TAXATION Actions of the Collector of Customs are

- Purpose appealable to the Commissioner of Customs,

whose decisions, in turn, are subject to the
COMMISSIONER OF CUSTOMS VS MAKASIAR exclusive appellate jurisdiction of the CTA.
[G.R. NO. 79307 AUGUST 29, 1989] Thereafter, an appeal lies to the Supreme Court
through the appropriate petition for review by
FACTS: The then CFI of Manila issued Search and writ of certiorari. Undeniably, RTCs do not share
Seizure Warrants in People v. Sosis for violation of these review powers. The rule is anchored upon
Section 11 (a) and/or 11(e) of Republic Act 3720, and the policy of placing no unnecessary hindrance
violation of Article 188 of the RPC (Substituting and on the government's drive not only to prevent
altering trademarks, trade names, or service marks; smuggling and other frauds upon customs, but
in this case, Johnnie Walker Scotch Whisky), also, and more importantly, to render efective
respectively. A composite team from the Ministry of and efficient the collection of import and export
Finance Bureau of Investigation and Intelligence duties due the state.
(BII), the Bureau of Customs and the Integrated
National Police (INP) enforced the search and seizure COMMISSIONER OF INTERNAL REVENUE VS.
warrants, and seized and confiscated materials ALGUE
found in the premises of the Hercules Bottling at [G.R. NO. L-28896 FEBRUARY 17, 1988]
Paco, Manila.
FACTS: The Philippine Sugar Estate Development
The Collector of Customs for the Port of Manila Company (PSEDC) appointed Algue Inc. as its
issued a warrant of seizure and detention and agent, authorizing it to sell its land, factories, and
ordered the immediate seizure and turnover of the oil manufacturing process. The Vegetable Oil
seized items to its Auction and Cargo Disposal Investment Corporation (VOICP) purchased
Division at the Port of Manila. Seizure and forfeiture PSEDC properties. For the sale, Algue received a
proceedings were then initiated against the articles commission of P125,000 and it was from this
for alleged violation of Section 2530 (f) of the Tarif commission that it paid Guevara, et. al.
and Customs Code, in relation to RA 3720. The CFI organizers of the VOICP, P75,000 in promotional
issued an order authorizing the transfer and delivery fees. In 1965, Algue received an assessment from
of the seized articles to the customs warehouse the Commissioner of Internal Revenue in the
located at South Harbor, Port of Manila. The City amount of P83,183.85 as delinquency income tax
Fiscal of Manila proceeded with the preliminary for years 1958 amd 1959. Algue filed a protest or
investigation of the criminal cases and the Bureau of request for reconsideration which was not acted
Customs also resumed hearing the seizure and upon by the Bureau of Internal Revenue (BIR).
forfeiture proceedings over the said articles. The counsel for Algue had to accept the warrant
of distrant and levy. Algue, however, filed a
The Distiller Co. Ltd. of England objected to the petition for review with the Coourt of Tax Appeals.
continuation by the Collector of Customs of the
seizure proceedings claiming that these proceedings ISSUE: Whether the assessment was
would hamper or even jeopardize the preliminary reasonable?
investigation being conducted by the fiscal. The
Collector of Customs ignored the objections. The HELD: Taxes are the lifeblood of the government
company filed a petition for prohibition with and so should be collected without unnecessary
preliminary injunction and/or TRO to enjoin the hindrance. Every person who is able to pay must
Hearing Officer of the Bureau of Customs from taking contribute his share in the running of the
further action in the seizure proceedings of the government. The Government, for his part, is
subject goods. Respondent judge issued a TRO and a expected to respond in the form of tangible and
writ for preliminary injunction. The judge rendered a intangible benefits intended to improve the lives
decision holding that the Collector of Customs acted of the people and enhance their moral and
in excess of its jurisdiction in issuing the warrant of material values. This symbiotic relationship is the
seizure and detention considering that the subject rationale of taxation and should dispel the
goods had already come under the legal custody of erroneous notion that is an arbitrary method of
the CFI. Hence the instant petition. exaction by those in the seat of power.

