MINDANAO SHOPPING DESTINATION CORP., ACE HARDWARE PHILIPPINES, INC., INTERNATIONAL TOY WORLD, INC., STAR APPLIANCE CENTER INC., SUPERVALUE, INC., SURPLUS MARKETING CORP., and WATSONS PERSONAL CARE STORES (Phils.), INC. v. DAVAO CITY and RODRIGO S. RIOLA in his capacity as the City Treasurer of Davao City

REPUBLIC OF THE PHILIPPINES COURT OFTAX APPEALS QUEZON CITY THIRD DIVISION MINDANAO SHOPPING DESTINATION CORP., ACE IIARDWARE PHILIPPINES, INC., INTERNATIONAL TOY WORLD, INC., STAR APPLIANCE CENTER, INC., SUPERVALUE, INC., SURPLUS MARKETING CORP., and WATSONS PERSONAL CARE STORES (PHILIPPINES), INC., Pet iti oners, CTAAC NO. 62 -versus- Members: BAUTISTA, Chairperson PALANCA-ENRIQLJEZ, and COTANGCO-MANALASTAS, JJ DAVAO CITY and RODRIGO S. RIOLA, Promulgated: in his capacity as the City Treasure�� of Davao City, .JAN 2 1 2011 Respondents. vPff~ //.".3.TOt.--� X- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X DECISION COTANGCO-MANALASTAS, ./. : TilE CASE This case is a Petition for Review fi led on November 3, 2009, under Section 11 of Republic Act No. 1125 (R.A.11 25), as amended by Section 9 (~f R.A. No. 9282. and Sectio n 3(a), Rule 8 (~f the 2005 Revised Rules of the Court qf Tax Appeals !__-

DECISION Page 2 of3-1 CTA AC No. 62 Mindanao Shopping Destination Corp., et.a!. vs Davao City and Rodrigo S. Rio/a, in his capacity as the City Treasurer ofDavao City (RRCTA) , praying that the Deci sion 1 dated Jul y 14, 2009 and the Order 2 dated September 4, 2009 rendered by the Regional Trial Court of Davao City, Branch 17 (RTC-Branch 17) be reversed and set aside; and for thi s Court to render a judgment ordering the respondents to refund or issue a tax credit in favor of petitioners in the total amount ofP39,040,737.74, broken down as follows: Petitioners Amount Mindanao Shopping Destination Corp. _ Php18,893 ,128.14 - Php2,323,55 1.96 Ace Hardware Philippines, Inc. - - - -� International Toy World , Inc. Php918 ,126.39 Star Appliance Center, Inc.- - - - - - - Php3 ,83 8,823.57 Supervalue, Inc. - Surplus Marketing Corp. - - Php 11 ,030,711.88 Wa~o n s ~erson~Care_�toresjp hi_!i_ppin e0 , Inc . _Rhp655 ,125.53 -- - Php 1,3 81 ,25 0.23 The di spositive portions of the assailed Decision and Resolution are reproduced hereunder: Decision dated July 14, 2009: "WHEREFORE, finding [sic] after careful and painstaking review and evaluation of the evidence, pleadings and arguments of parties and counsels, arriving in a clear and convincing diversity of deci sion , through a fair and judicious di stribution of justice, the com1, inevitably orders, the dismissal of the complaint of plaintiffs against the defendant City Government of Davao, dec laring the present action for refund of plaintiffs, [sic] premature, without first waiting for the dec ision and/or reso lution of the Court of Appeals, docketed as CA- G.R. 101482. SO ORDERED." Order dated September 4, 2009: "Accordingly, finding the Motion for Reconsideration of plaintiff through counsel, dev iod [sic] of any legal and factua l merit, moreover pro-forma and likewise pre-mature, is ordered DEN IED. [sic] �.--- SO ORDERED." 1 Rollo, pp. 66-76 7. Rollo, p. 77

DECISION Page 3 of311 CTA AC No. 62 Mindanao Shopping Destination Corp. , et.a!. vs Davao City and Rodrigo S. Riolo, in his capacity as the City Treasurer of Davao City TilE PARTIES Petitioners (also collectively referred to as the "SM Group of Companies") are corporations organized and ex isting under and by virtue of the laws of the Philippines. 3 They are also retail ers who co nduct business operations at SM City Davao, Quimpo Boul evard corner Tulip Drive, Ecoland Subdivision, Matina, Davao City, w ithin the territorial jurisdiction of respondent City. 4 Respondent Davao City is a local gove rnment unit (LGU) created by law. Respondent Rodri go S. Ri ola was impleaded in hi s capacity as Treasurer of respo ndent Davao City. Under Section 170 of the Local Government Code (LGC), the respondent Treasurer is responsible for the collection of respondent Davao City's local business taxes. 5 TilE FACTS The case stemmed from the following facts: Prior to and during 2005 , respondents imposed and collected local business taxes against retail ers conducting business operations within Davao City, such as petitioners, on the basis of Section 1(d) in relati on to Section 1(b), Article 5, Chapter 3 of the respondent Davao City's Ordinance No. 23 0, Seri es of 1991 , as amended by City Ordinance No. 20 18, Series of 1994 (the "Old Tax Ordinance" ).6 The form er ordinance is the main ordinance being impl emented, the latter being a mere f_--- amendment thereto. 3 RTC Rollo, pp. 329-335, Stipul ation of Facts, Minutes of Preliminary Conference, April 2 1, 2009 4 Ad mitted by respondents, Rollo, p. 95 , par. 2 Ann ex 0 of the Petition for Review, Answer/Commen t to Comp laint/Appeal. 5 Supra. 6 Adm itted by responde nts, Rollo, p. 95, par. 3 Annex 0 of the Petition fo r Review, Answer/Comm ent to Comp laint/Appeal.

DECISION Page t1 of3t1 CTA AC No. 62 Mindanao Shopping Destination C01p. , et.al. vs Davao City and Rodrigo S. Rio!a, in his capacity as the City Treasurer ofDavao City Specifically, under Section I(d) in relation to Section I (b), Article 5, Chapter 3 of the Old Tax Ordinance, the rate of local business tax applicable to, and which respondents used in co ll ecting from retailers, such as petitioners, with gross receipts or sales for the preceding calendar year in excess of P2,000,000.00 was fifty percent (5 0%) of one percent ( 1%) of such gross receipts or sales .7 Respondents considered petitioners as retail ers under the Old Tax Ordinance. 8 From 2002 until 2005 , each petitioners' gross receipts or sales for each year covered by that period exceeded P2,000,000.00. Thus, the local business tax rate applicable to and imposed by respondents on the petitioners durin g said period was 50% of 1% of the ir respecti ve gross receipts or sales for the preceding calendar yearY Beginning calendar year of 2006 and the 1st, 211d, and 3rd quarters of 2007, respondents began imposing and co llecting local business taxes against retailers conducting business operations within Davao City, using the rates prescribed under Section 69(d), Article 10 of the respondent C ity's Ordinance No . 158-05, seri es of 2005 , otherwise known as "The 2005 Revenue Code ofthe City ofDavao" (the "Nevv Tax Ordinance").10 According to respondents, the impositi on and co ll ection of the new tax rates on local business taxes by the C ity Government against retailers, such V as petitioners, were made only upon effectivity of City Ordinance o. 158-05 .11 "~ Admitted by respondents, Rollo, p. 95, par. 4 Annex D of the Petition for Rev iew, Answer/Comment to Co mplaint/Appeal. 8 Admitted by respondents, Rollo, p. 95 , par. t1 Annex D of th e Petition for Review, Answer/Co mm ent to Compl aint/Appea l. 9 Adm itted by respond ents, Rollo, p. 95, par. 6 Annex D of th e Petition for Rev iew, Answer/Com ment to Co mplaint/Appea l. 10 Admitted by respond en ts with qualification , Rollo, p. 95 , par. 7 An nex D of the Petiti on for Review, Answer/Comment to Comp laint/Appeal. 11 Supra.

