Lutz v Araneta
GR No L-7859 December 22, 1955
FACTS:
Walter Lutz, as Judicial Administrator of the Intestate Estate of Antonio Jayme Ledesma, sought to recover the sum of
P14,666.40 paid by the estate as taxes from the Commissioner under Section e of Commonwealth Act 567 or the Sugar Adjustment Act, alleging that such tax is unconstitutional as it levied for the aid and support of the sugar industry exclusively, which is in his opinion not a public purpose.
ISSUE:
Is the tax valid?
HELD:
Yes. The tax is levied with a regulatory purpose, i.e. to provide means for the rehabilitation and stabilization of the threatened sugar industry. The act is primarily an exercise of police power and is not a pure exercise of taxing power.
As sugar production is one of the great industries of the Philippines and its promotion, protection and advancement redounds greatly to the general welfare, the legislature found that the general welfare demanded that the industry should be stabilized, and provided that the distribution of benefits had to sustain.
Further, it cannot be said that the devotion of tax money to experimental stations to seek increase of efficiency in sugar production, utilization of by-products, etc., as well as to the improvement of living and working conditions in sugar mills and plantations without any part of such money being channeled directly to private persons, constitute expenditure of tax money for private purposes.
Hence, the tax is valid.
GR No L-7859 December 22, 1955
FACTS:
Walter Lutz, as Judicial Administrator of the Intestate Estate of Antonio Jayme Ledesma, sought to recover the sum of
P14,666.40 paid by the estate as taxes from the Commissioner under Section e of Commonwealth Act 567 or the Sugar Adjustment Act, alleging that such tax is unconstitutional as it levied for the aid and support of the sugar industry exclusively, which is in his opinion not a public purpose.
ISSUE:
Is the tax valid?
HELD:
Yes. The tax is levied with a regulatory purpose, i.e. to provide means for the rehabilitation and stabilization of the threatened sugar industry. The act is primarily an exercise of police power and is not a pure exercise of taxing power.
As sugar production is one of the great industries of the Philippines and its promotion, protection and advancement redounds greatly to the general welfare, the legislature found that the general welfare demanded that the industry should be stabilized, and provided that the distribution of benefits had to sustain.
Further, it cannot be said that the devotion of tax money to experimental stations to seek increase of efficiency in sugar production, utilization of by-products, etc., as well as to the improvement of living and working conditions in sugar mills and plantations without any part of such money being channeled directly to private persons, constitute expenditure of tax money for private purposes.
Hence, the tax is valid.
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