The Court of Tax Appeals (CTA) has sent back to the Davao Regional Trial Court (RTC) a 2020 case filed by Alaska Milk Corp. (AMC) seeking the refund of about P2.69 million in local business taxes (LBT), saying the lower court failed to conduct a full hearing or examine the evidence before rendering judgment on the case.
The controversy began when the city assessed Alaska P1.86 million in LBT for 2019 and early 2020. The company paid the amount under protest, insisting that its Panakan warehouse was used only for storage. Alaska later increased its refund claim to P2.69 million to include payments for 2021.
Citing Section 150 of the Local Government Code, the AMC argued that since no sales are made in Davao, the city has no legal basis to impose the business tax. It added that all sales are recorded at its head office in Makati and not at the warehouse. However, city officials said Alaska's Davao facility operates as a branch or sales office, with deliveries and transactions taking place locally.
He said this makes the firm liable under the 2017 Davao Local Revenue Code.
The Davao RTC had previously ruled in favor of the city, but the CTA said the lower court decided the case without holding a full hearing or presenting evidence.
In a decision announced last Oct. 22, the Appellate Tax Court ordered the case sent for rehearing to determine the warehouse's actual function and the city's authority to levy taxes on it. – Erica Mae P. Sinaking
