Tiu vs Videogram Regulatory Commission (Police Power; Unlimited reach of Taxation) Taxation) Facts: The case is a petition filed by petitioner on behalf of videogram operators adversely affected by Presidential Decree No. 1987 !"n "ct #reating the $ideogram %eg&latory 'oard( )ith broad po)ers to reg&late and s&pervise the videogram ind&stry. " month after the prom&lgation of the said Presidential Decree the amended the National *nternal %even&e #ode provided that: !+,#. 1-. $ideo Tapes. / There shall be collected on each processed video0tape cassette ready for playbac regardless of length an ann&al ta2 of five pesos3 Provided That locally man&fact&red or imported blan video tapes shall be s&b4ect to sales ta2.( The ration rationale ale behin behind d the ta2 provi provisio sion n is to c&rb c&rb the proli prolifer ferati ation on and &nreg& &nreg&lat lated ed circ&l circ&lati ation on of videograms videograms incl&ding incl&ding among others videotapes videotapes discs discs cassettes cassettes or any technical technical improvement improvement or variation thereof have greatly pre4&diced the operations of movie ho&ses and theaters. +&ch &nreg&lated circ&lation have ca&sed a sharp decline in theatrical attendance by at least forty percent 56 and a tremendo&s drop in the collection of sales contractors specific am&sement and other ta2es thereby res<ing in s&bstantial losses estimated at P6 ;illion ann&ally in government reven&es. $ideogra $ideogram5s m5s establishment establishments s collectiv collectively ely earn aro&nd P<66 ;illion per ann&m from rentals rentals sales and disposition of videograms and these earnings have not been s&b4ected to ta2 thereby depriving the =overnment of appro2imately P186 ;illion in ta2es each year. The &nreg&lated activities of videogram establishments have also affected the viability of the movie ind&stry. *ss&es: 51 >hether or not ta2 imposed by the D,#%,, is a valid e2ercise of police po)er. ?eld: Ta2ation Ta2ation has been made the implement of the states police po)er. The levy of the -6 ta2 is for a p&blic p&rpose. *t )as imposed primarily to ans)er the need for reg&lating the video ind&stry partic&larly beca&s beca&se e of the rampan rampantt film film piracy piracy the flagra flagrant nt violat violation ion of intell intellect ect&al &al proper property ty right rights s and the proliferation of pornographic video tapes. "nd )hile it )as also an ob4ective of the D,#%,, to protect the movie ind&stry the ta2 remains a valid imposition. >e find no clear violation of the #onstit&tion )hich )o&ld 4&stify &s in prono&ncing Presidential Decree No. 1987 as &nconstit&tional and void. >hile the &nderlying ob4ective of the D,#%,, is to protect the morib& morib&nd nd movie movie ind&st ind&stry ry there there is no @&esti @&estion on that that p&blic p&blic )elfar )elfare e is at bottom bottom of its enactmen enactment t considering !the &nfair competition posed by rampant film piracy3 the erosion of the moral fiber of the vie)ing p&blic bro&ght abo&t by the availability of &nclassified and &nrevie)ed video tapes containing pornographic films and films )ith br&tally violent se@&ences3 and losses in government reven&es d&e to the drop in theatrical attendance not to mention the fact that the activities of video establishments are virt&ally virt&ally &nta2ed &nta2ed since mere payment of ;ayors ;ayors permit permit and m&nicipal m&nicipal license fees are re@&ired to engage in b&siness.(
Kaatiran ng mga !agliling"od sa amahalaan vs tan A vat vat la) la) )as )as decl declar ared ed vali valid. d. " ta2 ta2 is considered &niform )hen it operates )ith the same force and effect in every place )here the s&b4ect may be fo&nd.B *t is principally aimed to rationaliCe the system of ta2es on goods and services. 5administrative 5administrative feasibility
Planters Products# $nc% vs% &ertihil Cororation (Ponente' Reyes) octrines' 51 *f the p&rpose p&rpose is primar primarily ily reven& reven&e e or if reven&e reven&e is at least least one of the real and s&bstan s&bstanti tial al p&rposes then the e2action is properly called a ta2. 5 The po)er to ta2 e2ists for the general general )elfare3 hence implicit in its its po)er is the limitation limitation that itit sho&ld be &sed only for a p&blic p&rpose.
&acts' Petition Petitioner er PP$ and rivate rivate resondent resondent &ertihil &ertihil are rivate rivate cororati cororations ons incororat incororated ed under Philiine laws% They are both engaged in the importation and distrib&tion of fertiliCers pesticides and agric<&ral chemicals. En - &ne &ne 198 then President &erdinand *arcos# exercising his legislative owers# issued +,$
!o% -./0 which rovided# among others# for the imosition of a caital recovery comonent (CRC) on the domestic sale of all grades of fertili1ers in the Philiines . The GE* provides: -. The "dministrator of the FertiliCer Pesticide "&thority to incl&de in its fertili1er ricing formula a caital contri2ution comonent of not less than P-3 er 2ag% This capital contrib&tion shall collected until ade4uate caital caital is raised to ma"e PP$ via2le% via2le% +&ch capital contrib&tion be collected shall be alied 2y &P5 to all domestic sales of fertili1ers in the Philiines% 5Hnderscoring s&pplied P&rs&ant to the GE* &ertihil aid P-3 for every 2ag of fertili1er it sold in the domestic mar"et to
the &ertili1er and Pesticide 5uthority (&P5)% (&P5)% &P5 then remitted the amount collected to the &ar 6ast 7an" and Trust Comany# the deositary 2an" of PP$% Fertiphil paid P<<891 to FP" from &ly 8 198 to an&ary 198<
5fter the -89/ 6dsa Revolution# &P5 voluntarily stoed the imosition of the P-3 levy% >ith the ret&rn of democracy &ertihil demanded from PP$ a refund of the amounts it aid under +,$ !o% -./0# 2ut PP$ refused to accede to the demand% &ertihil filed a comlaint for collection and damages against &P5 and PP$ with the RTC in ;aati. *t @&estioned the constit&tionality of GE* No. 1< for being &n4&st &nreasonable oppressive invalid and an &nla)f&l imposition that amo&nted to a denial of d&e process of la). &ertihil alleged that the +,$
solely favored PP$# a rivately owned cororation# which used the roceeds to maintain its monooly of the fertili1er industry% *n its "ns)er &P5# through the :olicitor eneral# countered that the issuance of +,$ !o% -./0 was
a valid exercise of the olice ower of the :tate in ensuring the sta2ility of the fertili1er industry in the country. *t also averred that Fertiphil did not s&stain any damage from the GE* beca&se the b&rden imposed by the levy fell on the <imate cons&mer not the seller.
RTC' the imosition of the P-3 CRC was an exercise of the :tate
C5' affirmed )ith modification ; even on the assumtion that +,$ !o% -./0 was issued under the olice ower of the state# it is still unconstitutional 2ecause it did not romote u2lic welfare; the levy was !,T for the 2enefit# as alleged# of Planters &oundation# $nc% (on the strength of the +etter of Understanding (+,U) issued 2y then Prime *inister Cesar Virata on -9 5ril -890 and affirmed 2y the :ecretary of =ustice in an ,inion dated -> ,cto2er -89?% 5PP* filed a ;.%. 0I denied $ssues' 51 >hether the imposition imposition of the levy )as an e2ercise by the +tate of its ta2ation po)er. po)er. 5 >hether GE* 1< constit&tes a valid legislation legislation p&rs&ant p&rs&ant to the e2ercise of ta2ation. 5- >hether GE* 1< constit&tes constit&tes a valid valid legislation p&rs&ant p&rs&ant to the e2ercise of police po)er. po)er.
@eld' (-) Jes3 The imposition of the levy )as an e2ercise by the +tate of its ta2ation po)er. >hile it is tr&e that the po)er of ta2ation can be &sed as an implement of police po)er the primary p&rpose of the levy is reven&e generation. $f the urose is rimarily revenue# or if revenue is# at least# one of the real and
su2stantial uroses# then the exaction is roerly called a tax% *n Philippine "irlines *nc. v. ,d& it )as held that the imposition of a vehicle registration fee is not an e2ercise by the +tate of its police po)er b&t of its ta2ation po)er th&s: *t is clear from the provisions of +ection 7- of #ommon)ealth "ct 1- and +ection <1 of the Gand Transportation and Traffic #ode that the legislative intent and p&rpose behind the la) re@&iring o)ners o)ners of vehicles to pay for their registrati registration on is mainly mainly to raise raise f&nds for the constr&cti constr&ction on and maintenance of high)ays and to a m&ch lesser degree pay for the operating e2penses of the administering agency. 2 2 2 &ees may 2e roerly regarded as taxes even though they also
serve as an instrument of regulation% Ta2ation Ta2ation may be made the implement of the stateKs police po)er 5G&tC v. "raneta "raneta 98 Phil. 18. *f the p&rpose is primarily reven&e or if reven&e is at least one of the real and s&bstantial p&rposes then the e2action is properly called a ta2. +&ch is the case of motor vehicle registration fees. The same provision appears as +ection 95b in the Gand Transportation #ode. *t is patent therefrom that the legislators had in mind a reg&latory ta2 as the la) refers to the imposition on the registration operation or o)nership of a motor vehicle as a Bta2 or fee.B 2 2 2 +imply p&t if the e2action &nder %ep. "ct 1-< )ere merely a reg&latory fee the imposition in %ep. "ct 8 need not be an BadditionalB ta2. %ep. "ct 1-< also speas of other BfeesB s&ch as the special permit fees for certain types of motor vehicles 5+ec. 16 and additional fees for change of registration 5+ec. 11. These are not to 2e understood as taxes 2ecause such fees are very minimal to 2e revenueAraising% Th&s they are not mentioned mentioned by +ec. 95b 95b of the #ode as ta2es lie the motor motor vehicl vehicle e regist registrat ration ion fee and cha&f cha&ffe& fe&rs rs license license fee. fee. +&ch +&ch fees fees are to go into into the e2pendit&res of the Gand Transportation #ommission as provided for in the last proviso of +ec. <1. 5Hnderscoring s&pplied
The P-3 levy under +,$ !o% -./0 is too excessive to serve a mere regulatory urose% The levy no do&bt )as a big b&rden on the seller or the <imate cons&mer. *t increased the price of a bag of fertiliCer by as m&ch as five percent% 5 lain reading of the +,$ also suorts the conclusion that the levy
was for revenue generation% The +,$ exressly rovided that the levy was imosed Buntil ade4uate caital is raised to ma"e PP$ via2le%B (>) No3 The P16 levy is &nconstit&tional beca&se it )as not for a p&blic p&rpose. The levy )as imposed to give &nd&e benefit to PP*.
