THE ASIATIC PETROLEUM COMPANY (LTD.) vs. THE INSULAR COLLECTOR OF INTERNAL REVENUE - G.R. No. L-12687

THE ASIATIC PETROLEUM COMPANY (LTD.) vs.

THE INSULAR COLLECTOR OF INTERNAL REVENUE

G.R. No. L-12687            August 27, 1918

The defendant, under threat of penalty, compelled the plaintiff to pay the internal revenue tax provided for under above Section 17 of Act No. 2432 upon all such oils which the plaintiff had on hand on the first day of January, 1915, whether or not the same had been sold theretofore or not. The tax was paid under protest. The plaintiff contends that the tax collected was illegal, for the reason that the law had expressly relieved him from the necessity of paying the same on all such oils which he had "disposed of to consumers or persons other then manufacturers or wholesale dealers, prior to January 1, 1915”. Inasmuch as he had made a valid and legal sale of such oils before January 1, 1915, even though the same had not been actually delivered, they had been "disposed of" and he was therefore relieved from the necessity of paying the tax imposed by said Act. No contention is made that the oils "disposed of" had been disposed of to "manufacturers or wholesale dealers." Section 17 (paragraph 72a) of Act No. 2432, among other things, provides that "no tax (imposed by law) shall be collected on such articles have been disposed of to consumers or persons other than manufacturers or wholesale dealers. Said Act took effect upon the first day of January, 1915.

ISSUE:

Whether or not a dealer is required to pay the internal revenue tax, provided for under section 17, (par. 72a) of Act No. 2342, upon mineral oils, but not delivered, prior to the first day of January, 1915.

HELD:

No. Section 17 (par. 72a) of Act No. 2432, among other things, provides that "no tax shall be collected on such articles have been disposed of to consumers or persons other than manufacturers or wholesale dealers. Said Act took effect upon the first day of January, 1915. It is clear that the plaintiff could not be compelled to pay the tax imposed by said Act upon mineral oils which had been disposed of to consumers or persons, etc., prior to the first day of January, 1915. The oils in question which plaintiff had sold, but which he had not delivered, prior to the first day of January, 1915, disposed of, so as to relieve him from the necessity of paying tax.

Merchandise may be "disposed of" even though the price has not been paid nor the same delivered. A sale may be perfected between vendor and vendee and may be binding on both of them, if they have agreed upon the thing, the object of the contract and the price, even though the price had not been paid nor the merchandise delivered. The plaintiff had "disposed of" the mineral oils in question before the first day of January, 1915, and was therefore relieved from the necessity of paying the internal revenue tax imposed by the defendant.