Court of Tax Appeals
0Y \\ Ishar, et al. vs. Commissioner of Interna Revenue
,
ee
RROUSTIC OF THE PRT
Bn A TPPINES
COUR) OF Tay APPEALS
QUEZON city
y
\\
ISHAR , \
Petitioner apy
| _ versus CTA CASE NO, 1167
COMMISSIONER OF INTERNA
REVENUE
Respondent.
This case refers to a claim for refund in the
anount of #17,016.08, representing percentage taxes
for the period from Yebruary 2f, 1957 to October 5,
1960, inclusive. .
The parties agreed and stipulated on the
fects, the pertinent portions of which are as
follows:
“2. That petitioner operates the
Honest Watchman Aconey with place of
business situated at Manila, Philippines.
"3. ‘That pursuant te Section 191.
of the “etiona] Internal Nevenue Code,
which provides in part, to wit:
binders, business egents and
other independent contractors,
shall pay a tax equivelent. to
three per centum of their
gross receints.'
the ent taxed the petitioner and
the let paid the texes
therein forth in the total sum of
#17,018.08 under the following official
a oe on the dates respectively
herea namedst
DECISION =
CTA CASE AO, 1167
22096362
3896
Serial fovoe608
Serial #01
Serial ease
Serial #042049
DECISION «
CTA CASE NO, 1167
3
24, 1960, to determine whether or not said
claim could be ap and that when
petitioner filed. present action, the
respondent was formula at his decision.
(See Annexes tA & *hny!
"5, That under the decisional —
tr under the circumstances, be
led without the necessity of awaiting
the decision @f the respondent coamis-
sioner, to avoid the running out of the
2-year prescriptive period.
"6. That the Stones ootanet tate
contracts with the
Estrella del Herts hove Hermanos, Inc.)
Yarmacia Rubi
Riverside yet eng A tion, and
Yrse Residence, petitioner eontract
had ered inte vith
been ent
(See also BIR Record 155, 162183
19-225 23-255 Reconey ope 3p 33.38!)
"7, That the tioner has collect-
ed from the aboveestated companies the
agen amounts during the years 1957
: -
een
= 10308 4
seteateeee 167 5400.
Pt eer. ss 944631,00"
camaaaas of Pacts, CTA Rees, pp. 25-27.)
Law
DBCISION «
CTA CASE NO, 1167
lb
The issues raised in this case ares
je Whether or not petitioner's clain for refund
has already prescribed; and
2. Whether or not petitioner should be texed
as an independent contractor within the context of
Seetion 191 of the National Internal Neveme Code.
On the issue of prescription, it appears from
the afore-quoted stipulation of facts, that the
taxes in question had been paid from February 28,
1957 to October 5, 1960, It also appears that the
instant petition seeking the refund of the said taxes
was filed on Jamvary 275 1962.
As to the taxes paid from February 2, 1957 to.
January 27, 1960, inclusive, we find that the instant
petition for review was filed beyond the statutory
period of two (2) years provided by law, which reads
as follows:
x x x an
Sp Slenn atten tae eupieethen of & pence
from date of payment of the tex
is Ak ae National In-
°
/ Te tempayer's Teblnve te eumply with the require-
went regarding the institution of the action or pro-
ceeding in court within two (2) years after the pay-
ment of the tex is a bar to the recovery of the sane,
irrespective of whether or not a claim for refund
of such taxes filed with the Collector of Internal
1390
DECISION =
GTA CASE NO, 1167.
5
Revenue ig still pending action by the latter.
