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TodayisTuesday,July19,2016

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TodayisTuesday,July19,2016
TodayisTuesday,July19,2016

G.R.No.135928

RepublicofthePhilippines

SUPREMECOURT

Manila

SECONDDIVISION

July6,2007

TEODOROBERDIN,VICENTEALEGARBES,andABELARDODEVERA,inTheirPersonalCapacitiesandas

RepresentativesoftheTUBIGONMARKETVENDORSASSOCIATION,Petitioners,

vs.

HON.EUFRACIOA.MASCARIÑAS,MunicipalMayor;CRESENCIANAL.BALATAYO,MunicipalTreasurer;

SAMUELPURISIMA,INPStationCommander;THEMUNICIPALCOUNCILand/orMUNICIPALITYOF

TUBIGON,PROVINCEOFBOHOL,Respondents.

TINGA,J.:

DECISION

Thisisapetition 1 filedunderRule45seekingtoreviewandsetasidethe26May1998Decision 2 oftheCourtof AppealsinCA­G.R.SPNo.39045andtoannulandsetasidethe24April1995Decision 3 oftheRegionalTrial

Court(RTC),Branch4,Bohol,inCivilCaseNo.4577.

Petitioners Teodoro Berdin, Vicente Alegarbes, and Abelardo de Vera (petitioners), are the President, Vice President,andAdviser,respectively,oftheTubigonMarketVendorsAssociation(Association),anassociationof vendorsdoing businessin Tubigon,Bohol.RespondentsEufracio A.Mascariñas,Narcisa L.Balatayo,and Lt.

AbnerCatalla,ontheotherhand,were,atthetimeCivilCaseNo.4577wasfiled,theMunicipalMayor,Treasurer,

andtheINPStationCommander,respectively,ofTubigon,Bohol.

On14December1988,theSangguniangBayanofTubigonenactedTaxOrdinanceNo.88­11­36 4 increasingthe

taxesandfeesofthemunicipality,totakeeffecton1January1989.

PetitionerBerdin,asPresidentoftheAssociation,wrotetorespondentMunicipalTreasurerrequestingacopyof TaxOrdinanceNo.88­11­36. 5 TherequestwasfollowedbythefilingofaprotestbeforerespondentsMunicipal MayorandMunicipalTreasurer. 6 TheAssociationalsorequestedthesuspensionoftheimplementationofthe

ordinancependingfinaldeterminationofitslegalitybyappropriateauthorities.Thereafter,on27February1989,

petitionerselevated their request for a reviewand suspension of the ordinance to the ProvincialTreasurer of Bohol. 7

Actingonpetitioners’request,EufronioM.Pizarras,ProvincialTreasurer,referredtheletterofpetitionerBerdinto

theMunicipalTreasureron15March1989,andrequestedthelatterofficialtoforwardacopyofTaxOrdinance

No. 88­11­36 to the Department of Finance (DOF), through the ProvincialTreasurer, for reviewand approval pursuanttoSec.8ofExecutiveOrder(E.O.)No.249dated25July1987. 8

Meanwhile,on29March1989,respondentMayorsubmittedacorrectedcopyofTaxOrdinanceNo.88­11­36to

Atty.MelchorP.Monreal,AssistantRegionalDirector,DOFRegionalOfficeNo.7,CebuCity. 9

FinalDemandLettersweresenttopetitionersdeVeraandBerdinon2June1989forpaymentofoutstanding

rental fees and municipal business taxes due under the new tax ordinance, with a warning that their stores/establishmentswillbeclosedandpadlocked. 10 PetitionerswrotetheMunicipalTreasureron13June1989 and requested said official to await the resolution of their protest before taking action on the Final Demand Letters. 11 PetitionersalsosentalettertotheDOFon21August1989askingforthesuspensionoftheordinance pendingresolutionoftheirprotestinviewofthethreatofclosureoftheirstores/establishments. 12

Thereafter, on 4 September 1989, petitionersfiled a Complaint 13 with the RTC of Bohol against respondents Mayor, Treasurer, and INP Station Commander of Tubigon, Bohol, as well as the Municipal Council and/or Municipality of Tubigon, to enjoin respondents from enforcing Tax Ordinance No. 88­11­36, to declare the

ordinance a nullityand,in the eventsaid ordinance isfound to be invalid,to order respondentsto reimburse

excesstaxespaidbypetitioners.ThecasewasdocketedasCivilCaseNo.4577.

14

Tax Ordinance No. 88­11­36 was amended by Tax Ordinance No. 89­10­49 15 dated 17 October 1989, by specifyingthatthecivilremediesavailableincludethe"padlockingoftheestablishmentand/orseizureofproperty and revocation of the permit or license and/or eviction from public property and/or by legal action." 16 The

ProvincialTreasurerapprovedTaxOrdinanceNo.89­10­49on8January1990andheldthatitwaswithinthe

powerofthemunicipalitytoenacttheordinancepursuanttoSecs.60to63,Art.3ofPresidentialDecree(P.D.)

No.231,asamended,ortheLocalTaxCode. 17

EvenbeforetheProvincialTreasurerapprovedofTaxOrdinanceNo.89­10­49,petitionershadearlierreferred

TaxOrdinanceNo.89­10­49totheProvincialProsecutorforreview.TheProvincialProsecutorissuedOpinionNo.

90­1 18 dated3January1990andfoundTaxOrdinanceNo.89­10­49validexceptinsofarasitprovidedforthe padlockingofestablishmentsasamongthecivilremediesavailableagainstadelinquenttaxpayer.Saidofficial wrote the Sangguniang Bayan and suggested an amendment to Tax Ordinance No. 89­10­49 by deleting "padlockingoftheestablishment"asamongthecivilremedies. 19

Meanwhile,on27December1989,theProvincialTreasurersuspendedsomeprovisionsofTaxOrdinanceNo.

