FACTS
Iloilo Bottlers, a company engaged in the business of bottling softdrinks under the trade name of Pepsi Cola and 7-Up and selling the same to its customers, closed its plant in Muelle Loney in Iloilo City. It then transferred its bottling operations to its new plant in Barrio Ungca, Municipality of Pavia, Province of Iloilo.
However, even after the transfer of its plant, Iloilo Bottlers was still assessed by the Municipality of Iloilo for payment of municipal license tax in accordance with Ordinance No. 5. Iloilo Bottlers challenged the validity of the assessment, arguing that it was not liable for payment of the said tax because its bottling plant was already outside the jurisdication of the City of Iloilo.
The city instituted this petition before the SC after the CFI had ruled in favor of Iloilo Botters.
RULING
The Supreme Court ruled in favor of the City of Iloilo.
The tax imposed under Ordinance No. 5 is an excise tax. It is a tax on the privilege of distributing, manufacturing or bottling softdrinks. Being an excise tax, it can be levied by the taxing authority only when the acts, privileges or businesses are done or performed within the jurisdiction of said authority.
Specifically, the situs of the act of distributing, bottling or manufacturing softdrinks must be within city limits, before an entity engaged in any of the activities may be taxed in Iloilo City.
In the case at bar, sales were made by Iloilo Bottlers, Inc. in Iloilo City, which means that the company is definitely subject to the tax ordinance.
