HEPlJBl.

lC OF THE PHTLTPPJNES
COUHT li F TA X APPEALS
UtiEZUN CITY

REPIJ BL1C BHOAOCASTING

I NC .

SYSTEI'I.

Petitioner,
-

C.T. A.

vers us -

COHMIS S ION ~R

CASE NO. 4 630

OF INTERNAL

REVENUE,
Re s p onde n t.
X

This ca se
a

d o mr-> st.ic

c;

and

mere

permit

Y.

_L

te l.evision

involv es a

cqrroration,

r ad io

que s tion
e ng aged

in

the

broadcasting

a nd /o r

license,

whethe r

by

is

or

not

busin ess
virtu e

of

of

liable

f or

franch ise tax.

The fact s

are undisputed.

Respondent
is sued

two

assr:-ss rn F:> n t:

1990 agai n st:

existing

a nd

are s h o wn

f rn -

fourl: h

and

by

of

n otices ,

petitioner,

undrr

Ph i J i p r i n es

t h i rd

Commissione r

dp :f"' c i e n cy

b P J. 1,w:

-H~
')
7~

both

of

of

the

ft a nell i se

1 9B7 ,

Re venue
June

18 ,

or{:lani. z.e rl

and

dated

co rporation

virtue

quarters

Internal

laws
ta x

deta:ils

of

the

for

the

of

wh ic h

DECISION C.T. A. CASE NO.

4630.
-

2 -

1987 ..De.fici enc y Franchise.._. T?~.

Gross Taxable Rec ei pts

Tax Due:
p 3,520 , 165.90
----- __! ~ Q.~_ ';?..'? '3 !...Jt~
p 3,661 , 165.75

5~
3~

Deficien cy
Add : Sur char ge < 25~ )
Int erest (50~> from
1/ 2 1/87 to 5/ 15/90
Compromis e p enal ty

915, 291. 43
2,745 , 874.30

-- ____! ~, _QQ9 .... QQ

~ :=]~ ~~~? ~~~~-~-- -~

f.()UJlJ'H.__ QUARTER;

Gross Taxable Rece ipts

Tax Due:
p 4,598,549.77

5~

__

1~1. 4~9,

3~

The

ass ess me nts

p rotested

by

that

ha ve

they

that time wa s

no

not

1,198,274.85
2,815 , 945.89
____ ........ .15, OOQ. OQ

e. _ 8-'--~-~~L3,~Q,_ _!_~

totalling

petition er

on

basis

in

~ ubj ect

52

p 4,793,0'39.39

Deficien cy
Add: Surcharqe <25~>
Interest (50~> from
1/ 2 1187 to 6/15/90
Comp romisP p enalt y

P16, 159, 65 1 .61

July
law

2,

s ince

to th e

1990

were

alleging

petition er at

franchise tax und er

t h e Tax Code.
On
deci sio n

Jun e

2 1,

dated

1 '391,
M~y

respondent

6,

1 991

issued

denyinq

prot es t.
Hen ce ,

this petition for review.

,..., . ) t'
{

1-

hi s

final

petitioner's

DECISION C.T.A. CASE NO.

4fi30.
-

Petitio n er,
was

grantee

Republic
R.A.

Act

No.

construct,

in
of

its
a

<R. A. >

982

Memorandum,
legislative

No.

<1954>

maintain

3 -

513

and
and

states

franchise

< 1950 >,

R.A.

operate

No.

that

it

under

as

amended

by

5351

<1968>

to

stations

:for

radio

and television broadcasting.

It contends that the :franchise was existing and
operative
31,
No.

1 98 1
576-A,

unti l
as

its

mandated

t ermi nation
by

the pertinent

e:ffecti ve

Presidential

December

Decree

< P. D.

provisions o:f which read as

:follow s :
1.
No
radio
station
or
" SECTION
television c h a nneJ may obta i n a :franchise
unless i t has su f ficiency CCif'i tal on the
basis of eq u ity for its operatio n for at
least one < 1 > year , including purchase of
equipment.
XXX

