1.

COMMISSIONER OF CIR VS CENTRAL LUZON DRUG CORP GR 148512 June 26, 2006 FACTS: This is a petition for review under Rule 45 of Rules of Court seeking the nullification of CA decision granting respondents claim for tax equal to the amount of the 20% that it extended to senior citizens on the latters purchases pursuant to Senior Citizens Act. Respondent deducted the total amount of Php219,778 from its gross income for the taxable year 1995 whereby respondent did not pay tax for that year reporting a net loss of Php20,963 in its corporate income tax. In 1996, claiming that the Php219,778 should be applied as a tax credit, respondent claimed for refund in the amount of Php150, 193. ISSUE: Whether or not the 20% discount granted by the respondent to qualified senior citizens may be claimed as tax credit or as deduction from gross sales? RULING: Tax credit is explicitly provided for in Sec4 of RA 7432. The discount given to Senior citizens is a tax credit, not a deduction from the gross sales of the establishment concerned. The tax credit that is contemplated under this Act is a form of just compensation, not a remedy for taxes that were erroneously or illegally assessed and collected. In the same vein, prior payment of any tax liability is a pre-condition before a taxable entity can benefit from tax credit. The credit may be availed of upon payment, if any. Where there is no tax liability or where a private establishment reports a net loss forthe period, the tax credit can be availed of and carried over to the next taxable year. WHEREFORE, the Petition is hereby DENIED. The assailed Decision and Resolution of the Court of Appeals AFFIRMED. No pronouncement as to costs. 2. Carlos Superdrug Corp. v. DSWD 526 SCRA 130 (2007) Facts: Petitioners are domestic corporations and proprietors operating drugstores in the Philippines. Petitioners assail the constitutionality of Section 4(a) of RA 9257, otherwise known as the Expanded Senior Citizens Act of 2003. Section 4(a) of RA 9257 grants twenty percent (20%) discount as privileges for the Senior Citizens. Petitioner contends that said law is unconstitutional because it constitutes deprivation of private property. Issue: Whether or not RA 9257 is unconstitutional Held: Petition is dismissed. The law is a legitimate exercise of police power which, similar to the power of eminent domain, has general welfare for its object. Accordingly, it has been described as the most essential, insistent and the least limitable of powe rs, extending as it does to all the great public needs. It is the power vested in the legislature by the constitution to make, ordain, and establish all manner of wholesome and reasonable laws, statutes, and ordinances, either with penalties or without, not repugnant to the constitution, as they shall judge to be for the good and welfare of the commonwealth, and of the subjects of the same.For this reason, when the conditions so demand as determined by the legislature, property rights must bow to the primacy of police power because property rights, though sheltered by due process, must yield to general welfare. WHEREFORE, the petition is DISMISSED for lack of merit. 3.REYES v. ALMANZOR 196 SCRA 322 FACTS: Petitioners JBL Reyes et al. owned a parcel of land in Tondo which are leased and occupied as dwelling units by tenants who were paying monthly rentals of not exceeding P300. Sometimes in 1971 the Rental. Freezing Law was passed prohibiting for one year from its effectivity, an increase in monthly rentals of dwelling units where rentals do not exceed three hundred pesos (P300.00), so that the Reyeses were precluded from raising the rents and from ejecting the tenants. In 1973, respondent City Assessor of Manila re-classified and reassessed the value of the subject properties based on the schedule of market values, which entailed an increase in the corresponding tax rates prompting petitioners to file a Memorandum of Disagreement averring that the reassessments made were "excessive, unwarranted, inequitable, confiscatory and unconstitutional" considering that the taxes imposed upon them greatly exceeded the annual income derived from their properties. They argued that the income approach should have been used in determining the land values instead of the comparable sales approach which the City Assessor adopted. ISSUE: Is the approach on tax assessment used by the City Assessor reasonable? HELD: No. The taxing power has the authority to make a reasonable and natural classification for purposes of taxation but the government's act must not be prompted by a spirit of hostility, or at the very least discrimination that finds no support in reason. It suffices then that the laws operate equally and uniformly on all persons under similar circumstances or that all persons must be treated in the same manner, the conditions not being different both in the privileges conferred and the liabilities imposed. Consequently, it stands to reason that petitioners who are burdened by the government by its Rental Freezing Laws (then R.A. No. 6359 and P.D. 20) under the principle of social justice should not now be penalized by the same government by the imposition of excessive taxes petitioners can ill afford and eventually result in the forfeiture of their properties. By the public respondents' own computation the assessment by income approach would amount to only P10.00 per sq. meter at the time in question. PREMISES CONSIDERED, (a) the petition is GRANTED; (b) the assailed decisions of public respondents are REVERSED and SET ASIDE; and (e) the respondent Board of Assessment Appeals of Manila and the City Assessor of Manila are ordered to make a new assessment by the income approach method to guarantee a fairer and more realistic basis of computation.

