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1. Apostolic Prefect of Mt. Province v. Treasurer of Baguio (71 Phil.

FACTS: In 1937, an ordinance (Ordinance No. 137: Special Assessment List, City of
Baguio) was passed in the City of Baguio. The said ordinance sought to assess
properties of property owners within the defined city limits. The Apostolic Prefect of
Mt. Province (APMP), on the other hand, is a religious corporation duly established
under Philippine laws. Pursuant to the ordinance, it paid a total amount of P1,019.37
in protest. APMP later averred that it should be exempt from the said special
contribution since as a religious institution, it has a constitutionally guaranteed right
not to be taxed including its properties.
ISSUE: Whether or not APMP is exempt from taxes.
HELD: No. In the first place, the ordinance was in the nature of an assessment and
not a taxation.
The test of exemption from taxation is the use of the property for purposes
mentioned in the Constitution. Based on Justice Cooleys words:
While the word tax in its broad meaning, includes both general taxes and
special assessments, and in a general sense a tax is an assessment, and an
assessment is a tax, yet there is a recognized distinction between them in that
assessment is confined to local impositions upon property for the payment of the
cost of public improvements in its immediate vicinity and levied with reference to
special benefits to the property assessed. The differences between a special
assessment and a tax are that (1) a special assessment can be levied only on land;
(2) a special assessment cannot (at least in most states) be made a personal liability
of the person assessed; (3) a special assessment is based wholly on benefits; and (4)
a special assessment is exceptional both as to time and locality. The imposition of a
charge on all property, real and personal, in a prescribed area, is a tax and not an
assessment, although the purpose is to make a local improvement on a street or
highway. A charge imposed only on property owners benefited is a special
assessment rather than a tax notwithstanding the statute calls it a tax.
In the case at bar, the Prefect cannot claim exemption because the
assessment is not taxation per se but rather a system for the benefits of the
inhabitants of the city.

2. Philippine Airlines Inc. v. EDU (G.R. No. L- 41383, August 15, 1988)

FACTS: The Philippine Airlines (PAL) is engaged in the air transportation business
under a legislative franchise, Act 4271, wherein it is exempt from the payment of
taxes. On the strength of an opinion of the Secretary of Justice (Opinion 307 of 1956),
PAL was determined to have not been paying motor vehicle registration fees since
1956. The Land Transportation Commissioner required all tax exempt entities,
including PAL, to pay motor vehicle registration fees. PAL protested.

ISSUE: Whether registration fees as to motor vehicles are taxes to which Philippine
Airlines is exempt.

HELD: Taxes are for revenue, whereas fees are exactions for purposes of regulation
and inspection, and are for that reason limited in amount to what is necessary to cover
the cost of the services rendered in that connection. It is the object of the charge, and
not the name, that determines whether a charge is a tax or a fee. The money collected
under the Motor Vehicle Law is not intended for the expenditures of the Motor
Vehicle Office but accrues to the funds for the construction and maintenance of
public roads, streets and bridges. As the fees are not collected for regulatory purposes
as an incident to the enforcement of regulations governing the operation of motor
vehicles on public highways, but to provide revenue with which the Government is to
construct and maintain public highways for everyones use, they are veritable taxes,
not merely fees. PAL is, thus, exempt from paying such fees, except for the period
between 27 June 1968 to 9 April 1979, where its tax exemption in the franchise was

3. Silkair (Singapore) Pte, Ltd. vs. CIR (G.R. No. 173594, February
06, 2008)

FACTS: Silkair (Singapore Pte. Ltd. Purchased aviation jet fuel from Petron, to
which the latter imposed a P3.67 per liter excise (specific) tax. Claiming exemption
from payment of excise taxes pursuant to Section 135 of the Tax Code and Article 4
of the Philippines Singapore Air Agreement, Silkair filed a formal claim for refund
with the Commissioner of Internal Revenue (CIR).
Silkair alleged that it was the one who actually paid the excise taxes due on
the transactions while Petron merely remitted the payment to the BIR, thereby
negating the tax exemption expressly granted to it.

