Professional Documents
Culture Documents
CITY OF
NWSA 8 SCRA 224 BUTUAN, 24 SCRA 789
Facts:
GR No. L-18125, May 31, 1963
"A tax on property of the Government, whether national
or local, would merely have the effect of taking money Ordinance 110 was enacted by the City of Butuan imposing a
from one pocket to put it in another pocket." tax of P0.10 per case of 24 bottles of softdrinks or carbonated
drinks. The tax was imposed upon dealers engaged in selling
FACTS: softdrinks or carbonated drinks. When Ordinance 110, the tax
was imposed upon an agent or consignee of any person,
National Waterworks and Sewerage Authority (NWSA), a association, partnership, company or corporation engaged in
public corporation owned by the Government of the Philippines selling softdrinks or carbonated drinks, with “agent or
as well as all property comprising waterworks and sewerage consignee” being particularly defined on the inserted provision
systems placed under it, took over the Cabuyao-Sta. Rosa- Section 3-A. In effect, merchants engaged in the sale of
Biñan Waterworks System in 1956. It was assessed by the softdrinks, etc. are not subject to the tax unless they are
Provincial Assessor of Laguna, for purposes of real estate agents or consignees of another dealer who must be one
taxes, on the real properties owned by Cabuyao Waterworks. engaged in business outside the City. Pepsi-Cola Bottling Co.
The respondent protested claiming it is exempted from the filed suit to recover sums paid by it to the city pursuant to the
payment of real estate taxes in view of the nature and kind of Ordinance, which it claims to be null and void.
said property and functions and activities of petitioner. The
petitioner denied the protest arguing that such real properties Issue:
are subject to real estate tax because although said properties
belong to the Republic of the Philippines, the same holds it, not Whether the Ordinance is discriminatory.
in its governmental, political or sovereign capacity, but in a Held:
private, proprietary or patrimonial character, which, allegedly,
is not covered by the exemption contained in section 3(a) of The Ordinance, as amended, is discriminatory since only
Republic Act No. 470. sales by “agents or consignees” of outside dealers would
be subject to the tax. Sales by local dealers, not acting for
ISSUE: Are the real properties owned by the respondent public or on behalf of other merchants, regardless of the volume
corporation subject to real estate tax? of their sales , and even if the same exceeded those made
HELD: No. Republic Act No. 470 makes no distinction between by said agents or consignees of producers or merchants
property held in a sovereign, governmental or political capacity established outside the city, would be exempt from the tax.
and those possessed in a private, proprietary or patrimonial The classification made in the exercise of the authority to
character. And where the law does not distinguish neither may tax, to be valid must be reasonable, which would be
we, unless there are facts and circumstances clearly showing satisfied if the classification is based upon substantial
that the lawmaker intended the contrary, but no such facts and distinctions which makes real differences; these are
circumstances have been brought to our attention. Indeed, the germane to the purpose of legislation or ordinance; the
noun "property" and the verb "owned" used in said section 3(a) classification applies not only to present conditions but also
strongly suggest that the object of exemption is considered to future conditions substantially identical to those of the
more from the view point of dominion, than from that of present; and the classification applies equally to all those
domain. who belong to the same class. These conditions are not
fully met by the ordinance in question.
Moreover, taxes are financial burdens imposed for the purpose
of raising revenues with which to defray the cost of the
operation of the Government, and a tax on property of the PEPSI-COLA BOTTLING CO. OF THE PHILS., INC. VS.
Government, whether national or local, would merely have the MUNICIPALITY OF TANAUAN, LEYTE, 69 SCRA 460
effect of taking money from one pocket to put it in another
pocket. Hence, it would not serve, in the final analysis, the FACTS:
main purpose of taxation. What is more, it would tend to defeat
it, on account of the paper work, time and consequently, Plaintiff-appellant Pepsi-Cola commenced a complaint with
expenses it would entail. preliminary injunction to declare Section 2 of Republic Act No.
