GR L 6848; (April, 1956) (Digest)
G.R. No. L-6848; April 27, 1956
MANILA LIGHTER TRANSPORTATION, INC., petitioner-appellant, vs. THE MUNICIPAL BOARD, THE CITY TREASURER, and THE CITY MAYOR, all of the CITY OF CAVITE, respondents-appellees.
FACTS
The petitioner-appellant, Manila Lighter Transportation, Inc., is a corporation engaged in the lighterage and water transportation business. In connection with this business, it operates a marine shop in the City of Cavite for the repair of its own lighters and barges. The Municipal Board of the City of Cavite enacted an ordinance imposing an annual license tax of P400 upon marine shops located in the city. The appellant was required to pay this tax. Challenging the validity of the ordinance, the appellant filed an action for declaratory relief, contending that the ordinance was beyond the power of the Municipal Board to enact. The appellees defended the ordinance, citing paragraphs (a) and (p) of section 15 of the city’s charter ( Commonwealth Act No. 547 ) as the source of their authority.
ISSUE
The primary issue is whether the Municipal Board of the City of Cavite had the authority to enact the ordinance imposing an annual license tax on marine shops, and specifically, whether the appellant’s marine shop, used solely for repairing its own watercraft, is subject to such tax.
RULING
The Supreme Court affirmed the decision of the Court of First Instance of Cavite insofar as it declared the ordinance valid. However, the Court ruled that the appellant’s marine shop is not subject to the tax imposed by the ordinance so long as it is not operated as a business. The Court held that paragraph (p) of section 15 of the city’s charter authorizes the taxation of “shipyards,” which by definition includes marine shops engaged in the repair of boats and other watercraft. However, this authority to tax under paragraph (p) applies only when the shipyard is operated as a business, meaning it builds or repairs ships for others. Since the appellant’s marine shop is devoted solely to the repair of its own watercraft used in its transportation business (which already pays a separate business tax), and there was no evidence that it accepted work from others, it is not subject to the P400 annual tax. The ordinance itself, imposing what is deemed a tax and not a mere regulatory fee, remains valid, but its application is limited to marine shops operated as commercial enterprises.