EN BANC

[G.R. No. 115455. August 25, 1994.]

ARTURO M. TOLENTINO, Petitioner, v. THE SECRETARY OF FINANCE and THE COMMISSIONER OF

INTERNAL REVENUE, Respondents.

[G.R. No. 115525.]

JUAN T. DAVID, Petitioner, v. 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.]

RAUL S. ROCO and the INTEGRATED BAR OF THE PHILIPPINES, Petitioners, v. THE SECRETARY OF
THE DEPARTMENT OF FINANCE; THE COMMISSIONERS OF THE BUREAU OF INTERNAL REVENUE
AND BUREAU OF CUSTOMS, Respondents.

[G.R. No. 115544.]

PHILIPPINE PRESS INSTITUTE, INC.; EGP PUBLISHING CO., INC.; KAMAHALAN PUBLISHING
CORPORATION; PHILIPPINE JOURNALISTS, INC.; JOSE L. PAVIA; and OFELIA L.
DIMALANTA, Petitioners, v. 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.]

CHAMBER OF REAL ESTATE AND BUILDERS ASSOCIATIONS, INC., (CREBA), Petitioner, v. THE
COMMISSIONER OF INTERNAL REVENUE, Respondent.

[G.R. No. 115781.]

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, v. THE EXECUTIVE SECRETARY, THE SECRETARY OF FINANCE,
THE COMMISSIONER OF INTERNAL REVENUE and THE COMMISSIONER OF
CUSTOMS, Respondents.

[G.R. No. 115852.]

PHILIPPINE AIRLINES, INC., Petitioner, v. THE SECRETARY OF FINANCE, and COMMISSIONER OF

INTERNAL REVENUE, Respondents.

[G.R. No. 115873.]

COOPERATIVE UNION OF THE PHILIPPINES, Petitioners, v. 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.]

PHILIPPINE EDUCATIONAL PUBLISHERS ASSOCIATION, INC., and ASSOCIATION OF PHILIPPINE

BOOKSELLERS, Petitioners, v. 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.
 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.

DECISION

MENDOZA, J.:

The valued-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 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. cralawnad

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: chanro b1es vi rtua l 1aw lib ra ry

I. Procedural Issues: chanrob1e s virtual 1aw l ib rary

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: chanrob1es vi rt ual 1aw li bra ry

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.

I. PROCEDURAL ISSUES

The contention of petitioners is that in enacting Republic Act No. 7716, or the Expanded Valued-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 not originate in the House of Representatives and it has not thereby
become a law: chanro b1es vi rtua l 1aw lib ra ry

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 between July 22, 1992 and August 31, 1993, several bills 1 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

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.

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." cralaw virtua1aw libra ry

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. 1197 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), 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." cralaw virtua1aw library

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 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, § 24 was adopted from the American Federal Constitution, 2 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 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 for the grant to the Senate of the treaty-ratifying power 3 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 Representatives." 4 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 5 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 (sec. 37) imposing an ad valorem tax based on the weight of
vessels, which the U.S. Senate had inserted in the Tariff Act of 1909, was upheld against the claim that the
provision was a revenue bill which originated in the Senate in contravention of Art. I, § 7 of the U.S.
Constitution. 6 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 in the same year
and recast most of the tariff bill of 1992. 7 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.

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 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.chan roble s law lib rary

Second. Enough has been said to show that it was within the power of the Senate to propose S. No. 1630.
We not pass to the next argument of petitioners that S. No. 1630 did not pass three readings on separate
days as required by the Constitution 8 because the second and third readings were done on the same day,
March 24, 1994. But this was because on February 24, 1994 9 and again on March 22, 1994, 10 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) qualified 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 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. 11

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) after the bill had been certified by the President as urgent.
12

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 not with the
requirement of three readings on separate days, also. chanroblesv irt uallaw libra ry

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 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
proceedings of conference committees.

Nor is there anything unusual or extraordinary about the fact that the Conference Committee met in
executive 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
with only the conferees and their staffs in attendance. 13 Only in November 1975 was a new rule adopted
requiring open sessions. Even then a majority of either chamber’s conferees may vote in public to close the
meetings. 14

As to the possibility of an entirely new bill emergency out of a Conference Committee, it has been
explained:c hanrob1es vi rt ual 1aw li bra ry

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 . . . 15

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 be germane to the subject of the House and Senate bills.
16

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. 17 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. 18

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: chan rob1es v irt ual 1aw l ibra ry

Rules of the Senate

Rule XII:chanrob1es vi rt ual 1aw li bra ry

§ 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 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: chanrob 1es vi rtual 1aw lib rary

§ 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 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: chanrob1e s virtual 1aw l ibra ry

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, § 16(3) of the Constitution provides that "Each House
may determine the rules of its proceedings. . . ." cralaw virtua 1aw lib rary

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 procedural and with their observance
the courts have no concern." 19 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. chanroble s virtual lawl ibra ry

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 reading; 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.

Fourth. Whatever doubts there may be as to the formal validity of Republic Act No. 7716 must be resolved
in its favor. Our cases 20 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 21 or that certain
provisions of a statute had been "smuggled" in the printing of the bill 22 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 that the "enrolled bill" rule is absolute. In fact in one case 23 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.
c hanro blesvi rt uallawl ibra ry:red

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.

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. IV, § 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: chan rob 1es vi rtual 1aw lib rary

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 sec. 103, which originally read: chanrob1es virtual 1aw library

§ Sec. 103. Exempt transactions. — The following shall be exempt from the value-added tax: chanro b1es vi rtua l 1aw li bra ry

...

(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 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: chan rob1e s virtual 1aw lib rary

§ 103. Exempt transactions. — The following shall be exempt from the value-added tax: chanrob 1es vi rtual 1aw lib rary

...

(q) Transactions which are exempt under special laws, except those granted under Presidential Decree Nos.
66, 529, 972, 1491, 1590. . . .

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: chan rob1e s virtual 1aw l ibra ry

AN ACT GRANTING A NEW FRANCHISE TO PHILIPPINE AIRLINES, INC. TO ESTABLISH, OPERATE, AND
MAINTAIN AIR-TRANSPORT 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 are germane to the general subject thus expressed.
24

It is further contended that amendment of petitioner’s franchise may only be made by special law, in view of
sec. 24 of P.D. No. 1590 which provides: cha nrob 1es vi rtua l 1aw lib ra ry

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.c rala wnad

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 of the parties. Thus in Manila Railroad Co. v. Rafferty, 25 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 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 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 question 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 for its exercise the vote of a majority of all its members 26 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: c han rob1es v irt ual 1aw l ibrary

(f) 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 devoted principally
to the publication of advertisements.

Republic Act No. 7716 amended § 103 by deleting par. (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 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: chan rob1e s vi rtual 1aw lib rary

The publisher of a newspaper has no immunity from the application of general laws. He has no special
privilege to invade the rights and liberties of others. He must answer for libel. He may be punished for
contempt of court. Like others, he must pay equitable and nondiscriminatory taxes on his business. .27

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 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.chanrobles. com : virtual law lib rary

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. For example, in Grosjean v.
American Press Co., 28 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
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 is entitled in virtue of the constitutional guaranties." 29 The case is a classic
illustration of the warning that the power to tax is the power to destroy.

In the other case 30 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 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 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 at all and even fewer pay any significant amount
of tax." 31 The discriminatory purpose was thus very clear.

More recently, in Arkansas Writers’ Project, Inc. v. Ragland, 32 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." cralaw vi rtua1aw lib rary

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
but not more than P750,000, the law discriminates 33 is 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 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 long history of hostile misuse against the freedom of the press." 34 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 regulations without creating constitutional problems." 35

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, 36 the Free Exercise of Religion Clause does not prohibit
imposing a generally applicable sales and use tax on the sale of religious material by a religious
organization.