>

XXX

XXX

SECTION 6.
All :franchises,
grants,
licenses,
permits,
certificates or other
:forms of authority
to operate radio or
tele vision
br o ad c a sting
syste ms
~hall
terminate
on
Decl?mber
31 '
1981.
Thereaft.P r , i rr i? Spl?ctive of a ny franchise,
grant ,
lj c ensl?,
p e rmit,
ce rtificate
or
other
f or ms
of
authori. ty
to
o pera te
qranted by any office,
aq e n c y or person,
no radio or televi s ion station sh all be
authori z Pd
t~
operate
wi thout
the
authority o f
the Board of Cnmmunicati on s
and
the
S <=w rf?tary
of
Publ i c
Works
and
Comm un icatinnR
or
th~?ir
s u c ce ssors
who
h ave th e r jq ht. nnd a ut.h o r]ty to assign to
qualified
p Arti e s,
frequen~je s ,
channels
or other mPRn s of id entifying b roa d c asting
sy s tems;
Pr0vid e d ,
hiJwever,
that
any
conf l i c t
over,
or
djsaqree>me n t
with ,
a
d e cision of th e aforement i on e d aut h or i ties

DECI S ION C.T.A. CASE NU.

4630.
-

'i

may bF.? appealed fi nally to the Office of

the Pre si dent
within fifteen
(15>
days
from the date the decision is received by
the party in
interest."
<Underscoring
supplied>
Petitioner
January 1,

that

during

1 9B2 up to July 31,

operat e

its

stations

by

issued

aver s

radio
virtue

on

mere

yearly

199 2 ,

permits

basis

<NTC>

obt ained

the

No.

franchise

thro ugh

broadcasting
licenses

the

National

and that i t only

enact ment

7252 which took effect on August 1,

Further,

of

1992.

petitioner notes that:

"Th us ,
to
insist
that
peti ticmer
continued
to
be
a
franchise
holder
notwithstanding P. D.
576-A and prior to
the pa ssag e of R. A. 7252 as hereinbefore
me nt ioned
would
be
an
illogical
propos ition .
If
the
franchise
of
petitioner, as argued by respondent, was
not terminated hy P. D. 576 - A, then there
would have been no need for petitioner to
apply for a new franchise and for Co ngr ess
to
pa ss
a
law granting
the same un to
pe i tioner.
The f;:wt that R. A. 7252 was
passed into J <=! W plainly demonst. rat. es that
prior to its enactment in 1992, petitioner
was not
a
hold e r
o any franchise
tn
operate its broad cas ting stations.
It is
preci se l y for th e aforesaid reason that
pet.ition Pr
was
not
subje c t
t o
the
franch ise t ax frnm 1 9 8 2 to July 1992, for
Section
11 7
as
her ei nbefore
quoted,
expressly impo seR a franchise tax only 'in
respect to all franchises , upon the gross
r eceipts from t h e business covered by the
law g rr)n t i nq the franchise
Since
peti t.i r>n r:>r had rt=>;;u:;ed to operate under a
franch i sr>
as of
Decem her
3 1,
1981,
no
IJ Rsi. tlt rrt=> fflr exists from that date un ti. l

~J

') 0
I ~- 'I

from

and/or

by

Telecommuni cations Commission

period

i t continued to

television

and
of

the

R. A.

DECI SION C.T.A. CASE NO.

4&30.
-

5 -

.J uly 31, 1'392 for the imposition of the

franchise
tax
against
petitio n er ."
<Memorandum for Petitioner , p. 8, C. T. A.
Hecords , p. 104>
Respondent,

on

the

other

hand ,

advanced

the

following arguments to su pport hi s assessments .

Firstly,
P.O.
to

he

576 ~ A

No.

claims

re vok ~d

petitioner,

subs e qu e n tly

that

"n eve1 t he le ss,

testored

or

the

Communications

Publ ic

Works

and

C. T. A.

Re cords,

or

that

the

favor

th e

petitioner

franchise
eng age

maid

in

and

th<:1t.

for

it

therefore ,

po ssi ble

wa y

duly

the

of

issued

by

Secret ar y

of

<Answer ,

fo r

license
the
th e

operations

Section

the

or

to o k

.1

requir e ment

and

authority

brn~dcRstinq

considering
provide s

nq

l icense

by

wa s

p.

4,

It is the conten tion of the

36 >

p.

of

franchi se

Communicatio n s ".

resp ondent
of

such

reinstated

a u thority

of

Section

the earliPr franchise granted

corre s pond ing

Board

although

of

the

is sue d

place

in

of

p etitioner

to

uninter ruptedly
Decree expre ssl y

in obtaining

co rresponding

franchise

franchise

tax

s h ould be att ac h e d against the petitioner .

