CTA Case No. 3920 (Decision)
-- REPUBLI C OF THE PHILIPPINES COURT OF TAX APPEAL fJUE ZON CITY ANSCOR INSURANCE BROKERS INCORPORATED , P E' t. :i. t.i.o n e l". , \1 E~ r �::; L\ ~; � ��� C.T.A . CASE NO. 3 9 2 0 COMMISS ION ER OF INTERNAL REVENU E , F\r-~',:; pcmden t. . ~< �- ..... ..... �-�� �-�� ..... ..... -�- �-�� >~ DE C I S I 0 N The present act ion for tax refund c omes on an issue questioning the l egal s ufficien cy of t il E? sta tutory a uthority .i.mpn ~~ in q a ::~;f. .i. n d C:' pE'n d ��?rrt co~tractor's ta x on i n s ura n ce broker� The pertin e nt. prov i s ion of Section 205 of t he Tax Cod e , as amended, r ea ds~ Sec. 205. Contractors, proprietors or operators of d ockyard s and ot hers. - A co n tracto r 's tax o f t h ree per ce n t um o f t h e gros s recei p ts is h ere b y i mpo s ed o n t h t"0 �f o ll m'li ng : ( J.. ) 84
DECISION CTA CASE NO. 3920 , .., ..~::. (16) Bu s ~ness agents and other independ ent contractors including pri vate detective or watchmen agencies , except gross r ece ipts of a pionee r enterprise n:~ q .i.<.; �t.::' �� fc> c:l ~...,.i. -1:: h the Bo ,:H � cJ o "f In ve<.; t.m.:=}n t ~; unc!er�� f;:(; ~ pu.blic Act No . :.=:1lB6; and (17) Th('~ t.el'"� rn 11 independent con tr��r.:~c: t.or �c.; 11 includes persons (juridic al or natura l) not e numerated above (but not includinq indi v idua l s subject to the occupa tion tax under S ec tion 12 o "f the Local Tax Code) whose activity co n sists e sse nti al l y o"f the <' Sc:\1(::' uf .:~.11 . k:i.r1ds of ~:;e r.. vicc~s fcJr. 'feE~ regardless of whether or not the per forman ce or the service call s for the exercise or u se of the physical or mental facu lti es of s uch contractors or their employees. (As added by Pres idential D f~c r.. er.:! l\ lo .. 69) Th E' t. e r.. m IIi n cl epf~ nd c-:'rl t. con t r. a.c tor. II s hall not in c lud e regional or area headqua rter s estab lis he d in the Philippines by multinational corporation s , including a li e n exec uti ves, ancl which headquarters do not earn or deri v e income from the Philipp i n es and which act as <:;1.1. pr::' r. v i ~> u r�y, c: ommun i c:: .=:,\ t .i.. on ~; ,�:1. nd c oordinat i ng centers for their affiliates , <:5 1...1. b :; .i.d .i. ;:~ r-i (;>:; o ,,.. b ,,. a n c: hr:? ~'' in t llE'! As .i a -- F'dc:i.fir:: nr:'(J.i..nn . (A :; .;;:~d df:.>cl b y PD :? 18) petitioner a dul y insura n ce broker p aid an amount aCJCJ r�ega t. ing F'2,690, 635.2 1 which represents the 3% independent. on the' c: omm .i.:;s .i.. on ~':; and fn:Jm .i. nsur-ance 83
DECISION CTA CASE NO. 3920 co mp anies coveri n g the period of April 1983 through F !:? b r��u.,::\ r �y ~ J..Cff:34, petitioner considers the :Lmpo~:;.i.. t:Lon and ir�1 t.(?. ndmE0 1�1t. o�f an .i..n s u.r� <J.n c: e br�okr~l~ .ts no t. a. mcHlq t h e listed und t:> r��t.ak.i.. n g, mu. c h 1 E.' f::;~:; c:\ n 11 .in de pen c:l en t cont. r�� actor�� 11 cDntemp l atr:::>d in t h e said provision. t1 DP20 Vel'- , the ph 1~ a~:; c~ 11 o t . h 0 1�� i ncl E' p er�1d f'' n t. t con r� actor� ~:;. II he:\ ~;; to be 1 :i.m.i. t f?d to t h ose a c tivities not e n u merated but belo ng i n ~l to th E' -::-:,.:~me 11 <]enE't""<0\ 11 as t ho ~::; e l.i. s; t.E' d <.~nd con �::;;.i~:.;t:. e nt w.i. t .h ~5 <:3. m E~ h <:l.c,; to b E' ~ ~co r 1�::; t l'"� u E~d to inc: lud 0 on 1 y tho s e \'I h o .i 1"1 f::; i fTl i 1 i':\ 1.-� t o t hose (Stock Transfer Service, Inc. v. Commi ssi oner of Internal Revenue , CTA Ca ':5!'.:' l'.io. l���lf?n c: e. y :.~' no :::., ,J u 1 J C 1 7 J . . ) " , ~'"")0 ta:-: ��:.. , ;t ,,~ :i. t h t. h 0 respondent Co mmi ssio n er of Interna l Revenue on April 11, 1985 , ancl the instant p<:::>ti t :.i.on for� n::>v iew with th is Court on Apr-il 1.9 t3~.'i . Res poncl e n t Commi ssi on er of Revenue mai nt ai n s that:. p etition er's bu si n ess activities of ~::; ol.ic:it.i.nq <:. t� d procuring pr ospective c l i e nt s to be 86
DECISION CTA CASE NO. 3920 ��-� Lj. .... insured, for a fe e or commission~ are tho se of a n '' independt~n t con t.t"'c:\C t.ol'"'' as defined in Section 191 ?O~S) of the Tax Code~ as am~nded by P . D. Nn. 69 �; t'.h i:\ t. t.ht:! ,::\ddi t.icm of thE! t.er��m "other t i nc:h;:~pt'?n dc~ n con t ,,.. ac tot��s " to the enumeration of ta x p aye r�s cl~ssifierl as contractors in Section 191 ? 0~1) of Codt-:~, J_s .i. n tr:~ n d eel to CD\';\ I"" a 11 kind s of contractors not f a lling within the purview of those ex press ly e numerated a.nd o�f c E)~-: P p t :i.on~:. .:,, <;:; PI''(')'-/ :i.dE�d by thE-? COVE:!I'-aqe Of the t.r:-�r. m '' :i.ndQp<:~ l �ld P n t. co n t.r.. ac tor� '' A.s de�f in r=>d und=>r-� f:3E�?c:tion 20:.1 of tl'lr? Ta.~-: CodE? , a. PPrsnns, associA.t ion s ~ nd cor porations under contract for e mbroidery ;:,\nc:l D.pf:l-::1.1""C�'l fOI'" f�? >: po r� t-. ,�:\ ncl !Jr" o~;~;:; f"PCf.�?ipt u �f o I"" f r�nrn p .i.. on f:'-)0 r .i.. r1 d l...l s:; t t�- y I'"PCJ is t.E? ,-��c.-? d 111it.h t h E� Du <:\l'' d ( ) f In vPr.-st mc~ nt. ~:; undpr- F\ . A . N o .. ~'.i :l. Bt > ; I::J. Indi viclut:1.l~;;:. ~; ui::JjF:.>c: t. to occUfJ c":\ t:i.on tax und e r Section 182(b) of the Ta x Code; or Section 12 of the Local Tax Code; and c. Regional or area headquarters es tabli s hed in the Philippines by multin a tional corporations, including t heir alien exec utives, and which headqua rte r s do not. earn or derive income fr o m the Philippines a nd which act as . ~::;upE~r vi<;:; or.. y, co mrnun .i.e:<:~ t ion s:; Bi
DEC I !:3 I ON CTA CASE NO. 3920 coor�- d.i.rl a. t. .i.nq CE~ntE~r- s tor� t.hr:?.it- <::~ ffili <J.tf.�?s, s ubsi diari es or branches in the Asia- F' ,'J.C .if ic:: Fir::?g ion. At thi s, f ;.,,.i. J. to �f i. net pet.i t.ionE?I'". ThE:> t: h ,,.. f.�~ :; hold issue now raised was ~-; qu an::? 1 y met. in petitioner ' s earlier case (Anscor Insurance Brokers Inc. v. Commissioner of Internal Revenue, CTA Case No. 3602, December 28, .l. 9B7) , h ere Our deci sion plainly applies, inter 0:1. lia, <\s thu s��- Suffice it. to s tate that until 1973 (before th e F'D 69 amendment) Section 191 (now Sec tion 205) of the Ta x Code, the te ,...m '' .in d�?! pE?n d E�? n t c: on t r-ac: tor�� '' hl ,'-:1.':5 g i VE?n restrictive denota tion posing a niggling b arrie r to a broader c onnotation. As then r-ul f:> d by t.h :i.~; Cour- t on ~J.~LLY........... ~:~.?.!\ . . . ...J..?.Z.t, '' o t hr::>r. .i. n d F~ pE�? n d r::?n 1::. con t r.. ac tor- ~;'' \��1<':!.<:; con st rued as to include only those who are engaged in bus inesses si mil ar to those enumerated (Stock Transfer Service case, s, up t. �a. ) F't-�es idr.::>ntial Decr-ee No . be.~ a me ndment (effective , January, 1973) ha s broaden the s cope of the term. Thus the present Section 205 differs from its pred ecessor (Sec tion 191) primarily in the incorporation of the definition, thus - The tE~nn 11 indepenc:len t. con t r i::\C tot�- 11 inc 1udes per- ~;o n s (jut- ic:l ica 1 or na t.ur�a 1) not. enumerated above (but not including individuals su bject to the occupation tax und er Section 12 of the Local Ta x Code) whose ac tivity consists e s sentially of the sale of all kinds of services for a fee regardless of whether Bd
