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1. Philex Mining Corporation vs. CIR, G.R . No. 125704 August 28, 1998

FACTS:The Court of Tax Appeals ordered Philex to pa the a!ou"t of P110, #77,##8.52

as ex$ise tax lia%ilit for the period fro! the 2"d &uarter of 1991 to the 2"d &uarter of 1992 plus 20' a""ual i"terest fro! August #, 1994 u"til full paid.

Philex refused to pa a"d argued that it had pe"di"g $lai!s for (AT i"put

$redit)refu"d for the taxes it paid for the ears 1989*1991 i" the a!ou"t of

P119,977,0+7.02 plus i"terest a"d therefore should %e applied agai"st the said ex$ise

tax lia%ilities i" a !a""er of a set*off or legal $o!pe"satio".

ISSUE: -N taxes $ould %e the su% e$t of a set*off or legal $o!pe"satio"/

RU I!GNo. Taxes $ould "ot %e the su% e$t of a set*off or legal $o!pe"satio" for the

si!ple reaso" that the go er"!e"t a"d the taxpa er are not mutual creditors and

debtors of each other. Claims for taxes are neither debts nor contracts . A

taxpa er $a""ot refuse to pa his taxes he" the fall due si!pl %e$ause he has a

$lai! agai"st the go er"!e"t that the $olle$tio" of the tax is $o"ti"ge"t o" the result of

the la suit it filed agai"st the go er"!e"t. 3" the $ase at %ar, the $lai!s of Philex for

(AT refu"d is still pe"di"g litigatio". oreo er, taxes are the life%lood of the go er"!e"ta"d should %e $olle$ted ithout u""e$essar hi"dra"$e.

Citi"g Francia v. Intermediate Appellate Court, the C $ategori$all held that

taxes $a""ot %e su% e$t to set*off or $o!pe"satio", thus

6 e ha e $o"siste"tl ruled that there $a" %e "o off*setti"g of taxes agai"st the $lai!s

that the taxpa er !a ha e agai"st the go er"!e"t. A perso" $a""ot refuse to pa a

tax o" the grou"d that the go er"!e"t o es hi! a" a!ou"t e&ual to or greater tha" the

tax %ei"g $olle$ted. The $olle$tio" of tax $a""ot a ait the results of a la suit agai"st the

go er"!e"t.

". AT AS C#!S# I$ATE$ A!$ $E%E #PME!T C#RP#RATI#! vs.

C#MMISSI#!ER #F I!TER!A RE%E!UE, . . No. 159490, :e%ruar 18, 2008

FACTS: Atlas is a $orporatio" dul orga"i;ed a"d existi"g u"der Philippi"e la s e"gaged

i" the produ$tio" of $opper $o"$e"trates for export. 3t is registered as a (AT e"tit a"d a

(AT egistratio" Certifi$ate No. +2*0*004#22 effe$ti e August 15, 1990.

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-" epte!%er 20, 199+, Atlas applied ith the of the Tax Code. The $ertifi$ate ould

represe"t the (AT it paid for the first &uarter of 199+ i" the a!ou"t of PhP 7,907,##2.5+,

hi$h $orrespo"ded to the i"put taxes "ot applied agai"st a" output (AT.-" :e%ruar 22, 1995, Atlas the" filed ith the CTA a"d o" -$to%er 1+, 1997,

the CTA re"dered a ?e$isio" agai"st Atlas. The CTA held that Atlas failed to prese"t

suffi$ie"t e ide"$e to arra"t the gra"t of tax $redit or refu"d for the alleged i"put taxes

paid % Atlas. 3t fou"d that the do$u!e"ts su%!itted % Atlas did "ot $o!pl ith

e e"ue egulatio" No. +*88. Atlas ti!el filed its otio" for e$o"sideratio" of the a%o e de$isio" $o"te"di"g

that it relied o" e$. 10# of the Tax Code hi$h !erel re&uired proof that the foreig"

ex$ha"ge pro$eeds has %ee" a$$ou"ted for i" a$$orda"$e ith the regulatio"s of the

Ce"tral

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&. ME ECI# R. $#MI!G#, as Co''issioner o( Internal Reven)e s. *#!.

#RE!+# C. GAR IT#S, in his apa it- as )/ge o( the Co)rt o( First Instan e o(

e-te, an/ SIME#!A 0. PRICE, as A/'inistratrix o( the Intestate Estate o( the late

alter S ott Pri e, . . No. *18994, Du"e 29, 19#+

FACTS:

3" ?o!i"go s. os$oso, the upre!e Court de$lared as fi"al a"d exe$utor the

order of the lo er $ourt for the pa !e"t of estate a"d i"herita"$e taxes, $harges a"d

pe"alties a!ou"ti"g to Php 40,058.55 % the estate of the of the late alter Pri$e. The

petitio"er for exe$utio" filed % the fis$al as de"ied % the lo er $ourt. The $ourt held

that the exe$utio" is u" ustified as the o er"!e"t is i"de%ted to the estate for Php

2#2, 200 a"d ordered the a!ou"t of i"herita"$e taxes $a" %e dedu$ted fro! the

o er"!e"t s i"de%ted"ess to the estate.

ISSUE: hether or "ot a tax a"d a de%t !a %e $o!pe"sated.

RU I!G: The $ourt ha i"g urisdi$tio" of the Bstate had fou"d that the $lai! of the

Bstate agai"st the go er"!e"t has %ee" re$og"i;ed a"d the a!ou"t has alread %ee"

appropriated % a $orrespo"di"g la , ep. A$t No. 2700.

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petitio"er has "o $lear right to exe$ute the udg!e"t for taxes agai"st the estate of the de$eased

alter Pri$e.

2. Co''issioner vs. Alg)e, *28890, 17 :e%ruar 1988

Fa ts: The Philippi"e ugar Bstate ?e elop!e"t Co!pa" =P B?C> appoi"ted Algue

3"$. as its age"t, authori;i"g it to sell its la"d, fa$tories, a"d oil !a"ufa$turi"g pro$ess.

The (egeta%le -il 3" est!e"t Corporatio" =(-3CP> pur$hased P B?C properties. :or

the sale, Algue re$ei ed a $o!!issio" of P125,000 a"d it as fro! this $o!!issio"

that it paid ue ara, et. al. orga"i;ers of the (-3CP, P75,000 i" pro!otio"al fees. 3"

19#5, Algue re$ei ed a" assess!e"t fro! the Co!!issio"er of 3"ter"al e e"ue i" the

a!ou"t of P8+,18+.85 as deli"&ue"$ i"$o!e tax for ears 1958 a!d 1959. Algue filed

a protest or re&uest for re$o"sideratio" hi$h as "ot a$ted upo" % the

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pa ees i" i"du$i"g i" estors =i" (-3CP> to i" ol e the!sel es i" a" experi!e"tal

e"terprise or a %usi"ess re&uiri"g !illio"s of pesos.

3. !PC vs. Cit- o( Ca4anat)an . . No. 149110, April 9, 200+

Fa ts:Natio"al Po er Corporatio", a o er"!e"t - "ed a"d Co"trolled Corporatio"

as assessed % the Cit of Ca%a"atua" for fra"$hise tax pursua"t to se$. +7 of

-rdi"a"$e No. 1#5*92. NPC refused to pa the tax assess!e"t o" the grou"ds that the

Cit of Ca%a"atua" has "o authorit to i!pose tax o" go er"!e"t e"tities a"d also that

it is exe!pted as a "o"*profit orga"i;atio". :or its part, the Cit go er"!e"t alleged that

NPC s exe!ptio" fro! lo$al taxes has %ee" repealed % se$. 19+ of A 71#0.

Iss)e: hether or "ot NPC is lia%le to pa a" a""ual fra"$hise tax to the Cit

go er"!e"t.

RU I!G:-"e of the !ost sig"ifi$a"t pro isio"s of the o$al o er"!e"t Code is the

re!o al of the %la"@et ex$lusio" of i"stru!e"talities a"d age"$ies of the "atio"al

go er"!e"t fro! the $o erage of lo$al taxatio". Although as a ge"eral rule, Hs

$a""ot i!pose taxes, fees or $harges of a" @i"d o" the Natio"al o er"!e"t, its

age"$ies a"d i"stru!e"talities, this rule "o ad!its a" ex$eptio", i.e., when specific

provisions of the LGC authorize the LGUs to impose taxes, fees or charges on the

aforementioned entities. As $o!!o"l used, a fra"$hise tax is Ia tax o" the pri ilege of tra"sa$ti"g

%usi"ess i" the state a"d exer$isi"g $orporate fra"$hises gra"ted % the state.I 3t is "ot

le ied o" the $orporatio" si!pl for existi"g as a $orporatio", upo" its propert or its

i"$o!e, %ut o" its exer$ise of the rights or pri ileges gra"ted to it % the go er"!e"t.

Ee"$e, a $orporatio" "eed "ot pa fra"$hise tax fro! the ti!e it $eased to do %usi"ess

a"d exer$ise its fra"$hise. 3t is ithi" this $o"text that the phrase Itax o" %usi"esses

e" o i"g a fra"$hiseI i" se$tio" 1+7 of the C should %e i"terpreted a"d u"derstood.

(eril , to deter!i"e hether the petitio"er is $o ered % the fra"$hise tax i" &uestio",

the follo i"g re&uisites should $o"$ur

=1> That petitio"er has a Ifra"$hiseI i" the se"se of a se$o"dar or spe$ialfra"$hiseJ a"d

=2> That it is exer$isi"g its rights or pri ileges u"der this fra"$hise ithi"

the territor of the respo"de"t $it go er"!e"t.NPC fulfills %oth re&uisites. To stress, a fra"$hise tax is i!posed %ased "ot o"

the o "ership %ut o" the exer$ise % the $orporatio" of a pri ilege to do %usi"ess. The

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taxa%le e"tit is the $orporatio" hi$h exer$ises the fra"$hise, a"d "ot the i"di idual

sto$@holders. < irtue of its $harter, petitio"er as $reated as a separate a"d disti"$t

e"tit fro! the Natio"al o er"!e"t. 3t $a" sue a"d %e sued u"der its o " "a!e, a"d

$a" exer$ise all the po ers of a $orporatio" u"der the Corporatio" Code.The upre!e C-urt also did "ot fi"d !erit i" the petitio"erKs $o"te"tio" that its

tax exe!ptio"s u"der its $harter su%sist despite the passage of the C. As a rule, tax exemptions are construed strongly against the claimant.

Bxe!ptio"s !ust %e sho " to exist $learl a"d $ategori$all , a"d supported % $lear

legal pro isio"s. 3" the $ase at %ar, the petitio"erKs sole refuge is se$tio" 1+ of ep. A$t

No. #+95 exe!pti"g fro!, a!o"g others, Iall i"$o!e taxes, fra"$hise taxes a"d realt

taxes to %e paid to the Natio"al o er"!e"t, its pro i"$es, $ities, !u"i$ipalities a"d

other go er"!e"t age"$ies a"d i"stru!e"talities.I3t is orth !e"tio"i"g that se$tio" 192 of the C e!po ers the Hs, through

ordi"a"$es dul appro ed, to gra"t tax exe!ptio"s, i"itiati es or reliefs.

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"ephe atthe i" 3rela"d to %e used o"l for the edu$atio" of Ea"le s

%rotherKs $hildre" a"d their des$e"da"ts. 10 ears after Tho!as death, his propert %e gi e" to atthe to %e

disposed of i" the a he thi"@s !ost ad a"tageous.

3" 1924, the C:3 appoi"ted a" ad!i"istrator, oore, e e"tuall repla$ed %

ore";o =after oore resig"ed>. C3 assessed the estate i"herita"$e taxes fro! the

ti!e of Tho!as death i"$ludi"g pe"alties for deli&ue"$ i" pa !e"t =P2@M>. C3

filed a !otio" %efore the C:3 pra i"g that the ore";o %e ordered to pa the said

a!ou"t. The !otio" as gra"ted. ore";o paid u"der protest a"d as@ed for a refu"d.

C3 refused to refu"d.

Iss)es: =a> he" does the i"herita"$e tax a$$rue a"d he" !ust it %e satisfied/

=%> hould the i"herita"$e tax %e $o!puted o" the %asis of the alue of the estate at the ti!e of the testatorKs death, or o" its alue te" ears later/

=a>HP-N ?BATEore";o asserts that arti$le #57 of the Ci il Code =6the rights to the su$$essio" of

a perso" are tra"s!itted fro! the !o!e"t of his death > operates o"l i" so far as

for$ed heirs are $o"$er"ed.E- B(B , there is "o disti"$tio" %et ee" differe"t $lasses of heirs. The

Ad!i"istrati e Code i!poses the tax upo" the tra"s!issio" of propert of a de$ede"t,

!ade effe$ti e % his death. A" excise or privilege tax is i!posed o" the right tosu$$eed to, re$ei e, or ta@e propert % or u"der a ill or the i"testa$ la , or deed,

gra"t, or gift to %e$o!e operati e at or after death. The propert %elo"gs to the heirs at

the !o!e"t of the death of the a"$estor as $o!pletel as if the a"$estor had exe$uted

a"d deli ered to the! a deed for the sa!e %efore his death.i"$e Tho!as Ea"le died o" a 27, 1922, the i"herita"$e tax a$$rued as of

the date. Eo e er, it does "ot follo that the o%ligatio" to pa the tax arose as of the

date. The ti!e for the pa !e"t o" i"herita"$e tax is fixed % the e ised Ad!i"istrati e

Code )$ pro ides that the pa !e"t !ust %e !ade %efore e"tra"$e i"to possessio" of

the propert of the fidei$o!!issar or $estui &ue trust. Thus, the tax should ha e %ee"

paid %efore the deli er of the properties to oore as trustee i" 1924.

