J.

DOUBLE TAXATION

G.R. No. L-16619 June 29, 1963

COMPAÑIA GENERAL DE TABACOS DE FILIPINAS, plaintiff-appellee,

vs.
CITY OF MANILA, ET AL., defendants-appellants.

Ponce Enrile, Siguion Reyna, Montecillo and Belo for plaintiff-appellee.

City Fiscal Hermogenes Concepcion, Jr. and Assistant City Fiscal M. T. Reyes for defendants-appellants.

DIZON, J.:

Appeal from the decision of the Court of First Instance of Manila ordering the City Treasurer of Manila to refund the sum of
P15,280.00 to Compania General de Tabacos de Filipinas.

Appellee Compania General de Tabacos de Filipinas — hereinafter referred to simply as Tabacalera — filed this action in the Court of
First Instance of Manila to recover from appellants, City of Manila and its Treasurer, Marcelino Sarmiento — also hereinafter
referred to as the City — the sum of P15,280.00 allegedly overpaid by it as taxes on its wholesale and retail sales of liquor for the
period from the third quarter of 1954 to the second quarter of 1957, inclusive, under Ordinances Nos. 3634, 3301, and 3816.

Tabacalera, as a duly licensed first class wholesale and retail liquor dealer paid the City the fixed license fees prescribed by Ordinance
No. 3358 for the years 1954 to 1957, inclusive, and, as a wholesale and retail dealer of general merchandise, it also paid the sales
taxes required by Ordinances Nos. 3634, 3301, and 3816.1äwphï1.ñët

In its sworn statements of wholesale, retail, and grocery sales of general merchandise from the third quarter of 1954 to the second
quarter of 1957, inclusive, Tabacalera included its liquor sales of the same period, and it is not denied that of the taxes it paid on all
its sales of general merchandise, the sum of P15,280.00 subject to the action represents the tax corresponding to the liquor sales
aforesaid.

Tabacalera's action for refund is based on the theory that, in connection with its liquor sales, it should pay the license fees
prescribed by Ordinance No. 3358 but not the municipal sales taxes imposed by Ordinances Nos. 3634, 3301, and 3816; and since it
already paid the license fees aforesaid, the sales taxes paid by it — amounting to the sum of P15,208.00 — under the three
ordinances mentioned heretofore is an overpayment made by mistake, and therefore refundable.

The City, on the other hand, contends that, for the permit issued to it granting proper authority to "conduct or engage in the sale of
alcoholic beverages, or liquors" Tabacalera is subject to pay the license fees prescribed by Ordinance No. 3358, aside from the sales
taxes imposed by Ordinances Nos. 3634, 3301, and 3816; that, even assuming that Tabacalera is not subject to the payment of the
sales taxes prescribed by the said three ordinances as regards its liquor sales, it is not entitled to the refund demanded for the
following reasons:.

(a) The said amount was paid by the plaintiff voluntarily and without protest;

(b) If at all the alleged overpayment was made by mistake, such mistake was one of law and arose from the plaintiff's
neglect of duty; .

(c) The said amount had been added by the plaintiff to the selling price of the liquor sold by it and passed to the consumers;
and

(d) The said amount had been already expended by the defendant City for public improvements and essential services of
the City government, the benefits of which are enjoyed, and being enjoyed by the plaintiff.

It is admitted that as liquor dealer, Tabacalera paid annually the wholesale and retail liquor license fees under Ordinance No. 3358.
In 1954, City Ordinance No. 3634, amending City Ordinance No. 3420, and City Ordinance No. 3816, amending City Ordinance No.
3301 were passed. By reason thereof, the City Treasurer issued the regulations marked Exhibit A, according to which, the term
"general merchandise as used in said ordinances, includes all articles referred to in Chapter 1, Sections 123 to 148 of the National
Internal Revenue Code. Of these, Sections 133-135 included liquor among the taxable articles. Pursuant to said regulations,
Tabacalera included its sales of liquor in its sworn quarterly declaration submitted to the City Treasurer beginning from the third
quarter of 1954 to the second quarter of 1957, with a total value of P722,501.09 and correspondingly paid a wholesaler's tax
amounting to P13,688.00 and a retailer's tax amounting to P1,520.00, or a total of P15,208.00 — the amount sought to be
recovered.

It appears that in the year 1954, the City, through its treasurer, addressed a letter to Messrs. Sycip, Gorres, Velayo and Co., an
accounting firm, expressing the view that liquor dealers paying the annual wholesale and retail fixed tax under City Ordinance No.
3358 are not subject to the wholesale and retail dealers' taxes prescribed by City Ordinances Nos. 3634, 3301, and 3816. Upon
learning of said opinion, appellee stopped including its sales of liquor in its quarterly sworn declarations submitted in accordance
with the aforesaid City Ordinances Nos. 3634, 3301, and 3816, and on December 3, 1957, it addressed a letter to the City Treasurer
demanding refund of the alleged overpayment. As the claim was disallowed, the present action was instituted.

The term "tax" applies — generally speaking — to all kinds of exactions which become public funds. The term is often loosely used to
include levies for revenue as well as levies for regulatory purposes. Thus license fees are commonly called taxes. Legally speaking,
however, license fee is a legal concept quite distinct from tax; the former is imposed in the exercise of police power for purposes of
regulation, while the latter is imposed under the taxing power for the purpose of raising revenues (MacQuillin, Municipal
Corporations, Vol. 9, 3rd Edition, p. 26).

Ordinance No. 3358 is clearly one that prescribes municipal license fees for the privilege to engage in the business of selling liquor or
alcoholic beverages, having been enacted by the Municipal Board of Manila pursuant to its charter power to fix license fees on, and
regulate, the sale of intoxicating liquors, whether imported or locally manufactured. (Section 18 [p], Republic Act 409, as amended).
The license fees imposed by it are essentially for purposes of regulation, and are justified, considering that the sale of intoxicating
liquor is, potentially at least, harmful to public health and morals, and must be subject to supervision or regulation by the state and
by cities and municipalities authorized to act in the premises. (MacQuillin, supra, p. 445.)

On the other hand, it is clear that Ordinances Nos. 3634, 3301, and 3816 impose taxes on the sales of general merchandise,
wholesale or retail, and are revenue measures enacted by the Municipal Board of Manila by virtue of its power to tax dealers for the
sale of such merchandise. (Section 10 [o], Republic Act No. 409, as amended.).

Under Ordinance No. 3634 the word "merchandise" as employed therein clearly includes liquor. Aside from this, we have held in City
of Manila vs. Inter-Island Gas Service, Inc., G.R. No. L-8799, August 31, 1956, that the word "merchandise" refers to all subjects of
commerce and traffic; whatever is usually bought and sold in trade or market; goods or wares bought and sold for gain; commodities
or goods to trade; and commercial commodities in general.

That Tabacalera is being subjected to double taxation is more apparent than real. As already stated what is collected under
Ordinance No. 3358 is a license fee for the privilege of engaging in the sale of liquor, a calling in which — it is obvious — not anyone
or anybody may freely engage, considering that the sale of liquor indiscriminately may endanger public health and morals. On the
other hand, what the three ordinances mentioned heretofore impose is a tax for revenue purposes based on the sales made of the
same article or merchandise. It is already settled in this connection that both a license fee and a tax may be imposed on the same
business or occupation, or for selling the same article, this not being in violation of the rule against double taxation (Bentley Gray
Dry Goods Co. vs. City of Tampa, 137 Fla. 641, 188 So. 758; MacQuillin, Municipal Corporations, Vol. 9, 3rd Edition, p. 83). This is
precisely the case with the ordinances involved in the case at bar.

Appellee's contention that the City is repudiating its previous view — expressed by its Treasurer in a letter addressed to Messrs.
Sycip, Gorres, Velayo & Co. in 1954 — that a liquor dealer who pays the annual license fee under Ordinance No. 3358 is exempted
from the wholesalers and retailers taxes under the other three ordinances mentioned heretofore is of no consequence. The
government is not bound by the errors or mistakes committed by its officers, specially on matters of law.

Having arrived at the above conclusion, we deem it unnecessary to consider the other legal points raised by the City.

WHEREFORE, the decision appealed from is reversed, with the result that this case should be, as it is hereby dismissed, with costs.

G.R. No. L-24756 October 31, 1968

CITY OF BAGUIO, plaintiff-appellee,
vs.
FORTUNATO DE LEON, defendant-appellant.

The City Attorney for plaintiff-appellee.

Fortunato de Leon for and in his own behalf as defendant-appellant.

FERNANDO, J.:

In this appeal, a lower court decision upholding the validity of an ordinance 1 of the City of Baguio imposing a license fee on any
person, firm, entity or corporation doing business in the City of Baguio is assailed by defendant-appellant Fortunato de Leon. He was
held liable as a real estate dealer with a property therein worth more than P10,000, but not in excess of P50,000, and therefore
obligated to pay under such ordinance the P50 annual fee. That is the principal question. In addition, there has been a firm and
unyielding insistence by defendant-appellant of the lack of jurisdiction of the City Court of Baguio, where the suit originated, a
complaint having been filed against him by the City Attorney of Baguio for his failure to pay the amount of P300 as license fee
covering the period from the first quarter of 1958 to the fourth quarter of 1962, allegedly, inspite of repeated demands. Nor was
defendant-appellant agreeable to such a suit being instituted by the City Treasurer without the consent of the Mayor, which for him
was indispensable. The lower court was of a different mind.

In its decision of December 19, 1964, it declared the above ordinance as amended, valid and subsisting, and held defendant-
appellant liable for the fees therein prescribed as a real estate dealer. Hence, this appeal. Assume the validity of such ordinance, and
there would be no question about the liability of defendant-appellant for the above license fee, it being shown in the partial
stipulation of facts, that he was "engaged in the rental of his property in Baguio" deriving income therefrom during the period
covered by the first quarter of 1958 to the fourth quarter of 1962.

The source of authority for the challenged ordinance is supplied by Republic Act No. 329, amending the city charter of
Baguio2 empowering it to fix the license fee and regulate "businesses, trades and occupations as may be established or practiced in
the City."

Unless it can be shown then that such a grant of authority is not broad enough to justify the enactment of the ordinance now
assailed, the decision appealed from must be affirmed. The task confronting defendant-appellant, therefore, was far from easy. Why
he failed is understandable, considering that even a cursory reading of the above amendment readily discloses that the enactment
of the ordinance in question finds support in the power thus conferred.

Nor is the question raised by him as to the validity thereof novel in character. In Medina v. City of Baguio,3 the effect of the
amendatory section insofar as it would expand the previous power vested by the city charter was clarified in these terms:
"Appellants apparently have in mind section 2553, paragraph (c) of the Revised Administrative Code, which empowers the City of
Baguio merely to impose a license fee for the purpose of rating the business that may be established in the city. The power as thus
conferred is indeed limited, as it does not include the power to levy a tax. But on July 15, 1948, Republic Act No. 329 was enacted
amending the charter of said city and adding to its power to license the power to tax and to regulate. And it is precisely having in
view this amendment that Ordinance No. 99 was approved in order to increase the revenues of the city. In our opinion, the
amendment above adverted to empowers the city council not only to impose a license fee but also to levy a tax for purposes of
revenue, more so when in amending section 2553 (b), the phrase 'as provided by law' has been removed by section 2 of Republic Act
No. 329. The city council of Baguio, therefore, has now the power to tax, to license and to regulate provided that the subjects
affected be one of those included in the charter. In this sense, the ordinance under consideration cannot be considered ultra
vires whether its purpose be to levy a tax or impose a license fee. The terminology used is of no consequence."

It would be an undue and unwarranted emasculation of the above power thus granted if defendant-appellant were to be sustained
in his contention that no such statutory authority for the enactment of the challenged ordinance could be discerned from the
language used in the amendatory act. That is about all that needs to be said in upholding the lower court, considering that the City
of Baguio was not devoid of authority in enacting this particular ordinance. As mentioned at the outset, however, defendant-
appellant likewise alleged procedural missteps and asserted that the challenged ordinance suffered from certain constitutional
infirmities. To such points raised by him, we shall now turn.

1. Defendant-appellant makes much of the alleged lack of jurisdiction of the City Court of Baguio in the suit for the collection of the
real estate dealer's fee from him in the amount of P300. He contended before the lower court, and it is his contention now, that
while the amount of P300 sought was within the jurisdiction of the City Court of Baguio where this action originated, since the
principal issue was the legality and constitutionality of the challenged ordinance, it is not such City Court but the Court of First
Instance that has original jurisdiction.

There is here a misapprehension of the Judiciary Act. The City Court has jurisdiction. Only recently, on September 7, 1968 to be
exact, we rejected a contention similar in character in Nemenzo v. Sabillano.4 The plaintiff in that case filed a claim for the payment
of his salary before the Justice of the Peace Court of Pagadian, Zamboanga del Sur. The question of jurisdiction was raised; the
defendant Mayor asserted that what was in issue was the enforcement of the decision of the Commission of Civil Service; the Justice
of the Peace Court was thus without jurisdiction to try the case. The above plea was curtly dismissed by Us, as what was involved
was "an ordinary money claim" and therefore "within the original jurisdiction of the Justice of the Peace Court where it was filed,
considering the amount involved." Such is likewise the situation here.

Moreover, in City of Manila v. Bugsuk Lumber Co.,5 a suit to collect from a defendant this license fee corresponding to the years
1951 and 1952 was filed with the Municipal Court of Manila, in view of the amount involved. The thought that the municipal court
lacked jurisdiction apparently was not even in the minds of the parties and did not receive any consideration by this Court.

Evidently, the fear is entertained by defendant-appellant that whenever a constitutional question is raised, it is the Court of First
Instance that should have original jurisdiction on the matter. It does not admit of doubt, however, that what confers jurisdiction is
the amount set forth in the complaint. Here, the sum sought to be recovered was clearly within the jurisdiction of the City Court of
Baguio.

Nor could it be plausibly maintained that the validity of such ordinance being open to question as a defense against its enforcement
from one adversely affected, the matter should be elevated to the Court of First Instance. For the City Court could rely on the
presumption of the validity of such ordinance,6 and the mere fact, however, that in the answer to such a complaint a constitutional
question was raised did not suffice to oust the City Court of its jurisdiction. The suit remains one for collection, the lack of validity
being only a defense to such an attempt at recovery. Since the City Court is possessed of judicial power and it is likewise axiomatic
that the judicial power embraces the ascertainment of facts and the application of the law, the Constitution as the highest law
superseding any statute or ordinance in conflict therewith, it cannot be said that a City Court is bereft of competence to proceed on
the matter. In the exercise of such delicate power, however, the admonition of Cooley on inferior tribunals is well worth
remembering. Thus: "It must be evident to any one that the power to declare a legislative enactment void is one which the judge,
conscious of the fallibility of the human judgment, will shrink from exercising in any case where he can conscientiously and with due
regard to duty and official oath decline the responsibility." 7 While it remains undoubted that such a power to pass on the validity of
an ordinance alleged to infringe certain constitutional rights of a litigant exists, still it should be exercised with due care and
circumspection, considering not only the presumption of validity but also the relatively modest rank of a city court in the judicial
hierarchy.

2. To repeat the challenged ordinance cannot be considered ultra vires as there is more than ample statutory authority for the
enactment thereof. Nonetheless, its validity on constitutional grounds is challenged because of the allegation that it imposed double
taxation, which is repugnant to the due process clause, and that it violated the requirement of uniformity. We do not view the
matter thus.

As to why double taxation is not violative of due process, Justice Holmes made clear in this language: "The objection to the taxation
as double may be laid down on one side. ... The 14th Amendment [the due process clause] no more forbids double taxation than it
does doubling the amount of a tax, short of confiscation or proceedings unconstitutional on other grounds." 8With that decision
rendered at a time when American sovereignty in the Philippines was recognized, it possesses more than just a persuasive effect. To
some, it delivered the coup de grace to the bogey of double taxation as a constitutional bar to the exercise of the taxing power. It
would seem though that in the United States, as with us, its ghost as noted by an eminent critic, still stalks the juridical state. In a
1947 decision, however,9 we quoted with approval this excerpt from a leading American decision: 10 "Where, as here, Congress has
clearly expressed its intention, the statute must be sustained even though double taxation results."

At any rate, it has been expressly affirmed by us that such an "argument against double taxation may not be invoked where one tax
is imposed by the state and the other is imposed by the city ..., it being widely recognized that there is nothing inherently obnoxious
in the requirement that license fees or taxes be exacted with respect to the same occupation, calling or activity by both the state
and the political subdivisions thereof."11

The above would clearly indicate how lacking in merit is this argument based on double taxation.
Now, as to the claim that there was a violation of the rule of uniformity established by the constitution. According to the challenged
ordinance, a real estate dealer who leases property worth P50,000 or above must pay an annual fee of P100. If the property is worth
P10,000 but not over P50,000, then he pays P50 and P24 if the value is less than P10,000. On its face, therefore, the above ordinance
cannot be assailed as violative of the constitutional requirement of uniformity. In Philippine Trust Company v. Yatco,12 Justice Laurel,
speaking for the Court, stated: "A tax is considered uniform when it operates with the same force and effect in every place where
the subject may be found."

There was no occasion in that case to consider the possible effect on such a constitutional requirement where there is a
classification. The opportunity came in Eastern Theatrical Co. v. Alfonso.13 Thus: "Equality and uniformity in taxation means that all
taxable articles or kinds of property of the same class shall be taxed at the same rate. The taxing power has the authority to make
reasonable and natural classifications for purposes of taxation; ..." About two years later, Justice Tuason, speaking for this Court
in Manila Race Horses Trainers Assn. v. De la Fuente 14 incorporated the above excerpt in his opinion and continued: "Taking
everything into account, the differentiation against which the plaintiffs complain conforms to the practical dictates of justice and
equity and is not discriminatory within the meaning of the Constitution."

To satisfy this requirement then, all that is needed as held in another case decided two years later, 15 is that the statute or ordinance
in question "applies equally to all persons, firms and corporations placed in similar situation." This Court is on record as accepting
the view in a leading American case16 that "inequalities which result from a singling out of one particular class for taxation or
exemption infringe no constitutional limitation."17

It is thus apparent from the above that in much the same way that the plea of double taxation is unavailing, the allegation that there
was a violation of the principle of uniformity is inherently lacking in persuasiveness. There is no need to pass upon the other
allegations to assail the validity of the above ordinance, it being maintained that the license fees therein imposed "is excessive,
unreasonable and oppressive" and that there is a failure to observe the mandate of equal protection. A reading of the ordinance will
readily disclose their inherent lack of plausibility.

3. That would dispose of all the errors assigned, except the last two, which would predicate a grievance on the complaint having
been started by the City Treasurer rather than the City Mayor of Baguio. These alleged errors, as was the case with the others
assigned, lack merit.

In much the same way that an act of a department head of the national government, performed within the limits of his authority, is
presumptively the act of the President unless reprobated or disapproved, 18 similarly the act of the City Treasurer, whose position is
roughly analogous, may be assumed to carry the seal of approval of the City Mayor unless repudiated or set aside. This should be the
case considering that such city official is called upon to see to it that revenues due the City are collected. When administrative steps
are futile and unavailing, given the stubbornness and obduracy of a taxpayer, convinced in good faith that no tax was due, judicial
remedy may be resorted to by him. It would be a reflection on the state of the law if such fidelity to duty would be met by
condemnation rather than commendation.

So, much for the analytical approach. The conclusion thus reached has a reinforcement that comes to it from the functional and
pragmatic test. If a city treasurer has to await the nod from the city mayor before a municipal ordinance is enforced, then
opportunity exists for favoritism and undue discrimination to come into play. Whatever valid reason may exist as to why one
taxpayer is to be accorded a treatment denied another, the suspicion is unavoidable that such a manifestation of official favor could
have been induced by unnamed but not unknown consideration. It would not be going too far to assert that even defendant-
appellant would find no satisfaction in such a sad state of affairs. The more desirable legal doctrine therefore, on the assumption
that a choice exists, is one that would do away with such temptation on the part of both taxpayer and public official alike.

WHEREFORE, the lower court decision of December 19, 1964, is hereby affirmed. Costs against defendant-appellant.

G.R. No. L-24813 April 28, 1969

DR. HERMENEGILDO SERAFICA, plaintiff-appellant,

vs.
THE TREASURER OF ORMOC CITY, THE MUNICIPAL BOARD OF ORMOC CITY, HON. ESTEBAN C. CONEJOS, as Mayor of Ormoc City
and ORMOC CITY, defendants-appellees.

Cleto P. Evangelista for plaintiff-appellant.

The City Fiscal of Ormoc City for defendant-appellees.
CONCEPCION, C.J.:

Direct appeal from a decision of the Court of First Instance of Leyte dismissing plaintiff's complaint, without pronouncement as to
costs.

Plaintiff, Dr. Hermenegildo Serafica, seeks a declaration of nullity of Ordinance No. 13, Series of 1964, of Ormoc City, imposing a "tax
of five pesos (P5.00) for every one thousand (1,000) board feet of lumber sold at Ormoc City by any person, partnership, firm,
association, corporation, or entities", pursuant to which the Treasurer of said City levied on and collected from said plaintiff, as
owner of the Serafica Sawmill, the aggregate sum of P1,837.84, as tax on 367,568 board feet of lumber sold, in said City, during the
third quarter of 1964. After appropriate proceedings, the lower court rendered judgment upholding the validity of said ordinance
and denying the relief prayed for by Dr. Serafica. Hence, this appeal by the latter.

The contested ordinance reads:

ORDINANCE NO. 13

AN ORDINANCE IMPOSING A TAX OF FIVE PESOS (P5.00) FOR EVERY ONE THOUSAND BOARD FEET OF LUMBER SOLD AT
ORMOC CITY AND FOR OTHER PURPOSES.

BE IT ORDAINED, by authority of the Municipal Board of Ormoc City, Philippines, pursuant to the provisions of Republic Act
179, as amended by RA 429, otherwise known as the Charter of Ormoc City, That:

SECTION 1. City tax. — There shall be paid to the City Treasurer a city tax of five pesos (P5.00) for every one thousand
(1,000) board feet of lumber sold at Ormoc City by any person, partnership, firm, association, corporation or entity.

SECTION 2. Time and manner of payment and penalty for delinquency. — The city tax herein prescribed shall be payable
without penalty within twenty (20) days after the close of every quarter for which the tax is due. Failure to pay the tax
within the prescribed time shall render the taxpayer subject to a surcharge of fifty percentum (50%) for the first offense
and one hundred percentum (100%) for subsequent failures to pay within the prescribed period.

SECTION 3. Payment to be rendered by taxpayer. — The taxpayer is hereby obliged to include the tax due in every invoice
issued for the sale of lumber which tax shall be submitted for payment to the City Treasurer within twenty (20) days after
the close of every quarter.

SECTION 4. Inspection of taxpayer's books and records. — For the purpose of enforcing the provisions of this Ordinance, the
City Treasurer or any of his deputies specifically authorized in writing for the purpose, shall have authority to examine the
books and records of any person, partnership, firm, association, corporation or entity subject to the tax herein imposed,
PROVIDED, HOWEVER, That such examination shall be made only during regular business hours, unless the person,
partnership, firm, association, corporation or entity concerned shall consent otherwise.

SEC. 5. Penalty for violation. — Any violation of the provisions of the Ordinance shall be punishable by a fine of not more
than five hundred (P500.00) pesos and an imprisonment of not more than three (3) months.

SEC. 6. Construction of this Ordinance. — If any part or section of this Ordinance shall be declared unconstitutional or ultra
vires, such part or section shall not invalidate any other provision hereof.

SEC. 7. Effectivity. — This Ordinance shall take effect immediately upon approval. ENACTED, June 17, 1964.lawphi1.nêt

RESOLVED, FURTHER, to authorize the City Treasurer to copies of this Ordinance for issuance to all concerned;

RESOLVED, FINALLY, to furnish a copy of this resolution-ordinance each to the City Treasurer, the City Auditor, the City
Fiscal, the City Judge, and all concerned;

CARRIED. Six affirmative votes registered by Councilors Tugonon, Alfaro, Kierulf, Abas, Besabella, and Du; one abstention
registered by Councilor Aviles.
 xxx xxx xxx

Plaintiff assails this ordinance as null and void upon the grounds that: (1) the Charter of Ormoc City (Republic Acts Nos. 179 and 429)
authorizes the same to "regulate", but not to "tax" lumber yards; (2) the ordinance in question imposes, in effect, double taxation,
because the business of lumberyard is already regulated under said Charter and the sale of lumber is "a mere incident to the
business of lumber yard"; (3) the tax imposed is "unfair, unjust, arbitrary, unreasonable, oppressive and contrary to the principles of
taxation"; and (4) "the public was not heard and given a chance to air its views" thereon.

With respect to the first ground, We have held in Ormoc Sugar Co. v. Municipal Board of Ormoc City, 1 that the taxing power of the
City of Ormoc, under section 2 of the Local Autonomy Act 2 is "broad" and "sufficiently plenary to cover everything, excepting those
mentioned therein". 3 It should be noted that in said case of Ormoc Sugar Co., We upheld the validity of a sales tax.

As regards the second ground, suffice it to say that regulation and taxation are two different things, the first being an exercise of
police power, whereas the latter is not, apart from the fact that double taxation is not prohibited in the Philippines. 4

The third objection is premised upon the fact that the tax in question is imposed regardless of the class of lumber sold, although
there are several categories thereof, commanding different prices. Plaintiff has not proven, however, or even alleged the prices
corresponding to each category, so that, like the lower court, We have no means to ascertain the accuracy of the conclusion drawn
by him, and must, accordingly, rely upon the presumption that the City Council had merely complied with its duty and that the
ordinance is valid, unless and until the contrary has been duly established. 5

The last objection is based upon Provincial Circular No. 24 of the Department of Finance, dated March 31, 1960, suggesting that, "in
the enactment of tax ordinances .. under the Local Autonomy Act ... where practicable, public hearings be held wherein the views of
the public ... may be heard." This is, however, a mere suggestion, compliance with which is not obligatory, so that failure to act in
accordance therewith can not and does not affect the validity of the tax ordinance.

