PHILIPPINE BASKETBALL ASSOCIATION vs CA principle of ejusdem generis1, in determining the meaning of the phrase "other

places of amusement", one must refer to the prior enumeration of theaters,

August 8, 2000; Purisima, J:
FACTS:
On July 21, 1989, the petitioner received an assessment from the CIR for the payment
of deficiency amusement tax in the amount of P5,864,260.84 (including 75%
surcharge and 25% interest for 2 years). The petitioner contested the assessment but
it was denied by the CIR. The Court of Tax Appeals also dismissed the subsequent
petition of PBA. The Court of Appeals affirmed the ruling of the CTA so the petitioner
filed this petition for certiorari.
Petitioner’s arguments:
- Jurisdiction to collect amusement taxes of PBA is vested with the local
government and not the national government. It argues that they should be
included in the enumeration provided by Section 13 of the Local Tax Code of
1973.
- Commissioner’s issuance of BIR Ruling No. 231-86 and BIR Revenue
Memorandum Circular No. 8-88 -- both upholding the authority of the local
government to collect amusement taxes -- should bind the government or
that, if there is any revocation or modification of said rule, the same should
operate prospectively.
- Income from the cession of streamer and advertising spaces to VEI should
not be subject to amusement taxes
- In case they are made liable to pay the deficiency amusement tax, they
should not be charged with the 75% surcharge.
cinematographs, concert halls and circuses with artistic expression as their
common characteristic. Professional basketball games do not fall under the same
category as theaters, cinematographs, concert halls and circuses as the latter
basically belong to artistic forms of entertainment while the former caters to
sports and gaming. Also, a historical analysis of pertinent laws does reveal the
legislative intent to place professional basketball games within the ambit of a
national tax. Previous laws (PD 871 by PD 1456 and PD 1959) shows a
recognition that the amusement tax on professional basketball games is a
national, and not a local, tax.
2. Commissioner’s issuance of BIR Ruling No. 231-86 and BIR Memorandum
Circular No. 8-88, both upholding the authority of the local government to collect
amusement taxes cannot bind the government. The government cannot be
never be in estoppels, particularly in matters involving tax. It is a well-known rule
that erroneous application and enforcement of the law by public officers do not
preclude subsequent correct application of the statute, and that the Government
is never estopped by mistake or error on the part of its agents.
3. PD 1456 provides that for the purpose of the amusement tax, the term gross
receipts’ embraces all the receipts of the proprietor, lessee or operator of the
amusement place. That definition of gross receipts is broad enough to embrace
the cession of advertising and streamer spaces as the same embraces all the
receipts of the proprietor, lessee or operator of the amusement place.
4. The issue on the payment of surcharge was never posed as an issue before the
respondent court so it must necessarily fail

ISSUES:

1. WON the amusement tax on admission tickets to PBA games a local tax –
NO
2. WON BIR Ruling No. 231-86 and BIR RMC No. 8-88 binds the government
– NO
3. WON income from the cession of streamer and advertising spaces to VEI is
subject to amusement taxes - YES
4. WON the petitioner should be charged with amusement tax – YES

HELD:

1. Sec 13 of the Local Tax Code indicates that the province can only impose a tax
on admission from the proprietors, lessees, or operators of theaters,
cinematographs, concert halls, circuses and other places of amusement. The
authority to tax professional basketball games is not therein included, as the
same is expressly embraced in PD 1959, which amended PD 1456, wherein it is
clear that the "proprietor, lessee or operator of . . . professional basketball
games" is required to pay an amusement tax equivalent to fifteen per centum
(15%) of their gross receipts to the Bureau of Internal Revenue, which payment is
a national tax. 1
Where general words follow an enumeration of persons or things, by words of a
While Section 13 of the Local Tax Code mentions "other places of amusement", particular and specific meaning, such general words are not to be construed in their
professional basketball games are definitely not within its scope. Under the widest extent, but are to be held as applying only to persons or things of the same
kind or class as those specifically mentioned.
1