88
G.R. No. L-7859December 22, 1955WALTER LUTZ, as Judicial
Administrator of the Intestate Estate of the deceased Antonio Jayme
Ledesma,plaintiff-appellant,vs.J. ANTONIO ARANETA, as the Collector
of Internal Revenue,defendant-appellee.Ernesto J. Gonzaga for
appellant.Office of the Solicitor General Ambrosio Padilla, First
Assistant Solicitor General Guillermo E. Torres and Solicitor
Felicisimo R. Rosete for appellee.REYES, J.B L.,J.:This case was
initiated in the Court of First Instance of Negros Occidental to
test the legality of the taxes imposed by Commonwealth Act No. 567,
otherwise known as the Sugar Adjustment Act.Promulgated in 1940,
the law in question opens (section 1) with a declaration of
emergency, due to the threat to our industry by the imminent
imposition of export taxes upon sugar as provided in the
Tydings-McDuffe Act, and the "eventual loss of its preferential
position in the United States market"; wherefore, the national
policy was expressed "to obtain a readjustment of the benefits
derived from the sugar industry by the component elements thereof"
and "to stabilize the sugar industry so as to prepare it for the
eventuality of the loss of its preferential position in the United
States market and the imposition of the export taxes."In section 2,
Commonwealth Act 567 provides for an increase of the existing tax
on the manufacture of sugar, on a graduated basis, on each picul of
sugar manufactured; while section 3 levies on owners or persons in
control of lands devoted to the cultivation of sugar cane and ceded
to others for a consideration, on lease or otherwise a tax
equivalent to the difference between the money value of the rental
or consideration collected and the amount representing 12 per
centum of the assessed value of such land.According to section 6 of
the law SEC. 6. All collections made under this Act shall accrue to
a special fund in the Philippine Treasury, to be known as the
'Sugar Adjustment and Stabilization Fund,' and shall be paid out
only for any or all of the following purposes or to attain any or
all of the following objectives, as may be provided by law.First,
to place the sugar industry in a position to maintain itself,
despite the gradual loss of the preferntial position of the
Philippine sugar in the United States market, and ultimately to
insure its continued existence notwithstanding the loss of that
market and the consequent necessity of meeting competition in the
free markets of the world;Second, to readjust the benefits derived
from the sugar industry by all of the component elements thereof
the mill, the landowner, the planter of the sugar cane, and the
laborers in the factory and in the field so that all might continue
profitably to engage therein;lawphi1.netThird, to limit the
production of sugar to areas more economically suited to the
production thereof; andFourth, to afford labor employed in the
industry a living wage and to improve their living and working
conditions: Provided, That the President of the Philippines may,
until the adjourment of the next regular session of the National
Assembly, make the necessary disbursements from the fund herein
created (1) for the establishment and operation of sugar experiment
station or stations and the undertaking of researchers (a) to
increase the recoveries of the centrifugal sugar factories with the
view of reducing manufacturing costs, (b) to produce and propagate
higher yielding varieties of sugar cane more adaptable to different
district conditions in the Philippines, (c) to lower the costs of
raising sugar cane, (d) to improve the buying quality of denatured
alcohol from molasses for motor fuel, (e) to determine the
possibility of utilizing the other by-products of the industry, (f)
to determine what crop or crops are suitable for rotation and for
the utilization of excess cane lands, and (g) on other problems the
solution of which would help rehabilitate and stabilize the
industry, and (2) for the improvement of living and working
conditions in sugar mills and sugar plantations, authorizing him to
organize the necessary agency or agencies to take charge of the
expenditure and allocation of said funds to carry out the purpose
hereinbefore enumerated, and, likewise, authorizing the
disbursement from the fund herein created of the necessary amount
or amounts needed for salaries, wages, travelling expenses,
equipment, and other sundry expenses of said agency or
agencies.Plaintiff, Walter Lutz, in his capacity as Judicial
Administrator of the Intestate Estate of Antonio Jayme Ledesma,
seeks to recover from the Collector of Internal Revenue the sum of
P14,666.40 paid by the estate as taxes, under section 3 of the Act,
for the crop years 1948-1949 and 1949-1950; alleging that such tax
is unconstitutional and void, being levied for the aid and support
of the sugar industry exclusively, which in plaintiff's opinion is
not a public purpose for which a tax may be constitutioally levied.
The action having been dismissed by the Court of First Instance,
the plaintifs appealed the case directly to this Court (Judiciary
Act, section 17).The basic defect in the plaintiff's position is
his assumption that the tax provided for in Commonwealth Act No.
567 is a pure exercise of the taxing power. Analysis of the Act,
and particularly of section 6 (heretofore quoted in full), will
show that the tax is levied with a regulatory purpose, to provide
means for the rehabilitation and stabilization of the threatened
sugar industry. In other words, the act is primarily an exercise of
the police power.This Court can take judicial notice of the fact
that sugar production is one of the great industries of our nation,
sugar occupying a leading position among its export products; that
it gives employment to thousands of laborers in fields and
factories; that it is a great source of the state's wealth, is one
of the important sources of foreign exchange needed by our
government, and is thus pivotal in the plans of a regime committed
to a policy of currency stability. Its promotion, protection and
advancement, therefore redounds greatly to the general welfare.
Hence it was competent for the legislature to find that the general
welfare demanded that the sugar industry should be stabilized in
turn; and in the wide field of its police power, the lawmaking body
could provide that the distribution of benefits therefrom be
readjusted among its components to enable it to resist the added
strain of the increase in taxes that it had to sustain (Sligh vs.
Kirkwood, 237 U. S. 52, 59 L. Ed. 835; Johnson vs. State ex rel.
Marey, 99 Fla. 1311, 128 So. 853; Maxcy Inc. vs. Mayo, 103 Fla.
552, 139 So. 121).As stated in Johnson vs. State ex rel. Marey,
with reference to the citrus industry in Florida The protection of
a large industry constituting one of the great sources of the
state's wealth and therefore directly or indirectly affecting the
welfare of so great a portion of the population of the State is
affected to such an extent by public interests as to be within the
police power of the sovereign. (128 Sp. 857).Once it is conceded,
as it must, that the protection and promotion of the sugar industry
is a matter of public concern, it follows that the Legislature may
determine within reasonable bounds what is necessary for its
protection and expedient for its promotion. Here, the legislative
discretion must be allowed fully play, subject only to the test of
reasonableness; and it is not contended that the means provided in
section 6 of the law (above quoted) bear no relation to the
objective pursued or are oppressive in character. If objective and
methods are alike constitutionally valid, no reason is seen why the
state may not levy taxes to raise funds for their prosecution and
attainment. Taxation may be made the implement of the state's
police power (Great Atl. & Pac. Tea Co. vs. Grosjean, 301 U. S.
412, 81 L. Ed. 1193; U. S. vs. Butler, 297 U. S. 1, 80 L. Ed. 477;
M'Culloch vs. Maryland, 4 Wheat. 316, 4 L. Ed. 579).That the tax to
be levied should burden the sugar producers themselves can hardly
be a ground of complaint; indeed, it appears rational that the tax
be obtained precisely from those who are to be benefited from the
expenditure of the funds derived from it. At any rate, it is
inherent in the power to tax that a state be free to select the
subjects of taxation, and it has been repeatedly held that
"inequalities which result from a singling out of one particular
class for taxation, or exemption infringe no constitutional
limitation" (Carmichael vs. Southern Coal & Coke Co., 301 U. S.
495, 81 L. Ed. 1245, citing numerous authorities, at p. 1251).From
the point of view we have taken it appears of no moment that the
funds raised under the Sugar Stabilization Act, now in question,
should be exclusively spent in aid of the sugar industry, since it
is that very enterprise that is being protected. It may be that
other industries are also in need of similar protection; that the
legislature is not required by the Constitution to adhere to a
policy of "all or none." As ruled in Minnesota ex rel. Pearson vs.
Probate Court, 309 U. S. 270, 84 L. Ed. 744, "if the law presumably
hits the evil where it is most felt, it is not to be overthrown
because there are other instances to which it might have been
applied;" and that "the legislative authority, exerted within its
proper field, need not embrace all the evils within its reach" (N.
