tax case doctrines part 1

8/11/2019 Tax Case Doctrines Part 1

1/12


2/12

TAX LAW REVIEWER SAINT LOUIS UNIVERSITY BAR OPERATIONS

is an attribute of sovereignty which municipal corporations donot enjoy (Tan ' Municipal of Pagbilao 5 - . 5 7 >e >aCu ' -ity of 4ipa 22 Phil 25+)

SUBJECT MATTER: Tax Distinguished from otherterms

Inspection (License ee) are not taxes but anincident of the power of regulation and are imposed under the principle that they are compensation for services rendered ininspectional supervision by the public officials necessary for public health, morals or safety >hile taxes are enforcedcontribution of money or other property assessed in accordance "ith some reasonable rule of apportionment by authority of asovereign authority or state on persons or property for thepurpose of defraying the public expense (M .4-B vs .uditor?en 5+ Phil */ )

Brdinance @o 36/ of the -ity of Manila imposinglicense fees on the slot machines "as declared as invalid forunder the evised -harter of The -ity of Manila, the board isgiven the ;po"er to regulate and fix license fee on slotmachines,< but this case does not include the po"er to imposelicense for revenue purposes The po"er is purely regulatory forpublic purpose The amount of P300 is unreasonable andexceeds the expenses of issuing license and of regulating theiroperation (Marcoin vs -ity of Mla 4A*+3+*, 0*E/ E6*)

& charge of a fixed sum which bears no relation at all to the cost of inspection and regulation may be held to be a tax

rather than an exercise of police power (Prog DevFt -orp vsGue=on -ity *5/ - . 6/2)

%ees may be properly regarded as taxes even thoughthey also serve as an instrument of regulation. It is possible for an exaction to be both tax and regulation This is true, forexample, ofautomobile license fees $n such case, the feesmay properly be regarded as taxes even though they also serveas instrument of regulation. If the purpose is primarily revenueor is at least one of the real substantial purpose, then theexaction is properly called a tax uch is the case of motorvehicle registration (P.4 vs du *69 - . 3/0)

y designating a specific place "herein passengerand freight vehicles may load or unload passengers andcargoes, benefits are accorded to the cityFs residents in the formof increased safety and convenience arising from thedecongestion of traffic and for a minimal fee indicates that itspurpose is not for revenue but for regulation (-ity of B=amis vs4umapas 6+ - . 33)

&n exaction, may be considered both a tax and alicense fee if the purpose is primarily revenue, or if revenue, is,at least, one of the real and substantial purposes, then theexaction is properly called a tax ('illegas vs !iu -hiong, 6

- . /50)

unicipality is authori ed not only to impose a licensefee but also to tax for revenue purposes. Municipal corporationsare allo"ed "ide discretion in determining the rates ofimposable license fees even in cases of purely police measures(Procter H ?amble Phil vs Mun of Iagna, 29 - . 29)

& license granted by the $tate is always revocable

The absence of expiry date in a license does not ma:e itperpetual The license cannot last beyond the life of the basic

authority under "hich it "as issued (?on=alo y vs -entralan:, 50 - . +50)

. license fee and tax may be imposed on the samebusiness or occupation, or for selling the same article

(-ompania ?eneral vs -ity of Manila, - . 365). municipal corporation is prohibited from imposing

any tax in any form upon goods and merchandise carried into orout of the to"n or city because it shall be considered in restrainof trade ( aldana vs -ity of $loilo7 *09 P!$4 / )

The power to regulate as an exercise of police power does not include the power to impose fees for revenue purposes (.merical Mail 4ines vs -ity of asilan, / - . 302)

(egulatory %ee )must be more than sufficient to cover the actual cost of inspection or examination as nearly as thesame can be estimated. If it were possible to prove in advancethe exact cost, that would be the limit of the fee (Manila lectric-o vs .uditor ?eneral)

Taxes cannot be subject to compensation or set off for the simple reason that the *overnment and taxpayers are not creditor+debtor of each other The exception to the general ruleregarding set+off is where both the claims of the *overnment and taxpayer against each other have already become due and demandable as well as fully liquidated -ompensation,therefore, ta:es place by operation of la", in accordance "iththe provisions of .rticles */52 and */20 of the -ivil -ode, andboth debts are extinguished to the concurrent amount, thusJ. T */00 >hen all the re#uisites mentioned in article */52 arepresent, compensation ta:es effect by operation of la", and

extinguished both debts to the concurrent amount, eventhoughthe creditors and debtors are not a"are of the compensation(Domingo vs ?arlitos, T .4 ? @o 4A* 229 Iune /2, *263)

Bert!in" c!ar"es against a vessel are collectibleregardless of the fact that mooring or berthing is made from a private pier or wharf. This is because the government maintainsbodies of water in navigable condition and it is to support itsoperations in this regard that dues and charges are imposed for the use of piers and wharves regardless of their ownership('ictoria Milling vs Phil Ports .uthority 0 E/5E 5)

ar"in ee is not a tax but an exaction designed to

curb the excessive demands upon our international reserve .margin levy on foreign exchange is a form of exchange controlor restriction designed to discourage imports or encourageexports, and ultimately curtail any excessive demand upon theinternational reserve in order to stabili=e the currency ( B vs-$ 05E05E 2)

SUBJECT MATTER: 4imitations on the Po"er oftaxation

niformity in taxation means that all taxable articles or inds of property of the same classes shall be taxed at the

same rate. & tax is uniform when it operates with the same forceand effect in every place where the subject of it is found . tax ofP/ 00 per s#uare meter on all electric sign boards all throughoutthe Philippines satisfies the re#uirements of uniformity(-hurchill vs -oncepcion 39 Phil 262 )

2


3/12


SUBJECT MATTER: Due Process of 4a"

There is no presumption of the regularity of any administrative proceeding which results in depriving a citi en or

taxpayer of his property. -ue process of law must be shown,and the burden of proving the regularity of all proceedingsleading up to a tax sale is upon the purchaser at the sale('alencia vs Iimene= ** Phil 92/)

$otice of tax sales to the delinquent taxpayers and landowners in particular and to the public in general is anessential and indispensable requirement of the law, the non+fulfillment of which vitiates and nullifies the sale (.ragon vsIorge + Phil /96)

%rocedural due process is that which hears before it condemns, which proceeds upon inquiry and renders judgment only after trial $t contemplates notice and opportunity to beheard before udgment is rendered affecting one1s person orproperty (Macabing:il vs Catco, 4A/3*59, 02E* E65)

The sale at public auction of properties by the -hief ofthe Department of 8inance and the -ity Treasurer of the?overnment of Manila "as made and effected "ithout notice tothe deceased 8ermin Pa= or to any of his heirs There "as no&ue publication in ne"spaper of general circulation and noposting of the notice re#uired -ompliance of these legalre#uirements must be strictly complied "ith, other"ise the publicauction "ould be invalid (Trigal vs Tobias / - . **+9)

