Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 109902 August 2, 1994
ALU-TUCP, Representing Members: ALAN BARINQUE, with 13
others, namely: ENGR. ALAN G. BARINQUE, ENGR. DARRELL
LEE ELTAGONDE, EDUARD H. FOOKSON, JR., ROMEO R.
SARONA, RUSSELL GACUS, JERRY BONTILAO, EUSEBIO
MARIN, JR., LEONIDO ECHAVEZ, BONIFACIO MEJOS, EDGAR S.
BONTUYAN, JOSE G. GARGUENA, JR., OSIAS B. DANDASAN,
and GERRY I. FETALVERO, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and NATIONAL
STEEL CORPORATION (NSC), respondents.
Leonard U. Sawal for petitioners.
Saturnino Mejorada for private respondent.
FELICIANO, J.:
In this Petition for Certiorari, petitioners assail the Resolution of the
National Labor Relations Commission ("NLRC") dated 8 January 1993
which declared petitioners to be project employees of private
respondent National Steel Corporation ("NSC"), and the NLRC's
subsequent Resolution of 15 February 1993, denying petitioners'
motion for reconsideration.
Petitioners plead that they had been employed by respondent NSC in
connection with its Five Year Expansion Program (FAYEP I & II) 1 for
varying lengths of time when they were separated from NSC's service:
Employee Date Nature of Separated
Employed Employment
1. Alan Barinque 5-14-82 Engineer 1 8-31-91
2. Jerry Bontilao 8-05-85 Engineer 2 6-30-92
3. Edgar Bontuyan 11-03-82 Chairman to present
4. Osias Dandasan 9-21-82 Utilityman 1991
5. Leonido Echavez 6-16-82 Eng. Assistant 6-3092
6. Darrell Eltagonde 5-20-85 Engineer 1 8-31-91
7. Gerry Fetalvero 4-08-85 Mat. Expediter
regularized
8. Eduard Fookson 9-20-84 Eng. Assistant 8-3191
9. Russell Gacus 1-30-85 Engineer 1 6-30-92
10. Jose Garguena 3-02-81 Warehouseman to
present
11. Eusebio Mejos 11-17-82 Survey Aide 8-31-91
12. Bonifacio Mejos 11-17-82 Surv. Party Head
1992
13. Romeo Sarona 2-26-83 Machine Operator 831-91 2
On 5 July 1990, petitioners filed separate complaints for unfair labor
practice, regularization and monetary benefits with the NLRC, SubRegional Arbitration Branch XII, Iligan City.
The complaints were consolidated and after hearing, the Labor Arbiter
in a Decision dated 7 June 1991, declared petitioners "regular project
employees who shall continue their employment as such for as long as
such [project] activity exists," but entitled to the salary of a regular
employee pursuant to the provisions in the collective bargaining
agreement. It also ordered payment of salary differentials. 3
Both parties appealed to the NLRC from that decision. Petitioners
argued that they were regular, not project, employees. Private
respondent, on the other hand, claimed that petitioners are project
employees as they were employed to undertake a specific project
NSC's Five Year Expansion Program (FAYEP I & II).