ISSUE: WON the RTC has the power to review the Tax collection, however, should be made in
acts of the Collector of Customs? accordance with law as any arbitrariness will
negate the very reason for government itself. For
HELD: No. Tarif and customs duties are taxes all the awesome power of the tax collector, he
constituting a significant portion of the public may still be stopped in his tracks if the taxpayer
revenue which are the lifeblood that enables the can demonstrate that the law has not been
government to carry out functions it has been observed. Herein, the claimed deduction
instituted to perform. The RTCs are devoid of any (pursuant to Section 30 [a] [1] of the Tax Code
competence to pass upon the validity or regularity of and Section 70 [1] of Revenue Regulation 2: as to
seizure and forfeiture proceedings conducted in the compensation for personal services) had been
Bureau of Customs, and to enjoin, or otherwise legitimately by Algue Inc. It has further proven
interfere with, these proceedings. The Collector of that the payment of fees was reasonable and
Customs sitting in seizure and forfeiture proceedings necessary in light of the eforts exerted by the
has exclusive jurisdiction to hear and determine all payees in inducing investors (in VOICP) to involve
questions touching on the seizure and forfeiture of themselves in an experimental enterprise or a
dutiable goods. The RTCs are precluded from business requiring millions of pesos.
assuming cognizance over such matters even
through petitions of certiorari, prohibition or The assessment was not reasonable.
mandamus.
- Tax Exemptions
ABRA VALLEY COLLEGE, INC. VS. HON. JUAN P. Respondents were required to answer said
AQUINO petition. The petitioners raised the arguments
[162 SCRA 106, 1988] that the courts a quo: 1. made an error in
sustaining a valid seizure and sale of the college
FACTS: In this case the court decided that the lot and building used for educational purpose 2.
seizure and sale by the Municipal Treasurer of Made an error in declaring that the college was
Bangued, Abra and Provincial Treasurer of the said not exclusively for educational purposes merely
province of the lot and building of Abra Valley because the college president resides in it 3.
College, Inc. to be valid since the said school was not made an error in declaring the college not tax
tax exempt. What transpired was the school was exempt from property taxes and in ordering
issued a Notice of Seizure of the lot and building of petitioner to pay P5,140.31 as realty taxes. 4.
the school covered by Original Certificate of Title No. made an error in ordering the confiscation of the
Q-83 duly registered in the name of petitioner for P6,000.00 deposit made in the court by petitioner
failure to pay the amount of P5,140.31 back taxes by as payment of the P5,140.31 realty taxes.
the respondent The "Notice of Sale" was caused to
be served upon the petitioner by the respondent ISSUE: Whether Abra Valley College Inc. subject
treasurers on July 8, 1972 for the sale at public to tax exemption as stated in the constitution
auction of said college lot and building, which sale that a school should be exclusively for
was held on the same date. Dr. Paterno Millare, then educational purpose despite the proof that there
Municipal Mayor of Bangued, Abra, ofered the are other purpose attached to the lot and
highest bid of P6,000.00 which was duly accepted. building such as a residence of the College
The certificate of sale was correspondingly issued to president?
him.
HELD: In the case at bar the Supreme Court used
After the sale Dr. Paterno filled a case for the Section 22, paragraph 3, Article VI, of the then
dismissal of the case and after exchange of 1935 Philippine Constitution, which expressly
pleadings the court ordered the respondent grants exemption from realty taxes for
treasurers to deliver the proceeds of the auction "Cemeteries, churches and parsonages or
sale. Finally the parties involved entered into a convents appurtenant thereto, and all lands,
Stipulation of Facts administered by the court buildings, and improvements used exclusively for
dismissing the notice of seizure and notice of sale in religious, charitable or educational purposes ...
favor of Dr. Paterno and relieving him of all the back Relative thereto, Section 54, paragraph c,
taxes of the school upon the payment of the auction Commonwealth Act No. 470 as amended by
price. Republic Act No. 409, otherwise known as the
Assessment Law, provides that churches and
Despite the Stipulation of Facts the trial courts found parsonages or convents appurtenant thereto, and
out that the school was recognized by the all lands, buildings, and improvements used
government ofering Primary High School and exclusively for religious, charitable, scientific or
College courses and has a population of more than educational purposes
100,000 students all in all; that the school was
situated right in the heart of town of Bangued, Abra The Supreme court ruled that the exemption in
a few meters from the plaza and about 120 meters favor of property used exclusively for charitable
from the Court of First Instance building; that the or educational purposes is 'not limited to
elementary pupils are housed in a two-storey property actually indispensable but extends to
building across the street; that the high school and facilities which are incidental to and reasonably
college students are housed in the main building; necessary for the accomplishment of said
that the Director with his family is in the second floor purposes and that while this Court allows a more
of the main building; and that the annual gross liberal and non-restrictive interpretation of the
income of the school reaches more than one phrase "exclusively used for educational
hundred thousand pesos. In light of the evidences it purposes" as provided for in Article VI, Section
was left after the courts to determine whether the 22, paragraph 3 of the 1935 Philippine
said school was exclusively for educational purposes. Constitution, reasonable emphasis has always
been made that exemption extends to facilities
The succeeding Provincial Fiscal, Hon. Jose A. which are incidental to and reasonably necessary
Solomon and his Assistant, Hon. Eustaquio Z. for the accomplishment of the main purposes.
Montero, filed a Memorandum for the Government
and a Supplemental Memorandum, wherein they While the use of the second floor of the main