L. R. B. vs. Jones & Laughlin Steel Corp. 301 U. S. 1, 81 L.
Ed. 893).Even from the standpoint that the Act is a pure tax
measure, it cannot be said that the devotion of tax money to
experimental stations to seek increase of efficiency in sugar
production, utilization of by-products and solution of allied
problems, as well as to the improvements of living and working
conditions in sugar mills or plantations, without any part of such
money being channeled directly to private persons, constitutes
expenditure of tax money for private purposes, (compare Everson vs.
Board of Education, 91 L. Ed. 472, 168 ALR 1392, 1400).The decision
appealed from is affirmed, with costs against appellant. So
ordered.VALENTIN TIO doing business under the name and style of OMI
ENTERPRISES,petitioner,vs.VIDEOGRAM REGULATORY BOARD, MINISTER OF
FINANCE, METRO MANILA COMMISSION, CITY MAYOR and CITY TREASURER OF
MANILA,respondents.Nelson Y. Ng for petitioner.The City Legal
Officer for respondents City Mayor and City
Treasurer.MELENCIO-HERRERA,J.:This petition was filed on September
1, 1986 by petitioner on his own behalf and purportedly on behalf
of other videogram operators adversely affected. It assails the
constitutionality of Presidential Decree No. 1987 entitled "An Act
Creating the Videogram Regulatory Board" with broad powers to
regulate and supervise the videogram industry (hereinafter briefly
referred to as the BOARD). The Decree was promulgated on October 5,
1985 and took effect on April 10, 1986, fifteen (15) days after
completion of its publication in the Official Gazette.On November
5, 1985, a month after the promulgation of the abovementioned
decree, Presidential Decree No. 1994 amended the National Internal
Revenue Code providing,inter alia:SEC. 134.Video Tapes. There shall
be collected on each processed video-tape cassette, ready for
playback, regardless of length, an annual tax of five pesos;
Provided, That locally manufactured or imported blank video tapes
shall be subject to sales tax.On October 23, 1986, the Greater
Manila Theaters Association, Integrated Movie Producers, Importers
and Distributors Association of the Philippines, and Philippine
Motion Pictures Producers Association, hereinafter collectively
referred to as the Intervenors, were permitted by the Court to
intervene in the case, over petitioner's opposition, upon the
allegations that intervention was necessary for the complete
protection of their rights and that their "survival and very
existence is threatened by the unregulated proliferation of film
piracy." The Intervenors were thereafter allowed to file their
Comment in Intervention.The rationale behind the enactment of the
DECREE, is set out in its preambular clauses as follows:1. WHEREAS,
the proliferation and unregulated circulation of videograms
including, among others, videotapes, discs, cassettes or any
technical improvement or variation thereof, have greatly prejudiced
the operations of moviehouses and theaters, and have caused a sharp
decline in theatrical attendance by at least forty percent (40%)
and a tremendous drop in the collection of sales, contractor's
specific, amusement and other taxes, thereby resulting in
substantial losses estimated at P450 Million annually in government
revenues;2. WHEREAS, videogram(s) establishments collectively earn
around P600 Million per annum from rentals, sales and disposition
of videograms, and such earnings have not been subjected to tax,
thereby depriving the Government of approximately P180 Million in
taxes each year;3. WHEREAS, the unregulated activities of videogram
establishments have also affected the viability of the movie
industry, particularly the more than 1,200 movie houses and
theaters throughout the country, and occasioned industry-wide
displacement and unemployment due to the shutdown of numerous
moviehouses and theaters;4. "WHEREAS, in order to ensure national
economic recovery, it is imperative for the Government to create an
environment conducive to growth and development of all business
industries, including the movie industry which has an accumulated
investment of about P3 Billion;5. WHEREAS, proper taxation of the
activities of videogram establishments will not only alleviate the
dire financial condition of the movie industry upon which more than
75,000 families and 500,000 workers depend for their livelihood,
but also provide an additional source of revenue for the
Government, and at the same time rationalize the heretofore
uncontrolled distribution of videograms;6. WHEREAS, the rampant and
unregulated showing of obscene videogram features constitutes a
clear and present danger to the moral and spiritual well-being of
the youth, and impairs the mandate of the Constitution for the
State to support the rearing of the youth for civic efficiency and
the development of moral character and promote their physical,
intellectual, and social well-being;7. WHEREAS, civic-minded
citizens and groups have called for remedial measures to curb these
blatant malpractices which have flaunted our censorship and
copyright laws;8. WHEREAS, in the face of these grave emergencies
corroding the moral values of the people and betraying the national
economic recovery program, bold emergency measures must be adopted
with dispatch; ... (Numbering of paragraphs supplied).Petitioner's
attack on the constitutionality of the DECREE rests on the
following grounds:1. Section 10 thereof, which imposes a tax of 30%
on the gross receipts payable to the local government is a RIDER
and the same is not germane to the subject matter thereof;2. The
tax imposed is harsh, confiscatory, oppressive and/or in unlawful
restraint of trade in violation of the due process clause of the
Constitution;3. There is no factual nor legal basis for the
exercise by the President of the vast powers conferred upon him by
Amendment No. 6;4. There is undue delegation of power and
authority;5. The Decree is anex-post factolaw; and6. There is over
regulation of the video industry as if it were a nuisance, which it
is not.We shall consider the foregoing objections inseriatim.1. The
Constitutional requirement that "every bill shall embrace only one
subject which shall be expressed in the title thereof"1is
sufficiently complied with if the title be comprehensive enough to
include the general purpose which a statute seeks to achieve. It is
not necessary that the title express each and every end that the
statute wishes to accomplish. The requirement is satisfied if all
the parts of the statute are related, and are germane to the
subject matter expressed in the title, or as long as they are not
inconsistent with or foreign to the general subject and title.2An
act having a single general subject, indicated in the title, may
contain any number of provisions, no matter how diverse they may
be, so long as they are not inconsistent with or foreign to the
general subject, and may be considered in furtherance of such
subject by providing for the method and means of carrying out the
general object."3The rule also is that the constitutional
requirement as to the title of a bill should not be so narrowly
construed as to cripple or impede the power of legislation.4It
should be given practical rather than technical
construction.5Tested by the foregoing criteria, petitioner's
contention that the tax provision of the DECREE is a rider is
without merit. That section reads,inter alia:Section 10.Tax on
Sale, Lease or Disposition of Videograms. Notwithstanding any
provision of law to the contrary, the province shall collect a tax
of thirty percent (30%) of the purchase price or rental rate, as
the case may be, for every sale, lease or disposition of a
videogram containing a reproduction of any motion picture or
audiovisual program. Fifty percent (50%) of the proceeds of the tax
collected shall accrue to the province, and the other fifty percent
(50%) shall acrrue to the municipality where the tax is collected;
PROVIDED, That in Metropolitan Manila, the tax shall be shared
equally by the City/Municipality and the Metropolitan Manila
Commission.xxx xxx xxxThe foregoing provision is allied and germane
to, and is reasonably necessary for the accomplishment of, the
general object of the DECREE, which is the regulation of the video
industry through the Videogram Regulatory Board as expressed in its
title. The tax provision is not inconsistent with, nor foreign to
that general subject and title. As a tool for regulation6it is
simply one of the regulatory and control mechanisms scattered
throughout the DECREE. The express purpose of the DECREE to include
taxation of the video industry in order to regulate and rationalize
the heretofore uncontrolled distribution of videograms is evident
from Preambles 2 and 5,supra. Those preambles explain the motives
of the lawmaker in presenting the measure. The title of the DECREE,
which is the creation of the Videogram Regulatory Board, is
comprehensive enough to include the purposes expressed in its
Preamble and reasonably covers all its provisions. It is
unnecessary to express all those objectives in the title or that
the latter be an index to the body of the DECREE.72. Petitioner
also submits that the thirty percent (30%) tax imposed is harsh and
oppressive, confiscatory, and in restraint of trade. However, it is
beyond serious question that a tax does not cease to be valid
merely because it regulates, discourages, or even definitely deters
the activities taxed.8The power to impose taxes is one so unlimited
in force and so searching in extent, that the courts scarcely
