Professional Documents
Culture Documents
FACTS:
Ø In accordance with the State policy of environmental protection and ecology, navigational
safety, and sustainable development, Republic Act No. 4850 created the "Laguna Lake
Development Authority." This Government Agency is supposed to carry out the aforesaid declared
policy, so as to accelerate the development and balanced growth of the Laguna Lake area and the
surrounding provinces, cities and towns.
Ø Then came Republic Act No. 7160, the Local Government Code of 1991. The municipalities in
the Laguna Lake Region interpreted the provisions of this law to mean that the newly passed law
gave municipal governments the exclusive jurisdiction to issue fishing privileges within their
municipal waters because R.A. 7160 provides:
Sec. 149. Fishery Rentals, Fees and Charges.
(a) Municipalities shall have the exclusive authority to grant fishery privileges in the
municipal waters and impose rental fees or charges therefor in accordance with
the provisions of this Section.
Ø Municipal governments thereupon assumed the authority to issue fishing privileges and fishpen
permits. Big fishpen operators took advantage of the occasion to establish fishpens and fishcages
to the consternation of the Authority. Unregulated fishpens and fishcages, as of July, 1995,
occupied almost one-third of the entire lake water surface area, increasing the occupation
drastically from 7,000 hectares in 1990 to almost 21,000 hectares in 1995. The Mayor's permit to
construct fishpens and fishcages were all undertaken in violation of the policies adopted by the
Authority on fishpen zoning and the Laguna Lake carrying capacity.
Ø One month, thereafter, the Authority sent notices to the concerned owners of the illegally
constructed fishpens, fishcages and other aqua-culture structures advising them to dismantle their
respective structures within 10 days from receipt thereof, otherwise, demolition shall be effected.
ISSUE: Whether or not the powers granted to Laguna Lake Development Authority supersedes
that of the municipalities in the Laguna Lake Region.
THESIS: Yes, the powers granted to Laguna Lake Development Authority supersedes that of the
municipalities in the Laguna Lake Region.
RULING/ANALYSIS/CONCLUSION:
Police power is the power of the State to promote public welfare by restraining and regulating the
use of liberty and property. It is the most pervasive, the least limitable, and the most demanding of
the three fundamental powers of the State. The justification is found in the Latin maxims salus
populi est suprema lex (the welfare of the people is the supreme law) and sic utere tuo ut alienum
non laedas (so use your property so as not to injure others).[1]
In the case at bar, the power of the local government units to issue fishing privileges was clearly
granted for revenue purposes. This is evident from the fact that Section 149 of the New Local
Government Code empowering local governments to issue fishing permits is embodied in Chapter
2, Book II, of Republic Act No. 7160 under the heading, "Specific Provisions On The Taxing And
Other Revenue Raising Power Of Local Government Units."
On the other hand, the power of the Authority to grant permits for fishpens, fishcages and other
aqua-culture structures is for the purpose of effectively regulating and monitoring activities in the
Laguna de Bay region (Section 2, Executive Order No. 927) and for lake quality control and
management. It does partake of the nature of police power which is the most pervasive, the least
limitable and the most demanding of all State powers including the power of taxation. Accordingly,
the charter of the Authority which embodies a valid exercise of police power should prevail over the
Local Government Code of 1991 on matters affecting Laguna de Bay.
Thus, the powers granted to the Laguna Lake Development Authority supersedes that of the
municipalities in the Laguna Lake Region.
[1] Genochi v. Department of Energy, G.R. No. 159796, July 17, 2007, 527 SCRA 696
FACTS:
RA 7432 was passed into law (amended by RA 9257), granting senior citizens a
20% discount on certain establishments.
To implement the tax provisions of RA 9257, the Secretary of Finance and the
DSWD issued its own Rules and Regulations.
Petitioners are not questioning the 20% discount granted to senior citizens but
are only assailing the constitutionality of the tax deduction scheme prescribed
under RA 9257 and the implementing rules and regulations issued by the DSWD
and the Department of Finance.
Petitioners posit that the tax deduction scheme contravenes Article III, Section 9
of the Constitution, which provides that: "private property shall not be taken for
public use without just compensation."
Respondents maintain that the tax deduction scheme is a legitimate exercise of
the State’s police power.
ISSUE:
RULING:
The 20% discount is intended to improve the welfare of senior citizens who, at
their age, are less likely to be gainfully employed, more prone to illnesses and
other disabilities, and, thus, in need of subsidy in purchasing basic commodities. It
serves to honor senior citizens who presumably spent their lives on contributing to
the development and progress of the nation.
In turn, the subject regulation affects the pricing, and, hence, the profitability of a
private establishment.
The subject regulation may be said to be similar to, but with substantial
distinctions from, price control or rate of return on investment control laws which
are traditionally regarded as police power measures.
The subject regulation differs there from in that (1) the discount does not prevent
the establishments from adjusting the level of prices of their goods and services,
and (2) the discount does not apply to all customers of a given establishment but
only to the class of senior citizens. Nonetheless, to the degree material to the
resolution of this case, the 20% discount may be properly viewed as belonging to
the category of price regulatory measures which affect the profitability of
establishments subjected thereto. On its face, therefore, the subject regulation is a
police power measure.
Dissenting Opinion:
The main points of Justice Carpio’s Dissent may be summarized as follows: (1)
the discussion on eminent domain in Central Luzon Drug Corporation 89 is not
obiter dicta ; (2) allowable taking, in police power, is limited to property that is
destroyed or placed outside the commerce of man for public welfare; (3) the
amount of mandatory discount is private property within the ambit of Article III,
Section 990 of the Constitution; and (4) the permanent reduction in a private
establishment’s total revenue, arising from the mandatory discount, is a taking of
private property for public use or benefit, hence, an exercise of the power of
eminent domain requiring the payment of just compensation. I We maintain that
the discussion on eminent domain in Central Luzon Drug Corporation 91 is obiter
dicta. As previously discussed, in Central Luzon Drug Corporation, 92 the BIR,
pursuant to Sections 2.i and 4 of RR No. 2-94, treated the senior citizen discount
in the previous law, RA 7432, as a tax deduction instead of a tax credit despite the
clear provision in that law which stated –
SECTION 4. Privileges for the Senior Citizens. – The senior citizens shall be
entitled to the following:
Thus, the Court ruled that the subject revenue regulation violated the law, viz:
The 20 percent discount required by the law to be given to senior citizens is a tax
credit, not merely a tax deduction from the gross income or gross sale of the
establishment concerned. A tax credit is used by a private establishment only after
the tax has been computed; a tax deduction, before the tax is computed. RA 7432
unconditionally grants a tax credit to all covered entities. Thus, the provisions of
the revenue regulation that withdraw or modify such grant are void. Basic is the
rule that administrative regulations cannot amend or revoke the law.
