Meaning of public purposeLUTZ v ARANETAGR No. L-7859 (1955)increase in tax on the manufacture of sugar on a graduated basis / not pure exercise oftaxing power / levied with a regulator purpose / rehab and stabili!e threatened sugarindustr"A#T$% Plaintiff Lutz seeks to recover from te !ollector of "nternal Revenue ta#es $ai% &'te estate( alleging tat suc tax is unconstitutional and void& being levied for theaid and support of the sugar industr exclusivel( )ic in plaintiff's opinion is nota $u&lic $ur$ose for )ic a ta# ma' &e constitutionall' levie%. !*" %ismisse% te action( ence tis case.'$$UE%+eter te $rotection an% $romotion aime% &' te im$ose% ta# on te su,ar in%ustr' is amatter of $u&lic concern(EL)%-es."ts $romotion( $rotection an% a%vancement( terefore re%oun%s ,reatl' to te ,eneral )elfare..ste$rotectionan%$romotionoftesu,arin%ustr'isamatterof$u&licconcernteLe,islature ma' %etermine )itin reasona&le &oun%s )at is necessar' for its $rotection an%e#$e%ient for its $romotion. /ere( te le,islative must &e allo)e% full $la'( su&0ect onl' tote test of reasona&leness1 an% it is not conten%e% tat te means $rovi%e% in section 2 of!ommon)ealt .ct No. 527 &ear no relation to te o&0ective $ursue% or are o$$ressive incaracter. "f o&0ective an meto%s are alike constitutionall' vali%( no reason is seen )' testate ma' not lev' ta#es to raise fun%s for teir $rosecution an% attainment. 3a#ation ma' &ema%e te im$lement. 3a#ation ma' &e ma%e te im$lement of te state4s $olice $o)er.Taxing power may not be delegated*ERAL#+ v ,R+- +" LA.UNAGR No. 151559 (1999)local franchise tax ordinance"A#T$% !ertainmunici$alities of te $rovince of La,unaissue%resolutiontrou,teirres$ective munici$al councils ,rantin, francise in favor of $etitioner 6anila 7lectric!om$an' (67R.L!8)for te su$$l'of electricli,t(eat an% $o)er)itinteconcerne% areas. Pursuant to te $rovisions of R. 7129 (Local Government !o%e of 1991( en0oinin,local ,overnment units to create teir o)n sources of revenue an% to lev' ta#es( feesan% car,es)( francise ta# or%inance )as enacte%. 67R.L!8 $ai% for te corres$on%in, ta# $a'ment un%er $rotest. .formal claimfor refun%)as tereafter sent &'67R.L!8tote Provincial3reasurer of La,una claimin, tat te francise ta# it a% $ai% an% continue% to $a' toteNational Government $ursuant toP:551alrea%'inclu%e%tefranciseta#im$ose% &' te Provincial 3a# 8r%inance. 3e claim for refun% tus 67R.L!8 file% )it te R3! a com$laint for refun%. R3! %ismisse% te com$laint( ence( te instant $etition.'$$UE%+eter te local ,overnment ave te inerent $o)er to ta#(EL)%No. (;ualifie%)Local ,overnments %o not ave te inherent $o)er to ta# e#ce$t to te e#tent tat suc $o)ermi,t &e delegated to tem eiter &' te &asic la) or &' statute.Presentl'( un%er .rticle < ofte 1987 !onstitution( a ,eneral %ele,ation of tat $o)er as &een ,iven in favor of local,overnment units. 3e fun%amentalla) %i% notinten%te %ele,ation to &ea&solute an%uncon%itional1 te constitutional o&0ective o&viousl'is to ensure tat( )ile te local,overnment units are &ein, stren,tene% an% ma%e more autonomous( te le,islature muststill see to it tat=(a) te ta#$a'er )ill not &e over-&ur%ene%or sa%%le%)itmulti$le an%unreasona&leim$ositions1(&) eac local ,overnment unit )ill ave its fair sare of availa&le resources(c) te resources of te national ,overnment )ill not &e un%ul' %istur&e%1 an%(%) local ta#ation )ill &e fair( uniform( an% 0ust.Exemptions on GOCC,('L',,'NE ,+RT$ AUT(+R'T/ v #'T/ +" 'L+'L+GR No. 199791 (>995)0uestiononliabilitfor real properttaxesandfor businesstaxeswithrespecttoa.+##1s lease of real propert"A#T$% Petitioner PP. initiall' ar,ue% tat as a ,overnment-o)ne% cor$oration( it is e#em$tfrom $a'in, real $ro$ert' ta#es &' virtue of its s$ecific e#em$tion in its carter. ?u&se;uentl'( in te memoran%umfile% )it te R3!( PP.omitte% its earlierar,ument an% can,e% its teor' &' alle,in, tat it is a ,overnment instrumentalit'()ic( accor%in, to a$$lica&le 0uris$ru%ence( ma' not &e ta#e% &' te local,overnment. .fter o&tainin, an a%verse %ecision from te trial court( it a%o$ts 'et anoter stanceon a$$eal &efore te ?!( contestin, te ta#a&ilit' of its )areouse. PP. ar,ue% for te first time tat since @$orts constructe% &' te ?tate@ are consi%ere%un%er te !ivil !o%e as $ro$erties of $u&lic %ominion( its )areouse( )ic it insiststo &e $art of its $ort( soul% &e treate% like)ise.'$$UE%+eter PP.( a G8!!( is lia&le for real $ro$ert' an% &usiness ta#es (EL)%-es.3e instant case cite% la)s )ic in%icate tat PP.4s ta# e#em$tion from real $ro$ert' ta#es)as )it%ra)n &' P: 1951( &ut )as su&se;uentl' restore% &' virtue of 78 95./ence( PP.is lia&le for real $ro$ert' ta#es on its )areouse.6oreover( te %ecision in te Bascocase%i% not a&solutel' $roi&it local ,overnments from ta#in, ,overnment instrumentalities (seeMactan Cebu International irport uthority !" Marcos).3e fact tat ta# e#em$tions of G8!!s ave &een e#$ressl' )it%ra)n &' te $resent LocalGovernment !o%e clearl' attests a,ainst $etitioner4s claimof a&solute e#em$tion of,overnment instrumentalities from local ta#ation.The primary reason for the withdrawal of tax exemption pri!ileges granted to go!ernment#owned and controlled corporations and all other units of go!ernment was that such pri!ilegeresulted in serious tax base erosion and distortions in the tax treatment of similarly situatedenterprises$ henceresultingintheneedfortheseentitiestoshareinthere%uirementsofde!elopment$ fiscal or otherwise$ by paying the taxes and other charges due from them"&ue process clause#+**'$$'+NER +" #U$T+*$ v #TAGR No. 792A8 (1987)re2appraisal of shipments"A#T$% Res$on%ent !am$os Rue%a !or$oration sou,t for refun% of te !ustoms %uties ita% over$ai% on tree of its im$ortations. 3eBureauof!ustomsre-a$$raise%itstreesi$mentsan%res$on%ent com$an'$ai% te increase% %uties an% ta#es un%er $rotest. ?uc $rotests )ere %enie% &ot &' te !ollector an% !ommissioner of !ustoms on te,roun% tat te re-a$$raisal ma%e )as &ase% on C.lert NoticesD receive% from te*inance .ttaces a&roa%( )ic( o)ever( )ere not %isclose%( neiter to Res$on%ent!om$an' nor to res$on%ent !ourt.'$$UE%+eter te re-a$$raisal ma%e &' te !ommissioner of !ustoms is vali%(EL)%No.+ile it is true tat a$$raisers of te Bureauof !ustoms are ,ivenam$le lee)a'in%eterminin, te correct customs %uties un%er ?ection 1A95 of te 3ariff an% !ustoms !o%e(?ection>91oftesame!o%e( )ic$rescri&estecriteriaforte%eterminationofte%utia&le values of im$orte% articles( as not &een com$lie% )it. +at is more(a%ministrative $rocee%in,s are not e#em$t from te o$eration of %ue $rocess re;uirementsone of )ic is tat a fin%in, &' an a%ministrative tri&unal soul% &e su$$orte% &' su&stantialevi%ence$resente%at teearin,orat least containe%interecor%sor%isclose%tote$arties affecte%."n tis case te @.lert Notices@ on )ic $etitioner &ase% its re-a$$raisal )ere not %isclose%%urin,te$rocee%in,s &eforeteBureauof !ustoms nor $resente%inevi%ence&eforeres$on%ent !ourt. 3e re-a$$raisal ma%e &'$etitioner( terefore( can &e faulte% )itar&itrarinessin%isre,ar%of te stan%ar% of%ue$rocessto)ic all,overnmental actionsoul% conform to im$ress u$on it te stam$ of vali%it'.E%ual protection clause+R*+# $U.AR #+ v TREA$URER +" +R*+# #'T/GR No. L->579A (1928)reasoanable classification / re0uisites / tax ordinance should not be singular andexclusive"A#T$% 3e 6unici$al Boar%of 8rmoc !it'$asse%Ordinance 'o" ($ )eries of *+,((im$osin, @on an' an% all $ro%uctions of centrifu,al su,ar mille% at te 8rmoc ?u,ar!om$an'( "nc.