venture to declare that it is subject to any restrictions whatever,
except such as rest in the discretion of the authority which
exercises it.9In imposing a tax, the legislature acts upon its
constituents. This is, in general, a sufficient security against
erroneous and oppressive taxation.10The tax imposed by the DECREE
is not only a regulatory but also a revenue measure prompted by the
realization that earnings of videogram establishments of around
P600 million per annum have not been subjected to tax, thereby
depriving the Government of an additional source of revenue. It is
an end-user tax, imposed on retailers for every videogram they make
available for public viewing. It is similar to the 30% amusement
tax imposed or borne by the movie industry which the theater-owners
pay to the government, but which is passed on to the entire cost of
the admission ticket, thus shifting the tax burden on the buying or
the viewing public. It is a tax that is imposed uniformly on all
videogram operators.The levy of the 30% tax is for a public
purpose. It was imposed primarily to answer the need for regulating
the video industry, particularly because of the rampant film
piracy, the flagrant violation of intellectual property rights, and
the proliferation of pornographic video tapes. And while it was
also an objective of the DECREE to protect the movie industry, the
tax remains a valid imposition.The public purpose of a tax may
legally exist even if the motive which impelled the legislature to
impose the tax was to favor one industry over another.11It is
inherent in the power to tax that a state be free to select the
subjects of taxation, and it has been repeatedly held that
"inequities which result from a singling out of one particular
class for taxation or exemption infringe no constitutional
limitation".12Taxation has been made the implement of the state's
police power.13At bottom, the rate of tax is a matter better
addressed to the taxing legislature.3. Petitioner argues that there
was no legal nor factual basis for the promulgation of the DECREE
by the former President under Amendment No. 6 of the 1973
Constitution providing that "whenever in the judgment of the
President ... , there exists a grave emergency or a threat or
imminence thereof, or whenever the interim Batasang Pambansa or the
regular National Assembly fails or is unable to act adequately on
any matter for any reason that in his judgment requires immediate
action, he may, in order to meet the exigency, issue the necessary
decrees, orders, or letters of instructions, which shall form part
of the law of the land."In refutation, the Intervenors and the
Solicitor General's Office aver that the 8th "whereas" clause
sufficiently summarizes the justification in that grave emergencies
corroding the moral values of the people and betraying the national
economic recovery program necessitated bold emergency measures to
be adopted with dispatch. Whatever the reasons "in the judgment" of
the then President, considering that the issue of the validity of
the exercise of legislative power under the said Amendment still
pends resolution in several other cases, we reserve resolution of
the question raised at the proper time.4. Neither can it be
successfully argued that the DECREE contains an undue delegation of
legislative power. The grant in Section 11 of the DECREE of
authority to the BOARD to "solicit the direct assistance of other
agencies and units of the government and deputize, for a fixed and
limited period, the heads or personnel of such agencies and units
to perform enforcement functions for the Board" is not a delegation
of the power to legislate but merely a conferment of authority or
discretion as to its execution, enforcement, and implementation.
"The true distinction is between the delegation of power to make
the law, which necessarily involves a discretion as to what it
shall be, and conferring authority or discretion as to its
execution to be exercised under and in pursuance of the law. The
first cannot be done; to the latter, no valid objection can be
made."14Besides, in the very language of the decree, the authority
of the BOARD to solicit such assistance is for a "fixed and limited
period" with the deputized agencies concerned being "subject to the
direction and control of the BOARD." That the grant of such
authority might be the source of graft and corruption would not
stigmatize the DECREE as unconstitutional. Should the eventuality
occur, the aggrieved parties will not be without adequate remedy in
law.5. The DECREE is not violative of theex post factoprinciple.
Anex post factolaw is, among other categories, one which "alters
the legal rules of evidence, and authorizes conviction upon less or
different testimony than the law required at the time of the
commission of the offense." It is petitioner's position that
Section 15 of the DECREE in providing that:All videogram
establishments in the Philippines are hereby given a period of
forty-five (45) days after the effectivity of this Decree within
which to register with and secure a permit from the BOARD to engage
in the videogram business and to register with the BOARD all their
inventories of videograms, including videotapes, discs, cassettes
or other technical improvements or variations thereof, before they
could be sold, leased, or otherwise disposed of. Thereafter any
videogram found in the possession of any person engaged in the
videogram business without the required proof of registration by
the BOARD, shall be prima facie evidence of violation of the
Decree, whether the possession of such videogram be for private
showing and/or public exhibition.raises immediately aprima
facieevidence of violation of the DECREE when the required proof of
registration of any videogram cannot be presented and thus partakes
of the nature of anex post factolaw.The argument is untenable. As
this Court held in the recent case ofVallarta vs. Court of Appeals,
et al.15... it is now well settled that "there is no constitutional
objection to the passage of a law providing that the presumption of
innocence may be overcome by a contrary presumption founded upon
the experience of human conduct, and enacting what evidence shall
be sufficient to overcome such presumption of innocence" (People
vs. Mingoa 92 Phil. 856 [1953] at 858-59, citing 1 COOLEY, A
TREATISE ON THE CONSTITUTIONAL LIMITATIONS, 639-641). And the
"legislature may enact that when certain facts have been proved
that they shall be prima facie evidence of the existence of the
guilt of the accused and shift the burden of proof provided there
be a rational connection between the facts proved and the ultimate
facts presumed so that the inference of the one from proof of the
others is not unreasonable and arbitrary because of lack of
connection between the two in common experience".16Applied to the
challenged provision, there is no question that there is a rational
connection between the fact proved, which is non-registration, and
the ultimate fact presumed which is violation of the DECREE,
besides the fact that theprima faciepresumption of violation of the
DECREE attaches only after a forty-five-day period counted from its
effectivity and is, therefore, neither retrospective in
character.6. We do not share petitioner's fears that the video
industry is being over-regulated and being eased out of existence
as if it were a nuisance. Being a relatively new industry, the need
for its regulation was apparent. While the underlying objective of
the DECREE is to protect the moribund movie industry, there is no
question that public welfare is at bottom of its enactment,
considering "the unfair competition posed by rampant film piracy;
the erosion of the moral fiber of the viewing public brought about
by the availability of unclassified and unreviewed video tapes
containing pornographic films and films with brutally violent
sequences; and losses in government revenues due to the drop in
theatrical attendance, not to mention the fact that the activities
of video establishments are virtually untaxed since mere payment of
Mayor's permit and municipal license fees are required to engage in
business.17The enactment of the Decree since April 10, 1986 has not
brought about the "demise" of the video industry. On the contrary,
video establishments are seen to have proliferated in many places
notwithstanding the 30% tax imposed.In the last analysis, what
petitioner basically questions is the necessity, wisdom and
expediency of the DECREE. These considerations, however, are
primarily and exclusively a matter of legislative concern.Only
congressional power or competence, not the wisdom of the action
taken, may be the basis for declaring a statute invalid. This is as
it ought to be. The principle of separation of powers has in the
main wisely allocated the respective authority of each department
and confined its jurisdiction to such a sphere. There would then be
intrusion not allowable under the Constitution if on a matter left
to the discretion of a coordinate branch, the judiciary would
substitute its own. If there be adherence to the rule of law, as
there ought to be, the last offender should be courts of justice,
to which rightly litigants submit their controversy precisely to
maintain unimpaired the supremacy of legal norms and prescriptions.
The attack on the validity of the challenged provision likewise
insofar as there may be objections, even if valid and cogent on its
wisdom cannot be sustained.18In fine, petitioner has not overcome
the presumption of validity which attaches to a challenged statute.
