alltax

I. Basic Principles of a Sound Tax System/Meaning of Neutral Tax Chavez v. Ongpin Taganito Mining Corporation v. Commissioner II.Nature of the Power of Taxation: Inherent in Sovereignty/Distinguished from Police Power and Eminent Domain Roxas v. CTA Tanada v. Angara Land Transportation Office v. City of Butuan III. Exclusively Legislative in Nature: Extent of the Legislative Power to Tax Tan v. Del Rosario Commissioner v. Santos IV. Exclusively Legislative in Nature: Power to Tax Cannot be Delegated Maceda v. ERB Maceda v. Macaraig Basco v. PAGCOR V. Who May Question the Validity of a Tax Measure or Expenditure of Taxes? – ―Taxpayer Suit‖ – Lozada v. Commissioner Maceda v. Macaraig Chavez v. PCGG Gonzales v. Narvasa Bayan v. Executive Secretary Del Mar v. PAGCOR Miranda v. Carreon VI. Inherent Limitations: Purpose Must Be Public in Nature Caltex v. Commission on Audit Pascual v. Secretary of Public Works Tio v. Videogram Regulatory Board Gaston v. Republic Planter VII. Prohibition Against Delegation of Taxing Power/Exceptions; Delegation to Local Governments Basco v. PAGCOR Land Transportation Office v. City of Butuan VIII. Prohibition Against Delegation of Taxing Power/Exceptions; Delegation to the President Garcia v. Executive Secretary IX. Prohibition Against Delegation of Taxing Power/Exceptions; Delegation to Administrative Agencies Osmena v. Orbos Commissioner v. CA X. Exemption of Government Entities/Agencies and Instrumentalities Maceda v. Macaraig Mactan Cebu Airport v. Marcos XI. International Comity Tanada v. Angara Mitsubishi Corporation v. Commissioner XII. Limitation of Territorial Jurisdiction Iloilo Bottlers v. City of Iloilo Commissione v. BOAC Hopewell Power v. Commissioner Smith v. Commissioner XIII. Constitutional Limitations: Due Process of Law Sison v. Ancheta XIV. Equal Protection of the Laws Tan v. Del Rosario Philippine Rural Electric v. Secretary XV. Uniformity and Equity in Taxation: Taxpayers/subject or items to be taxed Sison v. Ancheta Tolentino v. Secretary of Finance Classification of Abra Valley College v. Aquino XX. Prohibition Against Taxation of Nin-Stock, Non-Profit Educational Institutions Commissioner v. CA XXI. Others: Grant of Tax Exemptions Chavez v. PCGG Republic of the Philippines v. City of Kidapawan XXII. Veto of Appropriation, Revenue, Tariff bills by the President Gonzales v. Macaraig XXIII. Non-impairment of the Jurisdiction of the Supreme Court Commissioner v. Santos San Miguel Corp v. Avelino XXIV. Revenue Bills Shall Representatives Tolentino v. Secretary of Finance Originate from the House of XXV. Infringement of Press Freedom Tolentino v. Secretary of Finance XXVI. Grant of Franchise Tolentino v. Secretary of Finance XXVII. Situs of Taxation and Double Taxation: Situs of Subjects of Taxation Metro Alliance Holdings v. Commissioner Commissioner v. BOAC Wells Fargo v. Collector XXVIII. Multiplicity of Situs Collector v. Lara XXIX. Double Taxation Collector v. Lara XXX. Instances of Double Taxation in its Broad Sense Villanueva v. City of Iloilo XXXI. Constitutionality of Double Taxation City of Baguio v. De Leon Pepsi Cola v. Butuan China Banking v. CA XXXII. Means of Avoiding or Minimizing the Burden of Taxation: Tax Avoidance Delpher Traders Corp v. IAC Commissioner v. Lincoln Philippines Life Insurance XXXIII. Tax Evasion Republic v. Gonzales People of the Philippines v. Lucio Tan XXXIV. Exemption from Taxation Greenfield v. Meer XXXV. Tax Remission / Condonation Surigao Con. Min v. Collector XXXVI. Tax Amnesty Commissioner v. CA Commissioner v. Marubeni XXXVII. Kinds of Tax Exemption: Express and Implied Commissioner v. Mitsubishi Metal Corporation XXXVIII. Nature of the Power to Grant Tax Exemption Basco v. PAGCOR Republic of the Philippines v. City of Kidapawan XXXIX. Rationale: Grounds for Tax Exemption Maceda v. Macaraig Davao Gulf v. CIR XL. Nature of Tax Exemption Tolentino v. Secretary of Finance PLDT v. City of Davao Philippine Acethylene v. Commissioner Republic of the Philippines v. City of Kidapawan XLI. Laws Granting Tax Exemption: Constitution Abra Valley College v. Aquino XLII. Construction of Statutes Granting Tax Exemptions: General Rule Commissioner v. CA Misamis Oriental Association v. DOF Nestle Philippines v. CA XVI. Prohibition Against Impairment of Obligations of Contracts Philippine Rural Electric v. Secretary XVII. Prohibition Against Infringement of Religious Freedom American Bible Society v. City of Manila XVIII. Prohibition Regarding Appropriation of Proceeds of Taxation Osmena v. Orbos Gaston v. Republic Planters Bank XIX. Prohibition Against Taxation of Religious, Charitable Entities and Educational Entities XLIII. Construction of Statutes Granting Tax Exemptions:Exceptions Maceda v. Macaraig XLIV. Sources, Application, Interpretation And Administration of Tax Laws: Tax Treaties/ International Agreements Maceda v. Macaraig XLV. Revenue Rules and Regulation/ Administrative/BIR Rulings and Opinions Commissioner v. CA XLVI. Validity of Revenue Rules and Regulation Tan v. Del Rosario Commissioner v. CA XLVII. Effectivity and Validity of Tax Ordinance Tuzon v. CA Hagonoy Market Vendor Association v. Municipality of Hagonoy Jardine Davies Insurance v. Aliposa XLVIII. Interpretation and Application of Tax Laws: Nature of Internal Revenue Law Hilado v. Collector XLIX. Construction of Tax Laws: Rule when Legislative Intent is Clear Lorenzo v. Posadas Umali v. Estanislao Commissioner v. Solid Bank Corp. L. Rule When There is Doubt Collector v. La Todena LI. Application of Tax Laws Umali v. Estanislao LII. Application of Revenue Regulations/ Rulings and Effects of Repeal Commissioner v. CA Commissioner v. Telefunken Commissioner v. Michel Lhuillier Pawnshop LIII. Mandatory and Directory Provision of Tax Laws Roxas v. Raferty Pecson v. CA LIV. Tax Remedies Angeles City v. Angeles City Electric Corporation Oceanic Wireless Network Inc. v CIR CIR v. Metro Star Superama Yamane v. BA Lepanto Condominium Corporation Regulations No. 2-86 is even more oppressive and unconstitutional as it imposes successive increase of 150% over the 1986 tax. Issue: Petitioner Chavez and intervenor ROAP question the constitutionality of Executive Order No. 73 insofar as the revision of the assessments and the effectivity thereof are concerned. Held: Chavez failed to raise any objection against said decree. It was ROAP which questioned the constitutionality thereof. Presidential Decree No. 464 furnishes the procedure by which a tax assessment may be questioned: Within sixty days from the date of receipt of the, written notice of assessment, any owner who doubts the assessment of his property, may appeal to the Local Board of Assessment Appeals. In case the, owner or administrator of the property or the assessor is not satisfied with the decision of the Local Board of Assessment Appeals, he may, within thirty days from the receipt of the decision, appeal to the Central Board of Assessment Appeals. The decision of the Central Board of Assessment Appeals shall become final and executory after the lapse of fifteen days from the date of receipt of the decision. Chavez argues further that the unreasonable increase in real property taxes brought about by Executive Order No. 73 amounts to a confiscation of property repugnant to the constitutional guarantee of due process, invoking the cases of Ermita-Malate Hotel, et al. v. Mayor of Manila and Sison v. Ancheta, et al. The reliance on these two cases is certainly misplaced because the due process requirement called for therein applies to the "power to tax." Executive Order No. 73 does not impose new taxes nor increase taxes. The government recognized the financial burden to the taxpayers that will result from an increase in real property taxes. Hence, Executive Order No. 1019 was issued on April 18, 1985, deferring the implementation of the increase in real property taxes resulting from the revised real property assessments, from January 1, 1985 to January 1, 1988. The issuance of Executive Order No. 73 which changed the date of implementation of the increase in real property taxes from January 1, 1988 to January 1, 1987 and therefore repealed Executive Order No. 1019. We agree with the observation of the Office of the Solicitor General that without Executive Order No. 73, the basis for collection of real property taxes will still be the 1978 revision of property values. Certainly, to continue collecting real property taxes based on valuations arrived at several years ago, in disregard of the increases in the value of real properties that have occurred since then, is not in consonance with a sound tax system. Fiscal adequacy, which is one of the characteristics of a sound tax system, requires that sources of revenues must be adequate to meet government expenditures and their variations. ACCORDINGLY, the petition and the petition-in-intervention are hereby DISMISSED. SO ORDERED. CHAVEZ v. ONGPIN 186 SCRA 331 Topic: Basic Principles of a Sound Tax System/Meaning of Neutral Tax Facts: The petition seeks to declare unconstitutional Executive Order No. 73 dated November 25, 1986: EXECUTIVE ORDER No. 73 PROVIDING FOR THE COLLECTION OF REAL PROPERTY TAXES BASED ON THE 1984 REAL PROPERTY VALUES, AS PROVIDED FOR UNDER SECTION 21 OF THE REAL PROPERTY TAX CODE, AS AMENDED The petitioner, Francisco I. Chavez, is a taxpayer and an owner of three parcels of land. He alleges the following: that Executive Order No. 73 accelerated the application of the general revision of assessments to January 1, 1987 thereby mandating an excessive increase in real property taxes by 100% to 400% on improvements, and up to 100% on land; that any increase in the value of real property brought about by the revision of real property values and assessments would necessarily lead to a proportionate increase in real property taxes; that sheer oppression is the result of increasing real property taxes at a period of time when harsh economic conditions prevail; and that the increase in the market values of real property as reflected in the schedule of values was brought about only by inflation and economic recession. The intervenor Realty Owners Association of the Philippines, Inc. (ROAP), which is the national association of owners-lessors, joins Chavez in his petition to declare unconstitutional Executive Order No. 73, but additionally alleges the following: that Presidential Decree No. 464 is unconstitutional insofar as it imposes an additional one percent (1%) tax on all property owners to raise funds for education, as real property tax is admittedly a local tax for local governments; that the General Revision of Assessments does not meet the requirements of due process as regards publication, notice of hearing, opportunity to be heard and insofar as it authorizes "replacement cost" of buildings (improvements) which is not provided in Presidential Decree No. 464, but only in an administrative regulation of the Department of Finance; and that the Joint Local Assessment/Treasury TAGANITO MINING CORPORATION v. COMMISSIONER OF INTERNAL REVENUE CTA CASE NO. 7769 APRIL 10, 2010 Facts: Petitioner is a VAT-registered corporation engaged in the business of exploring, extracting, mining, selling, and exporting precious metals and their by-products. Petitioner filed its Quarterly VAT Returns for the first to fourth quarters of 2006. On March 26, 2008, Petitioner filed with the Respondent BIR‘s Excise Taxpayers‘ Assistance Division claims for refund in the amount of P22, 421, 260.26, allegedly representing unutilized input Value-Added Tax (VAT) on importation/domestic purchases of capital goods attributable to zero-rated sales for the year 2006. But while the CIR has not yet issued a final decision for Petitioner‘s administrative claim, Petitioner filed an instant Petition for Review on April 17, 2008 with the Court of Tax Appeals in order to toll the running of the two-year period to judicially claim a tax refund/credit as provided under Sec. 229 of the NIRC. The reckoning period was when Petitioner filed its 1st quarterly VAT returns on April 24, 2006. The claimed amount was subsequently reduced to P4, 611,123 after the Excise Taxpayer‘s Assistance Division of the BIR approved the refund application of P17, 810, 137.26 unutilized input VAT. The Respondent contends that taxes paid and collected by the BIR are presumed to have been made in accordance with laws and the rules and regulations, and the burden to prove otherwise is upon the taxpayerclaimant. A claim for refund partakes of the nature of an exemption which cannot be allowed unless granted in the most categorical language. These claims are construed strictly against the taxpayer and liberally in favor of the taxing authority. Such claims for refund is subject to administrative investigation by the BIR; hence, the filing of a judicial claim was prematurely filed since sec. 112 of the NIRC requires the submission of complete documents in support of the application for tax refund before the 120-day audit period by the BIR can apply, and before the taxpayer could avail of judicial remedies provided by law. Moreover, Respondent claims that Petitioner failed to show compliance with the administrative requirements set forth by NIRC prior to the filing of judicial claim. Hence, Petitioner‘s judicial claim for refund must be denied. However, Petitioner claims that it complied with the requirements set forth by law, and that its claim for refund was supported by official receipts. Issue: Whether or not Petitioner is entitled to the refund of excess input VAT of P4.6 M paid on its importation of capital goods for taxable year 2006. (a) Whether or not the judicial claim was prematurely filed. (b) Whether or not substantiation and accounting requirements for filing a tax refund were complied with. Held: In the case at bar, the two-year prescriptive period commenced to run when Petitioner filed its Quarterly VAT Return for the first quarter of 2006. Thus, Petitioner timely filed its Petition for Review. However, Petitioner‘s Schedule of 2006 Import Transactions reveals that input VAT claim of P4.6 M pertains to importation of capital goods for the months of January and February 2006. However, the supporting official receipts do not prove Petitioner‘s actual payment of the claimed input VAT and there is no year indicated supporting the January 2006 claim. The substantiation requirement under the Revenue Regulations provides that tax claims on imported goods must be substantiated by an import entry or other equivalent document showing actual payment of VAT on imported goods. As to the accounting requirement of maintaining a subsidiary journal, which shall contain the information on the total input tax on importation of capital goods as well as the monthly input tax claimed in VAT declaration or return, Petitioner failed to prove that such importations are in the nature of ―capital goods or properties‖. Assuming that the subject importations qualify as capital goods, the related input VAT of P4.6 M shall be spread/amortized over the estimated useful life of the capital goods, which will mean that the same amount would not be entirely refundable. For failure of Petitioner to establish the factual basis of its claim for refund, the Court has to deny the claim. It is a well settled rule that a taxpayer claimant, like herein Petitioner, has the burden of proof to show that it is entitled to the refund of the amount claimed, considering that taxes are presumed to have been collected in accordance with laws and regulations. The burden of proof rests upon the taxpayer to establish by sufficient and competent evidence its entitlement to a refund. NOTE: Administrative feasibility, one of the principles of a sound tax system, provides that tax laws should be capable of convenient, just, and effective administration. This principle represents tax administration. be borne in mind that the sale of the Nasugbu farm lands to the very farmers who tilled them for generations was not only inconsonance with, but more in obedience to the request and pursuant to the policy of our Government to allocate lands to the landless. It was the bounden duty of the Government to pay the agreed compensation after it had persuaded Roxas y Cia to sell its haciendas, and to subsequently subdivide them among the farmers at very reasonable terms and prices. However, the Government could not comply with its duty for lack of funds. Obligingly, Roxas y Cia. shouldered the Government's burden, went out of its way and sold lands directly to the farmers in the same way and under the same terms as would have been the case had t he G ov e r nm e nt do n e i t i t s el f . F o r t hi s m a gn an i m o us a c t , t h e m un i c i p al c o u nc i l o f N as u gb u p as s e d a resolution expressing the people's gratitude. In fine, Roxas y Cia cannot be considered a real estate dealer for the sale in question. Hence, pursuant to Section 34 of the Tax Code the lands sold to the farmers are capital assets, and the gain derived from the sale thereof is capital gain, taxable only to the extent of 50%. The power of taxation includes the power to destroy if it is used validly as an implement of the police power of the state. If it is used solely for the purpose of raising revenue, it does not include the power to destroy. TAÑADA v. ANGARA G.R. No. 118295 Topic: Nature of the Power of Taxation: Inherent in Sovereignty/Distinguished from Police Power and Eminent Domain Facts: Like many other developing countries, the Philippines joined WTO as a founding member with the goal, as articulated by President Fidel V. Ramos in two letters to the Senate (infra), of improving "Philippine access to foreign markets, especially its major trading partners, through the reduction of tariffs on its exports, particularly agricultural and industrial products." The President also saw in the WTO the opening of "new opportunities for the services sector . . . , (the reduction of) costs and uncertainty associated with exporting . . . , and (the attraction of) more investments into the country." Although the Chief Executive did not expressly mention it in his letter, the Philippines — and this is of special interest to the legal profession — will benefit from the WTO system of dispute settlement by judicial adjudication through the independent WTO settlement bodies called (1) Dispute Settlement Panels and (2) Appellate Tribunal. Heretofore, trade disputes were settled mainly through negotiations where solutions were arrived at frequently on the basis of relative bargaining strengths, and where naturally, weak and underdeveloped countries were at a disadvantage. On April 15, 1994, Respondent Rizalino Navarro, then Secretary of The Department of Trade and Industry (Secretary Navarro, for brevity), representing the Government of the Republic of the Philippines, signed in Marrakesh, Morocco, the Final Act Embodying the Results of the Uruguay Round of Multilateral Negotiations. By signing the Final Act, Secretary Navarro on behalf of the Republic of the Philippines, agreed: (a) to submit, as appropriate, the WTO Agreement for the consideration of their respective competent authorities, with a view to seeking approval of the Agreement in accordance with their procedures; and to adopt the Ministerial Declarations and Decisions. 7 ROXAS Y CIA v. COURT OF TAX APPEALS 23 SCRA 276 Topic Inherent in Sovereignty/Distinguished from Police Power and Eminent Domain Facts D o n P e d r o R o x as an d D o n a C arm e n A ya l a, S pa ni s h s u bj ec ts , t ra ns m i tt e d t o t h ei r gr a nd c hi l dr e n b yh e r edi t ar y s u c c es s i o n s e v e r al pr o pe r ti e s . T o m a na g e t h e a b ov e m en ti on e d pr o p er ti es , s ai d c hi l dr e n, namely, Antonio Roxas, Eduardo Roxas and Jose Roxas, formed a partnership called Roxas y Compania.At the conclusion of the WW2, the tenants who have all been tilling the lands in Nasugbu for generationse x p re s s e d t h ei r de s i re t o pu rc h as e fr om R o x a s y C i a. th e pa rc el s w hi c h t he y ac t u al l y oc c u pi e d. F o r i t s part, the Government, in consonance with the constitutional mandate to acquire big landed estates anda p p o r t i o n them among landless tenants-farmers, persuaded t h e R o x a s b r o t h e r s t o p a r t w i t h t h e i r l and h ol di ng s . C o nf e re nc e s w er e h el d wi t h t h e f a rm e rs i n t he e a rl y p a rt of 19 4 8 a n d fi n al l y th e R o x a s brothers agreed to sell 13,500 hectares to the Government for distribution to actual occupants for a priceof P2,079,048.47 plus P300,000.00 for survey and subdivision expenses. It turned out however that theGovernment did not have funds to cover the purchase price, and so a special arrangement was made for the Rehabilitation Finance Corporation to advance to Roxas y Cia. the amount of P1,500,000.00 as loan.Collateral for such loan were the lands proposed to be sold to the farmers. Under the arrangement, Roxasy Cia. allowed the farmers to buy the lands for the same price but by installment, and contracted with theRehabilitation Finance Corporation to pay its loan from the proceeds of the yearly amortizations paid bythe farmers. The CIR demanded from Roxas y Cia the payment o f d e f i c i e n c y i n c o m e t a x e s r e s u l t i n g f r o m t h e inclusion as income of Roxas y Cia. of the unreported 50% of the net profits for 1953 and 1955 derivedf r om th e s al e of t he N as u g bu f a rm l a nd s t o t h e te n an ts , a nd t h e di s a l l o w a n c e o f de d uc ti on s fr om g r os s income of various business expenses and contributions claimed by Roxas y Cia. and the Roxas brothers.F o r th e r ea s on t h at R o x as y C i a. s u b di v i d ed i t s N as ug b u f a rm l a nd s a n d s ol d t h em t o t h e fa rm e rs on installment, the Commissioner considered the partnership as engaged in the business of real estate, hence,10 0% o f t he pr of i t s de ri v e d th e re f rom w a s t a x e d. T he R o x as b ro th e rs p ro t es t e d th e a s s es s m e nt b u t i n a s m u c h a s s a i d p r o t e s t w a s denied, they instituted an appeal in the CTA which s u s t a i n e d t h e assessment. Hence, this appeal. Issue: Is Roxas y Cia liable for the payment of deficiency income for the sale of Nasugbu farmlands? Held: NO. The proposition of the CIR cannot be favorably accepted in this isolated transaction with its peculiar c i rc um s ta n c e s i n s p i t e o f t he fa c t th at t he r e w er e h un d re ds of v e n de e s . A l t ho u gh t he y pa i d f or t h ei r re s p e c ti v e h ol di n gs i n i ns t al l m e nt f or a p e ri od of 10 ye a r s , i t wo ul d n ev e rt h el e s s n ot m ak e t he v e nd o r Roxas y Cia. a real estate dealer during the 10-year amortization period. It should (b) On December 16, 1994, the President of the Philippines signed Instrument of Ratification, the Issue: Whether provisions of the Agreement Establishing the World Trade Organization unduly limit, restrict and impair Philippine sovereignty specifically the legislative power which, under Sec. 2, Article VI, 1987 Philippine Constitution is "vested in the Congress of the Philippines". Held: The WTO Agreement provides that ―each Member shall ensure the conformity of its laws, regulations and administrative procedures with its obligations as provided in the annexed Agreements." Petitioners maintain that this undertaking "unduly limits, restricts and impairs Philippine sovereignty, specifically the legislative power which under Sec. 2, Article VI of the 1987 Philippine Constitution is vested in the Congress of the Philippines. It is an assault on the sovereign powers of the Philippines because this means that Congress could not pass legislation that will be good for our national interest and general welfare if such legislation will not conform with the WTO Agreement, which not only relates to the trade in goods . . . but also to the flow of investments and money . . . as well as to a whole slew of agreements on socio-cultural matters. More specifically, petitioners claim that said WTO proviso derogates from the power to tax, which is lodged in the Congress. And while the Constitution allows Congress to authorize the President to fix tariff rates, import and export quotas, tonnage and wharfage dues, and other duties or imposts, such authority is subject to "specified limits and . . . such limitations and restrictions" as Congress may provide, as in fact it did under Sec. 401 of the Tariff and Customs Code. LAND TRANSPORTATION OFFICE v. CITY OF BUNUAN G.R. No. 131512, January 20, 2000 Topic: Nature of the Power of Taxation: Inherent in Sovereignty/Distinguished from Police Power and Eminent Domain Facts: The Sangguniang Panglungsod (SP) of Butuan passed SP Ordinance No. 916-92 entitled ―An Ordinance Regulating the Operation of Tricycles-forHire, providing mechanism for the issuance of Franchise, Registration and Permit, and Imposing Penalties for Violations thereof and for other Purposes.‖ The ordinance provided for, among other things, the payment of franchise fees for the grant of the franchise of tricycles-for-hire, fees for the registration of the vehicle, and fees for the issuance of a permit for the driving thereof. Petitioner LTO explains that one of the functions of the national government that has been transferred to local government units is the franchising authority over tricycles-for-hire of the Land Transportation Franchising and Regulatory Board (LTFRB) but NOT the authority of the LTO to register all motor vehicles and to issue to qualified persons of licenses to drive such vehicles. Respondent city of Bunuan asserts that one of the salient provisions introduced by the Local Government Code is in the area of Local Taxation which allows LGUs to collect registration fees or charges along with, in its view, the corresponding issuance of all kinds of licenses or permits for the driving of tricycles. Relying on Section 129 and Section 133 of the Local Government Code, which read: ―Sec. 129. Power to Create Sources of Revenue. - Each Local Government Unit shall exercise its power to create its own sources of revenue and to levy taxes, fees, and charges subjects to the provisions herein, consistent with the basic policy of local autonomy. Such taxes, fees and charges shall accrue exclusively to the local government units.‖ ―Sec. 133. Common Limitations on the Taxing Power of Local Government Units. – Unless otherwise provided herein, the exercise of taxing powers of provinces, cities, municipalities, and barangays shall NOT extend to the following: xxx…..xxx….xxx (l) Taxes, fees or charges for the registration of motor vehicles and for the issuance of all kinds of licenses or permits for the driving thereof, EXCEPT tricycles Issue: Whether the power of the LTO to register, tricycles in particular, as well as to issue licenses for the driving thereof, has devolved to Local Government Units? Held: The reliance made by the Respondents on the broad taxing power of LGUs, specifically under Sec. 133 of the Local Government Code, is tangential (a completely different line of thought or action). Police power and Taxation, along with Eminent Domain, are inherent powers of sovereignty which the State might SHARE with the Local Government Units by DELEGATION given under a constitutional or a statutory fiat. All these inherent powers are for Public Purpose and Legislative in Nature but the similarities end there. The basic aim of POLICE POWER is public good and welfare. TAXATION, in its case, focuses on the power of government to raise revenue in order to support its existence and carry out its legitimate objectives. Although correlative to each other in many respects, the grant of one does not necessarily carry with it the grant of the other. The two powers are, by tradition and jurisprudence, separate and distinct powers, varying in their respective concepts, character, scopes and limitations. To construe the tax provisions of Sec. 133 (l) indistinctively would result in the REPEAL to that extent of LTO‘s REGULATORY POWER which evidently has NOT been INTENDED. The power over tricycles granted under Section 458 (a)(3)(vi) of the Local Government Code to LGUs is the power to regulate their operation and to grant franchises for the operation thereof originally by LTFRB. The EXCLUSIONARY CLAUSE contained in the tax provisions of Sec. 133(l) of the Local Government Code must NOT be held to have had the effect of withdrawing the express power of LTO to cause the registration of all motor vehicles and the issuance of licenses for the driving thereof. These functions of the LTO are essentially REGULATORY in NATURE, exercised pursuant to the POLICE POWER of the State, whose BASIC OBJCTIVES are to ACHIEVE ROAD SAFETY by insuring the road worthiness of these motor vehicles and competence of drivers. In G.R. No. 109289, it is asserted that the enactment of Republic Act No. 7496 violates the following provisions of the Constitution: Article VI, Section 26(1) — Every bill passed by the Congress shall embrace only one subject which shall be expressed in the title thereof. Article VI, Section 28(1) — The rule of taxation shall be uniform and equitable. The Congress shall evolve a progressive system of taxation. Article III, Section 1 — No person shall be deprived of . . . property without due process of law, nor shall any person be denied the equal protection of the laws. In G.R. No. 109446, petitioners, assailing Section 6 of Revenue Regulations No. 2-93, argue that public respondents have exceeded their rule-making authority in applying SNIT to general professional partnerships. Issue: Whether or not the tax law enacted by the Congress is unconstitutional for being violative of due process. Held: Petitioner intimates that Republic Act No. 7496 desecrates the constitutional requirement that taxation "shall be uniform and equitable" in that the law would now attempt to tax single proprietorships and professionals differently from the manner it imposes the tax on corporations and partnerships. The contention clearly forgets, however, that such a system of income taxation has long been the prevailing rule even prior to Republic Act No. 7496. Uniformity of taxation, like the kindred concept of equal protection, merely requires that all subjects or objects of taxation, similarly situated, are to be treated alike both in privileges and liabilities (Juan Luna Subdivision vs. Sarmiento, 91 Phil. 371). Uniformity does not forefend classification as long as: (1) the standards that are used therefor are substantial and not arbitrary, (2) the categorization is germane to achieve the legislative purpose, (3) the law applies, all things being equal, to both present and future conditions, and (4) the classification applies equally well to all those belonging to the same class (Pepsi Cola vs. City of Butuan, 24 SCRA 3; Basco vs. PAGCOR, 197 SCRA 52). What may instead be perceived to be apparent from the amendatory law is the legislative intent to increasingly shift the income tax system towards the schedular approach in the income taxation of individual taxpayers and to maintain, by and large, the present global treatment on taxable corporations. We certainly do not view this classification to be arbitrary and inappropriate. Petitioner gives a fairly extensive discussion on the merits of the law, illustrating, in the process, what he believes to be an imbalance between the tax liabilities of those covered by the amendatory law and those who are not. With the legislature primarily lies the discretion to determine the nature (kind), object (purpose), extent (rate), coverage (subjects) and situs (place) of taxation. This court cannot freely delve into those matters which, by constitutional fiat, rightly rest on legislative judgment. Of course, where a tax measure becomes so unconscionable and unjust as to amount to confiscation of property, courts will not hesitate to strike it down, for, despite all its plenitude, the power to tax cannot override constitutional proscriptions. This stage, however, has not been demonstrated to have been reached within any appreciable distance in this controversy before us. The due process clause may correctly be invoked only when there is a clear contravention of inherent or constitutional limitations in the exercise of the tax power. No such transgression is so evident to us. There is, then and now, no distinction in income tax liability between a person who practices his profession alone or individually and one who does it through partnership (whether registered or not) with others in the exercise of a common profession. Indeed, outside of the gross compensation income tax and the final tax on passive investment income, under the present income tax system all individuals deriving income from any source whatsoever are treated in almost invariably the same manner and under a common set of rules. We can well appreciate the concern taken by petitioners if perhaps we were to consider Republic Act No. 7496 as an entirely independent, not merely as an amendatory, piece of legislation. The view can easily become myopic, however, when the law is understood, as it should be, as only forming part of, and subject to, the whole income tax concept and precepts long obtaining under the National Internal Revenue Code. To elaborate a little, the phrase "income taxpayers" is an all embracing term used in the Tax Code, and it practically covers all persons who derive taxable income. The law, in levying the tax, adopts the most comprehensive tax situs of nationality and residence of the taxpayer (that renders citizens, regardless of residence, and resident aliens subject to income tax liability on their income from all sources) and of the generally accepted and internationally recognized income taxable base (that can subject non-resident aliens and foreign corporations to income tax on their income from Philippine sources). In the process, the Code classifies taxpayers into four main groups, namely: (1) Individuals, (2) Corporations, (3) Estates under Judicial Settlement and (4) Irrevocable Trusts (irrevocable both as to corpus and as to income). TAN v. DEL ROSARIO G.R. No. 109289 October 3, 1994 Topic: Exclusively Legislative in Nature: Extent of the Legislative Power to Tax Facts: These two consolidated special civil actions for prohibition challenge, in G.R. No. 109289, the constitutionality of Republic Act No. 7496, also commonly known as the Simplified Net Income Taxation Scheme ("SNIT"), amending certain provisions of the National Internal Revenue Code and, in G.R. No. 109446, the validity of Section 6, Revenue Regulations No. 2-93, promulgated by public respondents pursuant to said law. Petitioners claim to be taxpayers adversely affected by the continued implementation of the amendatory legislation. COMMISSIONER v. SANTOS G.R. NO 119252, AUGUST 18, 1997 Topic: Extent of the Legislative Power the ERB issued an order granting a provisional increase of P1. the present tariff and tax structure increases manufacturing costs and renders the local jewelry manufacturers uncompetitive against other countries even before they start manufacturing and trading. Held: The Solicitor General has pointed out: ." In this regard. 1990. local jewelry manufacturers contend with the (manufacturing) excise tax of twenty (20%) percent (to be applied in stages) customs duties on imported raw materials. 0020596 was issued by Deputy Commissioner Eufracio D.R. Again. par. and place the same under preventive embargo.S. and that the Commissioner of Internal Revenue and Customs be prevented or enjoined from issuing mission orders and other orders of similar nature. 1990. Prior to the issuance of E. This was postponed to November 5.01. authorizing provisional increase.. In the Maceda case. Miladay Jewels. G. Subsequently. (a) of the NIRC and Section 104.03 and 17. again they have no records (receipts) to indicate where and when they will utilize such tax credits. Aside from the ten (10%) percent value added tax (VAT). 137. We lament Our helplessness over this second provisional increase in oil price. 1990. 90-106. the local manufacturer has no recourse but to the back door for smuggled goods if only to be able to compete even ineffectively. 1988. Inc. The order of testimony both with respect to the examination of the particular witness and to the general course of the trial is within the discretion of the court and the exercise of this discretion in permitting to be introduced out of the order prescribed by the rules is not improper (88 C.42 per liter. Inc. supra). 1990 (E. as pointed out by Justice Padilla. as amended by Executive Order No.R. We also note the Solicitor General's comments that "the ERB is not averse to the idea of a presidential review of its decision. In this connection. ENERGYREGULATORY BOARD G. Petitioner Maceda maintains that the order of proof deprived him of his right to finish his cross-examination of Petron's witnesses and denied him his right to cross-examine each of the witnesses of Caltex and Shell. these findings "are not final. We dismissed the petition on December 18. Private respondent Guild of Philippine Jewelers. (G. and since many of them do not legally exist or operate on officially (sic). Issue: Whether Section 150. ruled that the laws in question are confiscatory and oppressive. 1990. 1991. 1988.R. . 1990. On November 5. Marco and Jewelry By Marco & Co. 71. Perhaps. Under the foregoing factual circumstances.. In the same order of September 21.D.R. or cease manufacturing activities and instead engage in the trading (sic) of smuggled finished jewelry. 1988 to present". Santos to BIR officers to examine the books of accounts and other accounting records of Hans Brumann. ERB. MACARAIG G. Inc. 90-382 and 90384. issued Regional Mission Order No. or property without due process of law … MACEDA v. they have no documents to present when filing this exemption because. most manufacturers source from black market for smuggled goods. private respondents‘ oil companies filed with the ERB their respective applications on oil price increases (docketed as ERB Case Nos. The ERB admitted the respective supplemental/amended petitions on November 6. 88291 June 8. It will be noted that.02. 1990. G. most of them source their raw materials from the block market. 17. 56736) praying that Sections 126. On August 17. Felicidad L. Marco is the President of the Guild. 71. it was subjected to 50% percentage tax.R. Hdg. et al. and that while manufacturers can avail of tax exemption and/or tax credits from the (manufacturing) excise tax. or underground. the rate of import duty in 1988 was 10% to 50% when the petition was filed in the court a quo. No. 17. the lower court stated: The Court finds that indeed government taxation policy trats(sic) hewelry(sic) as non-essential luxury item and therefore. our lawmakers may see the wisdom of allowing presidential review of the decisions of the ERB since. Pasig City.J. Mercelles... such as the ERB which in matters of rate or price fixing is considered as exercising a quasi-legislative. 1988. the owner of the establishment. and informed the establishment that they were going to make an inventory of the articles involved to see if the proper taxes thereon have been paid. virtually adopting verbatim the reasons presented by the private respondents in their position paper. 95203). On October 17. 1990 at the same time requiring applicants to publish the corresponding Notices of Public Hearing in two newspapers of general circulation.R. Nos. 1993 Topic: Power to Tax Cannot be Delegated Facts: . Viray (docketed as Civil Case No. filed with the Regional Trial Court. jewelry is subject to a 20% excise tax in addition to a 10% value-added tax under the old law. To afford registered oppositors the opportunity to cross-examine the witnesses. Viray. the highest in the Asia-Pacific region. a petition for declaratory relief with writ of preliminary injunction and/or temporary restraining order against herein petitioners and Revenue Regional Director Felicidad L. 71. 4-A of the Bureau of Internal Revenue. Hans Brumann. Inc. Inc. 1988. the ERB set the continuation of the hearing to October 24. the Court finds the questioned statutory provisions confiscatory and destructive of the proprietary right of the petitioners to engage in business in violation of Section 1. seeking to nullify the provisional increase. Malaysia and Singapore. acting for and in behalf of the Commissioner of Internal Revenue. to conduct surveillance. No. Nos. private respondents Antonio M. It was even subjected to a 70% percentage tax under then Section 184(a) of the Tax Code. 470.01. for "stocktaking investigation for excise tax purposes for the period January 1. as follows: No person shall be deprived of the life. taxed heavily. or pointed out earlier. as amended by P.. 95203-05.03. function As such administrative agency. led by Eliseo Corcega. Issue: Whether or not there was a denial of due process in the hearings conducted by the ERB on the second provisional increase in oil prices. Article III of the Constitution which states. 71. In contrast. despite its being a quasi-judicial body. never filed a protest with the BIR on the preventive embargo of the articles. Private respondent Antonio M. 1990. and 71. dated July 20. 470. 1988. On August 5. 71. He points out that this relaxed procedure resulted in the denial of due process. Chapter 71 of the Tariff and Customs Code. Nos. 1991 Topic: Power to Tax Cannot be Delegated Facts: Upon the outbreak of the Persian Gulf conflict on August 2. while under the present law. Worthy of note is the fact that indeed no evidence was adduced by respondents to disprove the foregoing allegations of fact. on written notice of petitioner Maceda. BIR officer Eliseo Corcega submitted to his superiors a report of the inventory conducted and a computation of the value-added tax and ad valorem tax on the articles for evaluation and disposition. then Regional Director.01. 1990. imposes import duty on natural or cultured pearls and precious or semi-precious stones at the rate of 3% to 10% to be applied in stages from 1991 to 1994 and 30% in 1995. Inc. Letter of Authority No. 71.03 and 71. . 1990. Mr.04. Diagem Trading Corporation. reaffirming ERB's authority to grant provisional increase even without prior hearing. Because of the prohibitive cast (sic) of taxation. the BIR officers proceeded to the establishment of Hans Brumann. No. 95203-05.Facts: Of grave concern to this Court is the judicial pronouncement of the court a quo that certain provisions of the Tariff & Customs Code and the National Internal Revenue Code are unconstitutional. Inc." except that there is no law at present authorizing the same. We have stated that this "is a question best judged by the political leadership" (G. 1956. liberty. 69. 109-88 to BIR officers.. Thailand. the three oil companies filed their respective motions for leave to file or admit amended/supplemental applications to further increase the prices of petroleum products. The duration of the mission was from August 8 to August 20.02. Solid Gold International Traders. 127(a) and (b) and 150(a) of the National Internal Revenue Code and Hdg. supra) this Court has already ruled that "the Board Order authorizing the proceeds generated by the increase to be deposited to the OPSF is not an act of taxation but is authorized by Presidential Decree No. 95119-21. Inc. the ERB set the applications for hearing with due notice to all interested parties on October 16. and it is up to petitioners to demonstrate that the present economic picture does not warrant a permanent increase.04. imported gemstones and other precious metals are duty free in Hongkong.. in addressing the third issue. Metro Manila. Inc. not quasi-judicial.02. and private respondent Jewelry by Marco & Co. served the Mission Order. No. pursuant to the aforementioned Mission Order. it is still "an administrative body under the Office of the President whose decisions should be appealed to the President under the established principle of exhaustion of administrative remedies. Inc. is an association of Filipino jewelers engaged in the manufacture of jewelries (sic) and allied undertakings.. respectively). We wish to reiterate Our previous pronouncements therein that while the government is able to justify a provisional increase. monitoring.04 of the Tariff and Customs Code are unconstitutional. Section 104. it is not bound by the strict or technical rules of evidence governing court proceedings. 17. Maceda v... and inventory of all imported articles of Hans Brumann. Nos. Chapter 71 of the Tariff and Customs Code of the Philippines be declared unconstitutional and void. On November 29. Petitioner Maceda filed a petition for Prohibition on September 26. Held: The public respondent..O. Petitioner Maceda failed to appear at said hearing as well as on the second hearing on October 17. National Capital Judicial Region. Given these constraints. MACEDA v. 96266 July 18. Among its members are Hans Brumann. Hdg. Region No. 206-207). On September 21. Such a relaxed procedure is especially true in administrative bodies. as amended by Executive Order No." especially on a matter as transcendental as oil price increases which affect the lives of almost an Filipinos. BASCO v. which states: In any case. 1177 was issued. 1961. for the first time.00 each." We cannot restrain the BIR from refunding said amount because of Our ruling that NPC has both direct and indirect tax exemption privileges. 1976. On June 18. The Philippine Amusements and Gaming Corporation (PAGCOR) was created by virtue of P. 1869 was enacted pursuant to the policy of the government to "regulate and centralize thru an appropriate institution all games of chance authorized by existing franchise or permitted by law" (1st whereas clause. the payment of any and all NPC loans. Section 1 (Social Justice) of Article XIII and Section 2 (Educational Values) of Article XIV of the 1987 Constitution.A. It was expressly stated that: Any such loan or loans shall be exempt from taxes. On July 11. Ericta. it consists of (1) an imposition or restraint upon liberty or property. But the prohibition of gambling does not mean that the Government cannot regulate it in the exercise of its police power. 120 was enacted creating the National Power Corporation.00 ceiling in R.00 was appropriated out of the funds in the Philippine Treasury for the purpose of organizing the NPC and conducting its preliminary work. . No. 91649 May 14. 1931 and Executive Order No. the National Power Corporation shall be exempt from all taxes.A. and is violative of the equal protection clause and local autonomy as well as for running counter to the state policies enunciated in Sections 11 (Personal Dignity and Human Rights). as primary obligor. As the Court sees it. The tax provision related to the repayment of these loans was not amended or deleted. 93 (S'86): On January 30. . public policy and public order. The date of the Deed of Assignment is June 6.D. 1067-B also dated January 1. public policy and order. 163 SCRA 386). 882 was issued withdrawing the tax exemption of NPC. Nos. Even if We were to assume that payment by NPC for the amount of P410. 882. R. further. On the same date. The pertinent tax laws involved in this controversy are P. and assuming the amounts covered had actually been paid previously by the oil companies to the BIR. R. 1949. No 2641 was enacted converting the NPC from a public corporation into a stock corporation with an authorized capital stock of P100. R. At any rate. As to the pertinent tax exemption provision. was . A chronological review of the NPC laws will show that it has been the lawmaker's intention that the NPC was to be completely tax exempt from all forms of taxes — direct and indirect. Issue: Whether petitioners.000. . 580. No 4897 was enacted. to determine whether or not the other branches of government have kept themselves within the limits of the Constitution and the laws and that they have not abused the discretion given to them. P.D. approved March 24. fees. this is a clear case of a "Mexican standoff. No. Republic Act No. because it is allegedly contrary to morals.D. Commonwealth Act No. Presidential Decree No.000. 1977 "to establish. No. 1960. 35 SCRA 481. No tax provision was incorporated in said Act. most likely due to the economic morass the Government found itself in after the Aquino assassination. 1936.D. duties.000. No." monopolistic and tends toward "crony economy". otherwise known as the Tydings McDuffle Law. . with said capital stock wholly subscribed to by the Government. On June 17. as taxpayers and practicing lawyers (petitioner Basco being also the Chairman of the Committee on Laws of the City Council of Manila). No. that organizations otherwise exempted by law from the payment of such taxes/duties may ask for a subsidy from the General Fund in the exact amount of taxes/duties due: provided. PD 1869).000 shares having a par value of P100. its provinces. The concept of police power is well-established in this jurisdiction. 1991 Topic: Power to Tax Cannot be Delegated Facts: This is an instant petition seeking to annul the Philippine Amusement and Gaming Corporation (PAGCOR) Charter — PD 1869. 1399 was passed on June 2. On June 17. Gambling in all its forms. contributions and restrictions of the Republic of the Philippines.000. even without a suit by NPC. branch. R. NPC's capital stock was increased again to P300. C. operate and maintain gambling casinos on land or water within the territorial jurisdiction of the Philippines. issued under the authority of this Act shall be exempt from the payment of all taxes by the Commonwealth of the Philippines. 6395 was enacted revising the charter of the NPC.R. 1986. 000. and restrictions of the Republic of the Philippines. to incur other types of indebtedness. 1869. Issue: Whether or not the power to tax can be delegated. No. 3043 was enacted increasing the abovementioned authorized capital stock to P250. can question and seek the annulment of PD 1869. including government-owned or controlled corporations. No. On December 17. The main source of funds for the NPC was the flotation of bonds in the capital markets and these bonds .000. Held: The respondents are questioning the legal personality of petitioners to file the instant petition.A. imposts. 357 was enacted authorizing the President of the Philippines to guarantee. 120. division or political subdivision thereof and subject to the provisions of the Act of Congress. as amended. duties. the tax credit or refund claimed by NPC. E. and in keeping with the Court's duty.A. On November 3. .Just like lightning which does strike the same place twice in some instances. charges. No. the increase to be wholly subscribed by the Government. fees. the law decreed that: All units of government. ." The operation was considered a success for it proved to be a potential source of revenue to fund infrastructure and socio-economic projects.000. Considering however the importance to the public of the case at bar. No. mainly to develop hydraulic power from all water sources in the Philippines. 