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#9 Coconut Oil Refiners Association, Inc. vs.

Ruben
Torres
Facts:
This is a Petition to enjoin and prohibit the public
respondent Ruben Torres in his capacity as Executive
Secretary from allowing other private respondents to
continue with the operation of tax and duty-free shops
located at the Subic Special Economic Zone (SSEZ) and
the Clark Special Economic Zone (CSEZ). The petitioner
seeks to declare Republic Act No. 7227 as
unconstitutional on the ground that it allowed only tax-
free (and duty-free) importation of raw materials,
capital and equipment. It reads:
The Subic Special Economic Zone shall be operated and
managed as a separate customs territory ensuring free
flow or movement of goods and capital within, into
and exported out of the Subic Special Economic Zone,
as well as provide incentives such as tax and duty-free
importations of raw materials, capital and equipment.
However, exportation or removal of goods from the
territory of the Subic Special Economic Zone to the
other parts of the Philippine territory shall be subject
to customs duties and taxes under the Customs and
Tariff Code and other relevant tax laws of the
Philippines [RA 7227, Sec 12 (b)].
Petitioners contend that the wording of Republic Act
No. 7227 clearly limits the grant of tax incentives to the
importation of raw materials, capital and equipment
only thereby violating the equal protection clause of
the Constitution. He also assailed the constitutionality
of Executive Order No. 97-A for being violative of their
right to equal protection. They asserted that private
respondents operating inside the SSEZ are not different
from the retail establishments located outside. The
respondent moves to dismiss the petition on the
ground of lack of legal standing and unreasonable
delay in filing of the petition.

Issue:
Whether or not there is a violation of equal protection
clause.
Held:
(1) The SC ruled in the negative. The phrase tax and
duty-free importations of raw materials, capital and
equipment was merely cited as an example of
incentives that may be given to entities operating
within the zone. Public respondent SBMA correctly
argued that the maxim expressio unius est exclusio
alterius, on which petitioners impliedly rely to support
their restrictive interpretation, does not apply when
words are mentioned by way of example.
The petition with respect to declaration of
unconstitutionality of Executive Order No. 97-A cannot
be, likewise, sustained. The guaranty of the equal
protection of the laws is not violated by a legislation
based which was based on reasonable classification. A
classification, to be valid, must (1) rest on substantial
distinction, (2) be germane to the purpose of the law,
(3) not be limited to existing conditions only, and (4)
apply equally to all members of the same class.
Applying the foregoing test to the present case, this
Court finds no violation of the right to equal protection
of the laws. There is a substantial distinctions lying
between the establishments inside and outside the
zone. There are substantial differences in a sense that,
investors will be lured to establish and operate their
industries in the so-called secured area and the
present business operators outside the area. There is,
then, hardly any reasonable basis to extend to them
the benefits and incentives accorded in R.A. 7227.

#10 Ormoc Sugar Company Inc. vs Ormoc City et al

In 1964, Ormoc City passed a bill which read: There
shall be paid to the City Treasurer on any and all
productions of centrifugal sugar milled at the Ormoc
Sugar Company Incorporated, in Ormoc City a
municipal tax equivalent to one per centum (1%) per
export sale to the United States of America and other
foreign countries. Though referred to as a production
tax, the imposition actually amounts to a tax on the
export of centrifugal sugar produced at Ormoc Sugar
Company, Inc. For production of sugar alone is not
taxable; the only time the tax applies is when the sugar
produced is exported. Ormoc Sugar paid the tax
(P7,087.50) in protest averring that the same is
violative of Sec 2287 of the Revised Administrative
Code which provides: It shall not be in the power of
the municipal council to impose a tax in any form
whatever, upon goods and merchandise carried into
the municipality, or out of the same, and any attempt
to impose an import or export tax upon such goods in
the guise of an unreasonable charge for wharfage, use
of bridges or otherwise, shall be void. And that the
ordinance is violative to equal protection as it singled
out Ormoc Sugar As being liable for such tax impost for
no other sugar mill is found in the city.
ISSUE: Whether or not there has been a violation of
equal protection.
HELD: The SC held in favor of Ormoc Sugar. The SC
noted that even if Sec 2287 of the RAC had already
been repealed by a latter statute (Sec 2 RA 2264) which
effectively authorized LGUs to tax goods and
merchandise carried in and out of their turf, the act of
Ormoc City is still violative of equal protection. The
ordinance is discriminatory for it taxes only centrifugal
sugar produced and exported by the Ormoc Sugar
Company, Inc. and none other. At the time of the
taxing ordinances enactment, Ormoc Sugar Company,
Inc., it is true, was the only sugar central in the city of
Ormoc. Still, the classification, to be reasonable, should
be in terms applicable to future conditions as well. The
taxing ordinance should not be singular and exclusive
as to exclude any subsequently established sugar
central, of the same class as plaintiff, from the
coverage of the tax. As it is now, even if later a similar
company is set up, it cannot be subject to the tax
because the ordinance expressly points only to Ormoc
Sugar Company, Inc. as the entity to be levied upon.






