RTC loses jurisdiction over hospital’s tax case vs city, declines to rule motion

The Regional Trial Court refused to rule on the motion filed by the Perpetual Succour Hospital, Inc. seeking for an order against Cebu City government’s move to collect business taxes from it.

In his two-page order, Judge Simeon Dumdum Jr. said he cannot act on the motion for lack of jurisdiction.

“Considering that the appeal of the defendants was perfected upon their filing of a notice of appeal within the reglementary period, this court has lost jurisdiction over the case, and for this reason declines to rule on the motion,” Dumdum said in his order dated Feb. 25, 2014.

On Jan. 23, 2014, the PSHI through lawyer Cornelio Mercado filed a motion for the issuance of a writ of execution on the grounds that the defendant, City of Cebu, wrongfully appealed the decision of the trial court before the Court of Appeals instead of the Court of Tax Appeals, which has jurisdiction over tax appeal cases.

“The wrong remedy did not toll the running of the period. Hence, the decision dated 14 October 2013 of the Honorable Court has obtained finality, litigation has ended, and PSH is entitled to the fruits and the full enforcement of the judgment to start with the issuance of the Mayor’s permit which hopefully will be unconditionally delivered to PSH’s counsel,” the motion reads.

However, Dumdum ruled he lost jurisdiction over the case after he issued an order on Jan. 13, 2014 giving due course to the Notice of Appeal filed by the defendants of his decision dated Oct. 14, 2013.

Dumdum issued an order enjoining the City of Cebu from collecting “percentage or business taxes” from the hospital, citing PSHI is a non-stock, non- profit corporation, which, under the law, is exempted from business taxes.

Dumdum likewise ordered the city government to reimburse the hospital P41,290 in docket fees and P76,440 bond premium, which it spent upon the filing of the case against the city government.

The hospital filed the case against the city after it received Certificates of Delinquency from the City Treasurer’s Office for alleged non- payment of business taxes from 2000 to 2003 amounting to P27,486,211.56 and P36,531,520.27 for 2003 to 2009.

PSHI argued that as a non- stock, non- profit corporation, it is exempted from business taxes by virtue of Section 193 of the Local Government Code.

Mercado earlier alleged that in January, his client requested for a Mayor’s Permit but the defendants refused to issue.

Instead, he said the defendants insisted the hospital to pay business taxes from 2000 to 2003 since the decision of the trial court was not yet final.—