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Tolentino vs. Secretary of Finance

*
G.R. No. 115455. August 25, 1994.

ARTURO M. TOLENTINO, petitioner, vs. THE


SECRETARY OF FINANCE and THE COMMISSIONER
OF INTERNAL REVENUE, respondents.
*
G.R. No. 115525. August 25, 1994.

JUAN T. DAVID, petitioner, vs. TEOFISTO T.


GUINGONA, JR., as Executive Secretary; ROBERTO DE
OCAMPO, as Secretary of Finance; LIWAYWAY
VINZONS-CHATO, as Commissioner of Internal Revenue;
and their AUTHORIZED AGENTS OR
REPRESENTATIVES, respondents.
*
G.R. No. 115543. August 25, 1994.

RAUL S. ROCO and the INTEGRATED BAR OF THE


PHILIPPINES, petitioners, vs. THE SECRETARY OF THE
DEPARTMENT OF FINANCE; THE COMMISSIONERS
OF THE BUREAU OF INTERNAL REVENUE AND
BUREAU OF CUSTOMS, respondents.

_______________

* EN BANC.

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Tolentino vs. Secretary of Finance

G.R. No. 115544. August 25, 1994.*

PHILIPPINE PRESS INSTITUTE, INC.; EGP


PUBLISHING CO., INC.; KAMAHALAN PUBLISHING

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CORPORATION; PHILIPPINE JOURNALISTS, INC.;


JOSE L. PAVIA; and OFELIA L. DIMALANTA,
petitioners, vs. HON. LIWAYWAY V. CHATO, in her
capacity as Commissioner of Internal Revenue; HON.
TEOFISTO T. GUINGONA, JR., in his capacity as
Executive Secretary; and HON. ROBERTO B. DE
OCAMPO, in his capacity as Secretary of Finance,
respondents.

G.R. No. 115754. August 25, 1994.*

CHAMBER OF REAL ESTATE AND BUILDERS


ASSOCIATIONS, INC., (CREBA), petitioner, vs. THE
COMMISSIONER OF INTERNAL REVENUE, respondent.

G.R. No. 115781. August 25, 1994.*

KILOSBAYAN, INC., JOVITO R. SALONGA, CIRILO A.


RIGOS, ERME CAMBA, EMILIO C. CAPULONG, JR.,
JOSE T. APOLO, EPHRAIM TENDERO, FERNANDO
SANTIAGO, JOSE ABCEDE, CHRISTINE TAN, FELIPE
L. GOZON, RAFAEL G. FERNANDO, RAOUL V.
VICTORINO, JOSE CUNANAN, QUINTIN S. DOROMAL,
MOVEMENT OF ATTORNEYS FOR BROTHERHOOD,
INTEGRITY AND NATIONALISM, INC. (“MABINI”),
FREEDOM FROM DEBT COALITION, INC.,
PHILIPPINE BIBLE SOCIETY, INC., and WIGBERTO
TAÑADA, petitioners, vs. THE EXECUTIVE
SECRETARY, THE SECRETARY OF FINANCE, THE
COMMISSIONER OF INTERNAL REVENUE and THE
COMMISSIONER OF CUSTOMS, respondents.

G.R. No. 115852. August 25, 1994.*

PHILIPPINE AIRLINES, INC. petitioner, vs. THE


SECRETARY OF FINANCE, and COMMISSIONER OF
INTERNAL REVENUE, respondents.

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632 SUPREME COURT REPORTS ANNOTATED


Tolentino vs. Secretary of Finance

G.R. No. 115873. August 25, 1994.*

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COOPERATIVE UNION OF THE PHILIPPINES,


petitioners, vs. HON. LIWAYWAY V. CHATO, in her
capacity as the Commissioner of Internal Revenue, HON.
TEOFISTO T. GUINGONA, JR., in his capacity as
Executive Secretary, and HON. ROBERTO B. DE
OCAMPO, in his capacity as Secretary of Finance,
respondents.

G.R. No. 115931. August 25, 1994.*

PHILIPPINE EDUCATIONAL PUBLISHERS


ASSOCIATION, INC., and ASSOCIATION OF
PHILIPPINE BOOKSELLERS, petitioners, vs. HON.
ROBERTO B. DE OCAMPO, as the Secretary of Finance;
HON. LIWAYWAY V. CHATO, as the Commissioner of
Internal Revenue and HON. GUILLERMO PARAYNO,
JR., in his capacity as the Commissioner of Customs,
respondents.

Constitutional Law; Statutes; Taxation; Origin of revenue


bills; A bill originating in the House of Representatives may
undergo such extensive changes in the Senate that the result may
be a rewriting of the whole; As a result of the Senate action, a
distinct bill may be produced and to insist that a revenue statute
must substantially be the same as the House bill would be to deny
the Senate’s power not only to “concur with amendments” but also
to “propose amendments.”—Petitioners’ contention is that
Republic Act No. 7716 did not “originate exclusively” in the House
of Representatives as required by Art. VI, § 24 of the Constitution,
because it is in fact the result of the consolidation of two distinct
bills, H. No. 11197 and S. No. 1630. In this connection, petitioners
point out that although Art. VI, § 24 was adopted from the
American Federal Constitution, it is notable in two respects: the
verb “shall originate” is qualified in the Philippine Constitution
by the word “exclusively” and the phrase “as on other bills” in the
American version is omitted. This means, according to them, that
to be considered as having originated in the House, Republic Act
No. 7716 must retain the essence of H. No. 11197. This argument
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. It is important to
emphasize this, because a bill originating in the House may
undergo such extensive changes in the Senate that the result may
be a rewriting of the whole. The possibility of a third version by
the conference committee will be discussed later. At this point,
what is important to

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note is that, as a result of the Senate action, a distinct bill may be


produced. 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 Senate’s power not only to “concur
with amendments” but also to “propose amendments.” It would be
to violate the coequality of legislative power of the two houses of
Congress and in fact make the House superior to the Senate.
Same; Same; Same; Same; Legislative power is vested in the
Congress of the Philippines, consisting of “a Senate and a House of
Representatives,” not in any particular chamber.—The contention
that the constitutional design is to limit the Senate’s power in
respect of revenue bills in order to compensate for the grant to the
Senate of the treaty-ratifying power and thereby equalize its
powers and those of the House overlooks the fact that the powers
being compared are different. We are dealing here with the
legislative power which under the Constitution is vested not in
any particular chamber but in the Congress of the Philippines,
consisting of “a Senate and a House of Represen-tatives.” The
exercise of the treaty-ratifying power is not the exercise of
legislative power. It is the exercise of a check on the executive
power. There is, therefore, no justification for comparing the
legislative powers of the House and of the Senate on the basis of
the possession of such nonlegislative power by the Senate. The
possession of a similar power by the U.S. Senate has never been
thought of as giving it more legislative powers than the House of
Representatives.
Same; Same; Same; Same; There is really no difference
between the Senate preserving the House Bill up to the enacting
clause and then writing its own version following the enacting
clause and, on the other hand, separately presenting a bill of its
own on the same subject matter.—It is insisted, however, that S.
No. 1630 was passed not in substitution of H. No. 11197 but of
another Senate bill (S. No. 1129) earlier filed and that what the
Senate did was merely to “take [H. No. 11197] into consideration”
in enacting S. No. 1630. There is really no difference between the
Senate preserving H. No. 11197 up to the enacting clause and
then writing its own version following the enacting clause (which,
it would seem, petitioners admit is an amendment by

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substitution), and, on the other hand, separately presenting a bill


of its own on the same subject matter. In either case the result are
two bills on the same subject.
Same; Same; Same; Same; The Constitution simply means
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

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Tolentino vs. Secretary of Finance

must come from the House of Representatives and that it does not
prohibit the filing in the Senate of a substitute bill in anticipation
of its receipt of the bill from the House.—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. On the other
hand, the senators, who are elected at large, are expected to
approach the same problems from the national perspective. Both
views are thereby made to bear on the enactment of such laws.
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.
Same; Same; Presidential certification on urgency of a bill
dispenses with the requirement not only of printing but also that of
reading the bill on separate days.—The presidential certification
dispensed with the requirement not only of printing but also that
of reading the bill on separate days. The phrase “except when the
President certifies to the necessity of its immediate enactment,
etc.” in Art. VI, § 26(2) qualifies the two stated conditions before a
bill can become a law: (i) the bill has passed three readings on
separate days and (ii) it has been printed in its final form and
distributed three days before it is finally approved. In other
words, the “unless” clause must be read in relation to the “except”
clause, because the two are really coordinate clauses of the same
sentence. To construe the “except” clause as simply dispensing
with the second requirement in the “unless” clause (i.e., printing
and distribution three days before final approval) would not only
violate the rules of grammar. It would also negate the very

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premise of the “except” clause: the necessity of securing the


immediate enactment of a bill which is certified in order to meet a
public calamity or emergency. For if it is only the printing that is
dispensed with by presidential certification, the time saved would
be so negligible as to be of any use in insuring immediate
enactment. It may well be doubted whether doing away with the
necessity of printing and distributing copies of the bill three days
before the third reading would insure speedy enactment of a law
in the face of an emergency requiring the calling of a special
election for President and Vice-President. Under the Constitution
such a law is required to be made within seven days of the
convening of Congress in emergency session.

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Same; Same; Judicial Review; While the sufficiency of the


factual basis of the suspension of the writ of habeas corpus or
declaration of martial law is subject to judicial review because
basic rights of individuals may be at hazard, the factual basis of
presidential certification of bills, which involves doing away with
procedural requirements designed to insure that bills are duly
considered by members of Congress, certainly should elicit a
different standard of review.—It is nonetheless urged that the
certification of the bill in this case was invalid because there was
no emergency, the condition stated in the certification of a
“growing budget deficit” not being an unusual condition in this
country. It is noteworthy that no member of the Senate saw fit to
controvert the reality of the factual basis of the certification. To
the contrary, by passing S. No. 1630 on second and third readings
on March 24, 1994, the Senate accepted the President’s
certification. Should such certifi-cation be now reviewed by this
Court, especially when no evidence has been shown that, because
S. No. 1630 was taken up on second and third readings on the
same day, the members of the Senate were deprived of the time
needed for the study of a vital piece of legislation? The sufficiency
of the factual basis of the suspension of the writ of habeas corpus
or declaration of martial law under Art. VII, § 18, or the existence
of a national emergency justifying the delegation of extraordinary
powers to the President under Art. VI, § 23(2), is subject to
judicial review because basic rights of individuals may be at
hazard. But the factual basis of presidential certification of bills,
which involves doing away with procedural requirements
designed to insure that bills are duly considered by members of
Congress, certainly should elicit a different standard of review.
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Same; Same; Bicameral Conference Committee; A third


version of the bill may result from the conference committee, which
is considered an “amendment in the nature of a substitute,” the
only requirement being that the third version be germane to the
subject of the House and Senate bills.—As to the possibility of an
entirely new bill emerging out of a Conference Committee, it has
been explained: Under congressional rules of procedure,
conference committees are not expected to make any material
change in the measure at issue, either by deleting provisions to
which both houses have already agreed or by inserting new
provisions. But this is a difficult provision to enforce. Note the
problem when one house amends a proposal originating in either
house by striking out everything following the enacting clause
and substituting provisions which make it an entirely new bill.
The versions are now altogether different, permitting a conference
committee to draft essentially a new bill . . . . The result is a third
version, which is considered an “amendment in the nature of a
substitute,” the only requirement for

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which being that the third version be germane to the subject of


the House and Senate bills.
Same; Same; Same; The report of the conference committee
needs the approval of both houses of Congress to become valid as
an act of the legislative department.—Indeed, this Court recently
held that it is within the power of a conference committee to
include in its report an entirely new provision that is not found
either in the House bill or in the Senate bill. If the committee can
propose an amendment consisting of one or two provisions, there
is no reason why it cannot propose several provisions, collectively
considered as an “amendment in the nature of a substitute,” so
long as such amendment is germane to the subject of the bills
before the committee. After all, its report was not final but needed
the approval of both houses of Congress to become valid as an act
of the legislative department. The charge that in this case the
Conference Committee acted as a third legislative chamber is
thus without any basis.
Same; Same; Same; Separation of Powers; It is common place
in Congress that conference committee reports include new matters
which, though germane, have not been committed to the committee,
and if a change is desired in the practice, it must be sought in
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Congress since this question is not covered by any constitutional


provision but is only an internal rule of each house.—To be sure,
nothing in the Rules limits a conference committee to a
consideration of conflicting provisions. But Rule XLIV, § 112 of
the Rules of the Senate is cited to the effect that “If there is no
Rule applicable to a specific case the precedents of the Legislative
Department of the Philippines shall be resorted to, and as a
supplement of these, the Rules contained in Jefferson’s Manual.”
The following is then quoted from the Jefferson’s Manual: The
managers of a conference must confine themselves to the
differences committed to them . . . and may not include subjects
not within disagreements, even though germane to a question in
issue. Note that, according to Rule XLIX, § 112, in case there is no
specific rule applicable, resort must be to the legislative practice.
The Jefferson’s Manual is resorted to only as supplement. It is
common place in Congress that conference committee reports
include new matters which, though germane, have not been
committed to the committee. This practice was admitted by
Senator Raul S. Roco, petitioner in G.R. No. 115543, during the
oral argument in these cases. Whatever, then, may be provided in
the Jefferson’s Manual must be considered to have been modified
by the legislative practice. If a change is desired in the practice it
must be sought in Congress since this question is not covered by
any constitutional provision but is only an internal rule of each
house. Thus, Art. VI, §

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16(3) of the Constitution provides that “Each House may


determine the rules of its proceedings . . . .”
Same; Same; Same; Same; Bill-Drafting; The use of brackets
and capital letters to indicate changes is a standard practice in
bill-drafting; The Supreme Court’s concern is with the procedural
requirements of the Constitution for the enactment of laws, not the
enforcement of internal Rules of Congress since “parliamentary
rules are merely procedural and with their observance the courts
have no concern.”—This observation applies to the other
contention that the Rules of the two chambers were likewise
disregarded in the preparation of the Conference Committee
Report because the Report did not contain a “detailed and
sufficiently explicit statement of changes in, or amendments to,
the subject measure.” The Report used brackets and capital
letters to indicate the changes. This is a standard practice in bill-
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drafting. We cannot say that in using these marks and symbols


the Committee violated the Rules of the Senate and the House.
Moreover, this Court is not the proper forum for the enforcement
of these internal Rules. To the contrary, as we have already ruled,
“parliamentary rules are merely procedural and with their
observance the courts have no concern.” Our concern is with the
procedural requirements of the Constitution for the enactment of
laws. As far as these requirements are concerned, we are satisfied
that they have been faithfully observed in these cases.
Same; Same; Same; Same; The three-reading requirement
refers only to bills introduced for the first time in either house of
Congress, not to the conference committee report.—Art. VI, § 26(2)
must, therefore, be construed as referring only to bills introduced
for the first time in either house of Congress, not to the conference
committee report. For if the purpose of requiring three readings is
to give members of Congress time to study bills, it cannot be
gainsaid that H. No. 11197 was passed in the House after three
readings; that in the Senate it was considered on first reading and
then referred to a committee of that body; that although the
Senate committee did not report out the House bill, it submitted a
version (S. No. 1630) which it had prepared by “taking into
consideration” the House bill; that for its part the Conference
Committee consolidated the two bills and prepared a compromise
version; that the Conference Committee Report was thereafter
approved by the House and the Senate, presumably after
appropriate study by their members. We cannot say that, as a
matter of fact, the members of Congress were not fully informed
of the provisions of the bill. The allegation that the Conference
Committee usurped the legislative power of Congress is, in our
view, without warrant in fact and in law.

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Same; Same; Same; Same; Enrolled Bill Doctrine; An enrolled


copy of a bill is conclusive not only of its provisions but also of its
due enactment.—Whatever doubts there may be as to the formal
validity of Republic Act No. 7716 must be resolved in its favor.
Our cases manifest firm adherence to the rule that an enrolled
copy of a bill is conclusive not only of its provisions but also of its
due enactment. Not even claims that a proposed constitutional
amendment was invalid because the requisite votes for its
approval had not been obtained or that certain provisions of a
statute had been “smuggled” in the printing of the bill have
moved or persuaded us to look behind the proceedings of a coequal
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branch of the government. There is no reason now to depart from


this rule.
Same; Same; Same; Same; Same; While the “enrolled bill”
rule is not absolute, the Supreme Court should decline the
invitation to go behind the enrolled copy of the bill where
allegations that the constitutional procedures for the passage of
bills have not been observed have no more basis than another
allegation that the Conference Committee “surreptitiously” inserted
provisions into a bill which it had prepared.—No claim is here
made that the “enrolled bill” rule is absolute. In fact in one case
we “went behind” an enrolled bill and consulted the Journal to
determine whether certain provisions of a statute had been
approved by the Senate in view of the fact that the President of
the Senate himself, who had signed the enrolled bill, admitted a
mistake and withdrew his signature, so that in effect there was no
longer an enrolled bill to consider. But where allegations that the
constitutional procedures for the passage of bills have not been
observed have no more basis than another allegation that the
Conference Committee “surreptitiously” inserted provisions into a
bill which it had prepared, we should decline the invitation to go
behind the enrolled copy of the bill. To disregard the “enrolled
bill” rule in such cases would be to disregard the respect due the
other two departments of our government.
Same; Same; Titles of Bills; The constitutional requirement
that every bill passed by Congress shall embrace only one subject
which shall be expressed in its title is intended to prevent surprise
upon the members of Congress and to inform the people of pending
legislation so that, if they wish to, they can be heard regarding it.
—The question is whether this amendment of § 103 of the NIRC
is fairly embraced in the title of Republic Act No. 7716, although
no mention is made therein of P.D. No. 1590 as among those
which the statute amends. We think it is, since the title states
that the purpose of the statute is to expand the VAT system, and
one way of doing this is to widen its base by withdrawing some of
the exemptions granted before. To insist that P.D. No. 1590 be

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mentioned in the title of the law, in addition to § 103 of the NIRC,


in which it is specifically referred to, would be to insist that the
title of a bill should be a complete index of its content. The
constitutional requirement that every bill passed by Congress

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shall embrace only one subject which shall be expressed in its title
is intended to prevent surprise upon the members of Congress
and to inform the people of pending legislation so that, if they
wish to, they can be heard regarding it. If, in the case at bar,
petitioner did not know before that its exemption had been
withdrawn, it is not because of any defect in the title but perhaps
for the same reason other statutes, although published, pass
unnoticed until some event somehow calls attention to their
existence. Indeed, the title of Republic Act No. 7716 is not any
more general than the title of PAL’s own franchise under P.D. No.
1590, and yet no mention is made of its tax exemption.
Same; Same; Same; The trend is to construe the constitutional
requirement in such a manner that courts do not unduly interfere
with the enactment of necessary legislation.—The trend in our
cases is to construe the constitutional requirement in such a
manner that courts do not unduly interfere with the enactment of
necessary legislation and to consider it sufficient if the title
expresses the general subject of the statute and all its provisions
are germane to the general subject thus expressed.
Same; Same; Public Utilities; Franchises; The grant of a
franchise for the operation of a public utility is subject to
amendment, alteration or repeal by Congress when the common
good so requires.—In contrast, in the case at bar, Republic Act No.
7716 expressly amends PAL’s franchise (P.D. No. 1590) by
specifically excepting from the grant of exemptions from the VAT
PAL’s exemption under P.D. No. 1590. This is within the power of
Congress to do under Art. XII, § 11 of the Constitution, which
provides that the grant of a franchise for the operation of a public
utility is subject to amendment, alteration or repeal by Congress
when the common good so requires.
Same; Taxation; Expanded Value Added Tax Law; Bill of
Rights; Freedom of Expression; Even with due recognition of its
high estate and its importance in a democratic society, the press is
not immune from general regulation by the State.—To be sure, we
are not dealing here with a statute that on its face operates in the
area of press freedom. The PPI’s 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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Same; Same; Same; Same; Same; Equal Protection Clause;


The VAT law would perhaps be open to the charge of
discriminatory treatment if the only privilege withdrawn had been
that granted to the press.—What it contends is that by
withdrawing the exemption previously granted to print media
transactions involving printing, publication, importation or sale of
newspapers, Republic Act No. 7716 has singled out the press for
discriminatory treatment and that within the class of mass media
the law discriminates against print media by giving broadcast
media favored treatment. We have carefully examined this
argument, but we are unable to find a differential treatment of
the press by the law, much less any censorial motivation for its
enactment. If the press is now required to pay a value-added tax
on its transactions, it is not because it is being singled out, much
less targeted, for special treatment but only because of the
removal of the exemption previously granted to it by law. The
withdrawal of exemption is all that is involved in these cases.
Other transactions, likewise previously granted exemption, have
been delisted as part of the scheme to expand the base and the
scope of the VAT system. The law would perhaps be open to the
charge of discriminatory treatment if the only privilege
withdrawn had been that granted to the press. But that is not the
case.
Same; Same; Same; Same; Same; Same; There is a reasonable
basis for the classification and different treatment between print
media and broadcast media.—Nor is impermissible motive shown
by the fact that print media and broadcast media are treated
differently. The press is taxed on its transactions involving
printing and publication, which are different from the
transactions of broadcast media. There is thus a reasonable basis
for the classification.
Same; Same; Same; Same; Freedom of Religion; The Free
Exercise of Religion Clause does not prohibit imposing a generally
applicable sales and use tax on the sale of religious materials by a
religious organization.—What has been said above also disposes
of the allegations of the PBS that the removal of the exemption of
printing, publication or importation of books and religious
articles, as well as their printing and publication, likewise
violates freedom of thought and of conscience. For as the U.S.
Supreme Court unanimously held in Jimmy Swaggart Ministries
v. Board of Equalization, the Free Exercise of Religion Clause
does not prohibit imposing a generally applicable sales and use
tax on the sale of religious materials by a religious organization.
Same; Same; Same; Same; The VAT registration fee is a mere
administrative fee, one not imposed on the exercise of a privilege,
much less a constitutional right.—In this case, the fee in § 107,
although a

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fixed amount (P1,000), is not imposed for the exercise of a


privilege but only for the purpose of defraying part of the cost of
registration. The registration requirement is a central feature of
the VAT system. It is designed to provide a record of tax credits
because any person who is subject to the payment of the VAT
pays an input tax, even as he collects an output tax on sales made
or services rendered. The registration fee is thus a mere
administrative fee, one not imposed on the exercise of a privilege,
much less a constitutional right.
Same; Same; Same; Same; Due Process; Hierarchy of Values;
When freedom of the mind is imperiled by law, it is freedom that
commands a momentum of respect and when property is
imperiled, it is the lawmakers’ judgment that commands respect.—
There is basis for passing upon claims that on its face the statute
violates the guarantees of freedom of speech, press and religion.
The possible “chilling effect” which it may have on the essential
freedom of the mind and conscience and the need to assure that
the channels of communication are open and operating
importunately demand the exercise of this Court’s power of
review. There is, however, no justification for passing upon the
claims that the law also violates the rule that taxation must be
progressive and that it denies petitioners’ right to due process and
the equal protection of the laws. The reason for this different
treatment has been cogently stated by an eminent authority on
constitutional law thus: “[W]hen freedom of the mind is imperiled
by law, it is freedom that commands a momentum of respect;
when property is imperiled it is the lawmakers’ judgment that
commands respect. This dual standard may not precisely reverse
the presumption of constitutionality in civil liberties cases, but
obviously it does set up a hierarchy of values within the due
process clause.”
Same; Same; Same; The legislature is not required to adhere
to a policy of “all or none” in choosing the subject of taxation.—On
the other hand, the CUP’s contention that Congress’ withdrawal
of exemption of producers cooperatives, marketing cooperatives,
and service cooperatives, while maintaining that granted to
electric cooperatives, not only goes against the constitutional
policy to promote cooperatives as instruments of social justice
(Art. XII, § 15) but also denies such cooperatives the equal
protection of the law is actually a policy argument. The

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legislature is not required to adhere to a policy of “all or none” in


choosing the subject of taxation.
Same; Same; Same; Regressivity is not a negative standard
for courts to enforce since what Congress is required by the
Constitution to do is to “evolve a progressive system of taxation.”—
Indeed, regressivity

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is not a negative standard for courts to enforce. What Congress is


required by the Constitution to do is to “evolve a progressive
system of taxation.” This is a directive to Congress, just like the
directive to it to give priority to the enactment of laws for the
enhancement of human dignity and the reduction of social,
economic and political inequalities (Art. XIII, § 1), or for the
promotion of the right to “quality education” (Art. XIV, § 1). These
provisions are put in the Constitution as moral incentives to
legislation, not as judicially enforceable rights.
Same; Same; Same; Contract Clause; Contracts; 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.—Only slightly less abstract but nonetheless
hypothetical is the contention of CREBA 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.” 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 the peace
and good order of society.
Same; Same; Same; Same; Same; Contract Clause is not a
limitation on the power of taxation save only where a tax
exemption was granted for a valid consideration.—In truth, the
Contract Clause has never been thought as a limitation on the
exercise of the State’s power of taxation save only where a tax
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exemption has been granted for a valid consideration. Such is not


the case of PAL in G.R. No. 115852, and we do not understand it
to make this claim. Rather, its position, as discussed above, is
that the removal of its tax exemption cannot be made by a
general, but only by a specific, law.
Same; Judicial Review; Public actions by “non-Hohfeldian” or
ideological plaintiffs are now cognizable provided they meet the
standing requirement of the Constitution; There must be before the
Court a fully developed factual record that alone can impart to its
adjudication the impact of actuality to insure that decision-
making is informed and well-grounded.—The substantive issues
raised in some of the cases are presented in abstract, hypothetical
form because of the lack of a

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concrete record. We accept that this Court does not only


adjudicate private cases; that public actions by “non-Hohfeldian”
or ideological plaintiffs are now cognizable provided they meet the
standing requirement of the Constitution; that under Art. VIII, §
1, ¶ 2 the Court has a “special function” of vindicating
constitutional rights. Nonetheless the feeling cannot be escaped
that we do not have before us in these cases a fully developed
factual record that alone can impart to our adjudication the
impact of actuality to insure that decision-making is informed and
well grounded. Needless to say, we do not have power to render
advisory opinions or even jurisdiction over petitions for
declaratory judgment. In effect we are being asked to do what the
Conference Committee is precisely accused of having done in
these cases—to sit as a third legislative chamber to review
legislation.
Same; Same; The duty of the Court to exercise its power of
judicial review must still be performed in the context of a concrete
case or controversy; That the other departments of the government
may have committed a grave abuse of discretion is not an
independent ground for exercising the Court’s power.—It does not
add anything, therefore, to invoke this “duty” to justify this
Court’s intervention in what is essentially a case that at best is
not ripe for adjudication. That duty must still be performed in the
context of a concrete case or controversy, as Art. VIII, § 5(2)
clearly defines our jurisdiction in terms of “cases,” and nothing
but “cases.” That the other departments of the government may

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have committed a grave abuse of discretion is not an independent


ground for exercising our power. Disregard of the essential limits
imposed by the case and controversy requirement can in the long
run only result in undermining our authority as a court of law.
For, as judges, what we are called upon to render is judgment
according to law, not according to what may appear to be the
opinion of the day.

NARVASA, C.J., Separate Opinion:

Constitutional Law; Statutes; Origin of Revenue Bills;


Origination should have no reference to time of conception but to
the affirmative act which effectively puts the bicameral legislative
procedure in motion, i.e., the transmission by one chamber to the
other of a bill for its adoption, and it may be that in the Senate,
revenue or tax measures are discussed, even drafted, before a
similar activity takes place in the House.—Exclusive origination, I
submit, should have no reference to time of conception. As a
practical matter, origination should refer to the affirmative act
which effectively puts the bicameral legislative procedure in
motion, i.e., the transmission by one chamber to the other of a bill
for its adoption. This is the purposeful act which sets the
legislative machinery in operation

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to effectively lead to the enactment of a statute. Until this


transmission takes place, the formulation and discussions, or the
reading for three or more times of proposed measures in either
chamber, would be meaningless in the context of the activity
leading towards concrete legislation. Unless transmitted to the
other chamber, a bill prepared by either house cannot possibly
become law. In other words, the first affirmative, efficacious step,
the operative act as it were, leading to actual enactment of a
statute, is the transmission of a bill from one house to the other
for action by the latter. This is the origination that is spoken of in
the Constitution in its Article VI, Section 24, in reference to
appropriation, revenue, or tariff bills, etc. It may be that in the
Senate, revenue or tax measures are discussed, even drafted, and
this before a similar activity takes place in the House. This is of
no moment, so long as those measures or bills remain in the
Senate and are not sent over to the House. There is no origination
of revenue or tax measures by the Senate in this case. However,
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once the House completes the drawing up of a similar tax


measure in accordance with the prescribed procedure, even if this
is done subsequent to the Senate’s own measure—indeed, even if
this be inspired by information that a measure of the same nature
or on the same subject has been formulated in the Senate—and
after third reading transmits its bill to the Senate, there is
origination by (or in) the House within the contemplation of the
Constitution.
Same; Same; Judicial Review; Supreme Court; Petitioners
may not, by raising what are concededly novel and weighty
constitutional questions, compel the Supreme Court to assume the
role of a trier of facts.—The Court will reject a case where the
legal issues raised, whatever they may be, depend for their
resolution on still unsettled questions of fact. Petitioners may not,
by raising what are concededly novel and weighty constitutional
questions, compel the Court to assume the role of a trier of facts.
It is on the contrary their obligation, before raising those
questions to this Court, to see to it that all issues of fact are
settled in accordance with the procedures laid down by law for
proof of facts. Failing this, petitioners would have only themselves
to blame for a peremptory dismissal.
Same; Same; “Enrolled Bill” Doctrine; Separation of Powers;
There is no proof worthy of the name of any facts to justify the
reexamination and, possibly, disregard, of the “enrolled bill”
theory.—I would myself consider the “enrolled bill” theory as
laying down a presumption of so strong a character as to be well
nigh absolute or conclusive, fully in accord with the familiar and
fundamental philosophy of separation of powers. The result, as far
as I am concerned, is to make discussion of the enrolled bill
principle purely academic; for as already

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pointed out, there is no proof worthy of the name of any facts to


justify its reexamination and, possibly, disregard.
Same; Same; Bicameral Conference Committee; Both
chambers of Congress entrust the function of reconciling the bills
to their delegates at a conference committee with full awareness,
and tacit consent, that new provisions may be included even if not
within the “disagreeing provisions.”—The fact is that conference
committees only take up bills which have already been freely and
fully discussed in both chambers of the legislature, but as to
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which there is need of reconciliation in view of “disagreeing


provisions” between them; and both chambers entrust the
function of reconciling the bills to their delegates at a conference
committee with full awareness, and tacit consent, that
conformably with established practice unquestioningly observed
over many years, new provisions may be included even if not
within the “disagreeing provisions” but of which, together with
other changes, they will be given detailed and sufficiently explicit
information prior to voting on the conference committee version.
Same; Same; Same; It is an unacceptable theorization that
when the BCC report and its proposed bill were submitted to the
Senate and the House, and the members thereof did not bother to
read, or what is worse, having read did not understand, what was
before them.—In any case, all the changes and revisions, and
deletions, made by the conference committee were all
subsequently considered by and approved by both the Senate and
the House, meeting and voting separately. It is an unacceptable
theorization, to repeat, that when the BCC report and its
proposed bill were submitted to the Senate and the House, and
the members thereof did not bother to read, or what is worse,
having read did not understand, what was before them, or did not
realize that there were new provisions in the reconciled version
unrelated to any “disagreeing provisions,” or that said new
provisions or revisions were effectively concealed from them.
Moreover, it certainly was entirely within the power and
prerogative of either legislative chamber to reject the BCC bill
and require the organization of a new bicameral conference
committee. That this option was not exercised by either house
only proves that the BCC measure was found to be acceptable as
in fact it was approved and adopted by both chambers.

CRUZ, J., Separate Opinion:

Constitutional Law; Judicial Review; Where a specific


procedure is fixed by the Constitution itself, it should not suffice
for Congress to simply say that the rules have been observed and
flatly consider the

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matter closed.—I am persuaded even now that where a specific


procedure is fixed by the Constitution itself, it should not suffice
for Congress to simply say that the rules have been observed and
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flatly consider the matter closed. It does not have to be as final as


that. I would imagine that the judiciary, and particularly this
Court, should be able to verify that statement and determine for
itself, through the exercise of its own powers, if the Constitution
has, indeed, been obeyed. In fact, the Court has already said that
the question of whether certain procedural rules have been
followed is justiciable rather than political because what is
involved is the legality and not the wisdom of the act in question.
So we ruled in Sanidad v. Commission on Elections (73 SCRA
333) on the amendment of the Constitution; in Daza v. Singson
(180 SCRA 496) on the composition of the Commission on
Appointments; and in the earlier case of Tañada v. Cuenco (100
SCRA 1101) on the organization of the Senate Electoral Tribunal,
among several other cases. By the same token, the ascertainment
of whether a bill underwent the obligatory three readings in both
Houses of Congres should not be considered an invasion of the
territory of the legislature as this would not involve an inquiry
into its discretion in approving the measure but only the manner
in which the measure was enacted.
Same; Expanded VAT Law; Bicameral Conference Committee;
The resultant enrolled bill did not originate exclusively in the
House of Representatives.—The two bills were separately
introduced in their respective Chambers. Both retained their
independent existence until they reached the bicameral
conference committee where they were consolidated. It was this
consolidated measure that was finally passed by Congress and
submitted to the President of the Philippines for his approval.
House Bill No. 11197 originated in the House of Representatives
but this was not the bill that eventually became R.A. No. 7716.
The measure that was signed into law by President Ramos was
the consolidation of that bill and another bill, viz., Senate Bill No.
1630, which was introduced in the Senate. The resultant enrolled
bill thus did not originate exclusively in the House of
Representatives. The enrolled bill itself says that part of it (and it
does not matter to what extent) originated in the Senate.
Same; Same; Same; The participation of the Senate was not in
proposing or concurring with amendments but in originating its
own Senate bill which was not embodied in but merged with the
House bill.—It would have been different if the only participation
of the Senate was in the amendment of the measure that was
originally proposed in the House of Representatives. But this was
not the case. The participation of the Senate was not in proposing
or concurring with

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amendments that would have been incorporated in House Bill No.


11197. Its participation was in originating its own Senate Bill No.
1630, which was not embodied in but merged with House Bill No.
11197. Senate Bill No. 1630 was not even an amendment by
substitution, assuming this was permissible. To “substitute”
means “to take the place of; to put or use in place of another.”
Senate Bill No. 1630 did not, upon its approval, replace (and thus
eliminate) House Bill No. 11197. Both bills retained their
separate identities until they were joined or united into what
became the enrolled bill and ultimately R.A. No. 7716.

PADILLA, J., Separate Opinion:

Constitutional Law; Statutes; Origin of Revenue Bills; The


approval by the Senate of Senate Bill No. 1630, after it had
considered House Bill No. 11197, may be taken as an amendment
by substitution by the Senate not only of Senate Bill No. 1129 but
of House Bill No. 11197 as well.—Since the Senate is, under the
above-quoted constitutional provision, empowered to concur with
a revenue measure exclusively originating from the House, or to
propose amendments thereto, to the extent of proposing
amendments by SUBSTITUTION to the House measure, the
approval by the Senate of Senate Bill No. 1630, after it had
considered House Bill No. 11197, may be taken, in my view, as an
AMENDMENT BY SUBSTITUTION by the Senate not only of
Senate Bill No. 1129 but of House Bill No. 11197 as well which, it
must be remembered, originated exclusively from the House.
Same; Same; Separation of Powers; Presidential Certification
of Bills; A becoming respect for a co-equal and coordinate
department of government points that weight and credibility be
given to such Presidential judgment.—We have here then a
situation where the President did certify to the necessity of
Senate Bill No. 1630’s immediate enactment to meet an
emergency and the Senate responded accordingly. While I would
be the last to say that this Court cannot review the exercise of
such power by the President in appropriate cases ripe for judicial
review, I am not prepared however to say that the President
gravely abused his discretion in the exercise of such power as to
require that this Court overturn his action. We have been shown
no fact or circumstance which would impugn the judgment of the
President, concurred in by the Senate, that there was an
emergency that required the immediate enactment of Senate Bill
No. 1630. On the other hand, a becoming respect for a co-equal

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and coordinate department of government points that weight and


credibility be given to such Presidential judgment.

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Same; Bill of Rights; Freedom of Expression; R.A. 7716 in


imposing a value-added tax on circulation income of newspapers
and similar publications and on income derived from publishing
advertisements in newspapers violates Sec. 4, Art III of the
Constitution.—Rep. Act No. 7716 in imposing a value-added tax
on circulation income of newspapers and similar publications and
on income derived from publishing advertisements in newspapers,
to my mind, violates Sec. 4, Art. III of the Constitution. Indeed,
even the Executive Department has tried to cure this defect by
the issuance of BIR Regulation No. 11-94 precluding
implementation of the tax in this area. It should be clear,
however, that the BIR regulation cannot amend the law (Rep. Act
No. 7716). Only legislation (as distinguished from administration
regulation) can amend an existing law.
Same; Same; Freedom of Religion; The imposition of the VAT
on the sale and distribution of religious articles must be struck
down for being contrary to Sec. 5, Art. III of the Constitution.—
Similarly, the imposition of the VAT on the sale and distribution
of religious articles must be struck down for being contrary to Sec.
5, Art. III of the Constitution which provides: “Sec. 5. No law shall
be made respecting an establishment of religion, or prohibiting
the free exercise thereof. The free exercise and enjoyment of
religious profession and worship, without discrimination or
preference, shall forever be allowed. No religious test shall be
required for the exercise of civil or political rights.”
Same; Same; Taxation; The inherent power of the State to tax,
which is vested in the legislature, includes the power to determine
whom or what to tax, as well as how much to tax.—CREBA which
specifically assails the 10% value-added tax on the gross selling
price of real properties, fails to distinguish between a sale of real
properties primarily held for sale to customers or held for lease in
the ordinary course of trade or business and isolated sales by
individual real property owners (Sec. 103[s]). That those engaged
in the business of real estate development realize great profits is
of common knowledge and need not be discussed at length here.
The qualification in the law that the 10% VAT covers only sales of
real property primarily held for sale to customers, i.e. for trade or
business thus takes into consideration a taxpayer’s capacity to

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pay. There is no showing that the consequent distinction in real


estate sales is arbitrary and in violation of the equal protection
clause of the Constitution. The inherent power to tax of the State,
which is vested in the legislature, includes the power to determine
whom or what to tax, as well as how much to tax. In the absence
of a clear showing that the tax violates the due process and equal
protection

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clauses of the Constitution, this Court, in keeping with the


doctrine of separation of powers, has to defer to the discretion and
judgment of Congress on this point.
Same; Same; Franchises; R.A. 7716 can be considered a special
law amending PAL’s franchise.—There can be no dispute, in my
mind, that the clear intent of Congress was to modify PAL’s
franchise with respect to the taxes it has to pay. To this extent,
Rep. Act No. 7716 can be considered as a special law amending
PAL’s franchise and its tax liability thereunder. That Rep. Act No.
7716 imposes the value-added taxes on other subjects does not
make it a general law which cannot amend PD No. 1590.

VITUG, J., Separate Opinion:

Constitutional Law; Judicial Review; Separation of Powers; It


is not believed that judicial tyranny is envisioned, let alone
institutionalized, by the people in the 1987 Constitution.—I cannot
yet concede to the novel theory, so challengingly provocative as it
might be, that under the 1987 Constitution the Court may now at
good liberty intrude, in the guise of the people’s imprimatur, into
every affair of government. What significance can still then
remain, I ask, of the time honored and widely acclaimed principle
of separation of powers, if at every turn the Court allows itself to
pass upon, at will, the disposition of a co-equal, independent and
coordinate branch in our system of government. I dread to think
of the so varied uncertainties that such an undue interference can
lead to. The respect for long standing doctrines in our
jurisprudence, nourished through time, is one of maturity not
timidity, of stability rather than quiescence. It has never occurred
to me, and neither do I believe it has been intended, that judicial
tyranny is envisioned, let alone institutionalized, by our people in
the 1987 Constitution. The test of tyranny is not solely on how it
is wielded but on how, in the first place, it can be capable of being
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exercised. It is time that any such perception of judicial


omnipotence is corrected.

REGALADO, J., Dissenting Opinion:

Constitutional Law; Expanded VAT Law; The Senate clearly


and deliberately violated the requirements of the Constitution not
only in the origination of the bill but in the very enactment of R.A.
7716.—This writer consequently agrees with the clearly tenable
proposition of petitioners that when the Senate passed and
approved S.B. No. 1630, had it certified by the Chief Executive,
and thereafter caused its

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consideration by the bicameral conference committee in total


substitution of H.B. No. 11197, it clearly and deliberately violated
the requirements of the Constitution not only in the origination of
the bill but in the very enactment of Republic Act No. 7716.
Contrarily, the shifting sands of inconsistency in the arguments
adduced for respondents betray such lack of intellectual rectitude
as to give the impression of being mere rhetorics in defense of the
indefensible.

DAVIDE, JR., J., Dissenting Opinion:

Constitutional Law; Expanded VAT Law; R.A. 7716 did not


originate exclusively in the House.—Since R.A. No. 7716 is a
revenue measure, it must originate exclusively in the House—not
in the Senate. As correctly asserted by petitioner Tolentino, on the
face of the enrolled copy of R.A. No. 7716, it is a
“CONSOLIDATION OF HOUSE BILL NO. 11197 AND SENATE
BILL NO. 1630.” In short, it is an illicit marriage of a bill which
originated in the House and a bill which originated in the Senate.
Therefore, R.A. No. 7716 did not originate exclusively in the
House.
Same; Same; Origin of Revenue Bills; The Senate cannot
amend by substitution with an entirely new bill of its own any bill
covered by Section 24 of Article VI which the House transmitted to
it because such substitution would indirectly violate Section 24.—
Since the origination is not exclusively vested in the House of
Representatives of the United States, the Senate’s authority to
propose or concur with amendments is necessarily broader. That
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broader authority is further confirmed by the phrase “as on other


Bills,” i.e., its power to propose or concur with amendments
thereon is the same as in ordinary bills. The absence of this
phrase in our Constitution was clearly intended to restrict or limit
the Philippine Senate’s power to propose or concur with
amendments. In the light of the exclusivity of origination and the
absence of the phrase “as on other Bills,” the Philippine Senate
cannot amend by substitution with an entirely new bill of its own
any bill covered by Section 24 of Article VI which the House of
Representatives transmitted to it because such substitution would
indirectly violate Section 24.
Same; Same; Same; Presidential Certification of Bills; The
only revenue bill which could be properly certified on permissible
constitutional grounds is the bill that was introduced in the
House.—I submit, however, that the Presidential certification is
void ab initio not necessarily for the reason adduced by petitioner
Kilosbayan, Inc., but because it was addressed to the Senate for a
bill which is prohibited from originating therein. The only bill
which could be properly certified on permissible

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constitutional grounds even if it had already been transmitted to


the Senate is HB No. 11197. As earlier observed, this was not so
certified, although HB No. 9210 (one of those consolidated into
HB No. 11197) was certified on 1 June 1993. Also, the
certification of SB No. 1630 cannot, by any stretch of the
imagination, be extended to HB No. 11197 because SB No. 1630
did not substitute HB No. 11197 but SB No. 1129. Considering
that the certification of SB No. 1630 is void, its approval on
second and third readings in one day violated Section 26(2),
Article VI of the Constitution.
Same; Statutes; Bicameral Conference Committee; The duty of
the BCC is limited to the reconciliation of disagreeing provisions
or the resolution of differences or inconsistencies of the bills from
both Houses of Congress.—Even granting arguendo that both HB
No. 11197 and SB No. 1630 had been validly approved by both
chambers of Congress and validly referred to the bicameral
conference committee, the latter had very limited authority
thereon. It was created “in view of the disagreeing provisions of”
the two bills. Its duty was limited to the reconciliation of
disagreeing provisions or the resolution of differences or

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inconsistencies. The committee recognized that limited authority


in the opening paragraph of its Report when it said: “The
Conference Committee on the disagreeing provisions of House Bill
No. 11197 x x x and Senate Bill No. 1630 x x x.” Under such
limited authority, it could only either (a) restore, wholly or partly,
the specific provisions of HB No. 11197 amended by SB No. 1630,
(b) sustain, wholly or partly, the Senate’s amendments, or (c) by
way of a compromise, to agree that neither provisions in HB No.
11197 amended by the Senate nor the latter’s amendments
thereto be carried into the final form of the former.
Same; Same; Same; Doctrine of Ratification; The doctrine of
ratification may apply to minor procedural flaws or tolerable
breaches of the parameters of the bicameral conference committee’s
limited powers but never to violations of the Constitution.—I
cannot agree with the suggestion that since both the Senate and
the House had approved the bicameral conference committee
report and the bill proposed by it in substitution of HB No. 11197
and SB No. 1630, whatever infirmities may have been committed
by it were cured by ratification. This doctrine of ratification may
apply to minor procedural flaws or tolerable breaches of the
parameters of the bicameral conference committee’s limited
powers but never to violations of the Constitution. Congress is not
above the Constitution. In the instant case, since SB No. 1630 was
introduced in violation of Section 24, Article VI of the
Constitution, was passed in the Senate in violation of the “three
readings” rule, and was not transmitted to the House for the
completion of the constitutional

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process of legislation, and HB No. 11197 was not likewise passed


by the Senate on second and third readings, neither the Senate
nor the House could validly approve the bicameral conference
committee report and the proposed bill.
Same; Same; “Enrolled Bill” Doctrine; Invocation of the
“enrolled bill” doctrine is misplaced.—The majority opinion,
however, invokes the enrolled bill doctrine and wants this Court
to desist from looking behind the copy of the assailed measure as
certified by the Senate President and the Speaker of the House. I
respectfully submit that the invocation is misplaced. First, as to
the issue of origination, the certification in this case explicitly
states that R.A. No. 7716 is a “consolidation of House Bill No.

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11197 and Senate Bill No. 1630.” This is conclusive evidence that
the measure did not originate exclusively in the House. Second,
the enrolled bill doctrine is of American origin, and unquestioned
fealty to it may no longer be justified in view of the expanded
jurisdiction of this Court under Section 1, Article VIII of our
Constitution. Third, even under the regime of the 1935
Constitution which did not contain the above provision, this
Court, through Mr. Chief Justice Makalintal, in Astorga vs.
Villegas, declared that it cannot be truly said that Mabanag vs.
Lopez Vito has laid to rest the question of whether the enrolled
bill doctrine or the journal entry rule should be adhered to in this
jurisdiction. Fourth, even in the United States, the enrolled bill
doctrine has been substantially undercut. This is shown in the
disquisitions of Mr. Justice Reynato S. Puno in his dissenting
opinion, citing Sutherland, Statutory Construction.

