G.R. No. L-21183. September 27, 1968
VICTORIAS MILLING CO., INC PLAINTIFF-APPELLANT VS. THE MUNICIPALITY OF VICTORIAS, PROVINCE OF NEGROS OCCIDENTAL, DEFENDANT-APPELLANT,
SANCHEZ, J.:
This case calls into question the validity of Ordinance No.1, series of 1956, of the Municipality
of Victorias,
Negros Occidental.
The disputed ordinance was approved by the, municipal council of Victorias on September 22, 1956 by way of an amendment to two
municipal ordinances separately imposing license taxes on operators of sugar
centrals[1]
and sugar refineries.[2]
The changes were: with respect
to sugar centrals, by increasing the rates of license taxes; and as to sugar
refineries, by increasing the rates of license taxes as well as the range of
graduated schedule of annual output capacity.
Ordinance No. 1[3]
is labeled “An Ordinance Amending Ordinance No. 25, Series of 1953 and
Ordinance No. 18, Series of 1947
on Sugar Central by Increasing the Rates on Sugar Refinery Mill by Increasing
the Range of Graduated
Schedule on Capacity Annual Output
Respectively”. It was, as the
ordinance itself states, enacted pursuant to the taxing power conferred by ComÂmonwealth
Act 472. By Section 1 of the Ordinance;
“Any person, corporation or other forms of Companies, operating Sugar
Central or engage[d] in the Manufacture of centrifugal sugar shall be required
to pay the following annual municipal license tax, payable quarterly, to wit: x
x x“. Section 1 referred to prescribes a wide”
range of schedule. It starts with a
sugar central with mill having an annual output capacity of not less than
50,000 piculs of centriÂfugal sugar, in which case an
annual municipal license tax of P1,000.00 is provided. Depending upon the annual output capacity the
schedule of taxes continues with P2, 000.00
progressively upward in twelve other grades until an output capacity of
1,500,001 piculs or more shall have been
reached. For this, the annual tax is
P40, 000.00. The tax on sugar refineries
is likewise calibrated with similar rates, starts with P1,000.00 for a refinery
with mill having an annual’ output capacity of not less than 25,000 bags of 100
lbs. of refined sugar. Then, it
continues with the second bracket of from 25,001 bags to 75,000 bags of 100
lbs. Here, the municipal license tax is
P1,500.00. Then follow the other rates
in the graduated scale with the ceiling placed at a capacity of 1,750,001 bags or
more. The annual municipal license tax
for the last mentioned output capacity is P40,000.00.
Of importance arc the provisions of Section 1(m) relating to
sugar centrals and Section 2(m) covering sugar refineries with specific
reference to the maximum annual license tax, viz:
“SECTION No. 1 – Any person, corporation or other forms of
Companies, operating Sugar Central or engage[d] in the manufacture of
centrifugal sugar shall be required to pay the following annual municipal
license tax, payable quarterly, to wit:
x x x
(m) Sugar Central with mill having a capacity of producing an
annual output of from 1,500,001 piculs or more shall
be required to pay an annual municipal license tax of………………….. P
P40,000.00.
SECTION No, 2. – Any
person, corporation or ‘other forms of Companies, shall be required to pay an
annual municipal license tax for the operation of Sugar Refinery Mill at the
following rates:
x x x
(m) Sugar Refinery with mill having a capacity of producing an
annual output of from 1,750,001 bags of 100 lbs. or more shall be required to
pay an annual municipal license tax of ………………..…P40,
000. 00″
For, the production of plaintiff Victorias
Milling Co., Inc. in both its sugar central and its sugar refinery located in
the Municipality of Victorias comes within these
items in the schedule.
