Case Digest (G.R. No. 166134) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In Angeles City v. Angeles City Electric Corporation, decided on June 29, 2010 under G.R. No. 166134, the City of Angeles (petitioner) challenged the issuance by the Regional Trial Court (RTC), Branch 57, of a writ of preliminary injunction restraining it and its City Treasurer from levying, seizing, auctioning, and disposing of properties owned by Angeles City Electric Corporation (AEC, private respondent). AEC had been incorporated pursuant to Republic Act No. 4079 (1964), which exempted it from all national and local taxes in lieu of a fixed franchise tax. Subsequent laws, including Presidential Decree No. 551 (1974) and the Local Government Code of 1991 (LGC), allowed local governments to impose business taxes on franchises. In 1993, the Sangguniang Panlungsod enacted the Revised Revenue Code of Angeles City (RRCAC). AEC protested various assessments issued in 2004, alleging exemptions under RA 4079, double taxation, prescription, and retroactivity. The City Treasurer denied... Case Digest (G.R. No. 166134) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Legislative and regulatory background
- In 1964, Angeles Electric Corporation (AEC) received a franchise under Republic Act No. 4079, with franchise tax on gross earnings in lieu of all local and national taxes (Sec. 3-A).
- In 1974, PD 551 fixed the franchise tax at 2% of gross receipts “in lieu of all taxes and assessments of whatever nature imposed by any national or local authority.”
- In 1992, RA 7160 (Local Government Code) empowered cities to tax businesses enjoying a franchise (up to 0.5% of gross receipts).
- In 1993, Angeles City enacted Tax Ordinance No. 33 (Revised Revenue Code) imposing local business taxes, including on franchises.
- Administrative petition and assessment
- In February 1994, Metro Angeles Chamber of Commerce (including AEC) petitioned to reduce rates under the new City Code; the Department of Finance/BLGF indorsed amendments to ensure compliance with the LGC.
- From July 1995 onward, AEC paid both national franchise tax (to BIR) and local franchise tax (to City Treasurer) quarterly.
- On January 22, 2004, the City Treasurer assessed AEC for business tax, license fees, surcharges and penalties for 1993–2004, totaling ₱94,861,194.10.
- AEC protested the assessment on grounds of RA 4079 exemption, double taxation, prescription (five-year period), and retroactivity; the protest was denied on February 17, 2004.
- Proceedings before the RTC
- AEC appealed the denial via a Petition for Declaratory Relief (Civil Case No. 11401) before RTC Angeles City, Branch 57.
- On April 5, 2004, the City Treasurer levied on AEC’s real properties; auction was set for May 7, 2004.
- AEC filed an Urgent Motion for TRO and/or Writ of Preliminary Injunction to enjoin levy, seizure and auction of its properties.
- RTC issued a TRO on May 4, 2004, then granted a Writ of Preliminary Injunction on May 28, 2004 (amended May 31) conditioned on a ₱10 million bond.
- Angeles City and the Treasurer moved to dissolve/invoke reconsideration on August 5, 2004; RTC denied the motion on October 14, 2004.
- Petition for certiorari to the Supreme Court
- Angeles City filed a Rule 65 petition seeking to annul the preliminary injunction, arguing injunctions may not restrain tax collection and the RTC gravely abused its discretion.
Issues:
- Did the RTC gravely abuse its discretion in issuing a writ of preliminary injunction enjoining Angeles City and its Treasurer from levying, seizing, and auctioning AEC’s properties?
- Does the prohibition against injunctions restraining tax collection under national tax law apply to local taxes under the LGC?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)