LUZON STEVEDORING CORPORATION, petitioner- appellant, vs. COURT O TA! APPEALS "#$ %&' (ONORA)LE CO**ISSIONER O INTERNAL REVENUE, respondents-appellees. H. San Luis & V.L. Simbulan for petitioner-appellant.
PARAS, J.: This is a petition for review of the October 21, 1968 Decision + of the Court of Ta !ppeals in CT! Case "o. 1#8#, $%u&on 'tevedorin( Corporation v. )on. *a+on Oben, Co++issioner, ,ureau of -nternal *evenue$, den.in( the various clai+s for ta refund/ and the 0ebruar. 21, 1969 *esolution of the sa+e court den.in( the +otion for reconsideration. )erein petitioner-appellant, in 1961 and 1962, for the repair and +aintenance of its tu(boats, i+ported various en(ine parts and other e2uip+ent for which it paid, under protest, the assessed co+pensatin( ta. 3nable to secure a ta refund fro+ the Co++issioner of -nternal *evenue, on 4anuar. 2, 196#, it filed a 5etition for *eview 6*ollo, pp. 1#-187 with the Court of Ta !ppeals, doc8eted therein as CT! Case "o. 1#8#, pra.in( a+on( others, that it be (ranted the refund of the a+ount of 599,##2.19. The Court of Ta !ppeals, however, in a Decision dated October 21, 1969 6Ibid., pp. 22-2:7, denied the various clai+s for ta refund. The decretal portion of the said decision reads; <)=*=0O*=, findin( petitioner>s various clai+s for refund a+ountin( to 599,##2.19 without sufficient le(al ?ustification, the said clai+s have to be, as the. are hereb., denied. <ith costs a(ainst petitioner. On 4anuar. 2#, 1969, petitioner-appellant filed a @otion for *econsideration 6Ibid., pp. 28-9#7, but the sa+e was denied in a *esolution dated 0ebruar. 21, 1969 6Ibid., p. 9A7. )ence, the instant petition. This Court, in a *esolution dated @arch 19, 1969, (ave due course to the petition 6Ibid., p. #17. 5etitioner- appellant raised three 697 assi(n+ents of error, to wit; - The lower court erred in holdin( that the petitioner-appellant is en(a(ed in business as stevedore, the wor8 of unloadin( and loadin( of a vessel in port, contrar. to the evidence on record. -- The lower court erred in not holdin( that the business in which petitioner- appellant is en(a(ed, is part and parcel of the shippin( industr.. --- The lower court erred in not allowin( the refund sou(ht b. petitioner-appellant. The instant petition is without +erit. The pivotal issue in this case is whether or not petitioner>s tu(boats$ can be interpreted to be included in the ter+ $car(o vessels$ for purposes of the ta ee+ption provided for in 'ection 191 of the "ational -nternal *evenue Code, as a+ended b. *epublic !ct "o. 91:6. 'aid law provides; 'ec. 191. Compensating tax. B ... !nd 5rovided further, That the ta i+posed in this section shall not appl. to articles to be used b. the i+porter hi+self in the +anufacture or preparation of articles sub?ect to specific ta or those for consi(n+ent abroad and are to for+ part thereof or to articles to be used b. the i+porter hi+self as passen(er andCor car(o vessel, whether coastwise or ocean(oin(, includin( en(ines and spare parts of said vessel. .... 5etitioner contends that tugboats are e+braced and included in the ter+ cargo vessel under the ta ee+ption provisions of 'ection 191 of the *evenue Code, as a+ended b. *epublic !ct. "o. 91:6. )e ar(ues that in le(al conte+plation, the tu(boat and a bar(e loaded with car(oes with the for+er towin( the latter for loadin( and unloadin( of a vessel in part, constitute a sin(le vessel. !ccordin(l., it concludes that the en(ines, spare parts and e2uip+ent i+ported b. it and used in the repair and +aintenance of its tu(boats are ee+pt fro+ co+pensatin( ta 6*ollo, p. 297. On the other hand, respondents-appellees counter that petitioner-appellant>s $tu(boats$ are not $Car(o vessel$ because the. are neither desi(ned nor used for carr.in( andCor transportin( persons or (oods b. the+selves but are +ainl. e+plo.ed for towin( and pullin( purposes. !s such, it cannot be clai+ed that the tu(boats in 2uestion are used in carr.in( and transportin( passen(ers or car(oes as a co++on carrier b. water, either coastwise or ocean(oin( and, therefore, not within the purview of 'ection 191 of the Ta Code, as a+ended b. *epublic !ct "o. 91:6 6,rief for *espondents-!ppellees, pp. #A7. This Court has laid down the rule that $as the power of taation is a hi(h prero(ative of soverei(nt., the relin2uish+ent is never presu+ed and an. reduction or di+unition thereof with respect to its +ode or its rate, +ust be strictl. construed, and the sa+e +ust be coached in clear and un+ista8able ter+s in order that it +a. be applied.$ 68# C.4.'. pp. 6A9-8117, @ore specificall. stated, the (eneral rule is that an. clai+ for ee+ption fro+ the ta statute should be strictl. construed a(ainst the tapa.er 6!ctin( Co++issioner of Custo+s v. @anila =lectric Co. et al., 69 'C*! #69 D19::E and Co++issioner of -nternal *evenue v. 5.4. Fiener Co. %td., et al., 6A 'C*! 1#2 D19:AE7. !s correctl. anal.&ed b. the Court of Ta !ppeals, in order that the i+portations in 2uestion +a. be declared ee+pt fro+ the co+pensatin( ta, it is indispensable that the re2uire+ents of the a+endator. law be co+plied with, na+el.; 617 the en(ines and spare parts +ust be used b. the i+porter hi+self as a passen(er andCor car(o, vessel/ and 627 the said passen(er andCor car(o vessel +ust be used in coastwise or ocean(oin( navi(ation 6Decision, CT! Case "o. 1#8#/ *ollo, p. 2#7. !s pointed out b. the Court of Ta !ppeals, the a+endator. provisions of *epublic !ct "o. 91:6 li+it ta ee+ption fro+ the co+pensatin( ta to i+ported ite+s to be used b. the i+porter hi+self as operator of passen(er andCor car(o vessel 6Ibid., p. 2A7. !s 2uoted in the decision of the Court of Ta !ppeals, a tu(boat is defined as follows; ! tugboat is a stron(l. built, powerful stea+ or power vessel, used for towin( and, now, also used for attendance on vessel. 6<ebster "ew -nternational Dictionar., 2nd =d.7 ! tugboat is a diesel or stea+ power vessel desi(ned pri+aril. for +ovin( lar(e ships to and fro+ piers for towin( bar(es and li(hters in harbors, rivers and canals. 6=nc.clopedia -nternational Grolier, Hol. 18, p. 2A67. ! tug is a stea+ vessel built for towin(, s.non.+ous with tu(boat. 6,ouvier>s %aw Dictionar..7 6*ollo, p. 2#7. 3nder the fore(oin( definitions, petitioner>s tu(boats clearl. do not fall under the cate(ories of passen(er andCor car(o vessels. Thus, it is a cardinal principle of statutor. construction that where a provision of law spea8s cate(oricall., the need for interpretation is obviated, no plausible pretense bein( entertained to ?ustif. non-co+pliance. !ll that has to be done is to appl. it in ever. case that falls within its ter+s 6!llied ,ro8era(e Corp. v. Co++issioner of Custo+s, %-2:6#1, #1 'C*! AAA D19:1E/ Iui?ano, etc. v. D,5, %-26#19, 9A 'C*! 2:1 D19:1E7. !nd, even if construction and interpretation of the law is insisted upon, followin( another funda+ental rule that statutes are to be construed in the li(ht of purposes to be achieved and the evils sou(ht to be re+edied 65eople v. 5urisi+a etc., et al., %-#21A1-66, 86 'C*! A## D19:8E, it will be noted that the le(islature in a+endin( 'ection 191 of the Ta Code b. *epublic !ct 91:6, as appearin( in the records, intended to provide incentives and induce+ents to bolster the shippin( industr. and not the business of stevedorin(, as +anifested in the sponsorship speech of 'enator Gil 5u.at 6*ollo, p. 267. On anal.sis of petitioner-appellant>s transactions, the Court of Ta !ppeals found that no evidence was adduced b. petitioner-appellant that tu(boats are passen(er andCor car(o vessels used in the shippin( industr. as an independent business. On the contrar., petitioner-appellant>s own evidence supports the view that it is en(a(ed as a stevedore, that is, the wor8 of unloadin( and loadin( of a vessel in port/ and towin( of bar(es containin( car(oes is a part of petitioner>s underta8in( as a stevedore. -n fact, even its trade na+e is indicative that its sole and principal business is stevedorin( and li(htera(e, taed under 'ection 191 of the "ational -nternal *evenue Code as a contractor, and not an entit. which transports passen(ers or frei(ht for hire which is taed under 'ection 192 of the sa+e Code as a co++on carrier b. water 6Decision, CT! Case "o. 1#8#/ *ollo, p. 2A7. 3nder the circu+stances, there appears to be no plausible reason to disturb the findin(s and conclusion of the Court of Ta !ppeals. !s a +atter of principle, this Court will not set aside the conclusion reached b. an a(enc. such as the Court of Ta !ppeals, which is, b. the ver. nature of its function, dedicated eclusivel. to the stud. and consideration of ta proble+s and has necessaril. developed an epertise on the sub?ect unless there has been an abuse or i+provident eercise of authorit. 6*e.es v. Co++issioner of -nternal *evenue, 2# 'C*! 199 D1981E7, which is not present in the instant case. 5*=@-'=' CO"'-D=*=D, the instant petition is D-'@-''=D and the decision of the Court of Ta !ppeals is !00-*@=D. 'O O*D=*=D. Melencio-Herrera, adilla and Sarmiento, !!., concur. .R. No. L-22,3- S'.%'/0'1 12, 193, CO**ISSIONER O INTERNAL REVENUE, petitioner, vs. *ANUEL ). PINEDA, "4 o#' o5 %&' &'614 o5 $'7'"4'$ ATANASIO PINEDA, respondent. "ffice of t#e Solicitor $eneral for petitioner. Manuel %. ineda for and in #is o&n be#alf as respondent.
)ENGZON, J.P., J.: On @a. 29, 19#A !tanasio 5ineda died, survived b. his wife, 0elicisi+a ,a(tas, and 1A children, the eldest of who+ is @anuel ,. 5ineda, a law.er. =state proceedin(s were had in the Court of 0irst -nstance of @anila 6Case "o. :11297 wherein the survivin( widow was appointed ad+inistratri. The estate was divided a+on( and awarded to the heirs and the proceedin(s ter+inated on 4une 8, 19#8. @anuel ,. 5ineda>s share a+ounted to about 52,A11.11. !fter the estate proceedin(s were closed, the ,ureau of -nternal *evenue investi(ated the inco+e ta liabilit. of the estate for the .ears 19#A, 19#6, 19#: and 19#8 and it found that the correspondin( inco+e ta returns were not filed. Thereupon, the representative of the Collector of -nternal *evenue filed said returns for the estate on the basis of infor+ation and data obtained fro+ the aforesaid estate proceedin(s and issued an assess+ent for the followin(; 1. Deficienc. inco+e ta 19#A 519A.89 19#6 #96.9A 19#: 1,216.91 51,::9.69 !dd; AJ surchar(e 88.98 1J +onthl. interest fro+ "ove+ber 91, 19A9 to !pril 1A, 19A: :21.:: Co+pro+ise for late filin( 81.11 Co+pro+ise for late pa.+ent #1.11 Total a+ount due 52,:1:.## KKKKKKKKKKK 2. !dditional residence ta for 19#A 51#.A1 KKKKKKKKKKK 9. *eal =state dealer>s ta for the fourth 2uarter of 19#6 and the whole .ear of 19#: 521:.A1 KKKKKKKKKKK @anuel ,. 5ineda, who received the assess+ent, contested the sa+e. 'ubse2uentl., he appealed to the Court of Ta !ppeals alle(in( that he was appealin( $onl. that proportionate part or portion pertainin( to hi+ as one of the heirs.$ !fter hearin( the parties, the Court of Ta !ppeals rendered ?ud(+ent reversin( the decision of the Co++issioner on the (round that his ri(ht to assess and collect the ta has prescribed. The Co++issioner appealed and this Court affir+ed the findin(s of the Ta Court in respect to the assess+ent for inco+e ta for the .ear 19#: but held that the ri(ht to assess and collect the taes for 19#A and 19#6 has not prescribed. 0or 19#A and 19#6 the returns were filed on !u(ust 2#, 19A9/ assess+ents for both taable .ears were +ade within five .ears therefro+ or on October 19, 19A9/ and the action to collect the ta was filed within five .ears fro+ the latter date, on !u(ust :, 19A:. 