88­11­36forfailuretoconformtotheratesprescribedbytheLocalTaxCode. 20 Thus,theSangguniangBayan enactedMunicipalRevenueOrdinanceNo.90­01­54 21 on5January1990toamendthesuspendedprovisionsof

TaxOrdinanceNo.88­11­36.TheProvincialTreasurerfoundMunicipalRevenueOrdinanceNo.90­01­54tobein

conformity with the rates authorized under the Local Tax Code and accordingly lifted the suspension of the provisions of Tax Ordinance No. 88­11­36 that were previously suspended and declared that the same, as amendedbyMunicipalRevenueOrdinanceNo.90­01­54,mayalreadybegivenforceandeffect. 22

Thereafter,on24January1990,theProvincialTreasurerwrotepetitionersinformingthelatterofhisfindingsthat

TaxOrdinanceNos.88­11­36and89­10­49werebothinorderandinaccordwithArt.3ofP.D.No.231and

furtherexplainingthatunderSec.49ofP.D.No.231,apublichearingisrequiredonlywhen"thelocalboardor

councilmayexercisethepowertoimposeataxorfeeonataxbaseorsubjectsimilartothoseauthorizedin[the LocalTaxCode]butwhichmaynothavebeenspecificallyenumeratedherein,"afactnotpresentinthecaseof thequestionedordinances. 23

Petitioners wrote the Provincial Treasurer on 31 January 1990 informing the latter that the Provincial Fiscal

alreadymadeacontraryrulingonTaxOrdinanceNo.89­10­49andthatsincethemunicipalitydidnotappealthe

saidruling,thesamebecamefinal.PetitionersfurtherrequestedtheProvincialTreasurertotransmitallrecordsto the DOF for purposes of appealing the ruling of the Provincial Treasurer and for a review of the questioned ordinancesbyahigherauthority. 24

PetitionerselevatedthefindingoftheProvincialTreasurertotheSecretaryofFinanceon31January1990.They

alsorequestedthesuspensionoftheimplementationofTaxOrdinanceNo.88­11­36pendingitsreviewbysaid

office. 25 On30March1990,GregorioA.Barretto,DirectorIII,BureauofLocalGovernmentFinanceoftheDOF, referredtheappealtotheProvincialTreasurerforcommentand/orrecommendation. 26 TheProvincialTreasurer informedtheDOFthathisofficereviewedandapprovedtheordinanceaftertherateshavebeenfoundtobejust andreasonableandthat,forthoseratesinitiallyfoundbyhimtohaveexceededthemaximumauthorizedbylaw, anamendatoryordinancewasenactedtomeettheobjection. 27

Thereafter,theDeputyDirectorandOfficer­in­ChargeoftheBureauofLocalGovernmentFinance,byauthorityof theSecretaryofFinance,informedtheProvincialTreasurerthattheirdepartmentcannotreviewOrdinanceNo. 88­11­36asrequestedbypetitioners. 28 TheProvincialTreasurertransmittedacopyofthislettertopetitioners. 29

Fouryearslater,on24April1995,theRTCrenderedaDecision 30 inCivilCaseNo.4577,thedispositiveportion ofwhichstates:

WHEREFORE,judgmentisherebyrenderedasfollows:

1–declaringMunicipalRevenueOrdinanceNo.88­11­36,seriesof1988,enactedbytheSangguniang

BayanofTubigon,Boholasvalidandthereforethesamecanbeenforced;

2–declaringMunicipalOrdinanceNo.89­10­49datedOctober11,1989valid,exceptinsofarasitprovides

forthe"padlockingoftheestablishment"asthecivilremediesavailableagainstadelinquenttaxpayer;

3–denyingtheprayerformandamusandreimbursement;

MunicipalOrdinanceNo.88­11­36;

5 – granting FinalInjunction restraining defendants from padlocking the business establishments of the

plaintiffs,thusmakingpermanenttheinjunctiveorderofMay11,1990tothateffect;and

6–dismissingdefendants’counterclaimforinsufficiencyofevidence.

Costsagainsttheplaintiffs.

SOORDERED. 31

Petitioners filed a Notice of Appeal with the RTC, 32 which gave due course to the appeal and ordered the transmittalofthecaserecordstotheCourtofAppeals(CA). 33

On26May1998,theFifthDivisionoftheCArenderedaDecision 34 affirmingintotothedecisionoftheRTC. Theirmotionforreconsiderationhavingbeendenied, 35 petitionersnowcometothisCourtviathisPetitionfor

ReviewunderRule45oftheRulesofCourt.

The issues raised by petitioners in their Memorandum 36 may be summarized as follows: (1) whether the ordinances are valid and enforceable; (2) whether publication was necessary; and (3) whether there was exhaustionofadministrativeremedies.

Thepetitionismeritoriousbutonlyinregardtotheneedforpublication.

Petitionersadoptathree­levelargumentwithregardtothevalidityandenforceabilityofTaxOrdinanceNo.88­11­

36.First,theyasserttheordinancedoesnotexistbyvirtueofrespondentofficials’delayinfurnishingthemwitha

copyofthequestionedordinance.Second,ifTaxOrdinanceNo.88­11­36didexist,itwasnotvalidlyenactedfor

failuretoholdpublichearingsandtohavethesamepublishedpursuanttoSec.43oftheLocalTaxCode.Finally,

petitioners claim, even if Tax Ordinance No. 88­11­36 was validly enacted, the same contains objectionable provisionswhichwouldrenderitinvalidandunenforceable.

Petitioners’misgivingsontheexistenceofTaxOrdinanceNo.88­11­36arebaseless.Thereasonforthedelay

wasadequatelyexplainedandwasevenattributedtopetitioners’failuretopayforthecostofreproductionofthe

ordinance.

TherightofthepeopletoinformationonmattersofpublicconcernisrecognizedunderSec.7,Art.IIIofthe1987

Constitution 37 andissubjecttosuchlimitationsasmaybeprovidedbylaw.Thus,whileaccesstoofficialrecords maynotbeprohibited,itcertainlymayberegulated.Theregulationmaycomeeitherfromstatutorylawandfrom theinherentpower ofanofficer tocontrolhisofficeandtherecordsunder hiscustodyandtoexercisesome discretionastothemannerinwhichpersonsdesiringtoinspect,examine,orcopytherecordmayexercisetheir rights. 38 TheMunicipalTreasurerinthecaseatbarexercisedthisdiscretionbyrequiringpetitionerstopayforthe

costofreproductionofTaxOrdinanceNo.88­11­36.Sucharequirementisreasonableunderthecircumstances

consideringthattheordinanceisquitevoluminousconsistingofmorethanahundredpages.

