Thursday, August 23, 2007 CH insists on junking tax case filed by 7 schools, hospitals
THE Cebu City Government asked Regional Trial Court (RTC) Judge Generosa Labra to reconsider her decision rejecting its motion to dismiss the civil suit filed by eight schools and hospitals.
It also asked Labra to dismiss with prejudice the petition filed by Cebu Doctors’ Hospital, Cebu Doctors’ University, Cebu Institute of Technology, Southwestern University, Sacred Heart Hospital, Cebu North General Hospital and Cebu (Velez) General Hospital.
The schools and hospitals are asking the court to stop City Hall from implementing the amendments to the Cebu City Omnibus Tax Code.
One amendment reclassified proprietary schools and hospitals as “service-oriented industries” and, therefore, subject to business taxes.
Illegal move?
The schools and hospitals, which described themselves as non-stock, non profit establishments, reacted to the change. They said City Hall’s move is illegal since this goes against provisions of the Local Government Code which grants tax exemptions to non-stock and non-profit institutions.
The tax code now specifically states that these establishments are subject to business taxes of only three-fourths to one percent of their annual gross sales, on top of the fixed tax amount.
Under the original tax ordinance, 2.5 percent was collected.
In a 10-page motion for reconsideration, Acting Cebu City Attorney Rodolfo Golez said that the denial of their motion to dismiss may not be in accordance with law and jurisprudence.
“Without conceding to the arguments relied by this court in its ruling, it should be emphasized that the court never ruled on the issue that the filing of this case is premature because petitioners failed to question with the Secretary of Justice the validity of City Ordinance 2095,” read the City’s motion.
No filing
In her ruling, Judge Labra explained that the City Government did not file the appropriate proceedings and failed to observe and follow the very procedure they invoked.
But Golez argued that Labra’s ruling pertains solely on the pending case with the justice secretary and did not touch on the issue regarding the validity of City Ordinance 2095.
He also cited the move of the petitioners in immediately bringing the case to court without waiting for the ruling of the Department of Justice (DOJ) on the motion for reconsideration.
In February this year, Justice Secretary Raul Gonzalez nullified the tax measure because no public hearing was held before it was approved.
In a resolution, Gonzalez said “unquestionably, the City Government violated the constitutional right of the schools and hospitals to due process when it approved the tax ordinance without holding a public hearing.”
The City Government filed a motion for reconsideration on Gonzalez’s ruling. The motion is still pending before the DOJ. (KNT)