This brings us to the question whether the registration provision of the law, 37 although of general
applicability, nonetheless is invalid when applied to the press because it lays a prior restraint on its essential
freedom. The case of American Bible Society v. City of Manila 38 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 religious literature. This Court relied on Murdock v.
Pennsylvania 39 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 religion and inevitably tends to suppress their
exercise." 40

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.
chan robles v irt ual lawl ibra ry

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,
sec. 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
moments 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." 41

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 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.
lawlibra ry
chan robles v irt ual

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] Congress shall evolve a progressive system of
taxation." 42 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, according to
respondents, removes from the coverage of the law some 30,000 business establishments. On the other
hand, an occasional paper 43 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 a policy of "all or none" in choosing the
subject of taxation. 44

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 "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.

At all events, our 1988 decision in Kapatiran 45 should have laid to rest the question 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 adequate
authority to secure the peace and good order of society. 46

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 exemption has been granted for a valid consideration. 47 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. chan roble svirtual|awli bra ry

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 private cases; that public
actions by "non-Hohfeldian" 48 or ideological plaintiffs are now cognizable provided they meet the standing
requirement of the Constitution; that under Art. VIII, § 1, par. 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
49 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.

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, par. 2 is cited in support of
this view: cha nrob 1es vi rtua l 1aw lib rary

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. chanrob lesvi rtua lawlib rary

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: chanrob1es vi rt ual 1aw li bra ry

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 conflict with each
other, the courts must decide on the operation of each. 50

Justice Laurel echoed this justification in 1936 in Angara v. Electoral Commission: chanro b1es vi rtua l 1aw lib rary

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 the rights which
that instrument secures and guarantees to them. 51

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

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 justification 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 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:chan rob 1es vi rtual 1aw lib rary

(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
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.

Bidin, Quiason and Kapunan, JJ., concur.

Separate Opinions

NARVASA, C.J., concurring: chan rob 1es virtual 1aw l ibra ry

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 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. chanrob les lawl ibra ry : redna d

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 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.

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 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 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 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 die 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 all sides that after going through first reading, HB 1197 was referred to the
Committee on Ways and Means chaired by Senator Ernesto Herrera.

It is however surmised that after this initial step, HB 1197 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 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 of S.B. No. 1129,
taking into consideration P.S. Res. No. 734 1 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 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 a 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 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.

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. chan roble s.com. ph : virtual law l ibra ry

Said BCC Report pertinently states: 2

"CONFERENCE COMMITTEE REPORT

The Conference Committee on the disagreeing provisions of House Bill No. 11197, entitled: c hanrob1es vi rt ual 1aw li bra ry

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, 1013, 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 SD AND 114 OF TITLE V, ALL OF THE NATIONAL INTERNAL REVENUE CODE, AS
AMENDED.

and Senate Bill No. 1630 entitled: chan rob1e s virtual 1aw l ibra ry

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 1113, 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." cralaw virt ua1aw li bra ry

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." cralaw virtua1aw li bra ry

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 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 hamber of Congress took exception, general 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. 11630 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 (20 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. 11630" 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
avernment of Senator Herrera, in the Report of the Ways and Means Committee, supra, that the committee
had actually "considered" (discussed) 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 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 1197
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 being based on a provision of the Code of Civil
Procedure 3 long since stricken from the statute books.

I would myself consider the "enrolled bill" theory as laying down a presumption of so strong 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 the nature of the power given to a bicameral conference committee of
reconciling differences 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 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
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 aliminated 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." cralaw vi rtua1aw l ibra ry

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 chambers, even if not within any of the "disagreeing
provision," 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: jgc:chan roble s.com.p h

"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:chanrob 1es vi rtua l 1aw lib rary

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: chanrob 1es vi rtual 1aw lib rary

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 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." chanro bles law l ibrary : red

Withal, an analysis of the changes made by the conference committee in HB 11197 and SB 1630 by way of
reconciling their "disagreeing provision," — 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 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 determent 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 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 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 "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.

I vote to DISMISS the petitions for lack of merit.

Feliciano and Melo, JJ., concur.

CRUZ, J., dissenting:chan rob1e s virtual 1aw l ibra ry

It is 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 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: cha nrob 1es vi rtua l 1aw lib rary

. . . 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 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 and 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." cralaw virt ua1aw lib rary

. . . 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. cralawnad

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 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. 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 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 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 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 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: chan rob1e s virtual 1aw lib rary

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: cha nro b1es vi rtua l 1aw libra ry

This Act which is a consolidation of House Bill No. 11197 and Senate Bill No. 11630 was finally passed by the
House of Representative 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 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." cralaw vi rtua1aw l ibrary

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 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.

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 conclusions does not require the reversal of U.S. v. 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.

PADILLA, J., concurring: chanrob 1es vi rtua l 1aw lib rary

 I

The original VAT law and the expanded VAT law

In Kapatiran v. Tan, 1 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 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: jgc:chan roble s.com. ph

"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) can create power
where the Constitution confers none." 2

Likewise, in the first VAT case, I said: jgc:chanro bles. com.ph

"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 the
wisdom, justice and advisability of the adoption of the VAT." 3

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 Curt
is duty-bound to decide under its expanded jurisdiction in the 1987 Constitution 4. 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 petitioners in their assault is
Section 24, Art. VI of the Constitution which provides: jgc:c han robles. com.ph

"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." cralaw virtua 1aw lib rary

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 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 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 may 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 bill
came out. 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. chanroble svirtual|awl ibra ry

Petitioners contend that there were violations of Sec. 26 paragraph 2, Article VI of the Constitution which
provides: jg c:chan roble s.com.p h

"Sec. 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." cralaw virt ua1aw lib ra ry

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
immediately 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 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 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 Judges
Association, etc. v. Hon. Peters Prado, etc., 5 In said case, we stated thus: jgc:chanrobles .com.p h

"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:chanrob 1es vi rtua l 1aw lib rary

‘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, 1986 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." cralaw virt ua1aw lib ra ry

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." c ralaw virtua1aw l ibra ry

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: jgc:chanroble s.com. ph
"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 6 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). 7 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, 8 where we
explained the reason thus: chanro b1es vi rt ual 1aw lib rary

‘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." crala w virtua1aw l ibra ry

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 income derived from publishing advertisements in newspapers 9, 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. chanrob les.com. ph : virtual law l ibra ry

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 . . . who wants his reforms to be reforms, must begin by declaring the
press in the Philippines free. . ." 10

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: jgc:c hanro bles. com.ph

"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." cralaw virtua1aw l ibra ry

is essentially the same as that guaranteed in the U.S. Federal Constitution, for which reason, American case
law giving judicial expression as to it 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. chanrobles vi rt ual lawl ibra ry

The U.S. Supreme Court in the leading case of Grosjean v. American Press Co., Inc. 11 declared a statute
imposing a gross 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.
In Bantam Books, Inc. v. Sullivan, 12 the U.S. Supreme Court stated: "Any system of prior restraint of
expression comes to this Court bearing a heavy presumption against its constitutionality." cralaw virtua1aw li bra ry

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 of a substantive evil which the State has the right to prevent. 13

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: jgc:c han robles. com.ph

"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."
cralaw virtua1aw l ibra ry

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

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 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 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: jgc:chan roble s.com.p h

"Section 103. Exempt Transactions. — The following shall be exempt from the value-added tax: chanrob 1es vi rtual 1aw lib rary

x x x

(q) Transactions which are exempt under special law, except those granted under Presidential Decrees No.
66, 529, 972, 1491, 1590, . . ." (Emphasis supplied)

The repealing clause of Rep. Act No. 7716 further reads: jgc:chan robles. com.ph

"Sec. 20. Repealing clauses. — The provisions of any special law relative to the rate of franchise taxes are
hereby expressly repealed.

x x x

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 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.

I, therefor, vote to DISMISS the petitions, subject to the above qualification.

REGALADO, J., dissenting: chanro b1es vi rtua l 1aw lib rary

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
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 passed House Bill No.
11197 1 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.
chan rob les lawli bra ry : redna d

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 into consideration O.S. No. 734 and H.B. No. 11197." 2 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.