2264, otherwise known as the Local Autonomy Act,
unconstitutional as an undue delegation of taxing authority as
well as to declare Ordinances Nos. 23 and 27 denominated as
"municipal production tax" of the Municipality of Tanauan, considered solely for purposes of determining the tax rate on
Leyte, null and void. Ordinance 23 levies and collects from soft the products, but there is not set ratio between the volume of
drinks producers and manufacturers a tax of one-sixteenth sales and the amount of the tax.
(1/16) of a centavo for every bottle of soft drink corked, and
Ordinance 27 levies and collects on soft drinks produced or JOHN H. OSMEÑA V. OSCAR ORBOS, 220 SCRA 703
manufactured within the territorial jurisdiction of this FACTS:
municipality a tax of ONE CENTAVO (P0.01) on each gallon Senator John Osmeña assails the constitutionality of
(128 fluid ounces, U.S.) of volume capacity. Aside from the paragraph 1c of PD 1956, as amended by EO 137,
undue delegation of authority, appellant contends that it allows empowering the Energy Regulatory Board (ERB) to approve
double taxation, and that the subject ordinances are void for
they impose percentage or specific tax. the increase of fuel prices or impose additional amounts on
petroleum products which proceeds shall accrue to the Oil
ISSUE: Price Stabilization Fund (OPSF) established for the
reimbursement to ailing oil companies in the event of sudden
Are the contentions of the appellant tenable? price increases. The petitioner avers that the collection on oil
HELD:
products establishments is an undue and invalid delegation of
legislative power to tax. Further, the petitioner points out that
No. On the issue of undue delegation of taxing power, it is since a 'special fund' consists of monies collected through the
settled that the power of taxation is an essential and inherent taxing power of a State, such amounts belong to the State,
attribute of sovereignty, belonging as a matter of right to every although the use thereof is limited to the special
independent government, without being expressly conferred purpose/objective for which it was created. It thus appears
by the people. It is a power that is purely legislative and which
the central legislative body cannot delegate either to the that the challenge posed by the petitioner is premised
executive or judicial department of the government without primarily on the view that the powers granted to the ERB
infringing upon the theory of separation of powers. The under P.D. 1956, as amended, partake of the nature of the
exception, however, lies in the case of municipal corporations, taxation power of the State.
to which, said theory does not apply. Legislative powers may
be delegated to local governments in respect of matters of
ISSUE:
local concern. By necessary implication, the legislative power
Is there an undue delegation of the legislative power of
to create political corporations for purposes of local self-
taxation?
government carries with it the power to confer on such local
governmental agencies the power to tax.
HELD:
None. It seems clear that while the funds collected may be
Also, there is no validity to the assertion that the delegated referred to as taxes, they are exacted in the exercise of the
authority can be declared unconstitutional on the theory of police power of the State. Moreover, that the OPSF as a
double taxation. It must be observed that the delegating special fund is plain from the special treatment given it by E.O.
authority specifies the limitations and enumerates the taxes
over which local taxation may not be exercised. The reason is 137. It is segregated from the general fund; and while it is
that the State has exclusively reserved the same for its own placed in what the law refers to as a "trust liability account,"
prerogative. Moreover, double taxation, in general, is not the fund nonetheless remains subject to the scrutiny and
forbidden by our fundamental law, so that double taxation review of the COA. The Court is satisfied that these measures
becomes obnoxious only where the taxpayer is taxed twice for
comply with the constitutional description of a "special fund."
