ABAKADA GURO PARTY LIST v ERMITA

FACTS:

E-VAT LAW WAS PASSED INTO LAW IN JULY 1, 2005 BUT A TRO WAS THEN ISSUED BY THE COURT ON
THAT DATE.

Before e-vat took effect, ABAKADA GURO party list et. al. filed a petition for prohibition on May 2005.
They question the constitutionality of secs. 4,5, and 6 which impose 10% vat each on sale of goods and
properties, importation of goods, and sale of services and use or lease of properties. These provisions
authorizes the President, upon reco of Finance Sec, to raise the VAT rate to 12% effective Jan 1, 2006.

ABAKADA argue that the law is unconstitutional, as it constitutes abandonment by Congress of its
exclusive authority to fix the rate of taxes under Art 6 sec. 28(2) of the Constitution.

In GR 168207, Sen. Pimentel et.al. likewise assailed the constitutionality of said provisions. Aside from
questioning the so-called standy-by authority of the President on the ground of undue delegation of
legislative power, they also contend that the increase violates the due process clause in Art. 3, sec. 1 of
the Consti, as it imposes an unfair and additional tax burden on the people. They further claim that the
inclusion of a stand-by authority is a violation of the no-amendment rule.

In GR 168461, a petition for prohibition was filed by the Association of Pilipinas Shell Dealers, et.al.
assailing the provisions of the e-vat law (RA 9337) for being unconstitutional (arbitrary, oppressive,
excessive and confiscatory. They believe that it violates due process and equal protection.

In GR 168463, several members of the HOR led by Rep. Escudero filed this petition and questioned the
constitutionality of the e-vat law on the grounds that it constitutes an undue delegation of legislative
power. (in violation of Art 6, sec. 28(2)), the bicameral comm acted without jurisdiction in deleting the
no pass on provisions, insertion by the bicameral comm of provisions present in senate bill 1950,
violates art 6, sec. 24(1) which provides that all appropriation, revenue or tariff bills shall originate
exclusively in the HOR.

In GR 168730, Gov. Garcia alleged the constitutionality 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. That allowing establishments to pass on the tax to the consumers is
inequitable in violation of art 6,sec. 28(1).

OSG filed a comment in behalf of the respondents. Relying on the case of Tolentino vs Sec of Finance,
respondents argue that the procedural issues raised herein i.e., legality of the bicameral proceedings,
exclusive origination of revenue measures and the power of the Senate concomitant thereto have
already been settled. With regard to the issue of undue delegation of legislative power to the president,
the law is complete and leaves no discretion to the President but to increase the rate to 12% once any of
the 2 condition provided arise.
ISSUE: WON THE E-VAT LAW VIOLATES SEC. 28(2) OR THE UNDUE DELEGATION OF LEGISLATIVE POWER
TO THE PRESIDENT.

RULING:

NO UNDUE DELEGATION OF LEGISLATIVE POWER.

Petitioners contend in common that some provisions of the e-vat law giving the President the stand-by
authority to raise the VAT rate form 10% to 12% when a certain condition is met, constitutes undue
delegation of the legislative power to tax.

They argue that the VAT is a tax levied on the sale, barter or exchange of goods and properties as well as
on the sale or exchange of services, which cannot be included within the purview of tariffs under the
exempted delegation as the latter refers to customs duties, tolls or tribute payable upon merchandise to
the government and usually imposed on goods or merchandise imported or exported.

ABAKADA contends that delegating legislative power to the President is contrary to republicanism and
nullified the President's power of control. ESCUDERO et al find it bizarre that the 12% imposition would
be subject to the whim of the Secretary of Finance (an unelected bureaucrat)