DIGEST/CHERRIE MAY PANCO/NURSERY CARE CORP Vs ANTHONY ACEVEDO/July 30, 2014

 G.R. NO. 180651, JULY 30, 2014 

NURSERY CARE CORPORATION; SHOEMART, INC.; STAR APPLIANCE CENTER, INC.; H&B, INC.; SUPPLIES STATION, INC.; AND HARDWARE WORKSHOP, INC., PETITIONERS, VS. ANTHONY ACEVEDO, IN HIS CAPACITY AS THE TREASURER OF MANILA; AND THE CITY OF MANILA, RESPONDENTS.

FACTS:

The City of Manila assessed and collected taxes from the individual petitioners pursuant to Section 15 (Tax on Wholesalers, Distributors, or Dealers) and Section 17 (Tax on Retailers) of the Revenue Code of Manila. The City of Manila imposed additional taxes upon the petitioners pursuant to Section 21 of the Revenue Code of Manila. The City of Manila’s assessment of taxes under Section 21, the petitioners paid under protest the following amounts corresponding to the first quarter of 1999. On March 1, 1999, the petitioners formally requested the Office of the City Treasurer for the tax credit or refund of the local business taxes paid under protest.

City Treasurer Anthony Acevedo (Acevedo) denied the request through his letter of March 10, 1999. On April 8, 1999, the petitioners, through their representative, Cecilia R. Patricio, sought the reconsideration of the denial of their request. The City Treasurer did not reconsider. Liberty Toledo succeeded Acevedo as the City Treasurer of Manila. On April 29, 1999, the petitioners filed their respective petitions for certiorari in the Regional Trial Court (RTC) in Manila. 

ISSUE:

1.     Whether or not the CA properly denied due course to the appeal for raising pure questions of law.

2.     Whether or not the petitioners were entitled to the tax credit or tax refund for the taxes paid under Section 21.

RULING:

The appeal is meritorious.

1.  (1) The CA did not err in dismissing the appeal; but the rules should be liberally applied for the sake of justice and equity.

The Rules of Court provides three modes of appeal from the decisions and final orders of the RTC, namely:

(1) Ordinary appeal or appeal by writ of error under Rule 41, where the decisions and final orders were rendered in civil or criminal actions by the RTC in the exercise of original jurisdiction; The first mode of appeal is taken to the CA on questions of fact, or mixed questions of fact and law (2) petition for review under Rule 42, where the decisions and final orders were rendered by the RTC in the exercise of appellate jurisdiction;The second mode of appeal is brought to the CA on questions of fact, of law, or mixed questions of fact and law. (3) petition for review on certiorari to the Supreme Court under Rule 45. The third mode of appeal is elevated to the Supreme Court only on questions of law.

The issues to be raised on appeal can be gleaned from the appellant’s notice of appeal filed in the trial court, and from the appellant’s brief submitted to the appellate court. The petitioners filed a notice of appeal in which they contended that the April 26, 2002 decision and the order of July 17, 2002 issued by the RTC denying their consolidated motion for reconsideration were contrary to the facts and law obtaining in the consolidated cases. The RTC’s ruling that the taxes imposed on and collected from the petitioners under Section 21 of the Revenue Code of Manila constituted double taxation in the strict, narrow or obnoxious sense. The CA rightly concluded that the petitioners thereby raised only a question of law. The dismissal of their appeal was proper, strictly speaking, because Section 2, Rule 50 of the Rules of Court provides that an appeal from the RTC to the CA raising only questions of law shall be dismissed; and that an appeal erroneously taken to the CA shall be outrightly dismissed.

(2) Collection of taxes pursuant to Section 21 of the Revenue Code of Manila constituted double.

Double Taxation means taxing the same property twice when it should be taxed only once; that is, “taxing the same person twice by the same jurisdiction for the same thing.” It is obnoxious when the taxpayer is taxed twice, when it should be but once. Otherwise described as “direct duplicate taxation ,” the two taxes must be imposed on the same subject matter, for the same purpose, by the same taxing authority, within the same jurisdiction, during the same taxing period; and the taxes must be of the same kind or character.

The elements of Double Taxation concurred upon the City of Manila’s assessment on and collection from the petitioners of taxes for the first quarter of 1999 pursuant to Section 21 of the Revenue Code of Manila.

Firstly, because Section 21 of the Revenue Code of Manila imposed the tax on a person who sold goods and services in the course of trade or business based on a certain percentage of his gross sales or receipts in the preceding calendar year, while Section 15 and Section 17 likewise imposed the tax on a person who sold goods and services in the course of trade or business but only identified such person with particularity, namely, the wholesaler, distributor or dealer (Section 15), and the retailer (Section 17), all the taxes  being imposed on the privilege of doing business in the City of Manila in order to make the taxpayers contribute to the city’s revenues  were imposed on the same subject matter and for the same purpose.

Secondly, the taxes were imposed by the same taxing authority (the City of Manila) and within the same jurisdiction in the same taxing period (i.e., per calendar year).

Thirdly, the taxes were all in the nature of local business taxes.

Under Section 21 of the Revenue Code of Manila constituted double taxation , and the taxes collected pursuant thereto must be refunded.

The Court GRANTS the petition for review on certiorari; REVERSES and SETS ASIDE.