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CASE DIGEST (Second Batch for July 20) Mactan Cebu Int’l Airport v Marcos Doctine: As a general rule, the

power to tax is an incident of sovereignty and is unlimited in its range, so that security against its abuse is to be found only in the responsibility of the legislature w/c imposes the tax. Since taxes are what we pay for civilized society, or are the lifeblood of the nation, the law frowns against exemptions from taxation and statutes granting tax exemptions are thus construed strictissimi juris against the taxpayers and liberally in favor of the taxing authority. A claim of exemption from tax payment must be clearly shown and based on language in the law too plain to be mistaken. Elsewise stated, TAXATION IS THE RULE, EXEMPTION THEREFROM IS THE EXCEPTION. However, if the grantee of the exemption is a political subdivision or instrumentality, the rigid rule of construction does not apply. But it may also be relevant to recall that the original reasons for the withdrawal of tax exemption privileges granted to GOCCs and all other units of Gov’t were that such privilege resulted in ser ious tax base erosion and distortions in the tax treatment of similarly situated enterprises. Facts: 1. Petitioner Mactan Cebu Internat’l Airport Authority (MCIAA) was created by virtue of RA 6958, mandated to “principally undertake the economical, efficient and effective control, management and supervision of the Mactan Internat’l Airport in the Province of Cebu and the Lahug Airport in Cebu City and such other airports as may be established in the Province of Cebu 2. Since the time of its creation, petitioner MCIAA enjoyed the privilege of exemption from payment of realty taxes in accordance with Section 14 of its Charter 3. In 1994, however, the OIC of Cebu City Treasurer demanded payment for realty taxes on several parcels of land belonging to the petitioner. 4. Petitioner objected to such demand for payment as baseless and unjustified, claiming in its favour the a. aforecited Section 14 of RA 6958 w/c exempts it from payment of realty taxes. b. that it is an instrumentality of the Gov’t performing Gov’tal functions, citing Section 133 of the Local Gov’t Code of 1991 w/c puts limitations on the taxing powers of local Gov’t units. Issue: Can the City of Cebu demand payment of realty taxes on several parcels of land belonging to the petitioner? Ruling: Yes. Since the last paragraph of Section 234 unequivocally withdrew, upon the effectivity of the LGC, exemptions from payment of real property taxes granted to natural or juridical persons, including Gov’t -owned or controlled corporations, except as provided in the said section, and the petitioner is, undoubtedly, a Gov’t-owned corporation, it necessarily follows that its exemption from such tax granted it in Section 14 of its Charter, R.A. No. 6958, has been withdrawn. The power to tax is the most effective instrument to raise needed revenues to finance and support myriad activities of LGUs. It may also be relevant to recall that the original reasons for the withdrawal of tax exemption privileges granted to GOCCs and all other units of Gov’t were that such privilege resulted in se rious tax base erosion and distortions in the tax treatment of similarly situated enterprises, and there was a need for these entities to share in the requirements of the development by paying the taxes and other charges due from them.

Pascual v Sec of Public Works Facts: 1. Pet questions the constitutionality of RA 920, entitled "An Act Appropriating Funds for Public Works", approved on June 20, 1953, contained, in section 1-C (a) thereof, an item of P85,000.00 "for the construction, reconstruction, repair, extension and improvement" of Pasig feeder road terminals, w/c was lobbied by Sen. Zulueta to the municipal council of Pasig and to w/c the senaor also donated 85K 2. At the time of the passage and approval of said Act, the aforementioned feeder roads were nothing but projected and planned subdivision roads, not yet constructed w/in Antonio Subd. (prop of resp Jose Zulueta, RP senator) and do not connect any Gov’t property or any important premises to the main highway 3. That, such, said donation violated the provision of our fundamental law prohibiting members of Congress from being directly or indirectly financially interested in any contract with the Gov’t, and, hence, is unconstitutional 4. RTC upheld the validity of the donation ruling that the same is a contract over w/c petitioner has no interest so he cannot question it. Issue: Constitutionality of RA 920 Ruling: Referring to the P85,000.00 appropriation for the projected feeder roads in question, the legality thereof depended upon whether said roads were public or private property when the bill, w/c, latter on, became Republic Act 920, was passed by Congress, or, when said bill was approved by the President and the disbursement of said sum became effective. Inasmuch as the land on w/c the projected feeder roads were to be constructed belonged then to respondent Zulueta, the result is that said appropriation sought a private purpose, and hence, was null and void. Decision of lower court reversed. Case remanded to lower court for proceedings not contrary to SC ruling.

Ruling: 1.Gaston vs. That the fees were collected from sugar producers. Respondent Philippine Sugar Commission (PHILSUCOM. . Petitioners. "administered in trust' for the purpose intended. No." a "Development and Stabilization Fund. to be. sugar producers. is to be transferred to the general funds of the Gov’t. whether the stabilization fees collected from sugar planters and millers pursuant to Section 7 of P. The collections made accrue to a "Special Fund. or public funds 2. in the language of the statute. filed w/SC a writ of mandamus commanding Republic Planters Bank to distribute the shares of Philsucom to sugar planters who are its true and beneficial owners as these were from deductions of P1. the revenues collected are to be treated as a special fund. the balance. 388 and that the stabilization fees collected are considered Gov’t funds under the Gov’t Auditing Code Issues: 1. and that the funds were channeled to the purchase of shares of stock in respondent Bank do not convert the funds into a trust fired for their benefit nor make them the beneficial owners of the shares so purchased. Once the purpose has been fulfilled or abandoned.D. Republic Planters Bank Doctrine: To rule in petitioners' favor would contravene the general principle that revenues derived from taxes cannot be use d for purely private purposes or for the exclusive benefit of private persons. Respondents argue that no trust results from Section 7 of P." The tax collected is not in a pure exercise of the taxing power. The stabilization fees collected are in the nature of a tax. No. to dispose of and convey its property and to distribute its assets. w/c is within the power of the State to impose for the promotion of the sugar industry. planters and millers. The levy is primarily in the exercise of the police power of the State." 3. Although said Executive Order abolished the PHILSUCOM. 2.00 oer picul from proceeds of sdaid sugar producers from 1978-79 4. to provide means for the stabilization of the sugar industry. 388 are funds in trust for them. It is levied with a regulatory purpose. NO. whether shares of stock in respondent Bank paid for with said stabilization fees belong to the PHILSUCOM or to the different sugar planters and millers from whom the fees were collected or levied. That is the essence of the trust intended. if any. The Stabilization Fund is to be utilized for the benefit of the entire sugar industry Facts: 1. Having been levied for a special purpose. for short) was formerly the Gov’t office tasked with the function of regulating and supervising the sugar industry until it was superseded by its co-respondent Sugar Regulatory Administration under EO 18 (1986) 2. its existence as a juridical entity was mandated to continue for three (3) more years "for the purpose of prosecuting and defending suits by or against it and enables it to settle and close its affairs.D.