opined "that based on the evidence, the laws building in the case at bar for residential
applicable, court decisions and jurisprudence, the purposes of the Director and his family, they may
school building and school lot used for educational find justification under the concept of incidental
purposes of the Abra Valley College, Inc., are use, which is complimentary to the main or
exempted from the payment of taxes. primary purposeeducational, the lease of the
first floor thereof to the Northern Marketing
The trial court disagreed because of the use of the Corporation cannot by any stretch of the
second floor by the Director of petitioner school for imagination be considered incidental to the
residential purposes. He thus ruled for the purpose of education.
government and rendered the assailed decision.
After having been granted by the trial court 10 days Under the 1935 Constitution, the trial court
from August 6, 1974 within which to perfect its correctly arrived at the conclusion that the school
appeal petitioner instead availed of the instant building as well as the lot where it is built should
petition for review on certiorari with prayer for be taxed, not because the second floor of the
preliminary injunction before this Court, which same is being used by the Director and his family
petition was filed. In the resolution, this Court for residential purposes, but because the first
resolved to give DUE COURSE to the petition floor thereof is being used for commercial
purposes. However, since only a portion is used for repealed section (m-2) of the Revised
purposes of commerce, it is only fair that half of the Administrative Code and the repealing portions
assessed tax be returned to the school involved. (o) of section 18 of Republic Act No. 409,
although they seemingly difer in the way the
PREMISES CONSIDERED, the decision of the Court of legislative intent is expressed, yet their meaning
First Instance of Abra, Branch I, is hereby AFFIRMED is practically the same for the purpose of taxing
subject to the modification that half of the assessed the merchandise mentioned in said legal
tax be returned to the petitioner provisions, and that the taxes to be levied by said
ordinances is in the nature of percentage
AMERICAN BIBLE SOCIETY vs. CITY OF MANILA
graduated taxes.
[101 PHIL 386, 1957]
Not satisfied with the decision, they took up the
FACTS: In this case the plaintif is a foreign, non-
matter to the CA which was certified to the SC
stock, religious, missionary organization duly
where the petitioner argued these points 1. In
registered in the Philippines and doing business
holding that Ordinances Nos. 2529 and 3000, as
through its agency here in Manila. In the course of
respectively amended, are not unconstitutional 2.
their ministry, their Philippine agency has been
In holding that subsection m-2 of Section 2444 of
distributing and selling bibles and/or gospel portions
the Revised Administrative Code under which
thereof (except during the Japanese occupation)
Ordinances Nos. 2592 and 3000 were
throughout the Philippines and translating the same
promulgated, was not repealed by Section 18 of
into several Philippine dialect Upon knowledge the
Republic Act No. 409; 3. In not holding that an
acting City Treasurer of the City of Manila informed
ordinance providing for taxes based on gross
plaintif that it was conducting the business of
sales or receipts, in order to be valid under the
general merchandise since November, 1945, without
new Charter of the City of Manila, must first be
providing itself with the necessary Mayor's permit
approved by the President; and 4. In holding that,
and municipal license, requiring the plaintif to
as the sales made by the plaintif-appellant have
secure, within three days, the corresponding permit
assumed commercial proportions, it cannot
and license fees, together with compromise covering
escape from the operation of said municipal
the period from the 4th quarter of 1945 to the 2nd
ordinances under the cloak of religious privilege.
quarter of 1953, in the total sum of P5,821.45 To
avoid the closing of its business as well as further ISSUE: Whether or not the ordinances of the City
fines and penalties in the premises on October 24, of Manila, Nos. 3000, as amended, and 2529,
1953, plaintif paid to the defendant under protest 3028 and 3364, are constitutional and valid; and
the said permit and license fees in the (2) whether the provisions of said ordinances are
aforementioned amount, giving at the same time applicable or not to the case at bar.
notice to the City Treasurer that suit would be taken
in court to question the legality of the ordinances HELD: In the case at bar the Supreme court held
under which, the said fees were being collected that that Ordinance No. 3000 cannot be
which was done on the same date by filing the considered unconstitutional, even if applied to
complaint that gave rise to this action. plaintif Society. But as Ordinance No. 2529 of the
City of Manila, as amended, is not applicable to
The plaintif prays that judgment be rendered plaintif-appellant and defendant-appellee is
declaring the said Municipal Ordinance No. 3000, as powerless to license or tax the business of
amended, and Ordinances Nos. 2529, 3028 and plaintif Society involved herein for, as stated
3364 illegal and unconstitutional, and a refund before, it would impair plaintif's right to the free
should be made by the defendant of the payments exercise and enjoyment of its religious profession
made and the legal costs. The defendant replied and worship, as well as its rights of dissemination
that, maintaining in turn that said ordinances were of religious beliefs, We find that Ordinance No.
enacted by the Municipal Board of the City of Manila 3000, as amended is also inapplicable to said
by virtue of the power granted to it by section 2444, business, trade or occupation of the plaintif.
subsection (m-2) of the Revised Administrative Code,
superseded, by section 18, subsection (1) of RA 409, Wherefore, and on the strength of the foregoing
known as the Revised Charter of the City of Manila, considerations, We hereby reverse the decision
and praying that the complaint be dismissed, with appealed from, sentencing defendant return to
costs against plaintif. This answer was replied by plaintif the sum of P5,891.45 unduly collected
the plaintif reiterating the unconstitutionality of the from it. Without pronouncement as to costs. It is
often-repeated ordinances so ordered.