DECISION CTA CASE NO. 3920 ..... 6 ..... or,.� not. the performance of service calls for the exercise or use of the physical or mental faculties of s u c h cont ractors or thPir'"� l?.�?rnployee~:;. (As <Jd dE?ci by Presidential Decree No . 69, a anu<:H-y ~ l9T:~ ) Construed in its pl ain and ordin ary fn(�~�'=' rl .i. n q , .i.. t <::\ p pE?<:ll'-~; c l. ~,~<:~. r- t t.l� l ,;:~. thE! manif est presidential intent is to broaden the scope of the law to include other activities of the nature which is essential l y sa l es of services an d are h eretofore e njoying ~xempt..i..on from tax in view of th e deficiencies of the law. No facade of resounding legal rhetorics can ob~;cur��E� t.hF~ �f<;:~.ct that. t�.t1er��e .J_s �nothinq am b iguous in the language of the provision insofar as th e sa me is hrought to bear upon the circu msta nc es of the p et itioner in the case at bar ~ whi c h , as a li ce n sed in ~; u ,..<':Inc: P. hl'�ok e ,.. 11 per�� f o r��ms se r v i cc~s-. of s olicitj.ng, procuring and placinq, for a fee or c:om ~ iss ion l i f e or non - life .i.. r1 "' u r�� <:}. n c: t-! , <:\.c tin q "1:.: h r-ot...l.q h .i. n �=; u ,,. <J.n c f.�? <"'- t) E? n t ~:; clt.�.l y 1 :\.c. P.n ~'.,F:' cl by t. h E? I n s u t��� <':In c:e Commi ~:;~; i em , wh o are dir �ec tly under its e mploy (E x h . "\/" for- Pr~ t.i tionf:,> r�� ) . Th e ne:\t.Lu��e c:H1d cha racter of the underta king /activi ty are mn r-�f:> t�.l �1an :; u.�ffic.i.E�nt. to cnnc:luc:IP th <~.t: pE~ t .i. t.ior �r�� c a.n r��t:;� acl.i.l y s lip in to t.ha t Wol r-m ct..l.bby -��� tluJ P of <> n 11 i.ndepE�ndc-'~nt. co nt.r� act.or�� 11 ~:;o tu 'c:ipf?<J.k .. Moreover, this may nut. b e a case where pe r force We must attempt to apply t ht;) d cJc t.r~ i. n e of ~j u sd ~!!.L.__9_g_I::!_E' r l..2. as 1-.Joul d c i n : urn sc ,...i be the meaning of 11 independent con tr-ac: tor 11 on 1y thosr.:~ c 1 ~J.ss of business e numerated in Section 205 of the Tax Code. Petitioner would have the coverage of the term l i mite d to those activities or se r-v ic:E? e_; be 1 ong ing t:o t.hf:? ~.;arnE? ' 1 gener-a 11 as those li s ted in Section 191 (now Sec. 205) � of the Tax Code. But the doctrine of 83
DECISION CTA CASE NO. 3920 ejJ,! :":~~:;t_(:~.fD. .... 9qf.1f:::'1::::),~.5.. 1. :; "'' rulE? of con ~; t1�� uc t ion adopted as a n ai d to ascertain and gi ve effect to l eg i s lative intent when the intent i s un ce rtain or ambiguous ; it s hould not be applied to defeat the purpose of the law. In ot her words, the doctrine is not of universal application. It s applic a tion mu s t yield to the manif est intent of Congress (C ases cited). (Singh v. Commis sio ner of Internal Revenue , CTA Case No. 1167, July 30, 1965). The l a ngua ge of the definition is much too c l r.:�a.1'- , mi::\ k.J..r1g unnr::?cp ~:; �":;,'~. r-y an'Jl �::; uch i�:\ p p l i c a t i o 1�1 u f D n f�? ~-: t r�� i. n s .i c: ~:; t ,,~ t u t:. o r�� y c: r-1..! t.:c h ., I. .:.i.. k F' '�~ 5..<;:; r:� ~~ t. h ('�~ p e l l u c .i d .i. t y o f t. hE? i r1 t. t.::��n dm �::�n 1�.. r� r::� q u :i.. r�� e~s no fur�t:. her- e :-:f-?1-J(?S i s . . Neith er s h a ll We a ttempt to belabor t-. 1� 1 ~.-:-� "" ' �' t. hu 1� :i.. -!..y r-p l. i E�(:l u pun by the pe ti.tioner more than to say that t he <':\n:i.. rn a t �. .i.n(J pr��:i. n r:.i ple ~;; c:~r1u n c:::i.atr::~cf in th('? C: .i.. t. E~ d � __t_g _c;J;............I.t.:::.~.r.J.�..f.�?.!:::_____�_�'_!:::.X..:i...f.:.f=.?. �---� t;_�l-_<;5.�'. , C 0 U l d . n o J.onqF:~I, pol���tr��i::\ Y i.: h e tt��� l...l.':1 mr-?an inq <7:\nd in t:.F~ I �1clm r.:? n -1:: of t. t1 e t(:~ ~�- m 11 in d c~ pr:?r1d (-~ n t-. C:D I'1 -I.-. t-�i:\C \"�. or- 11 ,~,\~:; dc!f :i.n F~ d :i. n ~)ec:tion 2 0 1j ( l 6 ) u �f t .h(�'? T <J :-; CndF~, a.s amt-? rH:l r:?d ., Th.::~ pr-e v ail in q p 1���o1 �1n1..!1..1c r0rnE'n t ~:; in t. r�IE' <::c~ c .=.:\~:;c , then cont.r�� n l l i n q , h .::.:\cl bF~E�?n f:?V .i. ~=:;c c-: r� i0. t.:::~ d b y� t h(;> P 1���� f'~<::; .i. (i F~n t : Dr�~ r:: r�� f.-?l::�:�' 69 a mc,.ndm c-:> n +. i:t n d E:l. t-�c0 l <:~. r!.JC�l';' no <::;�l-.<:,\lq.ic .i . llu ~; ion<:; . l<J r:-' d o r1ot 1.: h .i.r1k t. h r'. t t:1�1r0 .-~. lfl(�:::> n r!rnE�n t !t~ c' s .i. n t.E�ndE0d t.o <;:; .i (!) p 1 )/ S I:C1 I' \1 (0:1 �'':\ ~::; <:\ p j_ E:'C F~ C) f .i.d J E~ t ~; r:' n .i. fTlE! n t ,-�, l i t�. y" WE> co n c lud E> and thi s a ll that We need decide that the petitioner corporation "~<,�hu c\ct~; <::\S '"' middlem a n b0t~<~to> en insured a nd company, a nd who solicits insurance from th0 publ i c under no employment from a ny s pecia l company and places order of i n s ur ance with co mp a ny selected by insured or in a bsenc e of any selection, with compan y s elected by s uch broker (Pacific Fiere Ins. Co. v. Bowers, 163 Va. 349~ 175 S.E. 763, Blac k' s Law Dictionary, 4th Ed. 9'-1-5) ~~ 1'.i. s pr � r:�~c::i sE~ly the kind o�f activity 0v U,..
. DEC I ~3 I ON -� CTA CASE NO . 3920 ..... B ..... v.Jh.i.r::h thQ tPnn ".indE?pendE'nt. c:unt.r.. act.or� " was designPd to e mbrace. And~ We s hall b e l ess than respecting t he full a nd cu mpr:> 1 l. in q 5. mp!J ,... t: of �t. h f0 "'' t.,;,~_ t.u t.E~ "' h o u l. d I;.Jc'~ qt..�a f t ftJ.rt. l-lP r � p;.;cE? p-1.-.:i..on .i..n �t.o i t. . F'l,�t.i.tion r:-~ t.. c:D.nnot. h E~VE' -l::. h~:0 be <::; t. . of t.1.rJU ~')() t'" l d �:; " peti tione r's costs. ~:;n cmnr:m::n . ~REYES I CCli\ICt.m ~ F' r. E' <::; .i.. d .l n lJ .J 1..I d !J p (Dissents in se parate opinion) CONSTAN TE C. ROAQUIN {) <;:;c.:;uc: i ,�,1 tf.'! ,J ud q P 91
... DECISION CTA CASE NO. 3920 -��� 9 ��- CE RT I F I CAT I 0 N I hen;~ by certify that this decision was reached after due consultation a mong the members of the Court of Tax Appeals in accordance with Section 13, Article VIII of the Cons titution. F' 1r� es .i. d .i lCJ ,J Uc:l g e Court of Tax Appeals 92
REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY AN SCOR IN SURANCE BROKERS C.T.A. CASE NO. 3920 INCORPORATED " -�-� �,..�t:.l r� su.s ����� COMMISSIONER OF INTERNAL REVENUE~ nr~<;;pundPn t" DI SSENTING OPINION This i s a judic i a l c l aim fo r ta x credit in the amou nt of P 2~690,635.2 1 p ;:,\y m.-:? n t of pc t �. it. .i. on c ,... ( 11 �1<;;c: u r- In s uran ce Brok e r s I n c: J N :::i U Fi(~I��.!CE ~ �f o ,.-� h ,,..c v :it y ) of :~T,% c: or�l t .r-a.c tor�� ~:; t.,~!. ~; ,;,n d und(:?.f'". t.h ;;:�: p t �� uv.i~:,,.i.o n s.:; u f f;(�:' c: tion ::.~O~:.i Section 1 9 1 ) o f t h e Natio n al Int er nal Reve nu e Code. F' .-::~ t. i t .i.or l E�~ r�� :i.. s a r�lDill f.-? "'; t .i c: cor��pur��<:1 t .i CJn l i. c E'�~n SE0�d In ~::; ur�� <.:\ nc e Comm.i<;:-,~:; i. onE!r� to '~*c t as '' .i.nsur�� ance it is prima rily e n gaged in se l l i n g non -� J ife i. n s uran ce for j t s pri n cipa l (tsn, 93
