Sunday, April 08, 2012

Insular Lumbar vs CTA

Facts: Insular lumber is a licensed forest concessionaire. The company purchased oil and motor fuel for its operations. It paid specific taxes on such oils. 

Later, it claimed refund on the 25% specific taxes paid, pursuant to RA 1435 Sec 5. (Section 5 allows partial exemption of miners loggers) 

The CIR denied the refund (claiming prescriptive period of 5 years), but on appeal to the CTA, a partial refund was allowed. 

Further, the CIR claims that Sec 5 cannot be the basis of a refund because it is null and void, for it violates the rule that every bill should embrace only one subject, which shall be expressed in the title thereof. 

RA 1435 is entitled “An Act to Provide Means for Increasing the Highway Special Fund”. The CIR claims that what section 5 provides is a DECREASE rather than an INCREASE in the Fund, since it grants PARTIAL EXEMPTION OF MINERS AND LOGGERS FROM THE SPECIFIC TAX. 

Issue: Does it contain contain only one-subject and proclaims just one policy? 

Held: YES. Even if Sec 5 is in effect a partial exemption from the imposed increase tax, said provision still has reference to the specific tax on oil and fuel. IT IS NOT A DEVIATION FROM THE GENERAL SUBJECT OF THE LAW. 

RA 14e35 deals with only one subject and proclaims just one policy: “The need to increase the Highway Special Fund through the imposition of specific tax on oils.” 

The purpose of the constitutional provision is to prohibit duplicity in legislation which would fail to apprise the public of the NATURE, SCOPE, AND CONSEQUENCES of law. 


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