CASE 1

SUNGA vs. COMMISSION ON ELECTIONS, G.R. No. 125629, March 25, 1998, 288 SCRA 76

FACTS:

Petitioner was one of the candidates for the position of Mayor in the Municipality of Iguig,
Cagayan in the May 1995 Elections. Private respondent Trinidad was then the incumbent
Mayor, and was a candidate for re-election in the same municipality. Sunga filed a complaint
accusing Trinidad of violation of the Omnibus Election Code for using threats, intimidation,
terrorism or other forms of coercion. Hearings were held wherein Sunga adduced evidence
while Trinidad opted not to submit any evidence. The election results showed that Trinidad
garnered the highest number of votes while Sunga trailed second. The complaint filed by Sunga
was denied by the COMELEC ruling that the petitions filed shall be deemed to be the amended
petition filed on May 11,1995 which was clearly filed after the election mandates the dismissal of
the disqualification case.

ISSUE:
Whether or not the COMELEC erred in its interpretation of Sec. 6 of RA 6646 when it ordered
the dismissal of the disqualification case filed by the petitioner.

Held:

YES. The Supreme Court ruled that COMELEC is left with no discretion but to proceed
with the disqualification case even after the election. The fact that Trinidad was already
proclaimed and has assumed the position of mayor did not divest the COMELEC of
authority and jurisdiction to continue the hearing and eventually decide the
disqualification case. It is in accordance with Sec. 6 of Rule 6646 which expressly provides
that, “Any candidate who has been declared by final judgment to be disqualified shall not be
voted for, and the votes cast for him shall not be counted. If for any reason a candidate is not
declared by final judgment before an election to be disqualified and he is voted for and receives
the winning number of votes in such election, the Court or Commission shall continue with the
trial and hearing of the action, inquiry or protest and, upon motion of the complainant or any
intervenor, may during the pendency thereof order the suspension of the proclamation of such
candidate whenever the evidence of his guilt is strong”

Clearly, the legislative intent is that the COMELEC should continue the trial and hearing of the
disqualification case to its conclusion, i.e., until judgment is rendered thereon. The word "shall"
signifies that this requirement of the law is mandatory, operating to impose a positive duty which
must be enforced. The implication is that the COMELEC is left with no discretion but to proceed
with the disqualification case even after the election. Thus, in providing for the outright dismissal
of the disqualification case which remains unresolved after the election, Silvestre v. Duavit in
effect disallows what RA No. 6646 imperatively requires. This amounts to a quasi-judicial
legislation by the COMELEC which cannot be countenanced and is invalid for having
been issued beyond the scope of its authority. Interpretative rulings of quasi-judicial
bodies or administrative agencies must always be in perfect harmony with statutes and
should be for the sole purpose of carrying their general provisions into effect. By such
interpretative or administrative rulings, of course, the scope of the law itself cannot be
limited. Indeed, a quasi-judicial body or an administrative agency for that matter cannot
amend an act of Congress. Hence, in case of a discrepancy between the basic law and an
interpretative or administrative ruling, the basic law prevails.

WHEREFORE, the petition is PARTIALLY GRANTED. The 17 May 1996 and 30 July 1996
Resolutions of the COMELEC are ANNULLED and SET ASIDE. COMELEC is ordered to
REINSTATE SPA No. 95-213, "Manuel C. Sunga v. Ferdinand B. Trinidad," for disqualification,
and ACT on the case taking its bearings from the opinion herein expressed. No costs.

SO ORDERED.
CASE 2
THE COMMISSIONER OF CUSTOMS, vs. PHILIPPINE ACETYLENE COMPANY, and THE
COURT OF TAX APPEALS, G.R. No. L-22443 May 29, 1971

FACTS:
The Philippine Acetylene Company is a corporation duly organized and existing under
the laws of the Philippines that is engaged in the manufacture of oxygen, acetylene and nitrogen
and packaging of liquefied petroleum gas in cylinders and tanks. Sometime in 1957 the
protestant imported from the United States one custom-built liquefied petroleum gas tank which
arrived via the S/S 'PLEASANT VILLE' under Register No. 1356, and declared in Import Entry
No. 94060, series of 1957. Subsequently, the amount of P3,683.00 was assessed thereon as
special import tax and which (sic) was paid under protest by the importer-protestant as
evidenced by Official Receipt No. 12690 dated February 25, 1958.

However, relying on the provision of Sec. 6 of Republic Act 1394 which provides tax
exemption to the importation into the Philippines of machinery and/or raw materials to be used
by new and necessary industries as determined in accordance with Republic Act numbered
Nine Hundred and One; ...; machinery, equipment, accessories and spare parts, for the use of
industries, miners, mining enterprises planters and farmers;” — the Tax Court held that the term
industry should be understood in its ordinary and general definition, which is any enterprise
employing relatively large amounts of capital and/or labor. On such premise the Tax Court
concluded that inasmuch as the Philippine Acetylene Co., Inc. employs considerable labor and
capital in packaging liquefied petroleum gas purchased by it and selling the same for profit, it is
engaged in industry and hence is exempt from the payment of the special import tax in
connection with the tank used as container.

ISSUE:
Whether or not the Philippine Acetylene Co., Inc., insofar as its packaging operation of liquefied
petroleum gas is concerned, may be considered engaged in an industry as contemplated in
section 6 of Republic Act No. 1394 and therefore exempt from the payment of the special import
tax in respect of the gas tank in question.

HELD:
NO. The Court ruled that the respondents erred when it interpreted the term “industries”. Since
the term "industries" as used in the law for the second time is classified together with the
terms "miners, mining enterprises, planters and farmers", the obvious legislative intent is
to confine the meaning of the term to activities that tend to produce or create or
manufacture, such as those of miners, mining enterprises, planters and farmers. One of
the established rules of statutory construction, however, is that tax exemptions are held strictly
against the taxpayer, and if not expressly mentioned in the law must be within its purview by
clear legislative intent. In the present case the construction adhered to by the respondents
in reference to the scope of the term "industries' ' as employed for the second time in
Section 6 of Republic Act No. 1394 is contrary to such rule. For if the term were all
inclusive, and meant industries in general, that is, those which involve relatively large
amounts of capital and/or labor regardless of their productive or non-productive nature,
there would be no point in making a separate classification with respect to "new and
necessary industries'' for purposes of the tax exemption. The Court held therefore, that to
be entitled to exemption under the second classification in the statute the industry concerned, in
connection with the activity for which the importation is made, must be engaged in some
productive enterprise, not in merely packaging an already finished product to facilitate its
transportation. In a comparable case the Court has held that the tax exemption in connection
with the processing of gasoline and the manufacture of lubricating oil does not extend to pump
parts imported by the processor and leased to gasoline stations for their use in servicing
customers' vehicles, overruling the argument of the petitioner therein that the marketing of its
gasoline product "is corollary to or incidental to its industrial operations."

WHEREFORE, the decision of the Court of Tax Appeals is reversed and that of the Collector of
Customs of Manila and the Commissioner of Customs upheld. Costs against respondent
Philippine Acetylene Co., Inc.