Professional Documents
Culture Documents
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* SECOND DIVISION.
593
594
TINGA, J.:
1
This is a petition filed under Rule 45
2
seeking to review and
set aside the 26 May 1998 Decision of the Court of Appeals
in CA-G.R. SP No. 390453
and to annul and set aside the 24
April 1995 Decision of the Regional Trial Court (RTC),
Branch 4, Bohol, in Civil Case No. 4577.
Petitioners Teodoro Berdin, Vicente Alegarbes, and
Abelardo de Vera (petitioners), are the President, Vice
President, and Adviser, respectively, of the Tubigon Market
Vendors Association (Association), an association of
vendors doing business in Tubigon, Bohol. Respondents
Eufracio A. Mascariñas, Narcisa L. Balatayo, and Lt.
Abner Catalla, on the other hand, were, at the time Civil
Case No. 4577 was filed, the Municipal Mayor, Treasurer,
and the INP Station Commander, respectively, of Tubigon,
Bohol.
On 14 December 1988, the Sangguniang4 Bayan of
Tubigon enacted Tax Ordinance No. 88-11-36 increasing
the taxes and fees of the municipality, to take effect on 1
January 1989.
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For his part, the Provincial Treasurer would again write the
Municipal Treasurer for the latter official to transmit a copy of the
ordinance so that the same may be reviewed and to comment and answer
the protest of the Association (Id., at p. 212).
9 Id., at p. 269. It appears that a copy of the ordinance had earlier
been submitted to said official on 29 December 1988 for review.
10 Id., at pp. 204-207.
11 Id., at p. 208.
12 Id., at p. 213.
13 Id., at pp. 32-38. The complaint in Civil Case No. 4577 was
amended (with leave of Court) on 2 February 1990 (Id., at pp. 75-81). The
following allegations were added:
17. That in addition to the grounds set forth in their protest, the ordinance in
question have [sic] been enacted without the mandatory public hearing which is
a condition precedent under Secs. 49 and 50 of the Local Tax Code since the
same refer to similar tax or fee not specifically enumerated and/or not provided
by law; to the failure to comply with Sec. 5 of Executive Order No. 249 which
took effect July 1987
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impl[e]mented on Oct. 22, 1987, for the classification to be the basis for fixing
the maximum tax ceilings imposable;
xxxx
22. x x x Efforts were exerted to ascertain whether the ordinance was
published in a newspaper of general circulation or posted as required by law,
but Plaintiffs were not aware thereof; (Id., at pp. 78-79.)
599
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17 Rollo, p. 272. The Local Tax Code, as amended by P.D. No. 426,
became effective on 30 March 1974 and has been superseded by the Local
Government Code.
18 Id., at pp. 221-223.
19 Id., at p. 224.
20 Id., at p. 253. Said official wrote the Sangguniang Bayan.
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Revenue Ordinance No. 90-01-54 on 5 January 1990 to
amend the suspended provisions of Tax Ordinance No. 88-
1136. The Provincial Treasurer found Municipal Revenue
Ordinance No. 90-01-54 to be in conformity with the rates
authorized under the Local Tax Code and accordingly lifted
the suspension of the provisions of Tax Ordinance No. 88-
11-36 that were previously suspended and declared that
the same, as amended by Municipal Revenue Ordinance 22
No. 90-01-54, may already be given force and effect.
Thereafter, on 24 January 1990, the Provincial
Treasurer wrote petitioners informing the latter of his
findings that Tax Ordinance Nos. 88-11-36 and 89-10-49
were both in order and in accord with Art. 3 of P.D. No. 231
and further explaining that under Sec. 49 of P.D. No. 231, a
public hearing is required only when „the local board or
council may exercise the power to impose a tax or fee on a
tax base or subject similar to those authorized in [the Local
Tax Code] but which may not have been specifically
enumerated herein,‰ a23fact not present in the case of the
questioned ordinances.
Petitioners wrote the Provincial Treasurer on 31
January 1990 informing the latter that the Provincial
Fiscal already made a contrary ruling on Tax Ordinance
No. 89-10-49 and
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Pursuant to Section 30 of P.D. 231, as amended, the rates fixed for the rentals
of stalls, booths and block tiendas are also hereby approved it appearing that
the same are reasonable.
The Fishery rental fees maybe [sic] given due course provided that prior
approval from the Bureau of Fisheries and Aquatic Resources has been
obtained, pursuant to the provisions of P.D. 704, as amended.
Therefore, the said ordinance maybe [sic] given force and effect not earlier
than the date fixed for its effectivity, except those sections and articles which
are declared to be suspended.‰
601
that since the municipality did not appeal the said ruling,
the same became final. Petitioners further requested the
Provincial Treasurer to transmit all records to the DOF for
purposes of appealing the ruling of the Provincial
Treasurer and for a24 review of the questioned ordinances by
a higher authority.