4. CIR vs. CA 261 SCRA 236 FACTS: On 22 August 1986, Executive Order No. 41 was promulgated declaring a one-time tax amnesty on unpaid income taxes, later amended to include estate and donor's taxes and taxes on business, for the taxable years 1981 to 1985. Availing itself of the amnesty, respondent R.O.H. Auto Products Philippines, Inc., filed, in October 1986 and November 1986, its Tax Amnesty Return No. 34-F-00146-41 and Supplemental Tax Amnesty Return No. 34-F00146-64-B, respectively, and paid the corresponding amnesty taxes due. Prior to this availment, petitioner Commissioner of Internal Revenue, in a communication received by private respondent on 13 August 1986, assessed the latter deficiency income and business taxes for its fiscal years ended 30 September 1981 and 30 September 1982 in an aggregate amount of P1,410,157.71. However, the request to cancel the deficiency taxes was denied. ISSUES: WON private respondent can avail of the tax amnesty . RULING: YES. Executive Order No. 41 is quite explicit and requires hardly anything beyond a simple application of its provisions. If, as the Commissioner argues , Executive Order No. 41 had not been intended to include 1981-1985 tax liabilities already assessed (administratively) prior to 22 August 1986, the law could have simply so provided in its exclusionary clauses. It did not. The conclusion is unavoidable, and it is that the executive order has been designed to be in the nature of a general grant of tax amnesty subject only to the cases specifically excepted by it. It might not be amiss to recall that the taxable periods covered by the amnesty include the years immediately preceding the 1986 revolution during which time there had been persistent calls, all too vivid to be easily forgotten, for civil Disobedience , most particularly in the payment of taxes, to the martial law regime. It should be understandable then that those who ultimately took over the reigns of government following the successful revolution would promptly provide for a broad, and not a confined, tax amnesty. There is no pretension that the tax amnesty returns and due payments made by the taxpayer did not conform with the conditions expressed in the amnesty order. The decision of the court of Appeals, sustaining that of the court of Tax Appeals, is hereby AFFIRMED in toto. No costs.

