ANGELES UNIVERSITY vs. CITY OF ANGELES. JULIET G. QUINSAAT G.R. No.

189999, June 27, 2012 Facts: Angeles University was converted into a non-stock, non-profit education foundation under the provisions of Republic Act (R.A.) No. 6055. Petitioner filed with the Office of the City Building Official an application for a building permit for the construction of an 11-storey building of the Angeles University Foundation Medical Center in its main campus the said office issue a Building permit fee and Locational Clearance Fee. Petitioner make a letter to respondent City Tresurer Juliet G. Quinssat and City Building Official Donato Z. Dizon alleging that it is exempt from payment of the building permit and locational clearance fee. Petitioner also reminded the respondent that they have previously issued building permit acknowledging such exemption from payment of building permit fees. The DOJ and trial court render decision in favor to petitioner for exempting in payment. But the CA reverse the decision of court in favor to respondent. Petitioner file a MR but it was denied by CA. Issue: WON the Angeles University is exempted in Building permit fee and Locational Clearance Fee. Ruling: No. Under R.A. No. 6055, petitioner was granted exemption only from income tax derived from its educational activities and real property used exclusively for educational purposes. Regardless of the repealing clause in the National Building Code, the CA held that petitioner is still not exempt because a building permit cannot be considered as the other charges mentioned in Sec. 8 of R.A. No. 6055 which refers to impositions in the nature of tax, import duties, assessments and other collections for revenue purposes, following the ejusdem generisrule. The CA further stated that petitioner has not shown that the fees collected were excessive and more than the cost of surveillance, inspection and regulation. And while petitioner may be exempt from the payment of real property tax, petitioner in this case merely alleged that the subje ct property is to be used actually, directly and exclusively for educational purposes, declaring merely that such premises is intended to house the sports and other facilities of the university but by reason of the occupancy of informal settlers on the area, it cannot yet utilize the same for its intended use. Thus, the CA concluded that petitioner is not entitled to the refund of building permit and related fees, as well as real property tax it paid under protest. R.A. No. 6055 granted tax exemptions to educational institutions like petitioner which converted to non-stock, non-profit educational foundations. Section 8 of said law provides: SECTION 8. The Foundation shall be exempt from the payment of all taxes, import duties, assessments, and other charges imposed by the Government onall income derived from or property, real or personal, used exclusively for the educational activities of the Foundation.(Emphasis supplied.) A charge is broadly defined as the price of, or rate for, something, while the word fee pertains to a charge fixed by law for services of public officers or for use of a privilege under control of government. As used in the Local Government Code of 1991 (R.A. No. 7160), charges refers to pecuniary liability, as rents or fees against persons or property, whilefee means a charge fixed by law or ordinance for the regulation or inspection of a business or activity.

PHILIPPINE FISHERIES DEVELOPMENT AUTORITY vs. CENTRAL BOARD OF ASSESSMENT APPEALS, LOCAL BOARD OF ASSESSMENT APPEALS OF LUCENA CITY, CITY OF LUCENA, LUCENA CITY ASSESSOR AND LUCENA CITY TREASURER G.R. No. 178030, December 15, 2010 Facts: Lucena Fishing Port Complex (LFPC) is one of the fishery infrastructure projects undertaken by the National Government under the Nationwide Fish Port-Package. Cooperation Fund (OECF) of Japan, dated November 9, 1978 and May 31, 1978, respectively. The Philippine Fisheries Development Authority (PFDA) was created by virtue of P.D. 977 as amended by E.O. 772, with functions and powers to manage, operate, and develop the Navotas Fishing Port Complex and such other fishing port complexes that may be established by the Authority. Pursuant thereto, Petitioner-Appellant PFDA took over the management and operation of LFPC in February 1992. In a letter addressed to PFDA, the City Government of Lucena demanded payment of realty taxes on the LFPC property for the period from 1993 to 1999 and another demand letter was sent by the Government of Lucena City on the same LFPC property covering the period from 1993 to 2000. 2000 PetitionerAppellant filed its Appeal before the Local Board of Assessment Appeals of Lucena City, which was dismissed for lack of merit. Petitioner-Appellant filed its motion for reconsideration; this was denied by the Appellee Local Board. PFDA appealed to the CBAA. the CBAA dismissed the appeal for lack of merit. Issue: WON PFDA is liable for the real property tax assessed on the Lucena Fishing Port Complex. Ruling: No. In ruling that PFDA is not exempt from paying real property tax, the Court of Tax Appeals cited Sections 193, 232, and 234 of the Local Government Code which read: Section 193. Withdrawal of Tax Exemption Privileges. Unless otherwise provided in this Code, tax exemptions or incentives granted to, or presently enjoyed by all persons, whether natural or juridical, including government-owned or controlled corporations, except local water districts, cooperatives duly registered under R.A. No. 6938, non-stock and nonprofit hospitals and educational institutions, are hereby withdrawn upon the effectivity of this Code. Section 232. Power to Levy Real Property Tax. A province or city or a mun icipality within the Metropolitan Manila Area may levy an annual ad valorem tax on real property such as land, building, machinery, and other improvement not hereinafter specifically exempted. Section 234. Exemptions from Real Property Tax. The following are exempted from payment of the real property tax: (a) Real property owned by the Republic of the Philippines or any of its political subdivision except when the beneficial use thereof has been granted, for consideration or otherwise, to a taxable person; (b) Charitable institutions, churches, parsonages or convents appurtenant thereto, mosques, nonprofit or religious cemeteries and all lands, buildings and improvements actually, directly, and exclusively used for religious, charitable or educational purposes; (c) All machineries and equipment that are actually, directly and exclusively used by local water districts and governmentowned or -controlled corporations engaged in the supply and distribution of water and/or generation and transmission of electric power; (d) All real property owned by duly registered cooperatives as provided for under R.A. No. 6938; and (e) Machinery and equipment used for pollution control and environmental protection. Except as provided herein, any exemption from payment of real property tax previously granted to, or presently enjoyed by, all persons, whether natural or juridical, including all government-owned or -controlled corporations are hereby withdrawn upon the effectivity of this Code. The Court of Tax Appeals held that as a government-owned or controlled corporation, PFDA is subject to real property tax imposed by local government units having jurisdiction over its real properties pursuant to Section 232 of the Local