DECISION Page 5 of Y I CTA AC No . 62 Mindanao Shopping Destination Corp., et.al. vs Davao City and Rodrigo S. Rio/a, in his capacity as the City Treasurer of Davao City The New Tax Ordinance was approved by the Mayo r of Davao City on December 2, 2005. However, said ordinance was publi shed onl y on December 23 , 24, and 25, 2005 in the Mindanao Mercury Times. 12 The New Tax Ordinance was meant to amend and supersede the Old Tax Ordinance , including the latter' s rates for local business taxes. Patiicularly, under Secti on 69(d), Articl e 10 of the Ne�w Tax Ordinance , the local business tax rate which respondents used in co llecting fro m retail ers with gross receipts or sales for the preceding calendar year in excess of P400,000.00 is 1Yz% of such gross receipts or sales. 13 Petiti oners claim that: the new rate imposed by respondents under Secti on 69(d) of Arti cle 10 of the New Tax Ordinance is a 200% increase from the local business tax rate that was then being imposed by the respondents under Section 1(d) in relation to Section l (b), Article 5, Chapter 3 of the Old Tax Ordinance; and the said New Tax Ordinance lowered the gross receipts threshold from P2,000,000.00 (prov ided under the Old Tax Ordinance) to P4 00 ,000 . 00 . 1 ~ However, above asserti ons were deni ed by respondents, they contend that under the New Tax Ordinance , wholesalers, distributors, dealers are classifi ed into one class and treated under Secti on 69(d) thereof, subj ecting, among others, those with gross sa les in excess of P2,000,000.00 to a tax rate of fi fty- fi ve percent (55%) of one percent ( 1%) on such gross sales, whil e retail ers are cl ass ifi ed and treated under L-- Secti on 69(d), subj ecting, among others, those with gross sales/receipts in excess of 12 RTC Rollo, p. 3311, St ipul ation of Facts, M inute s of Prel imina ry Co nfe rence, Ap ril 2 1, 2009 ; pp. 659-66 1, Exhi bits " KK", " LL", " MM ", M ind a nao Mercu ry T imes. 13 Ad m itted by respondents, Rollo, p. 95 , par. 8 Ann ex D of the Petiti on fo r Rev iew, Answer/Co mm e nt to Compl ai nt/Appea l. 14 Rollo, p . 309, pars. 14 & 15, petitioners' M e morand um

DECISION Page 6 of311 CIA AC No. 62 Mindanao Shopping Destination Corp., et. al. vs Davao City and Rodrigo S. Rio/a, in his capacity as the City Treasurer of Davao City P400 ,000.00 to a tax rate of 1% of such gross sales/receipts. 15 Respondents insist that the recl assifi cation contained under the New Tax Ordinance is pursuant to the ex isting classification provided under Secti on 143 (pars. b & d) of R .A. 71 60, otherw ise known as the Local Government Code of 199 1 (LGC) . Previous to the amendment, the old Davao City Ordinance No . 23 0, Seri es of 199 1, erroneously classifi ed the above taxpaye rs into one and the same taxpayers, subject to the same tax rate. In October 2006 , respondent Davao City enacted Ordinance No . 253 , Seri es of 2006, otherw ise known as "An Ordinance Amending The Provision of Section 69, paragraph (d) of Davao City Ordinance No. 158-05, Seri es of 2005". Thereafter, in February 2007 , respondent Davao City enacted Ordinance No . 326-07, Seri es of2007, otherw ise known as "An Ord inance Further A mending Ordin ance No . 253-06, an Ordinance A mending the provision of Section 69, paragraph (d) of Davao City Ordinance No. 158-05 , Series of 2005 " .16 Davao City Ordinance o. 253, Series of 2006 was not publi shed in any newspaper in Davao C ity. 17 The tax rate of 1114% under the Amendatory Ordinances was applied beginning the 4111 quarter of 2007. 18 Respo ndents considered petiti oners as retail ers under the Ne"~>v Tax Ordinance and under Davao City Ordinance No . 253-06 and Ordinance No. 326-07 (latter two ordinances co ll ecti ve ly referred to as "A mendatoly Ordinances" ). 19 For the years 2005, 2006, and 2007, each petiti oners' gross receipts exceeded � P40 0 ,000 .00 .2 For all th e quarters of 2006 and for th e 15 211d, and 3rd quarters of \ V 2007, the local business tax rate whi ch respondents imposed upon petiti oners is 1W% '' Rollo, pp . l -3 respondents' M emorandum 16 Ad m itted by res po nd ents, Rollo, p. 97, par. I 0 A nn ex D of th e Petiti on fo r Rev iew, Answer/Com me nt to Com pl ai nt/Appea l. 17 RTC Rollo, p. 662-678, Letter dated March 20, 2009, Exhib it " NN" 18 RTC Rollo, p. 3311 , St ipul ation of Facts, Minutes of Pre li mi nary Co nference , Apri l 2 1, 2009. 19 Ad mitted by responde nts, Rollo, p. 97, par. II An nex 0 of th e Petiti o n fo r Review, An swe r/Co mm ent to Comp la int/Appea l. 20 Supra, Note 17.

DECISION Page 7 of3t1 CIA AC No. 62 Mindanao Shopping Destination Cotp., et.a/. vs Davao City and Rodrigo S. Riola, in his capacity as the City Treasurer ofDavao City of their gross rece ipts, as set forth in the Nevv Tax Ordinance? 1 For the 4111 quarter of 2007 , respondents imposed on the petitioners local business taxes at the rate of 1'14% of their gross receipts, as set forth in the Amendatory Ordinances. 22 Tabu lar summ ary23 of the rates, threshold amounts, and appli cable periods of the Old, New, and Amendatory Ordinances as di scussed above: Tax Ordinance Rate Threshold Applicable Period Old Tax Ordinance Amount ~ P2, 000 ,000.00 2 00 2-2 00 5 12 400 ,000 .00 400 ,000 .00 2006 to 1st 3rd Quarters of New T-ax Ordinance - 1 y2 2007 - - 1-------- 41h Quarter of 2007 A mendatory Ordinances _ 1'14 - Petition e rs' a ll eged in their M e mora ndum 2 that: tl (a) the sum ofthe local business taxes they paid to respondent Davao City for the years 2006 and 2007 (pursuant to the New Tax Ordinance and Amendatmy Ordinances) are as follows: Petitioners Amount Mindanao Shopping Destination Corp. !!28,692,930.33 _!,.ce Hard_ware ~hilippines , Inc. - 3,537,372. 88 -- --- _Inte1pational Toy World, l~c. - - 1,406,289.1 5 - 5, 834,99 0.0 4 Star_Appliance Center, Inc. - -- - - ~p e.�_valu e , Inc. - - - 16,756 ,771.05 Surplu ~ ~arketing Corp. -- 1,007 ,177.04 ~atsons Personal Care Store~ (~~i lippines) , Inc. 2, 13 5,182. 89 Total --- - - - P59,370,713.38 - - (b) and, if the rates prescribed under the Old Tax Ordinance had been applied by respondents, petitioners wo uld have paid only the following amounts as local business taxes to respondent Davao City: ~ 21 Supra, Note 17 22 Supra, No te 17. 23 Rollo, p. 3 12, petitioners' Memorandum 24 Rollo, pp . 3 12-3 16

DECISION Page 8 ofY1 CIA AC No. 62 Mindanao Shopping Destination Corp., et.al. vs Davao City and Rodrigo S. Rio/a, in his capacity as the City Treasurer of Davao City Petitioners Amount - ~ Mindana~Shopping Destination Corp. - - - P9,799,827.19 - bee HardwCL!:e Philippi1~s, Inc. - - 1,2 13,775.88 --- International Toy World~ ln.�___ -- 488 ,162.76 Star Appliance Center, Inc. - -- 1,996 , 166.4 7 5,726,059J 7 Supervalue, I12_c. - -- -- - 352,051.51 Surplus Marketing Corp. - - -- 753 ,932.66 Watsons Personal Care Stores (Philippines), Inc. Total -- - 1!20,329,975.64 - -- Accordingly, the difference between (a) , the amoLmts paid based on the tax base and rate under the New Tax Ordinance and the Amendatory Ordinances, on the one hand, and (b), the an1ounts petitioners would have paid using the tax base and rate under the Old Tax Ordinance, on the other hand, amount to a total of l!39,040,737.74, broken down as fo ll ows: Petitioners T a:x under N ew Ta:x under Old Ta:x under Old Tax Mindanao Shopping and A m endatory Tax Ordinance Ordinance Destination Corp. Tax Ordinances Ace Hardware Philippines, - -�------�-���---��-�------ Inc. ~28 , 692 ,93 0. 33 ~9 , 799 , 827 . 19 ~18 , 893 , 128.14[sicf5 3,537,372. 88 1,2 13,775.88 2,3 23 ,597.00 488 ,162.76 International Toy Wo rl d, Inc. I ,406,2 89.15 918 , 126 .39 1,9 96 , 166.47 Star Appliance Center, Inc. 5,834,990.04 5,726,059.17 3,838,823 .57 Supervalue, Inc. 16 ,756 ,771.05 352,051.51 11 ,030- ,71- 1.88 -- -- - - Surplus Marketing Corp. 1,007 , 177 .0- 4 - 655 ,125 .53 1--- - - -- -- Watsons Personal Care Stores (Phi lippines), Inc. 2, 135,182. 89 753,932.66 1,3 81 ,25 0.23 59,370,713 .38 20,329,975.64 P39 ,040 ,73 7.7 4 T otal As legitimate retailers affected by the new tax rates mandated under the New Tax Ordinance brought about by the reclassification, petitioners assailed the validity of the said ordinance by filing an appeal before the Department of .J ustice (DO.J) on January 24, 2006 , which appeal was docketed as MTO-DOJ Case No. 02-2006. f--- Petitioners insisted that the above-specified newly adjusted tax rates under the 25 Figure shou 1d be P18,893, 103. 111 . The right computat ion is as follows , P28,692,930.33 minus P9,799,827.19 is equi valent to Pl8,893 , 103.14.

