DOJ Opinion No. 085, s. 1990

DOJ OPINION NO. 085 , s. 1990 May 2, 1990 Quisumbing, Torres & Evangelista 10th Floor, Shell House 156 Valero St., Salcedo Village 1200 Makati, Metro Manila Gentlemen : This refers to your appeal in behalf of RFM Corporation filed pursuant to Section 47 of P.D. No. 231 (The Local Tax Code), as amended, from an "opinion" issued by the Provincial Prosecutor of Bulacan on November 16, 1989 regarding the validity of Ordinance No. 30, s. 1989 of the Municipality of San Ildefonso, Bulacan. It appears that RFM Corporation, with offices at Mandaluyong, Metro Manila, is engaged in the production of processed poultry products, particularly chicken meat; that said corporation executed "Broiler Growing Agreements" with numerous establishments all over the country, including those in San Ildefonso, Bulacan, pursuant to which these establishments, known as "contract growers", shall deliver "[f]ull grown chickens" to RFM for processing; that in line with the provisions of Local Tax Regulations No. 2-84 of the Department of Finance dated April 4, 1984, the Sangguniang Bayan of San Ildefonso enacted the abovesaid tax ordinance and its accompanying Resolution No. 005, s. 1989, which requires all companies which award growing contracts to chicken growers in San Ildefonso, Bulacan [to] pay the appropriate tax to the municipal government; that through a letter dated November 8, 1989, you filed with the Provincial Fiscal (now Prosecutor) of Bulacan, a protest contesting "the implementation of Ordinance No. 30, Series of 1989" and requesting that said ordinance be declared "invalid"; and that in a brief communication dated November 14, 1989, the Provincial Prosecutor of Bulacan denied your request and held that "the said ordinance is a valid exercise of [the] power of taxation by the said Municipality". Hence, your present appeal. Section 47 of the Local Tax Code, which vests the Secretary of Justice with the authority to pass upon the legality of tax ordinances enacted by local government units, provides: "Sec. 47. Question on the legality of a tax ordinance . Any question or issue raised against the legality of any tax ordinance, or portion thereof, on ground other than those mentioned in Section 44 of this Code, shall be referred for opinion to the Provincial Fiscal [now Prosecutor], in the case of provincial, municipal and barrio tax ordinances, or to the City Fiscal [now Prosecutor], in the case of tax ordinances of the city and barrios within the city, whose opinion shall be rendered within a period of thirty days after receipt of him of the query or protest. The opinion of the Provincial or City Fiscal, as the case may be, shall be appealable to the Secretary of Justice who shall render an opinion on the matter within sixty days after receipt of the appeal. The decision of the Secretary of Justice shall be final and executory unless, within thirty days upon receipt thereof, the aggrieved party contests the same in a court of competent jurisdiction ." (Emphasis supplied). In a previous case, this Department has refused to entertain an appeal from the "opinion" of the City Fiscal (now Prosecutor) of Lucena City for the reason the said fiscal "has not rendered a formal opinion on the legality of the tax ordinance in question" (See Secretary of Justice Opn. No. 27, s. 1982). Therein, it was explained that "Upon examination of the aforequoted reply of the City Fiscal, we are unable to construe it as one constituting an opinion of the city fiscal, which in the contemplation of Section 47 of the Local Tax Code, is appealable to the Minister of Justice. It is nothing more than a bare expression of the City of Fiscal's belief in the legality of the subject city ordinance, with no factual and/or legal basis having been adduced to support such belief. It does not even contain any precise statement of the question/questions or define the issue/issues raised against the legality of the subject tax ordinance which may be a basis for a determination as to whether it is one falling within the revisory authority of the Minister of Justice as defined in section 47, supra ". It is believed that the aforementioned ruling applies to the "opinion" appealed in the instant case. Cursory perusal thereof readily shows that it is simply a perfunctory expression of the Provincial Prosecutor's views on the validity of the disputed tax ordinance subject herein without citing the factual and/or legal bases therefor, but appealing instead to non-legal matters, such as sense of patriotism and fair dealing. prcd Accordingly, this office is constrained to rule that in the present case, there is no opinion of the Provincial Prosecutor of Bulacan under and within the context of Section 47 of the Local Tax Code and, therefore, there is no basis for exercise of the Secretary of Justice's appellate authority in said section. Finally, it should be pointed out that the Secretary of Justice may pass upon questions or issues raised against the legality of tax ordinances on appeal from the Provincial or City Prosecutor's opinion, only on grounds other than those mentioned in Section 44 of the Local Tax Code (Sec. of Justice Op. No. 57, s. 1977) viz, the tax or fee levied or imposed is (a) unjust, (b) excessive, (c) oppressive, (d) confiscatory, or (e) not among those that the particular local government may impose in the exercise of its power in accordance with the Local Tax Code, (f) or when the tax ordinance is in whole or in part, contrary to declared the national and economic policy and (g) when the ordinance is discrimination in nature on the conduct of business or calling or in restraint of trade, and which under Section 45 of the same Code are grounds for filing a "formal protest against a tax ordinance" with the Secretary of Finance (not with the Secretary of Justice) who is thereby vested with jurisdiction to decide such formal protest (Sec. of Justice Op. No. 15, s. 1975). Very truly yours, (SGD.) FRANKLIN M. DRILON Secretary