Plaintiff filed suit below[4]
to ask for judgment declaring Ordinance No. 1, series of 1956, null and void;
ordering the refund of all license taxes paid and to be paid under protest;
directing the officials of Victorias and the Province of Negros
Occidental to observe, during the pendency of the
action, the provisions of section 357 of the Revised Manual of Instructions to
Treasurers of Provinces, Cities and Municipalities, 1954 edition,[5]
regarding the treatment of license taxes paid under protest by virtue of a
disputed ordinance; and other reliefs.[6]
The reasons put forth by plaintiff are that: (a) the ordinance
exceeds the amounts fixed in Provincial Circular 12-A issued by the Finance
Department on February 27, 1940; (b) it is
discriÂminatory since it singles out plaintiff which is the only
operator of a sugar central and a sugar refinery within the jurisdiction of
defendant municipality; (c) it constitutes double taxation; and (d) the
national government has pre-empted the field of taxation with respect to sugar
centrals or refineries.
Upon the complaint as supplemented and amended, and the answer
thereto, and following hearing on the merits, the trial court rendered its
judgment. After declaring that “[t]here is no doubt that” the
ordinance in question “refers to license taxes or fees”, and that
“[i]t is settled that a license tax should be
limited to the cost of licensing, regulating and surveillance”,[7]
the trial court ruled that said license taxes in dispute are unreasonable,[8]
and held that: “If the defendant
has the power to tax the plaintiff for purposes of revenue, it may do so by
proper municipal legisÂlation, but not in the guise of a license tax”.[9] The court added: “The Court is not, however, prepared to
order the refund of all the license taxes paid by the plaintiff under protest
and amounting, up to the second quarter of 1960, to P280,000.00, considering
that the plaintiff appears to have agreed to the payment of the license taxes
at the rates fixed prior to Ordinance No. 1, series of 1956; that the defendant
had evidently not complied with
the provisions of Section 357 of the Revised Manual of Instructions to
Treasurers of Provinces, Cities and Municipalities, 1954 Edition, as the
plaintiff herein seeks an order enjoining the defendant and its appropriate
officials to carry out said provisions; that the financial position of the
defendant would surely be disrupted if ordered
to refund, while the plaintiff may perhaps easily forego or forget what it had
already parted with.”[10] It disposes of the suit in the following manner:
“WHEREFORE, judgment is
rendered (a) decÂlaring that Ordinance No. 1, series of 1956, of the
municipality of Victorias, Negros
Occidental, is invalid, (b) ordering all officials of the defendant to observe
the provisions of Section 357 of the .Revised Manual of instructions to
Treasurers of Provinces, Cities and Municipalities 1954 Edition,with
particular reference to any license taxes paid by the plaintiff under said
Ordinance No. 1, series of 1956, after notice of this decision; and (c)
ordering the defendant to refund to the plaintiff any and all such license
taxes paid under protest after notice of this decision”.[11]
Both plaintiff and defendant appealed direct to this Court.
Plaintiff questions that portion of the decision denying the refund of the
license taxes paid under protest in the amount Of P280, 000, covering the
period from the first quarter of 1957 to the second quarter of 1960; and balked
at the court’s order limiting refund to “any and all such license taxes
paid under protest after notice of this decision”. Defendant, upon the other hand, challenges
the correctness of the court’s decision invalidating Ordinance No, 1, series of 1956.
The questions raised in the appeals will be discussed in their
proper sequence.
1. We first grapple with the
threshold question: Was Ordinance No. 1, series of 1956, passed by defendant’s
municipal council as a regulatory enactment or as a revenue measure?
The trial court says, and plaintiff seconds, that the amounts set
forth in the ordinance in question did exceed the cost of licensing regulating and surveillance, and that
defendant cannot impose a tax – for revenue – in the guise of a police or a
regulatory measure Our finding, however, is the other way.
