Cohaco Merchandising Development Corp. v. City Government of Muntinlupa

FIRST DIVISION [C.T.A. AC NO. 207. June 23, 2020.] COHACO MERCHANDISING DEVELOPMENT CORP. , petitioner , vs. THE CITY GOVERNMENT OF MUNTINLUPA, represented by HON. JAIME R. FRESNEDI, THE SANGGUNIANG PANLUNGSOD OF MUNTINLUPA CITY, THE CITY TREASURER OF MUNTINLUPA and THE CITY ATTORNEY'S OFFICE OF MUNTINLUPA , respondents . DECISION FABON-VICTORINO , J p : In this Petition for Review , 1 petitioner Cohaco Merchandising Development Corp. assails the Decision 2 dated January 30, 2018 and the Order 3 dated May 30, 2018 of the Regional Trial Court (RTC) Branch 276 of Muntinlupa City in Civil Case No. 17-294, denying its claim for refund of local business tax for taxable years 2014 and 2015 in the aggregate amount of P1,490,563.99. The pertinent facts, as culled from the record, are as follows. Petitioner is a domestic corporation engaged in the wholesale of goods with principal business at 2246 Don Chino Roces Ave., Makati City (formerly at 196 A. Bautista Street, Purok 1, Bayanan, Muntinlupa City). Respondent City Government of Muntinlupa, represented by Hon. Jaime R. Fresnedi, is the Local Government Unit implementing Ordinance Nos. 13-015 and 13-030 which amended the Revised Revenue Code of the City of Muntinlupa (RRCCM), by virtue of which petitioner paid business taxes, the subject of the instant claim for refund. Respondent Sangguniang Panlungsod of Muntinlupa City (Sanggunian) is impleaded being the legislative body of Muntinlupa City that enacted the impugned local tax Ordinances. Respondent City Treasurer of Muntinlupa, presently occupied by Anastacio L. Mioza, is the office responsible for the refund of business taxes. CAIHTE Respondent City Attorney's Office, headed by Atty. Genalyn C. Estrera, is the City Government office that denied petitioner's administrative claim for refund. Under the RRCCM, petitioner is classified as 'wholesalers, distributors or dealers of any article or commerce of whatever kind or nature' subject to the imposition of graduated business tax provided under Section 5 (B) of Article 1, Chapter 1 of Title II thereof. On October 14, 2013, the Sanggunian approved Ordinance No. 13-015 4 entitled 'An Ordinance Amending Section 5 (B) of Article 1, Chapter 1 of Title II of Ordinance No. 02-076, otherwise known as the New Revenue Code of Muntinlupa City .' About two (2) months thereafter, or on December 9, 2013, the Sanggunian approved Ordinance No. 13-030, 5 amending Section 5 (B) of Ordinance No. 13-015 by increasing the rates of taxes imposed on wholesalers, distributors, dealers and/or retailers of any article of commerce of whatever kind or nature. Under O.R. No. 5404197 dated January 23, 2014, petitioner paid the amount of P1,224,948.18, and the amount of P11,101.67 under O.R. No. 5424536 dated January 30, 2014, or a total amount of P1,236,049.85 as business taxes pursuant to Ordinance No. 13-030. Petitioner claims that the said amount was P814,051.98 more than what was due it under the old rate. For taxable year 2015, petitioner paid the amount of P864,762.51, as evidenced by O.R. No. 5461472 dated March 13, 2015, which was P676,512.01 more than what was due it under the old rate. Aggrieved, petitioner questioned the constitutionality of the said ordinances before the Department of Justice (DOJ) pursuant to Section 187 of the Local Government Code (LGC) of 1991. In the Resolution 6 dated April 8, 2015, then Secretary of Justice Leila M. De Lima declared Section 5 of Ordinance No. 13-030 void as follows: WHEREFORE , premises considered, Section 5 of Ordinance No. 13-030, series of 2013, of Muntinlupa City is hereby declared VOID for being contrary to the Local Government Code. SO ORDERED. Consequently, petitioner, on September 21, 2015, filed a claim 7 for refund with the City Treasurer of Muntinlupa, in the amounts of P814,051.98 and P676,512.01, allegedly representing excess payments of business tax for TYs 2014 and 2015, respectively. DETACa In a letter 8 dated February 20, 2017, respondent City Attorney denied petitioner's administrative claim for refund but conceded that only the amount of P12,000.00 which was assessed over and above the 50% of 1% rate provided in Ordinance No. 13-015, could be refunded. This prompted petitioner to file a Complaint with the RTC on May 17, 2017, praying to: (1) declare illegal and erroneous the collection by respondent City of Muntinlupa of the amount of P1,490,563.99, as