Vera v.

Cuevas (1979)

Doctrine: With the repeal of Sec. 141 and 177, Tax Code, Sec. 169 has lost its tax purpose. As
such, the CIR has lost his authority to enforce the same. The CIR contends that he still has
jurisdiction to enforce Sec. 169 by virtue of Sec. 3, Tax Code which provides that the BIR shall
also give “effect to and administer the supervisory and police power conferred to it by this Code
or other laws”. The SC said that this is untenable. The enforcement of Sec. 169 entails the
promotion of health of the nation and is thus unconnected with any tax purpose. This is the
exclusive function of the Food and Drug Administration of the DOH, as provided for in RA 3720.
This clearly show that CIR and FTB are without jurisdiction to investigate and to prosecute
alleged misbranding, mislabeling, and/or misleading advertisements of filled milk. The
jurisdiction on matters cited is vested upon the Board of Food and Drug inspection and the Food
and Drug Administrator, with the Sec. of Health, and Sec. of Justice. To hold that CIR and FTB
also have jurisdiction would only cause overlapping of powers and functions likely to produce
confusion and conflict of official action which is neither practical nor desirable

Summary: The CIR sought the enforcement of Sec. 169, Tax Code which requires a specific label
to be printed on the containers of skimmed milk products, against filled milk manufacturers.
The latter petitioned for declaratory relief for the adjudication of their respective rights and
obligations in relation to the enforcement of Sec. 169. They also filed a special civil action to
abate the prosecution of a complaint against them lodged before the Fair Trade Board (FTB),
pending determination of their declaratory relief. The CFI ruled for the Filled Milk
Manufacturers. The SC affirmed in toto. It held that Sec. 169 was impliedly repealed and
therefore has lost any tax purpose. As such, the enforcement of Sec. 169 is now a matter of
health promotion, outside the jurisdiction of CIR and the FTB. Rather, it falls under the
jurisdiction of the Board of Food and Drugs Inspection, of the DOH. (NOTE: A repeal of the tax
law means that the law has lost its tax purpose and, devoid of said purpose, the CIR necessarily
lost his authority to enforce it.)

Issue: W/N Commissioner has lost authority to enforce Sec. 141 & 177?

Ruling: Yes. With the repeal of Sections 141 and 177 Tax Code, Section 169 has lost its tax
purpose. Since Section 169 is devoid of any tax purpose, Commissioner necessarily lost his
authority to enforce the same. This was so held by his predecessor immediately after Sections
141 and 177 were repealed in General Circular No. V-85 as stated in par. IX of the Partial
Stipulation of facts entered into by the parties, to wit:

As the act of sewing skimmed milk without first paying the specific tax thereon is no longer
unlawful and the enforcement of the requirement in regard to the placing of the proper legend
on its immediate containers is a subject which does not come within the jurisdiction of the BIR,
the penal provisions of Section 177 Tax Code having been repealed by RA 463.