CIR vs. ALGUE, INC & CA
GR No. L-28896 February 17, 1988 Defnition and Concept o Taxation Taxation FACTS:
The The priv privat ate e resp respon onde dent nt,, a doe doest sti! i! !orp !orpor orat atio ion n en"a en"a"e "ed d in en"in en"inee eeri rin" n",, !onstr !onstru!t u!tion ion and other other a##ied a##ied a!tivi a!tivitie ties, s, re!eiv re!eived ed a #etter #etter $ro $ro the petiti petitione onerr assessin" it in the tota# aount o$ %8&, 18&.8' as de#in(uen!y in!oe ta)es $or the years 19'8 and 19'9. 19'9. *n +anuary 18, 196', #"ue ied a #etter o$ protest or re(uest $or re!onsideration, hi!h #etter as stap re!eived on the sae day in the o/i!e o$ the petitioner. petitioner. *n 0ar!h 12, 196', a arrant o$ distraint and #evy as presented to the private respondent, throu"h its !ounse#, tty. #berto Guevara, +r., ho re$used to re!eive it on the "round o$ the pendin" protest. sear!h o$ the protest in the do!ets o$ the !ase proved $ruit#ess. tty. tty. Guevara produ!ed his #e !opy and "ave a photo stat to 34R a"ent Raon Reyes, ho de$erred servi!e o$ the arrant. *n pri# 7, 196', tty. Guevara as na##y in$ored that the 34R as not tain" any a!tion on the protest and it as on#y then that he a!!epted the arrant o$ distraint and #evy ear#ier sou"ht to be served. 5i)tee 5i)teen n days days #ater #ater,, on pri# pri# 2&, 196', 196', #"ue #"ue #ed #ed a petiti petition on $or revie revie o$ the de!ision o$ the oissioner o$ 4nterna# Revenue ith the ourt o$ Ta) ppea#s. The petitioner !ontends that the !#aied dedu!tion o$ %7',. as proper#y disa## disa##o oed ed be!aus be!ause e it as not an ordina ordinary ry reason reasonab# ab#e e or ne!ess ne!essary ary busine business ss e)pense. The ourt o$ Ta) ppea#s had seen it di/erent#y. "reein" ith #"ue, it he#d that the said aount had been #e"itiate#y paid by the private respondent $or a!tua# servi!es rendered. The payent as in the $or o$ prootiona# $ees. These ere !o##e!ted by the %ayees $or their or in the !reation o$ the e"etab#e *i# 4nvest 4nvesten entt orpor orporati ation on o$ the %hi#ip %hi#ippin pines es and its subse( subse(uen uentt pur!ha pur!hase se o$ the properties o$ the %hi#ippine 5u"ar state :eve#opent opany. opany. %arentheti!a##y, %arentheti!a##y, it ay be observed observed that the petitioner petitioner had. *ri"ina##y *ri"ina##y !#aied !#aied these prootio prootiona# na# $ees to be persona# ho#din" !opany in!oe but #ater !on$ored to the de!ision o$ the respondent !ourt re;e!tin" this assertion. 4t has been estab#ished that the %hi#ippine 5u"ar state :eve#opent opany had ear#ier appointed #"ue as its a"ent, authori
#tiate#y, a$ter its in!orporation #ar"e#y throu"h the prootion o$ the said persons, persons, this ne !orporation !orporation pur!hased pur!hased the %5: properties. properties. For this
sa#e, #"ue re!eived as a"ent a !oission o$ %126,., and it as $ro this !oission that the %7',. prootiona# $ees ere paid to the a$ore-naed individua#s. ISSUE:
?hether or not the o##e!tor o$ 4nterna# Revenue !orre!t#y disa##oed the %7',. dedu!tion !#aied by private respondent #"ue as #e"itiate business e)penses in its in!oe ta) returns@ RULING:
NO
Ta)es are the #i$eb#ood o$ the "overnent and so shou#d be !o##e!ted ithout unne!essary hindran!e. *n the other hand, su!h !o##e!tion shou#d be ade in a!!ordan!e ith #a as any arbitrariness i## ne"ate the very reason $or "overnent itse#$. 4t is there$ore ne!essary to re!on!i#e the apparent#y !oni!tin" interests o$ the authorities and the ta)payers so that the rea# purpose o$ ta)ation, hi!h is the prootion o$ the !oon "ood, ay be a!hieved. 4t is said that ta)es are hat e pay $or !ivi#i
OSMENA vs. ORBOS
GR No. 99886 0ar!h &1, 199& Purpose o Taxation: Revenue Raising FACTS:
*n *!tober 1, 198B, %resident Ferdinand 0ar!os issued %.:. 19'6 !reatin" a 5pe!ia# !!ount in the Genera# Fund, desi"nated as the *i# %ri!e 5tabi#iN:,= not as a =trust a!!ount= or a =trust $und,= and that Ei$ a spe!ia# ta) is !o##e!ted $or a spe!i!
