Tambunting Pawnshop. Inc, v.

Commissioner of Internal Revenue

G.R. No. 179085
January 21, 2010
Facts:
Petitioner was assessed for deficiency Value dded !a" and #ocu$entary
%ta$& !a" on t'e &re$ise t'at, for t'e Value dded !a", it was en(a(ed in t'e
sale of ser)ices.
Issues:
*'et'er or not t'e Petitioner is lia+le for t'e Value dded !a",
*'et'er or not t'e i$&osition of surc'ar(e and interest +e wai)ed on t'e
i$&osition of deficiency #ocu$entary %ta$& !a",
Ruling:
N-. %ince Petitioner is considered a non.+an/ financial inter$ediary, it is
su+0ect to 101 V! for t'e ta" years 1992 to 2002 +ut since t'e collection of
Value dded !a" fro$ non.+an/ financial inter$ediaries was s&ecifically deferred
+y law, Petitioner is not lia+le for Value dded !a" durin( t'ese ta" years. *it'
t'e full i$&le$entation of t'e Value dded !a" syste$ on non.+an/ financial
inter$ediaries startin( January 1, 2003, Petitioner is lia+le for 101 Value dded
!a" for said ta" year. nd +e(innin( 2004 u& to t'e &resent, +y )irtue of R.. No.
9238, &etitioner is no lon(er lia+le for V! +ut it is su+0ect to &ercenta(e ta" on
(ross recei&ts fro$ 01 to 51, as t'e case $ay +e.
56%. Petitioner7s ar(u$ent a(ainst lia+ility for surc'ar(es and interest t'at
it was in (ood fait' in not &ayin( docu$entary sta$& ta"es, it 'a)in( relied on
t'e rulin(s of res&ondent 89R and t'e 8! t'at &awn tic/ets are not su+0ect to
docu$entary sta$& ta"es : was found to +e $eritorious. Good fait' and 'onest
+elief t'at one is not su+0ect to ta" on t'e +asis of &re)ious inter&retations of
(o)ern$ent a(encies tas/ed to i$&le$ent t'e ta" law are sufficient 0ustification
to delete t'e i$&osition of surc'ar(es and interest.
National Power Corporation v. Province of Queon an! "unicipalit# of
Pagbilao
G.R. No. 171582
January 25, 2010
Facts:
!'e Pro)ince of ;ue<on assessed =irant Pa(+ilao 8or&oration>=irant? for
un&aid real &ro&erty ta"es in t'e a$ount of P1.5@illion for t'e $ac'ineries
located in its &ower &lant in Pa(+ilao, ;ue<on. Na&ocor, w'ic' entered into a
@uild.-&erate.!ransfer >@-!? (ree$ent >entitled 6ner(y 8on)ersion
(ree$ent? wit' =irant, was furnis'ed a co&y of t'e ta" assess$ent. Na&ocor
>nota bene, not =irant? &rotested t'e assess$ent+efore t'e Aocal @oard
of ssess$ent &&eals >A@?, clai$in( entitle$ent to t'e ta$ e$emptions
&ro)ided under %ection 234of t'e Aocal Go)ern$ent 8ode. nd assu$in( t'at it
cannot clai$ t'e said ta" e"e$&tions, Na&ocor ar(ued t'at it is entitled to certain
ta$ privileges.

!o &ro)e t'at it 'ad le(al interest in t'e ta"ed $ac'ineries, Na&ocor relied
onB 1. t'e sti&ulation in t'e @-! (ree$ent t'at aut'ori<ed t'e transfer of
owners'i& to Na&ocor after 25 yearsC 2. its aut'ority to control and su&er)ise t'e
construction and o&eration of t'e &ower &lantC and 3. its o+li(ation to &ay for all
ta"es t'at $ay +e incurred, as &ro)ided in t'e @-! (ree$ent.

