Case Summary (G.R. No. 198662)
Procedural History
• RTC dismisses ICTSI’s certiorari for non-compliance with LGC § 195/187 requirements.
• CA sets aside RTC dismissal and remands.
• While remanded, Manila continues to collect Section 21(A) tax; ICTSI files amended petition for refund of all subsequent payments.
• RTC again dismisses under LGC § 195.
• ICTSI elevates to CTA Second Division (C.T.A. AC No. 11).
CTA Second Division Ruling
• Finds direct double taxation for Q1–Q3 1999; orders refund of ₱6,224,250.
• Denies claims for later periods: ICTSI failed to substantiate protest dated June 17, 2003 and comply with LGC § 195 protest requirements for each assessment.
CTA En Banc Decision
• Dismisses broader refund petition for lack of merit.
• Holds ICTSI chose § 195 remedy and cannot invoke § 196 post hoc.
• Emphasizes separate and distinct remedies under §§ 195 & 196; “paid under protest” on receipts is insufficient administrative protest.
Concurring and Dissenting Opinion
• J. Casanova: no notice of deficiency assessments after Q3 1999 => § 195 inapplicable
• ICTSI partially complied with § 196 via timely refund claims (2003–2007)
• Would have allowed refunds totaling ₱44,134,449.68
Issues on Review
- Jurisdiction of RTC/CTA over refund claims from Q4 1999 onward despite alleged non-payment of additional docket fees
- Proper remedy (LGC § 195 vs. § 196) for ICTSI’s post-Q3 1999 payments
- Compliance with procedural requirements to entitle ICTSI to the claimed refund
SC Ruling – Jurisdiction and Docket Fees
• Applies Sun Insurance Office, Ltd. v. Asuncion: initial correct payment vests jurisdiction; deficiency in subsequent docket fees does not divest jurisdiction but becomes lien on judgment
• Respondents estopped from belatedly raising fee issue before CTA En Banc; no evidence of bad faith by ICTSI
SC Ruling – Applicable Remedy
• Distinguishes § 195 (challenge to notice of deficiency assessment) from § 196 (recovery of erroneously or illegally collected tax without need for prior assessment)
• No notice of deficiency for Q4 1999 onward; Municipal License Receipts lack “deficiency” element => § 195 not triggered
• Refund claims for later periods must proceed under § 196
SC Ruling – Compliance with § 196
• ICTSI filed written claims for refund with City Treasurer on June 17,
Case Syllabus (G.R. No. 198662)
Facts
- International Container Terminal Services, Inc. (ICTSI), with principal place of business in Manila, renewed its 1999 business license and was assessed two local business taxes under Manila Ordinance No. 7794 (as amended by Ordinance No. 7807):
- A contractor’s tax under Section 18 equal to 75% of 1% of prior year’s gross receipts.
- An additional business tax under Section 21(A) equal to 50% of 1% of prior year’s gross receipts.
- ICTSI paid the additional tax under protest (July 15, 1999) and later continued to pay the Section 21(A) tax to secure business permits.
- No separate “notice of assessment” for deficiency taxes was issued for payments after the third quarter of 1999; collections were evidenced by municipal license receipts.
Procedural History
- ICTSI’s July 15, 1999 protest before the City Treasurer went unanswered; ICTSI filed a Petition for Certiorari and Prohibition in the Regional Trial Court (RTC) of Manila. RTC dismissed for failure to comply with Section 187 of the Local Government Code.
- The Court of Appeals reversed and remanded.
- ICTSI filed an Amended and Supplemental Petition (June 2003), adding refund prayers for taxes paid after Q3 1999. RTC dismissed again for failure to use the remedy under Section 195 of the Local Government Code.
- ICTSI appealed to the Court of Tax Appeals (CTA) Second Division (C.T.A. AC No. 11). In its May 17, 2006 Decision, the CTA Second Division:
- Found direct double taxation by imposing Section 21(A) tax in addition to Section 18 tax.
- Ordered refund of ₱6,224,250.00 for Q1–Q3 1999.
- Denied subsequent-period refund claims for failure to substantiate and comply with Section 195.
- ICTSI’s motion to apply Section 196 (claim for refund) was denied (Feb 22, 2007).
- ICTSI’s Petition for Review with CTA En Banc was dismissed (Sept 5, 2008) for lack of merit; denial of reconsideration followed (Dec 12, 2008).
- ICTSI filed a Petition for Review on Certi