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CHAMBER OF REAL ESTATE AND BUILDERS ASSOCIATIONS,

INC., (CREBA), petitioner, vs. THE COMMISSIONER OF
INTERNAL REVENUE, respondent.

G.R. No. 115781. August 25, 1994.*

630 SUPREME COURT REPORTS ANNOTATED KILOSBAYAN, INC., JOVITO R. SALONGA, CIRILO A. RIGOS,
ERME CAMBA, EMILIO C. CAPULONG, JR., JOSE T. APOLO,
Tolentino vs. Secretary of Finance
EPHRAIM TENDERO, FERNANDO SANTIAGO, JOSE ABCEDE,
* CHRISTINE TAN, FELIPE L. GOZON, RAFAEL G. FERNANDO,
G.R. No. 115455. August 25, 1994. RAOUL V. VICTORINO, JOSE CUNANAN, QUINTIN S.
DOROMAL, MOVEMENT OF ATTORNEYS FOR
ARTURO M. TOLENTINO, petitioner, vs. THE SECRETARY OF BROTHERHOOD, INTEGRITY AND NATIONALISM, INC.
FINANCE and THE COMMISSIONER OF INTERNAL REVENUE, (“MABINI”), FREEDOM FROM DEBT COALITION, INC.,
respondents. PHILIPPINE BIBLE SOCIETY, INC., and WIGBERTO TAÑADA,
petitioners, vs. THE EXECUTIVE SECRETARY, THE
*
G.R. No. 115525. August 25, 1994. SECRETARY OF FINANCE, THE COMMISSIONER OF
INTERNAL REVENUE and THE COMMISSIONER OF
JUAN T. DAVID, petitioner, vs. TEOFISTO T. GUINGONA, JR., as CUSTOMS, respondents.
Executive Secretary; ROBERTO DE OCAMPO, as Secretary of
Finance; LIWAYWAY VINZONS-CHATO, as Commissioner of G.R. No. 115852. August 25, 1994.*
Internal Revenue; and their AUTHORIZED AGENTS OR
REPRESENTATIVES, respondents. PHILIPPINE AIRLINES, INC. petitioner, vs. THE SECRETARY
OF FINANCE, and COMMISSIONER OF INTERNAL REVENUE,
*
G.R. No. 115543. August 25, 1994. respondents.

RAUL S. ROCO and the INTEGRATED BAR OF THE 632

PHILIPPINES, petitioners, vs. THE SECRETARY OF THE
DEPARTMENT OF FINANCE; THE COMMISSIONERS OF THE 632 SUPREME COURT REPORTS ANNOTATED
BUREAU OF INTERNAL REVENUE AND BUREAU OF
CUSTOMS, respondents. Tolentino vs. Secretary of Finance

G.R. No. 115873. August 25, 1994.*

_______________

* EN BANC. COOPERATIVE UNION OF THE PHILIPPINES, petitioners, vs.

HON. LIWAYWAY V. CHATO, in her capacity as the Commissioner
631 of Internal Revenue, HON. TEOFISTO T. GUINGONA, JR., in his
capacity as Executive Secretary, and HON. ROBERTO B. DE
VOL. 235, AUGUST 25, 1994 631 OCAMPO, in his capacity as Secretary of Finance, respondents.

Tolentino vs. Secretary of Finance

G.R. No. 115931. August 25, 1994.*

G.R. No. 115544. August 25, 1994.*

PHILIPPINE PRESS INSTITUTE, INC.; EGP PUBLISHING CO.,
INC.; KAMAHALAN PUBLISHING CORPORATION;
PHILIPPINE JOURNALISTS, INC.; JOSE L. PAVIA; and OFELIA
L. DIMALANTA, petitioners, vs. HON. LIWAYWAY V. CHATO, in
her capacity as Commissioner of Internal Revenue; HON.
TEOFISTO T. GUINGONA, JR., in his capacity as Executive
Secretary; and HON. ROBERTO B. DE OCAMPO, in his capacity
as Secretary of Finance, respondents.
G.R. No. 115754. August 25, 1994.*
PHILIPPINE EDUCATIONAL PUBLISHERS ASSOCIATION,
INC., and ASSOCIATION OF PHILIPPINE BOOKSELLERS,
petitioners, vs. HON. ROBERTO B. DE OCAMPO, as the Secretary
of Finance; HON. LIWAYWAY V. CHATO, as the Commissioner of
Internal Revenue and HON. GUILLERMO PARAYNO, JR., in his
capacity as the Commissioner of Customs, respondents.
Constitutional Law; Statutes; Taxation; Origin of revenue bills; A bill
originating in the House of Representatives may undergo such extensive
changes in the Senate that the result may be a rewriting of the whole; As a
result of the Senate action, a distinct bill may be produced and to insist that
a revenue statute must substantially be the same as the House bill would be

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to deny the Senate’s power not only to “concur with amendments” but also to
“propose amendments.”—Petitioners’ contention is that Republic Act No.
7716 did not “originate exclusively” in the House of Representatives as
required by Art. VI, § 24 of the Constitution, because it is in fact the result
of the consolidation of two distinct bills, H. No. 11197 and S. No. 1630. In
this connection, petitioners point out that although Art. VI, § 24 was
adopted from the American Federal Constitution, it is notable in two
respects: the verb “shall originate” is qualified in the Philippine
Constitution by the word “exclusively” and the phrase “as on other bills” in
the American version is omitted. This means, according to them, that to be
considered as having originated in the House, Republic Act No. 7716 must
retain the essence of H. No. 11197. This argument will not bear analysis.
To begin with, it is not the law—but the revenue bill—which is required by
the Constitution to “originate exclusively” in the House of Representatives.
It is important to emphasize this, because a bill originating in the House
may undergo such extensive changes in the Senate that the result may be a
rewriting of the whole. The possibility of a third version by the conference
committee will be discussed later. At this point, what is important to
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note is that, as a result of the Senate action, a distinct bill may be
produced. 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.” It would be to violate the coequality of legislative power of
the two houses of Congress and in fact make the House superior to the
Senate.
Same; Same; Same; Same; Legislative power is vested in the Congress
of the Philippines, consisting of “a Senate and a House of Representatives,”
not in any particular chamber.—The contention that the constitutional
design is to limit the Senate’s power in respect of revenue bills in order to
compensate for the grant to the Senate of the treaty-ratifying power and
thereby equalize its powers and those of the House overlooks the fact that
the powers being compared are different. We are dealing here with the
legislative power which under the Constitution is vested not in any
particular chamber but in the Congress of the Philippines, consisting of “a
Senate and a House of Represen-tatives.” The exercise of the treaty-
ratifying power is not the exercise of legislative power. It is the exercise of a
check on the executive power. There is, therefore, no justification for
comparing the legislative powers of the House and of the Senate on the
basis of the possession of such nonlegislative power by the Senate. The
possession of a similar power by the U.S. Senate has never been thought of
as giving it more legislative powers than the House of Representatives.
Same; Same; Same; Same; There is really no difference between the
Senate preserving the House Bill up to the enacting clause and then writing
its own version following the enacting clause and, on the other hand,
separately presenting a bill of its own on the same subject matter.—It is
insisted, however, that S. No. 1630 was passed not in substitution of H. No.
11197 but of another Senate bill (S. No. 1129) earlier filed and that what
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the Senate did was merely to “take [H. No. 11197] into consideration” in
enacting S. No. 1630. There is really no difference between the Senate
preserving H. No. 11197 up to the enacting clause and then writing its own
version following the enacting clause (which, it would seem, petitioners
admit is an amendment by substitution), and, on the other hand,
separately presenting a bill of its own on the same subject matter. In either
case the result are two bills on the same subject.
Same; Same; Same; Same; The Constitution simply means that the
initiative for filing revenue, tariff, or tax bills, bills authorizing an increase
of the public debt, private bills and bills of local application
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must come from the House of Representatives and that it does not prohibit
the filing in the Senate of a substitute bill in anticipation of its receipt of the
bill from the House.—Indeed, what the Constitution simply means is that
the initiative for filing revenue, tariff, or tax bills, bills authorizing an
increase of the public debt, private bills and bills of local application must
come from the House of Representatives on the theory that, elected as they
are from the districts, the members of the House can be expected to be more
sensitive to the local needs and problems. On the other hand, the senators,
who are elected at large, are expected to approach the same problems from
the national perspective. Both views are thereby made to bear on the
enactment of such laws. 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, so long as action by the Senate as a body is withheld pending
receipt of the House bill.
Same; Same; Presidential certification on urgency of a bill dispenses
with the requirement not only of printing but also that of reading the bill on
separate days.—The presidential certification dispensed with the
requirement not only of printing but also that of reading the bill on
separate days. The phrase “except when the President certifies to the
necessity of its immediate enactment, etc.” in Art. VI, § 26(2) qualifies the
two stated conditions before a bill can become a law: (i) the bill has passed
three readings on separate days and (ii) it has been printed in its final form
and distributed three days before it is finally approved. In other words, the
“unless” clause must be read in relation to the “except” clause, because the
two are really coordinate clauses of the same sentence. To construe the
“except” clause as simply dispensing with the second requirement in the
“unless” clause (i.e., printing and distribution three days before final
approval) would not only violate the rules of grammar. It would also negate
the very premise of the “except” clause: the necessity of securing the
immediate enactment of a bill which is certified in order to meet a public
calamity or emergency. For if it is only the printing that is dispensed with
by presidential certification, the time saved would be so negligible as to be
of any use in insuring immediate enactment. It may well be doubted
whether doing away with the necessity of printing and distributing copies
of the bill three days before the third reading would insure speedy
enactment of a law in the face of an emergency requiring the calling of a
special election for President and Vice-President. Under the Constitution
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such a law is required to be made within seven days of the convening of
Congress in emergency session.
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Same; Same; Judicial Review; While the sufficiency of the factual basis
of the suspension of the writ of habeas corpus or declaration of martial law
is subject to judicial review because basic rights of individuals may be at
hazard, the factual basis of presidential certification of bills, which involves
doing away with procedural requirements designed to insure that bills are
duly considered by members of Congress, certainly should elicit a different
standard of review.—It is nonetheless urged that the certification of the bill
in this case was invalid because there was no emergency, the condition
stated in the certification of a “growing budget deficit” not being an unusual
condition in this country. It is noteworthy that no member of the Senate
saw fit to controvert the reality of the factual basis of the certification. To
the contrary, by passing S. No. 1630 on second and third readings on March
24, 1994, the Senate accepted the President’s certification. Should such
certifi-cation be now reviewed by this Court, especially when no evidence
has been shown that, because S. No. 1630 was taken up on second and
third readings on the same day, the members of the Senate were deprived
of the time needed for the study of a vital piece of legislation? The
sufficiency of the factual basis of the suspension of the writ of habeas
corpus or declaration of martial law under Art. VII, § 18, or the existence of
a national emergency justifying the delegation of extraordinary powers to
the President under Art. VI, § 23(2), is subject to judicial review because
basic rights of individuals may be at hazard. But the factual basis of
presidential certification of bills, which involves doing away with
procedural requirements designed to insure that bills are duly considered
by members of Congress, certainly should elicit a different standard of
review.
Same; Same; Bicameral Conference Committee; A third version of the
bill may result from the conference committee, which is considered an
“amendment in the nature of a substitute,” the only requirement being that
the third version be germane to the subject of the House and Senate bills.—
As to the possibility of an entirely new bill emerging out of a Conference
Committee, it has been explained: Under congressional rules of procedure,
conference committees are not expected to make any material change in the
measure at issue, either by deleting provisions to which both houses have
already agreed or by inserting new provisions. But this is a difficult
provision to enforce. Note the problem when one house amends a proposal
originating in either house by striking out everything following the
enacting clause and substituting provisions which make it an entirely new
bill. The versions are now altogether different, permitting a conference
committee to draft essentially a new bill . . . . The result is a third version,
which is considered an “amendment in the nature of a substitute,” the only
requirement for
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Tolentino vs. Secretary of Finance
which being that the third version be germane to the subject of the House
and Senate bills.
Same; Same; Same; The report of the conference committee needs the
approval of both houses of Congress to become valid as an act of the
legislative department.—Indeed, this Court recently held that it is within
the power of a conference committee to include in its report an entirely new
provision that is not found either in the House bill or in the Senate bill. If
the committee can propose an amendment consisting of one or two
provisions, there is no reason why it cannot propose several provisions,
collectively considered as an “amendment in the nature of a substitute,” so
long as such amendment is germane to the subject of the bills before the
committee. After all, its report was not final but needed the approval of
both houses of Congress to become valid as an act of the legislative
department. The charge that in this case the Conference Committee acted
as a third legislative chamber is thus without any basis.
Same; Same; Same; Separation of Powers; It is common place in
Congress that conference committee reports include new matters which,
though germane, have not been committed to the committee, and if a change
is desired in the practice, it must be sought in Congress since this question is
not covered by any constitutional provision but is only an internal rule of
each house.—To be sure, nothing in the Rules limits a conference
committee to a consideration of conflicting provisions. But Rule XLIV, § 112
of the Rules of the Senate is cited to the effect that “If there is no Rule
applicable to a specific case the precedents of the Legislative Department of
the Philippines shall be resorted to, and as a supplement of these, the
Rules contained in Jefferson’s Manual.” The following is then quoted from
the Jefferson’s Manual: The managers of a conference must confine
themselves to the differences committed to them . . . and may not include
subjects not within disagreements, even though germane to a question in
issue. Note that, according to Rule XLIX, § 112, in case there is no specific
rule applicable, resort must be to the legislative practice. The Jefferson’s
Manual is resorted to only as supplement. It is common place in Congress
that conference committee reports include new matters which, though
germane, have not been committed to the committee. This practice was
admitted by Senator Raul S. Roco, petitioner in G.R. No. 115543, during
the oral argument in these cases. Whatever, then, may be provided in the
Jefferson’s Manual must be considered to have been modified by the
legislative practice. If a change is desired in the practice it must be sought
in Congress since this question is not covered by any constitutional
provision but is only an internal rule of each house. Thus, Art. VI, §
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Tolentino vs. Secretary of Finance
16(3) of the Constitution provides that “Each House may determine the
rules of its proceedings . . . .”
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Same; Same; Same; Same; Bill-Drafting; The use of brackets and
capital letters to indicate changes is a standard practice in bill-drafting;
The Supreme Court’s concern is with the procedural requirements of the
Constitution for the enactment of laws, not the enforcement of internal Rules
of Congress since “parliamentary rules are merely procedural and with their
observance the courts have no concern.”—This observation applies to the
other contention that the Rules of the two chambers were likewise
disregarded in the preparation of the Conference Committee Report
because the Report did not contain a “detailed and sufficiently explicit
statement of changes in, or amendments to, the subject measure.” The
Report used brackets and capital letters to indicate the changes. This is a
standard practice in bill-drafting. We cannot say that in using these marks
and symbols the Committee violated the Rules of the Senate and the
House. Moreover, this Court is not the proper forum for the enforcement of
these internal Rules. To the contrary, as we have already ruled,
“parliamentary rules are merely procedural and with their observance the
courts have no concern.” Our concern is with the procedural requirements
of the Constitution for the enactment of laws. As far as these requirements
are concerned, we are satisfied that they have been faithfully observed in
these cases.
Same; Same; Same; Same; The three-reading requirement refers only to
bills introduced for the first time in either house of Congress, not to the
conference committee report.—Art. VI, § 26(2) must, therefore, be construed
as referring only to bills introduced for the first time in either house of
Congress, not to the conference committee report. For if the purpose of
requiring three readings is to give members of Congress time to study bills,
it cannot be gainsaid that H. No. 11197 was passed in the House after three
readings; that in the Senate it was considered on first reading and then
referred to a committee of that body; that although the Senate committee
did not report out the House bill, it submitted a version (S. No. 1630) which
it had prepared by “taking into consideration” the House bill; that for its
part the Conference Committee consolidated the two bills and prepared a
compromise version; that the Conference Committee Report was thereafter
approved by the House and the Senate, presumably after appropriate study
by their members. We cannot say that, as a matter of fact, the members of
Congress were not fully informed of the provisions of the bill. The
allegation that the Conference Committee usurped the legislative power of
Congress is, in our view, without warrant in fact and in law.
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Same; Same; Same; Same; Enrolled Bill Doctrine; An enrolled copy of a
bill is conclusive not only of its provisions but also of its due enactment.—
Whatever doubts there may be as to the formal validity of Republic Act No.
7716 must be resolved in its favor. Our cases manifest firm adherence to
the rule that an enrolled copy of a bill is conclusive not only of its provisions
but also of its due enactment. Not even claims that a proposed
constitutional amendment was invalid because the requisite votes for its
approval had not been obtained or that certain provisions of a statute had
been “smuggled” in the printing of the bill have moved or persuaded us to
look behind the proceedings of a coequal branch of the government. There
is no reason now to depart from this rule.
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Same; Same; Same; Same; Same; While the “enrolled bill” rule is not
absolute, the Supreme Court should decline the invitation to go behind the
enrolled copy of the bill where allegations that the constitutional procedures
for the passage of bills have not been observed have no more basis than
another allegation that the Conference Committee “surreptitiously” inserted
provisions into a bill which it had prepared.—No claim is here made that
the “enrolled bill” rule is absolute. In fact in one case we “went behind” an
enrolled bill and consulted the Journal to determine whether certain
provisions of a statute had been approved by the Senate in view of the fact
that the President of the Senate himself, who had signed the enrolled bill,
admitted a mistake and withdrew his signature, so that in effect there was
no longer an enrolled bill to consider. But where allegations that the
constitutional procedures for the passage of bills have not been observed
have no more basis than another allegation that the Conference Committee
“surreptitiously” inserted provisions into a bill which it had prepared, we
should decline the invitation to go behind the enrolled copy of the bill. To
disregard the “enrolled bill” rule in such cases would be to disregard the
respect due the other two departments of our government.
Same; Same; Titles of Bills; The constitutional requirement that every
bill passed by Congress shall embrace only one subject which shall be
expressed in its title is intended to prevent surprise upon the members of
Congress and to inform the people of pending legislation so that, if they wish
to, they can be heard regarding it.—The question is whether this
amendment of § 103 of the NIRC is fairly embraced in the title of Republic
Act No. 7716, although no mention is made therein of P.D. No. 1590 as
among those which the statute amends. We think it is, since 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. To insist that P.D. No. 1590 be
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mentioned in the title of the law, in addition to § 103 of the NIRC, in which
it is specifically referred to, would be to insist that the title of a bill should
be a complete index of its content. The constitutional requirement that
every bill passed by Congress shall embrace only one subject which shall be
expressed in its title is intended to prevent surprise upon the members of
Congress and to inform the people of pending legislation so that, if they
wish to, they can be heard regarding it. If, in the case at bar, petitioner did
not know before that its exemption had been withdrawn, it is not because of
any defect in the title but perhaps for the same reason other statutes,
although published, pass unnoticed until some event somehow calls
attention to their existence. Indeed, the title of Republic Act No. 7716 is not
any more general than the title of PAL’s own franchise under P.D. No.
1590, and yet no mention is made of its tax exemption.
Same; Same; Same; The trend is to construe the constitutional
requirement in such a manner that courts do not unduly interfere with the
enactment of necessary legislation.—The trend in our cases is to construe
the constitutional requirement in such a manner that courts do not unduly
interfere with the enactment of necessary legislation and to consider it
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sufficient if the title expresses the general subject of the statute and all its
provisions are germane to the general subject thus expressed.
Same; Same; Public Utilities; Franchises; The grant of a franchise for
the operation of a public utility is subject to amendment, alteration or repeal
by Congress when the common good so requires.—In contrast, in the case at
bar, Republic Act No. 7716 expressly amends PAL’s franchise (P.D. No.
1590) by specifically excepting from the grant of exemptions from the VAT
PAL’s exemption under P.D. No. 1590. This is within the power of Congress
to do under Art. XII, § 11 of the Constitution, which provides that the grant
of a franchise for the operation of a public utility is subject to amendment,
alteration or repeal by Congress when the common good so requires.
Same; Taxation; Expanded Value Added Tax Law; Bill of Rights;
Freedom of Expression; Even with due recognition of its high estate and its
importance in a democratic society, the press is not immune from general
regulation by the State.—To be sure, we are not dealing here with a statute
that on its face operates in the area of press freedom. The PPI’s claim is
simply that, as applied to newspapers, the law abridges press freedom.
Even with due recognition of its high estate and its importance in a
democratic society, however, the press is not immune from general
regulation by the State.
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Same; Same; Same; Same; Same; Equal Protection Clause; The VAT
law would perhaps be open to the charge of discriminatory treatment if the
only privilege withdrawn had been that granted to the press.—What it
contends is that by withdrawing the exemption previously granted to print
media transactions involving printing, publication, importation or sale of
newspapers, Republic Act No. 7716 has singled out the press for
discriminatory treatment and that within the class of mass media the law
discriminates against print media by giving broadcast media favored
treatment. We have carefully examined this argument, but we are unable
to find a differential treatment of the press by the law, much less any
censorial motivation for its enactment. If the press is now required to pay a
value-added tax on its transactions, it is not because it is being singled out,
much less targeted, for special treatment but only because of the removal of
the exemption previously granted to it by law. The withdrawal of
exemption is all that is involved in these cases. Other transactions, likewise
previously granted exemption, have been delisted as part of the scheme to
expand the base and the scope of the VAT system. The law would perhaps
be open to the charge of discriminatory treatment if the only privilege
withdrawn had been that granted to the press. But that is not the case.
Same; Same; Same; Same; Same; Same; There is a reasonable basis for
the classification and different treatment between print media and
broadcast media.—Nor is impermissible motive shown by the fact that
print media and broadcast media are treated differently. The press is taxed
on its transactions involving printing and publication, which are different
from the transactions of broadcast media. There is thus a reasonable basis
for the classification.
Same; Same; Same; Same; Freedom of Religion; The Free Exercise of
Religion Clause does not prohibit imposing a generally applicable sales and
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use tax on the sale of religious materials by a religious organization.—What
has been said above also disposes of the allegations of the PBS that the
removal of the exemption of printing, publication or importation of books
and religious articles, as well as their printing and publication, likewise
violates freedom of thought and of conscience. For as the U.S. Supreme
Court unanimously held in Jimmy Swaggart Ministries v. Board of
Equalization, the Free Exercise of Religion Clause does not prohibit
imposing a generally applicable sales and use tax on the sale of religious
materials by a religious organization.
Same; Same; Same; Same; The VAT registration fee is a mere
administrative fee, one not imposed on the exercise of a privilege, much less
a constitutional right.—In this case, the fee in § 107, although a
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fixed amount (P1,000), is not imposed for the exercise of a privilege but only
for the purpose of defraying part of the cost of registration. The registration
requirement is a central feature of the VAT system. It is designed to
provide a record of tax credits because any person who is subject to the
payment of the VAT pays an input tax, even as he collects an output tax on
sales made or services rendered. The registration fee is thus a mere
administrative fee, one not imposed on the exercise of a privilege, much less
a constitutional right.
Same; Same; Same; Same; Due Process; Hierarchy of Values; When
freedom of the mind is imperiled by law, it is freedom that commands a
momentum of respect and when property is imperiled, it is the lawmakers’
judgment that commands respect.—There is basis for passing upon claims
that on its face the statute violates the guarantees of freedom of speech,
press and religion. The possible “chilling effect” which it may have on the
essential freedom of the mind and conscience and the need to assure that
the channels of communication are open and operating importunately
demand the exercise of this Court’s power of review. There is, however, no
justification for passing upon the claims that the law also violates the rule
that taxation must be progressive and that it denies petitioners’ right to
due process and the equal protection of the laws. The reason for this
different treatment has been cogently stated by an eminent authority on
constitutional law thus: “[W]hen freedom of the mind is imperiled by law, it
is freedom that commands a momentum of respect; when property is
imperiled it is the lawmakers’ judgment that commands respect. This dual
standard may not precisely reverse the presumption of constitutionality in
civil liberties cases, but obviously it does set up a hierarchy of values within
the due process clause.”
Same; Same; Same; The legislature is not required to adhere to a policy
of “all or none” in choosing the subject of taxation.—On the other hand, the
CUP’s contention that Congress’ withdrawal of exemption of producers
cooperatives, marketing cooperatives, and service cooperatives, while
maintaining that granted to electric cooperatives, not only goes against the
constitutional policy to promote cooperatives as instruments of social
justice (Art. XII, § 15) but also denies such cooperatives the equal
protection of the law is actually a policy argument. The legislature is not
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required to adhere to a policy of “all or none” in choosing the subject of
taxation.
Same; Same; Same; Regressivity is not a negative standard for courts to
enforce since what Congress is required by the Constitution to do is to
“evolve a progressive system of taxation.”—Indeed, regressivity
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is not a negative standard for courts to enforce. What Congress is required
by the Constitution to do is to “evolve a progressive system of taxation.”
This is a directive to Congress, just like the directive to it to give priority to
the enactment of laws for the enhancement of human dignity and the
reduction of social, economic and political inequalities (Art. XIII, § 1), or for
the promotion of the right to “quality education” (Art. XIV, § 1). These
provisions are put in the Constitution as moral incentives to legislation, not
as judicially enforceable rights.
Same; Same; Same; Contract Clause; Contracts; Not only are existing
laws read into contracts in order to fix obligations as between parties, but
the reservation of essential attributes of sovereign power is also read into
contracts as a basic postulate of the legal order.—Only slightly less abstract
but nonetheless hypothetical is the contention of CREBA 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 that “No law impairing the obligation of contracts
shall be passed.” It is enough to say that the parties to a contract cannot,
through the exercise of prophetic discernment, 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, but the reservation of
essential attributes of sovereign power is also read into contracts as a basic
postulate of the legal order. 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.
Same; Same; Same; Same; Same; Contract Clause is not a limitation on
the power of taxation save only where a tax exemption was granted for a
valid consideration.—In truth, 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. Such is
not the case of PAL in G.R. No. 115852, and we do not understand it to
make this claim. Rather, its position, as discussed above, is that the
removal of its tax exemption cannot be made by a general, but only by a
specific, law.
Same; Judicial Review; Public actions by “non-Hohfeldian” or
ideological plaintiffs are now cognizable provided they meet the standing
requirement of the Constitution; There must be before the Court a fully
developed factual record that alone can impart to its adjudication the
impact of actuality to insure that decision-making is informed and well-
grounded.—The substantive issues raised in some of the cases are
presented in abstract, hypothetical form because of the lack of a
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concrete record. We accept that this Court does not only adjudicate private
cases; that public actions by “non-Hohfeldian” or ideological plaintiffs are
now cognizable provided they meet the standing requirement of the
Constitution; that under Art. VIII, § 1, ¶ 2 the Court has a “special
function” of vindicating constitutional rights. Nonetheless the feeling
cannot be escaped that we do not have before us in these cases a fully
developed factual record that alone can impart to our adjudication the
impact of actuality to insure that decision-making is informed and well
grounded. Needless to say, we do not have power to render advisory
opinions or even jurisdiction over petitions for declaratory judgment. In
effect we are being asked to do what the Conference Committee is precisely
accused of having done in these cases—to sit as a third legislative chamber
to review legislation.
Same; Same; The duty of the Court to exercise its power of judicial
review must still be performed in the context of a concrete case or
controversy; That the other departments of the government may have
committed a grave abuse of discretion is not an independent ground for
exercising the Court’s power.—It does not add anything, therefore, to invoke
this “duty” to justify this Court’s intervention in what is essentially a case
that at best is not ripe for adjudication. That duty must still be performed
in the context of a concrete case or controversy, as Art. VIII, § 5(2) clearly
defines our jurisdiction in terms of “cases,” and nothing but “cases.” That
the other departments of the government may have committed a grave
abuse of discretion is not an independent ground for exercising our power.
Disregard of the essential limits imposed by the case and controversy
requirement can in the long run only result in undermining our authority
as a court of law. For, as judges, what we are called upon to render is
judgment according to law, not according to what may appear to be the
opinion of the day.
NARVASA, C.J., Separate Opinion:
Constitutional Law; Statutes; Origin of Revenue Bills; Origination
should have no reference to time of conception but to the affirmative act
which effectively puts the bicameral legislative procedure in motion, i.e., the
transmission by one chamber to the other of a bill for its adoption, and it
may be that in the Senate, revenue or tax measures are discussed, even
drafted, before a similar activity takes place in the House.—Exclusive
origination, I submit, should have no reference to time of conception. As a
practical matter, origination should refer to the affirmative act which
effectively puts the bicameral legislative procedure in motion, i.e., the
transmission by one chamber to the other of a bill for its adoption. This is
the purposeful act which sets the legislative machinery in operation
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to effectively lead to the enactment of a statute. Until this transmission
takes place, the formulation and discussions, or the reading for three or
more times of proposed measures in either chamber, would be meaningless
in the context of the activity leading towards concrete legislation. Unless
transmitted to the other chamber, a bill prepared by either house cannot
possibly become law. In other words, the first affirmative, efficacious step,
the operative act as it were, leading to actual enactment of a statute, is the
transmission of a bill from one house to the other for action by the latter.
This is the origination that is spoken of in the Constitution in its Article VI,
Section 24, in reference to appropriation, revenue, or tariff bills, etc. It may
be that in the Senate, revenue or tax measures are discussed, even drafted,
and this before a similar activity takes place in the House. This is of no
moment, so long as those measures or bills remain in the Senate and are
not sent over to the House. There is no origination of revenue or tax
measures by the Senate in this case. However, once the House completes
the drawing up of a similar tax measure in accordance with the prescribed
procedure, even if this is done subsequent to the Senate’s own measure—
indeed, even if this be inspired by information that a measure of the same
nature or on the same subject has been formulated in the Senate—and
after third reading transmits its bill to the Senate, there is origination by
(or in) the House within the contemplation of the Constitution.
Same; Same; Judicial Review; Supreme Court; Petitioners may not, by
raising what are concededly novel and weighty constitutional questions,
compel the Supreme Court to assume the role of a trier of facts.—The Court
will reject a case where the legal issues raised, whatever they may be,
depend for their resolution on still unsettled questions of fact. Petitioners
may not, by raising what are concededly novel and weighty constitutional
questions, compel the Court to assume the role of a trier of facts. It is on
the contrary their obligation, before raising those questions to this Court, to
see to it that all issues of fact are settled in accordance with the procedures
laid down by law for proof of facts. Failing this, petitioners would have only
themselves to blame for a peremptory dismissal.
Same; Same; “Enrolled Bill” Doctrine; Separation of Powers; There is
no proof worthy of the name of any facts to justify the reexamination and,
possibly, disregard, of the “enrolled bill” theory.—I would myself consider
the “enrolled bill” theory as laying down a presumption of so strong a
character as to be well nigh absolute or conclusive, fully in accord with the
familiar and fundamental philosophy of separation of powers. The result,
as far as I am concerned, is to make discussion of the enrolled bill principle
purely academic; for as already
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pointed out, there is no proof worthy of the name of any facts to justify its
reexamination and, possibly, disregard.
Same; Same; Bicameral Conference Committee; Both chambers of
Congress entrust the function of reconciling the bills to their delegates at a
conference committee with full awareness, and tacit consent, that new
provisions may be included even if not within the “disagreeing
provisions.”—The fact is that conference committees only take up bills
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which have already been freely and fully discussed in both chambers of the
legislature, but as to which there is need of reconciliation in view of
“disagreeing provisions” between them; and both chambers entrust the
function of reconciling the bills to their delegates at a conference committee
with full awareness, and tacit consent, that conformably with established
practice unquestioningly observed over many years, new provisions may be
included even if not within the “disagreeing provisions” but of which,
together with other changes, they will be given detailed and sufficiently
explicit information prior to voting on the conference committee version.
Same; Same; Same; It is an unacceptable theorization that when the
BCC report and its proposed bill were submitted to the Senate and the
House, and the members thereof did not bother to read, or what is worse,
having read did not understand, what was before them.—In any case, all
the changes and revisions, and deletions, made by the conference
committee were all subsequently considered by and approved by both the
Senate and the House, meeting and voting separately. It is an unacceptable
theorization, to repeat, that when the BCC report and its proposed bill were
submitted to the Senate and the House, and the members thereof did not
bother to read, or what is worse, having read did not understand, what was
before them, or did not realize that there were new provisions in the
reconciled version unrelated to any “disagreeing provisions,” or that said
new provisions or revisions were effectively concealed from them. Moreover,
it certainly was entirely within the power and prerogative of either
legislative chamber to reject the BCC bill and require the organization of a
new bicameral conference committee. That this option was not exercised by
either house only proves that the BCC measure was found to be acceptable
as in fact it was approved and adopted by both chambers.
CRUZ, J., Separate Opinion:
Constitutional Law; Judicial Review; Where a specific procedure is
fixed by the Constitution itself, it should not suffice for Congress to simply
say that the rules have been observed and flatly consider the
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matter closed.—I am persuaded even now that where a specific procedure is
fixed by the Constitution itself, it should not suffice for Congress to simply
say that the rules have been observed and flatly consider the matter closed.
It does not have to be as final as that. I would imagine that the judiciary,
and particularly this Court, should be able to verify that statement and
determine for itself, through the exercise of its own powers, if the
Constitution has, indeed, been obeyed. In fact, the Court has already said
that the question of whether certain procedural rules have been followed is
justiciable rather than political because what is involved is the legality and
not the wisdom of the act in question. So we ruled in Sanidad v.
Commission on Elections (73 SCRA 333) on the amendment of the
Constitution; in Daza v. Singson (180 SCRA 496) on the composition of the
Commission on Appointments; and in the earlier case of Tañada v. Cuenco
(100 SCRA 1101) on the organization of the Senate Electoral Tribunal,
among several other cases. By the same token, the ascertainment of
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whether a bill underwent the obligatory three readings in both Houses of
Congres should not be considered an invasion of the territory of the
legislature as this would not involve an inquiry into its discretion in
approving the measure but only the manner in which the measure was
enacted.
Same; Expanded VAT Law; Bicameral Conference Committee; The
resultant enrolled bill did not originate exclusively in the House of
Representatives.—The two bills were separately introduced in their
respective Chambers. Both retained their independent existence until they
reached the bicameral conference committee where they were consolidated.
It was this consolidated measure that was finally passed by Congress and
submitted to the President of the Philippines for his approval. House Bill
No. 11197 originated in the House of Representatives but this was not the
bill that eventually became R.A. No. 7716. The measure that was signed
into law by President Ramos was the consolidation of that bill and another
bill, viz., Senate Bill No. 1630, which was introduced in the Senate. The
resultant enrolled bill thus did not originate exclusively in the House of
Representatives. The enrolled bill itself says that part of it (and it does not
matter to what extent) originated in the Senate.
Same; Same; Same; The participation of the Senate was not in
proposing or concurring with amendments but in originating its own Senate
bill which was not embodied in but merged with the House bill.—It would
have been different if the only participation of the Senate was in the
amendment of the measure that was originally proposed in the House of
Representatives. But this was not the case. The participation of the Senate
was not in proposing or concurring with
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Tolentino vs. Secretary of Finance
amendments that would have been incorporated in House Bill No. 11197.
Its participation was in originating its own Senate Bill No. 1630, which was
not embodied in but merged with House Bill No. 11197. Senate Bill No.
1630 was not even an amendment by substitution, assuming this was
permissible. To “substitute” means “to take the place of; to put or use in
place of another.” Senate Bill No. 1630 did not, upon its approval, replace
(and thus eliminate) House Bill No. 11197. Both bills retained their
separate identities until they were joined or united into what became the
enrolled bill and ultimately R.A. No. 7716.
PADILLA, J., Separate Opinion:
Constitutional Law; Statutes; Origin of Revenue Bills; The approval by
the Senate of Senate Bill No. 1630, after it had considered House Bill No.
11197, may be taken as an amendment by substitution by the Senate not
only of Senate Bill No. 1129 but of House Bill No. 11197 as well.—Since the
Senate is, under the above-quoted constitutional provision, empowered to
concur with a revenue measure exclusively originating from the House, or
to propose amendments thereto, to the extent of proposing amendments by
SUBSTITUTION to the House measure, the approval by the Senate of
Senate Bill No. 1630, after it had considered House Bill No. 11197, may be
taken, in my view, as an AMENDMENT BY SUBSTITUTION by the
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Senate not only of Senate Bill No. 1129 but of House Bill No. 11197 as well
which, it must be remembered, originated exclusively from the House.
Same; Same; Separation of Powers; Presidential Certification of Bills; A
becoming respect for a co-equal and coordinate department of government
points that weight and credibility be given to such Presidential judgment.—
We have here then a situation where the President did certify to the
necessity of Senate Bill No. 1630’s immediate enactment to meet an
emergency and the Senate responded accordingly. While I would be the last
to say that this Court cannot review the exercise of such power by the
President in appropriate cases ripe for judicial review, I am not prepared
however to say that the President gravely abused his discretion in the
exercise of such power as to require that this Court overturn his action. We
have been shown no fact or circumstance which would impugn the
judgment of the President, concurred in by the Senate, that there was an
emergency that required the immediate enactment of Senate Bill No. 1630.
On the other hand, a becoming respect for a co-equal and coordinate
department of government points that weight and credibility be given to
such Presidential judgment.
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Same; Bill of Rights; Freedom of Expression; R.A. 7716 in imposing a
value-added tax on circulation income of newspapers and similar
publications and on income derived from publishing advertisements in
newspapers violates Sec. 4, Art III of the Constitution.—Rep. Act No. 7716
in imposing a value-added tax on circulation income of newspapers and
similar publications and on income derived from publishing advertisements
in newspapers, to my mind, violates Sec. 4, Art. III of the Constitution.
Indeed, even the Executive Department has tried to cure this defect by the
issuance of BIR Regulation No. 11-94 precluding implementation of the tax
in this area. It should be clear, however, that the BIR regulation cannot
amend the law (Rep. Act No. 7716). Only legislation (as distinguished from
administration regulation) can amend an existing law.
Same; Same; Freedom of Religion; The imposition of the VAT on the
sale and distribution of religious articles must be struck down for being
contrary to Sec. 5, Art. III of the Constitution.—Similarly, the imposition of
the VAT on the sale and distribution of religious articles must be struck
down for being contrary to Sec. 5, Art. III of the Constitution which
provides: “Sec. 5. No law shall be made respecting an establishment of
religion, or prohibiting the free exercise thereof. The free exercise and
enjoyment of religious profession and worship, without discrimination or
preference, shall forever be allowed. No religious test shall be required for
the exercise of civil or political rights.”
Same; Same; Taxation; The inherent power of the State to tax, which is
vested in the legislature, includes the power to determine whom or what to
tax, as well as how much to tax.—CREBA which specifically assails the 10%
value-added tax on the gross selling price of real properties, fails to
distinguish between a sale of real properties primarily held for sale to
customers or held for lease in the ordinary course of trade or business and
isolated sales by individual real property owners (Sec. 103[s]). That those
engaged in the business of real estate development realize great profits is of
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common knowledge and need not be discussed at length here. The
qualification in the law that the 10% VAT covers only sales of real property
primarily held for sale to customers, i.e. for trade or business thus takes
into consideration a taxpayer’s capacity to pay. There is no showing that
the consequent distinction in real estate sales is arbitrary and in violation
of the equal protection clause of the Constitution. The inherent power to
tax of the State, which is vested in the legislature, includes the power to
determine whom or what to tax, as well as how much to tax. In the absence
of a clear showing that the tax violates the due process and equal
protection
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clauses of the Constitution, this Court, in keeping with the doctrine of
separation of powers, has to defer to the discretion and judgment of
Congress on this point.
Same; Same; Franchises; R.A. 7716 can be considered a special law
amending PAL’s franchise.—There can be no dispute, in my mind, that the
clear intent of Congress was to modify PAL’s franchise with respect to the
taxes it has to pay. To this extent, Rep. Act No. 7716 can be considered as a
special law amending PAL’s franchise and its tax liability thereunder. That
Rep. Act No. 7716 imposes the value-added taxes on other subjects does not
make it a general law which cannot amend PD No. 1590.
VITUG, J., Separate Opinion:
Constitutional Law; Judicial Review; Separation of Powers; It is not
believed that judicial tyranny is envisioned, let alone institutionalized, by
the people in the 1987 Constitution.—I cannot yet concede to the novel
theory, so challengingly provocative as it might be, that under the 1987
Constitution the Court may now at good liberty intrude, in the guise of the
people’s imprimatur, into every affair of government. What significance can
still then remain, I ask, of the time honored and widely acclaimed principle
of separation of powers, if at every turn the Court allows itself to pass
upon, at will, the disposition of a co-equal, independent and coordinate
branch in our system of government. I dread to think of the so varied
uncertainties that such an undue interference can lead to. The respect for
long standing doctrines in our jurisprudence, nourished through time, is
one of maturity not timidity, of stability rather than quiescence. It has
never occurred to me, and neither do I believe it has been intended, that
judicial tyranny is envisioned, let alone institutionalized, by our people in
the 1987 Constitution. The test of tyranny is not solely on how it is wielded
but on how, in the first place, it can be capable of being exercised. It is time
that any such perception of judicial omnipotence is corrected.
REGALADO, J., Dissenting Opinion:
Constitutional Law; Expanded VAT Law; The Senate clearly and
deliberately violated the requirements of the Constitution not only in the
origination of the bill but in the very enactment of R.A. 7716.—This writer
consequently agrees with the clearly tenable proposition of petitioners that
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when the Senate passed and approved S.B. No. 1630, had it certified by the
Chief Executive, and thereafter caused its
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consideration by the bicameral conference committee in total substitution
of H.B. No. 11197, it clearly and deliberately violated the requirements of
the Constitution not only in the origination of the bill but in the very
enactment of Republic Act No. 7716. Contrarily, the shifting sands of
inconsistency in the arguments adduced for respondents betray such lack of
intellectual rectitude as to give the impression of being mere rhetorics in
defense of the indefensible.
DAVIDE, JR., J., Dissenting Opinion:
Constitutional Law; Expanded VAT Law; R.A. 7716 did not originate
exclusively in the House.—Since R.A. No. 7716 is a revenue measure, it
must originate exclusively in the House—not in the Senate. As correctly
asserted by petitioner Tolentino, on the face of the enrolled copy of R.A. No.
7716, it is a “CONSOLIDATION OF HOUSE BILL NO. 11197 AND
SENATE BILL NO. 1630.” In short, it is an illicit marriage of a bill which
originated in the House and a bill which originated in the Senate.
Therefore, R.A. No. 7716 did not originate exclusively in the House.
Same; Same; Origin of Revenue Bills; The Senate cannot amend by
substitution with an entirely new bill of its own any bill covered by Section
24 of Article VI which the House transmitted to it because such substitution
would indirectly violate Section 24.—Since the origination is not exclusively
vested in the House of Representatives of the United States, the Senate’s
authority to propose or concur with amendments is necessarily broader.
That broader authority is further confirmed by the phrase “as on other
Bills,” i.e., its power to propose or concur with amendments thereon is the
same as in ordinary bills. The absence of this phrase in our Constitution
was clearly intended to restrict or limit the Philippine Senate’s power to
propose or concur with amendments. In the light of the exclusivity of
origination and the absence of the phrase “as on other Bills,” the Philippine
Senate cannot amend by substitution with an entirely new bill of its own
any bill covered by Section 24 of Article VI which the House of
Representatives transmitted to it because such substitution would
indirectly violate Section 24.
Same; Same; Same; Presidential Certification of Bills; The only revenue
bill which could be properly certified on permissible constitutional grounds
is the bill that was introduced in the House.—I submit, however, that the
Presidential certification is void ab initio not necessarily for the reason
adduced by petitioner Kilosbayan, Inc., but because it was addressed to the
Senate for a bill which is prohibited from originating therein. The only bill
which could be properly certified on permissible
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constitutional grounds even if it had already been transmitted to the
Senate is HB No. 11197. As earlier observed, this was not so certified,
although HB No. 9210 (one of those consolidated into HB No. 11197) was
certified on 1 June 1993. Also, the certification of SB No. 1630 cannot, by
any stretch of the imagination, be extended to HB No. 11197 because SB
No. 1630 did not substitute HB No. 11197 but SB No. 1129. Considering
that the certification of SB No. 1630 is void, its approval on second and
third readings in one day violated Section 26(2), Article VI of the
Constitution.
Same; Statutes; Bicameral Conference Committee; The duty of the BCC
is limited to the reconciliation of disagreeing provisions or the resolution of
differences or inconsistencies of the bills from both Houses of Congress.—
Even granting arguendo that both HB No. 11197 and SB No. 1630 had been
validly approved by both chambers of Congress and validly referred to the
bicameral conference committee, the latter had very limited authority
thereon. It was created “in view of the disagreeing provisions of” the two
bills. Its duty was limited to the reconciliation of disagreeing provisions or
the resolution of differences or inconsistencies. The committee recognized
that limited authority in the opening paragraph of its Report when it said:
“The Conference Committee on the disagreeing provisions of House Bill No.
11197 x x x and Senate Bill No. 1630 x x x.” Under such limited authority,
it could only either (a) restore, wholly or partly, the specific provisions of
HB No. 11197 amended by SB No. 1630, (b) sustain, wholly or partly, the
Senate’s amendments, or (c) by way of a compromise, to agree that neither
provisions in HB No. 11197 amended by the Senate nor the latter’s
amendments thereto be carried into the final form of the former.
Same; Same; Same; Doctrine of Ratification; The doctrine of ratification
may apply to minor procedural flaws or tolerable breaches of the parameters
of the bicameral conference committee’s limited powers but never to
violations of the Constitution.—I cannot agree with the suggestion that
since both the Senate and the House had approved the bicameral
conference committee report and the bill proposed by it in substitution of
HB No. 11197 and SB No. 1630, whatever infirmities may have been
committed by it were cured by ratification. This doctrine of ratification may
apply to minor procedural flaws or tolerable breaches of the parameters of
the bicameral conference committee’s limited powers but never to violations
of the Constitution. Congress is not above the Constitution. In the instant
case, since SB No. 1630 was introduced in violation of Section 24, Article VI
of the Constitution, was passed in the Senate in violation of the “three
readings” rule, and was not transmitted to the House for the completion of
the constitutional
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process of legislation, and HB No. 11197 was not likewise passed by the
Senate on second and third readings, neither the Senate nor the House
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could validly approve the bicameral conference committee report and the
proposed bill.
Same; Same; “Enrolled Bill” Doctrine; Invocation of the “enrolled bill”
doctrine is misplaced.—The majority opinion, however, invokes the enrolled
bill doctrine and wants this Court to desist from looking behind the copy of
the assailed measure as certified by the Senate President and the Speaker
of the House. I respectfully submit that the invocation is misplaced. First,
as to the issue of origination, the certification in this case explicitly states
that R.A. No. 7716 is a “consolidation of House Bill No. 11197 and Senate
Bill No. 1630.” This is conclusive evidence that the measure did not
originate exclusively in the House. Second, the enrolled bill doctrine is of
American origin, and unquestioned fealty to it may no longer be justified in
view of the expanded jurisdiction of this Court under Section 1, Article VIII
of our Constitution. Third, even under the regime of the 1935 Constitution
which did not contain the above provision, this Court, through Mr. Chief
Justice Makalintal, in Astorga vs. Villegas, declared that it cannot be truly
said that Mabanag vs. Lopez Vito has laid to rest the question of whether
the enrolled bill doctrine or the journal entry rule should be adhered to in
this jurisdiction. Fourth, even in the United States, the enrolled bill
doctrine has been substantially undercut. This is shown in the disquisitions
of Mr. Justice Reynato S. Puno in his dissenting opinion, citing Sutherland,
Statutory Construction.
ROMERO, J., Dissenting Opinion:
Constitutional Law; Expanded VAT Law; Bicameral Conference
Committee; A bicameral conference committee is a creature, not of the
Constitution, but of the legislative body under its power to determine rules of
its proceeding.—As a conference committee has been defined: “. . . unlike
the joint committee is two committees, one appointed by each house. It is
normally appointed for a specific bill and its function is to gain accord
between the two houses either by the recession of one house from its bill or
its amendments or by the further amendment of the existing legislation or
by the substitution of an entirely new bill. Obviously the conference
committee is always a special committee and normally includes the
member who introduced the bill and the chairman of the committee which
considered it together with such other representatives of the house as seem
expedient. (Horack, Cases and Materials on Legislation [1940] 220. See also
Zinn, Conference Procedure in Congress, 38 ABAJ 864 [1952]; Steiner, The
Congressional Conference
653
VOL. 235, AUGUST 25, 1994 653
Tolentino vs. Secretary of Finance
Committee [U of Ill. Press, 1951]).” From the foregoing definition, it is clear
that a bicameral conference committee is a creature, not of the
Constitution, but of the legislative body under its power to determine rules
of its proceedings under Article VI, Sec. 16 (3) of the Constitution. Thus, it
draws its life and vitality from the rules governing its creation.
Same; Same; Same; The Bicameral Conference Committee exceeded the
power and authority granted in the Rules of its creation.—Even a cursory
perusal of the above outline will convince one that, indeed, the Bicameral
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Conference Committee (henceforth to be referred to as BICAM) exceeded
the power and authority granted in the Rules of its creation. Both Senate
and House Rules limit the task of the Conference Committee in almost
identical language to the settlement of differences in the provisions or
amendments to any bill or joint resolution. If it means anything at all, it is
that there are provisions in subject bill, to start with, which differ and,
therefore, need reconciliation. Nowhere in the Rules is it authorized to
initiate or propose completely new matter. Although under certain rules on
legislative procedure, like those in Jefferson’s Manual, a conference
committee may introduce germane matters in a particular bill, such
matters should be circumsribed by the committee’s sole authority and
function to reconcile differences.
Same; Same; Same; Insertion of new matter on the part of the
Bicameral Conference Committee is an ultra vires act which makes the same
void.—Parenthetically, in the Senate and in the House, a matter is
“germane” to a particular bill if there is a common tie between said matter
and the provisions which tend to promote the object and purpose of the bill
it seeks to amend. If it introduces a new subject matter not within the
purview of the bill, then it is not “germane” to the bill. The test is whether
or not the change represented an amendment or extension of the basic
purpose of the original, or the introduction of an entirely new and different
subject matter. In the BICAM, however, the germane subject matter must
be within the ambit of the disagreement between the two Houses. If the
“germane” subject is not covered by the disagreement but it is reflected in
the final version of the bill as reported by the Conference Committee or, if
what appears to be a “germane” matter in the sense that it is “relevant or
closely allied” with the purpose of the bill, was not the subject of a
disagreement between the Senate and the House, it should be deemed an
extraneous matter or even a “rider” which should never be considered
legally passed for not having undergone the three-day reading requirement.
Insertion of new matter on the part of the BICAM is, therefore, an ulta
vires act which makes the same void.
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BELLOSILLO, J., Dissenting Opinion:
Constitutional Law; Origin of Revenue Bills; Statutory Construction;
The provision in the Constitution requiring that all revenue bills shall
originate exclusively from the Lower House is mandatory.—Verily, the
provision in our Constitution requiring that all revenue bills shall originate
exclusively from the Lower House is mandatory. The word “exclusively” is
an “exclusive word,” which is indicative of an intent that the provision is
mandatory. Hence, all American authorities expounding on the meaning
and application of Sec. 7, par. (1), Art. I, of the U.S. Constitution cannot be
used in the interpretation of Sec. 24, Art. VI, of our 1987 Constitution
which has a distinct feature of “exclusiveness” all its own. Thus, when our
Constitution absolutely requires—as it is mandatory—that a particular bill
should exclusively emanate from the Lower House, there is no alternative
to the requirement that the bill to become valid law must originate
exclusively from that House.
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Same; Same; Same; It is the general rule to regard constitutional
provisions as mandatory, and not to leave any discretion to the will of the
legislature to obey or disregard them.—In the interpretation of
constitutions, questions frequently arise as to whether particular sections
are mandatory or directory. The courts usually hesitate to declare that a
constitutional provision is directory merely in view of the tendency of the
legislature to disregard provisions which are not said to be mandatory.
Accordingly, it is the general rule to regard constitutional provisions as
mandatory, and not to leave any discretion to the will of the legislature to
obey or disregard them. This presumption as to mandatory quality is
usually followed unless it is unmistakably manifest that the provisions are
intended to be merely directory. So strong is the inclination in favor of
giving obligatory force to the terms of the organic law that it has even been
said that neither by the courts nor by any other department of the
government may any provision of the Constitution be regarded as merely
directory, but that each and everyone of its provisions should be treated as
imperative and mandatory, without reference to the rules and
distinguishing between the directory and the mandatory statutes.
Same; Same; A Senate amendment by substitution simply means that
the bill did not in effect originate from the lower chamber but from the upper
chamber, disguising itself as a mere amendment of the House version.—In
fine, in the cases cited which were lifted from American authorities, it
appears that the revenue bills in question actually originated from the
House of Representatives and were amended by the Senate only after they
were transmitted to it. Perhaps, if the factual
655
VOL. 235, AUGUST 25, 1994 655
Tolentino vs. Secretary of Finance
circumstances in those cases were exactly the same as the ones at bench,
then the subject revenue or tariff bill may be upheld in this jurisdiction on
the principle of substantial compliance, as they were in the United States,
except possibly in instances where the House bill undergoes what is now
referred to as “amendment by substitutionn,” for that would be in
derogation of our Constitution which vests solely in the House of
Representatives the power to initiate revenue bills. A Senate amendment
by substitution simply means that the bill in question did not in effect
originate from the lower chamber but from the upper chamber and now
disguises itself as a mere amendment of the House version.
Same; Judicial Review; Courts will not decline the exercise of
jurisdiction upon the suggestion that action might be taken by political
agencies in disregard of the judgment of the judicial tribunals.—The rule is
fixed that the duty in a proper case to declare a law unconstitutional cannot
be declined and must be performed in accordance with the deliberate
judgment of the tribunal before which the validity of the enactment is
directly drawn into question. When it is clear that a statute transgresses
the authority vested in the legislature by the Constitution, it is the duty of
the courts to declare the act unconstitutional because they cannot shirk
from it without violating their oaths of office. This duty of the courts to
maintain the Constitution as the fundamental law of the state is
imperative and unceasing; and, as Chief Justice Marshal said, whenever a
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statute is in violation of the fundamental law, the courts must so adjudge
and thereby give effect to the Constitution. Any other course would lead to
the destruction of the Constitutionn. Since the question as to the
constitutionality of a statute is a judicial matter, the courts will not decline
the exercise of jurisdiction upon the suggestion that action might be taken
by political agencies in disregard of the judgment of the judicial tribunals.
PUNO, J., Dissenting Opinion:
Constitutional Law; Bicameral Conference Committee; Ex Post Veto
Power; There is absolutely no legal warrant for the bold submission that a
Bicameral Conference Committee possesses the power to add or delete
provisions in bills already approved on third reading by both Houses or an
ex post veto power.—There is absolutely no legal warrant for the bold
submission that a Bicameral Conference Committee possesses the power to
add/delete provisions in bills already approved on third reading by both
Houses or an ex post veto power. To support this postulate that can enfeeble
Congress itself, respondents cite no constitutional provision, no law, not
even any rule or regulation. Worse,
656
656 SUPREME COURT REPORTS ANNOTATED
Tolentino vs. Secretary of Finance
their stance is categorically repudiated by the rules of both the Senate and
the House of Representatives which define with precision the parameters of
power of a Bicameral Conference Committee.
Same; Same; Same; The thesis that a Bicameral Conference Committee
can wield ex post veto power wages war against our settled ideals of
representative democracy.—But the thesis that a Bicameral Conference
Committee can wield ex post veto power does not only contravene the rules
of both the Senate and the House. It wages war againt our settled ideals of
representative democracy. For the inevitable, catastrophic effect of the
thesis is to install a Bicameral Conference Committee as the Third
Chamber of our Congress, similarly vested with the power to make laws
but with the dissimilarity that its laws are not the subject of a free and full
discussion of both Houses of Congress. With such a vagrant power, a
Bicameral Conference Com-mittee acting as a Third Chamber will be a
constitutional monstrosity.
Same; “Enrolled Bill” Doctrine; The enrolled bill theory is a historical
relic that should not continuously rule us from the fossilized past.—
Respondents seek sanctuary in the conclusiveness of an enrolled bill to bar
any judicial inquiry on whether Congress observed our constitutional
procedure in the passage of R.A. No. 7716. The enrolled bill theory is a
historical relic that should not continuously rule us from the fossilized past.
It should be immediately emphasized that the enrolled bill theory
originated in England where there is no written constitution and where
Parliament is supreme. In this jurisdiction, we have a written constitution
and the legislature is a body of limited powers. Likewise, it must be pointed
out that starting from the decade of the 40’s, even American courts have
veered away from the regidity and unrealism of the conclusiveness of an
enrolled bill.
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Same; Same; The previous rulings of the Supreme Court on the
conclusiveness of an enrolled bill are no longer good law.—I am not
unaware that this Court has subscribed to the conclusiveness of an enrolled
bill as enunciated in the 1947 lead case of Mabanag v. Lopez Vito, and
reiterated in subsequent cases. With due respect, I submit that these
rulings are no longer good law. Suffice to state that section 313 of the Old
Code of Civil Procedure as amended by Act No. 2210 is no longer in our
statute books. It has long been repealed by the Rules of Court. Mabanag
also relied on jurisprudence and authorities in the United States which are
under severe criticisms by modern scholars. Hence, even in the United
States the conclusiveness of an enrolled bill has been junked by most of the
States.
657
VOL. 235, AUGUST 25, 1994 657
Tolentino vs. Secretary of Finance
ORIGINAL ACTIONS in the Supreme Court. Certiorari and
prohibition.
The facts are stated in the opinion of the Court.
     Arturo M. Tolentino for and in his behalf.
     Donna Celeste D. Feliciano and Juan T. David for petitioners
in G.R. No. 115525.
     Roco, Bunag, Kapunan, Migallos and Jardeleza for petitioner
R.S. Roco.
     Villaraza and Cruz for petitioners in G.R. No. 115544.
          Carlos A. Raneses and Manuel M. Serrano for petitioner in
G.R. No. 115754.
          Salonga, Hernandez & Allado for Freedom From Debts
Coalition, Inc. & Phil. Bible Society.
     Estelito P. Mendoza for petitioner in G.R. No. 115852.
     Panganiban, Benitez, Parlade, Africa & Barinaga Law Offices
for petitioners in G.R. No. 115873.
          R.B. Rodriguez & Associates for petitioners in G.R. No.
115931.
     Rene A.V. Saguisag for MABINI.
MENDOZA, J.:
The value-added tax (VAT) is levied on the sale, barter or exchange
of goods and properties as well as on the sale or exchange of
services. It is equivalent to 10% of the gross selling price or gross
value in money of goods or properties sold, bartered or exchanged or
of the gross receipts from the sale or exchange of services. Republic
Act No. 7716 seeks to widen the tax base of the existing VAT
system and enhance its administration by amending the National
Internal Revenue Code.
These are various suits for certiorari and prohibition, challenging
the constitutionality of Republic Act No. 7716 on various grounds
summarized in the resolution of July 6, 1994 of this Court, as
follows:
658
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658 SUPREME COURT REPORTS ANNOTATED
Tolentino vs. Secretary of Finance
I. Procedural Issues:
A. Does Republic Act No. 7716 violate Art. VI, § 24 of the Constitution?
B. Does it violate Art. VI, § 26(2) of the Constitution?
C. What is the extent of the power of the Bicameral Conference
Committee?
II. Substantive Issues:
A. Does the law violate the following provisions in the Bill of Rights
(Art. III)?
1. § 1
2. § 4
3. § 5
4. § 10
B. Does the law violate the following other provisions of the
Constitution?
1. Art. VI, § 28(1)
2. Art. VI, § 28(3)
These questions will be dealt in the order they are stated above. As
will presently be explained not all of these questions are judicially
cognizable, because not all provisions of the Constitution are self
executing and, therefore, judicially enforceable. The other
departments of the government are equally charged with the
enforcement of the Constitution, especially the provisions relating
to them.
I. PROCEDURAL ISSUES
The contention of petitioners is that in enacting Republic Act No.
7716, or the Expanded Value-Added Tax Law, Congress violated the
Constitution because, although H. No. 11197 had originated in the
House of Representatives, it was not passed by the Senate but was
simply consolidated with the Senate version (S. No. 1630) in the
Conference Committee to produce the bill which the President
signed into law. The following provisions of the Constitution are
cited in support of the proposition that because Republic Act No.
7716 was passed in this manner, it did
VOL. 235, AUGUST 25, 1994
Tolentino vs. Secretary of Finance
not originate in the House of Representatives and it has not thereby
become a law:
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Art. VI, § 24: All appropriation, revenue or tariff bills, bills authorizing
increase of the public debt, bills of local application, and private bills shall
originate exclusively in the House of Representatives, but the Senate may
propose or concur with amendments.
Id., § 26(2): No bill passed by either House shall become a law unless it
has passed three readings on separate days, and printed copies thereof in
its final form have been distributed to its Members three days before its
passage, except when the President certifies to the necessity of its
immediate enactment to meet a public calamity or emergency. Upon the
last reading of a bill, no amendment thereto shall be allowed, and the vote
thereon shall be taken immediately thereafter, and the yeas and nays
entered in the Journal.
It appears that on various1 dates between July 22, 1992 and August
31, 1993, several bills were introduced in the House of
Representatives seeking to amend certain provisions of the
National Internal Revenue Code relative to the value-added tax or
VAT. These bills were referred to the House Ways and Means
Committee which recommended for approval a substitute measure,
H. No. 11197, entitled
AN ACT RESTRUCTURING THE VALUE-ADDED TAX (VAT) SYSTEM
TO WIDEN ITS TAX BASE AND ENHANCE ITS ADMINISTRATION,
AMENDING FOR THESE PURPOSES SECTIONS 99, 100, 102, 103, 104,
105, 106, 107, 108 AND 110 OF TITLE IV, 112, 115 AND 116 OF TITLE V,
AND 236, 237 AND 238 OF TITLE IX, AND REPEALING SECTIONS 113
AND 114 OF TITLE V, ALL OF THE NATIONAL INTERNAL REVENUE
CODE, AS AMENDED
The bill (H. No. 11197) was considered on second reading starting
November 6, 1993 and, on November 17, 1993, it was approved by
the House of Representatives after third and final reading.
________________
1 H. Nos. 253, 771, 2450, 7033, 8086, 9030, 9210, 9297, 10012 and 10100.
(Respondents’ Consolidated Memorandum, Annexes 3-12).
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660 SUPREME COURT REPORTS ANNOTATED
Tolentino vs. Secretary of Finance
It was sent to the Senate on November 23, 1993 and later referred
by that body to its Committee on Ways and Means.
On February 7, 1994, the Senate Committee submitted its report
recommending approval of S. No. 1630, entitled
659
AN ACT RESTRUCTURING THE VALUE-ADDED TAX (VAT) SYSTEM
TO WIDEN ITS TAX BASE AND ENHANCE ITS ADMINISTRATION,
659 AMENDING FOR THESE PURPOSES SECTIONS 99, 100, 102, 103, 104,
105, 107, 108, AND 110 OF TITLE IV, 112 OF TITLE V, AND 236, 237,
AND 238 OF TITLE IX, AND REPEALING SECTIONS 113, 114 AND 116
OF TITLE V, ALL OF THE NATIONAL INTERNAL REVENUE CODE, AS
AMENDED, AND FOR OTHER PURPOSES
It was stated that the bill was being submitted “in substitution of
Senate Bill No. 1129, taking into consideration P.S. Res. No. 734
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and H.B. No. 11197.”
On February 8, 1994, the Senate began consideration of the bill
(S. No. 1630). It finished debates on the bill and approved it on
second reading on March 24, 1994. On the same day, it approved
the bill on third reading by the affirmative votes of 13 of its
members, with one abstention.
H. No. 11197 and its Senate version (S. No. 1630) were then
referred to a conference committee which, after meeting four times
(April 13, 19, 21 and 25, 1994), recommended that “House Bill No.
11197, in consolidation with Senate Bill No. 1630, be approved in
accordance with the attached copy of the bill as reconciled and
approved by the conferees.”
The Conference Committee bill, entitled “AN ACT
RESTRUCTURING THE VALUE-ADDED TAX (VAT) SYSTEM,
WIDENING ITS TAX BASE AND ENHANCING ITS
ADMINISTRATION AND FOR THESE PURPOSES AMENDING
AND REPEALING THE RELEVANT PROVISIONS OF THE
NATIONAL INTERNAL REVENUE CODE, AS AMENDED, AND
FOR OTHER PURPOSES,” was thereafter approved by the House
of Representatives on April 27, 1994 and by the Senate on May 2,
1994. The enrolled bill was then presented to the President of the
Philippines who, on May 5, 1994, signed it. It became Republic Act
No. 7716. On May 12, 1994, Republic Act No. 7716 was published in
two newspapers of general circulation and, on May 28, 1994, it took
effect, although
661
VOL. 235, AUGUST 25, 1994 661
Tolentino vs. Secretary of Finance
its implementation was suspended until June 30, 1994 to allow time
for the registration of business entities. It would have been enforced
on July 1, 1994 but its enforcement was stopped because the Court,
by the vote of 11 to 4 of its members, granted a temporary
restraining order on June 30, 1994.
First. Petitioners’ contention is that Republic Act No. 7716 did
not “originate exclusively” in the House of Representatives as
required by Art. VI, § 24 of the Constitution, because it is in fact the
result of the consolidation of two distinct bills, H. No. 11197 and S.
No. 1630. In this connection, petitioners point out that although2
Art. VI, § 24 was adopted from the American Federal Constitution,
it is notable in two respects: the verb “shall originate” is qualified in
the Philippine Constitution by the word “exclusively” and the
phrase “as on other bills” in the American version is omitted. This
means, according to them, that to be considered as having
originated in the House, Republic Act No. 7716 must retain the
essence of H. No. 11197.
This argument will not bear analysis. To begin with, it is not the
law—but the revenue bill—which is required by the Constitution to
“originate exclusively” in the House of Representatives. It is
important to emphasize this, because a bill originating in the House
may undergo such extensive changes in the Senate that the result
may be a rewriting of the whole. The possibility of a third version by
the conference committee will be discussed later. At this point, what
is important to note is that, as a result of the Senate action, a
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distinct bill may be produced. 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.” It would be to
violate the coequality of legislative power of the two houses of
Congress and in fact make the House superior to the Senate.
The contention that the constitutional design is to limit the
Senate’s power in respect of revenue bills in order to compensate
________________
2 U.S. CONST., Art. 1, § 7, cl. 1: “All bills for raising revenue shall originate in the
House of Representatives, but the Senate may propose or concur with amendments,
as on other bills.”
662
662 SUPREME COURT REPORTS ANNOTATED
Tolentino vs. Secretary of Finance
3
for the grant to the Senate of the treaty-ratifying power and
thereby equalize its powers and those of the House overlooks the
fact that the powers being compared are different. We are dealing
here with the legislative power which under the Constitution is
vested not in any particular chamber but in the Congress of the
Philippines, consisting
4
of “a Senate and a House of
Representatives.” The exercise of the treaty-ratifying power is not
the exercise of legislative power. It is the exercise of a check on the
executive power. There is, therefore, no justification for comparing
the legislative powers of the House and of the Senate on the basis of
the possession of such nonlegislative power by 5the Senate. The
possession of a similar power by the U.S. Senate has never been
thought of as giving it more legislative powers than the House of
Representatives.
In the United States, the validity of a provision (§ 37) imposing
an ad valorem tax based on the weight of vessels, which the U.S.
Senate had inserted in the Tariff Act of 1909, was upheld against
the claim that the provision was a revenue bill which originated in6
the Senate in contravention of Art. I, § 7 of the U.S. Constitution.
Nor is the power to amend limited to adding a provision or two in a
revenue bill emanating from the House. The U.S. Senate has gone
so far as changing the whole of bills following the enacting clause
and substituting its own versions. In 1883, for example, it struck
out everything after the enacting clause of a tariff bill and wrote in
its place its own measure, and the House subsequently accepted the
amendment. The U.S. Senate likewise added 847 amendments to
what later became the Payne-Aldrich Tariff Act of 1909; it dictated
the schedules of the Tariff Act of 1921; it rewrote an extensive tax
revision
7
bill in the same year and recast most of the tariff bill of
1922. Given, then, the power of the Senate to propose amendments,
the Senate can propose its own version even with respect to bills
which are required by the Constitution to originate in the House.
________________
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3 Art. VII, § 21.
4 Art. VI, § 1.
5 U.S. CONST., Art. II, § 2, cl. 2.
6 Rainey v. United States, 232 U.S. 309, 58 L. Ed. 117 (1914).
7 F.A. OGG AND P.O. RAY, INTRODUCTION TO AMERICAN GOVERNMENT
309, n. 2 (1945).
VOL. 235, AUGUST 25, 1994
Tolentino vs. Secretary of Finance
It is insisted, however, that S. No. 1630 was passed not in
substitution of H. No. 11197 but of another Senate bill (S. No. 1129)
earlier filed and that what the Senate did was merely to “take [H.
No. 11197] into consideration” in enacting S. No. 1630. There is
really no difference between the Senate preserving H. No. 11197 up
to the enacting clause and then writing its own version following
the enacting clause (which, it would seem, petitioners admit is an
amendment by substitution), and, on the other hand, separately
presenting a bill of its own on the same subject matter. In either
case the result are two bills on the same subject.
Indeed, what the Constitution simply means is that the initiative
for filing revenue, tariff, or tax bills, bills authorizing an increase of
the public debt, private bills and bills of local application must come
from the House of Representatives on the theory that, elected as
they are from the districts, the members of the House can be
expected to be more sensitive to the local needs and problems. On
the other hand, the senators, who are elected at large, are expected
to approach the same problems from the national perspective. Both
views are thereby made to bear on the enactment of such laws.
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, so long as action by the Senate as a body is withheld
pending receipt of the House bill. The Court cannot, therefore,
understand the alarm expressed over the fact that on March 1,
1993, eight months before the House passed H. No. 11197, S. No.
1129 had been filed in the Senate. After all it does not appear that
the Senate ever considered it. It was only after the Senate had
received H. No. 11197 on November 23, 1993 that the process of
legislation in respect of it began with the referral to the Senate
Committee on Ways and Means of H. No. 11197 and the submission
by the Committee on February 7, 1994 of S. No. 1630. For that
matter, if the question were simply the priority in the time of filing
of bills, the fact is that it was in the House that a bill (H. No. 253) to
amend the VAT law was first filed on July 22, 1992. Several other
bills had been filed in the House before S. No. 1129 was filed in the
Senate, and H. No. 11197 was only a substitute of those earlier
bills.
664 SUPREME COURT REPORTS ANNOTATED
Tolentino vs. Secretary of Finance
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Second. Enough has been said to show that it was within the power
of the Senate to propose S. No. 1630. We now pass to the next
argument of petitioners that S. No. 1630 did not pass 8three readings
on separate days as required by the Constitution because the
second and third readings were done on the same 9day, March 24,
1994. But this 10was because on February 24, 1994 and again on
March 22, 1994, the President had certified S. No. 1630 as urgent.
663
The presidential certification dispensed with the requirement not
only of printing but also that of reading the bill on separate days.
663 The phrase “except when the President certifies to the necessity of
its immediate enactment, etc.” in Art. VI, § 26(2) qualifies the two
stated conditions before a bill can become a law: (i) the bill has
passed three readings on separate days and (ii) it has been printed
in its final form and distributed three days before it is finally
approved.
In other words, the “unless” clause must be read in relation to
the “except” clause, because the two are really coordinate clauses of
the same sentence. To construe the “except” clause as simply
dispensing with the second requirement in the “unless” clause (i.e.,
printing and distribution three days before final approval) would
not only violate the rules of grammar. It would also negate the very
premise of the “except” clause: the necessity of securing
_______________
8 Although the 1935 Constitution did not expressly require that bills must pass
three readings in each House, this was clearly implied from its Art. VI, § 21(2) so
that the two Houses by their rules prescribed three readings for the passage of bills.
Later the requirement was expressly provided in the 1973 Constitution from which
Art. VI, § 26(2) was taken. Art. VIII, § 19(2) of the 1973 document provided: No bill
shall become a law unless it has passed three readings on separate days, and printed
copies thereof in its final form have been distributed to the Members three days
before its passage, except when the Prime Minister certifies to the necessity of its
immediate enactment to meet a public calamity or emergency. Upon the last reading
of a bill, no amendment thereto shall be allowed, and the vote thereon shall be taken
immediately thereafter, and the yeas and nays entered in the Journal.
9 Respondents’ Consolidated Reply, Annex 14.
10 Memorandum of Petitioner Arturo M. Tolentino, Supplement C.
665
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Tolentino vs. Secretary of Finance
the immediate enactment of a bill which is certified in order to meet
a public calamity or emergency. For if it is only the printing that is
dispensed with by presidential certification, the time saved would
be so negligible as to be of any use in insuring imme-diate
enactment. It may well be doubted whether doing away with the
necessity of printing and distributing copies of the bill three days
664
before the third reading would insure speedy enactment of a law in
the face of an emergency requiring the calling of a special election
for President and Vice-President. Under the Constitution such a
law is required to be made within seven days of the convening of
11
Congress in emergency session.
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That upon the certification of a bill by the President the
requirement of three readings on separate days and of printing and
distribution can be dispensed with is supported by the weight of
legislative practice. For example, the bill defining the certiorari
jurisdiction of this Court which, in consolidation with the Senate
version, became Republic Act No. 5440, was passed on second and
third readings in the House of Representatives on the same day
(May 14,12
1968) after the bill had been certified by the President as
urgent.
There is, therefore, no merit in the contention that presidential
certification dispenses only with the requirement for the printing of
the bill and its distribution three days before its passage but
________________
11 Art. VII, § 10 provides: “The Congress shall, at ten o’clock in the morning of the
third day after the vacancy in the offices of the President and Vice-President occurs,
convene in accordance with its rules without need of a call and within seven days
enact a law calling for a special election to elect a President and a Vice-President to
be held not earlier than forty-five days nor later than sixty days from the time of
such call. The bill calling such special election shall be deemed certified under
paragraph 2, Section 26, Article VI of this Constitution and shall become law upon
its approval on third reading by the Congress. Appro-priations for the special
election shall be charged against any current appropriations and shall be exempt
from the requirements of paragraph 4, Section 25, Article VI of this Constitution.
The convening of the Congress cannot be suspended nor the special election
postponed. No special election shall be called if the vacancy occurs within eighteen
months before the date of the next presidential election.”
12 JOURNAL OF THE HOUSE OF REPRESENTATIVES, SIXTH CONGRESS,
FOURTH SESSION 398-399 (1968).
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666 SUPREME COURT REPORTS ANNOTATED
Tolentino vs. Secretary of Finance
not with the requirement of three readings on separate days, also.
It is nonetheless urged that the certification of the bill in this
case was invalid because there was no emergency, the condition
stated in the certification of a “growing budget deficit” not being an
unusual condition in this country.
It is noteworthy that no member of the Senate saw fit to
controvert the reality of the factual basis of the certification. To the
contrary, by passing S. No. 1630 on second and third readings on
March 24, 1994, the Senate accepted the President’s certification.
Should such certification be now reviewed by this Court, especially
when no evidence has been shown that, because S. No. 1630 was
taken up on second and third readings on the same day, the
members of the Senate were deprived of the time needed for the
study of a vital piece of legislation?
The sufficiency of the factual basis of the suspension of the writ
of habeas corpus or declaration of martial law under Art. VII, § 18,
or the existence of a national emergency justifying the delegation of
extraordinary powers to the President under Art. VI, § 23(2), is
subject to judicial review because basic rights of individuals may be
at hazard. But the factual basis of presidential certification of bills,
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which involves doing away with procedural requirements designed
to insure that bills are duly considered by members of Congress,
certainly should elicit a different standard of review.
Petitioners also invite attention to the fact that the President
certified S. No. 1630 and not H. No. 11197. That is because S. No.
1630 was what the Senate was considering. When the matter was
before the House, the President likewise certified H. No. 9210 then
pending in the House.
Third. Finally it is contended that the bill which became
Republic Act No. 7716 is the bill which the Conference Committee
prepared by consolidating H. No. 11197 and S. No. 1630. It is
claimed that the Conference Committee report included provisions
not found in either the House bill or the Senate bill and that these
provisions were “surreptitiously” inserted by the Conference
Committee. Much is made of the fact that in the last two days of its
session on April 21 and 25, 1994 the Committee met behind closed
doors. We are not told, however, whether the provisions were not
the result of the give and take that often mark the
667
VOL. 235, AUGUST 25, 1994 667
Tolentino vs. Secretary of Finance
proceedings of conference committees.
Nor is there anything unusual or extraordinary about the fact
that the Conference Committee met in executive sessions. Often the
only way to reach agreement on conflicting provisions is to meet
behind closed doors, with only the conferees present. Otherwise, no
compromise is likely to be made. The Court is not about to take the
suggestion of a cabal or sinister motive attributed to the conferees
on the basis solely of their “secret meetings” on April 21 and 25,
1994, nor read anything into the incomplete remarks of the
members, marked in the transcript of stenographic notes by
ellipses. The incomplete sentences are probably due to the
stenographer’s own limitations or to the incoherence that
sometimes characterize conversations. William Safire noted some
such lapses in recorded talks even by recent past Presidents of the
United States.
In any event, in the United States conference committees had
been customarily held in executive
13
sessions with only the conferees
and their staffs in attendance. Only in November 1975 was a new
rule adopted requiring open sessions. Even then a majority of14either
chamber’s conferees may vote in public to close the meetings.
As to the possibility of an entirely new bill emerging out of a
Conference Committee, it has been explained:
Under congressional rules of procedure, conference committees are not
expected to make any material change in the measure at issue, either by
deleting provisions to which both houses have already agreed or by
inserting new provisions. But this is a difficult provision to enforce. Note
the problem when one house amends a proposal originating in either house
by striking out everything following the enacting clause and substituting
provisions which make it an entirely new bill. The versions are now
altogether different, permitting a conference committee to draft essentially
15
a new bill . . . .
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13 Zinn, Conference Procedure in Congress, 38 ABAJ 864-865 (1952). Tolentino vs. Secretary of Finance
14 CONG. QUARTERLY 65 (1983); M. JEWELL, THE LEGISLATIVE PROCESS
IN THE UNITED STATES 169 (1986); LEES AND SHAW, COMMITTEES IN Nonetheless, it is argued that under the respective Rules of the
LEGISLATURES 163 (1979). Senate and the House of Representatives a conference committee
15 W. KEEFE AND M. OGUL, THE AMERICAN LEGISLATIVE PROCESS 149 can only act on the differing provisions of a Senate bill and a House
(1985). bill, and that contrary to these Rules the Conference Committee
inserted provisions not found in the bills submitted to it. The
668
following provisions are cited in support of this contention:

