COCONUTOILREFINERSASSOCIATION,INC.vs.

HON.RUBENTORRES
Facts:
ThisisaPetitiontoenjoinandprohibitthepublicrespondentRubenTorresinhiscapacityasExecutive
Secretaryfromallowingotherprivaterespondentstocontinuewiththeoperationoftaxanddutyfreeshops
locatedattheSubicSpecialEconomicZone(SSEZ)andtheClarkSpecialEconomicZone(CSEZ).The
petitionerseekstodeclareRepublicActNo.7227asunconstitutionalonthegroundthatitallowedonly
taxfree(anddutyfree)importationofrawmaterials,capitalandequipment.Itreads:
TheSubicSpecialEconomicZoneshallbeoperatedandmanagedasaseparatecustomsterritoryensuring
freeflowormovementofgoodsandcapitalwithin,intoandexportedoutoftheSubicSpecialEconomic
Zone,aswellasprovideincentivessuchastaxanddutyfreeimportationsofrawmaterials,capitaland
equipment.However,exportationorremovalofgoodsfromtheterritoryoftheSubicSpecialEconomic
ZonetotheotherpartsofthePhilippineterritoryshallbesubjecttocustomsdutiesandtaxesunderthe
CustomsandTariffCodeandotherrelevanttaxlawsofthePhilippines[RA7227,Sec12(b)].
PetitionerscontendthatthewordingofRepublicActNo.7227clearlylimitsthegrantoftaxincentivesto
theimportationofrawmaterials,capitalandequipmentonlytherebyviolatingtheequalprotectionclause
oftheConstitution.
HealsoassailedtheconstitutionalityofExecutiveOrderNo.97Aforbeingviolativeoftheirrighttoequal
protection.TheyassertedthatprivaterespondentsoperatinginsidetheSSEZarenotdifferentfromthe
retailestablishmentslocatedoutside.
Therespondentmovestodismissthepetitiononthegroundoflackoflegalstandingandunreasonable
delayinfilingofthepetition.
Issues:
(1)StatutoryConstruction;PoliticalLaw;TaxationLaw:
Whetherornotthereisaviolationofequalprotectionclause.
(2)PoliticalLaw:
Whetherornotthecasecanbedismissduetolackofthepetitionerslegalstanding.
(3)RemedialLaw:
Whetherornotthecasecanbedismissedduetounreasonabledelayinfilingofthepetition.
Held:
(1)TheSCruledinthenegative.Thephrasetaxanddutyfreeimportationsofrawmaterials,capitaland
equipmentwasmerelycitedasanexampleofincentivesthatmaybegiventoentitiesoperatingwithinthe
zone.PublicrespondentSBMAcorrectlyarguedthatthemaximexpressiouniusestexclusioalterius,on
whichpetitionersimpliedlyrelytosupporttheirrestrictiveinterpretation,doesnotapplywhenwordsare
mentionedbywayofexample.
ThepetitionwithrespecttodeclarationofunconstitutionalityofExecutiveOrderNo.97Acannotbe,
likewise,sustained.Theguarantyoftheequalprotectionofthelawsisnotviolatedbyalegislationbased
whichwasbasedonreasonableclassification.Aclassification,tobevalid,must(1)restonsubstantial
distinction,(2)begermanetothepurposeofthelaw,(3)notbelimitedtoexistingconditionsonly,and(4)
applyequallytoallmembersofthesameclass.Applyingtheforegoingtesttothepresentcase,thisCourt
findsnoviolationoftherighttoequalprotectionofthelaws.Thereisasubstantialdistinctionslying
betweentheestablishmentsinsideandoutsidethezone.Therearesubstantialdifferencesinasensethat,
investorswillbeluredtoestablishandoperatetheirindustriesinthesocalledsecuredareaandthepresent
businessoperatorsoutsidethearea.Thereis,then,hardlyanyreasonablebasistoextendtothemthe
benefitsandincentivesaccordedinR.A.7227.

(2)No.Anenttheclaimonlackoflegalstanding,respondentsarguethatpetitioners,beingmeresuppliers
ofthelocalretailersoperatingoutsidethespecialeconomiczones,donotstandtosufferdirectinjuryinthe
enforcementoftheissuancesbeingassailedherein.Assumingthisistrue,thisCourthasneverthelessheld
thatincasesofparamountimportancewhereseriousconstitutionalquestionsareinvolved,thestanding
requirementsmayberelaxedandasuitmaybeallowedtoprosperevenwherethereisnodirectinjuryto
thepartyclaimingtherightofjudicialreview.
(3)No.Withrespecttotheotherallegedproceduralflaws,evenassumingtheexistenceofsuchdefects,this
Court,intheexerciseofitsdiscretion,brushesasidethesetechnicalitiesandtakescognizanceofthe
petitionconsideringtheimportancetothepublicofthepresentcaseandinkeepingwiththedutyto
determinewhethertheotherbranchesofthegovernmenthavekeptthemselveswithinthelimitsofthe
Constitution