Glory Pearl D. Amwao LLB-3B LORENZO v.

POSADAS 64 Phil 353 Construction of Tax Laws: When Legislative Intent is Clear Facts: Thomas Hanley died, leaving a will and considerable amount of real and personal properties. His will provided that 10 years after his death, his nephew Matthew Hanley would become owner of his properties. Lorenzo was appointed as trustee. During plaintiffs incumbency as trustee, the Collector of Internal Revenue, alleging that the estate left by the deceased at the time of his death consisted of realty and personalty, assessed against the estate an inheritance tax. The CIR prayed that the trustee be ordered to pay the Government the inheritance tax together with the penalties for delinquency in paying such tax. The trustee, Lozada, paid under protest and however, he demanded that he be refunded for the amount paid. The defendant overruled plaintiffs protest and refused to refund the amount. Moreover, the CIR levied and assessed the inheritance tax due from the estate of Thomas Hanley under the provisions of section 1544 of the Revised Administrative Code, as amended by section 3 of Act No. 3606. But Act No. 3606 went into effect on January 1, 1930. Issue: Whether Act No. 3606 be given retroactive effect. Held: No. It is well-settled that inheritance taxation is governed by the statute in force at the time of the death of the decedent. A legislative intent that a tax statute should operate retroactively should be perfectly clear. "A statute should be considered as prospective in its operation, whether it enacts, amends, or repeals an inheritance tax, unless the language of the statute clearly demands or expresses that it shall have a retroactive effect, . . . ." Act No. 3606 itself contains no provisions indicating legislative intent to give it retroactive effect. No such effect can be given the statute by the court. In the absence of clear legislative intent, we cannot give Act No. 3606 a retroactive effect.