TABLE OF CONTENTS

TITLE PAGE

I. MEANING, NATURE BASIS, CHARACTERISTICS AND

PURPOSE OF TAXATION

MEANING OF TAXATION
OBLIGATION TO PAY TAXES V. OBLIGATION TO PAY DEBT

PHILEX MINING V. CIR................................................................................1

ATLAS CONSOLIDATED V. CIR..................................................................1
DOMINGO V. GARLITOS.............................................................................2

THEORY AND BASIS OF TAXATION

1. NECESSITY THEORY
COMMISSIONER V. ALGUE........................................................................3
NPC V. CITY OF CABANATUAN.................................................................4

2. BENEFIT-RECEIVED PRINCIPLE
LORENZO V. POSADAS..............................................................................5

PURPOSE/OBJECTIVES OF TAXATION

1. GENERAL/FISCAL/REVENUE
COMMISSIONER V. ALGUE........................................................................7
PAL V. EDU..................................................................................................8
TOLENTINO V. SECRETARY OF FINANCE................................................9

2. NON-REVENUE/SPECIAL OR REGULATORY
OSMENA V. ORBOS..................................................................................10
CALTEX V. COMMISSION ON AUDIT.......................................................11
ESSO STANDARD EASTERN V. CIR........................................................12

CLASSIFICATION OF TAXES
INDIRECT TAXES

TOLENTINO V. SECRETARY OF FINANCE..............................................13

MACEDA V. MACARAIG............................................................................14
COMMISSIONER V. GOTAMCO................................................................16
SILKAIR V. CIR..........................................................................................17

AS TO OBJECT OR SUBJECT MATTER OF THE TAX

EXCISE

COMMISSIONER V. CA.............................................................................19
VILLANUEVA V. CITY OF ILOILO..............................................................21

AS TO GRADUATION OR RATE
PROPORTIONAL/FLAT RATE
ALLIED BANKING V. QUEZON CITY GOVERNMENT.............................22

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AS TO PURPOSE
CHEVRON PHILS. V. BCDA......................................................................24

ASPECTS OF TAXATION
COLLECTION/ADMINISTRATION/WAYS AND METHODS OF
COLLECTION
CIR V. KUDOS METAL CORP...................................................................27

TAX SYSTEMS
PROGRESSIVE SYSTEM V. PROGRESSIVE RATE OF TAX
TOLENTINO V. SEC. OF FINANCE...........................................................28

BASIC PRINCIPLES OF A SOUND TAX SYSTEM

CHAVEZ V. ONGPIN..................................................................................30
TAGANITO MINING V. COMMISSIONER..................................................31

II. NATURE AND LIMITATIONS OF THE POWER OF TAXATION

NATURE OF THE POWER OF TAXATION

INHERENT IN SOVEREIGNTY/DIST FROM POLICE POWER AND
EMINENT DOMAIN

ROXAS V. CTA...........................................................................................33
TANADA V. ANGARA.................................................................................35
LTO V. CITY OF BUTUAN..........................................................................36

EXCLUSIVELY LEGISLATIVE IN NATURE

-EXTENT OF LEGISLATIVE POWER
TAN V. DEL ROSARIO...............................................................................38
COMMISSIONER V. SANTOS...................................................................40

-CANNOT BE DELEGATED
MACEDA V. ERB........................................................................................41
MACEDA V. MACARAIG............................................................................41
BASCO V. PAGCOR..................................................................................42

WHO MAY QUESTION THE VALIDITY OF A TAX MEASURE OR

EXPENDITURE OF TAXES- “TAXPAYER’S SUIT”

LOZADA V. COMMISSIONER....................................................................43
MACEDA V. MACARAIG............................................................................44
CHAVEZ V. PCGG......................................................................................45
GONZALES V. NARVASA..........................................................................45
BAYAN V. EXEC. SEC................................................................................47
DELMAR V. PAGCOR................................................................................47
MIRANDA V. CARREON............................................................................48

NATURE OF THE POWER OF TAXATION

INHERENT LIMITATIONS
-PURPOSE MUST BE PUBLIC IN NATURE
CALTEX V. COMMISSION ON AUDIT.......................................................50
PASCUAL V. SEC. OF PUBLIC WORKS...................................................50

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TIO V. VIDEOGRAM REGULATORY BOARD............................................51
GASTON V. REPUBLIC PLANTER...........................................................52

PROHIBITION AGAINST DELEGATION OF TAXING

POWER/EXCEPTIONS
-DELEGATION TO LOCAL GOVERNMENTS
BASCO V. PAGCOR..................................................................................53
LTO V. CITY OF BUTUAN..........................................................................54

