CITY OF MANILA, ET., AL., v. ACE HARDWARE PHILS., INC., ET., AL.

REPUBLIC OF THE PHILIPPINES COURT OFTAX APPEALS QUEZON CITY J FIRST DIVISION CITY OF MANILA, ET. AL., Petitioners, C.T.A. AC NO. 52 (Civil Case No. 06-1305-CFM) -versus- Members: ACOSTA, Chairperson BAUTISTA, and CASANOVA, fl. ACE HARDWARE PHILS., INC., ET. AL., Respondents. Promulgated: SEP 29 2QQ8 ; ~nvvo~ x-----------------------------------------~~--------~------------x DECISIO BAUTISTA,[.: The Case Before Us is a Petition for Reviewl filed pursu ant to Republic Act No. 9282, praying for th e reversal of: 1. th e Order2 d a ted Au gu st 24, 2007 rendered by Branch 114 of the Region al Trial Court of Pasay City ("Court a quo" ) in Civil Case No . 06-1305-CFM, enti tled "ACE HARDWAR E PHI L., 1 Rollo, C.T.A. AC No. 52 (Civil Case N o. 06-1305-CFM), pp . 45 - 144 w ith Annexes. I Zfd., pp. 59- 62, Annex " A" of the Peti tion for Review.

DEC ISION C.T.A. AC No. 52 (Civil Case No. 06- 130.) -C FM) INC., ET. AL. v. THE CITY OF MANILA and THE CITY TREASURER OF MANILA," which ordered herein petitioners, the City of Manila and the City Treasurer, to refund or issue tax credits to herein respondents in the aggregate amount of Php4,271,883.75, representing payment of taxes under Section 21 of the Revenue Code of the City of Manila ("RCM") for the fourth ("41h") quarter of 2004, and the aggregate amount of Php4,717,742.43, representing I overpayment of increased local business taxes under Sections 15, 16, 17, 18, and 19 from the 4th quarter of 2004 to the 4th quarter of 2005, pursuant to the rates imposed by Ordinance Nos. 7988 and 8011; and 2. the Order3 dated February 4, 2008 of the Court a quo which denied herein petitioners' Motion for Reconsideration. Antecedent Facts The facts of the case are as follows: Petitioner City of Manila is a local government unit organized and existing under Republic Act No . 409,4 with address at the Office of the City Mayor, Cily Hall, Manila .s Petitioner Liberty M. Toledo is the duly appointed City Treasurer of Manila, empowered to perform the duties of said office including, among others, I the collection of all local taxes, fees and charges, and the power to decide, 3 Rollo, CT. A. AC No. 52 (Civil Case No. 06-1305-CFM), p. 63, Annex " B" of th e Pe tition for Revie w. 4 Jd., p . 45, Pe titio n for Revie w . 5 Jd., p. 68, Annex " D" o f the Petiti o n for Review. � l\. , ..,

DEC ISION C.T.A. AC No. 52 (Civi l Case No. 06- FM) approve and grant refunds or tax credits of erroneously or excessively paid taxes, with office address at the City Hall of Manila.6 Respondents are domestic corporations organized and existing under Philippine law, with office address at SM Building, Roxas Boulevard Extension, Pasay City. They conduct their business operations within the jurisdiction of the City of Manila? Respondent ACE Hardware Phils., Inc. is primarily engaged in the business of conducting and carrying on a general hardware business, whether wholesale or retaiLS Respondent SM Mart, Inc. is primarily engaged in the business of selling general m erchandise of all kinds on wholesale or retail basis. It also offers the services of a foreign exchange dealer.9 Respondent SM Prime Holdings, Inc. is primarily engaged in thebusiness of developing, operating and maintaining the business of modernized commercial shopping centers.1o Respondent Star Appliances Center, Inc. is primarily engaged in the business of selling, marketing, and buying, whether wholesale or retail, of home and office appliances, electric supplies and equipment, communication devices, hardware, machinery and other allied products, including repair and servicing thereof.ll 6 Rollo, C.T.A . AC No. 52 (Civil Case No. 06-1305-CFM), pp . 68- 69, Annex "D" of the Pe tition for Review . 7 /d., p. 255, Respondents' Mem orandum (Ad Cautelam) . Bfd., p . 69, Annex "D" o f the Pe tit�ion for Review. I 9 Jd. 10 /d ., p . 70. 11 /d.

DECISION C.I.A. AC No. 52 (Civil Case No. 06- 1305-CFM) Respondent Supervalue, Inc. is primarily engaged in the business of conducting, operating and maintaining the business of a modernized supermarket and all business appurtenant thereto, within the compound or premises of its establishment_12 Finally, respondent Watson Personal Care Stores Phils., Inc. is primarily engaged in the merchandising business, both wholesale and retail, of cosmetics, beauty and health products.13 Respondents all pay local business taxes imposed pursuant to the RCM, whkh was enacted through Ordinance No. 7794 dated July 1, 1993, as amended by Ordinance No. 7807 dated September 27, 1993.14 The RCM was subsequently amended by Ordinance No. 7988 dated February 25, 2000 which, in turn, was amended by Ordinance No. 8011 dated February 22, 2001. The amendments introduced by Ordinance Nos. 7988 and 8011 increased the rates of the local business taxes applicable to respondents rmder Sections 15, 16, 17, 18, 19, 23, 24 and 25 of the RCM. In addition, Ordinance No. 7988 amended Section 21 of the RCM by imposing additional business tax on respondents and other taxpayers situated in Manila.15 Accordingly, from the 41h quarter of 2004 to the 41h quarter of 2005, respondents individually paid business taxes to petitioners under Section 21 of RCM, as amended by Ordinance Nos. 7988 and 8011, in the total amount of Php4,271,883.75, broken down as follows}6 I I 12 Rollo, C.T.A. AC No. 52 (Civil Case No. 06-1305-CFM), p. 70, Annex "0" of the Petition for Review. 13 !d., p. 71. 14 /d. , p. 255, Respond ents' Memorandum (Ad Cnutelam). 15 /d ., pp . 255 - 256. 16 /d ., pp . 257- 259. ,' () q

