MS. LIBERTY M. TOLEDO, In her capacity as the City Treasurer of Manila and THE CITY OF MANILA v. METRO MANILA SHOPPING MECCA CORP. AND WAREHOUSE DEVELOPMENT CORPORATION

'. e7>-\~ '\'3-i- (>..\)\' REPUBLIC OF THE PHILIPPINES ~ o\ �~{1>.{~ COURT OFTAX APPEALS CO\} ~\ QUEZON CITY FIRST DIVISION MS. LIBERTY M. TOLEDO, in her official capacity as the THE CITY TREASURER OF MANILA and the CITY OF MANILA, Petitioners, C.T.A. AC NO. 36 (Civil Case No. 04-108888) -versus- Members: METRO MANILA SHOPPING ACOSTA, Chairperson MECCA CORP. AND WAREHOUSE BAUTISTA, and DEVELOPMENT CORPORATION, CASANOVA, IJ Respondents. -~&J X-------------------------------------------------------------------------------------- -71-- -----~ -------------X DECISION BAUTISTA,[.: The Case Before Us is a P etition for Re view1 filed pursuant to Republic Ac t No. 9282, praying for the reversal of: 1 Rollo, pp. 16 - 145, w ith Annexes.

DECISION C.T.A. AC No. 36 1. the Decision2 dated January 12, 2007 rendered by Branch 47 of the Regional Trial Court of Manila ("Court a quo") in Civil Case No. 04-108888 entitled "Metro Manila Shopping Mecca Corp. and Warehouse Development Corporation vs. Ms. Liberty Toledo, in her ofjlcial capacity as the City Treasurer of Manila and the Ci ty of Manila" which declared the assessments in question null and void and ordered tl1e City of Manila and the City Treasurer to refund or iss ue tax credits to respondent, Meh�o Manila Shopping Mecca Corp., the amount of F8,205,792.14 and to respondent, Warehouse Development Corp., the amount of F113,600.00, representing erroneously paid local business taxes for the year 2002; and 2. the Order3 dated April 17, 2007 of the Court a quo which d enied h erein petitioners' Motion for Reconsideration. Antecedent Facts The facts of the case are as follows: Petitioner Liberty M. Toledo is the duly-appointed City Treasurer of Manila, empowered to perform the duties of said office including among others, the collection of all local taxes, fees and charges, and the power to d ecide, approve and grant refunds or tax credits of erroneously or excessively paid taxes.4 Petitioner City of Manila is a local government unit organized and existing under Republic Act No. 409.5 2 Rollo, pp. 60 - 66,Annex "A" of !he Peti ti on for Review. 3 ld, pp. 67 - 68, Annex "B" of the Petition fo r Review. 4 ld, p. 61 , Decision, Civil Case No. 04-108888 . 5 ld , p. 42, Petition for Review. :/ 1 3

DECISION C.T.A. AC No. 36 Respondents are domestic corporations organized under Philippine laws and doing business in the City of Manila.6 Respondent Metro Manila Shopping Mecca Corp. is primarily en gaged in the business of h�ading goods on wholesale or retail basis.? Respondent Warehouse Development Corporation is primarily engaged in the general business of retail and lessor of sh opping mall spaces.s For taxable year January to December 31, 2002, the Business Permits and Licenses Division of the City of Manila assessed respondents annual Local Business Taxes pursuant to Sec tion 219 of City Ordinance No. 7794, as amended by City Ordinance Nos. 7807, 7988 and 8011, otherwise known as the Revenue Code of the City of Manila ("RCM"), as follows :JO Metro Manila Sh opping Mecca Corp. ~,205,792.14 Warehouse Development Corp. T O TAL 11 3,600. 00 F8,319,392.14 Respondents paid the aforementioned assessments. Copies of the Official Receipts covering the payments were marked during the pre-trial as Exhibits "E" to "F" .n Petitioner City Treasurer also assessed respondents business taxes imposed on retailers, wholesalers, exporters and importers pursuant to Section 15,12 Section 1713 and such other applicable provisions of the RCM, 14 which were also paid_l5 6 Rollo, p. 61, Decision, Civil Case No . 04-1 08888 . 7 ld , p. 102, 2"d Amended Comp laint, Annex ''F'' of the Petition for Review. 8 !d., p. 103, 2"d Amended Complaint, Annex ''F'' of the Petition for Review. ; J 9 Tax on Business Subject to th e Excise Tax, Value-Added Tax or Percentage Taxes under the Nati onal Internal Revenue Code. 10 Rollo, pp. 61, 63 . 11 12 /d,p.63. Di stribut ors or Dealers . Tax on Wholesalers, 13 Tax on Retailers. 14 Rollo, p. 63 . 15 ld, p. 103. v14

