This document is a 1968 court case summary regarding tax assessments on Roxas y Cia, a partnership that sold agricultural lands. The key points are:
1. Roxas y Cia inherited large agricultural lands and agreed to sell most of it to the government for redistribution to tenants, but the government lacked funds. Roxas y Cia instead sold the lands directly to tenants in installments.
2. The Commissioner of Internal Revenue assessed Roxas y Cia and its partners for real estate dealer taxes and deficiency income taxes.
3. The court ruled that while Roxas y Cia engaged in the land sales, it did so in response to government policy and could not be
Take Two The Expanding Scope Of The Rescission Doctrineibristol
This article discusses the expanding scope of the IRS's rescission doctrine, which allows parties to unwind transactions and return to their pre-transaction positions if certain conditions are met. Specifically, it summarizes a recent private letter ruling that permitted a foreign parent company and its US subsidiary to rescind a debt-for-equity exchange and related transactions, and enter into new transactions to achieve their desired tax treatment, as long as they returned to their pre-transaction positions by year's end. The IRS seems willing to apply the rescission doctrine liberally and allow follow-up transactions if the parties are fully restored to their original positions in the same tax year.
The Supreme Court of the Philippines ruled on a case involving the determination of just compensation for land acquired by the government under Presidential Decree 27 (PD 27) but where payment was not made until after Republic Act 6657 took effect. The Court affirmed the Court of Appeals decision that RA 6657 should be used to calculate just compensation in these circumstances, as PD 27 only applies insofar as there are gaps in RA 6657. The Court also upheld the imposition of 6% annual interest on the unpaid compensation from the date of taking until full payment, as this did not constitute double imposition of interest rates. The case involved land belonging to the heirs of Gloria and Maximo Puyat that was appropriated for agrarian reform
This document summarizes a court case regarding a dispute over land ownership. The case involved land that was originally owned by Juliana Melliza and was subsequently subdivided and portions were sold or donated to other parties. There was disagreement over whether a 1932 document transferring land from Melliza to the municipality of Iloilo included Lot 1214-B. The trial court found that the 1932 document did include Lot 1214-B in the transfer. The plaintiff, who claimed ownership of Lot 1214-B, appealed the trial court's decision. The appellate court was tasked with interpreting the 1932 contract document to determine what land was intended to be transferred.
This document is a thesis that examines traffic flow and performance in the Ebene Cybercity area of Mauritius. It includes 6 chapters that discuss: background on transportation issues in Mauritius; a literature review on relevant traffic studies; the methodology used for data collection including traffic counts, speed surveys, and occupancy surveys; an analysis of the data to determine level of service (LOS); findings and conclusions from the study; and suggestions for further research. Data was collected on two road segments and one roundabout during morning peak hours over multiple days. The analysis found that vehicle demand had increased 12% from 2007-2010 at the roundabout, approximately 53% of vehicles had a single occupant, and LOS varied throughout the
The document discusses several petitions challenging the constitutionality of the Expanded Value-Added Tax Law. It summarizes the arguments made by petitioners that the Senate did not have the power to propose amendments to revenue bills and must originate from the House of Representatives. The Supreme Court rejects these arguments, finding that the Senate has appropriately exercised its constitutional power to propose amendments to revenue bills in this case and in previous cases. It provides examples from previous Congresses where revenue laws were passed through the consolidation of House and Senate bills.
Take Two The Expanding Scope Of The Rescission Doctrineibristol
This article discusses the expanding scope of the IRS's rescission doctrine, which allows parties to unwind transactions and return to their pre-transaction positions if certain conditions are met. Specifically, it summarizes a recent private letter ruling that permitted a foreign parent company and its US subsidiary to rescind a debt-for-equity exchange and related transactions, and enter into new transactions to achieve their desired tax treatment, as long as they returned to their pre-transaction positions by year's end. The IRS seems willing to apply the rescission doctrine liberally and allow follow-up transactions if the parties are fully restored to their original positions in the same tax year.
The Supreme Court of the Philippines ruled on a case involving the determination of just compensation for land acquired by the government under Presidential Decree 27 (PD 27) but where payment was not made until after Republic Act 6657 took effect. The Court affirmed the Court of Appeals decision that RA 6657 should be used to calculate just compensation in these circumstances, as PD 27 only applies insofar as there are gaps in RA 6657. The Court also upheld the imposition of 6% annual interest on the unpaid compensation from the date of taking until full payment, as this did not constitute double imposition of interest rates. The case involved land belonging to the heirs of Gloria and Maximo Puyat that was appropriated for agrarian reform
This document summarizes a court case regarding a dispute over land ownership. The case involved land that was originally owned by Juliana Melliza and was subsequently subdivided and portions were sold or donated to other parties. There was disagreement over whether a 1932 document transferring land from Melliza to the municipality of Iloilo included Lot 1214-B. The trial court found that the 1932 document did include Lot 1214-B in the transfer. The plaintiff, who claimed ownership of Lot 1214-B, appealed the trial court's decision. The appellate court was tasked with interpreting the 1932 contract document to determine what land was intended to be transferred.
This document is a thesis that examines traffic flow and performance in the Ebene Cybercity area of Mauritius. It includes 6 chapters that discuss: background on transportation issues in Mauritius; a literature review on relevant traffic studies; the methodology used for data collection including traffic counts, speed surveys, and occupancy surveys; an analysis of the data to determine level of service (LOS); findings and conclusions from the study; and suggestions for further research. Data was collected on two road segments and one roundabout during morning peak hours over multiple days. The analysis found that vehicle demand had increased 12% from 2007-2010 at the roundabout, approximately 53% of vehicles had a single occupant, and LOS varied throughout the
The document discusses several petitions challenging the constitutionality of the Expanded Value-Added Tax Law. It summarizes the arguments made by petitioners that the Senate did not have the power to propose amendments to revenue bills and must originate from the House of Representatives. The Supreme Court rejects these arguments, finding that the Senate has appropriately exercised its constitutional power to propose amendments to revenue bills in this case and in previous cases. It provides examples from previous Congresses where revenue laws were passed through the consolidation of House and Senate bills.
The Supreme Court of India allowed the appeal and struck down the Andhra Pradesh Scheduled Castes (Rationalisation of Reservations) Act, 2000. The Court held that the Act violated Article 14 of the Constitution by creating a sub-classification of Scheduled Castes listed in the Presidential Notification under Article 341 for the purposes of reservations. The Court noted that the Presidential Notification specifies Scheduled Castes as a homogeneous group and the state legislature cannot further classify or regroup them. The Act was also held to be constitutionally impermissible as it amounted to interfering with the Presidential Notification.
This document is a court decision regarding a dispute between Superlines Transportation Company, Inc. and ICC Leasing & Financing Corporation. Superlines took out a loan from ICC to purchase five buses but defaulted on payments. ICC sued for collection and foreclosed on the buses. The trial court ruled in favor of Superlines, but the appellate court reversed and ruled ICC was entitled to a deficiency claim. Superlines appealed, arguing the transaction was a consumer loan under the Civil Code and ICC was not entitled to further claims after foreclosure. The Supreme Court must now determine the nature of the transaction and whether ICC can claim further amounts.
The document discusses a case study about the Lander Company, a vertically integrated textile manufacturer that lacks a market orientation. It analyzes whether the company has a problem and evaluates a proposed reorganization. It then provides suggestions for introducing a market orientation philosophy, including hiring a consultant, seminars, and creating an interfunctional task force led by the president. The document also discusses pros and cons of functional vs. cross-functional organizational structures using the example of the WILO Company.
Roxas y Cia, a partnership, sold 13,500 hectares of farmland to the Philippine government for redistribution to tenant farmers. As the government lacked funds, Roxas y Cia instead sold the land directly to the farmers in installments. The CIR assessed Roxas y Cia for deficiency income taxes, treating the partnership as being in the real estate business. However, the Supreme Court ruled that the isolated land sale did not make Roxas y Cia a real estate dealer, and the gains should be treated as capital gains taxable at only 50% given the sale was in accordance with government policy.
Land Law Reform
The Land Act Of 1913 Essay
Land Law 19th Century
Easements Land Law
Land Act Mauritius
South Africa Land Reform Essay
The Law Of The Land
Land Law and Tenant
Why Study Law Essay
This document is a complaint filed by ELDA INVESTMENTS, LLC against several defendants including BLACKSAND CAPITAL ACQUISITIONS, LLC, BSC KVSC, LLC, W2007 FINANCE SUB, LLC, W2007 WKH KING'S VILLAGE TRS, LLC, BERT A KOBAYASHI JR., IAN W. MACNAUGHTON, and various Doe defendants. The complaint involves a dispute over a commercial property located in Honolulu known as the King's Village Property, which ELDA INVESTMENTS owns the leased fee interest in and various defendants have interests in as the current and former leasehold owners. The complaint alleges facts involving negotiations over the property, offers
This document summarizes a court case regarding a dispute over land titles. It discusses how the land was originally owned by Luis Palad, who left a will donating the land to a secondary school upon his widow's remarriage or death. After Palad's death, his widow remained on the land until remarrying in 1900. In 1903, collateral heirs sued for partition, and the municipality intervened claiming the land under Palad's will. The parties agreed to give some land to the municipality and leave another portion to the widow. The document analyzes whether the municipality's possession was legally considered adverse, and examines the validity of Palad's will in creating a trust for a future secondary school. It ultimately finds the will
G.R. L-26521 Villanueva et al v. City of Iloilosuperella
The City of Iloilo enacted Ordinance 11 imposing a license tax on persons operating tenement houses. Owners of tenement houses challenged the ordinance, arguing it imposed double taxation and violated the rule of uniformity. The Supreme Court upheld the ordinance, finding that the Local Autonomy Act granted cities broad taxing powers, including the power to tax tenement businesses. The tax did not constitute double taxation as it was not a real estate tax, but rather a license tax on those engaged in business. The Court also found the tax did not violate uniformity rules so long as it was imposed equally on all similar tenement businesses within the city.
Under Spanish colonial rule in the Philippines, land was owned by the Spanish crown and Catholic religious orders, not by Filipinos. Filipinos were assigned land to farm and had to pay tribute to Spanish authorities and landowners. This led to an abusive system where Filipino farmers were exploited. Under American rule, some reforms attempted to allow private land ownership but ultimately benefited American and wealthy Filipino landowners, worsening inequality. The Hukbalahap uprising in the 1930s was a result of peasant grievances over land ownership and tenancy issues. Subsequent administrations attempted land reform programs with varying success, constrained by a lack of funding and resistance from powerful landowners.
Plaintiffs, who are current and former military families residing at Marine Corp Base Hawaii, have filed a lawsuit against Ohana Military Communities and Forest City Residential Management regarding the companies' failure to disclose widespread pesticide contamination at the base. The companies were aware of testing showing contamination above EPA safety levels but did not inform residents. The complaint alleges negligence, fraud, and breach of contract claims.
This document summarizes a Philippine Supreme Court case from 1912 regarding the liability of sureties after an estate was partitioned and distributed to heirs according to law. The Court held that when an estate is legally partitioned and distributed under Sections 596 and 597 of the Code of Civil Procedure, the administrator's obligations and those of his sureties are discharged. As the estate of Mariano Ocampo was properly partitioned and distributed years prior, the administrator Doroteo Velasco and his surety Pio de la Guardia Barretto were not liable for claims against the estate that arose later.
Law Change Alert: IRS Limits Income Tax Exclusion On Capital Gains From Homes...DorothyKorszen
This document summarizes recent changes to IRS rules regarding the capital gains tax exclusion for primary residences. The new rules limit the exclusion for periods of "non-qualified use" when the home was not used as the owner's primary residence. For sales after 2008, any portion of the previous 5 years that was "non-qualified use" will not qualify for the exclusion. An example is provided where a homeowner would owe capital gains tax on 40% of the profit from selling a home that was used as a rental for 2 of the previous 5 years. Tax advisors can help homeowners understand how these new rules apply to their specific situation.
Chapter 15The Union Broken1850-1861Southern ComplaintsWi.docxketurahhazelhurst
Chapter 15
The Union Broken
1850-1861
Southern Complaints
With British and northern factories buying cotton in unprecedented quantities, southern planters prospered in the 1850s. Their operations, like those of northern commercial farmers, became more highly capitalized to keep up with the demand. But instead of machinery, white southerners invested in slaves. During the 1850s the price of prime field hands reached record levels.
Kansas
Free or slave state
The Dred Scott Decision
The owner of a Missouri slave named Dred Scott had taken him to live for several years in Illinois, a free state, and in the Wisconsin Territory, in what is now Minnesota, where slavery had been banned by the Missouri Compromise. Scott had returned to Missouri with his owner, only to sue eventually for his freedom on the grounds that his residence in a free state and a free territory had made him free. His case ultimately went to the Supreme Court. The Court ruled 7 to 2 that Scott remain a slave.
The Chief Justice ruled that African Americans could not be and never had been citizens of the United States. Instead he insisted at the time the Constitution was adopted they were regarded as beings of an inferior order.
