1. Tano v. Socrates, G.R. No. 110249, Aug. 21, 1997, 278 SCRA 154

Syllabus:
It is of course settled that laws (including ordinances enacted by local governmentunits) enjoy
the presumption of constitutionality. To overthrow this presumption, theremust be a clear and
unequivocal breach of the Constitution, not merely a doubtful or argumentative contradiction.
In short, the conflict with the Constitution must be shownbeyond reasonable doubt. Where doubt
exists, even if well-founded, there can be nofinding of unconstitutionality. To doubt is to sustain.

Facts:
 The petitioners filed a petition for certiorari and prohibition praying thatcertain ordinances,
orders and resolutions passed by the province of Palawan andthe city of Puerto Princesa relating
to the banning of shipments of live fish and lobster outside Puerto Princesa and the
protection of marine coral dwelling, be declared asunconstitutional on the ground that the said
ordinances deprive them of their right todue process of law and of their only means of
livelihood.The respondents defended the validity of the ordinances by arguing thattheir issuance
was a valid exercise of the Provincial Government’s power under thegeneral welfare clause of
the Local Government Code of 1991 (LGC).
Issue:
Whether the ordinances are unconstitutional.
Ruling:
 No. The Supreme Court upheld the constitutionality of the ordinances.The Supreme Court held
that LGUs are directed by the LGC to enactordinances for the general welfare of the
municipality and its inhabitants, which shallinclude, inter alia, ordinances that “[p]protect the
environment and impose appropriatepenalties for acts which endanger the environment
such as dynamite fishing andother forms of destructive fishing x x x and such other activities
which result
inpollution, acceleration of eutrophication of rivers and lakes or of ecologicalimbalance.”Fu
rthermore, the centerpiece of LGC is the system of decentralization asexpressly mandated by the
Constitution. Indispensable thereto is devolution and theLGC expressly provides that “[a]ny
provision on a power of a local government unitshall be liberally interpreted in its favor,
and in case of doubt, any question thereonshall be resolved in favor of devolution of powers
and of the lower local governmentunit. Any fair and reasonable doubt as to the existence of
the power shall beinterpreted in favor of the local government unit
concerned.”Devolution refers to the act by which the National Government conferspower and
authority upon the various local government units to perform specificfunctions
and responsibilities.