( in 8rmoc !it' a munici$al ta# e;uivalent to one $er centum (1E) $ere#$ort sale to te Fnite% ?tates of .merica an% oter forei,n countries. Pa'ments for sai% ta# )ere ma%e( un%er $rotest( &' 8rmoc ?u,ar !om$an'( "nc. Petitioner file% &efore te !*" of Le'te a com$laint a,ainst te !it' of 8rmoc as )ellas its 3reasurer( 6unici$al Boar% an% 6a'or( alle,in, tat te afore-state% or%inanceis unconstitutional for &ein, violative of te e;ual $rotection clause an% te rule ofuniformit' of ta#ation. 3e same is also an e#$ort ta# for&i%%en un%er ?ection >>87of te Revise% .%ministrative !o%e since te ta# is on &ot te sale an% e#$ort ofsu,ar. !*" u$el% te constitutionalit' of te or%inance( ence( te instant case.'$$UE%+eter constitutional limits sucas e;ual $rotectionclausean%ruleof uniformit'ofta#ation( )ere infrin,e%(EL)%-es.3e e;ual $rotection clause a$$lies onl' to $ersons or tin,s i%enticall' situate% an% %oes not&ar a reasona&le classification of te su&0ect of le,islation( an% a classification is reasona&le)ere=(1) it is &ase% on su&stantial %istinctions )ic make real %ifferences1(>) tese are ,ermane to te $ur$ose of te la)1(5) te classification a$$lies not onl' to $resent con%itions &ut also to future con%itions )icare su&stantiall' i%entical to tose of te $resent1 an%(A) te classification a$$lies onl' to tose )o &elon, to te same class.3e ;uestione% or%inance %oes not meet tem( for it ta#es onl' centrifu,al su,ar $ro%uce%an% e#$orte% &' te 8rmoc ?u,ar !om$an'( "nc. an% none oter. .t te time of te ta#in,or%inance4s enactment( 8rmoc ?u,ar !om$an'( "nc.( it is true( )as te onl' su,ar central inte cit' of 8rmoc. ?till( te classification( to &e reasona&le( soul% &e in terms a$$lica&le tofuture con%itions as )ell. 3e ta#in, or%inance soul% not &e sin,ular an% e#clusive as toe#clu%e an' su&se;uentl' esta&lise% su,ar central( of te same class as $laintiff( from tecovera,e of te ta#. .s it is no)( even if later a similar com$an' is set u$( it cannot &e su&0ectto te ta# &ecause te or%inance e#$ressl' $oints onl' to 8rmoc ?u,ar !om$an'( "nc. as teentit' to &e levie% u$on.E%ual protection clauseT'U v #AGR No. 1>7A19 (1999)reasoanable classification / re0uisites / tax ordinance should not be singular andexclusive"A#T$% Petitioners callen,e% te constitutionalit' of 78 97-. for alle,e%l' &ein, violativeof teir ri,t to e;ual $rotection of te la)s. 7897-. )ic$rovi%estat ,rant an%en0o'ment ofteta#an%%ut'incentivesautorize% un%er Re$u&lic .ct No. 7>>7 )ere limite% to te &usiness enter$rises an%resi%ents )itin te fence%-in area of te ?u&ic ?$ecial 7conomic Gone. Petitionersconten%e%tat te$rovisionsof7897-. confinin,tea$$licationofR... 7>>7 )itin te secure% area an% e#clu%in, te resi%ents of te zone outsi%e ofte secure% area is %iscriminator'.'$$UE%+eter 78 97-. violates te e;ual $rotection clause of te !onstitution(EL)%No.?! rule% in favor of te constitutionalit' an% vali%it' of te assaile% 78 97-.. ?ai% 78 isnotviolativeoftee;ual$rotectionclause1neiterisit%iscriminator'. 3eclassificationa$$lies e;uall' to all te resi%ent in%ivi%uals an% &usinesses )itin te @secure% area.@3e'are all similarl' treate%( &ot in $rivile,es ,rante% an% in o&li,ations re;uire%. .ll tol%( ?!ol%s tat no un%ue favor or $rivile,e )as e#ten%e%. 3e constitutional ri,t to e;ual $rotection of te la) is not violate% &' an e#ecutive or%er(issue%$ursuant tola)(,rantin,ta#an%%ut'incentivesonl'to&usinessesan%resi%ents)itin te @secure% area@ of te ?u&ic ?$ecial 7conomic Gone an% %en'in, tem to tose)o live )itin te Gone &ut outsi%e suc @fence%-in@ territor'. 3e !onstitution %oes notre;uire a&solute e;ualit' amon, resi%ents. "t is enou, tat all $ersons un%er likecircumstances or con%itions are ,iven te same $rivile,es an% re;uire% to follo) te sameo&li,ations. "n sort( a classification &ase% on vali% an% reasona&le stan%ar%s %oes not violatete e;ual $rotection clause.E%ual protection clauseT'U v #AGR No. 1>7A19 (1999)reasoanable classification / re0uisites / tax ordinance should not be singular andexclusive / abandoned naval facilit to self2sustaining industrial and commercial !one"A#T$% Petitioners callen,e% te constitutionalit' of 78 97-. for alle,e%l' &ein, violativeof teir ri,t to e;ual $rotection of te la)s. 7897-. )ic$rovi%estat ,rant an%en0o'ment ofteta#an%%ut'incentivesautorize% un%er Re$u&lic .ct No. 7>>7 )ere limite% to te &usiness enter$rises an%resi%ents )itin te fence%-in area of te ?u&ic ?$ecial 7conomic Gone. Petitionersconten%e%tat te$rovisionsof7897-. confinin,tea$$licationofR... 7>>7 )itin te secure% area an% e#clu%in, te resi%ents of te zone outsi%e ofte secure% area is %iscriminator'.'$$UE%+eter 78 97-. violates te e;ual $rotection clause of te !onstitution(EL)%No.?! rule% in favor of te constitutionalit' an% vali%it' of te assaile% 78 97-.. ?ai% 78 isnotviolativeoftee;ual$rotectionclause1neiterisit%iscriminator'. 3eclassificationa$$lies e;uall' to all te resi%ent in%ivi%uals an% &usinesses )itin te @secure% area.@3e'are all similarl' treate%( &ot in $rivile,es ,rante% an% in o&li,ations re;uire%. .ll tol%( ?!ol%s tat no un%ue favor or $rivile,e )as e#ten%e%. 3e constitutional ri,t to e;ual $rotection of te la) is not violate% &' an e#ecutive or%er(issue%$ursuant tola)(,rantin,ta#an%%ut'incentivesonl'to&usinessesan%resi%ents)itin te @secure% area@ of te ?u&ic ?$ecial 7conomic Gone an% %en'in, tem to tose)o live )itin te Gone &ut outsi%e suc @fence%-in@ territor'. 3e !onstitution %oes notre;uire a&solute e;ualit' amon, resi%ents. "t is enou, tat all $ersons un%er likecircumstances or con%itions are ,iven te same $rivile,es an% re;uire% to follo) te sameo&li,ations. "n sort( a classification &ase% on vali% an% reasona&le stan%ar%s %oes not violatete e;ual $rotection clause.Taxation rule shall be uniform and e%uitable$'$+N v AN#(ETAGR No. L-59A51 (198A)0uestionof ine0ualit betweenincome earners engagedinbusiness orpractice ofprofession and purel compensation"A#T$% BPBl,155$rovi%esforteim$ositionofi,erta#rateonta#a&lenet income%erive% from &usiness or $rofession tan on com$ensation. Petitioner conten%s tat e )oul% &e un%ul' %iscriminate% a,ainst &' te im$ositionof suc i,er rates of ta# u$on is income arisin, from te e#ercise of is $rofession!is#-#!is tose )o ave fi#e% income or salarie% in%ivi%uals.'$$UE%+eter te classification ma%e resulte% to ine;ualit' or trans,ression of te e;ual $rotectionclause(EL)%No.!lassification( if rational in caracter( is allo)a&le."n te case of .ut/ !" raneta( it )as el%tat @at an' rate( it is inerent in te $o)er to ta# tat a state &e free to select te su&0ects ofta#ation( an% it as &een re$eate%l' el% tat 4ine;ualities )ic result from a sin,lin, out ofone $articular class for ta#ation( or e#em$tion infrin,e no constitutional limitationD..ccor%in, to te !onstitution= @3e rule of ta#ation sall &e uniform an% e;uita&le.@ 3e$ro&lem of classification %i% not $resent itself in tat case. "t %i% not arise until nine 'earslater( )en ?! el%= @7;ualit' an% uniformit' in ta#ation means tat all ta#a&le articles orkin%s of $ro$ert' of te same class sall &e ta#e% at te same rate.3ere is ;uite a similarit'ten to te stan%ar% of e;ual $rotection for all tat is re;uire% is tat te ta# @a$$lies e;uall'to all $ersons( firms an% cor$orations $lace% in similar situation.