FACTS
Mission orders and letters of authority were issued by the BIR to its officers to examine the books of accounts and other accounting records of several Filipino jewelers.
The latter subsequently filed a petition for declaratory relief with writ of preliminary injunction and/or temporary restraining order, praying that Sections 126, 127(a) and (b) and 150(a) of the National Internal Revenue Code and Hdg. No. 71.01, 71.02, 71.03, and 71.04, Chapter 71 of the Tariff and Customs Code of the Philippines be declared unconstitutional and void, and that the Commissioner of Internal Revenue and Customs be prevented or enjoined from issuing mission orders and other orders of similar nature.
The RTC ruled in their favor, holding that the imposition of 3-10 percent tariff and customs duty, as well as 20 percent excise tax on jewelry, pearls, and other precious stones waas inoperative and without force and effect. Hence, the Commissioner's appeal before the SC.
RULING
The Supreme Court ruled for the BIR.
The RTC judge encroached upon matters properly falling within the province of legislative functions, overlooking the fact that it was not upon him to decide on the wisdom behind the taxes in question.
In imposing the aforementioned taxes and duties, the State, acting through the legislative and executive branches, is exercising its sovereign prerogative. It is inherent in the power to tax that the State be free to select the subjects of taxation, and it has been repeatedly held that “inequalities which result from a singling out or one particular class for taxation, or exemption, infringe no constitutional limitation.”