2. Alta Vista Golf and Country club v. city of Cebu 2016

Facts:
Petitioner is a non-stock and non-profit corporation operating a golf course in Cebu City.
On June 21, 1993, the Sangguniang Panlungsod of Cebu City enacted City Tax
Ordinance No. LXIX, otherwise known as the "Revised Omnibus Tax Ordinance of the
City of Cebu" (Revised Omnibus Tax Ordinance).
Section 42 of the said tax ordinance on amusement tax was amended by City Tax
Ordinance Nos. LXXXII[4] and LXXXIV[5] (which were enacted by the Sangguniang
Panlungsod of Cebu City on December 2, 1996 and April 20, 1998,... respectively[6]) to
read as follows:
Section 42. Rate of Tax. - There shall be paid to the Office of the City Treasurer by the
proprietors, lessees or operators of theaters, cinemas, concert halls, circuses and other
similar places of entertainment, an amusement tax at the rate of thirty percent
(30%), golf courses and polo grounds at the rate of twenty percent (20%), of their gross
receipts on entrance, playing green, and/or admission fees; PROVIDED, HOWEVER,
That in case of movie premieres or gala shows for the benefit of a charitable
institution/foundation or... any government institution where higher admission fees are
charged, the aforementioned rate of thirty percent (30%) shall be levied against the gross
receipts based on the regular admission fees, subject to the approval of the Sangguniang
Panlungsod; PROVIDED FURTHER, That in... case payment of the amusement tax is
made promptly on or before the date hereinbelow prescribed, a rebate of five percent
(5%) on the aforementioned gross receipts shall be given to the proprietors, lessees or
operators of theaters; PROVIDED FURTHERMORE, that as an incentive to... theater
operators who own the real property and/or building where the theater is located, an
additional one percent (1%) rebate shall be given to said operator/real property owner
concerned for as long as their theater/movie houses are then (10) years old or older or the
theater... or movie house is located at the city's redevelopment area bounded on the north
by Gen. Maxilom Street up to the port area; on the south by V. Rama Avenue up to San
Nicolas area; and on the west by B. Rodriguez St. and General Maxilom Avenue;
PROVIDED FINALLY, that the proceeds... of this additional one percent (1%) rebate
shall be used by the building/property owner-theater operator to modernize their theater
facilities. (Emphases supplied.)
Petitioner reasoned that under the Local Government Code, amusement tax can only be
imposed on operators of theaters, cinemas, concert halls, or places where one seeks
to entertain himself by seeing or viewing a show or performance. Petitioner further
cited the ruling in
Philippine Basketball Association (PBA) v. Court of Appeals[9] that under Presidential
Decree No. 231, otherwise known as the Local Tax Code of 1973, the province could
only impose amusement tax on admission from the proprietors, lessees, or... operators
of theaters, cinematographs, concert halls, circuses, and other places of amusement, but
not professional basketball games. Professional basketball games did not fall under the
same category as theaters, cinematographs, concert halls, and circuses as the latter...
basically belong to artistic forms of entertainment while the former catered to sports
and gaming.
Issues:
WHETHER OR NOT THE CITY OF CEBU OR ANY LOCAL GOVERNMENT CAN
VALIDLY IMPOSE AMUSEMENT TAX TO THE ACT OF PLAYING GOLF.
Ruling: NO
Section 42 of the Revised Omnibus
Tax Ordinance, as amended, imposing... amusement tax on golf courses is null... and void
as it is beyond the authority of... respondent Cebu City to enact under the
Local Government Code.
Principles:
The Local Government Code authorizes the imposition by local government units of
amusement tax under Section 140, which provides:
Sec. 140. Amusement Tax. - (a) The province may levy an amusement tax to be collected
from the proprietors, lessees, or operators of theaters, cinemas, concert halls, circuses,
boxing stadia, and other places of amusement at a rate of not more than... thirty percent
(30%) of the gross receipts from admission fees.
"Amusement places," as defined in Section 131 (c) of the Local Government Code,
"include theaters, cinemas, concert halls, circuses and other places of amusement
where one seeks admission to entertain oneself by seeing or viewing the show or
performance."
The pronouncements of the Court in Pelizloy Realty Corporation v. The Province of
Benguet[36] are of particular significance to this case. The Court, in Pelizloy Realty,
declared null and void the second paragraph... of Article X, Section 59 of the Benguet
Provincial Code, in so far as it imposes amusement taxes on admission fees to resorts,
swimming pools, bath houses, hot springs, and tourist spots. Applying the principle of
ejusdem generis, as well as the ruling in the PBA... case, the Court expounded on the
authority of local government units to impose amusement tax under Section 140, in
relation to Section 131(c), of the Local Government Code, as follows:
Under the principle of ejusdem generis, "where a general word or phrase follows an
enumeration of particular and specific words of the same class or where the latter
follow the former, the general word or phrase is to be construed to include, or to
be... restricted to persons, things or cases akin to, resembling, or of the same kind or
class as those specifically mentioned."
 In Philippine Basketball Association v. Court of Appeals, the Supreme Court had an
opportunity to interpret a starkly similar provision or the counterpart provision of Section
140 of the LGC in the Local Tax Code then in effect. Petitioner Philippine Basketball
Association (PBA) contended that it was subject to the imposition by LGUs of
amusement taxes (as opposed to amusement taxes imposed by the national government).
In support of its contentions, it cited Section 13 of Presidential Decree No. 231, otherwise
known as the Local Tax
Code of 1973, (which is analogous to Section 140 of the LGC) providing the following:
Section 13. Amusement tax on admission. — The province shall impose a tax on
admission to be collected from the proprietors, lessees, or operators of theaters,
cinematographs, concert halls, circuses and other places of amusement xxx.
Applying the principle of ejusdem generis, the Supreme Court rejected PBA's assertions
and noted that:
[I]n determining the meaning of the phrase 'other places of amusement', one must refer to
the prior enumeration of theaters, cinematographs, concert halls and circuses with
artistic expression as their common characteristic. Professional basketball games do...
not fall under the same category as theaters, cinematographs, concert halls and circuses as
the latter basically belong to artistic forms of entertainment while the former caters
to sports and gaming.
Indeed, theaters, cinemas, concert halls, circuses, and boxing stadia are bound by a
common typifying characteristic in that they are all venues primarily for the staging of
spectacles or the holding of public shows, exhibitions, performances, and other events
meant to be... viewed by an audience. Accordingly, 'other places of amusement' must be
interpreted in light of the typifying characteristic of being venues "where one seeks
admission to entertain oneself by seeing or viewing the show or performances" or being
venues primarily used to stage... spectacles or hold public shows, exhibitions,
performances, and other events meant to be viewed by an audience.
As defined in The New Oxford American Dictionary, 'show' means "a spectacle or
display of something, typically an impressive one"; while 'performance' means "an
act of staging or presenting a play, a conceit, or other form of entertainment." As
such, the ordinary definitions... of the words 'show' and 'performance' denote not
only visual engagement (i.e., the seeing or viewing of things) but also active doing
(e.g., displaying, staging or presenting) such that actions are manifested to, and
(correspondingly) perceived by an... audience.
In light of Pelizloy Realty, a golf course cannot be considered a place of
amusement.As petitioner asserted, people do not enter a golf course to see or view a
show or performance. Petitioner also, as proprietor or operator of the golf course,
does not actively display,... stage, or present a show or performance. People go to a
golf course to engage themselves in a physical sport activity, i.e., to play golf; the
same reason why people go to a gym or court to play badminton or tennis or to a
shooting range for target practice, yet there is... no showing herein that such gym,
court, or shooting range is similarly considered an amusement place subject to
 amusement tax. There is no basis for singling out golf courses for amusement tax
purposes from other places where people go to play sports. This is in contravention of...
one of the fundamental principles of local taxation: that the "[taxation shall be
uniform in each local government unit."[38] Uniformity of taxation, like the kindred
concept of equal protection, requires that all subjects or objects of taxation,
similarly... situated, are to be treated alike both in privileges and liabilities.[39]
Not lost on the Court is its declaration in Manila Electric Co. v. Province of Laguna[40]
that under the 1987 Constitution, "where there is neither a grant nor a prohibition by
statute, the tax power [of local government units] must be deemed to... exist although
Congress may provide statutory limitations and guidelines." Section 186 of the Local
Government Code also expressly grants local government units the following residual
power to tax:
Sec. 186. Power to Levy Other Taxes, Fees, or Charges. - Local government units may
exercise the power to levy taxes, fees, or charges on any base or subject not otherwise
specifically enumerated herein or taxed under the provisions of the National Internal
Revenue Code, as amended, or other applicable laws: Provided, that the taxes, fees, or
charges shall not be unjust, excessive, oppressive, confiscatory or contrary to declared
national policy: Provided, further, That the ordinance levying such taxes, fees or...
charges shall not be enacted without any prior public hearing conducted for the purpose.
(Emphasis supplied.)
Respondents, however, cannot claim that Section 42 of the Revised Omnibus Tax
Ordinance, as amended, imposing amusement tax on golf courses, was enacted pursuant
to the residual power to tax of respondent Cebu City. A local government unit may
exercise its residual power to tax... when there is neither a grant nor a prohibition by
statute; or when such taxes, fees, or charges are not otherwise specifically enumerated in
the Local Government Code, National Internal Revenue Code, as amended, or other
applicable laws. In the present case, Section 140, in... relation to Section 131(c), of the
Local Government Code already explicitly and clearly cover amusement tax and
respondent Cebu City must exercise its authority to impose amusement tax within the
limitations and guidelines as set forth in said statutory provisions.

