Tax Case Digest

1.
WALTER 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.
G.R. No. L-7859, EN BANC, December 22, 1955, REYES, J.B L., J.
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, 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.
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.
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".
FACTS:
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.
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 constitutionally levied.
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ISSUE:
Whether the support of the sugar industry is a public purpose to which a tax may be constitutionally levied.
(YES)
RULING:
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, 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
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.
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 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.
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".
2
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".
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.
2. BENJAMIN P. GOMEZ vs ENRICO PALOMAR

G.R. No. L-23645 October 29, 1968
FACTS:
-This appeal puts in issue the constitutionality of Republic Act 1635,1 as amended by Republic Act 2631,2
which provides as follows:
To help raise funds for the Philippine Tuberculosis Society, the Director of Posts shall order for the period
from August nineteen to September thirty every year the printing and issue of semi-postal stamps of different
denominations with face value showing the regular postage charge plus the additional amount of five centavos
for the said purpose, and during the said period, no mail matter shall be accepted in the mails unless it bears
such semi-postal stamps: Provided, That no such additional charge of five centavos shall be imposed on
newspapers. The additional proceeds realized from the sale of the semi-postal stamps shall constitute a special
fund and be deposited with the National Treasury to be expended by the Philippine Tuberculosis Society in
carrying out its noble work to prevent and eradicate tuberculosis.
- The respondent Postmaster General Enrico Palomar, in implementation of the law, issued four (4)
administrative orders numbered 3 (June 20, 1958), 7 (August 9, 1958), 9 (August 28, 1958), and 10 (July 15,
1960). All these administrative orders were issued with the approval of the respondent Secretary of Public
Works and Communications.
-On September l5, 1963 the petitioner Benjamin P. Gomez mailed a letter at the post office in San Fernando,
Pampanga. Because this letter, addressed to a certain Agustin Aquino of 1014 Dagohoy Street, Singalong,
Manila did not bear the special anti-TB stamp required by the statute, it was returned to the petitioner.
- In view of this development, the petitioner brought suit for declaratory relief in the Court of First Instance of
Pampanga, to test the constitutionality of the statute, as well as the implementing administrative orders issued,
contending that it violates the equal protection clause of the Constitution as well as the rule of uniformity and
equality of taxation.
3
-The lower court declared the statute and the orders unconstitutional; hence this appeal by the respondent
postal authorities.
ISSUES:
WON the statute is violative of the equal protection clause of the Constitution. More specifically the claim is
made that it constitutes mail users into a class for the purpose of the tax while leaving untaxed the rest of the
population and that even among postal patrons the statute discriminatorily grants exemption to newspapers
while Administrative Order 9 of the respondent Postmaster General grants a similar exemption to offices
performing governmental functions.
HELD:
The five centavo charge levied by Republic Act 1635, as amended, is in the nature of an excise tax, laid upon
the exercise of a privilege, namely, the privilege of using the mails. As such the objections levelled against it
must be viewed in the light of applicable principles of taxation.
To begin with, it is settled that the legislature has the inherent power to select the subjects of taxation and to
grant exemptions. This power has aptly been described as "of wide range and flexibility." Indeed, it is said that
in the field of taxation, more than in other areas, the legislature possesses the greatest freedom in classification.
The reason for this is that traditionally, classification has been a device for fitting tax programs to local needs
and usages in order to achieve an equitable distribution of the tax burden.
It is not accurate to say that the statute constituted mail users into a class. Mail users were already a class by
themselves even before the enactment of the statue and all that the legislature did was merely to select their
class. Legislation is essentially empiric and Republic Act 1635, as amended, no more than reflects a distinction
that exists in fact. As Mr. Justice Frankfurter said, "to recognize differences that exist in fact is living law; to
disregard [them] and concentrate on some abstract identities is lifeless logic."
As for the Government and its instrumentalities, their exemption rests on the State's sovereign immunity from
taxation. The State cannot be taxed without its consent and such consent, being in derogation of its
sovereignty, is to be strictly construed.12 Administrative Order 9 of the respondent Postmaster General, which
lists the various offices and instrumentalities of the Government exempt from the payment of the anti-TB
stamp, is but a restatement of this well-known principle of constitutional law.
It is never a requirement of equal protection that all evils of the same genus be eradicated or none at all. As this
Court has had occasion to say, "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."
ACCORDINGLY, the judgment a quo is reversed, and the complaint is dismissed, without pronouncement as
to costs.
3. COMMISSIONER OF INTERNAL REVENUE, PETITIONER, -versus- MANUEL B. PINEDA, as

one of
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the heirs of deceased ATANASIO PINEDA, RESPONDENT. G.R. No. L-22734, EN BANC, September
15, 1967, BENGZON, J.P., J.
By virtue of such lien, the Government has the right to subject the property in Pineda's possession, i.e., the P2,
500.00, to satisfy the income tax assessment in the sum of P760.28. After such payment, Pineda will have a
right of contribution from his co-heirs, to achieve an adjustment of the proper share of each heir in the
distributable estate.
All told, the Government has two ways of collecting the tax in question. One, by going after all the heirs and
collecting from each one of them the amount of the tax proportionate to the inheritance received. This action
rests on the concept that hereditary property consists only of that part which remains after the settlement of all
lawful claims against the estate, for the settlement of which the entire estate is first liable. Another remedy,
pursuant to the lien created by Section 315 of the Tax Code upon all property and rights to property belonging
to the taxpayer for unpaid income tax, is by subjecting said property of the estate which is in the hands of an
heir or transferee to the payment of the tax due, the estate. This second remedy is the very avenue the
Government took in this case to collect the tax. The Bureau of Internal Revenue should be given, in instances
like the case at bar, the necessary discretion to avail itself of the most expeditious way to collect the tax as may
be envisioned in the particular provision of the Tax Code above quoted, because taxes are the lifeblood of
government and their prompt and certain availability is an imperious need.
FACTS:
Atanasio Pineda died, survived by his wife, Felicisima Bagtas, and 15 children, the eldest of whom is Manuel
B. Pineda, a lawyer. Estate proceedings were had in the Court of First Instance of Manila wherein the surviving
widow was appointed administratrix. The estate was divided among and awarded to the heirs and the
proceedings terminated on June 8, 1948. Manuel B. Pineda's share amounted to about P2, 500.00.
After the estate proceedings were closed, the Bureau of Internal Revenue investigated the income tax liability
of the estate for the years 1945, 1946, 1947 and 1948 and it found that the corresponding income tax returns
were not filed. Thereupon, the representative of the Collector of Internal Revenue filed said returns for the
estate on the basis of information and data obtained from the aforesaid estate proceedings and issued an
assessment for deficiency taxes.
Manuel B. Pineda, who received the assessment, contested the same. Subsequently, he appealed to the Court of
Tax Appeals alleging that he was appealing "only that proportionate part or portion pertaining to him as one of
the heirs."
The Court of Tax Appeals rendered judgment reversing the decision of the Commissioner on the ground that
his right to assess and collect the tax has prescribed. The Commissioner appealed and this Court affirmed the
findings of the Tax Court in respect to the assessment for income tax for the year 1947 but held that the right to
assess and collect the taxes for 1945 and 1946 has not prescribed. Accordingly, the case was remanded to the
Tax Court for further appropriate proceedings.
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On November 29, 1963 the Court of Tax Appeals rendered judgment holding Manuel B. Pineda liable for the
payment corresponding to his share of the deficiency taxes.
The Commissioner of Internal Revenue has appealed this case before the SC and has proposed to hold Manuel
B. Pineda liable for the payment of all the taxes found by the Tax Court to be due from the estate in the total
amount of P760.28 instead of only for the amount of taxes corresponding to his share in the estate.
Manuel B. Pineda opposes the proposition on the ground that as an heir he is liable for unpaid income tax due
the estate only up to the extent of and in proportion to any share he received.
ISSUE:
Whether or not Pineda can be held liable for the payment of all the taxes found by the Tax Court to be due
from the estate of his deceased father? (YES)
RULING:
We hold that the Government can require Manuel B. Pineda to pay the full amount of the taxes assessed.
Pineda is liable for the assessment as an heir and as a holder-transferee of property belonging to the
estate/taxpayer. As an heir he is individually answerable for the part of the tax proportionate to the share he
received from the inheritance. His liability, however, cannot exceed the amount of his share.4
As a holder of property belonging to the estate, Pineda is liable for the tax up to the amount of the property in
his possession. The reason is that the Government has a lien on the P2, 500.00 received by him from the estate
as his share in the inheritance, for unpaid income taxes for which said estate is liable, pursuant to the last
paragraph of Section 315 of the Tax Code.
By virtue of such lien, the Government has the right to subject the property in Pineda's possession, i.e., the P2,
500.00, to satisfy the income tax assessment in the sum of P760.28. After such payment, Pineda will have a
right of contribution from his co-heirs, to achieve an adjustment of the proper
share of each heir in the distributable estate.
All told, the Government has two ways of collecting the tax in question. One, by going after all the heirs and
collecting from each one of them the amount of the tax proportionate to the inheritance received. This remedy
was adopted in Government of the Philippine Islands v. Pamintuan, supra. In said case, the Government filed
an action against all the heirs for the collection of the tax. This action rests on the concept that hereditary
property consists only of that part which remains after the settlement of all lawful claims against the estate, for
the settlement of which the entire estate is first liable. The reason why in case suit is filed against all the heirs
the tax due from the estate is levied proportionately against them is to achieve thereby two results: first,
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payment of the tax; and second, adjustment of the shares of each heir in the distributed estate as lessened by the
tax.
Another remedy, pursuant to the lien created by Section 315 of the Tax Code upon all property and rights to
property belonging to the taxpayer for unpaid income tax, is by subjecting said property of the estate which is
in the hands of an heir or transferee to the payment of the tax due, the estate. This second remedy is the very
avenue the Government took in this case to collect the tax. The Bureau of Internal Revenue should be given, in
instances like the case at bar, the necessary discretion to avail itself of the most expeditious way to collect the
tax as may be envisioned in the particular provision of the Tax Code above quoted, because taxes are the
lifeblood of government and their prompt and certain availability is an imperious need. And as afore-stated in
this case the suit seeks to achieve only one objective: payment of the tax. The adjustment of the respective
shares due to the heirs from the inheritance, as lessened by the tax, is left to await the suit for contribution by
the heir from whom the Government recovered said tax.
4. COMMISSIONER OF INTERNAL REVENUE, PETITIONER, -versus-