ISSUE: Who is the proper party to claim a refund for the payment of excise taxes?

HELD: The Supreme Court held that the proper party to question, or seek a refund
of an indirect tax is the statutory taxpayer, the person on whom the tax is imposed by
law and who paid the same even if he shifts the burden thereof to another.
Excise tax, whether classified as specific or ad valorem tax, is basically an
indirect tax imposed on the consumption of a specified list of goods or products. The
tax is directly levied on the manufacturer upon removal of the table goods from the
place of production but in reality, the tax is passed on to the end consumer as part of
the selling price of goods sold.
In view thereof, while Petron actually passed on the burden of the tax to
Silkair, the additional amount billed to the latter was essentially a part of the purchase
price and not a tax in itself.
Hence, the SC ruled that even if the consumers or purchasers ultimately pay
for the tax, they are not considered the taxpayers. The fact that Petron, on whom the
excise tax is imposed, can shift the tax burden to its purchasers does not make the
latter the taxpayers and the former the withholding agent.
Although it was ruled in the instant case that Petron is the proper party that
can claim the refund of the excise taxes paid to BIR, the SC said that Silkair may
nevertheless invoke its tax exemption to Petron before buying aviation jet fuel in the

4. Pascual v. Secretary of Public Works (110 Phil 331)

FACTS: In 1953, Republic Act No. 920 was passed. This law appropriated
P85,000.00 for the construction, reconstruction, repair, extension and improvement
Pasig feeder road terminals. Wenceslao Pascual, then governor of Rizal, assailed the
validity of the law. He claimed that the appropriation was actually going to be used
for private use for the terminals sought to be improved were part of the Antonio
Subdivision. The said Subdivision is owned by Senator Jose Zulueta who was a
member of the same Senate that passed and approved the same RA. Pascual claimed
that Zulueta misrepresented in Congress the fact that he owns those terminals and that
his property would be unlawfully enriched at the expense of the taxpayers if the said
RA would be upheld. Pascual then prayed that the Secretary of Public Works and
Communications be restrained from releasing funds for such purpose. Zulueta, on the
other hand, perhaps as an afterthought, donated the said property to the City of Pasig.
ISSUE: Whether or not the appropriation is valid.
HELD: No, the appropriation is void for being an appropriation for a private
purpose. The subsequent donation of the property to the government to make the
property public does not cure the constitutional defect. The fact that the law was
passed when the said property was still a private property cannot be ignored. In
accordance with the rule that the taxing power must be exercised for public purposes
only, money raised by taxation can be expanded only for public purposes and not for
the advantage of private individuals. Inasmuch as the land on which the projected
feeder roads were to be constructed belonged then to Zulueta, the result is that said
appropriation sought a private purpose, and, hence, was null and void.
5. Maceda v. Macaraig, Jr. (GR No. 88291 May 31, 1991)
FACTS: Senator Ernesto Maceda sought to nullify certain decisions, orders, rulings,
and resolutions of respondents Executive Secretary, Secretary of Finance,
Commissioner of Internal Revenue, Commissioner of Customs and the Fiscal
Incentives Review Board FIRB for exempting the National Power Corporation (NPC)
from indirect tax and duties. RA 358, RA 6395 and PD 380 expressly grant NPC
exemptions from all taxes whether direct or indirect. In 1984, however, PD 1931 and
EO 93 withdrew all tax exemptions granted to all GOCCs including the NPC but
granted the President and/or the Secretary of Finance by recommendation of the FIRB
the power to restore certain tax exemptions. Pursuant to the latter law, FIRB issued a
resolution restoring the tax and duty exemption privileges of the NPC. The actions of
the respondents were thus questioned by the petitioner by this petition for certiorari,
prohibition and mandamus with prayer for a writ of preliminary injunction and/or
restraining order. To which public respondents argued, among others, that petitioner
does not have the standing to challenge the questioned orders and resolution because
he was not in any way affected by such grant of tax exemptions.