As can be readily seen, the discussion on eminent domain was not necessary in
order to arrive at this conclusion. All that was needed was to point out that the
revenue regulation contravened the law which it sought to implement. And,
precisely, this was done in Central Luzon Drug Corporation 94 by comparing the
wording of the previous law vis-à-vis the revenue regulation; employing the rules
of statutory construction; and applying the settled principle that a regulation cannot
amend the law it seeks to implement. A close reading of Central Luzon Drug
Corporation95 would show that the Court went on to state that the tax credit "can
be deemed" as just compensation only to explain why the previous law provides
for a tax credit instead of a tax deduction. The Court surmised that the tax credit
was a form of just compensation given to the establishments covered by the 20%
discount. However, the reason why the previous law provided for a tax credit and
not a tax deduction was not necessary to resolve the issue as to whether the
revenue regulation contravenes the law. Hence, the discussion on eminent
domain is obiter dicta.
FACTS:
The Office of the Solicitor General, on behalf of Comelec alleged that the
resolution does not impose upon the publishers any obligation to provide free print
space in the newspapers. It merely established guidelines to be followed in
connection with the procurement of “Comelec space”. And if it is viewed as
mandatory, the same would nevertheless be valid as an exercise of the police
power of the State - a permissible exercise of the power of supervision or
regulation of the Comelec over the communication and information operations of
print media enterprises during the election period to safeguard and ensure a fair,
impartial and credible election.
ISSUE:
THESIS:
No, Section 2 of Resolution No. 2772 does not constitute a valid exercise of
the power of eminent domain.
RULING/ANALYSIS/CONCLUSION:
The threshold requisites for a lawful taking of private property for public use
are the necessity for the taking and the legal authority to effect the taking. The
element of necessity for the taking has not been shown by respondent Comelec. It
has not been suggested that the members of PPI are unwilling to sell print space
at their normal rates to Comelec for election purposes. Indeed, the unwillingness
or reluctance of Comelec to buy print space lies at the heart of the problem.
The taking of private property for public use is, of course, authorized
by the Constitution, but not without payment of “just compensation” (Article
III, Section 9). And apparently the necessity of paying compensation for “Comelec
space” is precisely what is sought to be avoided by respondent Commission.
FACTS:
Sec. 92. Comelec time. — The commission shall procure radio and television
time to be known as “Comelec Time” which shall be allocated equally and
impartially among the candidates within the area of coverage of all radio and
television stations. For this purpose, the franchise of all radio broadcasting
and television stations are hereby amended so as to provide radio or
television time, free of charge, during the period of the campaign.
Petitioners contend that §92 of BP Blg. 881 violates the due process clause and
the eminent domain provision of the Constitution by taking airtime from radio and
television broadcasting stations without payment of just compensation. Petitioners
claim that the primary source of revenue of the radio and television stations is the
sale of airtime to advertisers and that to require these stations to provide free
airtime is to authorize a taking which is not “a de minimis temporary limitation or
restraint upon the use of private property.” According to petitioners, in 1992, the
GMA Network, Inc. lost P22,498,560.00 in providing free airtime of one (1) hour
every morning from Mondays to Fridays and one (1) hour on Tuesdays and
Thursdays from 7:00 to 8:00 p.m. (prime time) and, in this year’s elections, it
stands to lose P58,980,850.00 in view of COMELEC’s requirement that radio and
television stations provide at least 30 minutes of prime time daily for the
COMELEC Time.
ISSUE:
Whether or not Section 92 of BP. Blg. 881 violative of the due process clause and
unlawful taking of private property for public use without just compensation?
RULING:
No, Section 92 of BP. Blg. 881 is not violative of the due process clause and
unlawful taking of private property for public use without just compensation.
The 1987 Constitution recognizes the existence of that power when it provides:
“Sec. 6. The use of property bears a social function, and all economic agents shall
contribute to the common good. Individuals and private groups, including
corporations, cooperatives, and similar collective organizations, shall have the
right to own, establish, and operate economic enterprises, subject to the duty of
the State to promote distributive justice and to intervene when the common good
so demands” (Article XII).
To affirm the validity of §92 of B.P. Blg. 881 is to hold public broadcasters to their
obligation to see to it that the variety and vigor of public debate on issues in an
election is maintained. For while broadcast media are not mere common carriers
but entities with free speech rights, they are also public trustees charged with the
duty of ensuring that the people have access to the diversity of views on political
issues. This right of the people is paramount to the autonomy of broadcast media.
To affirm the validity of §92, therefore, is likewise to uphold the people’s right to
information on matters of public concern. The use of property bears a social
function and is subject to the state’s duty to intervene for the common good.
Broadcast media can find their just and highest reward in the fact that whatever
altruistic service they may render in connection with the holding of elections is for
that common good.
FACTS:
- Dante Garin, a lawyer was issued a traffic violation receipt (TVR) and his
driver’s license confiscated for illegal parking in Binondo, Manila. The TVR
required him to appear before the MMDA Traffic Operations Center within
48 hours from date of apprehension for disposition/ appropriate action, that
a criminal case will be filed for failure to redeem license in 30 days and that
the TVR will serve as a valid temporary driver’s license
- Shortly before the expiration of the TVR, Garin sent a letter to the MMDA
Chairman Oreta requesting return of his license and expressing his
preference for his case to be filed in court.
- Receiving no reply, he filed the original complaint with application for
preliminary injunction contending the following:
- There was an absence of any implementing rules and regulations,
Sec 5 of RA 7924 grants unbridled discretion to deprive erring
motorists of their licenses, pre-empting judicial determination of the
validity of the deprivation, thereby violating the due process clause
of the constitution
- He also contended that the said provision violates the constitutional
prohibition against undue delegation of legislative authority, allowing
MMDA to fix and impose unspecified-and therefore unlimited- fines
and penalties to erring motorists
- MMDA represented by the Office of the Solicitor General, pointed out that
the powers granted to MMDA by Sec 5 of RA 7924 is limited to fixing,
collection and imposition of fines and penalties for traffic violations which
are legislative and executive in nature while it is still the judiciary who
retains the right to determine the validity of the penalty imposed.
