VERA v. CUEVAS, GR No.

L-33693-94, May 31, 1979 (First Division), De Castro

Facts:

Petitioner Misael P. Vera, Commissioner of Internal Revenue, required

respondents—Consolidated Philippines Inc., General Milk Company Phil. Inc., and Milk
Industries Inc., all in the business in the manufacture, sale, and distribution of filled milk
products, and all of which are members of respondent corporation, Institute of
Evaporated Filled Milk Manufacturers of the Philippines—to withdraw from the market,
all their filled milk products which do not bear the inscription required by Section 169 of
Tax Code1. The court issued a writ of preliminary injunction restraining the Commission
of Internal Revenue from taking any action against petitioners pending final
determination of the case.

Meanwhile, in another case, a special civil action was brought by Antonio R. De

Joya and Sufornio Carrasco, as Public Relations Counsel and President of the
Philippine Association of Nutrition to the Fair Trade Board against the Institute of
Evaporated Milk Manufacturers of the Philippines for misleading advertisement,
mislabenling, and/or misbranding for omitting to state in their labels “imitation milk” on
their filled milk products and omitting to mark containers of their filled milk products the
same statement required in Section 169 of Tax Code. Respondents prayed that the
Fair Trade Board desist from further proceeding pending final determination in the
previous case.

The two cases were consolidated, and RTC ruled the actions of the Commission
on Internal Revenue and Fair Trade Board to be NUN and VOID and without authority
of law. Hence this PETITION FOR CERTIORARI WITH PRELIMERNARY
INJUNCTION.

Issue/s:

(a) Whether or not the lower court erred in ruling that Sec. 169 of Tax Code has
been repealed by implication and that Commissioner necessarily lost his
authority to enforce the same?
(b) Whether or not the Fair Trade Board is without jurisdiction to investigate and
prosecute alleged misbranding, mislabelling, and/or misleading advertisement of
filled milk products?

Ruling:

Yes, the lower court did not err in ruling that Sec. 169 of Tax Code was been
repealed by implication. Sec. 169 was enacted together with Sec. 141 (which imposed
a specific tax on skimmed milk) and Sec. 177 (which penalized the sale of skimmed milk
without payment of the specific tax and without the legend required by Sec. 169).
However, Sec. 141 was expressly repealed by Sec. 1 of RA 344 and Sec. 177 by Sec. 1
of RA 463, thus Sec. 169 became a merely declaratory provision, without a tax purpose
or penal sanction.

Morevoer, Sec. 169 does not apply to filled milk. Use of the specific and
qualifying terms “skimmed milk” in the head note and “condensed skimmed milk” in the
text of the cited section would restrict the scope of the general clause, “all milk in
whatever form, from which the fatty part is removed totally or in part...” Skimmed milk is
different from filled milk as according to the definition of the Board of Food Inspection,
“skimmed milk is milk in whatever form from which the party part has been removed;
filled milk, on the other hand, is any milk...to which has been added...any fat or oil other
than milk fat so the result is an imitation or semblance of milk cream or skim milk.” It
cannot then be assumed that Sec. 169 applies to both skimmed milk and filled milk.

Under the rule of ejusdem generis, general and unlimited terms are restrained
and limited by the particular terms they follow in the statute.

The Court is likewise induced to believe that filled milk is suitable for infants.
Petitioners themselves admitted that “ the filled milk products of the petitioners (now
private respondents) are safe, nutritious, wholesome, and suitable for feeding infants of
all ages.” Being so, the declaration in Sec. 169 of Tax Code that filled milk is not
suitable for nourishment for infants...constitute a deprivation of property without due
process of law.

Moreover, Sec. 169 entails promotion of health of the nation and thus
unconnected with any tax purpose. This is the exclusive function of the Food and Drug
Administration of the Department of Health as provided in RA 37202. Petitioners thus
have no jurisdiction to investigate and prosecute alleged misbranding of filled milk. The
jurisdiction lies with the Board of Food and Drug Inspection.

Wherefore, decision appealed from is hereby AFFIRMED in toto. No costs.

1 Sec. 169. Tax Code...all condensed skimmed milk and all milk in whatever form, from which the fatty
part has been removed totally or in part...shall be clearly and legibly marked on its immediate
containers...with the words, “This milk is not suitable for nourishment for infants less than one year of
age,” or with equivalent words.

2 Sec. 9. RA 3720. It shall be the duty of the Board (Food and Drug Inspection)...to hold hearings and
conduct investigations relative to matters touching the Administration of this Act, to investigate processes
of food, drug, and cosmetic manufacture and to subject reports to the Food and Drug Administrator,
recommending food and drug standards for adoption...