7. miaa vs. city of pasay

7/28/2019 7. MIAA vs. City of Pasay

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G.R. No. 163072 April 2, 2009MANILA INTERNATIONAL AIRPORT AUTHORITY, Petitioner,vs. CITY OF PASAY, SANGGUNIANG PANGLUNGSOD NGPASAY, CITY MAYOR OF PASAY, CITY TREASURER OFPASAY, and CITY ASSESSOR OF PASAY, Respondents.

The FactsMIAA received Final Notices of Real Property Tax Delinquencyfrom the City of Pasay for the taxable years 1992 to 2001.

Thereafter, the City Mayor of Pasay threatened to sell at public

auction the NAIA Pasay properties if the delinquent real propertytaxes remain unpaid.

MIAA filed with the Court of Appeals a petition for prohibition andinjunction with prayer for preliminary injunction or temporaryrestraining order

Court of Appeals dismissed the petition and upheld the power ofthe City of Pasay to impose and collect realty taxes on the NAIAPasay properties. MIAA filed a motion for reconsideration, whichthe Court of Appeals denied. Hence, this petition.

The IssueThe issue raised in this petition is whether the NAIA Pasayproperties of MIAA are exempt from real property tax.

The Courts RulingThe petition is meritorious.

In ruling that MIAA is not exempt from paying real property tax,the Court of Appeals cited Sections 193 and 234 of the LocalGovernment Code.

The 2006 MIAA case and this case raised the same thresholdissue: whether the local government can impose real property taxon the airport lands, consisting mostly of the runways, as well asthe airport buildings, of MIAA. In the 2006 MIAA case, this Courtheld:

To summarize, MIAA is not a government-owned or controlledcorporation under Section 2(13) of the Introductory Provisions ofthe Administrative Code because it is not organized as a stock ornon-stock corporation. Neither is MIAA a government-owned orcontrolled corporation under Section 16, Article XII of the 1987Constitution because MIAA is not required to meet the test ofeconomic viability. MIAA is a government instrumentality vestedwith corporate powers and performing essential public servicespursuant to Section 2(10) of the Introductory Provisions of the

Administrative Code. As a government instrumentality, MIAA isnot subject to any kind of tax by local governments under Section133(o) of the Local Government Code. The exception to theexemption in Section 234(a) does not apply to MIAA becauseMIAA is not a taxable entity under the Local Government Code.Such exception applies only if the beneficial use of real property

owned by the Republic is given to a taxable entity. Finally, theAirport Lands and Buildings of MIAA are properties devoted topublic use and thus are properties of public dominion. Propertiesof public dominion are owned by the State or the Republic.

A close scrutiny of the definition of "government-owned orcontrolled corporation" in Section 2(13) will show that MIAAwould not fall under such definition. MIAA is a government"instrumentality" that does not qualify as a "government-owned or controlled corporation." As explained in the 2006MIAA case:

A government-owned or controlled corporation must be"organized as a stock or non-stock corporation." MIAA is notorganized as a stock or non-stock corporation. MIAA is not a

stock corporation because it has no capital stock divided intoshares. MIAA has no stockholders or voting shares. x x xMIAA is also not a non-stock corporation because it has nomembers.

MIAA is a government instrumentality vested with corporatepowers to perform efficiently its governmental functions. MIAA islike any other government instrumentality, the only difference isthat MIAA is vested with corporate powers.

Unless the government instrumentality is organized as a stock o

non-stock corporation, it remains a government instrumentalityexercising not only governmental but also corporate powers.

Furthermore, the airport lands and buildings of MIAA areproperties of public dominion intended for public use, and assuch are exempt from real property tax under Section 234(a) othe Local Government Code. However, under the sameprovision, if MIAA leases its real property to a taxable person, thespecific property leased becomes subject to real property tax.12 Inthis case, only those portions of the NAIA Pasay properties whichare leased to taxable persons like private parties are subject toreal property tax by the City of Pasay.

WHEREFORE, we GRANT the petition.
http://www.lawphil.net/judjuris/juri2009/apr2009/gr_163072_2009.html#fnt12http://www.lawphil.net/judjuris/juri2009/apr2009/gr_163072_2009.html#fnt12


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Case #13. CHEVRON PHILIPPINES, INC., VS.COMMISSIONER OF THE BUREAU OF CUSTOMS,[G.R. No.178759, August 11, 2008]

TOPIC: TAX and Custom Duties

Facts:

Chevron Phils. Inc., is engaged in the business of importing,distributing and marketing of petroleum products in thePhilippines. In 1996, the importations subject of this case arrived

and were covered by 8 bills of lading. The shipments wereunloaded from the carrying vessels onto petitioners oil tanksover a period of 3 days from the date of their arrival.Subsequently, the import entry declarations (IEDs) were filed and90% of the total customs duties were paid. The import entry andinternal revenue declarations (IEIRDs) of the shipments werethereafter filed.

