Thursday, October 09, 2008 RTC nixes bid against taxes By Linette C. Ramos Sun.Star Staff Reporter With Katrina A. Balmaceda
CEBU City Hall lawyers are now thinking of taking “drastic” actions against schools and hospitals that refuse to pay business taxes, after a judge dismissed the case they filed against the City Government.
Acting City Attorney Rodolfo Golez confirmed the case filed by the schools and hospitals was dismissed by Judge Generosa Labra when their lawyers failed to attend the pre-trial hearing yesterday.
“So now we can collect the taxes they owe the City. We have given them many chances to discuss with city officials and agree on how they can settle their tax liabilities but it seems that the lawyer of one of the schools is bent on pushing their case,” he told Sun.Star Cebu.
Golez said the other schools and hospitals were willing to pay their unpaid taxes.
“We’re now thinking of taking drastic action against them. We can confiscate their properties or assets in payment for the tax due. We will confer with the mayor on this,” he added.
City Hall stands to collect from eight institutions that owe the City at least P255 million in taxes from 2000 to 2004 alone, excluding penalties.
City Administrator Francisco Fernandez said he will discuss the dismissal of the case with the City Hall lawyers to find out what its implications will be.
Although the court has not issued a temporary restraining order against the City, it suspended the collection of business taxes from seven proprietary schools and hospitals when the case was filed.
“We are not prohibited from collecting taxes but as a sign of respect for the court, we did not collect while the case was ongoing. And now that it has been dismissed, we will discuss with the lawyers if we should start collecting taxes,” Fernandez said.
Three schools and four hospitals have refused to pay P155 million in business taxes and questioned in court the validity of the City Government’s amendatory tax ordinance. They argued that because the nature of their business is service-oriented, they should not be subject to business tax.
University of Cebu owes the City some P95 million in business tax, but is not among those that sued the City.
In yesterday’s pre-trial, representatives and lawyers of Cebu Doctors’ University (CDU), Cebu Institute of Technology, Southwestern University, Sacred Heart Hospital, Cebu Doctors Hospital, Cebu North General Hospital and Cebu (Velez) General Hospital failed to show up in court.
The pre-trial date was initially set last July 10 but was moved to early yesterday morning.
Sun.Star Cebu tried to reach CDU lawyer Cornelio Mercado for comment, but the lawyer said he was “indisposed” to talk at that time.
A written order of the dismissal has yet to be issued, though Judge Labra announced it in open court.
However, a source inside Labra’s sala said the city lawyers asked the petitioners to be declared “non-suited.”
Section 5, Rule 18 of the 1998 Rules of Civil Procedure says that the failure of a party to appear at a pre-trial has “adverse consequences.” If it is the plaintiff who does not appear, he may be declared “non-suited” and the case may be dismissed.
The petitioners had filed the suit asking the court to declare null and void the tax ordinance prescribing the business tax rates to be imposed on schools and hospitals. (LCR/With KAB)
