6.

BRITISH AMERICAN TOBACCO, petitioner,

vs.
JOSE ISIDRO N. CAMACHO, in his capacity as Secretary of the Department of
Finance and GUILLERMO L. PARAYNO, JR., in his capacity as Commissioner of the
Bureau of Internal Revenue, respondents.
Philip Morris Philippines Manufacturing, Inc., fortune tobacco, corp., MIGHTY
CORPORATION, and JT InTERNATIONAL, S.A., respondents-in-intervention.

On September 1, 2003, petitioner filed before the Regional Trial Court (RTC) of Makati, Branch
61, a petition for injunction with prayer for the issuance of a temporary restraining order (TRO)
and/or writ of preliminary injunction, docketed as Civil Case No. 03-1032. Said petition sought
to enjoin the implementation of Section 145 of the NIRC, Revenue Regulations Nos. 1-97, 9-
2003, 22-2003 and Revenue Memorandum Order No. 6-2003 on the ground that they
discriminate against new brands of cigarettes, in violation of the equal protection and uniformity
provisions of the Constitution.

Issue: Won Section 145 of the NIRC, Revenue Regulations Nos. 1-97, 9-2003, 22-2003 and
Revenue Memorandum Order No. 6-2003 are constitutional.

Ruling:

A legislative classification that is reasonable does not offend the constitutional guaranty of the
equal protection of the laws. The classification is considered valid and reasonable provided that:
(1) it rests on substantial distinctions; (2) it is germane to the purpose of the law; (3) it applies,
all things being equal, to both present and future conditions; and (4) it applies equally to all
those belonging to the same class.52

The first, third and fourth requisites are satisfied. The classification freeze provision was
inserted in the law for reasons of practicality and expediency. That is, since a new brand was
not yet in existence at the time of the passage of RA 8240, then Congress needed a uniform
mechanism to fix the tax bracket of a new brand.

12. G.R. No. L-24796 June 28, 1968

DIRECTOR OF FORESTRY, FOREST STATION WARDEN, DISTRICT 13, BUREAU OF

FORESTRY, BOARD OF DIRECTORS, NATIONAL WATERWORKS AND SEWERAGE
AUTHORITY 1 and CHIEF OF STAFF, ARMED FORCES OF THE
PHILIPPINES, petitioners,
vs.
HON. EMMANUEL M. MUÑOZ, as Judge of the Court of First Instance of Bulacan,
Branch I, the SHERIFF OF THE PROVINCE of BULACAN, and PINAGCAMALIGAN
INDO-AGRO DEVELOPMENT CORPORATION, INC.,respondents.
Acting Director J. L. Utleg notified the Task Force Commander, through the Undersecretary of
National Defense, that Piadeco "can conduct logging operations within its private woodland, as
it is a constitutional right on its part to use and enjoy its own property and the fruits thereof"
but that whatever timber cut therefrom "should be subject to the payment not only of the
regular charges but also of the surcharges imposed by Section 166" of the Tax Code. This
notwithstanding, the army authorities refused to heed Utleg's December 7, 1965 letter and
stood pat on its posture not to allow Piadeco to conduct logging operations

Issue:

Held:

To recapitulate, registration of titles by the owners of private woodlands with the Bureau of
Forestry results in an exemption "from the payment of forest products gathered therefrom for
commercial or industrial purposes." If an owner fails to so register, he is obliged to pay forest
charges, as prescribed in Sections 264 and 265 of the Tax Code, because "he still retain(s) his
rights of ownership, among which are his rights to the fruits of the land and to exclude any
person from the enjoyment and disposal thereof (Art. 429, New Civil Code)."18 However, as
provided in Section 266 above-quoted, if an owner does not register his title, but he desires to
cut, gather and remove timber and other forest products from his land, he may "secure a
license from the Director of Forestry in accordance with the Forest Law and regulations." If he
does not, under the same Section 266, his cutting, gathering and removing of timber and other
forest products "shall be considered as unlawful cutting, gathering and removing of forest
products from public forests and shall be subject to the charges prescribed in such cases." And
this would bring into play Section 267, where, as heretofore quoted, the charges on forest
products "unlawfully cut and gathered in any public forest without license, or, if under license,
in violation of the terms thereof ... shall be increased by three hundred per centum."