DECISION Page 9 of311 CTA AC No. 62 Mindanao Shopping Destination Cmp. , et.al. vs Davao City and Rodrigo S. Rio/a, in his capacity as the City Treasurer of Davao City questioned ordinance are excessive, oppress ive, ill egal, confi scatory, in restraint of trade, contrary to the Constitution, and viol ates Section 19 1 of the LGC, and that said ordinance is ineffecti ve for non-compli ance with the mandatory publication requirement under Secti on 187 of the LGC . On Jul y 12, 2006, the Department of Justice came out w ith a Resolution di smi ssing the appeal. Petitioners' Moti on for Reconsideration of the said resoluti on was likewise deni ed ? 6 Agg ri eved by the DOJ' s reso luti on, petiti oners fil ed an appeal to the Offi ce of the Pres ident, w hi ch appeal was docketed as O.P. Case No. 06-L-425. The said appeal and petiti oner' s Moti on fo r Reconsideration we re both deni ed. 27 Thi s prompted the petiti oners to elevate the case to the Court of Appeals pursuant to Rule 43 of the Rul es of Court, docketed as CA-G.R . 101482 (the "CA Case"). The CA Case was fil ed on December 5, 2007 and its reso luti on still pending.28 In the meantime, pursuant to Secti on 196 of the LGC, petiti oners fil ed w ith the respondent Treasurer individual claim s for refund of the amounts they paid to respondents under the increased tax rate of 1WYo set forth in the New Tax Ordinance fo r 2006 and th e 15\ 211d, and 3rd quarters of 2007 , and the increased rate of 1'14% set forth in the A mendatory Ordinances fo r the 4th quarter of 2007. Respondent Treasurer deni ed petitioners' claim fo r refund for be ing premature. On January 18 , 2008 , petiti oners fil ed with the Davao City RTC a Compl aint/Appeal (the "RTC Case") w ith a prayer that judgment be rendered orderin g respondents to refund or issue tax credit certifi cates in fav or of the /_.- 26 Rollo, p.70, A nnex " A" of th e Petiti on fo r Review, Dec ision of RTC Branc h 17, Davao City. 27 Rollo, p.7 1, Ann ex " A" of th e Petiti on for Rev iew, Dec ision of RTC Branch 17, Davao C ity. 28 Supra, Note 27

DECISION Page I0 of311 CTA AC No . 62 Mindanao Shopping Destination Corp., et.al. vs Davao City and Rodrigo S. Rio!a, in his capacity as the City Treasurer of Davao City petitioners fo r the increased local business taxes petitioners had paid to respondents fo r the taxable years 2006 and 2007. After trial on the merits, the RTC Branch 17 of Davao City rendered a Decision declaring th e present acti on fo r refund of plaintiffs premature, in view of the appealed case pending with the Court of Appeals. Petiti oners' Motion for Reconsiderati on of the above Decision was also denied . Hence, the instant Petition fo r Review. THE ISSUES The parti es submi tted the fo llowing issues fo r thi s Court' s reso lution: I. Whether the RTC erred in ruling that the RTC case was a repetition of the CA Case. Consequently, it erred when it applied, even by analogy, the principles of litis p endentia and/or res judicata . II. Whether the RTC erred in ruling that the RTC Case was "premature" and that petitioners should have first awaited the outcome of the CA Case before fi ling the RTC Case. III. Whether the RTC erred in ruli ng that petitioners' Motion for Reconsideration or Clarification was "pro-forma" . IV . Whether petitioners are entitled to a refund or tax credit and if so, in what amounts? Arguments o[Petitioner/ 9 Petitioners asse1t that the RTC Branch 17 of Davao City erred in ruling that the RTC Case was merely a repetition of the CA Case, thus, it erred when it applied, even by analogy, the principles of res judicata and/or litis pendentia. Petitioners submit that the requisites of litis pendentia are not present in this case, i.e.. no identity 0 of parties, causes of action, and reliefs so ught. For the said reason, the dismissal by 29 Rollo, pp . 305-3 55, peti tioners' Memorandum

DECISION Page 11 of3!1 CTAACNo. 62 Mindanao Shopping Destination Corp. , et.al. vs Davao City and Rodrigo S. Riola, in his capacity as the City Treasurer ofDavao City the RTC of the complaint on said ground is erroneous and thus, should be reversed and set aside. A lso, petitioners posit that it is entirely erroneous to declare that the judgment in the CA Case amounts to res judicata in the RTC Case because there is absolutely no similarity of parties, subj ect matter, and causes of action involved between the CA Case and the RTC Case. With regard to the second issue, petitioners strongly contend that the RTC erred in ruling the RTC Case "premature", citing the case of Alabang Supermarket Corporation v. City Government of Muntinlupa, et a!. 30 where thi s Court rul ed that a taxpayer should not await the finality of the decision of a court declarin g a tax measure void before filing a claim for refund. Apropos the third issue, petitioners maintain that the RTC erred in ruling that their Motion for Reconsideration or Clarification was "proforma" . The Motion for Reconsideration specifically pointed out RTC ' s findings and conclusions in the chall enged Decision which were not supported by the evidence or which were contrary to law. Petitioners even cited the case of Department ofAgrarian Reform v. Uy,31 where the Supreme Court categoricall y rul ed that a movant may raise the same arguments precisely to co nvince the court that its ruling was erro neous. Lastl y, petitioners claim that they are entitl ed to a fu ll refund of the local business taxes paid pursuant to the New Tax Ordinance and Amendatory Ordinances because those issuances are ineffective and illegal. Petiti oners refute respondents' argument that the New Tax Ordinance did not increase the tax rates for retail ers but, rather, only corrected an erroneous tax base and rate on retailers and followed the V legal classification, tax base, and rate provided for under Section 143 (pars. b & d) of '0 CTA EB Case No. 386, February 12, 2009. o 31 515 SCRA 376, 397-398 (2007)

DEC ISIO N Page 12 of 3!J CTAACNo. 62 Mindanao Shopping Destination Corp. , et.al. vs Davao City and Rodrigo S. Rio!a, in his capacity as the City Treasurer of Davao City the LGC. Accordin g to petitioners, the above "error correcti on" or "reclassification" theories are mis leading because they conveniently conceal that Section 143 of the LGC does not require respo ndent Davao City to classify retailers separately fro m wholesalers, distributors, and dealers; neither does Section 143 requi re respondent City to tax retailers at the rate of 1\12%. Furtherm ore, petiti oners argue that: under Section 143 of the LGC, the imposition of business taxes is abso lutely di scretionary on the part of respondent Davao City; while it prov ides fo r separate schedules fo r different classes of taxpayers, it does not requ ire respondent Davao City to adopt the same groupings of taxpaye rs, or to adopt the same tax rates, provided that the rates it imposes do not exceed the prescribed limits, and once a city or other local government unit has chosen to tax a parti cul ar business at a parti cular rate, it becomes bound by its choice of tax rate and, pursuant to Secti on 19 1 of the LGC, such tax rate can onl y be adj usted once every fi ve (5) years and onl y up to a max imum of 10%. Moreover, petiti oners emphas ized that the Old Tax Ordinance was enacted by respondent City in 1994, or two years after the LGC took effect. Thus, at the ti me respondent City chose to tax retail ers (such as petitioners) at the rate of WYo, it was well aware that it had the power to tax them at the rate of 1Yz% but, in the exercise of the di scretion granted to it by the LGC, it chose not to do so. Also , respondent Davao City was well aware ofthe limitati ons prescri bed by Secti on 19 1 of the LGC, and that the tax rate it wo uld then impose wo ul d be the basis of the 10% max imum increase all owed under Section 19 1, but again respo nd ent Davao City continued to tax retail ers at the rate of WYo . Petiti oners also put m 1ssue the non-compli ance with the publi cati on requirements of the New Tax Ordinance mandated under Section 188 of the LGC. ~

