888 Phil. 550
PERLAS-BERNABE, J.:
WHEREFORE, it is respectfully prayed of the Honorable Court to clarify its Decision dated June 16, 2015 and the Resolution dated October 15, 2019 with regard to the effectivity of the application of the Operative Fact Doctrine to films graded before December 10, 2019 where the amusement taxes withheld are or were due for remittance to Petitioner FDCP after December 10, 2019, specifically those graded films, exhibited during the Metro Manila Film Festival, which were graded prior to [the] Finality of the Honorable Court's Decision dated June 16, but were exhibited after the Finality of the Honorable court's Decision. [17]Commenting [18] to the Urgent Motion, FDCP avers that the amusement taxes based on the sales completed prior to the finality of the Court's Decision (which it claims to be on December 10, 2019, or the date of its receipt of the October 15, 2019 Resolution) already accrued to FDCP. According to FDCP, the accrual of the amusement tax is distinct from the obligation to pay the same. Citing Section 140 of RA 7160, the tax is on the gross receipt or the amount paid by the film patron to the theater owner. The time, manner, and terms and conditions for the payment of tax is different from the accrual of tax upon point of sale generating a gross receipt. Thus, at the point of sale, the theater owner is duty bound to collect this tax and hold it for the government, and pursuant to Section 14 of RA 9167, concomitantly bound to remit to FDCP. [19]
WHEREFORE, the motion for reconsideration dated August 5, 2015 of petitioner Film Development Council of the Philippines and the motion for partial reconsideration dated September 16, 2015 of respondent City of Cebu are DENIED with FINALITY for lack of merit.The Court's denial with finality of FDCP's motion for reconsideration had already put to rest any issue anent the constitutionality of Sections 13 and 14 of RA 9167. As above mentioned, the Court held that these provisions violated the principle of local fiscal autonomy because they authorized FDCP to earmark, and hence, effectively confiscate the amusement taxes which should have otherwise inured to the benefit of the LGUs. For reference, these provisions read:
On the other hand, the Manifestation (with a Motion for Partial Reconsideration or Motion to Remand Trial Proceedings to determine Respondent's Full Payment and Compliance with the Decision) dated August 24, 2015 of respondent Colon Heritage Realty Corporation (CHRC) is PARTLY GRANTED. Accordingly, Civil Case No. CEB-35601 is hereby REMANDED to the Regional Trial Court of Cebu City, Branch 5 to determine whether the amusement taxes for the covered period have been paid by CHRC in accordance with this Resolution.
SO ORDERED.[22]
Section 13. Privileges of Graded Films. — Films which have obtained an "A" or "B" grading from the Council pursuant to Sections 11 and 12 of this Act shall be entitled to the following privileges:With the unconstitutionality of these provisions, proprietors, operators or lessees of theatres or cinemas are no longer under any obligation to remit to FDCP the amusement taxes on graded films, which should have accrued to the LGUs. Conversely, FDCP no longer had any legal right to receive or demand the same.
a. Amusement tax reward. — A grade "A" or "B" film shall entitle its producer to an incentive equivalent to the amusement tax imposed and collected on the graded films by cities and municipalities in Metro Manila and other highly urbanized and independent component cities in the Philippines pursuant to Sections 140 and 151 of Republic Act No. 7160 at the following rates:1. For grade "A" films — 100% of the amusement tax collected on such films; andSection 14. Amusement Tax Deduction and Remittances. — All revenue from the amusement tax on the graded film which may otherwise accrue to the cities and municipalities in Metropolitan Manila and highly urbanized and independent component cities in the Philippines pursuant to Section 140 of Republic Act No. 7160 during the period the graded film is exhibited, shall be deducted and withheld by the proprietors, operators or lessees of theatres or cinemas and remitted within thirty (30) days from the termination of the exhibition to the Council which shall reward the corresponding amusement tax to the producers of the graded film within fifteen (15) days from receipt thereof.
2. For grade "B" films — 65% of the amusement tax collected on such films. The remaining thirty-five (35%) shall accrue to the funds of the Council.