the benefit of the same governmental entity or by the same
jurisdiction for the same purpose, but not in a case where one With regard to the alleged undue delegation of legislative
tax is imposed by the State and the other by the city or power, the Court finds that the provision conferring the
municipality. authority upon the ERB to impose additional amounts on
On the last issue raised, the ordinances do not partake of the petroleum products provides a sufficient standard by which the
nature of a percentage tax on sales, or other taxes in any authority must be exercised. In addition to the general policy of
form based thereon. The tax is levied on the produce the law to protect the local consumer by stabilizing and
(whether sold or not) and not on the sales. The volume subsidizing domestic pump rates, P.D. 1956 expressly
capacity of the taxpayer's production of soft drinks is
authorizes the ERB to impose additional amounts to augment Sec. 4(a) of the Act states that The senior citizens shall be
the resources of the Fund. entitled to the following: (a) the grant of twenty percent (20%)
discount from all establishments relative to the utilization of
services in hotels and similar lodging establishments,
MAYOR ANTONIO J. VILLEGAS V. HIU CHIONG TSAI PAO restaurants and recreation centers, and purchase of medicines
HO AND JUDGE ARCA, 86 SCRA 270 in all establishments for the exclusive use or enjoyment of
FACTS: senior citizens, including funeral and burial services for the
The Municipal Board of Manila enacted Ordinance 6537 death of senior citizens;
requiring aliens (except those employed in Petitioners assert that Section 4(a) of the law is
the diplomatic and consular missions of foreign countries, in unconstitutional because it constitutes deprivation of private
technical assistance programs of the government and another property. Compelling drugstore owners and establishments to
country, and members of religious orders or congregations) to grant the discount will result in a loss of profit and capital
procure the requisite mayor’s permit so as to be employed or because according to them drugstores impose a mark-up of
engage in trade in the City of Manila. The permit fee is P50, only 5% to 10% on branded medicines, and the law failed to
and the penalty for the violation of the ordinance is 3 to 6 provide a scheme whereby drugstores will be justly
compensated for the discount.
months imprisonment or a fine of P100 to P200, or both.
ISSUE:
Issue:
Whether the ordinance imposes a regulatory fee or a tax. WON RA 9257 is constitutional.
HELD:
Held:
The ordinance’s purpose is clearly to raise money under the YES. The law is a legitimate exercise of police power which,
guise of regulation by exacting P50 from similar to the power of eminent domain, has general welfare for
aliens who have been cleared for employment. The amount its object. Police power is not capable of an exact definition,
is unreasonable and excessive because it fails to consider but has been purposely veiled in general terms to underscore
difference in situation among aliens required to pay it, i.e. its comprehensiveness to meet all exigencies and provide
being casual, permanent, part-time, rankand- enough room for an efficient and flexible response to
file or executive. conditions and circumstances, thus assuring the greatest
benefits. Accordingly, it has been described as the most
essential, insistent and the least limitable of powers, extending
The Ordinance was declared invalid as it is arbitrary,
as it does to all the great public needs. It is [t]he power vested
oppressive and unreasonable, being applied only to aliens
in the legislature by the constitution to make, ordain, and
who are thus deprived of their rights to life, liberty and
establish all manner of wholesome and reasonable laws,
property and therefore violates the due process and equal
protection clauses of the Constitution. Further, the ordinance statutes, and ordinances, either with penalties or without, not
does not lay down any criterion or standard to guide the repugnant to the constitution, as they shall judge to be for the
Mayor in the exercise of his discretion, thus conferring upon good and welfare of the commonwealth, and of the subjects of
the mayor arbitrary and unrestricted powers. the same.
For this reason, when the conditions so demand as determined
CARLOS SUPERDRUG ET. AL V. DSWD by the legislature, property rights must bow to the primacy of
FACTS: police power because property rights, though sheltered by due
process, must yield to general welfare.
Petitioners are domestic corporations and proprietors operating
drugstores in the Philippines. Police power as an attribute to promote the common good
would be diluted considerably if on the mere plea of petitioners
Public respondents, on the other hand, include the DSWD, that they will suffer loss of earnings and capital, the questioned
DOH, DOF, DOJ, and the DILG, specifically tasked to monitor provision is invalidated. Moreover, in the absence of evidence
the drugstores’ compliance with the law; promulgate the demonstrating the alleged confiscatory effect of the provision in
implementing rules and regulations for the effective question, there is no basis for its nullification in view of the
implementation of the law; and prosecute and revoke the presumption of validity which every law has in its favor.
licenses of erring drugstore establishments.