ROMERO, J., Dissenting Opinion:

Constitutional Law; Expanded VAT Law; Bicameral


Conference Committee; A bicameral conference committee is a
creature, not of the Constitution, but of the legislative body under
its power to determine rules of its proceeding.—As a conference
committee has been defined: “. . . unlike the joint committee is two
committees, one appointed by each house. It is normally
appointed for a specific bill and its function is to gain accord
between the two houses either by the recession of one house from
its bill or its amendments or by the further amendment of the
existing legislation or by the substitution of an entirely new bill.
Obviously the conference committee is always a special committee
and normally includes the member who introduced the bill and
the chairman of the committee which considered it together with
such other representatives of the house as seem expedient.
(Horack, Cases and Materials on Legislation [1940] 220. See also
Zinn, Conference Procedure in Congress, 38 ABAJ 864 [1952];
Steiner, The Congressional Conference

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Tolentino vs. Secretary of Finance

Committee [U of Ill. Press, 1951]).” From the foregoing definition,


it is clear that a bicameral conference committee is a creature, not
of the Constitution, but of the legislative body under its power to
determine rules of its proceedings under Article VI, Sec. 16 (3) of

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the Constitution. Thus, it draws its life and vitality from the rules
governing its creation.
Same; Same; Same; The Bicameral Conference Committee
exceeded the power and authority granted in the Rules of its
creation.—Even a cursory perusal of the above outline will
convince one that, indeed, the Bicameral Conference Committee
(henceforth to be referred to as BICAM) exceeded the power and
authority granted in the Rules of its creation. Both Senate and
House Rules limit the task of the Conference Committee in almost
identical language to the settlement of differences in the
provisions or amendments to any bill or joint resolution. If it
means anything at all, it is that there are provisions in subject
bill, to start with, which differ and, therefore, need reconciliation.
Nowhere in the Rules is it authorized to initiate or propose
completely new matter. Although under certain rules on
legislative procedure, like those in Jefferson’s Manual, a
conference committee may introduce germane matters in a
particular bill, such matters should be circumsribed by the
committee’s sole authority and function to reconcile differences.
Same; Same; Same; Insertion of new matter on the part of the
Bicameral Conference Committee is an ultra vires act which makes
the same void.—Parenthetically, in the Senate and in the House,
a matter is “germane” to a particular bill if there is a common tie
between said matter and the provisions which tend to promote the
object and purpose of the bill it seeks to amend. If it introduces a
new subject matter not within the purview of the bill, then it is
not “germane” to the bill. The test is whether or not the change
represented an amendment or extension of the basic purpose of
the original, or the introduction of an entirely new and different
subject matter. In the BICAM, however, the germane subject
matter must be within the ambit of the disagreement between the
two Houses. If the “germane” subject is not covered by the
disagreement but it is reflected in the final version of the bill as
reported by the Conference Committee or, if what appears to be a
“germane” matter in the sense that it is “relevant or closely allied”
with the purpose of the bill, was not the subject of a disagreement
between the Senate and the House, it should be deemed an
extraneous matter or even a “rider” which should never be
considered legally passed for not having undergone the three-day
reading requirement. Insertion of new matter on the part of the
BICAM is, therefore, an ulta vires act which makes the same void.

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BELLOSILLO, J., Dissenting Opinion:

Constitutional Law; Origin of Revenue Bills; Statutory


Construction; The provision in the Constitution requiring that all
revenue bills shall originate exclusively from the Lower House is
mandatory.—Verily, the provision in our Constitution requiring
that all revenue bills shall originate exclusively from the Lower
House is mandatory. The word “exclusively” is an “exclusive
word,” which is indicative of an intent that the provision is
mandatory. Hence, all American authorities expounding on the
meaning and application of Sec. 7, par. (1), Art. I, of the U.S.
Constitution cannot be used in the interpretation of Sec. 24, Art.
VI, of our 1987 Constitution which has a distinct feature of
“exclusiveness” all its own. Thus, when our Constitution
absolutely requires—as it is mandatory—that a particular bill
should exclusively emanate from the Lower House, there is no
alternative to the requirement that the bill to become valid law
must originate exclusively from that House.
Same; Same; Same; It is the general rule to regard
constitutional provisions as mandatory, and not to leave any
discretion to the will of the legislature to obey or disregard them.—
In the interpretation of constitutions, questions frequently arise
as to whether particular sections are mandatory or directory. The
courts usually hesitate to declare that a constitutional provision is
directory merely in view of the tendency of the legislature to
disregard provisions which are not said to be mandatory.
Accordingly, it is the general rule to regard constitutional
provisions as mandatory, and not to leave any discretion to the
will of the legislature to obey or disregard them. This
presumption as to mandatory quality is usually followed unless it
is unmistakably manifest that the provisions are intended to be
merely directory. So strong is the inclination in favor of giving
obligatory force to the terms of the organic law that it has even
been said that neither by the courts nor by any other department
of the government may any provision of the Constitution be
regarded as merely directory, but that each and everyone of its
provisions should be treated as imperative and mandatory,
without reference to the rules and distinguishing between the
directory and the mandatory statutes.
Same; Same; A Senate amendment by substitution simply
means that the bill did not in effect originate from the lower
chamber but from the upper chamber, disguising itself as a mere
amendment of the House version.—In fine, in the cases cited
which were lifted from American authorities, it appears that the
revenue bills in question actually originated from the House of
Representatives and were amended by the Senate only after they
were transmitted to it. Perhaps, if the factual

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circumstances in those cases were exactly the same as the ones at


bench, then the subject revenue or tariff bill may be upheld in this
jurisdiction on the principle of substantial compliance, as they
were in the United States, except possibly in instances where the
House bill undergoes what is now referred to as “amendment by
substitutionn,” for that would be in derogation of our Constitution
which vests solely in the House of Representatives the power to
initiate revenue bills. A Senate amendment by substitution
simply means that the bill in question did not in effect originate
from the lower chamber but from the upper chamber and now
disguises itself as a mere amendment of the House version.
Same; Judicial Review; Courts will not decline the exercise of
jurisdiction upon the suggestion that action might be taken by
political agencies in disregard of the judgment of the judicial
tribunals.—The rule is fixed that the duty in a proper case to
declare a law unconstitutional cannot be declined and must be
performed in accordance with the deliberate judgment of the
tribunal before which the validity of the enactment is directly
drawn into question. When it is clear that a statute transgresses
the authority vested in the legislature by the Constitution, it is
the duty of the courts to declare the act unconstitutional because
they cannot shirk from it without violating their oaths of office.
This duty of the courts to maintain the Constitution as the
fundamental law of the state is imperative and unceasing; and, as
Chief Justice Marshal said, whenever a statute is in violation of
the fundamental law, the courts must so adjudge and thereby give
effect to the Constitution. Any other course would lead to the
destruction of the Constitutionn. Since the question as to the
constitutionality of a statute is a judicial matter, the courts will
not decline the exercise of jurisdiction upon the suggestion that
action might be taken by political agencies in disregard of the
judgment of the judicial tribunals.

PUNO, J., Dissenting Opinion:

Constitutional Law; Bicameral Conference Committee; Ex


Post Veto Power; There is absolutely no legal warrant for the bold
submission that a Bicameral Conference Committee possesses the
power to add or delete provisions in bills already approved on
third reading by both Houses or an ex post veto power.—There is
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absolutely no legal warrant for the bold submission that a


Bicameral Conference Committee possesses the power to
add/delete provisions in bills already approved on third reading by
both Houses or an ex post veto power. To support this postulate
that can enfeeble Congress itself, respondents cite no
constitutional provision, no law, not even any rule or regulation.
Worse,

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Tolentino vs. Secretary of Finance

their stance is categorically repudiated by the rules of both the


Senate and the House of Representatives which define with
precision the parameters of power of a Bicameral Conference
Committee.
Same; Same; Same; The thesis that a Bicameral Conference
Committee can wield ex post veto power wages war against our
settled ideals of representative democracy.—But the thesis that a
Bicameral Conference Committee can wield ex post veto power
does not only contravene the rules of both the Senate and the
House. It wages war againt our settled ideals of representative
democracy. For the inevitable, catastrophic effect of the thesis is
to install a Bicameral Conference Committee as the Third
Chamber of our Congress, similarly vested with the power to
make laws but with the dissimilarity that its laws are not the
subject of a free and full discussion of both Houses of Congress.
With such a vagrant power, a Bicameral Conference Com-mittee
acting as a Third Chamber will be a constitutional monstrosity.
Same; “Enrolled Bill” Doctrine; The enrolled bill theory is a
historical relic that should not continuously rule us from the
fossilized past.—Respondents seek sanctuary in the
conclusiveness of an enrolled bill to bar any judicial inquiry on
whether Congress observed our constitutional procedure in the
passage of R.A. No. 7716. The enrolled bill theory is a historical
relic that should not continuously rule us from the fossilized past.
It should be immediately emphasized that the enrolled bill theory
originated in England where there is no written constitution and
where Parliament is supreme. In this jurisdiction, we have a
written constitution and the legislature is a body of limited
powers. Likewise, it must be pointed out that starting from the
decade of the 40’s, even American courts have veered away from
the regidity and unrealism of the conclusiveness of an enrolled
bill.

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Same; Same; The previous rulings of the Supreme Court on


the conclusiveness of an enrolled bill are no longer good law.—I
am not unaware that this Court has subscribed to the
conclusiveness of an enrolled bill as enunciated in the 1947 lead
case of Mabanag v. Lopez Vito, and reiterated in subsequent
cases. With due respect, I submit that these rulings are no longer
good law. Suffice to state that section 313 of the Old Code of Civil
Procedure as amended by Act No. 2210 is no longer in our statute
books. It has long been repealed by the Rules of Court. Mabanag
also relied on jurisprudence and authorities in the United States
which are under severe criticisms by modern scholars. Hence,
even in the United States the conclusiveness of an enrolled bill
has been junked by most of the States.

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Tolentino vs. Secretary of Finance

ORIGINAL ACTIONS in the Supreme Court. Certiorari


and prohibition.

The facts are stated in the opinion of the Court.


     Arturo M. Tolentino for and in his behalf.
          Donna Celeste D. Feliciano and Juan T. David for
petitioners in G.R. No. 115525.
          Roco, Bunag, Kapunan, Migallos and Jardeleza for
petitioner R.S. Roco.
          Villaraza and Cruz for petitioners in G.R. No.
115544.
          Carlos A. Raneses and Manuel M. Serrano for
petitioner in G.R. No. 115754.
          Salonga, Hernandez & Allado for Freedom From
Debts Coalition, Inc. & Phil. Bible Society.
     Estelito P. Mendoza for petitioner in G.R. No. 115852.
          Panganiban, Benitez, Parlade, Africa & Barinaga
Law Offices for petitioners in G.R. No. 115873.
          R.B. Rodriguez & Associates for petitioners in G.R.
No. 115931.
     Rene A.V. Saguisag for MABINI.

MENDOZA, J.:

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. 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
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the sale or exchange of services. Republic Act No. 7716


seeks to widen the tax base of the existing VAT system and
enhance its administration by amending the National
Internal Revenue Code.
These are various suits for certiorari and prohibition,
challenging the constitutionality of Republic Act No. 7716
on various grounds summarized in the resolution of July 6,
1994 of this Court, as follows:
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Tolentino vs. Secretary of Finance

I. Procedural Issues:

A. Does Republic Act No. 7716 violate Art. VI, § 24 of the


Constitution?
B. Does it violate Art. VI, § 26(2) of the Constitution?
C. What is the extent of the power of the Bicameral
Conference Committee?

II. Substantive Issues:

A. Does the law violate the following provisions in the Bill of


Rights (Art. III)?

1. § 1
2. § 4
3. § 5
4. § 10

B. Does the law violate the following other provisions of the


Constitution?

1. Art. VI, § 28(1)


2. Art. VI, § 28(3)

These questions will be dealt in the order they are stated


above. As will presently be explained not all of these
questions are judicially cognizable, because not all
provisions of the Constitution are self executing and,
therefore, judicially enforceable. The other departments of
the government are equally charged with the enforcement
of the Constitution, especially the provisions relating to
them.

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I. PROCEDURAL ISSUES

The contention of petitioners is that in enacting Republic


Act No. 7716, or the Expanded Value-Added Tax Law,
Congress violated the Constitution because, although H.
No. 11197 had originated in the House of Representatives,
it was not passed by the Senate but was simply
consolidated with the Senate version (S. No. 1630) in the
Conference Committee to produce the bill which the
President signed into law. The following provisions of the
Constitution are cited in support of the proposition that
because Republic Act No. 7716 was passed in this manner,
it did
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Tolentino vs. Secretary of Finance

not originate in the House of Representatives and it has


not thereby become a law:

Art. VI, § 24: All appropriation, revenue or tariff bills, bills


authorizing increase of the public debt, bills of local application,
and private bills shall originate exclusively in the House of
Representatives, but the Senate may propose or concur with
amendments.
Id., § 26(2): No bill passed by either House shall become a law
unless it has passed three readings on separate days, and printed
copies thereof in its final form have been distributed to its
Members three days before its passage, except when the
President certifies to the necessity of its immediate enactment to
meet a public calamity or emergency. Upon the last reading of a
bill, no amendment thereto shall be allowed, and the vote thereon
shall be taken immediately thereafter, and the yeas and nays
entered in the Journal.

It appears that on various dates 1between July 22, 1992 and


August 31, 1993, several bills were introduced in the
House of Representatives seeking to amend certain
provisions of the National Internal Revenue Code relative
to the value-added tax or VAT. These bills were referred to
the House Ways and Means Committee which
recommended for approval a substitute measure, H. No.
11197, entitled

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AN ACT RESTRUCTURING THE VALUE-ADDED TAX (VAT)


SYSTEM TO WIDEN ITS TAX BASE AND ENHANCE ITS
ADMINISTRATION, AMENDING FOR THESE PURPOSES
SECTIONS 99, 100, 102, 103, 104, 105, 106, 107, 108 AND 110
OF TITLE IV, 112, 115 AND 116 OF TITLE V, AND 236, 237
AND 238 OF TITLE IX, AND REPEALING SECTIONS 113 AND
114 OF TITLE V, ALL OF THE NATIONAL INTERNAL
REVENUE CODE, AS AMENDED

The bill (H. No. 11197) was considered on second reading


starting November 6, 1993 and, on November 17, 1993, it
was approved by the House of Representatives after third
and final reading.

________________

1 H. Nos. 253, 771, 2450, 7033, 8086, 9030, 9210, 9297, 10012 and
10100. (Respondents’ Consolidated Memorandum, Annexes 3-12).

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Tolentino vs. Secretary of Finance

It was sent to the Senate on November 23, 1993 and later


referred by that body to its Committee on Ways and Means.
On February 7, 1994, the Senate Committee submitted
its report recommending approval of S. No. 1630, entitled

AN ACT RESTRUCTURING THE VALUE-ADDED TAX (VAT)


SYSTEM TO WIDEN ITS TAX BASE AND ENHANCE ITS
ADMINISTRATION, AMENDING FOR THESE PURPOSES
SECTIONS 99, 100, 102, 103, 104, 105, 107, 108, AND 110 OF
TITLE IV, 112 OF TITLE V, AND 236, 237, AND 238 OF TITLE
IX, AND REPEALING SECTIONS 113, 114 AND 116 OF TITLE
V, ALL OF THE NATIONAL INTERNAL REVENUE CODE, AS
AMENDED, AND FOR OTHER PURPOSES

It was stated that the bill was being submitted “in


substitution of Senate Bill No. 1129, taking into
consideration P.S. Res. No. 734 and H.B. No. 11197.”
On February 8, 1994, the Senate began consideration of
the bill (S. No. 1630). It finished debates on the bill and
approved it on second reading on March 24, 1994. On the
same day, it approved the bill on third reading by the
affirmative votes of 13 of its members, with one abstention.
H. No. 11197 and its Senate version (S. No. 1630) were
then referred to a conference committee which, after
meeting four times (April 13, 19, 21 and 25, 1994),
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recommended that “House Bill No. 11197, in consolidation


with Senate Bill No. 1630, be approved in accordance with
the attached copy of the bill as reconciled and approved by
the conferees.”
The Conference Committee bill, entitled “AN ACT
RESTRUCTURING THE VALUE-ADDED TAX (VAT)
SYSTEM, WIDENING ITS TAX BASE AND ENHANCING
ITS ADMINISTRATION AND FOR THESE PURPOSES
AMENDING AND REPEALING THE RELEVANT
PROVISIONS OF THE NATIONAL INTERNAL
REVENUE CODE, AS AMENDED, AND FOR OTHER
PURPOSES,” was thereafter approved by the House of
Representatives on April 27, 1994 and by the Senate on
May 2, 1994. The enrolled bill was then presented to the
President of the Philippines who, on May 5, 1994, signed it.
It became Republic Act No. 7716. On May 12, 1994,
Republic Act No. 7716 was published in two newspapers of
general circulation and, on May 28, 1994, it took effect,
although
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Tolentino vs. Secretary of Finance

its implementation was suspended until June 30, 1994 to


allow time for the registration of business entities. It would
have been enforced on July 1, 1994 but its enforcement was
stopped because the Court, by the vote of 11 to 4 of its
members, granted a temporary restraining order on June
30, 1994.
First. Petitioners’ contention is that Republic Act No.
7716 did not “originate exclusively” in the House of
Representatives as required by Art. VI, § 24 of the
Constitution, because it is in fact the result of the
consolidation of two distinct bills, H. No. 11197 and S. No.
1630. In this connection, petitioners point out that
although Art. VI, § 224 was adopted from the American
Federal Constitution, it is notable in two respects: the verb
“shall originate” is qualified in the Philippine Constitution
by the word “exclusively” and the phrase “as on other bills”
in the American version is omitted. This means, according
to them, that to be considered as having originated in the
House, Republic Act No. 7716 must retain the essence of H.
No. 11197.
This argument 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
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Representatives. It is important to emphasize this, because


a bill originating in the House may undergo such extensive
changes in the Senate that the result may be a rewriting of
the whole. The possibility of a third version by the
conference committee will be discussed later. At this point,
what is important to note is that, as a result of the Senate
action, a distinct bill may be produced. 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 Senate’s power not only to “concur with
amendments” but also to “propose amendments.” It would
be to violate the coequality of legislative power of the two
houses of Congress and in fact make the House superior to
the Senate.
The contention that the constitutional design is to limit
the Senate’s power in respect of revenue bills in order to
compensate

________________

2 U.S. CONST., Art. 1, § 7, cl. 1: “All bills for raising revenue shall
originate in the House of Representatives, but the Senate may propose or
concur with amendments, as on other bills.”

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3
for the grant to the Senate of the treaty-ratifying power
and thereby equalize its powers and those of the House
overlooks the fact that the powers being compared are
different. We are dealing here with the legislative power
which under the Constitution is vested not in any
particular chamber but in the Congress of the Philippines,4
consisting of “a Senate and a House of Representatives.”
The exercise of the treaty-ratifying power is not the
exercise of legislative power. It is the exercise of a check on
the executive power. There is, therefore, no justification for
comparing the legislative powers of the House and of the
Senate on the basis of the possession of such nonlegislative
power by the Senate.
5
The possession of a similar power by
the U.S. Senate has never been thought of as giving it
more legislative powers than the House of Representatives.
In the United States, the validity of a provision (§ 37)
imposing an ad valorem tax based on the weight of vessels,
which the U.S. Senate had inserted in the Tariff Act of
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1909, was upheld against the claim that the provision was
a revenue bill which originated in the Senate 6
in
contravention of Art. I, § 7 of the U.S. Constitution. Nor is
the power to amend limited to adding a provision or two in
a revenue bill emanating from the House. The U.S. Senate
has gone so far as changing the whole of bills following the
enacting clause and substituting its own versions. In 1883,
for example, it struck out everything after the enacting
clause of a tariff bill and wrote in its place its own measure,
and the House subsequently accepted the amendment. The
U.S. Senate likewise added 847 amendments to what later
became the Payne-Aldrich Tariff Act of 1909; it dictated the
schedules of the Tariff Act of 1921; it rewrote an extensive
tax revision bill in7
the same year and recast most of the
tariff bill of 1922. Given, then, the power of the Senate to
propose amendments, the Senate can propose its own
version even with respect to bills which are required by the
Constitution to originate in the House.

________________

3 Art. VII, § 21.


4 Art. VI, § 1.
5 U.S. CONST., Art. II, § 2, cl. 2.
6 Rainey v. United States, 232 U.S. 309, 58 L. Ed. 117 (1914).
7 F.A. OGG AND P.O. RAY, INTRODUCTION TO AMERICAN
GOVERNMENT 309, n. 2 (1945).

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It is insisted, however, that S. No. 1630 was passed not in


substitution of H. No. 11197 but of another Senate bill (S.
No. 1129) earlier filed and that what the Senate did was
merely to “take [H. No. 11197] into consideration” in
enacting S. No. 1630. There is really no difference between
the Senate preserving H. No. 11197 up to the enacting
clause and then writing its own version following the
enacting clause (which, it would seem, petitioners admit is
an amendment by substitution), and, on the other hand,
separately presenting a bill of its own on the same subject
matter. In either case the result are two bills on the same
subject.
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
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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. On the other hand, the senators, who are elected
at large, are expected to approach the same problems from
the national perspective. Both views are thereby made to
bear on the enactment of such laws.
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
Court cannot, therefore, understand the alarm expressed
over the fact that on March 1, 1993, eight months before
the House passed H. No. 11197, S. No. 1129 had been filed
in the Senate. After all it does not appear that the Senate
ever considered it. It was only after the Senate had
received H. No. 11197 on November 23, 1993 that the
process of legislation in respect of it began with the referral
to the Senate Committee on Ways and Means of H. No.
11197 and the submission by the Committee on February
7, 1994 of S. No. 1630. For that matter, if the question were
simply the priority in the time of filing of bills, the fact is
that it was in the House that a bill (H. No. 253) to amend
the VAT law was first filed on July 22, 1992. Several other
bills had been filed in the House before S. No. 1129 was
filed in the Senate, and H. No. 11197 was only a substitute
of those earlier bills.
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Second. Enough has been said to show that it was within


the power of the Senate to propose S. No. 1630. We now
pass to the next argument of petitioners that S. No. 1630
did not pass three
8
readings on separate days as required by
the Constitution because the second and third readings
were done on the same day, March 9
24, 1994. But this was
because
10
on February 24, 1994 and again on March 22,
1994, 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. The phrase “except when the
President certifies to the necessity of its immediate
enactment, etc.” in Art. VI, § 26(2) qualifies the two stated
conditions before a bill can become a law: (i) the bill has
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passed three readings on separate days and (ii) it has been


printed in its final form and distributed three days before it
is finally approved.
In other words, the “unless” clause must be read in
relation to the “except” clause, because the two are really
coordinate clauses of the same sentence. To construe the
“except” clause as simply dispensing with the second
requirement in the “unless” clause (i.e., printing and
distribution three days before final approval) would not
only violate the rules of grammar. It would also negate the
very premise of the “except” clause: the necessity of
securing

_______________

8 Although the 1935 Constitution did not expressly require that bills
must pass three readings in each House, this was clearly implied from its
Art. VI, § 21(2) so that the two Houses by their rules prescribed three
readings for the passage of bills. Later the requirement was expressly
provided in the 1973 Constitution from which Art. VI, § 26(2) was taken.
Art. VIII, § 19(2) of the 1973 document provided: No bill shall become a
law unless it has passed three readings on separate days, and printed
copies thereof in its final form have been distributed to the Members three
days before its passage, except when the Prime Minister certifies to the
necessity of its immediate enactment to meet a public calamity or
emergency. Upon the last reading of a bill, no amendment thereto shall be
allowed, and the vote thereon shall be taken immediately thereafter, and
the yeas and nays entered in the Journal.
9 Respondents’ Consolidated Reply, Annex 14.
10 Memorandum of Petitioner Arturo M. Tolentino, Supplement C.

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Tolentino vs. Secretary of Finance

the immediate enactment of a bill which is certified in


order to meet a public calamity or emergency. For if it is
only the printing that is dispensed with by presidential
certification, the time saved would be so negligible as to be
of any use in insuring imme-diate enactment. It may well
be doubted whether doing away with the necessity of
printing and distributing copies of the bill three days before
the third reading would insure speedy enactment of a law
in the face of an emergency requiring the calling of a
special election for President and Vice-President. Under
the Constitution such a law is required to be made within

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seven days
11
of the convening of Congress in emergency
session.
That upon the certification of a bill by the President the
requirement of three readings on separate days and of
printing and distribution can be dispensed with is
supported by the weight of legislative practice. For
example, the bill defining the certiorari jurisdiction of this
Court which, in consolidation with the Senate version,
became Republic Act No. 5440, was passed on second and
third readings in the House of Representatives on the same
day (May 14, 1968) 12after the bill had been certified by the
President as urgent.
There is, therefore, no merit in the contention that
presidential certification dispenses only with the
requirement for the printing of the bill and its distribution
three days before its passage but

________________

11 Art. VII, § 10 provides: “The Congress shall, at ten o’clock in the


morning of the third day after the vacancy in the offices of the President
and Vice-President occurs, convene in accordance with its rules without
need of a call and within seven days enact a law calling for a special
election to elect a President and a Vice-President to be held not earlier
than forty-five days nor later than sixty days from the time of such call.
The bill calling such special election shall be deemed certified under
paragraph 2, Section 26, Article VI of this Constitution and shall become
law upon its approval on third reading by the Congress. Appro-priations
for the special election shall be charged against any current
appropriations and shall be exempt from the requirements of paragraph 4,
Section 25, Article VI of this Constitution. The convening of the Congress
cannot be suspended nor the special election postponed. No special
election shall be called if the vacancy occurs within eighteen months
before the date of the next presidential election.”
12 JOURNAL OF THE HOUSE OF REPRESENTATIVES, SIXTH
CONGRESS, FOURTH SESSION 398-399 (1968).

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not with the requirement of three readings on separate


days, also.
It is nonetheless urged that the certification of the bill in
this case was invalid because there was no emergency, the
condition stated in the certification of a “growing budget
deficit” not being an unusual condition in this country.
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It is noteworthy that no member of the Senate saw fit to


controvert the reality of the factual basis of the
certification. To the contrary, by passing S. No. 1630 on
second and third readings on March 24, 1994, the Senate
accepted the President’s certification. Should such
certification be now reviewed by this Court, especially
when no evidence has been shown that, because S. No.
1630 was taken up on second and third readings on the
same day, the members of the Senate were deprived of the
time needed for the study of a vital piece of legislation?
The sufficiency of the factual basis of the suspension of
the writ of habeas corpus or declaration of martial law
under Art. VII, § 18, or the existence of a national
emergency justifying the delegation of extraordinary
powers to the President under Art. VI, § 23(2), is subject to
judicial review because basic rights of individuals may be
at hazard. But the factual basis of presidential certification
of bills, which involves doing away with procedural
requirements designed to insure that bills are duly
considered by members of Congress, certainly should elicit
a different standard of review.
Petitioners also invite attention to the fact that the
President certified S. No. 1630 and not H. No. 11197. That
is because S. No. 1630 was what the Senate was
considering. When the matter was before the House, the
President likewise certified H. No. 9210 then pending in
the House.
Third. Finally it is contended that the bill which became
Republic Act No. 7716 is the bill which the Conference
Committee prepared by consolidating H. No. 11197 and S.
No. 1630. It is claimed that the Conference Committee
report included provisions not found in either the House
bill or the Senate bill and that these provisions were
“surreptitiously” inserted by the Conference Committee.
Much is made of the fact that in the last two days of its
session on April 21 and 25, 1994 the Committee met behind
closed doors. We are not told, however, whether the
provisions were not the result of the give and take that
often mark the
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Tolentino vs. Secretary of Finance

proceedings of conference committees.


Nor is there anything unusual or extraordinary about
the fact that the Conference Committee met in executive
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sessions. Often the only way to reach agreement on


conflicting provisions is to meet behind closed doors, with
only the conferees present. Otherwise, no compromise is
likely to be made. The Court is not about to take the
suggestion of a cabal or sinister motive attributed to the
conferees on the basis solely of their “secret meetings” on
April 21 and 25, 1994, nor read anything into the
incomplete remarks of the members, marked in the
transcript of stenographic notes by ellipses. The incomplete
sentences are probably due to the stenographer’s own
limitations or to the incoherence that sometimes
characterize conversations. William Safire noted some such
lapses in recorded talks even by recent past Presidents of
the United States.
In any event, in the United States conference
committees had been customarily held in executive
sessions with13
only the conferees and their staffs in
attendance. Only in November 1975 was a new rule
adopted requiring open sessions. Even then a majority of
either chamber’s
14
conferees may vote in public to close the
meetings.
As to the possibility of an entirely new bill emerging out
of a Conference Committee, it has been explained:

Under congressional rules of procedure, conference committees


are not expected to make any material change in the measure at
issue, either by deleting provisions to which both houses have
already agreed or by inserting new provisions. But this is a
difficult provision to enforce. Note the problem when one house
amends a proposal originating in either house by striking out
everything following the enacting clause and substituting
provisions which make it an entirely new bill. The versions are
now altogether different, permitting15
a conference committee to
draft essentially a new bill . . . .

________________

13 Zinn, Conference Procedure in Congress, 38 ABAJ 864-865 (1952).


14 CONG. QUARTERLY 65 (1983); M. JEWELL, THE LEGISLATIVE
PROCESS IN THE UNITED STATES 169 (1986); LEES AND SHAW,
COMMITTEES IN LEGISLATURES 163 (1979).
15 W. KEEFE AND M. OGUL, THE AMERICAN LEGISLATIVE
PROCESS 149 (1985).

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The result is a third version, which is considered an


“amendment in the nature of a substitute,” the only
requirement for which being that the third version 16
be
germane to the subject of the House and Senate bills.
Indeed, this Court recently held that it is within the
power of a conference committee to include in its report an
entirely new provision that17
is not found either in the House
bill or in the Senate bill. If the committee can propose an
amendment consisting of one or two provisions, there is no
reason why it cannot propose several provisions,
collectively considered as an “amendment in the nature of a
substitute,” so long as such amendment is germane to the
subject of the bills before the committee. After all, its
report was not final but needed the approval of both houses
of Congress to become valid as an act of the legislative
department. The charge that in this case the Conference
Committee acted 18as a third legislative chamber is thus
without any basis.

________________

16 W. OLESZEK, CONGRESSIONAL PROCEDURES AND POLICY


PROCESS 214 (1984).
17 Philippine Judges Association v. Prado, G.R. No. 105371, Nov. 11,
1993.
18 The charge is an old one. In the United States, the same charge,
including claims that important provisions were being “surreptitiously
added” in the committee, was made in the 1940s. But no satisfactory
alternative to the conference committee has been devised. And today,
given the bicameral nature of the U.S. Congress, the charge is no longer
heard. Compare the following from a 1945 comment: “As a devise for oiling
the machinery of legislation, committees of conference are, under
American conditions, useful, if not indispensable. Nevertheless, they have
shortcomings. Without exception, they work behind closed doors, hold no
hearings, and give their proceedings no publicity. Doubtless it would be
difficult for them to make headway if they did otherwise. Nevertheless, in
view of the power which they wield, strong objection can be, and is, raised.
For, while the committees are supposed to deal only with actual
differences between the houses and to stay well within the bounds set by
the extreme positions which the houses have taken, they often work into
measures, as reported, provisions of their own devising, even going so far
as to rewrite whole sections with the sole purpose of incorporating the
views which the majority members happen to hold. . . . In practice, this
often results in the adoption of important provisions, more or less
surreptitiously added, without consideration by either house—in other
words, legislation nominally by Congress but

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VOL. 235, AUGUST 25, 1994 669


Tolentino vs. Secretary of Finance

Nonetheless, it is argued that under the respective Rules of


the Senate and the House of Representatives a conference
committee can only act on the differing provisions of a
Senate bill and a House bill, and that contrary to these
Rules the Conference Committee inserted provisions not
found in the bills submitted to it. The following provisions
are cited in support of this contention:

Rules of the Senate

Rule XII:

§ 26. In the event that the Senate does not agree with the House
of Representatives on the provision of any bill or joint resolution,
the differences shall be settled by a conference committee of both
Houses which shall meet within ten days after their composition.
The President shall designate the members of the conference
committee in accordance with subparagraph (c), Section 3 of Rule
III.
Each Conference Committee Report shall contain a detailed and
sufficiently explicit statement of the changes in or amendments to
the subject measure, and shall be signed by the conferees.
The consideration of such report shall not be in order unless
the report has been filed with the Secretary of the Senate and
copies thereof have been distributed to the Members.
(Emphasis added)

Rules of the House of Representatives

Rule XIV:

§ 85. Conference Committee Reports.—In the event that the


House does not agree with the Senate on the amendments to any
bill or

________________

actually by conference committee. Any remedy found will probably take the
form of reducing the need for using conference committees at all; and the principal
suggestion to that end is that bills and resolutions be referred, not, as now, to
separate committees of the two houses, but to joint committees, which not only
would hold single sets of hearings, but might deliberate and report back bills to
the two houses in such agreed form that further significant differences would not
be likely to develop. Arrangements of this nature yield excellent results in the
legislature of Massachusetts. But there are obstacles to adoption of the plan for
Congress, not the least of them being a natural aversion of House members to joint
committees in which senators seem likely to dominate; and, as indicated below,

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the outlook for the reform is problematical.” F.A. OGG AND P.O. RAY, supra note
7 at 310-311.

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Tolentino vs. Secretary of Finance

joint resolution, the differences may be settled by conference


committees of both Chambers.
The consideration of conference committee reports shall always
be in order, except when the journal is being read, while the roll is
being called or the House is dividing on any question. Each of the
pages of such reports shall be signed by the conferees. Each report
shall contain a detailed, sufficiently explicit statement of the
changes in or amendments to the subject measure.
The consideration of such report shall not be in order unless
copies thereof are distributed to the Members: Provided, That in
the last fifteen days of each session period it shall be deemed
sufficient that three copies of the report, signed as above
provided, are deposited in the office of the Secretary General.
(Emphasis added)

To be sure, nothing in the Rules limits a conference


committee to a consideration of conflicting provisions. But
Rule XLIV, § 112 of the Rules of the Senate is cited to the
effect that “If there is no Rule applicable to a specific case
the precedents of the Legislative Department of the
Philippines shall be resorted to, and as a supplement of
these, the Rules contained in Jefferson’s Manual.” The
following is then quoted from the Jefferson’s Manual:

The managers of a conference must confine themselves to the


differences committed to them . . . and may not include subjects
not within disagreements, even though germane to a question in
issue.

Note that, according to Rule XLIX, § 112, in case there is


no specific rule applicable, resort must be to the legislative
practice. The Jefferson’s Manual is resorted to only as
supplement. It is common place in Congress that
conference committee reports include new matters which,
though germane, have not been committed to the
committee. This practice was admitted by Senator Raul S.
Roco, petitioner in G.R. No. 115543, during the oral
argument in these cases. Whatever, then, may be provided
in the Jefferson’s Manual must be considered to have been
modified by the legislative practice. If a change is desired
in the practice it must be sought in Congress since this
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question is not covered by any constitutional provision but


is only an internal rule of each house. Thus, Art. VI, § 16(3)
of the Constitution provides that “Each House may
determine the rules of its proceedings . . . .”
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Tolentino vs. Secretary of Finance

This observation applies to the other contention that the


Rules of the two chambers were likewise disregarded in the
preparation of the Conference Committee Report because
the Report did not contain a “detailed and sufficiently
explicit statement of changes in, or amendments to, the
subject measure.” The Report used brackets and capital
letters to indicate the changes. This is a standard practice
in bill-drafting. We cannot say that in using these marks
and symbols the Committee violated the Rules of the
Senate and the House. Moreover, this Court is not the
proper forum for the enforcement of these internal Rules.
To the contrary, as we have already ruled, “parliamentary
rules are merely procedural19and with their observance the
courts have no concern.” Our concern is with the
procedural requirements of the Constitution for the
enactment of laws. As far as these requirements are
concerned, we are satisfied that they have been faithfully
observed in these cases.
Nor is there any reason for requiring that the
Committee’s Report in these cases must have undergone
three readings in each of the two houses. If that be the
case, there would be no end to negotiation since each house
may seek modifications of the compromise bill. The nature
of the bill, therefore, requires that it be acted upon by each
house on a “take it or leave it” basis, with the only
alternative that if it is not approved by both houses,
another conference committee must be appointed. But then
again the result would still be a compromise measure that
may not be wholly satisfying to both houses.
Art. VI, § 26(2) must, therefore, be construed as
referring only to bills introduced for the first time in either
house of Congress, not to the conference committee report.
For if the purpose of requiring three readings is to give
members of Congress time to study bills, it cannot be
gainsaid that H. No. 11197 was passed in the House after
three readings; that in the Senate it was considered on first
reading and then referred to a committee of that body; that
although the Senate committee did not report out the
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House bill, it submitted a version (S. No. 1630) which it


had prepared by “taking into consideration” the House bill;
that for its part the Conference Committee consolidated the
two bills and prepared a

_________________

19 Osmeña v. Pendatun, 109 Phil. 863, 871 (1960).

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Tolentino vs. Secretary of Finance

compromise version; that the Conference Committee


Report was thereafter approved by the House and the
Senate, presumably after appropriate study by their
members. We cannot say that, as a matter of fact, the
members of Congress were not fully informed of the
provisions of the bill. The allegation that the Conference
Committee usurped the legislative power of Congress is, in
our view, without warrant in fact and in law.
Fourth. Whatever doubts there may be as to the formal
validity of Republic
20
Act No. 7716 must be resolved in its
favor. Our cases manifest firm adherence to the rule that
an enrolled copy of a bill is conclusive not only of its
provisions but also of its due enactment. Not even claims
that a proposed constitutional amendment was invalid
because 21the requisite votes for its approval had not been
obtained or that certain provisions of a22 statute had been
“smuggled” in the printing of the bill have moved or
persuaded us to look behind the proceedings of a coequal
branch of the government. There is no reason now to
depart from this rule.
No claim is here made that23
the “enrolled bill” rule is
absolute. In fact in one case we “went behind” an enrolled
bill and consulted the Journal to determine whether
certain provisions of a statute had been approved by the
Senate in view of the fact that the President of the Senate
himself, who had signed the enrolled bill, admitted a
mistake and withdrew his signature, so that in effect there
was no longer an enrolled bill to consider.
But where allegations that the constitutional procedures
for the passage of bills have not been observed have no
more basis than another allegation that the Conference
Committee “surreptitiously” inserted provisions into a bill
which it had prepared, we should decline the invitation to
go behind the enrolled copy of the bill. To disregard the
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“enrolled bill” rule in such cases would be to disregard the


respect due the other two departments of our government.

________________

20 E.g., Mabanag v. Lopez Vito, 78 Phil. 1 (1947); Casco (Phil.) Inc. v.


Gimenez, 7 SCRA 347 (1963); Morales v. Subido, 27 SCRA 131 (1969).
21 Mabanag v. Lopez Vito, supra note 20.
22 Morales v. Subido, supra note 20.
23 Astorga v. Villegas, 56 SCRA 714 (1974).

673

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Tolentino vs. Secretary of Finance

Fifth. An additional attack on the formal validity of


Republic Act No. 7716 is made by the Philippine Airlines,
Inc., petitioner in G.R. No. 11582, namely, that it violates
Art. VI, § 26(1) which provides that “Every bill passed by
Congress shall embrace only one subject which shall be
expressed in the title thereof.” It is contended that neither
H. No. 11197 nor S. No. 1630 provided for removal of
exemption of PAL transactions from the payment of the
VAT and that this was made only in the Conference
Committee bill which became Republic Act No. 7716
without reflecting this fact in its title.
The title of Republic Act No. 7716 is:

AN ACT RESTRUCTURING THE VALUE-ADDED TAX (VAT)


SYSTEM, WIDENING ITS TAX BASE AND ENHANCING ITS
ADMINISTRATION, AND FOR THESE PURPOSES
AMENDING AND REPEALING THE RELEVANT PROVISIONS
OF THE NATIONAL INTERNAL REVENUE CODE, AS
AMENDED, AND FOR OTHER PURPOSES.

Among the provisions of the NIRC amended is § 103, which


originally read:

§ 103. Exempt transactions.—The following shall be exempt from


the value-added tax:
....
(q) Transactions which are exempt under special laws or
international agreements to which the Philippines is a signatory.

Among the transactions exempted from the VAT were


those of PAL because it was exempted under its franchise
(P.D. No. 1590) from the payment of all “other taxes . . .
now or in the near future,” in consideration of the payment
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by it either of the corporate income tax or a franchise tax of


2%.
As a result of its amendment by Republic Act No. 7716, §
103 of the NIRC now provides:

§ 103. Exempt transactions.—The following shall be exempt from


the value-added tax:
....
(q) Transactions which are exempt under special laws, except
those granted under Presidential Decree Nos. 66, 529, 972, 1491,
1590. . . .

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The effect of the amendment is to remove the exemption


granted to PAL, as far as the VAT is concerned.
The question is whether this amendment of § 103 of the
NIRC is fairly embraced in the title of Republic Act No.
7716, although no mention is made therein of P.D. No.
1590 as among those which the statute amends. We think
it is, since the title states that the purpose of the statute is
to expand the VAT system, and one way of doing this is to
widen its base by withdrawing some of the exemptions
granted before. To insist that P.D. No. 1590 be mentioned
in the title of the law, in addition to § 103 of the NIRC, in
which it is specifically referred to, would be to insist that
the title of a bill should be a complete index of its content.
The constitutional requirement that every bill passed by
Congress shall embrace only one subject which shall be
expressed in its title is intended to prevent surprise upon
the members of Congress and to inform the people of
pending legislation so that, if they wish to, they can be
heard regarding it. If, in the case at bar, petitioner did not
know before that its exemption had been withdrawn, it is
not because of any defect in the title but perhaps for the
same reason other statutes, although published, pass
unnoticed until some event somehow calls attention to
their existence. Indeed, the title of Republic Act No. 7716 is
not any more general than the title of PAL’s own franchise
under P.D. No. 1590, and yet no mention is made of its tax
exemption. The title of P.D. No. 1590 is:

AN ACT GRANTING A NEW FRANCHISE TO PHILIPPINE


AIRLINES, INC. TO ESTABLISH, OPERATE, AND MAINTAIN

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AIRTRANSPORT SERVICES IN THE PHILIPPINES AND


BETWEEN THE PHILIPPINES AND OTHER COUNTRIES.

The trend in our cases is to construe the constitutional


requirement in such a manner that courts do not unduly
interfere with the enactment of necessary legislation and to
consider it sufficient if the title expresses the general
subject of the statute and all its provisions
24
are germane to
the general subject thus expressed.

________________

24 See, e.g., Alalayan v. National Power Corp., 24 SCRA 172 (1968);


Cordero v. Cabatuando, 6 SCRA 418 (1962); Sumulong v. COMELEC, 73
Phil. 288 (1941).

675

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Tolentino vs. Secretary of Finance

It is further contended that amendment of petitioner’s


franchise may only be made by special law, in view of § 24
of P.D. No. 1590 which provides:

This franchise, as amended, or any section or provision hereof


may only be modified, amended, or repealed expressly by a special
law or decree that shall specifically modify, amend, or repeal this
franchise or any section or provision thereof.

This provision is evidently intended to prevent the


amendment of the franchise by mere implication resulting
from the enactment of a later inconsistent statute, in
consideration of the fact that a franchise is a contract
which can be altered only by consent
25
of the parties. Thus in
Manila Railroad Co. v. Rafferty, it was held that an Act of
the U.S. Congress, which provided for the payment of tax
on certain goods and articles imported into the Philippines,
did not amend the franchise of plaintiff, which exempted it
from all taxes except those mentioned in its franchise. It
was held that a special law cannot be amended by a
general law.
In contrast, in the case at bar, Republic Act No. 7716
expressly amends PAL’s franchise (P.D. No. 1590) by
specifically excepting from the grant of exemptions from
the VAT PAL’s exemption under P.D. No. 1590. This is
within the power of Congress to do under Art. XII, § 11 of
the Constitution, which provides that the grant of a
franchise for the operation of a public utility is subject to
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amendment, alteration or repeal by Congress when the


common good so requires.

II. SUBSTANTIVE ISSUES

A. Claims of Press Freedom, Freedom of Thought and


Religious Freedom
The Philippine Press Institute (PPI), petitioner in G.R. No.
115544, is a nonprofit organization of newspaper
publishers established for the improvement of journalism
in the Philippines. On the other hand, petitioner in G.R.
No. 115781, the Philippine Bible Society (PBS), is a
nonprofit organization engaged in the

_______________

25 40 Phil. 224 (1919).

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printing and distribution of bibles and other religious


articles. Both petitioners claim violations of their rights
under §§ 4 and 5 of the Bill of Rights as a result of the
enactment of the VAT Law.
The PPI questions the law insofar as it has withdrawn
the exemption previously granted to the press under § 103
(f) of the NIRC. Although the exemption was subsequently
restored by administrative regulation with respect to the
circulation income of newspapers, the PPI presses its claim
because of the possibility that the exemption may still be
removed by mere revocation of the regulation of the
Secretary of Finance. On the other hand, the PBS goes so
far as to question the Secretary’s power to grant exemption
for two reasons: (1) The Secretary of Finance has no power
to grant tax exemption because this is vested in Congress
and requires
26
for its exercise the vote of a majority of all its
members and (2) the Secretary’s duty is to execute the
law. § 103 of the NIRC contains a list of transactions
exempted from VAT. Among the transactions previously
granted exemption were:

(f) Printing, publication, importation or sale of books and any


newspaper, magazine, review, or bulletin which appears at

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regular intervals with fixed prices for subscription and sale and
which is devoted principally to the publication of advertisements.

Republic Act No. 7716 amended § 103 by deleting ¶ (f) with


the result that print media became subject to the VAT with
respect to all aspects of their operations. Later, however,
based on a memorandum of the Secretary of Justice,
respondent Secretary of Finance issued Revenue
Regulations No. 11-94, dated June 27, 1994, exempting the
“circulation income of print media pursuant to § 4 Article
III of the 1987 Philippine Constitution guaranteeing
against abridgment of freedom of the press, among others.”
The exemption of “circulation income” has left income from
advertisements still subject to the VAT.
It is unnecessary to pass upon the contention that the
exemption granted is beyond the authority of the Secretary
of Finance to

________________

26 Art. VI, § 28(4) provides: “No law granting any tax exemption shall
be passed without the concurrence of a majority of all the Members of the
Congress.”

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give, in view of PPI’s contention that even with the


exemption of the circulation revenue of print media there is
still an unconstitutional abridgment 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 for publication. 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 PPI’s
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. It has been held:

The publisher of a newspaper has no immunity from the


application of general laws. He has no special privilege to invade

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the rights and liberties of others. He must answer for libel. He


may be punished for contempt of court . . . . Like others, he must
27
pay equitable and nondiscriminatory taxes on his business . . . .

