ATTY. VOLTAIRE ENRIQUEZ, in his capacity as the City Treasurer of Taguig v. RICE CREEK HOLDINGS, INC.

H.EI>UBLIC ()F THE PHILIPPINES COURT ()F TAX APPEALS QUEZON CITY SECOND DIVISION ATTY. VOLTAIRE CTA AC CASE NO. 322 ENRIQUEZ, in his capacity as (RTC Civil Case No. 663) the CITY TREASURER OF TAGUIG, Members: Petitioner, -versus- RINGPIS-LIBAN, Chairperson, MODESTO-SAN J>EDRO, and FERRER-FLORES, JJ. RICE CREEK HOLDINGS, Promulgated: INC., -------r--_ Respondent. __ _ 1�-~ � -~ X------ -- - -- - - -- --- -------- -- -- - - - - - - - - - -:- -'-- - ---X DECISION MODESTO-SAN PEDRO, J.: The Case This Petition for Review under Section 3(a) of Rule 8 of the 2005 Revised Rules of Court of Tax Appeals ("RRCTA") seeks to reverse and set aside the Decision dated December 6, 2023 ("Assailed Decision") and the Order dated March 20, 2024 ("Assailed Order"), both rendered by the Regional Trial Court of Taguig City, Branch 70 ("the RTC" or "the Lower Court"), in Civil Case No. 663, which granted respondent's claim for refund of the local business tax that it paid covering the taxable years 2018 and 2019 to the City of Taguig in the total amount of P653 ,099.81, and imposing legal interest thereon at the rate of six percent (6%) per annum., 1 Petition for Review. Docket. pp. I I to 12.

DECISION CTA AC CASF: NO. 322 (IUC Civil Case No. 663) Page 2 of I0 The J>arties Petitioner Atty. Jonathan Voltaire L. Enriquez, is oflegal age and with office address at the City Hall ofTaguig, Brgy. Tuktukan, Gen. Luna St., 1630 Taguig City, and presently the City Treasurer ofTaguig City. Among others, he has the legal function and responsibility to assess and collect taxes, fees, and charges from corporate and individual taxpayers as levied and imposed by the Local Government Code and the tax ordinances of the City ofTaguig.2 Respondent Rice Creek Holdings, Inc. is a corporation duly organized and existing under, and by virtue of the laws of the Republic of the Philippines, with principal office address at No. 2281 Pasong Tamo Extension, Makati City.3 The Facts On January 18,2018 and January 17,2019, petitioner issued Billing Statements for the taxable years ("TYs") 2018 and 2019,4 respectively, requiring respondent to pay local business tax ("LBT") on its dividend income in the amount of Pl39,064.34 and P514,035.4 7, respectively, or in the total amount ofP653,099.81, in order to renew respondent's business permits in both years. Respondent paid said I"BT on the same dates the Billing Statements were issued.5 On September 25, 2019, respondent filed with petitioner a Claim for Refund dated September 18, 2019 of the alleged erroneously or illegally collected LBT for TYs 2018 and 2019.6 Due to petitioner's inaction on its claim, respondent filed a Complaint before the RTC on January 20, 2020/ praying for the refund of the erroneously or illegally collected LBT in the total amount off653,099.81 for the TYs 2018 and 2019, plus 12% legal interest thereon and attorney's fees. On December 6, 2023, the RTC promulgated the Assailed Decision,8 partially granting respondent's Complaint, as follows: WHEREFORE, premised considered, the Complaint for Sum of Money and Damages filed by the plaintiff Rice Creek is hereby/' /d at 12. !d. .J Exhibits ''D'' and "F", RTC Docket, pp. 236 and 238. Exhibits "E" and "G", id. at 237 and 239. 6 Exhibit �'C, id. at 214 to 221. 7 I d. at 5 to 9. 8 Docket, pp. 32 to 55.

