SECOND DIVISION
G.R. No. 204117, July 01, 2015
CHINA BANKING CORPORATION, Petitioner, v. CITY TREASURER OF MANILA, Respondent.
D E C I S I O N
MENDOZA, J.:
Before this Court is a petition for review on certiorari1 under Rule 45 of the Rules of Court filed by petitioner China Banking Corporation (CBC), assailing the April 17, 2012 Decision2 and the October 18, 2012 Resolution3 of the Court of Tax Appeals En Banc (CTA En Banc), in CTA EB Case No. 738, which affirmed the October 1, 2010 Decision4 and the February 22, 2011 Resolution5 of the Third Division of the Court of Tax Appeals (CTA Division) in CTA AC No. 66. Through the assailed rulings, the claim by petitioner CBC for the refund of P154,398.50 collected by respondent City
Treasurer of Manila (City Treasurer) under Section 216 of Ordinance Nos. 79887 and 80118 was dismissed.
The facts, as chronicled by the CTA Division, are undisputed:LawlibraryofCRAlaw
ChanRoblesVirtualawlibrary
On January 2007, on the basis of the reported income of respondent CBC's Sto. Cristo Branch, Binondo, Manila, amounting to P34,310,777.34 for the year ending December 31, 2006, respondent CBC was assessed the amount of P267,128.70 by petitioner City Treasurer of Manila, consisting of local business tax, business permits, and other fees for taxable year 2007, broken down as follows:LawlibraryofCRAlawDecision of the Regional Trial Court
ChanRoblesVirtualawlibraryOn January 15, 2007, respondent CBC paid the amount of P267,128.70 and protested, thru a Letter dated January 12, 2007, the imposition of business tax under Section 21 of the Manila Revenue Code in the amount of P154,398.50, on the ground that it is not liable of said additional business tax and the same constitutes double taxation.
Particulars Amount of Taxes and Fees Discount Amount DueTax on Coml Bank P102,932.33 P10,293.33 P92,639.10Tax on Rentals of Equipt 54.00 5.40 48.60Business Permit Fee (0801) 3,215.00 - 3,215.00Business Permit Fee (079926) 1,200.00 - 1,200.00Business Permit Fee (0802) 3,000.00 - 3,000.00Sanitary Inspection Fee 400.00 - 400.00Garbage Svcs Charges 3,500.00 - 3,500.00Occupational Tax 2,880.00 - 2,880.00OCC/PC/HC 5,640.00 - 5,640.00 Plumbing Insp Fee 7.50 - 7.50Electrical Insp Fee 50.00 - 50.00Building Insp Fee 50.00 - 50.00Signboard Insp Fee 40.00 - 40.00SEC 21 171,553.89 17,155.39 154,398.50Business Registration Stick 60.00 - 60.00TOTAL P294,582.72 P27,454.02 P267,128.70
On February 8, 2007, petitioner acknowledged receipt of respondent CBC 's payment under protest of the assessed amount and further informed respondent that she will await for respondent’s formal protest.
On March 27, 2007, respondent CBC wrote a letter-reply to [respondent's] petitioner’s Letter dated February 8, 2007, reiterating that respondent already protested the additional assessment under Section 21 of the Manila Revenue Code in its Letter dated January 12, 2007. In the same Letter, respondent averred that pursuant to Section 195 of the Local Government Code ("LGC ''), petitioner had until March 16, 2007 within which to decide the protest, and considering that respondent received the Letter dated February 8, 2007, four days after the deadline to decide and petitioner did not even resolve the protest, respondent formally demanded the refund of the amount of P154,398.50, representing the business tax collected under Section 21 of the Manila Revenue Code.
On April 17, 2007, respondent CBC filed a Petition for Review with the RTC of Manila, Branch 173, entitled "China Banking Corporation vs. Hon. Liberty M. Toledo in her capacity as City Treasurer of Manila," docketed as Civil Case No. 07-117075, raising the sole issue of whether or not respondent is subject to the local business tax imposed under Section 21 of the Manila Revenue Code.