000. On July 30. customs duties and other taxes and fees are imposed under revenues laws: provided. this matter of indirect tax exemption of the private respondent National Power Corporation (NPC) is brought to this Court a second time.000. P. 12 (Family) and 13 (Role of Youth) of Article II.A. its provinces. It has been defined as the "state authority to enact legislation that may interfere with personal liberty or property in order to promote the general welfare. is generally prohibited. regulating and centralizing gambling operations in one corporate entity — the PAGCOR. as amended. 1067-A dated January 1." (Edu v. at this point in time. No tax exemption was incorporated in said Act. .A. 1177 has already expressly repealed the grant of tax privileges to any government-owned or controlled corporation and all other units of government. . Inc.00 with the increase to be wholly subscribed by the Government. It is clear that more than two (2) years had already elapsed from said date. On June 4.D. As was subsequently proved. 000. 1177. assuming that NPC's claim had been made seasonably. R. 1934.000. under the 1987 Constitution. unless allowed by law.A. No. absolutely and unconditionally. aside from indebtedness incurred by flotation of bonds. 1931 was issued to reiterate that: WHEREAS. .D. a public corporation. the law stated as follows: To facilitate payment of its indebtedness. No.D.000.D. (2) in order to foster the common good.O.D. 1986. cities and municipalities. PHILIPPINE AMUSEMENTS AND GAMING CORPORATION (PAGCOR) G. It is not capable of an exact definition but has been. imposts. On September 10.00 had been made on said date. that a procedure shall be established by the Secretary of Finance and the Commissioner of the Budget. What was the reason behind the enactment of P. 1958." Its operation was originally conducted in the well-known floating casino "Philippine Tourist. 1967. 1977. shall pay income taxes. We should note that there is no legal obstacle to the BIR granting. NPC can no longer file any suit to collect said amount even if it has previously filed a claim with the BIR because it is time-barred under Section 230 of the National Internal Revenue Code of 1977. whereby such subsidies shall automatically be considered as both revenue and expenditure of the General Fund. 2055 was enacted increasing the total amount of foreign loans NPC was authorized to incur to US$100. 000.00 divided into 1. cities and municipalities. Held: Only the Legislature has the power to grant tax exemptions. no such suit or proceeding shall be begun after the expiration of two years from the date of payment of the tax or penalty REGARDLESS of any supervening cause that may arise after payment. the Court has brushed aside technicalities of procedure and has taken cognizance of this petition. 1978 for PAGCOR to fully attain this objective. Petitioners are questioning the validity of P. 358 was enacted expressly authorizing the NPC. 1977 and was granted a franchise under P. R.00 from the US$50. 1984.D. v. 93 (S'86) was issued with a view to correct presidential restoration or grant of tax exemption to other government and private entities without benefit of review by the Fiscal Incentives Review Board. Drilon. P. purposely.A. 357. 1869? P. No tax provision was incorporated in said Act. At the same time. charges. P. They allege that the same is "null and void" for being "contrary to morals. veiled in general terms to underscore its all-comprehensive embrace. The sum of P250. 487) As defined. He was also authorized to contract on behalf of the NPC with the International Bank for Reconstruction and Development (IBRD) for NPC loans for the accomplishment of NPC's corporate objectives and for the reconstruction and development of the economy of the country.00. Neither can We order the BIR to refund said amount to NPC as there is no pending petition for review on certiorari of a suit for its collection before Us. 1971. (Philippine Association of Service Exporters. or by any authority. On June 13. thus. which facts shall be stated upon the face of said bonds. a public corporation. No. work. contributions and restrictions of the Republic of the Philippines.000. imposts. physical health. No tax provision was incorporated in said Act. When the asserted harm is a "generalized grievance" shared in substantially equal measure by all or a large class of citizens. approved March 24. In the absence of express grant of power to enact. Public welfare. Article VIII of the 1973 Constitution does not apply to the Interim Batasan Pambansa. R. lies at the bottom of the enactment of PD 1896. On June 13. as amended. No. direct injury as a result of its enforcement. 88291 June 8. No. would adversely affect only the generalized interest of all citizens. to incur other types of indebtedness.000. The main source of funds for the NPC was the flotation of bonds in the capital markets and these bonds . 3043 was enacted increasing the abovementioned authorized capital stock to P250. . He was also authorized to contract on behalf of the NPC with the International Bank for Reconstruction and Development (IBRD) for NPC loans for the accomplishment of NPC's corporate objectives and for the reconstruction and development of the economy of the country. Petitioners' standing to sue may not be predicated upon an interest of the kind alleged here. 358 was enacted expressly authorizing the NPC. It is a reliable source of much needed revenue for the cash strapped Government. With the creation of PAGCOR and the direct intervention of the Government. substantially.R. On September 10. PD 1869. . . . as primary obligor. The tax provision related to the repayment of these loans was not amended or deleted. On June 4. charges. Metro Manila.beneficial not just to the Government but to society in general. . its provinces. mental control.. but certainly not necessarily the cause. standing alone. as will be shown. On June 17. it can also provide for exemptions or even take back the power. opposes the petition alleging. that they have filed the instant petition on their own and in behalf of all other Filipinos since the subject matters are of profound and general interest. which may include a legislative enactment or statute. 1934. and therefore.000. drink.A.000. represented by counsel. being a mere Municipal corporation has no inherent right to impose taxes. In the case before Us. On June 17. No. the alleged inaction of the COMELEC to call a special election to fill-up the existing vacancies in the Batasan Pambansa. On the same date. petitioners have not demonstrated any permissible personal stake. MACARAIG G. the increase to be wholly subscribed by the Government. and even sex. 000. (e) The power of local government to "impose taxes and fees" is always subject to "limitations" which Congress may provide by law. MACEDA v. that the exemption clause in P. as is allegedly its ministerial duty under the constitutional provision above cited. 357 was enacted authorizing the President of the Philippines to guarantee. . COMMISSIONER 120 SCRA 337 Topic: Who May Question the Validity of a Tax Measure or Expenditure of Taxes? – ―Taxpayer Suit‖ – Facts: Petitioner Lozada claims that he is a taxpayer and a bonafide elector of Cebu City and a transient voter of Quezon City. for the first time. No. Their contention stated hereinabove is without merit for the following reasons: (a) The City of Manila. cities and municipalities. 1949. otherwise known as the Tydings McDuffle Law.00. the mere fact that some persons may have lost their material fortunes. involves no expenditure of public funds. No. However. (b) The Charter of the City of Manila is subject to control by Congress. and this is precisely so when the gambling resorted to is excessive. Petitioners contend that P. neither have petitioners the requisite interest or personality to qualify them to maintain and prosecute the present petition.A. regulation. No 2641 was enacted converting the NPC from a public corporation into a stock corporation with an authorized capital stock of P100.A.A. As to the pertinent tax exemption provision. 000. has no authority either in the Constitution or a statute. 120. (c) The City of Manila's power to impose license fees on gambling. As gambling is usually an offense against the State.A. R. R. And if Congress can grant the City of Manila the power to tax certain matters. No. or by any authority. No 4897 was enacted. 357.000. charges. No tax exemption was incorporated in said Act. Igot alleges that. absolutely and unconditionally. 1936. 1958. R. the evil practices and corruptions that go with gambling will be minimized if not totally eradicated. duties. 1960. exercise. The unchallenged rule is that the person who impugns the validity of a statute must have a personal and substantial interest in the case such that he has sustained. Issue: Whether or not the petitioner is a proper party to question validity of the tax exemption of the private respondent National Power Corporation LOZADA v. (d) Local governments have no power to tax instrumentalities of the National Government.D. that harm alone normally does not warrant exercise of jurisdiction. On November 3. this matter of indirect tax exemption of the private respondent National Power Corporation (NPC) is brought to this Court a second time. 1869 constitutes a waiver of the right of the City of Manila to impose taxes and legal fees. All of its shares of stocks are owned by the National Government. imposts. PD 1869).A. has long been revoked. then. petitioners allege that they are ". which is held in common by all members of the public because of the necessarily abstract nature of the injury supposedly shared by all citizens. . Petitioner Lozada does not only fail to inform the Court of the region he wants to be a candidate but makes indiscriminate demand that special election be called throughout the country. issued under the authority of this Act shall be exempt from the payment of all taxes by the Commonwealth of the Philippines. The act complained of is the inaction of the COMELEC to call a special election.A. PAGCOR is a government owned or controlled corporation with an original charter. 6395 was enacted revising the charter of the NPC. 771 and was vested exclusively on the National Government. Issue: Whether or not petitioners lack standing to file the instant petition for they are not the proper parties to institute the action. 000. and spiritual outlook on life. Concrete injury. C. It is only when an act complained of. Held: As taxpayers. 000. aside from indebtedness incurred by flotation of bonds. fees. As early as 1975.D. No. On June 18. division or political subdivision thereof and subject to the provisions of the Act of Congress. its provinces.00 each. taxing or otherwise dealing with gambling is a State concern and hence. For the same consequences could have been preceded by an overdose of food. as a taxpayer.000. while petitioner Romeo B. petitioners may not file the instant petition. and 3) Section 5(2). The sum of P250. 120 was enacted creating the National Power Corporation. which facts shall be stated upon the face of said bonds. R.00 divided into 1. it is the sole prerogative of the State to retain it or delegate it to local governments. We wish to state that gambling is generally immoral.000 shares having a par value of P100. 1971.. he has standing to petition by mandamus the calling of a special election as mandated by the 1973 Constitution. duties. 1967. is that indispensable element of a dispute which serves in part to cast it in a form traditionally capable of judicial resolution.000. ordinance provisions on this subject which are inconsistent with the state laws are void. " The respondent COMELEC. that 1) petitioners lack standing to file the instant petition for they are not the proper parties to institute the action. deeply concerned about their duties as citizens and desirous to uphold the constitutional mandate and rule of law . No tax provision was incorporated in said Act. legislative grant or express charter power is generally necessary to empower the local corporation to deal with the subject. As adverted to earlier. What is settled is that the matter of regulating. the law stated as follows: To facilitate payment of its indebtedness. or will sustain. the National Power Corporation shall be exempt from all taxes. What the case at bar seeks is one that entails expenditure of public funds which may be illegal because it would be spent for a purpose that of calling a special election which.. . R. NPC's capital stock was increased again to P300.00 ceiling in R. .000. who desires to run for the position in the Batasan Pambansa. Gambling may have been the antecedent. It was expressly stated that: Any such loan or loans shall be exempt from taxes. As voters. and restrictions of the Republic of the Philippines. whether actual or threatened.. the payment of any and all NPC loans. licenses or permits" was withdrawn by P. branch. 1869 is violative of the principle of local autonomy. As reason for their petition. This excessiveness necessarily depends not only on the financial resources of the gambler and his family but also on his mental.. Republic Act No. Parenthetically. social. cities and municipalities.A. supervision and control of the Government" (4th Whereas Clause. fees.D. with said capital stock wholly subscribed to by the Government. the power of local governments to regulate gambling thru the grant of "franchise. 1961. 1993 Topic: Who May Question the Validity of a Tax Measure or Expenditure of Taxes? – ―Taxpayer Suit‖ – Facts: Just like lightning which does strike the same place twice in some instances.00 was appropriated out of the funds in the Philippine Treasury for the purpose of organizing the NPC and conducting its preliminary work. 2055 was enacted increasing the total amount of foreign loans NPC was authorized to incur to US$100.00 with the increase to be wholly subscribed by the Government. 2) this Court has no jurisdiction to entertain this petition. involves the illegal expenditure of public money that the so-called taxpayer suit may be allowed. mainly to develop hydraulic power from all water sources in the Philippines. .00 from the US$50. for petitioner Lozada‘s interest as an alleged candidate and as a voter are not sufficient to confer standing. for nowhere therein is it alleged that tax money is being illegally spent. Commonwealth Act No. It provided funds for social impact projects and subjected gambling to "close scrutiny. or even their lives does not necessarily mean that the same are directly attributable to gambling. but rather. Having a key determinative bearing on this case is the Rome Statute establishing the International Criminal Court (ICC) with " the power to exercise its jurisdiction over persons for the most serious crimes of international concern x x x and shall be complementary to the national criminal jurisdictions. in his capacity as a citizen and taxpayer. No. 881 (otherwise knows as the ―Omnibus Election Code‖) requiring radio and television stations to give free air time to the Commission on Elections during the campaign period.As of the filing of the instant petition. 2000 Topic: Who May Question the Validity of a Tax Measure or Expenditure of Taxes? – ―Taxpayer Suit‖ – Facts: In this petition for prohibition and mandamus filed on December 9. only the legislature can create by way of a law. he must establish that he has a ―personal and substantial interest in the case and that he has sustained or will sustain direct injury as a result of its enforcement. Nos. which can claim any ―injury‖ in this case since. No.‖ Petitioner disputes the constitutionality of the PCCR on two grounds. through Charge d‘Affaires Enrique A. This was our ruling in a recent case wherein petitioners Telecommunications and Broadcast Attorneys of the Philippines (TELEBAP) and GMA Network. a hearing was held on July 9. GONZALES v. he contends that it is a public office which 2. Secondly. we are now ruling on the merits of the arguments raised by movants. declared "NULL AND VOID for being contrary to law and the Constitution. Respondent Alberto Romulo was impleaded in his capacity as then Executive Secretary. The Agreement pertinently provides as follows: 1. injury. war crimes. In the case at bar. acceptance or approval" by the signatory states.O. according to petitioner. No. Petitioner has sustained no direct. was the Secretary of Foreign Affairs during the period material to this case.R. 159618 February 1. the movants are now legally barred from seeking leave to participate in this proceeding. In legal terms. and the injury is likely to be redressed by a favorable action. A citizen acquires standing only if he can establish that he has suffered some actual or threatened injury as a result of the allegedly illegal conduct of the government. PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT (PCGG) G. is "subject to ratification. In the process." As such. No. not petitioner. 2000. they claim that their interests are affected by the petition. The Court held that petitioner TELEBAP did not have any interest as a taxpayer since the assailed law did not involve the taxing or spending power of Congress. not just to movants. 1999 Topic: Who May Question the Validity of a Tax Measure or Expenditure of Taxes? – ―Taxpayer Suit‖ – Facts: Movants Ma. by its terms. In any event. there is no need to call on each and every party whom said agency has contracted with.O. 43) in order ―to study and recommend proposed amendments and/or revisions to the 1987 Constitution. 43 and 70. Being contractors to the General and Supplemental Agreements involving their supposed properties. parties to the instant case. Being so. 1999. Chavez sought to enforce a constitutional right against the Presidential Commission on Good Government (PCGG) and to determine whether the latter has been acting within the bounds of its authority. Marcos II and Irene Marcos-Araneta have a legal interest in the matter in litigation. We have decided to take a second look at the issues. and the period for doing so has long lapsed. Inc. it must be stressed that the Court retains the power to decide whether or not it will entertain a taxpayer‘s suit. No. or even any indirect. However. advisers and assistants. "persons" are current or former Government officials. and the manner of implementing the same. The Preparatory Commission on Constitutional Reform (PCCR) was created by President Estrada on November 26. Petitioner Bayan Muna is a duly registered party-list group established to represent the marginalized sectors of society.Held: Petitioner Ernesto Maceda asks this Court to reconsider said Decision regarding matter of indirect tax exemption of the private respondent National Power Corporation (NPC). The void agreement will not be rendered operative by the parties' alleges performance (partial or full) of their respective prestations. or military personnel or nationals of one Party." They add that their exclusion from the instant case resulted in a denial of their constitutional rights to due process and to equal protection of the laws. Movants claim that their exclusion from the proceeding regarding the Agreements to which they were parties and signatories was a denial of "their property right to contract without due process of law. no argument of the contractors will make such illegal and unconstitutional stipulations pass the test of validity." The serious crimes adverted to cover those considered grave under international law. petitioner has failed to establish his locus standi so as to enable him to seek judicial redress as a citizen. nor that he shall be subjected to any penalties or burdens as a result of the PCCR‘s activities. Manalo. and crimes of aggression. the RP. 2011 Topic: Who May Question the Validity of a Tax Measure or Expenditure of Taxes? – ―Taxpayer Suit‖ – Facts: This petition for certiorari. only 92 out of the 139 signatory countries appear to have completed the ratification. petitioner has not shown that he has sustained or is in danger of sustaining any personal injury attributable to the creation of the PCCR. Marcos II and Irene Marcos-Araneta allege that they are parties and signatories to the General and Supplemental Agreements dated December 28. August 14. . 1998. Issue: Whether or not Movants Ma. Ople." We rule that the movants are merely incidental. now deceased. as exhaustively discussed in the assailed Decision. which this Court. Indeed. petitioner asserts that by creating such a body the President is intervening in a process from which he is totally excluded by the Constitution – the amendment of the fundamental charter Issue: Whether a party has alleged such a personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court so largely depends for illumination of difficult constitutional questions. In the final analysis. or in the success of either of the parties or an interest against both as to warrant their intervention. 2003. Thus payer‘s action is properly brought only when there is an exercise by Congress of its taxing or spending power. assails the constitutionality of the creation of the Preparatory Commission on Constitutional Reform (PCCR) and of the positions of presidential consultants. BAYAN MUNA V. Clearly. such as genocide. On December 28. signed the Rome Statute which. Lest We be criticized for denying due process to the petitioner. Imelda Marcos-Manotoc. They also raise the "principle of hierarchical administration of justice" to impugn the Court's cognizance of petitioner's direct action before it. 140835. 1992 where all parties presented their respective arguments. Held: In assailing the constitutionality of E. Persons of one Party present in the territory of the other shall not.‖ CHAVEZ v. Respondent Blas F. Etched in this Court's mind are the paradoxical claims by both petitioner and private respondents that their respective positions are for the benefit of the Filipino people. 0470 to the Department of Foreign Affairs (DFA) proposing the terms of the non-surrender bilateral agreement between the USA and the RP. the injury is fairly traceable to the challenged action. it is only Congress. Ricciardone sent US Embassy Note No. crimes against humanity. Imelda Marcos-Manotoc. petitioner Ramon A. the original parties have not filed any motion for reconsideration. there being no exercise by Congress of its taxing or spending power. hence. EXECUTIVE SECRETARY G. If at all. the movants have really no interest to protect or right to assert in this proceeding. the President has encroached upon the legislature‘s powers to create a public office and to propose amendments to the Charter by forming the PCCR.R. absent the express consent of the first Party. Gonzales. petitioner cannot be allowed to question the creation of the PCCR in his capacity as a taxpayer. not indispensable. On May 9. approval and concurrence process. The Philippines is not among the 92.P. 1998 by virtue of Executive Order No. in its Decision promulgated on December 9. they claim to "have a legal interest in the matter in litigation. Ferdinand R. Held: The assailed Decision has become final and executory. Coming now to the instant case. Such terms and conditions cannot be granted by the PCGG to anyone. First. A taxpayer is deemed to have the standing to raise a constitutional issue when it is established that public funds have been disbursed in alleged contravention of the law or the Constitution. employees (including contractors). Contrary to their allegations. no infraction upon their rights has been committed. The original petition of Francisco I. Neither does he claim that his rights or privileges have been or are in danger of being violated. petitioner asserts his interest as a citizen and taxpayer. A contract that violates the Constitution and the law is null and void ab intio and vests no rights and creates no obligations. 130716 May 19. mandamus and prohibition under Rule 65 assails and seeks to nullify the Non-Surrender Agreement concluded by and between the Republic of the Philippines (RP) and the United States of America (USA). 43 (E. then Ambassador Francis J. It produces no legal effect at all. 1993. In the process of adjudication. NARVASA G. For purposes of this Agreement. questioned the validity of section 92 of B. they can no longer complain of not having been heard in this proceeding. the Agreements undeniably contain terms an condition that are clearly contrary to the Constitution and the laws and are not subject to compromise. R. Ferdinand R. As citizens. When the [GRP] extradites. Jr. i. Santiago M. their assertions questioning the Agreement are made of a public right. while eight members of the Court have voted in the negative – five justices (Chief Justice Hilario G. Leonardo A. being in the nature of an executive agreement. When suing as a citizen. Jr. the primordial importance to Filipino citizens in general of the issue at hand impels the Court to brush aside the procedural barrier posed by the traditional requirement of locus standi. and obligations bearing on the State‘s obligation to the community of nations. Jose A. Mendoza. or b. before the effective date of termination. Puno. concerned citizens. Del Mar. digress from or abandon its sacred duty and authority to uphold the Constitution in matters that involve grave abuse of discretion brought before it in appropriate cases.. and not merely that he suffers thereby in some indefinite way. Gonzaga-Reyes) have voted in the negative and ten members of the Court (Justices Josue N. Quisumbing. maintain and/or manage the game of jai-alai. No. Sandoval 11 and Michael T. or any allegation arising. it becomes not only the right but in fact the duty of the judiciary to settle it. Belle Jai-Alai Corporation (BELLE) and Filipinas Gaming Entertainment Totalizator Corporation (FILGAME) from operating. the [US] will not agree to the surrender or transfer of that person by the third country to any international tribunal. Consuelo Ynares-Santiago. maintain. R. be surrendered or transferred by any means to any international tribunal for any purpose. At any event. and/or management of jai-alai games by PAGCOR in association with its co-respondents Belle Jai-Alai Corporation and/or Filipinas Gaming Entertainment Totalizator Corporation and (ii) held to be without force and effect the agreement of 17 June 1999 among said respondents. and Justices Reynato S. "The Court may relax the standing requirements and allow a suit to prosper even where there is no direct injury to the party claiming the right of judicial review. PAGCOR G. Bernardo P. and Justices Reynato S. "that it will not shirk. respondents assert the constitutionality of the Agreement. Puno. 143540 April 11.3.. practices. we wrote again in Bayan v. The provisions of this Agreement shall continue to apply with respect to any act occurring. Consuelo Ynares-Santiago. absent the express consent of the Government of the Republic of the Philippines [GRP]. Mendoza. For their part. Vitug. the mere fact that he is a citizen satisfies the requirement of personal interest. and Minerva P. be surrendered or transferred by any means to any other entity or third country. R. CARREON G.. Panganiban. maintenance.e. Pardo. Indeed. and Arturo B. When suing as a citizen to question the validity of a law or other government action. Cited in this regard is what is usually referred to as the emergency powers cases. or manage jai-alai. maintaining or managing jai-alai games and from enforcing the 17th June 1999 Agreement entered into among said respondents for that purpose. Pardo. 2001 Topic: Who May Question the Validity of a Tax Measure or Expenditure of Taxes? – ―Taxpayer Suit‖ – Facts: In it's decision. maintain or manage jai-alai games in association with Belle and Filgame according to their assailed agreement? Held: On the issue of whether PAGCOR itself has a valid franchise to conduct jaialai games. WHEREFORE. Gonzaga-Reyes) have voted in the negative on the thesis that PAGCOR has no franchise to operate. a. De Leon. Jose C. or manage jai-alai games. and Minerva P. He must be able to show. unless such tribunal has been established by the UN Security Council. appointed the above-named respondents to various positions in the city government. Zamora."Specifically. to ascertain that the Agreement did not go against established national policies. five members of the Court (Chief Justice Hilario G. dated 29 November 2000. not only that the law or any government act is invalid. in some cases. (i) enjoined the continued operation. the interest of the petitioner assailing the constitutionality of a statute must be direct and personal. both for the Republic and the citizenry as a whole. petitioner imputes grave abuse of discretion to respondents in concluding and ratifying the Agreement and prays that it be struck down as unconstitutional. Buena) have voted in the negative on the ground that only PAGCOR by itself. Melo. when the proceeding involves the assertion of a public right. or otherwise transfers a person of the [USA] to a third country. bearing in mind what the Court said in Tañada v. the [GRP] will not agree to the surrender or transfer of that person by the third country to any international tribunal. It must appear that the person complaining has been or is about to be denied some right or privilege to which he is lawfully entitled or that he is about to be subjected to some burdens or penalties by reason of the statute or act complained of. however. In the case at bar. for the purpose of surrender to or transfer to any international tribunal. a petitioner needs to meet certain specific requirements before he can be clothed with standing. Vitug. When the [US] extradites. thus: In a long line of cases. instrumentality or department of the government. 5. or expelled to a third country. in a catena of cases. Defensor to enjoin the Philippine Amusement and Gaming Corporation (PAGCOR). Issue: Locus Standi of Petitioner. surrenders. it is "a party‘s personal and substantial interest in a case where he has sustained or will sustain direct injury as a result" of the act being challenged. At the very least. Vitug. and Angelina Sandoval-Gutierrez) have voted in the affirmative. Santiago M. Francisco. No. their interest in the subject matter of the petition is direct and personal. Locus standi is "a right of appearance in a court of justice on a given question. acting on the instant motions for clarification filed by respondents and on the basis of the results of the voting heretofore elucidated. 138298 August 24. Guingona. issues are precisely raised putting to the fore the propriety of the Agreement pending the ratification of the Rome Statute. or otherwise transfers a person of the Philippines to a third country. and three justices (Justices Jose C. agency. only seven members of the Court (Justices Josue N. or at least declared as without force and effect. In cases of transcendental importance. petitioner‘s representatives have complied with the qualifying conditions or specific requirements exacted under the locus standi rule. and Angelina Sandoval-Gutierrez) have voted in the affirmative." Locus standi. not in association with any other person or entity). as we have done in a long line of earlier cases. Buena. As in this petition. or voters who actually sue in the public interest. the Court granted petitions filed by Raoul B. Their appointments were with permanent status and based on the evaluation made by the City Personnel Selection . MIRANDA v..R. v. Federico S. Jose A. Jr. Artemio V. DEL MAR v." Moreover. committed by any officer. Kapunan.this Court has invariably adopted a liberal stance on locus standi. and On the issue of whether PAGCOR can operate. De Leon. contends that the issue of the validity or invalidity of the Agreement carries with it constitutional significance and is of paramount importance that justifies its standing. Going by the petition. Davide. Bellosillo. is merely a matter of procedure and it has been recognized that. since then. Davide. Artemio V. and (b) to DENY the motions insofar as respondents would also seek a reconsideration of the Court's decision of 29 November 2000 that has. Nagmamalasakit na mga Manananggol ng mga Manggagawang Pilipino." The term "interest" refers to material interest. Panganiban. does not require Senate concurrence for its efficacy. but only by itself (i.R. unless such tribunal has been established by the UN Security Council. This Agreement shall remain in force until one year after the date on which one party notifies the other of its intent to terminate the Agreement. Inc. notably in the old but oft-cited emergency powers cases and Kilosbayan v. taxpayers. Issue: Whether PAGCOR itself has a valid franchise to conduct jai-alai games? Whether PAGCOR can operate. unless such tribunal has been established by the UN Security Council. Arturo B. surrenders. can operate. Bellosillo. but also that he sustained or is in imminent danger of sustaining some direct injury as a result of its enforcement. respondents question petitioner‘s standing to maintain a suit and counter that the Agreement. not with any other person or entity. In this proceeding. suits are not brought by parties who have been personally injured by the operation of a law or any other government act. expounded on this requirement." we cannot but resolve head on the issues raised before us. Angara. petitioner‘s representatives pursue the instant suit primarily as concerned citizens raising issues of transcendental importance. Sabino R. Melo. Leonardo A.in which ordinary citizens and taxpayers were accorded the personality to question the constitutionality of executive issuances. Held: Petitioner. taxpayers and legislators when specific requirements have been met have been given standing by this Court.Consequently. Kapunan. operate. Vicente V. Sabino R.. Quisumbing. but by concerned citizens. Vice Mayor Amelita Navarro. the Court resolves (a) to partially GRANT the motions for clarification insofar as it is prayed that Philippine Amusement and Gaming Corporation (PAGCOR) has a valid franchise to. through its three party-list representatives. Vicente V. The rationale for requiring a party who challenges the validity of a law or international agreement to allege such a personal stake in the outcome of the controversy is "to assure the concrete adverseness which sharpens the presentation of issues upon which the court so largely depends for illumination of difficult constitutional questions. however. 4. absent the express consent of the Government of the [US]. Jr. In fine. while serving as Acting Mayor of the City of Santiago because of the suspension of Mayor Jose Miranda. And for reasons detailed in their comment. unless such tribunal has been established by the UN Security Council. Jr. as distinguished from one that is merely incidental. and "calls for more than just a generalized grievance. Bernardo P. maintain or manage jai-alai games in association with Belle and Filgame according to their assailed agreement. Jr. 2003 Topic: Who May Question the Validity of a Tax Measure or Expenditure of Taxes? – ―Taxpayer Suit‖ – Facts: In the early part of 1988. maintain. where an action of any branch of government is seriously alleged to have infringed the Constitution or is done with grave abuse of discretion.e. he is a real party-in-interest and. the CSC issued Resolution No. Clearly. Mayor Navarro filed with the Court of Appeals a "Motion to Withdraw the Motion for Reconsideration" (previously submitted by former Mayor Joel G. or the party entitled to the avails of the suit. hence. ii. b) c) d) The Fund herein created shall be used for the following: 1) To reimburse the oil companies for cost increases in crude oil and imported petroleum products resulting from exchange rate adjustment and/or increase in world market prices of crude oil. 1998. Any increase in the tax collection as a result of the lifting of tax exemptions of government corporations. he considered the composition of the PSPB irregular since the 4 majority party. the audit team submitted to him a report dated June 8. Abaya and the COMELEC. Issue: Locus Standi of the Petitioner Held: Section 17. Rule 3 of the same Rules provides: "Section 2. 982717. " Joel G. petitioner filed a motion for reconsideration. Unless otherwise authorized by law or these Rules. Reduction in oil company take as directed by the Board of Energy without the corresponding reduction in the landed cost of oil inventories in the possession of the oil companies at the time of the price change. the COMELEC disqualified Mayor Jose Miranda as a mayoralty candidate in the 1998 May elections. it should have been done by their immediate supervisors. In fact. the action may be continued and maintained by his successor. were victims of political bickering. Meanwhile." Even as a taxpayer. 2000. he has a legal interest in the case at bar. The Oil Price Stabilization Fund may be sourced from any of the following: a) Any increase in the tax collection from ad valorem tax or customs duty imposed on petroleum products subject to tax under this Decree arising from exchange rate adjustment. . No. On June 11. 7160. To reimburse the oil companies for possible cost under-recovery incurred as a result of the reduction of domestic prices of petroleum products. 1992 Topic: Inherent Limitations: Purpose Must Be Public in Nature Facts: This is a petition erroneously brought under Rule 44 of the Rules of Court questioning the authority of the Commission on Audit (COA) in disallowing petitioner's claims for reimbursement from the Oil Price Stabilization Fund (OPSF) and seeking the reversal of said Commission's decision denying its claims for recovery of financing charges from the Fund and reimbursement of under recovery arising from sales to the National Power Corporation.A real party in interest is the party who stands to be benefited or injured by the judgment in the suit. 1956. 137." set aside the proclamation of petitioner as Mayor of Santiago City for lack of a certificate of candidacy and declared Vice Mayor Amelita Navarro as City Mayor by operation of law. their dismissal from the service violated their right to due process. Other factors as may be determined by the Ministry of Finance to result in cost under recovery. can lawfully file this petition. They also denied that an evaluation on their performance was conducted. Bayaua. In this petition. CALTEX v. "Cost under recovery" shall include the following: i. Forthwith. was not properly represented. every action must be prosecuted or defended in the name of the real party in interest. COMMISSION ON AUDIT G. he issued an order terminating respondents‘ services effective June 15. On June 5. the same should be dismissed.) No. is in order. unfortunately. His son Joel G." In effect. Death or separation of a party who is a public officer. The magnitude of the under recovery.7 On December 20. She likewise reinstated all the respondents to their respective positions and approved the payment of their salaries. There is hereby created a Trust Account in the books of accounts of the Ministry of Energy to be designated as Oil Price Stabilization Fund (OPSF) for the purpose of minimizing frequent price changes brought about by exchange rate adjustments and/or changes in world market prices of crude oil and imported petroleum products. however. Martinez and Antonio L. 1999. The issues raised revolve around the OPSF created under Section 8 of Presidential Decree (P. not after three (3) months." The issue in this case is whether respondents‘ services were illegally terminated. the Court of Appeals rendered a Decision affirming in toto the CSC Resolution No." On June 10. the CSC Resolution reinstating respondents to their positions stays." Not every action filed by a taxpayer can qualify to 8 challenge the legality of official acts done by the government. Mayor Amelita Navarro. Mayor Navarro. Any resulting peso cost differentials in case the actual peso costs paid by oil companies in the importation of crude oil and petroleum products is less than the peso costs computed using the reference foreign exchange rate as fixed by the Board of Energy. as may be determined by the Minister of Finance in consultation with the Board of Energy. not being a real party in interest. 1999. Miranda. Besides. within thirty (30) days after the successor takes office or such time as may be granted by the Court. But assuming there was indeed such an evaluation. 1999. it does not involve the illegal disbursement of public funds. to conduct a personnel evaluation audit of those who were previously screened by the PSPB and those on probation. has no legal personality to file this petition. but before it could be resolved by the Court of Appeals. herein petitioner. 17. if there is substantial need to do so. 1998 because they "performed poorly" during the probationary period. petitioner Joel G.D. petitioner‘s action cannot be considered a taxpayer‘s suit. Petitioner insists though that as a taxpayer. therefore. Rule 3 of the 1997 Rules of Civil Procedure. On May 21. contending that being employees on 5 probation. if any. Miranda). 3 When Mayor Jose Miranda reassumed his post on March 5. 136351. or three months after Mayor Miranda reassumed his post. No. 92585 May 8. 8 . Respondents claim that since petitioner ceased to be Mayor of Santiago City. 982717 (in favor of respondents) but it was denied in the CSC Resolution No.and Promotion Board (PSPB) created pursuant to Republic Act No. Reduction in internal ad valorem taxes as a result of foregoing government mandated price reductions. as may be determined by the Minister of Finance in consultation with the Board of Energy.R. Antonio AL. petitioner does not stand "to be benefited or injured by the judgment of the suit. found no substantial need to continue and maintain the action of her predecessor in light of the CSC Resolution declaring that respondents‘ services were illegally terminated by former Mayor Jose Miranda. Respondents appealed to the CSC. Section 2. Miranda vs. resigns or otherwise ceases to hold office. Any additional amount to be imposed on petroleum products to augment the resources of the Fund through an appropriate Order that may be issued by the Board of Energy requiring payment by persons or companies engaged in the business of importing. he has no legal personality to file the instant petition and. Miranda contends that the Court of Appeals erred in affirming the CSC Resolution declaring that the termination of respondents‘ services is illegal and ordering their reinstatement to their former positions with payment of backwages. It bears stressing that "a taxpayer‘s suit refers to a case where the act complained of directly involves the illegal disbursement of public funds from taxation. As amended. shall be determined by the Ministry of Finance. 990557 dated March 3. should continue and maintain this suit. manufacturing and/or marketing petroleum products. substituted for him and was proclaimed Mayor of Santiago City. Even assuming he is a real party in interest. He then formed a three-man special performance audit team composed of Roberto C. as amended. Such contention is misplaced. hence. she filed with the Court of Appeals a"Motion to Withdraw the Motion for Reconsideration" (lodged by petitioner). said Section 8 reads as follows: Sec. to which he belongs. Petitioner then filed with the Court of Appeals a petition for review on certiorari. Santos. the Court of Appeals granted Mayor Navarro‘s "Motion to Withdraw the Motion for Reconsideration. they can be dismissed from the service on the ground of poor performance only after their probationary period of six months. 1998 stating that the respondents were found "wanting in (their) performance." It is clear from the above Rule that when petitioner ceased to be mayor of Santiago City. therefore.) No. On October 19. 1998. The reinstatement of respondents who. 1998 after his suspension. the action may be continued and maintained by or against his successor if. petitioner contends that as a taxpayer. provides: "Sec. Atlas Consolidated Mining and Development Corporation (ATLAS) and Marcopper Mining Corporation (MAR-COPPER). The Civil Service Commission (CSC) approved the appointments. Antonio M. it is satisfactorily shown by any party that there is substantial need for continuing or maintaining it and the successor adopts or continues or threatens to adopt or continue the action of his predecessor. we hold that petitioner. They insist that they were not actually evaluated on their performance. Parties in interest. iii. Issue: Whether or not OPSF contributions are not for a public purpose. Held: .O. his motion for reconsideration was validly withdrawn by the incumbent Mayor. 2000. preventing it from exercising the right to offset its remittances against its reimbursement vis-avis the OPSF and disallowing its claims which are still pending resolution before the Office of Energy Affairs (OEA) and the Department of Finance (DOF). as amended by Executive Order (E.R. 982717 reversing the order of Mayor Miranda and ordering that respondents be reinstated to their former positions with payment of backwages. 2) The Oil Price Stabilization Fund (OPSF) shall be administered by the Ministry of Energy. In fine. several events supervened. – When a public officer is a party in an action in his official capacity and during its pendency dies. in G. we see no reason to disturb the findings of both the CSC and the Court of Appeals. This Court. the Court of Appeals denied petitioner‘s motion for reconsideration of its Decision. hence. After conducting the evaluation. He then filed a motion for reconsideration of the CSC Resolution No. In his reply. not by those appointed by former Mayor Jose Miranda. the aforementioned feeder roads were "nothing but projected and planned subdivision roads. Held: Tested by the foregoing criteria. or legalizing. . Held: According to said petition. reconstruction. or. . Referring to the P85. was a member of the Senate of the Philippines. Rizal" (according to the tracings attached to the petition as Annexes A and B. The foregoing provision is allied and germane to. It is the essential character of the direct object of the expenditure which must determine its validity as justifying a tax. The tax provision is not inconsistent with. the province shall collect a tax of thirty percent (30%) of the purchase price or rental rate. petitioner's contention that the tax provision of the DECREE is a rider is without merit. The test of the constitutionality of a statute requiring the use of public funds is whether the statute is designed to promote the public interest. lease or disposition of a videogram containing a reproduction of any motion picture or audiovisual program. The rule is set forth in Corpus Juris Secundum in the following language: In accordance with the rule that the taxing power must be exercised for public purposes only. money raised by taxation can be expended only for public purposes and not for the advantage of private individuals. Araneta — Gen. was passed by Congress. except such as rest in the discretion of the authority which exercises it. or on June 20.000. situated at . 1987 Topic: Inherent Limitations: Purpose Must Be Public in Nature Facts: This petition was filed on September 1. among others. Any unregulated increase in oil prices could hurt the lives of a majority of the people and cause economic crisis of untold proportions. Malvar — Gen. That in Metropolitan Manila. thus shifting the tax burden on the buying or the viewing public. and the other fifty percent (50%) shall accrue to the municipality where the tax is collected. the appropriation in question. The levy of the 30% tax is for a public purpose. unless the latter consists of an amendment of the TIO v. The title of the DECREE. L-75697 June 18. The stabilization then of oil prices is of prime concern which the state. is comprehensive enough to include the purposes expressed in its Preamble and reasonably covers all its provisions. which. Capinpin — Gen. respondent Zulueta is the owner of several parcels of residential land situated in Pasig. which. taxes may be levied with a regulatory purpose to provide means for the rehabilitation and stabilization of a threatened industry which is affected with public interest as to be within the police power of the state. The lower court held that under these circumstances. did not cure its aforementioned basic defect. Issue: Whether or not the item of Republic Act No. 1953. It is unnecessary to express all those objectives in the title or that the latter be an index to the body of the DECREE. Inasmuch as the land on which the projected feeder roads were to be constructed belonged then to respondent Zulueta.00 therein made. certain portions of which had been reserved for the projected feeder roads aforementioned. 1954. may properly address. 1and would "greatly enhance or increase the value of the subdivision" of said respondent. within the Antonio Subdivision . and in restraint of trade. the tax shall be shared equally by the City/Municipality and the Metropolitan Manila Commission. removing. 1953.000. with injunction. And while it was also an objective of the DECREE to protect the movie industry. which is the regulation of the video industry through the Videogram Regulatory Board as expressed in its title. repair. would have the effect of relieving respondent Zulueta of the burden of constructing his subdivision streets or roads at his own expenses. Lucban — Gen. confiscatory. to be undertaken with the aforementioned appropriation of P85. as Provincial Governor of Rizal. Roxas — Gen. latter on. when said bill was approved by the President and the disbursement of said sum became effective. which projected feeder roads "do not connect any government property or any important premises to the main highway". . that said appropriation of P85. reconstruction. for every sale.00 therein made. is this: It is a general rule that the legislature is without power to appropriate public revenue for anything but a public purpose. It is a tax that is imposed uniformly on all videogram operators. nor foreign to that general subject and title. extension and improvement of said projected feeder roads. That section reads. Those preambles explain the motives of the lawmaker in presenting the measure. imposed on retailers for every videogram they make available for public viewing. . organic law. near Shaw Boulevard. not a public purpose. This is. Issue: Whether or not the tax provision of the DECREE: Act Creating the Videogram Regulatory Board is constitutional and for public purpose. made. a judicial nullification of said donation need not precede the declaration of unconstitutionality of said appropriation. VIDEOGRAM REGULATORY BOARD G. Segundo — Gen. In imposing a tax. Fifty percent (50%) of the proceeds of the tax collected shall accrue to the province. in general. It is an end-user tax. that the courts scarcely venture to declare that it is subject to any restrictions whatever. 