5. GOMEZ v. PALOMAR 25 SCRA 827 FACTS: Petitioner Benjamin Gomez mailed a letter at the post office in San Fernando, Pampanga. It did not bear the special anti-TB stamp required by the RA 1635. It was returned to the petitioner. Petitioner now assails the constitutionality of the statute claiming that RA 1635 otherwise known as the Anti-TB Stamp law is violative of the equal protection clause because it constitutes mail users into a class for the purpose of the tax while leaving untaxed the rest of the population and that even among postal patrons the statute discriminatorily grants exemptions. The law in question requires an additional 5 centavo stamp for every mail being posted, and no mail shall be delivered unless bearing the said stamp. ISSUE: Is the Anti-TB Stamp Law unconstitutional, for being allegedly violative of the equal protection clause? HELD: No. It is settled that the legislature has the inherent power to select the subjects of taxation and to grant exemptions. This power has aptly been described as "of wide range and flexibility." Indeed, it is said that in the field of taxation, more than in other areas, the legislature possesses the greatest freedom in classification. The reason for this is that traditionally, classification has been a device for fitting tax programs to local needs and usages in order to achieve an equitable distribution of the tax burden. The classification of mail users is based on the ability to pay, the enjoyment of a privilege and on administrative convenience. Tax exemptions have never been thought of as raising revenues under the equal protection clause. 6. EASTERN THEATRICAL CO., INC vs. ALFONSO 83 Phil 852 FACTS: Twelve corporation engaged in motion picture business have initiated these proceeding through a complaint dated May 5, 1946, to impugn the validity of Ordinance No. 2958 of the City of Manila which was enacted by the municipal Board of said city on April 25 1946 approved by the Mayor on April 27, 1946 and took effect on May 1, 1946 said ordinance is, AN ORDINANCE IMPOSING A FEE ON THE PRICE OF EVERY ADMISSION TICKET SOLD BY CINEMATOGRAPHS, THEATERS VAUDEVILLE COMPANIES THEATRICAL SHOWS AND BOXING EXHIBITION AND PROVIDING FOR OTHER PURPOSES. The plaintiffs contend that the trial court erred in not holding that Ordinance No. 2958 violated the principle of equality and uniformity of taxation enjoined by the Constitution (sec. 22, sub-sec. 1, Art. VI, Constitution of the Philippines). To support the contention, appellants point out to the fact that the ordinance in question does not tax "many more kinds of amusements" than those therein specified, such as "race tracks, cockpits, cabarets, concert halls, circuses, and other places of amusement." the argument has absolutely no merit. The fact that some places of amusement are not taxed while others, such as cinematographs, theaters, vaudeville companies, theatrical shows, and boxing exhibitions and other kinds of amusements or places of amusement are taxed, is no argument at all against the equality and uniformity of the tax

imposition. ISSUE: WON Ordinance No. 2958 violated the principle of equality and uniformity of taxation enjoined by the Constitution (sec. 22, sub-sec. 1, Art. VI, Constitution of the Philippines). HELD: Equality and uniformity in taxation means that all taxable articles or kinds of property of the same class shall be taxed at the same rate. The taxing power has the authority to make reasonable and natural classifications for purposes of taxation; and the appellants cannot point out what places of amusement taxed by the ordinance do not constitute a class by themselves and which can be confused with those not included in the ordinance.The judgment of the trial court is affirmed with costs against appellants. The judgment of the trial court is affirmed with costs against appellants. 7. Manila Race Horse v. Dela Fuente 88 PHIL 60 FACTS: This action was instituted for a declaratory relief by the Manila Race Horses Trainers Association, Inc., a non-stock corporation duly organized and existing under and by virtue of the laws of the Philippines, who allege that they are owners of boarding stables for race horses and that their rights as such are affected by Ordinance No. 3065 of the City of Manila approved on July 1, 1947.1 They made the Mayor of Manila defendant and prayed that said ordinance be declared invalid as violative of the Philippine Constitution. ISSUE: WON the said ordinance be declared invalid as violative of the Philippine Constitution. RULING: In taxing only boarding stables for race horses, we do not believe that the ordinance, makes arbitrary classification. In the case of Eastern Theatrical Co. Inc., vs. Alfonso, it was said there is equality and uniformity in taxation if all articles or kinds of property of the same class are taxed at the same rate. Thus, it was held in that case, that "the fact that some places of amusement are not taxed while others, such as cinematographs, theaters, vaudeville companies, theatrical shows, and boxing exhibitions and other kinds of amusements or places of amusement are taxed, is not argument at all against the equality and uniformity of tax imposition." Applying this criterion to the present case, there would be discrimination if some boarding stables of the same class used for the same number of horses were not taxed or were made to pay less or more than others. From the viewpoint of economics and public policy the taxing of boarding stables for race horses to the exclusion of boarding stables for horses dedicated to other purposes is not indefensible. The owners of boarding stables for race horses and, for that matter, the race horse owners themselves, who in the scheme of shifting may carry the taxation burden, are a class by themselves and appropriately taxed where owners of other kinds of corporation by the local authority would constitute an impairment of the contract between the government and the corporation. It was held that the trial court committed no error and the judgment is affirmed with costs against the plaintiff-appellants.

