GEROCHI CASE

1. necessary to distinguish the States power of taxation from

the police power
The power to tax is an incident of sovereignty and is unlimited in
its range, acknowledging in its very nature no limits, so that
security against its abuse is to be found only in the responsibility
of the legislature which imposes the tax on the constituency that
is to pay it.[30] It is based on the principle that taxes are the
lifeblood of the government, and their prompt and certain
availability is an imperious need.[31] Thus, the theory behind the
exercise of the power to tax emanates from necessity; without
taxes, government cannot fulfill its mandate of promoting the
general welfare and well-being of the people. [
On the other hand, police power is the power of the state to
promote public welfare by restraining and regulating the use of
liberty and property.[33] It is the most pervasive, the least
limitable, and the most demanding of the three fundamental
powers of the State. The justification is found in the Latin
maxims salus populi est suprema lex (the welfare of the people is
the supreme law) and sic utere tuo ut alienum non laedas (so use
your property as not to injure the property of others). As an
inherent attribute of sovereignty which virtually extends to all
public needs, police power grants a wide panoply of instruments
through which the State, as parens patriae, gives effect to a host
of its regulatory powers.[34] We have held that the power to
"regulate" means the power to protect, foster, promote, preserve,
and control, with due regard for the interests, first and foremost,
of the public, then of the utility and of its patrons. [35]
The conservative and pivotal distinction between these two powers rests in
the purpose for which the charge is made. If generation of revenue is the primary
purpose and regulation is merely incidental, the imposition is a tax; but if

regulation is the primary purpose, the fact that revenue is incidentally raised does
not make the imposition a tax.[36]
In exacting the assailed Universal Charge through Sec. 34 of the EPIRA, the State's
police power, particularly its regulatory dimension, is invoked. Such can be
deduced from Sec. 34 which enumerates the purposes for which the Universal
Charge is imposed[37] and which can be amply discerned as regulatory in character.
The Second Issue
The principle of separation of powers ordains that each of the three branches
of government has exclusive cognizance of and is supreme in matters falling
within its own constitutionally allocated sphere. A logical corollary to the doctrine
of separation of powers is the principle of non-delegation of powers, as expressed
in the Latin maxim potestas delegata non delegari potest (what has been delegated
cannot be delegated). This is based on the ethical principle that such delegated
power constitutes not only a right but a duty to be performed by the delegate
through the instrumentality of his own judgment and not through the intervening
mind of another. [47]
hese requirements are denominated as 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 second test mandates adequate guidelines or
limitations in the law to determine the boundaries of the delegate's authority and
prevent the delegation from running riot.[49]
The Court finds that the EPIRA, read and appreciated in its entirety, in relation to
Sec. 34 thereof, is complete in all its essential terms and conditions, and that it
contains sufficient standards.
Although Sec. 34 of the EPIRA merely provides that within one (1) year from the
effectivity thereof, a Universal Charge to be determined, fixed and approved by the
ERC, shall be imposed on all electricity end-users, and therefore, does not state the

specific amount to be paid as Universal Charge, the amount nevertheless is made

certain by the legislative parameters provided in the law itself

DIAZ VS SEC OF FINANCE

- assailing the validity of the impending imposition of value-added

tax (VAT) by the Bureau of Internal Revenue (BIR) on the
collections of tollway operators.

1. Whether or not the imposition of VAT on tollway operators a)

amounts to a tax on tax and not a tax on services;
A tax is imposed under the taxing power of the government
principally for the purpose of raising revenues to fund public
expenditures.[27] Toll fees, on the other hand, are collected by
private tollway operators as reimbursement for the costs and
expenses incurred in the construction, maintenance and operation
of the tollways, as well as to assure them a reasonable margin of
income. Although toll fees are charged for the use of public
facilities, therefore, they are not government exactions that can
be properly treated as a tax. Taxes may be imposed only by the
government under its sovereign authority, toll fees may be
demanded by either the government or private individuals or
entities, as an attribute of ownership. [28]

2. Petitioners argue that a toll fee is a users tax and to impose

VAT on toll fees is tantamount to taxing a tax

Consequently, VAT on tollway operations is not really a tax on the tollway

user, but on the tollway operator. Under Section 105 of the Code, [31] VAT is
imposed on any person who, in the course of trade or business, sells or renders
services for a fee. In other words, the seller of services, who in this case is the
tollway operator, is the person liable for VAT. The latter merely shifts the burden of
VAT to the tollway user as part of the toll fees.
For this reason, VAT on tollway operations cannot be a tax on tax even if toll
fees were deemed as a users tax. VAT is assessed against the tollway operators
gross receipts and not necessarily on the toll fees. Although the tollway operator
may shift the VAT burden to the tollway user, it will not make the latter directly
liable for the VAT. The shifted VAT burden simply becomes part of the toll fees that
one has to pay in order to use the tollways. ( It is allowed because VAT is an
indirect tax)

FRANCIA CASE

We have consistently ruled that there can be no off-setting of taxes

against the claims that the taxpayer may
have against the government. A person cannot refuse to pay a tax on
the ground
that the government owes him an amount equal to or greater than the
tax being
collected. The collection of a tax cannot await the results of a lawsuit
against the
government.
Taxes and debt cannot be compensated exception:

DOMINGO VS GARLITOS
SYLLABUS

COMPENSATION BETWEEN TAXES AND CLAIMS OF INTESTATE

RECOGNIZED AND APPROPRIATED FOR BY LAW. The fact that the

court having jurisdiction of the estate had found that the claim of the
estate against the
Government has been appropriated for the purpose by a corresponding
law (Rep Act
No. 2700) shows that both the claim of the Government for inheritance
taxes and
the claim of the intestate for services rendered have already become
overdue and
demandable as well as fully liquidated. Compensation, therefore, takes
place by
operation of law, in accordance with the Provisions of Articles 1279 and
1290 of the
Civil Code, and both debts are extinguished to the concurrent amount.
Under the above circumstances, both the claim of the Government for
inheritance taxes and the claim of the intestate for services rendered
have already become overdue and
demandable as well as fully liquidated.