Due process is usually violated "here the tax imposed

is for private as distinguished from public purposes7 "here a taxis imposed on property outside the tate, i e , extraAterritorialtaxation7 and arbitrary or oppressive methods are used inassessing and collecting taxes ut, a tax does not violate thedue process clause, as applied to a particular taxpayer,although the purpose of the tax will result in an injury rather thana benefit to such taxpayer. -ue process does not require that the property subject to the tax or the amount of tax to be raised should be determined by judicial inquiry, and a notice and hearing as to the amount of tax and the manner in which it shall be apportioned are generally not necessary to due process of law (Pepsi -ola vs Mun of Tanauan 60 - . *93)

In the interest of justice and fair play, rulings or circulars promulgated by the #ommissioner of Internal (evenuehave no retroactive application where to so apply them would be prejudicial to taxpayers (. A- @ vs -T. *0 - . *93)

"The power to tax I$ /0T the power to destroy whilethis court sits". Po"er to tax is the strongest of all the po"ers ofgovernment ut for all its plenitude, the po"er to tax is notunconfined as there are restrictions .dversely affecting as itdoes property rights, both the due process and e#ual protectionclauses of the -onstitution may properly be invo:ed to invalidatein appropriate cases a revenue measure ( eyes vs .lman=or)

SUBJECT MATTER: Kniformity and e#uity in taxation

&!ere is discri#ination '!ere a local ta 'as i#posed on a"ents or consi"nees o outsidedealers*. &!e classi ication o suc! a"ents or consi"nees* '!o are ta able and local dealers* '!o aree e#pt is not based on substantial distinction. (%epsi +ola

Bottlin" +o. s. +ity o Butuan /+R0 ) & tax is considered uniform when it operates with the

same force and effect in every place where the subject may befound ection *922 of the evised .dministrative -ode, asamended, applies uniformly to, and operates on, all ban:s in thePhilippines "ithout distinction and discrimination, and if the@ational -ity an: of @e" Cor: is exempted from its operationbecause it is a federal instrumentality sub ect only to theauthority of -ongress, that alone could not have the effect ofrendering it violative of the rule of uniformityThe rule of uniformity does not call for perfect uniformity or perfect equality,because this is hardly attainable (Phil Trust -o vs Catco 62 Phil9/0)

1qual 2rotection #lause does not precludeclassification of individuals who may be accorded different treatments under the law as long as the classification is not unreasonable and not arbitrary. The law does not have tooperate in equal force to be conformable ( asco vs Pagcor *25

- . 55*)

SUBJECT MATTER: Prohibition against impairment ofobligation of contracts

/ec. 1 o t!e Internal Re enue 0ct isnot alid because it is iolati e o t!e pro ision o /ec. 2 o t!e 0ct o +on"ress o July 1, 193 , '!ic! pro ides t!at nolaw impairin the obli ation of contracts shall be enacte& .It see#s t!at t!e 4eed co erin" t!is particular #inin"concessions constituted a contract bet'een t!e /panis! "o ern#ent and t!e %lainti , t!e obli"ation o '!ic! 'asi#paired by t!e enact#ent o /ec. 1 o t!e Internal Re enue 0ct, t!ereby in rin"in" t!e pro isions o said 0ct o +on"ress. &!ere ore, t!e said pro ision o la' is oid.(+assano a s. 5ord %5IL 1 2)

The .ct of the .uditor of the Philippine ?overnment inrefusing to allo" the payment of the salary of the petitioner inK currency is un ustifiable The .ct of -ongress of Iuly *, *20*as "ell as the Iones .ct of .ugust /2, *2*6 prohibits absolutelythe legislature of the Philippine $slands from adopting anylegislation, "hich "ould impair the obligations of contracts(-lemons vs @olting 9/ P!$4 50/)

SUBJECT MATTER: Prohibition against infringement ofreligious freedom

It 'as contended t!at said ordinances i#posin"license ee on t!e distribution and sale o bibles and ot!er reli"ious literature, i#pair t!e ree e ercise o reli"ion,speci ically t!e ri"!t to disse#inate reli"ious in or#ation.As between taxation an& reli ion, the latter pre$ails .(0#erican Bible /ociety s. +ity o Manila 131 %5IL 6)

3


4/12


'ree exercise of reli ious profession or belief issuperior to contract ri hts" In case o con lict, t!e latter #ust yield to t!e or#er. (Victoriano s. 7li8alde Rope

or:ers ;nion 29 /+R0 2 < Basa s. =ederacion >brera4ela Industria &aba?uera @ >tros &rabaAadores 4e =ilipinas

=>I&0=C 61 /+R0 9 )&!e e e#ption under /ec. ( ) 0rt. VI o t!e

+onstitution only co ers property ta es assessed once#eteries, c!urc!es, and parsona"es or con ents,appurtenant t!ereto and all lands, buildin"s and i#pro e#ents used e clusi ely or reli"ious purposes.(Lladoc s. +o##issioner o Internal Re enue 1 /+R0 9 )

SUBJECT MATTER: Prohibition against taxation ofreligious, charitable and educational entities

&!e e e#ption under /ec. ( ) 0rt. VI o t!e +onstitution only co ers ta es assessed on ce#eteries,c!urc!es, and parsona"es or con ents, appurtenant t!ereto and all lands, buildin"s and i#pro e#ents used e clusi ely or reli"ious purposes. &!ese ta es are property ta es as contra-distin"uis!ed ro# e cise ta es.In t!e case at bar, '!atDs bein" assessed 'as a doneeDs "i t ta not on t!e properties t!e#sel es. The ift tax was anexcise tax upon the use ma&e of the properties, upon theexercise of the pri$ile e of recei$in the properties" This(in& of tax is not within the exemptin pro$ision of theconstitution" &!ere ore, t!e petitioner as substituted by t!e5ead o t!e 4iocese, is liable to pay t!e said "i t ta .(Lladoc s. +o##issioner o Internal Re enue 1 /+R0 9 )

+onsiderin" t!e c!an"e #ade in t!e pro ision o e e#ption ro# property ta es o traditional e e#ptees,t!ere #ust be proo o t!e actual and direct use o t!e land,buildin"s, and i#pro e#ents or reli"ious or c!aritable purposes to be e e#pt ro# ta ation. &!is is because it !as been a constant and uni or# !oldin" t!at exemptionfrom taxation is not fa$ore& an& is ne$er presume&"(%ro ince o 0bra s. 5ernando 13E /+R0 13 )

)All lan&s, buil&in an& impro$ements use&exclusi$el! for reli ious, charitable or e&ucationalpurposes shall be exempt from taxation re ar&less of whether or not the material profits are &eri$e& from theoperation of the institution in *uestion" (5errera s.Fue8on +ity Board o 0ssess#ent 0ppeals /+R0 1 6)

The fact that a charitable institution ma(es profitsb! char in fees for pa!in be&s, me&ical an& hospitalfees, &oes not &estro! the tax exemption of such aninstitution" (5ospital 4e /an Juan 4e 4ios, Inc. s. %asay +ity 16 /+R0 6)