DECISION CTA AC CASE NO. 322 (RTC Civil Case No. 663) Page 3 of I0 PARTIALLY GRANTED. Consequently defendant Atty. Voltaire Enriquez, in his capacity as the City Treasurer of Taguig City, is ordered to REFUND plaintifi Rice Creek Holdings, Inc. the total amount of Six Hundred Fifty-Three Thousand Ninety-Nine Pesos and Eighty-One Centavos (Php653.099.81 ). with legal interest of 6% per annum from the finality of this Decision until its full satisfaction; and the costs of suit. SO ORDERED. Petitioner filed his motion for reconsideration on the foregoing decision, but was denied by the RTC in the Assailed Order dated March 20, 2024. 9 On May 9, 2024, petitioner filed his Motion for Extension of Time to File Petition for Review 10 before the Court praying for an additional period to file its petition for review until May 27, 2024, which was granted by the Court in a Minute Resolution dated May 14, 2024. 11 On May 27, 2024, petitioner filed the instant Petition for Review, 12 to which respondent filed its Comment on July 5, 2024. 13 Thereafter, petitioner filed his Reply to respondent's Comment on August 15, 2024. 14 On August 20, 2024, the RTC transmitted to this Court the records of Civil Case No. 663 consisting ofthree folders. 15 Respondent filed its Memorandum on October 7, 2024, 16 while petitioner's Memorandum was submitted on October 9, 2024. 17 Thus, in a Minute Resolution dated November 12, 2024, the case was deemed submitted for decision. Hence, this Decision. The Issues f Petitioner raised the following issues for the Court's resolution: 1 9 !d. at 56 to 59. 10 !d. at 5 to 7. 11 fd.at10. 12 !d. at II to 29. 13 /d. at 74 to 84. 14 !d. at 90 to 93. 15 !d. at 97 to 102. I(, /d. at 142 to 156. 17 !d. at 160 to 177. 18 Issues, Petition for Review, id. at 15.

DECISIOI\ CTA AC CASE NO. 322 (RTC Civil Case No. 663) Page 4 or I0 (1) Whether or not the Lower Court erred in holding that the claim for tax refund on the local business taxes that the respondent had paid for the taxable years 2018 and 2019 was filed on time. (2) Whether or not the Lower Court transgressed the police power and the taxing power of the City Government of Taguig, and exempted the respondent from payment of the local business tax for the taxable years 2018 and 2019 when it granted the latter a full refund thereof. Arguments of the Parties Petitioner's Arguments: Petitioner argues that the Complaint should have been denied by the RTC as it was filed beyond the prescriptive period. Anchoring on its assetiion that the Billing Statements arc notices of assessment, the periods prescribed under Section 195 ofthe Local Government Code ("LGC'') should apply and not those under Section 196 ofthe same Code. Fwiher, by granting the refund, petitioner argues that the Lower Court brushed aside the City of Taguig' s power to levy taxes and promote general welfare in its territorial jurisdiction since the LBT assessments in the Billing Statements arc not only sources of revenues but also license fees for respondent to validly operate its business in the city. Lastly, even granting that respondent is not liable for LBT as a bank or other financial institution under Section 75(h) ofthe Revenue Code ofTaguig, its dividend income is ncvctiheless liable for LBT under Section 5 of City Ordinance No. 47, Series of2006. Respondent's Counter-arguments: Respondent counter-argues that its claim for refund and Complaint were timely filed in accordance with Section 196 of the LGC and that the Billing Statements are not notices of assessment; that the grant of refund was proper as it is not a bank, nor a financial institution for it to be liable to pay LBT under Section 75(h) of the Revenue Code ofTaguig; and it also cannot be made liable for LBT on its dividend income as a holding company under Section 5 of City Ordinance No. 47, Series of 2006 without the proper f assessment procedures conducted by petitioner.

