Yarisantos, Aileen Mae U.

Psych- 2A
Case Analysis
Instructions: Read and understand the cases provided and answer the following questions:
A. Renato Peralta vs. Philippines Postal Office (G.R. No. 223395)
1. Who are the parties in the case?
Complainant/ Petitioner:
Renato V. Peralta

Respondents:
Philippine Postal Corporation (PhilPost)

Represented by, Ma. Josefina Dela Cruz

Postmaster General and Chief Executive Officer

Board of Directors of PhilPost represented by Cesar N. Sarino

Chairman

2. What is the complaint/case is all about?

The alleged printing and issuance of the INC commemorative stamp involved a
disbursement of funds and violated Section 29(2) of Article VI [6] of the 1987 Philippine
Constitution. The complainant also argued that the respondents' act of releasing the said stamps
was unconstitutional because it was tantamount to the sponsorship of religious activity; it violated
the separation of the Church and the State and the non-establishment of religion clause.

3. What is/are practice/s involve in this case?

The printing, issuance and distribution of the INC commemorative centennial stamps.

4. What is/are the allegation/s of the complainant/petitioner?

(1) The violation of Section 29(2) of Article VI [6] of the 1987 Philippine Constitution; (2) the
separation of the Church and the State; and (3) the non-establishment of religion clause.

5. What are the defenses made by the Philippine Postal Office?

The Respondents, Philippine Postal Office, maintained their answer that there is no public
funds were disbursed in the printing of the INC commemorative stamps. They alleged that there
was a Memorandum of Agreement (MOA) dated May 7, 2014, executed between PhilPost and
INC, where it was provided that the costs of printing will be borne by INC. They claimed that the
proceeds of the sale of the stamps will not redound to the sole benefit of INC. The printing,
according to them, is part of PhilPost's philatelic products, which will promote tourism in the country
because it will attract people from all over the world. They maintained that any sectarian benefit to
the INC is merely incidental. As to the petitioner's prayer for injunctive relief, respondents
contended that the petitioner failed to demonstrate irreparable injury and that he cannot seek to
restrain the printing and distribution of the stamps as these were already printed before the filing of
the complaint.
6. What are the constitutional provisions/principles mentioned in this case?
(1) Article II [2], Declaration of Principles and State Policies Principles Section 6 , the separation of
Church and State shall be inviolable.
(2) Article III [3], Bill of Rights Section 5, No law shall be made respecting an establishment of
religion or prohibiting the free exercise thereof. The free exercise and enjoyment of religious
profession and worship, without discrimination or preference, shall forever be allowed. No
religious test shall be required for the exercise of civil or political rights 
(3) Article VI [6]. The Legislative Department Section 29 (2), No public money or property shall be
appropriated, applied, paid, or employed, directly or indirectly, for the use, benefit, or support of
any sect, church, denomination, sectarian institution, or system of religion, or of any priest,
preacher, minister, other religious teachers, or dignitary as such, except when such priest,
preacher, minister, or dignitary is assigned to the armed forces, or to any penal institution, or
government orphanage or leprosarium.

7. What is/are the issues that the Supreme Court should resolve in this case?
(1) The non-establishment of religion clause is not equivalent to indifference to religion
(2) The alleged violation of Section 29 (2) of Article VI of the 1987 Constitution.
(3) The separation of Church and State. 

8. How the Supreme Court decided the case?

Supreme Court denied the complaint and affirms the July 24, 2015 Decision, as well as
the March 8, 2016 Resolution, of the Court of Appeals, in CA-G.R. CV No. 103151.
B. Commission of Internal Revenue vs. St. Luke's Medical Center (G.R. No. 195909)
1. Who are the parties in the case?
G.R. No. 195909
Petitioner: Commissioner of Internal Revenue
Respondent: St. Luke’s Medical Center, INC.,

G.R. No. 195960

Petitioner: St. Luke’s Medical Center, INC.,
Respondent: Commissioner of Internal Revenue

2. What is this case is all about?

The sole issue of whether the enactment of Section 27(B) takes proprietary non-profit
hospitals out of the income tax exemption under Section 30 of the NIRC and instead, imposes a
preferential rate of 10% on their taxable income.

3. How much tax deficiency involved in this case?

St. Luke's deficiency taxes amounting to ₱76,063,116.06 for 1998, comprised of
deficiency income tax, value-added tax, withholding tax on compensation and expanded
withholding tax.

4. What are the defenses used by the St. Luke's Medical Center?
St. Luke's contended that the BIR should not consider its total revenues, because its free
services to patients was ₱218,187,498 or 65.20% of its 1998 operating income (i.e., total revenues
less operating expenses) of ₱334,642,615. St. Luke's also claimed that its income does not inure
to the benefit of any individual.
St. Luke's maintained that it is a non-stock and non-profit institution for charitable and
social welfare purposes 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.

5. What are the constitutional provisions/principles mentioned in this case?

(1) Article VI [6], The Legislative Department Section 28 (3), Charitable institutions, churches and
parsonages or convents appurtenant thereto, mosques, non-profit cemeteries, and all lands,
buildings, and improvements, actually, directly, and exclusively used for religious, charitable, or
educational purposes shall be exempt from taxation.
(2) National Internal Revenue Code Section 27 (B), Proprietary Educational Institutions and
Hospitals.
(3) National Internal Revenue Code Section 30 (E)

6. What are the issues that the Supreme Court should resolve in this case?
The Supreme Court should resolve whether St. Luke's is responsible 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.

7. How the Supreme Court decide the case?

The petition of the Commissioner of Internal Revenue in G.R. No. 195909 is PARTLY GRANTED.
The Decision of the Court of Tax Appeals En Banc dated 19 November 2010 and its Resolution
dated 1 March 2011 in CTA Case No. 6746 are MODIFIED. St. Luke's Medical Center, Inc. is
ORDERED TO PAY the deficiency income tax in 1998 based on the 10% preferential income tax
rate under Section 27(B) 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.

The petition of St. Luke's Medical Center, Inc. in G.R. No. 195960 is DENIED for violating Section
1, Rule 45 of the Rules of Court.