DECISION C.T.A. AC No. 36 Page 4 of2 3 Believing that the assessments under Section 21 of the RCM are illegal exactions, respondents filed a Complaint16 on January 20, 2004 with the Court a quo for the refund of the total amount of ~8,319,392.14. Respondents filed an A m ended Complaint on February 5, 2004 and a second Amended Complaint on February 16, 2004. 17 The respondents filed their A nswer on March 24, 2004.18 On August 11, 2004, the case was referred to the Mediation Unit of the Office of the Clerk of Court, RTC Manila, for mediation. On November 30, 2004, the case was returned to the Court a quo for trial on the m erits.19 After the herein respondents m ed their Formal Offer of Evidence and the admission thereof by the Court, the parties were given a period of 30 days from the date of the resolution of the Formal Offerof Evidence by the respondents to file their respective Memoranda. The respondents filed their Memorandum on July 14, 2006 and their Supplemental Memorandum on August 24, 2006. The respondents did not file a Memorandum. Thereafter, the case was submitted for decision.20 The Ruling of the Court A Quo On January 12, 2007, Presiding Judge Augusto T. Gutierrez rendered a Decision in favor of respondents, ruling that: " It is important to note tha t after this case was filed, the Supreme Court came out with its decision in the case enti tled Coca-Cola Bottlers Philippines, Inc. vs. City of Manila, Liberty M. Toledo- City Treasurer and Joseph Santiago- Chief, Licensing Division (G.R. No. 1562252, June 27, 2006) declaring Ordinance Nos. 7988 and 8011 (which are also the ordinances pursu ant to which the taxes 16 "With Prayer to Iss ue TRO and Writ of Preliminary Injunction." 17 Rollo, pp. 78-114. 18 Jd , pp. 115-129. 19 Jd, p. 60. 20 ld , p. 65 . uJ.5

DECISION C.T.A. AC No. 36 Page 5 of23 in this present case are imposed/ assessed) null and void. Following the ruling in the Coca-Cola case, this Court has no alternative but to declare the assessments made in the presen t case as null anJ void. WHEREFORE, premises considered, judgment is rendered ordering the defendants to refund to the plaintiffs as follo ws: Metro Manila Shopping Mecca Corp. P8,205,792.14 Warehouse Development Corp . 11 3,600.00 TOTAL ~8,319,392.14 OR ALTERNATIVELY, to iss.ue tax credits to the said plaintiffs for the said amounts. SO ORDERED."2J Aggrieved, petitioners filed a Motion for Reconsideration on February 20, 2007, which was denied by the Co urt a quo in the Order dated April17, 2007.22 The Issues Hence, the present reco urse with petitioners ascribing to the Court a quo the following errors: "i. The Honorable Co urt a quo gravely erred in entertaining the case despite the fact tha t it has n o jurisdiction over the case. ii. The Honorable Co urt a quo gravely erred in its failure to dismiss the case des pite fai lure of plaintiffs23 to observe a condition sine qua non befo re resort to court may be had. iii. The Honorable Co urt a quo gravely erred in its failure to dismiss the case for p laintiffs' failure to state cause of action. iv . The Honorable Co urt a quo gravely erred in its failure to dismiss the case despite v iolation by plainliffs of Section 4, Rule 8 of the 1997 Rules of Court. v. The Honorable Court a quo gravely erred in its failure to dismiss the case des pite the fact that the claim of plaintiffs is barred by statute of limitalions. 21 /d.,p. 66. 22 Rollo, pp. 67 - 68. 23 Herein respondents. vl G

DECISION C.T.A AC No. 36 Page 6 of23 vi. The Honorable Court a quo gravely erred in applying the case of Coca-cola Bottlers Phjlippines, Inc. vs. City of Manila, Liberty M. Toledo, City Treas urer, and Joseph Santiago, Chief, Licensing Division of Manila, docketed as G.R. No. 156252, June 27, 2006." With the filing of the p etitioners' Memorandum on February 1, 2008 and respondents' Memorandum on February 11, 2008, this case was d eem ed submitted for decision in the Court's Resolution promulgated on March 6, 2008. The Ruling of the Court The Petition for Review is devoid of merit. First Assigned Error The Honorable Court a quo gravely erred in entertaining the case despite tlze fact that it has no jurisdiction over the case. Second Assigned Error The Honorable Court a quo g ravely erred in its failure to dismiss the cnse despite failure of respondents to observe a condition sine qua non before resort to court may be had. Petitioners argue that the formulation by respondents of their cause of action renders the regular courts such as the Court a quo as having no jurisdiction to hear and decide the case. The prohibitive and oppressive determination of a measure pertains to the Secretary of Jus tice under Section 187 of the Local Gov enunent Code ("LGC"), which requires that any revenue measure may be raised on appeal to the Secretary of Justice within thirty (30) days from its effectivity. Respondents failed to appeal the revenue measure within 30 days from its enachnent. They are thus barred to file an action before the Court a quo on the said ground, Section 187 being a condition sine qua non before resort to a court of competent jurisdiction may be

