ADMINISTRATIVE LAW

CASE DIGESTS
NOVEMBER 19, 2019

Cawad vs. Abad, G.R. No. 207145, July 28, 2015

Issue 1: Is DBM-DOH Joint Circular No. 1 reasonable and within the scope of authority granted to the respondents?

Ruling:
YES PO. With respect to the infirmities of the DBM-DOH Joint Circular raised in the petition, they cannot be said to
have been issued with grave abuse of discretion for not only are they reasonable, they were likewise issued well
within the scope of authority granted to the respondents. In fact, as may be gathered from prior issuances on the
matter, the circular did not make any substantial deviation therefrom, but actually remained consistent with, and
germane to, the purposes of the law.

Issue 2: Is DBM-DOH Joint Circular No. 1 null and void for its failure to comply with Section 3523 of RA No. 7305 on
publication in a newspaper of general circulation, as well as its failure to file a copy of the same with the UP Law
Center-ONAR?

Ruling:
NO SIR. The joint circular did not modify, amend, or supplant the revised IRR. It gave no real consequences to what
the law itself has already prescribed. As an exception to the rule on publication, interpretative regulations which
“need nothing further than their bare issuance for they give no real consequence more than what the law itself
already prescribed” need not be published. These kinds of regulations do not need to be published to be effective
since they do not add anything to the law and do not affect substantial rights of any person.

Issue 3: Is Sec. 6.5 of DBM-CSC Joint Circular, insofar as it provides that “an official or employee authorized to be
granted longevity pay under an existing law is not eligible for the grant of step increment due to length of service”,
valid and constitutional?

Ruling:
NOPE. A review of RA No. 7305 and its Revised IRR reveals that the law does not similarly impose such condition
on the grant of longevity pay to PHWs in the government service. As such, the DBM-CSC Joint Circular effectively
created a new imposition which was not otherwise stipulated in the law it sought to interpret. Consequently, the
same exception granted to the DBM-DOH Joint Circular cannot be applied to the DBM-CSC Joint Circular insofar as
the requirements on publication and submission with the UP Law Center – ONAR are concerned. Thus, while it was
well within the authority of the respondents to issue rules regulating the grant of step increments as provided by
RA No. 6758, and while it was duly published in the Philippine Star, a newspaper of general circulation, on
September 15, 2012, the DBM-CSC Joint Circular remains unenforceable for the failure of respondents to file the
same with the UP Law Center – ONAR.
Soriano vs. Sec. of Finance, G.R. No. 184450. Jan. 24, 2017

ISSUE: Whether Sections 1 and 3 of RR 10-2208 are consistent with the law in declaring that “an MWE who
receives other benefits in excess of the statutory limit of P30,000 is no longer entitled to the exemption provided
by R.A. 9504” consistent with the law?

RULING: NO
Sections 1 and 3 of RR 10-2008 add a requirement not found in the law by effectively declaring that an
MWE who receives other benefits in excess of the statutory limit of P30,000 is no longer entitled to the
exemption provided by R.A. 9504.

 Nowhere in the above provisions of R.A. 9504 would one find the qualifications prescribed by the
assailed provisions of RR 10-2008. The provisions of the law are clear and precise; they leave no
room for interpretation - they do not provide or require any other qualification as to who are
MWEs.
 To be exempt, one must be an MWE, a term that is clearly defined. Section 22(HH) says he/she
must be one who is paid the statutory minimum wage if he/she works in the private sector, or
not more than the statutory minimum wage in the non-agricultural sector where he/she is
assigned, if he/she is a government employee. Thus, one is either an MWE or he/she is not.
Simply put, MWE is the status acquired upon passing the litmus test - whether one receives
wages not exceeding the prescribed minimum wage.
 The minimum wage exempted by R.A. 9504 is that which is referred to in the Labor Code. It is
distinct and different from other payments including allowances, honoraria, commissions,
allowances or benefits that an employer may pay or provide an employee.
 Likewise, the other compensation incomes an MWE receives that are also exempted by R.A. 9504
are all mandated by law and are based on this minimum wage. Additional compensation in the
form of overtime pay is mandated for work beyond the normal hours based on the employee's
regular wage.
 R.A. 9504 is explicit as to the coverage of the exemption: the wages that are not in excess of the
minimum wage as determined by the wage boards, including the corresponding holiday,
overtime, night differential and hazard pays.
 In other words, the law exempts from income taxation the most basic compensation an
employee receives - the amount afforded to the lowest paid employees by the mandate of law.
In a way, the legislature grants to these lowest paid employees additional income by no longer
demanding from them a contribution for the operations of government. This is the essence of
R.A. 9504 as a social legislation. The government, by way of the tax exemption, affords increased
purchasing power to this sector of the working class.
 The increased purchasing power is estimated at about P9,500 a year. RR 10-2008, however, takes
this away. In declaring that once an MWE receives other forms of taxable income like
commissions, honoraria, and fringe benefits in excess of the non-taxable statutory amount of
P30,000, RR 10-2008 declared that the MWE immediately becomes ineligible for tax exemption;
and otherwise non-taxable minimum wage, along with the other taxable incomes of the MWE,
becomes taxable again.