Indeed, since local governments are subject, not to the control, but merely to the general supervision of the President, it is to say
the least, doubtful that the latter could have made compliance with said circular obligatory. 6

We have not overlooked the fact that, pursuant to Sec. 2 of Republic Act No. 2264 as amended "no city, municipality or municipal
district may levy or impose ...

xxx xxx xxx

(e) Taxes on forest products or forest concessions."

Although lumber is a forest product, this imitation has no application to the case at bar, the tax in question being imposed, not upon
lumber, but upon its sale. Said tax is not levied upon the lumber in plaintiff's sawmill and does not become due until after the
lumber has been sold. Hence, the case at bar is distinguishable from Golden Ribbon Lumber Co., Inc. v. City of Butuan 7 in that the
ordinance involved therein provided that "every person, association or corporation operating a lumber mill and/or lumber yard
within the territory of the City of Butuan shall pay to the City a tax of two-fifths (P.004) centavo for every board foot of lumber sawn,
manufactured and/or produced." In short, the tax in that case was imposed upon the "lumber" — a forest product, not subject to
local taxation — whether sold or not. Similarly, Santos Lumber Co. v. City of Cebu 8 and Jose S. Johnston & Sons v. Ramon
Regondola 9 cited by the plaintiff, refer to situations arising before the enactment of Republic Act No. 2264, 10 and, hence, are
inapplicable to the present case.

Neither have We overlooked the proviso in Sec. 2 of said Act prohibiting the imposition of "any percentage tax on sales or other
taxes in any form based thereon," for this injunction is directed exclusively to "municipalities and municipal districts," and does not
apply to cities.

WHEREFORE, the decision appealed from should be, as it is hereby affirmed, with costs against plaintiff herein. It is so ordered.

G.R. No. 100152 March 31, 2000

ACEBEDO OPTICAL COMPANY, INC., petitioner,

vs.
THE HONORABLE COURT OF APPEALS, Hon. MAMINDIARA MANGOTARA, in his capacity as Presiding Judge of the RTC, 12th
Judicial Region, Br. 1, Iligan City; SAMAHANG OPTOMETRIST Sa PILIPINAS — Iligan City Chapter, LEO T. CAHANAP, City Legal
Officer, and Hon. CAMILO P. CABILI, City Mayor of Iligan, respondents.

PURISIMA, J.:

At bar is a petition for review under Rule 45 of the Rules of Court seeking to nullify the dismissal by the Court of Appeals of the
original petition for certiorari, prohibition and mandamus filed by the herein petitioner against the City Mayor and City Legal Officer
of Iligan and the Samahang Optometrist sa Pilipinas — Iligan Chapter (SOPI, for brevity).

The antecedent facts leading to the filing of the instant petition are as follows:

Petitioner applied with the Office of the City Mayor of Iligan for a business permit. After consideration of petitioner's application and
the opposition interposed thereto by local optometrists, respondent City Mayor issued Business Permit No. 5342 subject to the
following conditions:

1. Since it is a corporation, Acebedo cannot put up an optical clinic but only a commercial store;

2. Acebedo cannot examine and/or prescribe reading and similar optical glasses for patients, because these are functions of
optical clinics;

3. Acebedo cannot sell reading and similar eyeglasses without a prescription having first been made by an independent
optometrist (not its employee) or independent optical clinic. Acebedo can only sell directly to the public, without need of a
prescription, Ray-Ban and similar eyeglasses;

4. Acebedo cannot advertise optical lenses and eyeglasses, but can advertise Ray-Ban and similar glasses and frames;

5. Acebedo is allowed to grind lenses but only upon the prescription of an independent optometrist. 1

On December 5, 1988, private respondent Samahan ng Optometrist Sa Pilipinas (SOPI), Iligan Chapter, through its Acting President,
Dr. Frances B. Apostol, lodged a complaint against the petitioner before the Office of the City Mayor, alleging that Acebedo had
violated the conditions set forth in its business permit and requesting the cancellation and/or revocation of such permit.

Acting on such complaint, then City Mayor Camilo P. Cabili designated City Legal Officer Leo T. Cahanap to conduct an investigation
on the matter. On July 12, 1989, respondent City Legal Officer submitted a report to the City Mayor finding the herein petitioner
guilty of violating all the conditions of its business permit and recommending the disqualification of petitioner from operating its
business in Iligan City. The report further advised that no new permit shall be granted to petitioner for the year 1989 and should
only be given time to wind up its affairs.

On July 19, 1989, the City Mayor sent petitioner a Notice of Resolution and Cancellation of Business Permit effective as of said date
and giving petitioner three (3) months to wind up its affairs.

On October 17, 1989, petitioner brought a petition for certiorari, prohibition and mandamus with prayer for restraining
order/preliminary injunction against the respondents, City Mayor, City Legal Officer and Samahan ng Optometrists sa Pilipinas-Iligan
City Chapter (SOPI), docketed as Civil Case No. 1497 before the Regional Trial Court of Iligan City, Branch I. Petitioner alleged that (1)
it was denied due process because it was not given an opportunity to present its evidence during the investigation conducted by the
City Legal Officer; (2) it was denied equal protection of the laws as the limitations imposed on its business permit were not imposed
on similar businesses in Iligan City; (3) the City Mayor had no authority to impose the special conditions on its business permit; and
(4) the City Legal Officer had no authority to conduct the investigation as the matter falls within the exclusive jurisdiction of the
Professional Regulation Commission and the Board of Optometry.

Respondent SOPI interposed a Motion to Dismiss the Petition on the ground of non-exhaustion of administrative remedies but on
November 24, 1989, Presiding Judge Mamindiara P. Mangotara deferred resolution of such Motion to Dismiss until after trial of the
case on the merits. However, the prayer for a writ of preliminary injunction was granted. Thereafter, respondent SOPI filed its
answer.1âwphi1.nêt
On May 30, 1990, the trial court dismissed the petition for failure to exhaust administrative remedies, and dissolved the writ of
preliminary injunction it earlier issued. Petitioner's motion for reconsideration met the same fate. It was denied by an Order dated
June 28, 1990.

On October 3, 1990, instead of taking an appeal, petitioner filed a petition for certiorari, prohibition and mandamus with the Court
of Appeals seeking to set aside the questioned Order of Dismissal, branding the same as tainted with grave abuse of discretion on
the part of the trial court.

On January 24, 1991, the Ninth Division 2 of the Court of Appeals dismissed the petition for lack of merit. Petitioner's motion
reconsideration was also denied in the Resolution dated May 15, 1991.

Undaunted, petitioner has come before this court via the present petition, theorizing that:

A.

THE RESPONDENT COURT, WHILE CORRECTLY HOLDING THAT THE RESPONDENT CITY MAYOR ACTED BEYOND HIS
AUTHORITY IN IMPOSING THE SPECIAL CONDITIONS IN THE PERMIT AS THEY HAD NO BASIS IN ANY LAW OR ORDINANCE,
ERRED IN HOLDING THAT THE SAID SPECIAL CONDITIONS NEVERTHELESS BECAME BINDING ON PETITIONER UPON ITS
ACCEPTANCE THEREOF AS A PRIVATE AGREEMENT OR CONTRACT.

B.

THE RESPONDENT COURT OF APPEALS ERRED IN HOLDING THAT THE CONTRACT BETWEEN PETITIONER AND THE CITY OF
ILIGAN WAS ENTERED INTO BY THE LATTER IN THE PERFORMANCE OF ITS PROPRIETARY FUNCTIONS.

The petition is impressed with merit.

Although petitioner agrees with the finding of the Court of Appeals that respondent City Mayor acted beyond the scope of his
authority in imposing the assailed conditions in subject business permit, it has excepted to the ruling of the Court of Appeals that the
said conditions nonetheless became binding on petitioner, once accepted, as a private agreement or contract. Petitioner maintains
that the said special conditions are null and void for being ultra vires and cannot be given effect; and therefore, the principle of
estoppel cannot apply against it.

On the other hand, the public respondents, City Mayor and City Legal Officer, private respondent SOPI and the Office of the Solicitor
General contend that as a valid exercise of police power, respondent City Mayor has the authority to impose, as he did, special
conditions in the grant of business permits.

Police power as an inherent attribute of sovereignty is the power to prescribe regulations to promote the health, morals, peace,
education, good order or safety and general welfare of the people. 9 The State, through the legislature, has delegated the exercise of
police power to local government units, as agencies of the State, in order to effectively accomplish and carry out the declared
objects of their creation. 4 This delegation of police power is embodied in the general welfare clause of the Local Government Code
which provides:

Sec. 6. General Welfare. — Every local government unit shall exercise the powers expressly granted, those necessarily
implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective governance, and
those which are essential to the promotion of the general welfare. Within their respective territorial jurisdictions, local
government units shall ensure and support, among other things, the preservation and enrichment of culture, promote
health and safety, enhance the right of the people to a balanced ecology, encourage and support the development of
appropriate and self-reliant scientific and technological capabilities, improve public morals, enhance economic prosperity
and social justice, promote full employment among their residents, maintain peace and order, and preserve the comfort
and convenience of their inhabitants.

The scope of police power has been held to be so comprehensive as to encompass almost all matters affecting the health, safety,
peace, order, morals, comfort and convenience of the community. Police power is essentially regulatory in nature and the power to
issue licenses or grant business permits, if exercised for a regulatory and not revenue-raising purpose, is within the ambit of this
power. 5
The authority of city mayors to issue or grant licenses and business permits is beyond cavil. It is provided for by law. Section 171,
paragraph 2 (n) of Batas Pambansa Bilang 337 otherwise known as the Local Government Code of 1983, reads:

Sec. 171. The City Mayor shall:

xxx xxx xxx

n) Grant or refuse to grant, pursuant to law, city licenses or permits, and revoke the same for violation of law or ordinance
or the conditions upon which they are granted.

However, the power to grant or issue licenses or business permits must always be exercised in accordance with law, with utmost
observance of the rights of all concerned to due process and equal protection of the law.

Succinct and in point is the ruling of this Court, that:

. . . While a business may be regulated, such regulation must, however, be within the bounds of reason, i.e., the regulatory
ordinance must be reasonable, and its provision cannot be oppressive amounting to an arbitrary interference with the
business or calling subject of regulation. A lawful business or calling may not, under the guise of regulation, be
unreasonably interfered with even by the exercise of police power. . . .

xxx xxx xxx

. . . The exercise of police power by the local government is valid unless it contravenes the fundamental law of the land or
an act of the legislature, or unless it is against public policy or is unreasonable, oppressive, partial, discriminating or in
derogation of a common right. 6

In the case under consideration, the business permit granted by respondent City Mayor to petitioner was burdened with several
conditions. Petitioner agrees with the holding by the Court of Appeals that respondent City Mayor acted beyond his authority in
imposing such special conditions in its permit as the same have no basis in the law or ordinance. Public respondents and private
respondent SOPI, on the other hand, are one in saying that the imposition of said special conditions on petitioner's business permit
is well within the authority of the City Mayor as a valid exercise of police power.

As aptly discussed by the Solicitor General in his Comment, the power to issue licenses and permits necessarily includes the corollary
power to revoke, withdraw or cancel the same. And the power to revoke or cancel, likewise includes the power to restrict through
the imposition of certain conditions. In the case of Austin-Hardware, Inc. vs. Court of Appeals, 7 it was held that the power to license
carries with it the authority to provide reasonable terms and conditions under which the licensed business shall be conducted. As
the Solicitor General puts it:

If the City Mayor is empowered to grant or refuse to grant a license, which is a broader power, it stands to reason that he
can also exercise a lesser power that is reasonably incidental to his express power, i.e. to restrict a license through the
imposition of certain conditions, especially so that there is no positive prohibition to the exercise of such prerogative by the
City Mayor, nor is there any particular official or body vested with such authority. 8

However, the present inquiry does not stop there, as the Solicitor General believes. The power or authority of the City Mayor to
impose conditions or restrictions in the business permit is indisputable. What petitioner assails are the conditions imposed in its
particular case which, it complains, amount to a confiscation of the business in which petitioner is engaged.

Distinction must be made between the grant of a license or permit to do business and the issuance of a license to engage in the
practice of a particular profession. The first is usually granted by the local authorities and the second is issued by the Board or
Commission tasked to regulate the particular profession. A business permit authorizes the person, natural or otherwise, to engage in
business or some form of commercial activity. A professional license, on the other hand, is the grant of authority to a natural person
to engage in the practice or exercise of his or her profession.

In the case at bar, what is sought by petitioner from respondent City Mayor is a permit to engage in the business of running an
optical shop. It does not purport to seek a license to engage in the practice of optometry as a corporate body or entity, although it
does have in its employ, persons who are duly licensed to practice optometry by the Board of Examiners in Optometry.
The case of Samahan ng Optometrists sa Pilipinas vs. Acebedo International Corporation, G.R. No. 117097, 9 promulgated by this
Court on March 21, 1997, is in point. The factual antecedents of that case are similar to those of the case under consideration and
the issue ultimately resolved therein is exactly the same issue posed for resolution by this Court en banc.

In the said case, the Acebedo International Corporation filed with the Office of the Municipal Mayor an application for a business
permit for the operation of a branch of Acebedo Optical in Candon, Ilocos Sur. The application was opposed by the Samahan ng
Optometrists sa Pilipinas-Ilocos Sur Chapter, theorizing that Acebedo is a juridical entity not qualified to practice optometry. A
committee was created by the Office of the Mayor to study private respondent's application. Upon recommendation of the said
committee, Acebedo's application for a business permit was denied. Acebedo filed a petition with the Regional Trial Court but the
same was dismissed. On appeal, however, the Court of Appeals reversed the trial court's disposition, prompting the Samahan ng
Optometrists to elevate the matter to this Court.

The First Division of this Court, then composed of Honorable Justice Teodoro Padilla, Josue Bellosillo, Jose Vitug and Santiago
Kapunan, with Honorable Justice Regino Hermosisima, Jr. as ponente, denied the petition and ruled in favor of respondent Acebedo
International Corporation, holding that "the fact that private respondent hires optometrists who practice their profession in the
course of their employment in private respondent's optical shops, does not translate into a practice of optometry by private
respondent itself," 10 The Court further elucidated that in both the old and new Optometry Law, R.A. No. 1998, superseded by R.A.
No. 8050, it is significant to note that there is no prohibition against the hiring by corporations of optometrists. The Court concluded
thus:

All told, there is no law that prohibits the hiring by corporations of optometrists or considers the hiring by corporations of
optometrists as a practice by the corporation itself of the profession of optometry.

In the present case, the objective of the imposition of subject conditions on petitioner's business permit could be attained by
requiring the optometrists in petitioner's employ to produce a valid certificate of registration as optometrist, from the Board of
Examiners in Optometry. A business permit is issued primarily to regulate the conduct of business and the City Mayor cannot,
through the issuance of such permit, regulate the practice of a profession, like that of optometry. Such a function is within the
exclusive domain of the administrative agency specifically empowered by law to supervise the profession, in this case the
Professional Regulations Commission and the Board of Examiners in Optometry.

It is significant to note that during the deliberations of the bicameral conference committee of the Senate and the House of
Representatives on R.A. 8050 (Senate Bill No. 1998 and House Bill No. 14100), the committee failed to reach a consensus as to the
prohibition on indirect practice of optometry by corporations. The proponent of the bill, former Senator Freddie Webb, admitted
thus:

Senator Webb: xxx xxx xxx

The focus of contention remains to be the proposal of prohibiting the indirect practice of optometry by
corporations.1âwphi1 We took a second look and even a third look at the issue in the bicameral conference, but a
compromise remained elusive. 11

Former Senator Leticia Ramos-Shahani likewise voted her reservation in casting her vote:

Senator Shahani: Mr. President.

The optometry bills have evoked controversial views from the members of the panel. While we realize the need to uplift
the standards of optometry as a profession, the consesnsus of both Houses was to avoid touching sensitive issues which
properly belong to judicial determination. Thus, the bicameral conference committee decided to leave the issue of indirect
practice of optometry and the use of trade names open to the wisdom of the Courts which are vested with the prerogative
of interpreting the laws. 12

From the foregoing, it is thus evident that Congress has not adopted a unanimous position on the matter of prohibition of indirect
practice of optometry by corporations, specifically on the hiring and employment of licensed optometrists by optical corporations. It
is clear that Congress left the resolution of such issue for judicial determination, and it is therefore proper for this Court to resolve
the issue.
Even in the United States, jurisprudence varies and there is a conflict of opinions among the federal courts as to the right of a
corporation or individual not himself licensed, to hire and employ licensed optometrists. 13

Courts have distinguished between optometry as a learned profession in the category of law and medicine, and optometry as a
mechanical art. And, insofar as the courts regard optometry as merely a mechanical art, they have tended to find nothing
objectionable in the making and selling of eyeglasses, spectacles and lenses by corporations so long as the patient is actually
examined and prescribed for by a qualified practitioner. 14

The primary purpose of the statute regulating the practice of optometry is to insure that optometrical services are to be rendered by
competent and licensed persons in order to protect the health and physical welfare of the people from the dangers engendered by
unlicensed practice. Such purpose may be fully accomplished although the person rendering the service is employed by a
corporation. 15

Furthermore, it was ruled that the employment of a qualified optometrist by a corporation is not against public policy. 16 Unless
prohibited by statutes, a corporation has all the contractual rights that an individual has 17 and it does not become the practice of
medicine or optometry because of the presence of a physician or optometrist. 18 The manufacturing, selling, trading and bartering of
eyeglasses and spectacles as articles of merchandise do not constitute the practice of optometry. 19

In the case of Dvorine vs. Castelberg Jewelry Corporation, 20 defendant corporation conducted as part of its business, a department
for the sale of eyeglasses and the furnishing of optometrical services to its clients. It employed a registered optometrist who was
compensated at a regular salary and commission and who was furnished instruments and appliances needed for the work, as well as
an office. In holding that corporation was not engaged in the practice of optometry, the court ruled that there is no public policy
forbidding the commercialization of optometry, as in law and medicine, and recognized the general practice of making it a
commercial business by advertising and selling eyeglasses.

To accomplish the objective of the regulation, a state may provide by statute that corporations cannot sell eyeglasses, spectacles,
and lenses unless a duly licensed physician or a duly qualified optometrist is in charge of, and in personal attendance at the place
where such articles are sold. 21 In such a case, the patient's primary and essential safeguard lies in the optometrist's control of the
"treatment" by means of prescription and preliminary and final examination. 22

In analogy, it is noteworthy that private hospitals are maintained by corporations incorporated for the purpose of furnishing medical
and surgical treatment. In the course of providing such treatments, these corporations employ physicians, surgeons and medical
practitioners, in the same way that in the course of manufacturing and selling eyeglasses, eye frames and optical lenses, optical
shops hire licensed optometrists to examine, prescribe and dispense ophthalmic lenses. No one has ever charged that these
corporations are engaged in the practice of medicine. There is indeed no valid basis for treating corporations engaged in the
business of running optical shops differently.

It also bears stressing, as petitioner has pointed out, that the public and private respondents did not appeal from the ruling of the
Court of Appeals. Consequently, the holding by the Court of Appeals that the act of respondent City Mayor in imposing the
questioned special conditions on petitioner's business permit is ultra vires cannot be put into issue here by the respondents. It is
well-settled that:

A party who has not appealed from the decision may not obtain any affirmative relief from the appellate court other than
what he had obtain from the lower court, if any, whose decision is brought up on appeal. 23

. . . an appellee who is not an appellant may assign errors in his brief where his purpose is to maintain the judgment on
other grounds, but he cannot seek modification or reversal of the judgment or affirmative relief unless he has also
appealed. 24

Thus, respondents' submission that the imposition of subject special conditions on petitioner's business permit is not ultra
vires cannot prevail over the finding and ruling by the Court of Appeals from which they (respondents) did not appeal.

Anent the second assigned error, petitioner maintains that its business permit issued by the City Mayor is not a contract entered
into by Iligan City in the exercise of its proprietary functions, such that although petitioner agreed to such conditions, it cannot be
held in estoppel since ultra vires acts cannot be given effect.
Respondents, on the other hand, agree with the ruling of the Court of Appeals that the business permit in question is in the nature
of a contract between Iligan City and the herein petitioner, the terms and conditions of which are binding upon agreement, and that
petitioner is estopped from questioning the same. Moreover, in the Resolution denying petitioner's motion for reconsideration, the
Court of Appeals held that the contract between the petitioner and the City of Iligan was entered into by the latter in the
performance of its proprietary functions.

This Court holds otherwise. It had occasion to rule that a license or permit is not in the nature of a contract but a special privilege.

. . . a license or a permit is not a contract between the sovereignty and the licensee or permitee, and is not a property in the
constitutional sense, as to which the constitutional proscription against impairment of the obligation of contracts may
extend. A license is rather in the nature of a special privilege, of a permission or authority to do what is within its terms. It is
not in any way vested, permanent or absolute. 25

It is therefore decisively clear that estoppel cannot apply in this case. The fact that petitioner acquiesced in the special conditions
imposed by the City Mayor in subject business permit does not preclude it from challenging the said imposition, which is ultra
vires or beyond the ambit of authority of respondent City Mayor. Ultra vires acts or acts which are clearly beyond the scope of one's
authority are null and void and cannot be given any effect. The doctrine of estoppel cannot operate to give effect to an act which is
otherwise null and void or ultra vires.

The Court of Appeals erred in adjudging subject business permit as having been issued by responded City Mayor in the performance
of proprietary functions of Iligan City. As hereinabove elaborated upon, the issuance of business licenses and permits by a
municipality or city is essentially regulatory in nature. The authority, which devolved upon local government units to issue or grant
such licenses or permits, is essentially in the exercise of the police power of the State within the contemplation of the general
welfare clause of the Local Government Code.

WHEREFORE, the petition is GRANTED; the Decision of the Court of Appeals in CA-GR SP No. 22995 REVERSED: and the respondent
City Mayor is hereby ordered to reissue petitioner's business permit in accordance with law and with this disposition. No
pronouncement as to costs.

SO ORDERED.

G.R. No. L-31156 February 27, 1976

PEPSI-COLA BOTTLING COMPANY OF THE PHILIPPINES, INC., plaintiff-appellant,

vs.
MUNICIPALITY OF TANAUAN, LEYTE, THE MUNICIPAL MAYOR, ET AL., defendant appellees.

Sabido, Sabido & Associates for appellant.

Provincial Fiscal Zoila M. Redona & Assistant Provincial Fiscal Bonifacio R Matol and Assistant Solicitor General Conrado T. Limcaoco
& Solicitor Enrique M. Reyes for appellees.

MARTIN, J.:

This is an appeal from the decision of the Court of First Instance of Leyte in its Civil Case No. 3294, which was certified to Us by the
Court of Appeals on October 6, 1969, as involving only pure questions of law, challenging the power of taxation delegated to
municipalities under the Local Autonomy Act (Republic Act No. 2264, as amended, June 19, 1959).

On February 14, 1963, the plaintiff-appellant, Pepsi-Cola Bottling Company of the Philippines, Inc., commenced a complaint with
preliminary injunction before the Court of First Instance of Leyte for that court to declare Section 2 of Republic Act No.
2264.1 otherwise known as the Local Autonomy Act, unconstitutional as an undue delegation of taxing authority as well as to declare
Ordinances Nos. 23 and 27, series of 1962, of the municipality of Tanauan, Leyte, null and void.
On July 23, 1963, the parties entered into a Stipulation of Facts, the material portions of which state that, first, both Ordinances Nos.
23 and 27 embrace or cover the same subject matter and the production tax rates imposed therein are practically the same, and
second, that on January 17, 1963, the acting Municipal Treasurer of Tanauan, Leyte, as per his letter addressed to the Manager of
the Pepsi-Cola Bottling Plant in said municipality, sought to enforce compliance by the latter of the provisions of said Ordinance No.
27, series of 1962.

Municipal Ordinance No. 23, of Tanauan, Leyte, which was approved on September 25, 1962, levies and collects "from soft drinks
producers and manufacturers a tai of one-sixteenth (1/16) of a centavo for every bottle of soft drink corked." 2 For the purpose of
computing the taxes due, the person, firm, company or corporation producing soft drinks shall submit to the Municipal Treasurer a
monthly report, of the total number of bottles produced and corked during the month. 3

On the other hand, Municipal Ordinance No. 27, which was approved on October 28, 1962, levies and collects "on soft drinks
produced or manufactured within the territorial jurisdiction of this municipality a tax of ONE CENTAVO (P0.01) on each gallon (128
fluid ounces, U.S.) of volume capacity." 4 For the purpose of computing the taxes due, the person, fun company, partnership,
corporation or plant producing soft drinks shall submit to the Municipal Treasurer a monthly report of the total number of gallons
produced or manufactured during the month. 5

The tax imposed in both Ordinances Nos. 23 and 27 is denominated as "municipal production tax.'

On October 7, 1963, the Court of First Instance of Leyte rendered judgment "dismissing the complaint and upholding the
constitutionality of [Section 2, Republic Act No. 2264] declaring Ordinance Nos. 23 and 27 legal and constitutional; ordering the
plaintiff to pay the taxes due under the oft the said Ordinances; and to pay the costs."

From this judgment, the plaintiff Pepsi-Cola Bottling Company appealed to the Court of Appeals, which, in turn, elevated the case to
Us pursuant to Section 31 of the Judiciary Act of 1948, as amended.

There are three capital questions raised in this appeal:

1. — Is Section 2, Republic Act No. 2264 an undue delegation of power, confiscatory and oppressive?