PetitionersthenassailTaxOrdinanceNo.88­11­36andTaxOrdinanceNo.90­10­49for failuretoholdpublic

hearingspursuanttoSec.50oftheLocalTaxCode.Respondents,ontheotherhand,claimthatapublichearing

wasnolonger necessaryconsideringthattheordinancesinquestionweremerelyrevisionsofanexistingtax ordinanceandnotnewenactments.

ThepertinentprovisionsoflawonthismatterareSecs.49 39 and50 40 oftheLocalTaxCode.

Aperusaloftheseprovisionswouldyieldaconclusionthatthelocalboardorcouncilhasthepowertoimposea

taxorfee(1)onataxbaseorsubjectspecificallyenumeratedintheLocalTaxCode,(2)onataxbasesimilarto

thoseauthorizedintheLocalTaxCodebutwhichmaynothavebeenspecificallyenumeratedtherein,and(3)on

ataxbaseortaxsubjectwhichisnotsimilarorcomparabletoanytaxbaseorsubjectspecificallymentionedor

otherwiseprovidedforintheLocalTaxCode.Publichearingapparentlyisnotnecessarywhenthetaxorfeeis

imposedonataxbaseorsubjectspecificallyenumeratedintheLocalTaxCode.

ThebasisfortheabovedistinctionisthatwhenataxbaseorsubjectisspecificallyenumeratedintheLocalTax Code, the existence of the power to tax is beyond question as the same is expressly granted. Even in the determination of the rates of the tax, a public hearing, even if ideal, is not necessary because the law itself providesforaceilingonsuchrates.Thesamedoesnotobtaininasituationwherewhatisabouttobetaxedis notspecificallyenumeratedintheLocalTaxCodebecauseinsuchasituation,theissuesofwhethertotaxornot andatwhatrateataxistobeimposedarecrucial.Consequently,apublichearingisnecessaryandvital.

AscrutinyofthetaxesorfeesimposedbyTaxOrdinanceNo.88­11­36showsthatsomeofthembelongtothe

secondandthirdcategoriesoftaxesorfeesthatmaybeimposedbyamunicipalitythatrequirepublichearing. Petitionersarethuscorrectinsayingthatapublichearingisnecessaryforitsenactment.WithrespecttoTax

OrdinanceNo.89­10­49,however,weholdthatnopublichearingisnecessaryasitdoesnotimposeanytaxor

fee.Saidordinanceisactuallyarestatement,withillustrations,oftheprovisionsoftheLocalTaxCodeoncivil

remediesforthecollectionofthelocaltaxesandfeesimposedbyTaxOrdinanceNo.88­11­36.

Although a public hearing is necessary for the enactment of Tax Ordinance No. 88­11­36, still we uphold its validity in view of petitioners’ failure to present evidence to show that no public hearing was conducted. 41 Petitioners, as the party asserting a negative allegation, had the burden of proving lack of public hearing. 42 AlthoughtheSangguniangBayan had the controlofrecordsor the better meansofproofregarding the facts allegedandrespondentpublicofficialsassumedanuncooperativestancetopetitioners’requestforcopiesofthe Minutesoftheirdeliberation,petitionersarenotrelievedfromthisburden. 43 Petitionerscouldeasilyhaveresorted tothevariousmodesofdiscoveryunderRules23to28oftheRulesofCourt. 44 Furthermore,petitionerscould havecompelledtheproductionofthesedocumentsthroughasubpoenaducestecumortheycouldhaverequired testimonyonthisissuebyofficialsincustodyofthedocumentsthroughasubpoenaadtestificandum.However, petitionersmadenosucheffort.

Petitioners next claim that the impositions contained in Tax Ordinance No. 88­11­36 exceeded the maximum

allowedbytheLocalTaxCode.Inparticular,petitionersassertthat(1)thetaxesimposedbytheordinanceare

notbasedonthetaxpayers’abilitytopay;(2)thetaxesimposedareunjust,excessive,oppressive,discriminatory

and confiscatory; (3) the ordinances are contrary to law, public policy and are in restraint of trade; (4) the ordinances violate the rule of a progressive system of taxation; and (5) the ordinances are contrary to the declarednationalpolicy.

Thesequestionshavealreadybeenraisedintheirprotestandresolvedbythe27December1989findingsofthe

ProvincialTreasurer.Infact,saidofficialsuspendedsomeoftheprovisionsofTaxOrdinanceNo.88­11­36for

failuretocomplywiththeratesprescribedbytheLocalTaxCode.Furthermore,thesubsequentenactmentof Municipal Revenue Ordinance No. 90­01­54 and its approval by the Provincial Treasurer corrected this non­ compliance with the LocalTax Code. The locallegislative body’s modification of Tax Ordinance No. 88­11­36 throughMunicipalRevenueOrdinanceNo.90­01­54issanctionedbySec.44 45 oftheLocalTaxCode.

Moreover,asthepresumptionofregularityofofficialconductwasnotovercomebypetitioners,thefindingsofthe

ProvincialTreasurermustbeupheld.

Thereislikewisenomeritinpetitioners’contentionthattheProvincialTreasurer’sfindingonthefisheryrentalfees

isflawed.TheLocalTaxCodeprovidesinSec.21thereofthatmunicipalities,intheexerciseoftheirauthorityto

grantexclusivefisheryrightsandlicenseindividualfishinggearsinmunicipalwaters,maylevyorfixrentalsor feesthereforeinaccordancewithsaidsectionandinconjunctionwithotheroperativelawsandregulationson municipalfisheries.OnesuchoperativelawisP.D.No.704 46 whichprovidesforthejurisdiction

oftheBureauofFisheriesandAquaticResourcesinSec.4. 47 Thus,itwascorrectfortheProvincialTreasurerto rule that the fishery rental fees in Tax Ordinance No. 88­11­36 may be given due course provided that prior approvalfromtheBureauofFisheriesandAquaticResourceshasbeenobtained,pursuanttotheprovisionsof

P.D.No.704,asamended.

