Case Digest (G.R. No. L-11175)
Facts:
Jai Alai Corporation of the Philippines v. Court of Tax Appeals and the Collector of Internal Revenue, G.R. No. L-11175, October 20, 1959, the Supreme Court En Banc, Labrador, J., writing for the Court.Petitioner Jai Alai Corporation is a Philippine corporation operating Basque pelota (jai alai) with betting under Commonwealth Act No. 485 and implementing Executive Orders Nos. 135 and 168 (1948). The corporation began operations about 1940; under the statutory scheme the land and buildings where the games were conducted would become government property after 25 years of operation. The Executive Orders regulated permits, license fees, days and hours of operation, installation of totalizators, and the distribution of wager proceeds between the operator, the National Treasury and dividends to winning bettors.
On October 26, 1954 an examiner of the Collector of Internal Revenue assessed amusement taxes on gross receipts from admissions for the period June 18, 1949 to December 1954 (the examiner's figure appears as P62,586.85), and the Collector issued an order requiring payment of deficiency amusement taxes, surcharges and a real estate dealer's fixed tax in the aggregate (stated at P61,586.85 in the Collector's order). Petitioner protested the assessments to the Bureau and ultimately sued. The Court of Tax Appeals affirmed the Collector's order in full. Petitioner appealed to the Supreme Court from the decision of the Court of Tax Appeals.
Petitioner raised multiple grounds: (1) that under Commonwealth Act No. 485 and its implementing EOs it had a contractual franchise-like status exempting it from taxes not expressly enumerated (and that additional taxes would impair contractual obligations); (2) that it was not liable for a 20% deficiency amusement tax for certain periods and items (unclaimed dividends, breakages, management fees, admission fees for May 4, 1948 to June 17, 1949); (3) that after the amendment by Republic Act No. 418 removing the words “and Jai Alai” from the provision imposing 20% on race tracks and Jai Alai, petitioner was exempt from the graduated percentage taxes under paragraph 1 of Section 260, C.A. 466; (4) that petitioner should not be subject to the real estate dealer’...(Subscriber-Only)
Issues:
- Does petitioner have a contractual exemption from taxes not enumerated in Commonwealth Act No. 485 (and consequent protection under the Contract Clause) such that the assessed taxes are unconstitutional?
- Is petitioner liable for the 20% amusement tax on unclaimed dividends, breakages, management fees, and admission fees for May 4, 1948 to June 17, 1949?
- Did the amendment by Republic Act No. 418 (which omitted “and Jai Alai” from the 20% provision) exempt Jai Alai from the graduated percentage taxes in paragraph 1 of Section 260, C.A. 466?
- Is petitioner liable for the real estate dealer’s fixed tax under Section 194(s), C.A. 466, as amended by Republic Act No. 588?
- Is petitioner entitled to the return of P75,000 deposi...(Subscriber-Only)
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)