Rules of the Senate

668 SUPREME COURT REPORTS ANNOTATED
Tolentino vs. Secretary of Finance Rule XII:

§ 26. In the event that the Senate does not agree with the House of
The result is a third version, which is considered an “amendment in Representatives on the provision of any bill or joint resolution, the
the nature of a substitute,” the only requirement for which being differences shall be settled by a conference committee of both Houses which
that the third
16
version be germane to the subject of the House and shall meet within ten days after their composition.
Senate bills. The President shall designate the members of the conference committee
Indeed, this Court recently held that it is within the power of a in accordance with subparagraph (c), Section 3 of Rule III.
conference committee to include in its report an entirely new Each Conference Committee Report shall contain a detailed and
provision
17
that is not found either in the House bill or in the Senate sufficiently explicit statement of the changes in or amendments to the subject
bill. If the committee can propose an amendment consisting of one measure, and shall be signed by the conferees.
or two provisions, there is no reason why it cannot propose several The consideration of such report shall not be in order unless the report
provisions, collectively considered as an “amendment in the nature has been filed with the Secretary of the Senate and copies thereof have
of a substitute,” so long as such amendment is germane to the been distributed to the Members.
subject of the bills before the committee. After all, its report was not (Emphasis added)
final but needed the approval of both houses of Congress to become
valid as an act of the legislative department. The charge that in this Rules of the House of Representatives
case the Conference Committee
18
acted as a third legislative chamber
is thus without any basis. Rule XIV:

