CTA_00_CV_04630_D_1993JUL27_ASS.pdf

8/9/2019 CTA_00_CV_04630_D_1993JUL27_ASS.pdf

1/17

HEPlJBl.lC

OF THE

PHTLTPPJNES

COUHT F TAX APPEALS

UtiEZ

UN CITY

REPIJ BL1C BHOAOCASTING

SYSTEI I.

I NC

.

Petitioner,

-

v e r s u s

- C.T.

A. CASE NO. 4 630

C O H M I S S I O N ~ R

OF INTERNAL

REVENUE,

Re s p o n d e n t.

X - - - -

- - - - -

Y

E

c

_L

I 0

T h i s c a s e i n v o l v

e s

a

q u e

s

tion o

w h e t h e r o r n o t

a d o mr > s t . i c cqrroration, e ng a g e d

in t h e b u s i n e s s o f

r

a d i o a n d t e

l.

e v i s i o n b r o a d c a s t i n g by

virtu e o f a

m

ere p e r m i t

a nd

/o

r license, is liable f o r a

f r a n c h ise t a x .

T h e fact s a r e u n d i s p u t e d .

Re s p o n d e n t C o m m i s s i o n e r o f Internal Re

v e n u e

iss u e d

t w o assr : ss rn F

n t n

otices

,

b o t h d a t e d J u n e 18

,

1 9 9 0 a g a i

n

st: petitioner,

a

c o

r p o r a t i o n or{:lani.

z.e

rl

a n d

existing

u n d r r a n d by virtue

o

t h e l a w s

o f

t h e

Ph i J i p r i n

e s f

rn -

d p

:f ' c i e n cy

f t

a nell i s e ta x f o r

t h e

t h i rd a

nd f o u r l

: h quarters o f 1 9B 7 , d e t a : i l s o f wh ic h

a r e

s h o wn b P J 1 w:

H ~

)


2/17

DECISION -

T

A CASE NO. 4630.

- 2 -

1 9 8 7

. De.f i c i

enc

y

F r a n c h i s e .

_

~

Gross Ta x a b le Rece i p t s

Tax

Due:

5 ~

3 ~

D e f i c i e n cy

Add

: S ur

c h a r

ge

~

In t e r e s t 5 0 ~ >

f rom

1 /

2

1/87

to

5 /

15/90

Compromis

e pe n a l ty

f.()UJlJ'H. QUARTER

Gro ss Taxab le

Rece

ipts

Tax

Due:

5 ~

3 ~

D e f i c i e n

cy

Add: S u r c h a r q e < 2 5 ~ >

I n t e r e s t

5 0 ~ >

f rom

1 / 2 1187 to

6 / 1 5 / 9 0

Comp romisP p

e n a l t

y

p 3 , 5 2 0 ,

1 6 5 .9 0

-----_ ;?.. ? 3

J t ~

p 3 ,6 6 1 , 1 6 5 .7 5

915,

291.

43

2 ,745

,

8 7 4 .3 0

- _

_

_ _

QQ9

. QQ

~ ] ~

~ ~

~ ~

~

p

4 , 5 9 8 , 5 4 9 . 7 7

1 ~ 1 . __ ~ 9 ,

52

p 4 ,793 ,0 39 .39

1 , 1 9 8 , 2 7 4 . 8 5

2 , 8 1 5

,

945 .89

____ .....

...

.15,

OOQ.

OQ

e.

8 - - - ~

~ ~ L 3 ~ Q _ ~

The

a s s e s s me n t s t o t a l l i n g P16, 159 ,

65

1 . 6 1

were

p r o t e s t e d

by p e t i t i o n

e r on Ju l y 2, 1990 a l l e g i n g

t h a t t h e y ha ve n o b a s i s in law s i n c e p e t i t i o n e r a t

t h a t t ime wa s not

~

u b j e c t to th e f r a n c h i s e t ax und

e r

t h e

Tax

Code

On Jun e 2 1 , 1 391, r e s p o n d e n t i s su ed h i s

f i n a l

d e c i s io

n

da ted M ~ y 6,

1

991 denyinq p e t i t i o n e r s

p r o t e s t .