(Yollege of Oral & Dental Surgery v. Coll., G. fi. Noe
Iw10446, Jan. 26, 19583 Gibbs v. Coll., G. 8. Noe le
13453, Feb. 29, 1960.) Menee, the right of the
petitioner to recover the taxes which were peid froa
February 26, 1957 to January 27, 1960 has already
prescribed. |
With respect to the other issue, petitioner
contends that he ‘9 not an indenendent contractor
within the purview of Seetion 191 of the Kevenue Code
because he receives instructions as to what to do,
and how to do the work for his clients. Moreover,
he invokes the rule of “ginadem generis" that where
general words follow the designation of perticular
things, or classes of persons or subjects, the general
words will usually be construed to include only these
persons or things of the same class or general nature
as those specifically enumerated (Crawford, See. 191);
and then concludes that the phrase “x x x and other
- {ndependent contractors" mentioned in Seetion 191
of the Nevenue Code shovld include only those enumera-
ted in the said section. Petitioner further clains
that his business is not similar to those emmerated
in Section 191 of the Revenue Code, and therefore he
cannot be taxed under the said lav. |
We had oceasion to pass upon the question of
whether « person is an independent contractor in the
131
DECISION -
CTA CASB NO. 1167 6 - @age of Balbas et al., v. Yomingo, ©. T, A. Case ilo, 951, Teb. 9, 1962, wherein the court set the following eriterion:
"*vhether a person is an employee or an independent contractor is an ultimate fact to be determined from the evidence, and it may be called a con- 9
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252, 255; State vs. imerson, og 455, Toad ve. lent yo A¥e “Os Bbets S SeLe sapae In the light of the test laid down in the above ease, we will now determine the status of petitioner in the case at ber. | / & qursory examination of the records reveals that the various contracts entered into between peti- 132
DECISION ~
CTA CASE NO. 1167 7 tioner end his clients ere olmest of the sane tenor. The former undertakes to furnish the latter with security cuards or protection service, This obligation is common in all the contracts, | For a better appreciation of the real nature of the busi- | ness of petitioner, we are quoting below Article § of petitioner's contract with the Shell Company of the Philippines: .
“S, There shall be no yer- ;
relationship between AGENCY a8 a § ;
$ g i persons or their 3 mor for any amount, claim, or pg eivil or hereon any Mig aah peng censes, texes permits overtime work or any other . permits, all of which shail be for the ere Se core, Wee coe Coenen ROGERe covenants and agrees assume ell liability Rh lng ce A By By gs Magy + Fie claim above described, and save the COMPANY 88 .
control er direction merely as to the result to be a shed by the work herein specified end ‘as the means and methods for accomplishing such pecIsion .
CTA CASE NO, 1267 ~8-« erahiawnest fern.
a From the above-quoted provision of the contract, it appears that petitioner assumes the liabilities fer injury to the guards, negligence or carelessness ef petitioner or any of the guards, and those appertein- ing to licenses, taxes, permits for overtime work, or any other permits. This assumption of liabilities is a clear indication of the independent status of peti- tioner.
/ ‘he instructions, contained in some of the con- tracts, relative to the duties of petitioner to check and verify all goods and merchandise being taken out of the promises, to prevent thefts or robberies, des- traction or damage by fire or any other such calamity, which may occur in the premises under guard; and to report any such occurrence to the client and to the proper police euthorities, do not affect the status of petitioner as an independent eantrastor because they are necessary and appropriate to ensure the performance of the obligation of the contractor under the contracts.
/~ Purthermore, it appears that petitioner has sinder his eaploy about fifty watchmen, more or less (B18 Records, p. 36), whe are all under his oun personal responsibility, and that there is no employer-euployee relationship between hin and his clients. The former has the entire control and supervision of the work 134
DECISION ~
CTA CASE NO. 1167 9 agreed upon. The petitioner is subject to the con- trol of the client merely as to the result. ‘to be accomplished. “e represents the will of hie clients only as to the result of his work, and not az to the means by which it is accomplished, Indisputabdly, | such circumstances show that petitioner is an in- dependent contractor, vA Moreover, it is to be noted that Section 194 of the Revenue Code has undergone several amendments. As gathered from “ouse 8111 No. 5809, which became Republic Act Yo. 1612, the manifest conrressional intent is to broaden the scope of the law to include other activities of the neture wiich is essentially sales of services and arc heretofore enjoying exempt- fon from tax in view of the deficiencies of the law (See Congressional Pet., Neuse of Reps, 3rd Congress, 3ra Reg. Session ~ 1956, Yol. 6, Nos. 776, pre 2946-2947) .
/ The Goctrine of “ejysdem cenerin" is bet a rule of construction adopted as an aid to escertain and give effect to legislative intent when the intent is uneertain or aubiguous; it showld not be se applied as to defeat the purpose of the law. In other words, the doctrine is not of universal applicetion. Its application must yield to the manifest intent of Congress (Genato Coumercial Corp. v. Court of Tex Appeals, et ale, G. NM. Now 111727, Sept. 295. 1958).
.
135
DECISION -
CTA CASE NO. 1467 10 Finding no werit in the herein appeal, the same has te be, as it is hereby, dismissed. With costs against petitioner.
80 ORDERED.
Quezon City, July 30, 1965.
y A SOWPLO D. REYES, GR,
Presiding Judge
I CONCUR:
ROMAN M, UMALI
Associate Judge
Judge Afurong did not take part.
136