G.R. No.
175356 December 3, 2013 *As to the constitutionality of RA 9257 and its implementing rules and
MANILA MEMORIAL PARK, INC. AND LA FUNERARIA PAZ-SUCAT,
INC., Petitioners, vs. SECRETARY OF THE DEPARTMENT OF SOCIAL
WELFARE AND DEVELOPMENT and THE SECRETARY OF THE
DEPARTMENT OF FINANCE, Respondents.
Doctrine: When a party challeges the constitutionality of a law, the
burden of proof rests upon him.
Facts:
1. Petitioners assail the constitutionality of Section 4 of Republic
Act (RA) No. 7432,3 as amended by RA 9257,4 and the
implementing rules and regulations issued by the DSWD and DOF
insofar as these allow business establishments to claim the 20%
discount given to senior citizens as a tax deduction.
2. On February 26, 2004, RA 92578 amended certain provisions of
RA 7432, to wit:
SECTION 4. Privileges for the Senior Citizens. – The senior
citizens shall be entitled to the following:
(a) the grant of twenty percent (20%) discount from all
establishments relative to the utilization of services in
hotels and similar lodging establishments, restaurants and
recreation centers, and purchase of medicines in all
establishments for the exclusive use or enjoyment of senior
citizens, including funeral and burial services for the death
of senior citizens;
3. The establishment may claim the discounts granted under (a), (f),
(g) and (h) as tax deduction based on the net cost of the goods
sold or services rendered: Provided, That the cost of the discount
shall be allowed as deduction from gross income for the same
taxable year that the discount is granted.
Issue:
Whether the Senior Citizen’s Discount that can be claimed as Tax
Deductions by establishments is invalid and unconstitutional
Held:
NO, It is Constitutional, and a valid exercise of police power.
Ratio:
- Petitioners’ Arguments
*Petitioners emphasize that they are not questioning the 20%
discount granted to senior citizens but are only assailing the
constitutionality of the tax deduction scheme prescribed under RA
9257 and the implementing rules and regulations issued by the DSWD
and the DOF.
*Petitioners assert that Section 4(a) of the law is unconstitutional
because it constitutes deprivation of private property. Compelling
drugstore owners and establishments to grant the discount will result
in a loss of profit and capital because 1) drugstores impose a mark-up
of only 5% to 10% on branded medicines; and 2) the law failed to
provide a scheme whereby drugstores will be justly compensated for
the discount.
*Petitioners argue that we have previously ruled in Central Luzon
Drug Corporation37 that the 20% discount is an exercise of the power
of eminent domain, thus, requiring the payment of just
compensation.
- Respondents’ Arguments
*Respondents, on the other hand, question the filing of the instant
Petition directly with the Supreme Court as this disregards the
hierarchy of courts.
*likewise assert that there is no justiciable controversy as petitioners
failed to prove that the tax deduction treatment is not a "fair and full
equivalent of the loss sustained" by them.
regulations, respondents contend that petitioners failed to overturn
its presumption of constitutionality
- Court’s Ruling
The law is a legitimate exercise of police power which, similar to the
power of eminent domain, has general welfare for its object.
 Accordingly, it has been described as "the most essential,
insistent and the least limitable of powers, extending as it does
to all the great public needs." It is "[t]he power vested in the
legislature by the constitution to make, ordain, and establish all
manner of wholesome and reasonable laws, statutes, and
ordinances, either with penalties or without, not repugnant to
the constitution, as they shall judge to be for the good and
welfare of the commonwealth, and of the subjects of the same."
 The petitioners cannot claim that they will be at a loss due to
small mark ups and only a 32% recovery of the 20% discount. But
they have not substantiated this claim with income statements
of their business.
 While the Constitution protects property rights, petitioners must
accept the realities of business and the State, in the exercise of
police power, can intervene in the operations of a business which
may result in an impairment of property rights in the process.
 We, thus, found that the 20% discount as well as the tax
deduction scheme is a valid exercise of the police power of the
State.
It is not an exercise by the state of the power of Eminent Domain
 The 20% discount is intended to improve the welfare of senior
citizens who, at their age, are less likely to be gainfully employed,
more prone to illnesses and other disabilities, and, thus, in need
of subsidy in purchasing basic commodities. It may not be amiss
to mention also that the discount serves to honor senior citizens
who presumably spent the productive years of their lives on
contributing to the development and progress of the nation.
 The obiter in Central Luzon Drug Corporation,78 however,
describes the 20% discount as an exercise of the power of
eminent domain and the tax credit, under the previous law,
equivalent to the amount of discount given as the just
compensation therefor. The flaw in this reasoning is in its
premise. It presupposes that the subject regulation, which
impacts the pricing and, hence, the profitability of a private
establishment, automatically amounts to a deprivation of
property without due process of law. If this were so, then all
price and rate of return on investment control laws would have
to be invalidated.
 The impact or effect of a regulation, such as the one under
consideration, must, thus, be determined on a case-to-case
basis. Whether that line between permissible regulation under
police power and "taking" under eminent domain has been
crossed must, under the specific circumstances of this case, be
subject to proof and the one assailing the constitutionality of the
regulation carries the heavy burden of proving that the measure
is unreasonable, oppressive or confiscatory.
 We adopted a similar line of reasoning in Carlos Superdrug
Corporation85 when we ruled that petitioners therein failed to
prove that the 20% discount is arbitrary, oppressive or
confiscatory. We noted that no evidence, such as a financial
report, to establish the impact of the 20% discount on the overall
profitability of petitioners was presented in order to show that
they would be operating at a loss due to the subject regulation
or that the continued implementation of the law would be
unconscionably detrimental to the business operations of
petitioners.
 On its face, we find that there are at least two conceivable bases
to sustain the subject regulation’s validity absent clear and
convincing proof that it is unreasonable, oppressive or
confiscatory. Congress may have legitimately concluded that
business establishments have the capacity to absorb a decrease
in profits or income/gross sales due to the 20% discount without
substantially affecting the reasonable rate of return on their
investments
1) not all customers of a business establishment are senior
citizens
2) the level of its profit margins on goods and services offered
to the general public.
 Hence, the present recourse must, likewise, fail. Because all laws
enjoy the presumption of constitutionality, courts will uphold a
law’s validity if any set of facts may be conceived to sustain it.

- In the case at bar, evidence is indispensable before a determination

of a constitutional violation can be made because of the following
reasons. First, the assailed law, by imposing the senior citizen
discount, does not take any of the properties used by a business
establishment like, say, the land on which a manufacturing plant is
constructed or the equipment being used to produce goods or
services. Second, rather than taking specific properties of a business
establishment, the senior citizen discount law merely regulates the
prices of the goods or services being sold to senior citizens by
mandating a 20% discount.

- Note that the law does not impose at what specific price the product
shall be sold, only that a 20% discount shall be given to senior citizens
based on the price set by the business establishment. A business
establishment is, thus, free to adjust the prices of the goods or
services it provides to the general public.

- WHEREFORE, the Petition is hereby DISMISSED for lack of merit.