=%> AT TEB T3 B -: ?BATEPlai"tiff $o"te"ds that the estate of Tho!as Ea"le $ould "ot legall pass to

atthe u"til after the expiratio" of 10 ears fro! the death of the testator i" 1922 a"d

the i"herita"$e tax should %e %ased o" the alue of the estate i" 19+2.Hpo" the death of the de$ede"t, su$$essio" ta@es pla$e a"d the right of the

estate to tax ests i"sta"tl . The tax should %e !easured % the alue of the estate as it

stood at the ti!e of the de$ede"tKs death, regardless of a" su%se&ue"t $o"ti"ge"$

alue of a" su%se&ue"t i"$rease or de$rease i" alue, or the postpo"e!e"t of the

a$tual possessio" or e" o !e"t of the estate % the %e"efi$iar .

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728 Co''issioner vs. Alg)e As to purpose or o% e$ti e of taxatio"

63t is said that taxes are hat e pa for $i ili;atio" so$iet . ithout taxes, the

go er"!e"t ould %e paral ;ed for la$@ of the !oti e po er to a$ti ate a"d operate it.

Ee"$e, despite the "atural relu$ta"$e to surre"der part of o"eKs hard ear"ed i"$o!e to

the taxi"g authorities, e er perso" ho is a%le to !ust $o"tri%ute his share i" the

ru""i"g of the go er"!e"t. The go er"!e"t for its part, is expe$ted to respo"d i" the

for! of ta"gi%le a"d i"ta"gi%le %e"efits i"te"ded to i!pro e the li es of the people a"d

e"ha"$e their !oral a"d !aterial alues. This s !%ioti$ relatio"ship is the ratio"ale of

taxatio" a"d should dispel the erro"eous "otio" that it is a" ar%itrar !ethod of exa$tio"% those i" the seat of po er.

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9. PA vs. E$U , 1#4 C A +20

FACTS:

Philippi"e Airli"es 3"$. is e"gaged i" air tra"sportatio" %usi"ess u"der a

legislati e fra"$hise herei" it is exe!pt fro! tax pa !e"t. PA has "ot %ee" pa i"g

!otor ehi$le registratio" si"$e 195#. u%se&ue"tl , the a"d egistratio"

Co!!issio"er re&uired all tax exe!pt e"tities i"$ludi"g PA to pa !otor ehi$le

registratio" fees.

ISSUE: hether or "ot registratio" fees as to !otor ehi$les are taxes to hi$h PA is

exe!pted.

RU I!G:

Taxes are for re e"ue hereas fees are exa$tio"s for purposes of regulatio" a"d

i"spe$tio", a"d are for that reaso" li!ited i" a!ou"t to hat is "e$essar to $o er the

$ost of the ser i$es re"dered i" that $o""e$tio". 3t is the o% e$t of the $harge, a"d "ot

the "a!e, that deter!i"es hether a $harge is a tax or a fee. The !o"e $olle$ted

u"der otor (ehi$le a is "ot i"te"ded for the expe"ditures of the ( -ffi$e %ut

a$$rues to the fu"ds for the $o"stru$tio" a"d !ai"te"a"$e of pu%li$ roads, streets a"d

%ridges.

As fees are "ot $olle$ted for regulator purposes as a" i"$ide"t to the e"for$e!e"t of regulatio"s go er"i"g the operatio" of !otor ehi$les o" pu%li$ high a s %ut to pro ide

re e"ue ith hi$h the o er"!e"t is to $o"stru$t a"d !ai"tai" pu%li$ high a s for

e er o"e s use, the are erita%le taxes, "ot !erel fees. PA is thus exe!pt fro!

pa i"g su$h fees, ex$ept for the period %et ee" Du"e 27, 19#8 to April 9, 1979 here

its tax exe!ptio" i" the fra"$hise as repealed.

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. Tolentino vs. Se retar- o( Finan e, =2+5 C A #+0, 249 C A #28> August 25, 1994J -$to%er +0, 1995

Fa ts: There are arious suits $halle"gi"g the $o"stitutio"alit of A 771# o" arious

grou"ds.The alue*added tax =(AT> is le ied o" the sale, %arter or ex$ha"ge of goods a"d

properties as ell as o" the sale or ex$ha"ge of ser i$es. 3t is e&ui ale"t to 10' of the

gross selli"g pri$e or gross alue i" !o"e of goods or properties sold, %artered or

ex$ha"ged or of the gross re$eipts fro! the sale or ex$ha"ge of ser i$es. epu%li$ A$t

No. 771# see@s to ide" the tax %ase of the existi"g (AT s ste! a"d e"ha"$e its

ad!i"istratio" % a!e"di"g the Natio"al 3"ter"al e e"ue Code. A!o"g the Petitio"ers as the Philippi"e Press 3"stitute hi$h $lai! that .A.

771# iolates their press freedo! a"d religious li%ert , ha i"g re!o ed the! fro! the

exe!ptio" to pa (alue Added Tax. 3t is $o"te"ded % the PP3 that % re!o i"g the

exe!ptio" of the press fro! the (AT hile !ai"tai"i"g those gra"ted to others, the la

dis$ri!i"ates agai"st the press. At a" rate, it is a erred, Ie e" "o"dis$ri!i"ator

taxatio" of $o"stitutio"all guara"teed freedo! is u"$o"stitutio"al.I PP3 argued that the

(AT is i" the "ature of a li$e"se tax.

Iss)e: hether or "ot the purpose of the (AT is the sa!e as that of a li$e"se tax.

R)ling: A li$e"se tax, hi$h, u"li@e a" ordi"ar tax, is !ai"l for regulatio". 3ts i!positio"

o" the press is u"$o"stitutio"al %e$ause it la s a prior restrai"t o" the exer$ise of its

right. Ee"$e, although its appli$atio" to others, su$h those selli"g goods, is alid, its

appli$atio" to the press or to religious groups, su$h as the Deho ah s it"esses, i"

$o""e$tio" ith the latter s sale of religious %oo@s a"d pa!phlets, is u"$o"stitutio"al. As

the H. . upre!e Court put it, 6it is o"e thi"g to i!pose a tax o" i"$o!e or propert of aprea$her. 3t is &uite a"other thi"g to exa$t a tax o" hi! for deli eri"g a ser!o".

The (AT is, ho e er, differe"t. It is not a li ense tax. 3t is "ot a tax o" the

exer$ise of a pri ilege, !u$h less a $o"stitutio"al right. 3t is i!posed o" the sale, %arter,

lease or ex$ha"ge of goods or properties or the sale or ex$ha"ge of ser i$es a"d the

lease of properties purel for re e"ue purposes. To su% e$t the press to its pa !e"t is

"ot to %urde" the exer$ise of its right a" !ore tha" to !a@e the press pa i"$o!e tax

or su% e$t it to ge"eral regulatio" is "ot to iolate its freedo! u"der the Co"stitutio".

;. C#C#FE$ vs. Rep)4li , Nos. 177857*58, Da"uar 24, 2012

FACTS:3" 1971, epu%li$ A$t No. #2#0 as e"a$ted $reati"g the Co$o"ut 3" est!e"t

:u"d =C3:>. The sour$e of the C3: as a P0.55 le o" the sale of e er 100 @g. of

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$opra. The Philippi"e Co$o"ut Ad!i"istratio" as tas@ed to $olle$t a"d ad!i"ister the

:u"d. -ut of the 0.55 le , P0.02 as pla$ed at the dispositio" of the C-C-:B?, the

re$og"i;ed "atio"al asso$iatio" of $o$o"ut produ$ers de$lared % the PCA. Co$ofu"d

re$eipts ere ought to %e issued to e er $opra seller.?uri"g the artial a regi!e, the" Preside"t :erdi"a"d ar$os issued se eral

Preside"tial ?e$rees purportedl for the i!pro e!e"t of the $o$o"ut i"dustr . The !ost

rele a"t a!o"g these is P.?. No. 755 hi$h per!itted the use of the :u"d for the

6a$&uisitio" of a $o!!er$ial %a"@ for the %e"efit of $o$o"ut far!ers a"d the

/istri4)tion o( the shares o( the sto < of the %a"@ it FPCAG a$&uired free to the

$o$o"ut far!ers = e$.2>.Thus, the PCA a$&uired the :irst H"ited

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TA B . The :u"ds ere ge"erated % irtue of statutor e"a$t!e"ts % the proper

legislati e authorities a"d for pu%li$ purpose.The :u"ds ere $olle$ted to a/van e the govern'ent avo>e/ poli - o(

prote ting the o on)t in/)str-. The C too@ udi$ial "oti$e of the fa$t that the

$o$o"ut i"dustr is o"e of the great e$o"o!i$ pillars of our "atio", a"d $o$o"uts a"dtheir % produ$ts o$$up a leadi"g positio" a!o"g the $ou"tries export produ$ts.

Taxatio" is do"e "ot !erel to raise re e"ues to support the go er"!e"t, %ut also to

pro ide !ea"s for the reha4ilitation an/ the sta4ili6ation o( a threatene/ in/)str- ,

hi$h is so affe$ted ith p)4li interest .

1?. ohn #s'ena vs. #s ar #r4os, 220 C A 70+. . No 9988#, ar$h +1, 199+

Fa tsPres. ar$os $reated pe$ial A$$ou"t i" the e"eral :u"d =P.?. 195#>,

desig"ated as the -il Pri$e ta%ili;atio" :u"d =-P :>. The -P : as desig"ed to

rei!%urse oil $o!pa"ies for $ost i"$reases i" $rude oil a"d i!ported petroleu!

produ$ts resulti"g fro! ex$ha"ge rate ad ust!e"ts a"d fro! i"$reases i" the orld

!ar@et pri$es of $rude oil.. Pres. A&ui"o, a!e"ded a"d pro!ulgated B.-. No. 1+7,

expa"di"g the grou"ds for rei!%urse!e"t to oil $o!pa"ies for possi%le $ost

u"derre$o er i"$urred as a result of the redu$tio" of do!esti$ pri$es of petroleu!

produ$ts, the a!ou"t of the u"derre$o er %ei"g left for deter!i"atio" % the i"istr of

:i"a"$e. The petitio" $lai!ed that the status of the -P : as of ar$h +1, 1991 sho ed

a 6Ter!i"al

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B"erg AffairsJ Chair!a" ex (. Ta"tio"g$o a"d the B"erg egulator se"t a letter to

Caltex re&uesti"g the latter to re!it its tax $o"tri%utio"s a!ou"ti"g to P++5,0+7,#49 to

-il Pri$e ta%ili;atio" :u"d =-P :> pursua"t to e$tio" 8 of P.?. No. 195#. A"other

letter as se"t to the petitio"er, stati"g that the total a!ou"t of its u"re!itted tax as

P1,287,##8,820.00 fro! 198#*1988 as erified % the -ffi$e of B"erg Affairs =-BA>.?e" i"g su$h re&uest, Caltex a"s ered to C-A s letters as@i"g -BA for earl

release of rei!%urse!e"t $ertifi$ates fro! -P :. C-A de"ied petitio"er s re&uest %ut

i"stead as@ed Caltex to re!it its $olle$tio". As a repl , Caltex ga e a proposal for its

pa !e"t %ased o" P? 195#, as a!e"ded % B.- 1+7J ?epart!e"t of :i"a"$e Cir$ular

No.

1*87J the Ne Ci il Code as to $o!pe"satio"J a"d the e ised Ad!i"istrati e Code.

C-A a$$epted the proposal ex$ept those !atters i" ol i"g offsetti"g the re!itta"$es

a"d rei!%urse!e"ts.Pursua"t to su$h agree!e"t, C-A i"for!ed -BA as to Caltex s re!itta"$es

a!ou"ti"g to P1, 505,##8,90# to -P : a"d allo i"g -BA to rei!%urse Caltex the

a!ou"t of P1, 959,182,#12. Caltex, ho e er, disagreed ith su$h arra"ge!e"t. Caltex

there% i"sisted that its re!itta"$es a"d rei!%urse!e"ts !ust %e offset.

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disregarded su$h $o"te"tio" holdi"g as a %asis the $ase of Francia vs . IAC and

Fernandez, argui"g that -P : is "ot i" the for! of taxatio", therefore "ot for re e"ue

purposes.