DECISION "FM) C.T.A. AC No. 52 (C ivil Case No. 06- 1" ACE Hardware Phils., Inc. ~148,086.20 SM Mart, Inc. SM Prime Holdings, Inc. 2,434,931.63 Star Appliance Center, Inc. 646,820.88 Supervalue, Inc. 517,811.12 Watson Personal Care Stores Phils., Inc. 417,867.71 106,366.21 TOTAL: ~,271,883.75 In addition, respondents individually paid higher local business taxes under Sections 15, 16, 17, 18, 19~ 23, 24 and 25 of the RCM, from the 41h quarter of 2004 to the 41h quarter of 2005. The following table shows the difference between the old tax rates under the RCM and the new tax rates imposed by Ordinance Nos. 7988 and 8011:17 ACE Hardware Actual Tax Paid Tax Computed Additional Phils., Inc. Under Ord. Nos. Under the prior Tax paid RCM (Ord. Nos. SM Mart, Inc. 7988 and 8011 7794 and 7807) ~162,461.83 SM Prime Holdings, ~509,072. 99 ~346,611.16 Inc. Star Appliance 7,684,915.0,4, ~,107,639 . 94 2,577,275.10 Cen ter, Inc. 15,420,130.85 15,316,706.74 103,424.11 Supervalue, Inc. 1,718,735. 95 1,160,282.34 558,453.61 Wa tson Personal 3,440,936.26 2,327,926.03 1,113,010.23 Care Stores Phils., In c. 734,825 .82 531,708.27 203,117.55 TOTAL: .. ~24,790,874.48 ~,717,742.43 ~29,508 ,6 16.91 All in all, respondents paid additional local business taxes in the aggregate amount of Php4,717,742.43.18 Rollo, (Ai d 11 C.T.A. AC No. 52 (Civil Case No. 06-1305-CFM), pp. 256- 257, Responden ts' Memorandum Cau telam). 18 /d., p. 257.

DEC ISION C.T.A. AC No. 52 (Civil Case No. 06-1 305-CFM) On December 20, 2004, respondents filed with the City Treasurer their individual protests of payments and requests for a tax credit or refund of the business taxes erroneously paid under Section 21 of the RCM for the 4th quarter of 2004. Respondents, however, did not receive any response from the City T r e a s u r e r .19 On various dates from 2004 to 2005, respondents protested the payment of additional local business taxes under Sections 15, 16, 17, 18, 19, 21, 24 and 25 of the RCM, as amended by Ordinance Nos. 7988 and 8011. Respondents likewise filed claims for refund or tax credit of th~ protested amow1ts. The protests and claims for reftmd were filed on the following dates:20 DATE DOCUMENT FILED March 18, 2005 Protest and claim for refund of excess local business taxes paid for the 4th June 15, 2005 quarter of 2004 to the 1st quarter of September 20, 2005 2005. December 16, 2005 Protest and claim for refund of excess local business taxes paid for the 2nd quarter of 2005. Protest and claim for refund of excess local business taxes paid for the 3rd quarter of 2005. Protest and claim for refund of excess local business taxes paid for the 4th quarter of 2005. In separate letters dated April 8, 2005 and June 28, 2005, petitioner City Treasurer denied respondents' protests and claims for refund of excess local business taxes paid from the 4th quarter of 2004 to the 2nd quarter of 2005.21 I A 19 Rollo, C.T .A. AC No. 52 (Civil Case No. 06-1305-CFM), p. 259, Respondents' Memorandum (Ad Cattle/am) . 20 /d ., pp . 259 _ 260. , ld . p 260.

DEC ISION .- FM) C.T.A. AC No. 52 (Civil Case No . 06- 1.. Thereafter, in separate letters dated October 11, 2005 and January 12, 2006, petitioner City Treasurer acknowledged receipt of respondents' letters formally protesting and claiming the refund of excess local business taxes paid in the 3rd and 4th quarters of 2005.22 On October 19, 2006, within the tWo-year statutory period to claim for refund, respondents filed a Complaint23 for refund against the petitioners based on two causes of action. Their first cause of action pertains to the Section 21 taxes they paid pursuant to Ordinance Nos. 7988 and 8011; while their second cause of action concerns the additional local business taxes they paid under Sections 15, 16, 17, 18, 19, 23, 24 and 25 of the RCM, as amended by Ordinances Nos. 7988 and 8011. In the Complaint, respondents prayed for a refund of the Section 21 taxes paid for the 4th quarter of 2004 in the total amount of Php4,271,883.75, and the excess local business taxes paid from the 4th quarter of 2004 to the 4th quarter of 2005 in the total amount of Php4,717,742.43.24 The case was docketed as Civil Case No. 06-1305-CFM, and was raffled to;Branch 114 of the Regional Trial Court of Pasay City. On February 9, 2007, petitioners filed their Answer to the Complaint filed by respondents.2s In their Answer, petitioners admitted the material allegations of the Complaint, in so far as the payments made by respondents, the existence of their protests and claims for refund, and the letters issued by petitioner City Treasurer. Petitioners raised, as an affirmative and special defense, the lack of I cause of action. They argued that the declaration in the case of "Coca-Cola Bottlers 22 Rollo, C.T. A. AC N o. 52 (Civil Case N o. 06-1305-CFM), p . 260, Respond ents' Mem orandum (A d Cautelam) . 23 ld., pp . 67- 101, Annex " D" of the Pe titio n for Review. 24 ld., p. 261 , Respond e nts' Memorandum (Ad Cautelam). 25 fd., p . 47, Petition fo r Revi ew . (. 1 2