3. Attorneys Humberto Basco, Eldiberto Balce, Socrates Maranan, and Lorenzo

Sanchez v. Philippine Amusements and Gaming Corporation 1991
Re: Principle of Local Autonomy

FACTS: The Philippine Amusements and Gaming Corporation (PAGCOR) was created by
virtue of P.D. 1067-A dated January 1, 1977 and was granted a franchise under P.D. 1067-B also
dated January 1, 1977 «to establish, operate and maintain gambling casinos on land or water
within the territorial jurisdiction of the Philippines.» Its operation was originally conducted in the
well known floating casino «Philippine Tourist.» The operation was considered a success for it
proved to be a potential source of revenue to fund infrastructure and socio-economic projects,
thus, P.D. 1399 was passed on June 2, 1978 for PAGCOR to fully attain this objective.

Subsequently, on July 11, 1983, PAGCOR was created under P.D. 1869 to enable the
Government to regulate and centralize all games of chance authorized by existing franchise or
permitted by law.

The petitioners, are questioning the validity of P.D. No. 1869. They allege among others that the
same is «null and void» for being «contrary to morals, public policy and public order,»
monopolistic and tends toward «crony economy». They also contend that PD 1869 constitutes
a waiver of the right of the City of Manila to impose taxes and legal fees; that the
exemption clause in P.D. 1869 is violative of the principle of local autonomy.

ISSUES:
(1) WON it waived the Manila City gov't's right to impose taxes and license fees, which is
recognized by law.

(2) WON it has intruded into the LGUs' right to impose local taxes and license fees, and thus
contrary to the principle of local autonomy enshrined in the Constitution.

(3) WON it violates the equal protection clause as it allows some gambling acts but also
prohibits other gaming acts.

(4) WON it violates the Cory  gov't's policy of being away from monopolistic and crony
economy, and toward free enterprise and privatization.

HELD:
(1) No. The fact that PAGCOR, under its charter, is exempt from paying tax of any kind is not
violative of the principle of local autonomy. LGUs' have no inherent right to impose taxes.
LGUs' power to tax must always yield to a legislative act which is superior having been
passed by the state itself which has the inherent power to tax. The charter of LGUs is
subject to control by Congress as they are mere creatures of Congress. Congress, therefore,
has the power of control over LGUs. And if Congress can grant the City of Manila the
power to tax certain matters, it can also provide for exemptions or even take back the
power.