DECISION Page 13 of 31! CIA AC No. 62 Mindan ao Shopping Destination C01p. , et.al. vs Davao City and Rodrigo S. Rio/a, in his capacity as the City Treasurer of Davao City According to petitioners, the New Tax Ordinance is ineffective and without any force and effect because it was not publi shed within l 0-days after approval as prescribed under Section 188 of the LGC. It is undi sputed that, although the New Tax Ordinance was app roved by the Mayor of Davao City on December 2, 2005 , it was publi shed only on December 23 , 24, and 25 , 2007, more than 2 1 days afte r the date of its approval. Arguments o(Respondents In its Memorandum32 posted on March 2, 20 10, respo ndents submit that: the RTC correctly ruled that the RTC Case is a repetition of the CA Case arguing that under the rul es and existing jurisprud ence, the requi sites of litis pendentia are present; there is identity of parties as the real party-in-interest in both cases is the City of Davao, it stand s to gain or lose revenues depending of the outcome of both cases; the impleaded city offices and officials in both cases will not gain or be made to answer in their personal capacity as they are mere representatives acting for and in behalf of the City; there is identity of cause of acti on as between the two ac tions because the CA Case and RTC Case similarl y assail s the legality, validity, and constitutionality of the Nevv Tax Ordinance ; the identical relief sought by petitioners is that they be relieved from paying the local retai ler' s tax on the basis of the questioned new tax rates for retailers under the New Tax Ordinance for being ill egal, invalid or uncon stitution a l. On the second issue, respo ndents are of the view that the RTC was correct in rulin g that the RTC Case was "premature" and that petitioners should have first awaited the outcome of theCA Case before filin g the RTC Case. Respondents mad e~ 32 Rollo, pp . 36 1-381 , respondents' Memorandum

DECISION Page 111 of311 CTA AC No. 62 Mindana o Shopping Destination Cmp. , et.al. vs Davao City and Rodrigo S. Rio!a, in his capacity as the City Treasurer of Davao City reference to A rti cle 286 of the Implementing Rules and Regulati ons of the Local Government Code of 199 1, which impli es that the mere filin g of the written claim w ith the C ity T reasurer w ithin the two (2) year p rescripti ve peri od reckoned from the time of payment as regard a particul ar claim for tax refund or credit w ill suffi ce to beat the deadline. As regards the third issue, respondents ave r that except fo r matters raised for clarification therein, a perusal of the Moti on fo r Reconsideration fil ed by petitioners to the decision of the RTC reveals that the grounds and issues raised and reli ed upon by petiti oners to support such motion have already been prev iously raised and a mere rehash of what they had averred in their compl aint, reply and other previous pleadings . Thus, the RTC correctl y treated the same as pro fo rma moti on whi ch did not deserve scant considerati on and in fact, did not toll the running of the peri od to appeal, On the last issue, respondents beseech thi s Court to not rule or reso lve all the issues raised in relati on to the fom1h issue on the ground that, except as to the issue on the ineffectiv ity of the New Tax Ordinance fo r fa ilure to publi sh said ordinance w ithin ten ( 10) days from app roval thereof, the issues raised herein are the same issues raised in said CA Case whi ch assail s the constitutionality and vali dity of the same ordinance. Thus, any reso luti on that may be reached by thi s Court w ill be preemptory of w hatever judgment that may be rendered in the CA Case and may transgress the rul e on the strict observance of the hierarchy of courts. No netheless, respondents submitted the foll owing arguments fo r the considerati on of th is Com1 : (a) The new tax rates fo r retailers under Secti on 69(d) of Ordinance 158-05 does not violate Secti ons 19 1 and 130 of RA 7 160. The enactment of the New Tax Ordinance brought about the ~

DECISION Page 15 of3t1 CTA AC No. 62 Mindanao Shopping Destination Corp. , et.al. vs Davao City and Rodrigo S. Rio!a, in his capacity as the City Treasurer ofDavao City reclassificati on of retailers as di stinct taxpayers pursuant to Secti on I 43 of RA 7 160, and thus, dul y rectified the standing error in the Old Tax Ordinance. Further, under Secti on 151 of RA 7 160, cities are allowed to exceed the maximum rates allowed for the province and municipality, provided under Section 143 of RA 7 160, by not more than fifty percent (5 0%), except the rates of professional and amusement taxes . The maximum tax rate all owed to be imposed against retailers under RA 7160 is 1.5%, particul arl y those with gross receipts of more than P400 ,000.00, whereas, the current impositi on under the New Tax Ordinance as amended by Ordinance No. 0253 for the same tax base is 1.25%. Obviously the current tax rate levied under the assailed ordinance is lower by 0.25% than the all owabl e max imum tax rate under Section 143(d) of RA 7160. Even assuming that Ordinance No . 0253 is not effecti ve by reason of all eged non-publication, the unamended rate of 1.5% is still well w ithin the all owable limits of the LGC. (b) The New Tax Ordinance is rendered effecti ve by subsequent publi cati on. While it is conceded that RA 7 160 requires the immedi ate publicati on within a peri od of ten ( I 0) days from approval of any revenue measure, respondents submit that non-compliance with such requi rement w ithin the peri od specified will onl y affect or delay the effecti v ity of the measure but w ill not go into the validity thereof especiall y so that the measure is subsequentl y publi shed in acco rdance with the mandate of the law. ~

DECISION Page 16 of3t1 CTA AC No . 62 Mindanao Shopping Destination Corp., et. al. vs Davao City and Rodrigo S. Riola, in his capacity as the City Treasurer of Davao City THE RULING OF THE COURT After a painstaking and thorough analysis of the records at hand, this Court holds that the judgment of the trial court dismissing the complaint of petitioners against defendants Davao City and Rodrigo S. RioJa, in his capacity as the City Treasurer of Davao City, is fu ll y justified in law, jurisprudence, and reason. The RTC did not err in ruling that the RTC Case is a repetition of the CA Case or that the elements of litis pendentia are extant in the RTC Case. Litis pendentia is a Latin term, which literally means "a pending suit" and is variously referred to in some decisions as lis pendens and auter action pendant. As a ground for the dismissal of a civil action, it refers to the situation where two actions are pending between the same parties for the same cause of action, so that one of them becomes unnecessary and vexatious. It is based on the policy against multiplicity of suits. 33 Litis pendentia is predicated on the principle that a party should not be allowed to vex another more than once regarding the same subject matter and for the same cause of action. This principle in turn is founded on the public policy that the same subject matter should not be the subject of controversy in co urts more than once, in order that possible conflicting judgments may be avoided for the sake of the f_-- 33 Dotmatrix Trading as represented by its proprietos, namely Romy Yap Chua. Renata Rollan and Rolando D. Cadiz vs. Rommel B. Legaspi under the nam e and style of BIG J Farms and RBL Farm , G.R. No. 155622, October 26,2009.