Congress it declared had no power to ban slavery from any territory of the United States.
White southerners rejoiced at the outcome. Republicans denounced the Court. The Republicans platform declared that Congress should prohibit slavery in all territories.
Before being elected President, when accepting his party’s nomination for senator from Illinois in 1958, Abraham Lincoln was quoted a proverb from the Bible:
A house divided against itself, cannot stand.
I believe this government cannot endure, permanently, half slave and half free. I do not expect theUnion to be dissolved — I do not expect the house to fall — but I do expect it will cease to be divided.
It will become all one thing or all the other.
Either the opponents of slavery will arrest the further spread of it, and place it where the public mind shall rest in the belief that it is in the course of ultimate extinction; or its advocates will push it forward, till it shall become lawful in all the States, old as well as new — North as well as South.
Lincoln opposed allowing blacks to vote or hold political office. But he concluded there is no reason in the world why the negro is not entitled to all the natural rights enumerated in the Declaration of Independence, the right to life, liberty and the pursuit of happiness. … The negro is not my equal in many respects… certainly not in moral or intellectual endowment. But in the right to eat the bread, without the leave of anybody else, which his own hand earns…
Lincoln lost the senate race in Illinois but Republicans believed his performance during a series of debates marked his as a presidential contender for 1860.
Northerners feared that the Slave Power was conspiring to extend slavery into the free states.
A ...
The document provides an overview of Philippine economic history through issues of agrarian reform, taxation, and trade policies. It discusses how the Spanish introduced the encomienda system which exploited Filipino farmers and led to revolts. Under American rule, land ownership issues persisted and various land reform programs were implemented with limited success over many decades. Philippine taxation evolved from tributes imposed by Spain, to a poll tax and other taxes under American rule. Economic reforms in the late 20th century aimed to broaden the tax base and encourage investment.
Rule 92 discussion with original and digestedlspujurists
This document discusses guardianship proceedings and venue. It provides definitions for who may be considered an "incompetent" in need of a guardian, including those suffering from various mental or physical conditions. It outlines where guardianship proceedings can be instituted, either in the province/city where the minor or incompetent resides or where their property is located. It discusses the meaning of the word "incompetent" and provides examples. It also discusses the ability of the court to transfer venue under certain circumstances for the ward's convenience.
The Supreme Court of India allowed the appeal and struck down the Andhra Pradesh Scheduled Castes (Rationalisation of Reservations) Act, 2000. The Court held that the Act violated Article 14 of the Constitution by creating a sub-classification of Scheduled Castes listed in the Presidential Notification under Article 341 for the purposes of reservations. The Court noted that the Presidential Notification specifies Scheduled Castes as a homogeneous group and the state legislature cannot further classify or regroup them. The Act was also held to be constitutionally impermissible as it amounted to interfering with the Presidential Notification.
This document is a court decision regarding a dispute between Superlines Transportation Company, Inc. and ICC Leasing & Financing Corporation. Superlines took out a loan from ICC to purchase five buses but defaulted on payments. ICC sued for collection and foreclosed on the buses. The trial court ruled in favor of Superlines, but the appellate court reversed and ruled ICC was entitled to a deficiency claim. Superlines appealed, arguing the transaction was a consumer loan under the Civil Code and ICC was not entitled to further claims after foreclosure. The Supreme Court must now determine the nature of the transaction and whether ICC can claim further amounts.
The document discusses a case study about the Lander Company, a vertically integrated textile manufacturer that lacks a market orientation. It analyzes whether the company has a problem and evaluates a proposed reorganization. It then provides suggestions for introducing a market orientation philosophy, including hiring a consultant, seminars, and creating an interfunctional task force led by the president. The document also discusses pros and cons of functional vs. cross-functional organizational structures using the example of the WILO Company.
Roxas y Cia, a partnership, sold 13,500 hectares of farmland to the Philippine government for redistribution to tenant farmers. As the government lacked funds, Roxas y Cia instead sold the land directly to the farmers in installments. The CIR assessed Roxas y Cia for deficiency income taxes, treating the partnership as being in the real estate business. However, the Supreme Court ruled that the isolated land sale did not make Roxas y Cia a real estate dealer, and the gains should be treated as capital gains taxable at only 50% given the sale was in accordance with government policy.
Land Law Reform
The Land Act Of 1913 Essay
Land Law 19th Century
Easements Land Law
Land Act Mauritius
South Africa Land Reform Essay
The Law Of The Land
Land Law and Tenant
Why Study Law Essay
This document is a complaint filed by ELDA INVESTMENTS, LLC against several defendants including BLACKSAND CAPITAL ACQUISITIONS, LLC, BSC KVSC, LLC, W2007 FINANCE SUB, LLC, W2007 WKH KING'S VILLAGE TRS, LLC, BERT A KOBAYASHI JR., IAN W. MACNAUGHTON, and various Doe defendants. The complaint involves a dispute over a commercial property located in Honolulu known as the King's Village Property, which ELDA INVESTMENTS owns the leased fee interest in and various defendants have interests in as the current and former leasehold owners. The complaint alleges facts involving negotiations over the property, offers
This document summarizes a court case regarding a dispute over land titles. It discusses how the land was originally owned by Luis Palad, who left a will donating the land to a secondary school upon his widow's remarriage or death. After Palad's death, his widow remained on the land until remarrying in 1900. In 1903, collateral heirs sued for partition, and the municipality intervened claiming the land under Palad's will. The parties agreed to give some land to the municipality and leave another portion to the widow. The document analyzes whether the municipality's possession was legally considered adverse, and examines the validity of Palad's will in creating a trust for a future secondary school. It ultimately finds the will
G.R. L-26521 Villanueva et al v. City of Iloilosuperella
The City of Iloilo enacted Ordinance 11 imposing a license tax on persons operating tenement houses. Owners of tenement houses challenged the ordinance, arguing it imposed double taxation and violated the rule of uniformity. The Supreme Court upheld the ordinance, finding that the Local Autonomy Act granted cities broad taxing powers, including the power to tax tenement businesses. The tax did not constitute double taxation as it was not a real estate tax, but rather a license tax on those engaged in business. The Court also found the tax did not violate uniformity rules so long as it was imposed equally on all similar tenement businesses within the city.
Under Spanish colonial rule in the Philippines, land was owned by the Spanish crown and Catholic religious orders, not by Filipinos. Filipinos were assigned land to farm and had to pay tribute to Spanish authorities and landowners. This led to an abusive system where Filipino farmers were exploited. Under American rule, some reforms attempted to allow private land ownership but ultimately benefited American and wealthy Filipino landowners, worsening inequality. The Hukbalahap uprising in the 1930s was a result of peasant grievances over land ownership and tenancy issues. Subsequent administrations attempted land reform programs with varying success, constrained by a lack of funding and resistance from powerful landowners.
Plaintiffs, who are current and former military families residing at Marine Corp Base Hawaii, have filed a lawsuit against Ohana Military Communities and Forest City Residential Management regarding the companies' failure to disclose widespread pesticide contamination at the base. The companies were aware of testing showing contamination above EPA safety levels but did not inform residents. The complaint alleges negligence, fraud, and breach of contract claims.
This document summarizes a Philippine Supreme Court case from 1912 regarding the liability of sureties after an estate was partitioned and distributed to heirs according to law. The Court held that when an estate is legally partitioned and distributed under Sections 596 and 597 of the Code of Civil Procedure, the administrator's obligations and those of his sureties are discharged. As the estate of Mariano Ocampo was properly partitioned and distributed years prior, the administrator Doroteo Velasco and his surety Pio de la Guardia Barretto were not liable for claims against the estate that arose later.
Law Change Alert: IRS Limits Income Tax Exclusion On Capital Gains From Homes...DorothyKorszen
This document summarizes recent changes to IRS rules regarding the capital gains tax exclusion for primary residences. The new rules limit the exclusion for periods of "non-qualified use" when the home was not used as the owner's primary residence. For sales after 2008, any portion of the previous 5 years that was "non-qualified use" will not qualify for the exclusion. An example is provided where a homeowner would owe capital gains tax on 40% of the profit from selling a home that was used as a rental for 2 of the previous 5 years. Tax advisors can help homeowners understand how these new rules apply to their specific situation.
Chapter 15The Union Broken1850-1861Southern ComplaintsWi.docxketurahhazelhurst
Chapter 15
The Union Broken
1850-1861
Southern Complaints
With British and northern factories buying cotton in unprecedented quantities, southern planters prospered in the 1850s. Their operations, like those of northern commercial farmers, became more highly capitalized to keep up with the demand. But instead of machinery, white southerners invested in slaves. During the 1850s the price of prime field hands reached record levels.
Kansas
Free or slave state
The Dred Scott Decision
The owner of a Missouri slave named Dred Scott had taken him to live for several years in Illinois, a free state, and in the Wisconsin Territory, in what is now Minnesota, where slavery had been banned by the Missouri Compromise. Scott had returned to Missouri with his owner, only to sue eventually for his freedom on the grounds that his residence in a free state and a free territory had made him free. His case ultimately went to the Supreme Court. The Court ruled 7 to 2 that Scott remain a slave.
The Chief Justice ruled that African Americans could not be and never had been citizens of the United States. Instead he insisted at the time the Constitution was adopted they were regarded as beings of an inferior order.
Congress it declared had no power to ban slavery from any territory of the United States.
White southerners rejoiced at the outcome. Republicans denounced the Court. The Republicans platform declared that Congress should prohibit slavery in all territories.
Before being elected President, when accepting his party’s nomination for senator from Illinois in 1958, Abraham Lincoln was quoted a proverb from the Bible:
A house divided against itself, cannot stand.
I believe this government cannot endure, permanently, half slave and half free. I do not expect theUnion to be dissolved — I do not expect the house to fall — but I do expect it will cease to be divided.
It will become all one thing or all the other.
Either the opponents of slavery will arrest the further spread of it, and place it where the public mind shall rest in the belief that it is in the course of ultimate extinction; or its advocates will push it forward, till it shall become lawful in all the States, old as well as new — North as well as South.
Lincoln opposed allowing blacks to vote or hold political office. But he concluded there is no reason in the world why the negro is not entitled to all the natural rights enumerated in the Declaration of Independence, the right to life, liberty and the pursuit of happiness. … The negro is not my equal in many respects… certainly not in moral or intellectual endowment. But in the right to eat the bread, without the leave of anybody else, which his own hand earns…
Lincoln lost the senate race in Illinois but Republicans believed his performance during a series of debates marked his as a presidential contender for 1860.
Northerners feared that the Slave Power was conspiring to extend slavery into the free states.
A ...
The document provides an overview of Philippine economic history through issues of agrarian reform, taxation, and trade policies. It discusses how the Spanish introduced the encomienda system which exploited Filipino farmers and led to revolts. Under American rule, land ownership issues persisted and various land reform programs were implemented with limited success over many decades. Philippine taxation evolved from tributes imposed by Spain, to a poll tax and other taxes under American rule. Economic reforms in the late 20th century aimed to broaden the tax base and encourage investment.
Rule 92 discussion with original and digestedlspujurists
This document discusses guardianship proceedings and venue. It provides definitions for who may be considered an "incompetent" in need of a guardian, including those suffering from various mental or physical conditions. It outlines where guardianship proceedings can be instituted, either in the province/city where the minor or incompetent resides or where their property is located. It discusses the meaning of the word "incompetent" and provides examples. It also discusses the ability of the court to transfer venue under certain circumstances for the ward's convenience.
Three key points about real estate in Colombia:
1. Colombian and foreign nationals have equal rights to purchase property.
2. Real estate transactions do not impose additional taxes, legal, or financial burdens on foreign investors.
3. Land use must comply with municipal regulations and zoning laws.
The document discusses the history and key aspects of agrarian reform laws in the Philippines. It describes early land reform efforts under Diosdado Macapagal and Ferdinand Marcos, and outlines the major provisions and goals of the comprehensive agrarian reform law passed in 1988, including coverage of public and private agricultural lands, benefits for farmers and farm workers, and mechanisms for land valuation and acquisition.
This document is a Supreme Court decision regarding whether a college property is exempt from real estate taxes. The college property includes a building used for educational purposes, with the director residing on the second floor. The trial court ruled the property was not exempt from taxes. The Supreme Court decision analyzes the legal definition of "used exclusively for educational purposes" based on previous cases. While incidental residential use of the director is allowed, commercial leasing of the first floor is not considered incidental. The Supreme Court overturns the trial court's decision based on this analysis.
Understanding how timely GST payments influence a lender's decision to approve loans, this topic explores the correlation between GST compliance and creditworthiness. It highlights how consistent GST payments can enhance a business's financial credibility, potentially leading to higher chances of loan approval.