The PPI does not dispute this point, either.


What it contends is that by withdrawing the exemption
previously granted to print media transactions involving
printing, publication, importation or sale of newspapers,
Republic Act No. 7716 has singled out the press for
discriminatory treatment and that within the class of mass
media the law discriminates against print media by giving
broadcast media favored treatment. We have carefully
examined this argument, but we are unable to find a
differential treatment of the press by the law, much less
any censorial motivation for its enactment. If the press is
now required to pay a value-added tax on its transactions,
it is not because it is being singled out, much less targeted,
for special treatment but only because of the removal of the
exemption previously granted to it by law. The withdrawal
of exemption is all that is involved in these cases. Other
transactions, likewise previously granted exemption, have
been delisted as part of the

_______________

27 Associated Press v. NLRB, 301 U.S. 103, 132, 81 L.Ed. 953, 961
(1937).

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scheme to expand the base and the scope of the VAT


system. The law would perhaps be open to the charge of
discriminatory treatment if the only privilege withdrawn
had been that granted to the press. But that is not the case.
The situation in the case at bar is indeed a far cry from
those cited by the PPI in support of its claim that Republic
Act No. 7716 subjects the press to discriminatory taxation.
In the cases cited, the discriminatory purpose was clear
either from the background of the law or from its operation.
28
For example, in Grosjean v. American Press Co., the law
imposed a license tax equivalent to 2% of the gross receipts
derived from advertisements only on newspapers which
had a circulation of more than 20,000 copies per week.
Because the tax was not based on the volume of
advertisement alone but was measured by the extent of its
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circulation as well, the law applied only to the thirteen


large newspapers in Louisiana, leaving untaxed four
papers with circulation of only slightly less than 20,000
copies a week and 120 weekly newspapers which were in
serious competition with the thirteen newspapers in
question. It was well known that the thirteen newspapers
had been critical of Senator Huey Long, and the Long-
dominated legislature of Louisiana responded by taxing
what Long described as the “lying newspapers” by imposing
on them “a tax on lying.” The effect of the tax was to curtail
both their revenue and their circulation. As the U.S.
Supreme Court noted, the tax was “a deliberate and
calculated device in the guise of a tax to limit the
circulation of information to which the public
29
is entitled in
virtue of the constitutional guaranties.” The case is a
classic illustration of the warning that the power to tax is
the power to destroy.30
In the other case invoked by the PPI, the press was
also found to have been singled out because everything was
exempt from the “use tax” on ink and paper, except the
press. Minnesota imposed a tax on the sales of goods in
that state. To protect the sales tax, it enacted a
complementary tax on the privilege of “using, storing or
consuming in that state tangible personal

_______________

28 297 U.S. 233, 80 L.Ed. 660 (1936).


29 297 U.S. at 250, 80 L.Ed. at 669.
30 Minneapolis Star v. Minnesota Commissioner of Revenue, 460 U.S.
575, 75 L.Ed.2d 295 (1983).

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property” by eliminating the residents’ incentive to get


goods from outside states where the sales tax might be
lower. The Minnesota Star Tribune was exempted from
both taxes from 1967 to 1971. In 1971, however, the state
legislature amended the tax scheme by imposing the “use
tax” on the cost of paper and ink used for publication. The
law was held to have singled out the press because (1)
there was no reason for imposing the “use tax” since the
press was exempt from the sales tax and (2) the “use tax”
was laid on an “intermediate transaction rather than the
ultimate retail sale.” Minnesota had a heavy burden of
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justifying the differential treatment and it failed to do so.


In addition, the U.S. Supreme Court found the law to be
discriminatory because the legislature, by again amending
the law so as to exempt the first $100,000 of paper and ink
used, further narrowed the coverage of the tax so that “only
a handful of publishers pay any tax 31 at all and even fewer
pay any significant amount of tax.” The discriminatory
purpose was thus very clear.
More 32recently, in Arkansas Writers’ Project, Inc. v.
Ragland, it was held that a law which taxed general
interest magazines but not newspapers and religious,
professional, trade and sports journals was discriminatory
because while the tax did not single out the press as a
whole, it targeted a small group within the press. What is
more, by differentiating on the basis of contents (i.e.,
between general interest and special interests such as
religion or sports) the law became “entirely incompatible
with the First Amendment’s guarantee of freedom of the
press.”
These cases come down to this: that unless justified, the
differential treatment of the press creates risks of
suppression of expression. In contrast, in the cases at bar,
the statute applies to a wide range of goods and services.
The argument that, by imposing the VAT only on print
media whose gross sales exceeds P480,000
33
but not more
than P750,000, the law discriminates is

________________

31 460 U.S. at 591, 75 L.Ed.2d at 308-9 (1983).


32 481 U.S. 221, 95 L.Ed.2d 209 (1987).
33 § 103(t) of the NIRC exempts from the VAT “Sale or lease of goods or
properties or the performance of services other than the transactions
mentioned in the preceding paragraphs, the gross annual sales and/or
receipts [of which] do not exceed the amount prescribed in regulations to
be promulgated by the President upon the recommendation

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without merit since it has not been shown that as a result


the class subject to tax has been unreasonably narrowed.
The fact is that this limitation does not apply to the press
alone but to all sales. Nor is impermissible motive shown
by the fact that print media and broadcast media are
treated differently. The press is taxed on its transactions
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involving printing and publication, which are different


from the transactions of broadcast media. There is thus a
reasonable basis for the classification.
The cases canvassed, it must be stressed, eschew any
suggestion that “owners of newspapers are immune from
any forms of ordinary taxation.” The license tax in the
Grosjean case was declared invalid because it was “one
single in kind, with a long34 history of hostile misuse against
the freedom of the press.” On the other hand, Minneapolis
Star acknowledged that “The First Amendment does not
prohibit all regulation of the press [and that] the States
and the Federal Government can subject newspapers to
generally applicable economic
35
regulations without creating
constitutional problems.”
What has been said above also disposes of the
allegations of the PBS that the removal of the exemption of
printing, publication or importation of books and religious
articles, as well as their printing and publication, likewise
violates freedom of thought and of conscience. For as the
U.S. Supreme Court unanimously held 36
in Jimmy Swaggart
Ministries v. Board of Equalization, the Free Exercise of
Religion Clause does not prohibit imposing a generally
applicable sales and use tax on the sale of religious
materials by a religious organization.
This brings us to the
37
question whether the registration
provision of the law, although of general applicability,
nonetheless is

_________________

by the Secretary of Finance which shall not be less than Four hundred
eighty thousand pesos (P480,000.00) or more than Seven hundred twenty
thousand pesos (P720,000.00) subject to tax under Section 112 of this
Code.”
34 297 U.S. at 250, 80 L.Ed. at 668.
35 460 U.S. at 581, 75 L.Ed.2d at 302.
36 493 U.S. 378, 107 L.Ed.2d 796 (1990).
37 § 107 of the NIRC provides: “Any person subject to a value added tax
under Sections 100 and 102 of this Code shall register with the
appropriate Revenue District Officer and pay an annual registration

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invalid when applied to the press because it lays a prior


restraint on its essential freedom. The case of American
38
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38
Bible Society v. City of Manila is cited by both the PBS
and the PPI in support of their contention that the law
imposes censorship. There, this Court held that an
ordinance of the City of Manila, which imposed a license
fee on those engaged in the business of general
merchandise, could not be applied to the appellant’s sale of
bibles and other religious39literature. This Court relied on
Murdock v. Pennsylvania, in which it was held that, as a
license fee is fixed in amount and unrelated to the receipts
of the taxpayer, the license fee, when applied to a religious
sect, was actually being imposed as a condition for the
exercise of the sect’s right under the Constitution. For that
reason, it was held, the license fee “restrains in advance
those constitutional liberties of press and 40
religion and
inevitably tends to suppress their exercise.”
But, in this case, the fee in § 107, although a fixed
amount (P1,000), is not imposed for the exercise of a
privilege but only for the purpose of defraying part of the
cost of registration. The registration requirement is a
central feature of the VAT system. It is designed to provide
a record of tax credits because any person who is subject to
the payment of the VAT pays an input tax, even as he
collects an output tax on sales made or services rendered.
The registration fee is thus a mere administrative fee, one
not imposed on the exercise of a privilege, much less a
constitutional right.

________________

fee in the amount of One thousand pesos (P1,000.00) for every separate
or distinct establishment or place of business and every year thereafter on
or before the last day of January. Any person just commencing a business
subject to the value-added tax must pay the fee before engaging therein . .
.”
38 101 Phil. 386 (1957).
39 319 U.S. 105, 113, 87 L.Ed. 1292 (1943).
40 319 U.S. at 114, 87 L.Ed. 1292 at 1298. For the same reason, in
People v. Korins, 385 N.Y.S. 2d 474 (1976) a decision of the city court of
Utica, Oneida County held that to apply an ordinance requiring a
business license to be obtained before a person could sell newspapers in
the streets would be to impose a prior restraint on press freedom because
“a newspaper is not in the same category as pineapple or a soap powder or
a pair of shoes” whose sale may be conditioned on the possession of a
business license.

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For the foregoing reasons, we find the attack on Republic


Act No. 7716 on the ground that it offends the free speech,
press and freedom of religion guarantees of the
Constitution to be without merit. For the same reasons, we
find the claim of the Philippine Educational Publishers
Association (PEPA) in G.R. No. 115931 that the increase in
the price of books and other educational materials as a
result of the VAT would violate the constitutional mandate
to the government to give priority to education, science and
technology (Art. II, § 17) to be untenable.

B. Claims of Regressivity, Denial of Due Process, Equal


Protection, and Impairment of Contracts
There is basis for passing upon claims that on its face the
statute violates the guarantees of freedom of speech, press
and religion. The possible “chilling effect” which it may
have on the essential freedom of the mind and conscience
and the need to assure that the channels of communication
are open and operating importunately demand the exercise
of this Court’s power of review.
There is, however, no justification for passing upon the
claims that the law also violates the rule that taxation
must be progressive and that it denies petitioners’ right to
due process and the equal protection of the laws. The
reason for this different treatment has been cogently stated
by an eminent authority on constitutional law thus:
“[W]hen freedom of the mind is imperiled by law, it is
freedom that commands a momentum of respect; when
property is imperiled it is the lawmakers’ judgment that
commands respect. This dual standard may not precisely
reverse the presumption of constitutionality in civil
liberties cases, but obviously it does 41set up a hierarchy of
values within the due process clause.”
Indeed, the absence of threat of immediate harm makes
the need for judicial intervention less evident and
underscores the essential nature of petitioners’ attack on
the law on the grounds of regressivity, denial of due process
and equal protection and

________________

41 P.A. FREUND, ON UNDERSTANDING THE SUPREME COURT II


(1950), quoted in Ermita, Malate Hotel and Motel Operators Ass’n v. City
Mayor, 21 SCRA 449, 459 (1967).

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impairment of contracts as a mere academic discussion of


the merits of the law. For the fact is that there have even
been no notices of assessments issued to petitioners and no
determinations at the administrative levels of their claims
so as to illuminate the actual operation of the law and
enable us to reach sound judgment regarding so
fundamental questions as those raised in these suits.
Thus, the broad argument against the VAT is that it is
regressive and that it violates the requirement that “The
rule of taxation shall be uniform and equitable [and] 42
Congress shall evolve a progressive system of taxation.”
Petitioners in G.R. No. 115781 quote from a paper, entitled
“VAT Policy Issues: Structure, Regressivity, Inflation and
Exports” by Alan A. Tait of the International Monetary
Fund, that “VAT payment by low-income households will
be a higher proportion of their incomes (and expenditures)
than payments by higher-income households. That is, the
VAT will be regressive.” Petitioners contend that as a
result of the uniform 10% VAT, the tax on consumption
goods of those who are in the higher-income bracket, which
before were taxed at a rate higher than 10%, has been
reduced, while basic commodities, which before were taxed
at rates ranging from 3% to 5%, are now taxed at a higher
rate.
Just as vigorously as it is asserted that the law is
regressive, the opposite claim is pressed by respondents
that in fact it distributes the tax burden to as many goods
and services as possible particularly to those which are
within the reach of higher-income groups, even as the law
exempts basic goods and services. It is thus equitable. The
goods and properties subject to the VAT are those used or
consumed by higher-income groups. These include real
properties held primarily for sale to customers or held for
lease in the ordinary course of business, the right or
privilege to use industrial, commercial or scientific
equipment, hotels, restaurants and similar places, tourist
buses, and the like. On the other hand, small business
establishments, with annual gross sales of less than
P500,000, are exempted. This,

_________________

42 Art. VI, § 28(1). Related to this argument is the claim that Republic
Act No. 7716 likewise infringes the Due Process and Equal Protection
Clauses of the Bill of Rights, Art. III, § 1(1).

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according to respondents, removes from the coverage of the


law some 30,000 business 43
establishments. On the other
hand, an occasional paper of the Center for Research and
Communication cites a NEDA study that the VAT has
minimal impact on inflation and income distribution and
that while additional expenditure for the lowest income
class is only P301 or 1.49% a year, that for a family earning
P500,000 a year or more is P8,340 or 2.2%.
Lacking empirical data on which to base any conclusion
regarding these arguments, any discussion whether the
VAT is regressive in the sense that it will hit the “poor” and
middle-income group in society harder than it will the
“rich,” as the Cooperative Union of the Philippines (CUP)
claims in G.R. No. 115873, is largely an academic exercise.
On the other hand, the CUP’s contention that Congress’
withdrawal of exemption of producers cooperatives,
marketing cooperatives, and service cooperatives, while
maintaining that granted to electric cooperatives, not only
goes against the constitutional policy to promote
cooperatives as instruments of social justice (Art. XII, § 15)
but also denies such cooperatives the equal protection of
the law is actually a policy argument. The legislature is not
required to adhere to 44 a policy of “all or none” in choosing
the subject of taxation.
Nor is the contention of the Chamber of Real Estate and
Builders Association (CREBA), petitioner in G.R. 115754,
that the VAT will reduce the mark up of its members by as
much as 85% to 90% any more concrete. It is a mere
allegation. On the other hand, the claim of the Philippine
Press Institute, petitioner in G.R. No. 115544, that the
VAT will drive some of its members out of circulation
because their profits from advertisements will not be
enough to pay for their tax liability, while purporting to be
based on the financial statements of the newspapers in
question, still falls short of the establishment of facts by
evidence so necessary for adjudicating the question
whether the tax is oppressive and confiscatory.
Indeed, regressivity is not a negative standard for courts
to enforce. What Congress is required by the Constitution
to do is to

_______________

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43 Neri, “In Support of the Expanded Value-Added Tax,” (CRC


Economic Policy Papers No. 5 1994) pp. 3-4.
44 Cf. Lutz v. Araneta, 98 Phil. 148, 153 (1955).

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“evolve a progressive system of taxation.” This is a directive


to Congress, just like the directive to it to give priority to
the enactment of laws for the enhancement of human
dignity and the reduction of social, economic and political
inequalities (Art. XIII, § 1), or for the promotion of the right
to “quality education” (Art. XIV, § 1). These provisions are
put in the Constitution as moral incentives to legislation,
not as judicially enforceable rights. 45
At all events, our 1988 decision in Kapatiran should
have laid to rest the questions now raised against the VAT.
There similar arguments made against the original VAT
Law (Executive Order No. 273) were held to be
hypothetical, with no more basis than newspaper articles
which this Court found to be “hearsay and [without]
evidentiary value.” As Republic Act No. 7716 merely
expands the base of the VAT system and its coverage as
provided in the original VAT Law, further debate on the
desirability and wisdom of the law should have shifted to
Congress.
Only slightly less abstract but nonetheless hypothetical
is the contention of CREBA 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.” 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 adequate46
authority to secure the peace and
good order of society.
In truth, the Contract Clause has never been thought as
a limitation on the exercise of the State’s power of taxation
save

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45 Kapatiran ng mga Naglilingkod sa Pamahalaan ng Pilipinas, Inc. v.


Tan, 163 SCRA 371.
46 Cf. Philippine American Life Ins. Co. v. Auditor General, 22 SCRA
135 (1968).

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only where a 47tax exemption has been granted for a valid


consideration. Such is not the case of PAL in G.R. No.
115852, and we do not understand it to make this claim.
Rather, its position, as discussed above, is that the removal
of its tax exemption cannot be made by a general, but only
by a specific, law.
The substantive issues raised in some of the cases are
presented in abstract, hypothetical form because of the lack
of a concrete record. We accept that this Court does not
only adjudicate
48
private cases; that public actions by “non-
Hohfeldian” or ideological plaintiffs are now cognizable
provided they meet the standing requirement of the
Constitution; that under Art. VIII, § 1, ¶ 2 the Court has a
“special function” of vindicating constitutional rights.
Nonetheless the feeling cannot be escaped that we do not
have before us in these cases a fully developed factual
record that alone
49
can impart to our adjudication the impact
of actuality to insure that decision-making is informed
and well grounded. Needless to say, we do not have power
to render advisory opinions or even jurisdiction over
petitions for declaratory judgment. In effect we are being
asked to do what the Conference Committee is precisely
accused of having done in these cases—to sit as a third
legislative chamber to review legislation.

________________

47 See E. M. FERNANDO, THE CONSTITUTION OF THE


PHILIPPINES 560-561 (2d Ed., 1977).
48 The term is Professor Jaffe’s (JUDICIAL CONTROL OF
ADMINISTRATIVE ACTION (1965) adopted by Justice Harlan in his
dissent in Flast v. Cohen, 392 U.S. 83, 119-120, L.Ed.2d 947, 973 (1968) to
distinguish between the personal and proprietary interest of traditional
plaintiffs and the public interest of a citizen suing in a public action. The
term was mentioned by some members of this Court in the Lotto case
(Kilosbayan, Inc. v. Guingona, G.R. No. 113375, May 5, 1994).

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49 Compare Justice Laurel: “Even then, this power of judicial review is


limited to actual cases and controversies to be exercised after full
opportunity of argument by the parties, and limited further to the
constitutional question raised or the very lis mota presented. Any attempt
at abstraction could only lead to dialectics and barren legal questions and
to sterile conclusions unrelated to actualities.” Angara v. Electoral
Commission, 63 Phil. 139, 158 (1936).

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We are told, however, that the power of judicial review is


not so much power as it is duty imposed on this Court by
the Constitution and that we would be remiss in the
performance of that duty if we decline to look behind the
barriers set by the principle of separation of powers. Art.
VIII, § 1, ¶ 2 is cited in support of this view:

Judicial power includes the duty of the courts of justice to settle


actual controversies involving rights which are legally
demandable and enforceable, and to determine whether or not
there has been a grave abuse of discretion amounting to lack or
excess of jurisdiction on the part of any branch or instrumentality
of the Government.

To view the judicial power of review as a duty is nothing


new. Chief Justice Marshall said so in 1803, to justify the
assertion of this power in Marbury v. Madison:

It is emphatically the province and duty of the judicial


department to say what the law is. Those who apply the rule to
particular cases must of necessity expound and interpret that
rule. If two laws conflict50with each other, the courts must decide
on the operation of each.

Justice Laurel echoed this justification in 1936 in Angara


v. Electoral Commission:

And when the judiciary mediates to allocate constitutional


boundaries, it does not assert any superiority over the other
departments; it does not in reality nullify or invalidate an act of
the legislature, but only asserts the solemn and sacred obligation
assigned to it by the Constitution to determine conflicting claims
of authority under the Constitution and to establish for the
parties in an actual controversy 51the rights which that instrument
secures and guarantees to them.

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This conception
52
of the judicial power has been affirmed in
several cases of this Court following Angara.

_______________

50 1 Cranch 137, 2 L.Ed. 60(1803) (emphasis added).


51 Supra note 49 (emphasis added).
52 People v. Vera, 65 Phil. 56, 94 (1937); Tañada v. Cuenco, 103 Phil.
1051, 1061-2 (1957); Macias v. COMELEC, 3 SCRA 1, 7-8 (1961).

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It does not add anything, therefore, to invoke this “duty” to


justify this Court’s intervention in what is essentially a
case that at best is not ripe for adjudication. That duty
must still be performed in the context of a concrete case or
controversy, as Art. VIII, § 5(2) clearly defines our
jurisdiction in terms of “cases,” and nothing but “cases.”
That the other departments of the government may have
committed a grave abuse of discretion is not an
independent ground for exercising our power. Disregard of
the essential limits imposed by the case and controversy
requirement can in the long run only result in undermining
our authority as a court of law. For, as judges, what we are
called upon to render is judgment according to law, not
according to what may appear to be the opinion of the day.

____________________________________

In the preceding pages we have endeavored to discuss,


within limits, the validity of Republic Act No. 7716 in its
formal and substantive aspects as this has been raised in
the various cases before us. To sum up, we hold:

(1) That the procedural requirements of the


Constitution have been complied with by Congress
in the enactment of the statute;
(2) That judicial inquiry whether the formal
requirements for the enactment of statutes—
beyond those prescribed by the Constitution—have
been observed is precluded by the principle of
separation of powers;
(3) That the law does not abridge freedom of speech,
expression or the press, nor interfere with the free

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exercise of religion, nor deny to any of the parties


the right to an education; and
(4) That, in view of the absence of a factual foundation
of record, claims that the law is regressive,
oppressive and confiscatory and that it violates
vested rights protected under the Contract Clause
are prematurely raised and do not justify the grant
of prospective relief by writ of prohibition.

WHEREFORE, the petitions in these cases are


DISMISSED.
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Tolentino vs. Secretary of Finance

     Bidin, Quiason and Kapunan, JJ., concur.


          Narvasa (C.J.) and Melo, J., Concur in separate
opinions.
     Cruz, Padilla and Vitug, JJ., See separate opinions.
     Feliciano, J., I join in both the majority opinion by
Mendoza, J. and the concurring opinion of Narvasa, C.J.
     Regalado, Davide, Jr., Romero, Bellosillo and Puno,
JJ., See dissenting opinions.

SEPARATE OPINION

NARVASA, C.J.:

I fully concur with the conclusions set forth in the scholarly


opinion of my learned colleague, Mr. Justice Vicente V.
Mendoza. I write this separate opinion to express my own
views relative to the procedural issues raised by the
various petitions and dealt with by some other Members of
the Court in their separate opinions.
By their very nature, it would seem, discussions of
constitutional issues prove fertile ground for a not
uncommon phenomenon: debate marked by passionate
partisanship amounting sometimes to impatience with
adverse views, an eagerness on the part of the proponents
on each side to assume the role of, or be perceived as,
staunch defenders of constitutional principles, manifesting
itself in flights of rhetoric, even hyperbole. The peril in this,
obviously, is a diminution of objectivity—that quality
which, on the part of those charged with the duty and
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authority of interpreting the fundamental law, is of the


essence of their great function. For the Court, more
perhaps than for any other person or group, it is necessary
to maintain that desirable objectivity. It must make certain
that on this as on any other occasion, the judicial function
is meticulously performed, the facts ascertained as
comprehensively and as accurately as possible, all the
issues particularly identified, all the arguments clearly
understood; else, it may itself be accused, by its own
members or by others, of a lack of adherence to, or a
careless observance of, its own procedures, the signatures
of its individual members on its enrolled verdicts
notwithstanding.
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Tolentino vs. Secretary of Finance

In the matter now before the Court, and whatever


reservations some people may entertain about their
intellectual limitations or moral scruples, I cannot bring
myself to accept the thesis which necessarily implies that
the members of our august Congress, in enacting the
expanded VAT law, exposed their ignorance, or indifference
to the observance, of the rules of procedure set down by the
Constitution or by their respective chambers, or what is
worse, deliberately ignored those rules for some yet
undiscovered purpose nefarious in nature, or at least some
purpose other than the public weal; or that a few of their
fellows, acting as a bicameral conference committee, by
devious schemes and cunning maneuvers, and in
conspiracy with officials of the Executive Department and
others, succeeded in “pulling the wool over the eyes” of all
their other colleagues and foisting on them a bill containing
provisions that neither chamber of our bicameral
legislature conceived or contemplated. This is the thesis
that the petitioners would have this Court approve. It is a
thesis I consider bereft of any factual or logical foundation.
Other than the bare declarations of some of the
petitioners, or arguments from the use and import of the
language employed in the relevant documents and records,
there is no evidence before the Court adequate to support a
finding that the legislators concerned, whether of the upper
or lower chamber, acted otherwise than in good faith, in the
honest discharge of their functions, in the sincere belief
that the established procedures were being regularly
observed or, at least, that there occurred no serious or fatal
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deviation therefrom. There is no evidence on which


reasonably to rest a conclusion that any executive or other
official took part in or unduly influenced the proceedings
before the bicameral conference committee, or that the
members of the latter were motivated by a desire to
surreptitiously introduce improper revisions in the bills
which they were required to reconcile, or that after
agreement had been reached on the mode and manner of
reconciliation of the “disagreeing provisions,” had resorted
to stratagems or employed under-handed ploys to ensure
their approval and adoption by either House. Neither is
there any proof that in voting on the Bicameral Conference
Committee (BCC) version of the reconciled bills, the
members of the Senate and the House did so in ignorance
of, or without understanding, the contents thereof or the
bills therein reconciled.
691

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Also unacceptable is the theory that since the Constitution


requires appropriation and revenue bills to originate
exclusively in the House of Representatives, it is improper
if not unconstitutional for the Senate to formulate, or even
think about formulating, its own draft of this type of
measure in anticipation of receipt of one transmitted by the
lower Chamber. This is specially cogent as regards much-
publicized suggestions for legislation (like the expanded
VAT Law) emanating from one or more legislators, or from
the Executive Department, or the private sector, etc. which
understandably could be expected to forthwith generate
much Congressional cogitation.
Exclusive origination, I submit, should have no
reference to time of conception. As a practical matter,
origination should refer to the affirmative act which
effectively puts the bicameral legislative procedure in
motion, i.e., the transmission by one chamber to the other
of a bill for its adoption. This is the purposeful act which
sets the legislative machinery in operation to effectively
lead to the enactment of a statute. Until this transmission
takes place, the formulation and discussions, or the reading
for three or more times of proposed measures in either
chamber, would be meaningless in the context of the
activity leading towards concrete legislation. Unless
transmitted to the other chamber, a bill prepared by either
house cannot possibly become law. In other words, the first
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affirmative, efficacious step, the operative act as it were,


leading to actual enactment of a statute, is the
transmission of a bill from one house to the other for action
by the latter. This is the origination that is spoken of in the
Constitution in its Article VI, Section 24, in reference to
appropriation, revenue, or tariff bills, etc.
It may be that in the Senate, revenue or tax measures
are discussed, even drafted, and this before a similar
activity takes place in the House. This is of no moment, so
long as those measures or bills remain in the Senate and
are not sent over to the House. There is no origination of
revenue or tax measures by the Senate in this case.
However, once the House completes the drawing up of a
similar tax measure in accordance with the prescribed
procedure, even if this is done subsequent to the Senate’s
own measure—indeed, even if this be inspired by
information that a measure of the same nature or on the
same subject has been formulated in the Senate—and after
third
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reading transmits its bill to the Senate, there is origination


by (or in) the House within the contemplation of the
Constitution.
So it is entirely possible, as intimated, that in
expectation of the receipt of a revenue or tax bill from the
House of Representatives, the Senate commences
deliberations on its own concept of such a legislative
measure. This, possibly to save time, so that when the
House bill reaches it, its thoughts and views on the matter
are already formed and even reduced to writing in the form
of a draft statute. This should not be thought illegal, as
interdicted by the Constitution. What the Constitution
prohibits is for the Senate to begin the legislative process
first, by sending its own revenue bill to the House of
Representatives for its consideration and action. This is the
initiation that is prohibited to the Senate.
But petitioners claim that this last was what in fact
happened, that the bill that went through the legislative
mill and was finally approved as R.A. No. 7716, was the
Senate version, SB 1630. This is disputed by the
respondents. They claim it was House Bill 11197 that, after
being transmitted to the Senate, was referred after first
reading to its Committee on Ways and Means; was
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reported out by said Committee; underwent second and


third readings, was sent to the bicameral conference
committee and then, after appropriate proceedings therein
culminating in extensive amendments thereof, was finally
approved by both Houses and became the Expanded VAT
Law.
On whose side does the truth lie? If it is not possible to
make that determination from the pleadings and records
before this Court, shall it require evidence to be presented?
No, on both law and principle. The Court will reject a case
where the legal issues raised, whatever they may be,
depend for their resolution on still unsettled questions of
fact. Petitioners may not, by raising what are concededly
novel and weighty constitutional questions, compel the
Court to assume the role of a trier of facts. It is on the
contrary their obligation, before raising those questions to
this Court, to see to it that all issues of fact are settled in
accordance with the procedures laid down by law for proof
of facts. Failing this, petitioners would have only
themselves to blame for a peremptory dismissal.
Now, what is really proven about what happened to HB
11197 after it was transmitted to the Senate? It seems to
be admitted on
693

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Tolentino vs. Secretary of Finance

all sides that after going through first reading, HB 11197


was referred to the Committee on Ways and Means chaired
by Senator Ernesto Herrera.
It is however surmised that after this initial step, HB
11197 was never afterwards deliberated on in the Senate,
that it was there given nothing more than a “passing
glance,” and that it never went through a proper second
and third reading. There is no competent proof to
substantiate this claim. What is certain is that on February
7, 1994, the Senate Committee on Ways and Means
submitted its Report (No. 349) stating that HB 11197 was
considered, and recommending that SB 1630 be approved
“in substitution of1 S.B. No. 1129, taking into consideration
P.S. Res. No. 734 and H.B. No. 11197.” This Report made
known to the Senate, and clearly indicates, that H.B. No.
11197 was indeed deliberated on by the Committee; in
truth, as Senator Herrera pointed out, the BCC later
“agreed to adopt (a broader coverage of the VAT) which is
closely adhering to the Senate version ** ** with some new
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provisions or amendments.” The plain implication is that


the Senate Committee had indeed discussed HB 11197 in
comparison with the inconsistent parts of SB 1129 and
afterwards proposed amendments to the former in the form
of a new bill (No. 1630) more closely akin to the Senate bill
(No. 1129).
And it is as reasonable to suppose as not that later,
during the second and third readings on March 24, 1994,
the Senators, assembled as a body, had before them copies
of HB 11197 and SB 1129, as well as of the Committee’s
new “SB 1630” that had been recommended for their
approval, or at the very least were otherwise perfectly
aware that they were considering the particular provisions
of these bills. That there was such a deliberation in the
Senate on HB 11197 in light of inconsistent portions of SB
1630, may further be necessarily inferred from the request,
made by the Senate on the same day, March 24, 1994, for
the convocation of a bicameral conference committee to
reconcile “the disagreeing provisions of said bill (SB 1630)
and House Bill No. 11197,” a

________________

1 Resolution “Urging the Senate Committee on Ways and Means to


Study the Proposal to Exempt Local Movie Producers from the Payment of
the Value-Added Tax as an Incentive to the Production of Quality and
Wholesome Filipino Movies Whenever they Feature an All-Filipino Cast of
Actors and Actresses.”

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request that could not have been made had not the
Senators more or less closely examined the provisions of
HB 11197 and compared them with those of the
counterpart Senate measures.
Were the proceedings before the bicameral conference
committee fatally flawed? The affirmative is suggested
because the committee allegedly overlooked or ignored the
fact that SB 1630 could not validly originate in the Senate,
and that HB 11197 and SB 1630 never properly passed
both chambers. The untenability of these contentions has
already been demonstrated. Now, demonstration of the
indefensibility of other arguments purporting to establish
the impropriety of the BCC proceedings will be attempted.

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There is the argument, for instance, that the conference


committee never used HB 11197 even as “frame of
reference” because it does not appear that the suggestion
therefor (made by House Panel Chairman Exequiel Javier
at the bicameral conference committee’s meeting on April
19, 1994, with the concurrence of Senator Maceda) was
ever resolved, the minutes being regrettably vague as to
what occurred after that suggestion was made. It is,
however, as reasonable to assume that it was, as it was not,
given the vagueness of the minutes already alluded to. In
fact, a reading of the BCC Report persuasively
demonstrates that HB 11197 was not only utilized as a
“frame of reference” but actually discussed and deliberated
on. 2
Said BCC Report pertinently states:

“CONFERENCE COMMITTEE REPORT

The Conference Committee on the disagreeing provisions of House


Bill No. 11197, entitled:
AN ACT RESTRUCTURING THE VALUE ADDED TAX (VAT)
SYSTEM TO WIDEN ITS TAX BASE AND ENHANCE ITS
ADMINISTRATION, AMENDING FOR THESE PURPOSES
SECTIONS 99, 100, 102, 103, 104, 105, 106, 107, 108 AND 110
OF TITLE IV, 112, 115 AND 116 OF TITLE V, AND 236, 237,
AND 238 OF TITLE IX, AND REPEALING SECTIONS 113SD
AND 114 OF TITLE V, ALL OF THE NATIONAL INTERNAL
REVENUE CODE, AS AMENDED

________________

2 Italics supplied.

695

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Tolentino vs. Secretary of Finance

and Senate Bill No. 1630 entitled:


AN ACT RESTRUCTURING THE VALUE ADDED TAX (VAT)
SYSTEM TO WIDEN ITS TAX BASE AND ENHANCE ITS
ADMINISTRATION, AMENDING FOR THESE PURPOSES
SECTIONS 99, 100, 102, 103, 104, 105, 106, 107, 108 AND 110
OF TITLE IV, 112, 115, 117 AND 121 OF TITLE V, AND 236,
237, AND 238 OF TITLE IX, AND REPEALING SECTIONS 113,
114, 116, 119 AND 120 OF TITLE V, ALL OF THE NATIONAL
INTERNAL REVENUE CODE, AS AMENDED AND FOR
OTHER PURPOSES

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having met, after full and free conference, has agreed to


recommend and do hereby recommend to their respective Houses
that House Bill No. 11197, in consolidation with Senate Bill No.
1630, be approved in accordance with the attached copy of the bill
as reconciled and approved by the conferees.
Approved.”

The Report, it will be noted, explicitly adverts to House Bill


No. 11197, it being in fact mentioned ahead of Senate Bill
No. 1630; graphically shows the very close identity of the
subjects of both bills (indicated in their respective titles);
and clearly says that the committee met in “full and free
conference” on the “disagreeing provisions” of both bills
(obviously in an effort to reconcile them); and that
reconciliation of said “disagreeing provisions” had been
effected, the BCC having agreed that “House Bill No.
11197, in consolidation with Senate Bill No. 1630, be
approved in accordance with the attached copy of the bill as
reconciled and approved by the conferees.”
It may be concluded, in other words, that, conformably
to the procedure provided in the Constitution with which
all the Members of the bicameral conference committee
cannot but be presumed to be familiar, and no proof to the
contrary having been adduced on the point, it was the
original bill (HB 11197) which said body had considered
and deliberated on in detail, reconciled or harmonized with
SB 1630, and used as basis for drawing up the amended
version eventually reported out and submitted to both
houses of Congress.
It is further contended that the BCC was created and
convoked prematurely, that SB 1630 should first have been
sent to the House of Representatives for concurrence. It is
maintained, in
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other words, that the latter chamber should have refused


the Senate request for a bicameral conference committee to
reconcile the “disagreeing provisions” of both bills, and
should have required that SB 1630 be first transmitted to
it. This, seemingly, is nit-picking given the urgency of the
proposed legislation as certified by the President (to both
houses, in fact). Time was of the essence, according to the
President’s best judgment—as regards which absolutely no
one in either chamber of Congress took exception, general
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acceptance being on the contrary otherwise manifested—


and that judgment the Court will not now question. In light
of that urgency, what was so vital or indispensable about
such a transmittal that its absence would invalidate all
else that had been done towards enactment of the law,
completely escapes me, specially considering that the
House had immediately acceded without demur to the
request for convocation of the conference committee.
What has just been said should dispose of the argument
that the statement in the enrolled bill, that “This Act which
is a consolidation of House Bill No. 11197 and Senate Bill
No. 1630 was finally passed by the House of
Representatives and the Senate on April 27, 1994 and May
2, 1994,” necessarily signifies that there were two (2) bills
separately introduced, retaining their independent
existence until they reached the bicameral conference
committee where they were consolidated, and therefore, the
VAT law did not originate exclusively in the House having
originated in part in the Senate as SB 1630, which bill was
not embodied in but merely merged with HB 11197,
retaining its separate identity until it was joined by the
BCC with the house measure. The more logical, and fairer,
course is to construe the expression, “consolidation of
House Bill No. 11197 and Senate Bill No. 1630” in the
context of accompanying and contemporaneous statements,
i.e.: (a) the declaration in the BCC Report, supra, that the
committee met to reconcile the disagreeing provisions of
the two bills, “and after full and free conference” on the
matter, agreed and so recommended that “House Bill No.
11197, in consolidation with Senate Bill No. 1630, be
approved in accordance with the attached copy of the bill as
reconciled and approved by the conferees;” and (b) the
averment of Senator Herrera, in the Report of the Ways
and Means Committee, supra, that the committee had
actually “considered” (discussed)
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HB No. 11197 and taken it “into consideration” in


recommending that its own version of the measure (SB
1630) be the one approved.
That the Senate might have drawn up its own version of
the expanded VAT bill, contemporaneously with or even
before the House did, is of no moment. It bears repeating in
this connection that no VAT bill ever originated in the
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Senate; neither its SB 1129 or SB 1630 or any of its drafts


was ever officially transmitted to the House as an initiating
bill which, as already pointed out, is what the Constitution
forbids; it was HB 11197 that was first sent to the Senate,
underwent first reading, was referred to Committee on
Ways and Means and there discussed in relation to and in
comparison with the counterpart Senate version or
versions—the mere formulation of which was, as also
already discussed, not prohibited to it—and afterwards
considered by the Senate itself, also in connection with SB
1630, on second and third readings. HB 11197 was in the
truest sense, the originating bill.
An issue has also arisen respecting the so-called
“enrolled bill doctrine” which, it is said, whatever
sacrosanct status it might originally have enjoyed, is now
in bad odor with modern scholars on account of its imputed
rigidity and unrealism; it being also submitted that the
ruling in “Mabanag v. Lopez Vito (78 Phil. 1) and the cases
reaffirming it, is no longer good law, it 3
being based on a
provision of the Code of Civil Procedure long since stricken
from the statute books.
I would myself consider the “enrolled bill” theory as
laying down a presumption of so strong a character as to be
well nigh absolute or conclusive, fully in accord with the
familiar and fundamental philosophy of separation of
powers. The result, as far as I am concerned, is to make
discussion of the enrolled bill principle purely academic; for
as already pointed out, there is no proof worthy of the
name of any facts to justify its reexamination and, possibly,
disregard.
The other question is, what is the nature of the power
given to a bicameral conference committee of reconciling
differences

_________________

3 Giving “conclusive” character to copies of Acts of the Philippine


Commission which have been signed by its presiding officers and
secretaries.

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between, or “disagreeing provisions” in, a bill originating


from the House in relation to amendments proposed by the
Senate—whether as regards some or all of its provisions? Is
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the mode of reconciliation, subject to fixed procedure and


guidelines? What exactly can the committee do, or not do?
Can it only clarify or revise provisions found in either
Senate or House bill? Is it forbidden to propose additional
or new provisions, even on matters necessarily or
reasonably connected with or germane to items in the bills
being reconciled?
In answer, it is postulated that the reconciliation
function is quite limited. In these cases, the conference
committee should have confined itself to reconciliation of
differences or inconsistencies only by (a) restoring
provisions of HB 11197 eliminated by SB 1630, or (b)
sustaining wholly or partly the Senate amendments, or (c)
as a compromise, agreeing that neither provisions nor
amendments be carried into the final form of HB 11197 for
submission to both chambers of the legislature.
The trouble is, it is theorized, the committee
incorporated activities or transactions which were not
within the contemplation of both bills; it made additions
and deletions which did not enjoy the enlightenment of
initial committee studies; it exercised what is known as an
“ex post veto power” granted to it by no law, rule or
regulation, a power that in truth is denied to it by the rules
of both the Senate and the House. In substantiation, the
Senate rule is cited, similar to that of the House, providing
that “differences shall be settled by a conference
committee” whose report shall contain “detailed and
sufficiently explicit statement of the changes in or
amendments to the subject measure, ** (to be) signed by
the conferees;” as well as the “Jefferson’s Manual,” adopted
by the Senate as supplement to its own rules, directing
that the managers of the conference must confine
themselves to differences submitted to them; they may not
include subjects not within the disagreements even though
germane to a question in issue.”
It is significant that the limiting proviso in the relevant
rules has been construed and applied as directory, not
mandatory. During the oral argument, counsel for
petitioners admitted that the practice for decades has been
for bicameral conference committees to include such
provisions in the reconciled bill as they believed to be
germane or necessary and acceptable to both
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chambers, even if not within any of the “disagreeing


provisions,” and the reconciled bills, containing such
provisions had invariably been approved and adopted by
both houses of Congress. It is a practice, they say, that
should be stopped. But it is a practice that establishes in no
uncertain manner the prevailing concept in both houses of
Congress of the permissible and acceptable modes of
reconciliation that their conference committees may adopt,
one whose undesirability is not all that patent if not,
indeed, incapable of unquestionable demonstration. The
fact is that conference committees only take up bills which
have already been freely and fully discussed in both
chambers of the legislature, but as to which there is need of
reconciliation in view of “disagreeing provisions” between
them; and both chambers entrust the function of
reconciling the bills to their delegates at a conference
committee with full awareness, and tacit consent, that
conformably with established practice unquestioningly
observed over many years, new provisions may be included
even if not within the “disagreeing provisions” but of which,
together with other changes, they will be given detailed
and sufficiently explicit information prior to voting on the
conference committee version.
In any event, a fairly recent decision written for the
Court by Senior Associate Justice Isagani A. Cruz,
promulgated on November 11, 1993 (G.R. No. 105371, The
Philippine Judges Association, etc., et al. v. Hon. Pete
Prado, etc., et al.), should leave no doubt of the continuing
vitality of the enrolled bill doctrine and give an insight into
the nature of the reconciling function of bicameral
conference committees. In that case, a bilateral conference
committee was constituted and met to reconcile Senate Bill
No. 720 and House Bill No. 4200. It adopted a “reconciled”
measure that was submitted to and approved by both
chambers of Congress and ultimately signed into law by
the President, as R.A. No. 7354. A provision in this statute
(removing the franking privilege from the courts, among
others) was assailed as being an invalid amendment
because it was not included in the original version of either
the senate or the house bill and hence had generated no
disagreement between them which had to be reconciled.
The Court held:
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“While it is true that a conference committee is the mechanism for


compromising differences between the Senate and the House, it is
not limited in its jurisdiction to this question. Its broader function
is described thus:

A conference committee may deal generally with the subject matter or it


may be limited to resolving the precise differences between the two
houses. Even where the conference committee is not by rule limited in its
jurisdiction, legislative custom severely limits the freedom with which
new subject matter can be inserted into the conference bill. But
occasionally a conference committee produces unexpected results, results
beyond its mandate. These excursions occur even where the rules impose
strict limitations on conference committee jurisdiction. This is
symptomatic of the authoritarian power of conference committee (Davies,
Legislative Law and Process: In A Nutshell, 1987 Ed., p. 81).

It is a matter of record that the Conference Committee


Report on the bill in question was returned to and duly
approved by both the Senate and the House of
Representatives. Thereafter, the bill was enrolled with its
certification by Senate President Neptali A. Gonzales and
Speaker Ramon V. Mitra of the House of Representatives
as having been duly passed by both Houses of Congress. It
was then presented to and approved by President Corazon
C. Aquino on April 3, 1992.
Under the doctrine of separation of powers, the Court
may not inquire beyond the certification of the approval of
a bill from the presiding officers of Congress. Casco
Philippine Chemical Co. v. Gimenez (7 SCRA 347) laid
down the rule that the enrolled bill is conclusive upon the
Judiciary (except in matters that have to be entered in the
journals like the yeas and nays on the final reading of the
bill) (Mabanag v. Lopez Vito, 78 Phil. 1). The journals are
themselves also binding on the Supreme Court, as we held
in the old (but still valid) case of U.S. v. Pons (34 Phil. 729),
where we explained the reason thus:

To inquire into the veracity of the journals of the Philippine


legislature when they are, as we have said, clear and explicit,
would be to violate both the letter and spirit of the organic laws
by which the Philippine Government was brought into existence,
to invade a coordinate and independent department of the
Government, and to interfere with the legitimate powers and
functions of the Legislature. Applying these principles, we shall
decline to look into the petitioners’

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charges that an amendment was made upon the last reading of


the bill that eventually R.A. No. 7354 and that copies thereof in
its final form were not distributed among the members of each
House. Both the enrolled bill and the legislative journals certify
that the measure was duly enacted i.e., in accordance with Article
VI, Sec. 26 (2) of the Constitution. We are bound by such official
assurances from a coordinate department of the government, to
which we owe, at the very least, a becoming courtesy.”