We find no clear violation of the Constitution which would justify
us in pronouncing Presidential Decree No. 1987 as unconstitutional
and void.WHEREFORE, the instant Petition is hereby dismissed.No
costs.SO ORDERED.G.R. No. L-25043 April 26, 1968ANTONIO 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.To manage the above-mentioned
properties, said children, namely, Antonio Roxas, Eduardo Roxas and
Jose Roxas, formed a partnership called Roxas y
Compania.AGRICULTURAL LANDSAt 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 HOUSEDuring 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.ASSESSMENTSOn 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.In the same assessment, the Commissioner assessed
deficiency income taxes against the Roxas Brothers for the years
1953 and 1955, as follows:19531955
Antonio RoxasP7,010.00P5,813.00
Eduardo Roxas7,281.005,828.00
Jose Roxas6,323.005,588.00
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. OsmeaP 40.00
Gifts of San Miguel beer28.00
Contributions to
Philippine Air Force Chapel100.00
Manila Police Trust Fund150.00
Philippines Herald's fund for Manila's neediest
families100.00
1955
Contributions to Contribution to Our Lady of Fatima Chapel,
FEU50.00
ANTONIO ROXAS:
1953
Contributions to
Pasay City Firemen Christmas Fund25.00
Pasay City Police Dept. X'mas fund50.00
1955
Contributions to
Baguio City Police Christmas fund25.00
Pasay City Firemen Christmas fund25.00
Pasay City Police Christmas fund50.00
EDUARDO ROXAS:
1953
Contributions to
Hijas de Jesus' Retiro de Manresa450.00
Philippines Herald's fund for Manila's neediest
families100.00
1955
Contributions to Philippines Herald's fund for Manila's neediest
families120.00
JOSE ROXAS:
1955
Contributions to Philippines Herald's fund for Manila's neediest
families120.00
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.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.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 DEDUCTIONSRoxas 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.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:1wph1.t. . . "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 oras 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.1wph1.tTo 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 returnP315,476.59
Add: 1/3 share, profits in Roxas y Cia.P 153,249.15
Less amount declared146,135.46
Amount understatedP 7,113.69
Contributions disallowed115.00
P 7,228.69
Less 1/3 share of contributions amounting to P21,126.06
disallowed from partnership but allowed to
partners7,042.02186.67
Net income per review
P315,663.26
Less: Exemptions4,200.00
Net taxable incomeP311,463.26
Tax due154,169.00
Tax paid154,060.00
DeficiencyP 109.00==========
EDUARDO ROXAS
Net income per returnP 304,166.92
Add: 1/3 share, profits in Roxas y CiaP 153,249.15
Less profits declared146,052.58
Amount understatedP 7,196.57
Less 1/3 share in contributions amounting to P21,126.06
disallowed from partnership but allowed to
partners7,042.02155.55
Net income per review
P304,322.47
Less: Exemptions4,800.00
Net taxable incomeP299,592.47
Tax DueP147,250.00
Tax paid147,159.00
DeficiencyP91.00===========
JOSE ROXAS
Net income per returnP222,681.76
Add: 1/3 share, profits in Roxas y Cia.P153,429.15
Less amount reported146,135.46
Amount understated7,113.69
Less 1/3 share of contributions disallowed from partnership but
allowed as deductions to partners7,042.0271.67
Net income per review
P222,753.43
Less: Exemption1,800.00
Net income subject to taxP220,953.43
Tax dueP102,763.00
Tax paid102,714.00
DeficiencyP 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.G.R. No. L- 41383 August
15, 1988PHILIPPINE AIRLINES, INC.,plaintiff-appellant,vs.ROMEO F.
EDU in his capacity as Land Transportation Commissioner, and UBALDO
CARBONELL, in his capacity as National
Treasurer,defendants-appellants.Ricardo V. Puno, Jr. and Conrado A.
Boro for plaintiff-appellant.GUTIERREZ, JR.,J.:What is the nature
of motor vehicle registration fees? Are they taxes or regulatory
fees?This question has been brought before this Court in the past.
The parties are, in effect, asking for a re-examination of the
latest decision on this issue.This appeal was certified to us as
one involving a pure question of law by the Court of Appeals in a
case where the then Court of First Instance of Rizal dismissed the
portion-about complaint for refund of registration fees paid under
protest.The disputed registration fees were imposed by the
appellee, Commissioner Romeo F. Elevate pursuant to Section 8,
Republic Act No. 4136, otherwise known as the Land Transportation
and Traffic Code.The Philippine Airlines (PAL) is a corporation
organized and existing under the laws of the Philippines and
engaged in the air transportation business under a legislative
franchise, Act No. 42739, as amended by Republic Act Nos. 25). and
269.1 Under its franchise, PAL is exempt from the payment of taxes.
The pertinent provision of the franchise provides as
follows:Section 13. In consideration of the franchise and rights
hereby granted, the grantee shall pay to the National Government
during the life of this franchise a tax of two per cent of the
gross revenue or gross earning derived by the grantee from its
operations under this franchise. Such tax shall be due and payable
quarterly and shall be in lieu of all taxes of any kind, nature or
description, levied, established or collected by any municipal,
provincial or national automobiles, Provided, that if, after the
audit of the accounts of the grantee by the Commissioner of
Internal Revenue, a deficiency tax is shown to be due, the
deficiency tax shall be payable within the ten days from the
receipt of the assessment. The grantee shall pay the tax on its
real property in conformity with existing law.On the strength of an
opinion of the Secretary of Justice (Op. No. 307, series of 1956)
PAL has, since 1956, not been paying motor vehicle registration
fees.Sometime in 1971, however, appellee Commissioner Romeo F.
Elevate issued a regulation requiring all tax exempt entities,
among them PAL to pay motor vehicle registration fees.Despite PAL's
protestations, the appellee refused to register the appellant's
motor vehicles unless the amounts imposed under Republic Act 4136
were paid. The appellant thus paid, under protest, the amount of
P19,529.75 as registration fees of its motor vehicles.After paying
under protest, PAL through counsel, wrote a letter dated May
19,1971, to Commissioner Edu demanding a refund of the amounts
paid, invoking the ruling inCalalang v. Lorenzo(97 Phil. 212
[1951]) where it was held that motor vehicle registration fees are
in reality taxes from the payment of which PAL is exempt by virtue
of its legislative franchise.Appellee Edu denied the request for
refund basing his action on the decision inRepublic v. Philippine
Rabbit Bus Lines, Inc., (32 SCRA 211, March 30, 1970) to the effect
that motor vehicle registration fees are regulatory exceptional.
and not revenue measures and, therefore, do not come within the
exemption granted to PAL? under its franchise. Hence, PAL filed the
complaint against Land Transportation Commissioner Romeo F. Edu and
National Treasurer Ubaldo Carbonell with the Court of First
Instance of Rizal, Branch 18 where it was docketed as Civil Case
No. Q-15862.Appellee Romeo F. Elevate in his capacity as LTC
Commissioner, and LOI Carbonell in his capacity as National
Treasurer, filed a motion to dismiss alleging that the complaint
states no cause of action. In support of the motion to dismiss,
defendants repatriation the ruling inRepublic v. Philippine Rabbit
Bus Lines, Inc., (supra)that registration fees of motor vehicles
are not taxes, but regulatory fees imposed as an incident of the
exercise of the police power of the state. They contended that
while Act 4271 exempts PAL from the payment of any tax except two
per cent on its gross revenue or earnings, it does not exempt the
plaintiff from paying regulatory fees, such as motor vehicle
registration fees. The resolution of the motion to dismiss was
deferred by the Court until after trial on the merits.On April 24,
1973, the trial court rendered a decision dismissing the
appellant's complaint "moved by the later ruling laid down by the
Supreme Court in the case orRepublic v. Philippine Rabbit Bus
Lines, Inc.,(supra)." From this judgment, PAL appealed to the Court
of Appeals which certified the case to us.Calalang v. Lorenzo
(supra)andRepublic v. Philippine Rabbit Bus Lines, Inc.
(supra)cited by PAL and Commissioner Romeo F. Edu respectively,
discuss the main points of contention in the case at bar.Resolving
the issue in thePhilippine Rabbitcase, this Court held:"The
registration fee which defendant-appellee had to pay was imposed by
Section 8 of the Revised Motor Vehicle Law (Republic Act No. 587
[1950]). Its heading speaks of "registration fees." The term is
repeated four times in the body thereof. Equally so, mention is
made of the "fee for registration." (Ibid., Subsection G) A
subsection starts with a categorical statement "No fees shall be
charged." (lbid.,Subsection H) The conclusion is difficult to
resist therefore that the Motor Vehicle Act requires the payment
not of a tax but of a registration fee under the police power.
