Antonio Carpio vs The Executive Secretary

In 1990, Republic Act No. 6975 entitled “AN ACT ESTABLISHING THE PHILIPPINE NATIONAL
POLICE UNDER A REORGANIZED DEPARTMENT OF THE INTERIOR AND LOCAL
GOVERNMENT, AND FOR OTHER PURPOSES” was passed. Antonio Carpio, as a member of
the bar and a defender of the Constitution, assailed the constitutionality of the said law as he
averred that it only interferes with the control power of the president.
He advances the view that RA 6975 weakened the National Police Commission (NAPOLCOM)
by limiting its power “to administrative control” over the PNP thus, “control” remained with the
Department Secretary under whom both the NPC and the PNP were placed; that the system of
letting local executives choose local police heads also undermine the power of the president.
ISSUE: Whether or not the president abdicated its control power over the PNP and NPC by
virtue of RA 6975.
HELD: No. The President has control of all executive departments, bureaus, and offices. This
presidential power of control over the executive branch of government extends over all
executive officers from Cabinet Secretary to the lowliest clerk. Equally well accepted, as a
corollary rule to the control powers of the President, is the “Doctrine of Qualified Political
Agency”. As the President cannot be expected to exercise his control powers all at the same
time and in person, he will have to delegate some of them to his Cabinet members.
Under this doctrine, which recognizes the establishment of a single executive, “all executive
and administrative organizations are adjuncts of the Executive Department, the heads of the
various executive departments are assistants and agents of the Chief Executive, and, except in
cases where the Chief Executive is required by the Constitution or law to act in person on the
exigencies of the situation demand that he act personally, the multifarious executive and
administrative functions of the Chief Executive are performed by and through the executive
departments, and the acts of the Secretaries of such departments, performed and promulgated
in the regular course of business, are, unless disapproved or reprobated by the Chief Executive
presumptively the acts of the Chief Executive.”
Thus, and in short, “the President’s power of control is directly exercised by him over the
members of the Cabinet who, in turn, and by his authority, control the bureaus and other offices
under their respective jurisdictions in the executive department.”
Additionally, the circumstance that the NAPOLCOM and the PNP are placed under the
reorganized DILG is merely an administrative realignment that would bolster a system of
coordination and cooperation among the citizenry, local executives and the integrated law
enforcement agencies and public safety agencies created under the assailed Act, the funding of
the PNP being in large part subsidized by the national government.

Chua v. Civil Service Commission

G.R. No. 88979 (February 7, 1992)

FACTS:
RA 6683 provided benefits for early retirement and voluntary separation as well as for
involuntary separation due to reorganization. Section 2 covers those who are qualified: Sec. 2.
Coverage. – This Act shall cover all appointive officials and employees of the
National Government. The benefits authorized under this Act shall apply to all regular,
temporary, casual and emergency employees, regardless of age, who have rendered at least a
total of two (2) consecutive years of government service as of the date of
separation…” Petitioner Lydia Chua, believing that she is qualified to avail of the benefits
of the program, filed an application on January 30, 1989 with Respondent Administration,
which, however, denied the same. Recourse by the petitioner to Respondent Commission
yielded the same result.

ISSUE:
W/N Petitioner’s status as a co-terminus employee is excluded from the benefits of RA
6683 (Early Retirement Law).

HELD:
The petition is granted. The Early Retirement Law would violate the
equal protection clause of the constitution if the Supreme Court were to sustain Respond
ent’s submission that the benefits of said law are to be denied a class of government
employees who are similarly situated as those covered by the said law. The court applied the
doctrine of necessary implication in deciding this case.

G.R. NO. 187485 CIR V. SAN ROQUE POWER CORPORATION

FACTS:
San Roque is a domestic corporation with a principal office at Barangay San Roque, SanManuel, Pangasinan. It
was incorporated to design, construct, erect, assemble, own,commission and operate power-generating plants
and related facilities pursuant to and under contract with the Phil. Government.San Roque is VAT Registered as
a seller of services. It is also registered with the Board of Investments ("BOI") on a preferred pioneer status, to
engage in the design, construction,erection, assembly, as well as to own, commission, and operate electric
power-generatingplants and related activities.

