This action brought by the Government in the Court of First Instance  of  Manila on 30  October  1952  (civil  No. 18013)  to  collect from the defendants  P587.60 as 1 ½ % percentage tax  due on a  transaction made in Cebu sometime in 1933 in the  sum of P470.08 and 25%  surcharge due thereon  in  the sum of P117.52 as evidenced by index card BIR Form No. 27.06 (Exhibit A),  and P2,844.46 due as 25% surcharge  on P11,297.85 for late payment of percentage tax  for the second quarter of 1948; and to have the bonds  filed  by  the  surety  company  to guarantee  the payment thereof  forfeited, should  the  taxpayer fail  to pay  the sums  sought to  be  collected,  on  15  September 1954 after the  approval  of Republic Act  No. 1125, upon motion  of  the  defendant  taxpayer, was  certified  to  the Court of Tax Appeals.

On 21 April  1956  the  parties  submitted the following stipulation of facts:

Without prejudice to presenting such evidence as the parties may deem necessary, they  hereby  submit the following stipulation of facts:

1. The plaintiff  is  a political entity with juridical  capacity to sue and with principal office in the City of Manila;
   
   
2. Defendants Macondray & Co., Inc. and Fidelity & Surety Company of the  Philippine Islands are both corporations duly organized and existing under and  by virtue  of  the laws  of the  Philippines with their principal offices in the City of Manila;
   
   
3. On or  about January 31, 1949,  defendants subscribed to  a bond in favor of the  Collector of Internal Revenue, marked Annex l"A" of the complaint to  guarantee the payment of the  sum of five hundred eighty seven  and 60/100 pesos (P587.60), for alleged taxes due if payment thereof is finally decided  against Macondray & Co., Inc.;
   
   
4. The only  record of  the  plaintiff of the supposed  tax  assessment against Macondray  & Co., Inc. is an index card, in words and figures as follows:
   

   BIB Form No. 27.05
   	Macondray & Co., Inc.
   	Municipality -Cebu
   	Province-Cebu
   	Schedule C Date of letter 2 25 33
   	Paragraph-6	Tax 1-½ %	P470.08
   		Surcharge 25%	117.52
   			P587.60

5. On January  31, 1949,  the defendants executed another bond marked Annex "B" of  the  complaint in favor of the  Collector of Internal Revenue  to answer for the sum of two  thousand  eight hundred forty four and  46/100  pesos  (P2,844.46), representing twenty five per cent (25%)  alleged  surcharge for late payment of percentage tax for the  second  quarter of 1948 if payment thereof is finally decided against Macondray &  Co., Inc.;
   

The  percentage  tax  due  the plaintiff from  defendant  Macondray & Co.,  Inc.,  for the second quarter of 1948, amounted to one hundred seventy  seven thousand fifty eight and 26/100  pesos (P177,058.26),  this  amount  being payable during the first twenty (20) days of July, 1948;

7. That  during  the first  twenty  (20)  days of July,  1948, defendant Macondray & Co., Inc., has paid to the Bureau of Customs the sum of eleven thousand  two hundred ninety seven and 85/100 pesos  (P11,297.85)  as advance  percentage tax on importation during the said first  twenty (20)  days  of  July,  1948, which is  within the third quarter of 1948;
   
   
8. That  the defendant Macondray & Co., Inc. applied the sum of eleven  thousand  two  hundred ninety  seven  and  85/100  pesos (P11,297.85)  to the portion of the taxes due during the first twenty (20) days of July, 1948, thereby leaving a balance  of one hundred sixty five thousand seven hundred sixty  and 41/100 pesos  (P165,760. 41), which was paid on July 20, 1948, by the Company, as follows:
   

   Official Receipt No. 107501	P148,780.00
   Official Receipt No. 107500	10,754.51
   Official Receipt No. 107499	6,225.90
   	________
   TOTAL	. P165,760.41

and at the trial of the  case  on  2  and 3  July 1956, the following documentary evidence: Exhibits A, B, C and D for the plaintiff and  Exhibits 1,  2 and 3  for the defendants. After the  parties had  submitted  their memoranda, the Court of Tax  Appeals  rendered  judgment absolving the defendant  taxpayer  from liability  for alleged unpaid percentage  tax due in  1933 and surcharge thereon  in  the total  sum  of  P587.60 on the sole basis  of  index card Exhibit  A, but holding it liable for payment of P2,844.46 due as 25% surcharge on P11,297.85 for late payment of percentage tax for the second quarter  of 1948.  The dispositive  part of the judgment reads as  follows':

IN VIEW OF THE FOREGOING, Macondray & Company, Inc., together with the Fidelity & Surety Company of  the Philippine Islands are hereby ordered to pay jointly and severally  the  sum  of P2,844.46 to the plaintiff  Republic of  the Philippines thru the  Collector of Internal Revenue.  The defendants are hereby absolved of the plaintiff's claim of P587.60 and  the bond executed by defendants for said sum  is hereby declared of no effect.

