Case Summary (G.R. No. 222886)
Antecedent Facts
Manila’s 2013 Omnibus Revenue Code imposed a percentage tax on retailers’ gross sales—3% for sales between ₱50,000 and ₱400,000, and 1% for sales above ₱400,000. Retail operators challenged Section 104 before the Secretary of Justice as unconstitutional under Article X, Section 5 (1987 Constitution) and as violative of the LGC’s 10% ceiling on rate adjustments (Section 191) and other Code limitations.
Administrative Proceedings Before the Secretary of Justice
The operators’ appeal complied with LGC Section 187’s 30-day filing requirement. The Secretary issued an Order requiring the City’s comment, then on April 7, 2014, declared Section 104 void for exceeding the 10% adjustment limit set in Ordinances Nos. 7794 and 7807 (1993), Manila’s initial revenue ordinances under the LGC.
Proceedings in the Regional Trial Court
The City filed a Motion for Reconsideration with the Secretary (administratively unnecessary under Section 187) and concurrently filed a Petition for Review Ad Cautelam before the RTC. The RTC treated it as a Rule 65 certiorari petition but dismissed for lack of jurisdiction.
Proceedings in the Court of Appeals
On appeal by certiorari, the CA reversed the RTC’s dismissal, ruling that:
- No prior motion for reconsideration before the Secretary was required by the LGC;
- The LGC does not mandate elevation to the Office of the President;
- Jurisdiction properly lay with the RTC for certiorari.
The CA remanded for further proceedings, declining to rule on Section 104’s validity.
Issues on Review
- Whether the RTC had jurisdiction to entertain the City’s Petition for Review Ad Cautelam.
- Whether the City committed forum shopping by filing parallel remedies.
Procedural Analysis and Ruling
• Timeliness: The appeal to the RTC was timely under Section 187 (30 days from receipt of the Secretary’s resolution).
• Proper Remedy and Forum: The Secretary’s resolution on a tax ordinance exercise of quasi-judicial power. Review lies by petition for review under Rule 43 or, to correct grave abuse of discretion, by certiorari under Rule 65. Section 4, Rule 65 vests exclusive original jurisdiction in the Court of Appeals for acts of quasi-judicial agencies. The RTC therefore lacked jurisdiction.
• Forum Shopping: A motion for reconsideration is not an available remedy under Section 187; its filing did not divide causes of action or risk conflicting rulings. The City’s certification and disclosure of that motion do not implicate forum shopping.
Accordingly, the CA erred in remanding to the RTC.
Substantive Ruling on Tax Adjustment Limits
Under LGC Sections 143(d), 151, and 191, Manila’s initial tax ordinance (Ordi
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Antecedent Facts
- On November 26, 2013, the Manila City Council enacted Ordinance No. 8331, the “2013 Omnibus Revenue Code of the City of Manila,” approved by Mayor Estrada on December 3 and published on December 6–8, 2013.
- The Ordinance took effect on December 9, 2013 and was implemented on January 2, 2014.
- Section 104 imposed a percentage tax on retailers’ gross sales: 3% on sales between ₱50,000 and ₱400,000, and 1% on sales over ₱400,000.
Administrative Appeal Before the Department of Justice
- January 6, 2014: Several retail operators filed an appeal with Secretary of Justice De Lima, challenging Section 104 as unconstitutional (violating Art. X, Sec. 5 of the Constitution) and in excess of LGC limits (Secs. 130, 143, 186, 191).
- February 3, 2014: DOJ ordered the City of Manila to comment, thus “acting upon the appeal.”
- April 7, 2014: Secretary De Lima issued a Resolution declaring Section 104 void for violating the 10% maximum adjustment rule of Sec. 191, LGC.
Proceedings Below
- April 24, 2014: City of Manila moved for reconsideration before the DOJ (though Sec. 187, LGC does not require or recognize this remedy).
- May 15, 2014: Without awaiting the DOJ ruling, the City filed a “Petition for Review Ad Cautelam” in RTC Manila, assailing the DOJ Resolution as grave abuse of discretion.
- July 25, 2014: RTC dismissed the petition for lack of jurisdiction.
- October 30, 2014: RTC denied reconsideration.
- July 9, 2015: CA set aside the RTC dismissal and remanded for further proceedings, holding that