- Garin also raised the issue that Metro Manila Council has yet to formulate
the implementing rules and regulations of Sec 5 RA 7924 but MMDA raised
that they have MMDA Memorandum Circular No TT-95-001 but Garin
claims that it was passed in the absence of a quorum
ISSUE:
- Whether or not MMDA could validity exercise police power
Thesis:
- No, MMDA does not have the authority to exercise police power
RULING:
- Police power, having been lodged primarily in the National Legislature,
cannot be exercised by any group/ individuals not possessing legislative
power. However, the National Legislature can validly delegate this power to
the law making bodies of the municipal corps or LGUs and once delegated,
these agents can only exercise such legislative powers as are conferred on
them by the national lawmaking body.
- In this case, the court ruled that there is no syllable in RA 7924 that grants
MCMDA police power.
- MMDA is primarily created for the purpose of laying down policies and
coordinating with the various national government agencies, people’s
organizations and the private sectors for the efficient and expeditious
delivery of basic services in the area. Therefore, its functions are
administrative in nature.
- Police power cannot be exercised by any group or body of individuals not
possessing legislative power such as in this case, the MMDA being purely
administrative in nature. Therefore, cannot validly exercise police power.
Ichong v Hernandez Lagdamat TOPIC─ Limitations: Due Process & Equal Protection
Ichong v. Hernandez, G.R. No. L-7995, May 31, 1957
Additional notes:
The due process clause has to do Facts:
with the reasonableness of
legislation enacted in pursuance ● Driven by aspirations for economic independence and national security, the Congress
of the police power. • The equal enacted Act No. 1180 entitled “An Act to Regulate the Retail Business.” The main
provisions of the Act, among others, are:
protection of the law clause is
against undue favor and (1) Prohibition against persons, not citizens of the Philippines, and against associations,
individual or class privilege, as among others, from engaging directly or indirectly in the retail trade; and
well as hostile discrimination or the
oppression of inequality. It does not (2) Prohibition against the establishment or opening by aliens actually engaged in the retail
demand absolute equality among business of additional stores or branches of retail business.
residents; it merely requires that all
persons shall be treated alike, ● Lao H. Ichong, in his own behalf and on behalf of other alien residents, corporations and
under like circumstances and partnerships adversely affected by the said Act, brought an action to obtain a judicial
conditions both as to privileges declaration, and to enjoin the Secretary of Finance, Jaime Hernandez, and all other
conferred and liabilities enforced. persons acting under him, particularly city and municipal treasurers, from enforcing its
provisions. Petitioner attacked the constitutionality of the Act, contending that:
● It denies to alien residents the equal protection of the laws and deprives of their liberty and
The Act was passed in the valid
exercise of the police power of property without due process of law.
the State, which exercise is ● The subject of the Act is not expressed or comprehended in the title thereof.
authorized in the Constitution in the ● The Act violates international and treaty obligations of the Republic of the Philippines.
interest of national economic
survival.
Issue: Whether or not RA No. 1180 violates alien residents of the following:
The enactment of RA 1180
(1) Equal protection of the law; and
clearly falls within the scope of the
police power of the State, through (2) Their liberty and property without due process as guaranteed by the
which and by which it protects its Constitution.
own personality and ensures its
security and future. If political Ruling/s:
independence is a legitimate (1) No,
aspiration of the people, then
economic independence is none of (2) No. The law is prospective in operation and recognizes the privilege of
less legitimate. Freedom and aliens already engaged in the occupation and reasonably protects their privilege.
liberty are not real and positive, if
the people are subject to the The test of reasonableness of a law is the appropriateness or adequacy under
all circumstances of the means adopted to carry out its purpose into effect. Judged
economic control and domination
by this test, the disputed legislation, which is not merely reasonable but actually
of others, especially if not of their necessary, must be considered not to have infringed the constitutional limitation of
own race or country. The law in reasonableness.
question is deemed absolutely
necessary to bring about the
desired legislative objective, i.e.,
to free the national economy from
alien control and dominance.
Taxicab Operators of Metro Manila, Tampepe TOPIC─ Limitations: Due Process & Equal Protection
Inc v Board of Transportation TAXICAB OPERATORS OF METRO MANILA, INC. V.
BOARD OF TRANSPORTATION
G.R. No. L-59234, September 30, 1982
Facts:
To ensure that only safe and comfortable units are used as public
conveyances and in order that the commuting public may be assured of comfort,
convenience, and safety, the Board of Transportation (BOT) issued Memorandum
Circular phasing out the old and dilapidated taxis. Pursuant to OT circular,
respondent Director of the Bureau of Land Transportation (BLT) issued
Implementing Circular formulating a schedule of phase-out of vehicles to be
allowed and accepted for registration as public conveyances. The Taxicab
Operators of Metro Manila, Inc., Felicisimo Cabigao and Ace Transportation filed a
petition for "Certiorari, Prohibition and mandamus with Preliminary Injunction and
Temporary Restraining Order", to declare the nullity of Memorandum Circular of
the BOT and Memorandum Circular of the BLT.
Issue/s:
Ratio/s:
2) No, there was no denial of due process since calling the taxicab
operators or persons who may be affected by the questioned Circulars to a
conference or requiring them to submit position papers or other documents is
only one of the options open to the BOT which is given wide discretionary
authority under P.D. No. 101; and fixing a six- year ceiling for a car to be
operated as taxicab is a reasonable standard adopted to apply to all vehicles
affected uniformly, fairly, and justly.
NOTA BENE:
City of Manila v Laguio Tingzon Topic: Due Process and Equal Protection
It built and opened Victoria Court in Malate which was licensed as a motel
although duly accredited with the DOT as a hotel. On 28 June 1993, MTDC filed a
Petition for Declaratory Relief with Prayer for a Writ of Preliminary Injunction
and/or Temporary Restraining Order7 with the lower court impleading as
defendants, herein petitioners City of Manila, Hon. Alfredo S. Lim (Lim), Hon.
Joselito L. Atienza, and the members of the City Council of Manila (City Council).
MTDC prayed that the Ordinance, insofar as it includes motels and inns as among
its prohibited establishments, be declared invalid and unconstitutional.
Enacted by the City Council and approved by petitioner City Mayor, the said
Ordinance is entitled–
On 11 January 1995, petitioners filed the present Petition, alleging that the
following errors were committed by the lower court in its ruling:
(1) It erred in concluding that the subject ordinance is ultra vires, or otherwise,
unfair, unreasonable and oppressive exercise of police power;
● (2) It erred in holding that the questioned Ordinance contravenes P.D. 499
which allows operators of all kinds of commercial establishments, except
those specified therein; and
(3) It erred in declaring the Ordinance void and unconstitutional.