Before the trial the party submitted a stipulation of BISHOP OF NUEVA SEGOVIA vs PROVINCIAL
facts stating the sales made by the petitioner from BOARD OF ILOCOS NORTE [G.R. No. L-27588
1945 to 1953. When the case was set for hearing the December 31, 1927]
plaintif argued that it never made any profit from
the sale of its bibles, which are disposed of for as low Facts: The plaintif, the Roman Catholic Apostolic
as one third of the cost, and that in order to maintain Church, represented by the Bishop of Nueva
its operating cost it obtains substantial remittances Segovia, possesses and is the owner of a parcel
from its New York office and voluntary contributions of land in the municipality of San Nicolas, Ilocos
and gifts from certain churches, both in the United Norte, all four sides of which face on public
States and in the Philippines, which are interested in streets. As required by the defendants, the
its missionary work. The defendant answered that plaintif paid, under protest, the land tax on the
due to the cross-examination of the lone witness of lot adjoining the convent and the lot which
plaintif it was proven that the claim of plaintif that formerly was the cemetery with the portion
if having no profit from the sales is evidently where the tower stood.
untenable. This made the judge to dismiss the case
for lack of merit on the grounds thatfrom the
The plaintif filed this action for the recovery of the A gift tax is not a property tax, but an excise tax
sum paid by to the defendants by way of land tax, imposed on the transfer of property by way of gift
alleging that the collection of this tax is illegal. The inter vivos, the imposition of which on property
lower court absolved the defendants from the used exclusively for religious purposes, does not
complaint in regard to the lot adjoining convent and constitute an impairment of the Constitution. The
declared that the tax collected on the lot, which phrase "exempt from taxation," as employed in
formerly was the cemetery and on the portion where the Constitution should not be interpreted to
the lower stood, was illegal. Both parties appealed mean exemption from all kinds of taxes. And
from this judgment. there being no clear, positive or express grant of
such privilege by law, in favor of petitioner, the
ISSUE: Whether or not the lots owned by the Church exemption herein must be denied.
are covered by the Churchs tax exemption
THE PROVINCE OF ABRA VS HONORABLE
HELD: YES. The exemption in favor of the convent in HAROLD M. HERNANDO [107 SCRA 104,
the payment of the land tax (sec. 344 [c] 1981]
Administrative Code) refers to the home of the
parties who presides over the church and who has to FACTS: In this case the provincial city assessor
take care of himself in order to discharge his duties. of Abra filed a certiorari and mandamus against
In therefore must include not only the land actually the ruling made by Judge Harold M. Hernando of
occupied by the church, but also the adjacent the Court of First Instance of Abra, it was because
ground destined to the ordinary incidental uses of respondent denied a motion for declaratory relief
man. A vegetable garden belonging to a house and, by Roman Catholic Bishop of Bangued desirous of
in the case of a convent, its use is limited to the being exempted from a real estate tax followed
necessities of the priest, which comes under the by a summary judgment granting such
exemption. exemption without even hearing the side of the
petitioner. Petitioner further argued that clearly
In regard to the lot which formerly was the the judge ignored the pertinent provisions of the
cemetery, while it is no longer used as such, neither Rules of Court and disregards the basic laws of
is it used for commercial purposes and, according to procedure and basic provisions of due process in
the evidence, is now being used as a lodging house the constitution. The important argument made
by the people who participate in religious festivities, by the petitioner is that the judge failed to abide
which constitutes an incidental use in religious by the provisions of PD No. 464 which states
functions, which also comes within the exemption. that" No court shall entertain any suit assailing
the validity of a tax assessed under this Code
LLADOC vs CIR [14 SCRA 292]
until the taxpayer, shall have paid, under protest,
FACTS: Sometime in 1957, the M.B. Estate, the tax assessed against him nor shall any court
Inc.donated P10,000.00 in cash to Rev. Fr. Crispin declare any tax invalid by reason of irregularities
Ruiz, then parish priest of Victorias, Negros or informalities in the proceedings of the officers
Occidental, and predecessor of herein petitioner, for charged with the assessment or collection of
the construction of a new Catholic Church in the taxes, or of failure to perform their duties within
locality. The total amount was actually spent for the this time herein specified for their performance
purpose intended. unless such irregularities, informalities or failure
shall have impaired the substantial rights of the
The donor M.B. Estate, Inc., filed the donor's gift tax taxpayer; nor shall any court declare any portion
return. The respondent Commissioner of Internal of the tax assessed under the provisions of this
Revenue issued an assessment for donee's gift tax Code invalid except upon condition that the
against the Catholic Parish of Victorias, Negros taxpayer shall pay the just amount of the tax, as
Occidental, of which petitioner was the priest. The determined by the court in the pending
tax amounted to P1,370.00 including surcharges, proceeding."
interests of 1% monthly from May 15, 1958 to June
15, 1960, and the compromise for the late filing of The judge responded by saying there is no
the return. dispute that the properties including their
procedure are actually, directly and exclusively
Petitioner lodged a protest to the assessment and used by the Roman Catholic Bishop of Bangued,
requested the withdrawal thereof. Inc. for religious or charitable purposes."