PetitionersfurtherfaulttheMunicipalTreasurerforthelatter’sfailuretofurnishtheProvincialTreasurerwitha

copyofTaxOrdinanceNo.88­11­36afteritsapproval.Bynotfurnishingthelatterofficialwithacopyofthetax

ordinance,theMunicipalTreasurerfrustratedareviewthereof.

Inthisregard,weholdthatthesubmissionofTaxOrdinanceNo.88­11­36totheAssistantRegionalDirector,DOF

RegionalOfficeNo.7,CebuCitycompliedwiththerequirementofreviewpursuanttoSecs.49and50ofthe

LocalTaxCode,assaidofficialisthealteregooftheSecretaryofFinance,underanexpandedapplicationofthe

doctrineofqualifiedpoliticalagency,where"thePresident’spowerofcontrolisdirectlyexercisedbyhimoverthe

membersoftheCabinetwho,inturn,andbyhisauthority,controlthe

bureausandotherofficesundertheirrespectivejurisdictionsintheexecutivedepartment." 48

Wenowresolvetheissueofexhaustionofadministrativeremedies.

Aperusal of the applicable provisions of the Local Tax Code would show that there are three administrative

remediesavailabletoanaggrievedtaxpayer.Ataxordinancemayeitherbe(1)reviewedorsuspendedbythe

ProvincialTreasurer 49 or theSecretaryofFinance, 50 (2) thesubjectofaformalprotestwiththeSecretaryof Finance, 51 or(3)questionedastoitslegalityandreferredforopiniontotheProvincialFiscal. 52

Inthecaseatbar,petitionersquestionthevalidityofTaxOrdinanceNo.88­11­36forthefollowingreasons:(1)no

publichearingwasconducted;(2)thetaxesimposedthereinarenotbasedonthetaxpayers’abilitytopay;(3)the

taxesimposedareunjust,excessive,oppressive,discriminatoryandconfiscatory;(4)theordinancesarecontrary

tolaw,publicpolicyandareinrestraintoftrade;(5)theordinancesviolatetheruleofaprogressivesystemof

taxation;and(6)theordinancesarecontrarytothedeclarednationalpolicy.

Oftheseissues,thefirst,second,fourthandfifthissuesshouldhavebeenreferredforopiniontotheProvincial FiscalpursuanttoSec.47 53 oftheLocalTaxCode,becausetheyarenotamongthosementionedinSec.44 54 of theLocalTaxCode.Theotherremainingissues,ontheotherhand,arepropersubjectsofaprotestwhichshould havebeenbroughttotheSecretaryofFinance.

However,petitionersdidnotevenbringtheissuesrelativetothelegalityorvalidityofTaxOrdinanceNo.88­11­36

totheProvincialFiscal.WhattheybroughtfortheconsiderationoftheProvincialFiscalwasTaxOrdinanceNo. 89­10­49. Thus, in Opinion No. 90­1, 55 the Provincial Fiscal found said ordinance valid except insofar as it provided for the padlocking of the establishment as among the civil remedies available against a delinquent

taxpayer.TherulingoftheProvincialTreasurerdeclaringTaxOrdinanceNo.89­10­49validandinorderisofno

momentbecause,underSec.47,theopinionoftheProvincialFiscalisappealabletotheSecretaryofJustice.

With respect to the remaining issues proper for a formal protest, petitioners did not bring the same to the SecretaryofFinance.WhattheyfiledinsteadwasapetitionwiththeMunicipalMayorrequestingforasuspension of the implementation of the ordinance "pending final determination of its legality by appropriate authorities." PetitionersthereafterwenttotheProvincialTreasurerreiteratingtheirrequestforareviewandsuspensionofthe

ordinance.Infact,thefirsttimepetitionerswrotetheDOFwason13June1989,whentheymerelyrequested

saidofficialtorequiretheProvincialTreasurertoresolvetheirprotestexpeditiously.

Obviously,petitionersdidnotformallyprotestTaxOrdinanceNo.88­11­36asthesamemayproperlybebrought

notbeforetheProvincialTreasurerbutbeforetheSecretaryofFinance.WhattheProvincialTreasurermerely

conductedwasareviewofTaxOrdinanceNo.88­11­36underSec.44oftheLocalTaxCode,limitingitselftothe

issuesproperforareviewthereof.Thus,saidofficialinitiallysuspendedsomeoftheprovisionsofTaxOrdinance

No.88­11­36fortheirfailuretocomplywiththeratesprescribedbytheLocalTaxCodeandeventuallydecidedin

favor of its validity after the Sangguniang Bayan modified the objectionable provisions thereof via Municipal

RevenueOrdinanceNo.90­01­54.ThatwhatwasfiledbeforetheProvincialTreasurerwasmerelyareviewis

evident from the DOF’s refusal to review the findings of the Provincial Treasurer, which, it said, was made

pursuanttoSec.44oftheLocalTaxCode.

Even if we were to consider petitioners’appealwith the Secretary of Finance as a formalprotest, despite its unseasonableness,still,itwouldbeunavailingsincetheydidnotoffer proofonhowandinwhatmanner Tax

OrdinanceNo.88­11­36couldbeinvalid.Infact,theDeputyDirectorandOfficer­in­ChargeoftheBureauofLocal

GovernmentFinance,byauthorityoftheSecretaryofFinance,notedthatpetitioners’counsel"didnotstatethe

groundsofhisprotestasprovidedunderSection45oftheLocalTaxCode,asamended,inrelationtoSection44

thereof." 56 Verily,mereallegationthatanordinanceisinvalidonthegroundsenumeratedinSec.44oftheLocal TaxCodewillnotworktorebutthepresumptionoftheordinance’svalidity.