OJP data from firms like Vicinity Jobs have emerged as a complement to traditional sources of labour demand data, such as the Job Vacancy and Wages Survey (JVWS). Ibrahim Abuallail, PhD Candidate, University of Ottawa, presented research relating to bias in OJPs and a proposed approach to effectively adjust OJP data to complement existing official data (such as from the JVWS) and improve the measurement of labour demand.
STREETONOMICS: Exploring the Uncharted Territories of Informal Markets throug...sameer shah
Delve into the world of STREETONOMICS, where a team of 7 enthusiasts embarks on a journey to understand unorganized markets. By engaging with a coffee street vendor and crafting questionnaires, this project uncovers valuable insights into consumer behavior and market dynamics in informal settings."
Abhay Bhutada, the Managing Director of Poonawalla Fincorp Limited, is an accomplished leader with over 15 years of experience in commercial and retail lending. A Qualified Chartered Accountant, he has been pivotal in leveraging technology to enhance financial services. Starting his career at Bank of India, he later founded TAB Capital Limited and co-founded Poonawalla Finance Private Limited, emphasizing digital lending. Under his leadership, Poonawalla Fincorp achieved a 'AAA' credit rating, integrating acquisitions and emphasizing corporate governance. Actively involved in industry forums and CSR initiatives, Abhay has been recognized with awards like "Young Entrepreneur of India 2017" and "40 under 40 Most Influential Leader for 2020-21." Personally, he values mindfulness, enjoys gardening, yoga, and sees every day as an opportunity for growth and improvement.
How Does CRISIL Evaluate Lenders in India for Credit RatingsShaheen Kumar
CRISIL evaluates lenders in India by analyzing financial performance, loan portfolio quality, risk management practices, capital adequacy, market position, and adherence to regulatory requirements. This comprehensive assessment ensures a thorough evaluation of creditworthiness and financial strength. Each criterion is meticulously examined to provide credible and reliable ratings.
[4:55 p.m.] Bryan Oates
OJPs are becoming a critical resource for policy-makers and researchers who study the labour market. LMIC continues to work with Vicinity Jobs’ data on OJPs, which can be explored in our Canadian Job Trends Dashboard. Valuable insights have been gained through our analysis of OJP data, including LMIC research lead
Suzanne Spiteri’s recent report on improving the quality and accessibility of job postings to reduce employment barriers for neurodivergent people.
Decoding job postings: Improving accessibility for neurodivergent job seekers
Improving the quality and accessibility of job postings is one way to reduce employment barriers for neurodivergent people.
Solution Manual For Financial Accounting, 8th Canadian Edition 2024, by Libby...Donc Test
Solution Manual For Financial Accounting, 8th Canadian Edition 2024, by Libby, Hodge, Verified Chapters 1 - 13, Complete Newest Version Solution Manual For Financial Accounting, 8th Canadian Edition by Libby, Hodge, Verified Chapters 1 - 13, Complete Newest Version Solution Manual For Financial Accounting 8th Canadian Edition Pdf Chapters Download Stuvia Solution Manual For Financial Accounting 8th Canadian Edition Ebook Download Stuvia Solution Manual For Financial Accounting 8th Canadian Edition Pdf Solution Manual For Financial Accounting 8th Canadian Edition Pdf Download Stuvia Financial Accounting 8th Canadian Edition Pdf Chapters Download Stuvia Financial Accounting 8th Canadian Edition Ebook Download Stuvia Financial Accounting 8th Canadian Edition Pdf Financial Accounting 8th Canadian Edition Pdf Download Stuvia
Solution Manual For Financial Accounting, 8th Canadian Edition 2024, by Libby...
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.R. No. L-25043 April 26, 1968
ANTONIO ROXAS, EDUARDO ROXAS and ROXAS Y CIA., in their own respective
behalf and as judicial co-guardians of JOSE ROXAS, petitioners,
vs.
COURT OF TAX APPEALS and COMMISSIONER OF INTERNAL REVENUE,
respondents.
Leido, Andrada, Perez and Associates for petitioners.
Office of the Solicitor General for respondents.
BENGZON, J.P., J.:
Don Pedro Roxas and Dona Carmen Ayala, Spanish subjects, transmitted to their grandchildren
by hereditary succession the following properties:
(1) Agricultural lands with a total area of 19,000 hectares, situated in the municipality of
Nasugbu, Batangas province;
(2) A residential house and lot located at Wright St., Malate, Manila; and
(3) Shares of stocks in different corporations.
2. To manage the above-mentioned properties, said children, namely, Antonio Roxas, Eduardo
Roxas and Jose Roxas, formed a partnership called Roxas y Compania.
AGRICULTURAL LANDS
At the conclusion of the Second World War, the tenants who have all been tilling the lands in
Nasugbu for generations expressed their desire to purchase from Roxas y Cia. the parcels which
they actually occupied. For its part, the Government, in consonance with the constitutional
mandate to acquire big landed estates and apportion them among landless tenants-farmers,
persuaded the Roxas brothers to part with their landholdings. Conferences were held with the
farmers in the early part of 1948 and finally the Roxas brothers agreed to sell 13,500 hectares to
the Government for distribution to actual occupants for a price of P2,079,048.47 plus
P300,000.00 for survey and subdivision expenses.
It turned out however that the Government 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, Roxas y Cia. allowed the farmers to buy the lands
for the same price but by installment, and contracted with the Rehabilitation Finance Corporation
to pay its loan from the proceeds of the yearly amortizations paid by the farmers.
In 1953 and 1955 Roxas y Cia. derived from said installment payments a net gain of P42,480.83
and P29,500.71. Fifty percent of said net gain was reported for income tax purposes as gain on
the sale of capital asset held for more than one year pursuant to Section 34 of the Tax Code.
RESIDENTIAL HOUSE
During their bachelor days the Roxas brothers lived in the residential house at Wright St.,
Malate, Manila, which they inherited from their grandparents. After Antonio and Eduardo got
married, they resided somewhere else leaving only Jose in the old house. In fairness to his
brothers, Jose paid to Roxas y Cia. rentals for the house in the sum of P8,000.00 a year.
ASSESSMENTS
On June 17, 1958, the Commissioner of Internal Revenue demanded from Roxas y Cia the
payment of real estate dealer's tax for 1952 in the amount of P150.00 plus P10.00 compromise
penalty for late payment, and P150.00 tax for dealers of securities for 1952 plus P10.00
compromise penalty for late payment. The assessment for real estate dealer's tax was based on
the fact that Roxas y Cia. received house rentals from Jose Roxas in the amount of P8,000.00.
Pursuant to Sec. 194 of the Tax Code, an owner of a real estate who derives a yearly rental
income therefrom in the amount of P3,000.00 or more is considered a real estate dealer and is
liable to pay the corresponding fixed tax.
The Commissioner of Internal Revenue justified his demand for the fixed tax on dealers of
securities against Roxas y Cia., on the fact that said partnership made profits from the purchase
and sale of securities.
3. In the same assessment, the Commissioner assessed deficiency income taxes against the Roxas
Brothers for the years 1953 and 1955, as follows:
1953 1955
Antonio Roxas P7,010.00 P5,813.00
Eduardo Roxas 7,281.00 5,828.00
Jose Roxas 6,323.00 5,588.00
The deficiency income taxes resulted from the inclusion as income of Roxas y Cia. of the
unreported 50% of the net profits for 1953 and 1955 derived from the sale of the Nasugbu farm
lands to the tenants, and the disallowance of deductions from gross income of various business
expenses and contributions claimed by Roxas y Cia. and the Roxas brothers. For the reason that
Roxas y Cia. subdivided its Nasugbu farm lands and sold them to the farmers on installment, the
Commissioner considered the partnership as engaged in the business of real estate, hence, 100%
of the profits derived therefrom was taxed.
The following deductions were disallowed:
ROXAS Y CIA.:
1953
Tickets for Banquet in honor of
S. Osmeña
P
40.00
Gifts of San Miguel beer 28.00
Contributions to —
Philippine Air Force Chapel 100.00
Manila Police Trust Fund 150.00
Philippines Herald's fund for
Manila's neediest families 100.00
1955
Contributions to Contribution to
Our Lady of Fatima Chapel,
FEU 50.00
ANTONIO ROXAS:
1953
Contributions to —
Pasay City Firemen Christmas Fund 25.00
Pasay City Police Dept. X'mas fund 50.00
4. 1955
Contributions to —
Baguio City Police Christmas fund 25.00
Pasay City Firemen Christmas fund 25.00
Pasay City Police Christmas fund 50.00
EDUARDO ROXAS:
1953
Contributions to —
Hijas de Jesus' Retiro de Manresa 450.00
Philippines Herald's fund for
Manila's neediest families 100.00
1955
Contributions to Philippines
Herald's fund for Manila's
neediest families 120.00
JOSE ROXAS:
1955
Contributions to Philippines
Herald's fund for Manila's
neediest families 120.00
The Roxas brothers protested the assessment but inasmuch as said protest was denied, they
instituted an appeal in the Court of Tax Appeals on January 9, 1961. The Tax Court heard the
appeal and rendered judgment on July 31, 1965 sustaining the assessment except the demand for
the payment of the fixed tax on dealer of securities and the disallowance of the deductions for
contributions to the Philippine Air Force Chapel and Hijas de Jesus' Retiro de Manresa. The Tax
Court's judgment reads:
WHEREFORE, the decision appealed from is hereby affirmed with respect to petitioners
Antonio Roxas, Eduardo Roxas, and Jose Roxas who are hereby ordered to pay the
respondent Commissioner of Internal Revenue the amounts of P12,808.00, P12,887.00
and P11,857.00, respectively, as deficiency income taxes for the years 1953 and 1955,
plus 5% surcharge and 1% monthly interest as provided for in Sec. 51(a) of the Revenue
Code; and modified with respect to the partnership Roxas y Cia. in the sense that it
should pay only P150.00, as real estate dealer's tax. With costs against petitioners.
Not satisfied, Roxas y Cia. and the Roxas brothers appealed to this Court. The Commissioner of
Internal Revenue did not appeal.
5. The issues:
(1) Is the gain derived from the sale of the Nasugbu farm lands an ordinary gain, hence
100% taxable?
(2) Are the deductions for business expenses and contributions deductible?
(3) Is Roxas y Cia. liable for the payment of the fixed tax on real estate dealers?
The Commissioner of Internal Revenue contends that Roxas y Cia. could be considered a real
estate dealer because it engaged in the business of selling real estate. The business activity
alluded to was the act of subdividing the Nasugbu farm lands and selling them to the farmers-
occupants on installment. To bolster his stand on the point, he cites one of the purposes of Roxas
y Cia. as contained in its articles of partnership, quoted below:
4. (a) La explotacion de fincas urbanes pertenecientes a la misma o que pueden
pertenecer a ella en el futuro, alquilandoles por los plazos y demas condiciones, estime
convenientes y vendiendo aquellas que a juicio de sus gerentes no deben conservarse;
The above-quoted purpose notwithstanding, the proposition of the Commissioner of Internal
Revenue cannot be favorably accepted by Us in this isolated transaction with its peculiar
circumstances in spite of the fact that there were hundreds of vendees. Although they paid for
their respective holdings in installment for a period of ten years, it would nevertheless not make
the vendor Roxas y Cia. a real estate dealer during the ten-year amortization period.
It should be borne in mind that the sale of the Nasugbu farm lands to the very farmers who tilled
them for generations was not only in consonance 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 the Government done it itself. For this magnanimous act, the municipal council of
Nasugbu passed a resolution expressing the people's gratitude.
The power of taxation is sometimes called also the power to destroy. Therefore it should be
exercised with caution to minimize injury to the proprietary rights of a taxpayer. It must be
exercised fairly, equally and uniformly, lest the tax collector kill the "hen that lays the golden
egg". And, in order to maintain the general public's trust and confidence in the Government this
power must be used justly and not treacherously. It does not conform with Our sense of justice in
the instant case for the Government to persuade the taxpayer to lend it a helping hand and later
on to penalize him for duly answering the urgent call.
6. 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%.
DISALLOWED DEDUCTIONS
Roxas y Cia. deducted from its gross income the amount of P40.00 for tickets to a banquet given
in honor of Sergio Osmena and P28.00 for San Miguel beer given as gifts to various persons.
The deduction were claimed as representation expenses. Representation expenses are deductible
from gross income as expenditures incurred in carrying on a trade or business under Section
30(a) of the Tax Code provided the taxpayer proves that they are reasonable in amount, ordinary
and necessary, and incurred in connection with his business. In the case at bar, the evidence does
not show such link between the expenses and the business of Roxas y Cia. The findings of the
Court of Tax Appeals must therefore be sustained.
The petitioners also claim deductions for contributions to the Pasay City Police, Pasay City
Firemen, and Baguio City Police Christmas funds, Manila Police Trust Fund, Philippines
Herald's fund for Manila's neediest families and Our Lady of Fatima chapel at Far Eastern
University.