CBC asserts that it filed the proper written protest but for lack of any action from the City Treasurer, it was prompted to file its petition for review with the RTC.22 The petitioner insists on the invalidity of the City Treasurer’s assessment. It pointed out that the basis of the assessment, Ordinance Nos. 7988 and 8011, had been declared unconstitutional by the Court in Coca-Cola, and that the Office of the Mayor of Manila even directed the City Treasurer to cease and desist from assessing and imposing Section 21 of the said ordinances.23redarclawISSUE
THE HONORABLE COURT OF TAX APPEALS GRAVELY ERRED IN DISREGARDING THE LAW AND INTEREST OF SUBSTANTIAL JUSTICE BY REVERSING THE RULING OF THE TRIAL COURT SOLELY BECAUSE OF ITS ASSUMED PRONOUNCEMENT THAT THE ORIGINAL PETITION WAS FILED ONE (1) DAY BEYOND THE REGLEMENTARY PERIOD?21
SECTION 195. Protest of Assessment. - When the local treasurer or his duly authorized representative finds that correct taxes, fees, or charges have not been paid, he shall issue a notice of assessment stating the nature of the tax, fee or charge, the amount of deficiency, the surcharges, interests and penalties. Within sixty (60) days from the receipt of the notice of assessment, the taxpayer may file a written protest with the local treasurer contesting the assessment; otherwise, the assessment shall become final and executory. The local treasurer shall decide the protest within sixty (60) days from the time of its filing. If the local treasurer finds the protest to be wholly or partly meritorious, he shall issue a notice canceling wholly or partially the assessment. However, if the local treasurer finds the assessment to be wholly or partly correct, he shall deny the protest wholly or partly with notice to the taxpayer. The taxpayer shall have thirty (30) days from the receipt of the denial of the protest or from the lapse of the sixty (60)-day period prescribed herein within which to appeal with the court of competent jurisdiction otherwise the assessment becomes conclusive and unappealable.Time and again, it has been held that the perfection of an appeal in the manner and within the period laid down by law is not only mandatory but also jurisdictional. The failure to perfect an appeal as required by the rules has the effect of defeating the right to appeal of a party and precluding the appellate court from acquiring jurisdiction over the case. At the risk of being repetitious, the Court declares that the right to appeal is not a natural right nor a part of due process. It is merely a statutory privilege, and may be exercised only in the manner and in accordance with the provisions of the law.29redarclaw[Emphasis Supplied]
First, we dispose of the procedural issue, which essentially boils down to whether the RTC, in deciding an appeal taken from a denial of a protest by a local treasurer under Section 195 of the Local Government Code, exercises “original jurisdiction” or “appellate jurisdiction.” The question assumes a measure of importance to this petition, for the adoption of the position of the City Treasurer that the mode of review of the decision taken by the RTC is governed by Rule 41 of the Rules of Civil Procedure means that the decision of the RTC would have long become final and executory by reason of the failure of the Corporation to file a notice of appeal.Thus, although the Court in Yamane recognized that the RTC exercised its original jurisdiction over cases decided by a local treasurer, it was quick to point out that with the advent of Republic Act (R.A.) No. 9282, the jurisdiction of the RTC over such cases is no longer simply original and exclusive. The Court explained:LawlibraryofCRAlaw
There are discernible conflicting views on the issue. The first, as expressed by the Court of Appeals, holds that the RTC, in reviewing denials of protests by local treasurers, exercises appellate jurisdiction. This position is anchored on the language of Section 195 of the Local Government Code which states that the remedy of the taxpayer whose protest is denied by the local treasurer is “to appeal with the court of competent jurisdiction.” Apparently though, the Local Government Code does not elaborate on how such “appeal” should be undertaken.
The other view, as maintained by the City Treasurer, is that the jurisdiction exercised by the RTC is original in character. This is the first time that the position has been presented to the court for adjudication. Still, this argument does find jurisprudential mooring in our ruling in Garcia v. De Jesus, where the Court proffered the following distinction between original jurisdiction and appellate jurisdiction: “Original jurisdiction is the power of the Court to take judicial cognizance of a case instituted for judicial action for the first time under conditions provided by law. Appellate jurisdiction is the authority of a Court higher in rank to re-examine the final order or judgment of a lower Court which tried the case now elevated for judicial review.”
