thus raises the question of whether or not the City’s Revenue Code
pursuant to which the city treasurer of Quezon City levied real property
taxes against Bayantel’s real properties located within the City
effectively withdrew the tax exemption enjoyed by Bayantel under its
franchise, as amended.
Bayantel answers the poser in the negative arguing that once again it
is only "liable to pay the same taxes, as any other persons or
corporations on all its real or personal properties, exclusive of its
franchise."
Bayantel’s posture is well-taken. While the system of local government
taxation has changed with the onset of the 1987 Constitution, the
power of local government units to tax is still limited. As we explained
in Mactan Cebu International Airport Authority:10
The power to tax is primarily vested in the Congress; however, in our
jurisdiction, it may be exercised by local legislative bodies, no longer
merely be virtue of a valid delegation as before, but pursuant to direct
authority conferred by Section 5, Article X of the Constitution. Under
the latter, the exercise of the power may be subject to such guidelines
and limitations as the Congress may provide which, however, must be
consistent with the basic policy of local autonomy. (at p. 680; Emphasis
supplied.)
Clearly then, while a new slant on the subject of local taxation now
prevails in the sense that the former doctrine of local government
units’ delegated power to tax had been effectively modified with
Article X, Section 5 of the 1987 Constitution now in place, .the basic
doctrine on local taxation remains essentially the same. For as the
Court stressed in Mactan, "the power to tax is [still] primarily vested in
the Congress."
This new perspective is best articulated by Fr. Joaquin G. Bernas, S.J.,
himself a Commissioner of the 1986 Constitutional Commission which
crafted the 1987 Constitution, thus:
What is the effect of Section 5 on the fiscal position of municipal
corporations? Section 5 does not change the doctrine that municipal
corporations do not possess inherent powers of taxation. What it does
is to confer municipal corporations a general power to levy taxes and
otherwise create sources of revenue. They no longer have to wait for a
statutory grant of these powers. The power of the legislative authority
relative to the fiscal powers of local governments has been reduced to
the authority to impose limitations on municipal powers. Moreover,
these limitations must be "consistent with the basic policy of local
autonomy." The important legal effect of Section 5 is thus to reverse
the principle that doubts are resolved against municipal corporations.
Henceforth, in interpreting statutory provisions on municipal fiscal
powers, doubts will be resolved in favor of municipal corporations. It is
understood, however, that taxes imposed by local government must be
for a public purpose, uniform within a locality, must not be
confiscatory, and must be within the jurisdiction of the local unit to
pass.11 (Emphasis supplied).
In net effect, the controversy presently before the Court involves, at
bottom, a clash between the inherent taxing power of the legislature,
which necessarily includes the power to exempt, and the local
government’s delegated power to tax under the aegis of the 1987
Constitution.
Now to go back to the Quezon City Revenue Code which imposed real
estate taxes on all real properties within the city’s territory and
removed exemptions theretofore "previously granted to, or presently
enjoyed by all persons, whether natural or juridical ….,"12 there can
really be no dispute that the power of the Quezon City Government to
tax is limited by Section 232 of the LGC which expressly provides that
"a province or city or municipality within the Metropolitan Manila Area
may levy an annual ad valorem tax on real property such as land,
building, machinery, and other improvement not hereinafter
specifically exempted." Under this law, the Legislature highlighted its
power to thereafter exempt certain realties from the taxing power of
local government units. An interpretation denying Congress such
power to exempt would reduce the phrase "not hereinafter specifically
exempted" as a pure jargon, without meaning whatsoever. Needless to
state, such absurd situation is unacceptable.
For sure, in Philippine Long Distance Telephone Company, Inc. (PLDT)
vs. City of Davao,13 this Court has upheld the power of Congress to
grant exemptions over the power of local government units to impose
taxes. There, the Court wrote:
Indeed, the grant of taxing powers to local government units under the
Constitution and the LGC does not affect the power of Congress to
grant exemptions to certain persons, pursuant to a declared national
policy. The legal effect of the constitutional grant to local governments
simply means that in interpreting statutory provisions on municipal
taxing powers, doubts must be resolved in favor of municipal
corporations. (Emphasis supplied.)
As we see it, then, the issue in this case no longer dwells on whether
Congress has the power to exempt Bayantel’s properties from realty
taxes by its enactment of Rep. Act No. 7633 which amended Bayantel’s
original franchise. The more decisive question turns on whether
Congress actually did exempt Bayantel’s properties at all by virtue of
Section 11 of Rep. Act No. 7633.