(2) No. LGUs' right to impose license fees on "gambling", has long been revoked. As early as
1975, the power of local governments to regulate gambling thru the grant of "franchise, licenses
or permits" was withdrawn by P.D. No. 771 and was vested exclusively on the National
Government. Furthermore, LGUs' have no power to tax instrumentalities of the gov't such as
PAGCOR which exercises governmental functions of regulating gambling activities.

(3) No.  The clause does not preclude classification of individuals who may be accorded different
treatment under the law as long as the classification is not unreasonable or arbitrary. A law does
not have to operate in equal force on all persons or things to be conformable to Article III,
Section 1 of the Constitution. The Constitution does not require situations which are
different in fact or opinion to be treated in law as though they were the same.

(4) No. The judiciary does not settle policy issues. The Court can only declare what the law is
and not what the law should be. Under our system of government, policy issues are within the
domain of the political branches of government and of the people themselves as the repository of
all state power. On the issue of monopoly, the same is not necessarily prohibited by the
Constitution. The state must still decide whether public interest demands that monopolies be
"regulated" or prohibited. Again, this is a matter of policy for the Legislature to decide. The
judiciary can only intervene when there are violations of the statutes passed by Congress
regulating or prohibiting monopolies.

ISSUE: W/N the City of Manila has the right to impose taxes on PAGCOR

HELD: The City of Manila, being a mere Municipal corporation has no inherent right to impose
taxes. Thus, «the Charter or statute must plainly show an intent to confer that power or the
municipality cannot assume it». Its «power to tax» therefore must always yield to a legislative
act which is superior having been passed upon by the state itself which has the «inherent power
to tax» (Bernas, the Revised [1973] Philippine Constitution, Vol. 1, 1983 ed. p. 445).
Local governments have no power to tax instrumentalities of the National
Government. PAGCOR is a government owned or controlled corporation with an original
charter, PD 1869. All of its shares of stocks are owned by the National Government.
The power of local government to «impose taxes and fees» is always subject to «limitations»
which Congress may provide by law. Since PD 1869 remains an «operative» law until
«amended, repealed or revoked» (Sec. 3, Art. XVIII, 1987 Constitution), its «exemption clause»
remains as an exception to the exercise of the power of local governments to impose taxes and
fees. It cannot therefore be violative but rather is consistent with the principle of local autonomy.
Besides, the principle of local autonomy under the 1987 Constitution simply means
«decentralization» (III Records of the 1987 Constitutional Commission, pp. 435-436, as cited in
Bernas, The Constitution of the Republic of the Philippines, Vol. II, First Ed., 1988, p. 374). It
does not make local governments sovereign within the state or an