The phrase )use& exclusi$el! fore&ucational purposes+ is not limite& to propert! actuall!in&ispensable therefor but exten&s to facilities, which areinci&ental to an& reasonabl! necessar! to theaccomplishment of sai& purposes" (0bra Valley +olle"e s. 0?uino 16 /+R0 136)

Exemption from pa!ment of lan& tax, which refers to lots use& as home of the priest who presi&eo$er the church must inclu&e not onl! the lot actuall!occupie& b! the church but also the a& acent roun&&estine& to meet the or&inar! inci&ental uses of man"

(Bis!op o $ue a /e"o ia s. %ro ince o Ilocos $orte 21%5IL 2

The term parsonage should include the houseappurtenant to a cathedral, as "ell as a synagogue or a countrymeeting house Thus, the property is properly referred to as aparsonage The court held that the "ord ad acent does notmean contiguous but is generally defined as e#uivalent to closeor near by (-atholic -hurch vs !astings + P!$4 50*)

SUBJECT MATTER: Bther -onstitutional limitations

&o i#pose inco#e ta on t!e salary o t!e#e#bers o t!e Judiciary 'ould a#ount to a di#inution o t!eir co#pensation, t!us iolati e o t!e pro isions o t!e+onstitution (%er ecto s. Meer 2 %5IL 22< 7ndencia and Ju"o s. 4a id 9 %5IL 696)

&!e true intent o t!e ra#ers o t!e 19 E +onstitution, based on t!eir debates and opinions durin"t!eir deliberation, 'as to #a:e t!e salaries o t!e #e#berso t!e Judiciary ta able and to delete t!e proposed e press "rant o e e#ption ro# pay#ent o inco#e ta . &!is is to "i e substance to e?uality a#on" t!e t!ree ( ) branc!es o t!e "o ern#ent. &!us in t!is case, t!e court discarded t!e

rulin" in %er ecto . Meer and 7ndencia . 4a id, '!ic!cases declared t!e salaries o #e#bers o t!e Judiciary e e#pt ro# pay#ent o t!e inco#e ta '!ic! 'as t!enconsidered as a di#inution o t!eir salaries durin" t!eir continuance in o ice. ($ita an s. +IR 12 /+R0 )

SUBJECT MATTER: Public Purpose

The entrustin of the collection of the fees to a pri$ate in&i$i&ual or corporation &oes not &estro! thepublic purpose of the or&inance" &!e ri"!t to ta depends

upon t!e ulti#ate use, purpose or obAect or '!ic! t!e und is raised and not on t!e nature or c!aracter o t!e personor corporation. (Ba"atsin" s. Ra#ire8 E /+R0 36)

&!e su"ar industryDs pro#otion, protection and ad ance#ent t!ere ore redound "reatly to t!e "eneral 'el are. &!us, t!e contention o plainti t!at t!e 0ct 'as pro#ul"ated not or public purpose cannot be up!eld.(Lut8 s. 0raneta 9 %5IL 1 )

>rdinance 99 'as enacted and appro ed toincrease re enues o t!e city. &!ere ore, it can be said t!at t!e ordinance 'as enacted or public purpose. (+ity o Ba"uio s. 4e Leon 2 /+R0 9 )

It 'as !eld t!at not a sin"le centa o 'as raised by ta ation as t!e unds !eld by t!e +ultural +enter ca#e ro#donations and contributions. &!us petitioner did not !a ea re?uisite personality to contest t!e alidity o t!ee ecuti e order as a ta payer. (Gon8ales s. Marcos 62 /+R0 6 )

4


5/12


SUBJECT MATTER: Prohibition against delegation oftaxing po"er

8urthermore, the general principle against delegationof legislative po"er, in conse#uence of the theory of separation

of po"ers is sub ect to one "ellAestablished exception, namelyJlegislative powers may be delegated to local government unitsLto "hich said theory does not apply in respect to matters of localconcern (Pepsi -ola ottling -o vs -ity of utuan /9 - .3)

3egislative powers may be delegated to local governments in respect of matters of local concern. The#onstitution grants the autonomous authority to create their ownsources of revenue and to levy taxes (Pepsi -ola ottling -ovs Municipality of Tanauan 62 - . 9 0)

The rule is that so long as the legislature lays down a policy and the statute establishes a standard, there is not unduedelegation (-ervantes vs .uditor ?eneral 2* P!$4 3+2)

-learly, then President .#uino "as not subAdelegatingher po"er B 23 ( 6), as a delegating la", "as complete initself, it sets forth a policy to be carried out and fixed thestandard to "hich the delegate had to conform in theperformance of his functions (Maceda vs Macaraig *25 - .55*)

&n exception to the general rule, sanctioned by immemorial practice, permits the central legislative body todelegate legislative powers to local authorities ( ubi vs ProvFl

oard)

SUBJECT MATTER: xemption of governmentagencies or instrumentalities

The tax collected "as declared illegal because thesales in #uestion are made to instrumentalities of the K?overnment, thus, not sub ect to tax by the Philippinegovernment ( tandard Bil -ompany vs Iuan Posadas 3+ P!$45*+)

Taxes are financial burdens imposed for the purpose

of raising revenues "ith "hich to defray the cost of the operationof the government. & tax on the properties of the government,whether national or local, would merely have the effect of ta ingmoney from one poc et to put it in another poc et ( oard of.ssessment .ppeals vs -T. - . //+)

@.PB-B is liable to pay real property taxes andspecial education fund taxes for the years *25 *2 9 This isbecause of the enactment of 2- 4455 which withdrew from all units of the government, including government+owned and controlled corporations li e /&20#0(, all tax exemptions it previously enjoyed (@.PB-B vs Presiding Iudge *20 - .955)

SUBJECT MATTER: itus of sub ects of taxation

.s "ealth flo"ing from "ithin the taxing urisdiction ofthe Philippines, in consideration of the protection accorded to itby the Philippines, said income should properly share theburden of maintaining the government (!o"den vs -ollector.pril 9, *26+)

The actual situs of the shares of stoc:s is in thePhilippines, the corporation being domiciled therein esides,the certificates of stoc: have remained in this country up to thetime of death of ye $n other "ords, the o"ner, residing in-alifornia has extended here her activities "ith respect to her

intangibles so as to avail herself of the protection and benefit ofthe Philippine la"s (>ells 8argo an: vs -ollector 50 P!$43/+)

The situs of the shares of stoc:s for purposes oftaxation, being located here in the Philippines and consideringthat they are sought to be taxed in this urisdiction, their fairmar:et value should be fixed on the basis of the price prevailingin our country and not of an 8rancisco toc: xchange ates(-$ vs Douglas 8isher and etina 8isher Ianuary / , *26*)

The ilitary ases &greement does not lend support to the assertion that said base has become foreign soil or territory. This country6s jurisdictional rights therein, have been preserved, not excluding power to tax (>illiam eagan vs -$30 - . 263)