The ordinance itself recites that its source of taxing power
emanates from Commonwealth Act 472
Section 1 of which reads:
“Sec. 1. A municipal
council or municipal district council shall have authority to impose municipal
license taxes upon persons engaged in any occupation or business, or exercising
privileges in the municiÂpality or municipal district, by requiring them to
secure licenses at rates fixed by the municipal council, or municipal district
council, and to collect fees and charges for services rendered by the
municipality or municipal district and shall otherwise have power to levy for
public local purposes, and for school purÂposes, including teachers’ salaries,
just and uniform taxes other than percentage taxes and taxes on specified
articles”,
Under the statute just quoted and pertinent jurisprudence, a
municipality is authorized to impose three kinds of licenses: (1) license for
regulation of useful occupations or enterprises; (2) license for restriction or
regulation of non-useful occupations or enterprises; and (3) license for
revenue.[12] The first two easily fall, within the broad
police power granted under the general welfare clause.[13] The third class, however, is for revenue
purposes. It is not a license fee,
properly speaking, and yet it is generally so termed. It rests on the taxing power, that taxing
power must be expressly conferred by statute upon the municiÂpality.[14] It is so granted under Commonwealth Act 472.
To be recalled at this point is that Ordinance No. 1, series of 1956,
is but an amendment of Ordinance No. 18, series of 1947, in reference to
refineries, and Ordinance No. 25, series of 1953, covering sugar centrals. Ordinance No. 18 imposes “municipal,
taxes on persons, firms or corporations operating refinery mills in this
municipality”.[15] Ordinance No. 25 speaks of municipal taxes
“relative to the output, of the sugar centrals”.[16]
What are these taxes for? Resolution No. 60 of the municipal
council of Victorias,[17]
adopted also on September 22, 1956 in conjunction with Ordinance. No 1, series of 1956, furnishes a ready
answer. It reads in part:
“WHEREAS, the Municipal Treasurer informed the Municipal
Council of the revenue of the MuniciÂpality and the heavy obligations which confront
it because of the implementation of Minimum Wage Law on the salaries arid wages
it pays to its municipal employees and laborers thus greatly draining the
Municipal Treasury;
WHEREAS, this local administration is committed to the plan of
ameliorating the deplorable situation existing in the barrios, sitios and rural areas by giving them essential and
necessary facilities calculated to improve conditions thereat thru improvements
of roads and feeder roads;
WHEREAS, one of the causes of the municiÂpality’s financial
difficulty is low rates of
municipal taxes imposed by some of the ordinances enacted by the local
legislative body;
WHEREAS, [in] x x x the ordinances known as
Ordinance No. 25, Series of 1953, dealing on the operation of
Sugar Central, and Ordnance No. 18, Series of 1947, which exclusively deals
with the operation of Sugar Refinery Mill, the rates so
given are rates suggested and determined by the Provincial Circular No. 12-A,
dated February 27, 1940 issued by the
Department of Finance’ as regards to Sugar Centrals;
WHEREAS, the
Municipal Council has come to the conclusion that the rates provided for in
such ordinances are no longer adequate if made in keeping with the present high
cost of living;
WHEREAS. the Municipal Council has also taken
cognizance of the fact that the price of sugar per picul
today is more than twice its pre-war average price; x x
x“.[18]
Given the purposes just mentioned, we find no warrant in logic to
give our assent to the view that the ordinance in question is solely for
regulatory purpose. Plain is the meaning
conveyed. The ordinance is for raising
money. To say otherwise is to misÂread the purpose of the ordinance.
We should not hang so heavy a meaning on the use of the term
“municipal license tax”. This
does not necessarily connote the idea that the tax is imposed as the lower
court would want it to mean a revenue measure in the guise of a license
tax. For really, this runs counter to
the declared purpose to make money.
Besides, the term “license tax” has not acquired a
fixed meaning. It is often “used
indiscriminately to designate impositions exacted for the exercise of various
privileges”.[19] It does not refer solely to a license for
regulation. In many instances, it refers
to “revenue-raising exactions on privileges or activities”.[20] On the other hand, license fees
are commonly called taxes. But, legally
speaking, the latter are “for the purpose of raising revenues in contrast
to the former which are imposed “in the exercise of police power for
purposes of regulation”[21]
We accordingly say that the designation given by the municipal
authorities does not decide whether the imposition is properly a license tax or a license fee. The determining factors are the purpose and
effect of the imposition as may be apparent from the provisions of the
ordinance.[22]
Thus, “[w]hen no police inspection, superÂvision, or regulation is
provided, nor any standard set for the applicant[23]
to establish, or that he agrees to attain or maintain, but any and all persons
engaged in the business designated, without qualification or hindrance, may
come, and a license on payment of the stipulated sum will issue, to do
business, subject to no prescribe rule of conduct and under no guardian eye,
but according to the unrestrained judgment
or fancy of the applicant and licensee, the presumption is
strong that the power
of taxation, and not the police power, is being exercised.”[24]
Precisely because of these considerations the present imposiÂtion
must be treated as a levy for revenue purposes.
