CIR vs. Lingayen Gulf Electric Power Co.

Facts:
The respondent tapayer! Lingayen Gulf Electric Power Co.! Inc.! operates an electric power plant serving the ad"oining
#unicipalities in the province of Pangasinan pursuant to the #unicipal franchise granted it under Resolution $os. %& and '(.
The )IR assessed against and de#anded fro# the private respondent a deficiency franchise taes and surcharges for the
years %*&+ to %*(& as prescri,ed in -ection '(* of the $IRC! instead of the lower rates as provided in the #unicipal
franchises. Co##issioner de#anded fro# the respondent another deficiency franchise ta and surcharges. Respondent.s
protest was denied. Private respondent then protested the said assess#ents ,ut was denied. Thus! the appeal to the
respondent CT/.
Pending the hearing of the said cases! R./. $o. 01&0 was passed granting to the private respondent a legislative franchise
for the operation of the electric light! heat! and power syste# in the sa#e #unicipalities of Pangasinan.
The respondent court ruled that the provisions of R./. $o. 01&0 should apply and accordingly dis#issed the clai# of the CIR.
The said ruling is now the su,"ect of the petition at ,ar.
Issue: 2hether or not -ection & of R./. $o. 01&0 is unconstitutional for ,eing violative of the 3unifor#ity and e4uality of
taation3 clause of the Constitution.
5eld: $o
/ ta is unifor# when it operates with the sa#e force and effect in every place where the su,"ect of it is found. 6nifor#ity
#eans that all property ,elonging to the sa#e class shall ,e taed ali7e The Legislature has the inherent power not only to
select the su,"ects of taation ,ut to grant ee#ptions. Ta ee#ptions have never ,een dee#ed violative of the e4ual
protection clause. It is true that the private respondents #unicipal franchises were o,tained under /ct $o. ++8 of the
Philippine Co##ission! ,ut these original franchises have ,een replaced ,y a new legislative franchise! i.e. R./. $o. 01&0.
The ,enefits of the ta reduction provided ,y law 9/ct $o. 0+0+ as a#ended ,y C./. $o. %0' and R./. $o. 01&0: apply to the
respondent.s power plant and others circu#scri,ed within this class. R./;$o. 01&0 #erely transferred the petitioner.s power
plant fro# that class provided for in /ct $o. ++8! as a#ended! to which it ,elonged until the approval of R./; $o. 01&0! and
placed it within the class falling under /ct $o. 0+0+! as a#ended. Thus! it only effected the transfer of a taa,le property fro#
one class to another.
2e do not have the authority to in4uire into the wisdo# of such act. Further#ore! the (< franchise ta rate provided in
-ection '(* of the Ta Code was never intended to have a universal application. & 2e note that the said -ection '(* of the
Ta Code epressly allows the pay#ent of taes at rates lower than (< when the charter granting the franchise of a grantee!
li7e the one granted to the private respondent under -ection & of R./. $o. 01&0! precludes the i#position of a higher ta.
R./. $o. 01&0 did not only fi and specify a franchise ta of '< on its gross receipts! ,ut #ade it 3in lieu of any and all taes!
all laws to the contrary notwithstanding!3 thus! leaving no roo# for dou,t regarding the legislative intent. 3
Pun=alan vs.>un. )oard of City of >anila
Facts:
This suit was co##enced ,y lawyers! a #edical practitioner! a pu,lic accountant! a dental surgeon and a phar#acist
wherein the o,"ect of the suit is the annul#ent of ?rdinance $o. 00*1 of the City of >anila together with the provision of the
>anila charter authori=ing it and the refund of taes collected under the ordinance ,ut paid under protest.
The ordinance in 4uestion! which was approved ,y the #unicipal ,oard of the City of >anila! i#poses a #unicipal occupation
ta on persons eercising various professions in the city and penali=es non;pay#ent of the ta 3,y a fine of not #ore than
two hundred pesos or ,y i#prison#ent of not #ore than si #onths! or ,y ,oth such fine and i#prison#ent in the discretion
of the court.3 /#ong the professions taed were those to which plaintiffs ,elong. The ordinance was enacted pursuant to
paragraph 9%: of section %1 of the Revised Charter of the City of >anila 9as a#ended ,y Repu,lic /ct $o. &@*:! which
e#powers the >unicipal )oard of said city to i#pose a #unicipal occupation ta! not to eceed P(@ per annum! on persons
engaged in the various professions a,ove referred to.
5aving already paid their occupation ta!and upon ,eing re4uired to pay the additional ta prescri,ed in the ordinance! paid
the sa#e under protest and then ,rought the present suit for such" purpose. The lower court upheld the validity of the
provision of law authori=ing the enact#ent of the ordinance ,ut declared the ordinance itself illegal and void on the ground
that the penalty there in provided for non;pay#ent of the ta was not legally authori=ed. 5ence this appeal.
Issue: 2hether the lower court.s ruling is correct or not! for though the decision is silent on the refund of taes paid plaintiffs
#a7e no assign#ent of error on this point.
5eld: $o
/s to plaintiffs. appeal! the contention in su,stance is that this ordinance and the law authori=ing it constitute class legislation!
are un"ust and oppressive! and authori=e what a#ounts to dou,le taation.
In raising the hue and cry of 3class legislation3! the ,urden of plaintiffs. co#plaint is not that the professions to which they
respectively ,elong have ,een singled out for the i#position of this #unicipal occupation taA and in any event! the
Legislature #ay! in its discretion! select what occupations shall ,e taed! and in the eercise of that discretion it #ay ta all!
or it #ay select for taation certain classes and leave the others untaed.
2e do not thin7 it is for the courts to "udge what particular cities or #unicipalities should ,e e#powered to i#pose occupation
taes in addition to those i#posed ,y the $ational Govern#ent. That #atter is peculiarly within the do#ain of the political
depart#ents and the courts would do well not to encroach upon it.
Plaintiffs ,rand the ordinance un"ust and oppressive ,ecause they say that it creates discri#ination within a class in that
while professionals with offices in >anila have to pay the ta! outsiders who have no offices in the city ,ut practice their
profession therein are not su,"ect to the ta. Plaintiffs #a7e a distinction that is not found in the ordinance. The ordinance
i#poses the ta upon every person 3eercising3 or 3pursuing3 B in the City of >anila naturally B any one of the occupations
na#ed! ,ut does not say that such person #ust have his office in >anila. 2hat constitutes eercise or pursuit of a profession
in the city is a #atter of "udicial deter#ination. The argu#ent against dou,le taation #ay not ,e invo7ed where one ta is
i#posed ,y the state and the other is i#posed ,y the city 9% Cooley on Taation! &th ed.! p. &*':! it ,eing widely recogni=ed
that there is nothing inherently o,noious in the re4uire#ent that license fees or taes ,e eacted with respect to the sa#e
occupation! calling or activity ,y ,oth the state and the political su,divisions thereof.
The "udg#ent appealed fro# is reversed in so far as it declares ?rdinance $o. 00*1 of the City of >anila illegal and void and
affir#ed in so far as it holds the validity of the provision of the >anila charter authori=ing it.