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CASE NO. 1

KAPATIRAN NG MGA NAGLILINGKOD SA PAMAHALAAN VS.
TAN
GR L-81311, 30 June 1988

FACTS:
EO 273 was issued by the President of the Philippines which
amended the Revenue Code, adopting the value-added tax (VAT) effective 1
January 1988. Four petitions assailed the validity of the VAT Law from
being beyond the President to enact; for being oppressive, discriminatory,
regressive, and violative of the due process and equal protection clauses,
among others, of the Constitution. The Integrated Customs Brokers
Association particularly contend that it unduly discriminate against customs
brokers (Section 103 [r]) as the amended provision of the Tax Code provides
that service performed in the exercise of profession or calling (except
custom brokers) subject to occupational tax under the Local Tax Code, and
professional services performed by registered general professional
partnerships are exempt from VAT.

ISSUE: Whether the E-VAT law discriminates against customs brokers?

HELD:
The phrase except custom brokers is not meant to discriminate
against custom brokers but to avert a potential conflict between Sections 102
and 103 of the Tax Code, as amended. The distinction of the customs brokers
from the other professionals who are subject to occupation tax under the
Local Tax Code is based upon material differences, in that the activities of
customs brokers partake more of a business, rather than a profession and
were thus subjected to the percentage tax under Section 174 of the Tax Code
prior to its amendment by EO 273. EO 273 abolished the percentage tax and
replaced it with the VAT. If the Association did not protest the classification
of customs brokers then, there is no reason why it should protest now.



CASE NO. 2

CASANOVAS VS. HORD
GR L-3473, 22 March 1907


FACTS:
In 1897, the Spanish Government, in accordance with the provisions
of the royal decree of 14 may 1867, granted J. Casanovas certain mines in the
province of Ambos, Camarines , of which mines the latter is now the owner.
That these were validly perfected mining concessions granted to prior to 11
April 1899 is conceded. They were so considered by the Collector of Internal
Revenue and were by him said to fall within the provisions of Section 134 of
Act 1189 (Internal Revenue Act). The Commissioner, Hord, imposed upon
these properties the tax mentioned in Section 134, which Casanovas paid
under protest.

ISSUE: Whether Section 134 of Act 1189 is valid?

HELD:
The deed constituted a contract between the Spanish Government
and Casanovas. The obligation in the contract was impaired by the enactment
of Section 134 of the Internal Revenue La, thereby infringing the provisions
of Section 5 of the Act of Congress of 1 July 1902. Furthermore, the section
conflicts with Section 60 of the Act of Congress of 1 July 1902, which
indicate that concessions can be cancelled only by reason of illegality in the
procedure by which they were obtained, or for failure to comply with the
conditions prescribed as requisites for their retention in the laws under which
they were granted. The grounds were not shown or claimed in the case. As to
the allegation that the section violates uniformity of taxation, the Court found
it unnecessary to consider the claim in view of the result at which the Court
has arrived.




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CASE NO 3.

TOLENTINO VS SEC OF FINANCE(1994)
(On non-impairment of Contracts)
FACTS:
The Value-Added Tax (VAT) is levied on the sale, barter or
exchange of goods and properties as well as on the sale of services. It is
equivalent to 10% of the gross selling price or gross value in money of goods
or properties sold, bartered, or exchanged or of the gross receipts from the
sale or exchange of services. R.A. No. 7716 was enacted to widen the tax
base of the existing VAT system and enhance its administration by amending
the NIRC. There are various suits filed before the Court challenging the
constitutionality of R.A. 7716, and one of the petitioners in these suits was
the Chamber of Real Estate and Builders Association, Inc (CREBA)
whereby it contends inter alia that the imposition of the VAT on the sales and
leases of real estate by virtue of contracts entered into prior to the effectivity
of the law would violate the constitutional provision that No law impairing
the obligation of contracts shall be passed.

ISSUE:
Whether or not R.A. 7716 violates the non-impairment clause of the
Constitution?

