Ormoc Sugarcane Planters Asso., Inc. vs.

Municipal Board of Ormoc City, 22

SCRA 736, No. L-23793 February 23, 1968
Equal Protection
In 1964, Ormoc City passed a bill which read: There shall be paid to the City
Treasurer on any and all productions of centrifugal sugar milled at the Ormoc
Sugar Company Incorporated, in Ormoc City a municipal tax equivalent to one
per centum (1%) per export sale to the United States of America and other
foreign countries. Though referred to as a production tax, the imposition
actually amounts to a tax on the export of centrifugal sugar produced at Ormoc
Sugar Company, Inc. For production of sugar alone is not taxable; the only time
the tax applies is when the sugar produced is exported.
Ormoc Sugar paid the tax (P7,087.50) in protest averring that the same is
violative of Sec 2287 of the Revised Administrative Code which provides: It
shall not be in the power of the municipal council to impose a tax in any form
whatever, upon goods and merchandise carried into the municipality, or out of
the same, and any attempt to impose an import or export tax upon such goods
in the guise of an unreasonable charge for wharf age, use of bridges or
otherwise, shall be void. And that the ordinance is violative to equal protection
as it singled out Ormoc Sugar As being liable for such tax impost for no other
sugar mill is found in the city.
ISSUE: Whether or not there has been a violation of equal protection.
HELD: The SC held in favor of Ormoc Sugar. The SC noted that even if Sec
2287 of the RAC had already been repealed by a latter statute (Sec 2 RA 2264)
which effectively authorized LGUs to tax goods and merchandise carried in and
out of their turf, the act of Ormoc City is still violative of equal protection. The
ordinance is discriminatory for it taxes only centrifugal sugar produced and
exported by the Ormoc Sugar Company, Inc. and none other. At the time of the
taxing ordinances enactment, Ormoc Sugar Company, Inc., it is true, was the
only sugar central in the city of Ormoc. Still, the classification, to be reasonable,
should be in terms applicable to future conditions as well. The taxing ordinance
should not be singular and exclusive as to exclude any subsequently
established sugar central, of the same class as plaintiff, from the coverage of
the tax. As it is now, even if later a similar company is set up, it cannot be
subject to the tax because the ordinance expressly points only to Ormoc Sugar
Company, Inc. as the entity to be levied upon.

Taxing power; Chartered cities, municipalitie s a municipal districts; Rep. Act

4497, subsection 1 of section 2 construed.Where it appears that subsection 1
of section 2 of Rep. Act 2264 as amended by Rep. Act 4497 did not exist in Rep.

Act 2264 before it was amended, the amendment clearly denies from chartered
cities, municipalities and municipal districts the power to impose export taxes,
and in effect repeals the Ormoc City ordinance imposing export tax.