ISSUE: Has a taxpayer the capacity to question the legality of the resolution issued by
the FIRB restoring the tax exemptions?

HELD: Yes. In this petition it is alleged that petitioner is "instituting this suit in his
capacity as a taxpayer and a duly-elected Senator of the Philippines." Public
respondent argues that petitioner must show that he has sustained direct injury as a
result of the action and that it is not sufficient for him to have a mere general interest
common to all members of the public. The Court however agrees with the petitioner
that as a taxpayer he may file the instant petition following the ruling in Lozada when
it involves illegal expenditure of public money. The petition questions the legality of
the tax refund to NPC by way of tax credit certificates and the use of said assigned
tax credits by respondent oil companies to pay for their tax and duty liabilities to the
BIR and Bureau of Customs.

6. Garcia v. the Executive Secretary (G.R. No. 101273, July 03, 1992)
FACTS: Frank and James Robertson (brothers) were American citizens born in the
Philippines. They stayed here in the Philippines until they were repatriated by the US
in 1945. Thereafter they established their domicile in California. Soon after they were
employed by the US Federal Government as workers in the US Navy. They were later
assigned at the US Naval Base in Olongapo City in 1962. They hold American
passports and are admitted as special temporary visitors under the Philippine
Immigration Act of 1940. On the other hand, the Commissioner of Internal
Revenue (CIR) contends that the American brothers are subject to taxation because
their residence here in the Philippines is not by reason of their employment in
connection with the construction, maintenance, operation or defense of the US
Bases here as provided by the Military Bases Agreement. Further, the burden of proof
of such exemption to taxation shall be upon the respondents.
ISSUE: Whether or not the American brothers are exempt from taxation?
HELD: Yes. The law and the facts of the case are so clear that there is no room left for
doubt the validity of the brothers defense. In order to avail oneself of the tax exemption
under the RP-US Military Bases Agreement: he must be a national of the United States
employed in connection with the construction, maintenance, operation or defense, of the
bases, residing in the Philippines by reason of such employment, and the income derived
is from the U.S. Government (Art. XII par. 2 of PI-US Military Bases Agreement of 1947).
Said circumstances are all present in the case at bar.

7. Lladoc v. CIR and CTA (14 SCRA 202, June 16, 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. In 1958, 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 contra distinguished 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 do not constitute an impairment of the Constitution. The
tax exemption of the parish, thus, does not extend to excise taxes.

8. Lung Center of the Philippines v. QC (GR No. 144104, June 29, 2004)

FACTS: Petitioner is a non-stock, non-profit entity established by virtue of PD No.
1823, seeks exemption from real property taxes when the City Assessor issued Tax
Declarations for the land and the hospital building. Petitioner predicted on its claim
that it is a charitable institution. The request was denied, and a petition hereafter filed
before the Local Board of Assessment Appeals of Quezon City (QC-LBAA) for
reversal of the resolution of the City Assessor. Petitioner alleged that as a charitable
institution, is exempted from real property taxes under Sec 28(3) Art VI of the
Constitution. QC-LBAA dismissed the petition and the decision was likewise
affirmed on appeal by the Central Board of Assessment Appeals of Quezon City. The
Court of Appeals affirmed the judgment of the CBAA.

ISSUE: 1. Whether or not petitioner is a charitable institution within the context of
PD 1823 and the 1973 and 1987 Constitution and Section 234(b) of RA 7160.

