1. Grosjean vs. American Press, 297 U.S.

233

FACTS:

Plaintiffs, nine publishers of newspapers in the State of Louisiana, brought an action

to enjoin enforcement of La. Act No. 23 (1934), which imposed a tax on advertisements
in publications that had a large circulation. The trial court entered a decree that
permanently enjoined the collection of the tax on newspapers. Defendant Grosjean, the
accounts supervisor for the state of Louisiana, then sought review.

ISSUE:

WON La. Act No. 23 (1934) violate the freedom of the press under the First
Amendment?

HELD:
YES. La. Act No. 23 (1934) states that every person, firm, association, or
corporation, domestic or foreign, engaged in the business of selling, or making any charge
for, advertising or for advertisements, whether printed or published, or to be printed or
published, in any newspaper, magazine, periodical or publication whatever having a
circulation of more than 20,000 copies per week, or displayed and exhibited, or to be
displayed and exhibited by means of moving pictures, in the state of Louisiana, shall, in
addition to all other taxes and licenses levied and assessed in this state, pay a license
tax for the privilege of engaging in such business in this state of two percent of the gross
receipts of such business.

The United States Supreme Court found that the tax violated the freedom of the
press under the First Amendment. The Court determined that the newspaper publishers
were all corporations and, as such, were "persons" within the meaning of the Equal
Protection and the Due Process of Law Clauses. The Court found that the tax curtailed
the amount of revenue from advertising and tended to restrict newspaper circulation.
2. SILVESTER M. PUNSALAN, ET AL., plaintiffs-appellants,
vs. THE MUNICIPAL BOARD OF THE CITY OF MANILA, ET AL., defendants-
appellants.

FACTS:

This suit was commenced in the Court of First Instance of Manila by two lawyers,
a medical practitioner, a public accountant, a dental surgeon and a pharmacist,
purportedly "in their own behalf and in behalf of other professionals practicing in the
City of Manila who may desire to join it." Object of the suit is the annulment of
Ordinance No. 3398 of the City of Manila together with the provision of the Manila
charter authorizing it and the refund of taxes collected under the ordinance but paid
under protest.
The ordinance in question, which was approved by the municipal board of the City
of Manila on July 25, 1950, imposes a municipal occupation tax on persons exercising
various professions in the city and penalizes non-payment of the tax "by a fine of not
more than two hundred pesos or by imprisonment of not more than six months, or by
both such fine and imprisonment in the discretion of the court." Among the professions
taxed were those to which plaintiffs belong.

ISSUE:

Whether or not the ordinance and the law authorizing it are unjust and oppressive
and authorize what amounts to double taxation?

Held:

NO. The Court ruled that plaintiffs make a distinction that is not found in the
ordinance. What constitutes exercise or pursuit of a profession in the city is a matter
of judicial determination. The argument against double taxation may not be invoked
where one tax is imposed by the state and the other is imposed by the CITY, it being
widely recognized that there is nothing inherently obnoxious in the requirement that
license fees or taxes be exacted with respect to the same occupation, calling or activity
by both the state and the political subdivisions thereof.

In view of the foregoing, the judgment appealed from is reversed in so far as it

declares Ordinance No. 3398 of the City of Manila illegal and void and affirmed in so
far as it holds the validity of the provision of the Manila charter authorizing it. With
costs against plaintiffs-appellants.
 3. JOAQUIN DE VILLATA, petitioner,
vs. J.S. STANLEY, Acting Insular Collector of Customs, respondent.
32 Phil. 541

FACTS:
In the language of plaintiff's brief "This an application for a writ of prohibition
directed against the Collector of Customs and intended to restrain him from enforcing
against plaintiff the provisions of Customs Administrative Circular No. 627. The complaint
alleges that the plaintiff is the master of S.S. Vizcaya of the coastwise trade; that as such
captain, on July 6, 1912, when sailing from the port of Gubat to the port of Legaspi, P. I.,
he failed to notify the postmaster of the former port, in advance, of his intended sailing,
and therefore failed to carry the mails between said ports; that defendant is threatening
to suspend or revoke the license of plaintiff by reason of said facts, under and by virtue
of the terms of Customs Administrative Circular No. 627, to the great and irreparable
damage of plaintiff."

ISSUE:
 4. REV. FR. CASIMIRO LLADOC, petitioner,
vs. The COMMISSIONER OF INTERNAL REVENUE and The COURT of TAX
APPEALS, respondents.