DISSENTING OPlNION CTA CASE NO. 3920 .I.":":'. E;.:h. 1..., pp . 3-5, Ap~i l 6, 1984, pp. 4 -5 ) ~ the FGU , PH I I..J)I�I , HE:N. IN S UR ANCE~ MONARCH IN S UR ANCE CO. and C) t. h (�:�? ,,.. s " t:. hr-:.,~:;r-:.' in su r��ancr:::-~ pol .ic:.i..f."~_:; o"f' it. r,; p,,.. inc i p<.-:1. 1 f:;, e ,,,, ,�.. thosE-' r.:1.gai n s t rnat��� .i.ne disaste~s, accidents~ enqinee~ing ca u ses~ ca s u a l t y , buJ��� q 1 i.-\l'��y, c: r�� r,::'d .i. t, .i.nc:IE�'mn .i t v, calamities , au tomobil e, f .i.clr,? l .i t .y i:lnc:l ot h pr�� k.i.ncls It a l so se ll s to~ its bonds. p" lJ., (.)p i'"".i 1 6 ,, .1 9F:l!.l. " ) In t.hP ;:~ nd 19!:Vl pPtitione~ d P~i v ec:l c::ornrn.i.sr::; :.i..on income fr. orn tl�le s.::1.le of t.: hF~ pol .i c .i. f7~�'. .::1 f o r.. emE-'n t ..ion ed � ConsF'qUr�?n t:. l. y, p r-:'-~ t ..i. -1":� .i. on r-? r�� "f' .i. 1 ('�~cl pe ,,..c: r::> n t i..;l.q e t. i:'\ ;-: ~etu~n s fo~ sa. i.d ypa~s !Exhs. A to H- 2) an d paid to ~ e~pondent Commissinne~ o"f' In t .e i'"Tli.-:1 1 t .he t .C) t �i':\ l �" ...\m r��E'p l��� p �;::,p nt:.:i nq CHl in dE' pen cl E' n t. c nn t.1���;.;, r::: t�.o r�� ~:; uncle r�� ~3 r-:-~ c t. .i Cl n ~? 0 ~) (fo~rne~ly Sec::t.i.o n 191) of the Tax Code A - 1~ A -2~ 8-1~ 8-2~ C-1~ C-2 , D-1, D -2 ~ E-l, E-2, F - 1, F -2 , G-1, G-2 , H- 1, & H-2. ) The se~vic:es an d acts pe~fo~med by petitione~ i n s. ur��,::\ nc:E~ in
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DISSENTING OPINION CTA CASE NO . 3920 ..... 1~. ..... DLt r�� i r 1�] t.l�1i �:; p 1��� F.�~ 1 i min;, r- y s l�. i::\ q E:' D.r 1cl parallel to t.hese acts in respec t of the p r �o �"; p(;~ c: t . , <3. rl cl a. f t.t':~ I'" d c> tf." r �m:i. n j n q �1:. hr,~ l d t t( �:.�I'" ' ~:; 1'1 CF�cl ~:; ~ pP t�..i. t:..i. (:ln f.;>!"" Co n ~;1...1.1 t .c:; c.: on t. :i.n LtDLt <:'; 1 y \'lit:. h t .h E~ ~::; r~vc> I'' a 1 un d F' l' '\-\1r- i t r? r �<::; v~ :i. t h \��! h rJ rn �i +' h '''��;;; ,:�,, ~l r.. r:> F~ rn e n t i':HHi \'~ h o :::, r:> in " 'it t r.. an CP po 1 i c: :i. (" <:; it: i �::; a.u t�.ho r.. i ;.~ E~d to s:; r�~ 1 1 f:::nowirHJ t .h f�? r�1c! e d ~; cl'f thr;, pr.. r:-. c.:; r' f~C t on t. 1�1r::' otl� 1 t'~ r.. h .::oricl aF1d ti�1E' �"'Pr. vic:P <'1\fa. ilahl~:�~ f t"� urn Pi':\r :: h on F:' C' f t:. h( ;.� ~'~�PVE' I "'i':\ 1 unci P r v~r...i tr�? r �:::;, l:.hl'�? pr::~t.i t�..i .c,n c:!r" I' f"C01Ylnl(~r 1d <~; t .o thtc:' t pr" o ~:; J:)r:�~C: t:. l�\r:;, k :i.. 1�1r�l r:> �f :i.l .l S I..ll ... .,..,,. n c::r:~ c: nn t r �,c,, c t:. tr'! I:)U y ,;\nr :l �t�. I\C�' Ltnd � �r�v.J I�� i �l.�.c:��r � ...~ll:i . ch Ci"\n h�:�?<::;t: r � c~ <:o; pc:Jr \cl t .o t .h E�~ :i.n �:�:;I 1 1 ,..,1 �1r :t�:.� 1�1Pc� d <::; r'! �f t:.hE~ 1 ;:{ t�. t .t" r � .. Th P pr u�c::. pt:'C 1.' 1 s mad e to fi . 1e an <':l. p p 1 :i.L i :\ L.i.. U l'l �f U t' ' H\ p r �t :l pt'' r � J )/ ,::\C: L Ofll p J .i. ~�:;. h E> c! � T h :i. <; .i. .,,, �:; u i:J �n i. �l:.l. c~cl b y 1.�.1\ P pF! t .i t .i On E' !"" 1".0 [ �. hr.> �i.. 1�1<::> 1..1. 1' . i�:l.rl r:: F' r: r:�mp i�'.n y r.. t) l'\t : f�~ r �n eel f o t... r �F�v :i.C~\,.1 ,-,,nd f l I' �r:)C c.><:;:"; :i. r1'.:.! .. J f '1. �. 1�1p c: r:>m p .::~r 1 '/ <':\ p p t'" ()\/P~'" ~ t�. h"'' ; 'pr.'I�" OVi::\ 1 :i.s l .t �dn '�'� rn :i t.t. r~ cl to thP p E�'I::.i t :i.oncr.. ~..~r iic:: h :i.n 1.� 1..tr...,., r1ut i fie �:=;; th r:! dppl ic ;:,t nt.. Tri .:�:~ ..i. I l <;:>I..t !"" i.:\ l 'l C E1 ( :. (Jill J::.t i ':\ n y� i <::;c.:; t .tf?~;, '!".hF) :\. f'l ~:; u I'" i':\n C: E~ pr:)l:i.r:�: y \�.11\:i. c: h J. �::; thr;;.) c:: ontr",'J.ct in it~; t:��J.f . I.Jrtt.''l'l p ic:~y mr :��nt of thF! pr�T�'rn .ium, t:h r::� pnl :i. r::).r I:J(�}r:: >.: liTH'�'~'' hi 11 d .i.fl�J �1.1�1,�'\ 1:�. f-.'Vf�'�' l '\ '1:. , t .hr'-' ;.).n d F' f'l f r:) I'"C f"<:\ b l C! ., A �;;, C:l f �:;,:�,, l F' n �f l .IV�? in <:'> U !"" a n c: E:~ i ~=� c (lf\ �=; i d P r �r�r.:l nlac:l .~, "' "' cl don G' dn cl 1-. hr:�� j:lf'' 1'. i. t . �i.. C>l'l f ' l"" �j ;::; P l'd ..i. t J E d tn :\. t ~; �f C1f0 01' CCH\\!Ili~:; ~:; j.r:Hl , ( t .. �o:;.,n.,, (ipl' ' i l b/f:34 !, pp .. f.r�-7.) T h r;~ p c�\ yrnr:�~l'll". Cl f t r�H�~ Pt'" t..:~ rn i urn fTli':\ I'' k ~;; t.. IJ P ;:;;,, l f0 ; :";uc: h p .::,, ymc�n t i.~:; i:\ t . on c: F' t:.h�?.:> c: om p J r:> t. :i.on of '1". h r.:� <: ;,:�,\ J F' t t i~ l '\( �1 thE~ C: Dfl\ p J f') i Clrl C) f fl F! <; f.0C: Df'l d J: lh,:1�::;r::.l" E vo n aftPr th e s ale 1s rn acle and the pol icy delivered, the in s urance broker co ntinl .tf~ ~:; to kr::�~ F!p in touch tr~ith the in�,:;ut..' f.�~ d pr�i m<:1.r"i1y to c: l <J. r� if y a nd answer questions a nd to in s ure s mooth reJati.ons between the in s urer a nd t h e in~'5 '..t.r �p rJ. I f l". h c~ lo ss oc:cut..�o.::,, the� hr�oker� he� 1 p <::; t .o E' :�~ p e d i t~ f:~ P<:':t y rnt:~r 1 t : o 1'- r.. e p <::t I'" a. t ion of t�. h r�~ l o<::;<;;; ,. T h F:! pE�� t .i t..i. unr:>r � i s not p c':\i d ~ rldit:i . on~lly for suc h se rvice per �fo rmed 9G
DISSENTING OPINION - CTA CASE NO . 3920 ~l ..... a ft er t he sa l e of the poli cy . Its o nl y o.i.. n t .c:� r �F!'"' +�. oi.~:. t. h r~ �f 1..tl l ~; ,:,, -1.-. i :;; �fa c t .i.on o f t. h P i r l �::;t.l ,,.. (~C t r:J fll <�~ i n t:..'J. .i n th e:! 1 i-:1. t t o:.~ t��� ' s pa trun .=J.q "." :�,, ,, d r:: n n � i nl..J.E.� t � h i" ,':\ c c: oJ...J.n t . ( t . ""' ,. n, , (.') pr��:.i.. l 6/EJll , pp. .l:?���� l ::'~ . ) " TI IF' pr��E�!~"", f:�~ n t .P d b y ciF! tl7~ r m.in a t i on by t.hi ~; Cnur�� t: i s wh e th er o r n ot. th e ,;:~ c: t. .i. v :i. t. y 0 �f ~:; P 1 J. :i. n q f or� it ~; p i"" incip a l ~:; r� i:":\ n :i.n cit::? E~ n d C�? n t:. f Pf.�~ ot��� c:u mrn:i. ~.:;~:; :i. on c: (.Jn t .r�� i:":\C: to1"'� '�-'� '' cl Q r �� :?o;-! ( tor �me r�� J. y r:�; c.�c t :i.c>n .t 9 .l. o f th e N atio n a l I n ter n a l F\ t:�'Vf�? nUt�'? Ct :>( :IP ;.,, ,., d "'�l .tbj P C: t. to :;:: 1.. co n t:r �,':\c l.�. nr��' <:=; +...-.,:-~. u �f J.. n "'; !.t ,. �d n t::F�' .:,;~ r 1r l bc1ncl <::; p r��.i r1c:: .i. p ,.., 1 1. �;; not:. l :. h f" T a ;-: Cn t:! P :1 t;~ 1�1.i.c:: 1�1 p ,. c.>v :i.. el F~ ~:; ;:~ s �f c>l l o~tJ �=;; ~ I I F.:t:' r- .. ~.?O~:.i. Ggx~_t,~:~~i'.L. tE:>.c.~~.s......P.r: ~~;.:~ p ,::::.J:!?:t: q_r:.~2. r~_,I::: ......1 ~P~::~t.::<~J l.:u::';.'; . .... .r:.>:t .... U.P.~.:J;_Y.J=~X:: i.J~~. !\.....J~!.}(.:j _._c>. !::Jl(:_'~L S ~. () co n t t���,;,\c: l:.n ,,.. ' <:5 t a ~-: of t hi"'" E�F:' ( n o 1o,~ "four�� ) P.f.~..r.:~ ~;:..L~ u. .U..'..f.TJ ...o "f �1�.11 i:�~ q r �o s; s; r�� P c:: r~ i p t. �;; .1. �::; h e r �e h y �i.mp o �:; c�'c:l u 1�1 L l�1p �foJ. l o ~�~.i.nq ~ l ) II ( Ge n e ral e ngin ee ring, x x A 1'Th F� t F! r� rn ' .i.. nd (,~ p E~ nd r.-~ nt c: o n t r�� a c: t.o r�::; ' i n c lucl es per s o n s (juricli cR l or� n ,,,, t u r �;,;~ J. ) n !: >t . P nu.mP r�� a t c-? cl ;:.\ho vE~ ( ht.J t not i n c: 1 uc:f .i..n q 97
DISSENTING OPINION - CTA CASE NO. 3920 /) ..... .i.r1 d .J.v .i c:l1..1 a. l <;:; <:;; 1..1. hj C: ( : 1::. t: u t h('�~ uc c: u P�':l -1-. :i. or�1 I�. a.>~ tJI..I c1 r"! ,.. f:3E-~ c t .:i. f ) l 'l l ~:? o �f t hr'~ L.uc ;:,\ l �r�i'�.;-: Cod�~ ) 1,,! hn c.:;r,~ <.\C t: :i. v :i. 1:: )/ c u n ~; :i.. �::; �1.:. ~::-. E?<:;~; r;-~ n t ..i. a. l 1 '/ of t�. h e> s al e of all kinrl s of servi c es fo r a fe e r.. F'C! c.~ r.. cll c-~ <::; �:::; .-:J f h I;�.J e t. hP r �� or�� fi o 1:: 1..: h e performan ce of the s ervice call s for the f7.' ;-: P r��c: i �:;c c! r � u ::;c-:! o f t. h E:! phy s:; .i. c i::\ 1 o ,. m r,~rl t D. l �f t <::\CI.. l t.i.f'? <:; u �f �;:; 1..tc l�1 cont.r�act.or� �:; o t... t.h c"':.i.r � C:' i!lp l O)_,.,.,~ E'::; .. F' t:.�~ t. .i. t : .i. on r:�,.. f t .ll' t. l� 1 r~ ,,.. .i. 1:: .i.. ::; , Ltn c:l (~ r. cn n t �. r.. i:":l.c t .nr.. but not ~:l.n .i.1�1d c:! f.lL'n cl ,.,~n -1.:. uric:� .. 1...1.nd e: r .. l thl' C)l_..i.qh .1.7 Fin a ll y , petitione r conte nds that the .':\ f Cl I" PC i t. E~ d " J.. (:. i�:\ �::; 1 :i..rn :i.. t .c::.cl t�. o tho s e ac tivitie s ot�� ~:; C� I'''V .i. C: 0~�:;; -1:: hd t. i:'.\ ,,.. �::-~ C' r11..1. 1n C�' 1� d t �. C�! cl therein . ancl t h a t i f -I::. hE-' ~::; E'I,..V .i.. C C~ ma y not be on e enum e rat e d t:.h ~? r� c .i.n, .i. t in I...I. -::; t . h C) \'I(,.! \i 1.::�1 1' .. bE?<~. SE! t-- v:.i..c:t:-�� wl�1.i.c: h .t s of l:�. h�=! p ''' r �i.:..:i.. c: u 1 ;.,,_r. kind C) t�� C J. E:\ ::; �;;, ~'3Ct'" V .1.Ce .tn t.l�lF! due: t:r. .i.nr,? of is neither one o f those e numerated, or h ac! ut h erw1 s e co me near a n y of t ho�co E? S E' t'"V.i. C C-?<;:; (c'nUnl E't' .i:J.tf.�?d in ~;a.i rj E-l~.::~ct.ion 205 of t h e Tax Code. In support of his contentio n ~ p E! -1::. it. i or1 f.-' r� c i t: c�.~cl nn J. �y- l:. h r:-~ Stock Transfer 9n 0
