LUZON STEVEDORING CORPORATION vs. COURT OF TAX APPEALS and the applied.
applied. More specifically stated, the general rule is that any claim for exemption from
COMMISSIONER OF INTERNAL REVENUE GR No. L-30232 July 29, 1988
FACTS:
(imported various engine parts and other equipment for tugboat repair and
maintenance in 1961 and 1962)
Petitioner-appellant Luzon Stevadoring Corporation (LSC), in 1961 and 1962, for the
repair and maintenance of its tugboats, imported various engine parts and other
equipment for which it paid, under protest, the assessed compensating tax. Unable to
secure a tax refund from the CIR, on January 2, 1964, it filed a Petition for Review with
the CTA, praying among others, that it be granted the refund of the amount of
P33,442.13.
Petitioner contends that tugboats are embraced and included in the term
cargo vessel under the tax exemption provisions of Section 190 of the Revenue Code,
as amended by Republic Act. No. 3176. He argues that in legal contemplation, the
tugboat and a barge loaded with cargoes with the former towing the latter for loading
and unloading of a vessel in part, constitute a single vessel. Accordingly, it concludes
that the engines, spare parts and equipment imported by it and used in the repair and
maintenance of its tugboats are exempt from compensating tax.
The CTA, however, in a Decision dated October 21, 1969 denied the various
claims for tax refund. Its Motion for Reconsideration was also denied.
ISSUES:
Whether or not petitioner’s tugboats can be interpreted to be included in the term “cargo
vessels” for purposes of the tax exemption provided for in Section 190 of the National
Internal Revenue Code, as amended by Republic Act No. 3176.
HELD:
Petition without merit. Section 190 of NIRC provides that the tax imposed in
this section shall not apply to articles to be used by the importer himself in the
manufacture or preparation of articles subject to specific tax or those for consignment
abroad and are to form part thereof or to articles to be used by the importer himself as
passenger and/or cargo vessel, whether coastwise or oceangoing, including engines
and spare parts of said vessel.
This Court has laid down the rule that “as the power of taxation is a high
prerogative of sovereignty, the relinquishment is never presumed and any reduction or
dimunition thereof with respect to its mode or its rate, must be strictly construed, and
the same must be coached in clear and unmistakable terms in order that it may be
the tax statute should be strictly construed against the taxpayer.
As correctly analyzed by the Court of Tax Appeals, in order that the
importations in question may be declared exempt from the compensating tax, it is
indispensable that the requirements of the amendatory law be complied with, namely:
(1) the engines and spare parts must be used by the importer himself as a passenger
and/or cargo, vessel; and (2) the said passenger and/or cargo vessel must be used in
coastwise or oceangoing navigation.
As pointed out by the CTA, the amendatory provisions of RA 3176 limit tax
exemption from the compensating tax to imported items to be used by the importer
himself as operator of passenger and/or cargo vessel.
As quoted in the decision of the Court of Tax Appeals, a tugboat is defined as follows:
A tugboat is a strongly built, powerful steam or power vessel, used for towing and, now,
also used for attendance on vessel. (Webster New International Dictionary, 2nd Ed.)
A tugboat is a diesel or steam power vessel designed primarily for moving large ships
to and from piers for towing barges and lighters in harbors, rivers and canals.
(Encyclopedia International Grolier, Vol. 18, p. 256).
A tug is a steam vessel built for towing, synonymous with tugboat. (Bouvier’s Law
Dictionary.).
Under the foregoing definitions, petitioner’s tugboats clearly do not fall under the
categories of passenger and/or cargo vessels. Thus, it is a cardinal principle of statutory
construction that where a provision of law speaks categorically, the need for
interpretation is obviated, no plausible pretense being entertained to justify non-
compliance. All that has to be done is to apply it in every case that falls within its terms
(Allied Brokerage Corp. v. Commissioner of Customs, L-27641, 40 SCRA 555 [1971];
Quijano, etc. v. DBP, L-26419, 35 SCRA 270 [1970]).
