Commissioner on Internal Revenue / Commissioner on Customs vs. Hon. Apolinario Santos et al

1. Commissioner on Internal Revenue /
Commissioner on Customs
vs.
Hon. Apolinario Santos et al
Cecille Carmela T. de los Reyes
Philippine Christian University
Taxation Law
Professor: Atty. Antonio Bonilla
G.R. 119252 (1997)
Penned by: J. Hermosisima Jr.

2. 1. Respondent Guild of Philippine
Jewellers is an association of Filipino
jewellers engaged in the manufacture
of jewelries and allied undertakings.
2. Viray, Regional Director of BIR—
acting in behalf of CIR; conducted
surveillance, monitoring and
inventory of all articles of Hans
Brumann Inc. and placed them under
preventive embargo.
They wanted to make an inventory of
all articles to see if proper taxes
thereon have been paid.
BIR ordered them not to sell the
articles until it can be proven that
necessary taxes have been paid.
FACTS
3. Eventually—this lead to the filing of petition
of private respondent Jewelries to the RTC
Pasig a petition for declaratory relief with writ of
preliminary injunction and/or TRO against
herein petitioners and Regional Director Viray:
Praying that Sec 126, 127 (a) and (b), 150 (a)
of the NIRC
and HDG Nos: 71.01, 71.02, 71.03 and
71.04—Chapter 71 of the Tariff and Customs
Code of the PH be declared unconstitutional
and void
4. Respondent Judge Santos rendered a decision
which:
Declared Sec. 104 of Tariiff and Customs Code of
the PH HDG Nos: 71.01, 71.02, 71.03 and 71.04—
Chapter 71 as amended by EO 470—imposing 3%
to 10% tariff and customs duty on natural and
cultured pearls and precious and semi-precious
stones
and Sec. 150 par. (a) of the NIRC—imposing 20%
excisse tax on jewelry, pearls and other precious
stones are INOPERATIVE and WITHOUT FORCE
and EFFECT.
Upon private respondent s exhaustive study of
the tax rates on jewelry prevailing in other
countries, compared in our country--

3. 5. Petitioner CIR assails the
decision rendered by public
respondent Judge Santos
contending that he has no
authority to pass judgment upon
taxation policy of the government.
It also impugn the decision by
asserting that there was no showing
that the tax laws on jewelry are
confiscatory.
ISSUE: Does the
RTC have the
authority to pass
judgment upon
taxation policy of
the government?
The policy of the courts is to avoid
ruling on constitutional questions
and to presume the acts of the
political departments valid in the
absence of a clear and
unmistakeable showing to the
contrary.
THIS IS NOT TO SAY THAT
RTC has no power to declare a
tax law unconstitutional—but
this does not pertain to deciding
questions which pertain to
legislative policy.
RTC can only look into the
validity of the provision—
whether or not it has been
passed in accordance with the
provisions laid down by law,
and thus CANNOT inquire as to
the reasons of its existence.
FINALLY—the SC held that it is within the power of the
legislature whether to tax jewelry or not. With the
legislature primarily lies the discretion to determine the
nature (kind), object (purpose), extent (rate), coverage
(subject) and situs of taxation.