HELD: The Court is of the opinion, and so holds, that the lower court did not err in
declaring the Ordinance, as it did, ultra vires and therefore null and void.
The tests of a valid ordinance are well established. A long line of decisions has
held that for an ordinance to be valid, it must not only be within the corporate
powers of the local government unit to enact and must be passed according to the
procedure prescribed by law, it must also conform to the following substantive
requirements:
(1) must not contravene the Constitution or any statute;
(2) must not be unfair or oppressive;
(3) must not be partial or discriminatory;
(4) must not prohibit but may regulate trade;
(5) must be general and consistent with public policy; and
(6) must not be unreasonable.
The Ordinance was passed by the City Council in the exercise of its police power,
an enactment of the City Council acting as agent of Congress. This delegated
police power is found in Section 16 of the LGC, known as the general welfare
clause.
The inquiry in this Petition is concerned with the validity of the exercise of such
delegated power.
In 1992, Mayor Alfredo S. Lim signed into law the Ordinance No. 7744 that
prohibits hotels, motels, inns, lodging houses, pension houses and similar
establishments from offering short-time admission, as well as pro-rated or “wash
up” rates or other similarly concocted terms, in the City of Manila.
The apparent goal of the Ordinance is to minimize if not eliminate the use of the
covered establishments for illicit sex, prostitution, drug use and alike.
Petitioners White Light Corporation (WLC) et. al. filed a petition on the ground that
the Ordinance directly affects their business interests as operators of drive-in-
hotels and motels in Manila.
CA reversed the decision and asserted that the Ordinance is a valid exercise of
police power.
ISSUE:
HELD:
NO.The ordinance is null and void as it indeed infringes upon individual liberty. It
also violates the due process clause which serves as a guaranty for protection
against arbitrary regulation or seizure. The said ordinance invades private rights.
Note that not all who goes into motels and hotels for wash up rate are really there
for obscene purposes only. Some are tourists who needed rest or to “wash up” or
to freshen up. Hence, the infidelity sought to be avoided by the said ordinance is
more or less subjected only to a limited group of people. The SC reiterates that
individual rights may be adversely affected only to the extent that may fairly be
required by the legitimate demands of public interest or public welfare.
Hence, Petition is GRANTED. The Decision of the Court of Appeals is
REVERSED.
DECS v San Diego Rosales TOPIC: C. Limitations: Due process & equal protection
FACTS:
Respondent San Diego has flunked the NMAT (National Medical Admission Test)
three times. When he applied to take again, petitioner rejected his application
based on the “three-flunk-rule”. He then filed a petition before the RTC on the
ground of due process and equal protection and challenging the constitutionality of
the order. The petition was granted by the RTC therefore this petition.
ISSUE:
Whether or not the “the three-flunk-rule” violates the equal protection clause.
RULING:
No, “the three-flunk-rule” does not violates the equal protection clause.
A law does not have to operate with equal force on all persons or things to be
conformable to Article III, Section 1 of the Constitution which states that No person
shall be deprived of life, liberty, or property without due process of law, nor shall
any person be denied the equal protection of the laws. What the equal protection
requires is equality among equals.
In the case at bar, there can be no question that a substantial distinction exists
between medical students and other students who are not subjected to the NMAT
and the three-flunk rule. The medical profession directly affects the very lives of
the people, unlike other careers which, for this reason, do not require more vigilant
regulation. The accountant, for example, while belonging to an equally respectable
profession, does not hold the same delicate responsibility as that of the physician
and so need not be similarly treated. There would be unequal protection if some
applicants who have passed the tests are admitted and others who have also
qualified are denied entrance. In other words, the equal protection requires is
equality among equals.
Thus, “the three-flunk-rule” does not violate the equal protection clause.
Del Rosario v Bengzon Acosta Topic: Limitations: Due process & equal protection
Facts:
On 15 March 1989, the full text of Republic Act 6675 was published in two
newspapers of general circulation in the Philippines.
The law took effect on 30 March 1989, 15 days after its publication, as provided in
Section 15 thereof. Section 7, Phase 3 of Administrative Order 62 was amended
by Administrative Order 76 dated 28 August 1989 by postponing to 1 January
1990 the effectivity of the sanctions and penalties for violations of the law,
provided in Sections 6 and 12 of the Generics Act and Sections 4 and 7 of the
Administrative Order.
The petition was captioned as an action for declaratory relief, over which the Court
does not exercise jurisdiction.
Nevertheless, in view of the public interest involved, the Court decided to treat it
as a petition for prohibition instead.
Issue:
Whether or not the prohibition against the use by doctors of “no substitution”
and/or words of similar import in their prescription in the Generics Act is a lawful
regulation.
Ruling:
Yes, the prohibition against the use by doctors of “no substitution” and/or words of
similar import in their prescription in the Generics Act is a lawful regulation.
There is a constitutional mandate for the State "to protect and promote the right to
health of the people" and "to make essential goods, health and other social
services available to all the people at affordable cost" (Section 15, Art. II and
Section 11, Art. XIII, 1987 Constitution).
In the case at bar, There is no constitutional infirmity in the Generics Act; rather, it
implements the constitutional mandate for the State “to protect and promote the
right to health of the people” and “to make essential goods, health and other social
services available to all the people at affordable cost” (Section 15, Art. II and
Section 11, Art. XIII, 1987 Constitution). The prohibition against the use by doctors
of “no substitution” and/or words of similar import in their prescription, is a valid
regulation to prevent the circumvention of the law. It secures to the patient the
right to choose between the brand name and its generic equivalent since his
doctor is allowed to write both the generic and the brand name in his prescription
form. If a doctor is allowed to prescribe a brand-name drug with “no substitution,”
the patient’s option to buy a lower-priced, but equally effective, generic equivalent
would thereby be curtailed. The law aims to benefit the impoverished (and often
sickly) majority of the population in a still developing country like ours, not the
affluent and generally healthy minority.
Thus, the prohibition against the use by doctors of “no substitution” and/or words
of similar import in their prescription in the Generics Act is a lawful regulation.
RULING:
● The original measure was issued for the reason, as expressed in one of its
Whereases, that “present conditions demand that the carabaos and the
buffaloes be conserved for the benefit of the small farmers who rely on
them for energy needs.”
● We affirm at the outset the need for such a measure. In the face of the
worsening energy crisis and the increased dependence of our farms on
these traditional beasts of burden, the government would have been
remiss, indeed, if it had not taken steps to protect and preserve them.
