THE TREASURER OF THE CITY OF MANILA v. UNILIVER PHILS., INC. (Consolidated with Case Nos. AC-48 & AC-49)

' REPUBLIC OF THE PHILIPPINES COURT OFTAX APPEALS QUEZON CITY FIRST DIVISION THE TREASURER OF THE CITY OF C.T.A. AC NO. 46 MANILA, (Civil Case No. 02-104955) Petitioner, -versus- UNILEVER PHILIPPINES, INC., �~ Respondent. x-------------------------------------------------------------- -------------------------------~---7-~---x THE TREASURER OF THE CITY OF . MANILA, Petitioner, C.T.A. AC NO. 48 -versus- (Civil Case No. 04-108907) UNILEVER PHILIPPINES, INC., Respondent. X--------------------------------------------------------------------------------------------------------X THE TREASURER OF THE CITY OF MANILA, C.T.A. AC NO. 49 Petitioner, , (Civil Cnse No. 04-109703) �, Members: -versus- ACOSTA, Chairperson BAUTISTA, and C' ASANOVA, JI UNILEVER PHILIPPINES, INC., Respondent. X-----------------------------------------~ -~-~~-~-~-~ -~------;;; BAUTTSTA, [.: Before Us are three Petitions for Rev iew' fil ed by the Treasurer of the City of Manila against Unilever Philippines, lnc., praying for the reversal of: v 1 Rollos. C.T.A. AC No. 46 (Civil Case No. 02-1 04955) pp. 6 - 69: CT. A. AC No. 48 (C ivi l Case No. 04- 108907) pp. 6- 127; and C.T. A. AC No. 49 (Civil Case No. 04- 109703) pp. 6 - I00. all with Ann exes.

CTA A.C. Nos. 46, 48 , & <19 Decis ion Page 2 of 18 ; 1. the Decision dated November 3, 2006 rendered by Branch 21 of the Regional Trial Court of Manila, granting herein respondent's claim for refund; and 2. the Order dated July 12, 2007, denying herein petitioner's Motion for Reconsideration. In the first Petition, docketed as C TA AC N0. 46, the Regional Trial Court of Manila, Branch 21, in Civil Case No. 02-104955, entitled "Unilever Philippines, Inc. v . The Treasurer of !:he CihJ nf Mrmiln ,II granted respondent's claim for refund of the taxes paid for the fourth (4111) quarte r o f the taxable year 2000 in the amount of P6,403,030.62. Similarly, in the second Petition, docketed as C.TA. AC No. 48, the same trial court, in Civil Case No. 04-108907, also entit�led "UniiPver Philippines, In c. v. The Trerzsllrer of the City of Mnniln,II granted res pond e nt' s claim for refund of taxes paid for th e first (1st) quarter of the taxable year 2002 in the amount of P11,350,041.07. While in the third Petition, docketed as C.T.A. AC No. 49, respondent's claim for refund of the taxes paid for the second (2nd) que1rter of the taxable year 2002 in the a mount of P11,350,04l .07 was also gra nted b y the same trial court, in Civ il Case No. 04-109703, likewise entitl ed "Unilnw r Philippines, Inc. v . The Trensurer of tl1e City of Mrzniln .11 Since all Petitions for Review involve the sa m e parties and subject matter, y We d ee med it necessary to consolidate th e r1forementioned Petitions in Our Resolution d a ted April4, 2008. 2 2 !?olio, C.T.A. AC No. 46 (Civil Case No. 02-1 04955), pp. 250 - 25 I.

CT A A .C. Nos . 46, 4R . & 49 Decision AntecedeNt Fncts Petitioner is the City Treasurer of the City of Manila tasked with the implementation of the City's Revenue Code, as well as the collection and ~ssessment of business taxes, license fees, and p ermit fees. Respondent Unilever Philippines, Inc., on th e other hand, is a domestic corporation duly organized under the laws o f th e Philippines with principal office address at 1351 United Nations Avenue, M<mila . Respond ent paid the business taxes coll ectecl from it by the City of Manila, pursuant to Sections 14 and 21 of Ordinance No. 7794, as amended, otherwise known as the Manila Revenue Code ("MRC"). Section 14 of the said Code provides for the tax on manufacturers, assemblers, and other processors of articles of commerce. The rates for this ty pe of tax have been amended by Ordinance No. 7988 in the year 2000 and Ordimmce No. 8011 in the year 2001. Section 21 of the MRC, on the other hand, impo.ses the tax on businesses subject to excise, value-added or percenta ge taxes under the NntionaJ Internal Revenue Code ("NIRC") . This provision has likewise beC' n modified by the amendments introduced by Ordinance Nos. 7988 and 8011 . Respond ent, believing that the enforcement of Sec tion 21 of the MRC constitutes double taxation, filed several ciRims for refund with the City Treasurer. C.T.A. Case No. 46 (Civil Case No. 02-104955) y In a letter dated October 4, 2001, respond ent fil ed a claim for refund with the City Treasurer for the business taxes it timely paid on October 20, 2000