DECISION Page 17 of YI CTA AC No . 62 Mindanao Shopping Destination Corp ., et.al. vs Davao City and Rodrigo S. Rio!a, in his capacity as the Ciiy Treasurer of Davao CiLy stability of the ri ghts and status of persons, and also to avoid the costs and expenses incident to numerous suits.34 The rule echoed and re-echoed in our j uri sprudence is that, to set up lit is pendentia as a ground for di smi ssal of actions, the foll owing requi sites must concur: (a) identity of pmiies, or at least such parti es w ho represent the same interests in both actions; (b) identity of ri ghts asse rted and relief prayed for, the re li ef being founded on the same fac ts; and (c) identity with respect to the two (2) preceding particulars in the two (2) cases is such that any judgment that may be rendered in the pending case, regardl ess of which party is successful , would amount to res judicata in the other case. To the Court's mind, these requ isites are present in the instant case. On the fi rst requi site, well -settled is the rul e that litis p endentia requires only substantial, and not abso lute, identity of parties. There is substantial identity of parti es w hen there is a community of interest betwee n a party in the first case and a party in the second case, even if the latter was not impleaded in the first case.35 Thi s Court is co nvinced that the trial court correctl y apprec iated the identity of the parties in the RTC Case and theCA Case. These cases invo lve the same principal pa1iies, i. e., the SM Group ofCompanies and Davao City, whil e the other parties were merely imp leaded as nominal parties . As aptl y stated by respondents in their t - - Memorandum36, the city offi ces and offi cials in both cases were impleaded as mere 34 Subic Telecommunications Company, i nc. vs. Sub ic Bay Metrop olitan Authority and i nnove Communications, inc., G.R. No . 185159 . October 12,2 009 35 Agil ent Tec hn ologies Singapore (PT E) LTO ., vs. Integrated Si li con Techno logy Philippin es Corporation , et. aL, G.R. No. 154618 citing Santos v. Court of Appea ls, G.R. No . 1018 18,2 1 September 1993, 22 6 SCRA 630, 637. 36 Rollo, pp . 36 1-38 1

DECISION Page 18 of3!l CTA AC No. 62 Mindanao Shopping Destination Corp ., et. al. vs Davao City and Rodrigo S. Riola, in his capacity as the City Treasurer of Davao City representatives acting for and in behalf of Davao City as part of the officialdom thereof, they wi ll not gain or be made to answe r in their personal capacity or official positions. As oft repeated, there is substantial identity of parties when there is a community of interest between a party in the first case and a party in the second case, even if the latter was not impl eaded in the first case. The community of interest of petitioners in the RTC Case and CA Case is quite evident; in both cases, the petitioners assail the constitutionality, legality or validity of the New Tax Ordinance in order to be re li eved from the operati on of the new tax rate for retai lers under the New Tax Ordinance. For the respondents, this Court is of the well-considered view that the City of Davao has a community of interest in the two cases, even though the City of Davao was not impleaded in the CA Case , by reason of the fact that it w ill ultimately bear with the effects of the decisions and enforce the same within its jurisdicti on, which enforcement mi ght result into a possible gain or loss of revenues depending on the outcome of both cases. Anent the second requi site, thi s Court notes the principle enunci ated by the Supreme Court in the case of City of Caloocan vs. Court of Appeals, et al. 37 which states that, there is id entity of causes of action if the same evidence wi ll sustain the second action. The principle appli es even if the relief sought in the two cases may be different.38 In the CA Case , filed by petitioners, the issue is whether the New Tax Ordinance is constitutional and/or illegal. The issue in the RTC Case , also fi led by f_- petitioners, is whether petitioners are entitled to a refund or the issuance of tax credit 37 G.R. No. 1!1 500!1 , May 3, 2006 38 Supra.

DECISION Page 19 of Yl CTAACNo. 62 Mindanao Shopping Destination Corp., et.al. vs Davao City and Rodrigo S. Rio/a, in his capacity as the City Treasurer of Davao City certificates for the local business taxes paid pursuant to the New Tax Ordinance and Amendatory Ordinances on the ground that said issuances are purportedl y ineffective and illegal. Petiti oner's claim fo r refund is predicated on the alleged unconstitutionality and/or illegality of the New Tax Ordinance , thus, the claim for refund is contingent on the reso luti on of the CA Case as the all egation of unconstituti onality, upon whi ch the claim for refund is founded, is di sputed and would have to be settled fi rst before the tri al court can proceed w ith the claim fo r refund . Bearin g in mind that the questi on on constituti onality and/or legality of the New Tax Ordinance is the principal issue that needs to be reso lved for the proper adjudi cati on of both cases, the same set of evidence and arguments will have to be presented to support the causes of acti on in the two cases or rule on the constituti onality of the New Tax Ordinance. The cause of acti on in the RTC Case, being simil arly subject of judi cial inquiry in theCA Case, is di smi ssibl e on the ground of litis pendentia. In the case of City of Caloocan vs. Court of Appeals, et. al39 the Supreme Court held as follows: "The Court find s that the cases invo lve the same principal parties, to wit : the City of Caloocan and Gotesco Investments, Inc. , while the other parti es were merely impleaded as nominal parti es. As this Court has previously held , absolute identity of pmiies is not required. It is enough that there is substanti al identity of parties. There is identity of causes of action if the same evidence w ill sustain the second action. The principle applies even if the relief sought in the two cases may be di fferent. Civil Cases Nos. C-18 33 7 and C- 18308 are based on the same set of facts, that is, the failure to execute an Amended Deed of Sale pursuant to City Ordinance No . 068. On the other hand, Civil Cases Nos . 18308 m1d 18274 question the nature of, and the procedure undertaken in the transfer of ownership of the subj ect lm1d. Basically, the same set of evidence will have to be presented to support the causes of acti on in the three (3) cases, which as indicated earlier is characterized by singularity. Thus, f----- a findin g in one w ill sustain a fi nding in the other. The causes of acti on 39 Supra Note 37

DECISION Page 20 of 3t1 CTA ACNo. 62 Mindanao Shopping Destination Corp. , et. a/. vs Davao City and Rodrigo S. Rio/a, in his capacity as the City Treasurer of Davao City in Civil Case No. C-18 337 being similarl y subj ect of j udicial inquiry in Civil Cases Nos. C- 18274 and C-18 337, Civil Case No . C- 1833 7 is di smi ssible on the ground of litis p endentia. Moreover, the aforesaid cases are intimately related and/or intertwined with one another such that the judgment that may be rendered in one, regard less of which party would be successful, would amount to res judicata in the other. Litigants are reminded that parties are not allowed to pursue simultaneous remedi es in two different fora. Fi ling multiple petitions or complaints constitutes abuse of court processes, which tends to degrade the admini stration of justice, wreaks havoc upon orderl y judicial procedure, and adds to the congestion of the heavily burdened dockets of the courts. Litigants, no matter how nobl e their intentions for filing such suits, and no matter their zeal in pursuing their suits, are not excused from the coverage of the rule on forum-shopping. One last note. The adjudicati on of thi s case is without prejudice to the resolution of the issues in the consignation case, Civil Case No. C- 18274, if not yet resolved already. " The last requisite of litis pendentia mandates that the identity with respect to the two preceding particulars in the two cases is such that any judgment that may be rendered in the pending case, regardless of which party is successful, would amount to resjudicata in the other case. The explanation made by the Supreme Court in Santos vs. C.A 40 concerning the meaning of res j udicata is very enlightening, viz: "Res judicata, according to Black, refers to "the rule that a f inal judg ment rendered by a court of competent jurisdiction on the merits is conclusive as to the rights (~fthe parties and their privies and, as to them, constitutes an absolute bar to a subsequent action involving the same claim, demand or cause (~faction. " It embraces two concepts: a) the effect of a judgment as a bar to the prosecution of a second action upon the same claim, demand or cause of action; this is des ignated as " bar by fo rmer judgment" ; and, b) precludes the relitigation of a particular fac t or issues in another action between the same parties on a different claim or cause of action. Thi s is the rule on "conclusiveness ofjudgment". [_- 40 G. R. No. 13t1 787, Nove mber 15, 2005 c iting Black's Law Dicti onary, 6'h Ed ., p. 1305, c ited in G uti errez vs. Court of Appea ls, 193 SC RA t1 37 [ 199 1); Calalang vs. Reg ister of Deeds , 23 1 SC RA 88 (1 994); Allied Bank vs. CA , 22 9 SCRA 252 ( 1994); Sec. 1, R ule 9, R ules of Co urt.