In 1997, [San Roque] entered into a Power Purchase Agreement ("PPA") with NPC. The PPAprovides that [San
Roque] shall be responsible for the design, construction, installation,completion, testing and commissioning of the
Power Station and shall operate and maintain thesame, subject to NPC instructions. During the
cooperation period of twenty-five (25) yearscommencing from the completion date of the Power Station,
NPC will take and pay for allelectricity available from the Power Station.On the construction and development of
the San Roque Multi- Purpose, [San Roque] allegedlyincurred, excess input VAT which it declared in its Quarterly
VAT Returns filed for the sameyear. [San Roque] duly filed with the BIR separate claims for refund, representing
unutilizedinput taxes as declared in its VAT returns for taxable year 2001.On March 28, 2003, [San Roque] filed
amended Quarterly VAT Returns for the year 2001 sinceit increased its unutilized input VAT. Consequently, [San
Roque] filed with the BIR a separateamended claims for refund.
[CIR’s] inaction on the subject claims led to the filing of the Petition for Review with the
CTA-Division on April 10, 2003.Trial of the case ensued and on July 20, 2005, the case was submitted for
decision.

CTA Division’s Ruling:

The CTA Second Division initially denied San Roque’s claim

on the following grounds: lack of recorded zero-rated or effectively zero-rated sales; failure to submit documents
specificallyidentifying the purchased goods/services related to the claimed input VAT which were includedin its
Property, Plant and Equipment account; and failure to prove that the related constructioncosts were capitalized in
its books of account and subjected to depreciation.The CTA 2nd Division required San Roque to show that it
complied with the followingrequirements of Section 112(B) of Republic Act No. 8424 (RA 8424)17 to be entitled to
a taxrefund or credit of input VAT attributable to capital goods imported or locally purchased: (1) it isa VAT-
registered entity; (2) its input taxes claimed were paid on capital goods duly supported byVAT invoices and/or
official receipts; (3) it did not offset or apply the claimed input VATpayments on capital goods against any output
VAT liability; and (4) its claim for refund was filedwithin the two-year prescriptive period both in the administrative
and judicial levels.The CTA Second Division found that San Roque complied with the first, third, and
fourthrequirements, thus:The fact that [San Roque] is a VAT registered entity is admitted (par. 4, Facts Admitted,
JointStipulation of Facts, Records, p. 157). It was also established that the instant claim of
₱560,200,823.14 is already net of the ₱11,509.09 output tax declared by [San Roque] in its
amended VAT return for the first quarter of 2001. Moreover, the entire amount of

ABAKADA GURO PARTYLIST vs. PURISIMA- Attrition Act of 2005, R.A. No. 9335

FACTS:
Petitioners question the Attrition Act of 2005 and contend that by establishing a system of
rewards and incentives when they exceed their revenue targets, the law (1) transforms the
officials and employees of the BIR and BOC into mercenaries and bounty hunters; (2) violates
the constitutional guarantee of equal protection as it limits the scope of the law to the BIR and
BOC; (3) unduly delegates to the President the power to fix revenue targets without sufficient
standards; and (4) violates the doctrine of separation of powers by creating a Congressional
Oversight Committee to approve the law’s implementing rules.

ISSUE:
Is R.A. No. 9335 constitutional?

HELD:
YES. R.A. No. 9335 is constitutional, except for Section 12 of the law which creates a Joint
Congressional Oversight Committee to review the law’s IRR.
That RA No. 9335 will turn BIR and BOC employees and officials into “bounty hunters and
mercenaries” is purely speculative as the law establishes safeguards by imposing liabilities on
officers and employees who are guilty of negligence, abuses, malfeasance, etc. Neither is the
equal protection clause violated since the law recognizes a valid classification as only the BIR
and BOC have the common distinct primary function of revenue generation. There are sufficient
policy and standards to guide the President in fixing revenue targets as the revenue targets are
based on the original estimated revenue collection expected of the BIR and the BOC.