And, even if construction and interpretation of the law is insisted upon, following another
fundamental rule that statutes are to be construed in the light of purposes to be achieved
and the evils sought to be remedied (People v. Purisima etc., et al., L-42050-66, 86
SCRA 544 [1978], it will be noted that the legislature in amending Section 190 of the
Tax Code by Republic Act 3176, as appearing in the records, intended to provide
incentives and inducements to bolster the shipping industry and not the business of
stevedoring, as manifested in the sponsorship speech of Senator Gil Puyat.
The corporation’s tugboats do not fall under the categories of passenger or cargo
vessels to avail of the exemption from compensation tax in Section 190 of the Tax
Code. It may be further noted that the amendment of Section 190 of Republic Act
of 3176 was intended to provide incentives and inducements to bolster the
shipping industry and not in the business of stevedoring, in which the
corporation is engaged in.
 COMMISSIONER OF CUSTOMS VS PHILIPPINE ACETYLENE
COMPANY
Facts:
Philippine Acetylene Company is engaged in the manufacture of oxygen, acetylene and
nitrogen, and packaging of liquefied petroleum gas in cylinders and tanks. It imported
from the United States a custom built liquefied petroleum gas tank. For the said
importation, the companywas assessed a special import tax amounting to PhP
3,683.00. The company paid the tax under protest. Philippine Acetylene Company
argues that it is exempt from the payment of the special import tax. It cites as basis for
its exemption Sec 6 of RA No.1394 which states that special import taxes shall not be
imposed on machinery, equipment, accessories and spare parts, imported into the
Philippines, for the use of industries. The company maintains that it is an industry as
defined in Sec 6 of RA No. 1394. The Court of Tax Appeals sustained Philippine
Acetylene Company’s contention and declared the latter exempt from the payment of
the special import tax.
Issue:
Whether or not Philippine Acetylene Company may be considered engaged in an
industry as contemplated in Sec 6 of RA No. 1394 and, therefore, exempt from the
payment of the special import tax.
Held:
Philippine Acetylene Company is not an industry as defined in Sec 6 of RA No. 1394.
To be an industry, the company must be engaged in some productive enterprise, not in
merely packaging an already finished product. The operation for which the company
employs the gas tank in question does not involve manufacturing or production. It is
nothing but packaging; the liquefied gas, when obtained from the refinery, has to be
placed in some kind of container to facilitate its transportation. When sold to consumers,
it undergoes no change or transformation, but is merely placed in smaller cylinders for
convenience. The process is certainly not production in any sense.
Assuming ng the correctness of such interpretation, what should be
noted is that it stresses the productive aspect of the enterprise. The operation for
which the respondent company employs the gas tank in question does not
involve manufacturing or production. It is nothing but packaging; the liquefied
gas, when obtained from the refinery, has to be placed in some kind of container
for transportation to Manila. When sold to consumers, it undergoes no change or
transformation, but is merely placed in smaller cylinders for convenience. The
process is certainly not production in any sense.
The decision of the CTA is reversed and Philippine Acetylene Company
is held liable for the payment of the special import tax, as it is not an industry
exempt from the payment of such tax.
The term 'industries' is used in two distinct groups. The first group of
exempted industries refers exclusively to those falling under the new and
necessary industries as defined in Republic Act No. 901. In the second, the term
"industries" is classed together with the terms miners, mining enterprises,
planters and farmers. ... If Congress really intended to give the term "industries" its
ordinary and general meaning and thus grant tax exemption to all ventures and trades
falling under the said ordinary and general definition, it should have eliminated the words
"new and necessary industries' and 'mining enterprises" since these two ventures are
already covered by the term "industries" in its ordinary and general meaning. On the
other hand, the fact that the language of the law specifically segregates new and
necessary industries under Republic Act No. 901 among those entitled to the tax
exemption, in effect, restricts the meaning and scope of the word "industries."
The argument appears logical and reasonable.
Since the term "industries" as used in the law for the second time is classified
together with the terms "miners, mining enterprises, planters and farmers", the
obvious legislative intent is to confine the meaning of the term to activities that
tend to produce or create or manufacture, such as those of miners, mining
enterprises, ]planters and farmers.