18. [G.R. No. L-6741. January 31, 1956.]

INTERPROVINCIAL AUTOBUS CO., INC., Petitioner, vs. COLLECTOR OF INTERNAL
REVENUE, Respondent.

Plaintiff’s conductors and the available stubs did not state the value of the goods transported
thereunder. Pursuant, however, to sections 121 and 127 of the Revised Documentary Stamp
Tax Regulations of the Department of Finance promulgated on September 16, 1924, he
assumed that the value of the goods covered by each of the above- mentioned freight receipts
amounted to more than P5, and assessed a documentary stamp tax of P0.04 on each of the
194,406 receipts. The tax thus assessed amounted to P7,776.24, which was collected from the
deposit of the Plaintiff in the Misamis Occidental branch of the Philippine National
Bank. Plaintiff demanded the refund of the amount, and upon refusal of
the Defendant, Plaintiff filed the action.
Issue: Won that the collection of the tax is illegal because it was done beyond the period of
limitation fixed by law for its collection.

Ruling:

The discovery, according to the pleadings, took place in the year 1941 and the warrant of
distraint or levy was issued on September 30, 1946 (paragraphs 3 and 4 of the complaint). The
pleadings do not show, neither does the evidence, the specific date of the assessment. It is only
alleged in the complaint that the examination of the books took place in the year 1941. In order
to sustain the claim of the invalidity of the levy, it is necessary for the Plaintiff to allege and
prove that the levy took place after five years from the date of the assessments. But the date of
the assessment has not been proved. This is a material matter that the Petitioner-
Appellantshould have proved to assail the levy. Because of his failure to do so the exemption
from levy may not be invoked by him.

24. G.R. No. L-56568 May 20, 1987

REPUBLIC OF THE PHILIPPINES, represented by the Bureau of Customs and the

Bureau of Internal Revenue, petitioner,
vs.
HONORABLE E.L. PERALTA, PRESIDING JUDGE OF THE COURT OF FIRST INSTANCE
OF MANILA, BRANCH XVII, QUALITY TABACCO CORPORATION, FRANCISCO,
FEDERACION OBRERO DE LA INDUSTRIA TABAQUERA Y OTROS TRABAJADORES DE
FILIPINAS (FOITAF) USTC EMPLOYEES ASSOCIATION WORKERS UNION-
PTGWO, respondents.

In its questioned Order of 17 November 1980, the trial court held that the above-enumerated
claims of USTC and FOITAF (hereafter collectively referred to as the "Unions") for separation
pay of their respective members embodied in final awards of the National Labor Relations
Commission were to be preferred over the claims of the Bureau of Customs and the Bureau of
Internal Revenue.

Issue: WON separation pay of their respective members embodied infinal awards of the NLRC were to be
preferred over the claims of the Bureau of Customs and the BIR

Ruling: We come to the question of what impact Article 110 of the Labor Code has had upon
the complete scheme of classification, concurrence and preference of credits in insolvency set
out in the Civil Code. We believe and so hold that Article 110 of the Labor Code did not sweep
away the overriding preference accorded under the scheme of the Civil Code to tax claims of
the government or any subdivision thereof which constitute a lien upon properties of the
Insolvent. It is frequently said that taxes are the very lifeblood of government. The effective
collection of taxes is a task of highest importance for the sovereign. It is critical indeed for its
own survival. It follows that language of a much higher degree of specificity than that exhibited
in Article 110 of the Labor Code is necessary to set aside the intent and purpose of the
legislator that shines through the precisely crafted provisions of the Civil Code. It cannot be
assumed simpliciter that the legislative authority, by using in Article 110 the words "first
preference" and "any provision of law to the contrary notwithstanding" intended to disrupt the
elaborate and symmetrical structure set up in the Civil Code.