regardless of length. ex-post facto law 6. Presidential Decree No. except such as rest in the discretion of the authority which exercises it. and it has been repeatedly held that "inequities which result from a singling out of one particular class for taxation or exemption infringe no constitutional limitation". An ex post facto law is. Importers and Distributors Association of the Philippines. and is reasonably necessary for the accomplishment of. discourages. no factual nor legal basis for the exercise by the President of the vast powers conferred upon him by Amendment No. the 8th "whereas" clause sufficiently summarizes the justification in that grave emergencies corroding the moral values of the people and betraying the national economic recovery program necessitated bold emergency measures to be adopted with dispatch." 4. hereinafter collectively referred to as the Intervenors. were permitted by the Court to intervene in the case as it was necessary for the complete protection of their rights and that their "survival and very existence is threatened by the unregulated proliferation of film piracy. 2." 5. the authority of the BOARD to solicit such assistance is for a "fixed and limited period" with the deputized agencies concerned being "subject to the direction and control of the BOARD. Taxation has been made the implement of the state's police power. it is imperative for the Government to create an environment conducive to growth and development of all business industries Issues: 1. 1994 amended the National Internal Revenue Code providing: There shall be collected on each processed video-tape cassette. oppressive and/or in unlawful restraint of trade 3. which is the regulation of the video industry through the Videogram Regulatory Board as expressed in its title. The principle of separation of powers has in the main wisely allocated the respective authority of each department and confined its jurisdiction to such a sphere. It assails the constitutionality of Presidential Decree No. a tax of 30% on the gross receipts payable to the local government is a RIDER and the same is not germane to the subject matter thereof 2.Tio v VRB Doctrine: It is inherent in the power to tax that a state be free to select the subjects of taxation. and Philippine Motion Pictures Producers Association. The foregoing provision is allied and germane to. or even definitely deters the activities taxed. 3. The grant in Section 11 of the DECREE of authority to the BOARD to "solicit the direct assistance of other agencies and units of the government to perform enforcement functions for the Board" is not a delegation of the power to legislate but merely a conferment of authority or discretion as to its execution." There is a rational . This is as it ought to be. among other categories. one which "alters the legal rules of evidence. over regulation of the video industry as if it were a nuisance Ruling: 1. the general object of the DECREE. the rationale behind the enactment of the decree was the proliferation and unregulated circulation of videograms resuting to the decline in theatrical attendance and substantial losses estimated at P450 Million annually in government revenues and to ensure national economic recovery. confiscatory. The tax imposed is not only a regulatory but also a revenue measure prompted by the realization that earnings of videogram establishments of around P600 million per annum have not been subjected to tax. an annual tax of five pesos 3. Integrated Movie Producers. tax imposed is harsh. 4. it is beyond serious question that a tax does not cease to be valid merely because it regulates. not the wisdom of the action taken. undue delegation of power and authority 5. 1987 entitled "An Act Creating the Videogram Regulatory Board" with broad powers to regulate and supervise the videogram industry 2. 6 4. The power to impose taxes is one so unlimited in force and so searching in extent. ready for playback. Facts: 1. that the courts scarcely venture to declare that it is subject to any restrictions whatever. a month after the promulgation of the abovementioned decree. The public purpose of a tax may legally exist even if the motive which impelled the legislature to impose the tax was to favor one industry over another. the Greater Manila Theaters Association. may be the basis for declaring a statute invalid. Only congressional power or competence. and authorizes conviction upon less or different testimony than the law required at the time of the commission of the offense.

.6. Being a relatively new industry. We do not share petitioner's fears that the video industry is being over-regulated and being eased out of existence as if it were a nuisance. the need for its regulation was apparent. besides the fact that the prima facie presumption of violation of the DECREE attaches only after a forty-five-day period counted from its effectivity and is. connection between the fact proved. and the ultimate fact presumed which is violation of the DECREE. which is non-registration. there is no question that public welfare is at bottom of its enactment. therefore. neither retrospective in character. While the underlying objective of the DECREE is to protect the moribund movie industry.

Caltex submitted a proposal to COA for the payment and the recovery of claims.Caltex Philippines vs. Caltex moved for reconsideration. . and that pending such remittance. Issue: Whether the amounts due from Caltex to the OPSF may be offsetted against Caltex’ outstanding claims from said funds. contract or judgment as is allowed to be set-off. A taxpayer may not offset taxes due from the claims that he may have against the government. demand. notwithstanding an early release of its reimbursement certificates from the OPSF. Commission on Audit (COA) Facts: In 1989. as amended by EO 137. explicitly provides that the source of OPSF is taxation. Held: Taxation is no longer envisioned as a measure merely to raise revenue to support the existence of government. directing it to remit its collection to the Oil Price Stabilization Fund (OPSF). PD 1956. COA sent a letter to Caltex. taxes may be levied with a regulatory purpose to provide means for the rehabilitation and stabilization of a threatened industry which is affected with public interest as to be within the police power of the state. COA approved the proposal but prohibited Caltex from further offseting remittances and reimbursements for the current and ensuing years. On 31 May 1989. Caltex requested COA. Taxes cannot be the subject of compensation because the government and taxpayer are not mutually creditors and debtors of each other and a claim for taxes is not such a debt. which COA denied. all its claims for reimbursement from the OPSF shall be held in abeyance. excluding that unremitted for 1986 and 1988 of the additional tax on petroleum products authorized under Section 8 of PD 1956.

Basco v PAGCOR Doctrine: Local Gov’ts have no power to tax instrumentalities of the Nat’l Gov’t. are accordingly repealed. being mere Municipal corporations hav e no inherent right to impose taxes. repealed or revoked. together with prostitution. b. 1869 is violative of the principle of local autonomy Ruling: 1. as the franchise holder. And if Congress can grant the City of Manila the power to tax certain matters. Local Gov’ts have no power to tax instrumentalities of the Nat’l Gov’t. it can also provide for exemptions or even take back the power. PD 1869. To attain these objectives PAGCOR is given territorial jurisdiction all over the Philippines. Constitutional a. 1983. 1869. On July 11. PAGCOR is a Gov’t owned or controlled corporation with an original charter. the exemption clause in P. 3." Facts: 1. decrees. whether Nat’l or Local. Constitutionality of PD 1896." its "exemption clause" remains as an exception to the exercise of the power of local Gov’ts to impose taxes and fees. P. as well as fees." The Charter of the City of Manila is subject to control by Congress being a municipal corporation w/c is a mere creature of Congress. Under its Charter. The City of Manila. 1869 to enable the Gov’t to regulate and centralize all games of chance authorized by existing franchise or permitted by law. Section 13 par. (2) of P. all laws. c. Under its Charter's repealing clause. charges or levies of whatever nature.D. being a mere Municipal corporation has no inherent right to impose taxes. The power of LGUs to "impose taxes and fees" is always subject to "limitations" w/c Congress may provide by law. inconsistent therewith. Since PD 1869 remains an "operative" law until "amended. Their "power to tax" therefore must always yield to a legislative act w/c is superior having been passed upon by the state itself w/c has the "inherent power to tax. PAGCOR is exempted. 1869 constitutes a waiver of the right of the City of Manila to impose taxes and legal fees.D. Its "power to tax" therefore must always yield to a legislative act w/c is superior having been passed upon by the state itself w/c has the "inherent power to tax. executive orders. unless allowed by law. Gambling in all its forms.D. PAGCOR was created under P. it violates the equal protection clause of the constitution in that it legalizes PAGCOR — conducted gambling. drug trafficking and other vices. police power is inborn in the very fact of statehood and sovereignty. while most other forms of gambling are outlawed. 2. . from paying any "tax of any kind or form. rules and regulations. It cannot therefore be violative but rather is consistent with the principle of local autonomy. b." Issue: 1. amended or modified. Along with the taxing power and ED. LGUs. But the prohibition of gambling does not mean that Gov’t cannot regulate it in the exercise of its police power. If a. c. is generally prohibited. income or otherwise.D.

