2. Lutz vs Araneta, G.R. No. L-7859, December 22, 1955 FACTS: Plaintiff Walter Lutz, in his capacity as judicial administrator of the intestate estate of Antionio Ledesma, sought to recover from the CIR the sum of P14,666.40 paid by the estate as taxes, under section 3 of the Commonwealth Act of 567 or the Sugar Adjustment Act thereby assailing its constitutionality, for it provided for an increase of the existing tax on the manufacture of sugar, alleging that such enactment is not being levied for a public purpose but solely and exclusively for the aid and support of the sugar industry thus making it void and unconstitutional. The sugar industry situation at the time of the enactment was in an imminent threat of loss and needed to be stabilized by imposition of emergency measures. The action having been dismissed by the Court of First Instance, the plaintiffs appealed the case directly to this Court ISSUE: Is CA 567 constitutional, despite its being allegedly violative of the equal protection clause, the purpose of which is not for the benefit of the general public but for the rehabilitation only of the sugar industry? RULING: The decision appealed from is affirmed, with costs against appellant. RATIO: YES. CA 567 is constitutional. The protection and promotion of the sugar industry is a con cern, n, it follows that the Legislature may determine within reasonable bounds matter of public concer what is necessary for its protection and expedient for its promotion. Here, the legislative discretion must be allowed to fully play, subject only to the test of reasonableness ; and it is not contended that the means provided in the law bear no relation to the objective pursued or are oppressive in character. If objective and methods are alike constitutionally valid, no reason is seen why the state may not levy taxes to raise funds for their prosecution and attainment. Analysis of the Act, wil l show that the tax is levied with a r egulatory purpose, to provide m eans for the rehabilitation and stabilization of the threatened sugar industry. In other words, Taxation may
be made made the implement implement of the s tate's tate's police power. That the tax to be levied should burden the sugar producers themselves can hardly be a ground of complaint; indeed, it appears rational that the tax be obtained precisely from those who are to be benefited from the expenditure of the funds derived from it. At any rate, it is inherent in the
power to tax that a s tate be free fr ee to s elect the s ubjec ts of taxation, and it has been repeat repeatedl edlyy held that that " inequalitie inequalitiess which res ult from a s ing ling out of one particula particularr c las las s for taxation , or exemption ex emption infr in frin ingg e no cons con s titutional tituti onal limi limitat tatio ion. n.""
