Case Digest (G.R. No. 199669)
Case Digest (G.R. No. 199669)
Facts:
Southern Luzon Drug Corporation v. Department of Social Welfare and Development, G.R. No. 199669, April 25, 2017, the Supreme Court En Banc, Reyes, J., writing for the Court. Petitioner Southern Luzon Drug Corporation (petitioner) is a domestic drugstore operator; respondents are Department of Social Welfare and Development (DSWD), National Council for the Welfare of Disabled Persons (NCWDP/now NCDA), Department of Finance (DOF) and the Bureau of Internal Revenue (BIR). The petition assails Section 4(a) of Republic Act No. 9257 and Section 32 of Republic Act No. 9442 insofar as they require covered establishments to grant a 20% discount on medicines to senior citizens and persons with disability (PWDs) and allow establishments to treat the discount as a tax deduction (not a tax credit).The statutory background: R.A. No. 7432 (1992) originally granted a 20% senior citizen discount but limited beneficiaries by income and allowed private establishments to claim the discount as a tax credit. R.A. No. 9257 (2004) removed the income ceiling and changed the tax recoupment mechanism from tax credit to a tax deduction measured by the net cost of goods sold or services rendered; the DSWD promulgated IRR Article 8, Rule VI to implement the tax-deduction scheme. Separately, R.A. No. 7277 (1992) and its amendment R.A. No. 9442 (2007) extend a 20% medicines discount to PWDs and likewise provide for tax deductions; implementing rules and NCDA/DOH administrative orders set documentary and procedural safeguards for PWD identification and availment.
Petitioner and other drugstore owners previously litigated the senior-citizen discount in Carlos Superdrug Corporation v. DSWD, G.R. No. 166494, where this Court (in 2007) upheld Section 4(a) of R.A. No. 9257 as a valid exercise of police power. After Southern Luzon Drug filed a petition for prohibition in the Court of Appeals (CA-G.R. SP No. 102486) on February 26, 2008, the Court of Appeals dismissed the petition on June 17, 2011, finding (inter alia) that (a) the CA lacked original/appellate jurisdiction to decide the constitutionality of the statutes as to matters proper for the Regional Trial Court; (b) Carlos Superdrug precluded relitigation under stare decisis; and (c) a special civil action for prohibition was the wrong remedy because respondents were not exercising judicial, quasi-judicial or ministerial functions subject to prohibition. The CA denied reconsideration on November 25, 2011.
Petitioner brought a Petition for Review on Certiorari under Rule 45 to the Supreme Court, challenging the CA’s dismissal and asserting that (1) prohibition was an appropriate remedy; (2) Carlos Superdrug should not bar relitigation; (3) the 20% discount is an exercise of eminent domain requiring just compensation (not police power); (4) the laws violate equal protection by eliminating income-based qualification; and (5) the definitions of “disability” and “PWD” are vague. The Supreme Court heard and resolved the petition en banc.
Issues:
- Is a petition for prohibition a proper remedy to challenge the constitutionality or implementation of R.A. No. 9257 and R.A. No. 9442, and did the Court of Appeals err in dismissing the petition for lack of jurisdiction?
- Does the doctrine of stare decisis (or law of the case) bar relitigation of the issues given the prior decision in Carlos Superdrug?
- Do Sections 4(a) of R.A. No. 9257 and 32 of R.A. No. 9442 effect a taking requiring just compensation (eminent domain), or are they a valid exercise of police power?
- Do R.A. Nos. 9257 and 9442 violate the equal protection clause by removing income qualifications and extending the 20% discount to all senior citizens and PWDs?
- Are the statutory definitions of “disability” and “PWDs” in R.A. No. 9442 and its IRR unconstitutionally vague?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)