ISSUE: hether or "ot -P : $o"tri%utio"s are for "o"*re e"ue purposes of thego er"!e"t a"d it is still i" the for! of taxatio". RU I!G:

B , -P : are for "o"*re e"ue purposes a"d is i" the "ature of taxes.The upre!e Court fou"d "o !erit i" petitio"erKs $o"te"tio" that the -P :

$o"tri%utio"s are "ot for a pu%li$ purpose %e$ause the go to a spe$ial fu"d of the

go er"!e"t. Taxation is no longer envisione/ as a 'eas)re 'erel- to raise

reven)e to s)pport the existen e o( the govern'ent taxes 'a- 4e levie/ >ith a

reg)lator- p)rpose to provi/e 'eans (or the reha4ilitation an/ sta4ili6ation o( athreatene/ in/)str- >hi h is a((e te/ >ith p)4li interest as to 4e >ithin the

poli e po>er o( the state. There $a" %e "o dou%t that the oil i"dustr is greatl i!%ued

ith pu%li$ i"terest as it itall affe$ts the ge"eral elfare. A" u"regulated i"$rease i"

oil pri$es $ould hurt the li es of a !a orit of the people a"d $ause e$o"o!i$ $risis of

u"told proportio"s. 3t ould ha e a $hai" rea$tio" i" ter!s of, a!o"g others, de!a"ds

for age i"$reases a"d up ard spiralli"g of the $ost of %asi$ $o!!odities. The

sta%ili;atio" the" of oil pri$es is of pri!e $o"$er" hi$h the state, ia its poli$e po er,

!a properl address. Also, P.?. No. 195#, as a!e"ded % B.-. No. 1+7, expli$itl pro ides that the

sour$e of -P : is taxatio". No a!ou"t of se!a"ti$al uggleries $ould di! this fa$t.

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1". ESS# STA!$AR$ EASTER!, I!C., 7(or'erl-, Stan/ar/B%a ))' #il Co'pan-8,

vs. T*E C#MMISSI#!ER #F I!TER!A RE%E!UE. . . Nos. *28508*9 Dul 7,1989

Fa ts: The CTA de"ied B - s $lai!s for refu"d of o erpaid i"$o!e taxes of

P102, 24#.00 for 1959 a"d P4+4,2+4.9+ for 19#0 i" CTA Cases No. 1251 a"d 1558

respe$ti el .3" CTA Case No. 1251, petitio"er B - dedu$ted fro! its gross i"$o!e for

1959, as part of its ordi"ar a"d "e$essar %usi"ess expe"ses, the a!ou"t it had spe"t

for drilli"g a"d exploratio" of its petroleu! $o"$essio"s. This $lai! as disallo ed %the respo"de"t Co!!issio"er of 3"ter"al e e"ue o" the grou"d that the expe"ses

should %e $apitali;ed a"d !ight %e ritte" off as a loss o"l he" a Idr holeI should

result. B - the" filed a" a!e"ded retur" here it as@ed for the refu"d of P+2+,279.00

% reaso" of its a%a"do"!e"t as dr holes of se eral of its oil ells a"d $lai!ed as

ordi"ar a"d "e$essar expe"ses the !argi" fees paid to the Ce"tral

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go er"!e"t operatio"s, hile the pro$eeds of the !argi" fee are applied to stre"gthe"

our $ou"tr Ks i"ter"atio"al reser es.The 'argin (ees are not or/inar- an/ ne essar- 4)siness expenses .

Assu!i"g that the expe"diture is ordi"ar a"d "e$essar i" the operatio" of the

taxpa erKs %usi"ess, the a"s er to the &uestio" as to hether the expe"diture is a"allo a%le dedu$tio" as a %usi"ess expe"se !ust %e deter!i"ed fro! the "ature of the

expe"diture itself, hi$h i" tur" depe"ds o" the exte"t a"d per!a"e"$ of the or@

a$$o!plished % the expe"diture.The Court held that the CTA as $orre$t i" sa i"g that the !argi" fees are "ot

expe"ses i" $o""e$tio" ith the produ$tio" or ear"i"g of petitio"erKs i"$o!es i" the

Philippi"es. 6 i"$e the !argi" fees i" &uestio" ere i"$urred for the re!itta"$e of fu"ds

to petitio"erKs Eead -ffi$e i" Ne or@, hi$h is a separate a"d disti"$t i"$o!e

taxpa er fro! the %ra"$h i" the Philippi"es, for its disposal a%road, it $a" "e er %e said

therefore that the !argi" fees ere appropriate a"d helpful i" the de elop!e"t of

petitio"erKs %usi"ess i" the Philippi"es ex$lusi el or ere i"$urred for purposes proper

to the $o"du$t of the affairs of petitio"erKs %ra"$h i" the Philippi"es ex$lusi el or for the

purpose of reali;i"g a profit or of !i"i!i;i"g a loss i" the Philippi"es ex$lusi el .

7 8 Tolentino vs. Se retar- o( Finan e, =2+5 C A #+0, 249 C A #28> As to 3"dire$t a"d ?ire$t TaxesThe Co"stitutio" does "ot reall prohi%it the i!positio" of i"dire$t taxes hi$h,

li@e the (AT, are regressi e. hat it si!pl pro ides is that Co"gress shall Ie ol e a

progressi e s ste! of taxatio".I The $o"stitutio"al pro isio" has %ee" i"terpreted to

!ea" si!pl that Idire$t taxes are Q to %e preferred FRG as !u$h as possi%le, i"dire$t

taxes should %e !i"i!i;ed.I 3"deed, the !a"date to Co"gress is "ot to pres$ri%e, %ut

to e ol e, a progressi e tax s ste!. -ther ise, sales taxes, hi$h perhaps are the

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oldest for! of i"dire$t taxes, ould ha e %ee" prohi%itedQ ales taxes are also

regressi e.6 esort to i"dire$t taxes should %e !i"i!i;ed %ut "ot a oided e"tirel %e$ause it

is diffi$ult, if "ot i!possi%le, to a oid the! % i!posi"g su$h taxes a$$ordi"g to the

taxpa ersK a%ilit to pa . 3" the $ase of the (AT, the la !i"i!i;es the regressi e effe$tsof this i!positio" % pro idi"g for ;ero rati"g of $ertai" tra"sa$tio"s, hile gra"ti"g

exe!ptio"s to other tra"sa$tio"s.

1&. Ernesto M. Ma e/a, vs. *on. Catalino Ma araig, r., . . No. 88291 a +1,

1991

Fa ts:Co!!o" ealth A$t 120 $reated NAP-C- as a pu%li$ $orporatio" to u"derta@e

the de elop!e"t of h drauli$ po er a"d the produ$tio" of po er fro! other sour$es.A +58 =1949> gra"ted NAP-C- tax a"d dut exe!ptio" pri ileges. A #+95 =1971>

re ised the $harter of the NAP-C- , tas@i"g it to $arr out the poli$ of the "atio"al

ele$trifi$atio", a"d pro ided i" detail NAP-C- s tax ex$eptio"s. P? +80 =1974>

spe$ified that NAP-C- s exe!ptio" i"$ludes all taxes, et$. i!posed 6dire$tl or

i"dire$tl . P? 9+8 i"tegrated the exe!ptio"s i" fa or of -CCs i"$ludi"g their

su%sidiariesJ however, empowering the President or the Minister of Finance, upon

recommendation of the Fiscal Incentives eview !oard "FI !# to restore, partially

or completely, the exemptions withdrawn or revised . The :3 < issued esolutio"

10*85 =7 :e%ruar 1985> restori"g the dut a"d tax exe!ptio"s pri ileges of NAP-C-

for period 11 Du"e 1984* +0 Du"e 1985. esolutio" 1*8# =1Da"uar 198#> restored su$h

exe!ptio" i"defi"itel effe$ti e 1 Dul 1985. B- 9+ =1987> agai" ithdre the

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exe!ptio". :3 < issued esolutio" 17*87 =24 Du"e 1987> restori"g NAP-C- s

exe!ptio", hi$h as appro ed % the Preside"t o" 5 -$to%er 1987.i"$e 197#, oil fir!s "e er paid ex$ise or spe$ifi$ a"d ad alore! taxes for

petroleu! produ$ts sold a"d deli ered to NAP-C- . -il $o!pa"ies started to pa

spe$ifi$ a"d ad alore! taxes o" their sales of oil produ$ts to NAP-C- o"l i" 1984 .!AP#C#R lai'e/ (or a re()n/ 7P25 .3 'illion8. -"l portio" thereof,

$orrespo"di"g to Caltex, as appro ed a"d released % a of a tax $redit !e!o. The

$lai! for refu"d of taxes paid % PetroPhil, hell a"d Caltex a!ou"ti"g to P410.58

!illio" as de"ied. NAP-C- !o ed for re$o"sideratio", starti"g that all deli eries of

petroleu! produ$ts to NAP-C- are tax exe!pt, regardless of the period of deli er .

ISSUE: hether or not !PC is exe'pte/ (ro' pa-ing in/ire t tax.

R)ling: The NPC is exe!pted to pa i"dire$t taxes. The $ourt disti"guish dire$t tax fro!

i"dire$t tax.

a. ?ire$t Tax O that here the perso" supposed to pa the tax reall pa s

it. %I&'(U& tra"sferri"g the %urde" to so!eo"e else.%. 3"dire$t Tax O that here the tax is i!posed upo" goods )*F(+* rea$hi"g

the $o"su!er ho ulti!atel pa s for it, "ot as a tax, %ut as a part

of the pur$hase pri$e.

The !ai" thrust of the petitio" is that u"der the latest a!e"d!e"t to the NPC$harter % Preside"tial ?e$ree No. 9+8, the exe!ptio" of NPC fro! i"dire$t taxatio"

as re o@ed a"d repealed. The exe!ptio" of NPC fro! pa !e"t of taxes u"der P?

9+8 as expressed i" ge"eral ter! 6A :- -: TA B herei" there is a

deletio" of the phrases Idire$tl or i"dire$tl I hi$h is stated u"der Preside"tial ?e$ree

No. +80 that is repealed a"d a!e"ded % P? 9+8.The use of the phrase Iall for!sI of taxes de!o"strate the i"te"tio" of the la to

gi e NPC all the tax exe!ptio"s it has %ee" e" o i"g %efore. The ratio"ale for this

exe!ptio" is that %ei"g "o"*profit pu%li$ $orporatio" $reated for the ge"eral good a"delfare holl o "ed % the go er"!e"t of the epu%li$ of the Philippi"es the NPC

Ishall de ote all its retur"s fro! its $apital i" est!e"t as ell as ex$ess re e"ues fro!

its operatio", for expa"sio" to e"a%le the Corporatio" to pa the i"de%ted"ess a"d

o%ligatio"s a!ou"ti"g to P12

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12. C#MMISSI#!ER #F I!TER!A RE%E!UE, vs. #*! G#TAMC# S#!S, I!C.

an/ T*E C#URT #F TA@ APPEA S, . . No. *+1092 :e%ruar 27, 1987

Fa ts:The orld Eealth -rga"i;atio" is a" i"ter"atio"al orga"i;atio" hi$h e" o s

pri ileges a"d i!!u"ities u"der the Eost Agree!e"t e"tered i"to %et ee" the

Philippi"es hi$h pro ides that the -rga"i;atio", its assets, i"$o!e a"d other

properties shall %e exe!pt fro! all dire$t a"d i"dire$t taxes.he" the E- de$ided to $o"stru$t a %uildi"g to house its o " offi$es statio"ed

i" a"ila, it e"tered i"to a further agree!e"t ith the o er"!e"t that the -rga"i;atio"!a i!port i"to the $ou"tr !aterials a"d fixtures re&uired for the $o"stru$tio" free fro!

all duties a"d taxes a"d agrees "ot to utili;e a" portio" of the i"ter"atio"al reser es of

the o er"!e"t.3" i" iti"g %ids for the $o"stru$tio" of the %uildi"g, the E- i"for!ed the %idders

that the %uildi"g to %e $o"stru$ted %elo"ged to a" i"ter"atio"al orga"i;atio" ith

diplo!ati$ status a"d thus exe!pt fro! the pa !e"t of all fees, li$e"ses, a"d taxes.

The $o"stru$tio" $o"tra$t as a arded to respo"de"t Doh" ota!$o R o"s, 3"$. for

the stipulated pri$e of P+70,000.00, %ut he" the %uildi"g as $o!pleted the pri$e

rea$hed a total of P452,544.00.o!eti!e i" a 1958, the E- re$ei ed a" opi"io" fro! the Co!!issio"er of

the

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a$$orda"$e ith the Eost Agree!e"t. u%se&ue"tl , o" Du"e +, 1958, the

Co!!issio"er of 3"ter"al e e"ue re ersed his opi"io" a"d stated that as the +'

$o"tra$torKs tax is "ot a dire$t "or a" i"dire$t tax o" the E-, %ut a tax that is pri!aril

due fro! the $o"tra$tor, the sa!e is "ot $o ered % the Eost Agree!e"t.3" Da"uar 17, 19#1, the Co!!issio"er of 3"ter"al e e"ue se"t a letter of

de!a"d to ota!$o de!a"di"g pa !e"t of P 1#,970.40, represe"ti"g the +'

$o"tra$torKs tax plus sur$harges o" the gross re$eipts.espo"de"t ota!$o appealed the Co!!issio"erKs de$isio" to the Court of Tax

Appeals, hi$h after trial re"dered a de$isio", i" fa or of ota!$o.Ee"$e, this appeal.

Iss)e: hether or "ot respo"de"t Doh" ota!$o R o"s, 3"$. should pa the +'

$o"tra$torKs tax u"der e$tio" 191 of the Natio"al 3"ter"al e e"ue Code.

