First Philippine Industrial Corporation v. Court of Appeals

Summary

First Philippine Industrial Corporation (FPIC), a pipeline operator under Republic Act No. 387, challenged the imposition of local business tax by Batangas City, claiming exemption as a common carrier under Section 133(j) of the Local Government Code. The RTC and Court of Appeals ruled against FPIC, holding it was not a common carrier but a special carrier. The Supreme Court reversed, definitively ruling that FPIC is a common carrier under Civil Code Article 1732, as it transports petroleum products for hire as public employment. The Court emphasized that limited clientele does not disqualify common carrier status, and that pipeline operators are recognized as common carriers under the Petroleum Act and by the BIR. The decision reinforced that the legislative intent of the tax exemption was to prevent duplication of the common carrier's tax already imposed under the National Internal Revenue Code, establishing important precedent for taxation of transportation businesses.