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G.R. No. 166494 June 29, 2007

CARLOS SUPERDRUG CORP., doing business under the name and style "Carlos Superdrug," ELSIE
M. CANO, doing business under the name and style "Advance Drug," Dr. SIMPLICIO L. YAP, JR.,
doing business under the name and style "City Pharmacy," MELVIN S. DELA SERNA, doing
business under the name and style "Botica dela Serna," and LEYTE SERV-WELL CORP., doing
business under the name and style "Leyte Serv-Well Drugstore," petitioners,
vs.
DEPARTMENT OF SOCIAL WELFARE and DEVELOPMENT (DSWD), DEPARTMENT OF HEALTH
(DOH), DEPARTMENT OF FINANCE (DOF), DEPARTMENT OF JUSTICE (DOJ), and DEPARTMENT
OF INTERIOR and LOCAL GOVERNMENT (DILG), respondents.

Facts:

Petitioners, which are domestic corporations and proprietors operating drugstores in the
Philippines, assailed the constitutionality of RA 9287 or the Expanded Senior Citizens Act
granting twenty percent discount for senior citizens from all establishments including the
purchase of medicines through a tax deduction scheme.

Under RA 7432, the Old Senior Citizen Act, the government shoulders the one hundred percent
discount and establishment recovers the full amount through a tax credit. Under RA 9257, the
government shoulders only thirty-two percent of the twenty percent discount granted through
tax deduction based on the net cost of goods sold or services rendered.

Petitioner contends that law is confiscatory without just compensation.

Issue:

Whether or not the Expanded Senior Citizens Acts impairs the right of petitioner to just
compensation.

Ratio Decidendi:

The State, in promoting the health and welfare of a special group of citizens, can impose upon
private establishments burden of partly subsidizing a government program. The State considers
the senior citizens as an integral part of society, and the assailed law was to maximize their
contribution in nation-building, and to grant them benefits and privileges. The claim of
confiscation without just compensation is wrong. There is a permanent reduction in the total
revenues as discount of their tax which corresponds as just compensation for the taking of
private property. Moreover, property rights must bow to the primacy of police power because
these rights, though sheltered by due process, must yield to general welfare. The law is a
legitimate exercise of police power