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First Philippine Industrial Corp. vs. CA

Petitioner First Philippine Industrial Corp. applied for a mayor's permit in Batangas but was required to pay local tax on gross receipts amounting to over P956,000. Petitioner paid under protest, claiming exemption as a transportation business. The court affirmed dismissal, saying pipelines are not common carriers. The Supreme Court held that pipelines are included in the definition of common carriers as one engaged in public transportation of goods for hire. Petitioner transports petroleum products for all persons indifferently and for compensation, meeting the test of a common carrier despite a limited clientele.

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185 views1 page

First Philippine Industrial Corp. vs. CA

Petitioner First Philippine Industrial Corp. applied for a mayor's permit in Batangas but was required to pay local tax on gross receipts amounting to over P956,000. Petitioner paid under protest, claiming exemption as a transportation business. The court affirmed dismissal, saying pipelines are not common carriers. The Supreme Court held that pipelines are included in the definition of common carriers as one engaged in public transportation of goods for hire. Petitioner transports petroleum products for all persons indifferently and for compensation, meeting the test of a common carrier despite a limited clientele.

Uploaded by

Eds Capanzana Brion
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

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. 15

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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