2. Whether or not petitioner is exempted from real property taxes.

RULING: 1. Yes. The Court hold that the petitioner is a charitable institution within
the context of the 1973 and 1987 Constitution. Under PD 1823, the petitioner is a
non-profit and non-stock corporation which, subject to the provisions of the decree, is
to be administered by the Office of the President with the Ministry of Health and the
Ministry of Human Settlements. The purpose for which it was created was to render
medical services to the public in general including those who are poor and also the
rich, and become a subject of charity. Under PD 1823, petitioner is entitled to receive
donations, even if the gift or donation is in the form of subsidies granted by the

2. Partly No. Under PD 1823, the lung center does not enjoy any property tax
exemption privileges for its real properties as well as the building constructed
The property tax exemption under Sec. 28(3), Art. VI of the Constitution of the
property taxes only. This provision was implanted by Sec.243 (b) of RA 7160.which
provides that in order to be entitled to the exemption, the lung center must be able to
prove that: it is a charitable institution and; its real properties are actually, directly
and exclusively used for charitable purpose. Accordingly, the portions occupied by
the hospital used for its patients are exempt from real property taxes while those
leased to private entities are not exempt from such taxes.

9. City Assessor of Cebu v. Association of Benevola de Cebu (G.R 152904,
June 28, 2007)

FACTS: Benevola de Cebu is a non-stock non-profit organization which in 1990, a
medical arts building was constructed and in 1998 was issued with a certification
classifying the building as commercial. City assessor of Cebu assessed the building
with a market value of Php 28,060,520 and on assessed value of Php 9,821,180 at the
assessment level of 35% and not 10% which is currently imposed on private
respondent herein. Petitioner claimed that the building is used as commercial
clinic/spaces for renting out to physicians and thus classified as commercial.
Benevola de Cebu contended that the building is used actually, directly and
exclusively part of hospital and should have an assessment level of 10%

ISSUE: Whether or not the new building is liable to pay the 35% assessment level?

HELD: We hold that the new building is an integral part of the hospital and should
not be assessed as commercial. Being a tertiary hospital, it is mandated to fully
departmentalized and be equipped with the service capabilities needed to support
certified medical specialist and other licensed physicians. The fact that they are
holding office is a separate building does not take away the essence and nature of
their services vis-a-vis the overall operation of the hospital and to its patients.
Under the Local Government Code, Sec. 26: All lands, buildings and other
improvements thereon actually, directly and exclusively used for hospitals, cultural or
scientific purposes and those owned and used by local water districts shall be
classified as special.

10. Bengzon v. Drilon (G.R. No. 103524 15 April 1992)

FACTS: Petitioners are retired justices of the Supreme Court and Court of Appeals
who are currently receiving pensions under RA 910 as amended by RA 1797.
President Marcos issued a decree repealing section 3-A of RA 1797 which authorized
the adjustment of the pension of retired justices and officers and enlisted members of
the AFP. PD 1638 was eventually issued by Marcos which provided for the automatic
readjustment of the pension of officers and enlisted men was restored, while that of
the retired justices was not. RA 1797 was restored through HB 16297 in 1990. When
her advisers gave the wrong information that the questioned provisions in 1992 GAA
were an attempt to overcome her earlier veto in 1990, President Aquino issued the
veto now challenged in this petition.
It turns out that PD 644 which repealed RA 1797 never became a valid law absent its
publication, thus there was no law. It follows that RA 1797 was still in effect and HB
16297 was superfluous because it tried to restore benefits which were never taken
away validly. The veto of HB 16297 did not also produce any effect.

ISSUE: Whether or not the veto of the President of certain provisions in the GAA of
FY 1992 relating to the payment of the adjusted pensions of retired Justices is
constitutional or valid.

HELD: The veto of these specific provisions in the GAA is tantamount to dictating to
the Judiciary ot its funds should be utilized, which is clearly repugnant to fiscal
autonomy. Pursuant to constitutional mandate, the Judiciary must enjoy freedom in
the disposition of the funds allocated to it in the appropriations law.
Any argument which seeks to remove special privileges given by law to former
Justices on the ground that there should be no grant of distinct privileges or
preferential treatment to retired Justices ignores these provisions of the Constitution
and in effect asks that these Constitutional provisions on special protections for the
Judiciary be repealed.
The petition is granted and the questioned veto is illegal and the provisions of 1992
GAA are declared valid and subsisting.