FACTS:

Sometime in 1957, the M.B. Estate, Inc., of Bacolod City, donated P10,000.00 in cash to Rev. Fr.
Crispin Ruiz, then parish priest of Victorias, Negros Occidental, and predecessor of herein petitioner,
for the construction of a new Catholic Church in the locality. The total amount was actually spent for
the purpose intended.

Petitioner lodged a protest to the assessment and requested the withdrawal thereof. The protest
and the motion for reconsideration presented to the Commissioner of Internal Revenue were denied.
The petitioner appealed to the Court of Tax Appeals on November 2, 1960. In the petition for review,
the Rev. Fr. Casimiro Lladoc claimed, among others, that at the time of the donation, he was not the
parish priest in Victorias; that there is no legal entity or juridical person known as the "Catholic Parish
Priest of Victorias," and, therefore, he should not be liable for the donee's gift tax. It was also asserted
that the assessment of the gift tax, even against the Roman Catholic Church, would not be valid, for
such would be a clear violation of the provisions of the Constitution.

ISSUE:

Whether or not petitioner should be liable for the assessed donee's gift tax on the P10,000.00
donated for the construction of the Victorias Parish Church.?

HELD:

Section 22 (3), Art. VI of the Constitution of the Philippines, exempts from taxation
cemeteries, churches and parsonages or convents, appurtenant thereto, and all lands, buildings, and
improvements used exclusively for religious purposes. The exemption is only from the payment of
taxes assessed on such properties enumerated, as property taxes, as contra distinguished from excise
taxes. In the present case, what the Collector assessed was a donee's gift tax; the assessment was
not on the properties themselves. It did not rest upon general ownership; it was an excise upon the
use made of the properties, upon the exercise of the privilege of receiving the properties (Phipps vs.
Com. of Int. Rec. 91 F 2d 627). Manifestly, gift tax is not within the exempting provisions of the section
just mentioned. A gift tax is not a property tax, but an excise tax imposed on the transfer of property
by way of gift inter vivos, the imposition of which on property used exclusively for religious purposes,
does not constitute an impairment of the Constitution.

In view here of and considering that as heretofore stated, the assessment at bar had been
properly made and the imposition of the tax is not a violation of the constitutional provision exempting
churches, parsonages or convents, etc. (Art VI, sec. 22 [3], Constitution), the Head of the Diocese, to
which the parish Victorias Pertains, is liable for the payment thereof.
 5. CONGRESSMAN HERMILANDO I. MANDANAS
vs. Executive Secretary, GR No. 199802

FACTS:

One of the key features of the 1987 Constitution is its push towards
decentralization of government and local autonomy. Local autonomy has two facets, the
administrative and the fiscal. Fiscal autonomy means that local governments have the
power to create their own sources of revenue in addition to their equitable share in the
national taxes released by the National Government, as well as the power to allocate their
resources in accordance with their own priorities. Such autonomy is as indispensable to
the viability of the policy of decentralization as the other.
Implementing the constitutional mandate for decentralization and local autonomy,
Congress enacted Republic Act No. 7160, otherwise known as the Local Government
Code (LGC), in order to guarantee the fiscal autonomy of the LGUs by specifically
providing that:

SECTION 284. Allotment of Internal Revenue Taxes. — Local government units

shall have a share in the national internal revenue taxes based on the collection of the
third fiscal year preceding the current fiscal year as follows:
(a) On the first year of the effectivity of this Code, thirty percent (30%);

(b) On the second year, thirty-five percent (35%); and

(c) On the third year and thereafter, forty percent (40%).

ISSUE:

WON Congress exceeded the boundaries of its authority under the Constitution .
"internal revenue" in Section 284 of the LGC of 1991 as unconstitutional?

HELD:

YES. Declares the phrase “internal revenue’’ appearing in Section 284 of Republic
Act. No. 7160 (Local Government Code) Unconstitutional and deletes the phrase from
Section 284.
Art. X, sec. 6 of the Philippine Constitution states:
Section 6. Local government units shall have a just share, as determined by law, in the national
taxes which shall be automatically released to them.
The LGC provided a norm of interpretation in favor of the LGUs in its Section 5(a), to wit:
(a) Any provision on a power of a local government unit shall be liberally interpretated in
its favor, and in case of doubt, any question thereon shall be resolved in favor of
devolution of powers and of the local government unit. Any fair and reasonable doubt
as to the existence of the power shall be interpretated in favor of the local government
unit concerned.