Facts:
Sy Kiong filed an action for
declaratory relief in the
Court of First Instance of Manila to determine whether he was
liable to pay the municipal license tax upon his sales of
flour to
bakeries under
Ordinance No. 2723 of the City of Manila, as amended. Sy Kiong was the owner of a duly licensed grocery store in Manila and an importer of flour who sold flour either to bakeries for the production of bread or to retail dealers for resale. In
September 1948, the
Treasurer of the City of Manila assessed against him
PHP 566.50, representing an alleged
deficiency municipal license tax on his gross sales of flour to bakeries, after deducting sales made to retail dealers for purposes of resale. Instead of paying, Sy Kiong sued for declaratory relief; in his answer, the respondent,
Marcelino Sarmiento, in his capacity as
Treasurer of the City of Manila, admitted the factual allegations but argued that the sales to bakeries were
retail sales and therefore subject to the ordinance. As only questions of law were raised, the case was submitted on memoranda, and on
March 4, 1949, the trial court ruled for Sy Kiong, declaring him
not liable for the tax in question. Sarmiento appealed, and the only issue in the appeal was whether Sy Kiong’s sales of flour to bakeries were
retail or
wholesale; if retail, they would be taxable, but if wholesale, they would not.
Issues:
Whether Sy Kiong’s sales of flour to bakeries for manufacture into bread should be considered
retail sales subject to the municipal license tax under
Ordinance No. 2723, as amended, rather than
wholesale transactions exempt from the tax.
Ruling:
Ratio:
Doctrine: