FACTS:
The changes were: (1) with respect to sugar centrals, by increasing the rates of license taxes; and (2) as to sugar refineries, by increasing the rates of license taxes as well as the range of graduated schedule of annual output capacity.
The trial court rendered its judgment declaring that the ordinance in question refers to license taxes or fees. Both plaintiff and defendant directly appealed to the Supreme Court.
VMCI filed suit below to ask for judgment declaring Ordinance No. 1, series of 1956, null and void; ordering the refund of all license taxes paid and to be paid under protest; directing the officials of Victorias and the Province of Negros Occidental to observe, during the pendency of the action, the provisions of section 357 of the Revised Manual of Instructions to Treasurers of Provinces, Cities and Municipalities, 1954 edition, regarding the treatment of licenses taxes paid under protest by virtue of disputed ordinance; and other reliefs.
Ordinance in question is not discriminatory.
The ordinance does not single out Victorias as the only
object of the ordinance but is made to apply to any sugar central or sugar
refinery which may happen to operate in the municipality. The fact that
Victorias Milling is actually the sole operator of a sugar central and a sugar
refinery does not make the ordinance discriminatory. The ordinance is unlike
that in Ormoc Sugar Company vs. Municipal Board of Ormoc City, which
specifically spelled out Ormoc Sugar as the subject of the taxation, the name
of the company herein was never mentioned in the ordinance.
A quick glance at the big amount of maximum annual tax set forth in the ordinance, P40, 000. 00 for sugar centrals, and P40, 000.00 for sugar refineries, will readily convince one that the tax is really a revenue tax. And then, we read in the ordinance nothing which would as much as indicate that the tax imposed is merely for police inspection, supervision or regulation. Given the purposes just mentioned, we find no warrant in logic to give our assent to the view that the ordinance in question is solely for regulatory purpose. The ordinance is for raising money. To say otherwise is to misread the purpose of the ordinance. We, accordingly, rule that Ordinance No. 1, series of 1956, of the Municipality of Victorias, was promulgated not in the exercise of the municipality’s regulatory power but as a revenue measure — a tax on occupation or business. The authority to impose such tax is backed by the express grant of power in Section 1 of Commonwealth Act 72.
3. Whether or not Ordinance No. 1 constitutes double taxation. (NO)
Ordinance in question does not constitute double taxation.
VMCI’s argument on double
taxation must not be upheld: First. The two taxes cover two different objects.
Section 1 of the ordinance taxes a person operating sugar central or engaged in
the manufacture of centrifugal sugar. While under Section 2, those taxed are
the operators of sugar refinery mills. One occupation or business is different
from the other. Second. The disputed taxes are imposed on occupation or
business. Both taxes are not on sugar. The amount thereof depends on the annual
output capacity of the mills concerned, regardless of the actual sugar milled.
Plaintiff’s argument perhaps could make out a point if the object of taxation
here were the sugar it produces, not the business of promoting it.
The judgment under review is hereby reversed; and judgment is hereby rendered:
(a) declaring valid and subsisting Ordinance No. 1, series of 1956, of the Municipality of Victorias, Province of Negros Occidental; and
(b) dismissing plaintiff's
complaint as supplemented and amended. Costs against plaintiff.
So ordered.
Case Digest by: Paler, Meg Dianne C. / JD1 2020-2021
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