The quoted definitions were taken from the commentaries of the esteemed Justice Florenz Regalado. With the definitions as beacon, the review taken by the RTC over the denial of the protest by the local treasurer would fall within that court’s original jurisdiction. In short, the review is the initial judicial cognizance of the matter. Moreover, labelling the said review as an exercise of appellate jurisdiction is inappropriate, since the denial of the protest is not the judgment or order of a lower court, but of a local government official.
The stringent concept of original jurisdiction may seemingly be neutered by Rule 43 of the 1997 Rules of Civil Procedure, Section 1 of which lists a slew of administrative agencies and quasi-judicial tribunals or their officers whose decisions may be reviewed by the Court of Appeals in the exercise of its appellate jurisdiction. However, the basic law of jurisdiction, Batas Pambansa Blg. 129 (B.P. 129), ineluctably confers appellate jurisdiction on the Court of Appeals over final rulings of quasi-judicial agencies, instrumentalities, boards or commission, by explicitly using the phrase “appellate jurisdiction.” The power to create or characterize jurisdiction of courts belongs to the legislature. While the traditional notion of appellate jurisdiction connotes judicial review over lower court decisions, it has to yield to statutory redefinitions that clearly expand its breadth to encompass even review of decisions of officers in the executive branches of government.
Yet significantly, the Local Government Code, or any other statute for that matter, does not expressly confer appellate jurisdiction on the part of regional trial courts from the denial of a tax protest by a local treasurer. On the other hand, Section 22 of B.P. 129 expressly delineates the appellate jurisdiction of the Regional Trial Courts, confining as it does said appellate jurisdiction to cases decided by Metropolitan, Municipal, and Municipal Circuit Trial Courts. Unlike in the case of the Court of Appeals, B.P. 129 does not confer appellate jurisdiction on Regional Trial Courts over rulings made by non-judicial entities.32redarclaw[Emphasis Supplied]
From these premises, it is evident that the stance of the City Treasurer is correct as a matter of law, and that the proper remedy of the Corporation from the RTC judgment is an ordinary appeal under Rule 41 to the Court of Appeals. However, we make this pronouncement subject to two important qualifications. First, in this particular case there are nonetheless significant reasons for the Court to overlook the procedural error and ultimately uphold the adjudication of the jurisdiction exercised by the Court of Appeals in this case. Second, the doctrinal weight of the pronouncement is confined to cases and controversies that emerged prior to the enactment of Republic Act No. 9282, the law which expanded the jurisdiction of the Court of Tax Appeals (CTA).Clearly, with the passage of R.A. No. 9282, the authority to exercise either original or appellate jurisdiction over local tax cases depended on the amount of the claim. In cases where the RTC exercises appellate jurisdiction, it necessarily follows that there must be a court capable of exercising original jurisdiction – otherwise there would be no appeal over which the RTC would exercise appellate jurisdiction. The Court cannot consider the City Treasurer as the entity that exercises original jurisdiction not only because it is not a “court” within the context of Batas Pambansa (B.P.) Blg. 129, but also because, as explained above, “B.P. 129 expressly delineates the appellate jurisdiction of the Regional Trial Courts, confining as it does said appellate jurisdiction to cases decided by Metropolitan, Municipal, and Municipal Circuit Trial Courts.” Verily, unlike in the case of the CA, B.P. 129 does not confer appellate jurisdiction on the RTC over rulings made by non-judicial entities. The RTC exercises appellate jurisdiction only from cases decided by the Metropolitan, Municipal, and Municipal Circuit Trial Courts in the proper cases. The nature of the jurisdiction exercised by these courts is original, considering it will be the first time that a court will take judicial cognizance of a case instituted for judicial action.
Republic Act No. 9282 definitively proves in its Section 7(a)(3) that the CTA exercises exclusive appellate jurisdiction to review on appeal decisions, orders or resolutions of the Regional Trial Courts in local tax cases original decided or resolved by them in the exercise of their original or appellate jurisdiction. Moreover, the provision also states that the review is triggered “by filing a petition for review under a procedure analogous to that provided for under Rule 42 of the 1997 Rules of Civil Procedure.”
