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

REPUBLIC OF THE PHILIPPINES COU RT OF TAX APPEALS QUEZON CITY ENBANC SAN MIGUEL FOODS, INC., CTA EB NO. 2474 Petitioner, (CTA AC NO. 209) Present: - v er su s - DEL ROSARIO, P.J., RINGPIS-LIBAN, MANAHAN, BACORRO-VILLENA, MODESTO-SAN PEDRO, REYES-FAJRDO, CUI-DAVID, and FERRER-FLORES,]].. OFFICE OF THE CITY Promulgated: T REASU RER, CITY OF DAVAO, represented by .AUS 0 �4 20~ __, BELLA LINDA N. TANJILI, City Treasurer, Res p o n d en t. X----------------------------------------------------------------------------~-~-~~~--){ RESOLUTION RINGPIS-LIBAN ,].: For resolution is petitioner's Motion for Reconsideration (Of 3 1 j anuary 2023 Decision) ftled by registered mail on March 14, 2023 and respondent's Comment (to the Motion for Reconsideration dated March 13, 2023) ftled by registered mail on April 24,2023. In its motion, petitioner reiterates that the Permit Fee to Slaughter was imposed under the taxing authority of respondent Local Government Unit (LGU), which falls und er the jurisdiction o f the court a quo in Section 7(a)(3) of Republic Act No. (R.A.) 1125, as amended. Furthermore, it cites the case o f National Power Corporation v. Municipal Government of Navotas, et aL (Napocor),1 where th e Supreme Court pronounced th at the term "local tax case" used in Sectio n 7(a)(3) of R.A. 11 25 must be taken in its generic sense. ~ 1 G.R. No. 192300, November 24, 20 14.

RESOLVTION CTA EB NO. 2474 (CTA AC NO. 209) If only to lay to rest these issues that were already passed upon by the Court in its assailed decision, it bears stressing that the Permit Fee to Slaughter paid by petitioner under protest is in the nature of a license fee and is not a tax. Thus, it lies outside the jurisdiction of the court a quo. The Supreme Court explained the nature and scope of a license fee in Progressive Development Corporation v. Quezon City:2 "To be considered a license fee. the imposition questioned must relate to an occupation or activity that so engages the public interest in health, morals, safety and development as to require regulation for the protection and promotion of such public interest; the imposition must also bear a reasonable relation to the probable expenses of regulation, taking into account not only the costs of direct regulation but also its incidental consequences as well. When an activity. occupation or profession is of such a character that inspection or supervision by public officials is reasonably necessacy for the safeguarding and furtherance of public health, morals and safety, or the general welfare, the legislature may provide that such inspection or supervision or other form of regulation shall be carried out at the expense of the persons engaged in such occupation or performing such activity. and that no one shall engage in the occupation or carcy out the activity until a fee or charge sufficient to cover the cost of the inspection or supervision has been paid. Accordingly, a charge of a fixed sum which bears no relation at all to the cost of inspection and regulation may be held to be a tax rather than an exercise of the police power." (Citations omitted and underscoring supplied) Section 367(d) of Ordinance No. 158-05 (An Ordinance Approving the 2005 Revenue Code of the City of Davao, As Amended), which imposed ante mortem and post mortem fees for the slaughter of animals along with the other germane provisions in the city ordinance, was enacted to regulate or control the slaughter ofanimals intendedfor sale. Accordingly, the Permit Fee to Slaughter is not a tax but one imposed on petitioner in order for it to engage in a particular trade or business. The Permit Fee to Slaughter can be classified as a fee for the purpose of regulating a specific business activity imbued with public interest because the activity, i.e. the slaughter of live birds/poultry in its Tori! and Tugbok dressing plants, can impact public health, hygiene and sanitation. Such business activity, by its very nature, warrants close supervision and control by the city in the exercise ofpolice power in order to promote general we!fare found in Section 16 of the Local Government Code: "SECTION 16. General Welfare. - Evecy local government unit shall exercise the powers expressly granted. those necessatily implied there from. as well as powers necessacy, appropriate. or incidental for its efficient and effective governance. and those which are essential to the promotion of the general welfare. Within their respective territorial jurisdictions. local government units shall ensure and support, among other things, the preservation and enrichment of culture, promote health and safety, enhance the right of the people to a balanced ecology, encourage and support the development of appropriate and self-reliant scientific and technological capabilities, in1prove public morals, enhance economic prosperity and soc~ 2 G.R. No. L-36081, April 24, 1989.

