2014 (Taxation) Bar Exam Questions: Question 7

[Answer / discuss the question below. Or see 2014 bar exam Taxation Instructions; 2014 Taxation essay and multiple choice Questions: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28 and 29; See also 2014 Bar Exam: Information, Discussions, Tips, Questions and Results]


In accordance with the Local Government Code (LGC), the Sangguniang Panglungsod (SP) of Baguio City enacted Tax Ordinance No. 19, Series of 2014, imposing a P50.00 tax on all the tourists and travellers going to Baguio City. In imposing the local tax, the SP reasoned that the tax collected will be used to maintain the cleanliness of Baguio City and for the beautification of its tourist attractions.

Claiming the tax to be unjust, Baguio Travellers Association (BTA), an association of travel agencies in Baguio City, filed a petition for declaratory relief before the Regional Trial Court (RTC) because BTA was apprehensive that tourists might cancel their bookings with BTA’s member agencies. BTA also prayed for the issuance of a Temporary Restraining Order (TRO) to enjoin Baguio City from enforcing the local tax on their customers and on all tourists going to Baguio City.

The RTC issued a TRO enjoining Baguio City from imposing the local tax. Aggrieved, Baguio City filed a petition for certiorari before the Supreme Court (SC) seeking to set aside the TRO issued by the RTC on the ground that collection of taxes cannot be enjoined. Will the petition prosper? (5%)

One comment

  1. No. The Supreme Court has the opportunity to settle this injuction rule. The courts power to issue injunction, though frowned upon in the issuance against a law or ordinance because of the very purpose that taxes shall be promptly collected (Lifeblood Doctrine). The court, nonetheless is not prohibited.

    However, the Supreme Court allows certain requirements in order that collection may not jeopardize the interest of the government or the taxpayer. These are to wit: a)clear and unmistakable right that must be protected and; b) the urgent and paramount necessity for the writ to prevent serious damage.

    Applying the foregoing to the given facts, the two requirements are wanting.

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