R)ling: Petitio"erKs positio" is that the $o"tra$torKs tax is i" the "ature of a" ex$ise tax

hi$h is a $harge i!posed upo" the perfor!a"$e of a" a$t, the e" o !e"t of a pri ilege

or the e"gagi"g i" a" o$$upatio". 3t is a tax due pri!aril a"d dire$tl o" the $o"tra$tor,

"ot o" the o "er of the %uildi"g. i"$e this tax has "o %eari"g upo" the E-, it $a""ot

%e dee!ed a" i"dire$t taxatio" upo" it.

13. Sil

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added to the $ost of said good sold to the %u er. CTA, e$o"d ?i isio", i" its de$isio"

o" 27 a 2005, dis!issed said petitio" o" the grou"d that the latter is "ot the proper

$lai!a"t, a"d li@e ise de"ied il@air s su%se&ue"t otio" for e$o"sideratio" therefor.

u%se&ue"tl , il@air s Petitio" for e ie %efore CTA B" =2> thus pro ides 6FuG"less other ise spe$ifi$all allo ed, the retur" shall %e

filed a"d the ex$ise tax paid % the !a"ufa$turer or produ$er %efore re!o al of

do!esti$ produ$ts fro! pla$e of produ$tio". Petro", "ot il@air, is thus the o"e

e"titled to $lai! refu"d %ased o" e$tio" 1+5 of the N3 C of 1997 a"d Arti$le

4=2> of the Air Tra"sport Agree!e"t %et ee" P a"d i"gapore. The tax %urde"

passed % Petro" to il@air is "o lo"ger a tax %ut a part of the pur$hase pri$e.

The %est that il@air !a do, if allo ed, is o"l to see@ rei!%urse!e"t of the tax

%urde" fro! Petro". falls o" o"e perso", a"d the i!pa$t of taxatio"

=%urde" of taxatio"> falls o" a"other. C ruled that 6FtGhe exe!ptio" gra"ted

u"der e$tio" 1+5 =%> of the N3 C of 1997 a"d Arti$le 4=2> of the Air Tra"sport Agree!e"t %et ee" P a"d i"gapore $a""ot, ithout a $lear sho i"g of

legislati e i"te"t, %e $o"strued as i"$ludi"g i"dire$t taxes. C further explai"ed

that 6FsGtatutes gra"ti"g tax exe!ptio"s !ust %e $o"strued i" strictissimi -uris

agai"st the taxpa er a"d li%erall i" fa or of the taxi"g authorit , a"d if a"

exe!ptio" is fou"d to exist, it !ust "ot %e e"larged % $o"stru$tio".

il@air s petitio" is ?BN3B?.

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15. Co''issioner o( Internal Reven)e vs. Co)rt #( Appeals, Atlas

Consoli/ate/ Mining an/ $evelop'ent Corporation, an/ Co)rt o( Tax

Appeals. . No. 104151, ar$h 10, 1995

Fa ts: Atlas Co"slidated i"i"g a"d ?e elop!e"t Corporatio" =AC ?C> is a

do!esti$ $orporatio" hi$h o "s a"d operates a !i"i"g $o"$essio" at Toledo Cit ,

Ce%u, the produ$ts of hi$h are exported to Dapa" a"d other foreig" $ou"tries. -" April

9, 1980 a"d epte!%er 2+, 1980, the Co!!issio"er of 3"ter"al e e"ue =C3 >, $aused

the ser i$e of a" assess!e"t "oti$e a"d de!a"d for pa !e"t of the a!ou"t of

P12,+91,070.51 a"d P1+,5+1,4##.80 represe"ti"g defi$ie"$ ad valorem per$e"tage

a"d fixed taxes, i"$ludi"g i"$re!e"ts, ith P5,000.00 $o!pro!ise pe"alt for thetaxa%le ear 1975 a"d 197#, respe$ti el , agai"st AC ?C.

AC ?C protested %oth assess!e"ts %ut the sa!e ere de"ied he"$e it filed t o

separate petitio"s for re ie i" the Court of Tax Appeals =CTA> hi$h ere e e"tuall

$o"solidated.

CTA ustai"ed the $o"te"tio" of AC ?C that i" $o!puti"g the ad valorem tax

o" $opper !i"eral, the refi"i"g a"d s!elti"g $harges should %e dedu$ted, i" additio" to

freight a"d i"sura"$e $harges, fro! the o"do" etal Bx$ha"ge = B> pri$e of

!a"ufa$tured $opper.Eo e er, the CTA held AC ?C lia%le for the a!ou"t of P1,572,#+7.48, ex$lusi e

of i"terest, $o"sisti"g of 25' sur$harge for late pa !e"t of the ad valorem tax o" No U

?e$ 1975 a"d taxa%le ear 197#, a"d late fili"g of "oti$e of re!o al of sil er, gold a"d

p rite extra$ted duri"g $ertai" periods, a"d for alleged defi$ie"$ !a"ufa$turerKs sales

tax a"d $o"tra$torKs tax.

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2. hether or "ot AC ?C is lia%le for the 25' sur$harge for alleged late fili"g of

"oti$e of re!o al)late pa !e"t of the ad valorem tax o" sil er, gold a"d p rite extra$ted

duri"g the taxa%le ear 197#.+. hether or "ot AC ?C is lia%le for !a"ufa$turer s tax for selli"g gri"di"g steel

%alls.4. hether or "ot AC ?C is lia%le for $o"tra$tor s tax for leasi"g its pla"e, !otor

%oat, a"d du!p tru$@.

R)ling:

1. es, the refi"i"g a"d s!elti"g $harges should %e dedu$ted i" $o!puti"g the ad

alore! tax of AC ?C. Ad valorem tax =defi"itio" i" e$ 24+ of the N3 C> of 2' is to %e $o!puted o"

the %asis of the !ar@et alue of the !i"eral i" its $o"ditio" at the ti!e of su$h re!o ala"d %efore it u"dergoes a $he!i$al $ha"ge through !a"ufa$turi"g pro$ess.3t is a tax

"ot o" the !i"erals, %ut %ei"g a severan e tax , it is $harge upo" the pri ilege of

se eri"g or extra$ti"g the !i"eral fro! the earth, the go er"!e"tKs right to exa$t the

said i!post spri"gi"g fro! the egalia" theor of tate o "ership of its "atural

resour$es. A re ie of the re$ords sho ed that it as the o"do" etal Bx$ha"ge pri$e o"

ire %ar =a fi"ish produ$t of $opper, that had alread u"dergo"e pro$essi"g> that as

used as tax %ase % AC ?C for purposes of the 2' ad valorem tax o" $opper $o"$e"trates si"$e there as "o a aila%le !ar@et pri$e &uotatio" i" the $o!!odit

ex$ha"ge or !ar@ets of the orld for $opper $o"$e"trates "or as there a" !ar@et

&uotatio" lo$all o%tai"a%le.Therefore, the i!posa%le ad valorem tax should %e %ased o" the selli"g pri$e of

the &uarried ra !i"erals, hi$h is its a$tual !ar@et alue, a"d "ot o" the pri$e of the

!a"ufa$tured produ$t. 3f the !ar@et alue $hose" for the re$@o"i"g is the alue of the

!a"ufa$tured or fi"ished produ$t, as i" the $ase at %ar, the" all expe"ses of pro$essi"g

or !a"ufa$turi"g should %e dedu$ted i" order to approxi!ate as $losel as is hu!a"l

possi%le the a$tual !ar@et alue of the ra !i"eral at the !i"e site.

2. es, AC ?C is lia%le for 25' sur$harge for the alleged late fili"g of "oti$e of

re!o al)late pa !e"t of the ad valorem tax o" sil er, gold a"d p rite extra$ted duri"g

the taxa%le ear 197#.H"der e$ 245 of the N3 C, the pa !e"t of the ad valorem tax shall %e !ade

upo" re!o al of the !i"eral produ$ts fro! the !i"e site or if pa !e"t $a""ot %e !ade,

% fili"g a %o"d i" the for! a"d a!ou"t to %e appro ed % the Co!!issio"er

$o"ditio"ed upo" the pa !e"t of the said tax.i e" the fa$t that AC ?C has the $apa%ilit , as testified % its a"al st, of deter!i"i"g

the esti!ated sil er, gold, a"d p rite $o"te"t of a" ore %efore it is a$tuall pro$essed for

separatio", %elie AC ?C s $o"te"tio" that it should "ot %e re&uired to pa the 25'

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sur$harge %e$ause the $orre$t &ua"tit of gold a"d sil er $ould %e deter!i"ed o"l after

the $opper $o"$e"trates had go"e through the pro$ess of s!elti"g a"d refi"i"g i" Dapa"

hile the a!ou"t of p rite $a""ot %e deter!i"ed u"til after the flotatio" pro$ess

separati"g the $opper !i"eral fro! the aste !aterial as fi"ished.

+. No, AC ?C is "ot lia%le for !a"ufa$turer s tax.H"der the tax $ode = e 18#>, the 7' !a"ufa$turerKs sales tax, hi$h is a" ex$ise

tax, is i!posed o" the !a"ufa$turer for e er origi"al sale, %arter, ex$ha"ge a"d other

si!ilar tra"sa$tio" i"te"ded to tra"sfer o "ership of arti$les. A I!a"ufa$turerI is defi"ed

as i"$ludi"g Ie er perso" ho % ph si$al or $he!i$al pro$ess alters the exterior

texture or for! or i""er su%sta"$e of a" ra !aterial or !a"ufa$tured or partiall

!a"ufa$tured produ$t i" su$h !a""er as to prepare it for a spe$ial use or uses to hi$hit $ould "ot ha e %ee" put i" its origi"al $o"ditio" =Q> to produ$e su$h fi"ished produ$ts

for the purpose of their sale or distri%utio" to others a"d "ot for his o " use or

$o"su!ptio".3t $a""ot %e legall assertedthat AC ?C as e"gaged i" the %usi"ess of selli"g

gri"di"g steel %alls o" the %asis of the isolated tra"sa$tio" e"tered i"to % it i" 1975.

There is "o sho i"g that said tra"sa$tio" as u"derta@e" % AC ?C ith a ie of

gai"i"g profit a"d ith the i"te"t of $arr i"g o" a %usi"ess. -" the $o"trar , hat is

$lear is that the sale as !ore of a" a$$o!!odatio" to the other !i"i"g $o!pa"ies,ho ere experie"$i"g shortage i" gri"di"g steel %alls, a"d that AC ?C as

su%se&ue"tl repla$ed % other suppliers shortl thereafter. ell*settled is the rule that

a" thi"g do"e as a !ere i"$ide"t to, or as a "e$essar $o"se&ue"$e of, the pri"$ipal

%usi"ess is "ot ordi"aril taxed as a" i"depe"de"t %usi"ess i" itself.

4. es, AC ?C is lia%le for $o"tra$tor s tax.Co"tra$torKs tax, also a" ex$ise tax, is pro ided for u"der e$tio" 191, paragraph

17 of hi$h de$lares that lessors of perso"al propert shall %e su% e$t to a $o"tra$torKs

tax of +' of the gross re$eipts. AC ?C $a""ot alidl $lai! that the leasi"g out of its perso"al properties as

!erel i"$ide"tal to its pri!ar li"e of %usi"ess a"d is a !ere isolated tra"sa$tio" "ot

i"te"ded for profit. 3ts %oo@ of a$$ou"ts sho ed series of tra"sa$tio"s a"d that se eral

disti"$t pa !e"ts ere !ade for the use of its perso"al properties su$h as its pla"e,

!otor %oat a"d du!p tru$@ a!ou"ti"g to P#+0,171.5# for tax ear +9 a"d

P2,450,218.#2 for tax ear 197#. AC ?C s $lai! that it did "ot gai" profit fro! su$h lease is "egated % the fa$t

that it as "ot a%le to sho proof of irregularities i" the assess!e"t !ade % the

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19. %illan)eva vs. Cit- #( Iloilo=2# C A 578>

FACTS:el i"g o" the passage of A 22#4 or the o$al Auto"o! A$t, 3loilo e"a$ted

-rdi"a"$e 11 eries of 19#0, i!posi"g a !u"i$ipal li$e"se tax o" te"e!e"t houses i"

a$$orda"$e ith the s$hedule of pa !e"t pro ided % therei". (illa"ue a a"d the other

appellees are apart!e"t o "ers fro! ho! tshe $it $olle$ted li$e"se taxes % irtue of

-rdi"a"$e 11. Appellees a er that the said ordi"a"$e is u"$o"stitutio"al for A 22#4

does "ot e!po er $ities to i!pose apart!e"t taxesJ that the sa!e is oppressi e a"d

u"reaso"a%le for it pe"ali;es those ho fail to pa the apart!e"t taxesJ that it

$o"stitutes "ot o"l dou%le taxatio" %ut tre%le taxatio"J a"d, that it iolates u"ifor!it of

taxatio".