ISSUE: Whether or not the imposition of gift tax is

valid?
HELD: The Supreme Court ruled that the petition
HELD: Yes. Section 22 (3), Art. VI of the Constitution be granted since the judge would not have made
exempts from taxation cemeteries, churches and such a grave mistake if he had only made a clear
parsonages or convents and all lands, buildings, and distinction between the present provisions of the
improvements used exclusively for religious constitution to the provisions of the 1935
purposes. The exemption is only from the payment constitution regarding tax exemptions on land,
of taxes assessed on such properties enumerated, as buildings and improvements. The main diference
property taxes, as contra distinguished from excise is that in order for a land, building, or
taxes. In the present case, what the Collector improvement to be tax exempt, there must be
assessed was a donee's gift tax; the assessment was and exclusive, actual and direct use of the
not on the properties themselves. It did not rest enumerated for religious or charitable purposes.
upon general ownership; it was an excise upon the It is also a rule that tax exemption is not favored
use made of the properties, upon the exercise of the nor presumed so that if granted it must be
privilege of receiving the properties strictly construed against the taxpayer.
Affirmatively put, the law frowns on exemption
from taxation, hence, an exempting provision should purposes and still be entitled to exempt. The
be construed strictissimi juris Young Men's Christian Association of Manila
cannot be said to be an institution used
The petition was also justly invoked on the grounds exclusively for religious purposes, or an
for the protection of due process to clearly show if institution used exclusively for charitable
the respondents really did not violate any purposes, or an institution devoted exclusively to
constitutional provisions in regards to tax exemption educational purposes; but we believe it can be
but instead, what respondent judge did was directly truthfully said that it is an institution used
ruled on the case of declaratory relief on the basis exclusively for all three purposes, and that, as
that it was exclusive, actual, and directly as sources such, it is entitled to be exempted from taxation.
of support of the parish priest and his helpers and
also of private respondent Bishop as compared to It may be admitted that there are persons
the motion to dismiss the case due to lack of occupying rooms in the main building as lodgers
jurisdiction since the validity of a tax assessment or roomers and that they take their meals at the
may be questioned before the Local Board of restaurant below. These facts, however, are far
Assessment Appeals and not with a court. There was from constituting a business in the ordinary
also mention of a lack of a cause of action, but only acceptation of the word; as there is no profit
because, in its view, declaratory relief is not proper, realized by the association in any sense; and that
as there had been breach or violation of the right of the purpose of the association is not, primarily, to
government to assess and collect taxes on such obtain the money which comes from the lodgers
property. It clearly appears, therefore, that in failing and boarders. The real purpose is to keep the
to accord a hearing to petitioner Province of Abra membership continually within the sphere of
and deciding the case immediately in favor of influence of the institution; and thereby to
private respondent, respondent Judge failed to abide prevent, as far as possible, the opportunities
by the constitutional command of procedural due which vice presents to young men in foreign
process. countries who lack home or other similar
influences.
YMCA VS COLLECTOR OF INTERNAL REVENUE
[G.R. No. L-7988; January 19, 1916] - Double Taxation
FACTS: The Young Men's Christian Association came PUNSALAN vs MUNICIPAL BOARD OF THE
to the Philippines with the army of occupation in CITY OF MANILA
1898. The association is nonsectarian, it is [G.R. No. L-4817; May 26, 1954]
preeminently religious; and the fundamental basis
and groundwork is the Christian religion. All of the FACTS: Ordinance 3398 was approved by the
officials of the association are devoted Christians, municipal board of the City of Manila. It imposes
members of a church, and have dedicated their lives a municipal occupation tax on persons exercising
to the spread of the Christian principles and the various professions in the city and penalizes non-
building of Christian character. Its building is located payment of the tax by a fine of not more than
in Calle Concepcion, Ermita, which was formally P200 or by imprisonment of not more than 6
dedicated on 20 October 1909. The building is months, or by both such fine and imprisonment
composed of three parts. The main structure is three in the discretion of the court. The ordinance was
stories high and includes a reception hall, social hall enacted pursuant to paragraph (1) of section 18
and game rooms, lecture room, library, reading room of the Revised Charter of the City of Manila (as
and rooming apartments. The small building lying to amended by RA 409), which empowers the
