Source: http://lawlibrary.chanrobles.com/index.php?option=com_content&view=article&id=82008:56073&catid=1572&Itemid=566
Timestamp: 2019-04-21 04:52:07+00:00

Document:
SWEDISH MATCH PHILIPPINES, INC., Petitioner, v. THE TREASURER OF THE CITY OF MANILA, Respondent.
This is a Petition for Review on Certiorari1 filed by Swedish Match Philippines, Inc. (petitioner) under Rule 45 of the 1997 Rules of Civil Procedure assailing the Court of Tax Appeals En Banc (CTA En Banc) Decision2 dated 1 October 2007 and Resolution3 dated 14 January 2008 in C.T.A. EB No. 241.
Assenting that it was not liable to pay taxes under Section 21, petitioner wrote a letter8 dated 17 September 2003 to herein respondent claiming a refund of business taxes the former had paid pursuant to the said provision. Petitioner argued that payment under Section 21 constituted double taxation in view of its payment under Section 14.
On 17 October 2003, for the alleged failure of respondent to act on its claim for a refund, petitioner filed a Petition for Refund of Taxes9 with the RTC of Manila in accordance with Section 196 of the Local Government Code of 1991. The Petition was docketed as Civil Case No. 03-108163.
On 14 June 2004, the Regional Trial Court (RTC), Branch 21 of Manila rendered a Decision10 in Civil Case No. 03-108163 dismissing the Petition for the failure of petitioner to plead the latter’s capacity to sue and to state the authority of Tiarra T. Batilaran-Beleno (Ms. Beleno), who had executed the Verification and Certification of Non-Forum Shopping.
In denying petitioner’s Motion for Reconsideration, the RTC went on to say that Sections 14 and 21 pertained to taxes of a different nature and, thus, the elements of double taxation were wanting in this case.
On appeal, the CTA Second Division affirmed the RTC’s dismissal of the Petition for Refund of Taxes on the ground that petitioner had failed to state the authority of Ms. Beleno to institute the suit.
In this case, the plaintiff is the Swedish Match Philippines, Inc. However, as found by the RTC as well as the Court in Division, the signatory of the verification and/or certification of non-forum shopping is Ms. Beleno, the company’s Finance Manager, and that there was no board resolution or secretary's certificate showing proof of Ms. Beleno’s authority in acting in behalf of the corporation at the time the initiatory pleading was filed in the RTC. It is therefore, correct that the case be dismissed.
WHEREFORE, premises considered, the petition for review is hereby DENIED. Accordingly, the assailed Decision and the Resolution dated August 8, 2006 and November 27, 2006, respectively, are hereby AFFIRMED in toto.
Anent the procedural issue, petitioner argues that there can be no dispute that Ms. Beleno was acting within her authority when she instituted the Petition for Refund before the RTC, notwithstanding that the Petition was not accompanied by a Secretary’s Certificate. Her authority was ratified by the Board in its Resolution adopted on 19 May 2004. Thus, even if she was not authorized to execute the Verification and Certification at the time of the filing of the Petition, the ratification by the board of directors retroactively applied to the date of her signing.
On the other hand, respondent contends that petitioner failed to establish the authority of Ms. Beleno to institute the present action on behalf of the corporation. Citing Philippine Airlines v. Flight Attendants and Stewards Association of the Philippines (PAL v. FASAP),13 respondent avers that the required certification of non-forum shopping should have been valid at the time of the filing of the Petition. The Petition, therefore, was defective due to the flawed Verification and Certification of Non-Forum Shopping, which were insufficient in form and therefore a clear violation of Section 5, Rule 7 of the 1997 Rules of Civil Procedure.
Time and again, this Court has been faced with the issue of the validity of the verification and certification of non-forum shopping, absent any authority from the board of directors.
In a slew of cases, however, we have recognized the authority of some corporate officers to sign the verification and certification against forum shopping. In Mactan-Cebu International Airport Authority v. CA, we recognized the authority of a general manager or acting general manager to sign the verification and certificate against forum shopping; in Pfizer v. Galan, we upheld the validity of a verification signed by an "employment specialist" who had not even presented any proof of her authority to represent the company; in Novelty Philippines, Inc., v. CA, we ruled that a personnel officer who signed the petition but did not attach the authority from the company is authorized to sign the verification and non-forum shopping certificate; and in Lepanto Consolidated Mining Company v. WMC Resources International Pty. Ltd. (Lepanto), we ruled that the Chairperson of the Board and President of the Company can sign the verification and certificate against non-forum shopping even without the submission of the board’s authorization.
Given the present factual circumstances, we find that the liberal jurisprudential exception may be applied to this case.
A distinction between noncompliance and substantial compliance with the requirements of a certificate of non-forum shopping and verification as provided in the Rules of Court must be made.22 In this case, it is undisputed that the Petition filed with the RTC was accompanied by a Verification and Certification of Non-Forum Shopping signed by Ms. Beleno, although without proof of authority from the board. However, this Court finds that the belated submission of the Secretary’s Certificate constitutes substantial compliance with Sections 4 and 5, Rule 7 of the 1997 Revised Rules on Civil Procedure.