1987 entitled "An Act Creating the Videogram Regulatory Board" with broad powers to regulate and supervise the videogram industry (hereinafter briefly referred to as the BOARD). repair. discourages. extension and improvement of said projected feeder roads is for public purpose. SECRETARY OF PUBLIC WORKS G.000. reconstruction. entitled "An Act Appropriating Funds for Public Works". demands for wage increases and upward spiraling of the cost of basic commodities. Rizal. appropriating P85.00 appropriation for the projected feeder roads in question. subsequently thereto. Pasig. — Notwithstanding any provision of law to the contrary." As regards the legal feasibility of appropriating public funds for a public purpose. Incidental to the public or to the state. not yet constructed. No. was illegal and.00 for the "construction. 14. It assails the constitutionality of Presidential Decree No. approved on June 20.000. that the aforementioned Antonio Subdivision (as well as the lands on which said feeder roads were to be construed) were private properties of respondent Jose C. when there is absolutely none. over five (5) months after the approval and effectivity of said Act. 1960 Topic: Inherent Limitations: Purpose Must Be Public in Nature Facts: On August 31. . discussed supra sec. petitioner Wenceslao Pascual. and thus the public welfare. the appropriation in question was "clearly for a private.We find no merit in petitioner's contention that the OPSF contributions are not for a public purpose because they go to a special fund of the government. particularly because of the rampant film piracy. or acts performed. The validity of a statute depends upon the powers of Congress at the time of its passage or approval. and not the magnitude of the interest to be affected nor the degree to which the general advantage of the community. the general object of the DECREE. or even definitely deters the activities taxed. . It is similar to the 30% amusement tax imposed or borne by the movie industry which the theater-owners pay to the government. inter alia: Section 10. and hence. an item (43[h]) of P85. not upon events occurring. admittedly. may be ultimately benefited by their promotion. and known as the Antonio Subdivision. . that. The tax imposed by the DECREE is not only a regulatory but also a revenue measure prompted by the realization that earnings of videogram establishments of around P600 million per annum have not been subjected to tax. at the time of the passage and approval of said Act. . upon the ground that Republic Act No. Tax on Sale.R. 1953. which is the creation of the Videogram Regulatory Board. the flagrant violation of intellectual property rights. at the time of the passage and approval of said Act. the principle according to Ruling Case Law. but which is passed on to the entire cost of the admission ticket. and is reasonably necessary for the accomplishment of. became Republic Act 920. It would have a chain reaction in terms of. repair.R. The express purpose of the DECREE to include taxation of the video industry in order to regulate and rationalize the heretofore uncontrolled distribution of videograms is evident from Preambles 2 and 5. was null and void. as well as when it was approved by the President on June 20. PASCUAL v. as the case may be. "in order to give a semblance of legality. according to the petition. void ab initio". and the proliferation of pornographic video tapes. extension and improvement" of said roads. . The appropriation of P85. The power to impose taxes is one so unlimited in force and so searching in extent. the legality thereof depended upon whether said roads were public or private property when the bill. which results from the promotion of private interest and the prosperity of private enterprises or business. 920. The petition further alleges that the construction of said roads.00. thereby depriving the Government of an additional source of revenue. not far away from the intersection between the latter and Highway 54). it is beyond serious question that a tax does not cease to be valid merely because it regulates. for the construction. that. with retrospective operation. The donation to the Government. does not justify their aid by the use public money. Lim)". was passed by Congress. contained. therefore. although each advantage to individuals might incidentally serve the public. who. for the construction. the result is that said appropriation sought a private purpose. Lease or Disposition of Videograms. No. were private property of said respondent when Republic Act No. 1986 by petitioner on his own behalf and purportedly on behalf of other videogram operators adversely affected. 920: The appropriation of P85. to the aforementioned appropriation". Consequently. PROVIDED. . Zulueta. 920. repair. Delgado — Gen. for the purpose of giving a "semblance of legality". the tax remains a valid imposition: . L-10405 December 29. reconstruction. as opposed to the furtherance of the advantage of individuals. in section 1-C (a) thereof. As a tool for regulation it is simply one of the regulatory and control mechanisms scattered throughout the DECREE. the legislature acts upon its constituents. 57 There can be no doubt that the oil industry is greatly imbued with public interest as it vitally affects the general welfare.000.00 "for the construction. a sufficient security against erroneous and oppressive taxation. Taxation is no longer envisioned as a measure merely to raise revenue to support the existence of the government. the constitutional limitation infringed by said statute.000. It was imposed primarily to answer the need for regulating the video industry. extension and improvement" of Pasig feeder road terminals (Gen. However. Petitioner also submits that the thirty percent (30%) tax imposed is harsh and oppressive. instituted this action for declaratory relief.00 was made by Congress because its members were made to believe that the projected feeder roads in question were "public roads and not private streets of a private subdivision"'. via its police power.000. 12 (Family) and 13 (Role of Youth) of Article II. The stabilization fees collected are in the nature of a tax. the power of local governments to regulate gambling thru the grant of "franchise. Araneta. operate and maintain gambling casinos on land or water within the territorial jurisdiction of the Philippines. To rule in petitioners' favor would contravene the general principle that revenues derived from taxes cannot be used for purely private purposes or for the exclusive benefit of private persons. 1977 "to establish. It is but rational that the fees be collected from them since it is also they who are to be benefited from the expenditure of the funds derived from it. or public funds. and it has been repeatedly held that "inequities which result from a singling out of one particular class for taxation or exemption infringe no constitutional limitation"." Respondent Republic Planters Bank (briefly. As early as 1975. Held: The City of Manila. Sec. No. only the National Government has the power to issue "licenses or permits" for the operation of gambling. Its "power to tax" therefore must always yield to a legislative act which is superior having been passed upon by the state itself which has the "inherent power to tax". Araneta).D.D. public policy and order. we find basis for the opinion of the Commission on Audit reading: That the government. even though they are held for a special purpose (Lawrence vs. Once the purpose has been fulfilled or abandoned. to be. The levy is primarily in the exercise of the police power of the State (Lutz vs. 2000 . Article VI. (Johnson vs. stabilization of the domestic market. fringe benefits and allowances of officers and employees of PHILSUCOM" thereby immediately negating the claim that the entire amount levied is in trust for sugar. planters and millers. Article VI. Taxation has been made the implement of the state's police power. Congress can grant the City of Manila the power to tax certain matters. The power of local government to "impose taxes and fees" is always subject to "limitations" which Congress may provide by law.D. All of its shares of stocks are owned by the National Government.The public purpose of a tax may legally exist even if the motive which impelled the legislature to impose the tax was to favor one industry over another. 771 and was vested exclusively on the National Government. 2. Marey. the rate of tax is a matter better addressed to the taxing legislature. 18 on May 28. 1399 was passed on June 2. the balance. CITY OF BUNUAN G. Necessarily. for brevity) under Executive Order No. 128 So. No. who have come to this Court in their individual capacities and in representation of other sugar producers. (2) Held: From the legal standpoint. pursuance of an appropriation made by law (1987) Constitution. PHILIPPINE AMUSEMENTS AND GAMING CORPORATION (PAGCOR) G. if any. "and all its components. American Surety Co. the Bank) is a commercial banking corporation." a "Development and Stabilization Fund. Since PD 1869 remains an "operative" law until "amended. 1991 Topic: Prohibition Against Delegation of Taxing Power/Exceptions. is to be transferred to the general funds of the Government. 1978 for PAGCOR to fully attain this objective." The operation was considered a success for it proved to be a potential source of revenue to fund infrastructure and socio-economic projects." almost Identical to the "Sugar Adjustment and Stabilization Fund" created under Section 6 of Commonwealth Act 567. XVIII. which is within the power of the State to impose for the promotion of the sugar industry ( Lutz vs. Therefore. Sugar Regulatory Administration. No. and whether shares of stock in respondent Bank paid for with said stabilization fees belong to the PHILSUCOM or to the different sugar planters and millers from whom the fees were collected or levied. REPUBLIC PLANTER G.D.. 718). 1988 Topic: Inherent Limitations: Purpose Must Be Public in Nature Facts: Petitioners are sugar producers. its existence as a juridical entity was mandated to continue for three (3) more years "for the purpose of prosecuting and defending suits by or against it and enables it to settle and close its affairs.50 per picul. Respondent Philippine Sugar Commission (PHILSUCOM.R. That stabilization fees are charges/levies on sugar produced and milled which accrued to PHILSUCOM under PD 338. owns and stocks. Sec. No. They allege that the same is "null and void" for being "contrary to morals. 263 Mich 586. Article VIII. Issue: The Solicitor General aptly summarizes the basic issues thus: (1) whether the stabilization fees collected from sugar planters and millers pursuant to Section 7 of P. No. While it is true that the collected stabilization fees were set aside by PHILSUCOM to pay its subscription to RPB. has long been revoked. Section 1 (Social Justice) of Article XIII and Section 2 (Educational Values) of Article XIV of the 1987 Constitution. 388 are funds in trust for them. State ex rel.R." monopolistic and tends toward "crony economy". 1977 and was granted a franchise under P. The tax collected is not in a pure exercise of the taxing power. The Philippine Amusements and Gaming Corporation (PAGCOR) was created by virtue of P. cited in Lutz vs. At bottom. That the fees were collected from sugar producers. P. January 20.R. Delegation to Local Governments Facts: This is an instant petition seeking to annul the Philippine Amusement and Gaming Corporation (PAGCOR) Charter — PD 1869. The City of Manila's power to impose license fees on gambling.D. as amended. Jur. 91649 May 14. licenses or permits" was withdrawn by P.D. 1067-A dated January 1. 1067-B also dated January 1. No. It is inherent in the power to tax that a state be free to select the subjects of taxation. PD 1869. Sec. They constitute sugar liens (Sec. producers. said to be so numerous that it is impracticable to bring them all before the Court although the subject matter of the present controversy is of common interest to all sugar producers. lifted from the 1935 Constitution. sugarcane planters and millers. It is levied with a regulatory purpose. whether parties in this action or not. stabilization of the domestic market including the foreign market the fact that the State has taken possession of moneys pursuant to law is sufficient to constitute them state funds.D. PAGCOR is a government owned or controlled corporation with an original charter. its "exemption clause" remains as an exception to the exercise of the power of local governments to impose taxes and fees. 857. Art. P. Issue: Whether or not P. No. planters and millers. . 3. 7[b]. 249 ALR 535. thus. of note is the fact that one-half. The stabilization fees in question are levied by the State upon sugar millers. repealed or revoked" (Sec." Its operation was originally conducted in the well known floating casino "Philippine Tourist. 29(3). it did not collect said fees for the account of the sugar producers. and that the funds were channeled to the purchase of shares of stock in respondent Bank do not convert the funds into a trust fired for their benefit nor make them the beneficial owners of the shares so purchased. No. the power to demand or collect license fees which is a consequence of the issuance of "licenses or permits" is no longer vested in the City of Manila. 1987 Constitution).1973 Constitution. for short) was formerly the government office tasked with the function of regulating and supervising the sugar industry until it was superseded by its co-respondent Sugar Regulatory Administration (SRA. GASTON v. 388). 98 Phil. 148). to provide means for the stabilization of the sugar industry. L-77194 March 15. planters and millers.. moneys from which may be paid out only in LAND TRANSPORTATION OFFICE v.D. the revenues collected are to be treated as a special fund." including the foreign market the industry being of vital importance to the country's economy and to national interest. Petitioners are questioning the validity of P. of the amount levied under P.D. The Stabilization Fund is to be utilized for the benefit of the entire sugar industry. a power delegated to LGUs under the Local Government Code.. Sec. Although said Executive Order abolished the PHILSUCOM. to dispose of and convey its property and to distribute its assets. Local governments have no power to tax instrumentalities of the National Government. 18[l]). 23(l]). 131512. BASCO v. That is the essence of the trust intended (See 1987 Constitution. 1986. being a mere Municipal corporation has no inherent right to impose taxes. planters and producers for a special purpose — that of "financing the growth and development of the sugar industry and all its components. p. cited in 42 Am. Having been levied for a special purpose. Furthermore. Article VI. "administered in trust' for the purpose intended. It cannot therefore be violative but rather is consistent with the principle of local autonomy. it can also provide for exemptions or even take back the power. and is violative of the equal protection clause and local autonomy as well as for running counter to the state policies enunciated in Sections 11 (Personal Dignity and Human Rights). The investment in shares of respondent Bank is not alien to the purpose intended because of the Bank's character as a commodity bank for sugar conceived for the industry's growth and development. 1869. in particular. PHILSUCOM or its successor-in-interest. (1/2) or PO. The collections made accrue to a "Special Fund. Sec. The character of the Stabilization Fund as a special fund is emphasized by the fact that the funds are deposited in the Philippine National Bank and not in the Philippine Treasury. The protection of a large industry constituting one of the great sources of the state's wealth and therefore directly or indirectly affecting the welfare of so great a portion of the population of the State is affected to such an extent by public interests as to be within the police power of the sovereign. 1869 constitutes a waiver of the right of the City of Manila to impose taxes and legal fees. 29[1]. in the language of the statute. because it is allegedly contrary to morals. public policy and public order. 388 is to be utilized for the "payment of salaries and wages of personnel. Araneta). the standard as it is expressed suffices to guide the delegate in the exercise of the delegated power. the amount of the under recovery being left for determination by the Ministry of Finance. among other things." He contends that since the Constitution vests the authority to enact revenue bills in Congress. is tangential (a completely different line of thought or action). inasmuch as the delegation relates to the exercise of the power of taxation. EO 475 was passed reinstating the previous 5% duty except that crude oil and other oil products continued to be taxed at 9%. within the province of the Legislative rather than the Executive Department. or "a specific limit on how much to tax. the exercise of taxing powers of provinces. are prohibited to the President.D. 129. 1984. 133(l) of the Local Government Code must NOT be held to have had the effect of withdrawing the express power of LTO to cause the registration of all motor vehicles and the issuance of licenses for the driving thereof.O. 1956 creating a Special Account in the General Fund. 1993 Topic: Prohibition Against Delegation of Taxing Power/Exceptions. In 1991. Police power and Taxation. a representative from Bataan. . Common Limitations on the Taxing Power of Local Government Units. The interplay and constant fluctuation of the various factors involved in the determination of the price of oil and petroleum products. exercised pursuant to the POLICE POWER of the State. whose BASIC OBJCTIVES are to ACHIEVE ROAD SAFETY by insuring the road worthiness of these motor vehicles and competence of drivers. expanding the grounds for reimbursement to oil companies for possible cost under recovery incurred as a result of the reduction of domestic prices of petroleum products. within specified limits. President Corazon C. import and export quotas. She promulgated Executive Order No. avers that EO 475 and 478 are unconstitutional for they violate Sec 24 of Art 6 of the Constitution which provides: " All appropriation. but as already discussed. revenue and tariff bills. quantitative restriction. specifically under Sec. For a valid delegation of power. amended P. fees or charges for the registration of motor vehicles and for the issuance of all kinds of licenses or permits for the driving thereof. . the payment of franchise fees for the grant of the franchise of tricycles-for-hire. Petitioner LTO explains that one of the functions of the national government that has been transferred to local government units is the franchising authority over tricycles-for-hire of the Land Transportation Franchising and Regulatory Board (LTFRB) but NOT the authority of the LTO to register all motor vehicles and to issue to qualified persons of licenses to drive such vehicles. Delegation to the President Facts: On 27 November 1990. 1962 Topic: Prohibition Against Delegation of Taxing Power/Exceptions. consistent with the basic policy of local autonomy. 1024. . and charges subjects to the provisions herein. authorize the President to fix within specified limits. and. NO. and private bills shall originate exclusively in the House of Representatives. and other duties or imposts within the framework of the national development program of the Government. cities. viz.‖ The ordinance provided for. In the same year. Registration and Permit. by law. fees and charges shall accrue exclusively to the local government units. the Court finds that the provision conferring the authority upon the ERB to impose additional amounts on petroleum products provides a sufficient standard by which the authority must be exercised. 137 on February 27. in addition to any other duties. the corresponding issuance of all kinds of licenses or permits for the driving of tricycles. this is not the case. tariff rates. As such. municipalities. To do so would render the ERB unable to respond effectively so as to mitigate or avoid the undesirable consequences of such fluidity. and barangays shall NOT extend to the following: xxx…. along with Eminent Domain. 133 of the Local Government Code. are inherent powers of sovereignty which the State might SHARE with the Local Government Units by DELEGATION given under a constitutional or a statutory fiat. which read: ―Sec. the enactment of appropriation. that is. like all other bills is. and ordered released from the National Treasury to the Ministry of Energy. that they must be enacted instead by the Congress of the Philippines. These functions of the LTO are essentially REGULATORY in NATURE. It does not follow. 916-92 entitled ―An Ordinance Regulating the Operation of Tricycles-forHire. bills of local application. EXCEPT tricycles Issue: Whether or not there is valid delegation to City of Butuan to collect registration fees or charges and issue all kinds of licenses or permits for the driving of tricycles. Held: With regard to the alleged undue delegation of legislative power. Delegation to Local Governments Facts: The Sangguniang Panglungsod (SP) of Butuan passed SP Ordinance No. Such taxes.D. 475 and 478. The EXCLUSIONARY CLAUSE contained in the tax provisions of Sec. Subsequently. tonnage and wharfage dues. 133. 99886 March 31. by law. No. 1956 expressly authorizes the ERB to impose additional amounts to augment the resources of the Fund. in its view. that is it must set forth the policy to be GARCIA V." The Court is cited to this requirement by the petitioner on the premise that what is involved here is the power of taxation.Each Local Government Unit shall exercise its power to create its own sources of revenue and to levy taxes. Cory issued EO 438 which imposed. but the Senate may propose or concur with amendments. The power over tricycles granted under Section 458 (a)(3)(vi) of the Local Government Code to LGUs is the power to regulate their operation and to grant franchises for the operation thereof originally by LTFRB." Issue: Whether or not there is undue delegation of power.xxx…. authorize the President to fix. 475 and 478 which are in the nature of revenue-generating measures. . Held: The reliance made by the Respondents on the broad taxing power of LGUs. with the earnings from such placements accruing to the fund." There is thus explicit constitutional permission to Congress to authorize the President "subject to such limitations and restrictions as [Congress] may impose" to fix "within specific limits" "tariff rates . 1987. ORBOS G. Garcia. 28 (2). Power to Create Sources of Revenue. Article VI of the Constitution. limitations and restrictions must be quantitative. it cannot be overlooked that the overriding consideration is to enable the delegate to act with expediency in carrying out the objectives of the law which are embraced by the police power of the State. but also impose a specific limit on how much to tax. Held: Under Section 24. providing mechanism for the issuance of Franchise. EO 443 increased the additional duty to 9%. it is essential that the law delegating the power must be (1) complete in itself. – Unless otherwise provided herein. including crude oil and other oil products imported into the Philippines." OSMENA v. import and export quotas.‖ ―Sec. This additional duty was imposed across the board on all imported articles. and subject to such limitations and restrictions as it may impose. He also contends that the "delegation of legislative authority" to the ERB violates Sec. 1956. Delegation to Administrative Agencies Facts: On October 10. Although the provision authorizing the ERB to impose additional amounts could be construed to refer to the power of taxation. Issue: Whether or not EO 475 and 478 are constitutional. tonnage and wharfage dues.D.xxx (l) Taxes. In addition to the general policy of the law to protect the local consumer by stabilizing and subsidizing domestic pump rates. and the frequently shifting need to either augment or exhaust the Fund. and subject to such limitations and restrictions as it may impose. do not conveniently permit the setting of fixed or rigid parameters in the law as proposed by the petitioner. and other duties or imposts within the framework of the national development program of the Government. bills authorizing increase of the public debt. The same Executive Order also authorized the investment of the fund in government securities. the OPSF was reclassified into a "trust liability account. . Aquino. who (shall) be taxed (and) what the tax is for. Article VI of the Constitution. President Ferdinand Marcos issued P. What is here involved is not so much the power of taxation as police power.: (2) The Congress may. that therefore Executive Orders Nos. fees. Section 28(2) of Article VI of the Constitution provides as follows: "(2) The Congress may. "the limits. Relying on Section 129 and Section 133 of the Local Government Code." in virtue of E. however. the President may not . What petitioner would wish is the fixing of some definite. Respondent city of Bunuan asserts that one of the salient provisions introduced by the Local Government Code is in the area of Local Taxation which allows LGUs to collect registration fees or charges along with. taking account of the circumstances under which it is to be exercised. § 8(c) of P. and other duties or imposts . and fees for the issuance of a permit for the driving thereof. and Imposing Penalties for Violations thereof and for other Purposes. fees for the registration of the vehicle. of course..Topic: Prohibition Against Delegation of Taxing Power/Exceptions.R. .R. assuming they may be characterized as revenue measures. an additional duty of 5% ad valorem. EXECUTIVE SECRETARY G. The OPSF was designed to reimburse oil companies for cost increases in crude oil and imported petroleum products resulting from exchange rate adjustments and from increases in the world market prices of crude oil. designated as the Oil Price Stabilization Fund (OPSF). the law must not only specify how to tax. revenue or tariff bills. L-19748 SEPTEMBER 13. assume such power of issuing Executive Orders Nos. tariff rates. taxes and charges imposed by law on all articles imported into the Philippines. On June 4. its provinces. 1993 Topic: Exemption of Government Entities/Agencies and Instrumentalities Facts: Just like lightning which does strike the same place twice in some instances. approved March 24. cities and municipalities. The standard. It was expressly stated that: Any such loan or loans shall be exempt from taxes. mainly to develop hydraulic power from all water sources in the Philippines. 1960. by the legislature and signed into law.000.000. As to the pertinent tax exemption provision.000. Proof was also submitted to the Bureau (of Internal Revenue ['BIR']) that 'Champion' was an original Fortune Tobacco Corporation register and therefore a local brand. branch.000. In that light. 358 was enacted expressly authorizing the NPC. No 2641 was enacted converting the NPC from a public corporation into a stock corporation with an authorized capital stock of P100. the measure suffers from lack of uniformity of taxation. the CTA dismissed for lack of merit the motion for reconsideration. paragraph 1. The following day. 357 was enacted authorizing the President of the Philippines to guarantee. dated 19 July 1993. No.. Justice Bellosillo so expresses in his separate opinion. inasmuch as the challenged law sets forth a determinable standard which guides the exercise of the power granted to the ERB." "Premium More. 88291 June 8. upon the other hand. 119761 August 29.A. 1949. absolutely and unconditionally.00 was appropriated out of the funds in the Philippine Treasury for the purpose of organizing the NPC and conducting its preliminary work. COURT OF APPEALS G. and restrictions of the Republic of the Philippines. the BIR not simply interpreted the law. . . Prior to the issuance of the questioned circular. to incur other types of indebtedness. Revenue Memorandum Circular No. as primary obligor. by ordinary mail. without RMC 37-93. convinces us that the circular cannot be viewed simply as a corrective measure (revoking in the process the previous holdings of past Commissioners) or merely as construing Section 142(c)(1) of the NIRC. MACARAIG G. are to be treated alike or put on equal footing both in privileges and liabilities. A bill.00 from the US$50." "Premium More" and "Champion" within the classification of locally manufactured cigarettes bearing foreign brands and to thereby have them covered by RA 7654. so that Congress.' and 'More' as foreign brands since they were listed in the World Tobacco Directory as belonging to foreign companies. Issue: Whether or not RMC 37-93 is a ruling or opinion of the Commissioner of Internal Revenue interpreting provisions of the Tax Code. to Deputy Minister Ramon Diaz of the Presidential Commission on Good Government. in fact and most importantly. 1996 Topic: Delegation to Administrative Agencies Facts: Fortune Tobacco Corporation ("Fortune Tobacco") is engaged in the manufacture of different brands of cigarettes. Fortune Tobacco requested for a review. Fortune Tobacco changed the names of 'Hope' to 'Hope Luxury' and 'More' to 'Premium More. its provinces.' thereby removing the said brands from the foreign brand category. fees. the proper exercise of the delegated power may be tested with ease. R. it behooves the agency to accord at least to those directly affected a chance to be heard. on 10 June 1993. the National Power Corporation shall be exempt from all taxes. 2055 was enacted increasing the total amount of foreign loans NPC was authorized to incur to US$100. 598. on 14 June 1993. which facts shall be stated upon the face of said bonds. On 02 July 1993. 120 was enacted creating the National Power Corporation. similarly situated. The request was denied on 29 July 1993. charges. In a letter. Article VI. Uniformity requires that all subjects or objects of taxation. contributions and restrictions of the Republic of the Philippines. On 03 August 1993. which later became Republic Act ("RA") No. the CIR assessed Fortune Tobacco for ad valorem tax deficiency amounting to P9. for the first time." and "Champion" cigarettes were in the category of locally manufactured cigarettes not bearing foreign brand subject to 45% ad valorem tax. Deoferio. 1958." This Court thus finds no serious impediment to sustaining the validity of the legislation.00 ceiling in R. 37-93 ("RMC 37-93"): SUBJECT: Reclassification of Cigarettes Subject to Excise Tax was issued by the BIR. Commonwealth Act No. duties. a public corporation. "Hope Luxury. 1936. fees." Ad Valorem taxes were imposed on these brands. However. the now disputed RMC 37-93 had to be issued. No. there is no failure in the performance of the legislative functions. dated 06 January 1987. When. Section 28. . otherwise known as the Tydings McDuffle Law. and they constitute a sufficient standard upon which the delegation of power may be justified. Fortune Tobacco filed a petition for review with the CTA." and "More" cigarettes. On 15 July 1993. 1934. been made in order to place "Hope Luxury. of hearing. in order to place "Hope Luxury. would have had no new tax rate consequence on private respondent's products. its applicability needs nothing further than its bare issuance for it gives no real consequence more than what the law itself has already prescribed. The main source of funds for the NPC was the flotation of bonds in the capital markets and these bonds . By the same token. but has. imposts. the law stated as follows: To facilitate payment of its indebtedness. He was also authorized to contract on behalf of the NPC with the International Bank for Reconstruction and Development (IBRD) for NPC loans for the accomplishment of NPC's corporate objectives and for the reconstruction and development of the economy of the country. "Where the standards set up for the guidance of an administrative officer and the action taken are in fact recorded in the orders of such officer. Jr. unless petitioner would be willing to concede to the submission of private respondent that the circular should." "Hope. questioning the CTA's 10th August 1994 decision and 11th October 1994 resolution.000.R.' 'Hope. be considered adjudicatory in nature and thus violative of due process following the Ang Tibay doctrine. dated 11 October 1994.R. as the Court has already stated. addressed to the appellate division of the BIR. it legislated under its quasi-legislative authority. particularly considering the circumstances under which it has been issued. Evidently. About a month after the enactment and two (2) days before the effectivity of RA 7654.. the Philippine Patent Office issued to the corporation separate certificates of trademark registration over "Champion.00 divided into 1. the courts and the public are assured that the orders in the judgment of such officer conform to the legislative standard. the administrative rule goes beyond merely providing for the means that can facilitate or render least cumbersome the implementation of the law but substantially adds to or increases the burden of those governed. On 31 March 1993. or on 30 July 1993. No. On various dates.000. Thus. of the 1987 Constitution mandates taxation to be uniform and equitable. The tax provision related to the repayment of these loans was not amended or deleted. Apparently. "the initial position of the Commission was to classify 'Champion. In its resolution.A. On November 3. 357. imposts. the Court is convinced that the hastily promulgated RMC 37-93 has fallen short of a valid and effective administrative issuance. Fortune Tobacco received. In its decision. R. a certified xerox copy of RMC 37-93. the express purpose for which the imposts are permitted and the general objectives and purposes of the fund are readily discernible. Specifically. COMMISSIONER v. In a letter. the new law would have its amendatory provisions applied to locally manufactured cigarettes which at the time of its effectivity were not so classified as bearing foreign brands. and thereafter to be duly informed. reconsideration and recall of RMC 37-93. . the appellate court's Special Thirteenth Division affirmed in all respects the assailed decision and resolution. division or political subdivision thereof and subject to the provisions of the Act of Congress. Hence. duties. 7654. was enacted. all taxable articles or kinds of property of the same class must be taxed at the same rate and the tax must operate with the same force and effect in every place where the subject may be found. there can be no ground upon which to sustain the petition." "Premium More" and "Champion" cigarettes and. issued under the authority of this Act shall be exempt from the payment of all taxes by the Commonwealth of the Philippines. sent via telefax a copy of RMC 37-93 to Fortune Tobacco but it was addressed to no one in particular. On June 13. this matter of indirect tax exemption of the private respondent National Power Corporation (NPC) is brought to this Court a second time. Held: It should be understandable that when an administrative rule is merely interpretative in nature. Tan. verily. or by any authority. It seems obvious that what the law intended was to permit the additional imposts for as long as there exists a need to protect the general public and the petroleum industry from the adverse consequences of pump rate fluctuations.executed by the delegate and (2) it must fix a standard — limits of which are sufficiently determinate or determinable — to which the delegate must conform.000 shares having a par value of . BIR Deputy Commissioner Victor A." "Premium More." and "Champion" cigarettes within the scope of the amendatory law and subject them to an increased tax rate. as in fact my esteemed colleague Mr. No. RMC 37-93 would only apply to "Hope Luxury. On June 18. 000. Republic Act No.334. aside from indebtedness incurred by flotation of bonds. The sum of P250. as amended. The due observance of the requirements of notice. The CIR forthwith filed a petition for review with the Court of Appeals. the enactment of RA 7654. the payment of any and all NPC loans. charges. In so doing. cities and municipalities. of then Commissioner of Internal Revenue Bienvenido A.A. Jr. the CTA has keenly noted that other cigarettes bearing foreign brands have not been similarly included within the scope of the circular All taken. On the same date. 000. . . R. and of publication should not have been then ignored. at about 17:50 hours. A reading of RMC 37-93. may even be implied. by the President of the Philippines. MACEDA v.00.A. No. before that new issuance is given the force and effect of law. fees or charges of any kind on the national government. ANGARA G. May 2. since. at this point in time. But the last paragraph of Section 234 further qualifies the retention of the exemption in so far as the real property taxes are concerned by limiting the retention only to those enumerated there-in. Accordingly. city. not integrated within the department framework. nothing can prevent Congress from decreeing that even instrumentalities or agencies of the government performing governmental functions may be subject to tax. or any of its political subdivisions covered by item (a)of the first paragraph of Section 234. cooperatives duly registered under R. fees. are any one of those enumerated in Section 234. or use of the property. including. R. However. endowed with some if not all corporate powers. the said section is qualified by Section 232 and 234. which are real property. as earlier adverted to. The LGC. whether pertaining to the autonomous reason. city. even if the petitioner was originally not a taxable person for purposes of real property tax. and charges of any kind of the National Government. Issue: Whether or not the City of Cebu has the power to impose taxes on petitioner Held: A claim of exemption from tax payment must be clearly shown and based on language in the law too plain to be mistaken. The terms "Republic of the Philippines" and "National Government" are not interchangeable. 3043 was enacted increasing the abovementioned authorized capital stock to P250. which states: In any case. R. . but not under any explicit provision of the said section. 1997 Topic: International Comity Facts: .P100. mandated to "principally undertake the economical. No. Finally. R. has been withdrawn. the increase to be wholly subscribed by the Government.00 with the increase to be wholly subscribed by the Government. MACTAN CEBU INTERNATIONAL AIRPORT AUTHORITY v. Where it is done precisely to fulfill a constitutional mandate and national policy. 1967.00 each. "taxes. enacted pursuant to Section 3. In light of the petitioner's theory that it is an "instrumentality of the Government". This term includes regulatory agencies. 6938. except real property tax. An "agency" of the Government refers to "any of the various units of the Government. which expressly mentions the word "instrumentalities".000. 232 and 234 of the LGC. non stock and non-profit hospitals and educational institutions. Issue: Whether or not NPC is exempted from payment of tax.R. On the other hand. as laid down in Secs 133 the taxing powers of LGUs cannot extend to the levy of inter alia. except those granted to local water districts." We cannot restrain the BIR from refunding said amount because of Our ruling that NPC has both direct and indirect tax exemption privileges. In the first place. Section133 of the LGC prescribes the common limitations on the taxing powers of LGUs: (o) Taxes. the provincial. the Officer of the Treasurer of Cebu City demanded payment for realty taxes on parcels of land belonging to petitioner. a government-owned corporation. 1986. the petitioner is now the owner of the land in question and the exception in Sec 234(c) of the LGC is inapplicable. No. Hence. At the same time. No. agencies. and instrumentalities.00 had been made on said date. the Metropolitan Manila Area may impose the real property tax except on. NPC can no longer file any suit to collect said amount even if it has previously filed a claim with the BIR because it is time-barred under Section 230 of the National Internal Revenue Code of 1977. FERDINAND J. for one exists. municipalities in TAÑADA v. character. no such suit or proceeding shall be begun after the expiration of two years from the date of payment of the tax or penalty REGARDLESS of any supervening cause that may arise after payment. as amended. Section 193 of the LGC prescribes the general rule. since taxation is the rule and exemption is the exception. No. Nevertheless. No. Moreover. 1971. C. MARCOS G. in light of the forgoing disquisitions. Section 234 of LGC provides for the exemptions from payment of GOCCs. chartered institutions and government-owned and controlled corporations".000. On September 10. the various arms through which political authority is made effective in the Philippines. The date of the Deed of Assignment is June 6. Neither can We order the BIR to refund said amount to NPC as there is no pending petition for review on certiorari of a suit for its collection before Us. as distinguished from the different forms of local Governments." The National Government then is composed of the three great departments the executive.00. R. We should note that there is no legal obstacle to the BIR granting. 120082. which. and enjoying operational autonomy. except upon the effectivity of the LGC. it could only be the first. viz. Besides. 000. Article X of the constitution provides for the exercise by LGUs of their power to tax. No. pursuant to Sec 232. saves as the contrary appears from the context. its agencies and instrumentalities" "in Section 133(o). as it now asserts. including GOCCs. "National Government "refers "to the entire machinery of the central government. and the petitioner is. At any rate. efficient and effective control." while an "instrumentality" refers to "any agency of the National Government. the exemption is withdrawn if the beneficial use of such property has been granted to taxable person for consideration or otherwise. vested with special functions or jurisdiction by law. Under Section 1: The authority shall be exempt from realty taxes imposed by the National Government or any of its political subdivisions.A. its agencies and instrumentalities and LGUs. It also asserted that it is an instrumentality of the government performing governmental functions. There can be no question that under Section 14 RA 6958 the petitioner is exempt from the payment of realty taxes imposed by the National Government or any of its political subdivisions. except as provided in the said section. and unless otherwise provided in the LGC. Even if We were to assume that payment by NPC for the amount of P410. administering special funds. The city refused insisting that petitioner is a GOCC performing proprietary functions whose tax exemption was withdrawn by Sections 193 and 234 of the LGC.118295.. inter alia. upon the effectivity of the LGC. It is clear that more than two (2) years had already elapsed from said date. including government-owned and controlled corporations. as amended. Petitioner filed a declaratory relief before the RTC. Pagcor is unavailing since it was decided before the effectivity of the LGC. it had already become even if it be conceded to be an "agency" or" instrumentality" of the Government. or a local government or a distinct unit therein. On June 17. with said capital stock wholly subscribed to by the Government. Held: A chronological review of the NPC laws will show that it has been the lawmaker's intention that the NPC was to be completely tax exempt from all forms of taxes — direct and indirect. September 11. undoubtedly.A.A. exemptions from real property taxes granted to natural or juridical persons. municipal or barangay subdivision or other forms of local government. No tax provision was incorporated in said Act.A. including a department. "real property owned by the Republic of the Philippines or any of its political subdivisions except when the beneficial used thereof has been granted to a taxable person.000. No tax provision was incorporated in said Act. Any claim to the contrary can only be justified if the petitioner can seek refuge under any of the exceptions provided in Section 234. The grant of the privilege only in respect of this tax is conclusive proof of the legislative intent to make it a taxable person subject to all taxes.A. Petitioner objected invoking its tax exemption." These autonomous regions. a taxable person for such purpose in view of the withdrawal in the last paragraph of Section 234 of exemptions from the payment of real property taxes. however. all others not included in the enumeration lost the privilege upon the effectivity of the LGC. the petitioner's claim that it is an instrumentality of the Government is based on Section 133(o). No 4897 was enacted. and assuming the amounts covered had actually been paid previously by the oil companies to the BIR. the petitioner can no longer invoke the general rule in Section 133. bureau. citing section 133 of the LGC which puts limitations on the taxing powers of LGUs. and the exemption from taxation. provincial. or government-owned or controlled corporation. the scope thereof or its limitations. Among the "taxes" enumerated in the LGC is real property tax. we conclude that as a general rule. municipal or barangay subdivisions" are the political subdivision. the LGC authorizes LGUs to grant tax exemption privileges." As to tax exemptions or incentives granted to or presently enjoyed by natural or juridical persons. even without a suit by NPC. As the Court sees it. The latter proviso could refer to Section 234. . office instrumentality. assuming that NPC's claim had been made seasonably." This view does not persuade us. the position taken by the petitioner is untenable. 6958. 1961. Reliance on Basco vs. and LGUs". applies to the petitioner. provinces. as shown above. agencies and instrumentalities. which enumerates the properties exempt from real property tax. On the other hand. but not under Section 133. On June 17. either by virtue of ownership. Petitioner cannot claim that it was never a "taxable person" under its Charter.It must show that the parcels of land in question. 6395 was enacted revising the charter of the NPC. except as provided therein. the legislative and the judicial.A. The former is boarder and synonymous with "Government of the Republic of the Philippines" which the Administrative Code of the1987 defines as the "corporate governmental entity though which the functions of the government are exercised through at the Philippines. NPC's capital stock was increased again to P300. Since the last paragraph of Section 234 unequivocally withdrew. it could only be within be first item of the first paragraph of the section by expanding the scope of the terms Republic of the Philippines" to embrace "instrumentalities" and "agencies. No. they are withdrawn upon the effectivity of the LGC. In short. this is a clear case of a "Mexican standoff. and in the second place it fails to consider the fact that the legislature used the phrase "National Government. the exemption may thus be withdrawn at the pleasure of the taxing authority. 120. . management and supervision of the Mactan International Airport in the Province of Cebu and the Lahug Airport in Cebu City. it necessarily follows that its exemption from such tax granted it in Section 14 of its charter. 580.but only the phrase "Republic of the Philippines or any of its political subdivision "in Section 234(a). cities. 1996 Topic: Exemption of Government Agencies and Instrumentalities Facts: Petitioner was created by virtue of RA6958. The trial court dismissed the petitioner ruling that the LGC withdrew the tax exemption granted the GOCCs. even as the real property is owned by the Republic of the Philippines. HON. It was only exempted from the payment of real property taxes. Most likely. Reading together Section 133. no one can doubt its wisdom. No tax exemption was incorporated in said Act. its agencies and instrumentalities. R. 000. the tax credit or refund claimed by NPC. usually through a charter. L-14878. On September 7. scrupulous care must be taken to avoid opening the floodgates to the violation of our tax laws. Commissioner of Internal Revenue. a c om p a n y i n t h e b u s i n e s s of b ot t l i ng a n d s el l i n g s of t d ri nk s .324.100.324. But by their voluntary acts. w as demanded by the City of Iloilo to pay an amount of 59. of pervasive relevance at this time. 22. representing its erroneously paid income taxes in the amount of P44. L-19707. could be availed of to take advantage of the tax exemption law under discussion.. Il oi l o B o t t l i n g I nc as s e rt e d ho w e v er t ha t s i n c e t h ei r p l a nt b as e ha s m ov ed t o m uni c i pa l i t y o f Pavia shortly after the aforementioned ordinance was enacted.R. . 21 Article VII of the constitution. the National Power Corporation (hereinafter. the mere expedient of having a Philippine corporation enters into a contract for loans or other domestic securities with private foreign entities. v. especially sec 1 and sec 13. firms. are entitled to exemption and which should indispensably be the party in interest in this case. On July 15. petitioner filed an administrative claim for refund and/or tax credit with respondent in the amount of P52. which is a proper claim for refund pursuant to Section 204 and 229 of the Tax Code. The Senate adopted resolution no.324.. 119). stating that the Uruguay Rounds Final Act is submitted for its concurrence pursuant to sec. 309 SCRA 87 [1999]). 97. v. It did not intent to pursue an isolationist policy. In fact. Whether or not the act of the Phil.921. G.324. G. that laws granting exemption from tax are construed strictissimi juris against the taxpayer and liberally in favor of the taxing power. There is no question that Iloilo Bottlers has moved out of Iloil o City‘s jurisdiction and into the municipality of Pavia where its plant now stands therefore. Situs of taxation (place of taxation) depends on various factors including the nature of the tax and subject matter thereof both of which must be scrutinized to reach a fair decision. Otherwise.00. G. No. The city however. t h e c o ur t s ruled in favor of Iloilo Bottlers and declared that Iloilo Bottlers is free from liability. Series of 1960. INC. Oct.907. specifically the power to tax Held: First. the respondent issued Bureau of Internal Revenue Ruling No. 1998. Rizalino Navarro (DTI Secretary) representing the Philippines government. .R.76% represents the OECF funded portion Since petitioner paid P82. No. A law should be passed by congress to clearly define and effectuate such principles. etc. petitioner now seeks a tax refund/credit of the P44. "NPC") and Mitsubishi Corporation. DA-407-98 where it held that "Mitsubishi has no liability for income tax and other taxes and fiscal levies. 