5n inherent limitation on the ower of taxation is u2lic urose% Ta2es are e2acted only for a p&blic p&rpose. They cannot 2e used for urely rivate uroses or for the exclusive 2enefit of rivate ersons% The reason for this is simple. The ower to tax exists for the general welfare; hence# imlicit in its ower is the limitation that it should 2e used only for a u2lic urose% The term Bp&blic p&rposeB is not defined. *t is an elastic concet that can 2e hammered to fit modern
standards% =urisrudence states that Bu2lic uroseB should 2e given a 2road interretation% $t does not only ertain to those uroses which are traditionally viewed as essentially government functions# such as 2uilding roads and delivery of 2asic services# 2ut also includes those uroses designed to romote social ustice% Th&s p&blic money may no) be &sed for the relocation of illegal settlers lo)0cost ho&sing and &rban or agrarian reform. >hile the categories of )hat may constit&te a p&blic p&rpose are contin&ally e2panding in light of the e2pansion of government f&nctions the inherent re4uirement that taxes can only 2e exacted for a u2lic urose still stands. P&blic p&rpose is the heart of a ta2 la). Dhen a tax law is only a mas" to
exact funds from the u2lic when its true intent is to give undue 2enefit and advantage to a rivate enterrise# that law will not satisfy the re4uirement of Bu2lic urose%B *ndications that it is not for the p&blic p&rpose 1. The GE* e2pressly provided that the levy be imposed to benefit PP* a private company. . The GE* provides that the imposition of the P16 levy )as conditional and dependent &pon PP* becoming financially Bviable.B -. The levies paid &nder the GE* )ere directly remitted and deposited by FP" to Far ,ast 'an and Tr&st #ompany the depositary ban of PP* )hich proves that PP* benefitted from the GE* . The levy )as &sed to pay the corporate debts of PP*.
(E) No3 ,ven if >e consider GE* No. 1<9 enacted &nder the police po)er of the +tate it would still 2e invalid for failing to comly with the test of Blawful su2ectsB and Blawful means%B &rispr&dence states the test as follo)s: 51 the interest of the p&blic generally as disting&ished from those of partic&lar class re@&ires its e2ercise3 and 5 the means employed are reasonably necessary for the accomplishment of the p&rpose and not &nd&ly oppressive &pon individ&als. For the same reasons as disc&ssed +,$ !o% -/80 is invalid 2ecause it did not romote u2lic interest% The la) )as enacted to give &nd&e advantage to a private corporation. Dispositive Portion: WHEREFORE, the petition is DENIED. The Court of Appeals Deision !ate! Nove"#er $%, $&&' is AFFIR(ED.
PU7+$C PURP,:6 ,& T5F 755T:$! vs% R5*$R6G 7 +#%" -6< =% No. G01<-1 December 17 197< BThe entr&sting of the ta2 collection to private entities does not destroy the p&blic p&rpose of a ta2 ordinance.B F"#T+: "side from the iss&e on p&blication private respondent be)ails that the maret stall fees imposed in the disp&ted #ity Erdinance No. 7 )hich reg&lates p&blic marets and prescribes fees for rentals of stalls are diverted to the e2cl&sive private &se of the "siatic *ntegrated #orporation since the collection of said fees had been let by the #ity of ;anila to the said corporation in a B;anagement and Eperating #ontract.B *++H,: Does the delegation of the collection of ta2es to a private entity invalidates a ta2 ordinance and defeats its p&blic p&rposeL ?,GD: No. The ass&mption is of co&rse saddled on erroneo&s premise. The fees collected do not go direct to the private coffers of the corporation. Erdinance No. 7 )as not made for the corporation b&t for the p&rpose of raising reven&es for the city. That is the ob4ect it serves. The entr&sting of the collection of the fees does not destroy the p&blic p&rpose of the ordinance. +o long as the p&rpose is p&blic it does not matter )hether the agency thro&gh )hich the money is dispensed is p&blic or private. The right to ta2 depends &pon the <imate &se p&rpose and ob4ect for )hich the f&nd is raised. *t is not dependent on the nat&re or character of the person or corporation )hose intermediate agency is to be &sed in applying it. The people may be ta2ed for a p&blic p&rpose altho&gh it be &nder the direction of an individ&al or private corporation.
P5:CU5+ V: :6CR6T5RH ,& PU7+$C D,RK: (:UPP+6*6!T D$T@ 7,,K R5T$,) F"#T+: Pasc&al in his official capacity as the Provincial =overnor of %iCal petitioned for a )rit of certiorari against the dismissal of the case and dissolving of the preliminary in4&nction held by the #o&rt of the First *nstance. Petitioner prayed for that %" M96 be declared n&ll and void that the alleged Deed of Donation made by &l&eta be declared &nconstit&tional. Petitioner also prayed for an in4&nction en4oining +ecretary of P&blic >ors and #omm&nications Director of P&blic >ors and ?igh)ays and the disb&rsing officers of the latter department from maing and sec&ring any f&rther release of f&nds for the said road pro4ect. %"M 96 contained an item appropriating P8666.66 )hich the petitioner alleged that it )as for the constr&ction of roads improving the private property of ose &leta a member of the +enate. *++H,+: 1. >hether or not %" M 96 is &nconstit&tional. . >hether or not Pasc&al has the legal capacity or to s&e.
?,GD: 1. %" M96 is &nconstit&tional beca&se the #ongress is )itho&t po)er to appropriate p&blic reven&e for anything b&t p&blic p&rpose. . Pasc&al has the personality to s&e as a ta2payer recogniCing the right of the ta2payer to assail the constit&tionality of a legislation appropriating p&blic f&nds.
C$R vs 7,5C Facts: 'ritish Everseas "ir)ays #orp 5'E"# is a 166 'ritish =overnment0o)ned corporation engaged in international airline b&siness and is a member of the *nterline "ir Transport "ssociation and th&s it operates air transportation services and sells transportation ticets over the ro&tes of the other airline members. From 199 to 197 'E"# had no landing rights for traffic p&rposes in the Philippines and th&s did not carry passengers andOor cargo to or from the Philippines b&t maintained a general sales agent in the Philippines 0 >arner 'arnes #o. Gtd. and later Qantas "ir)ays 0 )hich )as responsible for selling 'E"# ticets covering passengers and cargoes. The #ommissioner of *nternal %even&e assessed deficiency income ta2es against 'E"#.
*ss&e: >hether the reven&e derived by 'E"# from ticet sales in the Philippines constit&te income of 'E"# from Philippine so&rces and accordingly ta2able.
?eld: The so&rce of an income is the property activity or service that prod&ced the income. For the so&rce of income to be considered as coming from the Philippines it is s&fficient that the income is derived from activity )ithin the Philippines. ?erein the sale of ticets in the Philippines is the activity that prod&ced the income. The ticets e2changed hands here and payment for fares )ere also made here in the Philippine c&rrency.
The sit&s of the so&rce of payments is the Philippines. The flo) of )ealth proceeded from and occ&rred )ithin Philippine territory en4oying the protection accorded by the Philippine government. *n consideration of s&ch protection the flo) of )ealth sho&ld share the b&rden of s&pporting the government. PD <8 in relation to PD 1- ens&res that international airlines are ta2ed on their income from Philippine so&rces. The 1O ta2 on gross billings is an income ta2. *f it had been intended as an e2cise ta2 or percentage ta2 it )o&ld have been placed &nder Title $ of the Ta2 #ode covering ta2es on b&siness.
