Petron Corp. v. Mayor Tiangco and Treasurer Enriquez of The Municipality of Navotas
Petron Corp. v. Mayor Tiangco and Treasurer Enriquez of The Municipality of Navotas
Petron Corp. v. Mayor Tiangco and Treasurer Enriquez of The Municipality of Navotas
Later, Petron received a letter from the office of Mayor Tiangco assessing it for
business taxes in the amouont of 6.2M covering 1997-2001 pursuant to the
Navotas Revenue Code.
A protest was filed by Petron arguing that under the IRR of the NIRC, it is
exempt from local business tax. Also, an opinion was rendered by the Bureau
of Local Government Finance providing for that sales of petroleum fuels are
NOT subject to local taxation. Letter protest was denied and a final demand to
pay was sent to Petron.
Petron filed a complaint for cancellation of assessment with TRO before the
RTC. RTC dismissed the complaint.
Issue:
WON the municipality of Navotas may impose a business tax on
Petron? NO!
Ratio:
Section 133(h) of the LGC reads as follows:
Sec. 133. Common Limitations on the Taxing Powers of Local
Government Units.
- Unless otherwise provided herein, the exercise of the taxing powers of
provinces, cities, municipalities, and Barangays shall not extend to the levy of
the following:
xxx
(h) Excise taxes on articles enumerated under the National Internal Revenue
Code, as amended, and taxes, fees or charges on petroleum products;
The language of Section 133(h) makes plain that the prohibition with respect
to petroleum products extends not only to excise taxes thereon, but all "taxes,
fees and charges." The earlier reference in paragraph (h) to excise taxes
comprehends a wider range of subjects of taxation: all articles already covered
Ruling:
No, based on the-"Guidelines to Implement the Devolution of
LTFRBs Franchising Authority over Tricycles-For-Hire to Local Government
units pursuant to the Local Government Code"- the newly delegated powers to
LGU's pertain to the franchising and regulatory powers exercised by the
LTFRB and not to the functions of the LTO relative to the registration of motor
vehicles and issuance of licenses for the driving thereof. Corollarily, the
exercised of a police power must be through a valid delegation. In this case
the police power of registering tricycles was not delegated to the LGUs, but
remained in the LTO.
Clearly unaffected by the Local Government Code are the powers of
LTO under R.A. No.4136 requiring the registration of all kinds of motor
vehicles "used or operated on or upon any public highway" in the country.
The Commissioner of Land Transportation and his deputies are
empowered at anytime to examine and inspect such motor vehicles to
determine whether said vehicles are registered, or are unsightly, unsafe,
improperly marked or equipped, or otherwise unfit to be operated on because
of possible excessive damage to highways, bridges and other infrastructures.
The LTO is additionally charged with being the central repository and
custodian of all records of all motor vehicles.
BUT
Note that this has been appealed to the SC.
The two decisions are herein provided in sum:
Police power and taxation, along with eminent domain, are inherent
powers of sovereignty which the State might share with local government units
by delegation given under a constitutional or a statutory fiat. All these inherent
powers are for a public purpose and legislative in nature but the similarities
just about end there. The basic aim of police power is public good and welfare.
Taxation, in its case, focuses on the power of government to raise revenue in
order to support its existence and carry out its legitimate objectives. Although
correlative to each other in many respects, the grant of one does not
necessarily carry with it the grant of the other. The two powers are, by tradition
and jurisprudence, separate and distinct powers, varying in their respective
concepts, character, scopes and limitations.
Lepanto filed a petition with the Regional Trial Court (RTC) of Benguet to
public lands, and not the extracted minerals, which are not the same as those
Likewise, a province is entitled to impose the sand and gravel tax on mining
companies, since the subject of the tax is the sand and gravel extracted from