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Tolentino v.

Secretary of Finance - 249 SCRA 635

FACTS:
Petitioners (Tolentino, Kilosbayan, Inc., Philippine Airlines, Roco, and Chamber of Real Estate
and Builders Association) seek reconsideration of the Court’s previous ruling dismissing the
petitions filed for the declaration of unconstitutionality of R.A. No. 7716, the Expanded Value-
Added Tax Law. Petitioners contend that the R.A. did not “originate exclusively” in the HoR as
required by Article 6, Section 24 of the Constitution. The Senate allegedly did not pass it on
second and third readings, instead passing its own version. Petitioners contend that it should
have amended the House bill by striking out the text of the bill and substituting it with the text
of its own bill, so as to conform with the Constitution.

ISSUE:
W/N the R.A. is unconstitutional for having “originated” from the Senate, and not the HoR.

HELD:
Petition is unmeritorious. The enactment of the Senate bill has not been the first instance
where the Senate, in the exercise of its power to propose amendments to bills (required to
originate in the House), passed its own version. An amendment by substitution (striking out the
text and substituting it), as urged by petitioners, concerns a mere matter of form, and
considering the petitioner has not shown what substantial difference it would make if Senate
applied such substitution in the case, it cannot be applied to the case at bar. While the
aforementioned Constitutional provision states that bills must “originate exclusively in the
HoR,” it also adds, “but the Senate may propose or concur with amendments.” The Senate may
then propose an entirely new bill as a substitute measure. Petitioners erred in assuming the
Senate version to be an independent and distinct bill. Without the House bill, Senate could not
have enacted the Senate bill, as the latter was a mere amendment of the former. As such, it did
not have to pass the Senate on second and third readings.

Petitioners question the signing of the President on both bills, to support their contention that
such are separate and distinct. The President certified the bills separately only because the
certification had to be made of the version of the same revenue bill which AT THE MOMENT
was being considered.

Petitioners question the power of the Conference Committee to insert new provisions. The
jurisdiction of the conference committee is not limited to resolving differences between the
Senate and the House. It may propose an entirely new provision, given that such are germane
to the subject of the conference, and that the respective houses of Congress subsequently
approve its report.

Petitioner PAL contends that the amendment of its franchise by the withdrawal of its
exemption from VAT is not expressed in the title of the law, thereby violating the Constitution.
The Court believes that the title of the R.A. satisfies the Constitutional Requirement.

No. 273 long before the R. a bill originating from the Lower House may undergo extensive changes while in the Senate. The latter merely EXPANDS the base of the tax. the taxing power having authority to make reasonable and natural classifications for purposes of taxation. The Pres.O. House of Rep. the State does not forever waive the exercise of its sovereign prerogative. Petitioners claim that the R. Senate finished debates on the bill and had the 2nd and 3rd reading of the Bill on the same day . It is enough that the statute applies equally to all persons. Petitioners fail to take into consideration the fact that the VAT was already provided for in E. one title rule. In fact. Presidential certification dispensed the requirement not only of printing but also reading the bill in 3 separate days. petitioners contend that the R.. they were exempt from taxes. Amending for these Purposes…) . After the passage of EVAT. violates due process. equal protection and contract clauses and the rule on taxation. PAL contended that neither the House or Senate bill provided for the removal of the exemption from taxes of PAL and that it was inly made after the meeting of the Conference Committee w/c was not expressed in the title of RA 7166 Held: (1) YES! Court said that it is not the law which should originate from the House of Rep. in accordance with sec 24. Procedural Issue: (1) WoN RA 7716 originated exclusively from the House of Rep.one subject. certification . filed House Bill 11197 (An Act Restructuring the VAT System to Widen its Tax Base and Enhance its Admin. having removed them from the exemption to pay VAT. Bill was deliberated upon in the Conference Committee and become enrolled bill which eventually became the EVAT law. Lastly. NOTE: This case was filed by PAL because before the EVAT Law. Also. certified that the Senate bill was urgent. art 6 . they were already included. Upon receipt of Senate. The Constitution does not prohibit the filing in the Senate of a substitute bill in anticipation of its receipt of the House bill.A. Senate can introduce a separate and distinct bill other than the one the Lower House proposed. but the revenue bill which was required to originate from the House of Rep. By granting exemptions. violates their press freedom and religious liberty.A. the Senate accepted the Pres. was enacted.A. art 6 of Consti (2) WoN the Senate bill violated the “three readings on separate days” requirement of the Consti (3) WoN RA 7716 violated sec 26(1). (2) NO. The inititiative must ocme from the Lower House because they are elected in the district level – meaning they are expected to be more sensitive to the needs of the locality. the law could take back the privilege anytime without offense to the Constitution. forms and corporations placed in s similar situation. Equality and uniformity in taxation means that all taxable articles or kinds of property of the same class be taxed at the same rate. so long as action by Senate is withheld pending the receipt of the House bill. Suffice it to say that since the law granted the press a privilege. of Finance Facts: . Tolentino v Sec. Senate filed another bill completely different from that of the House Bill .