5T+5: C,!:,+$5T6 *$!$! v C$R (refer to the 2oo" for the ratio) (destinationcross2oarder doctrine)
F"#T+: "tlas is a corporation engaged in the mining ind&stry registered. En "&g&st 19< #*% assessed against "tlas for deficiency income ta2es for the years 197 and 198. For the year 197 it )as the opinion of the #*% that "tlas is not entitled to e2emption from the income ta2 &nder %" 969 beca&se same covers only gold mines. For the year 198 the deficiency income ta2 covers the disallo)ance of items claimed by "tlas as ded&ctible from gross income. "tlas protested for reconsideration and cancellation th&s the #*% cond&cted a reinvestigation of the case. En Ectober 19< the +ecretary of Finance r&led that the e2emption provided in %" 969 embraces all ne) mines and old mines )hether gold or other minerals. "ccordingly the #*% recomp&ted "tlas deficiency income ta2 liabilities in the light of said r&ling. En &ne 19< the #*% iss&ed a revised assessment entirely eliminating the assessment for the year 197. The assessment for 198 )as red&ced from )hich "tlas appealed to the #T" assailing the disallo)ance of the follo)ing items claimed as ded&ctible from its gross income for 198: Transfer agentKs fee +tocholders relation service fee H.+. stoc listing e2penses +&it e2penses and Provision for contingencies. The #T" allo)ed said items as ded&ction e2cept those denominated by "tlas as stocholders relation service fee and s&it e2penses. 'oth parties appealed the #T" decision to the +# by )ay of t)o 5 separate petitions for revie). "tlas appealed only the disallo)ance of the ded&ction from gross income of the so0called stocholders relation service fee. *++H,O?,GD: >ON the Rann&al p&blic relations e2pense 5aa stocholders relation service fee paid to a p&blic relations cons<ant is a ded&ctible e2pense from gross income %"T*E: +ection -6 5a 51 of the Ta2 #ode allo)s a ded&ction of Ball the ordinary and necessary e2penses paid or inc&rred d&ring the ta2able year in carrying on any trade or b&siness.B "n item of e2pendit&re in order to be ded&ctible &nder this section of the stat&te m&st fall s@&arely )ithin its lang&age. To be ded&ctible as a b&siness e2pense three conditions are imposed namely: 51 the e2pense m&st be ordinary and necessary 5 it m&st be paid or inc&rred )ithin the ta2able year and 5- it m&st be paid or inc&rred in carrying in a trade or b&siness. *n addition not only m&st the ta2payer meet the b&siness test he m&st s&bstantially prove by evidence or records the ded&ctions claimed &nder the la) other)ise the same )ill be disallo)ed. The mere allegation of the ta2payer that an item of e2pense is ordinary and necessary does not 4&stify its ded&ction. The +# has never attempted to define )ith precision the terms Bordinary and necessary.B "s a g&iding principle ordinarily an e2pense )ill be considered BnecessaryB )here the e2pendit&re is appropriate and helpf&l in the development of the ta2payerKs b&siness. *t is BordinaryB )hen it connotes a payment )hich is normal in relation to the b &siness of the ta2payer and the s&rro&nding circ&mstances. The term BordinaryB does not re@&ire that the payments be habit&al or normal in the sense that the same ta2payer )ill have to mae them often3 the payment may be &ni@&e or non0rec&rring to the partic&lar ta2payer affected. There is th&s no hard and fast r&le on the matter. The right to a ded&ction depends in each case on the partic&lar facts and the relation of the payment to the type of b&siness in )hich the ta2payer is engaged. The intention of the ta2payer often may be the controlling fact in maing the determination. "ss&ming that the e2pendit&re is ordinary and necessary in the operation of the ta2payerKs b&siness the ans)er to the
@&estion as to )hether the e2pendit&re is an allo)able ded&ction as a b&siness e2pense m&st be determined from the nat&re of the e2pendit&re itself )hich in t&rn depends on the e2tent and permanency of the )or accomplished by the e2pendit&re. *t appears that on December 197 "tlas increased its capital stoc. *t claimed that its shares of stoc )ere sold in the Hnited +tates beca&se of the services rendered by the p&blic relations firm. The information abo&t "tlas given o&t and played &p in the mass comm&nication media res<ed in f&ll s&bscription of the additional shares iss&ed by "tlas3 conse@&ently the Rstocholders relation service fee the compensation for services carrying on the selling campaign )as in effect spent for the ac@&isition of additional capital ergo a capital e2pendit&re and not an ordinary e2pense. *t is not ded&ctible from "tlas gross income in 198 beca&se e2penses relating to recapitaliCation and reorganiCation of the corporation the cost of obtaining stoc s&bscription promotion e2penses and commission or fees paid for the sale of stoc reorganiCation are capital e2pendit&res. That the e2pense in @&estion )as inc&rred to create a favorable image of the corporation in order to gain or maintain the p&blicKs and its stocholdersK patronage does not mae it ded&ctible as b&siness e2pense. "s held in a H+ case efforts to establish rep&tation are ain to ac@&isition of capital assets and therefore e2penses related thereto are not b&siness e2pense b&t capital e2pendit&res. Note: The b&rden of proof that the e2penses inc&rred are ordinary and necessary is on the ta2payer and does not rest &pon the =overnment. To avail of the claimed ded&ction it is inc&mbent &pon the ta2payer to add&ce s&bstantial evidence to establish a reasonably pro2imate relation petition bet)een the e2penses to the ordinary cond&ct of the b&siness of the ta2payer. " logical lin or ne2&s bet)een the e2pense and the ta2payerKs b&siness m&st be established by the ta2payer.
6+65T$,! Pepsi vs b&t&an 5non delegability Facts: Erdinance 116 )as enacted by the #ity of '&t&an imposing a ta2 of P6.16 per case of bottles of softdrins or carbonated drins. The ta2 )as imposed &pon dealers engeged in selling softdrins or carbonated drins. >hen Erdinance 116 the ta2 )as imposed &pon an agent or consignee of any person association partnership company or corporation engaged in selling softdrins or carbonated drins )ith !agent or consignee( being partic&larly defined on the inserted provision +ection -0". *n effect merchants engaged in the sale of softdrins etc. are not s&b4ect to the ta2 &nless they are agents or consignees of another dealer )ho m&st be one engaged in b&siness o&tside the #ity. Pepsi0#ola 'ottling #o. filed s&it to recover s&ms paid by it to the city p &rs&ant to the Erdinance )hich it claims to be n&ll and void.
*ss&e: >hether the Erdinance is discriminatory. >EN there is valid delegation
?eld: The Erdinance as amended is discriminatory since only sales by !agents or consignees( of o&tside dealers )o&ld be s&b4ect to the ta2. +ales by local dealers not acting for or on behalf of other merchants regardless of the vol&me of their sales and even if the same e2ceeded those made by said agents or consignees of prod&cers or merchants established o&tside the city )o&ld be e2empt from the ta2. The classification made in the e2ercise of the a&thority to ta2 to be valid m&st be reasonable )hich )o&ld be satisfied if the classification is based &pon s&bstantial distinctions )hich maes real differences3 these are germane to the p&rpose of legislation or ordinance3 the classification applies not only to present conditions b&t also to f&t&re conditions s&bstantially identical to those of the present3 and the classification applies e@&ally to all those )ho belong to the same class. These conditions are not f&lly met by the ordinance in @&estion. Then again the general principle against delegation of legislative po)ers in conse@&ence of the theory of separation of po)ers is s&b4ect to one )ell0established e2ception namely: legislative po)ers may be delegated to local governments / to )hich said theory does not apply- / in respect of matters of local concern.
<9 +#%" <6 A Ta2ation A Delegation to Gocal =overnments A Do&ble Ta2ation
Pesi cola vs leyte Pepsi #ola has a bottling plant in the ;&nicipality of Tana&an Geyte. *n +eptember 19< the ;&nicipality approved Erdinance No. - )hich levies and collects ! from soft drins prod&cers and man&fact&rers a tai of one0si2teenth 51O1< of a centavo for every bottle of soft drin cored.(
*n December 19< the ;&nicipality also approved Erdinance No. 7 )hich levies and collects !on soft drins prod&ced or man&fact&red )ithin the territorial 4&risdiction of this m&nicipality a ta2 of one centavo P6.61 on each gallon of vol&me capacity.(
Pepsi #ola assailed the validity of the ordinances as it alleged that they constit&te do&ble ta2ation in t)o instances: a do&ble ta2ation beca&se Erdinance No. 7 covers the same s&b4ect matter and impose practically the same ta2 rate as )ith Erdinance No. - b do&ble ta2ation beca&se the t)o ordinances impose percentage or specific ta2es.
Pepsi #ola also @&estions the constit&tionality of %ep&blic "ct < )hich allo)s for the delegation of ta2ing po)ers to local government &nits3 that allo)ing local governments to ta2 companies lie Pepsi #ola is confiscatory and oppressive.
The ;&nicipality assailed the arg&ments presented by Pepsi #ola. *t arg&ed among others that only Erdinance No. 7 is being enforced and that the latter la) is an amendment of Erdinance No. - hence there is no do&ble ta2ation.
*++H,: >hether or not there is &nd&e delegation of ta2ing po)ers. >hether or not there is do&ble ta2ation.
There is no undue delegation% The Constitution even allows such delegation% +egislative owers may 2e delegated to local governments in resect of matters of local concern% 7y necessary imlication# the legislative ower to create olitical cororations for uroses of local selfAgovernment carries with it the ower to confer on such local governmental agencies the ower to tax. Hnder the Ne) #onstit&tion local governments are granted the a&tonomo&s a&thority to ?,GD: No.
create their o)n so&rces of reven&e and to levy ta2es. +ection "rticle S* provides: !,ach local government &nit shall have the po)er to create its so&rces of reven&e and to levy ta2es s&b4ect to s&ch limitations as may be provided by la).( >ithal it cannot be said that +ection of %ep&blic "ct No. < emanated from beyond the sphere of the legislative po)er to enact and vest in local governments the po)er of local ta2ation.
There is no do&ble ta2ation. The arg&ment of the ;&nicipality is )ell taen. F&rther Pepsi #olas assertion that the delegation of ta2ing po)er in itself constit&tes do&ble ta2ation cannot be merited. *t m&st be observed that the delegating a&thority specifies the limitations and en&merates the ta2es over )hich local ta2ation may not be e2ercised. The reason is that the +tate has e2cl&sively reserved the same for its o)n prerogative. ;oreover do&ble ta2ation in general is not forbidden by o&r f&ndamental la) &nlie in other 4&risdictions. Do&ble ta2ation becomes obno2io&s only )here the ta2payer is ta2ed t)ice for the benefit of the same governmental entity or by the same 4&risdiction for the same p&rpose b&t not in a case )here one ta2 is imposed by the +tate and the other by the city or m&nicipality.
,:*6I5 vs% ,R7,: 6 +#%" 76=% No. 9988< ;arch -1 199B To avoid the taint of &nla)f&l delegation of the po)er to ta2 there m&st be a standard )hich implies that the legislat&re determines matter of principle and lays do)n f&ndamental policy.B
F"#T+: +enator ohn Esmea assails the constit&tionality of paragraph 1c of PD 19< as amended by ,E 1-7 empo)ering the ,nergy %eg&latory 'oard 5,%' to approve the increase of f&el prices or impose additional amo&nts on petrole&m prod&cts )hich proceeds shall accr&e to the Eil Price +tabiliCation F&nd 5EP+F established for the reimb&rsement to ailing oil companies in the event of s&dden price increases. The petitioner avers that the collection on oil prod&cts establishments is an &nd&e and invalid delegation of legislative po)er to ta2. F&rther the petitioner points o&t that since a Kspecial f&ndK consists of monies collected thro&gh the ta2ing po)er of a +tate s&ch amo&nts belong to the +tate altho&gh the &se thereof is limited to the special p&rposeOob4ective for )hich it )as created. *t th&s appears that the challenge posed by the petitioner is premised primarily on the vie) that the po)ers granted to the ,%' &nder P.D. 19< as amended partae of the nat&re of the ta2ation po)er of the +tate.