8. PUNSALAN VS. MUNICIPAL BOARD OF MANILA 95 PHIL 46 Facts: Petitioners, who are professionals in the city, assail Ordinance No. 3398 together with the law authorizing it (Section 18 of the Revised Charter of the City of Manila). The ordinance imposes a municipal occupation tax on persons exercising various professions in the city and penalizes non-payment of the same. The law authorizing said ordinance empowers the Municipal Board of the city to impose a municipal occupation tax on persons engaged in various professions. Petitioners, having already paid their occupation tax under section 201 of the National Internal Revenue Code, paid the tax under protest as imposed by Ordinance No. 3398. The lower court declared the ordinance invalid and affirmed the validity of the law authorizing it. Issue: Whether or Not the ordinance and law authorizing it constitute class legislation, and authorize what amounts to double taxation. Held: The Legislature may, in its discretion, select what occupations shall be taxed, and in its discretion may tax all, or select classes of occupation for taxation, and leave others untaxed. It is not for the courts to judge which cities or municipalities should be empowered to impose occupation taxes aside from that imposed by the National Government. That matter is within the domain of political departments. The argument against double taxation may not be invoked if one tax is imposed by the state and the other is imposed by the city. It is widely recognized that there is nothing inherently terrible in the requirement that taxes be exacted with respect to the same occupation by both the state and the political subdivisions thereof. Judgment of the lower court is reversed with regards to the ordinance and affirmed as to the law authorizing it. The judgment appealed from is reversed in so far as it declares Ordinance No. 3398 of the City of Manila illegal and void and affirmed in so far as it holds the validity of the provision of the Manila charter authorizing it. With costs against plaintiffs-appellants. 9. CITY OF BAGUIO vs. DE LEON 25 SCRA 938 "There is no double taxation where one tax is imposed by the state and the other is imposed by the city." FACTS: The City of Baguio passed an ordinance imposing a license fee on any person, entity or corporation doing business in the City. The ordinance sourced its authority from RA No. 329, thereby amending the city charter

empowering it to fix the license fee and regulate businesses, trades and occupations as may be established or practiced in the City. De Leon was assessed for P50 annual fee it being shown that he was engaged in property rental and deriving income therefrom. The latter assailed the validity of the ordinance arguing that it is ultra vires for there is no statury authority which expressly grants the City of Baguio to levy such tax, and that there it imposed double taxation, and violates the requirement of uniformity. ISSUE: Are the contentions of the defendant-appellant tenable? HELD: No. First, RA 329 was enacted amending Section 2553 of the Revised Administrative Code empowering the City Council not only to impose a license fee but to levy a tax for purposes of revenue, thus the ordinance cannot be considered ultra vires for there is more than ample statury authority for the enactment thereof. Second, an argument against double taxation may not be invoked where one tax is imposed by the state and the other is imposed by the city, so that where, as here, Congress has clearly expressed its intention, the statute must be sustained even though double taxation results. And third, violation of uniformity is out of place it being widely recognized that there is nothing inherently obnoxious in the requirement that license fees or taxes be exacted with respect to the same occupation, calling or activity by both the state and the political subdivisions thereof. WHEREFORE, the lower court decision of December 19, 1964, is hereby affirmed. Costs against defendantappellant. 