Issues:
*'et'er or not t'e &etitioner can file t'e &rotest a(ainst t'e real &ro&erty ta"
assess$ent,
*'et'er or not t'e Petitioner can clai$ e"e$&tion fro$ t'e RP! (i)en t'e @-!
arran(e$ent wit' =irant,
*'et'er or not t'e &ay$ent under &rotest reDuired +efore an a&&eal to t'e A@
is $ade,
%&'(:
N-. !'e two entities )ested wit' &ersonality to contest an assess$ent are
>a? t'e owner or >+? t'e &erson wit' le(al interest in t'e &ro&erty. NP8 is neit'er
t'e owner nor t'e &ossessorEuser of t'e su+0ect $ac'ineries e)en if it will acDuire
owners'i& of t'e &lant at t'e end of 25 years. !'e 8ourt said t'at le(al interest
s'ould +e an interest t'at is actual and $aterial, direct and i$$ediate, not si$&ly
contin(ent or e"&ectant. *'ile t'e Petitioner does indeed assu$e res&onsi+ility
for t'e ta"es due on t'e &ower &lant and its $ac'ineries, t'e ta" lia+ility referred
to is t'e lia+ility arisin( fro$ law t'at t'e local (o)ern$ent unit can ri('tfully and
successfully enforce, not t'e contractual lia+ility t'at is enforcea+le +etween t'e
&arties to a contract. !'e local (o)ern$ent units can neit'er +e co$&elled to
reco(ni<e t'e &rotest of a ta" assess$ent fro$ t'e Petitioner, an entity a(ainst
w'o$ it cannot enforce t'e ta" lia+ility. !'e AG8 &ro)ides t'at $ere &ecuniary
interest is not sufficientC our law 'as reDuired le(al interest in t'e &ro&erty ta"ed
+efore any ad$inistrati)e or 0udicial re$edy can +e a)ailed. !'e ri('t to a&&eal a
ta" assess$ent is a &urely statutory ri('tC w'et'er a &erson c'allen(in( an
assess$ent +ears suc' a relation to t'e real &ro&erty +ein( assessed as to
entitle 'i$ t'e ri('t to a&&eal is deter$ined +y t'e a&&lica+le statute in t'is case,
our own AG8, not F% federal or state ta" laws.
N-. !o successfully clai$ e"e$&tion under %ection 234 >c? of t'e AG8,
t'e clai$ant $ust &ro)e two ele$entsB a? t'e $ac'ineries and eDui&$ent are
actually, directly, and e"clusi)ely used +y local water districts and (o)ern$ent.
owned or controlled cor&orationsC and +? t'e local water districts and
(o)ern$ent.owned and controlled cor&orations clai$in( e"e$&tion $ust +e
en(a(ed in t'e su&&ly and distri+ution of water andEor t'e (eneration and
trans$ission of electric &ower. Ga)in( failed to co$&ly wit' +ot' reDuire$ents,
t'e clai$ for e"e$&tion $ust fall.
56%. 9f a ta"&ayer dis&utes t'e reasona+leness of an increase in a real
&ro&erty ta" assess$ent, 'e is reDuired to Hfirst &ay t'e ta"H under &rotest. !'e
case of !y does not a&&ly as it in)ol)ed a situation w'ere t'e ta"&ayer was
Duestionin( t'e )ery aut'ority and &ower of t'e assessor, actin( solely and
inde&endently, to i$&ose t'e assess$ent and of t'e treasurer to collect t'e ta".
clai$ for ta" e"e$&tion, w'et'er full or &artial, does not Duestion t'e aut'ority of
local assessors to assess real &ro&erty ta". !'e local assessor 'as t'e aut'ority
to assess t'e &ro&erty for realty ta"es, and any su+seDuent clai$ for e"e$&tion
s'all +e allowed only w'en sufficient &roof 'as +een adduced su&&ortin( t'e
clai$. %ince Na&ocor was si$&ly Duestionin( t'e correctness of t'e assess$ent,
it s'ould 'a)e first co$&lied wit' %ection252, &articularly t'e reDuire$ent of
&ay$ent under &rotest. Na&ocorIs failure to &ro)e t'at t'is reDuire$ent 'as +een
co$&lied wit' t'us renders its ad$inistrati)e &rotest under %ection 222 of t'e
AG8 wit'out any effect. No &rotest s'all +een entertained unless t'e ta"&ayer
first &ays t'e ta".
(ia v. )ecretar# of Finance
*.R. No. +,-../
July 19, 2011