CTA A.C. No,. 46, 48 . & 49 Decision Page 4 of I8 the 4th quarter of the taxable year 2000 in th e amount of P6,403,030.62, pursuant to Section 21 of the MRC.3 Having received no response from the City Treasurer, respondent filed a Petition for Refund on October 24, 2002 with th e Regional Trial Court of Manila, pursuant to Sec tion 196 of the Local Government Code of 1991 ("LGC").4 The case was d ocke ted as Civil Case No. 02-104955 a nd raffl ed to Branch 21 of the � Regional Trial Court of Manila. On Nov ember 8, 2002, the City Treas urer of Manila filed her Answer to the Petition for Refund .5 In her Answer, th e City Treasurer admitted the fact of paym ent of th e taxes paid under Section 14 of the MRC, as well as those paid under Section 21 thereof. However, she insisted th at respondent is not entitled to refund becnuse there is no doubl e taxation . The case was set for preliminary conference. Durin g th e pre-h�ial, the proceedin g in th e s;::lid preliminary conference was adopted and the parties agreed to si mllltaneously file their respective Memoranda w ithin thirty (30) da ys. On Mardl 8, 2004, the City Treasurer submitted her Memorandum, while herein respond ent fil ed its Motion to Admit Memorandum o n March 15,2007.6 C.T.A. Case No. 48_Kivil Case No. 04-1 0890?)_ In a le tl er dated January J 2, 2004, respond ent fil ed a claim for refund with the City Treasurer for the business taxes erroneously assessed and collected on January 21, 2002, for the 1st quarter of the taxable year 2002 in the sum of 3 Rollo, C. T.A AC No. 46 (Civ il Case No. 02-1 04955), pp . 130 IJ I 7 4 !d., p. 7. �' 5 ld., p. 8. 6 Jd. ,. J"'\

CTA A.C. Nos. 46 . 48. & 49 Decision P11,350,041 .07, under Section 21 of MRC.7 Despite the lapse of time, the City Treasurer failed to comply with the demand. Thus, on January 20, 2004, respondent fil ed a Petition for Refund w ith the Regional Trial Court of Manila, docketed as Civil Case No . 04-108907.8 On February 20, 2004, the City Treasurer of Ma nila filed her Answer alleging, among others, that the Petition for Refnnd s tates no cause of action and that the same is premature under Section 195 of th e LGC 9 Thereafter, th e case was set for preliminary con fe rence. Durin g the pre-trial, the proceedin g in th e sa id preliminary conference was adopted and the parties agreed to simultan eo usl y file their respective Memorand a within thirty (30) da ys. On Sep~ernbe r 2:1, 2005, herein respondent fil ed its Mem orandum. On September 27, 2005, th e City Treasurer submitted her Memorandum . 10 C.T.A. Case No._49 (Civil Case No. 04-109703_)_ In a letter dated March 26, 2004, respond ent fil ed w ith the City Treasurer, a claim for refund of business taxes assessed a nd co ll ec ted based on Section 21 of the MRC for the 2nd quarter of the taxn hl e yea r 2002 in the sum of P11,350,041 .07.11 However, notwithstandin g rece ipt of th e claim for refund, no refund was mad e by the City Treasurer which constituted a denial of the claim. I 7 Rollo, C.T.A . AC No . 48 (C ivil Case No . 04-1 08907), p. 3 1. 8 !d . p. 7. 9 ld , pp. 51 - 59 . 10/d., p. 8. 11 Rollo, C.TA. AC No. 49 (C ivil Case No. 04-1 09703), pp. 3 1 - 32.