It is also in the power of Congress to amend. No. alter. THE SECRETARY OF FINANCE Case Digest ARTURO M. Court said that the title states that the purpose of the statute is to expand the VAT system and one way of doing this is to widen its base by withdrawing some of the exemptions granted before. One subject rule is intended to prevent surprise upon Congress members and inform people of pending legislation.A. No. bartered or exchanged or of the gross receipts from the sale or exchange of services. TOLENTINO VS. is only slightly less abstract but nonetheless hypothetical. fetter the exercise of the taxing power of the State. For not only are existing laws read into contracts in order to fix obligations as between parties. the Contract Clause has never been thought as a limitation on the exercise of the State's power of taxation save only where a tax exemption has been granted for a valid consideration. The Supreme Court the contention of CREBA. It is equivalent to 10% of the gross selling price or gross value in money of goods or properties sold. Republic Act No. . but the reservation of essential attributes of sovereign power is also read into contracts as a basic postulate of the legal order.(3) No.” ISSUE: Whether R. In the case of PAL. It is enough to say that the parties to a contract cannot. sec 10 of the Bill of Rights.R. III. 7716 seeks to widen the tax base of the existing VAT system and enhance its administration by amending the National Internal Revenue Code. THE SECRETARY OF FINANCE and THE COMMISSIONER OF INTERNAL REVENUE 1994 Aug 25 G. repeal grant of franchises for operation of public utility when the common good so requires. The Chamber of Real Estate and Builders Association (CREBA) contends that the imposition of VAT on sales and leases by virtue of contracts entered into prior to the effectivity of the law would violate the constitutional provision of “non-impairment of contracts. The policy of protecting contracts against impairment presupposes the maintenance of a government which retains adequate authority to secure the peace and good order of society. that the imposition of the VAT on the sales and leases of real estate by virtue of contracts entered into prior to the effectivity of the law would violate the constitutional provision of non-impairment of contracts. barter or exchange of goods and properties as well as on the sale or exchange of services. through the exercise of prophetic discernment. 115455 235 SCRA 630 FACTS: The valued-added tax (VAT) is levied on the sale. 7716 is unconstitutional on ground that it violates the contract clause under Art. they did not know of their situation not because of any defect in title but because they might have not noticed its publication until some event calls attention to its existence. In truth. TOLENTINO VS. RULING: No.

