GR 141667; (July, 2006) (Digest)
G.R. No. 141667 ; July 17, 2006
Republic of the Philippines, represented by National Telecommunications Commission (NTC), petitioner, vs. International Communications Corporation (ICC), respondent.
FACTS
Respondent ICC, a holder of a legislative franchise under Republic Act No. 7633 , applied with the NTC for a Certificate of Public Convenience and Necessity to operate an international telecommunications leased circuit service. In an Order dated June 4, 1996, the NTC granted a provisional authority subject to the condition that ICC pay a permit fee of P1,190,750.50 pursuant to Section 40(g) of the Public Service Act. ICC moved for partial reconsideration, contesting this imposition, but the NTC denied the motion in an Order dated June 25, 1997.
ICC then filed a petition for certiorari with the Court of Appeals. Initially, the CA sustained the NTC’s orders. However, upon ICC’s motion for reconsideration, the CA reversed itself in an Amended Decision dated September 30, 1999, setting aside the NTC’s orders insofar as they imposed the permit fee. The CA denied the NTC’s subsequent motion for reconsideration, prompting the NTC to elevate the case to the Supreme Court via a petition for review.
ISSUE
Whether the NTC can validly impose a permit fee on ICC as a condition for the grant of a provisional authority to operate an international leased circuit service.
RULING
The Supreme Court denied the petition and affirmed the CA’s Amended Decision. The Court first addressed a procedural challenge, ruling that the NTC’s motion for reconsideration before the CA was not pro forma, as it reiterated arguments to convince the appellate court of its error, which is permissible. On the substantive issue, the Court held that the NTC could not impose the permit fee. The legal basis for the fee, Section 40(g) of the Public Service Act, had been impliedly repealed by the later-enacted Republic Act No. 7925 (The Public Telecommunications Policy Act).
Crucially, Section 23 of R.A. 7925 contains a “parity clause” which provides that any telecommunications franchise granted after its effectivity shall incorporate the provisions of Presidential Decree No. 947. P.D. No. 947 stipulates that the grantee shall pay a franchise tax of one-half percent of gross earnings, which shall be “in lieu of all taxes, assessments, charges, fees, or levies of any kind.” Since ICC’s franchise is governed by this “in lieu of all taxes” clause by operation of the parity provision, the NTC’s imposition of a separate permit fee is no longer authorized. The fee constitutes an additional charge from which ICC is expressly exempted. Therefore, the NTC’s requirement was correctly nullified by the appellate court.