The importations were appraised at a duty rate of 3% as providedunder RA 8180and petitioner paid the import duties amounting toP316,499,021. Prior to the effectivity of RA 8180 on April 16,1996, the rate of duty on imported crude oil was 10%.

Three years later, then Finance Secretary received a letterdenouncing the deliberate concealment, manipulation andscheme employed by petitioner in the importation of crude oil,thereby resulting in huge losses of revenue for the government.This letter was endorsed to the Bureau of Customs (BOC) forinvestigation.

On August 1, 2000, petitioner received a demand letter from theDistrict Collector requiring the immediate settlement of theamount of P73,535,830 representing the difference between the10% and 3% tariff rates on the shipments. Petitioner objected tothe using of the 10% duty rate and insisted that the 3% tariff rateshould instead be applied. Furthermore it raised the defense ofprescription against the assessment pursuant to Section 1603 ofthe Tariff and Customs Code (TCC). Thus, it prayed that theassessment for deficiency customs duties be cancelled and the

notice of demand be withdrawn.

The Special Investigator found that there was an irregularity inthe filing and acceptance of the import entries beyond the 30-daynon-extendible period prescribed under Section 1301 of the TCCand in the release of the shipments after the same had alreadybeen deemed abandoned in favor of the government. Petitionerwas then ordered to pay P1,180,170,769.21 representing thetotal dutiable value of the importations.

The CTA en bancheld that it was the filing of the IEIRDs thatconstituted entry under the TCC. Since these were filed beyondthe 30-day period, they were not seasonably "entered" inaccordance with Section 1301 in relation to Section 205 of theTCC. Consequently, they were deemed abandoned under

Sections 1801 and 1802 of the TCC. It also ruled that the noticerequired under Customs Memorandum Orderwas not necessaryin view of petitioner's actual knowledge of the arrival of theshipments. It likewise agreed with the CTA Division's finding thatpetitioner committed fraud when it failed to file the IEIRD withinthe 30-day period with the intent to "evade the higher rate."Petitioner was ordered to pay respondent the total dutiable valueof the oil shipments amounting to P893,781,768.21.

ISSUES:1. Whether or not entry under Section 1301 in relation to

Section 1801 of the TCC refers to the IED or the IEIRD;2. Whether or not "entry" under Section 1301 in relation to

whether fraud was perpetrated by petitioner and

3. Whether or not the importations can be consideredabandoned under Section 1801.

RULING:

1. The position of petitioner, that the import entry to befiled within the 30-day period refers to the IED and nothe IEIRD, has no legal basis.Under the relevanprovisions of the TCC, both the IED and IEIRD shouldbe filed within 30 days from the date of discharge of thelast package from the vessel or aircraft. The IED servesas basis for the payment of advance duties on

importations whereas the IEIRD evidences the finapayment of duties and taxes. The operative act thaconstitutes "entry" of the imported articles at the port ofentry is the filing and acceptance of the "specified entryform" together with the other documents required by lawand regulations. The "specified entry form" refers to theIEIRD. The word "entry" refers to the regulaconsumption entry (the IEIRD) and not the provisionaentry (the IED).

2. Evidence showed that petitioner bided its time to file theIEIRD so as to avail of a lower rate of duty. A clearindication of petitioner's deliberate intention to defraudthe government was its non-disclosure of discrepancieson the duties declared in the IEDs (10%) and IEIRDs(3%) covering the shipments

Due to the presence of fraud, the prescriptive period othe finality of liquidation under Section 1603 wasinapplicable.

3. Petitioner's failure to file the required entries within anon-extendible period of thirty days from date odischarge of the last package from the carrying vesseconstituted implied abandonment of its oil importationsThis means that from the precise moment that the non-extendible thirty-day period lapsed, the abandonedshipments were deemed the property of thegovernment.

Therefore, when petitioner withdrew the oil shipmentsfor consumption, it appropriated for itself propertieswhich already belonged to the government. Accordinglyit became liable for the total dutiable value of theshipments of imported crude oil amounting toP1,210,280,789.21 reduced by the total amount oduties paid amounting to P316,499,021.00 therebyleaving a balance of P893,781,768.21.