0or taable .ear 19#:, however, the return was filed on @arch 1, 19#8/ the assess+ent was +ade on October 19, 19A9, +ore than five .ears fro+ the date the return was filed/ hence, the ri(ht to assess inco+e ta for 19#: had prescribed. !ccordin(l., <e re+anded the case to the Ta Court for further appropriate proceedin(s. 1 -n the Ta Court, the parties sub+itted the case for decision without additional evidence. On "ove+ber 29, 1969 the Court of Ta !ppeals rendered ?ud(+ent holdin( @anuel ,. 5ineda liable for the pa.+ent correspondin( to his share of the followin( taes; Deficienc. inco+e ta 19#A 519A.89 19#6 #96.9A *eal estate dealer>s fied ta #th 2uarter of 19#6 and whole .ear of 19#: 518:.A1 The Co++issioner of -nternal *evenue has appealed to 3s and has proposed to hold @anuel ,. 5ineda liable for the pa.+ent of all the taes found b. the Ta Court to be due fro+ the estate in the total a+ount of 5:61.28 instead of onl. for the a+ount of taes correspondin( to his share in the estate.'a&p#(l.n)t @anuel ,. 5ineda opposes the proposition on the (round that as an heir he is liable for unpaid inco+e ta due the estate onl. up to the etent of and in proportion to an. share he received. )e relies on $overnment of t#e #ilippine Islands v. amintuan 2 where <e held that $after the partition of an estate, heirs and distributees are liable individuall. for the pa.+ent of all lawful outstandin( clai+s a(ainst the estate in proportion to the a+ount or value of the propert. the. have respectivel. received fro+ the estate.$ <e hold that the Govern+ent can re2uire @anuel ,. 5ineda to pa. the full a+ount of the taes assessed. 5ineda is liable for the assess+ent as an heir and as a holder-transferee of propert. belon(in( to the estateCtapa.er. !s an heir he is individuall. answerable for the part of the ta proportionate to the share he received fro+ the inheritance. 9 )is liabilit., however, cannot eceed the a+ount of his share. # !s a holder of propert. belon(in( to the estate, 5ineda is liable for he ta up to the a+ount of the propert. in his possession. The reason is that the Govern+ent has a lien on the 52,A11.11 received b. hi+ fro+ the estate as his share in the inheritance, for unpaid inco+e taes #a for which said estate is liable, pursuant to the last para(raph of 'ection 91A of the Ta Code, which we 2uote hereunder; -f an. person, corporation, partnership, ?oint- account 6cuenta en participacion7, association, or insurance co+pan. liable to pa. the inco+e ta, ne(lects or refuses to pa. the sa+e after de+and, the a+ount shall be a lien in favor of the Govern+ent of the 5hilippines fro+ the ti+e when the assess+ent was +ade b. the Co++issioner of -nternal *evenue until paid with interest, penalties, and costs that +a. accrue in addition thereto upon all propert. and ri(hts to propert. belon(in( to the tapa.er; . . . ,. virtue of such lien, the Govern+ent has the ri(ht to sub?ect the propert. in 5ineda>s possession, i.e., the 52,A11.11, to satisf. the inco+e ta assess+ent in the su+ of 5:61.28. !fter such pa.+ent, 5ineda will have a ri(ht of contribution fro+ his co-heirs, A to achieve an ad?ust+ent of the proper share of each heir in the distributable estate. !ll told, the Govern+ent has two wa.s of collectin( the ta in 2uestion. One, b. (oin( after all the heirs and collectin( fro+ each one of the+ the a+ount of the ta proportionate to the inheritance received. This re+ed. was adopted in $overnment of t#e #ilippine Islands v. amintuan, supra. -n said case, the Govern+ent filed an action a(ainst all the heirs for the collection of the ta. This action rests on the concept that hereditar. propert. consists onl. of that part which re+ains after the settle+ent of all lawful clai+s a(ainst the estate, for the settle+ent of which the entire estate is first liable. 6 The reason wh. in case suit is filed a(ainst all the heirs the ta due fro+ the estate is levied proportionatel. a(ainst the+ is to achieve thereb. two results; first, pa.+ent of the ta/ and second, ad?ust+ent of the shares of each heir in the distributed estate as lessened b* t#e tax. !nother re+ed., pursuant to the lien created b. 'ection 91A of the Ta Code upon all propert. and ri(hts to propert. belon(in( to the tapa.er for unpaid inco+e ta, is b. sub?ectin( said propert. of the estate which is in the hands of an heir or transferee to the pa.+ent of the ta due, the estate. This second re+ed. is the ver. avenue the Govern+ent too8 in this case to collect the ta. The ,ureau of -nternal *evenue should be (iven, in instances li8e the case at bar, the necessar. discretion to avail itself of the +ost epeditious wa. to collect the ta as +a. be envisioned in the particular provision of the Ta Code above 2uoted, because taes are the lifeblood of (overn+ent and their pro+pt and certain availabilit. is an i+perious need. : !nd as afore-stated in this case the suit see8s to achieve onl. one ob?ective; pa.+ent of the ta. The ad?ust+ent of the respective shares due to the heirs fro+ the inheritance, as lessened b. the ta, is left to await the suit for contribution b. the heir fro+ who+ the Govern+ent recovered said ta. <)=*=0O*=, the decision appealed fro+ is +odified. @anuel ,. 5ineda is hereb. ordered to pa. to the Co++issioner of -nternal *evenue the su+ of 5:61.28 as deficienc. inco+e ta for 19#A and 19#6, and real estate dealer>s fied ta for the fourth 2uarter of 19#6 and for the whole .ear 19#:, without pre?udice to his ri(ht of contribution for his co-heirs. "o costs. 'o ordered. Concepcion, C.!., +e*es, !.%.L., ,i-on, Ma.alintal, /aldivar, Sanc#e-, Castro, 0ngeles and 1ernando, !!., concur. G.*. "o. %-:988, L@C! @anila v. Collector of -nternal *evenue *epublic of the 5hilippines SUPRE*E COURT @anila =" ,!"C D=C-'-O" T(E 8OUNG *EN9S C(RISTIAN ASSOCIATION O *ANILA, plaintiff-appellant, vs. T(E COLLECTOR O INTERNAL REVENUE, defendant-appellee. Haussermann, Co#n and 1is#er for appellant. Cit* 0ttorne* 2scaler for appellee. *ORELAND, J.: The 2uestion at issue in this case is whether or not the buildin( and (rounds of the Loun( @en>s Christian !ssociation of @anila are sub?ect to taation, under section #8 of the charter of the cit. of @anila 2uoted in the footnote Ds.llabusE. The cit. of @anila, contendin( that the propert. is taable, assessed it and levied a ta thereon. -t was paid under protest and this action be(un to recover it on the (round that the propert. was ee+pt fro+ taation under the charter of the cit. of @anila. The decision was for the cit. and the association appealed. The Loun( @en>s Christian !ssociation ca+e to the 5hilippine with the ar+. of occupation in 1898. <hen the lar(e bod. of troops in @anila was re+oved to per+anent 2uarters at 0ort <illia+ @cFinle. in 0ebruar., 191A, an independent association for @anila was or(ani&ed under the direction of the !r+. and nav. depart+ents. 'hortl. after the or(ani&ation of the association the directors +ade a for+al re2uest to the international co++ittee of the Loun( @en>s Christian !ssociation in "ew Lor8 Cit. for the assistance and cooperation of its forei(n depart+ent. - response to this re2uest @r. 4ohn *. @ott, (eneral secretar. of the forei(n depart+ent, visited @anila in 4anuar. 191:. !fter a conference with the directors and interested friends it was decided to conduct a ca+pai(n to secure funds for an ade2uate and per+anent association. -n the na+e of the international co++ittee and friends in !+erica @r. @ott (uaranteed 51:1,111 for the construction of a buildin( on condition that friend in the 5hilippines secure the site and ade2uatel. furnish the buildin(. The ca+pai(n for funds was be(un here on 0ebruar. 1A, 191:, and, b. the 1Ath of @arch followin(, 589,111 was subscribed, nearl. one thousand different persons contributin(. Thereupon the Loun( @en>s Christian !ssociation of @anila was incorporated under the law of the 5hilippine -slands and received its character in 4une, 191:. ! site for the new buildin( was selected on Calle Concepcion, =r+ita, and the buildin( contract was let on the 8th of 4anuar. followin(. The cornerstone was laid with appropriate cere+onies on 4ul. 11, 1918, and the buildin( was for+all. dedicated on October 21, 1919. The buildin( is co+posed of three parts. The +ain structure, located in the center, is three stories hi(h and includes a reception hall, social hall and (a+e roo+s, lecture roo+, librar., readin( roo+ and roo+in( apart+ents. The s+all buildin( l.in( to the left of the principal structure, as one faces the front fro+ Called Concepcion, is the 8itchen and servant>s 2uarters. The lar(e win( to the ri(ht is 8nown as the athletic buildin(, where the bowlin( alle.s, swi++in( pool, loc8er roo+s and (.+nasiu+-auditoriu+ are located. The construction is of reinforced concrete with steel trussed roof covered with interloc8in( red tiles. The +ain or central portion of the buildin( is 1A1 b. #A feet and stands 21 +eters bac8 fro+ the sidewal8. !n iron canop., suspended b. brac8ets, pro?ects over the drivewa. which lies in front and shelters the +ain entrance. ! wide arched doorwa. opens into a lar(e reception roo+, on the left of which is the public office and the secretar.>s private office, while on the ri(ht is the readin( and writin( roo+s, and be.ond that the librar., each about 91 feet s2uare. 0ro+ the reception roo+, on the left, a broad concrete stairwa. leads to the second floor. 5assin( out of the rear of the reception hall one enters upon a veranda so+e 1A feet in width runnin( the full len(th of the +ain structure which loo8s out on the tennis courts and affords an ecellent place for loun(in(, (a+es and (eneral social purposes. To the left of the entrance hall and also openin( upon the veranda are two lar(e roo+s of about the sa+e si&e as those on the ri(ht of the reception hall, the first bein( the billiard roo+ and the other the restaurant. The athletic buildin( is entered fro+ the rear veranda. -t is a two stor. win( 68 b. 8A feet. 5assin( fro+ the veranda into the athletic hall one finds first, on the left, the toilet roo+, and be.ond this, to the rear, the shower baths and loc8er roo+s. The swi++in( pool is in the center of the athletic win( and is 61 b. 19 feet in si&e, lined with ce+ent. To the ri(ht of the swi++in( pool are the bowlin( alle.s. ! wide stairwa.s leads to the second floor. !bove the swi++in(-pool and bowlin( alle. is a lar(e roo+ A1 b. 8A feet which is the (.+nasiu+ and also the auditoriu+ when occasion re2uires. !bout one-third of the roof convertin( the athletic win( is used as a roof (arden. The second and third floors of the +ain buildin( are (iven over al+ost wholl. to roo+in( apart+ents and baths. On the second floor over the entrance hall is a +e+bers> parlor, fro+ which a s+all balcon. pro?ects over the +ain entrance. The re+ainder of the second floor and all to the third are co+posed of the livin( roo+s. These apart+ents, of which there are 1# on the second and 21 on the third floor are approi+atel. 18 b. 1# feet each. The. provide acco++odations for 6# +en. The purposes of the association, as set forth in its charter and constitution, are; To develop the Christian character and usefulness of its +e+bers, to i+prove the spiritual, intellectual, social and ph.sical condition of .oun( +en, and to ac2uire, hold, +ort(a(e, and dispose of the necessar. lands, buildin(s and personal propert. for the use of said corporation eclusivel. for reli(ious, charitable and educational purposes, and not for invest+ent or profit. The purposes of this association shall be eclusivel. reli(ious, charitable and educational, in developin( the Christian character and usefulness of its +e+bers and in i+provin( the spiritual, +ental, social and ph.sical condition of .oun( +en. 