*++H,: *s there an &nd&e delegation of the legislative po)er of ta2ationL
?,GD: None. *t seems clear that )hile the f&nds collected may be referred to as ta2es they are e2acted in the e2ercise of the police po)er of the +tate. ;oreover that the EP+F as a special f&nd is plain from the special treatment given it by ,.E. 1-7. *t is segregated from the general f&nd3 and )hile it is placed in )hat the la) refers to as a Btr&st liability acco&ntB the f&nd nonetheless remains s&b4ect to the scr&tiny and revie) of the #E". The #o&rt is satisfied that these meas&res comply )ith the constit&tional description of a Bspecial f&nd.B >ith regard to the alleged &nd&e delegation of legislative po)er the #o&rt finds that the provision conferring the a&thority &pon the ,%' to impose additional amo&nts on petrole&m prod&cts provides a s&fficient standard by )hich the a&thority m&st be e2ercised. *n addition to the general policy of the la) to protect the local cons&mer by stabiliCing and s&bsidiCing domestic p&mp rates P.D. 19< e2pressly a&thoriCes the ,%' to impose additional amo&nts to a&gment the reso&rces of the F&nd. +&fficient standard test #ompleteness test
,V6R!*6!T T5F$! $T:6+& :tandard ,il Comany vs =uan Posadas A +ee page <7,5R ,& 5::6::*6!T 5PP65+: ,& +5U!5 vs% CT5# !D:5 8 +#%" =% No. G0181 ;ay -1 19<-
B" ta2 on property of the =overnment )hether national or local )o&ld merely have the effect of taing money from one pocet to p&t it in another pocet.B
F"#T+: National >ater)ors and +e)erage "&thority 5N>+" a p&blic corporation o)ned by the =overnment of the Philippines as )ell as all property comprising )ater)ors and se)erage systems placed &nder it too over the #ab&yao0+ta. %osa0'ian >ater)ors +ystem in 19<. *t )as assessed by the Provincial "ssessor of Gag&na for p&rposes of real estate ta2es on the real properties o)ned by #ab&yao >ater)ors. The respondent protested claiming it is e2empted from the payment of real estate ta2es in vie) of the nat&re and ind of said property and f&nctions and activities of petitioner. The petitioner denied the protest arg&ing that s&ch real properties are s&b4ect to real estate ta2 beca&se altho&gh said properties belong to the %ep&blic of the Philippines the same holds it not in its governmental political or sovereign capacity b&t in a private proprietary or patrimonial character )hich allegedly is not covered by the e2emption contained in section -5a of %ep&blic "ct No. 76.
*++H,: "re the real properties o)ned by the respondent p&blic corporation s&b4ect to real estate ta2L
?,GD: No. %ep&blic "ct No. 76 maes no distinction bet)een property held in a sovereign governmental or political capacity and those possessed in a private proprietary or patrimonial character. "nd )here the la) does not disting&ish neither may )e &nless there are facts and circ&mstances clearly sho)ing that the la)maer intended the contrary b&t no s&ch facts and circ&mstances have been bro&ght to o&r attention. *ndeed the no&n BpropertyB and the verb Bo)nedB &sed in said section -5a strongly s&ggest that the ob4ect of e2emption is considered more from the vie) point of dominion than from that of domain. ;oreover ta2es are financial b&rdens imposed for the p&rpose of raising reven&es )ith )hich to defray the cost of the operation of the =overnment and a ta2 on property of the =overnment )hether national or local )o&ld merely have the effect of taing money from one pocet to p&t it in another pocet. ?ence it )o&ld not serve in the final analysis the main p&rpose of ta2ation. >hat is more it )o&ld tend to defeat it on acco&nt of the paper )or time and con se@&ently e2penses it )o&ld entail.
!C vs C67U City J see page <. Q&ic facts: president reserved some property for f&t&re &se possession or administration )as given to ND#. ND# )as assessed property ta2es.
6::, standard eastern vs acting commissioner of customs A see also page <<. 18 +#%" 88 =% No. G0181 Ectober 8 19<<
B,2emptions from ta2ation are constr&ed in strictissimi 4&ris against the ta2payer and liberally in favor of the ta2ing a&thority.B
F"#T+: Petitioner engaged in the ind&stry of processing gasoline oils etc. claims for the ref&nd of special import ta2es paid p&rs&ant to the provision of %" 1-9 )hich imposed a special import ta2 Bon all goods articles or prod&cts imported or bro&ght into the Philippines.B ,2empt from this ta2 by e2press mandate of +ection < of the same la) are Bmachinery e@&ipment accessories and spare parts for the &se of ind&stries miners mining enterprises planters and farmersB. Petitioner arg&ed that the importation it made of gas p&mps &sed by their gasoline station operators sho&ld fall &nder s&ch e2emptions being directly &sed in its ind&stry. The #ollector of #&stoms of ;anila re4ected the claim and so as the #o&rt on Ta2 "ppeals. The #T" noted that the p&mps imported )ere not &sed in the processing of gasoline and other oil prod&cts b&t by the gasoline stations o)ned by the petitioner for p&mping o&t from &ndergro&nd barrels gasoline sold on retail to c&stomers.
*++H,: *s the contention of the petitioner tenableL Does the s&b4ect imports fall into the e2emptionsL
?,GD: No. The contention r&ns smac against the familiar r&les that e2emption from ta2ation is not favored and that e2emptions in ta2 stat&tes are never pres&med. >hich are b&t statements in adherence to the ancient r&le that e2emptions from ta2ation are constr&ed in strictissimi 4&ris against the ta2payer and liberally in favor of the ta2ing a&thority. Tested by this precept )e cannot ind&lge in e2pansive constr&ction and )rite into the la) an e2emption not therein set forth. %ather )e go by the reasonable ass&mption that )here the +tate has granted in e2press terms certain e2emptions those are the e2emptions to be considered and no more. +ince the la) states that to be ta20e2empt e@&ipment and spare parts sho&ld be Bfor the &se of ind&striesB the coverage herein sho&ld not be enlarged to incl&de e@&ipment and spare parts for &se in dispensing gasoline at retail.
U6 PR,C6:: C5R+,: :UP6RRU C,R V: :D Facts: Petitioners are domestic corporations and proprietors operating dr&gstores in the Philippines. Petitioners assail the constit&tionality of +ection 5a of %" 97 other)ise no)n as the !,2panded +enior #itiCens "ct of 66-.( +ection 5a of %" 97 grants t)enty percent 56 disco&nt as privileges
for the +enior #itiCens. Petitioner contends that said la) is &nconstit&tional beca&se it constit&tes deprivation of private property.
*ss&e: >hether or not %" 97 is &nconstit&tional
?eld: Petition is dismissed. The la) is a legitimate e2ercise of police po)er )hich similar to the po)er of eminent domain has general )elfare for its ob4ect.
"ccordingly it has been described as !the most essential insistent and the least limitable of po)ers e2tending as it does to all the great p&blic needs.( *t is the po)er vested in the legislat&re by the constit&tion to mae ordain and establish all manner of )holesome and reasonable la)s stat&tes and ordinances either )ith penalties or )itho&t not rep&gnant to the constit&tion as they shall 4&dge to be for the good and )elfare of the common)ealth and of the s&b4ects
R6H6: V: 5+*5!G,R %,J,+ v. "G;"NE% =% Nos. G098-90< "pril < 1991 19< +#%" -
F"#T+: Petitioners 'G %eyes et al. o)ned a parcel of land in Tondo )hich are leased and occ&pied as d)elling &nits by tenants )ho )ere paying monthly rentals of not e2ceeding P-66. +ometimes in 1971 the %ental FreeCing Ga) )as passed prohibiting for one year from its effectivity an increase in monthly rentals of d)elling &nits )here rentals do not e2ceed three h&ndred pesos 5P-66.66 so that the %eyeses )ere precl&ded from raising the rents and from e4ecting the tenants. *n 197- respondent #ity "ssessor of ;anila re0classified and reassessed the val&e of the s&b4ect properties based on the sched&le of maret val&es )hich entailed an increase in the corresponding ta2 rates prompting petitioners to file a ;emorand&m of Disagreement averring that the reassessments made )ere Be2cessive &n)arranted ine@&itable confiscatory and &nconstit&tionalB considering that the ta2es imposed &pon them greatly e2ceeded the ann&al income derived from their properties. They arg&ed that the income approach sho&ld have been &sed in determining the land val&es instead of the comparable sales approach )hich the #ity "ssessor adopted. *++H,: *s the approach on ta2 assessment &sed by the #ity "ssessor reasonableL ?,GD: No. The ta2ing po)er has the a&thority to mae a reasonable and nat&ral classification for p&rposes of ta2ation b&t the governmentKs act m&st not be prompted by a spirit of hostility or at the very least discrimination that finds no s&pport in reason. *t s&ffices then that the la)s operate e@&ally and &niformly on all persons &nder similar circ&mstances or that all persons m&st be treated in the same manner the conditions not being different both in the privileges conferred and the liabilities imposed.
#onse@&ently it stands to reason that petitioners )ho are b&rdened by the government by its %ental FreeCing Ga)s 5then %.". No. <-9 and P.D. 6 &nder the principle of social 4&stice sho&ld not no) be penaliCed by the same government by the imposition of e2cessive ta2es petitioners can ill afford and event&ally res< in the forfeit&re of their properties
C$R vs C5 and fortune to2acco #*% vs. #" #T" and FE%THN, TE'"##E #E%P. =.%. No. 1197<13 "&g&st 9 199<
Facts: Fort&ne Tobacco #orporation 5BFort&ne TobaccoB engaged in the man&fact&re of different brands of cigarettes registered B#hampionB B?opeB and B;oreB cigarettes. '*% classified them as foreign brands since they )ere listed in the >orld Tobacco Directory as belonging to foreign companies. ?o)ever Fort&n changed the names of K?opeK to K?ope G&2&ryK and K;oreK to KPremi&m ;oreK thereby removing the said brands from the foreign brand category.
" "d $alorem ta2es )ere imposed on these brands. Then %ep&blic "ct 5B%"B No. 7< )as enacted A for locally man&fact&red foreign brand )hile for locally man&fact&red brands. days before the effectivity of %" 7< %even&e ;emorand&m #irc&lar No. -709- 5B%;# -709-B )as iss&ed by the '*% saying since there is no sho)ing )ho the real o)nerOs are of #hampion ?ope and ;ore it follo)s that the same shall be considered locally man&fact&red foreign brand for p&rposes of determining the ad valorem ta2 0 . '*% sent via telefa2 a copy of %;# -709- to Fort&ne Tobacco addressed to no one in partic&lar. Then Fort&ne Tobacco received by ordinary mail a certified 2ero2 copy of %;# -709-. #*% assessed Fort&ne Tobacco for ad valorem ta2 deficiency amo&nting to P998--.66.
