Case Digest (G.R. No. 158881)
Facts:
- Petron Corporation (Petitioner) was assessed by Mayor Tobias M. Tiangco and Municipal Treasurer Manuel T. Enriquez of Navotas for business taxes amounting to P6,259,087.62.
- The assessment was based on diesel fuel sales from 1997 to 2001, referencing Ordinance 92-03, the New Navotas Revenue Code.
- Petron protested, claiming exemption from local business taxes under Article 232(h) of the Implementing Rules and Regulations (IRR) of the Local Government Code (LGC) and a Bureau of Local Government Finance ruling.
- The protest was denied, and a final demand for payment was issued, threatening closure of Petron's operations.
- Petron filed a complaint for cancellation of the tax assessment with the Regional Trial Court (RTC) of Malabon, which dismissed the complaint and ordered payment.
- Following a closure order from the Mayor, Petron escalated the case to the Supreme Court.
Issue:
- (Unlock)
Ruling:
- The Supreme Court ruled in favor of Petron Corporation, reversing the RTC's decision.
- The Court declared the tax assessment invalid and ordered its cancellation. ...(Unlock)
Ratio:
- The Court interpreted Section 133(h) of the LGC, which prohibits local government units from levying excise taxes on articles under the NIRC and from imposing taxes on petroleum products.
- The prohibition includes all forms of taxation on petroleum products, such as business taxes.
- While local government units can imp...continue reading
Case Digest (G.R. No. 158881)
Facts:
The case involves Petron Corporation (Petitioner) and Mayor Tobias M. Tiangco and Municipal Treasurer Manuel T. Enriquez of the Municipality of Navotas, Metro Manila (Respondents). The events leading to the case began on March 1, 2002, when Petron received a letter from Mayor Tiangco assessing the company for business taxes amounting to P6,259,087.62, based on the sale of diesel fuel from its depot at the Navotas Fishport Complex from 1997 to 2001. The assessment referenced Ordinance 92-03, the New Navotas Revenue Code, although it was not explicitly cited in the letter. Petron protested the assessment, arguing that it was exempt from local business taxes under Article 232(h) of the Implementing Rules and Regulations (IRR) of the Local Government Code (LGC) and a ruling from the Bureau of Local Government Finance stating that sales of petroleum fuels are not subject to local taxation. The protest was denied, and a final demand for payment was issued by the Mayor, threatening closure of Petron's operations if the amount was not paid. Petron subsequently filed a complaint for cancellation of the tax assessment with the Regional Trial Court (RTC) of Malabon, which dismissed the complaint and ordered Petron to pay the assessed amount. Following this, Petron received a closure order from the Mayor, prompting further legal action. The case was brought to the Supreme Court, focusing on the legal inte...