In the  event the defendant Fidelity & Surety Company of the Philippine Islands should pay the herein sum  of  P2,844.46 unto the plaintiff, the defendant Macondray & Company, Inc. is hereby ordered to reimburse the said Fidelity  & Surety  Company  the same amount. With costs against defendants.

SO ORDERED

Manila, Philippines, September 28, 1956.

The defendant taxpayer filed a petition  to review  that part of the judgment adverse to it.  The defendant surety company did  not. Section  183,  paragraph  (A), of the  National  Internal Revenue Code, as amended by Republic Act No. 253, partly provides:

The percentage  taxes, on business shall be payable at the end of each calendar quarter  in the amount lawfully due on the business transacted during each quarter; and it shall be the duty of every person conducting a business on which  a percentage tax is imposed under this Title, within twenty days after the end of each calendar quarter, to make a true and complete return of the amount of the gross sales, receipts, or earnings,  or gross value of output actually removed from the factory or mill warehouse, during the preceding calendar quarter and pay the tax thereon: * * *.

Paragraph (B)  of the same section and Code, as amended, partly provides:

In the case of imported articles, the  percentage  taxes established in sections one  hundred and eighty-four, one hundred  eighty-five, and one hundred and eighty-six of this Code shall be paid in advance by the importer, in accordance with regulations promulgated by the Secretary of Finance and prior to the release of such articles from customs' custody, based on the total value thereof  at the time they are received by the importer, including freight, postage, insurance, commission, customs duty, and all similar charges.  In the case of locally  produced or  manufactured  articles,  the  percentage  taxes established in the said sections shall likewise be paid  in advance on the  total value thereof prior to  removal from the  producer's or manufacturer's warehouse.  The amount so paid in advance in accordance with this subsection shall be credited against the percentage taxes due on the sales by the taxpayer for each calendar quarter.

Pursuant to the foregoing  provision of law,  on  16  June 1948 the  Secretary of Finance  promulgated Revenue Regulations No. V-3 (Exhibit D), published in 44  Off. Gaz. 1459-1461.   Section 5  thereof  provides:

It shall be the duty of every importer, manufacturer or producer, within twenty days after the end  of  every  calendar quarter, to make a true and complete return  of the amount of the gross sales during the preceding calendar quarter and pay the tax due thereon. (Sec. 183(A),  National Internal Revenue Code, as  amended by Republic  Act No. 253.)   The amount paid in  advance  by  importers, manufacturers  and producers shall be credited against the percentage  taxes due  on  their  sales  for  each  calendar quarter.  (Sec. 183, Id.)

The percentage tax on business  due from the petitioner during the second  quarter of 1948  (April to June)  was P177,058.26 payable  within the first twenty days of  July 1948.   Within the first twenty days of July  1948 the  petitioner paid the  sum of P11,297.85 as advance percentage tax on goods or merchandise already imported and to be imported during the third quarter of 1948.  When on 20 July 1948 the petitioner paid the  percentage tax due for the  second quarter, it considered and credited  the sum of P11,297.85 as payment of the percentage tax  on business due during the second  quarter of 1948  (Exhibit 1)   and did  not  claim any credit for the amount when it paid the percentage tax due  for the  third quarter  (Exhibit  2). This the petitioner cannot do because the  sum of P11,297.85 was paid in Advance as percentage tax on goods or merchandise already imported and to be  imported during the third quarter of 1948.   Consequently, the sum of P11,297.85 which was due for the second  quarter of  1948 was not paid within the first twenty days of  July 1048 as by law provided, and  for that reason the surcharge  of 25% or P2,844.46 was lawfully imposed.  In other words, the sum of P11,297.85 paid in advance by the petitioner for goods or merchandise already imported and to be imported cannot be imputed to the  percentage tax on business due for the second quarter of  1948,  because  such sum was paid in advance,  as  provided for in section 183  (B)  of the National Internal Revenue Code, as amended by Republic Act No. 253, and not as a percentage tax on business, as provided  for in section  183  (A)  of the same  Code, as amended.

The judgment under review is affirmed, without pronouncement as to costs.

Paras, C. J., Bengzon, Montemayor, Bautista Angela, Labrador,  Concepcion, Endencia, and  Barrera, JJ., concur.