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Local Autonomy and Tax Ordinance Dispute

This case involves the constitutionality of Section 187 of the Local Government Code regarding the procedure for approving tax ordinances. The Secretary of Justice had declared a Manila tax ordinance null and void for non-compliance. The trial court reversed this, finding Section 187 unconstitutional as it gave the Secretary control over local governments rather than just supervision. The Supreme Court reversed the trial court, finding that Section 187 only authorizes the Secretary to review the legality and constitutionality of tax ordinances, not substitute his own judgment. It held the Secretary's actions constituted supervision, not control, as he did not prescribe new rules but only determined if existing procedures were followed.

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229 views2 pages

Local Autonomy and Tax Ordinance Dispute

This case involves the constitutionality of Section 187 of the Local Government Code regarding the procedure for approving tax ordinances. The Secretary of Justice had declared a Manila tax ordinance null and void for non-compliance. The trial court reversed this, finding Section 187 unconstitutional as it gave the Secretary control over local governments rather than just supervision. The Supreme Court reversed the trial court, finding that Section 187 only authorizes the Secretary to review the legality and constitutionality of tax ordinances, not substitute his own judgment. It held the Secretary's actions constituted supervision, not control, as he did not prescribe new rules but only determined if existing procedures were followed.

Uploaded by

Kristanne Louise Yu
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOC, PDF, TXT or read online on Scribd
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DRILON VS.

LIM

July 05, 2013


GR No. 112497, August 4 1994
FACTS:
Pursuant to Section 187 of the Local Government Code or the Procedure For Approval
And Effectivity Of Tax Ordinances And Revenue Measures; Mandatory Public Hearings,
Secretary of Justice had, on appeal to him of four oil companies and a taxpayer, declared
Ordinance No. 7794, otherwise known as the Manila Revenue Code, null and void for
non-compliance with the prescribed procedure in the enactment of tax ordinances and for
containing certain provisions contrary to law and public policy.

In a petition, the Regional Trial Court of Manila revoked the Secretary's resolution and
sustained the ordinance, holding inter alia that the procedural requirements had been
observed. Instead, it declared Section 187 of the Local Government Code as
unconstitutional because of its vesture in the Secretary of Justice of the power of control
over local governments in violation of the policy of local autonomy mandated in the
Constitution and of the specific provision therein conferring on the President of the
Philippines only the power of supervision over local governments. By citing the
distinction between control and supervision, the lower court’s concluded that the
challenged section gave the Secretary the power of control and not of supervision only as
vested by the Constitution in the President of the Philippines. This was, in his view, a
violation not only of Article X, specifically Section 4 thereof, 7 and of Section 5 on the
taxing powers of local governments, 8 and the policy of local autonomy in general.

ISSUE:
Whether or not Section 187 of the Local Government Code is unconstitutional.

HELD:
The judgment of the Regional Trial Court is reversed insofar as it declared Section 187 of
the Local Government Code unconstitutional and affirmed the findings of the procedural
requirements in the enactment of the Manila Revenue Code have been observed.
Section 187 authorizes the Secretary of Justice to review only the constitutionality or
legality of the tax ordinance and, if warranted, to revoke it on either or both of these
grounds. When he alters or modifies or sets aside a tax ordinance, he is not also
permitted to substitute his own judgment for the judgment of the local government that
enacted the measure. Secretary Drilon did set aside the Manila Revenue Code, but he did
not replace it with his own version of what the Code should be. He did not pronounce the
ordinance unwise or unreasonable as a basis for its annulment. He did not say that in his
judgment it was a bad law. What he found only was that it was illegal. All he did in
reviewing the said measure was determine if the petitioners were performing their
functions in accordance with law, that is, with the prescribed procedure for the enactment
of tax ordinances and the grant of powers to the city government under the Local
Government Code.

The Court finds that Secretary Drilon had performed an act not of control but of mere
supervision. An officer in control lays down the rules in the doing of an act. If they are
not followed, he may, in his discretion, order the act undone or re-done by his
subordinate or he may even decide to do it himself. While in supervision, it merely sees to
it that the rules are followed, but he himself does not lay down such rules, nor does he
have the discretion to modify or replace them. If the rules are not observed, he may order
the work done or re-done but only to conform to the prescribed rules. He may not
prescribe his own manner for the doing of the act. He has no judgment on this matter
except to see to it that the rules are followed.

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