1963). The tax rate used was 10% in accordance with the Philippines-Japan Tax Tr e a t y . G. regulations and administrative procedure. Inc.712 erroneously paid income tax and theP8. and distributers of s of t dr i nk s i n Il o i l o a re s u bj e c t t o a m un i c i p al l i c e ns e t a x o f 1 0 c e nt av os pe r c as e o f 2 4 b ot t l e s . frowning only on foreign competition which is unfair 2. 1998. they are regarded as in derogation of sovereign authority and to be construed strictissimi juris against the person claiming the exemption (Commissioner of Internal Revenue v. Economy.. et al. . Collector of Internal Revenue. 1998.00 computed in accordance with the provisions of Revenue Memorandum Order ("RAMO"). By signing such act. 12 Article XII of the Constitution. 1963. Vera.Manila Electric Company vs. The city of Iloilo then appealed this ruling. including VAT.P640.444.288. 54908. Batangas (Calaca II Coal-Fired Thermal Power Project. the taxability of a party cannot be blandly glossed over on the basis of a supposed "broad. and corporations engaged in the business of distribution of soft-drinks. 181 SCRA 82. The WTO proviso derogates from the power to tax. petitioner (being the Manila Branch of Mitsubishi Corporation) reported an income tax due of P90. T he r ul i n g w as r ev e rs e d i n f a v o r o f t h e C i t y o f Il oi l o and Iloilo Bottlers is deemed liable for the aforementioned taxes.241. L-16428. A f t er br i n gi n g t h e c a s e t o c ou rt . It did not shut out foreign investments. it does not limit the power of the congress the WTO agreement provides that each member shall ensure the conformity of its laws. which in turn will negotiate independently with their governments. The tax ordinance enacted by the City of Iloilo imposes a tax on persons. petitioner's claim for refund should be denied for lack of merit. No. the Supreme Court held:"It is too settled a rule in this jurisdiction. which is lodged in the Congress. 2000. 2. December 26.00 corresponding to the OECF-funded portion of its Calaca II Project ILOILO BOTTLERS. Aug.00 income tax for its income from the entire Calaca II Project (inclusive of the OECF-funded and non-OECF funded portions) andP8.Sec.00 total revenue from the Calaca II Project. petitioner filed its Income Tax Return for the fiscal year ended March 31. Definitely. Significantly. L-29987. wherein the Senate concurred in the ratification of the President. testing and commissioning of one (1) x 300 MW Batangas Coal-Fired Thermal Power Project II at Calaca. 1998 with the Bureau of Internal Revenue. No. S.449 or 54. As such.R. 5. v. arguing inter alia that: It contravenes sec. the latter two conditions for taxation are no longer applicable." Commissioner of Internal Revenue vs. MITSUBISHI CORPORATION — MANILA BRANCH v. Held: International comity may not be invoked to evade our tax laws.R. supply. which on us petitioners have failed to discharge. all cited in Aban.208. petitioner filed its Monthly Remittance Return of Income Taxes Withheld and remitted the amount of P8. the Constitution ordains the ideals of economic nationalism.C. nations may surrender some aspects of their state power in exchange for greater benefits granted by or derived from a convention or pact. G. Certain restrictions include: Limitations imposed by the very nature of membership in the family of nations. No. 1990. treaties really limit or restrict the absoluteness of sovereignty. Hence.R. and bottling of soft drinks within the territorial jurisdiction of the City of Iloilo. but it also takes into account the realities of the outside world. 1975. 1967. Tax exemptions must be strictly construed such that the exemption will not be held to be conferred unless the terms under which it is granted clearly and distinctly show that such was the intention of the parties (Philippine Acetylene Co... the Philippines agreed to adopt the ministerial declarations and decisions of the WTO. Mitsubishi Metal Corporation. 1991.A. Law of Basic Taxation of the Philippines. Collector of Internal Revenue. Issue: W het h er o r no t t h e c o u rt s w e re c o r re c t i n t h ei r i ni t i al r ul i n g t h at Il oi l o B ot t l e rs I nc . hence this case. The reason for denying this a cause of action are sourced from basic considerations of due process and the lack of judicial authority to wade into uncharted ocean of social and economic policy making the said provisions should be read and understood in relation to the other section.00 BPRT for the remittance of its income (inclusive of the income on the OECF-funded portion of the Calaca II Project). Hence. 10 Art. these provisions are not self-executing. Johnson and Son. still demanded taxes and also demanded back taxes under the claim that Iloilo Bottlers is still distributing in the city of Iloilo sin ce its transfer. Thus. i s free from liability and directing the city of Iloilo to refund the tax money.. 17. which provides that manufacturers. signed the Final Act Embodying the Result of the Uruguay Round of Multilateral Negotiations. private respondents are not even among the entities which. installation..712 and erroneously paid branch profit remittance tax in the amount of P8.792 or 45.612. Tax exemptions are not presumed (Lealda Electric Co.481. January 22. By their nature. The petition was filed seeking to nullify the act of the Philippine Senate. Likewise. In the return. impairs and restricts the exercise of legislative power by congress.100representing its branch profit remittance tax (BPRT) for branch profits remitted to the Head Office (in Japan) out of its income for the fiscal year ended March 31. II and sec. Of the P1. Held: N o . on July 15. CASE NO. on the 100% of its foreign currency portion of the Calaca II Project since the said taxes were assumed by the Philippine Government. it allow the exchange on the basis of equality and reciprocity. Iloilo Bottlers paid the dem a n de d l i c en s e t a x an d b ac k t a x es u n de r p r ot es t . that while international comity is invoked in this case on the nebulous representation that the funds involved in the loans are those of a foreign government. we cannot conclude that the Exchange of Notes grants tax exemption to petitioner. On June 30.711. No.24% represents that portion which was not OECF-funded considering that this amount represents the Philippine Peso component of the project. Inc. Tax refunds are in the nature of tax exemptions.829. Nor can we close this discussion without taking cognizance of petitioner's warning. 1998. 6139 Topic: International Comity Facts: On June 21. Inc. The burden of proof rests upon the party claiming exemption to prove that it is in fact covered by the exemption so claimed. Inc.288.1998. lest governmental operations suffer due to diminution of much needed funds. And Limitations imposed by treaty stipulations. COMMISSIONER OF INTERNAL REVENUE C. t h e c o ur t s w e r e no t c o rr e c t .812. under Section 29(b)(7)(A) of the tax code. President Ramos sent two letters to the Philippine Senate. and to submit the WTO agreement for the consideration and approval. Surigao Consolidated Mining Co. pragmatic analysis" alone without substantial supportive evidence.100. p. construction. entered into a contract for the engineering. . v. as to dispense with the need for citations. bottlers.T. goods and services in the development of the Phil. .505 in the form of an license tax the city c l a i m s w e r e due to it under an ordinance which wa s enacted on J a n u a r y 1 1 . These are merely statements of principles and policies. while P775. Issue: 1. they are not liable for any taxes. April 30. Senate contravenes the Constitution? Whether or not it limits. manufacture of soft-drinks. 1 9 6 0 k n o w n a s Ordinance No. Issue: Whether petitioner has erroneously paid income and branch profit remittance taxes for the fiscal year ended March 31. CITY OF ILOILO 164 SCRA607 Topic: Territorial Jurisdiction Facts: I l o i l o B o t t l e rs I n c .In the light of the foregoing. petitioner's head office in Japan. Taxation is the rule and exemption is the exception. which created the World Trade Organization.00 erroneously paid BPRT.416.100. T.864.533. but attaches upon the place where the respective . it has no loading rights for traffic purposes in the Philippines but maintained a general sales agent in the Philippines which was responsible for selling. BOAC tickets covering passengers and cargoes the Commissioner of Internal Revenue assessed deficiency income taxes against covering 2. that at the time the MTI was executed. or the transactions of any business carried on for gain or profit. saying that it does not independently distribute but rather actively sells directly to its consumers. Issue Whether or not the MTI document executed in Hong Kong is exempted from DST. Jur. Since Iloilo Bottlers does distribute within city limits. the gauge for taxability . income is a flow---flow of wealth. The execution of the MTI was done in Hong Kong. a company organized under the laws of Hong Kong. inter alia. paper or loan agreement itself automatically gives rise to the imposition of DST. it is therefore subject to the ordinance and therefore should pay the pertinent amounts to the city of Iloilo. the power to levy an excise tax depends upon the place where the business is done. nor upon the physical location of the property and in connection with the act or occupation taxed. not necessarily base of operation. The flow of wealth proceeded from and occurred within Philippine territory. . trades. three percent (3%) of the gross income earned by all businesses and enterprises within the Subic Special Economic Zone shall be remitted to the National Government. Income means cash received or its equivalent.07. In case of conflict between national and local laws with respect to tax exemption privileges in the Subic Special Economic Zone. of legal age. dividends. it is a tax on the privilege of distributing. — xxx (c)The provision of existing laws. instrument. that a DST. there is hereby established a development fund of one percent (1%) of the gross income earned by all businesses and enterprises within the Subic Special Economic Zone to be utilized for the development of the municipalities outside the City of Olongapo and the Municipality of Subic. also from interests. 88 as cited in Compendium of Tax Law and Jurisprudence by Vitug. for short) over loan and security documents executed in Hong Kong on December 29.A CASE NO. 343. as imposing DST. profits and income derived from salaries wages or compensation for personal service of whatever kind and in whatever form paid. one percent (1%)each to the local government units affected by the declaration of the zone in proportion to their population area. one percent (1%) each to the local government units affected by the declaration of the zone in proportion to their population area.) Thus. the subsequent enactment of Republic Act No. The position of the respondent in its various rulings afore cited is in conformity with the Honorable Supreme Court's dictum on the issue at bar in the case of Allied Thread Co. petitioner paid under protest the above said amount of DST with respondent's Bureau in order to facilitate the registration of the MTI with the Register of Deeds of Lucena. Inc. . and other factors. inasmuch as the MTI was executed and signed in Hong Kong prior to the effectivity of Republic Act No. while having no landing rights here. such execution is now deemed to be merely incidental. not directly anymore upon the act or privilege of transacting documents. the flow of wealth should share the burden of supporting the government. growing out of ownership or use of interest in such property.70 in compensation income taxes for the income he derived from his employment with Coastal Subic Bay Terminal. SMITH v. it is the amount of money coming to a person within a specific time. Yatco. On even date. 77 Phil. does not attach to the execution of the documents in Hong Kong following respondent's previous rulings on the matter 1. On December 29. In consideration of such protection. commerce. profits. together with Hopewell Energy International Limited. For the source of income to be considered as coming from the Philippine. . the same shall be resolved in favor of the latter. COMMISIONER OF INTERNAL REVENUE C. petitioner filed a written claim for refund with the Bureau of Internal Revenue(BIR) then after a Petition for Review to CTA. 1970 for 858. and is an employeeof Coastal Subic Bay Terminal. 5 is an excise tax. By its nature. Distribution is therefore only incidental to its business. 1994. Even though the base of operations is at Pavia.660. HOPEWELL POWER (PHILIPPINES) CORPORATION v.A CASE NO. is such ―flow of wealth‖ come from ―sources within the Philippines? The source of an income is the property.Petitioner is a corporation organized and existing under Philippine laws. transaction(s) is perfected and consummated. 1993. shall be imposed within the Subic Special Economic Zone. or where the transaction took place.The ruling now depends upon whether or not Iloilo Bottlers can be considered as distributing its products within Iloilo city. enjoying the protection accorded by the Philippine government. and that. . DONALD L. In addition. . but rather on the act or privilege of simply transacting on any obligation or right arising from Philippine sources. BRITISH OVERSEAS AIRWAYS CORPORATION and COURT OF TAXAPPEALS 149 SCRA 395 Topic: Limitation of Territorial Jurisdiction Facts: British overseas airways corp. Claiming that the payment of tax on his compensation income was erroneous. The tickets exchanged hands here and payments for fares were also made here in the Philippines. as amended by Republic Act No. (Emphasis Supplied)Under the foregoing provisions. namely. vs.) Presiding from the above. For. only business establishments operating within the Subic Special Economic Zone are exempt from national and local taxes. He was employed as Controller of Coastal Subic Bay Terminal Inc. Held: The disquisition of the parties and the provisions of the Tax Code and jurisprudence in point. business. Section 12(c) of RA 7227. rents. and other factors. In lieu of paying taxes. petitioner. However. Unlike before the amendment where the execution of the document. being an excise tax. petitioner contends. 133 SCRA 338 at p. BOAC paid such under protest. In BOAC‘s case. or the occupation is engaged in. 496 [1946]. this Court sees Section 173 of the Tax Code. Issue: Whether or not the revenue derived by private respondent BOAC from sales tickets in the Philippines for air transportation.781. the sale of tickets in the Philippines is the activity that produces the income. the drinks are sold in Iloilo city to consumers in a ―moving store‖ fashion. the courts find that Iloilo Bottlers is indeed considered as distributing since while the manufacturing and bottling occurs outside of Iloilo City.. The words income from any source whatever discloses a legislative policy to include all income not expressly exempted within the class of taxable income under our laws. entered into a Mortgage Trust Indenture (MTI) for the mortgage of their chattel and real estate assets with the Bank America National Trust Company. while capital is a fund. or on any property situated in the Philippines. From 1959 to 1972. otherwise known a s t h e B a s e s C o n v e r s i o n a n d Development Act of 1992". In addition. this Court rules in favor of the petitioner. of from profession. Iloilo Bottlers disclaims liability.358. in 1998 On April 15. and income derived from any source whatever‖ The definition is broad and comprehensive to include proceeds from sales of transport documents. The Situs for excise tax is the area of transaction. and other municipalities contiguous to the base areas.5310 November 18. 3% of the gross income earned by all businesses and enterprises within the SSEZ shall be remitted to the National Government. COMMISIONER OF INTERNAL REVENUE C. (BOAC) a wholly owned British Corporation. City Mayor of Manila. later assessed on Jan16. securities. 1999. Issue: Whether or not aliens working within the Subic Special Economic Zone are subject to Philippine income taxes on income earned from such employment Held: The phrase "no taxes. or gains. does not depend on the location of the office. (See Koppel (Phil) vs.58 allegedly representing erroneous payment of documentary stamp tax ("DST". being an excise tax. S ub i c S p ec i al E c o nom i c Zo n es .56 for 1959-1963. Inc. In this case.T. 1998 Topic: Limitation of Territorial Jurisdiction Facts: This is a judicial claim for the refund of P24. it means something distinct from principal or capital. whether real or personal. vocations. petitioner. single. The transactions are considered to occur within the city. no taxes. manufacturing or bottling soft drinks. Province of Quezon. Inc.498. At bar. COMMISSINER OF INTERNAL REVENURE v. activity or service that produced the income. constitute income of BOAC from Philippine sources and accordingly taxable Held: The tax Code defines ―gross income‖ thus: ―Gross income‘ includes gains. 7660. local and national. shall be imposed within the SSEZ" must be read together with the following sentence "In lieu of paying taxes. filed hisannual income tax return and paid P1. there is hereby established a development fund of one percent (1%) of the gross income earned by all businesses and enterprises within the Subic Special Economic Zone to be utilized for the development of municipalities outside the City of Olongapo and the Municipality of Subic. instruments. 2002 Topic: Limitation of Territorial Jurisdiction Facts: Petitioner is a citizen of the United States. local and national. but depends upon the place in which the act is performed or occupation engaged in. specifically addressed such perceived loophole in the law 2 by making the execution of loan agreements abroad subject to DST when the obligation or right arises from Philippine sources or the property is situated in the Philippines. This conclusion is also in keeping with one of the inherent limitations of taxation. it is sufficient that the income is derived from activity within the Philippines. 7660 on January 14. 1994. to wit: The power to levy an excise upon the performance of an act or the engaging in an occupation does not depend upon the domicile of the person subject to the excise. that it may be exercised only within the territorial jurisdiction of the taxing authority (51 Am. is engaged in international airlines business. relied upon by petitioner in claiming the refund provides: S ec t i on 12 . 1993 ed. no DST is imposable on the same in the Philippines. The tax imposed under Ordinance No. Thus. sales or dealings in property. papers and loan agreements per se.79 as their final liability. 1993. the areas of transactions where it conducts its business are within Iloilo City limits. rules and r e g u l a t i o n s t o t h e c o n t r a r y notwithstanding. the prevailing provisions of Section 173 of the Tax Code did not cover documents executed abroad. 7660which became effective on January 14.6268 September 12. Uniformity. (2) the categorization is germane to achieve the legislature purpose. No matter what legal jargon is used. the said taxes are in fact taxes imposed on businesses or enterprises operating within the SSEZ. Second. their prompt and certain availability is of the essence. From1971 to1978.Under Sec. are to be treated alike both in privileges and liabilities. electric cooperatives of Agusan del Norte (ANECO. Extent of Government Control over Cooperatives. 1995. The extent of government control over electric cooperatives covered by PD269is largely a function of the role of the NEA as a primary source of funds of these electric cooperatives. The SNIT contained changes in the tax schedules and different treatment in the professionals which petitioners assail as unconstitutional for being isolative of the equal protection clause in the constitution. including franchise. while in the latter. issued by the then President Fidel Ramos on February 1. Sison.(c) not limited to the existing conditions only.and other municipalities contiguous to the base areas. to both present and future conditions. This classification is neither arbitrary nor inappropriate.193provides for the withdrawal of tax exemption privileges granted to all persons.00. through the United States Agency for International Development (USAID) with electric cooperatives as beneficiaries. in order to finance the electrification projects envisioned by PD 269. TAN v. Hence.non-profit electric cooperatives organized and existing under PD269. entered into six loan agreements with the government of the United States of America. Issue: Whether or not Sec1 of BP 135 impairs due process of law. Inc. prizes and other winnings (d) interest from bank deposits and yield or any other monetary benefit from deposit substitutes and from trust fund and similar arrangements (e) dividends and share of individual partner in the net profits if taxable partnership (f) adjustable gross income.193 and234of the LGC permit reasonable classification as these exemptions are not limited to existing conditions and apply equally to all members of the same class SISON v. ANCHETA 130 SCRA 654 July 25. Issue: Whether or not RA 7496 is unconstitutional.39of PD 269electric cooperatives shall be exempt from the payment of all National Governmental and Local government. (PHILRECA). the articles of cooperation of a cooperative applying for registration must be accompanied with the bonds of the accountable officers and a sworn statement of the treasurer elected by the subscribers showing that at least25% of the authorized share capital has been subscribed and at least25%of the total subscription has been paid and in no case shall the paid-up share capital be less than P2. has to be reconciled to assure the performance of vital state functions." This phrase belies petitioner's assertion that SSEZ is indeed a tax-free territory.asamended. does not mean that the exercise of the power by the local governments is beyond the regulation of Congress. It is the source of public funds. 00 0 . The Constitutional mandate that ³every local government unit shall enjoy local autonomy. whether natural or juridical. and only because it was better equipped to administer for the public welfare than any individual or groups and individual continue to lose their well-defined boundaries and to be absorbed within the activities that the government must undertake in the sovereign capacity if it is to meet the increasing social challenges of the times. DEL ROSARIO 237 SCRA 324 October 3. 1994 Topic: Equal Protection of Laws Facts: Petitioners challenge the constitutionality of RA 7496or the simplified income taxation scheme (SNIT) under Arts (26) and (28) and III (1). as amended. as amended. Petitioners allege that with the passage of the Local Government Code their tax exemptions have been validly withdrawn. under the Cooperative Code. (3) the law applies. SECRETARY 403 SCRA 558 June 10. substantial distinctions exist between cooperatives under PD269and those under RA 6938. b. thus: the areas which need to be left with private enterprise and initiative and which the government was called upon to enter optionally. which is virtually delineated in metes and bounds by Proclamation No.license or permit fees or taxes and any fees. The reason was clearly set forth by justice Makalintal. Finally. and (4) the classification applies equally well to all those belonging to the same class. charges. 1984 Topic: Classification of Taxpayers/Subject or Items to be Taxed Facts: Section 1 of BP 135 further amends Sec21 of NIRC of 1977. businesses and enterprises within the SSEZ are subjected to the said tax base on gross income. In the former. Sec. that it amounts to class legislation. flinger cordation . the Philippine Government.First. Held: The guaranty of the equal protection clause is not violated by a law based on a reasonable classification. The term "in lieu of paying taxes" as used in the law does not constitute an absolute exemption from taxation. amendments were primarily geared to expand the powers of NEA over the electric cooperatives o ensure that loans granted to them would be repaid to the government. In contrast. the government is the one that funds those so-called electric cooperatives. on inherent prerogative.and registered with the National Electrification Administration (NEA). 532. ANCHETA 130 SCRA 654 July 25. whileSec. Petitioners themselves admit that to qualify as a member of an electric cooperative under PD269. is in reality part of the territorial jurisdiction of the Philippines.The legislative intent is to increasingly shift the income tax system towards the scheduled approach in taxation of individual taxpayers and maintain the present global treatment on taxable corporations.193of the LGC is indicative of the legislative intent to vet broad taxing powers upon the local government units and to limit exemptions from local taxation to entities specifically provided therein. The power to tax. similarly situated. Issue: Whether or not the Local Government Code (under Sec. and municipal taxes and fee. However. The loan agreements contain similarly worded provisions on the tax application of the loan and any property or commodity acquired through the proceeds of the loan. We hold that there is reasonable classification under the Local Government Code to justify the different tax treatment between electric cooperatives covered by PD269 and electric cooperatives under RA6938. which provides of rates of tax on citizens or residents on(a)taxable compensation income (b) taxable net income (c) loyalties. the classification of tax-exempt entities in the Local Government Code is germane to the purpose of the law. Sec. Taxes. or costs involved in any court or administrative proceedings in which it may be party. all things being equal.(b) germane to the purpose of the law. While spared from national and local taxes. Individual aliens employed within the Subic Special Economic Zone (SSEZ) are not exempt from the awesome power of Philippine taxation especially so that they sourced out their earnings from within the Philippines.193 and234of the said code. except cooperatives duly registered under RA 6938. prizes and other winnings (d) interest from bank deposits and yield or any other monetary benefit from deposit substitutes and from trust fund and similar arrangements (e) dividends and share of individual partner in the net profits if taxable partnership (f) adjustable gross income. which provides of rates of tax on citizens or residents on(a)taxable compensation income (b) taxable net income (c) loyalties. does not offend classification as long as it rest on substantial distinctions.only the payment of a P5. and that it transgresses against the equal protection and PHILIPPINE RURAL ELECTRIC v. The other petitioners. Iloilo 1(ILECO1) and Isabela1(ISELCO1) are non-stock . the members make equitable contribution as source of funds Capital Contributions by Members Nowhere in PD269 does it require cooperatives to make equitable contributions to capital. It is manifest that the field of state activity has assumed a much wider scope. It is crystal clear that NEA incurred loans from various sources to finance the development and operations of these electric cooperatives. cooperatives under RA6938are envisioned to be self-sufficient and independent organizations with minimal government intervention or regulation. that it amounts to class legislation.234 exempts the same cooperatives from payment of real property tax. and that it transgresses against the equal protection and due process clauses of the 1987 Constitution as well as the rule requiring the uniformity in taxation. Held: Uniformity of taxation. Classification. PD269which are members of petitioner Philippine Rural Electric Cooperatives Association. merely requires that all subjects or objects of taxation. a class suit was filed by petitioners in their own behalf and in behalf of other electric cooperatives organized and existing under . as a taxpayer alleged that Sison is thereof unduly discriminated against him by the imposition of higher rate upon his income as a professional. it is incorrect to say that SSEZ is actually a tax-free territory. It is germane to the purpose of the law. Sison.00membership fee is required which is even refundable the moment the member is no longer interested in getting electric service from the cooperative or will transfer to another place outside the area covered by the cooperative. The secured area of SSEZ. 2003 Topic: Equal Protection of Laws Facts: On May23.193and234) violate the equal protection clause since the provisions unduly discriminate against petitioners who are duly registered cooperatives under PD269. and (d) apply equally to all members of the same class. to be reasonable must (a) rest on substantial classifications . as a taxpayer alleged that Sison is thereof unduly discriminated against him by the imposition of higher rate upon his income as a professional. like the kindered concept of equal protection. Consequently. 1984 Topic: Due Process of Law Facts: Section 1 of BP 135 further amends Sec21 of NIRC of 1977. Thus. being the lifeblood of the government. It is not limited to existing only and must apply equally to all members of the same class. petitioners assail the validity of Sec. Uniformity does not forfend classification as long as: (1)the standards that are used therefore are substantial and not arbitrary. Sec. acting through the National Economic council (now National Economic Development Authority) and the NEA . there is a need for more revenues. and no under RA6938or the Cooperatives Code of the Philippines. SISON v. Held: NO. Particularly. 2003. missionary organization at a minimal profit constitutes a curtailment of religious freedom and worship which is guaranteed by the constitution. 2003. Petitioners allege OSMEÑA v. On 29 May 1953. Issue: Is the American Bible Society Liable? Held: NO. including the beneficiaries thereof. real or personal. Under the assailed law. but the impairment must be substantial. petitioners assail the validity of Sec. the corresponding permit and license fees. whether natural or juridical.234 exempts the same cooperatives from payment of real property tax.license or permit fees or taxes and any fees. the law must affect a change in the rights of the parties with reference to each other and not with respect to non. charges. SECRETARY OF FINANCE 235 SCRA 630. It would not be just then to disregard the disparities by giving all of them zero deduction and discriminately impose on all alike the same tax rates on the basis of gross income. local government.8. firms. as amended.193 and234of the said code. when property is imperiled it is the lawmakers‘ judgment that commands respect. Inc.39of PD 269electric cooperatives shall be exempt from the payment of all National Government. plaintiff‘ s Philippine agency has been distributing and selling bibles and/or gospel portions thereof (except during the Japanese occupation) throughout the Philippines and translating the same into several Philippine dialects.asamended.8. including franchise. 1993 Topic: Prohibition Regarding Appropriation of Proceeds of Taxation Facts: Petitioner seeks to have Sec. in the total sum of P5. On the other hand. acting through the National Economic council (now National Economic Development Authority) and the NEA . From1971 to1978. it is enough that the classification must rest upon substantial distinctions that make real differences. entered into six loan agreements with the government of the United States of America. (PHILRECA). missionary corporation duly registered and doing business in the Philippines through its Philippine agency established in Manila in November 1898. and corporations placed in a similar situation PHILIPPINE RURAL ELECTRIC v. paragraph 1C of PD1956. press and religion. 2003 Topic: Prohibition Against Impairment of Obligations of Contracts Facts: On May23. the ERB is given the authority to impose additional amounts on petroleum products and to impose additional amounts to augment the resources of the fund. no tax exemption is granted therein. However. barter. As there is practically no overhead expense. in violation of Ordinance 3000. the lender or the beneficiary under the loan agreements as. Issue: Whether or not RA 7116 is unconstitutional. the withdrawal by the Local Government Code under Sec. Held: Taxpayer may be classified into different categories. as amended. CITY OF MANILA 101 PHIL 386 April 30. Issue: Whether or not there was no uniformity and equity in taxation as to the classification of taxpayer/ subject or items to be taxed. Held: NONE. as amended by EO 137 declared unconstitutional for being undue and invalid delegation of legislative power to the Energy regulatory Board. flinger cordation . the Philippine Government. The possible ―chilling effect‖ which it may have on the essential freedom of the mind and conscience and the need to assure that the channels of communication are open and operating importunately demand the exercise of this Court‘s power of review. it is enough that the statute or ordinance applies equally to all persons. Issue: Whether or not Sec. Plaintiff appealed to the CA. August 25. or exchanged of the goods and properties as well as on the sale of services.Under Sec. 1994 AMERICAN BIBLE SOCIETY v. American Bible Society. There is basis for passing upon claims that on its face the statue violates the guarantees of freedom of speech. In the case of the gross income taxation embodied in BP135. through the United States Agency for International Development (USAID) with electric cooperatives as beneficiaries. the income of such organization from any activity for profit or from any of their property. 1957 Topic: Prohibition Against Infringement of Religious Freedom Facts: Plaintiff-appellant. whileSec. . RA7116 seeks to wider the tax base of the existing VAT system and enhance it administration on by amending the NIRC. to constitute impairment. in the case of professionals in the practice of their calling and businessmen.parties.‖ Equity and uniformity in taxation means that all the taxable articles or kinds of properties of the same class be taxed at the same rate. The defendant-appellee. not as a trust account or a trust fund .non-profit electric cooperatives organized and existing under PD269. Issue: Whether or not there is an impairment of the obligations of contract. Sec. Held: NO. together with compromise covering the period from the 4th quarter of 1945 to the 2ndquarter of 1953. 7116 is unconstitutional as it violates the rule that taxes should be uniform and equitable. while continuing the system of net income taxation as regards professional and business income that with the passage of the Local Government Code their tax exemptions have been validly withdrawn. the change must not only impair the obligation of the existing contract. is a foreign. in fact. these taxpayers are not entitled to make deductions for income tax purposes because they are in the same situation more or less. TOLENTINO v. To fall within the prohibition. It seems clear that while the funds collected may be referred to as taxes.A.193provides for the withdrawal of tax exemption privileges granted to all persons. It is ingrained in jurisprudence that the constitutional prohibition on the impairment of the obligations of contracts does not prohibit every change in existing laws. is a municipal corporation with powers that are to be exercised in conformity with the provisions of RA 409. 3028 and 3364. without providing itself with the necessary Mayor‘s permit and municipal license. SECRETARY 403 SCRA 558 June 10. which in turn certified the case to the Supreme Court for the reason that the errors assigned involved only questions of law. The loan agreements contain similarly worded provisions on the tax application of the loan and any property or commodity acquired through the proceeds of the loan. except cooperatives duly registered under RA 6938. On 24 October 1953. or costs involved in any court or administrative proceedings in which it may be party. To satisfy this requirement. in order to finance the electrification projects envisioned by PD 269. CRTBA asserts that R. giving at the same time notice to the City Treasurer that suit would be taken in court to question the legality of the ordinances under which the said fees were being collected. and municipal taxes and fee. and required plaintiff to secure.and registered with the National Electrification Administration (NEA).and that if a special tax is collected for a special purpose it shall be treated as a special fund to be used only for the purpose indicated. the acting City Treasurer of the City of Manila informed plaintiff that it was conducting the business of general merchandise since November 1945.821. To repeat. paragraph 1C of PD1956. After hearing. The reason for this different treatment has been cogently stated by an eminent authority on constitutional law thus: ―When freedom of the mind is imperiled by law. City of Manila. There is. The other petitioners. (Revised Charter of the City of Manila). but obviously it does set up hierarchy of values within the due process clause. plaintiff paid to the defendant under protest the said permit and license fees. they are exacted in the exercise of the police power of the State. Taxpayers who are not recipients of compensation income are set apart as a class. The quoted provision under the loan agreement does not purport to grant any tax exemption in favor of any party to the contract. if any. which was done on the same date by filing the complaint that gave rise to this action. as amended by EO 137 is unconstitutional. it is freedom that commands a momentum of respect. a class suit was filed by petitioners in their own behalf and in behalf of other electric cooperatives organized and existing under PD269which are members of petitioner Philippine Rural Electric Cooperatives Association. the lower court dismissed the complaint for lack of merit. nonprofit. Held: NO. within 3 days. and Ordinances2529.45. He argue that the money collected pursuant to PD 1956 must be treated as a special fund. This dual standard may not be precisely reverse the presumption of constitutionality in civil liberties cases. Iloilo 1(ILECO1) and Isabela1(ISELCO1) are non-stock . There is simple justification then for the BP135 to adopt gross system of income taxation to compensation income. no justification for passing upon the claims that the law also violates the rule that taxation must be progressive and that it denies petitioner‘s right to due process and the equal protection of the laws. Particularly. Moreover. The taxing power has the authority to make reasonable and natural classifications for purposes of taxation. non-profit. In the course of its ministry. on the transactions under the loan agreements to the borrower and/or beneficiary of the loan. there is no uniformity in the costs or expenses necessary to produce their income. however. religious. non-stock. Thus. The provisions simply shift the tax burden.due process clauses of the 1987 Constitution as well as the rule requiring the uniformity in taxation. the discernible basis of classification is the susceptibility of the income to the application of generalized rules removing all deductible items for all taxpayers within the class and fixing set of reduced tax rates to be applied to all of them.193and234of the tax exemptions previously enjoyed by petitioners does not impair the obligation of the borrower. electric cooperatives of Agusan del Norte (ANECO. ORBOS 220 SCRA 703 March 31. regardless of the disposition made of such income is taxable Topic: Equal Protection of Laws Facts: The VAT is levied on the sale. A municipal license tax on the sale of bibles and religious articles by a non-stock. the practice is not without precedent. not because the second floor of the same is being used by the Director and his family for residential purposes. holding that the second floor of the building is being used by the director for residential purposes and that the ground floor used and rented by Northern Marketing Corporation. The tax collected is not in a pure exercise of the taxing power.R." the exemption does not apply to income derived "xxx from any of their properties. 130716 DECEMBER 9. reasonable emphasis has always been made that exemption extends to facilities which are incidental to and reasonably necessary for the accomplishment of the main purposes. the exemption claimed by the YMCA is expressly disallowed by the very wording of the last paragraph of then Section27 of the NIRC which mandates that the income of exempt organizations (such as the YMCA) from any of their properties. in the language of the statute. as a supplement to its basic protest. filed a letter dated October 8.‖ the fund nonetheless remains subject to scrutiny and review of the COA. offered the highest bid of P 6.1985. a commercial establishment. Under the 1935 Constitution. that while this Court allows a more liberal and non-restrictive interpretation of the phrase ―exclusively used for educational purposes‖ as provided for in Article VI. who are sugarcane planters planting and milling their sugarcane in different mill districts of Negros Occidental. while the use of the second floor of the main building in the case at bar for residential purposes of Director and his family. al. The character of the Stabilization Fund as a special fund is emphasized by the fact that the funds are deposited in the Philippine National Bank and not in the Philippine Treasury. for deficiency income tax. The trial court ruled for the government. paragraph 3 of the Philippine Constitution. PHILSUCOM and SRA argued that no trust results and that the stabilization fees collected are considered government funds. real or personal. nor by jurisprudence. which is complementary to the main or primary purpose—educational. Jr. since they have common cause with petitioners and respondents having interposed no objection to their intervention. in the total amount of P415. Otherwise stated. or from any of their activities conducted for profit. INC. 140. 388). be subject to the tax imposed by the same Code. to be. the sale being held on the same day. the trial court correctly arrived at the conclusion that the school building as well as the lot where it is built. moneys from which may be paid out only in pursuance of an appropriation made by law.31. planters and millers and intervenors Angel Severino. Charitable Entities and Educational Entities Facts: Petitioner Abra Valley College is an educational corporation and institution of higher learning duly incorporated with the SEC in 1948. The Court is satisfied that these measures comply with the constitutional description of a special fund. who have come to this Court in their individual capacities and in representation of other sugar producers. Paterno Millare. On 6 July 1972. should be taxed. the use of the school building or lot for commercial purposes is neither contemplated by law. The Commissioner of Internal Revenue issued an assessment to private respondent.. 1996. 7[b]. 98 Phil. v. The stabilization fees in question are levied by the State upon sugar millers. the Court is duty-bound to abide strictly by its literal meaning and to refrain from resorting to any convoluted attempt at construction ABRA VALLEY COLLEGE. especially the young people." almost Identical to the "Sugar Adjustment and Stabilization Fund" created under Section 6 of Commonwealth Act 567.140.D. "and all its components. It must be stresses however. the Commissioner denied the claims of YMCA. if not illegal. educational and charitable objectives. deficiency expanded withholding taxes on rentals and professional fees and deficiency withholding tax on wages. as a rule. the parties entered into a stipulation of facts adopted and embodied by the trial court in its questioned decision.non-profit institution.finding merit in YMCA‘s motion for reconsideration.. it is only fair that half of the assessed tax be returned to the school involved. millers and planters. to provide means for the stabilization of the sugar industry. the Bank). No. the appellate court reversed itself and promulgated the first assessed resolution dated September 28. the exemption claimed by the YMCA is expressly disallowed by the very wording of the last paragraph of then Section27 of the NIRC which mandates that the income of exempt organizations (such as the YMCA) from any of their properties. and while it is placed in what the law refers to as a ―trust liability account." including the foreign market the industry being of vital importance to the country's economy and to national interest. Issue: Whether or not the YMCA is exempted from rental income derived from the lease of its properties. Section 22. In the instant case." a "Development and Stabilization Fund. public auction involving the sale of the college lot and building. Held: Petitioner argues that while the income received by the organizations enumerated in Section27 (now Section26) of the NIRC is. sugarcane planters and millers. and that the funds were channeled to the purchase of shares of stock in respondent Bank do not convert the funds into a trust fired for their benefit nor make them the beneficial owners of the shares so purchased. even though they are held for a special purpose. "administered in trust' for the purpose intended. which is within the power of the State to impose for the promotion of the sugar industry (Lutz vs. for short) which was superseded by its co-respondent Sugar Regulatory Administration (SRA.YMCA filed a petition for review at the Court of Tax Appeals. On 12 April 1973. a commercial banking corporation. if any. 1998 Topic: Prohibition Against Taxation of Non-Stock . filed with the Supreme Court a petition praying for a Writ of mandamus to order respondent Philippine Sugar Commission (PHILSUCOM. since only apportion is used for purposes of commerce. who are the true and beneficial owners thereof. In reply. pursuant to its religious. However . The levy is primarily in the exercise of the police power of the State. exempted from the payment of tax "in respect to income received by them as such. 1988 Topic: Prohibition Regarding Appropriation of Proceeds of Taxation Facts: Petitioners who are sugar producers. planters and millers. To rule in petitioners' favor would contravene the general principle that revenues derived from taxes cannot be used for purely private purposes or for the exclusive benefit of private persons.01including surcharge and interest. real or personal. Non-Profit Educational Institutions Facts: Private Respondent YMCA is a non-stock .000 on CHAVEZ v. Araneta. The Commissioner elevated the case to the Court of Appeals which initially decided in its favor by reinstating the assessment of deficiency fixed.1995grantingsaid motion of YMCA by affirming the CTA‘s decision in toto. Held: The test of exemption from taxation is the use of the property for purposes mentioned in the Constitution.615. be subject to the tax imposed by the same Code. were allowed to intervene by the Court. Once the purpose has been fulfilled or abandoned. Issue: Whether the stabilization fees collected from sugar planters and millers pursuant to Section 7 of P. Issue: Whether or not the college lot and building of the petitioner are not exempt from property taxes and ordering petitioner to pay 5. the balance. for non-payment of real estate taxes and penalties amounting to P5. It is but rational that the fees be collected from them since it is also they who are to be benefited from the expenditure of the funds derived from it. Thus. Abra. but because the first floor thereof is being used for commercial purposes. respectively) and issued a Notice of Seizure upon the petitioner for the college lot and building (OCT Q-83) for the satisfaction of said taxes thereon. PCGG G. et. may find justification under the concept of incidental use. 1998 . then municipal mayor of Bangued. Dr.31 as realty taxes. On February29. the Municipal and Provincial treasurers (Gaspar Bosque and Armin Cariaga. which conducts various programs and activities that are beneficial to the public. stabilization of the domestic market including the foreign market the fact that the State has taken possession of moneys pursuant to law is sufficient to constitute them state funds. for brevity) and Republic Planters Bank (briefly. COURT OFAPPEALS 29 SCRA 83 October 14. contractor‘s and income taxes. Indeed. Abra. They constitute sugar liens (Sec. That the fees were collected from sugar producers. contract of Appeals which initially decided in its favor by reinstating the assessment of deficiency fixed. Private respondent formally protested the assessment and. The Stabilization Fund is to be utilized for the benefit of the entire sugar industry. However.Moreover. The certificate of sale was correspondingly issued to him. stabilization of the domestic market. Having been levied for a special purpose. real or personal. that the OPSF is a special fund is plain from the general fund. The collections made accrue to a "Special Fund. COMMISIONER OF INTERNAL REVENUE v. REPUBLIC PLANTERS BANK 158 SCRA 626 March 15. The CTA ruled in favor of the YMCA. 388 are funds in trust for them. 148). The treasurers served upon the petitioner a Notice of Sale on 8 July 1972. GASTON v. the lease of the first floor thereof to the Northern Marketing Corporation cannot by any stretch of the imagination be considered incidental to the purpose of education. regardless of the disposition made of such income xxx" We agree with the commissioner. The petitioner filed a complaint on 10 July 1972 in the court a quo to annul and declare void the Notice of Seizure and the Notice of Sale of its lot and building located at Bangued. is to be transferred to the general funds of the Government. No. the revenues collected are to be treated as a special fund.the Court of Appeals denied the Commissioner‘s motion for reconsideration. 