Hence the incipient, of the section relied upon by
defendant-appellee under the Back Pay Law, It is not held liable
for a tax but for a registration fee. It therefore cannot make use
of a backpay certificate to meet such an obligation.Any vestige of
any doubt as to the correctness of the above conclusion should be
dissipated by Republic Act No. 5448. ([1968]. Section 3 thereof as
to the imposition of additional tax on privately-owned passenger
automobiles, motorcycles and scooters was amended by Republic Act
No. 5470 which is (sic) approved on May 30, 1969.) A special
science fund was thereby created and its title expressly sets forth
that a tax on privately-owned passenger automobiles, motorcycles
and scooters was imposed. The rates thereof were provided for in
its Section 3 which clearly specifies the" Philippine tax."(Cooley
to be paid as distinguished from the registration fee under the
Motor Vehicle Act. There cannot be any clearer expression therefore
of the legislative will, even on the assumption that the earlier
legislation could by subdivision the point be susceptible of the
interpretation that a tax rather than a fee was levied. What is
thus most apparent is that where the legislative body relies on its
authority to tax it expressly so states, and where it is enacting a
regulatory measure, it is equally exploded (at p. 22,1969In direct
refutation is the ruling inCalalang v. Lorenzo (supra), where the
Court, on the other hand, held:The charges prescribed by the
Revised Motor Vehicle Law for the registration of motor vehicles
are in section 8 of that law called "fees". But the appellation is
no impediment to their being considered taxes if taxes they really
are. For not the name but the object of the charge determines
whether it is a tax or a fee. Geveia speaking, taxes are for
revenue, whereas fees are exceptional. for purposes of regulation
and inspection and are for that reason limited in amount to what is
necessary to cover the cost of the services rendered in that
connection. Hence, a charge fixed by statute for the service to be
person,-When by an officer, where the charge has no relation to the
value of the services performed and where the amount collected
eventually finds its way into the treasury of the branch of the
government whose officer or officers collected the chauffeur, is
not a fee but a tax."(Cooley on Taxation, Vol. 1, 4th ed., p.
110.)From the data submitted in the court below, it appears that
the expenditures of the Motor Vehicle Office are but a small
portionabout 5 per centumof the total collections from motor
vehicle registration fees. And as proof that the money collected is
not intended for the expenditures of that office, the law itself
provides that all such money shall accrue to the funds for the
construction and maintenance of public roads, streets and bridges.
It is thus obvious that the fees are not collected for regulatory
purposes, that is to say, as an incident to the enforcement of
regulations governing the operation of motor vehicles on public
highways, for their express object is to provide revenue with which
the Government is to discharge one of its principal functionsthe
construction and maintenance of public highways for everybody's
use. They are veritable taxes, not merely fees.As a matter of fact,
the Revised Motor Vehicle Law itself now regards those fees as
taxes, for it provides that "no other taxes or fees than those
prescribed in this Act shall be imposed," thus implying that the
charges therein imposedthough called feesare of the category of
taxes. The provision is contained in section 70, of subsection (b),
of the law, as amended by section 17 of Republic Act 587, which
reads:Sec. 70(b) No other taxes or fees than those prescribed in
this Act shall be imposed for the registration or operation or on
the ownership of any motor vehicle, or for the exercise of the
profession of chauffeur, by any municipal corporation, the
provisions of any city charter to the contrary
notwithstanding:Provided, however, That any provincial board, city
or municipal council or board, or other competent authority may
exact and collect such reasonable and equitable toll fees for the
use of such bridges and ferries, within their respective
jurisdiction, as may be authorized and approved by the Secretary of
Public Works and Communications, and also for the use of such
public roads, as may be authorized by the President of the
Philippines upon the recommendation of the Secretary of Public
Works and Communications, but in none of these cases, shall any
toll fee." be charged or collected until and unless the approved
schedule of tolls shall have been posted levied, in a conspicuous
place at such toll station. (at pp. 213-214)Motor vehicle
registration fees were matters originally governed by the Revised
Motor Vehicle Law (Act 3992 [19511) as amended by Commonwealth Act
123 and Republic Acts Nos. 587 and 1621.Today, the matter is
governed by Rep. Act 4136 [1968]), otherwise known as the Land
Transportation Code, (as amended by Rep. Acts Nos. 5715 and 64-67,
P.D. Nos. 382, 843, 896, 110.) and BP Blg. 43, 74 and 398).Section
73 of Commonwealth Act 123 (which amended Sec. 73 of Act 3992 and
remained unsegregated, by Rep. Act Nos. 587 and 1603)
states:Section 73. Disposal of moneys collected.Twenty per centum
of the money collected under the provisions of this Act shall
accrue to the road and bridge funds of the different provinces and
chartered cities in proportion to the centum shall during the next
previous year and the remaining eighty per centum shall be
deposited in the Philippine Treasury to create a special fund for
the construction and maintenance of national and provincial roads
and bridges. as well as the streets and bridges in the chartered
cities to be alloted by the Secretary of Public Works and
Communications for projects recommended by the Director of Public
Works in the different provinces and chartered cities.
....Presently, Sec. 61 of the Land Transportation and Traffic Code
provides:Sec. 61. Disposal of Mortgage. CollectedMonies collected
under the provisions of this Act shall be deposited in a special
trust account in the National Treasury to constitute the Highway
Special Fund, which shall be apportioned and expended in accordance
with the provisions of the" Philippine Highway Act of 1935.
"Provided, however, That the amount necessary to maintain and equip
the Land Transportation Commission but not to exceed twenty per
cent of the total collection during one year, shall be set aside
for the purpose. (As amended by RA 64-67, approved August 6,
1971).It appears clear from the above provisions that the
legislative intent and purpose behind the law requiring owners of
vehicles to pay for their registration is mainly to raise funds for
the construction and maintenance of highways and to a much lesser
degree, pay for the operating expenses of the administering agency.
On the other hand, thePhilippine Rabbitcase mentions a presumption
arising from the use of the term "fees," which appears to have been
favored by the legislature to distinguish fees from other taxes
such as those mentioned in Section 13 of Rep. Act 4136 which
reads:Sec. 13. Payment of taxes upon registration.No original
registration of motor vehicles subject to payment of taxes, customs
s duties or other charges shall be accepted unless proof of payment
of the taxes due thereon has been presented to the
Commission.referring to taxes other than those imposed on the
registration, operation or ownership of a motor vehicle (Sec. 59,
b, Rep. Act 4136, as amended).Fees may be properly regarded as
taxes even though they also serve as an instrument of regulation,
As stated by a former presiding judge of the Court of Tax Appeals
and writer on various aspects of taxpayersIt is possible for an
exaction to be both tax arose. regulation. License fees are
changes. looked to as a source of revenue as well as a means of
regulation (Sonzinky v. U.S., 300 U.S. 506) This is true, for
example, of automobile license fees. Isabela such case, the fees
may properly be regarded as taxes even though they also serve as an
instrument of regulation. If the purpose is primarily revenue, or
if revenue is at least one of the real and substantial purposes,
then the exaction is properly called a tax. (1955 CCH Fed. tax
Course, Par. 3101, citing Cooley on Taxation (2nd Ed.) 592, 593;
Calalang v. Lorenzo. 97 Phil. 213-214) Lutz v. Araneta 98 Phil.
198.) These exactions are sometimes called regulatory taxes. (See
Secs. 4701, 4711, 4741, 4801, 4811, 4851, and 4881, U.S. Internal
Revenue Code of 1954, which classify taxes on tobacco and alcohol
as regulatory taxes.) (Umali, Reviewer in Taxation, 1980, pp.
12-13, citing Cooley on Taxation, 2nd Edition, 591-593).Indeed,
taxation may be made the implement of the state's police power
(Lutz v. Araneta, 98 Phil. 148).If the purpose is primarily
revenue, or if revenue is, at least, one of the real and
substantial purposes, then the exaction is properly called a tax
(Umali, Id.) Such is the case of motor vehicle registration fees.
The conclusions become inescapable in view of Section 70(b) of Rep.
Act 587 quoted in theCalalangcase. The same provision appears as
Section 591-593). in the Land Transportation code. It is patent
therefrom that the legislators had in mind a regulatory tax as the
law refers to the imposition on the registration, operation or
ownership of a motor vehicle as a "tax or fee." Though nowhere in
Rep. Act 4136 does the law specifically state that the imposition
is a tax, Section 591-593). speaks of "taxes." or fees ... for the
registration or operation or on the ownership of any motor vehicle,
or for the exercise of the profession of chauffeur ..." making the
intent to impose a tax more apparent. Thus, even Rep. Act 5448
cited by the respondents, speak of an "additional" tax," where the
law could have referred to an original tax and not onein additionto
the tax already imposed on the registration, operation, or
ownership of a motor vehicle under Rep. Act 41383. Simply put, if
the exaction under Rep. Act 4136 were merely a regulatory fee, the
imposition in Rep. Act 5448 need not be an "additional" tax. Rep.