CTA A.C Nos. 46. 48 , & 49 Decision Hence, respondent filed a Petition for Refu nd on April 16, 2004 with the Regional Trial Court of Manila, Branch 21, docketed as Civil Case No. 04:... 109703 .12 On May 17, 2004, the City Treasurer fil ed her Answer raising, among others, the d efense that there is no double tet xation as the tax imposed under Section 21 is not a tax on the business per sP.; rather, it is a tax on the person availing of the goods and services of the busi ness.n The case was subsequently set for preliminary conference. Durin g the pre-trial, the proceedin g in the said preliminary conference was adopted and the parties agreed to simultanenusly file their respective Memoranda within thirty (30) da ys.14 � AIJ three Petitions for Refund were consolid ated by the Regional Trial Court of Manila, Branch 21. The following issues were submitted h v th e parties for resolution by the trial court: "1) Whether or not Ordinance Nos . 7988 and 80'1 1 am e nding the Manila Revenue Code violated the proced ura l rul es of ta xa tion for their effectivity and implementation thu s ca nno t be made the basis of assessment of taxes; 2) Wh e tlwr or n o t the enforcem ent of Sec. :2 1 nf the Revenue Code of Mnnila against p etitioner cons titutef: dnuhl e ta'Ca ti nn prohibited by law in view of taxes collected by the Citv and paid by petitioner under Sec. 14 of the same Cod e; 3) Whether or not the taxes paid by peti ti one r to th e City on the basis of Section 21 should b e immediately , efund ed." " ~ 12 Roflo, C.T.A. 1\ C No. 49 (Civil Case No. 04-1 09703), p. 7. I) lei, pp. 54 - 64. 14/d. , p. 8. 15 Rollos, C.T.A. AC No. 46 (Civil Case No. 02-104955), pp. 52 - 53 ; C.TA AC No. 48 (Ci vil Case No. 04- 108907) pp.l I0 - I I I ; and C. T.A. AC No. 49 (Civil Case No. 04-109703) pp. 83 - 84. Assail ed Decision dated November 3, 2006, pp. 3 - 4.

CTA A C. Nos. 46, 48, & 49 Decision Page 7 of I ~ The Ruling of the Trial Court On November 3, 2006, the trial court, th rough Judge Amor A. Reyes, rendered a Decision16 granting the daims for refund of h erein respondent. The - trial court agreed with the opinion of the Department of Finance, through the Bureau of Local Government Finance, that Sec ti on 21 of the MRC amounts to double taxa tion in view of the taxes already coll ec ted und er Section 14 or similar p r o v i sio n s. In addition, the trial court, citing "the case of Com-Cola Bottlers Philippines, Inc. v. City of Man ila, Liberty M. Toledo, ct. n/. ,17 rul ed that both Tax Ordinance Nos . 7988 and R011 are null and void and w ith out legal e ffect. Thus, it disposed of the case in this wise: "WHERFORE, premises considered, th e petiti ons are hereby GRANTED . The application to petiti oner of Sec. 21 of the Tax O rdin;m ce No . 7988 as amended by Ta x O rdin ance No. 8011 is h ereby dec lared VOID. Respondent is hereby o rd ered to RF.FUND/CREDIT petitio ne r the ta xes paid und er Sec. 2�1 of th e sn id o rdinance. With costs against respondents. SO ORDERED."J s Aggri eved by th e Decision, herein pe tition er filed a Motion for Reconsideration,19 arguing tbat the d ec larCiti on of the Suprem e Court in the case of Cocn-Coln h as no doctrinal effec t inasm uch as th e pronouncement tha t Ordinance Nos. 7988 and 8011 are null Clnd \'o id , was made only in order to 7 determine the propriety of th e dismissal of th e tri ;:-tl court of the petition for injunction fi led by Coca-Cola. 16 !d., C.T.A. AC No. 46 (C ivil Case No. 02- 104 955) pp . 48- '5: \ .T./\. i\C No . 48 (Civ il Case No. 04- 108907) pp. l06 - 11 3: and C l .i\. AC No. 49 (C ivil Case No. 04-109703) I'P � 79 - RG. 17 G.R. No . 1511252, 493 SCRA 279, Jun e 27. 2006. 18 Rollos. C.T.A. i\C No. 46 (Civ il Case No. 02- 104955) p. 55: C . J'.A i\l ' No . !JX (C j vi i Case No. 04- 108907} ~ � 11 3; and C.T.A. AC No. 49 (Civil Case No. 04-1 09703) p. 86. 19 Jd, C.T.A. AC No. 46 (C ivil Case No . 02- 104955) pp. 59 - 68; C:f .A. AC No. 48 (C ivil Case No . 04-108, 07) pp. 11 7- 126; and C.T.A . AC No. 49 (C ivil Case No. 04-1 09703) pp . 90 -99.