DEC ISION C.T.A. AC No. 52 (C ivil Case No. 06- 1305-C FM) Philippines, Inc. v. City of Manila, et. al. "26 is not doch�inal. And assuming that Ordinance Nos. 7988 and 8011 have been declared invalid, petitioners claimed that the assessments of taxes on respondents are still valid, as these are anchored on Ordinance No. 7807. They also interposed that respondents have no personality to claim for a refund because they are mere withholdin.g agents. Petitioners likewise pointed out that there is no double taxation, and that assuming there is, it is still permissible.27 Pursuant to Section 1, Rule 18 of the 1997 Revised Rules of Court ("ROC"), respondents filed an "Ex-Parte Motion to Set Case for Pre-Trial" on March 1, 2007. The Court a quo, however, referred the parties to Mediation in an Order dated June 1, 2007. Since no amicable settlement was reached, a Pre-Trial Conference was held on August 17, 2007. 28 � During the Pre-Trial Conference, the parties and the Court a quo agreed that based on the pleadings filed by the parties, there was no genuine issue as to any material fact of the case, and that the only issue involved is a pure question of law which can be resolved based on the pleadings and the records of the case, without need of h�ial. The Court a quo thus ruled that Summary Judgment was proper, pursuant to Rule 35 of the ROC.29 The Ruling of the Court A Quo On August 24, 2007, Judge Edwin B. Ramizo issued an Order in favor of respondents, ruling that: I 26 G.R. N o. 156252, 493 SCRA 279, June 27, 2006. 27 Rollo, C.T.A. AC No. 52 (Civil Case No. 06-1305-CFM), pp. 102 - 126, Annex "E" of the Petition for Review . 28 Id. , pp . 261- 262, Respond ents' M em orandum (Ad Cnutelam). 29 /d. , p . 60, Annex " A" o f th e Petiti on for Revie w.

DEC ISI ON C. T.A. AC No. 52 (C ivil Case No . 06- 1305-crM) "After a careful and judicious study of the records of the case, this Court finds for the plaintiffs. As early as August 17, 2000, then Department of Justice (DOJ) Secretary Artemio Tuquero issued a Resolution declaring Tax Ordinance No. 7988 null and void and without legal effect. Likewise, Tax Ordinance No. 8011 was declared void by th e DOJ thru then Secretary Hernando Perez in July 2001. The qeparlment of Justice reasoned out that Ordinance No. 8011 is also null and void, being only a mere amendatory ordinance of an already nullified ordinance. Furthermore, the nullity of Ordinance Nos . 7988 and 8011 has been established beyond doubt by the Supreme Court itself in the case of Coca-Cola Bottlers vs. City of Mamla, 493 SCRA 279. Thus, for all intents and purposes, the issue on whether the City of Manila can still use Ordinance Nos. 7988 and 8011 in its tax collections has been clearly settled. WHEREFORE, in view of the foregoing, this Court renders judgment in favor of the plaintiffs and directs the defendants to grant a refund and/ or tax credit: a) to plaintiff Ace Hardware Phils ., Inc. 1. the amount of Php162,461 .83 representing overpayment of increased local business taxes under Sections 15, 16, 17, 18 and 19 of the Revenue Code of the City of Manila for the 41h quarter of 2004 to the 4th quarter of 2005. 2. the amount of Php148,086.20 representing payment of taxes under Section 21 of the Revenue Code of the City of Manila for the 4th quarter of 2004. '' ' b) to plaintiff SM Mart, Inc. 1. the amount of Php2,577,275.10 representing overpayment of increased local business taxes under Sections 15, 16, 17, 18 and 19 of the Revenue Code of the City of Manila for the 4th quarter of 2004 to the 41h quarter of 2005. 2. the amount of Php2,434,931.63 representing payment of taxes w1der Section 21 of the Revenue Code of the City of Manila for the 41h quarter of 2004. c) to plaintiff SM Prime Holdings, Inc. 1. the amount of Php103,424.11 representing overpayment of increased local business taxes under Sections 15, 16, 17, 18 and 19 of the I

DEC ISION C.T.A. AC No . 52 (Civil Case No . 06- 1305-CFM) Reveni.te Code of the City of Manila for the 4th quarter of 2004 to the 4th quarter of 2005. 2. the amount of Php646,820.88 representing payment of taxes under Section 21 of the Revenue Code of the City of Manila for the 4th quarter of 2004. d) to plaintiff Star Appliance Center, Inc. 1. the amount of Php558,453.61 representing overpayment of increased local business taxes under Sections 15, 16, 17, 18 and 19 of the Revenue Code of the City of Manila for the 4th quarter of 2004 to the 4th quarter of 2005. 2. the amount of Php517,811.12 representing payment of taxes under Sec tion 21 of the Revenue Code of the City of Manila for the 4th quarter of 2004. ' e) to plaintiff Supervalue, Inc. 1. the amount of Php1,113,0] 0.23 representing overpayment of increased local business taxes under Sections 15, 16, 17, 18 and 19 of the Revenue Code of the City of Manila for the 4th quarter� of 2004 to the 4th qu arter of 2005. 2. the amow1t of Php417,867.71 representing payment of taxes under Sec tion 21 of the Revenue Code of the City of Manila for the 4th quarter of 2004. f) to plaintiff Watsons Personal Care Stores, Phils. Inc. 1. the amount of Php203,117.55 representing overpayment of increased local business taxes under Sections 15, 16, 17, 18 and 19 of the Revenue Code of the C ity of Manila for the 4th quarter of 2004 to the 4th quarte r of 2005. 2. the amow1t of Php106,366.21 representing payment of ta~es under S~ction 21 of the Revenue Code of the City of Manila for the 4th quarter of 2004. No pronouncement as to costs. SO ORDERED. I �' 1 :;