Clearly,forfailuretofileaformalprotestwiththeSecretaryofFinance,oralegalquestionwiththeProvincial Fiscal on Tax Ordinance No. 88­11­36’s validity, petitioners cannot be said to have exhausted administrative remediesavailabletothem.

Theunderlyingprincipleoftheruleonexhaustionofadministrativeremediesrestsonthepresumptionthatthe administrativeagency,ifaffordedacompletechancetopassuponthematter,willdecidethesamecorrectly. 57 Therearebothlegalandpracticalreasonsfortheprinciple.Theadministrativeprocessisintendedtoprovideless expensiveandspeediersolutionstodisputes.Wheretheenablingstatuteindicatesaprocedureforadministrative reviewandprovidesasystemofadministrativeappealorreconsideration,thecourts—forreasonsoflaw,comity, andconvenience—willnotentertainacaseunlesstheavailableadministrativeremedieshavebeenresortedto andtheappropriateauthoritieshavebeengivenanopportunitytoactandcorrecttheerrorscommittedinthe administrativeforum. 58

From the above disquisitions, it follows that the validity of the questioned tax ordinances must be upheld. However,theirenforceabilityisanothermatterthatmeritsfurtherdeliberationconsideringtheapparentlackof publicationorpostingofthequestionedordinances.

PetitionersassertthatpursuanttoSec.43oftheLocalTaxCode,certifiedtruecopiesoftheordinanceshould

havebeenpublishedforthree(3)daysinanewspaperorpublicationwidelycirculatedwithinthejurisdictionofthe

localgovernment,orpostedinthelocallegislativehallorpremisesandtwootherconspicuousplaceswithinthe

territorialjurisdictionofthelocalgovernmentwithinten(10)daysafteritsapproval.

ProvincialCircularNo.22­73states:

Alltaxes,feesandchargesauthorizedbytheCodetobeimposedbylocalgovernments,mayonlybecollectedby

thetreasurerconcernedifanordinanceembodyingthesamehasbeendulyenactedbythelocalboardorcouncil

andapprovedinaccordancewiththeprovisionsoftheCode.

Section43oftheCodeprovidesthatwithinten(10)daysaftertheirapproval,certifiedtruecopiesofallprovincial,

city,municipalandbarrioordinancelevyingorimposingtaxes,feesorotherchargesshallbepublishedforthree (3) consecutive days in a newspaper or publication widely circulated within the jurisdiction of the local government,or postedinthelocallegislativehallor premisesandintwoother conspicuousplaceswithinthe territorialjurisdiction ofthe localgovernment.In either case,copiesofallprovincial,city,municipaland barrio revenueordinancesshallbefurnishedthetreasurersoftherespectivecomponentandmotherunitsofalocal governmentfordissemination.

While non­compliance with the foregoing provisions of the Code will not render the tax or revenue ordinancesnullandvoid,stilltheremustbepublicationanddisseminationasprovidedintheCodeto obviateabusesin theexerciseofthetaxing powersand precludeprotestsfromthepeopleadversely affected.Suchpublicationanddisseminationoftaxordinanceswillnotonlybeinconsonancewiththe objectives of the Code to secure fair, just and uniform local impositions but will also enhance the

efficientcollectionofvalidtaxes,feesandothercharges.[Emphasissupplied]1av

v phi1

Thus,itwouldseemthatwhilelackofpublicationdoesnotrenderataxordinancenullandvoid,saidrequirement

muststillbecompliedwithinorder"toobviateabusesintheexerciseofthetaxingpowersandprecludeprotests

fromthepeopleadverselyaffected."Publicationisthusaconditionprecedenttotheeffectivityandenforceability

ofanordinancetoinformthepublicofitscontentsbeforerightsareaffectedbythesame.

Therecordsarebereftofanyindicationthatevidencewaspresentedtoprovepetitioners’negativeallegationthat there was no publication. Neither is there a positive declaration on the part of respondents that there was publicationorposting.EventheRTCandtheCAdecisionsaresilentonthisissue.Consequently,anuncertainty existsonwhethertheordinanceswereindeedpublishedornot.Weresolvethisuncertaintyinfavorofpetitioners andaccordinglyrulethatthequestionedtaxordinancesmustbepublishedbeforethenewtaxratesimposed thereinaretobecollectedfromtheaffectedtaxpayers.

Thisdoesnotmeanhoweverthatthemunicipalityisdeprivedoftheincomethatwouldhavebeencollectedunder

thesubjecttaxordinancesbecausetaxesmaystillbecollectedattheoldratespreviouslyimposed.

Whilewepartiallygrantthispetition,wenotewithdisapprovalpetitioners’commissionofforumshoppingpriorto thefilingofthispetition.Petitionerssimultaneouslyprayedforthesamereliefofsuspensionoftheordinancein

fourdifferentfora.ItshouldberememberedthatpetitionersinitiallyfiledaprotestofTaxOrdinanceNo.88­11­36

withtheMunicipalMayorandtheMunicipalTreasureron11January1989.Evenasthisprotestwasunresolved,

theyelevatedtheirrequestforareviewandsuspensionofthesameordinancetotheProvincialTreasureron17

February1989.Again,inviewofthethreatofclosureoftheirestablishment,petitionerssentalettertotheDOF

on21August1989prayingforthesamereliefofsuspensionoftheordinance.Again,despitethependencyofthe

variousrequests,petitionersfiledCivilCaseNo.4577,againprayingforawritofpreliminaryinjunctiontorestrain

respondents from enforcing the ordinance, a prayer which is essentially a prayer for the suspension of the ordinance.