'pea8in( (enerall., the association clai+s ee+ption fro+ taation on the (round that it is a reli(ious, charitable and educational institution co+bined. That it has an educational depart+ent is not denied. -t is undisputed that the ai+ of this depart+ent is to furnish, at +uch less than cost, instruction in sub?ects that will (reatl. increase the +ental efficienc. and wa(e-earnin( capacit. of .oun( +en, prepare the+ in special lines of business and offer the+ special lines of stud.. !ttention is (iven to sub?ects included in civil service and consular ea+inations both here and in the 3nited 'tates. The courses offer co++ercial sub?ects, as well as +an. others, and include steno(raph. and t.pewritin(, boo88eepin(, arith+etic, =n(lish co+position, forei(n lan(ua(es, includin( ele+entar. and advanced 'panish and Ta(alo(, special courses in 5hilippine histor., public spea8in(, surve.in(, horticulture, tropical dependencies, and the (roup of sub?ects re2uired for entrance into the consular services, such as political econo+., !+erican and +odern histor.. Courses are also offered in law, social, ethics, political econo+. and other sub?ects. The institution has also its reli(ious depart+ent. -n that depart+ent there are, (enerall. spea8in(, three +ain lines of wor8 - ,ible stud., reli(ious +eetin(s and special classes. Course are offered in the %ife of Christ and the Old Testa+ent and in the lar(er social si(nificance of the teachin(s of 4esus. @eetin(s are held on 'unda. afternoons and several ti+es durin( the wee8 and courses are offered in the stud. of +issions, in the +ethod of teachin( the ,ible and 8indred sub?ects. The at+osphere of the Loun( @en>s Christian !ssociation is distinctl. reli(ious and there is constant effort on the part of the officials to create a reli(ious spirit/ and to that end there is continuous pressure to induce +e+bers to attend not onl. the reli(ious services of the association but also those of one or another of the churches of @anila. <hile the association is nonsectarian, it is pree+inentl. reli(ious/ and the funda+ental basis and (roundwor8 is the Christian reli(ion. !ll of the officials of the association are devoted Christians, +e+bers of a church, and have dedicated their lives to the spread of the Christian principles and buildin( of Christian character. The institution also has charitable features. -t +a8es no profit on an. of its activities. The professors and instructors in all depart+ents serve without pa. and freel. (ive of their ti+e and abilit. to further the purposes of the institution. The chief secretar. and his assistant receive no salar. fro+ the institution. <hatever the. are paid co+es fro+ the 3nited 'tates. -n esti+atin( the cost of instruction in the various depart+ents, or of the other thin(s for which pa. is received, no account is ta8en of the interest on the +one. invested in the (rounds and buildin(, of deterioration in value resultin( fro+ the lapse of ti+e, or of the fact that the professors and instructors and certain officials receive no pa.. <e have, then, a buildin( and (rounds, professors and instructors, and certain institution officials, furnished free of char(e, and which +a8es no profit even on that basis. This, it would see+, would lend so+e color to the clai+ that the association ta8es on so+e of the aspect of a charitable institution. <hile it appears that the association is not eclusivel. reli(ious or charitable or educational, it is de+onstrated that it is a happ. co+bination of all three, (ivin( to its +e+bership the reli(ious opportunities of the church, the educational opportunities of the school and the blessin(s of charit. where needed without the recipient feelin( or even 8nowin( that he is the ob?ect of charit.. -t is clai+ed, however, that the institution is run as a business in that it 8eeps a lod(in( and boardin( house. -t +a. be ad+itted that there are 6# persons occup.in( roo+s in the +ain buildin( as lod(ers or roo+ers and that the. ta8e their +eals at the restaurant below. These facts, however, are far fro+ constitutin( a business in ordinar. acceptation of the word. -n the first place, no profit is reali&ed b. the association in an. sense. -n the second place, it is undoubted, as it is undisputed, that the purpose of the association is not, pri+aril., to obtain the +one. which co+es fro+ the lod(ers and boarders. The real purpose is to 8eep the +e+bership continuall. within the sphere of influence of the institution/ and thereb. to prevent, as far as possible, the opportunities which vice president to .oun( +en in forei(n countries who lac8 ho+e or other si+ilar influences. <e re(ard this feature of the institution not as a business or +eans of +a8in( +one., but, rather, as a ver. efficient +eans of +aintainin( the influence of the institution over its +e+bership. !s we held in the case of the Colu+bia Club, reli(ious and +oral teachin(s do not alwa.s stop with the spo8en word/ but to be effective in the hi(hest de(ree the. +ust follow the .oun( +an throu(h as +an. +o+ents of his life as possible. To this end the feature of the Loun( @en>s Christian !ssociation to which ob?ection is +ade lends itself with (reat effect/ and we are, accordin(l., forced to re(ards this activit. of the institution not as a business but as a +ethod b. which the institution +aintains its influence and conserves the benefits which its or(ani&ation was desi(ned to confer. !s we have seen in the description alread. (iven of the association buildin( and (rounds, no part is occupied for an. but institutional purposes. 0ro+ end to end the buildin( and (rounds are devoted eclusivel. to the purposes stated in the constitution of the association. The librar. and readin( roo+s, the (a+e and loun(in( halls, the lecture roo+s, the auditoriu+, the baths, pools, devices for ph.sical develop+ent, and the (rounds, are all dedicated eclusivel. to the ob?ects and purpose of the association - the buildin( of Christian character and the creation of +oral senti+ent and fiber in +en. -t is the belief of the Loun( @en>s Christian !ssociation that a Christian +an, a +an of +oral senti+ent and fir+ +oral fiber, is .et a better +an for bein( also all-round +an - one who is sound not onl. accordin( to Christian principles and the hi(hest +oral conceptions, but ph.sicall. and +entall./ whose bod. and +ind act in har+on. and within the li+its which the ri(hts of others set/ who are (entle+an in ph.sical and +ental stru((les, as well as in reli(ious service/ who have self-respect and self-restraint/ who can hit hard and still 8indl./ who can lose without env./ who can con(ratulate his con2ueror with sincerit./ who can vie without te+per, contend without +alice, concede without re(ret/ who can win and still be (enerous, - in short, one who fi(hts hard but s2uare. To the production of such +en the association lends all its efforts, husbands all its resources. <e are aware that there are +an. decisions holdin( that institutions of this character are not ee+pt fro+ taation/ but, on investi(ation, we find that the +a?orit. of the+ are based on statutes +uch narrower than the one under consider and that in all probabilit. the decisions would have been otherwise if the court had been passin( on a statute si+ilar to ours. On the other hand, there are +an. decisions of the courts in the 3nited 'tates founded on statutes li8e the 5hilippine statute which hold that associations of this class are ee+pt fro+ taation. <e have ea+ined all of the decisions, both for and a(ainst, with care and deliberation, and we are convinced that the wei(ht of authorit. sustains the positions we ta8e in this case. There is no doubt about the correctness of the contention that an institution +ust devote itself eclusivel. to one or the other of the purpose +entioned in the statute before it can be ee+pt fro+ taation/ but the statute does not sa. that it +ust be devoted eclusivel. to an. one of the purposes therein +entioned. -t +a. be a co+bination of two or three or +ore of those purposes and still be entitled to ee+pt. The Loun( @en>s Christian !ssociation of @anila cannot be said to be an institution used eclusivel. for reli(ious purposes, or an institution used eclusivel. for charitable purposes, or an institution devoted eclusivel. to educational purposes/ but we believe it can be truthfull. said that it is an institution used eclusivel. for all three purposes, and that, as such, it is entitled to be ee+pted fro+ taation. The ?ud(+ent appealed fro+ is reversed and the cause re+anded with instructions to enter a ?ud(+ent a(ainst the cit. of @anila and in favor of the Loun( @en>s Christian !ssociation of @anila in the su+ of 56,221.9A. <ithout costs in this instance. 'o ordered. 0rellano, C.!., 3orres, !o#nson and 0raullo, !!., concur. Carson, dissents. *"17o4 II ;4. CA 2,3 SCRA -, 199, 0acts; 0erdinand @arcos -- assailed the decision of the C! declarin( the deficienc. inco+e ta assess+ents upon the estate and the properties of his late father final despite the pendenc. of the probate proceedin(s of the will of the late president. On the other hand, the ,-* ar(ued that the state authorit. to collect taes is para+ount. -ssue; is the approval of the court +andator. re2uire+ent in the collection of taesM *ulin(; "o. the enforce+ent of ta laws and collection of taes are of para+ount i+portance for the sustenance of (overn+ent. Taes are the lifeblood of the (overn+ent and should be collected without unnecessar. hindrance. )owever, such collection should be +ade in accordance with law as an. arbitrariness will ne(ate the ver. reason for (overn+ent itself. -t is therefore necessar. to reconcile the apparentl. conflictin( interest of the authorities and the tapa.ers so that the real purpose of taation, which is the pro+otion of the co++on (ood, +a. be achieved. 60erdinand *. @arcos -- assailed the decision of the Court of !ppeals declarin( the deficienc. inco+e ta assess+ents and estate ta assess+ents upon the estate and properties of his late father despite the pendenc. of the probate proceedin(s of the will of the late 5resident. On the other hand, the ,-* ar(ued that the 'tateNs authorit. to collectinternal revenue taes is para+ount. 5etitioner further ar(ues that $the nu+erous pendin( court cases 2uestionin( the late president>s ownership or interests in several properties 6both real and personal7 +a8e the total value of his estate, and the conse2uent estate ta due, incapable of eact pecuniar. deter+ination at this ti+e. Thus, respondents> assess+ent of the estate ta and their issuance of the "otices of %ev. and sale are pre+ature and oppressive.$ )e points out the pendenc. of 'andi(anba.an Civil Case "os. 1111-119# and 11#1, which were filed b. the (overn+ent to 2uestion the ownership and interests of the late 5resident in real and personal properties located within and outside the 5hilippines. 