11. Aquilino Pimentel v. Aguirre (G.R. No. 132988, July 19, 2000)

FACTS: Then President Ramos issued AO 372 Adoption of Economy Measures in
Government for FY 1998 which requires LGUs to reduce their expenditures by 25%
for their authorized regular appropriations of non-personal services. Subsequently,
succeeding President Estrada issued AO 43, amending Section 4 of AO 372 reducing
to 5% the amount of the internal revenues allotment (IRA) to be withheld from the
LGUs. Contentions arises the directive to withhold 10% of this IRA is in
contravention of Section 286 of the Local Government Code and of Section 6, Article
X of the Constitution, providing the automatic release of its share in the national
income revenue.
ISSUE: Whether or not, the Presidents power to exercise general supervision over
local governments are valid under Section 1 and 4 of AO 372, stating that it directs
LGUs to reduce their expenditures and withholds 10% of their IRA, respectively.

HELD: Yes, the Presidents power to exercise general supervision over LGUs is valid
because Section 1 of AO 372 is merely directive and has been issued by the President
in consistent with his power to supervise LGUs; and Section 4 cannot be upheld for
this is mandated by the Constitution and the Local Government Code, that it is a basic
feature of local fiscal autonomy to automatically release the shares of the LGUs in the
national internal revenue, and the withholding of 10% of the LGUs IRA will
contravenes with the law and will be considered as unconstitutional.
There are requisites cited by the Local Government Code in which allows the
President to interfere in the local fiscal matters, which are: 1) an unmanaged public
sector deficit of the national government; 2) consultations with the presiding officers
of the Senate and the House of Representatives and the Presidents of the various local
leagues; 3) the corresponding recommendations of the secretaries of the Department
of Finance, Interior and Local Government and Budget and Management; and 4) any
adjustment in the allotment shall be less than 30% of the collection of the national
internal revenue taxes of third fiscal year preceding the current one.

12. ACORD v. Zamora (G.R. No. 144256)

FACTS: Pres. Estrada, pursuant to Sec 22, Art VII mandating the Pres to submit to
Congress a budget of expenditures within 30 days before the opening of every regular
session, submitted the National Expenditures program for FY 2000. The President
proposed an IRA of P121,778,000,000. This became RA 8760, AN ACT
as General Appropriations Act (GAA) for the Year 2000. It provides under the
local government units shall amount to P111,778,000,000.
In another part of the GAA, under the heading UNPROGRAMMED FUND, it is
provided that an amount of P10,000,000,000 (P10 Billion), apart from the
P111,778,000,000 mentioned above, shall be used to fund the IRA, which amount
shall be released only when the original revenue targets submitted by the President to
Congress can be realized based on a quarterly assessment to be conducted by certain
committees which the GAA specifies, namely, the Development Budget Coordinating
Committee, the Committee on Finance of the Senate, and the Committee on
Appropriations of the House of Representatives.
Thus, while the GAA appropriates P111,778,000,000 of IRA as Programmed Fund, it
appropriates a separate amount of P10 Billion of IRA under the classification of
Unprogrammed Fund, the latter amount to be released only upon the occurrence of
the condition stated in the GAA.
On August 22, 2000, a number of NGOs and POs, along with 3 barangay officials
filed with this Court the petition at bar, for Certiorari, Prohibition and Mandamus
With Application for Temporary Restraining Order, against respondents then
Executive Secretary Ronaldo Zamora, then Secretary of the Department of Budget
and Management Benjamin Diokno, then National Treasurer Leonor Magtolis-
Briones, and the Commission on Audit, challenging the constitutionality of provision
petitioners as Section 1, XXXVII (A), and LIV (UNPROGRAMMED FUND)
Special Provisions 1 and 4 of the GAA (the GAA provisions)
Petitioners contend that the said provisions violates the LGUs autonomy by
unlawfully reducing the IRA allotted by 10B and by withholding its release by
placing the same under Unprogrammed funds. Although the effectivity of the Year
2000 GAA has ceased, this Court shall nonetheless proceed to resolve the issues
raised in the present case, it being impressed with public interest. Petitioners argue
that the GAA violated the constitutional mandate of automatically releasing the IRAs
when it made its release contingent on whether revenue collections could meet the
revenue targets originally submitted by the President, rather than making the release

ISSUE: WON the subject GAA violates LGUs fiscal autonomy by not automatically
releasing the whole amount of the allotted IRA.