2. according to petitioner. The Tariff Commission held public hearings on said EO and submitted a report to the President for consideration and appropriate action. by law. bills of local application. Meantime. 104. and other duties or imposts within the framework of the nat’l development program of the Gov’t. including crude oil and other oil products. import and export quotas. general welfare and/or nat’l security. In the interest of nat’l economy. except in the cases of crude oil and other oil products w/c continued to be subject to the additional duty of nine percent (9%) ad valorem. 2. w/c levied (in addition to the aforementioned additional duty of nine percent (9%) ad valorem and all other existing ad valorem duties) a special duty of P0.. and subject to such limitations and restrictions as it may impose. reduce or remove tariff duties. headings and subheadings and the rates of import duty under Section 104 of PD No. The rates of duty herein provided or subsequently fixed pursuant to Section 401 of this Code shall be subject to periodic investigation by the Tariff Commission and may be revised by the President upon recommendation of the NEDA b. ONLY when necessary to protect local industries or products but not for the purpose of raising additional revenue for the Gov’t Ruling: 1. a. All tariff sections. Thus. . and subject to the limitations herein prescribed. 475 was issued by the President. 3. bills authorizing increase of the public debt. and private bills shall originate exclusively in the Congress 2. 475 and 478 are violative of the Consti w/c provides that all appropriation.05 per barrel of imported crude oil and P1. tonage and wharfage dues... additional (5%) duty ad valorem.95 per liter or P151. the President. the pertinent provisions thereof.Garcia v ES Doctrine: Customs duties w/c are assessed at the prescribed tariff rates are very much like taxes w/c are frequently imposed for both revenue-raising and for regulatory purposes. tariff rates. EO No. The President then issued EO No. The relevant congressional statute is the Tariff and Customs Code of the Philippines.. The President issued an EO No. Sec. W/N the questioned EOs contravene the Tariff and Customs Code.00 per liter of imported oil products. 438 w/c imposed. There is explicit constitutional permission to Congress to authorize the President "subject to such limitations and restrictions is [Congress] may impose" to fix "within specific limits" "tariff rates and other duties or imposts Section 28(2) of Article VI of the Constitution provides as follows: The Congress may. authorize the President to fix within specified limits. w/c constitute taxes in the sense of exactions the proceeds of w/c become public funds — have either or both the generation of revenue and the regulation of economic or social activity as their moving purposes Facts: 1. 4. reduce or remove existing protective rates of import duty. customs duties. to increase. across the board. it has been held that "customs duties" is "the name given to taxes on the importation and exportation of commodities. 478. 34 and all subsequent amendments issued under Executive Orders and Presidential Decrees are hereby adopted and form part of this Code. dated 23 August 1991. 401. on 15 August 1991 reducing the rate of additional duty on all imported articles from nine percent (9%) to five percent (5%) ad valorem. and Sections 104 and 401. revenue or tariff bills. chapters. W/N EO Nos. upon recommendation of NEDA is hereby empowered: (1) to increase. Issues: 1. w/c Section authorizes the President. Most commonly.

the purpose and object of its organization as an international air carrier. business. Sec. But it maintained a general sales agent in the Philippines which was responsible for selling BOAC tickets covering passengers and cargoes. It is our considered opinion that BOAC is a resident foreign corporation. . and the source of an income is that activity . The tickets exchanged hands here and payments for fares were also made here in Philippine currency. British overseas airways corp. The activities performed by the agent for BOAC were in exercise of the functions which are normally incident to. Issue: 1. is engaged in international airlines business. the flow of wealth should share the burden of supporting the government. commerce. "Gross income" includes gains. while having no landing rights here. it may be included. (BOAC) a wholly owned British Corporation. during the periods covered by the subject assessments. it is sufficient that the income is derived from activity within the Philippines. 4. In consideration of such protection. W/N during the fiscal years in question BOAC is a resident foreign corporation doing business in PH or has an office or place of business in PH. In order that a foreign corporation may be regarded as doing business within a State. 37 of the Tax Code is not an all-inclusive enumeration of items to be considered as sources of income. sales. The site of the source of payments is the Philippines. activity or service that produced the income. Philippine territory. profits. and income derived from any source whatever. such as the appointment of a local agent. The test of taxability is the "source".CIR v BOAC Doctrine: The flow of wealth proceeded from. 2. or from profession. trades. In consideration of such protection. 2. enjoying the protection accorded by the Philippine government. enjoying the protection accorded by t he Philippine government. and are in progressive pursuit of. the flow of wealth should share the burden of supporting the government. The flow of wealth proceeded from. accordingly. W/N the revenue derived by BOAC from sales of tickets in PH for air transportation. Facts: 1. The source of an income is the property. 2. and occurred within. constitute income of BOAC from Philippine sources. BOAC. and income derived from salaries. vocations. maintained a general sales agent in the Philippines. and. taxable. Therefore. there must be continuity of conduct and intention to establish a continuous business. the sale of tickets in the Philippines is the activity that produces the income. In BOAC's case. The definition is broad and comprehensive to include proceeds from sales of transport documents. organized and existing under the laws of the United Kingdom. which produced the income. and not one of a temporary character. although there was no mention of transportation. Philippine territory. From 1959 to 1972. Ruling: 1.. and occurred within. wages or compensation for personal service of whatever kind and in whatever form paid. For the source of income to be considered as coming from the Philippines. The CIR assessed deficiency income taxes against BOAC. it has no landing rights for traffic purposes in the Philippines and was not granted a Certificate of public convenience and necessity to operate in the Philippines by the Civil Aeronautics Board 3..

Indeed. doing business in the Philippines. the applicable law in the case at bar. 1957.CIR v Japan Airlines Facts: 1. there can be no conclusion other than that JAL is a resident foreign corporation. 2. plane tickets and reservations for cargo spaces which were used by the passengers or customers on the facilities of JAL. Ruling: 1. it was not liable for the deficiency income tax liabilities assessed Issues: 1. for years 1959 through 1963 6. and contemplates. Respondent Japan Air Lines (JAL) is a foreign corporation engaged in the business of international air carriage. and there being no such income during the period in question. the sale of tickets is the very lifeblood of the airline business. the generation of sales being the paramount objective. literature and other information playing up the attractions of Japan as a tourist spot and the services enjoyed in JAL planes. it was taxable only on income from Philippine sources as determined under Section 37 of the Tax Code. W/N JAL IS A FOREIGN CORPORATION ENGAGED IN TRADE OR BUSINESS IN THE PHILIPPINES. and in progressive prosecution of commercial gain or for the purpose and object of the business organization. From 1959 to 1963. There is no specific criterion as to what constitutes `doing' or `engaging in' or `transacting' business. 4. Under Section 24 of Commonwealth Act No. 2. JAL protested and said assessments alleging that as a non-resident foreign corporation. since mid-July. JAL had maintained an officeat Manila w/c did not sell tickets but was maintained merely for the promotion of the company's public relations and to hand out brochures. to that extent. 3. There being no dispute that JAL constituted PAL as local agent to sell its airline tickets. 466 otherwise known as the "National Internal Revenue Code of 1939". In 1957. In 1972. JAL constituted the PAL as its general sales agent in the Philippines. However. The term implies continuity of commercial dealings and arrangements. the performance of acts or works or the exercise of some of the functions normally incident to. JAL is liable to pay 30% of its total net income for the years 1959 through 1963 . 2. 5. It sold for and in behalf of JAL. JAL received deficiency income tax assessment notices and a demand letter from CIR inclusive of 50% surcharge and interest. W/N PROCEEDS FROM SALES OF JAL TICKETS SOLD IN THE PHILIPPINES ARE TAXABLE AS INCOME FROM SOURCES WITHIN THE PHILIPPINES. JAL did not have planes that lifted or landed passengers and cargo in the Philippines as it had not been granted then by the Civil Aeronautics Board (CAB) a certificate of public convenience and necessity to operate here. resident foreign corporations are taxed thirty percentum (30%) upon the amount by which their total net income exceed one hundred thousand pesos.