DEC ISION C. T.A. AC No . 52 (Civil Case No . 06- 1305-CFM) Page II of 26 Pasay City, Metro Manila, August 24, 2007."30 Aggrieved, petitioners filed a Ms>tion for Re<;:onsideration31 on October 1, 2007, which was denied by the Court n quo in its Order dated February 4, 2008 .32 The Issues Hence, the present recourse with petitioners ascribing to the Court a quo the following errors: " i. The Honorable Court a quo gravely erred in entertaining the case despite the fact that it has no jurisdiction over the case. ii. The Honorable Court a quo gravely erred in its failure to dismiss the case despite failure of plaintiffs33 to observe a condition sine qua non before resort to court may be had. iii. The Honorable Court a quo gravely erred in its failure to dismiss the case for plaintiffs' failure to state cause of action. iv. The Honorable Court a quo gravely e rred in its failure to dismiss the case despite violation by plaintiffs of Section 4, Rule 8 of the 1997 Rules of Court. v . The Honorable Court a quo gravely erred in applying the case of Coca-Cola Bottlers Philippines, In c. vs . Ci~f of Manila, Liberty M . Toledo, City Treasurer, and Joseph Santingo, Chief Licensing Division of Manila, docketed as G.R. No. 156252, June 27, 2006." 34 With the filing of the respondents' Memorandum on July 14, 2008 by registered mail, and the petitioners' Memorandum on July 22, 2008, this case was deemed submitted for decision in the Court's Resolution promulgated on August 12, 2008 .35 30 Rollo, C.T.A. AC No. 52 (Civil Case No. 06-1305-CFM), pp . 60 - 62, Annex" A" of the Pe tition for Review . 31 [d ., pp. 128 - 144, Annex " F" of the Pe titi on for Review. 32 fd ., p . 63, Annex "B" of the Pe tition for Review . 33 He rein respond ents. 34 Rollo, C.T.A. AC N o. 52 (Civil Case No. 06-1305-CFM), pp. 49- 50, Pe titi on for Review . 35 /d., p. 295.

C.T.A. AC No. 52 (Civil Case No . 06- 1305-CFM} The Ruling of the Court The Petition for Review is devoid of merit. Based on the Memoranda submitted by the parties, the Court has determined that the following are the issues that have to be resolved: (1) Whe ther or not the Court a quo erred in n o t dismissing the case for failure of the respondents to observe Sections 187 and 195 of the Local Government Code ("LGC" ) before resort to court; (2) Whether or not respondents failed to comply with Section 4, Rule 8 of the ROC; and (3) Whether or not the Coca-Coln case applies to the instant case. Sections 187 and 195 of the Local Government Code do not apply Petitioners insist that the Court a quo has n o jurisdiction over the subject matter of the claims of respondents. They argu e that the allegations of respondents in their Compla:iti.t renders the regular co urts, such as the Court a quo, as having no jurisdiction to hear and d ecide the case. They claim that respondents are barred from filit1g the present action for failure to observe Sections 187 and 195 of the LGC, which provide tha t: "Sec. 187. Procedure for Approval nnd Effectivity of Tax Ordinances and Revenue Measures; Mandatory Public Hea ring. - xxx : Provided, further, That any question on the constitutionality or legality of tax ordinances or revenue meas ures ma y be raised on appeal within thirty (30) days from the effectivity thereof to the Sec retary of Justice who shall render a decision within sixty (60) days from the date of receipt of the appeal: xxx : Provided, finally, That within thirty (30) days after receipt of the decision or the lapse of the sixty-day period without the Secretary of Justice acting upon the appeal, the aggrieved party may file the appropriate proceedings with a court of competen t jurisdiction." "Sec. 195. Protest of AssessmI ent. - When the local treasurer or his duly authorized representative find s that correct taxes, fees, or charges have not been paid, he shall issue a notice of assessment stating I 0 1 '7

DEC IS ION C.T.A. AC No. 52 (Civil Case No. 06- 1305-CFM) the nature of the tax, fee, or charge, the amount of deficiency, the surcharges, interests and penalties. Within sixty (60) days from the receipt of the notice of assessment, the ta xpa yer may file a written protest with the local treasurer contesting the assessment; otherwise, the assessment shall become final 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-day (60) period prescribed herein within which to appeal with the court of competent jurisdiction, otherwise the assessment becomes conclusive and unappealable." Petitioners further contend that since respondents failed to appeal the revenue m easures within 30 days from their enactments, respondents may no longer file a complaint for refund. The Court is not persuaded. An appeal to the Secretary of Justice pursuant to Section 187 of the LGC is not necessary where there is no question on the constitutionality or legality of a tax ordinance or revenue measure.36 In this case, respondents are merely asking for a refund of business taxes erroneously assessed and collected under Ordinance Nos. 7988 and 8011 . Respond ents are not questioning the validity or constitutionality of the subject Ordinances. As a matter of fact, the issue of the constitutionality of Ordinance Nos. 7988 and 8011 has already been resolved in the case of Coca-Cola Bottlers Philippines, Inc. v. City of Manila, Liberty Toledo, et. nl.,37 where the Supreme Court declared the said Ordinances null and void on the ground of failure to comply 36 The Treasurer of th e City of Manila v. Unilever Philippines, Inc., C.T. A. AC No. 28, November 28, 2007; Ci ty of Ma nil a, et. al., v. Columbia Pictures Indus tri es, Inc., C T.A. AC No. 29, August 30, 2007; and Zarcon Development Co rpo rati on v . The City Treas urer of Ma nila, C T. A. AC No. 24, May 16, 2007. 37 Supra, no te 26. I L.. l d