The contributions to the Christmas funds of the Pasay City Police, Pasay City Firemen and
Baguio City Police are not deductible for the reason that the Christmas funds were not spent for
public purposes but as Christmas gifts to the families of the members of said entities. Under
Section 39(h), a contribution to a government entity is deductible when used exclusively for
public purposes. For this reason, the disallowance must be sustained. On the other hand, the
contribution to the Manila Police trust fund is an allowable deduction for said trust fund belongs
to the Manila Police, a government entity, intended to be used exclusively for its public
functions.
The contributions to the Philippines Herald's fund for Manila's neediest families were disallowed
on the ground that the Philippines Herald is not a corporation or an association contemplated in
Section 30 (h) of the Tax Code. It should be noted however that the contributions were not made
to the Philippines Herald but to a group of civic spirited citizens organized by the Philippines
Herald solely for charitable purposes. There is no question that the members of this group of
citizens do not receive profits, for all the funds they raised were for Manila's neediest families.
Such a group of citizens may be classified as an association organized exclusively for charitable
purposes mentioned in Section 30(h) of the Tax Code.
Rightly, the Commissioner of Internal Revenue disallowed the contribution to Our Lady of
Fatima chapel at the Far Eastern University on the ground that the said university gives
dividends to its stockholders. Located within the premises of the university, the chapel in
question has not been shown to belong to the Catholic Church or any religious organization. On
the other hand, the lower court found that it belongs to the Far Eastern University, contributions
to which are not deductible under Section 30(h) of the Tax Code for the reason that the net
income of said university injures to the benefit of its stockholders. The disallowance should be
sustained.
7. Lastly, Roxas y Cia. questions the imposition of the real estate dealer's fixed tax upon it, because
although it earned a rental income of P8,000.00 per annum in 1952, said rental income came
from Jose Roxas, one of the partners. Section 194 of the Tax Code, in considering as real estate
dealers owners of real estate receiving rentals of at least P3,000.00 a year, does not provide any
qualification as to the persons paying the rentals. The law, which states: 1äwphï1.ñët
. . . "Real estate dealer" includes any person engaged in the business of buying, selling,
exchanging, leasing or renting property on his own account as principal and holding
himself out as a full or part-time dealer in real estate or as an owner of rental property or
properties rented or offered to rent for an aggregate amount of three thousand pesos or
more a year: . . . (Emphasis supplied) .
is too clear and explicit to admit construction. The findings of the Court of Tax Appeals or, this
point is sustained.1äwphï1.ñët
To Summarize, no deficiency income tax is due for 1953 from Antonio Roxas, Eduardo Roxas
and Jose Roxas. For 1955 they are liable to pay deficiency income tax in the sum of P109.00,
P91.00 and P49.00, respectively, computed as follows: *
ANTONIO ROXAS
Net income per return P315,476.59
Add: 1/3 share, profits in Roxas y
Cia.
P 153,249.15
Less amount declared 146,135.46
Amount understated P 7,113.69
Contributions disallowed 115.00
P 7,228.69
Less 1/3 share of contributions
amounting to P21,126.06
disallowed from partnership but
allowed to partners 7,042.02 186.67
Net income per review P315,663.26
Less: Exemptions 4,200.00
Net taxable income P311,463.26
Tax due 154,169.00
8. Tax paid 154,060.00
Deficiency P 109.00
==========
EDUARDO ROXAS
Net income per return
P
304,166.92
Add: 1/3 share, profits in Roxas y
Cia
P 153,249.15
Less profits declared 146,052.58
Amount understated P 7,196.57
Less 1/3 share in contributions
amounting to P21,126.06
disallowed from partnership but
allowed to partners 7,042.02 155.55
Net income per review P304,322.47
Less: Exemptions 4,800.00
Net taxable income P299,592.47
Tax Due P147,250.00
Tax paid 147,159.00
Deficiency P91.00
===========
JOSE ROXAS
Net income per return P222,681.76
Add: 1/3 share, profits in Roxas y
Cia.
P153,429.15
Less amount reported 146,135.46
Amount understated 7,113.69
9. Less 1/3 share of contributions
disallowed from partnership but
allowed as deductions to partners 7,042.02 71.67
Net income per review P222,753.43
Less: Exemption 1,800.00
Net income subject to tax P220,953.43
Tax due P102,763.00
Tax paid 102,714.00
Deficiency P 49.00
===========
WHEREFORE, the decision appealed from is modified. Roxas y Cia. is hereby ordered to pay
the sum of P150.00 as real estate dealer's fixed tax for 1952, and Antonio Roxas, Eduardo Roxas
and Jose Roxas are ordered to pay the respective sums of P109.00, P91.00 and P49.00 as their
individual deficiency income tax all corresponding for the year 1955. No costs. So ordered.
.R. No. 91649 May 14, 1991
ATTORNEYS HUMBERTO BASCO, EDILBERTO BALCE, SOCRATES MARANAN
AND LORENZO SANCHEZ, petitioners,
vs.
PHILIPPINE AMUSEMENTS AND GAMING CORPORATION (PAGCOR), respondent.
H.B. Basco & Associates for petitioners.
Valmonte Law Offices collaborating counsel for petitioners.
Aguirre, Laborte and Capule for respondent PAGCOR.
PARAS, J.:p
A TV ad proudly announces:
"The new PAGCOR — responding through responsible gaming."
10. But the petitioners think otherwise, that is why, they filed the instant petition seeking to
annul the Philippine Amusement and Gaming Corporation (PAGCOR) Charter — PD
1869, because it is allegedly contrary to morals, public policy and order, and because —
A. It constitutesa waiver of a right prejudicial to a third person with a right recognized by law. It waivedthe Manila City
government'sright to impose taxesand license fees, which isrecognized by law;
B. For the same reason stated in the immediately preceding paragraph, the law hasintrudedintothe local
government'sright to impose local taxesand license fees. This, in contravention of the constitutionally enshrined
principleof local autonomy;
C. It violatesthe equal protection clause of the constitution inthat itlegalizesPAGCOR — conducted gambling, while
most other forms of gambling are outlawed,together withprostitution, drug traffickingand other vices;
D. It violatesthe avowed trend of theCory government away from monopolistic and crony economy, and toward free
enterprise and privatization. (p. 2, AmendedPetition; p. 7, Rollo)
In their Second Amended Petition, petitioners also claim that PD 1869 is contrary to the
declared national policy of the "new restored democracy" and the people's will as
expressed in the 1987 Constitution. The decree is said to have a "gambling objective"
and therefore is contrary to Sections 11, 12 and 13 of Article II, Sec. 1 of Article VIII and
Section 3 (2) of Article XIV, of the present Constitution (p. 3, Second Amended Petition;
p. 21, Rollo).
The procedural issue is whether petitioners, as taxpayers and practicing lawyers
(petitioner Basco being also the Chairman of the Committee on Laws of the City Council
of Manila), can question and seek the annulment of PD 1869 on the alleged grounds
mentioned above.
The Philippine Amusements and Gaming Corporation (PAGCOR) was created by virtue
of P.D. 1067-A dated January 1, 1977 and was granted a franchise under P.D. 1067-B
also dated January 1, 1977 "to establish, operate and maintain gambling casinos on
land or water within the territorial jurisdiction of the Philippines." Its operation was
originally conducted in the well known floating casino "Philippine Tourist." The operation
was considered a success for it proved to be a potential source of revenue to fund
infrastructure and socio-economic projects, thus, P.D. 1399 was passed on June 2,
1978 for PAGCOR to fully attain this objective.
Subsequently, on July 11, 1983, PAGCOR was created under P.D. 1869 to enable the
Government to regulate and centralize all games of chance authorized by existing
franchise or permitted by law, under the following declared policy —
Sec. 1. Declaration of Policy. — It ishereby declared to be thepolicy of theState to centralizeand integrateall games
of chance not heretoforeauthorized by existing franchisesor permitted by law in order to attain thefollo wingobjectives:
(a) To centralizeand integratethe rightand authority to operate andconduct gamesof chance into one corporate entity
to be controlled, administered and supervised by the Government.
(b) To establish and operateclubsand casinos, for amusement andrecreation, including sportsgamingpools,
(basketball, football, lotteries, etc.) and such other formsof amusement andrecreationincluding gamesof chance,
which may be allowed by law withinthe territorial jurisdiction of the Philippinesand which will: (1) generatesourcesof
additional revenue to fundinfrastructure and socio-civic projects, such asflood control programs, beautification,
sewerage and sewage projects, Tulunganng BayanCenters, Nutritional Programs, Population Control and such other
11. essential public services; (2) create recreation and integratedfacilitieswhich will expandand improvethe country's
existing tourist attractions; and (3) minimize, if not totally eradicate, all the evils, malpracticesand corruptionsthat are
normally prevalent on theconduct and operationof gambling clubsand casinoswithoutdirect governmentinvolvement.
(Section 1, P.D. 1869)
To attain these objectives PAGCOR is given territorial jurisdiction all over the
Philippines. Under its Charter's repealing clause, all laws, decrees, executive orders,
rules and regulations, inconsistent therewith, are accordingly repealed, amended or
modified.
It is reported that PAGCOR is the third largest source of government revenue, next to
the Bureau of Internal Revenue and the Bureau of Customs. In 1989 alone, PAGCOR
earned P3.43 Billion, and directly remitted to the National Government a total of P2.5
Billion in form of franchise tax, government's income share, the President's Social Fund
and Host Cities' share. In addition, PAGCOR sponsored other socio-cultural and
charitable projects on its own or in cooperation with various governmental agencies,
and other private associations and organizations. In its 3 1/2 years of operation under
the present administration, PAGCOR remitted to the government a total of P6.2 Billion.
As of December 31, 1989, PAGCOR was employing 4,494 employees in its nine (9)
casinos nationwide, directly supporting the livelihood of Four Thousand Four Hundred
Ninety-Four (4,494) families.
But the petitioners, are questioning the validity of P.D. No. 1869. They allege that the
same is "null and void" for being "contrary to morals, public policy and public order,"
monopolistic and tends toward "crony economy", 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), 12 (Family) and 13
(Role of Youth) of Article II, Section 1 (Social Justice) of Article XIII and Section 2
(Educational Values) of Article XIV of the 1987 Constitution.
This challenge to P.D. No. 1869 deserves a searching and thorough scrutiny and the
most deliberate consideration by the Court, involving as it does the exercise of what has
been described as "the highest and most delicate function which belongs to the judicial
department of the government." (State v. Manuel, 20 N.C. 144; Lozano v. Martinez, 146
SCRA 323).
As We enter upon the task of passing on the validity of an act of a co-equal and
coordinate branch of the government We need not be reminded of the time-honored
principle, deeply ingrained in our jurisprudence, that a statute is presumed to be valid.
Every presumption must be indulged in favor of its constitutionality. This is not to say
that We approach Our task with diffidence or timidity. Where it is clear that the
legislature or the executive for that matter, has over-stepped the limits of its authority
under the constitution, We should not hesitate to wield the axe and let it fall heavily, as
fall it must, on the offending statute (Lozano v. Martinez, supra).
In Victoriano v. Elizalde Rope Workers' Union, et al, 59 SCRA 54, the Court thru Mr.
Justice Zaldivar underscored the —
12. . . . thoroughly established principle whichmust be followed in all caseswhere questionsof constitutionality asobtain in
the instant cases are involved. All presumptionsare indulgedin favor of constitutionality; onewho attacksa statute
allegingunconstitutionality must prove itsinvalidity beyond a reasonabledoubt; thata law may workhardship doesnot
render it unconstitutional; that if any reasonablebasismay be conceived whichsupportsthe statute, it will be upheld
and the challenger must negateall possiblebasis; that the courtsare not concerned with the wisdom, justice, policy or
expediency of a statute andthat a liberal interpretation of the constitution in favor of the constitutionality of legislation
should be adopted. (Danner v. Hass, 194 N.W. 2nd 534, 539; Spurbeckv. Statton, 106 N.W. 2nd 660,663; 59 SCRA
66; see also e.g. Salasv. Jarencio, 46 SCRA 734, 739[1970]; Peraltav. Commission on Elections, 82 SCRA 30, 55
[1978]; and Heirsof Ordona v. Reyes, 125 SCRA 220, 241-242 [1983]citedin CitizensAlliance for Consumer
Protection v. Energy Regulatory Board, 162 SCRA 521, 540)
Of course, there is first, the procedural issue. The respondents are questioning the legal
personality of petitioners to file the instant petition.
Considering however the importance to the public of the case at bar, and in keeping
with the Court's duty, under the 1987 Constitution, 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, the Court has
brushed aside technicalities of procedure and has taken cognizance of this petition.
(Kapatiran ng mga Naglilingkod sa Pamahalaan ng Pilipinas Inc. v. Tan, 163 SCRA
371)
With particular regard to therequirement of proper party asapplied inthe casesbefore us, We hold that the same is
satisfied by the petitionersand intervenorsbecause each of them hassustained or isin danger of sustainingan
immediateinjury asa result of the actsor measures complained of. And even if, strictly speaking th ey are not covered
by the definition, it isstill withinthe widediscretion of the Court to waivethe requirement and so remove the
impediment to itsaddressing and resolving theseriousconstitutional questionsraised.