>here the insured is "ithin the Philippines, the ris:insured against also "ithin the Philippines, and certain incidentsof the contract are to be attended to in the Philippines, such as,payment of dividends "hen received in cash, sending of anad uster into the Philippines in case of dispute, or ma:ing ofproof of loss, the -ommon"ealth of the Philippines has thepo"er to impose the tax upon the insured, regardless of "hetherthe contract is executed in a foreign country and "ith a foreigncorporation -M .4-B vs Catco)

SUBJECT MATTER: Multiplicity of situs

&s jurisdiction may exist in more than onegovernment, that is jurisdiction based on distinct grounds,citi enship of owners, his domicile, source of income, situs of property and the li e, efforts have been made to precludemultiple taxation through the negotiation of appropriateinternational conventions (>ells 8argo an: vs -ollector 50P!$4 3/+)

8or estate and inheritance tax purposes, the term

&residence& is synonymous "ith the term &domicile& The t"oterms may be used interchangeably "ithout distinction (-$ vs4ara)

SUBJECT MATTER: Meaning of Double Taxation

The statute must be sustaine& e$en thou h&ouble taxation results" Such an ar ument a ainst &oubletaxation ma! not be in$o(e& where one tax is impose& b!the state an& the other impose& b! the cit! . (+ity o Ba"uio

s. 4e Leon 2 /+R0 9 )

-ouble taxation is where the same property must betaxed twice when it should be taxed but once. oth taxes must be imposed on the same property or subject matter, for thesame purpose within the same jurisdiction or taxing district,during the same taxing period, with the same ind or character of tax ('illanueva vs -ity of $loilo December / , *26 7 anMiguel re"ery, $nc vs -ity of -ebuE-ebu Portland -ement-o vs @aga, -ebu 8ebruary /0, *253)

5


6/12


.ouble taxation becomes obnoxious onl! wherethe taxpa!er is taxe& twice for the benefit of the same

o$ernmental entit! . In t!e case at bar, '!ile t!e ta payers'ould !a e to pay t'o ta es on t!e sa#e inco#e, t!e%!ilippine "o ern#ent only recei es t!e proceeds o one

ta . Justice and e?uity de#and t!at t!e ta on t!e inco#es!ould accrue to t!e bene it o t!e %!ilippines, considerin"t!at it is t!e place '!ere t!e inco#e in ?uestion 'asearned and '!ere t!e ta payer is do#iciled. (+IR s.Lednic:y July 1, 196 < %epsi +ola Botllin" +o. s.Municipality o &anauan 69 /+R0 3)

SUBJECT MATTER: -onstitutionality of double taxation

.ouble Taxation in eneral, is not forbi&&en b!our fun&amental law. (%epsi +ola Bottlin" +o. s. +ity o Butuan /+R0 < +ity o Manila s. Interisland Gas/er ice, Inc. 99 %5IL E< Manu acturerDs Li e Insurance

s. Meer 9 %5IL 21))

There is nothin inherentl! obnoxious inre*uirement that license fee or taxes be exacte& withrespect to the same occupation, callin or acti$it!, b! boththe state an& the political sub&i$ision" -+ity o Ba"uio s.4e Leon 2 /+R0 9 )

This is because double taxation is not prohibited by the #onstitution 8urthermore, there is double taxation only "hen the same person is taxed by the same urisdiction for thesame purpose $n the first case, the annual business tax is a

license tax to engage in the business of "holesale li#uor in-ebu -ity uch license tax constitutes a regulatory measure inthe exercise of police po"er, "hereas that "hich is imposed bythe ordinance is a typical tax or revenue measure ( an Miguel

re"ery, $nc vs -ity of -ebuE-ebu Portland -ement -o vs@aga, -ebu 8ebruary /0, *253)

RespondentDs 'are!ousin" business alt!ou"!carried on in relation to t!e operation o its su"ar central, isa distinct and separate business ta able under a di erent pro ision o t!e &a +ode. &!ere can be no double ta ation'!ere t!e /tate #erely i#poses a ta on e ery separate

and distinct business in '!ic! a party is en"a"ed. (+IR s.5a'aiian-%!ilippine +o#pany 1 3 %5IL 2E)

&!e ar"u#ent a"ainst double ta ation #ay not bein o:ed '!ere one ta is i#posed by t!e /tate and t!eot!er is i#posed by t!e city. This is because it is wi&el!reco ni%e& that there is nothin inherentl! obnoxious in there*uirement that license fees or taxes ma! be exacte& withrespect to the same occupation, callin or acti$it! b! boththe State an& the political sub&i$ision thereof . (%unsalan

s. Municipal Board o Manila 92 %5IL 6)

It is a 'ell-settled rule t!at license ta #ay bele ied upon a business or occupation alt!ou"! t!e land or property used t!erein is subAect to property ta .=urt!er#ore, t!e /tate #ay collect an ad alore# ta on property used in a callin" and at t!e sa#e ti#e i#pose alicense ta on t!e pursuit o t!at callin", t!e i#position o t!e latter :ind o ta bein" in no sense a double ta .(/anc!e8 s. +ollector o Internal Re enue 9E %5IL 6 E)

Double taxation has also been defined as taxing thesame person t"ice by the same taxing authority, "ithin the

same urisdiction and period for the same thing or purposeurely, a tax on the plaintiffFs products is different from a tax on

the privilege of storing copra in a bodega situated "ithin theterritorial boundary of the municipality (Procter H ?amblePhilippines vs Municipality of Iagna 29 - . 29)

SUBJECT MATTER: elations among impact, shiftingand incidence of a tax

-irect taxes are those demanded from the very person who, it is intended or desired, should pay them, whileindirect taxes are those demanded in the first instance from one person in the expectation and intention that he can shift theburden to someone else The contractorFs tax is of coursepayable by the contractor but in the last analysis, it is the o"nerof the building that shoulders the burden of the tax because thesame is shifted by the contractor to the o"ner as a matter ofpreservation Thus, it is an indirect tax on the >!B, "hich inthe last analysis is the one that "ill pay the tax indirectly throughthe contractor (-$ vs Iohn ?otamco H ons *9 - . 36)

SUBJECT MATTER: Tax vasion

The purpose of the merger "as to continue thebusiness of the old corporation, "hose corporate life "as aboutto expire, through the ne" corporation to "hich all the assetsand obligations of the former had been transferred Thus, it isexempt from capital gains tax There "as no taxable gain

derived (-ommissioner vs ufino *9 - . 9/)

SUBJECT MATTER: vidence to prove tax evasion

Since frau& is a state of min&, it nee& not bepro$e& b! &irect e$i&ence but ma! be inferre& from thecircumstances of the case" &!e ailure o t!e appellant todeclare or ta ation purposes !is true and actual inco#ederi ed ro# !is urniture business at t!e +lar: 0ir Base or t'o consecuti e years is an indication o !is raudulent intent to c!eat t!e "o ern#ent o its due ta es. (Republic

s. Gon8ales 1 /+R0 6 )

SUBJECT MATTER: Tax avoidance not punishable byla"