4. Bagatsing v. Ramirez 1976

Facts:
On June 12, 1974, the Municipal Board of Manila enacted Ordinance No. 7522,... The petitioner
City
Mayor, Ramon D. Bagatsing, approved the ordinance... respondent Federation of Manila Market
Vendors, Inc. commenced Civil Case 96787 before the Court of First Instance of Manila,
presided over by respondent Judge, seeking the declaration of nullity of Ordinance No. 7522 for
the reason that (a) the... publication requirement under the Revised Charter of the City of
Manila has not been complied with; (b) the Market Committee was not given any
participation in the enactment of the ordinance, as envisioned by Republic Act 6039; (c)
Section 3 (e) of the Anti-Graft and Corrupt
Practices Act has been violated; and (d) the ordinance would violate Presidential Decree
No. 7 of September 30, 1972 prescribing the collection of fees and charges on livestock and
animal products.
respondent Judge issued an order... denying the plea for failure of the respondent Federation of
Manila Market Vendors, Inc. to exhaust the administrative remedies outlined... in the Local Tax
Code.
respondent Judge rendered its decision... declaring the nullity of Ordinance No. 7522 of the City
of Manila on the primary ground of non-compliance with the requirement of publication under
the Revised City Charter.
Petitioners moved for reconsideration of the adverse decision, stressing that (a) only a post-
publication is required by the Local Tax Code; and (b) private respondent failed to exhaust all
administrative remedies before instituting an action in court.
respondent Judge denied the motion.
Issues:
what law shall govern the publication of a tax ordinance enacted by the Municipal Board of
Manila, the Revised City Charter (R.A. 409, as amended)... or the Local Tax Code (P.D. No.
231)
Ruling:
The nexus of the present controversy is the apparent conflict between the Revised Charter of the
City of Manila and the Local Tax Code on the manner of publishing a tax ordinance enacted by
the Municipal Board of Manila.
while the Revised Charter of the City of Manila requires publication before the enactment of the
ordinance and after  the approval thereof in two daily newspapers of general circulation in the
city, the Local Tax Code only prescribes... for publication after the approval of "ordinances
levying or imposing  taxes, fees or other charges" either in a newspaper or publication widely
circulated within the jurisdiction of the local government or by posting the ordinance in the local
legislative hall or... premises and in two other conspicuous places within the territorial juris-
diction of the local government.
Petitioners' compliance with the Local Tax Code rather than with the Revised Charter of the City
spawned this litigation.
The fact that one is special and the other general creates a presumption that the special is to be
considered as remaining an exception to the general, one as a general law of the land, the other as
the law of a particular case.[2]  However,... the rule readily yields to a situation where the special
statute refers to a subject in general, which the general statute treats in particular.
That exactly is the circumstance obtaining in the case at bar.  Section 17 of the Revised Charter
of the City of
Manila speaks of "ordinance" in general, i.e., irrespective of the nature and scope thereof,
whereas, Section 43 of the Local Tax Code relates to "ordinances levying or imposing taxes, fees
or other charges" in particular.
The principle of exhaustion of administrative remedies is strongly asserted by petitioners as
having been violated by private respondent in bringing a direct suit in court.
the petition below plainly shows that the controversy between the parties is deeply rooted in a
pure question of law:... the dispute is sharply focused on the applicability of the Revised City
Charter or the Local Tax Code on the point at issue, and not on the legality of the imposition of
the tax.  Exhaustion... of administrative remedies before resort to judicial bodies is not an
absolute rule.  It admits of exceptions.  Where the question litigated upon is purely a legal one,
the rule does not apply.
The non-participation of the Market Committee in the enactment of Ordinance
The function of the... committee is purely recommendatory as the underscored phrase suggests,
its recommendation is without binding effect on the Municipal Board and the City Mayor.  Its
prior acquiescence of an intended or proposed city ordinance is not a condition sine qua non
before... the Municipal Board could enact such ordinance.
Principles:
published at all in two daily newspapers of general circulation in the City of Manila before its
enactment.  Neither was it published in the same manner after approval, although it was posted in
the... legislative hall and in all city public markets and city public libraries.  There being no
compliance with the mandatory requirement of publication before and after approval, the
ordinance in question is invalid and, therefore, null and void."
The fact that one is special and the other general creates a presumption that the special is to be
considered as remaining an exception to the general, one as a general law of the land, the other as
the law of a particular case.[2]  However,... the rule readily yields to a situation where the special
statute refers to a subject in general, which the general statute treats in particular.
A chartered city is not an independent sovereignty.  The state remains supreme in all matters not
purely local.  Otherwise stated, a charter must yield to the constitution and general laws... of the
state, it is to have read into it that general law which governs the municipal corporation and
which the corporation cannot set aside but to which it must yield.  When a city adopts a charter,
it in effect adopts as part of its charter general law of such... character.
Exhaustion... of administrative remedies before resort to judicial bodies is not an absolute rule. 
It admits of exceptions.  Where the question litigated upon is purely a legal one, the rule does not
apply.
The principle may also be disregarded when it... does not provide a plain, speedy and adequate
remedy.  It may and should be relaxed when its application may cause great and irreparable
damage.
Potestas delegata non delegare potest
The right to tax depends upon the ultimate use, purpose and object for which the fund is raised. 
It is not dependent on the nature or character of the person or corporation whose intermediate
agency is to be used in applying it.  The people may be... taxed for a public purpose, although it
be under the direction of an individual or private corporation.