Given these, it is incorrect for petitioners to insist that the grant
President Gloria Macapagal-Arroyo signed into law R.A. No. of the senior citizen discount is unduly oppressive to their
9257 otherwise known as the “Expanded Senior Citizens Act of business, because petitioners have not taken time to calculate
2003.”
correctly and come up with a financial report, so that they have Fortune Tobacco filed a petition for review with the CTA. RMC
not been able to show properly whether or not the tax 37-93 is found to be defective, invalid and unenforceable.
deduction scheme really works greatly to their disadvantage.
In treating the discount as a tax deduction, petitioners insist The CA sustained the decision of the CTA. Hence, this appeal.
that they will incur losses. However,petitioner’s computation is
clearly flawed. ISSUE: Is RMC 37-93 a mere interpretative ruling, therefore
For purposes of reimbursement, the law states that the cost of not requiring, for its effectivity, hearing and filing with the UP
the discount shall be deducted from gross income, the amount Law Center?
of income derived from all sources before deducting allowable
expenses, which will result in net income. Here, petitioners RULING: A reading of RMC 37-93, particularly considering the
tried to show a loss on a per transaction basis, which should circumstances under which it has been issued, convinces us
not be the case. An income statement, showing an accounting that the circular cannot be viewed simply as a corrective
of petitioners sales, expenses, and net profit (or loss) for a measure (revoking in the process the previous holdings of past
given period could have accurately reflected the effect of the Commissioners) or merely as construing Section 142(c)(1) of
discount on their income. Absent any financial statement, the NIRC, as amended, but has, in fact and most importantly,
petitioners cannot substantiate their claim that they will be been made in order to place “Hope Luxury,” “Premium More”
operating at a loss should they give the discount. In addition, and “Champion” within the classification of locally
the computation was erroneously based on the assumption manufactured cigarettes bearing foreign brands and to thereby
that their customers consisted wholly of senior citizens. Lastly, have them covered by RA 7654.
the 32% tax rate is to be imposed on income, not on the
amount of the discount.
Specifically, the new law would have its amendatory provisions
While the Constitution protects property rights, petitioners must applied to locally manufactured cigarettes which at the time of
accept the realities of business and the State, in the exercise its effectivity were not so classified as bearing foreign brands.
of police power, can intervene in the operations of a business Prior to the issuance of the questioned circular, “Hope Luxury,”
which may result in an impairment of property rights in the “Premium More,” and “Champion” cigarettes were in the
process. category of locally manufactured cigarettes not bearing foreign
brand subject to 45% ad valorem tax.
CIR vs. CA, CTA and FORTUNE TOBACCO CORPORATION
G.R. No. 119761 August 29, 1996, Taxation
Hence, without RMC 37-93, the enactment of RA 7654, would
FACTS: have had no new tax rate consequence on private
respondent’s products. Evidently, in order to place “Hope
Luxury,” “Premium More,” and “Champion” cigarettes within the
‘Champion,’ ‘Hope,’ and ‘More’ were classified as foreign scope of the amendatory law and subject them to an increased
brands since they were listed in the World Tobacco Directory tax rate, the now disputed RMC 37-93 had to be issued. In so
as belonging to foreign companies. doing, the BIR not simply intrepreted the law; verily, it
legislated under its quasi-legislative authority.The due
However, Fortune Tobacco changed the names of ‘Hope’ to observance of the requirements of notice, of hearing, and of
‘Hope Luxury’ and ‘More’ to ‘Premium More,’ thereby removing publication should not have been then ignored.
the said brands from the foreign brand category and registered
as a local brand.” Ad Valorem taxes were imposed on these Indeed, the BIR itself, in its RMC 10-86, has observed and
brands. provided:
RMC 37-93, Reclassification of Cigarettes Subject to Excise In order that there shall be a just enforcement of rules and
Tax, was issued by the BIR which aims to collect deficiencies regulations, in conformity with the basic element of due
on ad valorem taxes against Fortune Tobacco following their process, the following procedures are hereby prescribed for
reclassification as foreign branded cigarettes. the drafting, issuance and implementation of the said Revenue
Tax Issuances:
“HOPE,” “MORE” and “CHAMPION” being manufactured by
Fortune Tobacco Corporation were considered locally
manufactured cigarettes bearing a foreign brand subject to the
55% ad valorem tax on cigarettes under RA 7654.