The NLRC in its questioned resolutions modified the Labor Arbiter's

decision. It affirmed the Labor Arbiter's holding that petitioners
were project employees since they were hired to perform work in a
specific undertaking the Five Years Expansion Program, the
completion of which had been determined at the time of their
engagement and which operation was not directly related to the
business of steel manufacturing. The NLRC, however, set aside the
award
to
petitioners
of
the
same
benefits
enjoyed
by regular employees for lack of legal and factual basis.
Deliberating on the present Petition for Certiorari, the Court considers
that petitioners have failed to show any grave abuse of discretion or
any act without or in excess of jurisdiction on the part of the NLRC in
rendering its questioned resolutions of 8 January 1993 and 15
February 1993.
The law on the matter is Article 280 of the Labor Code which reads in
full:
Art. 280. Regular and Casual Employment The
provisions of the written agreement to the contrary
notwithstanding and regardless of the oral
agreement of the parties, and employment shall
be deemed to be regular where the employee has
been engaged to perform activities which are
usually necessary or desirable in the usual
business or trade of the employer, except where
the employment has been fixed for a specific
project or
undertaking
the completion
or
termination of which has been determined at the
time of the engagement of the employee or where
the work or services to be performed is seasonal
in nature and the employment is for the duration of
the season.
An employment shall be deemed to be casual if it
is not covered by the preceding paragraph:
Provided, That, any employee who has rendered
at least one year service, whether such service is
continuous or broken, shall be considered a
regular employee with respect to the activity in
which he is employed and his employment shall
continue while such actually exists. (Emphasis
supplied)
Petitioners argue that they are "regular" employees of NSC because:
(i) their jobs are "necessary, desirable and work-related to private
respondent's main business, steel-making"; and (ii) they have rendered
service for six (6) or more years to private respondent NSC. 4
The basic issue is thus whether or not petitioners are properly
characterized as "project employees" rather than "regular employees"
of NSC. This issue relates, of course, to an important consequence:
the services of project employees are co-terminous with the project
and may be terminated upon the end or completion of the project for
which they were hired. 5 Regular employees, in contract, are legally
entitled to remain in the service of their employer until that service is
terminated by one or another of the recognized modes of termination
of service under the Labor Code. 6
It is evidently important to become clear about the meaning and scope
of the term "project" in the present context. The "project" for the
carrying out of which "project employees" are hired would ordinarily
have some relationship to the usual business of the employer.
Exceptionally, the "project" undertaking might not have an ordinary or
normal relationship to the usual business of the employer. In this latter
case, the determination of the scope and parameeters of the "project"
becomes fairly easy. It is unusual (but still conceivable) for a company
to undertake a project which has absolutely no relationship to the usual
business of the company; thus, for instance, it would be an unusual
steel-making company which would undertake the breeding and
production of fish or the cultivation of vegetables. From the viewpoint,
however, of the legal characterization problem here presented to the
Court, there should be no difficulty in designating the employees who
are retained or hired for the purpose of undertaking fish culture or the
production of vegetables as "project employees," as distinguished from
ordinary or "regular employees," so long as the duration and scope of
the project were determined or specified at the time of engagement of
the "project employees." 7 For, as is evident from the provisions of

Article 280 of the Labor Code, quoted earlier, the principal test for
determining whether particular employees are properly characterized
as "project employees" as distinguished from "regular employees," is
whether or not the "project employees" were assigned to carry out a
"specific project or undertaking," the duration (and scope) of which
were specified at the time the employees were engaged for that
project.

We, therefore, agree with the basic finding of the NLRC (and the Labor
Arbiter) that the petitioners were indeed "project employees:"
It is well established by the facts and evidence on
record that herein 13 complainants were hired and
engaged for specific activities or undertaking the
period of which has been determined at time of
hiring or engagement. It is of public knowledge
and which this Commission can safely take judicial
notice that the expansion program (FAYEP) of
respondent NSC consist of various phases [of]
project components which are being executed or
implemented independently or simultaneously
from each other . . .

In the realm of business and industry, we note that "project" could refer
to one or the other of at least two (2) distinguishable types of activities.
Firstly, a project could refer to a particular job or undertaking that is
within the regular or usual business of the employer company, but
which is distinct and separate, and identifiable as such, from the other
undertakings of the company. Such job or undertaking begins and
ends at determined or determinable times. The typical example of this
first type of project is a particular construction job or project of a
construction company. A construction company ordinarily carries out
two or more discrete identifiable construction projects: e.g., a twentyfive- storey hotel in Makati; a residential condominium building in
Baguio City; and a domestic air terminal in Iloilo City. Employees who
are hired for the carrying out of one of these separate projects, the
scope and duration of which has been determined and made known to
the employees at the time of employment, are properly treated as
"project employees," and their services may be lawfully terminated at
completion of the project.

In other words, the employment of each "project

worker" is dependent and co-terminous with the
completion or termination of the specific activity or
undertaking [for which] he was hired which has
been pre-determined at the time of engagement.
Since, there is no showing that they (13
complainants) were engaged to perform workrelated activities to the business of respondent
which is steel-making, there is no logical and legal
sense of applying to them the proviso under the
second paragraph of Article 280 of the Labor
Code, as amended.