2. — Do Ordinances Nos. 23 and 27 constitute double taxation and impose percentage or specific taxes?

3. — Are Ordinances Nos. 23 and 27 unjust and unfair?

1. The power of taxation is an essential and inherent attribute of sovereignty, belonging as a matter of right to every independent
government, without being expressly conferred by the people. 6 It is a power that is purely legislative and which the central
legislative body cannot delegate either to the executive or judicial department of the government without infringing upon the
theory of separation of powers. The exception, however, lies in the case of municipal corporations, to which, said theory does not
apply. Legislative powers may be delegated to local governments in respect of matters of local concern. 7 This is sanctioned by
immemorial practice. 8 By necessary implication, the legislative power to create political corporations for purposes of local self-
government carries with it the power to confer on such local governmental agencies the power to tax. 9 Under the New Constitution,
local governments are granted the autonomous authority to create their own sources of revenue and to levy taxes. Section 5, Article
XI provides: "Each local government unit shall have the power to create its sources of revenue and to levy taxes, subject to such
limitations as may be provided by law." Withal, it cannot be said that Section 2 of Republic Act No. 2264 emanated from beyond the
sphere of the legislative power to enact and vest in local governments the power of local taxation.

The plenary nature of the taxing power thus delegated, contrary to plaintiff-appellant's pretense, would not suffice to invalidate the
said law as confiscatory and oppressive. In delegating the authority, the State is not limited 6 the exact measure of that which is
exercised by itself. When it is said that the taxing power may be delegated to municipalities and the like, it is meant that there may
be delegated such measure of power to impose and collect taxes as the legislature may deem expedient. Thus, municipalities may
be permitted to tax subjects which for reasons of public policy the State has not deemed wise to tax for more general
purposes. 10 This is not to say though that the constitutional injunction against deprivation of property without due process of law
may be passed over under the guise of the taxing power, except when the taking of the property is in the lawful exercise of the
taxing power, as when (1) the tax is for a public purpose; (2) the rule on uniformity of taxation is observed; (3) either the person or
property taxed is within the jurisdiction of the government levying the tax; and (4) in the assessment and collection of certain kinds
of taxes notice and opportunity for hearing are provided. 11 Due process is usually violated where the tax imposed is for a private as
distinguished from a public purpose; a tax is imposed on property outside the State, i.e., extraterritorial taxation; and arbitrary or
oppressive methods are used in assessing and collecting taxes. But, a tax does not violate the due process clause, as applied to a
particular taxpayer, although the purpose of the tax will result in an injury rather than a benefit to such taxpayer. Due process does
not require that the property subject to the tax or the amount of tax to be raised should be determined by judicial inquiry, and a
notice and hearing as to the amount of the tax and the manner in which it shall be apportioned are generally not necessary to due
process of law. 12

There is no validity to the assertion that the delegated authority can be declared unconstitutional on the theory of double taxation.
It must be observed that the delegating authority specifies the limitations and enumerates the taxes over which local taxation may
not be exercised. 13 The reason is that the State has exclusively reserved the same for its own prerogative. Moreover, double
taxation, in general, is not forbidden by our fundamental law, since We have not adopted as part thereof the injunction against
double taxation found in the Constitution of the United States and some states of the Union. 14 Double taxation becomes obnoxious
only where the taxpayer is taxed twice for the benefit of the same governmental entity 15 or by the same jurisdiction for the same
purpose, 16 but not in a case where one tax is imposed by the State and the other by the city or municipality. 17

2. The plaintiff-appellant submits that Ordinance No. 23 and 27 constitute double taxation, because these two ordinances cover the
same subject matter and impose practically the same tax rate. The thesis proceeds from its assumption that both ordinances are
valid and legally enforceable. This is not so. As earlier quoted, Ordinance No. 23, which was approved on September 25, 1962, levies
or collects from soft drinks producers or manufacturers a tax of one-sixteen (1/16) of a centavo for .every bottle corked, irrespective
of the volume contents of the bottle used. When it was discovered that the producer or manufacturer could increase the volume
contents of the bottle and still pay the same tax rate, the Municipality of Tanauan enacted Ordinance No. 27, approved on October
28, 1962, imposing a tax of one centavo (P0.01) on each gallon (128 fluid ounces, U.S.) of volume capacity. The difference between
the two ordinances clearly lies in the tax rate of the soft drinks produced: in Ordinance No. 23, it was 1/16 of a centavo for every
bottle corked; in Ordinance No. 27, it is one centavo (P0.01) on each gallon (128 fluid ounces, U.S.) of volume capacity. The intention
of the Municipal Council of Tanauan in enacting Ordinance No. 27 is thus clear: it was intended as a plain substitute for the prior
Ordinance No. 23, and operates as a repeal of the latter, even without words to that effect. 18 Plaintiff-appellant in its brief admitted
that defendants-appellees are only seeking to enforce Ordinance No. 27, series of 1962. Even the stipulation of facts confirms the
fact that the Acting Municipal Treasurer of Tanauan, Leyte sought t6 compel compliance by the plaintiff-appellant of the provisions
of said Ordinance No. 27, series of 1962. The aforementioned admission shows that only Ordinance No. 27, series of 1962 is being
enforced by defendants-appellees. Even the Provincial Fiscal, counsel for defendants-appellees admits in his brief "that Section 7 of
Ordinance No. 27, series of 1962 clearly repeals Ordinance No. 23 as the provisions of the latter are inconsistent with the provisions
of the former."

That brings Us to the question of whether the remaining Ordinance No. 27 imposes a percentage or a specific tax. Undoubtedly, the
taxing authority conferred on local governments under Section 2, Republic Act No. 2264, is broad enough as to extend to almost
"everything, accepting those which are mentioned therein." As long as the text levied under the authority of a city or municipal
ordinance is not within the exceptions and limitations in the law, the same comes within the ambit of the general rule, pursuant to
the rules of exclucion attehus and exceptio firmat regulum in cabisus non excepti 19 The limitation applies, particularly, to the
prohibition against municipalities and municipal districts to impose "any percentage tax or other taxes in any form based
thereon nor impose taxes on articles subject to specific tax except gasoline, under the provisions of the National Internal Revenue
Code." For purposes of this particular limitation, a municipal ordinance which prescribes a set ratio between the amount of the tax
and the volume of sale of the taxpayer imposes a sales tax and is null and void for being outside the power of the municipality to
enact. 20 But, the imposition of "a tax of one centavo (P0.01) on each gallon (128 fluid ounces, U.S.) of volume capacity" on all soft
drinks produced or manufactured under Ordinance No. 27 does not partake of the nature of a percentage tax on sales, or other
taxes in any form based thereon. The tax is levied on the produce (whether sold or not) and not on the sales. The volume capacity of
the taxpayer's production of soft drinks is considered solely for purposes of determining the tax rate on the products, but there is
not set ratio between the volume of sales and the amount of the tax. 21

Nor can the tax levied be treated as a specific tax. Specific taxes are those imposed on specified articles, such as distilled spirits,
wines, fermented liquors, products of tobacco other than cigars and cigarettes, matches firecrackers, manufactured oils and other
fuels, coal, bunker fuel oil, diesel fuel oil, cinematographic films, playing cards, saccharine, opium and other habit-forming
drugs. 22 Soft drink is not one of those specified.

3. The tax of one (P0.01) on each gallon (128 fluid ounces, U.S.) of volume capacity on all softdrinks, produced or manufactured, or
an equivalent of 1-½ centavos per case, 23 cannot be considered unjust and unfair. 24 an increase in the tax alone would not support
the claim that the tax is oppressive, unjust and confiscatory. Municipal corporations are allowed much discretion in determining the
reates of imposable taxes. 25 This is in line with the constutional policy of according the widest possible autonomy to local
governments in matters of local taxation, an aspect that is given expression in the Local Tax Code (PD No. 231, July 1, 1973). 26
Unless the amount is so excessive as to be prohibitive, courts will go slow in writing off an ordinance as unreasonable. 27 Reluctance
should not deter compliance with an ordinance such as Ordinance No. 27 if the purpose of the law to further strengthen local
autonomy were to be realized. 28

Finally, the municipal license tax of P1,000.00 per corking machine with five but not more than ten crowners or P2,000.00 with ten
but not more than twenty crowners imposed on manufacturers, producers, importers and dealers of soft drinks and/or mineral
waters under Ordinance No. 54, series of 1964, as amended by Ordinance No. 41, series of 1968, of defendant
Municipality, 29 appears not to affect the resolution of the validity of Ordinance No. 27. Municipalities are empowered to impose,
not only municipal license taxes upon persons engaged in any business or occupation but also to levy for public purposes, just and
uniform taxes. The ordinance in question (Ordinance No. 27) comes within the second power of a municipality.

ACCORDINGLY, the constitutionality of Section 2 of Republic Act No. 2264, otherwise known as the Local Autonomy Act, as
amended, is hereby upheld and Municipal Ordinance No. 27 of the Municipality of Tanauan, Leyte, series of 1962, re-pealing
Municipal Ordinance No. 23, same series, is hereby declared of valid and legal effect. Costs against petitioner-appellant.

SO ORDERED.

G.R. No. L-26521 December 28, 1968

EUSEBIO VILLANUEVA, ET AL., plaintiff-appellee,

vs.
CITY OF ILOILO, defendants-appellants.

Pelaez, Jalandoni and Jamir for plaintiff-appellees.

Assistant City Fiscal Vicente P. Gengos for defendant-appellant.

CASTRO, J.:

Appeal by the defendant City of Iloilo from the decision of the Court of First Instance of Iloilo declaring illegal Ordinance 11, series of
1960, entitled, "An Ordinance Imposing Municipal License Tax On Persons Engaged In The Business Of Operating Tenement Houses,"
and ordering the City to refund to the plaintiffs-appellees the sums of collected from them under the said ordinance.

On September 30, 1946 the municipal board of Iloilo City enacted Ordinance 86, imposing license tax fees as follows: (1) tenement
house (casa de vecindad), P25.00 annually; (2) tenement house, partly or wholly engaged in or dedicated to business in the streets
of J.M. Basa, Iznart and Aldeguer, P24.00 per apartment; (3) tenement house, partly or wholly engaged in business in any other
streets, P12.00 per apartment. The validity and constitutionality of this ordinance were challenged by the spouses Eusebio
Villanueva and Remedies Sian Villanueva, owners of four tenement houses containing 34 apartments. This Court, in City of Iloilo vs.
Remedios Sian Villanueva and Eusebio Villanueva, L-12695, March 23, 1959, declared the ordinance ultra vires, "it not appearing that
the power to tax owners of tenement houses is one among those clearly and expressly granted to the City of Iloilo by its Charter."

On January 15, 1960 the municipal board of Iloilo City, believing, obviously, that with the passage of Republic Act 2264, otherwise
known as the Local Autonomy Act, it had acquired the authority or power to enact an ordinance similar to that previously declared
by this Court as ultra vires, enacted Ordinance 11, series of 1960, hereunder quoted in full:

AN ORDINANCE IMPOSING MUNICIPAL LICENSE TAX ON PERSONS ENGAGED IN THE BUSINESS OF OPERATING TENEMENT
HOUSES

Be it ordained by the Municipal Board of the City of Iloilo, pursuant to the provisions of Republic Act No. 2264, otherwise
known as the Autonomy Law of Local Government, that:

Section 1. — A municipal license tax is hereby imposed on tenement houses in accordance with the schedule of payment
herein provided.

Section 2. — Tenement house as contemplated in this ordinance shall mean any building or dwelling for renting space
divided into separate apartments or accessorias.

Section 3. — The municipal license tax provided in Section 1 hereof shall be as follows:
 I. Tenement houses:

(a) Apartment house made of strong materials P20.00 per door p.a.

(b) Apartment house made of mixed materials P10.00 per door p.a.

II Rooming house of strong materials P10.00 per door p.a.

Rooming house of mixed materials P5.00 per door p.a.

III. Tenement house partly or wholly engaged in or dedicated to business in

the following streets: J.M. Basa, Iznart, Aldeguer, Guanco and Ledesma
from Plazoleto Gay to Valeria. St. P30.00 per door p.a.

IV. Tenement house partly or wholly engaged in or dedicated to business in

any other street P12.00 per door p.a.

V. Tenement houses at the streets surrounding the super market as soon as

said place is declared commercial P24.00 per door p.a.

Section 4. — All ordinances or parts thereof inconsistent herewith are hereby amended.

Section 5. — Any person found violating this ordinance shall be punished with a fine note exceeding Two Hundred Pesos
(P200.00) or an imprisonment of not more than six (6) months or both at the discretion of the Court.

Section 6 — This ordinance shall take effect upon approval.

ENACTED, January 15, 1960.

In Iloilo City, the appellees Eusebio Villanueva and Remedios S. Villanueva are owners of five tenement houses, aggregately
containing 43 apartments, while the other appellees and the same Remedios S. Villanueva are owners of ten apartments. Each of
the appellees' apartments has a door leading to a street and is rented by either a Filipino or Chinese merchant. The first floor is
utilized as a store, while the second floor is used as a dwelling of the owner of the store. Eusebio Villanueva owns, likewise,
apartment buildings for rent in Bacolod, Dumaguete City, Baguio City and Quezon City, which cities, according to him, do not impose
tenement or apartment taxes.

By virtue of the ordinance in question, the appellant City collected from spouses Eusebio Villanueva and Remedios S. Villanueva, for
the years 1960-1964, the sum of P5,824.30, and from the appellees Pio Sian Melliza, Teresita S. Topacio, and Remedios S. Villanueva,
for the years 1960-1964, the sum of P1,317.00. Eusebio Villanueva has likewise been paying real estate taxes on his property.

On July 11, 1962 and April 24, 1964, the plaintiffs-appellees filed a complaint, and an amended complaint, respectively, against the
City of Iloilo, in the aforementioned court, praying that Ordinance 11, series of 1960, be declared "invalid for being beyond the
powers of the Municipal Council of the City of Iloilo to enact, and unconstitutional for being violative of the rule as to uniformity of
taxation and for depriving said plaintiffs of the equal protection clause of the Constitution," and that the City be ordered to refund
the amounts collected from them under the said ordinance.

On March 30, 1966,1 the lower court rendered judgment declaring the ordinance illegal on the grounds that (a) "Republic Act 2264
does not empower cities to impose apartment taxes," (b) the same is "oppressive and unreasonable," for the reason that it penalizes
owners of tenement houses who fail to pay the tax, (c) it constitutes not only double taxation, but treble at that and (d) it violates
the rule of uniformity of taxation.

The issues posed in this appeal are:

1. Is Ordinance 11, series of 1960, of the City of Iloilo, illegal because it imposes double taxation?

2. Is the City of Iloilo empowered by the Local Autonomy Act to impose tenement taxes?

3. Is Ordinance 11, series of 1960, oppressive and unreasonable because it carries a penal clause?
 4. Does Ordinance 11, series of 1960, violate the rule of uniformity of taxation?

1. The pertinent provisions of the Local Autonomy Act are hereunder quoted:

SEC. 2. Any provision of law to the contrary notwithstanding, all chartered cities, municipalities and municipal districts shall
have authority to impose municipal license taxes or fees upon persons engaged in any occupation or business, or exercising
privileges in chartered cities, municipalities or municipal districts by requiring them to secure licences at rates fixed by the
municipal board or city council of the city, the municipal council of the municipality, or the municipal district council of the
municipal district; to collect fees and charges for services rendered by the city, municipality or municipal district; to regulate
and impose reasonable fees for services rendered in connection with any business, profession or occupation being
conducted within the city, municipality or municipal district and otherwise to levy for public purposes, just and uniform
taxes, licenses or fees; Provided, That municipalities and municipal districts shall, in no case, impose any percentage tax on
sales or other taxes in any form based thereon nor impose taxes on articles subject to specific tax, except gasoline, under
the provisions of the National Internal Revenue Code; Provided, however, That no city, municipality or municipal district
may levy or impose any of the following:

(a) Residence tax;

(b) Documentary stamp tax;

(c) Taxes on the business of persons engaged in the printing and publication of any newspaper, magazine, review or bulletin
appearing at regular intervals and having fixed prices for for subscription and sale, and which is not published primarily for
the purpose of publishing advertisements;

(d) Taxes on persons operating waterworks, irrigation and other public utilities except electric light, heat and power;

(e) Taxes on forest products and forest concessions;

(f) Taxes on estates, inheritance, gifts, legacies, and other acquisitions mortis causa;

(g) Taxes on income of any kind whatsoever;

(h) Taxes or fees for the registration of motor vehicles and for the issuance of all kinds of licenses or permits for the driving
thereof;

(i) Customs duties registration, wharfage dues on wharves owned by the national government, tonnage, and all other kinds
of customs fees, charges and duties;

(j) Taxes of any kind on banks, insurance companies, and persons paying franchise tax; and

(k) Taxes on premiums paid by owners of property who obtain insurance directly with foreign insurance companies.

A tax ordinance shall go into effect on the fifteenth day after its passage, unless the ordinance shall provide
otherwise: Provided, however, That the Secretary of Finance shall have authority to suspend the effectivity of any ordinance
within one hundred and twenty days after its passage, if, in his opinion, the tax or fee therein levied or imposed is unjust,
excessive, oppressive, or confiscatory, and when the said Secretary exercises this authority the effectivity of such ordinance
shall be suspended.

In such event, the municipal board or city council in the case of cities and the municipal council or municipal district council
in the case of municipalities or municipal districts may appeal the decision of the Secretary of Finance to the court during
the pendency of which case the tax levied shall be considered as paid under protest.

It is now settled that the aforequoted provisions of Republic Act 2264 confer on local governments broad taxing authority which
extends to almost "everything, excepting those which are mentioned therein," provided that the tax so levied is "for public
purposes, just and uniform," and does not transgress any constitutional provision or is not repugnant to a controlling statute.2 Thus,
when a tax, levied under the authority of a city or municipal ordinance, is not within the exceptions and limitations aforementioned,
the same comes within the ambit of the general rule, pursuant to the rules of expressio unius est exclusio alterius, and exceptio
firmat regulum in casibus non excepti.

Does the tax imposed by the ordinance in question fall within any of the exceptions provided for in section 2 of the Local Autonomy
Act? For this purpose, it is necessary to determine the true nature of the tax. The appellees strongly maintain that it is a "property
tax" or "real estate tax,"3 and not a "tax on persons engaged in any occupation or business or exercising privileges," or a license tax,
or a privilege tax, or an excise tax.4 Indeed, the title of the ordinance designates it as a "municipal license tax on persons engaged in
the business of operating tenement houses," while section 1 thereof states that a "municipal license tax is hereby imposed on
tenement houses." It is the phraseology of section 1 on which the appellees base their contention that the tax involved is a real
estate tax which, according to them, makes the ordinance ultra vires as it imposes a levy "in excess of the one per centum real estate
tax allowable under Sec. 38 of the Iloilo City Charter, Com. Act 158." 5.

It is our view, contrary to the appellees' contention, that the tax in question is not a real estate tax. Obviously, the appellees confuse
the tax with the real estate tax within the meaning of the Assessment Law, 6 which, although not applicable to the City of Iloilo, has
counterpart provisions in the Iloilo City Charter.7 A real estate tax is a direct tax on the ownership of lands and buildings or other
improvements thereon, not specially exempted,8 and is payable regardless of whether the property is used or not, although the
value may vary in accordance with such factor.9 The tax is usually single or indivisible, although the land and building or
improvements erected thereon are assessed separately, except when the land and building or improvements belong to separate
owners.10 It is a fixed proportion11 of the assessed value of the property taxed, and requires, therefore, the intervention of
assessors.12 It is collected or payable at appointed times,13 and it constitutes a superior lien on and is enforceable against the
property14 subject to such taxation, and not by imprisonment of the owner.

The tax imposed by the ordinance in question does not possess the aforestated attributes. It is not a tax on the land on which the
tenement houses are erected, although both land and tenement houses may belong to the same owner. The tax is not a fixed
proportion of the assessed value of the tenement houses, and does not require the intervention of assessors or appraisers. It is not
payable at a designated time or date, and is not enforceable against the tenement houses either by sale or distraint. Clearly,
therefore, the tax in question is not a real estate tax.

"The spirit, rather than the letter, or an ordinance determines the construction thereof, and the court looks less to its words and
more to the context, subject-matter, consequence and effect. Accordingly, what is within the spirit is within the ordinance although
it is not within the letter thereof, while that which is in the letter, although not within the spirit, is not within the ordinance."15 It is
within neither the letter nor the spirit of the ordinance that an additional real estate tax is being imposed, otherwise the subject-
matter would have been not merely tenement houses. On the contrary, it is plain from the context of the ordinance that the
intention is to impose a license tax on the operation of tenement houses, which is a form of business or calling. The ordinance, in
both its title and body, particularly sections 1 and 3 thereof, designates the tax imposed as a "municipal license tax" which, by itself,
means an "imposition or exaction on the right to use or dispose of property, to pursue a business, occupation, or calling, or to
exercise a privilege."16.

"The character of a tax is not to be fixed by any isolated words that may beemployed in the statute creating it, but such
words must be taken in the connection in which they are used and the true character is to be deduced from the nature and
essence of the subject."17 The subject-matter of the ordinance is tenement houses whose nature and essence are expressly
set forth in section 2 which defines a tenement house as "any building or dwelling for renting space divided into separate
apartments or accessorias." The Supreme Court, in City of Iloilo vs. Remedios Sian Villanueva, et al., L-12695, March 23,
1959, adopted the definition of a tenement house18 as "any house or building, or portion thereof, which is rented, leased,
or hired out to be occupied, or is occupied, as the home or residence of three families or more living independently of each
other and doing their cooking in the premises or by more than two families upon any floor, so living and cooking, but having
a common right in the halls, stairways, yards, water-closets, or privies, or some of them." Tenement houses, being
necessarily offered for rent or lease by their very nature and essence, therefore constitute a distinct form of business or
calling, similar to the hotel or motel business, or the operation of lodging houses or boarding houses. This is precisely one of
the reasons why this Court, in the said case of City of Iloilo vs. Remedios Sian Villanueva, et al., supra, declared Ordinance
86 ultra vires, because, although the municipal board of Iloilo City is empowered, under sec. 21, par. j of its Charter, "to tax,
fix the license fee for, and regulate hotels, restaurants, refreshment parlors, cafes, lodging houses, boarding houses, livery
garages, public warehouses, pawnshops, theaters, cinematographs," tenement houses, which constitute a different
business enterprise,19 are not mentioned in the aforestated section of the City Charter of Iloilo. Thus, in the aforesaid case,
this Court explicitly said:.
 "And it not appearing that the power to tax owners of tenement houses is one among those clearly and expressly granted to
the City of Iloilo by its Charter, the exercise of such power cannot be assumed and hence the ordinance in question is ultra
vires insofar as it taxes a tenement house such as those belonging to defendants." .

The lower court has interchangeably denominated the tax in question as a tenement tax or an apartment tax. Called by either name,
it is not among the exceptions listed in section 2 of the Local Autonomy Act. On the other hand, the imposition by the ordinance of a
license tax on persons engaged in the business of operating tenement houses finds authority in section 2 of the Local Autonomy Act
which provides that chartered cities have the authority to impose municipal license taxes or fees upon persons engaged in any
occupation or business, or exercising privileges within their respective territories, and "otherwise to levy for public purposes, just
and uniform taxes, licenses, or fees." .

2. The trial court condemned the ordinance as constituting "not only double taxation but treble at that," because "buildings pay real
estate taxes and also income taxes as provided for in Sec. 182 (A) (3) (s) of the National Internal Revenue Code, besides the
tenement tax under the said ordinance." Obviously, what the trial court refers to as "income taxes" are the fixed taxes on business
and occupation provided for in section 182, Title V, of the National Internal Revenue Code, by virtue of which persons engaged in
"leasing or renting property, whether on their account as principals or as owners of rental property or properties," are considered
"real estate dealers" and are taxed according to the amount of their annual income. 20.

While it is true that the plaintiffs-appellees are taxable under the aforesaid provisions of the National Internal Revenue Code as real
estate dealers, and still taxable under the ordinance in question, the argument against double taxation may not be invoked. The
same tax may be imposed by the national government as well as by the local government. There is nothing inherently obnoxious in
the exaction of license fees or taxes with respect to the same occupation, calling or activity by both the State and a political
subdivision thereof.21.

The contention that the plaintiffs-appellees are doubly taxed because they are paying the real estate taxes and the tenement tax
imposed by the ordinance in question, is also devoid of merit. It is a well-settled rule that a license tax may be levied upon a business
or occupation although the land or property used in connection therewith is subject to property tax. The State may collect an ad
valorem tax on property used in a calling, and at the same time impose a license tax on that calling, the imposition of the latter kind
of tax being in no sensea double tax.22.

"In order to constitute double taxation in the objectionable or prohibited sense the same property must be taxed twice
when it should be taxed but once; both taxes must be imposed on the same property or subject-matter, for the same
purpose, by the same State, Government, or taxing authority, within the same jurisdiction or taxing district, during the
same taxing period, and they must be the same kind or character of tax." 23 It has been shown that a real estate tax and the
tenement tax imposed by the ordinance, although imposed by the sametaxing authority, are not of the same kind or
character.

At all events, there is no constitutional prohibition against double taxation in the Philippines. 24 It is something not favored, but is
permissible, provided some other constitutional requirement is not thereby violated, such as the requirement that taxes must be
uniform."25.

