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BELLOSILLO, J., concurring and dissenting:

I am in full accord with the conclusion of the majority that the trial court committed no grave abuse of discretion in issuing the assailed injunctive writs. But I am constrained to dissent insofar as it finds that there was "selective prosecution" in charging private respondents.

Let me first touch on "selective prosecution." There is no showing that petitioner Commissioner of Internal Revenue is not going after others who may be suspected of being big tax evaders and that only private respondents are being prosecuted, or even merely investigated, for tax evasion.

As pointed out by the Solicitor General, assuming ex hypothesi that other corporate manufacturers are guilty of using similar schemes for tax evasion, the proper remedy is not the dismissal of the complaints against private respondents, but the prosecution of other similar evaders. In this regard, in the absence of willful or malicious prosecution, or so-called "selective prosecution," the choice on whom to prosecute ahead of the others belongs legitimately, and rightly so, to the public prosecutors.

But, I share the view of the majority that the trial court did not commit grave abuse of discretion amounting to lack of jurisdiction. At once it must be pointed out that the trial court merely issued writs of preliminary injunction. However to grant the prayer of herein petitioners would effectively dismiss the petition for certiorari and prohibition filed by private respondents with the trial court even before the issues in the main case could be joined, which seems to me to be a procedural lapse since the main case is already being resolved when the only issue before the Court is the propriety of the ancillary or provisional remedy.

The trial court granted the writs of preliminary injunction upon finding, after hearing for the purpose, that private respondents sufficiently established that "they are entitled to certain constitutional rights and that these rights have been violated,"1 and that they have complied with the requirements of Sec. 3, Rule 58, Rules of Court.2 In support of its conclusion, the trial court enumerated its reasons: first, inspite of the motion of respondent Fortune Tobacco Corporation, petitioner Commissioner of Internal Revenue failed to present the "daily manufacturers sworn statements submitted to the BIR by the taxpayer," supposedly stating that the total taxable sales of respondent Corporation for the year 1992 is P 16,686,372,295.00, which is the basis of petitioner Commissioners allegation that private respondents failed to pay the correct taxes since it declared in its VAT returns that its total taxable sales in 1992 was only P 11,736,658.580.00; second, the proper application of Sec. 142, par. (c), of the National Internal Revenue Code is a prejudicial question which must first be resolved by the Court of Tax Appeals to determine whether a tax liability which is an essential element of tax evasion exists before criminal proceedings may be pursued; third , from the evidence submitted, it appears that the Bureau of Internal Revenue has not yet made a final determination of the tax liability of private respondents with respect to its ad valorem, value added and income taxes for 1992; and, fourth, the precipitate issuance by the prosecutors of subpoenas to private respondents one (1) day after the filing of the complaint, consisting of about 600 pages, inclusive of the 14-page complaint, 17-page joint affidavit of eight (8) revenue officers and the annexes attached thereto, and their hasty denial of private respondents 135-page motion to dismiss, after a recess of only about 20 minutes, show that private respondents constitutional rights may have been violated.

These circumstances as well as the other traces of discrimination mentioned by the trial court, i.e., the announcement by the PCGG that it would take over the various corporations associated with respondent Lucio C. Tan; the creation of the Task Force on Revenue Cases among the functions of which is to "[i]nvestigate the tax liabilities of manufacturers that engage in well-known tax evasion schemes, such as selling products through dummy marketing companies to evade the payment of the correct internal revenue taxes," the very charge against respondent Tan; the reclassification of respondent corporations best selling cigarettes as foreign brands thereby imposing upon them a higher tax rate that would price them out of the market without notice and hearing; the singling out of private respondents as subjects of a complaint for tax evasion when other cigarette manufacturers have been using the same basis private respondents are using in paying ad valorem, value added and income taxes; and, the failure of petitioner Commissioner to wait for the expiration of the 30-day period she herself gave to private respondents to pay the supposed tax deficiencies before the filing of the complaint, obviously impelled the trial court to issue the writ of preliminary injunction. Practically the same grounds were found by the trial court when it provisionally restrained the investigation of the two (2) other complaints, i.e, tax evasion complaints for FYs 1990 and 1991.

On the basis of the findings of the trial court, it indeed appears that private respondents constitutional rights to due process of law and equal protection of the laws may have been for the moment set aside, if not outright violated. The trial court was convinced that the tell-tale signs of malice and partiality were indications that the constitutional rights of private respondents may not have been afforded adequate protection. Accordingly I see no manifest abuse, much less grave, on the part of the trial court in issuing the injunctive writs. Thus it is my opinion that the trial court did not commit grave abuse of discretion in granting the assailed writs.

Well entrenched is the rule that the issuance of the writ of preliminary injunction as an ancillary or preventive remedy to secure the rights of a party in a pending case rests upon the sound discretion of the court hearing it. The exercise of sound judicial discretion by the trial court in injunctive matters should not be interfered with except in case of manifest abuse,3 which is not true in the case before us. Equally well settled is that under Sec. 7, Rule 58, Rules of Court,4 a wide latitude is given to the trial court.5 This is because the conflicting claims in an application for a provisional writ more often than not involves a factual determination which is not the function of this Court, or even respondent appellate court. Thus in the case at bar the ascertainment of the actual tax liability, if any, based on the evidence already presented and still to be presented, is more within the competence of the trial court before which the parties have raised the very same issue in the main case. The truth or falsity of the divergent statements that there was deliberate haste in issuing the subpoenas and in denying private respondents motion to dismiss may be confirmed not by this Court but by the trial court during that hearing on the merits.

In fine, no grave abuse of discretion can be attributed to a judge or body in the issuance of a writ of preliminary injunction where a party was not deprived of its day in court as it was heard and had exhaustively presented all its arguments and defenses.6 It is undisputed that in the case before us petitioners and private respondents were given sufficient time and opportunity to present their respective pieces of evidence as well as arguments in support of their positions.