This Court has always recognized that the right to manufacture implies the right to sell/distribute the manufactured products. Facts: 1. NOT liable under the city tax ordinance. 5 is an excise tax. It is not a distributor as it sells products directly to consumers plaintiff is already paying the National Government a percentage Tax of 71/t. the company distributed its softdrinks by means of a fleet of delivery trucks which went directly to customers in the different places in lloilo province. Inc. seven-up and other soft drinks within the jurisdiction of the City of Iloilo. Pet is engaged in the business of bottling softdrinks under the trade name of Pepsi Cola And 7-up and selling the same to its customers. Truck sales were made independently of transactions in the main office. a manufacturer does not necessarily become engaged in the separate business of selling simply because it sells the products it manufactures.1972. Thus. First is when the principal business of manufacturing. W/N it is liable to pay tax under the ordinance when it is not a manufacturer or bottler w/plant inside the territorial jurisdiction of the city Ruling: 1. where in turn actual deliveries are made. as manufacturer's sales tax on all the softdrinks it manufactures On July 12. There are two marketing systems in manufacturing of products: a. Hence. or is a necessary consequence of its main or principal business of bottling. Here. 4. in Iloilo City. Any one who desires to purchase the product may go to the store or warehouse and there purchase the merchandise. filed a complaint docketed as Civil Case No. a corporation was engaged in the separate business of selling or distributing soft-drinks. 2. In the case at bar. It is a tax on the privilege of distributing. 5 series of 1960. for tax purposes. Series of 1960. with a bottling plant situated at Iloilo and which is outside the jurisdiction of def] Ordinance No. imposes municipal license tax on all firms engaged in the distribution. def. Iloilo Bottlers. manufacture or bottling of coca-cola. as amended. manufacturing or bottling softdrinks. W/N pet is engaged in the independent business of distributing soft-drinks. manufacturer enters into sales transactions and invoices the sales at its main office where purchase orders are received and approved before delivery orders are sent to the company's warehouses. 28. privileges or businesses are done or performed within the jurisdiction of said authority. that the company paid under protest. Sales were made by Iloilo Bottlers. 6. it stopped paying the tax Pet contends it must not be bound to pay said tax anymore bec a. its activity of selling is merely an incident to. pepsi cola. which amount allegedly constituted payments of municipal license taxes under Ordinance No. Second is when the company is engaged in a separate business of selling. tru-orange. 5. 3. The delivery trucks were therefore much the same as the stores and warehouses under the second marketing system. . Being an excise tax.329.20.Iloilo Bottlers v City of Iloilo Doctrine: The tax imposed under Ordinance No. Syjuco was paying the abovementioned municipal tax but when pet transferred the plant. Issues: 1. A certain Santiago Syjuco sold its Iloilo bottling plant to pet in 1966 w/c was later transferred to a diff municipality but is still in Iloilo Before the sale. 7. Here. 9046 with the Court of First Instance of Iloilo praying for the recovery of the sum of P3. We have no option but to declare the company liable under the tax ordinance. 2. independently of its business of bottling them. it can be levied by the taxing authority only when the acts. Inc. It is situated outside the City of Iloilo and b. 5. Series of 1960 which ordinance was successively amended by Ordinance No. b. sales transactions are entered into and perfected at stores or warehouses maintained by the company. The warehouses only serve as storage sites and delivery points of the products earlier sold at the main office.

It is clear from the ordinance that three types of activities are covered: (1) distribution. A person engaged in any or all of these activities is subject to the tax.2. The second ground is manifestly devoid of merit. (2) manufacture and (3) bottling of softdrinks. .

organized and existing under the laws of the Philippines 2.Wells Fargo v CIR Doctrine: If that power of the PH to tax is to be conceded. that is. California. the corporation being domiciled therein. This provision has already been applied to shares of stock in a domestic corporation which were owned by a British subject. unless the law involved is challenged. oppressive or discriminatory. Accordingly. to which petitioner-appellant objected. In the instant case. W/N as to intangibles. distinct relationships which may be entered into with respect thereto. was duly appointed trustee 3. Birdie Lillian Eye. resolution has proceeded upon express or implied recognition of the sovereign taxing power as exerted by governments in the exercise of jurisdiction upon any one of these grounds.000 shares of stock is subject to Philippine inheritance tax. the protection of its laws. a single location in space is hardly possible. provides that every transmission by virtue of inheritance of any share issued by any corporation of sociedad anonima organized or constituted in the Philippines. The Federal and State of California's inheritance taxes due on said shares have been duly paid. Wells Fargo Bank & Union Trust Company. . the jurisdiction of the Philippine Government to tax must be upheld. But it has been relaxed because of either of two fundamental considerations: (1) upon the recognition of the inherent power of each government to tax persons. 5. as amended. the guaranty of due process cannot certainly be invoked to frustr ate it. who died in LA. when the law is alleged to be arbitrary. and (2) upon the principle that as to intangibles. Respondent Collector of Internal Revenue sought to subject anew the aforesaid shares of stock to the Philippine inheritance tax. as. an anonymous partnership. Issue: 1. their situs is in the domicile of the owner and their transmission by death necessarily takes place under his domiciliary laws Ruling: 1. and that such situs is in the domicile of the decedent at the time of his death. left her one-half conjugal share in 70. is subject to the tax therein provided. 4. like the shares of stock.000 shares of stock in the Benguet Consolidated Mining Company. Petitioner-appellant. As jurisdiction may exist in more than one government. The settled law in the United States is that intangibles have only one situs for the purpose of inheritance tax. the actual situs of the shares of stock is in the Philippines. which is not. properties and rights within its jurisdiction and enjoying. Facts: 1. considering the multiple. Section 1536 of the Administrative Code. holding that the transmission by will of the said 35. on considerations repugnant to such guaranty of due process or that of the equal protection of the laws. The owner residing in California has extended here her activities with respect to her intangibles so as to avail herself of the protection and benefit of the Philippine laws. jurisdiction based on distinct grounds. CFI rendered judgment. thus.

Under RA 1383. the main purpose of taxation. pursuant to the provisions of Republic Act No. . W/N all corporations. NWSA is a public corporation created by virtue of Republic Act No. And where the law does not distinguish neither may we. municipality or municipal district . Laguna v CTA. which the NAWASA had sought to take over. whether national or local. properties of all the existing local government-owned waterworks and sewerage systems all over the Philippines. NWSA Doctrine: Taxes are financial burdens imposed for the purpose of raising revenues with which to defray the cost of the operation of the Government. Taxes are financial burdens imposed for the purpose of raising revenues with which to defray the cost of the operation of the Government. 5987 are exempted from the payment of real estate taxes in view of the nature and kind of said property and functions and activities of petitioner. Hence. By the time of the take-over of CSB Waterworks System. the same was self-supporting and revenue-producing.Board of Assessment Appeals. the property comprising CSB 5. Hence. NWSA protested claiming that the property described under Tax Declaration No. Rosa-Biñan (CSB) Waterworks System owned by the Province of Laguna were taken over by NWSA 3. whether national or local. 2. Rosa-Biñan Waterworks System — are patrimonial property of said city. 470 makes no distinction between property held in a sovereign. in exempting from taxation "property owned by the Republic of the Philippines. not in its governmental capacity. for purposes of real estate taxes. and a tax on property of the Government. governmental or political capacity and those possessed in a private.. any province. in the final analysis. 1383 6. as provided in RA No. 1383 — as it did in the case at bar. 1383. city. Facts: 1. proprietary or patrimonial character. would merely have the effect of taking money from one pocket to put it in another pocket. the main purpose of taxation. Upon the other hand. would merely have the effect of taking money from one pocket to put it in another pocket. 104 Ruling: 1. including the Cabuyao-Sta. and a tax on property of the Government. it would not serve. in the final analysis. with respect to the Cabuyao-Sta. agencies or instrumentalities owned or controlled by the Government are subject to taxation under RA No. Board of Assessment Appeals overruled the protest Issues: 1. but that all its surplus income are not declared as profits as this surplus are or may be invested for the expansion thereof 4." said section 3(a) of Republic Act No. We ruled that the assets of the water system of the City of Cebu. Provincial Assessor of Laguna assessed. it would not serve. W/N CSB is held by the gov’t in its proprietary character and is therefore taxable 2. and that it is owned by the Gov’ t as well as all property comprising waterworks and sewerage systems placed under it 2. . . which held it in a proprietary character.