Hen

c e

,

t is p e t i t i o n

f o r r e v ie w .

...

. ) t

1-


3/17

DECISION

-

C T A

CASE NO 4fi30.

- 3 -

Petitio

n

e r

in

its

Memorandum,

states

that

it

was

a

g r a n t e e

o f a legislative f r a n c h i s e

u n d e r

R e p u b l i c Act No. 513 a s amended by

R.A.

No. 982

and

R.A.

No. 5351

t o

c o n s t r u c t m a i n t a i n

a n d o p e r a t e stations

: for

r a d i o

a n d

television b r o a d c a s t i n g .

t c o n t e n d s t h a t t h e : f r a n c h i s e was

e x i s t i n g

and

o p e r a t i v e

u n t i

l

its

t e r m i n a t i o n e : f f e c t i v e

December

3 1

1

98

1 a s

ma n d a t e d

by

P r e s i d e n t i a l D e c r e e P.

D. >

No.

576-A

t h e p e r t i n e n t

p r o v i s i o n s o:f which

r e a d

a s

: fo l low

s :

SECTION

1 . No

r a d i o

station o r

television c h a

nneJ

may o b t a i n a

: f r a n c h i s e

u n l e s s it h a s su f f i c i e n c y CCif i tal on t h e

b a s i s o f eq

u

ity f o r its

o p e r a t i o n

f o r at

least

one 1

> y e a r

, i n c l u d i n g

p u r c h a s e o f

e q u i p m e n t .

XXX XXX

XXX

SECTION 6 . A l l : f r a n c h i s e s

g r a n t s

l i c e n s e s p e r m i t s certificates o r o t h e r

: fo rms o f

a u t h o r i t y

t o o p e r a t e r a d i o o r

tele

v i s i o n

b r

o

ad

c a

s t i n g s y s t e

ms ~ h l l

t e r m i n a t e

on

Decl?mber 31 ' 1981 .

T herea f t .P

r , i

rr

Sp l ?c t i ve

o f a

ny

f r a n c h i s e

g r a n t ,

lj

c ensl?, p e

r m i t

c e rtificate o r

o t h e r

f

o r ms o f a u t h o r i . ty

t o

o

p e r a

te

q r a n t e d by any

o f f i c e

aq e n c y o r p e r s o n

no r a d i o o r

televi s

i o n station

sh

all be

a u t h o r i z

Pd

t ~ o p e r a t e wi t h o u t t h e

a u t h o r i t y

o f t h e

Board

o f Cnm m uni c a t i on s

and t h e S me n t with , a

d e

c i s i o n o f th

e

a f o r e m e n t

i

on

e d

a u t

h

o r

i

ties


4/17

DECIS ION -

C.T.A. CASE

NU.

4630.

i

may bF ? a p p e a l e d

fi

n a l l y to

t h e O f f i c e

o f

t h e

P re

sid e n t

wi th in

f i f t e e n (15> days

f rom

t h e d a t e t h e d e c i s i o n is r e c e i v e d by

t h e pa r t y i n i n t e r e s t .

P e t i t i o n e r

a v e r

s t h a t d u r i n g

t h e

p e r i o d f rom

January

1, 19B2 up

to

J u l y 31, 199 2

it c o n t i n u e d t o

o p e r a t e

its

r a d i o

and

t e l e v i s i o n

b r o a d c a s t i n g

s t a t i o n s

by

v i r t u e

o f mere p e r m i t s

a n d / o r

l i c e n s e s

i s s u e d

on

a y e a r l y b a s i s

by t h e

N a t i o n a l

Telecommuni c a t i o n s Commiss ion and t h a t it

o n l y

o b t

a i n e d a

f r a n c h i s e t h r o

ugh

t h e

e n a c t ment o f

R.

A.

No.

7252

which t o o k e f f e c t on August 1, 1992.

F ur the r ,

p e t i t i o n e r no te s

t h a t :

Th us to insist t h a t p e t i t i c m e r

c o n t i n u e d

to

be

a

f r a n c h i s e h o l d e r

n o t w i t h s t a n d i n g P. D. 576-A

and

p r i o r to

t h e pa

s s a g e

o f R.