A quick glance at the big amount of maximum annual tax set forth in the
ordinance, P40,000.00 for sugar centrals, and P40,000,00 for sugar refine will
readily convince one that the tax is really a revenue tax. And then, we read in he ordinance nothing
which would as much as indict that the tax imposed is merely for police
inspection, supervision or regulation.
Our view that the tax imposed by the ordinance is for revenue
purposes finds support in judicial pronouncements which have gained foothold in
this jurisdiction. In Standard Vacuum
vs. Antigua,[25]
this Court had occasion to pass upon a similar ordinance. In cateÂgorical terms, we there stated: “We are satisfied that the graduate
license tax imposed by the ordinance in question is an occupation tax imposed not
under the police or regulatory power of the municiÂpality but by virtue of its
taxing power for purposes of revenue, and is in accordance with the last part
of Section 1 of Commonwealth Act No. 472.
It is, therefore, valid”.[26]
The present case is not to be analogized with, Panaligan vs. City of Tacloban
cited in the decision below.[27] For there, the inspection fee sought to be
collected – upon every head of specified animals to be transported out of the
City of Tacloban (P2.00 per hog, P10. 00 per cow and P20.00 per carabao) – was in reality an export tax specifically
withheld from municipal taxing power under Section 2287 of the Revised
Administrative Code.
So also do we say that the cases of Pacific Commercial
vs. Romualdez,[28] Lacson vs. City of Bacolod,[29]
and Santos vs, Municipal Government of Caloocan,[30]
used by plaintiff as reference are entirely inapposite. In Pacific Commercial, the tax involved – on
frozen meat – was nullified because tax measures on cold store not then within the legislative grant to
the City of Manila. In Lacson
the City of Bacolod
taxed every admission ticket sold in the movie-houses. And justification for this imposition was
moored to the general welfare clause of the city charter. This Court held the ordinance ultra vires for the reason
that the authority to tax cannot be derived from the general welfare
clause. In Santos,
the taxes in controversy were internal organ
fees, meat inspection fees and coral fees, separate, from the slaughter
or slaughterhouse fees. In annulling the
taxes there questioned, this Court declared: “[w]hen the
Council ordained the payment of internal organs fees, meat inspection fees and
coral fees, aside from the slaughter or slaughterhouse fees, it overstepped the
limits of its statutory grant [Sec. I, C.A.
655]. Only one fee was allowed by that,
law to be charged and that was slaughter or slaughterhouse fees”.
In the cases cited then, the tax ordinances did not find plain
and clear statutory prop. Such infirmity
is not present here.
We, accordingly, rule that Ordinance No. 1, series of 1956, of
the Municipality of Victorias, was promulgated
not in the exercise of the municipality’s regulatory power but as a revenue
measure tax on occupation or business.
The authority to impose such tax is backed by the express grant of power
in Section 1 of Commonwealth Act 472.
2. Not that the disputed ordinance lacks the
imprimatur of the Secretary of Finance required in paragraph 2, Section 4, of
Commonwealth Act 472. This legal
provision necessitates such approval “[whenever the rate of fixed
municipal license taxes on businesses not excepted in this Act or otherwise
covered by the preceding paragraph and subject to the fixed annual tax imposed
in section one hundred eighty-two of the National internal Revenue Law, is in
excess of fifty pesos per annum; x x x“.