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 source of and stated 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. Citing the 83-year old
case of Flint v. Stone Tracy Co., 3 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 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 can be supported as a valid amendment." 4
(Emphasis supplied.) During the interpellation by the writer at 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 Solicitor General merely reproduced all over again 5 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 substantiated 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.
virtua l lawlib ra ry
chan roble s

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 principal bill. C.R. March 19, 1963, p. 943." 6 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 purpose 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 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
parliamentary usage, to consolidate two bills, is to unite them into one 7 and which, in the case at bar,
necessarily assumes that H.B. No. 1 1197 never became legally inexistent. But did not the Solicitor General,
under the theory of amendment by substitution 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 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 memorandum, 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 merely 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 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 not exactly unaware
of the teachings in U.S. v. Pons, 8 Mabanag v. Lopez Vito, 9 Casco Philippine Chemical Co., Inc. v. Gimenez,
etc., Et Al., 10 Morales v. Subido, etc., 11 and Philippine Judges Association, etc., Et. Al. v. Prado, etc., Et
Al., 12 on the one hand, and Tañada, Et. Al. v. Cuenco, Et Al., 13 Sanidad, Et. Al. v. Commission on
Elections, Et Al., 14 and Daza v. Singson, Et Al., 15 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 impermeable 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
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. chanroble s.com : vi rtua l law lib rary

Respondents thus emplaced on their battlements the pronouncements of this Court in the aforecited case of
Philippine Judges Association v. Prado. 16 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 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 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 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)under the ‘enrolled bill rule’ by which an enrolled bill is sole expository of
its contents and 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 houses
of Legislature are required to furnish the evidence." 17

In fact, in Gwynn v. Hardee, etc., Et Al., 18 the Supreme Court of Florida declared: jgc:cha nro bles.com. ph

"(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 v. Atlantic Lumber Co., 51 Fla. 628, text
633, 41 So. 72, 73: chanrob1es vi rtua l 1aw lib ra ry

‘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 Auto Supply, Et. Al. v. Department of Revenue, Et Al., 19 pertinent
excerpts wherefrom are extensively reproduced hereunder: jgc:c hanro bles. com.ph

". . . 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.
 x x x

" [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

". . . 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.

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

"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 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 remove one of the original reasons for the rule. (5) The rule disregards the primary
obligation of the courts to seek the truth and to provide a 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): cha nro b1es vi rtua l 1aw lib ra ry

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 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. . . . Under this approach there is a prima facie presumption that an enrolled bill is valid, but
such presumption may be overcome by clear, satisfactorily 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. . . ." (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.

DAVIDE, JR., J., dissenting: chanro b1es vi rtual 1aw lib rary

The legislative history of R.A. No. 7716, as highlighted in the Consolidated Memorandum for the public
respondents submitted 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.chan roblesv irt ualawli bra ry

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: jgc:c hanro bles. com.ph

"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." cralaw virt ua1aw lib ra ry
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: jgc:chan roble s.com.p h

"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." cralaw virtua 1aw lib rary

Webster’s Third New International Dictionary 1 defines originate as follows: jgc:c hanrobles. com.ph

"vt 1: to cause the beginning of: give rise to: INITIATE . . . 2. to start (a person or thing) on a course or
journey . . . vi: to take or have origin: be derived: ARISE, BEGIN, START . . ." cralaw virtua 1aw lib rary

Black’s Law Dictionary 2 defines the word exclusively in this wise: jgc:c hanro bles. com.ph

"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 of exclude." cralaw vi rtua1aw l ib rary

In City Mayor v. The Chief of Philippine Constabulary, 3 this Court said: jgc:chanrob les.co m.ph

"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)."cralaw virtua1aw li bra ry

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." chanroble s law lib ra ry

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 consist of the reading of the bill in the form recommended by
the corresponding committee; and the third reading is the reading of the bill in the form it will be after
approval on second reading. 4 During the second reading, the following takes place: ch anrob1e s virtual 1aw lib rary

(1) Second reading of the bill;

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

(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 is closed, the voting on the bill on second reading. 5

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 and the yeas and nays shall be entered in the Journal. 6

Under the Rules of the House, the first reading of a bill consists of a reading of the number, title, and author
followed by the referral to the appropriate committees; 7 the second reading consists of the reading in full of
the bill with the amendments proposed by the committee, if any; 8 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 Members at least three days before, unless the bill is certified.9 At
the second reading, the following takes place: chan rob1es v irt ual 1aw li bra ry

(1) Reading of the bill;

(2) Sponsorship;
(3) Debates;

(4) Period of Amendments; and

(5) Voting on Second Reading. 10

At the third reading, the votes shall be taken immediately and the yeas and nays entered in the Journal. 11

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. Amendments to the bill on third reading are constitutionally prohibited. 12

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: jgc:c hanro bles. com.ph

"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." cralaw virtua1aw l ibra ry

Simplified, this rule means that: chanrob1e s virtual 1aw lib rary

1. As to a bill originating in the House: chan rob1e s virtual 1aw l ibra ry

(a) Upon its approval of 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;

(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: chanrob1e s virtual 1aw l ibra ry

(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 Rules of the House states: jgc:chanro bles. com.ph

"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." cralaw virtua 1aw lib rary

and Section 51, XXIII of the Rules of the Senate provides: jgc:chan roble s.com.p h

"Sec. 51. Prior to their final approval, bills and joint resolutions shall be read at least three times." cralaw vi rtua1aw l ibra ry

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 conference is specifically covered by Section 26, Rule XII of the Rules of the Senate
which reads: jgc:chan roble s.com.p h

"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." cralaw virtua1aw library

and Section 85, Rule XIV of the Rules of the House which reads: jgc:chan robles. com.ph

"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." cralaw virt ua1aw lib rary

The foregoing provisions of the Constitution and the Rules of both chambers of Congress are mandatory.

In his Treatise On The Constitutional Limitations, 13 more particularly on enactment of bills, Cooley
states:jgc:chanrob les.co m.ph

"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 discretion, to be established, modified, or abolished by the bodies for whose government in non-
essential matters they exist." cralaw virtua1aw li bra ry

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: chanrob1es vi rt ual 1aw li bra ry

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 and Means in substitution of
House Bills Nos. 253, 771, 2450, 7033, 8086, 9030, 9210, 9397, 10012, and 10100, and covered by its
Committee Report No. 367, 14 was approved on third reading by the House on 17 November 1993. 15
Interestingly, HB No. 9210, 16 which was filed by Representative Exequiel B. Javier on 19 May 1993, was
certified by the President in his letter to Speaker Jose de Venecia, Jr. of 1 June 1993. 17 Yet, HB No. 11197,
which substituted HB No. 9210 and the others above-stated, was not. Its certification seemed to have been
entirely forgotten. c hanro bles law lib rary : red

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 requested the concurrence of the
Senate therewith. 18

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 as it should have. It acted only on
Senate Bill (SB) No. 1129 19 introduced by Senator Ernesto F. Herrera on 1 March 1993. It then prepared
and proposed SB No. 1630, and in its Committee Report No. 349 20 which was submitted to the Senate on 7
February 1994, 21 it recommended that SB No. 1630 be approved "in substitution of S.B. No. 1129, taking
into consideration P.S. Res. No. 734 and H.B. No. 11197." 22 It must be carefully noted that S.B. No. 1630
was proposed and submitted for approval by the Senate in SUBSTITUTION of 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.

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: jgc:chanro bles. com.ph

"Assuming that SB 1630 is distinct from HB 11197, amendment by substitution is within the purview of
Section 24, Article VI of the Constitution."
cralaw virtua1aw l ibra ry

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 v. 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 the one
originally proposed by the House of Representatives.’" 23

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 dissented), seven members, and three ex-officio
members,24 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 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. chanrobles. com:cra law:red

In the second place, the Office of the Solicitor General intentionally made it appear, to mislead rather than
to persuade us, that in Flint v. Stone Tracy Co. 25 the U.S. Supreme Court ruled, as quoted by it in the
Consolidated Memorandum for Respondents, as follows: 26

"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 boy 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 supported as a
valid amendment.

