EN BANC

G.R. No. 71977 February 27, 1987DEMETRIO G. DEMETRIA, vs. HON. MANUEL ALBA in his capacity as the MINISTER OF THE

BUDGET, respondents.Ponente: Fernan, J.Facts:

Demetria and others, as taxpayers and members of the Batasang Pambansa, sought to prohibit Alba, then Minister of the Budget, from disbursing funds pursuant to Presidential Decree 1177 or the Budget Reform Decree of 1977. Demetria assailed the constitutionality of Section 44 of the said PD. The primary contention of the petitioner is that Section 44 infringes upon the fundamental law by authorizing illegal transfer of public moneys, amounting to undue delegation of legislative powers and allowing the President to override the safeguards prescribed for approving appropriations. Demetria averred that this is unconstitutional for it violates the 1973 Constitution.

Section 44 states: “The President shall have the authority to transfer any fund, appropriated for the different departments, bureaus, offices and agencies of the Executive Department, which are included in the General Appropriations Act, to any program, project or activity of any department, bureau, or office included in the General Appropriations Act or approved after its enactment.”

It also alleged that the petition has become controversial and hypothetical after the abolition of Sec 16(5), Article VIII of the 1973 Constitution by the Freedom Constitution (which was where the provision under consideration was enacted in pursuant thereof), which states that “No law shall be passed authorizing any transfer of appropriations, however, the President…may by law be authorized to augment any item in the general appropriations law for their respective offices from savings in other items of their respective appropriations.”

ISSUE: Whether or not Sec 44 of PD 1177 amounts to an undue delegation of legislative powers to the executiveHELD: Yes. Section 44 unduly over-extends the division of power.

Paragraph 1, Sec 44 of PD 1177 unduly overreaches the privilege granted under said Section 16(5), Art VIII of the 1973 Constitution (carries verbatim section 16[5], Article VIII of the 1973 Constitution under Section 24[5] of 1987 Constitution). It is stated in the provision that:

Sec. 16[5].  No law shall be passed authorizing any transfer of appropriations, however, the President, the Prime Minister, the Speaker, the Chief Justice of the Supreme Court, and the heads of constitutional commissions may by law be authorized to augment any item in the general appropriations law for their respective offices from savings in other items of their respective appropriations.

It empowers the President to indiscriminately transfer funds from one department, bureau, office or agency of the Executive Department to any program, project or activity of any department, bureau or office included in the General Appropriations Act or approved after its enactment, without regard as to whether or not the funds to be transferred are actually savings in the item from which the same are to be taken, or whether or not the transfer is for the purpose of augmenting the item to which said transfer is to be made. It does not only completely disregard the standards set in the fundamental law, thereby amounting to an undue delegation of legislative powers, but likewise goes beyond the tenor thereof. Indeed, such constitutional infirmities render the provision in question null and void. HOWEVER, transfers of savings within one department from one item to another in the GA Act may be allowed by law in the interest of expediency and efficiency. There is no transfer from one department to another here.

Corine Canaya

EN BANCG.R. No. 115455 August 25, 1994

ARTURO M. TOLENTINO, petitioner, vs. THE SECRETARY OF FINANCE and THE COMMISSIONER OF INTERNAL REVENUE, respondents.

FACTS

RA 7716, otherwise known as the Expanded Value-Added Tax Law, is an act that seeks to widen the tax base of the existing VAT system and enhance its administration by amending the National Internal Revenue Code. There are various suits questioning and challenging the constitutionality of RA 7716 on various grounds.Tolentino contends that RA 7716 did not originate exclusively from the House of Representatives but is a mere consolidation of HB. No. 11197 and SB. No. 1630 and it did not pass three readings on separate days on the Senate thus violating Article VI, Sections 24 and 26(2) of the Constitution, respectively.Art. VI, Section 26(2) provides that:

No bill passed by either House shall become a law unless it has passed three readings on separate days, and printed copies thereof in its final form have been distributed to its Members three days before its passage, except when the President certifies to the necessity of its immediate enactment to meet a public calamity or emergency. Upon the last reading of a bill, no amendment thereto shall be allowed, and the vote thereon shall be taken immediately thereafter, and the yeas and nays entered in the Journal.

ISSUE

Whether or not RA 7716 violated Art. VI, Section 26(2) of the Constitution.

HELD

No.

Art. VI, Sec 26(2) must, therefore, be construed as referring only to bills introduced for the first time in either house of Congress, not to the conference committee report. For if the purpose of requiring three readings is to give members of Congress time to study bills, it cannot be gainsaid that H. No. 11197 was passed in the House after three readings; that in the Senate it was considered on first reading and then referred to a committee of that body; that although the Senate committee did not report out the House bill, it submitted a version (S. No. 1630) which it had prepared by "taking into consideration" the House bill; that for its part the Conference Committee consolidated the two bills and prepared a compromise version; that the Conference Committee Report was thereafter approved by the House and the Senate, presumably after appropriate study by their members. We cannot say that, as a matter of fact, the members of Congress were not fully informed of the provisions of the bill. The allegation that the Conference Committee usurped the legislative power of Congress is, in our view, without warrant in fact and in law. (Ponente: MENDOZA, J.)