The Tax Court's interpretation would lead to a Patent inconsistency, in that while the
first part of the law confines the exemption to new and necessary industries, another
part would extend the exemption to all other industries, regardless of their nature, as
long as they employ labor and capital for profit-making purposes. In granting the
exemption, it would have been illogical for Congress to specify importations needed by
new and necessary industries -- as the term is defined by law and in the same breath
allow a similar exemption to all other industries in general.
 Dra. Brigida Buenaseda et. al. vs. Sec. Juan Flavier et. al. [G.R. No. 106719.
September 21, 1993] 15AUG
Ponente: QUIASON, J.
FACTS:
The petition for Certiorari, Prohibition and Mandamus, with Prayer for
Preliminary Injunction or Temporary Restraining Order, under Rule 65 of the Revised
Rules of Court, seeks to nullify the Order of the Ombudsman directing the preventive
suspension of petitioners Dr. Brigida S. Buenaseda et.al. The questioned order was
issued in connection with the administrative complaint filed with the Ombudsman (OBM-
ADM-0-91-0151) by the private respondents against the petitioners for violation of the
Anti-Graft and Corrupt Practices Act. The Supreme Court required respondent
Secretary to comply with the aforestated status quo order. The Solicitor General, in his
comment, stated that (a) “The authority of the Ombudsman is only to recommend
suspension and he has no direct power to suspend;” and (b) “Assuming the
Ombudsman has the power to directly suspend a government official or employee, there
are conditions required by law for the exercise of such powers; [and] said conditions
have not been met in the instant case”
ISSUE:
Whether or not the Ombudsman has the power to suspend government officials and
employees working in offices other than the Office of the Ombudsman, pending the
investigation of the administrative complaints filed against said officials and employees.
HELD:
YES. Petition was dismissed, status quo lifted and set aside.
RATIO:
When the constitution vested on the Ombudsman the power “to recommend the
suspension” of a public official or employees (Sec. 13 [3]), it referred to “suspension,”
as a punitive measure. All the words associated with the word “suspension” in said
provision referred to penalties in administrative cases, e.g. removal, demotion, fine,
censure. Under the rule of noscitur a sociis, the word “suspension” should be
given the same sense as the other words with which it is associated. Where a
particular word is equally susceptible of various meanings, its correct
construction may be made specific by considering the company of terms in which
it is found or with which it is associated.
Section 24 of R.A. No. 6770, which grants the Ombudsman the power to preventively
suspend public officials and employees facing administrative charges before him, is a
procedural, not a penal statute. The preventive suspension is imposed after compliance
with the requisites therein set forth, as an aid in the investigation of the administrative
charges.
Under the Constitution, the ombudsman is expressly authorized to
recommend to the appropriate official the discipline or prosecution of erring public
officials or employees. And in order to make an intelligent determination whether to
recommend such actions, the Ombudsman has to conduct an investigation where the
need to suspend the respondents may arise to conduct such investigation in an
expeditious and efficient manner.
The purpose of R.A. No. 6770 is to give the Ombudsman such powers, as he
may need to perform efficiently the task committed to him by the Constitution. As such,
said statute, particularly its provisions, should be given such interpretation that will
effectuate the purposes and objectives of the Constitution. Any interpretation that will
hamper the work of the Ombudsman should be avoided.
A statute granting powers to an agency created by the Constitution should be liberally
construed for the advancement of the purposes and objectives for which it was created.
Further, as it can be inferred from the Ombudsman Law, the Congress intended to
empower the Ombudsman to preventively suspend all officials and employees under
investigation by his office, irrespective of the whether they are employed “in his office”
or in other offices of the government. The moment a criminal or administrative complaint
is filed with the Ombudsman, the respondent is deemed to be “in his authority” and he
can proceed to determine whether said respondent should be placed under preventive
suspension.
In the claim that the Ombudsman committed grave abuse of discretion amounting o lack
of jurisdiction when he issued the suspension order without affording petitioners the
opportunity to confront the charges against them, the order for preventive suspension
is validly issued even without a full-blown hearing and the formal presentation of
evidence. In the case at bench, the Ombudsman issued the order only after: (a)
petitioners had filed their answer to the administrative complaint and the “Motion for the
Preventive Suspension” of petitioners; (b) private respondent had filed a reply to the
answer of petitioners, specifying 23cases f harassment by petitioners of the members
of private respondent; and, (c) a preliminary conference wherein the complaint and the
respondents in the administrative case agreed to submit their list of witnesses and
documentary evidence.