However, the creation of a Joint Congressional Oversight Committee for the purpose of
reviewing the IRR formulated by agencies of the executive branch (DOF, DBM, NEDA, etc.) is
unconstitutional since it violates the doctrine of separation of powers since Congress arrogated
judicial power upon itself.

Association of Philippine Coconut Desiccators vs Philippine Coconut Authority

The Philippine Coconut Authority (PCA) was created by Presidential Decree No. 232 as an
independent public corporation to promote the rapid integrated development and growth of the
coconut and other palm oil industry in all its aspects and to ensure that coconut farmers become
direct participants in, and beneficiaries of, such development and growth through a regulatory
scheme set up by law.
PCA is also in charge of the issuing of licenses to would-be coconut plant operators. In March
1993, however, PCA issued Board Resolution No. 018-93 which no longer require those wishing
to engage in coconut processing to apply for licenses as a condition for engaging in such
business. The purpose of which is to promote free enterprise unhampered by protective
regulations and unnecessary bureaucratic red tapes. But this caused cut-throat competition
among operators specifically in congested areas, underselling, smuggling, and the decline of
coconut-based commodities. The Association of Philippine Coconut Desiccators (APCD) then
filed a petition for mandamus to compel PCA to revoke B.R. No. 018-93.
ISSUE: Whether or not the petition should be granted.
HELD: Yes. Our Constitutions, beginning with the 1935 document, have repudiated laissez-faire
as an economic principle. Although the present Constitution enshrines free enterprise as a
policy, it nonetheless reserves to the government the power to intervene whenever necessary to
promote the general welfare. As such, free enterprise does not call for the removal of “protective
regulations” for the benefit of the general public. This is so because under Art. 12, Secs. 6 and
9, it is very clear that the government reserves the power to intervene whenever necessary to
promote the general welfare and when the public interest so requires.

Commissioner of Customs vs. Hypermix Feeds

Accordingly, in considering a legislative rule a court is free to make three inquiries: (i) whether
the rule is within the delegated authority of the administrative agency; (ii) whether it is
reasonable; and (iii) whether it was issued pursuant to proper procedure. But the court is
not free to substitute its judgment as to the desirability or wisdom of the rule for the legislative
body, by its delegation of administrative judgment, has committed those questions to
administrative judgments and not to judicial judgments. In the case of an interpretative rule, the
inquiry is not into the validity but into the correctness or propriety of the rule. As a matter of
power a court, when confronted with an interpretative rule, is free to (i) give the force of law to
the rule; (ii) go to the opposite extreme and substitute its judgment; or (iii) give some
intermediate degree of authoritative weight to the interpretative rule.

Considering that the questioned regulation would affect the substantive rights of
respondent as explained above, it therefore follows that petitioners should have applied the
pertinent provisions of Book VII, Chapter 2 of the Revised Administrative Code, to wit:

Section 3. Filing. – (1) Every agency shall file with the University of the Philippines Law Center
three (3) certified copies of every rule adopted by it. Rules in force on the date of effectivity of
this Code which are not filed within three (3) months from that date shall not thereafter be the
bases of any sanction against any party of persons.
Section 9. Public Participation. - (1) If not otherwise required by law, an agency shall, as far as
practicable, publish or circulate notices of proposed rules and afford interested parties the
opportunity to submit their views prior to the adoption of any rule.
(2) In the fixing of rates, no rule or final order shall be valid unless the proposed rates shall have
been published in a newspaper of general circulation at least two (2) weeks before the first
hearing thereon.
(3) In case of opposition, the rules on contested cases shall be observed.

De Jesus vs. Commission on Audit | Carpio

FACTS

 An auditing team from the COA Regional Office No. VIII audited the accounts of the
Catbalgan Water District (CWD).
 The team discovered that between May to December 1997 and April to June 1998,
petitioners, members of CWD’s Interim Board of Directors (Board), granted themselves
particular benefits which were authorized under Resolution No. 313, series of 1995, of the
Local Water Utilities Administration (LWUA).
 The team issued notices of disallowance of the payment of the particular benefits to the
Board members on the ground that they run counter to Sec. 131 of P.D. 198.
 The disallowance was affirmed by the COA Regional Office No. VIII and, eventually, the
COA itself.
 Hence, this petition.

