Case Summary (G.R. No. 231298)
Procedural History
The MTCC in Dumaguete City found Estoconing guilty on July 18, 2014, sentencing him to 2–3 years’ prison and ₱50,000 fine. The RTC affirmed that ruling on December 18, 2014. On appeal, the Court of Appeals likewise dismissed Estoconing’s petition on July 29, 2016. He then sought certiorari relief in the Supreme Court.
Issue
Whether a cooperative registered under RA 9520, and enjoying tax‐exempt status, is nonetheless obliged to extend a 20% senior citizen discount to its patrons, including its own senior citizen members.
Harmonization of Conflicting Laws
Under the 1987 Constitution’s mandate to harmonize laws and uphold the presumption of legality, the Court examined the interplay between the Expanded Senior Citizens Act (RA 7432 as amended) and the Philippine Cooperative Code (RA 9520). Both statutes are valid, but their provisions must be read together to form a “complete, consistent and intelligible system.”
Senior Citizens Act Tax Scheme
The Expanded Senior Citizens Act compels establishments to grant senior citizens a 20% discount and permits businesses to recoup that amount via a tax deduction based on the net cost of goods sold or services rendered. This scheme is a valid exercise of the State’s police power to promote social justice and public welfare, as upheld in Carlos Superdrug and Manila Memorial Park.
Cooperative Code Tax Exemptions
RA 9520 grants registered cooperatives broad tax exemptions: those transacting with members are wholly exempt from internal revenue taxes, while those dealing with non‐members enjoy exemption on member transactions and other preferential treatment up to specified thresholds. The Silliman University Cooperative held a valid Certificate of Tax Exemption under RA 9520.
Constitutional Principles
The 1987 Constitution recognizes the social function of property and the State’s duty to support cooperatives as instruments of social justice. Tax exemptions accorded to cooperatives reflect this policy. Conversely, due process safeguards against deprivation of property without just compensation. Forcing a tax‐exempt cooperative to grant a discount that it cannot offset by tax benefits would amount to a confiscation without due process.
Court’s Ruling
The prosecution
...continue readingCase Syllabus (G.R. No. 231298)
Facts
- Manuel Utzurrum Jr., a bona fide senior citizen, regularly purchased Mountain Dew soft drinks from the Silliman University Cooperative canteen managed by petitioner Roberto A. Estoconing.
- On eight separate occasions between March 30 and September 22, 2011, Utzurrum identified himself as a senior citizen and presented his Senior Citizen ID, yet the cooperative refused to grant the mandated 20% discount.
- Utzurrum wrote several letters to Estoconing in 2011 and filed complaints with the Office of Senior Citizen Affairs and the barangay, but no response or settlement was reached. The barangay issued a certificate to file action on October 8, 2011.
- Estoconing, professor at Silliman University and general manager of its cooperative, maintained that the cooperative was exempt from the Expanded Senior Citizens Act and that Utzurrum’s membership benefits (patronage refund and interest on capital) precluded a double discount.
Procedural History
- January 9, 2012: Information filed in MTCC Cities, Dumaguete City, charging Estoconing with violation of Republic Act No. 7432 as amended by RA 9994.
- July 18, 2014: MTCC Cities, Branch 2, found Estoconing guilty—imposed an indeterminate penalty of 2 to 3 years and a ₱50,000 fine.
- December 18, 2014: RTC Branch 32, Dumaguete City, affirmed the MTCC conviction in toto.
- Petition before the Court of Appeals; July 29, 2016: CA Special 18th Division dismissed the petition and affirmed the conviction.
- October 7, 2020: Supreme Court granted Estoconing’s Rule 45 Petition for Review on Certiorari.
Issue
- Whether a cooperative, duly registered under the Cooperative Code of 2008, operating a canteen or restaurant selling hot meals, snacks, and beverages, is legally required to extend the 20% senior citizen discount under the Expanded Senior Citizens Act to its members (and non-members) when it holds a certificate of tax exemption that precludes a tax deduction for such discounts.
Applicable Laws and Regulations
- Republic Act No. 7432 (Senior Citizens Act of 1992), as amended by RA 9257 (Expanded Senior Citizens Act of 2003) and RA 9994 (Expanded Senior Citizens Act of 2010) – mandates 20% discount for senior citizens in restaurants, with private establishments entitled to claim discounts as tax credit (RA 7432) or tax deduction (RA 9257 and RA