Esso Standard Oil S.A. Ltd. v. Puerto Rico Ports Authority

95 P.R. 754
CourtSupreme Court of Puerto Rico
DecidedFebruary 26, 1968
DocketNos. R-66-206, R-66-210
StatusPublished

This text of 95 P.R. 754 (Esso Standard Oil S.A. Ltd. v. Puerto Rico Ports Authority) is published on Counsel Stack Legal Research, covering Supreme Court of Puerto Rico primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Esso Standard Oil S.A. Ltd. v. Puerto Rico Ports Authority, 95 P.R. 754 (prsupreme 1968).

Opinion

Mr. Justice Ramírez Bages

delivered the opinion of the Court.

■ Appellant maintains that the impost of two cents on each gallon, or fraction of a gallon of fuel products supplied in the airports of Puerto Rico for use and consumption in the propelling of air transportation vehicles, which the Legislature áuthorized. appellee, Puérto Rico Ports Authority, to levy, is actually a tax, ■ and therefore, the authorization to i'evy arid'collect it is unconstitutional, and, furthermore, that [757]*757the collection of. said tax from appellant, when the latter supplies such products to the intervener, is an imposition and collection of a tax from the latter, a situation which cannot be created since intervener is exempt from payment of taxes and excises; and that under the contract in force between appellant and appellee it was agreed'that such impost would not be collected when the fuel is supplied to tax-exempt air enterprises. We do not agree. We shall explain why.

■ The controversy in this case arises as a result of the approval of Act No. 82 of June 26, 1959 (13 L.P.R.A. § 4030ri, p. 467), §§ 1 and 2 of which provide that:

“Section 1. The levying and collection of the tax levied by section 30 (a) of Act No. 2, approved January . 20, 1956, as amended, known as the Excise Act of Puerto Rico, is hereby suspended as regards aviation gasoline, all fuel products for use and .consumption in the propelling of air transportation vehicles, and all mixture of gasoline with any combustible product for use and consumption in the propelling of air transportation vehicles, destined to be consumed in air voyages between Puerto' Rico and other places or in air- voyages within the territorial limits, of Puerto .Rico, if the Ports Authority■ levies, in lieu of said tax, an impost .of two cents, on each gallon or fraction of a gallon of said products and collects it from the suppliers thereof operating in the airports of Puerto Rico.
“The term ‘supplier’ means-, for the' purposes of -this Act, any natural or artificial person engaged in the business of supplying the products above mentioned, and. it shall also mean the consumers of. said products, in case they may import them directly.
“Section 2. The suspension of the levying and collection' of the said impost shall take effect as soon as the Executive Director of the Ports Authority shall serve notice in writing -on the Secretary ■ of the Treasury of Puerto Rico that the Ports Authority has levied and is collecting the impost mentioned in the preceding section; and said suspension shall cease upon the same day. on which the Authority shall discontinue to collect such impost. As soon as the said impost is suspended, there'shall be repealed Joint Resolution No. 103, approved June 24, 1958, [758]*758which appropriates to the Ports Authority $300,000 with a self-renewing character for the fiscal years from 1959-60 up to 1968-69 and $65,000 for the fiscal year 1969-70, for promoting and developing aeronautical facilities in Puerto Rico and adjacent islands. (Italics ours.)

Section 4 of said Act provides that:

“Section 4. The Commonwealth Government hereby pledges and agrees with any person, firm, corporation, or commonwealth or federal agency that may subscribe to or acquire bonds of the Ports Authority for financing in whole or in part any enterprise or part thereof, not to limit or restrict the rights or powers conferred upon the Authority by this Act until said bonds of whichever date, together with interest thereon, are fully liquidated and retired.”

Pursuant to Act No. 17 of April 11, 1939, extended by Act No. 20 of April 23, 1954, intervener herein was granted exemption, until June 10, 1964, “from the payment of all insular, local, and municipal taxes of whatever name or nature, on all real or personal property now possessed or hereafter acquired, including all imposts and excises, with exception of the income tax and of the quota to be paid under the Workmen’s Accident Compensation Act.” (Italics ours.)

Section 8 of the Agreement and Lease Underground Fuel Delivery System executed between appellant and appellee on August 17, 1960, provides that the lessee agrees to pay to the lessor the aforementioned impost for each gallon of aircraft fuel delivered to customers in the airports, except that this impost shall not be collected on fuel delivered into aircraft presently exempted from tax under § 30(b) of Act No. 2 of June 20, 1956, as amended, or under any other statute.

From the text of said Act as well as from the report of the Senate Finance Committee on House Bill No. 663, which became Act No. 82. of 1959, there appears the purpose under[759]*759lying the approval of the latter Act. Said report reads as follows:

“This bill suspends the levying and collection of the tax on aircraft fuel and repeals Joint Resolution No. 103 approved on June 24, 1958, and at the same time authorizes the Ports Authority to levy an impost of two cents on each gallon or fraction of a gallon of fuel for use or consumption in air voyages within the territorial limits of Puerto Rico.
“It is necessary for the Ports Authority to make improvements and extensions in the International Airport and to accomplish this it must issue revenue bonds. Up to the present time, as reported to the Committee, there is no available market for said bonds of the Ports Authority, because the only funds available to the Authority to meet the demands of said bonds would be the self-renewable appropriation approved by Joint Resolution No. 103, which could be repealed by the Legislature. Naturally, this possibility creates certain state of insecurity for the investors. To confront this situation, this Bill is presented, authorizing the Ports Authority to levy the aforementioned impost. The Authority, based on this, could issue bonds which could be paid through the levying of said impost12-3 Journal of Proceedings 1584 (1959). (Italics ours.)

The Explanatory Brief of appellee’s Executive Director on the bill which later became the aforementioned Act No. 82, reports in part, that:

“The bill we are submitting would modify the legislation which levies the impost on gasoline, and would repeal the self-renewable appropriation for the Ports Authority. Under the modus operandi we are proposing, the Authority would be authorized to levy, an impost on the gasoline enterprises. The revenue from said impost would go into the funds of the Authority.”

When appellee proceeded to collect the aforementioned impost from appellant, the latter appealed to the Superior Court requesting a declaratory judgment on the ground, in synthesis, that by virtue of Acts Nos. 17 of. 1939, 135 of [760]*7601945, and 20 of 1954, Caribbean Atlantic Airlines, Inc., .was exempt from the payment of all insular, local, and municipal taxes, of. whatever name • or nature, said exemption being: extended to all real and' personal property now possessed or hereafter acquired, including all imposts and excises; that appellant had agreed with Caribbean Atlantic' Airlines, Inc., to supply the aviation gasoline that the latter might need, and that in said contract it was agreed that any tax, fee, or charges, which might be imposed on plaintiff with respect to.

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95 P.R. 754, Counsel Stack Legal Research, https://law.counselstack.com/opinion/esso-standard-oil-sa-ltd-v-puerto-rico-ports-authority-prsupreme-1968.