DEC ISION C.T.A. AC No. 36 had. Hence, it is grave error on the part of the Court a quo to have d ecided the sam e in favor of respondents. Respondents counter-argue tha t Sec tion 187 of the LGC is n ot applicable in this case considering tha t this is a claim for refw1d of taxes paid under Section 21 of the RCM, as amended. Resp ondents m erely claimed that the imposition of taxes under said Section 21, in a ddition to taxes under Sections 15 and 17 of th e RCM (a) violates the City' s taxing p owers under the LGC; and (b) con stilutes double taxation. Petitioners' arguments are unten able. Section 187 of the LGC read s: "Sec. 187. Proce dure fo r A pproval and Effectivi ty of Tax O rdin an ces and Revenue Measures; Manda tory Publi c Hea rin g. - . . . : Provided fur ther, That any ques tio n o n the con s titutionali ty or legality of tax ord inan ces or revenue m easures m ay be raised on a ppeal within thirty (30) days from th e effectivity thereof to the Secretary of Jus tice w ho shall render a decision wi thin sixty (60) d ays from the da te of receipt of the appeal: ... : Provided, finally, Tha t within thirty (30) d ays a fler rece ipt of the decision or the la pse of the sixty-day period without the Secre ta ry of Ju s tice, ac ting upon the a ppeal, U1e aggrieved party m ay fil e the a pp ropria te proceedings w ith a court of compe tent jurisdiction ." We have consis tently ruled that an appeal to the Secre tary of Jus tice pursuant to Section 187 of the LGC is no t n ecessary w h ere there is n o ques tion on the constitutionality or legality of tax ordinances or revenue m easures.24 Th e Complaint and Amended Complaints filed by h erein respondents with the Court a quo w ere for the "refund or recovery of illegally and / or erroneously-collected local business tax, prohibition with prayer to issue TRO and Writ of Preliminary Injunction."25 24 Zarcon Development Corporatio n v. T he City Treasurer of Manila, C.T.A. AC No. 24, May 16, 2007; City of Manila, Et.Al., v. Colum bia Pictures Industries, Inc., C.T.A. AC No. 29, August 30, 2007; and The Treasurer of the City of Manila v. Unil ever Ph ili ppi nes, Inc. , C.T.A . AC No. 28 , Nove mber 28, 2007. 25 Rollo, pp. 78 - 114, Annexes �'D", " E" and "F", respectively, of the Peti tion for Rev iew. v18

DEC ISION C.T.A. AC No. 36 It is doch�inal in constitutional law that constitutional questions will not be entertained by courts unless they are "sp ecifically raised, insisted upon, and adequately argued ."26 It is well to note tha t Tax Ordinance Nos. 7988 and 8011, which introduced amendments to the RCM, h ave been declared null an d void by the Supreme Court in Coca-Cola Bo ttlers Philippines, Inc . vs. City of Manila, Liberty M. Toledo - City Treasurer and joseph Santiago - Chief Licensing Division27 on the ground of failure to comply with the publication requirem ents. 28 Third Assigned Error The Honorable Court a quo gravely erred in its fai lure to dis miss the case for plaintiffs' failure to state cause of action. Petitioners also contend that since there are two different plain tiffs (herein respondents), then there are separa te cau ses of action w hich m aterially affec t the jurisdiction of the Cou r t a quo. Resp ondents therefore, violated the fund amentals on joinder of causes of actions. Respondents on the other hand, point out that the p arties in this case stipulated that respondents are corpora tion s w hich are all doing business in the City of Manila. The factual findings of the Court a quo and the stipula tions of the par ties confirmed that the cau se of action of the resp ondents all arose from the sa me assessment made by p eti tion ers of business taxes for the p eriod January to December 2002. Even assuming tha t p etition ers' vague assertions m ay have som e semblance of 26 City of Baguio et. al. v. l-I on. Pio R. Marcos et. al. , L-26100, February 28 , 1969, 27 SCRA 342. 27 G.R. No. 156252, June 27, 2006, 493 SCRA 279. 28 Liberty M. Toledo, in her capacity as The Treasurer of the City of Manila v. Unilever Phili ppines, Inc., C.T.A. AC No. 2 1, May 10, 2007; City of Manila, et. a!. , v. Columbia Pictures Ind ustri es, Inc., C.T.A. AC No. 29, August 30, 2007.

DECISION C.T.A. AC No. 36 Page 9 of23 merit, Section 6, Rule 2 of the 1997 Rules of Court is explicit that misjoinder of causes of action is not a ground for disnlissal of ac tion. We agree with respondents. Section 5 of Rule 2 and Section 6 of Rule 3 of the 1997 Rules of Court, read : "Section 5. Jo inde r of ca uses of action. - A party may in one pleading assert, in the alte rna tive or otherwise, as many ca uses of action as he may have against an opposing party, subjec t to the following conditions: (a) The party joining the ca uses of action shall comply with the rules on joinder of pa rties; ... " "Section 6. Perm issive joinder of parties. - All persons in whom or against whom any right lo relief in res pec t to or arising out of �the same transaction or series of transactions is alleged to exist w h ether jointly, severally, or in the alternative, m ay, excep t as o therw ise provided in these Rules, join as plaintiffs or be joined as defendants in on e complaint, where any qu estion of law or fact common to all such plaintiffs or to all such defendants ma y arise in the action; but the co urt may make s uch orders as may be just to prevent any plaintiff or d efendant from being e mbarrassed or put to expense in connection with any proceedings in which h e may h ave no interes t. " The foregoing procedural rules are founded on practicality and convenience. They are meant to discourage duplicity and multiplicity of suits.29 Permissive joinder of p arties requires tha t: (a) the right to relief arises out of the same transaction or series of transac tions; (b) there is a question of law or fact common to all the plaintiffs or d efendants; and (c) su ch joinder is not otherwise proscribed by the provisions of the Rules on jurisdiction and venue.3o In this case, there are a series of h�ansactions common to both respondents, which are, petitioners' assessm ents pursuant to Section 21 of the RCM iil addition to Sections 15 and 17 of the same Cod e. There is also a conunon question of law, that is, 29 Lafarge Cement Philippines, Inc., (former ly Lafarge Philippines, Inc. ), Luzon Continental Land Corporation, Continental Operating Corporation and Philip Roscberg v. Continental Cement Corporation , Grego ry T. Lim and Anthony A. Mariano, G.R. No. 155 173 , November 23, 2004, 443 SC RA 543. 30 Pantranco North Express, Inc., and Alexander Buncan v. Standard Insurance Company, Inc. , and Martina Gicale, G.R. No. 140746, March 16,2005 , 453 SCRA 488. v20

