CIR vs.

SANTOS (Tax Case)

“Taxation without representation is tyranny.” - James Otis

Its suicide.. dont bother. First, there's no forced entry, see the aircon unit? its dead. Reason why he
opened the window & loosened his tie. There's no sign of struggle either, he threw the blue chair or
must have kicked it underneath & swept the desk w/ his arm hence the scattered pen holder & papers
on the floor. He was drinkin' whiskey, that's a whiskey glass on the table. And he's not a lawyer sulking
for a lost case LOL. He's a businessman buried in debt & burdened with numerous tax obligations
blaming the 2017 Comprehensive Tax Reform Program hahaha. See the graph on the wall? that's
revenue, it plunged down & so he smashed the bottle on his left wall took his gun from the drawer
aimed on his right temple pulled the trigger and ended it all. Forget the running man on the left window,
your circumstantial evidence won't hold, he must have heard the gun shot or he's just late for office
chasing the lousy MRT train. (train law for crying out loud)

Okay let's get to the case.

Guild of Philippine Jewellers questions the constitutionality of certain provisions of the NIRC & Tarrif and
Customs Code of the Philippines. Their contention was that the present tariff and tax structure
increases manufacturing costs and render local jewelry manufacturers uncompetitive against other
countries.

In support of their position they submitted what they purported to be an exhaustive study of the tax
rates on jewelry prevailing in other Asian countries, in comparison to tax rates levied in the country.

Judge Santos of RTC Pasig ruled that the laws in question are confiscatory and oppressive and declared
them INOPERATIVE and WITHOUT FORCE and EFFECT in so far as petitioners are concerned.

And so petitioner CIR assailed the decision rendered by the respondent judge contending that the latter
has no authority to pass judgment upon the taxation policy of the government. Petitioners also
impugned the decision by asserting that there was no showing that the tax laws on jewelry are in any
way confiscatory.

ISSUE:

WON the RTC has authority to pass judgment upon taxation policy of the government.

RULING:

The policy of the courts is to avoid ruling on constitutional questions and to presume that the acts of the
political departments are valid in the absence of a clear and unmistakable showing in the contrary.

So its clear it is expected of courts to assume presumption of regularity / validity / constitutionality..

unless it is contrary.

This is not to say that the RTC has no power whatsoever to declare the law unconstitutional, but this
authority does not extend to deciding questions which pertain to legislative policy.

In hindsight the SC was saying 'teka lang ah were not saying the lower court has no power to declare a
certain law unconstitutional, we're just saying that authority resides in the legislature'..

RTC have the power to declare the law unconstitutional but this authority does not extend to deciding
questions which pertain to legislative policy. RTC can only look into the validity of a provision, that is
whether or not it has been passed according to the provisions laid down by law, and thus cannot inquire
as to the reasons for its existence.

RATIO:
SC held that it is within the power of the legislature whether to tax jewelry or not. With the legislature
primarily lies the discretion to determine the ff:

1. nature (kind)

2. object (purpose)

3. extent (rate)

4. coverage (subject)

So Judge Santos naturally loses this case. To tell you frankly I've seldom seen an opposing party winning
against the government with regard to taxation issues. Well there are a few numbers, but generally? all
of the tax cases will stare you in the face and say 'you can't win against a formidable enemy'.

The only downside is when government realizes its too late and an inflation has increased when the tax
policy starts rendering adverse results on economic charts. You're faced with a somewhat domino-effect
on prices of commodities and basic services ballooning here and there, its crazy.

And so they will retract and suspend the tax policy, this of course renders our economic managers
discredit and tints their credibility. 'Ahm excuse me sir, do you really know what you're doing?' Lol. They
will reason of course but its tool late, an economic set back has already taken place.

Boy I hope resuming of that tax policy just to save face like saying.. 'we're ahm.. we're.. ahm... know...
what we're do..ing' will not result to more adverse effect. It's really a pain to see that what you're
building is crumbling down instead of putting up.