A.

7252 a s h e r e i n b e f o r e

me n t ioned would be an

i l l o g i c a l

pr opos

i t i o n

.

If t h e f r a n c h i s e

o f

p e t i t i o n e r , a s a r gued by r e s p o n d e n t ,

was

no t t e r m i n a t e d hy P. D. 576 - A t h e n t h e r e

wo u l d have been no need f o r

p e t i t i o n e r

to

app ly

f o r

a new

f r a n c h i s e and f o r

Co ngr

e s s

to

pa

s s a

law g r a n t i n g t h e

same

un

to

pe i t i o n e r . The f ; :wt t h a t R. A. 7252 was

p a s s e d i n t o

J = W

p l a i n l y demonst

.

r a t

.e s

t h a t

p r i o r to its enac tmen t in 1992, p e t i t i o n e r

w

a s

no t

a

ho ld

e r

o

any

f r a n c h i s e tn

o p e r a t e its broad c a s

t i n g

s t a t i o n s . It is

p r e c i

s e l y

f o r

th e

a f o r e s a i d

r e a s o n

t h a t

pe t . i t i on P r wa s no t s u b j e c t t o t h e

f r a n c h

i s e

t

ax frnm

19 8 2 to J u l y

1992,

f o r

S e c t i o n

7

a s h e r

e i n b e f o r e quo ted ,

e x p r e s s l y impo seR a

f r a n c h i s e

t a x

on ly in

r e s p e c t to all f r a n c h i s e s upon t h e g r o s s

r e c e i p t s f rom t h e

bus ine s s

cove r ed

by

t h e

law g rr)n t i nq

t he

f r a n c h i s e S i n c e

p e t i t.i r>n r:>r had rt=>;;u:;ed to o p e r a t e

unde r

a

f r a n c h

i sr> a s o f Decem her 3

1, 1981, no

IJ

Rsi .

t lt rrt=>

ff lr

e x i s t s f rom t h a t d a t e un ti . l

) 0

I


5/17

DECI

SION -

C T A CASE

NO

4&30.

- 5 -

u ly

31 , 1'392

f o r

t he im pos i t i on

o f

t h e

f r an ch i s e t ax aga i n s t pe t i t i o n

e r .

Respondent ,

on t he

o t h e r

hand advanced

t h e

f o l l owing arguments to su

ppor t

h i s

a s s e s smen t s

.

F i r s t l y ,

he

c l a ims

t h a t a l t hough S ec t i on 6 o f

P.O. No. 7 6 v o k t he e a r l i P r f r an ch i s e gr an t ed

t o

pe t i t i o n e r , n eve1

t

he

l e s s , such f r a n ch i se wa s

sub s

e

qu

e n t l y

t e s to red o r r e i n s t a t e d

by wa y

o f

a

co r r e s pond i ng a u t h o r i t y o r l i c ense du ly i s sued by

t he Board

of

Communica t ions

and

t he S e c r e t a r y

o f

Pub l

i c

Works

and Communicat io

n s .

It is t he con ten t i o n

of

t h e

r esp

onden t

t h a t

t he

au t ho r i t y o r l i c en s e issu e

d in

f avor

o f

t h e pe t i t i o n e r to o k

t he

p lace o f a

f r an ch i s e maid

q it po s s i

b l e fo r th e pe t i t i o n e r

to

eng age in b r n ~ d c s t i n q

ope r a t i on s

u n i n t e r r up t ed ly

con s i d e r i ng th


6/17

DECISION

-

C T A

CASE NO.

4630.

- 6 -

on Republ i c B ro a d c a s t i n g System and

you

recommended an

assessme

n t

f o r t h e

d

e f i c i e n c y f r an c h i s e t ax f o r t h e

se c o n d semes t e r

o f 1987 . May

w know

.

t h e

b a s i s

of

your r ec om menda t ion ,

Mad::Jm Witn e s s ?