3. The appellant City takes exception to the conclusion of the lower court that the ordinance is not only oppressive because it
"carries a penal clause of a fine of P200.00 or imprisonment of 6 months or both, if the owner or owners of the tenement buildings
divided into apartments do not pay the tenement or apartment tax fixed in said ordinance," but also unconstitutional as it subjects
the owners of tenement houses to criminal prosecution for non-payment of an obligation which is purely sum of money." The lower
court apparently had in mind, when it made the above ruling, the provision of the Constitution that "no person shall be imprisoned
for a debt or non-payment of a poll tax."26 It is elementary, however, that "a tax is not a debt in the sense of an obligation incurred
by contract, express or implied, and therefore is not within the meaning of constitutional or statutory provisions abolishing or
prohibiting imprisonment for debt, and a statute or ordinance which punishes the non-payment thereof by fine or imprisonment is
not, in conflict with that prohibition."27 Nor is the tax in question a poll tax, for the latter is a tax of a fixed amount upon all persons,
or upon all persons of a certain class, resident within a specified territory, without regard to their property or the occupations in
which they may be engaged.28 Therefore, the tax in question is not oppressive in the manner the lower court puts it. On the other
hand, the charter of Iloilo City29 empowers its municipal board to "fix penalties for violations of ordinances, which shall not exceed a
fine of two hundred pesos or six months' imprisonment, or both such fine and imprisonment for each offense." In Punsalan, et al. vs.
Mun. Board of Manila, supra, this Court overruled the pronouncement of the lower court declaring illegal and void an ordinance
imposing an occupation tax on persons exercising various professions in the City of Manilabecause it imposed a penalty of fine and
imprisonment for its violation.30.
4. The trial court brands the ordinance as violative of the rule of uniformity of taxation.

"... because while the owners of the other buildings only pay real estate tax and income taxes the ordinance imposes aside
from these two taxes an apartment or tenement tax. It should be noted that in the assessment of real estate tax all parts of
the building or buildings are included so that the corresponding real estate tax could be properly imposed. If aside from the
real estate tax the owner or owners of the tenement buildings should pay apartment taxes as required in the ordinance
then it will violate the rule of uniformity of taxation.".

Complementing the above ruling of the lower court, the appellees argue that there is "lack of uniformity" and "relative inequality,"
because "only the taxpayers of the City of Iloilo are singled out to pay taxes on their tenement houses, while citizens of other cities,
where their councils do not enact a similar tax ordinance, are permitted to escape such imposition." .

It is our view that both assertions are undeserving of extended attention. This Court has already ruled that tenement houses
constitute a distinct class of property. It has likewise ruled that "taxes are uniform and equal when imposed upon all property of the
same class or character within the taxing authority."31 The fact, therefore, that the owners of other classes of buildings in the City of
Iloilo do not pay the taxes imposed by the ordinance in question is no argument at all against uniformity and equality of the tax
imposition. Neither is the rule of equality and uniformity violated by the fact that tenement taxesare not imposed in other cities, for
the same rule does not require that taxes for the same purpose should be imposed in different territorial subdivisions at the same
time.32 So long as the burden of the tax falls equally and impartially on all owners or operators of tenement houses similarly
classified or situated, equality and uniformity of taxation is accomplished. 33 The plaintiffs-appellees, as owners of tenement houses
in the City of Iloilo, have not shown that the tax burden is not equally or uniformly distributed among them, to overthrow the
presumption that tax statutes are intended to operate uniformly and equally. 34.

5. The last important issue posed by the appellees is that since the ordinance in the case at bar is a mere reproduction of Ordinance
86 of the City of Iloilo which was declared by this Court in L-12695, supra, as ultra vires, the decision in that case should be accorded
the effect of res judicata in the present case or should constitute estoppel by judgment. To dispose of this contention, it suffices to
say that there is no identity of subject-matter in that case andthis case because the subject-matter in L-12695 was an ordinance
which dealt not only with tenement houses but also warehouses, and the said ordinance was enacted pursuant to the provisions of
the City charter, while the ordinance in the case at bar was enacted pursuant to the provisions of the Local Autonomy Act. There is
likewise no identity of cause of action in the two cases because the main issue in L-12695 was whether the City of Iloilo had the
power under its charter to impose the tax levied by Ordinance 11, series of 1960, under the Local Autonomy Act which took effect
on June 19, 1959, and therefore was not available for consideration in the decision in L-12695 which was promulgated on March 23,
1959. Moreover, under the provisions of section 2 of the Local Autonomy Act, local governments may now tax any taxable subject-
matter or object not included in the enumeration of matters removed from the taxing power of local governments.Prior to the
enactment of the Local Autonomy Act the taxes that could be legally levied by local governments were only those specifically
authorized by law, and their power to tax was construed in strictissimi juris. 35.

ACCORDINGLY, the judgment a quo is reversed, and, the ordinance in questionbeing valid, the complaint is hereby dismissed. No
pronouncement as to costs..

G.R. No. 180651 July 30, 2014

NURSERY CARE CORPORATION; SHOEMART, INC.; STAR APPLIANCE CENTER, INC.; H&B, INC.; SUPPLIES STATION, INC.; and
HARDWARE WORKSHOP, INC., Petitioners,
vs.
ANTHONY ACEVEDO, in his capacity as THE TREASURER OF MANILA; and THE CITY OF MANILA, Respondents.

DECISION

BERSAMIN, J.:

The issue here concerns double taxation. There is double taxation when the same taxpayer is taxed twice when he should be taxed
only once for the same purpose by the same taxing authority within the same jurisdiction during the same taxing period, and the
taxes are of the same kind or character. Double taxation is obnoxious.

The Case
Under review are the resolution promulgated in CA-G.R. SP No. 72191 on June 18, 2007,1 whereby the Court of Appeals (CA) denied
petitioners' appeal for lack of jurisdiction; and the resolution promulgated on November 14, 2007, 2 whereby the CA denied their
motion for reconsideration for its lack of merit.

Antecedents

The City of Manila assessed and collected taxes from the individual petitioners pursuant to Section 15 (Tax on Wholesalers,
Distributors, or Dealers) and Section 17 (Tax on Retailers) of the Revenue Code of Manila. 3 At the same time, the City of Manila
imposed additional taxes upon the petitioners pursuant to Section 21 ofthe Revenue Code of Manila,4 as amended, as a condition
for the renewal of their respective business licenses for the year 1999. Section 21 of the Revenue Code of Manila stated:

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 referred to as NIRC, as amended, a tax of FIFTY PERCENT (50%) OF ONE PERCENT (1%) per annum on the gross
sales or receipts of the preceding calendar year is hereby imposed:

A) On person who sells goods and services in the course of trade or businesses; x x x PROVIDED, that all registered businesses in the
City of Manila already paying the aforementioned tax shall be exempted from payment thereof.

To comply with the City of Manila’s assessmentof taxes under Section 21, supra, the petitioners paid under protest the following
amounts corresponding to the first quarter of 1999, 5 to wit:

(a) Nursery Care Corporation ₱595,190.25

(b) Shoemart Incorporated ₱3,283,520.14

(c) Star Appliance Center ₱236,084.03

(d) H & B, Inc. ₱1,271,118.74

(e) Supplies Station, Inc. ₱239,501.25

(f) Hardware Work Shop, Inc. ₱609,953.24

By letter dated March 1, 1999, the petitioners formally requested the Office of the City Treasurer for the tax credit or refund of the
local business taxes paid under protest.6 However, then City Treasurer Anthony Acevedo (Acevedo) denied the request through his
letter of March 10, 1999.7

On April 8, 1999, the petitioners, through their representative, Cecilia R. Patricio, sought the reconsideration of the denial of their
request.8 Still, the City Treasurer did not reconsider.9 In the meanwhile, Liberty Toledo succeeded Acevedo as the City Treasurer of
Manila.10

On April 29, 1999, the petitioners filed their respective petitions for certiorariin the Regional Trial Court (RTC) in Manila. The
petitions, docketed as Civil Cases Nos. 99-93668 to 99-93673,11 were initially raffled to different branches, but were soon
consolidated in Branch 34.12 After the presiding judge of Branch 34 voluntarily inhibited himself, the consolidated cases were
transferred to Branch 23,13 but were again re-raffled to Branch 19 upon the designation of Branch 23 as a special drugs court. 14

The parties agreed on and jointly submitted the following issues for the consideration and resolution of the RTC, namely:

(a) Whether or not the collection of taxes under Section 21 of Ordinance No. 7794, as amended, constitutes double
taxation.

(b) Whether or not the failure of the petitioners to avail of the statutorily provided remedy for their tax protest on the
ground of unconstitutionality, illegality and oppressiveness under Section 187 of the Local Government Code renders the
present action dismissible for non-exhaustion of administrative remedy.15
 Decision of the RTC

On April 26, 2002, the RTC rendered its decision, holding thusly:

The Court perceives of no instance of the constitutionally proscribed double taxation, in the strict, narrow or obnoxious sense,
imposed upon the petitioners under Section 15 and 17, on the one hand, and under Section 21, on the other, of the questioned
Ordinance. The tax imposed under Section 15 and 17, as against that imposed under Section 21, are levied against different tax
objects or subject matter. The tax under Section 15 is imposed upon wholesalers, distributors or dealers, while that under Section 17
is imposedupon retailers. In short, taxes imposed under Section 15 and 17 is a tax on the business of wholesalers, distributors,
dealers and retailers. On the other hand, the tax imposed upon herein petitioners under Section 21 is not a tax against the business
of the petitioners (as wholesalers, distributors, dealers or retailers)but is rather a tax against consumers or end-users of the articles
sold by petitioners. This is plain from a reading of the modifying paragraph of Section 21 which says:

"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." (Underscoring supplied)

In effect, the petitioners only act as the collection or withholding agent of the City while the ones actually paying the tax are the
consumers or end-users of the articles being sold by petitioners. The taxes imposed under Sec. 21 represent additional amounts
added by the business establishment to the basic prices of its goods and services which are paid by the end-users to the businesses.
It is actually not taxes on the business of petitioners but on the consumers. Hence, there is no double taxation in the narrow, strict
or obnoxious sense,involved in the imposition of taxes by the City of Manila under Sections 15, 17 and 21 of the questioned
Ordinance. This in effect resolves infavor of the constitutionality of the assailed sections of Ordinance No. 7807 of the City of Manila.

Petitioners, likewise, pray the Court to direct respondents to cease and desist from implementing Section 21 of the questioned
Ordinance. That the Court cannot do, without doing away with the mandatory provisions of Section 187 of the Local Government
Code which distinctly commands that an appeal questioning the constitutionality or legality of a tax ordinance shall not have the
effectof suspending the effectivity of the ordinance and the accrual and payment of the tax, fee or charge levied therein. This is so
because an ordinance carries with it the presumption of validity.

xxx

With the foregoing findings, petitioners’ prayer for the refund of the amounts paid by them under protest must, likewise, fail.

Wherefore, the petitions are dismissed. Without pronouncement as to costs.

SO ORDERED.16

The petitioners appealed to the CA.17

Ruling of the CA

On June 18, 2007, the CA deniedthe petitioners’ appeal, ruling as follows:

The six (6) cases were consolidated on a common question of fact and law, that is, whether the act ofthe City Treasurer of Manila of
assessing and collecting business taxes under Section 21of Ordinance 7807, on top of other business taxes alsoassessed and
collected under the previous sections of the same ordinance is a violation of the provisions of Section 143 of the Local Government
Code.

Clearly, the disposition of the present appeal in these consolidated cases does not necessitate the calibration of the whole evidence
as there is no question or doubt as to the truth or the falsehood of the facts obtaining herein, as both parties agree thereon. The
present case involves a question of law that would not lend itself to an examination or evaluation by this Court of the probative
value of the evidence presented.

Thus the Court is constrained todismiss the instant petition for lack of jurisdiction under Section 2,Rule 50 of the 1997 Rules on Civil
Procedure which states:
"Sec. 2. Dismissal of improper appeal to the Court of Appeals. – An appeal under Rule 41 taken from the Regional Trial Court to the
Court of Appeals raising only questions of law shall be dismissed, issues purely of law not being reviewable by said court. similarly,
an appeal by notice of appeal instead of by petition for review from the appellate judgment of a Regional Trial Court shall be
dismissed.

An appeal erroneously taken tothe Court of Appeals shall not be transferred to the appropriate court but shall be dismissed outright.

WHEREFORE, the foregoing considered, the appeal is DISMISSED.

SO ORDERED.18

The petitioners moved for reconsideration, but the CA denied their motion through the resolution promulgated on November 14,
2007.19

Issues

The petitioners now appeal, raising the following grounds, to wit:

A.

THE COURT OF APPEALS, IN DISMISSING THE APPEAL OF THE PETITIONERS AND DENYING THEIR MOTION FOR RECONSIDERATION,
ERRED INRULING THAT THE ISSUE INVOLVED IS A PURELY LEGAL QUESTION.

B.

THE COURT OF APPEALS ERRED IN NOT REVERSING THE DECISION OF BRANCH 19 OF THE REGIONAL TRIAL COURT OF MANILA
DATED 26 APRIL 2002 DENYING PETITIONERS’ PRAYER FOR REFUND OF THE AMOUNTS PAID BY THEM UNDER PROTEST AND
DISMISSING THE PETITION FOR CERTIORARI FILED BY THE PETITIONERS.

C.

THE COURT OF APPEALS ERRED IN NOT RULING THAT THE ACT OF THE CITY TREASURER OF MANILA IN IMPOSING, ASSESSING AND
COLLECTING THE ADDITIONAL BUSINESS TAX UNDER SECTION 21 OFORDINANCE NO. 7794, AS AMENDED BY ORDINANCE NO. 7807,
ALSO KNOWN AS THE REVENUE CODE OF THE CITY OFMANILA, IS CONSTITUTIVE OF DOUBLE TAXATION AND VIOLATIVE OF THE
LOCAL GOVERNMENT CODE OF 1991.20

The main issues for resolution are, therefore, (1) whether or not the CA properly denied due course to the appeal for raising pure
questions of law; and (2) whether or not the petitioners were entitled to the tax credit or tax refund for the taxes paid under Section
21, supra.

Ruling

The appeal is meritorious.

1.

The CA did not err in dismissing the appeal;

but the rules should be liberally applied
for the sake of justice and equity

The Rules of Courtprovides three modes of appeal from the decisions and final orders of the RTC, namely: (1) ordinary appeal or
appeal by writ of error under Rule 41, where the decisionsand final orders were rendered in civil or criminal actions by the RTC in the
exercise of original jurisdiction; (2) petition for review under Rule 42, where the decisions and final orders were rendered by the RTC
in the exerciseof appellate jurisdiction; and (3) petition for review on certiorarito the Supreme Court under Rule 45. 21 The first mode
of appeal is taken to the CA on questions of fact, or mixed questions of fact and law. The second mode of appeal is brought to the CA
on questions of fact, of law, or mixed questions of fact and law.22 The third mode of appeal is elevated to the Supreme Court only on
questions of law.23

The distinction between a question oflaw and a question of fact is well established. On the one hand, a question of law ariseswhen
there is doubt as to what the law is on a certain state of facts; on the other, there is a question of fact when the doubt arises asto
the truth or falsity of the alleged facts. 24 According to Leoncio v. De Vera:25

x x x For a question to beone of law, the same must not involve an examination of the probative value ofthe evidence presented by
the litigants or any of them. The resolution of the issue must restsolely on what the law provides on the given set of circumstances.
Once it is clear that the issue invites a review of the evidence presented, the question posed is one of fact. Thus, the test of whether
a question isone of law or offact is not the appellation given to such question by the party raising the same; rather, it is whether the
appellate court can determine the issue raised without reviewing or evaluating the evidence, in which case, it is a question oflaw;
otherwise it is a question of fact.26

The nature of the issues to be raised on appeal can be gleaned from the appellant’s notice of appeal filed in the trial court, and from
the appellant’s brief submitted to the appellate court.27 In this case, the petitioners filed a notice of appeal in which they contended
that the April 26, 2002 decision and the order of July 17, 2002 issued by the RTC denying their consolidated motion for
reconsideration were contrary to the facts and law obtaining in the consolidated cases. 28 In their consolidated memorandum filed in
the CA, they essentially assailed the RTC’s ruling that the taxes imposed on and collected from the petitioners under Section 21 of
the Revenue Code of Manila constituted double taxation in the strict, narrow or obnoxious sense. Considered together, therefore,
the notice of appeal and consolidated memorandum evidently did notraise issues that required the reevaluation of evidence or the
relevance of surrounding circumstances.

The CA rightly concluded that the petitioners thereby raised only a question of law. The dismissal of their appeal was proper, strictly
speaking, because Section 2, Rule 50 of the Rules of Court provides that an appeal from the RTC to the CA raising only questions of
law shall be dismissed;

and that an appeal erroneously taken to the CA shall be outrightly dismissed. 29

2.

Collection of taxes pursuant to Section 21 of the

Revenue Code of Manila constituted double taxation

The foregoing notwithstanding, the Court, given the circumstances obtaining herein and in light of jurisprudence promulgated
subsequent to the filing of the petition, deems it fitting and proper to adopt a liberal approach in order to render a justand speedy
disposition of the substantive issue at hand. Hence, we resolve, bearing inmind the following pronouncement in Go v. Chaves: 30

Our rules of procedure are designed to facilitate the orderly disposition of cases and permit the prompt disposition of unmeritorious
cases which clog the court dockets and do little more than waste the courts’ time. These technical and procedural rules, however,
are intended to ensure, rather than suppress, substantial justice. A deviation from their rigid enforcement may thus be allowed, as
petitioners should be given the fullest opportunity to establish the merits of their case, rather than lose their property on mere
technicalities. We held in Ong Lim Sing, Jr. v. FEB Leasing and Finance Corporation that:

Courts have the prerogative to relax procedural rules of even the most mandatory character, mindful of the duty to reconcile both
the need to speedily put an end to litigation and the parties' right to due process.In numerous cases, this Court has allowed liberal
construction of the rules when to do so would serve the demands of substantial justice and equity.

The petitioners point out that although Section 21 of the Revenue Code of Manila was not itself unconstitutional or invalid, its
enforcement against the petitioners constituted double taxation because the local business taxes under Section 15 and Section 17 of
the Revenue Code of Manila were already being paid by them. 31 They contend that the proviso in Section 21 exempted all registered
businesses in the City of Manila from paying the tax imposed under Section 21; 32 and that the exemption was more in accord with
Section 143 of the Local Government Code,33 the law that vested in the municipal and city governments the power to impose
business taxes.

The respondents counter, however, that double taxation did not occur from the imposition and collection of the tax pursuant to
Section 21 of the Revenue Code of Manila;34 that the taxes imposed pursuant to Section 21 were in the concept of indirect taxes
upon the consumers of the goods and services sold by a business establishment;35 and that the petitioners did not exhaust their
administrative remedies by first appealing to the Secretary of Justice to challenge the constitutionalityor legality of the tax
ordinance.36

In resolving the issue of double taxation involving Section 21 of the Revenue Code of Manila, the Court is mindful of the ruling in City
of Manila v. Coca-Cola Bottlers Philippines, Inc.,37 which has been reiterated in Swedish Match Philippines, Inc. v. The Treasurer of
the City of Manila.38 In the latter, the Court has held:

x x x [T]he issue of double taxation is not novel, as it has already been settled by this Court in The City of Manila v. Coca-Cola Bottlers
Philippines, Inc.,in this wise:

Petitioners obstinately ignore the exempting proviso in Section 21 of Tax Ordinance No. 7794, to their own detriment.1âwphi1 Said
exempting proviso was precisely included in said section so as to avoid double taxation.

Double taxation means taxingthe same property twice when it should be taxed only once; that is, "taxing the same person twice by
the same jurisdictionfor the same thing." It is obnoxious when the taxpayer is taxed twice, when it should be but once. Otherwise
described as "direct duplicate taxation," the two taxes must be imposed on the same subject matter, for the same purpose, by the
same taxing authority, within the same jurisdiction, during the same taxing period; and the taxes must be of the same kind or
character.

Using the aforementioned test, the Court finds that there is indeed double taxation if respondent is subjected to the taxes under
both Sections 14 and 21 of Tax Ordinance No. 7794, since these are being imposed: (1) on the same subject matter – the privilege of
doing business in the City of Manila; (2) for the same purpose – to make persons conducting business within the City of Manila
contribute tocity revenues; (3) by the same taxing authority – petitioner Cityof Manila; (4) within the same taxing jurisdiction –
within the territorial jurisdiction of the City of Manila; (5) for the same taxing periods – per calendar year; and (6) of the same kind
or character – a local business tax imposed on gross sales or receipts of the business.

The distinction petitioners attempt to make between the taxes under Sections 14 and 21 of Tax Ordinance No. 7794 is specious. The
Court revisits Section 143 of the LGC, the very source of the power of municipalities and cities to impose a local business tax, and to
which any local business tax imposed by petitioner City of Manila must conform. It is apparent from a perusal thereof that when a
municipality or city has already imposed a business tax on manufacturers, etc.of liquors, distilled spirits, wines, and any other article
of commerce, pursuant to Section 143(a) of the LGC, said municipality or city may no longer subject the same manufacturers, etc.to
a business tax under Section 143(h) of the same Code. Section 143(h) may be imposed only on businesses that are subject to excise
tax, VAT, or percentagetax under the NIRC, and that are "not otherwise specified in preceding paragraphs." In the same way,
businesses such as respondent’s, already subject to a local business tax under Section 14 of Tax Ordinance No. 7794 [which is based
on Section 143(a) of the LGC], can no longer be made liable for local business tax under Section 21 of the same Tax Ordinance [which
is based on Section 143(h) of the LGC].

Based on the foregoing reasons, petitioner should not have been subjected to taxes under Section 21 of the ManilaRevenue Code
for the fourth quarter of 2001, considering thatit had already been paying local business tax under Section 14 of the same ordinance.

xxxx

Accordingly, respondent’s assessment under both Sections 14 and 21 had no basis. Petitioner is indeed liable to pay business taxes
to the City of Manila; nevertheless, considering that the former has already paid these taxes under Section 14 of the Manila Revenue
Code, it is exempt from the same payments under Section 21 of the same code. Hence, payments made under Section 21 must be
refunded in favor of petitioner.

It is undisputed thatpetitioner paid business taxes based on Sections 14 and 21 for the fourth quarter of 2001 in the total amount of
₱470,932.21. Therefore, it is entitled to a refund of ₱164,552.04 corresponding to the payment under Section 21 of the Manila
Revenue Code.

On the basis of the rulings in Coca-Cola Bottlers Philippines, Inc. and Swedish Match Philippines, Inc., the Court now holds that all
the elements of double taxation concurred upon the Cityof Manila’s assessment on and collection from the petitioners of taxes for
the first quarter of 1999 pursuant to Section 21 of the Revenue Code of Manila.
Firstly, because Section 21 of the Revenue Code of Manila imposed the tax on a person who sold goods and services in the course of
trade or business based on a certain percentage ofhis gross sales or receipts in the preceding calendar year, while Section 15 and
Section 17 likewise imposed the tax on a person who sold goods and services in the course of trade or business but only identified
such person with particularity, namely, the wholesaler, distributor or dealer (Section 15), and the retailer (Section 17), all the taxes –
being imposed on the privilege of doing business in the City of Manila in order to make the taxpayers contributeto the city’s
revenues – were imposed on the same subject matter and for the same purpose.

Secondly, the taxes were imposed by the same taxing authority (the City of Manila) and within the same jurisdiction in the same
taxing period (i.e., per calendar year).

Thirdly, the taxes were all in the nature of local business taxes.

We note that although Coca-Cola Bottlers Philippines, Inc. and Swedish Match Philippines, Inc. involved Section 21 vis-à-vis Section
14 (Tax on Manufacturers, Assemblers and Other Processors)39 of the Revenue Code of Manila, the legal principlesenunciated
therein should similarly apply because Section 15 (Tax on Wholesalers, Distributors, or Dealers)and Section 17 (Tax on Retailers) of
the Revenue Code of Manila imposed the same nature of tax as that imposed under Section 14, i.e., local business tax, albeit on a
different subject matter or group of taxpayers.

In fine, the imposition of the tax under Section 21 of the Revenue Code of Manila constituted double taxation, and the taxes
collected pursuant thereto must be refunded.

WHEREFORE, the Court GRANTS the petition for review on certiorari; REVERSES and SETS ASIDE the resolutions promulgated on June
18, 2007 and November 14, 2007 in CA-G.R. SP No. 72191; and DIRECTS the City of Manila to refund the payments made by the
petitioners of the taxes assessed and collected for the first quarter of 1999 pursuant to Section 21 of the Revenue Code of Manila.

No pronouncement on costs of suit.

SO ORDERED.

G.R. No. 210551 June 30, 2015

JOSE J. FERRER, JR., Petitioner,

vs.
CITY MAYOR HERBERT BAUTISTA, CITY COUNCIL OF QUEZON CITY, CITY TREASURER OF QUEZON CITY, and CITY ASSESSOR OF
QUEZON CITY, Respondents.

DECISION

PERALTA, J.:

Before this Court is a petition for certiorari under Rule 65 of the Rules of Court with prayer for the issuance of a temporary
restraining order (TRO) seeking to declare unconstitutional and illegal Ordinance Nos. SP-2095, S-2011 and SP-2235, S-2013 on the
Socialized Housing Tax and Garbage Fee, respectively, which are being imposed by the respondents.

The Case

On October 17, 2011,1 respondent Quezon City Council enacted Ordinance No. SP-2095, S-2011,2 or the Socialized Housing Tax of
Quezon City, Section 3 of which provides:

SECTION 3. IMPOSITION. A special assessment equivalent to one-half percent (0.5%) on the assessed value of land in excess of One
Hundred Thousand Pesos (Php100,000.00) shall be collected by the City Treasurer which shall accrue to the Socialized Housing
Programs of the Quezon City Government. The special assessment shall accrue to the General Fund under a special account to be
established for the purpose.