DECISION CT!\ AC CASE NO. 327. (RTC Civil Case No. 663) The Ruling of the Court The Petition must be denied. The Court Division has jurisdiction over the Petition. Section 7(a)(3) of Republic Act ("RA '')No. 1125, as amended by RA No. 9282, ("the CTA f"aw") empowers the Court of Tax Appeals ("CTA") to exercise exclusive appellate jurisdiction to review by appeal decisions, orders or resolutions ofthe Regional Trial Courts in local tax cases originally decided or resolved by them in the exercise of their original or appellate jurisdiction. Meanwhile, Section II ofthe CTA Law prescribes the period as to when a matter within its jurisdiction must be brought before it and whether a matter should be acted upon by the CTA Division or En Bane, to wit: SEC. 11. Who May Appeal: Mode o.fAppeal: Effect a/Appeal. -Any party adversely qffected by a decision, ruling or inaction o{ the Commissioner of Internal Revenue, the Commissioner of Customs, the Secretary of Finance, the Secretary of Trade and Industry or the Secretary of Agriculture or the Central Board of Assessment Appeals or the Regional Trial Courts mayfile an appeal with the CTA within thirty (30) days afier the receipt r~{such decision or ruling or after the expiration of the period fixed by law for action as referred to in Section 7(a)(2) herein. Appeal shall be made by .flling a petition for review under a procedure analogous to that providedfhr under Rule .:/2 ofthe 1997 Rules o/Civil Procedure with the CTA within thirty (30) days/i'om the receipt o{ the decision or ruling or in the case of inaction as herein provided, from the expiration of the period fixed by law to act thereon. A Division r~f Ihe CTA shall hear the appeal: Provided, however, That with respect to decisions or rulings of the Central Board of Assessment Appeals and the Regional Trial Court in the exercise of its appellate jurisdiction. appeal shall be made by filing a petition for review under a procedure analogous to that provided for under rule 43 of the 1997 Rules of Civil Procedure with the CTA, which shall hear the case en hanc. (Italics, Ours.) The foregoing provisions arc echoed in Rule 4, Section 3(a)(3) of the RRCTA, which provides that the Court in Division shall exercise exclusive original or appellate jurisdiction to revievv by appeal decisions, resolutions or orders of the Regional Trial Courts in local tax cases decided or resolved by them in the exercise of their original jurisdiction. Meanwhile, Rule 8, Section 3(a) ofRRCTA prescribes the following: SEC. 3. Who may appeal; period o Jile petition. �� /

DECISIO"' CTi\ AC Ci\Sic NO. 327. (IUC Civil Case No. 663 l Page 6 of I0 (a) A party adversely C!flected by a decision. ruling or the inaction ofthe Commissioner oflnternal Revenue on disputed assessments or claims for refund of internal revenue taxes, or by a decision or ruling of the Commissioner of Customs, the Secretary of Finance, the Secretary of Trade and Industry, the Secretary of Agriculture, or a Regional Trial Court in the exercise (~fits originaljurisdiction may appeal to the Court by petitionfor review filed �within thirty days after receipt (~fa copy ~f such decision or ruling, or expiration of the period fixed by law for the Commissioner of Internal Revenue to act on the disputed assessments. In case of inaction of the Commissioner of Internal Revenue on claims for refund of internal revenue taxes erroneously or iiiegaiiy coiiected, the taxpayer must file a petition for review within the two-year period prescribed by law from payment or collection of the taxes. (Italics supplied) As such, in order for this Court to acquire jurisdiction in the instant case, the petition for review by the aggrieved party must be filed before the Court within 30 days from the date of receipt of the order of the RTC in local tax cases resolved by them in the exercise of their original jurisdiction. In this case, petitioner received the RTC's Assailed Order on his timely filed Motion for Reconsideration on April 12, 2024, 19 giving him until May 12, 2024 to file a petition for review before this Court. However, petitioner instead filed a Motion for Extension of Time to File Petition for Review on May 9, 2024, requesting for additional 15 days from the expiration ofthe original30-day period to file the petition for review. This was granted by this Court on May 14, 2024, giving petitioner until May 27, 2024 to file his petition for review. It is notable, however, that the RRCTA does not authorize the grant of additional15 days in illing the petition for review before the Court in Division on cases involving the decisions, resolutions, or orders of the RTC in the exercise of its original jurisdiction. Said permissible period of extension of 15 days to file petition for review is available only on the decision or resolution of a Division of the Court on a motion for reconsideration or new trial under Rule 8, Section 3(b) for civil cases and Rule 9, Section 9(b) for criminal cases ofthe RRCTA. But then, Section 11 of the CTA Law and Rule 8, Section 4(a) of the RRCTA state that the mode of appeal from a decision or ruling of the RTC in the exercise of their original jurisdiction before the Comi in Division is by filing a petition for review as provided in Rule 42 ofthe 1997 Rules of Civil Procedure. Section 1 thereof provides that the Court of Appeals may grant an additional period of fifteen days within which to file the petition for review/ 19 Registry Return Receipt RTC Docket, p. 514.