. DECISION C.T.A. AC No. 52 (Ci vil Case No . 06- 1305-CFM) with the publication requirements. As the Court sees it, Section 187 of the LGC does not apply. Anent the argument of petitioners that respondents are estopped from claiming a refund because they failed to protest or appeal the assessment as required in Section 195 of the LGC, the Court finds the same untenable. In A lcan Packaging Starpnck Corporation (formerly Starpack Philippines Corporation) v. The Treasurer of the City of Mnnila,3B it has been held that Section 195 of the LGC pertains to protests on the assessment/ s issued by the local h�easurer against a taxpayer who has been fo und not to have paid its correct taxes, fees, or charges. In other words, the said provision does not apply when the case involves a claim for refund of taxes paid u11der the RCM.39 I I What is applicable in claims for refund is Section 196 of the LGC, which states that: "Sec. 196. Claim for Refund of Tax Credit. No case or proceeding shall be maintained in any co urt for the recovery of any tax, fee, or charge erroneously or illegally collected until a written claim for refund or credit has been filed with the local treasurer. No case or proceeding shall be enter tained in any court after th e expira tion of two (2) years from the date of the payment of such tax, fee, o r charge, or from the date the taxpayer is entitled to a refund or credit." Pursuant to the aforequoted provision, to successfully sue in court for a refund of any local tax, fee, or charge, two things must be done, to wit: 1) the taxpayer concerned must file a written claim for refund or credit with the local h�easurer; and 38 CT.A. AC No. 17 (Civil Case N o. 01-102097), Sep tember 11, 2006. 39 The Treasurer of th e City of Manila v. Uni lever Philippines, Inc., s11prn, note 36; City of Manila, et. al. v. Columbi a Pic tures lndus h�ies, Inc., suprn, note 36; and Liberty M. Toledo, in her ca pacity as The Treasurer of The City of Me1nila v. Unilever Phi lippines, Inc., CT.A. AC No. 21, Me1 y JO, 2007. I ,� 1 ~

DECIS ION C.T.A. AC No. 52 (Civil Case No . 06- 1305-CFM) Page I5 of2 6 2) the case or proceeding for refund has to be filed within two (2) years from the date of the payment of the tax, fee, or charge or from the date the taxpayer is entitled to a refund " .j, ~ or credit.40 In the instant case, respondents complied with both requisites. There is no . dispute that respondents timely filed their protests and claims for refund with petitioner City Treasurer, and their Complaint for refund with the Court a quo.4l Hence, the Court n quo did not err in taking cognizance of this case. Ms. Cecilia R. Patricio is authorized to file the Complaint for Refund Petitioners also allege that Ms. Cecilia R. Patricio has no legal capacity to sue, as respondents failed to state her authority to certify and verify the Complaint filed by respondents, which is a clear violation of Section 4, Rule 8 of the ROC, which provides: "Sec. 4. Capacity. - Facts showing the capacity of a party to sue or be sued or the authority of a party to sue or be sued in a representative capacity or the legal existence of an organized association of persons that is made a party, must be averred . A party desiring to raise an iss ue as to the legal existence of any party or th e capacity of any party to sue or be sued in a representative capacity, shall do so by specific d enial, which shall include such supporting particulars as are peculiarly within the pleader's knowledge." The allegation of petitioners is belied by the Secretary's Certificates attached to the Complaint which expressly state that Ms. Cecilia R. Patricio is "authorized and empowered to ~ct, negotiate, sign, conclude and deliver for and in the name of the Corporation for the filing of a Complaint with the appropriate 40 China Bankin g Corp oration v. City Treasurer of Manila, C.T.A. E.B. No. 182 (RTC Civil Case No. 04- CAuie/"'1 108990), July 27, 2006. "Rollo, c TA AC No. 52 (C/"H C�.e No. 06-1305-CFM), p. 261, R~pondenffi' Memocondum (Ad

DEC ISION C. T.A. AC No. 52 (C ivil Case No. 06-1305-C FM ) court for the refund of taxes paid to the City of Manila from the 41h quarter of 2004 to the 41" quarter of 2005."42 Moreover, as pointed out by respondents, petitioners have already admitted respondents' capacity to sue in their Answer.43 In fact, during the Pre- Trial Conference on August 17, 2007, the parties agreed that there was no genuine issue as to any material fact of the case, as all material facts were admitted by both parties, which include the juridical circumstances of r e s p o n d e n t s . 44 In view of the foregoing, the Court finds Ms. Cecilia R. Patricio duly authorized to sign the Verification and Certificali~n of the Complaint filed by respondents. The Court a quo correctly applied the Coca-Cola case Petitioners are adamant that the declaration of the Supreme Court in the Cocrz-Coln. case has no bearing on this case. They are of the view that the question raised before the Supreme Court relates only to the dismissal of the injunction case filed by Coca-Cola Bottlers Philippines, Inc., and that the ruling of the Supreme Court on the invalidity of Ordinance Nos. 7988 and 8011 was only for the purpose of determining whether the Regional Trial Court of Manila was correct in dismissing the case on the ground that the case was mooted in view of the enactment of Ordinance No. 8011. The contention of petitioners holds no water. 42 Rollo, C.T. A. AC N o. 52 (Ci vil Case N o. 06-1305-CFM), pp . 98 - 101, Annex " D" of th e Petition for Revi ew . 43 fd ., p . 102, Ann ex "E" of the Pe titi on fo r Review . I 44 ld., pp . 261 - 262, Respondents' Memora ndum (Ad Cautelnm). I ' ') 1

