Sison vs.

Ancheta
GR L-59431, 25 July 1984 En Banc,
Fernando (J): 9 concur, 2 concur in result, 1
concur in separate opinion, 1 took no part
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. Absent
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
necessaryh 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.
Pascual vs. Secretary of Public Works and
Communications
GR L-10405, 29 December 1960 En Banc,
Concepcion (J): 10 concur
Facts: RA 920 (Act appropriating funds for
public works) was enacted in 1953 containing an
item (Section 1 c[a]) for the construction,
reconstruction,
repair,
extension
and
improvement of Pasig feeder road terminals (the
projected and planned subdivision roads, which
were not yet constructed, within Antonio
Subdivision owned by Senator Jose C. Zulueta).
Zulueta donated said parcels of land to the
Government 5 months after the enactment of
RA 920, on the condition that if the Government

violates such condition the lands would revert to

Zulueta. The provincial governor of Rizal,
Wenceslao Pascual, questioned the validity of
the donation and the Constitutionality of the
item in RA 920, it being not for a public purpose.
Issue: Whether the item in the appropriation is
valid.
Held: The right of the legislature to appropriate
funds is correlative with its right to tax, under
constitutional provisions against taxation except
for public purposes and prohibiting the
collection of a tax for one purpose and the
devotion thereof to another purpose, no
appropriation of state funds can be made for
other than a public purpose. The validity of a
statute depends upon the powers of Congress at
the time of its passage or approval, not upon
events
occupying,
or
acts
performed,
subsequently thereto, unless the latter consist
of an amendment of the organic law, removing,
with retrospective operation, the constitutional
limitation infringed by said statute. Herein,
inasmuch as the land on which the projected
feeder roads were to be constructed belonged to
Senator Zulueta at the time RA 920 was passed
by Congress, or approved by the President, and
the disbursement of said sum became effective
on 20 June 1953 pursuant to Section 13 of the
Act, the result is that the appropriating sough a
private purpose and hence, null and void.
Punsalan vs. Manila
GR L-4817, 26 May 1954 En Banc, Reyes (J): 7
concur
Facts: Ordinance 3398 was enacted pursuant to
paragraph 1 of Section 18 ofthe Revised Charter
of the City of Manila, imposing a municipal
occupation tax on persons exercising various
professions in the city. Various professionals
filed suit to annul the ordinance and the
provision of law authorizing the enactment of
the ordinance, and to call for the refund
collected taxes under the ordinance.
Issue: Whether the Ordinance violates the equal
protection clause.
Held: The legislature may, in its discretion,
select what occupation shall be taxed, and in
the exercise of that discretion it may tax all, or it
may select for taxation certain classes and
leave the other untaxed. Manila, as the seat of
the National Government and with a population
and volume of trade many times that of any
other Philippine city or municipality, offers a
more lucrative field for the practice of the
professions, so that it is but fair that the
professionals in Manila be made to pay a higher
occupation tax than their brethen in the
provinces. The ordinance imposes the tax upon
every person exercising or pursuing any of
the occupation named in the ordinance, and
does not make any distinction between

professional having offices in Manila and

outsiders who practice their profession therein.
What constitutes exercise or pursuit of a
profession in the city is a matter of judicial
determination. The Ordinance does not violate
the equal protection clause.
Lladoc vs. Commissioner
GR L-19201, 16 June 1965 En Banc, Paredes (J):
9 concur, 1 took no part
Facts: In 1957, the MB Estate Inc. of Bacolod
City donated P10,000 in cash to the parish
priest of Victorias, Negros Occidental; the
amount spent for the construction of a new
Catholic Church in the locality,m as intended.
In1958, MB Estate filed the donors gift tax
return. In 1960, the Commissioner issued an
assessment for donees gift tax against the
parish. The priest lodged a protest to the
assessment and requested the withdrawal
thereof.
Issue: Whether the Catholic Parish is tax
exempt.
Held: The phrase exempt from taxation should
not be interpreted to mean exemption from all
kinds of taxes. The exemption is only from the
payment of taxes assessed on such properties
as property taxes as contradistinguished from
excise taxes. A donees gift tax is not a property
tax but an excise tax imposed on the transfer of
property by way of gift inter vivos. It does not
rest upon general ownership, but an excise upon
the use made of the properties, upon the
exercise of the privilege of receiving the
properties. The imposition of such excise tax on
property used for religious purpose do not

constitute an impairment of the Constitution.

The tax exemption of the parish, thus, does not
extend to excise taxes.
Abra Valley College vs. Aquino
GR L-39086, 15 June 1988 Second Division,
Paras (J): 4 concur
Facts: Abra Valley College rents out the ground
floor of its college building to Northern
Marketing Corporation while the second floor
thereof is used by the Director of the College for
residential purposes. The municipal and
provincial treasurers served upon the College a
notice of seizure and later a notice of sale
due to the alleged failure of the College to pay
real estate taxes and penalties thereon. The
school filed suit to annul said notices, claiming
that it is tax-exempt.
Issue: Whether the College is exempt from
taxes.
Held: While the Court allows a more liberal and
non-restrictive interpretation of the phrase
exclusively
exercised
for
educational
purposes, reasonable emphasis has always
been made that exemption extends to facilities
which are incidental to and reasonably
necessary for the accomplishment of the main
purposes. While the second floors use, as
residence of the director, is incidental to
education; the lease of the first floor cannot by
any stretch of imagination be considered
incidental to the purposes of education. The test
of exemption from taxation is the use of the
property for purposes mentioned in the
Constitution.