(1) This Circular shall apply only to (a) Revenue performances and places of amusement. They also allege that
Regulations; (b) Revenue Audit Memorandum Orders; and (c) since May 1, 1946, when the ordinance in question took effect
Revenue Memorandum Circulars and Revenue Memorandum plaintiffs have been charging the theater-going public
Orders bearing on internal revenue tax rules and regulations. increased prices for admission to the cinematographs owned
and operated to the
graduated tax imposed by said ordinance and as a result while
(2) Except when the law otherwise expressly provides, the
refusing to pay said tax but at the same time collecting an
aforesaid internal revenue tax issuances shall not begin to be
amount equal to said tax plaintiffs have taken undue
operative until after due notice thereof may be fairly presumed.
advantage of said ordinance to realized more profits. The CFI
of
Due notice of the said issuances may be fairly presumed only Manila upheld the validity of the ordinance, thus the plaintiffs
after the following procedures have been taken; instituted an appeal.
ISSUE
xxx xxx xxx
Whether Ordinance No. 2958 is valid? YES
The decision of the Court of Appeals, sustaining that of the The tax therein authorized cannot be defined as tax on
Court of Tax Appeals, is AFFIRMED. business and cannot be restricted within a smaller scope than
what is authorized by the words used, to the extent of
excluding what plaintiffs describe as tax on amusement. The
EASTERN THEATRICAL CO., INC. ET AL vs VICTOR
very fact that
ALFONSO GR No. No. L-1104 May 31, 1949
section 2444 (m) of the Revised Administrative Code includes
theaters, cinematographs, public billiard tables, public pool
FACTS:
tables, bowling alleys, dance halls, public dancing halls,
cabarets, circuses and other similar places, race tracks, horse
Petitioners, corporations engaged in the motion picture
races, theatrical performances, public exhibition, circus and
business, impugns the validity of Ordinance No. 2958 (“An
other performances and places of amusements, will show
Ordinance Imposing a Fee on the Price of Every Admission
conclusively that the power to tax amusement is expressly
Ticket Sold by Cinematographs, Theaters, Vaudeville
included within the power granted by section 2444(m) of the
Companies, Theatrical Shows and Boxing Exhibition and
Revised Administrative Code.
Providing for Other Purposes”) enacted by the Municipal Board
of the City of Manila. The complaint assailed the validity of the
said ordinance on the ground that the Municipal Board of MANILA RACE HORSE TRAINERS ASSOCIATION, INC vs.
Manila exceeded and over-stepped the power granted it the MANUEL DE LA FUENTE
Charter of the City of Manila, among others. Defendants allege G.R. No. L-2947
as affirmative defenses that the ordinance was passed by the January 11, 1951
Municipal Board of Manila by virtue of its express legislative
power to tax fix the license fee and regulate the business of FACTS:
theaters, cinematographs and further to fix the location of and
to tax, fix the license fee for and regulate the business of Petitioners challenged the constitutionality of Section 1 of
theatrical performances public exhibition circus and other Batas Pambansa Blg. 135. It amended
Section 21 of the National Internal Revenue Code of 1977, Constitution as well asof the rule requiring uniformity in
which provides for rates of tax on citizens or residents on (a) taxation.
taxable compensation income, (b) taxable net income, (c)
royalties, prizes, and other winnings, (d) interest from bank Issue: Whether BP 135 violates the due process and equal
deposits and yield or any other monetary benefit from deposit protection clauses, and the rule on uniformity in taxation.