ALGUE, INC., and THE COURT OF TAX APPEALS, RESPONDENTS. G.R. No. L-28896, FIRST
DIVISION, February 17, 1988, CRUZ, J.
The Solicitor General is correct when he says that the burden is on the taxpayer to prove the validity of the
claimed deduction. In the present case, however, we find that the onus has been discharged satisfactorily. The
private respondent has proved that the payment of the fees was necessary and reasonable in the light of the
efforts exerted by the payees in inducing investors and prominent businessmen to venture in an experimental
enterprise and involve themselves in a new business requiring millions of pesos. This was no mean feat and
should be, as it was, sufficiently recompensed.
It is said that taxes are what we pay for civilization society. Without taxes, the government would be paralyzed
for lack of the motive power to activate and operate it. Hence, despite the natural reluctance to surrender part
of one's hard earned income to the taxing authorities, every person who is able to must contribute his share in
the running of the government. The government for its part is expected to respond in the form of tangible and
intangible benefits intended to improve the lives of the people and enhance their moral and material values.
This symbiotic relationship is the rationale of taxation and should dispel the erroneous notion that it is an
arbitrary method of exaction by those in the seat of power.
The petitioner contends that the claimed deduction of P75, 000.00 was properly disallowed because it was not
an ordinary reasonable or necessary business expense. The Court of Tax Appeals had seen it differently.
Agreeing with Algue, it held that the said amount had been legitimately paid by the private respondent for
actual services rendered. The payment was in the form of promotional fees. These were collected by the Payees
for their work in the creation of the Vegetable Oil Investment Corporation of the Philippines and its subsequent
purchase of the properties of the Philippine Sugar Estate Development Company.
7
Parenthetically, it may be observed that the petitioner had originally claimed these promotional fees to be
personal holding company income but later conformed to the decision of the respondent court rejecting this
assertion. In fact, as the said court found, the amount was earned through the joint efforts of the persons among
whom it was distributed It has been established that the Philippine
Sugar Estate Development Company had earlier appointed Algue as its agent, authorizing it to sell its land,
factories and oil manufacturing process. Pursuant to such authority, Alberto Guevara, Jr., Eduardo Guevara,
Isabel Guevara, Edith, O'Farell, and Pablo Sanchez, worked for the formation of the Vegetable Oil Investment
Corporation, inducing other persons to invest in it. Ultimately, after its incorporation largely through the
promotion of the said persons, this new corporation purchased the PSEDC properties. For this sale, Algue
received as agent a commission of P126, 000.00, and it was from this commission that the P75,000.00
promotional fees were paid to the aforenamed individuals.
There is no dispute that the payees duly reported their respective shares of the fees in their income tax returns
and paid the corresponding taxes thereon.17 The Court of Tax Appeals also found, after examining the
evidence, that no distribution of dividends was involved.18
But even as we concede the inevitability and indispensability of taxation, it is a requirement in all democratic
regimes that it be exercised reasonably and in accordance with the prescribed procedure. If it is not, then the
taxpayer has a right to complain and the courts will then come to his succor. For all the awesome power of the
tax collector, he may still be stopped in his tracks if the taxpayer can demonstrate, as it has here, that the law
has not been observed.
Facts:
The record shows that the private respondent, a domestic corporation engaged in engineering, construction and
other allied activities, received a letter from the petitioner assessing it in the total amount of P83, 183.85 as
delinquency income taxes for the years 1958 and 1959. Algue flied a letter of protest or request for
reconsideration, which letter was stamp received on the same day in the office of the petitioner. On March 12,
1965, a warrant of distraint and levy was presented to the private respondent, through its counsel, Atty. Alberto
Guevara, Jr., who refused to receive it on the ground of the pending protest.
A search of the protest in the dockets of the case proved fruitless. Atty. Guevara produced his file copy and
gave a photostat to BIR agent Ramon Reyes, who deferred service of the warrant. On April 7, 1965, Atty.
8
Guevara was finally informed that the BIR was not taking any action on the protest and it was only then that he
accepted the warrant of distraint and levy earlier sought to be served. Sixteen days later, on April 23, 1965,
Algue filed a petition for review of the decision of the Commissioner of Internal Revenue with the Court of
Tax Appeals.
Issue:
Whether or not the Collector of Internal Revenue correctly disallowed the P75,000.00 deduction claimed by
private respondent Algue as legitimate business expenses in its income tax returns? (NO)
Ruling:
The petitioner contends that the claimed deduction of P75, 000.00 was properly disallowed because it was not
an ordinary reasonable or necessary business expense. The Court of Tax Appeals had seen it differently.
Agreeing with Algue, it held that the said amount had been legitimately paid by the private respondent for
actual services rendered. The payment was in the form of promotional fees. These were collected by the
Payees for their work in the creation of the Vegetable Oil Investment Corporation of the Philippines and its
subsequent purchase of the properties of the Philippine Sugar Estate Development Company.
Parenthetically, it may be observed that the petitioner had originally claimed these promotional fees to be
personal holding company income but later conformed to the decision of the respondent court rejecting this
assertion. In fact, as the said court found, the amount was earned through the joint efforts of the persons
among whom it was distributed It has been established that the Philippine Sugar Estate Development
Company had earlier appointed Algue as its agent, authorizing it to sell its land, factories and oil
manufacturing process. Pursuant to such authority, Alberto Guevara, Jr., Eduardo Guevara, Isabel Guevara,
Edith, O'Farell, and Pablo Sanchez, worked for the formation of the Vegetable Oil Investment Corporation,
inducing other persons to invest in it. Ultimately, after its incorporation largely through the promotion of the
said persons, this new corporation purchased the PSEDC properties. For this sale, Algue received as agent a
commission of P126, 000.00, and it was from this commission that the P75,000.00 promotional fees were paid
to the aforenamed individuals.
There is no dispute that the payees duly reported their respective shares of the fees in their income tax returns
and paid the corresponding taxes thereon.17 The Court of Tax Appeals also found, after examining the
evidence, that no distribution of dividends was involved.18
The petitioner claims that these payments are fictitious because most of the payees are members of the same
family in control of Algue. It is argued that no indication was made as to how such payments were made,
whether by check or in cash, and there is not enough substantiation of such payments. In short, the petitioner
suggests a tax dodge, an attempt to evade a legitimate assessment by involving an imaginary deduction.
We find that these suspicions were adequately met by the private respondent when its President, Alberto
Guevara, and the accountant, Cecilia V. de Jesus, testified that the payments were not made in one lump sum
but periodically and in different amounts as each payee's need arose. 19 It should be remembered that this was
a family corporation where strict business procedures were not applied and immediate issuance of receipts was
9
not required. Even so, at the end of the year, when the books were to be closed, each payee made an
accounting of all of the fees received by him or her, to make up the total of P75,000.00. 20 Admittedly,
everything seemed to be informal. This arrangement was understandable, however, in view of the close
relationship among the persons in the family corporation.
It is worth noting at this point that most of the payees were not in the regular employ of Algue nor were they
its controlling stockholders.
The Solicitor General is correct when he says that the burden is on the taxpayer to prove the validity of the
claimed deduction. In the present case, however, we find that the onus has been discharged satisfactorily. The
private respondent has proved that the payment of the fees was necessary and reasonable in the light of the
efforts exerted by the payees in inducing investors and prominent businessmen to venture in an experimental
enterprise and involve themselves in a new business requiring millions of pesos. This was no mean feat and
should be, as it was, sufficiently recompensed.
But even as we concede the inevitability and indispensability of taxation, it is a requirement in all democratic
regimes that it be exercised reasonably and in accordance with the prescribed procedure. If it is not, then the
taxpayer has a right to complain and the courts will then come to his succor. For all the awesome power of the
tax collector, he may still be stopped in his tracks if the taxpayer can demonstrate, as it has here, that the law
has not been observed.
We hold that the appeal of the private respondent from the decision of the petitioner was filed on time with the
respondent court in accordance with Rep. Act No. 1125. And we also find that the claimed deduction by the
private respondent was permitted under the Internal Revenue Code and should therefore not have been
disallowed by the petitioner.
5. NATIONAL POWER CORPORATION, Petitioner, -versus- CITY OF CABANATUAN, Respondent.

G.R. No. 149110, THIRD DIVISION, April 9, 2003, PUNO, J.
As a rule, tax exemptions are construed strongly against the claimant. Exemptions must be shown to exist
clearly and categorically, and supported by clear legal provisions.
In the case at bar, the petitioner's sole refuge is Section 13 of RA No. 6395 exempting itself from, among
others, all income taxes, franchise taxes and realty taxes to be paid to the National Government, its provinces,
cities, municipalities and other government agencies and instrumentalities. It must be noted, however, that
Section 193 of the LGC withdrew, subject to limited exceptions, the sweeping tax privileges previously enjoyed
10
by private and public corporations. Contrary to the contention of petitioner, Section 193 of the LGC is an
express, albeit general, repeal of all statutes granting tax exemptions from local taxes. Not being a local water
district, a cooperative registered under R.A. No. 6938, or a non-stock and non-profit hospital or educational
institution, petitioner clearly does not belong to the exception. It is therefore incumbent upon the petitioner to
point to some provisions of the LGC that expressly grant it exemption from local taxes. This, however, would
be an exercise in futility. Section 137 of the LGC clearly states that the LGUs can impose franchise tax
notwithstanding any exemption granted by any law or other special law. The said provision does not admit any
exception.
FACTS:
The petitioner, a government-owned and controlled corporation, sells electric power to the residents of
Cabanatuan City, posting a gross income of P107,814,187.96 in 1992. Accordingly, pursuant to Section 37 of
Ordinance No. 165-92, the respondent assessed the petitioner of franchise tax amounting to P808,606.41,
representing 75% of 1% of the latter’s gross receipts for the preceding year.
The petitioner refused to pay the tax assessment arguing that the respondent has no authority to impose tax on
government entities. It also contended that as a non-profit organization, it is exempted from the payment of all
forms of taxes, charges, duties or fees in accordance with Sec. 13 of RA No. 6395, as amended. Consequently,
the respondent filed a collection suit in the RTC, demanding that the petitioner pay the assessed tax due plus
surcharge. The respondent alleged that the petitioner’s exemption from local taxes has been repealed by
Section 193 of the LGC, which reads as follows:
Sec. 193. Withdrawal of Tax Exemption Privileges.- Unless otherwise provided in this Code, tax exemptions or
incentives granted to, or presently enjoyed by all persons, whether natural or juridical, including government
owned or controlled corporations, except local water districts, cooperatives duly registered under R.A. No.
6938, non-stock and non-profit hospitals and educational institutions, are hereby withdrawn upon the
effectivity of this Code.
ISSUE:
Whether the petitioner is exempted from payment of local taxes. (NO)
RULING:
As a rule, tax exemptions are construed strongly against the claimant. Exemptions must be shown to exist
clearly and categorically, and supported by clear legal provisions.
In the case at bar, the petitioner's sole refuge is Section 13 of RA No. 6395 exempting itself from, among
others, all income taxes, franchise taxes and realty taxes to be paid to the National Government, its provinces,
cities, municipalities and other government agencies and instrumentalities. It must be noted, however, that
Section 193 of the LGC withdrew, subject to limited exceptions, the sweeping tax privileges previously
enjoyed by private and public corporations. Contrary to the contention of petitioner, Section 193 of the LGC is
an express, albeit general, repeal of all statutes granting tax exemptions from local taxes. Not being a local
11
water district, a cooperative registered under RA No. 6938, or a non-stock and non-profit hospital or
educational institution, petitioner clearly does not belong to the exception. It is therefore incumbent upon the
petitioner to point to some provisions of the LGC that expressly grant it exemption from local taxes. This,
however, would be an exercise in futility. Section 137 of the LGC clearly states that the LGUs can impose
franchise tax notwithstanding any exemption granted by any law or other special law. The said provision does
not admit any exception.
It is worth mentioning that Section 192 of the LGC empowers the LGUs, through ordinances duly approved, to
grant tax exemptions, initiatives or reliefs. In enacting Section 37 of Ordinance No. 165-92 which imposes an
annual franchise tax notwithstanding any exemption granted by law or other special law, the respondent clearly
did not intend to exempt the petitioner from the coverage thereof.
Doubtless, the power to tax is the most effective instrument to raise needed revenues to finance and support
myriad activities of the local government units for the delivery of basic services essential to the promotion of
the general welfare and the enhancement of peace, progress, and prosperity of the people. The original reason
for the withdrawal of tax exemption privileges granted to government- owned or controlled corporations and
all other units of government was that such privilege resulted in serious tax base erosion and distortions in the
tax treatment of similarly situated enterprises.
6. G.R. No. 92585 May 8, 1992