10. Sison vs Ancheta (1984) 130 SCRA 654 Facts: Batas Pambansa 135 was enacted. Sison, as taxpayer, alleged that its provision (Section 1) unduly discriminated against him by the imposition of higher rates upon his income as a professional, that it amounts to class legislation, and that it transgresses against the equal protection and due process clauses of the Constitution as well as the rule requiring uniformity in taxation. Issue: Whether BP 135 violates the due process and equal protection clauses, and the rule on uniformity in taxation. Held: There is a need for proof of such persuasive character as would lead to a conclusion that there was a violation of the due process and equal protection clauses. Absence of such showing, the presumption of validity must prevail. Equality and uniformity in taxation means that all taxable articles or kinds of property of the same class shall be taxed at the same rate. The taxing power has the authority to make reasonable and natural classifications for purposes of taxation. Where the differentitation conforms to the practical dictates of justice and equity, similar to the standards of equal protection, it is not discriminatory within the meaning of the clause and is therefore uniform. Taxpayers may be classified into different categories, such as recipients of compensation income as against professionals. Recipients of compensation income are not entitled to make deductions for income tax purposes as there is no practically no overhead expense, while professionals and businessmen have no uniform costs or expenses necessary to produce their income. There is ample justification to adopt the gross system of income taxation to compensation income, while continuing the system of net income taxation as regards professional and business income. WHEREFORE, the petition is dismissed. Costs against petitioner. The petition is dismissed. Costs against petitioner. 11. Juan Luna Subdivision vs. Sarmiento 91 PHIL 371 FACTS: Juan Luna Subdivision, Inc. brought a suit against the City treasurer and the Philippines Trust Company as defendants in the alternative to determine which of the two defendants is l iable for plaintiffs checks. It appears that the plaintiff issued to the City treasurer of Manila a check to be applied to plaintiffs land tax for the second semester of 1941, the exact amount of which was yet undetermined . On Feb. 20,1942, after the amount had been verified , which was P341.60, the balance of P1,868.92, covered by voucher no 1487 of the City Treasurers Office , was noted in the ledger as a credit to Juan Luna Subdivision, Inc. Thereafter, the books of the Philippine Trust Company revealed that plaintiffs check was deposited by the City Treasurer with the P hilippine National Bank, and the latter was paid the cash equivalent thereof by the Philippines Trust Company, which debited the amount against Juan Luna Subd.. However the City Treasurer refused after liberation tore fund the plaintiffs deposit or apply it to such future taxes as maybe found due. The plaintiff claims the whole amount of the check contending that the taxes for the last semester of 1941 had been remitted by CA No. 703. ISSUE: WON the said war notes be considered after liberation?

Held: The law is clear that it applies to taxes and penalties due and payable, i.e. taxes owed or owing. The remission of taxes due and payable to the exclusion of taxes already collected does not constitute unfair discrimination. Each set of taxes is a class by itself, and the law would be open to attack as class legislation only if all taxpayers belonging to one class were not treated alike. Herein, they are not. The taxpayers who paid their taxes before liberation and those who had not were not on the same footing on the need of material relief. Taxpayers who had been in arrears in their obligation should have to satisfy their liability with genuine currency, while the taxes paid during the occupation had been satisfied in Japanese War Notes, many of them at a time when those notes were well-nigh worthless. To refund those taxes with restored currency would be unduly enrich many of the payers at a greater expense to the people at large. The appealed judgment should, therefore, be modified so that the defendant City Treasurer shall refund to the plaintiff the sum of P1,868.92 instead P2,210.52, without costs. It is so ordered. 12. ASSOCIATION OF CUSTOM BROKERS, INC. vs. MUNICIPAL BOARD 93 Phil 109 FACTS: The Association of Customs Brokers, Inc., which is composed of all brokers and public service operators of motor vehicles in the City of Manila challenge the validity Ordinance No. 3379 on the ground that (1) while it levies a so-called property tax it is in reality a license tax which is beyond the power of the Municipal Board of the City of Manila; (2) said ordinance offends against the rule of uniformity of taxation; and (3) it constitutes double taxation. The respondents contend on their part that the challenged ordinance imposes a property tax which is within the power of the City of Manila to impose under its Revised Charter [Section 18 (p) of Republic Act No. 409], and that the tax in question does not violate the rule of uniformity of taxation, nor does it constitute double taxation. ISSUE: Whether or not the ordinance is null and void RULING: The ordinance infringes the rule of the uniformity of taxation ordained by our