§ 85. Conference Committee Reports.—In the event that the House does
________________ not agree with the Senate on the amendments to any bill or
16 W. OLESZEK, CONGRESSIONAL PROCEDURES AND POLICY PROCESS
214 (1984). ________________
17 Philippine Judges Association v. Prado, G.R. No. 105371, Nov. 11, 1993.
actually by conference committee. Any remedy found will probably take the form of
18 The charge is an old one. In the United States, the same charge, including
reducing the need for using conference committees at all; and the principal suggestion to that
claims that important provisions were being “surreptitiously added” in the
end is that bills and resolutions be referred, not, as now, to separate committees of the two
committee, was made in the 1940s. But no satisfactory alternative to the conference
houses, but to joint committees, which not only would hold single sets of hearings, but might
committee has been devised. And today, given the bicameral nature of the U.S.
deliberate and report back bills to the two houses in such agreed form that further significant
Congress, the charge is no longer heard. Compare the following from a 1945
differences would not be likely to develop. Arrangements of this nature yield excellent results
comment: “As a devise for oiling the machinery of legislation, committees of
in the legislature of Massachusetts. But there are obstacles to adoption of the plan for
conference are, under American conditions, useful, if not indispensable.
Congress, not the least of them being a natural aversion of House members to joint
Nevertheless, they have shortcomings. Without exception, they work behind closed
committees in which senators seem likely to dominate; and, as indicated below, the outlook for
doors, hold no hearings, and give their proceedings no publicity. Doubtless it would
the reform is problematical.” F.A. OGG AND P.O. RAY, supra note 7 at 310-311.
be difficult for them to make headway if they did otherwise. Nevertheless, in view of
the power which they wield, strong objection can be, and is, raised. For, while the 670
committees are supposed to deal only with actual differences between the houses and
to stay well within the bounds set by the extreme positions which the houses have
670 SUPREME COURT REPORTS ANNOTATED
taken, they often work into measures, as reported, provisions of their own devising,
even going so far as to rewrite whole sections with the sole purpose of incorporating Tolentino vs. Secretary of Finance
the views which the majority members happen to hold. . . . In practice, this often
results in the adoption of important provisions, more or less surreptitiously added, joint resolution, the differences may be settled by conference committees of
without consideration by either house—in other words, legislation nominally by both Chambers.
Congress but The consideration of conference committee reports shall always be in
order, except when the journal is being read, while the roll is being called
669 or the House is dividing on any question. Each of the pages of such reports
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shall be signed by the conferees. Each report shall contain a detailed,
sufficiently explicit statement of the changes in or amendments to the subject
measure.
The consideration of such report shall not be in order unless copies
thereof are distributed to the Members: Provided, That in the last fifteen
days of each session period it shall be deemed sufficient that three copies of
the report, signed as above provided, are deposited in the office of the
Secretary General.
(Emphasis added)
To be sure, nothing in the Rules limits a conference committee to a
consideration of conflicting provisions. But Rule XLIV, § 112 of the
Rules of the Senate is cited to the effect that “If there is no Rule
applicable to a specific case the precedents of the Legislative
Department of the Philippines shall be resorted to, and as a
supplement of these, the Rules contained in Jefferson’s Manual.”
The following is then quoted from the Jefferson’s Manual:
The managers of a conference must confine themselves to the differences
committed to them . . . and may not include subjects not within
disagreements, even though germane to a question in issue.
Note that, according to Rule XLIX, § 112, in case there is no specific
rule applicable, resort must be to the legislative practice. The
Jefferson’s Manual is resorted to only as supplement. It is common
place in Congress that conference committee reports include new
matters which, though germane, have not been committed to the
committee. This practice was admitted by Senator Raul S. Roco,
petitioner in G.R. No. 115543, during the oral argument in these
cases. Whatever, then, may be provided in the Jefferson’s Manual
must be considered to have been modified by the legislative
practice. If a change is desired in the practice it must be sought in
Congress since this question is not covered by any constitutional
provision but is only an internal rule of each house. Thus, Art. VI, §
16(3) of the Constitution provides that “Each House may determine
the rules of its proceedings . . . .”
671
VOL. 235, AUGUST 25, 1994 671
Tolentino vs. Secretary of Finance
This observation applies to the other contention that the Rules of
the two chambers were likewise disregarded in the preparation of
the Conference Committee Report because the Report did not
contain a “detailed and sufficiently explicit statement of changes in,
or amendments to, the subject measure.” The Report used brackets
and capital letters to indicate the changes. This is a standard
practice in bill-drafting. We cannot say that in using these marks
and symbols the Committee violated the Rules of the Senate and
the House. Moreover, this Court is not the proper forum for the
enforcement of these internal Rules. To the contrary, as we have
already ruled, “parliamentary rules are merely procedural and with
19
their observance the courts have no concern.” Our concern is with
the procedural requirements of the Constitution for the enactment
of laws. As far as these requirements are concerned, we are
satisfied that they have been faithfully observed in these cases.
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Nor is there any reason for requiring that the Committee’s
Report in these cases must have undergone three readings in each
of the two houses. If that be the case, there would be no end to
negotiation since each house may seek modifications of the
compromise bill. The nature of the bill, therefore, requires that it be
acted upon by each house on a “take it or leave it” basis, with the
only alternative that if it is not approved by both houses, another
conference committee must be appointed. But then again the result
would still be a compromise measure that may not be wholly
satisfying to both houses.
Art. VI, § 26(2) must, therefore, be construed as referring only to
bills introduced for the first time in either house of Congress, not to
the conference committee report. For if the purpose of requiring
three readings is to give members of Congress time to study bills, it
cannot be gainsaid that H. No. 11197 was passed in the House after
three readings; that in the Senate it was considered on first reading
and then referred to a committee of that body; that although the
Senate committee did not report out the House bill, it submitted a
version (S. No. 1630) which it had prepared by “taking into
consideration” the House bill; that for its part the Conference
Committee consolidated the two bills and prepared a
_________________
19 Osmeña v. Pendatun, 109 Phil. 863, 871 (1960).
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672 SUPREME COURT REPORTS ANNOTATED
Tolentino vs. Secretary of Finance
compromise version; that the Conference Committee Report was
thereafter approved by the House and the Senate, presumably after
appropriate study by their members. We cannot say that, as a
matter of fact, the members of Congress were not fully informed of
the provisions of the bill. The allegation that the Conference
Committee usurped the legislative power of Congress is, in our
view, without warrant in fact and in law.
Fourth. Whatever doubts there may be as to the formal validity 20
of Republic Act No. 7716 must be resolved in its favor. Our cases
manifest firm adherence to the rule that an enrolled copy of a bill is
conclusive not only of its provisions but also of its due enactment.
Not even claims that a proposed constitutional amendment was
invalid because
21
the requisite votes for its approval had not been
obtained or that certain provisions 22
of a statute had been
“smuggled” in the printing of the bill have moved or persuaded us
to look behind the proceedings of a coequal branch of the
government. There is no reason now to depart from this rule.
No claim is here
23
made that the “enrolled bill” rule is absolute. In
fact in one case we “went behind” an enrolled bill and consulted
the Journal to determine whether certain provisions of a statute
had been approved by the Senate in view of the fact that the
President of the Senate himself, who had signed the enrolled bill,
admitted a mistake and withdrew his signature, so that in effect
there was no longer an enrolled bill to consider.
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But where allegations that the constitutional procedures for the
passage of bills have not been observed have no more basis than
another allegation that the Conference Committee “surreptitiously”
inserted provisions into a bill which it had prepared, we should
decline the invitation to go behind the enrolled copy of the bill. To
disregard the “enrolled bill” rule in such cases would be to disregard
the respect due the other two departments of our government.
________________
20 E.g., Mabanag v. Lopez Vito, 78 Phil. 1 (1947); Casco (Phil.) Inc. v. Gimenez, 7
SCRA 347 (1963); Morales v. Subido, 27 SCRA 131 (1969).
21 Mabanag v. Lopez Vito, supra note 20.
22 Morales v. Subido, supra note 20.
23 Astorga v. Villegas, 56 SCRA 714 (1974).
VOL. 235, AUGUST 25, 1994
Tolentino vs. Secretary of Finance
Fifth. An additional attack on the formal validity of Republic Act
No. 7716 is made by the Philippine Airlines, Inc., petitioner in G.R.
No. 11582, namely, that it violates Art. VI, § 26(1) which provides
that “Every bill passed by Congress shall embrace only one subject
which shall be expressed in the title thereof.” It is contended that
neither H. No. 11197 nor S. No. 1630 provided for removal of
exemption of PAL transactions from the payment of the VAT and
that this was made only in the Conference Committee bill which
became Republic Act No. 7716 without reflecting this fact in its
title.
The title of Republic Act No. 7716 is:
AN ACT RESTRUCTURING THE VALUE-ADDED TAX (VAT) SYSTEM,
WIDENING ITS TAX BASE AND ENHANCING ITS ADMINISTRATION,
AND FOR THESE PURPOSES AMENDING AND REPEALING THE
RELEVANT PROVISIONS OF THE NATIONAL INTERNAL REVENUE
CODE, AS AMENDED, AND FOR OTHER PURPOSES.
Among the provisions of the NIRC amended is § 103, which
originally read:
§ 103. Exempt transactions.—The following shall be exempt from the value-
added tax:
....
(q) Transactions which are exempt under special laws or international
agreements to which the Philippines is a signatory.
Among the transactions exempted from the VAT were those of PAL
because it was exempted under its franchise (P.D. No. 1590) from
the payment of all “other taxes . . . now or in the near future,” in
consideration of the payment by it either of the corporate income
tax or a franchise tax of 2%.
As a result of its amendment by Republic Act No. 7716, § 103 of
the NIRC now provides:
§ 103. Exempt transactions.—The following shall be exempt from the value-
added tax:
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....
(q) Transactions which are exempt under special laws, except those
granted under Presidential Decree Nos. 66, 529, 972, 1491, 1590. . . .
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674 SUPREME COURT REPORTS ANNOTATED
Tolentino vs. Secretary of Finance
The effect of the amendment is to remove the exemption granted to
PAL, as far as the VAT is concerned.
The question is whether this amendment of § 103 of the NIRC is
fairly embraced in the title of Republic Act No. 7716, although no
mention is made therein of P.D. No. 1590 as among those which the
statute amends. We think it is, since the title states that the
673
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
673 exemptions granted before. To insist that P.D. No. 1590 be
mentioned in the title of the law, in addition to § 103 of the NIRC,
in which it is specifically referred to, would be to insist that the title
of a bill should be a complete index of its content.
The constitutional requirement that every bill passed by
Congress shall embrace only one subject which shall be expressed in
its title is intended to prevent surprise upon the members of
Congress and to inform the people of pending legislation so that, if
they wish to, they can be heard regarding it. If, in the case at bar,
petitioner did not know before that its exemption had been
withdrawn, it is not because of any defect in the title but perhaps
for the same reason other statutes, although published, pass
unnoticed until some event somehow calls attention to their
existence. Indeed, the title of Republic Act No. 7716 is not any more
general than the title of PAL’s own franchise under P.D. No. 1590,
and yet no mention is made of its tax exemption. The title of P.D.
No. 1590 is:
AN ACT GRANTING A NEW FRANCHISE TO PHILIPPINE AIRLINES,
INC. TO ESTABLISH, OPERATE, AND MAINTAIN AIRTRANSPORT
SERVICES IN THE PHILIPPINES AND BETWEEN THE PHILIPPINES
AND OTHER COUNTRIES.
The trend in our cases is to construe the constitutional requirement
in such a manner that courts do not unduly interfere with the
enactment of necessary legislation and to consider it sufficient if the
title expresses the general subject of the statute and all its
24
provisions are germane to the general subject thus expressed.
________________
24 See, e.g., Alalayan v. National Power Corp., 24 SCRA 172 (1968); Cordero v.
Cabatuando, 6 SCRA 418 (1962); Sumulong v. COMELEC, 73 Phil. 288 (1941).
675
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It is further contended that amendment of petitioner’s franchise
may only be made by special law, in view of § 24 of P.D. No. 1590
which provides:
This franchise, as amended, or any section or provision hereof may only be
modified, amended, or repealed expressly by a special law or decree that
shall specifically modify, amend, or repeal this franchise or any section or
provision thereof.
This provision is evidently intended to prevent the amendment of
the franchise by mere implication resulting from the enactment of a
later inconsistent statute, in consideration of the fact that a
franchise is a contract which can be altered only25by consent of the
parties. Thus in Manila Railroad Co. v. Rafferty, it was held that
an Act of the U.S. Congress, which provided for the payment of tax
on certain goods and articles imported into the Philippines, did not
amend the franchise of plaintiff, which exempted it from all taxes
except those mentioned in its franchise. It was held that a special
law cannot be amended by a general law.
In contrast, in the case at bar, Republic Act No. 7716 expressly
amends PAL’s franchise (P.D. No. 1590) by specifically excepting
from the grant of exemptions from the VAT PAL’s exemption under
P.D. No. 1590. This is within the power of Congress to do under Art.
XII, § 11 of the Constitution, which provides that the grant of a
franchise for the operation of a public utility is subject to
amendment, alteration or repeal by Congress when the common
good so requires.
II. SUBSTANTIVE ISSUES
A. Claims of Press Freedom, Freedom of Thought and Religious
Freedom
The Philippine Press Institute (PPI), petitioner in G.R. No. 115544,
is a nonprofit organization of newspaper publishers established for
the improvement of journalism in the Philippines. On the other
hand, petitioner in G.R. No. 115781, the Philippine Bible Society
(PBS), is a nonprofit organization engaged in the
_______________
25 40 Phil. 224 (1919).
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Tolentino vs. Secretary of Finance
printing and distribution of bibles and other religious articles. Both
petitioners claim violations of their rights under §§ 4 and 5 of the
Bill of Rights as a result of the enactment of the VAT Law.
The PPI questions the law insofar as it has withdrawn the
exemption previously granted to the press under § 103 (f) of the
NIRC. Although the exemption was subsequently restored by
administrative regulation with respect to the circulation income of
newspapers, the PPI presses its claim because of the possibility that
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the exemption may still be removed by mere revocation of the
regulation of the Secretary of Finance. On the other hand, the PBS
goes so far as to question the Secretary’s power to grant exemption
for two reasons: (1) The Secretary of Finance has no power to grant
tax exemption because this is vested in Congress and26 requires for
its exercise the vote of a majority of all its members and (2) the
Secretary’s duty is to execute the law. § 103 of the NIRC contains a
list of transactions exempted from VAT. Among the transactions
previously granted exemption were:
(f) Printing, publication, importation or sale of books and any newspaper,
magazine, review, or bulletin which appears at regular intervals with fixed
prices for subscription and sale and which is devoted principally to the
publication of advertisements.
Republic Act No. 7716 amended § 103 by deleting ¶ (f) with the
result that print media became subject to the VAT with respect to
all aspects of their operations. Later, however, based on a
memorandum of the Secretary of Justice, respondent Secretary of
Finance issued Revenue Regulations No. 11-94, dated June 27,
1994, exempting the “circulation income of print media pursuant to
§ 4 Article III of the 1987 Philippine Constitution guaranteeing
against abridgment of freedom of the press, among others.” The
exemption of “circulation income” has left income from
advertisements still subject to the VAT.
It is unnecessary to pass upon the contention that the exemption
granted is beyond the authority of the Secretary of Finance to
________________
26 Art. VI, § 28(4) provides: “No law granting any tax exemption shall be passed
without the concurrence of a majority of all the Members of the Congress.”
677
VOL. 235, AUGUST 25, 1994 677
Tolentino vs. Secretary of Finance
give, in view of PPI’s contention that even with the exemption of the
circulation revenue of print media there is still an unconstitutional
abridgment of press freedom because of the imposition of the VAT
on the gross receipts of newspapers from advertisements and on
their acquisition of paper, ink and services for publication. Even on
the assumption that no exemption has effectively been granted to
print media transactions, we find no violation of press freedom in
these cases.
To be sure, we are not dealing here with a statute that on its face
operates in the area of press freedom. The PPI’s claim is simply
that, as applied to newspapers, the law abridges press freedom.
Even with due recognition of its high estate and its importance in a
democratic society, however, the press is not immune from general
regulation by the State. It has been held:
The publisher of a newspaper has no immunity from the application of
general laws. He has no special privilege to invade the rights and liberties
of others. He must answer for libel. He may be punished for contempt of
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court . . . . Like others, he must pay equitable and nondiscriminatory taxes
27
on his business . . . .
The PPI does not dispute this point, either.
What it contends is that by withdrawing the exemption
previously granted to print media transactions involving printing,
publication, importation or sale of newspapers, Republic Act No.
7716 has singled out the press for discriminatory treatment and
that within the class of mass media the law discriminates against
print media by giving broadcast media favored treatment. We have
carefully examined this argument, but we are unable to find a
differential treatment of the press by the law, much less any
censorial motivation for its enactment. If the press is now required
to pay a value-added tax on its transactions, it is not because it is
being singled out, much less targeted, for special treatment but only
because of the removal of the exemption previously granted to it by
law. The withdrawal of exemption is all that is involved in these
cases. Other transactions, likewise previously granted exemption,
have been delisted as part of the
_______________
27 Associated Press v. NLRB, 301 U.S. 103, 132, 81 L.Ed. 953, 961 (1937).
678
678 SUPREME COURT REPORTS ANNOTATED
Tolentino vs. Secretary of Finance
scheme to expand the base and the scope of the VAT system. The
law would perhaps be open to the charge of discriminatory
treatment if the only privilege withdrawn had been that granted to
the press. But that is not the case.
The situation in the case at bar is indeed a far cry from those
cited by the PPI in support of its claim that Republic Act No. 7716
subjects the press to discriminatory taxation. In the cases cited, the
discriminatory purpose was clear either from the background of the
law or from28
its operation. For example, in Grosjean v. American
Press Co., the law imposed a license tax equivalent to 2% of the
gross receipts derived from advertisements only on newspapers
which had a circulation of more than 20,000 copies per week.
Because the tax was not based on the volume of advertisement
alone but was measured by the extent of its circulation as well, the
law applied only to the thirteen large newspapers in Louisiana,
leaving untaxed four papers with circulation of only slightly less
than 20,000 copies a week and 120 weekly newspapers which were
in serious competition with the thirteen newspapers in question. It
was well known that the thirteen newspapers had been critical of
Senator Huey Long, and the Long-dominated legislature of
Louisiana responded by taxing what Long described as the “lying
newspapers” by imposing on them “a tax on lying.” The effect of the
tax was to curtail both their revenue and their circulation. As the
U.S. Supreme Court noted, the tax was “a deliberate and calculated
device in the guise of a tax to limit the circulation of information to
which the 29public is entitled in virtue of the constitutional
guaranties.” The case is a classic illustration of the warning that
the power to tax is the
30
power to destroy.
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30
In the other case invoked by the PPI, the press was also found
to have been singled out because everything was exempt from the
“use tax” on ink and paper, except the press. Minnesota imposed a
tax on the sales of goods in that state. To protect the sales tax, it
enacted a complementary tax on the privilege of “using, storing or
consuming in that state tangible personal
_______________
28 297 U.S. 233, 80 L.Ed. 660 (1936).
29 297 U.S. at 250, 80 L.Ed. at 669.
30 Minneapolis Star v. Minnesota Commissioner of Revenue, 460 U.S. 575, 75
L.Ed.2d 295 (1983).
679
VOL. 235, AUGUST 25, 1994 679
Tolentino vs. Secretary of Finance
property” by eliminating the residents’ incentive to get goods from
outside states where the sales tax might be lower. The Minnesota
Star Tribune was exempted from both taxes from 1967 to 1971. In
1971, however, the state legislature amended the tax scheme by
imposing the “use tax” on the cost of paper and ink used for
publication. The law was held to have singled out the press because
(1) there was no reason for imposing the “use tax” since the press
was exempt from the sales tax and (2) the “use tax” was laid on an
“intermediate transaction rather than the ultimate retail sale.”
Minnesota had a heavy burden of justifying the differential
treatment and it failed to do so. In addition, the U.S. Supreme
Court found the law to be discriminatory because the legislature, by
again amending the law so as to exempt the first $100,000 of paper
and ink used, further narrowed the coverage of the tax so that “only
a handful of publishers pay31 any tax at all and even fewer pay any
significant amount of tax.” The discriminatory purpose was thus
very clear. 32
More recently, in Arkansas Writers’ Project, Inc. v. Ragland, it
was held that a law which taxed general interest magazines but not
newspapers and religious, professional, trade and sports journals
was discriminatory because while the tax did not single out the
press as a whole, it targeted a small group within the press. What is
more, by differentiating on the basis of contents (i.e., between
general interest and special interests such as religion or sports) the
law became “entirely incompatible with the First Amendment’s
guarantee of freedom of the press.”
These cases come down to this: that unless justified, the
differential treatment of the press creates risks of suppression of
expression. In contrast, in the cases at bar, the statute applies to a
wide range of goods and services. The argument that, by imposing
the VAT only on print media whose gross sales exceeds P480,000
33
but not more than P750,000, the law discriminates is
________________
31 460 U.S. at 591, 75 L.Ed.2d at 308-9 (1983).
32 481 U.S. 221, 95 L.Ed.2d 209 (1987).
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33 § 103(t) of the NIRC exempts from the VAT “Sale or lease of goods or properties
or the performance of services other than the transactions mentioned in the
preceding paragraphs, the gross annual sales and/or receipts [of which] do not exceed
the amount prescribed in regulations to be promulgated by the President upon the
recommendation
680 SUPREME COURT REPORTS ANNOTATED
Tolentino vs. Secretary of Finance
without merit since it has not been shown that as a result the class
subject to tax has been unreasonably narrowed. The fact is that this
limitation does not apply to the press alone but to all sales. Nor is
impermissible motive shown by the fact that print media and
broadcast media are treated differently. The press is taxed on its
transactions involving printing and publication, which are different
from the transactions of broadcast media. There is thus a
reasonable basis for the classification.
The cases canvassed, it must be stressed, eschew any suggestion
that “owners of newspapers are immune from any forms of ordinary
taxation.” The license tax in the Grosjean case was declared invalid
because it was “one single in kind, with a 34long history of hostile
misuse against the freedom of the press.” On the other hand,
Minneapolis Star acknowledged that “The First Amendment does
not prohibit all regulation of the press [and that] the States and the
Federal Government can subject newspapers to generally applicable 35
economic regulations without creating constitutional problems.”
What has been said above also disposes of the allegations of the
PBS that the removal of the exemption of printing, publication or
importation of books and religious articles, as well as their printing
and publication, likewise violates freedom of thought and of
conscience. For as the U.S. Supreme Court unanimously 36
held in
Jimmy Swaggart Ministries v. Board of Equalization, the Free
Exercise of Religion Clause does not prohibit imposing a generally
applicable sales and use tax on the sale of religious materials by a
religious organization.
This brings
37
us to the question whether the registration provision
of the law, although of general applicability, nonetheless is
_________________
by the Secretary of Finance which shall not be less than Four hundred eighty
thousand pesos (P480,000.00) or more than Seven hundred twenty thousand pesos
(P720,000.00) subject to tax under Section 112 of this Code.”
34 297 U.S. at 250, 80 L.Ed. at 668.
35 460 U.S. at 581, 75 L.Ed.2d at 302.
36 493 U.S. 378, 107 L.Ed.2d 796 (1990).
37 § 107 of the NIRC provides: “Any person subject to a value added tax under
Sections 100 and 102 of this Code shall register with the appropriate Revenue
District Officer and pay an annual registration
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Tolentino vs. Secretary of Finance
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invalid when applied to the press because it lays a prior restraint on
its essential
38
freedom. The case of American Bible Society v. City of
Manila is cited by both the PBS and the PPI in support of their
contention that the law imposes censorship. There, this Court held
that an ordinance of the City of Manila, which imposed a license fee
680
on those engaged in the business of general merchandise, could not
be applied to the appellant’s sale of bibles and other39 religious
literature. This Court relied on Murdock v. Pennsylvania, in which
it was held that, as a license fee is fixed in amount and unrelated to
the receipts of the taxpayer, the license fee, when applied to a
religious sect, was actually being imposed as a condition for the
exercise of the sect’s right under the Constitution. For that reason,
it was held, the license fee “restrains in advance those
constitutional liberties of40 press and religion and inevitably tends to
suppress their exercise.”
But, in this case, the fee in § 107, although a fixed amount
(P1,000), is not imposed for the exercise of a privilege but only for
the purpose of defraying part of the cost of registration. The
registration requirement is a central feature of the VAT system. It
is designed to provide a record of tax credits because any person
who is subject to the payment of the VAT pays an input tax, even as
he collects an output tax on sales made or services rendered. The
registration fee is thus a mere administrative fee, one not imposed
on the exercise of a privilege, much less a constitutional right.
________________
fee in the amount of One thousand pesos (P1,000.00) for every separate or distinct
establishment or place of business and every year thereafter on or before the last day
of January. Any person just commencing a business subject to the value-added tax
must pay the fee before engaging therein . . .”
38 101 Phil. 386 (1957).
39 319 U.S. 105, 113, 87 L.Ed. 1292 (1943).
40 319 U.S. at 114, 87 L.Ed. 1292 at 1298. For the same reason, in People v.
Korins, 385 N.Y.S. 2d 474 (1976) a decision of the city court of Utica, Oneida County
held that to apply an ordinance requiring a business license to be obtained before a
person could sell newspapers in the streets would be to impose a prior restraint on
press freedom because “a newspaper is not in the same category as pineapple or a
soap powder or a pair of shoes” whose sale may be conditioned on the possession of a
business license.
682
682 SUPREME COURT REPORTS ANNOTATED
Tolentino vs. Secretary of Finance
For the foregoing reasons, we find the attack on Republic Act No.
7716 on the ground that it offends the free speech, press and
freedom of religion guarantees of the Constitution to be without
merit. For the same reasons, we find the claim of the Philippine
Educational Publishers Association (PEPA) in G.R. No. 115931 that
681
the increase in the price of books and other educational materials as
a result of the VAT would violate the constitutional mandate to the
681 government to give priority to education, science and technology
(Art. II, § 17) to be untenable.
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B. Claims of Regressivity, Denial of Due Process, Equal Protection,
and Impairment of Contracts
There is basis for passing upon claims that on its face the statute
violates the guarantees of freedom of speech, press and religion.
The possible “chilling effect” which it may have on the essential
freedom of the mind and conscience and the need to assure that the
channels of communication are open and operating importunately
demand the exercise of this Court’s power of review.
There is, however, no justification for passing upon the claims
that the law also violates the rule that taxation must be progressive
and that it denies petitioners’ right to due process and the equal
protection of the laws. The reason for this different treatment has
been cogently stated by an eminent authority on constitutional law
thus: “[W]hen freedom of the mind is imperiled by law, it is freedom
that commands a momentum of respect; when property is imperiled
it is the lawmakers’ judgment that commands respect. This dual
standard may not precisely reverse the presumption of
constitutionality in civil liberties cases, but obviously it does set up
41
a hierarchy of values within the due process clause.”
Indeed, the absence of threat of immediate harm makes the need
for judicial intervention less evident and underscores the essential
nature of petitioners’ attack on the law on the grounds of
regressivity, denial of due process and equal protection and
________________
41 P.A. FREUND, ON UNDERSTANDING THE SUPREME COURT II (1950),
quoted in Ermita, Malate Hotel and Motel Operators Ass’n v. City Mayor, 21 SCRA
449, 459 (1967).
VOL. 235, AUGUST 25, 1994
Tolentino vs. Secretary of Finance
impairment of contracts as a mere academic discussion of the
merits of the law. For the fact is that there have even been no
notices of assessments issued to petitioners and no determinations
at the administrative levels of their claims so as to illuminate the
actual operation of the law and enable us to reach sound judgment
regarding so fundamental questions as those raised in these suits.
Thus, the broad argument against the VAT is that it is
regressive and that it violates the requirement that “The rule of
taxation shall be uniform and equitable [and] Congress shall evolve
42
a progressive system of taxation.” Petitioners in G.R. No. 115781
quote from a paper, entitled “VAT Policy Issues: Structure,
Regressivity, Inflation and Exports” by Alan A. Tait of the
International Monetary Fund, that “VAT payment by low-income
households will be a higher proportion of their incomes (and
expenditures) than payments by higher-income households. That is,
the VAT will be regressive.” Petitioners contend that as a result of
the uniform 10% VAT, the tax on consumption goods of those who
are in the higher-income bracket, which before were taxed at a rate
higher than 10%, has been reduced, while basic commodities, which
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before were taxed at rates ranging from 3% to 5%, are now taxed at
a higher rate.
Just as vigorously as it is asserted that the law is regressive, the
opposite claim is pressed by respondents that in fact it distributes
the tax burden to as many goods and services as possible
particularly to those which are within the reach of higher-income
groups, even as the law exempts basic goods and services. It is thus
equitable. The goods and properties subject to the VAT are those
used or consumed by higher-income groups. These include real
properties held primarily for sale to customers or held for lease in
the ordinary course of business, the right or privilege to use
industrial, commercial or scientific equipment, hotels, restaurants
and similar places, tourist buses, and the like. On the other hand,
small business establishments, with annual gross sales of less than
P500,000, are exempted. This,
_________________
42 Art. VI, § 28(1). Related to this argument is the claim that Republic Act No.
7716 likewise infringes the Due Process and Equal Protection Clauses of the Bill of
Rights, Art. III, § 1(1).
684
684 SUPREME COURT REPORTS ANNOTATED
Tolentino vs. Secretary of Finance
according to respondents, removes from the coverage of the law
some 30,000 business
43
establishments. On the other hand, an
occasional paper of the Center for Research and Communication
683 cites a NEDA study that the VAT has minimal impact on inflation
and income distribution and that while additional expenditure for
the lowest income class is only P301 or 1.49% a year, that for a
683
family earning P500,000 a year or more is P8,340 or 2.2%.
Lacking empirical data on which to base any conclusion
regarding these arguments, any discussion whether the VAT is
regressive in the sense that it will hit the “poor” and middle-income
group in society harder than it will the “rich,” as the Cooperative
Union of the Philippines (CUP) claims in G.R. No. 115873, is largely
an academic exercise. On the other hand, the CUP’s contention that
Congress’ withdrawal of exemption of producers cooperatives,
marketing cooperatives, and service cooperatives, while
maintaining that granted to electric cooperatives, not only goes
against the constitutional policy to promote cooperatives as
instruments of social justice (Art. XII, § 15) but also denies such
cooperatives the equal protection of the law is actually a policy
argument. The legislature is not required to adhere
44
to a policy of
“all or none” in choosing the subject of taxation.
Nor is the contention of the Chamber of Real Estate and Builders
Association (CREBA), petitioner in G.R. 115754, that the VAT will
reduce the mark up of its members by as much as 85% to 90% any
more concrete. It is a mere allegation. On the other hand, the claim
of the Philippine Press Institute, petitioner in G.R. No. 115544, that
the VAT will drive some of its members out of circulation because
their profits from advertisements will not be enough to pay for their
tax liability, while purporting to be based on the financial
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statements of the newspapers in question, still falls short of the
establishment of facts by evidence so necessary for adjudicating the
question whether the tax is oppressive and confiscatory.
Indeed, regressivity is not a negative standard for courts to
enforce. What Congress is required by the Constitution to do is to
_______________
43 Neri, “In Support of the Expanded Value-Added Tax,” (CRC Economic Policy
Papers No. 5 1994) pp. 3-4.
44 Cf. Lutz v. Araneta, 98 Phil. 148, 153 (1955).
VOL. 235, AUGUST 25, 1994
Tolentino vs. Secretary of Finance
“evolve a progressive system of taxation.” This is a directive to
Congress, just like the directive to it to give priority to the
enactment of laws for the enhancement of human dignity and the
reduction of social, economic and political inequalities (Art. XIII, §
1), or for the promotion of the right to “quality education” (Art. XIV,
§ 1). These provisions are put in the Constitution as moral
incentives to legislation, not as judicially enforceable
45
rights.
At all events, our 1988 decision in Kapatiran should have laid
to rest the questions now raised against the VAT. There similar
arguments made against the original VAT Law (Executive Order
No. 273) were held to be hypothetical, with no more basis than
newspaper articles which this Court found to be “hearsay and
[without] evidentiary value.” As Republic Act No. 7716 merely
expands the base of the VAT system and its coverage as provided in
the original VAT Law, further debate on the desirability and
wisdom of the law should have shifted to Congress.
Only slightly less abstract but nonetheless hypothetical is the
contention of CREBA 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
that “No law impairing the obligation of contracts shall be passed.”
It is enough to say that the parties to a contract cannot, through the
exercise of prophetic discernment, 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, but the
reservation of essential attributes of sovereign power is also read
into contracts as a basic postulate of the legal order. The policy of
protecting contracts against impairment presupposes the
maintenance of a government which retains 46
adequate authority to
secure the peace and good order of society.
In truth, the Contract Clause has never been thought as a
limitation on the exercise of the State’s power of taxation save
_________________
45 Kapatiran ng mga Naglilingkod sa Pamahalaan ng Pilipinas, Inc. v. Tan, 163
SCRA 371.
46 Cf. Philippine American Life Ins. Co. v. Auditor General, 22 SCRA 135 (1968).
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686 SUPREME COURT REPORTS ANNOTATED
Tolentino vs. Secretary of Finance
only where a 47
tax exemption has been granted for a valid
consideration. Such is not the case of PAL in G.R. No. 115852, and
we do not understand it to make this claim. Rather, its position, as
discussed above, is that the removal of its tax exemption cannot be
made by a general, but only by a specific, law.
The substantive issues raised in some of the cases are presented
in abstract, hypothetical form because of the lack of a concrete
685
record. We accept that this Court does not only adjudicate
48
private
cases; that public actions by “non-Hohfeldian” or ideological
685 plaintiffs are now cognizable provided they meet the standing
requirement of the Constitution; that under Art. VIII, § 1, ¶ 2 the
Court has a “special function” of vindicating constitutional rights.
Nonetheless the feeling cannot be escaped that we do not have
before us in these cases a fully developed factual record49that alone
can impart to our adjudication the impact of actuality to insure
that decision-making is informed and well grounded. Needless to
say, we do not have power to render advisory opinions or even
jurisdiction over petitions for declaratory judgment. In effect we are
being asked to do what the Conference Committee is precisely
accused of having done in these cases—to sit as a third legislative
chamber to review legislation.
________________
47 See E. M. FERNANDO, THE CONSTITUTION OF THE PHILIPPINES 560-
561 (2d Ed., 1977).
48 The term is Professor Jaffe’s (JUDICIAL CONTROL OF ADMINISTRATIVE
ACTION (1965) adopted by Justice Harlan in his dissent in Flast v. Cohen, 392 U.S.
83, 119-120, L.Ed.2d 947, 973 (1968) to distinguish between the personal and
proprietary interest of traditional plaintiffs and the public interest of a citizen suing
in a public action. The term was mentioned by some members of this Court in the
Lotto case (Kilosbayan, Inc. v. Guingona, G.R. No. 113375, May 5, 1994).
49 Compare Justice Laurel: “Even then, this power of judicial review is limited to
actual cases and controversies to be exercised after full opportunity of argument by
the parties, and limited further to the constitutional question raised or the very lis
mota presented. Any attempt at abstraction could only lead to dialectics and barren
legal questions and to sterile conclusions unrelated to actualities.” Angara v.
Electoral Commission, 63 Phil. 139, 158 (1936).
687
VOL. 235, AUGUST 25, 1994 687
Tolentino vs. Secretary of Finance
We are told, however, that the power of judicial review is not so
much power as it is duty imposed on this Court by the Constitution
and that we would be remiss in the performance of that duty if we
decline to look behind the barriers set by the principle of separation
of powers. Art. VIII, § 1, ¶ 2 is cited in support of this view:
Judicial power includes the duty of the courts of justice to settle actual
686 controversies involving rights which are legally demandable and
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enforceable, and to determine whether or not there has been a grave abuse
of discretion amounting to lack or excess of jurisdiction on the part of any
branch or instrumentality of the Government.
To view the judicial power of review as a duty is nothing new. Chief
Justice Marshall said so in 1803, to justify the assertion of this
power in Marbury v. Madison:
It is emphatically the province and duty of the judicial department to say
what the law is. Those who apply the rule to particular cases must of
necessity expound and interpret that rule. If two laws conflict with each
50
other, the courts must decide on the operation of each.
Justice Laurel echoed this justification in 1936 in Angara v.
Electoral Commission:
And when the judiciary mediates to allocate constitutional boundaries, it
does not assert any superiority over the other departments; it does not in
reality nullify or invalidate an act of the legislature, but only asserts the
solemn and sacred obligation assigned to it by the Constitution to
determine conflicting claims of authority under the Constitution and to
establish for the parties in an actual controversy the rights which that
51
instrument secures and guarantees to them.
This 52
conception of the judicial power has been affirmed in several
cases of this Court following Angara.
_______________
50 1 Cranch 137, 2 L.Ed. 60(1803) (emphasis added).
51 Supra note 49 (emphasis added).
52 People v. Vera, 65 Phil. 56, 94 (1937); Tañada v. Cuenco, 103 Phil. 1051, 1061-2
(1957); Macias v. COMELEC, 3 SCRA 1, 7-8 (1961).
688
688 SUPREME COURT REPORTS ANNOTATED
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It does not add anything, therefore, to invoke this “duty” to justify
this Court’s intervention in what is essentially a case that at best is
not ripe for adjudication. That duty must still be performed in the
context of a concrete case or controversy, as Art. VIII, § 5(2) clearly
defines our jurisdiction in terms of “cases,” and nothing but “cases.”
That the other departments of the government may have committed
a grave abuse of discretion is not an independent ground for
exercising our power. Disregard of the essential limits imposed by
the case and controversy requirement can in the long run only
result in undermining our authority as a court of law. For, as
judges, what we are called upon to render is judgment according to
law, not according to what may appear to be the opinion of the day.
____________________________________
In the preceding pages we have endeavored to discuss, within
limits, the validity of Republic Act No. 7716 in its formal and
substantive aspects as this has been raised in the various cases
before us. To sum up, we hold:
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(1) That the procedural requirements of the Constitution have
been complied with by Congress in the enactment of the
statute;
(2) That judicial inquiry whether the formal requirements for
the enactment of statutes—beyond those prescribed by the
Constitution—have been observed is precluded by the
principle of separation of powers;
(3) That the law does not abridge freedom of speech, expression
or the press, nor interfere with the free exercise of religion,
nor deny to any of the parties the right to an education; and
(4) That, in view of the absence of a factual foundation of
record, claims that the law is regressive, 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.
WHEREFORE, the petitions in these cases are DISMISSED.
689
VOL. 235, AUGUST 25, 1994 689
Tolentino vs. Secretary of Finance
     Bidin, Quiason and Kapunan, JJ., concur.
     Narvasa (C.J.) and Melo, J., Concur in separate opinions.
     Cruz, Padilla and Vitug, JJ., See separate opinions.
     Feliciano, J., I join in both the majority opinion by Mendoza,
J. and the concurring opinion of Narvasa, C.J.
     Regalado, Davide, Jr., Romero, Bellosillo and Puno, JJ., See
dissenting opinions.
SEPARATE OPINION
NARVASA, C.J.:
I fully concur with the conclusions set forth in the scholarly opinion
of my learned colleague, Mr. Justice Vicente V. Mendoza. I write
this separate opinion to express my own views relative to the
procedural issues raised by the various petitions and dealt with by
some other Members of the Court in their separate opinions.
By their very nature, it would seem, discussions of constitutional
issues prove fertile ground for a not uncommon phenomenon:
debate marked by passionate partisanship amounting sometimes to
impatience with adverse views, an eagerness on the part of the
proponents on each side to assume the role of, or be perceived as,
staunch defenders of constitutional principles, manifesting itself in
flights of rhetoric, even hyperbole. The peril in this, obviously, is a
diminution of objectivity—that quality which, on the part of those
charged with the duty and authority of interpreting the
fundamental law, is of the essence of their great function. For the
Court, more perhaps than for any other person or group, it is
necessary to maintain that desirable objectivity. It must make
certain that on this as on any other occasion, the judicial function is
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meticulously performed, the facts ascertained as comprehensively
and as accurately as possible, all the issues particularly identified,
all the arguments clearly understood; else, it may itself be accused,
by its own members or by others, of a lack of adherence to, or a
careless observance of, its own procedures, the signatures of its
individual members on its enrolled verdicts notwithstanding.
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In the matter now before the Court, and whatever reservations
some people may entertain about their intellectual limitations or
moral scruples, I cannot bring myself to accept the thesis which
necessarily implies that the members of our august Congress, in
enacting the expanded VAT law, exposed their ignorance, or
indifference to the observance, of the rules of procedure set down by
the Constitution or by their respective chambers, or what is worse,
deliberately ignored those rules for some yet undiscovered purpose
nefarious in nature, or at least some purpose other than the public
weal; or that a few of their fellows, acting as a bicameral conference
committee, by devious schemes and cunning maneuvers, and in
conspiracy with officials of the Executive Department and others,
succeeded in “pulling the wool over the eyes” of all their other
colleagues and foisting on them a bill containing provisions that
neither chamber of our bicameral legislature conceived or
contemplated. This is the thesis that the petitioners would have
this Court approve. It is a thesis I consider bereft of any factual or
logical foundation.
Other than the bare declarations of some of the petitioners, or
arguments from the use and import of the language employed in the
relevant documents and records, there is no evidence before the
Court adequate to support a finding that the legislators concerned,
whether of the upper or lower chamber, acted otherwise than in
good faith, in the honest discharge of their functions, in the sincere
belief that the established procedures were being regularly observed
or, at least, that there occurred no serious or fatal deviation
therefrom. There is no evidence on which reasonably to rest a
conclusion that any executive or other official took part in or unduly
influenced the proceedings before the bicameral conference
committee, or that the members of the latter were motivated by a
desire to surreptitiously introduce improper revisions in the bills
which they were required to reconcile, or that after agreement had
been reached on the mode and manner of reconciliation of the
“disagreeing provisions,” had resorted to stratagems or employed
under-handed ploys to ensure their approval and adoption by either
House. Neither is there any proof that in voting on the Bicameral
Conference Committee (BCC) version of the reconciled bills, the
members of the Senate and the House did so in ignorance of, or
without understanding, the contents thereof or the bills therein
reconciled.
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Tolentino vs. Secretary of Finance
Also unacceptable is the theory that since the Constitution requires
appropriation and revenue bills to originate exclusively in the
House of Representatives, it is improper if not unconstitutional for
the Senate to formulate, or even think about formulating, its own
draft of this type of measure in anticipation of receipt of one
transmitted by the lower Chamber. This is specially cogent as
regards much-publicized suggestions for legislation (like the
expanded VAT Law) emanating from one or more legislators, or
from the Executive Department, or the private sector, etc. which
understandably could be expected to forthwith generate much
Congressional cogitation.
Exclusive origination, I submit, should have no reference to time
of conception. As a practical matter, origination should refer to the
affirmative act which effectively puts the bicameral legislative
procedure in motion, i.e., the transmission by one chamber to the
other of a bill for its adoption. This is the purposeful act which sets
the legislative machinery in operation to effectively lead to the
enactment of a statute. Until this transmission takes place, the
formulation and discussions, or the reading for three or more times
of proposed measures in either chamber, would be meaningless in
the context of the activity leading towards concrete legislation.
Unless transmitted to the other chamber, a bill prepared by either
house cannot possibly become law. In other words, the first
affirmative, efficacious step, the operative act as it were, leading to
actual enactment of a statute, is the transmission of a bill from one
house to the other for action by the latter. This is the origination
that is spoken of in the Constitution in its Article VI, Section 24, in
reference to appropriation, revenue, or tariff bills, etc.
It may be that in the Senate, revenue or tax measures are
discussed, even drafted, and this before a similar activity takes
place in the House. This is of no moment, so long as those measures
or bills remain in the Senate and are not sent over to the House.
There is no origination of revenue or tax measures by the Senate in
this case. However, once the House completes the drawing up of a
similar tax measure in accordance with the prescribed procedure,
even if this is done subsequent to the Senate’s own measure—
indeed, even if this be inspired by information that a measure of the
same nature or on the same subject has been formulated in the
Senate—and after third
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reading transmits its bill to the Senate, there is origination by (or
in) the House within the contemplation of the Constitution.
So it is entirely possible, as intimated, that in expectation of the
receipt of a revenue or tax bill from the House of Representatives,
the Senate commences deliberations on its own concept of such a
legislative measure. This, possibly to save time, so that when the
House bill reaches it, its thoughts and views on the matter are
already formed and even reduced to writing in the form of a draft
statute. This should not be thought illegal, as interdicted by the
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Constitution. What the Constitution prohibits is for the Senate to
begin the legislative process first, by sending its own revenue bill to
the House of Representatives for its consideration and action. This
is the initiation that is prohibited to the Senate.
But petitioners claim that this last was what in fact happened,
that the bill that went through the legislative mill and was finally
approved as R.A. No. 7716, was the Senate version, SB 1630. This is
disputed by the respondents. They claim it was House Bill 11197
that, after being transmitted to the Senate, was referred after first
reading to its Committee on Ways and Means; was reported out by
said Committee; underwent second and third readings, was sent to
the bicameral conference committee and then, after appropriate
proceedings therein culminating in extensive amendments thereof,
was finally approved by both Houses and became the Expanded
VAT Law.
On whose side does the truth lie? If it is not possible to make
that determination from the pleadings and records before this
Court, shall it require evidence to be presented? No, on both law
and principle. The Court will reject a case where the legal issues
raised, whatever they may be, depend for their resolution on still
unsettled questions of fact. Petitioners may not, by raising what are
concededly novel and weighty constitutional questions, compel the
Court to assume the role of a trier of facts. It is on the contrary
their obligation, before raising those questions to this Court, to see
to it that all issues of fact are settled in accordance with the
procedures laid down by law for proof of facts. Failing this,
petitioners would have only themselves to blame for a peremptory
dismissal.
Now, what is really proven about what happened to HB 11197
after it was transmitted to the Senate? It seems to be admitted on
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all sides that after going through first reading, HB 11197 was
referred to the Committee on Ways and Means chaired by Senator
Ernesto Herrera.
It is however surmised that after this initial step, HB 11197 was
never afterwards deliberated on in the Senate, that it was there
given nothing more than a “passing glance,” and that it never went
through a proper second and third reading. There is no competent
proof to substantiate this claim. What is certain is that on February
7, 1994, the Senate Committee on Ways and Means submitted its
Report (No. 349) stating that HB 11197 was considered, and
recommending that SB 1630 be approved “in substitution 1
of S.B.
No. 1129, taking into consideration P.S. Res. No. 734 and H.B. No.
11197.” This Report made known to the Senate, and clearly
indicates, that H.B. No. 11197 was indeed deliberated on by the
Committee; in truth, as Senator Herrera pointed out, the BCC later
“agreed to adopt (a broader coverage of the VAT) which is closely
adhering to the Senate version ** ** with some new provisions or
amendments.” The plain implication is that the Senate Committee
had indeed discussed HB 11197 in comparison with the inconsistent
parts of SB 1129 and afterwards proposed amendments to the
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former in the form of a new bill (No. 1630) more closely akin to the
Senate bill (No. 1129).
And it is as reasonable to suppose as not that later, during the
second and third readings on March 24, 1994, the Senators,
assembled as a body, had before them copies of HB 11197 and SB
1129, as well as of the Committee’s new “SB 1630” that had been
recommended for their approval, or at the very least were otherwise
perfectly aware that they were considering the particular provisions
of these bills. That there was such a deliberation in the Senate on
HB 11197 in light of inconsistent portions of SB 1630, may further
be necessarily inferred from the request, made by the Senate on the
same day, March 24, 1994, for the convocation of a bicameral
conference committee to reconcile “the disagreeing provisions of
said bill (SB 1630) and House Bill No. 11197,” a
________________
1 Resolution “Urging the Senate Committee on Ways and Means to Study the
Proposal to Exempt Local Movie Producers from the Payment of the Value-Added
Tax as an Incentive to the Production of Quality and Wholesome Filipino Movies
Whenever they Feature an All-Filipino Cast of Actors and Actresses.”
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request that could not have been made had not the Senators more
or less closely examined the provisions of HB 11197 and compared
them with those of the counterpart Senate measures.
Were the proceedings before the bicameral conference committee
fatally flawed? The affirmative is suggested because the committee
allegedly overlooked or ignored the fact that SB 1630 could not
validly originate in the Senate, and that HB 11197 and SB 1630
never properly passed both chambers. The untenability of these
contentions has already been demonstrated. Now, demonstration of
the indefensibility of other arguments purporting to establish the
impropriety of the BCC proceedings will be attempted.
There is the argument, for instance, that the conference
committee never used HB 11197 even as “frame of reference”
because it does not appear that the suggestion therefor (made by
House Panel Chairman Exequiel Javier at the bicameral conference
committee’s meeting on April 19, 1994, with the concurrence of
Senator Maceda) was ever resolved, the minutes being regrettably
vague as to what occurred after that suggestion was made. It is,
however, as reasonable to assume that it was, as it was not, given
the vagueness of the minutes already alluded to. In fact, a reading
of the BCC Report persuasively demonstrates that HB 11197 was
not only utilized as a “frame of reference” but actually discussed
and deliberated on. 2
Said BCC Report pertinently states:
“CONFERENCE COMMITTEE REPORT
The Conference Committee on the disagreeing provisions of House Bill No.
11197, entitled:
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AN ACT RESTRUCTURING THE VALUE ADDED TAX (VAT)
SYSTEM TO WIDEN ITS TAX BASE AND ENHANCE ITS
ADMINISTRATION, AMENDING FOR THESE PURPOSES SECTIONS
99, 100, 102, 103, 104, 105, 106, 107, 108 AND 110 OF TITLE IV, 112, 115
AND 116 OF TITLE V, AND 236, 237, AND 238 OF TITLE IX, AND
REPEALING SECTIONS 113SD AND 114 OF TITLE V, ALL OF THE
NATIONAL INTERNAL REVENUE CODE, AS AMENDED
________________
2 Italics supplied.
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and Senate Bill No. 1630 entitled:
AN ACT RESTRUCTURING THE VALUE ADDED TAX (VAT)
SYSTEM TO WIDEN ITS TAX BASE AND ENHANCE ITS
ADMINISTRATION, AMENDING FOR THESE PURPOSES SECTIONS
99, 100, 102, 103, 104, 105, 106, 107, 108 AND 110 OF TITLE IV, 112, 115,
117 AND 121 OF TITLE V, AND 236, 237, AND 238 OF TITLE IX, AND
REPEALING SECTIONS 113, 114, 116, 119 AND 120 OF TITLE V, ALL
OF THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED AND
FOR OTHER PURPOSES
having met, after full and free conference, has agreed to recommend and
do hereby recommend to their respective Houses that House Bill No. 11197,
in consolidation with Senate Bill No. 1630, be approved in accordance with
the attached copy of the bill as reconciled and approved by the conferees.
Approved.”
The Report, it will be noted, explicitly adverts to House Bill No.
11197, it being in fact mentioned ahead of Senate Bill No. 1630;
graphically shows the very close identity of the subjects of both bills
(indicated in their respective titles); and clearly says that the
committee met in “full and free conference” on the “disagreeing
provisions” of both bills (obviously in an effort to reconcile them);
and that reconciliation of said “disagreeing provisions” had been
effected, the BCC having agreed that “House Bill No. 11197, in
consolidation with Senate Bill No. 1630, be approved in accordance
with the attached copy of the bill as reconciled and approved by the
conferees.”
It may be concluded, in other words, that, conformably to the
procedure provided in the Constitution with which all the Members
of the bicameral conference committee cannot but be presumed to
be familiar, and no proof to the contrary having been adduced on
the point, it was the original bill (HB 11197) which said body had
considered and deliberated on in detail, reconciled or harmonized
with SB 1630, and used as basis for drawing up the amended
version eventually reported out and submitted to both houses of
Congress.
It is further contended that the BCC was created and convoked
prematurely, that SB 1630 should first have been sent to the House
of Representatives for concurrence. It is maintained, in
696
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696 SUPREME COURT REPORTS ANNOTATED
Tolentino vs. Secretary of Finance
other words, that the latter chamber should have refused the
Senate request for a bicameral conference committee to reconcile
the “disagreeing provisions” of both bills, and should have required
that SB 1630 be first transmitted to it. This, seemingly, is nit-
picking given the urgency of the proposed legislation as certified by
the President (to both houses, in fact). Time was of the essence,
according to the President’s best judgment—as regards which
absolutely no one in either chamber of Congress took exception,
general acceptance being on the contrary otherwise manifested—
and that judgment the Court will not now question. In light of that
urgency, what was so vital or indispensable about such a
transmittal that its absence would invalidate all else that had been
done towards enactment of the law, completely escapes me,
specially considering that the House had immediately acceded
without demur to the request for convocation of the conference
committee.
What has just been said should dispose of the argument that the
statement in the enrolled bill, that “This Act which is a
consolidation of House Bill No. 11197 and Senate Bill No. 1630 was
finally passed by the House of Representatives and the Senate on
April 27, 1994 and May 2, 1994,” necessarily signifies that there
were two (2) bills separately introduced, retaining their
independent existence until they reached the bicameral conference
committee where they were consolidated, and therefore, the VAT
law did not originate exclusively in the House having originated in
part in the Senate as SB 1630, which bill was not embodied in but
merely merged with HB 11197, retaining its separate identity until
it was joined by the BCC with the house measure. The more logical,
and fairer, course is to construe the expression, “consolidation of
House Bill No. 11197 and Senate Bill No. 1630” in the context of
accompanying and contemporaneous statements, i.e.: (a) the
declaration in the BCC Report, supra, that the committee met to
reconcile the disagreeing provisions of the two bills, “and after full
and free conference” on the matter, agreed and so recommended
that “House Bill No. 11197, in consolidation with Senate Bill No.
1630, be approved in accordance with the attached copy of the bill
as reconciled and approved by the conferees;” and (b) the averment
of Senator Herrera, in the Report of the Ways and Means
Committee, supra, that the committee had actually “considered”
(discussed)
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Tolentino vs. Secretary of Finance
HB No. 11197 and taken it “into consideration” in recommending
that its own version of the measure (SB 1630) be the one approved.
That the Senate might have drawn up its own version of the
expanded VAT bill, contemporaneously with or even before the
House did, is of no moment. It bears repeating in this connection
that no VAT bill ever originated in the Senate; neither its SB 1129
or SB 1630 or any of its drafts was ever officially transmitted to the
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House as an initiating bill which, as already pointed out, is what
the Constitution forbids; it was HB 11197 that was first sent to the
Senate, underwent first reading, was referred to Committee on
Ways and Means and there discussed in relation to and in
comparison with the counterpart Senate version or versions—the
mere formulation of which was, as also already discussed, not
prohibited to it—and afterwards considered by the Senate itself,
also in connection with SB 1630, on second and third readings. HB
11197 was in the truest sense, the originating bill.
An issue has also arisen respecting the so-called “enrolled bill
doctrine” which, it is said, whatever sacrosanct status it might
originally have enjoyed, is now in bad odor with modern scholars on
account of its imputed rigidity and unrealism; it being also
submitted that the ruling in “Mabanag v. Lopez Vito (78 Phil. 1)
and the cases reaffirming it, is no longer good
3
law, it being based on
a provision of the Code of Civil Procedure long since stricken from
the statute books.
I would myself consider the “enrolled bill” theory as laying down
a presumption of so strong a character as to be well nigh absolute or
conclusive, fully in accord with the familiar and fundamental
philosophy of separation of powers. The result, as far as I am
concerned, is to make discussion of the enrolled bill principle purely
academic; for as already pointed out, there is no proof worthy of the
name of any facts to justify its reexamination and, possibly,
disregard.
The other question is, what is the nature of the power given to a
bicameral conference committee of reconciling differences
_________________
3 Giving “conclusive” character to copies of Acts of the Philippine Commission
which have been signed by its presiding officers and secretaries.
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between, or “disagreeing provisions” in, a bill originating from the
House in relation to amendments proposed by the Senate—whether
as regards some or all of its provisions? Is the mode of
reconciliation, subject to fixed procedure and guidelines? What
exactly can the committee do, or not do? Can it only clarify or revise
provisions found in either Senate or House bill? Is it forbidden to
propose additional or new provisions, even on matters necessarily
or reasonably connected with or germane to items in the bills being
reconciled?
In answer, it is postulated that the reconciliation function is
quite limited. In these cases, the conference committee should have
confined itself to reconciliation of differences or inconsistencies only
by (a) restoring provisions of HB 11197 eliminated by SB 1630, or
(b) sustaining wholly or partly the Senate amendments, or (c) as a
compromise, agreeing that neither provisions nor amendments be
carried into the final form of HB 11197 for submission to both
chambers of the legislature.
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The trouble is, it is theorized, the committee incorporated
activities or transactions which were not within the contemplation
of both bills; it made additions and deletions which did not enjoy the
enlightenment of initial committee studies; it exercised what is
known as an “ex post veto power” granted to it by no law, rule or
regulation, a power that in truth is denied to it by the rules of both
the Senate and the House. In substantiation, the Senate rule is
cited, similar to that of the House, providing that “differences shall
be settled by a conference committee” whose report shall contain
“detailed and sufficiently explicit statement of the changes in or
amendments to the subject measure, ** (to be) signed by the
conferees;” as well as the “Jefferson’s Manual,” adopted by the
Senate as supplement to its own rules, directing that the managers
of the conference must confine themselves to differences submitted
to them; they may not include subjects not within the
disagreements even though germane to a question in issue.”
It is significant that the limiting proviso in the relevant rules has
been construed and applied as directory, not mandatory. During the
oral argument, counsel for petitioners admitted that the practice for
decades has been for bicameral conference committees to include
such provisions in the reconciled bill as they believed to be germane
or necessary and acceptable to both
699
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Tolentino vs. Secretary of Finance
chambers, even if not within any of the “disagreeing provisions,”
and the reconciled bills, containing such provisions had invariably
been approved and adopted by both houses of Congress. It is a
practice, they say, that should be stopped. But it is a practice that
establishes in no uncertain manner the prevailing concept in both
houses of Congress of the permissible and acceptable modes of
reconciliation that their conference committees may adopt, one
whose undesirability is not all that patent if not, indeed, incapable
of unquestionable demonstration. The fact is that conference
committees only take up bills which have already been freely and
fully discussed in both chambers of the legislature, but as to which
there is need of reconciliation in view of “disagreeing provisions”
between them; and both chambers entrust the function of
reconciling the bills to their delegates at a conference committee
with full awareness, and tacit consent, that conformably with
established practice unquestioningly observed over many years,
new provisions may be included even if not within the “disagreeing
provisions” but of which, together with other changes, they will be
given detailed and sufficiently explicit information prior to voting
on the conference committee version.
In any event, a fairly recent decision written for the Court by
Senior Associate Justice Isagani A. Cruz, promulgated on
November 11, 1993 (G.R. No. 105371, The Philippine Judges
Association, etc., et al. v. Hon. Pete Prado, etc., et al.), should leave
no doubt of the continuing vitality of the enrolled bill doctrine and
give an insight into the nature of the reconciling function of
bicameral conference committees. In that case, a bilateral
conference committee was constituted and met to reconcile Senate
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Bill No. 720 and House Bill No. 4200. It adopted a “reconciled”
measure that was submitted to and approved by both chambers of
Congress and ultimately signed into law by the President, as R.A.
No. 7354. A provision in this statute (removing the franking
privilege from the courts, among others) was assailed as being an
invalid amendment because it was not included in the original
version of either the senate or the house bill and hence had
generated no disagreement between them which had to be
reconciled. The Court held:
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“While it is true that a conference committee is the mechanism for
compromising differences between the Senate and the House, it is not
limited in its jurisdiction to this question. Its broader function is described
thus:
A conference committee may deal generally with the subject matter or it may be
limited to resolving the precise differences between the two houses. Even where the
conference committee is not by rule limited in its jurisdiction, legislative custom
severely limits the freedom with which new subject matter can be inserted into the
conference bill. But occasionally a conference committee produces unexpected
results, results beyond its mandate. These excursions occur even where the rules
impose strict limitations on conference committee jurisdiction. This is symptomatic
of the authoritarian power of conference committee (Davies, Legislative Law and
Process: In A Nutshell, 1987 Ed., p. 81).
It is a matter of record that the Conference Committee Report on
the bill in question was returned to and duly approved by both the
Senate and the House of Representatives. Thereafter, the bill was
enrolled with its certification by Senate President Neptali A.
Gonzales and Speaker Ramon V. Mitra of the House of
Representatives as having been duly passed by both Houses of
Congress. It was then presented to and approved by President
Corazon C. Aquino on April 3, 1992.
Under the doctrine of separation of powers, the Court may not
inquire beyond the certification of the approval of a bill from the
presiding officers of Congress. Casco Philippine Chemical Co. v.
Gimenez (7 SCRA 347) laid down the rule that the enrolled bill is
conclusive upon the Judiciary (except in matters that have to be
entered in the journals like the yeas and nays on the final reading of
the bill) (Mabanag v. Lopez Vito, 78 Phil. 1). The journals are
themselves also binding on the Supreme Court, as we held in the
old (but still valid) case of U.S. v. Pons (34 Phil. 729), where we
explained the reason thus:
To inquire into the veracity of the journals of the Philippine legislature
when they are, as we have said, clear and explicit, would be to violate both
the letter and spirit of the organic laws by which the Philippine
Government was brought into existence, to invade a coordinate and
independent department of the Government, and to interfere with the
legitimate powers and functions of the Legislature. Applying these
principles, we shall decline to look into the petitioners’
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Tolentino vs. Secretary of Finance
charges that an amendment was made upon the last reading of the bill that
eventually R.A. No. 7354 and that copies thereof in its final form were not
distributed among the members of each House. Both the enrolled bill and
the legislative journals certify that the measure was duly enacted i.e., in
accordance with Article VI, Sec. 26 (2) of the Constitution. We are bound by
such official assurances from a coordinate department of the government,
to which we owe, at the very least, a becoming courtesy.”
Withal, an analysis of the changes made by the conference
committee in HB 11197 and SB 1630 by way of reconciling their
“disagreeing provisions,”—assailed by petitioners as unauthorized
or incongruous—reveals that many of the changes related to actual
“disagreeing provisions,” and that those that might perhaps be
considered as entirely new are nevertheless necessarily or logically
connected with or germane to particular matters in the bills being
reconciled.
For instance, the change made by the bicameral conference
committee (BCC) concerning amendments to Section 99 of the
National Internal Revenue Code (NIRC)—the addition of “lessors of