Withal, an analysis of the changes made by the conference


committee in HB 11197 and SB 1630 by way of reconciling
their “disagreeing provisions,”—assailed by petitioners as
unauthorized or incongruous—reveals that many of the
changes related to actual “disagreeing provisions,” and that
those that might perhaps be considered as entirely new are
nevertheless necessarily or logically connected with or
germane to particular matters in the bills being reconciled.
For instance, the change made by the bicameral
conference committee (BCC) concerning amendments to
Section 99 of the National Internal Revenue Code (NIRC)—
the addition of “lessors of goods or properties and importers
of goods”—is really a reconciliation of disagreeing
provisions, for while HB 11197 mentions as among those
subject to tax, “one who sells, barters, or exchanges goods
or properties and any person who leases personal
properties,” SB 1630 does not. The change also merely
clarifies the provision by providing that the contemplated
taxpayers includes “importers.” The revision as regards the
amendment to Section 100, NIRC, is also simple
reconciliation, being nothing more than the adoption by the
BCC of the provision in HB 11197 governing the sale of
gold to Bangko Sentral, in contrast to SB 1630 containing
no such provision. Similarly, only simple reconciliation was
involved as regards approval by the BCC of a provision
declaring as not exempt, the sale of real properties
primarily held for sale to customers or held for lease in the
ordinary course of trade or business, which provision is
found in HB 11197 but not in SB 1630; as regards the
adoption by the BCC of a provision on life insurance
business, contained in SB 1630 but not found in HB 11197;
as regards adoption by the BCC of the provision in SB 1630
for deferment of tax on certain goods and services for no
longer than 3 years, as to which there was no counterpart
provision in SB 11197; and as regards the fixing of a
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period for the adoption of implementing rules, a period


being prescribed in SB 1630 and none in HB 11197.
In respect of other revisions, it would seem that
questions logically arose in the course of the discussion of
specific “disagreeing provisions” to which answers were
given which, because believed acceptable to both houses of
Congress, were placed in the BCC draft. For example,
during consideration of radio and television time (Sec. 100,
NIRC) dealt with in both House and Senate bills, the
question apparently came up, the relevance of which is
apparent on its face, relative to satellite transmission and
cable television time. Hence, a provision in the BCC bill on
the matter. Again, while deliberating on the definition of
goods or properties in relation to the provision subjecting
sales thereof to tax, a question apparently arose, logically
relevant, about real properties intended to be sold by a
person in economic difficulties, or because he wishes to buy
a car, i.e., not as part of a business, the BCC evidently
resolved to clarify the matter by excluding from the tax,
“real properties held primarily for sale to customers or held
for lease in the ordinary course of business.” And in the
course of consideration of the term, sale or exchange of
services (Sec. 102, NIRC), the inquiry most probably was
posed as to whether the term should be understood as
including other services: e.g., services of lessors of property
whether real or personal, of warehousemen, of keepers of
resthouses, pension houses, inns, resorts, or of common
carriers, etc., and presumably the BCC resolved to clarify
the matter by including the services just mentioned.
Surely, changes of this nature are obviously to be expected
in proceedings before bicameral conference committees and
may even be considered grist for their mill, given the
history of such BCCs and their general practice here and
abroad.
In any case, all the changes and revisions, and deletions,
made by the conference committee were all subsequently
considered by and approved by both the Senate and the
House, meeting and voting separately. It is an
unacceptable theorization, to repeat, that when the BCC
report and its proposed bill were submitted to the Senate
and the House, the members thereof did not bother to read,
or what is worse, having read did not understand, what
was before them, or did not realize that there were new
provisions in the reconciled version unrelated to any

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“disagreeing provisions,” or that said new provisions or


revisions were effectively concealed
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from them.
Moreover, it certainly was entirely within the power and
prerogative of either legislative chamber to reject the BCC
bill and require the organization of a new bicameral
conference committee. That this option was not exercised
by either house only proves that the BCC measure was
found to be acceptable as in fact it was approved and
adopted by both chambers.
I vote to DISMISS the petitions for lack of merit.

SEPARATE OPINION

CRUZ, J.:

It is a curious and almost incredible fact that at the


hearing of these cases on July 7, 1994, the lawyers who
argued for the petitioners—two of them former presidents
of the Senate and the third also a member of that body—all
asked this Court to look into the internal operations of
their Chamber and correct the irregularities they claimed
had been committed there as well as in the House of
Representatives and in the bicameral conference
committee.
While a member of the legislature would normally resist
such intervention and invoke the doctrine of separation of
powers to protect Congress from what he would call judicial
intrusion, these counsel practically implored the Court to
examine the questioned proceedings and to this end go
beyond the journals of each House, scrutinize the minutes
of the committee, and investigate all other matters relating
to the passage of the bill (or bills) that eventually became
R.A. No. 7716.
In effect, the petitioners would have us disregard the
time-honored inhibitions laid down by the Court upon itself
in the landmark case of U.S. v. Pons (34 Phil. 725), where it
refused to consider extraneous evidence to disprove the
recitals in the journals of the Philippine Legislature that it
had adjourned sine die at midnight of February 28, 1914.
Although it was generally known then that the special
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session had actually exceeded the deadline fixed by the


Governor-General in his proclamation, the Court chose to
be guided solely by the legislative journals, holding
significantly as follows:
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* * * From their very nature and object, the records of the


legislature are as important as those of the judiciary, and to
inquire into the veracity of the journals of the Philippine Legis-
lature, when they are, as we have said, clear and explicit, would
be to violate both the letter and the spirit of the organic laws by
which the Philippine Government was brought into existence, to
invade a coordinate and independent department of the Govern-
ment, and to interfere with the legitimate powers and functions of
the Legislature. But counsel in his argument says that the public
knows that the Assembly’s clock was stopped on February 28,
1914, at midnight and left so until the determination of the
discussion of all pending matters. Or, in other words, the hands of
the clock were stayed in order to enable the Assembly to effect an
adjournment apparently within the fixed time by the Governor’s
proclamation for the expiration of the special session, in direct
violation of the Act of Congress of July 1, 1902. If the clock was, in
fact, stopped, as here suggested, “the resultant evil might be
slight as compared with that of altering the probative force and
character of legislative records, and making the proof of
legislative action depend upon uncertain oral evidence, liable to
loss by death or absence, and so imperfect on account of the
treachery of memory.”
* * * The journals say that the Legislature adjourned at 12
midnight on February 28, 1914. This settles the question, and the
court did not err in declining to go beyond the journals.

As one who has always respected the rationale of the


separation of powers, I realize only too well the serious
implications of the relaxation of the doctrine except only for
the weightiest of reasons. The lowering of the barriers now
dividing the three major branches of the government could
lead to invidious incursions by one department into the
exclusive domains of the other departments to the
detriment of the proper discharge of the functions assigned
to each of them by the Constitution.
Still, while acknowledging the value of tradition and the
reasons for judicial non-interference announced in Pons, I
am not disinclined to take a second look at the ruling from
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a more pragmatic viewpoint and to tear down, if we must,


the iron curtain it has hung, perhaps improvidently,
around the proceedings of the legislature.
I am persuaded even now that where a specific
procedure is fixed by the Constitution itself, it should not
suffice for Congress to simply say that the rules have been
observed and flatly consider the matter closed. It does not
have to be as final as that.
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I would imagine that the judiciary, and particularly this


Court, should be able to verify that statement and
determine for itself, through the exercise of its own powers,
if the Constitution has, indeed, been obeyed.
In fact, the Court has already said that the question of
whether certain procedural rules have been followed is
justiciable rather than political because what is involved is
the legality and not the wisdom of the act in question. So
we ruled in Sanidad v. Commission on Elections (73 SCRA
333) on the amendment of the Constitution; in Daza v.
Singson (180 SCRA 496) on the composition of the
Commission on Appointments; and in the earlier case of
Tañada v. Cuenco (103 Phil. 1051) on the organization of
the Senate Electoral Tribunal, among several other cases.
By the same token, the ascertainment of whether a bill
underwent the obligatory three readings in both Houses of
Congress should not be considered an invasion of the
territory of the legislature as this would not involve an
inquiry into its discretion in approving the measure but
only the manner in which the measure was enacted.
These views may upset the conservatives among us who
are most comfortable when they allow themselves to be
petrified by precedents instead of venturing into uncharted
waters. To be sure, there is much to be said of the wisdom
of the past expressed by vanished judges talking to the
future. Via trita est tuttisima. Except when there is a need
to revise them because of an altered situation or an
emergent idea, precedents should tell us that, indeed, the
trodden path is the safest path.
It could be that the altered situation has arrived to
welcome the emergent idea. The jurisdiction of this Court
has been expanded by the Constitution, to possibly include
the review the petitioners would have us make of the
congressional proceedings being questioned. Perhaps it is
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also time to declare that the activities of Congress can no


longer be smoke-screened in the inviolate recitals of its
journals to prevent examination of its sacrosanct records in
the name of the separation of powers.
But then again, perhaps all this is not yet necessary at
this time and all these observations are but wishful
musings for a more activist judiciary. For I find that this is
not even necessary, at least for me, to leave the trodden
path in the search for new
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adventures in the byways of the law. The answer we seek,


as I see it, is not far afield. It seems to me that it can be
found through a study of the enrolled bill alone and that we
do not have to go beyond that measure to ascertain if R.A.
No. 7716 has been validly enacted.
It is settled in this jurisdiction that in case of conflict
between the enrolled bill and the legislative journals, it is
the former that should prevail except only as to matters
that the Constitution requires to be entered in the journals.
(Mabanag v. Lopez Vito, 78 Phil. 1). These are the yeas and
nays on the final reading of a bill or on any question at the
request of at least one-fifth of the members of the House
(Constitution, Art. VI, Sec. 16 [4]), the objections of the
President to a vetoed bill or item (Ibid, Sec. 27 [1]), and the
names of the members voting for or against the overriding
of his veto (Id. Section 27 [1]). The origin of a bill is not
specifically required by the Constitution to be entered in
the journals. Hence, on this particular matter, it is the
recitals in the enrolled bill and not in the journals that
must control.
Article VI, Section 24, of the Constitution provides:

Sec. 24. All appropriation, revenue or tariff bills, bills authorizing


increase of the public debt, bills of local application, and private
bills shall originate exclusively in the House of Representatives,
but the Senate may propose or concur with amendments.

The enrolled bill submitted to and later approved by the


President of the Philippines as R.A. No. 7716 was signed by
the President of the Senate and the Speaker of the House
of Representatives. It carried the following certification
over the signatures of the Secretary of the Senate and the
Acting Secretary of the House of Representatives:

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This Act which is a consolidation of House Bill No. 11197 and


Senate Bill No. 1630 was finally passed by the House of
Representatives and the Senate on April 27, 1994, and May 2,
1994.

Let us turn to Webster for the meaning of certain words:


To “originate” is “to bring into being; to create something
(original); to invent; begin; start.” The word “exclusively”
means “excluding all others” and is derived from the word
“exclusive,” meaning “not shared or divided; sole; single.”
Applying these
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meanings, I would read Section 24 as saying that the bills


mentioned therein must be brought into being, or created,
or invented, or begun or started, only or singly or by no
other body than the House of Representatives.
According to the certification, R.A. No . 7716 “is a
consolidation of House Bill No. 11197 and Senate Bill No.
1630.” Again giving the words used their natural and
ordinary sense conformably to an accepted canon of
construction, I would read the word “consolidation” as a
“combination or merger” and derived from the word
“consolidate,” meaning “to combine into one; merge; unite.”
The two bills were separately introduced in their
respective Chambers. Both retained their independent
existence until they reached the bicameral conference
committee where they were consolidated. It was this
consolidated measure that was finally passed by Congress
and submitted to the President of the Philippines for his
approval.
House Bill No. 11197 originated in the House of
Representatives but this was not the bill that eventually
became R.A. No. 7716. The measure that was signed into
law by President Ramos was the consolidation of that bill
and another bill, viz., Senate Bill No. 1630, which was
introduced in the Senate. The resultant enrolled bill thus
did not originate exclusively in the House of
Representatives. The enrolled bill itself says that part of it
(and it does not matter to what extent) originated in the
Senate.
It would have been different if the only participation of
the Senate was in the amendment of the measure that was
originally proposed in the House of Representatives. But
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this was not the case. The participation of the Senate was
not in proposing or concurring with amendments that
would have been incorporated in House Bill No. 11197. Its
participation was in originating its own Senate Bill No.
1630, which was not embodied in but merged with House
Bill No. 11197.
Senate Bill No. 1630 was not even an amendment by
substitution, assuming this was permissible. To
“substitute” means “to take the place of; to put or use in
place of another.” Senate Bill No. 1630 did not, upon its
approval, replace (and thus eliminate) House Bill No.
11197. Both bills retained their separate identities until
they were joined or united into what became the enrolled
bill and ultimately R.A. No. 7716.
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The certification in the enrolled bill says it all. It is clear


that R.A. No. 7716 did not originate exclusively in the
House of Representatives.
To go back to my earlier observations, this conclusion
does not require the reversal of U.S. vs. Pons and an
inquiry by this Court into the proceedings of the legislature
beyond the recitals of its journals. All we need to do is
consider the certification in the enrolled bill and, without
entering the precincts of Congress, declare that by its own
admission it has, indeed, not complied with the
Constitution.
While this Court respects the prerogatives of the other
departments, it will not hesitate to rise to its higher duty to
require from them, if they go astray, full and strict
compliance with the fundamental law. Our fidelity to it
must be total. There is no loftier principle in our democracy
than the supremacy of the Constitution, to which all must
submit.
I vote to invalidate R.A. No. 7716 for violation of Article
VI, Sec. 24, of the Constitution.

SEPARATE OPINION

PADILLA, J.:

I
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The original VAT law and the expanded VAT law


1
In Kapatiran v. Tan, where the ponente was the writer of
this Separate Opinion, a unanimous Supreme Court en
banc upheld the validity of the original VAT law (Executive
Order No. 273, approved on 25 July 1987). It will, in my
view, be pointless at this time to re-open arguments
advanced in said case as to why said VAT law was invalid,
and it will be equally redundant to re-state the principles
laid down by the Court in the same case affirming the
validity of the VAT law as a tax measure. And yet, the
same arguments are, in effect, marshalled against the
merits and substance of the expanded VAT law (Rep. Act
No. 7716, approved on 5 May 1994). The same Supreme
Court decision should

_________________

1 G.R. No. 81311, 30 June 1988, 163 SCRA 371.

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therefore dispose, in the main, of such arguments, for the


expanded VAT law is predicated basically on the same
principles as the original VAT law, except that now the tax
base of the VAT imposition has been expanded or
broadened.
It only needs to be stated—what actually should be
obvious—that a tax measure, like the expanded VAT law
(Republic Act No. 7716), is enacted by Congress and
approved by the President in the exercise of the State’s
power to tax, which is an attribute of sovereignty. And
while the power to tax, if exercised without limit, is a
power to destroy, and should, therefore, not be allowed in
such form, it has to be equally recognized that the power to
tax is an essential right of government. Without taxes,
basic services to the people can come to a halt; economic
progress will be stunted, and, in the long run, the people
will suffer the pains of stagnation and retrogression.
Consequently, upon careful deliberation, I have no
difficulty in reaching the conclusion that the expanded
VAT law comes within the legitimate power of the state to
tax. And as I had occasion to previously state:

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“Constitutional Law, to begin with, is concerned with power not


political convenience, wisdom, exigency, or even necessity.
Neither the Executive nor the Legislative (Commission on
Appointments)
2
can create power where the Constitution confers
none.”

Likewise, in the first VAT case, I said:

“In any event, if petitioners seriously believe that the adoption


and continued application of the VAT are prejudicial to the
general welfare or the interests of the majority of the people, they
should seek recourse and relief from the political branches of the
government. The Court, following the time-honored doctrine of
separation of powers, cannot substitute its judgment for that of
the President (and Congress) as to 3the wisdom, justice and
advisability of the adoption of the VAT.”

________________

2 Bautista v. Salonga, G.R. No. 86439, 13 April 1989, 172 SCRA 160.
3 Kapatiran, supra at 385.

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This Court should not, as a rule, concern itself with


questions of policy, much less, economic policy. That is
better left to the two (2) political branches of government.
That the expanded VAT law is unwise, unpopular and even
anti-poor, among other things said against it, are
arguments and considerations within the realm of policy-
debate, which only Congress and the Executive have the
authority to decisively confront, alleviate, remedy and
resolve.

II
The procedure followed in the approval of Rep. Act No.
7716 Petitioners however posit that the present case raises
a far-reaching constitutional question which the Court is
duty-bound to decide
4
under its expanded jurisdiction in the
1987 Constitution. Petitioners more specifically question
and impugn the manner by which the expanded VAT law
(Rep. Act No. 7716) was approved by Congress. They
contend that it was approved in violation of the
Constitution from which fact it follows, as a consequence,
that the law is null and void. Main reliance of the

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petitioners in their assault is Section 24, Art. VI of the


Constitution which provides:

“Sec. 24. All appropriation, revenue or tariff bills, bills


authorizing increase of the public debt, bill of local application,
and private bills shall originate exclusively in the House of
Representatives, but the Senate may propose or concur with
amendments.”

While it should be admitted at the outset that there was no


rigorous and strict adherence to the literal command of the
above provision, it may however be said, after careful
reflection, that there was substantial compliance with the
provision.
There is no question that House Bill No. 11197
expanding the VAT law originated from the House of
Representatives. It is undeniably a House measure. On the
other hand, Senate Bill No. 1129, also expanding the VAT
law, originated from the Senate. It

________________

4 Sec. 1, Art. VIII.

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is undeniably a Senate measure which, in point of time,


actually antedated House Bill No. 11197.
But it is of record that when House Bill No. 11197 was,
after approval by the House, sent to the Senate, it was
referred to, and considered by the Senate Committee on
Ways and Means (after first reading) together with Senate
Bill No. 1129, and the Committee came out with Senate
Bill No. 1630 in substitution of Senate Bill No. 1129 but
after expressly taking into consideration House Bill No.
11197.
Since the Senate is, under the above-quoted
constitutional provision, empowered to concur with a
revenue measure exclusively originating from the House, or
to propose amendments thereto, to the extent of proposing
amendments by SUBSTITUTION to the House measure,
the approval by the Senate of Senate Bill No. 1630, after it
had considered House Bill No. 11197, may be taken, in my
view, as an AMENDMENT BY SUBSTITUTION by the
Senate not only of Senate Bill No. 1129 but of House Bill

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No. 11197 as well which, it must be remembered,


originated exclusively from the House.
But then, in recognition of the fact that House Bill No.
11197 which originated exclusively from the House and
Senate Bill No. 1630 contained conflicting provisions, both
bills (House Bill No. 11197 and Senate Bill No. 1630) were
referred to the Bicameral Conference Committee for joint
consideration with a view to reconciling their conflicting
provisions.
The Conference Committee came out eventually with a
Conference Committee Bill which was submitted to both
chambers of Congress (the Senate and the House). The
Conference Committee reported out a bill consolidating
provisions in House Bill No. 11197 and Senate Bill No.
1630. What transpired in both chambers after the
Conference Committee Report was submitted to them is
not clear from the records in this case. What is clear
however is that both chambers voted separately on the bill
reported out by the Conference Committee and both
chambers approved the bill of the Conference Committee.
To me then, what should really be important is that both
chambers of Congress approved the bill reported out by the
Conference Committee. In my considered view, the act of
both chambers of Congress in approving the Conference
Committee bill, should put an end to any inquiry by this
Court as to how the
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bill came about. What is more, such separate approvals


CURED whatever constitutional infirmities may have
arisen in the procedures leading to such approvals. For, if
such infirmities were serious enough to impugn the very
validity of the measure itself, there would have been an
objection or objections from members of both chambers to
the approval. The Court has been shown no such objection
on record in both chambers.
Petitioners contend that there were violations of Sec. 26
paragraph 2, Article VI of the Constitution which provides:

“SEC. 26. x x x
(2) No bill passed by either House shall become a law unless it
has passed three readings on separate days, and printed copies
thereof in its final form have been distributed to its Members
three days before its passage, except when the President certifies

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to the necessity of its immediate enactment to meet a public


calamity or emergency. Upon the last reading of a bill, no
amendment thereto shall be allowed, and the vote thereon shall
be taken immediately thereafter, and the yeas and nays entered
in the Journal.”

in that, when Senate Bill No. 1630 (the Senate counterpart


of House Bill No. 11197) was approved by the Senate, after
it had been reported out by the Senate Committee on Ways
and Means, the bill went through second and third
readings on the same day (not separate days) and printed
copies thereof in its final form were not distributed to the
members of the Senate at least three (3) days before its
passage by the Senate. But we are told by the respondents
that the reason for this “short cut” was that the President
had certified to the necessity of the bill’s immediate
enactment to meet an emergency—a certification that, by
leave of the same constitutional provision, dispensed with
the second and third readings on separate days and the
printed form at least three (3) days before its passage.
We have here then a situation where the President did
certify to the necessity of Senate Bill No. 1630’s immediate
enactment to meet an emergency and the Senate responded
accordingly. While I would be the last to say that this
Court cannot review the exercise of such power by the
President in appropriate cases ripe for judicial review, I am
not prepared however to say that the President gravely
abused his discretion in the exercise of such power as to
require that this Court overturn his action. We have
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Tolentino vs. Secretary of Finance

been shown no fact or circumstance which would impugn


the judgment of the President, concurred in by the Senate,
that there was an emergency that required the immediate
enactment of Senate Bill No. 1630. On the other hand, a
becoming respect for a co-equal and coordinate department
of government points that weight and credibility be given
to such Presidential judgment.
The authority or power of the Conference Committee to
make insertions in and deletions from the bills referred to
it, namely, House Bill No. 11197 and Senate Bill No. 1630
is likewise assailed by petitioners. Again, what appears
important here is that both chambers approved and ratified
the bill as reported out by the Conference Committee (with
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the reported insertions and deletions). This is perhaps


attributable to the known legislative practice of allowing a
Conference Committee to make insertions in and deletions
from bills referred to it for consideration, as long as they
are germane to the subject matter of the bills under
consideration. Besides, when the Conference Committee
made the insertions and deletions complained of by
petitioners, was it not actually performing the task
assigned to it of reconciling conflicting provisions in House
Bill No. 11197 and Senate Bill No. 1630?
This Court impliedly if not expressly recognized the fact
of such legislative practice in Philippine 5
Judges
Association, etc. vs. Hon. Peter Prado, etc.. In said case, we
stated thus:

“The petitioners also invoke Sec. 74 of the Rules of the House of


Representatives, requiring that amendment to any bill when the
House and the Senate shall have differences thereon may be
settled by a conference committee of both chambers. They stress
that Sec. 35 was never a subject of any disagreement between
both Houses and so the second paragraph could not have been
validly added as an amendment.
These arguments are unacceptable.
While it is true that a conference committee is the mechanism
for compromising differences between the Senate and the House,
it is not limited in its jurisdiction to this question. Its broader
function is described thus:

‘A conference committee may deal generally with the subject matter or it


may be limited to resolving the precise differences

_______________

5 G.R. No. 103371, 11 November 1993.

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Tolentino vs. Secretary of Finance

between the two houses. Even where the conference committee is not by
rule limited in its jurisdiction, legislative custom severely limits the
freedom with which new subject matter can be inserted into the
conference bill. But occasionally a conference committee produces
unexpected results, results beyond its mandate. These excursions occur
even where the rules impose strict limitations on conference committee
jurisdiction. This is symptomatic of the authoritarian power of conference
committee (Davies, Legislative Law and Process: In A Nutshell, 1986 Ed.,
p. 81).’

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It is a matter of record that the Conference Committee Report


on the bill in question was returned to and duly approved by both
the Senate and the House of Representatives. Thereafter, the bill
was enrolled with its certification by Senate President Neptali A.
Gonzales and Speaker Ramon V. Mitra of the House of
Representatives as having been duly passed by both Houses of
Congress. It was then presented to and approved by President
Corazon C. Aquino on April 3, 1992.”

It would seem that if corrective measures are in order to


clip the powers of the Conference Committee, the remedy
should come from either or both chambers of Congress, not
from this Court, under the time-honored doctrine of
separation of powers.
Finally, as certified by the Secretary of the Senate and
the Secretary General of the House of Representatives—

“This Act (Rep. Act No. 7716) is a consolidation of House Bill No.
11197 and Senate Bill No. 1630 (w)as finally passed by the House
of Representatives and the Senate on April 27, 1994 and May 2,
1994 respectively.”

Under the long-accepted doctrine of the “enrolled bill,” the


Court in deference to a co-equal and coordinate branch of
government is held to a recognition of Rep. Act No. 7716 as
a law validly enacted by Congress and, thereafter,
approved by the President on 5 May 1994. Again, we quote
from our recent decision in Philippine Judges Association,
supra:

“Under the doctrine of separation of powers, the Court may not


inquire beyond the certification of the approval of a bill from the
presiding officers of Congress. Casco Philippine Chemical Co. v.
Gimenez6

_______________

6 7 SCRA 347.

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Tolentino vs. Secretary of Finance

laid down the rule that the enrolled bill is conclusive upon the
Judiciary (except in matters that have to be entered in the7
journals like the yeas and nays on the final reading of the bill).
The journals are themselves also binding on the Supreme Court,

8
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8
as we held in the old (but still valid) case of U.S. vs. Pons, where
we explained the reason thus:

‘To inquire into the veracity of the journals of the Philippine legislature
when they are, as we have said, clear and explicit, would be to violate
both the letter and spirit of the organic laws by which the Philippine
Government was brought into existence, to invade a coordinate and
independent department of the Government, and to interfere with the
legitimate powers and functions of the Legislature.’

Applying these principles, we shall decline to look into the


petitioners’ charges that an amendment was made upon the last
reading of the bill that eventually became R.A. No. 7354 and that
copies thereof in its final form were not distributed among the
members of each House. Both the enrolled bill and the legislative
journals certify that the measure was duly enacted i.e., in
accordance with Article VI, Sec. 26(2) of the Constitution. We are
bound by such official assurances from a coordinate department of
the government, to which we owe, at the very least, a becoming
courtesy.”

III

Press Freedom and Religious Freedom and Rep. Act No.


7716

The validity of the passage of Rep. Act No. 7716


notwithstanding, certain provisions of the law have to be
examined separately and carefully.
Rep. Act No. 7716 in imposing a value-added tax on
circulation income of newspapers and similar publications
and on income9
derived from publishing advertisements in
newspapers, to my mind, violates Sec. 4, Art. III of the
Constitution. Indeed, even the Executive Department has
tried to cure this defect by the issuance of BIR Regulation
No. 11-94 precluding implementation of the tax in this
area. It should be clear, however, that the BIR

_______________

7 Mabanag v. Lopez Vito, 78 Phil. 1.


8 34 Phil. 729.
9 Executive Order No. 273, in Sec. 103 (f), had exempted this kind of
income from the VAT. Rep. Act. No. 7716 removed the exemption.

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Tolentino vs. Secretary of Finance

regulation cannot amend the law (Rep. Act No. 7716). Only
legislation (as distinguished from administration
regulation) can amend an existing law.
Freedom of the press was virtually unknown in the
Philippines before 1900. In fact, a prime cause of the
revolution against Spain at the turn of the 19th century
was the repression of the freedom of speech and expression
and of the press. No less than our national hero, Dr. Jose P.
Rizal, in “Filipinas Despues de Cien Anos” (The Philippines
a Century Hence) describing the reforms sine quibus non
which the Filipinos were insisting upon, stated: “The
minister x x x who wants his reforms to be reforms, must 10
begin by declaring the press in the Philippines free x x x.”
Press freedom in the Philippines has met repressions,
most notable of which was the closure of almost all forms of
existing mass media upon the imposition of martial law on
21 September 1972.
Section 4, Art. III of the Constitution maybe traced to
the United States Federal Constitution. The guarantee of
freedom of expression was planted in the Philippines by
President McKinley in the Magna Carta of Philippine
Liberty, Instructions to the Second Philippine Commission
on 7 April 1900.
The present constitutional provision which reads:

“Sec. 4. No law shall be passed abridging the freedom of speech, of


expression, or of the press, or the right of the people peaceably to
assemble and petition the government for redress of grievances.”

is essentially the same as that guaranteed in the U.S.


Federal Constitution, for which reason, American case law
giving judicial expression as to its meaning is highly
persuasive in the Philippines.
The plain words of the provision reveal the clear
intention that no prior restraint can be imposed on the
exercise of free speech and expression if they are to remain
effective and meaningful.
The U.S. Supreme Court11in the leading case of Grosjean
v. American Press Co., Inc. declared a statute imposing a
gross

________________

10 United States v. Bustos, 37 Phil. 731.


11 297 U.S. 233.

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Tolentino vs. Secretary of Finance

receipts license tax of 2% on circulation and advertising


income of newspaper publishers as constituting a prior
restraint which is contrary to the guarantee of freedom of
the press. 12
In Bantam Books, Inc. v. Sullivan, the U.S. Supreme
Court stated: “Any system of prior restraint of expression
comes to this Court bearing a heavy presumption against
its constitutionality.” In this jurisdiction, prior restraint on
the exercise of free expression can be justified only on the
ground that there is a clear and present danger of13 a
substantive evil which the State has the right to prevent.
In the present case, the tax imposed on circulation and
advertising income of newspaper publishers is in the
nature of a prior restraint on circulation and free
expression and, absent a clear showing that the requisite
for prior restraint is present, the constitutional flaw in the
law is at once apparent and should not be allowed to
proliferate.
Similarly, the imposition of the VAT on the sale and
distribution of religious articles must be struck down for
being contrary to Sec. 5, Art. III of the Constitution which
provides:

“Sec. 5. No law shall be made respecting an establishment of


religion, or prohibiting the free exercise thereof. The free exercise
and enjoyment of religious profession and worship, without
discrimination or preference, shall forever be allowed. No
religious test shall be required for the exercise of civil or political
rights.”

That such a tax on the sale and distribution of religious


articles is unconstitutional, has been long settled in
American Bible Society, supra.
Insofar, therefore, as Rep. Act No. 7716 imposes a value-
added tax on the exercise of the above-discussed two (2)
basic constitutional rights, Rep. Act No. 7716 should be
declared unconstitutional and of no legal force and effect.

IV
Petitions of CREBA and PAL and Rep. Act No. 7716

_______________

12 372 U.S. 58.


13 American Bible Society v. City of Manila, 101 Phil. 386.

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Tolentino vs. Secretary of Finance

The Chamber of Real Estate and Builder’s Association, Inc.


(CREBA) filed its own petition (GR No. 11574) arguing that
the provisions of Rep. Act No. 7716 imposing a 10% value-
added tax on the gross selling price or gross value in money
of every sale, barter or exchange of goods or properties
(Section 2) and a 10% value-added tax on gross receipts
derived from the sale or exchange of services, including the
use or lease of properties (Section 3), violate the equal
protection, due process and non-impairment provisions of
the Constitution as well as the rule that taxation should be
uniform, equitable and progressive.
The issue of whether or not the value-added tax is
uniform, equitable and progressive has been settled in
Kapatiran.
CREBA which specifically assails the 10% value-added
tax on the gross selling price of real properties, fails to
distinguish between a sale of real properties primarily held
for sale to customers or held for lease in the ordinary
course of trade or business and isolated sales by individual
real property owners (Sec. 103[s]). That those engaged in
the business of real estate development realize great profits
is of common knowledge and need not be discussed at
length here. The qualification in the law that the 10% VAT
covers only sales of real property primarily held for sale to
customers, i.e. for trade or business thus takes into
consideration a taxpayer’s capacity to pay. There is no
showing that the consequent distinction in real estate sales
is arbitrary and in violation of the equal protection clause
of the Constitution. The inherent power to tax of the State,
which is vested in the legislature, includes the power to
determine whom or what to tax, as well as how much to
tax. In the absence of a clear showing that the tax violates
the due process and equal protection clauses of the
Constitution, this Court, in keeping with the doctrine of
separation of powers, has to defer to the discretion and
judgment of Congress on this point.
Philippine Airlines (PAL) in a separate petition (G.R.
No. 115852) claims that its franchise under PD No. 1590
which makes it liable for a franchise tax of only 2% of gross
revenues “in lieu of all the other fees and charges of any
kind, nature or description, imposed, levied, established,
assessed or collected by any municipal, city, provincial, or

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national authority or government agency, now or in the


future,” cannot be amended by Rep. Act No. 7716 as to
make it (PAL) liable for a 10% value-added tax
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Tolentino vs. Secretary of Finance

on revenues, because Sec. 24 of PD No. 1590 provides that


PAL’s franchise can only be amended, modified or repealed
by a special law specifically for that purpose.
The validity of PAL’s above argument can be tested by
ascertaining the true intention of Congress in enacting
Rep. Act No. 7716. Sec. 4 thereof dealing with Exempt
Transactions states:

“Section 103. Exempt Transactions.—The following shall be


exempt from the value-added tax:
xxx
(q) Transactions which are exempt under special laws, except
those granted under Presidential Decrees No. 66 , 529, 972, 1491,
1590, x x x” (emphasis supplied)

The repealing clause of Rep. Act No. 7716 further reads:

“Sec. 20. Repealing clauses.—The provisions of any special law


relative to the rate of franchise taxes are hereby expressly repealed.
xxx
All other laws, orders, issuances, rules and regulations or parts
thereof inconsistent with this Act are hereby repealed, amended
or modified accordingly” (emphasis supplied)

There can be no dispute, in my mind, that the clear intent


of Congress was to modify PAL’s franchise with respect to
the taxes it has to pay. To this extent, Rep. Act No. 7716
can be considered as a special law amending PAL’s
franchise and its tax liability thereunder. That Rep. Act
No. 7716 imposes the value-added taxes on other subjects
does not make it a general law which cannot amend PD No.
1590.
To sum up: it is my considered view that Rep. Act No.
7716 (the expanded value-added tax) is a valid law, viewed
from both substantive and procedural standards, except
only insofar as it violates Secs. 4 and 5, Art. III of the
Constitution (the guarantees of freedom of expression and
the free exercise of religion). To that extent, it is, in its
present form, unconstitutional.

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I, therefore, vote to DISMISS the petitions, subject to


the above qualification.
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SEPARATE OPINION

VITUG, J.:

Lest we be lost by a quagmire of trifles, the real threshold


and prejudicial issue, to my mind, is whether or not this
Court is ready to assume and to take upon itself with an
overriding authority the awesome responsibility of
overseeing the entire bureaucracy. Far from it, ours is
merely to construe and to apply the law regardless of its
wisdom and salutariness, and to strike it down only when
it clearly disregards constitutional proscriptions. It is what
the fundamental law mandates, and it is what the Court
must do.
I cannot yet concede to the novel theory, so challengingly
provocative as it might be, that under the 1987
Constitution the Court may now at good liberty intrude, in
the guise of the people’s imprimatur, into every affair of
government. What significance can still then remain, I ask,
of the time honored and widely acclaimed principle of
separation of powers, if at every turn the Court allows
itself to pass upon, at will, the disposition of a co-equal,
independent and coordinate branch in our system of
government. I dread to think of the so varied uncertainties
that such an undue interference can lead to. The respect for
long standing doctrines in our jurisprudence, nourished
through time, is one of maturity not timidity, of stability
rather than quiescence.
It has never occurred to me, and neither do I believe it
has been intended, that judicial tyranny is envisioned, let
alone institutionalized, by our people in the 1987
Constitution. The test of tyranny is not solely on how it is
wielded but on how, in the first place, it can be capable of
being exercised. It is time that any such perception of
judicial omnipotence is corrected.
Against all that has been said, I see, in actuality in
these cases at bench, neither a constitutional infringement
of substance, judging from precedents already laid down by
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this Court in previous cases, nor a justiciability even now of


the issues raised, more than an attempt to sadly highlight
the perceived short comings in the procedural enactment of
laws, a matter which is internal to Congress and an area
that is best left to its own basic concern. The fact of the
matter is that the legislative enactment,
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Tolentino vs. Secretary of Finance

in its final form, has received the ultimate approval of both


houses of Congress. The finest rhetoric, indeed fashionable
in the early part of this closing century, would still be a
poor substitute for tangibility. I join, nonetheless, some of
my colleagues in respectfully inviting the kind attention of
the honorable members of our Congress in the suggested
circumspect observance of their own rules.
A final remark. I should like to make it clear that this
opinion does not necessarily foreclose the right, peculiar to
any taxpayer adversely affected, to pursue at the proper
time, in appropriate proceedings, and in proper fora, the
specific remedies prescribed therefor by the National
Internal Revenue Code, Republic Act 1125, and other laws,
as well as rules of procedure, such as may be pertinent.
Some petitions filed with this Court are, in essence,
although styled differently, in the nature of declaratory
relief over which this Court is bereft of original jurisdiction.
All considered, I, therefore, join my colleagues who are
voting for the dismissal of the petitions.

DISSENTING OPINION

REGALADO, J.:

It would seem like an inconceivable irony that Republic Act


No. 7716 which, so respondents claim, was conceived by the
collective wisdom of a bicameral Congress and crafted with
sedulous care by two branches of government should now
be embroiled in challenges to its validity for having been
enacted in disregard of mandatory prescriptions of the
Constitution itself. Indeed, such impugnment by
petitioners goes beyond merely the procedural flaws in the
parturition of the law. Creating and regulating as it does
definite rights to property, but with its own passage having
been violative of explicit provisions of the organic law, even
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without going into the intrinsic merits of the provisions of


Republic Act No. 7716 its substantive invalidity is pro facto
necessarily entailed.
How it was legislated into its present statutory existence
is not in serious dispute and need not detain us except for a
recital of some salient and relevant facts. The House of
Representatives
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1
passed House Bill No. 11197 on third reading on
November 17, 1993 and, the following day, it transmitted
the same to the Senate for concurrence. On its part, the
Senate approved Senate Bill No. 1630 on second and third
readings on March 24, 1994. It is important to note in this
regard that on March 22, 1994, said S.B. No. 1630 had been
certified by President Fidel V. Ramos for immediate
enactment to meet a public emergency, that is, a growing
budgetary deficit. There was no such certification for H.B.
No. 11197 although it was the initiating revenue bill.
It is, therefore, not only a curious fact but, more
importantly, an invalid procedure since that Presidential
certification was erroneously made for and confined to S.B.
No. 1630 which was indisputably a tax bill and, under the
Constitution, could not validly originate in the Senate.
Whatever is claimed in favor of S.B. No. 1630 under the
blessings of that certification, such as its alleged exemption
from the three separate readings requirement, is
accordingly negated and rendered inutile by the
inefficacious nature of said certification as it could lawfully
have been issued only for a revenue measure originating
exclusively from the lower House. To hold otherwise would
be to validate a Presidential certification of a bill initiated
in the Senate despite the Constitutional prohibition against
its originating therefrom.
Equally of serious significance is the fact that S.B. No.
1630 was reported out in Committee Report No. 349
submitted to the Senate on February 7, 1994 and approved
by that body “in substitution of S.B. No. 1129,” while
merely “taking
2
into consideration P.S. No. 734 and H.B.
No. 11197.” S.B. No. 1630, therefore, was never filed in
substitution of either P.S. No. 734 or, more emphatically, of
H.B. No. 11197 as these two legislative issuances were
merely taken account of, at the most, as referential bases
or materials.
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This is not a play on misdirection for, in the first


instance, the respondents assure us that H.B. No. 11197
was actually the sole

_______________

1 In substitution of H.B. Nos. 253, 771, 2450, 7033, 8086, 9030, 9210,
9297, 10012 and 10100 which were filed over the period from July 22,
1992 to August 3, 1993.
2 P.S. Res. No. 734 had earlier been filed in the Senate on September
10, 1992, while S.B. No. 1129 was filed on March 1, 1993.

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source of and started the whole legislative process which


culminated in Republic Act No. 7716. The participation of
the Senate in enacting S.B. No. 1630 was, it is claimed,
justified as it was merely in pursuance of its power to
concur in or propose amendments to H.B. No. 11197. Citing3
the 83-year old case of Flint vs. Stone Tracy Co., it is
blithely announced that such power to amend includes an
amendment by substitution, that is, even to the extent of
substituting the entire H.B. No. 11197 by an altogether
completely new measure of Senate provenance. Ergo, so the
justification goes, the Senate acted perfectly in accordance
with its amending power under Section 24, Article VI of the
Constitution since it merely proposed amendments through
a bill allegedly prepared in advance.
This is a mode of argumentation which, by reason of
factual inaccuracy and logical implausibility, both astounds
and confounds. For, it is of official record that S.B. No. 1630
was filed, certified and enacted in substitution of S.B. No.
1129 which in itself was likewise in derogation of the
Constitutional prohibition against such initiation of a tax
bill in the Senate. In any event, S.B. No. 1630 was neither
intended as a bill to be adopted by the Senate nor to be
referred to the bicameral conference committee as a
substitute for H.B. No. 11197. These indelible facts
appearing in official documents cannot be erased by any
amount of strained convolutions or incredible pretensions
that S.B. No. 1630 was supposedly enacted in anticipation
of H.B. No. 11197.
On that score alone, the invocation by the Solicitor
General of the hoary concept of amendment by substitution
falls flat on its face. Worse, his concomitant citation of Flint
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to recover from that prone position only succeeded in


turning the same postulation over, this time supinely flat
on its back. As elsewhere noted by some colleagues, which I
will just refer to briefly to avoid duplication, respondents
initially sought sanctuary in that doctrine supposedly laid
down in Flint, thus: “It has, in fact, been held that the
substitution of an entirely new measure for the one
originally proposed
4
can be supported as a valid
amendment.” (Emphasis supplied.) During the
interpellation by the writer at

_______________

3 220 U.S. 107, 55 L.Ed. 389 (1911).


4 Consolidated Comment, 36-37.

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Tolentino vs. Secretary of Finance

the oral argument held in these cases, the attention of the


Solicitor General was called to the fact that the
amendment in Flint consisted only of a single item, that is,
the substitution of a corporate tax for an inheritance tax
proposed in a general revenue bill; and that the text of the
decision therein nowhere contained the supposed doctrines
he quoted and ascribed to the court, as those were merely
summations of arguments of counsel therein. It is indeed a
source of disappointment for us, but an admission of
desperation on his part, that, instead of making a
clarification or a defense of his contention, the
5
Solicitor
General merely reproduced all over again the same
quotations as they appeared in his original consolidated
comment, without venturing any explanation or
justification.
The aforestated dissemblance, thus unmasked, has
further undesirable implications on the contentions
advanced by respondents in their defense. For, even
indulging respondents ex gratia argumenti in their
pretension that S.B. No. 1630 substituted or replaced H.B.
No. 11197, aside from muddling the issue of the true
origination of the disputed law, this would further enmesh
respondents in a hopeless contradiction.
In a publication authorized by the Senate and from
which the Solicitor General has liberally quoted, it is
reported as an accepted rule therein that “(a)n amendment
by substitution when approved takes the place of the
6
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6
principal bill. C.R. March 19, 1963, p. 943.” Stated
elsewise, the principal bill is supplanted and goes out of
actuality. Applied to the present situation, and following
respondents’ submission that H.B. No. 11197 had been
substituted or replaced in its entirety, then in law it had no
further existence for purposes of the subsequent stages of
legislation except, possibly, for referential data.
Now, the enrolled bill thereafter submitted to the
President of the Philippines, signed by the President of the
Senate and the Speaker of the House of Representatives,
carried this solemn certification over the signatures of the
respective secretaries of

________________

5 Consolidated Memorandum for Respondents, 56-57.


6 Orquiola, H. M., Annotated Rules of the Senate and Procedure,
Precedents and Practices of the Senate of the Republic of the Philippines
since 1946, 1991 Ed., 108.

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VOL. 235, AUGUST 25, 1994 725


Tolentino vs. Secretary of Finance

both chambers: “This Act which is a consolidation of House


Bill No. 11197 and Senate Bill No. 1630 was finally passed
by the House of Representatives and the Senate on April
27, 1994, and May 2, 1994.” (Italics mine.) In reliance
thereon, the Chief Executive signed the same into law as
Republic Act No. 7716.
The confusion to which the writer has already confessed
is now compounded by that official text of the aforequoted
certification which speaks, and this cannot be a mere
lapsus calami, of two independent and existing bills (one of
them being H.B. No. 11197) which were consolidated to
produce the enrolled bill. In parliamentary7 usage, to
consolidate two bills, is to unite them into one and which,
in the case at bar, necessarily assumes that H.B. No. 11197
never became legally inexistent. But did not the Solicitor
General, under the theory of amendment by substi-tution
of the entire H.B. No. 11197 by S.B. No. 1630, thereby
premise the same upon the replacement, hence the total
elimination from the legislative process, of H.B. 11197?
It results, therefore, that to prove compliance with the
requirement for the exclusive origination of H.B. No. 11197,
two alternative but inconsistent theories had to be
espoused and defended by respondents’ counsel. To justify
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the introduction and passage of S.B. No. 1630 in the


Senate, it was supposedly enacted only as an amendment
by substitution, hence on that theory H.B. No. 11197 had to
be considered as displaced and terminated from its role or
existence. Yet, likewise for the same purpose but this time
on the theory of origination by consolidation, H.B. No.
11197 had to be resuscitated so it could be united or
merged with S.B. No. 1630. This latter alternative theory,
unfortunately, also exacerbates the constitutional defect for
then it is an admission of a dual origination of the two tax
bills, each respectively initiated in and coming from the
lower and upper chambers of Congress.
Parenthetically, it was also this writer who pointedly
brought this baffling situation to the attention of the
Solicitor General during the aforesaid oral argument, to
the extent of reading aloud the certification in full. We had
hoped thereby to be clarified on these vital issue in
respondents’ projected memo-

_______________

7 Black’s Law Dictionary, 4th Ed. (1951), 381, citing Fairview vs.
Durham, 45 Iowa 56.

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randum, but we have not been favored with an explanation


unraveling this dilemma. Verily, by passing sub silentio on
these intriguing submissions, respondents have wreaked
havoc on both logic and law just to gloss over their non-
compliance with the Constitutional mandate for exclusive
origination of a revenue bill. The procedure required
therefor, we emphatically add, can be satisfied only by
complete and strict compliance since this is laid down by
the Constitution itself and not by a mere statute.
This writer consequently agrees with the clearly tenable
proposition of petitioners that when the Senate passed and
approved S.B. No. 1630, had it certified by the Chief
Executive, and thereafter caused its consideration by the
bicameral conference committee in total substitution of
H.B. No. 11197, it clearly and deliberately violated the
requirements of the Constitution not only in the origination
of the bill but in the very enactment of Republic Act No.
7716. Contrarily, the shifting sands of inconsistency in the
arguments adduced for respondents betray such lack of
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intellectual rectitude as to give the impression of being


mere rhetorics in defense of the indefensible.
We are told, however, that by our discoursing on the
foregoing issues we are intruding into non-justiciable areas
long declared verboten by such time-honored doctrines as
those on political questions, the enrolled bill theory and the
respect due to two co-equal and coordinate branches of
Government, all derived from the separation of powers
inherent in republicanism. We appreciate the lectures, but
we are 8
not exactly unaware of 9
the teachings in U.S. vs.
Pons, Mabanag vs. Lopez Vito, 10Casco Philippine Chemical 11
Co., Inc. vs. Gimenez, etc., et al., Morales vs. Subido, etc.,
and Philippine 12
Judges Association, etc., et al. vs. Prado,
etc., et13 al., on the one hand, and Tañada, et al. vs. Cuenco,14
et al., Sanidad, et al. vs. Commission on Elections, et al.,
and

________________

8 34 Phil. 729 (1916).


9 78 Phil. 1 (1947).
10 L-17931, February 28, 1963, 7 SCRA 347.
11 L-29658, February 27, 1969, 27 SCRA 131.
12 G.R. No. 105371, November 11, 1993, 227 SCRA 703.
13 103 Phil. 1051 (1957).
14 L-46640, October 12, 1976, 73 SCRA 333.