DECIS ION CFM) C.T.A. AC No. 52 (Civil Case No . 06 The Supreme Court in the case of Coca-Coln Bottlers Philippines, Inc. v. City of Maniln, et. al.,45 ruled U1a t: "It is undisputed from the facts of the case that Tax Ordinance No. 7988 has already been declared by the DOJ Secretary, in its Order, dated 17 August 2000, as null and void and without lega l effect due to respondents' failure to satisfy the requirement that said ordinance be published for three consecutive days as required by law . Neither is there quibbling on the fact that the said Order of th e DOJ was never appealed by the City of Manila, thus, it had attained finality after the lapse of the pe riod to appeal. Furthermore, the RTC of Manila, Branch 21, in its Decision dated 28 November 2001, reiterated the findings of the DOJ Secretary that respondents fail ed to follow the procedure in th e enactment of ta x measures as mandated by Section 188 of the Local Government Code of 1991, in that they failed to publish Tax Ordinance No. 7988 for three consecutive days in a newspaper of local circulation . From th e 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 Government Code of 1991. Despite the nullity of Tax Ordinance No. 7988, the court a quo, in th e assailed Order, dated 8 May 2002, went on to dismiss pe titioner's case on the force of the enactment of Tax Ordinance No. 8011, amending Tax Ordinance No. 7988. Significantly, said amending ordinance was likew ise d eclared null and void by the DOJ Secretary in a Resolution, dated 5 July 2001, elucidating that '[J]nstead of nme11ding Ordinnnce No. 7988, [herein] respondent should hnve enncted another tax mensure which strictly complies w ith the requirements of law, both procedural and subs tantive. The passage of the assailed ordinauce did not have the effect of curing the defects of Ordiuance No. 7988 which, any way, does not legally exist.' Said Resolution of the DOJ Secretary had, as well, attained finality by v irtue of th e dismissal with finality by this Cour t of respondents' Petition for Review on Certiorari in G.R. No. 157490 assailing the dismissal by th e RTC of Manila, Branch 17, of its appeal due to lack of jurisdiction in its Order, dated 11 August 2003. Based on the foregoing, this Court must reverse the Order of the RTC of Manila, Branch 21, dismissing petitioner's case as there is no basis in law for such dismissal. The amen~Hng law, having been declared as null and void, in legal contemplation, therefo re, does not exist. Furthermore, even if Tax Ordinance No. 8011 was not d eclared null and void, the trial court should not have dismissed the case on the reason that said tax ordinance had already amended Ta x Ordinance No. 7988. As held by this Court in the case of People v. Lim, if an order or law 45 Supra, no te 26. I . ') ')

DEC ISION C.T.A. AC No. 52 (Civil Case No. 06- 1305-CFM) so u ght to be amend ed is inv alid, then it d oes n o t legally ex ist, there sho uld be n o occasion or need to amend it." Clearly, the Coca-Cola case did not m erely address the procedural issues, but disp osed of the case on the m erits, i.e. , on the substantive grounds. It bears s tressing that the Suprem e Court has th e las t word on what the law is; it is the final arbiter of any justifia ble controversy. Simply put, there is only on e Supreme Court from whose decisions all other courts should take their bearings.46 H ence, under the d octrine of stare decisis, the Court must apply the Coca-Cola case to the case a t bar. According to resp ondents, prior to the amendments introduced by Ordinance Nos. 7988 and 8011, they were not liable for the Section 21 tax due to a qualifying provision, to w it: "PROVIDED, th at ail regis tered businesses in the Ci ty of Manila that are alread y p aying th e a forementioned tax sh all be exempted fro m paym ent thereof." This p rovision however w as d ele ted by O rdinance N os. 7988 and 8011. As a result, resp ondents were made liable to pay the Sec tion 21 tax of the RCM, in addition to the increased ra tes of local business taxes under Sections 15, 16, 17, 18, 19, 23, 24 and 25 of the RCM, likewise inh�oduced by Ordinance Nos. 7988 and 8011. In view of the nullification of Ordinance Nos. 7988 and 8011 by the Suprem e Court, it is only just and prop er that resp ondents be granted a refund no t only of the additional local taxes under Section s 15, 16, 17, 18, 19, 23, 24 and 25, but also of the Section 21 taxes p aid�by them . 46 Commissio ner of Interna l Reven ue v. Michel ]. Lhuillier Paw nshop, Inc., G.R. No. 150947, 406 SCRA 178, Ju ly 15, 2003 . I

DEC ISION C.T.A. AC No. 52 (Civi l Case No . 06-1 305-C FM) Page 19of 26 The reasoning of petitioners that even if Ordinances Nos. 7988 and 8011 have been d eclared null and void, respondents are still not entitled to a refund under Section 21 because they would sgll be liable ~.mder Sectio n 21 of the RCM, as amended b y Ordinance No. 7807, mus t also fail. Section 21 of the RCM, as a mended by Ordinance No. 7807, states that: "SEC. 21. Tax on Businesses Subject to the Excise, Va lue Added or Percen tnge Taxes Under the NIR C - On any o f the following businesses and articles of commerce subject to the excise, value-added or percentage ta xes und er the National Inte rnal Revenue Code hereinafter referred to as NIRC as amended, a tax of FIFTY PERCENT (50%) OF ONE PERCENT (1 %) per annum on the gross sales or receipts of the preceding calendar year is hereby imposed : A) On persons who sell good s and services in the course of trade or business; and th ose who import goods w he ther for business or o therwise, as provided for in Sections 100 to 103 of the NIRC as administered and determined by the Bureau of Internal Revenue pursuant to the pertinent p rov isions of the said Code. B) On the gross receipts of keepers of ga rages, cars for rent or hire driven by the lessee, transportati on contra ctors, persons who trans por t passenger or freight for hire, and common carriers by land, air or water, except owners of bancas and ow ners of animal-drawn two- wheel vehicle. C) On the amount paid on every overseas dispatch, message or conversation b�ansmitted from the Philippines by telephone, telegraph, telewriter exchan ge, wireless and o th er communication equipment services, except amounts paid by th e govern ment, its political subdivisions or instrumentalities; diplo matic services; public international organizations or any of th eir agencies based in the 1 Philippines; and news services. The tax sh all be payable by the person pa yin g for the services rendered and shall be paid to the person rendering the services who is req uired to collect and pay the tax wi thin tw en ty (20) days after the end of each quarter. D) Excisable gQods subject to VAT (1) Distilled spirits (2) Wines