In the first Emergency PowersCases, ordinary citizensand taxpayerswere allowedto question the constitutionality of
several executive ordersissued by President Quirino although they were involving only an indirect andgeneral interest
shared in common with the public. TheCourt dismissed the objectionthat they were not proper partiesand ruled that
"the transcendental importanceto the public of these casesdemandsthat they be settledpromptly and definitely,
brushing aside, if we must technicalitiesof procedure." We have since then applied theexception in many other cases.
(Association of Small Landownersin the Philippines, Inc. v. Sec. of Agrarian Reform, 175 SCRA 343).
Having disposed of the procedural issue, We will now discuss the substantive issues
raised.
Gambling in all its forms, unless allowed by law, is generally prohibited. But the
prohibition of gambling does not mean that the Government cannot regulate it in the
exercise of its police power.
The concept of police power is well-established in this jurisdiction. 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." (Edu v. Ericta, 35 SCRA 481, 487) As
defined, it consists of (1) an imposition or restraint upon liberty or property, (2) in order
to foster the common good. It is not capable of an exact definition but has been,
purposely, veiled in general terms to underscore its all-comprehensive embrace.
(Philippine Association of Service Exporters, Inc. v. Drilon, 163 SCRA 386).
Its scope, ever-expanding to meet the exigencies of the times, even to anticipate the
future where it could be done, provides enough room for an efficient and flexible
response to conditions and circumstances thus assuming the greatest benefits. (Edu v.
Ericta, supra)
13. It finds no specific Constitutional grant for the plain reason that it does not owe its origin
to the charter. Along with the taxing power and eminent domain, it is inborn in the very
fact of statehood and sovereignty. It is a fundamental attribute of government that has
enabled it to perform the most vital functions of governance. Marshall, to whom the
expression has been credited, refers to it succinctly as the plenary power of the state "to
govern its citizens". (Tribe, American Constitutional Law, 323, 1978). The police power
of the State is a power co-extensive with self-protection and is most aptly termed the
"law of overwhelming necessity." (Rubi v. Provincial Board of Mindoro, 39 Phil. 660,
708) It is "the most essential, insistent, and illimitable of powers." (Smith Bell & Co. v.
National, 40 Phil. 136) It is a dynamic force that enables the state to meet the agencies
of the winds of change.
What was the reason behind the enactment of P.D. 1869?
P.D. 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, PD 1869). As was subsequently
proved, regulating and centralizing gambling operations in one corporate entity — the
PAGCOR, was beneficial not just to the Government but to society in general. It is a
reliable source of much needed revenue for the cash strapped Government. It provided
funds for social impact projects and subjected gambling to "close scrutiny, regulation,
supervision and control of the Government" (4th Whereas Clause, PD 1869). With the
creation of PAGCOR and the direct intervention of the Government, the evil practices
and corruptions that go with gambling will be minimized if not totally eradicated. Public
welfare, then, lies at the bottom of the enactment of PD 1896.
Petitioners contend that P.D. 1869 constitutes a waiver of the right of the City of Manila
to impose taxes and legal fees; that the exemption clause in P.D. 1869 is violative of the
principle of local autonomy. They must be referring to Section 13 par. (2) of P.D. 1869
which exempts PAGCOR, as the franchise holder from paying any "tax of any kind or
form, income or otherwise, as well as fees, charges or levies of whatever nature,
whether National or Local."
(2) Income and other taxes. — a) Franchise Holder: No tax of any kind or form, income or otherwise aswell asfees,
chargesor leviesof whatever nature, whether National or Local, shall be assessed and collectedunder thisfranchise
from the Corporation; nor shall any form or tax or charge attach inany way to the earningsof the Corporation,except a
franchise tax of five (5%) percent of the gross revenuesor earningsderived by the Corporation from itsoperations
under thisfranchise. Such tax shall be due and payable quarterly to theNational Government andshall bein lieuof all
kinds of taxes, levies, feesor assessments of any kind, nature or description,levied, establishedor collectedby any
municipal, provincial or national government authority (Section 13 [2]).
Their contention stated hereinabove is without merit for the following reasons:
(a) The City of Manila, being a mere Municipal corporation has no inherent right to
impose taxes (Icard v. City of Baguio, 83 Phil. 870; City of Iloilo v. Villanueva, 105 Phil.
337; Santos v. Municipality of Caloocan, 7 SCRA 643). Thus, "the Charter or statute
must plainly show an intent to confer that power or the municipality cannot assume it"
(Medina v. City of Baguio, 12 SCRA 62). Its "power to tax" therefore must always yield
to a legislative act which is superior having been passed upon by the state itself which
14. has the "inherent power to tax" (Bernas, the Revised [1973] Philippine Constitution, Vol.
1, 1983 ed. p. 445).
(b) The Charter of the City of Manila is subject to control by Congress. It should be
stressed that "municipal corporations are mere creatures of Congress" (Unson v.
Lacson, G.R. No. 7909, January 18, 1957) which has the power to "create and abolish
municipal corporations" due to its "general legislative powers" (Asuncion v. Yriantes, 28
Phil. 67; Merdanillo v. Orandia, 5 SCRA 541). Congress, therefore, has the power of
control over Local governments (Hebron v. Reyes, G.R. No. 9124, July 2, 1950). And if
Congress can grant the City of Manila the power to tax certain matters, it can also
provide for exemptions or even take back the power.
(c) The City of Manila's power to impose license fees on gambling, has long been
revoked. As early as 1975, the power of local governments to regulate gambling thru
the grant of "franchise, licenses or permits" was withdrawn by P.D. No. 771 and was
vested exclusively on the National Government, thus:
Sec. 1. Any provision of law to the contrary notwithstanding, theauthority of chartered citiesand other local
governmentsto issue license, permitor other form of franchise to operate, maintainand establish horse and dog race
tracks, jai-alai and other formsof gambling ishereby revoked.
Sec. 2. Hereafter, all permitsor franchisesto operate, maintain and establish, horse and dog race tracks, jai -alai and
other formsof gamblingshall be issued by the national government upon proper application andverification of the
qualification of the applicant. . .
Therefore, only the National Government has the power to issue "licenses or permits"
for the operation of gambling. Necessarily, 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.
(d) Local governments have no power to tax instrumentalities of the National
Government. PAGCOR is a government owned or controlled corporation with an
original charter, PD 1869. All of its shares of stocks are owned by the National
Government. In addition to its corporate powers (Sec. 3, Title II, PD 1869) it also
exercises regulatory powers thus:
Sec. 9. Regulatory Power. — The Corporationshall maintain a Registry of the affiliated entities, and shall exercise all
the powers, authority and the responsibilitiesvested in the Securitiesand ExchangeCommission over such affiliating
entitiesmentionedunder the preceding section, including,but not limitedto amendmentsof Articlesof Incorporation
and By-Laws, changesin corporate term, structure, capitalization and other mattersconcerningthe operation of the
affiliatedentities, the provisionsof the Corporation Code of thePhilippinesto the contrary notwithstanding,except only
with respect to original incorporation.
PAGCOR has a dual role, to operate and to regulate gambling casinos. The latter role is
governmental, which places it in the category of an agency or instrumentality of the
Government. Being an instrumentality of the Government, PAGCOR should be and
actually is exempt from local taxes. Otherwise, its operation might be burdened,
impeded or subjected to control by a mere Local government.
The stateshave no power by taxation or otherwise, to retard, impede, burdenor in any manner control the operationof
constitutional lawsenacted by Congressto carry into executionthe powersvested in the federal government. (MC
Culloch v. Marland, 4 Wheat 316, 4 L Ed. 579)
15. This doctrine emanates from the "supremacy" of the National Government over local
governments.
Justice Holmes, speaking for the Supreme Court, made reference to the entireabsence of power on the part of the
Statesto touch, in that way (taxation) at least, the instrumentalitiesof the United States(Johnson v. Maryland, 254 US
51) and it can be agreed that no stateor political subdivisioncan regulatea federal instrumentality in such a way as to
prevent it from consummating its federal responsibilities, or even to seriously burden itin the accomplishment of them.
(Antieau, Modern Constitutional Law, Vol. 2, p. 140, emphasissupplied)
Otherwise, mere creatures of the State can defeat National policies thru extermination
of what local authorities may perceive to be undesirable activities or enterprise using the
power to tax as "a tool for regulation" (U.S. v. Sanchez, 340 US 42).
The power to tax which was called by Justice Marshall as the "power to destroy" (Mc
Culloch v. Maryland, supra) cannot be allowed to defeat an instrumentality or creation of
the very entity which has the inherent power to wield it.
(e) Petitioners also argue that the Local Autonomy Clause of the Constitution will be
violated by P.D. 1869. This is a pointless argument. Article X of the 1987 Constitution
(on Local Autonomy) provides:
Sec. 5. Each local government unit shall havethe power to create itsown source of revenue and to levy taxes, fees,
and other chargessubject to such guidelines andlimitation as the congress may provide, consistent with thebasic
policy on local autonomy.Such taxes, feesand chargesshall accrue exclusively to the local government. (emphasis
supplied)
The power of local government to "impose taxes and fees" is always subject to
"limitations" which Congress may provide by law. Since PD 1869 remains an "operative"
law until "amended, repealed or revoked" (Sec. 3, Art. XVIII, 1987 Constitution), its
"exemption clause" remains as an exception to the exercise of the power of local
governments to impose taxes and fees. It cannot therefore be violative but rather is
consistent with the principle of local autonomy.
Besides, the principle of local autonomy under the 1987 Constitution simply means
"decentralization" (III Records of the 1987 Constitutional Commission, pp. 435-436, as
cited in Bernas, The Constitution of the Republic of the Philippines, Vol. II, First Ed.,
1988, p. 374). It does not make local governments sovereign within the state or an
"imperium in imperio."
Local Government hasbeen described asa political subdivision of a nationor state which isconstituted by law and has
substantial control of local affairs. In a unitary system of government, such asthe government under the Philippine
Constitution, local governmentscan only be an intra sovereign subdivisionof one sovereign nation, itcannotbe an
imperium in imperio. Local governmentin such a system can only mean a measure of decentralization of thefunction
of government. (emphasissupplied)
As to what state powers should be "decentralized" and what may be delegated to local
government units remains a matter of policy, which concerns wisdom. It is therefore a
political question. (Citizens Alliance for Consumer Protection v. Energy Regulatory
Board, 162 SCRA 539).
16. What is settled is that the matter of regulating, taxing or otherwise dealing with gambling
is a State concern and hence, it is the sole prerogative of the State to retain it or
delegate it to local governments.
As gambling isusually an offenseagainst theState, legislative grantor express charter power is generally necessary to
empower the local corporation to deal withthe subject.. . . In the absence of express grant of power to enact,
ordinance provisions on this subject which are inconsistent withthe statelaws are void.(Ligan v. Gadsden, Ala App.
107 So. 733 Ex-Parte Solomon, 9, Cals. 440, 27 PAC 757followingin re Ah You, 88 Cal. 99, 25 PAC 974,22 Am St.
Rep. 280, 11 LRA 480, ascited in Mc QuinllanVol. 3 Ibid, p. 548, emphasissupplied)
Petitioners next contend that P.D. 1869 violates the equal protection clause of the
Constitution, because "it legalized PAGCOR — conducted gambling, while most
gambling are outlawed together with prostitution, drug trafficking and other vices" (p. 82,
Rollo).
We, likewise, find no valid ground to sustain this contention. The petitioners' posture
ignores the well-accepted meaning of the clause "equal protection of the laws." The
clause does not preclude classification of individuals who may be accorded different
treatment under the law as long as the classification is not unreasonable or arbitrary
(Itchong v. Hernandez, 101 Phil. 1155). A law does not have to operate in equal force
on all persons or things to be conformable to Article III, Section 1 of the Constitution
(DECS v. San Diego, G.R. No. 89572, December 21, 1989).
The "equal protection clause" does not prohibit the Legislature from establishing classes
of individuals or objects upon which different rules shall operate (Laurel v. Misa, 43 O.G.
2847). The Constitution does not require situations which are different in fact or opinion
to be treated in law as though they were the same (Gomez v. Palomar, 25 SCRA 827).
Just how P.D. 1869 in legalizing gambling conducted by PAGCOR is violative of the
equal protection is not clearly explained in the petition. The mere fact that some
gambling activities like cockfighting (P.D 449) horse racing (R.A. 306 as amended by
RA 983), sweepstakes, lotteries and races (RA 1169 as amended by B.P. 42) are
legalized under certain conditions, while others are prohibited, does not render the
applicable laws, P.D. 1869 for one, unconstitutional.