Act 4136 also speaks of other "fees," such as the special permit
fees for certain types of motor vehicles (Sec. 10) and additional
fees for change of registration (Sec. 11). These are not to be
understood as taxes because such fees are very minimal to be
revenue-raising. Thus, they are not mentioned by Sec. 591-593). of
the Code as taxes like the motor vehicle registration fee and
chauffers' license fee. Such fees are to go into the expenditures
of the Land Transportation Commission as provided for in the last
proviso of see. 61, aforequoted.It is quite apparent that vehicle
registration fees were originally simple exceptional. intended only
for rigidly purposes in the exercise of the State's police powers.
Over the years, however, as vehicular traffic exploded in number
and motor vehicles became absolute necessities without which modem
life as we know it would stand still, Congress found the
registration of vehicles a very convenient way of raising much
needed revenues. Without changing the earlier deputy. of
registration payments as "fees," their nature has become that of
"taxes."In view of the foregoing, we rule that motor vehicle
registration fees as at present exacted pursuant to the Land
Transportation and Traffic Code are actually taxes intended for
additional revenues. of government even if one fifth or less of the
amount collected is set aside for the operating expenses of the
agency administering the program.May the respondent administrative
agency be required to refund the amounts stated in the complaint of
PAL?The answer is NO.The claim for refund is made for payments
given in 1971. It is not clear from the records as to what payments
were made in succeeding years. We have ruled that Section 24 of
Rep. Act No. 5448 dated June 27, 1968, repealed all earlier tax
exemptions Of corporate taxpayers found in legislative franchises
similar to that invoked by PAL in this case.InRadio Communications
of the Philippines, Inc. v. Court of Tax Appeals,et al.(G.R. No.
615)." July 11, 1985), this Court ruled:Under its original
franchise, Republic Act No. 21); enacted in 1957, petitioner Radio
Communications of the Philippines, Inc., was subject to both the
franchise tax and income tax. In 1964, however, petitioner's
franchise was amended by Republic Act No. 41-42). to the effect
that its franchise tax of one and one-half percentum (1-1/2%) of
all gross receipts was provided as "in lieu of any and all taxes of
any kind, nature, or description levied, established, or collected
by any authority whatsoever, municipal, provincial, or national
from which taxes the grantee is hereby expressly exempted." The
issue raised to this Court now is the validity of the respondent
court's decision which ruled that the exemption under Republic Act
No. 41-42). was repealed by Section 24 of Republic Act No. 5448
dated June 27, 1968 which reads:"(d) The provisions of existing
special or general laws to the contrary notwithstanding, all
corporate taxpayers not specifically exempt under Sections 24 (c)
(1) of this Code shall pay the rates provided in this section. All
corporations, agencies, or instrumentalities owned or controlled by
the government, including the Government Service Insurance System
and the Social Security System but excluding educational
institutions, shall pay such rate of tax upon their taxable net
income as are imposed by this section upon associations or
corporations engaged in a similar business or industry. "An
examination of Section 24 of the Tax Code as amended shows clearly
that the law intended all corporate taxpayers to payincome taxas
provided by the statute. There can be no doubt as to the power of
Congress to repeal the earlier exemption it granted. Article XIV,
Section 8 of the 1935 Constitution and Article XIV, Section 5 of
the Constitution as amended in 1973 expressly provide that no
franchise shall be granted to any individual, firm, or corporation
except under the condition that it shall be subject to amendment,
alteration, or repeal by the legislature when the public interest
so requires. There is no question as to the public interest
involved. The country needs increased revenues. The repealing
clause is clear and unambiguous. There is a listing of entities
entitled to tax exemption. The petitioner is not covered by the
provision. Considering the foregoing, the Court Resolved to DENY
the petition for lack of merit. The decision of the respondent
court is affirmed.Any registration fees collected between June 27,
1968 and April 9, 1979, were correctly imposed because the tax
exemption in the franchise of PAL was repealed during the period.
However, an amended franchise was given to PAL in 1979. Section 13
of Presidential Decree No. 1590, now provides:In consideration of
the franchise and rights hereby granted, the grantee shall pay to
the Philippine Government during the lifetime of this franchise
whichever of subsections (a) and (b) hereunder will result in a
lower taxes.)(a) The basic corporate income tax based on the
grantee's annual net taxable income computed in accordance with the
provisions of the Internal Revenue Code; or(b) A franchise tax of
two per cent (2%) of the gross revenues. derived by the grantees
from all specific. without distinction as to transport or
nontransport corporations; provided that with respect to
international airtransport service, only the gross passengers,
mail, and freight revenues. from its outgoing flights shall be
subject to this law.The tax paid by the grantee under either of the
above alternatives shall be in lieu of all other taxes, duties,
royalties, registration, license and other fees and charges of any
kind, nature or description imposed, levied, established, assessed,
or collected by any municipal, city, provincial, or national
authority or government, agency, now or in the future, including
but not limited to the following:xxx xxx xxx(5) All taxes, fees and
other charges on the registration, license, acquisition, and
transfer of airtransport equipment, motor vehicles, and all other
personal or real property of the gravitates (Pres. Decree 1590, 75
OG No. 15, 3259, April 9, 1979).PAL's current franchise is clear
and specific. It has removed the ambiguity found in the earlier
law. PAL is now exempt from the payment of any tax, fee, or other
charge on the registration and licensing of motor vehicles. Such
payments are already included in the basic tax or franchise tax
provided in Subsections (a) and (b) of Section 13, P.D. 1590, and
may no longer be exacted.WHEREFORE, the petition is hereby
partially GRANTED. The prayed for refund of registration fees paid
in 1971 is DENIED. The Land Transportation Franchising and
Regulatory Board (LTFRB) is enjoined functions-the collecting any
tax, fee, or other charge on the registration and licensing of the
petitioner's motor vehicles from April 9, 1979 as provided in
Presidential Decree No. 1590.SO ORDERED..R. No. L-20462 June 30,
1965CALTEX (PHILIPPINES), INC.,petitioner-appellant,vs.COMMISSIONER
OF INTERNAL REVENUE,respondent-appellee.Ross, Selph and Carrascoso
for petitioner-appellant.Office of the Solicitor General for
respondent-appellee.REYES,J.B.L. J.:Appeal from a resolution of the
Court of Tax Appeals in its CTA Case No. 966, dismissing, without
prejudice, the petition for review of herein petitioner-appellant,
Caltex (Philippines) Inc., seeking a refund of P6,110.00 (later
reduced to P5,781.68 as per amended petition for review dated June
11, 1962) representing its payments of special import tax imposed
on its importations from abroad of various items of machinery,
equipment, accessories and spare parts, of which it claims to be
exempt, pursuant to Section 6 of Republic Act No. 1394.On 9
November 1960, Caltex (Philippines) Inc., filed in the Tax Court
its petition for review against respondent Commissioner of Internal
Revenue in the Court of Appeals, alleging,inter alia, that it is a
domestic corporation and holder of a petroleum refining concession
under Republic Act No. 387; that it is engaged in a productive
enterprise in which it has employed substantial amounts of capital
and labor in connection with the refining, storage, handling and
distribution of petroleum products; that on several occasions in
1958 and 1959 it imported from abroad various items of machinery,
equipment, accessories, and spare parts for use of its depots or
installations and in the gasoline service stations; that the
Collector of Customs of Manila levied and collected in the
aforesaid importations the special import tax imposed by Republic
Act No. 1394, and included said tax in landed costs of the imported
merchandise for the purpose of computing the compensating tax due
thereon under Section 190 of the National Internal Revenue Code and
for which it (petitioner) paid the corresponding special import tax
and compensating tax so computed and imposed; that the aforesaid
importations were not subject to special import tax because Section
6 of Republic Act No. 1394 exempts from said tax "machinery,
equipment, accessories and spare parts for the use of industries;
that the inclusion and imposition of said special import tax in the
landed costs of the imported merchandise for purposes of computing
the compensating tax due thereon was erroneous, and, as a
consequence thereof, it (petitioner) overpaid compensating taxes in
the total sum of P5,781.68; that it (petitioner) filed claims for
refund with respondent Commissioner of Internal Revenue on the said
overpaid compensating taxes, and until the petition was filed
respondent has failed to refund said amount, nor has he denied its
claims for refund; and that because the two-year prescriptive
period for recovery of internal revenue taxes illegally or
erroneously collected as provided in Section 306 of the National
Internal Revenue Code will soon expire, it was constrained to file
the instant petition while awaiting respondent's decision in its
claim for refund to protect its interests. Petitioner prays that
respondent Commissioner of Internal Revenue be ordered to refund
the total sum of P5,781.68 paid by it as excess compensating
taxes.Although on 27 December 1960 respondent Commissioner of
Internal Revenue answered the petition for review substantially
denying the material allegations thereof, the facts alleged by
petitioner are uncontroverted. At the hearing, petitioner submitted
evidence that it filed protests with the Collector of Customs of
Manila against the imposition of the tax in question over its
importations, that the earliest liquidation of its several
importations was made on 13 November 1958; and that, on 28 April
1960 and 4 November 1960, respectively, it filed claims for refund
of the disputed tax with respondent Commissioner of Internal
Revenue. It was established, however, that when the petition for
review was commenced in the Tax Court on 9 November 1960, there had
been no action yet by the Collector of Customs of Manila on the
protests of petitioner Caltex, nor has there been any decision on
its claim for refund.Respondent did not present any evidence. After
the parties filed their respective memorandums, the case was
submitted for decision.As stated in the beginning of this opinion,
the lower court dismissed the petition for review, without
prejudice, reasoning out that:Petitioner filed protests against the
levy and collection by the Collector of Customs of Manila of the
special import tax in question, but it does not appear that the
question has been finally resolved by the customs authorities.The
question in regard to the exemption of petitioner from or liability
for the special import tax is a matter falling within the
jurisdiction of the Bureau of Customs and not of the Bureau of
Internal Revenue. Until and after the question in regard to the
special import tax is resolved, the legality or correctness of the
compensating tax collected on said merchandise cannot be
determined. (Resolution, pages 85-86, CTA Record).Petitioner filed
a motion to reconsider said resolution, but the lower court denied
it; hence, the present appeal.It is first contended by petitioner
that the special import tax imposed by Republic Act No. 1394 is an
internal revenue tax, and, as such, a claim for refund of taxes so
erroneously or illegally levied and collected by the Collector of
Customs pursuant to said law should be lodged with the Commissioner
of Internal Revenue and not with the Commissioner of Customs.
