G.R. No. L-31156 February 27, 1976 PEPSI-COLA BO LING CO!PAN" OF #E P#ILIPPINES, INC., plaintiff-appellant, vs. !

$NICIPALI " OF ANA$AN, LE" E, #E !$NICIPAL !A"OR, E AL., defendant appellees. Fa%&'( On February 14, 1963, the plaintiff-appellant, Pepsi-Cola Bottlin Co!pany of the Philippines, "n#., #o!!en#ed a #o!plaint $ith preli!inary in%un#tion before the Court of First "nstan#e of &eyte for that #ourt to de#lare 'e#tion ( of )epubli# *#t +o. ((64. 1 other$ise ,no$n as the &o#al *utono!y *#t, un#onstitutional as an undue dele ation of ta-in authority as $ell as to de#lare Ordinan#es +os. (3 and (., series of 196(, of the !uni#ipality of /anauan, &eyte, null and void. 0uni#ipal Ordinan#e +o. (3, of /anauan, &eyte, $hi#h $as approved on 'epte!ber (1, 196(, levies and #olle#ts 2fro! soft drin,s produ#ers and !anufa#turers a tai of onesi-teenth 314165 of a #entavo for every bottle of soft drin, #or,ed.2 2 For the purpose of #o!putin the ta-es due, the person, fir!, #o!pany or #orporation produ#in soft drin,s shall sub!it to the 0uni#ipal /reasurer a !onthly report, of the total nu!ber of bottles produ#ed and #or,ed durin the !onth. 3 On the other hand, 0uni#ipal Ordinan#e +o. (., $hi#h $as approved on O#tober (6, 196(, levies and #olle#ts 2on soft drin,s produ#ed or !anufa#tured $ithin the territorial %urisdi#tion of this !uni#ipality a ta- of O+7 C7+/*8O 3P9.915 on ea#h allon 31(6 fluid oun#es, :.'.5 of volu!e #apa#ity.2 ) For the purpose of #o!putin the ta-es due, the person, fun #o!pany, partnership, #orporation or plant produ#in soft drin,s shall sub!it to the 0uni#ipal /reasurer a !onthly report of the total nu!ber of allons produ#ed or !anufa#tured durin the !onth. 5 /he ta- i!posed in both Ordinan#es +os. (3 and (. is deno!inated as 2!uni#ipal produ#tion ta-.; I''ue(
"s 'e#tion (, )epubli# *#t +o. ((64 an undue dele ation of po$er, #onfis#atory and oppressive<

#e*+( /he po$er of ta-ation is an essential and inherent attribute of soverei nty, belon in as a !atter of ri ht to every independent overn!ent, $ithout bein e-pressly #onferred by the people. 6 "t is a po$er that is purely le islative and $hi#h the #entral le islative body #annot dele ate either to the e-e#utive or %udi#ial depart!ent of the overn!ent $ithout infrin in upon the theory of separation of po$ers. /he e-#eption, ho$ever, lies in the #ase of !uni#ipal #orporations, to $hi#h, said theory does not apply. &e islative po$ers

!ay be dele ated to lo#al overn!ents in respe#t of !atters of lo#al #on#ern. 7 /his is san#tioned by i!!e!orial pra#ti#e. , By ne#essary i!pli#ation, the le islative po$er to #reate politi#al #orporations for purposes of lo#al self- overn!ent #arries $ith it the po$er to #onfer on su#h lo#al overn!ental a en#ies the po$er to ta-. 9 :nder the +e$ Constitution, lo#al overn!ents are ranted the autono!ous authority to #reate their o$n sour#es of revenue and to levy ta-es. 'e#tion 1, *rti#le =" provides> 27a#h lo#al overn!ent unit shall have the po$er to #reate its sour#es of revenue and to levy ta-es, sub%e#t to su#h li!itations as !ay be provided by la$.2 ?ithal, it #annot be said that 'e#tion ( of )epubli# *#t +o. ((64 e!anated fro! beyond the sphere of the le islative po$er to ena#t and vest in lo#al overn!ents the po$er of lo#al ta-ation. /he plenary nature of the ta-in po$er thus dele ated, #ontrary to plaintiff-appellant;s pretense, $ould not suffi#e to invalidate the said la$ as #onfis#atory and oppressive. "n dele atin the authority, the 'tate is not li!ited 6 the e-a#t !easure of that $hi#h is e-er#ised by itself. ?hen it is said that the ta-in po$er !ay be dele ated to !uni#ipalities and the li,e, it is !eant that there !ay be dele ated su#h !easure of po$er to i!pose and #olle#t ta-es as the le islature !ay dee! e-pedient. /hus, !uni#ipalities !ay be per!itted to ta- sub%e#ts $hi#h for reasons of publi# poli#y the 'tate has not dee!ed $ise to ta- for !ore eneral purposes. 1- /his is not to say thou h that the #onstitutional in%un#tion a ainst deprivation of property $ithout due pro#ess of la$ !ay be passed over under the uise of the ta-in po$er, e-#ept $hen the ta,in of the property is in the la$ful e-er#ise of the ta-in po$er, as $hen 315 the ta- is for a publi# purpose@ 3(5 the rule on unifor!ity of ta-ation is observed@ 335 either the person or property ta-ed is $ithin the %urisdi#tion of the overn!ent levyin the ta-@ and 345 in the assess!ent and #olle#tion of #ertain ,inds of ta-es noti#e and opportunity for hearin are provided. 11 Aue pro#ess is usually violated $here the ta- i!posed is for a private as distin uished fro! a publi# purpose@ a ta- is i!posed on property outside the 'tate, i.e., e-traterritorial ta-ation@ and arbitrary or oppressive !ethods are used in assessin and #olle#tin ta-es. But, a ta- does not violate the due pro#ess #lause, as applied to a parti#ular ta-payer, althou h the purpose of the ta- $ill result in an in%ury rather than a benefit to su#h ta-payer. Aue pro#ess does not reBuire that the property sub%e#t to the ta- or the a!ount of ta- to be raised should be deter!ined by %udi#ial inBuiry, and a noti#e and hearin as to the a!ount of the ta- and the !anner in $hi#h it shall be apportioned are enerally not ne#essary to due pro#ess of la$. 12 /here is no validity to the assertion that the dele ated authority #an be de#lared un#onstitutional on the theory of double ta-ation. "t !ust be observed that the dele atin authority spe#ifies the li!itations and enu!erates the ta-es over $hi#h lo#al ta-ation !ay not be e-er#ised. 13 /he reason is that the 'tate has e-#lusively reserved the sa!e for its o$n prero ative. 0oreover, double ta-ation, in eneral, is not forbidden by our funda!ental la$, sin#e ?e have not adopted as part thereof the in%un#tion a ainst double ta-ation found in the Constitution of the :nited 'tates and so!e states of the :nion. 1) Aouble ta-ation be#o!es obno-ious only $here the ta-payer is ta-ed t$i#e for the benefit of the sa!e overn!ental entity 15 or by the sa!e %urisdi#tion for the sa!e purpose, 16 but not in a #ase $here one ta- is i!posed by the 'tate and the other by the #ity or !uni#ipality. 17