69 SCRA 460 Taxation Delegation to Local Governments Double Taxation

Pepsi Cola has a bottling plant in the Municipality of Tanauan, Leyte. In September 1962, the Municipality approved
Ordinance No. 23 which levies and collects from soft drinks producers and manufacturers a tai of one-sixteenth
(1/16) of a centavo for every bottle of soft drink corked.
In December 1962, the Municipality also approved Ordinance No. 27 which levies and collects on soft drinks
produced or manufactured within the territorial jurisdiction of this municipality a tax of one centavo P0.01) on each
gallon of volume capacity.
Pepsi Cola assailed the validity of the ordinances as it alleged that they constitute double taxation in two instances:
a) double taxation because Ordinance No. 27 covers the same subject matter and impose practically the same tax
rate as with Ordinance No. 23, b) double taxation because the two ordinances impose percentage or specific taxes.
Pepsi Cola also questions the constitutionality of Republic Act 2264 which allows for the delegation of taxing powers
to local government units; that allowing local governments to tax companies like Pepsi Cola is confiscatory and
oppressive.
The Municipality assailed the arguments presented by Pepsi Cola. It argued, among others, that only Ordinance No.
27 is being enforced and that the latter law is an amendment of Ordinance No. 23, hence there is no double
taxation.
ISSUE: Whether or not there is undue delegation of taxing powers. Whether or not there is double taxation.
HELD: No. There is no undue delegation. The Constitution even allows such delegation. Legislative powers may be
delegated to local governments in respect of matters of local concern. By necessary implication, the legislative
power to create political corporations for purposes of local self-government carries with it the power to confer on
such local governmental agencies the power to tax. Under the New Constitution, local governments are granted the
autonomous authority to create their own sources of revenue and to levy taxes. Section 5, Article XI provides: Each
local government unit shall have the power to create its sources of revenue and to levy taxes, subject to such
limitations as may be provided by law. Withal, it cannot be said that Section 2 of Republic Act No. 2264 emanated
from beyond the sphere of the legislative power to enact and vest in local governments the power of local taxation.
There is no double taxation. The argument of the Municipality is well taken. Further, Pepsi Colas assertion that the
delegation of taxing power in itself constitutes double taxation cannot be merited. It must be observed that the
delegating authority specifies the limitations and enumerates the taxes over which local taxation may not be
exercised. The reason is that the State has exclusively reserved the same for its own prerogative. Moreover, double
taxation, in general, is not forbidden by our fundamental law unlike in other jurisdictions. Double taxation becomes
obnoxious only where the taxpayer is taxed twice for the benefit of the same governmental entity or by the same
jurisdiction for the same purpose, but not in a case where one tax is imposed by the State and the other by the city
or municipality.

GR. NO. 1677330 September 18, 2009, SPECIAL FIRST DIVISION (CORONA, J.)
FACTS:
Petitioner is a domestic corporation whose primary purpose is to establish, maintain, conduct and operate a prepaid
group practice health care delivery system or a health maintenance organization to take care of the sick and
disabled persons enrolled in the health care plan and to provide for the administrative, legal, and financial
responsibilities of the organization. On January 27, 2000, respondent CIR sent petitioner a formal deman letter and
the corresponding assessment notices demanding the payment of deficiency taxes, including surcharges and
interest, for the taxable years 1996 and 1997 in the total amount of P224,702,641.18. The deficiency assessment
was imposed on petitioners health care agreement with the members of its health care program pursuant to
Section 185 of the 1997 Tax Code. Petitioner protested the assessment in a letter dated February 23, 2000. As
respondent did not act on the protest, petitioner filed a petition for review in the Court of Tax Appeals (CTA) seeking
the cancellation of the deficiency VAT and DST assessments. On April 5, 2002, the CTA rendered a decision, ordering
the petitioner to PAY the deficiency VAT amounting to P22,054,831.75 inclusive of 25% surcharge plus 20% interest
from January 20, 1997 until fully paid for the 1996 VAT deficiency and P31,094,163.87 inclusive of 25% surcharge
plus 20% interest from January 20, 1998 until fully paid for the 1997 VAT deficiency. Accordingly, VAT Ruling No.
[231]-88 is declared void and without force and effect. The 1996 and 1997 deficiency DST assessment against
petitioner is hereby CANCELLED AND SET ASIDE. Respondent is ORDERED to DESIST from collecting the said DST
deficiency tax. Respondent appealed the CTA decision to the (CA) insofar as it cancelled the DST assessment. He
claimed that petitioners health care agreement was a contract of insurance subject to DST under Section 185 of
the 1997 Tax Code.
On August 16, 2004, the CA rendered its decision which held that petitioners health care agreement was in the
nature of a non-life insurance contract subject to DST. Respondent is ordered to pay the deficiency Documentary
Stamp Tax. Petitioner moved for reconsideration but the CA denied it.