Effective for five (5) years, the Socialized Housing Tax ( SHT ) shall be utilized by the Quezon City Government for the following
projects: (a) land purchase/land banking; (b) improvement of current/existing socialized housing facilities; (c) land development; (d)
construction of core houses, sanitary cores, medium-rise buildings and other similar structures; and (e) financing of public-private
partners hip agreement of the Quezon City Government and National Housing Authority ( NHA ) with the private sector.3

Under certain conditions, a tax credit shall be enjoyed by taxpayers regularly paying the special assessment:

SECTION 7. TAX CREDIT. Taxpayers dutifully paying the special assessment tax as imposed by this ordinance shall enjoy a tax credit.
The tax credit may be availed of only after five (5) years of continue[d] payment. Further, the taxpayer availing this tax credit must
be a taxpayer in good standing as certified by the City Treasurer and City Assessor.

The tax credit to be granted shall be equivalent to the total amount of the special assessment paid by the property owner, which
shall be given as follows:

1. 6th year - 20%

2. 7th year - 20%

3. 8th year - 20%

4. 9th year - 20%

5. 10th year - 20%

Furthermore, only the registered owners may avail of the tax credit and may not be continued by the subsequent property owners
even if they are buyers in good faith, heirs or possessor of a right in whatever legal capacity over the subject property.4

On the other hand, Ordinance No. SP-2235, S-20135 was enacted on December 16, 2013 and took effect ten days after when it was
approved by respondent City Mayor.6 The proceeds collected from the garbage fees on residential properties shall be deposited
solely and exclusively in an earmarked special account under the general fund to be utilized for garbage collections. 7 Section 1 of the
Ordinance se t forth the schedule and manner for the collection of garbage fees:

SECTION 1. The City Government of Quezon City in conformity with and in relation to Republic Act No. 7160, otherwise known as the
Local Government Code of 1991 HEREBY IMPOSES THE FOLLOWING SCHEDULE AND MANNER FOR THE ANNUAL COLLECTION OF
GARBAGE FEES, AS FOLLOWS: On all domestic households in Quezon City;

LAND AREA IMPOSABLE FEE

Less than 200 sq. m. PHP 100.00
201 sq. m. – 500 sq. m. PHP 200.00
501 sq. m. – 1,000 sq. m. PHP 300.00
1,001 sq. m. – 1,500 sq. m. PHP 400.00
1,501 sq. m. – 2,000 sq. m. or more PHP 500.00

On all condominium unit and socialized housing projects/units in Quezon City;

FLOOR AREA IMPOSABLE FEE

Less than 40 sq. m. PHP 25.00
41 sq. m. – 60 sq. m. PHP 50.00
61 sq. m. – 100 sq. m. PHP 75.00
101 sq. m. – 150 sq. m. PHP 100.00
 151 sq. m. – 200 sq. [m.] or more PHP 200.00

On high-rise Condominium Units

a) High-rise Condominium – The Homeowners Association of high- rise condominiums shall pay the annual garbage fee on
the total size of the entire condominium and socialized Housing Unit and an additional garbage fee shall be collected based
on area occupied for every unit already so ld or being amortized.

b) High-rise apartment units – Owners of high-rise apartment units shall pay the annual garbage fee on the total lot size of
the entire apartment and an additional garbage fee based on the schedule prescribed herein for every unit occupied.

The collection of the garbage fee shall accrue on the first day of January and shall be paid simultaneously with the payment of the
real property tax, but not later than the first quarter installment. 8 In case a household owner refuses to pay, a penalty of 25% of the
garbage fee due, plus an interest of 2% per month or a fraction thereof, shall be charged. 9

Petitioner alleges that he is a registered co-owner of a 371-square-meter residential property in Quezon City which is covered by
Transfer Certificate of Title (TCT ) No. 216288, and that, on January 7, 2014, he paid his realty tax which already included the garbage
fee in the sum of

Php100.00.10

The instant petition was filed on January 17, 2014. We issued a TRO on February 5, 2014, which enjoined the enforcement of
Ordinance Nos. SP-2095 and SP-2235 and required respondents to comment on the petition without necessarily giving due course
thereto.11

Respondents filed their Comment12 with urgent motion to dissolve the TRO on February 17, 2014. Thereafter, petitioner filed a Reply
and a Memorandum on March 3, 2014 and September 8, 2014, respectively.

Procedural Matters

A. Propriety of a Petition for Certiorari

Respondents are of the view that this petition for certiorari is improper since they are not tribunals, boards or officers exercising
judicial or quasi-judicial functions. Petitioner, however, counters that in enacting Ordinance Nos. SP-2095 and SP-2235, the Quezon
City Council exercised quasi-judicial function because the ordinances ruled against the property owners who must pay the SHT and
the garbage fee, exacting from them funds for basic essential public services that they should not be held liable. Even if a Rule 65
petition is improper, petitioner still asserts that this Court, in a number of cases like in Rosario v. Court of Appeals, 13 has taken
cognizance of an improper remedy in the interest of justice.

We agree that respondents neither acted in any judicial or quasi-judicial capacity nor arrogated unto themselves any judicial or
quasi-judicial prerogatives.

A respondent is said to be exercising judicial function where he has the power to determine what the law is and what the legal rights
of the parties are, and then undertakes to determine these questions and adjudicate upon the rights of the parties.

Quasi-judicial function, on the other hand, is "a term which applies to the actions, discretion, etc., of public administrative officers or
bodies … required to investigate facts or ascertain the existence of facts, hold hearings, and draw conclusions from them as a basis
for their official action and to exercise discretion of a judicial nature."

Before a tribunal, board, or officer may exercise judicial or quasi-judicial acts, it is necessary that there be a law that gives rise to
some specific rights of person s or property under which adverse claims to such rights are made, and the controversy en suing
therefrom is brought before a tribunal, board, or officer clothed with power and authority to determine the law and adjudicate the
respective rights of the contending parties.14

For a writ of certiorari to issue, the following requisites must concur: (1) it must be directed against a tribunal, board, or officer
exercising judicial or quasi-judicial functions; (2) the tribunal, board, or officer must have acted without or in excess of jurisdiction or
with grave abuse of discretion amounting to lack or excess of jurisdiction; and (3) there is no appeal or any plain, speedy, and
adequate remedy in the ordinary course of law. The enactment by the Quezon City Council of the assailed ordinances was done in
the exercise of its legislative, not judicial or quasi-judicial, function. Under Republic Act (R.A.) No.7160, or the Local Government
Code of 1991 (LGC), local legislative power shall be exercised by the Sangguniang Panlungsod for the city. 15Said law likewise is
specific in providing that the power to impose a tax, fee, or charge , or to generate revenue shall be exercised by the sanggunian of
the local government unit concerned through an appropriate ordinance. 16

Also, although the instant petition is styled as a petition for certiorari, it essentially seeks to declare the unconstitutionality and
illegality of the questioned ordinances. It, thus, partakes of the nature of a petition for declaratory relief, over which this Court has
only appellate, not original, jurisdiction.17

Despite these, a petition for declaratory relief may be treated as one for prohibition or mandamus, over which we exercise original
jurisdiction, in cases with far-reaching implications or one which raises transcendental issues or questions that need to be resolved
for the public good.18The judicial policy is that this Court will entertain direct resort to it when the redress sought cannot be
obtained in the proper courts or when exceptional and compelling circumstances warrant availment of a remedy within and calling
for the exercise of Our primary jurisdiction.19

Section 2, Rule 65 of the Rules of Court lay down under what circumstances a petition for prohibition may be filed:

SEC. 2. Petition for prohibition. - When the proceedings of any tribunal, corporation, board, officer or person, whether exercising
judicial, quasi-judicial or ministerial functions, are without or in excess of its or his jurisdiction, or with grave abuse of discretion
amounting to lack or excess of jurisdiction, and there is no appeal or any other plain, speedy, and adequate remedy in the ordinary
course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and
praying that judgment be rendered commanding the respondent to desist from further proceeding in the action or matter specified
therein, or otherwise granting such incidental reliefs as law and justice may require.

In a petition for prohibition against any tribunal, corporation, board, or person – whether exercising judicial, quasi-judicial, or
ministerial functions – who has acted without or in excess of jurisdiction or with grave abuse of discretion, the petitioner prays that
judgment be rendered, commanding the respondents to desist from further proceeding in the action or matter specified in the
petition. In this case, petitioner's primary intention is to prevent respondents from implementing Ordinance Nos. SP-2095 and SP-
2235. Obviously, the writ being sought is in the nature of a prohibition, commanding desistance.

We consider that respondents City Mayor, City Treasurer, and City Assessor are performing ministerial functions. A ministerial
function is one that an officer or tribunal performs in the context of a given set of facts, in a prescribed manner and without regard
for the exercise of his or its own judgment, upon the propriety or impropriety of the act done.20 Respondent Mayor, as chief
executive of the city government, exercises such powers and performs such duties and functions as provided for by the LGC and
other laws.21 Particularly, he has the duty to ensure that all taxes and other revenues of the city are collected, and that city funds are
applied to the payment of expenses and settlement of obligations of the city, in accordance with law or ordinance. 22 On the other
hand, under the LGC, all local taxes, fees, and charges shall be collected by the provincial, city, municipal, or barangay treasurer, or
their duly-authorized deputies, while the assessor shall take charge, among others, of ensuring that all laws and policies governing
the appraisal and assessment of real properties for taxation purposes are properly executed. 23 Anent the SHT, the Department of
Finance (DOF) Local Finance Circular No. 1-97, dated April 16, 1997, is more specific:

6.3 The Assessor’s office of the Identified LGU shall:

a. immediately undertake an inventory of lands within its jurisdiction which shall be subject to the levy of
the Social Housing Tax (SHT) by the local sanggunian concerned;

b. inform the affected registered owners of the effectivity of the SHT; a list of the lands and registered
owners shall also be posted in 3 conspicuous places in the city/municipality;

c. furnish the Treasurer’s office and the local sanggunian concerned of the list of lands affected;

6.4 The Treasurer’s office shall:

a. collect the Social Housing Tax on top of the Real Property Tax, SEF Tax and other special assessments;
 b. report to the DOF, thru the Bureau of Local Government Finance, and the Mayor’s office the monthly
collections on Social Housing Tax (SHT). An annual report should likewise be submitted to the HUDCC on
the total revenues raised during the year pursuant to Sec. 43, R.A. 7279 and the manner in which the
same was disbursed.

Petitioner has adduced special and important reasons as to why direct recourse to us should be allowed. Aside from presenting a
novel question of law, this case calls for immediate resolution since the challenged ordinances adversely affect the property
interests of all paying constituents of Quezon City. As well, this petition serves as a test case for the guidance of other local
government units (LGUs).Indeed, the petition at bar is of transcendental importance warranting a relaxation of the doctrine of
hierarchy of courts. In Social Justice Society (SJS) Officers, et al. v. Lim , 24the Court cited the case of Senator Jaworski v. Phil.
Amusement & Gaming Corp.,25 where We ratiocinated:

Granting arguendo that the present action cannot be properly treated as a petition for prohibition, the transcendental importance
of the issues involved in this case warrants that we set aside the technical defects and take primary jurisdiction over the petition at
bar . x x x This is in accordance with the well entrenched principle that rules of procedure are not inflexible tools designed to hinder
or delay, but to facilitate and promote the administration of justice. Their strict and rigid application, which would result in
technicalities that tend to frustrate, rather than promote substantial justice, must always be eschewed.26

B. Locus Standi of Petitioner

Respondents challenge petitioner’s legal standing to file this case on the ground that, in relation to Section 3 of Ordinance No. SP-
2095, petitioner failed to allege his ownership of a property that has an assessed value of more than Php100,000.00 and, with
respect to Ordinance No. SP-2335, by what standing or personality he filed the case to nullify the same. According to respondents,
the petition is not a class suit, and that, for not having specifically alleged that petitioner filed the case as a taxpayer, it could only be
surmised whether he is a party-in-interest who stands to be directly benefited or injured by the judgment in this case.

It is a general rule that every action must be prosecuted or defended in the name of the real party-in-interest, who stands to be
benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit.

Jurisprudence defines interest as "material interest, an interest in issue and to be affected by the decree, as distinguished from mere
interest in the question involved, or a mere incidental interest. By real interest is meant a present substantial interest, as
distinguished from a mere expectancy or a future, contingent, subordinate, or consequential interest." "To qualify a person to be a
real party-in-interest in whose name an action must be prosecuted, he must appear to be the present real owner of the right sought
to be enforced."27

"Legal standing" or locus standi calls for more than just a generalized grievance. 28 The concept has been define d as a personal and
substantial interest in the case such that the party has sustained or will sustain direct injury as a result of the government al act that
is being challenged.29 The gist of the question of standing is whether a party alleges such personal stake in the outcome of the
controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court depends for
illumination of difficult constitutional questions.30

A party challenging the constitutionality of a law, act, or statute must show "not only that the law is invalid, but also that he has
sustained or is in immediate, or imminent danger of sustaining some direct injury as a result of its enforcement, and not merely that
he suffers thereby in some indefinite way." It must be shown that he has been, or is about to be, denied some right or privilege to
which he is lawfully entitled, or that he is about to be subjected to some burdens or penalties by reason of the statute complained
of.31

Tested by the foregoing, petitioner in this case clearly has legal standing to file the petition. He is a real party-in-interest to assail the
constitutionality and legality of Ordinance Nos. SP-2095 and SP-2235 because respondents did not dispute that he is a registered co-
owner of a residential property in Quezon City an d that he paid property tax which already included the SHT and the garbage fee.
He has substantial right to seek a refund of the payments he made and to stop future imposition. While he is a lone petitioner, his
cause of action to declare the validity of the subject ordinances is substantial and of paramount interest to similarly situated
property owners in Quezon City.

C. Litis Pendentia
Respondents move for the dismissal of this petition on the ground of litis pendentia. They claim that, as early as February 22, 2012, a
case entitled Alliance of Quezon City Homeowners, Inc., et al., v. Hon. Herbert Bautista, et al. , docketed as Civil Case No. Q-12- 7-
820, has been pending in the Quezon City Regional Trial Court, Branch 104, which assails the legality of Ordinance No. SP-2095.
Relying on City of Makati, et al. v. Municipality (now City) of Taguig, et al.,32 respondents assert that there is substantial identity of
parties between the two cases because petitioner herein and plaintiffs in the civil case filed their respective cases as taxpayers of
Quezon City.

For petitioner, however, respondents’ contention is untenable since he is not a party in Alliance and does not even have the
remotest identity or association with the plaintiffs in said civil case. Moreover, respondents’ arguments would deprive this Court of
its jurisdiction to determine the constitutionality of laws under Section 5, Article VIII of the 1987 Constitution. 33

Litis pendentia is a Latin term which literally means "a pending suit" and is variously referred to in some decisions as lis pendens and
auter action pendant.34 While it is normally connected with the control which the court has on a property involved in a suit during
the continuance proceedings, it is more interposed as a ground for the dismissal of a civil action pending in court.35 In Film
Development Council of the Philippines v. SM Prime Holdings, Inc.,36 We elucidated:

Litis pendentia, as a ground for the dismissal of a civil action, refers to a situation where two actions are pending between the same
parties for the same cause of action, so that one of them becomes unnecessary and vexatious. It is based on the policy against
multiplicity of suit and authorizes a court to dismiss a case motu proprio.

xxxx

The requisites in order that an action may be dismissed on the ground of litis pendentia are: (a) the identity of parties, or at least
such as representing the same interest in both actions; (b) the identity of rights asserted and relief prayed for, the relief being
founded on the same facts, and (c) the identity of the two cases such that judgment in one, regardless of which party is successful,
would amount to res judicata in the other.

The underlying principle of litis pendentia is the theory that a party is not allowed to vex another more than once regarding the
same subject matter and for the same cause of action. This theory is founded on the public policy that the same subject matter
should not be the subject of controversy in courts more than once, in order that possible conflicting judgments may be avoided for
the sake of the stability of the rights and status of persons, and also to avoid the costs and expenses incident to numerous suits.

Among the several tests resorted to in ascertaining whether two suits relate to a single or common cause of action are: (1) whether
the same evidence would support and sustain both the first and second causes of action; and (2) whether the defenses in one case
may be used to substantiate the complaint in the other.

The determination of whether there is an identity of causes of action for purposes of litis pendentia is inextricably linked with that of
res judicata , each constituting an element of the other. In either case, both relate to the sound practice of including, in a single
litigation, the disposition of all issues relating to a cause of action that is before a court. 37

There is substantial identity of the parties when there is a community of interest between a party in the first case and a party in the
second case albeit the latter was not impleaded in the first case. 38 Moreover, the fact that the positions of the parties are reversed,
i.e., the plaintiffs in the first case are the defendants in the second case or vice-versa, does not negate the identity of parties for
purposes of determining whether the case is dismissible on the ground of litis pendentia . 39

In this case, it is notable that respondents failed to attach any pleading connected with the alleged civil case pending before the
Quezon City trial court.1âwphi1 Granting that there is substantial identity of parties between said case and this petition, dismissal on
the ground of litis pendentia still cannot be had in view of the absence of the second and third requisites. There is no way for us to
determine whether both cases are based on the same set of facts that require the presentation of the same evidence. Even if
founded on the same set of facts, the rights asserted and reliefs prayed for could be different. Moreover, there is no basis to rule
that the two cases are intimately related and/or intertwined with one another such that the judgment that may be rendered in one,
regardless of which party would be successful, would amount to res judicata in the other.

D. Failure to Exhaust Administrative Remedies

Respondents contend that petitioner failed to exhaust administrative remedies for his non-compliance with Section 187 of the LGC,
which mandates:
Section 187. Procedure for Approval and Effectivity of Tax Ordinances and Revenue Measures; Mandatory Public Hearings. – The
procedure for approval of local tax ordinances and revenue measures shall be in accordance with the provisions of this Code:
Provided, That public hearings shall be conducted for the purpose prior to the enactment thereof: Provided, further, That any
question on the constitutionality or legality of tax ordinances or revenue measures may be raised on appeal within thirty (30) days
from the effectivity thereof to the Secretary of Justice who shall render a decision within sixty (60) days from the date of receipt of
the appeal: Provided, however, That such appeal shall not have the effect of suspending the effectivity of the ordinance and the
accrual and payment of the tax, fee, or charge levied therein: Provided, finally, That within thirty (30) days after receipt of the
decision or the lapse of the sixty-day period without the Secretary of Justice acting upon the appeal, the aggrieved party may file
appropriate proceedings with a court of competent jurisdiction.

The provision, the constitutionality of which was sustained in Drilon v. Lim , 40 has been construed as mandatory41 considering that –

A municipal tax ordinance empowers a local government unit to impose taxes. The power to tax is the most effective instrument to
raise needed revenues to finance and support the myriad activities of local government units for the delivery of basic services
essential to the promotion of the general welfare and enhancement of peace, progress, and prosperity of the people. Consequently,
any delay in implementing tax measures would be to the detriment of the public. It is for this reason that protests over tax
ordinances are required to be done within certain time frames. x x x. 42

The obligatory nature of Section 187 was underscored in Hagonoy Market Vendor Asso. v. Municipality of Hagonoy: 43

x x x [T]he timeframe fixed by law fo r parties to avail of their legal remedies before competent courts is not a "mere technicality"
that can be easily brushed aside. The periods stated in Section 187 of the Local Government Code are mandatory. x x x Being its
lifeblood, collection of revenues by the government is of paramount importance. The funds for the operation of its agencies and
provision of basic services to its inhabitants are largely derived from its revenues and collections. Thus, it is essential that the validity
of revenue measures is not left uncertain for a considerable length of time. Hence, the law provided a time limit for an aggrieved
party to assail the legality of revenue measures and tax ordinances." 44

Despite these cases, the Court, in Ongsuco, et al. v. Hon. Malones, 45held that there was no need for petitioners therein to exhaust
administrative remedies before resorting to the courts, considering that there was only a pure question of law, the parties did not
dispute any factual matter on which they had to present evidence. Likewise, in Cagayan Electric Power and Light Co., Inc. v. City of
Cagayan de Oro,46 We relaxed the application of the rules in view of the more substantive matters. For the same reasons, this
petition is an exception to the general rule.

Substantive Issues

Petitioner asserts that the protection of real properties from informal settlers and the collection of garbage are basic and essential
duties and functions of the Quezon City Government. By imposing the SHT and the garbage fee, the latter has shown a penchant and
pattern to collect taxes to pay for public services that could be covered by its revenues from taxes imposed on property, idle land,
business, transfer, amusement, etc., as well as the Internal Revenue Allotment (IRA ) from the National Government. For petitioner,
it is noteworthy that respondents did not raise the issue that the Quezon City Government is in dire financial state and desperately
needs money to fund housing for informal settlers and to pay for garbage collection. In fact, it has not denied that its revenue
collection in 2012 is in the sum of ₱13.69 billion.

Moreover, the imposition of the SHT and the garbage fee cannot be justified by the Quezon City Government as an exercise of its
power to create sources of income under Section 5, Article X of the 1987 Constitution. 47 According to petitioner, the constitutional
provision is not a carte blanche for the LGU to tax everything under its territorial and political jurisdiction as the provision itself
admits of guidelines and limitations.

Petitioner further claims that the annual property tax is an ad valorem tax, a percentage of the assessed value of the property, which
is subject to revision every three (3) years in order to reflect an increase in the market value of the property. The SHT and the
garbage fee are actually increases in the property tax which are not based on the assessed value of the property or its reassessment
every three years; hence, in violation of Sections 232 and 233 of the LGC. 48

For their part, respondents relied on the presumption in favor of the constitutionality of Ordinance Nos. SP-2095 and SP-2235,
invoking Victorias Milling Co., Inc. v. Municipality of Victorias, etc.,49 People v. Siton, et al.,50 and Hon. Ermita v. Hon. Aldecoa-
Delorino .51 They argue that the burden of establishing the invalidity of an ordinance rests heavily upon the party challenging its
constitutionality. They insist that the questioned ordinances are proper exercises of police power similar to Telecom. & Broadcast
Attys. of the Phils., Inc. v. COMELEC52 and Social Justice Society (SJS), et al. v. Hon. Atienza, Jr. 53 and that their enactment finds basis
in the social justice principle enshrined in Section 9,54 Article II of the 1987 Constitution.

As to the issue of publication, respondents argue that where the law provides for its own effectivity, publication in the Official
Gazette is not necessary so long as it is not punitive in character, citing Balbuna, et al. v. Hon. Secretary of Education, et al.55 and
Askay v. Cosalan .[56]] Thus, Ordinance No. SP-2095 took effect after its publication, while Ordinance No. SP-2235 became effective
after its approval on December 26, 2013.

Additionally, the parties articulate the following positions:

On the Socialized Housing Tax

Respondents emphasize that the SHT is pursuant to the social justice principle found in Sections 1 and 2, Article XIII 57 of the 1987
Constitution and Sections 2 (a)58 and 4359 of R.A. No. 7279, or the "Urban Development and Housing Act of 1992 ( UDHA ).

Relying on Manila Race Horse Trainers Assn., Inc. v. De La Fuente, 60and Victorias Milling Co., Inc. v. Municipality of Victorias,
etc.,61respondents assert that Ordinance No. SP-2095 applies equally to all real property owners without discrimination. There is no
way that the ordinance could violate the equal protection clause because real property owners and informal settlers do not belong
to the same class.

Ordinance No. SP-2095 is also not oppressive since the tax rate being imposed is consistent with the UDHA. While the law authorizes
LGUs to collect SHT on properties with an assessed value of more than ₱50,000.00, the questioned ordinance only covers properties
with an assessed value exceeding ₱100,000.00. As well, the ordinance provides for a tax credit equivalent to the total amount of the
special assessment paid by the property owner beginning in the sixth (6th) year of the effectivity of the ordinance.

On the contrary, petitioner claims that the collection of the SHT is tantamount to a penalty imposed on real property owners due to
the failure of respondent Quezon City Mayor and Council to perform their duty to secure and protect real property owners from
informal settlers, thereby burdening them with the expenses to provide funds for housing. For petitioner, the SHT cannot be viewed
as a "charity" from real property owners since it is forced, not voluntary.

Also, petitioner argues that the collection of the SHT is a kind of class legislation that violates the right of property owners to equal
protection of the laws since it favors informal settlers who occupy property not their own and pay no taxes over law-abiding real
property owners w ho pay income and realty taxes.

Petitioner further contends that respondents’ characterization of the SHT as "nothing more than an advance payment on the real
property tax" has no statutory basis. Allegedly, property tax cannot be collected before it is due because, under the LGC, chartered
cities are authorized to impose property tax based on the assessed value and the general revision of assessment that is made every
three (3) years.

As to the rationale of SHT stated in Ordinance No. SP-2095, which, in turn, was based on Section 43 of the UDHA, petitioner asserts
that there is no specific provision in the 1987 Constitution stating that the ownership and enjoyment of property bear a social
function. And even if there is, it is seriously doubtful and far-fetched that the principle means that property owners should provide
funds for the housing of informal settlers and for home site development. Social justice and police power, petitioner believes, does
not mean imposing a tax on one, or that one has to give up something, for the benefit of another. At best, the principle that
property ownership and enjoyment bear a social function is but a reiteration of the Civil Law principle that property should not be
enjoyed and abused to the injury of other properties and the community, and that the use of the property may be restricted by
police power, the exercise of which is not involved in this case.

Finally, petitioner alleges that 6 Bistekvilles will be constructed out of the SHT collected. Bistek is the monicker of respondent City
Mayor. The Bistekvilles makes it clear, therefore, that politicians will take the credit for the tax imposed on real property owners.

On the Garbage Fee

Respondents claim that Ordinance No. S-2235, which is an exercise of police power, collects on the average from every household a
garbage fee in the meager amount of thirty-three (33) centavos per day compared with the sum of ₱1,659.83 that the Quezon City
Government annually spends for every household for garbage collection and waste management. 62
In addition, there is no double taxation because the ordinance involves a fee. Even assuming that the garbage fee is a tax, the same
cannot be a direct duplicate tax as it is imposed on a different subject matter and is of a different kind or character. Based on
Villanueva, et al. v. City of Iloilo63 and Victorias Milling Co., Inc. v. Municipality of Victorias, etc., 64 there is no "taxing twice" because
the real property tax is imposed on ownership based on its assessed value, while the garbage fee is required on the domestic
household. The only reference to the property is the determination of the applicable rate and the facility of collection.