DISSENTING OPINION - CTA CASE NO . 3920 .. .., I In c:. vs. Comm i ss i. one r- Internal b y thi s c RE:>venue !I CTA .::J. <;; f? hi C) � 2003~ promulgat e d Cu1...tr� t . on .Ju. l y '"':'(';) l '/7 J.. " .;,,,. Cln thF~ o t�. h e�:� 1�� h <.:l.l"l d , t-� c�~ S p ond en t. Cornrn.i ':;~;; i Dn F,' t... o �f co n t E' nd <::; t h e.~ t p e t .it .i.on f�? t�- i s <�J.n 1 .in cl E' p c' l"l cl r,> n t c: un t.: r. .;,\ c: t.u r � II <~ n d t:.h ,;;~ t. t .h e! p h r �i:':\ ";t~ 11 o t. he;' r. ' oi.n c: l u.d .in q p ('?. '1::. .i. t :.i. D 1'1F�~ r � , i:\ o,... ~;:;r:~ l�..�v.i..cc' ~; of <:1. 11 : .i..nd <:;, r.. Q q <�:t r-d l c-?~;:;<;; n'f ~��Jilr:-"l.:.tl C:' I ... nut p f�~ I'" �f D ,.... fTi i~. 1'1 C C'�~ t. he�~ �f D l'" o t�- of ph y<:;.i..c.:c.J 1 Ul'" m e n t �.,,). J. t.�..l :.i. t:. h in 1.' h ,.:~ C!2 1�- t .: ,'\ .i. rl c ..; c ~�' p l.:..i. o n i:1. 1."' �' t.a:< 1.J.nd P 1� .. f 0 l'" fllr':? t"' l y n t:-~C:: t: .i.U! l .l 9 l ) 0 f t l' lf:? T' (:'), :< f.:::u cl E' " i n f U. J J i:~. !J t-Pf" mE' n t: It~ :l. t.�. h t h i:'' ~ �: Ul 'l i::f:?l'l �t. j, 0 1'1 D 'f p e t i t ion~:�~ I'- , I to c:IC'C: ir: :!F�! t .J�lF! .i. ~;,<;;; I.J F�' in 'f <::\ \i CJ t-� of a s imilarly situated o'f Stock Tr-a n s fer Services vs. Commissioner of Int er nal R evenue~ j.n t .hr? C<':ISE�'' of F'c.~c:ific: Adju s t ment Co., In c:. vs. Commi ss ioner of Internal Revenue , CTA Case 1'-l o .. , ,..::...,..::,. 1.. C1\ "I''".�7 , th e lat:.tP I'" 93
DISSENTING OPINION - CTA CASE NO. 3920 H ..... ~"l .i.l.h a. C J. 0~5(�.' I f i':l. C: t .U i::\ J. i:). t t. hP pc~ ,... t. :i. n ro~n t. po r�� t~ .1. un <;:; of t. he�'~ c:l F!C: .i. ;,; .i or1 of' ~��J.h.i.c h I he r��f�~ h'/ q 1. .1.0 -t�.F' , ~��Jh :i.cIt dio' C:: .i. ~:; :i.. on I c:a.nnn �t. dr~vi<:~t.e fTl E:\ kE0 th i<; portion part. of my di sse nting opinion. Petition e r lS domes tic: co rpora tion dt.tly nr �q �"'n .i.z(:;>cl l. .l.rtcl f." l'.. -!::. hr.�~ J. z:~ ~�J�:; o "f t. h c~ Phi 1 :i. p pi n c~:,;. L.lncl E�:-' r�� :i. t s Ar�� t .i. 1:: l (:0~; of' In C: UI'''POr � ,:~. l�. :i.Url (E:-: h ., n , p . . . .q.9, [~'1(.1 t���t::' C:. ) :, �i l :.i. ~; p t-� :i.. rn t:\ ,...i. l y E.' n (J a (J r-~( :1 :i.r1 t. he IJ u '''� oi.. r 1e<:'i"; of 1�1t J.r1d lin(.:_) i.\ J J c.: J i�J. :i. rn <:; <:IIJ i�:l:i. n ~:; t, or- 'for � in <c.; U. I'"<':l. nCE~ comp,'�\n.i. E! ~; �for�� i':\ fE�:>l:0, corn m:i. ~;,<;:;i on u ,... co rn p c' n �::o; ;,_,_1.�. .i. ur1 , I�.,, I�I 5. c:: 1�1 inc 1 1..1.cl ,,-~ ,,; 1.:. hE�.~ y : :; U. I'" V E~ 1 i 1""1 :; r:1 F�~ r:: t .i.0 I i , r' <3. p r �<':\ i ::; t:\ J. , and :::;c t 1��. 1 r-~ mcn t. .i.n vF~�::d:. :i.IJ ""'- �1: .i. Ut"t :, �'.11.:l jus hn<'~fl t:. , u�f al l cl<iirn::; i :1r1 <':Ill t.ypr:~::; n�f .in ,::;t..f.f�-� c-,\n cE:>~ ~"I" IF! L f i 1' "(�:0, !ll �':\ r�� i n F', t:: i-J '::'i J...( .i} ]_ t_ '/ , .::} 1..1. i:'.()JY\IJ tJ :i. ]_I'~ .:::\ n d n t-.h l�:':' r� �:::; , I�,J:i. l.-. h !..h E' excPption of life .i. n :;:;u_;. �a nc:: <-:.!, ,�-!no:::! �l:�.n rl l'?qo-1". i,::~. t .E:> .:'J.f I cl ,�.~. cj j I.J �:> J:'. :;:;,�.:\.i.d c J. ,:-:~ .irn <::; r:J"f �Lh l'':' r:' <':ll'�� t�. .i..r-:~~;; ,;,\ nd pE� r � f C:'l' �rn '"' 1 1 111 ,,,, r1n e r�� o f ~::; i:�,, I' �..,,. :i. c: ~''~ '" ~-~ h i c: h <:~\ ,,.. E-:> i r1 c: i d F~n �l:�.z:J 1 t.~ h f~ t-f~to" F r��o rn t. h r:' r~v i l:l r:~ n c E' , bot~ h d uc:: '�.lfll l':> n t .<':'.r- ')"' ;,J n c:l 1:.(;.~ �::; t .i Ill n fl .i .i:J. J ~ p C' t:. :!.. t: j . CHi E! 1'.. ~��-k1S ,:�.1 r11::l <;; -1:. i J. J. is in a dis tin c t activity as a n .i..rldt::"j:)t:�) f1d t::~rl f::. <'J.( jj u.�::; t.c!r�. I 1�. ac: t ::; fot'"� <'J.ncl in ht=.! h a J. �f' of t. l�lr:' :i. n "'- l..l r �e r�� ,;:;--� :i. n ~:; u r �c-~.n c: E~ c:: om p c:l l'l .i e~:; :i. n :J.dju c,:; t�. .i . r\q c l i':\..i.nl �::; <C\ q .:-1:i.nc.;t�. <:Jncl a t�- .i.�::; .i.rlq from thP insurance policy contract.s issued by them. Its work i s to investigate, at th e~ .in:; t .,:\n c: r:> of t hr.:�~ in ?i t.lr' �p r�� , t h c:-:~ c: ,;,l.l...l se ~ natur-e a r1 d f::> :-: tr-2n t o �f th e l o <:;:.::; s u s-:; t <:J .i.. n r:>d by the pr��u pl::'r�t.y o�f thr�? .insut--c:!d, In t.hP course of its investigative work, it conf ers with t he c l aimants with the view of st-:>ttl.inq t-.tle.ir�� c:ldirn~';:, .i.n beh<:~.l �f' of the irEsu.t�-�F.�r��c.; , D. nd on t.he l::l<':J::;i.::; of i. t:,; '1.n in vr.~~:; t~ i q a. -1:. .i. ~:Jn makE~ <:; d �:; u. hm.i t. :::; r�p po r�� t. s in c::o nnt~c:ti.o n v~ith suc h cl.::~.i.ms. (t.~:; ,n., pp. ;s --- 7, .t?�����l:'.i ) . 100
DISSENTING OPINION CTA CASE NO. 3920 In which s ubmit s on th e ~ l a i~ s , i t may rec omm e nd ei ther th e p ay me nt of t h e c l a im s , or de ni a l of s u c h c l aims to t he ins ure r . (1:: .. ::; .n., pp . b, .t~.'i. ) T h E~ ';3c~ r��c~c o mill E' rHi <::\ t :i.. on~; <H�-c-~, ho\l~f0V f'~ r�� , . c,; u hj r:> c t �. to t'"P\i i :::; .i un u t... r � f:?V E!' r �sc:1J. h ''/ t 1�1<':'! 5. n st...tl'.f:? ,... � ( t: . s. n. , p " 2::::: " ) If t h E? r T� c: n mmE~ n da !.-. ion t.o p ,�0.y .1 <::; ,�:\c:c c� pt e d, t:.tlC;' c ]. ,-:~.i.m i<:; t. l� 1 c~n paid ,:�,1ncl <;; at.i s�f i c,� c:l .. Fot��� i i ��; ~; er��v .ic: e :; , pc~ t. i.t:.:i.on ,;� r� .i..s p<':l..i..d b y t .h (;:~ .i.n .-:; u.r��r;,) ,. .. a. v <J.r� :i. <:.1 b 1 <:-:: f 0?f:? .:,\ n d u r1 ;,,\ ~ a s e-t:.o -case ha s ~ s . The am o unt o f i t s fee p c->r. c:.::\ <:;(:� c:l e p F)i"lc:l <:; upon t .tl E' n -:':l. t.ur� s;�~ o -f -1:-.h E' I�J (H �� f.:: clonE-? :� the t.. i mr-:) ci Pvo t�. r-:�c:l to t'.tl P v�or �k, .:~ r1cl t:. ll f::' :Cl mu u.nt. o�f l u:::;<::; ::; u ffi':'! r �c d h '/ th c: r)r� n P E' r� l. ':' n f t �. h ('�' .:i. n ':> l.l. r 'F�) cf � J l"l oi. 1.: '"'i \!�JOI' � f.:: Of .i. n v e::; t�..i. q <':1 t .i. n O:.J , iO:l.d j u <=; t-.in rJ <:~ 1 �1 ;:I �:; c�t..l . linq t �. h o:.:0 c J <::\ i rn c,:; :i..n r � <'�~ p r � .::~�::,; c'r l t,�:~. �1.. ..i .u n of t �. h�;�? .i. n �:::; u r��t::~c:l :� p c:~ t .i. t :i.. o r1t-:) 1' .. <J c t. ::; r~n 1 y il l r � c-~ p 1��r::.�<::; r-�n t...::\ t:..i on of t: h e) :\. n ::; u.r�r~ d ;cl.t1cl ,�.~. �::; "'i '.J rn >:�} .,,; r�, n p c:> ,.�":'io n .:,~. 1. 1 .i.. ,:~ h .i. J .i.. 1.:.y �f o t.. �:::; 1..1. c: 1..., i�''.c:: t�.~;. In the�:> ,�J.c::i.:. o�f ;.:~djt .t s.; t. i. n(J o r � ~;E-~ tt li nq 1.:. h f~ C l i::l. .i.. rw:::. :� .i.. t . .l. �::; c:l Cll..l f:.