ISSUES:
(1)

Whether or not Philippine Health Care Providers, Inc. engaged in insurance business.

(2)
Whether or not the agreements between petitioner and its members possess all elements necessary in the
insurance contract.
HELD:
NO. Health Maintenance Organizations are not engaged in the insurance business. The SC said in June 12, 2008
decision that it is irrelevant that petitioner is an HMO and not an insurer because its agreements are treated as
insurance contracts and the DST is not a tax on the business but an excise on the privilege, opportunity or facility
used in the transaction of the business. Petitioner, however, submits that it is of critical importance to characterize
the business it is engaged in, that is, to determine whether it is an HMO or an insurance company, as this
distinction is indispensable in turn to the issue of whether or not it is liable for DST on its health care agreements.
Petitioner is admittedly an HMO. Under RA 7878 an HMO is an entity that provides, offers or arranges for coverage
of designated health services needed by plan members for a fixed prepaid premium. The payments do not vary with
the extent, frequency or type of services provided. Section 2 (2) of PD 1460 enumerates what constitutes doing an
insurance business or transacting an insurance businesswhich are making or proposing to make, as insurer, any
insurance contract; making or proposing to make, as surety, any contract of suretyship as a vocation and not as
merely incidental to any other legitimate business or activity of the surety; doing any kind of business, including a
reinsurance business, specifically recognized as constituting the doing of an insurance business within the meaning
of this Code; doing or proposing to do any business in substance equivalent to any of the foregoing in a manner
designed to evade the provisions of this Code.
Overall, petitioner appears to provide insurance-type benefits to its members (with respect to its curative medical
services), but these are incidental to the principal activity of providing them medical care. The insurance-like
aspect of petitioners business is miniscule compared to its noninsurance activities. Therefore, since it substantially
provides health care services rather than insurance services, it cannot be considered as being in the insurance
business.

Facts:
St. Lukes Medical Center, Inc. (St. Lukes) is a hospital organized as a non-stock and non-profit corporation.
The BIR assessed St. Lukes deficiency taxes for 1998 comprised of deficiency income tax, value-added tax, and
withholding tax. The BIR claimed that St. Lukes should be liable for income tax at a preferential rate of 10% as
provided for by Section 27(B). Further, the BIR claimed that St. Lukes was actually operating for profit in 1998
because only 13% of its revenues came from charitable purposes. Moreover, the hospitals board of trustees,
officers and employees directly benefit from its profits and assets.
On the other hand, St. Lukes maintained that it is a non-stock and non-profit institution for charitable and social
welfare purposes exempt from income tax under Section 30(E) and (G) of the NIRC. It argued that the making of
profit per se does not destroy its income tax exemption.
Issue:
The sole issue is whether St. Lukes is liable for deficiency income tax in 1998 under Section 27(B) of the
NIRC, which imposes a preferential tax rate of 10^ on the income of proprietary non-profit hospitals.
Ruling:
Section 27(B) of the NIRC does not remove the income tax exemption of proprietary non-profit hospitals
under Section 30(E) and (G). Section 27(B) on one hand, and Section 30(E) and (G) on the other hand, can be
construed together without the removal of such tax exemption.
Section 27(B) of the NIRC imposes a 10% preferential tax rate on the income of (1) proprietary non-profit
educational institutions and (2) proprietary non-profit hospitals. The only qualifications for hospitals are that they
must be proprietary and non-profit. Proprietary means private, following the definition of a proprietary
educational institution as any private school maintained and administered by private individuals or groups
with a government permit. Non-profit means no net income or asset accrues to or benefits any member or
specific person, with all the net income or asset devoted to the institutions purposes and all its activities conducted
not for profit.
Non-profit does not necessarily mean charitable. In Collector of Internal Revenue v. Club Filipino Inc. de Cebu,
this Court considered as non-profit a sports club organized for recreation and entertainment of its stockholders and
members. The club was primarily funded by membership fees and dues. If it had profits, they were used for