Seco ndly,
Ching

made

stand,

rP s po n d . nt's

th e

follow i nq

witness,

sta temPo t s

at

the

Gorqonia
witness

to wit:

"xx x
IJ.

only

XXX

You
that

Rt~ ted

you

XXX

awhi .l.e ago Mada m Wi tness ,

conducted an investiga ion

DECISION C.T.A. CASE NO.

4630.

- 6 on Republic Broadcasting System and

you recommended an assessme nt for the
d eficiency
franc hise
tax
for
the
second semester of 1987.
May we know.
the
basis
of
your
r ec ommendation,
Mad::Jm Witn ess ?
A.

Th e basis o f my re co mmend a tion on the

d eficiency
f ranchi se
tax
for
the
sec ond seme s ter 1987 was b ecause as
pr.e sc r i be> d hy Executi v e Order 72 all
fr an c h i se> hold e rs are taxab le und er
fran c h i.se t ax .
XXX

XXX

XXX

Q.

In
your
sec ond
memorandum
Madam
Witness ,
you
r e iterated
this
time
th at t he Republ ic Broadcasting System
is l i a ble for deficiency franchise
t ax for the second semeste r of 1987.
May
we
know
your
b asi s,
Madam
Wi tne>ss?

A.

72, it
XXX <P>e r ExPc utive Order No.
Sectjo n
say s
that
Executive
3
of
No.
72
that
Order
stat es
t he
p ertinP nt provision of the charters
of fra nchise gran tees and all other
law s ,
ord ers ,
issuances,
rules and
r egulatio n s
or
parts
thereof
inc onsi stent
wit h
this
executive
ord er are hereby repealed or modified
a ccor dingly. xxx
XXX

xxx. "

XXX

<D irect Exa mJn <'ltio n,

pp. 9 , 12 - 14)

T. S. N.

October

15,

1992,

"x xx
Q.

A.

XXX

XXX

Hav p
y ou
examined
.fran c hise
of
Republic
Syst e m?

Fo r wr->r?

Wh ::J t

do

you

the
:former
Broadcasting

me a n

by

former

fr a n c hjse?
Q.

Th r:> f anchj s <=? of the co mpany up o n

whi ch you ba s e d th e franr;hise tax?

7 ,'). .l
....

DECI SION C.T. A. CASE NO. 4630.

- 7 A.

Because we just started the year 1987

whi ch
the
E.O.
No.
72
begin
its
eff ectiv ity, only July 1987."
XXX

E.O.

xxx. "

XXX

<Cross
Examination ,
199 2 , pp. 5 - 6>

T. S. N.

October

Respondent's

is

the

No.

howev er

wit ness

72 repealed P.D.
is

bereft

of

of

No.

any

the

alleged

existence

franch ise

except

perhaps

to

P. D.

the

No.

576 - A,

peti t.ioner,

said franchis e

was

of

forward

which

that

Her testimony

explanation

to

since

opinion

5 76- A.

rele vance

22,

repealed

subsequently

as

to

its

petitioner's
theory

the

th~t

franchise

repeale d,

the

i s deem e d revived.

And thirdly,

respondent contended that P. D.

No.

576 - A did not ex pressly repeal petitioner's existing

franchise.

argued

li e

prom ulgated

merely

for

that

the

the

purposes

Decree
of

"was

regulation

and avoidance o monopol y i n own ers hip and operation

of

radio

pr ovided

and
in

Respondent,
did
p.

it
9,

its

p.

5,

" gra nt

Ibid.,

117

C. T. A.

expressly

<Memorandum

Records ,
t ax

as

p.

1 26>

for

Neither

exemption ".

<Ibid.,

130 >
issue b e fore

petition er

Sect ion

s tation s

preamble . "

petit. i o n e.r

p.

The sol e
not

television

of

is
the

li a ble
T x

this Court
for

Code,

r-~

') ~
' \ .l!....

is wh ether or

franchise
as

tax

ame nded,

under

for

the

DECISION C.T.A. CASE NO.

~630.

thir d

a nd

fourt h

quarters

of

1 987

amounting

to

?16,159,651.61 inclusive of increments .