@3a#$a'ers )o are reci$ients of com$ensation income are set a$art as a class. .s tere is$racticall'nooverea%e#$ense( teseta#$a'ersarenot entitle%tomake%e%uctionsforincome ta# $ur$oses &ecause te' are in te same situation more or less. 8n te oter an%(intecaseof$rofessionalsinte$racticeofteircallin,an%&usinessmen( tereisnouniformit' in te costs or e#$enses necessar' to $ro%uce teir income. "t )oul% not &e 0ustten to %isre,ar% te %is$arities &' ,ivin, all of tem zero %e%uction an% in%iscriminatel'im$ose on all alike te same ta# rates on te &asis of ,ross income.'on#impairment of contracts*'$A*'$ +R'ENTAL v #E,AL#+GR No. L-A5555 (1999)franchise tax 3in lieu of all taxes4 / special laws vs5 general laws / contract of franchise"A#T$% !7P.L!8 )as ,rante% a francise un%er R. 5>A7( as amen%e% &' R. 5579 an% R.29>9( )ic $rovi%es tat a francise ta# of 5E from ,ross earnin,s sall &e im$ose%in lieu of all ta#es an% assessments of )atever autorit' u$on $rivile,es( earnin,s(income( francise( an% $oles( )ires( transformers( an% insulators of te ,rantee. P: >51 (Local 3a# !o%e) )as later $romul,ate% )ic $rovi%es tat= Cny pro!isionof special laws to the contrary notwithstanding$ the pro!ince may impose a tax onbusinesses en0oying franchise$ based on the gross receipts reali/ed within itsterritorial 0urisdiction$ at the rate of not exceeding one#half of one per cent of thegross annual receipts for the preceding calendar year"D Pursuant sai% P:( te Province of 6isamis 8riental enacte% an or%inance im$osin,$rovincial francise ta# an% %eman%e% $a'ment from !7P.L!8. !7P.L!8$ai%un%er$rotest alle,in,tat it ise#em$t fromall ta#ese#ce$t tefrancise ta# re;uire% &' R. 29>9. "n te course of te a$$eal( !*" ten or%ere% $etitioner to return to !7P.L!8 teamount $ai% un%er $rotest1 ence( te instant case.'$$UE%+eter R.29>9 $revails over P:>51( tus e#em$tin, !7P.L!8from$rovincialfrancise ta#(EL)%-es.?ince s$ecial la)s (R. 29>9) are e#em$tions to ,eneral la)s (P: >51)( ?! $ointe% out tatte R. 29>9 $rovision @sall &e in lieu of all ta#es of ever' name an% nature@ in te franciseis$art oftein%ucement forteacce$tanceoftefrancisean%teren%itionof$u&licservice &' te ,rantee. .s a carter is in te nature of a $rivate contract( te im$osition ofanoter francise ta# on te cor$oration &' te local autorit' )oul% constitute anim$airment of te contract &et)een te ,overnment an% te cor$oration.Taxing power may not be delegated,hil #omm5 $atellite #orp -s5 Alcua! B' Hirtue of R. No. 551A( Petitioner )as ,rante% a francise to esta&lis( construct( maintain an% o$erate in te Pili$$ines( at suc $laces as te ,rantee ma' select( station or stations an% associate% e;ui$ment an% facilities for international satellite communication( like)ise it )as ,rante% to construct an% o$erate suc ,roun% facilitiesas nee%e% to %eliver telecommunications services from te communications satellite s'stem an% ,roun% terminal or terminals Fn%er ?ection 5 of R. No 551A( $etitioner )as e#em$t from te 0uris%iction of te ten Pu&lic ?ervice !ommission no) res$on%ent N3!. Purusant to 78 No. 192( te $etitioner )as $lace% un%er te 0uris%iction( re,ulation an% control of N3! Petitioner re;uest $rovisional autorit' )it te N3! to continue to o$erate its e#istin, facilities to ren%er te service it )as offerin, an% to car,e te rates it )as ten car,in,( from )ic N3! %oes a$$rove continuousl'. *or te last e#tension of $rovisional autorit'( te N3! %irecte% te $etitioner to car,e a mo%ifie% re%uce% rate trou, a re%uction of 15E on te $resent autorize% rates.'ssue% +IN N3! em$o)erin, to fi# rates for $u&lic service communications %oes not $rovi%e te necessar' stan%ar%s constitutionall' re;uire%( ence tere is an un%ue %ele,ation of le,islative $o)er $articularl' te a%0u%icator' $o)erJRuling% No N3! is em$o)ere% amon, oters to %etermine an% $rescri&e rates $ertinent to te o$eration of $u&lic service communication )ic necessaril' inclu%e te $o)er to $romul,ate rules an% re,ulations in connection terein.( Fn%er 78 5A2( N3! soul% &e ,ui%e% &' te re;uirement of $u&lic safet'( $u&lic interest an% reasona&le feasi&ilit' of maintainin, effective com$etition of $rivate entities from )ic it )as limite% to an% to conform )it. 6eetin, te re;uirements a&ove satisf' te vali% %ele,ation of le,islative $o)er.Taxing power may not be delegated$mith 6ell 7 #o -s5 #'R Petitioner im$orte% 119 cases of C!atteau Ga'D )ine )ic it %eclare% as Cstill )ineD Fn%er te ta# co%e te s$ecifie% ta# of 1 $eso $er liter of volume ca$acit' to %etermine te correct amount of te s$ecific ta# %ue on te PetitionerKs im$ortation. !"R or%ere% to ave te )ine teste% an% it )as accor%in,l' classifie% as Cs$arklin, )ineD 8n suc &asis te commissioner assesse% te $etitioner a %eficienc' s$ecific ta# on te cases of im$orte% !atteau Ga' in te sum of 11(715.99. *rom )ic im$oses a s$ecific ta# of 1> $esos $er liter of volume ca$acit' of s$arkin, )ine.'ssue% +IN tere )as a violation of te esta&lise% %octrine %ele,ate $otestas non $otest %ela,are in te ta# co%e tat ,ives te commissioner te &lanket autorit' to %eci%e )at is oris not te meanin, of s$arklin, )ine.Ruling% No ?ection 15A of te ta# co%e $rovi%es for te im$osition of s$ecific ta# on )ines an% imitation )ines. 3e enumeration on te $rovision of te la) $rescri&es te amount ofte ta# s$ecificall' to &e $ai% for eac t'$e of )ines an%Ior imitation )ine. 3e $rovisionIsection %iscloses te le,islative )ill( leavin, to te officer car,e% )itte im$lementation an% e#ecution tereof no more tan te a%ministrative function of %eterminin, )eter a $articular kin% of )ine or imitation )ine falls in one class or anoter. 3e $etitionerKs )ines are e#amine% an% anal'ze%. Base on te test ma%e te %eficienc' assessment )as or%ere% &' te commissioner. Bein, in te )ine tra%in, &usiness( te $etitioner is %ut' &oun% to kno) te kin%s of )ine it %eals in $articularl' insofar as suc kno)le%,e ma' &e relevant to te $ro$er a$$reciation of its ta# lia&ilities.Exemption on GOCCs,hilippine "isheries )evelopment Authorit -s5 #A Petitioner )as an autorit' create% un%er P: No. 977 an% )as rename% to its current trou, 78 No 77> an% )as attace% to te 6inistr' of Natural Resources. . >1 ectare of lan% )as reclaime% an% constructe% tere on te "*P! consistin, of &reak)ater( a lan%in, ;ua'( a refri,eration &uil%in,( a market all( a munici$al se%( an a%min &uil%in,( a )ater an% fuel oil su$$l' s'stem an% oter $orts relate% facilities an% macineries( )ere turne% over to Petitioner &ut te title to te lan% an% &uil%in,s remaine% )it te Re$u&lic 3e Petitioner lease% $ortion of te "*P! to $rivate firms an% in%ivi%ual en,a,e% in fisin, relate% &usiness 3e cit' of "loilo assesse% te entire "*P! for real $ro$ert' ta#es. 3e assessment remaine% un$ai% an% &ecame %elin;uent. 3o satisf' te ta# %elin;uenc' a sale at $u&lic auction of te "*P! )as sce%ule%. !ase )as elevate% to te :e$artment of *inance &ut te :8* si%e% )it te Res$on%ent 3e office of te $resi%ent %enie% te motion of te $etitioner !. affirme% te %ecision of te 8ffice of te Presi%ent.'ssue% +IN te $etitioner is lia&le to $a' real $ro$ert' ta# to te cit' of "loiloJRuling% No Petitioner is not a G8!! &ut an instrumentalit' of te National Government as suc itis ,enerall' e#em$t from $a'ment of real $ro$ert' ta#( e#ce$t tose $ortions )ic ave &een lease% to $rivate entities 3e real $ro$ert' ta# assessment issue% &' te cit' of "loilo soul% &e u$el% onl' )it res$ect to te $ortions lease% to $rivate $ersons. "n case a failure of $a'ment of te real $ro$ert' ta# %ue tereon( te sai% $ortion cannot &e sol% to $u&lic auction to satisf' te ta# %elin;uenc' for te $ro$ert' is $art of te $u&lic %omain )ic cannot &e sol% at $u&lic auction. 