5etitioner, however, o+its to alle(e whether the properties levied upon b. the ,-* in the collection of estate taes upon the decedent>s estate were a+on( those involved in the said cases pendin( in the 'andi(anba.an. -ndeed, the court is at a loss as to how these cases are relevant to the +atter at issue. The +ere fact that the decedent has pendin( cases involvin( ill-(otten wealth does not affect the enforce+ent of ta assess+ents over the properties indubitabl. included in his estate. -ssue; -s the contention of @arcos correctM )eld; "o. The approval of the court, sittin( in probate or as a settle+ent tribunal over the deceasedNs estate, is not a +andator. re2uire+ent in the collection of estate taes. There is nothin( in the Ta Code, and in the pertinent re+edial laws that i+plies the necessit. of the probate or estate settle+ent court>s approval of the state>s clai+ for estate taes, before the sa+e can be enforced and collected. The enforce+ent of ta laws and the collection of taes are of para+ount i+portance for the sustenance of (overn+ent. Taes are the lifeblood of (overn+ent and should be collected without unnecessar. hindrance. )owever, such collection should be +ade in accordance with law as an. arbitrariness will ne(ate the eistence of (overn+ent itself. -t is not the Depart+ent of 4ustice which is the (overn+ent a(enc. tas8ed to deter+ine the a+ount of taes due upon the sub?ect estate, but the ,ureau of -nternal *evenue whose deter+inations and assess+ents are presu+ed correct and +ade in (ood faith. The tapa.er has the dut. of provin( otherwise. -n the absence of proof of an. irre(ularities in the perfor+ance of official duties, an assess+ent will not be disturbed. =ven an assess+ent based on esti+ates is prima facie valid and lawful where it does not appear to have been arrived at arbitraril. or capriciousl.. The burden of proof is upon the co+plainin( part. to show clearl. that the assess+ent is erroneous. 0ailure to present proof of error in the assess+ent will ?ustif. the ?udicial affir+ance of said assess+ent. -n this instance, petitioner has not pointed out one sin(le provision in the @e+orandu+ of the 'pecial !udit Tea+ which (ave rise to the 2uestioned assess+ent, which bears a trace of falsit.. -ndeed, the petitioner>s attac8 on the assess+ent bears +ainl. on the alle(ed i+probable and unconscionable a+ount of the taes char(ed. ,ut +ere rhetoric cannot suppl. the basis for the char(e of i+propriet. of the assess+ents +ade.7 *epublic of the 5hilippines SUPRE*E COURT @anila =" ,!"C G.R. No. L-182,3 J"#u"1y 12, 193, C. N. (ODGES, petitioner-appellee, vs. T(E *UNICIPAL )OARD O T(E CIT8 O ILOILO< (o#o1"0l' Ro$ol5o G"#=o#, 6# &64 7"."76%y "4 C6%y *"yo1 o5 %&' C6%y o5 Ilo6lo< "#$ %&' CIT8 O ILOILO, respondents-appellants. Cit* 1iscal 1. +. Consolacion and 0ssistant Cit* 1iscal 2. I. Soriano, !r. for respondents-appellants. Leon . $ellada and 4orberto !. osecion for petitioner- appellee. "-aeta, $ibbs & "-aeta for administrator CI %an.. CASTRO, J.: The respondents, on appeal b. writ of error, as8 3s to review a ?ud(+ent of the Court of 0irst, -nstance of -loilo, in an action for declarator. relief, annullin( ordinance 91, series of 1961, of the Cit. of -loilo and orderin( the said Cit. to rei+burse to the petitioner C. ". )od(es whatever a+ounts he had paid to the for+er b. reason of the operation of the ordinance. The parties are a(reed on the antecedent facts. On 4une :, 1961, invo8in( *epublic !ct 226#, otherwise 8nown as the %ocal !utono+. !ct, the +unicipal board of the Cit. of -loilo enacted ordinance 91, entitled $!n Ordinance -+posin( @unicipal Ta On The 'ale of *eal 5ropert. 'ituated -n The Cit. of -loilo$, which ordains that $!n. person, fir+, association or corporation who shall sell real propert. situated in the Cit. of -loilo shall pa. a real propert. sales ta of one-half 6O7 of one percent 61J7 of the contract price andCor consideration before such sale could be re(istered and the ownership thereof transferred in the Office of the *e(ister of Deeds of -loilo$ 6section 17 -t is therein epressl. provided that the ta is to be paid to the cit. treasurer $within five 6A7 da.s fro+ the sale$, sub?ect to the pa.+ent of a surchar(e of 21J of the ta due in case of default, and such pa.+ent, the receipt whereof is +ade part of the docu+ents on the sale, $shall be a re2uire+ent for the re(istration ... of the sale in the Office of the *e(ister of Deeds or the Office of the Cit. Treasurer of the Cit. of -loilo$ 6sections 9 and #7. 5enal sanction consistin( of a fine of not less than fift. pesos 65A17 nor +ore than two hundred pesos 652117 or i+prison+ent of not less than five 6A7 da.s nor +ore than thirt. 6917 da.s, at the discretion of the court, is prescribed for an. infraction of the said ordinance 6section :7. ,. its ter+s, the ordinance too8 effect on 4ul. 1, 1961. The petitioner C. ". )od(es, who was en(a(ed in the business of bu.in( and sellin( real estate in the cit. and the 5rovince of -loilo, stood to be sub?ected to the ta thus i+posed. Contendin( that the ordinance was be.ond the corporate powers of the respondent Cit., he instituted on 4une 28, 1961 B prior to the effectivit. date of the ordinance B an action for declarator. relief to test the validit. thereof. @eanwhile after the ordinance beca+e effective, the petitioner paid taes i+posed under the authorit. thereof upon sales of real estate +ade b. hi+. )e accordin(l. a+ended his petition to include the Cit. itself as a part.-respondent, as well as to incorporate therein a pra.er for the rei+burse+ent to hi+ of the a+ounts thus far paid b. hi+ pursuant to the ordinance. -n their return to the petition, the respondents ?ustified the enact+ent of the ordinance not onl. under the cit. charter but also upon the authorit. vested in the respondent Cit. b. section 2 of the %ocal !utono+. !ct. ,. wa. of special defense, the. contended that the petition states no cause of action for declarator. relief. 'ubscribin( to the position assu+ed b. the petitioner, the trial court ruled as heretofore stated. )ence, the present recourse. The preli+inar. procedural issue of non-ehaustion of ad+inistrative re+edies is raised b. the appellants, but the verte of the present controvers. is whether or not the 2uestioned ordinance is ultra vires views vis-a- vis the corporate powers of the appellant Cit.. 1. On the preli+inar. issue, the appellants ar(ue that the court a 5uo ac2uired no ?urisdiction over the case because the appellee failed to ehaust ad+inistrative re+edies, +ore particularl. that indicated in the penulti+ate and last para(raphs of section 2 of the %ocal !utono+. !ct, to wit; ! ta ordinance shall (o into effect on the fifteenth da. after its passa(e, unless the ordinance shall provide otherwise; rovided, #o&ever, That the 'ecretar. of 0inance shall have authorit. to suspend the effectivit. of an. ordinance within one hundred and twent. da.s after its passa(e, if, in his opinion, the ta or fee therein levied or i+posed is un?ust, ecessive oppressive or confiscator., and when, the said secretar. eercises this authorit. the effectivit. of such ordinance shall be suspended. -n such event the +unicipal board or cit. council in the case of cities and the +unicipal council or +unicipal district council in the case of +unicipalities and +unicipal districts +a. appeal the decision of the 'ecretar. of 0inance to the court durin( the pendenc. of which case the ta levied shall be considered as paid under protest. "othin( in the fore(oin( 2uotation even re+otel. applies to the situation at hand. The authorit. vested in the 'ecretar. of 0inance to suspend the effectivit. of a ta ordinance is li+ited to cases wherein the ta or fee thereb. levied is $un?ust, ecessive, oppressive or confiscator.$. "owhere in the pleadin(s below was the ta i+posed b. the 2uestioned ordinance challen(ed b. the appellee upon an. of these specific bases. )e chose to prosecute his case upon the (round that the ordinance was be.ond the corporate powers of the appellant Cit. to enact. This is a purel. le(al 2uestion/ no relief of an ad+inistrative nature is or would have been available to the appellee fro+ the 'ecretar. of 0inance 65ascual vs. 5rovincial ,oard of "ueva =ci?a, G.*. %-119A9, October 91, 19A9/ citin(, @ondaPo vs. 'ilvosa, A1 Off. Ga&., p. 288#7. ,esides, it does not appear fro+ the afore2uoted le(al precept that it is the +andator. dut. of a part. adversel. affected, assu+in( that the +atter co+es within the purview of the law, to invo8e the suspension authorit. of the 'ecretar. of 0inance. The said 'ecretar., fro+ the tet of the law, +a. eercise the prero(ative vested in hi+ upon his own initiative, i.e $if, in his opinion$ the ta or fee levied suffers fro+ an. of the infir+ities enu+erated. !ccordin(l., it cannot be said that recourse to the 'ecretar. of 0inance is a prere2uisite to an action in court. !nd the rule re2uirin( ehaustion of ad+inistrative re+edies applies onl. $when there is an epress le(al provision re2uirin( ehaustion of ad+inistrative step as a condition precedent to ta8in( action in court$ 6!&uelo vs. !rnaldo, et al., A8 O.G., "o. 26, pp. #:98, #:#17. !t all events, even assu+in( that the recourse indicated b. the appellants were indeed a re2uire+ent, the sa+e does not appear to be eclusive. -t is discretionar. upon the court to per+it an a((rieved part. to institute a court action without first resortin( to an ad+inistrative re+ed. for the purpose 6)os8.ns vs. "ational Cit. ,an8 of "ew Lor8, et al., 8A 5hil. 2117. 0indin(, as <e do, after readin( the record, that there eists here a ?usticiable controvers. between real parties assertin( adverse le(al interests which is ripe for ?udicial deter+ination 6Calte 5hilippines, -nc. vs. 5alo+ar, G.*. %-196A1, 'epte+ber 29, 19667, the recourse to the courts was in no wa. pre+ature. There is, therefore, no roo+ for the application of the doctrine of ehaustion of ad+inistrative re+edies to the case at bar. 5rescindin( fro+ the fore(oin(, it see+s necessar. to correct the i+pression of the appellants that failure to ehaust ad+inistrative re+edies (oes into the ?urisdiction of the trial court. The fact of the +atter is that such discrepanc., if an., +erel. i+plies absence of a cause of action 65ineda vs. Court of 0irst -nstance of Davao, et al., A9 O.G., "o. 99, pp. A266, A2:1/ !tlas Consolidated @inin( and Develop+ent Corporation vs. @endo&a, et al., A9 O.G., "o. 11, pp. 1:29, 1:997. This point speciall. ac2uires pertinence when it is noted that while the appellants set up in their answer the defense of want of a cause of action, the sa+e was based upon the alle(ed ineistence of a ?usticiable controvers.. The absence of a cause of action upon the (round of non- ehaustion of ad+inistrative re+edies does not appear to have been posed in issue below. -t is thus li8ewise too late to invo8e it at this sta(e. )ence, the result stands the sa+e. 2. "o special difficult. attends the resolution of, the +ain issue. )eretofore, <e have announced the doctrine that the (rant of the power to ta to chartered cities under section 2 of the %ocal !utono+. !ct is sufficientl. plenar. to cover $ever*t#ing, eceptin( those which are +ention$ therein, sub?ect onl. to the li+itation that the ta so levied is for $public purposes, ?ust and unifor+$ 6"in ,a. @inin( Co+pan. vs. @unicipalit. of *oas, 5rovince of 5alawan G.*. %-2112A, 4ul. 21, 196A7. There is no showin(, and <e do not believe it is possible to show, that the ta levied, called b. an. na+e B percenta(e ta or sales ta B co+es under an. of the specific eceptions listed in section 2 of the %ocal !utono+. !ct. "ot bein( ecepted, it +ust be re(arded as co+in( within the purview of the (eneral rule. !s the +ai+ (oes, 2xceptio firmat regulam in casibus non exceptis$. 'ince its public purpose, ?ustness and unifor+it. of application are not disputed, the ta so levied +ust be sustained as valid. "or is this without precedent. On all fours to the case at bar is C.". )od(es vs. The @unicipal ,oard of the Cit. of -loilo, et al., G.*. %- 18129, 4anuar. 91, 1969, which, si(nificantl. enou(h, not onl. involved the sa+e parties but as well concerned another ordinance of the appellant Cit., ordinance 99, series of 1961, enacted barel. si da.s after the enact+ent of the ordinance now under scrutin., that is, on 4une 19, 1961. Ordinance 99, si+ilar to the one now in controvers., levied as sales ta of one- half 6O7 of one percent 61J7 of the sellin( price of an. +otor vehicle sold in the Cit. of -loilo, i+posin( the pa.