DECISION Page 2 1 of311 CTA AC No. 62 Mindanao Shopping Destination Corp., et.al. vs Davao City and Rodrigo S. Rio/a, in his capacity as the City Treasurer of Davao City Contrary to petitioner's understanding of the doctrine, res judicata , assuming its applicability on a given situation, is not a nullifying factor, such that the final judgment in the former action works to nullify the proceedings in the subsequent action where the doctrine is invoked. In context, res judicata is a rule of preclusion to the end that facts or issues settled by final judgment should not be tried anew. Section 1, Rule 16 of the Rules of Courts lists res judicata as among the grounds for a motion to dismiss or as a defense to defeat a claim, but the same must be pleaded at the earliest opportunity, either in a motion to dismiss or in the answer. Else, the defense or objection on that ground is deemed waived." The requisites of the rule were enumerated in Bardillon vs. Barangay Masili of Calamba, Lagund11 : "Res judicata literally means a matter adjudged, judicially acted upon or decided, or settled by judgment. It provides that a final judgment on the merits rendered by a court of competent jurisdiction is conclusive as to the ri ghts of the patiies and their privies; and constitutes an absolute bar to subsequent actions involving the same claim , demand or cause of action. The followin g are the requisites of res judicata: (1) the former judgment must be final; (2) the court that rendered it had jurisdiction over the subject matter and the parties; (3) it is a judgment on the merits; and (4) there is - between the first and the second actions - an identity of parties, subject matter and cause of action." A perusal of the above definition and requisites instantly shows that the l-- prevailing circumstances in this case aptly call for the application of the rule on res 41 G .R. No. 1116886, April 30,2003 citing Mirpuri v. Court of Appeals, 3 18 SCRA 116, November 19, 1999; citing 46 Am Jw� 2d, "Judgments" Sec. 394 (1969 ed.); Republic of th e Philippines v. Court ol Appeals, 324 SCRA 560, February 3, 2000; Firestone Ceramics, inc. v. Court ofAppea!s, 3 13 SCRA 522, September 2, 1999; Lee Bun Ting v. Aligaen, 76 SCRA 416, April 22, 1977; Philippine National Bank v. Barretto, 52 PhiL 818, February 2 1, 1929; Quezon Province v. Marte, 368 SCRA 145 , October 23, 200l ;Avisado v. Rumbaua, 354 SCRA 245 , March 12, 2001 ; Vda. de Salonga v. A/agar, 335 SCRA 728, July I11 , 2000 ;Siapian v. Court of Appeals, 327 SCRA I 1, March I, 2000; Ocampo v. Buenaventura, 1511 Phil. 253, January 211, 19711.

DECISION Page 22 of }1 CIA AC No. 62 Mindanao Shopp ing Destination Corp. , et. al. vs Davao City and Rodrigo S. Rio!a, in his capacity as the Ciry Treasurer of Davao City j udicata. As earli er di scussed, pending for reso luti on m the CA Case is the constituti onality and/or legality of the New Tax Ordinance; on the other hand, petitioner's cl aim for refund in the RTC Case is hinged principall y on the all eged uncon stituti onality and invalidity of the New Tax Ordinance , thus, co ntingent on the resoluti on of the C'A Case. If the RTC Case is permitted to proceed, then the tri al court would be constrained to decide or ru le on the issue of constitutionality and/or legality of the New Tax Ordinance, the rulin g on that parti cul ar issue is tantamount to reliti gati on of a parti cular fact or issue between the same parties on a di fferent claim as the RTC would be touching/dec iding on an issue that is already pending for determinati on by the CA. The relitigati on of a particu lar fact or issue in another action between the same parti es on a di ffe rent claim or cause of acti on is the very act precluded on the second concept of res judicata, i.e. , the rul e on conclusiveness of judgment. The doctrine of res judicata was we ll expressed by the Supreme Co urt in these words: "The doctrine of res j udicata is an old axiom of the law, dictated by wisdom and sanctified by age, and is founded on the broad p rinciple that it is to the interest of the public that there should be an end to litigation by the same parties over a subject once fu lly and fairly adjudicated".'12 ln Sherwin Development Corporation vs. Sitio Sto. Nifzo Residents Association, Inc. et.al. n the Supreme Court exp lained, thus: " Indeed, the underlying p rinciple of litis pendenlia is the theory that a party is not allowed to vex another more than once regarding the same subj ect matter and for the same cause of acti on. Thi s theory is fo tmded on the public policy that the same subj ect matter should not be the subj ect of controversy in court more than once in order that ~ 42 Filipinos lnvesrment and Financing Corp. vs. ICA , 179 SC RA 728 43 G. R. No. 158!155 , Jun e 28, 2005 citin g Tirona v. Alejo, G.R. No. 1293 13, I0 October 200 I, 367 SCRA 17

DEC I SIO N Page 23 of3!1 CTA AC No. 62 Mindanao Shopping Destination Corp., et.al. vs Davao City and Rodrigo S. Rio/a, in his capacity as the City Treasurer of Davao City possibl e conflicting j udgments may be avoided, for the sake of the stability of the rights and stat us of persons Y 11The RTC ofMuntinlupa City, Branch 205, recogni zed thi s doctrine when it di sm issed SP Civil Action No. 02-237 to avoid the possibility of two contradictory dec isions on the questi on of the vali dity of the subj ect titl es." Clearly, any judgment that may be rendered in the CA Case, regardless of whi ch party is successful , wo uld amount to res judicata in the RTC Case, being that the questi on on constituti onality and/or legality of the New Tax Ordinance is the principal issue that needs to be reso lved for the proper adj ud ication of both cases. As eloquentl y stated in the case of Alejo Abes, et. al. vs. Tomas Rodil and Catalina Cruz 44 , " In the end, we say that abhorrence to embarrassing conflict of judicial findings and a healthy respect for final judgments are enough justification for the doctrine ofres judicata, which is clearly operative in the case at bar." Hence, the court a quo correctl y ruled that petiti oner' s action was barred by the pend ency of the proceedings before the CA. The R TC did not err in ruling that the R TC Case was "premature" and that petitioners should have first awaited th e outcome of theCA Case before filing the RTC Case. Petiti oners argue that a taxpayer should not wait the fi nality of the dec ision of a court dec laring a tax measure void before fi ling a claim fo r refund and that the RTC 's di smi ssal of the RTC Case was not onl y inconsistent w ith the LGC and the ruling of th is Collli in the cases of Jardine Davies Insurance Brokers, Inc. v. Aliposa,45 et. al. , Swedish Match Philippines, Inc. v. The Treasurer of Manila,46 and Alabang Supermarket Corporation v. City Government of Muntinlupa, et. c__-- 44 G.R. No. L-20996, Ju ly 30, 1966 45 G.R. No . 11 8900, February 27, 2003 46 CTA AC No. 15, Jul y 21,2006

DECISION Page 2!1 of 3tl CTA AC No. 62 Mindanao Shopping Destination Corp., et.al. vs Davao City and Rodrigo S. Rio!a, in his capacity as the City Treasurer of Davao City al.( "Alabang ") 47 ; worse, it also effectively counterm anded and negated remedies which the LGC itse lf provides. Petiti oners hang on to the ruling in the case of Alabang where the CTA En Bane argued that the Supreme Court' s deci sion in Allied Banking Corp. vs. Q uez on City Governme nt, et. al. 48 whi ch states that a cl aim for , refund with the local gove rnment may be reckoned from the date the taxpayer is entitled to refund or credit, is pro hac vice and that it is not the intenti on of the taxpayers to grant judicial relief on business tax refund s beyond two (2) years from the time of payment. Respondents submit that the RTC was correct in ruling that the RTC Case was ''premature" and that petiti oners should have fi rst awaited the outcome of the CA Case before filin g the RTC Case. Petitioner' s argument that the RTC Case was fil ed so as to beat the two (2) year prescripti ve period under the LGC for filin g claims for refund or credit does not li e. After a careful examinati on of the pertinent provisions of the LGC , cases interposed, arguments of the parti es, the Court upholds the ruling of the court a quo di smissing the complaint on the ground of prematurity. It is beyond cavil that the cl aim for refund lodged with the RTC is primaril y hinged on the alleged unconstituti onality and invalidity of the Ne w Tax Ordinance, which is the ve ry same issue pending for determination by the CA. What claim for refund would there be to speak about if in case CA sustains the constitutionality and/or validity of the tax ordinance? Evidentl y, the cl aim for refund is afflicted w ith V the vice of prematurity. 47 CTA EB No . 386, February 12, 2009. 48 G .R. No . 154 126, September 15,2006

DECISION Page 25 of 311 CIA AC No. 62 Mindanao Shopping Destination Corp., et. al. vs Davao City and Rodrigo S. Rio/a, in his capacity as the City Treasurer of Davao City The persistence of the petiti oners in their cl aim for refund is due to their argument that the two (2) year prescriptive period under Section 196 of the Local Government Code is about to lapse. Section 196 of the Local Government Code provides as follows: XXX SECTION 196. Claimfor Refund of Tax Credit. -- No case or proceeding shall be maintained in any court for the recovery of any tax, fee , or charge erron eously or illegally collected Lmtil a written claim for reftmd or credit has been fi led with the local treasurer. No case or proceeding shall be entertained in any court after the expiration of two (2) years from the date of the payment of such tax , fee, or charge, or from the date the taxpayer is entitled to a refund or credit. XXX From the above-cited provision, it may be fairly inferred that taxpaye rs judicially claiming for refund of any local tax, fee, or charge must sati sfy two essenti al requirements: 1. A written cla im for refund or credit must be filed w ith the local treasurer; and 2. The case or proceeding must be filed within two (2) years [i] from the date of payment of tax, fee , or charge or [ii] from the date the taxpayer is entitled to a refund or credit. Above provision plainly declares, therefore, that prescription is not reckoned only from the date of payment, but also from the "date the taxpaye r is entitled to a refund or credit." Thi s Court is well-aware of the ruling enunciated by the CTA En Bane in the case of Alabang where it declared that it could not have been the intention of the taxpayers to grant judicial reli ef on business tax refund s beyond two (2) years from V the time of payment, and that the phrase "from the date the taxpayer is entitled to a