business tax under Ordinance Nos. 13-015 and 13-030; and (2) order respondent City Treasurer to refund the said amount to petitioner. In the assailed Decision of January 30, 2018, the RTC dismissed for lack of merit petitioner's Complaint in this wise: WHEREFORE , premises considered, the instant complaint is hereby DISMISSED for lack of merit. SO ORDERED. In finding for respondents, the RTC concurred with the DOJ that the appeal challenging the validity of Ordinance No. 13-015 was filed beyond the prescribed thirty (30)-day period from its effectivity on December 12, 2013, thus, it could no longer be challenged in contrast with the appeal assailing Ordinance No. 13-030, which was seasonably filed. The RTC ruled that petitioner could no longer seek to nullify the said Ordinance for it allowed almost two (2) years from receipt of the Resolution of the Secretary of Justice on June 16, 2016 to lapse before filing the Complaint on May 22, 2017. The RTC emphasized that the thirty (30)-day period to appeal under Section 187 of the LGC was mandatory, hence, the instant action had already prescribed. The RTC was also convinced that petitioner was entitled to a refund of only P12,000.00 imposed under Ordinance No. 13-030 collected over and above 50% of 1% over P2,000,000.00. The RTC explained that although the Secretary of Justice declared Section 5 of Ordinance No. 13-030 void, it was only with respect to "the imposition of the fixed rate of P12,000.00, on top of 50% of 1% over P2,000,000.00" as decreed in the body of the Resolution. It did not per se invalidate the whole section of the ordinance. Besides, Ordinance No. 13-015 which was in full force and effect, also imposed the tax rate of 50% of 1% over P2,000,000.00 that was applicable in the case of petitioner. Petitioner moved for reconsideration of the adverse decision but the same was denied in the equally assailed Order dated May 30, 2018. Hence, the filing of the instant Petition for Review raising the following issues for the determination of the Court, to wit: 1. Whether petitioner's claim for refund was timely filed; 2. Whether Ordinance Nos. 13-015 and 13-030 were valid; 3. Whether the tax rates imposed under Ordinance Nos. 13-015 and 13-030 for those with gross sales of P2,000,000.00 were beyond what was allowed by law; and 4. Whether petitioner is entitled to claim refund for business taxes alleged to have been illegally paid for taxable years 2014 and 2015. aDSIHc Petitioner contends that its judicial claim for recovery of tax erroneously or illegally collected from it was timely filed pursuant to Section 196 of the LGC. For petitioner, the 2-year prescriptive period under Section 196 of the LGC is reckoned from the date of payment of such tax, fee or charge, or from the date the taxpayer is entitled to refund or credit . Petitioner claims that unlike the refund or credit of internal revenue taxes, the 2-year period for filing claims for refund or credit of local taxes is counted not necessarily from the date of payment of tax but also from the date the taxpayer is entitled to the refund or credit being sought. For petitioner, the DOJ Resolution which it received on June 16, 2016 declaring Ordinance 13-030 void, was the reckoning point in determining the 2-year prescriptive period for filing a claim for refund under Section 196 of the LGC. Thus, counting the two (2) years from the receipt of the DOJ Resolution June 16, 2015, petitioner had until June 16, 2017 to file both its administrative and judicial claims for refund. Since its administrative and judicial claims for refund were filed on September 21, 2015 and May 17, 2017, they were timely filed. Petitioner further contends that the DOJ Resolution declaring Section 5 of Ordinance No. 13-030 void should be deemed final and executory for failure of respondents to file any appeal or reconsideration assailing the said Resolution. Further, while the DOJ Resolution did not expressly invalidate Ordinance No. 13-015, it would appear that the DOJ's basis in voiding Section 5 of Ordinance No. 13-030 would also apply to Ordinance No. 13-015. Allegedly, these two (2) ordinances imposed the same tax rate for gross sales of P2,000,000.00 or more, which tax rate was allegedly illegal because it violated Sections 143, 151, and 191 of the LGC on the Minimum Tax Rate and Tax Base Ceilings, the Adjustment Ceiling thereof and the Manner of computing the Tax Rates Fixed Therein. Petitioner even quoted