Case Digest (G.R. No. 119122) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In Philippine Basketball Association v. Court of Appeals, the petitioner, Philippine Basketball Association (PBA), received on June 21, 1989 an assessment from the Commissioner of Internal Revenue for a deficiency amusement tax on its 1987 gross receipts amounting to ₱19,970,928.00. The Bureau computed a 15% tax of ₱2,995,639.20, credited a prior payment of ₱602,063.35, yielding a deficiency of ₱2,393,575.85, to which it added a 75% surcharge of ₱1,795,181.89 and two years’ interest of ₱1,675,503.10, for a total of ₱5,864,260.84. On July 18, 1989, PBA protested the assessment; the Commissioner denied the protest on November 6, 1989. PBA then filed on January 8, 1990 a petition for review with the Court of Tax Appeals (CTA), which on December 24, 1993 dismissed the petition for lack of merit and ordered payment of the assessed amount with interest. A motion for reconsideration was denied on April 8, 1994. PBA appealed to the Court of Appeals, which on November 21, 1994 affirmed t Case Digest (G.R. No. 119122) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Assessment and administrative proceedings
- June 21, 1989: Commissioner of Internal Revenue issued assessment for deficiency amusement tax on PBA’s 1987 gross receipts of ₱19,970,928.00, computing a balance due of ₱2,393,575.85 plus 75% surcharge (₱1,795,181.89) and two years’ interest at 20% (₱1,675,503.10), totaling ₱5,864,260.84.
- July 18, 1989: Philippine Basketball Association (petitioner) filed a protest; November 6, 1989: protest was denied by the Commissioner.
- Court of Tax Appeals (CTA) proceedings
- January 8, 1990: Petitioner filed a petition for review with the CTA.
- December 24, 1993: CTA dismissed the petition for lack of merit and ordered payment of the assessed amount with delinquency interest; April 8, 1994: CTA denied petitioner’s motion for reconsideration.
- Court of Appeals (CA) proceedings
- Petitioner appealed to the CA within the reglementary period.
- November 21, 1994: CA affirmed the CTA decision; January 31, 1995: CA denied petitioner’s motion for reconsideration.
- Petition for review on certiorari to the Supreme Court
- Petitioner elevated the case under Rule 45, raising eight assignments of error focusing on (a) national vs. local jurisdiction over amusement tax, (b) interpretation of Local Tax Code Sec. 13, (c) validity and retroactivity of revenue rulings, (d) franchise provision under PD 871, (e) tax treatment of advertising and streamer space cession, and (f) applicability of a 75% surcharge.
- Simplified issues:
- Whether amusement tax on PBA admission tickets is a national or local tax.
- Whether income from cession of advertising and streamer spaces is subject to amusement tax.
- Whether petitioner is liable for the 75% surcharge on the deficiency.
Issues:
- Jurisdiction: Is the amusement tax on admission tickets to PBA games a national tax (bureau of Internal Revenue) or a local tax (provincial government)?
- Tax base: Does the cession of advertising and streamer spaces to a third party (Vintage Enterprises, Inc.) constitute “gross receipts” subject to amusement tax?
- Surcharge liability: Is petitioner liable for the 75% surcharge on the deficiency amount despite good-faith reliance on earlier revenue rulings?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)