overhead expenses and improving its golf course. The club was non-profit because of its purpose and there was
no evidence that it was engaged in a profit-making enterprise.
The sports club in Club Filipino Inc. de Cebu may be non-profit, but it was not charitable. The Court defined
charity in Lung Center of the Philippines v. Quezon City as a gift, to be applied consistently with existing
laws, for the benefit of an indefinite number of persons, either by bringing their minds and hearts under the
influence of education or religion, by assisting them to establish themselves in life or [by] otherwise lessening the
burden of government. However, despite its being a tax exempt institution, any income such institution earns
from activities conducted for profit is taxable, as expressly provided in the last paragraph of Sec. 30.
To be a charitable institution, however, an organization must meet the substantive test of charity in Lung
Center. The issue in Lung Center concerns exemption from real property tax and not income tax. However, it
provides for the test of charity in our jurisdiction. Charity is essentially a gift to an indefinite number of persons
which lessens the burden of government. In other words, charitable institutions provide for free goods and
services to the public which would otherwise fall on the shoulders of government. Thus, as a matter of efficiency,
the government forgoes taxes which should have been spent to address public needs, because certain
private entities already assume a part of the burden. This is the rationale for the tax exemption of charitable
institutions. The loss of taxes by the government is compensated by its relief from doing public works which
would have been funded by appropriations from the Treasury
The Constitution exempts charitable institutions only from real property taxes. In the NIRC, Congress decided to
extend the exemption to income taxes. However, the way Congress crafted Section 30(E) of the NIRC is materially
different from Section 28(3), Article VI of the Constitution. (Emphasis supplied)
Section 30(E) of the NIRC defines the corporation or association that is exempt from income tax. On the other hand,
Section 28(3), Article VI of the Constitution does not define a charitable institution, but requires that the institution
actually, directly and exclusively use the property for a charitable purpose. (Emphasis supplied)
To be exempt from real property taxes, Section 28(3), Article VI of the Constitution requires that a charitable
institution use the property actually, directly and exclusively for charitable purposes. (Emphasis supplied)
To be exempt from income taxes, Section 30(E) of the NIRC requires that a charitable institution must be
organized and operated exclusively for charitable purposes. Likewise, to be exempt from income taxes, Section
30(G) of the NIRC requires that the institution be operated exclusively for social welfare. (Emphasis supplied)
However, the last paragraph of Section 30 of the NIRC qualifies the words organized and operated exclusively by
providing that:
Notwithstanding the provisions in the preceding paragraphs, the income of whatever kind and character of the
foregoing organizations from any of their properties, real or personal, or from any of their activities conducted
for profit regardless of the disposition made of such income, shall be subject to tax imposed under this Code.
(Emphasis supplied)
In short, the last paragraph of Section 30 provides that if a tax exempt charitable institution conducts any activity
for profit, such activity is not tax exempt even as its not-for-profit activities remain tax exempt.
Thus, even if the charitable institution must be organized and operated exclusively for charitable purposes, it is
nevertheless allowed to engage in activities conducted for profit without losing its tax exempt status for its notfor-profit activities. The only consequence is that the income of whatever kind and character of a charitable
institution from any of its activities conducted for profit, regardless of the disposition made of such income,
shall be subject to tax. Prior to the introduction of Section 27(B), the tax rate on such income from for-profit
activities was the ordinary corporate rate under Section 27(A). With the introduction of Section 27(B), the tax rate
is now 10%. (Emphasis supplied)
The Court finds that St. Lukes is a corporation that is not operated exclusively for charitable or social welfare
purposes insofar as its revenues from paying patients are concerned. This ruling is based not only on a strict
interpretation of a provision granting tax exemption, but also on the clear and plain text of Section 30(E) and (G).
Section 30(E) and (G) of the NIRC requires that an institution be operated exclusively for charitable or social
welfare purposes to be completely exempt from income tax. An institution under Section 30(E) or (G) does not lose
its tax exemption if it earns income from its for-profit activities. Such income from for-profit activities, under the last
paragraph of Section 30, is merely subject to income tax, previously at the ordinary corporate rate but now at the
preferential 10% rate pursuant to Section 27(B). (Emphasis supplied)
St. Lukes fails to meet the requirements under Section 30(E) and (G) of the NIRC to be completely tax exempt from
all its income. However, it remains a proprietary non-profit hospital under Section 27(B) of the NIRC as long as it
does not distribute any of its profits to its members and such profits are reinvested pursuant to its corporate
purposes. St. Lukes, as a proprietary non-profit hospital, is entitled to the preferential tax rate of 10% on its net
income from its for-profit activities.

