September 2005 - Philippine Supreme Court Decisions/Resolutions
SEPARATE CONCURRING AND DISSENTING OPINION : DAVIDE, JR., C.J.: - G.R. No. 168056, G.R. NO. 168207, G.R. NO. 168461, G.R. NO. 168463 and G.R. NO. 168730 - ABAKADA Guro Party List Officers Samson S. Alcantara, et al. v. The Honorable Executive Secretary Eduardo Ermita, et al.
[G.R. NO. 168056 : September 01, 2005]
ABAKADA GURO PARTY LIST (FORMERLY AASJAS) OFFICERS SAMSON S. ALCANTARA AND ED VINCENT S. ALBANO, Petitioners, v. THE HONORABLE EXECUTIVE SECRETARY EDUARDO ERMITA; HONORABLE SECRETARY OF THE DEPARTMENT OF FINANCE CESAR PURISIMA; AND HONORABLE COMMISSIONER OF INTERNAL REVENUE GUILLERMO PARAYNO, JR., Respondents.
[G.R. NO. 168207]
AQUILINO Q. PIMENTEL, JR., LUISA P. EJERCITO-ESTRADA, JINGGOY E. ESTRADA, PANFILO M. LACSON, ALFREDO S. LIM, JAMBY A.S. MADRIGAL, AND SERGIO R. OSMEÑA III, Petitioners, v. EXECUTIVE SECRETARY EDUARDO R. ERMITA, CESAR V. PURISIMA, SECRETARY OF FINANCE, GUILLERMO L. PARAYNO, JR., COMMISSIONER OF THE BUREAU OF INTERNAL REVENUE, Respondents.
[G.R. NO. 168461]
ASSOCIATION OF PILIPINAS SHELL DEALERS, INC. REPRESENTED BY ITS PRESIDENT, ROSARIO ANTONIO; PETRON DEALERS' ASSOCIATION REPRESENTED BY ITS PRESIDENT, RUTH E. BARBIBI; ASSOCIATION OF CALTEX DEALERS' OF THE PHILIPPINES REPRESENTED BY ITS PRESIDENT, MERCEDITAS A. GARCIA; ROSARIO ANTONIO DOING BUSINESS UNDER THE NAME AND STYLE OF "ANB NORTH SHELL SERVICE STATION”; LOURDES MARTINEZ DOING BUSINESS UNDER THE NAME AND STYLE OF "SHELL GATE - N. DOMINGO”; BETHZAIDA TAN DOING BUSINESS UNDER THE NAME AND STYLE OF "ADVANCE SHELL STATION”; REYNALDO P. MONTOYA DOING BUSINESS UNDER THE NAME AND STYLE OF "NEW LAMUAN SHELL SERVICE STATION”; EFREN SOTTO DOING BUSINESS UNDER THE NAME AND STYLE OF "RED FIELD SHELL SERVICE STATION”; DONICA CORPORATION REPRESENTED BY ITS PRESIDENT, DESI TOMACRUZ; RUTH E. MARBIBI DOING BUSINESS UNDER THE NAME AND STYLE OF "R&R PETRON STATION”; PETER M. UNGSON DOING BUSINESS UNDER THE NAME AND STYLE OF "CLASSIC STAR GASOLINE SERVICE STATION”; MARIAN SHEILA A. LEE DOING BUSINESS UNDER THE NAME AND STYLE OF "NTE GASOLINE & SERVICE STATION”; JULIAN CESAR P. POSADAS DOING BUSINESS UNDER THE NAME AND STYLE OF "STARCARGA ENTERPRISES”; ADORACION MAÑEBO DOING BUSINESS UNDER THE NAME AND STYLE OF "CMA MOTORISTS CENTER”; SUSAN M. ENTRATA DOING BUSINESS UNDER THE NAME AND STYLE OF "LEONA'S GASOLINE STATION AND SERVICE CENTER”; CARMELITA BALDONADO DOING BUSINESS UNDER THE NAME AND STYLE OF "FIRST CHOICE SERVICE CENTER”; MERCEDITAS A. GARCIA DOING BUSINESS UNDER THE NAME AND STYLE OF "LORPED SERVICE CENTER”; RHEAMAR A. RAMOS DOING BUSINESS UNDER THE NAME AND STYLE OF "RJRAM PTT GAS STATION”; MA. ISABEL VIOLAGO DOING BUSINESS UNDER THE NAME AND STYLE OF "VIOLAGO-PTT SERVICE CENTER”; MOTORISTS' HEART CORPORATION REPRESENTED BY ITS VICE-PRESIDENT FOR OPERATIONS, JOSELITO F. FLORDELIZA; MOTORISTS' HARVARD CORPORATION REPRESENTED BY ITS VICE-PRESIDENT FOR OPERATIONS, JOSELITO F. FLORDELIZA; MOTORISTS' HERITAGE CORPORATION REPRESENTED BY ITS VICE-PRESIDENT FOR OPERATIONS, JOSELITO F. FLORDELIZA; PHILIPPINE STANDARD OIL CORPORATION REPRESENTED BY ITS VICE-PRESIDENT FOR OPERATIONS, JOSELITO F. FLORDELIZA; ROMEO MANUEL DOING BUSINESS UNDER THE NAME AND STYLE OF "ROMMAN GASOLINE STATION”; ANTHONY ALBERT CRUZ III DOING BUSINESS UNDER THE NAME AND STYLE OF "TRUE SERVICE STATION”, Petitioners, v. CESAR V. PURISIMA, IN HIS CAPACITY AS SECRETARY OF THE DEPARTMENT OF FINANCE AND GUILLERMO L. PARAYNO, JR., IN HIS CAPACITY AS COMMISSIONER OF INTERNAL REVENUE, Respondents.