Constitution. Note that the ordinance exacts the tax upon all motor vehicles operating within the City of Manila. It does not distinguish between a motor vehicle for hire and one which is purely for private use. Neither does it distinguish between a motor vehicle registered in the City of Manila and one registered in another place but occasionally comes to Manila and uses its streets and public highways. This is an inequality which we find in the ordinance, and which renders it offensive to the Constitution. Wherefore, reversing the decision appealed from, we hereby declare the ordinance null and void. 13. Ormoc Sugar vs Treasurer of Ormoc City (1968) 22 SCRA 603 Facts: In 1964, the Municipal Board of Ormoc City passed Ordinance 4, imposing on any and all productions of centrifuge sugar milled at the Ormoc Sugar Co. Inc. in Ormoc City a municpal tax equivalent to 1% per export sale to the United States and other foreign countries. The company paid the said tax under protest. It subsequently filed a case seeking to invalidate the ordinance for being unconstitutional. Issue: Whether the ordinance violates the equal protection clause. Held: The Ordinance taxes only centrifugal sugar produced and exported by the Ormoc Sugar Co. Inc. and none other. At the time of the taxing ordinances enacted, the company was the only sugar central in Ormoc City. The classification, to be reasonable, should be in terms applicable to future conditions as well. The taxing ordinance should not be singular and exclusive as to exclude any subsequently established sugar central, of the same class as the present company, from the coverage of the tax. As it is now, even if later a similar company is set up, it cannot be subject to the tax because the ordinance expressly points only to the company as the entity to be levied upon. The decision appealed from is hereby reversed, the challenged ordinance is declared unconstitutional and the defendants-appellees are hereby ordered to refund the P12,087.50 plaintiffappellant paid under protest. No costs. 14. REPEAT CASE: 3. REYES VS. ALMANZOR 196 SCRA 322 FACTS: Petitioner are owners of parcels of land leased to tenants. RA 6359 was enacted prohibiting for one year an increase in monthly rentals of dwelling units and said Act also disallowed ejectment of lessees upon the expiration of the usual period of lease. City assessor of Manila assessed the value of petitioners property based on the schedule of market values duly reviewed by the Secretary of Finance. The revision entailed an increase to the tax rates and petitioners averred that the reassessment imposed upon them greatly exceeded the annual income derived from their properties. ISSUE: Whether or not income approach is the method to be used in the tax assessment and not the comparable sales approach. RULING: By no stretch of the imagination can the market value of properties covered by PD20 be equated with the market value of properties not so covered. In the case at bar, not even factors determinant of the assessed value of subject properties under the comparable sales approach were presented by respondent namely:1.That the sale must represent a bonafide arms length transaction between a willing seller and a willing buyer2.The property must be comparable property. As a general rule, there were no takers so that there can be no reasonable basis for the conclusion that these properties are comparable. Taxes are lifeblood of government, however, such collection should be made in accordance with the law and therefore necessary to reconcile conflicting interests of the authorities so that the real purpose of taxation, promotion of the welfare of common good can be

achieved. By the public respondents' own computation the assessment by income approach would amount to only P10.00 per sq. meter at the time in question.PREMISES CONSIDERED, (a) the petition is GRANTED; (b) the assailed decisions of public respondents are REVERSED and SET ASIDE; and (e) the respondent Board of Assessment Appeals of Manila and the City Assessor of Manila are ordered to make a new assessment by the income approach method to guarantee a fairer and more realistic basis of computation. 