St. Lukes is therefore liable for deficiency income tax in 1998 under Section 27(B) of the NIRC. However, St. Lukes
has good reasons to rely on the letter dated 6 June 1990 by the BIR, which opined that St. Lukes is a corporation
for purely charitable and social welfare purposes and thus exempt from income tax.
In Michael J. Lhuillier, Inc. v. Commissioner of Internal Revenue, the Court said that good faith and honest belief
that one is not subject to tax on the basis of previous interpretation of government agencies tasked to implement
the tax law, are sufficient justification to delete the imposition of surcharges and interest.
WHEREFORE, St. Lukes Medical Center, Inc. is ORDERED TO PAY the deficiency income tax in 1998 based on
the 10% preferential income tax rate under Section 27(8) of the National Internal Revenue Code. However, it is
not liable for surcharges and interest on such deficiency income tax under Sections 248 and 249 of the
National Internal Revenue Code. All other parts of the Decision and Resolution of the Court of Tax Appeals are
AFFIRMED.

51 SCRA 208 Political Law The Embrace of Only One Subject by a Bill
Delegation of Power Delegation to Administrative Bodies
In 1985, Presidential Dedree No. 1987 entitled An Act Creating the Videogram Regulatory Board was enacted
which gave broad powers to the VRB to regulate and supervise the videogram industry. The said law sought to
minimize the economic effects of piracy. There was a need to regulate the sale of videograms as it has adverse
effects to the movie industry. The proliferation of videograms has significantly lessened the revenue being acquired
from the movie industry, and that such loss may be recovered if videograms are to be taxed. Section 10 of the PD
imposes a 30% tax on the gross receipts payable to the LGUs.
In 1986, Valentin Tio assailed the said PD as he averred that it is unconstitutional on the following grounds:
1. Section 10 thereof, which imposed the 30% tax on gross receipts, is a rider and is not germane to the subject
matter of the law.
2. There is also undue delegation of legislative power to the VRB, an administrative body, because the law allowed
the VRB to deputize, upon its discretion, other government agencies to assist the VRB in enforcing the said PD.
ISSUE: Whether or not the Valentin Tios arguments are correct.
HELD: No.
1. The Constitutional requirement that every bill shall embrace only one subject which shall be expressed in the
title thereof is sufficiently complied with if the title be comprehensive enough to include the general purpose which
a statute seeks to achieve. In the case at bar, the questioned provision is allied and germane to, and is reasonably
necessary for the accomplishment of, the general object of the PD, which is the regulation of the video industry
through the VRB as expressed in its title. The tax provision is not inconsistent with, nor foreign to that general
subject and title. As a tool for regulation it is simply one of the regulatory and control mechanisms scattered
throughout the PD.
2. There is no undue delegation of legislative powers to the VRB. VRB is not being tasked to legislate. What was
conferred to the VRB was the authority or discretion to seek assistance in the execution, enforcement, and
implementation of the law. Besides, in the very language of the decree, the authority of the BOARD to solicit such
assistance is for a fixed and limited period with the deputized agencies concerned being subject to the direction
and control of the [VRB].

Facts: Petitioner South African Airways is a foreign corporation organized and existing under and by virtue of the
laws of the Republic of South Africa. Its principal office is located at Airways Park, Jones Road, Johannesburg
International Airport, South Africa. In the Philippines, it is an internal air carrier having no landing rights in the
country. Petitioner has a general sales agent in the Philippines, Aerotel Limited Corporation (Aerotel). Aerotel sells
passage documents for compensation or commission for petitioners off-line flights for the carriage of passengers
and cargo between ports or points outside the territorial jurisdiction of the Philippines. Petitioner is not registered
with the Securities and Exchange Commission as a corporation, branch office, or partnership. It is not licensed to do
business in the Philippines. It paid a corporate tax in the rate of 32% of its gross billings. However, it subsequently
claim for refund contending that its income should be taxed at the rate of 2 1/2% of its gross billings.
Issues: whether or not petitioners income is sourced within the Philippines and is to be taxed at 32% of the gross
billings?
Held: Yes! In the instant case, the general rule is that resident foreign corporations shall be liable for a 32% income
tax on their income from within the Philippines, except for resident foreign corporations that are international
carriers that derive income from carriage of persons, excess baggage, cargo and mail originating from the

