Gomez vs. Palomar- FACTS: Petitioner Benjamin Gomez mailed a letter at the

post office in San Fernando, Pampanga. It did not bear the special anti-TB stamp required by the RA 1635. It was returned to the petitioner. Petitioner now assails the constitutionality of the statute claiming that RA 1635 otherwise known as the Anti-TB Stamp law is violative of the equal protection clause because it constitutes mail users into a class for the purpose of the tax while leaving untaxed the rest of the population and that even among postal patrons the statute discriminatorily grants exemptions. The law in question requires an additional 5 centavo stamp for every mail being posted, and no mail shall be delivered unless bearing the said stamp.

-- ISSUE: Is the Anti-TB Stamp Law unconstitutional, for being

allegedly violative of the equal protection clause?-- HELD: No. It is settled that the legislature has the inherent

power to select the subjects of taxation and to grant exemptions. This power has aptly been described as "of wide range and flexibility." Indeed, it is said that in the field of taxation, more than in other areas, the legislature possesses the greatest freedom in classification. The reason for this is that traditionally, classification has been a device for fitting tax programs to local needs and usages in order to achieve an equitable distribution of the tax burden.

- The classification of mail users is based on the ability to pay, the enjoyment of a privilege and on administrative convenience. Tax exemptions have never been thought of as raising revenues under the equal protection clause.

Manila Race Horse Trainers vs. De La Fuente

Ormoc Sugar vs. Ormoc City- In 1964, Ormoc City passed a bill which read: “There shall

be paid to the City Treasurer on any and all productions of centrifugal sugar milled at the Ormoc Sugar Company Incorporated, in Ormoc City a municipal tax equivalent to one per centum (1%) per export sale to the United States of America and other foreign countries.” Though referred to as a “production tax”, the imposition actually amounts to a tax on the export of centrifugal sugar produced at Ormoc Sugar Company, Inc. For production of sugar alone is not taxable; the only time the tax applies is when the sugar produced is exported. Ormoc Sugar paid the tax (P7,087.50) in protest averring that the same is violative of Sec 2287 of the Revised Administrative Code which provides: “It shall not be in the power of the municipal council to impose a tax in any form whatever, upon goods and merchandise carried into the municipality, or out of the same, and any attempt to impose an import or export tax upon such goods in the guise of an unreasonable charge for wharfage, use of bridges or otherwise, shall be void.” And that the ordinance is violative to equal protection as it singled out Ormoc Sugar As being liable for such tax impost for no other sugar mill is found in the city.

-- ISSUE: Whether or not there has been a violation of equal

protection.-- HELD: The SC held in favor of Ormoc Sugar. The SC noted

that even if Sec 2287 of the RAC had already been repealed by a latter statute (Sec 2 RA 2264) which effectively authorized LGUs to tax goods and merchandise carried in and out of their turf, the act of Ormoc City is still violative of equal protection. The ordinance is discriminatory for it taxes only centrifugal sugar produced and exported by the Ormoc Sugar Company, Inc. and none other. At the time of the taxing ordinance’s enactment, Ormoc Sugar Company, Inc., it is true, was the only sugar central in the city of Ormoc. Still, the classification, to be reasonable, should be in terms applicable to future conditions as well. The taxing ordinance should not be singular and exclusive as to exclude any subsequently established sugar central, of the same class as plaintiff, from the coverage of the tax. As it is now, even if later a

similar company is set up, it cannot be subject to the tax because the ordinance expressly points only to Ormoc Sugar Company, Inc. as the entity to be levied upon.

Fisher vs.Trinidad- Fisher was a stockholder of the Philippine American Drug

company (PADC)- PADC declared a stock dividend for the year which was

proportionately divided among stockholders- Fisher received- Trinidad demanded payment of income tax on the

dividend received by Fisher- W/N stock dividend is income?- No- Stock dividends represent undistributed increase in capital

of a firm

Madrigal vs. Rafferty- Madrigal married Paterno- Instituted conjugal partnership- Madrigal filed for declaration of his income tax and

contending that is was the income of the conjugal partnership and should be divided by 2

- W/N it should divided by 2- No- Capital is wealth, while income is the service of wealth- capital and income is that capital is a fund; income is a

flow.- Paterno has no estate and income, actually and legally

vested in her and entirely distinct from her husband’s property