CTA A C. Nos. 46, 48, & 49 Decision Page 8 or 18 Moreover, petitioner argued that the Petitions for Refund are fatally flawed and should be dismissed outright for failure of respondent to plead its capacity to sue. Petitioner likewise claimed that respondent failed to state the authority of Atty. Danilo L Cruz to sign for and on behalf of the respondent On July 12, 2007, the trial court issued an Order20 denying the Motion for Reconsid eration . The Tssues Hence, the present recourse with petiti oner asrr ihin g to the trial court the following errors: "L \tVIwth er or not the Honorabl e Region al Trial Court gravely erred in holdin g that there is double taxatio n in th e imrosition of Section 21 of th e Manila Revenue Code, as am ended . TL Wheth er or not the Honorable Regional Tria l Court gmvely erred in holding tha t Section 21 is ex press ly' pro hibited by Sec tion 133 of the Local Government Cod e. [[T. Whe th er or n ot th e Honorabl e .Region a l Tr ia l Co urt gravely erred in holding that Sections ] 95 and 187 of th e Lora I Government Code do n ot apply in the instant case."21 The Ruling of t-l1e Court We find th e consolidat-ed Petiti ons for Revi e w de vo id of merit. At t�h e outset, We must point out t�hat of the three issues raised by petitioner, onl y the first and third issues s hHll be discussed in this case. The second issue r<1ised by the petition er was never di sc ussed by the trial court in its Decision dated November 3, 2006 nor in its Ord er d<1ted July 12, 2007. In fact, a careful readin g of the Petitions for Review wo uld revea l that the Decision~ 20 !d . C.TA AC No . 46 (C ivil Case No. 02-104 955 ) rr 5t'i- 5~ : C'.T.i\ . i\C Nt' . 48 (C ivil Case No. 04-108907) pp . 114 - 11 6; and C: J'.A . AC No. 49 (C ivil Case No. 04-1 09703) pp. 87 - 89. 21 Rollos, C.T.A. AC No. 46 (Civil Case No. 02-104955) p. 9; C.TA. AC No. 48 (C ivil Case No . 04-108907) p. 9; and C.T.A. AC No. 49 (Civ il Case No. 04-1 09703) p. 9.

CTA A.C Nos . 46, 48. & 49 Dec ision the Order referred to and quoted in th e said Peti tions are the Decision dated October 3, 2006 and the Order dated December 12, 2006, rendered by Branch 33 of the Regional Trial Court of Manila, and not th e Decision dated November 3, 2006 nor the Order dated July 12, 2007 rendered by Branch 21 .22 As We see it then, there is no reason for Us to discuss Section 133 of the LGC in relation to Section 21 of the MRC as the assailed Dec ision dated November 3, 2006 and the Order dated Jul y 12,2007 never declared that " ta x on th e end-user amounts to a sales tax which is expressly prohibited by Section 133 of th e LGC." Double taxation exists We shall now proceed to discuss the issue on " double taxation." In the case of Commissioner of fnlernnl l\P7.'PI111 P v. Solidbnnk Corporation,23 the Supreme Court defined " double taxation" as : "Double taxation means taxing the same pro perty twice when it should be taxed only once; that is, 'xxx ta xin p; the sa m e p erson twice by the same j11risdiction for the same thin g.' Tt is obnox io us when the taxpayer is ta xed twice, when it should be but once. O th erwis e d escribed as 'direct duplica te taxation,' the two taxes mu st be imposed on the same subject matter, for the same purpose, by th e sam e tet xin g auth o ri ty, within the same jurisd iction, during the smne ta xing period ; a nd they must be of the same kind or character." (Citntions omitted) In the case at bar, the two tax provision" co ncerned are Sections 14 and 21 of the MRC, to wit: "Section 14. Tax 011 Manu[nrt11rr>rs. Asse111hlers ond other Processors - There is hereby imposed a gradunted ta x on manufacturers, assembl ers, re packers, processors, brevvers, d istill ers, rectifiers and compounders of liquors, distilled spirits, and wines or manufacturers of any article of commerce of whatever kind or na hue, in accordance with th e following schedule xxx" "Section 21 . Tox on Business S11hiPc t to 11w Fxrise, Vnlue-Added or ~ / / Percentage Taxes Under the NIRC - On any of the foll owing businesses / 22 Jd , C.T.A 1\ C No. 46 (Civil Case No. 02-1 04955) rr . 9 - 12: <" I .A .-\C No. 11R (C ivi l Case No. 04- 108907) pp. 9- I 2; and C.T.A AC No. 49 (Civil Case No. 04-1 09703) pp. 9 - 12. 23 G.R. No. 1481 9 1, 416 SCRA 436, November 25 ,2003.