Philippines which shall be taxed at 2 1/2% of their Gross Philippine Billings. Petitioner, being an international carrier
with no flights originating from the Philippines, does not fall under the exception. As such, petitioner must fall under
the general rule. This principle is embodied in the Latin maxim, exception firmat regulam in casibus non exceptis,
which means, a thing not being excepted must be regarded as coming within the purview of the general rule.
To reiterate, the correct interpretation of the above provisions is that, if an international air carrier maintains flights
to and from the Philippines, it shall be taxed at the rate of 2 1/2% of its Gross Philippine Billings, while international
air carriers that do not have flights to and from the Philippines but nonetheless earn income from other activities in
the country will be taxed at the rate of 32% of such income.

GR L-18993
29 June 1963
FACTS:
In Domingo vs. Moscoso (106 PHIL 1138), the Supreme Court declared as final and executory the order of the Court
of First Instance of Leyte for the payment of estate and inheritance taxes, charges and penalties amounting to
P40,058.55 by the Estate of the late Walter Scott Price. The petition for execution filed by the fiscal, however, was
denied by the lower court. The Court held that the execution is unjustified as the Government itself is indebted to
the Estate for 262,200; and ordered the amount of inheritance taxes be deducted from the Governments
indebtedness to the Estate.
ISSUE:
Whether a tax and a debt may be compensated.
HELD:
The court having jurisdiction of the Estate had found that the claim of the Estate against the Government has been
recognized and an amount of P262,200 has already been appropriated by a corresponding law (RA 2700). Under the
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. Compensation, therefore, takes
place by operation of law, in accordance with Article 1279 and 1290 of the Civil Code, and both debts are
extinguished to the concurrent amount.

FACTS:
ESSO deducted from its gross income for 1959, as part of its ordinary and necessary business expenses, the
amount it had spent for drilling and exploration of its petroleum concessions. The Commissioner disallowed the
claim on the ground that the expenses should be capitalized and might be written off as a loss only when a dry
hole should result. Hence, ESSO filed an amended return where it asked for the refund of P323,270 by reason of its
abandonment, as dry holes, of several of its oil wells. It also claimed as ordinary and necessary expenses in the
same return amount representing margin fees it had paid to the Central Bank on its profit remittances to its New
York Office.
ISSUE: Whether the margin fees may be considered ordinary and necessary expenses when paid.
HELD:
For an item to be deductible as a business expense, the expense must be ordinary and necessary; it must be paid
or incurred within the taxable year; and it must be paid or incurred in carrying on a trade or business. In addition,
the taxpayer must substantially prove by evidence or records the deductions claimed under law, otherwise, the
same will be disallowed. There has been no attempt to define ordinary and necessary with precision. However, as
guiding principle in the proper adjudication of conflicting claims, an expenses is considered necessary where the
expenditure is appropriate and helpful in the development of the taxpayers business. It is ordinary when it
connotes a payment which is normal in relation to the business of the taxpayer and the surrounding circumstances.
Assuming that the expenditure is ordinary and necessary in the operation of the taxpayers business; the
expenditure, to be an allowable deduction as a business expense, must be determined from the nature of the
expenditure itself, and on the extent and permanency of the work accomplished by the expenditure. Herein, ESSO
has not shown that the remittance to the head office of part of its profits was made in furtherance of its own trade
or business. The petitioner merely presumed that all corporate expenses are necessary and appropriate in the
absence of a showing that they are illegal or ultra vires; which is erroneous. Claims for deductions are a matter of
legislative grace and do not turn on mere equitable considerations.