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VOL. 235, AUGUST 25, 1994 727


Tolentino vs. Secretary of Finance

15
Daza vs. Singson, et al., on the other, to know which
would be applicable to the present controversy and which
should be rejected.
But, first, a positional exordium. The writer of this
opinion would be among the first to acknowledge and
enjoin not only courtesy to, but respect for, the official acts
of the Executive and Legislative departments, but only so
long as the same are in accordance with or are defensible
under the fundamental charter and the statutory law. He
would readily be numbered in the ranks of those who would
preach a reasoned sermon on the separation of powers, but
with the qualification that the same are not contained in
tripartite compartments separated by imper-meable
membranes. He also ascribes to the general validity of
American constitutional doctrines as a matter of historical
and legal necessity, but not to the extent of being oblivious
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to political changes or unmindful of the fallacy of undue


generalization arising from myopic disregard of the factual
setting of each particular case.
These ruminations have likewise been articulated and
dissected by my colleagues, hence it is felt that the only
issue which must be set aright in this dissenting opinion is
the so-called enrolled bill doctrine to which we are urged to
cling with reptilian tenacity. It will be preliminarily noted
that the official certification appearing right on the face of
Republic Act No. 7716 would even render unnecessary any
further judicial inquiry into the proceedings which
transpired in the two legislative chambers and, on a parody
of tricameralism, in the bicameral conference committee.
Moreover, we have the excellent dissertations of some of
my colleagues on these matters, but respondents insist en
contra that the congressional proceedings cannot properly
be inquired into by this Court. Such objection confirms a
suppressive pattern aimed at sacrificing the rule of law to
the fiat of expediency.
Respondents thus emplaced on their battlements the
pronouncement of this Court in the aforecited16
case of
Philippine Judges Association vs. Prado. Their reliance
thereon falls into the same error committed by their
seeking refuge in the Flint case, ante., which, as has earlier
been demonstrated (aside from

________________

15 G.R. No. 86344, December 21, 1989, 180 SCRA 496.


16 Consolidated Memorandum for Respondents, 79-82.

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the quotational misrepresentation), could not be on par


with the factual situation in the present case. Flint, to
repeat, involved a mere amendment on a single legislative
item, that is, substituting the proposal therein of an
inheritance tax by one on corporate tax. Now, in their
submission based on Philippine Judges Association,
respondents studiously avoid mention of the fact that the
questioned insertion referred likewise to a single item, that
is, the repeal of the franking privilege theretofore granted
to the judiciary. That both cases cannot be equated with
those at bar, considering the multitude of items challenged
and the plethora of constitutional violations involved, is too
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obvious to belabor. Legal advocacy and judicial


adjudication must have a becoming sense of qualitative
proportion, instead of lapsing into the discredited and
maligned practice of yielding blind adherence to
precedents.
The writer unqualifiedly affirms his respect for valid
official acts of the two branches of government and eschews
any unnecessary intrusion into their operational
management and internal affairs. These, without doubt,
are matters traditionally protected by the republican
principle of separation of powers. Where, however, there is
an overriding necessity for judicial intervention in light of
the pervasive magnitude of the problems presented and the
gravity of the constitutional violations alleged, but this
Court cannot perform its constitutional duty expressed in
Section 1, Article VIII of the Constitution unless it makes
the inescapable inquiry, then the confluence of such factors
should compel an exception to the rule as an ultimate
recourse. The cases now before us present both the
inevitable challenge and the inescapable exigency for
judicial review. For the Court to now shirk its bounden
duty would not only project it as a citadel of the timorous
and the slothful, but could even undermine its raison d’etre
as the highest and ultimate tribunal.
Hence, this dissenting opinion has touched on events
behind and which transpired prior to the presentation of
the enrolled bill for approval into law. The details of that
law which resulted from the legislative action followed by
both houses of Congress, the substantive validity of whose
provisions and the procedural validity of which legislative
process are here challenged as unconstitutional, have been
graphically presented by petitioners and admirably
explained in the respective opinions of my brethren. The
writer concurs in the conclusions drawn therefrom and
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VOL. 235, AUGUST 25, 1994 729


Tolentino vs. Secretary of Finance

rejects the contention that we have unjustifiably breached


the dike of the enrolled bill doctrine.
Even in the land of its source, the so-called conclusive
presumption of validity originally attributed to that
doctrine has long been revisited and qualified, if not
altogether rejected. On the competency of judicial inquiry,
it has been held that “(u)nder the ‘enrolled bill rule’ by
which an enrolled bill is sole expository of its contents and
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conclusive evidence of its existence and valid enactment, it


is nevertheless competent for courts to inquire as to what
prerequisites are fixed by the Constitution of which
journals of respective 17houses of Legislature are required to
furnish the evidence.” 18
In fact, in Gwynn vs. Hardee, etc., et al., the Supreme
Court of Florida declared:

“(1) While the presumption is that the enrolled bill, as signed by


the legislative officers and filed with the secretary of state, is the
bill as it passed, yet this presumption is not conclusive, and when
it is shown from the legislative journals that a bill though
engrossed and enrolled, and signed by the legislative officers,
contains provisions that have not passed both houses, such
provisions will be held spurious and not a part of the law. As was
said by Mr. Justice Cockrell in the case of Wade vs. Atlantic
Lumber Co., 51 Fla. 628, text 633, 41 So. 72, 73:

‘This Court is firmly committed to the holding that when the journals
speak they control, and against such proof the enrolled bill is not
conclusive.’ ”

More enlightening and apropos to the present controversy


is the decision promulgated on May 13, 1980 by the
Supreme Court of Kentucky in D & W 19
Auto Supply, et al.
vs. Department of Revenue, et al., pertinent excerpts
wherefrom are extensively reproduced hereunder:

_______________

17 Brailsford vs. Walker, 31 S.E. 2d 385, 387, 388, 205 S.C. 228.
18 110 So. 343, 346.
19 602 South Western Reporter, 2d Series, 402-425, jointly deciding
Carrollton Wholesale Tobaccos, Inc. et al. vs. Department of Revenue, et
al., and Bluegrass Provisions Co., Inc., et al. vs. Department of Revenue,
et al.

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Tolentino vs. Secretary of Finance

“x x x In arriving at our decision we must, perforce, reconsider the


validity of a long line of decisions of this court which created and
nurtured the so-called ‘enrolled bill’ doctrine.
xxx
“[1] Section 46 of the Kentucky Constitution sets out certain
procedures that the legislature must follow before a bill can be
considered for final passage. x x x.
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xxx
“x x x Under the enrolled bill doctrine as it now exists in
Kentucky, a court may not look behind such a bill, enrolled and
certified by the appropriate officers, to determine if there are any
defects.
xxx
“x x x In Lafferty, passage of the law in question violated this
provision, yet the bill was properly enrolled and approved by the
governor. In declining to look behind the law to determine the
propriety of its enactment, the court enunciated three reasons for
adopting the enrolled bill rule. First, the court was reluctant to
scrutinize the processes of the legislature, an equal branch of
government. Second, reasons of convenience prevailed, which
discouraged requiring the legislature to preserve its records and
anticipated considerable complex litigation if the court ruled
otherwise. Third, the court acknowledged the poor record-keeping
abilities of the General Assembly and expressed a preference for
accepting the final bill as enrolled, rather than opening up the
records of the legislature. x x x.
xxx
“Nowhere has the rule been adopted without reason, or as a
result of judicial whim. There are four historical bases for the
doctrine. (1) An enrolled bill was a ‘record’ and, as such, was not
subject to attack at common law. (2) Since the legislature is one of
the three branches of government, the courts, being coequal, must
indulge in every presumption that legislative acts are valid. (3)
When the rule was originally formulated, record-keeping of the
legislatures was so inadequate that a balancing of equities
required that the final act, the enrolled bill, be given efficacy. (4)
There were theories of convenience as expressed by the Kentucky
court in Lafferty.
“The rule is not unanimous in the several states, however, and
it has not been without its critics. From an examination of cases
and treaties, we can summarize the criticisms as follows: (1)
Artificial presumptions, especially conclusive ones, are not favored.
(2) Such a rule frequently (as in the present case) produces results
which do not accord with facts or constitutional provisions. (3) The
rule is conducive to fraud, forgery, corruption and other
wrongdoings. (4) Modern automatic and electronic record-keeping
devices now used by legislatures

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Tolentino vs. Secretary of Finance

remove one of the original reasons for the rule. (5) The rule
disregards the primary obligation of the courts to seek the truth

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and to provide a remedy for a wrong committed by any branch of


government. In light of these considerations, we are convinced that
the time has come to re-examine the enrolled bill doctrine.
“[2] This court is not unmindful of the admonition of the
doctrine of stare decisis. The maxim is “Stare decisis et non quieta
movere,” which simply suggests that we stand by precedents and
not disturb settled points of law. Yet, this rule is not inflexible, nor
is it of such a nature as to require perpetuation of error or logic. As
we stated in Daniel’s Adm’r v. Hoofnel, 287 Ky 834, 155 S.W.2d
469, 471-72 (1941) (citations omitted):

The force of the rule depends upon the nature of the question to be
decided and the extent of the disturbance of rights and practices which a
change in the interpretation of the law or the course of judicial opinions
may create. Cogent considerations are whether there is clear error and
urgent reasons ‘for neither justice nor wisdom requires a court to go from
one doubtful rule to another,’ and whether or not the evils of the principle
that has been followed will be more injurious than can possibly result
from a change.

Certainly, when a theory supporting a rule of law is not


grounded on facts, or upon sound logic, or is unjust, or has been
discredited by actual experience, it should be discarded, and with
it the rule it supports.
“[3] It is clear to us that the major premise of the Lafferty
decision, the poor record-keeping of the legislature, has
disappeared. Modern equipment and technology are the rule in
record-keeping by our General Assembly. Tape recorders, electric
typewriters, duplicating machines, recording equipment, printing
presses, computers, electronic voting machines, and the like
remove all doubts and fears as to the ability of the General
Assembly to keep accurate and readily accessible records.
“It is also apparent that the ‘convenience’ rule is not
appropriate in today’s modern and developing judicial philosophy.
The fact that the number and complexity of lawsuits may increase
is not persuasive if one is mindful that the overriding purpose of
our judicial system is to discover the truth and see that justice is
done. The existence of difficulties and complexities should not
deter this pursuit and we reject any doctrine or presumption that
so provides.
“Lastly, we address the premise that the equality of the various
branches of government requires that we shut our eyes to
constitutional failings and other errors of our coparceners in
government. We simply do not agree. Section 26 of the Kentucky
Constitution provides that any

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Tolentino vs. Secretary of Finance

law contrary to the constitution is ‘void.’ The proper exercise of


judicial authority requires us to recognize any law which is
unconstitutional and to declare it void. Without belaboring the
point, we believe that under section 228 of the Kentucky
Constitution it is our obligation to ‘support . . . the Constitution of
the commonwealth.’ We are sworn to see that violations of the
constitution—by any person, corporation, state agency or branch
of government—are brought to light and corrected. To
countenance an artificial rule of law that silences our voices when
confronted with violations of our constitution is not acceptable to
this court.
“We believe that a more reasonable rule is the one which
Professor Sutherland describes as the ‘extrinsic evidence’ rule. x x
x. Under this approach there is a prima facie presumption that an
enrolled bill is valid, but such presumption may be overcome by
clear, satisfactory and convincing evidence establishing that
constitutional requirements have not been met.
“We therefore overrule Lafferty v. Huffman and all other cases
following the so-called enrolled bill doctrine, to the extent that
there is no longer a conclusive presumption that an enrolled bill is
valid. x x x” (Emphases mine.)

Undeniably, the value-added tax system may have its own


merits to commend its continued adoption, and the
proposed widening of its base could achieve laudable
governmental objectives if properly formulated and
conscientiously implemented. We would like to believe,
however, that ours is not only an enlightened democracy
nurtured by a policy of transparency but one where the
edicts of the fundamental law are sacrosanct for all,
barring none. While the realization of the lofty ends of this
administration should indeed be the devout wish of all,
likewise barring none, it can never be justified by methods
which, even if unintended, are suggestive of Machiavellism.
Accordingly, I vote to grant the instant petitions and to
invalidate Republic Act No. 7716 for having been enacted
in violation of Section 24, Article VI of the Constitution.

DISSENTING OPINION

DAVIDE, JR., J.:

The legislative history of R.A. No. 7716, as highlighted in


the Consolidated Memorandum for the public respondents
submitted

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Tolentino vs. Secretary of Finance

by the Office of the Solicitor General, demonstrates beyond


doubt that it was passed in violation or deliberate
disregard of mandatory provisions of the Constitution and
of the rules of both chambers of Congress relating to the
enactment of bills.
I therefore vote to strike down R.A. No. 7716 as
unconstitutional and as having been enacted with grave
abuse of discretion.
The Constitution provides for a bicameral Congress.
Therefore, no bill can be enacted into law unless it is
approved by both chambers—the Senate and the House of
Representatives (hereinafter House). Otherwise stated,
each chamber may propose and approve a bill, but until it
is submitted to the other chamber and passed by the latter,
it cannot be submitted to the President for its approval into
law.
Paragraph 2, Section 26, Article VI of the Constitution
provides:

“No bill passed by either House shall become a law unless it has
passed three readings on separate days, and printed copies
thereof in its final form have been distributed to its Members
three days before its passage, except when the President certifies
to the necessity of its immediate enactment to meet a public
calamity or emergency. Upon the last reading of a bill, no
amendment thereto shall be allowed, and the vote thereon shall
be taken immediately thereafter, and the yeas and nays entered
in the Journal.”

The “three readings” refer to the three readings in both


chambers.
There are, however, bills which must originate
exclusively in the House. Section 24, Article VI of the
Constitution enumerates them:

“SEC. 24. All appropriation, revenue or tariff bills, bills


authorizing increase of the public debt, bills of local application,
and private bills shall originate exclusively in the House of
Representatives, but the Senate may propose or concur with
amendments.”
1
Webster’s Third New International Dictionary defines
originate as follows:

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“vt 1: to cause the beginning of: give rise to: INITIATE . . . 2. to


start (a person or thing) on a course of journey . . . vi: to take or
have

________________

1 1971 ed., 1592.

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734 SUPREME COURT REPORTS ANNOTATED


Tolentino vs. Secretary of Finance

origin: be derived: ARISE, BEGIN, START . . .”


2
Black’s Law Dictionary defines the word exclusively in
this wise:

“Apart from all others; only; solely; substantially all or for the
greater part. To the exclusion of all others; without admission of
others to participation; in a manner to exclude.”
3
In City Mayor vs. The Chief of Philippine Constabulary,
this Court said:

“The term ‘exclusive’ in its usual and generally accepted sense,


means possessed to the exclusion of others; appertaining to the
subject alone, not including, admitting or pertaining to another or
others, undivided, sole. (15 Words and Phrases, p. 510, citing
Mitchel v. Tulsa Water, Light, Heat and Power Co., 95 P. 961, 21
Okl. 243; and p. 513, citing Commonwealth v. Superintendent of
House of Correction, 64 Pa. Super. 613, 615).”

Indisputably then, only the House can cause the beginning


or initiate the passage of any appropriation, revenue, or
tariff bill, any bill increasing the public debt, any bill of
local application, or any private bill. The Senate can only
“propose or concur with amendments.”
Under the Rules of the Senate, the first reading is the
reading of the title of the bill and its referral to the
corresponding committee; the second reading consists of
the reading of the bill in the form recommended by the
corresponding committee; and the third reading is the
reading of the bill
4
in the form it will be after approval on
second reading. During the second reading, the following
takes place:

(1) Second reading of the bill;


(2) Sponsorship by the Committee Chairman or any
member designated by the corresponding
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committee;

_______________

2 Sixth Edition (1990), 565, citing Standard Oil Co. of Texas vs. State,
Tex. Civ. App., 142 S.W.2d 519, 521, 522, 523.
3 21 SCRA 665, 673 [1967].
4 Sections 52 and 53, Rule XXIII.

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VOL. 235, AUGUST 25, 1994 735


Tolentino vs. Secretary of Finance

(3) If a debate ensues, turns for and against the bill


shall be taken alternately;
(4) The sponsor of the bill closes the debate;
(5) After the close of the debate, the period of
amendments follows;
(6) Then, after the period of amendments 5
is closed, the
voting on the bill on second reading.

After approval on second reading, printed copies thereof in


its final form shall be distributed to the Members of the
Senate at least three days prior to the third reading, except
in cases of certified bills. At the third reading, the final vote
shall be taken
6
and the yeas and nays shall be entered in
the Journal.
Under the Rules of the House, the first reading of a bill
consists of a reading of the number, title, and author 7
followed by the referral to the appropriate committees; the
second reading consists of the reading in full of the bill8
with the amendments proposed by the committee, if any;
and the third reading is the reading of the bill in the form
as approved on second reading and takes place only after
printed copies thereof in its final form have been
distributed to the Members9 at least three days before,
unless the bill is certified. At the second reading, the
following takes place:

(1) Reading of the bill;


(2) Sponsorship;
(3) Debates;
(4) Period of Amendments; and
10
(5) Voting on Second Reading.

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At the third reading, the votes shall be taken11 immediately


and the yeas and nays entered in the Journal.

_______________

5 Section 57, Rule XXV.


6 Section 26(2), Article VI, Constitution; paragraph (7), Section 57, Rule
XXV.
7 Section 69, Rule XIV.
8 Section 77, Id.
9 Section 82, Rule XIV.
10 Sections 77-81, Id.
11 Section 82, Id., in relation to Section 26(2), Article VI, Constitution.

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Clearly, whether in the Senate or in the House, every bill


must pass the three readings on separate days, except
when the bill is certified. Amendments12to the bill on third
reading are constitutionally prohibited.
After its passage by one chamber, the bill should then be
transmitted to the other chamber for its concurrence.
Section 83, Rule XIV of the Rules of the House expressly
provides:

“SEC. 83. Transmittal to Senate.—The Secretary General, without


need of express order, shall transmit to the Senate for its
concurrence all the bills and joint or concurrent resolutions
approved by the House or the amendments of the House to the
bills or resolutions of the Senate, as the case may be. If the
measures approved without amendments are bills or resolutions
of the Senate, or if amendments of the Senate to bills of the House
are accepted, he shall forthwith notify the Senate of the action
taken.”

Simplified, this rule means that:

1. As to a bill originating in the House:

(a) Upon its approval by the House, the bill shall be


transmitted to the Senate;
(b) The Senate may approve it with or without
amendments;
(c) The Senate returns the bill to the House;

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(d) The House may accept the Senate amendments; if it


does not, the Secretary General shall notify the
Senate of that action. As hereinafter be shown, a
request for conference shall then be in order.

2. As to bills originating in the Senate:

(a) Upon its approval by the Senate, the bill shall be


transmitted to the House;
(b) The House may approve it with or without
amendments;
(c) The House then returns it to the Senate, informing
it of the action taken;
(d) The Senate may accept the House amendments; if it
does not, it shall notify the House and make a
request for conference.

The transmitted bill shall then pass three readings in the


other chamber on separate days. Section 84, Rule XIV of
the

________________

12 Section 26(2), Article VI, Constitution.

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Tolentino vs. Secretary of Finance

Rules of the House states:

“SEC. 84. Bills from the Senate.—The bills, resolutions and


communications of the Senate shall be referred to the
corresponding committee in the same manner as bills presented
by Members of the House.”

and Section 51, Rule XXIII of the Rules of the Senate


provides:

“SEC. 51. Prior to their final approval, bills and joint resolutions
shall be read at least three times.”

It is only when the period of disagreement is reached, i.e.,


amendments proposed by one chamber to a bill originating
from the other are not accepted by the latter, that a request
for conference is made or is in order. The request for

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conference is specifically covered by Section 26, Rule XII of


the Rules of the Senate which reads:

“SEC. 26. In the event that the Senate does not agree with the
House of Representatives on the provision of any bill or joint
resolution, the differences shall be settled by a conference
committee of both Houses which shall meet within ten days after
its composition.”

and Section 85, Rule XIV of the Rules of the House which
reads:

“SEC. 85. Conference Committee Reports.—In the event that the


House does not agree with the Senate on the amendments to any
bill or joint resolution, the differences may be settled by
conference committees of both Chambers.”

The foregoing provisions of the Constitution and the Rules


of both chambers of Congress are mandatory. 13
In his Treatise On The Constitutional Limitations,
more particularly on enactment of bills, Cooley states:

_________________

13 Volume I, Eight Edition, Chapter VI, 267. See Miller vs. Mardo, 2
SCRA 898 [1961]; Everlasting Pictures, Inc. vs. Fuentes, 3 SCRA 539
[1961].

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“Where, for an instance, the legislative power is to be exercised by


two houses, and by settled and well-understood parliamentary
law these two houses are to hold separate sessions for their
deliberations, and the determination of the one upon a proposed
law is to be submitted to the separate determination of the other,
the constitution, in providing for two houses, has evidently spoken
in reference to this settled custom, incorporating it as a rule of
constitutional interpretation; so that it would require no
prohibitory clause to forbid the two houses from combining in one,
and jointly enacting laws by the vote of a majority of all. All those
rules which are of the essentials of law-making must be observed
and followed; and it is only the customary rules of order and
routine, such as in every deliberative body are always understood
to be under its control, and subject to constant change at its will,
that the constitution can be understood to have left as matters of

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discretion, to be established, modified, or abolished by the bodies


for whose government in non-essential matters they exist.”

In respect of appropriation, revenue, or tariff bills, bills


increasing the public debt, bills of local application, or
private bills, the return thereof to the House after the
Senate shall have “proposed or concurred with
amendments” for the former either to accept or reject the
amendments would not only be in conformity with the
foregoing rules but is also implicit from Section 24 of
Article VI.
With the foregoing as our guiding light, I shall now show
the violations of the Constitution and of the Rules of the
Senate and of the House in the passage of R.A. No. 7716.

VIOLATIONS OF SECTION 24, ARTICLE VI OF THE


CONSTITUTION:

First violation.—Since R.A. No. 7716 is a revenue measure,


it must originate exclusively in the House—not in the
Senate. As correctly asserted by petitioner Tolentino, on
the face of the enrolled copy of R.A. No. 7716, it is a
“CONSOLIDATION OF HOUSE BILL NO. 11197 AND
SENATE BILL NO. 1630.” In short, it is an illicit marriage
of a bill which originated in the House and a bill which
originated in the Senate. Therefore, R.A. No. 7716 did not
originate exclusively in the House.
The only bill which could serve as a valid basis for R.A.
No. 7716 is House Bill (HB) No. 11197. This bill, which is
the substitute bill recommended by the House Committee
on Ways
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Tolentino vs. Secretary of Finance

and Means in substitution of House Bills Nos. 253, 771,


2450, 7033, 8086,9030, 9210, 9397, 10012, 14and 10100, and
covered by its Committee Report No. 367, was approved 15
on third reading by the House16 on 17 November 1993.
Interestingly, HB No. 9210, which was filed by
Representative Exequiel B. Javier on 19 May 1993, was
certified by the President in 17his letter to Speaker Jose de
Venecia, Jr. of 1 June 1993. Yet, HB No. 11197, which
substituted HB No. 9210 and the others abovestated, was
not. Its certification seemed to have been entirely forgotten.

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On 18 November 1993, the Secretary-General of the


House, pursuant to Section 83, Rule XIV of the Rules of the
House, transmitted to the President of the Senate HB No.
11197 and 18
requested the concurrence of the Senate
therewith.
However, HB No. 11197 had passed only its first reading
in the Senate by its referral to its Committee on Ways and
Means. That Committee never deliberated on HB No.
11197 as19it should have. It acted only on Senate Bill (SB)
No. 1129 introduced by Senator Ernesto F. Herrera on 1
March 1993. It then prepared and proposed
20
SB No. 1630,
and in its Committee Report No. 34921 which was submitted
to the Senate on 7 February 1994, it recommended that
SB No. 1630 be approved “in substitution of S.B. No. 1129,
taking into
22
consideration P.S. Res. No. 734 and H.B. No.
11197.” It must be carefully noted that SB No. 1630 was
proposed and submitted for approval by the Senate in
SUBSTITUTION of SB No. 1129, and not HB No. 11197.
Obviously, the principal measure which the Committee
deliberated

________________

14 Consolidated Memorandum for Respondents, Annexes “2” to “12,”


inclusive.
15 Consolidated Memorandum for Respondents, 18.
16 Id., Annex “9.”
17 Id., Annex “1.”
18 Id., 18.
19 Id., Annex “15.” Entitled “An Act Restructuring the Value-Added Tax
(VAT) System By Expanding Its Tax Base, Amending Sections 103, 113,
114 of the National Internal Revenue Code, as Amended.”
20 Id., Annex “17.”
21 Id., 20.
22 Emphasis supplied.

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on and acted upon was SB No. 1129 and not HB No. 11197.
The latter, instead of being the only measure to be taken
up, deliberated upon, and reported back to the Senate for
its consideration on second reading and, eventually, on
third reading, was, at the most, merely given by the
Committee a passing glance.

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This specific unequivocal action of the Senate


Committee on Ways and Means, i.e., proposing and
recommending approval of SB No. 1630 as a substitute for
or in substitution of SB No. 1129 demolishes at once the
thesis of the Solicitor General that:

“Assuming that SB 1630 is distinct from HB 11197, amendment


by substitution is within the purview of Section 24, Article VI of
the Constitution.”

because, according to him, (a) “Section 68, Rule XXIX of the


Rules of the Senate authorizes an amendment by
substitution and the only condition required is that ‘the
text thereof is submitted in writing’; and (b) ‘[I]n Flint vs.
Stone Tracy Co. (220 U.S. 107) the United States Supreme
Court, interpreting the provision in the United States
Constitution similar to Section 24, Article VI of the
Philippine Constitution, stated that the power of the
Senate to amend a revenue bill includes substitution of an
entirely new measure for the23 one originally proposed by the
House of Representatives.’ ”
This thesis is utterly without merit. In the first place, it
reads into the Committee Report something which it had
not contemplated, that is, to propose SB No. 1630 in
substitution of HB No. 11197; or speculates that the
Committee may have committed an error in stating that it
is SB No. 1129, and not HB No. 11197, which is to be
substituted by SB No. 1630. Either, of course, is
unwarranted because the words of the Report, solemnly
signed by the Chairman, Vice-Chairman (who 24dissented),
seven members, and three ex-officio members, leave no
room for doubt that although SB No. 1129, P.S. Res No.
734, and HB No. 11197 were referred to and considered by
the Committee, it had prepared the attached SB No. 1630
which it recommends for approval “in

________________

23 Consolidated Memorandum for Respondents, 55-56.


24 Consolidated Memorandum for Respondents, Annex “17.” Two signed
with reservations and four signed subject to amendments.

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substitution of S.B. No. 11197, taking into consideration


P.S. No. 734 and H.B. No. 11197 with Senators Herrera,
Angara, Romulo, Sotto, Ople and Shahani as authors.” To
do as suggested would be to substitute the judgment of the
Committee with another that is completely inconsistent
with it, or, simply, to capriciously ignore the facts.
In the second place, the Office of the Solicitor General
intentionally made it appear, to mislead rather 25
than to
persuade us, that in Flint vs. Stone Tracy Co. the U.S.
Supreme Court ruled, as quoted by it in 26the Consolidated
Memorandum for Respondents, as follows:

“The Senate has the power to amend a revenue bill. This power to
amend is not confined to the elimination of provisions contained
in the original act, but embraces as well the addition of such
provisions thereto as may render the original act satisfactory to
the body which is called upon to support it. It has, in fact, been
held that the substitution of an entirely new measure for the one
originally proposed can be supported as a valid amendment.
x x x      x x x      x x x
It is contended in the first place that this section of the act is
unconstitutional, because it is a revenue measure, and originated
in the Senate in violation of section 7 of article 1 of the
Constitution, providing that ‘all bills for raising revenue shall
originate in the House of Representatives, but the Senate may
propose or concur with the amendments, as on other bills.’ ”

The first part is not a statement of the Court, but a


summary of the arguments of counsel in one of the
companion cases (No. 425, entitled, “Gay vs. Baltic Mining
Co.”). The second part is the second paragraph of the
opinion of the Court delivered by Mr. Justice Day. The
misrepresentation that the first part is a statement of the
Court is highly contemptuous. To show such deliberate
misrepresentation, it is well to quote what actually are
found in 55 L.Ed. 408, 410, to wit:

“Messrs. Charles A. Snow and Joseph H. Knight filed a brief for


appellees in No. 425:

_______________

25 And companion cases, 220 U.S. 107, 55 L.Ed. 389 [1911].


26 Page 56.

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x     x     x
The Senate has the power to amend a revenue bill. This power
to amend is not confined to the elimination of provisions
contained in the original act, but embraces as well the addition of
such provisions thereto as may render the original act satisfactory
to the body which is called upon to support it. It has, in fact, been
held that the substitution of an entirely new measure for the one
originally proposed can be supported as a valid amendment.
Brake v. Collison, 122 Fed. 722.
Mr. James L. Quackenbush filed a statement for appellees in
No. 442.
Solicitor General Lehmann (by special leave) argued the cause
for the United States on reargument.
Mr. Justice Day delivered the opinion of the court:

These cases involve the constitutional validity of § 38 of the act of


Congress approved August 5, 1909, known as ‘the corporation tax’ law. 36
Stat. at L. 11, 112-117, chap. 6, U.S. Comp. Stat. Supp. 1909, pp. 659,
844-849.
It is contended in the first place that this section of the act is
unconstitutional, because it is a revenue measure, and originated in the
Senate in violation of § 7 of article 1 of the Constitution, providing that
‘all bills for raising revenue shall originate in the House of
Representatives, but the Senate may propose or concur with the
amendments, as on other bills.’ The history of the act is contained in the
government’s brief, and is accepted as correct, no objection being made to
its accuracy.
This statement shows that the tariff bill of which the section under
consideration is a part, originated in the House of Representatives, and
was there a general bill for the collection of revenue. As originally
introduced, it contained a plan of inheritance taxation. In the Senate the
proposed tax was removed from the bill, and the corporation tax, in a
measure, substituted therefor. The bill having properly originated in the
House, we perceive no reason in the constitutional provision relied upon
why it may not be amended in the Senate in the manner which it was in
this case. The amendment was germane to the subject-matter of the bill,
and not beyond the power of the Senate to propose.” (Emphasis supplied)
x     x     x

As shown above, the underlined portions were deliberately


omitted in the quotation made by the Office of the Solicitor
General.
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In the third place, a Senate amendment by substitution


with an entirely new bill of a bill, which under Section 24,
Article VI of the Constitution can only originate exclusively
in the House, is not authorized by said Section 24. Flint vs.
Stone Tracy Co. cannot be invoked in favor of such a view.
As pointed out by Mr. Justice Florenz D. Regalado during
the oral arguments of these cases and during the initial
deliberations thereon by the Court, Flint involves a Senate
amendment to a revenue bill which, under the United
States Constitution, should originate from the House of
Representatives. The amendment consisted of the
substitution of a corporation tax in lieu of the plan of
inheritance taxation contained in a general bill for the
collection of revenue as it came from the House of
Representatives where the bill originated. The
constitutional provision in question is Section 7, Article I of
the United States Constitution which reads:

“Section 7. Bills and Resolutions.—All Bills for raising Revenue


shall originate in the House of Representatives; but the Senate
may propose or concur with Amendments, as on other Bills.”

This provision, contrary to the misleading claim of the


Solicitor General, is not similar to Section 24, Article VI of
our Constitution, which for easy comparison is hereunder
quoted again:

“All appropriation, revenue or tariff bills, bills authorizing


increase of the public debt, bills of local application, and private
bills shall originate exclusively in the House of Representatives,
but the Senate may propose or concur with amendments.”

Note that in the former the word exclusively does not


appear. And, in the latter, the phrase “as on other Bills,”
which is found in the former, does not appear. These are
very significant in determining the authority of the upper
chamber over the bills enumerated in Section 24. Since the
origination is not exclusively vested in the House of
Representatives of the United States, the Senate’s
authority to propose or concur with amendments is
necessarily broader. That broader authority is further
confirmed by the phrase “as on other Bills,” i.e., its power
to propose or concur with amendments thereon is the same
as in ordinary bills. The absence of this phrase in our
Constitution was clearly intended to restrict or limit the
Philippine Senate’s power to
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Tolentino vs. Secretary of Finance

propose or concur with amendments. In the light of the


exclusivity of origination and the absence of the phrase “as
on other Bills,” the Philippine Senate cannot amend by
substitution with an entirely new bill of its own any bill
covered by Section 24 of Article VI which the House of
Representatives transmitted to it because such substitution
would indirectly violate Section 24.
These obvious substantive differences between Section
7, Article I of the U.S. Constitution and Section 24, Article
VI of our Constitution are enough reasons why this Court
should neither allow itself to be misled by
27
Flint vs. Stone
nor be awed by Rainey vs. 28United States and the opinion
of Messrs. Ogg and Ray which the majority cites to
support the view that the power of the U.S. Senate to
amend a revenue measure is unlimited. Rainey concerns
the Tariff Act of 1909 of the United States of America and
specifically involved was its Section 37 which was an
amendment introduced by the U.S. Senate. It was claimed
by the petitioners that the said section is a revenue
measure which should originate in the House of
Representatives. The U.S. Supreme Court, however,
adopted and approved the finding of the court a quo that:

“the section in question is not void as a bill for raising revenue


originating in the Senate, and not in the House of
Representatives. It appears that the section was proposed by the
Senate as an amendment to a bill for raising revenue which
originated in the House. That is sufficient.”

Messrs. Ogg and Ray, who are professors emeritus of


political science, based their statement not even on a case
decided by the U.S. Supreme Court but on their perception
of what Section 7, Article I of the U.S. Constitution
permits. In the tenth edition (1951) of their work, they
state:

“Any bill may make its first appearance in either house, except
only that bills for raising revenue are required by the constitution
to ‘originate’ in the House of Representatives. Indeed, through its
right to amend revenue bills, even to the extent of substituting
new ones, the

________________

27 232 U.S. 309, 58 L ed. 117 [1914].


28 Introduction to American Government, 309, n. 2 [1945].

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Tolentino vs. Secretary of Finance
29
Senate may, in effect, originate them also.”

Their “in effect” conclusion is, of course, logically correct


because the word exclusively does not appear in said
Section 7, Article I of the U.S. Constitution.
Neither can I find myself in agreement with the view of
the majority that the Constitution does not 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, thereby stating, in effect, that S.B. No. 1129 was such
an anticipatory substitute bill, which, nevertheless, does
not seem to have been considered by the Senate except only
after its receipt of H.B. No. 11197 on 23 November 1993
when the process of legislation in respect of it began with a
referral to the Senate Committee on Ways and Means.
Firstly, to say that the Constitution does not prohibit it is
to render meaningless Section 24 of Article VI or to
sanction its blatant disregard through the simple expedient
of filing in the Senate of a so-called anticipatory substitute
bill. Secondly, it suggests that S.B. No. 1129 was filed as an
anticipatory measure to substitute for H.B. No. 11197. This
is a speculation which even the author of S.B. No. 1129
may not have indulged in. S.B. No. 1129 was filed in the
Senate by Senator Herrera on 1 March 1993. H.B. No.
11197 was approved by the House on third reading only on
17 November 1993. Frankly, I cannot believe that Senator
Herrera was able to prophesy that the House would pass
any VAT bill, much less to know its provisions. That “it
does not seem that the Senate even considered” the latter
not until after its receipt of H.B. No. 11197 is another
speculation. As stated earlier, S.B. No. 1129 was filed in
the Senate on 1 March 1993, while H.B. No. 11197 was
transmitted to the Senate only on 18 November 1993.
There is no evidence on record to show that both were
referred to the Senate Committee on Ways and Means at
the same time. Finally, in respect of H.B. No. 11197, its
legislative process did not begin with its referral to the
Senate’s Ways and Means Committee. It begin upon its
filing, as a Committee Bill of the House Committee on
Ways and Means, in the House.

_______________

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29 At 317.

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Second violation.—Since SB No. 1129 is a revenue


measure, it could not even be validly introduced or initiated
in the Senate. It follows too, that the Senate cannot validly
act thereon.
Third violation.—Since SB No. 1129 could not have been
validly introduced in the Senate and could not have been
validly acted on by the Senate, then it cannot be
substituted by another revenue measure, SB No. 1630,
which the Senate Committee on Ways and Means
introduced in substitution of SB No. 1129. The filing or
introduction in the Senate of SB No. 1630 also violated
Section 24, Article VI of the Constitution.

VIOLATIONS OF SECTION 26(2), ARTICLE VI OF


THE CONSTITUTION:

First violation.—The Senate, despite its lack of


constitutional authority to consider SB No. 1630 or SB No.
1129 which the former substituted, opened deliberations on
second reading of SB No. 1630 on 8 February 1994. On 24
March 1994, the 30 Senate approved it on second reading and
on third reading. That approval on the same day violated
Section 26(2), Article VI of the Constitution. The
justification therefor was that on 24 February 1994 the
President certified to “the necessity of the31 enactment of SB
No. 1630 . . . to meet a public emergency.”
I submit, however, that the Presidential certification is
void ab initio not necessarily for the reason adduced by
petitioner Kilosbayan, Inc., but because it was addressed to
the Senate for a bill which is prohibited from originating
therein. The only bill which could be properly certified on
permissible constitutional grounds even if it had already
been transmitted to the Senate is HB No. 11197. As earlier
observed, this was not so certified, although HB No. 9210
(one of those consolidated
32
into HB No. 11197) was certified
on 1 June 1993.
Also, the certification of SB No. 1630 cannot, by any
stretch of the imagination, be extended to HB No. 11197
because SB No. 1630 did not substitute HB No. 11197 but
SB No. 1129.

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_______________

30 Consolidated Memorandum for Respondents, 20-21.


31 Id., Annex “14.”
32 Id., Annex “1.”

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Considering that the certification of SB No. 1630 is void, its


approval on second and third readings in one day violated
Section 26(2), Article VI of the Constitution.
Second violation.—It further appears that on 24 June
1994, after the approval of SB No. 1630, the Secretary of
the Senate, upon directive of the Senate President,
formally notified the House Speaker of the Senate’s
approval thereof and its request for a bicameral conference
“in view of the disagreeing
33
provisions of said bill and House
Bill No. 11197.”
It must be stressed again that HB No. 11197 was never
submitted for or acted on second and third readings in the
Senate, and SB No. 1630 was never sent to the House for
its concurrence. Elsewise stated, both were only half-way
through the legislative mill. Their submission to a
conference committee was not only anomalously
premature, but violative of the constitutional rule on three
readings.
The suggestion that SB No. 1630 was not required to be
submitted to the House for otherwise the procedure would
be endless, is unacceptable for, firstly, it violates Section
26, Rule XII of the Rules of the Senate and Section 85, Rule
XIV of the Rules of the House, and, secondly, it is never
endless. If the chamber of origin refuses to accept the
amendments of the other chamber, the request for
conference shall be made.

VIOLATIONS OF THE RULES OF BOTH


CHAMBERS; GRAVE ABUSE OF DISCRETION.

The erroneous referral to the conference committee needs


further discussion. Since S.B. No. 1630 was not a
substitute bill for H.B. No. 11197 but for S.B. No. 1129, it
(S.B. No. 1630) remained a bill which originated in the
Senate. Even assuming arguendo that it could be validly
initiated in the Senate, it should have been first
transmitted to the House where it would undergo three
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readings. On the other hand, since HB No. 11197 was


never acted upon by the Senate on second and third
readings, no differences or inconsistencies could as yet
arise so as to warrant a request for a conference. It should
be noted that under Section

_______________

33 Consolidated Memorandum for Respondents, Annex “18.”

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83, Rule XIV of the Rules of the House, it is only when the
Senate shall have approved with amendments HB No.
11197 and the House declines to accept the amendments
after having been notified thereof that the request for a
conference may be made by the House, not by the Senate.
Conversely, the Senate’s request for a conference would
only be proper if, following the transmittal of SB No. 1630
to the House, it was approved by the latter with
amendments but the Senate rejected the amendments.
Indisputably then, when the request for a bicameral
conference was made by the Senate, SB No. 1630 was not
yet transmitted to the House for consideration on three
readings and HB No. 11197 was still in the Senate
awaiting consideration on second and third readings. Their
referral to the bicameral conference committee was
palpably premature and, in so doing, both the Senate and
the House acted without authority or with grave abuse of
discretion. Nothing, and absolutely nothing, could have
been validly acted upon by the bicameral conference
committee.

GRAVE ABUSE OF DISCRETION COMMITTED BY


THE BICAMERAL CONFERENCE COMMITTEE.

Serious irregularities amounting to lack of jurisdiction or


grave abuse of discretion were committed by the bicameral
conference committee.
First, it assumed, and took for granted that SB No. 1630
could validly originate in the Senate. This assumption is
erroneous.
Second, it assumed that HB No. 11197 and SB No. 1630
had properly passed both chambers of Congress and were

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properly and regularly submitted to it. As earlier discussed,


the assumption is unfounded in fact.
Third, per the bicameral conference committee’s
proceedings of 19 April 1994, Representative Exequiel
Javier, Chairman of the panel from the House, initially
suggested that HB No. 11197 should be the “frame of
reference,” because it is a revenue measure, to which
Senator Ernesto Maceda concurred. However, after an
incompletely recorded reaction of Senator Ernesto Herrera,
Chairman of the Senate panel, Representative Javier
seemed to agree that “all amendments will be coming from
the Senate.” The issue of what should be the “frame of
reference” does not appear to have been resolved. These
facts are recorded
749

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Tolentino vs. Secretary of Finance

in this wise, as 34quoted in the Consolidated Memorandum


for Respondents:

  Yes. That’s true for every revenue measure. There’s no


other way. The House Bill has got to be the base. Of
course, for the record, we know that this is an
administration; this is certified by the President and I
was about to put into the recordsas I am saying now that
your problem about the impact on prices on the people
was already decided when the President and the
administration sent this to us and certified it. They have
already gotten over that political implication of this bill
and the economic impact on prices.
“CHAIRMAN JAVIER.
  First of all, what would be the basis, no, or framework
para huwag naman mawala yung personality namin dito
sa bicameral, no, because the bill originates from the
House because this is a revenue bill, so we would just
want to ask, we make the House Bill as the frame of
reference, and then everything will just be inserted?
HON. MACEDA.
CHAIRMAN HERRERA.
  Yung concern mo about the bill as the reference in this
discussion is something that we can just . . .
CHAIRMAN JAVIER.

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  Yes. That’s true for every revenue measure. There’s no


other way. The House Bill has got to be the base. Of
course, for the record, we know that this is an
administration; this is certified by the President and I
was about to put into the recordsas I am saying now that
your problem about the impact on prices on the people
was already decided when the President and the
administration sent this to us and certified it. They have
already gotten over that political implication of this bill
and the economic impact on prices.
  We will just . . . all the amendments will be coming from
the Senate.
(BICAMERAL CONFERENCE ON MAJOR
DIFFERENCES BETWEEN HB NO. 11197 AND SB NO.
1630 [Cte. on Ways & Means] APRIL 19, 1994, II-6 and II-
7; italics supplied)”

These exchanges would suggest that Representative Javier


had wanted HB No. 11197 to be the principal measure on
which reconciliation of the differences should be based.
However, since the Senate did not act on this Bill on second
and third readings because its Committee on Ways and
Means did not deliberate on it but instead proposed SB No.
1630 in substitution of SB No. 1129, the suggestion has no
factual basis. Then, when finally he agreed that “all
amendments will be coming from the Senate,” he

_______________

34 Page 22.

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in fact withdrew the former suggestion and agreed that SB


No. 1630, which is the Senate version of the Value Added
Tax (VAT) measure, should be the “frame of reference.” But
then SB No. 1630 was never transmitted to the House for
the latter’s concurrence. Hence, it cannot serve as the
“frame of reference” or as the basis for deliberation. The
posture taken by Representative Javier also indicates that
SB No. 1630 should be taken as the amendment to HB No.
11197. This, too, is unfounded because SB No. 1630 was
not proposed in substitution of HB No. 11197.
Since SB No. 1630 did not pass three readings in the
House and HB No. 11197 did not pass second and third
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readings in the Senate, it logically follows that no


disagreeing provisions had as yet arisen. The bicameral
conference committee erroneously assumed the contrary.
Even granting arguendo that both HB No. 11197 and SB
No. 1630 had been validly approved by both chambers of
Congress and validly referred to the bicameral conference
committee, the latter had very limited authority thereon. It
was created
35
“in view of the disagreeing provisions of” the
two bills. Its duty was limited to the reconciliation of
disagreeing provisions or the resolution of differences or
inconsistencies. The committee recognized that36 limited
authority in the opening paragraph of its Report when it
said:

“The Conference Committee on the disagreeing provisions of


House Bill No. 11197 x x x and Senate Bill No. 1630 x x x.”

Under such limited authority, it could only either (a)


restore, wholly or partly, the specific provisions of HB No.
11197 amended by SB No. 1630, (b) sustain, wholly or
partly, the Senate’s amendments, or (c) by way of a
compromise, to agree that neither provisions in HB No.
11197 amended by the Senate nor the latter’s amendments
thereto be carried into the final form of the former.
But as pointed out by petitioners Senator Raul Roco and
Kilosbayan, Inc., the bicameral conference committee not
only

_______________

35 Consolidated Memorandum for Respondents, Annex “18.”


36 Id., Annex, “19.”

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struck out non-disagreeing provisions of HB No. 11197 and


SB No. 1630, i.e., provisions where both bills are in full
agreement; it added more activities or transactions to be
covered by VAT, which were not within the contemplation
of both bills. Since both HB No. 11197 and SB No. 1630
were still half-cooked in the legislative vat, and were not
ready for referral to a conference, the bicameral conference
committee clearly acted without jurisdiction or with grave
abuse of discretion when it consolidated both into one bill
which became R.A. No. 7716.

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APPROVAL BY BOTH CHAMBERS OF


CONFERENCE COMMITTEE REPORT AND
PROPOSED BILL DID NOT CURE
CONSTITUTIONAL INFIRMITIES.

I cannot agree with the suggestion that since both the


Senate and the House had approved the bicameral
conference committee report and the bill proposed by it in
substitution of HB No. 11197 and SB No. 1630, whatever
infirmities may have been committed by it were cured by
ratification. This doctrine of ratification may apply to
minor procedural flaws or tolerable breaches of the
parameters of the bicameral conference committee’s limited
powers but never to violations of the Constitution.
Congress is not above the Constitution. In the instant case,
since SB No. 1630 was introduced in violation of Section 24,
Article VI of the Constitution, was passed in the Senate in
violation of the “three readings” rule, and was not
transmitted to the House for the completion of the
constitutional process of legislation, and HB No. 11197 was
not likewise passed by the Senate on second and third
readings, neither the Senate nor the House could validly
approve the bicameral conference committee report and the
proposed bill.
In view of the foregoing, the conclusion is inevitable that
for non-compliance with mandatory provisions of the
Constitution and of the Rules of the Senate and of the
House on the enactment of laws, R.A. No. 7716 is
unconstitutional and, therefore, null and void. A discussion
then of the intrinsic validity of some of its provisions would
be unnecessary.
The majority opinion, however, invokes the enrolled bill
doctrine and wants this Court to desist from looking behind
the copy of the assailed measure as certified by the Senate
President and the
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Tolentino vs. Secretary of Finance

Speaker of the House. I respectfully submit that the


invocation is misplaced. First, as to the issue of origination,
the certification in this case explicitly states that R.A. No.
7716 is a “consolidation of House Bill No. 11197 and Senate
Bill No. 1630.” This is conclusive evidence that the measure
did not originate exclusively in the House. Second, the
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enrolled bill doctrine is of American origin, and


unquestioned fealty to it may37
no longer be justified in view
of the expanded jurisdiction of this Court under Section 1,
Article VIII of our Constitution which now expressly grants
authority to this Court to:

“determine whether or not there has been a grave abuse of


discretion amounting to lack or excess of jurisdiction on the part
of any branch or instrumentality of the Government.”