The court held that there "as nothing "rong or ob ectionableabout the estate planning scheme The legal right of a taxpayer to decrease the amount of what otherwise could be his taxes or altogether avoid them, by means which the law permits, cannot be doubted (Delpher Trades -orporation vs $.- *+5 - .3927 Cutivo ons !ard"are vs -$ **0 P!$4 5+*)

SUBJECT MATTER: xemption from Taxation

6


7/12


;nder t!e pertinent la', t!e e e#ption 'ould !a e to be deducted ro# t!e "ross inco#e in order todeter#ine t!e net inco#e subAect to ta . )Exemption is animmunit! or pri$ile e/ the free&om from a char e or bur&ento which others are sub ecte&"+ I t!e a#ounts o personal

and additional e e#ptions i ed by la' are e e#pt ro#ta ation, t!ey s!ould not be included as part o t!e net inco#e, '!ic! is ta able. (Green ield s. Meer EE %5IL 9 )

B @B 603, the charter of the petitioner does notprovide for any real estate tax exemption in its favor $tsexemption is limited to direct and indirect taxes, duties or fees inconnection "ith the importation of e#uipment not locallyavailable 8urther, even granting that the national governmento"ns the properties in #uestion, the exemption "ould not applybecause their beneficial use has been granted to petitioner, ataxable entity Taxation is the rule and exemption is theexception. &ny claim for tax exemption is strictly construed against the claimant (4ight ail Transit .uthority vs - .. 39/

- . 623)

1xemption from taxes does not include exemptionsfrom license fee (M .4-B vs Public ervice -ommission)

The 4ight ail Transit .uthority and the Metro TransitBrgani=ation function as service oriented entities, "hich providevaluable transportation facilities to the paying public $n theabsence, ho"ever, of any express grant of exemption in theirfavor, they are sub ect to the payment of real property taxes(4 T. vs - .. ? @o */53*6, */ Bct /000

SUBJECT MATTER: ationale of Tax xemptions

$o ta e e#ption is "i en 'it!out any reason t!ere or. Its a o'ed purpose is so#e public bene it or interest, '!ic! t!e la'-#a:in" body considers su icient to o set t!e #onetary loss entailed in t!e "rant o suc!e e#ption. (+IR s. %!ilippine 0ce Lines, Inc. 2 /+R0 91 &57L%>)

SUBJECT MATTER: ?rounds for Tax xemption

&!e purpose o Republic 0ct $o. 2, '!ic! "ranted t!e ta e e#ption, is to encoura"e t!eestablis!#ent or e ploitation o ne' and necessary industries to pro#ote t!e econo#ic "ro't! o t!e country.It is a or# o subsidy ro# t!e "o ern#ent to coura"eousentrepreneurs sta:in" t!eir capital in an un:no'n enture./uc! entrepreneur aces uncertainty and assu#ed a ris: bi""er t!an one en"a"in" in a enture already :no'n and de eloped. ;sually loss is incurred rat!er t!an pro it #ade. (Marcelo /teel +orporation s. +ollector o Internal Re enue 139 %5IL 9 1)

SUBJECT MATTER: -ontractual xemptions

The rule is that a special and local statute applicableto a particular case is not replaced by the later statute "hich isgeneral in its terms, provisions and application even if the termsof the general act are broad enough to include the cases in thespecial la" The presumption is that special statutes areexceptions to the general law because they pertain to a special

charter granted to meet a particular set of conditions and circumstances (Province of Misamis Briental vs -agayanelectric Po"er and 4ight -ompany $nc * * - . 3 )

%ranchises spring from contracts between the

sovereign power and private citi ens made upon valuableconsiderations, for purposes of individual advantage as well as public benefit $t is generally considered that the obligationresting upon the grantee to comply "ith the terms andconditions of the grant constitutes a sufficient consideration

uch being the case, the franchise is the la" bet"een theparties and they are bound by the terms thereof To allo"petitionerFs claim "ould be to defy and ignore the superiority ofa legislative franchise granted by a special enactment over amere authori=ation or permit granted in accordance "ith theprovisions of la"s of general application (-ommissioner of$nternal evenue vs -T. *2+ - . 999)

The #onstitution provides that a franchise is subject toamendment, alteration or repeal by the #ongress when the public interest so requires (-agayan lectric vs -$ )

SUBJECT MATTER Tax xemptionJ -onstruction

nless expressly provided by law, conviction for failure or neglect to pay a tax does not include payment of indemnity to the $tate in the amount of the tax not paid. (Peoplevs Iean .rnault 2/ Phil /+/)

@othing is better settled than that the Philippinesbeing independent and sovereign, its authority may beexercised over its entire domain There is no portion thereof thatis beyond its po"er >ithin its limits, its decrees are supreme, itscommands paramount $ts la"s govern therein, and everyone to "hom it applies must submit to its terms That is the extent of its urisdiction, both territorial and personal @ecessarily, li:e"ise, ithas to be exclusive $f it "ere not thus, there is a diminution ofits sovereignty ( eagan vs -$ ? @o 4A/6352 December/5, *262)

$f it had been the legislative intent to exempt petitionerfrom paying a tax on the use of imported e#uipments, thelegislative body could have easily done so by expanding theprovisions of par 2 and adding to the exemptions such "ords as;compensating taxes< or ;purchases from abroad for use in itsbusiness< and the li:e !e cannot ignore the principle that express mention in a statute of one exemption precludesreading others into it (Manila lectric -ompany vs 'era 65

- . 3+*)

The condonation of a tax liability is equivalent and isin the nature of a tax exemption. eing so, it should besustained only when expressed in explicit terms, and it can not be extended beyond the plain meaning of those terms. It is theuniversal rule that he who claims an exemption from his share

of the common burden of taxation must justify his claim by showing that the 3egislature intended to exempt him by wordstoo plain to be mista en ( urigao -onsolidated Mining co , incvs -$ , et al ? @o 4A*9 5 December /6, *263)

ince the specific language of the .ct spea: of &ureaformaldehyde,& and petitioner admittedly did import urea andformaldehyde separately, its plea could be granted only if "ecould construe the above provision of la" to read &urea andformaldehyde &s a refund it undoubtedly parta es of a nature

7


8/12


of an exemption, it cannot be allowed unless granted in themost explicit and categorical language ( esins, $nc vs .uditor?eneral, et al ? @o 4A*5 Bctober /2, *26 )

The legal principle on the matter is firmly established

and well+observed7 exemption from taxation is never presumed8for tax exemption to be recogni ed, the grant must be clear and expressed8 it cannot be made to rest on vague implications. Tax exemption must be clearly expressed and cannot beestablished by implication. 1xemption from a common burdencannot be permitted to exist upon vague implication (Davao4ight and Po"er co , $nc vs -ommissioner of -ustoms, T .4? @o 4A/ 532 March /2, *25/ ,>onder Mechanical ngineering -orp vs -T. , 1T &3. *.(./os. 3+99:;< = 3+95:une ?;, 4@5here the disclosure of such previously untaxedincome or "ealth "as not voluntary but rather theaccompaniment or result of tax cases or tax assessmentsalready pending as of 3* December *253, the claimant is notentitled to the benefits of P D @o 350 & tax amnesty, much li eto a tax exemption, is never favored nor presumed in law and if granted by statute, the terms of the amnesty li e that of a tax exemption must be construed strictly against the taxpayer and liberally in favor of the taxing authority (Pp vs -astaQeda ?@o 4A96 * eptember *+, *2 )