DECIS ION I C.T.A AC No. 52 (Civil Case No . 06-111" -CFM) (3) Tobacco products (other than cigarettes, cigars and chewing tobacco) (4) Tobacco specially prepared for chewing (5) Fireworks (6) Cinematographic films (7) Saccharine (8) Coal and coke (9) Fermented liquor, brewer's wholesale price, excluding the ad valorem tax (10) Automobiles, manufacturers or importers selling price (11) Non-essential'goods based ~n wholesale price, net of excise tax and VAT (a) Jewelry, whe ther rea l and imitation. pearls, precious and semi-precious stones and imitations thereof; goods made of, or ornamented, mounted or fitted with precious metals 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 me tals used in filling, mounting or fitting of the tee th .) (b) Perfumes and toile t 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 subject to VAT (1) Naphtha when used as raw materials for production of petro-chemical products. I ' ') :~

DECISION C.T.A. AC No . 52 (Civil Case No. 06-1305-C FM) Page 21 of26 (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." Sections 15, 16, 17, 18, 19, 23, 24 and 25 of the same Code, on the other I hand read: "Sec. 15. Tax 011 Wholesalers, Distributors, or Dealers. - TI1ere is hereby imposed a graduated tax on wholesalers, distributors or dealers in any article of commerce of whatever kind or nature in accordance with the following schedule: XXX XXX xxx" "Sec. 16. Tax 011 Essential Commodities. - A percentage tax at the rate of one half (1/2) of the rates prescribed under Sections 14, 15, and 17 is hereby imposed on exporters, and on manufacturers, millers, producers, wholesalers, distributors, dealers or retailers of essential commodities enumerated hereunder: (1) Rice and corn; (2) Wheat or cassava flour, meat, dairy products, locally manufactured, processed, or preserved food, sugar, salt and other agricultural, marine, and fresh water products. whether in their original state or not; (3) Cooking oil and cooking gas; (4) Laundry soap, detergents, and medicine; (5) Agricultural implements, equipment and post harvest facilities, fertilizers, pesticides, insecticides, herbicides and other farm inputs; (6) Poultry feeds and other animal feeds; (7) School supplies; and (8) Cement." "Sec. 17. Tax on Retailers . - There is hereby imposed a graduated tax on Retailers in accordance with the following schedule: XXX XXX xxx" ,� '/ Fl

C.T.A. AC No. 52 (C ivil Case No. 06- 1305-CFM) Page 22 o f 26 "Sec. 18. Tax on Contractors. - A percentage tax is hereby imposed on contractors and other independent contractors, in accordance with the following schedule: XXX XXX xxx" "Sec. 19. Tax on Banks, lnsumnce Companies and Other Financirzl Instihltions - A percentage tax is hereby imposed on banks, insurance companies and other financial institutions, at the rate of TWENTY PERCENT (20 %) OF ONE PERCENT (1 %) on the gross receipts from all sources of the preceding calendar year derived from interests, commissions and discounts from lending activities, income from financial leasing, dividends, rentals on property and profit from exchange or sale of property and other investments. However, on premiums received by insurance companies a flat rate of eleven percent (11 %) of one pe rcent (1 %) is hereby imposed." "Sec. 23. Ca terer's Tax - On gross receipts of proprietors and opera tors of cafes, cafeterias, ice cream and o ther refreshments p arl ors, restaurants, soda fountains, carinderias or food ca terers including clubs and caterers, an annual ta x on the gross sales or receipts of the preceding calendar year is hereby imposed as fo llows, from: 1. The sale of food, soft drinks or refreshm ent at one pe rcent (1 %); 2. The sale of beer, wines and other liquor at three pe rcent (3 %); 3. The sale of cigarettes and other tobacco products at three percent (3% ). On n ewly established business, a tax of one- half (1 / 2) of one percent (1 %) of the capital inves tment is hereby imposed." "Sec. 24. Tax on Real Estate Developers, Deniers and Lessors - On real es tate developers d ealers, lesso rs or sub-lessors of real estate including accessorias, apartels, pension inns, apartments, condominia, houses for lease, rooms and spaces for rent, a tax of SEVENTY FIVE PERCENT (75% ) OF ONE PERCENT (1 %) per annum on the gross receipts for the preceding calendar year is he reby imposed. For newly started business, the initial tax s hall be one-half (1 /2) of one percent (1 %) of the capital investment." "Sec. 25. Trzx on Private""ly-Owned Pub! lic Mrzrke ts and Shopping Centers - Th e re is he reby imposed a tax of TWO PERCENT (2 %) on the gross rece ipts for the preceding calendar year on owners or operators of pri vately-ow ned public markets and shopping cente rs. .,. ')

DECISION C.T.A. AC No . 52 (Ci vil Case No . 06-1305-CFM) Page 23 of26 For newly started pri va tely-owned public markets and shopping centers th e tax shall be one-half (1 /2) of one percent (1 %) of the capital inves tm en t." These provisions were enacted by the City Council of Manila pursuant to Sections 151 and 143 of the LGC, which declare that: "Sec. 151. Scope of Tax ing Powers. - Except as otherwise provided in this Code, the City ma y levy taxes, fees, and charges which th e province or municipality may impose:. XXX XXX XXX "Sec. 143. Tax on Business. The municipality may impose ta xes on the foll owing businesses: XXX XXX XXX (b) On wholesalers, distributors, or d ea le rs in any article of commerce of whatever kind or nature (c) On exporters, and on manufac ture rs, millers, producers, wholesalers, distributors, dealers or re taile rs of essential comm oditi es xxx (d) On re tailers, xxx (e) On contractors and o ther independent contra ctors, XXX (f) On banks and other financial ins titutions, xxx XXX XXX XXX (h) On any business, n ot o therw ise specified in the preceding paragraphs! which the sanggunian concerned may d eem proper to tax: Provided, That on any business subject to the excise, value- added or percentage tax under the National Internal Revenue Code, as amend ed , the rate of tax shall not exceed two pe rcent (2 %) of gross sales or receipts of th e preceding ca lendar yea r. The sanggunian concerned m ay prescribe a schedule of grad ua ted ta x rates but in n o case to exceed the ra tes prescribed herein." From the for egoing, it is apparent that Sections 15, 16, 17, 18 and 19 of the RCM are co unterpart provisions of Sections 143 (b), (c), (d), (e) and (f) of the I

