Villegas vs. HIU CHIONG TSAI PAO HO and JUDGE FRANCISCO ARCA Angel C. Cruz, Gregorio A.

Ejercito, Felix C. Chaves & Jose Laureta for petitioner. Sotero H. Laurel for respondents. Fernandez, J Nature: This is a petition for certiorari to review the decision dated September 17, 1968 of respondent Judge Francisco Arca of the Court of First Instance of Manila declaring Ordinance No. 637 of the City of Manila null and void. Facts: City Ordinance No. 637 entitled AN ORDINANCE MAKING IT UNLAWFUL FOR ANY PERSON NOT A CITIZEN OF THE PHILIPPINES TO BE EMPLOYED IN ANY PLACE OF EMPLOYMENT OR TO BE ENGAGED IN ANY KIND OF TRADE, BUSINESS OR OCCUPATION WITHIN THE CITY OF MANILA WITHOUT FIRST SECURING AN EMPLOYMENT PERMIT FROM THE MAYOR OF MANILA; AND FOR OTHER PURPOSES was passed by the Municipal Board of Manila and signed by the herein petitioner Mayor Antonio J. Villegas of Manila. Section 1 of said Ordinance No. 6537 prohibits aliens from being employed or to engage or participate in any position or occupation or business enumerated therein, whether permanent, temporary or casual, without first securing an employment permit from the Mayor of Manila and paying the permit fee of P50.00. Violations of this ordinance is punishable by an imprisonment or a fine or both Private respondent Hiu Chiong Tsai Pao Ho who was employed in Manila, filed a petition with the Court of First Instance of Manila, praying for the issuance of the writ of preliminary injunction and restraining order to stop the enforcement of Ordinance No. 6537 as well as for a judgment declaring said Ordinance No. 6537 null and void on the following grounds: 1) It is discriminatory and violative of the rule of uniformity in taxation; 2) As a police power measure, it makes no distinction and that it fails to prescribe any standard to guide and/or limit the action of the Mayor, thus, violating the fundamental principle on illegal delegation of legislative powers: 3) It is arbitrary, oppressive and unreasonable, being applied only to aliens, thus, violates the due process and equal protection clauses of the Constitution. Respondent Judge issued the writ of preliminary injunction and rendered judgment declaring Ordinance No. 6537 null and void and making permanent the writ of preliminary injunction. Hence, this petition Issues: I WHETHER THE RESPONDENT JUDGE COMMITTED A SERIOUS AND PATENT ERROR OF LAW IN RULING THAT ORDINANCE NO. 6537 VIOLATED THE CARDINAL RULE OF UNIFORMITY OF TAXATION.

II

WHETHER THE RESPONDENT JUDGE LIKEWISE COMMITTED A GRAVE AND PATENT ERROR OF LAW IN RULING THAT ORDINANCE NO. 6537 VIOLATED THE PRINCIPLE AGAINST UNDUE DESIGNATION OF LEGISLATIVE POWER. WHETHER RESPONDENT JUDGE FURTHER COMMITTED A SERIOUS AND PATENT ERROR OF LAW IN RULING THAT ORDINANCE NO. 6537 VIOLATED THE DUE PROCESS AND EQUAL PROTECTION CLAUSES OF THE CONSTITUTION.

III

Ruling: I No. While it is true that the first part which requires that the alien shall secure an employment permit from the Mayor involves the exercise of discretion and judgment in the processing and approval or disapproval of applications for employment permits and therefore is regulatory in character the second part which requires the payment of P50.00 as employee's fee is not regulatory but a revenue measure. It is obvious that the purpose of the ordinance is to raise money under the guise of regulation. Hence, the rule on uniformity of taxation was correctly applied. II No. Ordinance No. 6537 is void because it does not contain or suggest any standard or criterion to guide the mayor in the exercise of the power which has been granted to him by the ordinance. III No. Requiring a person before he can be employed to get a permit from the City Mayor of Manila who may withhold or refuse it at will is tantamount to denying him the basic right of the people in the Philippines to engage in a means of livelihood. While it is true that the Philippines as a State is not obliged to admit aliens within its territory, once an alien is admitted, he cannot be deprived of life without due process of law. This guarantee includes the means of livelihood. The shelter of protection under the due process and equal protection clause is given to all persons, both aliens and citizens