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 bill.’"

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 v. 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 pat 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: jgc:chanro bles. com.ph

"Messrs. Charles A. Snow and Joseph H. Knight filed a brief for appellees in No. 425: cha nrob1es vi rtual 1aw lib rary

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: chan rob1e s virtual 1aw l ib rary

These cases involve the constitutional validity of par. 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 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 relief 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 proposed." (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.

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 v. 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: jgc:chan robles. com.ph

"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." chan robles lawlib rary : re dnad

This provision, contrary to the misleading claim of the Solicitor General, is not a similar to Section 24, Article
VI of our Constitution, which for easy comparison is hereunder quoted again: jgc:chan robles. com.ph

"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." cralaw virtua 1aw lib rary

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 propose or concur with amendments. In the light of the exclusively 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
Flint v. Stone nor be awed by Rainey v. United States 27 and the opinion of Messrs. Ogg and Ray 28 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 it 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: jgc:chan roble s.com.p h

"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."
cralaw virtua 1aw lib rary

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: jgc:chanroble s.com.p h

"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 Senate may, in effect, originate them
also." 29

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. 1179 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. 11179. 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 prohesy 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. 11179 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
began upon its filing, as a Committee Bill of the House Committee on Ways and Means, in the House.

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: chanrob1es vi rt ual 1aw li bra ry

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 Senate approved it on second reading and on third reading. 30 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 the enactment of SB No. 1630 . . . to meet a
public emergency." 31

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 into HB No. 11197) was certified on 1 June 1993.
32

Also, the certification of SB No. 1630 cannot, by any stretch of the immigration, 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.

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 of thereof and its request for a bicameral conference "in view of the disagreeing
provisions of said bill and House Bill No. 11197." 33

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 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 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. chanrobles. com : virtual law l ibra ry

Indisputably, 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 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 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 in this wise, as
quoted in the Consolidated Memorandum for Respondents: 34

"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.

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 records as 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 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.

(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; Emphasis 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 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 the SB No. 1630 did not pass three readings in the House and HB No. 11197 did not pass second and
third 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 "in view of the disagreeing provisions of" the two bills. 35 Its duty
was limited to the reconciliation of disagreeing provisions or the resolution of differences or inconsistencies.
The committee recognized that limited authority in the opening paragraph of its Report 36 when it said: jgc:chan rob les.com. ph

"The Conference Committee on the disagreeing provisions of House Bill No. 11197 . . . and Senate Bill No.
1630 . . ."
cralaw virtua1aw l ibra ry

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 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.

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 breachs 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 a 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 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
enrolled bill doctrine is of American origin, and unquestioned fealty to it may no longer be justified in view of
the expanded jurisdiction 37 of this Court under Section 1, Article VIII of our Constitution which now
expressly grants authority to this Court to: jgc:chanroble s.com. ph

"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." chanrobles vi rtua l lawlib ra ry

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 v. Villegas, 38 declared that it cannot be truly said that
Mabanag v. Lopez Vito 39 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 by the Congress shall, before it becomes law, be
presented to the President.’ In Brown v. Morris, supra, the Supreme Court of Missouri, interpreting a similar
provision in the 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 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 cano
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 to hold "inviolate what is decreed by
the Constitution." 40

I vote then to GRANT these petitions and to declare R.A. No. 7716 as unconstitutional.

ROMERO, J., dissenting: chanrob 1es vi rtua l 1aw lib rary

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. chanrobles v irt ual lawl ibra ry

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 prelaced by the manufacture’s sales tax, the Tax Code had provided
for a single-stage value-added tax on original sales by manufacturers, procedures 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. 1991 (as amended by Presidential Decree No. 2006)." 1

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 to percentage taxes based mainly on gross
receipts." 2

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 of service ("input tax") against the tax due on his own sale."
3

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 sa Pamahalaan ng Pilipinas, Inc., Et. Al. v. Tan. 4 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 Constitution." 5 In dismissing the
consolidated petitions, this Court stated:jgc:chanroble s.com.p h

"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 of excess of jurisdiction; and, in this regard, the Court find no reason to impede
its application or continued implementation." 6

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: chan rob1e s virtual 1aw l ibra ry

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

Senate Res. No. 734 7 September 10, 1992

HB No. 7033 February 3, 1993

HB No. 1129 8 March 1, 1993

HB No. 8086 March 9, 1993

HB No. 9030 March 11, 1993

HB No. 9210 9 May 19, 1993

HB No. 9297 May 25, 1993

HB No. 10012 July 28, 1993

HB No. 11197 in substitution

of HB Nos. 253, 771,

2450, 7033, 8086, 9030,

9210, 9297, 10012 and

10100 10 November 5, 1993

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 House on second reading November 11, 1993

HB No. 11197 was approved in the

Lower House on third reading

and voted upon with 114 Yeas and Nays November 17, 1993

HB No. 11197 was transmitted to the Senate November 18, 1993

Committee on Ways and Means

submitted Com. Report No. 349

recommending for approval SB

No. 1630 in substitution of SB

No. 1129, taking into consideration

PS Res. No. 734 and HB No. 11197 11 February 7, 1994 - Certification by President Fidel V. Ramos

of Senate Bill No. 1630 for immediate

enactment to meet a public emergency March 22, 1994 - SB No. 1630 was approved by the Senate

on second and third readings and

subsequently vote upon with 13 yeas,

none against and one abstention March 24, 1994 - Transmittal by the Senate to the Lower

House of a request for a conference

in view of disagreeing provisions of

SB No. 1630 and HB No. 11197 March 24, 1994 - The Bicameral Conference Committee

conducted various meetings to reconcile

the proposals on the VAT April 13, 19, 20, 21,25

cralaw: red

The House agreed on the Conference

Committee Report April 27, 1994 - The Senate agreed on the Conference

Committee Report May 2, 1994 - The President signed Republic Act

No. 7716 — The Expanded

VAT Law 12 May 5, 1994 - Republic Act No. 7716 was published
in two newspapers of general

circulation May 12, 1994 - 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. chanroble svirtual|awli bra ry

At the oral hearing held on July 7, 1994, this Court delimited petitioners’ argument to the following culled
from their respective petitions.

PROCEDURAL ISSUES

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

Does it violate Article VI, Section 26, paragraph 2, of the Constitution? 14

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: chan rob1e s virtual 1aw lib rary

1. Section 1 15

2. Section 4 16

3. Section 5 17

4. Section 10 18

Does the law violate the following other provisions of the Constitution?

1. Article VI, Section 28, paragraph 1 19

2. Article VI, Section 28, paragraph 3 20

As a result of the unedifying experience of the past where the Court had the propensity to steer clear or
questions it perceived to be "political" in nature, the present Constitution, in contract, 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 of excess of jurisdiction on the
part of any branch or instrumentality of the Government." 21 I submit that under this explicit mandate, the
Court is empowered to rule upon acts of other Government entitles for the purpose of determining whether
there may have been, in fact, irregularities committed tantamount to violation of the Constitution, which
case would clearly constitute a grave abuse of discretion on their part. chanrob lesvi rtual|awl ibra ry

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 by claiming that such matters constitute a political question." 22

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.
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 of the case itself, the same being the lis
mota of the case. 23

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: jgc:c hanro bles. com.ph

"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." cralaw virtua 1aw lib rary

In G.R. Nos. 115455 and 115781, petitioners argue: c hanrob1es vi rt ual 1aw li bra ry

(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 the third readings. chan rob les vi rtualaw lib rary c hanrobles. com:cha nrob les.com. ph

(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 "in substitution of S.B. No. 1129, taking into consideration
P.S. Res. No. 734 and H.B. No. 11197." cralaw virtua 1aw lib rary

(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 1, Section 7 (1) of the Constitution of the United States, which states: jgc:chanroble s.com.p h