The mere filing of tax amnesty return under P D *590

and * 90 does not ipso facto shield him from immunity againstprosecution Tax amnesty is a general pardon to taxpayers whowant to start a clean tax slate. It also gives the government achance to collect uncollected tax from tax evaders without having to go through the tedious process of a tax case. To avail of a tax amnesty granted by the government, and to be immunefrom suit on its delinquencies, the tax payer must havevoluntarily disclosed his previously untaxed income and must have paid the corresponding tax on such previously untaxed income $t also bears noting that a tax amnesty, much li:e a tax

8


9/12


exemption, is never favored nor presumed in la" and if grantedby statute, the terms of the amnesty li:e that of a tax exemptionmust be construed strictly against the taxpayer and liberally infavor of the taxing authority ( aQas Ir vs -. O? @o*0/265 8ebruary *0, /000 )

. tax amnesty is a general pardon or intentionaloverloo:ing by the state of its authority to impose penalties onpersons other"ise guilty of evasion or violation of revenue ortax la" $t parta:es of an absolute forgiveness or "aiver by thegovernment of its right to collect "hat is due it and to have taxevaders "ho "ish to relent a chance to start "ith a clean slate$f granted, the terms must be construed strictly against the termsof the amnesty and liberally in favor of the taxing authority (-$vs Marubeni -orp ? @o *35355, * Dec /00*)

SUBJECT MATTER: @ature of $nternal revenue 4a"s

Petitioner1s contention that during the last "ar and asa conse#uence of enemy occupation in the Philippines &there "as no taxable year& "ithin the meaning of our internal revenuela"s because during that period they "ere unenforceable, is "ithout merit. It is well nown that our internal revenue laws arenot political in nature and as such were continued in forceduring the period of enemy occupation and in effect wereactually enforced by the occupation government. .s a matter offact, income tax returns "ere filed during that period and incometax payment "ere effected and considered valid and legal uchtax la"s are deemed to be the la"s of the occupied territory andnot of the occupying enemy ( milio y !ilado vs -ollector of$nternal evenue, et al *00 Phil / )

>ith respect to the petitioner1s contention that theapplication of the amended provision (no" ec +*Ad of the Tax-ode) to the cases at bar "ould run counter to the constitutionalrestriction against the enactment of ex post facto la"s, it is to benoted that the collection of interest in these cases is not penal innature, thus the imposition of . . . interest is but a just compensation to the state for the delay in paying the tax, and for the concomitant use by the taxpayer of funds that rightfully should be in the government's hands The fact that the interest charged is made proportionate to the period of delay constitutesthe best evidence that such interest is not penal but compensatory. (-entral .=ucarera Don Pedro vs -ourt of Tax.ppeals, et al /0 - . 399)

SUBJECT MATTER: -onstruction of Tax 4a"s

$t is our considered vie" that the freight revenuesaccruing to the taxpayer in the present case, even thoughcollected abroad and, not remitted to its branch office in thePhilippines, are part of its foreign exchange operations andsub ect to the common carrier1s tax, computed at the free

mar:et rate then prevailing (-$ vs oyal $nterocean 4ines, etal ? @o 4A/6 06 Iuly 30, *250)

The tax on alcohol did not attach as soon as it "as inexistence as such, but on the finished product .nd this must beso, other"ise a great in ustice "ould be caused upon a dulylicensed rectifier, "ho, li:e the respondent herein, "ill be madeto pay the specific tax on the alcohol lost thru evaporation, from "hich no one has been benefited, based on the provision ofla"s then extant, of doubtful application In every case of doubt,

tax statutes are construed most strongly against thegovernment and in favor of the citi ens, because burdens arenot to be imposed beyond what the statutes expressly and clearly import That in cases "here alcohol has already beenrectified either by original and continuous distillation or by

redistillation is further rectified, no loss for rectification andhandling shall be allo"ed and the rectifier thereof shall pay thespecific tax due on such losses ( ec +, ep .ct @o *60 )(-$ vs 4a TondeQa $nc , T .4 ? @o 4A*093* Iuly3*, *26/)

. statute "ill not be construed as imposing a taxunless does so clearly, expressly and it unambiguously $t is anancient principle that a tax can not be imposed "ithout clear andexpress "ords for that purpose .ccordingly, the general rule ofre#uiring adherence to the letter in construing statutes applies "ith peculiar strictness to tax la"s and the provisions of a taxingact are not to be extended by implicationThe rule is that taxesmay not be imposed by implication, and "a tax statute is to beconstrued strictly and against the subjection to a tax liability where the question is whether a matter, property or person issubject to the tax. (Marindu#ue $ron Mines, $nc vs Mun-ouncil of !inabangan amar, T .4 ? @o 4A* 2/9 Iune30, *269)

The exception contained in the tax statutes must bestrictly construed against the one claiming the exception. (Knion?arment $nc vs -T., T .4 ? @o 4A*6 02 Ianuary 3*,*26/7 Tuason vs 4ingad + - . 50)

SUBJECT MATTER: @on etroactivity of epeal ofregulations or rulings

It is a settled rule in statutory construction that astatute operates prospectively only and never retroactively,unless the legislative intent to the contrary is made manifest either by the express terms of the statute or by necessary implication. $n every case of doubt, the doubt must be resolvedagainst the retrospective effect There is nothing in the contextof the provision in #uestion that "ould manifest the 4egislature1sintention to have the provision apply to taxes due in the past$ndeed, li:e other statutes, tax la"s operate prospectively, "hether they enact, amend or repeal, unless, as aforesaid, thepurpose of the 4egislature to give retrospective effect isexpressly declared or may clearly be implied from the languageused (-ebu Portland -ement $nc vs -$ ? @o 4A/0+63

Bctober /2, *26 )

SUBJECT MATTER: 8orce and ffect of egulations

It can not be denied that the regulation is merely adirective to the tax officers8 it does not purport to change or modify the law 7 it does not create a liability to the stamp tax "hen the value of the goods does not appear on the face of thereceipt The practical usefulness of the directive becomesevident "hen account is ta:en of the fact that tax officers are inno position to "itness the issuance of receipts and chec: thevalue of the goods for "hich they are issued ($nterprovincial

us -o $nc vs -$ 2 Phil /20)

The validity of ection */5 of egulation @o /6should be upheld under the principle of legislative approvalby reenactment ection */5 of said regulation sought toimplement ection *992 (#) and (r) of the evised

9


10/12


.dministrative -ode, and the latter provisions "erereenacted in ection //5 of the @ational $nternal evenue-ode ection */5 is in the same egulations as ection*/* (Mindanao us -o vs -$ ? @o 4A*9058ebruary /9, *26*)