the left of the principal structure is the kitchen and Municipal Board of said city to impose a
servants' quarters. The bowling alleys, swimming municipal occupation tax, not to exceed P50 per
pool, locker rooms and gymnasium-auditorium are annum, on persons engaged in the various
located at the large wing to the right (athletic professions, such as those were Silvestre M.
building).The association claimed exemption from Punsalan, et. al. belong. Punsalan, et. al. filed a
taxation on ground that it is a religious, charitable suit in the CFI of Manila in their own behalf and in
and educational institution combined, under Section behalf of other professionals practicing in the City
48 of the Charter of the City of Manila. The city of of Manila, calling for the annulment of Ordinance
Manila, contending that the property is taxable, 3398 of the City of Manila together with the
assessed it and levied a tax thereon. It was paid provision of the Manila charter authorizing it and
under protest and this action begun to recover it on the refund of taxes collected under the ordinance
the ground that the property was exempt from but paid under protest (as they have paid their
taxation under the charter of the city of Manila. The occupation tax under Section 201 of the National
decision was made in favor of the city, and the Internal Revenue Code [NIRC]).
association appealed.
The lower court upheld the validity of the
ISSUE: WON the institution must be devoted provision of law authorizing the enactment of the
exclusive for religious purposes, or exclusively for ordinance but declared the ordinance itself illegal
charitable purposes, or exclusively to educational and void on the ground that the penalty therein
purposes, to be entitled to tax exemption? provided for non-payment of the tax was not
legally authorized. Both parties appealed to the
HELD: There is no doubt about the correctness of Supreme Court.
the contention that an institution must devote itself
exclusively to one or the other of the purpose ISSUE: WON professionals in Manila are being
mentioned in the statute before it can be exempt subjected to double taxation, in light of the
from taxation; but the statute does not say that it municipal occupation tax imposed against them
must be devoted exclusively to any one of the by the City of Manila?
purposes therein mentioned. It may be a
combination of two or three or more of those
HELD: No. The argument against double taxation The permit fee is made payable not by the
may not be invoked where one tax is imposed by the masseur or massagist, but by the operator of a
state and the other is imposed by the city, it being massage clinic who may not be a massagist
widely recognized that there is nothing inherently himself. Compared to permit fees required in
obnoxious in the requirement that license fees or other operations, P100.00 may appear to be too
taxes be exacted with respect to the same large and rather unreasonable, but much
occupation, calling or activity by both the state and discretion is given to municipal corporations in
the political subdivisions thereof. What the law determining the amount of said fee without
prohibits is the imposition of two taxes on the same considering it as a tax for revenue purposes. The
subject matter, for the same purpose, by the same amount of the fee or charge is properly
taxing authority, within the same jurisdiction and considered in determining whether it is a tax or
during the same taxing period; thus, double taxation an exercise of the police power. The amount may
must be of the same kind or character to be a valid be so large as to itself show that the purpose was
issue. to raise revenue and not to regulate, but in
regard to this matter there is a marked distinction
The Legislature may, in its discretion, select what between license fees imposed upon useful and
occupations shall be taxed, and in the exercise of beneficial occupations which the sovereign
that discretion it may tax all, or it may select for wishes to regulate but not restrict, and those
taxation certain classes and leave the others which are inimical and dangerous to public
untaxed. Manila, as the seat of the National health, morals or safety. In the latter case the fee
Government and with a population and volume of may be very large without necessarily being a
trade many times that of any other Philippine city or tax.
municipality, ofers a more lucrative field for the
practice of the professions, so that it is but fair that Evidently, the Manila Municipal Board considered
the professionals in Manila be made to pay a higher the practice of hygienic and aesthetic massage
occupation tax than their brethren in the provinces. not as a useful and beneficial occupation which
The ordinance imposes the tax upon every person will promote and is conducive to public morals,
"exercising" or "pursuing" any one of the and consequently, imposed the said permit fee
occupations named, but does not say that such for its regulation.
person must have his office in Manila. There is no
distinction found in the ordinance between
professionals having offices in manila and outsiders
who have no offices in the city but practice their
profession therein.