Prior

to

the

controlling

the

pr o mulgation
law

oper ation was Act No.

on
3846,

o:f

P. D.

radio

No.

television

and

as amended.

576-A,

It provides

amon g others that :

1.
No
person,
firm,
" SECTION
company, associ ati o n or corporation shall
construct, install, establish , or operate
a radio transmitting station or a radio
receivin g
station
used
for
commercial
purpose s or a radio broadcasting station,
without having first obtained a :franchise
therefor
from
the
Congress
o:f
the
Philippin es xxx.

SECTION
2.
The
construction
or
installation of any station shall not be
begun, unless a p er mit therefor has been
granted by the Secretary of Commerce and
I ndustry.
No station shall be operated
except under and in accordance 'With the
provisions of a license iss ued there:for by
the Secretary of Commerce
and
Industry
xxx"
The
comp any ,
the

Act,

amended,

associatio n,

following

perm i t

as

to

a >

franch is e

con s tr u c t

and

operate

Industry,

person,

:firm,

or corporat i on to :first secure

or

Secretary of Co mm e rce a nd
to

required

stat ion

install

from
a

Industry;

b>

Congress;
statio n
and a>

:from
a

th e

lic e nse

fro m the Secretary o:f Commerce

before the

same could operate a

radio

broadcasting sta tion.

A

"fran chise "

by the

so v er ei~ nty

is
tn

righ t

or

privilege

gra nted

one or more par ies to do some

) r ,
7 ..) )

DECI S ION C.T.A. CASE NO .

4630.
-

act

or

acts,

grant

from

emanates

the

from

gov ernment ;
state,

branch

of

in

482,

not

power;

sov e reign

do

o:f

person

or

<Words and

const itute
but

it

is

this
which

state

power

o:f

or
the

corporation

Phrases,

by

Vol.

17,

469 )

nor

e s tate

the

sovereign

A "license" on the other hand,

or

without

privilege

po wer

the

:from the state.

471 ,

could

sovereign
t he

th e y

subsis t i ng

grant
pp.

which

9 -

ve s t e d

binding
mer e

interest,

c ontract

l eave

con:fers no right

to

be

nor

between

the

enjoye d

as

does

it

parties,
matter

o:f

indulgence at the wi l l of the party granting it.

is in no sense a
licensee,
..

but

transferable
pp.

25 ,

150 ,

contract

is

nor

the

i ss u ed

water.

be
A

fran c his e ,
at

the state and the

p e rsona l

permit,

(Word s

and

tha t

the

neither

Phrases,

Vol.

1 711 ).

S ecretary

should

me re

vendibl e

Respond e n t ' s
licen s e

bet ween

It

a rgum e nt

by

the

of

Public

co n si d er ed
lic e ns e
thi s

time.

is

effe c t.

pro t e

ted

m re

pe r son a l

by

and

franc h ise
license

the

h i3a

to

be

fr~nc h is e

not

Co n s t itu t i o n

p r i v ile e

an d

7 ')'t
\ _l

wh i l e
s

1 i cense

r e v oc abl e .

coin

line

vested
a

hold

:fra n chise ,

d e marcation
is

and

Communications
does

and

or

Communica tions

Works

as
a

of

Court cannot see two sides o f

T here

this

Bo a r d

authority

to

right
is

In

DECISION C.T.A. CASE NO.

4630.
-

franchis e ,
both
and

the
the

contract

the rights ,
contracting

stat e > are

betw een

oper atio n,
to

be

ar ea

paid ,

priv ileges ar e
is

It
576-A
the

privileges and obligations of

p arties

we l l

them.
of

<the

defined

franchise

and

serves

holder
as

the

Such matters like extent of

responsibilities,
state ,

the

to

10 -

franchise

and

tax

tax

exemption

recited .

clear

termin ate d

that
all

the

promulgation

existi ng

petitione r ' s .

The

o:f

:franchises

question

is:

P. D.

No.

including
Was

the

petitioner given a new franchise?