CALTEX PHILIPPINES, INC., petitioner,
vs.
THE HONORABLE COMMISSION ON AUDIT, HONORABLE COMMISSIONER BARTOLOME C.
FERNANDEZ and HONORABLE COMMISSIONER ALBERTO P. CRUZ, respondents.
Topic: (1) tax vs. ordinary debt, (2) purpose/objective of taxation: non- revenue / special / regulatory
Ponente: Davide, Jr. J.
DOCTRINE:
A taxpayer may not offset taxes due from the claims that he may have against the government.
QUICK FACTS: Caltex Philippines questions the decisions of COA for disallowing the offsetting of its
claims for reimbursement with its due OPSF remittance
FACTS:
The Oil Price Stabilization Fund (OPSF) was created under Sec. 8, PD 1956, as amended by EO 137 for the
purpose of minimizing frequent price changes brought about by exchange rate adjustments. It will be used to
reimburse the oil companies for cost increase and possible cost underrecovery incurred due to reduction of
domestic prices.
COA sent a letter to Caltex directing the latter to remit to the OPSF its collection. Caltex requested COA for an
early release of its reimbursement certificates which the latter denied.
12
COA disallowed recover of financing charges, inventory losses and sales to marcopper and atlas but allowed
the recovery of product sale or those arising from export sales.
Petitioner’s Contention:
Department of Finance issued Circular No. 4-88 allowing reimbursement. Denial of claim for reimbursement
would be inequitable. NCC (compensation) and Sec. 21, Book V, Title I-B of the Revised Administrative Code
(Retention of Money for Satisfaction of Indebtedness to Government) allows offsetting.
Amounts due do not arise as a result of taxation since PD 1956 did not create a source of taxation, it instead
established a special fund. This lack of public purpose behind OPSF exactions distinguishes it from tax.
Respondent’s Contention:
Based on Francia v. IAC, there’s no offsetting of taxes against the the claims that a taxpayer may have against
the government, as taxes do not arise from contracts or depend upon the will of the taxpayer, but are imposed
by law.
ISSUE: WON Caltex is entitled to offsetting DECISION: NO. COA AFFIRMED

HELD: It is settled that a taxpayer may not offset taxes due from the claims that he may have against the
government. Taxes cannot be subject of compensation because the government and taxpayer are not mutually
creditors and debtors of each other and a claim for taxes is not such a debt, demand, contract or judgment as is
allowed to be set-off.
▪ Technically, the oil companies merely act as agents for the Government in the latter’s collection since the
taxes are, in reality, passed unto the end-users – the consuming public. Their primary obligation is to account
for and remit the taxes collection to the administrator of the OPSF.
▪ There is not merit in Caltex’s contention that the OPSF contributions are not for a public purpose because
they go to a special fund of the government. Taxation is no longer envisioned as a measure merely to raise
revenue to support the existence of the government; taxes may be levied with a regulatory purpose to provide
means for the rehabilitation and stabilization of a threatened industry which is affected with public interest as
to be within the police power of the State.
▪ The oil industry is greatly imbued with public interest as it vitally affects the general welfare.
▪ PD 1956, as amended by EO No. 137 explicitly provides that the source of OPSF is taxation.
7. FRANCISCO I. CHAVEZ, Petitioner, -versus –

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 Piñas, Respondents, REALTY OWNERS
ASSOCIATION OF THE PHILIPPINES, INC., Petitioner-Intrvenor
G.R. No. 97117, EN BANC, June 6, 1990, MEDIALDEA, J.
The Court agreed with the observation of the Office of the Solicitor General that without Executive Order No.
73, the basis for collection of real property taxes will still be the 1978 revision of property values.
Certainly, to continue collecting real property taxes based on valuations arrived at several years ago, in
disregard of the increases in the value of real properties that have occurred since then, is not in consonance
13
with a sound tax system. Fiscal adequacy, which is one of the characteristics of a sound tax system, requires
that sources of revenues must be adequate to meet government expenditures and their variations.
FACTS
President Corazon Aquino issued Executive Order No. 73 stating that beginning January 1, 1987, the 1984
assessments shall be the basis of real property taxes
The petitioner, Francisco I. Chavez, is a taxpayer and an owner of three parcels of land. He alleges the
following: that Executive Order No. 73 accelerated the application of the general revision of assessments to
January 1, 1987 thereby mandating an excessive increase in real property taxes by 100% to 400% on
improvements, and up to 100% on land; that any increase in the value of real property brought about by the
revision of real property values and assessments would necessarily lead to a proportionate increase in real
property taxes; that sheer oppression is the result of increasing real property taxes at a period of time when
harsh economic conditions prevail; and that the increase in the market values of real property as reflected in the
schedule of values was brought about only by inflation and economic recession.
The intervenor Realty Owners Association of the Philippines, Inc. (ROAP), which is the national association of
owners-lessors, joins Chavez in his petition to declare unconstitutional Executive Order No. 73. The Office of
the Solicitor General argued against the petition.
ISSUE
Whether Executive Order No. 73 is unconstitutional. (NO)
RULING
Executive Order No. 73 does not impose new taxes nor increase taxes.
Indeed, the government recognized the financial burden to the taxpayers that will result from an increase in
real property taxes. Hence, Executive Order No. 1019 was issued on April 18, 1985, deferring the
implementation of the increase in real property taxes resulting from the revised real property assessments, from
January 1, 1985 to January 1, 1988. Section 5 thereof is quoted herein as follows:
"SEC. 5. The increase in real property taxes resulting from the revised real property assessments as provided
for under Section 21 of Presidential Decree No. 464, as amended by Presidential Decree No. 1 621, shall be
collected beginning January 1, 1988 instead of January 1, 1985 in order to enable the Ministry of Finance and
the Ministry of Local Government to establish the new systems of tax collection and assessment provided
herein and in order to alleviate the condition of the people, including real property owners, as a result of
temporary economic difficulties." (Emphasis supplied)
The issuance of Executive Order No. 73 which changed the date of implementation of the increase in real
property taxes from January 1, 1988 to January 1, 1987 and therefore repealed Executive Order No. 1019, also
finds ample justification in its "whereas" clauses, as follows:
"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; (Emphasis supplied)
The Court agreed with the observation of the Office of the Solicitor General that without Executive Order No.
73, the basis for collection of real property taxes will still be the 1978 revision of property values. Certainly, to
continue collecting real property taxes based on valuations arrived at several years ago, in disregard of the
increases in the value of real properties that have occurred since then, is not in consonance with a sound tax
14
system. Fiscal adequacy, which is one of the characteristics of a sound tax system, requires that sources of
revenues must be adequate to meet government expenditures and their variations.
8. ABAKADA GURO PARTY LIST (FORMERLY AASJAS) OFFICERS SAMSON S. ALCANTARA

AND ED VINCENT S. ALBANO, PETITIONERS,
-VERSUS THE HONORABLE EXECUTIVE SECRETARY EDUARDO ERMITA; HONORABLE
SECRETARY OF THE DEPARTMENT OF FINANCE CESAR PURISIMA; AND HONORABLE
COMMISSIONER OF INTERNAL REVENUE GUILLERMO PARAYNO, JR., RESPONDENT. G.R.
No.
168056, EN BANC, September 1, 2005, AUSTRIA-MARTINEZ, J.
It has been said that taxes are the lifeblood of the government. In this case, it is just an enema, a first- aid
measure to resuscitate an economy in distress. The Court is neither blind nor is it turning a deaf ear on the
plight of the masses. But it does not have the panacea for the malady that the law seeks to remedy. As in other
cases, the Court cannot strike down a law as unconstitutional simply because of its yokes.
FACTS:
R.A. No. 9337 is a consolidation of three legislative bills namely, House Bill Nos. 3555 and 3705, and Senate
Bill No. 1950. On May 23, 2005, the enrolled copy of the consolidated House and Senate version was
transmitted to the President, who signed the same into law on May 24, 2005. Thus, came R.A. No. 9337.
July 1, 2005 is the effectivity date of R.A. No. 9337. When said date came, the Court issued a temporary
restraining order, effective immediately and continuing until further orders, enjoining respondents from
enforcing and implementing the law.
Before R.A. No. 9337 took effect, petitioners ABAKADA GURO Party List, et al., filed a petition for
prohibition on May 27, 2005. They question the constitutionality of Sections 4, 5 and 6 of R.A. No. 9337,
amending Sections 106, 107 and 108, respectively, of the National Internal Revenue Code (NIRC).
Petitioners argue that the law is unconstitutional, as it constitutes abandonment by Congress of its exclusive
authority to fix the rate of taxes under Article VI, Section 28(2) of the 1987 Philippine Constitution.
Sen. Aquilino Q. Pimentel, Jr., et al., also filed a petition for certiorari likewise assailing the constitutionality
of Sections 4, 5 and 6 of R.A. No. 9337. Aside from questioning the so-called stand- by authority of the
President to increase the VAT rate to 12%, on the ground that it amounts to an undue delegation of legislative
power, petitioners also contend that the increase in the VAT rate to 12% contingent on any of the two
conditions being satisfied violates the due process clause embodied in Article III, Section 1 of the Constitution,
as it imposes an unfair and additional tax burden on the people, in that: (1) the 12% increase is ambiguous
because it does not state if the rate would be returned to the original 10% if the conditions are no longer
satisfied; (2) the rate is unfair and unreasonable, as the people are unsure of the applicable VAT rate from year
to year; and
15
(3) the increase in the VAT rate, which is supposed to be an incentive to the President to raise the VAT
collection to at least 2 4/5 of the GDP of the previous year, should only be based on fiscal adequacy.
Thereafter, a petition for prohibition was filed on June 29, 2005, by the Association of Pilipinas Shell Dealers,
Inc., et al.
Several members of the House of Representatives led by Rep. Francis Joseph G. Escudero filed this petition
for certiorari on June 30, 2005.
On the eleventh hour, Governor Enrique T. Garcia filed a petition for certiorari and prohibition on July 20,
2005, alleging unconstitutionality of the law on the ground that the limitation on the creditable input tax in
effect allows VAT-registered establishments to retain a portion of the taxes they collect, thus violating the
principle that tax collection and revenue should be solely allocated for public purposes and expenditures.
Petitioner Garcia further claims that allowing these establishments to pass on the tax to the consumers is
inequitable, in violation of Article VI, Section 28(1) of the Constitution.
ISSUE:
Whether or not the law subject of this case violates the Constitution?
RULING:
Petitioners Escudero, et al., and Pimentel, et al., allege that the Bicameral Conference Committee exceeded its
authority by 1.) inserting the stand-by authority in favor of the President in Sections 4, 5, and 6 of R.A. No.
9337; 2) Deleting entirely the no pass-on provisions found in both the House and Senate bills; 3) Inserting the
provision imposing a 70% limit on the amount of input tax to be credited against the output tax; and 4)
Including the amendments introduced only by Senate Bill No. 1950 regarding other kinds of taxes in addition
to the value-added tax.
It should be borne in mind that the power of internal regulation and discipline are intrinsic in any legislative
body for, as unerringly elucidated by Justice Story, "[i]f the power did not exist, it would be utterly
impracticable to transact the business of the nation, either at all, or at least with decency, deliberation,
and order. Thus, Article VI, Section 16 (3) of the Constitution provides that "each House may determine the
rules of its proceedings." Pursuant to this inherent constitutional power to promulgate and implement its own
rules of procedure, the respective rules of each house of Congress provided for the creation of a Bicameral
Conference Committee.
In resolving the differences with the Senate, the House panel shall, as much as possible, adhere to and support
the House Bill. If the differences with the Senate are so substantial that they materially impair the House Bill,
the panel shall report such fact to the House for the latter’s appropriate action.
The creation of such conference committee was apparently in response to a problem, not addressed by any
constitutional provision, where the two houses of Congress find themselves in disagreement over changes or
amendments introduced by the other house in a legislative bill. Given that one of the most basic powers of the
16
legislative branch is to formulate and implement its own rules of proceedings and to discipline its members,
may the Court then delve into the details of how Congress complies with its internal rules or how it conducts
its business of passing legislation? Note that in the present petitions, the issue is not whether provisions of the
rules of both houses creating the bicameral conference committee are unconstitutional, but whether the
bicameral conference committee has strictly complied with the rules of both houses, thereby remaining
within the jurisdiction conferred upon it by Congress.
The disagreements between the provisions in the House bills and the Senate bill were with regard to (1) what
rate of VAT is to be imposed; (2) whether only the VAT imposed on electricity generation, transmission and
distribution companies should not be passed on to consumers, as proposed in the Senate bill, or both the VAT
imposed on electricity generation, transmission and distribution companies and the VAT imposed on sale of
petroleum products should not be passed on to consumers, as proposed in the House bill; (3) in what manner
input tax credits should be limited; (4) and whether the NIRC provisions on corporate income taxes,
percentage, franchise and excise taxes should be amended.
There being differences and/or disagreements on the foregoing provisions of the House and Senate bills, the
Bicameral Conference Committee was mandated by the rules of both houses of Congress to act on the same by
settling said differences and/or disagreements.
Under the provisions of both the Rules of the House of Representatives and Senate Rules, the Bicameral
Conference Committee is mandated to settle the differences between the disagreeing provisions in the House
bill and the Senate bill. The term "settle" is synonymous to "reconcile" and "harmonize." To reconcile or
harmonize disagreeing provisions, the Bicameral Conference Committee may then (a) adopt the specific
provisions of either the House bill or Senate bill, (b) decide that neither provisions in the House bill or the
provisions in the Senate bill would be carried into the final form of the bill, and/or (c) try to arrive at a
compromise between the disagreeing provisions.
In the present case, the changes introduced by the Bicameral Conference Committee on disagreeing provisions
were meant only to reconcile and harmonize the disagreeing provisions for it did not inject any idea or intent
that is wholly foreign to the subject embraced by the original provisions.
The so-called stand-by authority in favor of the President, whereby the rate of 10% VAT wanted by the Senate
is retained until such time that certain conditions arise when the 12% VAT wanted by the House shall be
imposed, appears to be a compromise to try to bridge the difference in the rate of VAT proposed by the two
houses of Congress. Nevertheless, such compromise is still totally within the subject of what rate of VAT
should be imposed on taxpayers.
As to the amendments to NIRC provisions on taxes other than the value-added tax proposed in Senate Bill No.
1950, since said provisions were among those referred to it, the conference committee had to act on the same
and it basically adopted the version of the Senate.
Thus, all the changes or modifications made by the Bicameral Conference Committee were germane to
subjects of the provisions referred to it for reconciliation. Such being the case, the Court does not see any grave
17
abuse of discretion amounting to lack or excess of jurisdiction committed by the Bicameral Conference
Committee.
9. RENATO V. DIAZ and AURORA MA. F. TIMBOL, Petitioners, -versus –