Government Code. According to the Court of Tax Appeals, Section 193 of the Local Government Code withdrew all tax exemptions granted to government-owned or controlled corporations. Furthermore, Section 234 of the Local Government Code explicitly provides that any exemption from payment of real property tax granted to government-owned or controlled corporations have already been withdrawn upon the effectivity of the Local Government Code. The ruling of the Court of Tax Appeals is anchored on the wrong premise that the PFDA is a government-owned or controlled corporation. On the contrary, this Court has already ruled that the PFDA is a government instrumentality and not a government-owned or controlled corporation.

COMMISSIONER INTERNAL REVENUE vs. ST. LUKES MEDICAL CENTER INC. G.R No. 195909, September 26, 2012 Facts: St. Lukes Medical Center, Inc. (St. Lukes) is a hospital organized as a non-stock and non-profit corporation. the Bureau of Internal Revenue (BIR) assessed St. Lukes deficiency taxes amounting to P 76,063,116.06 for 1998, comprised of deficiency income tax, value-added tax, withholding tax on compensation and expanded withholding tax. The BIR reduced the amount to P 63,935,351.57 during trial in the First Division of the CTA. St. Lukes filed an administrative protest with the BIR against the deficiency tax assessments. The BIR did not act on the protest within the 180-day period under Section 228 of the NIRC. Thus, St. Lukes appealed to the CTA. The BIR argued before the CTA that Section 27(B) of the NIRC, which imposes a 10% preferential tax rate on the income of proprietary nonprofit hospitals, should be applicable to St. Lukes. According to the BIR, Section 27(B), introduced in 1997, is a new provision intended to amend the exemption on non-profit hospitals that were previously categorized as non-stock, non-profit corporations under Section 26 of the 1997 Tax Code x x x. It is a specific provision which prevails over the general exemption on income tax granted under Section 30(E) and (G) for non-stock, non-profit charitable institutions and civic organizations promoting social welfare. The BIR claimed that St. Lukes was actually operating for profit in 1998 because only 13% of its revenues came from charitable purposes. Moreover, the hospitals board of trustees, officers and employees directly benefit from its profits and assets. St. Lukes maintained that it is a non-stock and non-profit institution for charitable and social welfare purposes under Section 30(E) and (G) of the NIRC. It argued that the making of profit per se does not destroy its income tax exemption. The CTA render decision in favor to St. Lukes. Issue: WON St. Lukes is liable for deficiency income tax in 1998 under Section 27(B) of the NIRC, which imposes a preferential tax rate of 10% on the income of proprietary non-profit hospitals. Ruling: No. The Court finds that St. Lukes is a corporation that is not operated exclusively for charitable or social welfare purposes insofar as its revenues from paying patients are concerned. This ruling is based not only on a strict interpretation of a provision granting tax exemption, but also on the clear and plain text of Section 30(E) and (G). Section 30(E) and (G) of the NIRC requires that an institution be operated exclusively for charitable or social welfare purposes to be completely exempt from income tax. An institution under Section 30(E) or (G) does not lose its tax exemption if it earns income from its for-profit activities. Such income from for-profit activities, under the last paragraph of Section 30, is merely subject to income tax, previously at the ordinary corporate rate but now at the preferential 10% rate pursuant to Section 27(B). A tax exemption is effectively a social subsidy granted by the State because an exempt institution is spared from sharing in the expenses of government and yet benefits from them. Tax exemptions for charitable institutions should therefore be limited to institutions beneficial to the public and those which improve social welfare. A profit-making entity should not be allowed to exploit this subsidy to the detriment of the government and other taxpayers. St. Lukes fails to meet the requirements under Section 30(E) and (G) of the NIRC to be completely tax exempt from all its income. However,

