G.R. No. 197561 , April 7, 2014.
Coca-Cola Bottlers Philippines, Inc., Petitioner, vs. City of Manila; Liberty M. Toledo, in her capacity as Officer-in-Charge (OIC), Treasurer of the City of Manila; Joseph Santiago, in his capacity as OIC, Chief License Division of the City of Manila; Reynaldo Montalbo, in his capacity as City Auditor of the City of Manila, Respondents.

FACTS

Petitioner Coca-Cola Bottlers Philippines, Inc. filed a case against respondents City of Manila, et al., docketed as Civil Case No. 00-97081. The Regional Trial Court of Manila (RTC-Manila) rendered a Decision dated September 28, 2001, ordering respondents to either refund or credit the tax assessed under Section 21 of the Revenue Code of Manila and paid by petitioner for the first quarter of year 2000 in the amount of ₱3,036,887.33, and enjoining respondents from collecting the tax under said section. This decision became final and executory after the Court of Appeals dismissed respondents’ appeal and the Supreme Court denied their Petition for Review. An Entry of Judgment was issued. Petitioner then filed a Motion for Execution with the RTC-Manila, which was granted, and a Writ of Execution was issued. Respondents filed a Motion to Quash the Writ of Execution. The RTC-Manila granted the motion to quash in an Order dated December 22, 2010, reasoning that the writ’s implementation would be prejudicial to defendants and hamper city projects. Petitioner’s motion for reconsideration was denied by the RTC-Manila in an Order dated June 21, 2011, which held that both tax refund and tax credit involve public funds and their enforcement must comply with the Government Auditing Code (P.D. No. 1445) per SC Administrative Circular No. 10-2000. Petitioner filed the present petition for review on certiorari.

ISSUE

Whether the RTC-Manila committed reversible error in granting the Motion to Quash the Writ of Execution and in applying SC Administrative Circular No. 10-2000 and P.D. No. 1445 to the enforcement of its final and executory Decision ordering a tax refund or credit.

RULING

The Supreme Court found the issuance of the Writ of Execution to be superfluous but disagreed with the RTC-Manila’s application of Administrative Circular No. 10-2000. The Court held that the RTC-Manila’s Decision, which ordered respondents to either refund or credit the tax, did not constitute a judgment for a specific sum of money executable by levy or garnishment under Rule 39, Section 9, nor a special judgment under Rule 39, Section 11. The judgment merely affirmed petitioner’s entitlement to a remedy already provided by law under Section 252(c) of the Local Government Code, which states that a tax protest decided in favor of the taxpayer shall result in a refund or tax credit. The implementation of a tax refund is a return of funds, and a tax credit is a deduction from future tax liabilities; thus, no writ of execution was necessary. The Court clarified that Administrative Circular No. 10-2000 and P.D. No. 1445, which govern the settlement of claims against the government, are inapplicable because the case does not involve a monetary award or claim against government funds, but rather a restoration of money paid under an erroneous tax assessment. Petitioner should have simply requested the City of Manila to implement the tax refund or credit in accordance with the final judgment and the applicable provisions of the Local Government Code and its implementing rules.