● To justify the State in thus interposing its authority in behalf of the public, it
must appear, first, that the interests of the public generally, as distinguished
from those of a particular class, require such interference; and second, that
the means are reasonably necessary for the accomplishment of the
purpose, and not unduly oppressive upon individuals (US v. Toribio)
● HOWEVER, the police station commander who confiscated the petitioner’s
carabaos is not liable in damages for enforcing the executive order in
accordance with its mandate. The law was at that time presumptively valid,
and it was his obligation, as a member of the police, to enforce it.
Ortigas & Co v CA Abellanosa Topic: Police Power Prevails over Non-impairment Clause
FACTS:
Ortigas & Co. sold to Emilia Hermoso a parcel of land located in Greenhills
Subdivision, San Juan with several restrictions in the contract of sale that said lot
be used exclusively for residential purposes, among others, until December 31,
2025. Later, a zoning ordinance was issued by MMC (now MMDA) reclassifying
the area as commercial. Private respondent (Ismael Mathay III) leased the subject
lot from Hermoso and built a single storey building for Greenhills Autohaus, Inc., a
car sales company. Ortigas & Co. filed a petition a complaint which sought the
demolition of the constructed car sales company to against Hermoso as it violated
the terms and conditions of the Deed of Sale. Trial court ruled in favor of Ortigas &
Co. Mathay raised the issue to the Court of Appeals from which he sought
favorable ruling. Hence, the instant petition.
ISSUE:
Whether or not the zoning ordinance may impair contracts entered prior to its
effectivity.
HELD:
Yes. The zoning ordinance, as a valid exercise of police power may be given
effect over any standing contract. Hence, petition is denied.
RATIO:
Sangalang v IAC Gulfan Topic: Police Power Prevails over Non-impairment Clause
Facts: August 12, 1977, the municipal officials of Makati, destroyed and removed
the gates constructed/located at the corner of Reposo Street and Jupiter Street as
well as the gates/fences located/constructed at Jupiter Street and Makati Avenue
forcibly, and then opened the entire length of Jupiter Street to public traffic.
Subsequently, Petitioners brought the present action for damages against the
defendant-appellant Ayala Corporation predicated on both breach of contract and
on tort or quasi-delict A supplemental complaint was later filed by said Petitioners
seeking to augment the reliefs prayed for in the original complaint because of
alleged supervening events which occurred during the trial of the case. That the
exclusivity of the said village was adversely affected and diminished due to the
opening of the said streets to the public. That the exclusivity of the said village
was guaranteed in the restrictions of TCT.
Ponente: Fernando, J.
Facts:
On June 13, 1963, the Municipal Board of Manila passed Ordinance No. 4760 with
the following provisions questioned for its violation of due process: refraining from
entertaining or accepting any guest or customer unless it fills out a prescribed
form in the lobby in open view, prohibiting admission of less than 18 years old,
usurious increase of license fee to P4,500 and 6,000 to 150% and 200%
respectively (tax issue also)making unlawful lease or rent more than twice every
24 hours, and cancellation of license for subsequent violation.
The lower court issued preliminary injunction and petitioners raised the case to the
Supreme Court on certiorari.
Issue:
Is Ordinance No. 4760 of the City of Manila compliant with the due process
requirement of the Constitution?
Held:
Yes. Ordinance No. 4760 is a valid exercise of police power to minimize certain
practices harmful to public morals. There is no violation of constitutional due
process for being reasonable and the ordinance enjoys the presumption of
constitutionality absent any irregularity on its face. As such a limitation cannot be
viewed as a transgression against the command of due process. It is neither
unreasonable nor arbitrary. Precisely it was intended to curb the opportunity for
the immoral or illegitimate use to which such premises could be, and, according to
the explanatory note, are being devoted. Taxation may be made to implement a
police power and the amount, object, and instance of taxation is dependent upon
the local legislative body. Judgment of the lower court was reversed and the
injunction lifted.
FACTS:
ISSUE:
Whether or not, the act pursuant to R.A. 2382 (prescribes that a person
who aspires to practice medicine in the Philippines, must have “satisfactorily”
passed the corresponding Board examination) known as the Medical Act of
1959 a valid exercise of police power?
THESIS:
Yes, the act pursuant to R.A. 2382 known as the Medical Act of 1959 is
a valid exercise of police power.
RULING/ANALYSIS/CONCLUSION:
But like all rights and freedoms guaranteed by the Constitution, their
exercise may be regulated pursuant to the police power of the State to safeguard
health, morals, peace, education, order, safety, and general welfare of the people.
As such, mandamus will not lie to compel the Board of Medicine to issue licenses
for the respondents to practice medicine.
It is, therefore, clear that the examinee must prove that he has fully
complied with all the conditions and requirements imposed by law and the
licensing authority to be granted the privilege to practice medicine. In short, he
shall have all the qualifications and none of the disqualifications. The petition is
therefore granted.
FACTS:
The Municipal Board of Manila Passed Ordinance 6537, which prohibited aliens
from being employed or to engage in any occupation or business, whether
permanent, temporary or casual, without first securing an employment permit from
the Mayor of Manila and paying a P50 permit fee.
Hiu Chiong Tsai Pao Ho, employed in Manila, filed a petition to declare the
Ordinance null and void for being violative of the rule on uniformity of taxation, and
for being discriminatory and arbitrary as there was no distinction or criteria among
aliens in imposing the permit fee.
The CFI judge declared the subject ordinance null and void.
Petitioner Mayor Villegas argues that Ordinance No. 6537 cannot be declared null
and void on the ground that it violated the rule on uniformity of taxation because
the rule on uniformity of taxation applies only to purely tax or revenue measures
and that Ordinance No. 6537 is not a tax or revenue measure but is an exercise of
the police power of the state, it being principally a regulatory measure in nature.
ISSUE:
RULING:
No. The contention that Ordinance No. 6537 is not a purely tax or revenue
measure because its principal purpose is regulatory in nature has no merit. While
it is true that the first part which requires that the alien shall secure an employment
permit from the Mayor involves the exercise of discretion and judgment in the
processing and approval or disapproval of applications for employment permits
and therefore is regulatory in character, the second part which requires the
payment of P50.00 as employee's fee is not regulatory but a revenue measure.
There is no logic or justification in exacting P50.00 from aliens who have been
cleared for employment. It is obvious that the purpose of the ordinance is to raise
money under the guise of regulation.