Republic Act No. 9282, however, would not apply to this case simply because it arose prior to the effectivity of that law. To declare otherwise would be to institute a jurisdictional rule derived not from express statutory grant, but from implication. The jurisdiction of a court to take cognizance of a case should be clearly conferred and should not be deemed to exist on mere implications, and this settled rule would be needlessly emasculated should we declare that the Corporation’s position is correct in law.33redarclaw[Emphases and Underscoring Supplied]
Sec. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts in Civil Cases. – Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts shall exercise:LawlibraryofCRAlawThe fact that the Metropolitan, Municipal, and Municipal Circuit Trial Courts exercise jurisdiction is one that even petitioner CBC recognizes. As aptly pointed by the City Treasurer, in several claims below the jurisdictional amount of the RTC, the petitioners had sought relief by filing their claim for refund with the first level courts:
(1) Exclusive original jurisdiction over civil actions and probate proceedings, testate and intestate, including the grant of provisional remedies in proper cases, where the value of the personal property, estate, or amount of the demand does not exceed One hundred thousand pesos (P100,000.00) or, in Metro Manila where such personal property, estate, or amount of the demand does not exceed Two hundred thousand pesos (P200,000.00) x x x x
In all, the Court finds that the claim of petitioner CBC for refund should be dismissed not only for being filed out of time but also for not being filed before a court of competent jurisdiction.
Civil Case No. Court Amount Claimed by Petitioner 183817-CV35 MeTC Manila, Branch 30 P342,350.77 175168-CV36 MeTC Manila, Branch 25 3,000.00 175169-CV37 MeTC Manila, Branch 25 10,844.92 175171-CV38 MeTC Manila, Branch 28 18,947.67 175172-CV39 MeTC Manila, Branch 28 72,693.55 175175-CV40 MeTC Manila, Branch 1 41,536.48 175178-CV41 MeTC Manila, Branch 23 26,782.06
Endnotes:
* Designated Acting Member in lieu of Associate Justice Arturo D. Brion, per Special Order No. 2079, dated June 29, 2015.
1Rollo, pp. 9-30.
2 Penned by Presiding Justice Ernesto D. Acosta with Associate Justices Juanito C. Castaneda, Jr., Lovell R. Bautista, Erlinda P. Uy, Caesar A. Casanova, Olga Palanca-Enriquez, Esperanza R. Fabon-Victorino, Cielito N. Mindaro-Grulla and Amelia R. Cotangco-Manalastas, concurring; id. at 38-47.
3 Id. at 33-36.
4 Penned by Associate Justice Olga Palanca-Enriquez, with Associate Justices Lovell R. Bautista and Amelia R. Cotangco-Manalastas, concurring; id. at 60-76.
5 Id. at 49-58.
6 Section 21. – Tax on Business Subject to the Excise, Value-Added or Percentage Taxes Under the NIRC – On any of the following businesses and articles of commerce subject to the excise, value-added or percentage taxes under the National Internal Revenue Code hereinafter to as NIRC, as amended, a tax of fifty (50%) of one percent (1%) per annum on the gross sales or receipts of the preceding calendar year is hereby imposed:LawlibraryofCRAlaw
ChanRoblesVirtualawlibrary7 Otherwise known as the “Revised Revenue Code of the City of Manila.”
A) On persons who sell goods and services in the course of trade or business; and those who import goods whether for business or otherwise as provided in Sections 100 to 103 of the NIRC as administered and determined by the Bureau of Internal Revenue pursuant to the pertinent provisions of said code. B) On the gross receipts of keepers of garages, cars for rent or hire driven by the lessee, transportation contractors, persons who transport passengers or freight for hire, and common carriers land, air or water, except owners of bancas and owners of animal-drawn two-wheel vehicle. C) On the amount paid on every overseas dispatch, message or conversation transmitted from the Philippines by telephone, telegraph, telewriter exchange, wireless and other communication equipment services, except amounts paid by the government, its political subdivisions or instrumentalities; diplomatic services; public international organizations or any of their agencies base in the Philippines; and news services. The tax shall be payable by the person paying for the services rendered and shall be paid to the person rendering the services who is required to collect and pay the tax within twenty (20) days after the end of each quarter. D) Excisable good subject to VAT (1) Distilled spirits (2) Wines (3) Tobacco products (other than cigarettes, cigar and chewing tobacco) (4) Tobacco especially prepared for chewing (5) Fireworks (6) Cinematographic film (7) Saccharine (8) Coal and coke (9) Fermented liquor, brewer’s wholesale price, excluding the ad valorem tax (10) Automobiles, manufacturers or importers selling price (11) Non-essential goods based on wholesale price, net of excise tax and vat (a) Jewelry, whether real or imitation, pearls, precious and semi-precious stones and imitation thereof; goods made of, or ornamented, mounted or fitted with precious metals or imitation thereof or ivory (not including surgical and dental instruments, silver-plated wares, frames or mountings for spectacles or eyeglasses, and dental gold or gold alloys and other precious metals used in filling, mounting or fitting of teeth). (b) Perfumes and toilet waters. (c) Yacht and other vessels intended for pleasure or sports (12) Mineral products, based on actual market value of the annual gross output the time of removal. E) Excisable goods not subject to vat (1) Naphtha when used as raw materials for production of petrochemical products (2) Asphalt.