The Secretary
June 20 ,

1 991,

of Justice,

in h is

opinion

dated

has made this st at ement :

"W e h::? l ieve t h at E. 0. No. 5 46 <which

is a law i r~ sued p urs uant to P . D. No. 1416,
as am endPd ,
granting the then President
c ontinu ing
a u t hority
to
reorganize
the
admi.nist rrt t i. ve structure of the national
gove rnm e nt) is on e la w which authorizes an
administra t ive agency ,
the NTC, to issue
authorizat.i.ons for the operation o:f radio
and
tel ev ision
broadcasting
systems
wi 1;. hg ut nPed __of.. _a . p r.::.:V~.r::. ___:f:f'C!D.f!h:i.:.?~..ued
l;l y (::ongress . "
<Op inion No.
98, ,
p.
6,
C . T. A.
Recor d s ,
p.
23 )
<Underscoring
supplied)
In

the case of

Albano v.

Reyes

<175 SCRA 264>,

the Su p re me Court h eld that :

"F ranchiRes
issued
by Congress
are
not required be fore each and ever y publ ic
utility m:=t y nper Rte.
Thu s ,
the law ha s
q r a nted
ce rtain
administrati v e
agencies
t he power
to gr a nt
licenses for
or to
a u t h ori z P the operation of c ertain public
u t i i t i _s. X XX

...

DECI!:JDN

C.T.A.

CA SE NU.

4630.
- 11 -

Th a t
the
Co n s t i t uti o n
p ro vides
in
Ar t. XI T.
Ser: . 11 that the issuance o:f a
franchi s e ,
c~rtificate
or o ther :form o:f
authorizAtion
for
th e
operatio n
o:f
a
publi c
utility
shal l
be
subjec t
to
amendm e nt ,
a]tPration
or
repeal
by
CongrP s s
dfJes
nnt
necessarily
imply,
as
petition o=> r p osil :"> ,
th"it o n l y C:o ngress ha s
pfJ wrr
tfJ
o r :=t n t
s uc h
au thorization.
t hr.?
Our str.~ t- 11t.P. b ooks are rep l.r.?te with law s
grRnt"nq
specified
agencies
in
the
E x ecutiv e
nrRnch t h e power to iss u e su c h
authori? 'l ti. o n
for
cer t ain
cJ asses
o:f
p u b 1 i c \) t. i l i t i '"' s . "
A.l thouqh
:franch ises
the

as

P. D.

be:f ore
to

No.
on e

op erate a
E. 0.

may

1981

to

issue

it

did

in Se ctio n

t0

not

1 of

obtai n

provid es
:franc hi se

being

vested

franchises

No.

view,
for

but

required

unto

in

abolish

Act

n ? spo nd ent ' s

mere ly

fra n c h ise

and

existing

his
the
as

3846,

Section

requirement
is

silent

before

one

as
may

bro :=tdc astinq s ta t ion.

No.

of

how eve r,

546

ior
th e

it

of

may

brn<=ldc ns tinq

rendered

aut h or i zed

e x ec u t i ve

ce r t i f ic a t es

ope ra t io n
firm

5 '7 6

unn ecessa ry

i ss u e

pow er

imposG d

p r ior

ag e n c y

t he

terminated all

3 1,

December

Cont~ r"l ry

amP.n ded .

5'76 - A

c apacit y,

requir e me nt

of

of

President

l egislative

No.

P. D.

of

rommu ni catio n s
tllen? :fore
fa

r_; .L

l i t i

by

requirement

administrative

of

government

convenie nce

utili tie s.

opP r at e
~, 8

an

branch

p ubl ic

the

for
person

communica tions
ITI PJ I?

ce rt. i f i cates

to
the
or
and
of

DEf: l!>HJN

C.T.A .

--

CASE NU.

4630 .
-

pu b l ic

conveni

n eed of a
As

pr ior

to

Court

finds

Th ere

can

there

or

appl icability

th;-}t

n c'

h. e

penni ts

1 icen s es

without

no

su b .i Prt

il.

nnt:.

did

impl i P d

of

E . 0.

repeal

re peal

No.

No.

P.D .

in

72,

this

case

in c-., n s ist. e n cy/co ntradiction

mi=! f-. b ='l

t. o

speak

of.