~ CJ fl b C' l�l <''.\ l f t::d ' �i �I�-::o pr. i n c: :i..p i.:l.l , 1..11(:; in �::; t...tl ���d rl< : P c: omp t:\n Y:� d ncl :i. t ::; <:J c t oi. on .i.�::; h .i.n r::l.i .I..H:J ., r1o t. 1..1pon .i. t:::,~::-~ l �f ~ h ut. upon i t s pr.i . n c ip ~ J . f.1�:; a n t.\cl ..i u.s t�.( ��~ r� !, p E�t�..i t..ion ,:��t... .J..~:; t:\ c.:;p c�c .i.�:':'. 1 aqr=Tl t�. �for. th E' .i. n ~'" '� �'� r��;.u�l c: P comp D. n y for wh o m i t ac t s. Its powPr s a re c o - ex t e n s i ve with, or .i s limited to, th e .:';1. ::;c: E' r.. t. D. :\. n rn E� n t : ,':\ n (:I i':\ cl j u.�'"� trnr�? n t o 'f <'~ 1 o :::; ~; on the pro pPrty incurred . On October 28, 1971, petitioner was assess ed b y re s pondent contractor's ta x ~ in c lu s iv e of 25% s ur c h arqe, in th e s um of P73,224.33 from 1966 to 1970. (E x h . G, p . 13:;2, CTA ,.. E:> c: � ) Petitioner, on No v e mb e r 5 , 1971 (pp . !.f. ~) ����� ~)0 , B l F\ I'" E�?C � ) t'"C?q UE�~ S t.r::?c:l f 0 I'" ,... E)C: u n �;; .i.cl P r. a. l. i. on o 'f' th E) ,;\ ::', r,:.; E~ ~:; smP n t . o n t. h e gr o unds that .it. .i..s not liable bec aus e it 10
DI SSENTING OPINION CTA CA S E NO. 3920 :1.0 �..... is not an indepe n dent cont ~ acto~ as y n p ,.. r~ vi 01...1 ~:; 1 1�1E-: 1 c:1 i n B I h: u 1 .i. n q 1\1n � 'l t:�l ~ Series of 1960 ( Ex h . J, p. 9 1 , CTA r ec .)~ <::H1 c:1 t .t�E:\ t. F.: In F~u l.i. n g No. ? d ,;~ t f�' d ,�JJ. .I.J. y :.t ::::, 1 97 .l , \�,1 1�1i C h c:iU. I:J<.5F' t:jUPn t l y 1''' \.!. l O:�! d �t�. h i:'t t p e tition e r is l i a b l e fo~ co ntr ac tor 's tax (('\n n E! :< B, F'et..i. t ..i..o n fnr�� Hr-> v .i.f;?l;-1 ~ p . 7 ~ ~: T t1 t"��E~ c. ) CC~.nnut b f'~ q.i..vc�~ r1 ,.-�p t. ,.-�nac:i:..i ve p �f f c:ct ; ;:~n d t h i:1 t : .i.n �c:; 1...1 ,.. . <:.11�1c F! ~:tel j u.<.; i.:.f.�? ,... s :,,. r �f::: o r 11 y 1:�.1� 1 (;~ �3 (]P fl t:s D f t : h L' .i. n 5 1...1 r��p r ���- i n <.; u r�� �7:H1C: t;: c Dfli[L;�,,.r, �i r-~:::; c::.i.t.i.. nq ii:'.~:; i::ti..J.t h o r�� .i.. l:.;/ t .1�11;? C::d":.e of f:3 a l o ng a vs. Wa rn e r , B a rn ~s & Co., In c., G.R . L- 2246, Jan . 31, 195 1 , 88 P hi l . 1.2 5, ~ ncl (..~ rn c�;: r��.i.. c i::\ n c: i':\ �:::.f�~ <.:� ~~ �='=\ n cl not :.i.. rH~ E-~ p G~ 1�1d F' r 1t 1:on t1���,�,Jr:: to1 �� <e; i'~��"s cu n t:.r?rn p 1 a. t. l'�~cl in f~c::c t.i.u1 ..1 J.'? J. of t .1�1c' T d ~< Cu1 :1E'. :r. 1�1 a l e t �.'1::. 1:: r�� d i':\ t.Pd FE~ h r-u...,, I' y :?9 , .1. 77:~ ( E:>~h. I , pp . 87 ��- 90~1 CT(�'i r- t>c. ) ~~ l... ,:.,<.; pCJr1d \:: r1t 1.��� n" t .e p F? 1:. i t i. un f~' 1.. ~3 t: <::\ t :i. r1 u t. hE"r��r~ .i.n t 1k'.t p r:.: t ..i. t . i.. ()1' 1!:') 1��� \��.! ::.1. �;:; l .i..d I:J J. E' t. 0 p �"=~ y �l:�.i�l ('o' t .iJ t ..;J 1. ~?> ~ ..1.1ns c:> �f F 1 ~I 6{:; ::~:. 7 ~j .::u1 d F' Er:~: , :.::- ~? 6 � ;-.ic? t~:::; i:. pt �iv:i.lc-: qE:' t .i:l ;< ,�:,\ r 1c1 :::r. co n tr-.'cl.C to r���~,=; t ;,:~~� f C' l'.. t h (�? 'l f:' t:\ 1�- �:=::. .1. <?f.::.h t.CJ 1. C['J () c"!.nd q t-� E) I, .I. �( I' .i.. 1�1IJ r) r::.\t.i. t:.i . o n t~r � t �. o t pd y h (:-? -~:; t�~ {::\ fll CJ Ll r1 �I �-:~. 11 01"1 01' .. t.:.r::~fr.~.r.~f'! .. t1 <'!. r:: ~ :J.�'�� .... :;:::.')_,.....J. ?.Z.? 11 :y a. nd '1 lJJ '(~ r1 . P.i~ iT) r:~ 1~..\: !.:JJ .... :.';;J.1q c,; ;:; .i ..IJ....... <}.'}1DLl.L1 .o\:,~?.. ~ .......... t:J::.t:\~.?. ...... c; .':?''~f.~..... oi h .;.J l 1.. 'x:� ,i, I:J..~.q_.L .:�1 ==; ....... LI.J.t ~?. ....P. LLi,..r.= ~~ ��� ... J. .~~... <::_q 11.r.- ~~ ~:rJ..~.c:t. ,........ Jl_r;:~ T h r! i �::; �:=; 1�..1.C�)~=:; p r ese n ted for di s po s J. t i CJn (l) ( 2) Whe th er or n ot p f:'' t. .i.. t. :i.o n E: r� is a n " i nc:l epen 1j t~ n t cont r-i:1c t .o t-� " l .i.a. bJ. e t .o the co n trac to r's t ax in t h e a rn CJ unt of P83,226 . 59 u nd er t he p r ovision s o f Sect i o n 1 9 1 uf th e National J n te r�Tl<~\ 1 F\F! Vt2 r li. H ;) CodE: �fcH.. th r2 period from 1966 t o 1970; a nd 10 2
�. DI SSE NTIN G OPIN IO N CTA CAS E NO . 3 9 20 ll ( ::~ ) Wi th r�cspect t o th e seco n d pe t i t ion e r c l a ims tha t it i s ,:�,\ r l .i.r 1d r:~ p E' n d P rl t �. c o:J rl t.1�� ,:�,,c: t.n ,... h Pc: i�:\ t..t ::; ""~ i t �;:; h 1. �t :;:; i. n c�:~ <O:; c,:; (:1o r::� ~,, n o t �f i::'. l 1 uncl E~ r� ,::,\ r1 y o �f t h f~ r:: J. ;,,.,;:";E~~; of t.HJ <::; :i. n e> ~;�"; E�? �::; O::�? rll..t. m E~ r �a t �. (;? d .i.n , ;,:1.n d <;:;l.th..i r:;>c: l . t .o t u n CD il"l::. t��,:�,, c: t. ot��'~:., t~a ;< u.nd p r � ~:> E�c: .i. .1.9 1 of t �. h r;:� <=;ai el Co c:I F~ !' j . rl V O l \iE-? c:i i n l' h i::; c: d ::; F' , p ,...u v �i. o: :1f�:.� ""� "''� ~:; �f u J. 1 o ~-~~ ~"' : ::; F e.. J. 7 J. " �::.!~f.': :.(.::.!::~nt<:\u.q _ _!: .~) \ .... c~lEJ L9.:::\r J..~..................... ~J..uJ. ), (:J},.f.1..9 ..L ... .......... )... .x::.t::J . D.':''..I:J .LJ..ll..L ~~.C.l;,r::~:,;) .!\1:1 ... .......X�!.r:;~)) ,............. ~'J. f:l:.Lf:?l::~.~~.cJt:J:.: ~"., i:':\ n cl ot�. h p J�� c:q.!J\ ,X .<l !::.I; } .':~' U .. ....... Y�Jo r� k ~:~. r:;! u . l:r:.<7 t.:: t�, rJ.'.:~.~.'.~..'-......................P.':::P.PL.L.t.d :,q.r:.:'?. .............9.':. QP ~:~X :} o\ � ;;:>~ ... ..... o f . r;Jq r:.:;.L.Y.J~x: r:.ti. , .. i}.r.)};J !::J...J:Jl r:? I.~.::"X'� no z,;~ d, bu .i l r l .i nq , irrigat ion , a rtPs i a n HP ll , \�~ i�':\ �1.�. f:':' r� t...J r:J r� k ::; !I i::\n d n t .h C�? r� c: on �::;t �. r�u c: i.".i u n t�~ o r.. k c on l .r. <.:\L tu r.. ; �r .i l l i.r 1!.::J ~�::: u n -!::.1�� <:�,;.c.: t:r.:w .,:; ; d '=�' mo 1 �i. t . �.i. on ,�:1. n d �:::; i :l. l v ,:;~ q F�' v,Jo r�� l:: (::o n t r.. ;:~ c: t.u r. ::; ; a.1��r-.:J �:::. l : r � r::~ c:: o n I::. I'.. <:~.c t u v��:;o. ; pE�1�o:;ur J�,:; P llq ,�J(;JE' ( �i i r1 t .h c�? in ~::�t<''. 1.1. .:01 t. .lnr1 o'f !J ;:,,.:"; o ,.. E~ 1. c-:~ c:: t ,.. .i c 1 .i q h t ,, hl:'~ c:~ ':. , o r � pr:Jl'~<"�' r.. , r:-:�~ :-: c f'~ p t t. h n �=..r:,� p;,,.~,. .i..1 1 q ''''� fi� ��;.:~. r \(:: ll i. �::~,r�! t d :.; ' p r �op r .i. (' t o !���.-::; or � o p r:' r.. .,,, t .! J r�":; o �f .:cl o c: k y i::\ r.. d ~:; , m:i.. n r:':' c! r� i 1 1 :i.r�tq d p p i::\ ,... ,�,~ t.: u �:.:; , o:. mP l t:. :i n q r:tl .'�'.n + . ":;!I n nq r�� <,\V .oi.. nq p 1 i::\ n t�.~,. , p J. :,\ t :i.. n q F~ �\'i 1.�..'�:\ I) J .i.�:; 1� 1mr:~ n -1:. ,;; , p l .' \ o; t .i.r::: 1 ;�,1m.i. n i':l l ..i.o n p~:. t o-:\ b J. i. :::; hnt c:.� r�, t ::; , V U 1 r:�: ;:~.n .i. Z j.. n q i:HH:I r - E~ Ci:l f l pj . rHJ es tabli s hme n t s ; est ab l i s hm e nts �f o 1�� 1-11 a<.:. h i n q a nd / o i�� iJ I' 'E)a'::;.i n q o f mot or ve h ic:lP s , batt e ry c: h a rginq , pla n .i n q or s urfaci ng a nd r ecu tti n q of lum b er; sawmi ll s ur l cl('~ r- cont r-i:�~ct. t. o s<:\V~ a nd / ut . c: u t l ogs h e lo~q.ing tu ot hers; clryc l Pan i ng ur d y P.i n g est0 bJ. is hm P nt s , s t e a m laundrie s , 1. ,��I t..t. r l d t... .i. c-:~:::; n q u ~::; .oi.. ~�J a<.:; h i n q m ;,:~r:: h .i. n E' ':'>; phu t�.ncJ ,,. d ph .i. c: ::; t.ud i P"' !I t e 1 �:�p h one 103
