Comissioner of Internal Revenue vs Court of Appeals

FACTS:CENVOCO is a manufacturer of edible and coconut/coprameal cake and such other coconut related oil subject to the miller's tax of 3%.Petioner also maufactures lard, detergent and ;laundry soap subject to the sales tax of 10%.
In 1986, petioner purchased a specified number of containers and packaging materials for its edible oil from its suppliers and paid sales tax due thereon.After an investigation conducted by respondent's Revenue Examiner, Assessment Notice No. FAS-B-86--88-001661-001664 dated April 22,1988 was issued against the petioner for deficiency miller's tax in the total amount of P1,575,514.70.
On June 29,1988, petioner filed with respondent a letter dated June 27,1988 requesting for reconsideration of the above deficiency miller's tax assessments, contending that the final provision of Section 168 of the Tax Code does not apply to sales tax paid on containers and packaging materials, hence the amount paid therefor should have been credited against the millers tax assessed against it.Again thru a letter dated September 28,1988, petioner reiterated its request for reconsideration.

ISSUE: Whether or not the sales rax paid by CENVOCO when it purchased containers and packaging materials for its milled products can be credited against the deficiency miller's tax due thereon.

HELD: The court ruled that the proviso of Section 168 of the Old tax code should be strictly construed to apply only to raw materials and not to containers and packaging materials which are not raw materials. Hence, the Sales taxes paid on containers and packaging materials of the milled products may be credited against the miller's tax due.

PLDT vs PROVINCE OF LAGUNA

FACTS: Philippine Long Distance Company, Inc. (PLDT) is a holder of a legislative franchise under Act No. 3436, as amended, to render local and international Telecommunications Services. On August 24,1991, the terms and conditions of its franchise were consolidated under Republic Act No.7082, Section 12 of which embodies the so-called “In-Lieu-of-all-taxes” clause, whereunder PLDT shall pay a franchise tax equivalent to thre (3%) of all its gross receipts, which franchise shall be in “lieu of all taxes .”
On January 1,1992, Republic Act No. 7160 oherwise known as the Local Government Code, took effect. Section 137 of the Code, grants power to impose local franchise tax on businesses enjoying a franchise. Invoking its authority, the Province of Laguna, through its local legislative assembly, enacted Provincial Ordinance No. 01-92, made effective January 1, 1993, imposing a franchise tax upon all businesseses enjoying a franchise, PLDT included.
By Section 193 of the same Code, all tax exemption priviliges then enjoed by all persons, whether natural or juridical, save those expressly mentioned therein, were withdrawn, necessarily including those taxes from which PLDT is exempted under the “lieu of all taxes ” clause in its charter.
On January 8,1998,PLDT, in compliance with the aforementioned Ordinance, paid the province of of Laguna its local franchise tax liability for the year 1988 in the amount of P1,081,212.10
Threafter, Congress, aiming to level the playing field among telecommunication companies, enacted Republic Act No. 7925, otherwise known as Public Telecommunications Policy Act of the Philippines, which took effect on March 16,1995 which provides for an equality of treatment in the telecommunications industry.
Then, on June 2,1988, the Department of Finance, thru its Bureau of Local Government Finance (BLGF), issued a ruling to the effect that PLDT shall be exempt from the payment of franchise and business taxes imposable by LGUs under Sectioon 137 and 143 LGC (Local Government Code) upon the effectivity of of RA7925. However, PLDT shall be liable to pay the franchise and business taxes on its gross receipts realized from January 1,1992 up to march 15,1995 during which period, the PLDT was not enjoying the “ most-favored Clause.”
On the basis of the aforequoted ruling, PLDT refused to pay the Province of laguna its local franchise tax liability for 1999. And, on December 22,1999, it even filed with the office of the provincial Treasure a written claim for refund of the amount it paid as local franchise tax for1998.

ISSUE: Whether or not PLDT is exempt from paying franchise taxes, pursuant to the following provisions of R.A. 7925.

HELD: The court hold that Section of R.A 7925 cannot be considered as having amended petioner's franchise so as to entitle it to exemption from the imposition of local franchise tax.Wherefore, the petition is denied. Petioner PLDT is not exempt from payiing local franchise and business taxes to the respondent province. Refund is denied. For failure to substantiate th claim for exemplary damages an attorneys fees, the same is denied.

The fact that the term “exemption in Section 23 is too general. A cardinal Rule is that legislative intent must be ascertained from a consideration of the statute as a whole and not merely of a particular provision. There is nothing in the language of Section 23 which shows that it grants tax exemptions to all telecommunications entities, including those whose exemptions had ben withdrawn by LGC.
The tax Exemp must be expressed in the statute in clear language that leaves no doubt of the intention of the legislature to grant such exemption.