it remains a proprietary non-profit hospital under Section 27(B) of the NIRC as long as it does not distribute any of its profits to its members and such profits are reinvested pursuant to its corporate purposes. St. Lukes, as a proprietary non-profit hospital, is entitled to the preferential tax rate of 10% on its net income from its for-profit activities. CITY OF IRIGAN vs. CAMARINES SUR III ELECTRIC COOPERATIVE, INC. (CASURECO III) G.R No. 192945, September 05, 2012 Facts: CASURECO III is an electric cooperative duly organized and existing by virtue of Presidential Decree (PD) 269, as amended, and registered with the National Electrification Administration (NEA). It is engaged in the business of electric power distribution to various end-users and consumers within the City of Iriga and the municipalities of the Province of Camarines Sur, otherwise known as the Rinconada area.. Petitioner City of Iriga required CASURECO III to submit a report of its gross receipts for the period 1997-2002 to serve as the basis for the computation of franchise taxes, fees and other charges. The latter complied and was subsequently assessed taxes. Petitioner made a final demand on CASURECO III to pay the franchise taxes due for the period 1998-2003 and real property taxes due for the period 1995-2003. CASURECO III, however, refused to pay said taxes on the ground that it is an electric cooperative provisionally registered with the Cooperative Development Authority (CDA), and therefore exempt from the payment of local taxes. petitioner filed a complaint for collection of local taxes against CASURECO III before the RTC, citing its power to tax under the Local Government Code (LGC) and the Revenue Code of Iriga City. The RTC ruled that the real property taxes had already prescribed in accordance with section 194 of the LGC. However, it found out CASURECO III liable for franchise taxes. CASURECO III appealed from the RTC Decision, questioning its liability for franchise taxes. The CA affirmed the decision of RTC because CAfound CASURECO III to be nonprofit entity. Issue: WON CASURECO III is liable for franchise taxes. Ruling: Yes. Thus, to be liable for local franchise tax, the following requisites should concur: (1) that one has a "franchise" in the sense of a secondary or special franchise; and (2) that it is exercising its rights or privileges under this franchise within the territory of the pertinent local government unit. There is a confluence of these requirements in the case at bar. By virtue of PD 269, NEA granted CASURECO III a franchise to operate an electric light and power service for a period of fifty (50) years from June 6, 1979, and it is undisputed that CASURECO III operates within Iriga City and the Rinconada area. It is, therefore, liable to pay franchise tax notwithstanding its non-profit nature. It should be stressed that what the petitioner seeks to collect from CASURECO III is a franchise tax, which as defined, is a tax on the exercise of a privilege. As Section 137 of the LGC provides, franchise tax shall be based on gross receipts precisely because it is a tax on business, rather than on persons or property. Since it partakes of the nature of an excise tax/ the situs of taxation is the place where the privilege is exercised, in this case in the City of Iriga, where CASURECO III has its principal office and fromwhere it operates, regardless of the place where its services or products are delivered. Hence, franchise tax covers all gross receipts from Iriga City and the Rinconada area.

EDUARDO M. COJUANGCO JR. vs. RP G.R. No. 180705, November 27, 2012 Facts: RA 6260 was enacted creating Coconut Investment Company (CIC) to administer the Coconut Investment Fund (CIF) Issue: Ruling:

