Case Digest (G.R. No. 203754)
Facts:
Film Development Council of the Philippines v. Colon Heritage Realty Corporation, G.R. Nos. 203754 and 204418, June 16, 2015, Supreme Court En Banc, Velasco Jr., J., writing for the Court.Petitioner is the Film Development Council of the Philippines (FDCP); respondents include Colon Heritage Realty Corporation (operator of Oriente Group Theaters, represented by Isidoro A. Canizares), the City of Cebu, and SM Prime Holdings, Inc. (intervenor in one case). The consolidated petitions are Rule 45 petitions for review on certiorari challenging the Regional Trial Courts' declarations that Sections 13 and 14 of Republic Act No. 9167 are invalid and unconstitutional.
In 1993 the City of Cebu enacted City Ordinance No. LXIX (Revised Omnibus Tax Ordinance) imposing an amusement tax (originally up to 30%, later reduced by ordinance) payable by theater proprietors, who were to withhold and remit the tax to the city treasurer. In 2002 Congress enacted RA 9167, creating the FDCP; Sections 13–14 provided that graded (A or B) films would entitle producers to an “amusement tax reward” paid out of amusement tax proceeds collected by cities and municipalities in Metro Manila and other covered highly urbanized and independent component cities, and required proprietors to deduct and remit those proceeds to FDCP for distribution. FDCP alleges that, except for Cebu City, covered LGUs complied with RA 9167.
Beginning January 2009 FDCP, through the Office of the Solicitor General, demanded unpaid amusement tax rewards (plus a 5% monthly surcharge) from several Cebu cinema proprietors and operators, including SM Prime and Colon Heritage; the proprietors largely did not remit. On March–April 2009 producers inquired about unpaid rebates, and on May 18, 2009 the City of Cebu filed a declaratory relief petition with preliminary injunction before the RTC, Branch 14 (Civil Case No. CEB‑35529), seeking to declare Secs. 13 and 14 of RA 9167 unconstitutional. Colon Heritage filed Civil Case No. CEB‑35601 in RTC, Branch 5, raising similar claims. The RTC, Branch 14, issued a TRO on May 25, 2010 enjoining FDCP from collecting the incentive award in Cebu and related acts. SM Prime was later permitted to intervene.
The RTCs ruled against FDCP. In City of Cebu v. FDCP (RTC Branch 14, Oct. 24, 2012) the court declared Sections 13 and 14 unconstitutional as violative of Article X, Section 5 of the 1987 Constitution and ordered various re...(Subscriber-Only)
Issues:
- Did the Regional Trial Courts gravely err in declaring Sections 13 and 14 of RA 9167 unconstitutional for violating the constitutional guarantee of local fiscal autonomy (Art. X, Sec. 5)?
- Was the RTC, Branch 5 correct in declaring the entire RA 9167 unconstitutional, rather than only the challenged provisions?
- Must amounts already remitted under Sections 13 and 14 of RA 9167 prior to finality of this decision be returned (i.e., are ...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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