Admittedly, Rep. Act No. 7633 was enacted subsequent to the LGC.
Perfectly aware that the LGC has already withdrawn Bayantel’s 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 Bayantel’s
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 LGC’s delegated taxing power, all of the franchisee’s
(Bayantel’s) properties that are actually, directly and exclusively used
in the pursuit of its franchise.

WHEREFORE, the petition is DENIED.

No pronouncement as to costs.

SO ORDERED.

FIRST DIVISION
G.R. No. 166134 June 29, 2010
ANGELES CITY, Petitioner,
vs.
ANGELES CITY ELECTRIC CORPORATION and REGIONAL TRIAL COURT
BRANCH 57, ANGELES CITY, Respondents.
DEL CASTILLO, J.:
The prohibition on the issuance of a writ of injunction to enjoin the
collection of taxes applies only to national internal revenue taxes, and
not to local taxes.
This Petition1 for Certiorari under Rule 65 of the Rules of Court seeks
to set aside the Writ of Preliminary Injunction issued by the Regional
Trial Court (RTC) of Angeles City, Branch 57, in Civil Case No. 11401,
enjoining Angeles City and its City Treasurer from levying, seizing,
disposing and selling at public auction the properties owned by Angeles
Electric Corporation (AEC).
Factual Antecedents
On June 18, 1964, AEC was granted a legislative franchise under
Republic Act No. (RA) 40792 to construct, maintain and operate an
electric light, heat, and power system for the purpose of generating
and distributing electric light, heat and power for sale in Angeles City,
Pampanga. Pursuant to Section 3-A thereof,3 AEC’s payment of
franchise tax for gross earnings from electric current sold was in lieu of
all taxes, fees and assessments.
On September 11, 1974, Presidential Decree No. (PD) 551 reduced the
franchise tax of electric franchise holders. Section 1 of PD 551 provided
that:
SECTION 1. Any provision of law or local ordinance to the contrary
notwithstanding, the franchise tax payable by all grantees of franchises
to generate, distribute and sell electric current for light, heat and
power shall be two percent (2%) of their gross receipts received from
the sale of electric current and from transactions incident to the
generation, distribution and sale of electric current.
Such franchise tax shall be payable to the Commissioner of Internal
Revenue or his duly authorized representative on or before the
twentieth day of the month following the end of each calendar quarter
or month as may be provided in the respective franchise or pertinent
municipal regulation and shall, any provision of the Local Tax Code or
any other law to the contrary notwithstanding, be in lieu of all taxes
and assessments of whatever nature imposed by any national or local
authority on earnings, receipts, income and privilege of generation,
distribution and sale of electric current.
On January 1, 1992, RA 7160 or the Local Government Code (LGC) of
1991 was passed into law, conferring upon provinces and cities the
power, among others, to impose tax on businesses enjoying franchise.4
In accordance with the LGC, the Sangguniang Panlungsod of Angeles
City enacted on December 23, 1993 Tax Ordinance No. 33, S-93,
otherwise known as the Revised Revenue Code of Angeles City
(RRCAC).
On February 7, 1994, a petition seeking the reduction of the tax rates
and a review of the provisions of the RRCAC was filed with the
Sangguniang Panlungsod by Metro Angeles Chamber of Commerce and
Industry Inc. (MACCI) of which AEC is a member. There being no action
taken by the Sangguniang Panlungsod on the matter, MACCI elevated
the petition5 to the Department of Finance, which referred the same
to the Bureau of Local Government Finance (BLGF). In the petition,
MACCI alleged that the RRCAC is oppressive, excessive, unjust and
confiscatory; that it was published only once, simultaneously on
January 22, 1994; and that no public hearings were conducted prior to
its enactment. Acting on the petition, the BLGF issued a First
Indorsement6 to the City Treasurer of Angeles City, instructing the
latter to make representations with the Sangguniang Panlungsod for
the appropriate amendment of the RRCAC in order to ensure
compliance with the provisions of the LGC, and to make a report on the
action taken within five days.
Thereafter, starting July 1995, AEC has been paying the local franchise
tax to the Office of the City Treasurer on a quarterly basis, in addition
to the national franchise tax it pays every quarter to the Bureau of
Internal Revenue (BIR).
Proceedings before the City Treasurer
On January 22, 2004, the City Treasurer issued a Notice of Assessment7
to AEC for payment of business tax, license fee and other charges for
the period 1993 to 2004 in the total amount of ₱94,861,194.10. Within
the period prescribed by law, AEC protested the assessment claiming
that:
(a) pursuant to RA 4079, it is exempt from paying local business tax;
(b) since it is already paying franchise tax on business, the payment of
business tax would result in double taxation;
(c) the period to assess had prescribed because under the LGC, taxes
and fees can only be assessed and collected within five (5) years from
the date they become due; and
(d) the assessment and collection of taxes under the RRCAC cannot be
made retroactive to 1993 or prior to its effectivity.8
On February 17, 2004, the City Treasurer denied the protest for lack of
merit and requested AEC to settle its tax liabilities.9
Proceedings before the RTC
Aggrieved, AEC appealed the denial of its protest to the RTC of Angeles