substitutes and from trust fund and similar arrangements, (e)
dividends and share of individual partner in the net profits of Held: There is a need for proof of such persuasive character as
taxable partnership, (f) adjusted gross income. would lead to a conclusion that there was a violation of the due
process and equal protection clauses. Absent such showing,
Petitioner as taxpayer alleged that "he would be unduly the presumption of validity must prevail. Equality and uniformity
discriminated against by the imposition of higher rates of tax in taxation means that all taxable articles or kinds of property of
upon his income arising from the exercise of his profession vis- the same class shall be taxed at the same rate. The taxing
a-vis those which are imposed upon fixed income or salaried power has the authority to make reasonable and natural
individual taxpayers." He characterizes the above section as classifications for purposes of taxation. Where the
arbitrary amounting to class legislation, oppressive and differentiation conforms to the practical dictates of justice and
capricious in character. equity, similar to the standards of equal protection, it is not
discriminatory within the meaning of the clause and is therefore
For petitioner, therefore, there is a transgression of both the uniform. Taxpayers may be classified into different categories,
equal protection and due process clauses of the Constitution such as recipients of compensation income as against
as well as of the rule requiring uniformity in taxation. professionals. Recipients of compensation income are not
entitled to make deductions for income tax purposes as there
The OSG prayed for dismissal of the petition due to lack of is no practically no overhead expense, while professionals and
merit. businessmen have no uniform costs or expenses necessary to
produce their income. There is ample justification to adopt the
ISSUE: gross system of income taxation to compensation income,
Whether or not the Ordinance is constitutional and valid while continuing the system of net income taxation as regards
as has been enacted in accordance with the powers of the professional and business income.
Municipal Board granted by the Charter of the City of Manila.
JUAN LUNA SUBDIVISION VS. SARMIENTO
HELD: GR L-3538, 28 MAY 1952
The Court did not believe that the Ordinance made
arbitrary classification. There is equality and uniformity in FACTS: Juan Luna Subdivision is a local corporation which
taxation if all articles or kinds of property of the same class are issued a check to the City Treasurer of Manila for amount to be
taxed at the same rate. Thus, it was held that, the fact that applied to its land tax for the second semester of 1941. The
some places of amusement are not taxed while others records of the City Treasurer do not show what was done with
are taxed, is not argument at all against the equality and the check (It appears that it was deposited with the Philippine
uniformity of tax imposition." In applying this to the case, there National Bank [PNB]). After liberation (WWII), the City
would be discrimination if some boarding stables of the same Treasurer refused to refund the corporation’s deposit or apply it
class used for the same number of horses were not taxed or to such future taxes as might be found due, while the
were made to pay less or more than others. Philippine Trust Co (to which the check was presented) was
unwilling to reverse its debit entry against Juan Luna Subd.
Said amount is also subject of another Taxation Law I, 2004
SISON VS. ANCHETA ( 19 ) Digests (Berne Guerrero) disagreement between the
GR No. L-59431, 25 July 1984 corporation and the City Treasure, with the corporation
claiming that the wholeamount of the check for the taxes for
Facts: Section 1 of BP Blg 135 amended the Tax Code and the last semester of 1941 have been remitted by
petitioner Antero M. Sison, as taxpayer, alleges that "he would Commonwealth Act 703 (1945).
be unduly discriminated against by the imposition of higher
rates of tax upon his income arising from the exercise of his ISSUE: Whether the provision allowing the remission covers
profession vis-a-vis those which are imposed upon fixed taxes paid before the enactment of Commonwealth Act 703, or
income or salaried individual taxpayers. He characterizes said taxes which were still unpaid.
provision as arbitrary amounting to class legislation,
oppressive and capricious in character. It therefore violates HELD: The law is clear that it applies to “taxes and penalties
both the equal protection and due process clauses of the due and payable,” i.e. taxes owed or owing. The remission of
taxes due and payable to the exclusion og taxes already ORMOC SUGAR CO INC. VS TREASURER OF ORMOC
collected does not constitute unfair discrimination. Each set of CITY
taxes is a class by itself, and the law would be open to attack
as class legislation only if all taxpayers belonging to one class FACTS:
were not treated alike. Herein, they are not. The taxpayers who
paid their taxes before liberation and those who had not were The Municipal Board of Ormoc City passed Ordinance No. 4,
not on the same footing on the need of material relief. imposing "on any and all productions of sugar milled at
Taxpayers who had been in arrears in their obligation whould petitioner's, municipal tax of 1% per export sale. Petitioner paid
have to satisfy their liability with genuine currency, while the but were under protest.