Tio v Videogram Regulatory Board Fariola GR No L-75697
June 18, 1987
ISSUE:
- Whether or not the tax imposed is a valid exercise of police power
THESIS:
- Yes, taxation has been made to validly implement the state's police power
RULING:
- The court ruled that the imposition of tax is for public purpose. It was
imposed primarily to answer the need for regulating the video industry,
particularly because of the rampant piracy, violation of intellectual rights
and pornography.
- The said decree does not contain an undue delegation of legislative power
to the Videogram Regulatory Board as Sec 11 grants the board to "solicit
the direct assistance of other agencies and units of the government and
deputize, for a fixed and limited period, the heads or personnel of such
agencies and units to perform enforcement functions for the Board"- it is
merely a conferment of authority as to its execution, enforcement and
implementation and NOT a delegation of the power to legislate.
- The court did not find a clear violation of the Constitution which would
justify pronouncement of the unconstitutionality of the decree.
- Therefore, PD 1987 is a valid taxation in the state’s exercise of police
power.
Ynot v IAC, supra Millan Tests of valid exercise of police power: lawful subject and lawful means test
FACTS:
● Pres. Marcos issued EO 626-A to strengthen EO 626, which prohibits the
interprovincial movement of carabaos.
● Ynot transported 6 carabaos in a pump boat from Masbate to Iloilo when
they were confiscated by the police station commander of Barotac Nuevo,
Iloilo. Ynot sued for recovery, and the Iloilo’s RTC issued a writ of replevin.
● After considering the merits of the case, the court sustained the
confiscation. The court also declined to rule on the constitutionality of the
executive order, as raise by the petitioner, for 1) lack of authority and 2)
EO’s presumed validity. (Later affirmed by IAC)
RULING: NO.
● The minimum requirements of due process are notice and hearing which,
generally speaking, may not be dispensed with because they are intended
as a safeguard against official arbitrariness.
● Every person, faced by the awesome power of the State, is entitled to “the
law of the land”; “the law which hears before it condemns, which proceeds
upon inquiry and renders judgment only after trial.”
● The due process clause was kept intentionally vague so it would remain
also conveniently resilient.
● This was felt necessary because due process is not, like some provisions
of the fundamental law, an “iron rule” laying down an implacable and
immutable command for all seasons and all persons. Flexibility must be the
best virtue of the guaranty. The very elasticity of the due process clause
was meant to make it adapt easily to every situation, enlarging or
constricting its protection as the changing times and circumstances may
require.
Beltran v Secretary of Health Lagdamat Topic: POLICE POWER| Tests of valid exercise of police power: lawful
subject and lawful means tests
FACTS:
Prior to the expiration of the commercial blood banks’ licenses, they filed a petition
assailing the constitutionality and validity of RA 7719 and its Implementing Rules
and Regulations, for discriminating against freestanding blood banks in a manner,
which is not germane to the purpose of the law.
ISSUES:
1. NO. One, RA 7719 is based on substantial distinctions. Nonprofit blood banks operate
for purely humanitarian reasons and as a medical service, and encourage voluntary blood
donation. On the other hand, commercial blood banks are motivated by profit and treat
blood as a sale of commodities.
Two, the classification and the consequent phase-out of blood banks is germane to the
purpose of the law, which is to provide the nation with an adequate supply of safe blood
by promoting voluntary blood donation and treating blood transfusion as a humanitarian
or medical service rather than a commodity. This necessarily involves the phase-out of
commercial blood banks based on the fact that they operate as a business enterprise,
and they source their blood supply from paid blood donors who are considered unsafe.
Three, the Legislature intended for the general application of the law. Its enactment was not solely
to address the peculiar circumstances of the situation nor was it intended to apply only to existing
conditions.
Four, the law applies equally to all commercial blood banks without exception.
2. NO. In serving the interest of the public, and to give meaning to the purpose of the law, the
Legislature deemed it necessary to phase-out commercial blood banks. This action may seriously
affect the owners and operators, as well as the employees, of commercial blood banks but their
interests must give way to serve a higher end for the interest of the public.
Social Justice Society v. Atienza, G.R. No. 156052, February 13, 2008
Facts:
Issue:
Whether or not Ordinance No. 8027 was enacted in accordance with the exercise
of police power.
Ruling:
Yes. The Court acknowledged that the Sangguniang Panlungsod of Manila, as the
LGU’s legislature, was vested with delegated police power. The Court reminded
us that “[p]olice power is the plenary power vested in the legislature to make
statutes and ordinances to promote the health, morals, peace, education,
good order or safety and general welfare of the people.”
FACTS:
R.A. No. 9337 was enacted to address the mounting budget deficit,
revenue generation, inadequate fiscal allocation for education, increased
emoluments for health workers, and wider coverage for full value-added tax
benefits. R.A. No. 9337 is a consolidation of three legislative bills namely, House
Bill Nos. 3555 and 3705, and Senate Bill No. 1950. Due to conflicting provisions of
the proposed bills the Senate agreed to the request of the House of
Representatives for a committee conference. The Conference Committee on the
Disagreeing Provisions of House Bill recommended the approval of its report,
which the Senate and the House of the Representatives did. The President signed
into law the consolidated House and Senate versions as Republic Act 9337.
Before the law was to take effect on July 1, 2005, the Court issued a temporary
restraining order enjoining the government from implementing the law in response
to a slew of petitions for certiorari and prohibition questioning the constitutionality
of the new law. Among others, Petitioners contend that Sections 4, 5, and 6 of
R.A. No. 9337 constitutes an undue delegation of legislative power, in violation of
Article VI, Section 28(2) of the Constitution.
The challenged section of R.A. No. 9337 is the common proviso in Sections
4, 5 and 6 which reads as follows: “That the President, upon the recommendation
of the Secretary of Finance, shall, effective January 1, 2006, raise the rate of
value-added tax to twelve percent (12%), after any of the following conditions has
been satisfied:
(i) Value-added tax collection as a percentage of Gross Domestic Product (GDP)
of the previous year exceeds two and four-fifth percent (2 4/5%); or
(ii) National government deficit as a percentage of GDP of the previous year
exceeds one and one-half percent (1 ½%).
Article VI Section 28 (2) provides that the Congress may, by law, authorize
the President to fix within specified limits, and subject to such limitations and
restrictions as it may impose, tariff rates, import and export quotas, tonnage and
wharfage dues, and other duties or imposts within the framework of the national
development program of the Government.