If the law presumably hitsthe evil where it ismost felt, it isnot to be overthrown because there are other instancesto
which it might havebeenapplied. (Gomez v. Palomar, 25 SCRA 827)
The equal protectionclause of the 14th Amendment doesnot mean that all occupationscalled by the same namemust
be treated the same way; the state may do what it can to prevent whichisdeemedasevil and stop short of those
cases in which harm to the few concernedisnot lessthan the harm to the public that wouldinsure if the rulelaid down
were made mathematically exact.(Dominican Hotel v. Arizona, 249US 2651).
Anent petitioners' claim that PD 1869 is contrary to the "avowed trend of the Cory
Government away from monopolies and crony economy and toward free enterprise and
privatization" suffice it to state that this is not a ground for this Court to nullify P.D. 1869.
If, indeed, PD 1869 runs counter to the government's policies then it is for the Executive
Department to recommend to Congress its repeal or amendment.
The judiciary doesnot settle policy issues. The Court can only declare what thelaw isand not what the law should be.
Under our system of government,policy issuesare within the domain of the political branchesof governmentand of the
people themselvesas the repository of all state power. (Valmonte v. Belmonte, Jr., 170 SCRA 256).
17. On the issue of "monopoly," however, the Constitution provides that:
Sec. 19. The State shall regulateor prohibitmonopolieswhen public interest so requires. No combinationsi n restraint
of trade or unfair competitionshall be allowed. (Art. XII, National Economy and Patrimony)
It should be noted that, as the provision is worded, monopolies are not necessarily
prohibited by the Constitution. The state must still decide whether public interest
demands that monopolies be regulated or prohibited. Again, this is a matter of policy for
the Legislature to decide.
On petitioners' allegation that P.D. 1869 violates Sections 11 (Personality Dignity) 12
(Family) and 13 (Role of Youth) of Article II; Section 13 (Social Justice) of Article XIII
and Section 2 (Educational Values) of Article XIV of the 1987 Constitution, suffice it to
state also that these are merely statements of principles and, policies. As such, they are
basically not self-executing, meaning a law should be passed by Congress to clearly
define and effectuate such principles.
In general, therefore, the 1935 provisionswere not intended to be self-executingprinciplesready for enforcement
through the courts. They were rather directivesaddressed to the executiveand thelegislature. If the executive andthe
legislature failedto heedthe directivesof the articlesthe availableremedy wasnot judicial or political. The electorate
could express their displeasure with the failure of the executive and thelegislature throughthe language of the ballot.
(Bernas, Vol. II, p. 2)
Every law has in its favor the presumption of constitutionality (Yu Cong Eng v. Trinidad,
47 Phil. 387; Salas v. Jarencio, 48 SCRA 734; Peralta v. Comelec, 82 SCRA 30; Abbas
v. Comelec, 179 SCRA 287). Therefore, for PD 1869 to be nullified, it must be shown
that there is a clear and unequivocal breach of the Constitution, not merely a doubtful
and equivocal one. In other words, the grounds for nullity must be clear and beyond
reasonable doubt. (Peralta v. Comelec, supra) Those who petition this Court to declare
a law, or parts thereof, unconstitutional must clearly establish the basis for such a
declaration. Otherwise, their petition must fail. Based on the grounds raised by
petitioners to challenge the constitutionality of P.D. 1869, the Court finds that petitioners
have failed to overcome the presumption. The dismissal of this petition is therefore,
inevitable. But as to whether P.D. 1869 remains a wise legislation considering the
issues of "morality, monopoly, trend to free enterprise, privatization as well as the state
principles on social justice, role of youth and educational values" being raised, is up for
Congress to determine.
As this Court held in Citizens' Alliance for Consumer Protection v. Energy Regulatory
Board, 162 SCRA 521 —
Presidential Decree No. 1956,asamendedby Executive Order No. 137 has, in any case, in itsfavor the presumption
of validity andconstitutionality which petitionersValmonte andthe KMU havenot overturned.Petitionershave not
undertaken to identify theprovisionsin the Constitution whichthey claim to have been violatedby that statute. This
Court, however, isnot compelled to speculateand to imagine how the assailedlegi slationmay possibly offend some
provision of the Constitution. TheCourt notes, further, in thisrespect that petitionershave in the mainput inquestion
the wisdom, justice and expediency of the establishment of the OPSF, issueswhich are not properly a ddressed to this
Court and which thisCourt may not constitutionally passupon. Those issues should be addressed rather to the political
departmentsof government: the President andthe Congress.
Parenthetically, We wish to state that gambling is generally immoral, and this is
precisely so when the gambling resorted to is excessive. This excessiveness
18. necessarily depends not only on the financial resources of the gambler and his family
but also on his mental, social, and spiritual outlook on life. However, the mere fact that
some persons may have lost their material fortunes, mental control, physical health, or
even their lives does not necessarily mean that the same are directly attributable to
gambling. Gambling may have been the antecedent, but certainly not necessarily the
cause. For the same consequences could have been preceded by an overdose of food,
drink, exercise, work, and even sex.
WHEREFORE, the petition is DISMISSED for lack of merit.
SO ORDERED.
[G.R. No. 143540. April 11, 2003]
JOEL G. MIRANDA, petitioner, vs. ANTONIO C. CARREON, MILAGROS B. CASCO,
ELSIE S. ESTARES, JULIUS N. MALLARI, ELINORA A. DANAO, JOVELYN G.
RETAMAL, MARIFE S. ALMAZAN, JONALD R. DALMACIO, JENNIFER C. PLAZA,
RIZALDY B. AGGABAO, VILMA T. VENTURA, BENEDICT B. PANGANIBAN, JOSE L.
GOMBIO, MELCHOR E. SORIANO, ZARINA C. PANGANIBAN, EMELITA D. TAUYA,
EVANGELINE A. SICAM, MATABAI AQUARIOUS Q. CULANG, MELVIN L. GARCIA,
JOHNNY N. YU, JR., LOIDA J. PURUGGANAN, EDUARDO S. VALENCIA, EDITHA A.
REGLOS, HENRY P. MAPALAD, RAMIL C. GALANG, JUSTINA M. MACASO, MARTHA
B. ALLAM, and ARSENIA A. CATAINA, respondents.
D E C I S I O N
SANDOVAL-GUTIERREZ, J.:
Before us is a petition for review on certiorari1[1] assailing the Decision2[2] dated May 21, 1999
and the Resolution dated June 5, 2000 of the Court of Appeals in CA-G.R. SP No. 36997.
In the early part of 1988, Vice Mayor Amelita Navarro, while serving as Acting Mayor of the
City of Santiago because of the suspension of Mayor Jose Miranda, appointed the above-named
respondents to various positions in the city government. Their appointments were with
permanent status and based on the evaluation made by the City Personnel Selection and
Promotion Board (PSPB) created pursuant to Republic Act No. 7160.3[3] The Civil Service
Commission (CSC) approved the appointments.
When Mayor Jose Miranda reassumed his post on March 5, 1998 after his suspension, he
considered the composition of the PSPB irregular since the majority party, to which he belongs,
19. was not properly represented.4[4] He then formed a three-man special performance audit team
composed of Roberto C. Bayaua, Antonio AL. Martinez and Antonio L. Santos, to conduct a
personnel evaluation audit of those who were previously screened by the PSPB and those on
probation. After conducting the evaluation, the audit team submitted to him a report dated June
8, 1998 stating that the respondents were found “wanting in (their) performance.”
On June 10, 1998, or three months after Mayor Miranda reassumed his post, he issued an order
terminating respondents’ services effective June 15, 1998 because they “performed poorly”
during the probationary period.
Respondents appealed to the CSC, contending that being employees on probation,5[5] they can be
dismissed from the service on the ground of poor performance only after their probationary
period of six months, not after three (3) months. They also denied that an evaluation on their
performance was conducted, hence, their dismissal from the service violated their right to due
process.
On October 19, 1998, the CSC issued Resolution No. 982717 reversing the order of Mayor
Miranda and ordering that respondents be reinstated to their former positions with payment of
backwages, thus:
x x x
“Granting that the complainant-employees (now respondents) indeed rated poorly, the question
that remains is whether they can be terminated from the service on that ground.
x x x
“x x x, at the time of their termination the complainants have not finished the six (6) months
probationary period. x x x, they may be terminated even before the expiration of the
probationary period pursuant to Section 26, par. 1, Chapter 5, Book V, Title I-A of the Revised
Administrative Code of 1987. Said Section provides:
‘All such persons (appointees who meet all the requirements of the position) must serve a
probationary period of six months following their original appointment and shall undergo a
thorough character investigation in order to acquire a permanent civil service status. A
probationer may be dropped from the service for unsatisfactory conduct or for want of
capacity anytime before the expiration of the probationary period: Provided, that such
action is appealable to the Commission.’
“It is, however, clear from the foregoing quoted provision that an employee on probation status
may be terminated only for unsatisfactory conduct or want of capacity. In this case, the
services of the complainants were terminated on the ground of poor performance x x x.
20. Although poor performance may come near the concept of want of capacity, the latter, as
held by this Commission, ‘implies opportunity on the part of the head of office to observe
the performance and demeanor of the employee concerned’ (Charito Pandes, CSC Resolution
No. 965592). At this point, considering that Mayor Jose Miranda reassumed his post only
on March 5, 1998 after serving his suspension, it is quite improbable that he can already
gauge the performance of the complainants through the mere lapse of three months
considering that the date of the letter of termination is June 10, 1998 and its effectivity date
June 15, 1998.”6[6] (emphasis supplied)
Meanwhile, the COMELEC disqualified Mayor Jose Miranda as a mayoralty candidate in the
1998 May elections. His son Joel G. Miranda, herein petitioner, substituted for him and was
proclaimed Mayor of Santiago City. He then filed a motion for reconsideration of the CSC
Resolution No. 982717 (in favor of respondents) but it was denied in the CSC Resolution No.
990557 dated March 3, 1999.
Petitioner then filed with the Court of Appeals a petition for review on certiorari, docketed as
CA-G.R. SP No. 36997. On May 21, 1999, the Court of Appeals rendered a Decision affirming
in toto the CSC Resolution No. 982717. Forthwith, petitioner filed a motion for reconsideration,
but before it could be resolved by the Court of Appeals, several events supervened. This Court,
in G.R. No. 136351, “Joel G. Miranda vs. Antonio M. Abaya and the COMELEC,” 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.7[7]
On December 20, 1999, Mayor Navarro filed with the Court of Appeals a “Motion to Withdraw
the Motion for Reconsideration” (previously submitted by former Mayor Joel G. Miranda).
On June 5, 2000, the Court of Appeals denied petitioner’s motion for reconsideration of its
Decision.
On June 11, 2000, the Court of Appeals granted Mayor Navarro’s “Motion to Withdraw the
Motion for Reconsideration.” In effect, the CSC Resolution reinstating respondents to their
positions stays.
In this petition, petitioner Joel G. 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.
In their comment, respondents claim that since petitioner ceased to be Mayor of Santiago City,
he has no legal personality to file the instant petition and, therefore, the same should be
dismissed. They insist that they were not actually evaluated on their performance. But assuming
there was indeed such an evaluation, it should have been done by their immediate supervisors,
not by those appointed by former Mayor Jose Miranda.
21. In his reply, petitioner contends that as a taxpayer, he has a legal interest in the case at bar,
hence, can lawfully file this petition.
Section 17, Rule 3 of the 1997 Rules of Civil Procedure, as amended, provides:
“Sec. 17. Death or separation of a party who is a public officer. – When a public officer is a
party in an action in his official capacity and during its pendency dies, resigns or otherwise
ceases to hold office, the action may be continued and maintained by or against his successor if,
within thirty (30) days after the successor takes office or such time as may be granted by the
Court, 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.”
It is clear from the above Rule that when petitioner ceased to be mayor of Santiago City, the
action may be continued and maintained by his successor, Mayor Amelita Navarro, if there is
substantial need to do so.
Mayor Navarro, however, 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. In fact, she filed with the Court of Appeals a“Motion
to Withdraw the Motion for Reconsideration” (lodged by petitioner). She likewise reinstated all
the respondents to their respective positions and approved the payment of their salaries.
Petitioner insists though that as a taxpayer, he is a real party-in-interest and, therefore, should
continue and maintain this suit. Such contention is misplaced. Section 2, Rule 3 of the same
Rules provides:
“Section 2. Parties in interest. - A real party in interest is the party who stands to be benefited
or injured by the judgment in the suit, or the party entitled to the avails of the suit. Unless
otherwise authorized by law or these Rules, every action must be prosecuted or defended in
the name of the real party in interest.” (emphasis supplied)
Even as a taxpayer, petitioner does not stand “to be benefited or injured by the judgment of the
suit.” Not every action filed by a taxpayer can qualify to challenge the legality of official acts
done by the government.8[8] 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.”9[9]
The issue in this case is whether respondents’ services were illegally terminated. Clearly, it does
not involve the illegal disbursement of public funds, hence, petitioner’s action cannot be
considered a taxpayer’s suit.
At any rate, to put to rest the controversy at hand, we shall resolve the issue of whether
respondents’ services were illegally terminated by former Mayor Jose Miranda.
