China Banking vs. City Treasurer of Manila

 G.R. No. 204117               July 1, 2015

CHINA BANKING CORPORATION, Petitioner,

vs.

CITY TREASURER OF MANILA, Respondent.

FACTS:

CBC was assessed by City Treasurer of Manila of local business tax, business permits, and other fees. 

On January 15, 2007, CBC paid such and protested, thru a Letter dated January 12, 2007, the imposition of business tax under Section 21 of the Manila Revenue Code in the amount of ₱154,398.50, on the ground that it is not liable of said additional business tax and the same constitutes double taxation.

City Treasurer of Manila acknowledged receipt of CBC 's payment under protest.

On March 27, 2007, CBC wrote a letter-reply to City Treasurer Letter dated February 8, 2007, reiterating that CBC already protested the additional assessment under Section 21 of the Manila Revenue Code in its Letter dated January 12, 2007. In the same Letter, CBC averred that pursuant to Section 195 of the Local Government Code ("LGC ''), City Treasurer had until March 16, 2007 within which to decide the protest, and considering that CBC received the Letter dated February 8, 2007, four days after the deadline to decide and City Treasurer did not even resolve the protest, CBC formally demanded the refund of the amount of ₱154,398.50, representing the business tax collected under Section 21 of the Manila Revenue Code.

On April 17, 2007, CBC filed a Petition for Review with the RTC of Manila raising the sole issue of whether or not respondent is subject to the local business tax imposed under Section 21 of the Manila Revenue Code.

CBC insisted on the invalidity of the City Treasurer’s assessment, this time, claiming that its petition for review filed with the RTC was timely filed. It explained that the 60-day period within which the City Treasurer should have acted on the protest, and the consequent 30-day period within which it had to appeal the inaction of the City Treasurer should have been reckoned not from January 15, 2007, when it filed its letter questioning the imposition and paid the assessed amount, but from March 27, 2007, the day it filed the letter reiterating its objection to the City Treasurer imposition of ₱154,398.50 and demanding the return of the said amount. With the reckoning point being March 27, 2007, CBC argued that the petition for review was filed well within the reglementary period because it had until June 25, 2007 to file the said appeal.

RTC rendered its decision granting the petition filed by CBC and ordered the City Treasurer to refund the amount of ₱154,398.50, representing the assessment paid by it under Section 21 of Manila Ordinance No. 7988, as amended by Tax Ordinance No. 8011.

RTC denied the motion for reconsideration filed by the City Treasurer.

Hence appeal to CTA Division, the latter reversed the decision of the RTC, effectively dismissing CBC’s protest against the disputed assessment. CBC sought reconsideration of the decision, but was denied by the CTA Division.

Aggrieved, CBC elevated the matter to the CTA En Banc. CTA En Banc affirmed the ruling of the CTA Division in toto. CBC filed its motion for reconsideration of the said decision but the CTA En Banc denied the same.

Hence, this petition.

ISSUE:

(1) Whether CBC claim for refund should be dismissed for being filed out of time.

(2) Whether RTC has jurisdiction over the case.

RULING:

(1) Yes. While it is true that CBC was able to properly file its protest against the assessment of the City Treasurer when it filed its letter on January 15, 2007, questioning the imposition while paying the assessed amount. In the said letter, the petitioner was unequivocal in its objection, stating that it took exception to the assessment made by the City Treasurer under Section 21 of the city’s revenue code, arguing that it was not liable to pay the additional tax imposed under the subject ordinance and that the imposition "constitute[d] double taxation" and, for said reason, invalid. Despite its objection, it remitted the total amount of ₱267,128.70 under protest "to avoid penalties/surcharges and any threat of closure."

The Court, however, is of the view that the period within which the City Treasurer must act on the protest, and the consequent period to appeal a "denial due to inaction," should be reckoned from January 15, 2007, the date CBC filed its protest, and not March 27, 2007. Consequently, the Court finds that the CTA En Banc did not err in ruling that CBC had lost its right to challenge the City Treasurer’s "denial due to inaction." On this matter, Section 195 of the LGC is clear:

SECTION 195. Protest of Assessment. -When the local treasurer or his duly authorized representative finds that correct taxes, fees, or charges have not been paid, he shall issue a notice of assessment stating the nature of the tax, fee or charge, the amount of deficiency, the surcharges, interests and penalties. Within sixty (60) days from the receipt of the notice of assessment, the taxpayer may file a written protest with the local treasurer contesting the assessment; otherwise, the assessment shall become final and executory. The local treasurer shall decide the protest within sixty (60) days from the time of its filing . If the local treasurer finds the protest to be wholly or partly meritorious, he shall issue a notice canceling wholly or partially the assessment. However, if the local treasurer finds the assessment to be wholly or partly correct, he shall deny the protest wholly or partly with notice to the taxpayer. The taxpayer shall have thirty (30) days from the receipt of the denial of the protest or from the lapse of the sixty (60)-day period prescribed herein within which to appeal with the court of competent jurisdiction otherwise the assessment becomes conclusive and unappealable.

Time and again, it has been held that the perfection of an appeal in the manner and within the period laid down by law is not only mandatory but also jurisdictional. The failure to perfect an appeal as required by the rules has the effect of defeating the right to appeal of a party and precluding the appellate court from acquiring jurisdiction over the case. At the risk of being repetitious, the Court declares that the right to appeal is not a natural right nor a part of due process. It is merely a statutory privilege, and may be exercised only in the manner and in accordance with the provisions of the law.

(2) None. CBC's claim is below the jurisdictional amount of the RTC anchored with Section 33(1), B.P. 129, thus Court finds that the claim of petitioner CBC for refund should be dismissed not only for being filed out of time but also for not being filed before a court of competent jurisdiction.

WHEREFORE, the petition is DENIED.

NOTE:

JANUARY 15, 2007 file sya ng protest

APRIL 17, 2007 sya nag appeal sa RTC

Following sec. 195. 

Di nag act si Local Treasurer within 60 days. Thus, Dapat nag file na sya ng appeal 30days after the lapse of 60 days. Sa case nadelay sya ng 1 araw kasi april 17 na sya nagfile sa RTC. You do the math. Hehehe!