- License Fees
PHYSICAL THERAPY ORG. vs MUNICIPAL BOARD
[G.R. No. L-10448; August 30, 1957]

FACTS: The Physical Therapy Organization, an

association of registered massagists and licensed
operators of massage clinics in the City of Manila
and other parts of the country, filed an action in the
CFI of Manila for declaratory judgment regarding the
validity of Municipal Ordinance 3659 promulgated by
the Municipal Board and approved by the City Mayor.
To stop the City from enforcing said ordinance, the
Organization secured an injunction upon filing of a
bond in the sum of P1,000.00. A hearing was held,
but the parties without introducing any evidence
submitted the case for decision on the pleadings,
although they submitted written memoranda.
Thereafter, the trial court dismissed the petition and
later dissolved the writ of injunction previously
issued. The Organization appealed said order of
dismissal directly to the Supreme Court.

ISSUE: WON the license fees imposed by the

Ordinance against massage clinic operators is
unreasonable?

HELD: No. The purpose of the Ordinance is not to

regulate the practice of massage, much less to
restrict the practice of licensed and qualified
massagists of therapeutic massage in the
Philippines. The end sought to be attained in the
Ordinance is to prevent the commission of
immorality and the practice of prostitution in an
establishment masquerading as a massage clinic
where the operators thereof ofer to massage or
manipulate superficial parts of the bodies of
customers for hygienic and aesthetic purposes.