DEC ISION C.T.A. AC No. 36 whether there is double taxa tion. Thus, i�espondents have the sam e cau se of action against petitioners. Moreover, assuming arguendo that there is a misjoinder of causes of action, the same is not a ground for dismissal of an ac tion as set out in Section 6, Rule 2 of the 1997 Rules of Court: "Section 6. Misjoin der of Causes of Ac tion. - Misjoinder of ca uses of action is not a gro und fo r d ismissal of an actio n. A m isjoined cause of action may, on mo tion of a pa rty or on the initia tive of the co urt, be severed and proceeded w ith separa tely ." Fourth Assigned Error The Honorable Court a quo gravely erred in its fa ilure to dis miss the cnse despite violation by plrzi ntiffs of Section 4, Rule 8 of the 1997 Rules of Court. Petitioners posit that due to respondents' failure to state the au th ority of Mr. Rex Enrico Cruz III, who certified and verified the Am ended Complaints a t bar, to institute the subject action, the p resent ac tion sh ould be dismissed. Also, the said Amended Complaints failed to sh ow the fac ts of the cap acity of both of the respondents and Mr. Cruz in viola tion of Sec tion 4, Rule 8 of the 1997 Rules of Court. Respondents irtsist tha t Mr. Cruz w as duly authorized by resp ondents to file the judicial claim for refun d and in fac t testified for the responden ts during the hearing on June 27, 2005. Bo th the Complaint and the Am ended Complaints contained the duly signed verification and cerliiication of Mr. Cruz. In any event, the Supreme Court has consistently h eld that the requirem ent regarding certifica tion and verification of a pleading is formal, not jurisdictional. Petitioners' arguments d o not h old w ater.

DECISION C.T.A. AC No. 36 Page 11 of23 Records reveal that the Complaint's Verification31 shows that Mr. Cruz is respondents' Legal Counsel and is duly authorized by the latter to initiate legal action against h erein p e titioners. Respondents also attached to their Memorandum the respective Secretary's Certifica tes32 evidencing Board Resolutions which show Mr. Cruz's authority to sign the Verification and Certification of Non-forum Shopping. It bears stressing tha t "in rendering justice, courts have always been, as they ought to be, conscientiously guided by the norm that on the balance, technicalities take a backseat vis-a-vis substantive rights, and not the other way around." 33 Also, as correc tly pointed out by respondents in their Memorandum, respondents are corp orations and by law, they necessarily possess tl1e capacity to sue, pursuant to Section 36 of the Corpora tion Cod e. Respondents plead ed in their Complaint and Amended Complaints tha t they were duly incorporated. Petitioners failed to disprove such fact; h ence, they cmmot now be allowed to plainly allege that respondents do not have capacity to s ue. Fifth Assigned Error The Honorable Court a quo gravely erred in its failu re to dismiss the case despite thefact that the clailll of plaintiffs is barred by statute oflimitations. Petitioners assert that the protests. allegedly filed by respondents before the City Treasurer of Manila are not the letters of d emand contemplated by Section 196 of the 1991 LGC. The rem edy under Sec tions 195 and 196 of the LGC are exclusive 31 Rollo, p. 89 . 32 Rollo, pp. 347 -348 . 33 Heirs of Spouses Eugenio Natonton and Regina Arcilla v. Spouses Eulogio and Lily Magaway, G.R. No. 147011, March 3 1,2006,486 SCRA 205. II f' /

DECISION C.T.A. AC No. 36 Page 12of23 and not interchangeable, so that the failure of respondents to have availed of the remedy under Section 195 thereof shall bar them from claiming refund under Section 196 of the same Code. Consequently, the Court a quo is barred from entertaining the case. In addition, the second Am ended Complaint was filed only on February 16, 2004 or more than two (2) yea rs from the time the taxpayer is entitled to refund or tax credit pursuant to Section 196 of the LGC. Thus, the subject assessments had already become final and unappealable by virtue of Section 195 of the LGC. Respondents maintain that they filed letter-claims for refund dated March 12, 200234 and October 30, 200335 w ith petitioners and the letters d ated March 15, 200236 and December 10, 200337 from p e titioners which d enied these le tter-claims for refund. With regard to the filing of the second Amended Complaint, respondents contend that if the an1.endment m erely supplements, amplifies or corrects the facts alleged in the original complaint without constituting a new cause of action, the amendment relates back to the d a te of the filing of the original complain t for purposes of applying the statute of limitations. Both the Complaint and the Amended Complaint prayed for the refund of ~,319,392.14 representing respondents' erron eously paid business ta xes for taxable year 2002. Thus, � respondents' claim for refund could not have prescribed, since the Amended Complaint merely supplem ents and amplifies the original Complain t filed on January 20, 2004, which was filed within the two-year prescriptive p eriod. Petitioners' assertions have no m erit. Section 195 of the LGC reads: 34 Rollo, p. 223, Annex "B" of respondents' Comment. 35 /d. , pp. 226-227, Annex " D" of respondents' Com ment. 36 /d. , p. 225, Annex "C" of respondents' Comment. 37 /d. , p. 222, Annex "A" of respondents' Comment. /-