The term "project" could also refer to, secondly, a particular job or
undertaking that is not within the regular business of the corporation.
Such a job or undertaking must also be identifiably separate and
distinct from the ordinary or regular business operations of the
employer. The job or undertaking also begins and ends at determined
or determinable times. The case at bar presents what appears to our
mind as a typical example of this kind of "project."
NSC undertook the ambitious Five Year Expansion Program I and II
with the ultimate end in view of expanding the volume and increasing
the kinds of products that it may offer for sale to the public. The Five
Year Expansion Program had a number of component projects: e.g.,
(a) the setting up of a "Cold Rolling Mill Expansion Project"; (b) the
establishment of a "Billet Steel-Making Plant" (BSP); (c) the acquisition
and installation of a "Five Stand TDM"; and (d) the "Cold Mill
Peripherals Project." 8 Instead of contracting out to an outside or
independent contractor the tasks of constructing the buildings with
related civil and electrical works that would house the new machinery
and equipment, the installation of the newly acquired mill or plant
machinery and equipment and thecommissioning of such machinery
and equipment, NSC opted to execute and carry out its Five Yeear
Expansion Projects "in house," as it were, by administration. The
carrying out of the Five Year Expansion Program (or more precisely,
each of its component projects) constitutes a distinct undertaking
identifiable from the ordinary business and activity of NSC. Each
component project, of course, begins and ends at specified times,
which had already been determined by the time petitioners were
engaged. We also note that NSC did the work here involved the
construction of buildings and civil and electrical works, installation of
machinery and equipment and the commissioning of such machinery
only for itself. Private respondent NSC was not in the business of
constructing buildings and installing plant machinery for the general
business community, i.e., for unrelated, third party, corporations. NSC
did not hold itself out to the public as a construction company or as an
engineering corporation.
Which ever type of project employment is found in a particular case, a
common basic requisite is that the designation of named employees as
"project employees" and their assignment to a specific project, are
effected and implemented in good faith, and not merely as a means of
evading otherwise applicable requirements of labor laws.
Thus, the particular component projects embraced in the Five Year
Expansion Program, to which petitioners were assigned, were
distinguishable from the regular or ordinary business of NSC which, of
course, is the production or making and marketing of steel products.
During the time petitioners rendered services to NSC, their work was
limited to one or another of the specific component projects which
made up the FAYEP I and II. There is nothing in the record to show
that petitioners were hired for, or in fact assigned to, other purposes,
e.g., for operating or maintaining the old, or previously installed and
commissioned, steel-making machinery and equipment, or for selling
the finished steel products.

xxx xxx xxx

The present case therefore strictly falls under the
definition of "project employees" on paragraph one
of Article 280 of the Labor Code, as amended.
Moreover, it has been held that the length of
service of a project employee is not the controlling
test of employment tenure but whether or not "the
employment has been fixed for a specific project
or undertaking the completion or termination of
which has been determined at the time of the
engagement of the employee". (See Hilario Rada
v. NLRC, G.R. No. 96078, January 9, 1992; and
Sandoval Shipping, Inc. v. NLRC, 136 SCRA 674
(1985). 9
Petitioners next claim that their service to NSC of more than six (6)
years should qualify them as regular employees. We believe this claim
is without legal basis. The simple fact that the employment of
petitioners as project employees had gone beyond one (1) year, does
not detract from, or legally dissolve, their status as project
employees. 10 The second paragraph of Article 280 of the Labor Code,
quoted above, providing that an employee who has served for at least
one (1) year, shall be considered a regular employee, relates to casual
employees, not to project employees.
In the case of Mercado, Sr. vs. National Labor Relations
Commission, 11 this Court ruled that the proviso in the second
paragraph of Article 280 relates only to casual employees and is not
applicable to those who fall within the definition of said Article's first
paragraph, i.e., project employees. The familiar grammatical rule is
that a proviso is to be construed with reference to the immediately
preceding part of the provision to which it is attached, and not to other
sections thereof, unless the clear legislative intent is to restrict or
qualify not only the phrase immediately preceding the proviso but also
earlier provisions of the statute or even the statute itself as a whole. No
such intent is observable in Article 280 of the Labor Code, which has
been quoted earlier.
ACCORDINGLY, in view of the foregoing, the Petition for Certiorari is
hereby DISMISSED for lack of merit. The Resolutions of the NLRC
dated 8 January 1993 and 15 February 1993 are hereby AFFIRMED.
No pronouncement as to costs.
SO ORDERED.
Narvasa, C.J., Cruz, Padilla, Bidin, Regalado, Davide, Jr.,
Romero, Melo, Quiason, Puno, Vitug, Kapunan and
Mendoza, JJ., concur.

