G.R. No. L-22175, November 13, 1927
EUGENIO BUENAVENTURA, plaintiff-appellant, vs. THE COLLECTOR OF INTERNAL REVENUE, defendant-appellee.

FACTS

Eugenio Buenaventura, a fish vendor in the Quinta Market of Manila, paid under protest the sum of P596.04 to the Collector of Internal Revenue. This amount represented a 1% tax on his sales from 1920 to the third quarter of 1922, a 25% penalty for delinquency, and a fixed tax. The Collector based the assessment on Section 1459 of the Administrative Code. Buenaventura sued for recovery of the amount plus damages, claiming exemption under Section 1457(a) of the same Code, which exempts “persons engaged in public market places in the sale of food products at retail, and other small merchants whose gross quarterly sales do not exceed two hundred pesos.” The Court of First Instance of Manila dismissed his action, ruling that he was not entitled to the exemption.

ISSUE

Whether or not Eugenio Buenaventura is exempt from the tax under Section 1457(a) of the Administrative Code as a person engaged in the sale of food products at retail in a public market.

RULING

YES. The Supreme Court REVERSED the judgment of the lower court.
The Court held that Buenaventura was exempt from the tax. The core issue was whether his sales were “at retail.” Interpreting related provisions of the Administrative Code (particularly Section 1465), the Court ruled that, except for wines and liquors, the distinction between wholesale and retail depends on the character of the salespecifically, whether it is made for resale. There was no proof that Buenaventura’s sales, including those made to the Hotel de Francia, were for the purpose of resale. The hotel’s use of the fish to prepare meals for its guests did not constitute a “resale” of the fish as a commodity. Therefore, all his sales were considered retail sales. Since he was engaged in the sale of food products (fish) at retail in a public market, he fell squarely within the exemption provided by Section 1457(a). The Collector was ordered to return the sum of P596.04 to Buenaventura.