CIR vs. CA, CTA and Alhambra Industries Inc. Bellosillo, J Nature: This is a petition for review on certiorari (Rule 45, not sure) of the decision of the CA affirming the decision of the CTA which ordered the petitioner to refund private respondent the amount of P520,835.29 representing erroneously paid ad valorem tax for the period 2 Nov 90 to 22 Jan 91. Facts: The present dispute arose from the discrepancy in the taxable base on which the excise tax is to apply on account of two incongruous BIR Rulings: (1) BIR Ruling 473-88 dated 4 October 1988 which excluded the VAT from the tax base in computing the fifteen per cent (15%) excise tax due; and, (2) BIR Ruling 017-91 dated 11 February 1991 which included back the VAT in computing the tax base for purposes of the fifteen per cent (15%) ad valorem tax Petitioner, a domestic corporation engaged in the manufacture and sale of cigar and cigarette products fully paid its AVT relying on BIR Ruling No. 473-88. The said ruling was later declared void ab initio for being violative of Sec 142 of the Tax Code (BIR Ruling 017-91). Subsequently, BIR claimed in its assessment a deficiency of P520,835.29 AVT, inclusive of interest and surcharge against Alhambra after a retroactive application of the latter ruling in the determination of gross selling price . Allegedly, (1)private respondent was in bad faith in applying Ruling 473-88, and that (2)Alhambras reliance on BIR Ruling 473-88 being contrary to Sec. 142 of the TC does not confer vested rights to private respondents in the computation of its AVT and does not place the government in estoppel in collecting taxes legally due. Alhambra paid under protest. Issue: Whether private respondent's reliance on a void BIR ruling conferred upon the latter a vested right to apply the same in the computation of its ad valorem tax and claim for tax refund. Ruling: Yes. The deficiency tax assessment issued by petitioner against private respondent is without legal basis because of the prohibition against the retroactive application of the revocation of BIR rulings in the absence of bad faith on the part of private respondent. We find no convincing evidence that private respondent's implementation of the computation mandated by BIR Ruling 473-88 was illmotivated or attended with a dishonest purpose. Well-entrenched is the rule that rulings and circulars, rules and regulations promulgated by the Commissioner of Internal Revenue would have no retroactive application if to so apply them would be prejudicial to the taxpayers. Without doubt, private respondent would be prejudiced by the retroactive application of the revocation as it would be assessed deficiency excise tax. Further, the government is not estopped from collecting taxes legally due because of mistakes or errors of its agents. But like other principles of law, this admits of exceptions in the interest of justice and fair play, as where injustice will result to the taxpayer.

Manila Race Horse Trainers Assoc. Inc., vs. Manuel de la Fuente Soriano, Garde and Cervania for appellants. City Fiscal Eugenio Angeles and Assistant Fiscal Arsenio Naawa for appellee. Tuason, J. Nature: This is an action for declaratory relief by the Manila Race Horses Trainers Association, Inc., a non-stock corporation duly organized and existing under and by virtue of the laws of the Philippines, who allege that they are owners of boarding stables for race horses and that their rights as such are affected by Ordinance No. 3065 (AN ORDINANCE PROVIDING FOR LICENSE FEES ON PERSONS MAINTAINING OR CONDUCTING ANY BOARDING STABLE FOR HORSE RACES AND/OR HORSE STABLES, OR PLACES WHERE HORSE ARE KEPT, FED, OR BOARDED FOR OTHERS, FOR COMPENSATION OR HIRE, AND/OR FOR PRIVATE, AND FOR OTHER PURPOSES) of the City of Manila approved on July 1, 1947. They made the Mayor of Manila defendant and prayed that said ordinance be declared invalid as violative of the Philippine Constitution. Facts: The case was submitted on the pleadings, and the decision was that the ordinance in question "is constitutional and valid and has been enacted in accordance with the powers of the Municipal Board granted by the Charter of the City of Manila." On appeal, the plaintiffs as appellants maintained that the ordinance under consideration is a tax on race horses as distinct from boarding stables. It is likewise alleged that the ordinance in question is discriminatory and savors of class legislation Issues: Whether Ordinance No. 3065 is Constitutional Ruling: Yes. The tax is assessed not on the owners of the horses but on the owners of the stables. The owners of boarding stables for race horses and, for that matter, the race horse owners themselves, who in the scheme of shifting may carry the taxation burden, are a class by themselves and appropriately taxed where owners of other kinds of horses are taxed less or not at all, considering that equity in taxation is generally conceived in terms of ability to pay in relation to the benefits received by the taxpayer and by the public from the business or property taxed. Race horses are devoted to gambling if legalized, their owners derive fat income and the public hardly any profit from horse racing, and this business demands relatively heavy police supervision. Taking everything into account, the differentiation against which the plaintiffs complain conforms to the practical dictates of justice and equity and is not discriminatory within the meaning of the Constitution.