Bellosillo, J., is on leave.

including poles, wires, transformers, and insulators), machinery and

personal property as other persons are or may be hereafter required
by law to pay. In consideration of Part Two of the franchise herein
granted, to wit, the right to build and maintain in the City of Manila and
its suburbs a plant for the conveying and furnishing of electric current
for light, heat, and power, and to charge for the same, the grantee shall
pay to the City of Manila two and one-half per centum of the gross
earnings received from the business under this franchise in the city
and its suburbs: ... and shall be in lieu of all taxes and assessments of
whatsoever nature, and by whatsoever authority upon the privileges,
earnings, income, franchise, and poles, wires, transformers, and
insulators of the grantee, from which taxes and assessments the
grantee is hereby expressly exempted." 5 It noted that the above
"exempts it from all taxes of whatever nature, and by whatever
authority, with respect to its insulators in consideration for the payment
of the percentage tax on its gross earnings." 6
The question then, according to such decision of respondent Court is:
"Does the insulating oil in question come within the meaning of the
term 'insulator '?" 7 Then it went on: "insulating oils are mineral oils of
high di-electrics strength and high flash point employed in circuit
breakers, switches, transformers and other electric apparatus. An oil
with a flash point of 285 F and fire point of 310 F is considered safe.
A clean, well- refined oil will have a minimum dielectric of 22,00 volts,
but the presence of a slow as 0.01% water will reduce the di-electric
strength drastically. The insulating oils, therefore, cannot be stored for
long periods because of the danger of absorbing moisture. Impurities
such as acids or alkalies also detract from the strength of the oil. Since
insulating oils are used for cooling as well as for insulating, the
viscosity should be low enough for free circulation, and they should not
gum. (Materials Handbook by George J. Brady, 8th Edition 1956, pp.
421-423.) ... ." 8

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-23623 June 30, 1977
ACTING COMMISSIONER OF CUSTOMS, petitioner,
vs.
MANILA ELECTRIC COMPANY and COURT OF TAX
APPEALS, respondents.
Solicitor General Arturo A. Alafriz Assistant Solicitor General Felicisimo
R. Rosete and Solicitor Alejandro B. Afurong for petitioner.
Ross, Selph Salcedo, Del Rosario Bito & Misa for private respondent.
FERNANDO, J.:
The reversal by respondent Court of Tax Appeals of a determination by
the then Acting Commissioner of Customs, the late Norberto
Romualdez, Jr., that private respondent Manila Electric Company was
not exempt from the payment of the special import tax under Republic
Act No. 1394 1 for shipment to it of insulating oil, respondent Court
entertaining the contrary view 2 led to this petition for review. The
contention pressed in support of the petition is that as a tax exemption
is to be construed strictly, the decision of the respondent Court, which
assumed that insulating oil can be considered as insulators must be
reversed and set aside. The appealed decision of respondent Court in
the light of applicable authorities supplies the best refutation of such
contention. It must be sustained.
The appealed decision 3 set forth that petitioner Manila Electric Co.,
nor private respondent, in appealing from a determination by the then
Acting Commissioner of Customs, now petitioner, "claims that it is
exempt from the special import tax not only by virtue of Section 6 of
Republic Act No. 1394, which exempts from said tax equipment and
spare parts for use in industries, but also under Paragraph 9, Part Two,
of its franchise, which expressly exempts is insulators from all taxes of
whatever kind and nature. 4 It then made reference to the franchise of
private respondent Manila Electric Co.: "Par. 9. The grantee shall be
liable to pay the same taxes upon its real estate, buildings, plant (not

The last portion of the appealed decision explained why the

determination of the Acting Commissioner of Customs must be
reversed: "There is no question that insulating oils of the type imported
by petitioner are 'used for cooling as well as for insulating,' and when
used in oil circuit breakers, they are 'required to maintain insulation
between the contacts inside the tank and the tank itself.' ... The
decision appealed from not being in accordance with law, the same is
hereby reversed. Respondent is ordered to refund to petitioner the sum
of P995.00 within thirty days from the date this decision becomes final,
without pronouncement as to costs." 9 It was therein made clear that
private respondent was not liable for the payment of the special import
tax under Republic Act No. 1394.
As noted at the outset, the decision speaks for itself. It cannot be
stigmatized as suffering from any flaw that would call for its reversal.