www -- DISSENTING OPINION CTA CASE NO. 39 2 0 or� \".:(�' l r:��q � �� ,�;~p h b , .o ,,,, c1 c: i-". ~-' t �. :i. n (_] <::;tat ion<::; ' f �..lf"l E' r� a l p <) r- 1 D l��-�=.:;; �=; h op �c,:; �f n ,... t .l lc' r:: lJI'l ~:; t .r�t�.c t .i. o n o r�� t-�r�? p,:�,, .i.. r�� o f bicyc 10s or ve h ic l es o f a n y kin d , mec: h anic 0 l rl evices, i n s t r u me nt s, a p par2tus, or fu r nitu r e or any k :i. n cl !' <::; l 1 u r:~ r�� E~ p d i r �� :.i. n lJ by m ;,l.C h :i..n f'? or�� ;:,\ r l';/ rn F�ch .=~ n ici,;t l c:o ntr�� :i. \1 �'�.\ rl r:�:~;�.' , dn d !:. ;:~ :i.. 1 u r � <::; l 1o p ~:; ; b e i;H.I t. y p <.:\ r�� J o , -~:; , c:lv � .;:~�=.:<=; m ;- \1-:: r~v�<.:;, rn :i. l l :i . l'lE" I'"�~;, h ~:t. t:. l-_ (�:!r-s !' k E�t:-:�'P F't ,,, o-f h ot.e 1 '::;, l ol i q :i.. n q h o t L;.:-~ �:= :;" <;:;�l :. (�:~v P d u t � E:~<::; !' ~-~ ,��.\ I' ' E�' h 0 1..l o:�;n rn E' fl ; p 1 t.J fi t !:J�:::' r ::; !' ~; rn :i. t h <::; ; h ot.! ~::;E:: en-- o:; i. ~~ rl p .:,~:i. n 1-,; ::~v �,;,; :: 1 .i. t�. hoq r-,':\. p J� 11:'r-~:;, p '�.t h J :i <-=; 11 r:., ! ��:; , E' :-: C: E~ p t . t .h osr::.> F:' n qa.qr~ d i n �l.� ! 1r:' f)t.Jh 1 ic .:,J.t; i o n of p 1... i.r1 t i.nCJ "l -:'�l l'i( .i rH.Ih'l :.i.. C i:J.'i::.i..o n �uf ,:u �1y l'l PIN <="� r:1: :\ rl E� , .. , HldlJ ;-~ �j_I'll:�' !' I' �:�'V J Phi (J ,, .. b u. l I. l':~ t .i. n t,\t11:i.. C: 1�1 ;�\ j::l p C:�~ i':\ I' '<::; ;:,\ t. I " F~ L.l'..t. J. c:l. I" :.i. n-J. �. ;:.�t '/i�l�l �";!, 1-'�.J :i . l::. i�l f.i.:-:Qcl p t�-icr:! '> i' ov � '", Ui :J <:''L I� :i j::t'l' :i.cm cH 'H:! S~i.:\ J. P, ,�:,1.ncl L-.lh .i.c:: h i.. .:�; rl�.d r:h�''-i o'i::F'cl pv :i.n c.i..p-:1 11 y t �:J t-.h r::' p u h 1 .i c.:.! t :i.em n f C~. d VP t-� t ..i. ~;,(".�' rn F�~ n t <::;; p 1� � .i. n I.or..�1� ~=; iH lcl bo o kb .i . rl cl ('~ r.. <::;, h ! .I <::; i I I r:=�<:~ ��; Lu <J.np(: ~u.� :!_i:~� !.t ........f~..f:. )'~' -t:x_~<:::\~.::J:,g.r:~~'~-, p c-? ;; c: i'? t p E' r.. "'� on �:; , i=.>. <:; �"' nc .i ,=:\ t: .i. o n �=.; ,:;~. n d co r �p (:> r �.:' t .i.o n '"' '�.\11 cl F.�... c:: u ,., t ,. -=~ c: �1... f u1�-� e mbroidery an d a pp are l for e ~ po r t : :\ ,.,, ~,,,, F' :1 1 ,:�\ ::, t. h (:::.> i. r.. ,,,_ q P n t ::; i:':\ n c:l c u n �I.:. I'",��.!( : t:. r l r ��:c. , c:; l' l i�:\ l l pd y i:':l t .i::l ;.~ E' l :Jl.l i v i.'�l :J F�� n l:. t o t-.h ,... ��? ��~ p_g_r:~ ~-~~ ~~~..t~ LfT1_ o f t .t �F' :i. I' (_.J 1'' ()'0:\� �=.o 1'- E'? C E? .i. pt.S � :-: :-~ ;< X~ XXX (As amen d e d b y SPC . l. , n ;::-~p t..t.l:) l ic: tl c: t. No " ::':. 9 ; <::;(�?C. Ll., F~e pu h l :.i..c Act No .. ~'iB D ; ~:;F~c:. l2, RP publi c Ac t No . 1 6 l 2 ; sec. 1, Re pu b lic: Act No .. 2 0 72 ; s ec:: .. 3 , F\ (2 publ ic: (.k t 1\!o. :~ :37{:,.) [Und e rlining s upp l i e d . ] In ::;a..icl ~:; ec:t�..iorl J Cf .l of t h E~ T�a:-: Cod E?, .i t e numP r a t e d t he con t r acto r s t hdt a r e su b ject to 3% co n t r act o r ' s t ax th e r e on a nd a dd s t he r ei n , f o l lowi n q t h e n a me d busi n e sses s ubj ec t t o sai d t ax, the phrase 104
-- - DISSENTING OPINION - CTA CASE NO. 3920 " o t:.h e r�� :!. nd (" PC�~ rid :~rlt. c:: o nt:.r �."1.C:tOI'.. <;. � " Pe tition e r c l a ims that it does not f a ll E~ i 1::. he-~ r � t.Jn c:l P r i�)l'i y o 'f t .h E} n Drnc-~d c:: on t .r� .:.:~c: t .n ,... ,,, u r� un d !"? r.. t-. h r-:,� p h,.. ;.~.~,F:~ ... 11 o 1:.h r:.~ r. i nc:l F' pPnd c n t c:: on "I::. I'" <::\ c:: t.n t�.. �:; 11 i:). <:;; ! :on t:r:.-~m p l i::l. t :. E�d :i. n t 1- , ,..,~ 1 ,:�,\v�l . F~E~ "'i p o 1�1cl E�'l'l t:. ; liov~ t0V I: �c' ,.-� , co n t F~ n d <::; 1:". h ,:,\ t �. p c t: .i.. t : ion ;;;~,.- i ~':; <�). l'i 11 j ,,.., d �7! pE' n d !:-~ n t c:: o n t r� <::l.C:: t:.-::11'.. 11 i::l.nd t:.h i::l.t . t . h f�~ r:1h r� .:.:\ c.:;p ' ' 0 t .h r? t�� i n cl c-~ p E~n d r:-! n t co n tr�c:~.c: t:ur.. �::; " C:Cl \lC'J ��=; a 11 p c'r ��_:; on�::; , inc 1 ud :i.r1q pe titioner , t ha t e nte r into a contract for i:.'. l' iP �::; i'.\ J L' U f �:O E' r � V .i. C (�~ �:::; f () ,... <7!. 'f' (-~ 1?;~ r � P CJ i:J. r�rj 1 E-:1'::i ':', n f wl�ic' t.h c' l. n 1� ,�, ut. t .liF!! pE' r�fot�. rn .;;lnc: c! n �f i t. <:o ,:,\ L �1.: .i.. �.,. .i. t :.i .!-:-~ '':; r ..;-:1. J. 1 �;:; f C:l 1'.. '1::. h C P ;.; C! ,... C: .i. 'c::. r:.:! 0 t'" U �:; E' of t.h e me nt a l or ph ys i c al or ma nual 'f -:':\ C. t.i.l l�..i. r ��;:; u �f :i. t ~:; ~-} ill p J n yc~!-:�! or � t-)rn p 1 U ')"' !'' c-~ ::; .. tho merits o f t hi s case I.J u i l <::; c:l cn�m l.:. cJ l.:.l��,p q t UJ'~ ':; :i.on n f v-1IV�' l:.hE-~ r.. u , . n!J -1:. tl �) (7! ph r �;.~. ~"r" "Pt h E�I-� .'l.l'lci E' p E! ndf�? n t <:). 1 1 pe ,--~;on <;; P n t .�'! r-i n CJ :i.. !il:. u "'� t�::!J n -1: r. :.,,.c t . o f sa l ~ o f s er v j.c::e for a no -1::. f r:� ' F~. i:\ l l cl \':. h L1. l. c u 1�l t e n t ..i.nn r es po nd e nt 1s dn I. .I. I J~��J <O\I' ' I'"i;\ rl I".F1 c:i i 1'\ t .E' ,... p ,.. (�~ l: i::\ t .:i.. CJ I"r U �f tll C' 1 <"'- I'~ " �r c hot. ,.,., u '�.I. r.. t. h '" ,.,; r� u. lr:-}d d r�rc:l "'iC't�. tl P d sa me quest i o n i n a d c.� �f .i n .i -1:. :i.v r�:! l. '}" F' r �l�Jn !:�t. tr 1c r;� d pr i n c ipl e i n t h e c ,._, ':'iF~ r:J f B toe: k T r"i':\ n s �f P ,,. Service, Inc. vs. Commissioner of Int erna l Revenue , CTA Case t�~ � J.. ?0 0 ..:. , i' WU HiiJl CJ -:'01. tr::~cJ CH i .Jr..!. l y :? () ;! l(f '? J.;l l 1 olr~ .inq t .l k\ 'i:. v-.ri� Jr:'� r �E:' "'' .i ~::. not o n e~ !-:-~ l"i(] .::J C] c-~d in .;:.. 1�1 c�n 'l".c ,,. p ,,. i <::; c-? �"~ �::; t h u<;c;r:-:,� ;::�! I 11. r.rrw�r '" l. t-:�!cl .i. r1 Hr:�c t :i. o n .'1.. t;> 1. u f t. h t:' T "'' :-: Cod P ~� .i. t�. c: .'J. n n u t . l:>f? t-..:::1. ~< r:�!d d .,,; "o t �. hr::> J�... .i.n cl r::1 p(c'l'l cJ F'n t: c: on i:: t... i'\ C: l.o r. '' t.tn cl c r. t. l� i r:-~ p1..1. r.. v :\. pr; J o 'f ~" ''''� i. c:l :::;r.:~c: '1....i.on <: ;u b j F~c: t. �t.o a :~~;1,, c: on t .r. ac t .o ,... ' s t<.-:1. :-~ � Sai d th i s Court in t hat c a s e, pertinent por. tinn '::; of ~�~hich ~'l e ar�e quoting h P 1�-�p u.n dE' ,... The t: hru~; t . res pondent 's argume nt, in hi s bid to s u s tain the a ssess me nt s in q tJ f.-~~-::> t .i.. (Jr \ , i ~:; �f C]\..tn d in hi. ==> dE'! :: oL "'; ion uf De l:obr;'r. .1.968 I�~ h C' ,.. �C:' :i.n j_ t. .1. ~:, <:; t .;:~, i':F!d t .h C) 103
��� ....... -- ow;w� -� DISSENTING OPINION CTA CASE NO. 3920 .... .L 4 ��- pur� p o�;;,r:-~ o "f t. t1c:~ law in pro vi ding t o r�� t:. hE�~ tax a bility of '' .in cl f:'�' p(;,rl c:l E?n t. co n t r��ac: to r�s '' J.. '"i '' to include all pers ons whose act.ivi.ty consists essentiall y of the sa le of a ll kinds of serv ices for a f ee regardless as to ~.shf:> t. h F~ r�� o ,... not t. he ppr�� "f CJ r�m<":1.n (:: f':! u �f which calls for the exercise or u se of the mental or physic a l or manual f ac ulti es of its employee or�� F:~mp lo yE-~E':!~;." Petitioner on the other J�l D. n d , i�~ ~::.c,; i:~ .i. l ~"; ,:;1. ~; un \,J ~:\ 1'" 1'" ,:;~n t:.E'r :l thE�:' Ul�l.im :i. t .f:>ci c::CJn~=;tr�� Lt c:t :i.on l a id b y r�e .�p on d en t on the term ".i.ncl c~pc�~r�ld E:' nt c:u ntr�� c~\c: tor �. " I t. d l"l C: 1"101'""5 :i. "1.:. ~; t. hr.:~ t s '''' ";,:;e ~:; ~;., m c~ n on t hP ''con t r��o l t: r-:~s t '' I::. I�IPO l'"'l .;,~nd t:. J�H;:~ n .t 1 t? of eJtL~.~.r:!grn. 9..~:!.!Jf'!.L. L.:'."~ in t h P in t.E-?1��- pr�F~ t a t ion .;:,~.n d co n ~.;,t�. r � , _tc t.:.i..on u�f t. he te,:r��m::; " .i. n d (-."-~pi:�? II r::lE~ n t co n t r ,~:\ C tor�" a.:; t.t Sf.:'d in f:)cc: l" :!.. un .1.91 o �f the f\eVE:' nue Coc:lo:::'. Se c t ion 191 of the Re venue Cod!-:�? Pl" l i.Jfn f:-~ 1'�.~~ tE? s t.:hP k incl <:; of contractors who are s ubject to t. .:�).:< i:).nd add:; to thE? l.i.. <:;t. ''othe1��� i ni :l E' P F-' l lcl~:~ n t. c nn t �. rae t.or��s . '' The a ll ega tion of respondent that the a deli t. .ion u �f '' o t. h E)r� .i nd e pendE:'n t c:ont.lr�a ctu t�� c.; '' t:o thE? l.i.. ~;t:. i s in t.c-:o nc:I E~d ''to inc: J. ude c.~ J. 1 per�� sons whose ac tivity consists essent.ia lly ' of the s ale of all kinds of services ~ or a fe e regardless as to whether or not t he performance of which ca lls for the exerci se or use of the me ntal or physical or manual faculti es of its employee or c2rn p 1 oynp~:; '' i s un wa t�� t�� an t.-:~d � I t i. s a se ttled rulP nf statutory c on ::; t .r- uc ti.on that v~het��� f.-? g E~ n &?r�;:;~. 1 106
