HIJO PLANTATION v CENTRAL BANK G.R. No. L-34526 August 9, 1988 HIJO PLANTATION INC.

, DAVAO FRUITS CORPORATION, TWIN RIVERS PLANTATION, INC. and MARSMAN & CO., INC., for themselves and in behalf of other persons and entities similarly situated, petitioners, vs. CENTRAL BANK OF THE PHILIPPINES, respondent. FACTS Because of the difficulty in determining the peso-dollar exchange rate, Congress passed RA 6125 which imposed a stabilization tax on exports, which gradually decreases over four years. The law enumerated covered products such as logs, copra, centrifugal sugar and copper. Under Section 1, as a last provision, Any export product the aggregate annual F.O.B. value of which shall exceed five million United States dollars in any one calendar year during the effectivity of this Act shall likewise be subject to the rates of tax in force during the fiscal years following its reaching the said aggregate value. During the first 9 months of 1971, the total banana export exceeded the USD5m limit in RA 6125. Thus, the Central Bank issued a Monetary Board Resolution imposing a stabilization tax on exports of bananas. The resolution provided a rate of 6% for the first half of 1971 and 4% from July 1971 to last until June 1972. The petitioner corporations were all engaged in production and exportation of bananas who paid the stabilization taxes in protest and now assail the said resolution. Central Bank contends that the stabilization tax should be imposed starting July 1971, the fiscal year following the calendar year where the industry reached USD 5m limit. ISSUE WON the Central Bank exceeded its powers in issuing the said Resolution HELD YES. There is no question that the export of bananas already reached the limit, bringing it under the coverage of RA 6125, and thus making the petitioners liable.

However, the Central Bank, in issuing the resolution, acted in overzealous desire to carry out the provisions of RA 6125. It acted beyond its authority under the said law. Thus, where there is a discrepancy between the basic law and the regulation issued to implement the said law, the basic law prevails and the regulation cannot go beyond the terms and provisions of the basic law.