C.T.A. AC No . 52 (Civil Case No. 06- 1305-CFM) LGC, respectively. While Sections 23, 24, and 25 of the RCM are based on Section 143 (e) of the LGC, _which imposes a tax on contractors, defined in Section 4 (h) of the RCM as: "h) 'Contractor' - includes persons, natural or juridical, not subject to professional tax under Section 11 of this ordinance, whose activity consists essentially of the sale of all kinds of services for a fee, regardless of whether or not the performance of the service calls for the exercise or use of the physical or mental faculties of such contractor or his employees. As used in this Section, the term 'con tractor' shall include arrastre proprietors or operators; barber shops, battery charging establishments proprietors or operators; beauty parlors, bookbinders, business agents, cinematographic film owners, lessors and distributors, commercial brokers, demolition and salvage works, detective and watchman agencies, dockyards proprietors or operators, dress shops, dry cleaning or dyeing establishments, engraving establishments, filling contractor, forwarding establishments, funeral parlors, furniture shops proprietors or operators, general building, general engineering and specialty contractors, greasing and washing of motor vehicles, hatters, heavy equipment proprietors or operators, hotels, motels proprietors or operators, house and sign painters, immigration brokers, installations of water system and gas or electric light, heat or power; _ lithographers, lodging houses proprietors or operators, massage clinics, sauna, turkish and swedish baths, master plumbers, milliners, mine drilling apparatus proprietors or operators, parking lots proprietors or operators, photographic studios, planning or surfacing and recutting of lumber, plastic lamination, plating establishments, printers, publishers, except those engaged in the publication or printing of any newspaper, magazine, review, or bulletin which appears at regular intervals with fixed prices for subscription and sale and which is not devoted principally to the publication of advertisements; repair shops for the repair of: any kind of mechanical and electrical devices, insh�uments, apparatus, sawmills under contract to saw or cut logs belonging to others; shoe repairing by machines or any mechanical contrivance; slenderizing and body building saloons and similar establishments, smelting plants, smiths, stevedoring, tailors shops, upholstering shops proprietors or operators, vulcanizing shops proprietors or operators, warehousing proprietors or operators." In a number of instances, this Court has already ruled that businesses taxed under Sections 14, 15, 17, 18 and 24 of the RCM can no longer be taxed I f ":'- /... 9

DEC ISION C FM ) C.T.A. AC No. 52 (Civil Case No. 06� under Section 21 thereo�. 47 TI1e underlying reason for this ruling is Section 143 (h) of the LGC, which requires that the busii1ess tax that may be imposed on "any business" must not be otherwise specified in the preceding paragraphs. Under this provision, the city shall only impose a ta x in either one of the paragraphs but not both.48 Following these precedents and pursuant to Section 143 (h) of the LGC, petitioners are proscribed from taxing respondents under Section 21 of the RCM, as respondents have already paid their respective local business taxes under Sections 15, 16, 17, 18, 19, 23, 24 and 25 of the same Code. To do so would constitute double taxation, which means taxing the same person twice by the same jurisdiction for the same thing.49 All told, the Court finds no reason to reverse the ruling of the Court a quo. WHEREFORE, the Petition for Review is hereby DENIED for lack of merit. The Orders dated August 24, 2007 and February 4, 2008 rendered in Civil Case No. 06-1305-CFM are hereby AFFIRMED. SO ORDERED. 47 Liberty M. To led o a nd the City of Manila v. Me tro Ma nil a Sho pping Mecca, e t. al., C.T.A. AC No. 36, May 9, 2008; The Treasurer of the City of Ma nila v. Unilever Philippines, Inc., s11pra, at no te 36; Unilever Philippines, Inc. v. The Treasurer of the City of Manila, C.T.A. AC No. 25, June 18, 2007; Zarcon Develo pment Co rp. v. The City Treasurer of the City of Ma nil a, s11pra, a t no te 36; Liberty M. Toledo, in her capacity as the Treasurer of th e City of Manila vs. Unilever Philippines, Inc., C.T.A. AC N o. 21, May 10, 2007; Swedish Ma tch Philippines, Inc. v . The Treasurer of the City of Manila, C.T.A. AC No. 15, July 21, 2006; and Interna tio nal Container Terminal Services v . The City of Manil a, e t al., C.T.A. AC N o. 11, May 17, 2006. 48 City of Manila, e t. aJ. v . Columbia Pictures Industri es, Inc., s11pra, note 36, (Civil Case No . 02-102663), Augus t 30, 2007. 49 Commissioner of Internal Revenu e v . Solidbank Corporation, G. R. No. 148191, 416 SCRA 436, November 25, 2003 . ~ jO

C.T.A. AC No. 52 (Civil Case No . 06- 1305-CFM) WE CONCUR: L \A_ . c~ ERNESTO D. ACOSTA Presiding Justice ~ CAESAR A. CASANOVA Associate Justice CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision were reach ed 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. c__.~.C1___ ERNESTO D. ACOStA Presiding Justice Chairperson, First Division Court ofTax Appeals Library