8 Entitled, “An Ordinance Amending Certain Sections of Ordinance No. 7988.”
9Rollo, pp. 79-81.
10 Supra note 7.
11 Supra note 8.
12 526 Phil. 249 (2006).
13 RTC rollo, p. 40.
14Rollo, pp. 77-78.
15 Id. at 60-76.
16 SEC. 195. Protest of Assessment. - When the local treasurer or his duly authorized representative finds that collect taxes, fees, or charges have not been paid, he shall issue a notice of assessment stating the nature of the tax, fee, or charge, the amount of deficiency, the surcharges, interests and penalties. Within sixty (60) days from the receipt of the notice of assessment, the taxpayer may file a written protest with the local treasurer contesting the assessment; otherwise, the assessment shall become final and executory. The local treasurer shall decide the protest within sixty (60) days from the time of its filing. If the local treasurer finds the protest to be wholly or partly meritorious, he shall issue a notice cancelling wholly or partly the assessment. However, if the local treasurer finds the assessment to be wholly or partly correct, he shall deny the protest wholly or partly with notice to the taxpayer. The taxpayer shall have thirty (30) days from the receipt of the denial of the protest or from the lapse of the sixty-day period prescribed herein within which to appeal with the court of competent jurisdiction otherwise the assessment becomes conclusive and unappealable.
17Rollo, pp. 49-58.
18 Resolution, dated January 30, 2013; id. at 82
19 Resolution, dated March 10, 2014; id. at 101.
20 Id. at 235-236.
21 Id. at 18.
22 Id. at 14.
23 Id. at 15.
24 Id. at 19-20.
25 Id. at 240-257.
26 Id. at 264-278.
27Wee Poco & Co., Inc. v. Posadas, 64 Phil. 640, 644 (1937).
28 RTC rollo, p. 24.
29Commissioner on Internal Revenue v. Fort Bonifacio Development Corporation, G.R. No. 167606, August 11, 2010, 628 SCRA 96, 103.
30Rollo, pp. 19-20.
31 510 Phil. 750 (2005).
32 Id. at 761-764.
33 Id. at 764-765.
34 Sec. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts in Civil Cases. – Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts shall exercise:LawlibraryofCRAlaw
(1) Exclusive original jurisdiction over civil actions and probate proceedings, testate and intestate, including the grant of provisional remedies in proper cases, where the value of the personal property, estate, or amount of the demand does not exceed One hundred thousand pesos (P200,000.00) or, in Metro Manila where such personal property, estate, or amount of the demand does not exceed Two hundred thousand pesos (P400,000.00) x x x
35Rollo, pp. 160-181.
36 Id. at 183-188.
37 Id. at 190-195.
38 Id. at 196-201.
39 Id. at 203-208.
40 Id. at 210-215.
41 Id. at 217-222.
42 Supra note 12.
43 612 Phil. 609 (2009).
44 Resolution, G.R. No. 167283, February 10, 2010.
45Mindanao Geothermal Partnership v. Commissioner on Internal Revenue, G.R. Nos. 193301 & 194637, March 11, 2013, 693 SCRA 49,76-78, citing Commissioner of Internal Revenue v. San Roque Power Corporation, Taganito Mining Corporation v. Commissioner of Internal Revenue, and Philex Mining Corporation v. Commissioner of Internal Revenue, G.R. Nos. 187485, 196113, and 197156, 12 February 2013, 690 SCRA 336.