The

" ~~ EC TlnN
1..
Sectio n
127
of
National
Internal
Reve n ue
Code ,
amendP.ci, i -> h ere by fu rther amended to
as follow s :

Sectio n
11 7> .
An 1' provision
of
qpn rora l
or
s p Pc ial
law
to
t he
co nt r'lr
nr:.t .\.-i.t- h s ta n ding,
there
s h 't.l]
he
l evie d,
ar::s~:>ssl? d
and
co ll prt n rf
j n
rPsper:: t
to
all
franr-: : 11 i c ; pr:; ,
up on the::> qross recei p+ s
f rnm tt n bu s in ess covere d by the l a w
qrant-. inn
lhe
fra n c-hise ,
a
t<'lx
i. n
ac cor rl <-Jn,-,.,
w ith
th e
sc h edule
p r esc-r i hrd herPunrl>:>r:
(a )

I. n

e l

t?

qas "lnd water

pet- ce n t:

t-. ~ - .i c

t: i 1. i t i

su pplir:> s

es ,

Two

cit y
(2%)

< b > 1 l n tPlephone and/or telegraph

system s ,
and
radio
broadcasting
statjnns .
Th ree <3% ) per ce nt

<r- > I l n
( 5% )

pnt

n I IJ Pr
c-en t_

franr:: h is ~=>s

. . . .

Five

f:iJ P thP rP tu r n
rlue therenn
Commi ~~r; i.oner
of
Internr~l
rluly
authorized
Reve nuP
or
hi. s
rr.>prp r-n n1- ::tt i VP
r1 r:: rordr.tn ce
wi t . h
in
SP r::tio n
1 ~2
of
thP
pr nv ision s
of
t-. he r P t_\ rn s hr~ll hP
~ his
Cn d P ,
;:~nd
s h r~ ll

with,
t . o,

till='

73 7

t . ::,x

for
nor

sta t ut e

th e
as
read

' SF. C TlUN

22'1
<n ow
on
t "ranch i sP.s .

this

576- A.

prov irles :

Tax

franc hi se .

the

lies

simil <-J r

~"> nce ,

12 -

D EC I! ; I O N
C . T . A. C A ~> E tHI.

.ilf:,:JU.

s ub j r>ct.

to

R ll d i t

~~ t s ti n q

n n t w i

by
t he
Bureau
o :f
an y
p ro v i sion
of
t he
co n trary
to

H ~=>vP n P P,

In t.r- J" n a l
any

13 -

t II s t

l aw

n rl j n q . '

S fT T TO N

2.

p r~ v i s i~ n

An y
l8 w

of
gener a l
1- h F?
co n t ra ry
a]_ 1
qrs nt e:>e:> s
of
not wi th s l- n nrl inq ,
fr~nr h i n~s
s h "l I 1 b e s ub j ec t
to the in c ome
ta x 1 ~v i P d un dPr Tit l e I I o f
t h e N a t io n al
I n tern ;>l R evenu P Cod e , a s a mF? nd e d . "
or

R Jl "' <-:: i :-}1

Th er e

th e

Ta'~

as

and

i 11 r: n me

n ot

prov i s io n

re a d

t ax

I: F?

i. n to

t.h r:>

t he

t he

fra n c hi se
a me nrf i nq
i n

fr o m
l.~w

P P.t it-i o ner

law

mo s t

the

th e

" i n

to

re tu r n

to

li a b l e

J ieu

f r anc h ises
tax .

so me t hin q

am e nded

un i f o r m

ta x

holders

i n co me

a h ly

merel y

rate

tax

s ub j e c t

c o mmo n

h o l der s

t h en~ .

t h at.

to

h o Ld

t o

e xe mp t inq

c an n ot

m Fl

hn l. rl e r s ,

c o r po r a te
ta xes "

d o ub t

t o

CndP.

f ra n c hi se
a u d it ,

no

i n

tn

that

i n

of

all

so

far

T his
i s

di s cu s s e d

in

;"111
i.npl ie d r e pe a l
i s d ee me d
i f.
mu s t-.
he
s u f f i c i e ntly
P :3 t;:'lh] i -~ h P d
th::tt
t h e s t atu t e o r
s tatu to ry
pro v i si~ n s
r:: on cer n e d
de a l
with
th e
sa me
ma t. t.e r
<1 n d
t ha t
th e
latt e r
be
s u hi ect
i rrern n.i l ab J e
a nd
in c on s i a t<? nt
w i th
t he
f o r me r :
" 1!\) r f n r r>

i - t ,

' I t.

h ~=>~=> rt

th F? const. <=1 nt ho l d i
t h at
r P f1 P als
i mr l i r;:'l . io n ~1 ~ n ~ ~ f a vor ~ d a n d wi
nn t
h r.>
sn
rl r:> cl at- n ri
un P , s
i t.
m;-'1n l r :-;1:
t h<~'
l: h<=>
J r:> ld s laturP
i n 1: P n d n ri .
~ : 1 1 r. h
a rf n r t-. 1 i n P
q oe .