CTA A .C. Nos . 46, 48 , & 49 Deci sion Page 10nf 18 and articles of commerce subject to the excise, value-added or p ercenta ge taxes und er the National Internal Revenu e Cod e h ereinafter the NIRC, as amended, a tax of fifty perce nt (50%) of on e p ercent (1 %) per annum on the gross sales or receipts of t�he p receding calendar year is h ereby imposed: A) On persons who sell goods and servi ces in the course of h�ade or business; and those who impo rt goods w he th er for business or oth erwise, as provided for in Sections 100 to ] m o f th e NIRC as administered and determined by the Burea u of Internal Revenue pursuant to the p ertinent provisions of th e said cod e. XXX XXX XXX " Petitioner insists that there is no douhl e taxa tion as Sections 14 and 21 of the MRC perta in to different tax objects. Accordin g to petitioner, Section 14 is a tax on the business of the respondent as a m anufacturer, w hile Section 21 is a tax upon the end-users. We do not agree. This a rg ument ha s already been squn rely resolved in the case of Swedish Match Philippines, Inc. v. The Tren surer of r-lw City of Mn niln.24 In that case, We ruled that double taxation ex ists. The r ertin ent portions of Our discussion therein are as fo llows: "On the issue of d ouble ta xation, this Co urt rules in favor of the petitioner. Th e power of the Citv of Manil a to tax is ba sed on Sections 151 an d 143 of th e Local Government Cod e, to w it: 'SEC 151. Scope of Taxing Powers. - Except as othe rwise provided in this Cod e, tlw Citv mav levy the taxes, fees, and charges whi ch the province or munic ipality may impose: xxx' 'SEC 143. Tax on Business . - The municipality may impose taxes on the following businesses: (a) On manufa cturers, asse mblers, re packe rs, processors, brewers, dis tillers, rectifiers, and co mpound ers of liquors, distilled spirits, and w ines or manufacturers of any article of I comm erce of whatever kind or nah1re, in accorda nce with the following schedule: 24 C.T.A. AC No . 15 (C ivil Case No . 01- 102074), Jul y 2 1,2006.

CTA A.C. Nos . 46,18'. & 49 Decis ion Page II of 18 XXX XXX XXX �� (h) On any business, not othetwise s pecified in the preceding paragraphs, which the sa nggunia n co ncern ed may deem proper to tax: Provided, Thnt 011 nny business subject to excise, value-added or percentage tnx un der the Na tional Internal Revenue Code, as amended, the mte n( lax shall 110/ exceed two percent (2% ) of gross sales or receipts of the preceding cnle11rlar yenr. The sanggunian conce rned may presc ribe a schedule of gra duated tax rates but in case to exceed th e rates prescribed he rein .' It is clear from subsection (h) that if a business is already taxed under sub-sections (a) .to (g), such a bu sin ess s hould no longer be taxed under subsection (h) thereof. In othor words, the afore-quoted subsection (h) gives the sanggunian concerned the power to tax businesses not o therwise enume rated in th e Local Government Code. Based on the a bove provisions of the 1~oca l Governm ent Code, the City of Manila en acted the Manila Revenue Cod e, Ordinance No. 7794. In this instant case, the involved provisions are: 'Section 14. Tax 0 11 Mnnrt(n rhtrcrs, Asse rn/J/ers nnd other Processors - The re is hereby imposed p;raduated tax on ma nufac turers, assem biers, repackers, procPssors, brewers, dis tillers, rectifiers and co rn pou nci ers of liq 11 ors. distilled spirits, and w in es or ma11ujacturers of n11y articll' of commerce of whatever kind or nature, in accorcia nce with the following sc hedul e: xxx. Section 21. Tax on Business Sul1;er t Ia Excise, Value- 1\r/rled or Percentage Taxes Under tlw NII~C - On any of the following businesses and articl es of co mm erce subject to excise, value-added or percenta ge t<1 xes under the National Internal Reve nue Code hereinafter refe rred to as NIRC, as amen ded, a tax of fifty (50 %) of onf' Cl %) perce nt per anm tm on th e gross sa les or receipts of t�he prered in g ca lendar year is hereby imposed: A) On persons who sell good s and services in the course of trade or busin ess; and th ose who import goods wh eth er for bu sine'is or othe rwise, as provided for in Sections 100 to 1en of th e NTRC as administered and determin ed by th e Bureau of Internal f{ evenu e pursuant In th e pe rtin ent provisions of th e said cociP. Indubitably, Section 14 of the Manila Revenue Cod e is based on Section 143 (a) o f the Local Government Code, w hil e Section 21 in turn is a variation of Section 143(h), also of th e Loca l Government Code. It is to be n o ted that under Sectio n 143(h) of the Local Government Code, the business tax that may be imposed on 'anv husiness', com es with the proviso 'not othenvise specified in tire preceding pn r~g rnphs.' This co uld only mean that the municipality, or city, shall only rmpose the tax in eithey