1. It is to be admitted, as contended by petitioner, that this Court is

committed to the principle that an exemption from taxation must be
justified by words too clear to be misread. As set forth in
Commissioner of Internal Revenue v. Guerrero: 10 "From 1906,
in Catholic Church v. Hastings to 1966, in Esso Standard Eastern, Inc.
v. Acting Commissioner of Customs, it has been the constant and
uniform holding that exemption from taxation is not favored and is
never presumed, so that if granted it must be strictly construed against
the taxpayer. Affirmatively put, the law frowns on exemption from
taxation,
hence,
an
exempting
provision
should
be
construed strictissimi juris." 11 Such a ruling was reaffirmed in
subsequent decisions. 12 It does not mean, however, that petitioner
should prevail, for as was unequivocally set forth in the leading ease
of Republic Flour Mills v. Commissioner of Internal Revenue, 13 this
Court speaking through Justice J.B.L. Reyes. "It is true that in the
construction of tax statutes tax exemptions (and deductions are of this
nature) are not favored in the law, and are construedstrictissimi
juris against the taxpayer. However, it is equally a recognized principle
that where the provision of the law is clear and unambiguous, so that
there is no occasion for the court's seeking the legislative intent, the
law must be taken as it is, devoid of judicial addition or subtraction. In
this ease, we find the provision of Section 186-A -whenever a tax free
product is utilized, ... all encompassing to comprehend tax-free raw
materials, even if imported. Where the law provided no qualification for
the granting of the privilege, the court is not at liberty to supply
any. 14 That is what was done by respondent Court of Tax Appeals. It
showed fealty to this equally well. settled doctrine. It construed the
statutory provision as it is written. It is precluded, in the language of
;the Republic Flour Mills opinion, considering that the law is clear and
ambiguous, to look further for any legislative intent, as "the law must
be taken as it is, devoid of judicial addition or subtraction." 15 If there is
an extended discussion of this point, it is due solely to the emphasis
placed on the matter by petitioner.
2. Moreover, the decision of respondent Court under review finds
support in Balbas v. Domingo. 16 Thus: "No other conclusion is possible
in view of the well-settled principle that this Court is bound by the
finding of facts of the Court of Tax Appeals, only questions of law being
open to it for determination. As stated in another decision, 'only errors
of law, and not rulings on the weight of evidence, are reviewable by
this Court.' The facts then as above ascertained cannot be disturbed.
In our latest decision, there is a categorical assertion that where the
question is one of fact, it is no longer reviewable. 17 Such a doctrine is
not of limited application. It is a recognition of the wide discretion
enjoyed by the Court of Tax Appeals in construing tax statutes. So it
was categorically held in Alhambra Cigar and Cigarette Manufacturing
Co. v. Commissioner of Internal Revenue: 18 "Nor as a matter of
principle is it advisable for this Court to set aside the conclusion
reached by an agency such as the Court of Tax Appeals which is, by
the very nature of its function, dedicated exclusively to the study and
consideration of tax problems and has necessarily developed an
expertice on the subject, unless, as did not happen here, there has
been an abuse or improvident exercise of its authority. 19 That same
approach was reflected in Reyes v. Commissioner of Internal
Revenue, 20 Chu Hoi Horn v. Court of Tax Appeals, 21 Vi Ve Chemical
Products v. Commissioner of Customs, 22 and Nasiad v. Court of Tax
Appeals. 23 The Vi Ve decision has some relevance. There the stand of
the state that the Court of Tax Appeals could rightfully determine that
'"priopionic glycine" is the same as glutamic acid" 24 was considered as
well within the authority of respondent Court. It would be an affront to
the sense of fairness and of justice if in another case, respondent
Court, in the exercise of its discretionary authority, after determining
that insulating oil comes within the term insulator, is not be upheld.