5. Batangas city v. Pilipinas Shell Petroleum Corporation 2015

Facts:
on February 20, 2001, petitioner Batangas City, through its City Legal Officer, sent a notice of
assessment to respondent... demanding the payment of P92,373,720.50 and P312,656,253.04
as business taxes for its manufacture and distribution of petroleum products.
In response, respondent filed a protest on April 17, 2002 contending among others that it is not
liable for the payment of the local business tax either as a manufacturer or distributor of
petroleum products. It further argued that the Mayor's Permit Fees are exorbitant,...
confiscatory, arbitrary, unreasonable and not commensurable with the cost of issuing a
license.
In a Decision dated June 21, 2007, the CTA Second Division granted respondent's petition. It
held that respondent is not subject to the business taxes on the manufacture and distribution of
petroleum products because of the express limitation provided under Section 133(h) of the
LGC... petitioners assert that any activity that involves the production or manufacture and the
distribution or selling of any kind or nature as a means of livelihood or with a view to profit can
be taxed by the LGUs. They posit that the authority granted to them by
Section 143(h) of the LGC  is  so broad that it practically covers any business that the
sanggunian concerned may deem proper to tax, even including businesses which are already
subject to excise, value-added or percentage tax under the National Internal Revenue
Code (NIRC) provided
Issues:
whether a LGU is empowered under the LGC to impose business taxes on persons or entities
engaged in the business of manufacturing and distribution of petroleum products.
Ruling:
Principles:
Among the common limitations on the taxing powers of LGUs under Section 133 of the LGC is
paragraph (h) which states:
SECTION 133. Common Limitations on the Taxing Powers of Local Government Units. -
Unless otherwise provided herein, the exercise of taxing powers of provinces, cities,
municipalities, and barangays shall not extend to the levy of the following:
XXXX
(h) Excise taxes on articles enumerated under the National Internal Revenue Code, as
amended, and taxes, fees or charges on petroleum products.;[13]
From the foregoing, Section 133(h) clearly specifies the two kinds of taxes which cannot be
imposed by LGUs: (1) excise taxes on articles enumerated under the NIRC, as amended;
and (2) taxes, fees or charges on petroleum products
Indisputably, the power of LGUs to impose business taxes derives from Section 143[14] of
the LGC. However, the same is subject to the explicit... statutory impediment provided for under
Section 133(h) of the same Code which prohibits LGUs from imposing "taxes, fees or
charges on petroleum products." It can, therefore, be deduced that although petroleum
products are subject to excise tax, the same is specifically excluded... from the broad power
granted to LGUs under Section 143(h) of the LGC to impose business taxes.
Additionally, Section 133(h) of the LGC makes plain that the prohibition with respect to
petroleum products extends not only to excise taxes thereon, but all "taxes, fees or
charges." The earlier reference in paragraph 143(h) to excise taxes comprehends a wider range
of subject... of taxation: all articles already covered by excise taxation under the NIRC, such
as alcohol products, tobacco products, mineral products, automobiles, and such non-
essential goods as jewelry, goods made of precious metals, perfumes, and yachts and other
vessels intended for... pleasure or sports. In contrast, the later reference to "taxes, fees and
charges" pertains only to one class of articles of the many subjects of excise taxes,
specifically, "petroleum products." While LGUs are authorized to burden all such other
class of goods with "taxes, fees... and charges," excepting excise taxes, a specific prohibition
is imposed barring the levying of any other type of taxes with respect to petroleum
products.[15]
It is likewise irrefutable that the specific exemption provided under Section 133 of the LGC
prevails over Section 143 of the same Code.
First, Section 133 of the LGC is a specific provision that explicitly withhold from LGUs the
power to impose taxes, fees and charges on petroleum products.
Strictly speaking, as long as the subject matter of the taxing powers of the LGUs is the
petroleum products per se or even the activity or privilege related to the petroleum
products, such as manufacturing and distribution of said products, it is covered by the
said... limitation and thus, no levy can be imposed.[16
Second, Article 232(h) of the Implementing Rules and Regulations (IRR) of the LGC of 1991
states:
ARTICLE 232.   Tax on Business. - The Municipality may impose taxes on the following
businesses:... x x x x
 
(h)
On any business not otherwise specified in the preceding paragraphs which the sanggunian
concerned may deem proper to tax provided that that on any business subject to the excise tax.
VAT or percentage tax under the NIRC, as amended, the rate of tax shall... not exceed two
percent (2%) of gross sales or receipts of the preceding calendar year and provided further, that
in line with existing national policy, any business engaged in the production, manufacture,
refining, distribution or sale of oil, gasoline, and other petroleum... products shall not be subject
to any local tax imposed in this Article.[18]
Article 232 defines with more particularity the capacity of a municipality to impose taxes on
businesses. However, it admits of certain exceptions, specifically, that businesses engaged in the
production, manufacture, refining, distribution or sale of oil, gasoline, and other... petroleum
products, shall not be subject to any local tax imposed by Article 232.

ISSUE: Does Batangas have the power to collect taxes from Shell on its manufacture and
distribution of petroleum products?

HELD: No, Batangas does not have said power under the Local Government Code.

Section 133 of the LGC puts a limitation on LGUs power to tax. They shall have no power to
levy taxes, fees or charges on petroleum products. Thus, the omnibus grant of power to LGUs
under Section 143(h) of the LGC cannot overcome the specific exception or exemption in
Section 133(h) of the same Code.
 