"All bills for raising revenue shall originate in the House of Representatives, but the Senate may propose of
concur with amendments as on other bills." cra law virt ua1aw lib ra ry

The historical precedent for requiring revenue bills to originate the Congress is explained in the U.S. case of
Morgan v. Murray: 24

"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 article 1, 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 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. . . ." cralaw virtua1aw l ib rary

The legislative authority under the 1935 Constitution being unicameral, in the form of the National
Assembly, it served no purpose to include the subject provision in the draft submitted by the 1934
Constitution 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: jgc:chanrobles. com.ph
"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: chan rob1e s virtual 1aw l ibra ry

‘All bills appropriating public funds, revenue of 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. 38 and later
of Resolution No. 73." 25 (Emphasis supplied)

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." (Emphasis supplied)

That all revenue bills, such as Republic Act No. 7716, should "originate exclusively in the House of
Representatives" logically flows from the more representatives 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 then 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 for
such uses as may best advance public interests." 26

The popular nature of the Lower House has been more pronounced with the inclusive 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 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." (Emphasis supplied)

This novel provision which was implemented in the Batasang Pambansa during the martial law regime 27
was eventually incorporated in the present Constitution in order to give those from the marginalized and
often deprive 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." cralaw virtua1aw li bra ry

That the Congressmen indeed have access to, and consult their constituencies has been demonstrated often
enough by the fact that even 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." cralaw virtua1aw lib rary

On the other hand, the world "exclusively" is defined by the same Webster’s Dictionary as "in an exclusive
manner, to the exclusive 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." cralaw virtua 1aw lib rary

This Court had occasion to define the term "exclusive" as follows: jgc:cha nro bles.c om.ph

". . . In its usual and generally accepted sense, the term means possessed to the exclusive of others;
appertaining to the subject alone; not including, admitting or pertaining to another or others; undivided,
sole." 28

When this writer, during the oral argument of July 7, 1994, asked the petitioner in G.R. No. 11455 whether
he considers the word "exclusively" to be synonymous with "solely," he replied in the affirmative. 29

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 bill 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. 11129 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 firs
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.

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 introducing
reforms in the mechanics of implementation. 30 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 widen the tax base of the VAT
and enhance its administration. 31

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 Chairman 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" or "insertions to emanate from
the senate." 32

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 of 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. chanrobles law lib rary

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 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 of a Senate and a House of Representatives.
. ." 33 (Emphasis 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 the Lower House for deliberation, the later 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 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 attempted to rectify some of the perceived irregularities by presenting a motion in the
Senate recall the bill from the Conference Committee so that it could revert to the period of amendment, but
he was outvoted, in fact "slaughtered." 34

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 the Acting Secretary
General of the House of Representatives. 35 With the signature of 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 (or president) and filed by the secretary of state." 36

Stated differently:jgc:chan roble s.com. ph

"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
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 Act, so authenticated, is in conformity with the
Constitution." 37

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 test 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. Which shall prevail: the
journal or the enrolled bill?

A word on the journal.

"The Journal is the official record of the acts of 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 of rules concerning what is to be recorded and how
it is to be recorded." 38

Article VI, Section 16 (4) of the Constitution ordains: jgc:chanrob les.com .ph

"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." (Emphasis supplied)

The rationale behind the above provision and of the "journal entry rule" is as follows: jgc:chan roble s.com.p h

"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 provided by the constitution. It is not presumptuous in
the courts, nor disrespectful to the legislature, to judge the acts of the legislature by its own evidence." 39

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
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 Constitution, compliance and 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, Nebraska, Arizona, Oregon, New Jersey,
Colorado, and others." 40

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: jgc:chanrobles. com.ph

"We believe that a move 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 overcome by clear satisfactory and convincing evidence establishing that
constitutional requirements have not been met." 41

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

Advocates of the "journal entry rule" cite the 1916 decision in U.S. v. Pons 42 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." cralaw virtua 1aw lib rary

"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 date of adjournment when such journals are clear
and explicit." 43

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: jgc:c h anroble s.com.p h

"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 with the legitimate powers and functions of the Legislature." 44

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 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 court did not err in declining to go
behind these journals." 45

The Court made a categorical stand for the "enrolled bill rule" for the first time in the 1947 case of Mabanag
v. Lopez Vito 46 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 judges under the ‘enrolled bill rule’ born of that respect." 47

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 the provisions of such Act 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 ways specified in Section 313 of Act No. 190 as amended." 48 Three
Justices voiced their dissent from the majority decision.

Again, the Court made in position plain in the 1963 case of Casco Philippine Chemical Co., Inc. v. Gimenez
49 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 of curative legislative 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." cralaw virt ua1aw li bra ry

Thus, the Court upheld the respondent Auditor General’s interpretation that Republic Act No. 2609 really
exempted from the margin fee or foreign exchange transactions "urea formaldehyde" as found in the law
and not "urea and formaldehyde" which petition 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 rule 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. . . . Expressed elsewise, this is
matter worthy of the attention not of an Oliver Wendell Holmes but of a Sherlock Holmes." 50 The alleged
omission of a phrase in the final Act was made, not at any state 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: jgc:chan robles. com.ph

"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 journal, the
enrolled bill prevails in the event of any discrepancy." 51

More recently, in the 1993 case of Philippine Judges Association v. Prado, 52 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." cralaw virt ua1aw lib ra ry

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 reading and printing
requirements which were exempted by the Presidential certification, may no longer be 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. chan roble s virtualawl ibra ry cha nro bles. com:chan roble s.com. ph

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
legislature would be offended if courts examined legislative procedure. 53

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

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 which such grave abuse of discretion as to amount
to loss of jurisdiction. . . . 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
such abuse of discretion as to amount to loss of jurisdiction. . . ." 55

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 . . . to determine whether or not there has been a grave
abuse of discretion amounting to lack of 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
procedures of its coordinate branch only to uphold the Constitution. 56

A conference committee has been defined: jg c:chan roble s.com.p h

". . . 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 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 Committee [U of Ill. Press, 1951])." 57

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, or 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: c hanro b1es virtua l 1aw lib rary

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 event 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." cralaw virtua1aw l ibra ry
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." cralaw virtua1aw li bra ry

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 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 difference of opinion between the two Houses on matters pending between them." 58 It further
states:jgc:chanrob les.co m.ph

"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. . . . Managers
may not change the text to which both Houses have agreed." 59 (Emphasis supplied.)

Mason’s Manual of Legislative Procedures which is also considered as controlling authority for any situation
not covered by a specific legislative rule,60 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, "the subject of the
conference should always be stated." 61

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 that were not originally contemplated by them." 62

In Legislative Procedure, Robert Luce gives a graphic description of the milieu and the circumstances which
have conspired to 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

Entangled in a network of rule and custom, the Representative who resents and would resist this theft to his
rights, finds himself helpless. Rarely can be 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 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

Speaking broadly, the system of legislating by conference committee is unscientific and therefore defective.
Usually it forfeits the benefit of scrutiny and judgment by all the wisdom available. Uncontrolled, it is inferior
to that process by which every amendment is secured independent discussion and vote. . . ." 63 (Emphasis
supplied)

Not surprisingly has it been said: "Conference Committee action is the most undemocratic procedure in the
legislative process; it is an appropriate target for legislative critics." 64

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: c hanro b1es vi rt ual 1aw li bra ry

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 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: chanrob1es vi rt ual 1aw li bra ry

— 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 of exchange of services," as to make them subject to VAT, the
BICAM included/inserted the following (not found in either House or Senate Bills): cha nrob 1es vi rtua l 1aw libra ry

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;

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 companies;

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. Thus, importation of vessels with tonnage of more than five thousand tons in 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.

The sale of real properties was included in the exempt transactions under the House Bill, but the BICAM
qualified this with the provision:
jgc:cha nrob les.com. ph

"(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 of 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 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: "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." cralaw virt ua1aw li bra ry

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 derived . . ., 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.