3e cit' of "loilo as to satisf' te ta# %elin;uenc' trou, means oter tan te sale of $u&lic auction of te "*P!.)itus of taxation8ells "argo 6an9 -s5 #ollector of 'nternal Revenue Bir%ie Lillian 7'e( )ife of !l'%e 6ilton 7'e %ie% in !alifornia te $lace of er alle,e% resi%ence an% %omicile. .mon, te $ro$erties se left )as er L con0u,al sare in 79(999 sares of stock in Ben,uet !onsoli%ate% 6inin, !om$an'( a $artnersi$ or,anize% an% e#istin, un%er te la) of te Pili$$ines. ?e left a )ill )ic )as %ul' a%mitte% to $ro&ate in !alifornia )ere er estate )as a%ministere% an% settle%. Petitioner +ells *ar,o &ank )as a$$ointe% trustee of te trust create% &' te sai% )ill.3e *e%eral an% ?tate of !aliforniaKs ineritance ta#es %ue on sai% sares ave &een %ul' $ai%. 3e res$on%ent !"R sou,t te su&0ect ane) te aforesai% sares of stock to te Pili$$ine "neritance ta#( )ic )as o&0ecte% to &' te $etitioner. . %eclarator' 0u%,ment )as file% in te lo)er court. !"* rule% tat te stocks are su&0ect to te Pili$$ine "neritance ta#'ssue% +IN te con0u,al sare of stocks as su&0ect to te $a'ment of te Pili$$ine "neritance ta#=Ruling% -es 3e Pili$$ine "neritance ta# is not ta# on te $ro$ert' &ut u$on te transmission of ineritance "ntan,i&les suc as te sares of stock in ;uestion( teir situs is in te %omicile of te o)ner tereof an% teir transmission &' %eat necessaril' takes $lace un%er is %omiciliar' la). 3e actual situs of te sares of stock is in te Pili$$ines( te cor$oration &ein, %omicile% terein( an% &esi%e te certificate of stock ave remaine% in te Pili$$ines u$ to te time )en te %ecease% %ie% in !alifornia an% te' )ere in te $ossession ofone ?'rena 6cMee( secretar' of te Ben,uet !onsoli%ate% 6inin, com$an'( to )omte' ave %elivere% an% in%orse% in te &ank. ?uc in%orsement ,ave 6cMee te ri,tto vote te certificates at te ,eneral meetin, of te stockol%ers( to collect %ivi%en%s tereon an% %is$ose of te sare in te manner se ma' %eem fit )itout $re0u%ice to er lia&ilit' to te o)ner for violation of instruction. 6cMee a te le,al title to te certificates of stock el% in trust for te true o)ner tereof. 3e o)ner resi%in, in !alifornia as e#ten%e% ere er activities )it res$ect to er intan,i&les so as to avail erself of te $rotection an% &enefit of te Pili$$ine la).&ue process clause$ison -s5 Ancheta 3is case is in relation to a suit for %eclarator' relief or $roi&ition $rocee%in, on te vali%it' of ?ection 1 of BP Bl, 155. Petitioner is a ta# $a'er alle,in, tat trou, te sai% la) e )oul% &e un%ul' %iscriminate% a,ainst &' im$osition of i,er rates of ta# u$on is income arisin, from te e#ercise of is $rofession as a,ainst to tose fi#e% income or salarie% in%ivi%ual ta# $a'ers. /e caracterize% te section of te la) to &e ar&itrar' amountin, to class le,islation( o$$ressive an% ca$ricious in caracter. 3at tere )as a trans,ression of te e;ual $rotection an% %ue $rocess clauses of te constitution."ssue= +IN BP Bl, 155 is in violation of te %ue $rocess clauses of te constitutionJRulin,= No :ue $rocess ma' &e invoke% )ere a ta#in, statute is so ar&itrar' tat it fin%s no su$$ort in te constitution. .s am$le of tis are as follo)s=o .mount to te confiscation of te $ro$ert'o "f it is &e'on% te 0uris%iction of te stateo "s not for $u&lic $ur$oseo !ase of retroactive statue is so ars an% unreasona&le it is su&0ect to attack on%ue $rocess ,roun%s. 3e $etitioner faile% to $rove te factual foun%ation of suc unconstitutional taint on ar&itrariness. 3ere )as no $roof of suc $ersuasive caracter as )oul% lea% to suc a conclusion. .&sent suc conlusion te $resum$tion of vali%it' must $revailE%ual protection clause$hell #o5 -s5 -ano 3e munici$alit' !ouncil of !or%ova a%o$te% te follo)in, or%inanceo 8r%inance No 19 im$oses an annual ta# of 159 on occu$ation or te e#ercise of te $rivile,e of installation mana,ero 8r%inance No 9 im$oses an annual ta# of A9 $esos for local %e$osits in %rums of com&usti&le an% inflamma&le materials an% an annual ta# of >99 $esos for tin can factories.o 8r%inance No 11 im$oses an annual ta# of 159 on tin can factories avin, an ma#imum annual out$ut ca$acit' of 59(999 tin cans. Petitioner file% a suit for te refun% of ta#es $ai% &' it on te ,roun% tat te or%inances im$osin, suc ta#es are ultra vires.'ssue% +IN 8r%inances are in violation of te 7;ual Protection clause for it is unautorize% an% invali%JRuling% No 8r%inance 9( te $ermit an% ree referre% to ma' &e re;uire% an% car,e% &' te 6unici$al council in te e#ercise of its re,ulative autorit'. 3is is in $ursuant to !. No A7> )ic autorizes munici$al councils an% munici$al %istrict councils to im$osemunici$al license ta#es u$on $ersons en,a,e% in an' occu$ation or &usiness or e#ercisin, $rivile,es in te munici$alit' or munici$al %istrict &' re;uirin, tem to secure licenses at rates fi#e% &' te munici$al council or munici$al %istrict council 8r%inance 19( is not %iscriminator' an% ostile 0ust &ecause tere is no oter $erson inte localit' )o e#ercises suc %esi,nation or occu$ation. 3is %oes not make te or%inance %iscriminator' an% ostile( in as muc as it is an% )ill &e a$$lica&le to an' $erson or firm )o e#ercises suc callin, or occu$ation name% or %esi,nate% as "nstallation 6ana,er 8r%inance 11( is not a $ercenta,e ta# it is ta# on &usiness an% te ma#imum annual out$ut ca$acit' is not a $ercenta,e. Because it is not a sare or a ta# &ase% on te amount of te $rocee%s realize% out of te sale of te tin cans manufacture% terein &ut on te &usiness of manufacturin, tin cans avin, a ma#imum annual out$ut ca$acit' of 59(999 tin cans.1ule of taxation shall be uniform and e%uitable*anila Race (orse -s5 )ela "uente Petitioner is a non-stock cor$oration %ul' or,anize% an% e#istin, un%er an% &' virtue of te la)s of te Pili$$ines( )o alle,e tat te' are o)ners of &oar%in, sta&les for race orses an% teir ri,ts are affecte% &' 8r%inance 5925 Petitioner $ra'e% for te or%inance to &e %eclare% invali% as violative of te constitution Petitioner conten%s tat te ta# on race orses as %istinct from &oar%in, sta&les. 3at te &asis of te license fee is te num&er of race orse ke$t or maintaine% in te &oar%in, sta&les to &e $ai% &' te maintainers at te rate of 19 $esos a 'ear for eac race orse an% tat te fee is increase% corres$on%in,l' 19 $esos for eac a%%itional race orse maintaine% or fe% in te sta&le an% tat &' te same token an em$t' sta&le for orse $a' no fee at all.'ssue% +IN 8r%inance 5925 is not consi%ere% to &e Fniform an% 7;uita&le for it is %iscriminator' an% savors of class le,islationJRuling% No 8r%inance 5925 is Fniform an% 7;uita&le. *rom te conte#t of te or%inance te intent to ta# or license sta&les an% not orses is clearl' manifest. 3e num&er of orses is use% in te assessment $urel' as a meto% of fi#in, an e;uita&le an% $ractical %istri&ution of te &ur%en im$ose%. 