Iss)es:1. ?oes the ordi"a"$e i!pose dou%le taxatio"/2. 3s 3loilo $it e!po ered % A 22#4 to i!pose te"e!e"t taxes/

RU I!G:hile it is true that appellees are taxa%le u"der the N3 C as real estate dealers,

a"d taxa%le u"der -rdi"a"$e 11, dou%le taxatio" !a "ot %e i" o@ed. This is %e$ause

the sa!e tax !a %e i!posed % the "atio"al go er"!e"t as ell as % the lo$al

go er"!e"t. The $o"te"tio" that appellees are dou%l taxed %e$ause the are pa i"g

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real estate taxes a"d the te"e!e"t tax is also de oid of !erit. A li$e"se tax !a %e

le ied upo" a %usi"ess or o$$upatio" although the la"d or propert used i" $o""e$tio"

there ith is su% e$t to propert tax. 3" order to $o"stitute dou%le taxatio", %oth taxes

!ust %e the sa!e @i"d or $hara$ter. eal estate taxes a"d te"e!e"t taxes are "ot of

the sa!e $hara$ter.A 22#4 $o"fers lo$al go er"!e"ts %road taxi"g po ers. The i!positio" of the

te"e!e"t taxes does "ot fall ithi" the ex$eptio"s !e"tio"ed % the sa!e la . 3t is

argued ho e er that the said taxes are real estate taxes a"d thus, the i!positio" of

!ore the 1 per $e"tu! real estate tax hi$h is the li!it pro ided % CA 158, !a@es the

said ordi"a"$e ultra ires. The $ourt ruled that the tax i" &uestio" is "ot a real estate

tax. 3t does "ot ha e the attri%utes of a real estate tax. < the title a"d the ter!s of the

ordi"a"$e, the tax is a !u"i$ipal tax hi$h !ea"s a" i!positio" or exa$tio" o" the rightto use or dispose of propert , to pursue a %usi"ess, o$$upatio" or $alli"g, or to exer$ise

a pri ilege. Te"e!e"t houses %ei"g offered for re"t or lease $o"stitute a disti"$t for! of

%usi"ess or $alli"g a"d as su$h, the i!positio" of !u"i$ipal tax fi"ds support i" e$tio"

2 of A 22#4.

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1 . Allie/ =anhi hever is higher, as

evi/en e/ 4- the erti(i ate o( pa-'ent o( the apital gains tax iss)e/ there(or.

Petitio"er $o"te"ds that the pro iso is $o"trar to the o$al o er"!e"t Code

a"d the o$al Assess!e"t egulatio"s No. 1*92. TC later o" dis!issed the petitio".

ISSUE: hether or "ot se$tio" +, Vue;o" Cit -rdi"a"$e No. +57, eries of 1995,

hi$h as a%rogated for %ei"g u"$o"stitutio"al, $a" %e the %asis of $olle$ti"g real

estate taxes prior to its repeal.

RU I!G:No. The alidit of the pro iso fixi"g the appraised alue of propert at the stated

$o"sideratio" at hi$h the propert as last sold is invali/ as it adopts a !ethod of

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assess!e"t or appraisal of real propert $o"trar to the o$al o er"!e"t Code, its

3!ple!e"ti"g ules a"d egulatio"s a"d the o$al Assess!e"t egulatio"s No. 1*92

issued % the ?epart!e"t of :i"a"$e. H"der these i!!ediatel stated authorities, real

properties shall %e appraised at the $urre"t a"d fair !ar@et alue pre aili"g i" the

lo$alit here the propert is situated a"d $lassified for assess!e"t purposes o" the

%asis of its a$tual use.6:air !ar@et alue is the pri$e at hi$h a propert !a %e sold % a seller ho is

"ot $o!pelled to sell a"d %ought % a %u er ho is "ot $o!pelled to %u , ta@i"g i"to

$o"sideratio" all uses to hi$h the propert is adapted a"d !ight i" reaso" %e applied.

The $riterio" esta%lished % the statute $o"te!plates a h potheti$al sale. Ee"$e, the

%u ers "eed "ot %e a$tual a"d existi"g pur$hasers.

7 8 Tolentino vs. Se retar- o( Finan e 7"&3 SCRA 5&?, "2; SCRA 5" 8

As to Proportional or Flat ate:i"all , it is $o"te"ded, for the reaso"s alread "oted, that .A. No. 771# also

iolates Art. (3, W28=1> hi$h pro ides that IThe rule of taxatio" shall %e u"ifor! a"d

e&uita%le. the Co"gress shall e ol e a progressi e s ste! of taxatio".IB&ualit a"d u"ifor!it of taxatio" !ea"s that all taxa%le arti$les or @i"ds of propert of

the sa!e $lass %e taxed at the sa!e rate. The taxi"g po er has the authorit to !a@e

reaso"a%le a"d "atural $lassifi$atio"s for purposes of taxatio". To satisf this

re&uire!e"t it is e"ough that the statute or ordi"a"$e applies e&uall to all perso"s,

for!s a"d $orporatio"s pla$ed i" si!ilar situatio". =Cit of

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1;. Fran is o I. Chave6 vs. ai'e =. #ngpin an/ Fi/elina Cr)6,. . No. 7#778. Du"e #, 1990

FACTS:e$tio" 21 of Preside"tial ?e$ree No. 4#4 pro ides that e er fi e ears starti"g

$ale"dar ear 1978, there shall %e a pro i"$ial or $it ge"eral re isio" of real propert

assess!e"ts. The re ised assess!e"t shall %e the %asis for the $o!putatio" of real

propert taxes for the fi e su$$eedi"g ears.-" the stre"gth of the afore!e"tio"ed la , the ge"eral re isio" of assess!e"ts

as $o!pleted i" 1984. Eo e er, Bxe$uti e -rder No. 1019 as issued, hi$h

deferred the $olle$tio" of real propert taxes %ased o" the 1984 alues to Da"uar 1,

1988 i"stead of Da"uar 1, 1985.-" No e!%er 25, 198#, Preside"t Cora;o" A&ui"o issued Bxe$uti e order No.

7+. 3t states that %egi""i"g Da"uar 1, 1987, the 1984 assess!e"ts shall %e the %asis

of the real propert $olle$tio". Thus, it effe$ti el repealed Bxe$uti e -rder No. 1019.:ra"$is$o Cha e;, a taxpa er a"d a la"d*o "er, &uestio"ed the $o"stitutio"alit

of Bxe$uti e -rder No. 7+. Ee alleges that it ill %ri"g u"reaso"a%le i"$rease i" real

propert taxes. 3" fa$t, a$$ordi"g to hi!, the appli$atio" of the assailed order ill $ause

a" ex$essi e i"$rease i" real propert taxes % 100' to 400' o" i!pro e!e"ts a"d up

to 100' o" la"d.

ISSUE: hether or "ot Bxe$uti e -rder "o. 7+ i!poses u"reaso"a%le i"$rease i" real

propert taxes, thus, should %e de$lared u"$o"stitutio"al.

RU I!G:The atta$@ o" Bxe$uti e -rder No. 7+ has "o legal %asis as the ge"eral re isio"

of assess!e"ts is a $o"ti"ui"g pro$ess !a"dated % e$tio" 21 of Preside"tial ?e$ree

No. 4#4. 3f at all, it is Preside"tial ?e$ree No. 4#4 hi$h should %e $halle"ged as

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$o"stitutio"all i"fir!. Eo e er, Cha e; failed to raise a" o% e$tio" agai"st said

de$ree.ithout Bxe$uti e -rder No. 7+, the %asis for $olle$tio" of real propert taxes ill

still %e the 1978 re isio" of propert alues. 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 ade$uacy, which is one of the

characteristics of a sound tax system, re$uires that sources of revenues must be

ade$uate to meet government expenditures and their variations.

"?. TAGA!IT# MI!I!G C#RP#RATI#! vs. C#MMISSI#!ER,CTA Case No. 4702 April 28, 1995

Fa ts:Taga"ito i"i"g Corporatio" =T C> is a do!esti$ $orporatio" expressl gra"ted

a per!it % the go er"!e"t ia a" operati"g $o"tra$t to explore, de elop a"d utili;e

!i"eral deposits fou"d i" a spe$ified portio" of a !i"eral reser atio" area lo$ated i"

urigao del Norte a"d o "ed % the go er"!e"t. 3" ex$ha"ge, T C is o%liged to pa

ro alt to the go er"!e"t o er a"d a%o e other taxes. ?uri"g Dul to ?e$e!%er 1989,

T C re!o ed, shipped a"d sold su%sta"tial &ua"tities of

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i"di$ated i" the fi"al $al$ulatio" sheet prese"ted % the %u ers. ariances o$$ur i" the

eight of the ship!e"t or the pri$e of the !etalli$ !i"erals per @ilogra! a"d so!eti!es

i" their !etalli$ $o"te"t resulti"g i" dis$repa"$ies i" the total selli"g pri$e. 3t is al a s

the pri$e i"di$ated i" the fi"al i" oi$e that is deter!i"ati e of the a!ou"t that the %u ers

ill e e"tuall pa T C.&/C $o"te"ded that is e"titled to a refu"d %e$ause the a$tual !ar@et alue that

should %e !ade the %asis of the taxes is the a!ou"t spe$ified i" the i"depe"de"t

sur e or a%road.

Iss)es:1. hether or "ot T C is e"titled to refu"d.2. hether or "ot the a$tual !ar@et alue that should %e used should %e the !ar@et

alue after the assess!e"t a%road as $o"du$ted.

RU I!G:1. N-. Tax refu"d parta@e of the "ature of a" exe!ptio", a"d as su$h, tax

exe!ptio" $a""ot %e allo ed u"less gra"ted i" the !ost expli$it a"d $ategori$al

la"guage. Taxes are hat e pa for $i ili;ed so$iet . ithout taxes, the go er"!e"t

ould %e paral ;ed for la$@ of the !oti e po er to a$ti ate a"d operate it.

2. N-. Hse !ar@et alue right after re!o al fro! the %ed or !i"es. e$. 151=+>

of the Tax Code1 o" all !etalli$ !i"erals, a tax of fi e per$e"t =5'> %ased o" the a$tual

!ar@et alue of the gross output thereof at the time of removal , i" the $ase of those

lo$all extra$ted or produ$ed or the alue used % the . The te"a"ts

therei" expressed their desire to pur$hase fro! the %rothers the par$els hi$h the

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a$tuall o$$upied so the go er"!e"t, pursua"t to the $o"stitutio"al !a"date to a$&uire

%ig la"ded estate a"d apportio" the! a!o"g la"dless te"a"ts, persuaded the %rothers

sell the sa!e. oxas Cia. the" agreed to sell 1+, 500 he$tares of the la"ds %ut the

go er"!e"t, ho e er, did "ot ha e e"ough fu"ds, so the for!er allo ed the far!ers to

%u the la"ds for the sa!e pri$e %ut % i"stall!e"t. u%se&ue"tl , the C3 de!a"ded

fro! the %rothers the pa !e"t of defi$ie"$ i"$o!e taxes resulti"g fro! the sale of the

far!la"ds a"d $o"sidered the part"ership as e"gaged i" the %usi"ess of real estate,

he"$e, 100' of the profits deri ed therefro! as taxed. The %rothers protested the

assess!e"t %ut the sa!e as de"ied. -" appeal, the Court of Tax Appeals sustai"ed

the assess!e"t. Ee"$e, this appeal. Iss)e: 3s oxas Cia. lia%le for the pa !e"t of defi$ie"$ i"$o!e for the sale of the

far!la"ds/

R)ling:No. Although the =far!ers) e"dees> paid for their respe$ti e holdi"gs i"

i"stall!e"t for a period of 10 ears, it ould "e ertheless "ot !a@e the e"dor oxas

Cia. a real estate dealer duri"g the 10* ear a!orti;atio" period. 3t should %e %or"e i"

!i"d that the sale of the Nasug%u far! la"ds to the er far!ers ho tilled the! for

ge"eratio"s as "ot o"l i" $o"so"a"$e ith, %ut !ore i" o%edie"$e to the re&uest a"d

pursua"t to the poli$ of our o er"!e"t to allo$ate la"ds to the la"dless. Eo e er, theo er"!e"t $ould "ot $o!pl ith its dut for la$@ of fu"ds so oxas Cia. shouldered

the o er"!e"tKs %urde", e"t out of its a a"d sold la"ds dire$tl to the far!ers i"

the sa!e a a"d u"der the sa!e ter!s as ould ha e %ee" the $ase had the

o er"!e"t do"e it itself. :or this !ag"a"i!ous a$t, the !u"i$ipal $ou"$il of Nasug%u

passed a resolutio" expressi"g the peopleKs gratitude.The po er of taxatio" is so!eti!es $alled also the po er to destro . Therefore it

should %e exer$ised ith $autio" to !i"i!i;e i" ur to the proprietar rights of a

taxpa er. 3t !ust %e exer$ised fairl , e&uall a"d u"ifor!l , lest the tax $olle$tor @ill the

Ihe" that la s the golde" eggI. A"d, i" order to !ai"tai" the ge"eral pu%li$Ks trust a"d

$o"fide"$e i" the o er"!e"t this po er !ust %e used ustl a"d "ot trea$herousl . 3t

does "ot $o"for! ith -ur se"se of usti$e i" the i"sta"t $ase for the o er"!e"t to

persuade the taxpa er to le"d it a helpi"g ha"d a"d later o" to pe"ali;e hi! for dul

a"s eri"g the urge"t $all.3" fi"e, oxas Cia. $a""ot %e $o"sidered a real estate dealer for the sale i"

&uestio". Ee"$e, pursua"t to e$tio" +4 of the Tax Code the la"ds sold to the far!ers

are $apital assets, a"d the gai" deri ed fro! thesale thereof is $apital gai", taxa%le o"l

to the exte"t of 50'.