goods or properties and importers of goods”—is really a
reconciliation of disagreeing provisions, for while HB 11197
mentions as among those subject to tax, “one who sells, barters, or
exchanges goods or properties and any person who leases personal
properties,” SB 1630 does not. The change also merely clarifies the
provision by providing that the contemplated taxpayers includes
“importers.” The revision as regards the amendment to Section 100,
NIRC, is also simple reconciliation, being nothing more than the
adoption by the BCC of the provision in HB 11197 governing the
sale of gold to Bangko Sentral, in contrast to SB 1630 containing no
such provision. Similarly, only simple reconciliation was involved as
regards approval by the BCC of a provision declaring as not exempt,
the sale of real properties primarily held for sale to customers or
held for lease in the ordinary course of trade or business, which
provision is found in HB 11197 but not in SB 1630; as regards the
adoption by the BCC of a provision on life insurance business,
contained in SB 1630 but not found in HB 11197; as regards
adoption by the BCC of the provision in SB 1630 for deferment of
tax on certain goods and services for no longer than 3 years, as to
which there was no counterpart provision in SB 11197; and as
regards the fixing of a
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period for the adoption of implementing rules, a period being
prescribed in SB 1630 and none in HB 11197.
In respect of other revisions, it would seem that questions
logically arose in the course of the discussion of specific “disagreeing
provisions” to which answers were given which, because believed
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acceptable to both houses of Congress, were placed in the BCC
draft. For example, during consideration of radio and television time
(Sec. 100, NIRC) dealt with in both House and Senate bills, the
question apparently came up, the relevance of which is apparent on
its face, relative to satellite transmission and cable television time.
Hence, a provision in the BCC bill on the matter. Again, while
deliberating on the definition of goods or properties in relation to
the provision subjecting sales thereof to tax, a question apparently
arose, logically relevant, about real properties intended to be sold
by a person in economic difficulties, or because he wishes to buy a
car, i.e., not as part of a business, the BCC evidently resolved to
clarify the matter by excluding from the tax, “real properties held
primarily for sale to customers or held for lease in the ordinary
course of business.” And in the course of consideration of the term,
sale or exchange of services (Sec. 102, NIRC), the inquiry most
probably was posed as to whether the term should be understood as
including other services: e.g., services of lessors of property whether
real or personal, of warehousemen, of keepers of resthouses,
pension houses, inns, resorts, or of common carriers, etc., and
presumably the BCC resolved to clarify the matter by including the
services just mentioned. Surely, changes of this nature are
obviously to be expected in proceedings before bicameral conference
committees and may even be considered grist for their mill, given
the history of such BCCs and their general practice here and
abroad.
In any case, all the changes and revisions, and deletions, made
by the conference committee were all subsequently considered by
and approved by both the Senate and the House, meeting and
voting separately. It is an unacceptable theorization, to repeat, that
when the BCC report and its proposed bill were submitted to the
Senate and the House, the members thereof did not bother to read,
or what is worse, having read did not understand, what was before
them, or did not realize that there were new provisions in the
reconciled version unrelated to any “disagreeing provisions,” or that
said new provisions or revisions were effectively concealed
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from them.
Moreover, it certainly was entirely within the power and
prerogative of either legislative chamber to reject the BCC bill and
require the organization of a new bicameral conference committee.
That this option was not exercised by either house only proves that
the BCC measure was found to be acceptable as in fact it was
approved and adopted by both chambers.
I vote to DISMISS the petitions for lack of merit.
SEPARATE OPINION
CRUZ, J.:
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It is a curious and almost incredible fact that at the hearing of these
cases on July 7, 1994, the lawyers who argued for the petitioners—
two of them former presidents of the Senate and the third also a
member of that body—all asked this Court to look into the internal
operations of their Chamber and correct the irregularities they
claimed had been committed there as well as in the House of
Representatives and in the bicameral conference committee.
While a member of the legislature would normally resist such
intervention and invoke the doctrine of separation of powers to
protect Congress from what he would call judicial intrusion, these
counsel practically implored the Court to examine the questioned
proceedings and to this end go beyond the journals of each House,
scrutinize the minutes of the committee, and investigate all other
matters relating to the passage of the bill (or bills) that eventually
became R.A. No. 7716.
In effect, the petitioners would have us disregard the time-
honored inhibitions laid down by the Court upon itself in the
landmark case of U.S. v. Pons (34 Phil. 725), where it refused to
consider extraneous evidence to disprove the recitals in the journals
of the Philippine Legislature that it had adjourned sine die at
midnight of February 28, 1914. Although it was generally known
then that the special session had actually exceeded the deadline
fixed by the Governor-General in his proclamation, the Court chose
to be guided solely by the legislative journals, holding significantly
as follows:
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* * * From their very nature and object, the records of the legislature are as
important as those of the judiciary, and to inquire into the veracity of the
journals of the Philippine Legis-lature, when they are, as we have said,
clear and explicit, would be to violate both the letter and the spirit of the
organic laws by which the Philippine Government was brought into
existence, to invade a coordinate and independent department of the
Govern-ment, and to interfere with the legitimate powers and functions of
the Legislature. But counsel in his argument says that the public knows
that the Assembly’s clock was stopped on February 28, 1914, at midnight
and left so until the determination of the discussion of all pending matters.
Or, in other words, the hands of the clock were stayed in order to enable the
Assembly to effect an adjournment apparently within the fixed time by the
Governor’s proclamation for the expiration of the special session, in direct
violation of the Act of Congress of July 1, 1902. If the clock was, in fact,
stopped, as here suggested, “the resultant evil might be slight as compared
with that of altering the probative force and character of legislative records,
and making the proof of legislative action depend upon uncertain oral
evidence, liable to loss by death or absence, and so imperfect on account of
the treachery of memory.”
* * * The journals say that the Legislature adjourned at 12 midnight on
February 28, 1914. This settles the question, and the court did not err in
declining to go beyond the journals.
As one who has always respected the rationale of the separation of
powers, I realize only too well the serious implications of the
relaxation of the doctrine except only for the weightiest of reasons.
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The lowering of the barriers now dividing the three major branches
of the government could lead to invidious incursions by one
department into the exclusive domains of the other departments to
the detriment of the proper discharge of the functions assigned to
each of them by the Constitution.
Still, while acknowledging the value of tradition and the reasons
for judicial non-interference announced in Pons, I am not
disinclined to take a second look at the ruling from a more
pragmatic viewpoint and to tear down, if we must, the iron curtain
it has hung, perhaps improvidently, around the proceedings of the
legislature.
I am persuaded even now that where a specific procedure is fixed
by the Constitution itself, it should not suffice for Congress to
simply say that the rules have been observed and flatly consider the
matter closed. It does not have to be as final as that.
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I would imagine that the judiciary, and particularly this Court,
should be able to verify that statement and determine for itself,
through the exercise of its own powers, if the Constitution has,
indeed, been obeyed.
In fact, the Court has already said that the question of whether
certain procedural rules have been followed is justiciable rather
than political because what is involved is the legality and not the
wisdom of the act in question. So we ruled in Sanidad v.
Commission on Elections (73 SCRA 333) on the amendment of the
Constitution; in Daza v. Singson (180 SCRA 496) on the composition
of the Commission on Appointments; and in the earlier case of
Tañada v. Cuenco (103 Phil. 1051) on the organization of the Senate
Electoral Tribunal, among several other cases.
By the same token, the ascertainment of whether a bill
underwent the obligatory three readings in both Houses of Congress
should not be considered an invasion of the territory of the
legislature as this would not involve an inquiry into its discretion in
approving the measure but only the manner in which the measure
was enacted.
These views may upset the conservatives among us who are most
comfortable when they allow themselves to be petrified by
precedents instead of venturing into uncharted waters. To be sure,
there is much to be said of the wisdom of the past expressed by
vanished judges talking to the future. Via trita est tuttisima. Except
when there is a need to revise them because of an altered situation
or an emergent idea, precedents should tell us that, indeed, the
trodden path is the safest path.
It could be that the altered situation has arrived to welcome the
emergent idea. The jurisdiction of this Court has been expanded by
the Constitution, to possibly include the review the petitioners
would have us make of the congressional proceedings being
questioned. Perhaps it is also time to declare that the activities of
Congress can no longer be smoke-screened in the inviolate recitals
of its journals to prevent examination of its sacrosanct records in
the name of the separation of powers.
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But then again, perhaps all this is not yet necessary at this time
and all these observations are but wishful musings for a more
activist judiciary. For I find that this is not even necessary, at least
for me, to leave the trodden path in the search for new
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adventures in the byways of the law. The answer we seek, as I see
it, is not far afield. It seems to me that it can be found through a
study of the enrolled bill alone and that we do not have to go beyond
that measure to ascertain if R.A. No. 7716 has been validly enacted.
It is settled in this jurisdiction that in case of conflict between
the enrolled bill and the legislative journals, it is the former that
should prevail except only as to matters that the Constitution
requires to be entered in the journals. (Mabanag v. Lopez Vito, 78
Phil. 1). These are the yeas and nays on the final reading of a bill or
on any question at the request of at least one-fifth of the members
of the House (Constitution, Art. VI, Sec. 16 [4]), the objections of the
President to a vetoed bill or item (Ibid, Sec. 27 [1]), and the names
of the members voting for or against the overriding of his veto (Id.
Section 27 [1]). The origin of a bill is not specifically required by the
Constitution to be entered in the journals. Hence, on this particular
matter, it is the recitals in the enrolled bill and not in the journals
that must control.
Article VI, Section 24, of the Constitution provides:
Sec. 24. All appropriation, revenue or tariff bills, bills authorizing increase
of the public debt, bills of local application, and private bills shall originate
exclusively in the House of Representatives, but the Senate may propose or
concur with amendments.
The enrolled bill submitted to and later approved by the President
of the Philippines as R.A. No. 7716 was signed by the President of
the Senate and the Speaker of the House of Representatives. It
carried the following certification over the signatures of the
Secretary of the Senate and the Acting Secretary of the House of
Representatives:
This Act which is a consolidation of House Bill No. 11197 and Senate Bill
No. 1630 was finally passed by the House of Representatives and the
Senate on April 27, 1994, and May 2, 1994.
Let us turn to Webster for the meaning of certain words:
To “originate” is “to bring into being; to create something
(original); to invent; begin; start.” The word “exclusively” means
“excluding all others” and is derived from the word “exclusive,”
meaning “not shared or divided; sole; single.” Applying these
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meanings, I would read Section 24 as saying that the bills
mentioned therein must be brought into being, or created, or
invented, or begun or started, only or singly or by no other body
than the House of Representatives.
According to the certification, R.A. No . 7716 “is a consolidation
of House Bill No. 11197 and Senate Bill No. 1630.” Again giving the
words used their natural and ordinary sense conformably to an
accepted canon of construction, I would read the word
“consolidation” as a “combination or merger” and derived from the
word “consolidate,” meaning “to combine into one; merge; unite.”
The two bills were separately introduced in their respective
Chambers. Both retained their independent existence until they
reached the bicameral conference committee where they were
consolidated. It was this consolidated measure that was finally
passed by Congress and submitted to the President of the
Philippines for his approval.
House Bill No. 11197 originated in the House of Representatives
but this was not the bill that eventually became R.A. No. 7716. The
measure that was signed into law by President Ramos was the
consolidation of that bill and another bill, viz., Senate Bill No. 1630,
which was introduced in the Senate. The resultant enrolled bill
thus did not originate exclusively in the House of Representatives.
The enrolled bill itself says that part of it (and it does not matter to
what extent) originated in the Senate.
It would have been different if the only participation of the
Senate was in the amendment of the measure that was originally
proposed in the House of Representatives. But this was not the
case. The participation of the Senate was not in proposing or
concurring with amendments that would have been incorporated in
House Bill No. 11197. Its participation was in originating its own
Senate Bill No. 1630, which was not embodied in but merged with
House Bill No. 11197.
Senate Bill No. 1630 was not even an amendment by
substitution, assuming this was permissible. To “substitute” means
“to take the place of; to put or use in place of another.” Senate Bill
No. 1630 did not, upon its approval, replace (and thus eliminate)
House Bill No. 11197. Both bills retained their separate identities
until they were joined or united into what became the enrolled bill
and ultimately R.A. No. 7716.
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The certification in the enrolled bill says it all. It is clear that R.A.
No. 7716 did not originate exclusively in the House of
Representatives.
To go back to my earlier observations, this conclusion does not
require the reversal of U.S. vs. Pons and an inquiry by this Court
into the proceedings of the legislature beyond the recitals of its
journals. All we need to do is consider the certification in the
enrolled bill and, without entering the precincts of Congress,
declare that by its own admission it has, indeed, not complied with
the Constitution.
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While this Court respects the prerogatives of the other
departments, it will not hesitate to rise to its higher duty to require
from them, if they go astray, full and strict compliance with the
fundamental law. Our fidelity to it must be total. There is no loftier
principle in our democracy than the supremacy of the Constitution,
to which all must submit.
I vote to invalidate R.A. No. 7716 for violation of Article VI, Sec.
24, of the Constitution.
SEPARATE OPINION
PADILLA, J.:
I
The original VAT law and the expanded VAT law
1
In Kapatiran v. Tan, where the ponente was the writer of this
Separate Opinion, a unanimous Supreme Court en banc upheld the
validity of the original VAT law (Executive Order No. 273, approved
on 25 July 1987). It will, in my view, be pointless at this time to re-
open arguments advanced in said case as to why said VAT law was
invalid, and it will be equally redundant to re-state the principles
laid down by the Court in the same case affirming the validity of
the VAT law as a tax measure. And yet, the same arguments are, in
effect, marshalled against the merits and substance of the expanded
VAT law (Rep. Act No. 7716, approved on 5 May 1994). The same
Supreme Court decision should
_________________
1 G.R. No. 81311, 30 June 1988, 163 SCRA 371.
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Tolentino vs. Secretary of Finance
therefore dispose, in the main, of such arguments, for the expanded
VAT law is predicated basically on the same principles as the
original VAT law, except that now the tax base of the VAT
imposition has been expanded or broadened.
It only needs to be stated—what actually should be obvious—
that a tax measure, like the expanded VAT law (Republic Act No.
7716), is enacted by Congress and approved by the President in the
exercise of the State’s power to tax, which is an attribute of
sovereignty. And while the power to tax, if exercised without limit,
is a power to destroy, and should, therefore, not be allowed in such
form, it has to be equally recognized that the power to tax is an
essential right of government. Without taxes, basic services to the
people can come to a halt; economic progress will be stunted, and, in
the long run, the people will suffer the pains of stagnation and
retrogression.
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Consequently, upon careful deliberation, I have no difficulty in
reaching the conclusion that the expanded VAT law comes within
the legitimate power of the state to tax. And as I had occasion to
previously state:
“Constitutional Law, to begin with, is concerned with power not political
convenience, wisdom, exigency, or even necessity. Neither the Executive
nor the Legislative (Commission on Appointments) can create power where
2 ________________
the Constitution confers none.”
Likewise, in the first VAT case, I said:
“In any event, if petitioners seriously believe that the adoption and
continued application of the VAT are prejudicial to the general welfare or
the interests of the majority of the people, they should seek recourse and
relief from the political branches of the government. The Court, following
the time-honored doctrine of separation of powers, cannot substitute its
judgment for that of the President (and Congress) as to the wisdom, justice
and advisability of the adoption of the VAT.”
3 is undeniably a Senate measure which, in point of time, actually
________________
2 Bautista v. Salonga, G.R. No. 86439, 13 April 1989, 172 SCRA 160.
3 Kapatiran, supra at 385.
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This Court should not, as a rule, concern itself with questions of
policy, much less, economic policy. That is better left to the two (2)
political branches of government. That the expanded VAT law is
unwise, unpopular and even anti-poor, among other things said
against it, are arguments and considerations within the realm of
policy-debate, which only Congress and the Executive have the
authority to decisively confront, alleviate, remedy and resolve.
II
The procedure followed in the approval of Rep. Act No. 7716
Petitioners however posit that the present case raises a far-
reaching constitutional question which the Court is duty-bound to4
decide under its expanded jurisdiction in the 1987 Constitution.
Petitioners more specifically question and impugn the manner by
which the expanded VAT law (Rep. Act No. 7716) was approved by
Congress. They contend that it was approved in violation of the
Constitution from which fact it follows, as a consequence, that the
law is null and void. Main reliance of the petitioners in their assault
is Section 24, Art. VI of the Constitution which provides:
“Sec. 24. All appropriation, revenue or tariff bills, bills authorizing increase
of the public debt, bill of local application, and private bills shall originate
exclusively in the House of Representatives, but the Senate may propose or
concur with amendments.”
While it should be admitted at the outset that there was no rigorous
and strict adherence to the literal command of the above provision,
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it may however be said, after careful reflection, that there was
substantial compliance with the provision.
There is no question that House Bill No. 11197 expanding the
VAT law originated from the House of Representatives. It is
undeniably a House measure. On the other hand, Senate Bill No.
1129, also expanding the VAT law, originated from the Senate. It
4 Sec. 1, Art. VIII.
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VOL. 235, AUGUST 25, 1994 711
Tolentino vs. Secretary of Finance
antedated House Bill No. 11197.
But it is of record that when House Bill No. 11197 was, after
approval by the House, sent to the Senate, it was referred to, and
considered by the Senate Committee on Ways and Means (after first
reading) together with Senate Bill No. 1129, and the Committee
came out with Senate Bill No. 1630 in substitution of Senate Bill
No. 1129 but after expressly taking into consideration House Bill
No. 11197.
Since the Senate is, under the above-quoted constitutional
provision, empowered to concur with a revenue measure exclusively
originating from the House, or to propose amendments thereto, to
the extent of proposing amendments by SUBSTITUTION to the
House measure, the approval by the Senate of Senate Bill No. 1630,
after it had considered House Bill No. 11197, may be taken, in my
view, as an AMENDMENT BY SUBSTITUTION by the Senate not
only of Senate Bill No. 1129 but of House Bill No. 11197 as well
which, it must be remembered, originated exclusively from the
House.
But then, in recognition of the fact that House Bill No. 11197
which originated exclusively from the House and Senate Bill No.
1630 contained conflicting provisions, both bills (House Bill No.
11197 and Senate Bill No. 1630) were referred to the Bicameral
Conference Committee for joint consideration with a view to
reconciling their conflicting provisions.
The Conference Committee came out eventually with a
Conference Committee Bill which was submitted to both chambers
of Congress (the Senate and the House). The Conference Committee
reported out a bill consolidating provisions in House Bill No. 11197
and Senate Bill No. 1630. What transpired in both chambers after
the Conference Committee Report was submitted to them is not
clear from the records in this case. What is clear however is that
both chambers voted separately on the bill reported out by the
Conference Committee and both chambers approved the bill of the
Conference Committee.
To me then, what should really be important is that both
chambers of Congress approved the bill reported out by the
Conference Committee. In my considered view, the act of both
chambers of Congress in approving the Conference Committee bill,
should put an end to any inquiry by this Court as to how the
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bill came about. What is more, such separate approvals CURED
whatever constitutional infirmities may have arisen in the
procedures leading to such approvals. For, if such infirmities were
serious enough to impugn the very validity of the measure itself,
there would have been an objection or objections from members of
both chambers to the approval. The Court has been shown no such
objection on record in both chambers.
Petitioners contend that there were violations of Sec. 26
paragraph 2, Article VI of the Constitution which provides:
“SEC. 26. x x x
(2) No bill passed by either House shall become a law unless it has
passed three readings on separate days, and printed copies thereof in its
final form have been distributed to its Members three days before its
passage, except when the President certifies to the necessity of its
immediate enactment to meet a public calamity or emergency. Upon the
last reading of a bill, no amendment thereto shall be allowed, and the vote
thereon shall be taken immediately thereafter, and the yeas and nays
entered in the Journal.”
in that, when Senate Bill No. 1630 (the Senate counterpart of
House Bill No. 11197) was approved by the Senate, after it had been
reported out by the Senate Committee on Ways and Means, the bill
went through second and third readings on the same day (not
separate days) and printed copies thereof in its final form were not
distributed to the members of the Senate at least three (3) days
before its passage by the Senate. But we are told by the respondents
that the reason for this “short cut” was that the President had
certified to the necessity of the bill’s immediate enactment to meet
an emergency—a certification that, by leave of the same
constitutional provision, dispensed with the second and third
readings on separate days and the printed form at least three (3)
days before its passage.
We have here then a situation where the President did certify to
the necessity of Senate Bill No. 1630’s immediate enactment to
meet an emergency and the Senate responded accordingly. While I
would be the last to say that this Court cannot review the exercise
of such power by the President in appropriate cases ripe for judicial
review, I am not prepared however to say that the President
gravely abused his discretion in the exercise of such power as to
require that this Court overturn his action. We have
713
VOL. 235, AUGUST 25, 1994 713
Tolentino vs. Secretary of Finance
been shown no fact or circumstance which would impugn the
judgment of the President, concurred in by the Senate, that there
was an emergency that required the immediate enactment of
Senate Bill No. 1630. On the other hand, a becoming respect for a
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co-equal and coordinate department of government points that
weight and credibility be given to such Presidential judgment.
The authority or power of the Conference Committee to make
insertions in and deletions from the bills referred to it, namely,
House Bill No. 11197 and Senate Bill No. 1630 is likewise assailed
by petitioners. Again, what appears important here is that both
chambers approved and ratified the bill as reported out by the
Conference Committee (with the reported insertions and deletions).
This is perhaps attributable to the known legislative practice of
allowing a Conference Committee to make insertions in and
deletions from bills referred to it for consideration, as long as they
are germane to the subject matter of the bills under consideration.
Besides, when the Conference Committee made the insertions and
deletions complained of by petitioners, was it not actually
performing the task assigned to it of reconciling conflicting
provisions in House Bill No. 11197 and Senate Bill No. 1630?
This Court impliedly if not expressly recognized the fact of such
legislative practice in Philippine Judges Association, etc. vs. Hon.
5
Peter Prado, etc.. In said case, we stated thus:
“The petitioners also invoke Sec. 74 of the Rules of the House of
Representatives, requiring that amendment to any bill when the House and
the Senate shall have differences thereon may be settled by a conference
committee of both chambers. They stress that Sec. 35 was never a subject of
any disagreement between both Houses and so the second paragraph could
not have been validly added as an amendment.
These arguments are unacceptable.
While it is true that a conference committee is the mechanism for
compromising differences between the Senate and the House, it is not
limited in its jurisdiction to this question. Its broader function is described
thus:
‘A conference committee may deal generally with the subject matter or it may be
limited to resolving the precise differences
_______________
5 G.R. No. 103371, 11 November 1993.
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714 SUPREME COURT REPORTS ANNOTATED
Tolentino vs. Secretary of Finance
between the two houses. Even where the conference committee is not by rule
limited in its jurisdiction, legislative custom severely limits the freedom with which
new subject matter can be inserted into the conference bill. But occasionally a
conference committee produces unexpected results, results beyond its mandate.
These excursions occur even where the rules impose strict limitations on conference
committee jurisdiction. This is symptomatic of the authoritarian power of
conference committee (Davies, Legislative Law and Process: In A Nutshell, 1986 Ed.,
p. 81).’
It is a matter of record that the Conference Committee Report on the bill
in question was returned to and duly approved by both the Senate and the
House of Representatives. Thereafter, the bill was enrolled with its
certification by Senate President Neptali A. Gonzales and Speaker Ramon
V. Mitra of the House of Representatives as having been duly passed by
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both Houses of Congress. It was then presented to and approved by
President Corazon C. Aquino on April 3, 1992.”
It would seem that if corrective measures are in order to clip the
powers of the Conference Committee, the remedy should come from
either or both chambers of Congress, not from this Court, under the
time-honored doctrine of separation of powers.
Finally, as certified by the Secretary of the Senate and the
Secretary General of the House of Representatives—
“This Act (Rep. Act No. 7716) is a consolidation of House Bill No. 11197 and
Senate Bill No. 1630 (w)as finally passed by the House of Representatives
and the Senate on April 27, 1994 and May 2, 1994 respectively.”
Under the long-accepted doctrine of the “enrolled bill,” the Court in
deference to a co-equal and coordinate branch of government is held
to a recognition of Rep. Act No. 7716 as a law validly enacted by
Congress and, thereafter, approved by the President on 5 May 1994.
Again, we quote from our recent decision in Philippine Judges
Association, supra:
“Under the doctrine of separation of powers, the Court may not inquire
beyond the certification of the approval of a bill from the presiding officers
of Congress. Casco Philippine Chemical Co. v. Gimenez6
_______________
6 7 SCRA 347.
715
VOL. 235, AUGUST 25, 1994 715
Tolentino vs. Secretary of Finance
laid down the rule that the enrolled bill is conclusive upon the Judiciary
(except in matters that have to be entered in the journals like the yeas and
7
nays on the final reading of the bill). The journals are themselves also
binding on the Supreme Court, as we held in the old (but still valid) case of
8
U.S. vs. Pons, where we explained the reason thus:
‘To inquire into the veracity of the journals of the Philippine legislature when they
are, as we have said, clear and explicit, would be to violate both the letter and spirit
of the organic laws by which the Philippine Government was brought into existence,
to invade a coordinate and independent department of the Government, and to
interfere with the legitimate powers and functions of the Legislature.’
Applying these principles, we shall decline to look into the petitioners’
charges that an amendment was made upon the last reading of the bill that
eventually became R.A. No. 7354 and that copies thereof in its final form
were not distributed among the members of each House. Both the enrolled
bill and the legislative journals certify that the measure was duly enacted
i.e., in accordance with Article VI, Sec. 26(2) of the Constitution. We are
bound by such official assurances from a coordinate department of the
government, to which we owe, at the very least, a becoming courtesy.”
III
Press Freedom and Religious Freedom and Rep. Act No. 7716
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The validity of the passage of Rep. Act No. 7716 notwithstanding,
certain provisions of the law have to be examined separately and
carefully.
Rep. Act No. 7716 in imposing a value-added tax on circulation
income of newspapers and similar publications and on9 income
derived from publishing advertisements in newspapers, to my
mind, violates Sec. 4, Art. III of the Constitution. Indeed, even the
Executive Department has tried to cure this defect by the issuance
of BIR Regulation No. 11-94 precluding implementation of the tax
in this area. It should be clear, however, that the BIR
_______________
7 Mabanag v. Lopez Vito, 78 Phil. 1.
8 34 Phil. 729.
9 Executive Order No. 273, in Sec. 103 (f), had exempted this kind of income from
the VAT. Rep. Act. No. 7716 removed the exemption.
716
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Tolentino vs. Secretary of Finance
regulation cannot amend the law (Rep. Act No. 7716). Only
legislation (as distinguished from administration regulation) can
amend an existing law.
Freedom of the press was virtually unknown in the Philippines
before 1900. In fact, a prime cause of the revolution against Spain
at the turn of the 19th century was the repression of the freedom of
speech and expression and of the press. No less than our national
hero, Dr. Jose P. Rizal, in “Filipinas Despues de Cien Anos” (The
Philippines a Century Hence) describing the reforms sine quibus
non which the Filipinos were insisting upon, stated: “The minister x
x x who wants his reforms to be reforms, 10
must begin by declaring
the press in the Philippines free x x x.”
Press freedom in the Philippines has met repressions, most
notable of which was the closure of almost all forms of existing mass
media upon the imposition of martial law on 21 September 1972.
Section 4, Art. III of the Constitution maybe traced to the United
States Federal Constitution. The guarantee of freedom of
expression was planted in the Philippines by President McKinley in
the Magna Carta of Philippine Liberty, Instructions to the Second
Philippine Commission on 7 April 1900.
The present constitutional provision which reads:
“Sec. 4. No law shall be passed abridging the freedom of speech, of
expression, or of the press, or the right of the people peaceably to assemble
and petition the government for redress of grievances.”
is essentially the same as that guaranteed in the U.S. Federal
Constitution, for which reason, American case law giving judicial
expression as to its meaning is highly persuasive in the Philippines.
The plain words of the provision reveal the clear intention that
no prior restraint can be imposed on the exercise of free speech and
expression if they are to remain effective and meaningful.
The U.S. Supreme Court 11
in the leading case of Grosjean v.
American Press Co., Inc. declared a statute imposing a gross
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________________
10 United States v. Bustos, 37 Phil. 731.
11 297 U.S. 233.
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Tolentino vs. Secretary of Finance
receipts license tax of 2% on circulation and advertising income of
newspaper publishers as constituting a prior restraint which is
contrary to the guarantee of freedom of the press.
12
In Bantam Books, Inc. v. Sullivan, the U.S. Supreme Court
stated: “Any system of prior restraint of expression comes to this
Court bearing a heavy presumption against its constitutionality.” In
this jurisdiction, prior restraint on the exercise of free expression
can be justified only on the ground that there is a clear and present
danger 13 of a substantive evil which the State has the right to
prevent.
In the present case, the tax imposed on circulation and
advertising income of newspaper publishers is in the nature of a
prior restraint on circulation and free expression and, absent a clear
showing that the requisite for prior restraint is present, the
constitutional flaw in the law is at once apparent and should not be
allowed to proliferate.
Similarly, the imposition of the VAT on the sale and distribution
of religious articles must be struck down for being contrary to Sec.
5, Art. III of the Constitution which provides:
“Sec. 5. No law shall be made respecting an establishment of religion, or
prohibiting the free exercise thereof. The free exercise and enjoyment of
religious profession and worship, without discrimination or preference,
shall forever be allowed. No religious test shall be required for the exercise
of civil or political rights.”
That such a tax on the sale and distribution of religious articles is
unconstitutional, has been long settled in American Bible Society,
supra.
Insofar, therefore, as Rep. Act No. 7716 imposes a value-added
tax on the exercise of the above-discussed two (2) basic
constitutional rights, Rep. Act No. 7716 should be declared
unconstitutional and of no legal force and effect.
IV
Petitions of CREBA and PAL and Rep. Act No. 7716
_______________
12 372 U.S. 58.
13 American Bible Society v. City of Manila, 101 Phil. 386.
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The Chamber of Real Estate and Builder’s Association, Inc.
(CREBA) filed its own petition (GR No. 11574) arguing that the
provisions of Rep. Act No. 7716 imposing a 10% value-added tax on
the gross selling price or gross value in money of every sale, barter
or exchange of goods or properties (Section 2) and a 10% value-
added tax on gross receipts derived from the sale or exchange of
services, including the use or lease of properties (Section 3), violate
the equal protection, due process and non-impairment provisions of
the Constitution as well as the rule that taxation should be
uniform, equitable and progressive.
The issue of whether or not the value-added tax is uniform,
equitable and progressive has been settled in Kapatiran.
CREBA which specifically assails the 10% value-added tax on
the gross selling price of real properties, fails to distinguish between
a sale of real properties primarily held for sale to customers or held
for lease in the ordinary course of trade or business and isolated
sales by individual real property owners (Sec. 103[s]). That those
engaged in the business of real estate development realize great
profits is of common knowledge and need not be discussed at length
here. The qualification in the law that the 10% VAT covers only
sales of real property primarily held for sale to customers, i.e. for
trade or business thus takes into consideration a taxpayer’s
capacity to pay. There is no showing that the consequent distinction
in real estate sales is arbitrary and in violation of the equal
protection clause of the Constitution. The inherent power to tax of
the State, which is vested in the legislature, includes the power to
determine whom or what to tax, as well as how much to tax. In the
absence of a clear showing that the tax violates the due process and
equal protection clauses of the Constitution, this Court, in keeping
with the doctrine of separation of powers, has to defer to the
discretion and judgment of Congress on this point.
Philippine Airlines (PAL) in a separate petition (G.R. No.
115852) claims that its franchise under PD No. 1590 which makes it
liable for a franchise tax of only 2% of gross revenues “in lieu of all
the other fees and charges of any kind, nature or description,
imposed, levied, established, assessed or collected by any municipal,
city, provincial, or national authority or government agency, now or
in the future,” cannot be amended by Rep. Act No. 7716 as to make
it (PAL) liable for a 10% value-added tax
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VOL. 235, AUGUST 25, 1994 719
Tolentino vs. Secretary of Finance
on revenues, because Sec. 24 of PD No. 1590 provides that PAL’s
franchise can only be amended, modified or repealed by a special
law specifically for that purpose.
The validity of PAL’s above argument can be tested by
ascertaining the true intention of Congress in enacting Rep. Act No.
7716. Sec. 4 thereof dealing with Exempt Transactions states:
“Section 103. Exempt Transactions.—The following shall be exempt from
the value-added tax:
xxx
(q) Transactions which are exempt under special laws, except those
granted under Presidential Decrees No. 66 , 529, 972, 1491, 1590, x x x”
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(emphasis supplied)
The repealing clause of Rep. Act No. 7716 further reads:
“Sec. 20. Repealing clauses.—The provisions of any special law relative to
the rate of franchise taxes are hereby expressly repealed.
xxx
All other laws, orders, issuances, rules and regulations or parts thereof
inconsistent with this Act are hereby repealed, amended or modified
accordingly” (emphasis supplied)
There can be no dispute, in my mind, that the clear intent of
Congress was to modify PAL’s franchise with respect to the taxes it
has to pay. To this extent, Rep. Act No. 7716 can be considered as a
special law amending PAL’s franchise and its tax liability
thereunder. That Rep. Act No. 7716 imposes the value-added taxes
on other subjects does not make it a general law which cannot
amend PD No. 1590.
To sum up: it is my considered view that Rep. Act No. 7716 (the
expanded value-added tax) is a valid law, viewed from both
substantive and procedural standards, except only insofar as it
violates Secs. 4 and 5, Art. III of the Constitution (the guarantees of
freedom of expression and the free exercise of religion). To that
extent, it is, in its present form, unconstitutional.
I, therefore, vote to DISMISS the petitions, subject to the above
qualification.
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SEPARATE OPINION
VITUG, J.:
Lest we be lost by a quagmire of trifles, the real threshold and
prejudicial issue, to my mind, is whether or not this Court is ready
to assume and to take upon itself with an overriding authority the
awesome responsibility of overseeing the entire bureaucracy. Far
from it, ours is merely to construe and to apply the law regardless of
its wisdom and salutariness, and to strike it down only when it
clearly disregards constitutional proscriptions. It is what the
fundamental law mandates, and it is what the Court must do.
I cannot yet concede to the novel theory, so challengingly
provocative as it might be, that under the 1987 Constitution the
Court may now at good liberty intrude, in the guise of the people’s
imprimatur, into every affair of government. What significance can
still then remain, I ask, of the time honored and widely acclaimed
principle of separation of powers, if at every turn the Court allows
itself to pass upon, at will, the disposition of a co-equal,
independent and coordinate branch in our system of government. I
dread to think of the so varied uncertainties that such an undue
interference can lead to. The respect for long standing doctrines in
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our jurisprudence, nourished through time, is one of maturity not
timidity, of stability rather than quiescence.
It has never occurred to me, and neither do I believe it has been
intended, that judicial tyranny is envisioned, let alone
institutionalized, by our people in the 1987 Constitution. The test of
tyranny is not solely on how it is wielded but on how, in the first
place, it can be capable of being exercised. It is time that any such
perception of judicial omnipotence is corrected.
Against all that has been said, I see, in actuality in these cases at
bench, neither a constitutional infringement of substance, judging
from precedents already laid down by this Court in previous cases,
nor a justiciability even now of the issues raised, more than an
attempt to sadly highlight the perceived short comings in the
procedural enactment of laws, a matter which is internal to
Congress and an area that is best left to its own basic concern. The
fact of the matter is that the legislative enactment,
721
VOL. 235, AUGUST 25, 1994 721
Tolentino vs. Secretary of Finance
in its final form, has received the ultimate approval of both houses
of Congress. The finest rhetoric, indeed fashionable in the early part
of this closing century, would still be a poor substitute for
tangibility. I join, nonetheless, some of my colleagues in respectfully
inviting the kind attention of the honorable members of our
Congress in the suggested circumspect observance of their own
rules.
A final remark. I should like to make it clear that this opinion
does not necessarily foreclose the right, peculiar to any taxpayer
adversely affected, to pursue at the proper time, in appropriate
proceedings, and in proper fora, the specific remedies prescribed
therefor by the National Internal Revenue Code, Republic Act 1125,
and other laws, as well as rules of procedure, such as may be
pertinent. Some petitions filed with this Court are, in essence,
although styled differently, in the nature of declaratory relief over
which this Court is bereft of original jurisdiction.
All considered, I, therefore, join my colleagues who are voting for
the dismissal of the petitions.
DISSENTING OPINION
REGALADO, J.:
It would seem like an inconceivable irony that Republic Act No.
7716 which, so respondents claim, was conceived by the collective
wisdom of a bicameral Congress and crafted with sedulous care by
two branches of government should now be embroiled in challenges
to its validity for having been enacted in disregard of mandatory
prescriptions of the Constitution itself. Indeed, such impugnment
by petitioners goes beyond merely the procedural flaws in the
parturition of the law. Creating and regulating as it does definite
rights to property, but with its own passage having been violative of
explicit provisions of the organic law, even without going into the
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intrinsic merits of the provisions of Republic Act No. 7716 its
substantive invalidity is pro facto necessarily entailed.
How it was legislated into its present statutory existence is not
in serious dispute and need not detain us except for a recital of
some salient and relevant facts. The House of Representatives
722 SUPREME COURT REPORTS ANNOTATED
Tolentino vs. Secretary of Finance
1 since it merely proposed amendments through a bill allegedly
passed House Bill No. 11197 on third reading on November 17,
1993 and, the following day, it transmitted the same to the Senate
for concurrence. On its part, the Senate approved Senate Bill No.
1630 on second and third readings on March 24, 1994. It is
important to note in this regard that on March 22, 1994, said S.B.
No. 1630 had been certified by President Fidel V. Ramos for
immediate enactment to meet a public emergency, that is, a
growing budgetary deficit. There was no such certification for H.B.
No. 11197 although it was the initiating revenue bill.
It is, therefore, not only a curious fact but, more importantly, an
invalid procedure since that Presidential certification was
erroneously made for and confined to S.B. No. 1630 which was
indisputably a tax bill and, under the Constitution, could not
validly originate in the Senate. Whatever is claimed in favor of S.B.
No. 1630 under the blessings of that certification, such as its alleged
exemption from the three separate readings requirement, is
accordingly negated and rendered inutile by the inefficacious nature
of said certification as it could lawfully have been issued only for a
revenue measure originating exclusively from the lower House. To
hold otherwise would be to validate a Presidential certification of a
bill initiated in the Senate despite the Constitutional prohibition
against its originating therefrom.
Equally of serious significance is the fact that S.B. No. 1630 was
reported out in Committee Report No. 349 submitted to the Senate
on February 7, 1994 and approved by that body “in substitution of
S.B. No. 1129,” while merely
2
“taking into consideration P.S. No. 734
and H.B. No. 11197.” S.B. No. 1630, therefore, was never filed in
substitution of either P.S. No. 734 or, more emphatically, of H.B.
No. 11197 as these two legislative issuances were merely taken
account of, at the most, as referential bases or materials.
This is not a play on misdirection for, in the first instance, the
respondents assure us that H.B. No. 11197 was actually the sole
_______________
1 In substitution of H.B. Nos. 253, 771, 2450, 7033, 8086, 9030, 9210, 9297, 10012
and 10100 which were filed over the period from July 22, 1992 to August 3, 1993.
2 P.S. Res. No. 734 had earlier been filed in the Senate on September 10, 1992,
while S.B. No. 1129 was filed on March 1, 1993.
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source of and started the whole legislative process which
culminated in Republic Act No. 7716. The participation of the
Senate in enacting S.B. No. 1630 was, it is claimed, justified as it
was merely in pursuance of its power to concur in or propose
amendments to H.B.3No. 11197. Citing the 83-year old case of Flint
vs. Stone Tracy Co., it is blithely announced that such power to
722
amend includes an amendment by substitution, that is, even to the
extent of substituting the entire H.B. No. 11197 by an altogether
completely new measure of Senate provenance. Ergo, so the
justification goes, the Senate acted perfectly in accordance with its
amending power under Section 24, Article VI of the Constitution
prepared in advance.
This is a mode of argumentation which, by reason of factual
inaccuracy and logical implausibility, both astounds and confounds.
For, it is of official record that S.B. No. 1630 was filed, certified and
enacted in substitution of S.B. No. 1129 which in itself was likewise
in derogation of the Constitutional prohibition against such
initiation of a tax bill in the Senate. In any event, S.B. No. 1630 was
neither intended as a bill to be adopted by the Senate nor to be
referred to the bicameral conference committee as a substitute for
H.B. No. 11197. These indelible facts appearing in official
documents cannot be erased by any amount of strained convolutions
or incredible pretensions that S.B. No. 1630 was supposedly enacted
in anticipation of H.B. No. 11197.
On that score alone, the invocation by the Solicitor General of the
hoary concept of amendment by substitution falls flat on its face.
Worse, his concomitant citation of Flint to recover from that prone
position only succeeded in turning the same postulation over, this
time supinely flat on its back. As elsewhere noted by some
colleagues, which I will just refer to briefly to avoid duplication,
respondents initially sought sanctuary in that doctrine supposedly
laid down in Flint, thus: “It has, in fact, been held that the
substitution of an entirely new measure for the one originally
4
proposed can be supported as a valid amendment.” (Emphasis
supplied.) During the interpellation by the writer at
_______________
3 220 U.S. 107, 55 L.Ed. 389 (1911).
4 Consolidated Comment, 36-37.
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the oral argument held in these cases, the attention of the Solicitor
General was called to the fact that the amendment in Flint
consisted only of a single item, that is, the substitution of a
corporate tax for an inheritance tax proposed in a general revenue
723
bill; and that the text of the decision therein nowhere contained the
supposed doctrines he quoted and ascribed to the court, as those
723 were merely summations of arguments of counsel therein. It is
indeed a source of disappointment for us, but an admission of
desperation on his part, that, instead of making a clarification or a
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defense of his5 contention, the Solicitor General merely reproduced
all over again the same quotations as they appeared in his original
consolidated comment, without venturing any explanation or
justification.
The aforestated dissemblance, thus unmasked, has further
undesirable implications on the contentions advanced by
respondents in their defense. For, even indulging respondents ex
gratia argumenti in their pretension that S.B. No. 1630 substituted
or replaced H.B. No. 11197, aside from muddling the issue of the
true origination of the disputed law, this would further enmesh
respondents in a hopeless contradiction.
In a publication authorized by the Senate and from which the
Solicitor General has liberally quoted, it is reported as an accepted
rule therein that “(a)n amendment by substitution when approved6
takes the place of the principal bill. C.R. March 19, 1963, p. 943.”
Stated elsewise, the principal bill is supplanted and goes out of
actuality. Applied to the present situation, and following
respondents’ submission that H.B. No. 11197 had been substituted
or replaced in its entirety, then in law it had no further existence
for purposes of the subsequent stages of legislation except, possibly,
for referential data.
Now, the enrolled bill thereafter submitted to the President of
the Philippines, signed by the President of the Senate and the
Speaker of the House of Representatives, carried this solemn
certification over the signatures of the respective secretaries of
________________
5 Consolidated Memorandum for Respondents, 56-57.
6 Orquiola, H. M., Annotated Rules of the Senate and Procedure, Precedents and
Practices of the Senate of the Republic of the Philippines since 1946, 1991 Ed., 108.
725
VOL. 235, AUGUST 25, 1994 725
Tolentino vs. Secretary of Finance
both chambers: “This Act which is a consolidation of House Bill No.
11197 and Senate Bill No. 1630 was finally passed by the House of
Representatives and the Senate on April 27, 1994, and May 2,
1994.” (Italics mine.) In reliance thereon, the Chief Executive
signed the same into law as Republic Act No. 7716.
The confusion to which the writer has already confessed is now
compounded by that official text of the aforequoted certification
which speaks, and this cannot be a mere lapsus calami, of two
independent and existing bills (one of them being H.B. No. 11197)
which were consolidated to produce the enrolled bill. In
parliamentary
7
usage, to consolidate two bills, is to unite them into
one and which, in the case at bar, necessarily assumes that H.B.
No. 11197 never became legally inexistent. But did not the Solicitor
General, under the theory of amendment by substi-tution of the
entire H.B. No. 11197 by S.B. No. 1630, thereby premise the same
upon the replacement, hence the total elimination from the
legislative process, of H.B. 11197?
It results, therefore, that to prove compliance with the
requirement for the exclusive origination of H.B. No. 11197, two
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alternative but inconsistent theories had to be espoused and
defended by respondents’ counsel. To justify the introduction and
passage of S.B. No. 1630 in the Senate, it was supposedly enacted
only as an amendment by substitution, hence on that theory H.B.
No. 11197 had to be considered as displaced and terminated from
its role or existence. Yet, likewise for the same purpose but this
time on the theory of origination by consolidation, H.B. No. 11197
had to be resuscitated so it could be united or merged with S.B. No.
1630. This latter alternative theory, unfortunately, also exacerbates
the constitutional defect for then it is an admission of a dual
origination of the two tax bills, each respectively initiated in and
coming from the lower and upper chambers of Congress.
Parenthetically, it was also this writer who pointedly brought
this baffling situation to the attention of the Solicitor General
during the aforesaid oral argument, to the extent of reading aloud
the certification in full. We had hoped thereby to be clarified on
these vital issue in respondents’ projected memo-
_______________
7 Black’s Law Dictionary, 4th Ed. (1951), 381, citing Fairview vs. Durham, 45
Iowa 56.
726
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randum, but we have not been favored with an explanation
unraveling this dilemma. Verily, by passing sub silentio on these
intriguing submissions, respondents have wreaked havoc on both
logic and law just to gloss over their non-compliance with the
Constitutional mandate for exclusive origination of a revenue bill.
The procedure required therefor, we emphatically add, can be
satisfied only by complete and strict compliance since this is laid
down by the Constitution itself and not by a mere statute.
This writer consequently agrees with the clearly tenable
proposition of petitioners that when the Senate passed and
approved S.B. No. 1630, had it certified by the Chief Executive, and
thereafter caused its consideration by the bicameral conference
committee in total substitution of H.B. No. 11197, it clearly and
deliberately violated the requirements of the Constitution not only
in the origination of the bill but in the very enactment of Republic
Act No. 7716. Contrarily, the shifting sands of inconsistency in the
arguments adduced for respondents betray such lack of intellectual
rectitude as to give the impression of being mere rhetorics in
defense of the indefensible.
We are told, however, that by our discoursing on the foregoing
issues we are intruding into non-justiciable areas long declared
verboten by such time-honored doctrines as those on political
questions, the enrolled bill theory and the respect due to two co-
equal and coordinate branches of Government, all derived from the
separation of powers inherent in republicanism. We appreciate the
lectures,
8
but we are not exactly9 unaware of the teachings in U.S. vs.
Pons, Mabanag vs. Lopez 10
Vito, Casco Philippine Chemical
11
Co., Inc.
vs. Gimenez, etc., et al., Morales vs. Subido, etc., and Philippine
12
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12
Judges Association, etc., et al. vs. Prado, etc.,
13
et al., on the one
hand, and Tañada, et al. vs. Cuenco,
14
et al., Sanidad, et al. vs.
Commission on Elections, et al., and
________________
8 34 Phil. 729 (1916).
9 78 Phil. 1 (1947).
10 L-17931, February 28, 1963, 7 SCRA 347.
11 L-29658, February 27, 1969, 27 SCRA 131.
12 G.R. No. 105371, November 11, 1993, 227 SCRA 703.
13 103 Phil. 1051 (1957).
14 L-46640, October 12, 1976, 73 SCRA 333.
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VOL. 235, AUGUST 25, 1994 727
Tolentino vs. Secretary of Finance
15
Daza vs. Singson, et al., on the other, to know which would be
applicable to the present controversy and which should be rejected.
But, first, a positional exordium. The writer of this opinion would
be among the first to acknowledge and enjoin not only courtesy to,
but respect for, the official acts of the Executive and Legislative
departments, but only so long as the same are in accordance with or
are defensible under the fundamental charter and the statutory
law. He would readily be numbered in the ranks of those who would
preach a reasoned sermon on the separation of powers, but with the
qualification that the same are not contained in tripartite
compartments separated by imper-meable membranes. He also
ascribes to the general validity of American constitutional doctrines
as a matter of historical and legal necessity, but not to the extent of
being oblivious to political changes or unmindful of the fallacy of
undue generalization arising from myopic disregard of the factual
setting of each particular case.
These ruminations have likewise been articulated and dissected
by my colleagues, hence it is felt that the only issue which must be
set aright in this dissenting opinion is the so-called enrolled bill
doctrine to which we are urged to cling with reptilian tenacity. It
will be preliminarily noted that the official certification appearing
right on the face of Republic Act No. 7716 would even render
unnecessary any further judicial inquiry into the proceedings which
transpired in the two legislative chambers and, on a parody of
tricameralism, in the bicameral conference committee. Moreover,
we have the excellent dissertations of some of my colleagues on
these matters, but respondents insist en contra that the
congressional proceedings cannot properly be inquired into by this
Court. Such objection confirms a suppressive pattern aimed at
sacrificing the rule of law to the fiat of expediency.
Respondents thus emplaced on their battlements the
pronouncement of this Court16 in the aforecited case of Philippine
Judges Association vs. Prado. Their reliance thereon falls into the
same error committed by their seeking refuge in the Flint case,
ante., which, as has earlier been demonstrated (aside from
________________
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15 G.R. No. 86344, December 21, 1989, 180 SCRA 496.
16 Consolidated Memorandum for Respondents, 79-82.
728
728 SUPREME COURT REPORTS ANNOTATED
Tolentino vs. Secretary of Finance
the quotational misrepresentation), could not be on par with the
factual situation in the present case. Flint, to repeat, involved a
mere amendment on a single legislative item, that is, substituting
the proposal therein of an inheritance tax by one on corporate tax.
Now, in their submission based on Philippine Judges Association,
respondents studiously avoid mention of the fact that the
questioned insertion referred likewise to a single item, that is, the
repeal of the franking privilege theretofore granted to the judiciary.
That both cases cannot be equated with those at bar, considering
the multitude of items challenged and the plethora of constitutional
violations involved, is too obvious to belabor. Legal advocacy and
judicial adjudication must have a becoming sense of qualitative
proportion, instead of lapsing into the discredited and maligned
practice of yielding blind adherence to precedents.
The writer unqualifiedly affirms his respect for valid official acts
of the two branches of government and eschews any unnecessary
intrusion into their operational management and internal affairs.
These, without doubt, are matters traditionally protected by the
republican principle of separation of powers. Where, however, there
is an overriding necessity for judicial intervention in light of the
pervasive magnitude of the problems presented and the gravity of
the constitutional violations alleged, but this Court cannot perform
its constitutional duty expressed in Section 1, Article VIII of the
Constitution unless it makes the inescapable inquiry, then the
confluence of such factors should compel an exception to the rule as
an ultimate recourse. The cases now before us present both the
inevitable challenge and the inescapable exigency for judicial
review. For the Court to now shirk its bounden duty would not only
project it as a citadel of the timorous and the slothful, but could
even undermine its raison d’etre as the highest and ultimate
tribunal.
Hence, this dissenting opinion has touched on events behind and
which transpired prior to the presentation of the enrolled bill for
approval into law. The details of that law which resulted from the
legislative action followed by both houses of Congress, the
substantive validity of whose provisions and the procedural validity
of which legislative process are here challenged as unconstitutional,
have been graphically presented by petitioners and admirably
explained in the respective opinions of my brethren. The writer
concurs in the conclusions drawn therefrom and
729
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Tolentino vs. Secretary of Finance
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rejects the contention that we have unjustifiably breached the dike
of the enrolled bill doctrine.
Even in the land of its source, the so-called conclusive
presumption of validity originally attributed to that doctrine has
long been revisited and qualified, if not altogether rejected. On the
competency of judicial inquiry, it has been held that “(u)nder the
‘enrolled bill rule’ by which an enrolled bill is sole expository of its
contents and conclusive evidence of its existence and valid
enactment, it is nevertheless competent for courts to inquire as to
what prerequisites are fixed by the Constitution of which journals of
respective17 houses of Legislature are required to furnish the
evidence.” 18
In fact, in Gwynn vs. Hardee, etc., et al., the Supreme Court of
Florida declared:
“(1) While the presumption is that the enrolled bill, as signed by the
legislative officers and filed with the secretary of state, is the bill as it
passed, yet this presumption is not conclusive, and when it is shown from
the legislative journals that a bill though engrossed and enrolled, and
signed by the legislative officers, contains provisions that have not passed
both houses, such provisions will be held spurious and not a part of the law.
As was said by Mr. Justice Cockrell in the case of Wade vs. Atlantic
Lumber Co., 51 Fla. 628, text 633, 41 So. 72, 73:
‘This Court is firmly committed to the holding that when the journals speak they
control, and against such proof the enrolled bill is not conclusive.’ ”
More enlightening and apropos to the present controversy is the
decision promulgated on May 13, 1980 by the Supreme Court of
Kentucky in D & W Auto Supply, et al. vs. Department of Revenue,
19
et al., pertinent excerpts wherefrom are extensively reproduced
hereunder:
_______________
17 Brailsford vs. Walker, 31 S.E. 2d 385, 387, 388, 205 S.C. 228.
18 110 So. 343, 346.
19 602 South Western Reporter, 2d Series, 402-425, jointly deciding Carrollton
Wholesale Tobaccos, Inc. et al. vs. Department of Revenue, et al., and Bluegrass
Provisions Co., Inc., et al. vs. Department of Revenue, et al.
730
730 SUPREME COURT REPORTS ANNOTATED
Tolentino vs. Secretary of Finance
“x x x In arriving at our decision we must, perforce, reconsider the validity
of a long line of decisions of this court which created and nurtured the so-
called ‘enrolled bill’ doctrine.
xxx
“[1] Section 46 of the Kentucky Constitution sets out certain procedures
that the legislature must follow before a bill can be considered for final
passage. x x x.
xxx
“x x x Under the enrolled bill doctrine as it now exists in Kentucky, a
court may not look behind such a bill, enrolled and certified by the
appropriate officers, to determine if there are any defects.
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xxx
“x x x In Lafferty, passage of the law in question violated this provision,
yet the bill was properly enrolled and approved by the governor. In
declining to look behind the law to determine the propriety of its
enactment, the court enunciated three reasons for adopting the enrolled bill
rule. First, the court was reluctant to scrutinize the processes of the
legislature, an equal branch of government. Second, reasons of convenience
prevailed, which discouraged requiring the legislature to preserve its
records and anticipated considerable complex litigation if the court ruled
otherwise. Third, the court acknowledged the poor record-keeping abilities
of the General Assembly and expressed a preference for accepting the final
bill as enrolled, rather than opening up the records of the legislature. x x x.
xxx
“Nowhere has the rule been adopted without reason, or as a result of
judicial whim. There are four historical bases for the doctrine. (1) An
enrolled bill was a ‘record’ and, as such, was not subject to attack at
common law. (2) Since the legislature is one of the three branches of
government, the courts, being coequal, must indulge in every presumption
that legislative acts are valid. (3) When the rule was originally formulated,
record-keeping of the legislatures was so inadequate that a balancing of
equities required that the final act, the enrolled bill, be given efficacy. (4)
There were theories of convenience as expressed by the Kentucky court in
Lafferty.
“The rule is not unanimous in the several states, however, and it has not
been without its critics. From an examination of cases and treaties, we can
summarize the criticisms as follows: (1) Artificial presumptions, especially
conclusive ones, are not favored. (2) Such a rule frequently (as in the present
case) produces results which do not accord with facts or constitutional
provisions. (3) The rule is conducive to fraud, forgery, corruption and other
wrongdoings. (4) Modern automatic and electronic record-keeping devices
now used by legislatures
731
VOL. 235, AUGUST 25, 1994 731
Tolentino vs. Secretary of Finance
remove one of the original reasons for the rule. (5) The rule disregards the
primary obligation of the courts to seek the truth and to provide a remedy
for a wrong committed by any branch of government. In light of these
considerations, we are convinced that the time has come to re-examine the
enrolled bill doctrine.
“[2] This court is not unmindful of the admonition of the doctrine of stare
decisis. The maxim is “Stare decisis et non quieta movere,” which simply
suggests that we stand by precedents and not disturb settled points of law.
Yet, this rule is not inflexible, nor is it of such a nature as to require
perpetuation of error or logic. As we stated in Daniel’s Adm’r v. Hoofnel, 287
Ky 834, 155 S.W.2d 469, 471-72 (1941) (citations omitted):
The force of the rule depends upon the nature of the question to be decided and the
extent of the disturbance of rights and practices which a change in the
interpretation of the law or the course of judicial opinions may create. Cogent
considerations are whether there is clear error and urgent reasons ‘for neither
justice nor wisdom requires a court to go from one doubtful rule to another,’ and
whether or not the evils of the principle that has been followed will be more
injurious than can possibly result from a change.
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Certainly, when a theory supporting a rule of law is not grounded on
facts, or upon sound logic, or is unjust, or has been discredited by actual
experience, it should be discarded, and with it the rule it supports.
“[3] It is clear to us that the major premise of the Lafferty decision, the
poor record-keeping of the legislature, has disappeared. Modern equipment
and technology are the rule in record-keeping by our General Assembly.
Tape recorders, electric typewriters, duplicating machines, recording
equipment, printing presses, computers, electronic voting machines, and
the like remove all doubts and fears as to the ability of the General
Assembly to keep accurate and readily accessible records.
“It is also apparent that the ‘convenience’ rule is not appropriate in
today’s modern and developing judicial philosophy. The fact that the
number and complexity of lawsuits may increase is not persuasive if one is
mindful that the overriding purpose of our judicial system is to discover the
truth and see that justice is done. The existence of difficulties and
complexities should not deter this pursuit and we reject any doctrine or
presumption that so provides.
“Lastly, we address the premise that the equality of the various
branches of government requires that we shut our eyes to constitutional
failings and other errors of our coparceners in government. We simply do
not agree. Section 26 of the Kentucky Constitution provides that any
732
732 SUPREME COURT REPORTS ANNOTATED
Tolentino vs. Secretary of Finance
law contrary to the constitution is ‘void.’ The proper exercise of judicial
authority requires us to recognize any law which is unconstitutional and to
declare it void. Without belaboring the point, we believe that under section
228 of the Kentucky Constitution it is our obligation to ‘support . . . the
Constitution of the commonwealth.’ We are sworn to see that violations of
the constitution—by any person, corporation, state agency or branch of
government—are brought to light and corrected. To countenance an
artificial rule of law that silences our voices when confronted with violations
of our constitution is not acceptable to this court.
“We believe that a more reasonable rule is the one which Professor
Sutherland describes as the ‘extrinsic evidence’ rule. x x x. Under this
approach there is a prima facie presumption that an enrolled bill is valid,
but such presumption may be overcome by clear, satisfactory and convincing
evidence establishing that constitutional requirements have not been met.
“We therefore overrule Lafferty v. Huffman and all other cases following
the so-called enrolled bill doctrine, to the extent that there is no longer a
conclusive presumption that an enrolled bill is valid. x x x” (Emphases
mine.)
Undeniably, the value-added tax system may have its own merits to
commend its continued adoption, and the proposed widening of its
base could achieve laudable governmental objectives if properly
formulated and conscientiously implemented. We would like to
believe, however, that ours is not only an enlightened democracy
nurtured by a policy of transparency but one where the edicts of the
fundamental law are sacrosanct for all, barring none. While the
realization of the lofty ends of this administration should indeed be
the devout wish of all, likewise barring none, it can never be
justified by methods which, even if unintended, are suggestive of
Machiavellism.
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Accordingly, I vote to grant the instant petitions and to
invalidate Republic Act No. 7716 for having been enacted in
violation of Section 24, Article VI of the Constitution.
DISSENTING OPINION
DAVIDE, JR., J.:
The legislative history of R.A. No. 7716, as highlighted in the
Consolidated Memorandum for the public respondents submitted
733
VOL. 235, AUGUST 25, 1994 733
Tolentino vs. Secretary of Finance
by the Office of the Solicitor General, demonstrates beyond doubt
that it was passed in violation or deliberate disregard of mandatory
provisions of the Constitution and of the rules of both chambers of
Congress relating to the enactment of bills.
I therefore vote to strike down R.A. No. 7716 as unconstitutional
and as having been enacted with grave abuse of discretion.
The Constitution provides for a bicameral Congress. Therefore,
no bill can be enacted into law unless it is approved by both
chambers—the Senate and the House of Representatives
(hereinafter House). Otherwise stated, each chamber may propose
and approve a bill, but until it is submitted to the other chamber
and passed by the latter, it cannot be submitted to the President for
its approval into law.
Paragraph 2, Section 26, Article VI of the Constitution provides:
“No bill passed by either House shall become a law unless it has passed
three readings on separate days, and printed copies thereof in its final form
have been distributed to its Members three days before its passage, except
when the President certifies to the necessity of its immediate enactment to
meet a public calamity or emergency. Upon the last reading of a bill, no
amendment thereto shall be allowed, and the vote thereon shall be taken
immediately thereafter, and the yeas and nays entered in the Journal.”
The “three readings” refer to the three readings in both chambers.
There are, however, bills which must originate exclusively in the
House. Section 24, Article VI of the Constitution enumerates them:
“SEC. 24. All appropriation, revenue or tariff bills, bills authorizing
increase of the public debt, bills of local application, and private bills shall
originate exclusively in the House of Representatives, but the Senate may
propose or concur with amendments.”
1
Webster’s Third New International Dictionary defines originate as
follows:
“vt 1: to cause the beginning of: give rise to: INITIATE . . . 2. to start (a
person or thing) on a course of journey . . . vi: to take or have
________________
1 1971 ed., 1592.
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734 (5) After the close of the debate, the period of amendments
follows;
734 SUPREME COURT REPORTS ANNOTATED (6) Then, after the period of amendments
5
is closed, the voting
Tolentino vs. Secretary of Finance on the bill on second reading.