Under these circumstances, it cannot be said that Director Raul Arnaw and
Investigator Amy de Villa – Rosero acted with manifest partiality and bias in
recommending the suspension of petitioners. Neither can it be said that the
Ombudsman had acted with grave abuse of discretion in acting favorably on their
recommendation.
 G.R. No. 202242 July 17, 2012
FRANCISCO I. CHAVEZ, Petitioner,
vs.
JUDICIAL AND BAR COUNCIL, SEN. FRANCIS JOSEPH G. ESCUDERO and REP.
NIEL C. TUPAS, JR., Respondents.
Facts:
The case is in relation to the process of selecting the nominees for the vacant seat of
Supreme Court Chief Justice following Renato Corona’s departure.
Originally, the members of the Constitutional Commission saw the need to create a
separate, competent and independent body to recommend nominees to the President.
Thus, it conceived of a body representative of all the stakeholders in the judicial
appointment process and called it the Judicial and Bar Council (JBC).
In particular, Paragraph 1 Section 8, Article VIII of the Constitution states that “(1) A
Judicial and Bar Council is hereby created under the supervision of the Supreme Court
composed of the Chief Justice as ex officio Chairman, the Secretary of Justice, and a
representative of the Congress as ex officio Members, a representative of the Integrated
Bar, a professor of law, a retired Member of the Supreme Court, and a representative
of the private sector.” In compliance therewith, Congress, from the moment of the
creation of the JBC, designated one representative from the Congress to sit in the JBC
to act as one of the ex officio members.
In 1994 however, the composition of the JBC was substantially altered. Instead of
having only seven (7) members, an eighth (8th) member was added to the JBC as
two (2) representatives from Congress began sitting in the JBC – one from the
House of Representatives and one from the Senate, with each having one-half
(1/2) of a vote. During the existence of the case, Senator Francis Joseph G.
Escudero and Congressman Niel C. Tupas, Jr. (respondents) simultaneously sat
in JBC as representatives of the legislature.
It is this practice that petitioner has questioned in this petition.
The respondents claimed that when the JBC was established, the framers originally
envisioned a unicameral legislative body, thereby allocating “a representative of the
National Assembly” to the JBC. The phrase, however, was not modified to aptly jive with
the change to bicameralism which was adopted by the Constitutional Commission on
July 21, 1986. The respondents also contend that if the Commissioners were made
aware of the consequence of having a bicameral legislature instead of a unicameral
one, they would have made the corresponding adjustment in the representation of
Congress in the JBC; that if only one house of Congress gets to be a member of JBC
would deprive the other house of representation, defeating the principle of balance.
The respondents further argue that the allowance of two (2) representatives of
Congress to be members of the JBC does not render JBC’s purpose of providing
balance nugatory; that the presence of two (2) members from Congress will most
likely provide balance as against the other six (6) members who are undeniably
presidential appointees
Supreme Court held that it has the power of review the case herein as it is an object of
concern, not just for a nominee to a judicial post, but for all the citizens who have the
right to seek judicial intervention for rectification of legal blunders.
Issue:
Whether the practice of the JBC to perform its functions with eight (8) members, two (2)
of whom are members of Congress, defeats the letter and spirit of the 1987 Constitution.
Held:
No. The current practice of JBC in admitting two members of the Congress to perform
the functions of the JBC is violative of the 1987 Constitution. As such, it is
unconstitutional.
One of the primary and basic rules in statutory construction is that where the
words of a statute are clear, plain, and free from ambiguity, it must be given its
literal meaning and applied without attempted interpretation. It is a well-settled
principle of constitutional construction that the language employed in the
Constitution must be given their ordinary meaning except where technical terms
are employed. As such, it can be clearly and unambiguously discerned from
Paragraph 1, Section 8, Article VIII of the 1987 Constitution that in the phrase, “a
representative of Congress,” the use of the singular letter “a” preceding
“representative of Congress” is unequivocal and leaves no room for any other
construction. It is indicative of what the members of the Constitutional
Commission had in mind, that is, Congress may designate only one (1)
representative to the JBC. Had it been the intention that more than one (1)
representative from the legislature would sit in the JBC, the Framers could have,
in no uncertain terms, so provided.