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"". Tana/a vs. Angara, . . No. 118295, a 2, 1997

Fa ts: -" April 15, 1994 i;ali"o Na arro, the e$retar of ?epart!e"t of Trade

a"d 3"dustr represe"ti"g the o er"!e"t of the epu%li$ of the Philippi"es, sig"ed the

:i"al A$t B!%od i"g the results of the Hrugua ou"d of ultilateral Negotiatio"s. Agree!e"ts to see@ appro al.-" ?e$e!%er 14, 1994, the Phillipi"e e"ate adopted esolutio" No. 97 to ratif

the T- agree!e"t.This is a petitio" see@i"g to "ullif the ratifi$atio" of the orld Trade -rga"i;atio"

= T-> Agree!e"t.The T- ope"s a$$ess to foreig" !ar@ets, espe$iall its !a or tradi"g part"ers,

through the redu$tio" of tariffs o" its exports, parti$ularl agri$ultural a"d i"dustrial

produ$ts. Thus, pro ides "e opportu"ities for the ser i$e se$tor $ost a"d u"$ertai"t

asso$iated ith exporti"g a"d !ore i" est!e"t i" the $ou"tr . These are the predi$ted

%e"efits as refle$ted i" the agree!e"t a"d as ie ed % the sig"ator e"ators, a 6free

!ar@et espoused % T-.Petitio"ers &uestio" the $o"$urre"$e of the respo"de"ts a$ti"g i" their $apa$ities

as e"ators % sig"i"g the said agree!e"t a"dthe $o"stitutio"alit of the T-

agree!e"t as it derogates fro! the po er to tax, hi$h is lodged i" the Co"gress a"d

iolates e$ 19, Arti$le 33, pro idi"g for the de elop!e"t of a self relia"t a"d

i"depe"de"t "atio"al e$o"o! , a"d e$tio"s 10 a"d 12, Arti$le 33, pro idi"g for the

6:ilipi"o first poli$ .

Iss)es: hether or "ot the pro isio"s of the T- agree!e"t a"d its three a""exes

$o"tra e"e se$. 19, arti$le 33, a"d se$s. 10 a"d 12, arti$le 33, of the Philippi"e

Co"stitutio".

R)ling:< its er title, Arti$le 33 of the Co"stitutio" is a 6de$laratio" of pri"$iples a"d

state poli$ies. These pri"$iples i" Arti$le 33 are "ot i"te"ded to %e self*exe$uti"g

pri"$iples read for e"for$e!e"t through the $ourts. The are used % the udi$iar as

aids or as guides i" the exer$ise of its po er of udi$ial re ie , a"d % the legislature i"

its e"a$t!e"t of la s. As held i" the leadi"g $ase of 0ilos a an, Incorporated vs.

/orato, the pri"$iples a"d state poli$ies e"u!erated i" Arti$le 33 a"d so!e se$tio"s of

Arti$le 33 are "ot 6self*exe$uti"g pro isio"s, the disregard of hi$h $a" gi e rise to a

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$ause of a$tio" i" the $ourts. The do "ot e!%od udi$iall e"for$ea%le $o"stitutio"al

rights %ut guideli"es for legislatio".

"&. A!$ TRA!SP#RTATI#! #FFICE T# , et al. vs. CITH #F =UTUA!,

represente/ in this ase 4- $e'o rito $. Pla6a II, Cit- Ma-or.. . No. 1+1512, Da"uar 20, 2000

FACTS:espo"de"t Cit of Taxes, fees or $harges for the registratio" of !otor ehi$les a"d for the

issua"$e of all @i"ds of li$e"ses or per!its for the dri i"g thereof, ex ept

tri - les.The Cit of

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register all !otor ehi$les a"d to issue to &ualified perso"s of li$e"ses to dri e su$h

ehi$les. The TC of

i"disti"$ti el ould result i" the repeal to that exte"t of T-Ks regulator po er hi$h

e ide"tl has "ot %ee" i"te"ded.

"2. RUFI!# R. TA! vs. RAM#! R. $E R#SARI#, R., as SECRETARH #F

FI!A!CE #SE U. #!G, as C#MMISSI#!ER #F I!TER!A RE%E!UE,. . No. 109289, -$to%er +, 1994

FACTS:These t o $o"solidated spe$ial $i il a$tio"s for prohi%itio" $halle"ge, i" . . No.

109289, the $o"stitutio"alit of epu%li$ A$t No. 749#, also $o!!o"l @"o " as the

i!plified Net 3"$o!e Taxatio"" $he!e =6 N3T >, a!e"di"g $ertai" pro isio"s of the

Natio"al 3"ter"al e e"ue egulatio"s No. 29+, pro!ulgated % pu%li$ respo"de"tspursua"t to said la .

Petitio"er i"ti!ates that epu%li$ A$t No. 749# dese$rates the $o"stitutio"al

re&uire!e"t that taxatio" 6shall %e u"ifor! a"d e&uita%le i" that the la ould "o

atte!pt to tax si"gle proprietorships a"d professio"als differe"tl fro! the !a""er it

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i!poses the tax o" $orporatio"s a"d part"erships. Petitio"ers $lai! to %e taxpa ers

ad ersel affe$ted % the $o"ti"ued i!ple!e"tatio" of the a!e"dator legislatio".

ISSUE:?oes epu%li$ A$t No. 749# iolate the Co"stitutio" for i!posi"g taxes that are "ot

u"ifor! a"d e&uita%le/

RU I!G:The Petitio" is dis!issed. H"ifor!it of taxatio", li@e the @i"dred $o"$ept of e&ual

prote$tio", !erel re&uires that all su% e$ts or o% e$ts of taxatio", si!ilarl situated, are

to %e treated ali@e %oth i" pri ileges a"d lia%ilities =Dua" u"a u%di isio" s.

ar!ie"to, 91 Phil. +71>. H"ifor!it does "ot forfe"d $lassifi$atio" as lo"g as =1> the

sta"dards that are used therefor are su%sta"tial a"d "ot ar%itrar , =2> the $ategori;atio"

is ger!a"e to a$hie e the legislati e purpose, =+> the la applies, all thi"gs %ei"g e&ual,to %oth prese"t a"d future $o"ditio"s, a"d =4> the $lassifi$atio" applies e&uall ell to all

those %elo"gi"g to the sa!e $lass =Pepsi Cola s. Cit of

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uild of Phil. De ellers &uestio"s the $o"stitutio"alit of $ertai" pro isio"s of the

N3 C a"d Tariff a"d Custo!s Code of the Philippi"es. 3t is their $o"te"tio" that prese"t

Tariff a"d tax stru$ture i"$reases !a"ufa$turi"g $osts a"d re"der lo$al e elr

!a"ufa$turers u"$o!petiti e agai"st other $ou"tries., i" support of their positio", the

su%!itted hat the purported to %e a" exhausti e stud of the tax rates o" e elr

pre aili"g i" other Asia" $ou"tries, i" $o!pariso" to tax rates le ied i" the $ou"tr .Dudge a"tos of TC Pasig, ruled that the la s i" &uestio" are $o"fis$ator a"d

oppressi e a"d de$lared the! 3N-PB AT3(B a"d 3TE-H :- CB AN? B::BCT

i"sofar as petitio"ers are $o"$er"ed.Petitio"er C3 assailed de$isio" re"dered % respo"de"t udge $o"te"di"g that

the latter has "o authorit to pass udg!e"t upo" the taxatio" poli$ of the go er"!e"t.

Petitio"ers also i!pug" the de$isio" % asserti"g that there as "o sho i"g that the tax

la s o" e elr are $o"fis$ator .

ISSUE: hether or "ot the egio"al Trial Court has authorit to pass udg!e"t upo"

taxatio" poli$ of the go er"!e"t.

RU I!G:The poli$ of the $ourts is to a oid ruli"g o" $o"stitutio"al &uestio"s a"d to

presu!e that the a$ts of the politi$al depart!e"ts are alid i" the a%se"$e of a $lear

a"d u"!ista@a%le sho i"g to the $o"trar .This is "ot to sa that TC has "o po er hatsoe er to de$lare a la

u"$o"stitutio"al.

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"5. Ma e/a vs. ER=, 192 C A +#5 a"d 199 C A 454

Fa ts: -" 10 epte!%er 1990, Caltex =Philippi"es>, 3"$., Pilipi"as hell

Petroleu! Corporatio", a"d Petro" Corporatio" proferred separate appli$atio"s ith

the B"erg egulator for the

purpose of !i"i!i;i"g fre&ue"t pri$e $ha"ges %rought a%out % ex$ha"ge rate

ad ust!e"ts a"d)or $ha"ges i" orld !ar@et pri$es of $rude oil a"d i!ported petroleu!

produ$ts. xxx

B ide"tl , authorities ha e %ee" u"a%le to $olle$t e"ough taxes "e$essar to

reple"ish the -P : as pro ided % Preside"tial ?e$ree No. 195#, a"d he"$e, there as

"o a aila%le alter"ati e %ut to hi@e existi"g pri$es.

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The -P :, as the Court held i" the afore$ited CACP $ases, !ust "ot %e

u"derstood to %e a fu"di"g desig"ed to guara"tee oil fir!sK profits although as a

su%sid , or a trust a$$ou"t, the Court has "o dou%t that oil fir!s !a@e !o"e fro! it. As

e held there, ho e er, the -P : as esta%lished pre$isel to prote$t the $o"su!i"g

pu%li$ fro! the errati$ !o e!e"t of oil pri$es a"d to pre$lude oil $o!pa"ies fro! ta@i"g

ad a"tage of flu$tuatio"s o$$urri"g e er so ofte". As a %uffer !e$ha"is!, it sta%ili;es

do!esti$ pri$es % %ri"gi"g a%out a u"ifor! rate rather tha" lea i"g pri$i"g to the

$apri$es of the !ar@et.3" all li@elihood, therefore, a" oil hi@e ould ha e pro%a%l %ee" i!!i"e"t, ith or

ithout trou%le i" the ulf, although trou%le ould ha e pro%a%l aggra ated it. "ad

71&8 Ma e/a vs. Ma araig, . . No. 88291 a +1, 1991

As to the the prin iple o( nonB/elegation o( taxation po>er:B.-. No. 9+ is $o!plete i" itself a"d $o"stitutes a valid delegation of legislative

power to the FI+) a"d as a%o e dis$ussed, the tax exe!ptio" pri ilege that as

restored to NPC % :3 < esolutio" No. 17*87 of Du"e 1987 i"$ludes exe!ptio" fro!

i"dire$t taxes a"d duties o" petroleu! produ$ts used i" its operatio" hi$h as issued

pursua"t thereto, as it as dul appro ed % the Preside"t as re&uired % said

exe$uti e order through the respo"de"t Bxe$uti e e$retar .oreo er, u"der e$tio" +, Arti$le (333 of the Tra"sitor Pro isio"s of the 1987

Co"stitutio", it is pro ided that All existi"g la s, de$rees, exe$uti e orders, pro$la!atio", letters of

i"stru$tio"s, a"d other exe$uti e issua"$es "ot i"$o"siste"t ith this

$o"stitutio" shall re!ai" operati e u"til a!e"ded, repealed or re o@ed.

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"9. =as o vs. PAGC#R, . . No. 91#49, a 14, 1991

Fa ts:-" Dul 11, 198+, PA C- as $reated u"der P.?. 18#9 to e"a%le the

o er"!e"t to regulate a"d $e"trali;e all ga!es of $ha"$e authori;ed % existi"g

fra"$hise or per!itted % la . P.?. 18#9 $o"tai"ed a pro isio" = e$tio" 1+ par. =2>>

hi$h exe!pts PA C- , fro! pa i"g a" Itax of a" @i"d or for!, i"$o!e or

other ise, as ell as fees, $harges or le ies of hate er "ature, hether Natio"al or

o$al.I

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P.?. 18#9 is $o"stitutio"al. The $o"te"tio" of the petitio"ers is ithout !erit for

the follo i"g reaso"sP.?. 18#9 as e"a$ted pursua"t to the poli$ of the go er"!e"t to Iregulate a"d

$e"trali;e thru a" appropriate i"stitutio" all ga!es of $ha"$e authori;ed % existi"g

fra"$hise or per!itted % la I =1st hereas $lause, P? 18#9>. As as su%se&ue"tlpro ed, regulati"g a"d $e"trali;i"g ga!%li"g operatio"s i" o"e $orporate e"tit O the

PA C- , as %e"efi$ial "ot ust to the o er"!e"t %ut to so$iet i" ge"eral. 3t is a

relia%le sour$e of !u$h "eeded re e"ue for the $ash strapped o er"!e"t. 3t pro ided

fu"ds for so$ial i!pa$t pro e$ts a"d su% e$ted ga!%li"g to I$lose s$ruti" , regulatio",

super isio" a"d $o"trol of the o er"!e"tI =4th hereas Clause, P? 18#9>. ith the

$reatio" of PA C- a"d the dire$t i"ter e"tio" of the o er"!e"t, the e il pra$ti$es

a"d $orruptio"s that go ith ga!%li"g ill %e !i"i!i;ed if "ot totall eradi$ated. Pu%li$elfare, the", lies at the %otto! of the e"a$t!e"t of P? 189#.

