ROYAL CARGO INC. v. CITY TREASURER OF PARA?AQUE

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY SPECIAL SECOND DIVISION ROYAL CARGO INC., CTA AC No. 270 Petitioner, Members: -versus- BACORRO-VILLENA, Acting Chairperson, and CUI-DAVID, JJ. CITY TREASURER OF Promulgated: PARANAQUE CITY, FEB 2 7 2024 Respondent. ,_ - - - - - - - - - - - - X '/I - - 9: ~.A . X- - - - - - - - - - - - - - - - - - - - - - - - - RESOLUTIO CUI-DAVID, J.: This resolves respondent's Motion for Reconsideration (to the Decision dated December 13, 2023) filed via courier and received by the Court on January 9, 2024, with petitioner's Comment/ Opposition filed on January 29, 2024. Respondent prays that the Court reverse and set aside its Decision dated December 13, 2023 (assailed Decision) and issue a new one dismissing the case on the ground of prescription. The fallo of the assailed Decision reads: WHEREFORE, premises considered, the instant Petition for Review is GRANTED. Accordingly, the Orders dated May 27, 2022, and July 18, 2022, respectively, of the Regional Trial Court, Branch 258, Paranaque City, in Civil Case No. 2022-009, are REVERSED and SET ASIDE, and the case is REMANDED to the court a quo for the determination of the amount to be refunded to petitioner, if any. SO ORDERED. In his Motion for Reconsideration (Motion), respondent argues that the Court's reliance on the case of International

RESOLUTION CTA AC No. 2 70 Royal Cargo Inc. v. City Treasurer of Parafiaque City x---------------------------------------- ----------------- -----------x Container Terminal Services, Inc. v. City of Manila1 (ICTSI case) is misplaced because the first three (3) assessments therein were considered assessments as contemplated by Section 195 of the Local Government Code (LGC) and ICTSI was able to comply with the periods provided by Section 195 of the LGC; whereas in this case, petitioner disregarded the periods under Section 195 of the LGC. Respondent also insists that the subject Statement of Account (SOA) in this case is an assessment since it is a demand for payment of the local business taxes (LBT) within the prescribed period. Besides, Section 195 of the LGC does not provide any form on how to issue an assessment. Respondent concludes that the court a quo correctly ruled that prescription had already set in due to petitioner's non- compliance with Section 195 of the LGC. On the other hand, petitioner contends that the Court, in citing the ICTSI case, made no mention of any similarity of the circumstances involved except for the similarity of the contents of the SOA, which the Supreme Court did not consider as "notice of assessment" under Section 195 of the LGC. Petitioner explains that the fact that the first three (3) assessments were declared in the ICTSI case as proper notices of assessment is irrelevant to this case. Petitioner further argues that it correctly and timely availed of the remedy under Section 196 of the LGC, which does not require a prior notice of assessment for a claim for refund to prosper; thus, its claim for refund has not yet prescribed. The Motion fails to impress. After a judicious review of respondent's Motion, the Court finds that respondent's arguments have already been considered and passed upon in the assailed Decision. To reiterate, in the ICTSI case, the Supreme Court explained that what determines the appropriate remedy, whether Section 195 or 196 of the LGC, is the local government's basis for the collection of the tax: What determines the appropriate remedy is the local government's basis for the collection of the tax. It is explicitly stated in Section 195 that it is a remedy against a 1 G.R. No. 185622, October 17,20 18.

RESOLUTION CTA AC No. 270 Royal Cargo Inc. v. City Treasurer of Paraiiaque City X------------------------ --------------------------------- -----------X notice of assessment issued by the local treasurer, upon a finding that the correct taxes, fees, or charges have not been paid. The notice of assessment must state "the nature of the tax, fee, or charge, the amount of deficiency, the surcharges, interests and penalties." No such precondition is necessary for a claim for refund pursuant to Section 196. [Emphasis supplied] To recall, petitioner seeks a refund of the excess LBT paid amounting to P12,334,525.00, that respondent had collected by virtue of a SOA issued by the Business Permits & Licensing Office (BPLO) of the City of Paraiiaque as a condition for the renewal of petitioner's business permit for 2020. As found by the Court, "the SOA merely tabulated the amount and nature of the tax and fees assessed but did not contain the amount of deficiency tax, surcharges, interests, and penalties due from petitioner."2 Following the ICTSI case, the SOA cannot be considered the "notice of assessment" required under Section 195 of the LGC. Considering that respondent issued no notice of assessment for deficiency taxes, petitioner correctly availed of the remedy under Section 196 of the LGC . Further, petitioner filed its administrative and judicial claims within the two-year prescriptive period as Section 196 of the LGC provided. WHEREFORE, respondent's Motion for Reconsideration (to the Decision dated December 13, 2023) is DENIED for lack of merit. SO ORDERED. Jound4w~ LANEE S. CUI-DAVID Associate Justice !CONCUR: ~ JEAN MARI"1~��~� LE\ NA ~i~e Justice 2 Dec ision dated December 13 , 2023 , p. 12.