THE SECRETARY OF FINANCE and THE COMMISSIONER OF INTERNAL REVENUE,
Respondents.
G.R. No. 193007, EN BANC, July 19, 2011, ABAD, J.
Administrative feasibility is one of the canons of a sound tax system. It simply means that the tax system should
be capable of being effectively administered and enforced with the least inconvenience to the taxpayer. Non-
observance of the canon, however, will not render a tax imposition invalid "except to the extent that specific
constitutional or statutory limitations are impaired." Thus, even if the imposition of VAT on tollway operations
may seem burdensome to implement, it is not necessarily invalid unless some aspect of it is shown to violate
any law or the Constitution.
Here, it remains to be seen how the taxing authority will actually implement the VAT on tollway operations.
Any declaration by the Court that the manner of its implementation is illegal or unconstitutional would be
premature. Besides, any concern about how the VAT on tollway operations will be enforced must first be
addressed to the BIR on whom the task of implementing tax laws primarily and exclusively rests. The
Court cannot preempt the BIR’s discretion on the matter, absent any clear violation of law or the Constitution.
FACTS
Petitioners Renato V. Diaz and Aurora Ma. F. Timbol filed this petition for declaratory relief assailing the
validity of the impending imposition of value-added tax (VAT) by the Bureau of Internal Revenue (BIR) on
the collections of tollway operators. However, the Court treated the case as one of prohibition.
Petitioners hold the view that Congress did not, when it enacted the NIRC, intend to include toll fees within the
meaning of "sale of services" that are subject to VAT; that a toll fee is a "user’s tax," not a sale of services; that
to impose VAT on toll fees would amount to a tax on public service; and that, since VAT was never factored
into the formula for computing toll fees, its imposition would violate the non-impairment clause of the
constitution.
On August 23, 2010 the Office of the Solicitor General filed the government’s comment. The government
avers that the NIRC imposes VAT on all kinds of services of franchise grantees, including tollway operations,
except where the law provides otherwise; that the Court should seek the meaning and intent of the law from
the words used in the statute; and that the imposition of VAT on tollway operations has been the subject as
early as 2003 of several BIR rulings and circulars.
Finally, the government contends that the non-inclusion of VAT in the parametric formula for computing toll
rates cannot exempt tollway operators from VAT. In any event, it cannot be claimed that the rights of tollway
operators to a reasonable rate of return will be impaired by the VAT since this is imposed on top of the toll
rate. Further, the imposition of VAT on toll fees would have very minimal effect on motorists using the
tollways.
ISSUE:
1. Whether the government is unlawfully expanding VAT coverage by including tollway operators and
tollway operations in the terms "franchise grantees" and "sale of services" under Section 108 of the Code.
18
(NO)
2. Whether the imposition of VAT on tollway operators is not administratively feasible and cannot be
implemented. (NO)
RULING:
1. Section 108 of the NIRC imposes VAT on "all kinds of services" rendered in the Philippines for a fee,
including those specified in the list. The enumeration of affected services is not exclusive. By qualifying
"services" with the words "all kinds," Congress has given the term "services" an all- encompassing meaning.
The listing of specific services are intended to illustrate how pervasive and broad is the VAT’s reach rather
than establish concrete limits to its application. Thus, every activity that can be imagined as a form of "service"
rendered for a fee should be deemed included unless some provision of law especially excludes it.
When a tollway operator takes a toll fee from a motorist, the fee is in effect for the latter’s use of the tollway
facilities over which the operator enjoys private proprietary rights that its contract and the law recognize. In
this sense, the tollway operator is no different from the service providers under Section 108 who allow others
to use their properties or facilities for a fee.
Tollway operators are franchise grantees and they do not belong to exceptions (the low-income radio and/or
television broadcasting companies with gross annual incomes of less than ₱10 million and gas and water
utilities) that Section 119 spares from the payment of VAT. The word "franchise" broadly covers government
grants of a special right to do an act or series of acts of public concern.
Tollway operators are, owing to the nature and object of their business, "franchise grantees." The construction,
operation, and maintenance of toll facilities on public improvements are activities of public consequence that
necessarily require a special grant of authority from the state. Indeed, Congress granted special franchise for
the operation of tollways to the Philippine National Construction Company, the former tollway
concessionaire for the North and South Luzon Expressways. Apart from Congress, tollway franchises may also
be granted by the TRB, pursuant to the exercise of its delegated powers under P.D. 1112. The franchise in this
case is evidenced by a "Toll Operation Certificate."
2.
Administrative feasibility is one of the canons of a sound tax system. It simply means that the tax system
should be capable of being effectively administered and enforced with the least inconvenience to the taxpayer.
Non-observance of the canon, however, will not render a tax imposition invalid "except to the extent that
specific constitutional or statutory limitations are impaired." Thus, even if the imposition of VAT on tollway
operations may seem burdensome to implement, it is not necessarily invalid unless some aspect of it is shown
to violate any law or the Constitution.
Here, it remains to be seen how the taxing authority will actually implement the VAT on tollway operations.
Any declaration by the Court that the manner of its implementation is illegal or unconstitutional would be
premature. Although the transcript of the August 12, 2010 Senate hearing provides some clue as to how the
BIR intends to go about it,35 the facts pertaining to the matter are not sufficiently established for the Court
to pass judgment on. Besides, any concern about how the VAT on tollway operations will be enforced must
first be addressed to the BIR on whom the task of implementing tax laws primarily and exclusively rests. The
Court cannot preempt the BIR’s discretion on the matter, absent any clear violation of law or the Constitution.
For the same reason, the Court cannot prematurely declare as illegal, BIR RMC 63-2010 which directs toll
companies to record an accumulated input VAT of zero balance in their books as of August 16, 2010, the date
when the VAT imposition was supposed to take effect. The issuance allegedly violates Section 111(A) of the
19
Code which grants first time VAT payers a transitional input VAT of 2% on beginning inventory.
In this connection, the BIR explained that BIR RMC 63-2010 is actually the product of negotiations with
tollway operators who have been assessed VAT as early as 2005, but failed to charge VAT- inclusive toll fees
which by now can no longer be collected. The tollway operators agreed to waive the 2% transitional input
VAT, in exchange for cancellation of their past due VAT liabilities. Notably, the right to claim the 2%
transitional input VAT belongs to the tollway operators who have not questioned the circular’s validity. They
are thus the ones who have a right to challenge the circular in a direct and proper action brought for the
purpose.
10. HYDRO RESOURCES V. COURT OF TAX APPEALS ET AL. GR 80276; December 21, 1990
Facts: Hydro Resources Contractors Corporation entered into a contract of sale with the National Irrigation
Authority (NIA) for the construction of Magat River Multipurpose Project in Isabella in August 1978. The
contract provided that Hydro will import parts, construction equipment and tools and taxes and duties to be
paid by NIA. Tools and equipment arrived during 1978 and 1979. NIA reneged on the contract. Therefore causing
the transfer its sale to Hydro in seperate dates in December 6, 1982 and March 24, 1983. Executive Order 860 took
effect during December 21, 1982 provided for 3% ad valorem tax on importations and it specifically provided
that it should have no retroactive effect. During the contract of sale execution, Hydro was assessed and paid the
said 3% ad valorem tax worth P 281,591 under protest. The Hydro when filing for refund with Customs Commissioner
who indorsed the approval of the refund but was denied by the Secretary of Finance and motion was denied by
the Court of Tax Appeals.
Issue: W/N should the Executive Order 860 should have a retroactive effect.
Held: No, The Court of Tax Appeals erred in applying a retroactive effect for the Executive Order therefore should
not have been subject to the additional 3% ad valorem tax. In general tax laws are not retroactive in nature. Not
only that Executive Order 860 specifically provides that it is not retroactive in nature, but also when the
conditional contract of sale was executed, its had a suspensive condition contemplated in the Civil Code
(Article 1187) where it returned ownership to the seller Hydro because NIA was not able to comply with its part
of the contract, it was deemed executed as if during the constitution of the obligation which was in 1978 and not
in 1982.
11. ENGRACIO FRANCIA, Petitioner, -versus- INTERMEDIATE APPELLATE COURT and HO