" . #+A$A vs. C#MMISSI#!ER, 120 C A ++7

Fa ts: Petitio"er o;ada $lai!s that he is a taxpa er a"d a %o"afide ele$tor of

Ce%u Cit a"d a tra"sie"t oter of Vue;o" Cit , etro a"ila, ho desires to ru" for the

positio" i" the

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o " a"d i" %ehalf of all other :ilipi"os si"$e the su% e$t !atters are of profou"d a"d

ge"eral i"terest. IThe respo"de"t C- B BC, represe"ted % $ou"sel, opposes the petitio"

allegi"g, su%sta"tiall , that 1> petitio"ers la$@ sta"di"g to file the i"sta"t petitio" for the

are "ot the proper parties to i"stitute the a$tio"J 2> this Court has "o urisdi$tio" toe"tertai" this petitio"J a"d +> e$tio" 5=2>, Arti$le (333 of the 197+ Co"stitutio" does "ot

appl to the 3"teri!

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a"ts to %e a $a"didate %ut !a@es i"dis$ri!i"ate de!a"d that spe$ial ele$tio" %e

$alled throughout the $ou"tr .

71&8 Ma e/a vs. Ma araig, . . No. 88291 a +1, 1991

As to the issue o" the i"stitutio" of a 6Taxpa er s uit

3" resol i"g the third issue, i" the petitio" it is alleged that petitio"er is Ii"stituti"g

this suit i" his $apa$it as a taxpa er a"d a dul *ele$ted e"ator of the Philippi"es.I

Pu%li$ respo"de"t argues that petitio"er !ust sho he has sustai"ed dire$t i" ur as a

result of the a$tio" a"d that it is "ot suffi$ie"t for hi! to ha e a !ere ge"eral i"terest

$o!!o" to all !e!%ers of the pu%li$. The Court ho e er agrees ith the petitio"er that as a taxpa er he !a file the

i"sta"t petitio" follo i"g the ruli"g i" Lozada he" it i" ol es illegal expe"diture of

pu%li$ !o"e . The petitio" &uestio"s the legalit of the tax refu"d to NPC % a of tax

$redit $ertifi$ates a"d the use of said assig"ed tax $redits % respo"de"t oil $o!pa"ies

to pa for their tax a"d dut lia%ilities to the

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";. C*A%E+ vs. PRESI$E!TIA C#MMISSI#! #! G##$ G#%ER!ME!T 7PCGG8,. . No. 1+071#, a 19, 1999

Fa ts:

o a"ts a. 3!elda ar$os* a"oto$, :erdi"a"d . ar$os 33 a"d 3re"e ar$os*

Ara"eta allege that the are parties a"d sig"atories to the e"eral a"d upple!e"tal

Agree!e"ts dated ?e$e!%er 28, 199+, hi$h this Court, i" its ?e$isio" pro!ulgated o"

?e$e!%er 9, 1998, de$lared INH AN? (-3? for %ei"g $o"trar to la a"d the

Co"stitutio".I As su$h, the $lai! to Iha e a legal i"terest i" the !atter i" litigatio", or i"

the su$$ess of either of the parties or a" i"terest agai"st %oth as to arra"t their

i"ter e"tio".I The add that their ex$lusio" fro! the i"sta"t $ase resulted i" a de"ial of

their $o"stitutio"al rights to due pro$ess a"d to e&ual prote$tio" of the la s. The also

raise the Ipri"$iple of hierar$hi$al ad!i"istratio" of usti$eI to i!pug" the CourtKs

$og"i;a"$e of petitio"erKs dire$t a$tio" %efore it.

Iss)e: hether or "ot o a"ts a. 3!elda ar$os* a"oto$, :erdi"a"d . ar$os 33

a"d 3re"e ar$os*Ara"eta ha e a legal i"terest i" the !atter i" litigatio".

RU I!G:The assailed ?e$isio" has %e$o!e fi"al a"d exe$utor J the origi"al parties ha e

"ot filed a" !otio" for re$o"sideratio", a"d the period for doi"g so has lo"g lapsed.

3"deed, the !o a"ts are "o legall %arred fro! see@i"g lea e to parti$ipate i" this

pro$eedi"g.

o a"ts $lai! that their ex$lusio" fro! the pro$eedi"g regardi"g the Agree!e"tsto hi$h the ere parties a"d sig"atories as a de"ial of Itheir propert right to

$o"tra$t ithout due pro$ess of la .Ie rule that the !o a"ts are !erel i"$ide"tal, "ot i"dispe"sa%le, parties to the

i"sta"t $ase.

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their supposed properties, the $lai! that their i"terests are affe$ted % the petitio".

Eo e er, as exhausti el dis$ussed i" the assailed ?e$isio", the Agree!e"ts

u"de"ia%l $o"tai" ter!s a" $o"ditio" that are $learl $o"trar to the Co"stitutio" a"d

the la s a"d are "ot su% e$t to $o!pro!ise. u$h ter!s a"d $o"ditio"s $a""ot %e

gra"ted % the PC to a" o"e, "ot ust to !o a"ts. No. 4+,

Preside"t Doseph Bstrada $reated the Philippi"e Co!!issio" o" Co"stitutio"al efor!

=PCC >, i" order to stud a"d re$o!!e"d proposed a!e"d!e"ts a"d)or re isio"s to

the 1987 Co"stitutio", a"d the !a""er of i!ple!e"ti"g the sa!e. H"der e$tio" 7 of

B- 4+, the a!ou"t of P+,000,000 is appropriated for its operatio"al expe"ses to %e

sour$ed fro! the fu"ds of the -ffi$e of the Preside"t. Petitio"er a!o" A. o";ales, i"

his $apa$it as a taxpa er a"d a $iti;e", assailed the $o"stitutio"alit of the $reatio" of

PCC a"d of the positio"s of preside"tial $o"sulta"ts, ad isers a"d assista"ts.

Petitio"er as@ed the $ourt to e" oi" the PCC a"d the preside"tial $o"sulta"ts, ad isers

a"d assista"ts fro! a$ti"g as su$h. Petitio"er also sought to e" oi" the Co!!issio" o"

Audit =C-A> fro! passi"g i" audit expe"ditures for the PCC a"d the preside"tial

$o"sulta"ts, ad isers a"d assista"ts. Petitio"er a"$hored his petitio" o" t o grou"ds =1>

he $o"te"ded that PCC is a pu%li$ offi$e hi$h o"l the legislature $a" $reate % a

of la Ja"d =2> he asserted that % $reati"g the PCC , the Preside"t is i"ter e"i"g i" a

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pro$ess fro! hi$h he is totall ex$luded % the Co"stitutio", hi$h is the a!e"d!e"t

of the fu"da!e"tal $harter.

Iss)e hether petitio"er has a legal sta"di"g to &uestio" the $o"stitutio"alit of B- 4+

i" his $apa$it as a $iti;e" a"d as a taxpa er.R)ling

N-.The Court ruled that petitio"er failed to esta%lish his locus standi so as to

e"a%le hi! to see@ udi$ial redress as a $iti;e" a"d as a taxpa er. A $iti;e" a$&uires sta"di"g o"l if he $a" esta%lish that he has suffered so!e

a$tual or threate"ed i" ur as a result of the allegedl illegal $o"du$t of the go er"!e"t.

The i" ur !ust %e fairl tra$ea%le to the $halle"ged a$tio" a"d is li@el to %e redressed

% a fa ora%le a$tio". 3" the $ase at %ar, petitio"er has "ot sho " that he has sustai"ed

or is i" da"ger of sustai"i"g a" perso"al i" ur attri%uta%le to the $reatio" of the PCC .Petitio"er has sustai"ed "o dire$t, or e e" i"dire$t, i" ur . -"l Co"gress, "ot petitio"er,

$a" $lai! a" i" ur i" this $ase si"$e, si"$e a$$ordi"g to the latter, the Preside"t has

e"$roa$hed upo" the legislati e po er to $reate a pu%li$ offi$e a"d to propose

a!e"d!e"ts to the Charter % for!i"g the PCC . A taxpa er is dee!ed to ha e sta"di"g to raise a $o"stitutio"al issue he" it is sho "

that pu%li$ fu"ds ha e %ee" dis%ursed i" alleged $o"tra e"tio" of the la or the

Co"stitutio". A taxpa er s a$tio" is properl %rought o"l he" there is a" exer$ise %

Co"gress of its taxi"g or spe"di"g po er. 3" the i"sta"t $ase, it is appare"t that there is

"o exer$ise % Co"gress of its taxi"g or spe"di"g po er. The appropriatio" of

P+,000.000 for the PCC ere authori;ed % the Preside"t, "ot % Co"gress. 3" fa$t,

there as "o appropriatio" at all %e$ause i" its stri$t se"se, appropriatio" has %ee"

defi"ed as "othi"g !ore tha" the legislati e authori;atio" pres$ri%ed % the Co"stitutio"

that !o"e !a %e paid out of the Treasur , hile appropriatio" !ade % la refers to

the a$t of the legislature setti"g apart or assig"i"g to a parti$ular use a $ertai" su! to

%e used i" the pa !e"t of de%ts or dues fro! the tate to its $reditors.The fu"ds usedfor the PCC ere ta@e" fro! fu"ds i"te"ded for the -ffi$e of the Preside"t, i" the

exer$ise of the Chief Bxe$uti e s po er to tra"sfer fu"ds pursua"t to e$tio" 25 =5> of

Arti$le (3 of the Co"stitutio". hile the $ourt retai"s the po er to de$ide hether or "ot

it ill allo a taxpa er s suit, petitio"er failed to sho that he is a real part i" i"terest U

that he sta"ds to %e %e"efited or i" ured % the udg!e"t or that he is e"titled to the

a ails of the suit.

&1. =AHA! vs. Exe )tive Se retar-, . . No. 1+8570, -$to%er 10, 2000

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Fa ts: After !u$h "egotiatio" ith the respe$ti e represe"tati es of %oth the Philippi"es

a"d the H"ited tates of A!eri$a =H > that started o" Dul 18, 1997, the" Preside"t

:idel (. a!os appro ed said agree!e"t, hi$h as respe$ti el sig"ed %

?epart!e"t of :oreig" Affairs =?:A> e$retar ?o!i"go ia;o" a"d H A!%assador

Tho!as Eu%%ard o" :e%ruar 10, 1998.-" -$to%er 5, 1998, the" Preside"t Doseph B. Bstrada, through respo"de"t

e$retar of :oreig" Affairs, ratified the (:A.The (:A, for hi$h e"ate $o"$urre"$e as sought a"d re$ei ed o" a 27,

1999. -" Du"e 1, 1999, the (:A offi$iall e"tered i"to for$e after a" Bx$ha"ge of Notes

%et ee" respo"de"t e$retar ia;o" a"d H A!%assador Eu%%ard.The (:A s Arti$les $o"stitutio"alit ere $halle"ged o" se eral grou"ds.

egardi"g duties, taxes a"d other si!ilar $harges, the follo i"g Arti$le pro ides

6Arti$le (333!portatio" a"d Bxportatio"61. H"ited tates o er"!e"t e&uip!e"t, !aterials, supplies, a"d other

propert i!ported i"to or a$&uired i" the Philippi"es % or o" %ehalf of the

H"ited tates ar!ed for$es i" $o""e$tio" ith a$ti ities to hi$h this

agree!e"t applies, shall %e free of all Philippi"e duties, taxes a"d other

si!ilar $harges. xxx62. easo"a%le &ua"tities of perso"al %aggage, perso"al effe$ts, a"d other

propert for the perso"al use of H"ited tates perso""el !a %e i!ported

i"to a"d used i" the Philippi"es free of all duties, taxes a"d other si!ilar

$harges duri"g the period of their te!porar sta i" the Philippi"es. xxx

Iss)e?o the petitio"ers ha e legal ta"di"g as $o"$er"ed $iti;e"s, taxpa ers or

legislators to &uestio" the $o"stitutio"alit of the (:A/

R)ling:No.

A part %ri"gi"g a suit $halle"gi"g the $o"stitutio"alit of a la , a$t, or statute

!ust sho 6"ot o"l that the la is i" alid, %ut also that he has sustai"ed or i" is i"

i!!ediate, or i!!i"e"t da"ger of sustai"i"g so!e dire$t i" ur as a result of its

e"for$e!e"t, a"d "ot !erel that he suffers there% i" so!e i"defi"ite a . Ee !ust

sho that he has %ee", or is a%out to %e, de"ied so!e right or pri ilege to hi$h he is

la full e"titled, or that he is a%out to %e su% e$ted to so!e %urde"s or pe"alties %

reaso" of the statute $o!plai"ed of.Petitio"ers failed to sho , to the satisfa$tio" of this Court, that the ha e

sustai"ed, or are i" da"ger of sustai"i"g a" dire$t i" ur as a result of the e"for$e!e"tof the (:A. As taxpa ers, petitio"ers ha e "ot esta%lished that the (:A i" ol es the

exer$ise % Co"gress of its taxi"g or spe"di"g po ers. A taxpa er s suit refers to a

$ase here the a$t $o!plai"ed of dire$tl i" ol es the illegal dis%urse!e"t of pu%li$

fu"ds deri ed fro! taxatio".