WT DI SSENTING OPINION CTA CASE NO. 3920 -� 15 - word s f o llow the des ignation of P<:\r��t.i. c: t.tl <"'l tr- t h inqs 01.-� c l a s s"~'' of pE-~t-~';on ::; o r� �::; ubj I":?C:: t~; ~ thE:> qeno::'r� a 1 words are to be constru ed as i r1 c l ucl.inq only the p r::? t'�<.:;on ~:=. or� ~; ubj ec t s of t. h P sa me c 1 a::=; ~:; or � genera l n atu re as thos e s pecifically enurneratPd. Thi s i s a ru l e of s tatutory cons truction k n Cl lt~ n ~~ s ~j_L;_\.�J::I..f.~.f!l ~.U~Ll_f.'?.t:::: .L~~~- � (Ollada v. C.T.A. , 99 Phil. 604, citing Cra wford, ThP Con struc tion of Sta t u t es , pp . 3 2 6 - 327.) When Con u ,--� r:~ <:; ~:=; <:lc:l cl E~cl 11 o t hE:~ r-� i n d f::: p E~n d Pn t r:: on tv� ,:;~.r::: t:. n ,,. ~~:; 11 <=~- t: t: h E' E?n d of t .h E�~ P nurn e r a tion of t h e per s on s wh o a r��E' S l..J. I�,j E-' C: t to th E! con t r� ac t-.o r�� ' ~;; t <~t;-:, t i"I E! ~; arn E' s h o uld bE~ const.r�� u.ed to in c lud e on l y those who are e ng au e rl to bu s inP sses simil a r to t hn<:;t:-? t:�:'n J��tfTI('? r��,::~ted � Th~ ma i n bus ines s of pe titioner� 1s that of a trans fpr agent. Its fu nctions as s uch tra ns f er a g e nt con sist of n :> q :i.<:; t: E' r�� .i.n fJ t r��i::ln ~; f pr-�s -:':\ r i d i ~; ':; u ,�::~ n c: ;:;,, of c:er� t :i. fica tE? ~> o f ~:; t .u r:. k � Th c-1 bu s .inc->s;s of p e t~tion e r does not c:o rn e under any of the c l ass es of busine s s e s e numera ted in Se ction 191 o f t he F\p v ent .t E! Coclf.~ . In �fact. , W�? b('?l.i.. E'VP t h <:lt. the businr.:~ss o �f a transfer aqen t is tota ll y a l ien to i::l.IIY of th (: > bu �::; inf.�?~:;~:; es J..i. ste:~d in s ai d section . The business to which a transfer a gent c omes c l osest in the li s t is that of a busi nf.:? ss <.'\gent. �' But a busi rH-? ss a g e nt a s defin e d in Sec: t..i.r.m .1.94-( v) of thP Revr:?nUf.? Code "includes .::~ 11 ppr-�s ons who c:\C:t as a.g E?n t �;:; of oth<=.:!rs in thE? t:.r��,;:~. n sac: tion nf bu si n ess with a n y public off.i.C:(�'?r� . <:."\S we J. J. as thosf.? ~-4ho condu.c: t co ll ec:: t. ing ~ 10'1
DISSENTING OPINION CTA CASE NO. 3920 ..... .1.6 -� adverti.sing, employme n t~ or pl.-�ivi':\i.:.F' dE't.f�)c:t.i.ve <~-~JE' n c.i.es. 11 By l'l CJ <5 t�.r- 1-:-~ t.C: 1�1 0 f t .h F.:? i maCJ in D. t :i.. 01 '1 fll<.:\ y ,,., t r��t:l.l"l c:; f P r� ,;,\ CJ 1:�) 1'1 i:'. b E�~ C 1 aS r.;; F!! d U n dE' I'" the sA me c a t e gory as a bu si n ess -31JE~ n -1: . � Th E' ;,, r rJU rnf:~ nt that t-. hi'~ <J dd i t iur1 o'f 11 o ther� indf.'~PE~ncl~"�)n -t-�. r:o ntt.. D.r:: t: ot..�~:;" to thr~ l.i. -::.t of busines ses tAxable und er Section 191 was intended to t ax an y a nd a l l .i.ndc>pcrlclt:~nt cu nt.J"'ac: tor. ~:; i<::; not. justified by tho wording of t.h E-? l i:\ v.J .� I t ~\1 .i.. l 1 hE) n o t E? d t h <:\ t: t �.h r:,, tc:�r �m 11 u 'l". he~ I'" :i.n d E~ p e nd c"' n t. c:: o r1t.1��.:'.\ c:: -1:: o t...-:::; 11 1,-,1,".l.�:;:; ,-,~ d d F!d to t: hr:-~ l i :3 t r�\ �f i:. r:\ )< ,,,, h 1 <:�~ bu ~::; i r1 E"'<o<:5e~:; t.l.n cl f.�? t'" f:3 F' C: t .i ur�1 l 9 :J. o �f t. h e-" F:::r~ ven Uf.�~ Co d F:' hy ~:3t:-~c: t .:i on l :? o�f FIE'f.Ktb l i e: Ac: t . No ., .161. 2 ~ 1:~ h .i. t:::h i:J F-'C: <:\ fil E~ (:" 'f f E-~r::: t :i. Vf' on August 24, 1956. Said amend ato r y Act added the 'foll uwi.ng ht.t <:.;in 17'':3<-;r~ <�:; 'l".u '1". ho ::;r-~ p t"' f:?V :i. ot.t <;; J. y -1::<:~.)-:ah l c� urldF~,... !::;f.�)ct.i.o n .1. 9.1.., ,:�,,long lf,l :i.. -l:: h '' u t. h E�r� :i.. nd <::' pr~ n d c-~ n t d1;?mo l i t inn <:1rlc:l ( cun tr � ;;~.c l'. qJ� � �::; '' ~ l) ~;a l vz,\!JE-' '-'~O J�..�k t::Dntr.. ,::~ctor~;; (~:~) "'t�- r� a �::; t l''f' con t ,,. ;.:~<:: 'l:.o ,.-~,;; ( ::::; ) pE?r.. so n c.:; c.; f~ J. 1 .i. f"l IJ ~�~ i:\ '1: .E~ I' . ; ( /.1- ) p J. i:':l.S t�..i. C 1 <'~. min ;:,\ t..i r:) n t r:~ ~:; d b 1 .i. ~; h rn c-? r1 t s ; � ( ~S ) \/ 1. .1. 1 c <.:l. l'l .i.. 7. .in IJ �':\n d r�ec: ,:~ p pin q f.~S L-1 h l :!. ~:; i'lll'lf.'' l'l t <;:; i ( 6 ) E!S t i:\ i:J J. .i. ''.5 h fTIE?n 'l-, ~:, fur � wa s hing a nd/or greas ing of rno tu F" v r-:? h .i. c 1 cc~ �::;; ( 7) h <:l t .te t'"Y c harging; (8 ) planing or s urfac ing a nd recut t i ng of lumbe r; (9) sawmills under contract to saw and/or cut logs belonging to others; (1 0) l a undrie s using washing mac hines; (11) s hoe repairing by machine o r. any mPc h .:u1.i.c: .::\1 con t r� ivan c:: E? ; .3. nrl ( 1.2) bu ::;:i. nr-)~:;s aor~ n b;" If~ as a 1 : ~ ged, Congres s intended to tax <.:~ 1 1 :i. n cl c-:' pr~n d F-'n t c: on t. r�,:,,c: to I'"S irrespec ti ve of the nature or 10d
'...::' t+ DISSENTING OPINION CTA CASE NO. 3920 ..... .1. 7 �-- kind of th e bu s in ess e ngag e d in~ tt < c~r.. c ��-! <'~ ~:; a b c,:;olt.tt.E-?l y no nE:.1E'~ d "for. t:1�1 <'�.1 d d :i. t..ion of -1:.: h e-~ t.'.-'JE'~ 1 vr::~ businesses mention e d abov e . Tha t Con g r Pss s aw fit to add p i:l. r. "1:.i c '�.tl '"\ r.. kind '''' of bu.~:; in r::, ::; ,;:;1"~"'' to the ta xab l e li s t a l ong with '' o -1::. h r:::~r � :.l. n d f'~ pE' n d f':' n t �. c 0 1�1t .t'" a c: tor. '-.; '' j_ S <?.1'1 f.�? 1 oq UE? fl 1". p I'' UD �f t-. ll i1 t . j_ !:. V~d S intend e d to limit t he app l ica tion o �f th e! IJ f�? rl C�~ r-''" 1 t'-Ju r- d s t-. o bt.t ~::; :i.. n c~:;s c;�<::; o �f '\". h E� ~;:;t:\rnP kin (:1 .7:l. nd ca t e g ory a s those e nume rate d . T h e�' l ..::\ ~(<':lb .i l.i. t. y o-f f.'' r1 q i�.\. i:J �:�} c:l .i. n b u c,:; i n E�' �:::; �::;; a.�: .:'.1 "c:iJI'l "i:. r .:J.r:: i:..Cll ... " undr?t"� f3 r-?c t .ion .1. 9 1 uf -l..llt::> F'{r.�� vc~ rlU E�? CodE? h .J.d :i. t s.; o :- .iqi n :i n ~:; 1 -:-�c l. i on /.1.:;-;, Act. No. ~:~~:;: :;? :� which h eca rn e S e ction 1462 of Ac t No. 27 .1..1. , the Rev i se d Adm ini.s tr a t i.ve Cod e of 191 7 (S ee Lu zon Stevedoring Co. v. Trin i d ad , 43 Phi l . 803 ; Vol s. 16- :!.7 , F' I L.i.. l . (:)n no . I.... <'H'J~" ) ., t1 s r�?<'H"l y a s 1 922, th e Supr� e me Court in th e c~i:l.<:'~F' (Yf l....t. .L�: nn f:3 t. r:?vr? c:lor-.i.rHJ C c.1. \/ . T ,.-in :i.cl a.d !' ~Ji,I.}.P.':::i.:~., h <1cl ,.... P j f:? C: t ;::c1 l t .h e 1::.1� 1 ('~0 t'" '/ t �. h ,=~ t ,:,\ l l p r::! t� �::; on �::.; o r- c0 rpor at i o n s wh o e nt e r into a c.:o nt.v�.:�l��: t �. for.. ~:- .:-J l P of <::tll kind ~" o f :::;E r.. v:.i.r 1�:��:::; for- a. �fe p .1 <::; .�::~ '' c:: r: 1n �\ .1'�,��:\c t�.o r. '' <:�;ubj c-?c t . to t .h co t:.H�:' I'"C f:-'~ 1'1 'i'.. i FJ E' �t a :-:. r;.,:;l, :i..cl th e' f-~u I)I"' E' fTl E' C o u.r t :; The o nl y que stion p r e s ented by t he ~ppel l ant upnn the �for-!;?!Jo:i. n q fa c ts .1. ~::; : I<:> t he plainti-ff a c ontrac tor? Ge n eral l y s peaking, every person ~"' hn c-~n te r-:; in t:o a contract ma y be d e n o mi.nated a co ntrac tor, hut ('~V.i. d P ntly the
