Court of Tax Appeals
0CTA Case No. 2827
L•
REPUBL IC OF
THE PHILIPPIMEB
COURT OF TAX APPEALS
QUEZON CI TY
BAGU IO COUNTRY CLUB
CORPORATION,
Pet.i tioner· ~
-
ver·sus -
C.T.A. CASE NO. 2827
THE COMMISSIONER OF INTERNAL
REVENUE,
Respondent.
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This is an appeal
from the decision
of
t he
Commissioner·
of
Internal
Revenue
assessing
and
demanding
payment
of
the
sum
of
P368, 9 :34 . 59,
consisting o
fi>:ed ta>:es as alleged operator of
mess
hall,
n:d:ai 1
liquor
dealer,
dealer
fer-mented liquor· and operator· of bar ·from the 2nd
sem. of 1969 to .1.972, inclusive; _... percentage ta>:es
for the years 1969- 1972 , as operator of mess hall,
bar and lodging house,
ocumentary ta>: on receipts
of
lodging
house
operator
from
1969- 1972,
and
equi va 1 ent amount for
c ience stamp ta>: ~
twen t.y-
five percent sur·charge and inter·est on
fi>:ed and
percentage taxes.
On September 2 ,
1974, petitioner through its
auditors, filed a protest against the assessment.
DEC TISTON
CTA CASE NO. PRP7T
White mo formal denial ham heen issued by
reenoncdent Commi as leaner of Internal Fre verre «
service of the warrants of distraint and Jevy an
peta tdoaner on Augie & U7, 1976 indicates
reepondent’ a determination to collect petitioner's
tan diabtilitdes and was taken by petitioner as the
Commieedoner oof Tobernadl Pevenue’ «& final decisian.
Hence, this appeal.
Th ds alleqed that Section AVIA of the Ta»
Cade, dmporing the eakterer se tay. under Peoubhlic
Act He. GAO, Am Ppespyrbeecy Via vetoed hy the
President of the Phaidippines an August 4, 1969) and
never hecame law.
Tt de further alteqed that the service and
facilities of petitioner RY exclusively for
membere, their families and quests, and not for the
qeneral publics ard that petitioner does not
maintain a loddqing house taxable under Section iI91,
and ate activity of renting its cottages and rooms
exclusively to its members, for nominal amounts to
caver upkeep and maintenance, does mat canstitute a
taxable business subject to fixed and percentage
taxes, nor to documentary and science stamp tares
imposed oon receipts issued by hotels, motels,
resthouces, Jodging houses and resart.
¢ 3 a a
DECISION --
CTA CASE NO. 2R27
(Wy Hareth SL, (9F?, this case was placed under
Archive to avwadihb the adjudication by the Supreme
Cott of Fat CAGE involv tiag a mimilar issue:
"COMMA BE
toner oof Internal Pevenue versus Manila
Golf and Country Club, Ine... et. al... ©6.R. No.
L479 eL CCID Case Ho. BaSo), an appeal toi the
Supreme Cewek since December S, 1977,
That the appealed care af Cammissioner of
Internal Revenue we. Panttia Golf and Country Club,
The. . mel. at.. Gul. Na. door dei COTA Case Ho. BESO)
ham beer decided by the Supreme Court do favor of
reeponcdendk Cammntestoaner of Tnternal Pevenue on May
AT, PRE, Ihe Stapreme Comet held as follows:
Pho opetitian noe before Us presents
any felon tical yume tion: he ther the
premdiceybiabo ovebke referred to the entire
emer biden oor omerety ote the imposition of
PPA bast orn gqroesn receipts af oneratars ar
proprietors oof reskhanrants, refreshments
par lore, hare oane other eating places
thich are maintained within the premises
ore cempracusd of AN hotel. mote] or
ree throes, Reference te the Manila
Hotel ocane, therefore, might have heen
eeffiedenk ote disepose of thie petikbkion
vere dh nok for the positdon of the CTA
that a chief executive has mo power to
veto part of an dtem in a bills either he
vetoes an entire section ar approves it
but moto a fraction thereof.