Petitioner argues that the Customs head and his subordinates are
merely agents of the Revenue Commissioner in the collection of
national internal revenue on imported articles (Section 6, National
Internal Revenue Code) ; and that per Customs regulations, "protest
against the payment of internal revenue taxes on imported
merchandise shall, if filed with the Collector of Customs, be
transmitted directly to the Collector of Internal Revenue for
action in accordance with the provisions of the National Internal
Revenue Code" (Par. V, first sentence, Customs Administrative Order
No. 226, dated December 3, 1957; 54 O.G. 301).Petitioner's
contention is not well-taken. In the guise of a demand for
reimbursement of compensating taxes, petitioner's case is actually
one for exemption from the special import tax under Republic Act
No. 1394.Since Section 4 of Republic Act No. 1394 provides that:The
special import tax shall be paid by the importer to the Bureau of
Customs in accordance with the regulations to be promulgated by the
Department of Finance and prior to the release of the imported
goods, articles or products from customs custody.and it being
undisputed that the Special Import Tax Law (Republic Act No. 1394)
is one of the laws administered by the Bureau of Customs, it is
evident that said law should be considered as customs law, to which
the section of Customs Administrative Order No. 226 (invoked by
Caltex) does not apply, since the section, by its terms, refers
only to internal revenue taxes.Disposing of a practically identical
issue raised in another case, this Court, speaking through Mr.
Justice Labrador, held:It is also contended that the Internal
Revenue Law, especially the provisions thereof imposing the advance
sales tax under Section 183 (b), does not fall within the
jurisdiction of the Bureau of Customs for the reason that when the
Bureau of Customs collects the advance sales tax it does so as
deputies of the Collector of Internal Revenue. It is argued as a
consequence therefrom that the undervaluation of the onions may not
be considered as a violation of the customs laws or the laws and
regulations enforced by said bureau. There is no merit in this
contention. The law considers as customs law all laws and
regulations subject to enforcement by the Bureau of Customs,
thus:"Customs Law" includes not only the provisions of the Customs
Law and regulations pursuant thereto but all other laws and
regulations which are subject to enforcement by the Bureau of
Customs or otherwise within its jurisdiction. (Section 1419, last
paragraph, Revised Administrative Code; now, Section 3514, 10th
paragraph, Tariff and Customs Code. (Leuterio vs. Commissioner of
Customs, G.R. No. L-9810, April 27, 1957; 53 O. G. 6520)Having
arrived at the foregoing conclusion, and since the Bureau of
Customs has jurisdiction over the special import tax in question
(See also Section 602 (a) and (j) of the Tariff and Customs Code),
it also follows, as a logical consequence thereof, that any issue
involving liability for, or exemption from, said tax as well as the
procedure on protests and appeals should be governed by the
pertinent provisions of the Tariff and Customs Code (Republic Act
No. 1937), more specifically Sections 2308 to 2313 thereof. In
fact, these provisions had been implemented by Customs
Administrative Order No. 226, dated December 3, 1957 (published in
54 O.G. 300-302), in which the special import tax is enumerated as
among those to be governed by said customs order.It is also
undisputed that the Collector of Customs of Manila has not yet
acted upon the protests of petitioner. Hence, there is no adverse
ruling from which an appeal may be taken to the Commissioner of
Customs in accordance with Section 2313 of the Tariff and Customs
Code. Likewise, there is no decision or ruling of the Commissioner
of Customs which may be appealed to the Court of Tax Appeals,
pursuant to Section 7(2) of Republic Act No. 1125 in relation to
Section 2402 of Republic Act No. 1937, both of which read SEC.
7.Jurisdiction. The Court of Tax Appeals shall exercise exclusive
appellate jurisdiction to review by appeal, as herein provided x x
x x x x x x x(2) Decisions of the Commissioner of Customs in cases
involving liability for customs duties, fees or other money
charger; seizure, detention or release of property affected; fines
forfeitures or other penalties imposed in relation thereto; or
other matters arising under the Customs Law or other law or part of
law administered by the Bureau of Customs; (Republic Act No.
1125)SEC. 2402.Review by Court of Tax Appeals. The party aggrieved
by a ruling of the Commissioner on any matter brought before him
upon protest or by his action or ruling in any case of seizure may
appeal to the Court of Tax Appeals, in the manner and within the
period prescribed by laws and regulations. (first paragraph,
Republic Act No. 1937)In the absence of any decision or ruling
which may be the subject of an appeal or petition for review to the
Court of Tax Appeals, said court has no case to take cognizance of
(See CNS Estate, Inc. vs. Commissioner of Customs, G.R. No.
L-18773, January 31, 1964). So that the lower court correctly
dismissed the petition for review of petitioner for being premature
or for not stating a cause of action.WHEREFORE, the resolution
appealed from should be, as it is hereby affirmed. Costs against
petitioner-appellant Caltex (Philippines), Inc.FRANCISCO I.
CHAVEZ,petitioner,vs.JAIME B. ONGPIN, in his capacity as Minister
of Finance and FIDELINA CRUZ, in her capacity as Acting Municipal
Treasurer of the Municipality of Las Pias, respondents, REALTY
OWNERS ASSOCIATION OF THE PHILIPPINES,
INC.,petitioner-intervenor.Brotherhood of Nationalistic, Involved
and Free Attorneys to Combat Injustice and Oppression (Bonifacio)
for petitioner.Ambrosia Padilla, Mempin and Reyes Law Offices for
movant Realty Owners Association.MEDIALDEA,J.:The petition seeks to
declare unconstitutional Executive Order No. 73 dated November 25,
1986, which We quote in full, as follows (78 O.G. 5861):EXECUTIVE
ORDER No. 73PROVIDING FOR THE COLLECTION OF REAL PROPERTY TAXES
BASED ON THE 1984 REAL PROPERTY VALUES, AS PROVIDED FOR UNDER
SECTION 21 OF THE REAL PROPERTY TAX CODE, AS AMENDEDWHEREAS, the
collection of real property taxes is still based on the 1978
revision of property values;WHEREAS, the latest general revision of
real property assessments completed in 1984 has rendered the 1978
revised values obsolete;WHEREAS, the collection of real property
taxes based on the 1984 real property values was deferred to take
effect on January 1, 1988 instead of January 1, 1985, thus
depriving the local government units of an additional source of
revenue;WHEREAS, there is an urgent need for local governments to
augment their financial resources to meet the rising cost of
rendering effective services to the people;NOW, THEREFORE, I.