ABAKADA CASE

SYLLABUS
TAXATION; REPUBLIC ACT NO. 9337 (EXPANDED VALUE-ADDED TAX
LAW); THE STAND-BY AUTHORITY OF THE PRESIDENT IS STILL TOTALLY
WITHIN THE SUBJECT OF WHAT RATE OF VALUE-ADDED TAX SHOULD BE
IMPOSED ON THE TAXPAYERS. The so-called stand-by authority in
favor of the President, whereby the rate of 10% VAT wanted by the
Senate is retained until such time that certain conditions arise when
the 12% VAT wanted by the House shall be imposed, appears to be a
compromise to try to bridge the difference in the rate of VAT proposed
by the two houses of Congress. Nevertheless, such compromise is still
totally within the
subject of what rate of VAT should be imposed on taxpayers.
EXCEPTIONS. Nonetheless, the general rule barring delegation of
legislative powers is subject to the following recognized limitations or

exceptions: (1) Delegation of tariff powers to the President under

Section 28 (2) of
Article VI of the Constitution; (2) Delegation of emergency powers to
the President
under Section 23 (2) of Article VI of the Constitution; (3) Delegation to
the people at
large; (4) Delegation to local governments; and (5) Delegation to
administrative
bodies.
Issue: is there undue delegation?
TESTS OF VALID DELEGATION. In every case of permissible
delegation, there must be a showing that the delegation itself is valid.
It
is
valid
only if the law (a) is complete in itself, setting forth therein the policy
to
be
executed, carried out, or implemented by the delegate; and (b) fixes a
standard

the limits of which are sufficiently determinate and determinable to

which
the
delegate must conform in the performance of his functions. A sufficient
standard
is
one which defines legislative policy, marks its limits, maps out its
boundaries
and
specifies the public agency to apply it. It indicates the circumstances
under
which
the legislative command is to be effected. Both tests are intended to
prevent
a
total
transference of legislative authority to the delegate, who is not allowed
to
step
into
the shoes of the legislature and exercise a power essentially
legislative.

THE LEGISLATURE MAY DELEGATE TO EXECUTIVE OFFICERS OR

BODIES THE POWER TO DETERMINE CERTAIN FACTS OR CONDITIONS
ON WHICH THE OPERATION OF A STATUTE IS MADE TO DEPEND.
Clearly,
the
legislature
may delegate to executive officers or bodies the power to determine

certain
facts
or
conditions, or the happening of contingencies, on which the operation
of
a
statute
is,
by its terms, made to depend, but the legislature must prescribe
sufficient
standards, policies or limitations on their authority. While the power to
tax
cannot
be delegated to executive agencies, details as to the enforcement and
administration of an exercise of such power may be left to them,
including
the
power to determine the existence of facts on which its operation
depend
TAXATION; REPUBLIC ACT NO. 9337; SECRETARY OF FINANCE BECOMES
THE MEANS OR TOOL BY WHICH THE LEGISLATIVE POLICY IN THE
VALUE-ADDED TAX IS DETERMINED AND IMPLEMENTED; CASE AT BAR.

In
the
present
case,
in
making his recommendation to the President on the existence of either
of
the
two
conditions, the Secretary of Finance is not acting as the alter ego of the
President
or
even her subordinate. In such instance, he is not subject to the power
of
control
and
direction of the President. He is acting as the agent of the legislative
department,
to
determine and declare the event upon which its expressed will is to
take
effect.
The
Secretary of Finance becomes the means or tool by which legislative
policy
is
determined and implemented, considering that he possesses all the
facilities
to
gather data and information and has a much broader perspective to
properly
evaluate them. His function is to gather and collate statistical data and
other
pertinent information and verify if any of the two conditions laid out by
Congress
is

present. His personality in such instance is in reality but a projection of

that
of
Congress. Thus, being the agent of Congress and not of the President,
the
President
cannot alter or modify or nullify, or set aside the findings of the
Secretary
of
Finance
and to substitute the judgment of the former for that of the latter.
MIAA CASE
A government-owned or controlled corporation must be organized as a stock or non-stock corporation.
MIAA is not organized as a stock or non-stock corporation. MIAA is not a stock corporation because it has no
capital stock divided into shares. MIAA has no stockholders or voting shares. x x x

ince MIAA is neither a stock nor a non-stock corporation, MIAA does not qualify as a
government-owned or controlled corporation. What then is the legal status of MIAA within the
National Government?
MIAA is a government instrumentality vested with corporate powers to perform efficiently its
governmental functions. MIAA is like any other government instrumentality, the only difference
is that MIAA is vested with corporate powers. Se552ction 2(10) of the Introductory Provisions of the
Administrative Code defines a government instrumentality as follows:
chanRoblesvirtualLa wlibrary

SEC.

2. General

Terms

Defined.

(10) Instrumentality refers to any agency of the National Government, not integrated within the department
framework, vested with special functions or jurisdiction by law, endowed with some if not all corporate
powers, administering special funds, and enjoying operational autonomy, usually through a charter. x x x.
chanroblesvirtuallawlibrary

mobilia Sequuntur Personam, Immobilia Situa

Definition: Latin: movables follow the person, immovables their locality.

Subject to exceptions:

Gomez vs