3e meto% is not o&no#ious &ut rater fair an% 0ust( tat for a &oar%in, sta&le )ere onl' one orse is maintaine% $ro$ortionatel' less amoun soul% &e e#acte% tan for a ta&le )ere more orses are ke$t an% from )ic ,reater income is %erive% 7;uit' in ta#ation is ,enerall' conceive% in terms of a&ilit' to $a' in relation to te &enefits receive% &' te ta# $a'er an% &' te $u&lic from te &usiness or $ro$ert' ta#e% Race orses are %evote% to ,am&lin,( if le,alize% teir o)ners %erive% fat income an%te $u&lic ar%l' an% $rofit from orse racin, an% tis &usiness %eman%s relativel' eav' $olice su$ervision. 3ake ever'tin, into account it conforms to te $ractical %ictates of 0ustice an% e;uit' an% is not %iscriminator' )itin te meanin, of te constitution'on#impairment clause#'R -s5 Lingaen .ulf Electric #o Res$on%ent ta# $a'er o$erates an electric $o)er $lant servin, te a%0oinin, munici$alities of Lin,a'en an% Binmale'( &ot in Pan,asinan. Pursuant to te francise ,rante% &' teir res$ective munici$al councils un%er resolution No 1A an% >5 $rovi%es tato ?all $a' ;uarterl' into te Provincial 3reasur' of Pan,asinan( one $er centumof te ,ross earnin,s o&taine% tru tis $rivile,e %urin, te first >9 'earso 3)o $er centum %urin, te remainin, 15 'ears of te life of sai% francise. 3e B"R assesse% an% %eman%e% from te res$on%ent %eficienc' francise ta#es an% surcar,e% for te 'ear 19A2 to 195A a$$l'in, te francise ta# of 5E on ,ross recei$t as $rescri&e% in ?ection >59 of te National "nternal Revenue !o%e instea% of te lo)er rate $rovi%e% in te munici$al francises. Pen%in, te earin, R. No 58A5 )as $asse% ,rantin, te $rivate res$on%ent a le,islative francise )ic $rovi%es tat te ,rantee sall $a' into te "nternal Revenue office of eac munici$alit' a ta# e;ual to > $er centum of te ,ross recei$ts un%er te sai% francise. !. rule% tat R. 58A5 soul% a$$l' an% %ismisse% te claim of te !"R.'ssue% +IN te Res$on%ent soul% $a' te 5E ta# im$ose% u$on un%er ?ection >59 of te N"R!JRuling% No B' Hirtue of R. No 58A5 te $rivate res$on%ent )as lia&le to $a' onl' >E francise ta# effective from te %ate te ori,inal munici$al francise )as ,rante%. R. No 58A5 soul% &e a$$lie% retroactivel' as $er te intent $rovi%e% un%er te la) )ic states tat it is effective u$on te %ate te ori,inal francise )as ,rante%( no oter ta# an% or licenses oter tan te francise ta# of t)o $er centum on te ,ross recei$tsN sall &e collecte% an' $rovision to te contrar'.,A$#UAL vs $E#RETAR/ +" ,U6L'# 8+R:$ ; public purpose"acts% Gulueta is te o)ner of several $arcels of resi%ential lan% situate% in Pasi,( Rizal( an% kno)n as te.ntonio ?u&%ivision( certain $ortions of )ic a% &een reserve% for te $ro0ecte% fee%er roa%s( )ic(a%mitte%l'( )ere $rivate $ro$ert' of Gulueta )en Re$u&lic .ct No. 9>9( a$$ro$riatin, P85(999.99 forte@construction( reconstruction( re$air(e#tensionan%im$rovement@ofsai%roa%s( )as$asse%&'!on,ress( as )ell as )en it )as a$$rove% &' te Presi%ent on Oune >9( 1955. Gulueta e#ecute% on :ecem&er 1>( 1955( )ile e )as a mem&er of te ?enate of te Pili$$ines( analle,e%%ee%of tefour (A) $arcels of lan%constitutin,$ro0ecte%fee%er roa%s( infavor of teGovernment of te Re$u&lic of te Pili$$ines 3e )itin %onation is ere&' ma%e upon the condition that the Go!ernment of the 1epublic of the2hilippineswill usetheparcelsof landherebydonatedforstreet purposesonlyandfornootherpurposes whatsoe!er1 it &ein, e#$ressl' un%erstoo% tat soul% te Government of te Re$u&lic of tePili$$ines violate te con%ition ere&' im$ose% u$on it( te title to te lan% ere&' %onate% sall(u$on suc violation( i$so facto revert to te :8N8R( O8?7 !. GFLF73.. +enceslaoPascual( Provincial GovernorofRizal( institute%tisactionfor%eclarator'relief( )itin0unction( u$on te ,roun% tat te $ro0ecte% fee%er roa%s in ;uestion )ere $rivate $ro$ert' at te timeof te $assa,e an% a$$roval of Re$u&lic .ct No. 9>9( te a$$ro$riation of P85(999.99 terein ma%e( forte construction( reconstruction( re$air( e#tension an% im$rovement of sai% $ro0ecte% fee%er roa%s( )asille,alan%( terefore( voi% abinitio@1tatsai%a$$ro$riationofP85(999.99)asma%e&'!on,ress&ecause its mem&ers )ere ma%e to &elieve tat te $ro0ecte% fee%er roa%s in ;uestion )ere @$u&licroa%s an% not $rivate streets of a $rivate su&%ivision@4 3e !ourt of *irst "nstance of Rizal( ren%ere% a %ecision %ismissin, te case an% %issolvin, te )rit of$reliminar' in0unction terein issue%( )itout costs.'$$UE%"s te P85(999.99 a$$ro$riation for te $ro0ecte% fee%er roa%s ma%e for a $u&lic $ur$oseJ RUL'N. N8 "nasmucas te lan%on )ic te$ro0ecte%fee%erroa%s )ere to &e constructe%&elon,e%ten toGulueta( te result is tat sai% a$$ro$riation sou,t a $rivate $ur$ose( an% ence( )as null an% voi%.3e %onation to te Government( over five (5) monts after te a$$roval an% effectivit' of sai% .ct(ma%e( accor%in, to te $etition( for te $ur$ose of ,ivin, a @sem&lance of le,alit'@( or le,alizin,( tea$$ro$riationin;uestion( %i%not cure its aforementione%&asic %efect. !onse;uentl'( a 0u%icialnullification of sai% %onation nee% not $rece%e te %eclaration of unconstitutionalit' of sai%a$$ro$riation. "t is a ,eneral rule tat the legislature is without power to appropriate public re!enue for anything but apublic purpose...."tis te essentialcaracter of te%irect o&0ectofte e#$en%iture )icmust%etermine its vali%it' as 0ustif'in, a ta#( an% not te ma,nitu%e of te interest to &e affecte% nor te%e,ree to)icte ,eneral a%vanta,e of tecommunit'( an%tus te $u&lic )elfare( ma'&eultimatel' &enefite% &' teir $romotion. Incidental to te $u&lic or to te state( )ic results from te$romotion of $rivate interest an% te $ros$erit' of $rivate enter$rises or &usiness( %oes not 0ustif' teirai% &' te use $u&lic mone'. "n accor%ance )it te rule tat te taxing power must be exercised for public purposes only( %iscusse%supra sec. 1A( mone'raise%&'ta#ationcan&ee#$en%e% onlyforpublicpurposesandnotforthead!antage of pri!ate indi!iduals. 3e test of te constitutionalit' of a statute re;uirin, te use of $u&lic fun%s is )eter te statute is%esi,ne% to $romote te $u&lic interest( as o$$ose% to te furterance of te a%vanta,e of in%ivi%uals(altou, eac a%vanta,e to in%ivi%uals mi,t incidentally serve te $u&lic. *rotin,am vs. 6ellon (>2> F.?. AA7)( insofar as federal la)s are concerne%( u$on te ,roun% tat terelationsi$ of a ta#$a'er of te F.?. to its *e%eral Government is %ifferent from tat of a ta#$a'er of amunici$al cor$oration to its ,overnment 3e Province of Rizal( )ic e re$resents officiall' as its Provincial Governor( is our most $o$ulate%$olitical su&%ivision( 8an%( te ta#$a'ers terein &ear a su&stantial $ortion of te &ur%en of ta#ation( inte Pili$$ines.*iaa vs #A ; exemptions on .+##"acts% 6".. o$erates te Nino' .;uino "nternational .ir$ort (N.".) !om$le# in ParaPa;ue !it'un%er 7#ecutive8r%er No. 995( oter)isekno)naste 1e!isedCharterof theManilaInternational irport uthority (@6".. !arter@). 7#ecutive 8r%er No. 995 )as issue% on >1Oul'1985&'tenPresi%ent *er%inan%7. 6arcos. ?u&se;uentl'( 7#ecutive 8r%er Nos.9991 an% >98> amen%e% te 6".. !arter. .s o$erator of te international air$ort( 6"..a%ministers te lan%( im$rovements an%e;ui$ment )itin te N.". !om$le#. 3e 6".. !arter transferre% to 6".. a$$ro#imatel'299 ectares of lan%(5 inclu%in, te run)a's an% &uil%in,s (@.ir$ort Lan%s an% Buil%in,s@)tenun%erteBureauof .ir3rans$ortation.A 3e6".. !arterfurter$rovi%estat no$ortion of te lan% transferre% to 6".. sall &e %is$ose% of trou, sale or an' oter mo%eunless s$ecificall' a$$rove% &' te Presi%ent of te Pili$$ines. 8n >1 6arc 1997( te 8ffice of te Government !or$orate !ounsel (8G!!) issue% 8$inionNo. 