A. Th e b a s i s o f my r e

co

mmenda t i o n on t h e

d

e f i c i e n c y

f

r a n c h i se t ax

f o r t h e

se c

ond seme s t e r 1987 was be c a u se as

p r

.e

sc

r i b

e>

d

hy

E x e c u t i v e

Order 72 ll

f r an c h i

se>

hold e

r s

a r e t axab

l e

und e r

f r an

c h i.

s e

t

ax

.

XXX XXX XXX

Q .

In your se c ond memorandum

Madam

W

i t n e s s

, you r e i t e r a t e d t h i s

t ime

th a t

t

he

Re p u b l

i c B ro a d c a s t i n g

System

is

l b l e

fo r

d e f i c i e n c y

f r a n c h i s e

t

ax fo r t h e

second

semes te

r

o f 1987 .

May we

know

your b

a s i s ,

Madam

Wi tne>ss?

A

XXX

e

r

E

xPc

u t i v e

Order

No.

72,

it

sa y

s

t h a t

Sec t j o

n

3 o f Execu t ive

O

r d e r

No. 72

s t a t e s

t h a t

t

he

pe r t i n P

n t p r o v i s i o n

o f t h e c h a r t e r s

o f

f r a n c h i s

e

gran

t e e s

and ll

o t h e r

law

s ,

ord e r s

,

i s su an ces ,

r u l e s and

r

e g u l a t i o

n s o r p a r t s t h e r e o f

in c

o n s i

s t e n t

wit h

t h i s ex ecu t i v e

o rd

e r

re

hereby

r ep ea l ed o r m o d i f i e d

a c c o r

d ing ly .

xxx

XXX

XXX

xxx.


7/17

DECISION -

C

A CASE

NO. 4630.

- 7 -

A.

Because we j u s t s t a r t e d t h e

ye a r

1987

whi

ch

t h e E.O. No. 72 beg in ts

e f f

e c t i v i t y , on ly J u l y 1987 .

XXX

XXX

T

S

N

xxx.

Octobe r 22,

R e s p o n d e n t ' s

w it

ne s s

s

o f t h e o p i n i o n t h a t

E.O. No.

72

r e p e a l e d

P.D.

No. 5 76- A.

Her

t e s t i mo n y

howeve r

s

b e r e f t o f any e x p l a n a t i o n

a s

to ts

r e l e vance to t h e a l l e g e d e x i s t e n c e o f p e t i t i o n e r ' s

f r a nc h

i s e

e xc e p t

p e r h a p s t o f o r war d a t h e o r y t ~ t

s in

ce P. D. No.

576

-

A which

r e p e a l e d t h e f ra n c h i s e

o t h e

p e t i

t . ioner , was

s ubs e que n t l y

r e p e a l e

d,

t h e

s a i d f r a n c h i s

e i s

deem

e d r ev ived .

A

nd

t h i r d l y ,

r esponden t

con tended

t h a t

P.

D. N

o.

576 - A d i d no t

ex

p r e s s l y r e p e a l p e t i t i o n e r ' s e x i s t i n g

f r a n c h i s e .

l i e

a r gued

t h a t

t h e Decree

was

promu l g a t e d mere ly f o r t h e purposes o f r e g u l a t i o n

and

avo idance

o

m

onopo l

y i n owne r s h ip

and o p e r a t i o n

o f r a d i o and

t e l e v i s i o n s t a t i o n s

a s

e x p r e s s l y

p r

o v i d e d

i n ts

preamble

.

Ne i the r

d i d

t

g ra n t

pe t i t .

i o n

e.r

t ax exempt ion .

The

s o l

e

i s s u e

be

f o r e t h i s Cour t s

whe t h e r

o r

no t p e t i t i o n e r i s

l

a b l e f o r f r a n c h i s e t a x unde r

S e c t

ion

117 o f t h e T x Code, a s

amended, f o r t h e

)

~

\ . l


8/17

DECISIO N -

C.T.A. CASE

NO

~ 6 3 0

- 8 -

thir

d a

nd f o u r t

h

q u a r t e r s

o f 1

987

am oun t i ng

to

? 1 6 , 1 5 9 , 6 5 1 . 6 1

i n c l u s i v e o f i n c r e m e n t s .

P r i o r

to

t h e p r

o

m u l g a t i o n o:f P.

D.

No.

