Case Digest (G.R. No. 168056) Core Legal Reasoning Model
Core Legal Reasoning Model
#### Facts
Republic Act No. 9337, signed into law on May 24, 2005 with effectivity on July 1, 2005, amended key provisions of the 1997 National Internal Revenue Code (NIRC) to restructure the Value-Added Tax (VAT) system. The law consolidated three legislative measures—House Bills 3555 and 3705, and Senate Bill 1950—through a bicameral conference committee. Petitioners challenged the provisions of R.A. 9337 that:
- Amended Sections 106, 107, 108 of the NIRC to impose a 10% VAT rate and gave the President the “stand-by” authority to raise it to 12% upon any of two conditions: VAT collections exceed 2 4/5% of GDP or the national government deficit exceeds 1 1/2% of GDP (Sections 4, 5, 6 of the law).
- Added Section 8, amending NIRC Section 110, to cap creditable input tax at 70% of output VAT and require 60-month amortization of input VAT paid on capital goods over P1 million.
- Amended NIRC Section 114(C) by requiring government agencies to withhold a 5% final VAT on purchases of goods
... Case Digest (G.R. No. 168056) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Legislative Enactment
- On May 24, 2005, President Arroyo signed Republic Act No. 9337 (R.A. 9337) amending various sections of the 1997 National Internal Revenue Code (NIRC).
- R.A. 9337 raised the value-added tax (VAT) rate from 10% to 12% under specified fiscal conditions, imposed limits on input-tax credits, introduced a 5% final withholding VAT on government transactions, and amended provisions on other taxes.
- Consolidated Petitions
- G.R. No. 168056 (ABAKADA Guro Party List et al.) challenged Sections 4–6 (VAT rate increase) as unconstitutional delegation of taxing power.
- G.R. No. 168207 (Pimentel et al.) attacked the same provisions as undue delegation, lack of due process and certainty.
- G.R. No. 168461 (Shell Dealers et al.) assailed Section 8 (70% cap on input-tax credit and 60-month amortization) and Section 12 (5% final withholding VAT).
- G.R. No. 168463 (Escudero et al.) questioned the bicameral conference committee’s authority and the no-amendment rule.
- G.R. No. 168730 (Gov. Garcia) alleged confiscatory effect on local business and budget misallocation.
- Government Response
- The Solicitor General invoked the presumption of constitutionality, defending R.A. 9337 as essential fiscal reform.
- Temporary restraining order issued July 1, 2005; oral arguments held July 14, 2005.
Issues:
- Procedural Issues
- Did R.A. 9337 violate Article VI, Section 24 (origination of revenue bills)?
- Did the bicameral conference committee process contravene Article VI, Section 26(2) (three-reading and no-amendment rules)?
- Substantive Issues
- Do Sections 4–6 (amending NIRC Secs. 106–108) constitute an unconstitutional delegation of legislative power (Art. VI, Sec. 28(2)) or violate due process (Art. III, Sec. 1)?
- Do Section 8 (amending NIRC Secs. 110(A)(2) & 110(B)) and Section 12 (amending NIRC Sec. 114(C)) violate due process (Art. III, Sec. 1) or the uniformity/equity clause (Art. VI, Sec. 28(1))?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)