EASTERN THEATRICAL vs. ALFONSO as City Treasurer of Manila Francisco Zulueta and Poblador Jr. for appellants. City Fiscal Jose P. Bengzon and Assistant City Fiscal Julio Villamor for appellees. Assistant Solicitor General Carmelino G. Alvendia, Solicitor Guillermo E.Torres and Manuel D. Baldeo as amicus curiae. Perfecto, J Nature: This is an appeal from the decision of Judge Emilio Pena of the CFI of Manila upholding the validity of Ordinance No. 2958 (AN ORDINANCE IMPOSING A FEE ON THE PRICE OF EVERY ADMISSION TICKET SOLD BY CINEMATOGRAPHS, THEATERS VAUDEVILLE COMPANIES THEATRICAL SHOWS AND BOXING EXHIBITION AND PROVIDING FOR OTHER PURPOSES) Facts: Plaintiffs, operator of theatres in Manila and distributor of local or imported films sought to impugn the validity of Ordinance No. 2958 which was enacted by the Municipal Board of Manila by virtue of the power granted under Section 2444 (m) of the Revised Administrative Code (charter). Appellants point out that the ordinance in question does not tax "many more kinds of amusements" than those therein specified, such as "race tracks, cockpits, cabarets, concert halls, circuses, and other places of amusement, thus violated the principle of equality and uniformity of taxation enjoined by the Constitution (sec. 22, sub-sec. 1, Art. VI, 1987 Constitution) Issue: Whether the trial court erred in not holding that Ordinance No. 2958 violated the principle of equality and uniformity of taxation Ruling: No. The fact that some places of amusement are not taxed while others, such as cinematographs, theatres, vaudeville companies, theatrical shows, and boxing exhibitions and other kinds of amusements or places of amusement are taxed, is no argument at all against the equality and uniformity of the tax imposition. Equality and uniformity in taxation means that all taxable articles or kinds of property of the same class shall be taxed at the same rate. The taxing power has the authority to make reasonable and natural classifications for purposes of taxation; and the appellants cannot point out what places of amusement taxed by the ordinance do not constitute a class by themselves and which can be confused with those not included in the ordinance

Shell vs. Vano C.J. Johnston and A.P. Deen for appellant. Provincial Fiscal Jose C. Borromeo and Assistant Provincial Fiscal Ananias V. Maribao for appellee. Padilla, J Nature: This is an appeal (in an action for refund of municipal taxes claimed to have been paid and collected under illegal ordinances) from the judgment[( of the CFI of Cebu) not sure] upholding the validity of ordinances: No. 10, series of 1946, which imposes an annual tax of P150 on occupation or the exercise of the privilege of installation manager; No. 9, series of 1947, which imposes an annual tax of P40 for local deposits in drums of combustible and inflammable materials and an annual tax of P200 for tin can factories; and No. 11, series of 1948, which imposes an annual tax of P150 on tin can factories having a maximum output capacity of 30,000 tin cans, and dismissing the complaint (only Ord.No.10 tackles the issue on Uniformity) Facts: The Municipal Council of Cordova, Province of Cebu adopted Ordinance No. 9, 10 and 11. The Shell Co., a foreign corporation filed suit for refund of the taxes paid by it on the ground that the ordinances imposing such taxes are ultra vires. The defendant denied the allegation. Ordinance No. 10 series of 1946, which imposes an annual tax of P150 on "installation manager" comes under the provisions of Commonwealth Act No. 472. But it is claimed that "installation manager" is a designation made by the plaintiff and such designation cannot be deemed to be a "calling" as defined in section 178 of the National Internal Revenue Code (Com. Act No. 466), and that the installation manager employed by the plaintiff is a salaried employee which may not be taxed by the municipal council under the provisions of Commonwealth Act No. 472. It is likewise contended that the ordinance is discriminatory and hostile because there is no other person in the locality who exercises such "designation" or occupation. Issue: Whether Ordinance No. 10 is discriminatory Ruling: No. The contention that the ordinance is discriminatory and hostile because there is no other person in the locality who exercises such "designation" or occupation is also without merit, because the fact that there is no other person in the locality who exercises such a "designation" or calling does not make the ordinance discriminatory and hostile, inasmuch as it is and will be applicable to any person or firm who exercises such calling or occupation named or designated as "installation manager." Moreover, the allegation that "installation manager" is a designation made by the plaintiff and such designation cannot be deemed to be a "calling" as defined in section 178 of the National Internal Revenue Code (Com. Act No. 466), and that the installation manager employed by the plaintiff is a salaried employee which may not be taxed by the municipal council under the provisions of Commonwealth Act No. 472, is without merit, Even if the installation manager is a salaried employee of the plaintiff, still it is an occupation "and one occupation or line of business does not become exempt by being conducted with some other occupation or business for which such tax has been paid' and the occupation tax must be paid "by each individual engaged in a calling subject thereto." And pursuant to section 179 of the National Internal Revenue Code, "The payment of . . . occupation tax shall not exempt

