SAN MIGUEL FOODS, INC. v. OFFICE OF THE CITY TREASURER, CITY OF DAVAO, represented by BELLA LINDA N. TANJILI, City Treasurer

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY ENBANC SAN MIGUEL FOODS, INC., CTA EB NO. 2535 Petitioner, (CTA AC NO. 210) Present: - versus - DEL ROSARIO, P.J.} RINGPIS-LIBAN, MANAHAN, BACORRO-VILLENA, MODESTO-SAN PEDRO, REYES-FAJRDO, CUI-DAVID, FERRER-FLORES, and ANGELES,]]. OFFICE OF THE CITY Promulgated: TREASURER, CITY OF DAVAO, represented by BELLA N . TANJILI, City Treasurer, Respondent. X-----------------------------------------------------------------------------------------------X RESOLUTION RINGPIS-LIBAN, J.: For resolution is the Motion for R econsideration (Of 18 Mqy 2023 Decision) of San Miguel Foods, Inc. (SMFI) ftled by accredited courier on September 15, 2023,1 with respondent's Comment (to the Motion for Reconsideration dated September 15} 2023) flied by registered mail on O ctober 23, 2023.2 In the assailed decision, the Court denied SMFI's petition and affirmed the decision of the court a quo, which dismissed its appeal for lack of jurisdiction y 1 Rollo, pp. 141-150. 2 /d., pp. 157-163. 3 Id., p. 60.

RESOLUTION CTA EB NO. 2535 (CTA AC NO. 210) S~IFI prays that the Court reconsider because the phrase "local tax cases" in Section 7(a)(3) of Republic Act No. (fu\) 1125, as amended, should be construed in its generic sense to include the permitfee to slaughter imposed by the local government. It cites National Power Cotporation v. JV!unicipal Govemment ofNavotas, eta! (l\'PC)" as authority for its position, which is a reiteration of those stated in the petition.5 Respondent, on the other hand, states that the permit fee is regulatory fee and not a local tax and, thus, the holding that the court a quo had no juriscliction over the appeal from the Regional Trial Court (RTC) is correct. The Court is unimpressed with the arguments of SMFI. In essence, the issue in NPC was whether the CTA Second Division had jurisdiction to review the decision of the RTC which concerned a petition for declaratory relief involving real property taxes. Thus, the Supreme Court ruled in the affirmative and declared that the CTA sitting as Division had jurisdiction to hear appeals from the RTC over local tax cases, which includes real property taxes: "Indeed. the CTA. sitting as Di,�ision. has jurisdiction to review by appeal the decisions. rulings and resolutions of the RTC over local tax cases. which includes real propertY taxes. This is evident from a perusal of the Local Gm�ernment Code (LGC) which includes the matter of Real Property Taxation under one of its main chapters. Indubitably, the power to impose real property tax is in line with the power vested in the local governments to create their own revenue sources, within the limitations set forth by law. As such, the collection of real property taxes is conferred with the local treasurer rather than the Bureau of Internal Revenue. XXX XXX XXX Based on the foregoing. the general meaning of 'local taxes' should be adopted in relation to Paragraph (a)(3) of Section 7 of R.A. 9282. which necessarilv includes real propertv taxes. Second, as correctly pointed out by petitioner, when the legality or validity of the assessment is in question, and not its reasonableness or correctness, appeals to the LK-L-\, and subsequently to the CB}u\, pursuant to Sections 226 and 229 of the LGC, are not necessary." (Underscoring mpplied and citations omitted) Clearly, the holding in 2\'PC does not extend to this case. NPC centered on the issue of whether rea!property taxes are embraced by the phrase "local taxes". The issue that was resolved in the Court's assailed decision, however, was whether the permit fee to slaughter was a regulatory fee and not a local tax. Accordingly, since the Court ruled that it was a fee, it lies outside the jurisdiction of the court a quo:;/ 4 G.R. No. 192300, November 24, 2014. 5 See paragraphs 34-47, Petition for Review, Rollo, pp. 10-17.

