COMMISSIONER OF INTERNAL REVENUE, PETITIONER, VS. HAWAIIAN AND PHILIPPINE COMPANY, RESPONDENT.

DIZON, J.:

This is a petition filed by the Commissioner of Internal Revenue for the
review of the decision of the Court of Tax Appeals in C.T.A. Case No. 598
ordering him to refund to respondent Hawaiian-Philippine Company the amount of
P8,411.99 representing fixed and percentage taxes assessed against it and which
the latter had deposited with the City Treasurer of Silay, Occidental Negros.

The undisputed facts of this case, as found by the Court of Tax Appeals, are
as follows:

“The petitioner, a corporation duly organized in accordance with law, is
operating a sugar central in the City of Silay, Occidental Negros. It produces
centrifugal sugar from sugarcane supplied by planters. The processed sugar is
divided between the planters and the petitioner in the proportion stipulated in
the milling contracts, and thereafter is deposited in the warehouses of the
latter.(Pp. 4-5, t.s.n.) For the sugar deposited by the planters, the petitioner
issues the corresponding warehouse receipts or ‘quedans’. It does not collect
storage charges on the sugar deposited in its warehouse during the first 90 days
period counted from the time it is extracted from the sugarcane. Upon the lapse
of the first ninety days and up to the beginning of the next milling season, it
collects a fee of P0.30 per picul a month. Thenceforth, if the sugar is not yet
withdrawn, a penalty of P0.25 per picul or fraction thereof a month is imposed.
(Exhibits ‘B-l,’ ‘C-l’, ‘D-1’, ‘B-2″, ‘C-2”, p. 10, t.s.n.)

“The storage of sugar is carried in the books of the company under Account
No. 5000, denominated ‘Manufacturing Cost Ledger Control’; the storage fees
under Account No. 5216-20; the expense accounts of the factory under Account
No.5200; and the so-called ‘Sugar Bodega Operations’ under Account No. 5216,
under which is a Sub-Account No. 20, captioned, ‘Credits’. (Pp. 16-17, t.s.n,,
Exhibit ‘F’.) The collections from storage after the lapse of the first 90 days
period are entered in the company’s books as debit to CASH, and credit to
Expense Account No. 5216-20 (p. 18, t.s.n.)

“The credit for storage charges decreased the deductible expense resulting in
the corresponding increase of the taxable income of the petitioner. This is
reflected by the entries enclosed in parenthesis in Exhibit ‘G’, under the
heading “StorageCharges1. (P. 18, t.s.n.) The alleged reason for this accounting
operation is that, inasmuch as the ‘Sugar Bodega Operations’ is considered as an
expense account, entries under it are ‘debits’. Similarly, since ‘Storage
Charges’ constitute ‘credit’, the corresponding figures (see Exhibit ‘C’) are
enclosed in parenthesis as they decrease the expenses of maintaining the sugar
warehouses.

“Upon investigation conducted by the Bureau, it was found that during the
years 1949 to 1957, the petitioner realized from collected storage fees a total
gross receipts of P212,853.00, on the basis of which the respondent determined
the petitioner’s liability for fixed and percentage taxes, 25% surcharge, and
administrative penalty in the aggregate amount of P6,411.99 (Exhibit ‘5’, p. 11,
BIR rec.)

“On October 20, 1958, the petitioner deposited, the amount of P8,411.99 with
the Office of the City Treasurer of Silay. (Exhibits ‘I’ and ‘1-1’, pp. 59-60,
CTA rec.) Later, it filed its petition for review before this Court (Exhibit
‘K’, p. 25, CTA rec.)”

After due hearing the Court of Tax Appeals rendered the appealed decision.

The only issue to be resolved in the case at bar is whether or not, upon the
facts stated above, petitioner is a warehouseman liable for the payment of the
fixed and percentage taxes prescribed in Sections 182 and 191 of the National
Internal Revenue Code which read as follows:

“Sec. 182. FIXED TAXES – (A) ON BUSINESS(1) PERSONS SUBJECT TO PERCENTAGE
TAX. – Unless otherwise provided every person engaging in a business on which
the percentage tax is imposed shall pay a fixed annual tax of twenty pesos. x x
x.”

“Sec. 191. PERCENTAGE TAX ON ROAD, BUILDING,IRRIGATION, ARTESIAN TOLL,
WATERWORKS, AND OTHER CONSTRUCTION WORK CONTRACTORS, PROPRIETORS OR OPERATORS OF
DOCKYARD, AND OTHERS, x x x warehousemen; plumbers, smiths; house or sign
painters; lithographers, publishers, except those engaged in the publication or
printing and publication of any newspaper, magazine, review or bulletin which
appear at regular intervals, with fixed prices for subscription and sale, and
which is not devoted principally to the publication of advertisements; printers
and bookbinders, business agents and other independent contractors, shall pay a
tax equivalent to THREE PERCENTUM of their gross receipts, x x
x.”

Respondent disclaims liability under the legal provisions quoted above,
alleging that it is not engaged in the business of storing its planters’ sugar
for profit; that the maintenance of its warehouses is merely incidental to its
business of manufacturing sugar and in compliance with its obligation to its
planters. We find this to be without merit.

It is clear from the facts of the case that, after manufacturing the sugar of
its planters, respondent stores it in its warehouses and issues the
corresponding “quedans” to the planters who own the sugar; that while the sugar
is stored free during the first ninety days from the date the “quedans” are
issued, the undisputed fact is that, upon the expiration of said period,
respondent charges and collects storage fees that for the period beginning 1949
to1957, respondent’s total gross receipts from this particular enterprise
amounted to P212,853.00.

A warehouseman has been defined as one who receives and stores goods of
another for compensation (44 Words and Phrases, p. 635) For one to be considered
engaged in the warehousing business, therefore, it is sufficient that he
receives goods owned by another for storage, and collects fees in connection
with the same. In fact, Section 2 of the General Bonded Warehouse Act, as
amended, defines aware houseman as “a person engaged in the business of
receiving commodity for storage.”

That respondent stores its planters’ sugar free of charge for the first
ninety days does not exempt it from liability under the legal provisions under
consideration. Were such fact sufficient for that purpose, the law imposing the
tax would be rendered ineffectual.

Neither is the fact that respondent’s warehousing business is carried in
addition to, or in relation with, the operation of its sugar central sufficient
to exempt it from payment of the tax prescribed in the legal provisions; quoted
heretofore. Under Section 178 of the National Internal Revenue Code, the tax on
business is payable for every separate or distinct establishment or place where
business subject to the tax is conducted; and one line of business or occupation
does not become exempt by being conducted with some other business or occupation
for which such tax has been paid.

Lastly, respondent’s contention that the imposition of the tax under
consideration would amount to double taxation is likewise without merit. As is
clear from the facts, respondent’s warehousing business, although carried on in
relation to the operation of its sugar central, is a distinct and separate
business taxable under a different provision of the Tax Code. There can be no
double taxation where the State merely imposes a tax on every separate and
distinct business in which a party is engaged. Moreover, in Manufacturers Life
Insurance Co. vs. Meer, 89 Phil., 351, City of Manila vs. Interisland Gas
Service, 99 Phil., 847, We have ruled that there is no prohibition against
double or multiple taxation in this jurisdiction.

WHEREFORE, the decision appealed from is reversed and set aside, with costs.

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