CASE DIGEST: Batangas v. Pilipinas Shell (G.R. No. 187631, July 08, 2015)

CASE DIGEST: BATANGAS CITY, MARIA TERESA GERON, IN HER CAPACITY AS CITY TREASURER OF BATANGAS CITY AND TEODULFO A. DEGUITO, IN HIS CAPACITY AS CITY LEGAL OFFICER OF BATANGAS CITY, Petitioners, v. PILIPINAS SHELL PETROLEUM CORPORATION, Respondent.

Batangas City sent Shell a notice of assessment demanding the payment of P92,373,720.50 and P312,656,253.04 as business taxes for its manufacture and distribution of petroleum products. In addition, Shell was required and assessed to pay the amount of P4,299,851.00 as Mayor's Permit Fee based on the gross sales of its Tabagao Refinery.

Shell protested the assessment saying that it is not liable to pay the amount and that the Mayor's Permit Fees are exorbitant, confiscatory, arbitrary, unreasonable and not commensurable with the cost of issuing a license. Shell paid under protest.

ISSUE: Does Batangas have the power to collect taxes from Shell on its manufacture and distribution of petroleum products?

HELD: No, Batangas does not have said power under the Local Government Code.

Section 133 of the LGC puts a limitation on LGUs power to tax. They shall have no power to levy taxes, fees or charges on petroleum products. Thus, the omnibus grant of power to LGUs under Section 143(h) of the LGC cannot overcome the specific exception or exemption in Section 133(h) of the same Code.

Popular Posts