15. Villegas Vs. Hiu Chiong 86 SCRA 270 Facts: The controverted Ordinance no. 6537 was passed by the Municipal Board of Manila on February 22, 1968 and signed by Mayor Villegas. It is an ordinance making it unlawful for any person not a citizen of the Philippines to be employed in any place of employment or to be engaged in any kind of trade business or occupation within the city of Manila without securing an employment permit from the Mayor of Manila and for other purposes. Hiu Chiong Tsai Pao Ho, who was employed in Manila filed a petition praying for the writ of preliminary injunction and restraining order to stop the enforcement of said ordinance. Issue: Whether or Not Ordinance no.6537 violates the due process and equal protection clauses of the Constitution. Held: It is a revenue measure. The city ordinance which imposes a fee of 50.00 pesos to enable aliens generally to be employed in the city of Manila is not only for the purpose of regulation. While it is true that the first part which requires the alien to secure an employment permit from the Mayor involves the exercise of discretion and judgment in processing and approval or disapproval of application is regulatory in character, the second part which requires the payment of a sum of 50.00 pesos is not a regulatory but a revenue measure. Ordinance no. 6537 is void and unconstitutional. This is tantamount to denial of the basic human right of the people in the Philippines to engaged in a means of livelihood. While it is true that the Philippines as a state is not obliged to admit aliens within it's territory, once an alien is admitted he cannot be deprived of life without due process of law. This guarantee includes the means of livelihood. Also it does not lay down any standard to guide the City Mayor in the issuance or denial of an alien employment permit fee.The trial court did not commit the errors assigned. The decision appealed from is hereby affirmed, without pronouncement as to costs. 16. Misamis Oriental Association vs. Dept. of Finance Secretary 238 SCRA 63 FACTS: Petitioner Misamis Oriental Association of Coco Traders, Inc. is a domestic corporation whose members, are engaged in the buying and selling of copra. The petitioner alleges that prior to the issuance of Revenue Memorandum Circular 47-91, which implemented VAT Ruling 190-90, copra was classified as agricultural food product under Section 103(b) of the National Internal Revenue Code and, therefore, exempt from VAT at all stages of production or distribution. Said circular classified copra as an agricultural nonfood product and declared it "exempt from VAT only if the sale is made by the primary producer pursuant to Section 103(a) of the Tax Code, as amended." The reclassification had the effect of denying to the petitioner the exemption it previously enjoyed when copra was classified as an agricultural food product under 103(b) of the NIRC. ISSUES: WON the petitioner is exempt from the tax. RULING: NO. In interpreting Section 103(a) and (b) of the NIRC, the Commissioner of Internal Revenue gave it a strict construction consistent with the rule that tax exemptions must be strictly construed against the taxpayer and liberally in favor of the state. As the government agency charged with the enforcement of the law, the opinion of the Commissioner of Internal Revenue, in the absence of any showing that it is plainly wrong, is entitled to great weight. Indeed, the ruling was made by the Commissioner of Internal Revenue in the exercise of his power under Section 245 of the NIRC to "make rulings or opinions in connection with the implementation of the provisions of internal revenue laws, including rulings on the classification of articles for sales tax and similar purposes." The petition is DISMISSED.

17. Tolentino vs. Secretary of Finance 235 SCRA 630 (1994)

FACTS: RA 7716, otherwise known as the Expanded Value-Added Tax Law, is an act that seeks to widen the tax base of the existing VAT system and enhance its administration by amending the National Internal Revenue Code. There are various suits questioning and challenging the constitutionality of RA 7716 on various grounds. Tolentino contends that RA 7716 did not originate exclusively from the House of Representatives but is a mere consolidation of HB. No. 11197 and SB. No. 1630 and it did not pass three readings on separate days on the Senate thus violating Article VI, Sections 24 and 26(2) of the Constitution, respectively. Art. 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. Art. VI, Section 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. ISSUE: Whether or not RA 7716 violated Art. VI, Section 24 and Art. VI, Section 26(2) of the Constitution. HELD: No. The phrase originate exclusively refers to the revenue bill and not to the revenue law. It is sufficient that the House of Representatives initiated the passage of the bill which may undergo extensive changes in the Senate. SB. No. 1630, having been certified as urgent by the President need not meet the requirement not only of printing but also of reading the bill on separate days. The motions for reconsideration are denied with finality and the temporary restraining order previously issued is hereby lifted.