Friday, October 10, 2008 Hospitals’ lawyer requests court for reconsideration
A HEALTH “handicap” prevented the court appearance of the lawyer representing proprietary schools and hospitals asking the court to stop the city from collecting a business tax from them.
That, as University of Cebu (UC) president Augusto Go said they will not pay the P91.5 million in “unpaid” taxes, saying they are not covered by the tax ordinance prescribing the tax rates for proprietary schools.
UC, Go said, is a non-stock and non-profit educational institution and is not subject to business tax.
Yesterday, lawyer Cornelio Mercado filed a motion for reconsideration before Regional Trial Court (RTC) Judge Generosa Labra.
Two days ago, Labra, in open court, verbally ordered the case dismissed due to the absence of the petitioners and their lawyers at the pretrial.
Under the Rules of Civil Procedure, the presence of the petitioners and their lawyers during a pretrial is necessary, else they can be declared “non-suited” and the case, dismissed.
That was reportedly the argument used by Cebu City lawyers in their move to dismiss the case last Wednesday.
Ailment
Mercado, in his motion for reconsideration, said health reasons prevented him from attending the pretrial.
Mercado is representing petitioners Cebu Doctors’ University, Cebu Doctors Hospital, Cebu Institute of Technology and Cebu North General Hospital.
Lawyer Ronaldo Nona-to represents Cebu (Velez) General Hospital while lawyer Godwin Manguin-say represents Southwestern University and Sacred Heart Hospital.
In a phone interview, Nonato said that since it is Mercado who stands “overall” for the seven petitioners, his motion for reconsideration will include all seven schools and hospitals that are plaintiffs in the case.
Mercado said that after the original pretrial date last July 10, the City and the plaintiffs met twice in an attempt at agreement.
Settlement
They wanted to agree on a definition of tax payment for the proprietary schools and hospitals, and how much, in percentage, of their gross sales would be paid as tax.
According to Mercado, it was the City who asked for an amicable settlement.
The City originally collected 2.5 percent based on the original tax ordinance, but an amendment initiated by councilors - and opposed by the petitioners - suggested 0.75 percent for sales exceeding P1 million.
In a text message sent to Sun.Star Cebu, Mercado said that the dismissal was based on a “technicality”.
“I’m confident (that) it will be reconsidered,” Mercado stated.
He included a medical certificate from his physician yesterday afternoon, after filing his motion for reconsideration in the morning.
He said his illness hit him on Tuesday night, which is why he went to his doctor the following day.
But he asserted that he was always present during the court proceedings. He said he “has always been ready for trial.”
In August last year, Labra dismissed the City Hall’s motion to have the case dismissed.
Months before that, in February 2007, Justice Secretary Raul Gonzalez ruled that “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.”
Reply
The amendatory ordinance was drafted by Councilor Jose Daluz III and approved by the City Council.
In a radio dyLA interview yesterday, Go said he is still waiting for a reply to his letter sent to the Cebu City Hall informing city officials of the nature of UC’s business.
“We’re not supposed to pay anything because we’re non-stock... We already wrote them about this but they did not reply. We are not a part of it because we are not covered by the ordinance,” he said in the interview.
According to the records of the City Treasurer’s Office, UC and seven other schools and hospitals have unpaid taxes amounting to P255 million from 2001 to 2004.
Except for UC, the schools and hospitals filed a case in court asking it to declare null the tax ordinance that prescribes tax rates for their business.
Yesterday, though, City Treasurer Tessie Camarillo said the amount of unpaid taxes was reduced either because payments have been made or as a result of the consolidated reports.
They have yet to finalize the amount of unpaid taxes. (KAB/LCR)