ISSUES/HELD

Does the COA have jurisdiction to examine and audit the petitioners? – YES.

RATIONALE

 Sc. 2, Subdivision D, Art. IX of the Constitution and existing laws mandate the COA to
audit all governmental agencies, including government-owned and controlled
corporations with original charters.
o Indeed, the Constitution specifically vests in the COA the authority to determine whether
government entities comply with law and regulations in disbursing government funds,
and to disallow illegal or irregular disbursements of government funds.
 A water district is a government-owned and controlled corporation with a special
charter since it is created pursuant to a special law, P.D. 198 and is, thus, subject to
the jurisdiction of the COA since the COA has the authority to investigate whether

1
Compensation – Each director shall receive a per diem, to be determined by the board, for each meeting of the board actually
attended by him, but no director shall receive per diems in any given month in excess of the equivalent of the total per diems of
four meetings in any given month. No director shall receive other compensation for services to the district.
Any per diem in excess of P50 shall be subject to approval of the Administration.
 directors, officials or employees of GOCCs, receiving additional allowances and
bonuses, are entitled to such.
 The theory of petitioners that the COA usurped the functions of the LWUA in
construing P.D. 198 would lead to the absurd situation where the board of an
administrative agency, by the mere act of issuing a resolution, can put to naught the
broad and extensive powers granted to the COA by the Constitution.
o This will prevent the COA from discharging its constitutional duty as an effective, efficient
and independent watchdog of the financial operations of the government.
On the merits:

 Sec. 13 of P.D. 198, by specifying the compensation which a director is entitled to receive
and by limiting the amount s/he is allowed to receive in a month and by providing that no
other compensation may be received than the amount provided for per clients, clearly
indicates that directors of water districts are authorized to receive only the per diem
authorized by law and no other compensation or allowance in whatever form.
 Considering, however, that petitioners received the additional allowances and bonuses in
good faith under the honest belief that LWUA Board Resolution No. 313 authorized such
payment, they need not refund the allowances and bonuses they received but disallowed by
the COA.

Administrative Law Case: Smart Communications, Inc. Et Al. vs. National Telecommunications
Commission (Ntc) G.R. 151908, August 12, 2003

QUASI-LEGISLATIVE & QUASI-JUDICIAL POWERS; RULE ON EXHAUSTION OF

ADMINISTRATIVE REMEDIES; DOCTRINE OF PRIMARY JURISDICTION;WHEN
APPLICABLE

SMART COMMUNICATIONS, INC. ET AL. V. NATIONAL TELECOMMUNICATIONS

COMMISSION (NTC)
G.R. 151908, August 12, 2003

Facts: The NTC issued Billing Circular 13-6-2000 which promulgated rules and regulations on
the billing of telecommunications services. Petitioners filed with the RTC a petition to declare the
circular as unconstitutional. A motion to dismiss was filed by the NTC on the ground of
petitioner’s to exhaust administrative remedies. The RTC denied the motion to dismiss but on
certiorari, the CA reversed RTC.

Held: 1. Administrative bodies had (a) quasi-legislative or rule-making powers and (b) quasi-
judicial or administrative adjudicatory powers. Quasi-legislative or rule-making power is the
power to make rules and regulations which results in delegated legislation that is within the
confines of the granting statute and the doctrine of non-delegability and separability of powers.
To be valid, such rules and regulations must conform to, and be consistent with, the provisions
of enabling statute.
Quasi-judicial or administrative adjudicatory power is the power to hear and determine
questions of fact to which the legislative policy is to apply and to decide in accordance with the
standards laid down by law itself in enforcing and administering the same law. In carrying out
their quasi-judicial functions, the administrative officers or bodies are required to investigate
facts or ascertain the existence of facts, hold hearings, weigh evidence, and draw conclusions
from them for their official action and exercise of discretion in a judicial.
2. The determination of whether a specific rule or set of rules issued by an administrative body
contravenes the law or the constitution is within the judicial power as defined by the Constitution
which is “ the duty of the Courts of justice to settle actual controversies involving rights which
are legally demandable and enforceable, and to determine whether or not there haw been a
grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or
instrumentality of the Government.” The NTC circular was issued pursuant to its quasi-
legislative or rule-making power. Hence, the action must be filed directly with the regular courts
without requiring exhaustion of administrative remedies.
3. Where the act of administrative agency was performed pursuant to its quasi-judicial function,
exhaustion of administrative remedy is required, before going to court.
4. The doctrine of primary jurisdiction applies only where the administrative agency exercises its
quasi-judicial or adjudicatory function. Thus, in cases involving specialized disputes, the same
must be referred to an administrative agency of special competence pursuant to the doctrine of
primary jurisdiction. This doctrine of primary jurisdiction applies where the claim requires the
resolution of issues which, under a regulatory scheme, has been placed within the special
competence of an administrative body. In such case, the judicial process is suspended pending
referral of such issues to the administrative body for its view.

