[ G.R. No. 123061. January 19, 2000]

PLACIDO O. URBANES, JR., vs. HON. RODOLFO A. ORTIZ, et al.

FIRST DIVISION

Gentlemen:

Quoted hereunder, for your information, is a resolution of this Court dated JAN 19 2000.

G.R. No. 123061 (Placido O. Urbanes, Jr., Operating under the name and style of Catalina Security Agency, a single proprietorship vs. Hon. Rodolfo A. Ortiz, Branch 89, Quezon City, Hon. Roberto F. de Ocampo, in his capacity as Secretary of Finance, and Hon. Liwayway Vinzons-Chato, as Commissioner of Internal Revenue.)

Before this Court is a petition for certiorari assailing the decision1 Rendered by Judge Rodolfo A. Ortiz on September 21, 1995. Rollo, pp. 43-19. of Regional Trial Court, Quezon City, Branch 89, dismissing the petition for declaratory relief seeking the nullification of Section 5, Republic Act No. 7496,2 An Act Adopting the Simplified Net Income Taxation Scheme for the Self-Employed and Professional Engaged in the Practice of their Profession. for being unconstitutional.

Petitioner Placido O. Urbanes, Jr., owned and operated a security agency, Catalina Security Agency, a single proprietorship.

On May 15, 1992, Congress enacted Republic Act No. 7496, otherwise known as "An act Adopting the Simplified Net Income Taxation Scheme for the Self-Employed and Professional Engaged in the Practice of their Profession, amending Sections 21 and 29 of the National Internal Revenue Code (SNITS)." Republic Act No. 7496 addresses two sets of taxpayers: (1) the self-employed and (2) the professionals. The law limited the allowable deductions from the gross income of the said taxpayers to the direct costs enumerated therein.

On January 20, 1993, the Secretary of Finance promulgated Revenue Regulations No. 2-93 to implement provisions of Republic Act No. 7496.

On December 13, 1994, petitioner filed with the Regional Trial Court, Branch 89, Quezon City, a petition for declaratory relief, with prayer for the issuance of temporary restraining order/ preliminary injunction,3 Docketed as Civil Case No. Q- 94-22416. seeking to declare the law unconstitutional, stating that it violated his rights to due process and equal protection of law, as well as the rule that taxation shall be uniform and equitable.

On September 21, 1995, the trial court rendered a decision dismissing the petition. The trial court ruled that the present petition has become moot and academic since the issues alleged and relief prayed for by petitioner have been decided by the Supreme Court in Tan v. Del Rosario, et al.4 237 SCRA 324 (1994).

Hence, this petition.

Petitioner contends that Section 5 of Republic Act No. 7496 which limits the allowable deductions from the gross income of self-employed taxpayers to direct costs enumerated therein is arbitrary, unreasonable and harsh, tantamount to deprivation of property without due process of law. Petitioner further submits that Republic Act No. 7496 is discriminatory and inequitable as it considers single proprietors apart from small corporations, which enjoy all deductions allowable under Section 21 of the National Internal Revenue Code, in violation of the equal protection clause.

On January 24, 1996, we required respondents to comment on the petition. On February 28, 1996, the Solicitor General filed its comment and/or motion to dismiss the petition for lack of merit.

Significantly, on January 1, 1998, Republic Act No. 84245 National Internal Revenue Code of 1997. took effect. Republic Act No. 8424 has deleted the provision on the Simplified Net Income Taxation Scheme applicable for self-employed and professionals.

On August 23, 1999, we gave due course to the petition and required the parties to file their memoranda.6 Rollo, p. 232. The parties have complied.

We deny the petition.

We have declared Republic Act No. 7496 as constitutional in Tan vs. Del Rosario, supra. We ruled that Republic Act No. 7496 does not violate the constitutional provisions on uniformity of taxation and due process clause. Petitioner maintains that he is not bound by the declaration in the Tan case as he differs from the petitioners therein as the latter are mainly professional, whereas he is a single proprietor, who incur basically the same expenses as small corporations. We disagree. Republic Act No. 7496 addresses two sets of taxpayers: 1) the self-employed, like petitioner; and 2) professionals, like petitioners in the Tan case. Petitioner primarily questions the wisdom of the law, which is properly within the ambit of legislative discretion. Congress has the power to determine the nature, object, extent, coverage and situs of taxation. Consequently, the statute affects both sets of taxpayers.

This petition has been rendered moot by the passage of Republic Act No. 8424 which deleted the provisions on SNITS.

WHEREFORE, the Court DISMISSES the petition, without costs.

Davide, Jr., C.J., no part.

Very truly yours,

(Sgd.) VIRGINIA ANCHETA-SORIANO

Clerk of Court


Back to Home | Back to Main

 

CLICK HERE FOR THE LATEST SUPREME COURT JURISPRUDENCE

PHILIPPINE SUPREME COURT DECISIONS

QUICK SEARCH

cralaw

 







chanrobles.com





ChanRobles Legal Resources:

ChanRobles On-Line Bar Review

ChanRobles Internet Bar Review : www.chanroblesbar.com

ChanRobles MCLE On-line

ChanRobles Lawnet Inc. - ChanRobles MCLE On-line : www.chanroblesmcleonline.com