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Commissioner of Internal Revenue v. Court of Tax Appeals

Petitioner:Commissioner of Internal Revenue

Respondents:Court of Tax Appeals

Ponencia:Medialdea

DOCTRINE: An "item" in a revenue bill does not refer to an entiresection imposing a particular kind of tax, but rather to the subject ofthe tax and the tax rate. In the portion of a revenue bill hichactuall! imposes a tax, a section identifies the tax and enumerates the

persons liable therefor ith the corresponding tax rate.

FACT:

A previous decision of the court in the case of CI# v. Manila$otel Corporation involved overruling the decision of theCourt of Tax Appeals declaring the collection of the caterer%s

tax under &ection '(A illegal citing the fact that )residentMarcos had alread! vetoed that portion *&ection +- hen itas still a $ouse ill.

The present petition is similar in that sense, and could bedispensed ith had it not been for the position of the CTAregarding the veto of the president regarding the item.

/ )rivate respondent Manila 0olf and Countr! Club is a nonstock corporation

it maintains a golf course and operates a

clubhouse ith a lounge, bar and dining room, but these

facilities are for the exclusive use of its members andaccompanied guests, and it charges on cost(plus(expense

basis. As such, it claims it should have been exempt from

pa!ment of privilege taxes ere it not for the last paragraphof &ection '(A of #.A. 1o. 23, otherise knon as the

"4mnibus Tax 5a."

+ The petitioner maintains that the private respondent issubject to the caterers tax , hoever the private respondent

still argues that )resident Marcos has vetoed the holeprovision hich no embodies &ection '(A. )etitioner

argues this b! sa!ing that the ords 6hotels, motels,resthouses7 ere the onl! ones vetoed.

I!E:

8hether the presidential veto referred to the entire section ormerel! to the imposition of 39 tax on gross receipts ofoperators or proprietors of restaurants, refreshment parlors,

bars and other eating places hich are maintained ithin thepremises or compound of a 6hotel, motel or resthouses7:

PRO"IION:

ec. #$% Article "I

*- The )resident shall have the poer to veto an! particular

item or items in an appropriation, revenue, or tariff bill, butveto shall not affect the item or items hich he does notobject7

ec. &'&(A: A Caterers Tax s)all *e imposed on:

*/- 4n proprietors or operators of restaurants, refreshmentparlors, bars, cafes and other eating places hich aremaintained ithin the preferences or compound of a hotel,motel, resthouse, cockpit, race track, jai(alai, cabaret, night

or da! club b! means of a connecting door or passage tent!

per cent of their gross receipts.

Where the establishments are operated or maintained by

clubs of any kind or nature (irrespective of the disposition oftheir net income and whether or not they cater exclusively to

members or their guests) the keepers of the establishmentsshall pay the corresponding tax at the rate fixed above.

aw

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R!+IN, - RATIO:

As previousl! mentioned, the &C has alread! ruled that thepresidential veto referred merel! to the inclusion of hotels, motelsand resthouses in the 39 caterer;s tax bracket but not to the holesection. The ineffectual veto b! the )resident rendered the holesection '(A as not having been vetoed at all and it, therefore,

became la as an unconstitutional veto has no effect, hatsoever.

Moreover, inclusion of hotels, motels and resthouses in the39 caterer;s tax bracket are "items" in themselves ithin themeaning of &ec. 3*/-, Art.