DELA CRUZ, MARY JULIEANNE DR.

Constitutional Law I – JD – 1D
Submitted to: Atty. Paul Gerard R. Briones

CASE TITLE: Carlos Superdrug Corp., et al., vs. DSWD, et al.

GR NUMBER AND DATE: G.R. No. 166494, June 29, 2007
PONENTE: J. Azcuna

Bar Exam Question:

Republic Act No. 7432, also known as the Senior Citizen’s Act was created
to give consideration and aid to the elderly, underprivileged, sick and disabled as a
way to ease their burdens of everyday costs. Republic Act No. 9257 was enacted to
expand to this purpose, amending provisions of the previous law to better aid and
serve the elderly and retired through easing their burden costs in the utilization of
everyday goods and services. The present case implies the three inherent powers of
the State: Taxation, Police Power and Eminent Domain. Specifically, how the
imposition of the 20% discount for all Senior Citizens to all medicines; branded or
generic; prescribed or not, is the act of taking private property without just
compensation. However, Congress has issued that to compensate for the loss in
profits, tax deductions are put in place to maintain steady business for these
drugstore owners. Are the petitioners correct? Why or Why not? Explain briefly.
Answer:
The petitioners are incorrect. The imposition of the 20% discount, which is
thus compensated by the tax reduction scheme, is not an exercise of eminent
domain but an exercise of taxation power. While drugstore owners allege the
discount would considerably force the prices of their goods to a 5% mark-up
increase, the tax deduction scheme was made to balance the loss on their behalf.
The State has the power to impose taxes on establishments, but it may also reduce
such impositions to promote a fair and just system of business. While it may not
compensate the loss in profits of fair value, it is still a considerable relief on the
part of the drugstore owners to still adhere to what is stated in the law and still
maintain steady business operations.