Moreover, under the maxim noscitur a sociis, where a particular word or phrase
is ambiguous in itself or is equally susceptible of various meanings, its correct
construction may be made clear and specific by considering the company of
words in which it is founded or with which it is associated. Every meaning to be
given to each word or phrase must be ascertained from the context of the body
of the statute since a word or phrase in a statute is always used in association
with other words or phrases and its meaning may be modified or restricted by the
latter. Applying the foregoing principle to this case, it becomes apparent that the
word “Congress” used in Article VIII, Section 8(1) of the Constitution is used in
its generic sense. No particular allusion whatsoever is made on whether the
Senate or the House of Representatives is being referred to, but that, in either
case, only a singular representative may be allowed to sit in the JBC
Considering that the language of the subject constitutional provision is plain and
unambiguous, there is no need to resort extrinsic aids such as records of the
Constitutional Commission. Nevertheless, even if the Court should proceed to
look into the minds of the members of the Constitutional Commission, it is
undeniable from the records thereof that it was intended that the JBC be
composed of seven (7) members only. The underlying reason leads the Court to
conclude that a single vote may not be divided into half (1/2), between two
representatives of Congress, or among any of the sitting members of the JBC for
that matter.
With the respondents’ contention that each representative should be admitted from the
Congress and House of Representatives, the Supreme Court, after the perusal of the
records of Constitutional Commission, held that “Congress,” in the context of JBC
representation, should be considered as one body. While it is true that there are still
differences between the two houses and that an inter-play between the two houses is
necessary in the realization of the legislative powers conferred to them by the
Constitution, the same cannot be applied in the case of JBC representation because no
liaison between the two houses exists in the workings of the JBC. No mechanism is
required between the Senate and the House of Representatives in the screening and
nomination of judicial officers. Hence, the term “Congress” must be taken to mean the
entire legislative department.
The framers of Constitution, in creating JBC, hoped that the private sector and the three
branches of government would have an active role and equal voice in the selection of
the members of the Judiciary. Therefore, to allow the Legislature to have more
quantitative influence in the JBC by having more than one voice speak, whether with
one full vote or one-half (1/2) a vote each, would “negate the principle of equality among
the three branches of government which is enshrined in the Constitution.”
It is clear, therefore, that the Constitution mandates that the JBC be composed of seven
(7) members only. Thus, any inclusion of another member, whether with one whole vote
or half (1/2) of it, goes against that mandate. Section 8(1), Article VIII of the Constitution,
providing Congress with an equal voice with other members of the JBC in
recommending appointees to the Judiciary is explicit. Any circumvention of the
constitutional mandate should not be countenanced for the Constitution is the supreme
law of the land. The Constitution is the basic and paramount law to which all other laws
must conform and to which all persons, including the highest officials of the land, must
defer. Constitutional doctrines must remain steadfast no matter what may be the tides
of time. It cannot be simply made to sway and accommodate the call of situations and
much more tailor itself to the whims and caprices of the government and the people who
run it.
Notwithstanding its finding of unconstitutionality in the current composition of the JBC,
all its prior official actions are nonetheless valid. In the interest of fair play under the
doctrine of operative facts, actions previous to the declaration of unconstitutionality are
legally recognized. They are not nullified.
WHEREFORE, the petition is GRANTED. The current numerical composition of the
Judicial and Bar Council IS declared UNCONSTITUTIONAL. The Judicial and Bar
Council is hereby enjoined to reconstitute itself so that only one ( 1) member of
Congress will sit as a representative in its proceedings, in accordance with Section 8( 1
), Article VIII of the 1987 Constitution. This disposition is immediately executory.