WHEREFORE, premises considered, the instant petition is GRANTED IN PART. The decision of the Court of Appeals in CA­G.R. SPNo. 39045 is hereby MODIFIEDin that the Sangguniang Bayan of Tubigon, Bohol is

herebyDIRECTEDtocausethepublicationofTaxOrdinanceNo.88­11­36,TaxOrdinanceNo.89­10­49,and

MunicipalRevenueOrdinanceNo.90­01­54forthree(3)daysinanewspaperorpublicationwidelycirculated

withinthejurisdictionofthelocalgovernment,or their postinginthelocallegislativehallor premisesandtwo other conspicuous places within the territorial jurisdiction of the local government. In all other respects, the

decisionoftheCourtofAppealsinCA­G.R.SPNo.39045affirmingthe26May1998DecisionoftheRegional

TrialCourtinCivilCaseNo.4577isherebyAFFIRMED.

Costsagainstpetitioners.

SOORDERED.

DANTEO.TINGA

AssociateJustice

WECONCUR:

(OnOfficialLeave) LEONARDOA.QUISUMBING * AssociateJustice Chairperson

ANTONIOT.CARPIO

AssociateJustice

CONCHITACARPIOMORALES

AssociateJustice

PRESBITEROJ.VELASCO,JR.

AssociateJustice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation before the case was assignedtothewriteroftheopinionoftheCourt’sDivision.

ANTONIOT.CARPIO ** AssociateJustice ActingChairperson,SecondDivision

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the Division Acting Chairperson’s Attestation, it is herebycertifiedthattheconclusionsintheaboveDecisionhadbeenreachedinconsultationbeforethecasewas assignedtothewriteroftheopinionoftheCourt’sDivision.

REYNATOS.PUNO

ChiefJustice

Footnotes

* Onofficialleave.

** ActingChairperson.

1 Rollo,pp.8­29.

2 Id.at454­461.PennedbyJusticeHectorL.HofileñaandconcurredinbyJusticesJesusM.Elbiniasand

OmarU.Amin.

3 Id.at428­435.PennedbyPresidingJudgeAchillesL.Melicor.

4 Id.at279­383.Thetaxesimposedbytheordinanceareasfollows:

ChapterII.MunicipalTaxes

(A)RealPropertyTax

(B)BusinessTax,and

(C)TaxonAdvertisements

ChapterIII.PermitandRegulatoryFees

(A)Mayor’sPermitFeesonBusiness

(B)PermitFeesforGaffer,Referee,Bettaker,PromoterandCashier

(C)CartandSledgeRegistrationFee

(D)LargeCattleRegistrationandTransferFees

(E)Registration/PermitFeesonBicycles,Tricycles,PedicabsandMotorcabs

(F)PoundageFee

(G)RegistrationFeesonFishingBoatsandMotorboats

(H)PermitFeeonParades

(I)RegistrationFeeonCalesaorCaretela

(J)PermitFeeonFilm­MakingandVideoTapeCoverage,and

(K)PermitFeeonAgriculturalMachineriesandotherHeavyEquipment

ChapterIV.OtherPermitandRegulatoryFees

(A)PermitFeeonSandandGravel

(B)BuildingPermitFees

(C)PermitFeeonStorageofFlammable,CombustibleorExplosiveSubtances

(D)PermitandInspectionFeesonMachineriesandEngines

(E)PermitFeeforExcavation

(F)PermitFeeforInspectionandVerificationofSubdivisions

(G)PermitFeefortheUseofSidewalks,Alleys,Roads,Streets,Parks,Plazas,Public

StructuresandBuildings;OtherPersonal/RealOwnedbytheState

(H)PermitFeeforHunting

(I)PermitFeesforotheractivities

ChapterV.ServiceFees

(A)Secretary’sFees

(B)LocalRegistryFees

(C)Clearance,CertificationandOtherSimilarFees

(D)ServiceFeeforHealthExamination

(E)SanitaryInspectionFee

(F)ServiceChargeforGarbageCollection

ChapterVI.MunicipalCharges

(A)MarketFees

(B)FisheryRentalsorFees

(C)SlaughterandCorralFees

(D)RentalofMunicipalCemeteryLots

(E)WaterworksFees

(F)MunicipalServiceFees

(G)ParkingFees

5 Id.at39.PetitionerBerdinreiteratedhisrequestinanotherletter(Id.at42).Healsorequestedacopyof

theMinutesofthedeliberationsoftheSangguniangBayanonTaxOrdinanceNo.88­11­36.

6 Id.at40­41.

7 Id.at43.

8 See 1st Indorsement, id. at 44. Petitioners would subsequently write: (1) the Secretary of Finance,

requestingsaidofficialtorequiretheProvincialTreasurertoresolvetheirprotestexpeditiously(Id.at210),

and(2)theProvincialTreasurer,remindinghimoftheprotestandrequestinghimforeitherasuspensionof

theordinanceoradeterminationofitsvalidity(Id.at209).

The Finance Service Chief of the Local Finance Policy Enforcement Service of the DOF would thereafter refer petitioners’letter to the ProvincialTreasurer for comment within 10 days, with an

inquiry on whether Tax Ordinance No. 88­11­36 had already been reviewed by the Provincial Treasurer, and with instructions that if the ordinance had already been reviewed, the Provincial

Treasurerfurnishhisofficewiththeresultsofthereview(Id.at211).

Forhispart,theProvincialTreasurerwouldagainwritetheMunicipalTreasurerforthelatterofficial totransmitacopyoftheordinancesothatthesamemaybereviewedandtocommentandanswer

theprotestoftheAssociation(Id.at212).

9 Id. at 269. It appears that a copy of the ordinance had earlier been submitted to said official on 29

December1988forreview.

10 Id.at204­207.

11 Id.at208.

12 Id.at213.

13 Id.at32­38.ThecomplaintinCivilCaseNo.4577wasamended(withleaveofCourt)on2February

1990(Id.at75­81).Thefollowingallegationswereadded:

17.Thatinadditiontothegroundssetforthintheirprotest,theordinanceinquestionhave[sic]been

enactedwithoutthemandatorypublichearingwhichisaconditionprecedentunderSecs.49and50

oftheLocalTaxCodesincethesamerefertosimilartaxorfeenotspecificallyenumeratedand/or

notprovidedbylaw;tothefailuretocomplywithSec.5ofExecutiveOrderNo.249whichtookeffect

July1987impl[e]mentedonOct.22,1987,fortheclassificationtobethebasisforfixingthe

maximumtaxceilingsimposable;

xxxx

22.xxxEffortswereexertedtoascertainwhethertheordinancewaspublishedinanewspaperof

generalcirculationorpostedasrequiredbylaw,butPlaintiffswerenotawarethereof;(Id.at78­79.)