As to exemption from paying income tax

 The amendment is silent on whether compensation-related benefits exceeding the P30,000 threshold
would make an MWE lose exemption. R.A. 9504 has given definite criteria for what constitutes an MWE,
and R.R. 10-2008 cannot change this.

An administrative agency may not enlarge, alter or restrict a provision of law. It cannot add to the
 requirements provided by law. To do so constitutes lawmaking, which is generally reserved for
Congress.73 In CIR v. Fortune Tobacco,74 we applied the plain meaning rule when the Commissioner of
Internal Revenue ventured into unauthorized administrative lawmaking:

[A]n administrative agency issuing regulations may not enlarge, alter or restrict the provisions of
the law it administers, and it cannot engraft additional requirements not contemplated by the
legislature. The Court emphasized that tax administrators are not allowed to expand or contract
the legislative mandate and that the "plain meaning rule" or verba legis in statutory construction
should be applied such that where the words of a statute are clear, plain and free from ambiguity,
it must be given its literal meaning and applied without attempted interpretation.

As we have previously declared, rule-making power must be confined to details for regulating the
mode or proceedings in order to carry into effect the law as it has been enacted, and it cannot be
extended to amend or expand the statutory requirements or to embrace matters not covered by
the statute. Administrative regulations must always be in harmony with the provisions of the law
because any resulting discrepancy between the two will always be resolved in favor of the basic
law.75 (Emphases supplied.


 Given the foregoing, the treatment of bonuses and other benefits that an employee receives from
the employer in excess of the P30,000 ceiling cannot but be the same as the prevailing treatment
prior to R.A. 9504 - anything in excess of P30,000 is taxable; no more, no less.

The treatment of this excess cannot operate to disenfranchise the MWE from enjoying the
exemption explicitly granted by R.A. 9504.

Purisima vs. Phil. Tobacco Institute, G.R. No. 210251, Apr. 17, 2017

SHORT FACTS:
 RA 10351, otherwise known as the Sin Tax Reform Law, restructured the excise tax on alcohol and tobacco
products by amending pertinent provisions of Republic Act No. 8424
 Section 5 of RA 10351, which amended Section 145(C) of the NIRC, increased the excise tax rate of cigars
and cigarettes and allowed cigarettes packed by machine to be packed in other packaging combinations
of not more than 20.
 Upon recommendation of the Commissioner of Internal Revenue (CIR), the Secretary of Finance issued RR
17-2012.
 Section 11 of RR 17-2012 imposes an excise tax on individual cigarette pouches of 5’s and 10’s even if they
are bundled or packed in packaging combinations not exceeding 20 cigarettes.
 Pursuant to Section 11 of RR17-2012, the CIR issued RMC 90-2012 dated 27 December 2012.
 Annex “D-1” of RMC 90-2012 provides for the initial classifications in tabular form, effective January 1, 2013,
of locally manufactured cigarette brands packed by machine according to the tax rates prescribed under RA
10351 based on the:
(1) BIR price survey of these products, and
(2) Suggested net retail price declared in the latest sworn statement filed by the local manufacturer
or importer.

ISSUE: Is Section 11 of Revenue Regulation No. 17-2012 issued on authority of R.A. No. 10351, otherwise known as
the Sin Tax Reform Law of 2012?