Fort&ne Tobacco filed a petition for revie) )ith the #T". 8 #T" &pheld the position of Fort&ne. #" affirmed.
*ss&e: >EN it )as necessary for '*% to follo) the legal re@&irements )hen it iss&ed its %;#
?eld. J,+. #*% may not disregard legal re@&irements in the e2ercise of its @&asi0legislative po)ers )hich p&blication filing and prior hearing. >hen an administrative r&le is merely interpretative in nat&re its applicability needs nothing f&rther than its bare iss&ance for it gives no real conse@&ence more than )hat the la) itself has already prescribed. 'HT )hen &pon the other hand the administrative r&le goes beyond merely providing for the means that can facilitate or render least c&mbersome the implementation of the la) b&t s&bstantially increases the b&rden of those governed the agency m&st accord at least to those directly affected a chance to be heard before that ne) iss&ance is given the force and effect of la).
%;# -709- cannot be vie)ed simply as constr&ing +ection 15c51 of the N*%# as amended b&t has in fact and most importantly been made in order to place B?ope G&2&ryB BPremi&m ;oreB and B#hampionB )ithin the classification of locally man&fact&red cigarettes bearing foreign brands and to thereby have them covered by %" 7< )hich s&b4ects mentioned brands to the '*% not simply interpreted the la)3 verily it legislated &nder its @&asi0legislative a&thority. The d&e observance of the re@&irements of notice of hearing and of p&blication sho&ld not have been then ignored.
6U5+ PR,T6CT$,! ,& T@6 +5D ,*6G V: P5+,*5R =omeC v Palomar =% No G0-< Ectober 9 19<8
F"#T+: Petitioners @&estion the constit&tionality of the %" 1<- claiming that the la) )hich helps raise f&nds for the Philippine T&berc&losis +ociety violates the e@&al protection ca&se beca&se it constit&tes mail &sers into a class for ta2 p&rposes )hile leaving &nta2ed the rest of the pop&lation.
*++H,: *s the e@&al protection cla&se violatedL
%HG*N=: No. The legislat&re has the inherent po)er to select the s&b4ects of ta2ation and to grant e2emptions. Traditionally classification has been a device for fitting ta2 programs to local need and &sages in order to achieve an e@&itable distrib&tion of the ta2 b&rden.
65:T6R! T65TR$C5+ C, V: 5+&,!:, ,astern Theatrical #o. v "lfonso Perfecto . 199
Facts U The ;&nicipal 'oard of the #ity of ;anila enacted Erdinance No. 98 )hich imposes a fee on the price of every admission ticet sold by theaters and other similar am&sement establishments. The fees imposed are grad&ated according to the price of the ticet sold.
U T)elve corporations 5Petitioners engaged in the motion pict&re b&siness instit&ted a complaint in the #F* to imp&gn the validity of the ordinance. U
#F* &pheld the validity of the ordinance and held that:
o Hnder +ec 5m of the %evised "dministrative #ode 5%"# the #ity of ;anila had the po)er to enact the ordinance. o
+ec 5m of the %"# )as not repealed by the N*%# nor the po)er granted by it )ithdra)n.
o
Erdinance did not violate the principle of e@&ality and &niformity of ta2ation.
*ss&es and "rg&ments: 1.
>EN ordinance )as enacted beyond the charter po)ers of the #ity of ;anilaL
U Petitioners: +ec 5m of the %evised "dministrative #ode )hich grants to the #ity the po)er to reg&late theaters confers only the po)er to ta2 on b&siness b&t not on am&sement. .
>EN +ec 5m of the %"# has been impliedly repealed by the N*%#L
U Petitioners: +ince the N*%# )as passed later the %"# and since both ta2ing po)ers cover the same field of legislation +ec 5m of the %"# m&st have been repealed by the N*%# and conse@&ently the po)er to reg&late theaters granted to the #ity )as )ithdra)n. -. >EN the ordinance violates the principle of e@&ality and &niformity of ta2ation en4oined by the #onstit&tionL U Petitioners: Erdinance does not ta2 other inds of am&sements 5e.g. race tracs cocpits cabarets concert halls
?eld and %atio: 1. NE. The ta2 imposed by +ec 5m cannot be defined as and be restricted to ta2 on b&siness. The fact that said section incl&des theaters and similar am&sement establishments sho)s that the po)er to ta2 am&sement is e2pressly incl&ded )ithin the po)er granted by +ec 5m. .
NE. 'oth provisions of la) may stand together and enforced at the same time.
-. NE. ,@&ality and &niformity of ta2ation means that all ta2able articles or inds of property of the same class shall be ta2ed at the same rate. The ta2ing po)er has the a&thority to mae reasonable and nat&ral classifications for p&rposes of ta2ation. Petitioners cannot point o&t )hat places of am&sement do not constit&te a class by themselves and )hich can be conf&sed )ith those not incl&ded in the ordinance.
*5!$+5 R5C6 @,R:6 TR5$!6R: V: 6 +5 &U6!T6 J see age 9> comlete na yun
:$+V6:TR6 PU!:5+5! V: C$TH ,& *5!$+5 Facts: ;&nicipal 'oard of ;anila enacted Erdinance No. --98 imposing m&nicipal occ&pation ta2 on persons e2ercising vario&s professions in the city and penaliCing non0payment of the same. P&nsalan et al paid the same &nder protest and filed s&it )ith the co&rt. Petitioners contend that the ordinance is &n4&st and oppressive and amo&nts to do&ble ta2ation. The lo)er co&rt &pheld the validity of the provision of la) a&thoriCing the enactment of the ordinance b&t declared the ordinance itself illegal and void on the gro&nd that the penalty there in provided for non0payment of the ta2 )as not legally a&thoriCed. 'oth parties appealed the co&rts decision. *ss&e: >hether or not Erdinance No --98 constit&te do&ble ta2ationL Decision: Decision reversed. The Gegislat&re may select )hat occ&pations shall be ta2ed and in the e2ercise of that discretion it may ta2 all or it may select for ta2ation certain classes and leave the others &nta2ed. ;anila offers a more l&crative field for the practice of the professions so that it is b&t fair that the professionals in ;anila be made to pay a higher occ&pation ta2 than their brethren in the provinces. The ordinance imposes the ta2 &pon every person !e2ercising( or !p&rs&ing( A in the #ity of ;anila nat&rally A any one of the occ&pations named b&t does not say that s&ch person m&st have his office in ;anila. The arg&ment against do&ble ta2ation may not be invoed )here one ta2 is imposed by the state and the other is imposed by the city.
C$TH ,& 75U$, V: 6 +6,! #*TJ EF '"=H*E v. D, G,EN Facts: U Fort&nato de Geon appealed to the +# @&estioning the validity of an ordinance enacted by the 'ag&io #ity #o&ncil to collect ta2es from real estate dealers. The so&rce of co&ncils po)er to create s&ch ordinance is the amending act 5%" -9 of the 'ag&io #harter empo)ering the city to fi2 the license fee and reg&late !b&siness trades and occ&pations as may be established or practiced in the #ity.( U ?e )as held liable as a real estate dealer )ith a property )orth more than P16666 b&t not in e2cess of P6666. ?e )as obligated to pay a P6 ann&al fee. ?e )as f&rther !engaged in the rental of his property in 'ag&io( deriving income therefrom d&ring the period in 198019<. U The complaint )as thereafter filed by the #ity "ttorney of 'ag&io for his fail&re to pay P-66 as license fee covering the period aforementioned. *ss&es: 1
>EN %" -9 is broad eno&gh to 4&stify the enactment of the ordinance
>EN there )as a violation of the r&le of &niformity established by the #onstit&tion
?eldO%atio: 1 J,+. ,ven a c&rsory reading of the above amendment readily discloses that the enactment of the ordinance in @&estion finds s&pport in the po)er th&s conferred. *n o&r opinion the amendment above adverted to empo)ers the city co&ncil not only to impose a license fee b&t also to levy a ta2 for p&rposes of reven&e more so )hen in amending section - 5b the phrase Kas provided by la)K has been removed by section of %ep&blic "ct No. -9. The city co&ncil of 'ag&io therefore has no) the po)er to
ta2 to license and to reg&late provided that the s&b4ects affected be one of those incl&ded in the charter. *n this sense the ordinance &nder consideration cannot be considered <ra vires )hether its p&rpose be to levy a ta2 or impose a license fee. The terminology &sed is of no conse@&ence.B
NE. "ccording to the challenged ordinance a real estate dealer )ho leases property )orth P6666 or above m&st pay a n ann&al fee of P166. *f the property is )orth P16666 b&t not over P6666 then he pays P6 and P if the val&e is less than P16666. En its face therefore the above ordinance cannot be assailed as violative of the constit&tional re@&irement of &niformity. *n Philippine Tr&st #ompany v. Jatco &stice Ga&rel speaing for the #o&rt stated: B" ta2 is considered &niform )hen it operates )ith the same force and effect in every place )here the s&b4ect may be fo&nd.B
There )as no occasion in that case to consider the possible effect on s&ch a constit&tional re@&irement )here there is a classification. The opport&nity came in ,astern Theatrical #o. v. "lfonso. Th&s: B,@&ality and &niformity in ta2ation means that all ta2able articles or inds of property of the same class shall be ta2ed at the same rate. The ta2ing po)er has the a&thority to mae reasonable and nat&ral classifications for p&rposes of ta2ation3(
=U5! +U!5 V: :5R*$6!T, =uan +una :u2division# $nc% v :armiento (-80>)
&an G&na +&bdivision *nc. v +armiento =% No. G0--8 ;ay 8 19
F"#T+: Plaintiff iss&ed to the #ity Treas&rer of ;anila checs amo&nting for P16. dra)n &pon the Philippine Tr&st #ompany. This chec )as to be applied to plaintiffs land ta2 the e2act amo&nt of )hich )as yet &ndetermined. The #ity after liberation from apanese to ref&nd the plaintiffs deposit or apply it to s&ch f&t&re ta2es as might be fo&nd d&e. Plaintiff ho)ever claims that the )hole amo&nt of the chec contending that ta2es d&ring period have been remitted by #ommon)ealth "ct No. 76-.
