The Province of Bulacan vs Court of Appeals
299 SCRA 442 [GR No. 126232 November 27, 1998]
Facts: On June 26, 1992, the Sangguniang Panlalawigan passed provincial ordinance no. 3 known as “Ordinance Enacting The Revenue Code Of The Bulacan Province” which was to take effect on July 1, 1992 Section 21 of the ordinance provides as follows:
Sec 21. Imposition of Tax – There is hereby levied and collected a tax of 10% of the fair market value in the locality per cubic meter of ordinary stores, sand, gravel, earth and other quarry resources, such but not limited to marble, granite, volcanic cinders, basalt, tuff and rock phosphate, extracted from public lands or from beds of seas, lakes, rivers, streams, creeks and other public waters within its territorial jurisdiction.
Pursuant thereto, the provincial treasurer of Bulacan in a letter dated November 11, 1992, assessed private respondent Republic Cement Corporation Php2,524,692.13 for extracting lime stones, shale and silica from several parcels of private land in the province during the third quarter of 1992 until the second quarter of 1993. Believing that the province, on the bases of the above-said ordinance, had no authority to impose taxes on quarry resources extracted from private lands, Republic Cement formally contested the same on December 23, 1993. The same was, however, denied by the provincial treasurer on January 17, 1994. Republic Cement, consequently filed a petition for declaratory relief with the Regional Trial Court (RTC) of Bulacan on February 14, 1993. The province filed a motion to dismiss Republic Cement’s petition which was granted by the trial court on May 13, 1993, which ruled that declaratory relief was improper, allegedly because a breach of the ordinance had been committed by Republic Cement.
Issue: Whether or not provincial ordinance no. 3 is valid to allow the petitioner to impose taxes on ordinary stones, sand, gravel, earth, and other quarry resources.
Held: No. On the basis of section 134 of Republic Act No. 7169, the local government code, ruled that a province was empowered to impose taxes only on sand, gravel, and other quarry resources extracted from public lands, its authority to tax being limited to by said provision only to those taxes, fees and charges provided in article 1, chapter 2, title I of Book II of the local government code.
As correctly pointed out by petitioners, section 186 of the same code allows petitioners to levy taxes other than those specifically enumerated under the code, subject to the conditions specified therein.
The tax imposed by the province of Bulacan is an excise tax, being a tax upon the performance, carrying or an excise of an activity. Under section 133 of the local government code, a province may not, therefore, levy excise taxes on articles already taxed by the National Internal Revenue Code (NIRC).
The NIRC levies a tax on all quarry resources, regardless of origin, whether extracted from public or private land. Thus, a province may not ordinarily impose taxes on stones, sand,gravel, earth and other quarry resources, as the same are already taxed under NIRC. The province can, however, impose a tax on stones, sand, gravel, earth and other quarry resources extracted from public lands because it is expressly empowered to do so under the local government code. As to stones, sand, gravel, earth and other quarry resources extracted from private land, however it may not do so, because of the limitation provided by section 133 of the code in relation to section 151 of the NIRC.
Given the above disquisition, petitioners cannot claim that the appellate court unjustly deprived them of the power to create their sources of revenue, their assessment of taxes against Republic Cement being ultra vires, traversing as it does the limitations set by the local government code.
Furthermore, section 21 of provincial ordinance no. 3 is practically only a reproduction of section 138 of the local government code. A cursory reading of both could show that both refer to ordinary sand, gravel, stone, earth and other quarry resources extracted from public lands. Even if we disregard the limitation set by section 133 of the local government code, petitioners, may not impose taxes on stone, sand, gravel, earth and other quarry resources extracted from private lands. Petitioners may not involve the regalian doctrine to extend coverage of their ordinance to quarry resources extracted from private lands, for taxes, being burdens, are not to be presumed beyond what the applicable statute expressly and clearly declares, tax statutes being construed strictissimi juris against the government.