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NON-DELEGATION

JOHN H. OSMENA v. OSCAR ORBOS


220 SCRA 703

The Supreme Court finds that the provision conferring the authority upon the ERB to
impose additional amounts on petroleum products provides a sufficient standard by which the
authority must be exercised.

For a valid delegation of power, it is essential that the law delegating the power must be (1)
complete in itself, that is, it must set forth the policy t be executed by the delegate an, (2) it must fix
a standard - limits of which are sufficiently determine or determinable- to which the delegate must
conform.

. . . As pointed out in Edu v. Ericta: To avoid the taint of unlawful delegation, there must
be a standard, which implies at the very least that the legislature itself determines matters of
principle and lays down fundamental policy. Otherwise, the charge of complete abdication may be
hard to repel. A standard, thus, defines legislative policy, marks its limits, maps out its boundaries
and specifies the public agency to apply it. It indicates the circumstances under which the legislative
command is to be effected. It is the criterion by which the legislative purpose may be carried out.
Thereafter, the executive or administrative office designated may in pursuance of the above
guidelines promulgate supplemental rules and regulations. The standard may either be express or
implied. If the former, the non-delegation objection is easily met. The standard though does not have
to be spelled out specifically. It would be implied from the policy and purpose of the act considered
as a whole.

Where the standards set up for the guidance of an administrative officer and the action taken
are in fact recorded in the orders of such officer, so that Congress, the courts and the public are
assured that the orders in the judgement of such officer conform to the legislative standard, there is
no failure in the performance of the legislative functions.

JOHN H. OSMENA v. OSCAR ORBOS


220 SCRA 703

On October 10, 1984, a Special Account in the General Fund, designated as the Oil Price
Stabilization Fund (OPSF), was created to reimburse oil companies for cost increases in crude oil
and imported petroleum products resulting from exchange rate adjustments and from increases in
the world market prices of crude oil.

Subsequently, the OPSF was reclassified into a "trust liability account," by virtue of E.O.
1024, and ordered released from the National Treasury to the Ministry of Energy. The same
Executive Order also authorized the investment of the fund in government securities, with the
earnings from such placements accruing to the fund.

The instant petition avers that the creation of the trust fund violates Section 29(3), Article
VI of the Constitution.

The petitioner argues that "the monies collected pursuant to P.D. 1956 as amended, must
be treated as a 'SPECIAL FUND', not as a 'trust account' or a 'trust fund,' and that "if a special tax
is collected for a specific purpose the revenue generated therefrom shall 'be treated as a special fund'
to be used only for the purpose indicated, and not channeled to another government objective."
Petitioner further points out that since" a 'special fund' consists of monies collected through the
taxing power of a State, such amounts belong to the State, although the use thereof is limited to the
special purpose/objective for which it was created."

He also contends that the "delegation of legislative authority" to the ERB violates Section
28(2) Article VI of the Constitution, and inasmuch as the delegation relates to the exercise of the
power of taxation, the law must not only specify how to tax, who (shall) be taxed (and) what the tax
is for, but also impose a specific limit on how much to tax. The petitioner does not suggest that a
"trust account" is illegal per se, but maintains that the monies collected, which form part of the
OPSF should be maintained in a special account of the general fund for the reason that the
Constitution so provides, and because they are, supposedly, taxes levied fora special purpose. He
assumes that the Fund is formed from a tax undoubtedly because a portion thereof is taken from
collections of ad valorem taxes and the increase thereon.

BENJAMIN GOMEZ v. ENRICO PALOMAR, et al.


25 SCRA 827

Petitioner's letter was returned because it did not bear the special Anti-TB stamp required
by R.A. 1635 as implemented by several administrative orders. Petitioner questions the
constitutionality of the statute as well as the implementing administrative orders issued.

The Supreme Court held that administrative orders are not undue delegation of legislative
powers. Although the law does not expressly authorized the collection of five centavos except
through the sale of Anti-TB stamps, such authority may be implied in so far as may be necessary to
prevent a failure of the undertaking. The authority given to the Postmaster General to raise funds
through the mails must be liberally construed, consistent with the principle that where the end is
required the appropriate means is given.
MISAMIS ORIENTAL ASSOCIATION OF COCO TRADERS, INC. v. DEPARTMENT OF
FINANCE SECRETARY, et al.
238 SCRA 63

Petitioner contends that the Bureau of Food and Drug of the Development of Health
and not the BIR is the competent government agency to determine the proper classification of food
products. On the other hand, the respondents argue that the opinion of the BIR, as the government
agency charged with the implementation and interpretation of the tax laws, is entitled to great
respect.
HON. RAMON BAGATSING, et al. v. HON. PEDRO RAMIREZ, et al.
74 SCRA 306

Nor does the delegation of the collection of market stall fees to a private corporation affect
the public purpose of the imposition. 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 of 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.

EUSEBIO VILAANUEVA, et al. v. CITY OF ILOILO,


26 SCRA 578

Section 2 of the Local Autonomy Act confers on local governments broad taxing authority
which are extends to almost "everything, excepting those which are mentioned therein" provided
that the tax so levied is "for public purposes, just and uniform," and does not transgress any
constitutional provision or is not repugnant to a controlling statute. Thus, when a tax, levied under
the authority of a city or municipal ordinance, is not within the exceptions and limitations, the same
comes within the ambit of the general rule pursuant to the rules of expressio unius est exclusio
alterius and exception format regulum in casibusnon except.

COMMISSIONER OF INTERNAL REVENUE v. HON. COURT OF APPEALS, HON.


COURTOF TAX APPEALS and FORTUNE TOBACCO CORPORATION
261 SCRA 236

Prior to the effectivity of R.A. 7654, cigarette brands Hope Luxury, Premium More and
Champion were considered local brands subjected to an ad valorem tax at the rate of 20-45%.
However, on 1 July 1993 or two (2) days before R.A. 7654 took effect, petitioner Commissioner of
Internal Revenue issued RMC 37-93 reclassifying "Hope, More and Champion being manufactured
by Fortune Tobacco Corporation . . . (as) locally manufactured cigarettes bearing a foreign brand
subject to the 55% ad valorem tax on cigarettes". A copy of RMC 37-93 was sent to Fortune Tobacco
via telefax, but it was addressed to no one in particular.

On 15 July 1993, Fortune Tobacco received, by ordinary mail, a certified xerox copy of
RMC 37-93.

Respondent corporation sought a review, reconsideration and recall of RMC 37-93 but was
forthwith denied by the Appellate Division of the Bureau of Internal Revenue. As a consequence,
on 30 July 1993, private respondent was assessed an ad valorem tax deficiency. Respondent
corporation went to the Court of Tax Appeals (CTA) on a petition for review.

The CTA held that petitioner Commissioner of Internal Revenue failed to observe due
process of law in issuing RMC 37-93 as there was no prior notice and hearing.

The Supreme Court upheld the CTA, holding that when an administrative rule is merely
interpretative in nature, its applicability needs nothing further that its bare issuance for it gives no
real consequence more than what the law itself has already prescribed. When, upon the other hand,
the administrative rule goes beyond merely providing for the means that can facilitate or render least
cumbersome the implementation of the law but substantially adds to or increases the burden of those
governed, as in the case at bar, it behooves the agency to accord at least to those directly affected a
chance to be heard, and thereafter to be duly informed, before the new issuance is given the force
and effect of law.

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