Due notice was not necessary in this case.The purposeof posting an "urgent notice to file entry" is only to notifythe importer of the "arrival of its shipment" and thedetails of said shipment. Since it already had knowledgeof such, notice was superfluous. Notice to petitioner was

unnecessary because it was fully aware that itsshipments had in fact arrived. The oil shipments weredischarged from the carriers docked in its private pier owharf, into its shore tanks. From then on, petitioner hadactual physical possession of its oil importations. It wasthus incumbent upon it to know its obligation to file theIEIRD within the 30-day period prescribed by law. As amatter of fact, importers such as petitioner can, undeexisting rules and regulations, file in advance an importentry even before the arrival of the shipment to expeditethe release of the same. However, it deliberately chosenot to comply with its obligation under Section 1301


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PetitionDENIED. Petitioner Chevron Philippines, Inc. isORDERED to payP893,781,768.21 plus six percent(6%) legal interestper annum accruing from the date ofpromulgation of this decision until its finality. Uponfinality of this decision, the sum so awarded shall bearinterest at the rate of twelve percent (12%) per annumuntil its full satisfaction.


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G.R. No. L-66838 December 2, 1991 (204 SCRA 377)CIR vs. PROCTER & GAMBLE PHILIPPINEMANUFACTURING CORP and CTA

FACTS: For the taxable year 1974 ending on 30 June 1974, andthe taxable year 1975 ending 30 June 1975, Procter and GamblePhilippines declared dividends payable to its parent companyand sole stockholder, P& USA, from which dividends the amountof P8,457,731.21 representing the thirty-five percent (35%)withholding tax at source was deducted. It subsequently filed aclaim with the CIR for a refund or tax credit, claiming that

pursuant to Section 24(b)(1) of the NIRC, as amended by PD No.369, the applicable rate of withholding tax on the dividendsremitted was only 15%. There being no responsive action on thepart of the Commissioner, P&G-Phil., on 13 July 1977, filed apetition for review with the CTA . On 31 January 1984, the CTArendered a decision ordering the CIR to refund or grant the taxcredit in the amount of P4,832,989.00. On appeal, the SC,through its 2nd Division, reversed the CTAs decision. Hence, thepresent motion for reconsideration.

ISSUE: Whether or not P&G Philippines is entitled to the refundor tax credit.

RULING: YES. P&G Philippines is entitled to refund or tax credit.The motion for reconsideration is granted and the CTAs decisionis reinstated.

RATIO: Sec 24 (b) (1) of the NIRC states that the ordinary 35%tax rate applicable to dividend remittances to non-residentcorporate stockholders of a Philippine corporation, goes down to15% if the country of domicile of the foreign stockholdercorporation "shall allow" such foreign corporation a tax credit for"taxes deemed paid in the Philippines," applicable against the taxpayable to the domiciliary country by the foreign stockholdercorporation. In other words, in the instant case, the reduced 15%dividend tax rate is applicable if the USA "shall allow" to P&G-USA a tax credit for "taxes deemed paid in the Philippines"applicable against the US taxes of P&G-USA. The NIRCspecifies that such tax credit for "taxes deemed paid in the

Philippines" must, as a minimum, reach an amount equivalent to20% points which represents the difference between the regular35% dividend tax rate and the preferred 15% dividend tax rate.

US law (Section 901, Tax Code) grants P&G-USA a tax credit forthe amount of the dividend tax actuallypaid (i.e., withheld) fromthe dividend remittances to P&G-USA; and US law (Section 902,US Tax Code) grants to P&G-USA a "deemed paid' tax credit8fora proportionate part of the corporate income tax actually paidto the Philippines by P&G-Phil.

The parent-corporation P&G-USA is "deemed to have paid" aportion of the Philippine corporate income tax although that taxwas actually paid by its Philippine subsidiary, P&G-Phil., not byP&G-USA. This "deemed paid" concept merely reflects economic

reality, since the Philippine corporate income tax was in fact paidand deducted from revenues earned in the Philippines, thusreducing the amount remittable as dividends to P&G-USA. Inother words, US tax law treats the Philippine corporate incometax as if it came out of the pocket, as it were, of P&G-USA as apart of the economic cost of carrying on business operations inthe Philippines through the medium of P&G-Phil. and hereearning profits.

Under Section 30 (c) (3) (a), NIRC, the BIR must give a tax creditto a Philippine corporation for taxes actually paid by it to the USgovernment. This Section of the NIRC is the equivalent ofSection 901 of the US Tax Code. Section 30 (c) (8), NIRC, ispractically identical with Section 902 of the US Tax Code,

wherein the BIR must give a tax credit to a Philippine parentcorporation for taxes "deemed paid" by it, that is, e.g., for taxespaid to the US by the US subsidiary of a Philippine-parencorporation. The Philippine parent or corporate stockholder is"deemed" under our NIRC to have paid a proportionate part othe US corporate income tax paid by its US subsidiary, althoughsuch US tax was actually paid by the subsidiary and not by thePhilippine parent.

Clearly, the "deemed paid" tax credit which, under Section 24 (b(1), NIRC, must be allowed by US law to P&G-USA, is the same

"deemed paid" tax credit that Philippine law allows to a Philippinecorporation with a wholly- or majority-owned subsidiary in (foinstance) the US.

7. miaa vs. city of pasay

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