921. 3e 8G!!o$ine% tat te Local Government !o%e of 1991 )it%re)tee#em$tion from real estate ta# ,rante% to 6".. un%er ?ection >1 of te 6".. !arter. 3us(6".. ne,otiate% )it res$on%ent !it' of ParaPa;ue to $a' te real estate ta# im$ose% &' te!it'. 6".. ten $ai% some of te real estate ta# alrea%' %ue. >8 Oune >991( 6".. receive% *inal Notices of Real 7state 3a# :elin;uenc' from te !it' ofParaPa;ue for te ta#a&le 'ears 199> to >991. 8n 17 Oul' >991( te !it' of ParaPa;ue( trou, its !it' 3reasurer( issue% notices of lev' an%)arrants of lev' on te .ir$ort Lan%s an% Buil%in,s. 3e 6a'or of te !it' of ParaPa;uetreatene% to sell at $u&lic auction te .ir$ort Lan%s an% Buil%in,s soul% 6".. fail to $a'te real estate ta# %elin;uenc' 8n 9 .u,ust >991( te 8G!! issue% 8$inion No. 1A7 clarif'in, 8G!! 8$inion No. 921.3e 8G!! o$ine% tat ?ection >1 of te 6".. !arter is te $roof tat 6".. is e#em$tfrom real estate ta#. 8n 1 8cto&er >991( 6".. file% )it te !ourt of .$$eals an ori,inal $etition for $roi&itionan%in0unction( )it$ra'erfor$reliminar'in0unctionortem$orar'restrainin,or%er.3e$etition sou,t to restrain te !it' of ParaPa;ue from im$osin, real estate ta# on( lev'in,a,ainst( an%auctionin,for$u&licsalete .ir$ort Lan%san%Buil%in,s. 3e$etition)as%ockete% as !.-G.R. ?P No. 22878. 8n58cto&er >991( te!ourt of .$$eals%ismisse%te$etition&ecause6"..file%it&e'on% te 29-%a' re,lementar' $erio%. 3e !ourt of .$$eals also %enie% on >7 ?e$tem&er>99> 6"..4s motion for reconsi%eration an% su$$lemental motion for reconsi%eration 6".. also $oints out tat ?ection >1 of te 6".. !arter s$ecificall' e#em$ts 6".. fromte $a'ment of real estate ta#. 6".. insists tat it is also e#em$t from real estate ta# un%er?ection>5AofteLocal Government !o%e&ecausete .ir$ort Lan%san%Buil%in,sareo)ne% &' te Re$u&lic. Res$on%ents invoke ?ection 195 of te Local Government !o%e( )ic expresslwithdrew te ta# e#em$tion $rivile,es of @government2owned and2controlledcorporations@ u$on te effectivit' of te Local Government !o%e. Res$on%ents also ar,uetat a &asic rule of statutor' construction is tat te e#$ress mention of one $erson( tin,( oracte#clu%esall oters..ninternational air$ortisnotamon,tee#ce$tionsmentione%in?ection 195 of te Local Government !o%e. 3us( res$on%ents assert tat 6".. cannot claimtat te .ir$ort Lan%s an% Buil%in,s are e#em$t from real estate ta#.'ssue% .rete.ir$ort Lan%san%Buil%in,sof6".. aree#em$t fromreal estateta#un%ere#istin, la)sJRuling% -es. 3irst( 6".. is not a ,overnment-o)ne% or controlle% cor$oration &utan instrumentalit of teNational Government an%tuse#em$t fromlocal ta#ation.6".. is neiter a stock &ecause it as no stockol%ers or votin, sares nor a non-stockcor$oration &ecause it as no mem&ers.( 6".. %oes not ;ualif' as a ,overnment-o)ne%or controlle% cor$oration. 6"..is a government instrumentalit veste% )it cor$orate $o)ers to $erformefficientl' its ,overnmental functions. 6".. is like an' oter ,overnmentinstrumentalit'( te onl' %ifference is tat 6".. is veste% )it cor$orate $o)ers. ?ection>(19)ofte"ntro%uctor'Provisionsofte .%ministrative!o%e%efinesa,overnment@instrumentalit@ as follo)s=?7!. >. General Terms &efined. QQ # # # #(19) Instrumentality refers to an' a,enc' of te National Government( not inte,rate% )itinte%e$artment frame)ork( veste%)its$ecial functionsor 0uris%iction&'la)( endowedwith some if not all corporate powers( a%ministerin, s$ecial fun%s( an% en0o'in,o$erational autonom'( usuall' trou, a carter. # # # (7m$asis su$$lie%) +en te la) vests in a ,overnment instrumentalit' cor$orate $o)ers( te instrumentalit'%oes not &ecome a cor$oration. Fnless te ,overnment instrumentalit' is or,anize% as astock or non-stockcor$oration( it remains a,overnment instrumentalit' e#ercisin,notonl' ,overnmental &ut also cor$orate $o)ers. 3us( 6".. e#ercises te ,overnmental$o)ers of eminent %omain(1> $olice autorit'15 an% te lev'in, of fees an% car,es.1A .tte same time( 6".. e#ercises @all te $o)ers of a cor$oration un%er te !or$orationLa)( insofar as tese $o)ers are not inconsistent )it te $rovisions of tis 7#ecutive8r%er. )econd( te real $ro$erties of 6".. are owned b the Republic of te Pili$$ines an%tus e#em$t from real estate ta#. 3e .ir$ort Lan%s an% Buil%in,s of 6".. are $ro$ert'of $u&lic %ominion an% terefore o)ne% &' te ?tate or te Re$u&lic of te Pili$$ines.3e!ivil !o%e$rovi%es=.R3"!L7A19. Pro$ert'iseiterof$u&lic%ominionorof$rivate o)nersi$. .R3"!L7 A>9. 3e follo)in, tin,s are $ro$ert' of $u&lic %ominion=(1) 3ose inten%e% for $u&lic use( suc as roa%s( canals( rivers( torrents( $orts an% &ri%,esconstructe% &' te ?tate( &anks( sores( roa%stea%s( an% oters of similar caracter1 3e .ir$ort Lan%s an% Buil%in,s are %evote% to $u&lic use &ecause te' are used b thepublicforinternational anddomestictravel andtransportation. 3efact tat te6"..collectsterminal feesan%oter car,esfromte$u&lic%oesnot removetecaracter of te .ir$ort Lan%s an% Buil%in,s as $ro$erties for $u&lic use. .ir$ort Lan%s an% Buil%in,s are 8utsi%e te !ommerce of 6an. 3e .ir$ort Lan%s an%Buil%in,s of 6".. are %evote% to $u&lic use an% tus are $ro$erties of $u&lic %ominion..s $ro$erties of $u&lic %ominion( te .ir$ort Lan%s an%Buil%in,s are outsi%e tecommerce of man. 3e !ourt as rule% re$eate%l' tat $ro$erties of $u&lic %ominion areoutsi%e te commerce of man-E.ETA6LE +'L #+R,+RAT'+N vs Trinidad ; *ultiple $itus of Taxation"acts% Plaintiff (-E.ETA6LE+'L#+R,+RAT'+N) is a forei,n cor$oration( %ul'license% to transact &usiness in te Pili$$ine "slan%s an% avin, its $rinci$al $lace of&usiness terein in te !it' of 6anila. :efen%ant (Trinidad>( to ?e$tem&er59( 19>>)1 an% (8cto&er 1( 19>>( to :ecem&er 51( 19>>) $laintiff $urcase% in tePili$$ine "slan%s( an% si$$e% to its mills in te Fnite% ?tates of .merica( co$ra ofte value of P>52(7971 P1(A9>(129 an% P599(99A( res$ectivel'. 3e si$$in,%ocuments coverin, te sai% co$ra )ere si,ne% &' te $laintiff. 3e co$ra so si$$e%)as converte% into ve,eta&le oil &' te $laintiff in te Fnite% ?tates( an% tere sol%. :efen%ant( un%er te alle,e% autorit' of section 1A59 of .ct No. >711( %eman%e% of$laintiff a ta# of one $er centum (1E) of te value of te si$ments of co$ra referre%tointe$rece%in,$ara,ra$(or tesumsof(P>(527.97 on te>9t %a'ofOul'(19>>)1 (P1A(9>1.29) on te 12t %a' of 8cto&er( 19>>)1 an% (P5(599.9A on te 18t%a' of Oanuar'( 19>5). recover &ackmercants4 $ercenta,eta#estoteamount of P19(975.79levie%onconsi,nmentsun%ersection1A59of .ctNo. >711an%$ai%&'te$laintiffun%er$rotest. 3e $ertinent $ortions of te section mentione%( )ic )ent into effect on8cto&er 1( 1917( rea%s as follo)s= .ll mercants not erein s$ecificall' e#em$te% sall $a' a ta# of one $er centum onte ,ross value in mone' of te commo%ities( ,oo%s( )ares( an% mercan%ise sol%(&artere%( e#can,e%( or consi,ne% a&roa% &' tem( suc ta# to &e &ase% on te actualsellin, $rice or value of te tin,s in ;uestion at te time te' are %is$ose% of orconsi,ne%( )eter consistin, of ra)material or of manufacture% or $artiall'manufacture%$ro%ucts( an%)eter of %omesticor forei,nori,in. 3eta#u$ontin,s consi,ne%a&roa%sall &e refun%e%u$onsatisfactor'$roof of te returntereof to te Pili$$ine "slan%s unsol%. # # # # # # # # # @6ercant(@ as ere use%( means a $erson en,a,e% in te sale( &arter( or e#can,e of$ersonal $ro$ert'of )atever caracter. 