ORMOC SUGAR COMPANY, INC., plaintiff-appellant,
vs. THE TREASURER OF ORMOC CITY, THE MUNICIPAL
BOARD OF ORMOC CITY, HON. ESTEBAN C. CONEJOS
as Mayor of Ormoc City and ORMOC CITY,
defendants-appellees.

G.R. No. L-23794, February 17, 1968

BENGZON, J.P., J.:
Ormoc city passed an ordinance which provides:

"There shall be paid to the City Treasurer on any and all
productions of centrifugal sugar milled at the Ormoc
Sugar Company, Incorporated, in Ormoc City, a
municipal tax equivalent to one per centum (1%) per
export sale to the United States of America and other
foreign countries."
Ormoc Sugar Company filed a complaint against the
city of Ormoc, alleging that the afore-stated ordinance
is unconstitutional for being violative of the equal
protection clause (Sec. 1[1], Art. III, Constitution) and
the rule of uniformity of taxation (Sec. 22[1]), Art. VI,
Constitution)

ISSUE: W/N the ordinance violates the equal protection
clause and the uniformity of taxation/

RULING: YES

The equal protection clause applies only to persons or
things identically situated and does not bar a
reasonable classification of the subject of legislation,
and a classification is reasonable where (1) it is based
on substantial distinctions which make real differences;
(2) these are germane to the purpose of the law; (3)
the classification applies not only to present conditions
but also to future conditions which are substantially
identical to those of the present; (4) the classification
applies only to those who belong to the same class.


A perusal of the requisites instantly shows that the
questioned ordinance does not meet them, for it taxes
only centrifugal sugar produced and exported by the
Ormoc Sugar Company, Inc. and none other. At the
time of the taxing ordinance's enactment, Ormoc Sugar
Company, Inc., it is true, was the only sugar central in
the city of Ormoc. Still, the classification, to be
reasonable, should be in terms applicable to future
conditions as well. The taxing ordinance should not be
singular and exclusive as to exclude any subsequently
established sugar central, of the same class as plaintiff,
for the coverage of the tax. As it is now, even if later a
similar company is set up, it cannot be subject to the
tax because the ordinance expressly points only to
Ormoc City Sugar Company, Inc. as the entity to be
levied upon.


Ormoc Sugar Company Inc. vs Treasurer of Ormoc City
G.R. No. L-23794 February 17, 1968
ORMOC SUGAR COMPANY, INC., Plaintiff-Appellant, vs.
THE TREASURER OF ORMOC CITY, THE MUNICIPAL
BOARD OF ORMOC CITY, HON. ESTEBAN C. CONEJOS as
Mayor of Ormoc City and ORMOC CITY, Defendants-
Appellees.

Facts:

The Municipal Board of Ormoc City passed a municipal
tax ordinance imposing on any and all productions of
centrifugal sugar milled at the Ormoc Sugar Company
Inc. one percent per export sale to the US and other
foreign countries. Said company filed before the CFI of
Leyte a complaint against the City of Ormoc, its
Treasurer, Municipal Board and Mayor, alleging sasid
ordinance is violative of the equal protection clause
and the rule of uniformity of taxation, among other
things. Ormoc Sugar Company Inc. was the only sugar
central in Ormoc City at the time.

Issue:

WON the constitutional limits on the power of
taxation, specifically the EPC and uniformity of
taxation, were infringed.

Held:

Yes. Though Ormoc Sugar Company Inc. is the only
sugar central in the city of Ormoc at the time, the
classification, to be reasonable, should be in terms
applicable to future conditions as well. Said ordinance
shoouldnt be singular and exclusive as to exclude any
subsequently established sugar central, of the same
class as plaintiff, for coverage of the tax.

EPC applies only to persons or things identically
situated and doesnt bar a reasonable classificationof
the subject of legislation. A classification is reasonable
where: 1) it is based on substantial distinctions which
make real differences; (2) these are germane to the
purpose of the law; (3) the classification applies not
only to present conditions but also to future conditions
which are substantially identical to those of the
present; (4) the classification applies only to those who
belong to the same class.