After approval on second reading, printed copies thereof in its final

origin: be derived: ARISE, BEGIN, START . . .”
form shall be distributed to the Members of the Senate at least
2
Black’s Law Dictionary defines the word exclusively in this wise: three days prior to the third reading, except in cases of certified
bills. At the third reading, the final vote shall
6
be taken and the yeas
“Apart from all others; only; solely; substantially all or for the greater part. and nays shall be entered in the Journal.
To the exclusion of all others; without admission of others to participation; Under the Rules of the House, the first reading of a bill consists
in a manner to exclude.” of a reading of the number, title,7 and author followed by the referral
3 to the appropriate committees; the second reading consists of the
In City Mayor vs. The Chief of Philippine Constabulary, this Court reading in full of8 the bill with the amendments proposed by the
said: committee, if any; and the third reading is the reading of the bill in
“The term ‘exclusive’ in its usual and generally accepted sense, means
the form as approved on second reading and takes place only after
possessed to the exclusion of others; appertaining to the subject alone, not
printed copies thereof in its final form have been distributed to 9the
including, admitting or pertaining to another or others, undivided, sole. (15
Members at least three days before, unless the bill is certified. At
Words and Phrases, p. 510, citing Mitchel v. Tulsa Water, Light, Heat and
the second reading, the following takes place:
Power Co., 95 P. 961, 21 Okl. 243; and p. 513, citing Commonwealth v.
(1) Reading of the bill;
Superintendent of House of Correction, 64 Pa. Super. 613, 615).”
(2) Sponsorship;
Indisputably then, only the House can cause the beginning or (3) Debates;
initiate the passage of any appropriation, revenue, or tariff bill, any (4) Period of Amendments; and
bill increasing the public debt, any bill of local application, or any 10
(5) Voting on Second Reading.
private bill. The Senate can only “propose or concur with
amendments.”
At the third reading, the votes shall 11
be taken immediately and the
Under the Rules of the Senate, the first reading is the reading of
yeas and nays entered in the Journal.
the title of the bill and its referral to the corresponding committee;
the second reading consists of the reading of the bill in the form
recommended by the corresponding committee; and the third _______________
reading is the reading
4
of the bill in the form it will be after approval 5 Section 57, Rule XXV.
on second reading. During the second reading, the following takes 6 Section 26(2), Article VI, Constitution; paragraph (7), Section 57, Rule XXV.
place: 7 Section 69, Rule XIV.
8 Section 77, Id.
(1) Second reading of the bill; 9 Section 82, Rule XIV.
(2) Sponsorship by the Committee Chairman or any member 10 Sections 77-81, Id.
designated by the corresponding committee; 11 Section 82, Id., in relation to Section 26(2), Article VI, Constitution.

736
_______________

2 Sixth Edition (1990), 565, citing Standard Oil Co. of Texas vs. State, Tex. Civ.
736 SUPREME COURT REPORTS ANNOTATED
App., 142 S.W.2d 519, 521, 522, 523.
3 21 SCRA 665, 673 [1967]. Tolentino vs. Secretary of Finance
4 Sections 52 and 53, Rule XXIII.
Clearly, whether in the Senate or in the House, every bill must pass
735
the three readings on separate days, except when the bill is
certified. Amendments to 12
the bill on third reading are
VOL. 235, AUGUST 25, 1994 735 constitutionally prohibited.
After its passage by one chamber, the bill should then be
Tolentino vs. Secretary of Finance
transmitted to the other chamber for its concurrence. Section 83,
Rule XIV of the Rules of the House expressly provides:
(3) If a debate ensues, turns for and against the bill shall be
taken alternately; “SEC. 83. Transmittal to Senate.—The Secretary General, without need of
(4) The sponsor of the bill closes the debate; express order, shall transmit to the Senate for its concurrence all the bills
and joint or concurrent resolutions approved by the House or the
amendments of the House to the bills or resolutions of the Senate, as the
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case may be. If the measures approved without amendments are bills or
resolutions of the Senate, or if amendments of the Senate to bills of the
House are accepted, he shall forthwith notify the Senate of the action
taken.”
Simplified, this rule means that:
1. As to a bill originating in the House:
(a) Upon its approval by the House, the bill shall be
transmitted to the Senate;
(b) The Senate may approve it with or without amendments;
(c) The Senate returns the bill to the House;
(d) The House may accept the Senate amendments; if it does
not, the Secretary General shall notify the Senate of that
action. As hereinafter be shown, a request for conference
shall then be in order.
2. As to bills originating in the Senate:
(a) Upon its approval by the Senate, the bill shall be
transmitted to the House;
(b) The House may approve it with or without amendments;
(c) The House then returns it to the Senate, informing it of the
action taken;
(d) The Senate may accept the House amendments; if it does
not, it shall notify the House and make a request for
conference.
The transmitted bill shall then pass three readings in the other
chamber on separate days. Section 84, Rule XIV of the
________________
12 Section 26(2), Article VI, Constitution.
737
VOL. 235, AUGUST 25, 1994 737
Tolentino vs. Secretary of Finance
Rules of the House states:
“SEC. 84. Bills from the Senate.—The bills, resolutions and
communications of the Senate shall be referred to the corresponding
committee in the same manner as bills presented by Members of the
House.”
and Section 51, Rule XXIII of the Rules of the Senate provides:
“SEC. 51. Prior to their final approval, bills and joint resolutions shall be
read at least three times.”
It is only when the period of disagreement is reached, i.e.,
amendments proposed by one chamber to a bill originating from the
other are not accepted by the latter, that a request for conference is
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made or is in order. The request for conference is specifically
covered by Section 26, Rule XII of the Rules of the Senate which
reads:
“SEC. 26. In the event that the Senate does not agree with the House of
Representatives on the provision of any bill or joint resolution, the
differences shall be settled by a conference committee of both Houses which
shall meet within ten days after its composition.”
and Section 85, Rule XIV of the Rules of the House which reads:
“SEC. 85. Conference Committee Reports.—In the event that the House does
not agree with the Senate on the amendments to any bill or joint
resolution, the differences may be settled by conference committees of both
Chambers.”
The foregoing provisions of the Constitution and the Rules of both
chambers of Congress are mandatory. 13
In his Treatise On The Constitutional Limitations, more
particularly on enactment of bills, Cooley states:
_________________
13 Volume I, Eight Edition, Chapter VI, 267. See Miller vs. Mardo, 2 SCRA 898
[1961]; Everlasting Pictures, Inc. vs. Fuentes, 3 SCRA 539 [1961].
738
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Tolentino vs. Secretary of Finance
“Where, for an instance, the legislative power is to be exercised by two
houses, and by settled and well-understood parliamentary law these two
houses are to hold separate sessions for their deliberations, and the
determination of the one upon a proposed law is to be submitted to the
separate determination of the other, the constitution, in providing for two
houses, has evidently spoken in reference to this settled custom,
incorporating it as a rule of constitutional interpretation; so that it would
require no prohibitory clause to forbid the two houses from combining in
one, and jointly enacting laws by the vote of a majority of all. All those
rules which are of the essentials of law-making must be observed and
followed; and it is only the customary rules of order and routine, such as in
every deliberative body are always understood to be under its control, and
subject to constant change at its will, that the constitution can be
understood to have left as matters of discretion, to be established, modified,
or abolished by the bodies for whose government in non-essential matters
they exist.”
In respect of appropriation, revenue, or tariff bills, bills increasing
the public debt, bills of local application, or private bills, the return
thereof to the House after the Senate shall have “proposed or
concurred with amendments” for the former either to accept or
reject the amendments would not only be in conformity with the
foregoing rules but is also implicit from Section 24 of Article VI.
With the foregoing as our guiding light, I shall now show the
violations of the Constitution and of the Rules of the Senate and of
the House in the passage of R.A. No. 7716.
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VIOLATIONS OF SECTION 24, ARTICLE VI OF THE
CONSTITUTION:
First violation.—Since R.A. No. 7716 is a revenue measure, it must
originate exclusively in the House—not in the Senate. As correctly
asserted by petitioner Tolentino, on the face of the enrolled copy of
R.A. No. 7716, it is a “CONSOLIDATION OF HOUSE BILL NO.
11197 AND SENATE BILL NO. 1630.” In short, it is an illicit
marriage of a bill which originated in the House and a bill which
originated in the Senate. Therefore, R.A. No. 7716 did not originate
exclusively in the House.
The only bill which could serve as a valid basis for R.A. No. 7716
is House Bill (HB) No. 11197. This bill, which is the substitute bill
recommended by the House Committee on Ways
VOL. 235, AUGUST 25, 1994
Tolentino vs. Secretary of Finance
and Means in substitution of House Bills Nos. 253, 771, 2450, 7033,
8086,9030, 9210, 9397, 10012,
14
and 10100, and covered by its
Committee Report No. 367, 15 was approved on third reading16 by the
House on 17 November 1993. Interestingly, HB No. 9210, which
was filed by Representative Exequiel B. Javier on 19 May 1993, was
certified by the President
17
in his letter to Speaker Jose de Venecia,
Jr. of 1 June 1993. Yet, HB No. 11197, which substituted HB No.
9210 and the others abovestated, was not. Its certification seemed
to have been entirely forgotten.
On 18 November 1993, the Secretary-General of the House,
pursuant to Section 83, Rule XIV of the Rules of the House,
transmitted to the President of the Senate HB18No. 11197 and
requested the concurrence of the Senate therewith.
However, HB No. 11197 had passed only its first reading in the
Senate by its referral to its Committee on Ways and Means. That
Committee never deliberated on HB No. 11197 19
as it should have. It
acted only on Senate Bill (SB) No. 1129 introduced by Senator
Ernesto F. Herrera on 1 March 1993. It then prepared 20 and proposed
SB No. 1630, and in its Committee Report21No. 349 which was
submitted to the Senate on 7 February 1994, it recommended that
SB No. 1630 be approved “in substitution of S.B. No. 1129, 22
taking
into consideration P.S. Res. No. 734 and H.B. No. 11197.” It must
be carefully noted that SB No. 1630 was proposed and submitted for
approval by the Senate in SUBSTITUTION of SB No. 1129, and not
HB No. 11197. Obviously, the principal measure which the
Committee deliberated
________________
14 Consolidated Memorandum for Respondents, Annexes “2” to “12,” inclusive.
15 Consolidated Memorandum for Respondents, 18.
16 Id., Annex “9.”
17 Id., Annex “1.”
18 Id., 18.
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19 Id., Annex “15.” Entitled “An Act Restructuring the Value-Added Tax (VAT)
System By Expanding Its Tax Base, Amending Sections 103, 113, 114 of the National
Internal Revenue Code, as Amended.”
20 Id., Annex “17.”
21 Id., 20.
22 Emphasis supplied.
740
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Tolentino vs. Secretary of Finance
on and acted upon was SB No. 1129 and not HB No. 11197. The
latter, instead of being the only measure to be taken up, deliberated
upon, and reported back to the Senate for its consideration on
739 second reading and, eventually, on third reading, was, at the most,
merely given by the Committee a passing glance.
This specific unequivocal action of the Senate Committee on
739 Ways and Means, i.e., proposing and recommending approval of SB
No. 1630 as a substitute for or in substitution of SB No. 1129
demolishes at once the thesis of the Solicitor General that:
“Assuming that SB 1630 is distinct from HB 11197, amendment by
substitution is within the purview of Section 24, Article VI of the
Constitution.”
because, according to him, (a) “Section 68, Rule XXIX of the Rules of
the Senate authorizes an amendment by substitution and the only
condition required is that ‘the text thereof is submitted in writing’;
and (b) ‘[I]n Flint vs. Stone Tracy Co. (220 U.S. 107) the United
States Supreme Court, interpreting the provision in the United
States Constitution similar to Section 24, Article VI of the
Philippine Constitution, stated that the power of the Senate to
amend a revenue bill includes substitution of an entirely new
measure for the 23 one originally proposed by the House of
Representatives.’ ”
This thesis is utterly without merit. In the first place, it reads
into the Committee Report something which it had not
contemplated, that is, to propose SB No. 1630 in substitution of HB
No. 11197; or speculates that the Committee may have committed
an error in stating that it is SB No. 1129, and not HB No. 11197,
which is to be substituted by SB No. 1630. Either, of course, is
unwarranted because the words of the Report, solemnly signed by
the Chairman, Vice-Chairman (who dissented), seven members, and
24
three ex-officio members, leave no room for doubt that although
SB No. 1129, P.S. Res No. 734, and HB No. 11197 were referred to
and considered by the Committee, it had prepared the attached SB
No. 1630 which it recommends for approval “in
________________
23 Consolidated Memorandum for Respondents, 55-56.
24 Consolidated Memorandum for Respondents, Annex “17.” Two signed with
reservations and four signed subject to amendments.
741
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VOL. 235, AUGUST 25, 1994 741
Tolentino vs. Secretary of Finance
substitution of S.B. No. 11197, taking into consideration P.S. No.
734 and H.B. No. 11197 with Senators Herrera, Angara, Romulo,
Sotto, Ople and Shahani as authors.” To do as suggested would be
to substitute the judgment of the Committee with another that is
completely inconsistent with it, or, simply, to capriciously ignore the
facts.
In the second place, the Office of the Solicitor General
intentionally made it appear, to mislead
25
rather than to persuade us,
that in Flint vs. Stone Tracy Co. the U.S. Supreme Court ruled, as
quoted by
26
it in the Consolidated Memorandum for Respondents, as
follows:
“The Senate has the power to amend a revenue bill. This power to amend is
not confined to the elimination of provisions contained in the original act,
but embraces as well the addition of such provisions thereto as may render
the original act satisfactory to the body which is called upon to support it. It
has, in fact, been held that the substitution of an entirely new measure for
the one originally proposed can be supported as a valid amendment.
x x x      x x x      x x x
It is contended in the first place that this section of the act is
unconstitutional, because it is a revenue measure, and originated in the
Senate in violation of section 7 of article 1 of the Constitution, providing
that ‘all bills for raising revenue shall originate in the House of
Representatives, but the Senate may propose or concur with the
amendments, as on other bills.’ ”
The first part is not a statement of the Court, but a summary of the
arguments of counsel in one of the companion cases (No. 425,
entitled, “Gay vs. Baltic Mining Co.”). The second part is the second
paragraph of the opinion of the Court delivered by Mr. Justice Day.
The misrepresentation that the first part is a statement of the
Court is highly contemptuous. To show such deliberate
misrepresentation, it is well to quote what actually are found in 55
L.Ed. 408, 410, to wit:
“Messrs. Charles A. Snow and Joseph H. Knight filed a brief for appellees in
No. 425:
_______________
25 And companion cases, 220 U.S. 107, 55 L.Ed. 389 [1911].
26 Page 56.
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x     x     x
The Senate has the power to amend a revenue bill. This power to amend
is not confined to the elimination of provisions contained in the original act,
but embraces as well the addition of such provisions thereto as may render
the original act satisfactory to the body which is called upon to support it. It
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has, in fact, been held that the substitution of an entirely new measure for
the one originally proposed can be supported as a valid amendment.
Brake v. Collison, 122 Fed. 722.
Mr. James L. Quackenbush filed a statement for appellees in No. 442.
Solicitor General Lehmann (by special leave) argued the cause for the
United States on reargument.
Mr. Justice Day delivered the opinion of the court:
These cases involve the constitutional validity of § 38 of the act of Congress
approved August 5, 1909, known as ‘the corporation tax’ law. 36 Stat. at L. 11, 112-
117, chap. 6, U.S. Comp. Stat. Supp. 1909, pp. 659, 844-849.
It is contended in the first place that this section of the act is unconstitutional,
because it is a revenue measure, and originated in the Senate in violation of § 7 of
article 1 of the Constitution, providing that ‘all bills for raising revenue shall
originate in the House of Representatives, but the Senate may propose or concur
with the amendments, as on other bills.’ The history of the act is contained in the
government’s brief, and is accepted as correct, no objection being made to its
accuracy.
This statement shows that the tariff bill of which the section under consideration
is a part, originated in the House of Representatives, and was there a general bill
for the collection of revenue. As originally introduced, it contained a plan of
inheritance taxation. In the Senate the proposed tax was removed from the bill, and
the corporation tax, in a measure, substituted therefor. The bill having properly
originated in the House, we perceive no reason in the constitutional provision relied
upon why it may not be amended in the Senate in the manner which it was in this
case. The amendment was germane to the subject-matter of the bill, and not beyond
the power of the Senate to propose.” (Emphasis supplied)
x     x     x
As shown above, the underlined portions were deliberately omitted
in the quotation made by the Office of the Solicitor General.
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Tolentino vs. Secretary of Finance
In the third place, a Senate amendment by substitution with an
entirely new bill of a bill, which under Section 24, Article VI of the
Constitution can only originate exclusively in the House, is not
authorized by said Section 24. Flint vs. Stone Tracy Co. cannot be
invoked in favor of such a view. As pointed out by Mr. Justice
Florenz D. Regalado during the oral arguments of these cases and
during the initial deliberations thereon by the Court, Flint involves
a Senate amendment to a revenue bill which, under the United
States Constitution, should originate from the House of
Representatives. The amendment consisted of the substitution of a
corporation tax in lieu of the plan of inheritance taxation contained
in a general bill for the collection of revenue as it came from the
House of Representatives where the bill originated. The
constitutional provision in question is Section 7, Article I of the
United States Constitution which reads:
“Section 7. Bills and Resolutions.—All Bills for raising Revenue shall
originate in the House of Representatives; but the Senate may propose or
concur with Amendments, as on other Bills.”
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This provision, contrary to the misleading claim of the Solicitor
General, is not similar to Section 24, Article VI of our Constitution,
which for easy comparison is hereunder quoted again:
“All appropriation, revenue or tariff bills, bills authorizing increase of the
public debt, bills of local application, and private bills shall originate
exclusively in the House of Representatives, but the Senate may propose or
concur with amendments.”
Note that in the former the word exclusively does not appear. And,
in the latter, the phrase “as on other Bills,” which is found in the
former, does not appear. These are very significant in determining
the authority of the upper chamber over the bills enumerated in
Section 24. Since the origination is not exclusively vested in the
House of Representatives of the United States, the Senate’s
authority to propose or concur with amendments is necessarily
broader. That broader authority is further confirmed by the phrase
“as on other Bills,” i.e., its power to propose or concur with
amendments thereon is the same as in ordinary bills. The absence
of this phrase in our Constitution was clearly intended to restrict or
limit the Philippine Senate’s power to
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Tolentino vs. Secretary of Finance
propose or concur with amendments. In the light of the exclusivity
of origination and the absence of the phrase “as on other Bills,” the
Philippine Senate cannot amend by substitution with an entirely
new bill of its own any bill covered by Section 24 of Article VI which
the House of Representatives transmitted to it because such
substitution would indirectly violate Section 24.
These obvious substantive differences between Section 7, Article
I of the U.S. Constitution and Section 24, Article VI of our
Constitution are enough reasons why this Court should neither
allow itself to be misled by Flint vs. Stone nor be awed by28 Rainey vs.
27
United States and the opinion of Messrs. Ogg and Ray which the
majority cites to support the view that the power of the U.S. Senate
to amend a revenue measure is unlimited. Rainey concerns the
Tariff Act of 1909 of the United States of America and specifically
involved was its Section 37 which was an amendment introduced by
the U.S. Senate. It was claimed by the petitioners that the said
section is a revenue measure which should originate in the House of
Representatives. The U.S. Supreme Court, however, adopted and
approved the finding of the court a quo that:
“the section in question is not void as a bill for raising revenue originating
in the Senate, and not in the House of Representatives. It appears that the
section was proposed by the Senate as an amendment to a bill for raising
revenue which originated in the House. That is sufficient.”
Messrs. Ogg and Ray, who are professors emeritus of political
science, based their statement not even on a case decided by the
U.S. Supreme Court but on their perception of what Section 7,
Article I of the U.S. Constitution permits. In the tenth edition
(1951) of their work, they state:
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“Any bill may make its first appearance in either house, except only that
bills for raising revenue are required by the constitution to ‘originate’ in the
House of Representatives. Indeed, through its right to amend revenue bills,
even to the extent of substituting new ones, the
________________
27 232 U.S. 309, 58 L ed. 117 [1914].
28 Introduction to American Government, 309, n. 2 [1945].
745
VOL. 235, AUGUST 25, 1994 745
Tolentino vs. Secretary of Finance
29
Senate may, in effect, originate them also.”
Their “in effect” conclusion is, of course, logically correct because
the word exclusively does not appear in said Section 7, Article I of
the U.S. Constitution.
Neither can I find myself in agreement with the view of the
majority that the Constitution does not prohibit the filing in the
Senate of a substitute bill in anticipation of its receipt of the bill
from the House so long as action by the Senate as a body is
withheld pending receipt of the House bill, thereby stating, in effect,
that S.B. No. 1129 was such an anticipatory substitute bill, which,
nevertheless, does not seem to have been considered by the Senate
except only after its receipt of H.B. No. 11197 on 23 November 1993
when the process of legislation in respect of it began with a referral
to the Senate Committee on Ways and Means. Firstly, to say that
the Constitution does not prohibit it is to render meaningless
Section 24 of Article VI or to sanction its blatant disregard through
the simple expedient of filing in the Senate of a so-called
anticipatory substitute bill. Secondly, it suggests that S.B. No. 1129
was filed as an anticipatory measure to substitute for H.B. No.
11197. This is a speculation which even the author of S.B. No. 1129
may not have indulged in. S.B. No. 1129 was filed in the Senate by
Senator Herrera on 1 March 1993. H.B. No. 11197 was approved by
the House on third reading only on 17 November 1993. Frankly, I
cannot believe that Senator Herrera was able to prophesy that the
House would pass any VAT bill, much less to know its provisions.
That “it does not seem that the Senate even considered” the latter
not until after its receipt of H.B. No. 11197 is another speculation.
As stated earlier, S.B. No. 1129 was filed in the Senate on 1 March
1993, while H.B. No. 11197 was transmitted to the Senate only on
18 November 1993. There is no evidence on record to show that both
were referred to the Senate Committee on Ways and Means at the
same time. Finally, in respect of H.B. No. 11197, its legislative
process did not begin with its referral to the Senate’s Ways and
Means Committee. It begin upon its filing, as a Committee Bill of
the House Committee on Ways and Means, in the House.
_______________
29 At 317.
746
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746 SUPREME COURT REPORTS ANNOTATED
Tolentino vs. Secretary of Finance
Second violation.—Since SB No. 1129 is a revenue measure, it could
not even be validly introduced or initiated in the Senate. It follows
too, that the Senate cannot validly act thereon.
Third violation.—Since SB No. 1129 could not have been validly
introduced in the Senate and could not have been validly acted on
by the Senate, then it cannot be substituted by another revenue
measure, SB No. 1630, which the Senate Committee on Ways and
Means introduced in substitution of SB No. 1129. The filing or
introduction in the Senate of SB No. 1630 also violated Section 24,
Article VI of the Constitution.
VIOLATIONS OF SECTION 26(2), ARTICLE VI OF THE
CONSTITUTION:
First violation.—The Senate, despite its lack of constitutional
authority to consider SB No. 1630 or SB No. 1129 which the former
substituted, opened deliberations on second reading of SB No. 1630
on 8 February 1994. On 24 March 1994, 30
the Senate approved it on
second reading and on third reading. That approval on the same
day violated Section 26(2), Article VI of the Constitution. The
justification therefor was that on 24 February 1994 the President
certified to “the necessity 31of the enactment of SB No. 1630 . . . to
meet a public emergency.”
I submit, however, that the Presidential certification is void ab
initio not necessarily for the reason adduced by petitioner
Kilosbayan, Inc., but because it was addressed to the Senate for a
bill which is prohibited from originating therein. The only bill which
could be properly certified on permissible constitutional grounds
even if it had already been transmitted to the Senate is HB No.
11197. As earlier observed, this was not so certified, although HB
No. 9210 (one of32those consolidated into HB No. 11197) was certified
on 1 June 1993.
Also, the certification of SB No. 1630 cannot, by any stretch of
the imagination, be extended to HB No. 11197 because SB No. 1630
did not substitute HB No. 11197 but SB No. 1129.
_______________
30 Consolidated Memorandum for Respondents, 20-21.
31 Id., Annex “14.”
32 Id., Annex “1.”
VOL. 235, AUGUST 25, 1994
Tolentino vs. Secretary of Finance
Considering that the certification of SB No. 1630 is void, its
approval on second and third readings in one day violated Section
26(2), Article VI of the Constitution.
Second violation.—It further appears that on 24 June 1994, after
the approval of SB No. 1630, the Secretary of the Senate, upon
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directive of the Senate President, formally notified the House
Speaker of the Senate’s approval thereof and its request for a
bicameral conference “in view 33of the disagreeing provisions of said
bill and House Bill No. 11197.”
It must be stressed again that HB No. 11197 was never
submitted for or acted on second and third readings in the Senate,
and SB No. 1630 was never sent to the House for its concurrence.
Elsewise stated, both were only half-way through the legislative
mill. Their submission to a conference committee was not only
anomalously premature, but violative of the constitutional rule on
three readings.
The suggestion that SB No. 1630 was not required to be
submitted to the House for otherwise the procedure would be
endless, is unacceptable for, firstly, it violates Section 26, Rule XII
of the Rules of the Senate and Section 85, Rule XIV of the Rules of
the House, and, secondly, it is never endless. If the chamber of
origin refuses to accept the amendments of the other chamber, the
request for conference shall be made.
VIOLATIONS OF THE RULES OF BOTH CHAMBERS;
GRAVE ABUSE OF DISCRETION.
The erroneous referral to the conference committee needs further
discussion. Since S.B. No. 1630 was not a substitute bill for H.B.
No. 11197 but for S.B. No. 1129, it (S.B. No. 1630) remained a bill
which originated in the Senate. Even assuming arguendo that it
could be validly initiated in the Senate, it should have been first
transmitted to the House where it would undergo three readings.
On the other hand, since HB No. 11197 was never acted upon by
the Senate on second and third readings, no differences or
inconsistencies could as yet arise so as to warrant a request for a
conference. It should be noted that under Section
_______________
33 Consolidated Memorandum for Respondents, Annex “18.”
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83, Rule XIV of the Rules of the House, it is only when the Senate
shall have approved with amendments HB No. 11197 and the
House declines to accept the amendments after having been notified
747
thereof that the request for a conference may be made by the
House, not by the Senate. Conversely, the Senate’s request for a
747 conference would only be proper if, following the transmittal of SB
No. 1630 to the House, it was approved by the latter with
amendments but the Senate rejected the amendments.
Indisputably then, when the request for a bicameral conference
was made by the Senate, SB No. 1630 was not yet transmitted to
the House for consideration on three readings and HB No. 11197
was still in the Senate awaiting consideration on second and third
readings. Their referral to the bicameral conference committee was
palpably premature and, in so doing, both the Senate and the House
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acted without authority or with grave abuse of discretion. Nothing,
and absolutely nothing, could have been validly acted upon by the
bicameral conference committee.
GRAVE ABUSE OF DISCRETION COMMITTED BY THE
BICAMERAL CONFERENCE COMMITTEE.
Serious irregularities amounting to lack of jurisdiction or grave
abuse of discretion were committed by the bicameral conference
committee.
First, it assumed, and took for granted that SB No. 1630 could
validly originate in the Senate. This assumption is erroneous.
Second, it assumed that HB No. 11197 and SB No. 1630 had
properly passed both chambers of Congress and were properly and
regularly submitted to it. As earlier discussed, the assumption is
unfounded in fact.
Third, per the bicameral conference committee’s proceedings of
19 April 1994, Representative Exequiel Javier, Chairman of the
panel from the House, initially suggested that HB No. 11197 should
be the “frame of reference,” because it is a revenue measure, to
which Senator Ernesto Maceda concurred. However, after an
incompletely recorded reaction of Senator Ernesto Herrera,
Chairman of the Senate panel, Representative Javier seemed to
agree that “all amendments will be coming from the Senate.” The
issue of what should be the “frame of reference” does not appear to
have been resolved. These facts are recorded
749
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Tolentino vs. Secretary of Finance
in this wise,34 as quoted in the Consolidated Memorandum for
Respondents:
  Yes. That’s true for every revenue measure. There’s no other way.
The House Bill has got to be the base. Of course, for the record, we
know that this is an administration; this is certified by the
President and I was about to put into the recordsas I am saying
now that your problem about the impact on prices on the people
was already decided when the President and the administration
sent this to us and certified it. They have already gotten over that
political implication of this bill and the economic impact on prices.
“CHAIRMAN JAVIER.
  First of all, what would be the basis, no, or framework para
huwag naman mawala yung personality namin dito sa bicameral,
no, because the bill originates from the House because this is a
revenue bill, so we would just want to ask, we make the House
Bill as the frame of reference, and then everything will just be
inserted?
HON. MACEDA.
CHAIRMAN HERRERA.
  Yung concern mo about the bill as the reference in this discussion
is something that we can just . . .
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  Yes. That’s true for every revenue measure. There’s no other way.
The House Bill has got to be the base. Of course, for the record, we
know that this is an administration; this is certified by the
President and I was about to put into the recordsas I am saying
now that your problem about the impact on prices on the people
was already decided when the President and the administration
sent this to us and certified it. They have already gotten over that
political implication of this bill and the economic impact on prices.
CHAIRMAN JAVIER.
  We will just . . . all the amendments will be coming from the
Senate.
(BICAMERAL CONFERENCE ON MAJOR DIFFERENCES
BETWEEN HB NO. 11197 AND SB NO. 1630 [Cte. on Ways &
Means] APRIL 19, 1994, II-6 and II-7; italics supplied)”
These exchanges would suggest that Representative Javier had
wanted HB No. 11197 to be the principal measure on which
reconciliation of the differences should be based. However, since the
Senate did not act on this Bill on second and third readings because
its Committee on Ways and Means did not deliberate on it but
instead proposed SB No. 1630 in substitution of SB No. 1129, the
suggestion has no factual basis. Then, when finally he agreed that
“all amendments will be coming from the Senate,” he
_______________
34 Page 22.
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750 SUPREME COURT REPORTS ANNOTATED
Tolentino vs. Secretary of Finance
in fact withdrew the former suggestion and agreed that SB No.
1630, which is the Senate version of the Value Added Tax (VAT)
measure, should be the “frame of reference.” But then SB No. 1630
was never transmitted to the House for the latter’s concurrence.
Hence, it cannot serve as the “frame of reference” or as the basis for
deliberation. The posture taken by Representative Javier also
indicates that SB No. 1630 should be taken as the amendment to
HB No. 11197. This, too, is unfounded because SB No. 1630 was not
proposed in substitution of HB No. 11197.
Since SB No. 1630 did not pass three readings in the House and
HB No. 11197 did not pass second and third readings in the Senate,
it logically follows that no disagreeing provisions had as yet arisen.
The bicameral conference committee erroneously assumed the
contrary.
Even granting arguendo that both HB No. 11197 and SB No.
1630 had been validly approved by both chambers of Congress and
validly referred to the bicameral conference committee, the latter
had very limited authority thereon. It 35was created “in view of the
disagreeing provisions of” the two bills. Its duty was limited to the
reconciliation of disagreeing provisions or the resolution of
differences or inconsistencies. The committee recognized that
36
limited authority in the opening paragraph of its Report when it
said:
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“The Conference Committee on the disagreeing provisions of House Bill No.
11197 x x x and Senate Bill No. 1630 x x x.”
Under such limited authority, it could only either (a) restore, wholly
or partly, the specific provisions of HB No. 11197 amended by SB
No. 1630, (b) sustain, wholly or partly, the Senate’s amendments, or
(c) by way of a compromise, to agree that neither provisions in HB
No. 11197 amended by the Senate nor the latter’s amendments
thereto be carried into the final form of the former.
But as pointed out by petitioners Senator Raul Roco and
Kilosbayan, Inc., the bicameral conference committee not only
_______________
35 Consolidated Memorandum for Respondents, Annex “18.”
36 Id., Annex, “19.”
751
VOL. 235, AUGUST 25, 1994 751
Tolentino vs. Secretary of Finance
struck out non-disagreeing provisions of HB No. 11197 and SB No.
1630, i.e., provisions where both bills are in full agreement; it added
more activities or transactions to be covered by VAT, which were
not within the contemplation of both bills. Since both HB No. 11197
and SB No. 1630 were still half-cooked in the legislative vat, and
were not ready for referral to a conference, the bicameral conference
committee clearly acted without jurisdiction or with grave abuse of
discretion when it consolidated both into one bill which became R.A.
No. 7716.
APPROVAL BY BOTH CHAMBERS OF CONFERENCE
COMMITTEE REPORT AND PROPOSED BILL DID NOT
CURE CONSTITUTIONAL INFIRMITIES.
I cannot agree with the suggestion that since both the Senate and
the House had approved the bicameral conference committee report
and the bill proposed by it in substitution of HB No. 11197 and SB
No. 1630, whatever infirmities may have been committed by it were
cured by ratification. This doctrine of ratification may apply to
minor procedural flaws or tolerable breaches of the parameters of
the bicameral conference committee’s limited powers but never to
violations of the Constitution. Congress is not above the
Constitution. In the instant case, since SB No. 1630 was introduced
in violation of Section 24, Article VI of the Constitution, was passed
in the Senate in violation of the “three readings” rule, and was not
transmitted to the House for the completion of the constitutional
process of legislation, and HB No. 11197 was not likewise passed by
the Senate on second and third readings, neither the Senate nor the
House could validly approve the bicameral conference committee
report and the proposed bill.
In view of the foregoing, the conclusion is inevitable that for non-
compliance with mandatory provisions of the Constitution and of
the Rules of the Senate and of the House on the enactment of laws,
R.A. No. 7716 is unconstitutional and, therefore, null and void. A
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discussion then of the intrinsic validity of some of its provisions
would be unnecessary.
The majority opinion, however, invokes the enrolled bill doctrine
and wants this Court to desist from looking behind the copy of the
assailed measure as certified by the Senate President and the
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Speaker of the House. I respectfully submit that the invocation is
misplaced. First, as to the issue of origination, the certification in
this case explicitly states that R.A. No. 7716 is a “consolidation of
House Bill No. 11197 and Senate Bill No. 1630.” This is conclusive
evidence that the measure did not originate exclusively in the
House. Second, the enrolled bill doctrine is of American origin, and
unquestioned fealty to 37
it may no longer be justified in view of the
expanded jurisdiction of this Court under Section 1, Article VIII of
our Constitution which now expressly grants authority to this Court
to:
“determine whether or not there has been a grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of any branch or
instrumentality of the Government.”
Third, even under the regime of the 1935 Constitution which did
not contain the above provision, this Court, 38
through Mr. Chief
Justice Makalintal, in Astorga vs. Villegas, declared
39
that it cannot
be truly said that Mabanag vs. Lopez Vito has laid to rest the
question of whether the enrolled bill doctrine or the journal entry
rule should be adhered to in this jurisdiction, and stated:
“As far as Congress itself is concerned, there is nothing sacrosanct in the
certification made by the presiding officers. It is merely a mode of
authentication. The lawmaking process in Congress ends when the bill is
approved by both Houses, and the certification does not add to the validity
of the bill or cure any defect already present upon its passage. In other
words, it is the approval of Congress and not the signatures of the presiding
officers that is essential. Thus the (1935) Constitution says that ‘[e]very bill
passed by the Congress shall, before it becomes law, be presented to the
President.’ In Brown vs. Morris, supra, the Supreme Court of Missouri,
interpreting a similar provision in the
_______________
37 ISAGANI A. CRUZ, Philippine Political Law, 1991 ed., 226; Daza vs. Singson, 180 SCRA
496 [1989]; Coseteng vs. Mitra, 187 SCRA 377 [1990]; Gonzales vs. Macaraig, 191 SCRA 452
[1990]; Llamas vs. Orbos, 202 SCRA 844 [1991]; Bengzon vs. Senate Blue Ribbon Com- mittee,
203 SCRA 767 [1991]; Oposa vs. Factoran, 224 SCRA 792 [1993].
38 56 SCRA 714, 719, 723 [1974].
39 78 Phil. 1 [1947].
753
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State Constitution, said that the same ‘makes it clear that the
indispensable step in the passage’ and it follows that if a bill, otherwise
fully enacted as a law, is not attested by the presiding officer, other proof
that it has ‘passed both houses will satisfy the constitutional requirement.’
” machinery of the Legislature has malfunctioned from having
Fourth, even in the United States, the enrolled bill doctrine has
been substantially undercut. This is shown in the disquisitions of
Mr. Justice Reynato S. Puno in his dissenting opinion, citing
Sutherland, Statutory Construction.
Last, the pleadings of the parties have established beyond doubt
that HB No. 11197 was not acted on second and third readings in
the Senate and SB No. 1630, which was approved by the Senate on
second and third readings in substitution of SB No. 1129, was never
transmitted to the House for its passage. Otherwise stated, they
were only passed in their respective chamber of origin but not in the
other. In no way can each become a law under paragraph 2, Section
26, Article VI of the Constitution. For the Court to close its eyes to
this fact because of the enrolled bill doctrine is to shirk
40
its duty to
hold “inviolate what is decreed by the Constitution.”
I vote then to GRANT these petitions and to declare R.A. No.
7716 as unconstitutional.
DISSENTING OPINION
ROMERO, J.:
Few issues brought before this Court for resolution have roiled the
citizenry as much as the instant case brought by nine petitioners
which challenges the constitutionality of Republic Act No. 7716 (to
be referred to herein as the “Expanded Value Added Tax” or EVAT
law to distinguish it from Executive Order No. 273 which is the
VAT law proper) that was enacted on May 5, 1994. A visceral issue,
it has galvanized the populace into mass action and strident protest
even as the EVAT proponents have taken to podia and media in a
post facto information campaign.
________________
40 Mutuc vs. COMELEC, 36 SCRA 228 [1970].
754
754 SUPREME COURT REPORTS ANNOTATED
Tolentino vs. Secretary of Finance
The Court is confronted here with an atypical case. Not only is it a
vatful of seething controversy but some unlikely petitioners invoke
unorthodox remedies. Three Senator-petitioners would nullify a
statute that bore the indispensable stamp of approval of their own
Chamber with two of them publicly repudiating what they had
earlier endorsed. With two former colleagues, one of them an
erstwhile Senate President, making common cause with them, they
would stay the implementation by the Executive Department of a
law which they themselves have initiated. They address a prayer to
a co-equal Department to probe their official acts for any procedural
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irregularities they have themselves committed lest the effects of
these aberrations inflict such damage or irreparable loss as would
bring down the wrath of the people on their heads.
To the extent that they perceive that a vital cog in the internal
operated in blatant violation of the enabling Rules they have
themselves laid down, they would now plead that this other Branch
of Government step in, invoking the exercise of what is at once a
delicate and awesome power. Undoubtedly, the case at bench is as
much a test for the Legislature as it is for the Judiciary.
A backward glance on the Value Added Tax (VAT) is in order at
this point.
The first codification of the country’s internal revenue laws was
effected with the enactment of Commonwealth Act No. 466,
commonly known as the ‘National Internal Revenue Code’ which
was approved on June 15, 1939 and took effect on July 1, 1939,
although the provisions on the income tax were made retroactive to
January 1, 1939.
“Since 1939 when the turnover tax was replaced by the
manufacturer’s sales tax, the Tax Code had provided for a single-
stage value-added tax on original sales by manufacturers, producers
and importers computed on the ‘cost deduction method’ and later,
on the basis of the ‘tax credit method.’ The turnover tax was re-
introduced in 1985 by Presidential
1
Decree No. 1991 (as amended by
Presidential Decree No. 2006).”
_______________
1 Vitug, Jose C., COMPENDIUM OF TAX LAW AND JURISPRUDENCE, Third
Revised Edition, 1993 at 201.
755
VOL. 235, AUGUST 25, 1994 755
Tolentino vs. Secretary of Finance
In 1986, a tax reform package was approved by the Aquino Cabinet.
It contained twenty-nine measures, one of which proposed the
adoption of the VAT, as well as the simplification of the sales tax
structure and the abolition of the turnover tax.
“Up until 1987, the system of taxing goods consisted of (a) an
excise tax on certain selected articles (b) fixed and percentage taxes
on original and subsequent sales, on importations and on milled
articles and (c) mining taxes on mineral products. Services2 were
subjected to percentage taxes based mainly on gross receipts.”
On July 25, 1987, President Corazon C. Aquino signed into law
Executive Order No. 273 which adopted the VAT. From the former
single-stage value-added tax, it introduced the multi-stage VAT
system where “the value-added tax is imposed on the sale of and
distribution process culminating in sale, to the final consumer.
Generally described, the taxpayer (the seller) determines his tax
liability by computing the tax on the gross selling price or gross
receipt (“output tax”) and subtracting or crediting the earlier VAT
on the purchase or importation of goods or on the sale of service
3
(“input tax”) against the tax due on his own sale.”
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On January 1, 1988, implementing rules and regulations for the 5 Ibid at 378.
VAT were promulgated. President Aquino then issued Proclamation 6 Ibid at 385.
No. 219 on February 12, 1988 urging the public and private sectors 7 Senate Resolution No. 734 filed on September 10, 1992 was entitled “Resolution
to join the nationwide consumers’ education campaign for VAT. Urging the House Committee on Ways and Means to Study the Proposal to Exempt
Soon after the implementation of Executive Order No. 273, its Local Movie Producers from the Payment of the Value-Added Tax as an Incentive to
constitutionality was assailed before this Court in the case of the Production of Quality and Wholesome Filipino Movies, Whenever They Feature
Kapatiran ng 4
mga Naglilingkod sa Pamahalaan ng Pilipinas, Inc., an All-Filipino Cast of Actors and Actresses.”
et al. v. Tan. The four petitioners sought to nullify the VAT law “for 8 SB No. 1129 sought to include under the VAT Law such items as lease of real
being unconstitutional in that its enactment is not allegedly within properties, excluding agricultural lands and residential properties with monthly
the powers of the President; that the VAT is oppressive, rentals of less than P10,000.00; hotels; restaurants, eating places, caterers; services
discriminatory, regressive, and violates the due process and equal by persons in the exercise of their professions; actors, actresses, talents, singers and
protection clauses and other provisions of the 1987 professional athletes; and lawyers, accountants, doctors and other professionals
registered with the Philippine Regulatory Commission.
_______________
757
2 Ibid.
3 Ibid. VOL. 235, AUGUST 25, 1994 757
4 L-81311, June 30, 1988, 163 SCRA 371 with Justice Teodoro R. Padilla as
Tolentino vs. Secretary of Finance
ponente.
9
756 HB No. 9210 — May 19,
1993
756 SUPREME COURT REPORTS ANNOTATED HB No. 9297 — May 25,
1993
Tolentino vs. Secretary of Finance
HB No. 10012 — July 28,
5 1993
Constitution.” In dismissing the consolidated petitions, this Court
stated: HB No. 10100 — August 3,
1993
“The Court, following the time-honored doctrine of separation of powers
HB No. 11197 in substitution of HB Nos. 253, 771, — November
cannot substitute its judgment for that of the President as to the wisdom, 2450, 10
7033, 8086, 9030, 9210, 9297, 10012 and 5, 1993
justice and advisability of the VAT. The Court can only look into and 10100
determine whether or not Executive Order No. 273 was enacted and made
effective as law, in the manner required by and consistent with, the
We now trace the course taken by H.B. No. 11197 and S.B. No.
Constitution, and to make sure that it was not issued in grave abuse of
1129.
discretion amounting to lack or excess of jurisdiction; and, in this regard,
the Court finds no reason to impede its application or continued HB/SB No.    
6
implementation.”
HB No. 11197 was approved in the Lower House on — November
Although declared constitutional, the VAT law was sought to be second reading 11, 1993
amended from 1992 on by a series of bills filed in both Houses of HB No. 11197 was approved in the Lower House on — November
Congress. In chronological sequence, these were: third reading and voted upon with 114 Yeas and 12 17, 1993
Nays —
HB/SB No.   Date Filed in Congress November
HB No. 253 — July 22, 1992 18, 1993
HB No. 771 — August 10, 1992 HB No. 11197 was transmitted to the Senate Senate — February
Committee on Ways and Means submitted Com. 7, 1994
HB No. 2450 — September 9, 1992 Report No. 349 recommending for approval SB No.
7
Senate Res. No. 734 — September 10, 1992 1630 in substitution of SB No. 1129, taking into 11
consideration PS Res. No. 734 and HB No. 11197
HB No. 7033 — February 3, 1993
8
SB No. 1129 — March 1, 1993
_______________
HB No. 8086 — March 9, 1993
HB No. 9030 — May 11, 1993 9 On June 1, 1993, President Fidel V. Ramos certified for immediate enactment
House Bill No. 9210 entitled “An Act Amending Title IV and Sections 237 and 238 of
the National Internal Revenue Code, as amended, to meet a public emergency.”
_______________