30. G.R. No. L-21731 March 31, 1966

REPUBLIC OF THE PHILIPPINES, plaintiff-appellant,

vs.
LIM TIAN TENG SONS and CO., INC., defendant-appellant.

Plaintiff cites as errors the non-imposition of the 5% surcharge for the late payment of tax and
the computation of delinquency interest from October 8, 1957.

Defendant, on the other hand, assails the jurisdiction of the lower court, its finding that the
assessment in question has become final and executory, the correctness of the assessment and
the imposition of the 50% surcharge.1äwphï1.ñët

Issue: Whether or not LLTSCI is correct

Ruling:

LLTSCI maintains that the lower court has no jurisdiction to entertain this case on the ground
that the Collector of Internal Revenue has not yet issued his final decision on its requests for
reinvestigation. The taxpayer's stand is that final decision of the Collector of Internal Revenue
on the disputed assessment is a condition precedent to the filing of an action in the Court of
First Instance for the collection of a tax. This argument has no merit. The Collector of Internal
Revenue is authorized to collect delinquent internal revenue taxes either by distraint and levy or
by judicial action or both simultaneously.1 The only requisite before he can collect the tax is that
he must first assess the same within the time fixed by law.2 And in the case of a false or
fraudulent return with intent to evade the tax or of a failure to file a return, a proceeding in
court for the collection of such tax may be begun without assessment.3

Nowhere in the Tax Code is the Collector of Internal Revenue required to rule first on a
taxpayer's request for reinvestigation before he can go to court for the purpose of collecting the
tax assessed.

36. G.R. No. L-20942 September 22, 1967

COMMISIONER OF INTERNAL REVENUE, petitioner,

vs.
A. D. GUERRERO, Special Administrator, in substitution of NATHANIEL I. GUNN, as
Administrator of the Estate of the late PAUL I. GUNN, respondent.

The Commissioner of Internal Revenue denied the claim for refund in the sum ofP2,441.93 filed
by the administrator of the estate of Paul I. Gunn. The deceased operated an air transportation
business under the business name and style of Philippine Aviation Development. 61,048.19
liters of gasoline was actually used in aviation during the period from October 3, 1956 to May
31, 1957. The estate, as claimed, was entitled to the same rights and privileges as Filipino
citizens operating public utilities including privileges in the matter of taxation. The
Commissioner of Internal Revenue disagreed. The matter was brought to the Court of Tax
Appeals and ordered the petitioner to refund o the respondent the sum of P2,441.93.7.
Court of Tax Appeals decision was reversed.

Issue: Whether or not Section 142 of the National Internal Revenue Code allowing Filipinos are
fund of 50 percentum of the specific tax paid on aviation oil, could be availed by citizens of the
United States.

Ruling:

The Ordinance is designed for a limited period to allow what the Constitution prohibits;
Americans may operate public utilities. During its effectivity, there should be no thought of
whittling down the grant thus freely made. Nonetheless, being of a limited duration, it should
not be given an interpretation that would trench further on the plain constitutional mandate to
limit the operation of public utilities to Filipino hands. That is to show fealty to the fundamental
law, which, in the language of Story "was not intended to provide merely for the exigencies of a
few years" unlike the Ordinance "but was to endure through a long lapse of ages, the events of
which were locked up in the inscrutable purposes of Providence."13This is merely to emphasize
that the Constitution unlike an ordinance appended to it, to borrow from Cardozo "states or
ought to state not rules for the passing hour, but principles for an expanding future."14 What is
transitory in character then should not be given an interpretation at war with the plain and
explicit command of what is to continue far into the future, unless there be some other principle
of acknowledged primacy that compels the contrary.