*++H,: Does #" 76- cover ta2es paid before its enactment as the plaintiff maintains and the co&rts belo) held or does it refer as the #ity Treas&rer believes only to ta2es )hich )ere still &npaidL
%HG*N=: The la) is clear that it applies to !ta2es and penalties d&e and payable( i.e. ta2es o)ed and o)ing. The remission of ta2es d&e and payable to the e2cl&sion of ta2es already collected does not constit&te &nfair discrimination. The ta2payers )ho paid their ta2es before liberation and those )ho had not )ere not on the same footing on the need of material relief. Ta2payers )ho had been in arrears in their obligation )o&ld have to satisfy their liability )ith gen&ine c&rrency )hile the ta2es paid d&ring the occ&pation had been satisfied in apanese >ar Notes many of them at a time )hen those notes )ere )ell0nigh )orthless. To ref&nd those ta2es )ith restored c&rrency )o&ld &nd&ly enrich many of the payers at a greater e2pense to the people at large.
5::,C$5T$,! ,& CU:T,* 7R,K6R: V: *U! 7,5R ,& C$TH ,& *5!$+5 "ssociaiton of #&stoms 'roers vs ;anila =%N G0-7< ;ay 19,n 'anc F"#T+: The ;&nicipal 'oard of ;anila passed ordinance No. --79 )hich imposes a property ta2 that is )ithin the po)er of the #ity &nder its revised charter. The ordinance )as passed by the ;&nicipal 'oard &nder the a&thority conferred by section 18 of %" 69
*++H,: >hether or not the ordinance infringes on the &niformity of ta2es as ordained by the #onstit&tion. *t does. +ee page 87 %HG*N=: The Erdinance e2acts the ta2 &pon all motor vehicles operating )ithin ;anila and does not disting&ish bet)een a motor vehicle registered in the #ity and one registered in another place nor does it disting&ish private of vehicle for hire. The distinction is important if )e note that the ordinance intends to b&rden )ith the ta2 only those registered in ;anila. There is no pretense that the Erdinance e@&ally applies to vehicles )ho come to ;anila for a temporary p&rpose.
,R*,C :U5R C,*P5!H V: TR65:UR6R ,& ,R*,C J see age 9?
R6H6: V: 5+*5!G,R
%,J,+ v. "G;"NE% =% Nos. G098-90< "pril < 1991 19< +#%" -
F"#T+: Petitioners 'G %eyes et al. o)ned a parcel of land in Tondo )hich are leased and occ&pied as d)elling &nits by tenants )ho )ere paying monthly rentals of not e2ceeding P-66. +ometimes in 1971 the %ental FreeCing Ga) )as passed prohibiting for one year from its effectivity an increase in monthly rentals of d)elling &nits )here rentals do not e2ceed three h&ndred pesos 5P-66.66 so that the %eyeses )ere precl&ded from raising the rents and from e4ecting the tenants. *n 197- respondent #ity "ssessor of ;anila re0classified and reassessed the val&e of the s&b4ect properties based on the sched&le of maret val&es )hich entailed an increase in the corresponding ta2 rates prompting petitioners to file a ;emorand&m of Disagreement averring that the reassessments made )ere Be2cessive &n)arranted ine@&itable confiscatory and &nconstit&tionalB considering that the ta2es imposed &pon them greatly e2ceeded the ann&al income derived from their properties. They arg&ed that the income approach sho&ld have been &sed in determining the land val&es instead of the comparable sales approach )hich the #ity "ssessor adopted. *++H,: *s the approach on ta2 assessment &sed by the #ity "ssessor reasonableL ?,GD: No. The ta2ing po)er has the a&thority to mae a reasonable and nat&ral classification for p&rposes of ta2ation b&t the governmentKs act m&st not be prompted by a spirit of hostility or at the very least discrimination that finds no s&pport in reason. *t s&ffices then that the la)s operate e@&ally and &niformly on all persons &nder similar circ&mstances or that all persons m&st be treated in the same manner the conditions not being different both in the privileges conferred and the liabilities imposed. #onse@&ently it stands to reason that petitioners )ho are b&rdened by the government by its %ental FreeCing Ga)s 5then %.". No. <-9 and P.D. 6 &nder the principle of social 4&stice sho&ld not no) be penaliCed by the same government by the imposition of e2cessive ta2es petitioners can ill afford and event&ally res< in the forfeit&re of their properties
V$++65: V: 5RC5 J +HP%" P"=, 89. "lien is being ta2ed to see employment. No valid classification.
*$:5*$: ,R$6!T5+ 5::,C ,& C,C,!UT TR56R: V: :6CR6T5RH ,& &$!5!C6 J 98 T,+6!T$!, V: :6CR6T5RH ,& &$!5!C6 A page 96
U!$&,R*$TH ,& T5F5T$,! 0
"ll ta2able articles or inds of property of the same class shall be ta2ed at the same rate
K5P5T$R5! ! *5 !5+$+$!K, :5 P5*5@5+55! ! P$+$P$!5: V: T5! Vapatiran ng mga Naglilingod sa Pamahalaan ng Pilipinas *nc. vs. Tan W=.%. No. 81-11 &ne -6 1988X Post &nder case digests Ta2ation at >ednesday ;arch 67 61 Posted by +chiCophrenic ;ind Facts: These fo&r 5 petitions see to n&llify ,2ec&tive Erder No. 7- iss&ed by the President of the Philippines and )hich amended certain sections of the National *nternal %even&e #ode and adopted the val&e0added ta2 for being &nconstit&tional in that its enactment is not allegedly )ithin the po)ers of the President3 that the $"T is oppressive discriminatory regressive and violates the d&e process and e@&al protection cla&ses and other provisions of the 1987 #onstit&tion.
The $"T is a ta2 levied on a )ide range of goods and services. *t is a ta2 on the val&e added by every seller )ith aggregate gross ann&al sales of articles andOor services e2ceeding P6666.66 to his p&rchase of goods and services &nless e2empt. $"T is comp&ted at the rate of 6 or 16 of the gross selling price of goods or gross receipts realiCed from the sale of services.
The $"T is said to have eliminated privilege ta2es m<iple rated sales ta2 on man&fact&rers and prod&cers advance sales ta2 and compensating ta2 on importations. The framers of ,E 7- that it is principally aimed to rationaliCe the system of ta2ing goods and services3 simplify ta2 administration3 and mae the ta2 system more e@&itable to enable the co&ntry to attain economic recovery.
The $"T is not entirely ne). *t )as already in force in a modified form before ,E 7- )as iss&ed. "s pointed o&t by the +olicitor =eneral the Philippine sales ta2 system prior to the iss&ance of ,E 7- )as essentially a single stage val&e added ta2 system comp&ted &nder the Bcost s&btraction methodB or Bcost ded&ction methodB and )as imposed only on original sale barter or e2change of articles by man&fact&rers prod&cers or importers. +&bse@&ent sales of s&ch articles )ere not s&b4ect to sales ta2. ?o)ever )ith the iss&ance of PD 1991 on -1 Ectober 198 a - ta2 )as imposed on a second sale )hich )as red&ced to 1. &pon the iss&ance of PD 66< on -1 December 198 to tae effect 1 an&ary 198<. %ed&ced sales ta2es )ere imposed not only on the second sale b&t on every s&bse@&ent sale as )ell. ,E 7- merely increased the $"T on every sale to 16 &nless Cero0rated or e2empt.
*ss&e: >hether or not ,E 7- is &nconstit&tional
?eld: No. Petitioners have failed to sho) that ,E 7- )as iss&ed capricio&sly and )himsically or in an arbitrary or despotic manner by reason of passion or personal hostility. *t appears that a comprehensive st&dy of the $"T had been e2tensively disc&ssed by this framers and other government a gencies involved in its implementation even &nder the past administration. "s the +olicitor =eneral correctly sated. BThe
signing of ,.E. 7- )as merely the last stage in the e2ercise of her legislative po)ers. The legislative process started long before the signing )hen the data )ere gathered proposals )ere )eighed and the final )ordings of the meas&re )ere drafted revised and finaliCed. #ertainly it cannot be said that the President made a 4&mp so to spea on the #ongress t)o days before it convened.B
Ne2t the petitioners claim that ,E 7- is oppressive discriminatory &n4&st and regressive.
The petitionersB assertions in this regard are not s&pported by facts and circ&mstances to )arrant their concl&sions. They have failed to ade@&ately sho) that the $"T is oppressive discriminatory or &n4&st. Petitioners merely rely &pon ne)spaper articles )hich are act&ally hearsay and have evidentiary val&e. To 4&stify the n&llification of a la) there m&st be a clear and &ne@&ivocal breach of the #onstit&tion not a do&btf&l and arg&mentative implication.
"s the #o&rt sees it ,E 7- satisfies all the re@&irements of a valid ta2. *t is &niform. " ta2 is considered &niform )hen it operates )ith the same force and effect in every place )here the s&b4ect may be fo&nd.B The sales ta2 adopted in ,E 7- is applied similarly on all goods and services sold to the p&blic )hich are not e2empt at the constant rate of 6 or 16.
The disp&ted sales ta2 is also e@&itable. *t is imposed only on sales of goods or services by persons engage in b&siness )ith an aggregate gross ann&al sales e2ceeding P66666.66. +mall corner sari0sari stores are conse@&ently e2empt from its application. Gie)ise e2empt from the ta2 are sales of farm and marine prod&cts spared as they are from the incidence of the $"T are e2pected to be relatively lo)er and )ithin the reach of the general p&blic.
The #o&rt lie)ise finds no merit in the contention of the petitioner *ntegrated #&stoms 'roers "ssociation of the Philippines that ,E 7- more partic&larly the ne) +ec. 16- 5r of the National *nternal %even&e #ode &nd&ly discriminates against c&stoms broers.