The ordinance here
challenged was recommended by the Provincial Board of Negros
Occidental in its resolution (No. 1864) of October 26, 1956.[31] And,
the Undersecretary of Finance in his letter to the municipal council of Victorias on December 18, 1956 approved said ordinance. But considering
that it is amenÂdatory in nature, that approval was coupled with the mandate
that the ordinance “should take effect at the beginning of the ensuing
calendar year [1957] pursuant to Section 2309 of the Revised Administrative
Code.”[32]
3. Plaintiff argues that the municipality is
bereft of authority to enact the ordinance in question because the national
government “had preempted it from entering the field of taxation of sugar
centrals and sugar refineries”.[33] Plaintiff seeks refuge in Section 189 of the
National Internal Revenue Code which subjects proÂprietors or operators of
sugar centrals or sugar refineries to percentage tax.
The implausibility of
this position is at once apparent. We are not dealing here with
percentage tax. Rather, we are concerns
with a tax specifically for operators of sugar centrals and sugar
refineries. The rates imposed are based
on the maximum annual output capacity.
Which is not a
percentage. Because it is not a share.
Nor is it a tax based on the amount of the proceeds realized
out of the sale of sugar, centrifugal or refined.[34]
What can be said at most
is that the national government has preempted the field of percentage taxation,
Section 1 of Common Act 472, while granting municipalities power to levy
taxes, expressly , removes from them the power to exact “percentage
taxes”.
It is correct to say that preemption in the matter of taxation
simply refers to an instance where the national government elects to tax a
particular area, impliedly withholding from the local government the: delegated
power to tax the same field. This
doctrine primarily rests upon the
intention of Congress.[35] Conversely, should Congress allow municipal corporations
to cover fields of taxation it already occupies, then the doctrine of
preemption will not apply.
In the case at bar, Section 4(1) of Commonwealth Act 472 clearly
and specifically allows municipal councils to tax persons engaged in “the
same businesses or occupation” on, which “fixed internal revenue
privilege taxes” are “regularly imposed by the National
Government”. With certain
exceptions specified in Section 3 of the same statute. Our case does not fall within the
exceptions. It would therefore be futile
to argue that Congress exclusively reserved to the national government the
right to impose the disputed taxes.
We rule that there is no preemption.
4. Petitioner advances the
theory that the ordinance is excessive.
An ordinance carries with it the presumption of validity.
The question of
reasonableness though is open to judicial inquiry. Much should
be left thus to the discretion of municipal authorities. Courts will go slow in writing off an
ordinance as unreasonable unless the amount is so excessive as to be
prohibitive, arbitrary, unreasonable, oppressive,
or confiscatory.[36] A rule which has gained acceptance is that factors relevant to such an
inquiry are the municipal conditions
as a whole and the nature of the business
made subject to imposition.[37]
Plaintiff has however not
sufficiently proven that, taking these factors together, the license taxes are unreasonable. The presumption of validity
subsists. For, plaintiff has limited
itself to insisting that the amounts
levied exceed the cost of regulation and that the municiÂpality has
adequate funds for the alleged purposes as evidenced by the municipality’s cash surplus
for the fiscal year ending 1956.
The cost of regulation
cannot be taken as a gauge, if the municipality really intended to enact a
revenue ordinance. For, “if the
charge exceeds the expense of issuance of a license and costs of regulation, it
is a tax”.[38] And
if it is, and it is validly imposed,
as in this case, “the rule that license fees for
regulation must bear a reasonable relation to the expense of the regulation has no application”.[39]
And then, a cash surplus
alone cannot stop a municipality from enacting a revenue ordinance increasing
license taxes in anticipation of municipal needs. Discretion to determine the amount of revenue
required for the needs of the municipality is lodged with the municipal
authorities. Again, judicial intervention steps in only when there is a flagrant, oppressive and excessive abuse of power by
said municipal authorities.[40]
Not that defendant
municipality was without reason. On February
27, 1940, the
Secretary of Finance, later President, Manuel A. Roxas, issued Provincial Circular 12-A.