7#ce$t as s$eciall'$rovi%e%( te terminclu%esmanufacturers)osell articlesofteiro)n$ro%uctionan%commissionmercants avin, esta&lisments of teir o)n for te kee$in, an% %is$osal of ,oo%sof )ic sales or e#can,es are effecte%( &ut %oes not inclu%e mercan%ise &rokers. tecourt ren%ere%0u%,ment infavor of te$laintifffor terecover'of tefullamount of te ta# $ai% a'ssue% "s ve,eta&le oil cor$( a forei,n a cor$oration an% consi,nor of ,oo%s( also su&0ect to$ercenta,e ta#JRuling% -7?. mercant@istere%efine% as a$erson en,a,e% inte sale( &arter(ore#can,eof$ersonal $ro$ert'of )atever caracter( an%it is%eclare%tat teterminclu%esmanufacturers )o sell articles of teir o)n $ro%uction. 3e $laintiff4s local a,ent $urcase% te co$ra1 te sales ta#es )ere %ul' $ai% &' teven%ors( )o also ma%e out an% si,ne% te &ills of la%in, an% $lace% te co$ra a&oar%te si$. 3e ven%ors tus &ecame te consi,nors1 te $laintiff4s a,ent %i% notin, &utto$a'for teco$raafter it )as consi,ne%. !learl'( insuccircumstances( te$laintiff )as not te consi,nor an% coul% not &e re;uire% to $a' te consi,nment ta#. it is not %is$ute% tat te $laintiff cor$oration )as te consi,nor of te mercan%ise(&ut it is strenuousl' ar,ue% tat inasmuc as it is not @en,a,e% in te sale( &arter( ore#can,e% of $ersonal $ro$ert'@ in the 2hilippine Islands( it is not a mercant )itintestatutor'%efinitionof teterman%tereforecannot &ere;uire%to$a'teconsi,nment ta#. consi,nment ta# is not a sales ta# is( o)ever( too o&vious for ar,ument1 te fact tatit is $rovi%e% for in te same section as te sales ta# %oes not necessaril' make it so But )enaforeignmerchant( aste)or%@mercant@is%efine%inourstatutes(comes to our shores and enters into transactions upon which a tax is laid( teGovernment can( an% %oes( $lace im on an e;ualit' )it %omestic mercants an%re;uires im to $a' te same $rivile,e ta#es. .s )e ave seen( section 1A59 $rovi%es tat @.ll mercants not hereinespecifically e#em$te% sall $a' a ta# of one $er centum on te ,ross value in mone'of te commo%ities( ,oo%s( )ares( an% mercan%ise . . . consi,ne% a&roa% &' tem.@(7m$asis ours.) "t %efines te )or% @mercant@ as a $erson )o is en,a,e% in tesale( &arter( or e#can,e of $ersonal $ro$ert'( &ut %oes not sa' tat e must &e soen,a,e% in te Pili$$ine "slan%s in or%er to &e consi%ere% a mercant. .s far as ma'&e ,atere% from te $lain lan,ua,e of te statute( e ma' %o is sellin,( &arterin, ore#can,in,)erevere$leases( &ut ifeconsi,nsmercan%isea&roa%fromtePili$$ine "slan%s e must $a' te ta# on is consi,nments. /a% it &een te intentionof te Le,islature to re;uire onl' te local mercant to $a' te ta#( te %efinition ofte)or%@mercant@insection1A59)oul%averea%= @6ercant@as ereuse%means a$ersonen,a,e%intesale( &arter or e#can,eof $ersonal $ro$ert'of)atever caracter in te Pili$$ine "slan%s.@ But it %oes not so rea%. . si$ment is a si$ment mo matter )at its $ur$ose ma' &e an% te onl' re;uisitefor tecollectionof teta#u$onit is tat teconsi,nor or si$$er must &eamercant. "t )oul%( in%ee%( &e unreasona&le to re;uire te ta# collector to $ost$onete collection of te ta# on a si$ment until e coul% ascertain )at a% ultimatel'&een %one )it te ,oo%s si$$e%.,bcom vs #'R ; due process clause"acts% Pili$$ineBankof!ommunications(PB!om)( acommercial &ankin,cor$oration%ul' or,anize% un%er Pili$$ine la)s( file% its ;uarterl' income ta# returns for tefirst an%secon%;uartersof1985( re$orte%$rofits( an%$ai%tetotal incometa#of P5(912(95A.99. 3e ta#es %ue )ere settle% &' a$$l'in, PB!oms ta# cre%it memosan% accor%in,l'( te Bureau of "nternal Revenue (B"R) issue% 3a# :e&it 6emo Nos.97A2-85 an% 97A7-85 for P5(A91(791.99 an% P1( 215(>55.99( res$ectivel' PB!om suffere% losses so tat )en it file% its .nnual "ncome 3a# Returns for te'ear-en%e%:ecem&er 51( 1985( it %eclare%anet loss of P>5(517(>>8.99( tere&'so)in, no income ta# lia&ilit'. *or te succee%in, 'ear( en%in, :ecem&er 51( 1982(te $etitioner like)ise re$orte% a net loss ofP1A(1>9(29>.99( an% tus %eclare% no ta#$a'a&le for te 'ear. But %urin, tese t)o 'ears( PB!om earne% rental income from lease% $ro$erties. 3elessees )itel% an% remitte% to te B"R )itol%in, cre%ita&le ta#es ofP>8>(795.59in 1985 an% P>5A(977.29 in 1982. 8n.u,ust 7( 1987( $etitioner re;ueste%te!ommissioner of "nternal Revenue(amon, oters( for a ta# cre%it of P5(912(95A.99 re$resentin, te over$a'ment of ta#esin te first an% secon% ;uarters of 1985. 3ereafter( on Oul' >5( 1988( $etitioner file% a claim for refun% of cre%ita&le ta#es)itel% &' teir lessees from $ro$ert' rentals in 1985 for P>8>(795.59 an% in 1982for P>5A(977.29.1985 1982Net"ncome(Loss)(P>5(517(>>8.99) (P1A(1>9(29>.99)3a# :ue N"L N"LRuarterl' ta# Pa'ments 6a%e5(912(95A.99 ---3a#+itel%at ?ource>8>(795.59 >5A(977.297#cess 3a#Pa'mentsP5(>99(7A9.59STTTTTTTTTTTTTTP>5A(977.29TTTTTTTTTTTTTT !3.ren%ere% a %ecision )ic( as state% onte outset( %enie% te re;uest of$etitioner for a ta# refun% or cre%it in te sum amount ofP5(>99(7A9.95( on te ,roun%tat it )as file% &e'on% te t)o-'ear re,lementar' $erio% $rovi%e% for &' la). 3e$etitioners claim for refun% in 1982 amountin, toP>5A(977.29 )as like)ise %enie% onte assum$tion tat it )as automaticall' cre%ite% &' PB!om a,ainst its ta# $a'mentin te succee%in, 'ear. 3is )as affirme% &' !..'ssue% :i% te !ourt of .$$eals violate% te %ue $rocess clause in %en'in, te $lea for ta#refun%orta#cre%itsonte,roun%of$rescri$tion( %es$ite$etitionersrelianceonR6! No. 7-85( can,in, te $rescri$tive $erio% of t)o 'ears to ten 'earsJRuling% No. .s$rovi%e%intela)( . cor$orationma're;uestforterefun%ofteover$ai%income ta# or claim for automatic ta# cre%it. 3o insure $rom$t action on cor$orateannual income ta# returns so)in, refun%a&le amounts arisin, fromover$ai%;uarterl'incometa#es( tis8fficeas$romul,ate%Revenue6emoran%um8r%erNo. 5>-72 %ate% Oune 11( 1972( containin, te $roce%ure in $rocessin, sai%returns. Fn%er tese$roce%ures( tereturns aremerel'$re-au%ite%)icconsistmainl' of ceckin, matematical accurac' of te fi,ures of te return. .fter )ic(terefun%or ta#cre%it is ,rante%( an%( tis $roce%ure)as a%o$te%tofacilitateimme%iate action on cases like tis. 'n this regard& therefore& there is no need to filepetitions for review in the #ourt of Tax Appeals in order to preserve the right toclaim refund or tax credit within the two2ear period. Basic is te $rinci$le tat ta#es are te life&loo% of te nation. 3e $rimar' $ur$ose isto ,enerate fun%s for te ?tate to finance te nee%s of te citizenr' an% to a%vance tecommon)eal.U15V )ueprocess of lawunderthe#onstitutiondoes not re0uire=udicialproceedingsintaxcases53ismust necessaril'&eso&ecauseit isu$onta#ationtat te ,overnment ciefl'relies too&tainte means tocarr'onitso$erations an%it isof utmost im$ortancetat temo%esa%o$te%toenforcetecollection of ta#es levie% soul% &e summar' an% interfere% )it as little as $ossi&le *rom te same $ers$ective( claims for refun% or ta# cre%it soul% &e e#ercise% )itintetimefi#e%&'la)&ecauseteB"R&ein,ana%ministrative&o%'enforce%tocollect ta#es( its functions soul% not &e un%ul' %ela'e% or am$ere% &' inci%entalmatters. ?ection >59 of te National "nternal Revenue !o%e (N"R!) of 1977 (no) ?ec. >>9(N"R! of 1997) $rovi%es for te $rescri$tive $erio% for filin, a court $rocee%in, forte recover' of ta# erroneousl' or ille,all' collecte%( !i/.= ?ec. >59. 