"t any rate the distinction of the c&stoms broers from the other professionals )ho are s&b4ect to occ&pation ta2 &nder the Gocal Ta2 #ode is based &pon material differences in that the activities of c&stoms broers 5lie those of stoc real estate and immigration broers partae more of a b&siness rather than a profession and )ere th&s s&b4ected to the percentage ta2 &nder +ec. 17 of the National *nternal %even&e #ode prior to its amendment by ,E 7-. ,E 7- abolished the percentage ta2 and replaced it )ith the $"T.
PR,R6::$V6 T5F5T$,! 0
*t is progressive )hen its rate goes &p depending on the reso&rces of the person affected
0
*t is based on the ta2payers ability to pay
!,!A$*P5$R*6!T C+5U:6 A
!o law shall 2e assed imairing the o2ligations of contract
T5F 6F6*PT$,!; R6V,C57+6L 0 0 0
*t depends if the grant is grat&ito&s it is. *f it is by virt&e of a franchise it may be revoed. *f the e2emption constit&tes a binding contract the government cannot &nilaterally revoe the e2emption.
9 Phil ->0 C5:5!,V5: vs @,R A !,! $*P5$R*6!T C+5U:6 F"#T+: *n 1897 the +panish =overnment in accordance )ith the provisionsof the royal decree of 1 may 18<7 granted . #asanovas certain mines in theprovince of "mbos #amarines of )hich mines the latter is no) the o)ner. That these )ere validly perfected mining concessions granted to prior to 11"pril 1899 is conceded. They )ere so considered by the #ollector of *nternal%even&e and )ere by him said to fall )ithin the provisions of section 1- of "ct No. 1189 no)n as the *nternal %even&e "ct. That section is as follo)s:+,#. 1-. En all valid perfected mining concessions granted prior to"pril eleventh eighteen h&ndred and ninety0nine there shall be leviedand collected on the after an&ary first nineteen h&ndred and five thefollo)ing ta2es:. 5a En each claim containing an area of si2ty tho&sand s@&are metersan ann&al ta2 of one h&ndred pesos3 5b and at the same rateproportionately on each claim containing an area in e2cess of or lessthan si2ty tho&sand s@&are meters.-. En the gross o&tp&t of each an ad valorem ta2 e@&al to three percent&m of the act&al maret val&e of s&ch o&tp&t. The defendant accordingly imposed &pon these properties the ta2 mentionedin section 1- )hich ta2 as has before been stated . #asanovas paid &nderprotest. *++H,: >hether +ection 1- of "ct 1189 is valid. ?,GD: The fact that this concession )as made by the =overnment of +painand not by the =overnment of the Hnited +tates is not important. E&rconcl&sion is that the concessions granted by the =overnment of +pain to theplaintiff constit&te contracts bet)een the parties3 that section 1- of the*nternal %even&e Ga) impairs the obligation of these contracts and istherefore void as to them.>e thin that this section is also void beca&se in conflict )ith section <6 of theact of #ongress of &ly 1 196. This section is as follo)s: That nothing in this "ct shall be constr&ed to effect the rights of anyperson partnership or corporation having a valid perfected miningconcession granted prior to "pril eleventh eighteen h&ndred and ninety0nine b&t all s&ch concessions shall be cond&cted &nder the provisions of the la) in force at the time they )ere granted s&b4ect at all times tocancellation by reason of illegality
in the proced&re by )hich they )ereobtained or for fail&re to comply )ith the conditions prescribed asre@&isite to their retention in the la)s &nder )hich they )ere granted: Provided That the o)ner or o)ners of every s&ch concession shall ca&sethe corners made by its bo&ndaries to be distinctly mared )ithpermanent mon&ments )ithin si2 months after this act has beenprom&lgated in the Philippine *slands and that any concessions thebo&ndaries of )hich are not so mared )ithin this period shall be freeand open to e2plorations and p&rchase &nder the provisions of this act. This section seems to indicate that concessions lie those in @&estion can be canceled only by reason of illegality in the proced&re by )hich they )ere obtained or for fail&re to comply )ith the conditions prescribed as re@&isitefor their retention in the la)s &nder )hich they )ere granted. There is nothingin the section )hich indicates that they can be canceled for fail&re to comply )ith the conditions prescribed by s&bse@&ent legislation. *n fact the realintention of the act seems to be that s&ch concession sho&ld be s&b4ect to theformer legislation and not to any s&bse@&ent legislation. There is no claim inthis case that there )as any illegality in the proced&re by )hich theseconcessions )ere obtained nor is there any claim that the plaintiff has notcomplied )ith the conditions prescribed in the said royal decree of 18<7. The 4&dgment of the co&rt belo) is reversed and 4&dgment is ordered in favorof the plaintiff and against the defendant for P9<66 )ith interest thereon at< per cent from the 1st day of Febr&ary 196< and the costs of the #o&rt of First *nstance. No costs )ill be allo)ed to e ither party in this co&rt.
Tolentino v :ecretary of &inance J !,! $*P5$R*6!T C+5U:6 (see ages -3E and -39 for longer facts)
Cagayan 6lectric Power M +ight Co% $nc% v C$R -E9 :CR5 />8 J 6FC6PT$,! T, !,! $*P5$R*6!T C+5U:6 F"#T+: #agayan ,lectric is a holder of a legislative franchise &nder %" -7 )here payment of - ta2 on gross earning is in lie& of all ta2es and assessments &pon privileges. *n 19<8 %" -1 amended the franchise by maing all corporate ta2payers liable for income ta2. *n 19<9 thro&gh %" <66 its franchise )as e2tended to t)o other to)ns and the ta2 e2emption )as reenacted. The commissioner re@&ired the company to pay deficiency income ta2es for the intervening period 519<8019<9. *++H,: *s #,P"G#E liable for the ta2L %HG*N=: Jes. #ongress co&ld impair the companys legislative franchise by maing it liable for income ta2. The #onstit&tion provides that a franchise is s&b4ect to amendment alteration or repeal by the #ongress )hen the p&blic interest so re@&ires. ?o)ever it cannot be denied that the said 19<9 assessment appears to be highly controversial. *t had reason not to pay income ta2 beca&se of the ta2 e2emption its franchise. For this reason it sho&ld be liable only for ta2 proper and sho&ld not be held liable for s&rcharge and interest.
Phil% Power and eveloment Co% vs% C$R J 6FC6PT$,! T, !,! $*P5$R*6!T C+5U:6 J !, $6:T
J;#" v. #ollector of *nternal %even&e W=% 7988 19 an&ary 191
hether the instit&tion m&st be devoted e2cl&sive for religio&s p&rposes or e2cl&sively for charitable p&rposes or e2cl&sively to ed&cational p&rposes to be entitled to ta2 e2emption. ?eld: *t may be admitted that there are < persons occ&pying rooms in the main b&ilding as lodgers or roomers and that they tae their meals at the resta&rant belo). These facts ho)ever are far from constit&ting a b&siness in the ordinary acceptation of the )ord3 as there is no profit realiCed by the association in any sense3 and that the p&rpose of the association is not primarily to obtain the money )hich comes from the lodgers and boarders. The real p&rpose is to eep the membership contin&ally )ithin the sphere of infl&ence of the instit&tion3 and thereby to prevent as far as possible the opport&nities )hich vice presents to yo&ng men in foreign co&ntries )ho lac home or other similar infl&ences. There is no do&bt abo&t the correctness of the contention that an instit&tion m&st devote itself e2cl&sively to one or the other of the p&rposes mentioned in the stat&te before it can be e2empt from ta2ation3 b&t the stat&te does not say that it m&st be devoted e2cl&sively to any one of the p&rposes therein mentioned. *t may be a combination of t)o or three or more of those p&rposes and still be entitled to e2emption. The J;#" cannot be said to be an instit&tion &sed e2cl&sively for religio&s p&rposes or e2cl&sively for charitable p&rposes or e2cl&sively to ed&cational p&rposes3 b&t the #o&rt believed that it is an instit&tion &sed e2cl&sively for all three p&rposes. "s s&ch it is entitled to be e2empted from ta2ation.
'ishop of N&eva +egovia v. Provincial 'oard *locos Norte W=% 788 -1 December 197X ,n 'anc "vancena 5: conc&r Facts: The %oman #atholic "postolic #h&rch represented by the 'ishop of N&eva +egovia possesses and is the o)ner of a parcel of land in the m&nicipality of +an Nicolas *locos Norte all fo&r sides of )hich face on p&blic streets. En the so&th side is a part of the ch&rch yard the convent and an ad4acent lot &sed for a vegetable garden containing an area of 1< s@&are meters in )hich there is a stable and a )ell for the &se of the convent. *n the center is the remainder of the ch&rchyard and the ch&rch. En the north side is an old cemetery )ith t)o of its )alls still standing and a portion )here formerly stood a to)er the base of )hich may still be seen containing a total area of 89 s@&are meters. "s re@&ired by the provincial board the #h&rch paid on - &ly 19 &nder protest the land ta2 on the lot ad4oining the convent and the lot )hich formerly )as the cemetery )ith the portion )here the to)er stood. The #h&rch filed an action for the recovery of the s&m paid by it to 'oard by )ay of land ta2 alleging that the collection of this ta2 is illegal. The lo)er co&rt absolved the 'oard from the complaint in regard to the lot ad4oining the convent and declared that the ta2 collected on the lot )hich formerly )as the cemetery and on the portion )here the to)er stood )as illegal. 'oth parties appealed from this 4&dgment. *ss&e: >hether the ch&rchyard the ad4acent lot &sed for a vegetable garden and the old cemetery besides the ch&rch and the convent are e2empt from land ta2es. ?eld: The e2emption in favor of the convent in the payment of the land ta2 5sec. - WcX "dministrative #ode refers to the home of the priest )ho presides over the ch&rch and )ho has to tae care of himself in order to discharge his d&ties. *t therefore m&st in this sense incl&de not only the land act&ally occ&pied by the ch&rch b&t also the ad4acent gro&nd destined to the ordinary incidental &ses of man. ,2cept in large cities )here the density of the pop&lation and the development of commerce re@&ire the &se of larger tracts of land for b&ildings a vegetable garden belongs to a ho&se and in the case of a convent its &se is limited to the necessities of the priest )hich comes &nder the e2emption. "lso land &sed as a lodging ho&se by the people )ho participate in religio&s festivities )hich constit&tes an incidental &se in religio&s f&nctions not for commercial p&rposes comes )ithin the e2emption. *t cannot be ta2ed according to its former &se 5cemetery.