FERNANDEZ, Respondents.
G.R. No. L-67649, THIRD DIVISION, June 28, 1988, GUTIERREZ, JR., J.
This principal contention of the petitioner has no merit as there can be no off-setting of taxes against the
claims that the taxpayer may have against the government. A claim for taxes is not such a debt, demand,
contract or judgment as is allowed to be set-off. Taxes are not in the nature of contracts between the parties
but grow out of duty to and are the positive acts of the government to the making and enforcing of which, the
personal consent of individual taxpayers is not required. Government and taxpayer are not mutually creditors
20
and debtors of each other. As such, a person cannot refuse to pay a tax on the ground that the government
owes him an amount equal to or greater than the tax being collected. The collection of a tax cannot await the
results of a lawsuit against the government.
FACTS:
Engracio Francia is the registered owner of a residential lot and a two-story house built upon it. A 125-square
meter portion of Francia's property was expropriated by the Republic of the Philippines for the sum of
P4,116.00. From 1963 up to 1977, Francia failed to pay his real estate taxes. Thus, his property was sold at
public auction in order to satisfy a tax delinquency of P2,400.00.
Francia subsequently filed a complaint to annul the auction sale. He averred that his tax delinquency of
P2,400.00 has been extinguished by legal compensation since P4, 116.00 was owed to him by the government
when a portion of his land was expropriated.
The lower court rendered a decision in favor of the highest bidder in the auction sale. This was affirmed by the
Intermediate Appellate Court .
ISSUE:
Whether the tax delinquency of Francia has been extinguished by legal compensation. (NO)
RULING:
By legal compensation, due and demandable obligations of persons, who in their own right are reciprocally
debtors and creditors of each other, are extinguished.
This principal contention of the petitioner has no merit as there can be no off-setting of taxes against the
claims that the taxpayer may have against the government. A claim for taxes is not such a debt, demand,
contract or judgment as is allowed to be set-off. Taxes are not in the nature of contracts between the parties but
grow out of duty to and are the positive acts of the government to the making and enforcing of which, the
personal consent of individual taxpayers is not required. Government and taxpayer are not mutually
creditors and debtors of each other. As such, a person cannot refuse to pay a tax on the ground that the
government owes him an amount equal to or greater than the tax being collected. The collection of a tax cannot
await the results of a lawsuit against the government.
Furthermore, in the case at bar, it must be noted that the tax was due to the city government while the
expropriation was effected by the national government. Moreover, the amount of P4,116.00 for the 125-square
meter portion of his lot was deposited with the Philippine National Bank long before the sale at public auction
of his remaining property. Considering the foregoing, the petitioner’s contention cannot be given due
consideration.
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12. PROGRESSIVE DEVELOPMENT CORPORATION, Petitioner, -versus- QUEZON CITY,
Respondent.
G.R. No. L-36081, THIRD DIVISION, April 24, 1989, FELICIANO, J.
License fee is a legal concept distinguishable from tax: the former is imposed in the exercise of police power
primarily for purposes of regulation, while the latter is imposed under the taxing power primarily for purposes
of raising revenues. If the generating of revenue is the primary purpose and regulation is merely incidental,
the imposition is a tax. If regulation is the primary purpose, the fact that incidentally revenue is also obtained
does not make the imposition a tax.
FACTS:
The City Council of Quezon CIty passed an ordinance known as the Market Code of Quezon City, which
imposed a 5% supervision fee on gross receipts on rentals or lease of privately-owned market spaces in the
City. In case of failure of the owners of the market spaces to pay the tax for 3 consecutive months, the City
shall revoke the permit of the privately-owned market to operate.
Progressive Development Corporation, owner and operator of a public market known as the "Farmers Market
& Shopping Center", filed a Petition for Prohibition with Preliminary Injunction against respondent on the
ground that the supervision fee or license tax imposed by the ordinance the latter imposed is in reality a tax on
income which it may not impose, the same being expressly prohibited by RA 2264, as amended. The petitioner
insists that the "supervision fee" collected from rentals, being a return from capital invested in the construction
of the Farmers Market, practically operates as a tax on income, one of those expressly excepted from
respondent's taxing authority, and thus beyond the latter's competence.
ISSUE:
Whether the tax imposed by respondent on gross receipts of stall rentals is properly characterized as partaking
of the nature of an income tax. (NO)
RULING:
License fee is a legal concept distinguishable from tax: the former is imposed in the exercise of police power
primarily for purposes of regulation, while the latter is imposed under the taxing power primarily for purposes
of raising revenues. If the generating of revenue is the primary purpose and regulation is merely incidental, the
imposition is a tax. If regulation is the primary purpose, the fact that incidentally revenue is also obtained does
not make the imposition a tax.
To be considered a license fee, the imposition questioned must relate to an occupation or activity that so
engages the public interest in health, morals, safety and development as to require regulation for the protection
and promotion of such public interest. The imposition must also bear a reasonable relation to the probable
expenses of inspection, supervision or regulation, taking into account not only the costs of direct regulation but
also its incidental consequences. Such cost may be, as provided for by the Legislature, at the expense of the
persons engaged in the said occupation or activity. It may also be provided that no one shall engage in the
same until a fee or charge sufficient to cover such cost has been paid. Accordingly, a charge of a fixed sum
which bears no relation at all to the cost of inspection and regulation may be held to be a tax rather than an
exercise of the police power.
22
In the case at bar, the "Farmers' Market and Shopping Center" being a public market in the sense of a market
being open to and inviting the patronage of the general public even though privately owned, It is required that
the petitioner's operation thereof be issued a license issued by the respondent in the exercise of the latter’s
police power. Its operation is equivalent to or quite the same as the operation of a government-owned market
as both are established for the rendition of service to the general public which warrants close supervision and
control by the City for the protection of the health of the public by insuring the maintenance of sanitary and
hygienic conditions in the market and compliance of all food stuffs sold therein with applicable food and drug
and related standards, among others. As such, the 5% tax imposed in the ordinance is a license fee for the
regulation of the business in which the petitioner is engaged.
While it is true that the amount imposed by the questioned ordinances may be considered in determining
whether the exaction is really one for revenue or prohibition, it will be presumed to be reasonable. Local
governments are allowed wide discretion in determining the rates of imposable license fees even in cases of
purely police power measures in the absence of proof as to particular municipal conditions and the nature of
the business being taxed as well as other detailed factors relevant to the issue of arbitrariness or
unreasonableness of the questioned rates. The question of reasonableness though is open to judicial inquiry
should be left to the discretion of municipal authorities. Courts will go slow in writing off an ordinance as
unreasonable unless the amount is so excessive as to be prohibitory, arbitrary, unreasonable, oppressive, or
confiscatory.
In the case at bar, petitioner has not shown that the rate of the gross receipts tax is so unreasonably large and
excessive and so grossly disproportionate. The use of the gross amount of stall rentals as basis for determining
the collectible amount of license tax, does not by itself, convert or render the license tax into a prohibited city
tax on income. Moreover, it must be noted that the higher the amount of stall rentals means the higher the
aggregate volume of foodstuffs and related items sold in petitioner's privately owned market. As such, greater
should be the extent and frequency of inspection and supervision that may be reasonably required in the
interest of the buying public.
13. Apostolic Prefect of Mountain Province v City Treasurer of Baguio City (1941)
Apostolic Prefect of Mountain Province v City Treasurer of Baguio City GR No 47252, April 18, 1941
FACTS:
The Apostolic Prefect is a corporation sole, of religious character, organized under the Philippine laws, and
with residence
in Baguio. The City imposed a special assessment against properties within its territorial jurisdiction, including
those of the Apostolic Prefect, which benefits from its drainage and sewerage system. The Apostolic Prefect
contends that its properties should be free from tax.
ISSUE:
Is the Apostolic Prefect exempt from paying?
23
RULING:
No, it is liable.
In its broad meaning, tax includes both general taxes and special assessment. Yet actually, there is a recognized
distinction between them in that assessment is confined to local impositions upon property for the payment of
the cost of public improvements in its immediate vicinity and levied with reference to special benefits to the
property assessed.
A special assessment is not, strictly speaking, a tax; and neither the decree nor the Constitution exempt the
Apostolic Prefect from payment of said special assessment.
Furthermore, arguendo that exemption may encompass such assessment, the Apostolic Prefect cannot claim
exemption as it has not proven the property in question is used exclusively for religious purposes; but that it
appears that the same is being used to other non-religious purposes.
Thus, the Apostolic Prefect is required to pay the special assessment.
In 1937, an ordinance (Ordinance No. 137: Special Assessment List, City of Baguio) was passed in the City of
Baguio. The said ordinance sought to assess properties of property owners within the defined city limits. The
Apostolic Prefect of Mt. Province (APMP), on the other hand, is a religious corporation duly established under
Philippine laws. Pursuant to the ordinance, it paid a total amount of P1,019.37 in protest. APMP later averred
that it should be exempt from the said special contribution since as a religious institution, it has a
constitutionally guaranteed right not to be taxed including its properties.
ISSUE: Whether or not APMP is exempt from taxes.
HELD: No. In the first place, the ordinance was in the nature of an assessment and not a taxation.
The test of exemption from taxation is the use of the property for purposes mentioned in the Constitution.
Based on Justice Cooley’s words:
While the word ‘tax’ in its broad meaning, includes both general taxes and special assessments, and in a
general sense a tax is an assessment, and an assessment is a tax, yet there is a recognized distinction between
them in that assessment is confined to local impositions upon property for the payment of the cost of public
improvements in its immediate vicinity and levied with reference to special benefits to the property assessed.
The differences between a special assessment and a tax are that (1) a special assessment can be levied
only on land; (2) a special assessment cannot (at least in most states) be made a personal liability of the
person assessed; (3) a special assessment is based wholly on benefits; and (4) a special assessment is
exceptional both as to time and locality. The imposition of a charge on all property, real and personal, in a
prescribed area, is a tax and not an assessment, although the purpose is to make a local improvement on a
street or highway. A charge imposed only on property owners benefited is a special assessment rather than a
tax notwithstanding the statute calls it a tax.
In the case at bar, the Prefect cannot claim exemption because the assessment is not taxation per se but rather a
system for the benefits of the inhabitants of the city.
14. G.R. No. L-29485 November 21, 1980
24
COMMISSIONER OF INTERNAL REVENUE, petitioner,
vs.
AYALA SECURITIES CORPORATION and THE HONORABLE COURT OF TAX
APPEALS, respondents.
FACTS: On February 21, 1961, the Commissioner of Internal Revenue made an assessment on Ayala
Securities Corporation in the sum of 758,687.04 as 25% surtax and interest on its accumulated surplus of
2,758,442.37 for its fiscal year ending September 30, 1955. Ayala invoked the defense of prescription against
the right of CIR to assess the said tax. It is contended that since its income tax return for 1957 was filed in
1958, and with the clarification by Ayala in its letter dated May 14, 1963, that the amount sought to be
collected was their surtax liability under Section 25 rather than deficiency corporate income tax under Section
24 of the National Internal Revenue Code, the assessment has already prescribed under Section 331 of the
same Code. The Court of Tax Appeals ruled that the assessment fell under the 5-year prescriptive period
provided in Section 331 of the NIRC and that the assessment had, therefore, been made after the expiration of
the said five-year prescriptive period and was of no binding force and effect.
ISSUE: Whether or not the period to collect the tax on accumulated surplus has prescribed?
RULING: No. the Court's decision of April 8, 1976 is set aside and in lieu thereof, judgment is hereby
rendered ordering respondent corporation to pay the assessment in the sum of P758,687.04 as 25% surtax on
its unreasonably accumulated surplus, plus the 5% surcharge and 1% monthly interest thereon, pursuant to
section 51 (e) of the National Internal Revenue Code, as amended by R. A. 2343.
RATIO: The Court is persuaded by the fundamental principle invoked by the Commission of Internal
Revenue that limitations upon the right of the government to assess and collect taxes will not be presumed in
the absence of clear legislation to the contrary and that where the government has not by express statutory
provision provided a limitation upon its right to assess unpaid taxes, such right is imprescriptible. There is no
such time limit on the right of the Commissioner of Internal Revenue to assess the 25% tax on
unreasonably accumulated surplus provided in section 25 of the Tax Code, since there is no express statutory
provision limiting such right or providing for its prescription. The underlying purpose of the additional tax in
question on a corporation's improperly accumulated profits or surplus is as set forth in the text of section 25 of
the Tax Code itself 1 to avoid the situation where a corporation unduly retains its surplus instead of declaring
and paving dividends to its shareholders or members who would then have to pay the income tax due on such
dividends received by them.
15. EUSEBIO VILLANUEVA, ET AL., plaintiff-appellee -versus- CITY OF ILOILO,