Paat v CA (Natural Resources)

PAAT v CA

G.R. No. 111107

January 10, 1997

FACTS:

On May 19, 1989 when the truck of private respondent Victoria de Guzman while on its way to
Bulacan from San Jose, Baggao, Cagayan, was seized by the Department of Environment and
Natural Resources (DENR, for brevity) personnel in Aritao, Nueva Vizcaya because the driver
could not produce the required documents for the forest products found concealed in the truck.

LOWER COURTS:
* CENRO: Petitioner Jovito Layugan, the Community Environment and Natural Resources
Officer (CENRO) in Aritao, Cagayan, issued on May 23, 1989 an order of confiscation of the
truck and gave the owner thereof fifteen (15) days within which to submit an explanation why
the truck should not be forfeited. Private respondents, however, failed to submit the required
explanation.

* RED- DENR: On June 22, 1989,i[1] Regional Executive Director Rogelio Baggayan of DENR
sustained petitioner Layugan's action of confiscation and ordered the forfeiture of the truck
invoking Section 68-A of Presidential Decree No. 705 as amended by Executive Order No.
277. Private respondents filed a letter of reconsideration dated June 28, 1989 of the June 22,
1989 order of Executive Director Baggayan, which was, however, denied in a subsequent order
of July 12, 1989.ii[2]

* DENR-SECRETARY (Pending resolution)

* RTC (action for replevin): denied motion to dismiss by Paat (DENR-RED)

* CA (review): denied, has legal questions involved.

ISSUES & RULINGS:

(1) Without violating the principle of exhaustion of administrative remedies, may an action for
replevin prosper to recover a movable property which is the subject matter of an administrative
forfeiture proceeding in the Department of Environment and Natural Resources pursuant to
Section 68-A of P. D. 705, as amended, entitled The Revised Forestry Code of the
Philippines?

NO, before a party is allowed to seek the intervention of the court, it is a pre-condition that he
should have availed of all the means of administrative processes afforded him. Hence, if a
remedy within the administrative machinery can still be resorted to by giving the administrative
officer concerned every opportunity to decide on a matter that comes within his jurisdiction then
such remedy should be exhausted first before court's judicial power can be sought. The
premature invocation of court's intervention is fatal to one's cause of action.

(2) Are the Secretary of DENR and his representatives empowered to confiscate and forfeit
conveyances used in transporting illegal forest products in favor of the government?
YES.

“SECTION 68-A. Administrative Authority of the Department or His Duly Authorized

Representative To Order Confiscation. In all cases of violation of this Code or other forest laws,
rules and regulations, the Department Head or his duly authorized representative, may order the
confiscation of any forest products illegally cut, gathered, removed, or possessed or abandoned,
and all conveyances used either by land, water or air in the commission of the offense and to
dispose of the same in accordance with pertinent laws, regulations and policies on the matter.”
(Underline ours)

It is, thus, clear from the foregoing provision that the Secretary and his duly authorized
representatives are given the authority to confiscate and forfeit any conveyances utilized in
violating the Code or other forest laws, rules and regulations. The phrase “to dispose of the
same” is broad enough to cover the act of forfeiting conveyances in favor of the government.
The only limitation is that it should be made “in accordance with pertinent laws, regulations or
policies on thae matter.”