RULING:
Tolentino v Secretary of Finance Linao CASE: Tolentino v. Secretary of Finance, G.R. No. 115455, August 25, 1994
TOPIC: Revenue (tax) bills: originate exclusively in the Lower House (Sec. 24, Art.
VI)
FACTS:
RA 7716, otherwise known as the Expanded Value-Added Tax Law, is an act that
seeks to widen the tax base of the existing VAT system and enhance its
administration by amending the National Internal Revenue Code. There are
various suits questioning and challenging the constitutionality of RA 7716 on
various grounds.
Tolentino contends that RA 7716 did not originate exclusively from the House of
Representatives but is a mere consolidation of HB. No. 11197 and SB. No. 1630
and it did not pass three readings on separate days on the Senate thus violating
Article VI, Sections 24 and 26(2) of the Constitution, respectively.
ISSUE:
Whether or not RA 7716 violated Art. VI, Section 24 and Art. VI, Section 26(2) of
the Constitution.
RULING:
Art. VI, Section 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.
Art. VI, Section 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.
In the case at bar, the phrase “originate exclusively” refers to the revenue bill and
not to the revenue law. It is sufficient that the House of Representatives initiated
the passage of the bill which may undergo extensive changes in the Senate.
SB. No. 1630, having been certified as urgent by the President, need not meet the
requirement not only of printing but also of reading the bill on separate days.
Lladoc v Commissioner of Internal Rosales TOPIC: G. Tax Exemptions 1. Constitutional grant: for religious, charitable and
Revenue educational institutions [Sec. 28 (3), Art. VI]
FACTS:
Sometime in 1957, M.B. Estate Inc., of Bacolod City, donated 10,000.00 pesos in
cash to Fr. Crispin Ruiz, the parish priest of Victorias, Negros Occidental, and
predecessor of Fr. Lladoc, for the construction of a new Catholic church in the
locality. The donated amount was spent for such purpose.
On March 3, 1958, the donor M.B. Estate filed the donor's gift tax return. Under
date of April 29, 1960. Commissioner of Internal Revenue issued an assessment
for the donee's gift tax against the Catholic Parish of Victorias of which petitioner
was the parish priest.
ISSUE:
Whether or not the imposition of gift tax to properties used exclusively for religious
purpose is valid.
RULING:
Yes, imposition of the gift tax to properties used exclusively for religious purpose
is valid.
In the case at bar, what the Collector assessed was a donee’s gift tax; the
assessment was not on the properties themselves. It did not rest upon general
ownership; it was an excise upon the use made of the properties, upon the
exercise of the privilege of receiving the properties. Manifestly, gift tax is not within
the exempting provisions of the section just mentioned. It is not a property tax, but
an excise tax imposed on the transfer of property by way of gift inter vivos, the
imposition of which on property used exclusively for religious purposes, does not
constitute an impairment of the Constitution. As well observed by the learned
respondent Court, the phrase “exempt from taxation,” as employed in the
Constitution should not be interpreted to mean exemption from all kinds of taxes.
Thus, imposition of the gift tax to properties used exclusively for religious purpose
is valid.
Lung Center v Quezon City Acosta Topic:Tax Exemptions (Constitutional grant: for religious, charitable and
educational institutions [Sec. 28 (3), Art. VI])
Facts:
Both the land and the hospital building were assessed for real property taxes.
Petitioner claims exemption from real property taxes pursuant to Sec 28(3), Art VI
of the Constitution.
It appears that a big space at the ground floor of the hospital building is being
leased to private parties, for canteen and small store spaces, and to medical or
professional practitioners who use the same as their private clinics for their
patients whom they charge for their professional services.
A big portion on the right side of the building is being leased for commercial
purposes to a private enterprise—the Elliptical Orchids and Garden Center.
While LCP accepts paying and non-paying patients alike, LCP alleges that a
minimum of 60% of its hospital beds are exclusively used for charity patients and
the major thrust of its hospital operation is to serve charity patients. LCP also
receives annual subsidies from the govt.
It appears LCP spends the income it receives, including the subsidies from
the govt for its patients and for the operation of the hospital
Issues:
(1) Whether or not the petitioner is a charitable institution within the context of PD
1823 and the 1973 and 1987 Constitution and Section 234(b) of RA 7160.
(2) Whether or not the petitioner, as a charitable institution, is exempted from real
property taxes.
(1)Yes, the petitioner is a charitable institution within the context of PD 1823 and
the 1973 and 1987 Constitution and Section 234(b) of RA 7160.
As a general principle, a charitable institution does not lose its character as such
and its exemption from taxes simply because it derives income from paying
patients, whether out-patient, or confined in the hospital, or receives subsidies
from the government, so long as the money received is devoted or used
altogether to the charitable object which it is intended to achieve; and no money
inures to the private benefit of the persons managing or operating the institution.
The test whether an enterprise is charitable or not is whether it exists to carry out
a purpose recognized in law as charitable or whether it is maintained for gain,
profit, or private advantage. In the legal sense, a charity may be defined as a gift
for the benefit of an indefinite number of persons. It may be applied to almost
anything that tends to promote the well-doing and well-being of social man.
In the case at bar, a reading of the law creating the LCP and its Articles of
Incorporation show that its medical services are to be rendered to the public in
general in any and all walks of life including [the poor and the rich] without
discrimination. Under P.D. No. 1823, the petitioner is a non-profit and non-stock
corporation which, subject to the provisions of the decree, is to be administered by
the Office of the President of the Philippines with the Ministry of Health and the
Ministry of Human Settlements. It was organized for the welfare and benefit of the
Filipino people principally to help combat the high incidence of lung and
pulmonary diseases in the Philippines
Thus, the petitioner is a charitable institution within the context of PD 1823 and the
1973 and 1987 Constitution and Section 234(b) of RA 7160.
(2) No, the petitioner, as a charitable institution, is not exempted from real property
taxes.
It is stated under Section 28(3), Art VI of the Constitution that what is exempted is
not the institution itself but the lands, buildings and improvements actually, directly
and exclusively used120 for religious, charitable or educational purposes.
In the case at bar, those portions of its real property that are leased to private
entities are not exempt from real property taxes as these are not actually, directly
and exclusively used for charitable purposes. In order to be entitled to tax
exemption Sec 28(3), Art VI of the Const., one must prove by clear and
unequivocal proof that (a) it is a charitable institution, and (b) its real properties are
actually, directly and exclusively used for charitable purposes.
Thus, the petitioner, as a charitable institution, is not exempted from real property
taxes.