In that circular, the then Finance Secretary stated that his
“Department has reached the conclusion that a tax on the basis of one
centavo for every picul of annual output capacity of
sugar centrals x x x would
be just and reasonable”. At that
time, the price of sugar was around P6.00 per picul. Sixteen years later – 1956 – when Ordinance
No. 1 was approved, the market quotation for export sugar ranged from P12.00 to
P15.00 per picul.[41] And yet, since then the rate per output capacity of a sugar central in
Ordinance No. 1 was Merely from one centavo to two centavos. There is a statement in the municipality’s
brief,[42] that thereafter the price of sugar had
never gone below P16. 00 per picul; instead it had gone up.
The reasonableness of the
ordinance may not be disputed. It is not
confiscatory.
There was misapprehension
in the decision below in its stateÂment that the increase of rates for
refineries was 2,000%. We should not
overlook the fact that the original maximum rate covering refineries in
Ordinance No. 18, series of 1947, was P2,000.00; but that was only for a
refinery with an output capacity of 90,000 or more sacks. Under section 2(c) of Ordinance No. 1, series
of 1956, where the refineries have an output capacity of from 75,001 bags to 100,000 bags, the tax remains at
P2,000.00. From hereon, the ordinance provides for ten more
scales for the graduation of the tax depending upon the output capacity
(P3,000.00, P4,000.00, P5,000.00, P10,000,
P15,000.00, P20,000.00,
P25,000.00, P30,000.00, P35,000.00 and P40,000.00). But it is only where a refinery has an output
capacity of 1,750,001 or more bags that the present ordinance imposes a tax of P40,000.00. The happenstance that plaintiff’s refinery is
in the last bracket calling upon
it to pay P40,000.00 per annum
does not make the ordinance in question unreasonable.
Neither may we tag
the ordinance with excessiveness if we consider
the capital invested by plaintiff in both its sugar central and sugar refinery and its annual
income from both. Plaintiff’s capital investment in the sugar
central and sugar refinery is more or less P26, 000, 000.00.[43] And here are its annual net income: for the
year 1956 – P3,852,910; for the year 1957 – P3,854.520; for the year
1958 – P7,230,493; for the year 1959 – P5,951,187; and for the year 1960 – P7,809,250.[44] If these figures mean anything at all, they
show that the ordinance in question is neither confiscatory nor unjust and unreasonable.
5. Upon the averment that
in the Municipality of Victorias plaintiff is the
only operator of a sugar central and sugar refinery, plaintiff now presses its
argument that Ordinance No. 1, series of
1956, is discriminatory. The ordinance
does not single out Victorias as the only object of the
ordinance. Said ordinance is made to
apply any sugar central or sugar refinery which may happen to operate in the municipality. So it is, that the fact that plaintiff is
actually the sole operator of a
sugar central and a sugar refinery does not make ordinance discriminatory.
Argument along the same lines was
rejected in Shell Co.
of P.I., Ltd
vs. Vaño,[45]
this Court holding that the circumstance “that there is no other person in
the locality who exercises” the occupation designated as installation manager “does not make the
ordinance discriminatory and hostile, inasmuch as it is and will be applicable
to any person or firm who exercises such calling or occupation”. And in Orrnoc
Sugar Company, Inc. vs,
Municipal Board of Ormoc
City,[46]
declaratory relief was sought to
test the validity of a municipal ordinance which provides a city tax of twenty centavos per picul of centrifugal
sugar and one per centum on the gross sale of its derivatives and by-products
“produced by the Ormoc Sugar Company, Incorporated,
or by any other sugar mill in Ormoc City”. Mr. Justice Enrique Fernando, delivering the
opinion of this Court, declared that ordinance
did not suffer “from a constitutional or statutory infirmity”. And yet, in Ormoc
it is to be observed that Section 1 of the ordinance spelled out Ormoc Sugar Company, Incorporated specifically by name.
Not even the name of plaintiff herein was ever mentioned in the ordinance now disputed.
No discrimination
exists.
6. As infirm plaintiff’s
stand that its business is not confined to the Municipality
of Victorias. It suffices that plaintiff engages in a
business or occupation subject to
an exaction by the municipality – within the territorial boundaries of that
municipality. Plaintiff’s sugar central and sugar refinery are located within Municipality
of Victorias. In this central and refinery, plaintiff
manufactures centrifugal sugar and refined sugar, respectively.