City via a Petition for Declaratory Relief,10 docketed as Civil Case No.
11401.
On April 5, 2004, the City Treasurer levied on the real properties of
AEC.11 A Notice of Auction Sale12 was published and posted
announcing that a public auction of the levied properties of AEC would
be held on May 7, 2004.
This prompted AEC to file with the RTC, where the petition for
declaratory relief was pending, an Urgent Motion for Issuance of
Temporary Restraining Order and/or Writ of Preliminary Injunction13
to enjoin Angeles City and its City Treasurer from levying, annotating
the levy, seizing, confiscating, garnishing, selling and disposing at public
auction the properties of AEC.
Meanwhile, in response to the petition for declaratory relief filed by
AEC, Angeles City and its City Treasurer filed an Answer with
Counterclaim14 to which AEC filed a Reply.15
After due notice and hearing, the RTC issued a Temporary Restraining
Order (TRO)16 on May 4, 2004, followed by an Order17 dated May 24,
2004 granting the issuance of a Writ of Preliminary Injunction,
conditioned upon the filing of a bond in the amount of ₱10,000,000.00.
Upon AEC’s posting of the required bond, the RTC issued a Writ of
Preliminary Injunction on May 28, 2004,18 which was amended on May
31, 2004 due to some clerical errors.19
On August 5, 2004, Angeles City and its City Treasurer filed a "Motion
for Dissolution of Preliminary Injunction and Motion for
Reconsideration of the Order dated May 24, 2004,"20 which was
opposed by AEC.21
Finding no compelling reason to disturb and reconsider its previous
findings, the RTC denied the joint motion on October 14, 2004.22
Issue
Being a special civil action for certiorari, the issue in the instant case is
limited to the determination of whether the RTC gravely abused its
discretion in issuing the writ of preliminary injunction enjoining
Angeles City and its City Treasurer from levying, selling, and disposing
the properties of AEC. All other matters pertaining to the validity of the
tax assessment and AEC’s tax exemption must therefore be left for the
determination of the RTC where the main case is pending decision.
Petitioner’s Arguments
Petitioner’s main argument is that the collection of taxes cannot be
enjoined by the RTC, citing Valley Trading Co., Inc. v. Court of First
Instance of Isabela, Branch II,23 wherein the lower court’s denial of a
motion for the issuance of a writ of preliminary injunction to enjoin the
collection of a local tax was upheld. Petitioner further reasons that
since the levy and auction of the properties of a delinquent taxpayer
are proper and lawful acts specifically allowed by the LGC, these cannot
be the subject of an injunctive writ. Petitioner likewise insists that AEC
must first pay the tax before it can protest the assessment. Finally,
petitioner contends that the tax exemption claimed by AEC has no legal
basis because RA 4079 has been expressly repealed by the LGC.
Private respondent’s Arguments
Private respondent AEC on the other hand asserts that there was no
grave abuse of discretion on the part of the RTC in issuing the writ of
preliminary injunction because it was issued after due notice and
hearing, and was necessary to prevent the petition from becoming
moot. In addition, AEC claims that the issuance of the writ of injunction
was proper since the tax assessment issued by the City Treasurer is not
yet final, having been seasonably appealed pursuant to Section 19524
of the LGC. AEC likewise points out that following the case of Pantoja
v. David,25 proceedings to invalidate a warrant of distraint and levy to
restrain the collection of taxes do not violate the prohibition against
injunction to restrain the collection of taxes because the proceedings
are directed at the right of the City Treasurer to collect the tax by
distraint or levy. As to its tax liability, AEC maintains that it is exempt
from paying local business tax. In any case, AEC counters that the issue
of whether it is liable to pay the assessed local business tax is a factual
issue that should be determined by the RTC and not by the Supreme
Court via a petition for certiorari under Rule 65 of the Rules of Court.
Our Ruling
We find the petition bereft of merit.
The LGC does not specifically prohibit an injunction enjoining the
collection of taxes
A principle deeply embedded in our jurisprudence is that taxes being
the lifeblood of the government should be collected promptly,26
without unnecessary hindrance27 or delay.28 In line with this principle,
the National Internal Revenue Code of 1997 (NIRC) expressly provides
that no court shall have the authority to grant an injunction to restrain
the collection of any national internal revenue tax, fee or charge
imposed by the code.29 An exception to this rule obtains only when in
the opinion of the Court of Tax Appeals (CTA) the collection thereof
may jeopardize the interest of the government and/or the taxpayer.30
The situation, however, is different in the case of the collection of local
taxes as there is no express provision in the LGC prohibiting courts from
issuing an injunction to restrain local governments from collecting
taxes. Thus, in the case of Valley Trading Co., Inc. v. Court of First
Instance of Isabela, Branch II, cited by the petitioner, we ruled that:
Unlike the National Internal Revenue Code, the Local Tax Code31 does
not contain any specific provision prohibiting courts from enjoining the