[G.R. NO. 168463]
FRANCIS JOSEPH G. ESCUDERO, VINCENT CRISOLOGO, EMMANUEL JOEL J. VILLANUEVA, RODOLFO G. PLAZA, DARLENE ANTONINO-CUSTODIO, OSCAR G. MALAPITAN, BENJAMIN C. AGARAO, JR. JUAN EDGARDO M. ANGARA, JUSTIN MARC SB. CHIPECO, FLORENCIO G. NOEL, MUJIV S. HATAMAN, RENATO B. MAGTUBO, JOSEPH A. SANTIAGO, TEOFISTO DL. GUINGONA III, RUY ELIAS C. LOPEZ, RODOLFO Q. AGBAYANI AND TEODORO A. CASIÑO, Petitioners, v. CESAR V. PURISIMA, IN HIS CAPACITY AS SECRETARY OF FINANCE, GUILLERMO L. PARAYNO, JR., IN HIS CAPACITY AS COMMISSIONER OF INTERNAL REVENUE, AND EDUARDO R. ERMITA, IN HIS CAPACITY AS EXECUTIVE SECRETARY, Respondents.
[G.R. NO. 168730]
BATAAN GOVERNOR ENRIQUE T. GARCIA, JR., Petitioner, v. HON. EDUARDO R. ERMITA, IN HIS CAPACITY AS THE EXECUTIVE SECRETARY; HON. MARGARITO TEVES, IN HIS CAPACITY AS SECRETARY OF FINANCE; HON. JOSE MARIO BUNAG, IN HIS CAPACITY AS THE OIC COMMISSIONER OF THE BUREAU OF INTERNAL REVENUE; AND HON. ALEXANDER AREVALO, IN HIS CAPACITY AS THE OIC COMMISSIONER OF THE BUREAU OF CUSTOMS, Respondents.
DAVIDE, JR., C.J.:
While I still hold on to my position expressed in my dissenting opinion in the first VAT cases,1 I partly yield to the application to the cases at bar of the rule on "germaneness" therein enunciated. Thus, I concur with the ponencia of my highly-esteemed colleague Mme. Justice Ma. Alicia Austria-Martinez except as regards its ruling on the issue of whether Republic Act No. 9337 violates Section 24, Article VI of the Constitution.
R.A. No. 9337 primarily aims to restructure the value-added tax (VAT) system by broadening its base and raising the rate so as to generate more revenues for the government that can assuage the economic predicament that our country is now facing. This recently enacted law stemmed from three legislative bills: House Bill (HB) No. 3555, HB No. 3705, and Senate Bill (SB) 1950. The first (HB No. 3555) called for the amendment of Sections 106, 107, 108, 109, 110, and 111 of the National Internal Revenue Code (NIRC) as amended; while the second (HB No. 3705) proposed amendments to Sections 106, 107, 108, 110, and 114 of the NIRC, as amended. It is significant to note that all these Sections specifically deal with VAT. And indubitably, these bills are revenue bills in that they are intended to levy taxes and raise funds for the government.2
On the other hand, SB No. 1950 introduced amendments to "Sections 27, 28, 34, 106, 108, 109, 110, 111, 112, 113, 114, 116, 117, 118, 119, 125, 148, 236, 237, and 288" of the NIRC, as amended. Among the provisions sought to be amended, only Sections 106, 108, 109, 110, 111, 112, 113, 114, and 116 pertain to VAT. And while Sections 236, 237, and 288 are administrative provisions pertaining to registration requirements and issuance of receipts commercial invoices, the proposed amendments thereto are related to VAT. Hence, the proposed amendments to these Sections were validly taken cognizance of and properly considered by the Bicameral Conference Committee (BCC).
However, I am of the opinion that the inclusion into the law of the amendments proposed in SB No. 1950 to the following provisions (with modifications on the rates of taxes) is invalid.