+ent of the said ta as a condition to the re(istration of the sale in the @otor Hehicles Office as well as the transfer of ownership of the vehicle sold. -n an action si+ilar to the case at bar, the appellee herein, invo8in( (rounds and advancin( ar(u+ents si+ilar to those herein relied upon, also challen(ed the validit. of the ordinance. 3pholdin( the validit. thereof and affir+in( the corporate power of the appellant Cit. to enact the sa+e, this Court +ade the followin( pronounce+ent; 1 -t would appear that the Cit. of -loilo, thru its +unicipal board, is e+powered 6a7 to i+pose +unicipal licenses, taes or fees upon an. person en(a(ed in an. occupation or business, or eercisin( an. privile(e, in the cit./ 6b7 to re(ulate and i+pose reasonable fees for services rendered in connection with an. business, profession or occupation conducted within the cit./ and 6c7 to lev. for public purposes ?ust and unifor+ taes, licenses and fees. -t would also appear that +unicipalities and +unicipal districts are prohibited fro+ i+posin( an. percenta(e ta on sales, or other taes in an. for+ on articles sub?ect to specific ta, ecept (asoline, under the provisions of the "ational -nternal *evenue Code. 0ro+ a cursor. anal.sis of the provisions above- stated <e can readil. draw the conclusion that the Cit. of -loilo has the authorit. and power to approve the ordinance in 2uestion for it +erel. i+poses a percenta(e ta on the sale of a second-hand +otor vehicle that +a. be carried out within the cit. b. an. person, fir+, association or corporation ownin( or dealin( with it who +a. co+e within its ?urisdiction. -ndeed, it cannot be disputed that a sales ta of O of 1J of the sellin( price of a second-hand +otor vehicle co+es within the purview of the provisions of 'ection 2 of *epublic !ct 226#. -t is true that the ta in 2uestion is in the for+ of a percenta(e ta on the proceeds of the sale of a second-hand +otor vehicle which co+es within the prohibition of the section above adverted to/ but the prohibition onl. refers to +unicipalities and +unicipal districts and does not co+prehend chartered cities as the Cit. of -loilo. <e perceive no overridin( reason to depart fro+ the doctrine thus laid down. 9. The 2uestioned ordinance, however, does +ore than +erel. lev. a ta. -t co++ands that $The pa.+ent of this +unicipal ta shall be a re2uire+ent for the re(istration ... of said sale in the Office of the *e(ister of Deeds or the Office of the Cit. Treasurer of the Cit. of -loilo$ and, for purposes of which, de+ands that $the ta receipt shall be +ade a part of the docu+ents to be presented for re(istration$ 6section 97. Challen(in( this re2uire+ent, the appellee contended and the trial court a(reed that, in effect, it i+poses a condition to the re(istration of the deed of conve.ance not otherwise called for b. the (eneral statutor. law on the +atter and, to that etent, a+ounts to a+endin( or +odif.in( the applicable statute, which, it is ar(ued, is not within the co+petence of the appellant +unicipal board of -loilo Cit. to do. -n the C.". )od(es vs. The @unicipal ,oard of the Cit. of -loilo case hereinbefore cited, this Court confronted with a si+ilar 2uestion in so far as the re(istration of vehicles under the ordinance there involved was concerned, too8 the view that the i+position of the pa.+ent of the ta levied as a prere2uisite to the re(istration of the sale in the @otor Hehicles Office was $+erel. a coercive +easure to +a8e the enforce+ent of the conte+plated sales ta +ore effective$ and, accordin(l., sustained the sa+e under the principle of i+plication, that is, that bein( a +easure reasonabl. necessar. to carr. out the power epressl. (ranted, it was considered i+pliedl. included in the (rant of the epress power. )owever, after carefull. re-ea+inin( the rulin( thus enunciated, <e are persuaded to sa. that, while <e find no cause to doubt the validit. there of as a (eneral principle, the sa+e cannot b. an. +eans be re(arded as a hard-and-fast rule. !pplied to specific cases, the broad sweep thereof +ust be li+ited or 2ualified dependin( upon the particular attendant circu+stances. !nd <e declare that the (eneralit. of the rule +a. not prevail when, in its application, it runs counter to or tends to i+pair a specific le(al +andate of a superior authorit.. 5ut another wa., the rule should be that the appellant +unicipal board +a. resort to all +eans reasonabl. necessar. and proper to (ive effect to the powers epressl. conferred upon it, provided, however, that said +eans are not otherwise contrar. to an. statutor. or other +ore authoritative provision on the sub?ect. The re(istration with the re(istr. of deeds of voluntar. conve.ances of real propert. under the Torrens s.ste+ is, in this ?urisdiction, +ainl. controlled b. the %and *e(istration !ct, !ct #96, as a+ended. !+on(st others, this statute provides that $... The act of re(istration shall be the operative act to conve. and affect the land, and in all cases under this !ct the re(istration shall be +ade in the office of the re(ister of deeds for the province or provinces or cit. where the land lies$ 6section A17. The re2uire+ents for deeds or other voluntar. instru+ents of conve.ance to be re(istrable thereunder are specified in the law 6section A#7 and, for purposes of re(istration, $The production of the owner>s duplicate certificate whenever an. voluntar. instru+ent is presented for re(istration shall be conclusive authorit. fro+ the re(istered owner to the re(ister of deeds to enter a new certificate or to +a8e a +e+orandu+ of re(istration in accordance with such instru+ent, and the new certificate or +e+orandu+ $shall be bindin( upon the re(istered owner and upon all persons clai+in( under hi+, in favor of ever. purchaser for value and in (ood faith ...$ 6section AA, par. 27. The schedule of fees to be paid upon such re(istration is li8ewise therein set forth 6section 11#, sub-section C, as a+ended b. *epublic !ct 9287. -n addition, *epublic !ct #A6 also re2uires that $"o voluntar. docu+ent b. which real propert. or an interest therein is sold, transferred, assi(ned, +ort(a(ed or leased shall be re(istered in the re(istr. of propert., unless the real estate taes levied and actuall. due thereon shall have been full. paid$ 6section 17/ and, that $=ver. docu+ent of transfer or alienation of real propert. filed with the *e(ister of Deeds shall be acco+panied with an etra cop. of the sa+e which cop. shall be trans+itted b. said officer to the cit. or provincial assessor ... 6section 27. !s it thus results, the %e(islature appears to have specified the +ini+u+ re2uire+ents for the re(istration of conve.ances of real propert.. 3pon satisfaction of the said re2uire+ents, it beco+es the le(al dut. of the re(istrar to +a8e the re(istration re2uested. "o entit., it see+s clear enou(h, ecept the %e(islature itself, +a. add to or detract fro+ or otherwise alter or a+end the re2uire+ents it has so enu+erated B and then onl. b. the correspondin( a+end+ent of the eistin( statutes or the enact+ent of new ones. -n this posture, to sanction the condition to re(istration i+posed b. the ordinance under ea+ination would virtuall. allow the appellant +unicipal board to add new re2uire+ents for re(istration not otherwise provided b. applicable statutor. law on the +atter. -n effect, it (ives power to the said appellant to a+end or +odif. the law B a power which, definitel., is not vested in it. <e therefore conclude that the condition thus i+posed b. the ordinance in 2uestion is ultra vires. Considerin( that this portion is severable fro+ the rest of the provisions thereof without affectin( the inte(rit. of the re+ainin( portions as a co+plete set of provisions on the +atter standin( b. the+selves, the sa+e +a. properl. be nullified while the rest of the ordinance not otherwise infir+ +a. be sustained. -n passin(, it should be understood that to the etent that this rule conflicts with that laid down in C. ". )od(es vs. The @unicipal ,oard of the Cit. of -loilo, G.*. "o. %-18129, 4anuar. 91, 1969, the latter +ust be ta8en to be pro tanto so 2ualified. !ccordin(l., the ?ud(+ent a 5uo is hereb. +odified in the sense that Ordinance 91, series of 1961, of the Cit. of -loilo, is declared valid as bein( within the corporate powers of the said Cit. to adopt, with the eception of the portion thereof which prescribes pa.+ent of the ta therein levied as a re2uire+ent for the transfer of ownership and the re(istration of the sale in the office of the *e(ister of Deeds, in reference to which the ?ud(+ent appealed fro+ is hereb. affir+ed. "o costs. Concepcion, C.!., +e*es, !.%.L., ,i-on, +egala, Ma.alintal, %eng-on, !.., /aldivar and Sanc#e-, !!., concur. oo%#o%'4 1 'ee also; The Cit. of ,acolod, etc. vs. Gruet etc., G.*. %-18291, 4anuar. 91, 1969. !bra Halle. Colle(e vs !2uino 6G.*. "o. %-991867 5osted; 4ul. 2A, 2111 in C"4' D6>'4%4 0 ACTS: 5etitioner, an educational corporation and institution of hi(her learnin( dul. incorporated with the 'ecurities and =chan(e Co++ission in 19#8, filed a co+plaint to annul and declare void the Q"otice of 'ei&ureN and the Q"otice of 'aleR of its lot and buildin( located at ,an(ued, !bra, for non-pa.+ent of real estate taes and penalties a+ountin( to 5A,1#1.91. 'aid Q"otice of 'ei&ureR b. respondents @unicipal Treasurer and 5rovincial Treasurer, defendants below, was issued for the satisfaction of the said taes thereon. The parties entered into a stipulation of facts adopted and e+bodied b. the trial court in its 2uestioned decision. The trial court ruled for the (overn+ent, holdin( that the second floor of the buildin( is bein( used b. the director for residential purposes and that the (round floor used and rented b. "orthern @ar8etin( Corporation, a co++ercial establish+ent, and thus the propert. is not bein( used eclusivel. for educational purposes. -nstead of perfectin( an appeal, petitioner availed of the instant petition for review on certiorari with pra.er for preli+inar. in?unction before the 'upre+e Court, b. filin( said petition on 1: !u(ust 19:#. ISSUE: <hether or not the lot and buildin( are used eclusivel. for educational purposes. (ELD: 'ection 22, para(raph 9, !rticle H-, of the then 199A 5hilippine Constitution, epressl. (rants ee+ption fro+ realt. taes for ce+eteries, churches and parsona(es or convents appurtenant thereto, and all lands, buildin(s, and i+prove+ents used eclusivel. for reli(ious, charitable or educational purposes. *easonable e+phasis has alwa.s been +ade that the ee+ption etends to facilities which are incidental to and reasonabl. necessar. for the acco+plish+ent of the +ain purposes. The use of the school buildin( or lot for co++ercial purposes is neither conte+plated b. law, nor b. ?urisprudence. -n the case at bar, the lease of the first floor of the buildin( to the "orthern @ar8etin( Corporation cannot b. an. stretch of the i+a(ination be considered incidental to the purpose of education. The test of ee+ption fro+ taation is the use of the propert. for purposes +entioned in the Constitution. GASTON ;4 REPU)LIC PLANTERS "7%4: 5etitioners are su(ar producers and planters and +illers filed a @!"D!@3' to i+ple+ent the privati&ation of *epublic 5lanters ,an8, and for the transfer of the shares in the (overn+ent ban8 to su(ar producers and planters. 