DEC IS ION C.T.A. AC No. 36 "SEC. 195. Protest of Assessment. - When the local treasurer or his duly authorized representa tive finds that correct taxes, fees, or charges have not been paid, he shall iss ue a no tice of assessment s ta ting the na tu re of the tax, fee or charge, the am ount of deficiency, the surcharges, interests an d pena lties. Within 60 days from the receip t of the noti ce of assessment, the taxpayer may file a written p ro tes t w ith the local treas ure r contes ting the assessment; otherwise the assessment shall become final and executory .. .. " We have consistently ruled tha t Section 195 of the LGC does not apply w hen the case involves a claim. for reftmd of taxes paid under Sec tion 21 of the RCM.38 Hence, Section 196 of the LGC is the applicable provision which provides for the filing of a claim for refund or credit as follow s: "Section 196. C laim for Refund of Tax Credit. No case or proceedin g shall be m aintained iJ1 a ny co urt for the recovery of an y tax, fee, or charge erroneously or illegally co llec ted until a written claim fo r refw1d or cred it has been filed with the local treas urer. No case or proceeding shall be entertained in any court after the exp iration of two (2) years from the d a te of the payment of such tax, fee, or charge, or from the da te the taxpayer is entitled to a refund or credit." Pursuant to the afore-quo ted provision, to successfully su e in court for a refund of any local ta x, fe e, or ch arge, Lwo things must be don e, to wit: 1) the taxpayer concerned must file a written claim for refund or credit with the local h�easu rer; and 2) the case or p roceeding for refund has to be filed within two (2) years from the date of the payment of the tax, fee, or ch arge or from the date the taxpayer is entitled to a refund or credit. 39 A perusal of the records of this case shows tha t respondents complied w ith both requisites. Respondents timely filed le tter-claims for refund d ated March 12, 38 The Treasurer of the City of Mani la v. Uni lever Phi lippi nes, Inc., C.T.A. AC No. 28, November 28. 2007;City of Manila, et.al. v. Columbia Pictures Industries, Inc., C.T.A. AC No. 29, August 30, 2007; Liberty M. Toledo, in her capacity as The Treas urer of T he City of Manil a v. Unilever Philippines, Inc., C.T.A . AC No. 21, May 1O, ' 2007. 39 China Banking Corporation v. City Treasurer of Ma nil a, C.T.A . E.B. No. 182 (RTC Civil Case No. 04- 108990), July 27, 2006.

DECISION C.T.A. AC No. 36 Page 14 of23 200240 and October 30, 200341 with petitioners which were denied by the latter in the letters dated March 15, 200242 and December 10, 2003.43 Moreover, We rule that there was no late filing of the second Amended Complaint. The Supreme Court has ruled on amendments of pleadings in this wise: "It follows that when the amended complaint does not introduce new issues, causes of action, or demands, the suit is deemed to have commenced on the date the original complaint was filed, not on the date of the filing of the amended complaint. In other words, for demands already included in the original complaint, the suit is deemed to have commenced upon the filin g of such original complaint. ln short, for purposes of determining the commencement of a suit, th e origina l complaint is deemed abandoned and superseded by the amended complaint only if the amended compl aint introduces a new or different cause of action or demand. "44 (Emphasis supplied) In the instant case, the amendments to the original Complaint and to the first Amended Complaint did not create a new or different cause of action. The second Amended Complaint merely provided for a more accurate statement of the facts and legal bases already alleged in the original Complaint and first Amended Complaint. Thus, the filing of the second Amended Complaint relates back to the date of filing the Original Complaint. Hence, respondents' claim is not yet barred by prescription for having filed their claim for refund, both adminish�ative and judicial, within the two-year prescriptive period. Sixth Assigned Error The Honorable Court a quo gravely erred in applying the case of Coca-cola Bottlers Philippines, Inc. vs. City of Manila, Liberty M. Toledo, City Treasurer, and Joseph Santiago, Chief, Licensing Division of Manila, docketed as G.R. No . 156252, June 27, 2006. 40 Rollo, p. 223 , Annex "B" of respondents' Co mment. 41 Jd, pp. 226-227, Annex "D" of respondents' Comment. 42 ld, p. 225, Annex "C" of respondents' Comm ent. 43 ld, p. 222, Annex "A" of respondents' Co mm ent. 44 Wilfredo P. Verzosa and Pil ar Martinez v. Court of Appeals, Hon . Nicodemo Ferrer, and Fe Giron Uson, G.R. Nos. 119511-13 , 299 SCRA I00, November 24, 1998. /