of

has

~I ds

Cn u r t:-.

nq
by
1
b<-"

so
ss

a~

' ll ni b :d S rt 1:P B v. R P y Pn,

<1
l' l! lR
d oc i .-;in fl.
1t
j R
n e C~=' RS<=Iry
1. 11 P P hP f r_,r f' r;r Jr -h <'l re p~=> <-i l
i c: cte emnrl
t- h a t- t h n
t f)
f ' .. i :-1 t
' h "'! t. i t. b e s h o wn
fa r

b <'lc k

prnvis i o n s

nr

738

Co u r t

clear l y

Memo r and u m I h ~ ~ t :

to

fo r

its

T> EC 1 S 11lN C. T. A. CA S E

NU .

4G::JO.

14 -

dea l
wit h
t he
s8me sub j ec t
ma t ter
.a nd thrtt th o:; l::.~tter be i n co n s ist e !."l.:t.
_w ith i" h~? formPr.
There mu s t
be a
s h o wirHl
of
rpp ugnancy
clea r
a nd
con;i. nr~; nn
:.in
c h :=t r aci"er .
The
1 anqu :::Jq ~"? usr:>d in the lat. t. er st a t ut e
must
be
such
8S
to
rPn d e r
i t
i.rrc:>r.nnr::ll8.ble
wit h
wh at
had
b een
formr::> t' I y enaci: Prl .
An inronsis t .ency
t h at
fAlls
short of th 8t sta n da rd
doe~ n o t
suffir:e .
Wh ut is nPP d e d i s
mn lifPst
indi.c8tion
of
the
a
legis18 +.i v e
pnrpose
to
repeal.'
<V i ll P q <ls v s .
S ub i .d o,
4 1 SC RA 196;
Vi l leonn
vs .
E n ri l e ,
50
SC RA
10;
Ve lu n t. n
vs .
Chie ,
Phil.
Co nst.n huJ.ary,
1 57
SC RA
1 5 3;
Un derA s orin q su ppl ied>
A pp I y i ng t. h e
r~fore qu o ted
cr i t er ia to
in str:lllt. C"'lse , i t '<:~nnot h e d e n ie d th a t
P. D .
576 -- A 8nd E . 0 .
72 do no t
dea l wi th
t h e sa me subjer;t rn"ltter .
E. 0. 72 , o n o ne
h a nd,
p~=>rtaj ns
to
the
ne w
ta x
rate
s tr u cture i mp osa b le o n f r anc h ise operat o rs
an d
thP
wit h rlr8 wa l
of
i n c ome
tax
exP mpt innR gra n tPrl u po n the l a tter.
On
the
othPr
h and ,
P . D.
576- A
deals
s p ecific"llly
wi t h
the
reg ulation
o
ownership
a nd
o p e r a t i on
of
r adio
and
t. e .l ev i si.nn
str~tio n s
by
t e rminating
fra n chlseG
covering
t he
s a me
as
of
Decem b er
31 ,
1 981 .
The
principle
of
i mpliPd
repPal ,
t h erefore ,
c annot
be
ap plied to t h e instant c as e o n a ccount o
th e a pparr::>nt d iffere n ce in subject matter
of
the
statutes
h e r ei n
c oncerned.
Mor e o v F?r, P . D. 576- A and E. 0 . 7 2 are not
i. rreconci l ab l P. wi t h e8c h o t h er.
S uffice
i t t o say t h at t he passage o E. 0. 72 did
n ot
i n
~ ny
m8 nn er
ha v e
t he
ef f ect
of
r estori n a
or
revivi n q
t he
f ra nchise
of
p etitio n Qr whi h
was terminated
by P.O.
"i7F. - fl. "
<Mernoranrl tJ m f!J P<~t. itioner ,
pp.
14 - l 'S ; C.'J'. fl . Rern ds , pp ll'J - 11 1 )

t he

Pre s

P . D.

No.

r '""'" t ' s

rl

possible
i e

to

rr=>v

j PW

and r8nt_rol

t he

th e n

mass medj a.

DECISION C .T .A .

CASE NO.