6because the. are alle(edl. the true beneficial owners of the ban8 since the. pa. 51.11 per picul of su(ar fro+ the proceeds of su(ar producers as 'T!,-%-S!T-O" 0=='7 The shares are currentl. held b. 5hilsuco+ C 'u(ar *e(ulator. !d+in. The 'ol(en countered that the stabili&ation fees are considered (overn+ent funds and that the transfer of shares to fro+ 5hilsuco+ to the su(ar producers would be irre(ular. I44u'; <hat is the nature of the 51.11 stabili&ation fees collected fro+ su(ar producersM !re the. funds held in trust for the+, or are the. public fundsM !re the shares in the ban8 6paid usin( these fees7 owned b. the (overn+ent 5hilsuco+ or privatel. b. the different su(ar planters fro+ who+ such fees were collectedM ('l$; 53,%-C 03"D'. <hile it is true that the collected fees were used to bu. shares in *5,, it did not collect said fees for the account of su(ar producers. The stabili&ation fees were char(ed on su(ar produced and +illed which !CC*3=D TO 5)-%'3CO@, under 5D 998. The fees collected !*= -" T)= "!T3*= O0 ! T!T., which is within the power of the state to i+pose 0O* T)= 5*O@OT-O" O0 T)= '3G!* -"D3'T*L. The. constitute su(ar liens. The collections accrue to a '5=C-!% 03"D'. -t is levied not purel. for taation, but for re(ulation, to provide +eans TO 'T!,-%-S= T)= '3G!* -"D3'T*L. The lev. is pri+aril. an eercise of police powers. The fact that the 'tate has ta8en +one. pursuant to law is sufficient to constitute the+ as 'T!T= 03"D', even thou(h held for a special purpose. )avin( been levied for a special purpose, the revenues are treated as a special fund, ad+inistered in trust for the purpose intended. Once the purpose has been fulfilled or abandoned, the balance will be transferred to the (eneral funds of (ovNt. -t is a special fund since the funds are deposited in 5",, not in the "ational Treasur.. The su(ar planters are "OT ,="=0-C-!% O<"=*'. The +one. is collected fro+ the+ onl. because the. it is also the. who are to be benefited fro+ the ependiture of funds derived fro+ it. The investin( of the funds in *5, is not alien to the purpose since the ,an8 is aco++odit. ban8 for su(ar, conceived for the su(ar industr.N (rowth and develop+ent. *evenues derived fro+ taes cannot be used purel. for private purposes or for the eclusive benefit of private persons. The 'tabili&ation 0und is to be utili&ed for the benefit of the ="T-*= '3G!* -"D3'T*L, and all its co+ponents, stabili&ation of do+esticand forei(n +ar8ets, since the su(ar industr. is of vital i+portance to the countr.Ns econo+. and national interest. LUTZ VS ARANETA "7%4: Co++onwealth !ct "o. A6:, otherwise 8nown as 'u(ar !d?ust+ent !ct was pro+ul(ated in 19#1 Qto stabili&e the su(ar industr. so as to prepare it for the eventualit. of the loss of its preferential position in the 3nited 'tates +ar8et and the i+position of eport taes.R 5laintiff, <alter %ut&, in his capacit. as 4udicial !d+inistrator of the -ntestate =state of !ntonio 4a.+e %edes+a, see8s to recover fro+ the Collector of -nternal *evenue the su+ of 51#,666.#1 paid b. the estate as taes, under 'ec.9 of the !ct, alle(in( that such ta is unconstitutional and void, bein( levied for the aid and support of the su(ar industr. eclusivel., which in plaintiffNs opinion is not a public purpose for which a ta +a. be constitutionall. levied. The action has been dis+issed b. the Court of 0irst -nstance. I44u': <hether or not the ta i+posed is constitutional. ('l$: Les. The act is pri+aril. an eercise of the police power. -t is shown in the !ct that the ta is levied with a re(ulator. purpose, to provide +eans for the rehabilitation and stabili&ation of the threatened su(ar industr.. -t is inherent in the power to ta that a state be free to select thesub?ects of taation, and it has been repeatedl. held that Qine2ualities which result fro+ a sin(lin( out of one particular class for taation or ee+ption infrin(e no constitutional li+itation.R The funds raised under the !ct should be eclusivel. spent in aid of the su(ar industr., since it is that ver. enterprise that is bein( protected. -t +a. be that other industries are also in need of si+ilar protection/ but the le(islature is not re2uired b. the Constitution to adhere to a polic. of Qall or none.R Ro?"4 ;4. CTA GR No. L-220-3 @ A.16l 23, 1938 "7%4: U Don 5edro *oas and Dona Car+en !.ala, both 'panish, trans+itted to their (randchildren b. hereditar. succession the followin( properties; a. !(ricultural lands with a total area of 19,111 hectares in "asu(bu, ,atan(as - Tenants who have been tillin( the lands epressed their desire to purchase fro+ *oas . Cia, the parcels which the. actuall. occupied - The (ovt, in line with the constitutional +andate to ac2uire bi( landed estates and apportion the+ a+on( landless tenants-far+ers, persuaded the *oas brothers to part with their landholdin(s - The brothers a(reed to sell 19,A11 hec to the (ovt for 52.1:9@n, plus 911F surve. and subdivision epenses - 3nfortunatel., the (ovt did not have funds - ! special arran(e+ent was +ade with the *ehabilitation 0inance Corporation to advance to *oas . Cia the a+ount of 51.A@n as loan - 3nder the arran(e+ent, *oas . Cia. allowed the far+ers to bu. the lands for the sa+e price but b. install+ent, and contracted with the *0C to pa. its loan fro+ the proceeds of the .earl. a+orti&ations paid b. the far+ers - -n 19A9 and 19AA, *oas . Cia. derived fro+ said install+ent pa.+ents a net (ain of 5#2,#81.89 and 529,A11.:1. A1J of said net (ain was reported for inco+e ta purposes as (ain on the sale of capital asset held for +ore than one .ear pursuant to 'ec. 9# of the Ta Code b. *esidential house and lot at <ri(ht 't., @alate, @anila - !fter the +arria(e of !ntonio and =duardo, 4ose lived in the house where he paid rentals of 8FC.ear to *oas . Cia c. 'hares of stoc8s in different corporations U To +ana(e the properties, !ntonio *oas, =duardo *oas and 4ose *oas, the children, for+ed a partnership called *oas . Co+pania U On 19A8, C-* de+anded fro+ *oas . Cia the pa.+ent of real estate dealer>s ta for 19A2 a+t( to 51A1.11 plus 511.11 co+pro+ise penalt. for late pa.+ent, and 51A1.11 ta for dealers of securities plus 511.11 co+pro+ise penalt. for late pa.+ent. - ,asis; house rentals received fro+ 4ose, pursuant to !rt. 19# of the Ta Code statin( that an o&ner of a real estate &#o derives a *earl* rental income t#erefrom in t#e amount of 6,777.77 or more is considered a real estate dealer and is liable to pa* t#e corresponding fixed tax U The Co++issioner further assessed deficienc. inco+e taes a(ainst the brothers for 19A9 and 19AA, resultin( fro+ the inclusion as inco+e of *oas . Cia of the unreported A1J of the net profits derived fro+ the sale of the "asu(bu far+ lands to the tenants, and the disallowance of deductions fro+ (ross inco+e of various business epenses and contributions clai+ed b. *oas . Cia and the *oas brothers U The brothers protested the assess+ent but was denied, thus appealin( to the CT! U CT! decision; sustained the assess+ent ecept the de+and for the pa.+ent of the fied ta on dealer of securities and the disallowance of the deductions for contributions to the 5hilippine !ir 0orce Chapel and )i?as de 4esus> *etiro de @anresa I44u': 'hould *oas . Cia be considered a real estate dealer because it en(a(ed in the business of sellin( real estate Rul6#>: "O, bein( an isolated transaction U R'"l '4%"%' $'"l'1; an. person en(a(ed in the business of bu.in(, sellin(, echan(in(, leasin( or rentin( propert. on his own account as principal and holdin( hi+self out as a full or part-ti+e dealer in real estate or as an o&ner of rental propert* or properties rented or offered to rent for an aggregate amount of t#ree t#ousand pesos or more a *ear; U 'ection 19# of the Ta Code, in considerin( as real estate dealers owners of real estate receivin( rentals of at least 59,111.11 a .ear, does not provide an. 2ualification as to the persons pa.in( the rentals U The fact that there were hundreds of vendees and the+ bein( paid for their respective holdin(s in install+ent for a period of ten .ears, it would nevertheless not +a8e the vendor *oas . Cia. a real estate dealer durin( the 11-.ear a+orti&ation period U the sale of the "asu(bu far+ lands to the ver. far+ers who tilled the+ for (enerations was not onl. in consonance with, but +ore in obedience to the re2uest and pursuant to the polic. of our Govern+ent to allocate lands to the landless U -t was the dut. of the Govern+ent to pa. the a(reed co+pensation after it had persuaded *oas . Cia. to sell its haciendas, and to subse2uentl. subdivide the+ a+on( the far+ers at ver. reasonable ter+s and prices. ,ut due to the lac8 of funds, *oas . Cia. shouldered the Govern+ent>s burden, went out of its wa. and sold lands directl. to the far+ers in the sa+e wa. and under the sa+e ter+s as would have been the case had the Govern+ent done it itself U The power of taation is so+eti+es called also the power to destro.. Therefore it should be eercised with caution to +ini+i&e in?ur. to the proprietar. ri(hts of a tapa.er. -t +ust be eercised fairl., e2uall. and unifor+l. U Therefore, *oas . Cia. cannot be considered a real estate dealer for the sale in 2uestion. )ence, pursuant to 'ection 9# of the Ta Code the lands sold to the far+ers are capital assets, and the (ain derived fro+ the sale thereof is capital (ain, taable onl. to the etent of A1J As to the deductions a. 5#1 tic8ets to a ban2uet (iven in honor of 'er(io Os+ena and 528 'an @i(uel beer (iven as (ifts to various persons V representation epenses U *epresentation epenses; deductible fro+ (ross inco+e as ependitures incurred in carr.in( on a trade or business U -n this case, the evidence does not show such lin8 between the epenses and the business of *oas . Cia b. Contributions to the 5asa. police and fire depart+ent and other police depart+ents as Christ+as funds U Contributions to the Christ+as funds are not deductible for the reason that the Christ+as funds were not spent for public purposes but as Christ+as (ifts to the fa+ilies of the +e+bers of said entities U 3nder 'ection 996h7, a contribution to a (overn+ent entit. is deductible when used eclusivel. for public purposes U !s to the contribution to the @anila 5olice trust fund, such is an allowable deduction for said trust fund belon(s to the @anila 5olice, a (overn+ent entit., intended to be used eclusivel. for its public functions. c. Contributions to the 5hilippines )erald>s fund for @anila>s neediest fa+ilies U The contributions were not +ade to the 5hilippines )erald but to a (roup of civic spirited citi&ens or(ani&ed b. the 5hilippines )erald solel. for charitable purposes U There is no 2uestion that the +e+bers of this (roup of citi&ens do not receive profits, for all the funds the. raised were for @anila>s neediest fa+ilies. 'uch a (roup of citi&ens +a. be classified as an association or(ani&ed eclusivel. for charitable purposes +entioned in 'ection 916h7 of the Ta Code d. Contribution to Our %ad. of 0ati+a chapel at the 0=3 U 3niversit. (ives dividends to its stoc8holders U %ocated within the pre+ises of the universit., the chapel in 2uestion has not been shown to belon( to the Catholic Church or an. reli(ious or(ani&ation U The contributions belon(s to the 0ar =astern 3niversit., contributions to which are not deductible under 'ection 916h7 of the Ta Code for the reason that the net inco+e of said universit. in?ures to the benefit of its stoc8holders "o deficienc. inco+e ta is due for 19A9 fro+ !ntonio *oas, =duardo *oas and 4ose *oas. 0or 19AA the. are liable to pa. deficienc. inco+e ta in the su+ of 5119.11, 591.11 and 5#9.11, respectivel. 'ison vs !ncheta GR No. L-29-31, 22 July 198- "7%4: 'ection 1 of ,5 ,l( 19A a+ended the Ta Code and petitioner !ntero @. 