RESOLUTION ITA EB NO. 2535 (ITA AC NO. 210) 'The permit fee to slaughter, which is the subject of respondent's orders of payment and assessments and/or petitioner's payments under protest, is in the nature ofa license fee and, thus, not a tax. Before the Court a quo, petitioner SMFI argued that the permit jie to .rlaughteris a fee for the regulation of the slaughter of the animals and, therefore, a direct duplication of the ante-m01tem and post-mortem fees. Petitioner, however, contradicts this position on appeal before the Court En Bane by stating that this case invoh-es a "local tax case" or the issue pertains to the exercise of the taxing powers of the local government over which the Court a quo has jurisdiction, under Section 7 of R.A 1125, as amended. First, afee is defined as a charge fixed by law for the service of a public officer, while a tax is a forced contribution of wealth to the public needs of gm�ernment. Taxe.rare imposed for the purpose of general re\'enue, while !imm jee and otherfee.r are ordinarily imposed to cm�er cost and expense of supervision or regulation. These definitions are consistent with the codal definition laid down bv the Local Government Code in Section 131 (1), thus: XXX XXX XXX More specifically, Tbe 2005 Rmnue Code ofthe Cit;� ojDm;ao also provides a definition that follows the wording of those provided above: XXX XXX XXX Thirdly, Section 367(a) of The 2005 Re/Jenm Code of the Cit;� of Dm;ao, which imposes the penni! fa to J!at(r,htn~ when read together with the other germane pro\'isions in the city ordinance provides the context and reason for the imposition. The purpose of the pem;illie to .rlaugbter is clearlv to 1rgulate or control the .r!aughter o( anima/,� intended (or sale to the public in order to promote public health and .ra(etv within Davao Citv's territorv: XXX XXX XXX A reading of Section 367(a) within the context of the other related prm�isions under Article Twelve - Slaughter and Corral Fees, brings to light thegenem! welfare purpose of these provisions. To reiterate. the purpose of these prm�isions collectivelv and the imposition of the permit fee is to lrglllate the activities pertaining to the slaughter of animals, in general, and the slaughter of live birds /poultrv, in particular. Based on the foregoing legal authorities, the imposition of Davao Citv is unmistakablY in the nature of a lie for the purpose of regulating the business actiYity of S'v!FI. The permit tie to sla11gbteris, therefore, not a lax to raise revenues for the city but is imposed on Sl\!FI in order for it to engage in a particular trade or business. The Po7llil fee to .rlaugbto; which is within the power of respondent to impose, can only be classified as a _lie for the purpose of 1-crrubtinrr ~ ~pccific hu:-inC'"~ ~rtiYity imhucd with public intcrc~t hccmsc the activitY i.e. the slaughter ofliYe birds/poulm� in its Toril and Tugbok dressing plants, can impact public health. hygiene and sanitation./

RESOLUTION CTA EB NO. 2535 (CTA AC NO. 210) Without a doubt, such business activity by its nature warrants close supervision and control by the city in the exercise of police power under the general welfare clauses of Section 16 of the Local Government Code and Section 87 of the The 2005 Revenue Code ofthe Czfy ofDavao: XXX XXX XXX It bears stressing that the police power delegated to the local government units under the general welfare provision of Section 16 of the Local Government Code subsumes the promotion of health and safety within their territory. Evidently, the regulation of the slaughter of live bird/poultry, the activity undertaken in SMFI's dressing plants, is covered within the standards of health and safety for the exercise of the city's regulatory powers. All told, the pemzir fee to slaughtn; which is the subject of respondent's orders of payment and assessments and/ or petitioner's pavments under protest is in the nature of a licfnJefee and. thus not a tax."c' (UnderJcoring .mpplied and d!atiom omitted) Accordingly, the Court En Bane finds no reason to modify or reverse the decision under reconsideration. WHEREFORE, premises considered, SMFI's JV!.otion for Reconsideration (OJ 18 Mqy 2023 Decision) is DENIED for lack of merit. SO ORDERED. ~. L.l._.._ ~ MA. BELEN M. RINGPIS-LIBAN Associate Justice WE CONCUR: Presiding Justice ~7-~ CATHERINE T. MANAHAN Associate Justice 6 !d., pp. 98�106.

RESOLUTION CTA EB NO. 2535 (CTA AC NO. 210) ~ ~ f. ~ ~Fa.,~ MARIAN ivfJF. RErlS~FAJAADO Associate Justice LA~!ftlA~~.IA~�UtfI;n-ADA_VID Associate Justice s HENR/h.NGELES "'\ssociatc Just:ice