1988 Topic: Prohibition Against Taxation on Religious. It is levied with a regulatory purpose. and thus the property is not being used exclusively for educational purposes.D. or public funds Held: The Supreme Court held that the stabilization fees collected are in the nature of a tax which constitutes public funds. that the transfer of shares of stock from PHILSUCOM to the sugar producers would be irregular. P. Because the last paragraph of said section unequivocally subjects to tax the rent income of the YMCA from its real property. AQUINO 162 SCRA 113 June 15. NO. implement the privatization of the Bank by the transfer and distribution of the shares of stock of the said Bank which is in the name of PHILSUCOM to the sugar producers. planters and producers for a special purpose that of "financing the growth and development of the sugar industry and all its components. PNOC-EDC's motion for reconsideration was denied. Herrera. a "General Provision. As passed. hence. Joseph Estrada. 7 Special Provisions and Section 55. Alfredo Bengson. therefore. CITY OF KIDAPAWAN G. the Petition for Prohibition/ Mandamus was filed by Neptali A. Held: We agree with PNOC-EDC that its machineries. Guillermo Carague. 87636. Santanina Rasul. The personal liability for the tax delinquency. of the General Appropriation Bill of 1989 (H. counters that the issue in the present case is a political question beyond the power of this Court to determine. Section 27 of the 1987 Constitution. infrastructures and machineries of PNOC-EDC to satisfy the payment of the real property tax delinquency. The local government unit . exploitation. Thus. However. PNOC-EDC is the beneficial user. The petitioner a former solicitor general. or utilization of the country's geothermal resources. Section 25 [5] of the 1987 Constitution." were vetoed. MACARAIG G. Paragraph (2) is what is referred to as the item-veto power or the line-veto power. Jr. whether the machineries. particularly Section 55.. it could not be sold at public auction. the Senate.. article III of the Philippine Constitution. and that the President is empowered by the Constitution to veto provisions or other "distinct and severable parts" of an Appropriations Bill. 853 [5] which excluded certain portions of the land embraced in the Mt.Topic: Others: Grant of Tax Exemptions Facts: Chavez a taxpayer was impleed to bring this action for prohibition due to several news reports bannered in a number of broadsheets sometime in September 1997. to exclusively conduct geothermal operations within the MAGRA. Jovito R. the personal liability is on any person who has such beneficial or actual use at the time of the accrual of the tax. and because of the satisfaction of the two basic requisites laid down by decisional law to sustain petitioner's standing i. she cannot exercise the item-veto power but should veto the entire bill. NO. Alvarez. buildings and other infrastructures found in MAGRA cannot be levied upon and sold at public auction to satisfy the alleged tax delinquency because the warrant of levy shows that MAGRA is the only delinquent real property subject to tax. Apo National Park which has not been re-classified as alienable agricultural land. covering the tax period from 1993-2002. buildings and other infrastructures found in MAGRA may be levied. a government owned or controlled corporation created and existing under the Corporation Code. Jose Concepcion. he sent a notice of sale of delinquent real property to PNOC-EDC declaring that delinquent real property will be sold through public auction.R. The trial court found that PNOC-EDC is not exempt from paying the real property taxes and that the MAGRA is part of the Mt. in Resolution 381 ("Authorizing and Directing the Committee on Finance to Bring in the Name of the Senate of the Philippines the Proper Suit with the Supreme Court of the Philippines contesting the Constitutionality of the Veto by the President of Special and General Provisions. and declared the same to have become RA 6688. development. The Solicitor General. Jr. PNOC-EDC built a 104-megawatt power plant within the MAGRA which produces electricity through turbines using steam extracted from the MAGRA as fuel. Jr. and 2) the reported execution of a compromise between the government through PCGG and the Marcos heirs on how to split these assets. or when the assessment is made on the basis of the actual use thereof. Congress passed House Bill 19186. management or other forms of assistance with qualified domestic and foreign entities. the machineries. and seeking to enjoin Catalino Macaraig. Under the contract. he issued a warrant of levy on the 701-hectare MAGRA for failure to pay real property taxes. Juan Ponce Enrile. Revenue. Marcos issued Presidential Decree (PD) No. Tañada. therefore. Edgardo J. not being in the nature of public dominion. City Treasurer of Kidapawan. that Section 55 is a "rider" because it is extraneous to the Appropriations Act and. Tariff bills by the President Facts: On 16 December 1988. merits the President's veto. 166651 DECEMBER 9. however. Orlando S. has to be provided for by law and. and (2) by judicial action. Rosalina Cajucom and Eufemio C. assailing mainly the constitutionality or legality of the Presidential veto of Section 55. therefore. technology and financing for the geothermal operations subject to the direct supervision of the DOE. Luis Santos. It is owned by the government and thus.'s cause is anchored on the following grounds: (1) the President's line-veto power as regards appropriation bills is limited to item/s and does not cover provision/s. On 11 April 1989. Agapito A. Raul Manglapus. is a Filipino citizen. Vicente T. Congress is also vested with the prerogative to impose restrictions on the exercise of that power. Alberto G. Wigberto E. In the process. Aquino issued Proclamation No.. Ernesto M." with a prayer for the issuance of a Writ of Preliminary Injunction and Restraining Order. Thereafter. Issue: Whether PNOC-EDC is liable to pay the real property taxes. Gonzales. Petitioner. Aquilino Pimentel. On 29 December 1988. Tamano. 1442 which allowed the government to enter into service contracts for financial. Domingo from implementing RA 6688. in violation of the doctrine of separation of powers. Saguisag. as amended by RA 6670 (4 August 1988). John Osmeña. the tax liability is imposed on the beneficial use of the real property such as those owned but leased to private persons or entities by the government. Paterno. Ernesto F. Lourdes Quisumbing. Romulo. is generally on whoever is the owner of the real property at the time the tax accrues. Respondents have two remedies for the collection of real property tax: (1) by administrative action through levy on real property. as members and ex-officio members of the Committee on Finance of the Senate and as "substantial taxpayers whose vital interests may be affected by this case. Paragraph (1) refers to the general veto power of the President and if exercised would result in the veto of the entire bill. Under Sections 257 and 258 of the LGC. they can only enforce the collection of real property tax through civil action. (3) the itemveto power does not carry with it the power to strike out conditions or restrictions for that would be legislation. NO. However. technical. Cotabato notified PNOC-EDC of its tax delinquency after which. the President signed the Bill into law. Guingona. however. The respondents argued that the action was premature since he has not shown that he had asked the respondents to disclose the negotiations and agreements before filing the case. Jose D.e (1) ENFORCEMENT OF A LEGAL RIGHT (2) ESPOUSED BY A FILIPINO CITIZEN concerned may also enforce the collection of the basic real property tax by civil action in any court of competent jurisdiction. GONZALES v. Respondents levied on a portion of the MAGRA to satisfy the tax delinquency of PNOC-EDC. cannot be sold at public auction. instituted a case against public respondent to make public any negotiations and/or agreements pertaining to the latter's task of recovering the Marcoses' ill-gotten wealth. the people are regarded as the real parties in interest and because it is sufficient that petitioner is a citizen and as such is interested in the execution of laws he need not to show that he has any legal or special interest in the result of the action. Jr. for the exploration. No. this petition. had a political remedy. Issue Whether the President exceeded the item-veto power accorded by the Constitution (Whether the President has the power to veto "provisions" of an Appropriations Bill) Held: NO.. Issue: Does the petitioner have the personality or legal standing to file the instant petition? Held: The petitioner has the actual interest or legal interest to file the instant petition. as a general rule. Mita Pardo De Tavera. Vicente Jayme. Likewise. equipment and other infrastructures in the MAGRA cannot be levied and sold at public auction because it is not the property that is subject to the tax. she exceeded her authority when she vetoed Section 55 (FY '89) and Section 16 (FY '90) which are provisions. 1992. As anchored in Tanada vs Tuvera. Lina. The veto power of the President is expressed in Article VI. then President Corazon C. 19186) and For Other Purposes") was adopted.R. or the General Appropriations Bill for the Fiscal Year 1989. Fiorello Estuar. No Restraining Order was issued by the Supreme Court. and whether the assessment has become final and executory. as counsel for Macaraig et al. Mercado. that Gonzales et al. The instant petition is anchored on the right of the people to information and access to government records. On January 30. Rainerio Reyes. where. On March 24. documents and papers.. when the issue concerns a public right and object of mandamus is to obtain the enforcement of public duty. Fulgencio Factoran. now referred to as the MAGRA. (2) when the President objects to a provision of an appropriation bill. and (4) the power of augmentation in Article VI. 1992. Carlos Dominguez. specifically Sections 44 and 45 of PD 1177. Teofisto T. 19 NOVEMBER 1990 Topic: Veto of Appropriation. may be validly levied and sold at public auction to satisfy the payment of realty tax delinquencies. Victor Ziga. Pursuant to the constitutional provision on the passage of bills. equipment. the PNOC-EDC would furnish the necessary services. Respondents however are DIRECTED to refrain from levying on the buildings. PNOC-EDC liable to pay the real property tax accruing from its use of the MAGRA. Salonga. Angara.B. it eliminated or decreased certain items included in the proposed budget submitted by the President. the land being levied is classified as inalienable. the trial court ordered that the improvements on the subject land. It allows the exercise of the veto over a particular item REPUBLIC OF THE PHILIPPINES v. Congress presented the said Bill to the President for consideration and approval. Heherson T. that the power of the President to augment items in the appropriations for the executive branches had already been provided for in the Budget Law. Rene A. since respondents cannot avail of the administrative remedy through levy. Apo National Park and declared the same as geothermal reservation under the administration of the PNOC. Gonzales et al. which was to override the veto. Aquino. the basic real property tax constitutes as a lien on the property subject to the tax which may be levied upon through the issuance of a warrant. Thereafter. Sotero Laurel. 2005 Topic: Others: Grant of Tax Exemptions Facts: President Ferdinand E. On 2 February 1989. In the case at bar. Leticia Ramos-Shahani. These news items refeered to are 1) the alleged discovery of billions of dollars of Marcos assets deposited in various coded accounts in Swiss banks.a right guaranteed under section 7. equipment. the government through the Office of Energy Affairs (now Department of Energy. DOE) entered into a service contract ] with PNOC-EDC. Mamintal Abdul J. Maceda. within thirty days upon receipt thereof. the aggrieved party contents the same in a court of competent jurisdiction‖. The power of augmentation from savings. which states that "The decision of the Secretary of Justice shall be final and executory unless. the power given the executive to disapprove any item or items in an Appropriations Bill does not grant the authority to veto a part of an item and to approve the remaining portion of the same item.S. that the President may not veto a provision without vetoing the entire bill not only disregards the basic principle that a distinct and severable part of a bill may be the subject of a separate veto but also overlooks the Constitutional mandate that any provision in the general appropriations bill shall relate specifically to some particular appropriation therein and that any such provision shall be limited in its operation to the appropriation to which it relates. Letters of Authority were issued to BIR officers to examine the books of accounts and other accounting records of Miladay Jewels. Inc. III Sec. Mandaue City Ordinance No. whether or not it has been passed according to the procedures laid down by law. SAN MIGUEL CORP v. revenue or tariff bills. the petitioners impugn the decision in question by asserting that there was no showing that the tax laws on jewelry are confiscatory and desctructive of private respondents proprietary rights. COMMISSIONER v. then it is not only the power but the duty of the Court to resolve such a question. What it simply provides is that Congress shall "evolve a progressive system of taxation. of which there are 10 in all. Article III of the Constitution which states. Regional Trial Courts can only look into the validity of a provision. 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. the suit for collection was not the appeal allowed by the law. Solid Gold International Traders. Mr. the challenged ordinance was deemed ―of doubtful validity‖.BIR requested the establishment not to sell the articles until it can be proven that the necessarytaxes thereon have been paid. . Petitioners assail the decision rendered by the public respondent. As specified. Sec 150 (a) of NIR Code : ―Non-essential goods—There shall be levied. It is imposed on the sale. It is a legislative authorization of receipts and expenditures.or items in an appropriation.. the Senate may propose an entirely new bill as a substitute measure. The motions. the proper subjects of taxation in our own country. Held: 1. Whether or not there is an impairment of obligation of contracts under Art. when the case appealed to the Secretary Justice. Noteworthy is the fact that the power to augment from savings lies dormant until authorized by law. Section 25 (5) of the Constitution. object (purpose). NO. Whether or not there is violation of the due process clause under Art. 3.R. . 10 of the Constitution. SANTOS G. 1988 : BIR Director Viray issued Regl. The validity of a statute.A. 292 U. Whether or not R. Hans Brumann agreed and signed said order. To construe Section 47 narrowly would be to raise a serious constitutional question.A." under the circumstances a term vague and ambiguous. Issue: WON the courts are ousted its jurisdiction over questions of law because the mode of appeal by the Respondent city was improper. The Constitution does not really prohibit the imposition of indirect taxes which.R. and private bills must "originate exclusively in the House of Representatives. San Miguel filed a petition for certiorari and prohibition to oppose the suit and have it dismissed. bills authorizing increase of the public debt. 115455 OCTOBER 30. can by no means be considered a specific appropriation of money. However. It is not a tax on the exercise of a privilege. they impair the constitutional and statutory authority of the President and other key officials to augment any item or any appropriation from savings in the interest of expediency and efficiency. For it would in effect bar what otherwise would be a proper case cognizable by a court precisely is the exercise of the conceded power of judicial review just because the procedure contended for which is that of an "appeal. the law could take back the privilege anytime without offense to the Constitution. Since the law granted the press a privilege. 4. 252). like the VAT. 2. 1 of the Constitution. that is." it also adds. 1988 to present.. 24 of the Constitution. are regressive. or exemption. and does not relate to the entire bill. Issues: Whether or not R. NO. or property without due process of law . a provision in an Appropriations Bill is limited in its operation to some particular appropriation to which it relates. Mercelles. much less a constitutional right. cannot subscribe to the theory that the tax rates of other countries should be used as a yardstick in determining what may be TOLENTINO v. 97. the President may not veto less than all of an item of an Appropriations Bill. in the true sense of the term. More importantly. SECRETARY OF FINANCE G. bills of local application. since with the legislature primarily lies the discretion to determine the nature (kind). is illegal and void because it imposed a specific tax beyond its territorial jurisdiction. otherwise known as the Expanded Value-Added Tax Law. and thus cannot inquire as to the reasons for its existence. 28 (1) of the Constitution. the sourcing to come only from savings. extent (rate). Secretary of Justice." In the exercise of this power. AVELINO G. 1997 Topic: Non-impairment of the Jurisdiction of the Supreme Court Facts: Aug 5. It claimed that under Section 47.. 7716 did not "originate exclusively" in the House of Representatives as required by Art. as follows: No person shall be deprived of the life. 119252.R. 7716. an executive order or ordinance is a matter for the judiciary to decide and that whenever in the disposition of a pending case such a question becomes unavoidable. infringe no constitutional limitation. Hans Brumann and Diagem Trading Corporation for stocktaking/investigation for excise tax for the period January 1. revenue. Marco & Co. lease or exchange of goods or properties or the sale or exchange of services and the lease of properties purely for revenue purposes. While Art. 410. Whether or not there is violation of the rule on taxation under Art. It is inherent in the power to tax that the State be free to select the subjects of taxation. 57 S. It should be pointed out that in imposing the aforementioned taxes and duties. In addition. 1995 Topics: Revenue Bills Shall Originate from the House of Representatives Infringement of Press Freedom Grant of Franchise Facts: Motions were filed seeking reconsideration of the Supreme Court decision dismissing the petitions for the declaration of unconstitutionality of R. coverage (subjects) and situs (place) of taxation. on the other hand.. the leeway granted being delimited to transfers within the department or branch concerned. The VAT is not a license tax. It is a non-appropriation item inserted in an appropriation measure. He never filed aprotest on the preventive embargo. No. net of the excise tax and value added tax…‖ (Jewelry is considered non-essential good) RTC finds the questioned statutory provisions confiscatory and destructive of the proprietary right of the petitioners to engage in business in violation of Section 1. This is because the eliminated proviso merely pronounces the basic principle that a distinct and severable part of a bill may be the subject of a separate veto. however. liberty. acting through the legislative and executive branches. The validity of the ordinance was sustained by the City Fiscal. barter. 109-88 to conduct surveillance. Held: NO. 7716 is violative of press freedom and religious freedom under Art. This Court. Brumann did not produce the documents. and it has been repeatedly held that inequalities which result from singling out of one particular class for taxation. Inc. The exercise of such authority in respect of disapproved or reduced items by no means vests in the Executive the power to rewrite the entire budget. III Sec. This was on the ground that Section 12(e) (7) in relation to Section 12(e) (1) and (2). The President promptly vetoed Section 55 (FY '89) and Section 16 (FY '90) because they nullify the authority of the Chief Executive and heads of different branches of government to augment any item in the General Appropriations Law for their respective offices from savings in other items of their respective appropriations. VI Sec. Macaraig. the State. An Appropriations Bill is "one the primary and specific aim of which is to make appropriation of money from the public treasury" (Bengzon v. 24 provides that all appropriation. monitoring and inventory of all imported articles of Hans Brumann Inc. 1979 Topic: Non-impairment of the Jurisdiction of the Supreme Court Facts: San Miguel challenged the existing Ordinance of the Tax Code of the City of Mandaue. AUGUST 18. or tariff bill. contended the constitutionality of Sec 150 (a) of NIR Code & prayed that CIR and Customs be enjoined from issuing mission orders. Mission Order No. was not followed. VI Sec. III Secs. Notwithstanding the elimination in Article VI. The restrictive interpretation urged by Gonzales et al. Inc. Section 27 (2) of the 1987 Constitution of any reference to the veto of a provision. After said surveillance. the extent of the President's veto power as previously defined by the 1935 Constitution has not changed. contending that the latter has no authority to pass judgment upon the taxation policy of the government. Respondent City filed a suit for collection on the issue of the validity of the ordinance which had the effect of questioning the opinion of the Justice Secretary. It is to the legislature that they must resort to for relief. No. The trial court is not the proper forum for the ventilation of the issues raised by the private respondents. have been filed by the several petitioners in these cases. No. is exercising its sovereign prerogative. When Sections 55 (FY '89) and 16 (FY '90) prohibit the restoration or increase by augmentation of appropriations disapproved or reduced by Congress.Ct. In other words." Contracts must be understood as having been made in reference to the possible exercise of the rightful authority of the government and no obligation of contract can extend to the defeat of that authority. L-39699 MARCH 14. In other words. Issue: Whether or not the judgment rendered by the RTC judge is valid rendering the provisions of the Code in violation of the constitution. "but the Senate may propose or concur with amendments. for such a special power as that of augmentation from savings. NO. the same is merely incorporated in the General Appropriations Bill.A. 4 and 5 of the Constitution. Held: No. VI Sec. as guaranteed by Article VI. assessed and collected a tax equivalent to 20% based onthe wholesale price or the value of importation used by the Bureau of Customs in determiningtariff & custom duties. WELLS FARGO BANK & UNION TRUST COMPANY v. Originally. It did not have flight operations in the Philippines. California. 1949. including penalties and other increments at P77. Sec 20 of the 1977 Tax Code defines a resident foreign corporation as a foreign corporation engaged in trade or business within the Philippines or having an office or place of business therein. THE COLLECTOR OF INTERNAL REVENUE G. was born in Santa Cruz. P12.R. On the alleged violation of due process. Cash in the banks in the United States. California. therefore. P24. he was connected with the public school system. We are told that it is our duty under Art. Issue: Whether or not that Miller during his long stay in the Philippines had required a "residence" in this country. 1968 Topic: Instances of Double Taxation in its Broad Sense Facts: The municipal board of Iloilo City enacted Ordinance 86. 2. This assessment was appealed by De Lara as Ancilliary Administrator before the Board of Tax Appeals. Miller. owners of 4 tenement houses containing 34 apartments. California. Said court subsequently issued an order and decree of settlement of final account and final distribution. BOAC was engaged in business in the Philippines through a local agent during the period covered by the CIR‘s assessments. in 1883. 3) tenement house. (Sec 24(b). Real property situated in Burlingame. which was received by the said executor on April 3. been relaxed. No. Thereafter ancilliary proceedings were filed by the executors of the will before the Court of First Instance of Manila. Collector.S. 1987 Topic: Situs of Taxation and Double Taxation: Situs of Subjects of Taxation Facts: Commissioner of Internal Revenue (CIR) questioned a ruling by the Court of Tax Appeals wherein the CTA set aside the CIR‘s assessment of deficiency income taxes against respondent British Overseas Airways Corporation (BOAC). admitted to probate the will of Miller was probated in the California court. Stocks in U. – Held: Yes. State of California" at the time of his death in 1944. Shares of stock in Philippine Corporations. reporting a liability of P269. From 1906 to 1917. and they were in the possession of the secretary of the Benguet Corporation. Issue: Situs of subjects of taxation of shares of stocks. VIII. it did not carry passengers or cargo. it must constitute income from Philippine sources (see previous paragraph) 4. 1946. And besides. an American citizen. L-46720 June 28. Upon the recognition of the inherent power of each government to tax persons. it maintained a general sales agent." This duty can only arise if an actual case or controversy is before us. Said shares were already subjected to inheritance taxes in California and are now being taxed by Philippine authorities. Iznart Aldequer. U. the sale of the tickets in the Philippines is the source of income. Miller owned the following properties: Real Property situated in Ben-Lomond. among others. An ordinance imposing a municipal tax on tenement houses was challenged because the owners already pay real estate taxes and also income taxes under the NIRC. while having no flight operations in the Philippines. 2. 2) tenement house. it is sufficient that the income is derived from activity within the Philippines. It did not have landing rights in the Philippines nor was it granted a certificate of public convenience by the Civil Aeronautics Board. Basa. COMMISSIONER OF INTERNAL REVENUE v. adjudication would be no different from the giving of advisory opinion that does not really settle legal issues. Savings Bonds. as of January 16. Otherwise. wherein it found that Miller was a "resident of the County of Santa Cruz.M. co-executor named in Miller's will. The validity and constitutionality of this ordinance were challenged by the spouses Villanueva. This is. Tax Code as amended 3. and cannot be applied if to do so would result in inescapable and patent injustice. distinct relationships which may be entered into with respect thereto.S. hardship to taxpayers alone is not an adequate justification for adjudicating abstract issues. the Bank of America.S. a single location in space is hardly possible. later retiring under the Osmeiia Retirement Act. Held: The Supreme Court did not subject to estate and inheritance taxes the shares of stock issued by Philippine corporations which were left by a nonresident alien after his death. BOAC is a UK government-owned corporation engaged in the international airline business. is taxable. considering the multiple. The estate of Miller protested the assessment of the liability for estate and inheritance taxes. 1954. filed an estate and inheritance tax return with the Collector. an exception to the decision of the Supreme Court in Wells Fargo v. WON BOAC is a resident foreign corporation. Upon the principle that as to intangibles. The maxim mobilia sequuntur personam. 2. P25.27 for inheritance taxes.R. properties and rights within its jurisdiction and enjoying the protection of its laws. in the course of which Miller's will of January 17. The secretary had the right to vote. Sec. The actual situs of the shares of stock is in the Philippines. (Warner Barnes and Co. VILLANUEVA v. 1 (2) to decide whenever a claim is made that "there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the government. But this rule has. WON the revenue derived by BOAC from sales of its tickets. Eye extended in the Philippines her activities re: her intangible personal property so as to avail herself of the protection and benefits of the Philippine laws. the revenue constitutes income from Philippine sources so it is taxable. No. Issues: 1. At the time of his death in 1944. Testate proceedings were instituted before the Court of California in Santa Cruz County. his estate is entitled to exemption from inheritance tax on the intangible personal property found in the Philippines. upon which the rules rests. at first then Qantas Airways) The agent sold BOAC tickets covering passengers and cargoes. at the time of his death. 1940 Topic: Situs of Taxation and Double Taxation: Situs of Subjects of Taxation Facts: This case involves the collection of inheritance taxes on shares of stock issued by the Benguet Consolidated Mining Corporation and owned by Lillian Eye. the Collector assessed estate and inheritance taxes. Held: The relaxation of the original rule rests on either of two fundamental considerations: 1. first as a teacher and later as a division superintendent of schools. BOAC is a resident corporation doing business in the Philippines. which otherwise would subject a decedent‘s intangible personal property to the inheritance tax both in his place of residence and domicile and the place where those properties are found. partly or wholly engaged in business in any other streets. 6. Income is broadly and comprehensively defined as cash received or its equivalent or the amount of money comint to a person within a specific time.R. No. On July 29. In 1905..43 for taxes and P230. partly or wholly engaged in or dedicated to business in the streets of J. (tax scheme is different for a nonresident foreign corporation) – Yes.5. actual presence and control elsewhere. San Mateo. For all practical purposes. No. Tangible Personal property. However. activity or service that produced the income. This has since been incorporated in Section 104 of the NIRC. Santa Cruz. 1950. L-9456 Topics: Multiplicity of Situs Double Taxation Facts: Hugo H. This exemption is granted to non-residents to reduce the burden of multiple taxation.00anually. (2). 5. covering only the shares of stock issued by Philippines corporations. . After due investigation.00 per apartment. L-65773-74 April 30. the corporation being domiciled therein. the secretary had legal title to the certificates of stock held in trust for Eye. imposing license tax fees as follows: 1) tenement house. which appeal was later heard and decided by the Court of Tax Appeals. has been decried as a mere fiction of law having its origin in considerations of general convenience and public policy and cannot be applied to limit or control the right of the State to tax property within its jurisdiction. The situs of the source of payments is the Philippines. 1946. or Issue: Whether or not there is double taxation. It must yield to established fact of legal ownership. 1941 was admitted to probate on May 10. Tax Code provides that for revenue to be taxable. California. Source of an income is the property. For the source to be considered as from the Philippines.00 per apartment.R. Accounts Receivable from various persons in the United States including notes.300. It is a resident foreign corporation subject to tax upon its total net income received in the preceding taxable year from all sources within the Philippines. L-26521 December 28. 1. CITY OF ILOILO G.92. COLLECTOR OF INTERNAL REVENUE v. BRITISH OVERSEAS AIRWAYS CORPORATION G. In this case. which court by order of November 21. collect dividends. Considering that he is a resident of a foreign country.A. the certificates of stock have remained in this country up to the time when the deceased died in California. DE LARA G. the settled law in the United States is that intangibles have only one situs for the purpose of inheritance tax – the domicile of the decedent at the time of death. Corporations and U. he came to the Philippines. National Trust and Savings Association of San Francisco California. also found that Miller was a resident of Santa Cruz. of late. 1960.Ruling: The Supreme Court held that there was no double taxation. valid and subsisting. No.354. a complaint having been filed against him by the City Attorney of Baguio for his failure to pay the amount of P300 as license fee covering the period from the first quarter of 1958 to the fourth quarter of 1962.on the sums withheld by the Bangko Sentral ng Pilipinas as final withholding tax on CBC‘s passive interest income in 1994. and held defendant-appellant liable for the fees therein prescribed as a real estate dealer." Issue: Whether or not there is double taxation. In a 1947 decision. The plaintiff filed a complaint for the recovery of the total amount of P14.82 . The lower court was of a different mind. violative of the uniformity required by the Constitution and the law. there has been a firm and unyielding insistence by defendant-appellant of the lack of jurisdiction of the City Court of Baguio. v. for the same purpose.000. 6. It is true that the uniformity essential to the valid exercise of the power of taxation does not require identity or equality under all circumstances. 1968 Topic: Constitutionality of Double Taxation Facts: City of Baguio imposing a license fee on any person. it being widely recognized that there is nothing inherently obnoxious in the requirement that license fees or taxes be exacted with respect to the same occupation. the City of Butuan enacted Ordinance No. also. The 14th Amendment [the due process clause] no more forbids double taxation than it does doubling the amount of a tax. unreasonable and oppressive" CHINA BANKING v. be reasonable and this requirement is not deemed satisfied unless: (1) it is based upon substantial distinctions which make real differences. The Commissioner contended that the term ―gross receipts‖ means the entire income or receipt. the statute must be sustained even though double taxation results. and that there is a failure to observe the mandate of equal protection.623. both taxes must be imposed on the same property or subject matter. its ghost as noted by an eminent critic. City of Butuan is sentenced to refund plaintiff and is restrained and prohibited permanently from enforcing said Ordinance. it possesses more than just a persuasive effect."11 The above would clearly indicate how lacking in merit is this argument based on double taxation. In order to constitute double taxation in the objectionable or prohibited sense: 1.. 2. which is repugnant to the due process clause. but not in excess of P50. and even if the same exceeded those made by said agents or consignees of producers or merchants established outside the City of Butuan. Government. Citing Asian Bank. decision appealed from is reversed. by the same State. calling. Disputing CBC‘s claim. the same property must be taxed twice when it should be taxed once. and hence.00 gross receipts tax that CBC paid for the second quarter of 1994. as here.250.354. On August 16. Issue: Whether or not the disputed ordinance is void because it is highly unjust and discriminatory Held: Yes. it declared the above ordinance as amended.03 paid under protest. The Court of First Instance ruled in favor of the defendant. . It is something not favored but is permissible. Ordinance No. must. 110 as amended of the City of Butuan is illegal. (2) these are germane to the purpose of the legislation or ordinance. to be valid. and 7. where the suit originated. since only sales by "agents or consignees" of outside dealers would be subject to the tax.9 we quoted with approval this excerpt from a leading American decision:10 "Where. calling or activity by both the state and the political subdivisions thereof. there is no reason why sales thereof by dealers other than agents or consignees of producers or merchants established outside the City of Butuan should be exempt from the tax." At any rate. as discriminatory.140. Sales by local dealers.R. CBC also filed on the same day a petition for review with the Court of Tax Appeals."8With that decision rendered at a time when American sovereignty in the Philippines was recognized. its validity on constitutional grounds is challenged because of the allegation that it imposed double taxation. In addition. 5. In its decision of December 19. not only to present conditions. imposes a tax on any person. L-22814 August 28. entity or corporation doing business in the City of Baguio is assailed by defendantappellant Fortunato de Leon. however. it being shown in the partial stipulation of facts.. or negate the authority to classify the objects oftaxation. Hence. of the same kind or character of tax. it being maintained that the license fees therein imposed "is excessive. it delivered the coup de grace to the bogey of double taxation as a constitutional bar to the exercise of the taxing power. A reading of the ordinance will readily disclose their inherent lack of plausibility. provided that some other constitutional requirement is not thereby violated. the Commissioner asserted that CBC paid the gross receipts tax pursuant to Section 119 (now Section 121) of the National Internal Revenue Code (―Tax Code‖) and pertinent Bureau of Internal Revenue (―BIR‖) regulations. to future conditions substantially identical to those of the present. The same tax may be imposed by the National Government as well as the local government. CITY OF BUTUAN G.R. etc. As to why double taxation is not violative of due process. foreign exchange profits and other operating earnings during the second quarter of 1994.R. It is thus apparent from the above that in much the same way that the plea of double taxation is unavailing. if its purpose was merely to levy a burden upon the sale of soft drinks or carbonated beverages.40 from January 1 to July 30.177. and (4) the classification applies equally to all those who belong to the same class. 122 and effective November 28. To ensure that it filed its claim within the two-year prescriptive period. this appeal. 4. and therefore obligated to pay under such ordinance the P50 annual fee. At any rate. These "PepsiCola" soft drinks are bottled in Cebu City and shipped to the Butuan City warehouse of plaintiff for distribution and sale in the City of Butuan and all municipalities of Agusan. 146749. The classification made in the exercise of this authority. collection charges. 1960 and the amount of P9. These conditions are not fully met by the ordinance in question. There is nothing inherently obnoxious in the exaction of license fees or taxes with respect to the same occupation. 329. Hence.140. He was held liable as a real estate dealer with a property therein worth more than P10. not acting for or on behalf of other merchants. It would seem though that in the United States. 1961. Nonetheless. a license tax may be levied upon a business or occupation although the land used in connection therewith is subject to property tax. still stalks the juridical state. Congress has clearly expressed its intention.933. 1968 Topic: Constitutionality of Double Taxation Facts: Plaintiff. 1960. 110 as amended. without any deduction.933. Plaintiff's warehouse in the City of Butuan serves as storage for its products the "Pepsi-Cola" soft drinks for sale to customers in the City of Butuan and all the municipalities in the Province of Agusan. within the same jurisdiction or taxing district. which for him was indispensable. No. or activity by both the State and a political subdivision thereof. commissions. inspite of repeated demands. on the ground that Ordinance No. Further.. regardless of the volume of their sales. CBC filed with the Commissioner of Internal Revenue (―Commissioner‖) a formal claim for tax refund or credit ofP1. There is no need to pass upon the other allegations to assail the validity of the above ordinance. PEPSI-COLA BOTTLING CO.82 from the P12. trades and occupations as may be established or practiced in the City. during the same taxing period.10 per case of 24 bottles of Pepsi-Cola. the allegation that there was a violation of the principle of uniformity is inherently lacking in persuasiveness. or taxing authority.63 from August 16 to December 31.926.00 as gross receipts tax on its income from interests on loan investments. is a domestic corporation with offices and principal place of business in Quezon City. 3. there is no constitutional prohibition against double taxation in the Philippines.. firm.000. association. Nor was defendant-appellant agreeable to such a suit being instituted by the City Treasurer without the consent of the Mayor. it would still be invalid. The source of authority for the challenged ordinance is supplied by Republic Act No. Assume the validity of such ordinance. Indeed. allegedly. and that it violated the requirement of uniformity. as amended. Justice Holmes made clear in this language: "The objection to the taxation as double may be laid down on one side. 2003 Topic: Constitutionality of Double Taxation Facts: CBC is a universal banking corporation organized and existing under Philippine law. but. it has been expressly affirmed by us that such an "argument against double taxation may not be invoked where one tax is imposed by the state and the other is imposed by the city . To some. COURT OF APPEALS G. however.amounting to P1. On 20 July 1994. that the tax imposed is excessive and that it is unconstitutional. Even if the burden in question were regarded as a tax on the sale of said beverages. CITY OF BAGUIO v. Pepsi-Cola Bottling Company of the Philippines. DE LEON G. . 1964..623. We do not view the matter thus. would be exempt from the disputed tax. Held: To repeat the challenged ordinance cannot be considered ultra vires as there is more than ample statutory authority for the enactment thereof. The plaintiff paid under protest the amount of P4. (3) the classification applies. L-24756 October 31. June 10. short of confiscation or proceedings unconstitutional on other grounds. of P0.. 110 which was subsequently amended by Ordinance No. CBC paid P12. that he was "engaged in the rental of his property in Baguio" deriving income therefrom during the period covered by the first quarter of 1958 to the fourth quarter of 1962. as with us. No. services. The Commissioner argued that the final withholding tax on a bank‘s interest income forms part of its gross receipts in computing the gross receipts tax. That is the principal question.CBC argued that it was not liable for the gross receipts tax . and there would be no question about the liability of defendant-appellant for the above license fee. amending the city charter of Baguio2 empowering it to fix the license fee and regulate "businesses. or transferred when the obligation or right arises from Philippine sources or the property is situated in the Philippines. 395. The basis for the value of documentary stamp taxes to be paid on the insurance policy is Section 183 of the National Internal Revenue Code which states in part: Sec. or an aggregate sales of P1. 898. The Supreme Court upheld the estate planning scheme resorted to by the Pacheco family in converting their property to shares of stock in a corporation which they themselves owned and controlled. and in respect of the transaction so had or accomplished. exemption or exclusion. 829. The "automatic increase clause" in the policy is in the nature of a conditional obligation under Article 1181. IAC G. DELPHER TRADERS CORP v. and papers. On March 1. to claim that the increase in the amount insured (by virtue of the automatic increase clause incorporated into the policy at the time of issuance) should not be included in the computation of the documentary stamp taxes due on the policy would be a clear evasion of the law requiring that the tax be computed on the basis of the amount insured by the policy. was COMMISSIONER v. there shall be collected a documentary stamp tax of thirty (now 50c) centavos on each Two hundred pesos per fractional part thereof. he declared the sums of P80. the private respondent has no basis for its claim of a light of first refusal under the lease contract. REPUBLIC v. By virtue of the deed of exchange. Upon documents. 199. Issue: Whether or not the "Deed of Exchange" of the properties executed by the Pachecos on the one hand and the Delpher Trades Corporation on the other was meant to be a contract of sale which. Such amount should therefore form part of CBC‘s gross receipts in computing the gross receipts tax. instruments and papers. of the amount insured by any such policy. accepted.75 corresponding to the increase in 1984 of the sum under the policy Issued by respondent. In summary. and transfers of the obligation. 2002 Topic: Means of Avoiding or Minimizing the Burden of Taxation: Tax Avoidance Facts: Private respondent Lincoln Philippine Life Insurance Co.920. and upon acceptances. the additional insurance that took effect in 1984 was an obligation subject to a suspensive obligation. the other party thereto who is not exempt shall be the one directly liable for the tax. It should be emphasized that while tax avoidance schemes and arrangements are not prohibited. There was no transfer of actual ownership interests by the Pachecos to a third party. or transferring the same wherever the document is made. the appellant had been paid a total of P2. supplied them with his manufactured articles. the appellant filed his income tax returns for the years 1946 and 1947.50 for furniture delivered by him to the base authorities. respectively. The legal right of the taxpayer to decreased the amount of what otherwise could be his taxes or altogether avoid them by means which the law permits cannot be doubted.S. collected and paid for. (As amended by PD No. by the person making.75 and P1. business or property of the same class taxable at the same rate. In the years prior to 1984.623. Angeles City: He was engaged in the manufacture of furniture and. whereby any insurance shall be made or renewed upon any life or lives. the petition is hereby given DUE COURSE. of the amount withheld as final tax. with the then Municipal Treasurer of Angeles." Held: The "Deed of Exchange" of property between the Pachecos and Delpher Trades Corporation cannot be considered a contract of sale.355. of a prohibition on ―a tax on a tax. Blas Gonzales. If the tax law follows the constitutional rule on uniformity. making all income. there shall be levied. In the above two returns. GONZALES 13 SCRA 633 Topic: Tax Evasion Facts The defendant-appellant. What they really did was to invest their properties and change the nature of their ownership from unincorporated to incorporated form by organizing Delpher and placing the control of their properties under the corporation. Upon investigation. Stamp taxes upon documents. sales.459.82 representing alleged overpayment of the gross receipts tax. there can be no valid objection to taxing the same income. . In the return for 1946. Issues: 1. 1948. Held: There is no double taxation when Section 121 of the Tax Code imposes a gross receipts tax on interest income that is already subjected to the 20% final withholding tax under Section 27 of the Tax Code.The Court of Tax Appeals ruled in favor of CBC and held that the 20% final withholding tax on interest income does not form part of CBC‘s taxable gross receipts. he declared a net income of P9. and at the same time such act is done or transaction had: Provided. instruments. The decision of the Court of Appeals is SET ASIDE insofar as it affirmed the decision of the Court of Tax Appeals nullifying the deficiency stamp tax assessment petitioner imposed on private respondent in the amount of P464. The ownership remained in the same hands.787. business or property. a deficiency assessment based on the additional insurance not covered in the main policy is in order. 1994) The basis for the value of documentary stamp taxes to be paid on the insurance policy is Section 183 of the National Internal Revenue Code.57 as his total sales for the said two years. The second interpretation. he declared as net income the amount of P16. Issue: Whether or not the ―automatic increase clause‖ is a separate agreement. business or property twice. Military Base at Clark Field. Issued. The appellant do not deny the above amount which. is a business conduit of the Pachecos.R.‖ is as illusory as the prohibition on double taxation. The clause was to take effect in the year 1984. 119176 March 19.95. the corresponding documentary stamp taxes prescribed in the following section of this Title. issuing. stamp taxes due on the policy were paid by petitioner only on the initial sum assured. for the record. private respondent Issued a special kind of life insurance policy known as the "Junior Estate Builder Policy. Section 173 of the National Internal Revenue Code on documentary stamp taxes provides: Sec. the second issue raised in this petition is now moot. No. while the final withholding tax is an income tax under Title II of the Code.10 and a tax liability therefor in the sum of P1. Stamp tax on life insurance policies . 1947 and March 1. Pampanga. Similarly. however. but on the amount of the interest income withheld as the final tax. loan agreements. and that. The Pacheco family merely changed their ownership from one form to another. but still a part of the insurance sold to which private respondent was liable for the payment of the documentary stamp tax. signing. right or property incident thereto.On all policies of insurance or other instruments by whatever name the same may be called. signed. respectively. assignments. No.) is a domestic corporation registered with the Securities and Exchange Commission and engaged in life insurance business. hence. Whether CBC has established by sufficient evidence its right to claim the full refund of P1. This saved them inheritance taxes.84 and income tax liability of P111. tax laws cannot be circumvented in order to evade the payment of just taxes. 2. L-69259 January 26. while no new policy was Issued. In the case at bar. Hence. 1988 Topic: Means of Avoiding or Minimizing the Burden of Taxation: Tax Avoidance Facts: The Delpher Trades Corp. the original policy was essentially re-Issued when the additional obligation was assumed upon the effectivity of this "automatic increase clause" in 1984." the distinguishing feature of which is a clause providing for an automatic increase in the amount of life insurance coverage upon attainment of a certain age by the insured without the need of issuing a new policy. Inc. Petitioner claims that the "automatic increase clause" in the subject insurance policy is separate and distinct from the main agreement and involves another transaction. Consequently. 