DECISION Page 26 of3!J CTA AC No. 62 Mindanao Shopping Destination Corp., et. al. vs Davao City and Rodrigo S Rio/a, in his capacity as the City Treasurer of Davao City refund or credit" prov ided under Section 196 should not be interpreted to mean the fin ality of the deci sion declarin g the tax measure vo id . However, in view of the clear provision of the LGC and after a conscienti ous stud y of the circumstances in thi s case, thi s forum deems it prudent to vee r off the stern interpretati on of the phrase "from the date the taxpayer is entitled to a refund or credit" under Secti o n 196, A cardina l rul e in statutory construction is that when the law is clear and free from any doubt or ambi guity, there is no room for co nstructi on or interpretati on. There is onl y roo m for appli cati on.49 Inas much as the law states in unequi vocal term s that a case o r proceeding shall be entertained in any court if filed w ithin two (2) years from the date of the payment of such tax, fee , or charge, or from the date the taxpayer is entitled to a refund or credit, We venture to say now that peti tioners' j udi c ial claim fo r refund or cred it may st ill be pursued w ithin two (2) years from the time the assai led ordinance is null ifi ed or from the time the decision nulli fy ing the ordin ance becomes fin al and executory, because it is onl y at such time when the petitioners beco me entitl ed to a refund o r credit o r their claim fo r refund is ri pened for admini strati ve and judicial determinati on. Wheth er petitioners are entitled to a refund or tax credit. Petiti o ners contend that they are entitl ed to a refund or the issuance of a tax credit because the increase in the local business tax rate imposed against retailers set fo rth in the New Tax Ordinance is contrary to Sections 19 1 and 130 of the LGC. The f._-- 49 Milagros �. Amore.\� vs. !-louse of Representatives Electoral Tribunal and Em manuel .Joel J Villanueva, G.R. No . 189600, Ju ne 29, 20 I0 citi ng Twin Ace Hold ings Corpo rati on v. Rufi na and Co mpany, G.R. No . 16019 1, June 8, 2006 , 490 SCRA 368,376.

DECISION Page 27 of3t1 CIA AC No. 62 Mindanao Shopping Destination Corp. , et.al. vs Davao City and Rodrigo S. Rio/a, in his capacity as the City Treasurer of Davao City said increase labell ed as a " reclassifi cation" or an "error correction" by the respondents is mi sleading because they convenientl y conceal that Section 143 of the LGC does not require respondent City to classify retail ers separately from wholesalers, di stributors, and dealers; neither does Secti on 143 require respondent City to tax retailers at the rate of 1Y2% . A lso, petiti oners interposed that the New Tax Ordinance is ineffective and w ithout any force and effect whatsoever because it was not publi shed w ithin ten ( 10) days from approval thereof in accord ance with the mandatory provisions of Section 188 of the LGC. The New Tax Ordinance was approved on December 2, 2007, it was publi shed onl y on December 23, 24, and 25 , 2007 - or more than 2 1 days after the date of its approval. On the other hand , respondents aver that all the issues raised in relati on to thi s issue should not be rul ed upon for the issues raised herein to support petitioners' contenti on are the same issues raised in the CA Case , except as to the issue on ineffecti v ity of the New Tax Ordinance in view of the all eged fa ilure of respondents to publi sh the said ordinance wi thin ten (10) days h om approval thereof, whi ch petiti oners fa iled to ra ise in the much earlier CA Case . We have not overl ooked the fa ct that thi s Court is a court of spec ial j uri sdicti on and can onl y take cogni zance of such matters as are clearl y within its jurisdi cti on provided under Secti on 7 of Republic Act (R. A.) No. 9282, amending R.A. No. 11 25 , otherw ise known as the Law Creating the Court of Tax App eals. 50 Hence, thi s forum is of the view that it would be judicious to not rul e on the constitutionality, validity, and/or effectivity of the subj ect ordinance. ~ 50 Ri za l Co mm ercial Banking Corporati on vs . Com miss ioner of Internal Revenu e, G. R. No . 168t198 , April 24, 2007 .

DECISION Page 28 of3tl CIA AC No. 62 Mindanao Shopping Destination Corp., et.al. vs Davao City and Rodrigo S. Rio!a, in his capacity as the City Treasurer of Davao City The ruling of the Second Division of this Court in Synovate, Inc. vs. Pasig City, et. al,51 is worth mentioning: XXX This Court will not be hasty in declaring a tax ordinance invalid or illegal, as it is mindful of the well-etched dictum by the Supreme Court in People vs. Vera that: "A becoming modesty of inferior courts demands conscious realization of the position that they occupy in the interrelation and operation of the integrated judicial system of the nation." Especially so, the power to determine any question on the legality of tax ordinances, such as the Pasig Revenue Code of 1992, is not within the province of this Court, but is primarily lodged on the Secretary of Justice, pursuant to Section 187 of the LGC of 1991 , and under certain conditions, is vested with the courts of general jurisdiction or the Regional Trial Courts. It must be emphasized that this Court is a court of special jurisdiction and can only take cognizance of such matters as are clearly within its jurisdiction. The Pasig Revenue Code of 1992, including Section 77 (d) thereof, enjoys the presumption of validity, unless declared otherwise. There being no contrary declaration, respondent Mayor has the duty, inter ali a, to "(e)nsure that all taxes and other revenues of the city are collected" and "(i)ssue licenses and permits and suspend or revoke the same for any viol ation of the conditions upon which said licenses or permits had been issued, pursuant to law or ordinance". XXX Furthermore, emphasis must be given to a well-entrenched rule which states that in this jurisdiction, an ordinance is presumed to be valid unless declared otherwise by a Court in an appropriate proceeding where the validity of the ordinance is directly put in issue. s7. The wisdom behind the above-stated rule was clearly explained in Social .Justice Society, et. al. vs. Hon. Jos e L. Atienza, Jr., et. al..lJ: XXX Statutes and ordinances are presumed valid unless and until the courts ?----- declare the contrary in clear and unequivocal terms. The mere fact 51 CTA AC No. 53 , January 8, 20 10. 52 Rural Bank of Makati, et. al. vs. Municipality of Makoti, et. al. , G.R. No. 150763 , Jul y 2, 200-1 . 3 G.R. No. 15605 2, February 13, 2008 . '

DECISION Page 29 of 311 CIA AC No. 62 Mindanao Shopping Destination Corp., et.al. vs Davao City and Rodrigo S. Rio!a, in his capacity as the City Treasurer ofDavao City that the ordinance is alleged to be unconstitutional or invalid will not entitle a party to have its enforcement enjoined. The presumption is all in favo r of validity. The reason for thi s is obvious: The action of the elected representatives of the people cannot be lightly set aside. The councilors must, in the very nature of things, be fami liar with the necess iti es of their particular municipality and with all the facts and circumstances which surround the subj ect and necess itate action. The local legislative body, by enacting the ordinance, has in effect given notice that the regul ation s are essential to the well being of the people . . . The Judiciary should not lightly set aside legislative action when there is not a clear invasion of personal or propetty rights under the guise of police regulation. XXX ...[Courts] accord the presumption of constituti onality to legislative enactments, not only because the legislature is presumed to abide by the Constitution but also because the judiciary[,] in the determination of actual cases and controversies[,] must refl ect the wisdom and justice of the people as expressed through their representatives in the executi ve and legislati ve departments of the government. The oil companies argue that thi s presumption must be set aside when the invalidity or unreasonableness appears on the face of the ordinance itself. We see no reaso n to set as ide the pres umption. The ordinance, on its face , does not at all appear to be unconstituti onal. It reclassifi ed the subj ect area from industrial to commercial. Prima facie , this power is within the power of muni cipal corporati ons: The power of municipal corporations to divide their territory into industrial , commercial and residential zones is recognized in almost all jurisdictions inasmuch as it is deri ved from the police power itself and is exercised for the protection and benefit of their inhabitants. XXX There can be no doubt that the City of Manila has the power to divide its territory into res identi al and industri al zones, and to prescribe that offensive and unwholesome trades and occupations are to be establi shed exclusively in the latter zone. XXX XX X XXX Likewise, it crumot be denied that the City of Manila has the authority, derived from the police power, of forbidding the appellant to continue /.---