But plaintiff insists that plaintiff’s sugar milling and refining
operations are not wholly performed within the territorial limits of Victorias. According to
plaintiff, transportation of canes from plantation to the mill site, operation
and maintenance of telephone system, inspection of crop progress and other
related activities, are conducted not only in defendant’s municipality but also
in the municipalities of Cadiz,
Manapla, Sagay and Saravia
as well.[47] We fail to see the relevance of these
facts. Because, if we follow plaintiff’s
ratiocination, neither Victorias nor any of the
municipalities just adverted to would be able
to impose the tax. One thing
certain, of course, is that the tax is imposed upon the business of operating a
sugar central and a sugar refinery. And
the situs of that business is precisely the Municipality
of Victorias.
7. Plaintiff finally impleads
double taxation. Its reason is that in
computing the amount of taxes to be paid by the sugar refinery the cost of the
raw sugar coming from the sugar central is not deducted; ergo plaintiff is taxed twice on the raw
sugar.
Double taxation has been otherwise described as “direct duplicate taxation”.[48] For double taxation to exist, “the same
property must be taxed twice, when it should be taxed but once”.[49] Double taxation has also been “defined as taxing the same person twice by the same jurisdiction for the
same thing”.[50] As
stated in Manila Motor Company, Inc. vs. Ciudad de Manila,[51]
there is double taxation “cuando la misma propiedad se sujeta a dos impuestos por la misma entidad
o Gobierno, para el
mismo fin y durante
el mismo periodo de tiempo“.
With the foregoing precepts in mind, we find no difficulty in
saying that plaintiff’s argument on double taxation does not inspire
assent. First. The two taxes cover two different
objects. Section 1 of the ordinance
taxes a person operating sugar centrals or engaged in the manufacture of centrifugal sugar. While under Section 2, those taxed are the operators of sugar refinery
mills. One occupation or business is
different from the other. Second. The disputed taxes are imposed on occupation
or business. Both taxes are not on
sugar. The amount thereof depends on the
annual output capacity of the mills concerned, regardless of the actual
sugar milled. Plaintiff’s argument
perhaps could make out a point if the object of taxation here were the sugar
it produces, not the business of producing it.
There is no double
taxation.
For the reasons given –
The judgment under review
is hereby reversed; and
Judgment is hereby rendered: (a) declaring valid and subsisting
Ordinance No. 1, series of 1956, of the
Municipality of Victorias, Province
of Negros Occidental;
and (b) dismissing plaintiff’s complaint as supplemented and amended.
Costs against plaintiff.
SO ORDERED.
Concepcion, C.J., Reyes, J.B.L.., Dizon, Makalintal, Zaldivar, Castro, Angeles, Fernando, and Capistrano, JJ., concur.
[1]
Ordinance No. 25, series of 1953, Exhibit 3.
[2]
Ordinance No. 18, series of 1947. Exhibit 2.
[3]
Exhibit 1.
[4]
Civil Case No. 5565, Court of First Instance of Negros
Occidental, entitled “Victorias Milling Co., Inc., Plaintiff, versus
The Municipality of Victorias, Province of Negros Occidental, Defendant”. The complaint was supplemented and amended.
[5] “x x x Section 357 of the Revised Manual of Instructions to
Treasurer of Provinces, Cities and Municipalities, promulgated under the
direction of the Auditor General, 1954 edition, x x x provides that:
‘Tax ordinance under controversy. – Until declared illegal
or void by a competent court, or otherwise revoked by the council or board from
which it originated or which exercised authority over the same, a tax ordinance
will be enforced in accordance with its provisions. Collection of taxes therein prescribed will
be made even if the legality of the same should be impugned or any of its
provisions be challenged or be under controversy. All protested collecÂtions, however, provided
that the fact of said protest is made to appear on the receipt wherein payments
has been acknowledged, will be taken up in the accounts as Undistributed
Income, B-3-1. Upon final determination
of the protest, a reversion entry will then be made, either by debiting the collection to the
corresponding revenue account or crediting Cash if the protest has been
considered in favor of the
protestant and the amount protested is to be returned to him’”. Record on Appeal, pp. 11-12.