6. Batangas Power Corporation vs. Batangas City, G.R. No. 152675, April 28, 2004
Facts:
In the early 1990s, power outages lasted 8-12 hours daily and power generation was badly
needed. Thegovernment, through the National Power Corporation (NPC), sought to attract
investors in power plant operations byproviding them with incentives, one of which was through
the
NPCs assumption of payment of their taxes
in the BuildOperate and Transfer (BOT) Agreement.On June 29, 1992, Enron Power
Development Corporation (Enron) and petitioner NPC entered into a Fast Track BOTProject.
Enron agreed to supply a power station to NPC and transfer its plant to the latter after ten (10)
years of operation.Section 11.02 of the BOT Agreement provided that 
NPC shall be responsible for the payment of all taxes that may beimposed on the power station,
except income taxes and permit fees. Subsequently, Enron assigned its obligation under the BOT
Agreement to petitioner Batangas Power Corporation (BPC).
On September 23, 1992, the BOI issued a certificate of registration to BPC as a pioneer
enterprise entitled to a taxholiday for a period of six (6) years. On October 12, 1998, Batangas
City sent a letter to BPC demanding payment of business taxes and penalties, commencing from
the year 1994, BPC refused to pay, citing its tax-exempt status as apioneer enterprise for six (6)
years under Section 133 (g) of the Local Government Code (LGC). The citys tax claimwas
modified and demanded payment of business taxes from BPC only for the years 1998-1999.
 BPC still refused to paythe tax. It insisted that its 6-year tax holiday commenced from the date
of its commercial operation on July 16,1993, not from the date of its BOI registration in
September 1992.In the alternative, BPC asserted that the city should collect the tax from the
NPCas the latter assumed responsibilityfor its payment  under their BOT Agreement . On August
26, 1999, the NPC intervened. While admitting assumption of BPCs tax obligations under
their BOT Agreement, NPC refused to pay BPCs business tax as it  allegedly constituted
anindirect tax on NPC which is a tax-exempt corporation under its Charter . BPC filed a petition
for declaratory relief12 with the Makati RTC against Batangas City nd NPC. It alleged that
under theBOT Agreement, NPC is responsible for the payment of such taxes but as NPC is
exempt from taxes, both the BPCand NPC are not liable for its payment . Makati RTC dismissed
the petition and held that: (1) BPC is liable to pay business taxes to the city; (2) NPCs
taxexemption was withdrawn with the passage of R.A. No. 7160 (The Local Government Code);
and, (3) the 6-year taxholiday granted to pioneer business enterprises starts on the date of
registration with the BOI as provided in Section 133(g) of R.A. No. 7160, and not on the date of
its actual business operations.
Issue:
Whether or not NPCs tax exemption privileges under its Charter were withdrawn by Section
193 of the LocalGovernment Code (LGC).
Held:
Yes.
The effect of the LGC on the tax exemption privileges of the NPC has already been extensively
discussed andsettled in the recent case of National Power Corporation v. City of Cabanatuan.
In said case, this Court recognized the removal of the blanket exclusion of government
instrumentalities from local taxation as one of themost significant provisions of the 1991 LGC.
Specifically, we stressed that Section 193 of the LGC, an express andgeneral repeal of all
statutes granting exemptions from local taxes, withdrew the sweeping tax privileges
previouslyenjoyed by the NPC under its Charter.
The power to tax is no longer vested exclusively on Congress; local legislative bodies are now
given direct authority tolevy taxes, fees and other charges pursuant to Article X, section 5 of the
1987 Constitution. The LGC is considered as themost revolutionary piece of legislation on local
autonomy, the LGC effectively deals with the fiscal constraints faced byLGUs. It widens the tax
base of LGUs to include taxes which were prohibited by previous laws.Neither can the NPC
successfully rely on the Basco case as this was decided prior to the effectivity of the LGC,
whenthere was still no law empowering local government units to tax instrumentalities of the
national government.
Thus, while the BPC remains to be the entity doing business in said city, it is the NPC that is
liable to pay said taxes under the provisions of both the 1992 BOT Agreement and the 1991
LGC.
Other Issue: WON BPC’s 6-year tax holiday commenced on the date of its BOI registration as a
pioneer enterprise or on the date of its actual commercial operation as certified by the BOI.
Sec 133 (g) of the LGC, which proscribes local government units from levying taxes on BOI-
certified pioneer enterprises for a special period of 6 years from the date of registration, applies
specially to taxes imposed by the local government, like the business tax imposed by Batangas
city on BPC in the case at bar. The 6-year tax exemption of BPC should thus commence from
the date of BPC’s registration with the BOI.