Petitioners elevated the finding of the Provincial
Treasurer to the Secretary of Finance on 31 January 1990.
They also requested the suspension of the implementation
of Tax25 Ordinance No. 88-11-36 pending its review by said
office. On 30 March 1990, Gregorio A. Barretto, Director
III, Bureau of Local Government Finance of the DOF,
referred the appeal to the Provincial 26
Treasurer for
comment and/or recommendation. The Provincial
Treasurer informed the DOF that his office reviewed and
approved the ordinance after the rates have been found to
be just and reasonable and that, for those rates initially
found by him to have exceeded the maximum authorized by
law, an amendatory
27
ordinance was enacted to meet the
objection.
Thereafter, the Deputy Director and Officer-in-Charge of
the Bureau of Local Government Finance, by authority of
the Secretary of Finance, informed the Provincial
Treasurer that their department cannot review
28
Ordinance
No. 88-11-36 as requested by petitioners. The Provincial
Treasurer transmit-
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24 Id., at p. 254.
25 Id., at p. 255.
26 See 1st Indorsement, Id., at p. 261.
27 See 2nd Indorsement, Id., at p. 260.
28 See 3rd Indorsement, Id., at pp. 257-258. Said official wrote:
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ted a copy of this letter to petitioners.
Four years
30
later, on 24 April 1995, the RTC rendered a
Decision in Civil Case No. 4577, the dispositive portion of
which states:
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vincial Treasurer, by virtue of its power to review, may suspend the ordinance
in whole or in part on the ground that the tax or fee therein levied or imposed
is unjust, excessive, oppressive, confiscatory, or not among those that a
particular local government may impose or when the ordinance is contrary to
declared national policy.
A formal protest against a tax ordinance may be filed based on the same
grounds for suspending an ordinance pursuant to Section 45 of the Code. x x x
603
32
Petitioners filed a Notice of Appeal with the RTC, which
gave due course to the appeal and ordered the 33transmittal
of the case records to the Court of Appeals (CA).
On 2634May 1998, the Fifth Division of the CA rendered a
Decision affirming in toto the decision of the RTC. Their 35
motion for reconsideration having been denied,
petitioners now come to this Court via this Petition for
Review under Rule 45 of the Rules of Court. 36
The issues raised by petitioners in their Memorandum
may be summarized as follows: (1) whether the ordinances
are valid and enforceable; (2) whether publication was
necessary; and (3) whether there was exhaustion of
administrative remedies.
The petition is meritorious but only in regard to the
need for publication.
Petitioners adopt a three-level argument with regard to
the validity and enforceability of Tax Ordinance No. 88-11-
36. First, they assert the ordinance does not exist by virtue
of respondent officialsÊ delay in furnishing them with a copy
of the questioned ordinance. Second, if Tax Ordinance No.
8811-36 did exist, it was not validly enacted for failure to
hold public hearings and to have the same published
pursuant to Sec. 43 of the Local Tax Code. Finally,
petitioners claim, even if Tax Ordinance No. 88-11-36 was
validly enacted, the same contains objectionable provisions
which would render it invalid and unenforceable.
PetitionersÊ misgivings on the existence of Tax
Ordinance No. 88-11-36 are baseless. The reason for the
delay was ade-
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32 Id., at p. 437.
33 Id., at p. 439. The appeal was docketed as CA-G.R. SP No. 39045.
34 Id., at pp. 454-461. Penned by Justice Hector L. Hofileña, concurred
in by Justices Jesus M. Elbinias and Omar U. Amin.
35 See Resolution, Id., at p. 467.
36 Id., at pp. 507-529.
604
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605
The39
pertinent
40
provisions of law on this matter are Secs.
49 and 50 of the Local Tax Code.
A perusal of these provisions would yield a conclusion
that the local board or council has the power to impose a
tax or fee (1) on a tax base or subject specifically
enumerated in the Local Tax Code, (2) on a tax base similar
to those authorized in the Local Tax Code but which may
not have been specifically enumerated therein, and (3) on a
tax base or tax subject which is not similar or comparable
to any tax base or subject specifically mentioned or
otherwise provided for in the Local Tax Code. Public
hearing apparently is not necessary when the tax or fee is
imposed on a tax base or subject specifically enumerated in
the Local Tax Code.
