Pepsi sought recovery from Butuan the sums paid by it collected by the latter pursuant to Municipal Order No. 110.
Plaintiff Pepsi assails the M.O. as null & void stating that
1) it partakes of the nature of an Import Tax
2) amounts to Double Taxation
3) unjust and oppressive and constitute Invalid Delegation of the Power to Tax.
Let's see if it will hold.
But what the hell happened here? Why was Pepsi assailing the municipal ordinance?
Reason is because the ordinance was imposing taxes for every case of softdrinks, liquors and other carbonated beverages, regardless of the volume of sales shipped to the agents and consignees by outside dealers or any person or company having its actual business outside the city. So madaling sabe, pag outside dealers may tax, pag local dealers wala. That's discriminatory.
ISSUE:
Does the tax ordinance violate the uniformity requirement of taxation?
RULING:
YES.
Court said Tax levied is discriminatory and violaltive of the uniformity requirement by the Constitution since only sales by agents or consignees of outside dealers would be subject to tax. Sales by local dealers regardless of the volume of sales would be exempt from the disputed tax.
The classification made in the exercise of the taxing authority, to be valid must undergo 4 requisites of a VALID CLASSIFICATION to wit.
1. It must be based on substantial distinction
2. It must germane to the purpose of law
3. It must apply equally to each member of the same class and
4. It must not be limited to existing conditions only
The Constitution it self in its Equal Protection Clause provides that taxation must be "Uniform and Equitable".
Pepsi Cola wins this case.
1) it partakes of the nature of an Import Tax
2) amounts to Double Taxation
3) unjust and oppressive and constitute Invalid Delegation of the Power to Tax.
Let's see if it will hold.
But what the hell happened here? Why was Pepsi assailing the municipal ordinance?
Reason is because the ordinance was imposing taxes for every case of softdrinks, liquors and other carbonated beverages, regardless of the volume of sales shipped to the agents and consignees by outside dealers or any person or company having its actual business outside the city. So madaling sabe, pag outside dealers may tax, pag local dealers wala. That's discriminatory.
ISSUE:
Does the tax ordinance violate the uniformity requirement of taxation?
RULING:
YES.
Court said Tax levied is discriminatory and violaltive of the uniformity requirement by the Constitution since only sales by agents or consignees of outside dealers would be subject to tax. Sales by local dealers regardless of the volume of sales would be exempt from the disputed tax.
The classification made in the exercise of the taxing authority, to be valid must undergo 4 requisites of a VALID CLASSIFICATION to wit.
1. It must be based on substantial distinction
2. It must germane to the purpose of law
3. It must apply equally to each member of the same class and
4. It must not be limited to existing conditions only
The Constitution it self in its Equal Protection Clause provides that taxation must be "Uniform and Equitable".
Pepsi Cola wins this case.