Petitioner argues, however, that Ordinance No. S-2235 cannot be justified as an exercise of police power. The cases of Calalang v.
Williams,65 Patalinghug v. Court of Appeals,66 and Social Justice Society (SJS), et al. v. Hon. Atienza, Jr.,67 which were cited by
respondents, are inapplicable since the assailed ordinance is a revenue measure and does not regulate the disposal or other aspect
of garbage.

The subject ordinance, for petitioner, is discriminatory as it collects garbage fee only from domestic households and not from
restaurants, food courts, fast food chains, and other commercial dining places that spew garbage much more than residential
property owners.

Petitioner likewise contends that the imposition of garbage fee is tantamount to double taxation because garbage collection is a
basic and essential public service that should be paid out from property tax, business tax, transfer tax, amusement tax, community
tax certificate, other taxes, and the IRA of the Quezon City Government. To bolster the claim, he states that the revenue collection of
the Quezon City Government reached Php13.69 billion in 2012. A small portion of said amount could be spent for garbage collection
and other essential services.

It is further noted that the Quezon City Government already collects garbage fee under Section 47 68 of R.A. No. 9003, or the
Ecological Solid Waste Management Act of 2000, which authorizes LGUs to impose fees in amounts sufficient to pay the costs of
preparing, adopting, and implementing a solid waste management plan, and that LGUs have access to the Solid Waste Management
(SWM) Fund created under Section 4669 of the same law. Also, according to petitioner, it is evident that Ordinance No. S2235 is
inconsistent with R.A. No. 9003 for whil e the law encourages segregation, composting, and recycling of waste, the ordinance only
emphasizes the collection and payment of garbage fee; while the law calls for an active involvement of the barangay in the
collection, segregation, and recycling of garbage, the ordinance skips such mandate. Lastly, in challenging the ordinance, petitioner
avers that the garbage fee was collected even if the required publication of its approval had not yet elapsed. He notes that on
January 7, 2014, he paid his realty tax which already included the garbage fee.

The Court's Ruling

Respondents correctly argued that an ordinance, as in every law, is presumed valid.

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. 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.70

For an ordinance to be valid though, it must not only be within the corporate powers of the LGU to enact and must be passed
according to the procedure prescribed by law, it should also conform to the following requirements: (1) not contrary to the
Constitution or any statute; (2) not unfair or oppressive; (3) not partial or discriminatory; (4) not prohibit but may regulate trade; (5)
general and consistent with public policy; and (6) not unreasonable.71 As jurisprudence indicates, the tests are divided into the
formal (i.e., whether the ordinance was enacted within the corporate powers of the LGU and whether it was passed in accordance
with the procedure prescribed by law), and the substantive ( i.e., involving inherent merit, like the conformity of the ordinance with
the limitations under the Constitution and the statutes, as well as with the requirements of fairness and reason, and its consistency
with public policy).72

An ordinance must pass muster under the test of constitutionality and the test of consistency with the prevailing laws. 73 If not, it is
void.74

Ordinance should uphold the principle of the supremacy of the Constitution. 75 As to conformity with existing statutes,

Batangas CATV, Inc. v. Court of Appeals76 has this to say:

It is a fundamental principle that municipal ordinances are inferior in status and subordinate to the laws of the state. An ordinance in
conflict with a state law of general character and statewide application is universally held to be invalid. The principle is frequently
expressed in the declaration that municipal authorities, under a general grant of power, cannot adopt ordinances which infringe the
spirit of a state law or repugnant to the general policy of the state. In every power to pass ordinances given to a municipality, there
is an implied restriction that the ordinances shall be consistent with the general law. In the language of Justice Isagani Cruz (ret.),
this Court, in Magtajas vs. Pryce Properties Corp., Inc., ruled that:

The rationale of the requirement that the ordinances should not contravene a statute is obvious. Municipal governments are only
agents of the national government. Local councils exercise only delegated legislative powers conferred on them by Congress as the
national lawmaking body. The delegate cannot be superior to the principal or exercise powers higher than those of the latter. It is a
heresy to suggest that the local government units can undo the acts of Congress, from which they have derived their power in the
first place, and negate by mere ordinance the mandate of the statute.

Municipal corporations owe their origin to, and derive their powers and rights wholly from the legislature. It breathes into them the
breath of life, without which they cannot exist. As it creates, so it may destroy. As it may destroy, it may abridge and control. Unless
there is some constitutional limitation on the right, the legislature might, by a single act, and if we can suppose it capable of so great
a folly and so great a wrong, sweep from existence all of the municipal corporations in the State, and the corporation could not
prevent it. We know of no limitation on the right so far as to the corporation themselves are concerned. They are so to phrase it, the
mere tenants at will of the legislature.

This basic relationship between the national legislature and the local government units has not been enfeebled by the new
provisions in the Constitution strengthening the policy of local autonomy. Without meaning to detract from that policy, we here
confirm that Congress retains control of the local government units although in significantly reduced degree now than under our
previous Constitutions. The power to create still includes the power to destroy. The power to grant still includes the power to
withhold or recall. True, there are certain notable innovations in the Constitution, like the direct conferment on the local
government units of the power to tax, which cannot now be withdrawn by mere statute. By and large, however, the national
legislature is still the principal of the local government units, which cannot defy its will or modify or violate it.77

LGUs must be reminded that they merely form part of the whole; that the policy of ensuring the autonomy of local governments was
never intended by the drafters of the 1987 Constitution to create an imperium in imperio and install an intra-sovereign political
subdivision independent of a single sovereign state. 78

"[M]unicipal corporations are bodies politic and corporate, created not only as local units of local self-government, but as
governmental agencies of the state. The legislature, by establishing a municipal corporation, does not divest the State of any of its
sovereignty; absolve itself from its right and duty to administer the public affairs of the entire state; or divest itself of any power
over the inhabitants of the district which it possesses before the charter was granted." 79

LGUs are able to legislate only by virtue of a valid delegation of legislative power from the national legislature; they are mere agents
vested with what is called the power of subordinate legislation.80 "Congress enacted the LGC as the implementing law for the
delegation to the various LGUs of the State’s great powers, namely: the police power, the power of eminent domain, and the power
of taxation. The LGC was fashioned to delineate the specific parameters and limitations to be complied with by each LGU in the
exercise of these delegated powers with the view of making each LGU a fully functioning subdivision of the State subject to the
constitutional and statutory limitations." 81

Specifically, with regard to the power of taxation, it is indubitably the most effective instrument to raise needed revenues in
financing and supporting myriad activities of the LGUs for the delivery of basic services essential to the promotion of the general
welfare and the enhancement of peace, progress, and prosperity of the people.82 As this Court opined in National Power Corp. v.
City of Cabanatuan:83

In recent years, the increasing social challenges of the times expanded the scope of state activity, and taxation has become a tool to
realize social justice and the equitable distribution of wealth, economic progress and the protection of local industries as well as
public welfare and similar objectives. Taxation assume s even greater significance with the ratification of the 1987 Constitution.
Thenceforth, the power to tax is no longer vested exclusively on Congress; local legislative bodies are now given direct authority to
levy taxes, fees and other charges pursuant to Article X, Section 5 of the 1987 Constitution, viz: "Section 5. Each Local Government
unit shall have the power to create its own sources of revenue, to levy taxes, fees and charges subject to such guidelines and
limitations as the Congress may provide, consistent with the basic policy of local autonomy. Such taxes, fees and charges shall accrue
exclusively to the local governments."
This paradigm shift results from the realization that genuine development can be achieved only by strengthening local autonomy
and promoting decentralization of governance. For a long time, the country’s highly centralized government structure has bred a
culture of dependence among local government leaders upon the national leadership. It has also "dampened the spirit of initiative,
innovation and imaginative resilience in matters of local development on the part of local government leaders." The only way to
shatter this culture of dependence is to give the LGUs a wider role in the delivery of basic services, and confer them sufficient
powers to generate their own sources for the purpose. To achieve this goal, Section 3 of Article X of the 1987 Constitution mandates
Congress to enact a local government code that will, consistent with the basic policy of local autonomy , set the guidelines and
limitations to this grant of taxing powers x x x 84

Fairly recently, We also stated in Pelizloy Realty Corporation v. Province of Benguet 85 that:

The rule governing the taxing power of provinces, cities, municipalities and barangays is summarized in Icard v. City Council of
Baguio :

It is settled that a municipal corporation unlike a sovereign state is clothed with no inherent power of taxation. The charter or
statute must plainly show an intent to confer that power or the municipality, cannot assume it. And the power when granted is to be
construed in strictissimi juris . Any doubt or ambiguity arising out of the term used in granting that power must be resolved against
the municipality. Inferences, implications, deductions – all these – have no place in the interpretation of the taxing power of a
municipal corporation. [Underscoring supplied]

xxxx

Per Section 5, Article X of the 1987 Constitution, "the power to tax is no longer vested exclusively on Congress; local legislative
bodies are now given direct authority to levy taxes, fees and other charges." Nevertheless, such authority is "subject to such
guidelines and limitations as the Congress may provide."

In conformity with Section 3, Article X of the 1987 Constitution, Congress enacted Republic Act No. 7160, otherwise known as the
Local Government Code of 1991. Book II of the LGC governs local taxation and fiscal matters. 86

Indeed, LGUs have no inherent power to tax except to the extent that such power might be delegated to them either by the basic
law or by the statute.87 "Under the now prevailing Constitution , where there is neither a grant nor a prohibition by statute , the tax
power must be deemed to exist although Congress may provide statutory limitations and guidelines. The basic rationale for the
current rule is to safeguard the viability and self-sufficiency of local government units by directly granting them general and broad
tax powers. Nevertheless, the fundamental law did not intend the delegation to be absolute and unconditional; the constitutional
objective obviously is to ensure that, while the local government units are being strengthened and made more autonomous , the
legislature must still see to it that (a) the taxpayer will not be over-burdened or saddled with multiple and unreasonable impositions;
(b) each local government unit will have its fair share of available resources; (c) the resources of the national government will not be
unduly disturbed; and (d) local taxation will be fair, uniform, and just." 88

Subject to the provisions of the LGC and consistent with the basic policy of local autonomy, every LGU is now empowered and
authorized to create its own sources of revenue and to levy taxes, fees, and charges which shall accrue exclusively to the local
government unit as well as to apply its resources and assets for productive, developmental, or welfare purposes, in the exercise or
furtherance of their governmental or proprietary powers and functions. 89 The relevant provisions of the LGC which establish the
parameters of the taxing power of the LGUs are as follows:

SECTION 130. Fundamental Principles. – The following fundamental principles shall govern th e exercise of the taxing and other
revenue-raising powers of local government units:

(a) Taxation shall be uniform in each local government unit;

(b) Taxes, fees, charges and other impositions shall:

(1) be equitable and based as far as practicable on the taxpayer’s ability to pay;

(2) be levied and collected only for public purposes;

 (3) not be unjust, excessive, oppressive, or confiscatory;

(4) not be contrary to law, public policy, national economic policy, or in restraint of trade;

(c) The collection of local taxes, fees, charges and other impositions shall in no case be left to any private person;

(d) The revenue collected pursuant to the provisions of this Code shall inure solely to the benefit of, and be subject to the
disposition by, the local government unit levying the tax, fee, charge or other imposition unless otherwise specifically
provided herein; and,

(e) Each local government unit shall, as far as practicable, evolve a progressive system of taxation.

SECTION 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:

(a) Income tax, except when levied on banks and other financial institutions;

(b) Documentary stamp tax;

(c) Taxes on estates, inheritance, gifts, legacies and other acquisitions mortis causa, except as otherwise provided herein;

(d) Customs duties, registration fees of vessel and wharage on wharves, tonnage dues, and all other kinds of customs fees,
charges and dues except wharfage on wharves constructed and maintained by the local government unit concerned;

(e) Taxes, fees, and charges and other impositions upon goods carried into or out of, or passing through, the territorial
jurisdictions of local government units in the guise of charges for wharfage, tolls for bridges or otherwise, or other taxes,
fees, or charges in any form whatsoever upon such goods or merchandise;

(f) Taxes, fees or charges on agricultural and aquatic products when sold by marginal farmers or fishermen;

(g) Taxes on business enterprises certified to by the Board of Investments as pioneer or non-pioneer for a period of six (6)
and four (4) years, respectively from the date of registration;

(h) Excise taxes on articles enumerated under the National Internal Revenue Code, as amended, and taxes, fees or charges
on petroleum products;

(i) Percentage or value-added tax (VAT) on sales, barters or exchanges or similar transactions on goods or services except as
otherwise provided herein;

(j) Taxes on the gross receipts of transportation contractors and persons engaged in the transportation of passengers or
freight by hire and common carriers by air, land or water, except as provided in this Code;

(k) Taxes on premiums paid by way of reinsurance or retrocession;

(l) Taxes, fees or charges for the registration of motor vehicles and for the issuance of all kinds of licenses or permits for the
driving thereof, except tricycles;

(m) Taxes, fees, or other charges on Philippine products actually exported, except as otherwise provided herein;

(n) Taxes, fees, or charges, on Countryside and Barangay Business Enterprises and cooperatives duly registered under R.A.
No. 6810 and Republic Act Numbered Sixty-nine hundred thirty-eight (R.A. No. 6938) otherwise known as the "Cooperative
Code of the Philippines" respectively; and

(o) Taxes, fees or charges of any kind on the National Government, its agencies and instrumentalities, and local government
units.
SECTION 151. Scope of Taxing Powers. – Except as otherwise provided in this Code, the city, may levy the taxes, fees, and charges
which the province or municipality may impose: Provided, however, That the taxes, fees and charges levied and collected by highly
urbanized and independent component cities shall accrue to them and distributed in accordance with the provisions of this Code.

The rates of taxes that the city may levy may exceed the maximum rates allowed for the province or municipality by not more than
fifty percent (50%) except the rates of professional and amusement taxes.

SECTION 186. Power to Levy Other Taxes, Fees or Charges. – Local government units may exercise the power to levy taxes, fees or
charges on any base or subject not otherwise specifically enumerated herein or taxed under the provisions of the National Internal
Revenue Code, as amended, or other applicable laws: Provided, That the taxes, fees, or charges shall not be unjust, excessive,
oppressive, confiscatory or contrary to declared national policy: Provided, further, That the ordinance levying such taxes, fees or
charges shall not be enacted without any prior public hearing conducted for the purpose.

On the Socialized Housing Tax

Contrary to petitioner’s submission, the 1987 Constitution explicitly espouses the view that the use of property bears a social
function and that all economic agents shall contribute to the common good. 90 The Court already recognized this in Social Justice
Society (SJS), et al. v. Hon. Atienza, Jr.:91

Property has not only an individual function, insofar as it has to provide for the needs of the owner, but also a social function insofar
as it has to provide for the needs of the other members of society. The principle is this:

Police power proceeds from the principle that every holder of property, however absolute and unqualified may be his title, holds it
under the implied liability that his use of it shall not be injurious to the equal enjoyment of others having an equal right to the
enjoyment of their property, no r injurious to the right of the community. Rights of property, like all other social and conventional
rights, are subject to reasonable limitations in their enjoyment as shall prevent them from being injurious, and to such reasonable
restraints and regulations established by law as the legislature, under the governing an d controlling power vested in them by the
constitution, may think necessary and expedient.92

Police power, which flows from the recognition that salus populi est suprema lex (the welfare of the people is the supreme law), is
the plenary power vested in the legislature to make statutes and ordinances to promote the health, morals, peace, education, good
order or safety and general welfare of the people. 93 Property rights of individuals may be subjected to restraints and burdens in
order to fulfill the objectives of the government in the exercise of police power. 94 In this jurisdiction, it is well-entrenched that
taxation may be made the implement of the state’s police power.95

Ordinance No. SP-2095 imposes a Socialized Housing Tax equivalent to 0.5% on the assessed value of land in excess of
Php100,000.00. This special assessment is the same tax referred to in R.A. No. 7279 or the UDHA. 96 The SHT is one of the sources of
funds for urban development and housing program.97 Section 43 of the law provides:

Sec. 43. Socialized Housing Tax . – Consistent with the constitutional principle that the ownership and enjoyment of property bear a
social function and to raise funds for the Program, all local government units are hereby authorized to impose an additional one-half
percent (0.5%) tax on the assessed value of all lands in urban areas in excess of Fifty thousand pesos (₱50,000.00).

The rationale of the SHT is found in the preambular clauses of the subject ordinance, to wit:

WHEREAS, the imposition of additional tax is intended to provide the City Government with sufficient funds to initiate, implement
and undertake Socialized Housing Projects and other related preliminary activities;

WHEREAS, the imposition of 0.5% tax will benefit the Socialized Housing Programs and Projects of the City Government, specifically
the marginalized sector through the acquisition of properties for human settlements;

WHEREAS, the removal of the urban blight will definitely increase fair market value of properties in the city[.]

The above-quoted are consistent with the UDHA, which the LGUs are charged to implement in their respective localities in
coordination with the Housing and Urban Development Coordinating Council, the national housing agencies, the Presidential
Commission for the Urban Poor, the private sector, and other non-government organizations.98 It is the declared policy of the State
to undertake a comprehensive and continuing urban development and housing program that shall, among others, uplift the
conditions of the underprivileged and homeless citizens in urban areas and in resettlement areas, and provide for the rational use
and development of urban land in order to bring a bout, among others, reduction in urban dysfunctions, particularly those that
adversely affect public health, safety and ecology, and access to land and housing by the underprivileged and homeless
citizens.99 Urban renewal and resettlement shall include the rehabilitation and development of blighted and slum areas100 and the
resettlement of program beneficiaries in accordance with the provisions of the UDHA. 101 Under the UDHA, socialized housing102 shall
be the primary strategy in providing shelter for the underprivileged and homeless.103 The LGU or the NHA, in cooperation with the
private developers and concerned agencies, shall provide socialized housing or re settlement areas with basic services and facilities
such as potable water, power and electricity, and an adequate power distribution system, sewerage facilities, and an efficient and
adequate solid waste disposal system; and access to primary roads and transportation facilities.104 The provisions for health,
education, communications, security, recreation, relief and welfare shall also be planned and be given priority for implementation by
the LGU and concerned agencies in cooperation with the private sector and the beneficiaries themselves. 105

Moreover, within two years from the effectivity of the UDHA, the LGUs, in coordination with the NHA, are directed to implement the
relocation and resettlement of persons living in danger areas such as esteros , railroad tracks, garbage dumps, riverbanks,
shorelines, waterways, and other public places like sidewalks, roads, parks, and playgrounds. 106 In coordination with the NHA, the LG
Us shall provide relocation or resettlement sites with basic services and facilities and access to employment and livelihood
opportunities sufficient to meet the basic needs of the affected families. 107

Clearly, the SHT charged by the Quezon City Government is a tax which is within its power to impose. Aside from the specific
authority vested by Section 43 of the UDHA, cities are allowed to exercise such other powers and discharge such other functions and
responsibilities as are necessary, appropriate, or incidental to efficient and effective provision of the basic services and facilities
which include, among others, programs and projects for low-cost housing and other mass dwellings.108 The collections made accrue
to its socialized housing programs and projects.

The tax is not a pure exercise of taxing power or merely to raise revenue; it is levied with a regulatory purpose. The levy is primarily
in the exercise of the police power for the general welfare of the entire city. It is greatly imbued with public interest. Removing slum
areas in Quezon City is not only beneficial to the underprivileged and homeless constituents but advantageous to the real property
owners as well. The situation will improve the value of the their property investments, fully enjoying the same in view of an orderly,
secure, and safe community, and will enhance the quality of life of the poor, making them law-abiding constituents and better
consumers of business products.

Though broad and far-reaching, police power is subordinate to constitutional limitations and is subject to the requirement that its
exercise must be reasonable and for the public good.109 In the words of City of Manila v. Hon. Laguio, Jr.:110

The police power granted to local government units must always be exercised with utmost observance of the rights of the people to
due process and equal protection of the law. Such power cannot be exercised whimsically, arbitrarily or despotically as its exercise is
subject to a qualification, limitation or restriction demanded by the respect and regard due to the prescription of the fundamental
law, particularly those forming part of the Bill of Rights. Individual rights, it bears emphasis, may be adversely affected only to the
extent that may fairly be required by the legitimate demands of public interest or public welfare. Due process requires the intrinsic
validity of the law in interfering with the rights of the person to his life, liberty and property.

xxxx

To successfully invoke the exercise of police power as the rationale for the enactment of the Ordinance, and to free it from the
imputation of constitutional infirmity, not only must it appear that the interests of the public generally, as distinguished from those
of a particular class, require an interference with private rights, but the means adopted must be reasonably necessary for the
accomplishment of the purpose and not unduly oppressive upon individuals. It must be evident that no other alternative for the
accomplishment of the purpose less intrusive of private rights can work. A reasonable relation must exist between the purposes of
the police measure and the means employed for its accomplishment, for even under the guise of protecting the public interest,
personal rights and those pertaining to private property will not be permitted to be arbitrarily invaded.

Lacking a concurrence of these two requisites, the police measure shall be struck down as an arbitrary intrusion into private rights –
a violation of the due process clause.111

As with the State, LGUs may be considered as having properly exercised their police power only if there is a lawful subject and a
lawful method or, to be precise, if the following requisites are met: (1) the interests of the public generally, as distinguished from
those of a particular class, require its exercise and (2) the mean s employed are reasonably necessary for the accomplishment of the
purpose and not unduly oppressive upon individuals. 112

In this case, petitioner argues that the SHT is a penalty imposed on real property owners because it burdens them with expenses to
provide funds for the housing of informal settlers, and that it is a class legislation since it favors the latter who occupy properties
which is not their own and pay no taxes.

We disagree.

Equal protection requires that all persons or things similarly situated should be treated alike, both as to rights conferred and
responsibilities imposed.113 The guarantee means that no person or class of persons shall be denied the same protection of laws
which is enjoyed by other persons or other classes in like circumstances. 114 Similar subjects should not be treated differently so as to
give undue favor to some and unjustly discriminate against others. 115 The law may, therefore, treat and regulate one class differently
from another class provided there are real and substantial differences to distinguish one class from another. 116

An ordinance based on reasonable classification does not violate the constitutional guaranty of the equal protection of the law. The
requirements for a valid and reasonable classification are: (1) it must rest on substantial distinctions; (2) it must be germane to the
purpose of the law; (3) it must not be limited to existing conditions only; and (4) it must apply equally to all members of the same
class.117For the purpose of undertaking a comprehensive and continuing urban development and housing program, the disparities
between a real property owner and an informal settler as two distinct classes are too obvious and need not be discussed at length.
The differentiation conforms to the practical dictates of justice and equity and is not discriminatory within the meaning of the
Constitution. Notably, the public purpose of a tax may legally exist even if the motive which impelled the legislature to impose the
tax was to favor one over another.118 It is inherent in the power to tax that a State is free to select the subjects of
taxation.119 Inequities which result from a singling out of one particular class for taxation or exemption infringe no constitutional
limitation.120

Further, the reasonableness of Ordinance No. SP-2095 cannot be disputed. It is not confiscatory or oppressive since the tax being
imposed therein is below what the UDHA actually allows. As pointed out by respondents, while the law authorizes LGUs to collect
SHT on lands with an assessed value of more than ₱50,000.00, the questioned ordinance only covers lands with an assessed value
exceeding ₱100,000.00. Even better, on certain conditions, the ordinance grants a tax credit equivalent to the total amount of the
special assessment paid beginning in the sixth (6th) year of its effectivity. Far from being obnoxious, the provisions of the subject
ordinance are fair and just.

On the Garbage Fee

In the United States of America, it has been held that the authority of a municipality to regulate garbage falls within its police power
to protect public health, safety, and welfare.121 As opined, the purposes and policy underpinnings of the police power to regulate the
collection and disposal of solid waste are: (1) to preserve and protect the public health and welfare as well as the environment by
minimizing or eliminating a source of disease and preventing and abating nuisances; and (2) to defray costs and ensure financial
stability of the system for the benefit of the entire community, with the sum of all charges marshalled and designed to pay for the
expense of a systemic refuse disposal scheme.122

Ordinances regulating waste removal carry a strong presumption of

validity.123 Not surprisingly, the overwhelming majority of U.S. cases addressing a city's authority to impose mandatory garbage
service and fees have upheld the ordinances against constitutional and statutory challenges.124

A municipality has an affirmative duty to supervise and control the collection of garbage within its corporate limits. 125 The LGC
specifically assigns the responsibility of regulation and oversight of solid waste to local governing bodies because the Legislature
determined that such bodies were in the best position to develop efficient waste management programs. 126 To impose on local
governments the responsibility to regulate solid waste but not grant them the authority necessary to fulfill the same would lead to
an absurd result."127 As held in one U.S. case:

x x x When a municipality has general authority to regulate a particular subject matter, the manner and means of exercising those
powers, where not specifically prescribed by the legislature, are left to the discretion of the municipal authorities. x x x Leaving the
manner of exercising municipal powers to the discretion of municipal authorities "implies a range of reasonableness within which a
municipality's exercise of discretion will not be interfered with or upset by the judiciary." 128
In this jurisdiction, pursuant to Section 16 of the LGC and in the proper exercise of its corporate powers under Section 22 of the
same, the Sangguniang Panlungsod of Quezon City, like other local legislative bodies, is empowered to enact ordinances, approve
resolutions, and appropriate funds for the genera l welfare of the city and its inhabitants. 129Section 16 of the LGC provides:

SECTION 16. General Welfare . – Every local government unit shall exercise the powers expressly granted, those necessarily implied
therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective governance, and those which are
essential to the promotion of the general welfare. Within their respective territorial jurisdictions, local government units shall
ensure and support, among other things, the preservation and enrichment of culture, promote health and safety, enhance the right
of the people to a balanced ecology, encourage and support the development of appropriate and self-reliant scientific and
technological capabilities, improve public morals, enhance economic prosperity and social justice, promote full employment among
their residents, maintain peace and order, and preserve the comfort and convenience of their inhabitants.