Consequently. W/N NDC is exempted from payment of the real estate taxes on the land reserved by the President for warehousing purposes 2. 4. is merely the administration of the property while the government retains ownership of what has been declared reserved for warehousing purposes under Proclamation No. Reclamation Area No. is authorized to engage in commercial. homesteaders and other claimants. therefore. a different rule should apply because "[t]he exemption of public property from taxation does not extend to improvements on the public lands made preemptioners. President issued Proclamation No. Sec.O. in 1940. when the government disposed of them in favor of NDC 7. of Cebu City. However. consisting of 4. But non-disposable pub lands reserved by the Gov’t are tax exempt. 5. improvements made thereon are taxable. 470 does not apply to petitioner which could conceivably not have been expected to protest a payment it honestly believed to be due.940 square meters more or less. the subject reserved public land remains tax exempt. CEBU contends that the properties have ceased to be tax exempt under the Assessment Law. 83. While ordinary public lands are tax exempt because title thereto belongs to the Republic. includes subject properties in the exemption. 83 is to segregate a piece of public land and transform it into non-alienable or non-disposable under the Public Land Act. Facts: 1. YES. 430 reserving Block no. Section 54 of Commonwealth Act No. As We view it. NDC wrote the City Assessor demanding full refund of the real estate taxes paid to CEBU claiming that the land and the warehouse standing thereon belonged to the Republic and therefore exempt from taxation 17 6. agricultural and other enterprises necessary or contributory to economic development or important to public interest. mining. Cebu assessed and collected from NDC real estate taxes on the land and the warehouse thereon. Since the reservation is exempt from realty tax. 115 subjects them to real estate tax even before ownership thereto is transferred in the name of the beneficiaries. on the other hand. and these are taxable by the state. as regards the warehouse constructed on a public reservation. which exempts properties owned by the Republic from real estate tax. E. Issues: 1. applies to disposable public lands. 182 and E. was constructed thereon. 3. a warehouse with a floor area of 1. What appears to have been ceded to NWC (later transferred to NDC). 2. Clearly. in the case before Us. the erroneous tax payments collected by CEBU should be refunded to NDC. 399. 115 subjects them to real estate tax even before ownership thereto is transferred in the name of the beneficiaries. or occupants. 115 does not apply to lands reserved under Sec. 2. 93 dissolved NWC 8 with NDC taking over its assets and functions 4. industrial. in furtherance of its objectives. . Subsequently. However. NDC maintains the Sec. W/N NDC may recover in refund unprotested real estate taxes it paid from 1948 to 1970 Ruling: 1. Sec. 3 of the Assessment Law. While ordinary public lands are tax exempt because title thereto belongs to the Republic.O. for warehousing purposes under the administration of NWC. at their own expense. subsidiary corporations one of which is the now defucnt National Warehousing Corporation (NWC). may claim for a refund.A. It also operates. Section 115. NDC is GOCCexisting by virtue of C. the effect of reservation under Sec. Protest is not a requirement in order that a taxpayer who paid under a mistaken belief that it is required by law.NDC v Cebu Doctrine: It is undeniable that to any municipality the principal source of revenue with which it would defray its operation will came from real property taxes. 4. Sec. 430.599 square meters. On the other hand.

2. b. There is. coverage (subjects) and situs (place) of taxation. With the legislature primarily lies the discretion to determine the nature (kind). This classification is neither arbitrary nor inappropriate. object (purpose). then and now. object (purpose). 3. like the kindred concept of equal protection. It is not limited to existing conditions only and d. does not offend classification as long as a. Facts: 1. Constitutionality of RA 7496 Ruling: 1. no distinction in income tax liability between a person who practices his profession alone or individually and one who does it through partnership (whether registered or not) with others in the exercise of a common profession. rightly rest on legislative judgment. merely require that all subjects or objects of taxation similarly situated are to be treated alike both privileges and liabilities. extent (rate). it is germane to the purpose of the law. Having arrived at this conclusion. . by constitutional fiat. like the kindred concept of equal protection. extent (rate). does not offend classification as long as it rest on substantial distinctions. Petitioners challenge the constitutionality of RA 7496 or the simplified income taxation scheme (SNIT) under Arts (26) and (28) and III (1). Uniformity. The SNIT contained changes in the tax schedules and different treatment in the professionals petitioners assail it as unconstitutional for being violative of the equal protection clause in the constitution. It is not limited to existing only and must apply equally to all members of the same class. coverage (subjects) and situs (place) of taxation. With the legislature primarily lies the discretion to determine the nature (kind).Tan v Del Rosario Doctrine: Uniformity of taxation. it is germane to the purpose of the law. This court cannot freely delve into those matters which. it rest on substantial distinctions. which is tax exempt. the plea of petitioner to have the law declared unconstitutional for being violative of due process must perforce fail. merely require that all subjects or objects of taxation similarly situated are to be treated alike both privileges and liabilities. Issue: 1. but on the partners themselves in their individual capacity computed on their distributive shares of partnership profits. The legislative intent is to increasingly shift the income tax system towards the scheduled approach in taxation of individual taxpayers and maintain the present global treatment on taxable corporations. The due process clause may correctly be invoked only when there is a clear contravention of inherent or constitutional limitations in the exercise of the tax power. uniformity of taxation. Uniformity. must apply equally to all members of the same class. No. The income tax on professional partnership is imposed not on the professional partnership. c.

00 except a. b. It has been held that where an ordinance of a municipality fails to state any policy or to set up any standard to guide or limit the mayor's action. 6537 null and void. 3. Whether or not the 50. Hui Chiong Tsai Pao Ho (Tsai Pao Ho) who was employed in Manila filed a petition with the CFI of Manila to declare City Ordinance No. once an alien is admitted. it is imperative that the classification should be based on real and substantial differences having a reasonable relation to the subject of the particular legislation. Issue: 1. c.. On February 22. c. Requiring a person before he can be employed to get a permit from the City Mayor of Manila who may withhold or refuse it at will is tantamount to denying him the basic right of the people in the Philippines to engage in a means of livelihood. W/N it is violative of due process Ruling: 1.00 is being collected from every employed alien whether he is casual or permanent. 1968. The same amount of P50. While it is true that the Philippines as a State is not obliged to admit aliens within its territory. Villegas filed the present petition.00 from aliens who have been cleared for employment. Pet contends it is not aa tax measure but a regulatory measure in exercise of police power 5. without first securing an employment permit from the Mayor of Manila and paying the permit fee of P50. There is no logic or justification in exacting P50. Hiu Chong Tsai Pao Ho Facts: 1. such ordinance is invalid.Villegas vs. b. The P50. persons employed in the diplomatic or consular missions of foreign countries. being an undefined and unlimited delegation of power to allow or prevent an activity per se lawful.00 fee is unreasonable a. 4. whether permanent.00 employment permit fee imposed by virtue of Ordinance No. Ordinance No. the Municipal Board of Manila passed City Ordinance No. W/N it is a taax or regulatory measure 4. or in the technical assistance programs of both the Philippine Government and any foreign government. he cannot be deprived of life without due process of law. not only because it is excessive but because it fails to consider valid substantial differences in situation among individual aliens who are required to pay it. 6537 is a violation of the equal protection clause. 4. 2. and members of religious orders or congregations. . W/N the Ordinance provides guidelines for its implementation 3. It is obvious that the purpose of the ordinance is to raise money under the guise of regulation. thus conferring upon the Mayor arbitrary and unrestricted power to grant or deny the issuance of building permits. Although the equal protection clause of the Constitution does not forbid classification.\ 3. The trial court declared City Ordinance No. 6537 as null and void for being discriminatory and violative of the rule of the uniformity in taxation. and those working in their respective households. sect or denomination. temporary or casual. Villegas 2. The said city ordinance was also signed by then Manila Mayor Antonio J. 6537 is void because it does not contain or suggest any standard or criterion to guide the mayor in the exercise of the power which has been granted to him by the ordinance. 2. part time or full time or whether he is a lowly employee or a highly paid executive. Section 1 of the said city ordinance prohibits aliens from being employed or to engage or participate in any position or occupation or business enumerated therein. 6537. who are not paid monetarily or in kind.