DECISION C.T.A. AC No. 36 Page 15 of23 Petitioners asseverate that the declaration in the Coca-cola case has no doctrinal effect inasmuch as the pronouncement that "Ordinance Nos. 7988 and 8011 are null and void and in legal contemplation do not exist" was made :in G.R. No. 156252 in order only to determine the propriety of the dismissal (Order dated May 8, 2002 in Coca-cola Bottlers, Phils., lnc. v s. City of Manila, et.al. docketed as Civil Case No . 01-99848) by the RTC, Branch 21, Manila of the petition for injunction filed by Coca- cola on the ground that the case was mooted by the enactment of Ordinance No. 8011. The Order dated May 8, 2002 espoused that the Honorable h�ial court dismissed the petition for il1junction upon judicial notice or on its own terms and not by virtue of the Motion for Reconsideration filed by the City of Manila thereil1 of the Decision dated November 28, 2001 iJ.1 Civil Case No. 01-99848. Thus, the Court is obliged to set the said case for hearing to eventually determil1e whether or not it could be granted so that any resolution which may emanate therefrom when eventually decided by the Supreme Court would become the stare decisis. The Coca- cola case therefore has no doctril1al effect as the h�ial court has yet to rule on the pending Motion for Reconsideration filed by the City of Manila. Respondents aver that the Supreme Court in the Coca-cola case has already declared in clear and unequivocal terms that Ordu1ance Nos. 7988 and 8011 of the City of Manila are null and void. Corollarily, the RTC of Manila - Branch 47 correctly applied the ruling iJ.1 the Coca-cola case by declaring the assessments made by petitioners on respondents null and void. There are no reasons to deviate from the ruling and the same must be followed pursuant to the doctrine of stare decisis. It / . 'I b. . V ..

DECISION C.T.A. AC No. 36 Page 16 of23 is clear that the Coca-cola case has not only put to an end the proceedings in Civil Case No. 01-99848 in the R'IC of Manila- Branch 21 but it has also put to rest the issue of the constitutionality of the Section 21 tax. By reversing the May 8, 2002 and December 5, 2002 Orders of the RTC of Manila - Branch 21, the Suprem e Court in effect affirmed the RTC of Manila - Branch 21 decision dated November 28, 2001, which granted Coca-coin's Complaint for Injunction. In other words, the Coca-cola case has disposed of Civil Case No. 01-99848 on the merits and is the latest pronouncement of the Supreme Court on the matter. Therefore, there is no umesolved issue left for ad judication by the RTC of Manila- Branch 21 in Civil Case No. 01-99848. We agree with respondents. The RCM was amended by Ordinance No. 7807 in the year 1993. Subsequently, the RCM was amended by Ordinance No. 7988 in the year 2000 and Ordinance No. 8011 in the year 2001.45 We have consistently adhered to the ruling of the High Tribunal in the Coca-Coin case,46 where Ordinance No. 7988 and Ordinance No. 8011 were declared void.47 It ruled: "It is undisputed from the facts of the case that Tax Ordina nce No. 7988 has already been d eclared by the DOJ Secre tary, in its Ord e r, dated 17 August 2000, as null and void and with out legal effect due to respondents' fail ure to satisfy the requirem ent that said ordinance be published for three consecutive days as required by law. Neith er is there quibbling on the fact that the said Order of the DOJ was never appealed by the City of Manila, thus, it h ad attain ed finality after the lapse of the p e riod to appeal. 45 The Treasurer of the City of Manila v. Uni lever Philippines, Inc., C.T.A. AC No. 28, November 28 , 2007. 46 G.R. No. 156252,493 SCRA 279, June 27, 2006 . 47 The Treasurer of the City of Manila v. Unil ever Phi lippines, Inc. , C.T.A. AC No. 28, November 28, 2007;City of Manila, et.al. v. Colum bia Pictures Industri es, Inc., C.T.A. AC No. 29, August 30, 2007; Liberty ~.tf. Toledo, in her capacity as The Treasurer of The City of Manila v. Unil ever Philippines, Inc., C.T.A. AC No. 21 . May 10, 2007; The Treasurer of the Ci ty of Manila v. Alcan Packaging Starpack Corporation (formerly Starpack Philippines Corporation, C.T.A. EB Case No. 26 1 (C.T.A. Case AC I7), July 30, 2007. I u .').'7

DECISION C.T.A. AC No. 36 Page I7 of23 Furthermore, the RTC of Manila, Branch 21, in its Decision dated 28 November 2001, reiterated the findings of the DO] Secretary that respondents failed to follow the procedure in the enactment of tax measures as mandated by Section 188 of the Local Goverrunent Code of 1991, in that they failed to publish Tax Ordinance No. 7988 for three consecutive days in a newspaper of local circulation. From the foregoing, it is evident that Tax Ordinance No. 7988 is null and void as said ordinance was published only for one day in the 22 May 2000 issue of the Philippine Post in contravention of the unmistakable directive of the Local Govenm1ent Code of 1991. XXX XXX XXX Based on the forego ing, this Court must reverse the Order of the l~TC of Manila, Branch 21, dismissing petitioner's case as there is no basis in law for such dismissal. The amending law, having been declared as null and void, in legal contem pia tion, therefore, does not exist. Furthermore, even if Tax Ordinance No. 8011 was not declared null and void, the trial court should not have dismissed the case on the reason that said tax ordinance had already amended Tax Ordinance No. 7988. As held by this Court in the case of People v. Lim, if an order or law sought to be amended is invalid, then it does not legally exist, there should be no occas ion or need to amend it." Petitioners assessed and collected from respondents business taxes for the year 2002 based on Section 21 of the RCM, as amended by Ordinance Nos. 7988 and 8011. As Ordinance Nos. 7988 and 8011 were declared void, the Court a quo correctly applied the ruling in the Coca-cola case. However, it failed to rule on whether Section 21 of the RCM (Tax Ordinance No. 7794, as amended by Ordinance No. 7807) constitutes double taxation. It is well to note that the parties stipulated that the subject assessments against respondents were pursuant to Section 21 of "City Ordinance No. 7794, as amended by City Ordinance Nos. 7807, 7988 and 8011, otherwise known as the Revenue Code of the City of Manila ... "48 We deem it apropos to focus on this matter as it is the main basis of respondents' claim for refund. 48 Rollo, p.61, Decision, Civil Case No. 04-108888. ' /0