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10 House Bill No. 11197 is entitled “An Act Restructuring the Value-Added Tax
(VAT) System to Widen its Tax Base and Enhance Its Administration, Amending for
these Purposes Sections 99, 100, 102, 103, 104, 105, 106, 107, 108 and 110 of Title
IV, 112, 115 and 116 of Title V, and 236, 237, and 238 of Title IX and Repealing
Sections 113 and 114 of Title V, all of the National Internal Revenue Code, as
Amended.”
11 Senate Bill No. 1630 is entitled “An Act Restructuring The Value-Added Tax
(VAT) System to Widen its Tax Base and Enhance Its Administration, Amending for
these Purposes Sections 99, 100, 102, 103, 104, 105, 107, 108 and 110 of Title IV, 112
of Title V, and 236, 237 and 238 of Title IX, and Repealing Sections 113, 114 and 116
of Title V, all of the National Internal Revenue Code, as Amended, and for other
Purposes.”
758
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Does Republic13 Act No. 7716 violate Article VI, Section 24, of the
Constitution?
________________
12 Republic Act No. 7716 is entitled “An Act Restructuring The Value-Added Tax
(VAT) System, Widening Its Tax Base And Enhancing Its Administration, And For
These Purposes Amending And Repealing The Relevant Provisions Of The National
Internal Revenue Code, as amended, and for other purposes.”
13 Article VI, Section 24: “All appropriation, revenue or tariff bills authorizing
increase of the public debt, bills of local application, and
759

VOL. 235, AUGUST 25, 1994 759

758 SUPREME COURT REPORTS ANNOTATED
Tolentino vs. Secretary of Finance
Tolentino vs. Secretary of Finance
Does it violate
14
Article VI, Section 26, paragraph 2, of the
Certification by President Fidel V. Ramos of Senate Bill — March Constitution?
No. 1630 for immediate enactment to meet a public 22, What is the extent of the power of the Bicameral Conference
emergency 1994 Committee?
SB No. 1630 was approved by the Senate on second and — March
third readings and subsequently voted upon with 13 24, SUBSTANTIVE ISSUES
yeas, none against and one abstention 1994 Does the law violate the following provisions in Article III (Bill of
Transmittal by the Senate to the Lower House of a — March Rights) of the Constitution:
request for a conference in view of disagreeing 24, 15
provisions of SB No. 1630 and HB No. 11197 1994 1. Section 1
16
The Bicameral Conference Committee conducted various — April 2. Section 4
17
meetings to reconcile the proposals on the VAT 13, 3. Section 5
18
19, 4. Section 10
20,
21, 25
_______________
The House agreed on the Conference Committee Report — April
27, private bills shall originate exclusively in the House of Representatives, but the
1994 Senate may propose or concur with amendments.”
The Senate agreed on the Conference Committee Report — May 14 Article VI, Section 26, paragraph 2: “No bill passed by either House shall
2, become a law unless it has passed three readings on separate days, and printed
1994 copies thereof in its final form have been distributed to its Members three days
The President signed12 Republic Act No. 7716—The — May before its passage, except when the president certifies to the necessity of its
Expanded VAT Law 5, immediate enactment to meet a public calamity or emergency. Upon the last reading
1994 of a bill, no amendment thereto shall be allowed, and the vote thereon shall be taken
immediately thereafter, and the yeas and nays entered in the Journal.”
Republic Act No. 7716 was published in two newspapers — May 15 Article III, Section 1: “No person shall be deprived of life, liberty, or property
of general circulation 12,
without due process of law, nor shall any person be denied the equal protection of the
1994
laws.”
Republic Act No. 7716 became effective — May 16 Article III, Section 4: “No law shall be passed abridging the freedom of speech,
28, of expression, or of the press, or the right of the people peaceably to assemble and
1994 petition the government for redress of grievances.”
17 Article III, Section 5: “No law shall be made respecting an establishment of
Republic Act No. 7716 merely expanded the base of the VAT law religion, or prohibiting the free exercise and enjoyment of religious profession and
even as the tax retained its multi-stage character. worship, without discrimination or preference, shall forever be allowed. No religious
At the oral hearing held on July 7, 1994, this Court delimited test shall be required for the exercise of civil or political rights.”
petitioners’ arguments to the following issues culled from their 18 Article III, Section 10: “No law impairing the obligation of contracts shall be
respective petitions. passed.”

PROCEDURAL ISSUES 760

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760 SUPREME COURT REPORTS ANNOTATED
Tolentino vs. Secretary of Finance
Does the law violate the following other provisions of the
Constitution?
19
1. Article VI, Section 28, paragraph 1
20
2. Article VI, Section 28, paragraph 3
As a result of the unedifying experience of the past where the Court
had the propensity to steer clear of questions it perceived to be
“political” in nature, the present Constitution, in contrast, has
explicitly expanded judicial power to include the duty of the courts,
especially the Supreme Court, “to determine whether or not there
has been a grave abuse of discretion amounting to lack or excess of
jurisdiction on21 the part of any branch or instrumentality of the
Government.” I submit that under this explicit mandate, the Court
is empowered to rule upon acts of other Government entities for the
purpose of determining whether there may have been, in fact,
irregularities committed tantamount to violation of the
Constitution, which case would clearly constitute a grave abuse of
discretion on their part.
In the words of the sponsor of the above-quoted Article of the
Constitution on the Judiciary, the former Chief Justice Roberto R.
Concepcion, “the judiciary is the final arbiter on the question of
whether or not a branch of government or any of its officials has
acted without jurisdiction or in excess of jurisdiction, or so
capriciously as to constitute an abuse of discretion amounting to
excess of jurisdiction or lack of jurisdiction. This is not only a
judicial power but a duty to pass judgment on matters of this
nature.
This is the background of paragraph 2 of Section 1, which means
that the courts cannot hereafter exhibit its wonted reticence
_______________
19 Article VI, Section 28, paragraph 1: “The rule of taxation shall be uniform and
equitable. The Congress shall evolve a progressive system of taxation.”
20 Article VI, Section 28, paragraph 3: “Charitable institutions, churches and
parsonages or convents appurtenant thereto, mosques, non-profit cemeteries, and all
lands, buildings, and improvements, actually, directly, and exclusively used for
religious, charitable, or educational purposes shall be exempt from taxation.”
21 Constitution, Article VIII, Section 1.
VOL. 235, AUGUST 25, 1994
Tolentino vs. Secretary of Finance
22
by claiming that such matters constitute a political question.”
In the instant petitions, this Court is called upon, not so much to
exercise its traditional power of judicial review as to determine
whether or not there has indeed been a grave abuse of discretion on
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the part of the Legislature amounting to lack or excess of
jurisdiction.
Where there are grounds to resolve a case without touching on
its constitutionality, the Court will do so with utmost alacrity in
due deference to the doctrine of separation of powers anchored on
the respect that must be accorded to the other branches of
government which are coordinate, coequal and, as far as
practicable, independent of one another.
Once it is palpable that the constitutional issue is unavoidable,
then it is time to assume jurisdiction, provided that the following
requisites for a judicial inquiry are met: that there must be an
actual and appropriate case; a personal and substantial interest of
the party raising the constitutional question; the constitutional
question must be raised at the earliest possible opportunity and the
decision of the constitutional question must be necessary to the
determination
23
of the case itself, the same being the lis mota of the
case.
Having assured ourselves that the above-cited requisites are
present in the instant petitions, we proceed to take them up.
ARTICLE VI, SECTION 24
Some petitioners assail the constitutionality of Republic Act No.
7716 as being in violation of Article VI, Section 24 of the
Constitution which provides:
“All appropriation, revenue or tariff bills, bills authorizing increase of the
public debt, bills of local application, and private bills, shall originate
exclusively in the House of Representatives, but the Senate may propose or
concur with amendments.”
_______________
22 Volume One, CONCOM RECORD, p. 436.
23 Luz Farms v. The Hon. Secretary of the Department of Agrarian Reform, G.R.
No. 86889, December 4, 1990, 192 SCRA 51; Dumlao, et al. v. Commission on
Elections, G.R. No. 52245, January 22, 1980, 95 SCRA 392; People v. Vera, 65 Phil.
56 (1937).
762
762 SUPREME COURT REPORTS ANNOTATED
Tolentino vs. Secretary of Finance
In G.R. Nos. 115455 and 115781, petitioners argue:
761 (a) The bill which became Republic Act No. 7716 did not
originate exclusively in the House of Representatives. The
Senate, after receiving H.B. No. 11197, submitted its own
761
bill, S.B. No. 1630, and proceeded to vote and approve the
same after second and third readings.
(b) The Senate exceeded its authority to “propose or concur with
amendments” when it submitted its own bill, S.B. No. 1630,
recommending its approval “in substitution of S.B. No. 1129,
taking into consideration P.S. Res. No. 734 and H.B. No.
11197.”
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(c) H.B. No. 11197 was not deliberated upon by the Senate.
Neither was it voted upon by the Senate on second and third
readings, as what was voted upon was S.B. No. 1630.
Article VI, Section 24 is taken word for word from Article VI,
Section 18 of the 1935 Constitution which was, in turn, patterned
after Article I, Section 7 (1) of the Constitution of the United States,
which states:
“All bills for raising revenue shall originate in the House of
Representatives, but the Senate may propose or concur with amendments
as on other bills.”
The historical precedent for requiring revenue bills to originate
24
in
Congress is explained in the U.S. case of Morgan v. Murray:
“The constitutional requirement that all bills for raising revenue shall
originate in the House of Representatives stemmed from a remedial
outgrowth of the historic conflict between Parliament (i.e., Commons) and
the Crown, whose ability to dominate the monarchially appointive and
hereditary Lords was patent. See 1 Story, Constitution, S 875 et seq., 5th
Ed.; 1 Cooley, Constitutional Limitations, pp. 267, 268, 8th Ed., 1
Sutherland, Statutory Construction, S 806, 3d Ed. There was a measure of
like justification for the insertion of the provision of articles I, S 7, cl. 1, of
the Federal Constitution. At that time (1787) and thereafter until the
adoption (in 1913) of the Seventeenth Amendment providing for the direct
election of senators, the members of the United States Senate were elected
for each state by the joint vote of both houses of the Legislature of the
respective states, and hence, were removed from the people. x x x”
________________
24 328 P. 2d 644 (1958).
763
VOL. 235, AUGUST 25, 1994 763
Tolentino vs. Secretary of Finance
The legislative authority under the 1935 Constitution being
unicameral, in the form of the National Assembly, it served no
purpose to include the subject provision in the draft submitted by
the 1934 Constitutional Convention to the Filipino people for
ratification.
In 1940, however, the Constitution was amended to establish a
bicameral Congress of the Philippines composed of a House of
Representatives and a Senate.
In the wake of the creation of a new legislative machinery, new
provisions were enacted regarding the law-making power of
Congress. The National Assembly explained how the final
formulation of the subject provision came about:
“The concurrence of both houses would be necessary to the enactment of a
law. However, all appropriation, revenue or tariff bills, bills authorizing an
increase of the public debt, bills of local application, and private bills,
should originate exclusively in the House of Representatives, although the
Senate could propose or concur with amendments.
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In one of the first drafts of the amendments, it was proposed to give both
houses equal powers in lawmaking. There was, however, much opposition
on the part of several members of the Assembly. In another draft, the
following provision, more restrictive than the present provision in the
amendment, was proposed and for sometime was seriously considered:
‘All bills appropriating public funds, revenue or tariff bills, bills of local application,
and private bills shall originate exclusively in the Assembly, but the Senate may
propose or concur with amendments. In case of disapproval by the Senate of any
such bills, the Assembly may repass the same by a two-thirds vote of all its
members, and thereupon, the bill so repassed shall be deemed enacted and may be
submitted to the President for corresponding action. In the event that the Senate
should fail to finally act on any such bills, the Assembly may, after thirty days from
the opening of the next regular sessions of the same legislative term, reapprove the
same with a vote of two-thirds of all the members of the Assembly. And upon such
reapproval, the bill shall be deemed enacted and may be submitted to the president
for corresponding action.’
However, the special committee voted finally to report the present
amending provision as it is now worded; and in that form it was approved
by the National Assembly with the approval of Resolution No.
764
764 SUPREME COURT REPORTS ANNOTATED
Tolentino vs. Secretary of Finance
25
38 and later of Resolution No. 73.” (Italics supplied)
Thus, the present Constitution is identically worded as its 1935
precursor: “All appropriation, revenue or tariff bills, bills
authorizing increase of the public debt, bills of local application, and
private bills, shall originate exclusively in the House of
Representatives, but the Senate may propose or concur with
amendments.” (Italics supplied)
That all revenue bills, such as Republic Act No. 7716, should
“originate exclusively in the House of Representatives” logically
flows from the more representative and broadly-based character of
this Chamber.
“It is said that the House of Representatives being the more
popular branch of the legislature, being closer to the people, and
having more frequent contacts with them than the Senate, should
have the privilege of taking the initiative in the proposals of
revenue and tax projects, the disposal of the people’s money, and
the contracting of public indebtedness.
These powers of initiative in the raising and spending of public
funds enable the House of Representatives not only to implement
but even to determine the fiscal policies of the government. They
place on its shoulders much of the responsibility of solving the
financial problems of the government, which are so closely related
to the economic life of the country, and of deciding on the proper
distribution
26
of revenues for such uses as may best advance public
interests.”
The popular nature of the Lower House has been more
pronounced with the inclusion of Presidentially-appointed sectoral
representatives, as provided in Article VI, Section 5(2), of the
Constitution, thus: “The party-list representatives shall constitute
twenty per centum of the total number of representatives including
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those under the party list. For three consecutive terms after the
ratification of this Constitution, one-half of the seats allocated to
party-list representatives shall be filled, as provided by law, by
________________
25 Aruego, Jose M., PHILIPPINE POLITICAL LAW, KNOW YOUR
CONSTITUTION, University Publishing Co., 1950, pp. 65-66.
26 Sinco, Vicente G., PHILIPPINE POLITICAL LAW, Eleventh Edition, p. 196.
765
VOL. 235, AUGUST 25, 1994 765
Tolentino vs. Secretary of Finance
selection or election from the labor, peasant, urban poor, indigenous
cultural communities, women, youth, and such other sectors as may
be provided by law, except the religious sector.” (Italics supplied)
This novel provision which was implemented in the Batasang
27
Pambansa during the martial law regime was eventually
incorporated in the present Constitution in order to give those from
_______________
27 Remarks of Commissioner Eulogio Lerum: “At a time when we did not have a
lawmaking body after martial law was declared, there were tripartite conferences
called by the President for the purpose of acting as a recommendatory body
regarding settlement of labor and management disputes. During the said
conferences, labor had shown that it can act with maturity. As a result, in 1976, an
amendment was introduced in the Constitution providing for sectoral representation.
In the Constitution that was approved, the number of sectors was not indicated.
However, in the Election Code of 1978, it provided for three sectors; namely,
industrial labor, agricultural labor and the youth. The agricultural labor was given
four seats; two for Luzon, one for the Visayas and one for Mindanao. The same is
true with the industrial labor sector. As far as the youth are concerned, they were
also given four seats: two for Luzon, one for Mindanao and one for the Visayas, with
the condition that there will be an additional two at large. And so, the youth had six
representatives plus four from the agricultural labor sector and four from the
industrial labor sector—we had 14 seats.
In 1981, the Constitution was again amended. In the course of the amendment,
the labor representatives in the Batasang Pambansa proposed that sectoral
representation be included as a permanent addition to the lawmaking body.
Again, in that Constitution which was approved in 1981, the number and the
name of the sectors were not indicated. However, in the Election Code that was
approved before the 1984 election, there was really a definition of who will constitute
the sectors and how they will be appointed. Let me quote from that law that was
passed in 1984. Under Section 27 of Batas Pambansa Blg. 881, the scope of the
sectors has been defined as follows:
The agricultural labor sector covers all persons who personally and physically till
the land as their principal occupation. It includes agricultural tenants and lessees,
rural workers and farm employees, owner-cultivators, settlers and small fishermen.
The industrial labor sector includes all nonagricultural workers and employees.
766
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Tolentino vs. Secretary of Finance
the marginalized and often deprived sector, an opportunity to have
their voices heard in the halls of the Legislature, thus giving
substance and meaning to the concept of “people empowerment.”
That the Congressmen indeed have access to, and consult their
constituencies has been demonstrated often enough by the fact that
even after a House bill has been transmitted to the Senate for
concurrence, some Congressmen have been known to express their
desire to change their earlier official position or reverse themselves
after having heard their constituents’ adverse reactions to their
representations.
In trying to determine whether the mandate of the Constitution
with regard to the initiation of revenue bills has been preserved
inviolate, we have recourse to the tried and tested method of
definition of terms. The term “originate” is defined by Webster’s
New International Dictionary (3rd Edition, 1986) as follows: “v.i., to
come into being; begin; to start.”
On the other hand, the word “exclusively” is defined by the same
Webster’s Dictionary as “in an exclusive manner; to the exclusion of
all others; only; as, it is his, exclusively.” Black’s Law Dictionary
has this definition: “apart from all others; only; solely; substantially
all or for the greater part. To the exclusion of all others; without
admission of others to participation; in a manner to exclude.
Standard Oil Co. of Texas v. State, Tex. Civ. App., 142 S.W. 2d 519,
521, 522, 523.”
This Court had occasion to define the term “exclusive” as follows:
“. . . In its usual and generally accepted sense, the term means possessed to
the exclusion of others; appertaining to the subject alone; not including,
28
admitting or pertaining to another or others; undivided, sole.”
When this writer, during the oral argument of July 7, 1994, asked
the petitioner in G.R. No. 115455 whether he considers the
________________
The youth sector embraces persons not more than twenty-five years of age.”
(Volume Two, CONCOM RECORD, p. 564).
28 City Mayor, et al. v. The Chief, Philippine Constabulary and Col. Nicanor
Garcia, L-20346, October 31, 1967, 21 SCRA 673.
767
VOL. 235, AUGUST 25, 1994 767
Tolentino vs. Secretary of Finance
word “exclusively”
29
to be synonymous with “solely,” he replied in the
affirmative.
A careful examination of the legislative history traced earlier in
this decision shows that the original VAT law, Executive Order No.
273, was sought to be amended by ten House bills which finally
culminated in House Bill No. 11197, as well as two Senate bills. It
is to be noted that the first House Bill No. 253 was filed on July 22,
1992, and two other House bills followed in quick succession on
August 10 and September 9, 1992 before a Senate Resolution,
namely, Senate Res. No. 734, was filed on September 10, 1992 and
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much later, a Senate Bill proper, viz., Senate Bill No. 1129 on ________________
March 1, 1993. Undoubtedly, therefore, these bills originated or had
30 H.B. 771—exempting the sale of copra from VAT coverage; H.B. 2450—
their start in the House and before any Senate bill amending the
exempting the lessors or distributors of cinematographic films from paying the VAT;
VAT law was filed. In point of time and venue, the conclusion is
H.B. 7033—amending Sec. 103 of the National Internal Revenue Code, as amended
ineluctable that Republic Act No. 7716, which is indisputably a
by EO 273; H.B. 8086—exempting packaging materials of export products from the
revenue measure, originated in the House of Representatives in the
VAT; H.B. 9030—amending Sec. 120 of the NIRC, as renumbered by EO 273; H.B.
form of House Bill No. 253, the first EVAT bill.
9210—amending Title IV and Sections 237 and 238 of the NIRC; H.B. 9297—
Additionally, the content and substance of the ten amendatory
restructuring the VAT system by expanding its tax base, and amending Sections 99,
House Bills filed over the roughly one-year period from July 1992 to
100 (A), 102 (A), 103, 113, 114, 115 and 116 of the NIRC; H.B. 10012—reducing the
August 1993 reenforce the position that these revenue bills,
rate of VAT imposed on sale and importation of goods, and sale of services; H.B.
pertaining as they do, to Executive Order No. 273, the prevailing
10100—amending certain provisions of the NIRC on VAT.
VAT law, originated in the Lower House.
31 Explanatory Note of House Bill No. 9210.
32 Excerpts from the April 19, 1994 meeting of the Bicameral Conference
________________
Committee: “CHAIRMAN Javier. First of all, what would be the basis, no, or
framework para huwag naman mawala yung personality namin dito sa bicameral,
29 Transcript of the Stenographic Notes (TSN) on the Hearing Had on Thursday,
no, because the bill originates from the House because this is a revenue bill, so we
July 7, 1994, pp. 18-19: JUSTICE FLERIDA RUTH P. ROMERO:
would just want to ask, we make the House Bill as the frame of reference, and then
Q—Mr. Counsel, may I interrupt at this stage?
769
          When you say that according to the Constitution such Revenue Bills should originate
exclusively from the House. In this instance, did it not originally originate exclusively from the
House? VOL. 235, AUGUST 25, 1994 769
     The word used was not “solely”; if there were Bills later also introduced, let us say in the Tolentino vs. Secretary of Finance
Senate, but the House Bill came ahead.
     So, are you using the two (2) words originate “exclusively” and “solely” synonymously?
As to whether the bills originated exclusively in the Lower House is
SENATOR TOLENTINO: altogether a different matter. Obviously, bills amendatory of VAT
did not originate solely in the House to the exclusion of all others
A—The verb “originate” remains the same, Your Honor, but the word “exclusively,” as I for there were P.S. Res. No. 734 filed in the Senate on September
said, means “solely.” x x x 10, 1992 followed by Senate Bill No. 1129 which was filed on March
1, 1993. About a year later, this was substituted by Senate Bill No.
768
1630 that eventually became the EVAT law, namely, Republic Act
No. 7716.
768 SUPREME COURT REPORTS ANNOTATED Adverting to the passage of the amendatory VAT bills in the
Tolentino vs. Secretary of Finance Lower House, it is to be noted that House Bill No. 11197 which
substituted all the prior bills introduced in said House complied
with the required readings, that is, the first reading consisting of
House Bill Nos. 253, 771, 2450, 7033, 8086, 9030, 9210, 9297, 10012 the reading of the title and referral to the appropriate Committee,
and 10100 were intended to restructure the VAT system by approval on second reading on November 11, 1993 and on third
exempting or imposing the tax on certain items or 30otherwise reading on November 17, 1993 before being finally transmitted to
introducing reforms in the mechanics of implementation. Of these, the Senate. In the Senate, its identity was preserved and its
House Bill No. 9210 was favored with a Presidential certification on provisions were taken into consideration when the Senate
the need for its immediate enactment to meet a public emergency. Committee on Ways and Means submitted Com. Report No. 349
Easily the most comprehensive, it noted that the revenue which recommended for approval “S.B. No 1630 in substitution of
performance of the VAT, being far from satisfactory since the S.B. No. 1129, taking into consideration P.S. Res. No. 734 and H.B.
collections have always fallen short of projections, “the system is No. 11197.” At this stage, the subject bill may be considered to have
rendered inefficient, inequitable and less comprehensive.” Hence, passed first reading in the Senate with the submission of said
the Bill proposed several amendments designed 31
to widen the tax Committee Report No. 349 by the Senate Committee on Ways and
base of the VAT and enhance its administration. Means to which it had been referred earlier. What
That House Bill No. 11197 being a revenue bill, originated from
the Lower House was acknowledged, in fact was virtually taken for
_______________
granted, by the Chairmen of the Committee on Ways and Means of
both the House of Representatives and the Senate. Consequently, at everything will just be inserted?
the April 19, 1994 meeting of the Bicameral Conference Committee,
the Members agreed to make the House Bill as the “frame of “HON. MACEDA. Yes, That’s true for every revenue measure. There’s no other
reference” or “base” of the discussions of the Bicameral Conference way. The House Bill has got to be the base. Of course, for the record, we know that
Committee with
32
the “amendments” or “insertions to emanate from this is an administration bill; this is certified by the president and I was about to
the Senate.” put into the records as I am saying now that your problem about the impact on

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prices on the people was already decided when the President and the VOL. 235, AUGUST 25, 1994 771
administration sent this to us and certified it. They have already gotten over that
Tolentino vs. Secretary of Finance
political implication of this bill and the economic impact on prices.
“CHAIRMAN HERRERA. Yung concern mo about the bill as the reference in
this discussion is something that we can just. . . . attempted to rectify some of the perceived irregularities by
“CHAIRMAN JAVIER. We will just . . . all the amendments will be coming from presenting a motion in the Senate to recall the bill from the
the Senate.” Conference Committee so that it could revert to the 34
period of
amendment, but he was outvoted, in fact “slaughtered.”
770 In accordance with the Rules of the House of Representatives
and the Senate, Republic Act No. 7716 was duly authenticated after
it was signed by the President of the Senate and the Speaker of the
770 SUPREME COURT REPORTS ANNOTATED
House of Representatives followed by the certifications of the
Tolentino vs. Secretary of Finance Secretary of the Senate and the Acting Secretary General of the
35
House of Representatives. With the signature of
remained, therefore, was no longer House Bill No. 11197 but Senate
Bill No. 1630. Thence, the Senate, instead of transmitting the bill to ________________
the Lower House for its concurrence and amendments, if any, took a
“shortcut,” bypassed the Lower House and instead, approved Senate 34 Transcript of the Stenographic Notes (TSN) on the Hearing Had on Thursday,
Bill No. 1630 on both second and third readings on the same day, July 7, 1994, pp. 45-46:
March 24, 1994.
“Justice Romero: Q: Mr. Counsel, is it not a fact that in the Bicameral
The first irregularity, that is, the failure to return Senate Bill
Conference Committee, you presented a Motion to return the Bill as it was to the
No. 1630 to the Lower House for its approval is fatal inasmuch as
Lower House with also your proposal that this be referred to a Referendum for the
the other chamber of legislature was not afforded the opportunity to
entire nation to vote upon, then Senator Wigberto Tañada amended your Motion
deliberate and make known its views. It is no idle dictum that no
and convinced you to drop that portion about referral to a Referendum and you
less than the Constitution ordains: “The legislative power shall be
agreed.
vested in the Congress of the Philippines which shall consist of a
33      So that Motion of yours to return to the House was the one voted upon by the
Senate and a House of Representatives ...” (Italics supplied)
Bicameral Conference Committee and it lost.
It is to be pointed out too, that inasmuch as Senate Bill No. 1630
     What can you say to that?
which had “taken into consideration” House Bill No. 11197 was not
Senator Tolentino: A: No, No, if Your Honor please. My Motion was voted upon
returned to the Lower House for deliberation, the latter Chamber
by the Senate itself because I presented that said motion in order to recall the Bill
had no opportunity at all to express its views thereon or to
from the Bicameral Conference Committee so that the Senate could go back to the
introduce any amendment. The customary practice is, after the
period of amendment and see if we could amend the House Bill itself, but that was
Senate has considered the Lower House Bill, it returns the same to
defeated. So, it became academic. Thus, what we did we proceeded with the
the House of origin with its amendments. In the event that there
procedure already being followed by the Senate.
may be any differences between the two, the same shall then be
          I thought, as a matter of fact, that was the one way of correcting this
referred to a Conference Committee composed of members from
procedural error, but I was only one (1), or two (2), or three (3) of us only, then we
both Chambers which shall then proceed to reconcile said
were defeated in the voting, if Your Honor please.
differences.
Justice Romero: Q: You mean you were outvoted?
In the instant case, the Senate transmitted to the Lower House
Senator Tolentino: A: Yes, Your Honor; we were actually slaughtered in the
on March 24, 1994, a letter informing the latter that it had “passed
voting, so to speak, if Your Honor please.”
S. No. 1630 entitled . . . (and) in view of the disagreeing provisions
of said bill and House Bill No. 11197, entitled . . . the Senate 35 The certification states: “This Act which is a consolidation of House Bill No.
requests a conference . . .” This, in spite of the fact that Com. Report 11197 and Senate Bill No. 1630 was finally passed by the House of Representatives
No. 349 of the Senate Committee on Ways and Means had already and the Senate on April 7, 1994 and May 2, 1994, respectively.”
recommended for approval on February 7, 1994 “S.B. No. 1630 . . .
taking into consideration H.B. No. 11197.” Clearly, the Conference 772
Committee could only have acted upon Senate Bill No. 1630, for
House Bill No. 11197 had already been fused into the former. 772 SUPREME COURT REPORTS ANNOTATED
At the oral hearing of July 7, 1994, petitioner in G.R. No. 115455
admitted, in response to this writer’s query, that he had Tolentino vs. Secretary of Finance

_______________ President Fidel V. Ramos under the words “Approved: 5 May 1994,”
it was finally promulgated.
33 Article VI, Section 1. Its legislative journey ended, Republic Act No. 7716 attained the
status of an enrolled bill which is defined as one “which has been
771
duly introduced, finally passed by both houses, signed by the proper