DECISIO~ CTi\ i\C Ci\SE NO. 322 (RTC Civil Case No. 663) Page 7 or 10 upon proper motion and the payment of the full amount of the docket fee before the expiration of the reglementary period. Consequently, an extension oftime to file of a petition for review before this Com1 in Division on cases involving the decisions, resolutions, or orders of the RTC in the exercise of its original jurisdiction may be authorized pursuant to Rule 42, Section 1 ofthe 1997 Rules ofCivil Procedure. The Motion for Extension of Time to File Petition for Review on May 9, 2024 was timely filed. Petitioner then filed their Petition for Review on May 27, 2024, well-within the 15-day extension granted by the Court. Thus, this Comi acquired jurisdiction over the same. Respondent availed the proper remedy under Section 196 ofthe l-GC and the grant ofrefund is warranted. With respect to the matter of timeliness of filing the claims, respondent filed a Complaint before the RTC for the refund of erroneously or illegally collected LBT by petitioner for the years 2018 and 2019 pursuant to Section 196 ofthe LGC, which provides as follows: Section 196. Claim for Refund of Tax Credit. � - No case or proceeding shall be maintained in any court for the recovery of any tax, fee, or charge erroneously or illegally collected until a written claim for refimd or credit has been.flledwith the local treasurer. No case or proceeding shall be entertained in any court after the expiration of two (2) years fl�om the date qfthe payment q/'such /axJee, or charge, or from the date the taxpayer is entitled to a refund or credit. (Italics supplied.) From respondent's point ofview, the LBT it paid on January 18, 2018 and January 17, 2019 for the taxable years 2018 and 2019 were erroneously or illegally collected as it were erroneously charged with LBT on banks and other financial institutions even if it is not in its nature to operate as such. Respondent thus filed an administrative claim for refund before petitioner on September 25, 2019 and, eventually, a judicial claim before the RTC on January 20, 2020, when the administrative claim was not acted upon by petitioner. Since the administrative claim, followed by the judicial claim, for refund were made within the two-year prescriptive period to file the same pursuant to Section 196 ofthe LGC, which ended on January 18, 2020 (which r fell on a Saturday), respondent's claim for refund were timely filed.

DECISIO'I CT A i\C CASE NO. 322 (RTC Civil Case No. 663 l Page 8 of I0 On the other hand, petitioner considers the case as a protest against an assessment under Section 195 ofthe LGC, which provides: Section 195. Protest ofthe Assessment.- When the local treasurer or his duly authorized representative finds that correct taxes, fees, or charges have not been paid, he shall issue a notice of assessment stating the nature of the tax, fee, or charge, the amount of deficiency, the surcharges, interests and penalties. Within sixty (60) days fi�om the receipt of the notice of assessment, the taxpayer may file a written protest with the local treasurer contesting the assessment; otherwise, the assessment shall hecomefinal and executory. The local treasurer shall decide the protest within sixty (60) days from the time of its filing. If the local treasurer finds the protest to be wholly or partly meritorious, he shall issue a notice cancelling wholly or partially the assessment. However, if the local treasurer finds the assessment to be wholly or partly correct, he shall deny the protest wholly or partly with notice to the taxpayer. The taxpayer shall have thirty (30) days from the receipt of the denial of the protest or from the lapse of the sixty (60)-day period prescribed herein within which to appeal with the court of competent jurisdiction otherwise the assessment becomes conclusive and unappealable. (Italics supplied.) From petitioner's point of view, the Billing Statements for the taxable years 2018 and 2019 arc notices ofassessment; hence, respondent should have protested these within 60 days from notice. Accordingly, since respondent belatedly protested the assessments on September 25, 2019,20 petltwner asserts that the assessments for 2018 and 2019 were already final and executory, thereby unappealable. Petitioner is gravely mistaken. The RTC correctly ruled that the case before it is a claim for refund under Section 196 of the LGC and not a protest on an assessment under Section 195 of the same. In City ofManila and Office ofthe City Treasurer ofManila vs. Cosmos Bottling Corporation,21 the Supreme Court clarified that the application of Section 195 is triggered by an assessment made by the local treasurer or his duly authorized representative for nonpayment of the correct taxes, fees or charges. Consistently, International Container Terminal Services, Inc. vs. City of Manila, 22 pronounced that it is explicitly stated in Section 195 that it is a remedy against a 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."_v I 20 The 60-day periods to protest the alleged assessment of LBT from January 18,2018 and January 17,2019 ended on March 19,2018 and March 18,2019, respectively. 21 G.R. No. 196681, June 27, 2018. 22 G.R. No. 185622, October 17, 2018.

