MINDANAO BUS COMPANY, PETITIONER, VS. THE COLLECTOR OF INTERNAL REVENUE, RESPONDENT.

Appeal by certiorari from a decision of the Court of Tax Appeals,
ordering the petitioner-appellant Mindanao Bus Company to pay
P15,704.16, as documentary stamp taxes for the period from January 1,
1948 up to September 16, 1953. The decision sought to be reviewed
modifies an assessment by the Collector of Internal Revenue eliminating
the compromise penalty imposed by the Collector.

Petitioner
is a common carrier engaged in transporting passengers and freight by
means of auto-buses in Northern Mindanao, under certificates of public
convenience issued by the Public Service Commission. Sometime in
September, 1953, an agent of the respondent Collector of Internal
Revenue examined the books of accounts of the petitioner and found that
the freight tickets used by it do not contain the required documentary
stamp tax. Said agent took with him 500 booklets of tickets used by the
petitioner and counted the freight receipts contained therein. He
counted 1,305 freight tickets. Assuming that each freight ticket covers
baggage valued at more than P5.00, the Collector of Internal Revenue,
upon recommendation of the agent, assessed against the petitioner the
sum of P15,704.16, exclusive of compromise penalty, as documentary
stamp taxes from January 1, 1948 up to September 16, 1953. The tax is
computed in the following manner:

Number of registered booklets of 100 tickets each,					86,282
	from Oct. 29, 1948 to September 16, 1953
Number of booklets assessed to have been used			14,000
	from Jan. 1, 1948 to Oct. 31, 1948
			=========
	Total Number of Booklets Used from Jan. 1, 1948 to Sept. 16, 1953		100,282
			=========
Number of Ticket Booklets verified as basis for			500
	assessment
Number of freight tickets per booklet of 100 tickets					2.61
	each		=========
	Total number of tickets booklets used from Jan. 1, 1948 to Sept. 16, 1953		100,282
Multiply by average number of freight tickets per					2.61
	booklet
			=========
Documentary stamp tax on 261,736 Freight Tickets			P15,704.16
	Total Amount Due and Collectible		P15,704.16
			=========

The
assessment of the Collector was appealed to the Court of Tax Appeals.
In that court the respondent Collector was declared in default and the
petitioner presented its evidence. The tax court, modified the decision
of the Collector and ordered the petitioner to pay only P15,704.16 as
documentary stamp tax for the period above-stated, without any
compromise penalty. Upon petitioner’s motion for reconsideration, the
court resolved to reopen the case, for the sole purpose of allowing the
petitioner to present as evidence the 500 booklets and 17 sackful,
respectively, of passenger and freight tickets of the petitioner.
During the rehearing of the case, the petitioner, however, failed to
submit the said evidence; instead it presented stub tickets, Exhibits
“X-1” and “X-2”, which were already in its possession during the first
hearing, the Court of Tax Appeals denied the motion for
reconsideration. Hence this appeal.

In this Court, petitioner-appellant presents the following assignments of error:

1. THE
   TAX COURT ERRED IN PRESUMING THE CORRECTNESS OF THE ASSESSMENT, AND IN
   NOT FINDING SAME NOT BASED UPON THE BEST EVIDENCE OBTAINABLE, BUT IS
   ARBITRARY. SPECULATIVE, HYPOTHETICAL, GROSSLY EXAGGERATED AND WITHOUT
   FACTUAL BASIS.

2. THE TAX COURT ERRED
   IN HOLDING THAT THE TICKETS ISSUED FOR EXCESS BAGGAGE ARE BILLS OF
   LADING SUBJECT TO THE DOCUMENTARY STAMP TAX.

3. THE TAX COURT ERRED IN NOT FINDING AND DECLARING SECTION 127 OF
   REGULATION NO. 26 OF THE DEPARTMENT OF FINANCE UNCONSTITUTIONAL.

4. THE TAX COURT ERRED IN HOLDING THE PETITIONER LIABLE AND REQUIRING IT TO PAY THE TAX ASSESSMENT OF P15,704.16.

In support of its first assignment of error, the petitioner-appellant
claims that the computation made by the respondent is not based upon
the best available evidence, but on mere presumptions. This claim is
devoid of merit. The agent of the Bureau of Internal Revenue who
investigated the petitioner’s books of accounts found it impossible to
count one by one the freight tickets contained in used booklets dumped
inside the petitioner’s bodega, because the booklets were so numerous
most of them were either torn or destroyed. The procedure followed by
said agent, which is the average method, in ascertaining the total
number of freight tickets used during the period under review can not
be impugned because an actual count of the freight tickets is
practically impossible. The average method is the only way by which the
agent could determine the number of booklets used during the period in
question.

