Planters Products Vs Fertiphil Corporation Case Digest
Planters Products Vs Fertiphil Corporation Case Digest
Planters Products Vs Fertiphil Corporation Case Digest
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It is clear from the provisions of Section 73 of Commonwealth Act 123 and Section 61 of the Land Transportation and Traffic
Code that the legislative intent and purpose behind the law requiring owners of vehicles to pay for their registration is mainly to
raise funds for the construction and maintenance of highways and to a much lesser degree, pay for the operating expenses of the
administering agency. x xx Fees may be properly regarded as taxes even though they also serve as an instrument
of regulation.
Taxation may be made the implement of the state's police power (Lutz v. Araneta, 98 Phil. 148). If the purpose is primarily
revenue, or if revenue is, at least, one of the real and substantial purposes, then the exaction is properly called a tax. Such is the
case of motor vehicle registration fees. The same provision appears as Section 59(b) in the Land Transportation Code. It is
patent therefrom that the legislators had in mind a regulatory tax as the law refers to the imposition on the registration,
operation or ownership of a motor vehicle as a "tax or fee." x xx Simply put, if the exaction under Rep. Act 4136 were merely a
regulatory fee, the imposition in Rep. Act 5448 need not be an "additional" tax. Rep. Act 4136 also speaks of other "fees" such as
the special permit fees for certain types of motor vehicles (Sec. 10) and additional fees for change of registration (Sec. 11). These
are not to be understood as taxes because such fees are very minimal to be revenue-raising . Thus, they are not
mentioned by Sec. 59(b) of the Code as taxes like the motor vehicle registration fee and chauffeurs license fee. Such fees are to go
into the expenditures of the Land Transportation Commission as provided for in the last proviso of Sec. 61. (Underscoring
supplied)
The P10 levy under LOI No. 1465 is too excessive to serve a mere regulatory purpose. The levy, no doubt, was a big burden on
the seller or the ultimate consumer. It increased the price of a bag of fertilizer by as much as five percent. A plain reading of the LOI also
supports the conclusion that the levy was for revenue generation. The LOI expressly provided that the levy was imposed
"until adequate capital is raised to make PPI viable."
(2) No;
The P10 levy is unconstitutional because it was not for a public purpose. The levy was imposed to give undue benefit to PPI.
An inherent limitation on the power of taxation is public purpose. Taxes are exacted only for a public purpose. They cannot be
used for purely private purposes or for the exclusive benefit of private persons. The reason for this is simple. The power to
tax exists for the general welfare; hence, implicit in its power is the limitation that it should be used only for a public
purpose.
The term "public purpose" is not defined. It is an elastic concept that can be hammered to fit modern standards. Jurisprudence
states that "public purpose" should be given a broad interpretation. It does not only pertain to those purposes which are
traditionally viewed as essentially government functions, such as building roads and delivery of basic services, but also
includes those purposes designed to promote social justice. Thus, public money may now be used for the relocation of illegal
settlers, low-cost housing and urban or agrarian reform.
While the categories of what may constitute a public purpose are continually expanding in light of the expansion of government functions,
the inherent requirement that taxes can only be exacted for a public purpose still stands . Public purpose is the heart of a tax
law. When a tax law is only a mask to exact funds from the public when its true intent is to give undue benefit and
advantage to a private enterprise, that law will not satisfy the requirement of "public purpose."
Indications that it is not for the public purpose
1.
The LOI expressly provided that the levy be imposed to benefit PPI, a private company.
2. The LOI provides that the imposition of the P10 levy was conditional and dependent upon PPI becoming financially "viable."
3. The levies paid under the LOI were directly remitted and deposited by FPA to Far East Bank and Trust Company, the depositary
bank of PPI which proves that PPI benefitted from the LOI
4. The levy was used to pay the corporate debts of PPI.
(3) No;
Even if We consider LOI No. 1695 enacted under the police power of the State, it would still be invalid for failing to comply with the
test of "lawful subjects" and "lawful means." Jurisprudence states the test as follows: (1) the interest of the public generally, as
distinguished from those of particular class, requires its exercise; and (2) the means employed are reasonably necessary for the
accomplishment of the purpose and not unduly oppressive upon individuals.
For the same reasons as discussed, LOI No. 1695 is invalid because it did not promote public interest. The law was enacted to give
undue advantage to a private corporation.
Dispositive Portion: WHEREFORE, the petition is DENIED. The Court of Appeals Decision dated November 28, 2003 is AFFIRMED.
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