G.R. No. L-32717 November 26, 1970
AMELITO R. MUTUC vs. COMELEC
FACTS:
Petitioner Mutuc was a candidate for delegate to the Constitutional Convention. He filed
a special civil action against the respondent COMELEC when the latter informed him
through a telegram that his certificate of candidacy was given due course but he was
prohibited from using jingles in his mobile units equipped with sound systems and loud
speakers. The petitioner accorded the order to be violative of his constitutional right to
freedom of speech. COMELEC justified its prohibition on the premise that the
Constitutional Convention act provided that it is unlawful for the candidates “to
purchase, produce, request or distribute sample ballots, or electoral propaganda
gadgets such as pens, lighters, fans (of whatever nature), flashlights, athletic goods or
materials, wallets, bandanas, shirts, hats, matches, cigarettes, and the like, whether of
domestic or foreign origin.” COMELEC contended that the jingle or the recorded or
taped voice of the singer used by petitioner was a tangible propaganda material and
was, under the above statute, subject to confiscation.
ISSUE: Whether or not the usage of the jingle by the petitioner form part of the
prohibition invoked by the COMELEC.
HELD:
The Court held that “the general words following any enumeration being applicable only
to things of the same kind or class as those specifically referred to”. The COMELEC’s
contention that a candidate’s jingle form part of the prohibition, categorized under the
phrase “and the like”, could not merit the court’s approval by principle of Ejusdem
Generis. It is quite apparent that what was contemplated in the Act was the distribution
of gadgets of the kind referred to as a means of inducement to obtain a favorable vote
for the candidate responsible for its distribution.
Furthermore, the COMELEC failed to observe construction of the statute which should
be in consonance to the express terms of the constitution. The intent of the COMELEC
for the prohibition may be laudable but it should not be sought at the cost of the
candidate’s constitutional rights.
 EMETERIA LIWAG, Petitioner vs. HAPPY GLEN LOOP HOMEOWNERS
ASSOCIATION, INC., Respondent G. R. No. 189755
July 04, 2012 Sereno, J.
FACTS
In 1978, F. G. R. Sales, the original developer of Happy Glen Loop, loaned
from Ernesto Marcelo, owner of T. P. Marcelo Realty Corporation. The former failed to
settle its debts with the latter, so, he assigned all his rights to Marcelo over several
parcels of land in the Subdivision including the receivables from the lots already sold.
As the successor-in-interest, Marcelo represented to lot buyers, the National
Housing Authority (NHA) and the Human Settlement Regulatory Commission (HSRC)
that a water facility is available in the subdivision. The said water facility has been the
only source of water of the residents for thirty (30) years.
In September 1995, Marcelo sold Lot 11, Block 5 to Hermogenes Liwag. As
a result, Transfer Certificate of Title (TCT) No. C-350099 was issued to the latter. In
2003, Hermogenes died. Petitioner, wife of Hermogenes, subsequently wrote to the
respondent Association demanding the removal of the overhead water tank over the
parcel of land. The latter refused and filed a case before the Housing and Land Use
Regulatory Board against T. P. Marcelo Realty Corporation, petitioner and the surviving
heirs of Hermogenes.
The HLURB ruling was in favor of the respondent Association. One of the things it
affirmed was the existence of an easement for water system/facility or open space on
Lot 11, Block 5 of TCT No. C-350099 wherein the deep well and overhead tank are
situated. However, on appeal before the HLURB Board of Commissioners, the Board
found that Lot 11, Block 5 was not an open space
ISSUE
Whether or not Lot 11, Block 5 of the Happy Glen Loop is considered an “open space”
as defined in P. D. 1216.
RULING
Yes, the aforementioned parcel of land is considered an “open space.” The
Court used the basic statutory construction principle of ejusdem generis to determine
whether the area falls under “other similar facilities and amenities” since P. D. 1216
makes no specific mention of areas reserved for water facilities.
Ejusdem generis states that where a general word or phrase follows an
enumeration of particular and specific words of the same class, the general word or
phrase is to be construed to include – or to be restricted to – things akin to or resembling,
or of the same kind or class as, those specifically mentioned. Applying that principle,
the Court found out that the enumeration refers to areas reserved for the common
welfare of the community. Therefore, the phrase “other similar facilities and amenities”
should be interpreted in like manner.
It is without a doubt that the facility was used for the benefit of the community.
Water is a basic necessity, without which, survival in the community would be
impossible.
PELIZLOY REALTY CORPORATION, represented herein by its President,
GREGORY K. LOY, Petitioner, vs. THE PROVINCE OF BENGUET, Respondent.
