ABKD GURO PARTYLIST ET. AL V. ERMITA G.R. No.

168056 September 1, 2005

TOPIC: Powers that Congress is barred from delegating

Facts: ABAKADA GURO Party List, et al., filed a petition for prohibition in questioning the
constitutionality of Sections 4, 5 and 6 of R.A. No. 9337, amending Sections 106, 107 and 108,
respectively, of the National Internal Revenue Code (NIRC)n which aimed at imposing 10 % Vat on sale
of goods and properties, importation of goods; and sale of services and use or lease of properties;

This assailed statute contains a provision which authorizing the President, upon recommendation of the
Secretary of Finance, to raise the VAT rate to 12%, effective January 1, 2006, after specified conditions
have been satisfied.

Issues:

1. Whether there is a violation of Article VI, Section 24 of the Constitution.

2. Whether there is undue delegation of legislative power in violation of Article VI Sec 28(2) of the
Constitution.

3. Whether there is a violation of the due process and equal protection of the Constitution.

Ruling and Analysis:

1. No, the revenue bill exclusively originated in the House of Representatives, the Senate was
acting within its constitutional power to introduce amendments to the House bill when it
included provisions in Senate Bill No. 1950 amending corporate income taxes, percentage, and
excise and franchise taxes.

2. No, there is no undue delegation of legislative power but only of the discretion as to the
execution of a law. This is constitutionally permissible. Congress does not abdicate its functions
or unduly delegate power when it describes what job must be done, who must do it, and what is
the scope of his authority; in our complex economy that is frequently the only way in which the
legislative process can go forward. In this case, it is not a delegation of legislative power but a
delegation of ascertainment of facts upon which enforcement and administration of the
increased rate under the law is contingent.

3. No, 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.

Conclusion:

Congress does not abdicate its functions or unduly delegate power when it describes what job
must be done, who must do it, and what is the scope of his authority; in our complex economy
that is frequently the only way in which the legislative process can go forward. There is no
undue delegation of legislative power but only of the discretion as to the execution of a law. This
constitutionally permissible. Congress did not delegate the power to tax but the mere
implementation of the law.