Facts: 1. Ordinance No. identical with the amusement tax provided by section 260 of Commonwealth Act No. and the appellants cannot point out what places of amusement taxed by the ordinance do not constitute a class by themselves and which can be confused with those not included in the ordinance. Ordinance No. The taxing power has the authority to make reasonable and natural classifications for purposes of taxation. vs.. The NIRC also taxes cinemaatographs for the national govt. it contravenes violates and is inconsistent with.Eastern Theatrical Co. . in every respect. W/N the ordinance violated the principle of equality and uniformity of taxation enjoined by the Constitution Ruling: 1. The fact that some places of amusement are not taxed while others. petitioner assail the validity off the ordinance: a. c.. 2. pawnshops theaters. lessee. 4. Amusement taxes.. 466. is no argument at all against the equality and uniformity of the tax imposition. W/N RAC grants the power to tax amusement or NIRC repealed that provision of RAC 2.. For violation the uniformity and equality of taxation and thee equal protection of the laws under the Constitution b. 2958: Section 2444 (m) of the Revised Administrative code reads as follows: To tax fix the license fee and regulate the business of hotels restaurants refreshment places. — There shall be collected from the proprietor. 5. cinematographs. circuses. boarding houses livery garages warehouses. The taxing power has the authority to make reasonable and natural classifications for purposes of taxation. Alfonso Doctrine: The fact that some places of amusement are not taxed while others. THEATERS VAUDEVILLE COMPANIES THEATRICAL SHOWS AND BOXING EXHIBITION AND PROVIDING FOR OTHER PURPOSES. lodging houses. existing national legislation more particularly revenue and tax laws d. arbitrary capricious unreasonable oppressive and is contrary to and violation our basic and recognizes principles of taxation and licensing laws. 3. boxing exhibition. Both provisions of law may stand together and be enforced at the same time without any incompatibility among themselves 2. or operation of theater cinematographs. unjust. Issues: 1. SEC. Equality and uniformity in taxation means that all taxable articles or kinds of property of the same class shall be taxed at the same rate. 260. it is unfair. because the Municipal Board of Manila exceeded and over-stepped the power granted it the Charter of the City of Manila. 2958 of the City of Manila: AN ORDINANCE IMPOSING A FEE ON THE PRICE OF EVERY ADMISSION TICKET SOLD BY CINEMATOGRAPHS. is no argument at all against the equality and uniformity of the tax imposition. cafes. The argument has absolutely no merit. Resp allege Manila is authorized by the Revised administrative Code the Municipal Board of the City of Manila to enact Ordinance No. The conflict pointed out by them is imaginary. Equality and uniformity in taxation means that all taxable articles or kinds of property of the same class shall be taxed at the same rate. 2958 does not specify the kind of the tax sought to be imposed but the seven schedules and other details of said ordinance are. concert halls.

Inc. c. for violating the equal protection clause b. Issues: 1. licenses or fees 2. for the coverage of the tax. As to the third requisite. But petitioner is not entitled to refund of what it paid because at the time of collection. Ormoc City a municipal tax equivalent to one 1% per export sale to US and other foreign countries. Facts: 1. the classification applies not only to present conditions but also to future conditions which are substantially identical to those of the present. the classification applies only to those who belong to the same class. g. that the tax is neither a production nor a license tax allowed by the charter of Ormoc e. the ordinance provided a sufficient basis to preclude arbitrariness. Inc. filed before the Court of First Instance of Leyte a complaint against the City of Ormoc as well as its Treasurer. 4 of 1964 ws passed imposing "on any and all productions of centrifugal sugar milled at the Ormoc Sugar Company. specifically the equal protection clause and rule of uniformity of taxation. were infringed Ruling: 1. The Treasurer of Ormoc City Doctrine: Four requisites for reasonable qualification to comply with the equal protection clause were set forth. But that Section of the RAC was repealed by Section 2 of Republic Act 2264 (An Act Increasing the Autonomy of LGUs) which gave chartered cities. d. 2. the same being then presumed constitutional until declared otherwise. upon goods and merchandise carried into the municipality. licenses or fees not excluded in its charter. uniformity of taxation c. the tax amounts to a customs duty. Ormoc Sugar Company.Ormoc Sugar vs. it is based on substantial distinctions which make real differences. W/N the constitutional limits on the power of taxation. of the same class as plaintiff. f. by Ormoc Sugar Company. for being a tax forbidden by the RAC d. RAC divests municipal councils to impose a tax in any form whatever. CFI upheld the Constitutionality of the Ordinance and declared the taxing power of defendant chartered city broadened by the Local Autonomy Act to include all other forms of taxes. W/N the Ormoc Municipality has the authority to levy such an export tax in violation of RAC 2. of the same class as plaintiff. Ordinance No.. . We ruled that the equal protection clause applies only to persons or things identically situated and does not bar a reasonable classification of the subject of legislation. the classification. 3. The Ordinance did not meet letter c because it excludes any subsequently established sugar central. should be in terms applicable to future conditions as well. and a classification is reasonable where a. b. under protest. Payments for said tax were made. The taxing ordinance should not be singular and exclusive as to exclude any subsequently established sugar central. alleging that the afore-stated ordinance is unconstitutional a. Any sugar central to be established in the future will not be subject to this tax. Inc. fee or charge in violation of RA 2264 because the tax is on both the sale and export of sugar. Municipal Board and Mayor. to be reasonable. these are germane to the purpose of the law. municipalities and municipal districts authority to levy for public purposes just and uniform taxes. Defendants asserted that the tax ordinance was within defendant city's power to enact under the Local Autonomy Act and that the same did not violate any constitutional limitation.

c. The owners of boarding stables for race horses and the race horse owners themselves.Manila Race Horse Trainers Association vs. while owners of other kinds of horses are taxed less or not at all d. From the context of Ordinance No. dela Fuente Doctrine: It was said there is equality and uniformity in taxation if all articles or kinds of property of the same class are taxed at the same rate. Applying this criterion to the present case. and this business demands relatively heavy police supervision. The basis of license fee is the number of race horses kept or maintained in the boarding stables to be paid by the maintainers at the rate of P10. there would be discrimination if some boarding stables of the same class used for the same number of horses were not taxed or were made to pay less or more than others.00 a year for each race horse and that an empty stable for race horse pays no license fee at all Issue: 1. It is but fair and just that for a boarding stable where only one horse is maintained proportionately less amount should be exacted b. It is maintained that the Ordinance No. . Facts: 1. 3065. a. 3065 for being discriminatory and savors of class legislation Ruling: 1. Equity in taxation is generally conceived in terms of ability to pay in relation to the benefits received by the taxpayer and by the public from the business or property taxed. Constitutionality of Ordinance No. There is equality and uniformity in taxation if all articles or kinds of property of the same class are taxed at the same rate. who may carry the taxation burden are a class by themselves and appropriately taxed because they have the ability to pay. the intent to tax or license stables and not horses is clearly manifest. their owners derive fat income and the public hardly any profit from horse racing. Taking everything into account. Race horses are devoted to gambling if legalized. The number of horses is used in the assessment purely as a method of fixing an equitable and practical distribution of the burden imposed by the measure. The tax is assessed not on the owners of the horses but on the owners of the stables. the differentiation against which the plaintiffs complain conforms to the practical dictates of justice and equity and is not discrimatory within the meaning of the Constitution. 3065 under consideration is a tax on race horses as distinct from boarding stables.