Corine Canaya

EN BANC

G.R. No. L-23771 August 4, 1988THE COMMISSIONER OF INTERNAL REVENUE, petitioner, vs. LINGAYEN GULF ELECTRIC POWER CO., INC.

and THE COURT OF TAX APPEALS, respondents.

Ponente: SARMIENTOFACTS:

The respondent taxpayer, Lingayen Gulf Electric Power Co., Inc., operates an electric power plant serving the adjoining municipalities of Lingayen and Binmaley, both in the province of Pangasinan, pursuant to the municipal franchise granted it by their respective municipal councils. Bureau of Internal Revenue (BIR) assessed against and demanded from the private respondent deficiency franchise taxes and surcharges for the years 1946 to 1954 applying the franchise tax rate of 5% on gross receipts from March 1, 1948 to December 31, 1954 as prescribed in Section 259 of the National Internal Revenue Code, instead of the lower rates as provided in the municipal franchises. Respondent submits that R.A. No. 3843 is unconstitutional insofar as it provides for the payment by the private respondent of a franchise tax of 2% of its gross receipts, while other taxpayers similarly situated were subject to the 5% franchise tax imposed in Section 259 of the Tax Code, thereby discriminatory and violative of the rule on uniformity and equality of taxation.

The Commissioner denied the request of the private respondent on the reinvestigation of the case and requested for a conference with a view to settling the liability amicably. Thus, the appeal to the Court of Tax Appeals favored on the Lingayen Gulf Electric Power Co., Inc. on absolving the respondent taxpayer from liability for the deficiency percentage, franchise, and fixed taxes and surcharge assessed against it.

ISSUE:

Whether or not Section 4 of R.A. No. 3843, assuming it is valid, is discriminatory and violative on Art. VI, Sec 28 (1) of the Philippine Constitution

HELD:

YES, the appealed decision of the respondent Court of Tax Appeals is hereby AFFIRMED.

A tax is uniform when it operates with the same force and effect in every place where the subject of it is found. Uniformity means that all property belonging to the same class shall be taxed alike The Legislature has the inherent power not only to select the subjects of taxation but to grant exemptions. Tax exemptions have never been deemed violative of the equal protection clause. It is true that the private respondents municipal franchises were obtained under Act No. 667 of the Philippine Commission, but these original franchises have been replaced by a new legislative franchise, i.e. R.A. No. 3843.

Given the validity of said law, it should be applied retroactively so as to render uncollectible the taxes in question which were assessed before its enactment. The question of whether a statute operates retrospectively or only prospectively depends on the legislative intent. In the instant case, Act No. 3843 provides that “effective … upon the date the original franchise was granted, no other tax and/or licenses other than the franchise tax of two per centum on the gross receipts … shall be collected, any provision to the contrary notwithstanding.” Republic Act No. 3843 therefore specifically provided for the retroactive effect of the law.

Corine Canaya

THIRD DIVISION[G.R. No. 146382. August 7, 2003]

SYSTEMS PLUS COMPUTER COLLEGE OF CALOOCAN CITY, petitioner, vs. LOCAL GOVERNMENT OF CALOOCAN CITY, MAMERTO MANAHAN, ATTY. NESTOR D. FRANCISCO, respondents.

Ponente: Corona, J.Facts:

Systems Plus Computer College is a non-stock and non-profit educational institution. It enjoys property tax exemption from the local government on its buildings but not on the parcels of land which petitioner is renting for P5,000 monthly from its sister companies, Consolidated Assembly, Inc. (Consolidated Assembly) and Pair Management and Development Corporation (Pair Management). Petitioner requested respondent city government of Caloocan to extend tax exemption to the parcels of land claiming that the same were being used actually, directly and exclusively for educational purposes pursuant to Article VI, Section 28(3) of the 1987 Constitution and other applicable provisions of the Local Government Code. Such request was denied because the owner of the parcel of land was not Systems Plus but Consolidated Assembly and Pair Management. Thereafter, the sister companies entered into an agreement where the land was donated to Systems Plus. They then informed the City Assessor of the donation and sought a reconsideration of the first decision. The City Assessor again denied the request, reasoning that the donation was a mere farce to evade the payment of taxes; that revenue officers, in proper cases, may disregard the separate corporate entity where it serves as a shield for tax evasion; the grant of exemption from taxation rests upon the theory that an exemption will benefit the body of people, and not upon any idea of lessening the burden of individual or corporate owners; there is no showing that the parcels of land are actually, directly and exclusively used either for religious, charitable, or educational purposes. Petitioner filed a Petition for mandamus with the RTC.

Issue:Will mandamus lie to against public respondents?

Ruling:No.

Petitioner argues that it is seeking to enforce, through the petition for mandamus, a clear legal right under the Constitution (Article VI, Section 28 [3]) and the pertinent provisions of the Local Government Code granting tax exemption on properties actually, directly and exclusively used for educational purposes. But petitioner is taking an unwarranted shortcut. The argument irrelevantly presumes the existence of the fact which it must first prove by competent and sufficient evidence before the City Assessor. The Assessor shall determine the value of a property, or proportion thereof subject to tax, including the discovery, listing, classification and appraisal of properties. It must be stressed that the authority to receive evidence, as basis for classification of properties for taxation, is legally vested on the respondent City Assessor whose action is appealable to the Local Board of Assessment Appeals and the Central Board of Assessment Appeals, if necessary.

Corine Canaya