173. Inc. accepting.32 for both years. The gross receipts tax is a business tax under Title V of the Tax Code. There is no constitutional prohibition on subjecting the same income or receipt to an income tax and to some other tax like the gross receipts tax. by which the increase of the insurance coverage shall depend upon the happening of the event which constitutes the obligation. 352. Whether the 20% final withholding tax on interest income should form part of CBC‘s gross receipts in computing the gross receipts tax on banks. What is being taxed is still the interest income. the entire amount of the interest income is taxable and not only the net interest income. There is no double taxation if the law imposes two different taxes on the same income. prejudiced the private respondent's right of first refusal over the leased property included in the "deed of exchange. There being no legal basis for CBC‘s claim for a tax refund or credit. the ―automatic increase clause‖ is not a separate agreement and therefore shall be considered as an integral part of the policy for taxation purposes.. (now Jardine-CMA Life Insurance Company.R. from its taxable gross receipts. has been a private concessionaire in the U. CBC has failed to point to any specific provision of law allowing the deduction. in effect. That whenever one party to the taxable document enjoys exemption from the tax herein imposed. 140. the Bureau of Internal Revenue discovered that for the years 1946 and 1947. per agreement with base authorities. WHEREFORE.17 while for the year 1947.707. The gross receipts tax falls not on the final withholding tax. The Supreme Court said the records do not point to anything wrong and objectionable about this estate planning scheme resorted to. and therefore be excluded or avoided for taxation purposes Held: Yes. the same income or receipt may be subject to the value-added tax and the excise tax like the specific tax. In the instant case. 183.. The law imposes the gross receipts tax on that portion of the interest income that the depository bank withholds and remits to the government. the Pacheco co-owners saved on inheritance taxes. Documentary .848. LINCOLN PHILIPPINE LIFE INSURANCE COMPANY G. of the National Internal Revenue Code (NIRC). The full amount of P124. For this reason. 510. the appellee likewise considered the said amount as unreported income for the said year. for married persons or heads of family.. 156 September 27. that." Now. . Taking into consideration the history of section 23 of the Commonwealth Act No. and that thereafter the Bureau of Internal Revenue found no fraud committed by the Fortune Tobacco Corporation and. the MeTC abdicated its duty as a court of law. But the National Assembly. this . committed as follows: ―That during the taxable year 1990.furnished by the Purchasing Officer of the Clark Field Air Base on the Bureau of Internal Revenue's representation. fraudulently declared and filed with the BIR for ad valorem tax purposes gross sales of P10. Marikina City. 98-38181 to 98-38189. 1998. No. in violation of the ruling in Crespo v. Metro Manila.581. did then and there.32 declared by the appellant as his total sales for the two tax years in question was short or under declared by some P412. Court. Held: This Court. Issue: Whether. cautioned as follows — To sustain an attachment on this ground.R. the question to be determined or answered is: Does this change in the phraseology of the law show the intention of the National Assembly to change the theory or policy of the old law so as to deduct now the tax on the personal and additional exemptions from the tax fixed on the amount of the net income. the court relinquished the discretion it was obliged to exercise. and subjugated itself to the administrative agency. and for each dependent below 21 years of age. sales to persons other than the United States Army. unlawfully. the plaintiff has been continuously engaged in the embroidery business. with fraudulent tax evasion for supposed non-payment of the correct ad valorem." prepared by the Tax Commission and submitted to the National Assembly of the Philippines. The argument of the appellee in support of the lower court's decision is that the omission in section 23 of Act No. WHEREFORE. Tan.008. a substantive law.188. 2000 in CA-G.43 was considered as taxable income because the appellant could not produce the books of account on the same upon which any deduction could be based. G.522. and mutually helping each other. 1999 in SCA Case No. and the Orders dated March 22. (Taxable Years 1990.331. amend and codify the Internal Revenue Laws of the Philippines. there is no legal justification to further pursue the three tax evasion cases against Lucio C. Philippines. the abovenamed accused. No. and the other to reclaim. 1993. the answer to the above-propounded question must obviously be in the negative. in substitution of section 7 of the old Income Tax Law. SP No. 1999 and October 13. Under said plan.R. nine (9) other corporations and their respective corporate officers. as the respective officers of Fortune Tobacco Corporation (FTC) and its nine (9) dummy corporations. 56077 and the Orders of the Regional Trial Court of Marikina City dated August 25.14 paid as income tax for the year 1939 by plaintiff to defendant under protest. To constitute a ground for attachment in Section 1 (d). docketed as Criminal Cases Nos. as prescribed in the old law.508. as it is in this case. Issue: Whether or not findings of non-fraud by the Commissioner a departure to tax evasion Held: While there was in fact an evident departure to what is mandated by law. the appellee considered this last mentioned amount as unreported item of income of the appellant for 1946. 1999 filed by the Bureau of Internal Revenue in connection with its Manifestation and Motion. thereby defrauding and causing damage and prejudice to the government in undeclared ad valorem taxes in the amount of P7. organizing and incorporating the said dummy corporations and employing individual ―ghost‖ buyers to effect/perpetrate fictitious and simulated sales of FTC‘s cigarette products at a price higher than that of the wholesale price registered with the BIR. the Bureau of Internal Revenue in fact conducted several hearings on the tax liability of the accused relative to the protest filed by Fortune Tobacco Corporation regarding its tax liabilities connected with the filing of the instant cases against Lucio C. the cumulative amount of the tax is fixed on any given amount of net income without regard to the status of the taxpayer.068. in relation to Section 253 (now Section 254) and Section 252[b] (now Section 253[b]) and Section 255 (now Section 256). thus. has no other recourse but to obey the law and dismiss the cases at bar. the sum of P475 collected by defendant from plaintiff illegally according to the latter. 1991 and 1992) by the New DOJ Panel with the Metropolitan Trial Court (MeTC). LUCIO C. instead of adopting or incorporating said proposed section 22 in the National Internal Revenue Code. shows that it was the intention of the National Assembly to adopt the innovation proposed by the Tax Commission which prepared the draft of the new law. the personal and additional exemptions granted by section 23 of the same Act. dismissing the criminal information filed by the DOJ Panel against herein respondents. Since the year 1933 up to the present time.80 alleged by plaintiff to be losses in his trade or business. 1999 of the Metropolitan Trial Court (MeTC). 1946 Topic: Exemption from Taxation Facts: This is an appeal from the decision of the Court of First Instance of Manila which dismisses the complaint of the plaintiff and appellant containing two causes of action. Information for nine (9) counts of tax evasion against the respondents was filed." that is. one to recover the sum of P9. in Marikina City. and denying the DOJ Panel‘s Motion for Reconsideration. This finding of non-fraud was approved by the Commissioner of Internal Revenue. as the new law does not provide that the personal exemptions shall be allowed in the nature of a deduction from the net income.31 inclusive of increments. and the fact that it is evident that the Commissioner of Internal Revenue has not approved the filing of the instant cases.787. Held: The lower court held that. therefore. C. through the above-named accused. before determining the tax due on the latter? It is a well-settled rule of statutory construction that where a statue has been enacted which is susceptible of several interpretations there is no better means for ascertaining the will and intention of the legislature than that which is afforded by the history of the statue. P10. because the former has erroneously computed the tax on personal and additional exemptions. et al. should be considered as a credit against or be deducted from the net income. are hereby declared NULL and VOID and SET ASIDE. Section 7 of the old law provided: "For the purpose of the normal tax only. 466 of the phrase "in the nature of a deduction" found in section 7 of the old law. 1999 and May 17. A. the amount of P1.43. fraud should be committed upon contracting the obligation sued upon. Fraud is a state of mind and need not be proved by direct evidence but may be inferred from the circumstances attendant in each case.R. PEOPLE OF THE PHILIPPINES v. The fraud must relate to the execution of the agreement and must have been the reason which induced the other party into giving consent which he would not have otherwise given. instead of deducting the total amount of the exemptions from the net income. On December 1. income and value-added taxes for the year 1992. the Commissioner of Internal Revenue filed a Complaint with the Department of Justice (DOJ). Branch 75. thereby facilitating the commission of tax evasion by willfully suppressing the true and accurate sales of FTC and as a consequence of which the FTC. TAN. P30.‖ According to the Memorandum dated February 11. 95-340-MK are hereby REVERSED. under the present law.272. Issue: Whether or not Gonzales committed tax evasion. by then and there purposely and maliciously creating. July 13. Section 22 of the bill entitled "An Act to revise. by reason of defendant having disallowed a deduction of P67. with willful intent to evade and defeat payment of the tax due the government. Marikina City. in the amount of P124. Compared against the sales figure provided by the base authorities. 466.160. an innovation based on what is known as the "Wisconsin Plan" now in operation in several American states. The information filed to the accussed by the respondents for violation of Section 127[b] (now Section 130[b]). the plaintiff began engaging in buying and selling mining stocks and securities for his own exclusive account.307.848. instead of deducting the amount of personal and additional exemptions from that of the net income. its corporate officers. file with the Bureau of Internal Revenue (BIR) a false and fraudulent ad valorem tax returns for the taxable year 1990. As a result. and the criminal information are reinstated. Rule 57 of the Rules of Court.75 instead of the true aggregate ad valorem tax of P6. Rule 57. this Court is constrained to annul and set aside the Orders of the MeTC. therefore. By merely echoing the findings of the BIR. and then this amount is reduced by the tax credit fixed in the law according to the status of the taxpayer and the number of his dependents as follows: for single individuals. and within the jurisdiction of this Honorable Court.". as amended. and there is a distinction between exemption and deduction.35 if the true and accurate gross sales subject to ad valorem tax is declared. 466. it must be shown that the debtor in contracting the debt or incurring the obligation intended to defraud the creditor. A debt is fraudulently contracted if at the time of contracting it the debtor has a preconceived plan or intention not to pay. Mogul. in the event the first cause of action is dismissed.18. there is allowed a tax credit of P10. 144707. GREENFIELD v. 2004 Topic: Tax Evasion Facts: On September 7. MEER G. In failing to make an independent finding of the merits of the case and merely anchoring the dismissal on the position of the BIR. Branch 75. . the Petition is GRANTED and the Decision of the Court of Appeals dated August 29.00 and paid only the ad valorem tax in the amount of P3. No. charging Fortune Tobacco Corporation (hereafter ―Fortune‖).072. discussing Section 1(d). 510.574. while section 23 of the new law provides: "For the purpose of the tax provided for in this Title there shall be allowed the following exemptions.360. or whether it is the tax on such exemptions that should be deducted from the tax on the total net income.124. feloniously.806. conspiring with. Further investigation into the appellant's 1946 profit and loss statement disclosed "local sales. Tan et al. Accordingly. there shall be allowed as an exemption in the nature of a deduction from the amount of the net income ." and that "in 1935. the tax due on said exemptions must be deducted from the tax due on the whole net income. they should not be included as part of the net income. 1936 and 1938 amended the former acts by making said exemptions as credits against the net income for the purpose of both the normal tax and surtax. 3. as well as administrative opinions and rulings. 34-F-00146-64-B. And Paul and Mertens. RA 81. the Surigao Consolidated Mining Co. After the war. it should be sustained only when expressed in explicit terms. On appeal by the Commissioner to the Court of Appeals. Executive Order No. Held: The authority of the Minister of Finance (now the Secretary of Finance). shall be held. . and that of married persons or heads of family from four thousand to two thousand five hundred pesos. Appellee is sentenced to refund to appellant the sum of P475 claimed in the second cause of action of the complaint. CA 240 SCRA 368 Topic: Tax Amnesty Facts: On 22 August 1986. Law of Federal Taxation.. Its return was revised. in a communication received by private respondent on 13 August 1986. in his letter of 22 November 1988. The personal exemption and credits for defendants would appear to be in lieu of deductions for necessary living expenses. to promulgate all needful rules and regulations for the effective enforcement of internal revenue laws cannot be controverted. Private respondent appealed the Commissioner's denial to the Court of Tax Appeals. And the court is only warranted in holding the construction of a statute." (Florar vs. Prior to this availment. or at least substantially. 365. The change of phraseology alone does not lead to the conclusion that it was the intention of the lawmaker to amend or change the constructions of the old law as contended by the appellee. In appropriate cases. to alter the construction of the former act." The lower court. 41 was promulgated declaring a one-time tax amnesty on unpaid income taxes. Due to the interruption . 73d Congress. ad valorem or specific taxes on all minerals mined from mining claims or concessions existing an din force on 1 January 1942. E.. the law they seek to apply and implement. 23: To carry out the policy of retaining practically the same tax burden on ordinary income.. . 41. 41. is that all such issuances must not override.0. had construed the amnesty coverage to include only assessments issued by the Bureau of Internal Revenue after the promulgation of the executive order on 22 August 1986 and not to assessments theretofore made: TO: All Internal Revenue Officers and Others Concerned: 1. 36 N. it would have adopted literally. when revised. neither to supplant nor to modify. 158. To avoid incurring any tax liability or penalty. 1918. The company failed to show any portion of the law that explicitly provided for a refund of those taxpayers who had paid their taxes on the items.157. respectively. neither an alteration in phraseology nor the omission or addition of words in the latter statute. Issues: Whether or not the position taken by the Commissioner coincides with the meaning and intent of executive Order No. There is nothing in said section 23 to justify the contention that the tax on personal exemptions (which are exempt from taxation) should first be fixed. Had the provision in the old law been drafted in exactly the same term as that of said section 23. 137 Ind. implementing Executive Order No. petitioner Commissioner of Internal Revenue. and consequently in not sentencing appellee to refund to appellant the sum of P475. estate or donor's taxes due during the same taxable years. dated 09 February 1987. Availing itself of the amnesty. So ordered.71. of communications at the outbreak of the war. because. it is necessary in connection with the proposed plan to allow the personal exemption and credits for dependents as an offset against surtax as well as normal tax. ordinarily should deserve weight and respect by the courts. of circumstance arising therefrom are condoned…‖ The provision refers to the condonation of unpaid taxes only.. They may well apply to both taxes as do all other ordinary deductions. 2d Session. there shall be allowed the following exemptions:" From the fact that the National Assembly discarded completely section 22 of the bill drafted in accordance with the "Wisconsin Plan" and submitted by the Tax Commission. and paid the corresponding amnesty taxes due. the company lost contact with its mines and never received the production reports for the 4th quarter of 1941. however. 1). and then deducted from the tax on the net income. as it was explained in the Ways and Means Committee Report No. the law. 1986 for the collection of income. 764. the provisions of said section 22 as section 23 of Commonwealth Act No. Section 7 of our old Income Tax Law. COMMISSIONER v.02. "that in the revision of statutes. for the taxable years 1981 to 1985. 509. until eventually the company claimed a refund of P17. Surigao. therefore. Barker's Adm'r (11 Ohio St. For. it deposited of check payable to and indorsed in favor of the City Treasurer. He who claims an exemption from his share of the common burden of taxation must justify his claim by showing t hat the Legislature intended to exempt him. It is evident that said phrase was added or inserted in said section 7 only out of extreme caution." This was changed in said section 23. to be changed. p. If it were the intention of the National Assembly to adopt the "Wisconsin plan" proposed by the tax Commission.) If the amounts of personal and additional exemptions fixed in section 23 are exempt from taxation. Which has exactly the same effect as the provision regarding personal and additional exemptions in the said United States Revenue Acts. For it is a well-established rule.410. the exemption would have to be deducted from the gross income in order to determine the net income subject to tax. The mere fact that the phrase "in the nature of a deduction" found in section 7 of the old law was omitted in section 23 of the new or National Internal Revenue Code did not and could not effect any change in the law. and it cannot be extended beyond the plain meaning of those terms. Held: RA 81. necessarily. Being so. In view of all the foregoing. Without pronouncement as to costs. Because "Exception is an immunity or privilege. 1928 and 1932 considered the personal and additional exemptions as credits against the net income for the purpose of the normal tax. Auto Products Philippines. state regarding the change in the United States Revenue Act of 1934: "The practical effect of this statutory change is to convert the personal exemption and credit for dependents into deductions . The collector of Internal Revenue denied the request for refund. erred in not declaring that personal and additional exemptions claimed by appellant should be credited against or deducted from the net income. 1924. The request was denied by the Commissioner.O. even without it. the company filed its ad valorem tax for the said period pursuant to Commonwealth Act 772. during the period when the President of the Republic still wielded legislative powers. as expanded by Executive Order No. was operating its mining concessions in Mainit. 4-87. Inc. Section 1(d) provided that ―all unpaid royalties. Our Income Tax Law is patterned after the United States Revenue or Income Tax Laws. Administrative rules and regulations are intended to carry out. in October 1986 and November 1986. The taxpayer wrote back to state that since it had been able to avail itself of the tax amnesty. it is to be presumed that the National Assembly of the Philippines did not intend to introduce any substantial change in the old law in so far as the effect of personal and additional exemptions on the income tax is concerned. prescribed that the amounts specified therein shall be allowed as an exemption in a nature of deduction from the amount of the net income. Neither can it be disputed that such rules and regulations. the following instructions are hereby issued: xxx xxx xxx 1. or the language used in the new act plainly requires such change of construction. the same construction should have been adopted. and is reversed in so far as it dismissed his second cause of action. but must remain consistent and in harmony with. the cancellation/withdrawal of assessment notices and letters of demand issued after August 21. Sherifan. To give effect and substance to the immunity provisions of the tax amnesty under Executive Order No. later amended to include estate and donor's taxes and taxes on business. SURIGAO CONSOLIDATED MINING v. except the first paragraph thereof which reads: "For the purpose of the normal tax only. assessed the latter deficiency income and business taxes for its fiscal years ended 30 September 1981 and 30 September 1982 in an aggregate amount of P1. Issue: Whether Surigao Consolidated may recover its tax payment in light of the condonation made under a subsequent law. the decision of the tax court was affirmed. with the only modification that the amount of personal exemption of single individuals has been reduced from two thousand to one thousand pesos. respondent R. its Tax Amnesty Return No. and subsequently. which provides: "For the purpose of the tax provided for in this Title. where the intent of the legislature to make such change is clear.copied substantially in section 23 of the latter provision of section 7 of the old law relating to personal and additional exemptions. the United States Revenue Laws of 1916.3. It should be remembered that condensation is a necessity in the work of compilation or codification. COLLECTOR GR L-14878. A certification by the Tax Amnesty Implementation Officer of the fact of availment of the said tax amnesty shall be a sufficient basis for: xxx xxx xxx 1. instead of substantially incorporating section 7 of the old Income Tax Law as section 23 of the new. instead of providing that the personal and additional exemptions shall be allowed as a credit against the net income. 1921. 369. 28. it is freedom from a charge or burden to which others are subjected. the deficiency tax notice should forthwith be cancelled and withdrawn. as in the United States Revenue Acts.H.02. The condonation of a tax liability is equivalent and is in the nature of tax exemption. in conjunction with the Commissioner of Internal Revenue. 34-F-00146-41 and Supplemental Tax Amnesty Return No. 466. the United States Revenue Acts of 1934. and which minerals were lost by reason of war. recognized by the Supreme Court of Ohio in the case of Conger vs. business. there shall be allowed as an exemption in the nature of a deduction from the amount of the net income. in payment of ad valorem taxes for the said period. pages 6. Vol. 64. 26 DECEMBER 1963 Topic: Tax Remission / Condonation Facts: Before the outbreak of the War. which is taxable. 41. Much more fundamental than either of the above. filed. 1926.01. on the ground that Revenue Memorandum Order No. the decision of the lower court is affirmed in so far as it dismisses appellant's first cause of action. MITSUBISHI METAL CORPORATION C. criminal or administrative liability arising from the non-payment of the said tax. tax incentives.273. 1-95. 1986 and respondent paid the amount of P2. respondent corporation received a letter dated August 15. It is duly registered to engage in such business in the Philippines and maintains a branch office in Manila. 1985. 2003. 41 was later extended from October 31. It might not be amiss to recall that the taxable periods covered by the amnesty include the years immediately preceding the 1986 revolution during which time there had been persistent calls. 1986. 1986 by E. quasi-judicial or administrative bodies. 1998 with the Bureau of Internal Revenue. The taxpayer's tax amnesty declaration shall not be admissible in evidence in all proceedings before judicial. No.O. or of any penalty claimed to have been collected without authority. 997. 41 enumerates which taxpayers cannot avail of the amnesty granted there under. 41. 1998. The conclusion is unavoidable. Illegal Exactions and Transactions) and Chapter Four (Malversation of Public Funds and Property) of the Revised Penal Code. 1980 to December 31.O.Recovery of Tax Erroneously or I l l e g a l l y C o l l e c t e d . and not a confined. Issue: Whether or not the Court of Appeals erred in affirming the Decision of the Court of Tax Appeals which ruled that herein respondent's deficiency tax liabilities were extinguished upon respondent's availment of tax amnesty under Executive Orders Nos. which are actionable under the National Internal Revenue Code. The return was received by the BIR on November 3. 1998.712 and P8. 1986: (a) file a sworn statement declaring his net worth as of December 31. 1986 to December 5.O. a taxpayer who wished to avail of the income tax amnesty should.O. 1998 amounting to P44.A. It is engaged in general import and export trading. and (c) file a return and pay a tax equivalent to ten per cent (10%) of the increase in net worth from December 31. In the course of the examination. all too vivid to be easily forgotten. Petitioner is the Philippine Branch of Mitsubishi Corporation. 1985. 600. 1998 through a Certificate of Completion and Final Acceptance dated February 4. 1986.R. It did not. petitioner filed its Income Tax Return for the fiscal year ended March 31. No. The filing of income tax cases in court must have been made before and as of the date of effectivity of E. Despite the provision in the Contract that NPC shall assume the tax liabilities of petitioner. believing that it has made erroneous payments of the subject taxes. CASE NO. 324. for a taxpayer not to be disqualified under Section 4 (b) there must have been no income tax cases filed in court against him when E.. the taxpayer shall enjoy the following immunities and privileges: a) The taxpayer shall be relieved of any income tax liability on any untaxed income from January 1. respectively.705. are likewise deemed extinguished. the law could have simply so provided in its exclusionary clauses. 1981 to December 31. In the return. for civil disobedience. 41 is very clear and unambiguous. f) Those with pending cases involving unexplained or unlawfully acquired wealth before the Sandiganbayan. And now. 41 took effect. 1998. a corporation duly organized and existing under the laws of Japan and duly licensed to engage in business in the Philippines. Civil.68. (b) file a certified true copy of his statement declaring his net worth as of December 31. — The following taxpayers may not avail themselves of the amnesty herein granted: a) Those falling under the provisions of Executive Order Nos. arising from petitioner's Overseas Economic Cooperation Fund — funded Batangas Coal-Fired Thermal Power Plant Project.00 computed in accordance with the provisions of Revenue Memorandum Order ("RAMO") No. tax amnesty.O. c) Those with criminal cases involving violations of the income tax law already filed in court as of the effectivity hereof. 1985. Executive Order No. No. 1981 to December 31. No. thus: Sec. Held: The petition is without merit. The period of the amnesty in E. province of Leyte. b) Those with income tax cases already filed in Court as of the effectivity hereof.000. petitioner's revenue examiners recommended an assessment for deficiency income. on or before October 31. COMMISSIONER OF INTERNAL REVENUE v. in which he is a defendant or respondent. It excepts from income tax amnesty those taxpayers "with income tax cases already filed in court as of the effectivity hereof. One of the contracts was with the National Development Company (NDC) in connection with the construction and installation of a wharf/port complex at the Leyte Industrial Development Estate in the municipality of Isabel. On July 15. 6. insofar as the said liabilities are concerned. 1980 on record with the Bureau of Internal Revenue (BIR). Chapter Three (Frauds. on August 2. Held: Petitioner's claim cannot be sustained. (now the Japan Bank for International Cooperation or "JIBC" for the implementation of the Calaca II Coal-Fired Thermal Power Plant Project. The other contract was with the Philippine Phosphate Fertilizer Corporation (Philphos) for the construction of an ammonia storage complex also at the Leyte Industrial Development Estate. December 17.O. 2001 Topic: Tax Amnesty Facts: Respondent Marubeni Corporation is a foreign corporation organized and existing under the laws of Japan. No. all revenues earned and cost incurred for its Calaca II Project. d) Those that have withholding tax liabilities under the National Internal Revenue Code. and the same shall not be examined. 1986 and attached thereto its sworn statement of assets and liabilities and net worth as of Fiscal Year (FY) 1981 and FY 1986. In computing the P90. is before us invoking the provision of Section 229 in relation to Section 204 of the Tax Code. contractor's and commercial broker's taxes. respondent filed its tax amnesty return dated October 30. Topic: Kinds of Tax Exemption: Express and Implied Facts: This case involves a claim for refund of erroneously paid income tax and branch profit remittance tax for the fiscal year ended March 31.) No. — N o s u i t o r proceeding. and/or exemptions under existing laws. That the Commissioner of Internal Revenue may authorize in writing the examination of the said books of accounts and other records to verify the validity or correctness of a claim for grant of any tax refund.T. petitioner Commissioner of Internal Revenue Issued a letter of authority to examine the books of accounts of the Manila branch office of respondent corporation for the fiscal year ending March 1985. and it is that the executive order has been designed to be in the nature of a general grant of tax amnesty subject only to the cases specifically excepted by it. 41 and 64. Section 4 of E. inclusive of surcharge and interest amounted to P 3. 1986. Earlier. in accordance with the completed contract method of reporting income. financing and the construction business. The assessed deficiency internal revenue taxes. the latter still made payments of the subject taxes to respondent.O. Under this E.00 equivalent to ten percent (10%) of its net worth increase between 1981 and 1986. including increments thereto and penalties on account of the nonpayment of the said tax.891. or if no such record exists. or of any sum alleged to have been excessively or in any manner There is no pretension that the tax amnesty returns and due payments made by the taxpayer did not conform with the conditions expressed in the amnesty order.O. Exceptions. as the Commissioner argues. In accordance with the terms of E. 41 had not been intended to include 1981-1985 tax liabilities already assessed (administratively) prior to 22 August 1986. tax credit (other than refund on credit of withheld taxes on wages).400. 481. Relative to the two other issued raised by the Commissioner. both of which were completed in 1984.000) will be extended to the Republic of the Philippines by the then Overseas Economic Cooperation Fund (hereinafter. viz: "Sec. Through an Exchange of Notes between the Government of Japan and the Government of the Philippines dated June 11. 1.535.711. Thus. Sometime in November 1985. we need only quote from Executive Order No.O. Issue: Whether or not petitioner has made erroneous payments of the subject taxes. most particularly in the payment of taxes. No. 41 itself. The Calaca II Project was completed by the petitioner on December 2. shall be maintained in any court for the recovery of any national internal revenue tax hereafter alleged to have been erroneously or illegally assessed or collected. No. branch profit remittance. 4. This is regardless of when the taxpayer filed for income tax amnesty. 41 declaring a onetime amnesty covering unpaid income taxes for the years 1981 to 1985 was issued. It should be understandable then that those who ultimately took over the reigns of government following the successful revolution would promptly provide for abroad. Section 4 (b) of E. to the martial law regime. as amended. g) Those liable under Title Seven. Section 229. The net income from the Calaca II Project amounted to P151.100. Respondent questioned this assessment in a letter dated June 5. Immunities and Privileges. provided of course he files it on or before the deadline for filing. 1986. inquired or looked into by any person. 1986.00 income tax due for fiscal year ended March 31.481. On March 1. e) Those with tax cases pending investigation by the Bureau of Internal Revenue as of the effectivity hereof as a result of information furnished under Section 316 of the National Internal Revenue Code. The books of account and other records of the taxpayer for the period from January 1. — Upon full compliance with the conditions of the tax amnesty and the rules and regulations issued pursuant to this Executive order.If." The point of reference is the date of effectivity of E. . 1987 (Exhibit "J"). MARUBENI G. No.711. petitioner found respondent to have undeclared income from two (2) contracts in the Philippines. 288. 41. petitioner included as part of its taxable income. On August 27. as amended. government official.O. "OECF"). petitioner. b) c) COMMISSIONER v. 2 and 14. 1986 from petitioner assessing respondent several deficiency taxes. 1985 shall not be examined for income tax purposes: Provided. as amended. 6139. it was agreed that a loan amounting to Forty Billion Four Hundred Million Japanese Yen(Y40. petitioner (being the Manila Branch of Mitsubishi Corporation) reported an income tax due of P90. 1995 but was only accepted by NPC on January 31. No.137377. December 18. as amended. Executive Order (E. 41. file a statement of said net worth subject to verification by the BIR. bureau or office. 54 dated November 4. Likewise. I t c a nn o t t he r ef o re b e violative but rather is consistent with the principle of local autonomy. 91649 May 14. this petition. by virtue of a contract. to exclusively conduct geothermal operations within the MAGRA. they can only enforce the collection of real property tax through civil action. International comity may not be invoked to evade our tax laws. pragmatic analysis" alone without substantial supportive evidence. PNOC-EDC is the beneficial user. such payment appears clearly to have been erroneously paid. The above-cited section speaks of taxes erroneously or illegally assessed or collected. is to seek a cash refund from NPC for the equivalent amount of the income taxes and branch profit remittance taxes it paid to the BIR. 1977 and was granted a franchise under P. NO. now referred to as the MAGRA.D. 1869 exempts PAGCOR. the machineries. as well as fees. however. However. of pervasive relevance at this time. Tax exemptions are not presumed. PAGCOR G. technology and financing for the geothermal operations subject to the direct supervision of the DOE. Thereafter. the PNOC-EDC would furnish the necessary services. however. Thus. 1999. the corresponding cash refund shall be recovered from the government executing agencies upon the presentation of proof of payment thereof by the Japanese contractors or nationals". scrupulous care must be taken to avoid opening the floodgates to the violation of our tax laws." Tax exemptions must be strictly construed such that the exemption will not be held to be conferred unless the terms under which it is granted clearly and distinctly show that such was the intention of the parties. T he p ri nc i pl e of L oc al a ut o nom y d o es n ot m ak e l o c al go v er nm e n ts s ov e re i g n wi t hi n th e s ta te . 1991 Topic: Nature of the Power to Grant Tax Exemption Facts: The Philippine Amusements and Gaming Corporation (PAGCOR) was created by virtue of P. Petitioners claim that P.R. the land being levied is classified as inalienable. could be availed of to take advantage of the tax exemption law under discussion. whether or not such tax." Issue: Does the local Government of Manila have the power to impose taxes on PAGCOR? Held: The City government of Manila has no power to impose taxes on PAGCOR. or utilization of the country's geothermal resources. As such. 166651 Topic: Nature of the Power to Grant Tax Exemption Facts: President Ferdinand E. 853 [5] which excluded certain portions of the land embraced in the Mt. where on the face of the return upon which payment was made. the trial court ordered that the improvements on the subject land. it is not proper for us to allow a claim for refund in favor of petitioner who. Significantly. operate and maintain gambling casinos on land or water within the territorial jurisdiction of the Philippines. Tax refunds are in the nature of tax exemptions. the tax liability is imposed on the beneficial use of the real property such as those owned but leased to private persons or entities by the government.R. then President Corazon C. he issued a warrant of levy on the 701-hectare MAGRA for failure to pay real property taxes. Issue: Whether PNOC-EDC is liable to pay the real property taxes. Since PD 1869 remains an "operative" law until "amended. On March 24. On January 30. by law. Respondents have two remedies for the collection of real property tax: (1) by administrative action through levy on real property. which in turn will negotiate independently with their governments. This remedy is recognized by the respondent himself when he issued Revenue Memorandum Circular (RMC) No. its "exemption clause" remains as an exception to t h e e x e r c i s e o f t he p o w er of l oc al g o v e r nm e nt s t o i m po s e t a x es a n d f ee s . development. Respondents levied on a portion of the MAGRA to satisfy the tax delinquency of PNOC-EDC. technical. Being an instrumentality of the government. PAGCOR should be and actually is exempt from local taxes. and (2) by judicial action. 1067-B also dated January 1. Undeniably..C. S. It is owned by the government and thus. Cotabato notified PNOC-EDC of its tax delinquency after which. or when the assessment is made on the basis of the actual use thereof. since respondents cannot avail of the administrative remedy through levy. XVIII. The trial court found that PNOC-EDC is not exempt from paying the real property taxes and that the MAGRA is part of the Mt. but such suit or proceeding may be maintained. repealed or revoked" (Sec. In any case. hence. as amended by Revenue Memorandum Circular 42-99 dated June 2. the basic real property tax constitutes as a lien on the property subject to the tax which may be levied upon through the issuance of a warrant. Taxation is the rule and exemption is the exception. Aquino issued Proclamation No.D. is generally on whoever is the owner of the real property at the time the tax accrues. Petitioner remedy. The power of local government to "impose taxes and fees" is always subject to "limitations" which Congress may provide by law. No. The burden of proof rests upon the party claiming exemption to prove that it is in fact covered by the exemption so claimed. charges or levies of whatever nature. Nor can we close this discussion without taking cognizance of petitioner's warning. equipment. Thereafter. which provides that: "In cases where income taxes were previously paid directly by the Japanese contractors or nationals. (2) of P. PNOC-EDC liable to pay the real property tax accruing from its use of the MAGRA. a government owned or controlled corporation created and existing under the Corporation Code. buildings and other infrastructures found in MAGRA may be levied. 1869 is in violation of the principle of local autonomy. until a claim for refund or credit has been duty filed with the Commissioner. REPUBLIC OF THE PHILIPPINES v. 309 SCRA 87 [1999]). which on us petitioners have failed to discharge. the personal liability is on any person who has such beneficial or actual use at the time of the accrual of the tax. Johnson and Son. where. exploitation. equipment and other infrastructures in the MAGRA cannot be levied and sold at public auction because it is not the property that is subject to the tax. 32-99. The allegation of petitioner that the subject taxes it paid comes within the purview of an erroneous payment merely because said taxes. whether National or Local. the taxability of a party cannot be blandly glossed over on the basis of a supposed "broad. Respondents however are DIRECTED to refrain from levying on BASCO v. Under Sections 257 and 258 of the LGC. Hence. that the exemption clause in P. refund or credit any tax. they are regarded as in derogation of sovereign authority and to be construed strictissimi juris against the person claiming the exemption (Commissioner of Internal Revenue v. Inc. may be validly levied and sold at public auction to satisfy the payment of realty tax delinquencies. buildings and other infrastructures found in MAGRA cannot be levied upon and sold at public auction to satisfy the alleged tax delinquency because the warrant of levy shows that MAGRA is the only delinquent real property subject to tax. City Treasurer of Kidapawan. petitioner's claim for refund should be denied for lack of merit. Art. we cannot conclude that the Exchange of Notes grants tax exemption to petitioner. income or otherwise. are to be assumed by NPC is unavailing. it could not be sold at public auction.D. which places it in the category of an agency or instrumentality of the Government. t h e principle of local autonomy within the constitution simply means decentralization. under Section 29(b)(7)(A) of the tax code. as the franchise holder from paying any "tax of any kind or form. private respondents are not even among the entities which.wrongfully collected. or sum has been paid under protest or duress. The personal liability for the tax delinquency. whether the machineries. even without a written claim therefor. no such suit or proceeding shall be filed after the expiration of two (2) years from the date of payment of the tax or penalty regardless on any supervening cause that may arise after payment: Provided. Held: We agree with PNOC-EDC that its machineries. Section 13 par. It cannot . 1992. if any. for the exploration. and whether the assessment has become final and executory. Apo National Park which has not been re-classified as alienable agricultural land. that while international comity is invoked in this case on the nebulous representation that the funds involved in the loans are those of a foreign government. 1442 which allowed the government to enter into service contracts for financial. management or other forms of assistance with qualified domestic and foreign entities. CITY OF KIDAPAWAN G. Apo National Park and declared the same as geothermal reservation under the administration of the PNOC.PNOC-EDC's motion for reconsideration was denied. DOE) entered into a service contract ] with PNOC-EDC. are entitled to exemption and which should indispensably be the party in interest in this case. or of any penalty claimed to have been collected without authority. to operate and to regulate gambling casinos. or as an arm of the National Government. the mere expedient of having a Philippine corporation enters into a contract for loans or other domestic securities with private foreign entities. Otherwise. or of any sum alleged to have been excessively or in any manner wrongfully collected.D. he sent a notice of sale of delinquent real property to PNOC-EDC declaring that delinquent real property will be sold through public auction. PAGCOR has a dual role. 1987 Constitution). be an ―Imperium in imperio‖ it can only act intra sovereign. covering the tax period from 1993-2002. PNOC-EDC built a 104-megawatt power plant within the MAGRA which produces electricity through turbines using steam extracted from the MAGRA as fuel. The latter role is governmental. 3. However.In the light of the foregoing. however. 1977"to establish. 1869 constitutes a waiver of the right of the City of Manila to impose taxes and legal fees." Petitioners filed an instant petition seeking to annul the Philippine Amusement and Gaming Corporation (PAGCOR). 1992. cannot be sold at public auction. Marcos issued Presidential Decree (PD) No. not being in the nature of public dominion.D. Under the contract. That the Commissioner may. In the case at bar. 1067-A dated January 1. equipment. penalty. the government through the Office of Energy Affairs (now Department of Energy. is legally mandated to pay the taxes due from it. The local government unit concerned may also enforce the collection of the basic real property tax by civil action in any court of competent jurisdiction. lest governmental operations suffer due to diminution of much needed funds. Definitely. 000. Finally." TOLENTINO v. division or political subdivision thereof and subject to the provisions of the Act of Congress. for the first time. . Court of Tax Appeals and Section 5 of RA 1435 which reads: Sec. 117359 July 23. the National Power Corporation shall be exempt from all taxes. Respondent Court further ruled that the claims for refund which prescribed and those which were not filed at the administrative level must be excluded. it cited our pronouncement in Commissioner of Internal Revenue v. 1971. Held: It would suffice to say that since the law granted the press a privilege. the law stated as follows: To facilitate payment of its indebtedness. No.A. From July 1. whereby such subsidies shall automatically be considered as both revenue and expenditure of the General Fund. 142 and Sec. 1936. 1435 to the refund of 25% of the amount of specific taxes it actually paid on various refined and manufactured mineral oils and other oil products taxed under Sec. On June 13.000. fees. issued under the authority of this Act shall be exempt from the payment of all taxes by the Commonwealth of the Philippines. representing 25% of the specific taxes actually paid on the abovementioned fuels and oils that were used by petitioner in its operations as forest concessionaire. the increase to be wholly subscribed by the Government.00 was appropriated out of the funds in the Philippine Treasury for the purpose of organizing the NPC and conducting its preliminary work. however. In so ruling. Being included in the purchase price of the oil products. with said capital stock wholly subscribed to by the Government. that organizations otherwise exempted by law from the payment of such taxes/duties may ask for a subsidy from the General Fund in the exact amount of taxes/duties due: provided. the specific taxes paid by the oil companies were eventually passed on to the user. barter.A. Issue: Whether or not RA 7116 is unconstitutional. as amended. Whether or not petitioner is entitled under Republic Act No." 28 We disagree. the State does not forever waive the exercise of its sovereign prerogative.the buildings. On November 3.R. 120 was enacted creating the National Power Corporation. the payment of any and all NPC loans. R. CRTBA asserts that R. 1992 clarifying the said Decision.A. MACARAIG G. . It was expressly stated that: Any such loan or loans shall be exempt from taxes. charges.00 divided into 1. On June 18. its provinces. 1961. which facts shall be stated upon the face of said bonds. 000. Republic Act No. and restrictions of the Republic of the Philippines. R. . as primary obligor. charges. fees. No tax provision was incorporated in said Act. A chronological review of the NPC laws will show that it has been the lawmaker's intention that the NPC was to be completely tax exempt from all forms of taxes — direct and indirect. The sum of P250. "there is no tax exemption solely on the. 153 and Sec. 1995 235 SCRA 630 Topic: Nature of Tax Exemption Facts: The VAT is levied on the sale.000. to incur other types of indebtedness. petitioner filed before Respondent Commissioner of Internal Revenue (CIR) a claim for refund in the amount of P120.A. 000. branch. petitioner asserts that "equity and justice demand that the computation of the tax refunds be based on actual amounts paid under Sections 153 and 156 of the NIRC. aside from indebtedness incurred by flotation of bonds. exemption from all forms of taxes and impositions without distinguishing between those that are direct and those that are not. Tax exemptions are undoubtedly to be construed strictly but not so grudgingly as knowledge that many impositions taxpayers have to pay are in the nature of indirect taxes. twenty-five per centum of the specific tax paid thereon shall be refunded by the Collector of Internal Revenue upon submission of proof of actual use of oils and under similar conditions enumerated in subparagraphs one and two of section one hereof. amending section one hundred forty-two of the Internal Revenue Code: Provided. 88291 June 8. duties. . No 2641 was enacted converting the NPC from a public corporation into a stock corporation with an authorized capital stock of P100. 357. the petitioner in this case. To limit the exemption granted the National Power Corporation to direct taxes notwithstanding the general and broad language of the statue will be to thwart the legislative intention in giving DAVAO GULF LUMBER CORPORATION v. 357 was enacted authorizing the President of the Philippines to guarantee. The tax provision related to the repayment of these loans was not amended or deleted. 1998 Topic: Grounds for Tax Exemption Facts: Petitioner is a licensed forest concessionaire possessing a Timber License Agreement granted by the Ministry of Natural Resources (now Department of Environment and Natural Resources). 1993 Topic: Grounds for Tax Exemption Facts: Just like lightning which does strike the same place twice in some instances.A.R. and three disinterested persons. otherwise known as the Tydings McDuffle Law. On December 13. imposts. On the same date. shall pay income taxes.000. 1949. C. mainly to develop hydraulic power from all water sources in the Philippines. Held: All units of government. Issue: Whether or not NPC is exempted from payment of tax. contributions and restrictions of the Republic of the Philippines. SECRETARY OFFINANCE October 30. 