PETITIONER-ORGANIZATION vs. EXECUTIVE SECRETARY G.R No. 147036-37 April 10, 2012 Facts: Congress enacted RA 6260 that establish a Coconut Investment Fund (CIF) for development of the coconut industry through capital financing. For this purpose, the law imposed a levy of P0.55 on the coconut farmers first domestic sale of every 100 kilograms of copra, or its equivalent, for which levy he was to get a receipt convertible into CIC shares of stock. About a year following his proclamation of martial law, President Ferdinand E. Marcos issued Presidential Decree (P.D.) 276,5which established a Coconut Consumers Stabilization Fund (CCS Fund), to address the crisis at that time in the domestic market for coconut-based consumer goods. . The CCS Fund was to be built up through the imposition of a P15.00-levy for every first sale of 100 kilograms of copra resecada. The levy was to cease after a year or earlier provided the crisis was over. Any remaining balance of the Fund was to revert to the CI Fund established under R.A. 6260 Issue: WON the coco-levy funds are public fund. Ruling: Yes. For some time, different and conflicting notions had been formed as to the nature and ownership of the coco-levy funds. The Court, however, finally put an end to the dispute when it categorically ruled in Republic of the Philippines v. COCOFED43 that these funds are not only affected with public interest; they are, in fact, prima facie public funds. Prima facie means a fact presumed to be true unless disproved by some evidence to the contrary.44 The Court was satisfied that the coco-levy funds were raised pursuant to law to support a proper governmental purpose. They were raised with the use of the police and taxing powers of the State for the benefit of the coconut industry and its farmers in general. The COA reviewed the use of the funds. The Bureau of Internal Revenue (BIR) treated them as public funds and the very laws governing coconut levies recognize their public character.45 The Court has also recently declared that the coco-levy funds are in the nature of taxes and can only be used for public purpose.46 Taxes are enforced proportional contributions from persons and property, levied by the State by virtue of its sovereignty for the support of the government and for all its public needs.47 Here, the coco-levy funds were imposed pursuant to law, namely, R.A. 6260 and P.D. 276. The funds were collected and managed by the PCA, an independent government corporation directly under the President.48 And, as the respondent public officials pointed out, the pertinent laws used the term levy,49which means to tax,50 in describing the exaction.

SENATOR ERNESTO MACEDA vs. ENERGY REGULATORY BOARD G.R. Nos. 95203-05, December 18, 1990 OLIVER O. LOZANO vs ENERGY REGULATORY BOARD G.R. Nos. 95119-21, December 18, 1990 Facts: Caltex, Shell and Petron proffered separate application with the Energy Regulatory Board for permission to increase the wholesale posted price of petroleum products. The Board order granted provisional relief. various petroleum products enumerated below, refined and/or marketed by them locally. The petitioners submit that the above Order had been issued with grave abuse of discretion, tantamount to lack of jurisdiction, and correctible by Certiorari. The petitioner, Senator Ernesto Maceda, also submits that the same was issued without proper notice and hearing in violation of Section 3, paragraph (e), of Executive Order No. 172; that the Board, in decreeing an increase, had created a new source for the Oil Price Stabilization Fund (OPSF), or otherwise that it had levied a tax, a power vested in the legislature, and/or that it had "re-collected", by an act of taxation, ad valorem taxes on oil which Republic Act No. 6965 had abolished. The petitioner, Atty. Oliver Lozano, likewise argues that the Board's Order was issued without notice and hearing, and hence, without due process of law. Issue: WON the Board's Order was issued without notice and hearing, and hence, without due process of law. Ruling: No. What must be stressed is that while under Executive Order No. 172, a hearing is indispensable, it does not preclude the Board from ordering, ex parte, a provisional increase, as it did here, subject to its final disposition of whether or not: (1) to make it permanent; (2) to reduce or increase it further; or (3) to deny the application. Section 37 paragraph (e) is akin to a temporary restraining order or a writ of preliminary attachment issued by the courts, which are given ex parte, and which are subject to the resolution of the main case. Section 3, paragraph (e) and Section 8 do not negate each other, or otherwise, operate exclusively of the other, in that the Board may resort to one but not to both at the same time. Section 3(e) outlines the jurisdiction of the Board and the grounds for which it may decree a price adjustment, subject to the requirements of notice and hearing. Pending that, however, it may order, under Section 8, an authority to increase provisionally, without need of a hearing, subject to the final outcome of the proceeding. The Board, of course, is not prevented from conducting a hearing on the grant of provisional authority which is of course, the better procedure however, it cannot be stigmatized later if it failed to conduct one. As we held in Citizens' Alliance for Consumer Protection v. Energy Regulatory Board. In the light of Section 8 quoted above, public respondent Board need not even have conducted formal hearings in these cases prior to issuance of its Order of 14 August 1987 granting a provisional increase of prices. The Board, upon its own discretion and on the basis of documents and evidence submitted by private respondents, could have issued an order granting provisional relief immediately upon filing by private respondents of their respective applications. In this respect, the Court considers the evidence presented by private respondents in support of their applications i.e., evidence showing that importation costs of petroleum products had gone up; that the peso had depreciated in value; and that the Oil Price Stabilization Fund (OPSF) had by then been depleted as substantial and hence constitutive of at least prima facie basis for issuance by the Board of a provisional relief order granting an increase in the prices of petroleum products. We do not therefore find the challenged action of the Board to have been done in violation of the due process clause. The petitioners may contest however, the applications at the hearings proper.