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. chanro blesv irtua l|awlib rary

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 circumscribed by the
committee’s sole authority and function to reconcile differences.

Parenthetically, the Senate and in the House, a matter is "germane" to a particular bill if there is a common
tie between said matter and 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. 65 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. 66

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" 67 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, and 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 in disagreement between the
Houses and the committee. 68 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. cha nro bles lawl ib rary : red nad

In the instant case before us, the insertions and deletions made 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, 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, 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 surprises 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." cralaw virtua1aw l ibra ry

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 matter which suddenly spring on the legislative horizon.

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 observes. To that extent, the proceedings were shrouded in
mystery and the public’s right to information on matter of public concern as enshrined in Article III, Section
7 69 and the government’s policy of transparency in transactions involving public interest in Article II,
Section 28 of the Constitution 70 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. chanrobles law l ibra ry : red
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 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 of a
Senate and a House of Representatives. . . . "71 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." cralaw virtua 1aw lib rary

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 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 VII, 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 of our Constitution is not
acceptable to this Court." 72

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 of Senate Bill No. 720 or of House Bill No. 4200 but only in the
Conference Committee Report, was violate 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: jgc:cha nrob les.com .ph

"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 functions is described
thus:chanrob 1es vi rtua l 1aw lib rary
‘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, 1986 Ed., p. 81).’" 73 (Emphasis 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 the subject of differences between the House and Senate versions of a bill cannot be nullified. It
submit 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, revoked or
waived at will by the legislators themselves. 74 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 final action in violation or disregard of legislative
rules. 75 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?

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." cralaw virtua1aw l ib rary

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 to tax is
"the strongest of all the powers of government." 76 Admittedly, "for all its plenitude, the power to tax is not
unconfined. There are restrictions." 77 Were there none, then the off-quoted 1803 dictum of Chief Justice
Marshall that "the power to tax involves the power to destroy" 78 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 to tax is
not the power to destroy while this Court sits." 79

Manakanaka, mayroong dumudulog dito sa Kataastaasang Hukuman na may kamangha-manghang hinaing.

Angkop na halimbawa ay ang mga petisyong iniharap ngayon sa amin.

Ang ilan sa kanila ay mga Senador na nais mapawalang bisa ang isang batas ukol sa buwis na ipinasa
mismo nila. Diumano ito ay hindi tumalima sa mga itinatadhana sa Saligang Batas. Bukod sa rito, tutol sila
sa mga bagong talata na isiningit ng "Bicameral Conference Committee" na nagdagdag ng mga bagong
bagay bagay at serbisyo na papatawan ng buwis. Ayon sa kanila, ginampanan ng komiteng iyan ang gawain
na nauukol sa buong Kongreso. Kung kaya’t and nararapat na mangyari ay ihatol ng kataastaasang
Hukuman na malabis na pagsasamantala sa sariling pagpapasiya ang ginawa ng Kongreso.

Bagama’t bantulot kaming makialam sa isang Kapantay na sangay ng Pamahalaan, hindi naman nararapat
na kami ay tumangging gampanan ang tungkulin na iniatas sa amin ng Saligang Batas. Lalu’t-lalo nang ang
batas na kinauukulan ay maaaring makapinsala sa nakararami sa sambayanan.

Sa ganang akin, itong batas na inihaharap sa amin ngayon, at totoong labag sa Saligang Batas,
samakatuwid ay walang bisa. Ngunit ito ay nauukol lamang sa mga katiwalian na may kinalaman sa paraan
ng pagpapasabatas nito. Hindi namin patakaran ang makialam o humadlang sa itinakdang gawain ng
Saligang Batas sa Pangulo at sa Kongreso. Ang dalawang sangay na iyan ng Pamahalaan ang higit na
maalam ukol sa kung ang anumang panukalang batas ay nararapat, kanais-nais o magagampanan; kung
kaya’t hindi kami nararapat na maghatol o magpapasiya sa mga bagay na iyan. Ang makapapataw ng
angkop na lunas sa larangan na iyan ay ang mismong mga kinatawan ng sambayanan 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 of 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 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.

BELLOSILLO, J., dissenting: chan ro b1es vi rtual 1aw lib rary

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. chanro blesvi rt uallawli bra ry

Under the U.S. Constitution," [a]ll bills for raising revenue shall originate in the House of Representatives;
but the Senate may propose on 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 may propose or concur with amendments" (Sec. 24, Art. VI, Emphasis
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
Representatives." cralaw vi rtua 1aw lib rary

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 is indicative of an intent
that the provisions is mandatory. 1 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
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. 2

The framers of our 1987 Constitution could not have been the term "exclusively" if they only meant to
replicate and adopt in 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 statue — 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 legislative 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 against the claim that the revenue
bill originated in the Senate in contravention of Art. I, Sec. 7, of the U.S. Constitution." 3 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
extension tax revision bill in the same year, and recast most of the permanent tariff bill of 1922 4 —

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, speaking through Chief Justice White in Rainey v. United States 5 upheld the revenue bill
passed by Congress and adopted the ruling of the lower court that —

. . . the secretion 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.
Flint v. Stone Tracy Co., 6 on which the Solicitor General heavily leans in his Consolidated Comment as well
as in his Memorandum, does not support the thesis of the 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 it now referred to as "amendment by substitution," 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.

It is also theorized that in the U.S., amendment by substitution is recognized. That may be true. But the
process may be validity 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 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 it own bill. It must be 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 it 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 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 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 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 in disregard of the
judgment of the judicial tribunals. 7

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. chanrob lesvi rtual lawlib rary: red

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
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.

PUNO, J., dissenting: chanrob 1es vi rtual 1aw lib rary

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 slight 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 Title V and 236, 237 and 238 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. 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: jgc:chanro bles. com.ph

"CONFERENCE COMMITTEE REPORT

The Conference Committee on the disagreeing provisions of House Bill No. 11197, entitled: c hanrob1es vi rt ual 1aw li bra ry

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: chan rob1e s virtual 1aw l ibra ry

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 recommended and do hereby recommend to their
respective Houses that House Bill No. 11197, in consolidation with Senate 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. chan robles virtua l lawlib rary

Approved." cralaw virt ua1aw li bra ry

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/deletions numbering twenty four (24) are specified in detail by petitioner Tolentino as follows: 2

"SOME SALIENT POINTS ON THE

(AMENDMENTS TO THE VAT LAW [EO 273])

SHOWING ADDITIONS/INSERTIONS MADE BY BICAMERAL CONFERENCE COMMITTEE TO SB 1630 7 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 and 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: chan rob1es v irt ual 1aw l ibra ry

HB (pls. refer SB (pls. refer BCC (RA 7716

to Sec. 2) to Sec. 1(4) (Sec. 2)

1. Right or the privilege to use 1. The same 1. The same

patent, copyright, design, or

model, plan, secret formula

or process, goodwill trade-

mark, tradebrand or other

like property or right.

2. Right or the privilege to use 2. The same 2. The same

in the Philippines of any

industrial, commercial, or

scientific equipment.

3. Right or the privilege to use 3. The same 3. The same

motion picture films, films,

tapes anddiscs.
4. Radio and Television time 4. The same 4. In addition to radio and

television time the

following were included:cha nrob 1es vi rtual 1aw lib rary

SATELLITE

TRANSMISSION and

CABLE TELEVISION

TIME

5. Other Similar 5. The same 5.’Other properties

similar properties’

was deleted

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 provision which included 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):
c han rob1es v irt ual 1aw l ibra ry

1. Services of lessors of property WHETHER PERSONAL OR REAL; (See BCC Report/Bill p. 7)

2. WAREHOUSING SERVICES (Ibid.,)

3. Keepers of RESTHOUSES, PENSION HOUSES, INNS, RESORTS (Ibid.,)

4. Common carries by LAND, AIR AND SEA (Ibid.,)

5. SERVICES OF FRANCHISE GRANTEES OF TELEPHONE AND TELEGRAPH;

6. RADIO AND TELEVISION BROADCASTING

7. ALL OTHER FRANCHISE GRANTEES EXCEPT THOSE 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
SATELLITE 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:chan rob1es v irt ual 1aw l ibra ry

‘(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 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 . .
. 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.

