Planters products inc

vs
Fertiphil Corp

FACTS:

President Ferdinand Marcos, exercising his legislative powers, issued LOI No.
1465 which provided, among others, for the imposition of a capital recovery
component (CRC) on the domestic sale of all grades of fertilizers which resulted in
having Fertiphil paying P10/bag sold to the Fertilizer and Pesticide Authority (FPA).
FPA remits its collection to Far East Bank and Trust Company who applies to the
payment of corporate debts of Planters Products Inc. (PPI)

After the Edsa Revolution, FPA voluntarily stopped the imposition of the P10
levy. Upon return of democracy, Fertiphil demanded a refund but PPI
refused. Fertiphil filed a complaint for collection and damages against FPA and PPI
with the RTC on the ground that LOI No. 1465 is unjust, unreasonable oppressive,
invalid and unlawful resulting to denial of due process of law.

FPA answered that it is a valid exercise of the police power of the state in
ensuring the stability of the fertilizing industry in the country and that Fertiphil did
NOT sustain damages since the burden imposed fell on the ultimate consumers.
RTC and CA favoured Fertiphil holding that it is an exercise of the power of taxation
ad is as such because it is NOT for public purpose as PPI is a private corporation.

Note: LOI (Letter of Instruction),

ISSUE:

W/N LOI 1465 is an invalid exercise of the power of taxation.

RULING:
Yes, it is invalid. It is a robbery for the State to tax the citizen and use the
funds generation for a private purpose. Public purpose does NOT only pertain to
those purpose which are traditionally viewed as essentially governmental function
such as building roads and delivery of basic services, but also includes those purposes
designed to promote social justice. Thus, public money may now be used for the
relocation of illegal settlers, low-cost housing and urban or agrarian reform.