7116 is unconstitutional as it violates the rule that taxes should be uniform and equitable.00 ceiling in R. It is an unquestioned fact that petitioner complied with the procedure for refund.000 shares having a par value of P100. that a procedure shall be established by the Secretary of Finance and the Commissioner of the Budget. Petitioner. 2.00. On June 17.11. approved March 24. No 4897 was enacted. 1934. The claim was based on Insular Lumber Co. No. Issues: 1. infrastructures and machineries of PNOC-EDC to satisfy the payment of the real property tax delinquency. No tax provision was incorporated in said Act. 358 was enacted expressly authorizing the NPC.00 from the US$50.000. 156 of the 1977 (Sec.000. or exchanged of the goods and properties as well as on the sale of services. Said oil companies paid the specific taxes imposed. R. No. Rio Tuba Nickel Mining Corporation and subsequent Resolution dated June 15. including the submission of proof of the actual use of the aforementioned oils in its forest concession as required by the abovequoted law.00 each. further. or by any authority. all attesting that the said manufactured diesel and fuel oils were actually used in the exploitation and operation of its forest concession. COMMISSIONER OF INTERNAL REVENUE and COURT OF APPEALS G. No. On June 4. 1960. 1967. R. 2055 was enacted increasing the total amount of foreign loans NPC was authorized to incur to US$100. which it used exclusively for the exploitation and operation of its forest concession. The proceeds of the additional tax on manufactured oils shall accrue to the road and bridge funds of the political subdivision for whose benefit the tax is collected: Provided. the law could take back the privilege anytime without offense to the Constitution. cities and municipalities. 1982 petitioner purchased.A. cities and municipalities. No. He was also authorized to contract on behalf of the NPC with the International Bank for Reconstruction and Development (IBRD) for NPC loans for the accomplishment of NPC's corporate objectives and for the reconstruction and development of the economy of the country. R. That whenever any oils mentioned above are used by miners or forest concessionaires in their operations. NPC's capital stock was increased again to P300.00 with the increase to be wholly subscribed by the Government. ground of equity. Commonwealth Act No. No. imposts. refined and manufactured mineral oils as well as motor and diesel fuels. submitted to the CIR the affidavits of its general manager. in support of its claim for refund. 120. . 1982. 5. 1980 to January 31. 6395 was enacted revising the charter of the NPC.A. . customs duties and other taxes and fees are imposed under revenues laws: provided. On June 17. 3043 was enacted increasing the abovementioned authorized capital stock to P250. The reason is simple: by granting exemptions. 000. the president of the Philippine Wood Products Association. this matter of indirect tax exemption of the private respondent National Power Corporation (NPC) is brought to this Court a second time. On September 10.000. RA7116 seeks to wider the tax base of the existing VAT system and enhance it administration on by amending the NIRC. No. from various oil companies. R. . duties. 000. on the sale of said products. as required in section twenty-six of the Philippine Highway Act of 1953. No. MACEDA v. .A. its provinces. The main source of funds for the NPC was the flotation of bonds in the capital markets and these bonds . vs. As to the pertinent tax exemption provision. a public corporation. That no new road shall be constructed unless the routes or location thereof shall have been approved by the Commissioner of Public Highways after a determination that such road can be made part of an integral and articulated route in the Philippine Highway System.A. under Sections 153 and 156 of the 1977 National Internal Revenue Code (NIRC). May there be a tax exemption solely on the ground of equity? Held: The Court Held that the claim for refund should indeed be computed on the basis of the amounts deemed paid under Sections 1 and 2 of RA 1435. According to an eminent authority on taxation. 145 of the 1939) National Internal Revenue Code.825. including government-owned or controlled corporations. No tax exemption was incorporated in said Act. further.000. 1958. absolutely and unconditionally. 7925 amended the franchise of petitioner and in effect restored its exemptions from local taxes. CITY OF KIDAPAWAN G. In the case of petitioner.70. when it does the tax becomes a part of the price which the purchaser must pay. No. the BLGF is not an administrative agency whose findings on questions of fact are given weight and deference in the courts. he issued a warrant of levy on the 701-hectare MAGRA for failure to pay real property taxes. v. PNOC-EDC built a 104-megawatt power plant within the MAGRA which produces electricity through turbines using steam extracted from the MAGRA as fuel. He pays or may pay the seller more for the goods because of the seller's obligation.985.910. merely avoids payment by the seller of a tax on the amount of the tax.A. Held: The tax exemption must be expressed in the statute in clear language that leaves no doubt of the intention of the legislature to grant such exemption. later made to pay a special use tax on the cost of paper and ink which made these items "the only items subject to the use tax that were component of goods to be sold at retail. Cotabato notified PNOCEDC of its tax delinquency after which. COMMISSIONER OF INTERNAL REVENUE 20 SCRA 1056 August 17. No. Then it can no longer be contended that a sales tax is a tax on the purchaser.23 of R.A.S. This case does not concern the regularity of performance of the BLGF in the exercise of its duties. Petitioner contends that courts should not set aside conclusions reached by the BLGF because its function is precisely the study of local tax problems and it has necessarily developed an expertise on the subject.O. 166651 December 9. 1999. (PLDT) applied for a Mayor's Permit to operate its Davao Metro Exchange.26 a highly specialized court which performs judicial functions as it was created for the review of tax cases. REPUBLIC OF THE PHILIPPINES vs. Article VI of the Constitution. petitioner Philippine Long Distance Telephone Co. the law merely subjects the press to the same tax burden to which other businesses have long ago been subject. to wit. that the purchaser does not pay the tax. and to the Voice of America an agency of the United States Government. Thereafter. storing or consuming tangible goods. for the use tax on the privilege of using. no law granting any tax exemption shall be passed without the concurrence of a majority of all Members of Congress. in an effort to broaden the base of the tax. Hence. the PNOC-EDC would furnish the necessary services. It does enjoy this presumption. with the result that the tax applied only to 13 out of 124 publishers in Louisiana. No. 7925.2. namely.A. 1967 Topic: Nature of Tax Exemption Facts: The petitioner is a corporation engaged in the manufacture and sale of oxygen and acetylene gases. among others. in so far as the circular of the Bureau of Internal Revenue would give the tax exemptions in the Agreement an expansive construction it is void. R. A decision to absorb the burden of the tax is largely a matter of economics. 7716. the exemption must be interpreted in strictissimi juris against the taxpayer and liberally in favor of the taxing authority.681. American Press Co. The petitioner denied liability for the payment of the tax on the ground that both the NPC and the VOA are exempt from taxation. but this has nothing to do with the question in this case. 2 In a letter dated May 31.R. Issue: Whether or not PLDT is exempt from tax. The method of listing the price and the tax separately and defining taxable gross receipts as the amount received less the amount of the tax added.72 for the first to the fourth quarter of 1999. The sales to the NPC amounted to P145.A 7925. Accordingly its levy on the sales made to tax-exempt entities like the NPC is permissible. Petitioner likewise argues that the BLGF enjoys the presumption of regularity in the performance of its duty. the petitioner the payment of P12.72 for the period covering the first to the fourth quarter of 1999 and that it is not entitled to a refund of taxes paid by it for the period covering the first to the third quarter of 1998. 23 of R. Other exemptions from the VAT. 2005 Topic: Nature of Tax Exemption Facts On March 24. 2001 Topic: Nature of Tax Exemption Facts: On January 1999. Under the contract. Thus the exemption provided in the service contract cannot be .. Subsequently. covering the tax period from 1993-2002. 1992 Issue: Whether or not PNOC-EDC is exempt from tax. NO. in withdrawing the exemption. the government through the Office of Energy Affairs (now Department of Energy. in the local legislative bodies. but that is all and the amount added because of the tax is paid to get the goods and for nothing else. much less can a claim resting on statutory grant. It is thus different from the tax involved in the cases invoked by the Philippine Press Institute (PPI). in Minneapolis Star & Tribune Co. Supreme Court held that the differential treatment of the press "suggests that the goal of regulation is not related to suppression of expression. technology and financing for the geothermal operations subject to the direct supervision of the DOE. pursuant to the following-provisions of the National Internal Revenue Code. the withdrawal of the exemption was only for those previously or presently enjoying the privilege as of January 1. Nor is it true that only two exemptions previously granted by E. in addition to exemptions which are partially withdrawn. it does not appear that. Consequently. The censorial motivation for the law was thus evident." It would therefore appear that even a law that favors the press is constitutionally suspected. and such goal is presumptively unconstitutional.. Issue: Whether or not Philippine Acetylene Co. no basis for claiming expertise for the BLGF that administrative agencies are said to possess in their respective fields. dated June 2. 866. but the correctness of its interpretation of a provision of law.A. 273 are withdrawn "absolutely and unqualifiedly" by R. the BLGF opined that Sec. 233. it follows that it must likewise be exempt from the tax being collected by the City of Davao because the grant of tax exemption to Smart and Globe ipso facto extended the same exemption to it. we hold that petitioner is liable to pay local franchise taxes in the amount of P3.60 as deficiency sales tax and surcharge. we hold that §23 of R.985. v.27 In contrast. 1992. Held: The power to tax and to grant tax exemptions is vested in the Congress and. however. and other related matters. he sent a notice of sale of delinquent real property to PNOC-EDC declaring that delinquent real property will be sold through public auction. PHILIPPINE ACETYLENE CO. on account of which the respondent Commission of Internal Revenue assessed against. v. such as those previously granted to PAL. These large papers were critical of Senator Huey Long who controlled the state legislature which enacted the license tax. Thus. 7925 cannot be considered as having amended petitioner's franchise so as to entitle it to exemption from the imposition of local franchise taxes. No. Under Section 28(4). It was. Applying the rule of strict construction of laws granting tax exemptions and the rule that doubts should be resolved in favor of municipal corporations in interpreting statutory provisions on municipal taxing powers. The effect is still the same. No. Held: If a claim of exemption from sales tax based on state immunity cannot command assent. 80 L. CITY OF DAVAO G. To be sure. It does not matter that an additional amount is billed as tax to the purchaser. 1992. an agency of the Philippine Government. 1998. therefore. 297 U.A. petroleum concessionaires. the press was not.Indeed. During the period from June 2. No. enterprises registered with the Export Processing Zone Authority. is exempted from tax. the BLGF was created merely to provide consultative services and technical assistance to local governments and the general public on local taxation. PHILIPPINE LONG DISTANCE TELEPHONE COMPANY. It may indeed be that the economic burden of the tax finally falls on the purchaser. and many more are likewise totally withdrawn. DOE) entered into a service contract with PNOC-EDC. real property assessment.S. INC. the press was exempted from both taxes. Instead. in lieu thereof. to a certain extent. In sum. while those to the VOA amounted to P1. to exclusively conduct geothermal operations within the MAGRA.23 of R. 660 (1936) was found to be discriminatory because it was laid on the gross advertising receipts only of newspapers whose weekly circulation was over 20. Petitioner contended that it was exempt from the payment of franchise tax based on an opinion of the Bureau of Local Government Finance (BLGF) on R. 7925." The U. 143867 AUGUST 22. paragraph (a) of the service contract which was executed on March 24. in approving Sec. We therefore hold that the tax imposed by section 186 of the National Internal Revenue Code is a tax on the manufacturer or producer and not a tax on the purchaser except probably in a very remote and inconsequential sense. But the tax burden may not even be shifted to the purchaser at all.. Ed. 3 petitioner protested the assessment of the local franchise tax and requested a refund of the franchise tax paid by it for the year 1997 and the first to the third quarters of 1998. Thereafter. It is a familiar learning in the American law of taxation that tax exemption must be strictly construed and that the exemption will not be held to be conferred unless the terms under which it is granted clearly and distinctly show that such was the intention of the parties. the interpretation of Sec.NO. INC. The authorities cited by petitioner pertain to the Court of Tax Appeals. There is. and demanded from. Congress intended it to operate as a blanket tax exemption to all telecommunications entities. And..000. it made various sales of its products to the National Power Corporation. Inc. 1953 to June 30. 681. The license tax in Grosjean v. The question raised by petitioner is a legal question. PNOC-EDC avers that the LGC which took effect on January 1. Respondent City of Davao withheld action on the application pending payment by petitioner of the local franchise tax in the amount of P3. Minnesota Comm'r of Revenue. 1992 did not withdraw the exemption provided under Section 6. the City Treasurer of Kidapawan. It further it argues that because Smart and Globe are exempt from the franchise tax.683. On the other hand. even if it is granted. the tax was found to be discriminatory because although it could have been made liable for the sales tax or. a government owned or controlled corporation created and existing under the Corporation Code. 1958. and thus the property is not being used exclusively for educational purposes. Where the law does not distinguish. The Commissioner of Internal Revenue issued an assessment to private respondent. and improvements used exclusively for religious. 140. Abra. As the Solicitor COMMISIONER OF INTERNAL REVENUE v. P415. particularly when such question is on whether to apply a strict construction or a liberal one on statutes that grant tax exemptions to "religious. Taxes are what we pay for civilized society. Otherwise stated. and all lands. The treasurers served upon the petitioner a Notice of Sale on 8 July 1972. which is complimentary to the main or primary purpose — educational. pursuant to its religious. we find no reason for holding that respondent Commissioner erred in not considering copra as an "agricultural food product" within the meaning of Section 103(b) of the NIRC. real or personal. On the other hand. In reply.01including surcharge and interest. It cites the opinion of Dr. nor by jurisprudence. which expressly grants exemption from realty taxes for "Cemeteries. On 12 April 1973. The petitioner contends that the Bureau of Food and Drug of the Department of Health and not the Bureau of Internal Revenue (BIR) is the competent government agency to determine the proper classification of food products. finding merit in YMCA‘s motion for reconsideration. The law frowns against exemptions from taxation and statutes granting tax exemptions are thus construed strictissimi juris against the taxpayer and liberally in favor of the taxing authority. paragraph 3. Parenthetically. Held: The exemption claimed by the YMCA is expressly disallowed by the very wording of the last paragraph of then Section 27 of the NIRC which mandates that the income of exempt organizations (such as the YMCA) from any of their properties. contractor‘s and income taxes. offered the highest bid of P 6. filed a letter dated October 8. churches and parsonages or convents appurtenant thereto. that while this Court allows a more liberal and non-restrictive interpretation of the phrase "exclusively used for educational purposes" as provided for in Article VI. Article VI. 1985. for deficiency income tax. be subject to the tax imposed by the same Code. AQUINO 162 SCRA 113 June 15. a consideration of the question of construction must not even begin." The last paragraph of Section 27. argue that the opinion of the BIR. DEPARTMENT OF FINANCE 238 SCRA 63 November 10. but because the first floor thereof is being used for commercial purposes." This makes from the property of the organization taxable. The law does not make a distinction. not because the second floor of the same is being used by the Director and his family for residential purposes. is entitled to great respect. The certificate of sale was correspondingly issued to him. However. since only a portion is used for purposes of commerce. Abra. the Court of Appeals denied the Commissioner‘s motion for reconsideration. Thus. reasonable emphasis has always been made that exemption extends to facilities which are incidental to and reasonably necessary for the accomplishment of the main purposes. PNOC-EDC has not proven that it is entitled to exemption from the payment of real property tax. COURT OF APPEALS 29 SCRA 83 October 14. especially the young people. 1991. then municipal mayor of Bangued. v. the present petition for prohibition and injunction seeking to nullify Revenue Memorandum Circular No. Verba legis non est recedendum. the trial court correctly arrived at the conclusion that the school building as well as the lot where it is built should be taxed. should be "subject to the qualification that the income from the properties must arise from activities 'conducted for profit' before it may be considered taxable. MISAMIS ORIENTAL ASSO v. Because the last paragraph of said section unequivocally subjects to tax the rent income of the YMCA from its real property. 1998 Topic: Construction of Statutes Granting Tax Exemptions Facts: Private Respondent YMCA is a non-stock . thus exempting the petitioner from payment of the Value Added Tax (VAT)? Held: In the case at bar. It is axiomatic that where the language of the law is clear and unambiguous. holding that the second floor of the building is being used by the director for residential purposes and that the ground floor used and rented by Northern Marketing Corporation. the Local Government Code specifically enumerates the entities exempt from real property taxation and PNOC-EDC is not one of them. Quintin Kintanar of the Bureau of Food and Drug to the effect that copra should be considered "food" because it is produced from coconut which is food and 80% of coconut products are edible. individually or collectively. The Commissioner elevated the case to the Court of Appeals which initially decided in its favor by reinstating the assessment of deficiency fixed. On 6 July 1972. It alleges that prior to the issuance of Revenue Memorandum Circular (RMC) 47-91 on June 11. 1988 Topic: Laws Granting Tax Exemption: Constitution Facts: Petitioner Abra Valley College is an educational corporation and institution of higher learning duly incorporated with the SEC in 1948. it is only fair that half of the assessed tax be returned to the school involved. a reading of said paragraph ineludibly shows that the income from any property of exempt organizations. regardless of how that income is used — whether for profit or for lofty non-profit purposes. while the use of the second floor of the main building in the case at bar for residential purposes of the Director and his family. the tax exemption claimed by YMCA on income it derived from renting out its real property. the lease of the first floor thereof to the Northern Marketing Corporation cannot by any stretch of the imagination be considered incidental to the purpose of education Under the 1935 Constitution. paragraph 3 of the 1935 Philippine Constitution. As previously stated. ABRA VALLEY COLLEGE.615. The rental income is taxable regardless of whence such income is derived and how it is used or disposed of. as well as that arising from any activity it conducts for profit. 1996. is taxable. charitable or educational purposes . its express terms must be applied.000 on public auction involving the sale of the college lot and building. contract of Appeals which initially decided in its favor by reinstating the assessment of deficiency fixed. which implemented Value Added Tax (VAT) Ruling 190-90.YMCA filed a petition for review at the Court of Tax Appeals. in the total amount of . Private respondent formally protested the assessment and.31 as realty taxes. has no authority to grant the same. Moreover. 47-91 and enjoin the collection by respondent revenue officials of the Value Added Tax (VAT) on the sale of copra by members of petitioner organization. the parties entered into a stipulation of facts adopted and embodied by the trial court in its questioned decision. as the government agency charged with the implementation and interpretation of the tax laws. are engaged in the buying and selling of copra in Misamis Oriental. The respondents. On February29. The petitioner filed a complaint on 10 July 1972 in the court a quo to annul and declare void the Notice of Seizure and the Notice of Sale of its lot and building located at Bangued. respectively) and issued a Notice of Seizure upon the petitioner for the college lot and building (OCT Q-83) for the satisfaction of said taxes thereon. on the contrary. Issue: Whether or not the college lot and building of the petitioner are not exempt from property taxes and ordering petitioner to pay 5. respondents represent departments of the executive branch of government charged with the generation of funds and the assessment. or are the lifeblood of the nation.1995grantingsaid motion of YMCA by affirming the CTA‘s decision in toto. copra was classified as agricultural food product under Section 103(b) of the National Internal Revenue Code and. Section 22. the sale being held on the same day. educational and charitable objectives. may find justification under the concept of incidental use. the use of the school building or lot for commercial purposes is neither contemplated by law. the appellate court reversed itself and promulgated the first assessed resolution dated September 28. the Commissioner denied the claims of YMCA. the Municipal and Provincial treasurers (Gaspar Bosque and Armin Cariaga. representing the government in the execution of the contract. INC. Inc. Thus. Issue: Is copra an agricultural food product for purposes of the provisions of the National Internal Revenue Code (NIRC). 140. Issue: Whether or not the YMCA is exempted from rental income derived from the lease of its properties.non-profit institution. The trial court ruled for the government. Paterno Millare. the YMCA argues. The law does not look with favor on tax exemptions and that he who would seek to be thus privileged must justify it by words too plain to be mistaken and too categorical to be misinterpreted. Hence. as a supplement to its basic protest. levy and collection of taxes and other imposts. a commercial establishment." This argument is erroneous. the Court is duty-bound to abide strictly by its literal meaning and to refrain from resorting to any convoluted attempt at construction. Held: Due to its time frame.given effect because the DOE. deficiency expanded withholding taxes on rentals and professional fees and deficiency withholding tax on wages. exempt from VAT at all stages of production or distribution. neither should we. It must be stressed however. on reconsideration. is a domestic corporation whose members. charitable and educational properties or institutions. on the solitary but unconvincing ground that the said income is not collected for profit but is merely incidental to its operation. 1994 Topic: Construction of Statutes Granting Tax Exemptions Facts: Petitioner Misamis Oriental Association of Coco Traders. The CTA ruled in favor of the YMCA. Respondent Court of Appeals committed reversible error when it allowed.31. buildings. The phrase "any of their activities conducted for profit" does not qualify the word "properties. of the then 1935 Philippine Constitution. However. the constitutional provision which finds application in the case at bar is Section 22. for non-payment of real estate taxes and penalties amounting to P5. Dr. therefore. which conducts various programs and activities that are beneficial to the public. 00. 4114 on the Advance Sales Tax is not necessarily correct in the light of the above-cited provision of the Tariff and Customs Code. or exported to. The refund for alleged overpaid customs duties amounting to P 5. which they could shift to NPC if NPC did not enjoy exemption from indirect taxes. R. MACARAIG G. R. 000. C. this matter of indirect tax exemption of the private respondent National Power Corporation (NPC) is brought to this Court a second time.A. 88291 June 8. We have scrutinized the decision rendered by the tax court in C. on the one hand. shall certify the same to the Commissioner with his recommendation together with all necessary papers and documents. otherwise known as the Tydings McDuffle Law. No tax exemption was incorporated in said Act. On Aug 22. 2001 Topic: Construction of Statutes Granting Tax Exemptions Facts: CTA Dismissed petitioners motion to grant refund on allegedly overpaid impost duties. on its various importations of milk and milk products in the amount of 5M. who upon receipt of such claim. 1958. division or political subdivision thereof and subject to the provisions of the Act of Congress.) v. fees. any outright award for the refund of allegedly overpaid customs duties in favor of petitioner on its subject sixteen (16) importations is not favored in this jurisdiction unless there is a direct and clear finding thereon. No. On the same date. The sum of P250.000.T. Petitioners were assessed customs duties and advance sales taxes by Collector of Customs for each separate importations on the basis of the published Home Consumption Value. and restrictions of the Republic of the Philippines. . cities and municipalities. If such claim is found correct and in accordance with law.A. Republic Act No.00 with the increase to be wholly subscribed by the Government. its provinces. This means. Under Section 103(a) of the National Internal Revenue Code.. Upon receipt by the Commissioner of such certified claim he shall cause the same to be paid if found correct. Simply stated. NPC's capital stock was increased again to P300. NESTLE PHILIPPINES.T. . Case was filed with CA on certiorari (Rule 45) but dismissed for CTA jurisdiction is not concurrent with the appellate jurisdiction of Commissioner since there was no decision yet from Collector from Customs. it is not intended for human consumption.00 divided into 1. is not exempt from the tax.A. the NPC must beheld exempted from absorbing the economic burden of indirect taxation. Claim for Refund of Duties and Taxes and Mode of Payment. duties.R. ―Customs duties‖ is ‗the name given to taxes on the importation and exportation of commodities. 1708. No.000. the National Power Corporation shall be exempt from all taxes. By the very nature of indirect taxation. Commonwealth Act No. on the other hand. The Commissioner of Internal Revenue is not bound by the ruling of his predecessors. a foreign country. This power of taxation being a high prerogative of sovereignty. The main source of funds for the NPC was the flotation of bonds in the capital markets and these bonds . No.A. 1949. This means also. like a trader or dealer. 1993 Topic: Construction of Statutes Granting Tax Exemptions: Exceptions Facts: Just like lightning which does strike the same place twice in some instances. petitioner finally failed a claim for refund of before BIR and the following day. 1990. duties. INC. nobody eats copra for food. 4114 and found no clear indication therein that the tax court has ruled on petitioner‘s claims for alleged overpayment of customs duties. fees.A. He was also authorized to contract on behalf of the NPC with the International Bank for Reconstruction and Development (IBRD) for NPC loans for the accomplishment of NPC's corporate objectives and for the reconstruction and development of the economy of the country.A. R. The reclassification had the effect of denying to the petitioner the exemption it previously enjoyed when copra was classified as an agricultural food product under Section 103(b) of the National Internal Revenue Code. No. the Collector shall certify the same to the Commissioner with his recommendation together with all the necessary papers and documents. mainly to develop hydraulic power from all water sources in the Philippines. 3043 was enacted increasing the abovementioned authorized capital stock to P250. the increase to be wholly subscribed by the Government. charges. its relinquishment is never presumed. The tax provision related to the repayment of these loans was not amended or deleted. MACEDA v. No tax provision was incorporated in said Act.A. R. R. On June 18. Any reduction or diminution thereof with respect to its mode or its rate must be strictly construed. its provinces.000. charges. 6395 was enacted revising the charter of the NPC.000 shares having a par value of P100.489 representing the overpaid advance and Sales Taxes. On June 13. or by any authority. Accordingly. "copra per se is not food. petitioner‘s contention that its claims for refund of alleged overpayment of customs duties may be deemed established from the findings of the tax court in C. 1971. that the oil companies which wish to sell to NPC absorb all or part of the economic burden of the taxes previously paid to BIR. On June 17. aside from indebtedness incurred by flotation of bonds. Issue: Whether or not NPC is exempted from payment of tax. The fact alone that the tax court. imposts. To the contrary.000. NO. contributions and restrictions of the Republic of the Philippines.00 was appropriated out of the funds in the Philippine Treasury for the purpose of organizing the NPC and conducting its preliminary work. as amended.00 each. the economic burden of such taxation is expected to be passed on through the channels of commerce to the user or consumer of the goods sold. The right to claim for refund of customs duties is specifically governed by Section 1708 of the Tariff and Customs Code. On November 3. 1936. No tax provision was incorporated in said Act. COURT OF APPEALS G.000. It was expressly stated that: Any such loan or loans shall be exempt from taxes. 1967. Held: The recommended remand of this case to the CTA is warranted for the proper verification and determination of the factual basis and merits of this petition and in order that the ends of substantial justice and fair play may be subserved.00 from the US$50. Held: A chronological review of the NPC laws will show that it has been the lawmaker's intention that the NPC was to be completely tax exempt from all forms of taxes — direct and indirect. 1961. No. which facts shall be stated upon the face of said bonds. Thus. 1934. The Court rules and declares that the oil companies which supply bunker fuel oil to NPC have to pay the taxes imposed upon said bunker fuel oil sold to NPC. 2055 was enacted increasing the total amount of foreign loans NPC was authorized to incur to US$100. 1960. No. approved March 24. therefore. On October 1986. . that the NPC may refuse to pay the part of the "normal" purchase price of bunker fuel oil which represents all or part of the taxes previously paid by the oil companies to BIR. the Collector to whom such customs duties are paid and upon receipt of such claim is mandated to verify the same by the records of his Office." That previous Commissioners considered it so. (FORMERLY FILIPRO. . imposts. the overruling of decisions is inherent in the interpretation of laws. is not reason for holding that the present interpretation is wrong. with said capital stock wholly subscribed to by the Government. 120. has awarded in favor of the petitioner the refund of overpaid Advance Sales Tax involving the same sixteen (16) importations does not in any way excuse the petitioner from proving its claims for refund of alleged overpayment of customs duties. to incur other types of indebtedness. On September 10. The sale made by any other person or entity. under Section 103(b) the sale of agricultural food products in their original state are exempt from VAT at all stages of production or distribution regardless of who the seller is. shall verify the same by the records of his Office. . which provides that ―Sec. for the first time. the sale of agricultural non-food products in their original state is exempt from VAT only if the sale is made by the primary producer or owner of the land from which the same are produced.A. issued under the authority of this Act shall be exempt from the payment of all taxes by the Commonwealth of the Philippines. a public corporation. Because. 000. 4114. filed the petition for review with CTA which ordered BIR to refund P 4. On June 4. Petitioners paid the same but under protests.A. the law stated as follows: To facilitate payment of its indebtedness.00 ceiling in R. Any claim for refund of customs duties. the tariff or tax assessed upon merchandise imported from. that is. 000. in C. Issue: Whether or not petitioner is entitled for alleged overpayment of customs duties on importations thus be remanded to CTA for further review. This is precisely one of the reasons why the Court of Appeals upheld the dismissal of the case on the ground that the CTA‘s jurisdiction under the Tariff and Customs Code is not concurrent with that of the respondent Commissioner of Customs due to the absence of any certification from the Collector of Customs of Manila. R.General contends. cities and municipalities. If NPC nonetheless purchases such oil from the oil companies — because to do so may be more convenient and ultimately less costly for NPC than NPC itself importing and hauling and storing the oil from overseas — NPC is entitled to be reimbursed by the BIR for that part . No. takes the nature of tax exemptions that must be construed strictissimi juris against the claimants and liberally in favor of the taxing authority. branch. INC. the NPC has been exempted from both direct and indirect taxation.000. 357. We are of the view that the said recommendation is in accord with the provisions of the Tariff and Customs Code as hereinafter discussed. 358 was enacted expressly authorizing the NPC. As to the pertinent tax exemption provision. On the other hand. Case No. 357 was enacted authorizing the President of the Philippines to guarantee. and the same must be couched in clear and unmistakable terms in order that it may be applied.R.A. No 2641 was enacted converting the NPC from a public corporation into a stock corporation with an authorized capital stock of P100. Case No. No 4897 was enacted. 120 was enacted creating the National Power Corporation.000. – All claims for refund of duties shall be made in writing and forwarded to the Collector to whom such duties are paid. the payment of any and all NPC loans. however. 000.000. 134114 July 6.A. as primary obligor. .‖ It is clear from the foregoing provision of the Tariff and Customs Code that in all claims for refund of customs duties. Case No.T. absolutely and unconditionally. and if found to be correct and in accordance with law. On June 17. petition filed a petition for review with CTA dismissed for what of jurisdiction.008M were left with the collector of customs undecided after almost 6 years. 396. credits and indebtedness contracted under this subsection and the payment of the principal.A.A. well-entrenched is the rule that rulings and circulars. The Court of Tax Appeals explained that the subject deficiency excise tax assessment resulted from private respondent's use of the computation mandated by BIR Ruling 473-88 dated 4 October 1988 as basis for computing the fifteen percent (15%) ad valorem tax due on its removals of cigarettes from 2 November 1990 to 22 January 1991.00 with the increase to be wholly subscribed by the Government. is a domestic corporation engaged in the manufacture and sale of cigar and cigarette products. shall also be exempt from all direct and indirect taxes. 6395 was enacted revising the charter of the NPC. in G.000. charges. Section 8(b). On June 13. No. 40. imposts. 1936. No.R. Section 1 — No person shall be deprived of . charges. No. Held: . Its authorized capital stock was raised to P2. The tax provision related to the repayment of these loans was not amended or deleted.000. Petitioners claim to be taxpayers adversely affected by the continued implementation of the amendatory legislation. or any of its agencies and political subdivisions. On June 17. credit or indebtedness incurred under this Act. 109446. 273.A. 1967. this matter of indirect tax exemption of the private respondent National Power Corporation (NPC) is brought to this Court a second time.00 each. COMMISSIONER v. 1971. No. 380 was issued giving extra powers to the NPC to enable it to fulfill its role under aforesaid P. Private respondent did not question the correctness of the above BIR ruling. other charges and restrictions. R. 357 was enacted authorizing the President of the Philippines to guarantee.A. 2-93.00. On the same date. and the NPC was authorized to borrow a total of US$1. duties. The Congress shall evolve a progressive system of taxation. No. Revenue Regulations No. to incur other types of indebtedness. Santos to Insular-Yebana Tobacco Corporation allowing the latter to exclude the value-added tax (VAT) in the determination of the gross selling price for purposes of computing the ad valorem tax of its cigar and cigarette products in accordance with Sec. Issue: Whether or not the foreign loans of NPC is exempt from tax.000. 000. R.00 in foreign loans. R. NPC's capital stock was increased again to P300.D. rules and regulations promulgated by the Commissioner of Internal Revenue would have no retroactive application if to so apply them would be prejudicial to the taxpayers. Republic Act No. including import restrictions. aside from indebtedness incurred by flotation of bonds. The sum of P250. its provinces. materials and supplies by the Corporation. cities and municipalities.R.D. its total domestic indebtedness was pegged at a maximum of P3. fees. mainly to develop hydraulic power from all water sources in the Philippines. On November 3. 109289. imposts.00 at any one time. In fact.of the buying price of NPC which verifiably represents the tax already paid by the oil company-vendor to the BIR. No. 1997 TAN v. Article VI. No tax exemption was incorporated in said Act. duties. No tax provision was incorporated in said Act. by the Republic of the Philippines.A. private respondent would be prejudiced by the retroactive application of the revocation as it would be assessed deficiency excise tax. Commonwealth Act No. BIR Circular 473-88 was issued by Deputy Commissioner Eufracio D. On 7 May 1991 private respondent received a letter dated 26 April 1991 from the Commissioner of Internal Revenue assessing it deficiency Ad Valorem Tax (AVT) in the total amount of Four Hundred Eighty-Eight Thousand Three Hundred Ninety-Six Pesos and Sixty-Two Centavos (P488. and. 2055 was enacted increasing the total amount of foreign loans NPC was authorized to incur to US$100.R. Without doubt. 109289. No tax provision was incorporated in said Act. 1949. 017-91. interest and other charges thereon.A. No. 1958. equipment. 358 was enacted expressly authorizing the NPC. No.000.000. as amended. 2-93. As to the pertinent tax exemption provision.R. 1994 Topic: Validity of Revenue Rules and Regulation Facts: These two consolidated special civil actions for prohibition challenge. Section 26(1) — Every bill passed by the Congress shall embrace only one subject which shall be expressed in the title thereof. for the first time. 120. Topic: Revenue Rules and Regulation/ Administrative/BIR Rulings and Opinions Facts: ALHAMBRA INDUSTRIES. on the removals of cigarette products from their place of production during the period 2 November 1990 to 22 January 1991.A. 117982 February 6. other charges and restrictions. .A. the validity of Section 6. equipment. as where injustice will result to the taxpayer. In G.000. as well as the importation of machinery. .000. this admits of exceptions in the interest of justice and fair play.00 from the US$50. 88291 June 8. as well as the importation of machinery. petitioners. it is asserted that the enactment of Republic Act No. imposts. contributions and restrictions of the Republic of the Philippines. credit or indebtedness incurred under this Act. the law stated as follows: To facilitate payment of its indebtedness. fees. its provinces. and restrictions of the Republic of the Philippines. materials. CA G. No. or any of its agencies and political subdivisions. also commonly known as the Simplified Net Income Taxation Scheme ("SNIT"). No. 1993 Topic: Tax Treaties/ International Agreements Facts: Just like lightning which does strike the same place twice in some instances.000. fees. 3043 was enacted increasing the abovementioned authorized capital stock to P250. No. P. by the Corporation. 000. inclusive of increments. 109289 October 3.000.R.000.00 divided into 1. 1960. shall also be exempt from all taxes. 1961. No.000. R. R. the increase to be wholly subscribed by the Government. C. fees. interest and other charges thereon. Section 28(1) — The rule of taxation shall be uniform and equitable. with said capital stock wholly subscribed to by the Government. promulgated by public respondents pursuant to said law. Issue: Whether private respondent's reliance on a void BIR ruling conferred upon the latter a vested right to apply the same in the computation of its ad valorem tax and claim for tax refund. However. amending certain provisions of the National Internal Revenue Code and.00 ceiling in R. 000.000. including import restrictions previously and presently imposed. Article III. On September 10. DEL ROSARIO G.. private respondent immediately implemented the method of computation mandated therein by restoring the VAT in computing the tax base for purposes of the 15% ad valorem tax. 7496 violates the following provisions of the Constitution: Article VI. credits and indebtedness contracted under this subsection and the payment of the principal.62). as primary obligor. No. absolutely and unconditionally.000. Held: The present dispute arose from the discrepancy in the taxable base on which the excise tax is to apply on account of two incongruous BIR Rulings: (1) BIR Ruling 473-88 dated 4 October 1988 which excluded the VAT from the tax base in computing the fifteen percent (15%) excise tax due. INC. On January 22. states as follows: The loans. cities and municipalities. argue that public respondents have exceeded their rule-making authority in applying SNIT to general professional partnerships.000.00 was appropriated out of the funds in the Philippine Treasury for the purpose of organizing the NPC and conducting its preliminary work. No 4897 was enacted. 1974. the National Power Corporation shall be exempt from all taxes. property without due process of law. He was also authorized to contract on behalf of the NPC with the International Bank for Reconstruction and Development (IBRD) for NPC loans for the accomplishment of NPC's corporate objectives and for the reconstruction and development of the economy of the country. a public corporation. The question as to the correct computation of the excise tax on cigarettes in the case at bar has been sufficiently addressed by BIR Ruling 017-91 dated 11 February 1991 which revoked BIR Ruling 473-88 dated 4 October 1988. 127 of the Tax Code as amended by Executive Order No. No 2641 was enacted converting the NPC from a public corporation into a stock corporation with an authorized capital stock of P100. and to be imposed by the Republic of the Philippines. MACARAIG G. paid from the proceeds of any loan.000 shares having a par value of P100. No. assailing Section 6 of Revenue Regulations No. imposts. Admittedly the government is not estopped from collecting taxes legally due because of mistakes or errors of its agents. 120 was enacted creating the National Power Corporation. In G. MACEDA v.00.R. 000. On June 17. On June 18. 109446. But like other principles of law.000. 5. (2) BIR Ruling 017-91 dated 11 February 1991 which included back the VAT in computing the tax base for purposes of the fifteen percent (15%) ad valorem tax. supplies and services. No. Held: As to the foreign loans the NPC was authorized to contract. On June 4. upon knowledge of the effectivity of BIR Ruling No. paid from the proceeds of any loan. nor shall any person be denied the equal protection of the laws. 7496. 000. Issue: Whether or not the tax law enacted by the Congress is unconstitutional for being violative of due process. in G. It was expressly stated that: Any such loan or loans shall be exempt from taxes.R. the payment of any and all NPC loans. Paragraph No. The relevant tax exemption provision for these foreign loans states as follows: The loans. the constitutionality of Republic Act No. 357. R. 000. H. s. he has the duty to enforce Ordinance No.. It should be understandable then that those who ultimately took over the reigns of government following the successful revolution would promptly provide for abroad. The request was denied by the Commissioner. 2001.. If. HAGONOY MARKET VENDOR ASSOCIATION v. City of Butuan. 197 SCRA 52). 2002 praying that Mayor Atienza be compelled to enforce Ordinance No. that is. 2001. No reason exists why such a protective measure should be delayed. the law they seek to apply and implement. on January 30. all things being equal. 8027 and order the removal of the Pandacan Terminals. On November 20. the Sangguniang Panlungsod of Manila enacted Ordinance No. the Court of Appeals denied the Motion for Reconsideration. 13 extending the validity of Resolution No. the City of Manila and the Department of Energy (DOE) entered into a memorandum of understanding (MOU) with the oil companies in which they agreed that "the scaling down of the Pandacan Terminals [was] the most viable and practicable option. tax amnesty. He has no other choice. Among the businesses situated in the area are the so-called "Pandacan Terminals" of the oil companies Caltex (Philippines). No. 8027 was enacted pursuant to the police power delegated to local government units. 8027. 41 had not been intended to include 1981-1985 tax liabilities already assessed (administratively) prior to 22 August 1986. 8027 was enacted right after the Philippines. In the same resolution. for the taxable years 1981 to 1985. Resolution No. 41 was promulgated declaring a one-time tax amnesty on unpaid income taxes. the law could have simply so provided in its exclusionary clauses. 7496. (3) the law applies. however. This is also connected to the second issue raised by petitioners. 156052 March 7. 2002. a principle described as the power inherent in a government to enact laws. Auto Products Philippines. all too vivid to be easily forgotten. filed. It is his ministerial duty to do so. What may instead be perceived to be apparent from the amendatory law is the legislative intent to increasingly shift the income tax system towards the schedular approach in the income taxation of individual taxpayers and to maintain. as the Commissioner argues. the law. Ordinance No. It became effective on December 28. witnessed the horror of the September 11. merely requires that all subjects or objects of taxation. 2003. 8027. to "enforce all laws and ordinances relative to the governance of the city. Availing itself of the amnesty. assessed the latter deficiency income and business taxes for its fiscal years ended 30 September 1981 and 30 September 1982 in an aggregate amount of P1. are to be treated alike both in privileges and liabilities (Juan Luna Subdivision vs. in October 1986 and November 1986.O. in his letter of 22 November 1988. We need not resolve this issue. Basco vs. Likewise. 8027. 2001. 8027 as long as it has not been repealed by the Sanggunian or annulled by the courts." The Sangguniang Panlungsod ratified the MOU in Resolution No. 24 SCRA 3. Issue: Whether or not the appeal made by the Petitioner is time-barred. and it is that the executive order has been designed to be in the nature of a general grant of tax amnesty subject only to the cases specifically excepted by it. to both present and future conditions. 1995 Topic: Validity of Revenue Rules and Regulation Facts: On 22 August 1986. 8027. 97. petitioners filed this original action for mandamus on December 4. 8027. to enforce Ordinance No. MUNICIPALITY OF HAGONOY. during the period when the President of the Republic still wielded legislative powers. Whether respondent has the mandatory legal duty to enforce Ordinance No. Issue: Whether or not Revenue Memorandum Order 4-87.. Ordinance No. there is nothing that legally hinders respondent from enforcing Ordinance No. Thereafter. similarly situated. Held: The Local Government Code imposes upon respondent the duty. CA G. like the kindred concept of equal protection. (2) the categorization is germane to achieve the legislative purpose. on the ground that Revenue Memorandum Order No. 2003 of the Sanggunian can amend or repeal Ordinance No. 91 Phil. promulgated to implement Executive Order No. 4-87. implementing Executive Order No. and (4) the classification applies equally well to all those belonging to the same class (Pepsi Cola vs. its Tax Amnesty Return No. Petitioner Hagonoy Market Vendor Association filed an appeal a year later in December 1997. unclear or uncertain. Jose L. by and large. that such a system of income taxation has long been the prevailing rule even prior to Republic Act No. 97 to April 30.Petitioner intimates that Republic Act No. The conclusion is unavoidable. most particularly in the payment of taxes. for civil disobedience. 