Case Digest - Taxation

BENGZON VS. DRILON
G.R. 103524 April 15, 1992 208 SCRA 133
Gutierrez, J.:

FACTS:
Petitioners are retired justices of the Supreme Court and Court of Appeals who are currently receiving pensions under RA 910 as amended by RA 1797. President Marcos issued a decree repealing section 3-A of RA 1797 which authorized the adjustment of the pension of retired justices and officers and enlisted members of the AFP. PD 1638 was eventually issued by Marcos which provided for the automatic readjustment of the pension of officers and enlisted men was restored, while that of the retired justices was not. RA 1797 was restored through HB 16297 in 1990. When her advisers gave the wrong information that the questioned provisions in 1992 GAA were an attempt to overcome her earlier veto in 1990, President Aquino issued the veto now challenged in this petition.
It turns out that PD 644 which repealed RA 1797 never became a valid law absent its publication, thus there was no law. It follows that RA 1797 was still in effect and HB 16297 was superfluous because it tried to restore benefits which were never taken away validly. The veto of HB 16297 did not also produce any effect.
ISSUE:
Whether or not the veto of the President of certain provisions in the GAA of FY 1992 relating to the payment of the adjusted pensions of retired Justices is constitutional or valid.
RULING:
The veto of these specific provisions in the GAA is tantamount to dictating to the Judiciary ot its funds should be utilized, which is clearly repugnant to fiscal autonomy. Pursuant to constitutional mandate, the Judiciary must enjoy freedom in the disposition of the funds allocated to it in the appropriations law.
Any argument which seeks to remove special privileges given by law to former Justices on the ground that there should be no grant of distinct privileges or “preferential treatment” to retired Justices ignores these provisions of the Constitution and in effect asks that these Constitutional provisions on special protections for the Judiciary be repealed.
The petition is granted and the questioned veto is illegal and the provisions of 1992 GAA are declared valid and subsisting.

REYES VS. ALMANZOR
GR 43839-46 April 26, 1991 196 SCRA 322
Paras, J.:
FACTS:
Petitioner are owners of parcels of land leased to tenants. RA 6359 was enacted prohibiting for one year an increase in monthly rentals of dwelling units and said Act also disallowed ejectment of lessees upon the expiration of the usual period of lease. City assessor of Manila assessed the value of petitioner’s property based on the schedule of market values duly reviewed by the Secretary of Finance. The revision entailed an increase to the tax rates and petitioners averred that the reassessment imposed upon them greatly exceeded the annual income derived from their properties.
ISSUE:
Whether or not income approach is the method to be used in the tax assessment and not the comparable sales approach.
RULING:
By no stretch of the imagination can the market value of properties covered by PD 20 be equated with the market value of properties not so covered. In the case at bar, not even factors determinant of the assessed value of subject properties under the comparable sales approach were presented by respondent namely:
1. That the sale must represent a bonafide arm’s length transaction between a willing seller and a willing buyer
2. The property must be comparable property.
As a general rule, there were no takers so that there can be no reasonable basis for the conclusion that these properties are comparable.
Taxes are lifeblood of government, however, such collection should be made in accordance with the law and therefore necessary to reconcile conflicting interests of the authorities so that the real purpose of taxation, promotion of the welfare of common good can be achieved.

LLADOC V CIR & CTA
GR 19201 June 16, 1965 14 SCRA 293
Paredes, J.:

FACTS:
MB Estate of Bacolod City donated Php 10,000 in cash to Fr. Ruiz, then the Parish Priest of Victorias, who was the predecessor of petitioner. MB Estate filed their donor’s gift tax but petitioner is on protest regarding donee’s tax claiming that assessment of gift tax against the Catholic Church is against the law; that when the donation was made. He was not yet the parish priest.
ISSUE:
Whether or not petitioner should be liable for assessed donee’s gift tax dontated.

RULING:
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 Constitution… “exempt from taxation” as employed in the Constitution should not be interpreted to mean exemption from all kinds of taxes. And there being no clear, positive or express grant of such privilege by law, in favor of petitioner, the exemption herein must be denied.


LUNG CENTER VS. QUEZON CITY
GR 144104 June29, 2004
En Banc, Callejo J:
Facts:
The lung center is a charitable institution within the context of 1973 and 1987 constitutions. The elements considered in determining a charitable institution are: the statue creating the enterprise; its corporate purposes; constitution and by-laws, methods of administration, nature of actual work performed, character of the services rendered, indefiniteness of the beneficiaries, and the use occupation of properties. As a gen. principle, a charitable institution doe not lose its character as such and its exemption form taxes simply because it derives income from paying patients, or receives subsidies from government; and no money insures to the private benefit of the persons managing or operating the institution.
Issue:
Whether or not the real properties of the lung center are exempt from real property taxes.
Ruling.
Partly No. Those portions of its real property that are leased to private entities are not exempt from actually, direct and exclusively used for charitable purpose. Under PD 1823, the lung center does not enjoy any property tax exemption privileges for its real properties as well as the building constructed thereon.
The property tax exemption under Sec. 28(3), Art. Vi of the property taxes only. This provision was implanted by Sec.243 (b) of RA 7160.which provides that in order to be entitled to the exemption, the lung center must be able to prove that: it is a charitable institution and; its real properties are actually, directly and exclusively used for charitable purpose. Accordingly, the portions occupied by the hospital used for its patients are exempt from real property taxes while those leased to private entities are not exempt from such taxes.