576-A,

t h e

c o n t r o l l i n g

l aw on r a d i o and

t e l e v i s i o n

o p e r a t i o n

wa s

Act

No. 384

6 ,

a s

amended .

It p r o v i d e s

amon g

o t h e r s t h a t

:

SECTION

1.

No

p e rso n ,

f i r m ,

company, a s s o c i ati

o n

o r

c o r p o r a t i o n s h a l l

c o n s t r u c t , install e s t a b l i s h

,

o r

o p e r a t e

a

r a d i o t r a n s m i t t i n g s t a t i o n o r

a

r a d i o

r e c e i v i n

g s t a t i o n used

f o r

c o m m e r c i a l

p u r p o s e

s

o r

a

r a d i o

b r o a d c a s t i n g

s t a t i o n ,

w i t h o u t

h a v i n g

first o b t a i n e d a : f r a n c h i s e

t h e r e f o r f rom t h e C o n g r e s s o:f

t h e

P h i l i p p i n e s xxx.

SECTION 2. he c o n s t r u c t i o n o r

installation o f any s t a t i o n s h a l l n o t be

begun, u n l e s s

a p

e r mi t t h e r e f o r h a s

been

g r a n t e d by t h e S e c r e t a r y

o f

Commerce

and

I

n d u s t r y .

No s t a t i o n s h a l l

be o p e r a t e d

e x c e p t unde r and

i n

a c c o r d a n c e With

t h e

p r o v i s i o n s o f a

l i c e n s e

issued t he re : fo r by

t h e S e c r e t a ry o f Commerce

and I n d u s t r y

xxx

The Act , a s amended , r e q u i r e d

a

p e r s o n ,

: f i rm,

comp any ,

a s s o c i a t i o n, o r

c o r p o r a t i

on to

: f i r s t s e c u r e

t h e f o l l o w i n g a > a f r a n c h ise f rom

C o n g r e s s ;

b

>

a

perm

i t

t o

con s

tr

u c t

o r

install

a

statio

n

:from th

e

S e c r e t a r y o f Co mme r c e a

nd

I n d u s t r y ;

and a>

a lice n se

to o p e r a t e

a

stat i o n f r o

m

t h e S e c r e t a r y o:f

Commerce

and

I n d u s t r y ,

b e f o r e t h e same c o u l d ope r t e

a

r a d i o

b r o a d c a s t i n g s t a

t i o n .

A f r a n

c h i s e

is a

r i g h

t

o r p r i v i l e g e

g ra

n t e d

by t h e s o v e r e i ~ n t y t n one o r

m

o r e p a r

i e s

to do some

r

.. )

)


9/17

DECIS ION -

C.T.A. CASE

NO

. 4630.

- 9 -

a c t

o r

a c t s ,

which

th

e y

c o u l d

n o t

do

w i t h o u t this

g r a n t f rom t h e

s o v e r e i g n

power ; a

p r i v i l e g e

which

e m a n a t e s

f rom t he sov e r e i g n po we r

o:f t h e

state o r

gov e r n m e n t

; a

branch o f t h e s o v e r e i g n power o:f t h e

state,

s u b s i s

ti ng

in a

p e r s o n o r c o r p o r a t i o n

by

g r a n t : from

t h e

state.


10/17

DECISION -

C.T.A. CASE NO. 4630.

-

1 0

-

f r a n c h i s

e , t h e r i g h t s , p r i v i l e g e s and

o b l i g a t i o n s o f

b o t h

t h e

c o n t r a c t i n g

parties a r e

we

ll d e f i n e d and s e r v e s a s t h e

c o n t r a c t

betw

e e n

them. Such m a t t e r s like

e x t e n t

o f

o p e r a t i o

n ,

a r e a o f r e s p o n s i b i l i t i e s , f r a n c h i s e t a x

t o

be

p a i d , to

t h e

state

, and

t a x

e x e m p t i o n

p r i v i l e g e s a r e r e c i t e d .

I t

is c l e a r t h a t t h e p r o m u l g a t i o n o:f P.

D.

No.