any person from any tax, . . . provided by law or ordinance in places where such . . . occupation in . . . regulated by municipal law, nor shall the payment of any such tax be held to prohibit any municipality from placing a tax upon the same . . . occupation, for local purposes, where the imposition of such tax is authorized by law."

City of Baguio vs. De Leon The City Attorney for plaintiff-appellee. Fortunato de Leon for and in his own behalf as defendant-appellant. Fernando, J Nature: This is an appeal from the decision of the City Court of Baguio upholding the validity of an ordinance1 of the City of Baguio imposing a license fee on any person, firm, entity or corporation doing business in the City of Baguio. Facts: Defendant-appellant Fortunato de Leon is a real estate dealer with a property therein worth more than P10,000, but not in excess of P50,000. Under the said ordinance, he is obliged to pay the sum of P300 as license fee covering the period from the first quarter of 1958 to the fourth quarter of 1962. Allegedly, de Leon failed to pay the said amount despite repeated demands. Appellant alleged that the Ordinance is not valid as it constitutes double taxation and that it violated the requirement of uniformity. Issue: I II Ruling: I No. Argument against double taxation may not be invoked where one tax is imposed by the state and the other is imposed by the city ..., it being widely recognized that there is nothing inherently obnoxious in the requirement that license fees or taxes be exacted with respect to the same occupation, calling or activity by both the state and the political subdivisions thereof. No. "Equality and uniformity in taxation means that all taxable articles or kinds of property of the same class shall be taxed at the same rate. The taxing power has the authority to make reasonable and natural classifications for purposes of taxation as held in Eastern Theatrical Co. v. Alfonso To satisfy the requirement of uniformity, all that is needed as held in another case decided two years later, 15 is that the statute or ordinance in question "applies equally to all persons, firms and corporations placed in similar situation. Inequalities which result from a singling out of one particular class for taxation or exemption infringe no constitutional limitation Whether the ordinance imposed double taxation Whether the ordinance violates the requirement of uniformity