Consequently, I concur with the finding of the majority that the trial court committed no grave abuse of discretion. As respondent appellate court said, "[g]rave abuse of discretion as a ground for issuance of writs of certiorari and prohibition implies capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction, or where the power is exercised in an arbitrary or despotic manner by reason of passion, prejudice or personal hostility amounting to an evasion of positive duty or to a virtual refusal to perform the duty enjoined, or to act at all in contemplation of law.7 For such writs to lie there must be capricious, arbitrary and whimsical exercise of power, the very antithesis of the judicial prerogative in accordance with centuries of both civil and common law traditions." 8 The trial court, to my mind, is not guilty of any of these. Thus I accord respect to the exercise of the trial courts sound judicial discretion and hold that the same should not be interfered with.

To permanently enjoin the trial court from proceeding in any manner in Civil Case No. Q-94-19790 and allow the preliminary investigation of the complaints docketed as I.S. Nos. 93-508, 93-17942 and 93-584 with the Department of Justice to resume until their final conclusion and completion would go against the prevailing rule that courts should avoid issuing a writ or preliminary injunction which would in effect dispose of the main case without trial.9 Due process considerations dictate that the assailed injunctive writs are not judgments on the merits but merely orders for the grant of a provisional and ancillary remedy to preserve the status quo until the merits of the case can be heard. The hearing on the application for issuance of a writ of preliminary injunction is separate and distinct from the trial on the merits of the main case. The quantum of evidence required for one is different from that for the other, so that it does not necessarily follow that if the court grants and issues the temporary writ applied for the same court will now have to rule in favor of the petition for prohibition and ipso facto make the provisional injunction permanent.

If grave abuse of discretion attended the issuance of the writ of preliminary injunction, then by all means nullify the abusive act but only that. The main case should be allowed to proceed according to due process. The trial court should receive the evidence from the contending parties, weigh and evaluate the same and then make its findings. Clearly, the dismissal of the main case as a result of a mere incident relative to the issuance of an ancillary writ is procedurally awkward and violates due process, as it deprives private respondents of their right to present their case in court and support it with its evidence.

In resolving the fundamental issue at hand, i.e., whether the trial court committed grave abuse of discretion in issuing the subject writs of preliminary injunction, we cannot avoid balancing on the scales the power of the State to tax and its inherent right to prosecute perceived transgressors of the law on one side, and the constitutional rights of a citizen to due process of law and the equal protection of the laws on the other. Obviously the scales must tilt in favor of the individual, for a citizens right is amply protected by the Bill of Rights of the Constitution. Thus while "taxes are the lifeblood of the government," the power to tax has its limits, inspite of all its plenitude. Hence in Commissioner of Internal Revenue v. Algae, Inc., 10 we said -

Taxes are the lifeblood of the government and so should be collected without unnecessary hindrance. On the other hand, such collection should be made in accordance with law as any arbitrariness will negate the very reason for government itself. It is therefore necessary to reconcile the apparently conflicting interests of the authorities and the taxpayers so that the real purpose of taxation, which is the promotion of the common good, may be achieved.

xxx xxx xxx

It is said that taxes are what we pay for civilized society. Without taxes, the government would be paralyzed for the lack of the motive power to activate and operate it. Hence, despite the natural reluctance to surrender part of ones hard-earned income to taxing authorities, every person who is able to must contribute his share in the running of the government. The government for its part is expected to respond in the form of tangible and intangible benefits intended to improve the lives of the people and enhance their moral and material values. This symbiotic relationship is the rationale of taxation and should dispel the erroneous notion that it is an arbitrary method of exaction by those in the seat of power.

But even as we concede the inevitability and indispensability of taxation, it is a requirement in all democratic regimes that it be exercised reasonably and in accordance with the prescribed procedure. If it is not, then the taxpayer has a right to complain and the courts will then come to his succor. For all the awesome power of the tax collector, he may still be stopped in his tracks if the taxpayer can demonstrate x x x that the law has not been observed.

In the instant case, it seems that due to the overzealousness in collecting taxes from private respondents and to some accident of immediate overwhelming interest which distressingly impassions and distorts judgment, the State has unwittingly ignored the citizens constitutional rights. Thus even the rule that injunction will not lie to prevent a criminal prosecution has admitted exceptions, which we enumerated in Brocka v. Enrile 11 and in Ocampo IV v. Ombudsman 12 (a) to afford adequate protection to the constitutional rights of the accused; (b) when necessary for the orderly administration of justice or to avoid oppression or multiplicity of actions; (c) when there is a prejudicial question which is sub-judice; (d) when the acts of the officer are without or in excess of authority; (e) where the prosecution is under an invalid law, ordinance or regulation; (f) when double jeopardy is clearly apparent; (g) when the court has no jurisdiction over the offense; (h) where it is a case of persecution rather than prosecution; (i) where the charges are manifestly false and motivated by lust for vengeance; (j) when there is clearly no prima facie case against the accused and a motion to quash on that ground has been denied; and, (k) to prevent a threatened unlawful arrest.

Finally, courts indeed should not hesitate to invoke the constitutional guarantees to give adequate protection to the citizens when faced with the enormous powers of the State, even when what is in issue are only provisional remedies, as in the case at hand. In days of great pressure, it is alluring to take short cuts by borrowing dictatorial techniques. But when we do, we set in motion an arbitrary or subversive influence by our own design which destroys us from within. Let not the present case dangerously sway towards that trend.

For all the foregoing, I vote to dismiss the instant petition for lack of merit, and to order the trial court to proceed with Civil Case No. Q-94-19790 with reasonable dispatch.