ORMOC SUGAR COMPANY, INC., plaintiff-appellant, vs.

THE TREASURER OF ORMOC CITY, THE MUNICIPAL

BOARD OF ORMOC CITY, HON. ESTEBAN C. CONEJOS as
Mayor of Ormoc City and ORMOC CITY, defendants-
appellees. G.R. No. L-23794. February 17, 1968. 20 SCRA
739.
FACTS:

The Municipal Board of Ormoc City passed Ordinance No. 4, imposing "on any and all productions
of sugar milled at petitioner's, municipal tax of 1% per export sale. Petitioner paid but were under
protest.

Petitioner filed before the CFI contending that the ordinance is unconstitutional for being in
violation of the equal protection clause and the rule of uniformity of taxation, aside from being an
export tax forbidden under Section 2287 of the Revised Administrative Code. It further alleged that
the tax is neither a production nor a license tax which Ormoc City its charter and under Section 2 of
Republic Act 2264, or the Local Autonomy Act, is authorized to impose; that it also violates RA 2264
because the tax is on both the sale and export of sugar.

ISSUE: Whether the ordinance is valid.

RULING:

NO. The SC held that it violates the equal protection clause for it taxes only sugar produced and
exported by petitioner and none other. Even though petitioner, at the time of the enactment of the
ordinance, was the only sugar central in Ormoc, the classification should have been in terms
applicable to future conditions as well. The taxing ordinance should not be singular and exclusive as
to exclude any subsequently established sugar central, of the same class as petitioner, for the
coverage of the tax.

Though, petitioner can be refunded, they are not entitled to interest because the taxes were not
arbitrarily collected as the ordinance provided a sufficient basis to preclude arbitrariness, the same
being then presumed constitutional until declared otherwise.

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