HELD:
NO.
It is enough to say that the parties to a contract cannot, through the
exercise of prophetic discernment, fetter the exercise of the taxing power of
the State. For not only are existing laws read into contracts in order to fix
obligations as between parties, but the reservation of essential attributes of
sovereign power is also read into contracts as a basic postulate of the legal
order. The policy of protecting contracts against impairment presupposes the
maintenance of a government which retains adequate authority to secure
peace and order of society. In truth, the Contract Clause has never been
thought as a limitation on the exercise of the States power of taxation save
only where a tax exemption has been granted for a valid consideration.
CASE NO. 4

CAGAYAN ELECTRIC POWER & LIGHT CO. VS.
COMMISSIONER
GR L-60126, 25 September 1985

FACTS:
Cagayan Electric is a holder of a legislative franchise under
Republic Act 3247 where payment of 3% tax on gross earnings is in lieu of
all taxes and assessments upon privileges, etc. In 1968, RA 5431 amended
the franchise by making all corporate taxpayers liable for income tax except
those indicated in paragraph (c) (1) of Section 24 of the Tax Code. In 1969,
through RA 6020, its franchise was extended to two other towns and the tax
exemption was reenacted. In 1973, the Commissioner required the company
to pay deficiency income taxes for 1968 to 1971.

ISSUE:
Whether the withdrawal of the franchises tax exemption violates the
non-impairment clause of the Constitution?

HELD:
NO.
Congress could impair the companys legislative franchise by
making it liable for income tax. The Constitution provides that a franchise is
subject to amendment, alteration or repeal by the Congress when the public
interest so requires. RA 3247 itself provides that the franchise is subject to
amendment, etc. by Congress. The enactment of RA 5431 had the effect of
withdrawing the companys exemption from income tax. The exemption was
restored by the enactment of RA 6020. The company is liable only for the
income tax for the period of 1 January to 3 August 1969.

CASE NO. 5- NO FT

PHILIPPINE POWER AND DEVELOPMENT COMPANY VERSUS
COMMISSIONER, CTA (1965)

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CASE NO. 6

TOLENTINO VS SEC OF FINANCE(1994)
(Bills must originate exclusively in the lower house)

FACTS:
Arturo Tolentino, the petitioner herein challenges the
constitutionality of R.A. 7716, otherwise known as the EXPANDED
VALUE-ADDED TAX LAW. He contends that RA 7716 did not originate
exclusively from the House of Representatives but is a mere consolidation
of HB 11197 and SB No. 1630 and it did not pass three readings on separate
days on the Senate thus violating Article VI, Sections 24 and 26(2) of the
Constitution respectively. Sec. 24 provides substantially that all bills,
revenue or tariff, etc. shall originate exclusively in the House of
Representatives and Sec 26(2) provides further, that before a bill becomes a
law, it shall passed three readings on separate days.

ISSUE:
Whether or not R.A. 7716 did not originate exclusively in the lower
house of Congress?

HELD:
NO.
The phrase originate exclusively refers to the revenue BILL and
not to the revenue law. It is sufficient that the House of Representatives
initiated the passage of the bill which may undergo extensive changes in the
Senate that the result may be a rewriting of the whole. To insist that a
revenue statute and not only the bill which initiated the legislative process
culminating in the enactment of the law must be substantially be the same as
the House bill would be to deny the Senates power not only to concur with
amendments but also to propose amendments. It would be to violate the
co-equality of legislative power of the two houses of Congress and in fast
make the House superior to the Senate.



CASE NO. 7

TOLENTINO VS SEC OF FINANCE (1994)
(Freedom of the Press)
FACTS:
The Philippine Press Institute (PPI), the petitioner in one of the suits
against the enforcement of RA 7716, is a non-profit organization of
newspaper publishers established for the improvement of journalism in the
Philippines. PPI questions the law since it amended Section 103 of the NIRC
deleting par (f) with the result that print media became subject to tax (VAT)
with respect to all aspects of its operations. Later, however, based on a
memorandum of the Justice Secretary, the Finance Secretary issued revenue
regulations 11-94 dated June 27, 1994, exempting the circulation income of
print media pursuant to Section 4, Article III of the 1987 Philippine
Constitution, guaranteeing against abridgement of freedom of the press,
among others. The exemption of circulation income has left income from
advertisements still subject to the VAT. PPI, however, contends that even
with the exemption of the circulation revenue of print media, there is still an
unconstitutional abridgement of press freedom because of the imposition of
the VAT on the gross receipts of newspapers from advertisements and on
their acquisition of paper, ink, and services of publication.