DECISION CTA AC Ci\SF NO. 322 (RTC Civil Case No. 663) As correctly found by the RTC, the Billing Statements failed to qualify as notices of assessment in order for Section 195 of the LGC to apply in this case. Accordingly, the Billing Statements were issued not as an assessment for any unpaid LBT, but merely for renewal of respondent's business permit. Since no notice of assessment was issued in this case, the payment of the LBT for the taxable years 2018 and 2019, which were allegedly made erroneously or illegally, falls within the coverage of the remedy provided under Section 196 ofthe LGC. Verily, the RTC was correct in ruling that respondent availed the proper remedy under Section 196 ofthe LGC. Now, with respect to the argument that the RTC allegedly transgressed the police power and taxing authority ofthe City Government ofTaguig when it essentially exempted respondent from the payment of LBT by granting its full refund, We find the same gravely misplaced. Petitioner misunderstood the RTC 's ruling in granting the refund claimed by respondent. The RTC did not exempt respondent from LBT. It ruled that the LBT paid by respondent as a "bank or other financial institution" was erroneous after finding that respondent is not classified as such. The issue resolved by the RTC is not a matter of tax exemption, but rather an erroneous classification of respondent committed by petitioner in charging the LBT for the taxable years 2018 and 2019. Since respondent was classified erroneously as a "bank or other financial institution" under Section 75(h) of the Revenue Code of Taguig, any payment of LBT pursuant to such erroneous classification warrants a refund. As correctly found by the RTC, respondent's primary purpose based on its Atiicles of Incorporation, which is "to own, hold, purchase, acquire, lease contract of otherwise, within the limits allowed by law, any all real and personal properties of every kind and description", is consistent with being a holding company and not as bank or other financial institution. Verily, petitioner was erroneous in charging respondent with LBT on banks or other financial institutions under Section 75(h) ofthe Revenue Code of Taguig for the taxable year 2018 and 2019. Logically then, the payment thereof by respondent was likewise erroneous. Lastly, petitioner's argument that the refund must not be granted since respondent is nevertheless liable for LBT on its dividend income as a holding company under Section 5 of City Ordinance No. 47, Series of 2006 ijv'

DECISION CTA AC CASE NO. 322 (RTC Civil Case No. 663) Page 10 or 10 untenable. As the alleged LBT on dividend income as a holding company allegedly remain unpaid by respondent, the proper remedy of petitioner is to issue an assessment pursuant to its remedy under Section 194 ofthe LGC and not in this forum. ACCORDINGLY, the instantPetitionfor Review is hereby DENIED for lack of merit and the Assailed Decision dated December 6, 2023 and Assailed Order dated March 30, 2024 are hereby AFFIRMED. SO ORDERED. WE CONCUR: ~.~�- MA. BELEN M. RINGPIS-LIBAN Associate Justice c~t.'-~1&7 Associate Justice ATTESTATION I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. f!v. ~ 1 ' - MA. BELEN M. RINGPIS-LIBAN Associate Justice Chairperson CERTIFICATION Pursuant to A1iicle VIII, Section 13 of the Constitution and the Division Chairperson's Attestation, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court. /A.A. ~ _, ..___ MA. BELEN M. RINGPIS-LIBAN Acting Presiding Justice