HELD: Article X, Section 6 of the Constitution provides:
SECTION 6. Local government units shall have a just share, as determined by law, in
the national taxes which shall be automatically released to them.
Petitioners argue that the GAA violated this constitutional mandate when it made the
release of IRA contingent on whether revenue collections could meet the revenue
targets originally submitted by the President, rather than making the release
automatic. Respondents counterargue that the above constitutional provision is
addressed not to the legislature but to the executive, hence, the same does not prevent
the legislature from imposing conditions upon the release of the IRA.
Respondents thus infer that the subject constitutional provision merely prevents the
executive branch of the government from unilaterally withholding the IRA, but not
the legislature from authorizing the executive branch to withhold the same. In the
words of respondents, This essentially means that the President or any member of
the Executive Department cannot unilaterally, i.e., without the backing of statute,
withhold the release of the IRA.
As the Constitution lays upon the executive the duty to automatically release the just
share of local governments in the national taxes, so it enjoins the legislature not to
pass laws that might prevent the executive from performing this duty. To hold that the
executive branch may disregard constitutional provisions which define its duties,
provided it has the backing of statute, is virtually to make the Constitution amendable
by statute a proposition which is patently absurd. If indeed the framers intended to
allow the enactment of statutes making the release of IRA conditional instead of
automatic, then Article X, Section 6 of the Constitution would have been worded
Since, under Article X, Section 6 of the Constitution, only the just share of local
governments is qualified by the words as determined by law, and not the release
thereof, the plain implication is that Congress is not authorized by the Constitution to
hinder or impede the automatic release of the IRA.
In another case, the Court held that the only possible exception to mandatory
automatic release of the IRA is, as held in Batangas:
if the national internal revenue collections for the current fiscal year is less than 40
percent of the collections of the preceding third fiscal year, in which case what should
be automatically released shall be a proportionate amount of the collections for the
current fiscal year. The adjustment may even be made on a quarterly basis depending
on the actual collections of national internal revenue taxes for the quarter of the
current fiscal year.
This Court recognizes that the passage of the GAA provisions by Congress was
motivated by the laudable intent to lower the budget deficit in line with prudent
fiscal management. The pronouncement in Pimentel, however, must be echoed:
[T]he rule of law requires that even the best intentions must be carried out within the
parameters of the Constitution and the law. Verily, laudable purposes must be carried
out by legal methods.
WHEREFORE, the petition is GRANTED. XXXVII and LIV Special Provisions 1
and 4 of the Year 2000 GAA are hereby declared unconstitutional insofar as they set
apart a portion of the IRA, in the amount of P10 Billion, as part of the

13. Tolentino v. Secretary of Finance (October 30, 1995)

FACTS: The value-added tax (VAT) is levied on the sale, barter or exchange of
goods and properties as well as on the sale or exchange of services. RA 7716 seeks to
widen the tax base of the existing VAT system and enhance its administration by
amending the National Internal Revenue Code. There are various suits challenging
the constitutionality of RA 7716 on various grounds.
One contention is that RA 7716 did not originate exclusively in the House of
Representatives as required by Art. VI, Sec. 24 of the Constitution, because it is in
fact the result of the consolidation of 2 distinct bills, H. No. 11197 and S. No. 1630.
There is also a contention that S. No. 1630 did not pass 3 readings as required by the