576-A

t e r m i n

a t e d all

existi ng

: f r a n c h i s e s i n c l u d i n g

t h e

p e t i t i o n e r s . The

q u e s t i o n is: Was t h e

p e t i t i o n e r

g iv en

a

new

f r a n c h i s e ?

The S e c r e t a r y

o f

J u s t i c e , in h

is o p i n i o n

d a t e d

J u n e 20

, 1

991, h a s

m

ade this st

a t emen t :

W

e h

?

l i e v e t h a t

E.

0 .

No.

5

46


11/17

DECI :JDN

-

C.T.A. CA SE NU 4630.

- 11 -

Th

a t

t h e

Co n

stituti

o n p

ro

v i d e s i n

Ar t .

XI

T.

Ser:

.

11

that t h e i s s u a n c e

o:f a

f r a n c h i

s e ,

c ~ r t i f i c t e o r

o

ther : form

o:f

a u t h o r i z A t i o n f o r t h e o p e r a t i o n o:f a

p u b l i

c

utility

s h a l l

b e

s u b j e c

t t o

amendm

e

n t

,

a]tPration

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r e p e a l by

C o n g r P

s s dfJes

n n t necessarily i m p l y ,

a s

petition o

r p

osil : >

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th i t

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C:o

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h a

s

t

hr ?

pfJ

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r

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n

t s u c h

au thorization

Our s t r . ~ 11t.P. b o o k s a r e

r e p

l.r.?te w i t h

law

s

g r R n t n q specified a g e n c i e s in t h e

E x

e c u t i v

e

n r R n c h

t h e

power to iss

u e

s u

c h

a u t h o r i ?

'l

ti

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t

a i n

cJ

a s s e s

o:f

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u

b 1

i

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i

l

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A l t h o u q h

P.

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No . 5 7 6 - A

t e r m i n a t e d all existing

: f r anch

ises

a s

o f

December 3

1 ,

1 9 8 1 a n d v e s t e d u n t o

t h e P r e s i d e n t

t h e

pow e r to issue f r a n c h i s e s in his

l egislative c

apacit y,

it

d i d n o t

a b o l i s h

t h e

requir

e me

n t

imposG d

in

S ectio n

1 o f Act No. 3846

a s

amP.n

d ed

.

o n t

r y

t 0

n ?

sp o

n d e n t

s

v i e w ,

S e c t i o n

1

o f P. D.

N

o. 5 6

A m

e r e ly

p r o v i d

e s f o r

a

r e q u i r e m e n t

be:f

o r e on

e

may

o b t a i n a : f r anc

h i

s e

b u t

is

silent a s

t o a

p r

ior

f r a n c h

ise b e i n g r e q u i r e d

b e f o r e

o n e

may

op erate

a

b ro

:=tdc

astinq

s

ta

t

i o n .

E. 0.

No. 546

how

e v e r ,

r e n d e r e d t h e r e q u i r e m e n t

unn e c e s s a r y

ior it

a u t

h

o r

i

z e d

an

a d m i n i s tr a t i v e

a g

e n c y

o f

th

e e x

e c

u

ti

v e

b r a n c h

o f

g o v e r n m e n t t o

i ss u e

c e rtif ic

a t e s

o f

p

u b l ic c o n v e n i e n c e f o r

t h e

o p e

r a t

i o

n

o f

rommu

n i catio

n s

utili tie s .

A

p e r s o n o r

f i r m

may t l l e n

? : f o r e opP r

at

e

c o m m u n i c a tions

a n d

brn


12/17

DEf: l >HJN

--

C T

CASE

NU

4630

.

- 12 -

pu b l ic c o n v e n i n

p e n n i

ts

o r 1 i c e n s e s w i t h o u t a

n

e e d

o f a

p r ior f r a n c

h i

s e

.

As to

t h e

a p p l

icability

o f E .

0 . No.

72 ,

this

C o u r t finds th;-}t i l . i nnt:. r e p e a l P .D . No. 5 7 6 - A.

Th

e r e c a n h. e n c

i m p l

i P d re

p e a l

i n this

c a s e

for

there

lies

no i n

c-., n s

i s t .

e n

c y / c o ntradiction

n o r

s i m i l

< J r

s u

b .i P r t mi=

f

. b =

l

t. o s p e a k o f . The sta t u t e

p ro v

i r l e s

:

E C T l n

1..

