Case Digest (G.R. No. 167260) Core Legal Reasoning Model
Facts:
This case involves the City of Iloilo as petitioner and SMART Communications, Inc. (SMART) as respondent. The issue arose when the City of Iloilo, through its City Treasurer Mr. Romeo V. Manikan, issued a letter of assessment dated February 12, 2002, requiring SMART to pay deficiency local franchise and business taxes amounting to ₱764,545.29 for the years 1997 to 2001, plus interests and surcharges. SMART protested the assessment by letter dated February 15, 2002, claiming exemption from payment based on Section 9 of its legislative franchise granted under Republic Act (R.A.) No. 7294, which imposed a franchise tax of 3% of gross receipts in lieu of all taxes. SMART also relied on Section 23 of Republic Act No. 7925, or the Public Telecommunications Policy Act, which mandates that exemptions granted under newer franchises shall become part of previously granted telecommunications franchises. The City Treasurer denied the protest on April 4, 2002, citing SMART's failure to
Case Digest (G.R. No. 167260) Expanded Legal Reasoning Model
Facts:
- Parties and Nature of Case
- Petitioners: City of Iloilo and Romeo V. Manikan, City Treasurer of Iloilo
- Respondent: SMART Communications, Inc. (SMART)
- Case: Appeal by certiorari under Rule 45 of the Rules of Court seeking to set aside the decision of the RTC Iloilo City that declared SMART exempt from local franchise and business taxes.
- Assessment and Protest
- City of Iloilo issued a letter of assessment dated February 12, 2002, demanding payment of deficiency local franchise and business taxes totaling ₱764,545.29 plus interests and surcharges for years 1997 to 2001.
- SMART protested the assessment on February 15, 2002, claiming exemption based on:
- Section 9 of its legislative franchise under Republic Act (R.A.) No. 7294, which provides payment of a 3% franchise tax on gross receipts "in lieu of all taxes," claimed to cover local franchise and business taxes.
- Section 23 of R.A. No. 7925 (Public Telecommunications Policy Act), which states that privileges or exemptions granted under existing franchises ipso facto become part of previous franchises, allowing SMART to avail of tax exemptions granted to other telecommunications franchise holders.
- Petitioner's Counterarguments
- Denied SMART’s protest on April 4, 2002, citing SMART’s failure to comply with Section 252 of the Local Government Code (LGC), which requires payment of tax prior to protest.
- Asserted that tax exemptions under Section 193 of the LGC have been withdrawn unless otherwise provided.
- RTC Decision and Appeal
- RTC ruled in favor of SMART, declaring it exempt from local franchise and business taxes based on Section 9 of its franchise and Section 23 of the Public Telecoms Act.
- City of Iloilo filed petition for review on certiorari to the Supreme Court challenging said exemption.
Issues:
- Whether SMART is exempt from the payment of local franchise and business taxes imposed by the City of Iloilo, considering:
- Section 9 of its legislative franchise under R.A. No. 7294, which requires payment of a 3% franchise tax "in lieu of all taxes."
- Section 23 of the Public Telecommunications Policy Act (R.A. No. 7925), which purportedly extends tax exemptions granted under new franchises to previously granted telecommunications franchises.
- The applicability of Sections 137, 151, and 193 of the Local Government Code on tax exemption privileges.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)