CTA A.C. Nos . 46 . 4R, & 49 Dec is ion one of th e paragraphs but n.ot both. When the City of Manila imposed both taxes through Sections 14 and 21 of the Manila Revenue Code, the same definitely contradicts the express mandate of Section 143(h) of the Local Government Code. Section 21 of the MRC reads 'on nny of 11/(' following businesses and articles of commerce subject to excise, mlue-added or percentage taxes under the Na tional Tnternal Revenue Code hereinafter rejerrerl to as NIRC, as amended, a ta x of xxx is h ereby imposed: On persons who sell goods and services in the course of trade or business; and !:hose w ho import goods whether for business or otherwise xxx.' Thus, it is evid ent fr om the foregoing that Section 21 does not impose indirect taxes on businesses but imposes tax on businesses and articles of commerce which is subject to excise, VAT or percentage tax under the National Internal Revenue Code. Jn addition, an examination o f Section 14:1(h) of the Local Government Code shows that th e phrase 'o n any lm siness subject to excise, mlue-arlrlerl or percen tage tax under tire Nntinnnl lnfemnl Revenue Code' m e rely qualifies or limits the rate of ta x to be imposed on businesses already subj ec t to excise, value-add ed o r pc> rcenta ge tax under the National Internal Revenue Code and does n o t authorize Local Governments to impose such taxes. H en ce, res pondent's contention is without m e rit. Moreover, the City Treasurer, in holding petitioner also liabl e under Section 21 of the Manila Revenue Code, (when it is already paying taxes under Section 14 of the same Code), violated the mandate of Section 143(h) of the Local Government Code, that forms the ba sis of Section 21, which clearly disallows the imposition of additional taxes on businesses already taxed under its other subsections. Section 131 (o) of the Local Gove rnment Cod e and Article 220(o), Part One, Rule xxx Local Government Taxation, Implementing Rules & Regulations, defin e a 'manufacturer' in th e foll owin g manner: A mnnu(ncf11rer includ es every perso n w ho, by physical or chemical process, alters th e ex terior tcxh1re or form or inner substance of any raw material or manufac turerl or partially mi1nufa clured product in such mamw r as to prepare it for s pecial use or uses to whi ch it co uld not hi1vP bePn put in its original condition, or who by any such process, alters the qui1lily of any such raw material or manufi1ctured or partially manufactured produ cts so as to red11 cf' it t�o mi1 rketable shape or prepare it for any of th e use of inciu<;try, or w ho by any such process, co mbines any such raw mi1terial or nlimufa ctured or partially manufactured products with othPr materials or products of the same or of different kinds and in such manner th at the finished products of such process or manufacture can be put to a special use or uses to whi ch such raw material or manufactured or partially manufa chn erl in their original condition could not have been put, and w ho in addition, alters such raw material or manufa ctured or putii1lly manufactured products, or combines th e same l:o produce such finished products for the purpose of th eir sale or dislTibution to others and not for his own use or consumption.

CTA A.C. Nos. 46 , 48. & 49 Decisio n Pogc 13o f1 8 Pursu ant to the above definition, a m anufac turer is any person th a t ch an ges or m od ifies any product to take the for m of an other, either to prepare it for sp ecial u ses or to tran s form it to som e m arke table shape, fo r tlw purpose of selling o r dish�ibu ting th e m to o th ers for a fee. In this case, petitioner is being taxed under Section 14 as a manufacturer of goods, and additionally taxed under Section 21(a) on its business of selling manufactured goods. This is a clear case of double taxation. Double taxa tion or direct duplica te taxation in its ' obnoxious' fo rm m ean s, the taxing twice of the sa me taxing auth ori ty, within the sam e taxing jurisdiction or dis h�ict, for the sam e purpose and the same period, of the same proper ty in th e sam e territory. All these elem ents ex ist in this case. Respondent n on etheless argu es th at no doub le taxa tion exists becau se Section 14 is a tax on the manufacturers, assemblers, and o ther processors w hile Section 21 is a tax on the end-users or on th e persons payin g for th e goods or services and no t on the bu siness itself and the sell er of th e goods or services is a m ere w ithh o lding agent of the City of Manila. Thi s argum ent is unten able. Sec ti on 21 cl e<'~ rl y rea d s that a tax is imposed on the business subject to excise, va lu e-added or p ercentage tax . Simp ly put, Section 21 is a business tax o n person s w h o sell goods a nd services in their trade or bu siness, and those w ho import goods w h ether fo r bu siness or oth erwise. To adopt the vi ew of the resp ondent tha t the en d-u sers arc the persons subject to ta x un der Secti on 21, w ould m ean th at th e activity th at is being taxed is tlw pu rc hase of good s or the 'p urchasing power' of the buyer, but the sa m e is not a bu siness activity. While there is some truth to respondent's cJaim that double taxation is not prohibited, it becomes 'obnoxiou s' w here a taxpayer is bein g ta xed twice for the benefit of th e sam e governmental entity, for th e sam e purpose. Thus, the Court cannot countenance this form of doubl e ta xation." (Ci tations omillerl) (E 111phnsis S11J7f'licrl) Also, in the recent case of The Treasurer of tllf City of Ma nila v . Unilever PlnHppinPs, /nc. ,2S We reiterated O ur view th a t businesses taxed under Sections 14, 18, and 24 of th e MRC can n o lon ger be taxed unde r Section 21 thereof as the 7 imposition of th e business taxes under Secti ons 14 a nd 21 of the MRC, as amend ed, cons titutes doubl e ta xation. 25 C.TA. AC No. 2R (C ivil Case No. 06- 114255), November 2R. 1007. citinf! UnileFer ?hils, vs. The Treasurer of the City of Manila. C. T.A. AC No. 25. Jun e 18. 2007: Swedish ,\ f,,tr-/1 Phils.. Inc. vs. The Treasurer of the City of Manila. C. /'.A . AC No. 15. July 21. 2006: International Container I erminal Services vs. The City of Man ila, et a/. , C. T.A . AC No. II. May 17. 2006: Zm�con Development Corp. vs. Th e City Treasurer ofthe City ofMan ila. C.T.A. AC NO. 24, May 16. 2007; Liberty M Toledo. in her capacity as the Treasurer of the City of Man ila vs. Unilever Phils., Inc.. C. T.A . AC No. 21, May 10. 2007.