Third, even under the regime of the 1935 Constitution


which did not contain the above provision, this Court,
through 38Mr. Chief Justice Makalintal, in Astorga vs.
Villegas, declared that39 it cannot be truly said that
Mabanag vs. Lopez Vito has laid to rest the question of
whether the enrolled bill doctrine or the journal entry rule
should be adhered to in this jurisdiction, and stated:

“As far as Congress itself is concerned, there is nothing sacrosanct


in the certification made by the presiding officers. It is merely a
mode of authentication. The lawmaking process in Congress ends
when the bill is approved by both Houses, and the certification
does not add to the validity of the bill or cure any defect already
present upon its passage. In other words, it is the approval of
Congress and not the signatures of the presiding officers that is
essential. Thus the (1935) Constitution says that ‘[e]very bill
passed by the Congress shall, before it becomes law, be presented
to the President.’ In Brown vs. Morris, supra, the Supreme Court
of Missouri, interpreting a similar provision in the

_______________

37 ISAGANI A. CRUZ, Philippine Political Law, 1991 ed., 226; Daza vs.
Singson, 180 SCRA 496 [1989]; Coseteng vs. Mitra, 187 SCRA 377 [1990];
Gonzales vs. Macaraig, 191 SCRA 452 [1990]; Llamas vs. Orbos, 202 SCRA 844
[1991]; Bengzon vs. Senate Blue Ribbon Com- mittee, 203 SCRA 767 [1991]; Oposa
vs. Factoran, 224 SCRA 792 [1993].
38 56 SCRA 714, 719, 723 [1974].
39 78 Phil. 1 [1947].

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State Constitution, said that the same ‘makes it clear that the
indispensable step in the passage’ and it follows that if a bill,
otherwise fully enacted as a law, is not attested by the presiding

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officer, other proof that it has ‘passed both houses will satisfy the
constitutional requirement.’ ”

Fourth, even in the United States, the enrolled bill doctrine


has been substantially undercut. This is shown in the
disquisitions of Mr. Justice Reynato S. Puno in his
dissenting opinion, citing Sutherland, Statutory
Construction.
Last, the pleadings of the parties have established
beyond doubt that HB No. 11197 was not acted on second
and third readings in the Senate and SB No. 1630, which
was approved by the Senate on second and third readings
in substitution of SB No. 1129, was never transmitted to
the House for its passage. Otherwise stated, they were only
passed in their respective chamber of origin but not in the
other. In no way can each become a law under paragraph 2,
Section 26, Article VI of the Constitution. For the Court to
close its eyes to this fact because of the enrolled bill
doctrine is to shirk its duty 40
to hold “inviolate what is
decreed by the Constitution.”
I vote then to GRANT these petitions and to declare R.A.
No. 7716 as unconstitutional.

DISSENTING OPINION

ROMERO, J.:

Few issues brought before this Court for resolution have


roiled the citizenry as much as the instant case brought by
nine petitioners which challenges the constitutionality of
Republic Act No. 7716 (to be referred to herein as the
“Expanded Value Added Tax” or EVAT law to distinguish it
from Executive Order No. 273 which is the VAT law
proper) that was enacted on May 5, 1994. A visceral issue,
it has galvanized the populace into mass action and
strident protest even as the EVAT proponents have taken
to podia and media in a post facto information campaign.

________________

40 Mutuc vs. COMELEC, 36 SCRA 228 [1970].

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The Court is confronted here with an atypical case. Not


only is it a vatful of seething controversy but some unlikely
petitioners invoke unorthodox remedies. Three Senator-
petitioners would nullify a statute that bore the
indispensable stamp of approval of their own Chamber
with two of them publicly repudiating what they had
earlier endorsed. With two former colleagues, one of them
an erstwhile Senate President, making common cause with
them, they would stay the implementation by the
Executive Department of a law which they themselves have
initiated. They address a prayer to a co-equal Department
to probe their official acts for any procedural irregularities
they have themselves committed lest the effects of these
aberrations inflict such damage or irreparable loss as
would bring down the wrath of the people on their heads.
To the extent that they perceive that a vital cog in the
internal machinery of the Legislature has malfunctioned
from having operated in blatant violation of the enabling
Rules they have themselves laid down, they would now
plead that this other Branch of Government step in,
invoking the exercise of what is at once a delicate and
awesome power. Undoubtedly, the case at bench is as much
a test for the Legislature as it is for the Judiciary.
A backward glance on the Value Added Tax (VAT) is in
order at this point.
The first codification of the country’s internal revenue
laws was effected with the enactment of Commonwealth
Act No. 466, commonly known as the ‘National Internal
Revenue Code’ which was approved on June 15, 1939 and
took effect on July 1, 1939, although the provisions on the
income tax were made retroactive to January 1, 1939.
“Since 1939 when the turnover tax was replaced by the
manufacturer’s sales tax, the Tax Code had provided for a
single-stage value-added tax on original sales by
manufacturers, producers and importers computed on the
‘cost deduction method’ and later, on the basis of the ‘tax
credit method.’ The turnover tax was re-introduced in 1985
by Presidential Decree No.1 1991 (as amended by
Presidential Decree No. 2006).”

_______________

1 Vitug, Jose C., COMPENDIUM OF TAX LAW AND


JURISPRUDENCE, Third Revised Edition, 1993 at 201.

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Tolentino vs. Secretary of Finance

In 1986, a tax reform package was approved by the Aquino


Cabinet. It contained twenty-nine measures, one of which
proposed the adoption of the VAT, as well as the
simplification of the sales tax structure and the abolition of
the turnover tax.
“Up until 1987, the system of taxing goods consisted of
(a) an excise tax on certain selected articles (b) fixed and
percentage taxes on original and subsequent sales, on
importations and on milled articles and (c) mining taxes on
mineral products. Services were subjected
2
to percentage
taxes based mainly on gross receipts.”
On July 25, 1987, President Corazon C. Aquino signed
into law Executive Order No. 273 which adopted the VAT.
From the former single-stage value-added tax, it
introduced the multi-stage VAT system where “the value-
added tax is imposed on the sale of and distribution process
culminating in sale, to the final consumer. Generally
described, the taxpayer (the seller) determines his tax
liability by computing the tax on the gross selling price or
gross receipt (“output tax”) and subtracting or crediting the
earlier VAT on the purchase or importation of goods or on
the sale of3 service (“input tax”) against the tax due on his
own sale.”
On January 1, 1988, implementing rules and regulations
for the VAT were promulgated. President Aquino then
issued Proclamation No. 219 on February 12, 1988 urging
the public and private sectors to join the nationwide
consumers’ education campaign for VAT.
Soon after the implementation of Executive Order No.
273, its constitutionality was assailed before this Court in
the case of Kapatiran ng mga Naglilingkod
4
sa Pamahalaan
ng Pilipinas, Inc., et al. v. Tan. The four petitioners sought
to nullify the VAT law “for being unconstitutional in that
its enactment is not allegedly within the powers of the
President; that the VAT is oppressive, discriminatory,
regressive, and violates the due process and equal
protection clauses and other provisions of the 1987

_______________

2 Ibid.
3 Ibid.
4 L-81311, June 30, 1988, 163 SCRA 371 with Justice Teodoro R.
Padilla as ponente.

756

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5
Constitution.” In dismissing the consolidated petitions,
this Court stated:

“The Court, following the time-honored doctrine of separation of


powers cannot substitute its judgment for that of the President as
to the wisdom, justice and advisability of the VAT. The Court can
only look into and determine whether or not Executive Order No.
273 was enacted and made effective as law, in the manner
required by and consistent with, the Constitution, and to make
sure that it was not issued in grave abuse of discretion amounting
to lack or excess of jurisdiction; and, in this regard, the Court
finds no reason6 to impede its application or continued
implementation.”

Although declared constitutional, the VAT law was sought


to be amended from 1992 on by a series of bills filed in both
Houses of Congress. In chronological sequence, these were:

HB/SB No.   Date Filed in Congress


HB No. 253 — July 22, 1992
HB No. 771 — August 10, 1992
HB No. 2450 — September 9, 1992
7
Senate Res. No. 734 — September 10, 1992
HB No. 7033 — February 3, 1993
8
SB No. 1129 — March 1, 1993
HB No. 8086 — March 9, 1993
HB No. 9030 — May 11, 1993

_______________

5 Ibid at 378.
6 Ibid at 385.
7 Senate Resolution No. 734 filed on September 10, 1992 was entitled
“Resolution Urging the House Committee on Ways and Means to Study
the Proposal to Exempt Local Movie Producers from the Payment of the
Value-Added Tax as an Incentive to the Production of Quality and
Wholesome Filipino Movies, Whenever They Feature an All-Filipino Cast
of Actors and Actresses.”
8 SB No. 1129 sought to include under the VAT Law such items as lease
of real properties, excluding agricultural lands and residential properties
with monthly rentals of less than P10,000.00; hotels; restaurants, eating
places, caterers; services by persons in the exercise of their professions;

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actors, actresses, talents, singers and professional athletes; and lawyers,


accountants, doctors and other professionals registered with the
Philippine Regulatory Commission.

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Tolentino vs. Secretary of Finance

9
HB No. 9210 — May 19,
1993
HB No. 9297 — May 25,
1993
HB No. 10012 — July 28,
1993
HB No. 10100 — August 3,
1993
HB No. 11197 in substitution of HB Nos. — November
253, 771, 2450, 7033, 8086,
10
9030, 9210, 5, 1993
9297, 10012 and 10100

We now trace the course taken by H.B. No. 11197 and S.B.
No. 1129.

HB/SB No.    
HB No. 11197 was approved in the Lower — November
House on second reading 11, 1993
HB No. 11197 was approved in the Lower — November
House on third reading and voted upon with 17, 1993
114 Yeas and 12 Nays —
November
18, 1993
HB No. 11197 was transmitted to the Senate — February
Senate Committee on Ways and Means 7, 1994
submitted Com. Report No. 349
recommending for approval SB No. 1630 in
substitution of SB No. 1129, taking into
consideration
11
PS Res. No. 734 and HB No.
11197

_______________

9 On June 1, 1993, President Fidel V. Ramos certified for immediate


enactment House Bill No. 9210 entitled “An Act Amending Title IV and
Sections 237 and 238 of the National Internal Revenue Code, as amended,
to meet a public emergency.”

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10 House Bill No. 11197 is entitled “An Act Restructuring the Value-
Added Tax (VAT) System to Widen its Tax Base and Enhance Its
Administration, Amending for these Purposes Sections 99, 100, 102, 103,
104, 105, 106, 107, 108 and 110 of Title IV, 112, 115 and 116 of Title V,
and 236, 237, and 238 of Title IX and Repealing Sections 113 and 114 of
Title V, all of the National Internal Revenue Code, as Amended.”
11 Senate Bill No. 1630 is entitled “An Act Restructuring The Value-
Added Tax (VAT) System to Widen its Tax Base and Enhance Its
Administration, Amending for these Purposes Sections 99, 100, 102, 103,
104, 105, 107, 108 and 110 of Title IV, 112 of Title V, and 236, 237 and 238
of Title IX, and Repealing Sections 113, 114 and 116 of Title V, all of the
National Internal Revenue Code, as Amended, and for other Purposes.”

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Certification by President Fidel V. Ramos of — March


Senate Bill No. 1630 for immediate enactment 22,
to meet a public emergency 1994
SB No. 1630 was approved by the Senate on — March
second and third readings and subsequently 24,
voted upon with 13 yeas, none against and one 1994
abstention
Transmittal by the Senate to the Lower House — March
of a request for a conference in view of 24,
disagreeing provisions of SB No. 1630 and HB 1994
No. 11197
The Bicameral Conference Committee conducted — April
various meetings to reconcile the proposals on 13,
the VAT 19,
20,
21, 25
The House agreed on the Conference Committee — April
Report 27,
1994
The Senate agreed on the Conference — May
Committee Report 2,
1994
The President signed Republic
12
Act No. 7716— — May
The Expanded VAT Law 5,
1994
Republic Act No. 7716 was published in two — May
newspapers of general circulation 12,
1994

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Republic Act No. 7716 became effective — May


28,
1994

Republic Act No. 7716 merely expanded the base of the


VAT law even as the tax retained its multi-stage character.
At the oral hearing held on July 7, 1994, this Court
delimited petitioners’ arguments to the following issues
culled from their respective petitions.

PROCEDURAL ISSUES
Does Republic Act No.13
7716 violate Article VI, Section 24,
of the Constitution?

________________

12 Republic Act No. 7716 is entitled “An Act Restructuring The Value-
Added Tax (VAT) System, Widening Its Tax Base And Enhancing Its
Administration, And For These Purposes Amending And Repealing The
Relevant Provisions Of The National Internal Revenue Code, as amended,
and for other purposes.”
13 Article VI, Section 24: “All appropriation, revenue or tariff bills
authorizing increase of the public debt, bills of local application, and

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Does it violate
14
Article VI, Section 26, paragraph 2, of the
Constitution?
What is the extent of the power of the Bicameral
Conference Committee?

SUBSTANTIVE ISSUES
Does the law violate the following provisions in Article III
(Bill of Rights) of the Constitution:
15
1. Section 1
16
2. Section 4
17
3. Section 5
18
4. Section 10

_______________

private bills shall originate exclusively in the House of Representatives,


but the Senate may propose or concur with amendments.”

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14 Article VI, Section 26, paragraph 2: “No bill passed by either House
shall become a law unless it has passed three readings on separate days,
and printed copies thereof in its final form have been distributed to its
Members three days before its passage, except when the president
certifies to the necessity of its immediate enactment to meet a public
calamity or emergency. Upon the last reading of a bill, no amendment
thereto shall be allowed, and the vote thereon shall be taken immediately
thereafter, and the yeas and nays entered in the Journal.”
15 Article III, Section 1: “No person shall be deprived of life, liberty, or
property without due process of law, nor shall any person be denied the
equal protection of the laws.”
16 Article III, Section 4: “No law shall be passed abridging the freedom
of speech, of expression, or of the press, or the right of the people
peaceably to assemble and petition the government for redress of
grievances.”
17 Article III, Section 5: “No law shall be made respecting an
establishment of religion, or prohibiting the free exercise and enjoyment of
religious profession and worship, without discrimination or preference,
shall forever be allowed. No religious test shall be required for the exercise
of civil or political rights.”
18 Article III, Section 10: “No law impairing the obligation of contracts
shall be passed.”

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Does the law violate the following other provisions of the


Constitution?
19
1. Article VI, Section 28, paragraph 1
20
2. Article VI, Section 28, paragraph 3

As a result of the unedifying experience of the past where


the Court had the propensity to steer clear of questions it
perceived to be “political” in nature, the present
Constitution, in contrast, has explicitly expanded judicial
power to include the duty of the courts, especially the
Supreme Court, “to determine whether or not there has
been a grave abuse of discretion amounting to lack or
excess of jurisdiction on the part21 of any branch or
instrumentality of the Government.” I submit that under
this explicit mandate, the Court is empowered to rule upon
acts of other Government entities for the purpose of
determining whether there may have been, in fact,
irregularities committed tantamount to violation of the

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Constitution, which case would clearly constitute a grave


abuse of discretion on their part.
In the words of the sponsor of the above-quoted Article
of the Constitution on the Judiciary, the former Chief
Justice Roberto R. Concepcion, “the judiciary is the final
arbiter on the question of whether or not a branch of
government or any of its officials has acted without
jurisdiction or in excess of jurisdiction, or so capriciously as
to constitute an abuse of discretion amounting to excess of
jurisdiction or lack of jurisdiction. This is not only a judicial
power but a duty to pass judgment on matters of this
nature.
This is the background of paragraph 2 of Section 1,
which means that the courts cannot hereafter exhibit its
wonted reticence

_______________

19 Article VI, Section 28, paragraph 1: “The rule of taxation shall be


uniform and equitable. The Congress shall evolve a progressive system of
taxation.”
20 Article VI, Section 28, paragraph 3: “Charitable institutions,
churches and parsonages or convents appurtenant thereto, mosques, non-
profit cemeteries, and all lands, buildings, and improvements, actually,
directly, and exclusively used for religious, charitable, or educational
purposes shall be exempt from taxation.”
21 Constitution, Article VIII, Section 1.

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Tolentino vs. Secretary of Finance

by claiming22
that such matters constitute a political
question.”
In the instant petitions, this Court is called upon, not so
much to exercise its traditional power of judicial review as
to determine whether or not there has indeed been a grave
abuse of discretion on the part of the Legislature
amounting to lack or excess of jurisdiction.
Where there are grounds to resolve a case without
touching on its constitutionality, the Court will do so with
utmost alacrity in due deference to the doctrine of
separation of powers anchored on the respect that must be
accorded to the other branches of government which are
coordinate, coequal and, as far as practicable, independent
of one another.

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Once it is palpable that the constitutional issue is


unavoidable, then it is time to assume jurisdiction,
provided that the following requisites for a judicial inquiry
are met: that there must be an actual and appropriate case;
a personal and substantial interest of the party raising the
constitutional question; the constitutional question must be
raised at the earliest possible opportunity and the decision
of the constitutional question must be necessary to the
determination
23
of the case itself, the same being the lis mota
of the case.
Having assured ourselves that the above-cited requisites
are present in the instant petitions, we proceed to take
them up.

ARTICLE VI, SECTION 24


Some petitioners assail the constitutionality of Republic
Act No. 7716 as being in violation of Article VI, Section 24
of the Constitution which provides:

“All appropriation, revenue or tariff bills, bills authorizing


increase of the public debt, bills of local application, and private
bills, shall originate exclusively in the House of Representatives,
but the Senate may propose or concur with amendments.”

_______________

22 Volume One, CONCOM RECORD, p. 436.


23 Luz Farms v. The Hon. Secretary of the Department of Agrarian
Reform, G.R. No. 86889, December 4, 1990, 192 SCRA 51; Dumlao, et al.
v. Commission on Elections, G.R. No. 52245, January 22, 1980, 95 SCRA
392; People v. Vera, 65 Phil. 56 (1937).

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Tolentino vs. Secretary of Finance

In G.R. Nos. 115455 and 115781, petitioners argue:

(a) The bill which became Republic Act No. 7716 did
not originate exclusively in the House of
Representatives. The Senate, after receiving H.B.
No. 11197, submitted its own bill, S.B. No. 1630,
and proceeded to vote and approve the same after
second and third readings.
(b) The Senate exceeded its authority to “propose or
concur with amendments” when it submitted its
own bill, S.B. No. 1630, recommending its approval
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“in substitution of S.B. No. 1129, taking into


consideration P.S. Res. No. 734 and H.B. No.
11197.”
(c) H.B. No. 11197 was not deliberated upon by the
Senate. Neither was it voted upon by the Senate on
second and third readings, as what was voted upon
was S.B. No. 1630.

Article VI, Section 24 is taken word for word from Article


VI, Section 18 of the 1935 Constitution which was, in turn,
patterned after Article I, Section 7 (1) of the Constitution of
the United States, which states:

“All bills for raising revenue shall originate in the House of


Representatives, but the Senate may propose or concur with
amendments as on other bills.”

The historical precedent for requiring revenue bills to


originate in Congress
24
is explained in the U.S. case of
Morgan v. Murray:

“The constitutional requirement that all bills for raising revenue


shall originate in the House of Representatives stemmed from a
remedial outgrowth of the historic conflict between Parliament
(i.e., Commons) and the Crown, whose ability to dominate the
monarchially appointive and hereditary Lords was patent. See 1
Story, Constitution, S 875 et seq., 5th Ed.; 1 Cooley,
Constitutional Limitations, pp. 267, 268, 8th Ed., 1 Sutherland,
Statutory Construction, S 806, 3d Ed. There was a measure of like
justification for the insertion of the provision of articles I, S 7, cl.
1, of the Federal Constitution. At that time (1787) and thereafter
until the adoption (in 1913) of the Seventeenth Amendment
providing for the direct election of senators, the members of the
United States Senate were elected for each state by the joint vote
of both houses of the Legislature of the respective states, and
hence, were removed from the people. x x x”

________________

24 328 P. 2d 644 (1958).

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The legislative authority under the 1935 Constitution being


unicameral, in the form of the National Assembly, it served

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no purpose to include the subject provision in the draft


submitted by the 1934 Constitutional Convention to the
Filipino people for ratification.
In 1940, however, the Constitution was amended to
establish a bicameral Congress of the Philippines composed
of a House of Representatives and a Senate.
In the wake of the creation of a new legislative
machinery, new provisions were enacted regarding the law-
making power of Congress. The National Assembly
explained how the final formulation of the subject provision
came about:

“The concurrence of both houses would be necessary to the


enactment of a law. However, all appropriation, revenue or tariff
bills, bills authorizing an increase of the public debt, bills of local
application, and private bills, should originate exclusively in the
House of Representatives, although the Senate could propose or
concur with amendments.
In one of the first drafts of the amendments, it was proposed to
give both houses equal powers in lawmaking. There was, however,
much opposition on the part of several members of the Assembly.
In another draft, the following provision, more restrictive than the
present provision in the amendment, was proposed and for
sometime was seriously considered:

‘All bills appropriating public funds, revenue or tariff bills, bills of local
application, and private bills shall originate exclusively in the Assembly,
but the Senate may propose or concur with amendments. In case of
disapproval by the Senate of any such bills, the Assembly may repass the
same by a two-thirds vote of all its members, and thereupon, the bill so
repassed shall be deemed enacted and may be submitted to the President
for corresponding action. In the event that the Senate should fail to
finally act on any such bills, the Assembly may, after thirty days from the
opening of the next regular sessions of the same legislative term,
reapprove the same with a vote of two-thirds of all the members of the
Assembly. And upon such reapproval, the bill shall be deemed enacted
and may be submitted to the president for corresponding action.’

However, the special committee voted finally to report the


present amending provision as it is now worded; and in that form
it was approved by the National Assembly with the approval of
Resolution No.

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25
38 and later of Resolution No. 73.” (Italics supplied)

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Thus, the present Constitution is identically worded as its


1935 precursor: “All appropriation, revenue or tariff bills,
bills authorizing increase of the public debt, bills of local
application, and private bills, shall originate exclusively in
the House of Representatives, but the Senate may propose
or concur with amendments.” (Italics supplied)
That all revenue bills, such as Republic Act No. 7716,
should “originate exclusively in the House of
Representatives” logically flows from the more
representative and broadly-based character of this
Chamber.
“It is said that the House of Representatives being the
more popular branch of the legislature, being closer to the
people, and having more frequent contacts with them than
the Senate, should have the privilege of taking the
initiative in the proposals of revenue and tax projects, the
disposal of the people’s money, and the contracting of
public indebtedness.
These powers of initiative in the raising and spending of
public funds enable the House of Representatives not only
to implement but even to determine the fiscal policies of
the government. They place on its shoulders much of the
responsibility of solving the financial problems of the
government, which are so closely related to the economic
life of the country, and of deciding on the proper
distribution of revenues
26
for such uses as may best advance
public interests.”
The popular nature of the Lower House has been more
pronounced with the inclusion of Presidentially-appointed
sectoral representatives, as provided in Article VI, Section
5(2), of the Constitution, thus: “The party-list
representatives shall constitute twenty per centum of the
total number of representatives including those under the
party list. For three consecutive terms after the ratification
of this Constitution, one-half of the seats allocated to party-
list representatives shall be filled, as provided by law, by

________________

25 Aruego, Jose M., PHILIPPINE POLITICAL LAW, KNOW YOUR


CONSTITUTION, University Publishing Co., 1950, pp. 65-66.
26 Sinco, Vicente G., PHILIPPINE POLITICAL LAW, Eleventh Edition,
p. 196.

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selection or election from the labor, peasant, urban poor,


indigenous cultural communities, women, youth, and such
other sectors as may be provided by law, except the religious
sector.” (Italics supplied)
This novel provision which was implemented in 27
the
Batasang Pambansa during the martial law regime was
eventually incorporated in the present Constitution in
order to give those from

_______________

27 Remarks of Commissioner Eulogio Lerum: “At a time when we did


not have a lawmaking body after martial law was declared, there were
tripartite conferences called by the President for the purpose of acting as a
recommendatory body regarding settlement of labor and management
disputes. During the said conferences, labor had shown that it can act
with maturity. As a result, in 1976, an amendment was introduced in the
Constitution providing for sectoral representation. In the Constitution
that was approved, the number of sectors was not indicated. However, in
the Election Code of 1978, it provided for three sectors; namely, industrial
labor, agricultural labor and the youth. The agricultural labor was given
four seats; two for Luzon, one for the Visayas and one for Mindanao. The
same is true with the industrial labor sector. As far as the youth are
concerned, they were also given four seats: two for Luzon, one for
Mindanao and one for the Visayas, with the condition that there will be an
additional two at large. And so, the youth had six representatives plus
four from the agricultural labor sector and four from the industrial labor
sector—we had 14 seats.
In 1981, the Constitution was again amended. In the course of the
amendment, the labor representatives in the Batasang Pambansa
proposed that sectoral representation be included as a permanent addition
to the lawmaking body.
Again, in that Constitution which was approved in 1981, the number
and the name of the sectors were not indicated. However, in the Election
Code that was approved before the 1984 election, there was really a
definition of who will constitute the sectors and how they will be
appointed. Let me quote from that law that was passed in 1984. Under
Section 27 of Batas Pambansa Blg. 881, the scope of the sectors has been
defined as follows:
The agricultural labor sector covers all persons who personally and
physically till the land as their principal occupation. It includes
agricultural tenants and lessees, rural workers and farm employees,
owner-cultivators, settlers and small fishermen.
The industrial labor sector includes all nonagricultural workers and
employees.

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Tolentino vs. Secretary of Finance

the marginalized and often deprived sector, an opportunity


to have their voices heard in the halls of the Legislature,
thus giving substance and meaning to the concept of
“people empowerment.”
That the Congressmen indeed have access to, and
consult their constituencies has been demonstrated often
enough by the fact that even after a House bill has been
transmitted to the Senate for concurrence, some
Congressmen have been known to express their desire to
change their earlier official position or reverse themselves
after having heard their constituents’ adverse reactions to
their representations.
In trying to determine whether the mandate of the
Constitution with regard to the initiation of revenue bills
has been preserved inviolate, we have recourse to the tried
and tested method of definition of terms. The term
“originate” is defined by Webster’s New International
Dictionary (3rd Edition, 1986) as follows: “v.i., to come into
being; begin; to start.”
On the other hand, the word “exclusively” is defined by
the same Webster’s Dictionary as “in an exclusive manner;
to the exclusion of all others; only; as, it is his, exclusively.”
Black’s Law Dictionary has this definition: “apart from all
others; only; solely; substantially all or for the greater part.
To the exclusion of all others; without admission of others
to participation; in a manner to exclude. Standard Oil Co.
of Texas v. State, Tex. Civ. App., 142 S.W. 2d 519, 521, 522,
523.”
This Court had occasion to define the term “exclusive” as
follows:

“. . . In its usual and generally accepted sense, the term means


possessed to the exclusion of others; appertaining to the subject
alone; not including,
28
admitting or pertaining to another or others;
undivided, sole.”

When this writer, during the oral argument of July 7, 1994,


asked the petitioner in G.R. No. 115455 whether he
considers the

________________

The youth sector embraces persons not more than twenty-five years of
age.” (Volume Two, CONCOM RECORD, p. 564).
28 City Mayor, et al. v. The Chief, Philippine Constabulary and Col.
Nicanor Garcia, L-20346, October 31, 1967, 21 SCRA 673.

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word “exclusively” to be29 synonymous with “solely,” he


replied in the affirmative.
A careful examination of the legislative history traced
earlier in this decision shows that the original VAT law,
Executive Order No. 273, was sought to be amended by ten
House bills which finally culminated in House Bill No.
11197, as well as two Senate bills. It is to be noted that the
first House Bill No. 253 was filed on July 22, 1992, and two
other House bills followed in quick succession on August 10
and September 9, 1992 before a Senate Resolution, namely,
Senate Res. No. 734, was filed on September 10, 1992 and
much later, a Senate Bill proper, viz., Senate Bill No. 1129
on March 1, 1993. Undoubtedly, therefore, these bills
originated or had their start in the House and before any
Senate bill amending the VAT law was filed. In point of
time and venue, the conclusion is ineluctable that Republic
Act No. 7716, which is indisputably a revenue measure,
originated in the House of Representatives in the form of
House Bill No. 253, the first EVAT bill.
Additionally, the content and substance of the ten
amendatory House Bills filed over the roughly one-year
period from July 1992 to August 1993 reenforce the
position that these revenue bills, pertaining as they do, to
Executive Order No. 273, the prevailing VAT law,
originated in the Lower House.

________________

29 Transcript of the Stenographic Notes (TSN) on the Hearing Had on


Thursday, July 7, 1994, pp. 18-19: JUSTICE FLERIDA RUTH P.
ROMERO:

Q—Mr. Counsel, may I interrupt at this stage?

          When you say that according to the Constitution such Revenue Bills should
originate exclusively from the House. In this instance, did it not originally
originate exclusively from the House?
     The word used was not “solely”; if there were Bills later also introduced, let
us say in the Senate, but the House Bill came ahead.
          So, are you using the two (2) words originate “exclusively” and “solely”
synonymously?

SENATOR TOLENTINO:

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A—The verb “originate” remains the same, Your Honor, but the word
“exclusively,” as I said, means “solely.” x x x

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House Bill Nos. 253, 771, 2450, 7033, 8086, 9030, 9210,
9297, 10012 and 10100 were intended to restructure the
VAT system by exempting or imposing the tax on certain
items or otherwise
30
introducing reforms in the mechanics of
implementation. Of these, House Bill No. 9210 was
favored with a Presidential certification on the need for its
immediate enactment to meet a public emergency. Easily
the most comprehensive, it noted that the revenue
performance of the VAT, being far from satisfactory since
the collections have always fallen short of projections, “the
system is rendered inefficient, inequitable and less
comprehensive.” Hence, the Bill proposed several
amendments designed to widen31 the tax base of the VAT
and enhance its administration.
That House Bill No. 11197 being a revenue bill,
originated from the Lower House was acknowledged, in
fact was virtually taken for granted, by the Chairmen of
the Committee on Ways and Means of both the House of
Representatives and the Senate. Consequently, at the April
19, 1994 meeting of the Bicameral Conference Committee,
the Members agreed to make the House Bill as the “frame
of reference” or “base” of the discussions of the Bicameral
Conference Committee with the “amendments”
32
or
“insertions to emanate from the Senate.”

________________

30 H.B. 771—exempting the sale of copra from VAT coverage; H.B. 2450
—exempting the lessors or distributors of cinematographic films from
paying the VAT; H.B. 7033—amending Sec. 103 of the National Internal
Revenue Code, as amended by EO 273; H.B. 8086—exempting packaging
materials of export products from the VAT; H.B. 9030—amending Sec. 120
of the NIRC, as renumbered by EO 273; H.B. 9210—amending Title IV
and Sections 237 and 238 of the NIRC; H.B. 9297—restructuring the VAT
system by expanding its tax base, and amending Sections 99, 100 (A), 102
(A), 103, 113, 114, 115 and 116 of the NIRC; H.B. 10012—reducing the
rate of VAT imposed on sale and importation of goods, and sale of services;
H.B. 10100—amending certain provisions of the NIRC on VAT.
31 Explanatory Note of House Bill No. 9210.

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32 Excerpts from the April 19, 1994 meeting of the Bicameral


Conference Committee: “CHAIRMAN Javier. First of all, what would be
the basis, no, or framework para huwag naman mawala yung personality
namin dito sa bicameral, no, because the bill originates from the House
because this is a revenue bill, so we would just want to ask, we make the
House Bill as the frame of reference, and then

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As to whether the bills originated exclusively in the Lower


House is altogether a different matter. Obviously, bills
amendatory of VAT did not originate solely in the House to
the exclusion of all others for there were P.S. Res. No. 734
filed in the Senate on September 10, 1992 followed by
Senate Bill No. 1129 which was filed on March 1, 1993.
About a year later, this was substituted by Senate Bill No.
1630 that eventually became the EVAT law, namely,
Republic Act No. 7716.
Adverting to the passage of the amendatory VAT bills in
the Lower House, it is to be noted that House Bill No.
11197 which substituted all the prior bills introduced in
said House complied with the required readings, that is,
the first reading consisting of the reading of the title and
referral to the appropriate Committee, approval on second
reading on November 11, 1993 and on third reading on
November 17, 1993 before being finally transmitted to the
Senate. In the Senate, its identity was preserved and its
provisions were taken into consideration when the Senate
Committee on Ways and Means submitted Com. Report No.
349 which recommended for approval “S.B. No 1630 in
substitution of S.B. No. 1129, taking into consideration P.S.
Res. No. 734 and H.B. No. 11197.” At this stage, the subject
bill may be considered to have passed first reading in the
Senate with the submission of said Committee Report No.
349 by the Senate Committee on Ways and Means to which
it had been referred earlier. What

_______________

everything will just be inserted?

“HON. MACEDA. Yes, That’s true for every revenue measure.


There’s no other way. The House Bill has got to be the base. Of course,
for the record, we know that this is an administration bill; this is
certified by the president and I was about to put into the records as I

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am saying now that your problem about the impact on prices on the
people was already decided when the President and the administration
sent this to us and certified it. They have already gotten over that
political implication of this bill and the economic impact on prices.
“CHAIRMAN HERRERA. Yung concern mo about the bill as the
reference in this discussion is something that we can just. . . .
“CHAIRMAN JAVIER. We will just . . . all the amendments will be
coming from the Senate.”

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Tolentino vs. Secretary of Finance

remained, therefore, was no longer House Bill No. 11197


but Senate Bill No. 1630. Thence, the Senate, instead of
transmitting the bill to the Lower House for its concurrence
and amendments, if any, took a “shortcut,” bypassed the
Lower House and instead, approved Senate Bill No. 1630
on both second and third readings on the same day, March
24, 1994.
The first irregularity, that is, the failure to return
Senate Bill No. 1630 to the Lower House for its approval is
fatal inasmuch as the other chamber of legislature was not
afforded the opportunity to deliberate and make known its
views. It is no idle dictum that no less than the
Constitution ordains: “The legislative power shall be vested
in the Congress of the Philippines which shall consist
33
of a
Senate and a House of Representatives ...” (Italics
supplied)
It is to be pointed out too, that inasmuch as Senate Bill
No. 1630 which had “taken into consideration” House Bill
No. 11197 was not returned to the Lower House for
deliberation, the latter Chamber had no opportunity at all
to express its views thereon or to introduce any
amendment. The customary practice is, after the Senate
has considered the Lower House Bill, it returns the same to
the House of origin with its amendments. In the event that
there may be any differences between the two, the same
shall then be referred to a Conference Committee composed
of members from both Chambers which shall then proceed
to reconcile said differences.
In the instant case, the Senate transmitted to the Lower
House on March 24, 1994, a letter informing the latter that
it had “passed S. No. 1630 entitled . . . (and) in view of the
disagreeing provisions of said bill and House Bill No.
11197, entitled . . . the Senate requests a conference . . .”
This, in spite of the fact that Com. Report No. 349 of the
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Senate Committee on Ways and Means had already


recommended for approval on February 7, 1994 “S.B. No.
1630 . . . taking into consideration H.B. No. 11197.”
Clearly, the Conference Committee could only have acted
upon Senate Bill No. 1630, for House Bill No. 11197 had
already been fused into the former.
At the oral hearing of July 7, 1994, petitioner in G.R.
No. 115455 admitted, in response to this writer’s query,
that he had

_______________

33 Article VI, Section 1.

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Tolentino vs. Secretary of Finance

attempted to rectify some of the perceived irregularities by


presenting a motion in the Senate to recall the bill from the
Conference Committee so that it could revert to the period 34
of amendment, but he was outvoted, in fact “slaughtered.”
In accordance with the Rules of the House of
Representatives and the Senate, Republic Act No. 7716 was
duly authenticated after it was signed by the President of
the Senate and the Speaker of the House of
Representatives followed by the certifications of the
Secretary of the Senate and the35 Acting Secretary General
of the House of Representatives. With the signature of

________________

34 Transcript of the Stenographic Notes (TSN) on the Hearing Had on


Thursday, July 7, 1994, pp. 45-46:

“Justice Romero: Q: Mr. Counsel, is it not a fact that in the


Bicameral Conference Committee, you presented a Motion to return the
Bill as it was to the Lower House with also your proposal that this be
referred to a Referendum for the entire nation to vote upon, then
Senator Wigberto Tañada amended your Motion and convinced you to
drop that portion about referral to a Referendum and you agreed.
     So that Motion of yours to return to the House was the one voted
upon by the Bicameral Conference Committee and it lost.
     What can you say to that?
Senator Tolentino: A: No, No, if Your Honor please. My Motion was
voted upon by the Senate itself because I presented that said motion in
order to recall the Bill from the Bicameral Conference Committee so

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that the Senate could go back to the period of amendment and see if we
could amend the House Bill itself, but that was defeated. So, it became
academic. Thus, what we did we proceeded with the procedure already
being followed by the Senate.
     I thought, as a matter of fact, that was the one way of correcting this
procedural error, but I was only one (1), or two (2), or three (3) of us only,
then we were defeated in the voting, if Your Honor please.
Justice Romero: Q: You mean you were outvoted?
Senator Tolentino: A: Yes, Your Honor; we were actually slaughtered
in the voting, so to speak, if Your Honor please.”

35 The certification states: “This Act which is a consolidation of House


Bill No. 11197 and Senate Bill No. 1630 was finally passed by the House
of Representatives and the Senate on April 7, 1994 and May 2, 1994,
respectively.”

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Tolentino vs. Secretary of Finance

President Fidel V. Ramos under the words “Approved: 5


May 1994,” it was finally promulgated.
Its legislative journey ended, Republic Act No. 7716
attained the status of an enrolled bill which is defined as
one “which has been duly introduced, finally passed by both
houses, signed by the proper officers of each, approved by
the governor
36
(or president) and filed by the secretary of
state.”
Stated differently:

“It is a declaration by the two houses, through their presiding


officers, to the president, that a bill, thus attested, has received in
due form, the sanction of the legislative branch of the
government, and that it is delivered to him in obedience to the
constitutional requirement that all bills which pass Congress
shall be presented to him. And when a bill, thus attested, receives
his approval, and is deposited in the public archives, its
authentication as a bill that has passed Congress should be
deemed complete and unimpeachable. As the President has no
authority to approve a bill not passed by Congress, an enrolled
Act in the custody of the Secretary of State, and having the
official attestations of the Speaker of the House of
Representatives, of the President of the Senate, and of the
President of the United States, carries, on its face, a solemn
assurance by the legislative and executive departments of the
government, charged, respectively, with the duty of enacting and
executing the laws, that it was passed by Congress. The respect

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due to coequal and independent departments requires the judicial


department to act upon that assurance, and to accept, as having
passed Congress, all bills authenticated in the manner stated;
leaving the courts to determine, when the question properly
arises, whether the
37
Act, so authenticated, is in conformity with
the Constitution.”

The enrolled bill assumes importance when there is some


variance between what actually transpired in the halls of
Congress, as reflected in its journals, and as shown in the
text of the law as finally enacted. But suppose the journals
of either or both Houses fail to disclose that the law was
passed in accordance with what was certified to by their
respective presiding officers and the President. Or that
certain constitutional requirements regarding its passage
were not observed, as in the instant case.

_______________

36 BLACK’S LAW DICTIONARY, 5th Ed. (1979).


37 Field v. Clark, 143 U.S. 649, 36 L ed. 294.

773

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Tolentino vs. Secretary of Finance

Which shall prevail: the journal or the enrolled bill?


A word on the journal.
“The journal is the official record of the acts of a
legislative body. It should be a true record of the
proceedings arranged in chronological order. It should be a
record of what is done rather than what is said. The journal
should be a clear, concise, unembellished statement of all
proposals made and all actions taken complying with all
requirements of constitutions, statutes, charters or rules
concerning38 what is to be recorded and how it is to be
recorded.”
Article VI, Section 16 (4) of the Constitution ordains:

“Each house shall keep a Journal of its proceedings, and from time
to time publish the same, excepting such parts as may, in its
judgment, affect national security; and the yeas and nays on any
question shall, at the request of one-fifth of the Members present,
be entered in the Journal.
Each House shall also keep a Record of its proceedings.” (Italics
supplied)

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The rationale behind the above provision and of the


“journal entry rule” is as follows:

“It is apparent that the object of this provision is to make the


legislature show what it has done, leaving nothing whatever to
implication. And, when the legislature says what it has done, with
regard to the passage of any bill, it negatives the idea that it has
done anything else in regard thereto. Silence proves nothing
where one is commanded to speak. . . . Our constitution
commands certain things to be done in regard to the passage of a
bill, and says that no bill shall become a law unless these things
are done. It seems a travesty upon our supreme law to say that it
guaranties to the people the right to have their laws made in this
manner only, and that there is no way of enforcing this right, or
for the court to say that this is law when the constitution says it is
not law. There is one safe course which is in harmony with the
constitution, and that is to adhere to the rule that the legislature
must show, as commanded by the constitution, that it has done
everything required by the constitution to be done in the serious
and important matter of making laws. This is the rule of evidence

_______________

38 Mason, Paul, MASON’s MANUAL OF LEGISLATIVE PROCEDURE, 1953.

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Tolentino vs. Secretary of Finance

provided by the constitution. It is not presumptuous in the courts,


nor disrespectful to the legislature,
39
to judge the acts of the
legislature by its own evidence.”

Confronted with a discrepancy between the journal


proceedings and the law as duly enacted, courts have
indulged in different theories. The “enrolled bill” and
“journal entry” rules, being rooted deep in the
Parliamentary practices of England where there is no
written constitution, and then transplanted to the United
States, it may be instructive to examine which rule prevails
in the latter country through which, by a process of
legislative osmosis, we adopted them in turn.

“There seems to be three distinct and different rules as applicable


to the enrolled bill recognized by the various courts of this
country. The first of these rules appears to be that the enrolled
bill is the ultimate proof and exclusive and conclusive evidence
that the bill passed the legislature in accordance with the

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provisions of the Constitution. Such has been the holding in


California, Georgia, Kentucky, Texas, Washington, New Mexico,
Mississippi, Indiana, South Dakota, and may be some others.
The second of the rules seems to be that the enrolled bill is a
verity and resort cannot be had to the journals of the Legislature
to show that the constitutional mandates were not complied with
by the Legislature, except as to those provisions of the Constitu-
tion, compliance with which is expressly required to be shown on
the journal. This rule has been adopted in South Carolina,
Montana, Oklahoma, Utah, Ohio, New Jersey, United States
Supreme Court, and others.
The third of the rules seems to be that the enrolled bill raises
only a prima facie presumption that the mandatory provisions of
the Constitution have been complied with and that resort may be
had to the journals to refute that presumption, and if the
constitutional provision is one, compliance with which is expressly
required by the Constitution to be shown on the journals, then the
mere silence of the journals to show a compliance therewith will
refute the presumption. This rule has been adopted in Illinois,
Florida, Kansas, Louisiana, Tennessee, Arkansas, Idaho,
Minnesota, 40Nebraska, Arizona, Oregon, New Jersey, Colorado,
and others.”

_______________

39 Cohn v. Kingsley, 49 P. 985 (1897).


40 Smith v. Thompson, 258 N.W. 190.

775

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Tolentino vs. Secretary of Finance

In the 1980 case of D & W Auto Supply v. Department of


Revenue, the Supreme Court of Kentucky which had
subscribed in the past to the first of the three theories,
made the pronouncement that it had shifted its stand and
would henceforth adopt the third. It justified its changed
stance, thus:

“We believe that a more reasonable rule is the one which


Professor Sutherland describes as the ‘extrinsic evidence’ rule . . .
. Under this approach there is a prima facie presumption that an
enrolled bill is valid, but such presumption may be over-come by
clear satisfactory and convincing evidence establishing
41
that
constitutional requirements have not been met.”

What rule, if any, has been adopted in this jurisdiction?

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Advocates of the “journal


42
entry rule” cite the 1916
decision in U.S. v. Pons where this Court placed reliance
on the legislative journals to determine whether Act No.
2381 was passed on February 28, 1914 which is what
appears in the Journal, or on March 1, 1914 which was
closer to the truth. The confusion was caused by the
adjournment sine die at midnight of February 28, 1914 of
the Philippine Commission.
A close examination of the decision reveals that the
Court did not apply the “journal entry rule” vis-a-vis the
“enrolled bill rule” but the former as against what are
“behind the legislative journals.”

“Passing over the question of whether the printed Act (No. 2381),
published by authority of law, is conclusive evidence as to the
date when it was passed, we will inquire whether the courts may
go behind the legislative journals for the purpose of determining
the date43 of adjournment when such journals are clear and
explicit.”

It is to be noted from the above that the Court “passed


over” the probative value to be accorded to the enrolled bill.
Opting for the journals, the Court proceeded to explain:

________________

41 602 S.W. 2d 420 (1980).


42 34 Phil. 729 (1916).
43 Ibid at 733.

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Tolentino vs. Secretary of Finance

“From their very nature and object, the records of the Legislature
are as important as those of the judiciary, and to inquire into the
veracity of the journals of the Philippine Legislature, when they
are, as we have said clear and explicit, would be to violate both
the letter and the spirit of the organic laws by which the
Philippine Government was brought into existence, to invade a
coordinate and independent department of the Government, and
to interfere 44with the legitimate powers and functions of the
Legislature.”