Herein private respondent, Manila
Gotp & Country OClub, Ine. te non-stock
corporation. True, it maintains ai galf
couree and operates ai clubhouse with a
DECISION -
CTA CASE NO. 2B27 Yeunge., bar and dining roam, hut these facdlabtioe are for the exclusive use of dts members and arcompanted qiueste, and thocharqes oon cogteplium-onpense hasie. Nec omiurh., th claitime db should have heen esempk freom payment oof priviledqe taxes wore dbhonok for the Tash paragraph of Seetionm AeA of R.A. Me 6119, otherwise knee ae the "Omodbes Tas law." Section 1d A yreaces "See. Lt A. Caterer. a) caterer’ a has ie hereby dimpased as fotllowes:
"Edd ry prope be tors or qpesparbour en cv restaurants, refreshment oper dlors and other eating places, djnoluding clubs, ead caterers, three per cent of thetr qross recetpte, "PY Ory pooprdietorrs or epepaboarea of roetatranke,. barn, eafes and other eating places, the toding elTtubhe, whore dics. titled eparibe, formented liquors, oor wines are served, three pereent of their qrosgs reeeipte from sale of fead or refreshments and meven per cent Of thear qreee receipts from reey les af dietilled epirdits, fesrmeon bed Ticpior es or wines.
Teo sebke of commercial dnvoices or oreeed pte eerdally numbered in duplicate shad hes eepapakely prepared and iasued, enim far sale of refreshments aeryed, and oanather for each § of distilled apirits, fermented Liquors or wines served, the ordqinalea of the invoices ar receipts toa he ieeued to the purchaser or customer.
"Cyd On proprietors or Ne ~~ v q
DECTSION -
CTA CASE NO. 2A27 o bay ~ yofroshment narboares , bare, cafern and other eating places which are maintatiecd within the premises ce compound of a hotel, motel, resthouse , cerckpit., race trach, jain-alali. cabaret, nmiaghb or day club hy means Of A cannecking doar oar PASSAQe buen ty mer cent of their qroes receipts.
"Where the establishments eRe operakteod ce maintained by clubs of AY kane ar na tice (irrespective of the dispositiean of their net incame and whether oor mot they cater ese lusively to members or their ques ts ) the keepers of the establishments sstyad pay the corresponding tan at the rate fixed ahove.” fLunderscaring ea | Peepurkidde Met fle. Gilg tank ef feeb an Sept emir Al, aoe My this virtue, pettittaner arepeemed the club faisxech taxes cea pep a bores of cro f Links and reetaurants, marvel aden percentaqe tan fe abeorer oe bas) for ate sate of fonds and fesramerr bed bb eqecei es Send preves for the period cover dng Geptemher iso tea December 1970 dsy other amet oof FOP, aoa. sa. The oelub pretested claiming the ansareesment toa he wae Ebrenet hasie hemarcde Sectian 43 HAS see boed by the Preaddent Marcos. The veto Message reads
RAL ACATOANE
Hanila Migquat 4, 19469 "Gentlemen of the House of Representatives:
Zou DECTSTOtN CTA CASE NO. 2AR7 4 wu t irvfesr am hie T breve thiat Hi. Fe.
wee dry stagned entities
SAM ARP ATER
CPR TATE FROM TE
Or THE MOAT TONAL.
PEYETIUE CODE. AS "Regeemiran eb be of VT.
freer weeny Yas bone Mr tice Lory, fol lLewing t hye have in ot of r it dbems Warnes on ars pp. 44, SFM. 4.
now Gee bion tepev a caherey 5 tia of the proprietors pero ene of of par bores placess cr:
roe tari ants , aye bhrer receipts cre
CY CVS
foveret re fr oediment perme k ony cpp eye oe Chee osadle oof dinehildt fermonbeecd Ptaiece oar prop de tore cw py romhaarante, other eabking wifresy es hare, places distil Liriere, and twenty reeedprbs arn aner ea hours of parten e lithe, fermented sep yes Cp et es or ro froeetiment cafes: and other maintained within t or compound of ai he resthouse, cockpit, jJain~alai,.
club. or which to patroans of ments hy means door or passaqe.
cabaret. 1m are gaia of a eda Heo.