a portion of the DOJ Resolution saying that " [I]t is unclear what was the basis used by Appellee, Sangguniang Panlungsod ng Muntinlupa, in arriving at the tax rate imposed under Ordinance No. 13-030 for businesses with gross sales of P2,000,000.00 or more, which is P12,000.00 plus 50% of 1% over P2,000,000.00 ." Petitioner submits that though the DOJ did not categorically invalidate Section 5 of Ordinance No. 13-015 imposing the rate of 50% of 1% over P2,000,000.00, the Court is not precluded from looking into its legality in relation to the instant claim for refund. Citing Section 191 of the LGC, petitioner submits that the resulting percentage of increases introduced in Ordinance Nos. 13-015 and 13-030 is clearly excessive, oppressive and confiscatory as the amount of taxes paid by petitioner increased by approximately 400% or four times the old rate. Petitioner likewise contends that Ordinance Nos. 13-015 and 13-030 are without legal basis. According to petitioner, Section 191 of the LGC stating that any adjustment in the rates of taxes shall not exceed ten percent (10%) of the rates fixed under the said Code provides no exception. In conclusion, petitioner claims that its payment in the total amount of P1,490,563.99, pursuant to the assailed local tax ordinances that are void, being erroneous and/or illegal, hence, should be refunded in its favor. In their Comment/Opposition thereto, respondents submit that the instant Petition for Review should be denied for lack of merit. ETHIDa Respondents states that the arguments and discussion set forth by petitioner in its initiatory pleading were the same as those it raised and passed upon by the RTC in the assailed Decision and Order dated January 30, 2018 and May 30, 2018, respectively. Respondents is one with the RTC in saying that the appeal relative to Ordinance No. 13-015 was filed beyond the 30-day period from its effectivity on December 12, 2013. Hence, the validity thereof is unassailable. Respondents as well agree with the RTC that " [A]lthough the Secretary of Justice declared void Section 5 of Ordinance No. 13-030, it is only with respect to the 'imposition of the fixed rate of P12,000.00 on top of 50% of 1% over P2,000,000.00' as stated in the body of the Resolution. She did not per se invalidate the whole section of the ordinance ." Respondents therefore insist that the taxes paid pursuant to said ordinance should not be returned to petitioner. THE COURT'S RULING The instant Petition for Review lacks merit. The Court shall first determine whether it may still look into the validity of Ordinance No. 13-015 given respondents' contention that petitioner is already proscribed from questioning its validity for failure of petitioner to file its appeal with the DOJ within the 30-day period prescribed under Section 187 of the LGC. The present case is an exception to Section 187 of the LGC of 1991 and the doctrine of exhaustion of administrative remedies. Section 187 of the LGC pertinently provides that any question on the constitutionality or legality of tax ordinance or revenue measures may be raised on appeal within thirty (30) days from the effectivity thereof to the Secretary of Justice who shall render a decision within sixty (60) days from the date of receipt of the appeal. While the said period to appeal is mandatory for complying with the doctrine of exhaustion of administrative remedies, the same admits of exception as ruled by the Supreme Court in the case of Jose J. Ferrer, Jr. vs. City Mayor Herbert Bautista, et al. (" Ferrer case"), 9 thus: TIADCc Respondents contend that petitioner failed to exhaust administrative remedies for his non-compliance with Section 187 of the LGC, which mandates: Section 187. Procedure for Approval and Effectivity of Tax Ordinances and Revenue Measures; Mandatory Public Hearings . The procedure for approval of local tax ordinances and revenue measures shall be in accordance with the provisions of this Code: Provided , That public hearings shall be conducted for the purpose prior to the enactment thereof: Provided, further , That any question on the constitutionality or legality of tax ordinances or revenue measures may be raised on appeal within thirty (30) days from the effectivity thereof to the Secretary of Justice who shall render a decision within sixty (60) days from the date of receipt of the appeal: Provided, however , That such appeal shall not have the effect of suspending the effectivity of the