G.R. No. L-26521, EN BANC, December 28, 1968, CASTRO, J.
The contention that the plaintiffs-appellees are doubly taxed because they are paying the real estate taxes and
the tenement tax imposed by the ordinance in question, is also devoid of merit. It is a well- settled rule that a
25
license tax may be levied upon a business or occupation although the land or property used in connection
therewith is subject to property tax. The State may collect an ad valorem tax on property used in a calling, and
at the same time impose a license tax on that calling, the imposition of the latter kind of tax being in no sense a
double tax.
FACTS:
On September 30, 1946 the municipal board of Iloilo City enacted Ordinance 86, imposing license tax fees as
follows: (1) tenement house (casa de vecindad), P25.00 annually; (2) tenement house, partly or wholly engaged
in or dedicated to business in the streets of J.M. Basa, Iznart and Aldeguer, P24.00 per apartment; (3) tenement
house, partly or wholly engaged in business in any other streets, P12.00 per apartment. The validity and
constitutionality of this ordinance were challenged by the spouses Eusebio Villanueva and Remedies Sian
Villanueva, owners of four tenement houses containing 34 apartments. This Court, in City of Iloilo vs.
Remedios Sian Villanueva and Eusebio Villanueva, L-12695, March 23, 1959, declared the ordinance ultra
vires, "it not appearing that the power to tax owners of tenement houses is one among those clearly and
expressly granted to the City of Iloilo by its Charter."
On January 15, 1960 the municipal board of Iloilo City, believing, obviously, that with the passage of Republic
Act 2264, otherwise known as the Local Autonomy Act, it had acquired the authority or power to enact an
ordinance similar to that previously declared by this Court as ultra vires, enacted Ordinance 11, series of 1960.
In Iloilo City, the appellees Eusebio Villanueva and Remedios S. Villanueva are owners of five tenement
houses, aggregately containing 43 apartments, while the other appellees and the same Remedios S. Villanueva
are owners of ten apartments. Each of the appellees' apartments has a door leading to a street and is rented by
either a Filipino or Chinese merchant. The first floor is utilized as a store, while the second floor is used as a
dwelling of the owner of the store. Eusebio Villanueva owns, likewise, apartment buildings for rent in
Bacolod, Dumaguete City, Baguio City and Quezon City, which cities, according to him, do not impose
tenement or apartment taxes.
By virtue of the ordinance in question, the appellant City collected from spouses Eusebio Villanueva and
Remedios S. Villanueva, for the years 1960-1964, the sum of P5,824.30, and from the appellees Pio Sian
Melliza, Teresita S. Topacio, and Remedios S. Villanueva, for the years 1960-1964, the sum of P1,317.00.
Eusebio Villanueva has likewise been paying real estate taxes on his property.
On July 11, 1962 and April 24, 1964, the plaintiffs-appellees filed a complaint, and an amended complaint,
respectively, against the City of Iloilo, in the aforementioned court, praying that Ordinance 11, series of 1960,
be declared "invalid for being beyond the powers of the Municipal Council of the City of Iloilo to enact, and
unconstitutional for being violative of the rule as to uniformity of taxation and for depriving said plaintiffs of
the equal protection clause of the Constitution," and that the City be ordered to refund the amounts collected
from them under the said ordinance.
The trial court condemned the ordinance as constituting "not only double taxation but treble at that," because
"buildings pay real estate taxes and also income taxes as provided for in Sec. 182 (A)
(3) (s) of the National Internal Revenue Code, besides the tenement tax under the said ordinance."
26
ISSUE:
Is Ordinance 11, series of 1960, of the City of Iloilo, illegal because it imposes double taxation? (NO)
RULING:
Obviously, what the trial court refers to as "income taxes" are the fixed taxes on business and occupation
provided for in section 182, Title V, of the National Internal Revenue Code, by virtue of which persons
engaged in "leasing or renting property, whether on their account as principals or as owners of rental property
or properties," are considered "real estate dealers" and are taxed according to the amount of their annual
income.
While it is true that the plaintiffs-appellees are taxable under the aforesaid provisions of the National Internal
Revenue Code as real estate dealers, and still taxable under the ordinance in question, the argument against
double taxation may not be invoked. The same tax may be imposed by the national government as well as by
the local government. There is nothing inherently obnoxious in the exaction of license fees or taxes with
respect to the same occupation, calling or activity by both the State and a political subdivision thereof.
The contention that the plaintiffs-appellees are doubly taxed because they are paying the real estate taxes and
the tenement tax imposed by the ordinance in question, is also devoid of merit. It is a well-settled rule that a
license tax may be levied upon a business or occupation although the land or property used in connection
therewith is subject to property tax. The State may collect an ad valorem tax on property used in a calling, and
at the same time impose a license tax on that calling, the imposition of the latter kind of tax being in no sensea
double tax.
"In order to constitute double taxation in the objectionable or prohibited sense the same property must be taxed
twice when it should be taxed but once; both taxes must be imposed on the same property or subject-matter, for
the same purpose, by the same State, Government, or taxing authority, within the same jurisdiction or taxing
district, during the same taxing period, and they must be the same kind or character of tax." It has been shown
that a real estate tax and the tenement tax imposed by the ordinance, although imposed by the sametaxing
authority, are not of the same kind or character.
At all events, there is no constitutional prohibition against double taxation in the Philippines. It is something
not favored, but is permissible, provided some other constitutional requirement is not thereby violated, such as
the requirement that taxes must be uniform.
16. THE CITY OF MANILA, LIBERTY M. TOLEDO, in her capacity as THE TREASURER OF
MANILA and JOSEPHSANTIAGO, in his capacity as the CHIEF OF THE LICENSE DIVISION OF
CITY OF MANILA, - versus - COCA-COLA BOTTLERS PHILIPPINES, INC.,
27
G.R. No. 181845 August 4, 2009
FACTS This case is a Petition for Review on Certiorari under Rule 45 of the Revised Rules of Civil
Procedure seeking to review and reverse the Decision dated
18 January 2008 and Resolution2 dated 18 February 2008 of the Court of Tax Appeals en banc (CTA en
banc) in C.T.A. EB No. 307.
Petitioner City of Manila is a public corporation empowered to collect and assess business taxes, revenue fees,
and permit fees, through its officers, petitioners Toledo and Santiago, in their capacities as City Treasurer and
Chief of the Licensing Division, respectively. Respondent Coca-Cola Bottlers Philippines, Inc. is a corporation
engaged in the business of manufacturing and selling beverages, and which maintains a sales office in the City
of Manila. Prior to 25 February 2000, respondent had been paying the City of Manila local business tax only
under Section 14 of Tax Ordinance No. 7794,6 being expressly exempted from the business tax under Section
21 of the same tax ordinance. Tax Ordinance No. 7794 provide: Section 14. Tax on Manufacturers, Assemblers
and Other Processors. There is hereby imposed a graduated tax on manufacturers, assemblers, repackers,
processors, brewers, distillers, rectifiers, and compounders of liquors, distilled spirits, and wines or
manufacturers of any article of commerce of whatever kind or nature, in accordance with any of the following
schedule:
over P6,500,000.00 up to P25,000,000.00------------ P36,000.00 plus 50% of 1% in

excess of P6,500,000.00
Petitioner City of Manila subsequently approved on 25 February 2000, Tax Ordinance No. 7988,7 amending
certain sections of Tax Ordinance No. 7794, particularly: (1) Section 14, by increasing the tax rates applicable
to certain establishments operating within the territorial jurisdiction of the City of Manila;
and (2) Section 21, by deleting the proviso found therein, which stated that all registered businesses in the City
of Manila that are already paying the aforementioned tax shall be exempted from payment thereof
Tax Ordinances No. 7988 and No. 8011 were later declared by the Court null and void (1) Tax Ordinance No.
7988 was enacted in contravention of the provisions of the Local Government Code (LGC) of 1991 and its
implementing rules and regulations; and (2) Tax Ordinance No. 8011 could not cure the defects of Tax
Ordinance No. 7988, which did not legally exist. However, before the Court could declare Tax Ordinance No.
7988 and Tax Ordinance No. 8011 null and void, petitioner City of Manila assessed respondent on the basis of
Section 21 of Tax Ordinance No. 7794, as amended by the aforementioned tax ordinances, for deficiency local
business taxes, penalties, and interest, in the total amount of P18,583,932.04, for the third and fourth quarters
of the year 2000. Respondent filed a protest with petitioner Toledo on the ground that the said assessment
amounted to double taxation, as respondent was taxed twice, i.e., under Sections 14 and 21 of Tax Ordinance
No. 7794, as amended by Tax Ordinances No. 7988 and No. 8011.
Petitioner Toledo did not respond to the protest of respondent. On 14 July 2006, the RTC rendered a Decision9
dismissing Civil Case No. 03-107088. The RTC ruled that the business taxes imposed upon the respondent
under Sections 14 and 21 of Tax Ordinance No. 7988, as amended, were not of the same kind or character;
therefore, there was no double taxation. The RTC, though, in an Order10 dated 16 November 2006, granted the
28
Motion for Reconsideration of respondent, decreed the cancellation and withdrawal of the assessment against
the latter, and barred petitioners from further imposing/assessing local business taxes against respondent under
Section 21 of Tax Ordinance No. 7794, as amended by Tax Ordinance No. 7988 and Tax Ordinance No. 8011
Petitioners filed an appeal before the Court of Tax Appeal. However, CTA dismissed the appeal for failure to
perfect the appeal.
ISSUES (1) Whether or not the enforcement of Section 21 of Tax Ordinance No. 7794, as amended,
constitutes Double Taxation.
HELD Petitioners insist that even with the declaration of nullity of Tax Ordinance No. 7988 and Tax
Ordinance No. 8011, respondent could still be made liable for local business taxes under both Sections 14 and
21 of Tax Ordinance No. 7944 as they were originally read, without the amendment by the null and void tax
ordinances.
Emphasis must be given to the fact that prior to the passage of Tax Ordinance No. 7988 and Tax Ordinance
No. 8011 by petitioner City of Manila, petitioners subjected and assessed respondent only for the local
business tax under Section 14 of Tax Ordinance No. 7794, but never under Section 21 of the same. This was
due to the clear and unambiguous proviso in Section 21 of Tax Ordinance No. 7794, which stated that all
registered business in the City of Manila that are already paying the aforementioned tax shall be exempted
from payment thereof. The aforementioned tax referred to in said proviso refers to local business tax. The
aforementioned tax referred to in said proviso refers to local business tax. Stated differently, Section 21 of Tax
Ordinance No. 7794 exempts from the payment of the local business tax imposed by said section, businesses
that are already paying such tax under other sections of the same tax ordinance. The said proviso, however,
was deleted from Section 21 of Tax Ordinance No. 7794 by Tax Ordinances No. 7988 and No. 8011.
Following this deletion, petitioners began assessing respondent for the local business tax under Section 21 of
Tax Ordinance No. 7794, as amended.
Accordingly, respondent should not have been subjected to the local business tax under Section 21 of Tax
Ordinance No. 7794 for the third and fourth quarters of 2000, given its exemption therefrom since it was
already paying the local business tax under Section 14 of the same ordinance. Petitioners obstinately ignore the
exempting proviso in Section 21 of Tax Ordinance No. 7794, to their own detriment. Said exempting proviso
was precisely included in said section so as to avoid double taxation.
Double taxation means taxing the same property twice when it should be taxed only once; that is, taxing the
same person twice by the same jurisdiction for the same thing. It is obnoxious when the taxpayer is taxed
twice, when it should be but once. Otherwise described as direct duplicate taxation, the two taxes must be
imposed on the same subject matter, for the same purpose, by the same taxing
authority, within the same jurisdiction, during the same taxing period; and the taxes must be of the same kind
or character.
The distinction petitioners attempt to make between the taxes under Sections 14 and 21 of Tax Ordinance No.
7794 is specious. The Court revisits Section 143 of the LGC, the very source of the power of municipalities
29
and cities to impose a local business tax, and to which any local business tax imposed by petitioner City of
Manila must conform. It is apparent from a perusal thereof that when a municipality or city has already
imposed a business tax on manufacturers, etc. of liquors, distilled spirits, wines, and any other article of
commerce, pursuant to Section 143(a) of the LGC, said municipality or city may no longer subject the same
manufacturers, etc. to a business tax under Section 143(h) of the same Code.
Section 143(h) may be imposed only on businesses that are subject to excise tax, VAT, or percentage tax under
the NIRC, and that are not otherwise specified in preceding paragraphs. In the same way, businesses such as
respondents, already subject to a local business tax under Section 14 of Tax Ordinance No. 7794 [which is
based on Section 143(a) of the LGC], can no longer be made liable for local business tax under Section 21 of
the same Tax Ordinance [which is based on Section 143(h) of the LGC].
WHEREFORE, premises considered, the instant Petition for Review on

Certiorari is hereby DENIED. No costs.
17. COMMISSIONER OF INTERNAL REVENUE, petitioner -versus- THE ESTATE OF BENIGNO P.