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officers of each, approved
36
by the governor (or president) and filed by
the secretary of state.”
Stated differently:
“It is a declaration by the two houses, through their presiding officers, to
the president, that a bill, thus attested, has received in due form, the
sanction of the legislative branch of the government, and that it is delivered
to him in obedience to the constitutional requirement that all bills which
pass Congress shall be presented to him. And when a bill, thus attested,
receives his approval, and is deposited in the public archives, its
authentication as a bill that has passed Congress should be deemed
complete and unimpeachable. As the President has no authority to approve
a bill not passed by Congress, an enrolled Act in the custody of the
Secretary of State, and having the official attestations of the Speaker of the
House of Representatives, of the President of the Senate, and of the
President of the United States, carries, on its face, a solemn assurance by
the legislative and executive departments of the government, charged,
respectively, with the duty of enacting and executing the laws, that it was
passed by Congress. The respect due to coequal and independent
departments requires the judicial department to act upon that assurance,
and to accept, as having passed Congress, all bills authenticated in the
manner stated; leaving the courts to determine, when the question properly
arises, whether the Act, so authenticated, is in conformity with the
37
Constitution.”
The enrolled bill assumes importance when there is some variance
between what actually transpired in the halls of Congress, as
reflected in its journals, and as shown in the text of the law as
finally enacted. But suppose the journals of either or both Houses
fail to disclose that the law was passed in accordance with what was
certified to by their respective presiding officers and the President.
Or that certain constitutional requirements regarding its passage
were not observed, as in the instant case.
_______________
36 BLACK’S LAW DICTIONARY, 5th Ed. (1979).
37 Field v. Clark, 143 U.S. 649, 36 L ed. 294.
773
VOL. 235, AUGUST 25, 1994 773
Tolentino vs. Secretary of Finance
Which shall prevail: the journal or the enrolled bill?
A word on the journal.
“The journal is the official record of the acts of a legislative body.
It should be a true record of the proceedings arranged in
chronological order. It should be a record of what is done rather
than what is said. The journal should be a clear, concise,
unembellished statement of all proposals made and all actions
taken complying with all requirements of constitutions, statutes,
charters or rules concerning what is to be recorded and how it is to
38
be recorded.”
Article VI, Section 16 (4) of the Constitution ordains:
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“Each house shall keep a Journal of its proceedings, and from time to time
publish the same, excepting such parts as may, in its judgment, affect
national security; and the yeas and nays on any question shall, at the
request of one-fifth of the Members present, be entered in the Journal.
Each House shall also keep a Record of its proceedings.” (Italics
supplied)
The rationale behind the above provision and of the “journal entry
rule” is as follows:
“It is apparent that the object of this provision is to make the legislature
show what it has done, leaving nothing whatever to implication. And, when
the legislature says what it has done, with regard to the passage of any bill,
it negatives the idea that it has done anything else in regard thereto.
Silence proves nothing where one is commanded to speak. . . . Our
constitution commands certain things to be done in regard to the passage of
a bill, and says that no bill shall become a law unless these things are done.
It seems a travesty upon our supreme law to say that it guaranties to the
people the right to have their laws made in this manner only, and that
there is no way of enforcing this right, or for the court to say that this is
law when the constitution says it is not law. There is one safe course which
is in harmony with the constitution, and that is to adhere to the rule that
the legislature must show, as commanded by the constitution, that it has
done everything required by the constitution to be done in the serious and
important matter of making laws. This is the rule of evidence
_______________
38 Mason, Paul, MASON’s MANUAL OF LEGISLATIVE PROCEDURE, 1953.
774
774 SUPREME COURT REPORTS ANNOTATED
Tolentino vs. Secretary of Finance
provided by the constitution. It is not presumptuous in the courts, nor
disrespectful to the legislature, to judge the acts of the legislature by its
39
own evidence.”
Confronted with a discrepancy between the journal proceedings and
the law as duly enacted, courts have indulged in different theories.
The “enrolled bill” and “journal entry” rules, being rooted deep in
the Parliamentary practices of England where there is no written
constitution, and then transplanted to the United States, it may be
instructive to examine which rule prevails in the latter country
through which, by a process of legislative osmosis, we adopted them
in turn.
“There seems to be three distinct and different rules as applicable to the
enrolled bill recognized by the various courts of this country. The first of
these rules appears to be that the enrolled bill is the ultimate proof and
exclusive and conclusive evidence that the bill passed the legislature in
accordance with the provisions of the Constitution. Such has been the
holding in California, Georgia, Kentucky, Texas, Washington, New Mexico,
Mississippi, Indiana, South Dakota, and may be some others.
The second of the rules seems to be that the enrolled bill is a verity and
resort cannot be had to the journals of the Legislature to show that the
constitutional mandates were not complied with by the Legislature, except
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as to those provisions of the Constitu-tion, compliance with which is
expressly required to be shown on the journal. This rule has been adopted
in South Carolina, Montana, Oklahoma, Utah, Ohio, New Jersey, United
States Supreme Court, and others.
The third of the rules seems to be that the enrolled bill raises only a
prima facie presumption that the mandatory provisions of the Constitution
have been complied with and that resort may be had to the journals to
refute that presumption, and if the constitutional provision is one,
compliance with which is expressly required by the Constitution to be
shown on the journals, then the mere silence of the journals to show a
compliance therewith will refute the presumption. This rule has been
adopted in Illinois, Florida, Kansas, Louisiana, Tennessee, Arkansas,
Idaho, Minnesota, Nebraska, Arizona, Oregon, New Jersey, Colorado, and
40
others.”
_______________
39 Cohn v. Kingsley, 49 P. 985 (1897).
40 Smith v. Thompson, 258 N.W. 190.
775
VOL. 235, AUGUST 25, 1994 775
Tolentino vs. Secretary of Finance
In the 1980 case of D & W Auto Supply v. Department of Revenue,
the Supreme Court of Kentucky which had subscribed in the past to
the first of the three theories, made the pronouncement that it had
shifted its stand and would henceforth adopt the third. It justified
its changed stance, thus:
“We believe that a more reasonable rule is the one which Professor
Sutherland describes as the ‘extrinsic evidence’ rule . . . . Under this
approach there is a prima facie presumption that an enrolled bill is valid,
but such presumption may be over-come by clear satisfactory and
convincing evidence establishing that constitutional requirements have not
41
been met.”
What rule, if any, has been adopted in this jurisdiction?
Advocates 42of the “journal entry rule” cite the 1916 decision in
U.S. v. Pons where this Court placed reliance on the legislative
journals to determine whether Act No. 2381 was passed on
February 28, 1914 which is what appears in the Journal, or on
March 1, 1914 which was closer to the truth. The confusion was
caused by the adjournment sine die at midnight of February 28,
1914 of the Philippine Commission.
A close examination of the decision reveals that the Court did not
apply the “journal entry rule” vis-a-vis the “enrolled bill rule” but
the former as against what are “behind the legislative journals.”
“Passing over the question of whether the printed Act (No. 2381), published
by authority of law, is conclusive evidence as to the date when it was
passed, we will inquire whether the courts may go behind the legislative
journals for the purpose of determining the date of adjournment when such
43
journals are clear and explicit.”
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It is to be noted from the above that the Court “passed over” the
probative value to be accorded to the enrolled bill. Opting for the
journals, the Court proceeded to explain:
________________
41 602 S.W. 2d 420 (1980).
42 34 Phil. 729 (1916).
43 Ibid at 733.
776
776 SUPREME COURT REPORTS ANNOTATED
Tolentino vs. Secretary of Finance
“From their very nature and object, the records of the Legislature are as
important as those of the judiciary, and to inquire into the veracity of the
journals of the Philippine Legislature, when they are, as we have said clear
and explicit, would be to violate both the letter and the spirit of the organic
laws by which the Philippine Government was brought into existence, to
invade a coordinate and independent department of the Government, and
44
to interfere with the legitimate powers and functions of the Legislature.”
Following the courts in the United States since the Constitution of
the Philippine Government is modeled after that of the Federal
Government, the Court did not hesitate to follow the courts in said
country, i.e., to consider the journals decisive of the point at issue.
Thus: “The journals say that the Legislature adjourned at 12
midnight on February 28, 1914. This settles the question 45
and the
court did not err in declining to go behind these journals.”
The Court made a categorical stand for the “enrolled bill 46
rule” for
the first time in the 1947 case of Mabanag v. Lopez Vito where it
held that an enrolled bill imports absolute verity and is binding on
the courts. This Court held itself bound by an authenticated
resolution, despite the fact that the vote of three-fourths of the
Members of the Congress (as required by the Constitution to
approve proposals for constitutional amendments) was not actually
obtained on account of the suspension of some members of the
House of Representatives and the Senate. In this connection, the
Court invoked the “enrolled bill rule” in this wise: “If a political
question conclusively binds the judges out of respect to the political
departments, a duly certified law or resolution also binds the judges
47
under the ‘enrolled bill rule’ born of that respect.”
Mindful that the U.S. Supreme Court is on the side of those who
favor the rule and for no other reason than that it conforms to the
expressed policy of our law making body (i.e., Sec. 313 of the old
Code of Civil Procedure, as amended by Act No. 2210), the Court
said that “duly certified copies shall be conclusive proof of
_______________
44 Ibid at 733-734.
45 Ibid at 735.
46 78 Phil. 1 (1947).
47 Ibid at 3.
777
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VOL. 235, AUGUST 25, 1994 777
Tolentino vs. Secretary of Finance
the provisions of such Acts and of the due enactment thereof.”
Without pulling the legal underpinnings from U.S. v. Pons, it
justified its position by saying that if the Court at the time looked
into the journals, “in all probability, those were the documents
offered in evidence” and that “even if both the journals and
authenticated copy of the Act had been presented, the disposal of
the issue by the Court on the basis of the journals does not imply
rejection of the enrolled theory; for as already stated, the due
enactment of a law may be proved in either of the two 48
ways
specified in Section 313 of Act No. 190 as amended.” Three
Justices voiced their dissent from the majority decision.
Again, the Court made its position plain in the 1963 49
case of
Casco Philippine Chemical Co., Inc. v. Gimenez when a
unanimous Court ruled that: “The enrolled bill is conclusive upon
the courts as regards the tenor of the measure passed by Congress
and approved by the President. If there has been any mistake in the
printing of a bill before it was certified by the officers of Congress
and approved by the Executive, the remedy is by amendment or
curative legislation not by judicial decree.” According to Webster’s
New 20th Century Dictionary, 2nd ed., 1983, the word “tenor”
means, among others, “the general drift of something spoken or
written; intent, purport, substance.”
Thus, the Court upheld the respondent Auditor General’s
interpretation that Republic Act No. 2609 really exempted from the
margin fee on foreign exchange transactions “urea formaldehyde” as
found in the law and not “urea and formaldehyde” which petitioner
insisted were the words contained in the bill and were so intended
by Congress.
In 1969, the Court similarly placed the weight of its authority
behind the conclusiveness of the enrolled bill. In denying the motion
for reconsideration, the Court ruled in Morales v. Subido that “the
enrolled Act in the office of the legislative secretary of the President
of the Philippines shows that Section 10 is exactly as it is in the
statute as officially published in slip form by the Bureau of
Printing. x x x Expressed elsewise, this is a matter worthy of the
attention not of an Oliver Wendell Holmes but of a
_______________
48 Ibid at 18.
49 117 Phil. 363 (1963).
778
778 SUPREME COURT REPORTS ANNOTATED
Tolentino vs. Secretary of Finance
50
Sherlock Holmes.” The alleged omission of a phrase in the final
Act was made, not at any stage of the legislative proceedings, but
only in the course of the engrossment of the bill, more specifically in
the proofreading thereof.
But the Court did include a caveat that qualified the
absoluteness of the “enrolled bill” rule stating:
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“By what we have essayed above we are not of course to be understood as
holding that in all cases the journals must yield to the enrolled bill. To be
sure there are certain matters which the Constitution (Art. VI, secs. 10 [4],
20 [1], and 21 [1]) expressly requires must be entered on the journal of each
house. To what extent the validity of a legislative act may be affected by a
failure to have such matters entered on the journal, is a question which we
do not now decide (Cf. e.g., Wilkes Country Comm’rs. v. Coler, 180 U.S. 506
[1900]). All we hold is that with respect to matters not expressly required to
be entered on the journal, the enrolled bill prevails in the event of any
discrepancy.”
51
More recently, in the 1993 case of Philippine Judges Association v.
52
Prado, this Court, in ruling on the unconstitutionality of Section
35 of Republic Act No. 7354 withdrawing the franking privilege
from the entire hierarchy of courts, did not so much adhere to the
enrolled bill rule alone as to both “enrolled bill and legislative
journals.” Through Mr. Justice Isagani A. Cruz, we stated: “Both
the enrolled bill and the legislative journals certify that the
measure was duly enacted, i.e., in accordance with Article VI, Sec.
26 (2) of the Constitution. We are bound by such official assurances
from a coordinate department of the government, to which we owe,
at the very least, a becoming courtesy.”
Aware of the shifting sands on which the validity and continuing
relevance of the “enrolled bill” theory rests, I have taken pains to
trace the history of its applicability in this jurisdiction, as
influenced in varying degrees by different Federal rulings.
As applied to the instant petition, the issue posed is whether or
not the procedural irregularities that attended the passage of House
Bill No. 11197 and Senate Bill No. 1630, outside of the
_______________
50 136 Phil. 405, 409 (1969).
51 Ibid at 412.
52 G.R. No. 105371, November 11, 1993, 227 SCRA 703.
779
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Tolentino vs. Secretary of Finance
reading and printing requirements which were exempted by the
Presidential certification, may no longer be impugned, having been
“saved” by the conclusiveness on us of the enrolled bill. I see no
cogent reason why we cannot continue to place reliance on the
enrolled bill, but only with respect to matters pertaining to the
procedure followed in the enactment of bills in Congress and their
subsequent engrossment, printing errors, omission of words and
phrases and similar relatively minor matters relating more to form
and factual issues which do not materially alter the essence and
substance of the law itself.
Certainly, “courts cannot claim greater ability to judge
procedural legitimacy, since constitutional rules on legislative
procedure are easily mastered. Procedural disputes are over facts—
whether or not the bill had enough votes, or three readings, or
whatever—not over the meaning of the constitution. Legislators, as
eyewitnesses, are in a better position than a court to rule on the
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facts. The argument is also made that legislatures53
would be
offended if courts examined legislative procedure.
Such a rationale, however, cannot conceivably apply to
substantive changes in a bill introduced towards the end of its
tortuous trip through Congress, catching both legislators and the
public unawares and altering the same beyond recognition even by
its sponsors.
This issue I wish to address forthwith.
EXTENT OF THE POWER OF THE BICAMERAL
CONFERENCE COMMITTEE
One of the issues raised in these petitions, especially in G.R. Nos.
115781, 115543 and 115754, respectively, is whether or not—
“Congress violated Section 26, par. 2, Article VI (of the 1987 Constitution)
when it approved the Bicameral Conference Committee Report which
embodied, in violation of Rule XII of the Rules of the Senate, a radically
altered tax measure containing provisions not reported out or discussed in
either House as well as provisions on which
_______________
53 Davies, Jack, LEGISLATIVE LAW AND PROCESS, 2nd ed., 1986.
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there was no disagreement between the House and the Senate and, worse,
provisions contrary to what the House and the Senate had approved after
54
three separate readings.”
and
“By adding or deleting provisions, when there was no conflicting provisions
between the House and Senate versions, the BICAM acted in excess of its
jurisdiction or with such grave abuse of discretion as to amount to loss of
jurisdiction. x x x In adding to the bill and thus subjecting to VAT, real
properties, media and cooperatives despite the contrary decision of both
Houses, the BICAM exceeded its jurisdiction or acted with such abuse of
55
discretion as to amount to loss of jurisdiction ....”
I wish to consider this issue in light of Article VIII, Sec. 1 of the
Constitution which provides that “(j)udicial power includes the duty
of the courts of justice x x x to determine whether or not there has
been a grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of any branch or instrumentality of the
Government.” We are also guided by the principle that a court may
interfere with the internal 56procedures of its coordinate branch only
to uphold the Constitution.
A conference committee has been defined:
“. . . unlike the joint committee is two committees, one appointed by each
house. It is normally appointed for a specific bill and its function is to gain
accord between the two houses either by the recession of one house from its
bill or its amendments or by the further amendment of the existing
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legislation or by the substitution of an entirely new bill. Obviously, the
conference committee is always a special committee and normally includes
the member who introduced the bill and the chairman of the committee
which considered it together with such other representatives of the houses
as seem expedient. (Horack, Cases and Materials on Legislation [1940] 220.
See also Zinn, Conference Procedure in Congress, 38 ABAJ 864 [1952];
Steiner, The Congressional Conference Committee [U of Ill. Press,
57
1951]).”
________________
54 Petition in G.R. No. 115781, p. 18.
55 Petition in G.R. No. 115543, pp. 2-3.
56 Davies, Jack, supra at 90.
57 Sutherland, J.G., STATUTES AND STATUTORY CONSTRUCTION, Vol. I, 4th
ed., pp. 293-294.
781
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From the foregoing definition, it is clear that a bicameral conference
committee is a creature, not of the Constitution, but of the
legislative body under its power to determine rules of its
proceedings under Article VI, Sec. 16 (3) of the Constitution. Thus,
it draws its life and vitality from the rules governing its creation.
The why, when, how and wherefore of its operations, in other
words, the parameters within which it is to function, are to be found
in Section 26, Rule XII of the Rules of the Senate and Section 85 of
the Rules of the House of Representatives, respectively, which
provide:
Rule XII, Rules of the Senate
“SEC. 26. In the event that the Senate does not agree with the House of
Representatives on the provision of any bill or joint resolution, the
differences shall be settled by a conference committee of both Houses which
shall meet within ten days after their composition.
The President shall designate the members of the conference committee
in accordance with subparagraph (c), Section 8 of Rule III.
Each Conference Committee Report shall contain a detailed and
sufficiently explicit statement of the changes in or amendments to the
subject measure, and shall be signed by the conferees.
The consideration of such report shall not be in order unless the report
has been filed with the Secretary of the Senate and copies thereof have
been distributed to the Members.”
Rules of the House of Representatives
“SEC. 85. Conference Committee Reports.—In the event that the House does
not agree with the Senate on the amendments to any bill or joint
resolution, the differences may be settled by conference committee of both
Chambers.
The consideration of conference committee reports shall always be in
order, except when the journal is being read, while the roll is being called
or the House is dividing on any question. Each of the pages of such reports
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shall contain a detailed, sufficiently explicit statement of the changes in or
amendments to the subject measure.
The consideration of such report shall not be in order unless copies
thereof are distributed to the Members: Provided, That in the last fifteen
days of each session period it shall be deemed sufficient that three copies of
the report, signed as above provided, are deposited in the office of the
Secretary General.”
782
782 SUPREME COURT REPORTS ANNOTATED
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Under these Rules, a bicameral conference committee comes into
being only when there are disagreements and differences between
the Senate and the House with regard to certain provisions of a
particular legislative act which have to be reconciled.
Jefferson’s Manual, which, according to Section 112, Rule XLIX
of the Senate Rules, supplements it, states that a conference
committee is usually called “on the occasion of amendments
between the Houses” and “in all cases of difference of opinion58
between the two Houses on matters pending between them.” It
further states:
“The managers of a conference must confine themselves to the differences
committed to them, and may not include subjects not within the
disagreements, even though germane to a question in issue. But they may
perfect amendments committed to them if they do not in so doing go beyond
the differences. x x x Managers may not change the text to which both
59
Houses have agreed.” (Italics supplied.)
Mason’s Manual of Legislative Procedures which is also considered
as controlling authority
60
for any situation not covered by a specific
legislative rule, states that either House may “request a
conference with the other on any matter of difference or dispute
between them” and that in such a 61
request, “the subject of the
conference should always be stated.”
In the Philippines, as in the United States, the Conference
Committee exercises such a wide range of authority that they
virtually constitute a third House in the Legislature. As admitted
by the Solicitor General, “It was the practice in past Congresses for
Conference Committees to insert in bills approved by the two
Houses62 new provisions that were not originally contemplated by
them.”
In Legislative Procedure, Robert Luce gives a graphic description
of the milieu and the circumstances which have conspired to
________________
58 Page 261.
59 Page 268.
60 Davies, supra, at 65.
61 Sec. 764, p. 541.
62 Consolidated Memorandum for Respondents, p. 71.
783
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Tolentino vs. Secretary of Finance
transform an initially innocuous mechanism designed to facilitate
legislative action into an all-powerful Frankenstein that brooks no
challenge to its authority even from its own members.
“Their power lies chiefly in the fact that reports of conference committees
must be accepted without amendment or else rejected in toto. The impulse
is to get done with the matters and so the motion to accept has undue
advantage, for some members are sure to prefer swallowing unpalatable
provisions rather than prolong controversy. This is the more likely if the
report comes in the rush of business toward the end of a session, when to
seek further conference might result in the loss of the measure altogether.
At any time in the session there is some risk of such a result following the
rejection of a conference report, for it may not be possible to secure a second
conference, or delay may give opposition to the main proposal chance to
develop more strength.
x x x      x x x      x x x
Entangled in a network of rule and custom, the Representative who
resents and would resist this theft of his rights, finds himself helpless.
Rarely can he vote, rarely can he voice his mind, in the matter of any
fraction of the bill. Usually he cannot even record himself as protesting
against some one feature while accepting the measure as whole. Worst of
all, he cannot by argument or suggested change, try to improve what the
other branch has done.
This means more than the subversion of individual rights. It means to a
degree the abandonment of whatever advantage the bicameral system may
have. By so much it in effect transfers the lawmaking power to a small
group of members who work out in private a decision that almost always
prevails. What is worse, these men are not chosen in a way to ensure the
wisest choice. It has become the practice to name as conferees the ranking
members of the committee, so that the accident of seniority determines.
Exceptions are made, but in general it is not a question of who are most
competent to serve. Chance governs, sometimes giving way to favor, rarely
to merit.
x x x      x x x      x x x
Speaking broadly, the system of legislating by conference committee is
unscientific and therefore defective. Usually it forfeits the benefit of
scrutiny and judgment by all the wisdom available. Uncontrolled, it is
inferior to that process by which every amendment is secured independent
63
discussion and vote. x x x.” (Italics supplied)
________________
63 Pages 404-405 and 407.
784
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Not surprisingly has it been said: “Conference Committee action is
the most undemocratic procedure in the 64legislative process; it is an
appropriate target for legislative critics.”
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In the case at bench, petitioners insist that the Conference
Committee to which Senate Bill No. 1630 and House Bill No. 11197
were referred for the purpose of harmonizing their differences,
overreached themselves in not confining their “reconciliation”
function to those areas of disagreement in the two bills but actually
making “surreptitious insertions” and deletions which amounted to
a grave abuse of discretion.
At this point, it becomes imperative to focus on the errant
provisions which found their way into Republic Act No. 7716. Below
is a breakdown to facilitate understanding the grounds for
petitioners’ objections:
INSERTIONS MADE BY BICAMERAL CONFERENCE
COMMITTEE (BICAM) TO SENATE BILL (SB) NO. 1630 AND
HOUSE BILL (HB) NO. 11197
1. Sec. 99 of the National Internal Revenue Code (NIRC)
(1) Under the HB, this section includes any person who, in the
course of trade or business, sells, barters or exchanges goods
OR PROPERTIES and any person who LEASES
PERSONAL PROPERTIES.
(2) The SB completely changed the said section and defined a
number of words and phrases. Also, Section 99-A was added
which included one who sells, exchanges, barters
PROPERTIES and one who imports PROPERTIES.
(3) The BICAM version makes LESSORS of goods OR
PROPERTIES and importers of goods LIABLE to VAT
(subject of petition in G.R. No. 115754).
2. Section 100 (VAT on Sale of Goods)
The term “goods” or “properties” includes the following, which were
not found in either the HB or the SB:
________________
64 Davies, supra, at 81.
785
VOL. 235, AUGUST 25, 1994 785
Tolentino vs. Secretary of Finance
—In addition to radio and television time;
SATELLITE TRANSMISSION AND CABLE
TELEVISION TIME.
—The term “Other similar properties” was deleted,
which was present in the HB and the SB.
—Real properties held primarily for sale to customers
or held for lease in the ordinary course or business
were included, which was neither in the HB nor the
SB (subject of petition in G.R. No. 115754).
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3. Section 102
On what are included in the term “sale or exchange of services,” as
to make them subject to VAT, the BICAM included/inserted the
following (not found in either House or Senate Bills):
1. Services of lessors of property, whether personal or real
(subject of petition in G.R. No. 115754);
2. Warehousing services;
3. Keepers of resthouses, pension houses, inns, resorts;
4. Common carriers by land, air and sea;
5. Services of franchise grantees of telephone and telegraph;
6. Radio and television broadcasting;
7. All other franchise grantees except those under Section 117
of this Code (subject of petition in G.R. No. 115852);
8. Services of surety, fidelity, indemnity, and bonding com-
panies;
9. Also inserted by the BICAM (on page 8 thereof) is the lease
or use of or the right to use of satellite transmission and
cable television time.
4. Section 103 (Exempt Transactions)
The BICAM deleted subsection (f) in its entirety, despite its
inclusion in both the House and Senate Bills. Therefore, under
Republic Act No. 7716, the “printing, publication, importation or
sale of books and any newspaper, magazine, review, or bulletin
which appears at regular intervals with fixed prices for subscription
and sale and which is not devoted principally to the publication of
advertisements” is subject to VAT (subject of petition in G.R. No.
115931 and G.R. No. 115544).
The HB and SB did not touch Subsection (g) but it was amended
by the BICAM by changing the word TEN to FIVE.
786
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Tolentino vs. Secretary of Finance
Thus, importation of vessels with tonnage of more than five
thousand tons is VAT exempt.
Subsection L, which was identical in the HB and the SB that
stated that medical, dental, hospital and veterinary services were
exempted from the VAT was amended by the BICAM by adding the
qualifying phrase: EXCEPT THOSE RENDERED BY
PROFESSIONALS, thus subjecting doctors, dentists and
veterinarians to the VAT.
Subsection U which exempts from VAT “transactions which are
exempt under special laws,” was amended by the BICAM by adding
the phrase: EXCEPT THOSE GRANTED UNDER PD Nos. 66, 529,
972, 1491, AND 1590, AND NON-ELECTRIC COOPERATIVES
UNDER RA 6938 (subject of petition in G.R. No. 115873), not found
in either the HB or the SB, resulting in the inclusion of all
cooperatives to the VAT, except non-electric cooperatives.
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The sale of real properties was included in the exempt
transactions under the House Bill, but the BICAM qualified this
with the provision:
“(S) SALE OF REAL PROPERTIES NOT PRIMARILY HELD FOR SALE
TO CUSTOMERS OR HELD FOR LEASE IN THE ORDINARY COURSE
OF TRADE OR BUSINESS OR REAL PROPERTY UTILIZED FOR LOW-
COST AND SOCIALIZED HOUSING AS DEFINED BY RA NO. 7279
OTHERWISE KNOWN AS THE URBAN DEVELOPMENT AND
HOUSING ACT OF 1992 AND OTHER RELATED LAWS.” (subject of
petition in G.R. No. 115754)
The BICAM also exempted the sale of properties, the receipts of
which are not less than P480,000.00 or more than P720,000.00.
Under the SB, no amount was given, but in the HB it was stated
that receipts from the sale of properties not less than P350,000.00
nor more than P600,000.00 were exempt.
It did not include, as VAT exempt, the sale or transfer of
securities, as defined in the Revised Securities Act (BP 178) which
was contained in both Senate and House Bills.
5. Section 104
Not included in the HB or the SB is the phrase “INCLUDING
PACKAGING MATERIALS” which was inserted by the BICAM
787
VOL. 235, AUGUST 25, 1994 787
Tolentino vs. Secretary of Finance
in Section 104 (A) (1) (B), thus excluding from creditable input tax
packaging materials and the phrase “ON WHICH A VALUE-
ADDED TAX HAS BEEN ACTUALLY PAID” in Section 104 (A) (2).
6. Section 107
Both House and Senate Bills provide for the payment of P500.00
VAT registration fee but this was increased by BICAM to P1,000.00.
7. Section 112
Regarding a person whose sales or receipts are exempt under
Section 103 (w), the BICAM inserted the phrase: “THREE
PERCENT UPON THE EFFECTIVITY OF THIS ACT AND FOUR
PERCENT (4%) TWO YEARS THEREAFTER,” although the SB
and the HB provide only “three percent of his gross quarterly sales.”
8. Section 115
The BICAM adopted the HB version which subjects common
carriers by land, air or water for the transport of passengers to 3%
of their gross quarterly sales, which is not found in the SB.
9. Section 117
The BICAM amended this section by subjecting franchises on
electric, gas and water utilities to a tax of two percent (2%) on gross
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receipts derived x x x, although neither the HB nor the SB has a
similar provision.
10. Section 17 (d)
(a) The BICAM defers for only 2 years the VAT on services of
actors and actresses, although the SB defers it for 3 years.
(b) The BICAM uses the word “EXCLUDE” in the section on
deferment of VAT collection on certain goods and services.
The HB does not contain any counterpart provision and SB
only allows deferment for no longer than 3 years.
788
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11. Section 18 on the Tax Administration Development Fund is
an entirely new provision not contained in the House/Senate
Bills. This fund is supposed to ensure effective
implementation of Republic Act No. 7716.
12. Section 19
No period within which to promulgate the implementing rules and
regulations is found in the HB or the SB but BICAM provided
“within 90 days” which found its way in Republic Act No. 7716.
Even a cursory perusal of the above outline will convince one
that, indeed, the Bicameral Conference Committee (henceforth to be
referred to as BICAM) exceeded the power and authority granted in
the Rules of its creation. Both Senate and House Rules limit the
task of the Conference Committee in almost identical language to
the settlement of differences in the provisions or amendments to
any bill or joint resolution. If it means anything at all, it is that
there are provisions in subject bill, to start with, which differ and,
therefore, need reconciliation. Nowhere in the Rules is it authorized
to initiate or propose completely new matter. Although under
certain rules on legislative procedure, like those in Jefferson’s
Manual, a conference committee may introduce germane matters in
a particular bill, such matters should be circumscribed by the
committee’s sole authority and function to reconcile differences.
Parenthetically, in the Senate and in the House, a matter is
“germane” to a particular bill if there is a common tie between said
matter and the provisions which tend to promote the object and
purpose of the bill it seeks to amend. If it introduces a new subject
matter not
65
within the purview of the bill, then it is not “germane” to
the bill. The test is whether or not the change represented an
amendment or extension of the basic purpose of the original, 66
or the
introduction of an entirely new and different subject matter.
________________
65 See: 18 Words and Phrases 482 citing Kennedy v. Truss, Del. Super., 13 A. 2nd
431, 435, 1 Terry 424 (1940).
66 United States Gypsum Co. v. State, Dept. of Revenue, 110 N.W. 2d 698, 71, 363,
Mich. 548 (1961).
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Tolentino vs. Secretary of Finance
In the BICAM, however, the germane subject matter must be
within the ambit of the disagreement between the two Houses. If
the “germane” subject is not covered by the disagreement but it is
reflected in the final version of the bill as reported by the
Conference Committee or, if what appears to be a67“germane” matter
in the sense that it is “relevant or closely allied” with the purpose
of the bill, was not the subject of a disagreement between the
Senate and the House, it should be deemed an extraneous matter or
even a “rider” which should never be considered legally passed for
not having undergone the three-day reading requirement. Insertion
of new matter on the part of the BICAM is, therefore, an ultra vires
act which makes the same void.
The determination of what is “germane” and what is not may
appear to be a difficult task but the Congress, having been
confronted with the problem before, resolved it in accordance with
the rules. In that case, the Congress approved a Conference
Committee’s insertion of new provisions that were not contemplated
in any of the provisions in question between the Houses simply
because of the provision in Jefferson’s Manual that conferees may
report matters “which are germane modifications of 68 subjects in
disagreement between the Houses and the committee. In other
words, the matter was germane to the points of disagreement
between the House and the Senate.
As regards inserted amendments in the BICAM, therefore, the
task of determining what is germane to a bill is simplified, thus: If
the amendments are not circumscribed by the subjects of
disagreement between the two Houses, then they are not germane
to the purpose of the bill.
In the instant case before us, the insertions and deletions made
do not merely spell an effort at settling conflicting provisions but
have materially altered the bill, thus giving rise to the instant
petitions on the part of those who were caught unawares by the
legislative legerdemain that took place. Going by the definition of
the word “amendment” in Black’s Law Dictionary,
_________________
67 BLACK’s DICTIONARY, 6th ed., p. 687 citing State ex. rel. Riley v. District
Court of Second Judicial Dist. in and for Silver Bow County, 103 Mont. 576, 64 P. 2d
115, 119 (1937).
68 CONGRESSIONAL RECORD, May 3, 1952, p. 885 cited in Orquiola, Annotated
Rules of the Senate, 1991 ed., pp. 40-41.
790 SUPREME COURT REPORTS ANNOTATED
Tolentino vs. Secretary of Finance
5th Ed., 1979, which means “to change or modify for the better; to
alter by modification, deletion, or addition,” said insertions and
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789 deletions constitute amendments. Consequently, these violated
Article VI, Section 26 (2) which provides inter alia: “Upon the last
reading of a bill, no amendment thereto shall be allowed . . .” This
789
proscription is intended to subject all bills and their amendments to
intensive deliberation by the legislators and the ample ventilation
of issues to afford the public an opportunity to express their
opinions or objections issues to afford the public an opportunity to
express their opinions or objections thereon. The same rationale
underlies the three-reading requirement to the end that no surpises
may be sprung on an unsuspecting citizenry.
Provisions of the “now you see it, now you don’t” variety,
meaning those which were either in the House and/or Senate
versions but simply disappeared or were “bracketed out” of
existence in the BICAM Report, were eventually incorporated in
Republic Act No. 7716. Worse, some goods, properties or services
which were not covered by the two versions and, therefore, were
never intended to be so covered, suddenly found their way into the
same Report. No advance notice of such insertions prepared the rest
of the legislators, much less the public who could be adversely
affected, so that they could be given the opportunity to express their
views thereon. Well has the final BICAM report been described,
therefore, as an instance of “taxation without representation.”
That the conferees or delegates in the BICAM representing the
two Chambers could not possibly be charged with bad faith or
sinister motives or, at the very least, unseemly behavior, is of no
moment. The stark fact is that items not previously subjected to the
VAT now fell under its coverage without interested sectors or
parties having been afforded the opportunity to be heard thereon.
This is not to say that the Conference Committee Report should
have undergone the three readings required in Article VI, Section
26(2), for this clearly refers only to bills which, after having been
initially filed in either House, negotiated the labyrinthine passage
therein until its approval. The composition of the BICAM including
as it usually does, the Chairman of the appropriate Committee, the
sponsor of the bill and other interested members ensures an
informed discussion, at least with respect to the disagreeing
provisions. The same does not obtain as regards completely new
791
VOL. 235, AUGUST 25, 1994 791
Tolentino vs. Secretary of Finance
matter which suddenly spring on the legislative horizon.
It has been pointed out that such extraneous matters
notwithstanding, all Congressmen and Senators were given the
opportunity to approve or turn down the Committee Report in toto,
thus “curing” whatever defect or irregularity it bore. Earlier in this
790 opinion, I explained that the source of the acknowledged power of
this ad hoc committee stems from the precise fact that, the
meetings, being scheduled “take it or leave it” basis. It has not been
uncommon for legislators who, for one reason or another have been
frustrated in their attempt to pass a pet bill in their own chamber,
to work for its passage in the BICAM where it may enjoy a more
hospitable reception and faster approval. In the instant case, had
there been full, open and unfettered discussion on the bills during
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the Committee sessions, there would not have been as much
vociferous objections on this score. Unfortunately, however, the
Committee held two of the five sessions behind closed doors, sans
stenographers, record-takers and interested observers. To that
extent, the proceedings were shrouded in mystery and the public’s
right to information 69on matters of public concern as enshrined in
Article III, Section 7 and the government’s policy of transparency
in transactions involving
70
public interest in Article II, Section 28 of
the Constitution are undermined.
Moreover, that which is void ab initio such as the objectionable
provisions in the Conference Committee Report, cannot be “cured”
or ratified. For all intents and purposes, these never existed. Quae
ab initio non valent, ex post facto convalescere non possunt. Things
that are invalid from the beginning are not made valid by a
subsequent act.
________________
69 Article III, Section 7. “The right of the people to information on matters of
public concern shall be recognized. Access to official records, and to documents, and
papers pertaining to official acts, transactions, or decisions, as well as to government
research data used as basis for policy development, shall be afforded the citizen,
subject to such limitations as may be provided by law.”
70 Article II, Section 28. “Subject to reasonable conditions prescribed by law, the
State adopts and implements a policy of full public disclosure of all its transactions
involving public interest.”
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Should this argument be unacceptable, the “enrolled bill” doctrine,
in turn, is invoked to support the proposition that the certification
by the presiding officers of Congress, together with the signature of
the President, bars further judicial inquiry into the validity of the
law. I reiterate my submission that the “enrolled bill ruling” may be
applicable but only with respect to questions pertaining to the
procedural enactment, engrossment, printing, the insertion or
deletion of a word or phrase here and there, but would draw a
dividing line with respect to substantial substantive changes, such
as those introduced by the BICAM herein.
We have before us then the spectacle of a body created by the two
Houses of Congress for the very limited purpose of settling
disagreements in provisions between bills emanating therefrom,
exercising the plenary legislative powers of the parent chambers
but holding itself exempt from the mandatory constitutional
requirements that are the hallmarks of legislation under the aegis
of a democratic political system. From the initial filing, through the
three readings which entail detailed debates and discussions in
Committee and plenary sessions, and on to the transmittal to the
other House in a repetition of the entire process to ensure
exhaustive deliberations—all these have been skipped over. In the
proverbial twinkling of an eye, provisions that probably may not
have seen the light of day had they but run their full course through
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the legislative mill, sprang into existence and emerged full-blown
laws.
Yet our Constitution vests the legislative power in “the Congress
of the Philippines which71
shall consist of a Senate and a House of
Representatives . . . .” and not in any special, standing or super
committee of its own creation, no matter that these have been
described, accurately enough, as “the eye, the ear, the hand, and
very often the brain of the house.”
Firstly, that usage or custom has sanctioned this abbreviated, if
questionable, procedure does not warrant its being legitimized and
perpetuated any longer. Consuetudo, contra rationem introducta,
potius usurpatio quam consuetudo appellari debet. A custom against
reason is rather an usurpation. In the hierarchy
_______________
71 Article VI, Section 1.
793
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Tolentino vs. Secretary of Finance
of sources of legislative procedure, constitutional rules, statutory
provisions and adopted rules (as for example, the Senate and House
Rules), rank highest, certainly much ahead of customs and usages.
Secondly, is this Court to assume the role of passive spectator or
indulgent third party, timorous about exercising its power or more
importantly, performing its duty, of making a judicial
determination on the issue of whether there has been grave abuse
of discretion by the other branches or instrumentalities of
government, where the same is properly invoked? The time is past
when the Court was not loathe to raise the bogeyman of the
political question to avert a head-on collision with either the
Executive or Legislative Departments. Even the separation of
powers doctrine was burnished to a bright sheen as often as it was
invoked to keep the judiciary within bounds. No longer does this
condition obtain. Article VIII, Section 2 of the Constitution partly
quoted in this paragraph has broadened the scope of judicial
inquiry. This Court can now safely fulfill its mandate of delimiting
the powers of co-equal departments like the Congress, its officers or
its committees which may have no compunctions about exercising
legislative powers in full.
Thirdly, dare we close our eyes to the presumptuous assumption
by a runaway committee of its progenitor’s legislative powers in
derogation of the rights of the people, in the process, subverting the
democratic principles we all are sworn to uphold, when a proper
case is made out for our intervention? The answers to the above
queries are self-evident.
I call to mind this exhortation: “We are sworn to see that
violations of the constitution—by any person, corporation, state
agency or branch of government—are brought to light and
corrected. To countenance an artificial rule of law that silences our
voices when confronted with 72
violations of our Constitution is not
acceptable to this Court.”
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I am not unaware that a rather recent decision of ours brushed
aside an argument that a provision in subject law regarding the
withdrawal of the franking privilege from the petitioners and this
Court itself, not having been included in the original version
_______________
72 D & W Auto Supply v. Department of Revenue, supra.
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794 SUPREME COURT REPORTS ANNOTATED
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of Senate Bill No. 720 or of House Bill No. 4200 but only in the
Conference Committee Report, was violative of Article VI, Section
26 (2) of the Constitution. Likewise, that said Section 35, never
having been a subject of disagreement between both Houses, could
not have been validly added as an amendment before the
Conference Committee.
The majority opinion in said case explained:
“While it is true that a conference committee is the mechanism
for compromising differences between the Senate and the House, it
is not limited in its jurisdiction to this question. Its broader function
is described thus:
‘A conference committee may deal generally with the subject matter or it
may be limited to resolving the precise differences between the two houses.
Even where the conference committee is not by rule limited in its
jurisdiction, legislative custom severely limits the freedom with which new
subject matter can be inserted into the conference bill. But occasionally a
conference committee produces unexpected results, results beyond its
mandate. These excursions occur even where the rules impose strict
limitations on conference committee jurisdiction. This is symptomatic of the
authoritarian power of conference committee (Davies, Legislative Law and
73
Process: In a Nutshell, 1986 Ed., p. 81).’ ” (Italics supplied)
At the risk of being repetitious, I wish to point out that the general
rule, as quoted above, is: “Even where the conference committee is
not by rule limited in its jurisdiction, legislative custom severely
limits the freedom with which new subject matter can be inserted
into the conference bill.” What follows, that is, “occasionally a
conference committee produces unexpected results, results beyond
its mandate . . .” is the exception. Then it concludes with a
declaration that: “This is symptomatic of the authoritarian power of
conference committee.” Are we about to reinstall another institution
that smacks of authoritarianism which, after our past experience,
has become anathema to the Filipino people?
The ruling above can hardly be cited in support of the proposition
that a provision in a BICAM report which was not
________________
73 The Philippine Judges Association v. Hon. Pete Prado, G.R. No. 105371,
November 11, 1993, 227 SCRA 703, 709.
795
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the subject of differences between the House and Senate versions of
a bill cannot be nullified. It submits that such is not authorized in
our Basic Law. Moreover, this decision concerns merely one
provision whereas the BICAM Report that culminated in the EVAT
law has a wider scope as it, in fact, expanded the base of the
original VAT law by imposing the tax on several items which were
not so covered prior to the EVAT.
One other flaw in most BICAM Reports, not excluding this one
under scrutiny, is that, hastily drawn up, it often fails to conform to
the Senate and House Rules requiring no less than a “detailed” and
“sufficiently explicit statement of the changes in or amendments to
the subject measure.” The Report of the committee, as may be
gleaned from the preceding pages, was no more than the final
version of the bill as “passed” by the BICAM. The amendments or
subjects of dissension, as well as the reconciliation made by the
committee, are not even pointed out, much less explained therein.
It may be argued that legislative rules of procedure may properly
be suspended,74
modified, revoked or waived at will by the legislators
themselves. This principle, however, does not come into play in
interpreting what the record of the proceedings shows was, or was
not, done. It is rather designed to test the validity of legislative
action where the record shows 75
a final action in violation or
disregard of legislative rules. Utilizing the Senate and the House
Rules as both guidelines and yardstick, the BICAM here obviously
did not adhere to the rule on what the Report should contain.
Given all these irregularities that have apparently been
engrafted into the BICAM system, and which have been tolerated, if
not accorded outright acceptance by everyone involved in or
conversant with, the institution, it may be asked: Why not leave
well enough alone?
_________________
74 In Osmeña, Jr. v. Pendatun, (109 Phil. 863 [1960]), the Court held that
parliamentary rules are merely procedural and they may be waived or disregarded
by the legislative body. Hence, mere failure to conform to parliamentary usage will
not invalidate the action taken by a deliberative body when the requisite number of
members have agreed to a particular measure.
75 State v. Essling, 128 N.W. 2d 307, 316 (1964).
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That these practices have remained unchallenged in the past does
not justify our closing our eyes and turning a deaf ear to them. Writ
large is the spectacle of a mechanism ensconced in the very heart of
the people’s legislative halls, that now stands indicted with the
charge of arrogating legislative powers unto itself through the use
of dubious “shortcuts.” Here, for the people to judge, is the “mother
of all shortcuts.”
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In the petitions at bench, we are confronted with the enactment
of a tax law which was designed to broaden the tax base. It is rote
learning for any law student that as an attribute of sovereignty, the76
power to tax is “the strongest of all the powers of government.”
Admittedly, “for all its plenitude,
77
the power to tax is not unconfined.
There are restrictions.” Were there none, then the oft-quoted 1803
dictum of Chief Justice
78
Marshall that “the power to tax involves the
power to destroy” would be a truism. Happily, we can concur with,
and the people can find comfort in, the reassuring words of Mr.
Justice Holmes:79“The power to tax is not the power to destroy while
this Court sits.”
Manakanakâ, mayroóng dumudulóg dito sa Kátaastaasang
Hukuman na may kamangha-mangháng hinaíng. Angkóp na
halimbawà ay ang mga petisyóng iniharáp ngayón sa amin.
Ang ilán sa kanilá ay mga Senadór na nais mapawaláng bisà ang
isáng batás ukol sa buwís na ipinasá mismo nilá. Diumanó itó ay
hindî tumalima sa mga itinatadhana ng Sáligang Batás. Bukód sa
rito, tutol silá sa mga bagong talatà na isiningit ng “Bicameral
Conference Committee” na nagdagdág ng mga bagong bagay bagay
at serbisyo na papatawan ng buwís. Ayon sa kanilá, ginampanán ng
komiténg iyán ang gawain na nauukol sa buóng Kongreso. Kung
kayá’t ang nararapat na mangyari ay ihatol ng Kátaastaasang
Hukuman na malabis na pagsasamantala sa sariling pagpapasiyá
ang ginawâ ng Kongreso.
Bagamá’t bantulót kamíng makialám sa isáng kapantáy na
sangáy ng Pamahalaán, hindî naman nararapat na kamí ay
________________
76 Sarasola v. Trinidad, 40 Phil. 252, 262 (1919).
77 Sison, Jr. v. Ancheta, L-59431, July 25, 1984, 130 SCRA 654, 660.
78 McCullock v. Maryland, 4 Wheaton 316.
79 Quoted in Graves. v. New York, 306 U.S. 466, 490.
797
VOL. 235, AUGUST 25, 1994 797
Tolentino vs. Secretary of Finance
tumanggíng gampanán ang tungkulin na iniatas sa amin ng
Saligang Batas. Lalu’t-lalò nang ang batás na kinauukulan ay
maaaring makapinsalá sa nakararami sa sambayanán.
Sa ganang akin, itong batas na inihaharap sa amin ngayón, ay
totoóng labág sa Saligang Batás, samakatuwíd ay waláng bisà.
Nguni’t itó ay nauukol lamang sa mga katiwalián na may
kinalaman sa paraán ng pagpapasabatás nitó. Hindî namin
patakarán ang makialám o humadláng sa itinakdáng gawain ng
Saligang Batás sa Pangulò at sa Kongreso. Ang dalawáng sangáy
na iyán ng Pamahalaán ang higít na maalam ukol sa kung ang
anumáng panukalang batás ay nararapat, kanais-nais o
magagampanán; kung kayá’t hindî kamí nararapat na maghatol o
magpapasiyá sa mga bagay na iyán. Ang makapapataw ng angkop
na lunas sa larangan na iyán ay ang mismong mga kinatawán ng
sambayanán sa Kongreso.
Faced with this challenge of protecting the rights of the people by
striking down a law that I submit is unconstitutional and in the
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process, checking the wonted excesses of the Bicameral Conference
Committee system, I see in this case a suitable vehicle to discharge
the Court’s Constitutional mandate and duty of declaring that there
has indeed been a grave abuse of discretion amounting to lack or
excess of jurisdiction on the part of the Legislature.
Republic Act No. 7716, being unconstitutional and void, I find no
necessity to rule on the substantive issues as dealt with in the
majority opinion as they have been rendered moot and academic.
These issues pertain to the intrinsic merits of the law. It is
axiomatic that the wisdom, desirability and advisability of enacting
certain laws lie, not within the province of the Judiciary but that of
the political departments, the Executive and the Legislative. The
relief sought by petitioners from what they perceive to be the harsh
and onerous effect of the EVAT on the people is within their reach.
For Congress, of which Senator-petitioners are a part, can furnish
the solution by either repealing or amending the subject law.
For the foregoing reasons, I VOTE to GRANT the petition.
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DISSENTING OPINION
BELLOSILLO, J.:
With a consensus already reached after due deliberations, silence
perhaps should be the better part of discretion, except to vote. The
different views and opinions expressed are so persuasive and
convincing; they are more than enough to sway the pendulum for or
against the subject petitions. The penetrating and scholarly
dissertations of my brethren should dispense with further
arguments which may only confound and confuse even the most
learned of men.
But there is a crucial point, a constitutional issue which, I
submit, has been belittled, treated lightly, if not almost considered
insignificant and purposeless. It is elementary, as much as it is
fundamental. I am referring to the word “exclusively” appearing in
Sec. 24, Art. VI, of our 1987 Constitution. This is regrettable, to say
the least, as it involves a constitutional mandate which, wittingly or
unwittingly, has been cast aside as trivial and meaningless.
A comparison of the particular provision on the enactment of
revenue bills in the U.S. Constitution with its counterpart in the
Philippine Constitution will help explain my position.
Under the U.S. Constitution, “[a]ll bills for raising revenue shall
originate in the House of Representatives; but the Senate may
propose or concur with amendments as on other bills” (Sec. 7, par.
[1], Art. I). In contrast, our 1987 Constitution reads: “All
appropriation, revenue or tariff bills, bills authorizing increase of
the public debt, bills of local application, and private bills shall
originate exclusively in the House of Representatives, but the
Senate may propose or concur with amendments” (Sec. 24, Art. VI;
italics supplied).
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As may be gleaned from the pertinent provision of our
Constitution, all revenue bills are required to originate “exclusively”
in the House of Representatives. On the other hand, the U.S.
Constitution does not use the word “exclusively”; it merely says,
“[a]ll bills for raising revenue shall originate in the House of
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VOL. 235, AUGUST 25, 1994 799
Tolentino vs. Secretary of Finance
Representatives.”
Since the term “exclusively” has already been adequately defined
in the various opinions, as to which there seems to be no dispute, I
shall no longer offer my own definition.
Verily, the provision in our Constitution requiring that all
revenue bills shall originate exclusively from the Lower House is
mandatory. The word “exclusively” is an “exclusive word,” 1
which is
indicative of an intent that the provision is mandatory. Hence, all
American authorities expounding on the meaning and application of
Sec. 7, par. (1), Art. I, of the U.S. Constitution cannot be used in the
interpretation of Sec. 24, Art. VI, of our 1987 Constitution which
has a distinct feature of “exclusiveness” all its own. Thus, when our
Constitution absolutely requires—as it is mandatory—that a
particular bill should exclusively emanate from the Lower House,
there is no alternative to the requirement that the bill to become
valid law must originate exclusively from that House.
In the interpretation of constitutions, questions frequently arise
as to whether particular sections are mandatory or directory. The
courts usually hesitate to declare that a constitutional provision is
directory merely in view of the tendency of the legislature to
disregard provisions which are not said to be mandatory.
Accordingly, it is the general rule to regard constitutional
provisions as mandatory, and not to leave any discretion to the will
of the legislature to obey or disregard them. This presumption as to
mandatory quality is usually followed unless it is unmistakably
manifest that the provisions are intended to be merely directory. So
strong is the inclination in favor of giving obligatory force to the
terms of the organic law that it has even been said that neither by
the courts nor by any other department of the government may any
provision of the Constitution be regarded as merely directory, but
that each and everyone of its provisions should be treated as
imperative and mandatory, without reference to the rules and 2
distinguishing between the directory and the mandatory statutes.
The framers of our 1987 Constitution could not have used the
term “exclusively” if they only meant to replicate and adopt in
_______________
1 See McGee v. Republic, 94 Phil. 821 (1954).
2 See Tañada v. Cuenco , 103 Phil. 1051 (1957).
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toto the U.S. version. By inserting “exclusively” in Sec. 24, Art. VI of
our Constitution, their message is clear: they wanted it different,
strong, stringent. There must be a compelling reason for the
inclusion of the word “exclusively,” which cannot be an act of
retrogression but progression, an improvement on its precursor.
Thus,”exclusively” must be given its true meaning, its purpose
observed and virtue recognized, for it could not have been conceived
to be of minor consequence. That construction is to be sought which
gives effect to the whole of the statute—its every word. Ut magis
valeat quam pereat.
Consequently, any reference to American authorities, decisions
and opinions, however wisely and delicately put, can only mislead
in the interpretation of our own Constitution. To refer to them in
defending the constitutionality of R.A. 7716, subject of the present
petitions, is to argue on a false premise, i.e., that Sec. 24, Art. VI of
our 1987 Constitution is, or means exactly, the same as Sec. 7, par.
(1), Art. I of the U.S. Constitution, which is not correct. Hence, only
a wrong conclusion can be drawn from a wrong premise.
For example, it is argued that in the United States, from where
our own legislature is patterned, the Senate can practically
substitute its own tax measure for that of the Lower House. Thus,
according to the Majority, citing an American case, “the validity of
Sec. 37 which the Senate had inserted in the Tariff Act of 1909 by
imposing an ad valorem tax based on the weight of vessels, was
upheld against the claim that the revenue bill originated in the3
Senate in contravention of Art. I, Sec. 7, of the U.S. Constitution.”
In an effort to be more convincing, the Majority even quotes the
footnote in Introduction to American Government by F.A. Ogg and
P.O. Ray which reads—
Thus in 1883 the upper house struck out everything after the enacting
clause of a tariff bill and wrote its own measure, which the House
eventually felt obliged to accept. It likewise added 847 amendments to the
Payne-Aldrich tariff act of 1909, dictated the schedules of the emergency
tariff act of 1921, rewrote an extensive tax revision bill in the same year,
and recast most of the permanent tariff
________________
3 See Majority Opinion, p. 15, citing Rainey v. United States, 232 U.S., 309, 58 Law Ed. 617.
801
VOL. 235, AUGUST 25, 1994 801
Tolentino vs. Secretary of Finance
4
bill of 1922 —
which in fact suggests, very clearly, that the subject revenue bill
actually originated from the Lower House and was only amended,
perhaps considerably, by the Senate after it was passed by the
former and transmitted to the latter.
In the cases cited, where the statutes passed by the U.S.
Congress were upheld, the revenue bills did not actually originate
from the Senate but, in fact, from the Lower House. Thus, the
Supreme Court of the United States, speaking through Chief
5
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5
Justice White in Rainey v. United States upheld the revenue bill out HB No. 11197, as amended, even if in the amendment it took
passed by Congress and adopted the ruling of the lower court that— into consideration SB No. 1630. It should not have submitted to the
Bicameral Conference Committee SB No. 1630 which, admittedly,
x x x the section in question is not void as a bill for raising revenue did not originate exclusively from the Lower House.
originating in the Senate and not in the House of Representatives. It But even assuming that in our jurisdiction a revenue bill of the
appears that the section was proposed by the Senate as an amendment to a Lower House may be amended by substitution by the Senate—
bill for raising revenue which originated in the House. That is sufficient. although I am not prepared to accept it in view of Sec. 24, Art. VI, of
6 our Constitution—still R.A. 7716 could not have been the result of
Flint v. Stone Tracy Co., on which the Solicitor General heavily
amendment by substitution since the Senate had no House bill to
leans in his Consolidated Comment as well as in his Memorandum,
speak of that it could amend when the Senate started deliberating
does not support the thesis of the Majority since the subject bill
on its own version.
therein actually originated from the Lower House and not from the
Be that as it may, I cannot rest easy on the proposition that a
Senate, and the amendment merely covered a certain provision in
constitutional mandate calling for the exclusive power and
the House bill.
prerogative of the House of Representatives may just be discarded
In fine, in the cases cited which were lifted from American
and ignored by the Senate. Since the Constitution is for the
authorities, it appears that the revenue bills in question actually
observance of all—the judiciary as well as the other departments of
originated from the House of Representatives and were amended by
government—and the judges are sworn to support its provisions,
the Senate only after they were transmitted to it. Perhaps, if the
the courts are not at liberty to overlook or disregard its commands.
factual circumstances in those cases were exactly the same as the
And it is not fair and just to impute to them undue interference if
ones at bench, then the subject revenue or tariff bill may be upheld
in this jurisdiction on the principle of substantial compliance, as 803
they were in the United States, except possibly in instances where
the House bill undergoes what is now referred to as “amendment by
substitution,” for that would be in derogation VOL. 235, AUGUST 25, 1994 803
Tolentino vs. Secretary of Finance
_______________
they look into the validity of legislative enactments to determine
4 Id., citing F.A. Ogg and P.O. Ray, Introduction to American Government, 302, n.
whether the fundamental law has been faithfully observed in the
2 (1945).
process. It is their duty to give effect to the existing Constitution
5 See Note 3.
and to obey all constitutional provisions irrespective of their opinion
6 22 U.S. 107.
as to the wisdom of such provisions.
802 The rule is fixed that the duty in a proper case to declare a law
unconstitutional cannot be declined and must be performed in
accordance with the deliberate judgment of the tribunal before
802 SUPREME COURT REPORTS ANNOTATED which the validity of the enactment is directly drawn into question.
Tolentino vs. Secretary of Finance When it is clear that a statute transgresses the authority vested in
the legislature by the Constitution, it is the duty of the courts to
declare the act unconstitutional because they cannot shirk from it
of our Constitution which vests solely in the House of
without violating their oaths of office. This duty of the courts to
Representatives the power to initiate revenue bills. A Senate
maintain the Constitution as the fundamental law of the state is
amendment by substitution simply means that the bill in question
imperative and unceasing; and, as Chief Justice Marshal said,
did not in effect originate from the lower chamber but from the
whenever a statute is in violation of the fundamental law, the
upper chamber and now disguises itself as a mere amendment of
courts must so adjudge and thereby give effect to the Constitution.
the House version.
Any other course would lead to the destruction of the Constitution.
It is also theorized that in the U.S., amendment by substitution
Since the question as to the constitutionality of a statute is a
is recognized. That may be true. But the process may be validly
judicial matter, the courts will not decline the exercise of
effective only under the U.S. Constitution. The cases before us
jurisdiction upon the suggestion that action might be taken by
present a totally different factual backdrop. Several months before
political agencies in disregard of the judgment of the judicial
the Lower House could even pass HB No. 11197, P.S. Res. No. 734 7
tribunals.
and SB No. 1129 had already been filed in the Senate. Worse, the
It is my submission that the power and authority to originate
Senate subsequently approved SB No. 1630 “in substitution of SB
revenue bills under our Constitution is vested exclusively in the
No. 1129, taking into consideration P.S. Res. No. 734 and HB No.
House of Representatives. Its members being more numerous than
11197,” and not HB No. 11197 itself “as amended.” Here, the Senate
those of the Senate, elected more frequently, and more directly
could not have proposed or concurred with amendments because
represent the people, are therefore considered better aware of the
there was nothing to concur with or amend except its own bill. It
economic life of their individual constituencies. It is just proper that
must be stressed that the process of concurring or amending
revenue bills originate exclusively from them.
presupposes that there exists a bill upon which concurrence may be
based or amendments introduced. The Senate should have reported
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In this regard, we do not have to devote much time delving into
American decisions and opinions and invoke them in the
interpretation of our own Constitution which is different from the
American version, particularly on the enactment of revenue bills.
We have our own Constitution couched in a language our own
legislators thought best. Insofar as revenue bills are concerned, our
Constitution is not American; it is distinctively
_______________
7 11 Am. Jur., pp. 712-13, 713-715.
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Filipino. And no amplitude of legerdemain can detract from our
constitutional requirement that all appropriation, revenue or tariff
bills, bills authorizing increase of the public debt, bills of local
application, and private bills shall originate exclusively in the
House of Representatives, although the Senate may propose or
concur with amendments.
In this milieu, I am left no option but to vote to grant the
petitions and strike down R.A. 7716 as unconstitutional.
DISSENTING OPINION
PUNO, J.:
Petitioners plead that we affirm the self-evident proposition that
they who make law should not break the law. There are many evils
whose elimination can be trusted to time. The evil of lawlessness in
lawmaking cannot. It must be slain on sight for it subverts the
sovereignty of the people.
First, a fast snapshot of the facts. On November 17, 1993, the
House of Representatives passed on third reading House Bill (H.B.)
No. 11197 entitled “An Act Restructuring the Value Added Tax
(VAT) System to Widen its Tax Base and Enhance its
Administration, Amending for These Purposes Sections 99, 100, 102
to 108 and 110 of Title V and 236, 237 and 238 of Title IX, and
Repealing Sections 113 and 114 of Title V, all of the National
Internal Revenue Code as Amended.” The vote was 114 Yeas and 12
Nays. The next day, November 18, 1993, H.B. No. 11197 was
transmitted to the Senate for its concurrence by the Hon. Camilo L.
Sabio, Secretary General of the House of Representatives.
On February 7, 1994, the Senate Committee on Ways and Means
submitted Senate Bill (S.B.) No. 1630, recommending its approval
“in substitution of Senate Bill No. 1129 taking into consideration
P.S. Res. No. 734 and House Bill No. 11197.” On March 24, 1994,
S.B. No. 1630 was approved on second and third readings. On the
same day, the Senate, thru Secretary Edgardo E. Tumangan,
requested the House for a conference “in view of the disagreeing
provisions of S.B. No. 1630 and H.B. No. 11197.” It designated the
following as members of its Committee: Senators Ernesto F.
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Herrera, Leticia R. Shahani, Alberto S. Romulo, John H. Osmeña,
Ernesto M. Maceda, Blas F. Ople, Francisco S.
805
VOL. 235, AUGUST 25, 1994 805
Tolentino vs. Secretary of Finance
Tatad, Rodolfo G. Biazon, and Wigberto S. Tañada. On the part of
the House, the members of the Committee were: Congressmen
Exequiel B. Javier, James L. Chiongbian, Renato V. Diaz, Arnulfo
P. Fuentebella, Mariano M. Tajon, Gregorio Andolong, Thelma
Almario, and Catalino Figueroa. After five (5) meetings,1 the
Bicameral Conference Committee submitted its Report to the
Senate and the House stating:
“CONFERENCE COMMITTEE REPORT
The Conference Committee on the disagreeing provisions of House Bill No.
11197, entitled:
AN ACT RESTRUCTURING THE VALUE ADDED TAX (VAT)
SYSTEM TO WIDEN ITS TAX BASE AND ENHANCE ITS
ADMINISTRATION, AMENDING FOR THESE PURPOSES SECTIONS
99, 100, 102, 103, 104, 105, 106, 107, 108 AND 110 OF TITLE IV, 112, 115
AND 116 OF TITLE V, AND 236, 237, AND 238 OF TITLE IX, AND
REPEALING SECTIONS 113 AND 114 OF TITLE V, ALL OF THE
NATIONAL INTERNAL REVENUE CODE, AS AMENDED
and Senate Bill No. 1630 entitled:
AN ACT RESTRUCTURING THE VALUE ADDED TAX (VAT)
SYSTEM TO WIDEN ITS TAX BASE AND ENHANCE ITS
ADMINISTRATION, AMENDING FOR THESE PURPOSES SECTIONS
99, 100, 102, 103, 104, 106, 107, 108 AND 110 OF TITLE IV, 112, 115, 117
AND 121 OF TITLE V, AND 236, 237, AND 238 OF TITLE IX, AND
REPEALING SECTIONS 113, 114, 116, 119 AND 120 OF TITLE V, ALL
OF THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED AND
FOR OTHER PURPOSES
having met, after full and free conference, has agreed to recommend and
do hereby recommend to their respective Houses that House Bill No. 11197,
in consolidation with Senate Bill No. 1630, be approved in accordance with
the attached copy of the bill as reconciled and approved by the conferees.
Approved.”
_______________
1 April 13, 19, 20, 21, and 25, 1994.
806
806 SUPREME COURT REPORTS ANNOTATED
Tolentino vs. Secretary of Finance
The Report was approved by the House on April 27, 1994. The
Senate approved it on May 2, 1994. On May 5, 1994, the President
signed the bill into law as R.A. No. 7716.
There is no question that the Bicameral Conference Committee
did more than reconcile differences between House Bill No. 11197
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and Senate Bill No. 1630. In several instances, it either added new SATELLITE TRANSMISSION and
provisions or deleted provisions already approved in House Bill No. CABLE TELEVISION TIME
11197 and Senate Bill No. 1630. These insertions/dele-tions 5. Other Similar properties 5. 5. ‘Other similar properties’ was
numbering twenty four (24) are specified in detail by petitioner The deleted
2 Same
Tolentino as follows:
6.— 6.— 6. Real properties held primarily for
“SOME SALIENT POINTS ON THE (AMENDMENTS TO THE VAT LAW sale to customers or held for lease
[EO 273]) SHOWING ADDITIONS/INSERTIONS MADE BY BICAMERAL in the ordinary course or business
CONFERENCE COMMITTEE TO SB 1630 & HB 11197
B. The HB and the BCC Bills has each a provision which includes THE
I On Sec. 99 of the NIRC SALE OF GOLD TO BANGKO SENTRAL NG PILIPINAS as
falling under the term Export Sales, hence subject to 0% VAT. The
H.B. 11197 amends this section by including, as liable to VAT, any Senate Bill does not contain such provision (See Section 102-A
person who in the course of trade of business, sells, barters, or exchanges thereof).
goods or PROPERTIES and any person who LEASES PERSONAL
PROPERTIES. III. On Section 102
Senate Bill 1630 deleted Sec. 99 to give way for a new Section 99—
DEFINITION OF TERMS—where eleven (11) terms were defined. A new This section was amended to include as subject to a 10% VAT the gross
Section, Section 99-A was incorporated which included as subject to VAT, receipts derived from THE SALE OR EXCHANGE OF SERVICES,
one who sells, exchanges, barters PROPERTIES and one who imports INCLUDING THE USE OR LEASE OF PROPERTIES.
PROPERTIES. The SB, HB, and BCC have the same provisions on this.
The BCC version (R.A. 7716) makes LESSORS of goods OR However, on what are included in the term SALE OR EXCHANGE OF
PROPERTIES and importers of goods LIABLE to VAT. SERVICES, the BCC included/inserted the following (not found in either
the House or Senate Bills):
II On Section 100 (VAT on sale of goods)
1. Services of lessors of property WHETHER PERSONAL OR REAL;
A. The H.B., S.B., and the BCC (R.A. 7716) all included sale of (See BCC Report/Bill p. 7)
PROPERTIES as subject to VAT. 2. WAREHOUSING SERVICES (Ibid.,)
The term GOODS or PROPERTIES includes the following:
808
HB (pls. refer to Sec. 2) SB (pls. refer to BCC (RA 7716
Sec. 1(4) (Sec. 2)
1. Right or the privilege to use patent, 1. The same 1. The same 808 SUPREME COURT REPORTS ANNOTATED
copyright, de
Tolentino vs. Secretary of Finance