taxes paid during the occupation had been satisfied in
Japanese War Notes, many of them at a time when those Petitioner filed before the CFI contending that the ordinance is
notes were well-nigh worthless. To refund those taxes with unconstitutional for being in violation of the equal protection
restored currency would be unduly enrich many of the payers clause and the rule of uniformity of taxation, aside from being
at a greater expense to the people at large. an export tax forbidden under Section 2287 of the Revised
Administrative Code. It further alleged that the tax is neither a
production nor a license tax which Ormoc City its charter and
under Section 2 of Republic Act 2264, or the Local Autonomy
ASSOCIATION OF CUSTOM BROKERS, INC. vs. Act, is authorized to impose; that it also violates RA 2264
MUNICIPAL BOARD because the tax is on both the sale and export of sugar.
G.R. No. L-4376 May 22, 1953
ISSUE:Whether the ordinance is valid.
FACTS:
The Association of Customs Brokers, Inc., which is RULING:
composed of all brokers and public service operators of motor
vehicles in the City of Manila challenge the validity Ordinance NO. The SC held that it violates the equal protection clause for
No. 3379 on the ground that (1) while it levies a so-called it taxes only sugar produced and exported by petitioner and
property tax it is in reality a license tax which is beyond the none other. Even though petitioner, at the time of the
power of the Municipal Board of the City of Manila; (2) said enactment of the ordinance, was the only sugar central in
ordinance offends against the rule of uniformity of taxation; and Ormoc, the classification should have been in terms applicable
(3) it constitutes double taxation. to future conditions as well. The taxing ordinance should not be
The respondents contend on their part that the singular and exclusive as to exclude any subsequently
challenged ordinance imposes a property tax which is within established sugar central, of the same class as petitioner, for
the power of the City of Manila to impose under its Revised the coverage of the tax.
Charter [Section 18 (p) of Republic Act No. 409], and that the
tax in question does not violate the rule of uniformity of Though, petitioner can be refunded, they are not entitled to
taxation, nor does it constitute double taxation. interest because the taxes were not arbitrarily collected as the
ordinance provided a sufficient basis to preclude arbitrariness,
ISSUE: the same being then presumed constitutional until declared
Whether or not the ordinance is null and void otherwise.
RULING:
The ordinance infringes the rule of the uniformity of MISAMIS ORIENTAL ASSOCIATION OF COCO TRADERS
taxation ordained by our Constitution. Note that the ordinance INC VS. DEPARTMENT OF FINANCE SECRETARY
exacts the tax upon all motor vehicles operating within the City
of Manila. It does not distinguish between a motor vehicle for FACTS:
hire and one which is purely for private use. Neither does it
distinguish between a motor vehicle registered in the City of Petitioner is engaged in the buying and selling of copra in
Manila and one registered in another place but occasionally Misamis Oriental. The petitioner questions Revenue
comes to Manila and uses its streets and public highways. This Memorandum Circular 47-91 issued by the respondent, in
is an inequality which we find in the ordinance, and which which copra was classified as agricultural non-food product
renders it offensive to the Constitution. effectively removing copra as one of the exemptions under
Section 103 of the NIRC.
Section 103a of the NIRC states that the sale of agricultural House of Representatives, but the Senate may propose or
non-food products in their original state is exempt from VAT concur with amendments.
only if the sale is made by the primary producer or owner of the
land from which the same are produced and not by any other Art. VI, Section 26(2): No bill passed by either House shall
person or entity. Section 103b states the sale of agricultural become a law unless it has passed three readings on
food products in their original state is exempt from VAT at all separate days, and printed copies thereof in its final form
stages of production or distribution regardless of who the seller have been distributed to its Members three days before its
is - which the petitioner enjoys. The reclassification had the passage, except when the President certifies to the
effect of denying to the petitioner this exemption when copra necessity of its immediate enactment to meet a public
was classified as an agricultural food product. calamity or emergency. Upon the last reading of a bill, no
amendment thereto shall be allowed, and the vote thereon
Petitioner filed a motion for prohibition. shall be taken immediately thereafter, and the yeas and
nays entered in the Journal.
