First Philippine Industrial Corp. vs. CA
Facts:
Petitioner is a grantee
of a pipeline concession under Republic Act No. 387. Sometime in January 1995,
petitioner applied for mayor’s permit in Batangas. However, the Treasurer
required petitioner to pay a local tax based on gross receipts amounting to
P956,076.04. In order not to hamper its operations, petitioner paid the taxes
for the first quarter of 1993 amounting to P239,019.01 under protest. On
January 20, 1994, petitioner filed a letter-protest to the City Treasurer,
claiming that it is exempt from local tax since it is engaged in transportation
business. The respondent City Treasurer denied the protest, thus, petitioner
filed a complaint before the Regional Trial Court of Batangas for tax refund.
Respondents assert that pipelines are not included in the term “common carrier”
which refers solely to ordinary carriers or motor vehicles. The trial court
dismissed the complaint, and such was affirmed by the Court of Appeals.
Issue:
Whether a pipeline
business is included in the term “common carrier” so as to entitle the
petitioner to the exemption
Held:
Article 1732 of the Civil
Code defines a "common carrier" as "any person, corporation,
firm or association engaged in the business of carrying or transporting
passengers or goods or both, by land, water, or air, for compensation, offering
their services to the public."
The test for determining
whether a party is a common carrier of goods is:
(1) He must be engaged in
the business of carrying goods for others as a public employment, and must hold
himself out as ready to engage in the transportation of goods for person
generally as a business and not as a casual occupation;
(2) He must undertake to
carry goods of the kind to which his business is confined;
(3) He must undertake to
carry by the method by which his business is conducted and over his established
roads; and
(4) The transportation
must be for hire.
Based on the above
definitions and requirements, there is no doubt that petitioner is a common
carrier. It is engaged in the business of transporting or carrying goods, i.e.
petroleum products, for hire as a public employment. It undertakes to carry for
all persons indifferently, that is, to all persons who choose to employ its
services, and transports the goods by land and for compensation. The fact that
petitioner has a limited clientele does not exclude it from the definition of a
common carrier.
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