Obviously, these provisions do not deal with VAT. It must be noted that the House Bills initiated amendments to provisions pertaining to VAT only. Doubtless, the Senate has the constitutional power to concur with the amendments to the VAT provisions introduced in the House Bills or even to propose its own version of VAT measure. But that power does not extend to initiation of other tax measures, such as introducing amendments to provisions on corporate income taxes, percentage taxes, franchise taxes, and excise taxes like what the Senate did in these cases. It was beyond the ambit of the authority of the Senate to propose amendments to provisions not covered by the House Bills or not related to the subject matter of the House Bills, which is VAT. To allow the Senate to do so would be tantamount to vesting in it the power to initiate revenue bills -- a power that exclusively pertains to the House of Representatives under Section 24, Article VI of the Constitution, which provides:
Provision Subject matter Section 27 Rate of income tax on domestic corporations Section 28(A)(1) Rate of income tax on resident foreign corporation Section 28(B)(1) Rate of income tax on non-resident foreign corporation Section 28(B)(5-b) Rate of income tax on intra-corporate dividends received by non-resident foreign corporation Section 34(B)(1) Deductions from gross income Section 117 Percentage tax on domestic carriers and keepers of garages Section 119 Tax on franchises Section 148 Excise tax on manufactured oils and other fuels
Sec. 24. All appropriation, revenue or tariff bills, bills authorizing increase of the public debt, bills of local application, and private bills shall originate exclusively in the House of Representatives but the Senate may propose or concur with amendments.Moreover, Sections 121 (Percentage Tax on Banks and Non-Bank Financial Intermediaries) and 151 (Excise Tax on Mineral Products) of the NIRC, as amended, have been included by the BCC in R.A. N0. 9337 even though they were not found in the Senate and House Bills.
In Philippine Judges Association v. Prado,3 the Court described the function of a conference committee in this wise: "A conference committee may deal generally with the subject matter or it may be limited to resolving the precise differences between the two houses. Even where the conference committee is not by rule limited in its jurisdiction, legislative custom severely limits the freedom with which new subject matter can be inserted into the conference bill.”
The limitation on the power of a conference committee to insert new provisions was laid down in Tolentino v. Secretary of Finance.4 There, the Court, while recognizing the power of a conference committee to include in its report an entirely new provision that is not found either in the House bill or in the Senate bill, held that the exercise of that power is subject to the condition that the said provision is "germane to the subject of the House and Senate bills.”
As pointed out by the petitioners, Tolentino differs from the present cases in the sense that in that case the amendments introduced in the Senate bill were on the same subject matter treated in the House bill, which was VAT, and the new provision inserted by the conference committee had relation to that subject matter. Specifically, HB No. 11197 called for the (1) amendment of Sections 99,100,102,103,104,105,106,107, 108, 110, 112,115, 116, 236,237, and 238 of the NIRC, as amended; and (2) repeal of Sections 113 and 114 of the NIRC, as amended. SB No. 1630, on the other hand, proposed the (1) amendment of Sections 99,100,102,103,104,105,107, 108, 110, 112, 236, 237, and 238 of the NIRC, as amended; and (2) repeal of Sections 113, 114, and 116 of the NIRC, as amended. In short, all the provisions sought to be changed in the Senate bill were covered in the House bill. Although the new provisions inserted by the conference committee were not found in either the House or Senate bills, they were germane to the general subject of the bills.
In the present cases, the provisions inserted by the BCC, namely, Sections 121 (Percentage Tax on Banks and Non-Bank Financial Intermediaries) and 151 (Excise Tax on Mineral Products) of the NIRC, as amended, are undoubtedly germane to SB No. 1950, which introduced amendments to the provisions on percentage and excise taxes -- but foreign to HB Nos. 3555 and 3705, which dealt with VAT only. Since the proposed amendments in the Senate bill relating to percentage and excise taxes cannot themselves be sustained because they did not take their root from, or are not related to the subject of, HB Nos. 3705 and 3555, in violation of Section 24, Article VI of the Constitution, the new provisions inserted by the BCC on percentage and excise taxes would have no leg to stand on.
I understand very well that the amendments of the Senate and the BCC relating to corporate income, percentage, franchise, and excise taxes were designed to "soften the impact of VAT measure on the consumer, i.e., by distributing the burden across all sectors instead of putting it entirely on the shoulders of the consumers" and to alleviate the country's financial problems by bringing more revenues for the government. However, these commendable intentions do not justify a deviation from the Constitution, which mandates that the initiative for filing revenue bills should come from the House of Representatives, not from the Senate. After all, these aims may still be realized by means of another bill that may later be initiated by the House of Representatives.
Therefore, I vote to declare R.A. No. 9337 as constitutional insofar as it amends provisions pertaining to VAT. However, I vote to declare as unconstitutional Sections 1, 2, 3, 14, 15, 16, 17, and 18 thereof which, respectively, amend Sections 27, 28, 34, 117, 119, 121, 148, and 151 of the NIRC, as amended because these amendments deal with subject matters which were not touched or covered by the bills emanating from the House of Representatives, thereby violating Section 24 of Article VI of the Constitution.
1 Tolentino v. Secretary of Finance, G.R. No. 115455, 25 August 1994, 235 SCRA 630, and companion cases.
2 SAGANI A. CRUZ, POLITICAL LAW 154 (2002 ed.) citing U.S. v. Nortorn, 91 U.S. 566.
3 G.R. No. 105371, 11 November 1993, 27 SCRA 703, 708, citing Davies, Legislative Law and Process: In a Nutshell 81 (1986 ed.)
4 Supra note 1.