II

American Bible Society vs. City of Manila City Fiscal Eugenio Angeles and Juan Nabong for appellant. Assistant City Fiscal Arsenio Naawa for appellee. Felix, J. Nature: This is a petition for review of the decision of the CFI of Manila dismissing the complaint which prays that a judgment be to rendered declaring the Municipal Ordinance No. 3000, as amended, and Ordinances Nos. 2529, 3028 and 3364 illegal and unconstitutional, and that the defendant be ordered to refund to the plaintiff the sum of P5,891.45 paid under protest, together with legal interest thereon, and the costs Facts: Plaintiff-appellant is a foreign, non-stock, non-profit, religious, missionary corporation duly registered and doing business in the Philippines through its Philippine agency established in Manila. Plaintiff's Philippine agency has been distributing and selling bibles and/or gospel portions thereof throughout the Philippines On May 29 1953, the acting City Treasurer of the City of Manila informed plaintiff that it was conducting the business of general merchandise since November, 1945, without providing itself with the necessary Mayor's permit and municipal license, in violation of Ordinance No. 3000, as amended, and Ordinances Nos. 2529, 3028 and 3364, and required plaintiff to secure, within three days, the corresponding permit and license fees, together with compromise covering the period from the 4th quarter of 1945 to the 2nd quarter of 1953, in the total sum of P5,821.45 With regard to Ordinance No. 2529, as amended by Ordinances Nos. 2779, 2821 and 3028, appellant contends that it is unconstitutional and illegal because it restrains the free exercise and enjoyment of the religious profession and worship of appellant. Issue: Whether said ordinances are inapplicable, invalid or unconstitutional if applied to the alleged business of distribution and sale of bibles to the people of the Philippines by the plaintiff Ruling: Yes. Article III, section 1, clause (7) of the Constitution of the Philippines aforequoted, guarantees the freedom of religious profession and worship. "Religion has been spoken of as a profession of faith to an active power that binds and elevates man to its Creator" (Aglipay vs. Ruiz, 64 Phil., 201).It has reference to one's views of his relations to His Creator and to the obligations they impose of reverence to His being and character, and obedience to His Will (Davis vs. Beason, 133 U.S., 342). The constitutional guaranty of the free exercise and enjoyment of religious profession and worship carries with it the right to disseminate religious information. Any restraints of such right can only be justified like other restraints of freedom of expression on the grounds that there is a clear and present danger of any substantive evil which the State has the right to prevent". (Taada and Fernando on the Constitution of the Philippines, Vol. 1, 4th ed., p. 297). In the case at bar the license fee herein involved is imposed upon appellant for its distribution and sale of bibles and other religious literature. It could not be said that petitioners were engaged in commercial rather than a religious venture. Their activities could not be described as embraced in the occupation of selling books and pamphlets

The power to tax the exercise of a privilege is the power to control or suppress its enjoyment. . . . Those who can tax the exercise of this religious practice can make its exercise so costly as to deprive it of the resources necessary for its maintenance. When we balance the constitutional rights of owners of property against those of the people to enjoy freedom of press and religion, as we must here, we remain mindful of the fact that the latter occupy a preferred position. . . . In our view the circumstance that the property rights to the premises where the deprivation of property here involved, took place, were held by others than the public, is not sufficient to justify the State's permitting a corporation to govern a community of citizens so as to restrict their fundamental liberties and the enforcement of such restraint by the application of a State statute (Taada and Fernando on the Constitution of the Philippines, Vol. 1, 4th ed., p. 304-306).

CIR vs. CA, CTA, YMCA Panganiban, J Nature: This is a petition for review on certiorari challenging the two Resolutions issued by the Court of Appeals[1] on September 28, 1995[2] and February 29, 1996 which affirmed the decision of the CTA allowing the YMCA to claim tax exemption on the latters income from the lease of its real property. Facts: Young Mens Christian Association of the Philippines, Inc. (YMCA), a non-stock, non-profit institution, which conducts various programs and activities that are beneficial to the public pursuant to its religious, educational, and charitable objectives. In 1980, private respondent earned, among others, an income of P676,829.80 from leasing out a portion of its premises to small shop owners. On July 2, 1984, the CIR issued an assessment to private respondent, in the total amount of P415,615.01 including surcharge and interest, for deficiency income tax, deficiency expanded withholding taxes on rentals and professional fees and deficiency withholding tax on wages. Private respondent formally protested the assessment. In reply, the CIR denied the claims of YMCA. Contesting the denial of its protest, the YMCA filed a petition for review at the CTA. In due course, issued ruling (CA-GR SP No. 32007) in favour of the YMCA On appeal, YMCA countered that the rentals of real property owned by it is not subject to income tax, citing Article VI, Section 28, paragraph 3 of the 1987 Constitution. Issue: Whether YMCA is exempt from the payment of income tax Ruling: No. What is exempted by Article VI, Section 28, paragraph 3 of the 1987 Constitution is not the institution itself; the exemption pertains only to property taxes. Moreover, Section 27 of the National Internal Revenue Code expressly disallows the exemption claimed by YMCA, as it mandates that the income of exempt organizations from any of their properties, real or personal, be subject to the tax imposed by the same Code. Thus, YMCA is exempt from the payment of property tax, but not income tax on the rentals from its property. The bare allegation alone that it is a non-stock ,non-profit educational institution is insufficient to justify its exemption from the payment of income tax

Note: A claim of statutory exemption from taxation should be manifest, and unmistakable from the language of the law on which it is based