Additionally, it may be remembered that the Petition filed with the RTC was a claim for a refund of business taxes. It should be noted that the nature of the position of Ms. Beleno as the corporation’s finance director/manager is relevant to the determination of her capability and sufficiency to verify the truthfulness and correctness of the allegations in the Petition. A finance director/manager looks after the overall management of the financial operations of the organization and is normally in charge of financial reports, which necessarily include taxes assessed and paid by the corporation. Thus, for this particular case, Ms. Beleno, as finance director, may be said to have been in a position to verify the truthfulness and correctness of the allegations in the claim for a refund of the corporation’s business taxes.
More importantly, taking into consideration the substantial issue of this case, we find a special circumstance or compelling reason to justify the relaxation of the rule. Therefore, we deem it more in accord with substantive justice that the case be decided on the merits.
As to the substantive issues, petitioner maintains that the enforcement of Section 21 of the Manila Revenue Code constitutes double taxation in view of the taxes collected under Section 14 of the same code. Petitioner points out that Section 21 is not in itself invalid, but the enforcement of this provision would constitute double taxation if business taxes have already been paid under Section 14 of the same revenue code. Petitioner further argues that since Ordinance Nos. 7988 and 8011 have already been declared null and void in Coca-Cola Bottlers Philippines, Inc. v. City of Manila,26 all taxes collected and paid on the basis of these ordinances should be refunded.
In turn, respondent argues that Sections 14 and 21 pertain to two different objects of tax; thus, they are not of the same kind and character so as to constitute double taxation. Section 14 is a tax on manufacturers, assemblers, and other processors, while Section 21 applies to businesses subject to excise, value-added, or percentage tax. Respondent posits that under Section 21, petitioner is merely a withholding tax agent of the City of Manila.
Petitioners obstinately ignore the exempting proviso in Section 21 of Tax Ordinance No. 7794, to their own detriment. Said exempting proviso was precisely included in said section so as to avoid double taxation.
Double taxation means taxing the same property twice when it should be taxed only once; that is, “taxing the same person twice by the same jurisdiction for the same thing.” It is obnoxious when the taxpayer is taxed twice, when it should be but once. Otherwise described as “direct duplicate taxation,” the two taxes must be imposed on the same subject matter, for the same purpose, by the same taxing authority, within the same jurisdiction, during the same taxing period; and the taxes must be of the same kind or character.
Using the aforementioned test, the Court finds that there is indeed double taxation if respondent is subjected to the taxes under both Sections 14 and 21 of Tax Ordinance No. 7794, since these are being imposed: (1) on the same subject matter – the privilege of doing business in the City of Manila; (2) for the same purpose – to make persons conducting business within the City of Manila contribute to city revenues; (3) by the same taxing authority – petitioner City of Manila; (4) within the same taxing jurisdiction – within the territorial jurisdiction of the City of Manila; (5) for the same taxing periods – per calendar year; and (6) of the same kind or character – a local business tax imposed on gross sales or receipts of the business.
Based on the foregoing reasons, petitioner should not have been subjected to taxes under Section 21 of the Manila Revenue Code for the fourth quarter of 2001, considering that it had already been paying local business tax under Section 14 of the same ordinance.
It is undisputed from the facts of the case that Tax Ordinance No. 7988 has already been declared by the DOJ Secretary, in its Order, dated 17 August 2000, as null and void and without legal effect due to respondents’ failure to satisfy the requirement that said ordinance be published for three consecutive days as required by law. Neither is there quibbling on the fact that the said Order of the DOJ was never appealed by the City of Manila, thus, it had attained finality after the lapse of the period to appeal.
Furthermore, the RTC of Manila, Branch 21, in its Decision dated 28 November 2001, reiterated the findings of the DOJ Secretary that respondents failed to follow the procedure in the enactment of tax measures as mandated by Section 188 of the Local Government Code of 1991, in that they failed to publish Tax Ordinance No. 7988 for three consecutive days in a newspaper of local circulation. From the foregoing, it is evident that Tax Ordinance No. 7988 is null and void as said ordinance was published only for one day in the 22 May 2000 issue of the Philippine Post in contravention of the unmistakable directive of the Local Government Code of 1991.
Accordingly, respondent’s assessment under both Sections 14 and 21 had no basis. Petitioner is indeed liable to pay business taxes to the City of Manila; nevertheless, considering that the former has already paid these taxes under Section 14 of the Manila Revenue Code, it is exempt from the same payments under Section 21 of the same code. Hence, payments made under Section 21 must be refunded in favor of petitioner.
It is undisputed that petitioner paid business taxes based on Sections 14 and 21 for the fourth quarter of 2001 in the total amount of P470,932.21.31 Therefore, it is entitled to a refund of P164,552.0432 corresponding to the payment under Section 21 of the Manila Revenue Code.
WHEREFORE, premises considered, the instant Petition is GRANTED. Accordingly, the Court of Tax Appeals En Banc Decision dated 1 October 2007 and Resolution dated 14 January 2008 are REVERSED and SET ASIDE.
5 SEC. 14. Tax on Manufacturers, Assemblers and other Processors. - There is hereby imposed a graduated tax on manufacturers, assemblers, repackers, processors, brewers, distillers, rectifiers and compounders of liquors, distilled spirits, and wines on manufacturers of any articles of commerce of whatever kind or nature in accordance with the following schedule.
32Annex “C” of the Petition, id. at 91.

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