SUBJECT MATTER: .dministrative $nterpretation andthe -ourts

ection /6+2 of the lection 4a", in our opinion,refers and applies only to those persons "ho are ineligible ordis#ualified to hold office for not possessing the necessary#ualifications provided for by la" $n other "ords, said section/6+2 should be interpreted not in connection "ith section 905 butsections **3 or */0 of the lection 4a", depending as to "hetherthe person in #uestion is a senatorAelect or representativeAelect,and section 909 se# and 93* and 93/ of said la" aid section/6+2, as its very "ords indicate, refers to a person "ho assumesthe office to "hich he had been elected "ithout possessing thenecessary #ualifications to hold public office as provided by la"-elinquency in the payment of taxes is no longer a

disqualification for assuming a public office. $ection B;5 hasbeen impliedly repealed (People vs !ernande= +2 Phil /5/)

The underlying principle of all construction is that theintent of the legislature should be sought in the words employed to express it, and that when found it should be made to govern.If the words of the law seem to be of doubtful import, it may then perhaps become necessary to loo beyond them in order toascertain what was in the legislative mind at the time the law

was enacted8 what the circumstances were, under which theaction was ta en8 what evil, if any, was meant to be redressed (Molina vs afferty 35 Phil +9+)

SUBJECT MATTER: @onAretroactivity of epeal ofegulations or ulings

>hat is applicable in the case at bar is still theevenue uling of Ianuary /*, *2 0 because private

respondent urroughs 4imited paid the branch profit remittancetax in #uestion on March *9, *252 Memorandum -ircular @o A

/ dated March *5, *2 / cannot be given retroactive effect inthe light of ection 3/5 of the @ational $nternal evenue -ode "hich provides for thenon+retroactivity of rulings in cases whereit will be prejudicial to the taxpayer except in the following casesCaA where the taxpayer deliberately misstates or omits material facts from his return or in any document required of him by the

ureau of Internal (evenue8 CbA where the facts subsequently gathered by the ureau of Internal (evenue are materially different from the facts on which the ruling is based, or CcAwhere the taxpayer acted in bad faith. (-$ ' urroughs 4td? @o 4A666+3 Iune *2, *2 6)

SUBJECT MATTER: Prescription

Bnly recently in ? @o **+5*/, -ommission of$nternal evenue vs -ourt of .ppeals, %ebruary/+, *222, "eheld, that the threeAyear prescriptive period of tax assessment ofcontractorFs tax should be computed at the time of the filing ofthe &final annual percentage tax return, "hen it can be finallyascertained if the taxpayer still has an unpaid tax, and not from

the tentative #uarterly payments (ProtectorFs ervices vs -.O? @o ** *56 .pril */, /000

$t is of course true on Bctober *9, *2+*, .bla=a1saccountants re#uested a reinvestigation of the assessment ofthe income taxes against him, the period of prescription of

action to collect the taxes "as suspended ( ec 333, - . @o966 ) The provision of la" on prescription "as adopted in ourstatute boo:s upon recommendation of the tax commissioner ofthe Philippines "hich declaresJ nder the former law, the right of the *overnment to collect the tax does not prescribe.Dowever, in fairness to the taxpayer, the *overnment should beestopped from collecting the tax where it failed to ma e thenecessary investigation and assessment within < years after thefiling of the return and where it failed to collect the tax within < years from the date of assessment thereof. just as thegovernment is interested in the stability of its collection, so alsoare the taxpayers entitled to an assurance that they will not besubjected to further investigation for tax purposes after the

expiration of a reasonable period of time ('ol $$, eport of theTax -ommission of the Philippines, pp 3/*A3//7 epublic vs.bla=a *03 Phil **0+)

SUBJECT MATER: ubse#uent epealE.mendment

riefly, then, the time for the payment of the internalArevenue tax on merchandise, from the date of arrival in port until ust before it is "ithdra"n from the customhouse, dependingupon the "ill of the importer or o"ner, the law in force at thetime the payment is made must prevail8 because, voluntary human acts are governed by the laws in force at the time they are done, unless there is a legal provision to the contrary (4u=on ro:erage vs Posadas ? @o 4A/5 // December/9, *2/5)

SUBJECT MATTER: -ompensationE etABff

>e have consistently ruled that there can be no offAsetting of taxes against the claims that the taxpayer may haveagainst the government . person cannot refuse to pay a tax onthe ground that the government o"es him an amount e#ual to orgreater than the tax being collected The collection of a taxcannot a"ait the results of a la"suit against the governmentThe $nternal evenue Taxes can not be the sub ect of setAoff orcompensation & claim for taxes is not such a debt, demand,contract or judgment as is allowed to be set+off under thestatutes of set+off, which are construed uniformly, in the light of public policy, to exclude the remedy in an action or any indebtedness of the state or municipality to one who is liable tothe state or municipality for taxes @either are they a propersub ect of recoupment since they do not arise out of the contractor transaction sued on Taxes are not in the nature of contractsbetween the party and party but grow out of duty to, and are the positive acts of the government to the ma ing and enforcing of which, the personal consent of individual taxpayers is not

required (8rancia vs $.- T .4 ? @o 4A65692 Iune / ,*2 7 ut see Domingo vs ?arlitos, supra)

.t least as of date of udgment, more than *0 yearsfrom Iune * , *2+ , the date "hen, as expressly stated in thecertificates of indebtedness, the same "ere redeemable, theobligation thereby evidenced "as un#uestionably already dueand payable7 hence, ampaguita "as entitled to a udgmentagainst the epublic for the payment of the face value of thecertificates, the same having already been presented and

10


11/12


surrendered "ithin the said period of ten years (on Iune 2,*26*) to the Treasurer of the Philippines $n other "ords, therecan be no #uestion that after the lapse of ten (*0) years from thedeclared date of redeemability, payment of the indebtedness "as already exigible ( epublic vs ricta and ampaguita

Pictures ? @o 4A3+/3 .pril /*, *2 2)

SUBJECT MATTER: ealty Tax

(ealty tax is enforced throughout the 2hil. and not merely in a particular municipality or city but the proceeds of the tax accrue to the province, city, municipality and barangay wherethe realty taxed is situated. (Meralco ecurities vs - .., **9

- . /60)

& charge imposed only on property owners benefited is aspecial assessment rather than a tax not withstanding that thestatute calls it a tax. The rule is that an exemption form taxationdoes not include exemption from special assessment. ut the power to tax carriers with it the power to levy a special assessment (.postolic Prefect vs Treas of aguio 5* P!$4+95)

SUBJECT MATTER: Iurisdiction over Petition forProhibition

The trial court has no urisdiction to entertain a petitionfor prohibition absent petitionerFs payment, under protesr, of thetax assessed as re#uired by ec 69 of the PT- 2ayment of the tax assessed under protest, is a condition sine qua nonbefore the trial court could assume jurisdiction over the petition,and failure to do so, the (T# has no jurisdiction to entertain it (M .4-B vs arlis ? @o **9/3*, * May /00*)

