Case Summary (G.R. No. L-27683)
Evidence for Petitioner
The petitioner submitted multiple pieces of evidence, including consolidated balance sheets of the SSS for the years 1958 to 1962, showcasing a significant increase in total assets and income. For instance, the total assets rose from P17,234,869.61 in 1958 to P194,424,319.38 in 1962, with corresponding income growth. Additionally, the petitioner provided internal documents such as Resolution No. 669 of the SSS, which inquired whether a proposed construction project would be subject to oversight by the Bureau of Public Works, indicating the governance complexity of the SSS. Further documentation included letters denying customs exemption requests based on the Secretary of Finance's resolution and public information materials classifying the SSS under Republic Act 2254, aligning itself with government-owned corporations.
Evidence for Respondents
The respondents countered with evidence demonstrating the operational structure of the SSS, including organizational charts and employee position descriptions. They forwarded various regulatory documents relevant to the Social Security Act of 1954, asserting the quasi-legislative and quasi-judicial powers held by the SSS. An agreement acknowledging PAFLU as the sole bargaining agent was also presented, alongside a resolution indicating management’s responsibility for paying salaries during strikes. They provided an actuarial study and testimonies from SSS officials pointing toward the urgency and necessity for the SSS to operate with business efficiency akin to private entities, thus contesting the petitioner's exemption claim.
Discussion of Legal Issues
The legal contention focuses on whether the SSS qualifies for tax exemptions as a government entity. The Secretary of Finance's letter specified that the SSS functions similarly to a business corporation, indicating its proprietary nature which excludes it from tax exemptions designed for strictly governmental institutions. Furthermore, the construction of a facility by the SSS raised questions regarding its supervisory requirements. It highlighted a collective view from various government offices expressing that while the SSS has some governmental functions, its core operations are more aligned with those of a corporation that engages in proprietary activities.
Conclusion of Findings
The court found that the SSS
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Procedural Background
- The case was initiated with a motion filed by respondents on May 21, 1963, requesting the Court to reconsider its decision from April 30, 1963.
- Alternatively, the respondents sought to elevate the evidence from Civil Case No. 48516 for consideration in the motion for reconsideration.
- The Court granted the alternative request, and the relevant evidence was subsequently elevated for review.
Evidence Presented by the Petitioner
- A series of consolidated balance sheets from the Social Security System (SSS) for the years 1958 to 1962 were presented, showcasing significant growth in both total assets and income.
- 1958: Assets - P17,234,869.61; Income - P12,215,269.36
- 1959: Assets - P49,407,122.57; Income - P36,340,862.11
- 1960: Assets - P87,907,181.82; Income - P44,565,312.06
- 1961: Assets - P138,170,450.80; Income - P58,779,083.92
- 1962: Assets - P194,424,319.38; Income - P69,316,986.71
- Resolution No. 669 of the Social Security Commission (SSC) was submitted, which included opinions regarding the construction of a proposed building and its relation to governmental supervision.
- A letter from the Acting Secretary of Finance denied a request for exemption from customs du