Case Digest (G.R. No. 221780) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In Manila Electric Company (MERALCO) vs. Province of Laguna and Benito R. Balazo, decided on May 5, 1999 under G.R. No. 131359, MERALCO held municipal franchises granted by Biñan, Sta. Rosa, San Pedro, Luisiana, Calauan, Cabuyao and, on January 19, 1983, by the National Electrification Administration for Calamba, Laguna. After the enactment of Republic Act No. 7160 (Local Government Code of 1991) effective January 1, 1992, Laguna Province adopted Provincial Ordinance No. 01-92 effective January 1, 1993, imposing a franchise tax of fifty percent of one percent (0.50%) of gross annual receipts on franchised businesses. The Provincial Treasurer demanded payment, prompting MERALCO to pay under protest ₱19,520,628.42 and to seek a refund on the ground that Presidential Decree No. 551 already imposed a two percent (2%) franchise tax in lieu of all taxes. After the Provincial Governor denied the refund on August 28, 1995, MERALCO filed on February 14, 1996 a complaint for refund with p Case Digest (G.R. No. 221780) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Grant of Franchises
- Municipal councils of Biñan, Sta. Rosa, San Pedro, Luisiana, Calauan and Cabuyao adopted resolutions granting MERALCO franchises to supply electric light, heat and power.
- On January 19, 1983, the National Electrification Administration likewise granted MERALCO a franchise to operate in Calamba, Laguna.
- Enactment of Local Tax Ordinance
- Republic Act No. 7160 (Local Government Code of 1991), enacted September 12, 1991 and effective January 1, 1992, vested local government units (LGUs) with power to create revenue sources and levy taxes, fees and charges.
- Pursuant thereto, the Province of Laguna enacted Provincial Ordinance No. 01-92 (effective January 1, 1993), imposing a franchise tax of fifty percent (50%) of one percent (1%) of gross annual receipts within the province.
- Protest, Refund Claim and Litigation
- The Provincial Treasurer demanded payment; MERALCO paid ₱19,520,628.42 under protest and claimed that Presidential Decree No. 551’s two-percent (2%) franchise tax “in lieu of all taxes” precluded any local levy.
- The refund claim was denied on August 28, 1995. MERALCO then filed a refund complaint with the RTC of Sta. Cruz, Laguna on February 14, 1996, and paid additional taxes under protest totaling ₱27,669,566.91. The RTC dismissed the complaint on September 30, 1997 and upheld the provincial ordinance.
Issues:
- Whether Laguna Provincial Ordinance No. 01-92, sec. 2.09, violates the non-impairment clause of the Constitution and Section 1 of P.D. 551.
- Whether RA 7160 (Local Government Code of 1991) repealed, amended or modified P.D. 551.
- Whether the doctrine of exhaustion of administrative remedies applies in this case.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)