Seebtic yout mabdech groae cub bey perernt freon toy r eating feo this 7A, fiers hayes YING ITORS TMEERHAL.
OU MDED ’
the a) Oe CR), Cone ba bute vetoed the his bills seyeye areas Inererbking a Lmpoees thor eve receipts operators refreshment eaking of the sale of and even of eceinkes from Wines, on erabors of cafes arrel tne dudand cpirite, WINES are percent oof proprietors estaurants, By bara, places he premises tel. motel, race tract, ight or day accessible estahlish- cannecting " eed
NECISIOW ~
CIN CASE NO. 2AP7 “ Thre brarccheny cf baseabien wi td hres mid f bord be the consuming public.
“The deve Tepment of hatela, essenmbial ta cu bouriat dndiuebhry, may he ree by adned cones d der ing thak a bia portion of hated Parnas COME ee from food sale, msex!
"This bhidd, HR. Mo.
ATA. han hecome Republic Ack Hea, S110, "Tree peck fully, "ECSEDY FRED TRYMD Eo. MARCOS Punderrearind ours] The opratemboabion of the eltub dented oby the petitioner wha maintains thak Seebtom 42 was nok entirely vetoed Pett omerely the words "hetele, motele reethets|@s oon the aground that bh might roetradna the development of hotels which ie eeeonbial to the toaurdem industry.
Thies ade ain fet was the postition of Houee Bayes and deans Committee which reporkech, too wits "Wien Congress decided toa en dit Sec tbion 194 inta two parte, One dealing with contractors, and the other dealing with those who serve food and drinks, the dintention was to classify and to improve. While the Congress expanded the coverage of both £91 and 191-A, it also provided for certain exempt lones. The veto message BPE MNS to abject certain additions to Beas oe 2 What ere
DECISION -—
CTO COSE NO. ?R27 addi bions aye ohjoctionab les can he qleanecd from the reasons qaiven: A genera} reasany thak thie oeorho oof fax is passed cm to othe consuming pudaliec, amd oa par bhiewular PEATE that hiatel deve Lopmeerrie . ee premmntial te thie tour de & drichie tiry » may he ree tradoec. There reasons haye heen tiafeerry tvepe ther an thre interpretations of thie VYELO meeracqge and the deletions of exten dy enterpriges Ar are connected wai th the tour iek dndruestry has therefore been recommended.
Ta dnherpret the YRLO moeracge otherwise wotdch resulbt tn othe ororemphtion omf embities already subjeek of tay. This wentid ibe aherrd. Where the Cangress wanted ta enemmt., it was oso opirrovicded otra the bill. Whade othe Fromicfent may veta any temo oor dbtems ino a reverntie hdtt., the canstitubtiean dass nok qive drim the paver fo repeal oan estietding baw, (Bod Undorrsemernt dated December 7 194°, (Cheadrmeny on a and Neane,. Sdisth Cangrees af the Menutlic of othe Phil.) (Fhe. Ad, op. OO. EOD... ree..." (pp. BRO-P1L, Polio Tt. CEA ES hy: rOAameony af interpretation of theo Committee that Mo. SAAD wars pubbisthed an Volume 66 1A. op. AS™1 of the Of ficial Garette this ROA.
No.