G.R. No. 183137, 10 April 2013.
LEONEN, J.:
Petitioner Pelizloy Realty Corporation owns Palm Grove Resort in Tuba, Benguet, which
has facilities like swimming pools, a spa and function halls.
In 2005, the Provincial Board of Benguet approved its Revenue Code of 2005. Section
59, the tax ordinance levied a 10% amusement tax on gross receipts from admissions
to "resorts, swimming pools, bath houses, hot springs and tourist spots."
Pelizloy's posits that amusement tax is an ultra vires act. Thus, it filed an appeal/petition
before the Secretary of Justice. Upon the Secretary’s failure to decide on the appeal
within sixty days, Pelizloy filed a Petition for Declaratory Relief and Injunction before the
RTC.
Pelizloy argued that the imposition was in violation of the limitation on the taxing powers
of local government units under Section 133 (i) of the Local Government Code, which
provides that the exercise of the taxing powers of provinces, cities, municipalities, and
barangays shall not extend to the levy of percentage or value-added tax (VAT) on sales,
barters or exchanges or similar transactions on goods or services except as otherwise
provided.
The Province of Benguet assailed the that the phrase ‘other places of amusement’ in
Section 140 (a) of the LGC encompasses resorts, swimming pools, bath houses, hot
springs, and tourist spots since Article 131 (b) of the LGC defines "amusement" as
"pleasurable diversion and entertainment synonymous to relaxation, avocation,
pastime, or fun."
RTC rendered a Decision assailed Decision dismissing the Petition for Declaratory
Relief and Injunction for lack of merit. Procedurally, the RTC ruled that Declaratory
Relief was a proper remedy. However, it gave credence to the Province of Benguet's
assertion that resorts, swimming pools, bath houses, hot springs, and tourist spots are
encompassed by the phrase ‘other places of amusement’ in Section 140 of the LGC.
ISSUE: W/N provinces are authorized to impose amusement taxes on admission fees
to resorts, swimming pools, bath houses, hot springs, and tourist spots for being
"amusement places" under the LGC.

RULING: NO.

Amusement taxes are percentage taxes. However, provinces are not barred from
levying amusement taxes even if amusement taxes are a form of percentage taxes. The
levying of percentage taxes is prohibited "except as otherwise provided" by the LGC.
Section 140 provides such exception.

Section 140 expressly allows for the imposition by provinces of amusement taxes on
"the proprietors, lessees, or operators of theaters, cinemas, concert halls, circuses,
boxing stadia, and other places of amusement."

However, resorts, swimming pools, bath houses, hot springs, and tourist spots are not
among those places expressly mentioned by Section 140 of the LGC as being subject
to amusement taxes. Thus, the determination of whether amusement taxes may be
levied on admissions to these places hinges on whether the phrase ‘other places of
amusement’ encompasses resorts, swimming pools, bath houses, hot springs, and
tourist spots.

Under the principle of ejusdem generis, "where a general word or phrase follows an
enumeration of particular and specific words of the same class or where the latter follow
the former, the general word or phrase is to be construed to include, or to be restricted
to persons, things or cases akin to, resembling, or of the same kind or class as those
specifically mentioned."

Section 131 (c) of the LGC already provides a clear definition: "Amusement Places"
include theaters, cinemas, concert halls, circuses and other places of amusement
where one seeks admission to entertain oneself by seeing or viewing the show or
performances.

As defined in The New Oxford American Dictionary, ‘show’ means "a spectacle or
display of something, typically an impressive one"; while ‘performance’ means "an act
of staging or presenting a play, a concert, or other form of entertainment." As such, the
ordinary definitions of the words ‘show’ and ‘performance’ denote not only visual
engagement (i.e., the seeing or viewing of things) but also active doing (e.g., displaying,
staging or presenting) such that actions are manifested to, and (correspondingly)
perceived by an audience.

Considering these, it is clear that resorts, swimming pools, bath houses, hot springs and
tourist spots cannot be considered venues primarily "where one seeks admission to
entertain oneself by seeing or viewing the show or performances". While it is true that
they may be venues where people are visually engaged, they are not primarily venues
for their proprietors or operators to actively display, stage or present shows and/or
performances.