ISSUE: WON EVAT originated in the House of Representatives

HELD: Yes. The argument that RA 7716 did not originate exclusively in the House
of Representatives as required by Art. VI, Sec. 24 of the Constitution will not bear
analysis. To begin with, it is not the law but the revenue bill which is required by the
Constitution to originate exclusively in the House of Representatives. To insist that a
revenue statute and not only the bill which initiated the legislative process
culminating in the enactment of the law must 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. Indeed, what the Constitution simply means is that the
initiative for filing revenue, tariff or tax bills, bills authorizing an increase of the
public debt, private bills and bills of local application must come from the House of
Representatives on the theory that, elected as they are from the districts, the members
of the House can be expected to be more sensitive to the local needs and problems.
Nor does the Constitution prohibit the filing in the Senate of a substitute bill in
anticipation of its receipt of the bill from the House, so long as action by the Senate as
a body is withheld pending receipt of the House bill.
The next argument of the petitioners was that S. No. 1630 did not pass 3
readings on separate days as required by the Constitution because the second and
third readings were done on the same day. But this was because the President had
certified S. No. 1630 as urgent. The presidential certification dispensed with the
requirement not only of printing but also that of reading the bill on separate days.
That upon the certification of a bill by the President the requirement of 3 readings on
separate days and of printing and distribution can be dispensed with is supported by
the weight of legislative practice.
14. Reyes v. Almanzor (GR Nos. L-49839-46, April 26, 1991)

FACTS: JBL, Edmundo and Milagros Reyes are owners of parcels of land in Manila
which are leased and occupied as dwelling sites by tenants. In 1971, RA 6359 was
passed prohibiting an increase of monthly rentals of dwelling units or of land on
which another dwelling is located for one year after effectivity for rentals not
exceeding P300 but allowing an increase of rent thereafter by not more than 10%.
The Act also suspended the operation of Article 1673 of the Civil Code (ejectment of
lessess). PD 20 amended RA 6359 by absolutely prohibiting the increase and
indefinitely suspending Article 1673. The Reyeses, thus, were precluded from raising
the rentals and from ejecting the tenants. In 1973, the City Assessor of Manila
reclassified and reassessed the value of the properties based on the schedule of market
values duly reviewed by the Secretary of Finance. As it entailed an increase of the
corresponding tax rates, the Reyeses filed a memorandum of disagreement with the
Board of Tax Assessment Appeals and averring therein that the reassessments were
excessive, unwarranted, unequitable, confiscatory and unconstitutional inasmuch as
the taxes imposed exceeded the annual income derived from their properties; and that
the income approach should have been used in determining land values instead of the
comparative sales approach which the assessor adopted.

ISSUE: Whether the reassessment is unequitable.

HELD: Taxation is equitable when its burden falls on those better able to pay.
Taxation is progressive when its rate goes up depenfing on the resources of the person
affected. Taxes are uniform when all taxable articles or kinds of property of the same
class are taxed at the same rate. The taxing power has the authority to make
reasonable and natural classification for purposes of taxation. Laws should operate
equally and uniformly, however, on all persons under similar circumstances or that all
persons mus t be treated in the same manner, the conditiions not being different both
in the privileges conferred and liabilities imposed. Finally, under the
Real Property Tax Code (PD 464), property must be appraised at its cuurent and fair
market value. The market value of the properties covered by PD 20, thus cannot be
equated with the market value of properties not so covered. Shcu property covered by
PD 20 has naturally a much lesser market value in view of the rental restrictions.
Although taxes are the lifeblood of the government and should be collected without
unnecessary hindrance, such collection should be made in accordance with law as any
arbitrariness will negate the very reason for government itself. As teh Reyeses are
burdened by the Rent Freeze Laws (RA 6359 and PD 20), they should not be
penalized by the same government by the imposition of excessive taxes they cancan
ill afford and would eventually result in the forfeiture of their properties, under the
principle of social justice.

15. Juan Luna Subdivision v. Sarmiento (GR L-3538, 28 May 1952)

FACTS: Juan Luna Subdivision is a local corporation which issued a check to the
City Treasurer of Manila for amount to be applied to its land tax for the second
semester of 1941. The records of the City Treasurer do not show what was done with
the check (It appears that it was deposited with the Philippine National Bank [PNB]).
After liberation (WWII), the City Treasurer refused to refund the corporations
deposit or apply it to such future taxes as might be found due, while the Philippine
Trust Co (to which the check was presented) was unwilling to reverse its debit entry
against Juan Luna Subd. Said amount is also subject of another disagreement between
the corporation and the City Treasure, with the corporation claiming that the whole
amount of the check for the taxes for the last semester of 1941 have been remitted by
Commonwealth Act 703 (1945).