ISSUE: Whether or not the law violates the freedom of the press as
contended by PPI?

HELD:
NO. Even on the assumption that no exemption has effectively been
granted to print media transactions, we find no violation of press freedom in
these cases. To be sure, we are not dealing here with a statute that on its face
operates in the area of press freedom. The PPIs claim is simply that as
applied to newspapers, the law abridges press freedom. Even with due
recognition of its high estate and its importance in a democratic society,
however the press is not immune from general regulation by the State.



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CASE NO. 8

ABRA VALLEY COLLEGE VS. AQUINO
GR L-39086, 15 JUNE 1988

FACTS:
Abra Valley College rents out the ground floor of its college
building to Northern Marketing Corporation while the second floor thereof is
used by the Director of the College for residential purposes. The municipal
and provincial treasurers served upon the College a notice of seizure and
later a notice of sale due to the alleged failure of the College to pay real
estate taxes and penalties thereon. The school filed suit to annul said notices,
claiming that it is tax-exempt.

ISSUE: Whether the College is exempt from taxes.

HELD:
While the Court allows a more liberal and non-restrictive
interpretation of the phrase exclusively organized for educational purposes,
reasonable emphasis has always been made that exemption extends to
facilities which are incidental to and reasonably necessary for the
accomplishment of the main purposes. While the second floors use, as
residence of the director, is incidental to education; the lease of the first floor
cannot by any stretch of imagination be considered incidental to the purposes
of education. The test of exemption from taxation is the use of the property
for purposes mentioned in the Constitution.










CASE NO. 9

LLADOC VS. COMMISSIONER
GR L-19201, 16 JUNE 1965

FACTS:
In 1957, the MB Estate Inc. of Bacolod City donated P10,000 in
cash to the parish priest of Victorias, Negros Occidental; the amount spent
for the construction of a new Catholic Church in the locality as intended.
In1958, MB Estate filed the donors gift tax return. In 1960, the
Commissioner issued an assessment for donees gift tax against the parish.
The priest lodged a protest to the assessment and requested the withdrawal
thereof.

ISSUE: Whether the Catholic Parish is tax exempt?

HELD:
The phrase exempt from taxation should not be interpreted to
mean exemption from all kinds of taxes. The exemption is only from the
payment of taxes assessed on such properties as property taxes as
contradistinguished from excise taxes. A donees gift tax is not a property tax
but an excise tax imposed on the transfer of property by way of gift inter
vivos. It does not rest upon general ownership, but an excise upon the use
made of the properties, upon the exercise of the privilege of receiving the
properties. The imposition of such excise tax on property used for religious
purpose does not constitute an impairment of the Constitution. The tax
exemption of the parish, thus, does not extend to excise taxes.









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CASE NO 10

YMCA OF MANILA VS CIR (1916)

FACTS:
The City of Manila assessed and levied a tax against the petitioner
herein contending that the property (the building and the grounds) of the
YMCA of Manila is taxable, claiming further, that the institution is run as a
business in that it keeps a lodging and boarding house; whereby the lodgers
and the boarders take their meals below the building where a restaurant is
located. It was paid however under protest. Now, YMCA wanted to recover
the taxes they paid claiming that those properties that have been subjected to
tax are tax exempt on the ground that the association is a religious, charitable
and educational institution combined. As set forth in its charter and
constitution, the purposes of this association shall be exclusively religious,
charitable and educational, in developing the Christian character and
usefulness of its members and in improving the spiritual, mental, social and
physical condition of young men.

ISSUE:
Whether or not the building and grounds of YMCA are tax exempt?

HELD:
YES.
There is no doubt about the correctness of the contention that an
institution must devote itself exclusively to one or the other of the purpose
mentioned in the statute before it can be exempt from taxation; but the statute
does not say that it must be devoted exclusively to any one of the purposes
mentioned therein. It may be a combination of two or three or more of those
purposes and still be entitled to exempt. The YMCA of Manila cannot be
said to be an institution used exclusively for religious purposes, or an
institution used exclusively for charitable purposes, or an institution devoted
exclusively to educational purposes; but we believe it can be truthfully said
that it is an institution used exclusively for all three purposes, and that, as
such, it is entitled to be exempted from taxation.