collection of local taxes. Such statutory lapse or intent, however it may
be viewed, may have allowed preliminary injunction where local taxes
are involved but cannot negate the procedural rules and requirements
under Rule 58.32
In light of the foregoing, petitioner’s reliance on the above-cited case
to support its view that the collection of taxes cannot be enjoined is
misplaced. The lower court’s denial of the motion for the issuance of a
writ of preliminary injunction to enjoin the collection of the local tax
was upheld in that case, not because courts are prohibited from
granting such injunction, but because the circumstances required for
the issuance of writ of injunction were not present.
Nevertheless, it must be emphasized that although there is no express
prohibition in the LGC, injunctions enjoining the collection of local taxes
are frowned upon. Courts therefore should exercise extreme caution in
issuing such injunctions.
No grave abuse of discretion was committed by the RTC
Section 3, Rule 58, of the Rules of Court lays down the requirements
for the issuance of a writ of preliminary injunction, viz:
(a) That the applicant is entitled to the relief demanded, and the whole
or part of such relief consists in restraining the commission or
continuance of the acts complained of, or in the performance of an act
or acts, either for a limited period or perpetually;
(b) That the commission, continuance or non-performance of the act
or acts complained of during the litigation would probably work
injustice to the applicant; or
(c) That a party, court, or agency or a person is doing, threatening, or
attempting to do, or is procuring or suffering to be done, some act or
acts probably in violation of the rights of the applicant respecting the
subject of the action or proceeding, and tending to render the
judgment ineffectual.
Two requisites must exist to warrant the issuance of a writ of
preliminary injunction, namely: (1) the existence of a clear and
unmistakable right that must be protected; and (2) an urgent and
paramount necessity for the writ to prevent serious damage.33
In issuing the injunction, the RTC ratiocinated that:
It is very evident on record that petitioner34 resorted and filed an
urgent motion for issuance of a temporary restraining order and
preliminary injunction to stop the scheduled auction sale only when a
warrant of levy was issued and published in the newspaper setting the
auction sale of petitioner’s property by the City Treasurer, merely few
weeks after the petition for declaratory relief has been filed, because if
the respondent will not be restrained, it will render this petition moot
and academic. To the mind of the Court, since there is no other plain,
speedy and adequate remedy available to the petitioner in the ordinary
course of law except this application for a temporary restraining order
and/or writ of preliminary injunction to stop the auction sale and/or to
enjoin and/or restrain respondents from levying, annotating the levy,
seizing, confiscating, garnishing, selling and disposing at public auction
the properties of petitioner, or otherwise exercising other
administrative remedies against the petitioner and its properties, this
alone justifies the move of the petitioner in seeking the injunctive
reliefs sought for.
Petitioner in its petition is questioning the assessment or the ruling of
the City Treasurer on the business tax and fees, and not the local
ordinance concerned. This being the case, the Court opines that notice
is not required to the Solicitor General since what is involved is just a
violation of a private right involving the right of ownership and
possession of petitioner’s properties. Petitioner, therefore, need not
comply with Section 4, Rule 63 requiring such notice to the Office of
the Solicitor General.
The Court is fully aware of the Supreme Court pronouncement that
injunction is not proper to restrain the collection of taxes. The issue
here as of the moment is the restraining of the respondent from
pursuing its auction sale of the petitioner’s properties. The right of
ownership and possession of the petitioner over the properties subject
of the auction sale is at stake.
Respondents assert that not one of the witnesses presented by the
petitioner have proven what kind of right has been violated by the
respondent, but merely mentioned of an injury which is only a scenario
based on speculation because of petitioner’s claim that electric power
may be disrupted.
Engr. Abordo’s testimony reveals and even his Affidavit Exhibit "S"
showed that if the auction sale will push thru, petitioner will not only
lose control and operation of its facility, but its employees will also be
denied access to equipments vital to petitioner’s operations, and since
only the petitioner has the capability to operate Petersville sub station,
there will be a massive power failure or blackout which will adversely
affect business and economy, if not lives and properties in Angeles City
and surrounding communities.
Petitioner, thru its witnesses, in the hearing of the temporary
restraining order, presented sufficient and convincing evidence proving
irreparable damages and injury which were already elaborated in the
temporary restraining order although the same may be realized only if
the auction sale will proceed. And unless prevented, restrained, and
enjoined, grave and irreparable damage will be suffered not only by the
petitioner but all its electric consumers in Angeles, Clark, Dau and
Bacolor, Pampanga.

