G.R. No. L-7859
December 22, 1955
Facts
The constitutionality of Commonwealth Act No. 567 or the Sugar Adjustment Act is being assailed. The said law imposes tax on the manufacture of sugar. Hence, petitioner prays to recover the tax he had paid alleging that such tax is unconstitutional and void, being levied for the aid and support of the sugar industry exclusively, which in plaintiff’s opinion is not a public purpose for which a tax may be constitutionally levied.
The pertinent provisions of the law are as follows:
Section 2 – increase of the existing tax on the manufacture of sugar, on a graduated basis, on each picul of sugar manufactures.
Section 3 – levies on owners or persons in control of lands devoted to the cultivation of sugar cane and ceded to others for a consideration, on lease or otherwise.
Section 6 – all collections shall accrue to the Philippine treasury and shall be paid put for only four purposes:- to place the sugar industry in a position to maintain itself despite the gradual loss of the preferential position of the Philippine sugar in the United States market??
- to readjust the benefits derived from the sugar industry by all of the component elements thereof
- to limit the production of sugar to areas more economically suited to the production thereof
- to afford labor employed in the industry a living wage and to improve their living and working conditions
Issue
Whether or not the law which imposes tax on the manufacture of sugar unconstitutional since it was not a valid exercise of police power?
Held
No, the law is constitutional since it is considered a valid exercise of police power. The test of reasonableness provides that there should be a valid objective and a valid means. In this case, there is a valid objective since protection and promotion of the sugar industry is a matter of public concern as sugar is one of the great industries of our nation. Quoting Johnson vs. State ex rel. Marey:
“The protection of a large industry constituting one of the great sources of the state’s wealth and therefore directly or indirectly affecting the welfare of so great a portion of the population of the State is affected to such an extent by public interests as to be within the police power of the sovereign.”
Additionally, there is valid means since the means provided in Section 6 of the law bear a relation to the objective pursued or are not oppressive in character. If objective and methods are alike constitutionally valid, no reason is seen why the state may not levy taxes to raise funds for their prosecution and attainment.
Hence, the law is constitutional since it is a valid exercise of police power.