________________
3. Keepers of RESTHOUSES, PENSION HOUSES, INNS, RESORTS
2 See also Annex “A,” Memorandum of Petitioner Kilosbayan in G.R. No. 115781; (Ibid.,)
also the Petition in G.R. No. 115543, pp. 2-3. 4. Common carriers by LAND, AIR AND SEA (Ibid.,)
5. SERVICES OF FRANCHISE GRANTEES OF TELEPHONE AND
807
TELEGRAPH;
6. RADIO AND TELEVISION BROADCASTING
VOL. 235, AUGUST 25, 1994 807 7. ALL OTHER FRANCHISE GRANTEES EXCEPT THOSE UNDER
Tolentino vs. Secretary of Finance SECTION 117 OF THIS CODE
8. SERVICES OF SURETY, FIDELITY, INDEMNITY, AND
sign, or model, plan, secret     BONDING COMPANIES.
formula or process, goodwill 9. Also inserted by the BCC (on page B thereof) is the LEASE OR USE
trademark, tradebrand or
OF OR THE RIGHT TO USE OF SATTELITE TRANSMISSION
other like property or right.
AND CABLE TELEVISION TIME
2. Right or the privilege to use 2. 2. The same
in the Philippines of any The
industrial, commercial, or same IV. On Section 103 (Exempt Transactions)
scientific equipment.
The BCC deleted subsection (f) in its entirety, despite its retention in both
3. Right or the privilege to use 3. 3. The same
the House and Senate Bills, thus under RA 7716, the ‘printing, publication,
motion picture films, films, The
tapes and discs. same importation or sale of books and any newspaper, magazine, review, or
bulletin which appears at regular intervals with fixed prices for
4. Radio and Television time 4. 4. In addition to radio and television
The time the following were included: subscription and sale and which is not devoted principally to the
Same publication of advertisements’ is subject to VAT.

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Subsection (g) was amended by the BCC (both Senate and House Bills
did not) by changing the word TEN to FIVE, thus: “Importation of
passenger and/or cargo vessel of more than five thousand ton to ocean
going, including engine and spare parts of said vessel to be used by the
importer himself as operator thereof.” In short, importation of vessels with
tonnage of more than 5 thousand is VAT exempt.
Subsection L, was amended by the BCC by adding the qualifying phrase:
EXCEPT THOSE RENDERED BY PROFESSIONALS.
Subsection U which exempts from VAT “Transactions which are exempt
under special laws,” was amended by BCC by adding the phrase: EXCEPT
THOSE GRANTED UNDER PD Nos. 66, 529, 972, 1491, and 1590, and
NON-ELECTRIC COOPERATIVES under RA 6938. This is the reason why
cooperatives are now subject to VAT.
While the SALE OF REAL PROPERTIES was included in the exempt
transactions under the House Bill, the BCC made a qualification by stating:
‘(S) SALE OF REAL PROPERTIES NOT PRIMARILY HELD FOR SALE TO
CUSTOMERS OR HELD FOR LEASE IN THE ORDINARY COURSE OF TRADE
OR BUSINESS OR REAL PROPERTY UTILIZED FOR LOW-COST AND
SOCIALIZED HOUSING AS DEFINED BY R.A. NO. 7279 OTHERWISE KNOWN
AS THE URBAN DEVELOPMENT AND
809
VOL. 235, AUGUST 25, 1994 809
Tolentino vs. Secretary of Finance
HOUSING ACT OF 1992 AND OTHER RELATED LAWS.
Under the Senate Bill, the sale of real property utilized for low-cost and socialized
housing as defined by RA 7279, is one of the exempt transactions.
Under the House Bill, also exempt from VAT, is the SALE OF PROPERTIES
OTHER THAN THE TRANSACTIONS MENTIONED IN THE FOREGOING
PARAGRAPHS WITH A GROSS ANNUAL SALES AND/OR RECEIPTS OF
WHICH DOES NOT EXCEED THE AMOUNT PRESCRIBED IN THE
REGULATIONS TO BE PROMULGATED BY THE SECRETARY OF FINANCE
WHICH SHALL NOT BE LESS THAN P350,000.00 OR HIGHER THAN
P600,000.00 x x x Under the Senate Bill, the amount is P240,000.00. The BCC
agreed at the amount of not less than P480,000.00 or more than P720,000.00
SUBJECT TO TAX UNDER SEC. 112 OF THIS CODE.
The BCC did not include, as VAT exempt, the sale or transfer of securities as
defined in the Revised Securities Act (BP 178) which was contained in both Senate
and House Bills.
V On Section 104
The phrase INCLUDING PACKAGING MATERIALS was included by
the BCC on Section 104 (A) (1) (B), and the phrase ON WHICH A VALUE-
ADDED TAX HAS BEEN ACTUALLY on Section 104 (A) (2). These
phrases are not contained in either House and Senate Bills.
VI On Section 107
Both House and Senate Bills provide for the payment of P500.00 VAT
registration fee. The BCC provides for P1,000.00 VAT fee.
VII On Section 112
While both the Senate and House Bills provide that a person whose sales
or receipts and are exempt under Section 103[w] of the Code, and who are
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not VAT registered shall pay a tax equivalent to THREE (3) PERCENT of
his gross quarterly sales or receipts, the BCC inserted the phrase: THREE
PERCENT UPON THE EFFECTIVITY OF THIS ACT AND FOUR
PERCENT (4%) TWO YEARS THEREAFTER.
810
810 SUPREME COURT REPORTS ANNOTATED
Tolentino vs. Secretary of Finance
VIII On Section 115
Sec. 17 of SB 1630, Sec. 12 of House Bill 11197 amends this Section by
clarifying that common carriers by land, air or water FOR THE
TRANSPORT OF PASSENGERS are subject to Percentage Tax equivalent
to 3% of their quarterly gross sales.
The BCC adopted this and the House Bill’s provision that the GROSS
RECEIPTS OF COMMON CARRIERS DERIVED FROM THEIR
INCOMING AND OUTGOING FREIGHT SHALL NOT BE SUBJECTED
TO THE LOCAL TAXES IMPOSED UNDER RA 7160. The Senate Bill has
no similar provision.
IX On Section 117
This Section has not been touched by either Senate and House Bills. But
the BCC amended it by subjecting franchises on ELECTRIC, GAS and
WATER UTILITIES A TAX OF TWO PERCENT (2%) ON GROSS
RECEIPTS DERIVED x x x.
X On Section 121
The BCC adopted the Senate Bills’ amendment to this section by
subjecting to 5% premium tax on life insurance business. The House Bill
does not contain this provision.
XI Others
A) The House Bill does not contain any provision on the deferment of
VAT collection on Certain Goods and Services as does the Senate
Bill (Section 19, SB 1630). But although the Senate Bill authorizes
the deferment on certain goods and services for no longer than 3
years, there is no specific provision that authorizes the President to
EXCLUDE from VAT any of these. The BCC uses the word
EXCLUDE.
B) Moreover, the Senate Bill defers the VAT on services of actors and
actresses etc. for 3 years but the BCC defers it for only 2 years.
C) Section 18 of the BCC Bill (RA 7716) is an entirely new provision
not contained in the House/Senate Bills.
D) The period within which to promulgate the implementing rules and
regulations is within 60 days under SB 1630; No specific period
under the House Bill, within 90 days under RA 7716 (BCC).
E) The House Bill provides for a general repealing clause i.e., all
inconsistent laws etc. are repealed. Section 16 of the Senate Bill
expressly repeals Sections 113, 114, 116, 119 and 120 of the code.
The same Senate Bill however contains a general repealing clause
in Sec. 21
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VOL. 235, AUGUST 25, 1994 811
Tolentino vs. Secretary of Finance
thereof.
RA 7716 (BCC’s Bill) expressly repeals Sections 113, 114 and 116 of the
NIRC; Article 39 (c) (d) and (e) of EO 226 and provides the repeal of Sec.
119 and 120 of the NIRC upon the expiration of two (2) years unless
otherwise excluded by the President.”
The charge that the Bicameral Conference Committee added new
provisions in the bills of the two chambers is hardly disputed by
respondents. Instead, respondents justify them. According to
respondents: (1) the Bicameral Conference Committee has an ex
post veto power or a veto after the fact of approval of the bill by both
Houses; (2) the bill prepared by the Bicameral Conference
Committee, with its additions and deletions, was anyway approved
by both Houses; (3) it was the practice in past Congresses for
conference committees to insert in bills approved by the two Houses
new provisions that were not originally contemplated by them; and
(4) the enrolled bill doctrine precludes inquiry into the regularity of
the proceedings that led to the enactment of R.A. 7716.
With due respect, I reject these contentions which will cave in on
closer examination.
First. There is absolutely no legal warrant for the bold
submission that a Bicameral Conference Committee possesses the
power to add/delete provisions in bills already approved on third
reading by both Houses or an ex post veto power. To support this
postulate that can enfeeble Congress itself, respondents cite no3
constitutional provision, no law, not even any rule or regulation.
Worse, their stance is categorically repudiated by the rules of both
the Senate and the House of Representatives which define with
precision the parameters of power of a Bicameral Conference
Committee.
Thus, Section 209, Rule XII of the Rules of the Senate provides:
“In the event that the Senate does not agree with the House of
Representatives on the provision of any bill or joint resolution, the
differences shall be settled by a conference committee of both Houses
_______________
3 See p. 66 of the Consolidated Memorandum for Respondents where they refer to certain
statements from Canlan, Weightson and Beam but without citing their specific book or article.
812
812 SUPREME COURT REPORTS ANNOTATED
Tolentino vs. Secretary of Finance
which shall meet within ten days after their composition.
Each Conference Committee Report shall contain a detailed and
sufficiently explicit statement of the changes in or amendments to the
subject measure, and shall be signed by the conferees.” (Emphasis supplied)
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The counterpart rule of the House of Representatives is cast in near
identical language. Section 85 of the Rules of the House of
Representatives pertinently provides:
“In the event that the House does not agree with the Senate on the
amendments to any bill or joint resolution, the differences may be settled by
a conference committee of both chambers.
x x x. Each report shall contain a detailed, sufficiently explicit statement
of the changes in or amendments to the subject measure.” (Emphasis
supplied)
4
The Jefferson’s Manual has been adopted as a supplement to our
parliamentary rules and practice. Section 456 of Jefferson’s 5Manual
similarly confines the powers of a conference committee, viz:
“The managers of a conference must confine themselves to the differences
committed to them . . . and may not include subjects not within the
disagreements, even though germane to a question in issue.”
This rule of antiquity has been honed and honored in practice by
the Congress of the United States. Thus, it is chronicled by Floyd
Biddick, Parliamentarian Emeritus of the United States Senate,
6
viz:
“Committees of conference are appointed for the sole purpose of
compromising and adjusting the differing and conflicting opinions of the
two Houses and the committees of conference alone can grant
________________
4 See Rule 49 of the Rules of the Senate.
5 See p. 22, Memorandum of Petitioners in G.R. No. 115781 citing Jefferson’s Manual and
Rules of the House of Representatives, by Lewis Deschler, Parliamentarian, U.S. Government
Printing Office, 1967, p. 264.
6 Ibid, citing Riddick, Senate Procedure: Precedents and Practices, US Senate, 1981, US
Government Printing Office, pp. 383-384.
813
VOL. 235, AUGUST 25, 1994 813
Tolentino vs. Secretary of Finance
compromises and modify propositions of either Houses within the limits of
the disagreement. Conferees are limited to the consideration of differences
between the two Houses.
Conferees shall not insert in their report matters not committed to them
by either House, nor shall they strike from the bill matters agreed to by both
Houses. No matter on which there is nothing in either the Senate or House
passed versions of a bill may be included in the conference report and
actions to the contrary would subject the report to a point of order.”
(Emphasis ours)
In fine, there is neither a sound nor a syllable in the Rules of the
Senate and the House of Representatives to support the thesis of
the respondents that a bicameral conference committee is clothed
with an ex post veto power.
But the thesis that a Bicameral Conference Committee can wield
ex post veto power does not only contravene the rules of both the
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Senate and the House. It wages war against our settled ideals of
representative democracy. For the inevitable, catastrophic effect of
the thesis is to install a Bicameral Conference Committee as the
Third Chamber of our Congress, similarly vested with the power to
make laws but with the dissimilarity that its laws are not the
subject of a free and full discussion of both Houses of Congress.
With such a vagrant power, a Bicameral Conference Committee
acting as a Third Chamber will be a constitutional monstrosity.
It needs no omniscience to perceive that our Constitution did not
provide for a Congress composed of three chambers. On the
contrary, section 1, Article VI of the Constitution provides in clear
and certain language: “The legislative power shall be vested in the
Congress of the Philippines which shall consist of a Senate and a
House of Representatives . . . .” Note that in vesting legislative
power exclusively to the Senate and the House, the Constitution
used the word “shall.” Its command for a Congress of two houses is
mandatory. It is not mandatory sometimes.
In vesting legislative power to the Senate, the Constitution
means the Senate “. . . composed of twenty-four Senators x x x7
elected at large by the qualified voters of the Philippines . . . .”
Similarly, when the Constitution vested the legislative power to
________________
7 Section 2, Article VI.
814
814 SUPREME COURT REPORTS ANNOTATED
Tolentino vs. Secretary of Finance
the House, it means the House “. . . composed of not more than two
hundred and fifty members x x x who shall be elected from
legislative districts x x x and those who x x x shall be elected
through a party-list system of registered
8
national, regional, and
sectoral parties or organizations.” The Constitution thus, did not
vest on a Bicameral Conference Committee with an ad hoc
membership the power to legislate for it exclusively vested
legislative power to the Senate and the House as co-equal bodies. To
be sure, the Constitution does not mention the Bicameral
Conference Committees of Congress. No constitutional status is
accorded to them. They are not even statutory creations. They owe
their existence from the internal rules of the two Houses of
Congress. Yet, respondents peddle the disconcerting idea that they
should be recognized as a Third Chamber of Congress and with ex
post veto power at that.
The thesis that a Bicameral Conference Committee can exercise
law making power with ex post veto power is freighted with
mischief. Law making his a power that can be used for good or for
ill, hence, our Constitution carefully laid out a plan and a procedure
for its exercise. Firstly, it vouchsafed that the power to make laws
should be exercised by no other body except the Senate and the
House. It ought to be indubitable that what is contemplated is the
Senate acting as a full Senate and the House acting as a full House.
It is only when the Senate and the House act as whole bodies that
they truly represent the people. And it is only when they represent
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the people that they can legitimately pass laws. Laws that are not
enacted by the people’s rightful representatives subvert the people’s
sovereignty. Bicameral Conference Committees, with their ad hoc
character and limited membership, cannot pass laws for they do not
represent the people. The Constitution does not allow the tyranny of
the majority. Yet, the respondents will impose the worst kind of
tyranny—the tyranny of the minority over the majority. Secondly,
the Constitution delineated in deft strokes the steps to be followed
in making laws. The overriding purpose of these procedural rules is
to assure that only bills that successfully survive the searching
scrutiny of the proper committees of Congress and the full and
________________
8 Section 5(1), Article VI.
815
VOL. 235, AUGUST 25, 1994 815
Tolentino vs. Secretary of Finance
unfettered deliberations of both Houses can become laws. For this
reason, a bill has to undergo three (3) mandatory separate readings
in each House. In the case at bench, the additions and deletions
made by the Bicameral Conference Committee did not enjoy the
enlightened studies of appropriate committees. It is meet to note
that the complexities of modern day legislations have made our
committee system a significant part of the legislative process.
Thomas Reed called the committee system as “the eye, the ear, the
hand, and very often the brain of the house.” President Woodrow
Wilson of the United States once referred to the government of the
United States as “a government9 by the Chairmen of the Standing
Committees of Congress . . . .” Neither did these additions and
deletions of the Bicameral Conference Committee pass through the
coils of collective deliberation of the members of the two Houses
acting separately. Due to this shortcircuiting of the constitutional
procedure of making laws, confusion shrouds the enactment of R.A.
No. 7716. Who inserted the additions and deletions remains a
mystery. Why they were inserted is a riddle. To use a Churchillian
phrase, lawmaking should not be a riddle wrapped in an enigma. It
cannot be, for Article II, section 28 of the Constitution mandates the
State to adopt and implement a “policy of full public disclosure of all
its transactions involving public interest.” The Constitution could
not have contemplated a Congress of invisible and unaccountable
John and Mary Does. A law whose rationale is a riddle and whose
authorship is obscure cannot bind the people.
All these notwithstanding, respondents resort to the legal
cosmetology that these additions and deletions should govern the
people as laws because the Bicameral Conference Committee
Report was anyway submitted to and approved by the Senate and
the House of Representatives. The submission may have some merit
with respect to provisions agreed upon by the Committee in the
process of reconciling conflicts between S.B. No. 1630 and H.B. No.
11197. In these instances, the conflicting provisions had been
previously screened by the proper committees, deliberated upon by
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both Houses and approved by them. It is, however, a different Tolentino vs. Secretary of Finance
matter with respect to additions and deletions
In a similar vein, Prof. Jack Davies commented that “conference
________________ reports are returned to assembly and Senate on a take-it or leave-it-
basis, and the bodies are generally placed
11
in the position that to
9 Sutherland, Statutory Construction, 3rd ed., Vol. I, p. 151. leave-it is a practical impossibility.” Thus, he concludes that
816
“conference committee action
12
is the most undemocratic procedure in
the legislative process.”
The respondents also contend that the additions and deletions
816 SUPREME COURT REPORTS ANNOTATED made by the Bicameral Conference Committee were in accord with
Tolentino vs. Secretary of Finance legislative customs and usages. The argument does not persuade for
it misappreciates the value of customs and usages in the hierarchy
of sources of legislative rules of procedure. To be sure, every
which were entirely new and which were made not to reconcile legislative assembly has the inherent right to promulgate its own
inconsistencies between S.B. No. 1630 and H.B. No. 11197. The
internal rules. In our jurisdiction, Article VI, section 16(3) of the
members of the Bicameral Conference Committee did not have any Constitution provides that “Each House may determine the rules of
authority to add new provisions or delete provisions already
its proceedings x x x.” But it is hornbook law that the sources of
approved by both Houses as it was not necessary to discharge their Rules of Procedure are many and hierarchical in character. Mason
limited task of reconciling differences in bills. At that late stage of 13
laid them down as follows:
law making, the Conference Committee cannot add/ delete
provisions which can become laws without undergoing the study “x x x
and deliberation of both chambers given to bills on 1st, 2nd, and 3rd
readings. Even the Senate and the House cannot enact a law which 1. Rules of Procedure are derived from several sources. The principal
will not undergo these mandatory three (3) readings required by the sources are as follows:
Constitution. If the Senate and the House cannot enact such a law,
a. Constitutional rules.
neither can the lesser Bicameral Conference Committee.
Moreover, the so-called choice given to the members of both b. Statutory rules or charter provisions.
Houses to either approve or disapprove the said additions and c. Adopted rules.
deletions is more of an optical illusion. These additions and d. Judicial decisions.
deletions are not submitted separately for approval. They are e. Adopted parliamentary authority.
tucked to the entire bill. The vote is on the bill as a package, i.e.,
f. Parliamentary law.
together with the insertions and deletions. And the vote is either
“aye” or “nay,” without any further debate and deliberation. Quite g. Customs and usages.
often, legislators vote “yes” because they approve of the bill as a
2. The rules from the different sources take precedence in the order
whole although they may object to its amendments by the
listed above except that judicial decisions, since they are
Conference Committee. This lack of real choice is well observed by
10 interpretations of rules from one of the other sources, take the same
Robert Luce:
precedence as the source interpreted. Thus, for example, an
“Their power lies chiefly in the fact that reports of conference committees interpretation of a constitutional provision takes precedence over a
must be accepted without amendment or else rejected in toto. The impulse statute.
is to get done with the matter and so the motion to accept has undue 3. Whenever there is conflict between rules from these sources the rule
advantage, for some members are sure to prefer swallowing unpalatable from the source listed earlier prevails over the rule from the source
provisions rather than prolong controversy. This is the more likely if the
report comes in the rush of business toward the end of a session, when to _______________
seek further conference might result in the loss of the measure altogether.
At any time in the session there is some risk of such a result following the 11 Legislative Law and Process in a Nut Shell, West Publishing Co., 1986 ed., p. 81.
rejection of a conference report, for it may not be possible to secure a second 12 Ibid.
conference, or delay may give opposition to the main proposal chance to 13 Manual of Legislative Procedure for Legislative and other Governmental Bodies,
develop more strength.” McGraw Hill Co., Inc., 1953 ed., pp. 32-33.

818
________________

10 Legislative Procedure, 1922 ed., Riverside Press, p. 404. 818 SUPREME COURT REPORTS ANNOTATED
817 Tolentino vs. Secretary of Finance

listed, later. Thus, where the Constitution requires three readings

VOL. 235, AUGUST 25, 1994 817 of bills, this provision controls over any provision of statute, adopted

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rules, adopted manual, or of parliamentary law, and a rule of
parliamentary law controls over a local usage but must give way to
any rule from a higher source of authority.” (Emphasis ours)
As discussed above, the unauthorized additions and deletions made
by the Bicameral Conference Committee violated the procedure
fixed by the Constitution in the making of laws. It is reasonless for
respondents therefore to justify these insertions as sanctioned by
customs and usages.
Finally, respondents seek sanctuary in the conclusiveness of an
enrolled bill to bar any judicial inquiry on whether Congress
observed our constitutional procedure in the passage of R.A. No.
7716. The enrolled bill theory is a historical relic that should not
continuously rule us from the fossilized past. It should be
immediately emphasized that the enrolled bill theory originated in
England where there 14is no written constitution and where
Parliament is supreme. In this jurisdiction, we have a written
constitution and the legislature is a body of limited powers.
Likewise, it must be pointed out that starting from the decade of
the 40’s, even American courts have veered away from the rigidity
and unrealism of the 15
conclusiveness of an enrolled bill. Prof.
Sutherland observed:
“x x x.
Where the failure of constitutional compliance in the enactment of
statutes is not discoverable from the face of the act itself but may be
demonstrated by recourse to the legislative journals, debates, committee
reports or papers of the governor, courts have used several conflicting
theories with which to dispose of the issue. They have held: (1) that the
enrolled bill is conclusive and like the sheriff’s return cannot be attacked;
(2) that the enrolled bill is prima facie correct and only in case the
legislative journal shows affirmative contradiction of the constitutional
requirement will the bill be held invalid, (3) that although the enrolled bill
is prima facie correct, evidence from the journals, or other extrinsic sources
is admissible to strike the bill down; (4) that the legislative journal is
conclusive and the enrolled bill is valid only if it
_______________
14 82 CJS 136.
15 Statutory Construction, 3rd ed., Vol. I., p. 223.
819
VOL. 235, AUGUST 25, 1994 819
Tolentino vs. Secretary of Finance
accords with the recital in the journal and the constitutional procedure.”
Various jurisdictions have adopted these alternative approaches in
view of strong dissent and dissatisfaction against the philosophical
underpinnings of the conclusiveness of an enrolled bill. Prof.
Sutherland further observed:
“x x x Numerous reasons have been given for this rule. Traditionally, an
enrolled bill was ‘a record’ and as such was not subject to attack at common
law. Likewise, the rule of conclusiveness was similar to the common law
rule of the inviolability of the sheriff’s return. Indeed, they had the same
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origin, that is, the sheriff was an officer of the king and likewise the
parliamentary act was a regal act and no official might dispute the king’s
word. Transposed to our democratic system of government, courts held that
as the legislature was an official branch of government the court must
indulge every presumption that the legislative act was valid. The doctrine
of separation of powers was advanced as a strong reason why the court
should treat the acts of a co-ordinate branch of government with the same
respect as it treats the action of its own officers; indeed, it was thought that
it was entitled to even greater respect, else the court might be in the
position of reviewing the work of a supposedly equal branch of government.
When these arguments failed, as they frequently did, the doctrine of
convenience was advanced, that is, that it was not only an undue burden
upon the legislature to preserve its records to meet the attack of persons
not affected by the procedure of enactment, but also that it unnecessarily
complicated litigation and confused the trial of substantive issues.
Although many of these arguments are persuasive and are indeed the
basis for the rule in many states today, they are not invulnerable to attack.
The rule most relied on—the sheriff’s return or sworn official rule—did not
in civil litigation deprive the injured party of an action, for always he could
sue the sheriff upon his official bond. Likewise, although collateral attack
was not permitted, direct attack permitted raising the issue of fraud, and at
a later date attack in equity was also available; and that the evidence of the
sheriff was not of unusual weight was demonstrated by the fact that in an
action against the sheriff no presumption of its authenticity prevailed.
The argument that the enrolled bill is a ‘record’ and therefore
unimpeachable is likewise misleading, for the correction of records is a
matter of established judicial procedure. Apparently, the justification is
either the historical one that the king’s word could not be questioned or the
separation of powers principle that one branch of the government must
treat as valid the acts of another.
820
820 SUPREME COURT REPORTS ANNOTATED
Tolentino vs. Secretary of Finance
Persuasive as these arguments are, the tendency today is to avoid reaching
results by artificial presumptions and thus it would seem desirable to insist
that the enrolled bill stand or fall on the basis of the relevant evidence which
may be submitted for or against it.” (Emphasis ours)
Thus, as far back as the 1940’s, Prof. Sutherland confirmed that “x
x x the tendency seems to be toward the abandonment of the
conclusive presumption rule and the adoption of the third rule
leaving only a prima facie presumption of validity 16which may be
attacked by any authoritative source of information.”
I am not unaware that this Court has subscribed to the
conclusiveness of an enrolled bill as enunciated in the 1947 lead 17
case of Mabanag v. Lopez Vito, and reiterated in subsequent cases.
With due respect, I submit that these rulings are no longer good
law. Part of the ratiocination in Mabanag states:
“x x x.
If for no other reason than that it conforms to the expressed policy of our
law making body, we choose to follow the rule. Section 313 of the old Code
of Civil Procedure, as amended by Act No. 2210, provides: ‘Official
documents’ may be proved as follows: * * * (2) the proceedings of the
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Philippine Commission, or of any legislative body that may be provided for
in the Philippine Islands, or of Congress, by the journals of those bodies or
of either house thereof, or by published statutes or resolutions, or by copies
certified by the clerk or secretary, or printed by their order; Provided, That
in the case of Acts of the Philippine Commission or the Philippine
Legislature, when there is an existence of a copy signed by the presiding
officers and secretaries of said bodies, it shall be conclusive proof of the
provisions of such Acts and of the due enactment thereof.”
________________
16 Op. cit., pp. 224-225 citing Barndall Refining v. Welsh, 64 S.D. 647, 269 N.W.
853, 859 [1936]. Jones, Constitutional Provisions Regulating the Mechanics of
Enactment in Iowa (1935), 21 Iowa Law Rev. 79, Charlton, Constitutional Regulation
of Legislative Procedure (1936), 21 Iowa Law Rev. 538; Note (1936) 21 Iowa Law
Rev. 573.
17 See Mabanag v. Lopez Vito, 78 Phil. Rep. 1 [1947]; Casco Phil. Chemical Co. v.
Gimenez, L-17931, February 28, 1963; Morales v. Subido, No. L-29658, February 27,
1969, 27 SCRA 131; Phil. Judges Association v. Prado, G.R. No. 105371, November
11, 1993.
821
VOL. 235, AUGUST 25, 1994 821
Tolentino vs. Secretary of Finance
Suffice to state that section 313 of the Old Code of Civil Procedure
as amended by Act No. 2210 is no longer in our statute books. It has
long been repealed by the Rules of Court. Mabanag also relied on
jurisprudence and authorities in the United States which are under
severe criticisms by modern scholars. Hence, even in the United
States the conclusiveness of an enrolled bill has been junked by
most of the States. It is also true that as late as last year, in the
case of Philippine Judges Association v. Prado, op. cit., this Court
still relied on the conclusiveness of an enrolled bill as it refused to
invalidate a provision of law on the ground that it was merely
inserted by the bicameral conference committee of both Houses.
Prado, however, is distinguishable. In Prado, the alleged insertion
of the second paragraph of section 35 of R.A. No. 7354 repealing the
franking privilege of the judiciary does not appear to be an
uncontested fact. In the case at bench, the numerous
additions/deletions made by the Bicameral Conference Committee
as detailed by petitioners Tolentino and Salonga are not disputed by
the respondents. In Prado, the Court was not also confronted with
the argument that it can no longer rely on the conclusiveness of an
enrolled bill in light of the new provision in the Constitution
defining judicial power. More specifically, section 1 of Article VIII
now provides:
“Section 1. The judicial power shall be vested in one Supreme Court and in
such lower courts as may be established by law. Judicial power includes 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 has been a grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of any branch or instrumentality of the
Government.” (Emphasis supplied)
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Former Chief Justice Roberto R. Concepcion, the sponsor of this
provision in the Constitutional Commission
18
explained the sense and
the reach of judicial power as follows:
_______________
18 Record, Constitutional Commission, Vol. I, p. 436; see also, Bernas, The
Constitution of the Republic of the Philippines. A Commentary, 1988 ed., p. 255.
822
822 SUPREME COURT REPORTS ANNOTATED
Tolentino vs. Secretary of Finance
“x x x.
x x x In other words, the judiciary is the final arbiter on the question of
whether or not a branch of government or any of its officials has acted
without jurisdiction or in excess of jurisdiction, or so capriciously as to
constitute an abuse of discretion amounting to excess of jurisdiction. This is
not only a judicial power but a duty to pass judgment on matters of this
nature.
This is the background of paragraph 2 of Section 1, which means that the
courts cannot hereafter evade the duty to settle matters of this nature, by
claiming that such matters constitute political question.” (Emphasis ours)
The Constitution cannot be any clearer. What it granted to this
Court is not a mere power which it can decline to exercise. Precisely
to deter this disinclination, the Constitution imposed it as a duty of
this Court to strike down any act of a branch or instrumentality of
government or any of its officials done with grave abuse of
discretion amounting to lack or excess of jurisdiction. Rightly or
wrongly, the Constitution has elongated the checking powers of this
Court against the other branches of government despite their more
democratic character, the President and the legislators being
elected by the19people. It is, however, theorized that this provision is
nothing new. I beg to disagree for the view misses the significant
changes made in our constitutional canvass to cure the legal
deficiencies we discovered during martial law. One of the areas
radically changed by the framers of the 1987 Constitution is the
imbalance of power between and among the three great branches of
our government—the Executive, the Legislative and the Judiciary.
To upgrade the powers of the Judiciary, the Constitutional
Commission strengthened some more the independence of courts.
Thus, it further protected the security of tenure of the members of
the Judiciary by providing “No law shall be passed reorganizing the
Judiciary 20when it undermines the security of tenure of 21its
Members.” It also guaranteed fiscal autonomy to the Judiciary.
More, it depoliticalized appointments in the judiciary by creating
the Judicial and Bar Council which was tasked with
_______________
19 Citing Marbury v. Madison, 1 Cranch 137 L. ed [1803].
20 Article VIII, section 2.
21 Article VIII, section 3.
823
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VOL. 235, AUGUST 25, 1994
Tolentino vs. Secretary of Finance
22
screening the list of prospective appointees to the judiciary. The
power of confirming 23 appointments to the judiciary was also taken
away from Congress. The President was likewise given a specific
time to fill up vacancies in the judiciary—ninety (90) days24
from the
occurrence of the vacancy in case of the Supreme Court and ninety
(90) days from the submission of the list of recommendees by the 25
Judicial and Bar Council in case of vacancies in the lower courts.
To further insulate appointments in the judiciary from the virus of
politics, the Supreme Court was given the power to “appoint all
officials and employees
26
of the Judiciary in accordance with the Civil
Service Law.” And to make the separation of the judiciary from the
other branches of government more watertight, it prohibited
members of the judiciary to be “. . . designated to 27any agency
performing quasi judicial or administrative functions.” While the
Constitution strengthened the sinews of the Supreme Court, it
reduced the powers of the two other branches of government,
especially the Executive. Notable of the powers of the President
clipped by the Constitution is his power to suspend the writ of
habeas corpus and to proclaim martial law. The exercise of this
power is now subject to revocation by Congress. Likewise, the
sufficiency of the factual basis for the exercise of said power may be
reviewed28
by this Court in an appropriate proceeding filed by any
citizen.
The provision defining judicial power as including the “duty of
the courts of justice . . . to determine whether or not there has been
a grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of any branch or instrumentality of the
Government” constitutes the capstone of the efforts of the
Constitutional Commission to upgrade the powers of this Court vis-
a-vis the other branches of government. This provision was dictated
by our experience under martial law which taught us that a
stronger and more independent judiciary is needed to abort
_______________
22 Article VIII, section 8.
23 Article VIII, section 9.
24 Article VIII, section 4(1).
25 Article VIII, section 9.
26 Article VIII, section 6.
27 Article VIII, section 12.
28 Article VII, section 18.
824 SUPREME COURT REPORTS ANNOTATED
Tolentino vs. Secretary of Finance
abuses in government. As sharply stressed by petitioner Salonga,
this provision is distinctly Filipino and its interpretation should not
be depreciated by undue reliance on inapplicable foreign
jurisprudence. It is thus crystal clear that unlike other Supreme
Courts, this Court has been mandated by our new Constitution to
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823 be a more active agent in annulling acts of grave abuse of discretion
committed by a branch of government or any of its officials. This
new role, however, will not compel the Court, appropriately defined
by Prof. A. Bickel as the least dangerous branch of government, to
assume imperial powers and run roughshod over the principle of
separation of power for that is judicial tyranny by any language.
But while respecting the essentials of the principle of separation of
power, the Court is not to be restricted by its non-essentials.
Applied to the case at bench, by voiding R.A. No. 7716 on the
ground that its enactment violated the procedure imposed by the
Constitution in lawmaking, the Court is not by any means wrecking
the wall separating the powers between the legislature and the
judiciary. For in so doing, the Court is not engaging in lawmaking
which is the essence of legislative power. But the Court’s
interposition of power should not be defeated by the conclusiveness
of the enrolled bill. A resort to this fiction will result in the
enactment of laws not properly deliberated upon and passed by
Congress. Certainly, the enrolled bill theory was not conceived to
cover up violations of the constitutional procedure in law making, a
procedure intended to assure the passage of good laws. The
conclusiveness of the enrolled bill can, therefore, be disregarded for
it is not necessary to preserve the principle of separation of powers.
In sum, I submit that in imposing to this Court the duty to annul
acts of government committed with grave abuse of discretion, the
new Constitution transformed this Court from passivity to activism.
This transformation, dictated by our distinct experience as a nation,
is not merely evolutionary but revolutionary. Under the 1935 and
1973 Constitutions, this Court approached constitutional violations
by initially determining what it cannot do; under the 1987
Constitution, there is a shift in stress—this Court is mandated to
approach constitutional violations not by finding out what it should
not do but what it must do. The Court must discharge this solemn
duty by not resuscitating a past that petrifies the present.
825
VOL. 235, AUGUST 25, 1994 825
Tolentino vs. Secretary of Finance
I vote to declare R.A. No. 7716 unconstitutional.
Petitions dismissed.
Notes.—Despite the inhibitions pressing upon the Court when
confronted with constitutional issues, it will not hesitate to declare
a law or act invalid when it is convinced that this must be done. In
arriving at this conclusion, its only criterion will be the Constitution
824
and God as its conscience gives it in the light to probe its meaning
and discover its purpose. Personal motives and political
considerations are irrelevancies that cannot influence its decisions.
(Luz Farms vs. Secretary of the Department of Agrarian Reform, 192
SCRA 51 [1990])
We start with the established principle that the exclusive nature
of any public franchise is not favored. We may interpret in favor of
exclusiveness only when the statute grants it in express, clear, and
unmistakable terms. In all grants by the government to private
corporations, the interpretation of rights, privileges, or franchises is
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taken against the grantee. Whatever is not clearly and expressly

granted is withheld. (Alger Electric, Inc. vs. Court of Appeals, 135
SCRA 37 [1985])

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826

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