Case Digest (G.R. No. 180235)
Facts:
Alta Vista Golf and Country Club filed a Petition in the Regional Trial Court (Cebu City, Branch 9) on January 13, 2006 seeking injunctive and declaratory reliefs against City of Cebu, then Mayor Tomas R. Osmena, and then City Treasurer Teresita C. Camarillo after being assessed an amusement tax under Section 42 of the Revised Omnibus Tax Ordinance (as amended) for CY 1998, served a Closure Order dated December 28, 2005, and later paid under protest P2,750,249.17. The RTC denied injunctive relief, granted respondents' Motion to Dismiss for failure to comply with Section 187 of the Local Government Code, and dismissed the case by Resolution dated March 14, 2007, with denial of reconsideration on October 3, 2007.
Issues:
- Whether the power of judicial review over the validity of a local tax ordinance has been restricted by Section 187, Local Government Code?
- Whether the City of Cebu can validly impose an amusement tax on the act of playing golf?
Ruling:
The Court GRANTED the petition, REVERSED and SET ASIDE the RTC Resolution dated March 14, 2007 and Order dated October 3, 2007. The Court DECLARED NULL and VOID Section 42 insofar as it imposed a twenty percent amusement tax on golf courses, the amusement tax assessment against petitioner for 1998, and the Closure Order dated December 28, 2005, and ordered refund or tax credit of P2,750,249.17 paid under protest.
Ratio:
The Court held that the case presented pure questions of law and substantive issues warranting exception to the procedural requirement of Section 187, Local Government Code, citing precedents that permit judicial review without exhaustion where only legal questions are involved. On the merits, the Court construed Section 140, Local Government Code, and Section 131(c), applying ejusdem generis and controlling precedents (Philippine Basketball Association, Pelizloy Realty) to conclude that "places of amusement" are venues for viewing shows or performances and do not include golf courses; hence Cebu City exceeded its taxing authority and could not invoke its residual taxing power under Section 186, Local Government Code where Congress has already prescribed the scheme for amusement taxes.
Doctrine:
- The periods and procedures in Section 187, Local Government Code are mandatory but exceptions exist where the dispute raises pure questions of law or matters of substantial public interest.
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