22. The 1987 Constitution provides that “no officer or employee of the civil service shall be
removed or suspended except for cause provided by law.”10[10] Under the Revised
Administrative Code of 1987, a government officer or employee may be removed from the
service on two (2) grounds: (1) unsatisfactory conduct and (2) want of capacity. While the Code
does not define and delineate the concepts of these two grounds, however, the Civil Service Law
(Presidential Decree No. 807, as amended) provides specific grounds for dismissing a
government officer or employee from the service. Among these grounds are inefficiency and
incompetence in the performance of official duties. In the case at bar, respondents were
dismissed on the ground of poor performance. Poor performance falls within the concept of
inefficiency and incompetence in the performance of official duties which, as earlier mentioned,
are grounds for dismissing a government official or employee from the service.
But inefficiency or incompetence can only be determined after the passage of sufficient time,
hence, the probationary period of six (6) months for the respondents. Indeed, to be able to gauge
whether a subordinate is inefficient or incompetent requires enough time on the part of his
immediate superior within which to observe his performance. This condition, however, was not
observed in this case. As aptly stated by the CSC, it is quite improbable that Mayor Jose
Miranda could finally determine the performance of respondents for only the first three months
of the probationary period.
Not only that, we find merit in respondents’ claim that they were denied due process. They cited
Item 2.2 (b), Section VI of the Omnibus Guidelines on Appointments and Other Personnel
Actions (CSC Memorandum Circular No. 38, Series of 1993, as amended by CSC Memorandum
Circular No. 12, Series of 1994) which provides:
“2.2. Unsatisfactory or Poor Performance
x x x
b. An official or employee who, for one evaluation period, is rated poor in
performance, may be dropped from the rolls after due notice. Due notice shall
mean that the officer or employee is informed in writing of the status of his
performance not later than the fourth month of that rating period with
sufficient warning that failure to improve his performance within the
remaining period of the semestershall warrant his separation from the service.
Such notice shall also contain sufficient information which shall enable the
employee to prepare an explanation.”11[11] (emphasis supplied)
Respondents vehemently assert that they were never notified in writing regarding the status of
their performance, neither were they warned that they will be dismissed from the service should
they fail to improve their performance. Significantly, petitioner did not refute respondents’
23. assertion. The records show that what respondents received was only the termination order from
Mayor Jose Miranda. Obviously, respondents’ right to due process was violated.
Moreover, respondents contend that the only reason behind their arbitrary dismissal was Mayor
Jose Miranda’s perception that they were not loyal to him, being appointees of then Acting
Mayor Navarro. This contention appears to be true considering that all those who were accepted
and screened by the PSPB during the incumbency of Acting Mayor Navarro were rated to have
performed poorly by an audit team whose three members were personally picked by Mayor Jose
Miranda.
The Constitution has envisioned the civil service to be a career service based on merit and
rewards system that will truly be accountable and responsive to the people and deserving of their
trust and support.12[12] These noble objectives will be frustrated if the tenure of its members is
subject to the whim of partisan politics. A civil servant who lives in ceaseless fear of being
capriciously removed from office every time a new political figure assumes power will strive to
do anything that pleases the latter. In this way, he will hardly develop efficiency, accountability
and a sense of loyalty to the public service. Such a climate will only breed opportunistic,
inefficient and irresponsible civil servants to the detriment of the public. This should not be
countenanced.
In fine, we hold that petitioner, not being a real party in interest, has no legal personality to file
this petition. Besides, his motion for reconsideration was validly withdrawn by the incumbent
Mayor. Even assuming he is a real party in interest, we see no reason to disturb the findings of
both the CSC and the Court of Appeals. The reinstatement of respondents who, unfortunately,
were victims of political bickerings, is in order.
WHEREFORE, the petition is DENIED. The assailed Decision dated May 21, 1999 of the
Court of Appeals in CA-G.R. SP No. 36997 is AFFIRMED.
Treble costs against petitioner.
SO ORDERED.
G.R. No. 119761 August 29, 1996
COMMISSIONER OF INTERNAL REVENUE, petitioner,
vs.
HON. COURT OF APPEALS, HON. COURT OF TAX APPEALS and FORTUNE
TOBACCO CORPORATION, respondents.
24. VITUG, J.:p
The Commissioner of Internal Revenue ("CIR") disputes the decision, dated 31 March
1995, of respondent Court of Appeals 1 affirming the 10th August 1994 decision and the
11th October 1994 resolution of the Court of Tax Appeals 2 ("CTA") in C.T.A. Case No.
5015, entitled "Fortune Tobacco Corporation vs. Liwayway Vinzons-Chato in her
capacity as Commissioner of Internal Revenue."
The facts, by and large, are not in dispute.
Fortune Tobacco Corporation ("Fortune Tobacco") is engaged in the manufacture of
different brands of cigarettes.
On various dates, the Philippine Patent Office issued to the corporation separate
certificates of trademark registration over "Champion," "Hope," and "More" cigarettes. In
a letter, dated 06 January 1987, of then Commissioner of Internal Revenue Bienvenido
A. Tan, Jr., to Deputy Minister Ramon Diaz of the Presidential Commission on Good
Government, "the initial position of the Commission was to classify 'Champion,' 'Hope,'
and 'More' as foreign brands since they were listed in the World Tobacco Directory as
belonging to foreign companies. However, Fortune Tobacco changed the names of
'Hope' to 'Hope Luxury' and 'More' to 'Premium More,' thereby removing the said brands
from the foreign brand category. 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." 3 Ad Valorem taxes were imposed on these brands, 4 at the
following rates:
BRAND AD VALOREM TAX RATE
E.O. 22 and E.O. 273 RA 6956
06-23-86 07-25-87 06-18-90
07-01-86 01-01-88 07-05-90
Hope Luxury M. 100's
Sec. 142, (c), (2) 40% 45%
Hope Luxury M. King
Sec. 142, (c), (2) 40% 45%
More Premium M. 100's
Sec. 142, (c), (2) 40% 45%
More Premium International
Sec. 142, (c), (2) 40% 45%
Champion Int'l. M. 100's
Sec. 142, (c), (2) 40% 45%
Champion M. 100's
Sec. 142, (c), (2) 40% 45%
Champion M. King
Sec. 142, (c), last par. 15% 20%
Champion Lights
Sec. 142, (c), last par. 15% 20% 5
A bill, which later became Republic Act ("RA") No. 7654, 6 was enacted, on 10
June 1993, by the legislature and signed into law, on 14 June 1993, by the
25. President of the Philippines. The new law became effective on 03 July 1993. It
amended Section 142(c)(1) of the National Internal Revenue Code ("NIRC") to
read; as follows:
Sec. 142. Cigars and Cigarettes. —
xxx xxx xxx
(c) Cigarettes packed by machine. — There shall be levied, assessed and collected on
cigarettes packed by machine a tax at the rates prescribed below based on the
constructive manufacturer's wholesale price or the actual manufacturer's wholesale price,
whichever is higher:
(1) On locally manufactured cigarettes which are currently classified and taxed at fifty-five
percent (55%) or the exportation of which is not authorized by contract or otherwise, fifty-
five (55%) provided that the minimum tax shall not be less than Five Pesos (P5.00) per
pack.
(2) On other locally manufactured cigarettes, forty-five percent (45%) provided that the
minimum tax shall not be less than Three Pesos (P3.00) per pack.
xxx xxx xxx
When the registered manufacturer's wholesale price or the actual manufacturer's
wholesale price whichever is higher of existing brands of cigarettes, including the
amounts intended to cover the taxes, of cigarettes packed in twenties does not exceed
Four Pesos and eighty centavos (P4.80) per pack, the rate shall be twenty percent
(20%). 7 (Emphasis supplied)
About a month after the enactment and two (2) days before the effectivity of RA
7654, Revenue Memorandum Circular No. 37-93 ("RMC 37-93"), was issued by
the BIR the full text of which expressed:
REPUBLIKA NG PILIPINAS
KAGAWARAN NG PANANALAPI
KAWANIHAN NG RENTAS INTERNAS
J
u
l
y
1
,
1
9
9
3
REVENUE MEMORANDUM CIRCULAR NO. 37-93
26. SUBJECT: Reclassification of Cigarettes Subject to Excise Tax
TO: All Internal Revenue Officers and Others Concerned.
In view of the issues raised on whether "HOPE," "MORE" and "CHAMPION" cigarettes
which are locally manufactured are appropriately considered as locally manufactured
cigarettes bearing a foreign brand, this Office is compelled to review the previous rulings
on the matter.
Section 142 (c)(1) National Internal Revenue Code, as amended by R.A. No. 6956,
provides:
On locally manufactured cigarettes bearing a foreign brand, fifty-five
percent (55%) Provided, That this rate shall apply regardless of whether
or not the right to use or title to the foreign brand was sold or transferred
by its owner to the local manufacturer. Whenever it has to be determined
whether or not a cigarette bears a foreign brand, the listing of brands
manufactured in foreign countries appearing in the current World
Tobacco Directory shall govern.
Under the foregoing, the test for imposition of the 55% ad valorem tax on cigarettes is
that the locally manufactured cigarettes bear a foreign brand regardless of whether or not
the right to use or title to the foreign brand was sold or transferred by its owner to the
local manufacturer. The brand must be originally owned by a foreign manufacturer or
producer. If ownership of the cigarette brand is, however, not definitely determinable, ". . .
the listing of brands manufactured in foreign countries appearing in the current World
Tobacco Directory shall govern. . . ."
"HOPE" is listed in the World Tobacco Directory as being manufactured by (a) Japan
Tobacco, Japan and (b) Fortune Tobacco, Philippines. "MORE" is listed in the said
directory as being manufactured by: (a) Fills de Julia Reig, Andorra; (b) Rothmans,
Australia; (c) RJR-Macdonald Canada; (d) Rettig-Strenberg, Finland; (e) Karellas,
Greece; (f) R.J. Reynolds, Malaysia; (g) Rothmans, New Zealand; (h) Fortune Tobacco,
Philippines; (i) R.J. Reynolds, Puerto Rico; (j) R.J. Reynolds, Spain; (k) Tabacalera,
Spain; (l) R.J. Reynolds, Switzerland; and (m) R.J. Reynolds, USA. "Champion" is
registered in the said directory as being manufactured by (a) Commonwealth
Bangladesh; (b) Sudan, Brazil; (c) Japan Tobacco, Japan; (d) Fortune Tobacco,
Philippines; (e) Haggar, Sudan; and (f) Tabac Reunies, Switzerland.
Since there is no showing who among the above-listed manufacturers of the cigarettes
bearing the said brands are the real owner/s thereof, then it follows that the same shall
be considered foreign brand for purposes of determining the ad valorem tax pursuant to
Section 142 of the National Internal Revenue Code. As held in BIR Ruling No. 410-88,
dated August 24, 1988, "in cases where it cannot be established or there is dearth of
evidence as to whether a brand is foreign or not, resort to the World Tobacco Directory
should be made."
In view of the foregoing, the aforesaid brands of cigarettes, viz: "HOPE," "MORE" and
"CHAMPION" being manufactured by Fortune Tobacco Corporation are hereby
considered locally manufactured cigarettes bearing a foreign brand subject to the 55% ad
valorem tax on cigarettes.
Any ruling inconsistent herewith is revoked or modified accordingly.
27. (SGD)
LIWAYWAY
VINZONS-
CHATO
Commissioner
On 02 July 1993, at about 17:50 hours, BIR Deputy Commissioner Victor A.
Deoferio, Jr., sent via telefax a copy of RMC 37-93 to Fortune Tobacco but it was
addressed to no one in particular. On 15 July 1993, Fortune Tobacco received,
by ordinary mail, a certified xerox copy of RMC 37-93.
In a letter, dated 19 July 1993, addressed to the appellate division of the BIR,
Fortune Tobacco requested for a review, reconsideration and recall of RMC 37-
93. The request was denied on 29 July 1993. The following day, or on 30 July
1993, the CIR assessed Fortune Tobacco for ad valorem tax deficiency
amounting to P9,598,334.00.
On 03 August 1993, Fortune Tobacco filed a petition for review with the CTA. 8
On 10 August 1994, the CTA upheld the position of Fortune Tobacco and
adjudged:
WHEREFORE, Revenue Memorandum Circular No. 37-93 reclassifying the brands of
cigarettes, viz: "HOPE," "MORE" and "CHAMPION" being manufactured by Fortune
Tobacco Corporation as locally manufactured cigarettes bearing a foreign brand subject
to the 55% ad valorem tax on cigarettes is found to be defective, invalid and
unenforceable, such that when R.A. No. 7654 took effect on July 3, 1993, the brands in
question were not CURRENTLY CLASSIFIED AND TAXED at 55% pursuant to Section
1142(c)(1) of the Tax Code, as amended by R.A. No. 7654 and were therefore still
classified as other locally manufactured cigarettes and taxed at 45% or 20% as the case
may be.