ISSUE: Whether the provision allowing the remission covers taxes paid before the
enactment of Commonwealth Act 703, or taxes which were still unpaid.

HELD: The law is clear that it applies to taxes and penalties due and payable, i.e.
taxes owed or owing. The remission of taxes due and payable to the exclusion og
taxes already collected does not constitute unfair discrimination. Each set of taxes is a
class by itself, and the law would be open to attack as class legislation only if all
taxpayers belonging to one class were not treated alike. Herein, they are not. The
taxpayers who paid their taxes before liberation and those who had not were not on
the same footing on the need of material relief. Taxpayers who had been in arrears in
their obligation whould have to satisfy their liability with genuine currency, while the
taxes paid during the occupation had been satisfied in Japanese War Notes, many of
them at a time when those notes were well-nigh worthless. To refund those taxes with
restored currency would be unduly enrich many of the payers at a greater expense to
the people at large.

16. American Bible Society v. Manila (GR L-9637, 30 April 1957)

FACTS: In the course of its ministry, the Philippine agency of the American Bible
Society has been distributing and selling bibles and/or gospel portions thereof
throughout the Philippines and translating the same into several Philippine dialets.
The acting City Treasurer of Manila required the society to secure the corresponding
Mayors permit and municipal license fees, together with compromise covering the
period from the 4th quarter of 1945 to the 2nd quarter of 1953. The society paid such
under protest, and filed suit questioning the legality of the ordinances under which the
fees are being collected.

ISSUE: Whether the municipal ordinances violate the freedom of religious profession
and worship.

HELD: A tax on the income of one who engages in religious activities is different
from a tax on property used or employed in connection with those activities. It is one
thing to impose a tax on the income or property of a preacher, and another to exact a
tax for him for the privilege of delivering a sermon. The power to tax the exercise of a
privilege is the power to control or suppress its enjoyment. Even if religious groups
and the press are not altogether free from the burdens of the government, the act of
distributing and selling bibles is purely religious and does not fall under Section 27
(e) of the Tax Code (CA 466). The fact that the price of bibles, etc. are a little higher
than actual cost of the same does not necessarily mean it is already engaged in
business for profit. Ordinance 2529 and 3000 are not applicable to the Society.

17. Domingo v. Garlitos (G.R. No. L-18994, June 29, 1963)

Facts: In Domingo vs. Moscoso (106 PHIL 1138), the Supreme Court declared as
final and executory the order of the Court of First Instance of Leyte for the payment
of estate and inheritance taxes, charges and penalties amounting to P40,058.55 by the
Estate of the late Walter Scott Price. The petition for execution filed by the fiscal,
however, was denied by the lower court. The Court held that the execution is
unjustified as the Government itself is indebted to the Estate for 262,200; and ordered
the amount of inheritance taxes be deducted from the Governments indebtedness to
the Estate.

Issue: Whether a tax and a debt may be compensated.

Held: The court having jurisdiction of the Estate had found that the claim of the
Estate against the Government has been recognized and an amount of P262,200 has
already been appropriated by a corresponding law (RA 2700). Under the
circumstances, both the claim of the Government for inheritance taxes and the claim
of the intestate for services rendered have already become overdue and demandable
as well as fully liquidated. Compensation, therefore, takes place by operation of law,
in accordance with Article 1279 and 1290 of the Civil Code, and both debts are
extinguished to the concurrent amount.

18. Bishop of Nueva Segovia v. Provincial Board, 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 lost 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.

19. Herrera v. Quezon City Board of Assessment Appeals (G.R. L-15270)

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 reallty 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