Filinvest Development Corporation extended advances in favor of its affiliates and supported the same with
instructional letters and cash and journal vouchers. The BIR assessed Filinvest for deficiency income tax by

imputing an arms length interest rate on its advances to affiliates. Filinvest disputed this by saying that the CIR
lacks the authority to impute theoretical interest and that the rule is that interests cannot be demanded in the
absence of a stipulation to the effect.
ISSUE:
Can the CIR impute theoretical interest on the advances made by Filinvest to its affiliates?
HELD:
NO. Despite the seemingly broad power of the CIR to distribute, apportion and allocate gross income under (now)
Section 50 of the Tax Code, the same does not include the power to impute theoretical interests even with regard to
controlled taxpayers transactions. This is true even if the CIR is able to prove that interest expense (on its own
loans) was in fact claimed by the lending entity. The term in the definition of gross income that even those income
from whatever source derived is covered still requires that there must be actual or at least probable receipt or
realization of the item of gross income sought to be apportioned, distributed, or allocated. Finally, the rule under the
Civil Code that no interest shall be due unless expressly stipulated in writing was also applied in this case.
The Court also ruled that the instructional letters, cash and journal vouchers qualify as loan agreements that are
subject to DST.

MIAA VS. CITY OF PASAY

April 02, 2009
G.R. No. 163072
FACTS:
Petitioner Manila International Airport Authority (MIAA) operates and administers the Ninoy Aquino International
Airport (NAIA) Complex under Executive Order No. 903 (EO 903),3 otherwise known as the Revised Charter of the
Manila International Airport Authority, issued by then President Ferdinand E. Marcos. The NAIA Complex is located
along the border between Pasay City and Paraaque City. MIAA received Final Notices of Real Property Tax
Delinquency from the City of Pasay for the taxable years 1992 to 2001. The Court of Appeals upheld the power of
the City of Pasay to impose and collect realty taxes on the NAIA Pasay properties. MIAA filed a motion for
reconsideration, which the Court of Appeals denied.
ISSUE:
The issue raised in this petition is whether the NAIA Pasay properties of MIAA are exempt from real property tax.
RULING:
The Supreme Court held that the Airport Lands and Buildings of MIAA are properties devoted to public use and thus
are properties of public dominion. Properties of public dominion are owned by the State or the Republic. Article 420
of the Civil Code provides:
Art. 420. The following things are property of public dominion:
(1) Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the State,
banks, shores, roadsteads, and others of similar character;
(2) Those which belong to the State, without being for public use, and are intended for some public service or for
the development of the national wealth.
The term "ports x x x constructed by the State" includes airports and seaports. The Airport Lands and Buildings of
MIAA are intended for public use, and at the very least intended for public service. Whether intended for public use
or public service, the Airport Lands and Buildings are properties of public dominion. As properties of public
dominion, the Airport Lands and Buildings are owned by the Republic and thus exempt from real estate tax under
Section 234(a) of the Local Government Code.

Reyes vs. Almanzor

REYES v. ALMANZOR
GR Nos. L-49839-46, April 26, 1991
196 SCRA 322
FACTS: Petitioners JBL Reyes et al. owned a parcel of land in Tondo which are leased and occupied as dwelling
units by tenants who were paying monthly rentals of not exceeding P300. Sometimes in 1971 the Rental
Freezing Law was passed prohibiting for one year from its effectivity, an increase in monthly rentals of dwelling

units where rentals do not exceed three hundred pesos (P300.00), so that the Reyeses were precluded from
raising the rents and from ejecting the tenants. In 1973, respondent City Assessor of Manila re-classified and
reassessed the value of the subject properties based on the schedule of market values, which entailed an
increase in the corresponding tax rates prompting petitioners to file a Memorandum of Disagreement averring
that the reassessments made were "excessive, unwarranted, inequitable, confiscatory and unconstitutional"
considering that the taxes imposed upon them greatly exceeded the annual income derived from their
properties. They argued that the income approach should have been used in determining the land values instead
of the comparable sales approach which the City Assessor adopted.
ISSUE: Is the approach on tax assessment used by the City Assessor reasonable?
HELD: No. The taxing power has the authority to make a reasonable and natural classification for purposes of
taxation but the government's act must not be prompted by a spirit of hostility, or at the very least discrimination
that finds no support in reason. It suffices then that the laws operate equally and uniformly on all persons under
similar circumstances or that all persons must be treated in the same manner, the conditions not being different
both in the privileges conferred and the liabilities imposed.
Consequently, it stands to reason that petitioners who are burdened by the government by its Rental Freezing
Laws (then R.A. No. 6359 and P.D. 20) under the principle of social justice should not now be penalized by the
same government by the imposition of excessive taxes petitioners can ill afford and eventually result in the
forfeiture of their properties.