UMALI vs.

ESTANISLAO May 29, 1992 DOCTRINE: (Not stated in the case, but inferred from how the court decided- caveat lector, guys) 1. Revenue rules and regulations cannot contradict or go against the law it seeks to implement. 2. When the law itself is clear with regard to its application, the courts nor administrative agencies should not interpret the law in a manner contrary to what the law provides. NATURE: Consolidated case seeking for the application of RA 7167 regarding income ta e ceptions PONENTE: !adilla, " FACTS: Congress enacted RA 7167, #A$ AC% A&"'(%)$* %+, -A()C !,R(.$A/ A$& A&&)%).$A/ ,0,1!%).$( A//.WA-/, %. )$&)2)&'A/( 3.R )$C.1, %A0 !'R!.(,( %. %+, !.2,R%4 %+R,(+./& /,2,/5 o !rovided income ta e ceptions6 for single individual or married individual 7udicially decreed as legally separated with no 8ualified dependents6 !9,::: 3or head of a family6 !1;,::: 3or married individual6 !1<,::: !rovided, %hat hus=and and wife electing to compute their income ta separately shall =e entitled to a personal e emption of !9,::: each. A married individual or a head of family shall =e allowed an additional e emption of !>,:::? o %he said Act was signed and approved =y the !resident on 19 &ecem=er 1991 and pu=lished on 1@ "anuary 199; in A1alayaA? a newspaper of general circulation. .n ;6 &ecem=er 1991, respondents promulgated Revenue Regulations $o. 1B9;, which provide that those seeking to o=tain e ceptions in RA 7167, are allowed to claim the following amount of e emption with respect to compensation pai on o! a"te! #an$a!% 1& 1''2. !etitioners now seek6 o to compel the Commissioner of )nternal Revenue to implement the mandate of Rep. Act 7167 ad7usting the personal and additional e emptions allowa=le to individuals for income ta purposes in regard to income earned or received in 1991, and o to en7oin the respondents from implementing Revenue Regulations $o. 1B9;? ISSUES: 1. When did Rep. Act 7167 take effect? upon its approval =y the !resident on 19 &ecem=er 1991 or on C: "anuary 199;, after fifteen D1>E days following its pu=lication on 1@ "anuary 199; in the A1alayaA newspaperF A"te! 1( a%s "!om p$)*ication& #an$a!% +,& 1''2. ;. DR,/,2A$%E &oes the said law covers or applies to compensation income earned or received during calendar year 1991. -ES. RATIO: 1. )n the case of %anada vs. %uvera we construed Article ; of the Civil Code and laid down the rule6 %he clause Aunless it is otherwise providedA refers to the date of effectivity and not to the re8uirement of pu=lication itself, which cannot in any event =e omitted. %his clause does not mean that the legislator may make the law effective immediately upon approval, or on any other date without its previous pu=lication. !u=lication is indispensa=le in every case, =ut the legislature may in its discretion provide that the usual fifteenBday period shall =e shortened or e tended. ;. A perusal of the sponsorship remarks of Congressman +ernando -. !ereG, Chairman of the +ouse Committee on Ways and 1eans, on +ouse -ill ;<97:, provides an indication of the intent of Congress in enacting Rep. Act 7167. %he -ill provides for increased personal additional e emptions to individuals in view of the higher standard of living. )t also limits the amount of income of individuals su=7ect to income ta to ena=le them to spend for =asic necessities and have more disposa=le income. )nflation has raised the =asic necessities and that it had =een three years since the last e emption ad7ustment in 19<6. INTENT OF T.E LA/

%he Court can not lose sight of the fact that these personal and additional e emptions are fi ed amounts to which an individual ta payer is entitled, as a means to cushion the devastating effects of high prices and a depreciated purchasing power of the currency. )n the end, it is the lowerBincome and the middleBincome groups of ta payers Dnot the highBincome ta payersE who stand to =enefit most from the increase of personal and additional e emptions provided for =y Rep. Act 7167. %o that e tent, t0e Act is a socia* *e1is*ation inten e to a**eviate in pa!t t0e p!esent economic p*i10t o" t0e *o2e! income ta3pa%e!s. )t is intended to remedy the inade8uacy of the heretofore e isting personal and additional e emptions for individual ta payers. EFFECTI4IT- OF T.E LA/ Rep. Act 5165 sa%s t0at t0e inc!ease pe!sona* e3emptions t0at it p!ovi es "o! s0a** )e avai*a)*e t0ence"o!t0& t0at is& a"te! Rep. Act 5165 s0a** 0ave )ecome e""ective. o %he increased e emptions are thus literally availa=le upon the filing of personal income ta returns which is, under the $ational )nternal Revenue Code, done not later than the 1>th day of April. o DOES NOT APPL- TO 1'', TA7: %he personal e emptions as increased =y Rep. Act 7167 cannot =e regarded as availa=le in respect of compensation income received during the 199: calendar year? the ta due in respect of said income had already accrued. To ma8e Rep. Act 5165 !e"e! )ac8 to income !eceive $!in1 1'', 2o$* !e9$i!e *an1$a1e e3p*icit*% !et!oactive in p$!po!t an e""ect APPLIES TO TA7 1''1 AND ON/ARD :RELE4ANT; %he e ceptions do not limit themselves to the years 199; and onward, =ut also apply to the ta es imposed in 1991. o T0e imp*ementin1 !e1$*ations co**i e "!onta**% 2it0 Section + o" Rep. Act 5165 20ic0 states t0at t0e stat$te <s0a** ta8e e""ect $pon its app!ova*.< o %o construe otherwise would result in Revenue Regulation $o. 1B9; postponing the availa=ility of the increased e emptions to 1 "anuaryB1> April 199C, and thus, literally defer the effectivity of Rep. Act 7167 to 1 "anuary 199C. %he o=7ective of the (ecretary of 3inance and the Commissioner of )nternal Revenue in postponing through Revenue Regulations $o. 1B9;,the legal effectivity of Rep. Act 7167 is entirely understanda=le Hloss of ta revenueI .O/E4ER& t0e *a2=ma8in1 a$t0o!it% 0as spo8en an t0e Co$!t cannot !e"$se to app*% t0e *a2ma8e!>s 2o! s.

DISPOSITI4E: (ections 1, C and > of Revenue Regulations $o. 1B9; which provide that the regulations shall take effect on compensation income earned or received from 1 "anuary 199; are here=y set aside. T0e% s0o$* ta8e e""ect on compensation income ea!ne o! !eceive "!om 1 #an$a!% 1''1. %he individual ta payers entitled to the increased e emptions on compensation income earned during calendar year 1991 who may have filed their income ta returns on or =efore 1> April 199; Dlater e tended to ;@ April 199;E without the =enefit of such increased e emptions, are entitled to the corresponding ta3 !e"$n s an ?o! c!e its.