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Clearl , i"as!u$h as "o pu%li$ fu"ds raised % taxatio" are i" ol ed i" this $ase,

a"d i" the a%se"$e of a" allegatio" % petitio"ers that pu%li$ fu"ds are %ei"g !isspe"t

or illegall expe"ded, petitio"ers, as taxpa ers, ha e "o legal sta"di"g to assail the

legalit of the (:A.i!ilarl , the petitio"er*legislators =Ta"ada, Arro o, et$.> do "ot possess the

re&uisite lo$us sta"di to sue. 3" the a%se"$e of a $lear sho i"g of a" dire$t i" ur to

their perso" or to the i"stitutio" to hi$h the %elo"g, the $a""ot sue. The 3"tegrated

i"$ludes the

right to !a"age a"d operate ai*alai. The Philippi"e A!use!e"t a"d a!i"g

Corporatio" is a go er"!e"t*o "ed a"d $o"trolled $orporatio" orga"i;ed a"d existi"g

u"der Preside"tial ?e$ree No. 18#9 hi$h as e"a$ted o" Dul 11, 198+. Pursua"t to

e$tio"s 1 a"d 10 of P.?. No. 18#9, respo"de"t PA C- re&uested for legal ad i$e

fro! the e$retar of Dusti$e as to hether or "ot it is authori;ed % its Charter to

operate a"d !a"age ai*alai fro"to"s i" the $ou"tr . 3" its -pi"io" No. #7, eries of

199# dated Dul 15, 199#, the Se retar- o( )sti e opi"ed that 6the authorit of

PA C- to operate a"d !ai"tai" ga!es of $ha"$e or ga!%li"g exte"ds to ai*alai

hi$h is a for! of sport or ga'e pla-e/ (or 4ets a"d that the Charter of PA C-

a!ou"ts to a legislati e fra"$hise for the purpose.Petitio"ers aoul

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petitio"ers $o"te"d. The $o"te"tio" $o!!a"ds our $o"$urre"$e for it is "o settled

that a !e!%er of the Eouse of eprese"tati es has sta"di"g to !ai"tai" i" iolate the

prerogati es, po ers a"d pri ileges ested % the Co"stitutio" i" his offi$e. As

pres$ie"tl stressed i" the $ase of 0ilos a an, Inc. , i;

6 e fi"d the i"sta"t petitio" to %e of tra"s$e"de"tal i!porta"$e to the pu%li$. The

issues it raised are of para!ou"t pu%li$ i"terest a"d of a $ategor e e" higher tha"

those i" ol ed i" !a" of the afore$ited $ases. The ra!ifi$atio"s of su$h issues

i!!easura%l affe$t the so$ial, e$o"o!i$, a"d !oral ell*%ei"g of the people e e" i"

the re!otest %ara"ga s of the $ou"tr a"d the $ou"ter*produ$ti e a"d retrogressi e

effe$ts of the e" isio"ed o"*li"e lotter s ste! are as staggeri"g as the %illio"s i" pesos

it is expe$ted to raise. The legal sta"di"g the" of the petitio"ers deser es re$og"itio" x

x x.

&;. oel G. Miran/a vs . Antonio C. Carreon et al., . . No. 14+540. April 11, 200+

Fa ts:

3" the earl part of 1988, (i$e a or A!elita Na arro, hile ser i"g as A$ti"g

a or of the Cit of a"tiago %e$ause of the suspe"sio" of a or Dose ira"da,

appoi"ted the a%o e*"a!ed respo"de"ts to arious positio"s i" the $it

go er"!e"t. Their appoi"t!e"ts ere ith per!a"e"t status a"d %ased o" the

e aluatio" !ade % the Cit Perso""el ele$tio" a"d Pro!otio" appro ed the

appoi"t!e"ts.

he" a or Dose ira"da reassu!ed his post o" ar$h 5, 1998 after his

suspe"sio", he $o"sidered the $o!positio" of the P P< irregular si"$e the !a orit

part , to hi$h he %elo"gs, as "ot properl represe"ted. Ee the" for!ed a three*!a"spe$ial perfor!a"$e audit tea! $o!posed of o%erto C.

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e aluatio", the audit tea! su%!itted to hi! a report dated Du"e 8, 1998 stati"g that the

respo"de"ts ere fou"d 6 a"ti"g i" =their> perfor!a"$e.

-" Du"e 10, 1998, or three !o"ths after a or ira"da reassu!ed his post, he

issued a" order ter!i"ati"g respo"de"ts ser i$es effe$ti e Du"e 15, 1998 %e$ause the

6perfor!ed poorl duri"g the pro%atio"ar period.

espo"de"ts appealed to the C C. -" -$to%er 19, 1998, the C C issued

esolutio" No. 982717 re ersi"g the order of a or ira"da. ea" hile, the

C- B BC dis&ualified a or Dose ira"da as a !a oralt $a"didate i" the 1998 a

ele$tio"s. Eis so" oel G. Miran/a , herei" petitio"er, su%stituted for hi! a"d as

pro$lai!ed a or of a"tiago Cit . Ee the" filed a !otio" for re$o"sideratio" of the

C C esolutio" No. 982717 =i" fa or of respo"de"ts> %ut it as de"ied i" the C C

esolutio" No. 990557 dated ar$h +, 1999.Petitio"er $o"te"ds that as a taxpa er, he has a legal i"terest i" the $ase at %ar,

he"$e, $a" la full file this petitio".

Iss)e: hether or "ot the petitio"er has legal sta"di"g to !ai"tai" the i"sta"t $ase.

R)ling:

The upre!e Court held that petitio"er, "ot %ei"g a real part i" i"terest, has "o

legal perso"alit to file this petitio".

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7118 Caltex vs. Co''ission on A)/it, . . No. 92585, a 8, 1992

As to Inherent %imitations& Purpose must be public in nature

e fi"d "o !erit i" petitio"erKs $o"te"tio" that the -P : $o"tri%utio"s are "ot for

a pu lic purpose %e$ause the go to a spe$ial fu"d of the go er"!e"t. Taxation is no

longer envisione/ as a 'eas)re 'erel- to raise reven)e to s)pport the existen e

o( the govern'ent taxes 'a- 4e levie/ >ith a reg)lator- p)rpose to provi/e

'eans (or the reha4ilitation an/ sta4ili6ation o( a threatene/ in/)str- >hi h is

a((e te/ >ith p)4li interest as to 4e >ithin the poli e po>er o( the state. There

$a" %e "o dou%t that the oil i"dustr is greatl i!%ued ith pu%li$ i"terest as it itall

affe$ts the ge"eral elfare. A" u"regulated i"$rease i" oil pri$es $ould hurt the li es of a !a orit of the people a"d $ause e$o"o!i$ $risis of u"told proportio"s. 3t ould ha e

a $hai" rea$tio" i" ter!s of, a!o"g others, de!a"ds for age i"$reases a"d up ard

spiralli"g of the $ost of %asi$ $o!!odities. The sta%ili;atio" the" of oil pri$es is of pri!e

$o"$er" hi$h the state, ia its poli$e po er, !a properl address. Also, P.?. No. 195#, as a!e"ded % B.-. No. 1+7, expli$itl pro ides that the

sour$e of -P : is taxatio". No a!ou"t of se!a"ti$al uggleries $ould di! this fa$t.

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&2. Pas )al vs. Se retar- o( P)4li or

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&3. %alentin Tio vs. %i/eogra' Reg)lator- =oar/, . . No. *75#97 Du"e 18, 1987

Fa ts: Preside"tial ?e$ree No. 1987 e"titled 6A" A$t Creati"g the (ideogra!egulator

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R)ling:

The upre!e Court fou"d "o $lear iolatio" of the Co"stitutio" hi$h ould ustif

pro"ou"$i"g P? 1987 as u"$o"stitutio"al. The petitio"ers failed to o er$o!e the

presu!ptio" of alidit hi$h atta$hes to a $halle"ged statute. The le of the +0' tax

is for a pu%li$ purpose. 3t as i!posed pri!aril to a"s er the "eed for regulati"g the

ideo i"dustr %e$ause of the ra!pa"t fil! pira$ , the flagra"t iolatio" of i"telle$tual

propert rights a"d the proliferatio" of por"ographi$ ideo tapes. hile the dire$t

%e"efi$iaries of P? 1987 is the !o ie i"dustr , the $iti;e"s are held to %e its i"dire$t

%e"efi$iaries. The tax i!posed is "ot o"l regulator %ut also a re e"ue !easure

pro!pted % the reali;atio"s that ear"i"gs of ideogra! esta%lish!e"ts of arou"d P#00

!illio" a""uall ha e "ot %ee" taxed, depri i"g the go er"!e"t of a" additio"al sour$eof re e"ue.

-" the issue that the +0' tax i!posed is harsh, oppressi e a"d $o"fis$ator , it is

%e o"d &uestio" that a tax does "ot $ease to %e alid !erel %e$ause it regulates or

e e" defi"itel deters the a$ti ities taxed. The po er to i!pose taxes is so u"li!ited i"

for$e a"d so sear$hi"g i" exte"t, that the $ourts s$ar$el e"ture to de$lare that it is

su% e$t to a" restri$tio"s hate er, ex$ept su$h as rest i" the dis$retio" of the authorit

hi$h exer$ises it. 3" i!posi"g a tax, the legislature a$ts upo" its $o"stitue"ts. This is,

i" ge"eral, a suffi$ie"t se$urit agai"st erro"eous a"d oppressi e taxatio".

&5. Gaston vs. Rep)4li Planter , 158 C A #2#

Fa ts: Petitio"ers are sugar produ$ers a"d pla"ters a"d !illers filed a

AN?A H to i!ple!e"t the pri ati;atio" of epu%li$ Pla"ters

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The shares are $urre"tl held % Philsu$o! ) ugar egulator Ad!i".

The olge" $ou"tered that the sta%ili;atio" fees are $o"sidered go er"!e"t

fu"ds a"d that the tra"sfer of shares to fro! Philsu$o! to the sugar produ$ers ould %e

irregular.

Iss)es hat is the "ature of the P1.00 sta%ili;atio" fees $olle$ted fro! sugar

produ$ers/ Are the fu"ds held i" trust for the!, or are the pu%li$ fu"ds/ Are the

shares i" the %a"@ =paid usi"g these fees> o "ed % the go er"!e"t Philsu$o! or

pri atel % the differe"t sugar pla"ters fro! ho! su$h fees ere $olle$ted/

RU I!G: PH< 3C :HN? . hile it is true that the $olle$ted fees ere used

to %u shares i" P

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7;8 Co o(e/ vs. Rep)4li , Nos. 177857*58, Da"uar 24, 2012

P)rpose ')st 4e P)4li in !at)reTaxes are i!posed o"l for a pu%li$ purpose. The :u"d i" parti$ular as $reated

for the prote$tio" of the e"tire $o$o"ut i"dustr , a"d !ore i!porta"tl for the $o"su!i"g

pu%li$. 3t as $reated "ot espe$iall for the $o$o"ut far!ers %ut for the e"tire $o$o"ut

i"dustr , al%eit the i!pro e!e"t of the i"dustr ould dou%tless redou"d to the %e"efit

of the far!ers.Thus, the C $a""ot allo the $o" ersio" of spe$ial fu"ds i"to a pri ate fu"d for

the %e"efit of pri ate i"di iduals. H"der Art. (3, e$tio" 29 =+>, 6All !o"e $olle$ted o"

a" tax le ied for a spe$ial purpose shall %e treated as a spe$ial fu"d a"d paid out for

su$h purpose o"l . 3f the purpose for hi$h a spe$ial fu"d as $reated has %ee"

fulfilled or a%a"do"ed, the %ala"$e, if a" , shall %e tra"sferred to the ge"eral fu"ds of

the o er"!e"t. The C ruled that the fa$t that the $o$o"ut le fu"ds ere $olle$ted fro! the

perso"s or e"tities i" the $o$o"ut i"dustr , a!o"g others, does "ot a"d $a""ot e"title

the! to %e %e"efi$ial o "ers of the su% e$t fu"ds U or !ore %lu"tl , o "ers thereof i"

their pri ate $apa$it . aid pri ate i"di iduals i.e. the far!ers $a""ot o " the HCP pro ides that lo$al go er"!e"ts shall ha e the po er to i!pose taxes a"d fees %ut this is su% e$t to guideli"es a"d li!itatio"s as the

Co"gress !a pro ide.

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&9. A!$ TRA!SP#RTATI#! #FFICE T# vs. CITH #F =UTUA!, represente/ in

this ase 4- $e'o rito $. Pla6a II,Cit- Ma-or, . . No. 1+1512, Da"uar 20, 2000.

Fa ts: espo"de"t Cit of Taxes, fees or $harges for the registratio" of !otor ehi$les a"d for the

issua"$e of all @i"ds of li$e"ses or per!its for the dri i"g thereof, ex ept

tri - les.The Cit of

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ehi$les. The TC of =+>=(3> of the o$al

o er"!e"t Code to Hs is the po er to regulate their operatio" a"d to gra"t

fra"$hises for the operatio" thereof. The ex$lusio"ar $lause $o"tai"ed i" the tax

pro isio"s of e$tio" 1++=1> of the o$al o er"!e"t Code !ust "ot %e held to ha e

had the effe$t of ithdra i"g the express po er of T- to $ause the registratio" of all

!otor ehi$les a"d the issua"$e of li$e"ses for the