CASE NO. 11

BISHOP OF NUEVA SEGOVIA VS. PROVINCIAL BOARD OF
ILOCOS NORTE
GR 27588, 31 DECEMBER 1927

FACTS:
The Roman Catholic Apostolic Church is the owner of a parcel of
land in San Nicolas, Ilocos Norte. On the south side is a part of the Church
yard, the convent and an adjacent lots used for a vegetable garden in which
there is a stable and a well for the use of the convent. In the center is the
remainder of the churchyard and the Church. On the north side is an old
cemetery with its two walls still standing, and a portion where formerly stood
a tower. The provincial board assessed land tax on lots comprising the north
and south side, which the church paid under protest. It filed suit to recover
the amount.

ISSUE: Whether the lots are covered by the Churchs tax exemption.

HELD:
The exemption in favor of the convent in the payment of land tax
refers to the home of the priest who presides over the church and who has to
take care of himself in order to discharge his duties. The exemption includes
not only the land actually occupied by the Church but also the adjacent
ground destined to the ordinary incidental uses of man. A vegetable garden,
thus, which belongs to a convent, where its use is limited to the necessity of
the priest, comes under the exemption. Further, land used as a lodging house
by the people who participate in religious festivities, which constitutes an
incidental use in religious functions, likewise comes within the exemption. It
cannot be taxed according to its former use, i.e. a cemetery.






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CASE NO 12

HERRERA VS. QUEZON CITY BOARD OF ASSESSMENT
APPEALS
GR L-15270, 30 SEPTEMBER 1961

FACTS:
In 1952, the Director of the Bureau of Hospitals authorized Jose V.
Herrera and Ester Ochangco Herrera to establish and operate the St.
Catherines Hospital. In 1953, the Herreras sent a letter to the Quezon City
Assessor requesting exemption from payment of real estate tax on the
hospital, stating that the same was established for charitable and
humanitarian purposes and not for commercial gain. The exemption was
granted effective years 1953 to 1955. In 1955, however, the Assessor
reclassified the properties from exempt to taxable effective 1956, as it
was ascertained that out 32 beds in the hospital, 12 of which are for pay-
patients. A school of midwifery is also operated within the premises of the
hospital.

ISSUE: Whether St. Catherines Hospital is exempt from realty tax?

HELD:
The admission of pay-patients does not detract from the charitable
character of a hospital, if all its funds are devoted exclusively to the
maintenance of the institution as a public charity. The exemption in favor of
property used exclusively for charitable or educational purpose is not limited
to property actually indispensable therefore, but extends to facilities which
are incidental to and reasonably necessary for the accomplishment of said
purpose, such as in the case of hospitals -- a school for training nurses; a
nurses home; property used to provide housing facilities for interns, resident
doctors, superintendents and other members of the hospital staff; and
recreational facilities for student nurses, interns and residents. Within the
purview of the Constitution, St. Catherines Hospital is a charitable
institution exempt from taxation.


CASE NO. 13

PROVINCE OF ABRA VS. HERNANDO
GR L-49336, 31 AUGUST 1981

FACTS:
The provincial assessor made a tax assessment on the properties of
the Roman Catholic Bishop of Bangued. The bishop claims tax exemption
from real estate tax, through an action for declaratory relief. A summary
judgment was made granting the exemption without hearing the side of the
Province of Abra.

ISSUE: Whether the properties of the Bishop of Bangued are tax-exempt?

HELD:
The 1935 and the 1973 Constitutions differ in language as to the
exemption of religious property from taxes as they should not only be
exclusively but also actually and directly used for religious purposes.
Herein, the judge accepted at its face the allegation of the Bishop instead of
demonstrating that there is compliance with the constitutional provision that
allows an exemption. There was an allegation of lack of jurisdiction and of
lack of cause of action, which should have compelled the judge to accord a
hearing to the province rather than deciding the case immediately in favor of
the Bishop. Exemption from taxation is not favored and is never presumed,
so that if granted, it must be strictly construed against the taxpayer. There
must be proof of the actual and direct use of the lands, buildings, and
improvements for religious (or charitable) purposes to be exempted from
taxation. The case was remanded to the lower court for a trial on merits.