-DELEGATION TO THE PRESIDENT

GARCIA V. EXEC. SECRETARY................................................................55

-DELEGATION TO ADMINISTRATIVE AGENCIES

OSMENA V. ORBOS..................................................................................56
COMMISSIONER V. CA.............................................................................57

EXEMPTION OF GOVERNMENT AGENCIES/AGENCIES AND

INSTRUMENTALITIES
MACEDA V. MACARAIG............................................................................58
MACTAN CEBU AIRPORT V. MARCOS....................................................59

INTERNATIONAL COMITY
TANADA V. ANGARA.................................................................................60
MITSUBISHI CORP. V. COMMISSIONER..................................................61

LIMITATION OF TERRITORIAL JURISDICTION

ILOILO BOTTLERS V. CITY OF ILOILO....................................................62
COMMISSIONER V. BOAC........................................................................63
HOPEWELL POWER V. COMMISSIONER...............................................64
SMITH V. COMMISSIONER.......................................................................65

CONSTITUTIONAL LIMITATIONS

DUE PROCESS OF LAW

SISON V. ANCHETA...................................................................................66

EQUAL PROTECTION OF THE LAWS

TAN V. DEL ROSARIO...............................................................................67
PHILIPPINE RURAL ELECTRIC V. SECRETARY.....................................68

UNIFORMITY AND EQUITY IN TAXATION

-CLASSIFICATION OF TAXPAYERS/SUBJECT OR ITEMS TO BE
TAXED
SISON V. ANCHETA...................................................................................69
TOLENTINO V. SECRETARY OF FINANCE..............................................70

PROHIBITION AGAINST IMPAIRMENT OF OBLIGATIONS OF

CONTRACTS
PHIL. RURAL ELEC V. SEC......................................................................71

PROHIBITION AGAINST INFRINGEMENT OF RELIGIOUS

FREEDOM
AMERICAN BIBLE SOCIETY V. CITY OF MANILA...................................72

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PROHIBITION RE: APPROPRIATION OF PROCEEDS OF
TAXATION
OSMENA V. ORBOS..................................................................................73
GASTON V. REPUBLIC PLANTERS BANK..............................................74

PROHIBITION AGAINST TAXATION OF RELIGIOUS,

CHARITABLE ENTITIES AND EDUCATIONAL ENTITIES
ABRA VALLEY COLLEGE V. AQUINO......................................................75

PROHIBITION AGAINST TAXATION OF NON-STOCK, NON-

PROFIT EDUCATIONAL INSTITUTIONS
COMMISSIONER V. CA.............................................................................76

OTHERS
GRANT OF TAX EXEMPTION
CHAVEZ V. PCGG......................................................................................77
REPUBLIC V. KIDAPAWAN.......................................................................78

VETO APPROPRIATION, REVENUE, TARIFF BILLS BY THE

PRESIDENT
GONZALES V. MACARAIG.......................................................................79

NON-IMPAIRMENT OF THE JURISDICTION OF THE SUPREME

COURT
COMMISSIONER V. SANTOS...................................................................80
SAN MIGUEL CORP V. AVELINO..............................................................81

REVENUE BILLS SHALL ORIGINATE FROM THE HOUSE OF

REPRESENTATIVES
TOLENTINO V. SEC. OF FINANCE...........................................................82

INFRINGEMENT OF PRESS FREEDOM

TOLENTINO V. SEC. OF FINANCE...........................................................82

GRANT OF FRANCHISE
TOLENTINO V. SEC. OF FINANCE...........................................................83

III. SITUS OF TAXATION AND DOUBLE TAXATION

SITUS OF SUBJECTS OF TAXATION

METRO ALLIANCE HOLDINGS V. COMMISSIONER...............................85
BOAC V. COMMISSIONER........................................................................86
WELLS FARGO V. COLLECTOR...............................................................89

MULTIPLICITY OF SUITS
COLLECTOR V. LARA...............................................................................90

DOUBLE TAXATION
-STRICT SENSE
COLLECTOR V. LARA...............................................................................92

-BROAD SENSE
VILLANUEVA V. CITY OF ILOILO..............................................................94

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DOUBLE TAXATION
-CONSTITUTIONALITY OF DOUBLE TAXATION
CITY OF BAGUIO V. DE LEON..................................................................95
PEPSI COLA BOTTLING CO V. BUTUAN.................................................96
CHINA BANKING V. CA.............................................................................97