municipal property tax. a licese fee in the guise of a property tax to circumvent the prohibition under the Motor Vehicles Act. It is also unconstitutional for infringing upon the uniformity of taxation for it does not distinguish between a motor vehicle for hire and for purely private use. it can only refer to property tax as a different interpretation would make it repugnant to the Motor Vehicle Law. "An Ordinance Levying a Property Tax on All Motor Vehicles Operating Within the City of Manila". it constitutes double taxation. while it levies a so-called property tax it is in reality a license tax which is beyond the power of the Municipal Board of the City of Manila. It applies to all motor vehicles and limits the broad grant of power conferred upon the City of Manila by its Charter to impose taxes. If the tax is levied upon persons on account of their business. it does not become a property tax because it is proportioned in amount to the value of the property used in connection with the occupation. a motor vehicle registered in the Manila or in another place but occasionally comes to Manila and uses its streets and public highways. b. It also provides that the proceeds of the tax "shall accrue to the Streets and Bridges Funds of the City and shall be expended exclusively for the repair. Municipal Board Doctrine: The character of the tax as a property tax or a license or occupation tax must be determined by its incidents.Association of Customs Brokers vs. When the charter provides that Manila can impose a tax on motor vehicles operating within its limit. but if it is really imposed upon the performance of an act. maintenance and improvement of pub highways and bridges w/c is the purpose of the property tax imposed by Manila." Issue: The Constitutionality of the ordinance And w/n it is a property tax Ruling: Motor Vehicles Law provides that no fees other than those fixed in the Act may be exacted from motor vehicle owner or operators except those lawful and equitable insular. If a tax is in its nature an excise. As a rule an ad valorem tax is a property tax but it should not be taken in its absolute sense if the nature and purpose of the tax as gathered from the context show that it is in effect an excise or a license tax. and that in its section it provides that the tax should be 1 per cent ad valorem per annum. a motor vehicle registered in the Manila or in another place but occasionally comes to Manila and uses its streets and public highways. and from the natural and legal effect of the language employed and not by the name or mode adopted in fixing its amount. 2. maintenance and improvement of its streets and bridges. local. said ordinance offends against the rule of uniformity of taxation. it will be considered an excise. privilege or act which is taxed. Pet. It is also unconstitutional for infringing upon the uniformity of taxation for it does not distinguish between a motor vehicle for hire and for purely private use. Every excise necessarily must finally fall upon and be paid by property and so may be indirectly a tax upon property. The Ordinance reads. Facts: 1. The ordinance in question is a excise tax. enjoyment of a privilege. CFI sustained its validity 3. it will be construed as a license or occupation tax. . c. composed of all brokers and public service operators of motor vehicles in Manila challenges the validity of Ordinance No." And that this power is broad enough to impose property tax on motor operating w/in city limits 4. Manila asserts RA 409 confers upon the municipal board the power "to tax motor and other vehicles operating within the City of Manila the provisions of any existing law to the contrary notwithstanding. or the engaging in an occupation. Said law prohibits the collection of fees from motor vehicles because it already provides for fees representing the participation of the public utility on the repair. 3379 on the ground that a.

Section 1. among others. It may be true that in the case at bar the price asked for the bibles and other religious pamphlets was in some instances a little bit higher than the actual cost of the same but this cannot mean that appellant was engaged in the business or occupation of selling said "merchandise" for profit. subsection (7) of Article III of the Constitution of the Republic of the Philippines. and Ordinances No. The defendant appellee is a municipal corporation with powers that are to be exercised in conformity with the provisions of the Revised Charter of the City of Manila 3. quarterly license fees based on their gross sales 5. and imposes on retail dealers of general merchandise. 2529 w/c requires all businesses. Those who can tax the exercise of this religious practice can make its exercise so costly as to deprive it of the resources necessary for its maintenance. or educational purposes but income derived from any proprietary activity and property shall be taxed. and filed suit questioning the legality of the ordinances under which the fees are being collected asserting that the ordinances provide for religious censorship and restrain the free exercise and enjoyment of its religious profession and further alleges that RAC prov based on w/c the ordinances were made are already reppealed by the charter of Mla Issue: W/N the municipal ordinances violate the freedom of religious profession and worship. In a former case the Supreme Court expressed the opinion that the right to enjoy freedom of the press and religion occupies a preferred position as against the constitutional right of property owners. b.American Bible Society v City of Manila Doctrine: It is one thing to impose a tax on the income or property of a preacher. Ruling: YES! a. e. to secure a permit from the mayor and license from the treasurer. and the free exercise and enjoyment of religious profession and worship. 3000 cannot be considered unconstitutional. the Philippine agency of the American Bible Society has been distributing and selling bibles and/or gospel portions thereof throughout the Philippines and translating the same into several Philippine dialects 4. In the course of its ministry. as amended. 3000. It is quite another to exact a tax from him for the privilege of delivering a sermon. . then Ordinance 3000 is allso inapplicable. c. or prohibiting the free exercise thereof. The constitutional guaranty of the free exercise and enjoyment of religious profession and worship carries with it the right to disseminate religious information. Facts: 1. d. The acting City Treasurer of Manila required the society to secure the corresponding Mayors’ permit and municipal license fees in vioation of Ordinance No. The society paid such under protest. But as Ordinance No. pet is a non-profit missionary corp registered and doing buss in the Philippines 2. eOrdinance No. provides that no law shall be made respecting an establishment of religion. charitable. trade or occupation wc Manila is empowered to license or to tax. NIRC exempts from taxation corporations or associations organized and operated exclusively for religious. 2529 of the City of Manila is not applicable to petitioner. Any restraints of such right can only be justified like other restraints of freedom of expression on the grounds that there is a clear and present danger of any substantive evil which the State has the right to prevent. even if applied to plaintiff Society.

. 3. Hear the case on the merits. to hear the case on merit. based on lack of jurisdiction. paragraph 3. but only because. 4. Article VII of the 1973 Constitution. Facts: 1. Exemption from taxation is not favored and is never presumed. and improvements for religious (or charitable) purposes to be exempted from taxation. The 1935 and the 1973 Constitutions differ in language as to the exemption of religious property from taxes as they should not only be “exclusively” but also “actually” and “directly” used for religious purposes. The bishop claims tax exemption from real estate tax based on the provisions of Section 17. The petitioner province filed a motion to dismiss. 6. and improvements for religious (or charitable) purposes to be exempted from taxation. The provincial assessor made a tax assessment on the properties of the Roman Catholic Bishop of Bangued. 1978 resolution. Judge Hernando of the CFI Abra presided over the case. so that if granted. There must be proof of the actual and direct use of the lands. The Supreme Court granted the petition. buildings. as the validity of a tax assessment may be questioned before the Local Board of Assessment Appeals and not with a court. which was denied. the objection was based primarily on the lack of jurisdiction. It was followed by a summary judgment granting the exemption without hearing the side of the petitioner. so that if granted.Province of Abra v Hernando Doctrine: Exemption from taxation is not favored and is never presumed. 5. There was also mention of a lack of a cause of action. and ordered the respondent judge. buildings. set aside the June 19. it must be strictly construed against the taxpayer. 2. declaratory relief is not proper. in its view. There must be proof of the actual and direct use of the lands. or whoever is acting on his behalf. it must be strictly construed against the taxpayer. Issue: W/N admin remedies were exhausted Exemption of bishop’s porp from taxation Ruling: In the motion to dismiss filed on behalf of petitioner Province of Abra. He filed an action for declaratory relief. without costs. as there had been breach or violation of the right of government to assess and collect taxes on such property.