Accordingly, the deficiency ad valorem tax assessment issued on petitioner Fortune
Tobacco Corporation in the amount of P9,598,334.00, exclusive of surcharge and
interest, is hereby canceled for lack of legal basis.
Respondent Commissioner of Internal Revenue is hereby enjoined from collecting the
deficiency tax assessment made and issued on petitioner in relation to the
implementation of RMC No. 37-93.
SO ORDERED. 9
In its resolution, dated 11 October 1994, the CTA dismissed for lack of merit the
motion for reconsideration.
The CIR forthwith filed a petition for review with the Court of Appeals, questioning
the CTA's 10th August 1994 decision and 11th October 1994 resolution. On 31
March 1993, the appellate court's Special Thirteenth Division affirmed in all
respects the assailed decision and resolution.
28. In the instant petition, the Solicitor General argues: That —
I. RMC 37-93 IS A RULING OR OPINION OF THE COMMISSIONER OF
INTERNAL REVENUE INTERPRETING THE PROVISIONS OF THE
TAX CODE.
II. BEING AN INTERPRETATIVE RULING OR OPINION, THE
PUBLICATION OF RMC 37-93, FILING OF COPIES THEREOF WITH
THE UP LAW CENTER AND PRIOR HEARING ARE NOT NECESSARY
TO ITS VALIDITY, EFFECTIVITY AND ENFORCEABILITY.
III. PRIVATE RESPONDENT IS DEEMED TO HAVE BEEN NOTIFIED
OR RMC 37-93 ON JULY 2, 1993.
IV. RMC 37-93 IS NOT DISCRIMINATORY SINCE IT APPLIES TO ALL
LOCALLY MANUFACTURED CIGARETTES SIMILARLY SITUATED AS
"HOPE," "MORE" AND "CHAMPION" CIGARETTES.
V. PETITIONER WAS NOT LEGALLY PROSCRIBED FROM
RECLASSIFYING "HOPE," "MORE" AND "CHAMPION" CIGARETTES
BEFORE THE EFFECTIVITY OF R.A. NO. 7654.
VI. SINCE RMC 37-93 IS AN INTERPRETATIVE RULE, THE INQUIRY
IS NOT INTO ITS VALIDITY, EFFECTIVITY OR ENFORCEABILITY
BUT INTO ITS CORRECTNESS OR PROPRIETY; RMC 37-93 IS
CORRECT. 10
In fine, petitioner opines that RMC 37-93 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.
The Court must sustain both the appellate court and the tax court.
Petitioner stresses on the wide and ample authority of the BIR in the issuance of
rulings for the effective implementation of the provisions of the National Internal
Revenue Code. Let it be made clear that such authority of the Commissioner is
not here doubted. Like any other government agency, however, the CIR may not
disregard legal requirements or applicable principles in the exercise of its quasi-
legislative powers.
Let us first distinguish between two kinds of administrative issuances — a
legislative rule and an interpretative rule.
In Misamis Oriental Association of Coco Traders, Inc., vs. Department of Finance
Secretary, 11 the Court expressed:
. . . a legislative rule is in the nature of subordinate legislation, designed to implement a
primary legislation by providing the details thereof . In the same way that laws must have
the benefit of public hearing, it is generally required that before a legislative rule is
29. adopted there must be hearing. In this connection, the Administrative Code of 1987
provides:
Public Participation. — If not otherwise required by law, an agency shall, as far as
practicable, publish or circulate notices of proposed rules and afford interested parties the
opportunity to submit their views prior to the adoption of any rule.
(2) In the fixing of rates, no rule or final order shall be valid unless the proposed rates
shall have been published in a newspaper of general circulation at least two (2) weeks
before the first hearing thereon.
(3) In case of opposition, the rules on contested cases shall be observed.
In addition such rule must be published. On the other hand, interpretative rules are
designed to provide guidelines to the law which the administrative agency is in charge of
enforcing. 12
It should be understandable that when an administrative rule is merely
interpretative in nature, its applicability needs nothing further than its bare
issuance for it gives no real consequence more than what the law itself has
already prescribed. When, upon the other hand, 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, it behooves the agency to accord at least to those
directly affected a chance to be heard, and thereafter to be duly informed, before
that new issuance is given the force and effect of law.
A reading of RMC 37-93, particularly considering the circumstances under which
it has been issued, 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, as
amended, but has, in fact and most importantly, been made in order to place
"Hope Luxury," "Premium More" and "Champion" within the classification of
locally manufactured cigarettes bearing foreign brands and to thereby have them
covered by RA 7654. Specifically, 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. Prior to the issuance
of the questioned circular, "Hope Luxury," "Premium More," and "Champion"
cigarettes were in the category of locally manufactured cigarettes not bearing
foreign brand subject to 45% ad valorem tax. Hence, without RMC 37-93, the
enactment of RA 7654, would have had no new tax rate consequence on private
respondent's products. Evidently, in order to place "Hope Luxury," "Premium
More," and "Champion" cigarettes within the scope of the amendatory law and
subject them to an increased tax rate, the now disputed RMC 37-93 had to be
issued. In so doing, the BIR not simply intrepreted the law; verily, it legislated
under its quasi-legislative authority. The due observance of the requirements of
notice, of hearing, and of publication should not have been then ignored.
30. Indeed, the BIR itself, in its RMC 10-86, has observed and provided:
RMC NO. 10-86
Effectivity of Internal Revenue Rules and Regulations
It has been observed that one of the problem areas bearing on compliance with Internal
Revenue Tax rules and regulations is lack or insufficiency of due notice to the tax paying
public. Unless there is due notice, due compliance therewith may not be reasonably
expected. And most importantly, their strict enforcement could possibly suffer from legal
infirmity in the light of the constitutional provision on "due process of law" and the
essence of the Civil Code provision concerning effectivity of laws, whereby due notice is
a basic requirement (Sec. 1, Art. IV, Constitution; Art. 2, New Civil Code).
In order that there shall be a just enforcement of rules and regulations, in conformity with
the basic element of due process, the following procedures are hereby prescribed for the
drafting, issuance and implementation of the said Revenue Tax Issuances:
(1) This Circular shall apply only to (a) Revenue Regulations; (b)
Revenue Audit Memorandum Orders; and (c) Revenue Memorandum
Circulars and Revenue Memorandum Orders bearing on internal
revenue tax rules and regulations.
(2) Except when the law otherwise expressly provides, the aforesaid
internal revenue tax issuances shall not begin to be operative until after
due notice thereof may be fairly presumed.
Due notice of the said issuances may be fairly presumed only after the
following procedures have been taken;
xxx xxx xxx
(5) Strict compliance with the foregoing procedures is
enjoined. 13
Nothing on record could tell us that it was either impossible or impracticable for
the BIR to observe and comply with the above requirements before giving effect
to its questioned circular.
Not insignificantly, RMC 37-93 might have likewise infringed on uniformity of
taxation.
Article VI, Section 28, paragraph 1, of the 1987 Constitution mandates taxation to
be uniform and equitable. Uniformity requires that all subjects or objects of
taxation, similarly situated, are to be treated alike or put on equal footing both in
privileges and liabilities. 14 Thus, all taxable articles or kinds of property of the
same class must be taxed at the same rate 15 and the tax must operate with the
same force and effect in every place where the subject may be found.
Apparently, RMC 37-93 would only apply to "Hope Luxury," "Premium More" and
"Champion" cigarettes and, unless petitioner would be willing to concede to the
31. submission of private respondent that the circular should, as in fact my esteemed
colleague Mr. Justice Bellosillo so expresses in his separate opinion, be
considered adjudicatory in nature and thus violative of due process following the
Ang Tibay 16 doctrine, the measure suffers from lack of uniformity of taxation. In
its decision, the CTA has keenly noted that other cigarettes bearing foreign
brands have not been similarly included within the scope of the circular, such as
—
1. Locally manufactured by ALHAMBRA INDUSTRIES, INC.
(a) "PALM TREE" is listed as manufactured by office of Monopoly, Korea
(Exhibit "R")
2. Locally manufactured by LA SUERTE CIGAR and CIGARETTE COMPANY
(a) "GOLDEN KEY" is listed being manufactured by United Tobacco,
Pakistan (Exhibit "S")
(b) "CANNON" is listed as being manufactured by Alpha Tobacco,
Bangladesh (Exhibit "T")
3. Locally manufactured by LA PERLA INDUSTRIES, INC.
(a) "WHITE HORSE" is listed as being manufactured by Rothman's,
Malaysia (Exhibit "U")
(b) "RIGHT" is listed as being manufactured by SVENSKA, Tobaks,
Sweden (Exhibit "V-1")
4. Locally manufactured by MIGHTY CORPORATION
(a) "WHITE HORSE" is listed as being manufactured by Rothman's,
Malaysia (Exhibit "U-1")
5. Locally manufactured by STERLING TOBACCO CORPORATION
(a) "UNION" is listed as being manufactured by Sumatra Tobacco,
Indonesia and Brown and Williamson, USA (Exhibit "U-3")
(b) "WINNER" is listed as being manufactured by Alpha Tobacco,
Bangladesh; Nangyang, Hongkong; Joo Lan, Malaysia; Pakistan
Tobacco Co., Pakistan; Premier Tobacco, Pakistan and Haggar, Sudan
(Exhibit "U-4"). 17
The court quoted at length from the transcript of the hearing conducted on 10
August 1993 by the Committee on Ways and Means of the House of
Representatives; viz:
THE CHAIRMAN. So you have specific information on Fortune Tobacco alone. You don't
have specific information on other tobacco manufacturers. Now, there are other brands
which are similarly situated. They are locally manufactured bearing foreign brands. And
32. may I enumerate to you all these brands, which are also listed in the World Tobacco
Directory . . . Why were these brand not reclassified at 55 if your want to give a level
playing filed to foreign manufacturers?
MS. CHATO. Mr. Chairman, in fact, we have already prepared a Revenue Memorandum
Circular that was supposed to come after RMC No. 37-93 which have really named
specifically the list of locally manufactured cigarettes bearing a foreign brand for excise
tax purposes and includes all these brands that you mentioned at 55 percent except that
at that time, when we had to come up with this, we were forced to study the brands of
Hope, More and Champion because we were given documents that would indicate the
that these brands were actually being claimed or patented in other countries because we
went by Revenue Memorandum Circular 1488 and we wanted to give some rationality to
how it came about but we couldn't find the rationale there. And we really found based on
our own interpretation that the only test that is given by that existing law would be
registration in the World Tobacco Directory. So we came out with this proposed revenue
memorandum circular which we forwarded to the Secretary of Finance except that at that
point in time, we went by the Republic Act 7654 in Section 1 which amended Section
142, C-1, it said, that on locally manufactured cigarettes which are currently classified
and taxed at 55 percent. So we were saying that when this law took effect in July 3 and if
we are going to come up with this revenue circular thereafter, then I think our action
would really be subject to question but we feel that . . . Memorandum Circular Number
37-93 would really cover even similarly situated brands. And in fact, it was really because
of the study, the short time that we were given to study the matter that we could not
include all the rest of the other brands that would have been really classified as foreign
brand if we went by the law itself. I am sure that by the reading of the law, you would
without that ruling by Commissioner Tan they would really have been included in the
definition or in the classification of foregoing brands. These brands that you referred to or
just read to us and in fact just for your information, we really came out with a proposed
revenue memorandum circular for those brands. (Emphasis supplied)
(Exhibit "FF-2-C," pp. V-5 TO V-6, VI-1 to VI-3).
xxx xxx xxx
MS. CHATO. . . . But I do agree with you now that it cannot and in fact that is why I felt
that we . . . I wanted to come up with a more extensive coverage and precisely why I
asked that revenue memorandum circular that would cover all those similarly situated
would be prepared but because of the lack of time and I came out with a study of RA
7654, it would not have been possible to really come up with the reclassification or the
proper classification of all brands that are listed there. . . (emphasis supplied) (Exhibit
"FF-2d," page IX-1)
xxx xxx xxx
HON. DIAZ. But did you not consider that there are similarly situated?
MS. CHATO. That is precisely why, Sir, after we have come up with this Revenue
Memorandum Circular No. 37-93, the other brands came about the would have also
clarified RMC 37-93 by I was saying really because of the fact that I was just recently
appointed and the lack of time, the period that was allotted to us to come up with the right
actions on the matter, we were really caught by the July 3 deadline. But in fact, We have
already prepared a revenue memorandum circular clarifying with the other . . . does not
yet, would have been a list of locally manufactured cigarettes bearing a foreign brand for
33. excise tax purposes which would include all the other brands that were mentioned by the
Honorable Chairman. (Emphasis supplied) (Exhibit "FF-2-d," par. IX-4). 18
All taken, the Court is convinced that the hastily promulgated RMC 37-93 has fallen
short of a valid and effective administrative issuance.
WHEREFORE, the decision of the Court of Appeals, sustaining that of the Court of Tax
Appeals, is AFFIRMED. No costs.
SO ORDERED.
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