The complaintwasfurther amended on 19 October 1991 with the inclusion ofCresenciana P.La Fuente and Samuel Purisima, incumbent Municipal Treasurer and INP Station Commander, respectively,asdefendants.

14 TheRTCissuedawritofpreliminaryinjunctionon11March1990uponpetitioners’filingofabondinthe

amountofP10,000.00.

15 Rollo,p.147.

16 TaxOrdinance No. 88­11­36 merelystated that "[t]he civilremediesavailable shallbe bydistraint of personalpropertyandbylegalaction."

17 Rollo,p.272.TheLocalTaxCode,asamendedbyP.D.No.426,becameeffectiveon30March1974

andhasbeensupersededbytheLocalGovernmentCode.

18 Id.at221­223.

19 Id.at224.

20 Id.at253.SaidofficialwrotetheSangguniangBayan.

Aftercarefulreviewthereof,pursuanttoSection44ofP.D.231,asamended,theimpositionofpermit

andregulatoryfeesarewithinthetaxingpoweroftheSangguniangBayanandtheratesarefoundto

bejustandreasonableasauthorizedunderSection36oftheLocalTaxCode.

However the effectivity of the rates imposed under Section 2B.02 (1­15), (16­b­1­5) of Article B;

Section2C.01(a­h)ofArticleC;Section5A.01(1­7)ofArticleA;Section.5B.01(a­1)(b­c)ofArticle

B; Section 5C.01 (a­e),(h­4) of Article C; Section 6C.01 (d­a) of Article C; and allother ratesnot allowed under P.D. 231, as amended, are hereby suspended pending the enactment of an amendatoryordinancebythatHonorableBodyinordertoconformwiththeratesprescribedunder theLocalTaxCode.

PursuanttoSection30ofP.D.231,asamended,theratesfixedfortherentalsofstalls,boothsand

blocktiendasarealsoherebyapproveditappearingthatthesamearereasonable.

TheFisheryrentalfeesmaybe[sic]givenduecourseprovidedthatpriorapprovalfromtheBureauof Fisheries and Aquatic Resources has been obtained, pursuant to the provisions of P.D. 704, as amended.

Therefore,thesaidordinancemaybe[sic]givenforceandeffectnotearlierthanthedatefixedforits

effectivity,exceptthosesectionsandarticleswhicharedeclaredtobesuspended."

21 Id.at387­400.

22 Id.at401.

23 Id.at252.

24 Id.at254.

25 Id.at255.

26 See1stIndorsement,id.at261.

27 See2ndIndorsement,id.at260.

28 See3rdIndorsement,id.at257­258.Saidofficialwrote:

Apparently,itistheintentionofAtty.Legaspitoraiseaprotestontheimpositionsprescribedunder the said Ordinance. However, he did not state the grounds of his protest as provided for under

Section45oftheLocalTaxCode,asamended,inrelationtoSection44thereof.

For emphasis and clarity, it is informed that tax ordinances of municipalities are reviewed by

ProvincialTreasurerspursuanttotheprovisionsofSection44oftheCode.TheProvincialTreasurer,

byvirtueofitspowertoreview,maysuspendtheordinanceinwholeorinpartonthegroundthatthe tax or fee therein levied or imposed is unjust, excessive, oppressive, confiscatory, or not among thosethataparticularlocalgovernmentmayimposeorwhentheordinanceiscontrarytodeclared nationalpolicy.

Aformalprotestagainstataxordinancemaybefiledbasedonthesamegroundsforsuspendingan

ordinancepursuanttoSection45oftheCode.xxx

29 See4thIndorsement,id.at256.

30 Id.at428­435.

31 Id.at435.

32 Id.at437.

33 Id.at439.TheappealwasdocketedasCA­G.R.SPNo.39045.

34 Id.at454­461.PennedbyJusticeHectorL.Hofileña,concurredinbyJusticesJesusM.Elbiniasand

OmarU.Amin.

35 SeeResolution,id.at467.

36 Id.at507­529.

37 Const.,Art.III,Sec.7states:"Therightofthepeopletoinformationonmattersofpublicconcernshallbe

recognized. Access to official records, and to documents, and papers pertaining to official acts, transactions,ordecisions,aswellastogovernmentresearchdatausedasbasisforpolicydevelopment, shallbeaffordedthecitizen,subjecttosuchlimitationsasmaybeprovidedbylaw."

38 SeeJ.G.Bernas,TheConstitutionoftheRepublicofthePhilippines:ACommentary(FirstEd.,1987),p.

265,citingSubidov.Ozaeta,80Phil.383(1948).

39 SEC.49.Similartaxorfeenotspecificallyenumerated.–Thelocalboardorcouncilmayexercisethe

powertoimposeataxorfeeonataxbaseorsubjectsimilartothoseauthorizedinthisCodebut

whichmaynothavebeenspecificallyenumeratedherein,therateofwhichshallinnocaseexceedthat

fixedforthesimilartaxbaseorsubject.Noordinance,however,imposingsuchataxorfeeshallbe enactedwithoutanypublichearinghavingbeenheldforthepurpose.TheSecretaryofFinanceshall withinsixmonthsfromthedateofreceiptofcopyoftheordinancereviewthesameandthetaxorfee thereinimposedshallaccrue,shouldtheordinancebeapprovedbytheSecretaryofFinance,atsuchdate

asmaybedeterminedandfixedbyhim.(AsamendedbyP.D.No.426)[Emphasissupplied]

40 SEC. 50. Tax or fee not provided for. Where the tax base or tax subject is not similar or comparable to any tax base orsubject specifically mentioned orotherwise provided forin this Code, the local board or council may impose a tax, fee or other imposition thereon. No ordinance, however,imposingsuchataxorfeeshallbeenactedwithoutanypublichearinghavingbeenheld forthepurpose.TheSecretaryofFinanceshallwithinsixmonthsfromthedateorreceiptofcopyofthe ordinance review the same and the tax or fee therein imposed shall accrue, should the ordinance be approvedbytheSecretaryofFinance,atsuchdateasmaybedeterminedandfixedbyhim.(Asamended

byP.D.No.426)[Emphasissupplied]

41 SeeReyesv.CourtofAppeals,378Phil.232(1999),citingFiguerresv.CourtofAppeals,364Phil.683

(1999).