1 G30.
- 15 -

clause s
operation

o:f

regulate
the

to

are

r ud i o

th e

of

:franchises.

t hat.

1 a w ru l

by

st ations

no

means

to

able

t o

of

accomplish

the

existing

President ,

hav e

to

b et wee n

tPrmination

term in ating
the

and

and

c o n f lict

the

t i me ,

was

P. ,

ownersh i p

and

was

fact ,

a -t-.

franchis e s

wa s

st <J tu t e

latte r

1n

in

television

Th e r e

the

Th E'

:fo r mer .

mar tial

and

sam P.

objects

the

monopoly

under

complete control

over the media of bro a d c- a s ting .

Furthermor e ,
exemption

but

this

rather

:for

tax

case the tax provision shou ld

of

agai n st

doubt

burden s

are

st.atut P S

1::-x p rPP :=r J y

of

not

In ternal

182;

RPpub I

SC RJ\

:n 5 :

Fi. re men

315 ;

He vc=- flue
-:

SC RA

CollPct.or

of

Str->vPdor i nq Go.

117

of

the

. mpos i i.nn

v.

l?ar 1 y
Court

i oner

TtHIUI- ancP

G65 ;

b e yo nd

i rn p or t

v.

of

'H;::mila

e t

T '1 X

Co d e

js

4j

Ph i. l.
Phi 1.

74

the

204

SCRA

Court,

al.,

19 6

v.

148

SC RA

La Tondena .
Company

80 3) .

v.

L u zo n

950 ;

S P c t in n
t ha t

;:'lpply

of

because

Revenue

Ra i lro ad

52

rl ~ d,

which

what

Appeals,

App ella te

Company.

Tr i n i

tax

( Commj sai oner

In t ern a l

of

Cu s t:omn,

in

a utho r ity

of I n ternal Re venue v.

Com misaionr r

Inc.,

In f. p r mP d iat>

v.

Co n n .i n
Fund

'R

and

:for

be interpreted in case

imp o sed

bl?

claim

imposi tion

taxing

the
to

not

is

onl y

t he
to

CASE NO.

DECI~;HIN

C.T.A.

4630.
-- 16 -

" x xx
<T >h e re
s hall
be
l evied,
a s se s sed a nd coll ec ted ;i.n r _e spect. tg_____?l!
franchi ses ,
u p on the gross r e ceipts from
th r-:> bu s i n -?ss co v ere d .. by_ . the.... la w . grar1t.ing
the
fr an chise
xxx. "
<Unders c oring
supplied>
Pursu::tn t.
that
not

if

to

thP

pt- o v is i o n
h :::~:2

pr:>ti t.-. i. o n Pr

to

be subj e8l
WHERF: FOH F ,

r es pond e n t ' s
fran ch i s e

thi s

f r 8n ~ h ise

in

vi E' \~

d - ri.Ri fJn

t ax

P 16 , 1 5 9,651. 5 1 inc lu s iv e

of

la w,

it

fr a nchise,

follows
it

could

t a x.
al l

of

is SE T

a.ssess me n t s

and f o urth qu ar t e rs of

no

of

ASI DE.

in

the

forego i ng,

the
The
total

d eficiency
am oun t

increments for

the third

1 9 87 is hereby CANCELLED.

pron ou n c ement as to c o s t .
S O OROETH-: 1).

Qu ezo n

ME?trn l'l::=mi J a,

Ci~y .

Ju .l y

27,

1993.

~.. ~Q.. ~
ERNE STO D.

ACOSTA

PrE?si ding Judge

WE

CONC{JH:

/t&E
IK.
1\ ss o r.:i.R

rmiiOA
Judq e

(diss e n ti n g )
UAM ON 0.
Assor.iilt <=>

n F:

VE YRA

ltJ dCl <?

74 :

of

No

DF.Cl SHJN

C.T.A.

CASE NO .

J16::JO.
- 17 -

I
aft er
C o u rt

hereby certify
due
c>f

th~t

r.on s u.lt at i on

Appea l ::'

Tax

Art j c le V ( I T"

i. n

this decisio n was reached

Rrnonq

t.h l?

a cc ord nee

members
wi th

of

Se ction

the
13 ,

!. he C n nat. i t uti on.

~- Q,Q~

ERNESTO D. ACOSTA
Presi d ing Judqe
Court of T ax Ap pea l s

742