Tolentino v Secretary of Finance, Linao TOPIC:
supra Rules of taxation: uniformity and equitability; progressivity
FACTS:
1. RA 7716, otherwise known as the Expanded Value-Added Tax Law, is an act
that seeks to widen the tax base of the existing VAT system and enhance its
administration by amending the National Internal Revenue Code. There are
various suits questioning and challenging the constitutionality of RA 7716 on
various grounds.
3. The Philippine Press Institute, Inc. (PPI) contends that by removing the
exemption of the press from the VAT while maintaining those granted to others,
the law discriminates against the press. At any rate, it is averred, “even
nondiscriminatory taxation of constitutionally guaranteed freedom is
unconstitutional”, citing in support of the case of Murdock v. Pennsylvania.
Issue: Whether or not the Expanded Value-Added Tax Law should be declared
unconstitutional based on the aforementioned grounds.
Ruling:
No. With respect to the first contention, PPI’s, it would suffice to say that since the
law granted the press a privilege, the law could take back the privilege anytime
without offense to the Constitution. The reason is simple: by granting exemptions,
the State does not forever waive the exercise of its sovereign prerogative. Indeed,
in withdrawing the exemption, the law merely subjects the press to the same tax
burden to which other businesses have long ago been subject. The PPI asserts
that it does not really matter that the law does not discriminate against the press
because “even nondiscriminatory taxation on constitutionally guaranteed freedom
is unconstitutional.” The Court was speaking in that case (Murdock v.
Pennsylvania) of a license tax, which, unlike an ordinary tax, is mainly for
regulation. Its imposition on the press is unconstitutional because it lays a prior
restraint on the exercise of its right. The VAT is, however, different. It is not a
license tax. It is not a tax on the exercise of a privilege, much less a constitutional
right. It is imposed on the sale, barter, lease or exchange of goods or properties or
the sale or exchange of services and the lease of properties purely for revenue
purposes. To subject the press to its payment is not to burden the exercise of its
right any more than to make the press pay income tax or subject it to general
regulation is not to violate its freedom under the Constitution.
Anent the first contention of CREBA, it has been held in an early case that even
though such taxation may affect particular contracts, as it may increase the debt of
one person and lessen the security of another, or may impose additional burdens
upon one class and release the burdens of another, still the tax must be paid
unless prohibited by the Constitution, nor can it be said that it impairs the
obligation of any existing contract in its true legal sense. It is next pointed out that
while Section 4 of R.A. No. 7716 exempts such transactions as the sale of
agricultural products, food items, petroleum, and medical and veterinary services,
it grants no exemption on the sale of real property which is equally essential. The
sale of food items, petroleum, medical and veterinary services, etc., which are
essential goods and services was already exempt under Section 103, pars. (b) (d)
(1) of the NIRC before the enactment of R.A. No. 7716. Petitioner is in error in
claiming that R.A. No. 7716 granted exemption to these transactions while
subjecting those of petitioner to the payment of the VAT. Finally, it is contended
that R.A. No. 7716 also violates Art. VI, Section 28(1) which provides that “The
rule of taxation shall be uniform and equitable. The Congress shall evolve a
progressive system of taxation”. Nevertheless, equality and uniformity of taxation
mean that all taxable articles or kinds of property of the same class be taxed at the
same rate. The taxing power has the authority to make reasonable and natural
classifications for purposes of taxation. To satisfy this requirement it is enough
that the statute or ordinance applies equally to all persons, firms, and corporations
placed in similar situation. Furthermore, the Constitution does not really prohibit
the imposition of indirect taxes which, like the VAT, are regressive. What it simply
provides is that Congress shall “evolve a progressive system of taxation.” The
constitutional provision has been interpreted to mean simply that “direct taxes
are . . . to be preferred [and] as much as possible, indirect taxes should be
minimized.” The mandate to Congress is not to prescribe, but to evolve, a
progressive tax system.
As regards the contention of CUP, it is worth noting that its theory amounts to
saying that under the Constitution cooperatives are exempt from taxation. Such
theory is contrary to the Constitution under which only the following are exempt
from taxation: charitable institutions, churches, and parsonages, by reason of Art.
VI, §28 (3), and non-stock, non-profit educational institutions by reason of Art. XIV,
§4 (3).
Abakada Guro v Ermita, supra Nacorda TOPIC: Rule of Taxation: Uniformity, Equitability and Progressivity
FACTS:
Petitioners also argue that the increase to 12%, as well as the 70%
limitation on the creditable input tax, the 60- month amortization on the purchase
or importation of capital goods exceeding P1,000,000.00, and the 5% final
withholding tax by government agencies, is arbitrary, oppressive, and
confiscatory, and that it violates the constitutional principle on progressive
taxation, among others.
ISSUE: Whether or not R.A. 9337 violates due process and equal protection
clause.
RULING:
The petitioner’s contention that the limitation on the creditable input tax if
the entity has a high ratio of input tax, or invests in capital equipment, or has
several transactions with the government, is not based on real and substantial
differences to meet a valid classification. The argument is pedantic, if not outright
baseless. The law does not make any classification in the subject of taxation, the
kind of property, the rates to be levied or the amounts to be raised, the methods of
assessment, valuation and collection.
The power of the State to make reasonable and natural classifications for
the purposes of taxation has long been established. Whether it relates to the
subject of taxation, the kind of property, the rates to be levied, or the amounts to
be raised, the methods of assessment, valuation and collection, the State’s power
is entitled to presumption of validity. As a rule, the judiciary will not interfere with
such power absent a clear showing of unreasonableness, discrimination, or
arbitrariness.
R.A. No. 9337 is also equitable. The law is equipped with a threshold
margin. The VAT rate of 0% or 10% (or 12%) does not apply to sales of goods or
services with gross annual sales or receipts not exceeding P1,500,000.00. Also,
basic marine and agricultural food products in their original state are still not
subject to the tax, thus ensuring that prices at the grassroots level will remain
accessible. As was stated in Kapatiran ng mga Naglilingkod sa Pamahalaan ng
Pilipinas, Inc. vs. Tan: The disputed sales tax is also equitable. It is imposed only
on sales of goods or services by persons engaged in business with an aggregate
gross annual sales exceeding P200,000.00. Small corner sari-sari stores are
consequently exempt from its application. Likewise exempt from the tax are sales
of farm and marine products, so that the costs of basic food and other necessities,
spared as they are from the incidence of the VAT, are expected to be relatively
lower and within the reach of the general public.
Therefore, RA 9337 did not violate due process and equal protection
clause.