inter provincial autobus v. cir_presentation

8/3/2019 Inter Provincial Autobus v. CIR_PRESENTATION

1/12

INTERPROVINCIAL AUTOBUS VS.COLLECTOR OF INTERNAL REVENUE

GR NO. L-6741 (1956)

Rule-Making Power of Administrative Bodies


2/12

FACTS

Interprovincial Autobus is a common carrier engaged intransporting passengers and freight. It was assessedfor documentary tax by the provincial revenue agentfor each of its stubs of freight receipts.

The carriers conductors daily reports and availablestubs did not state the value of goods transported.

Thus, the provincial revenue agent assumed that eachof the freight receipts amounted to more than Php5and assessed a documentary stamp tax of Php0.04 oneach pursuant to Sections 121 and 127 of the RevisedDocumentary Stamp Tax Regulations of theDepartment of Finance which state:


3/12

FACTS

SEC. 121. Basis of the tax and affixture of stamps. Bills oflading are exempt from the documentary stamp tax imposedby paragraphs (q) and (r) of section 1449 of the AdministrativeCode when the value of the goods shipped is P5 or less. Unlessthe bill of lading states that the goods are worth P5 or less, it

must be held that the tax is due, and internal revenue officerswill see to it that the tax is paid in all cases where the bill oflading does not state that the shipment is worth P5 or less.

SEC. 127. Chits, memorandum slips, and other papers not inthe usual commercial form of bills of lading, when used by

common carriers in the transportation of merchandise orgoods for the collection of fees therefor are considered as billsof lading, and the original thereof issued or used should bearthe documentary stamp as provided by paragraphs (q) and (r)of section 1449 of the Administrative Code.


4/12

ISSUE

Is the regulation valid?

I

n other words, did the Secretary of Financeinfringe or violate any right of the taxpayerwhen he directed that the tax is to becollected in all cases where the bill of ladingor receipt does not state that the shipment isworth P5 or less, or, when he created apresumption of liability to the tax if thereceipt fails to state such value?


5/12

RULING

Yes, it is valid. The above regulation was promulgatedunder the authority of section 79 (B) of theAdministrative Code (originally section 2 of Act 2803),which expressly provides:

The Department Head shall have power to promulgate,whenever he may see fit to do so, all rules, regulations, orders,circulars, memorandums, and other instructions, not contraryto law, necessary to regulate the proper working andharmonious and efficient administration of each and all of the

offices and dependencies of his Department, and for the strictenforcement and proper execution of the laws relative tomatters under the jurisdiction of said Department; but noneof said rules or orders shall prescribe penalties for theviolation thereof, except as expressly authorized by law.


6/12

RULING

The regulation falls within the scope of the

administrative power of the Secretary of

Finance, as authorized in the RevisedAdministrative Code, because it is essential

to the strict enforcement and proper

execution of the law which it seeks to

implement. Said regulations have the forceand effect of law.


7/12

RULING

In the very nature of things in many cases it becomesimpracticable for the legislative department of theGovernment to provide general regulations for thevarious and varying details for the management of aparticular department of the Government. It thereforebecomes convenient for the legislative departmentof the Government, by Law, in a most general way, toprovide for the conduct, control and management ofthe work of the particular department of theGovernment; to authorize certain persons, in charge

of the management, control, and direction of theparticular department, to adopt certain rules andregulations providing for the detail of themanagement and control of such department.


8/12

RULING

Such regulations have uniformly been held to havethe force of law, whenever they are found to be inconsonance and in harmony with the general

purposes and objects of the law. Such regulations,once established and found to be in conformity with

the general purposes of the law, are just as bindingupon all of the parties, as if the regulations had

been written in the original law itself. (UnitedStates vs. Grimaud, 22 U. S., 506; Williamson vs.United States, 207 U. S., 425; United States vs.United Verde Copper Co., 196 U. S., 207.) (UnitedStates vs. Tupasi Molina, 29 Phil., 119, 125.)


9/12

RULING

The regulation is not only useful, practical andnecessary for the enforcement of the law on the tax onbills of lading and receipts, but also reasonable in itsprovisions.

If tax officers were to assess or collect the tax only whenthey find that the value of the goods covered by thereceipts is more than five pesos, the assessment andcollection of the tax would be well-nigh impossible, as itis impossible for tax collectors to determine from the

receipts alone, if they do not contain the value of thegoods, whether the goods receipted for exceed P5, ornot. The regulation impliedly required the statement ofthe value of the goods in the receipts; so that thecollection of the tax can be enforced.


10/12

RULING

It is to be noted that the regulation does notpurport to modify or change the law in the sensethat when the value of the merchandise (for

which the receipt is issued) does not appearthereon the tax shall always be imposed. Such ameaning would have the effect of changing thelaw; the regulation should not be understood in

this illegal or authorized sense. The regulationshould be considered merely as a directive tointernal revenue officers to assess the tax andcollect the same.


11/12

RULING

It only creates a presumption of the liability ofthe taxpayer, which presumption, however, isnot conclusive upon the taxpayer who canadduce evidence that the tax is not collectiblebecause the value of the merchandise concerneddoes not exceed the amount of P5. Ourconclusion is that the receipts must have beenissued for shipments or merchandise in excess of

P5 in value. Evidence submitted by plaintifffailed to prove that the merchandise for whichreceipts were issued were actually worth P5 orless.


12/12

THE END

inter provincial autobus v. cir_presentation

Documents