EN BANC
[G.R. No. 123169. November 4, 1996]
DANILO E. PARAS, petitioner, vs. COMMISSION ON
ELECTIONS, respondent.
RESOLUTION
FRANCISCO, J.:
Petitioner Danilo E. Paras is the incumbent Punong Barangay
of Pula, Cabanatuan City who won during the last regular barangay
election in 1994. A petition for his recall as Punong Barangay was filed
by the registered voters of the barangay. Acting on the petition for
recall, public respondent Commission on Elections (COMELEC)
resolved to approve the petition, scheduled the petition signing
on October 14, 1995, and set the recall election on November 13,
1995. At least 29.30% of the registered voters signed the petition, well
above the 25% requirement provided by law. The COMELEC,
however, deferred the recall election in view of petitioners
opposition. On December 6, 1995, the COMELEC set anew the recall
election, this time on December 16, 1995. To prevent the holding of
the
recall
election,
petitioner
filed
before
the RegionalTrial Court of Cabanatuan City a petition for injunction,
docketed as SP Civil Action No. 2254-AF, with the trial court issuing a
temporary restraining order. After conducting a summary hearing, the
trial court lifted the restraining order, dismissed the petition and
required petitioner and his counsel to explain why they should not be
cited for contempt for misrepresenting that the barangay recall election
was without COMELEC approval.
In a resolution dated January 5, 1996, the COMELEC, for the
third time, re-scheduled the recall election on January 13, 1996; hence,
the
instant
petition
for certiorari with
urgent
prayer
for
injunction. On January 12, 1996, the Court issued a temporary
restraining order and required the Office of the Solicitor General, in
behalf of public respondent, to comment on the petition. In view of the
Office of the Solicitor Generals manifestation maintaining an opinion
adverse to that of the COMELEC, the latter through its law department
filed the required comment. Petitioner thereafter filed a reply.
Petitioners argument is simple and to the point. Citing Section
74 (b) of Republic Act No. 7160, otherwise known as the Local
Government Code, which states that no recall shall take place within
one (1) year from the date of the officials assumption to office or one
(1) year immediately preceding a regular local election, petitioner
insists that the scheduled January 13, 1996 recall election is now
barred as the Sangguniang Kabataan (SK) election was set by
Republic Act No. 7808 on the first Monday of May 1996, and every
three years thereafter. In support thereof, petitioner cites Associated
Labor Union v. Letrondo-Montejo, 237 SCRA 621, where the Court
considered the SK election as a regular local election. Petitioner
maintains that as the SK election is a regular local election, hence no
recall election can be had for barely four months separate the SK
election from the recall election. We do not agree.
The subject provision of the Local Government Code provides:
SEC. 74. Limitations on Recall. (a) Any elective local official may
be the subject of a recall election only once during his term of office for
loss of confidence.
(b) No recall shall take place within one (1) year from the date of the
officials assumption to office or one (1) year immediately preceding
a regular local election.
[Emphasis added.]

WHEREFORE, the petition for review is dismissed. No costs.

Barredo, Antonio and Concepcion, Jr., JJ., concur.
Aquino, J., concurs in the result.

It is a rule in statutory construction that every part of the statute

must be interpreted with reference to the context, i.e., that every part of
the statute must be considered together with the other parts, and kept
subservient to the general intent of the whole enactment. The evident
intent of Section 74 is to subject an elective local official to recall
election once during his term of office. Paragraph (b) construed
together with paragraph (a) merely designates the period when such
elective local official may be subject of a recall election, that is, during
the second year of his term of office. Thus, subscribing to petitioners
interpretation of the phrase regular local election to include the SK
election will unduly circumscribe the novel provision of the Local
Government Code on recall, a mode of removal of public officers by
initiation of the people before the end of his term. And if the SK
election which is set by R.A. No. 7808 to be held every three years
from May 1996 were to be deemed within the purview of the phrase
regular local election, as erroneously insisted by petitioner, then no
recall election can be conducted rendering inutile the recall provision of
the Local Government Code.