7. Binay v. Domingo 1991

FACTS
The Municipality of Makati approved Resolution No. 60 which confirms and ratifies the ongoing
Burial Assistance Program initiated by the Mayor. Under the program, bereaved families of
Makati whose gross family income does not exceed Php 2,000.00 a month shall be its qualified
beneficiaries and shall receive an amount of Php 500.00 as relief.
When the resolution was referred to the Commission on Audit, the latter disapproved the same
and disallowed in audit the disbursement of funds for the implementation of the program. In
denying the Mayor’s letters of consideration, the COA establsihed that there is no relation
between the objective sought by the Resolution and the alleged general welfare of the people of
Makati. It opined that there must always be an obvious and real connection between the actual
provisions of a police regulation and its avowed purpose, and the regulation adopted must be
reasonable adapted to accomplish it. Further, it asserted that it should be for the benefit of the
whole not only a few individuals.
Despite reaffirming the resolution, the COA stayed the program which constrained the
petitioners to file a special civil action for certiorari.
ISSUE
Whether or not Resolution No. 60 as re-enacted by the Municipality of Makati is a valid exercise
of police power under the general welfare clause.
RULING
The Court ruled in favor of the petitioners. First, although the COA suggested that there is no
connection between the objective of the resolution and the alleged public safety or general
welfare of the inhabitants of Makati, the Court ruled that police power is not capable of exact
definition but has been veiled to underscore its all-comprehensiveness. The police power of
municipal corporation is broad and said to be commensurate with, but shall not exceed, the duty
to provide the real needs of the people in their health, safety, comfort and convenience.
Second, public purpose is not unconstitutional merely because it incidentally benefits a limited
number of persons. As pointed by the Solicitor-General, the social welfare legislations geared
towards the promotion of general welfare, social justice and human dignity and respect for
human rights. It has been held by the Court that the support for the poor has been an accepted
exercise of police power in the promotion of common good. Resolution No. 60 is a program
towards social justice which relieves the poor from the painful experience of bereavement.
Hence, it vivifies that those who have less in life should have more in law.
1. The police power is a governmental function, an inherent attribute of sovereignty, which was
born with civilized government. It is founded largely on the maxims, "Sic utere tuo et ahenum
non laedas and "Salus populi est suprema lex. Its fundamental purpose is securing the general
welfare, comfort and convenience of the people.

Police power is inherent in the state but not in municipal corporations. Before a municipal
corporation may exercise such power, there must be a valid delegation of such power by the
legislature which is the repository of the inherent powers of the State.

Municipal governments exercise this power under the general welfare clause. Pursuant thereto
they are clothed with authority to "enact such ordinances and issue such regulations as may be
necessary to carry out and discharge the responsibilities conferred upon it by law, and such as
shall be necessary and proper to provide for the health, safety, comfort and convenience,
maintain peace and order, improve public morals, promote the prosperity and general welfare of
the municipality and the inhabitants thereof, and insure the protection of property therein.
2. Police power is not capable of an exact definition but has been, purposely, veiled in general
terms to underscore its all comprehensiveness. Its scope, over-expanding to meet the exigencies
of the times, even to anticipate the future where it could be done, provides enough room for an
efficient and flexible response to conditions and circumstances thus assuring the greatest
benefits.

The police power of a municipal corporation is broad, and has been said to be commensurate
with, but not to exceed, the duty to provide for the real needs of the people in their health, safety,
comfort, and convenience as consistently as may be with private rights. It extends to all the great
public needs, and, in a broad sense includes all legislation and almost every function of the
municipal government. It covers a wide scope of subjects, and, while it is especially occupied
with whatever affects the peace, security, health, morals, and general welfare of the community,
it is not limited thereto, but is broadened to deal with conditions which exists so as to bring out
of them the greatest welfare of the people by promoting public convenience or general
prosperity, and to everything worthwhile for the preservation of comfort of the inhabitants of the
corporation. Thus, it is deemed inadvisable to attempt to frame any definition which shall
absolutely indicate the limits of police power.

Public purpose is not unconstitutional merely because it incidentally benefits a limited number of
persons. As correctly pointed out by the Office of the Solicitor General, "the drift is towards
social welfare legislation geared towards state policies to provide adequate social services, the
promotion of the general welfare, social justice as well as human dignity and respect for human
rights." The care for the poor is generally recognized as a public duty. The support for the poor
has long been an accepted exercise of police power in the promotion of the common good.

3. There is no violation of the equal protection clause. Paupers may be reasonably classified.

Different groups may receive varying treatment. Precious to the hearts of our legislators, down to
our local councilors, is the welfare of the paupers. Thus, statutes have been passed giving rights
and benefits to the disabled, emancipating the tenant-farmer from the bondage of the soil,
housing the urban poor, etc. Resolution No. 60, re-enacted under Resolution No. 243, of the
Municipality of Makati is a paragon of the continuing program of our government towards social
justice. The Burial Assistance Program is a relief of pauperism, though not complete. The loss of
a member of a family is a painful experience, and it is more painful for the poor to be financially
burdened by such death. Resolution No. 60 vivifies the very words of the late President Ramon
Magsaysay 'those who have less in life, should have more in law." This decision, however must
not be taken as a precedent, or as an official go-signal for municipal governments to embark on a
philanthropic orgy of inordinate dole-outs for motives political or otherwise. (Binay vs
Domingo, G.R. No. 92389, September 11, 1991)