7496 desecrates the constitutional requirement that taxation "shall be uniform and equitable" in that the law would now attempt to tax single proprietorships and professionals differently from the manner it imposes the tax on corporations and partnerships." One of these is Ordinance No. the Sanggunian declared that the MOU was effective only for a period of six months starting July 25. However. 187 of the 1991 Local Government Code provides that the prescriptive period for an appeal against a Municipal Tax Ordinance or Revenue TUZON v. 2003. however. Inc. safety. It might not be amiss to recall that the taxable periods covered by the amnesty include the years immediately preceding the 1986 revolution during which time there had been persistent calls. Meanwhile. to promote the order. The objective of the ordinance is to protect the residents of Manila from the catastrophic devastation that will surely occur in case of a terrorist attack on the Pandacan Terminals. in a communication received by private respondent on 13 August 1986. 2003 and authorizing Mayor Atienza to issue special business permits to the oil companies. and paid the corresponding amnesty taxes due. petitioner Commissioner of Internal Revenue. 2002 Topic: Effectivity and Validity of Tax Ordinance Facts: The Sangguniang Bayan of Hagonoy. NO. The Secretary of Justice dismissed the appeal on the ground that it was filed out of time. Uniformity of taxation. 108358 JANUARY 20. 8027 reclassified the area described therein from industrial to commercial and directed the owners and operators of businesses disallowed under Section 1 to cease and desist from operating their businesses within six months from the date of effectivity of the ordinance. COMMISSIONER v. to promulgate all needful rules and regulations for the effective enforcement of internal revenue laws cannot be controverted. 2001 attack on the Twin Towers of the World Trade Center in New York City.R. Petron Corporation and Pilipinas Shell Petroleum Corporation. Held: The authority of the Minister of Finance (now the Secretary of Finance). is that all such issuances must not override. Prior to this availment. 8027. 2002 and 13.71. s. 8027 doubtful. 41. 13.410. 41 is valid. 8027. CA G. within constitutional limits. We certainly do not view this classification to be arbitrary and inappropriate. BULACAN G. after its publication. but must remain consistent and in harmony with. 371). the deficiency tax notice should forthwith be cancelled and withdrawn. s. 2007 Topic: Effectivity and Validity of Tax Ordinance . Assuming that the terms of the MOU were inconsistent with Ordinance No. 2002. respondent R. the resolutions which ratified it and made it binding on the City of Manila expressly gave it full force and effect only until April 30. in conjunction with the Commissioner of Internal Revenue. Executive Order No. Atienza. the present global treatment on taxable corporations. 97. Administrative rules and regulations are intended to carry out.R. at present. dated 09 February 1987. As the chief executive of the city. The taxpayer wrote back to state that since it had been able to avail itself of the tax amnesty. 34-F-00146-41 and Supplemental Tax Amnesty Return No. Uniformity does not forefend classification as long as: (1) the standards that are used therefor are substantial and not arbitrary. on June 26. Jr.R. Whether the June 26. Much more fundamental than either of the above. respectively. morals and general welfare of the society. Facts: It is a petition for mandamus which seeks to compel respondent Hon. later amended to include estate and donor's taxes and taxes on business. the Sanggunian adopted Resolution No. Held: Sec. ordinarily should deserve weight and respect by the courts. as city mayor. No. health. and 2. whether the MOU and Resolution Nos. 2003 also called for a reassessment of the ordinance. Neither can it be disputed that such rules and regulations. The contention clearly forgets. mayor of the City of Manila. 137621 February 6. 1996 an ordinance which increased the stall rentals of the market vendors in Hagonoy.157. 34-F-00146-64-B. Thus. Respondent mayor approved the ordinance on November 28. PAGCOR. It did not. Ordinance No. and not a confined. neither to supplant nor to modify. 2002 MOU and the resolutions ratifying it can amend or repeal Ordinance No. as well as administrative opinions and rulings. had construed the amnesty coverage to include only assessments issued by the Bureau of Internal Revenue after the promulgation of the executive order on 22 August 1986 and not to assessments theretofore made. along with the rest of the world. Sarmiento. 8027 and order the immediate removal of the terminals of the oil companies Issues: 1. The question now is whether the MOU entered into by respondent with the oil companies and the subsequent resolutions passed by the Sanggunian have made the respondent‘s duty to enforce Ordinance No. to the martial law regime. Inc. Bulacan enacted in October 1. Executive Order No. petitioner even paid without any protest the amounts of taxes assessed by respondents Makati and Acting Treasurer as provided for in the ordinance. The Philippine Racing Club.693. 43082 June 18.. deducted and withheld at source by the payor-corporation and/or person as withholding agent and an income tax." 2. Act 7167. COLLECTOR OF INTERNAL REVENUE G. shipwreck or other casualty. which is after fifteen (15) days following its publication on 14 January 1992 in the "Malaya. Issue: 1. 7160 is fatal to their cause. They should take effect on compensation income earned or received from January 1.R.60. paid the tax assessed but without indicating any protest therein then appealed to the Department of Justice claiming unconstitutionality of said ordinance also claiming refund. RESP filed its Quarterly Percentage Tax Returns reflecting gross receipts in the total amount of P1. LORENZO v. The Court held that Rep. Inc. AS AMENDED.e. 1937 Topic: Construction of Tax Laws: Rule when Legislative Intent is Clear Facts: Thomas Hanley died in Zamboanga. 187 of R. In the instant case. 1924. issued General Circular V139 which revoked and declared void Circular V-123. NO. entitled "AN ACT ADJUSTING THE BASIC PERSONAL AND ADDITIONAL EXEMPTIONS ALLOWABLE TO INDIVIDUALS FOR INCOME TAX PURPOSES TO THE POVERTY THRESHOLD LEVEL.R. the effectivity of the assailed ordinance shall not be suspended. Such tax laws are deemed to be laws of the occupied territory and not of the occupying enemy. COMMISSIONER OF INTERNAL REVENUE v. Municipal Ordinance No. For the calendar year 1995.691. Two petitions which were consolidated was filed for mandamus to compel respondents to implement RA 7167. 2003 Topic: Construction of Tax Laws: Rule when Legislative Intent is Clear Facts: Two types of taxes are involved in this case: 1. Issue: Whether or not the Internal Revenue Laws were enforced during the war and whether Hilado can claim compensation for destruction of his property during the war. SOLIDBANK CORPORATION G. 196 of the Local Government Code and if the instant case is time-barred. ITEMS (1) AND (2)(A) OF THE NATIONAL INTERNAL REVENUE CODE. 1991 and published on January 14. JARDINE DAVIES INSURANCE v. Gross Receipts Tax (GRT) of 5% which is not subject to withholding and is a percentage tax. or on 30 January 1992. the date when Moore became trustee. The power to tax is the most effective instrument to raise needed revenues to finance and support the myriad activities of local government units for the delivery of basic services essential to the promotion of the general welfare and enhancement of peace. 92-072 otherwise known as the Makati Revenue Code which provides among others for the schedule of franchise taxes in the Municipality to be higher than those in the Metro Manila Revenue Code. Lorenzo. NO. any delay in implementing tax measures would be to the detriment of the public. Issue: Whether or not the contention is meritorious. In the case at bar. . UMALI v.R. Assuming that Rep. the complaint of petitioner with the Regional Trial Court was merely an afterthought. after fifteen (15) days following its publication on 14 January 1992 in the "Malaya" a newspaper of general circulation.A.measure should be made to the Secretary of Justice within (30) thirty days from the effectivity of the ordinance and even during its pendency. Moreover. the amount would be at most a proper deduction of his 1950 gross income (not on his 1951 gross income) as the last installment and notice of discontinuation of payment by the War Damage Commission was made in 1950. 104037 MAY 29. whether or not the said law nonetheless covers or applies to compensation income earned or received during calendar year 1991." The said act was signed and approved by the President on December 19. and laid down the rule[s] that losses of property which occurred in World War II from fires. 1991. ESTANISLAO G. No. The Secretary of Finance. Final Withholding Tax (FWT) of 20% which is a tax on passive income.44 with corresponding gross receipts tax payments in the sum of P73. Held: A municipal tax ordinance empowers a local government unit to impose taxes. HILADO v. Act 7167 took effect upon its approval by the President on 19 December 1991. The provision of law requiring the payment of interest in appropriate cases is mandatory and neither the Collector of Internal Revenue nor this court may remit or decrease such interest. and prosperity of the people. no matter how heavily it may burden the taxpayer. He contended that the inheritance tax should have been after 10 years. PARAGRAPH (L).474. 1992 in "Malaya" a newspaper of general circulation.734. or embezzlement are deductible in the year of actual loss or destruction of said property. No. L-9408 October 31.837. i. Evidently. Whether or not Rep. it is our view that the failure of petitioners to appeal to the Secretary of Justice within 30 days as required by Sec. Held: 1. claiming a deductible item of P12. Held: The delinquency in payment occurred on March 10. through the Collector. As of the end of 1945. leaving a will which provided among others that the property given to Matthew Henley will belong to him only after 10 years after Thomas‘ death. NO. It is intended to remedy the inadequacy of the heretofore existing personal and additional exemptions for individual taxpayers. 1956 Topic: Interpretation and Application of Tax Laws: Nature of Internal Revenue Law Facts: Emilio Hilado filed his income tax return for 1951 with the treasurer of Bacolod City. The interest due should be computed from that date and it is error on the part of the defendant to compute it one month later. ALIPOSA G. Consequently. or from robbery. Act 7167 took effect on 30 January 1992. 118900 FEBRUARY 27. more than a year after the effectivity of the ordinance in 1996.R.584. Petitioner filed its appeal only in December 1996. The act is a social legislation intended to alleviate in part the present economic plight of the lower income taxpayers. Non-payment of which does not give rise to any enforceable right. It is for this reason that protests over tax ordinances are required to be done within certain time frames. the trustee of the estate paid the assessments on protest. 28 took effect in October 1996. there was no law which Hilado could claim for the destruction of his properties during the battle for the liberation of the Philippines.65 from his gross income pursuant to General Circular V-123 issued by the Collector of Internal Revenue. POSADAS G. Issue: Whether or not a refund is available to the taxpayer under Sec. the CIR assessed inheritance tax against the estate. storms. the payment of claims by the War Damage Commission depended upon its discretion. Act 7167 took effect on 30 January 1992. 148191 NOVEMBER 25. AMENDING FOR THE PURPOSE SECTION 29. Assuming that the loss (deductible item) represents a portion of the 75% of his war damage claim. 1992 Topic: Construction of Tax Laws: Rule when Legislative Intent is Clear Facts: Congress enacted Rep. Under the Philippine Rehabilitation Act of 1948. Held: Philippine Internal Revenue Laws are not political in nature and as such were continued in force during the period of enemy occupation and in effect were actually enforced by the occupation government. The deductions were disallowed. 2003 Topic: Effectivity and Validity of Tax Ordinance Facts: Sangguniang Bayan of Makati enacted Municipal Ordinance No. theft. and 2. AND FOR OTHER PURPOSES. and 2. progress.R. Consequently. AS AMENDED.875. La Tondeña uses as basic materials low test alcohol.e. because the taxpayer ratifies the very act of possession for the government.15 representing gross receipts from passive (interest) income which was already subjected to 20% final withholding tax. CTA ordered LT to pay P672. the CTA held in Asian Bank Corporation vs. This is in harmony with Sec. It purchases alcohol from Negros Occidental and from Batangas and has been removing this alcohol from the centrals to a distillery under joint bonds without prepayment of specific taxes. 531: ―Possession is acquired by the material occupation of a thing or the exercise of a right. 1992 in "Malaya" a newspaper of general circulation. entitled "AN ACT ADJUSTING THE BASIC PERSONAL AND ADDITIONAL EXEMPTIONS ALLOWABLE TO INDIVIDUALS FOR INCOME TAX PURPOSES TO THE POVERTY THRESHOLD LEVEL. In every case of doubt. G. The new law should not be given retroactive effect. applying Section 7(c) of Revenue Regulations(RR) No. CA affirmed CTA. Topic: Rule When There is Doubt Facts: La Tondeña is engaged in the business of manufacturing wines and liquor with a distillery in Manila.‖ although it claims that it derives no pecuniary benefit or advantage through the withholding process. 1992 Topic: Application of Tax Laws Facts: Congress enacted Rep. respondent itself admits that its income is subjected to a tax burden immediately upon ―receipt. or by the proper acts and legal formalities established for acquiring such right.75. La Tondeña appealed to the Conference Staff of the BIR. Commissioner of Internal Revenue that the 20% final withholding tax on a bank‘s interest income should not form part of its taxable gross receipts for purposes of computing the gross receipts tax. or by any person without any power whatever. They should take effect on compensation income earned or received from January 1. LA TONDEÑA INC. The Court held that Rep. Hence the fact that the bank did not actually receive the said amount (as such FWT is withheld by the payor and paid by the latter to government) meant that the 20% should not be included in the base for the determination of the GRT.693.691. In January 1996. for legal purposes. whether or not the said law nonetheless covers or applies to compensation income earned or received during calendar year 1991. 532: ―Possession may be acquired by the same person who is to enjoy it.749. for which CIR had given allowance of not exceeding 7% for said losses. In May 1954.R. 1. as provided for in Article 532. 1991. The withholding process is one such act. losses through evaporation occur.. However RA 592 took effect on Jan. and other non-bank financial intermediaries not performing quasi-banking activities shall be based on all items of income actually received. There being constructive receipt of such income. possession is acquired by the payor as the withholding agent of the government. representing allegedly overpaid gross receipts tax for the year 1995 in the amount of 3. In the manufacture of Manila Rum. The processes of bookkeeping and accounting for interest on deposits and yield on deposit substitutes that are subjected to FWT are indeed. PARAGRAPH (L). Issue: Whether or not La Tondeña should pay the specific tax. Issue: 1. 1962 .75. Held: 1. 1951 which amended 133 deleting the all-embracing clause which subjects to tax all kinds of alcoholic substances but only distilled spirits as finished products. 17-84 ("If the recipient of the above-mentioned items of income are financial institutions. receipt or remittance. Held: No. Quantity of alcohol purchased and received entered into the BIR Official Register Books. Two petitions which were consolidated was filed for mandamus to compel respondents to implement RA 7167. financing companies. RR 17-84 applies. NO. after fifteen (15) days following its publication on 14 January 1992 in the "Malaya" a newspaper of general circulation. Sec.44 included the sum of P350." The said act was signed and approved by the President on December 19. pursuant to RA 592. the same shall be included as part of the tax base upon which the gross receipt[s] tax is imposed. part of which is withheld. SC cited with PET.15 by way of specific tax. or on 30 January 1992. August 1956.508. ITEMS (1) AND (2)(A) OF THE NATIONAL INTERNAL REVENUE CODE. La Tondeña is exempt from liability assessed therefor. without prejudice to the juridical consequences of negotiorum gestio in a proper case. The CTA ordered PET to refund to RESP the reduced amount of P1. or by the fact that it is subject to the action of our will. 133 of the Tax code states liability shall attach to the substance as soon as it is in existence as such. the tax on alcohol did not attach as soon as it was in existence as such but on the finished product. non-bank financial intermediaries. Whether or not Rep. UMALI v. but in the last case. 12-80 states that the tax rates to be imposed on the gross receipts of banks. Issue: Whether or not there was receipt (constructive or actual) by the RESP of the 20% final withholding tax imposed on the passive income of RESP? Held: The 20% FWT on the passive income of RESP is INCLUDED in the computation for GRT.807. AMENDING FOR THE PURPOSE SECTION 29. however.R. 1991 and published on January 14.078. because burdens are not to be imposed beyond what the statutes expressly and clearly import. The amount which corresponds to the period after January 1951 and up to February 1954. and 2.078. COLLECTOR OF INTERNAL REVENUE v. tantamount to delivery.‖ Art. Act 7167 took effect on 30 January 1992. There may not be actual receipt of the income withheld.65 as overpaid gross receipts tax for the year 1995. It is intended to remedy the inadequacy of the heretofore existing personal and additional exemptions for individual taxpayers. The act is a social legislation intended to alleviate in part the present economic plight of the lower income taxpayers. Besides. Assuming that Rep.‖ Article 531 of the Civil Code clearly provides that the acquisition of the right of possession may be through the proper acts and legal formalities established therefor. the possession shall not be considered as acquired until the person in whose name the act of possession was executed has ratified the same.555. Act 7167 took effect on 30 January 1992. La Tondeña protested and CIR refused to reconsider the assessment. i.474.508. (In other words. Act 7167 took effect upon its approval by the President on 19 December 1991. whether it be subsequently separated as pure or impure spirits.") Section 4(e) RR No. by his legal representative. ESTANISLAO G. In our withholding tax system. CIR appealed to the Supreme Court. purchased in crude form from the suppliers which it subjects to further distillation and from this process. which is after fifteen (15) days following its publication on 14 January 1992 in the "Malaya. CIR wrote a demand letter to La Tondeña for payment of specific taxes on alcohol lost by evaporation through re-rectification or redistillation from June 1950 to February 1954. SC applied to the receipt of income the rules on actual and constructive possession provided in Articles 531 and 532 of our Civil Code. RESP sent a letter of request for the refund or issuance of a tax credit certificate in the aggregate amount of P3. and that income is included as part of the tax base upon which the GRT is imposed. There is thus constructive receipt.) CONTENTIONS There was constructive receipt. 104037 MAY 29. possession by any person without any power whatsoever shall be considered as acquired when ratified by the person in whose name the act of possession is executed. AND FOR OTHER PURPOSES.RESP alleges that the total gross receipts in the amount of P1. 129 of the Tax code which states that only the finished product is subject. On the basis of the CTA ruling. L-10431 July 31. Art. by his agent. tax statues are construed most strongly against the government and in favor of the citizens." 2. From January 1951 to August 1956. It was ordered to comply with DOF 213 to deposit ½ of the amount in cash and the balance by a surety bond and appealed the action to CTA. RA 1608 was passed restoring the same clause which was eliminated. Act 7167. No. In fact the CIR himself had ruled in this vein on February 4.00. (i) and (j) of Section 7 of Republic Act Numbered Fiftyone hundred eighty-six. 246 of the National Internal Revenue Code.774. On July 2. they would have been amendatory provisions applicable to pawnshops. in the amount of P3. A letter dated January 1987 of the CIR to PCGG with its initial position to classify Champion. 119761 AUGUST 29. there will be no new tax rate consequence on private respondent‘s products. defective. — A contractor's tax of three percentum of the gross receipts is hereby imposed on the following: xxx xxx xxx (16) Business agents and other independent contractors except persons. registered export producer shall be entitled to benefits and incentives as enumerated hereunder: ―Pursuant to Section 7 of Republic Act No. proprietors or operators of dockyards. associations and corporations under contract for embroidery and apparel for export. More. Issue: Whether or not Telefunken. Also.598. From October 1979 to September 1981. 1993. June 11. The cigarettes in the case at the time of the effectivity of the law were not classified as foreign brands and were subject to 45% ad valorem tax. 1996 Topic: Application of Revenue Regulations/ Rulings and Effects of Repeal Facts: Fortune Tobacco Corporation is engaged in the manufacture of different brands of cigarettes. considering that they were not specifically included in Section 116 of the NIRC of 1977. COMMISSIONER OF INTERNAL REVENUE v. (Emphasis supplied) A comparison of the above with the previously quoted Section205(16) of the 1977 Tax Code reveals that both provisions specifically mention pioneer industries registered with the Board of Investments under Republic Act No. Without these disputed CIR issuances. Held Yes.R. Specifically. Contractors. Sec. as well as their agents and contractors and except gross receipts of or from a pioneer industry registered with the Board of Investments under the provisions of RA 5186. except for Income Tax. the BIR Deputy Commissioner sent via fax a copy of the RMC but it was not addressed to any in particular. and in lieu of other incentives provided in Section 7 and in Section 9 of that Act.R. On the other hand CIR argues that the law speaks of firms registered under RA 5186 only and thus. 1995 Topic: Application of Revenue Regulations/ Rulings and Effects of Repeal Facts: Telefunken is a domestic corporation registered with the Board of Investments (BOI) as an export producer on a preferred pioneer status under RA 6135. both a registered export producer on a pioneer status under Republic Act No. TELEFUNKEN G. this 1974 ruling has not been abrogated with the passage of the 1977 Tax Code.843. A contractor's tax of three percentum of gross receipts is hereby imposed on the following: xxx xxx xxx (16) Business agents and other independent contractors including private detective or watchman agencies. 1993. On July 15. 43-91 cannot be viewed simply as implementing rules or corrective measures revoking in the process the previous rulings of past Commissioners. VI. except income tax. are to be treated alike or put on equal footing both in privileges and liabilities. rulings of the BIR may not be given retroactive effect. under Sec. proprietors or operators of dockyards and others. LHUILLIER PAWNSHOP G. This 1974 ruling was based the same on Section191 (16) of the Tax Code which states: Incentives to registered export producer — Registered export producers. 5186 as exempt from payment of the contractor's tax. is exempted from payment of the 3% contractor's tax from October 1979 to September 1981. — Registered export producers unless they already enjoy the same privileges under other laws shall be entitled to the incentives set forth in paragraphs (h). Hope. Issue: Whether or not the RMC 37-93 is discriminatory since it applies not to all locally manufactured cigarettes similarly situated. Issue: Whether or not pawnshops are included in the term lending investors for the purpose of imposing the 5% percentage tax under then Section 116 of the National Internal Revenue Code (NIRC) of 1977.R. No. 103915 OCTOBER 23. 1978) There is no difference between the gross receipts of pioneer enterprises registered with the Board of Investments under RA 6135 and the gross receipts of registered pioneer enterprises under RA 5186. the privilege of tax exemption does not apply to firms registered under RA 6135. before that new issuance is given the force and effect of law. RMO No. it behooves the agency to accord at least to those directly affected a chance to be heard. CTA upheld position of Fortune Tobacco. it was exempted from the payment of all National Internal Revenue Taxes for the period in question. on the other hand. (b) and (c) of Section 8 of the said Act.‖ Sec. 28 of the Constitution mandates taxation to be uniform and equitable. pawnshops would not be liable to pay the 5% percentage tax. and thereafter to be duly informed. 1993. and unenforceable. the CIR did not simply interpret the law. and publication should not have been ignored. 150947 JULY 15. similarly situated. Uniformity requires that all subjects or objects of taxation. More as foreign brands. In addition to the said incentives. known as the Investment Incentives Act. Without the RMC. SP No. NO. Fortune Tobacco received by ordinary mail a certified Xerox copy of the RMC. Petitioner opines that RMC is merely an interpretative ruling of the BIR which can thus become effective without any prior need for notice and hearing nor publication and that its issuance is not discriminatory since it would apply under similar circumstances to all locally manufactured cigarettes. NO. 1974 in the case of Asian Transmission Corporation. In so doing. It legislated under its quasi-legislative authority. Lhuillier Pawnshop. 5690 cancelling the assessment issued against respondent Michel J. 1457. Held: When an administrative rule is merely interpretative in nature.360. About a month after the enactment and two days before the effectivity.335. 5186 are entitled to the same tax exemption benefits under the Tax Code. 2001 of the Court of Appeals in CA G. COMMISSIONER OF INTERNAL REVENUE v. 6135. Art. Telefunken contended that under the provisions of Section 7 of RA 6135 in relation to Section 8 (a) of RA 5186 (The Investment Act). (As . BIR did not simply interpret the law.00 which were entirely sold to foreign markets. except gross receipts of a pioneer enterprise registered with the Board of Investments under Republic Act 5186.D. Telefunken produced semiconductor devices amounting to P92. NO. hearing. its applicability needs nothing further than its bare issuance. Section 205(16) which expressly mentions only pioneer enterprises registered with the Board of Investments under RA 5186 as exempt from the contractor's tax (though with no reference being made regarding pioneer enterprises registered under RA 6135). Champion as foreign brands for purposes of determining the ad valorem tax. it was assessed for ad valorem tax which amounted to Php 9. 273.R. and registered export producers that are pioneer enterprises shall be entitled also to the incentives set forth in paragraphs (a). registered under RA 6135 as a pioneer export producer. for it gives no real consequence more than what the law itself has already prescribed. if the same is prejudicial to the taxpayer. COURT OF APPEALS G. ad valorem is invalid. In other words. 15-91 and RMC No. Held: Discriminatory. Lastly. that corporation as a registered export producer on a pioneer status is entitled to the same tax incentives granted to a pioneer industry set forth in section 8(a) of republic Act No. BIR issued RMC 37-93 which reclassified certain cigarettes subject to excise tax reclassifying Hope. 191. inclusive of interest and surcharges. 6135 and pioneer industry under Republic Act No. When. On June 10. as amended by Executive Order No. BIR denied Telefunken‘s request for a tax refund/tax credit from the contractor‘s tax which it paid for said amount.11 as deficiency percentage tax for 1994. Fortune Tobacco filed a Petition for Review with the CTA. Under this latter provision. as amended. the administrative rule goes beyond merely providing for the means that can facilitate or render least cumbersome the implementation of the law but substantially increases the burden of those governed. a pioneer industry is exempt from all taxes under the National Internal Revenue Code. RA 7654 was enacted which imposed excise taxes on cigarettes. Inc. The due observance of the requirements of notice. The controlling statute is Section 205 (16) of the 1977 National Internal Revenue Code which states: Contractors.COMMISSIONER OF INTERNAL REVENUE v. All taxable articles or kinds of property of the same class must be taxed at the same rate. 2003 Topic: Application of Revenue Regulations/ Rulings and Effects of Repeal Facts: Petitioner Commissioner of Internal Revenue (CIR) filed the instant petition for review to set aside the decision of November 20. and others. Fortune Tobacco appealed to the appellate division of the BIR but was denied. 5186. and the tax must operate with the same force and effect in every place where the subject may be found. 62463. amended by P. On July 30. which affirmed the decision of December 13.334. 2000 of the Court of Tax Appeals (CTA) in CTA Case No. RMC was hastily promulgated and has fallen short of a valid and effective administrative issuance. and not to local taxes. Charter provides that notice by publication is to be made. Held: The charter of Manila provides that within a period of sixty days next succeeding the completion of such acquisition. Held: It was a valid sale. No. Inc. COURT OF APPEALS G. petitioner introduced improvements without reporting the same for tax purposes. during the first 15 days of December of each year add to his list of taxable real estate in the city the value of improvements placed upon such property during the preceding year.71. v. Issue on the compliance with the posting of the notices and announcement of the sale. SP No.000. 2005 Topic: Tax Remedies Facts: On March 17. Plaintiffs paid under protest on June 30. RAFFERTY G.. In Nov 1914. 1915. 1915. In 1913.R. 1. PECSON v. COMMISSIONER OF INTERNAL REVENUE. He further alleged that he was not notified of his right to redeem the property. the new owners of the house would send him the letters as they always have. However PD 551 came bout and reduced the franchise tax of electric franchise holders to 2% of their gross receipts from the sale of electric current and from transactions incident to the generation. Notices were sent to 79 Paquita St. they are not directory but mandatory. June 29. Issue: Whether or not the improvement is subject to tax. A petition was then filed with the Sangguniang Panlunsod by Metro Angeles Chamber of Commerce and Industry. petitioner received from the Bureau of Internal Revenue (BIR) deficiency tax assessments for the taxable year 1984 in the total amount of P8. not to 79. which this Court will not inquire into and review the evidence relied upon the lower courts to support their finding. the assessment period has already prescribed. S-93. and in accordance. is a question of fact.There is no need for us to discuss the ruling in CA-G. the Local Tax Code does not contain any specific provision prohibiting courts from enjoining the collection of local taxes. Issue: Whether or not the Local Government Code prohibits an injunction enjoining the collection of taxes. When RA 7160 (Local Government Code) was passed into law. and the assessment and collection of taxes under RRCAC cannot be made retroactive. Final Notice to exercise right of redemption also sent to the same address. . Plaintiffs filed in CFI to recover with interest. When the regulations prescribed are intended for the protection of the citizen and to prevent a sacrifice of his property. fee. He admits he no longer reside in Manila and presently resides in Quezon City but his contention is that the notices should have been sent to 1009 Paquita and OCEANIC WIRELESS NETWORK.R. Manila. Sometimes statues requiring the assessor to notify the taxpayer have been held to be merely directory. the assessor and collector were under obligation of adding the improvements on the Roxas property and not between December 1 to December 15. Unlike the NIRC. 15. Taxes being the lifeblood of the government should be collected promptly. Sale was made without proper notice to him. 15-91 and RMC No. the Local Government Code does not specifically prohibit an injunction enjoining the collection of taxes. 2010 Topic: Tax Remedies ROXAS v. 1915. 59282 entitled Commissioner of Internal Revenue v. Agencia Exquisite of Bohol Inc. 1918 Topic: Mandatory and Directory Provision of Tax Laws Facts: Plaintiffs own a parcel of land in Escolta Manila. The Supreme Court. it imposed tax on business enjoying franchise. the improvements on this land were demolished and the construction of a concrete building was begun. has the last word on what the law is. INC. heat. on Dec. The City treasurer then levied on the real properties of AEC prompting AEC to file with RTC an Urgent Motion for Issuance of a TRO and/or Writ of Preliminary Injunction. sent notice to declare the improvements for assessment for 1915. construction or addition. Plaintiffs were under obligation to present within 60 days from completion. below 1009 was the number 79. If the notices were sent to 1009 Paquita. The assessor and collector perforce could not in 1914 levy a tax on incomplete improvements made during the current year. Consequently. and power system for the purpose of generating and distributing electric light. It was finished in all respects on Feb. by tradition and in our system of judicial administration. a sworn declaration setting forth the value of the real estate acquired or the improvement constructed and containing a description to enable the city assessor and collector to readily identify the same. 644. Held: No. THE COURT OF TAX APPEALS. There is only one Supreme Court from whose decisions all other courts should take their bearings. RMO No. fees and assessments. 1914. AEC paid the local franchise tax to the Office of the City Treasurer on a quarterly basis. 43-91. the city has to notify in writing by delivering or mailing such notification to person sometime in November. No taxes on the improvements were levied or paid in 1914 as adjudged by the CFI since the improvements were not finished. 1988. Under an attempted assessment in November and December. But in the majority of the jurisdiction this requirement is held to be mandatory. 148380 December 9. 105360 MAY 25. One can deduce that the taxpayer had transferred his residence to 79. 1914. they could have had no opportunity to comply with the same. Pursuant to Section 3-A thereof. Between December 1 to December 15. The Bureau of Local Government Finance issued a First endorsement to the City Treasurer of Angeles City instructing it to make representations with Sangguniang Panlunsod for the appropriate amendment of the RRCAC in order to ensure compliance with the provisions of LGC. AEC‘s payment of franchise tax gross earnings from electric current sold was in lieu of all taxes. 15-91 and RMC No. 12182 MARCH 27. otherwise known as the Revised Revenue Code of Angeles City. seeking the reduction of the tax rates and review of the provisions of the RRCAC. ANGELES CITY ELECTRIC CORPORATION GR No. in addition to the national franchise tax it pays every quarter to the BIR. and THE COURT OF APPEALS G. the assessor and collector had the building inspected and assessed for tax at P3. 1993 Topic: Mandatory and Directory Provision of Tax Laws Facts: Pecson filed complaint to annul sale at a public auction of petitioner‘s property for non-payment of real estate taxes alleging sale was made without prior notice to him. Issue: Whether or not the validity of public auction of his property for non-payment of taxes on the ground that the notices to him were sent to the wrong postal address.City assessor and collector of Manila. Further. it is the final arbiter of any justifiable controversy. or charge imposed by the code.998. the payment of franchise tax on business resulted to double taxation. NO. the collection thereof may jeopardize the interest of the government or the taxpayer. or before April 15. and by a disregard of which his right might be. In the records of the Office of the City Treasurer of QC. Suffice it to say that the judgment in that case cannot be binding upon the Supreme Court because it is only a decision of the Court of Appeals. Worse. of which AEC is a member. so that the assessor cannot make a valid assessment unless he has given proper notice. 33. which upheld the validity of RMO No. The NIRC expressly provides that no court shall have the authority to grant an injunction to restrain the collection of any national internal revenue tax. distribution and sale of electric current. An exemption to this rule obtains only when n the opinion of the Court of Tax Appeals. ANGELES CITY v. 43-91 are hereby declared null and void. heat and power for sale in Angeles City.R. and generally would be injuriously affected. The city treasurer denied AEC‘s protest that it was exempt from paying local business tax. Common sense construction would be that the phrase includes December of the previous year and the current year up to December. Facts: Angeles Electric Corporation (AEC) was granted a legislative franchise under RA 4079 to construct. 166134.R. The prohibition of a writ of injunction to enjoin the collection of taxes applies only to national internal revenue taxes. Lhuillier is not liable to pay the 5% lending investor‘s tax. Thereafter. Charter provides also that city assessor and collector shall. maintain and operate an electric light. NO.16 In view of the foregoing. the Sangguniang Panlunsod of Angeles City enacted Tax Ordinance No. without necessary hindrance or delay. INC. It. No. so Metro Start filed a petition for review with the CTA. 1988. then Chief of the BIR Accounts Receivable and Billing Division. "while the denial of the protest was in the form of a demand letter. Thus. 2010 Topic: Tax Remedies Facts: METRO STAR SUPERAMA. A tax assessment that has become final." It also found that there was no clear showing that Metro Star actually received the alleged PAN. Issue: Whether or not a demand letter for tax deficiency assessments issued and signed by a subordinate officer who was acting in behalf of the Commissioner of Internal Revenue. the Petition for Review is hereby GRANTED.A. 2007 Resolution..R. otherwise. dated January 16. requirement. Thus. No. the authority to make tax assessments may be delegated to subordinate officers. the Assistant Commissioner for Collection. 1991. 2003 were void. it was tantamount to a rejection of the request for reconsideration. the petition is DENIED. while "taxes are the lifeblood of the government. The CIR sought reconsideration of the decision of the CTA-Second Division. The law imposes a substantive. and that due process was served nonetheless because the latter received the Final Assessment Notice (FAN). a direct denial of the receipt of mail shifts the burden upon the party favored by the presumption to prove that the mailed letter was indeed received by the addressee. rendered a decision. but the motion was denied in the latter‘s July 24. Issue: IS THE FAILURE TO STRICTLY COMPLY WITH NOTICE REQUIREMENTS PRESCRIBED UNDER SECTION 228 OF THE NATIONAL INTERNAL REVENUE CODE OF 1997 AND REVENUE REGULATIONS (R. insisting that Metro Star received the PAN. not merely a formal. unappealable and therefore. 1991. declaring that said petition was filed beyond the thirty (30)-day period reckoned from the time when the demand letter of January 24. if not reviewed or revised by the latter such as in this case. comes now before the Supreme Court for Petition for Review on Certiorari under Rule 45 of the Rules of Court.7 of the National Internal Revenue Code (NIRC) as non-delegable. The demand letter received by petitioner verily signified a character of finality. WHEREFORE. for a citizen‘s right is amply protected by the Bill of Rights under the Constitution. demandable. Hence." the power to tax has its limits. With the denial of its motion for reconsideration. the decretal portion of which reads: WHEREFORE. dated January 16. Commissioner of Internal Revenue (CIR) assessed Metro Star Superama. as Metro Star was denied due process. the period of thirty (30) days to appeal the adverse decision on the request for reconsideration had already lapsed when the petition was filed with the Court of Tax Appeals only on November 8. and the constitutional rights of a citizen to due process of law and the equal protection of the laws on the other. The CIR. G. 185371 December 8. 2005 is hereby REVERSED and SET ASIDE and respondent is ORDERED TO DESIST from collecting the subject taxes against petitioner. As correctly held by the Court of Tax Appeals. Thus. accordingly. 1991. unquestionably constitutes the final action taken by the Bureau of Internal Revenue on petitioner‘s request for reconsideration when it reiterated the tax deficiency assessments due from petitioner. The CTA-Second Division opined that "while there is a disputable presumption that a mailed letter is deemed received by the addressee in the ordinary course of mail. Held: The demand letter issued and signed by the Chief of the BIR Accounts Receivable and Billing Division who was acting in behalf of the Commissioner of Internal Revenue is deemed final and executory and subject to an appeal to the Court of Tax Appeals. The persuasiveness of the right to due process reaches both substantial and procedural rights and the failure of the CIR to strictly comply with the requirements laid down by law and its own rules is a denial of Metro Star‘s right to due process. The Court of Appeals denied the petition for lack of merit in a decision dated October 31. 2002.1. 2007. 1991. . The CTA dismissed the petition for lack of jurisdiction in a decision dated September 16.That taxpayer should be able to present their case and adduce supporting evidence.) No. 2002. The use of the word "shall" in subsection 3. The period to appeal has commenced to run from the time the letter of demand was presumably received by petitioner within a reasonable time after January 24. Metro Star denied that it received a Preliminary Assessment Notice (PAN) and claimed that it was not accorded due process. 2000. INC.R. premises considered. Severino B. Upon petitioner‘s failure to pay the subject tax assessments within the prescribed period. but the petition was dismissed after a determination that no new matters were raised. reiterated the tax assessments while denying petitioner‘s request for reinvestigation in a letter dated January 24. Acting in behalf of the BIR Commissioner. Therefore. 12-99 TANTAMOUNT TO A DENIAL OF DUE PROCESS? Held: The Supreme Court said: Section 228 of the Tax Code clearly requires that the taxpayer must first be informed that he is liable for deficiency taxes through the sending of a PAN. 1991. they sent the Preliminary Assessment Notice (PAN) through mail. the scales must tilt in favor of the individual. COMMISSIONER OF INTERNAL REVENUE v. Said assessment has the same force and effect as that issued by the Commissioner himself. 1991 cannot be considered as the final decision of the Commissioner of Internal Revenue on its protest because the same was signed by a mere subordinate and not by the Commissioner himself. 8424. However. executory and enforceable for failure of the taxpayer to assail the same as provided in Section 228 can no longer be contested. Petitioner filed a Motion for Reconsideration arguing that the demand letter of January 24. 1994. as well as the Warrant of Distraint and/or Levy dated May 12. To proceed heedlessly with tax collection without first establishing a valid assessment is evidently violative of the cardinal principle in administrative investigations . Petitioner failed to avail of its right to bring the matter before the Court of Tax Appeals within the reglementary period upon the receipt of the demand letter reiterating the assessed delinquent taxes and denying its request for reconsideration which constituted the final determination by the Bureau of Internal Revenue on petitioner‘s protest. the CIR filed a petition for review with the CTA-En Banc. in spite of all its plenitude. Being a final disposition by said agency. 2008 Resolution. the assailed Decision dated February 8. He must be informed of the facts and the law upon which the assessment is made. the letter contained a notation indicating that petitioner‘s request for reconsideration had been denied for lack of supporting documents. In balancing the scales between the power of the State to tax and its inherent right to prosecute perceived transgressors of the law on one side. is deemed final and executory and subject to an appeal to the Court of Tax Appeals. the Court of Tax Appeals properly dismissed the petition as the tax delinquency assessment had long become final and executory. According to CIR. Buot. petitioner consequently filed a Petition for Review with the Court of Appeals contending that there was no final decision to speak of because the Commissioner had yet to make a personal determination as regards the merits of petitioner‘s case.is a domestic corporation duly organized and existing by virtue of the laws of the Republic of the Philippines. 1991 by the Chief of the BIR Accounts Receivable and Billing Division was presumably received by petitioner. It is an elementary rule enshrined in the 1987 Constitution that no person shall be deprived of property without due process of law. It is clear that the sending of a PAN to taxpayer to inform him of the assessment made is but part of the "due process requirement in the issuance of a deficiency tax assessment. the same would have been a proper subject for appeal to the Court of Tax Appeals. Aggrieved. Inc. ruled that the Formal Letter of Demand dated April 3. (Metro Star) of deficiency value-added tax and withholding tax for the taxable year 1999.Petitioner filed its protest against the tax assessments and requested reconsideration or cancellation of the same in a letter to the BIR Commissioner dated April 12. the decision becomes final. METRO STAR SUPERAMA. issued the corresponding warrants of distraint and/or levy and garnishment." the absence of which renders nugatory any assessment made by the tax authorities. and requested its payment: ―Failure to do so would result in the issuance of a warrant of distraint and levy to enforce its collection without further notice. for its failure to send the PAN stating the facts and the law on which the assessment was made as required by Section 228 of R." In addition.2 describes the mandatory nature of the service of a PAN. on March 21. the assessment made by the CIR is void. Mr. The motion for reconsideration filed by the CIR was likewise denied by the CTA-En Banc in its November 18. the notation in the said letter making reference to the protest filed by petitioner clearly shows the intention of the respondent to make it as [his] final decision. The letter of demand dated January 24. The CTA-Second Division found merit in the petition of Metro Star and. acting for the Commissioner of Internal Revenue. Accordingly. 2002. A request for reconsideration must be made within thirty (30) days from the taxpayer‘s receipt of the tax deficiency assessment. On November 8. petitioner filed a Petition for Review with the Court of Tax Appeals (CTA) to contest the issuance of the warrants to enforce the collection of the tax assessments. ." The act of issuance of the demand letter by the Chief of the Accounts Receivable and Billing Division does not fall under any of the exceptions that have been mentioned under Sec. the notice of assessment should state the nature of the tax. None of the other general limitations under Section 133 find application to the case at bar. First. 2005 Topic: Tax Remedies Facts: The corporation owns and holds title to the common and limited common areas of the BA-Lepanto Condominium in Makati City. the Revenue Code provides multiple provisions on business taxes and at a varying rates but in this case there was no exact legal basis for the tax. Issue: Whether or not the City Treasurer can collect business taxes on condominium corporations. the amount deficiency. irrespective of any local ordinance that seeks to declare otherwise. In this case. even from the Makati Revenue Code. The corporation protested saying that there was no statutory basis for the assessment and that it does not fall under the term business.R.YAMANE v. BA LEPANTO CONDOMINIUM CORPORATION G. 601. . OCTOER 25. interests and penalties. 154993. The Corporation is authorized under its by-laws to collect regular assessments from its members for operating expenses. the power of LGUs to impose taxes has a prohibition on the imposition of income taxes except when levied on banks and other financial institutions.77 for the years 1995 to 1997 but was silent as to the statutory of the assessment. Third. and with a significant degree of comfort. The Articles of Incorporation and By-Laws of the corporation and none of these stated corporate purposes are geared towards maintaining a livelihood or the intention of profit. its activities must fall within the definition of business as provided in the LGC. we hold that the condominium corporations are generally exempt from local business taxation under the LGC. Held: No. Second. capital expenditures on the common areas and other special assessments. It stated that the Corporation is liable to pay the correct city business taxes. Accordingly. The members comprise the unit owners. the Corporation received a Notice of Assessments from the City Treasurer.013. fees and charges of P1. in order that the Corporation may be subjected to business taxes. However. The City Treasurer rejected it stating that the corporation activity is a profit venture making. On 1998. as well as the amount of assessment. it did state that the assessment was for business taxes. surcharges.