Case Digest (G.R. No. L-47421)
Facts:
Commissioner of Internal Revenue v. Hon. Court of Tax Appeals and Manila Golf & Country Club, Inc., G.R. No. L-47421, May 14, 1990, First Division, Medialdea, J., writing for the Court. Petitioner is the Commissioner of Internal Revenue; private respondent is Manila Golf & Country Club, Inc.; the Court of Tax Appeals was the tribunal whose decision was assailed before the Supreme Court.The controversy arose from the enactment of Republic Act No. 6110 (effective September 1, 1969), which inserted Section 191-A imposing a caterers tax on proprietors or operators of restaurants, refreshment parlors and other eating places (including clubs), with graduated rates and a special 20% rate for eating places "maintained within the premises or compound of a hotel, motel, resthouse, ..." Manila Golf & Country Club, a non-stock corporation operating a clubhouse with lounge, bar and dining room exclusively for members and their guests and charging on a cost-plus basis, was assessed by the Bureau of Internal Revenue for fixed taxes as operator of golf links and restaurants and for percentage (caterers) tax for the period September 1969 to December 1970 in the amount of P32,504.96.
The Club protested, invoking the presidential veto message of August 4, 1969, directed at Section 42 of House Bill No. 17839 (the bill that became R.A. No. 6110), in which then‑President Marcos stated he had "vetoed the following items" including, inter alia, the insertion of a new Section 191-A. The President’s veto message gave both a general reason (tax burden shifts to consuming public) and a particular reason (hotel development might be restrained). The House Ways and Means Committee and later publications of the Official Gazette reflected an interpretation that the veto should be read as deleting the words "hotels, motels, resthouses" while leaving the remainder of Section 191‑A intact.
The Court of Tax Appeals (CTA), in CTA Case No. 2630, sustained the Club’s position, concluding that the presidential veto was clear and unqualified and that the vetoed provision (Section 42 carrying Sec. 191‑A) was thereby removed; the CTA relied in part on a 1972 communication from the Office of the President confirming the veto. The Commissioner sought relief in the Supreme Court by petition, challenging the CTA’s dec...(Subscriber-Only)
Issues:
- Did the President’s veto of Section 42 of House Bill No. 17839 (later R.A. No. 6110) nullify the entirety of Section 191‑A, or did it pertain only to the inclusion of hotels, motels and resthouses in the 20% caterers‑tax bracket?
- Is Manila Golf & Country Club, Inc. liable for the caterers tax assessed under Secti...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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