DECISION Page 30 of 311 CTA AC No . 62 Mindanao Shopping Destination Corp., et.al. vs Davao City and Rodrigo S. Riolo, in his capacity as the City Treasurer ofDavao City the manufacture oftoyo in the zone where it is now situated, which has been declared residential.. .. Courts will not invalidate an ordinance unl ess it clearl y appears that it is unconstitutional. There is no such showing here. Therefore, the injunctive writs issued in the Manil a RTCs May 19, 2003 order had no leg to stand on. The court first acquiring jurisdiction over a particular issue, excludes all the other courts of concurrent jurisdiction from acquiring jurisdiction over the same issue. In Rebecca Panlilio, et. al. vs. Hon. Jose.fina G. Salonga, et. al. 54 the follow ing oft-repeated trui sms were re-echoed XXX It has been held that "even in cases of concurrent juri sdiction, it is, also, axiomatic that the court first acquiring jurisdiction excludes the other courts" (Laqui an vs. Baltazar, 3 1 SCRA 55 2, 556 [1 970] , please see cases cited therein). In addition, it is a familiar principl e that when a court of competent jurisdiction acquires jurisdiction over the subj ect matter of a case, its authority continues, subj ect only to the appellate authority, until the matter is finally and completely di sposed of, and that no court of co-ordinate authority is at liberty to interfere with its action. This doctrine is applicable to civil cases, to criminal prosecutions, and to courts-marti al. The principle is essential to the proper and orderly administration of the laws; and whil e its observance mi ght be required on the grounds of judicial comity and courtesy, it does not rest upon such considerations exclusively, but is enforced to prevent unseemly, expensive, and dangerous conflicts of jurisdiction and of the process. (14 A m, Jr. 435 -436, cited in Franci sco, Vicente, Revised Rules of Court, pp. 57-5 8, Vol. I, 1965 ed. ). XXX The attention of the Court has been call ed to the filin g of multiple petitions and the compl aints involvin g the same issues in the Supreme Court, the Court of [...__. 54 G.R. No . 11 3087, June 27, 19911 citing Lee vs. Presiding Judge, MTC of Legaspi City, Branch /, 111 5 SCRA 408 (1 986).

DECISION Page 3 I of 3-1 CIA AC o. 62 Mindanao Shopping Destination Cmp., et. al. vs Davao City and Rodrigo S. Rio/a, in his capacity as the City Treasurer ofDavao City Appeals other tribunal s or agencies, with the result that said courts, tribunal s or agencies have to resolve the same issues.55 Said rule was expressed in the Revised C ircular No. 28-91 issued on February 4, 1994 and was subsequentl y incorporated as Section 5 Rule 7 of the 1997 Rul es of Court In view of the fore going, it is clear that when the case invo lving the issue of constitutionality and/or validity of an ordinance was lodged with the CA and jurisdiction over the said issue was acquired by the said court, it excluded the RTC and all other courts of concurrent juri sdiction from acquiring jurisdiction over the issue of constitutionality and/or validity of an ordinance. To hold otherwi se would be to ri sk instances where courts of concurrent jurisdiction mi ght have conflicting orders. Thi s wi ll create havoc and result in an extremely di sord ered administration of justice .56 In the case of Viva Productions, Inc. vs. CA , et. al, a substanti ally simil ar controversy was reso lved by the Supreme Court, in thi s w ise: XXX Significantly, the primordi al issue involved in the Makoti court and the Paranaque court is one and the same - whether or not the showing of the movie "The Jessica Alfaro Story" violates the sub-judice rule. Shou ld the Paranaque court find so, it would have no a ltern ati ve but to enjoin petitioner from proceeding with the intended contumacious ac t lest it may be cited for contempt In the case of the Makati court, if it finds s uch violation, it will have to enjoin petitioner from proceeding w ith the prej udicial act lest it may be held li able for damages. The query posed before respondent court, simply stated, is whether or not the Parafiaque court and the Makati court, obviously having concurrent jurisdiction over the subj ect matter, can both take cogni zance of the two actions and resolve the same identical issue on 0 - the alleged violation of the sub judice rule. Respondent co urt erred in 55 Rev ised Ci rcuJar No. 28-91 , February 8, 199!J ; Secti on 5 Rul e 7 of the Rules of Cour1. 6 Viva Produ ctions, Inc. vs. CA, et. a/. , G .R. No. 12388 1, March I 3, 1997. '

DECISION Page 32 of3-1 CIA AC No. 62 Mindanao Shopping Destination Corp. , el.al. vs Davao City and Rodrigo S. Rio!a, in his capacity as the City Treasurer ofDavao City ruling in the affirmative. This is the very evil sought to be avoided by this Court in issuing Circular No. 28-91 which pertinently reads: The attention of the Comi has been called to the fi ling of multiple petitions and complaints involving the same issues in the Supreme Comi, the Court of Appea ls or different Divisions thereof, or any other tribunal or agency, with the result that said tribun als or agen cy have to r esolve th e sam e issues. (Emphasis supplied.) On February 8, 1994, this was magnified through Administrative Circular No. 04-94, effective on Apri l 1, 1994, to include all courts and agencies other than the Supreme Court and the Court of Appeals, to prevent forum shopping or the multiple filing of such pleadings even at that level. Sanctions for violation thereof are expressly stated as follows : (2) Any violation of this Circular shall be a cause for the dismissal of the complaint, petition, application or other initiatory pleading, upon motion and after hearing. However, any clearly willful and deliberate forum shopping by any party and his counsel through the fi ling of multiple complaints or other initiatory pleadings to obtain favorable action shall be a ground for summary dismissal thereof and shall constitute direct contempt of court. Furthermore, the submission of a false certification or non-compliance with the undertaking therein, as provided in Paragraph 1 hereof, shall constitute indirect contempt of court, without prejudice to disciplinary proceedings against counsel and the filin g of a criminal action against the guilty party. Private respondent's intention to engage in forum shopping becomes manifest with undoubted clarity upon the following considerations. Notably, if not only to ensure the issuance of an injunctive relief, the significance of the action for damages before the Makati court would be nil. What damages against private respondent would there be to speak about if the Paranaque court already enjoins the performance of the very same act comp lained of in the Makati court? Evidently, the action for damages is premature if not for the preliminary injunctive relief sought. Thus, we find grave abuse of discretion on the part of the Makati court, being a mere co-equal of the Paranaque court, in not giving due deference to the latter before which the issue of the al leged violation of the suh ~judice rule had already been raised and submitted . In such instance, the Makati court, if it was wary of dismissing the action outrightly under Administrative Circular No. 04-94, should have, at least, ordered the consolidation of its case with that of the Para.fiaque court, which had first acquired jurisdiction over the related case in accordance with Rule 31 of the Revi sed Rules of Court f__--

DEC ISION Page 33 of Yl CTA AC No . 62 Mindanao Shopping Destination Corp., et. al. vs Davao City and Rodrigo S. Rio/a, in his capacity as the City Treasurer ofDava o City (S uperlines Trans. Co. vs. Victor, et al. , 124 SCRA 939 [1983]; Vallacar Transit Inc. vs. Yap, 126 SCRA 500 [1 983]), or it should have suspended the proceedings until the Para.fiaque co urt may have ruled on the iss ue (Salazar vs. CFI of Laguna, 64 Phil. 785 [1937]). XXX In view of our foregoing disq uisitions, the Co urt no longer deems it necessary to resolve the other iss ues posed by petitioners. WHER.I!.:.FORE , prem1ses considered , the instant Petition for Review lS hereby DI SMISSED . SO ORDERED. AMLftl~~{::AS Assoc iate Justi ce WE CONCUR: 'ISTA ~if:&f:f'NC!i,~u QUEZ Associate Justice ATTESTATl()N Tattest that the conc lusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the C urt' s Di vision.

DECISION Page 311 of 3!f CTA AC No . 62 Mindanao Shopping Destination Corp., et. al. vs Davao City and Rodrigo S. Rio/a, in his capacity as the City Treasurer of Davao City CERTIFICATION Pursuant to Section 13 , Article VIII 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 {j_-IY. 0~ ERNESTO D. ACOSTA Presiding Justice