S e c t i o

n 1 2 7

o f

t h e

N a t i o n a l nternal R e v e n

ue

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amendP.ci, i

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rther

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a s

f o l l o w s :

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ax on t

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q pn

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l aw

t o t h e

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n t r l r nr:. t .\.-i.t- h s t a n d i n g , there

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i n n l h e f r a

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r lu ly a u t h o r i z e d

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t .h

SP

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r P t_\ rn h r ~ l l

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13/17

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EC I

;

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tHI. .ilf:,:JU.

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r>ct.

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l l

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I n t.r- J" n a l ~ = > v P

a n y

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t

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rl j

n

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by

a n y

to

t h e

B u r e a u

o

f

p

ro

v i

s i o n of

t h e co n

trary

S fT T TON 2 .

o r R Jl

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o f g e n e r a l

l8 w tn 1 h F? co n t r a

ry

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to

t h e in c ome

Tit l e o f t h e N a t

io

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e , a s a m

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e d . "

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l a w

m e r e l y

am

e

nded

t h

e

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CndP.

t o

m Fl

I: F?

t h e t a x

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a u d i t , a n d t o

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fra n c

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se

h o l d e r s

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fo

r

c o r

po

r a te i 11

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n me t a x a me nrf i n q t h e " i n

J

i e u o f

all

t a xe s " p r o v i s io n c o m

mo

n i n mo s t f r a n c h ises i n s o far

a s e

xe

mp t i n q h o l d e r s

fr

o m i n co me t a x .

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c

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ly

di s cu s s e d in

Memo r a n d

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r> ; 111

i. np l

ie d r e pe a l

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r

i

-

t ,

i f. mu s t . he s

uffici

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ntly

P :3

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th : : t t

t h e s t

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t e o r s

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s u hi

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t.e r


14/17

T EC 1 S

11lN

-

C. T . A. CA SE

NU

.

4G

::JO.

-

1 4

-

d ea l w it h t h e s8me su b j e c t ma t ter

.a nd

th r t t th o

l : : . ~ t t e r

be

i n

co

n s

ist

e

."l.:t

.

_w

ith

i" h ~ ? fo rmPr .

T h e r e

mu s t

be

a

s h o w

irHl

o f rp p ugnancy c l e a r a nd

n r ~ ;

nn :.in c h

=t

r

ac i "e r

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1 n q u : : : J q usr:>d i n t h e lat. t.

e r

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mu s t

be

s u c h

8S

to

rP n

d e r i t

i .rrc:>r.nnr::ll8.ble w it h

wh

at had b e e n

formr::> t I y

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: Pr l . An i n r o n s i s t .

e nc y

t h

a t

f A l l s s h o r t o f t h 8 t sta n

d a rd

d o e ~

n o t

su f f i r : e . Wh u t

is

nPP d e d i s

a

mn

lifPst

i n d i . c 8 t i o n o f t h e

l e g i s 1 8

+. i

v e

p n r p o s e

t o

repeal.


15/17

DECISION -

C

.T .A

. CASE NO. 1 G3 0 .

- 1 5 -

c l a u s e s a r e t o

m o n o p o l y

i n o w n e r s h i p

a nd

o p e r a t i o n

o:f

r u d i o and

television

sta t i o n s a n d t o

r e g u l a t e

t h

e samP.

Th

e r e wa s no c o n f lict betwe e n

t h e o b j e c t s o f

t h e

st tu

t e a n d t h e t P r m i n a t io n o f

: f r a n c h i s e s .

Th

E

latte r was a

means

t o a c c o m p l i s h

t h e :f o r m er .

1n f a c t , by t e r m i n

a t i n g

t h e existing

f r a n c h i s e s a

t .

t

h a t

.

ti

me ,

t h e P r e s i d e n t

,

u n d e r

m ar

tial 1 a w

ru

l P. , wa s a b l e t o h a v e

c o m p l e t e c o n t r o l

o v e r t h e

m e d i a

o f b ro

a d c- a s ting .

