Case Digest (G.R. No. L-4376)
Facts:
The case involves the petitioners, the Association of Customs Brokers, Inc. and G. Manlapit, Inc., who filed a petition for declaratory relief against the respondents, which include the Municipal Board, the City Treasurer, the City Assessor, and the City Mayor of Manila. The petition was filed to challenge the validity of Ordinance No. 3379, enacted by the Municipal Board of Manila on March 24, 1950. The petitioners, representing customs brokers and public service operators of motor vehicles in Manila, contended that the ordinance, while labeled as a property tax, effectively functions as a license tax, which they argued exceeds the authority of the Municipal Board. They raised three main points: (1) the ordinance imposes a license tax rather than a property tax; (2) it violates the principle of uniformity in taxation; and (3) it constitutes double taxation. The respondents, represented by the city fiscal, defended the ordinance, asserting that it is a legitimate property tax...
Case Digest (G.R. No. L-4376)
Facts:
Parties Involved:
- Petitioners: Association of Customs Brokers, Inc. and G. Manlapit, Inc.
- Respondents: Municipal Board, City Treasurer, City Assessor, and City Mayor of Manila
Background:
The petitioners challenged the validity of Ordinance No. 3379, passed by the Municipal Board of Manila on March 24, 1950. The ordinance imposed a 1% ad valorem tax annually on all motor vehicles operating within the City of Manila, with the proceeds allocated to the Streets and Bridges Funds for repair, maintenance, and improvement of city infrastructure.
Petitioners' Claims:
- The ordinance, while labeled as a property tax, is actually a license tax, which is beyond the authority of the Municipal Board.
- The ordinance violates the rule of uniformity of taxation.
- It constitutes double taxation.
Respondents' Defense:
The respondents argued that the ordinance imposes a property tax, which is within the power of the City of Manila under Section 18(p) of Republic Act No. 409 (Revised Charter of Manila). They also contended that the tax does not violate the rule of uniformity or constitute double taxation.
Lower Court Decision:
The Court of First Instance of Manila upheld the validity of the ordinance and dismissed the petition. The petitioners appealed the decision.
Issue:
- (Unlock)
Ruling:
- (Unlock)
Ratio:
Nature of the Tax:
- The Court held that while the ordinance is labeled as a property tax and is fixed ad valorem, its nature and purpose reveal it to be a license tax. The tax is levied on motor vehicles operating within Manila to raise funds for street and bridge maintenance, which aligns with the purpose of a license tax rather than a property tax.
- The Court cited authorities stating that a tax remains an excise or license tax even if it is proportioned to the value of the property used in the taxed activity.
Conflict with the Motor Vehicle Law:
- The Motor Vehicle Law (Act No. 3992) prohibits the imposition of additional fees for the operation of motor vehicles, except for property taxes. The ordinance, by imposing a tax for the same purpose (street and bridge maintenance) as the fees collected under the Motor Vehicle Law, effectively circumvents this prohibition and results in duplication.
Violation of Uniformity of Taxation:
- The ordinance fails to distinguish between motor vehicles for hire and those for private use, as well as between vehicles registered in Manila and those registered elsewhere but occasionally using Manila’s streets. This lack of distinction creates an inequality in taxation, violating the constitutional rule of uniformity.
Double Taxation:
- The Court did not explicitly rule on the issue of double taxation but implied that the ordinance’s duplication of fees for the same purpose under the Motor Vehicle Law could be considered a form of double taxation.
Conclusion:
The Supreme Court declared Ordinance No. 3379 invalid because it imposes a license tax disguised as a property tax, violates the rule of uniformity, and results in duplication of fees prohibited by the Motor Vehicle Law.