RESOLUTION CTA EB NO. 2474 (CTA AC NO. 209) justice, promote full employment among their residents, maintain peace and order, and preserve the comfort and convenience of their inhabitants." (Underscoring supplied) Finally, the Napocor case cited by petitioner is inapplicable to this case. In essence, the issue that was decided by the Supreme Court in Napocor was whether or not the Court of Tax Appeals (CTA) Second Division had jurisdiction to review the decision of the Regional Trial Court (RTC) which concerned a petition for declaratory relief involving real properry taxes. The Supreme Court ruled in the affirmative and explained why the CTA had jurisdiction, thus: "Indeed. the CTA. sitting as Division. has jurisdiction to review by appeal the decisions. rulings and resolutions of the RTC over local tax cases. which includes realproperzy taxes. This is evident from a perusal of the Local Government Code (LGC) which includes the matter of Real Property Taxation under one of its main chapters. Indubitably, the power to impose real property tax is in line with the power vested in the local governments to create their own revenue sources, within the limitations set forth by law. As such, the collection of real property taxes is conferred with the local treasurer rather than the Bureau of Internal Revenue. We, therefore, disagree with the conclusion of the CTA En Bane that real property taxes have always been treated by our laws separately from local taxes. The fact that a separate chapter is devoted to the treatment of real property taxes, and a distinct appeal procedure is provided therefor does not justify an inference that Section 7(a)(3) ofR.A. 9282 pertains only to local taxes other than real property taxes. Rather. the term 'local taxes' in the aforementioned provision should be considered in its general and comprehensive sense. which embraces real properzy tax assessments, in line with the precept Genera!ia verba sunt genera/iter inteligencia-what is generally spoken shall be generally understood. Between the restricted sense and the general meaning of a word, the general must prevail unless it was clearly intended that the restricted sense was to be used. In the words of the Court in Marms v. Chiefof5taff. Where words are used which have both, a restricted and a general meaning, the general must prevail over the restricted unless the nature of the subject matter of the context clearly indicates that the limited sense is intended. Here, the context in which the word 'local taxes' is employed does not clearly indicate that the limited or restricted view was intended by the legislature. In addition, the specification of real property tax assessment under Paragraph (a)(S) of Section 7 of R.A. 9282, in relation to the decisions of the CBAA, is only proper given that the CBAA has no jurisdiction, either original or appellate, over cases involving local taxes other than real property taxes. Based on the foregoing, the general meaning of 'local taxes' should be adopted in relation to Paragraph (a)(3) of Section 7 of R.A. 9282, which necessarily includes real property taxes. Second, as correctly pointed out by petitioner, when the legality or validity of the assessment is in question, and not its reasonableness or correctness, appeals to the LBAA, and subsequently to the CBAA, pursuay

RESOLUTION CTA EB NO. 2474 (CTA AC NO. 209) to Sections 226 and 229 of the LGC, are not necessary." (Underscoring supplied; citations omitted) Napocor, therefore, held that the term "local tax case" in Section 7(a) (3) of R.A. 1125, as amended, should embrace "real property taxes" over which the court a quo had jurisdiction. However, petitioner cannot rely on Napocor to establish that the court a quo has jurisdiction over issues pertaining to license fees imposed by respondent LGU. License fees are clearly outside the ambit of the term "local tax case". WHEREFORE, finding no reversible error in the assailed decision, the instant motion is hereby DENIED for lack of merit. SO ORDERED. rJv. ~ -.., "----- MA. BELEN M. RINGPIS-LIBAN Associate Justice WE CONCUR: Presiding Justice .. ~.;:/ft- t....____ CATHERINE T. MANAHAN Associate Justice .-- JEANMARI On official business MARIA ROWENA MODESTO-SAN PEDRO Associate Justice

RESOLUTION CTA EB NO. 2474 (CTA AC NO. 209) On leave MARIAN IVY F. REYES-FAJARDO Associate Justice !rtuttti~~ LANEE S. CUI-DAVID Associate Justice C~~.'FERk.ER-Fil.ORES Associate Justice