ROYAL CARGO INC. v. CITY TREASURER OF PARANAQUE CITY

REPUBLIC OF THE PHILIPPINES

COURT OF TAX APPEALS QUEZON CITY

SPECIAL SECOND DIVISION

ROYAL CARGO,INC. Petitioner, CTA AC CASE NO.337 (Civil Case No. 2021-010)

Members:

-- versus - RINGPIS-LIBAN, PJ, Chairperson

MODESTO-SAN PEDRO, and FERRER-FLORES,JJ

PARANAQUE CITY, CITY TREASURER OF Respondent. Promulgated: SEP 3 0 2026 4'21 PM

RESOLUTION

MODESTO-SAN PEDRO, J.:

year ("CY") 2019 refundable, if any, in favor of petitioner. quo) dismissing petitioner's claim for refund before it and remanded the same to the court a quo for continuation of the proceedings, reception of evidence, petitioner's Comment/Opposition, filed on June 23, 2026, against this Court's Decision dated February 18, 2026 ("Assailed Decision), which reversed and set aside the order of the Regional Trial Court, Branch 257 ("RTC; court a and determination of the amount of local business tax ("LBT") for calendar (to the Decision dated February 18, 2026), filed on April 28, 2026, with For the Court's resolution is respondent's Motion for Reconsideration

assessment under Section 195 of the Local Government Code ("LGC) and notice of assessment. Further, the SOA for CY 2019 is considered a deficiency tax assessment for CY 2018 since it is based on CY 2018 gross receipts. that failure to reflect a "deficiency tax" does not negate the SOA's nature as a Respondent insists that a statement of account ("SOA") is a notice of

These arguments deserve scant consideration.

CTA AC CASE NO. 337 (Civil Case No. 2021-010) RESOLUTION Page 2 of 4

treated the SOAs covering the first to third quarters for CY 1999 as notices of of Manila,' ("ICTSP") respondent claims that the Supreme Court expressly onwards were not considered as a notice of assessment. assessment while only the SOAs for the fourth quarter of CY 1999 and In relying on International Container Terminal Services, Inc. vs. City

This analysis by respondent of the facts of ICTSI is misplaced.

settle was ICTSI's entitlement to refund for the succeeding quarters: categorical ruling by the Supreme Court that the SOAs for the first three quarters of CY 1999 were expressly treated as notices of assessment. Instead. the High Court merely acknowledged that there was no dispute on the refund claim for the first three quarters and clarified that the controversy it aimed to A careful reading of the full text of ICTSI reveals that there was no

controversy here pertains to petitioner's entitlement to a refund of the taxes paid subsequent to the third quarter of 1999, which was denied by the Court of Tax Appeals Second Division on the ground that petitioner failed to comply with the requirements of Section 195. (Italics supplied.) representing the additional taxes paid for the first three (3) quarters of 1999, as ordered by the Court of Tax Appeals Second Division in its May 17, 2006 Decision on the basis that there was direct double taxation. The Here, there is no dispute on the refund of P6,224,250.00

not an issue which the Supreme Court settled in ICTSI, contrary to thereon cannot be considered as a sound legal basis to support an argument. of a Supreme Court decision without making any categorical pronouncement respondent's claim. The mere mention of an undisputed fact in the ruling part Thus, the nature of the SOAs for the first three quarters of CY 1999 was

correctly pointed out by petitioner in its Comment/Opposition, was the nature of the SOA from the fourth quarter of CY 1999 and onwards, which the Supreme Court did not consider as notices of assessment required under Section 195 of the LGC: Instead, what was settled and categorically pronounced in ICTSI, as

due from petitioner. They cannot be considered the "notice of assessment" required under Section 195 of the Local Government Code. Municipal License Receipts; Mayor's Permit, Business Taxes, Fees & the renewal of petitioner's business permit in respondent City of Manila. While these receipts state the amount and nature of the tax assessed, they do not contain any amount of deficiency, surcharges, interests, and penalties Charges Receipts; and Official Receipts issued by the Office of the City Treasurer for local business taxes, which must be paid as prerequisites for The "assessments" from the fourth quarter of 1999 onwards were

G.R. No. 185622, October 17, 2018.

RESOLUTION CTA AC CASE NO. 337 (Civil Case No. 2021-010) Page 3 of 4

January 18, 2019 was an assessment for permits and licenses, which must be of Paranaque. It does not contain any amount of deficiency, surcharges, a "notice of assessment" required under Section 195 of the LGC. paid as prerequisites for the renewal of petitioner's business permit in the City interests, and penalties due from petitioner. Indeed, it cannot be considered as Similarly, in this case, the disputed SOA BIN 2004019139 dated

CY 2019 is a notice of assessment, upon which Section 195 of the LGC applies, respondent asserts that it is in essence a deficiency tax assessment as it pertains to LBT for CY 2018. Lastly, in an attempt to buttress its misled insistence that the SOA for

business tax on gross sales/receipts for the preceding calendar year. Paranaque,2 consistent with Section 166 of the LGC, provides that payment of business taxes accrues on the first day of January of each year. Relatively in determining the amount of business tax which accrues every January l of each year, Section 2H.02(e) of The Revenue Code of Paranaque, consistent with Section 143(e) of the LGC, provides that the City of Paranaque may impose taxes on contractors and other independent contractors a graduated This is utterly erroneous. Section 2J.02 of The Revenue Code of

It is not a deficiency tax assessment. It is merely a computation, in simple terms, for purposes of settling business tax for the current year as a requisite to continue doing business in the locality. merely serves as the basis to compute the business tax due for the current year. Accordingly, the gross sales/receipts for the preceding calendar year

is not an assessment for deficiency tax for CY 2018. It does not state that petitioner lacked LBT payment for CY 2018. Instead, the gross receipts for CY 2018 merely served as the basis to compute how much LBT is due for CY 2019. Thus, the SOA BIN 2004019139 dated January 18,2019 for CY 2019

(to the Decision dated February 18, 2026) is DENIED for lack of merit.. FOR THESE REASONS, respondent's Motion for Reconsideration

SO ORDERED.

MARIA ROWENAMODESTO-SAN PEDRO Associate Justice

Paranaque Ordinance No. 22-04 dated December 22, 2004 the local revenue code applicable at the time of petitioner's payment of LBT for CY 2019.

CTA AC CASE NO.337 (Civil Case No.2021-010) Page 4 of 4 RESOLUTION

WE CONCUR:

gtenr

MA.BELEN M.RINGPIS-LIBAN

Presiding Justice

M C 4 CORAZON G.FERRER-FLORES

Associate Justice /