ordinance and the accrual and payment of the tax, fee, or charge levied therein: Provided, finally , That within thirty (30) days after receipt of the decision or the lapse of the sixty-day period without the Secretary of Justice acting upon the appeal, the aggrieved party may file appropriate proceedings with a court of competent jurisdiction. The provision, the constitutionality of which was sustained in Drilon v. Lim , 10 has been construed as mandatory 11 considering that A municipal tax ordinance empowers a local government unit to impose taxes. The power to tax is the most effective instrument to raise needed revenues to finance and support the myriad activities of local government units for the delivery of basic services essential to the promotion of the general welfare and enhancement of peace, progress, and prosperity of the people. Consequently, any delay in implementing tax measures would be to the detriment of the public. It is for this reason that protests over tax ordinances are required to be done within certain time frames. x x x. 12 The obligatory nature of Section 187 was underscored in Hagonoy Market Vendor Asso. v. Municipality of Hagonoy : 13 x x x [T]he timeframe fixed by law for parties to avail of their legal remedies before competent courts is not a 'mere technicality' that can be easily brushed aside. The periods stated in Section 187 of the Local Government Code are mandatory . x x x Being its lifeblood, collection of revenues by the government is of paramount importance. The funds for the operation of its agencies and provision of basic services to its inhabitants are largely derived from its revenues. Despite these cases, the Court, in Ongsuco, et al. v. Hon. Malones , 14 held that there was no need for petitioners therein to exhaust administrative remedies before resorting to the courts, considering that there was only a pure question of law, the parties did not dispute any factual matter on which they had to present evidence. Likewise, in Cagayan Electric Power and Light Co., Inc. v. City of Cagayan de Oro , 15 We relaxed the application of the rules in view of the more substantive matters. For the same reasons, this petition is an exception to the general rule. AIDSTE The forgoing doctrine was echoed in Alta Vista Golf and Country Club vs. The City of Cebu, et al. , 16 where the Supreme Court reiterated the exception to the mandatory or obligatory nature of Section 187 of the LGC, as follows: "[i]n later cases, the Court recognized exceptional circumstances that justify noncompliance by a taxpayer with Section 187 of the Local Government Code. The Court ratiocinated in Ongsuco v. Malones , thus: It is true that the general rule is that before a party is allowed to seek the intervention of the court, he or she should have availed himself or herself of all the means of administrative processes afforded him or her. Hence, if resort to a remedy within the administrative machinery can still be made by giving the administrative officer concerned every opportunity to decide on a matter that comes within his or her jurisdiction, then such remedy should be exhausted first before the court's judicial power can be sought. The premature invocation of the intervention of the court is fatal to one's cause of action. The doctrine of exhaustion of administrative remedies is based on practical and legal reasons. The availment of administrative remedy entails lesser expenses and provides for a speedier disposition of controversies. Furthermore, the courts of justice, for reasons of comity and convenience, will shy away from a dispute until the system of administrative redress has been completed and complied with, so as to give the administrative agency concerned every opportunity to correct its error and dispose of the case. However, there are several exceptions to this rule. The rule on the exhaustion of administrative remedies is intended to preclude a court from arrogating unto itself the authority to resolve a controversy, the jurisdiction over which is initially lodged with an administrative body of special competence. Thus, a case where the issue raised is a purely legal question, well within the competence; and the jurisdiction of the court and not the administrative agency, would clearly constitute an exception. Resolving questions of law, which involve the interpretation and application of laws, constitutes essentially an exercise of judicial power that is exclusively allocated