In the interpretation of a statute, the Court should start with the

assumption that the legislature intended to enact an effective law, and
the legislature is not presumed to have done a vain thing in the
enactment of a statute. An interpretation should, if possible, be avoided
under which a statute or provision being construed is defeated, or as
otherwise expressed, nullified, destroyed, emasculated, repealed,
explained away, or rendered insignificant, meaningless, inoperative or
nugatory.
It is likewise a basic precept in statutory construction that a
statute should be interpreted in harmony with the Constitution. Thus,
the interpretation of Section 74 of the Local Government Code,
specifically paragraph (b) thereof, should not be in conflict with the
Constitutional mandate of Section 3 of Article X of the Constitution to
enact a local government code which shall provide for a more
responsive and accountable local government structure instituted
through a system of decentralization with effective mechanisms of
recall, initiative, and referendum x x x.
Moreover, petitioners too literal interpretation of the law leads to
absurdity which we cannot countenance. Thus, in a case, the Court
made the following admonition:
We admonish against a too-literal reading of the law as this is apt to
constrict rather than fulfill its purpose and defeat the intention of its
authors. That intention is usually found not in the letter that killeth but
in the spirit that vivifieth x x x
The spirit, rather than the letter of a law determines its construction;
hence, a statute, as in this case, must be read according to its spirit
and intent.
Finally, recall election is potentially disruptive of the normal
working of the local government unit necessitating additional
expenses, hence the prohibition against the conduct of recall election
one year immediately preceding the regular local election. The
proscription is due to the proximity of the next regular election for the
office of the local elective official concerned. The electorate could
choose the officials replacement in the said election who certainly has
a longer tenure in office than a successor elected through a recall
election. It would, therefore, be more in keeping with the intent of the
recall provision of the Code to construe regular local election as one
referring to an election where the office held by the local elective
official sought to be recalled will be contested and be filled by the
electorate.
Nevertheless, recall at this time is no longer possible because of
the limitation stated under Section 74 (b) of the Code considering that
the next regular election involving the barangay office concerned is
barely seven (7) months away, the same having been scheduled on
May 1997.
ACCORDINGLY, the petition is hereby dismissed for having
become moot and academic. The temporary restraining order issued
by the Court on January 12, 1996, enjoining the recall election should
be as it is hereby made permanent.
SO ORDERED.
Romero,
Melo,
Puno,
Kapunan,
Hermosisima,
Jr.,
Panganiban, and Torres, Jr., JJ., concur.
Narvasa, C.J., Padilla, Regalado, Bellosillo, Vitug, and Mendoza,
JJ., concur in the majority and separate concurring opinions.
Davide, Jr., Please see separate concurring opinion.

ACTING COMMISSIONER OF CUSTOMS vs. MANILA ELECTRIC

COMPANY
FACTS:
RA 1394 exempted payment of special import tax for spare parts used
for industries and also insulators from all taxes of whatever nature.
Respondent contends that their insulating oils are exempt from taxes.
ISSUE:
W/N insulating oil is an insulator making Respondent exempt from
paying its taxes.
HELD:
No, insulating oil is different from insulators. The Supreme Court
looked into the definition of insulating oils under Materials Handbook
by George J. Brady, 8th Edition.
The court found out that insulating oils are used for
cooling as well as insulating. And there is no question that the
insulating oil that Respondent is importing is used for cooling instead of
insulating. The law frowns on exemption from taxation; hence an
exempting provision must be construed stictissimi juris.
PARAS vs. COMELEC
FACTS:
A petition for recall was filed against Paras, who is the incumbent
Punong Barangay. The recall election was deferred due to Petitioners
opposition that under Sec. 74 of RA No. 7160, no recall shall take
place within one year from the date of the officials assumption to office
or one year immediately preceding a regular local election. Since the
Sangguniang Kabataan (SK) election was set on the first Monday of
May 2006, no recall may be instituted.
ISSUE:
W/N the SK election is a local election.
HELD:
No. Every part of the statute must be interpreted with reference to its
context, and it must be considered together and kept subservient to its
general intent. The evident intent of Sec. 74 is to subject an elective
local official to recall once during his term, as provided in par. (a) and
par. (b). The spirit, rather than the letter of a law, determines its
construction. Thus, interpreting the phrase regular local election to
include SK election will unduly circumscribe the Code for there will
never be a recall election rendering inutile the provision. In interpreting
a statute, the Court assumed that the legislature intended to enact an
effective law. An interpretation should be avoided under which a
statute or provision being construed is defeated, meaningless,
inoperative or nugatory.