IV. MEANS OF AVOIDING OR MINIMIZING THE BURDEN OF

TAXATION

TAX AVOIDANCE
DELPHER TRADERS CORP V. IAC..........................................................98
COMMISSIONER V. LINCOLN PHIL.........................................................99

TAX EVASION
REPUBLIC V. GONZALES.......................................................................101
PEOPLE V. LUCIO TAN...........................................................................102

EXEMPTION FROM TAXATION

-MEANING
GREENFIELD V. MEER...........................................................................107

COMPARED WITH OTHER TERMS

-TAX REMISSION/CONDONATION
SURIGAO CON. MIN. V. COLLECTOR....................................................110

-TAX AMNESTY
COMMISSIONER V. CA............................................................................111
COMMISSIONER V. MARUBENI.............................................................112

KINDS OF TAX EXEMPTION

-EXPRESSED AND IMPLIED
COMMISSIONER V. MITSUBISHI METAL CORP....................................115

NATURE OF POWER TO GRANT TAX EXEMPTION

BASCO V. PAGCOR.................................................................................116
REPUBLIC V. KIDAPAWAN.....................................................................117

RATIONALE/GROUNDS FOR TAX EXEMPTION

DAVAO GULF V. CIR................................................................................119

NATURE OF TAX EXEMPTION

TOLENTINO V. SEC. OF FINANCE.........................................................120
PLDT V. CITY OF DAVAO........................................................................121
PHILIPPINE ACETYLENE V. COMMISSIONER......................................123
REPUBLIC V. KIDAPAWAN.....................................................................124

LAWS GRANTING TAX EXEMPTIONS/TAX INCENTIVES

ABRA VALLEY COLLEGE V. AQUINO....................................................126

CONSTRUCTION OF STATUTES GRANTING TAX EXEMPTION

-GENERAL RULE
COMMISSIONER V. CA...........................................................................127
MISAMIS ORIENTAL ASSOC V. DEPT. OF FINANCE............................129
NESTLE PHILS V. CA..............................................................................130

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-EXCEPTIONS
MACEDA V. MACARAIG..........................................................................131

V. SOURCES, APPLICATION, INTERPRETATION AND

ADMINISTRATION OF TAX LAWS

SOURCES OF TAX LAWS

-TAX TREATIES/INTERNATIONAL AGREEMENTS
MACEDA V. MACARAIG..........................................................................132

-REVENUE RULES AND REGULATIONS

COMMISSIONER V. CA...........................................................................133

-VALIDITY OF REVENUE RULES AND REGULATIONS

TAN V. DEL ROSARIO.............................................................................135
COMMISSIONER V. CA...........................................................................136

-EFFECTIVITY AND VALIDITY OF TAX ORDINANCE

TUAZON V. CA.........................................................................................137
HAGONOY MARKET V. MUN. OF HAGONOY.......................................139
JARDINE DAVIES INSURANCE V. ALIPOSA.........................................140

INTERPRETATION/APPLICATION OF TAX LAWS

-NATURE OF INTERNAL REVENUE LAWS
HILADO V. COLLECTOR.........................................................................141

-CONSTRUCTION OF TAX LAWS

*RULE WHEN LEGISLATIVE INTENT IS CLEAR
LORENZO V. POSADAS..........................................................................142
UMALI V. ESTANISLAO...........................................................................144
COMMISSIONER V. SOLIDBANK CORP................................................145

*RULE WHEN THERE IS DOUBT

COLLECTOR V. LA TONDENA................................................................146

-APPLICATION OF TAX LAWS

UMALI V. ESTANISLAO...........................................................................147

-APPLICATION OF REVENUE REGULATIONS/RULINGS AND THE

EFFECTS OF REPEAL
COMMISSIONER V. CA...........................................................................149
COMMISSIONER V. TELEFUNKEN..............................................................

COMMISSIONER V. MICHAEL LHUILLIER PAWNSHOP.......................150

-MANDATORY AND DIRECTORY PROVISION OF TAX LAWS
ROXAS V. RAFFERTY.............................................................................152
PECSON V. CA........................................................................................153

VI. TAX REMEDIES

TAX REMEDIES AVAILABLE TO THE GOVERNMENT

SORIANO V. SEC. OF FINANCE.............................................................154

NATIONAL POWER CORP V. PROV. TREAS. OF BENGUET................157

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ROY III V. HERBOSA...............................................................................158
CIR V. GOODYEAR PHILS......................................................................160
BANCO DE ORO V. REPUBLIC..............................................................162

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