1eco!ery of tax erroneously or illegally collected" ## No suit or $rocee%in,sall &e maintaine% in an' court for te recover' of an' national internal revenue ta#ereafter alle,e% to ave &een erroneousl' or ille,all' assesse% or collecte%( or of an'$enalt' claime% to ave &een collecte% )itout autorit'( or of an' sum alle,e% toave &een e#cessive or in an' manner )ron,full' collecte%( until a claim for refun% orcre%it as &een %ul' file% )it te !ommissioner1 &ut suc suit or $rocee%in, ma' &emaintaine%( )eter or not suc ta#( $enalt'( or sum as &een $ai% un%er $rotest or%uress. "n an' case( no such suit or proceeding shall be begun after the expiration of twoyears from the date of payment of the tax or penalty regardless of any super!eningcause that may arise after payment1 Provi%e% o)ever( 3at te !ommissioner ma'(even )itout a )ritten claim terefor( refun% or cre%it an' ta#( )ere on te face ofte return u$on )ic $a'ment )as ma%e( suc $a'ment a$$ears clearl' to ave &eenerroneousl' $ai%. ("talics su$$lie%) 3erulestates tat teta#$a'er ma'fileaclaimfor refun%or cre%it )itte!ommissioner of "nternal Revenue( )itin t)o (>) 'ears after $a'ment of ta#( &eforean' suit in !3. is commence%. 3e t)o-'ear $rescri$tive $erio% $rovi%e%( soul% &ecom$ute% from te time of filin, te .%0ustment Return an% final $a'ment of te ta#for te 'ear.T+LENT'N+ vs $ecretar of "inance ; uniform 7 e0uitable rule"acts% .rturo 3olentino et al are ;uestionin, te constitutionalit' of R. 7712 oter)ise kno)n aste 7#$an%e% Halue .%%e% 3a# (7H.3) La). 3olentinoaverre%tat tis revenue&ill %i%not e#clusivel'ori,inatefromte/ouseofRe$resentativesasre;uire%&'?ection>A(.rticle2ofte!onstitution. 7ventou,R.7712 ori,inate% as /B 11197 an% tat it $asse% te 5 rea%in,s in te /oR( te same %i% notcom$lete te 5 rea%in,s in ?enate for after te 1st rea%in, it )as referre% to te ?enate +a'sW 6eans !ommittee tereafter ?enate $asse% its o)n version kno)n as ?enate Bill 1259. 3olentino averre% tat )at ?enate coul% ave %one is amen% /B 11197 &' strikin, out itste#t an% su&stitutin, it )it te te#t of ?B 1259 in tat )a' Cte &ill remains a /ouse Bill an%te ?enate version 0ust &ecomes te te#t (onl' te te#t) of te /BD. ("tKs ironic o)ever tonote tat3olentino an% co-$etitioner Raul Roco even si,ne% te sai% ?enate Bill. Like)ise( 3olentino also ;uestions te unconstitutionalit' of R... No. 7712( as it R. 7712seeksto )i%en te ta#&ase of tee#istin, H.3 s'stem an% enanceitsa%ministration &'amen%in, te National "nternal Revenue !o%e (N"R!). 8ne of te reasons is tat it violates.rticleH"( ?ection>8(1))ic$rovi%estat Cteruleofta#ationsall &euniforman%e;uita&le. 3e !on,ress sall evolve a $ro,ressive s'stem of ta#ation.D'ssue% :i% R. 7712 violate te rule tat ta#es soul% &e uniform an% e;uita&leJRuling% no 7;ualit' an% uniformit' of ta#ation means tat all ta#a&le articles or kin%s of $ro$ert' of tesame class &e ta#e% at te same rate. 3e ta#in, $o)er as te autorit' to make reasona&lean% natural classifications for $ur$oses of ta#ation. 3o satisf' tis re;uirement it is enou,tat te statute or or%inance a$$lies e;uall' to all $ersons( forms an% cor$orations $lace% insimilar situation. (!it' of Ba,uio v. :e Leon( supra1 ?ison( Or. v. "n%ee%( teH.3)asalrea%'$rovi%e%in7.8. No. >75lon,&eforeR... No. 7712)asenacte%. R... No. 7712 merel' e#$an%s te &ase of te ta#. 3e vali%it' of te ori,inal H.3La) )as ;uestione% in 4apatiran ng 'agliling5od sa 2amahalaan ng 2ilipinas$ Inc. !. Tan(125 ?!R. 585 (1988) on ,roun%s similar to tose ma%e in tese cases( namel'( tat te la))as @o$$ressive( %iscriminator'( un0ust an% re,ressive in violation of .rt. H"( X>8(1) of te!onstitution.@ (.t 58>) Re0ectin, te callen,e to te la)( tis !ourt el%= .s te !ourt sees it( 78 >75 satisfies all te re;uirements of a vali% ta#. "t is uniform. . . . 3e sales ta# a%o$te% in 78 >75 is a$$lie% similarl' on all ,oo%s an% services sol% to te$u&lic( )ic are not e#em$t( at te constant rate of 9E or 19E. 3e %is$ute% sales ta# is also e;uita&le. "t is im$ose% onl' on sales of ,oo%s or services &'$ersonsen,a,e%in&usiness)itana,,re,ate,rossannual salese#cee%in,P>99(999.99.?mall corner sari-sari stores are conse;uentl' e#em$t from its a$$lication. Like)ise e#em$tfrom te ta# are sales of farm an% marine $ro%ucts( so tat te costs of &asic foo% an% oternecessities( s$are% as te' are from te inci%ence of te H.3( are e#$ecte% to &e relativel'lo)er an% )itin te reac of te ,eneral $u&lic. (.t 58>-585)*ERAL#+ vs 6'NAN ; non2impairment of contracts"acts% 8n19Oanuar'1985( 67R.L!8)as,rante%afrancise&'teNational 7lectrification.%ministration to o$erate an electric li,t an% $o)er service in te 6unici$alit' of !alam&a(La,una as )ell as certain munici$alities of te Province of La,una inclu%in,( Bian( ?ta Rosa(?anPe%ro(Luisiana(!alauan an%!a&u'ao( &' virtueofe#istin,la)stenineffect(tenissue% resolutions trou, teir res$ective munici$al councils ,rantin, francise in favor of$etitioner 6anila 7lectric !om$an' (67R.L!8) 8n 1> ?e$tem&er 1991( R.. 7129( ( Local Government !o%e of 1991)( )as enacte% to takeeffect on 91 Oanuar' 199> en0oinin, local ,overnment units to create teir o)n sources ofrevenuean%tolev'ta#es( feesan%car,es( su&0ect totelimitationse#$resse%terein(consistent )it te &asic $olic' of local autonom' $rovince enacte% La,una Provincial 8r%inance No. 91-9>( effective 91 Oanuar' 1995($rovi%in,( in $art( as follo)s=?ec. >.99. "ranchise Tax. 3ere is ere&' im$ose% a ta# on &usinesses en0o'in, a francise(at a rate of fift' $ercent (59E) of one $ercent (1E) of te ,ross annual recei$ts( )ic sallinclu%e&otcassalesan%salesonaccount realize%%urin,te$rece%in,calen%ar 'ear)itin tis $rovince( inclu%in, te territorial limits on an' cit' locate% in te $rovinceU1V Provincial 3reasurer sent a %eman% letter to 67R.L!8 for te corres$on%in, ta# $a'mentan% 67R.L!8 $ai% te ta#( )ic ten amounte% to P19(5>9(2>8.A>( un%er $rotest. . formal claim for refun% )as tereafter sent &' 67R.L!8 to te Provincial 3reasurer ofLa,unaclaimin,tat tefranciseta#it a%$ai%an%continue%to$a'toteNationalGovernment $ursuant to P.:. 551 alrea%' inclu%e% te francise ta# im$ose% &' teProvincial 3a# 8r%inance. 8n>8.u,ust 1995( teclaimfor refun%of $etitioner )as%enie%inaletter si,ne%&'Governor Oose :. Lina. "n %en'in, te claim( res$on%ents relie% on a more recentla)( i"e"$ Re$u&lic .ct No. 7129 or te Local Government !o%e of 1991( tan te ol% %ecreeinvoke% &' $etitioner. 8n 1A *e&ruar' 1992( $etitioner 67R.L!8 file% )it te Re,ional 3rial !ourt of ?ta !ruz(La,una( a com$laint for refun%( )ic )as %enie% &' te R3!.'ssue% +as te im$osition of a francise ta# un%er ?ection >.99 of La,una Provincial 8r%inance No.91-9>( insofaras$etitionerisconcerne%( isviolativeoftenon-im$airment clauseofte!onstitution an% ?ection 1 of Presi%ential :ecree No. 551JRuling No. #ontractual tax exemptions& in the real sense of the term and where the non2impairmentclauseof the#onstitutioncanrightlbeinvo9ed& arethoseagreedtobthetaxingauthoritincontracts& suchasthosecontainedingovernment bondsordebentures&lawfull entered into b them under enabling laws in which the government& acting in itsprivate capacit& sheds its cloa9 of authorit and waives its governmentalimmunit5 3rul'( ta#e#em$tionsof tiskin%ma'not &erevoke%)itout im$airin,teo&li,ations of contracts.U1AV 3ese contractual ta# e#em$tions( o)ever( are not to &e confuse%)itta#e#em$tions,rante%un%er francises. .francise$artakestenatureof a,rant)icis&e'on%te$urvie)oftenon-im$airment clauseofte!onstitution.U15V "n%ee%(.rticle