FACTS
In 1960, the City of Butuan enacted Ordinance No. 110, which was subsequently amended by Ordinance No. 122, imposing a tax on any person or association of P0.10 per case of 24 bottles of soft drinks.
Pepsi-Cola, which had a warehouse in the city for the storage of its products, challenged said ordinance, arguing that the exaction of taxes was an undue delegation of legislative power.
RULING
The Supreme Court ruled in favor of Pepsi-Cola.
The general principle against delegation of legislative powers, in consequence of the theory of separation of powers is subject to one well-established exception, namely: legislative powers may be delegated to local governments—to which said theory does not apply—in respect of matters of local concern.
So while the City of Butuan has the power to impose taxes, the subject ordinance is still invalid for being unjust and discriminatory. It is violative of the uniformity required by the Constitution since only sales by “agents or consignees” of outside dealers would be subject to the tax.
Sales by local dealers, not acting for or on behalf of other merchants, regardless of the volume of their sales, and even if the same exceeded those made by said agents or consignees of producers or merchants established outside the City of Butuan, would be exempt from the disputed tax.