CTA A.C. Nos . 4fi. ~ R , & 49 Dec is ion Page 14ofl 8 Once more, We stand by Our ruling. Double taxation exists as the City of Manila imposes taxes on the manufacturing business of the respondent under both Sec tions 14 and 21 of the � MRC. Section 14 of the MRC imposes a tax on th e manufacturers based on the gross sales for the preceding year in accordance wi th the schedule stated therein, und er the authority of Section 143 (a) of th e LGC. While Section 21 of the MRC provides for the imposition of a te1x of fifty pe rcent (50 %) of one (1 %) per rmnum on th e gross sales or receipts on businesses a nd articles of commerce subject to excise, value added or percentage taxes und er the NJRC, under the authority of Secti on 143 (h) of the LGC. However, consid erin g that respondent is alread y taxed under Section 14 of the MRC bnsed o n Section 143 (a) of the LGC, it ca n no lon ger be taxed und er Secti0n 21 0f th e sa m e Code, as Section 143 (h) of the LGC, upon which Sec tion 21 is based, all ows the imposition of business ta x on ly on businesses not otherwise specifi ed in the preceding paragraphs thereof. No doubt the clear tenor of r <'t ra graph (h), Section 143 of the LGC, is t0 prohibit double taxation of bu s in esses ta xed under paragraphs (a) to (g) thereo f. 26 For this reason, We are in accord w ith th e ru lin g of the trial court that Section 21 of the MRC amounts to double tax0tion . I 26 Un ilever Philippines, Inc. v. The Treasurer of th e Ci ty of Manila. C.T.A. AC No. 25 (Civil Case No . 03-107304), June I8, 2007.

CTA II .C. Nos . 46, 48, & 49 Decision Page 15of l 8 Sections 187 and 195 of the Local Government Code do not apply Petitioner contends that the Petitions for Refund should have been dismissed because respondent failed to compl y w ith Sec tions 187 and 195 of the ' LGC, which provide that: "Sec. 187. Procedure for Appmml rmrf Effectivity of Tax Ordinances and Revenue Measures; Mandatory Public Hearing. - xxx : Provided further, That an y qu estion on the constitutionality o r lega lity of tax ordinances or revenu e m easures may be raised on appea l within thirty (30) days from the effectivity thereof to the Secretary of Justi ce w ho shall render a decision within sixty (60) days from the date of receipt 0f th e appeal: xxx: Provided, fin ally, That within thirty (30) da ys after recP ipt 0f t�he d Pcision or the lapse of the sixty-day p eriod without the- Secretary of Ju stice, acting upon the appeal, th e aggrieved party may fil e the appropriate proceedings with a co urt of competent jurisdiction." "Sec. 195. Protes t of Assessment. - When the local h�easurer or his duly authorized representative finds thi'lt the correct taxes, fees, or ch arges ha ve not been paid, he shall issu P a no ti ce of assessm ent stating the nature of th e tax, fee, or charge, th e am0unt of d eficiency, the surcharges, interes ts and p enalties. Within sixty (60) cia vs from the receipt of the notice of assessm ent, th e taxpa yer may fil e a writ ten protes t with the local b�easurer contestin g the assessment; otherwisf', the assessment shall become bnal and executory. Th e local b�easurer shall decide the pro tes t within sixty (60) da ys from the time of its fili.n g. If th e locC! l !Teasurer finds th e protest to be wholly or partly m eritorious, h e s hall issnP a no ti ce ca ncelling wholly or partially the assessment. H owever, -if th e loca l treasurer finds the assess m ent to be wholly or partly correc t, h e s ha ll d en y the protest wholly o r p artly with notice to the taxpaye r. The ta xpave r shall have thirty (30) days from the receipt of the denial of the pro tes l or fr om the lapse of the sixty-da y (60) p eriod prescribed herein ,,vith in w hich to appeal with the cou rt of co mpe tent jurisdicti on, o th erwi~e th e assessment becomes conclus ive and unappealable." Pe titioner is of the view that smce respond ent failed to appeal the revenue measure within 30 da ys from its enr1 ctm ent, respondent may no longer file the Petitions for Refund . Again, We do not subscribe to this argument. An appeal to the Secretary of Justice pursuant to Section 187 of the LGC is not necessary where there is no question on the constitutionality or legality of tax ordinances or revenu~