ISSUE: Whether the Circular is valid.
ISSUE:
Whether RA 7166 violates the principle of progressive system
RULING:
of taxation
Yes. The Court first stated that the CIR gave the circular a
RULING:
strict construction consistent with the rule that tax exemptions
No. Lacking empirical data on which to base any conclusion
must be strictly construed against the taxpayer and liberally in
regarding these arguments, any discussion whether the VAT is
favor of the state.
regressive in the sense that it will hit the poor and middle
income group in society harder than it will the rich is largely an
The Court also stated that the Circular is not discriminatory and
academic exercise.
in violation of the equal protection clause. Petitioner likened
copra farmers / producers, who are exempted from VAT and
Regressivity is not a negative standard for courts to enforce.
copra traders, which the Court disagreed.
“Evolve a progressive system of taxation” is a directive to
Congress. These provisions are placed in the Constitution as
moral incentives to legislation, not as judicially enforceable
Lastly, petitioners argued that the Circular was
rights.
counterproductive which the Court answers that it is a question
of wisdom or policy which should be addressed to respondent
officials and to Congress.
G.R. No. 3473 March 22, 1907
TOLENTINO VS. SECRETARY OF FINANCE G.R. NO.
115455, AUGUST 25, 1994 J. CASANOVAS, plaintiff-appellant, vs. JNO. S. HORD,
defendant-appellee.
FACTS
RA 7716, otherwise known as the Expanded Value-Added FACTS: In 1897, the Spanish Government, in accordance with
Tax Law, is an act that seeks to widen the tax base of the the provisions of the royal decree of 14 may 1867, granted J.
existing VAT system and enhance its administration by Casanovas certain mines in the province of Ambos Camarines,
amending the National Internal Revenue Code. There are of which mines the latter is now the owner. That these were
various suits questioning and challenging the validly perfected mining concessions granted to prior to 11
constitutionality of RA 7716 on various grounds. April 1899 is conceded. They were so considered by the
Collector of Internal Revenue and were by him said to fall
Tolentino contends that RA 7716 did not originate within the provisions of section 134 of Act No. 1189, known as
exclusively from the House of Representatives but is a mere the Internal Revenue Act. That section is as follows:
consolidation of HB. No. 11197 and SB. No. 1630 and it did
not pass three readings on separate days on the Senate SEC. 134. On all valid perfected mining concessions
thus violating Article VI, Sections 24 and 26(2) of the granted prior to April eleventh, eighteen hundred and
Constitution, respectively. ninety-nine, there shall be levied and collected on the
after January first, nineteen hundred and five, the
Art. VI, Section 24: All appropriation, revenue or tariff bills, following taxes:
bills authorizing increase of the public debt, bills of local
application, and private bills shall originate exclusively in the
2. (a) On each claim containing an area of sixty assessments the grantee is hereby expressly exempted" (Sec.
thousand square meters, an annual tax of one 3).
hundred pesos; (b) and at the same rate
proportionately on each claim containing an area in On June 27, 1968, Republic Act No. 5431 amended section 24
excess of, or less than, sixty thousand square meters. of the Tax Code by making liable for income tax all corporate
taxpayers not specifically exempt be taxed. Thus, franchise
3. On the gross output of each an ad valorem tax companies were subjected to income tax in addition to
equal to three per centum of the actual market value franchise tax.
of such output.
However, in petitioner's case, its franchise was amended by
The defendant accordingly imposed upon these properties the Republic Act No. 6020, effective August 4, 1969. The
tax mentioned in section 134, which tax, as has before been amendment reenacted the tax exemption in its original charter
stated, J. Casanovas paid under protest. or neutralized the modification made by Republic Act No. 5431.