CORAZON C. AQUINO, President of the Philippines, do hereby
order:SECTION 1. Real property values as of December 31, 1984 as
determined by the local assessors during the latest general
revision of assessments shall take effect beginning January 1, 1987
for purposes of real property tax collection.SEC. 2. The Minister
of Finance shall promulgate the necessary rules and regulations to
implement this Executive Order.SEC. 3. Executive Order No. 1019,
dated April 18, 1985, is hereby repealed.SEC. 4. All laws, orders,
issuances, and rules and regulations or parts thereof inconsistent
with this Executive Order are hereby repealed or modified
accordingly.SEC. 5. This Executive Order shall take effect
immediately.On March 31, 1987, Memorandum Order No. 77 was issued
suspending the implementation of Executive Order No. 73 until June
30, 1987.The petitioner, Francisco I. Chavez,1is a taxpayer and an
owner of three parcels of land. He alleges the following: that
Executive Order No. 73 accelerated the application of the general
revision of assessments to January 1, 1987 thereby mandating an
excessive increase in real property taxes by 100% to 400% on
improvements, and up to 100% on land; that any increase in the
value of real property brought about by the revision of real
property values and assessments would necessarily lead to a
proportionate increase in real property taxes; that sheer
oppression is the result of increasing real property taxes at a
period of time when harsh economic conditions prevail; and that the
increase in the market values of real property as reflected in the
schedule of values was brought about only by inflation and economic
recession.The intervenor Realty Owners Association of the
Philippines, Inc. (ROAP), which is the national association of
owners-lessors, joins Chavez in his petition to declare
unconstitutional Executive Order No. 73, but additionally alleges
the following: that Presidential Decree No. 464 is unconstitutional
insofar as it imposes an additional one percent (1%) tax on all
property owners to raise funds for education, as real property tax
is admittedly a local tax for local governments; that the General
Revision of Assessments does not meet the requirements of due
process as regards publication, notice of hearing, opportunity to
be heard and insofar as it authorizes "replacement cost" of
buildings (improvements) which is not provided in Presidential
Decree No. 464, but only in an administrative regulation of the
Department of Finance; and that the Joint Local Assessment/Treasury
Regulations No. 2-862is even more oppressive and unconstitutional
as it imposes successive increase of 150% over the 1986 tax.The
Office of the Solicitor General argues against the petition.The
petition is not impressed with merit.Petitioner Chavez and
intervenor ROAP question the constitutionality of Executive Order
No. 73 insofar as the revision of the assessments and the
effectivity thereof are concerned. It should be emphasized that
Executive Order No. 73 merely directs, in Section 1 thereof,
that:SECTION 1. Real property values as of December 31, 1984 as
determined by the local assessors during the latest general
revision of assessments shall take effect beginning January 1, 1987
for purposes of real property tax collection. (emphasis
supplied)The general revision of assessments completed in 1984 is
based on Section 21 of Presidential Decree No. 464 which provides,
as follows:SEC. 21.General Revision of Assessments. Beginning with
the assessor shall make a calendar year 1978, the provincial or
city general revision of real property assessments in the province
or city to take effect January 1, 1979, and once every five years
thereafter: Provided; however, That if property values in a
province or city, or in any municipality, have greatly changed
since the last general revision, the provincial or city assesor
may, with the approval of the Secretary of Finance or upon bis
direction, undertake a general revision of assessments in the
province or city, or in any municipality before the fifth year from
the effectivity of the last general revision.Thus, We agree with
the Office of the Solicitor General that the attack on Executive
Order No. 73 has no legal basis as the general revision of
assessments is a continuing process mandated by Section 21 of
Presidential Decree No. 464. If at all, it is Presidential Decree
No. 464 which should be challenged as constitutionally infirm.
However, Chavez failed to raise any objection against said decree.
It was ROAP which questioned the constitutionality thereof.
Furthermore, Presidential Decree No. 464 furnishes the procedure by
which a tax assessment may be questioned:SEC. 30.Local Board of
Assessment Appeals. Any owner who is not satisfied with the action
of the provincial or city assessor in the assessment of his
property may, within sixty days from the date of receipt by him of
the written notice of assessment as provided in this Code, appeal
to the Board of Assessment Appeals of the province or city, by
filing with it a petition under oath using the form prescribed for
the purpose, together with copies of the tax declarations and such
affidavit or documents submitted in support of the appeal.xxx xxx
xxxSEC. 34.Action by the Local Board of assessment Appeals. The
Local Board of Assessment Appeals shall decide the appeal within
one hundred and twenty days from the date of receipt of such
appeal. The decision rendered must be based on substantial evidence
presented at the hearing or at least contained in the record and
disclosed to the parties or such relevant evidence as a reasonable
mind might accept as adequate to support the conclusion.In the
exercise of its appellate jurisdiction, the Board shall have the
power to summon witnesses, administer oaths, conduct ocular
inspection, take depositions, and issue subpoena and subpoenaduces
tecum.The proceedings of the Board shall be conducted solely for
the purpose of ascertaining the truth without-necessarily adhering
to technical rules applicable in judicial proceedings.The Secretary
of the Board shall furnish the property owner and the Provincial or
City Assessor with a copy each of the decision of the Board. In
case the provincial or city assessor concurs in the revision or the
assessment, it shall be his duty to notify the property owner of
such fact using the form prescribed for the purpose. The owner or
administrator of the property or the assessor who is not satisfied
with the decision of the Board of Assessment Appeals, may, within
thirty days after receipt of the decision of the local Board,
appeal to the Central Board of Assessment Appeals by filing his
appeal under oath with the Secretary of the proper provincial or
city Board of Assessment Appeals using the prescribed form stating
therein the grounds and the reasons for the appeal, and attaching
thereto any evidence pertinent to the case. A copy of the appeal
should be also furnished the Central Board of Assessment Appeals,
through its Chairman, by the appellant.Within ten (10) days from
receipt of the appeal, the Secretary of the Board of Assessment
Appeals concerned shall forward the same and all papers related
thereto, to the Central Board of Assessment Appeals through the
Chairman thereof.xxx xxx xxxSEC. 36.Scope of Powers and Functions.
The Central Board of Assessment Appeals shall have jurisdiction
over appealed assessment cases decided by the Local Board of
Assessment Appeals. The said Board shall decide cases brought on
appeal within twelve (12) months from the date of receipt, which
decision shall become final and executory after the lapse of
fifteen (15) days from the date of receipt of a copy of the
decision by the appellant.In the exercise of its appellate
jurisdiction, the Central Board of Assessment Appeals, or upon
express authority, the Hearing Commissioner, shall have the power
to summon witnesses, administer oaths, take depositions, and
issuesubpoenasandsubpoenas duces tecum.The Central Board of
assessment Appeals shall adopt and promulgate rules of procedure
relative to the conduct of its business.Simply stated, within sixty
days from the date of receipt of the, written notice of assessment,
any owner who doubts the assessment of his property, may appeal to
the Local Board of Assessment Appeals. In case the, owner or
administrator of the property or the assessor is not satisfied with
the decision of the Local Board of Assessment Appeals, he may,
within thirty days from the receipt of the decision, appeal to the
Central Board of Assessment Appeals. The decision of the Central
Board of Assessment Appeals shall become final and executory after
the lapse of fifteen days from the date of receipt of the
decision.Chavez argues further that the unreasonable increase in
real property taxes brought about by Executive Order No. 73 amounts
to a confiscation of property repugnant to the constitutional
guarantee of due process, invoking the cases ofErmita-Malate Hotel,
et al. v. Mayor of Manila(G.R. No. L-24693, July 31, 1967, 20 SCRA
849) andSison v. Ancheta, et al.(G.R. No. 59431, July 25, 1984, 130
SCRA 654).The reliance on these two cases is certainly misplaced
because the due process requirement called for therein applies to
the "power to tax." Executive Order No. 73 does not impose new
taxes nor increase taxes.Indeed, the government