CTA A.C. Nos. 46, 48 . & 49 Deci s ion measures.27 It is well to note that respondent is not questioning the validity or constitutionality of Section 21 of the MRC. Instead , respondent is asking for a refund of business taxes erroneously assessed and collected under Section 21 of the MRC on the ground that this imposition constitutes double taxation. Thus, Section 187 does not apply in this case. Besides, the issue of the constitutionality of Tax Ordinance Nos. 7988 and ,� 8011 has already been resolved in the case of Cocn-Coln Bottlers Philippines, Inc. v. City of Mnniln, Liberty Toledo, et. nl.,28 where the Supreme Court declared the ordinances null and void on the ground of failure to comply with the publication requirements. Anent the argument of petitioner that respondent is estopped from claiming refund because it failed to protest or a ppea 1th e assessment as required in Section 195 of the LGC, We find the same untenabl e. As aptly pointed out by respondent, citin g Alcnn Packaging Starpack Corporation (jornierly Stnrpnck Philippines Corpornfion ) 11. ThP Trerzsurer of the City of Manilrz, 29 Section 195 of the LGC pertains to protests on the e1ssessment/ s issued by the local treasurer against a taxpayer who hCl s been found to have not paid its correct taxes, fees, or charges. Such is not the situ a tion in the instant case. Atty. Danilo L. Cruz is authorized to file the PetitioJ1uo_r_Re{und Finally, petitioner avers that respondent fail ed to state the authority of Atty. Danilo L. Cruz to file the Petitions for Refund . Petitioner alleges that? 27 Zarcon Developm ent Corporation v. The City Treasurer of Manil a. C.T.i\ . AC No . 24, May 16, 2007 ; City of Manila. ct. a!., v. Columbi a Pictures Industries. Inc., C. T.A. AC Nn. 2'J . August 30. 2007: and The Treasurer of the City of Manil a v. Unilever Philippin es, Inc ., C. T.A. AC No. 28. November 2H . 2007 . 28 Supra, note 14. 29 C.T.A. AC No. 17 (Civil Case No. 01-1 02097), September II , 2006.

CTA A.C. Nos. 46, 48, & 49 Decision authority was shown to prove that Atty. Cruz was authorized to stgn the Verification and Certification of Non-Forum Shopping. This deserves scant consideration as the Secretary's Certificate attached to the Petition for Refund expressly states that /\tty . Danilo L. Cruz is duly auth orized to sign the Verification and Certification for and in behalf of the respondent. 30 All told, We find no reason to reverse the rulin g of the trial court. WHEREFORE, the consolidated Petitions for Review are hereby DENIED for l<1ck of merit. The Decision dated Nov ember 3, 2006 and Order dated July 12, 2007 rendered in Civil Case Nos . 02-104955, 04-108907, and 04- 109703 are hereby AFFIRMED. Accordin gly, petitioner is hereby ORDERED TO REFUND or ISSUE TAX CREDTTS to respondent, Unilever Philippines, Inc. in the amounts of P6,403,030.62, P11,350,041 .07, and P1l,350,041 .fl7 representing erroneously paid local business taxes for the fourth quarter of the taxe1ble year 2000, first quarter of the taxable year 2002, and second qwute r of the taxable year 2002, respectiv ely . SO ORDERED. 30 Rollo, C.T.A. Case No. 49 (Civil Case No. 04-1 09703), p. 53 .

CTA A.C. Nos . 46, 4R , & 49 Deci s io n WE CONCUR: ~~ - c~ ERN ESTO D. ACOSTA Presiding Justice CAESAR A. CASANOVA Associate Justice CERTIFIC A TI ON Pursuant to Section 13, Article VJTT nf th e Con stitution, it is hereby certified that the conclusions in the above Decision were reached after due consultation with the members of the Division of the Court of Tax Appeals before the case was assigned to the writer of th e opinion of the Division. I' L---v. l~ ERNESTO D. ACOSTA Pres iding Jus tice Chairman, Firs t Division Court ofTax Appeals Library