Title Bagatsing vs Ramirez
GR 41631
Date December 17, 1976
KEYWORDS
DOCTRINE
The right to tax depends upon the ultimate use,
purpose and object for which the fund is raised.
The people may be taxed for a public purpose,
although it be under the direction of an
individual or private corporation.
CASE:
The Municipal Board of MNL enacted ordinance 7522 “AN
ORDINANCE REGULATING THE OPERATION OF PUBLIC MARKETS AND
PRESCRIBING FEES FOR THE RENTALS OF STALLS AND PROVIDING
PENALTIES FOR VIOLATION THEREOF AND FOR OTHER PURPOSES”
Respondent Federation of Manila Market Vendors, Inc. commenced
a civil case seeking to nullify the ordinance for:
a. The publication requirements has not been complied with
b. The Market Committee was not given any participation in
the enactment of the ordinance, as envisioned by RA 6039
c. Section 3(e) of the Anti-Graft and Corrupt Practices act has
been violated
d. The ordinance would violate PD 7 prescribing the collection
of fees and charges on livestock and animal products
Respondent Judge declared the nullity of the ordinance on the
primary ground of non-compliance with the requirement of
publication under the Revised City Charter. Petitioners contend that
only a post-publication is required by the Local Tax Code and invokes
the non-exhaustion of administrative remedies. Judge denied the
motion.
SC ruled in favor of petitioners.
The Revised charter requires publication BEFORE enactment and after
approval. The tax code only prescribes for publication after the
approval of ordinances levying or imposing taxes, fees and other
charges.
The revised charter is a specific act since it relates only to the City of
Manila and the Local Tax Code is a general law for it applies to all local
governments. However, the subject of the Revised Charter is general
and the Local Tax Code is specific.
Section 17 of the Revised Charter of the City of Manila speaks of
"ordinance" in general, i.e., irrespective of the nature and scope
thereof, whereas, Section 43 of the Local Tax Code relates to
"ordinances levying or imposing taxes, fees or other charges" in
particular. In regard, therefore, to ordinances in general, the Revised
Charter of the City of Manila is doubtless dominant, but, that
dominant force loses its continuity when it approaches the realm of
"ordinances levying or imposing taxes, fees or other charges" in
particular. There, the Local Tax Code controls.
On exhaustion of administrative remedies:
Petitioners contend that Sec 47 provides that any question or issue
raised against the legality of any tax ordinance shall be referred for
opinion to the city fiscal in the case of tax ordinance of a city. Private
respondent claims that the ordinance is not a tax ordinance because
it is not strictly the taxing power that is used but a revenue-raising
function.
The SC notes that under Sec 5 of Art XI of the Constitution, each local
government unit shall have the power to create its own sources of
revenue and to levy taxes, subject to such provisions as may be
provided by law. The Local Tax Code also states that Local
Governments may collect fees or rentals for the occupancy or use of
public markets and premises. They can provide for and regulate
market stands, stalls and privileges, and, also, the sale, lease or
occupancy thereof. They can license, or permit the use of, lease, sell
or otherwise dispose of stands, stalls or marketing privileges.
** MAIN ISSUE RE: INHERENT LIMITATION: PUBLIC PURPOSE OF
TAXATION
Private respondent states that the market stall fees imposed by the
ordinance are diverted to the exclusive private use of the Asiatic
Integrated Corporation since the collection had been let by the City of
Manila to the said corporation in a Management and Operating
Contract. SC held that The entrusting of the collection of the fees does
not destroy the public purpose of the ordinance. So long as the
purpose is public, it does not matter whether the agency through
which the money is dispensed is public or private. The right to tax
depends upon the ultimate use, purpose and object for which the
fund is raised. It is not dependent on the nature or character of the
person or corporation whose intermediate agency is to be used in
applying it. The people may be taxed for a public purpose, although it
be under the direction of an individual or private corporation.