Proprietors, operators and lessees of theaters or cinemas who fail to remit the amusement tax proceeds within the prescribed period shall be liable to a surcharge equivalent to five percent (5%) of the amount due for each month of delinquency which shall be paid to the Council. (Emphases and underscoring supplied)
Section 14. Amusement Tax Deduction and Remittances. — All revenue from the amusement tax on the graded film which may otherwise accrue to the cities and municipalities in Metropolitan Manila and highly urbanized and independent component cities in the Philippines pursuant to Section 140 of Republic Act No. 7160 during the period the graded film is exhibited, shall be deducted and withheld by the proprietors, operators or lessees of theatres or cinemas and remitted within thirty (30) days from the termination of the exhibition to the Council which shall reward the corresponding amusement tax to the producers of the graded film within fifteen (15) days from receipt thereof.This means that if the graded film is not exhibited, FDCP has no right to claim the withheld taxes.
x x x x
Section 14. Amusement Tax Deduction and Remittance. - All revenue from the amusement tax on the graded film which may otherwise accrue to the cities and municipalities in Metropolitan Manila and highly urbanized and independent component cities in the Philippines pursuant toSection 14 of RA 9167 is a peculiar provision which merely diverts or channels the revenue from the amusement tax on the graded film to a different recipient-beneficiary, FDCP. FDCP is not conferred with taxing authority but is only entitled to the remittances which should have accrued in favor of the LGUs pursuant to Section 140 of the LGC. FDCP's right to remittances is, however, capped by the phrase all revenue "during the period the graded film is exhibited." This right of FDCP to receive amusement tax remittances during the period the graded film is exhibited aligns with its statutory mandate "[t]o develop and implement an incentive and reward system for the producers based on merit to encourage the production of quality films" and "[t]o develop and promote programs to enhance the skills and expertise of Filipino talents necessary for quality film production" [28] and in relation thereto, gives amusement tax rewards as an incentive and privilege to graded films of superior quality. Section 13 of RA 9167 reads:
Section 140 of Republic Act. No. 7160 during the period the graded film is exhibited, shall be deducted and withheld by the proprietors, operators or lessees of theaters or cinemas and remitted within thirty (30) days from the termination of the exhibition to the Council which shall reward the corresponding amusement tax to the producers of the graded film within fifteen (15) days from receipt thereof.
A reading of the challenged provision reveals that the power to impose amusement taxes was NOT removed from the covered LGUs, unlike what Congress did for the taxes enumerated in Sec. 133, Article X of the LGC, which lays down the common limitations on the taxing powers of LGUs. x x x
x x x x
From the above, the difference between Sec. 133 and the questioned amendment of Sec. 140 of the LGC by RA 9167 is readily revealed. In Sec. 133, what Congress did was to prohibit the levy by LGUs of the enumerated taxes. For RA 9167, however, the covered LGUs were deprived of the income which they will otherwise be collecting should they impose amusement taxes, or, in petitioner's own words, "Section 14 of [RA 9167] can be viewed as an express and real intention on the part of Congress to remove from the LGU's delegated taxing power, all revenues from the amusement taxes on graded films which would otherwise accrue to [them] pursuant to Section 140 of the [LGC]."
In other words, per RA 9167, covered LGUs still have the power to levy amusement taxes, albeit at the end of the day, they will derive no revenue therefrom. The same, however, cannot be said for FDCP and the producers of graded films since the amounts thus levied by the LGUs which should rightfully accrue to them, they being the taxing authority-will be going to their coffers. As a matter of fact, it is only through the exercise by the LGU of said power that the funds to be used for the amusement tax reward can be raised. Without said imposition, the producers of graded films will receive nothing from the owners, proprietors and lessees of cinemas operating within the territory of the covered LGU.