The general welfare clause is the delegation in statutory form of the police power of the State to LGUs. 130 The provisions related
thereto are liberally interpreted to give more powers to LGUs in accelerating economic development and upgrading the quality of
life for the people in the community.131 Wide discretion is vested on the legislative authority to determine not only what the
interests of the public require but also what measures are necessary for the protection of such interests since the Sanggunian is in
the best position to determine the needs of its constituents. 132

One of the operative principles of decentralization is that, subject to the provisions of the LGC and national policies, the LGUs shall
share with the national government the responsibility in the management and maintenance of ecological balance within their
territorial jurisdiction.133 In this regard, cities are allowed to exercise such other powers and discharge such other functions and
responsibilities as are necessary, appropriate, or incidental to efficient and effective provision of the basic services and facilities
which include, among others, solid waste disposal system or environmental management system and services or facilities related to
general hygiene and sanitation.134 R.A. No. 9003, or the Ecological Solid Waste Management Act of 2000, 135 affirms this authority as
it expresses that the LGUs shall be primarily responsible for the implementation and enforcement of its provisions within their
respective jurisdictions while establishing a cooperative effort among the national government, other local government units, non-
government organizations, and the private sector.136

Necessarily, LGUs are statutorily sanctioned to impose and collect such reasonable fees and charges for services
rendered.137 "Charges" refer to pecuniary liability, as rents or fees against persons or property, while "Fee" means a charge fixed by
law or ordinance for the regulation or inspection of a business or activity. 138

The fee imposed for garbage collections under Ordinance No. SP-2235 is a charge fixed for the regulation of an activity. The basis for
this could be discerned from the foreword of said Ordinance, to wit:

WHEREAS, Quezon City being the largest and premiere city in the Philippines in terms of population and urban geographical areas,
apart from being competent and efficient in the delivery of public service, apparently requires a big budgetary allocation in order to
address the problems relative and connected to the prompt and efficient delivery of basic services such as the effective system of
waste management, public information programs on proper garb age and proper waste disposal, including the imposition of waste
regulatory measures;

WHEREAS, to help augment the funds to be spent for the city’s waste management system, the City Government through the
Sangguniang Panlungsod deems it necessary to impose a schedule of reasonable fees or charges for the garbage collection services
for residential (domestic household) that it renders to the public.

Certainly, as opposed to petitioner’s opinion, the garbage fee is not a tax. In Smart Communications, Inc. v. Municipality of Malvar,
Batangas ,139the Court had the occasion to distinguish these two concepts:

In Progressive Development Corporation v. Quezon City, the Court declared that "if the generating of revenue is the primary purpose
and regulation is merely incidental, the imposition is a tax; but if regulation is the primary purpose, the fact that incidentally revenue
is also obtained does not make the imposition a tax."

In Victorias Milling Co., Inc. v. Municipality of Victorias, the Court reiterated that the purpose and effect of the imposition determine
whether it is a tax or a fee, and that the lack of any standards for such imposition gives the presumption that the same is a tax.

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.1awp++i1 The determining factors are the purpose and effect of the imposition as may be apparent from
the provisions of the ordinance. Thus, "[w]hen no police inspection, supervision, or regulation is provided, nor any standard set for
the applicant 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 prescribed 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."

In Georgia, U.S.A., assessments for garbage collection services have been consistently treated as a fee and not a tax. 140

In another U.S. case,141 the garbage fee was considered as a "service charge" rather than a tax as it was actually a fee for a service
given by the city which had previously been provided at no cost to its citizens.

Hence, not being a tax, the contention that the garbage fee under Ordinance No. SP-2235 violates the rule on double
taxation142 must necessarily fail.

Nonetheless, although a special charge, tax, or assessment may be imposed by a municipal corporation, it must be reasonably
commensurate to the cost of providing the garbage service. 143 To pass judicial scrutiny, a regulatory fee must not produce revenue
in excess of the cost of the regulation because such fee will be construed as an illegal tax when the revenue generated by the
regulation exceeds the cost of the regulation.144

Petitioner argues that the Quezon City Government already collects garbage fee under Section 47 of R.A. No. 9003, which authorizes
LGUs to impose fees in amounts sufficient to pay the costs of preparing, adopting, and implementing a solid waste management
plan, and that it has access to the SWM Fund under Section 46 of the same law. Moreover, Ordinance No. S-2235 is inconsistent
with R.A. No. 9003, because the ordinance emphasizes the collection and payment of garbage fee with no concern for segregation,
composting and recycling of wastes. It also skips the mandate of the law calling for the active involvement of the barangay in the
collection, segregation, and recycling of garbage.

We now turn to the pertinent provisions of R.A. No. 9003.

Under R.A. No. 9003, it is the declared policy of the State to adopt a systematic, comprehensive and ecological solid waste
management program which shall, among others, ensure the proper segregation, collection, transport, storage, treatment and
disposal of solid waste through the formulation and adoption of the best environmental practices in ecological waste
management.145 The law provides that segregation and collection of solid waste shall be conducted at the barangay level, specifically
for biodegradable, compostable and reusable wastes, while the collection of non-recyclable materials and special wastes shall be the
responsibility of the municipality or city.146 Mandatory segregation of solid wastes shall primarily be conducted at the source, to
include household, institutional, industrial, commercial and agricultural sources. 147 Segregation at source refers to a solid waste
management practice of separating, at the point of origin, different materials found in soli d waste in order to promote recycling and
re-use of resources and to reduce the volume of waste for collection and disposal. 148 Based on Rule XVII of the Department of
Environment and Natural Resources (DENR) Administrative Order No. 2001-34, Series of 2001,149 which is the Implementing Rules
and Regulations ( IRR ) of R.A. No. 9003, barangays shall be responsible for the collection, segregation, and recycling of
biodegradable, recyclable , compostable and reusable wastes.150

For the purpose, a Materials Recovery Facility (MRF), which shall receive biodegradable wastes for composting and mixed non-
biodegradable wastes for final segregation, re-use and recycling, is to be established in every barangay or cluster of barangays. 151

According to R.A. 9003, an LGU, through its local solid waste management board, is mandated by law to prepare a 10-year solid
waste management plan consistent with the National Solid Waste Management Framework. 152 The plan shall be for the re-use,
recycling and composting of wastes generated in its jurisdiction; ensure the efficient management of solid waste generated within
its jurisdiction; and place primary emphasis on implementation of all feasible re-use, recycling, and composting programs while
identifying the amount of landfill and transformation capacity that will be needed for solid waste which cannot be re-used, recycled,
or composted.153 One of the components of the so lid waste management plan is source reduction:

(e) Source reduction – The source reduction component shall include a program and implementation schedule which shows the
methods by which the LGU will, in combination with the recycling and composting components, reduce a sufficient amount of solid
waste disposed of in accordance with the diversion requirements of Section 20.

The source reduction component shall describe the following:

 (1) strategies in reducing the volume of solid waste generated at source;

(2) measures for implementing such strategies and the resources necessary to carry out such activities;

(3) other appropriate waste reduction technologies that may also be considered, provide d that such technologies conform
with the standards set pursuant to this Act;

(4) the types of wastes to be reduced pursuant to Section 15 of this Act;

(5) the methods that the LGU will use to determine the categories of solid wastes to be diverted from disposal at a disposal
facility through re-use , recycling and composting; and

(6) new facilities and of expansion of existing facilities which will be needed to implement re-use, recycling and composting.

The LGU source reduction component shall include the evaluation and identification of rate structures and fees for the purpose of
reducing the amount of waste generated, and other source reduction strategies, including but not limited to, program s and
economic incentives provided under Sec. 45 of this Act to reduce the use of non-recyclable materials, replace disposable materials
and products with reusable materials and products, reduce packaging, and increase the efficiency of the use of paper, cardboard,
glass, metal, and other materials. The waste reduction activities of the community shall al so take into account, among others, local
capability, economic viability, technical requirements, social concerns, disposition of residual waste and environmental impact:
Provided , That, projection of future facilities needed and estimated cost shall be incorporated in the plan. x x x 154

The solid waste management pl an shall also include an implementation schedule for solid waste diversion:

SEC. 20. Establishing Mandatory Solid Waste Diversion. – Each LGU plan shall include an implementation schedule which shows that
within five (5) years after the effectivity of this Act, the LGU shall divert at least 25% of all solid waste from waste disposal facilities
through re-use, recycling, and composting activities and other resource recovery activities: Provided , That the waste diversion goals
shall be increased every three (3) years thereafter: Provided , further, That nothing in this Section prohibits a local government unit
from implementing re-use, recycling, and composting activities designed to exceed the goal.

The baseline for the twenty-five percent (25%) shall be derived from the waste characterization result155 that each LGU is mandated
to undertake.156In accordance with Section 46 of R.A. No. 9003, the LGUs are entitled to avail of the SWM Fund on the basis of their
approved solid waste management plan. Aside from this, they may also impose SWM Fees under Section 47 of the law, which states:

SEC. 47. Authority to Collect Solid Waste Management Fees – The local government unit shall impose fees in amounts sufficient to
pay the costs of preparing, adopting, and implementing a solid waste management plan prepared pursuant to this Act. The fees shall
be based on the following minimum factors:

(a) types of solid waste;

(b) amount/volume of waste; and

(c) distance of the transfer station to the waste management facility.

The fees shall be used to pay the actual costs incurred by the LGU in collecting the local fees. In determining the amounts of the
fees, an LGU shall include only those costs directly related to the adoption and implementation of the plan and the setting and
collection of the local fees.

Rule XVII of the IRR of R.A. No. 9003 sets forth the details:

Section 1. Power to Collect Solid Waste Management Fees . – The Local SWM Board/Local SWM Cluster Board shall impose fees on
the SWM services provided for by the LGU and/or any authorized organization or unit. In determining the amounts of the fees, a
Local SWM Board/Local SWM Cluster Board shall include only those costs directly related to the adoption and implementation of the
SWM Plan and the setting and collection of the local fees. This power to impose fees may be ceded to the private sector and civil
society groups which have been duly accredited by the Local SWM Boar d/Local SWM Cluster Board; provided, the SWM fees shall
be covered by a Contract or Memorandum of Agreement between the respective boa rd and the private sector or civil society group.
The fees shall pay for the costs of preparing, adopting and implementing a SWM Plan prepared pursuant to the Act. Further, the fees
shall also be used to pay the actual costs incurred in collecting the local fees and for project sustainability.

Section 2. Basis of SWM Service Fees

Reasonable SWM service fees shall be computed based on but not limited to the following minimum factors:

a) Types of solid waste to include special waste

b) amount/volume of waste

c) distance of the transfer station to the waste management facility

d) capacity or type of LGU constituency

e) cost of construction

f) cost of management

g) type of technology

Section 3. Collection of Fees. – Fees may be collected corresponding to the following levels:

a) Barangay – The Barangay may impose fees for collection and segregation of biodegradable, compostable and reusable
wastes from households, commerce, other sources of domestic wastes, and for the use of Barangay MRFs. The
computation of the fees shall be established by the respective SWM boards. The manner of collection of the fees shall be
dependent on the style of administration of respective Barangay Councils. However, all transactions shall follow the
Commission on Audit rules on collection of fees.

b) Municipality – The municipal and city councils may impose fees on the barangay MRFs for the collection and transport of
non-recyclable and special wastes and for the disposal of these into the sanitary landfill. The level and procedure for
exacting fees shall be defined by the Local SWM Board/Local SWM Cluster Board and supported by LGU ordinances;
however, payments shall be consistent with the accounting system of government.

c) Private Sector/Civil Society Group – On the basis of the stipulations of contract or Memorandum of Agreement, the
private sector or civil society group shall impose fees for collection, transport and tipping in their SLFs. Receipts and invoices
shall be issued to the paying public or to the government.

From the afore-quoted provisions, it is clear that the authority of a municipality or city to impose fees is limited to the collection and
transport of non-recyclable and special wastes and for the disposal of these into the sanitary landfill. Barangays, on the other hand,
have the authority to impose fees for the collection and segregation of biodegradable, compostable and reusable wastes from
households, commerce, other sources of domestic wastes, and for the use of barangay MRFs. This is but consistent with

Section 10 of R.A. No. 9003 directing that segregation and collection of biodegradable, compostable and reusable wastes shall be
conducted at the barangay level, while the collection of non-recyclable materials and special wastes shall be the responsibility of the
municipality or city.

In this case, the alleged bases of Ordinance No. S-2235 in imposing the garbage fee is the volume of waste currently generated by
each person in Quezon City, which purportedly stands at 0.66 kilogram per day, and the increasing trend of waste generation for the
past three years.157 Respondents

did not elaborate any further. The figure presented does not reflect the specific types of wastes generated – whether residential,
market, commercial, industrial, construction/demolition, street waste, agricultural, agro-industrial, institutional, etc. It is reasonable,
therefore, for the Court to presume that such amount pertains to the totality of wastes, without any distinction, generated by
Quezon City constituents. To reiterate, however, the authority of a municipality or city to impose fees extends only to those related
to the collection and transport of non-recyclable and special wastes.
Granting, for the sake of argument, that the 0.66 kilogram of solid waste per day refers only to non-recyclable and special wastes,
still, We cannot sustain the validity of Ordinance No. S-2235. It violates the equal protection clause of the Constitution and the
provisions of the LGC that an ordinance must be equitable and based as far as practicable on the taxpayer’s ability to pay, and not
unjust, excessive, oppressive, confiscatory.158

In the subject ordinance, the rates of the imposable fee depend on land or floor area and whether the payee is an occupant of a lot,
condominium, social housing project or apartment. For easy reference, the relevant provision is again quoted below:

On all domestic households in Quezon City;

LAND AREA IMPOSABLE FEE

Less than 200 sq. m. PHP 100.00
201 sq. m. – 500 sq. m. PHP 200.00
501 sq. m. – 1,000 sq. m. PHP 300.00
1,001 sq. m. – 1,500 sq. m. PHP 400.00
1,501 sq. m. – 2,000 sq. m. or more PHP 500.00

On all condominium unit and socialized housing projects/units in Quezon City;

FLOOR AREA IMPOSABLE FEE

Less than 40 sq. m. PHP 25.00
41 sq. m. – 60 sq. m. PHP 50.00
61 sq. m. – 100 sq. m. PHP 75.00
101 sq. m. – 150 sq. m. PH₱100.00
151 sq. m. – 200 sq. [m.] or more PHP 200.00

On high-rise Condominium Units

a) High-rise Condominium – The Homeowners Association of high rise condominiums shall pay the annual garbage fee on
the total size of the entire condominium and socialized Housing Unit and an additional garbage fee shall be collected based
on area occupied for every unit already so ld or being amortized.

b) High-rise apartment units – Owners of high-rise apartment units shall pay the annual garbage fee on the total lot size of
the entire apartment and an additional garbage fee based on the schedule prescribed herein for every unit occupied.

For the purpose of garbage collection, there is, in fact, no substantial distinction between an occupant of a lot, on one hand, and an
occupant of a unit in a condominium, socialized housing project or apartment, on the other hand. Most likely, garbage output
produced by these types of occupants is uniform and does not vary to a large degree; thus, a similar schedule of fee is both just and
equitable.159

The rates being charged by the ordinance are unjust and inequitable: a resident of a 200 sq. m. unit in a condominium or socialized
housing project has to pay twice the amount than a resident of a lot similar in size; unlike unit occupants, all occupants of a lot with
an area of 200 sq. m. and less have to pay a fixed rate of Php100.00; and the same amount of garbage fee is imposed regardless of
whether the resident is from a condominium or from a socialized housing project.

Indeed, the classifications under Ordinance No. S-2235 are not germane to its declared purpose of "promoting shared responsibility
with the residents to attack their common mindless attitude in over-consuming the present resources and in generating
waste."160 Instead of simplistically categorizing the payee into land or floor occupant of a lot or unit of a condominium, socialized
housing project or apartment, respondent City Council should have considered factors that could truly measure the amount of
wastes generated and the appropriate fee for its collection. Factors include, among others, household age and size, accessibility to
waste collection, population density of the barangay or district, capacity to pay, and actual occupancy of the property. R.A. No. 9003
may also be looked into for guidance. Under said law, WM service fees may be computed based on minimum factors such as type s
of solid waste to include special waste, amount/volume of waste, distance of the transfer station to the waste management facility,
capacity or type of LGU constituency, cost of construction, cost of management, and type of technology. With respect to utility rates
set by municipalities, a municipality has the right to classify consumers under reasonable classifications based upon factors such as
the cost of service, the purpose for which the service or the product is received, the quantity or the amount received, the different
character of the service furnished, the time of its use or any other matter which presents a substantial difference as a ground of
distinction.161[A] lack of uniformity in the rate charged is not necessarily unlawful discrimination. The establishment of classifications
and the charging of different rates for the several classes is not unreasonable and does not violate the requirements of equality and
uniformity. Discrimination to be unlawful must draw an unfair line or strike an unfair balance between those in like circumstances
having equal rights and privileges. Discrimination with respect to rates charged does not vitiate unless it is arbitrary and without a
reasonable fact basis or justification.162

On top of an unreasonable classification, the penalty clause of Ordinance No. SP-2235, which states:

SECTION 3. Penalty Clause – A penalty of 25% of the garbage fee due plus an interest of 2% per month or a fraction thereof (interest)
shall be charged against a household owner who refuses to pay the garbage fee herein imposed. lacks the limitation required by
Section 168 of the LGC, which provides:

SECTION 168. Surcharges and Penalties on Unpaid Taxes, Fees, or Charges. – The sanggunian may impose a surcharge not exceeding
twenty-five (25%) of the amount of taxes, fees or charges not paid on time and an interest at the rate not exceeding two percent
(2%) per month of the unpaid taxes, fees or charges including surcharges, until such amount is fully paid but in no case shall the total
interest on the unpaid amount or portion thereof exceed thirty-six (36) months. (Emphasis supplied)

Finally, on the issue of publication of the two challenged ordinances.

Petitioner argues that the garbage fee was collected even if the required publication of its approval had not yet elapsed. He notes
that he paid his realty tax on January 7, 2014 which already included the garbage fee. Respondents counter that if the law provides
for its own effectivity, publication in the Official Gazette is not necessary so long as it is not penal in nature. Allegedly, Ordinance No.
SP-2095 took effect after its publication while Ordinance No. SP-2235 became effective after its approval on December 26, 2013.

The pertinent provisions of the LGC state:

SECTION 59. Effectivity of Ordinances or Resolutions. – (a) Unless otherwise stated in the ordinance or the resolution approving the
local development plan and public investment program, the same shall take effect after ten (10) days from the date a copy thereof is
posted in a bulletin board at the entrance of the provincial capital or city, municipal, or barangay hall, as the case may be, and in at
least two (2) other conspicuous places in the local government unit concerned.

(b) The secretary to the sanggunian concerned shall cause the posting of an ordinance or resolution in the bulletin board at
the entrance of the provincial capital and the city, municipal, or barangay hall in at least two

(2) conspicuous places in the local government unit concerned not later than five (5) days after approval thereof.

The text of the ordinance or resolution shall be disseminated and posted in Filipino or English and in the language or dialect
understood by the majority of the people in the local government unit concerned, and the secretary to the sanggunian shall
record such fact in a book kept for the purpose, stating the dates of approval and posting.

(c) The gist of all ordinances with penal sanctions shall be published in a newspaper of general circulation within the
province where the local legislative body concerned belongs. In the absence of any newspaper of general circulation within
the province, posting of such ordinances shall be made in all municipalities and cities of the province where the sanggunian
of origin is situated.

(d) In the case of highly urbanized and independent component cities, the main features of the ordinance or resolution duly
enacted or adopted shall, in addition to being posted, be published once in a local newspaper of general circulation within
the city: Provided, That in the absence thereof the ordinance or resolution shall be published in any newspaper of general
circulation.
SECTION 188. Publication of Tax Ordinances and Revenue Measures. – Within ten (10) days after their approval, certified true copies
of all provincial, city, and municipal tax ordinances or revenue measures shall be published in full for three (3) consecutive days in a
newspaper of local circulation: Provided, however, That in provinces, cities and municipalities where there are no newspapers of
local circulation, the same may be posted in at least two (2) conspicuous and publicly accessible places. (Emphasis supplied)

On October 17, 2011, respondent Quezon City Council enacted Ordinance No. SP-2095, which provides that it would take effect after
its publication in a newspaper of general circulation.163 On the other hand, Ordinance No. SP-2235, which was passed by the City
Council on December 16, 2013, provides that it would be effective upon its approval.164

Ten (10) days after its enactment, or on December 26, 2013, respondent City Mayor approved the same. 165

The case records are bereft of any evidence to prove petitioner’s negative allegation that respondents did not comply with the
posting and publication requirements of the law. Thus, We are constrained not to give credit to his unsupported claim.

WHEREFORE, the petition is PARTIALLY GRANTED. The constitutionality and legality of Ordinance No. SP-2095, S-2011, or the
"Socialized Housing Tax of Quezon City," is· SUSTAINED for being consistent ·with Section·43 of Republic Act No. ·7279. On the other
hand, Ordinance No. SP-2235, S-2013, which collects an annual garbage fee on all domestic households in Quezon City, is hereby
declared as UNCONSTITUTIONAL AND ILLEGAL. Respondents are DIRECTED to REFUND with reasonable dispatch the sums of money
collected relative to its enforcement. The temporary restraining order issued by the Court on February 5, 2014 is LIFTED with respect
to Ordinance No. SP-2095. In contrast, respondents are PERMANENTLY ENJOINED from taking any further action to enforce
Ordinance No. SP. 2235.

SO ORDERED.

G.R. No. 181845 August 4, 2009

THE CITY OF MANILA, LIBERTY M. TOLEDO, in her capacity as THE TREASURER OF MANILA and JOSEPH SANTIAGO, in his capacity
as the CHIEF OF THE LICENSE DIVISION OF CITY OF MANILA, petitioners,
vs.
COCA-COLA BOTTLERS PHILIPPINES, INC., Respondent.

DECISION

CHICO-NAZARIO, J.:

This case is a Petition for Review on Certiorari under Rule 45 of the Revised Rules of Civil Procedure seeking to review and reverse
the Decision1 dated 18 January 2008 and Resolution2 dated 18 February 2008 of the Court of Tax Appeals en banc (CTA en banc) in
C.T.A. EB No. 307. In its assailed Decision, the CTA en banc dismissed the Petition for Review of herein petitioners City of Manila,
Liberty M. Toledo (Toledo), and Joseph Santiago (Santiago); and affirmed the Resolutions dated 24 May 2007, 3 8 June 2007,4 and 26
July 2007,5 of the CTA First Division in C.T.A. AC No. 31, which, in turn, dismissed the Petition for Review of petitioners in said case
for being filed out of time. In its questioned Resolution, the CTA en banc denied the Motion for Reconsideration of petitioners.

Petitioner City of Manila is a public corporation empowered to collect and assess business taxes, revenue fees, and permit fees,
through its officers, petitioners Toledo and Santiago, in their capacities as City Treasurer and Chief of the Licensing Division,
respectively. On the other hand, respondent Coca-Cola Bottlers Philippines, Inc. is a corporation engaged in the business of
manufacturing and selling beverages, and which maintains a sales office in the City of Manila.

The case stemmed from the following facts:

Prior to 25 February 2000, respondent had been paying the City of Manila local business tax only under Section 14 of Tax Ordinance
No. 7794,6 being expressly exempted from the business tax under Section 21 of the same tax ordinance. Pertinent provisions of Tax
Ordinance No. 7794 provide:
Section 14. – Tax on Manufacturers, Assemblers and Other Processors. – There is hereby imposed a graduated tax on manufacturers,
assemblers, repackers, processors, brewers, distillers, rectifiers, and compounders of liquors, distilled spirits, and wines or
manufacturers of any article of commerce of whatever kind or nature, in accordance with any of the following schedule:

xxxx

over ₱6,500,000.00 up to
₱25,000,000.00 - - - - - - - - - - - - - - - - - - - -- ₱36,000.00 plus 50% of 1%
in excess of ₱6,500,000.00

xxxx

Section 21. – Tax on Businesses Subject to the Excise, Value-Added or Percentage Taxes under the NIRC. – On any of the following
businesses and articles of commerce subject to excise, value-added or percentage taxes under the National Internal Revenue Code
hereinafter referred to as NIRC, as amended, a tax of FIFTY PERCENT (50%) of ONE PERCENT (1%) per annum on the gross sales or
receipts of the preceding calendar year is hereby imposed:

(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 for in Sections 100 to 103 of the NIRC as administered and determined by the Bureau of Internal Revenue
pursuant to the pertinent provisions of the said Code.

xxxx

(D) Excisable goods subject to VAT

(1) Distilled spirits

(2) Wines

xxxx

(8) Coal and coke

(9) Fermented liquor, brewers’ wholesale price, excluding the ad valorem tax

xxxx

PROVIDED, that all registered businesses in the City of Manila that are already paying the aforementioned tax shall be exempted
from payment thereof.