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606
The basis for the above distinction is that when a tax base
or subject is specifically enumerated in the Local Tax Code,
the existence of the power to tax is beyond question as the
same is expressly granted. Even in the determination of
the rates of the tax, a public hearing, even if ideal, is not
necessary because the law itself provides for a ceiling on
such rates. The same does not obtain in a situation where
what is about to be taxed is not specifically enumerated in
the Local Tax Code because in such a situation, the issues
of whether to tax or not and at what rate a tax is to be
imposed are crucial. Consequently, a public hearing is
necessary and vital.
A scrutiny of the taxes or fees imposed by Tax Ordinance
No. 88-11-36 shows that some of them belong to the second
and third categories of taxes or fees that may be imposed
by a municipality that require public hearing. Petitioners
are thus correct in saying that a public hearing is
necessary for its enactment. With respect to Tax Ordinance
No. 89-10-49, however, we hold that no public hearing is
necessary as it does not impose any tax or fee. Said
ordinance is actually a restatement, with illustrations, of
the provisions of the Local Tax Code on civil remedies for
the collection of the local taxes and fees imposed by Tax
Ordinance No. 88-11-36.
Although a public hearing is necessary for the
enactment of Tax Ordinance No. 88-11-36, still we uphold
its validity in view of petitionersÊ failure to present 41
evidence to show that no public hearing was conducted.
Petitioners, as the party asserting a negative allegation, 42
had the burden of proving lack of public hearing.
Although the Sangguniang Bayan had the control of
records or the better means of proof regarding the facts
alleged and respondent public officials assumed an
uncooperative stance to petitionersÊ request for copies of the
Minutes of their deliberation, petitioners are not relieved
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41 See Reyes v. Court of Appeals, 378 Phil. 232; 320 SCRA 486, 493
(1999), citing Figuerres v. Court of Appeals, 364 Phil. 683; 305 SCRA 206
(1999).
42 Id.
607
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609
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47 The first paragraph of this provision states that: „The Bureau shall
have jurisdiction and responsibility in the management, conservation,
development, protection, utilization and disposition of all fishery and
aquatic resources of the country except municipal waters which shall be
under the municipal or city government concerned: Provided, That fish
pens and seaweed culture in municipal centers shall be under the
jurisdiction of the Bureau: Provided, further, That all municipal or city
ordinances and resolutions affecting fishing and fisheries and
any disposition thereunder shall be submitted to the Secretary
for appropriate action and shall have full force and effect only
upon his approval. The Bureau shall also have authority to regulate
and supervise the production, capture and gathering of fish and
fishery/aquatic products.‰ [Emphasis supplied]
610
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not among those mentioned in Sec. 44 of the Local Tax
Code. The other remaining issues, on the other hand, are
proper subjects of a protest which should have been
brought to the Secretary of Finance.
However, petitioners did not even bring the issues
relative to the legality or validity of Tax Ordinance No. 88-
11-36 to the Provincial Fiscal. What they brought for the
consideration of the Provincial Fiscal was55 Tax Ordinance
No. 89-10-49. Thus, in Opinion No. 90-1, the Provincial
Fiscal found said ordinance valid except insofar as it
provided for the padlocking of the establishment as among
the civil remedies available against a delinquent taxpayer.
The ruling of the Provincial Treasurer declaring Tax
Ordinance No. 89-10-49 valid and in order is of no moment
because, under Sec. 47, the opinion of the Provincial Fiscal
is appealable to the Secretary of Justice.
With respect to the remaining issues proper for a formal
protest, petitioners did not bring the same to the Secretary
of
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tion to Section 44 thereof.‰ Verily, mere allegation that an
ordinance is invalid on the grounds enumerated in Sec. 44
of the Local Tax Code will not work to rebut the
presumption of the ordinanceÊs validity.
Clearly, for failure to file a formal protest with the
Secretary of Finance, or a legal question with the
Provincial Fiscal on Tax Ordinance No. 88-11-36Ês validity,
petitioners cannot be said to have exhausted
administrative remedies available to them.
The underlying principle of the rule on exhaustion of
administrative remedies rests on the presumption that the
administrative agency, if afforded a complete chance to 57
pass upon the matter, will decide the same correctly.
There are both legal and practical reasons for the principle.
The administrative process is intended to provide less
expensive and speedier solutions to disputes. Where the
enabling statute indicates a procedure for administrative
review and provides a system of administrative appeal or
reconsideration, the courts·for reasons of law, comity, and
convenience·will not entertain a case unless the available
administrative remedies have been resorted to and the
appropriate authorities have been given an opportunity to
act and58 correct the errors committed in the administrative
forum.
From the above disquisitions, it follows that the validity
of the questioned tax ordinances must be upheld. However,
their enforceability is another matter that merits further
deliberation considering the apparent lack of publication or
posting of the questioned ordinances.
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