Under the 1935 Philippine Constitution. charitable and educational purposes. Paterno Millare. otherwise known as the Assessment Law Issue: W/N petitioner’s building should be tax exempt Ruling: Partly yes. then municipal mayor of Bangued. 4. that while this Court allows a more liberal and non-restrictive interpretation of the phrase "exclusively used for educational purposes" as provided for in the 1935 Philippine Constitution. c. 9. it is only fair that half of the assessed tax be returned to the school involved.Abra Valley v Aquino Doctrine: Exemption in favour of property used exclusively for charitable or educational purposes is ‘not limited to property actually indispensable’ therefor but extends to facilities which are incidental to and reasonably necessary for the accomplishment of said purposes. 5. churches and parsonages or convents appurtenant thereto. and thus the property is not being used “exclusively” for educational purposes. 6. Pet filed a complaint in the court a quo to annul and declare void the “Notice of Seizure” and the “Notice of Sale” of its lot and building for non-payment of real estate taxes and penalties amounting Parties entered into a stipulation of facts adopted and embodied by the trial court in its questioned decision. notwithstanding that it keeps a lodging and a boarding house and maintains a restaurant for its members (YMCA case). Dr. should be taxed. Under the 1935 Constitution. The treasurers served upon the petitioner a Notice of Sale. offered the highest bid of P 6. 3. and improvements used exclusively for religious. not because the second floor of the same is being used by the Director and his family for residential purposes. The trial court ruled for the government. since only a portion is used for purposes of commerce. buildings. 409. petitioner availed of the instant petition for review on certiorari with prayer for preliminary injunction before SC. Instead of perfecting an appeal. and all lands. the trial court correctly arrived at the conclusion that the school building as well as the lot where it is built. it is entitled to be exempted from taxation. It must be stressed however. the sale being held on the same day. Abra. . a. The certificate of sale was correspondingly issued to him. Facts: 1. and Republic Act No. but because the first floor thereof is being used for commercial purposes. an institution used exclusively for religious. nor by jurisprudence. But the use of the school building or lot for commercial purposes is neither contemplated by law. 8. and as such. Petitioner Abra Valley College is an educational corporation and institution of higher learning duly incorporated with the SEC. expressly grants exemption from realty taxes for “Cemeteries.” This constitution is relative to the Assessment Law. 2.000 on public auction involving the sale of the college lot and building. also qualifies for exemption because this constitutes incidental use in religious functions (Bishop of Nueva Segovia case). b. Municipal and Provincial treasurers issued a Notice of Seizure upon the petitioner for the college lot and building for the satisfaction of said taxes thereon. charitable or educational purposes. holding that the second floor of the building is being used by the director for residential purposes and that the ground floor used and rented by Northern Marketing Corporation. The 1935 Philippine Constitution. 7. A lot which is not used for commercial purposes but serves solely as a sort of lodging place. However. a commercial establishment. reasonable emphasis has always been made that exemption extends to facilities which are incidental to and reasonably necessary for the accomplishment of the main purposes.

Ruling: YES. buildings and improvements" are beyond its taxing power.Herrera v QCBAA Doctrine: The exemption in favour of property used exclusively for charitable or educational purpose is not limited to property actually indispensable therefore. stating that the same was established for charitable and humanitarian purposes and not for commercial gain. property used to provide housing facilities for interns. The exemption was granted effective years 1953 to 1955. the Assessor reclassified the properties from “exempt” to “taxable” effective 1956. Catherine’s Hospital is a charitable institution exempt from taxation.. The exemption in favour of property used exclusively for charitable or educational purpose is not limited to property actually indispensable therefore. and recreational facilities for student nurses. if it deems fit to do so." pursuant to the Constitution. that out 32 beds in the hospital. the Director of the Bureau of Hospitals authorized Jose V. buildings and improvements" are beyond its taxing power. Within the purview of the Constitution. a school of midwifery is also operated within the premises of the hospital. interns and residents. operating room. charitable or educational purposes shall be exempt from taxation. pay-patients. 4. In other words. but said "lands. charitable or educational purposes shall be exempt from taxation. "All lands. regardless of whether or not material profits are derived from the operation of the institutions in question. if all its funds are devoted exclusively to the maintenance of the institution as a public charity. . impose taxes upon such "profits". like other hospitals operated for profit" and that "petitioners and their family occupy a portion of the building for their residence. as it was ascertained a. building and improvements used exclusively for religious. Congress may. but extends to facilities which are incidental to and reasonably necessary for the accomplishment of said purpose. 5. the Herreras sent a letter to the Quezon City Assessor requesting exemption from payment of real estate tax on the hospital. impose taxes upon such "profits". CTA ruled that it should not be exempted from paying real estate taxes because St. but said "lands. such as in the case of hospitals — a school for training nurses. In 1953. St. delivery room. 12 of which are for pay-patients." Issue: Whether St. but extends to facilities which are incidental to and reasonably necessary for the accomplishment of said purpose. resident doctors. Herrera and Ester Ochangco Herrera to establish and operate the St. who are charged for the use of the private rooms." pursuant to the Constitution. "All lands. The admission of pay-patients does not detract from the charitable character of a hospital. however. Catherine’s Hospital is exempt from realty tax. laboratory room. 2. building and improvements used exclusively for religious. In 1952. a nurses’ home. Catherine’s Hospital. Catherine's Hospital "has a pay ward for . Congress may. 3. regardless of whether or not material profits are derived from the operation of the institutions in question. superintendents and other members of the hospital staff. if it deems fit to do so. Facts: 1.. and b. In other words. etc. In 1955..

13 square meters of the property in 1990 for only P20. On the first issue. 5. b. The petitioner’s request was denied. It was organized for the welfare and benefit of the Filipino people principally to help combat the high incidence of lung and pulmonary diseases in the Philippines. and the use and occupation of the properties. d. filed before QC Local Board of Assessment Appeals 8. and to medical or professional practitioners who use the same as their private clinics for their patients whom they charge for their professional services. Issues: 1. a. 1995 for a monthly rental of only P24. Both the land and the hospital building of the petitioner were assessed for real property taxes. almost one-half of the entire area on the left side of the building is vacant and idle c.000 a month as determined by CoA 9.663. Director of petitioner was earlier sued for graft charges for entering into a lease contract over 7. Instead of complying with the directive of the COA for the cancellation of the contract for being grossly prejudicial to the government. g. while a big portion on the right side is being leased for commercial purposes to a private enterprise known as the Elliptical Orchids and Garden Center. 2. the nature of the actual work performed. a charitable institution does not lose its character as such and its exemption from taxes simply because it derives income from paying patients. the petitioner renewed the same on March 13. thereafter.Lung Center v QC Doctrine: As a general principle. its corporate purposes. A big space at the ground floor is being leased to private parties. c. Should it be real property tax exempt Ruling: 1. h. Facts: 1. or receives subsidies from the government.000 a month. predicated on its claim that it is a charitable institution averring that a minimum of 60% of its hospital beds are exclusively used for charity patients. we hold that the petitioner is a charitable institution. when the monthly rental should be P357. It is the registered owner of a parcel of land at Quezon Avenue 3. its constitution and by-laws. Lung Center is a non-stock and non-profit entity established by virtue of PD No. 6. the elements which should be considered include the (SPASIPAC) a. so long as the money received is devoted or used altogether to the charitable object which it is intended to achieve. the character of the services rendered. 4. the methods of administration. The petitioner accepts paying and non-paying patients and receives annual subsidies from the government. To determine whether an enterprise is a charitable institution/entity or not. The petitioner filed a Claim for Exemption from real property taxes with the City Assessor. e. and no money inures to the private benefit of the persons managing or operating the institution. 2. 7. whether out-patient. f. the indefiniteness of the beneficiaries. W/N Lung Center is a charitable institution 2. or confined in the hospital. . statute creating the enterprise. 1823. and a petition was. b. Erected in the middle of the aforesaid lot is a hospital known as the Lung Center of the Philippines.000. for canteen and small store spaces.