FACTS
Commonwealth Act No. 567, also known as the Sugar Adjustment Act, was created to alleviate the financial setbacks in the sugar industry due to the imminent imposition of export taxes upon sugar, as well as the “eventual loss of its preferential position in the United States market,” by imposing tax on sugar crops.
Walter Lutz, in his capacity as Judicial Administrator of the Intestate Estate of Antonio Jayme Ledesma, sought for a refund for the taxes paid by the estate. Lutz argued that the imposition of tax by the subject law was unconstitutional and void because such imposition was levied for the aid and support of the sugar industry exclusively, which in his opinion is not a public purpose for which a tax may be constitutionally levied.
RULING: For the Government.
Analysis of the Act, particularly of section 6, will show that the tax is levied with a regulatory purpose, to provide means for the rehabilitation and stabilization of the threatened sugar industry. In other words, the act is primarily an exercise of the police power.
Once it is conceded that the protection and promotion of the sugar industry is a matter of public concern, it follows that the Legislature may determine within reasonable bounds what is necessary for its protection and expedient for its promotion.
Here, the legislative discretion must be allowed fully play, subject only to the test of reasonableness; and it is not contended that the means provided in the law bear no relation to the objective pursued or are oppressive in character.