'ison, as tapa.er, alle(es that $he would be undul. discri+inated a(ainst b. the i+position of hi(her rates of ta upon his inco+e arisin( fro+ the eercise of his profession vis-a-vis those which are i+posed upon fied inco+e or salaried individual tapa.ers. )e characteri&es said provision as arbitrar. a+ountin( to class le(islation, oppressive and capricious in character. -t therefore violates both the e2ual protection and due process clauses of the Constitution as well asof the rule re2uirin( unifor+it. in taation. I44u': <hether or not the assailed provision violates the e2ual protection and due process clauses of the Constitution while also violatin( the rule that taes +ust be unifor+ and e2uitable. ('l$: The petition is without +erit. On due process - it is undoubted that it +a. be invo8ed where a tain( statute is so arbitrar. that it finds no support in the Constitution. !n obvious ea+ple is where it can be shown to a+ount to the confiscation of propert. fro+ abuse of power. 5etitioner alle(es arbitrariness but his +ere alle(ation does not suffice and there +ust be a factual foundation of such unconsitutional taint. On e2ual protection - it suffices that the laws operate e2uall. and unifor+l. on all persons under si+ilar circu+stances, both in the privile(es conferred and the liabilities i+posed. On the +atter that the rule of taation shall be unifor+ and e2uitable - this re2uire+ent is +et when the ta operates with the sa+e force and effect in ever. place where the sub?ect +a. be found.$ !lso, ;the rule of unifor+it. does not call for perfect unifor+it. or perfect e2ualit., because this is hardl. unattainable.$ <hen the proble+ of classification beca+e of issue, the Court said; $=2ualit. and unifor+it. in taation +eans that all taable articles or 8inds of propert. of the sa+e class shall be taed the sa+e rate. The tain( power has the authorit. to +a8e reasonable and natural classifications for purposes of taation...$ !s provided b. this Court, where $the differentation$ co+plained of $confor+s to the practical dictates of ?ustice and e2uit.$ it $is not discri+inator. within the +eanin( of this clause and is therefore unifor+.$ 5ascual v. 'ecretar. of 5ublic <or8s and Co++unications 6G.*. "o. %-11#1A7 5osted; 4ul. 2A, 2111 in C"4' D6>'4%4 0 ACTS: 5ascual, in his official capacit. as the 5rovincial Governor of *i&al, petitioned for a writ of certiorari a(ainst the dis+issal of the case and dissolvin( of the preli+inar. in?unction held b. the Court of the 0irst -nstance. 5etitioner pra.ed for that *! W921 be declared null and void, that the alle(ed Deed of Donation +ade b. Sulueta be declared unconstitutional. 5etitioner also pra.ed for an in?unction en?oinin( 'ecretar. of 5ublic <or8s and Co++unications, Director of 5ublic <or8s and )i(hwa.s and the disbursin( officers of the latter depart+ent fro+ +a8in( and securin( an. further release of funds for the said road pro?ect. *!W 921 contained an ite+ appropriatin( 58A,111.11 which the petitioner alle(ed that it was for the construction of roads i+provin( the private propert. of 4ose Suleta, a +e+ber of the 'enate. ISSUES: 1. <hether or not *! W 921 is unconstitutional. 2. <hether or not 5ascual has the le(al capacit. or to sue. (ELD: 1. *! W921 is unconstitutional because the Con(ress is without power to appropriate public revenue for an.thin( but public purpose. 2. 5ascual has the personalit. to sue as a tapa.er reco(ni&in( the ri(ht of the tapa.er to assail the constitutionalit. of a le(islation appropriatin( public funds. N"%6o#"l PoA'1 Co1.o1"%6o# BNAPOCORC ;4. P1o;6#7' o5 Al0"y B1990C 5ost under case di(ests, Taation at Tuesda., 0ebruar. 21, 2112 5osted b. 'chi&ophrenic @ind "7%4: "ewspapers published in @arch 1989 carried respondentsN 65rovince of !lba., !lba. Governor, !lba. 5rovincial Treasurer7 notice for auction sale of "!5OCO* properties 6buildin(s, +achines, and si+ilar i+prove+ents7 standin( on their Tiwi offices. The proceeds fro+ the sale were supposed to be applied to the real propert. taes "!5OCO* alle(edl. owed the !lba. provincial (overn+ent fro+ 4une 198# to @arch 198:. "!5OCO* opposed the sale, citin( *esolution "o. 1:-8: of the 0iscal -ncentives *eview ,oard 60-*,7, which stated QThat the ta and dut. ee+ption privile(es of the D"!5OCO*E, includin( those pertainin( to its do+estic purchases of petroleu+ and petroleu+ products, (ranted under the ter+s and conditions of Co++onwealth !ct "o. 121 6Creatin( the D"!5OCO*E, definin( its powers, ob?ectives and functions, and for other purposes7, as a+ended, are restored effective @arch 11, 198:.R "ote; several 0-*, *esolutions 6"os. 11-8A and 1-867 prior to this one purportedl. (ranted ta ee+ptions to "!5OCO* for certain periods The @e+orandu+ of the =ecutive 'ecretar., which provided, Q5ursuant to 'ections 1 6f7 and 2 6e7 of =ecutive Order "o. 99, series of 1986, 0-*, *esolution "o. 1:-8:, series of 198:, restorin(,sub?ect to certain conditions prescribed therein, the ta and dut. ee+ption privile(es of "5C as provided under Co++onwealth !ct "o. 121, as a+ended, effective @arch 11, 198:, is hereb. confir+ed and approved.R The Court issued a T*O on the auction sale. )owever, it appearsthe order did not reach the !lba. 5rovincial Govern+ent before the scheduled biddin(, so the event pushed throu(h. The 5rovince of !lba. was the hi(hest bidder. I44u': <hether or not the 0-*, issuances (rantin( ta ee+ption are an undue dele(ation of the tain( power and thus, unconstitutional ('l$: L='. 5D ::6, which created the 0-*,, provided that the ,oardNs power was +erel. to $reco++end to the 5resident of the 5hilippines and for reasons of co+patibilit. with the declared econo+ic polic., the withdrawal, +odification, revocation or suspension of the enforceabilit. of an. of the above-cited statutor. subsidies or ta ee+ption (rants, ecept those (ranted b. the Constitution.$ -t has no authorit. to i+pose taes or revo8e eistin( ones, which, after all, under the Constitution, onl. the le(islature +a. acco+plish. The 0-*, +a. onl. reco++end ta ee+ptions. ,. itself, it could not have validl. prescribed ee+ptions or restore taabilit.. )ence, as of 4une 11, 198# 6pro+ul(ation of 5D 19917, "!5OCO* had ceased to en?o. ta ee+ption privile(es. The fact that under =O 99, the 0-*, has been (iven the prero(ative to $restore ta andCor dut. ee+ptions withdrawn hereunder in whole or in part,$ and $i+pose conditions for ... ta andCor dut. ee+ption$ is of no +o+ent. Theseprovisions are prospective in character and can not affect the ,oard>s past acts. -t is to be stressed that the provincial (overn+ent of !lba. ad+its that as of @arch 11, 198: 6the date *esolution "o. 1:-8: was affir+ed b. the @e+orandu+ of the Office of the 5resident, dated October A, 198:7, "!5OCO*>s ee+ption had been validl. restored. <hat it 2uestions is "!5OCO*>s liabilit. in the interre(nu+ between 4une 11, 198#, the date its ta privile(es were withdrawn, and @arch 11, 198:, the date the. were purportedl. restored. To be sure, it ob?ects to =ecutive Order "o. 99 as alle(edl. a dele(ation of le(islative power, but onl. insofar as its 6"!5OCO*>s7 4une 11, 198# to @arch 11, 198: ta accu+ulation is concerned. <e therefore leave the issue of $dele(ation$ to the future and its constitutionalit. when the proper case arises. 0or the nonce, we leave =ecutive Order "o. 99 alone, and so also, its validit. as far as it (rants ta ee+ptions 6throu(h the 0-*,7 be(innin( Dece+ber 1:, 1986, the date of its pro+ul(ation. "!5OCO* +ust then be held liable for the stated intervenin( .ears. 'o it has been held;
The last issue to be resolved is whether or not the private-respondent is liable for the fied and deficienc. percenta(e taes in the a+ount of 59,12A.96 6i.e. for the period fro+ 4anuar. 1, 19#6 to 0ebruar. 29, 19#87 before the approval of its +unicipal franchises. !s aforestated, the franchises were approved b. the 5resident onl. on 0ebruar. 2#, 19#8. Therefore, before the said date, the private respondent was liable for the pa.+ent of percenta(e and fied taes as seller of li(ht, heat, and power which, as the petitioner clai+s, a+ounted to 59,12A.96. The le(islative franchise 6*.!. "o. 98#97 ee+pted the (rantee fro+ all 8inds of taes other than the 2J ta fro+ the date the ori(inal franchise was (ranted. The ee+ption, therefore, did not cover the period before the franchise was (ranted, i.e. before 0ebruar. 2#, 19#8. ... !ctuall., the 'tate has no reason to decr. the taation of "!5OCO*>s properties, as and b. wa. of real propert. taes. *eal propert. taes, after all, for+ part and parcel of the financin( apparatus of the Govern+ent in develop+ent and nation-buildin(, particularl. in the local (overn+ent level. To all intents and purposes, real propert. taes are funds ta8en b. the 'tate with one hand and (iven to the other. -n no +easure can the Govern+ent be said to have lost an.thin(. !s a rule, clai+s of ta ee+ption are construed stron(l. a(ainst the clai+ant. The. +ust also be shown to eist clearl. and cate(oricall., and supported b. clear le(al provisions. G.R. No. L--0-3 *"y 23, 1922 CENON S. CERVANTES, petitioner, vs. T(E AUDITOR GENERAL, respondent. Cenon Cervantes in #is o&n be#alf. "ffice of t#e Solicitor $eneral ompe*o ,ia- and Solicitor 1elix V. Ma.asiar for respondent. RE8ES, J.: This is a petition to review a decision of the !uditor General den.in( petitioner>s clai+ for 2uarters allowance as +ana(er of the "ational !baca and Other 0ibers Corporation, otherwise 8nown as the "!0CO. -t appears that petitioner was in 19#9 the +ana(er of the "!0CO with a salar. of 51A,111 a .ear. ,. a resolution of the ,oard of Directors of this corporation approved on 4anuar. 19 of that .ear, he was (ranted 2uarters allowance of not eceedin( 5#11 a +onth effective the first of that +onth. 'ub+itted the Control Co++ittee of the Govern+ent =nterprises Council for approval, the said resolution was on !u(ust 9, 19#9, disapproved b. the said Co++ittee on stren(ht of the reco++endation of the "!0CO auditor, concurred in b. the !uditor General, 617 that 2uarters allowance constituted additional co+pensation prohibited b. the charter of the "!0CO, which fies the salar. of the (eneral +ana(er thereof at the su+ not to eceed 51A,111 a .ear, and 627 that the precarious financial condition of the corporation did not warrant the (rantin( of such allowance. On @arch 16, 19#9, the petitioner as8ed the Control Co++ittee to reconsider its action and approve his clai+ for allowance for 4anuar. to 4une 1A, 19#9, a+ountin( to 51,6A1. The clai+ was a(ain referred b. the Control Co++ittee to the auditor General for co++ent. The latter, in turn referred it to the "!0CO auditor, who reaffir+ed his previous reco++endation and e+phasi&ed that the fact that the corporation>s finances had not i+proved. -n view of this, the auditor General also reiterated his previous opinion a(ainst the (rantin( of the petitioner>s clai+ and so infor+ed both the Control Co++ittee and the petitioner. ,ut as the petitioner insisted on his clai+ the !uditor General -nfor+ed hi+ on 4une 19, 19A1, of his refusal to +odif. his decision. )ence this petition for review. The "!0CO was created b. the Co++onwealth !ct "o. 992, approved on 4une 18, 1999, with a capital stoc8 of 521,111,111, A1 per cent of which was to be able to be subscribed b. the "ational Govern+ent and the re+ainder to be offered to provincial, +unicipal, and the cit. (overn+ents and to the (eneral public. The +ana(e+ent the corporation was vested in a board of directors of not +ore than A +e+bers appointed b. the president of the 5hilippines with the consent of the Co++ission on !ppoint+ents. ,ut the corporation was +ade sub?ect to the provisions of the corporation law in so far as the. were co+patible with the provisions of its charter and the purposes of which it was created and was to en?o. the (eneral powers +entioned in the corporation law in addition to those (ranted in its charter. The +e+bers of the board were to receive each a per diem of not to eceed 591 for each da. of +eetin( actuall. attended, ecept the