The purpose of injunction is to prevent injury and damage from being

incurred, otherwise, it will render any judgment in this case ineffectual.

"As an extraordinary remedy, injunction is calculated to preserve or

maintain the status quo of things and is generally availed of to prevent
actual or threatened acts, until the merits of the case can be heard"
(Cagayan de Oro City Landless Res. Assn. Inc. vs. CA, 254 SCRA 220)

It appearing that the two essential requisites of an injunction have

been satisfied, as there exists a right on the part of the petitioner to be
protected, its right[s] of ownership and possession of the properties
subject of the auction sale, and that the acts (conducting an auction
sale) against which the injunction is to be directed, are violative of the
said rights of the petitioner, the Court has no other recourse but to
grant the prayer for the issuance of a writ of preliminary injunction
considering that if the respondent will not be restrained from doing the
acts complained of, it will preempt the Court from properly
adjudicating on the merits the various issues between the parties, and
will render moot and academic the proceedings before this court.35

As a rule, the issuance of a preliminary injunction rests entirely within

the discretion of the court taking cognizance of the case and will not be
interfered with, except where there is grave abuse of discretion
committed by the court.36 For grave abuse of discretion to prosper as
a ground for certiorari, it must be demonstrated that the lower court
or tribunal has exercised its power in an arbitrary and despotic manner,
by reason of passion or personal hostility, and it must be patent and
gross as would amount to an evasion or to a unilateral refusal to
perform the duty enjoined or to act in contemplation of law.37 In other
words, mere abuse of discretion is not enough.381avvph!1

Guided by the foregoing, we find no grave abuse of discretion on the

part of the RTC in issuing the writ of injunction. Petitioner, who has the
burden to prove grave abuse of discretion,39 failed to show that the
RTC acted arbitrarily and capriciously in granting the injunction. Neither
was petitioner able to prove that the injunction was issued without any
factual or legal justification. In assailing the injunction, petitioner
primarily relied on the prohibition on the issuance of a writ of
injunction to restrain the collection of taxes. But as we have already
said, there is no such prohibition in the case of local taxes. Records also
show that before issuing the injunction, the RTC conducted a hearing
where both parties were given the opportunity to present their
arguments. During the hearing, AEC was able to show that it had a clear
and unmistakable legal right over the properties to be levied and that
it would sustain serious damage if these properties, which are vital to
its operations, would be sold at public auction. As we see it then, the
writ of injunction was properly issued.

A final note. While we are mindful that the damage to a taxpayer’s

property rights generally takes a back seat to the paramount need of
the State for funds to sustain governmental functions,40 this rule finds
no application in the instant case where the disputed tax assessment is
not yet due and demandable. Considering that AEC was able to appeal
the denial of its protest within the period prescribed under Section 195
of the LGC, the collection of business taxes41 through levy at this time
is, to our mind, hasty, if not premature.42 The issues of tax exemption,
double taxation, prescription and the alleged retroactive application of
the RRCAC, raised in the protest of AEC now pending with the RTC,
must first be resolved before the properties of AEC can be levied. In the
meantime, AEC’s rights of ownership and possession must be
respected.

WHEREFORE, the petition is hereby DISMISSED.

SO ORDERED.