.. ........... DISSENTING OPINION CTA CASE NO. 3920 .... :l. (3 L .i��' l] :i.c.:; 1.:,, tur�E' did not mr,?a n to ap pl y the lt~CJr �� rJ II 1:: on t r��,'�~c: tor� ~ 11 a�,; u ~;t.=~d in �:::;i=\ j. d sr::'c: t ion 146 :.? ~ ( no~>J ~~!i�.>c:: l. j . on 19 J. ~ l\l <:l. t j_ on .:;~ 1 J n t .i::'�' r��n a l nc~i-.lerli..H0 Code) to every per so n~ partnership c,r�� co r�p o r�� ,:,,.t:i.un ~�~ho e ntered into a contra ct; t U r�� 11 0 i hf0 r �� v-1 ~:=iE', it hiOU J d nut have been necessa ry to ha ve rn r.0 nti ont=-2d in t.he sa me sec tion other c l asse s of busi ness , such i'.\'�:; ~'1 <.7\ r �� F~hOU~':iE'fTlFYn, pl�- op r� i c~ tnJ,..'::; o r � docky c:\1,..( 1 ~:; .;,) r l r:! pC' r��:::; un ~:; �:;r�? 1 1 i r1 q 1 .i. C! !1 t , , ht::!i�:\ cl , or� po~�.Je ,... , ,:�,, c,; ~\'E' l l ,,,, �:::; pe t��� �::; on �::; f:?n q <J~F~ d in c onducting telephone or telegraph line or proprjetors of steam l ;�'�'�Jndr �:i.E'<..; ;,,,�lei of ~; h ops f (J ,.. 1:.�. h r:! con�:; t .r�t.l. c: t ion an cl r �E! IJE:\ :.i. r�� o l h i c: yc: 1 E'<::~ o r� ve h ic l es of a ny kind , an d k E: r:.~ r:!E' 1����:; 0 �f hu te 1 S <'~fl d l'�r:, �;:=; t,�) u r �i�J. n t .�::; , r:: t c:: . I �f t i�lE' 1,\I O r cl 11 (::o n 1:�. ,,.. <:~.c: t .u t�� 11 in ~;<:~. :i.. d sec tion 1462 meant every r �r'�' J��� c.:; u n V~ 1�10 (:;~ n t.f0 r�� F? d in to t:\ co::> nt �. r��ac t . , l .hE�?n i t ~-Jould inc luc:l p d ware housemen , a nd the other classes of bus iness rnE�~ nt. ionE�~cl ir1 '5~:\ id sec tion, for the reason that every transaction by the other persons mentioned in sa id section is by virtue of a n p E' :.: r � r,? ~;,~:; o1��� irnplir~c.1 co n t r�� <.:\C t:.~,, , Thr? s;~me t:h:i.nq rn.iqht bE> ~:5<J. i c1 ~,jj_ t h t�� r? �f r:~ r�r::::,n r: E' to ~:;ec: tion liJ.t.J:::;., ( nm:v l92, 110
.,.., ..........__ - - --- DI SSE NT ING OP I NI ON CTA CASE NO. 3920 19 ��- N ,'0- t .iorlal Intr,?r� nal Fir,?venur? Cod e ) wher e ke e pers of q i:.\ r� i:J.q f::~�;::; , t r-i::\fl <;; po r�1:.a t. i or1 contractors, persons who t r �i:":\rl <;:; po r�� t p i .\ s �::> E�~n <] c�~ r��~; or- f t��F~ .i.~J 1�1t f o t-� hi r��E-:~ , ,, n d ~;:: ornm u n c: a r-r��.i.E01'"<;:; , <'~ t c � , 0 re also subject to an .i.n tf::~ r�n .::!. 1 r��t-?ve rl \.\C:�? ta :< n I f t he Le gi s lature had .i.n t. f:? nd f.�~ d t~ h re �.-.~ cw d 11 c:nn t:.r��i'.\C tor��, 11 .::~~:; used in �;:; ~-~ c t .i. em J.I.J.6 2 !' to c (J \i (" r� d l l p p r�su n c;; who f0n t r:. 1� f�?c:l :i.1 �1t. o a con tr��cJ. ~;: t:. t:. h f?rl .:i..l": ~�-.�uu. l c:l h <~Vt'~ b eE> n \ .t r lnc..~ cp~;�c;;,J. t�� y t:.o h i:J.VF: ;nr::�n t :.i.or 1f:> d th e:> u �L h e r�� persons refer red t o in s ections 1462 and 1463. t�1u r�� o <::�::� v 1;? r� , .i f 1�. hE�? ge n e ral and br oa d ffi(�:?c":l.n :.i. nq .i. �:::; to bi�:�? q i v~:-~n t .o the� :i.n .,,;,:".i.d <::i E?ction lllh:~ , it~ ~��Jo u l cl .in c 1 u.r:I C:' b<:lnkr?t��s , ill C' 1�� c h a. 11 t�.~:..; , I:J r-tJ k ('? r�o:; , l awye r s, farmers in the �:::;;.;~ 1 c of t 1�1r::! .i ,.- p r� ocl 1.1 c �1�.::; , 0nd eve r y per�son who L' n t �. ;.:,.,r�� .in to a c.:n n t.r�� <':lc 1:-. of ,.,,,.,,:�, t�. c�:~vF-~ ,... ,., <:d�:. \.t r�� e o t�� c ,.,,,,, ,�.i:~\C t r�~ r�� � I t wou 1d a l s u a pply tu a ll pers ons 1 CkH \ :i..nq monc:�?Y upon fJt-�nm.ic:;snt��� y notc::?S, for�� t h e reason t hat t heir tra n saction .is a contract. and the parties t hereto, broad l y speaki n g~ are cont. r��ac tnr��s. V.Jt:' may also add t h at .if, as a. llr~qe d, any per so n performing ~:;f;.> J� � v .ic::c�? �for�� a nother as an .i. n c:f (.,~ p E~ n d E~n t con tractor is 111
- DISSENTING OPINION - CTA CASE NO . 3920 t axa bl e, then a surgeon who pe rforms a s urgical ope ration on ,J. p<�1 t i (�' n t: ~�~ot .tl d h f-2 t '"' :-: i:l h l e. ThE' r,:;,':UTH? r�� u l f" WOU 1 d �':lf.:lp 1 y t .D a d erl t:.i <:; t . ~�Jho E' :-: t r� .::~c t.s d ec <:X'fE-?d tee th from a patient; or to a lawye r who prepares a deed of ~::; ,:,\ J. f? or�� <:In y <.; i rn i l <~ r�� .i. n c.; t. r�� t.lmc-~ n t f o r- h i ~:; c J. 5. f'~ n t ; o r� to a p r�� .i. ('~ �::d : en�� m.i.n i ~~, l.F~ r�� ~�J hu c ��~ l e h r��,;�,, tr-::'~' rn <:l !::;.:; �for�� thr:�' dr�:' <:v ::l .. T l�l er�� p c.::1n h .;:,, no '"ll .lf-:-~s t ..i.on that. t:.h��?se per-�son r::; rn<:l'f br:;~ r� �('~q <.:\ ,~ c:i :::-~ d <'1 :;, � .in dE-? pe1 �1dent. cnn tr-actor s in the broad sen se, a nd s hould be subject to the cn nt.ra c tnr' s tax, jf rP s pondent .i. <::; t.u h P I:J c' l.i..r~ 1 f:~ d ., Th <::lt. <::;u.-:: h a. I"" p ~:; r. I. J. t i <;:.; no l . .i.n k E'F' p .i nCJ ~~~ :i. t.l �l "f.-. h F' lPq.i.�:::.; l .:=�l. "l:.:i.'--/F! pur�� pu :::; r:-~ i. !':i too ,:�,, p p <:l.r � r:-~ '' �1:: ln r� E~q 1..\ .i. t���E�~ fur �t h �:> ,... E�' l u c .�i.. �::1.�=,1. t ..i. o n .. (.) !":; c. t 1..1 I. :i. I l y ("l "f l. h E' hu c; in es :;:-. f~ lll..tmE-? ,..i::\ t. p rJ :L n f:; r.:�,ct.i.un l 9 1. <:> hr::n"\1 �5 that. rloWhPI'"� E:' in t:. hr:> l i s t .erl bu s .i.n essPs in said provision can a n II :i..n ~::; u_ ,.- .:1n c r.:-: :=,l. d .:.i u ~:; tc" r- 11 1 .i.k P 1 y �'�.\ n cl r��P i::\ �:;; on <:1h 1 y �f ,�"l 1 1 . i!J c~ i':l r��p , t". hr~ I""F�'�for��f-? ~ c:un s tt��,:,l..i.n E'c:l to b F~.:::H �� t".h r> o p :in :i. on <:m c:l h u 1 cl t. hat. p E-~ �t�. i t..ion r'? ,..- , !}L!.________),.U..~:~I.,.~t.::~{~ ~~~-~;~L-����--�-��~::~SLJ..U.S..t!~.!::~ , :i. r.; nn t �'" n '' .i.n d f'~ pPn (:1I'�' II t c ont.r-.;�,\c: t .n r� '' 1 .i. .::1 b 1 r:.. tn :~�.;~ p E!rr:::E�:'rl �l�.<'.\(] (' t:..3:.; in t .hP c.~. rn n 1..1n t n"f F' f3 :3 , ~? ? 6 � ;j r.? , r1 lr .\s.:; .i. r l r: r-�P rn F' l""l t th E~ r�� r?t:. o ~ f n 1"� "1-l�ip yna r �::; J ':/6/) t�.r:J .l c770- r.:~ q 1..l i':\ 1 1. y ' �:"�:\ rn :i.nu 1.:.f0 "5 C r��u t .i ny of the bu si n esses Pnurnera t ecl in SPct.i.on 205. (forrnerly Section 191) of the Ta :-: Cnc.ic-:' s hows that nowher�e in thE' listed hu s.i.nE>ss t .hl�:=!r-p.i.n or-� any bu s .i.nE!Ss t l�le r� e.i..n 1.-'Jh.i.c:h i t ca n fl E?ar�J. y be placed or can reasonably fall. I arn of t.he opinion c.~n c1 <:;;o hn 1 r:l t".h <::l t. pP t i t ion~:-? t�- , <::~n 11 in ~:; u t�- <:Inc: e hl"�ok e,,- , 11 11 2
DI SSENTING OPINION - CTA CASE NO . 3920 :.? l an 11 .i. n d t.? pr-:-" n c1 (~n t con t r�,::~c t o ,,. I I l .i. D. b l. c to �-.:.:r�./.,, cont. r <':IC t �.o I'"S' t.o::. ;.: t. he E:\ ill 0 l.H'l t . i t h ad p a id fo r tho se yea 1 s in t h P s um .1. s p t,'"C' p r-:-~ t��l y s;1.. 1.b j ec: t. to C I"' Pd .i.. t q r� -:C':Irl t . � opin .i.on. Quezon Cit y, Metro Man il a, March ~[..;"1~.,--~....._ FUJ AOUIN ~ ssociat.e Jurlge 113
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