The agent also correctly assumed that the value of
the goods covered by each freight ticket is not less than P5.00. It is
a common practice of passengers in the rural areas not to secure
receipts for cargoes of small value and to demand receipts only for
valuable cargo (Inter-provincial Autobus Co., Inc. vs.
Collector of Internal Revenue, 98 Phil., 290; 52 Off. Gaz. [2] 791). If
the freight tickets were issued, the baggage carried must have been
valuable enough.

On the other hand, it was the duty of
petitioner to present evidence to show inaccuracy in the above method
of assessment (Inter-provincial Autobus Co. Inc. vs. Collector, supra; Perez vs. C. T. A., 101 Phil., 630; Perez vs. C. T, A., et al., G. R. No. L-10507, May 30, 1958; Government of P. I. vs.
Monte de Piedad, 35 Phil., 42), but it failed to do so. The claim of
petitioner that the freight tickets issued by it are not bills of
lading subject to documentary stamp tax must also be dismissed in view
of our ruling in the case of Inter-provincial Autobus Co., Inc. vs. Collector, supra:

“But
the claim that freight tickets of bus companies are not bills of lading
or receipts within the meaning of the Documentary Stamp Tax Law is
without merit. Bills of Lading, in modern jurisprudence, are not those
issued by masters of vessels alone; they now comprehend all forms of
transportation, whether by sea or land, and includes the receipts for
cargo transported.

“The term ‘bill of lading’ is frequently
defined, especially by the older authorities as a writing signed by the
master of a vessel acknowledging the receipt of goods on board to be
transported to a certain port and there delivered to a designated
person or on his order. This definition was formulated at a time
when goods were principally transported by sea and, while adequate in
view of the conditions existing at that early day, is too narrow to
suit present conditions. As comprehending all methods of
transportation, a bill of lading may be defined as a written
acknowledgment of the receipt of goods and an agreement to transport
and to deliver them at a specified place to a person named or on his
order. Such instruments are sometimes called ‘shipping receipts,’
‘forwarders’ receipts,’ and ‘receipts for transportation’. The
designation, however, is not material, and neither is the form of the
instrument. If it contains an acknowledgment by the carrier of the
receipt of goods for transportation, it is, in legal effect, a bill of
lading.” (9 Am. Jur. 662; Italics supplied)

“Section 227 of
the National Internal Revenue Code imposes the tax on receipts for
goods or effect shipped from one port or place to another port or place
in the Philippines. The use of the word place after port and of the
word ‘receipt’ shows that the receipts for goods shipped on land are
included.”

As its third assignment of error, the
petitioner-appellant questions the validity of Section 127 Regulation
No. 26, insofar as it provides that chits, memoranda and other papers
not in the usual commercial form of bill of lading, when used by the
common carrier in the transportation of goods for the collection of
fares, are to be considered bill of lading subject to documentary stamp
tax, alleging that said section is beyond the powers of the Secretary
of Finance, which are contained in Section 388 of the Tax Code, this
argument should also be dismissed for lack of merit. As the Solicitor
General correctly argues, the validity of Section 127 of Regulation No.
26 should be upheld under the principle of legislative approval by
reenactment. Section 127 of said regulation sought to implement
Sections 1449 (q) and (r) of the Revised Administrative
Code, and the latter provisions were reenacted in Section 227 of the
National Internal Revenue Code. Section 127 is in the same Regulations
as Section 121. We are quoting hereunder a portion of the decision of
this Court in the case of Inter-provincial Autobus Co., Inc. vs. Collector, 98 Phil., 290; 52 Off. Gaz., (2) 791, supra, to sustain our ruling that the third assignment of error in the case at bar should be dismissed:

“Another
reason for sustaining the validity of the regulation, may be found in
the principle of legislative approval by reenactment. The regulations
were approved on September 16, 1924. When the National Internal Revenue
Code was approved on February 18, 1939, the same provisions on stamp
tax bills of lading and receipts were reenacted. There is a presumption
that the legislature reenacted the law on the tax with full knowledge
of the contents of the regulations then in force regarding bills of
lading and receipts, and that it approved or confirmed them because
they carry out the legislative purpose.”

The fourth assignment of error, being only a consequence of the first three, the same should also be dismissed.

Wherefore, the decision appealed from should be affirmed, with costs against petitioner-appellant.

Bengzon, Acting C. J., Padilla, Bautista Angelo, Concepcion, Reyes, J. B. L., Barrera, Paredes, and Dizon, JJ., concur.