TODA, JR., Represented by Special Co-administrators Lorna Kapunan and Mario Luza Bautista,
respondents.
G.R. No. 147188, FIRST DIVISION, September 14, 2004, DAVIDE, JR., C.J.
The scheme resorted to by CIC in making it appear that there were two sales of the subject properties,
i.e. from CIC to Altonaga, and then from Altonaga to RMI cannot be considered a legitimate tax planning.
Such scheme is tainted with fraud. Altonaga’s sole purpose of acquiring and transferring title of the subject
properties on the same day was to create a tax shelter. The sale to him was merely a tax ploy, a sham, and
without business purpose and economic substance. Doubtless, the execution of the two sales was calculated
to mislead the BIR with the end in view of reducing the consequent income tax liability. This is a case of tax
evasion.
F A C T S:
On 2 March 1989, CIC authorized Benigno P. Toda, Jr., President and owner of 99.991% of its outstanding
capital stock, to sell the Cibeles Building. On 30 August 1989, Toda purportedly sold the property for P100
million to Rafael A. Altonaga, who, in turn, sold the same property on the same day to Royal Match Inc.
(RMI) for P200 million. Three and a half years later Toda died. On 29 March
1994, the BIR sent an assessment notice and demand letter to the CIC for deficiency income tax for the year
1989. On 27 January 1995, the Estate of Benigno P. Toda, Jr., represented by special co- administrators Lorna
Kapunan and Mario Luza Bautista, received a Notice of Assessment from the CIR for deficiency income tax
for the year 1989. The Estate thereafter filed a letter of protest. The Commissioner dismissed the protest. On 15
February 1996, the Estate filed a petition for review with the CTA. In its decision the CTA held that the
Commissioner failed to prove that CIC committed fraud to deprive the government of the taxes due it. It ruled
that even assuming that a pre- conceived scheme was adopted by CIC, the same constituted mere tax
avoidance, and not tax evasion. Hence, the CTA declared that the Estate is not liable for deficiency of income
tax. The Commissioner filed a petition for review with the Court of Appeals. The Court of Appeals affirmed
30
the decision of the CTA, hence, this recourse.
I S S U E:
Whether or not this is a case of tax evasion or tax avoidance.
H E L D:
CIC committed tax evasion.
Tax avoidance and Tax evasion are the two most common ways used by taxpayers in escaping from taxation.
Tax avoidance is the tax saving device within the means sanctioned by law. This method should be used by the
taxpayer in good faith and at arm’s length. Tax evasion, on the other hand, is a scheme used outside of those
lawful means and when availed of, it usually subjects the taxpayer to further or additional civil of criminal
liabilities.
Tax evasion connotes the integration of three factors: (1) the end to be achieved, i.e. the payment of less than
that known by the taxpayer to be legally due, or the non-payment of tax when it is shown that a tax is due; (2)
an accompanying state of mind which is described as being “evil,” in “bad faith,” “willfull,” or “deliberate
and not accidental”; and (3) a course of action or failure of action which is unlawful.
All these factors are present in the instant case. The scheme resorted to by CIC in making it appear that there
were two sales of the subject properties, i.e. from CIC to Altonaga, and then from Altonaga to RMI cannot be
considered a legitimate tax planning. Such scheme is tainted with fraud. Altonaga’s sole purpose of acquiring
and transferring title of the subject properties on the same day was to create a tax shelter. The sale to him was
merely a tax ploy, a sham, and without business purpose and economic substance. Doubtless, the execution of
the two sales was calculated to mislead the BIR with the end in view of reducing the consequent income tax
liability.
18. Pascual vs. Secretary of Public Works PASCUAL vs. SECRETARY OF PUBLIC WORKS 110
PHIL 331
GR No. L-10405, December 29, 1960
"A law appropriating the public revenue is invalid if the public advantage or benefit, derived from such
expenditure, is merely incidental in the promotion of a particular enterprise."
FACTS: Governor Wenceslao Pascual of Rizal instituted this action for declaratory relief, with injunction,
upon the ground that RA No. 920, which apropriates funds for public works particularly for the construction
and improvement of Pasig feeder road terminals. Some of the feeder roads, however, as alleged and as
contained in the tracings attached to the petition, were nothing but projected and planned subdivision roads, not
yet constructed within the Antonio Subdivision, belonging to private respondent Zulueta, situated at Pasig,
Rizal; and which projected feeder roads do not connect any government property or any important premises to
the main highway. The respondents' contention is that there is public purpose because people living in the
subdivision will directly be benefitted from the construction of the roads, and the government also gains from
the donation of the land supposed to be occupied by the streets, made by its owner to the government.
31
ISSUE: Should incidental gains by the public be considered "public purpose" for the purpose of justifying an
expenditure of the government?
HELD: No. It is a general rule that the legislature is without power to appropriate public revenue for anything
but a public purpose. It is the essential character of the direct object of the expenditure which must determine
its validity as justifying a tax, and not the magnitude of the interest to be affected nor the degree to which the
general advantage of the community, and thus the public welfare, may be ultimately benefited by their
promotion. Incidental to the public or to the state, which results from the promotion of private interest and the
prosperity of private enterprises or business, does not justify their aid by the use public money.
The test of the constitutionality of a statute requiring the use of public funds is whether the statute is designed
to promote the public interest, as opposed to the furtherance of the advantage of individuals, although each
advantage to individuals might incidentally serve the public.
In 1953, Republic Act No. 920 was passed. This law appropriated P85,000.00 “for the construction,
reconstruction, repair, extension and improvement Pasig feeder road terminals”. Wenceslao Pascual, then
governor of Rizal, assailed the validity of the law. He claimed that the appropriation was actually going to be
used for private use for the terminals sought to be improved were part of the Antonio Subdivision. The said
Subdivision is owned by Senator Jose Zulueta who was a member of the same Senate that passed and approved
the same RA. Pascual claimed that Zulueta misrepresented in Congress the fact that he owns those terminals
and that his property would be unlawfully enriched at the expense of the taxpayers if the said RA would be
upheld. Pascual then prayed that the Secretary of Public Works and Communications be restrained from
releasing funds for such purpose. Zulueta, on the other hand, perhaps as an afterthought, donated the said
property to the City of Pasig.
ISSUE: Whether or not the appropriation is valid.
HELD: No, the appropriation is void for being an appropriation for a private purpose. The subsequent donation
of the property to the government to make the property public does not cure the constitutional defect. The fact
that the law was passed when the said property was still a private property cannot be ignored. “In accordance
with the rule that the taxing power must be exercised for public purposes only, money raised by taxation can be
expanded only for public purposes and not for the advantage of private individuals.” Inasmuch as the land on
which the projected feeder roads were to be constructed belonged then to Zulueta, the result is that said
appropriation sought a private purpose, and, hence, was null and void.
WENCESLAO PASCUAL, in his official capacity as Provincial Governor of Rizalpetitioner-appellant, vs