[6]
Record on Appeal, pp. 12-14.
[7] Id.,
p. 70.
[8] Id,
p. 72.
[9] Id.,
p. 73.
[10] Id.
[11] Id.,
73-74
[12]
See: Cu Unjieng vs. Patstone,
42 Phil. 818, 828-830.
[13]
“SEC. 2238. General power
of council to enact ordinance and make
regulations. – The municipal council shall enact such ordinances and
make such regulations, not repugnant to law, as may be necessary to carry into
effect and discharge the powers and duties conferred upon it by law and such as
shall seem necessary and proper to provide for the health and safety, promote
the prosperity, improve the morals, peace, good order, comfort, and convenience
of the municipality and the inhabitants thereof, and for the protection of
property therein”. Revised
Administrative Code.
[14]
Section 2287, Revised Administrative Code; Cu Unjieng
vs. Patstone, supra, at p. 831; Pacific
Commercial Co. vs. Romualdez, 49 Phil. 917,
926; City of Iloilo vs. Villanueva, 105 Phil, 337, 340; People vs.
Felisarta, L-15346, June 29, 1962.
[15]
Emphasis supplied.
[16]
Emphasis supplied.
[17]
Exhibit G.
[18]
Emphasis supplied.
[19] McQuillin, Municipal Corporations, 3rd. ed., Vol. 9,
Chapter 26, p. 62.
[20] Ibid.
[21] Compañia General de Tabacos de
Filipinas vs. City of Manila,
L-16619, June 29, 1963.
[22]
19 R.C.L., pp, 951-952.
[23]
Applicant for permit or license to do business.
[24]
19 R.C.L., p. 952; emphasis supplied.
[25] 96 Phil. 909, 911.
[26]
Same ruling: Municipality
of Cotabato
vs. Santos, 105 Phil. 963,
966.
[27]
L-9319, September 27, 1957;
Plaintiff’s Brief as Appellant, p. 22; Record on Appeal, p. 70.
[28] supra,
at p. 926; Plaintiff’s Brief as Appellee, p, 47.
[29]
L-15892, April 23; 1962; Plaintiff’s Brief as Appellee,
pp. 23, 26.
[30] L-15807.
April 22, 1963; Plaintiff’s
Brief as Appellee, p. 47.
[31]
Exhibit 6-A.
[32]
Exhibit 6.
[33] Plaintiff’s Brief as Appellant,. p. 42.
[34] See:
Shell Co. of P.I. Ltd. vs. Vaño, 94 Phil. 389,
394-395.
[35]
Plaintiff’s Brief as Appellant, pp. 43-44, citing Yorkley
on Municipal Corporations, p. 361.
[36] 64 C.J.S., pp. 646-647.
[37] McQuillin, op. cit., P. 65.
[38] Ibid p. 29.
[39] Ibid.,
p. 71.
[40]
38 AM. Jur., p. 42.
[41] Resolution 1864 dated October
26, 1956 of the
Provincial Board, Exhibit 6-A
[42]
At p. 36.
[43]
Tr. (Artenero), p. 83.
[44]
Exhibit 8.
[45] supra, at p. 393. See also: Cooley on Taxation, 4th ed., Vol. ??? p. 747.
[46]
L-24322, July 21, 1967;
1967C Phild. 116, 119.
[47] PIaintiff’s Brief as Appellant, pp. 36-37.
[48]
Cooley, op cit., p. 475.
[49] Ibid., citing Attorney General vs.
Supervisors of Sanilac County 71 Mich. 16, 38 N,W. 639.
[50] Ibid.
citing Harvey Coal & Coke Co.
vs. Dillon, 59 W. Va. 605,
??? S.E. 928,
[51]
72 Phil, 336, 31P, citing Cooley
on Taxation, Vol. I, pp. 475-479; emphasis supplied.