Facts:
Petitioners Renato V. Diaz and Aurora Ma. F. Timbol (petitioners) filed
this petition for declaratory relief assailin the !alidity of the impendin
imposition of !alue"added ta# (VAT) by the $ureau of %nternal Re!enue
($%R) on the collections of toll&ay operators. 'ourt treated the case
as one of prohibition. Petitioners hold the !ie& that 'onress did not( &hen it
enacted the )%R'( intend to include toll fees &ithin the meanin of *sale of
ser!ices* that are sub+ect to VAT, that a toll fee is a *user-s ta#(* not asale of
ser!ices, that to impose VAT on toll fees &ould amount to a ta# on
public ser!ice, and that( since VAT &as ne!er factored into the formula
for computin toll fees( its imposition &ould !iolate the non"impairment clause of the
constitution .The o!ernment a!ers that the )%R' imposes VAT on all
.inds of ser!ices of franchise rantees( includin toll &ay operations, that
the 'ourt should see. the meanin and intent of the la& from the &ords used in
the statute, and that the imposition of VAT on toll &ay operations has been the
sub+ect as early as /001 of se!eral $%R rulins and circulars. The o!ernment also
arues that petitioners ha!e no riht to in!o.e the non"impairment of contracts
clause since they clearly ha!e no personal interest in e#istin toll
operatin areements (T2As) bet&een the o!ernment and toll &ay
operators. At any rate( the non"impairment clause cannot limit the 3tate-s so!erein
ta#in po&er &hich is enerally read into contracts.
Issue:
*'et'er of not toll fees collected +y toll way o&erators +e su+0ect to V!,
Ruling:
YES. VAT is imposed on all kinds of services and toll way operators who
are engaged in constructing maintaining and operating e!pressways are
no different from lessors of property transportation contractors etc.
Not only do t'ey fall under t'e +road ter$ under >1? +ut also co$e under
t'ose descri+ed as Jall ot'er franc'ise (ranteesK w'ic' is not confined only to
le(islati)e franc'ise (rantees since t'e law does not distin(uis'. !'ey are also
not a franc'ise (rantee under %ection 119 w'ic' would 'a)e $ade t'e$ su+0ect
to &ercenta(e ta" and not V!.
Neit'er are t'e ser)ices &art of t'e enu$eration under %ection 109 on
V!.e"e$&t transactions.
!'e toll fee is not a userIs ta" and t'us it is &er$issi+le to i$&ose a V!
on t'e said fee. !'e =9 case does not a&&ly and t'e 8ourt e$&'asi<ed t'at
toll fees are not ta"es since t'ey are not assessed +y t'e @9R and do not (o t'e
(eneral coffers of t'e (o)ern$ent. !oll fees are collected +y &ri)ate o&erators as
rei$+urse$ent for t'eir costs and e"&enses wit' a )iew to a &rofit w'ile ta"es
are i$&osed +y t'e (o)ern$ent as an attri+ute of its so)erei(nty. 6)en if t'e toll
fees were treated as userIs ta", t'e V! can not +e dee$ed as a Lta" on ta"I
since t'e V! is i$&osed on t'e toll way o&erator and t'e fact t'at it $i('t &ass.
on t'e sa$e to t'e toll way user, it will not $a/e t'e latter directly lia+le for V!
since t'e s'ifted V! si$&ly +eco$es &art of t'e cost to use t'e toll ways.
!'e assertion t'at t'e V! i$&osed is not ad$inistrati)ely feasi+le (i)en
t'e $anner +y w'ic' t'e @9R intends to i$&le$ent t'e V! >i.e., roundin( off t'e
toll rates and &uttin( any e"cess collection in an escrow account? is not enou('
to in)alidate t'e law. Non.o+ser)ance of t'e canon of ad$inistrati)e feasi+ility
will not render a ta" i$&osition in)alid Je"ce&t to t'e e"tent t'at s&ecific
constitutional or statutory li$itations are i$&airedK.
8-==9%%9-N6R -M 9N!6RNA R6V6NF6 V%. %= PR9=6 G-A#9NG%, 9N8.
*.R. No. +/01,/
No)e$+er 17, 2010
9%%F6B
re t'e (ross recei&ts deri)ed +y o&erators or &ro&rietors of cine$aEt'eater
'ouses fro$ ad$ission tic/ets su+0ect to V!,
G6A#B
N-. *'ile >1? t'e enu$eration under %ection 108 on t'e V!.ta"a+le ser)ices is
not e"'austi)e and >2? t'e said list includes Jt'e lease of $otion &icture fil$s,
fil$s, ta&es and discsK, t'e said acti)ity 'owe)er is not t'e sa$e as s'owin( or
e"'i+ition of $otion &ictures or fil$s. !'us, since t'e s'owin( or e"'i+ition of
$otion &ictures or fil$s is not in t'e enu$eration, t'e 89R $ust s'ow t'at it falls
under t'e &'rase Jsi$ilar ser)icesK.
!'e re&eal of t'e Aocal !a" 8ode +y t'e AG8 of 1991 is not a le(al +asis for t'e
i$&osition of V! on t'e (ross recei&ts of cine$aEt'eater o&erators or &ro&rietors
deri)ed fro$ ad$ission tic/ets. !'e re$o)al of t'e &ro'i+ition >on t'e national
(o)ern$ent to ta" certain acti)ities? under t'e Aocal !a" 8ode did not (rant nor
restore to t'e national (o)ern$ent t'e &ower to i$&ose a$use$ent ta" on
cine$aEt'eater o&erators or &ro&rietors. Neit'er did it e"&and t'e co)era(e of
V!.