Following the courts in the United States since the


Constitution of the Philippine Government is modeled after
that of the Federal Government, the Court did not hesitate
to follow the courts in said country, i.e., to consider the
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journals decisive of the point at issue. Thus: “The journals


say that the Legislature adjourned at 12 midnight on
February 28, 1914. This settles the question and the 45
court
did not err in declining to go behind these journals.”
The Court made a categorical stand for the “enrolled bill
rule” for the 46
first time in the 1947 case of Mabanag v.
Lopez Vito where it held that an enrolled bill imports
absolute verity and is binding on the courts. This Court
held itself bound by an authenticated resolution, despite
the fact that the vote of three-fourths of the Members of the
Congress (as required by the Constitution to approve
proposals for constitutional amendments) was not actually
obtained on account of the suspension of some members of
the House of Representatives and the Senate. In this
connection, the Court invoked the “enrolled bill rule” in this
wise: “If a political question conclusively binds the judges
out of respect to the political departments, a duly certified
law or resolution also binds the 47
judges under the ‘enrolled
bill rule’ born of that respect.”
Mindful that the U.S. Supreme Court is on the side of
those who favor the rule and for no other reason than that
it conforms to the expressed policy of our law making body
(i.e., Sec. 313 of the old Code of Civil Procedure, as
amended by Act No. 2210), the Court said that “duly
certified copies shall be conclusive proof of

_______________

44 Ibid at 733-734.
45 Ibid at 735.
46 78 Phil. 1 (1947).
47 Ibid at 3.

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Tolentino vs. Secretary of Finance

the provisions of such Acts and of the due enactment


thereof.” Without pulling the legal underpinnings from
U.S. v. Pons, it justified its position by saying that if the
Court at the time looked into the journals, “in all
probability, those were the documents offered in evidence”
and that “even if both the journals and authenticated copy
of the Act had been presented, the disposal of the issue by
the Court on the basis of the journals does not imply
rejection of the enrolled theory; for as already stated, the
due enactment of a law may be proved in either of the two
48
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48
ways specified in Section 313 of Act No. 190 as amended.”
Three Justices voiced their dissent from the majority
decision.
Again, the Court made its position plain in the 1963
49
case
of Casco Philippine Chemical Co., Inc. v. Gimenez when a
unanimous Court ruled that: “The enrolled bill is
conclusive upon the courts as regards the tenor of the
measure passed by Congress and approved by the President.
If there has been any mistake in the printing of a bill
before it was certified by the officers of Congress and
approved by the Executive, the remedy is by amendment or
curative legislation not by judicial decree.” According to
Webster’s New 20th Century Dictionary, 2nd ed., 1983, the
word “tenor” means, among others, “the general drift of
something spoken or written; intent, purport, substance.”
Thus, the Court upheld the respondent Auditor
General’s interpretation that Republic Act No. 2609 really
exempted from the margin fee on foreign exchange
transactions “urea formaldehyde” as found in the law and
not “urea and formaldehyde” which petitioner insisted were
the words contained in the bill and were so intended by
Congress.
In 1969, the Court similarly placed the weight of its
authority behind the conclusiveness of the enrolled bill. In
denying the motion for reconsideration, the Court ruled in
Morales v. Subido that “the enrolled Act in the office of the
legislative secretary of the President of the Philippines
shows that Section 10 is exactly as it is in the statute as
officially published in slip form by the Bureau of Printing. x
x x Expressed elsewise, this is a matter worthy of the
attention not of an Oliver Wendell Holmes but of a

_______________

48 Ibid at 18.
49 117 Phil. 363 (1963).

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Tolentino vs. Secretary of Finance

50
Sherlock Holmes.” The alleged omission of a phrase in the
final Act was made, not at any stage of the legislative
proceedings, but only in the course of the engrossment of
the bill, more specifically in the proofreading thereof.
But the Court did include a caveat that qualified the
absoluteness of the “enrolled bill” rule stating:
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“By what we have essayed above we are not of course to be


understood as holding that in all cases the journals must yield to
the enrolled bill. To be sure there are certain matters which the
Constitution (Art. VI, secs. 10 [4], 20 [1], and 21 [1]) expressly
requires must be entered on the journal of each house. To what
extent the validity of a legislative act may be affected by a failure
to have such matters entered on the journal, is a question which
we do not now decide (Cf. e.g., Wilkes Country Comm’rs. v. Coler,
180 U.S. 506 [1900]). All we hold is that with respect to matters
not expressly required to be entered on the 51journal, the enrolled
bill prevails in the event of any discrepancy.”

More recently, in the52 1993 case of Philippine Judges


Association v. Prado, this Court, in ruling on the
unconstitutionality of Section 35 of Republic Act No. 7354
withdrawing the franking privilege from the entire
hierarchy of courts, did not so much adhere to the enrolled
bill rule alone as to both “enrolled bill and legislative
journals.” Through Mr. Justice Isagani A. Cruz, we stated:
“Both the enrolled bill and the legislative journals certify
that the measure was duly enacted, i.e., in accordance with
Article VI, Sec. 26 (2) of the Constitution. We are bound by
such official assurances from a coordinate department of
the government, to which we owe, at the very least, a
becoming courtesy.”
Aware of the shifting sands on which the validity and
continuing relevance of the “enrolled bill” theory rests, I
have taken pains to trace the history of its applicability in
this jurisdiction, as influenced in varying degrees by
different Federal rulings.
As applied to the instant petition, the issue posed is
whether or not the procedural irregularities that attended
the passage of House Bill No. 11197 and Senate Bill No.
1630, outside of the

_______________

50 136 Phil. 405, 409 (1969).


51 Ibid at 412.
52 G.R. No. 105371, November 11, 1993, 227 SCRA 703.

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Tolentino vs. Secretary of Finance

reading and printing requirements which were exempted


by the Presidential certification, may no longer be
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impugned, having been “saved” by the conclusiveness on us


of the enrolled bill. I see no cogent reason why we cannot
continue to place reliance on the enrolled bill, but only with
respect to matters pertaining to the procedure followed in
the enactment of bills in Congress and their subsequent
engrossment, printing errors, omission of words and
phrases and similar relatively minor matters relating more
to form and factual issues which do not materially alter the
essence and substance of the law itself.
Certainly, “courts cannot claim greater ability to judge
procedural legitimacy, since constitutional rules on
legislative procedure are easily mastered. Procedural
disputes are over facts—whether or not the bill had enough
votes, or three readings, or whatever—not over the
meaning of the constitution. Legislators, as eyewitnesses,
are in a better position than a court to rule on the facts.
The argument is also made that legislatures 53would be
offended if courts examined legislative procedure.
Such a rationale, however, cannot conceivably apply to
substantive changes in a bill introduced towards the end of
its tortuous trip through Congress, catching both
legislators and the public unawares and altering the same
beyond recognition even by its sponsors.
This issue I wish to address forthwith.

EXTENT OF THE POWER OF THE BICAMERAL


CONFERENCE COMMITTEE

One of the issues raised in these petitions, especially in


G.R. Nos. 115781, 115543 and 115754, respectively, is
whether or not—

“Congress violated Section 26, par. 2, Article VI (of the 1987


Constitution) when it approved the Bicameral Conference
Committee Report which embodied, in violation of Rule XII of the
Rules of the Senate, a radically altered tax measure containing
provisions not reported out or discussed in either House as well as
provisions on which

_______________

53 Davies, Jack, LEGISLATIVE LAW AND PROCESS, 2nd ed., 1986.

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there was no disagreement between the House and the Senate


and, worse, provisions contrary to what the House
54
and the Senate
had approved after three separate readings.”

and

“By adding or deleting provisions, when there was no conflicting


provisions between the House and Senate versions, the BICAM
acted in excess of its jurisdiction or with such grave abuse of
discretion as to amount to loss of jurisdiction. x x x In adding to
the bill and thus subjecting to VAT, real properties, media and
cooperatives despite the contrary decision of both Houses, the
BICAM exceeded its jurisdiction or acted with 55
such abuse of
discretion as to amount to loss of jurisdiction ....”

I wish to consider this issue in light of Article VIII, Sec. 1 of


the Constitution which provides that “(j)udicial power
includes the duty of the courts of justice x x x to determine
whether or not there has been a grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of
any branch or instrumentality of the Government.” We are
also guided by the principle that a court may interfere with
the internal procedures56 of its coordinate branch only to
uphold the Constitution.
A conference committee has been defined:

“. . . unlike the joint committee is two committees, one appointed


by each house. It is normally appointed for a specific bill and its
function is to gain accord between the two houses either by the
recession of one house from its bill or its amendments or by the
further amendment of the existing legislation or by the
substitution of an entirely new bill. Obviously, the conference
committee is always a special committee and normally includes
the member who introduced the bill and the chairman of the
committee which considered it together with such other
representatives of the houses as seem expedient. (Horack, Cases
and Materials on Legislation [1940] 220. See also Zinn,
Conference Procedure in Congress, 38 ABAJ 864 [1952]; Steiner,
The Congressional
57
Conference Committee [U of Ill. Press,
1951]).”

________________

54 Petition in G.R. No. 115781, p. 18.


55 Petition in G.R. No. 115543, pp. 2-3.
56 Davies, Jack, supra at 90.
57 Sutherland, J.G., STATUTES AND STATUTORY CONSTRUCTION,
Vol. I, 4th ed., pp. 293-294.

781

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Tolentino vs. Secretary of Finance

From the foregoing definition, it is clear that a bicameral


conference committee is a creature, not of the Constitution,
but of the legislative body under its power to determine
rules of its proceedings under Article VI, Sec. 16 (3) of the
Constitution. Thus, it draws its life and vitality from the
rules governing its creation. The why, when, how and
wherefore of its operations, in other words, the parameters
within which it is to function, are to be found in Section 26,
Rule XII of the Rules of the Senate and Section 85 of the
Rules of the House of Representatives, respectively, which
provide:
Rule XII, Rules of the Senate

“SEC. 26. In the event that the Senate does not agree with the
House of Representatives on the provision of any bill or joint
resolution, the differences shall be settled by a conference
committee of both Houses which shall meet within ten days after
their composition.
The President shall designate the members of the conference
committee in accordance with subparagraph (c), Section 8 of Rule
III.
Each Conference Committee Report shall contain a detailed
and sufficiently explicit statement of the changes in or
amendments to the subject measure, and shall be signed by the
conferees.
The consideration of such report shall not be in order unless
the report has been filed with the Secretary of the Senate and
copies thereof have been distributed to the Members.”

Rules of the House of Representatives

“SEC. 85. Conference Committee Reports.—In the event that the


House does not agree with the Senate on the amendments to any
bill or joint resolution, the differences may be settled by
conference committee of both Chambers.
The consideration of conference committee reports shall always
be in order, except when the journal is being read, while the roll is
being called or the House is dividing on any question. Each of the
pages of such reports shall contain a detailed, sufficiently explicit
statement of the changes in or amendments to the subject
measure.
The consideration of such report shall not be in order unless
copies thereof are distributed to the Members: Provided, That in
the last fifteen days of each session period it shall be deemed
sufficient that three copies of the report, signed as above
provided, are deposited in the office of the Secretary General.”
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Tolentino vs. Secretary of Finance

Under these Rules, a bicameral conference committee


comes into being only when there are disagreements and
differences between the Senate and the House with regard
to certain provisions of a particular legislative act which
have to be reconciled.
Jefferson’s Manual, which, according to Section 112,
Rule XLIX of the Senate Rules, supplements it, states that
a conference committee is usually called “on the occasion of
amendments between the Houses” and “in all cases of
difference of opinion between
58
the two Houses on matters
pending between them.” It further states:

“The managers of a conference must confine themselves to the


differences committed to them, and may not include subjects not
within the disagreements, even though germane to a question in
issue. But they may perfect amendments committed to them if they
do not in so doing go beyond the differences. x x x Managers
59
may
not change the text to which both Houses have agreed.” (Italics
supplied.)

Mason’s Manual of Legislative Procedures which is also


considered as controlling authority for 60
any situation not
covered by a specific legislative rule, states that either
House may “request a conference with the other on any
matter of difference or dispute between them” and that in
such a request,
61
“the subject of the conference should always
be stated.”
In the Philippines, as in the United States, the
Conference Committee exercises such a wide range of
authority that they virtually constitute a third House in
the Legislature. As admitted by the Solicitor General, “It
was the practice in past Congresses for Conference
Committees to insert in bills approved by the two Houses
new provisions
62
that were not originally contemplated by
them.”
In Legislative Procedure, Robert Luce gives a graphic
description of the milieu and the circumstances which have
conspired to

________________

58 Page 261.
59 Page 268.

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60 Davies, supra, at 65.


61 Sec. 764, p. 541.
62 Consolidated Memorandum for Respondents, p. 71.

783

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Tolentino vs. Secretary of Finance

transform an initially innocuous mechanism designed to


facilitate legislative action into an all-powerful
Frankenstein that brooks no challenge to its authority even
from its own members.

“Their power lies chiefly in the fact that reports of conference


committees must be accepted without amendment or else rejected
in toto. The impulse is to get done with the matters and so the
motion to accept has undue advantage, for some members are
sure to prefer swallowing unpalatable provisions rather than
prolong controversy. This is the more likely if the report comes in
the rush of business toward the end of a session, when to seek
further conference might result in the loss of the measure
altogether. At any time in the session there is some risk of such a
result following the rejection of a conference report, for it may not
be possible to secure a second conference, or delay may give
opposition to the main proposal chance to develop more strength.
x x x      x x x      x x x
Entangled in a network of rule and custom, the Representative
who resents and would resist this theft of his rights, finds himself
helpless. Rarely can he vote, rarely can he voice his mind, in the
matter of any fraction of the bill. Usually he cannot even record
himself as protesting against some one feature while accepting
the measure as whole. Worst of all, he cannot by argument or
suggested change, try to improve what the other branch has done.
This means more than the subversion of individual rights. It
means to a degree the abandonment of whatever advantage the
bicameral system may have. By so much it in effect transfers the
lawmaking power to a small group of members who work out in
private a decision that almost always prevails. What is worse,
these men are not chosen in a way to ensure the wisest choice. It
has become the practice to name as conferees the ranking
members of the committee, so that the accident of seniority
determines. Exceptions are made, but in general it is not a
question of who are most competent to serve. Chance governs,
sometimes giving way to favor, rarely to merit.
x x x      x x x      x x x
Speaking broadly, the system of legislating by conference
committee is unscientific and therefore defective. Usually it

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forfeits the benefit of scrutiny and judgment by all the wisdom


available. Uncontrolled, it is inferior to that process by which
every
63
amendment is secured independent discussion and vote. x x
x.” (Italics supplied)

________________

63 Pages 404-405 and 407.

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Not surprisingly has it been said: “Conference Committee


action is the most undemocratic procedure in the legislative 64
process; it is an appropriate target for legislative critics.”
In the case at bench, petitioners insist that the
Conference Committee to which Senate Bill No. 1630 and
House Bill No. 11197 were referred for the purpose of
harmonizing their differences, overreached themselves in
not confining their “reconciliation” function to those areas
of disagreement in the two bills but actually making
“surreptitious insertions” and deletions which amounted to
a grave abuse of discretion.
At this point, it becomes imperative to focus on the
errant provisions which found their way into Republic Act
No. 7716. Below is a breakdown to facilitate understanding
the grounds for petitioners’ objections:

INSERTIONS MADE BY BICAMERAL


CONFERENCE COMMITTEE (BICAM) TO SENATE
BILL (SB) NO. 1630 AND HOUSE BILL (HB) NO.
11197

1. Sec. 99 of the National Internal Revenue Code


(NIRC)

(1) Under the HB, this section includes any person


who, in the course of trade or business, sells,
barters or exchanges goods OR PROPERTIES and
any person who LEASES PERSONAL
PROPERTIES.
(2) The SB completely changed the said section and
defined a number of words and phrases. Also,
Section 99-A was added which included one who

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sells, exchanges, barters PROPERTIES and one


who imports PROPERTIES.
(3) The BICAM version makes LESSORS of goods OR
PROPERTIES and importers of goods LIABLE to
VAT (subject of petition in G.R. No. 115754).

2. Section 100 (VAT on Sale of Goods)

The term “goods” or “properties” includes the following,


which were not found in either the HB or the SB:

________________

64 Davies, supra, at 81.

785

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—In addition to radio and television time;


SATELLITE TRANSMISSION AND CABLE
TELEVISION TIME.
—The term “Other similar properties” was
deleted, which was present in the HB and the
SB.
—Real properties held primarily for sale to
customers or held for lease in the ordinary
course or business were included, which was
neither in the HB nor the SB (subject of
petition in G.R. No. 115754).

3. Section 102

On what are included in the term “sale or exchange of


services,” as to make them subject to VAT, the BICAM
included/inserted the following (not found in either House
or Senate Bills):

1. Services of lessors of property, whether personal or


real (subject of petition in G.R. No. 115754);
2. Warehousing services;
3. Keepers of resthouses, pension houses, inns,
resorts;
4. Common carriers by land, air and sea;
5. Services of franchise grantees of telephone and
telegraph;
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6. Radio and television broadcasting;


7. All other franchise grantees except those under
Section 117 of this Code (subject of petition in G.R.
No. 115852);
8. Services of surety, fidelity, indemnity, and bonding
com-panies;
9. Also inserted by the BICAM (on page 8 thereof) is
the lease or use of or the right to use of satellite
transmission and cable television time.

4. Section 103 (Exempt Transactions)

The BICAM deleted subsection (f) in its entirety, despite its


inclusion in both the House and Senate Bills. Therefore,
under Republic Act No. 7716, the “printing, publication,
importation or sale of books and any newspaper, magazine,
review, or bulletin which appears at regular intervals with
fixed prices for subscription and sale and which is not
devoted principally to the publication of advertisements” is
subject to VAT (subject of petition in G.R. No. 115931 and
G.R. No. 115544).
The HB and SB did not touch Subsection (g) but it was
amended by the BICAM by changing the word TEN to
FIVE.
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Thus, importation of vessels with tonnage of more than five


thousand tons is VAT exempt.
Subsection L, which was identical in the HB and the SB
that stated that medical, dental, hospital and veterinary
services were exempted from the VAT was amended by the
BICAM by adding the qualifying phrase: EXCEPT THOSE
RENDERED BY PROFESSIONALS, thus subjecting
doctors, dentists and veterinarians to the VAT.
Subsection U which exempts from VAT “transactions
which are exempt under special laws,” was amended by the
BICAM by adding the phrase: EXCEPT THOSE
GRANTED UNDER PD Nos. 66, 529, 972, 1491, AND
1590, AND NON-ELECTRIC COOPERATIVES UNDER
RA 6938 (subject of petition in G.R. No. 115873), not found
in either the HB or the SB, resulting in the inclusion of all
cooperatives to the VAT, except non-electric cooperatives.

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The sale of real properties was included in the exempt


transactions under the House Bill, but the BICAM
qualified this with the provision:

“(S) SALE OF REAL PROPERTIES NOT PRIMARILY HELD


FOR SALE TO CUSTOMERS OR HELD FOR LEASE IN THE
ORDINARY COURSE OF TRADE OR BUSINESS OR REAL
PROPERTY UTILIZED FOR LOW-COST AND SOCIALIZED
HOUSING AS DEFINED BY RA NO. 7279 OTHERWISE
KNOWN AS THE URBAN DEVELOPMENT AND HOUSING
ACT OF 1992 AND OTHER RELATED LAWS.” (subject of
petition in G.R. No. 115754)

The BICAM also exempted the sale of properties, the


receipts of which are not less than P480,000.00 or more
than P720,000.00. Under the SB, no amount was given, but
in the HB it was stated that receipts from the sale of
properties not less than P350,000.00 nor more than
P600,000.00 were exempt.
It did not include, as VAT exempt, the sale or transfer of
securities, as defined in the Revised Securities Act (BP 178)
which was contained in both Senate and House Bills.

5. Section 104

Not included in the HB or the SB is the phrase


“INCLUDING PACKAGING MATERIALS” which was
inserted by the BICAM
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Tolentino vs. Secretary of Finance

in Section 104 (A) (1) (B), thus excluding from creditable


input tax packaging materials and the phrase “ON WHICH
A VALUE-ADDED TAX HAS BEEN ACTUALLY PAID” in
Section 104 (A) (2).

6. Section 107

Both House and Senate Bills provide for the payment of


P500.00 VAT registration fee but this was increased by
BICAM to P1,000.00.

7. Section 112

Regarding a person whose sales or receipts are exempt


under Section 103 (w), the BICAM inserted the phrase:
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“THREE PERCENT UPON THE EFFECTIVITY OF THIS


ACT AND FOUR PERCENT (4%) TWO YEARS
THEREAFTER,” although the SB and the HB provide only
“three percent of his gross quarterly sales.”

8. Section 115

The BICAM adopted the HB version which subjects


common carriers by land, air or water for the transport of
passengers to 3% of their gross quarterly sales, which is
not found in the SB.

9. Section 117

The BICAM amended this section by subjecting franchises


on electric, gas and water utilities to a tax of two percent
(2%) on gross receipts derived x x x, although neither the
HB nor the SB has a similar provision.

10. Section 17 (d)

(a) The BICAM defers for only 2 years the VAT on


services of actors and actresses, although the SB
defers it for 3 years.
(b) The BICAM uses the word “EXCLUDE” in the
section on deferment of VAT collection on certain
goods and services. The HB does not contain any
counterpart provision and SB only allows deferment
for no longer than 3 years.

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11. Section 18 on the Tax Administration Development


Fund is an entirely new provision not contained in
the House/Senate Bills. This fund is supposed to
ensure effective implementation of Republic Act No.
7716.
12. Section 19

No period within which to promulgate the implementing


rules and regulations is found in the HB or the SB but
BICAM provided “within 90 days” which found its way in
Republic Act No. 7716.
Even a cursory perusal of the above outline will convince
one that, indeed, the Bicameral Conference Committee
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(henceforth to be referred to as BICAM) exceeded the


power and authority granted in the Rules of its creation.
Both Senate and House Rules limit the task of the
Conference Committee in almost identical language to the
settlement of differences in the provisions or amendments
to any bill or joint resolution. If it means anything at all, it
is that there are provisions in subject bill, to start with,
which differ and, therefore, need reconciliation. Nowhere in
the Rules is it authorized to initiate or propose completely
new matter. Although under certain rules on legislative
procedure, like those in Jefferson’s Manual, a conference
committee may introduce germane matters in a particular
bill, such matters should be circumscribed by the
committee’s sole authority and function to reconcile
differences.
Parenthetically, in the Senate and in the House, a
matter is “germane” to a particular bill if there is a
common tie between said matter and the provisions which
tend to promote the object and purpose of the bill it seeks
to amend. If it introduces a new subject matter not within 65
the purview of the bill, then it is not “germane” to the bill.
The test is whether or not the change represented an
amendment or extension of the basic purpose of the
original, or the introduction
66
of an entirely new and
different subject matter.

________________

65 See: 18 Words and Phrases 482 citing Kennedy v. Truss, Del. Super.,
13 A. 2nd 431, 435, 1 Terry 424 (1940).
66 United States Gypsum Co. v. State, Dept. of Revenue, 110 N.W. 2d
698, 71, 363, Mich. 548 (1961).

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In the BICAM, however, the germane subject matter must


be within the ambit of the disagreement between the two
Houses. If the “germane” subject is not covered by the
disagreement but it is reflected in the final version of the
bill as reported by the Conference Committee or, if what
appears to be a “germane”67 matter in the sense that it is
“relevant or closely allied” with the purpose of the bill,
was not the subject of a disagreement between the Senate
and the House, it should be deemed an extraneous matter
or even a “rider” which should never be considered legally
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passed for not having undergone the three-day reading


requirement. Insertion of new matter on the part of the
BICAM is, therefore, an ultra vires act which makes the
same void.
The determination of what is “germane” and what is not
may appear to be a difficult task but the Congress, having
been confronted with the problem before, resolved it in
accordance with the rules. In that case, the Congress
approved a Conference Committee’s insertion of new
provisions that were not contemplated in any of the
provisions in question between the Houses simply because
of the provision in Jefferson’s Manual that conferees may
report matters “which are germane modifications of
subjects in68 disagreement between the Houses and the
committee. In other words, the matter was germane to the
points of disagreement between the House and the Senate.
As regards inserted amendments in the BICAM,
therefore, the task of determining what is germane to a bill
is simplified, thus: If the amendments are not
circumscribed by the subjects of disagreement between the
two Houses, then they are not germane to the purpose of
the bill.
In the instant case before us, the insertions and
deletions made do not merely spell an effort at settling
conflicting provisions but have materially altered the bill,
thus giving rise to the instant petitions on the part of those
who were caught unawares by the legislative legerdemain
that took place. Going by the definition of the word
“amendment” in Black’s Law Dictionary,

_________________

67 BLACK’s DICTIONARY, 6th ed., p. 687 citing State ex. rel. Riley v.
District Court of Second Judicial Dist. in and for Silver Bow County, 103
Mont. 576, 64 P. 2d 115, 119 (1937).
68 CONGRESSIONAL RECORD, May 3, 1952, p. 885 cited in Orquiola,
Annotated Rules of the Senate, 1991 ed., pp. 40-41.

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5th Ed., 1979, which means “to change or modify for the
better; to alter by modification, deletion, or addition,” said
insertions and deletions constitute amendments.
Consequently, these violated Article VI, Section 26 (2)
which provides inter alia: “Upon the last reading of a bill,
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no amendment thereto shall be allowed . . .” This


proscription is intended to subject all bills and their
amendments to intensive deliberation by the legislators
and the ample ventilation of issues to afford the public an
opportunity to express their opinions or objections issues to
afford the public an opportunity to express their opinions
or objections thereon. The same rationale underlies the
three-reading requirement to the end that no surpises may
be sprung on an unsuspecting citizenry.
Provisions of the “now you see it, now you don’t” variety,
meaning those which were either in the House and/or
Senate versions but simply disappeared or were “bracketed
out” of existence in the BICAM Report, were eventually
incorporated in Republic Act No. 7716. Worse, some goods,
properties or services which were not covered by the two
versions and, therefore, were never intended to be so
covered, suddenly found their way into the same Report.
No advance notice of such insertions prepared the rest of
the legislators, much less the public who could be adversely
affected, so that they could be given the opportunity to
express their views thereon. Well has the final BICAM
report been described, therefore, as an instance of “taxation
without representation.”
That the conferees or delegates in the BICAM
representing the two Chambers could not possibly be
charged with bad faith or sinister motives or, at the very
least, unseemly behavior, is of no moment. The stark fact is
that items not previously subjected to the VAT now fell
under its coverage without interested sectors or parties
having been afforded the opportunity to be heard thereon.
This is not to say that the Conference Committee Report
should have undergone the three readings required in
Article VI, Section 26(2), for this clearly refers only to bills
which, after having been initially filed in either House,
negotiated the labyrinthine passage therein until its
approval. The composition of the BICAM including as it
usually does, the Chairman of the appropriate Committee,
the sponsor of the bill and other interested members
ensures an informed discussion, at least with respect to the
disagreeing provisions. The same does not obtain as
regards completely new
791

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matter which suddenly spring on the legislative horizon.


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It has been pointed out that such extraneous matters


notwithstanding, all Congressmen and Senators were given
the opportunity to approve or turn down the Committee
Report in toto, thus “curing” whatever defect or irregularity
it bore. Earlier in this opinion, I explained that the source
of the acknowledged power of this ad hoc committee stems
from the precise fact that, the meetings, being scheduled
“take it or leave it” basis. It has not been uncommon for
legislators who, for one reason or another have been
frustrated in their attempt to pass a pet bill in their own
chamber, to work for its passage in the BICAM where it
may enjoy a more hospitable reception and faster approval.
In the instant case, had there been full, open and
unfettered discussion on the bills during the Committee
sessions, there would not have been as much vociferous
objections on this score. Unfortunately, however, the
Committee held two of the five sessions behind closed
doors, sans stenographers, record-takers and interested
observers. To that extent, the proceedings were shrouded in
mystery and the public’s right to information on matters69
of
public concern as enshrined in Article III, Section 7 and
the government’s policy of transparency in transactions
involving public
70
interest in Article II, Section 28 of the
Constitution are undermined.
Moreover, that which is void ab initio such as the
objectionable provisions in the Conference Committee
Report, cannot be “cured” or ratified. For all intents and
purposes, these never existed. Quae ab initio non valent, ex
post facto convalescere non possunt. Things that are invalid
from the beginning are not made valid by a subsequent act.

________________

69 Article III, Section 7. “The right of the people to information on


matters of public concern shall be recognized. Access to official records,
and to documents, and papers pertaining to official acts, transactions, or
decisions, as well as to government research data used as basis for policy
development, shall be afforded the citizen, subject to such limitations as
may be provided by law.”
70 Article II, Section 28. “Subject to reasonable conditions prescribed by
law, the State adopts and implements a policy of full public disclosure of
all its transactions involving public interest.”

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Should this argument be unacceptable, the “enrolled bill”


doctrine, in turn, is invoked to support the proposition that
the certification by the presiding officers of Congress,
together with the signature of the President, bars further
judicial inquiry into the validity of the law. I reiterate my
submission that the “enrolled bill ruling” may be applicable
but only with respect to questions pertaining to the
procedural enactment, engrossment, printing, the insertion
or deletion of a word or phrase here and there, but would
draw a dividing line with respect to substantial substantive
changes, such as those introduced by the BICAM herein.
We have before us then the spectacle of a body created
by the two Houses of Congress for the very limited purpose
of settling disagreements in provisions between bills
emanating therefrom, exercising the plenary legislative
powers of the parent chambers but holding itself exempt
from the mandatory constitutional requirements that are
the hallmarks of legislation under the aegis of a democratic
political system. From the initial filing, through the three
readings which entail detailed debates and discussions in
Committee and plenary sessions, and on to the transmittal
to the other House in a repetition of the entire process to
ensure exhaustive deliberations—all these have been
skipped over. In the proverbial twinkling of an eye,
provisions that probably may not have seen the light of day
had they but run their full course through the legislative
mill, sprang into existence and emerged full-blown laws.
Yet our Constitution vests the legislative power in “the
Congress of the Philippines which shall consist
71
of a Senate
and a House of Representatives . . . .” and not in any
special, standing or super committee of its own creation, no
matter that these have been described, accurately enough,
as “the eye, the ear, the hand, and very often the brain of
the house.”
Firstly, that usage or custom has sanctioned this
abbreviated, if questionable, procedure does not warrant its
being legitimized and perpetuated any longer. Consuetudo,
contra rationem introducta, potius usurpatio quam
consuetudo appellari debet. A custom against reason is
rather an usurpation. In the hierarchy

_______________

71 Article VI, Section 1.

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Tolentino vs. Secretary of Finance

of sources of legislative procedure, constitutional rules,


statutory provisions and adopted rules (as for example, the
Senate and House Rules), rank highest, certainly much
ahead of customs and usages.
Secondly, is this Court to assume the role of passive
spectator or indulgent third party, timorous about
exercising its power or more importantly, performing its
duty, of making a judicial determination on the issue of
whether there has been grave abuse of discretion by the
other branches or instrumentalities of government, where
the same is properly invoked? The time is past when the
Court was not loathe to raise the bogeyman of the political
question to avert a head-on collision with either the
Executive or Legislative Departments. Even the separation
of powers doctrine was burnished to a bright sheen as often
as it was invoked to keep the judiciary within bounds. No
longer does this condition obtain. Article VIII, Section 2 of
the Constitution partly quoted in this paragraph has
broadened the scope of judicial inquiry. This Court can now
safely fulfill its mandate of delimiting the powers of co-
equal departments like the Congress, its officers or its
committees which may have no compunctions about
exercising legislative powers in full.
Thirdly, dare we close our eyes to the presumptuous
assumption by a runaway committee of its progenitor’s
legislative powers in derogation of the rights of the people,
in the process, subverting the democratic principles we all
are sworn to uphold, when a proper case is made out for
our intervention? The answers to the above queries are
self-evident.
I call to mind this exhortation: “We are sworn to see that
violations of the constitution—by any person, corporation,
state agency or branch of government—are brought to light
and corrected. To countenance an artificial rule of law that
silences our voices when confronted with violations
72
of our
Constitution is not acceptable to this Court.”
I am not unaware that a rather recent decision of ours
brushed aside an argument that a provision in subject law
regarding the withdrawal of the franking privilege from the
petitioners and this Court itself, not having been included
in the original version

_______________

72 D & W Auto Supply v. Department of Revenue, supra.

794
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of Senate Bill No. 720 or of House Bill No. 4200 but only in
the Conference Committee Report, was violative of Article
VI, Section 26 (2) of the Constitution. Likewise, that said
Section 35, never having been a subject of disagreement
between both Houses, could not have been validly added as
an amendment before the Conference Committee.
The majority opinion in said case explained:
“While it is true that a conference committee is the
mechanism for compromising differences between the
Senate and the House, it is not limited in its jurisdiction to
this question. Its broader function is described thus:

‘A conference committee may deal generally with the subject


matter or it may be limited to resolving the precise differences
between the two houses. Even where the conference committee is
not by rule limited in its jurisdiction, legislative custom severely
limits the freedom with which new subject matter can be inserted
into the conference bill. But occasionally a conference committee
produces unexpected results, results beyond its mandate. These
excursions occur even where the rules impose strict limitations on
conference committee jurisdiction. This is symptomatic of the
authoritarian power of conference committee (Davies, Legislative
73
Law and Process: In a Nutshell, 1986 Ed., p. 81).’ ” (Italics
supplied)

At the risk of being repetitious, I wish to point out that the


general rule, as quoted above, is: “Even where the
conference committee is not by rule limited in its
jurisdiction, legislative custom severely limits the freedom
with which new subject matter can be inserted into the
conference bill.” What follows, that is, “occasionally a
conference committee produces unexpected results, results
beyond its mandate . . .” is the exception. Then it concludes
with a declaration that: “This is symptomatic of the
authoritarian power of conference committee.” Are we
about to reinstall another institution that smacks of
authoritarianism which, after our past experience, has
become anathema to the Filipino people?
The ruling above can hardly be cited in support of the
proposition that a provision in a BICAM report which was
not

________________

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73 The Philippine Judges Association v. Hon. Pete Prado, G.R. No.


105371, November 11, 1993, 227 SCRA 703, 709.

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Tolentino vs. Secretary of Finance

the subject of differences between the House and Senate


versions of a bill cannot be nullified. It submits that such is
not authorized in our Basic Law. Moreover, this decision
concerns merely one provision whereas the BICAM Report
that culminated in the EVAT law has a wider scope as it, in
fact, expanded the base of the original VAT law by
imposing the tax on several items which were not so
covered prior to the EVAT.
One other flaw in most BICAM Reports, not excluding
this one under scrutiny, is that, hastily drawn up, it often
fails to conform to the Senate and House Rules requiring
no less than a “detailed” and “sufficiently explicit
statement of the changes in or amendments to the subject
measure.” The Report of the committee, as may be gleaned
from the preceding pages, was no more than the final
version of the bill as “passed” by the BICAM. The
amendments or subjects of dissension, as well as the
reconciliation made by the committee, are not even pointed
out, much less explained therein.
It may be argued that legislative rules of procedure may
properly be suspended, modified, 74
revoked or waived at will
by the legislators themselves. This principle, however,
does not come into play in interpreting what the record of
the proceedings shows was, or was not, done. It is rather
designed to test the validity of legislative action where the
record shows a 75 final action in violation or disregard of
legislative rules. Utilizing the Senate and the House
Rules as both guidelines and yardstick, the BICAM here
obviously did not adhere to the rule on what the Report
should contain.
Given all these irregularities that have apparently been
engrafted into the BICAM system, and which have been
tolerated, if not accorded outright acceptance by everyone
involved in or conversant with, the institution, it may be
asked: Why not leave well enough alone?

_________________

74 In Osmeña, Jr. v. Pendatun, (109 Phil. 863 [1960]), the Court held
that parliamentary rules are merely procedural and they may be waived

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or disregarded by the legislative body. Hence, mere failure to conform to


parliamentary usage will not invalidate the action taken by a deliberative
body when the requisite number of members have agreed to a particular
measure.
75 State v. Essling, 128 N.W. 2d 307, 316 (1964).

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That these practices have remained unchallenged in the


past does not justify our closing our eyes and turning a deaf
ear to them. Writ large is the spectacle of a mechanism
ensconced in the very heart of the people’s legislative halls,
that now stands indicted with the charge of arrogating
legislative powers unto itself through the use of dubious
“shortcuts.” Here, for the people to judge, is the “mother of
all shortcuts.”
In the petitions at bench, we are confronted with the
enactment of a tax law which was designed to broaden the
tax base. It is rote learning for any law student that as an
attribute of sovereignty, the power 76
to tax is “the strongest
of all the powers of government.” Admittedly, “for all its
plenitude, the77
power to tax is not unconfined. There are
restrictions.” Were there none, then the oft-quoted 1803
dictum of Chief Justice Marshall78
that “the power to tax
involves the power to destroy” would be a truism. Happily,
we can concur with, and the people can find comfort in, the
reassuring words of Mr. Justice Holmes: “The power 79
to tax
is not the power to destroy while this Court sits.”
Manakanakâ, mayroóng dumudulóg dito sa
Kátaastaasang Hukuman na may kamangha-mangháng
hinaíng. Angkóp na halimbawà ay ang mga petisyóng
iniharáp ngayón sa amin.
Ang ilán sa kanilá ay mga Senadór na nais mapawaláng
bisà ang isáng batás ukol sa buwís na ipinasá mismo nilá.
Diumanó itó ay hindî tumalima sa mga itinatadhana ng
Sáligang Batás. Bukód sa rito, tutol silá sa mga bagong
talatà na isiningit ng “Bicameral Conference Committee”
na nagdagdág ng mga bagong bagay bagay at serbisyo na
papatawan ng buwís. Ayon sa kanilá, ginampanán ng
komiténg iyán ang gawain na nauukol sa buóng Kongreso.
Kung kayá’t ang nararapat na mangyari ay ihatol ng
Kátaastaasang Hukuman na malabis na pagsasamantala
sa sariling pagpapasiyá ang ginawâ ng Kongreso.
Bagamá’t bantulót kamíng makialám sa isáng kapantáy
na sangáy ng Pamahalaán, hindî naman nararapat na
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kamí ay

________________

76 Sarasola v. Trinidad, 40 Phil. 252, 262 (1919).


77 Sison, Jr. v. Ancheta, L-59431, July 25, 1984, 130 SCRA 654, 660.
78 McCullock v. Maryland, 4 Wheaton 316.
79 Quoted in Graves. v. New York, 306 U.S. 466, 490.

797

VOL. 235, AUGUST 25, 1994 797


Tolentino vs. Secretary of Finance

tumanggíng gampanán ang tungkulin na iniatas sa amin


ng Saligang Batas. Lalu’t-lalò nang ang batás na
kinauukulan ay maaaring makapinsalá sa nakararami sa
sambayanán.
Sa ganang akin, itong batas na inihaharap sa amin
ngayón, ay totoóng labág sa Saligang Batás, samakatuwíd
ay waláng bisà. Nguni’t itó ay nauukol lamang sa mga
katiwalián na may kinalaman sa paraán ng
pagpapasabatás nitó. Hindî namin patakarán ang
makialám o humadláng sa itinakdáng gawain ng Saligang
Batás sa Pangulò at sa Kongreso. Ang dalawáng sangáy na
iyán ng Pamahalaán ang higít na maalam ukol sa kung
ang anumáng panukalang batás ay nararapat, kanais-nais
o magagampanán; kung kayá’t hindî kamí nararapat na
maghatol o magpapasiyá sa mga bagay na iyán. Ang
makapapataw ng angkop na lunas sa larangan na iyán ay
ang mismong mga kinatawán ng sambayanán sa Kongreso.
Faced with this challenge of protecting the rights of the
people by striking down a law that I submit is
unconstitutional and in the process, checking the wonted
excesses of the Bicameral Conference Committee system, I
see in this case a suitable vehicle to discharge the Court’s
Constitutional mandate and duty of declaring that there
has indeed been a grave abuse of discretion amounting to
lack or excess of jurisdiction on the part of the Legislature.
Republic Act No. 7716, being unconstitutional and void,
I find no necessity to rule on the substantive issues as dealt
with in the majority opinion as they have been rendered
moot and academic. These issues pertain to the intrinsic
merits of the law. It is axiomatic that the wisdom,
desirability and advisability of enacting certain laws lie,
not within the province of the Judiciary but that of the
political departments, the Executive and the Legislative.
The relief sought by petitioners from what they perceive to
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be the harsh and onerous effect of the EVAT on the people


is within their reach. For Congress, of which Senator-
petitioners are a part, can furnish the solution by either
repealing or amending the subject law.
For the foregoing reasons, I VOTE to GRANT the
petition.
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DISSENTING OPINION

BELLOSILLO, J.:

With a consensus already reached after due deliberations,


silence perhaps should be the better part of discretion,
except to vote. The different views and opinions expressed
are so persuasive and convincing; they are more than
enough to sway the pendulum for or against the subject
petitions. The penetrating and scholarly dissertations of
my brethren should dispense with further arguments
which may only confound and confuse even the most
learned of men.
But there is a crucial point, a constitutional issue which,
I submit, has been belittled, treated lightly, if not almost
considered insignificant and purposeless. It is elementary,
as much as it is fundamental. I am referring to the word
“exclusively” appearing in Sec. 24, Art. VI, of our 1987
Constitution. This is regrettable, to say the least, as it
involves a constitutional mandate which, wittingly or
unwittingly, has been cast aside as trivial and
meaningless.
A comparison of the particular provision on the
enactment of revenue bills in the U.S. Constitution with its
counterpart in the Philippine Constitution will help explain
my position.
Under the U.S. Constitution, “[a]ll bills for raising
revenue shall originate in the House of Representatives;
but the Senate may propose or concur with amendments as
on other bills” (Sec. 7, par. [1], Art. I). In contrast, our 1987
Constitution reads: “All appropriation, revenue or tariff
bills, bills authorizing increase of the public debt, bills of
local application, and private bills shall originate
exclusively in the House of Representatives, but the Senate
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may propose or concur with amendments” (Sec. 24, Art. VI;


italics supplied).
As may be gleaned from the pertinent provision of our
Constitution, all revenue bills are required to originate
“exclusively” in the House of Representatives. On the other
hand, the U.S. Constitution does not use the word
“exclusively”; it merely says, “[a]ll bills for raising revenue
shall originate in the House of
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Tolentino vs. Secretary of Finance

Representatives.”
Since the term “exclusively” has already been
adequately defined in the various opinions, as to which
there seems to be no dispute, I shall no longer offer my own
definition.
Verily, the provision in our Constitution requiring that
all revenue bills shall originate exclusively from the Lower
House is mandatory. The word “exclusively” is an
“exclusive word,” which 1is indicative of an intent that the
provision is mandatory. Hence, all American authorities
expounding on the meaning and application of Sec. 7, par.
(1), Art. I, of the U.S. Constitution cannot be used in the
interpretation of Sec. 24, Art. VI, of our 1987 Constitution
which has a distinct feature of “exclusiveness” all its own.
Thus, when our Constitution absolutely requires—as it is
mandatory—that a particular bill should exclusively
emanate from the Lower House, there is no alternative to
the requirement that the bill to become valid law must
originate exclusively from that House.
In the interpretation of constitutions, questions
frequently arise as to whether particular sections are
mandatory or directory. The courts usually hesitate to
declare that a constitutional provision is directory merely
in view of the tendency of the legislature to disregard
provisions which are not said to be mandatory. Accordingly,
it is the general rule to regard constitutional provisions as
mandatory, and not to leave any discretion to the will of
the legislature to obey or disregard them. This presumption
as to mandatory quality is usually followed unless it is
unmistakably manifest that the provisions are intended to
be merely directory. So strong is the inclination in favor of
giving obligatory force to the terms of the organic law that
it has even been said that neither by the courts nor by any
other department of the government may any provision of
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the Constitution be regarded as merely directory, but that


each and everyone of its provisions should be treated as
imperative and mandatory, without reference to the rules
and distinguishing2 between the directory and the
mandatory statutes.
The framers of our 1987 Constitution could not have
used the term “exclusively” if they only meant to replicate
and adopt in

_______________

1 See McGee v. Republic, 94 Phil. 821 (1954).


2 See Tañada v. Cuenco , 103 Phil. 1051 (1957).

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toto the U.S. version. By inserting “exclusively” in Sec. 24,


Art. VI of our Constitution, their message is clear: they
wanted it different, strong, stringent. There must be a
compelling reason for the inclusion of the word
“exclusively,” which cannot be an act of retrogression but
progression, an improvement on its precursor.
Thus,”exclusively” must be given its true meaning, its
purpose observed and virtue recognized, for it could not
have been conceived to be of minor consequence. That
construction is to be sought which gives effect to the whole
of the statute—its every word. Ut magis valeat quam
pereat.
Consequently, any reference to American authorities,
decisions and opinions, however wisely and delicately put,
can only mislead in the interpretation of our own
Constitution. To refer to them in defending the
constitutionality of R.A. 7716, subject of the present
petitions, is to argue on a false premise, i.e., that Sec. 24,
Art. VI of our 1987 Constitution is, or means exactly, the
same as Sec. 7, par. (1), Art. I of the U.S. Constitution,
which is not correct. Hence, only a wrong conclusion can be
drawn from a wrong premise.
For example, it is argued that in the United States, from
where our own legislature is patterned, the Senate can
practically substitute its own tax measure for that of the
Lower House. Thus, according to the Majority, citing an
American case, “the validity of Sec. 37 which the Senate
had inserted in the Tariff Act of 1909 by imposing an ad
valorem tax based on the weight of vessels, was upheld
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against the claim that the revenue bill originated in the


Senate in contravention
3
of Art. I, Sec. 7, of the U.S.
Constitution.” In an effort to be more convincing, the
Majority even quotes the footnote in Introduction to
American Government by F.A. Ogg and P.O. Ray which
reads—

Thus in 1883 the upper house struck out everything after the
enacting clause of a tariff bill and wrote its own measure, which
the House eventually felt obliged to accept. It likewise added 847
amendments to the Payne-Aldrich tariff act of 1909, dictated the
schedules of the emergency tariff act of 1921, rewrote an
extensive tax revision bill in the same year, and recast most of the
permanent tariff

________________

3 See Majority Opinion, p. 15, citing Rainey v. United States, 232 U.S., 309, 58
Law Ed. 617.

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VOL. 235, AUGUST 25, 1994 801


Tolentino vs. Secretary of Finance
4
bill of 1922 —

which in fact suggests, very clearly, that the subject


revenue bill actually originated from the Lower House and
was only amended, perhaps considerably, by the Senate
after it was passed by the former and transmitted to the
latter.
In the cases cited, where the statutes passed by the U.S.
Congress were upheld, the revenue bills did not actually
originate from the Senate but, in fact, from the Lower
House. Thus, the Supreme Court of the United States,
speaking5
through Chief Justice White in Rainey v. United
States upheld the revenue bill passed by Congress and
adopted the ruling of the lower court that—

x x x the section in question is not void as a bill for raising


revenue originating in the Senate and not in the House of
Representatives. It appears that the section was proposed by the
Senate as an amendment to a bill for raising revenue which
originated in the House. That is sufficient.
6
Flint v. Stone Tracy Co., on which the Solicitor General
heavily leans in his Consolidated Comment as well as in
his Memorandum, does not support the thesis of the

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Majority since the subject bill therein actually originated


from the Lower House and not from the Senate, and the
amendment merely covered a certain provision in the
House bill.
In fine, in the cases cited which were lifted from
American authorities, it appears that the revenue bills in
question actually originated from the House of
Representatives and were amended by the Senate only
after they were transmitted to it. Perhaps, if the factual
circumstances in those cases were exactly the same as the
ones at bench, then the subject revenue or tariff bill may be
upheld in this jurisdiction on the principle of substantial
compliance, as they were in the United States, except
possibly in instances where the House bill undergoes what
is now referred to as “amendment by substitution,” for that
would be in derogation

_______________

4 Id., citing F.A. Ogg and P.O. Ray, Introduction to American


Government, 302, n. 2 (1945).
5 See Note 3.
6 22 U.S. 107.