to the Supreme Court and such lower courts the Legislature may establish . xxx xxx xxx Paragraph 2(a) of Section 5, Article VIII of the Constitution, expressly establishes the appellate jurisdiction of this Court, and impliedly recognizes the original jurisdiction of lower courts over cases involving the constitutionality or validity of an ordinance: Sec. 5. The Supreme Court shall have the following powers : xxx xxx xxx (2) Review, revised, reverse, modify or affirm on appeal or certiorari , as the law or the Rules of Court may provide, final judgments and orders of lower courts in: (a) All cases in which the constitutionality or validity of any treaty, international or executive agreement, law, presidential decree, proclamation, order, instruction, ordinance , or regulation is in question. In J.M. Tuason and Co., Inc. v. Court of Appeal, Ynot v. Intermediate Appellate Court , and Commissioner of Internal Revenue v. Santos , the Court has affirmed the jurisdiction of the RTC to resolve questions of constitutionality and validity of laws (deemed to include ordinances) in the first instance, without deciding questions which pertain to legislative policy. (Emphases supplied, citations omitted.) In Cagayan Electric Power and Light Co., Inc. (CEPALCO) v. City of Cagayan De Oro , the Court initially conceded that as in Reyes, the failure of taxpayer CEPALCO to appeal to the Secretary of Justice within the statutory period of 30 days from the effectivity of the ordinance should have been fatal to its cause. However, the Court purposefully relaxed the application of the rules in view of the more substantive matters. AaCTcI Similar to Ongsuco and CEPALCO , the case at bar constitutes an exception to the general rule. Not only does the instant Petition raise pure questions of law, but it also involves substantive matters imperative for the Court to resolve. Clearly, while as a rule, Section 187 of the LGC has been construed as mandatory, the same admits of exceptions, as when the conflict involves pure questions of law, and substantive matters. Undeniably, the present controversy involves pure questions of law, i.e. , the validity of the assailed City Ordinances Nos. 13-015 and 13-030, which is within the province of the Court even if petitioner's appeal was belatedly filed with the DOJ. Note that the Court is endowed with jurisdiction to take cognizance of cases in which the constitutionality or validity of, inter alia , of an ordinance is in question, pursuant to paragraph 2 (a) of Section 5, Article VIII of the 1987 Constitution. While Ordinance No. 13-015 is void, Ordinance No. 13-030 is valid. Section 5, Article X of the 1987 Constitution reads as follows: SECTION 5. Each local government unit shall have the power to create its own sources of revenues and to levy taxes, fees, and charges subject to such guidelines and limitations as the Congress may provide, consistent with the basic policy of local autonomy. Such taxes, fees, and charges shall accrue exclusively to the local governments. Note that the Constitution itself recognizes the power of local government units to tax. Such power is however " subject to such guidelines and limitations as the Congress may provide ." The said guidelines and limitations are embodied in the LGC of 1991. Specifically, Section 151 of the LGC of 1991 provides the scope of the taxing powers of cities, to wit: SECTION 151. Scope of Taxing Powers . Except as otherwise provided in this Code, the city may levy the taxes, fees, and charges which the province or municipality may impose : Provided, however , That the taxes, fees and charges levied and collected by highly urbanized and independent component cities shall accrue to them and distributed in accordance with the provisions of this Code. The rates of taxes that the city may levy may exceed the maximum rates allowed for the province or municipality by not more than fifty percent (50%) except the rates of professional and amusement taxes . (Emphases and underscoring supplied) Relative thereto, Section 143 (b) of the LGC of 1991 reads: SECTION 143. Tax on Business . The municipality may impose taxes on the following businesses : xxx xxx xxx (b) On wholesalers, distributors, or dealers in any article of commerce of whatever kind or nature in accordance with the following schedule : With gross sales or receipts for the preceding calendar year in the amount of: Amount of Tax Per Annum Less than P1,000.00 P18.00 P1,000.00 or