G.R. No. 91649 May 14, 1991
ATTORNEYS HUMBERTO BASCO, EDILBERTO BALCE, SOCRATES MARANAN AND LORENZO SANCHEZ,petitioners, v. PHILIPPINE AMUSEMENTS AND GAMING CORPORATION (PAGCOR), respondent.
Re: Principle of Local Autonomy
FACTS: The PH Amusement and Gaming Corp. was created by PD 1067-A and granted a franchise under PD 1067-B. Subsequently, under PD 1869, the Government enabled it to regulate and centralize all games of chance authorized by existing franchise or permitted by law, under declared policy. But the petitioners think otherwise, that is why, they filed the instant petition seeking to annul the PAGCOR Charter — PD 1869, because it is allegedly contrary to morals, public policy and order, and because of the following issues:
ISSUES:
(1) WON it waived the Manila City gov't's right to impose taxes and license fees, which is recognized by law.
(2) WON it has intruded into the LGUs' right to impose local taxes and license fees, and thus contrary to the principle of local autonomy enshrined in the Constitution.
(3) WON it violates the equal protection clause as it allows some gambling acts but also prohibits other gaming acts.
(4) WON it violates the Cory gov't's policy of being away from monopolistic and crony economy, and toward free enterprise and privatization.
HELD:
(1) No. The fact that PAGCOR, under its charter, is exempt from paying tax of any kind is not violative of the principle of local autonomy. LGUs' have no inherent right to impose taxes. LGUs' power to tax must always yield to a legislative act which is superior having been passed by the state itself which has the inherent power to tax. The charter of LGUs is subject to control by Congress as they are mere creatures of Congress. Congress, therefore, has the power of control over LGUs. And if Congress can grant the City of Manila the power to tax certain matters, it can also provide for exemptions or even take back the power.
(2) No. LGUs' right to impose license fees on "gambling", has long been revoked. As early as 1975, the power of local governments to regulate gambling thru the grant of "franchise, licenses or permits" was withdrawn by P.D. No. 771 and was vested exclusively on the National Government. Furthermore, LGUs' have no power to tax instrumentalities of the gov't such as PAGCOR which exercises governmental functions of regulating gambling activities.
(3) No. The clause does not preclude classification of individuals who may be accorded different treatment under the law as long as the classification is not unreasonable or arbitrary. A law does not have to operate in equal force on all persons or things to be conformable to Article III, Section 1 of the Constitution. The Constitution does not require situations which are different in fact or opinion to be treated in law as though they were the same.
(4) No. The judiciary does not settle policy issues. The Court can only declare what the law is and not what the law should be. Under our system of government, policy issues are within the domain of the political branches of government and of the people themselves as the repository of all state power. On the issue of monopoly, the same is not necessarily prohibited by the Constitution. The state must still decide whether public interest demands that monopolies be "regulated" or prohibited. Again, this is a matter of policy for the Legislature to decide. The judiciary can only intervene when there are violations of the statutes passed by Congress regulating or prohibiting monopolies.
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