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of our Constitution which vests solely in the House of


Representatives the power to initiate revenue bills. A
Senate amendment by substitution simply means that the
bill in question did not in effect originate from the lower
chamber but from the upper chamber and now disguises
itself as a mere amendment of the House version.
It is also theorized that in the U.S., amendment by
substitution is recognized. That may be true. But the
process may be validly effective only under the U.S.
Constitution. The cases before us present a totally different
factual backdrop. Several months before the Lower House
could even pass HB No. 11197, P.S. Res. No. 734 and SB
No. 1129 had already been filed in the Senate. Worse, the
Senate subsequently approved SB No. 1630 “in substitution
of SB No. 1129, taking into consideration P.S. Res. No. 734
and HB No. 11197,” and not HB No. 11197 itself “as
amended.” Here, the Senate could not have proposed or
concurred with amendments because there was nothing to
concur with or amend except its own bill. It must be
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stressed that the process of concurring or amending


presupposes that there exists a bill upon which concurrence
may be based or amendments introduced. The Senate
should have reported out HB No. 11197, as amended, even
if in the amendment it took into consideration SB No. 1630.
It should not have submitted to the Bicameral Conference
Committee SB No. 1630 which, admittedly, did not
originate exclusively from the Lower House.
But even assuming that in our jurisdiction a revenue bill
of the Lower House may be amended by substitution by the
Senate—although I am not prepared to accept it in view of
Sec. 24, Art. VI, of our Constitution—still R.A. 7716 could
not have been the result of amendment by substitution
since the Senate had no House bill to speak of that it could
amend when the Senate started deliberating on its own
version.
Be that as it may, I cannot rest easy on the proposition
that a constitutional mandate calling for the exclusive
power and prerogative of the House of Representatives may
just be discarded and ignored by the Senate. Since the
Constitution is for the observance of all—the judiciary as
well as the other departments of government—and the
judges are sworn to support its provisions, the courts are
not at liberty to overlook or disregard its commands. And it
is not fair and just to impute to them undue interference if
803

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Tolentino vs. Secretary of Finance

they look into the validity of legislative enactments to


determine whether the fundamental law has been
faithfully observed in the process. It is their duty to give
effect to the existing Constitution and to obey all
constitutional provisions irrespective of their opinion as to
the wisdom of such provisions.
The rule is fixed that the duty in a proper case to declare
a law unconstitutional cannot be declined and must be
performed in accordance with the deliberate judgment of
the tribunal before which the validity of the enactment is
directly drawn into question. When it is clear that a statute
transgresses the authority vested in the legislature by the
Constitution, it is the duty of the courts to declare the act
unconstitutional because they cannot shirk from it without
violating their oaths of office. This duty of the courts to
maintain the Constitution as the fundamental law of the
state is imperative and unceasing; and, as Chief Justice
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Marshal said, whenever a statute is in violation of the


fundamental law, the courts must so adjudge and thereby
give effect to the Constitution. Any other course would lead
to the destruction of the Constitution. Since the question as
to the constitutionality of a statute is a judicial matter, the
courts will not decline the exercise of jurisdiction upon the
suggestion that action might be taken by political agencies
7
in disregard of the judgment of the judicial tribunals.
It is my submission that the power and authority to
originate revenue bills under our Constitution is vested
exclusively in the House of Representatives. Its members
being more numerous than those of the Senate, elected
more frequently, and more directly represent the people,
are therefore considered better aware of the economic life of
their individual constituencies. It is just proper that
revenue bills originate exclusively from them.
In this regard, we do not have to devote much time
delving into American decisions and opinions and invoke
them in the interpretation of our own Constitution which is
different from the American version, particularly on the
enactment of revenue bills. We have our own Constitution
couched in a language our own legislators thought best.
Insofar as revenue bills are concerned, our Constitution is
not American; it is distinctively

_______________

7 11 Am. Jur., pp. 712-13, 713-715.

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Filipino. And no amplitude of legerdemain can detract from


our constitutional requirement that all appropriation,
revenue or tariff bills, bills authorizing increase of the
public debt, bills of local application, and private bills shall
originate exclusively in the House of Representatives,
although the Senate may propose or concur with
amendments.
In this milieu, I am left no option but to vote to grant the
petitions and strike down R.A. 7716 as unconstitutional.

DISSENTING OPINION

PUNO, J.:
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Petitioners plead that we affirm the self-evident


proposition that they who make law should not break the
law. There are many evils whose elimination can be trusted
to time. The evil of lawlessness in lawmaking cannot. It
must be slain on sight for it subverts the sovereignty of the
people.
First, a fast snapshot of the facts. On November 17,
1993, the House of Representatives passed on third reading
House Bill (H.B.) No. 11197 entitled “An Act Restructuring
the Value Added Tax (VAT) System to Widen its Tax Base
and Enhance its Administration, Amending for These
Purposes Sections 99, 100, 102 to 108 and 110 of Title V
and 236, 237 and 238 of Title IX, and Repealing Sections
113 and 114 of Title V, all of the National Internal Revenue
Code as Amended.” The vote was 114 Yeas and 12 Nays.
The next day, November 18, 1993, H.B. No. 11197 was
transmitted to the Senate for its concurrence by the Hon.
Camilo L. Sabio, Secretary General of the House of
Representatives.
On February 7, 1994, the Senate Committee on Ways
and Means submitted Senate Bill (S.B.) No. 1630,
recommending its approval “in substitution of Senate Bill
No. 1129 taking into consideration P.S. Res. No. 734 and
House Bill No. 11197.” On March 24, 1994, S.B. No. 1630
was approved on second and third readings. On the same
day, the Senate, thru Secretary Edgardo E. Tumangan,
requested the House for a conference “in view of the
disagreeing provisions of S.B. No. 1630 and H.B. No.
11197.” It designated the following as members of its
Committee: Senators Ernesto F. Herrera, Leticia R.
Shahani, Alberto S. Romulo, John H. Osmeña, Ernesto M.
Maceda, Blas F. Ople, Francisco S.
805

VOL. 235, AUGUST 25, 1994 805


Tolentino vs. Secretary of Finance

Tatad, Rodolfo G. Biazon, and Wigberto S. Tañada. On the


part of the House, the members of the Committee were:
Congressmen Exequiel B. Javier, James L. Chiongbian,
Renato V. Diaz, Arnulfo P. Fuentebella, Mariano M. Tajon,
Gregorio Andolong, Thelma Almario, and Catalino
Figueroa. After five (5) meetings,1 the Bicameral
Conference Committee submitted its Report to the Senate
and the House stating:

“CONFERENCE COMMITTEE REPORT

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The Conference Committee on the disagreeing provisions of House


Bill No. 11197, entitled:
AN ACT RESTRUCTURING THE VALUE ADDED TAX (VAT)
SYSTEM TO WIDEN ITS TAX BASE AND ENHANCE ITS
ADMINISTRATION, AMENDING FOR THESE PURPOSES
SECTIONS 99, 100, 102, 103, 104, 105, 106, 107, 108 AND 110
OF TITLE IV, 112, 115 AND 116 OF TITLE V, AND 236, 237,
AND 238 OF TITLE IX, AND REPEALING SECTIONS 113 AND
114 OF TITLE V, ALL OF THE NATIONAL INTERNAL
REVENUE CODE, AS AMENDED
and Senate Bill No. 1630 entitled:
AN ACT RESTRUCTURING THE VALUE ADDED TAX (VAT)
SYSTEM TO WIDEN ITS TAX BASE AND ENHANCE ITS
ADMINISTRATION, AMENDING FOR THESE PURPOSES
SECTIONS 99, 100, 102, 103, 104, 106, 107, 108 AND 110 OF
TITLE IV, 112, 115, 117 AND 121 OF TITLE V, AND 236, 237,
AND 238 OF TITLE IX, AND REPEALING SECTIONS 113, 114,
116, 119 AND 120 OF TITLE V, ALL OF THE NATIONAL
INTERNAL REVENUE CODE, AS AMENDED AND FOR
OTHER PURPOSES
having met, after full and free conference, has agreed to
recommend and do hereby recommend to their respective Houses
that House Bill No. 11197, in consolidation with Senate Bill No.
1630, be approved in accordance with the attached copy of the bill
as reconciled and approved by the conferees.
Approved.”

_______________

1 April 13, 19, 20, 21, and 25, 1994.

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The Report was approved by the House on April 27, 1994.


The Senate approved it on May 2, 1994. On May 5, 1994,
the President signed the bill into law as R.A. No. 7716.
There is no question that the Bicameral Conference
Committee did more than reconcile differences between
House Bill No. 11197 and Senate Bill No. 1630. In several
instances, it either added new provisions or deleted
provisions already approved in House Bill No. 11197 and
Senate Bill No. 1630. These insertions/dele-tions
numbering twenty four (24) 2 are specified in detail by
petitioner Tolentino as follows:

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“SOME SALIENT POINTS ON THE (AMENDMENTS TO THE


VAT LAW [EO 273]) SHOWING ADDITIONS/INSERTIONS
MADE BY BICAMERAL CONFERENCE COMMITTEE TO SB
1630 & HB 11197

I On Sec. 99 of the NIRC

H.B. 11197 amends this section by including, as liable to VAT,


any person who in the course of trade of business, sells, barters,
or exchanges goods or PROPERTIES and any person who
LEASES PERSONAL PROPERTIES.
Senate Bill 1630 deleted Sec. 99 to give way for a new Section
99—DEFINITION OF TERMS—where eleven (11) terms were
defined. A new Section, Section 99-A was incorporated which
included as subject to VAT, one who sells, exchanges, barters
PROPERTIES and one who imports PROPERTIES.
The BCC version (R.A. 7716) makes LESSORS of goods OR
PROPERTIES and importers of goods LIABLE to VAT.

II On Section 100 (VAT on sale of goods)

A. The H.B., S.B., and the BCC (R.A. 7716) all included sale of
PROPERTIES as subject to VAT.
The term GOODS or PROPERTIES includes the following:

HB (pls. refer to Sec. 2) SB (pls. refer to BCC (RA 7716


Sec. 1(4) (Sec. 2)
1. Right or the privilege to use 1. The same 1. The same
patent, copyright, de

________________

2 See also Annex “A,” Memorandum of Petitioner Kilosbayan in G.R.


No. 115781; also the Petition in G.R. No. 115543, pp. 2-3.

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Tolentino vs. Secretary of Finance

sign, or model, plan, secret    


formula or process,
goodwill trademark,
tradebrand or other like
property or right.
2. Right or the privilege to 2. 2. The same
use in the Philippines of The
any industrial, same
commercial, or scientific
equipment.

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3. Right or the privilege to 3. 3. The same


use motion picture films, The
films, tapes and discs. same
4. Radio and Television 4. 4. In addition to radio and
time The television time the following
Same were included: SATELLITE
TRANSMISSION and CABLE
TELEVISION TIME
5. Other Similar properties 5. 5. ‘Other similar properties’
The was deleted
Same
6.— 6.— 6. Real properties held
primarily for sale to customers
or held for lease in the
ordinary course or business

B. The HB and the BCC Bills has each a provision which


includes THE SALE OF GOLD TO BANGKO SENTRAL
NG PILIPINAS as falling under the term Export Sales,
hence subject to 0% VAT. The Senate Bill does not contain
such provision (See Section 102-A thereof).

III. On Section 102

This section was amended to include as subject to a 10% VAT the


gross receipts derived from THE SALE OR EXCHANGE OF
SERVICES, INCLUDING THE USE OR LEASE OF
PROPERTIES.
The SB, HB, and BCC have the same provisions on this.
However, on what are included in the term SALE OR
EXCHANGE OF SERVICES, the BCC included/inserted the
following (not found in either the House or Senate Bills):

1. Services of lessors of property WHETHER PERSONAL


OR REAL; (See BCC Report/Bill p. 7)
2. WAREHOUSING SERVICES (Ibid.,)

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3. Keepers of RESTHOUSES, PENSION HOUSES, INNS,


RESORTS (Ibid.,)
4. Common carriers by LAND, AIR AND SEA (Ibid.,)
5. SERVICES OF FRANCHISE GRANTEES OF
TELEPHONE AND TELEGRAPH;
6. RADIO AND TELEVISION BROADCASTING

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ALL OTHER FRANCHISE GRANTEES EXCEPT THOSE


7. UNDER SECTION 117 OF THIS CODE
8. SERVICES OF SURETY, FIDELITY, INDEMNITY, AND
BONDING COMPANIES.
9. Also inserted by the BCC (on page B thereof) is the
LEASE OR USE OF OR THE RIGHT TO USE OF
SATTELITE TRANSMISSION AND CABLE
TELEVISION TIME

IV. On Section 103 (Exempt Transactions)

The BCC deleted subsection (f) in its entirety, despite its


retention in both the House and Senate Bills, thus under RA
7716, the ‘printing, publication, importation or sale of books and
any newspaper, magazine, review, or bulletin which appears at
regular intervals with fixed prices for subscription and sale and
which is not devoted principally to the publication of
advertisements’ is subject to VAT.
Subsection (g) was amended by the BCC (both Senate and
House Bills did not) by changing the word TEN to FIVE, thus:
“Importation of passenger and/or cargo vessel of more than five
thousand ton to ocean going, including engine and spare parts of
said vessel to be used by the importer himself as operator
thereof.” In short, importation of vessels with tonnage of more
than 5 thousand is VAT exempt.
Subsection L, was amended by the BCC by adding the
qualifying phrase: EXCEPT THOSE RENDERED BY
PROFESSIONALS.
Subsection U which exempts from VAT “Transactions which
are exempt under special laws,” was amended by BCC by adding
the phrase: EXCEPT THOSE GRANTED UNDER PD Nos. 66,
529, 972, 1491, and 1590, and NON-ELECTRIC COOPERATIVES
under RA 6938. This is the reason why cooperatives are now
subject to VAT.
While the SALE OF REAL PROPERTIES was included in the
exempt transactions under the House Bill, the BCC made a
qualification by stating:

‘(S) SALE OF REAL PROPERTIES NOT PRIMARILY HELD FOR SALE


TO CUSTOMERS OR HELD FOR LEASE IN THE ORDINARY
COURSE OF TRADE OR BUSINESS OR REAL PROPERTY UTILIZED
FOR LOW-COST AND SOCIALIZED HOUSING AS DEFINED BY R.A.
NO. 7279 OTHERWISE KNOWN AS THE URBAN DEVELOPMENT
AND

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HOUSING ACT OF 1992 AND OTHER RELATED LAWS.


Under the Senate Bill, the sale of real property utilized for low-cost and
socialized housing as defined by RA 7279, is one of the exempt
transactions.
Under the House Bill, also exempt from VAT, is the SALE OF
PROPERTIES OTHER THAN THE TRANSACTIONS MENTIONED IN
THE FOREGOING PARAGRAPHS WITH A GROSS ANNUAL SALES
AND/OR RECEIPTS OF WHICH DOES NOT EXCEED THE AMOUNT
PRESCRIBED IN THE REGULATIONS TO BE PROMULGATED BY
THE SECRETARY OF FINANCE WHICH SHALL NOT BE LESS THAN
P350,000.00 OR HIGHER THAN P600,000.00 x x x Under the Senate
Bill, the amount is P240,000.00. The BCC agreed at the amount of not
less than P480,000.00 or more than P720,000.00 SUBJECT TO TAX
UNDER SEC. 112 OF THIS CODE.
The BCC did not include, as VAT exempt, the sale or transfer of
securities as defined in the Revised Securities Act (BP 178) which was
contained in both Senate and House Bills.

V On Section 104

The phrase INCLUDING PACKAGING MATERIALS was


included by the BCC on Section 104 (A) (1) (B), and the phrase
ON WHICH A VALUE-ADDED TAX HAS BEEN ACTUALLY on
Section 104 (A) (2). These phrases are not contained in either
House and Senate Bills.

VI On Section 107

Both House and Senate Bills provide for the payment of


P500.00 VAT registration fee. The BCC provides for P1,000.00
VAT fee.

VII On Section 112

While both the Senate and House Bills provide that a person
whose sales or receipts and are exempt under Section 103[w] of
the Code, and who are not VAT registered shall pay a tax
equivalent to THREE (3) PERCENT of his gross quarterly sales
or receipts, the BCC inserted the phrase: THREE PERCENT
UPON THE EFFECTIVITY OF THIS ACT AND FOUR
PERCENT (4%) TWO YEARS THEREAFTER.

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VIII On Section 115

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Sec. 17 of SB 1630, Sec. 12 of House Bill 11197 amends this


Section by clarifying that common carriers by land, air or water
FOR THE TRANSPORT OF PASSENGERS are subject to
Percentage Tax equivalent to 3% of their quarterly gross sales.
The BCC adopted this and the House Bill’s provision that the
GROSS RECEIPTS OF COMMON CARRIERS DERIVED FROM
THEIR INCOMING AND OUTGOING FREIGHT SHALL NOT
BE SUBJECTED TO THE LOCAL TAXES IMPOSED UNDER
RA 7160. The Senate Bill has no similar provision.

IX On Section 117

This Section has not been touched by either Senate and House
Bills. But the BCC amended it by subjecting franchises on
ELECTRIC, GAS and WATER UTILITIES A TAX OF TWO
PERCENT (2%) ON GROSS RECEIPTS DERIVED x x x.

X On Section 121

The BCC adopted the Senate Bills’ amendment to this section


by subjecting to 5% premium tax on life insurance business. The
House Bill does not contain this provision.

XI Others

A) The House Bill does not contain any provision on the


deferment of VAT collection on Certain Goods and
Services as does the Senate Bill (Section 19, SB 1630). But
although the Senate Bill authorizes the deferment on
certain goods and services for no longer than 3 years,
there is no specific provision that authorizes the President
to EXCLUDE from VAT any of these. The BCC uses the
word EXCLUDE.
B) Moreover, the Senate Bill defers the VAT on services of
actors and actresses etc. for 3 years but the BCC defers it
for only 2 years.
C) Section 18 of the BCC Bill (RA 7716) is an entirely new
provision not contained in the House/Senate Bills.
D) The period within which to promulgate the implementing
rules and regulations is within 60 days under SB 1630; No
specific period under the House Bill, within 90 days under
RA 7716 (BCC).
E) The House Bill provides for a general repealing clause i.e.,
all inconsistent laws etc. are repealed. Section 16 of the
Senate Bill expressly repeals Sections 113, 114, 116, 119
and 120 of the code. The same Senate Bill however
contains a general repealing clause in Sec. 21

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Tolentino vs. Secretary of Finance

thereof.

RA 7716 (BCC’s Bill) expressly repeals Sections 113, 114 and


116 of the NIRC; Article 39 (c) (d) and (e) of EO 226 and provides
the repeal of Sec. 119 and 120 of the NIRC upon the expiration of
two (2) years unless otherwise excluded by the President.”

The charge that the Bicameral Conference Committee


added new provisions in the bills of the two chambers is
hardly disputed by respondents. Instead, respondents
justify them. According to respondents: (1) the Bicameral
Conference Committee has an ex post veto power or a veto
after the fact of approval of the bill by both Houses; (2) the
bill prepared by the Bicameral Conference Committee, with
its additions and deletions, was anyway approved by both
Houses; (3) it was the practice in past Congresses for
conference committees to insert in bills approved by the
two Houses new provisions that were not originally
contemplated by them; and (4) the enrolled bill doctrine
precludes inquiry into the regularity of the proceedings
that led to the enactment of R.A. 7716.
With due respect, I reject these contentions which will
cave in on closer examination.
First. There is absolutely no legal warrant for the bold
submission that a Bicameral Conference Committee
possesses the power to add/delete provisions in bills
already approved on third reading by both Houses or an ex
post veto power. To support this postulate that can enfeeble
Congress itself, respondents cite no constitutional 3
provision, no law, not even any rule or regulation. Worse,
their stance is categorically repudiated by the rules of both
the Senate and the House of Representatives which define
with precision the parameters of power of a Bicameral
Conference Committee.
Thus, Section 209, Rule XII of the Rules of the Senate
provides:

“In the event that the Senate does not agree with the House of
Representatives on the provision of any bill or joint resolution, the
differences shall be settled by a conference committee of both
Houses

_______________

3 See p. 66 of the Consolidated Memorandum for Respondents where they refer


to certain statements from Canlan, Weightson and Beam but without citing their

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specific book or article.

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Tolentino vs. Secretary of Finance

which shall meet within ten days after their composition.


Each Conference Committee Report shall contain a detailed
and sufficiently explicit statement of the changes in or
amendments to the subject measure, and shall be signed by the
conferees.” (Emphasis supplied)

The counterpart rule of the House of Representatives is


cast in near identical language. Section 85 of the Rules of
the House of Representatives pertinently provides:

“In the event that the House does not agree with the Senate on the
amendments to any bill or joint resolution, the differences may be
settled by a conference committee of both chambers.
x x x. Each report shall contain a detailed, sufficiently explicit
statement of the changes in or amendments to the subject
measure.” (Emphasis supplied)
4
The Jefferson’s Manual has been adopted as a supplement
to our parliamentary rules and practice. Section 456 of
Jefferson’s Manual similarly
5
confines the powers of a
conference committee, viz:

“The managers of a conference must confine themselves to the


differences committed to them . . . and may not include subjects
not within the disagreements, even though germane to a question
in issue.”

This rule of antiquity has been honed and honored in


practice by the Congress of the United States. Thus, it is
chronicled by Floyd Biddick, 6Parliamentarian Emeritus of
the United States Senate, viz:

“Committees of conference are appointed for the sole purpose of


compromising and adjusting the differing and conflicting opinions
of the two Houses and the committees of conference alone can
grant

________________

4 See Rule 49 of the Rules of the Senate.


5 See p. 22, Memorandum of Petitioners in G.R. No. 115781 citing Jefferson’s
Manual and Rules of the House of Representatives, by Lewis Deschler,
Parliamentarian, U.S. Government Printing Office, 1967, p. 264.

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6 Ibid, citing Riddick, Senate Procedure: Precedents and Practices, US Senate,


1981, US Government Printing Office, pp. 383-384.

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Tolentino vs. Secretary of Finance

compromises and modify propositions of either Houses within the


limits of the disagreement. Conferees are limited to the
consideration of differences between the two Houses.
Conferees shall not insert in their report matters not committed
to them by either House, nor shall they strike from the bill matters
agreed to by both Houses. No matter on which there is nothing in
either the Senate or House passed versions of a bill may be
included in the conference report and actions to the contrary
would subject the report to a point of order.” (Emphasis ours)

In fine, there is neither a sound nor a syllable in the Rules


of the Senate and the House of Representatives to support
the thesis of the respondents that a bicameral conference
committee is clothed with an ex post veto power.
But the thesis that a Bicameral Conference Committee
can wield ex post veto power does not only contravene the
rules of both the Senate and the House. It wages war
against our settled ideals of representative democracy. For
the inevitable, catastrophic effect of the thesis is to install a
Bicameral Conference Committee as the Third Chamber of
our Congress, similarly vested with the power to make
laws but with the dissimilarity that its laws are not the
subject of a free and full discussion of both Houses of
Congress. With such a vagrant power, a Bicameral
Conference Committee acting as a Third Chamber will be a
constitutional monstrosity.
It needs no omniscience to perceive that our
Constitution did not provide for a Congress composed of
three chambers. On the contrary, section 1, Article VI of
the Constitution provides in clear and certain language:
“The legislative power shall be vested in the Congress of
the Philippines which shall consist of a Senate and a House
of Representatives . . . .” Note that in vesting legislative
power exclusively to the Senate and the House, the
Constitution used the word “shall.” Its command for a
Congress of two houses is mandatory. It is not mandatory
sometimes.
In vesting legislative power to the Senate, the
Constitution means the Senate “. . . composed of twenty-
four Senators x x x elected at large by the qualified voters
7
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7
of the Philippines . . . .” Similarly, when the Constitution
vested the legislative power to

________________

7 Section 2, Article VI.

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Tolentino vs. Secretary of Finance

the House, it means the House “. . . composed of not more


than two hundred and fifty members x x x who shall be
elected from legislative districts x x x and those who x x x
shall be elected through a party-list system of registered8
national, regional, and sectoral parties or organizations.”
The Constitution thus, did not vest on a Bicameral
Conference Committee with an ad hoc membership the
power to legislate for it exclusively vested legislative power
to the Senate and the House as co-equal bodies. To be sure,
the Constitution does not mention the Bicameral
Conference Committees of Congress. No constitutional
status is accorded to them. They are not even statutory
creations. They owe their existence from the internal rules
of the two Houses of Congress. Yet, respondents peddle the
disconcerting idea that they should be recognized as a
Third Chamber of Congress and with ex post veto power at
that.
The thesis that a Bicameral Conference Committee can
exercise law making power with ex post veto power is
freighted with mischief. Law making his a power that can
be used for good or for ill, hence, our Constitution carefully
laid out a plan and a procedure for its exercise. Firstly, it
vouchsafed that the power to make laws should be
exercised by no other body except the Senate and the
House. It ought to be indubitable that what is
contemplated is the Senate acting as a full Senate and the
House acting as a full House. It is only when the Senate
and the House act as whole bodies that they truly
represent the people. And it is only when they represent
the people that they can legitimately pass laws. Laws that
are not enacted by the people’s rightful representatives
subvert the people’s sovereignty. Bicameral Conference
Committees, with their ad hoc character and limited
membership, cannot pass laws for they do not represent the
people. The Constitution does not allow the tyranny of the
majority. Yet, the respondents will impose the worst kind
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of tyranny—the tyranny of the minority over the majority.


Secondly, the Constitution delineated in deft strokes the
steps to be followed in making laws. The overriding
purpose of these procedural rules is to assure that only bills
that successfully survive the searching scrutiny of the
proper committees of Congress and the full and

________________

8 Section 5(1), Article VI.

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Tolentino vs. Secretary of Finance

unfettered deliberations of both Houses can become laws.


For this reason, a bill has to undergo three (3) mandatory
separate readings in each House. In the case at bench, the
additions and deletions made by the Bicameral Conference
Committee did not enjoy the enlightened studies of
appropriate committees. It is meet to note that the
complexities of modern day legislations have made our
committee system a significant part of the legislative
process. Thomas Reed called the committee system as “the
eye, the ear, the hand, and very often the brain of the
house.” President Woodrow Wilson of the United States
once referred to the government of the United States as “a
government by the 9
Chairmen of the Standing Committees
of Congress . . . .” Neither did these additions and deletions
of the Bicameral Conference Committee pass through the
coils of collective deliberation of the members of the two
Houses acting separately. Due to this shortcircuiting of the
constitutional procedure of making laws, confusion shrouds
the enactment of R.A. No. 7716. Who inserted the additions
and deletions remains a mystery. Why they were inserted
is a riddle. To use a Churchillian phrase, lawmaking
should not be a riddle wrapped in an enigma. It cannot be,
for Article II, section 28 of the Constitution mandates the
State to adopt and implement a “policy of full public
disclosure of all its transactions involving public interest.”
The Constitution could not have contemplated a Congress
of invisible and unaccountable John and Mary Does. A law
whose rationale is a riddle and whose authorship is obscure
cannot bind the people.
All these notwithstanding, respondents resort to the
legal cosmetology that these additions and deletions should
govern the people as laws because the Bicameral
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Conference Committee Report was anyway submitted to


and approved by the Senate and the House of
Representatives. The submission may have some merit
with respect to provisions agreed upon by the Committee in
the process of reconciling conflicts between S.B. No. 1630
and H.B. No. 11197. In these instances, the conflicting
provisions had been previously screened by the proper
committees, deliberated upon by both Houses and approved
by them. It is, however, a different matter with respect to
additions and deletions

________________

9 Sutherland, Statutory Construction, 3rd ed., Vol. I, p. 151.

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Tolentino vs. Secretary of Finance

which were entirely new and which were made not to


reconcile inconsistencies between S.B. No. 1630 and H.B.
No. 11197. The members of the Bicameral Conference
Committee did not have any authority to add new
provisions or delete provisions already approved by both
Houses as it was not necessary to discharge their limited
task of reconciling differences in bills. At that late stage of
law making, the Conference Committee cannot add/ delete
provisions which can become laws without undergoing the
study and deliberation of both chambers given to bills on
1st, 2nd, and 3rd readings. Even the Senate and the House
cannot enact a law which will not undergo these mandatory
three (3) readings required by the Constitution. If the
Senate and the House cannot enact such a law, neither can
the lesser Bicameral Conference Committee.
Moreover, the so-called choice given to the members of
both Houses to either approve or disapprove the said
additions and deletions is more of an optical illusion. These
additions and deletions are not submitted separately for
approval. They are tucked to the entire bill. The vote is on
the bill as a package, i.e., together with the insertions and
deletions. And the vote is either “aye” or “nay,” without any
further debate and deliberation. Quite often, legislators
vote “yes” because they approve of the bill as a whole
although they may object to its amendments by the
Conference Committee. 10This lack of real choice is well
observed by Robert Luce:

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“Their power lies chiefly in the fact that reports of conference


committees must be accepted without amendment or else rejected
in toto. The impulse is to get done with the matter and so the
motion to accept has undue advantage, for some members are
sure to prefer swallowing unpalatable provisions rather than
prolong controversy. This is the more likely if the report comes in
the rush of business toward the end of a session, when to seek
further conference might result in the loss of the measure
altogether. At any time in the session there is some risk of such a
result following the rejection of a conference report, for it may not
be possible to secure a second conference, or delay may give
opposition to the main proposal chance to develop more strength.”

________________

10 Legislative Procedure, 1922 ed., Riverside Press, p. 404.

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Tolentino vs. Secretary of Finance

In a similar vein, Prof. Jack Davies commented that


“conference reports are returned to assembly and Senate on
a take-it or leave-it-basis, and the bodies are generally
placed in the11 position that to leave-it is a practical
impossibility.” Thus, he concludes that “conference
committee action is the 12
most undemocratic procedure in
the legislative process.”
The respondents also contend that the additions and
deletions made by the Bicameral Conference Committee
were in accord with legislative customs and usages. The
argument does not persuade for it misappreciates the value
of customs and usages in the hierarchy of sources of
legislative rules of procedure. To be sure, every legislative
assembly has the inherent right to promulgate its own
internal rules. In our jurisdiction, Article VI, section 16(3)
of the Constitution provides that “Each House may
determine the rules of its proceedings x x x.” But it is
hornbook law that the sources of Rules of Procedure are
many and 13hierarchical in character. Mason laid them down
as follows:

“x x x

1. Rules of Procedure are derived from several sources. The


principal sources are as follows:

a. Constitutional rules.
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b. Statutory rules or charter provisions.


c. Adopted rules.
d. Judicial decisions.
e. Adopted parliamentary authority.
f. Parliamentary law.
g. Customs and usages.

2. The rules from the different sources take precedence in the


order listed above except that judicial decisions, since they
are interpretations of rules from one of the other sources,
take the same precedence as the source interpreted. Thus,
for example, an interpretation of a constitutional provision
takes precedence over a statute.
3. Whenever there is conflict between rules from these sources
the rule from the source listed earlier prevails over the rule
from the source

_______________

11 Legislative Law and Process in a Nut Shell, West Publishing Co., 1986 ed., p.
81.
12 Ibid.
13 Manual of Legislative Procedure for Legislative and other Governmental
Bodies, McGraw Hill Co., Inc., 1953 ed., pp. 32-33.

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Tolentino vs. Secretary of Finance

listed, later. Thus, where the Constitution requires three


readings of bills, this provision controls over any provision
of statute, adopted rules, adopted manual, or of
parliamentary law, and a rule of parliamentary law
controls over a local usage but must give way to any rule
from a higher source of authority.” (Emphasis ours)

As discussed above, the unauthorized additions and


deletions made by the Bicameral Conference Committee
violated the procedure fixed by the Constitution in the
making of laws. It is reasonless for respondents therefore
to justify these insertions as sanctioned by customs and
usages.
Finally, respondents seek sanctuary in the
conclusiveness of an enrolled bill to bar any judicial inquiry
on whether Congress observed our constitutional procedure
in the passage of R.A. No. 7716. The enrolled bill theory is

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a historical relic that should not continuously rule us from


the fossilized past. It should be immediately emphasized
that the enrolled bill theory originated in England where
there is no
14
written constitution and where Parliament is
supreme. In this jurisdiction, we have a written
constitution and the legislature is a body of limited powers.
Likewise, it must be pointed out that starting from the
decade of the 40’s, even American courts have veered away
from the rigidity and unrealism of the conclusiveness
15
of an
enrolled bill. Prof. Sutherland observed:

“x x x.
Where the failure of constitutional compliance in the
enactment of statutes is not discoverable from the face of the act
itself but may be demonstrated by recourse to the legislative
journals, debates, committee reports or papers of the governor,
courts have used several conflicting theories with which to dispose
of the issue. They have held: (1) that the enrolled bill is conclusive
and like the sheriff’s return cannot be attacked; (2) that the
enrolled bill is prima facie correct and only in case the legislative
journal shows affirmative contradiction of the constitutional
requirement will the bill be held invalid, (3) that although the
enrolled bill is prima facie correct, evidence from the journals, or
other extrinsic sources is admissible to strike the bill down; (4)
that the legislative journal is conclusive and the enrolled bill is
valid only if it

_______________

14 82 CJS 136.
15 Statutory Construction, 3rd ed., Vol. I., p. 223.

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Tolentino vs. Secretary of Finance

accords with the recital in the journal and the constitutional


procedure.”

Various jurisdictions have adopted these alternative


approaches in view of strong dissent and dissatisfaction
against the philosophical underpinnings of the
conclusiveness of an enrolled bill. Prof. Sutherland further
observed:

“x x x Numerous reasons have been given for this rule.


Traditionally, an enrolled bill was ‘a record’ and as such was not
subject to attack at common law. Likewise, the rule of

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conclusiveness was similar to the common law rule of the


inviolability of the sheriff’s return. Indeed, they had the same
origin, that is, the sheriff was an officer of the king and likewise
the parliamentary act was a regal act and no official might
dispute the king’s word. Transposed to our democratic system of
government, courts held that as the legislature was an official
branch of government the court must indulge every presumption
that the legislative act was valid. The doctrine of separation of
powers was advanced as a strong reason why the court should
treat the acts of a co-ordinate branch of government with the
same respect as it treats the action of its own officers; indeed, it
was thought that it was entitled to even greater respect, else the
court might be in the position of reviewing the work of a
supposedly equal branch of government. When these arguments
failed, as they frequently did, the doctrine of convenience was
advanced, that is, that it was not only an undue burden upon the
legislature to preserve its records to meet the attack of persons
not affected by the procedure of enactment, but also that it
unnecessarily complicated litigation and confused the trial of
substantive issues.
Although many of these arguments are persuasive and are
indeed the basis for the rule in many states today, they are not
invulnerable to attack. The rule most relied on—the sheriff’s
return or sworn official rule—did not in civil litigation deprive the
injured party of an action, for always he could sue the sheriff upon
his official bond. Likewise, although collateral attack was not
permitted, direct attack permitted raising the issue of fraud, and
at a later date attack in equity was also available; and that the
evidence of the sheriff was not of unusual weight was
demonstrated by the fact that in an action against the sheriff no
presumption of its authenticity prevailed.
The argument that the enrolled bill is a ‘record’ and therefore
unimpeachable is likewise misleading, for the correction of
records is a matter of established judicial procedure. Apparently,
the justification is either the historical one that the king’s word
could not be questioned or the separation of powers principle that
one branch of the government must treat as valid the acts of
another.

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Tolentino vs. Secretary of Finance

Persuasive as these arguments are, the tendency today is to avoid


reaching results by artificial presumptions and thus it would seem
desirable to insist that the enrolled bill stand or fall on the basis of

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the relevant evidence which may be submitted for or against it.”


(Emphasis ours)

Thus, as far back as the 1940’s, Prof. Sutherland confirmed


that “x x x the tendency seems to be toward the
abandonment of the conclusive presumption rule and the
adoption of the third rule leaving only a prima facie
presumption of validity which may 16
be attacked by any
authoritative source of information.”
I am not unaware that this Court has subscribed to the
conclusiveness of an enrolled bill as enunciated in the 1947
lead case of Mabanag
17
v. Lopez Vito, and reiterated in
subsequent cases.
With due respect, I submit that these rulings are no
longer good law. Part of the ratiocination in Mabanag
states:

“x x x.
If for no other reason than that it conforms to the expressed
policy of our law making body, we choose to follow the rule.
Section 313 of the old Code of Civil Procedure, as amended by Act
No. 2210, provides: ‘Official documents’ may be proved as follows:
* * * (2) the proceedings of the Philippine Commission, or of any
legislative body that may be provided for in the Philippine
Islands, or of Congress, by the journals of those bodies or of either
house thereof, or by published statutes or resolutions, or by copies
certified by the clerk or secretary, or printed by their order;
Provided, That in the case of Acts of the Philippine Commission or
the Philippine Legislature, when there is an existence of a copy
signed by the presiding officers and secretaries of said bodies, it
shall be conclusive proof of the provisions of such Acts and of the
due enactment thereof.”

________________

16 Op. cit., pp. 224-225 citing Barndall Refining v. Welsh, 64 S.D. 647,
269 N.W. 853, 859 [1936]. Jones, Constitutional Provisions Regulating the
Mechanics of Enactment in Iowa (1935), 21 Iowa Law Rev. 79, Charlton,
Constitutional Regulation of Legislative Procedure (1936), 21 Iowa Law
Rev. 538; Note (1936) 21 Iowa Law Rev. 573.
17 See Mabanag v. Lopez Vito, 78 Phil. Rep. 1 [1947]; Casco Phil.
Chemical Co. v. Gimenez, L-17931, February 28, 1963; Morales v. Subido,
No. L-29658, February 27, 1969, 27 SCRA 131; Phil. Judges Association v.
Prado, G.R. No. 105371, November 11, 1993.

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Suffice to state that section 313 of the Old Code of Civil


Procedure as amended by Act No. 2210 is no longer in our
statute books. It has long been repealed by the Rules of
Court. Mabanag also relied on jurisprudence and
authorities in the United States which are under severe
criticisms by modern scholars. Hence, even in the United
States the conclusiveness of an enrolled bill has been
junked by most of the States. It is also true that as late as
last year, in the case of Philippine Judges Association v.
Prado, op. cit., this Court still relied on the conclusiveness
of an enrolled bill as it refused to invalidate a provision of
law on the ground that it was merely inserted by the
bicameral conference committee of both Houses. Prado,
however, is distinguishable. In Prado, the alleged insertion
of the second paragraph of section 35 of R.A. No. 7354
repealing the franking privilege of the judiciary does not
appear to be an uncontested fact. In the case at bench, the
numerous additions/deletions made by the Bicameral
Conference Committee as detailed by petitioners Tolentino
and Salonga are not disputed by the respondents. In Prado,
the Court was not also confronted with the argument that
it can no longer rely on the conclusiveness of an enrolled
bill in light of the new provision in the Constitution
defining judicial power. More specifically, section 1 of
Article VIII now provides:

“Section 1. The judicial power shall be vested in one Supreme


Court and in such lower courts as may be established by law.
Judicial power includes the duty of the courts of justice to settle
actual controversies involving rights which are legally
demandable and enforceable, and to determine whether or not
there has been a grave abuse of discretion amounting to lack or
excess of jurisdiction on the part of any branch or instrumentality
of the Government.” (Emphasis supplied)

Former Chief Justice Roberto R. Concepcion, the sponsor of


this provision in the Constitutional Commission explained
18
the sense and the reach of judicial power as follows:

_______________

18 Record, Constitutional Commission, Vol. I, p. 436; see also, Bernas,


The Constitution of the Republic of the Philippines. A Commentary, 1988
ed., p. 255.

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Tolentino vs. Secretary of Finance

“x x x.
x x x In other words, the judiciary is the final arbiter on the
question of whether or not a branch of government or any of its
officials has acted without jurisdiction or in excess of jurisdiction,
or so capriciously as to constitute an abuse of discretion
amounting to excess of jurisdiction. This is not only a judicial
power but a duty to pass judgment on matters of this nature.
This is the background of paragraph 2 of Section 1, which
means that the courts cannot hereafter evade the duty to settle
matters of this nature, by claiming that such matters constitute
political question.” (Emphasis ours)

The Constitution cannot be any clearer. What it granted to


this Court is not a mere power which it can decline to
exercise. Precisely to deter this disinclination, the
Constitution imposed it as a duty of this Court to strike
down any act of a branch or instrumentality of government
or any of its officials done with grave abuse of discretion
amounting to lack or excess of jurisdiction. Rightly or
wrongly, the Constitution has elongated the checking
powers of this Court against the other branches of
government despite their more democratic character, the
President and the legislators being elected by the people.19It
is, however, theorized that this provision is nothing new. I
beg to disagree for the view misses the significant changes
made in our constitutional canvass to cure the legal
deficiencies we discovered during martial law. One of the
areas radically changed by the framers of the 1987
Constitution is the imbalance of power between and among
the three great branches of our government—the
Executive, the Legislative and the Judiciary. To upgrade
the powers of the Judiciary, the Constitutional Commission
strengthened some more the independence of courts. Thus,
it further protected the security of tenure of the members of
the Judiciary by providing “No law shall be passed
reorganizing the Judiciary when 20
it undermines the security
of tenure of its Members.” 21
It also guaranteed fiscal
autonomy to the Judiciary.
More, it depoliticalized appointments in the judiciary by
creating the Judicial and Bar Council which was tasked
with

_______________

19 Citing Marbury v. Madison, 1 Cranch 137 L. ed [1803].


20 Article VIII, section 2.
21 Article VIII, section 3.
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Tolentino vs. Secretary of Finance

screening22 the list of prospective appointees to the


judiciary. The power of confirming appointments 23to the
judiciary was also taken away from Congress. The
President was likewise given a specific time to fill up
vacancies in the judiciary—ninety (90) days from the 24
occurrence of the vacancy in case of the Supreme Court
and ninety (90) days from the submission of the list of
recommendees by the Judicial and25 Bar Council in case of
vacancies in the lower courts. To further insulate
appointments in the judiciary from the virus of politics, the
Supreme Court was given the power to “appoint all officials
and employees26 of the Judiciary in accordance with the Civil
Service Law.” And to make the separation of the judiciary
from the other branches of government more watertight, it
prohibited members of the judiciary to be “. . . designated to
any agency 27
performing quasi judicial or administrative
functions.” While the Constitution strengthened the
sinews of the Supreme Court, it reduced the powers of the
two other branches of government, especially the
Executive. Notable of the powers of the President clipped
by the Constitution is his power to suspend the writ of
habeas corpus and to proclaim martial law. The exercise of
this power is now subject to revocation by Congress.
Likewise, the sufficiency of the factual basis for the
exercise of said power may be reviewed by 28this Court in an
appropriate proceeding filed by any citizen.
The provision defining judicial power as including the
“duty of the courts of justice . . . to determine whether or
not there has been a grave abuse of discretion amounting
to lack or excess of jurisdiction on the part of any branch or
instrumentality of the Government” constitutes the
capstone of the efforts of the Constitutional Commission to
upgrade the powers of this Court vis-a-vis the other
branches of government. This provision was dictated by our
experience under martial law which taught us that a
stronger and more independent judiciary is needed to abort

_______________

22 Article VIII, section 8.


23 Article VIII, section 9.
24 Article VIII, section 4(1).

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25 Article VIII, section 9.


26 Article VIII, section 6.
27 Article VIII, section 12.
28 Article VII, section 18.

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Tolentino vs. Secretary of Finance

abuses in government. As sharply stressed by petitioner


Salonga, this provision is distinctly Filipino and its
interpretation should not be depreciated by undue reliance
on inapplicable foreign jurisprudence. It is thus crystal
clear that unlike other Supreme Courts, this Court has
been mandated by our new Constitution to be a more active
agent in annulling acts of grave abuse of discretion
committed by a branch of government or any of its officials.
This new role, however, will not compel the Court,
appropriately defined by Prof. A. Bickel as the least
dangerous branch of government, to assume imperial
powers and run roughshod over the principle of separation
of power for that is judicial tyranny by any language. But
while respecting the essentials of the principle of
separation of power, the Court is not to be restricted by its
non-essentials. Applied to the case at bench, by voiding
R.A. No. 7716 on the ground that its enactment violated
the procedure imposed by the Constitution in lawmaking,
the Court is not by any means wrecking the wall
separating the powers between the legislature and the
judiciary. For in so doing, the Court is not engaging in
lawmaking which is the essence of legislative power. But
the Court’s interposition of power should not be defeated by
the conclusiveness of the enrolled bill. A resort to this
fiction will result in the enactment of laws not properly
deliberated upon and passed by Congress. Certainly, the
enrolled bill theory was not conceived to cover up violations
of the constitutional procedure in law making, a procedure
intended to assure the passage of good laws. The
conclusiveness of the enrolled bill can, therefore, be
disregarded for it is not necessary to preserve the principle
of separation of powers.
In sum, I submit that in imposing to this Court the duty
to annul acts of government committed with grave abuse of
discretion, the new Constitution transformed this Court
from passivity to activism. This transformation, dictated by
our distinct experience as a nation, is not merely
evolutionary but revolutionary. Under the 1935 and 1973
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Constitutions, this Court approached constitutional


violations by initially determining what it cannot do; under
the 1987 Constitution, there is a shift in stress—this Court
is mandated to approach constitutional violations not by
finding out what it should not do but what it must do. The
Court must discharge this solemn duty by not resuscitating
a past that petrifies the present.
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Tolentino vs. Secretary of Finance

I vote to declare R.A. No. 7716 unconstitutional.


Petitions dismissed.

Notes.—Despite the inhibitions pressing upon the Court


when confronted with constitutional issues, it will not
hesitate to declare a law or act invalid when it is convinced
that this must be done. In arriving at this conclusion, its
only criterion will be the Constitution and God as its
conscience gives it in the light to probe its meaning and
discover its purpose. Personal motives and political
considerations are irrelevancies that cannot influence its
decisions. (Luz Farms vs. Secretary of the Department of
Agrarian Reform, 192 SCRA 51 [1990])
We start with the established principle that the
exclusive nature of any public franchise is not favored. We
may interpret in favor of exclusiveness only when the
statute grants it in express, clear, and unmistakable terms.
In all grants by the government to private corporations, the
interpretation of rights, privileges, or franchises is taken
against the grantee. Whatever is not clearly and expressly
granted is withheld. (Alger Electric, Inc. vs. Court of
Appeals, 135 SCRA 37 [1985])

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