VIII On Section 115

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 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 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." cralaw vi rtua 1aw lib rary

The charge that the Bicameral Conference Committee added new provisions in the bill 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 Conferences 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 provision, no law, not even any rule or regulation. 3 Worse, there 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. chan robles v irt ual lawl ibra ry
Thus, Section 209, Rule XII of the Rules of the Senate provides: jgc:chanrobles.com.ph

"In the event that the Senate does not agree with the House of Representatives on the provisions 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.

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: jgc:chan roble s.com. ph

"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.

. . . Each report shall contain a detailed, sufficiently explicit statement of the changes in or amendments to
the subject measure." (Emphasis supplied)

The Jefferson’s Manual has been adopted 4 as a supplement to our parliamentary rules and practices.
Section 456 of Jefferson’s Manual similarly confines the powers of a conference committee, viz: 5

"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." cralaw virt ua1aw li bra ry

This rules of antiquity has been honed and honored in practice by the Congress of the United States. Thus, it
is chronicled by Floyd Biddick, Parliamentarian Emeritus of the United States Senate, viz: 6

"Committees of conferences 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 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 Representative 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 . . . elected at large by the qualified voters of the Philippines. . ." 7 Similarly, when the
Constitution vested the legislative power to the House, it means the House." . . composed of not more than
two hundred and fifty members . . . who shall be elected from legislative districts . . . and those who . . .
shall be elected through a party-list system of registered national, regional, and sectoral parties or
organizations." 8 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 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 in 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 is 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 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 power committees of Congress and the full and 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 Chairman of the Standing Committees of
Congress. . ." 9 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 then 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 States 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 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 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. chanroblesv irt ual|awlib rary

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. This lack of real choice is well observed by
Robert Luce: 10
"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 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 the 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." cralaw vi rtua 1aw libra ry

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 the position that to leave-it is a
practical impossibility." 11 Thus, he concludes that "conference committee action is the most undemocratic
procedure in the legislative process." 12

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 . . ." But it is hornbook law that the sources of Rules of Procedure are many and
hierarchical in character. Mason laid them down as follows: 13

". . .

1. Rules of Procedure are derived from several sources. The principal sources are as follows: cha nro b1es vi rtua l 1aw lib ra ry

a. Constitutional rules.

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 source listed earlier prevails
over the rule from the source listed, later. Thus, where the Constitution requires three readings of bills, this
provision controls over any provision of statue, 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 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. 14 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 of an
enrolled bill. Prof. Sutherland observed: 15

". . . .

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 accords with the
recital in the journal and the constitutional procedure." cralaw vi rtua1aw l ibra ry

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: jgc:c han robles. com.ph

". . . Numerous reasons have been given for this rule. Traditionally, an enrolled bill was ‘a record’ and as
such was not subject of attack at common law. Likewise, the rule of conclusiveness was similar to the
common law rule of the inviolability of the sheriff’s return. Indeed, they have 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.

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 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." . . 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 be attacked by any authoritative source of information." 16

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. 17

With due respect, I submit that these rulings are no longer good law. Part of the ratiocination in Mabanag
states: jgc:chanrob les.co m.ph

". . .
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 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." cralaw virtua1aw l ibra ry

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:jg c:chan roble s.com.p h

"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 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 the sense and the reach of judicial power as follows: 18

". . .

. . . 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 of 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.

It is, however, theorized that this provision is nothing new. 19 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 it undermines the security to
tenure of its Members." 20 It also guaranteed fiscal autonomy to the Judiciary. 21

More, it depoliticalized appointments in the judiciary by creating the Judicial and Bar Council which was
tasked with screening the list of prospective appointees to the judiciary. 22 The power of confirming
appointments to the judiciary was also taken away from Congress. 23 The President was likewise given a
specific time to fill up vacancies in the judiciary — ninety (90) days from the occurrence of the vacancy in
case of the Supreme Court 24 and ninety (90) days from the submission of the list of recommendees by the
Judicial and Bar Council in case of vacancies in the lower courts. 25 To further insulate appointments in the
judiciary from the virus of politics, the Supreme Court was given the power to "appoint all officials and
employees of the Judiciary in accordance with the Civil Service Law." 26 And to made 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 performing quasi judicial or administrative functions." 27 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 this Court in an appropriate proceeding filed by any citizen. 28

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 this Court vis-a-
vis the other branches of government. This provision was dictated by our stronger and more independent
judiciary is needed to abort 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 be 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 the enrolled bill. A
resort to this fiction will result in the enactment of laws not properly deliberated upon the 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 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 fining 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.

I vote to declare R.A. No. 7716 unconstitutional.

VITUG, J., concuring: chan rob1e s virtual 1aw l ibra ry

Lest we be lost by a quagmire of trifles, the real threshold and prejudicial issue, to 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. chanrob les vi rtua l lawlib rary

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 this Court in previous cases, nor a
justiciability even now of the issues raised, more than an attempt to sadly highlight the perceived
shortcomings 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, 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.

Endnotes:

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

2. U.S. CONST., Art. I, sec. 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." cralaw vi rtua1aw l ibra ry

3. Art. VII, sec. 21.

4. Art. VI, sec. 1.

5. U.S. CONST., Art. II, sec. 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).

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, sec. 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, sec. 26(2) was taken. Art. VIII, sec. 19(2) of the 1973 document
provided: chan rob1e s virtual 1aw l ib rary

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.

11. Art. VII, sec. 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. Appropriations
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." cralaw vi rt ua1aw lib rary

12. JOURNAL OF THE HOUSE OF REPRESENTATIVES, SIXTH CONGRESS, FOURTH SESSION 398-399 (1968).

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).

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

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

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).

24. See, e.g., Alalayan v. National Power Copr., 24 SCRA 172 (1968); Cordero v. Cabatuando, 6 SCRA 418
(1962); Sumulong v. COMELEC, 73 Phil. 288 (1941).

25. 40 Phil. 224 (1919).

26. Art. VI, sec. 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." cralaw virtua1aw l ibra ry

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

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).

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. Sec. 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 preceeding paragraphs, the gross annual sales
and/or receipts [of which] do no exceed the amount prescribed in regulations to be promulgated by the
President upon the recommendation 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."cralaw virtua1aw l ibra ry

34. 297 U.S. at 250, 89 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. Sec. 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 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. . . ." cralaw virtua 1aw lib rary

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.

41. P.A. FREUND, ON UNDERSTANDING THE SUPREME COURT 11 (1950), quoted in Ermita, Malate Hotel
and Motel Operators Ass’n v. City Mayor, 21 SCRA 449, 459 (1967).

42. Art. VI, sec. 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, sec. 1(1).

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).

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).
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, 20 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).

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).

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).

NARVASA, C.J., concurring: chan rob 1es virtual 1aw l ibra ry

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." cralaw virtua1aw l ibra ry

2. Emphasis supplied.

3. Giving "conclusive" character to copies of Acts of the Philippine Commission which have been signed by
its presiding officers and secretaries.

PADILLA, J., concurring: chanrob 1es vi rtua l 1aw lib rary

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

2. Bautista v. Salonga, G.R. No. 86439, 13 April 1989, 172 SCRA 160.

3. Kapatiran, supra at 385.

4. Sec. 1, Art. VIII.

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

6. 7 SCRA 347.

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.

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

11. 297 U.S. 233.

12. 372 U.S. 58.

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

REGALADO, J., dissenting: chanrob1es virtual 1aw library

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.

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

4. Consolidated Comment 36-37.

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.

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

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.

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

16. Consolidated Memorandum for Respondents, 79-82.

17. Brailsford v. 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. v. Department of Revenue, Et Al., and Bluegrass Provisions Co., Inc., Et. Al. v. Department of
Revenue, Et. Al.