chair+an of the board, who was to be at the sa+e ti+e the (eneral +ana(er of the corporation and to receive a salar. not to eceed 51A,111 per annu+. On October #, 19#6, *epublic !ct "o. A1 was approved authori&in( the 5resident of the 5hilippines, a+on( other thin(s, to effect such refor+s and chan(es in (overn+ent owned and controlled corporations for the purpose of pro+otin( si+plicit., econo+. and efficienc. in their operation 5ursuant to this authorit., the 5resident on October #, 19#:, pro+ul(ated =ecutive Order "o. 99 creatin( the Govern+ent =nterprises Council to be co+posed of the 5resident of the 5hilippines as chair+an, the 'ecretar. of Co++erce and -ndustr. as vice-chair+an, the chair+an of the board of directors and +ana(in( heads of all such corporations as e-officio +e+bers, and such additional +e+bers as the 5resident +i(ht appoint fro+ ti+e to ti+e with the consent of the Co++ission on !ppoint+ents. The council was to advise the 5resident in the ecercise of his power of supervision and control over these corporations and to for+ulate and adopt such polic. and +easures as +i(ht be necessar. to coordinate their functions and activities. The =ecutive Order also provided that the council was to have a Control Co++ittee co+posed of the 'ecretar. of Co++erce and -ndustr. as chair+an, a +e+ber to be desi(nated b. the 5resident fro+ a+on( the +e+bers of the council as vice-chair+an and the secretar. as ex- officio +e+ber, and with the power, a+on( others B 617 To supervise, for and under the direction of the 5resident, all the corporations owned or controlled b. the Govern+ent for the purpose of insurin( efficienc. and econo+. in their operations/ 627 To pass upon the pro(ra+ of activities and the .earl. bud(et of ependitures approved b. the respective ,oards of Directors of the said corporations/ and 697 To carr. out the policies and +easures for+ulated b. the Govern+ent =nterprises Council with the approval of the 5resident. 6'ec. 9, =ecutive Order "o. 99.7 <ith its controllin( stoc8 owned b. the Govern+ent and the power of appointin( its directors vested in the 5resident of the 5hilippines, there can be no 2uestion that the "!0CO is Govern+ent controlled corporation sub?ect to the provisions of *epublic !ct "o. A1 and the eecutive order 6"o. 997 pro+ul(ated in accordance therewith. Conse2uentl., it was also sub?ect to the powers of the Control Co++ittee created in said eecutive order, a+on( which is the power of supervision for the purpose of insurin( efficienc. and econo+. in the operations of the corporation and also the power to pass upon the pro(ra+ of activities and the .earl. bud(et of ependitures approved b. the board of directors. -t can hardl. be 2uestioned that under these powers the Control Co++ittee had the ri(ht to pass upon, and conse2uentl. to approve or disapprove, the resolution of the "!0CO board of directors (rantin( 2uarters allowance to the petitioners as such allowance necessaril. constitute an ite+ of ependiture in the corporation>s bud(et. That the Control Co++ittee had (ood (rounds for disapprovin( the resolution is also clear, for, as pointed out b. the !uditor General and the "!0CO auditor, the (rantin( of the allowance a+ounted to an ille(al increase of petitioner>s salar. be.ond the li+it fied in the corporate charter and was further+ore not ?ustified b. the precarious financial condition of the corporation. -t is ar(ued, however, that =ecutive Order "o. 99 is null and void, not onl. because it is based on a law that is unconstitutional as an ille(al dele(ation of le(islature power to eecutive, but also because it was pro+ul(ated be.ond the period of one .ear li+ited in said law. The second (round i(nores the rule that in the co+putation of the ti+e for doin( an act, the first da. is ecluded and the last da. included 6'ection 19 *ev. !d. Code.7 !s the act was approved on October #, 19#6, and the 5resident was (iven a period of one .ear within which to pro+ul(ate his eecutive order and that the order was in fact pro+ul(ated on October #, 19#:, it is obvious that under the above rule the said eecutive order was pro+ul(ated within the period (iven. !s to the first (round, the rule is that so lon( as the %e(islature $la.s down a polic. and a standard is established b. the statute$ there is no undue dele(ation. 611 !+. 4ur. 9A:7. *epublic !ct "o. A1 in authori&in( the 5resident of the 5hilippines, a+on( others, to +a8e refor+s and chan(es in (overn+ent-controlled corporations, la.s down a standard and polic. that the purpose shall be to +eet the ei(encies attendant upon the establish+ent of the free and independent (overn+ent of the 5hilippines and to pro+ote si+plicit., econo+. and efficienc. in their operations. The standard was set and the polic. fied. The 5resident had to carr. the +andate. This he did b. pro+ul(atin( the eecutive order in 2uestion which, tested b. the rule above cited, does not constitute an undue dele(ation of le(islative power. -t is also contended that the 2uarters allowance is not co+pensation and so the (rantin( of it to the petitioner b. the "!0CO board of directors does not contravene the provisions of the "!0CO charter that the salar. of the chair+an of said board who is also to be (eneral +ana(er shall not eceed 51A,111 per anu+. ,ut re(ardless of whether 2uarters allowance should be considered as co+pensation or not, the resolution of the board of the directors authori&in( pa.+ent thereof to the petitioner cannot be (iven effect since it was disapproved b. the Control Co++ittee in the eercise of powers (ranted to it b. =ecutive Order "o. 99. !nd in an. event, petitioner>s contention that 2uarters allowance is not co+pensation, a proposition on which !+erican authorities appear divided, cannot be insisted on behalf of officers and e+plo.ees wor8in( for the Govern+ent of the 5hilippines and its -nstru+entalities, includin(, naturall., (overn+ent-controlled corporations. This is so because =ecutive Order "o. 992 of 19#1, which prohibits the pa.+ent of additional co+pensation to those wor8in( for the Govern+ent and its -nstru+entalities, includin( (overn+ent-controlled corporations, was in 19#A a+ended b. =ecutive Order "o. :: b. epressl. ee+ptin( fro+ the prohibition the pa.+ent of 2uarters allowance $in favor of local (overn+ent officials and e+plo.ees entitled to this under eistin( law.$ The a+end+ent is a clear indication that 2uarters allowance was +eant to be included in the ter+ $additional co+pensation$, for otherwise the a+end+ent would not have epressl. ecepted it fro+ the prohibition. This bein( so, we hold that, for the purpose of the eecutive order ?ust +entioned, 2uarters allowance is considered additional co+pensation and, therefore, prohibited. -n view of the fore(oin(, the petition for review is dis+issed, with costs. CO@@-''-O"=* O0 -* H' C="T*!% %3SO" D*3G CO*5 G* 1#8A12 4une 26, 2116 !&cuna, 4.; 0!CT'; This is a petition for review under *ule #A of *ules of Court see8in( the nullification of C! decision (rantin( respondentNs clai+ for ta e2ual to the a+ount of the 21J that it etended to senior citi&ens on the latterNs purchases pursuant to 'enior Citi&ens !ct. *espondent deducted the total a+ount of 5hp219,::8 fro+ its (ross inco+e for the taable .ear 199A whereb. respondent did not pa. ta for that .ear reportin( a net loss of 5hp21,969 in its corporate inco+e ta. -n 1996, clai+in( that the 5hp219,::8 should be applied as a ta credit, respondent clai+ed for refund in the a+ount of 5hp1A1, 199. -''3=; <hether or not the 21J discount (ranted b. the respondent to 2ualified senior citi&ens +a. be clai+ed as ta credit or as deduction fro+ (ross salesM *3%-"G; QTa creditR is eplicitl. provided for in 'ec# of *! :#92. The discount (iven to 'enior citi&ens is a ta credit, not a deduction fro+ the (ross sales of the establish+ent concerned. The ta credit that is conte+plated under this !ct is a for+ of ?ust co+pensation, not a re+ed. for taes that were erroneousl. or ille(all. assessed and collected. -n the sa+e vein, prior pa.+ent of an. ta liabilit. is a pre-condition before a taable entit. can benefit fro+ ta credit. The credit +a. be availed of upon pa.+ent, if an.. <here there is no ta liabilit. or where a private establish+ent reports a net loss for the period, the ta credit can be availed of and carried over to the net taable .ear. 5=5'--CO%! ,OTT%-"G CO. O0 T)= 5)-%'., -"C. vs. @3"-C-5!%-TL O0 T!"!3!" 69 'C*! #61 G* "o. %-911A6, 0ebruar. 2:, 19:6 $%e(islative power to create political corporations for purposes of local self-(overn+ent carries with it the power to confer on such local (overn+ental a(encies the power to ta. 0!CT'; 5laintiff-appellant 5epsi-Cola co++enced a co+plaint with preli+inar. in?unction to declare 'ection 2 of *epublic !ct "o. 226#, otherwise 8nown as the %ocal !utono+. !ct, unconstitutional as an undue dele(ation of tain( authorit. as well as to declare Ordinances "os. 29 and 2: deno+inated as $+unicipal production ta$ of the @unicipalit. of Tanauan, %e.te, null and void. Ordinance 29 levies and collects fro+ soft drin8s producers and +anufacturers a ta of one-siteenth 61C167 of a centavo for ever. bottle of soft drin8 cor8ed, and Ordinance 2: levies and collects on soft drin8s produced or +anufactured within the territorial ?urisdiction of this +unicipalit. a ta of O"= C="T!HO 651.117 on each (allon 6128 fluid ounces, 3.'.7 of volu+e capacit.. !side fro+ the undue dele(ation of authorit., appellant contends that it allows double taation, and that the sub?ect ordinances are void for the. i+pose percenta(e or specific ta. -''3=; !re the contentions of the appellant tenableM )=%D; "o. On the issue of undue dele(ation of tain( power, it is settled that the power of taation is an essential and inherent attribute of soverei(nt., belon(in( as a +atter of ri(ht to ever. independent (overn+ent, without bein( epressl. conferred b. the people. -t is a power that is purel. le(islative and which the central le(islative bod. cannot dele(ate either to the eecutive or ?udicial depart+ent of the (overn+ent without infrin(in( upon the theor. of separation of powers. The eception, however, lies in the case of +unicipal corporations, to which, said theor. does not appl.. %e(islative powers +a. be dele(ated to local (overn+ents in respect of +atters of local concern. ,. necessar. i+plication, the le(islative power to create political corporations for purposes of local self- (overn+ent carries with it the power to confer on such local (overn+ental a(encies the power to ta. !lso, there is no validit. to the assertion that the dele(ated authorit. can be declared unconstitutional on the theor. of double taation. -t +ust be observed that the dele(atin( authorit. specifies the li+itations and enu+erates the taes over which local taation +a. not be eercised. The reason is that the 'tate has eclusivel. reserved the sa+e for its own prero(ative. @oreover, double taation, in (eneral, is not forbidden b. our funda+ental law, so that double taation beco+es obnoious onl. where the tapa.er is taed twice for the benefit of the sa+e (overn+ental entit. or b. the sa+e ?urisdiction for the sa+e purpose, but not in a case where one ta is i+posed b. the 'tate and the other b. the cit. or +unicipalit.. On the last issue raised, the ordinances do not parta8e of the nature of a percenta(e ta on sales, or other taes in an. for+ based thereon. The ta is levied on the produce 6whether sold or not7 and not on the sales. The volu+e capacit. of the tapa.er>s production of soft drin8s is considered solel. for purposes of deter+inin( the ta rate on the products, but there is not set ratio between the volu+e of sales and the a+ount of the ta.