more but less than P2,000.00 33.00 2,000.00 or more but less than 3,000.00 50.00 3,000.00 or more but less than 4,000.00 72.00 4,000.00 or more but less than 5,000.00 100.00 5,000.00 or more but less than 6,000.00 121.00 6,000.00 or more but less than 7,000.00 143.00 7,000.00 or more but less than 8,000.00 165.00 8,000.00 or more but less than 10,000.00 187.00 10,000.00 or more but less than 15,000.00 220.00 15,000.00 or more but less than 20,000.00 275.00 20,000.00 or more but less than 30,000.00 330.00 30,000.00 or more but less than 40,000.00 440.00 40,000.00 or more but less than 50,000.00 660.00 50,000.00 or more but less than 75,000.00 990.00 75,000.00 or more but less than 100,000.00 1,320.00 100,000.00 or more but less than 150,000.00 1,870.00 150,000.00 or more but less than 200,000.00 2,420.00 200,000.00 or more but less than 300,000.00 3,300.00 300,000.00 or more but less than 500,000.00 4,400.00 500,000.00 or more but less than 750,000.00 6,600.00 750,000.00 or more but less than 1,000,000.00 8,800.00 1,000,000.00 or more but less than 2,000,000.00 10,000.00 2,000,000.00 or more at a rate not exceeding fifty percent (50%) of one percent (1%). Per Section 151, in relation to Section 143 (b), of the LGC of 1991, cities may impose the following maximum business taxes on wholesalers, distributors, or dealers in any article of commerce of whatever kind or nature in accordance with, and as determined in, the following schedule, to wit: EcTCAD With gross sales or receipts for the preceding calendar year in the amount of: Amount of Tax Per Annum Imposable by Municipalities (100%) Maximum Amount of Tax Per Annum Imposable by Cities (150%) Less than P1,000.00 P18.00 P27.00 P1,000.00 or more but less than P2,000.00 P33.00 P49.50 P2,000.00 or more but less than P3,000.00 P50.00 P75.00 P3,000.00 or more but less than P4,000.00 P72.00 P108.00 P4,000.00 or more but less than P5,000.00 P100.00 P150.00 P5,000.00 or more but less than P6,000.00 P121.00 P181.50 P6,000.00 or more but less than P7,000.00 P143.00 P214.50 P7,000.00 or more but less than P8,000.00 P165.00 P247.50 P8,000.00 or more but less than P10,000.00 P187.00 P280.50 P10,000.00 or more but less than P15,000.00 P220.00 P330.00 P15,000.00 or more but less than P20,000.00 P275.00 P412.50 P20,000.00 or more but less than P30,000.00 P330.00 P495.00 P30,000.00 or more but less than P40,000.00 P440.00 P660.00 P40,000.00 or more but less than P50,000.00 P660.00 P990.00 P50,000.00 or more but less than P75,000.00 P990.00 P1,485.00 P75,000.00 or more but less than P100,000.00 P1,320.00 P1,980.00 P100,000.00 or more but less than P150,000.00 P1,870.00 P2,805.00 P150,000.00 or more but less than P200,000.00 P2,420.00 P3,630.00 P200,000.00 or more but less than P300,000.00 P3,300.00 P4,950.00 P300,000.00 or more but less than P500,000.00 P4,400.00 P6,600.00 P500,000.00 or more but less than P750,000.00 P6,600.00 P9,900.00 P750,000.00 or more but less than P1,000,000.00 P8,800.00 P13,200.00 P1,000,000.00 or more but less than P2,000,000.00 P10,000.00 P15,000.00 P2,000,000.00 or more at a rate not exceeding fifty percent (50%) of one percent (1%), or .50% .75% 17 Thus, in exacting business taxes against wholesalers, distributors, or dealers in any article of commerce of whatever kind or nature, respondent City Government of Muntinlupa should not exceed the above-stated limitations or ceilings set forth by Congress. In other words, Ordinance Nos. 13-015 and 13-050 should not have exceeded the maximum amounts, as reflected in the foregoing table. For easy reference, the pertinent portions of the subject Ordinances read as follows, viz. : Ordinance No. 13-015 dated October 14, 2013: "NOW THEREFORE, BE IT RESOLVED, AS IT IS HEREBY RESOLVED, by the 7th Sangguniang Panlungsod of Muntinlupa in session assembled that: xxx xxx xxx TITLE II, CHAPTER I, Section 2(b) of Ordinance No. 02-076 is hereby amended and shall be read as follows: xxx xxx xxx TITLE II CITY TAXES CHAPTER I TAXES ON BUSINESS ARTICLE I GRADUATED BUSINESS TAXES SECTION 5. Imposition of Tax . There is hereby imposed on the following persons who establish, operate or maintain their respective business within the City of Muntinlupa a graduated Business Tax in the amount of hereafter prescribed. (b) On wholesalers, distributors, or dealers of any article of commerce of whatever kind or nature in accordance with the following schedule: Gross Sales for the Preceding Calendar Year Amount of Tax per Quarter