Secs. There is also a contention that S. 24 of the Constitution will not bear analysis. (3) That the law does not abridge freedom of speech. the petitions are DISMISSED.R. the members of the House can be expected to be more sensitive to the local needs and problems. private bills and bills of local application must come from the House of Representatives on the theory that. it is not the law but the revenue bill which is required by the Constitution to originate exclusively in the House of Representatives. but only by a specific. Sec. Tolentino vs. To insist that a revenue statute and not only the bill which initiated the legislative process culminating in the enactment of the law must substantially be the same as the House bill would be to deny the Senate’s power not only to concur with amendments but also to propose amendments. the Supreme Court held the validity of Republic Act No.Such is not the case of PAL in G. because it is in fact the result of the consolidation of 2 distinct bills. No. RA 7716 seeks to widen the tax base of the existing VAT system and enhance its administration by amending the National Internal Revenue Code.beyond those prescribed by the Constitution . what the Constitution simply means is that the initiative for filing revenue. tariff or tax bills. nor deny to any of the parties the right to an education. H. To begin with. the Court holds: (1) That the procedural requirements of the Constitution have been complied with by Congress in the enactment of the statute. is that the removal of its tax exemption cannot be made by a general. Further. No. 115852. No. January 25. That upon the certification of a bill by the President the requirement of 3 readings on separate days . Indeed. so long as action by the Senate as a body is withheld pending receipt of the House bill. 1994 Sunday. and the Court does not understand it to make this claim. as discussed above. in view of the absence of a factual foundation of record. claims that the law is regressive. August 25. No. Issue: Whether or not RA 7716 violates Art. nor interfere with the free exercise of religion. 115455. 2009 Posted by Coffeeholic Writes Labels: Case Digests. 1630 as urgent. 24 and 26(2) of the Constitution Held: The argument that RA 7716 did not originate exclusively in the House of Representatives as required by Art. But this was because the President had certified S. 1630. Sec. bills authorizing an increase of the public debt. WHEREFORE. Rather. its position. No. VI. 7716 in its formal and substantive aspects as this has been raised in the various cases before it. 24 of the Constitution.have been observed is precluded by the principle of separation of powers. and (4) That.R. oppressive and confiscatory and that it violates vested rights protected under the Contract Clause are prematurely raised and do not justify the grant of prospective relief by writ of prohibition. To sum up. The presidential certification dispensed with the requirement not only of printing but also that of reading the bill on separate days. 11197 and S. Nor does the Constitution prohibit the filing in the Senate of a substitute bill in anticipation of its receipt of the bill from the House. VI. The next argument of the petitioners was that S. There are various suits challenging the constitutionality of RA 7716 on various grounds. elected as they are from the districts. Secretary of Finance G. expression or the press. VI. 1630 did not pass 3 readings on separate days as required by the Constitution because the second and third readings were done on the same day. barter or exchange of goods and properties as well as on the sale or exchange of services. 1630 did not pass 3 readings as required by the Constitution. No. (2) That judicial inquiry whether the formal requirements for the enactment of statutes . Political Law Facts: The value-added tax (VAT) is levied on the sale. No. One contention is that RA 7716 did not originate exclusively in the House of Representatives as required by Art. law.

7716." The VAT is. barter. the law discriminates against the press. It is not a license tax. It is not a tax on the exercise of a privilege. "even nondiscriminatory taxation of constitutionally guaranteed freedom is unconstitutional. "it is one thing to impose a tax on income or property of a preacher. is mainly for regulation. its application to the press or to religious groups. It is quite another thing to exact a tax on him for delivering a sermon. At any rate.and of printing and distribution can be dispensed with is supported by the weight of legislative practice. otherwise known as the Expanded Value-Added Tax Law. is valid. is unconstitutional. ***** Tolentino vs. which. unlike an ordinary tax. different. As the U. much less a constitutional right. it is averred. Now it is contended by the PPI that by removing the exemption of the press from the VAT while maintaining those granted to others. Supreme Court put it. such as the Jehovah's Witnesses. Secretary of Finance Facts: Theseare motions seeking reconsideration of our decision dismissing the petitions filed in these cases for the declaration of unconstitutionality of R. although its application to others. in connection with the latter's sale of religious books and pamphlets.A. lease or exchange of goods or properties or the sale or exchange of services and the lease of properties purely for revenue purposes. Hence.S. It is imposed on the sale. The Court was speaking in that case of a license tax. such those selling goods. however. To subject the press to its payment is not to burden the exercise of its right any more than to make the press pay income tax or subject it to general regulation is not to violate its freedom under the Constitution . No." Issue: Does sales tax on bible sales violative of religious freedom? Held: No. Its imposition on the press is unconstitutional because it lays a prior restraint on the exercise of its right.