(May F, AVIS) an such a way that Section t91-A was aneduded adn the test save for words "hotels, motels, resthouses."
the As already mentioned, the Coturt of Tax Appeals, unan petition by the club, eustained the latter's position reasoning that the veto metsaqe was clear and unqualified, as in fact it was confirmed edu DEC TS Tote CA CAGE ray, PAP?
bhi res yep es Teter, af beer COME Ope Gr ey, tise thy Officer of Mreredcenyh, Ubwuess "Hho. Mpnderea th Sieon. de, Sarr Per tar Trai tading, trod, YY. tagodtsrd. P.O), Pho BES Manila, Phi tippiner “Dear airs “ubhttha pa firey epee be Yoo Terbber dahed wterty td, Aree, ae waiedy fe difoerm yo bhak See tien Vo Pobldet conkadiae See L7i- A] of dlewerm thi lt Mea, A 7EPES oad roy. ATI reyes Curyes af thie Seo b Leu weer beet by the Py ers detent try dyde ves ber meee eepe Hrberrf Arter BT ARPA wer boating eeyeeig eee bions oof thie said prswrepatie fetid de Vepyw Prudby Yours, "CSOD, YY TRH Oa TP. AGHIT PRE SP. Preeitdegbiad Gthaff Ansistank" Cp. 49. Tet to) (yer mer bh ioanmed par lier . We adrendy ruler that the proemidential re froey ag eet mero ly te t byes inclusitan hobete., matetea and penbkhoueses doo the coaberer orm bass bramkeb brik nek ote whode eme bio. hth, ac mentioned ear ade, bhe CPA opdnecd bhak the Presi eould not ovete werrts oc phreares dinoia bebo andy an entire btbrem. Ohyviously.
morchy the have veto af SOV, the Lier dent fit what the O77 meant by "item" was an entire emec tion. We do mob agrer. Foot assuming it to be so, it would also be to petitioner’ s favor. The ineffectual
POV ETT
veto hy Tyee President rendered the whole eecttoaon P9t-A as not having heen vetoed ak alloand at, therefore, hecame la ary Lane Wo AG etitutional veto has no effect whatenever . (Seen Holignan Electronics Corp. ve. Valeria, No. ble 1944, 11 GEOMA AAA).
FAO, June 23's DECTSTON CIA CASE NO. 2ABeR7 10 - Ploumwer \Jrs ROE OP wilt then Sotbdetter Germesr ad Fetelite Hendora and hie aAesordates that dnelusion of hotels, moked es arsed pment beac in the eel, Cahberor os tease brace t are "Ateme" in Lhomsedves within the meaning of Gee. PO Ca). Orb. Vt mf the (FTN Conska hubkdon which, bhere fore. the Preeident has tthe poner fer veto. My “them dn a pewvenite hit clome mat refer to oan enbire eee tion tinpertic oa peaetieoutar tiled omf bee. bub yather te thre eahjeet oof bhe tay and the bas pate, Try the portion mf a reventie had ooebateh achuadly impocoe a bry a eee tion identifdes the tan enumerates the Per eos Liiatbin hye ye fey tei th the correenornreline tas rate. To construe the wrod) “a bem" as roferring to the whale cece biorn woute bie the President’ s hand in hood mad bhesr bea appa ve the whole eecbtion ab the expences of also approving eX praviston theredn wibyieh he deems tacemmephable oor vette the eobire secticn mt thie EEO ae cf foreqoing the cablecktion of the deand of tax altogether. The eval which tac centqoht to be prevented in oqivdnag theo preesdictent the power the diseappreave tleme ti a revenue hip l woutd hes per petro atesc rendering that pawenrr inibkidle (See Commonwealth en rel. Elkin Won Trarne tt. Le? Ta, Lé1, ao LAA &88P CAear yy).
WHEREFORE, We sn bold that petitioner, Baquio Country Club Corporation, Ls liable to pay caterer’sS tax in the amount of P268,9734.59. With costs against petitioner.
SO ORDERED.
Quezan City, Netro Manila, October p15, 1990, CONSTANTE ZC. ROAQUIN Afsorniate Judqe / 23u PECTSTOM CIS CASE NO. PR?7 tt -
TO OCCOWIOUHS
ls - REYPS a Nteocia te drictee "7 Ww F FF FOTN OT eDe tT hereby cer khify that this decision Was reached after due coneultation between the members of thre forth oof Tas Appeats in owaecordance wath Section tS, Arbtdete YUTt af the a ion.
CONST AN TE é: . ROAWOUIN fy a octake Jredlepe Cot bo oof Tas Appeals Z3su