THE SECRETARY OF PUBLIC WORKS AND COMMUNICATIONS, ET AL. respondents-appellees
32
FACTS: (In chronological order) May 1953 - Respondent Jose C. Zulueta (member of the Senate of the
Philippines), addressed a letter to the Municipal Council of Pasig, Rizal, offering to donate Pasig feeder road
terminals to the municipality of Pasig, Rizal. June 13, 1953 - The offer was accepted by the council, subject to
the condition that the donor would submit a plan of the said roads and agree to change the names of two of
them, however, there is no deed of donation in favor of the municipality of Pasig was executed. June 20, 1953 -
Republic Act No. 920, entitled "An Act Appropriating Funds for Public Works" was approved containing an
item of P85,000.00 for the construction, reconstruction, repair, extension and improvement" of Pasig feeder
road terminals. July 10, 1953 - Respondent Zulueta wrote another letter to said council, calling attention to the
approval of Republic Act. No. 920, and the sum of P85,000.00 appropriated therein for the construction of the
projected feeder roads in question; that the municipal council of Pasig endorsed said letter of respondent
Zulueta to the District Engineer of Rizal, who, up to the present "has not made any endorsement thereon.
December 12, 1953 - Respondent Zulueta executed an alleged deed of donation in order to give asemblance of
legality. ** Petitioner, Wenceslao Pascual prayed that said donation violated the provision of our fundamental
law prohibiting members of Congress from being directly or indirectly financially interested in any contract
with the Government, and RA No. 920, hence, is unconstitutional, as well as null and void ab initio, for the
construction of the projected feeder roads in question with public funds would greatly enhance or increase the
value of the aforementioned subdivision of respondent Zulueta and will relieve him from the burden of
constructing his subdivision streets or roads at his own expense.**Respondents moved to dismiss the
petition on the ground that the requisites of questioning the constitutionality of the said act is incomplete.
ISSUE: Whether or not Republic Act No. 920 is valid and does not contravene the Constitution in requiring
theuse of public funds.
HELD: The application of said Republic Act No. 920 to Pasig Road feeder is null and void. Court ordered a
writ of preliminary injunction in favor of the petitioner, and circumstances surrounding this case sufficiently
justify petitioners action in contesting the appropriation and donation in question.
19. THE CITY GOVERNMENT OF QUEZON CITY, AND THE CITY TREASURER OF QUEZON
CITY, DR. VICTOR B. ENRIGA, Petitioners, vs. BAYAN TELECOMMUNICATIONS, INC.,
Respondent.
G.R. No. 162015, SECOND DIVISION, March 6, 2006, GARCIA,J.
The power to tax is primarily vested in the Congress; however, in our jurisdiction, it may be exercised by
local legislative bodies, no longer merely be virtue of a valid delegation as before, but pursuant to direct
authority conferred by Section 5, Article X of the Constitution. Under the latter, the exercise of the power may
be subject to such guidelines and limitations as the Congress may provide which, however, must be consistent
with the basic policy of local autonomy.
Clearly then, while a new slant on the subject of local taxation now prevails in the sense that the former
doctrine of local government units’ delegated power to tax had been effectively modified with Article X,
Section 5 of the 1987 Constitution now in place, the basic doctrine on local taxation remains essentially the
same. For as the Court stressed in Mactan, "the power to tax is [still] primarily vested in the Congress."
33
There can really be no dispute that the power of the Quezon City Government to tax is limited by Section 232
of the LGC which expressly provides that "a province or city or municipality within the Metropolitan Manila
Area may levy an annual ad valorem tax on real property such as land, building, machinery, and other
improvement not hereinafter specifically exempted." Under this law, the Legislature highlighted its power to
thereafter exempt certain realties from the taxing power of local government units. An interpretation
denying Congress such power to exempt would reduce the phrase "not hereinafter specifically exempted" as a
pure jargon, without meaning whatsoever. Needless to state, such absurd situation is unacceptable.
FACTS:
Respondent Bayan Telecommunications, Inc. (Bayantel) is a legislative franchise holder under Republic Act
(Rep. Act) No. 3259 to establish and operate radio stations for domestic telecommunications, radiophone,
broadcasting and telecasting.
Of relevance to this controversy is the tax provision of Rep. Act No. 3259, embodied in Section 14 thereof,
which reads:
SECTION 14. (a) The grantee shall be liable to pay the same taxes on its real estate, buildings and personal
property, exclusive of the franchise, as other persons or corporations are now or hereafter may be required by
law to pay. (b) The grantee shall further pay to the Treasurer of the Philippines each year, within ten days after
the audit and approval of the accounts as prescribed in this Act, one and one-half per centum of all gross
receipts from the business transacted under this franchise by the said grantee (Emphasis supplied).
However, with the LGC’s taking effect on January 1, 1992, Bayantel’s "exemption" from real estate taxes for
properties of whatever kind located within the Metro Manila area was, by force of Section 234 of the Code,
supra, expressly withdrawn. But, not long thereafter, however, or on July 20, 1992, Congress passed Rep. Act
No. 7633 amending Bayantel’s original franchise. Worthy of note is that Section 11 of Rep. Act No. 7633 is a
virtual reenacment of the tax provision, i.e., Section 14, supra, of Bayantel’s original franchise under Rep. Act
No. 3259.
Stated otherwise, Section 14 of Rep. Act No. 3259 which was deemed impliedly repealed by Section 234 of
the LGC was expressly revived under Section 14 of Rep. Act No. 7633. In concrete terms, the realty tax
exemption heretofore enjoyed by Bayantel under its original franchise, but subsequently withdrawn by force of
Section 234 of the LGC, has been restored by Section 14 of Rep. Act No. 7633.
ISSUE:
Whether or not Bayantel’s real properties in Quezon City are, under its franchise, exempt from real property
tax. (YES)
RULING:
The Court has taken stock of the fact that by virtue of Section 5, Article X of the 1987 Constitution, local
governments are empowered to levy taxes. And pursuant to this constitutional empowerment, juxtaposed with
34
Section 232 of the LGC, the Quezon City government enacted in 1993 its local Revenue Code, imposing real
property tax on all real properties found within its territorial jurisdiction. And as earlier stated, the City’s
Revenue Code, just like the LGC, expressly withdrew, under Section 230 thereof, supra, all tax exemption
privileges in general.
This thus raises the question of whether or not the City’s Revenue Code pursuant to which the city treasurer of
Quezon City levied real property taxes against Bayantel’s real properties located within the City effectively
withdrew the tax exemption enjoyed by Bayantel under its franchise, as amended.
Bayantel answers the poser in the negative arguing that once again it is only "liable to pay the same taxes, as
any other persons or corporations on all its real or personal properties, exclusive of its franchise."
Bayantel’s posture is well-taken. While the system of local government taxation has changed with the onset of
the 1987 Constitution, the power of local government units to tax is still limited. As we explained in Mactan
Cebu International Airport Authority:
The power to tax is primarily vested in the Congress; however, in our jurisdiction, it may be exercised by local
legislative bodies, no longer merely be virtue of a valid delegation as before, but pursuant to direct authority
conferred by Section 5, Article X of the Constitution. Under the latter, the exercise of the power may be
subject to such guidelines and limitations as the Congress may provide which, however, must be consistent
with the basic policy of local autonomy.
Clearly then, while a new slant on the subject of local taxation now prevails in the sense that the former
doctrine of local government units’ delegated power to tax had been effectively modified with Article X,
Section 5 of the 1987 Constitution now in place, the basic doctrine on local taxation remains essentially the
same. For as the Court stressed in Mactan, "the power to tax is [still] primarily vested in the Congress."
This new perspective is best articulated by Fr. Joaquin G. Bernas, S.J., himself a Commissioner of the 1986
Constitutional Commission which crafted the 1987 Constitution, thus:
What is the effect of Section 5 on the fiscal position of municipal corporations? Section 5 does not change the
doctrine that municipal corporations do not possess inherent powers of taxation. What it does is to confer
municipal corporations a general power to levy taxes and otherwise create sources of revenue. They no longer
have to wait for a statutory grant of these powers. The power of the legislative authority relative to the fiscal
powers of local governments has been reduced to the authority to impose limitations on municipal powers.
Moreover, these limitations must be "consistent with the basic policy of local autonomy." The important legal
effect of Section 5 is thus to reverse the principle that doubts are resolved against municipal corporations.
Henceforth, in interpreting statutory provisions on municipal fiscal powers, doubts will be resolved in favor of
municipal corporations. It is understood, however, that taxes imposed by local government must be for a public
purpose, uniform within a locality, must not be confiscatory, and must be within the jurisdiction of the local
unit to pass.
In net effect, the controversy presently before the Court involves, at bottom, a clash between the inherent
taxing power of the legislature, which necessarily includes the power to exempt, and the local government’s
35
delegated power to tax under the aegis of the 1987 Constitution.
Now to go back to the Quezon City Revenue Code which imposed real estate taxes on all real properties within
the city’s territory and removed exemptions theretofore "previously granted to, or presently enjoyed by all
persons, whether natural or juridical ….," there can really be no dispute that the power of the Quezon City
Government to tax is limited by Section 232 of the LGC which expressly provides that "a province or city or
municipality within the Metropolitan Manila Area may levy an annual ad valorem tax on real property such
as land, building, machinery, and other improvement not hereinafter specifically exempted." Under this law,
the Legislature highlighted its power to thereafter exempt certain realties from the taxing power of local
government units. An interpretation denying Congress such power to exempt would reduce the phrase "not
hereinafter specifically exempted" as a pure jargon, without meaning whatsoever. Needless to state, such
absurd situation is unacceptable.
For sure, in Philippine Long Distance Telephone Company, Inc. (PLDT) vs. City of Davao, this Court has
upheld the power of Congress to grant exemptions over the power of local government units to impose taxes.
There, the Court wrote:
Indeed, the grant of taxing powers to local government units under the Constitution and the LGC does not
affect the power of Congress to grant exemptions to certain persons, pursuant to a declared national policy.
The legal effect of the constitutional grant to local governments simply means that in interpreting statutory
provisions on municipal taxing powers, doubts must be resolved in favor of municipal corporations.
As we see it, then, the issue in this case no longer dwells on whether Congress has the power to exempt
Bayantel’s properties from realty taxes by its enactment of Rep. Act No. 7633 which amended Bayantel’s
original franchise. The more decisive question turns on whether Congress actually did exempt Bayantel’s
properties at all by virtue of Section 11 of Rep. Act No. 7633.
Admittedly, Rep. Act No. 7633 was enacted subsequent to the LGC. Perfectly aware that the LGC has already
withdrawn Bayantel’s former exemption from realty taxes, Congress opted to pass Rep. Act No. 7633 using,
under Section 11 thereof, exactly the same defining phrase "exclusive of this franchise" which was the basis
for Bayantel’s exemption from realty taxes prior to the LGC. In plain language, Section 11 of Rep. Act No.
7633 states that "the grantee, its successors or assigns shall be liable to pay the same taxes on their real estate,
buildings and personal property, exclusive of this franchise, as other persons or corporations are now or
hereafter may be required by law to pay." The Court views this subsequent piece of legislation as an express
and real intention on the part of Congress to once again remove from the LGC’s delegated taxing power, all of
the franchisee’s (Bayantel’s) properties that are actually, directly and exclusively used in the pursuit of its
franchise.
20. Philippine Communications Satellite Corporation vs Alcuaz 180 SCRA 218

Nature of Particular Acts
36
FACTS: By virtue of Republic Act No. 5514, the Philippine Communications Satellite Corporation
(PHILCOMSAT) was granted the authority to “construct and operate such ground facilities as
needed to deliver telecommunications services from the communications satellite system and ground
terminal or terminals” in the Philippines. PHILCOMSAT provides satellite services to companies
like Globe Mackay (now Globe) and PLDT.
Under Section 5 of the same law, PHILCOMSAT was exempt from the jurisdiction, control and
regulation of the Public Service Commission later known as the National Telecommunications
Commission (NTC). However, Executive Order No. 196 was later promulgated and the same has
placed PHILCOMSAT under the jurisdiction of the NTC. Consequently, PHILCOMSAT has to
acquire permit to operate from the NTC in order to continue operating its existing satellites. NTC
gave the necessary permit but it however directed PHILCOMSAT to reduce its current rates by 15%.
NTC based its power to fix the rates on EO 546.
PHILCOMSAT now sues NTC and its commissioner (Jose Luis Alcuaz) assailed the said
directive and holds that the enabling act (EO 546) of the NTC, empowering it to fix rates for public
service communications, does not provide the necessary standards which were constitutionally
required, hence, there is an undue delegation of legislative power, particularly the adjudicatory
powers of NTC. PHILCOMSAT asserts that nowhere in the provisions of EO 546, providing for the
creation of NTC and granting its rate-fixing powers, nor of EO 196, placing PHILCOMSAT under
the jurisdiction of NTC, can it be inferred that NTC is guided by any standard in the exercise of its
rate-fixing and adjudicatory powers. PHILCOMSAT subsequently clarified its said submission to
mean that the order mandating a reduction of certain rates is undue delegation not of legislative but
of quasi-judicial power to NTC, the exercise of which allegedly requires an express conferment by
the legislative body.
ISSUE: Whether or not there is an undue delegation of power.
RULING: No. There is no undue delegation. The power of the NTC to fix rates is limited by the
requirements of public safety, public interest, reasonable feasibility and reasonable rates, which
conjointly more than satisfy the requirements of a valid delegation of legislative power. Fundamental
is the rule that delegation of legislative power may be sustained only upon the ground that some
standard for its exercise is provided and that the legislature in making the delegation has prescribed
the manner of the exercise of the delegated power.
Therefore, when the administrative agency concerned, NTC in this case, establishes a rate, its act
must both be non-confiscatory and must have been established in the manner prescribed by the
legislature; otherwise, in the absence of a fixed standard, the delegation of power becomes
unconstitutional. In case of a delegation of rate-fixing power, the only standard which the legislature
is required to prescribe for the guidance of the administrative authority is that the rate be reasonable
and just. However, it has been held that even in the absence of an express requirement as to
reasonableness, this standard may be implied.
37
However, in this case, it appears that the manner of fixing the rates was done without due process
since no hearing was made in ascertaining the rate imposed upon PHILCOMSAT.
RATIO: What is a just and reasonable rate is not a question of formula but of sound business
judgment based upon the evidence it is a question of fact calling for the exercise of discretion, good
sense, and a fair, enlightened and independent judgment. In determining whether a rate is
confiscatory, it is essential also to consider the given situation, requirements and opportunities of
the utility. A method often employed in determining reasonableness is the fair return upon the value
of the property to the public utility. Competition is also a very important factor in determining the
reasonableness of rates since a carrier is allowed to make such rates as are necessary to meet
competition.
38

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1.

2. BENJAMIN P. GOMEZ vs ENRICO PALOMAR

3. COMMISSIONER OF INTERNAL REVENUE, PETITIONER, -versus- MANUEL B. PINEDA, as

share of each heir in the distributable estate.

4. COMMISSIONER OF INTERNAL REVENUE, PETITIONER, -versus-

5. NATIONAL POWER CORPORATION, Petitioner, -versus- CITY OF CABANATUAN, Respondent.

Whether the petitioner is exempted from payment of local taxes. (NO)

6. G.R. No. 92585 May 8, 1992

ISSUE: WON Caltex is entitled to offsetting DECISION: NO. COA AFFIRMED

7. FRANCISCO I. CHAVEZ, Petitioner, -versus –

8. ABAKADA GURO PARTY LIST (FORMERLY AASJAS) OFFICERS SAMSON S. ALCANTARA

9. RENATO V. DIAZ and AURORA MA. F. TIMBOL, Petitioners, -versus –

11. ENGRACIO FRANCIA, Petitioner, -versus- INTERMEDIATE APPELLATE COURT and HO

Thus, the Apostolic Prefect is required to pay the special assessment.

14. G.R. No. L-29485 November 21, 1980

15. EUSEBIO VILLANUEVA, ET AL., plaintiff-appellee -versus- CITY OF ILOILO,

over P6,500,000.00 up to P25,000,000.00------------ P36,000.00 plus 50% of 1% in

WHEREFORE, premises considered, the instant Petition for Review on

17. COMMISSIONER OF INTERNAL REVENUE, petitioner -versus- THE ESTATE OF BENIGNO P.

Whether or not this is a case of tax evasion or tax avoidance.

ISSUE: Whether or not the appropriation is valid.

WENCESLAO PASCUAL, in his official capacity as Provincial Governor of Rizalpetitioner-appellant, vs

20. Philippine Communications Satellite Corporation vs Alcuaz 180 SCRA 218

ISSUE: Whether or not there is an undue delegation of power.

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