RULING: No. By issuing Section 11 of RR 17-2012 and Annex “D-1” on Cigarettes Packed by Machine of RMC 90-
2012, the BIR went beyond the express provisions of R.A. No. 10351. It is an elementary rule in administrative law
that administrative rules and regulations enacted by administrative bodies to implement the law which they are
entrusted to enforce have the force of law and are entitled to great weight and respect. However, these
implementations of the law must not override, supplant, or modify the law, but must remain consistent with the law
they intend to implement. It is only Congress which has the power to repeal or amend the law. The courts will not
countenance an administrative regulation that overrides the statute it seeks to implement.

In this case, a reading of Section 11 of RR 17-2012 and Annex “D-1” on Cigarettes Packed by Machine of RMC 90-
2012 reveals that they are not simply regulations to implement RA 10351. They are amendatory provisions which
require cigarette manufacturers to be liable to pay for more tax than the law, RA 10351, allows. The BIR, in issuing
these revenue regulations, created an additional tax liability for packaging combinations smaller than 20 cigarette
sticks. In so doing, the BIR amended the law, an act beyond the power of the BIR to do.

CoTesCUP vs. Sec. of Education, G.R. No. 216930, etc., Oct. 09, 2018
FACTS:
 Petitioners question the validity of the enactment of the K to 12 Law claiming that:
o (1) sectors which would be directly affected by the K to 12 Basic Education Program were
deprived of their right, under Section 16, Article XIII of the 1987 Constitution, to be consulted or
participate in matters which involved their interest prior to the passage of the law;
o (2) the enrolled bill which the President signed into law varies significantly from the reconciled
version of the bill as approved by Congress and reported in the Senate Journal on January 30,
2013, and that the Court, pursuant to its ruling in Astorga v. Villegas, (Astorga) should look into
the entries in the Journal to determine whether the K to 12 Law was duly enacted; and
o (3) the K to 12 Law was incomplete because it failed to provide sufficient standards by which the
DepEd, CHED and TESDA, might be guided in addressing the possible impact of the
implementation of the K to 12 Law on labor; thus, Section 31 of the K to 12 IRR and the Joint
Guidelines, which spring forth from such undue delegation of legislative power, are invalid and
unconstitutional.

 For its part, the OSG contends that the K to 12 Law was enacted in accordance with the procedure
prescribed in the Constitution and that contrary to petitioners' assertion, the text of the enrolled bill
which was eventually signed into law is not different from the consolidated bill drafted by the Bicameral
Conference Committee and approved by the Senate and House of Representatives.
 Further, the OSG argues that there is no undue delegation of legislative power because the K to 12
Law provides a sufficient standard on the impact on labor due to its implementation.
 Private respondent Miriam College shares the same view that the K to 12 Law sufficiently provided
standards to guide the relevant administrative agencies and the private educational institutions in the
implementation of the K to 12 Law and address all issues on labor.

ISSUE: Is there undue delegation of legislative power in the enactment of the K to 12 Law?
RULING:
 There is no undue delegation of legislative power in the enactment of the K to 12 Law.
 In determining whether or not a statute constitutes an undue delegation of legislative power, the Court
has adopted two tests: the completeness test and the sufficient standard test.
 Under the first test, the law must be complete in all its terms and conditions when it leaves the legislature
such that when it reaches the delegate, the only thing he will have to do is to enforce it.
 The policy to be executed, carried out or implemented by the delegate must be set forth therein.
 The sufficient standard test, on the other hand, mandates adequate guidelines or limitations in the law to
determine the boundaries of the delegate's authority and prevent the delegation from running riot.
 To be sufficient, the standard must specify the limits of the delegate's authority, announce the legislative
policy and identify the conditions under which it is to be implemented.
 The K to 12 Law adequately provides the legislative policy that it seeks to implement.
 Scattered throughout the K to 12 Law are the standards to guide the DepEd, CHED and TESDA in carrying
out the provisions of the law, from the development of the K to 12 BEC, to the hiring and training of
teaching personnel and to the formulation of appropriate strategies in order to address the changes
during the transition period.
 Clearly, under the two tests, the K to 12 Law, read and appreciated in its entirety, is complete in all
essential terms and conditions and contains sufficient parameters on the power delegated to the DepEd,
CHED and TESDA.