DAVIDE, JR., J., dissenting: chanro b1es vi rtual 1aw lib rary

1. 1971 ed., 1592.

2. Sixth Edition (1990), 565, citing Standard Oil Co. of Texas v. State, Tex. Civ. App., 142 S. W. 2d 519,
521, 522, 523.

3. SCRA 665, 673 [1967].

4. Sections 52 and 53, Rule XXIII.

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.

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

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

14. Consolidated Memorandum for Respondents, Annexes "2" to "12," inclusive.

15. Consolidated Memorandum for Respondents, 18.

16. Id., Annex "9." cralaw virtua 1aw lib rary

17. Id., Annex "1." cralaw virtua 1aw lib rary

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." cralaw virtua1aw l ibra ry

20. Id., Annex "17." cralaw virtua 1aw lib rary

21. Id., 20.

22. Emphasis supplied.

23. Consolidated Memorandum for Respondents, 55-56.

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

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

26. Page 56.

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

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

29. At 317.

30. Consolidated Memorandum for Respondents, 20-21.

31. Id., Annex "14." cralaw virtua 1aw lib rary

32. Id., Annex "1." cralaw virtua 1aw lib rary

33. Consolidated Memorandum for Respondents, Annex "18." cralaw virtua1aw l ib rary

34. Page 22.

35. Consolidated Memorandum for Respondents, Annex "18." cralaw virtua1aw l ib rary

36. Id., Annex "19." cralaw virtua 1aw lib rary

37. ISAGANI A. CRUZ, Philippine Political Law, 1991 ed., 226; Daza v. Singson, 180 SCRA 496 [1989];
Coseteng v. Mitra, 187 SCRA 377 [1990]; Gonzales v. Macaraig, 191 SCRA 452 [1990]; Llamas v. Orbos,
202 SCRA 844 [1991]; Bengzon v. Senate Blue Ribbon Committee, 203 SCRA 767 [1991]; Oposa v.
Factoran, 224 SCRA 792 [1993].

38. 56 SCRA 714, 719, 723 [1974].

39. 78 Phil. 1 [1947].

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

ROMERO, J., dissenting: chanrob 1es vi rtua l 1aw lib rary

1. Vitug, Jose C., COMPENDIUM OF TAX LAW AND JURISPRUDENCE, Third Revised Edition, 1993 at 201.

2. Ibid.

3. Ibid.

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

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." cralaw virt ua1aw lib ra ry

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; actors,
actresses, talents, singers and professional athletes; and lawyers, accountants, doctors and other
professionals registered with the Philippine Regulatory Commission.

9. On June 1, 1993, President Fidel V. ramos certified for immediate enactment House Bill No. 9120 entitled
"An Act Amending Title IV and Sections 237 and 238 of the National Internal Revenue Code, as amended, to
meet a public emergency." cralaw vi rtua 1 aw libra ry

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." cralaw virt ua1aw lib ra ry

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." cralaw virtua 1aw lib rary

12. Republic Act No. 7716 is entitled "An Act Restructuring The Value-Added Tax (VAT) System, Widening
Its Tax Base and Its Administration, And For These Purposes Amending And Repealing The Relevant
Provisions Of The National Internal Revenue Code, as amended, and for other purposes." cralaw virt ua1aw lib ra ry

13. Article VI, Section 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." cralaw virt ua1aw lib ra ry

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." cralaw virt ua1aw li bra ry

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." cralaw virtua1aw l ibra ry

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." cralaw virtua1aw l ibra ry

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." cralaw vi rtua 1aw lib rary

18. Article III, Section 10: "No law impairing the obligation of contracts shall be passed." cralaw virtua1aw li bra ry

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." cralaw virtua 1aw lib rary

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."cralaw virt ua1aw lib ra ry

21. Constitution, Article VIII, Section 1.

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. 72245, January 22, 1980, 95
SCRA 392; People v. Vera, 65 Phil. 56 (1937).

24. 328 P. 2d 644 (1958).

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.

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 was act with maturity. As a result, in 1976, a 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 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 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
passed in 1984. Under Section 27 of Batas Pambansa Blg. 881, the scope of the sectors has been defined as
follows:cha nro b1es vi rtua l 1aw lib ra ry

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.

The youth sector embraces persons not more than twenty-five years to 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.

29. Transcript of the Stenographic Notes (TSN) on the Hearing Had on Thursday, July 7, 1994, pp. 18-19:
JUSTICE FLERIDA RUTH P. ROMERO: chanrob1e s virtual 1aw lib rary

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: chanrob1e s virtual 1aw l ibra ry

A The verb "originate" remains the same, Your Honor, but the word "exclusively", as I said, means "solely.."
..

30. H.B. 771 — exempting the sale of copra from VAT coverage; H.B. 2450- exempting the lessors of
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.

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 would just
to ask, we make the House Bill as the frame of reference, and then 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 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." cralaw virtua1aw library

33. Article VI, Section 1.

34. Transcript of the Stenographic Notes (TSN) on the Hearing Had on Thursday, July 7, 1994, pp. 45-46: jgc:chanro bles. com.ph

"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 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 your were outvoted?

Senator Tolentino: A: Yes, Your Honor; we were actually slaughtered in the voting, so to speak, if Your
Honor please." cralaw vi rtua1aw lib rary

35. The certification states: "This Act which is 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." c ralaw virtua1aw l ibra ry

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

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

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

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

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

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

42. 34 Phil. 729 (1916).

43. Ibid at 733.

44. Ibid at 733-734.

45. Ibid at 735.

46. 78 Phil. 1 (1947).

47. Ibid at 3.

48. Ibid at 18.

49. 117 Phil. 363 (1963).

50. 136 Phil. 405, 409 (1969).

51. Ibid at 412.

52. G.R. No. 105371, November 11, 1993, 227 SCRA 703.

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

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. 1, 4th ed., p.p. 293-294.

58. Page 261.

59. Page 268.

60. Davies, supra, at 65.

61. Sec. 764, p. 541.

62. Consolidated Memorandum for Respondents, p. 71.

63. Pages 404-405 and 407.

64. Davies, supra, at 81.

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).

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 Country, 103 Mont. 576, 64 P. 2d 115, 119 (1937).

68. CONGRESSIONAL RECORD, May 3, 1951, p. 885 cited in Orquiola, Annotated Rules of the Senate, 1991
ed., pp. 40-41.

69. Article III, Section 7. "The right of the people of information on matters of public concern shall be
recognized. Access to official records, and to documents, and the 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."cralaw virtua1aw l ibra ry

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." cralaw virtua1aw l ibra ry

71. Article VI, Section 1.

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

73. The Philippine Judges Association v. Hon. Pete Prado, G.R. No. 105371, November 11, 1993, 227 SCRA
703, 709.

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

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.

BELLOSILLO, J., dissenting: chan ro b1es vi rtual 1aw lib rary

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

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

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

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.

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

PUNO, J., dissenting: chanrob 1es vi rtual 1aw lib rary

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

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.

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 specific book or article.

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.

6. Ibid, citing Riddick, Senate Procedure: Precedents and Practices, US Senate, 1981, US Government
Printing Office, pp. 383-384.

7. Section 2, Article VI.

8. Section 5(1), Article VI.

9. Sutherland, Statutory Construction, 3rd ed., Vol. I, p. 151.

10. Legislative Procedure, 1922 ed., Riverside Press, p. 404.

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.

14. 82 CJS 136.

15. Statutory Construction, 3rd ed., Vol. I., p. 223.

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.

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.

19. Citing Marbury v. Madison, 1 Cranch 137 L. ed [1803].

20. Article VIII, section 2.

21. Article VIII, section 3.

22. Article VIII, section 8.

23. Article VIII, section 9.

24. Article VIII, section 4(1).

25. Article VIII, section 9.

26. Article VIII, section 6.

27. Article VIII, section 12.

28. Article VIII, section 18.