DEC ISION C.T.A. AC No. 36 Sections 15, 17 and 21 of the RCM �(Tax Ordinance No. 7794, as amended by Ordinance No. 7807), read:49 "SEC. 15. Tax on Wholesale rs, Dis tributors, or Dealers - Th ere is hereby imposed a gradua ted tax on wholesalers, distributors or dealers in any article of commerce of w ha tever kind or n a ture, in accordance w ith the following sch e d u le: XXX XXX xxx " "SEC. 17. Tax on Re taile rs - there is here by imposed a grad ua ted tax on Retailers in accordan ce with the following sched ule: XXX XXX xxx" "SEC. 21. Tax on Businesses Subjec t to the Excise, Value Added or Percentage Taxes Unde r th e NIRC - On any of the following businesses and articles of commerce subject to the excise, value-added or perce ntage taxes under the National Interna l L{evenue Code hereinafter referred to as NIRC, as am en ded, a tax of FlFfY PERCENT (50%) OF O NE PERCENT (1 %) per an11 um on the gross sales or receipts of the p recedin g calendar year is here by imposed : A) On pe rsons wh o sell goods a nd se rvices in the course of trade or business; and those w h o import goods whe ther for business or otherwise, as provided for in sec tions 100 to 103 of the N IRC as administered and de termin ed by the Bureau of Internal Revenue purs uant to the pertinen t provisions of the said code. B) On the gross receipts of keepers of garages, cars for rent or hire driven by the lessee, tran s porta tion conh�ac tors, persons who trans port passen ger or freight for hire, and common carriers by land, air or w a ter, except own ers of bancas and owners of animal-drawn two-wheel vehicle. C) On the a mo unt p a id on eve ry overseas dispatch, m essage or conversation transmitted from lhe Philippines by telephone, telegraph, telewriter exchange, wireless and o ther communica tion equipment services, except amounts p aid by the government, its political subdivisions or instrumen talities; dipl o ma tic se rvices; public interna tional organiza tions or any of their agencies based in the Philippines; and news services; The tax shall be paya ble by the person pay ing for the services rendered and shall be paid to the p erson rend ering the services who is required to collec t and pay the tax within twenty (20) d ays after the end of each quarter. D) Excisa ble goods subject to VAT / (1) Dis ti lled spirits (2) Wines 49 See Acevedo, Handbook on Mani Ia Taxati on, 1993. v�.;J, ;l:l;

DECISION C.T.A. AC No. 36 Page 19 of23 (3) Tobacco products (other than cigarettes, cigars and chewing tobacco) (4) Tobacco specia lly prepared for chewing (5) Fireworks (6) Cinematographic films (7) Saccharine (8) Coal and coke (9) Fer mented liquor, brewer's wholesale price, excluding the ad valorem tax (10) A utomobiles, manufacturers or importers selling price (11) Non-essential goods based on wholesale price, n et of excise tax and VAT (a) Jewelry, whether real and imitation. pearls, precious and semi-precious stones and imitations thereof; goods made of, or ornamented, mounted or fitted with precio us m e tals or imitations thereof or ivory (not including surgical and dental instruments, silver-plated wares, frames or mountings for spectacles or eyeglasses, and dental gold or gold alloys and other precious m etals used in filling, mounting or fitting of the tee th.) (b) Perfum es and toilet waters. (c) Yachts and other vessels intended for pleasure or sports. (12) Mineral products, based on actual marke t value of the annual gross output at the time of removal (E) Excisable goods not subjec t to VAT (1) Naphtha when used as raw materials for production of pe tro-che mical products. (2) Asphalt. PROVIDED, that all registered businesses in the City of Manila that are already paying the aforementioned tax shall be exempted from payment thereof." The Supreme Court defined "double taxation" in the case of Commissioner of Internal Revenue v. Solidbank Corporationso as follows: "Double taxa tion m eans taxing the same property twice when it should be taxed only once; th a t is, "... taxing the same person twice by the sam e jurisdiction for the same thing. " It is obnoxious when the taxpayer is ta xed 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 they mus t be of the same kind or character." (Citations omitted) 50 G.R. No. 148191 , November 25 , 2003,4 16 SCRA 436. 11 :in