@errera vs% ue1on City 7oard of 5ssessment 5eals =.%. G0176 Facts:
*n 19 the Director of the '&rea& of ?ospitals a&thoriCed ose $. ?errera and ,ster Echangco ?errera to establish and operate the +t. #atherines ?ospital. *n 19- the ?erreras sent a letter to the Q&eCon #ity "ssessor re@&esting e2emption from payment of real estate ta2 on the hospital stating that the same )as established for charitable and h&manitarian p&rposes and not for commercial gain. The e2emption )as granted effective years 19- to 19. *n 19 ho)ever the "ssessor reclassified the properties from !e2empt( to !ta2able( effective 19< as it )as ascertained that o&t - beds in the hospital 1 of )hich are for pay0patients. " school of mid)ifery is also operated )ithin the premises of the hospital.
*ss&e: >hether +t. #atherines ?ospital is e2empt from reallty ta2. %&ling: The admission of pay0patients does not detract from the charitable character of a hospital if all its f&nds are devoted e2cl&sively to the maintenance of the instit&tion as a p&blic charity. The e2emption in favo&r of property &sed e2cl&sively for charitable or ed&cational p&rpose is not limited to property act&ally indispensable therefore b&t e2tends to facilities )hich are incidental to and reasonably necessary for the accomplishment of said p&rpose s&ch as in the case of hospitals / a school for training n&rses3 a n&rses home3 property &sed to provide ho&sing facilities for interns resident doctors s&perintendents and other members of the hospital staff3 and recreational facilities for st&dent n&rses interns and residents. >ithin the p&rvie) of the #onstit&tion +t. #atherines ?ospital is a charitable instit&tion e2empt from ta2ation.
"bra v. ?ernando W=% G09--< -1 "&g&st 1981X +econd Division Fernando 5: - conc&r 1 conc&r in res< 1 on leave Facts: The provincial assessor made a ta2 assessment on the properties of the %oman #atholic 'ishop of 'ang&ed. The bishop claims ta2 e2emption from real estate ta2 thro&gh an action for declaratory relief. &dge ?ernando of the #F* "bra presided over the case. The Province of "bra filed a motion to dismiss based on lac of 4&risdiction )hich )as denied. *t )as follo)ed by a s&mmary 4&dgment granting the e2emption )itho&t hearing the side of the province. *ss&e: >hether the properties of the %oman #atholic 'ishop of 'ang&ed are ta2 e2empt. ?eld: ,2emption from ta2ation is not favored and is never pres&med so that if granted it m&st be strictly constr&ed against the ta2payer. "ffirmatively p&t the la) fro)ns on e2emption from ta2ation hence an e2empting provision sho&ld be constr&ed strictissimi 4&ris. ?erein the 4&dge accepted at its face the allegation of 'ishop A that the certain parcels of land o)ned by it are &sed Bact&ally directly and e2cl&sivelyB as so&rces of s&pport of the parish priest and his helpers and also of the 'ishop A instead of demonstrating that there is compliance )ith the constit&tional provision that allo)s an e2emption. There )as an allegation of lac of 4&risdiction 5contesting that the validity of the assessment may be @&estioned before the Gocal 'oard of "ssessment "ppeals and not the co&rt and of lac of ca&se of action 5contesting that declaratory relief is not proper as there had been breach or violation of the right of government to assess and collect ta2es on s&ch property )hich sho&ld have compel the 4&dge to accord a hearing to the petitioner rather than deciding the case immediately in favor of the 'ishop.
6::, :tandard vs% 5cting Commissioner of Customs J Tax exemtion ,++E +T"ND"%D ,"+T,%N *N#. vs. "#T*N= #E;;*++*EN,% EF #H+TE;+ 18 +#%" 88 =% No. G0181 Ectober 8 19<<
B,2emptions from ta2ation are constr&ed in strictissimi 4&ris against the ta2payer and liberally in favor of the ta2ing a&thority.B F"#T+: Petitioner engaged in the ind&stry of processing gasoline oils etc. claims for the ref&nd of special import ta2es paid p&rs&ant to the provision of %" 1-9 )hich imposed a special import ta2 Bon all goods articles or prod&cts imported or bro&ght into the Philippines.B ,2empt from this ta2 by e2press mandate of +ection < of the same la) are Bmachinery e@&ipment accessories and spare parts for the &se of ind&stries miners mining enterprises planters and farmersB. Petitioner arg&ed that the importation it made of gas p&mps &sed by their gasoline station operators sho&ld fall &nder s&ch e2emptions being directly &sed in its ind&stry. The #ollector of #&stoms of ;anila re4ected the claim and so as the #o&rt on Ta2 "ppeals. The #T" noted that the p&mps imported )ere not &sed in the processing of gasoline and other oil prod&cts b&t by the gasoline stations o)ned by the petitioner for p&mping o&t from &ndergro&nd barrels gasoline sold on retail to c&stomers. *++H,: *s the contention of the petitioner tenableL Does the s&b4ect imports fall into the e2emptionsL ?,GD: No. The contention r&ns smac against the familiar r&les that e2emption from ta2ation is not favored and that e2emptions in ta2 stat&tes are never pres&med. >hich are b&t statements in adherence to the ancient r&le that e2emptions from ta2ation are constr&ed in strictissimi 4&ris against the ta2payer and liberally in favor of the ta2ing a&thority. Tested by this precept )e cannot ind&lge in e2pansive constr&ction and )rite into the la) an e2emption not therein set forth. %ather )e go by the reasonable ass&mption that )here the +tate has granted in e2press terms certain e2emptions those are the e2emptions to be considered and no more. +ince the la) states that to be ta20e2empt e@&ipment and spare parts sho&ld be Bfor the &se of ind&striesB the coverage herein sho&ld not be enlarged to incl&de e@&ipment and spare parts for &se in dispensing gasoline at retail.
Villanueva vs% $loilo City J +,C5+ T5F5T$,! =% G0<1 8 December 19<8 ,n 'anc #astro 5: 8 conc&r Facts: En -6 +eptember 19< the ;&nicipal 'oard of *loilo #ity enacted Erdinance 8< imposing license ta2 fees &pon tenement ho&se 5P3 tenemen ho&se partly engaged or )holly engaged in and dedicated to b&siness in 'aCa *Cnart and "ldeg&er +treets 5P per apartment3 and tenement ho&se padtly or )holly engaged in b&siness in other streets 5P1 per apartment. The validity of s&ch ordinance )as challenged by ,&sebio and %emedios $illan&eva o)ners of fo&r tenement ho&ses containing - apartments. The +&preme #o&rt held the ordinance to be <ra vires. En 1 an&ary 19<6 ho)ever the m&nicipal board believing that it ac@&ired a&thority to enact an ordinance of the same nat&re p&rs&ant to the Gocal "&tonomy "ct enacted Erdinance 11 5series of 19<6 ,&sebio and %emedios $illani&eva assailed the ordinance ane). *ss&e: >hether Erdinance 11 violate the r&le of &niformity of ta2ation. ?eld: The #o&rt has r&led that tenement ho&ses constit&te a distinct class of property3 and that ta2es are &niform and e@&al )hen imposed &pon all property of the same class or character )ithin the ta2ing a&thority.
The fact that the o)ners of the other classes of b&ildings in *loilo are not imposed &pon by the ordinance or that tenement ta2es are imposed in other cities do not violate the r&le of e@&ality and &niformity. The r&le does not re@&ire that ta2es for the same p&rpose sho&ld be imposed in different territorial s&bdivisions at the same time. +o long as the b&rden of ta2 falls e@&ally and impartially on all o)ners or operators of tenement ho&ses similarly classified or sit&ated e@&ality and &niformity is accomplished. The pres&mption that ta2 stat&tes are intended to operate &niformly and e@&ally )as not overthro)n herein.
C$R vs% P5:C,R J Taxation 5voidance and 6vasion -69 +#%" 6 =% No. 18-1 &ne 9 1999 B"n assessment is not necessary before a criminal charge can be filed.B
F"#T+: The '*% e2amined the boos of acco&nt of Pascor %ealty and Devt #orp for years 198< 1987 and 1988 from )hich a ta2 liability of 16. ;illion Pesos )as fo&nd. 'ased on the recommendations of the e2aminers the #*% filed an information )ith the DE for ta2 evasion against the officers of Pascor. Hpon receipt of the s&bpoena the latter filed an &rgent re@&est for reconsiderationOreinvestigation )ith the #*% )hich )as immediately denied &pon the gro&nd that no formal assessment has yet been iss&ed by the #ommisioner. Pascor elevated the #*%Ks d ecision to the #T" on a petition for revie). The #*% filed a ;otion to Dismiss on the gro&nd of lac of 4&risdiction of #T" as there )as no formal assessment made against the respondents. The #T" dismissed the motion hence this petition.
*++H,: *s a formal assessment necessary in the filing of a criminal complaintL
?,GD: No. +ection of the N*%# states that an assessment is not necessary before a criminal charge can be filed. This is the general r&le. Private respondents failed to sho) that they are entitled to an e2ception. ;oreover the criminal charge need on ly be s&pported by a prima facie sho)ing of fail&re to file a re@&ired ret&rn. This fact need not be proven by an assessment. The iss&ance of an assessment m&st be disting&ished from the filing of a complaint. 'efore an assessment is iss&ed there is by practice a pre0assessment notice sent to the ta2payer. The ta2payer is then given a chance to s&bmit position papers and doc&ments to prove that the assessment is &n)arranted. *f the commissioner is &nsatisfied an assessment signed by him or her is then sent to the ta2payer informing the latter specifically and clearly that an assessment has been made against him or her. *n contrast the criminal charge need not go thro&gh all these. The criminal charge is filed directly )ith the DE. Thereafter the ta2payer is notified that a criminal case had been filed against him not that the commissioner has iss&ed an assessment. *t m&st be stressed that a criminal complaint is instit&ted not to demand payment b&t to penaliCe the ta2payer for violation of the Ta2 #ode.