SUBJECT MATTER: efund

The right to claim for refund of customs duties isspecifically governed by ec *50 of the Tariff and -ustoms-ode providing that in all claims for refund of customs duties,the -ollector to "hom such customs duties are paid and uponreceipt of such claim is mandated to verify the same by therecords of his office $f such claim is found correct and inaccordance "ith la", the -ollector shall certify the same to thecommissioner "ith his recommendations together "ith all thenecessary papers and documents This is precisely one of thereasons "hy the -T. upheld the dismissal of the case on theground that the -T.Fs urisdiction under the Tariff and -ustoms-ode is not concurrent "ith that of the respondentcommissioner of -ustoms due to the absence of anycertification from the -ollector of -ustoms of Manila (@estleFPhils 's - . ? @B *39**9, 6 Iuly /00*)

SUBJECT MATTER: eal Property Tax7 @otice of TaxDelin#uency to >hom ?iven

%or purposes of real property taxation, the registered owner of a property is deemed the taxpayer and, hence, theonly one entitled to a notice of tax delinquency and the resultant proceedings relative to an auction sale. 2etitioners, who

allegedly acquired the property through an unregistered deed of sale, are not entitled to such notice, because they are not theregistered owners (Talusan vs Tayag ? @o *3362 9 .pril/00*)

SUBJECT MATTER:@ature of Proceedings of .uction ale forthe -ollection of delin#uent Taxes

nli e registration proceedings, which are in rem,cases involving an auction sale of land for the collection of delinquent taxes are in personam Thus, notice by publication,though sufficient in proceedings in rem, does not as a rulesatisfy the re#uirement ofr proceedings in personam .s, such,mere publication of the notice of delin#uency "ould not suffice$t "as therefore still incumbent upon the city treasurer to sendthe notice of tax delin#uency directly to the taxpayer in order toprotect the interests of the latter

SUBJECT MATTER: Po"er of the $ -ommissionerto .ssign or eassign Personnel

The -ommissioner of $nternal evenue is authori=edto assign or reassign internal revenue officers or employees ofthe $ as the exigencies of service may re#uire, "ithoutdemotion in ran: and salary in accordance "ith -ivil ervice

ules ('in=onsA-hato vs Renorosa, ? @o */0+32)

SUBJECT MATTER: TaxpayerFs uit

It bears stressing that a taxpayer6s suit refers to acase where the act complained of directly involves the illegal disbursement of public funds derived from taxation. $nasmuchas no public funds raised by taxation are involved in this case,and in the absence of any allegations by petitioners that publicfunds are being misspent or illegally expended, petitioners, astaxpayers, have no legal standing to assail the legality of the'8. ( ayan, et al vs Ramora, et al ? @o *3 +50, *0 Bct/000)

SUBJECT MATTER: uspension of the unning of thetatute of 4imitations of Tax -ollection

The threeAyear prescriptive period of tax assessmentof contractorFs tax should be computed at the time of the filing ofthe ;final annual percentage tax return,< "hen it can be finallyascertained if the taxpayer still has an unpaid tax, and not fromthe tentative #uarterly payments

ec /5* of the *2 6 Tax -ode provides that therunning of the statute of limitations on the ma:ing of assessment

and the beginning of distraint or levy or a proceeding in the courtfor collection, in respect of any deficiency, shall be suspendedJ

* 8or the period during "hich the-ommissioner is prohibited from ma:ing theassessment or beginning distraint or levy orproceedings in court and for sixty days thereafter7

/ >hen the taxpayer re#uest forreinvestigation is granted by the -ommissioner

11


12/12


3 "hen the taxpayer cannot be located inthe address given by him in the return filed upon "hich a tax is being assessed or collected

The running of the statute of limitations "ill not be suspendedJ

* >hen the "arrant of distraint and levy is dulyserved upon the taxpayer, his authori=edrepresentative, or a member of hisa household "ithsufficient discretion, and no property could be located

/ >hen the taxpayer is out of the country(Protectors ervices $nc vs - . ? @o ** *56, */.pril /000)

SUBJECT MATTER: Deductibility of Iudicial xpenses

>udicial expenses are administration expenses. &dministration expenses, as an allowable deduction from thegross estate of the decedent for the purposes of arriving at thevalue of the net estate must be )essential to the collection of theassets, payment of debts or the distribution of the property tothe persons entitled to it.E The expenses must be essential tothe proper settlement of the estate. 1xpenditures incurred for the individual benefit of the heirs, devisees or legatees are not deductible $n the case at bar, the notarial fee paid for theextra udicial settlement is clearly a deductible expense sincesuch settlement effected a distribution of Pedro Pa onarFs estateto his la"ful heirs imilarly, the attorneyFs fees paid to P@ foracting as the guardian of Pedro Pa onarFs property during hislifetime should also be considered as deductible expense (-$vs - . ? @o */3/06, // March /000)

SUBJECT MATTER: Tax on $nstallment ale

.s a general rule, the "hole profit accruing from thesale of property is taxable as income in the year the sale "asmade ut, if not all of the sale price is received during suchyear, and a statute provides that the income shall be taxable inthe year in "hich it is ;received< the profit from an installmentsale is to be apportioned bet"een or among the years in "hichsuch installments are paid and received .lthough the proceedthe price of a discounted promissory note is not considered partof the initial payment, it is still taxable income for the year it "asconverted into cash ( aQas vs - . ? @o *0/265, *0 8eb/000)

SUBJECT MATTER: 4ocal Taxation

The exclusionary clause contained in the taxprovisions of ec *33 (*) of the 4ocal ?overnment code mustnot be held to have had the effect of "ithdra"ing the expresspo"er of the 4TB to cause the registration of all motor vehicles

and the issuance of licenses for the driving thereof. Taxationand 2olice 2ower are for public purpose and legislative innature, the similarities just about end there. &lthough correlativeto each other in many aspects, the grant of one does not necessarily carry the grant of the other (4TB vs -ity of utuan? @o *3*+*/, /0 Iuly /000)

SUBJECT MATTER: efund7 Prescriptive Period

The two+year prescriptive period for claiming refund commences to run on the date of the filing of the adjusted final tax return The court finds that the petition for revie" is filed outof time 8 T-, after the end of its corporate life on Iune 30,*2 +, should have filed its income tax return "ithin 30 days afterthe cessation of its business or 30 days after the approval of the.rticles of Merger ( P$ vs -$ , ? @o *996+3, / .ug /00*)

SUBJECT MATTER: Protest

If the protest is denied in whole or in part, or is not acted upon within 4:; days from the submission of documents,the taxpayer adversely affected by the decision or inaction may appeal to the #T& within ?; days from receipt of the said decision, or from the lapse of then 4:;+day period, otherwisethe said period shall become final, executory and demandable. >urisprudence dictates that a final demand letter for payment of delinquent taxes may be considered a decision on a disputed or protested assessment (-$ vs $sabela -ultural -orporation,? @o *3+/*0, ** Iuly /00*)

12

tax case doctrines part 1

Documents