Php50,000.00 or more but less than 75,000.00 Php1,190.00 Php75,000.00 or more but less than 100,000.00 1,540.00 Php100,000.00 or more but less than 150,000.00 2,240.00 Php150,000.00 or more but less than 200,000.00 2,900.00 Php200,000.00 or more but less than 300,000.00 3,960.00 Php300,000.00 or more but less than 500,000.00 5,820.00 Php500,000.00 or more but less than 750,000.00 7,920.00 Php750,000.00 or more but less than 1,000,000.00 10,560.00 Php1,000,000.00 or more but less than 2,000,000.00 12,000.00 Php2,000,000.00 or more 20% of 1% (Emphasis ours) Ordinance No. 13-030 dated December 9, 2013: NOW THEREFORE, BE IT ORDAINED, AS IT IS HEREBY ORDAINED, by the 7th Sangguniang Panlungsod of Muntinlupa in session assembled that: HSAcaE SECTION 1. This ordinance shall be known as the 'An- ordinance amending Ordinance No. 13-015 particularly Section 5(b), an ordinance amending section 5(b) of article 1, Chapter I of Title II of Ordinance No. 02-076 otherwise known as the New Revenue Code of Muntinlupa. SECTION 2. Ordinance No. 13-015 particularly Section 5(b) read as follows: TITLE II CITY TAXES CHAPTER I TAXES ON BUSINESS ARTICLE I GRADUATED BUSINESS TAXES SECTION 5. Imposition of Tax . There is hereby imposed on the following persons who establish, operate or maintain their respective business within the City of Muntinlupa a graduated Business Tax in the amount of hereafter prescribed. (b) On wholesalers, distributors, or dealers of any article of commerce of whatever kind or nature in accordance with the following schedule: Gross Sales for the Preceding Calendar Year Amount of Tax per Quarter Php50,000.00 or more but less than 75,000.00 Php1,190.00 Php75,000.00 or more but less than 100,000.00 1,540.00 Php100,000.00 or more but less than 150,000.00 2,240.00 Php150,000.00 or more but less than 200,000.00 2,900.00 Php200,000.00 or more but less than 300,000.00 3,960.00 Php300,000.00 or more but less than 500,000.00 5,820.00 Php500,000.00 or more but less than 750,000.00 7,920.00 Php750,000.00 or more but less than 1,000,000.00 10,560.00 Php1,000,000.00 or more but less than 2,000,000.00 12,000.00 Php2,000,000.00 or more 50% of 1% NOW SHALL BE READ AS FOLLOWS: (b) On wholesalers, distributors, or dealers of any article of commerce of whatever kind or nature in accordance with the following schedule: AScHCD Gross Sales for the Preceding Calendar Year Amount of Tax per Annum Php50,000.00 or more but less than 75,000.00 Php1,190.00 Php75,000.00 or more but less than 100,000.00 1,540.00 Php100,000.00 or more but less than 150,000.00 2,240.00 Php150,000.00 or more but less than 200,000.00 2,900.00 Php200,000.00 or more but less than 300,000.00 3,960.00 Php300,000.00 or more but less than 500,000.00 5,820.00 Php500,000.00 or more but less than 750,000.00 7,920.00 Php750,000.00 or more but less than 1,000,000.00 10,560.00 Php1,000,000.00 or more but less than 2,000,000.00 12,000.00 Php2,000,000.00 or more Php12,000.00 plus 50% of 1% over Php2,000,000.00 A scrutiny of the above-quoted portion of Ordinance No. 13-015 reveals that the amounts imposed therein exceeds the limitations set forth by the legislature. This is clear considering that the exacted amount for each bracket is on a quarterly basis . For a clearer picture, a comparison of the amounts in Ordinance No. 13-015 and the said limitations under the aforequoted provisions of the LGC of 1991 is shown below: Gross sales for the preceding calendar year Tax imposed under Ordinance No. 13-015 (Amount of tax per quarter multiplied by 4) Maximum Amount of Tax Per Annum Imposable by Cities P50,000.00 or more but less than P75,000.00 P4,760.00 P1,485.00 P75,000.00 or more but less than P100,000.00 P6,160.00 P1,980.00 P100,000.00 or more but less than P150,000.00 P8,960.00 P2,805.00 P150,000.00 or more but less than P200,000.00 P11,600.00 P3,630.00 P200,000.00 or more but less than P300,000.00 P15,840.00 P4,950.00 P300,000.00 or more but less than P500,000.00 P23,280.00 P6,600.00 P500,000.00 or more but less than P750,000.00 P31,680.00 P9,900.00 P750,000.00 or more but less than P1,000,000.00 P42,240.00 P13,200.00 P1,000,000.00 or more but less than P2,000,000.00 P48,000.00 P15,000.00 2,000,000.00 or more 2% 18 .75% Undoubtedly, the tax imposed under Ordinance No. 13-015 was way beyond the ceiling established by law. Thus, Ordinance No. 13-015 is void, for being diametrically inconsistent with the provisions of the LGC of 1991. In contrast, the Court disagrees