DECISION C.T.A. AC No. 36 In a number of instances, We have ruled that businesses taxed under Sections 14, 18 and 24 of the RCM can no longer be taxed under Section 21 thereof.51 In LiberhJ M. Toledo, in her capacity as The Treasurer of the City of Manila vs. Unilever Phils., lnc.,52 We held that the imposition of business taxes under Sections 14 and 21 of the RCM, as amended, upon resp ondent constitutes double taxation, as there was taxation twice for the same subject or activity, which was the business of manufacturing; by the same public authority and within the same ta xing jurisdiction, which was the City of Manila; for the same p urpose, w hich was to generate revenues for the local taxing authority; and in the sa1ne year or taxin g p eriod, which was for taxable year 2004. In the same vein, the imposition of business taxes on h erein respondents under Sections 15 and 17 vis-a-vis Sec tion 21 of the RCM also constitutes double taxation, as there was taxation twice for the same subject or activity, which is the business of wholesale and retail; by the same public a uthority and within the same taxing jurisdiction, which was the City of Manila; for the same purpose, which was to generate revenues for the local taxin g authority; and in the same year or taxing period, which was for taxa ble year 2002. Furthermore, in Unilever Phils, Inc. vs. The Treasurer of the CihJ of Man.ila,53 We elucidated that the taxation of respondent therein under both Sections 14 and 21 of the RCM is expressly prohibited under Section 143 (h) of the LGC. In the instant 51 Uniliver Phils., v. The Treasurer of the City of Manila, C.T.A. AC No. 25 , June 18, 2007; Swedish Match Phils., Inc. v. The Treasurer of th e City of Manila, C.T.A . AC No. 15, July 2 1, 2006; International Container Terminal Services v. The City of Manila, et al., C.T.A. AC No. II , May 17, 2006; Zarcon Development Corp. v. y The City Treasurer of the City of Manila, C.T.A. AC NO. 24, May 16, 2007; Liberty M . Toledo, in her capacity as the Treasurer of the City of Manila v. Uniliver Phi Is., lnc. , C.T.A. AC No. 2 1 May 10 2007 . 52 C.T.A. ACNo. 21, May 10,2007. ' ' "C.T.A. AC No. 25, Joo< 18,2007. / 1 t I ',t

DECISION C.T.A. AC No. 36 Page 2 1 of23 case, Sections 15 and 17 of the RCM are based on Section 143 (b) and (d) respectively of the LGC and Section 21 of the RCM is based on Section 143 (h) of the LGC. The clear tenor of Section 143 (h) of the LGC prohibits double taxation of businesses taxes under paragraphs (a) to (g) thereof. It allows the imposition of new business taxes only in cases "not o therwise specified in the preceding paragraphs [(a) to (g)]. Section 143 of the LGC provides: "Section 143. Tax on 13usiness. - The municipality may impose taxes on the following businesses: (a) On manufacturers, assemblers, repackers, processors, brewers, distillers, rec tifi ers, and co m pounders of liquors, distilled spirits, and wines or manufacturers of any a rticle of commerce of whatever kind or nature, in accordance with the following schedule: XXX XXX XXX (b) On wholesalers, distributors, or dealers in any article of commerce of whatever kind or nature in accordance with the following schedule: XXX XXX XXX (c) On exporlers, and on manufacturers, millers, producers, wholesalers, distributors, d ealers or retailers of essential commodities enumerated hereunder at a rate not exceeding one-half (1./2) of the rates prescribed under subsec tions (a), (b) and (d) of this Section: XXX XXX XXX (d) On retailers, XX X XXX XXX (f) On banks and oth er financial institutions, at a rate not exceeding fifty percent (50 %) of one percent (1 %) on the gross receipts of the preceding calendar year derived from interest, commissions and discounts from lending activities, income from financial leasing, dividends, rentals on property and profit from exchange or sale of property, insurance premium. (g) On peddl ers engaged in the sale of any merchandise or article of commerce, at a rate not exceeding Fifty pesos (PSO.OO) per peddler annually.

DECISION C.T.A. AC No. 36 Page 22 of23 (h) On any business, not otherwise specified in the preceding paragraphs, which the sanggunian concerned may deem proper to tax: Provided, That on any business subject to the excise, value-added or percentage tax under the Na tional Internal Revenue Code, as amended, the rate of tax shall not exceed Lwo percent (2 %) of gross sales or receipts of the preceding calendar year. The sanggunian concerned may prescribe a schedule of graduated tax rates but in no case to exceed the rates prescribed herein." (Emphasis supplied) As both Sections 15 and 21 of the RCM and both Sections 17 and 21 of the same Code, impose business taxes on respondents respectively, there is indeed double taxation. Based on the foregoing, We find no reversible error conunitted by the Regional Trial Court of Manila, Branch 47, which merits a reversal of the assailed Decision and Order. WHEREFORE, the Petition for Review is h ereby DENIED for lack of merit. The Decision dated January 12, 2007 and Order dated April 17, 2007 rendered in Civil Case No. 04-108888 are hereby AFFIRMED. Accordingly, petitioners are h ereby ORDERED TO REFUND or ISSUE TAX CREDITS to respondent, MelTo Manila Shopping Mecca Corp., the amount of ~,205,792 .14 and to respondent, Warehouse Development Corp., the amount of P113,600.00, representing erroneously paid local business taxes for the year 2002. SO ORDERED. Associate Justice �03.1

DECISION C.T.A. AC No . 36 WE CONCUR: L-.:-\.5>..- a.~ ERNESTO D. ACOSTA Presiding Justice ~ CAESAR A. CASANOVA Associate Justice CERTIFICATION Pursuant to Section 13, A1"licle VIII of the Constitution, it is h ereby 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 the opinion of the Division. L--~. a~ ERNESTO D. ACOSTA Presiding Justice Chairman, First Division Court ofTa�,.( r ppea\ ~ Library u3 4