Taking the resulting scheme into consideration, it is apparent that what Congress did in this instance was not to exclude the authority to levy amusement taxes from the taxing power of the covered LGUs, but to earmark, if not altogether confiscate, the income to be received by the LGU from the taxpayers in favor of and for transmittal to FDCP, instead of the taxing authority. This, to Our mind, is in clear contravention of the constitutional command that taxes levied by LGUs shall accrue exclusively to said LGU and is repugnant to the power of LGUs to apportion their resources in line with their priorities. [27] (Emphases supplied)
Section 13. Privileges of Graded Films. — Films which have obtained an "A" or "B" grading from the Council pursuant to Sections 11 and 12 of this Act shall be entitled to the following privileges:As expressed in Section 14 of RA 9167, it is the remitted revenue coming from the amusement tax on the graded film which serves as the reward to the producers of the graded film contemplated under Section 13. Therefore, if the film is not graded and later exhibited, no reward entitlement exists. Accordingly, this is the reason why Section 14 limits the FDCP's right only to "[a] 11 revenue from the amusement tax on the graded film which may otherwise accrue to the cities and municipalities in Metropolitan Manila and highly urbanized and independent component cities in the Philippines pursuant to Section 140 of [the LGC] during the period the graded film is exhibited ." [29] If the graded film for which the revenue to be realized is yet to be exhibited, the taxes deducted/withheld should go to the LGUs. Conversely, once the graded film is exhibited, all revenue from the amusement tax derived during its exhibition should be remitted to FDCP. To opine otherwise would suppose that FDCP was conferred with taxing authority when it was not. FDCP has a dedicated function to develop the film industry by giving rewards to graded films which are intended to be exhibited. This function is not subserved when the graded film is not at all exhibited to the viewing public. In this sense, FDCP's right to receive the revenue from amusement taxes (meant as an incentive to graded film makers) is therefore contingent on the exhibition of the graded film.a. Amusement tax reward. — A grade "A" or "B" film shall entitle its producer to an incentive equivalent to the amusement tax imposed and collected on the graded films by cities and municipalities in Metro Manila and other highly urbanized and independent component cities in the Philippines pursuant to Sections 140 and 151 of Republic Act No. 7160 at the following rates:
1. For grade "A" films — 100% of the amusement tax collected on such films; and
2. For grade "B" films — 65% of the amusement tax collected on such films. The remaining thirty-five (35%) shall accrue to the funds of the Council.
Thus:As a final point, it must be reiterated that Sections 13 and 14's limited recognition is only premised on the application of the operative fact doctrine. Sections 13 and 14 are void statutory provisions which should not have produced legal effects were it not for the operative fact doctrine. Indeed, to allow FDCP to claim revenue from amusement taxes at the point of sale although the film is to be exhibited post-October 15, 2019 would not only defy the express language of Section 14 which caps FDCP's right to revenues from amusement taxes "during the period the graded film is exhibited," it would also deprive the LGUs of revenue that should have, beginning October 15, 2019, rightfully redounded to their benefit.
FDCP is not required to return to the LGUs all remittances already received by it from proprietors, operators or lessees of theatres or cinemas pursuant to its implementation of Sections 13 and 14 of RA 9167 from the effectivity of RA 9167 up until October 15, 2019 (finality of this case);
Proprietors, operators or lessees of theatres or cinemas are obliged to remit to FDCP all revenue from the amusement tax on the graded film which may otherwise accrue to the cities and municipalities in Metropolitan Manila and highly urbanized and independent component cities in the Philippines pursuant to Section 140 of the LGC during the period the graded film is exhibited, provided that, revenue to be remitted to FDCP arises only from graded films already exhibited during the period of the effectivity of RA 9167 up until October 15, 2019 (finality of this case).
Section 1. Finality of decisions and resolutions. - A decision or resolution of the Court may be deemed final after the lapse of fifteen days from receipt by the parties of a copy of the same subject to the following:[25] Tan v. Crisologo, G.R. No. 193993, November 8, 2017, 844 SCRA 365, 383.
(a) the date of receipt indicated on the registry return card signed by the party-or, in case he or she is represented by counsel, by such counselor his or her representative- shall be the reckoning date for counting the fifteen-day period; and
(b) if the Judgement Division is unable to retrieve the registry return card within thirty (30) days from mailing, it shall immediately inquire from the receiving post office on (i) the date when the addressee received the mailed decision or resolution; and (ii) who received the same, with the information provided by authorized personnel of the said post office serving as the basis for the computation of the fifteen-day period. [As amended on August 3, 2010]
Section 2. Motion for reconsideration. - A motion for reconsideration filed within the fifteen-day period from receipt of a copy of the decision or resolution shall stay the execution of such decision or resolution unless, for good reasons shown, the Court directs otherwise.
RULE 16
ENTRY OF JUDGMENT
Section 1. Entry of judgment. - The entry of judgment covering the final decisions and resolutions of the Court shall be made in accordance with the Rules of Court. The date of entry of judgment shall be the date such decision or resolution becomes executory, unless the Court directs its immediate execution.
In turn, Section 2, Rule 36 of the 1997 RULES OF CIVIL PROCEDURE states:
Section 2. Entry of Judgments and Final Orders. - If no appeal or motion for new trial or reconsideration is filed within the time provided in these Rules, the judgment or final order shall forthwith be entered by the clerk in the book of entries of judgments. The date of finality of the judgment or final order shall be deemed to be the date of its entry. The record shall contain the dispositive part of the judgment or final order and shall be signed by the clerk, with a certificate that such judgment or final order has become final and executory. (Emphasis supplied)