with the DOJ finding that Ordinance No. 13-030 is void for being contrary to the LGC. In declaring Ordinance No. 13-030 void, then Secretary of Justice Leila M. De Lima ratiocinated as follows: ". . . it is unclear what was the basis used by Appellee, Sangguniang Panglu[ng]sod ng Muntinlupa City, in arriving at the tax rate imposed under Ordinance No. 013-030 for businesses with gross sales of PhP2,000,000.00 or more, which is PhP12,000.00 plus 50% of 1% over PhP2,000,00[0].00. There is no legal basis for the imposition of the fixed rate of PhP12,000.00, on top of 50% of 1% over PhP2,000,000.00. WHEREFORE , premises considered, Section 5 of Ordinance No. 013-030, series of 2013, of Muntinlupa City is hereby declared VOID for being contrary to the Local Government Code. SO ORDERED. " 19 The absence of legal basis for the imposition by respondent City on wholesalers, distributors, or dealers in any article of commerce of whatever kind or nature for the bracket "P2,000,000.00 or more" at the tax rate of "Php12,000.00 plus 50% of 1% over Php2,000,000.00" is more apparent than real. The said tax rate may seem inconsistent with the limitation to the taxing powers enunciated in the earlier quoted Section 151, in relation to Section 143 (b), of the LGC of 1991. AcICHD However, as earlier emphasized, the maximum amount of tax imposable by a city for wholesalers, distributors, or dealers in any article of commerce of whatever kind or nature for the bracket "P2,000,000.00 or more" is .75%. A closer examination of the subject imposition however indicate that it does not in any way exceeds the said limitation. To be clear, the tax imposition under Ordinance No. 13-030 at the tax rate of "Php12,000.00 plus 50% of 1% over Php2,000,000.00" for the bracket "P2,000,000.00 or more" does not exceed the .75% limit. Thus, if the gross sales for the preceding calendar year of a taxpayer is exactly P2,000,000.00, per Section 151, in relation to Section 143 (b) of the LGC of 1991, the maximum tax that could be imposed by a city therefor at the rate of .75% is P15,000.00. 20 Applying the tax rate introduced by Ordinance No. 13-030, the tax that would be imposed by respondent City would only be P12,000.00. Parenthetically, the additional "50% of 1% over Php2,000,000.00" would not be imposed, since the said gross sales did not exceed P2,000,000.00. In fine, the tax imposed under Ordinance No. 13-030 does not exceed the statutory limitation. Even assuming that the gross sales for the preceding calendar year of a taxpayer is way beyond the amount of P2,000,000.00, the imposition under Ordinance No. 13-030 would still not transgress the statutory limitation. Thus, if the gross sales is P500,000,000.00, on the basis of the same provisions of the LGC of 1991, the maximum tax that could be imposed by a city therefor at the rate of .75% would be P3,750,000.00. 21 Applying again the tax rate under Ordinance No. 13-030, the tax imposable by respondent City would only be P2,502,000.00. 22 Thus, the Court finds Ordinance No. 13-030 valid. WHEREFORE , the instant Petition for Review filed by Cohaco Merchandising Development Corp. is hereby DENIED , for lack of merit. Accordingly, the assailed Decision dated January 30, 2018 and Order dated May 30, 2018 of the Regional Trial Court Branch 276 in Civil Case No. 17-294 are AFFIRMED on grounds stated herein. SO ORDERED. (SGD.) ESPERANZA R. FABON-VICTORINO Associate Justice Roman G. del Rosario, P.J. and Catherine T. Manahan, J. , concur. Footnotes 1. Docket, pp. 8-24. 2. Docket, pp. 28-34. 3. Docket, pp. 35-36. 4. Docket, pp. 37-40. 5. Docket, pp. 41-44. 6. Docket, pp. 50-55. 7. Docket, pp. 56-58. 8. Docket, pp. 59-60. 9. G.R. No. 210551, June 30, 2015. 10. G.R. No. 112497, August 4, 1994. 11. Reyes vs. Court of Appeals , 378 Phil. 232 (1999). See also subsequent case of Figuerres v. Court of Appeals , 364 Phil. 683 (1999). 12. Reyes vs. Court of Appeals, supra , at 238, and Jardine Davies Insurance Brokers, Inc. v. Hon. Aliposa , 446 Phil. 243, 254-255 (2003). 13. 426 Phil. 769 (2002). 14. 619 Phil. 492 (2009). 15. G.R. No. 191761, November 14, 2012. 16. G.R. No. 180235, January 20, 2016. 17. The maximum rate that may be imposed by a municipality (.50%) multiplied by 150%. 18. [50% x 1%] x 4 quarters = 2% . 19. Docket, p. 55. 20. P2,000,000.00 x .75% = P15,000.00 . 21. P500,000,000.00 x .75% = P3,750,000.00 . 22. P12,000.00 + [(P500,000,000.00 less P2,000,000.00) x (50% x 1%)] = P2,502,000.00 .