Petitioner City of Manila subsequently approved on 25 February 2000, Tax Ordinance No. 7988, 7 amending certain sections of Tax
Ordinance No. 7794, particularly: (1) Section 14, by increasing the tax rates applicable to certain establishments operating within the
territorial jurisdiction of the City of Manila; and (2) Section 21, by deleting the proviso found therein, which stated "that all
registered businesses in the City of Manila that are already paying the aforementioned tax shall be exempted from payment
thereof." Petitioner City of Manila approved only after a year, on 22 February 2001, another tax ordinance, Tax Ordinance No. 8011,
amending Tax Ordinance No. 7988.

Tax Ordinances No. 7988 and No. 8011 were later declared by the Court null and void in Coca-Cola Bottlers Philippines, Inc. v. City of
Manila8 (Coca-Cola case) for the following reasons: (1) Tax Ordinance No. 7988 was enacted in contravention of the provisions of the
Local Government Code (LGC) of 1991 and its implementing rules and regulations; and (2) Tax Ordinance No. 8011 could not cure
the defects of Tax Ordinance No. 7988, which did not legally exist.

However, before the Court could declare Tax Ordinance No. 7988 and Tax Ordinance No. 8011 null and void, petitioner City of
Manila assessed respondent on the basis of Section 21 of Tax Ordinance No. 7794, as amended by the aforementioned tax
ordinances, for deficiency local business taxes, penalties, and interest, in the total amount of ₱18,583,932.04, for the third and
fourth quarters of the year 2000. Respondent filed a protest with petitioner Toledo on the ground that the said assessment
amounted to double taxation, as respondent was taxed twice, i.e., under Sections 14 and 21 of Tax Ordinance No. 7794, as amended
by Tax Ordinances No. 7988 and No. 8011. Petitioner Toledo did not respond to the protest of respondent.

Consequently, respondent filed with the Regional Trial Court (RTC) of Manila, Branch 47, an action for the cancellation of the
assessment against respondent for business taxes, which was docketed as Civil Case No. 03-107088.

On 14 July 2006, the RTC rendered a Decision9 dismissing Civil Case No. 03-107088. The RTC ruled that the business taxes imposed
upon the respondent under Sections 14 and 21 of Tax Ordinance No. 7988, as amended, were not of the same kind or character;
therefore, there was no double taxation. The RTC, though, in an Order 10 dated 16 November 2006, granted the Motion for
Reconsideration of respondent, decreed the cancellation and withdrawal of the assessment against the latter, and barred
petitioners from further imposing/assessing local business taxes against respondent under Section 21 of Tax Ordinance No. 7794, as
amended by Tax Ordinance No. 7988 and Tax Ordinance No. 8011. The 16 November 2006 Decision of the RTC was in conformity
with the ruling of this Court in the Coca-Cola case, in which Tax Ordinance No. 7988 and Tax Ordinance No. 8011 were declared null
and void. The Motion for Reconsideration of petitioners was denied by the RTC in an Order11 dated 4 April 2007. Petitioners received
a copy of the 4 April 2007 Order of the RTC, denying their Motion for Reconsideration of the 16 November 2006 Order of the same
court, on 20 April 2007.

On 4 May 2007, petitioners filed with the CTA a Motion for Extension of Time to File Petition for Review, praying for a 15-day
extension or until 20 May 2007 within which to file their Petition. The Motion for Extension of petitioners was docketed as C.T.A. AC
No. 31, raffled to the CTA First Division.

Again, on 18 May 2007, petitioners filed, through registered mail, a Second Motion for Extension of Time to File a Petition for
Review, praying for another 10-day extension, or until 30 May 2007, within which to file their Petition.

On 24 May 2007, however, the CTA First Division already issued a Resolution dismissing C.T.A. AC No. 31 for failure of petitioners to
timely file their Petition for Review on 20 May 2007.

Unaware of the 24 May 2007 Resolution of the CTA First Division, petitioners filed their Petition for Review therewith on 30 May
2007 via registered mail. On 8 June 2007, the CTA First Division issued another Resolution, reiterating the dismissal of the Petition
for Review of petitioners.

Petitioners moved for the reconsideration of the foregoing Resolutions dated 24 May 2007 and 8 June 2007, but their motion was
denied by the CTA First Division in a Resolution dated 26 July 2007. The CTA First Division reasoned that the Petition for Review of
petitioners was not only filed out of time -- it also failed to comply with the provisions of Section 4, Rule 5; and Sections 2 and 3, Rule
6, of the Revised Rules of the CTA.

Petitioners thereafter filed a Petition for Review before the CTA en banc, docketed as C.T.A. EB No. 307, arguing that the CTA First
Division erred in dismissing their Petition for Review in C.T.A. AC No. 31 for being filed out of time, without considering the merits of
their Petition.

The CTA en banc rendered its Decision on 18 January 2008, dismissing the Petition for Review of petitioners and affirming the
Resolutions dated 24 May 2007, 8 June 2007, and 26 July 2007 of the CTA First Division. The CTA en banc similarly denied the Motion
for Reconsideration of petitioners in a Resolution dated 18 February 2008.

Hence, the present Petition, where petitioners raise the following issues:

I. WHETHER OR NOT PETITIONERS SUBSTANTIALLY COMPLIED WITH THE REGLEMENTARY PERIOD TO TIMELY APPEAL THE
CASE FOR REVIEW BEFORE THE [CTA DIVISION].

II. WHETHER OR NOT THE RULING OF THIS COURT IN THE EARLIER [COCA-COLA CASE] IS DOCTRINAL AND CONTROLLING IN
THE INSTANT CASE.

III. WHETHER OR NOT PETITIONER CITY OF MANILA CAN STILL ASSESS TAXES UNDER [SECTIONS] 14 AND 21 OF [TAX
ORDINANCE NO. 7794, AS AMENDED].
 IV. WHETHER OR NOT THE ENFORCEMENT OF [SECTION] 21 OF THE [TAX ORDINANCE NO. 7794, AS AMENDED]
CONSTITUTES DOUBLE TAXATION.

Petitioners assert that Section 1, Rule 712 of the Revised Rules of the CTA refers to certain provisions of the Rules of Court, such as
Rule 42 of the latter, and makes them applicable to the tax court. Petitioners then cannot be faulted in relying on the provisions of
Section 1, Rule 4213 of the Rules of Court as regards the period for filing a Petition for Review with the CTA in division. Section 1, Rule
42 of the Rules of Court provides for a 15-day period, reckoned from receipt of the adverse decision of the trial court, within which
to file a Petition for Review with the Court of Appeals. The same rule allows an additional 15-day period within which to file such a
Petition; and, only for the most compelling reasons, another extension period not to exceed 15 days. Petitioners received on 20 April
2007 a copy of the 4 April 2007 Order of the RTC, denying their Motion for Reconsideration of the 16 November 2006 Order of the
same court. On 4 May 2007, believing that they only had 15 days to file a Petition for Review with the CTA in division, petitioners
moved for a 15-day extension, or until 20 May 2007, within which to file said Petition. Prior to the lapse of their first extension
period, or on 18 May 2007, petitioners again moved for a 10-day extension, or until 30 May 2007, within which to file their Petition
for Review. Thus, when petitioners filed their Petition for Review with the CTA First Division on 30 May 2007, the same was filed well
within the reglementary period for doing so.

Petitioners argue in the alternative that even assuming that Section 3(a), Rule 8 14 of the Revised Rules of the CTA governs the period
for filing a Petition for Review with the CTA in division, still, their Petition for Review was filed within the reglementary period.
Petitioners call attention to the fact that prior to the lapse of the 30-day period for filing a Petition for Review under Section 3(a),
Rule 8 of the Revised Rules of the CTA, they had already moved for a 10-day extension, or until 30 May 2007, within which to file
their Petition. Petitioners claim that there was sufficient justification in equity for the grant of the 10-day extension they requested,
as the primordial consideration should be the substantive, and not the procedural, aspect of the case. Moreover, Section 3(a), Rule 8
of the Revised Rules of the CTA, is silent as to whether the 30-day period for filing a Petition for Review with the CTA in division may
be extended or not.

Petitioners also contend that the Coca-Cola case is not determinative of the issues in the present case because the issue of nullity of
Tax Ordinance No. 7988 and Tax Ordinance No. 8011 is not the lis mota herein. The Coca-Cola case is not doctrinal and cannot be
considered as the law of the case.

Petitioners further insist that notwithstanding the declaration of nullity of Tax Ordinance No. 7988 and Tax Ordinance No. 8011, Tax
Ordinance No. 7794 remains a valid piece of local legislation. The nullity of Tax Ordinance No. 7988 and Tax Ordinance No. 8011
does not effectively bar petitioners from imposing local business taxes upon respondent under Sections 14 and 21 of Tax Ordinance
No. 7794, as they were read prior to their being amended by the foregoing null and void tax ordinances.

Petitioners finally maintain that imposing upon respondent local business taxes under both Sections 14 and 21 of Tax Ordinance No.
7794 does not constitute direct double taxation. Section 143 of the LGC gives municipal, as well as city governments, the power to
impose business taxes, to wit:

SECTION 143. Tax on Business. – The municipality may impose taxes on the following businesses:

(a) On manufacturers, assemblers, repackers, processors, brewers, distillers, rectifiers, and compounders of liquors, distilled
spirits, and wines or manufacturers of any article of commerce of whatever kind or nature, in accordance with the following
schedule:

xxxx

(b) On wholesalers, distributors, or dealers in any article of commerce of whatever kind or nature in accordance with the
following schedule:

xxxx

(c) On exporters, and on manufacturers, millers, producers, wholesalers, distributors, dealers or retailers of essential
commodities enumerated hereunder at a rate not exceeding one-half (1/2) of the rates prescribed under subsections (a),
(b) and (d) of this Section:

xxxx
 Provided, however, That barangays shall have the exclusive power to levy taxes, as provided under Section 152 hereof, on
gross sales or receipts of the preceding calendar year of Fifty thousand pesos (₱50,000.00) or less, in the case of cities, and
Thirty thousand pesos (₱30,000) or less, in the case of municipalities.

(e) On contractors and other independent contractors, in accordance with the following schedule:

xxxx

(f) On banks and other financial institutions, at a rate not exceeding fifty percent (50%) of one percent (1%) on the gross
receipts of the preceding calendar year derived from interest, commissions and discounts from lending activities, income
from financial leasing, dividends, rentals on property and profit from exchange or sale of property, insurance premium.

(g) On peddlers engaged in the sale of any merchandise or article of commerce, at a rate not exceeding Fifty pesos (₱50.00)
per peddler annually.

(h) On any business, not otherwise specified in the preceding paragraphs, which the sanggunian concerned may deem
proper to tax: Provided, That on any business subject to the excise, value-added or percentage tax under the National
Internal Revenue Code, as amended, the rate of tax shall not exceed two percent (2%) of gross sales or receipts of the
preceding calendar year.

Section 14 of Tax Ordinance No. 7794 imposes local business tax on manufacturers, etc. of liquors, distilled spirits, wines, and any
other article of commerce, pursuant to Section 143(a) of the LGC. On the other hand, the local business tax under Section 21 of Tax
Ordinance No. 7794 is imposed upon persons selling goods and services in the course of trade or business, and those importing
goods for business or otherwise, who, pursuant to Section 143(h) of the LGC, are subject to excise tax, value-added tax (VAT), or
percentage tax under the National Internal Revenue Code (NIRC). Thus, there can be no double taxation when respondent is being
taxed under both Sections 14 and 21 of Tax Ordinance No. 7794, for under the first, it is being taxed as a manufacturer; while under
the second, it is being taxed as a person selling goods in the course of trade or business subject to excise, VAT, or percentage tax.

The Court first addresses the issue raised by petitioners concerning the period within which to file with the CTA a Petition for Review
from an adverse decision or ruling of the RTC.

The period to appeal the decision or ruling of the RTC to the CTA via a Petition for Review is specifically governed by Section 11 of
Republic Act No. 9282,15 and Section 3(a), Rule 8 of the Revised Rules of the CTA.

Section 11 of Republic Act No. 9282 provides:

SEC. 11. Who May Appeal; Mode of Appeal; Effect of Appeal. – Any party adversely affected by a decision, ruling or inaction of the
Commissioner of Internal Revenue, the Commissioner of Customs, the Secretary of Finance, the Secretary of Trade and Industry or
the Secretary of Agriculture or the Central Board of Assessment Appeals or the Regional Trial Courts may file an Appeal with the CTA
within thirty (30) days after the receipt of such decision or ruling or after the expiration of the period fixed by law for action as
referred to in Section 7(a)(2) herein.

Appeal shall be made by filing a petition for review under a procedure analogous to that provided for under Rule 42 of the 1997
Rules of Civil Procedure with the CTA within thirty (30) days from the receipt of the decision or ruling or in the case of inaction as
herein provided, from the expiration of the period fixed by law to act thereon. x x x. (Emphasis supplied.)

Section 3(a), Rule 8 of the Revised Rules of the CTA states:

SEC 3. Who may appeal; period to file petition. – (a) A party adversely affected by a decision, ruling or the inaction of the
Commissioner of Internal Revenue on disputed assessments or claims for refund of internal revenue taxes, or by a decision or ruling
of the Commissioner of Customs, the Secretary of Finance, the Secretary of Trade and Industry, the Secretary of Agriculture, or a
Regional Trial Court in the exercise of its original jurisdiction may appeal to the Court by petition for review filed within thirty days
after receipt of a copy of such decision or ruling, or expiration of the period fixed by law for the Commissioner of Internal Revenue to
act on the disputed assessments. x x x. (Emphasis supplied.)
It is crystal clear from the afore-quoted provisions that to appeal an adverse decision or ruling of the RTC to the CTA, the taxpayer
must file a Petition for Review with the CTA within 30 days from receipt of said adverse decision or ruling of the RTC.

It is also true that the same provisions are silent as to whether such 30-day period can be extended or not. However, Section 11 of
Republic Act No. 9282 does state that the Petition for Review shall be filed with the CTA following the procedure analogous to Rule
42 of the Revised Rules of Civil Procedure. Section 1, Rule 4216 of the Revised Rules of Civil Procedure provides that the Petition for
Review of an adverse judgment or final order of the RTC must be filed with the Court of Appeals within: (1) the original 15-day
period from receipt of the judgment or final order to be appealed; (2) an extended period of 15 days from the lapse of the original
period; and (3) only for the most compelling reasons, another extended period not to exceed 15 days from the lapse of the first
extended period.

Following by analogy Section 1, Rule 42 of the Revised Rules of Civil Procedure, the 30-day original period for filing a Petition for
Review with the CTA under Section 11 of Republic Act No. 9282, as implemented by Section 3(a), Rule 8 of the Revised Rules of the
CTA, may be extended for a period of 15 days. No further extension shall be allowed thereafter, except only for the most compelling
reasons, in which case the extended period shall not exceed 15 days.

Even the CTA en banc, in its Decision dated 18 January 2008, recognizes that the 30-day period within which to file the Petition for
Review with the CTA may, indeed, be extended, thus:

Being suppletory to R.A. 9282, the 1997 Rules of Civil Procedure allow an additional period of fifteen (15) days for the movant to file
a Petition for Review, upon Motion, and payment of the full amount of the docket fees. A further extension of fifteen (15) days may
be granted on compelling reasons in accordance with the provision of Section 1, Rule 42 of the 1997 Rules of Civil Procedure x x x.17

In this case, the CTA First Division did indeed err in finding that petitioners failed to file their Petition for Review in C.T.A. AC No. 31
within the reglementary period.

From 20 April 2007, the date petitioners received a copy of the 4 April 2007 Order of the RTC, denying their Motion for
Reconsideration of the 16 November 2006 Order, petitioners had 30 days, or until 20 May 2007, within which to file their Petition
for Review with the CTA. Hence, the Motion for Extension filed by petitioners on 4 May 2007 – grounded on their belief that the
reglementary period for filing their Petition for Review with the CTA was to expire on 5 May 2007, thus, compelling them to seek an
extension of 15 days, or until 20 May 2007, to file said Petition – was unnecessary and superfluous. Even without said Motion for
Extension, petitioners could file their Petition for Review until 20 May 2007, as it was still within the 30-day reglementary period
provided for under Section 11 of Republic Act No. 9282; and implemented by Section 3(a), Rule 8 of the Revised Rules of the CTA.

The Motion for Extension filed by the petitioners on 18 May 2007, prior to the lapse of the 30-day reglementary period on 20 May
2007, in which they prayed for another extended period of 10 days, or until 30 May 2007, to file their Petition for Review was, in
reality, only the first Motion for Extension of petitioners. The CTA First Division should have granted the same, as it was sanctioned
by the rules of procedure. In fact, petitioners were only praying for a 10-day extension, five days less than the 15-day extended
period allowed by the rules. Thus, when petitioners filed via registered mail their Petition for Review in C.T.A. AC No. 31 on 30 May
2007, they were able to comply with the reglementary period for filing such a petition.

Nevertheless, there were other reasons for which the CTA First Division dismissed the Petition for Review of petitioners in C.T.A. AC
No. 31; i.e., petitioners failed to conform to Section 4 of Rule 5, and Section 2 of Rule 6 of the Revised Rules of the CTA. The Court
sustains the CTA First Division in this regard.

Section 4, Rule 5 of the Revised Rules of the CTA requires that:

SEC. 4. Number of copies. – The parties shall file eleven signed copies of every paper for cases before the Court en banc and six
signed copies for cases before a Division of the Court in addition to the signed original copy, except as otherwise directed by the
Court. Papers to be filed in more than one case shall include one additional copy for each additional case. (Emphasis supplied.)

Section 2, Rule 6 of the Revised Rules of the CTA further necessitates that:

SEC. 2. Petition for review; contents. – The petition for review shall contain allegations showing the jurisdiction of the Court, a
concise statement of the complete facts and a summary statement of the issues involved in the case, as well as the reasons relied
upon for the review of the challenged decision. The petition shall be verified and must contain a certification against forum shopping
as provided in Section 3, Rule 46 of the Rules of Court. A clearly legible duplicate original or certified true copy of the decision
appealed from shall be attached to the petition. (Emphasis supplied.)

The aforesaid provisions should be read in conjunction with Section 1, Rule 7 of the Revised Rules of the CTA, which provides:

SECTION 1. Applicability of the Rules of Court on procedure in the Court of Appeals, exception. – The procedure in the Court en banc
or in Divisions in original or in appealed cases shall be the same as those in petitions for review and appeals before the Court of
Appeals pursuant to the applicable provisions of Rules 42, 43, 44, and 46 of the Rules of Court, except as otherwise provided for in
these Rules. (Emphasis supplied.)

As found by the CTA First Division and affirmed by the CTA en banc, the Petition for Review filed by petitioners via registered mail on
30 May 2007 consisted only of one copy and all the attachments thereto, including the Decision dated 14 July 2006; and that the
assailed Orders dated 16 November 2006 and 4 April 2007 of the RTC in Civil Case No. 03-107088 were mere machine copies.
Evidently, petitioners did not comply at all with the requirements set forth under Section 4, Rule 5; or with Section 2, Rule 6 of the
Revised Rules of the CTA. Although the Revised Rules of the CTA do not provide for the consequence of such non-compliance,
Section 3, Rule 42 of the Rules of Court may be applied suppletorily, as allowed by Section 1, Rule 7 of the Revised Rules of the CTA.
Section 3, Rule 42 of the Rules of Court reads:

SEC. 3. Effect of failure to comply with requirements. – The failure of the petitioner to comply with any of the foregoing
requirements regarding the payment of the docket and other lawful fees, the deposit for costs, proof of service of the petition, and
the contents of and the documents which should accompany the petition shall be sufficient ground for the dismissal thereof.
(Emphasis supplied.)

True, petitioners subsequently submitted certified copies of the Decision dated 14 July 2006 and assailed Orders dated 16 November
2006 and 4 April 2007 of the RTC in Civil Case No. 03-107088, but a closer examination of the stamp on said documents reveals that
they were prepared and certified only on 14 August 2007, about two months and a half after the filing of the Petition for Review by
petitioners.

Petitioners never offered an explanation for their non-compliance with Section 4 of Rule 5, and Section 2 of Rule 6 of the Revised
Rules of the CTA. Hence, although the Court had, in previous instances, relaxed the application of rules of procedure, it cannot do so
in this case for lack of any justification.

Even assuming arguendo that the Petition for Review of petitioners in C.T.A. AC No. 31 should have been given due course by the
CTA First Division, it is still dismissible for lack of merit.

Contrary to the assertions of petitioners, the Coca-Cola case is indeed applicable to the instant case. The pivotal issue raised therein
was whether Tax Ordinance No. 7988 and Tax Ordinance No. 8011 were null and void, which this Court resolved in the affirmative.
Tax Ordinance No. 7988 was declared by the Secretary of the Department of Justice (DOJ) as null and void and without legal effect
due to the failure of herein petitioner City of Manila to satisfy the requirement under the law that said ordinance be published for
three consecutive days. Petitioner City of Manila never appealed said declaration of the DOJ Secretary; thus, it attained finality after
the lapse of the period for appeal of the same. The passage of Tax Ordinance No. 8011, amending Tax Ordinance No. 7988, did not
cure the defects of the latter, which, in any way, did not legally exist.

By virtue of the Coca-Cola case, Tax Ordinance No. 7988 and Tax Ordinance No. 8011 are null and void and without any legal effect.
Therefore, respondent cannot be taxed and assessed under the amendatory laws--Tax Ordinance No. 7988 and Tax Ordinance No.
8011.

Petitioners insist that even with the declaration of nullity of Tax Ordinance No. 7988 and Tax Ordinance No. 8011, respondent could
still be made liable for local business taxes under both Sections 14 and 21 of Tax Ordinance No. 7944 as they were originally read,
without the amendment by the null and void tax ordinances.

Emphasis must be given to the fact that prior to the passage of Tax Ordinance No. 7988 and Tax Ordinance No. 8011 by petitioner
City of Manila, petitioners subjected and assessed respondent only for the local business tax under Section 14 of Tax Ordinance No.
7794, but never under Section 21 of the same. This was due to the clear and unambiguous proviso in Section 21 of Tax Ordinance
No. 7794, which stated that "all registered business in the City of Manila that are already paying the aforementioned tax shall be
exempted from payment thereof." The "aforementioned tax" referred to in said proviso refers to local business tax. Stated
differently, Section 21 of Tax Ordinance No. 7794 exempts from the payment of the local business tax imposed by said section,
businesses that are already paying such tax under other sections of the same tax ordinance. The said proviso, however, was deleted
from Section 21 of Tax Ordinance No. 7794 by Tax Ordinances No. 7988 and No. 8011. Following this deletion, petitioners began
assessing respondent for the local business tax under Section 21 of Tax Ordinance No. 7794, as amended.1avvphi1

The Court easily infers from the foregoing circumstances that petitioners themselves believed that prior to Tax Ordinance No. 7988
and Tax Ordinance No. 8011, respondent was exempt from the local business tax under Section 21 of Tax Ordinance No. 7794.
Hence, petitioners had to wait for the deletion of the exempting proviso in Section 21 of Tax Ordinance No. 7794 by Tax Ordinance
No. 7988 and Tax Ordinance No. 8011 before they assessed respondent for the local business tax under said section. Yet, with the
pronouncement by this Court in the Coca-Cola case that Tax Ordinance No. 7988 and Tax Ordinance No. 8011 were null and void and
without legal effect, then Section 21 of Tax Ordinance No. 7794, as it has been previously worded, with its exempting proviso, is back
in effect. Accordingly, respondent should not have been subjected to the local business tax under Section 21 of Tax Ordinance No.
7794 for the third and fourth quarters of 2000, given its exemption therefrom since it was already paying the local business tax
under Section 14 of the same ordinance.

Petitioners obstinately ignore the exempting proviso in Section 21 of Tax Ordinance No. 7794, to their own detriment. Said
exempting proviso was precisely included in said section so as to avoid double taxation.

Double taxation means taxing the same property twice when it should be taxed only once; that is, "taxing the same person twice by
the same jurisdiction for the same thing." It is obnoxious when the taxpayer is taxed twice, when it should be but once. Otherwise
described as "direct duplicate taxation," the two taxes must be imposed on the same subject matter, for the same purpose, by the
same taxing authority, within the same jurisdiction, during the same taxing period; and the taxes must be of the same kind or
character.18

Using the aforementioned test, the Court finds that there is indeed double taxation if respondent is subjected to the taxes under
both Sections 14 and 21 of Tax Ordinance No. 7794, since these are being imposed: (1) on the same subject matter – the privilege of
doing business in the City of Manila; (2) for the same purpose – to make persons conducting business within the City of Manila
contribute to city revenues; (3) by the same taxing authority – petitioner City of Manila; (4) within the same taxing jurisdiction –
within the territorial jurisdiction of the City of Manila; (5) for the same taxing periods – per calendar year; and (6) of the same kind
or character – a local business tax imposed on gross sales or receipts of the business.

The distinction petitioners attempt to make between the taxes under Sections 14 and 21 of Tax Ordinance No. 7794 is specious. The
Court revisits Section 143 of the LGC, the very source of the power of municipalities and cities to impose a local business tax, and to
which any local business tax imposed by petitioner City of Manila must conform. It is apparent from a perusal thereof that when a
municipality or city has already imposed a business tax on manufacturers, etc. of liquors, distilled spirits, wines, and any other article
of commerce, pursuant to Section 143(a) of the LGC, said municipality or city may no longer subject the same manufacturers, etc. to
a business tax under Section 143(h) of the same Code. Section 143(h) may be imposed only on businesses that are subject to excise
tax, VAT, or percentage tax under the NIRC, and that are "not otherwise specified in preceding paragraphs." In the same way,
businesses such as respondent’s, already subject to a local business tax under Section 14 of Tax Ordinance No. 7794 [which is based
on Section 143(a) of the LGC], can no longer be made liable for local business tax under Section 21 of the same Tax Ordinance [which
is based on Section 143(h) of the LGC].

WHEREFORE, premises considered, the instant Petition for Review on Certiorari is hereby DENIED. No costs.

SO ORDERED.