purpose, the revenue "enerated there$ro sha## =be treated as a spe!ia# $und= to be used on#y $or the purpose indi!ated, and not !hanne##ed to another "overnent ob;e!tive.E %etitioner $urther points out that sin!e Ea =spe!ia# $und= !onsists o$ onies !o##e!ted throu"h the ta)in" poer o$ a 5tate, suc! amounts be"ong to t!e $tate, a#thou"h the use thereo$ is #iited to the spe!ia# purposeHob;e!tive $or hi!h it as !reated.E Ae a#so !ontends that the Ede#e"ation o$ #e"is#ative authorityE to the R3 vio#ates 5e!tion 28 C2D. rti!#e 4 o$ the onstitution, vi/ . C2D The on"ress ay, by #a, authori
?hether or not the *%5F is a $or o$ revenue easure drain" $ro a spe!ia# ta) to be e)pended $or a spe!ia# purpose@ RULING:
NO
The *%5F is a ETrust !!ountE hi!h as estab#ished E$or the purpose o$ iniinder %.:. No. 19'6, as aended by )e!utive *rder No. 1&7 dated 27 February 1987, this Trust !!ount ay be $unded $ro any o$ the $o##oin" sour!es aD 2ny increase in t!e tax co""ection rom ad va"orem tax or customs duty imposed on petro"eum products sub;e!t to ta) under this :e!ree arising rom exc!ange rate ad;ustment, as ay be deterined by the 0inister o$ Finan!e in !onsu#tation ith the 3oard o$ ner"y bD 2ny increase in t!e tax co""ection as a resu"t o t!e "iting o tax exemptions o government corporations, as ay be deterined by the 0inister o$ Finan!e in !onsu#tation ith the 3oard o$ ner"y !D 2ny additiona" amount to be imposed on petro"eum products to au"ent the resour!es o$ the Fund throu"h an appropriate *rder that ay be issued by the 3oard o$ ner"y re(uirin" payent o$ persons or !opanies en"a"ed in the business o$ iportin", anu$a!turin" andHor aretin" petro#eu produ!ts
dD 2ny resu"ting peso cost dierentia"s in !ase the a!tua# peso !osts paid by oi# !opanies in the iportation o$ !rude oi# and petro#eu produ!ts is #ess than the peso !osts !oputed usin" the re$eren!e $orei"n e)!han"e rate as )ed by the 3oard o$ ner"y. T!e OP$% is t!us a buer mec!anism t!roug! )!ic! t!e domestic consumer prices o oi" and petro"eum products are stabi"i/ed, instead o
PAL vs EDU
GR No. L-B1&8& u"ust 1', 1988 Purpose o Taxation: Revenue Raising FACTS:
The %hi#ippine ir#ines C%LD is a !orporation or"aninder its $ran!hise, %L is e)ept $ro the payent o$ ta)es. %L has, sin!e 19'6, not been payin" otor vehi!#e re"istration $ees. 5oetie in 1971, hoever, appe##ee oissioner Roeo F. #evate issued a re"u#ation re(uirin" a## ta) e)ept entities, aon" the %L to pay otor vehi!#e re"istration $ees. :espite %L=s protestations, the appe##ee re$used to re"ister the appe##ant=s otor vehi!#es un#ess the aounts iposed under Repub#i! !t B1&6 ere paid. The appe##ant thus paid, under protest, the aount o$ %19, '29.7' as re"istration $ees o$ its otor vehi!#es. $ter payin" under protest, %L throu"h !ounse#, rote a #etter dated 0ay 19,1971, to oissioner du deandin" a re$und o$ the aounts paid, invoin" the ru#in" in Ca"a"ang v4 >oren/o C97 %hi#. 212 J19'1KD here it as he#d that otor vehi!#e re"istration $ees are in rea#ity ta)es $ro the payent o$ hi!h %L is e)ept by virtue o$ its #e"is#ative $ran!hise. ppe##ee du denied the re(uest $or re$und basin" his a!tion on the de!ision in Repub"ic v4 P!i"ippine Rabbit 5us >ines, 8nc., C&2 5R 211, 0ar!h &, 197D to the e/e!t that otor vehi!#e re"istration $ees are re"u#atory e)!eptiona# and not revenue easures and, there$ore, do not !oe ithin the e)eption "ranted to %L under its $ran!hise. Aen!e, %L #ed the !op#aint a"ainst Land Transportation oissioner Roeo F. du and Nationa# Treasurer >ba#do arbone## ith the ourt o$ First 4nstan!e o$ Ri
