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[G.R. NO. 151208. October 16, 2006]

PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, INC. v. PROVINCE OF CEBU AND CESAR R. RESENTES, IN HIS CAPACITY AS THE PROVINCIAL TREASURER OF THE PROVINCE OF CEBU

Sirs/Mesdames:

Quoted hereunder, for your information, is a resolution of this Court dated OCT. 16, 2006 .

G.R. NO. 151208 (Philippine Long Distance Telephone Company, Inc. v. Province of Cebu and Cesar R. Resentes, In his capacity as the Provincial Treasurer of the Province of Cebu)

x ------------------------------------------------------------------------------------------------------------------------- x

RESOLUTION

Before us is a Petition for Review on Certiorari ^[1] cralaw under Rule 45 of the Rules of Court assailing the December 18, 2001 Judgment on the Pleadings ^[2] cralaw of the Regional Trial Court (RTC) Cebu City, Branch 15 in Civil Case No. CEB-25114, concerning an action for refund and to declare petitioner exempt from the payment of local franchise and business taxes. It raises the sole issue on whether Section 23 of RA 7925 ^[3] cralaw ipso facto exempts petitioner from payment of local franchise tax.

The facts are undisputed. Petitioner was paying quarterly local franchise taxes from 1997 to the third quarter of 1998, for an aggregate franchise tax payment of PhP699,437.27. ^[4] cralaw On June 2, 1998, petitioner obtained a ruling ^[5] cralaw from the Bureau of Local Government Finance (BLGF) of the Department of Finance (DOF) exempting petitioner from local franchise and business taxes imposable by Local Government Units (LGU) under Sections 137 and 143 of the Local Government Code (LGC), upon the effectivity of RA 7925 on March 16, 1995. The BLGF construed Section 23 of RA 7925-which provides for the equality of treatment in the telecommunications industry-as granting petitioner automatic tax exemption. Thereafter, petitioner informed respondents about its supposed exemption from the local franchise tax, together with a claim for refund of the PhP699,437.27 it had paid. ^[6] cralaw On behalf of respondent Province Cebu, respondent Resentes, in his capacity as the Provincial Treasurer of the Province of Cebu, denied petitioner's claim for refund. ^[7] cralaw

On April 28, 2000, petitioner instituted the present action for refund before the RTC. ^[8] cralaw Since only questions of law were raised in the pleadings, the RTC rendered a Judgment on the Pleadings on December 18, 2001, denying the claim for refund and dismissing the case. Hence, before the Court is the instant petition for review putting forward a purely question of law.

The petition raises the sole issue of the applicability of Section 23 of RA 7925 to petitioner. Petitioner contends that said proviso grants "equality of treatment in the telecommunications industry" and ipso facto granted to it the same exemption. It maintains that by virtue of Section 23 of RA 7925, the "in lieu of all taxes" provision in the franchises of Globe and Smart is "deemed incorporated and written into, and to have amended, its franchise."

The petition must fail.

Stripped of all extraneous factual differences, this same legal issue had been decided with finality by the Court en banc in its denial ^[9] cralaw of petitioner's Motion for Reconsideration ^[10] cralaw in Philippine Long Distance Telephone Co., Inc. (PLDT) v. City of Davao. ^[11] cralaw Moreover, the PLDT ruling had been reiterated in the subsequent cases of PLDT v. City of Bacolod ^[12] cralaw and PLDT v. Province of Laguna, ^[13] cralaw where petitioner raised the very same legal issue and virtually repeated the same arguments-which were extensively considered by this Court.

In the sister cases of Davao, Bacolod and Laguna, the Court emphatically ruled that Congress did not intend Section 23 of R.A. No. 7925 as a "blanket tax exemption" to all telecommunication entities". It applied the rule of strict construction of laws granting tax exemptions as such concessions are highly disfavored (in strictissimi juris against the taxpayer). Doubts should be resolved in favor of municipal corporations in interpreting statutory provisions on municipal taxing powers. ^[14] cralaw It concluded that Section 23 of R.A. No. 7925 "cannot be considered as having amended petitioner's franchise so as to entitle it to exemption from the imposition of local franchise taxes". ^[15] cralaw

Petitioner PLDT is advised to follow past precedents and not to disturb what has been long settled with finality (Stare decisis et non quieta movere ^[16] cralaw ).

IN VIEW OF THE FOREGOING, the instant petition for review is hereby DISMISSED for lack of merit and the assailed December 18, 2001 Judgment on the Pleadings of the Regional Trial Court is AFFIRMED. Treble costs against petitioner.

SO ORDERED.

Very truly yours,

(Sgd.) LUCITA ABJELINA-SORIANO
Clerk of Court

Endnotes:

^[1] cralaw Dated February 12, 2002, rollo, pp. 10-76.

^[2] cralaw Rollo, pp. 114-120.

^[3] cralaw An Act to Promote and Govern the Development of Philippine Telecommunications and the Delivery of Public Telecommunications Service.

^[4] cralaw Annex "B," rollo, p. 89.

^[5] cralaw Annex "C," rollo, pp. 90-95.

^[6] cralaw Supra note 4, at 88-89.

^[7] cralaw Annex "F," rollo, p. 98.

^[8] cralaw Rollo, pp. 78-86.

^[9] cralaw En Banc Resolution, G.R. No. 143867, March 25, 2003, 399 SCRA 442.

^[10] cralaw Rollo, pp. 121-145.

^[11] cralaw G.R. No. 143867, August 22, 2001, 363 SCRA 522.

^[12] cralaw G.R. No. 149179, July 15, 2005, 463 SCRA 528.

^[13] cralaw G.R. No. 151899, August 16, 2005, 467 SCRA 93.

^[14] cralaw PLDT v. Laguna, G.R. No. 151899, August 16, 2005, 467 SCRA 93, 100.

^[15] cralaw Id. at 101.

^[16] cralaw J.M. Tuason and Co., Inc. v. Mariano, G.R. No. L-33140, October 23, 1978, 85 SCRA 644, 647.

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