42 Id.

43 SeeReyesv.CourtofAppeals,supranote41at239,citingPeoplev.Pajenado, 142 Phil. 702, 707

(1970).

44 These modes of discovery are the following: (1) Depositions Pending Action, (2) Depositions Before

ActionorPendingAppeal,(3)InterrogatoriestoParties,(4)AdmissionbyAdverseParty,(5)Productionor

InspectionofDocumentsofThings,and(5)PhysicalandMentalExaminationofPersons.

45 SEC.44.Reviewandsuspensionoftaxordinance.­xxxThexxxprovincialtreasurerxxxshallreview

andhavetheauthoritytosuspendtheeffectivityofanytaxordinancewithinonehundredandtwentydays afterreceiptofacopythereof,ifinhisopinion,thetaxorfeethereinleviedorimposedisunjust,excessive, oppressive, confiscatory, or not among those that the particular local government may impose in the exercise of its power in accordance with this Code; or when the tax ordinance is, in whole or in part, contraryto declared nationaleconomicpolicy; or when the ordinance isdiscriminatoryin nature on the conductofbusinessorcallingorinrestraintoftrade.

Whenthexxxprovincialtreasurerxxxexercisesthisauthority,theeffectivityofsuchordinance

shallbesuspended,eitherinpartor,ifnecessary,intoto.Thelocallegislativebody,withinthirty

daysafterreceiptofthenoticeofsuspension,mayeithermodifythetaxordinancetomeet

theobjectionstheretoorfileanappealwiththepropercourt,otherwise,thetaxordinanceor

thepartorpartsthereofdeclaredsuspendedshallbeconsideredasrevoked.[Emphasissupplied]

46 Entitled"RevisingandConsolidatingAllLawsandDecreesAffectingFishingandFisheries."

47 Thefirstparagraphofthisprovisionstatesthat:"TheBureaushallhavejurisdictionandresponsibilityin the management, conservation, development, protection, utilization and disposition of all fishery and aquatic resources of the country except municipal waters which shall be under the municipal or city governmentconcerned:Provided,Thatfishpensandseaweedcultureinmunicipalcentersshallbeunder thejurisdictionoftheBureau:Provided,further,Thatallmunicipalorcityordinancesandresolutions affectingfishingandfisheriesandanydispositionthereundershallbesubmittedtotheSecretary forappropriateactionandshallhavefullforceandeffectonlyuponhisapproval.TheBureaushall also have authority to regulate and supervise the production, capture and gathering of fish and fishery/aquaticproducts."[Emphasissupplied]

48 See also Constantino. Jr. v. Cuisia, G.R. No. 106064, 13 October 2005, 472 SCRA 505; Carpio v.

ExecutiveSecretary,G.R.No.96409,14February1992,206SCRA290,295­296;DeLeonv.Carpio,G.R.

No.85243,12October1989,178SCRA457;Lacson­MagallanesCo.,Inc.v.Paño,etal.,129Phil.123

(1967);Mondanov.Silvosa,97Phil.143(1955);Villenav.SecretaryofInterior,67Phil.451(1939).

49 LocalTaxCode(1974),Sec.44.

50 LocalTaxCode(1974),Secs.49and50.

51 LocalTaxCode(1974),Sec.45.

52 LocalTaxCode(1974),Sec.47.

53 Sec.47.Questiononthelegalityofataxordinance.—Anyquestionorissueraisedagainstthelegality

ofanytaxordinance,orportionthereof,ongroundsotherthanthosementionedinSection44ofthisCode,

shall be referred for opinion to the Provincial Fiscal, in the case of provincial, municipal and barrio tax ordinances,ortotheCityFiscal,inthecaseoftaxordinancesofthecityandbarrioswithinthecity,whose opinionshallberenderedwithinaperiodofthirtydaysafterreceiptbyhimofthequeryorprotest.The opinionoftheProvincialorCityFiscal,asthecasemaybe,shallbeappealabletotheSecretaryofJustice whoshallrenderanopiniononthematterwithinsixtydaysafterreceiptoftheappeal.Thedecisionofthe Secretary of Justice shall be final and executory unless, within thirty days upon receipt thereof, the aggrievedpartyconteststhesameinacourtofcompetentjurisdiction.

54 ThegroundsenumeratedbySec.44arethefollowing:1)thetaxorfeethereinleviedorimposedis

unjust, excessive, oppressive, confiscatory; (2) the tax is not among those that the particular local

governmentmayimposeinaccordancewiththeLocalTaxCode;(3)thetaxordinanceis,inwholeorin

part,contrarytodeclarednationaleconomicpolicy;or(4)theordinanceisdiscriminatoryinnatureonthe

conductofbusinessorcallingorinrestraintoftrade.

55 Rollo,pp.221­223.

56 See3rdIndorsement,id.at257­258.

57 Universityofthe Philippinesv.Hon.Catungal,Jr.,338 Phil.728,747 (1997),citing De los Santos v.

Limbaga,No.L­15976,31January1962,4SCRA224,226.

58 University of the Philippines v. Hon. Catungal, supra, citing R. Cortes, Philippine Administrative Law,

CasesandMaterials394(Rev.2nded.,1984).SeeHon.Caralev.Hon.Abarintos,336Phil.126(1997).

TheLawphilProject­ArellanoLawFoundation

Hon . Caralev.Hon.Abarintos ,336Phil.126(1997). TheLawphilProject­ArellanoLawFoundation