F u r t h e r m o r e ,

this is

n o t

a

c l a i m

: for t a x

e x e m p t i o n

b u t rather

: fo r

t a x

i m p o s i tion

i n

w h i c h

c a s e t h e

t a x p r o v i s i o n s h o u l d

b e

interpreted i n c a s e

o f

d o u b t

a g a i n st

t h e

t a x i n g a u t h o r

ity

b e c a u s e

b u r d e n

s

a r e

n o t t o

bl?

im p o s e d b e

yo

nd w h a t t h e

s t . a t u t

P S 1: x p

rPP =r J

y and c l

? a r

1 y

i rn

p o r t

Commj

sai o n e r

o f In

ternal He vc

f lue

v.

C o u r t

o f

A p p e a l s ,

2 0 4

SCRA

182 ;

RPpub

I

:

v .

In

p r mP d ia t

Appella

te C o u r t , 1 9 6

SC RJ\

:n 5 :

Co

n n .i

n R

i o n e r

o f

In t ern a l R e v e n u e v.

Fi. r e men R Fund

T tH IU I

ancP

Company.

e t al. 148

SC

RA

3 1 5

;

Co m

m is

a i o n r r

o f

I n

ternal

Re

ve nue

v.

La

Tond

e n a

.

I n c . ,

5 SC RA G65 ;

H;::mila

Ra i lro

a d Company

v .

C o l l P c t . o r

o f

Cu s t :omn, 52

Ph i. l . 95 0 ; L u z o n

Str ->vPdor

n q Go. v .

T r

i n i

4 j Phi 1 .

8 0

3

.

S P c t in n

117

o f

t h e

T 1 X

Co

d e

s

t

ha

t

t h e

. mpos i i .nn o f

;: lpply o n l

y

t o

7 4


16/17

D E C I ~ ; H I N -

C.T.A. CASE

NO 4630.

--

1 6

-

x xx h e r e s

hall

be l e v i e d ,

a s

s e

s s e d a nd coll e c t e d ;i.n r _

spec t .

t g ?l

f r a n c h i

s e s , u p

on

t h e g r o s s r e

ceipts

f rom

th

r :> bu s i n

-?ss

c o v

e r e

d by_ . t h e l a w .

grar1 t . ing

t h e fr an c h i s e x x x .

Pursu: : tn t.

to

thi s

pt

- o v is i o n o f l a w it f o l l o w s

that if t h P pr:>ti

t. .

i. o n

P r

: : : ~ : n o f r a

n c h i s e ,

it

c o u l d

n o t be s u b j

e 8 l

t o

n ~

i s e t a x.

WHERF:FOH F ,

i n

o f

a l

l t h e

f o r e g o i ng,

r e s pond e n t ' s d -

r i .Ri

fJn is SET

ASI

DE. The d e f i c i e n c y

f r a n ch

i s e t ax a.s s e s s me n t s

in t h e

total

am

oun t o f

P16 , 15 9 ,651 . 5 1 in c l u s i v e o f i n c r e m e n t s f o r t h e third

and f o u r t h

qu

a r t e rs o f 1987 is h e r e b y CANCELLED. No

pr on ou n c emen t s t o c o s t .

S O OROET

H :

1).

Qu e z o n i ~ y ME?trn l'l:=m i J a , Ju l y 2 7 , 19

93 .

W

CONC{JH:

/t E

\ s s o r.:i.R

P

rmiiOA

Judq

e

diss e n t i ng )

U

O

0 .

n F: VE

YR

As so r . i i l t => l t

J

dC l


17/17

DF Cl SHJN -

C T A CA

SE NO

. J16::JO.

- 1 7 -

I

he reby

c e r t i f y t ~ t

t is

d e c i s i o n was r e a c h e d

a f t

e r

due r on s u lt

a t

i

on Rrnonq t h

l?

members

o f t h e

Co u rt c f

ax

Appea l :: i. n

a

c c or d

nee wi

th Se c t i o n 1 3

Art c l e V ( I T 0 f

h e

C n

nat tuti

o n

Q Q ~

ERNESTO D. ACO

ST

A

P r e s i

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Tax Ap pea l s

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