Law School Noob: [CASE DIGEST] Tio v. Videogram Regulatory Board (G.R. No. L-75697)

Saturday, September 11, 2021

[CASE DIGEST] Tio v. Videogram Regulatory Board (G.R. No. L-75697)

June 18, 1987

Valentin Tio, petitioner
Videogram Regulatory Board, Minister of Finance, Metro Manila Commission, City Mayor, and City Treasurer of Manila, respondents

FACTS:

Presidential Decree No. 1987, entitled "An Act Creating the Videogram Regulatory Board," was promulgated on October 5, 1985.

A month later, Presidential Decree No. 1994 amended the National Internal Revenue Code, providing that there shall be collected on each processed video-tape cassette, ready for playback, regardless of length, an annual tax of five pesos; Provided, That locally manufactured or imported blank video tapes shall be subject to sales tax.

In September 1986, Valentin Tio, who was doing business under the name and style of OMI Enterprises, filed a petition challenging the constitutionality of PD No. 1987, on the following grounds:

Section 10 thereof, which imposes a tax of 30% on the gross receipts payable to the local government is a RIDER and the same is not germane to the subject matter thereof;
The tax imposed is harsh, confiscatory, oppressive and/or in unlawful restraint of trade in violation of the due process clause of the Constitution;
There is no factual nor legal basis for the exercise by the President of the vast powers conferred upon him by Amendment No. 6;
There is undue delegation of power and authority;
The Decree is an ex-post facto law; and
There is over regulation of the video industry as if it were a nuisance, which it is not.

ISSUE:

Whether PD No. 1987 is unconstitutional. -- NO.

HELD:

The Supreme Court held that PD No. 1987 is constitutional.

The tax provision of PD No. 1987 is not a rider.

In fact, said provision is not allied and germane to, and is reasonably necessary for the accomplishment of, the general object of the decree, which is the regulation of the video industry through the Videogram Regulatory Board as expressed in its title. The tax provision is not inconsistent with, nor foreign to that general subject and title.

The tax imposed is not harsh and oppressive, confiscatory, and in restraint of trade.

The levy of the 30% tax is for a public purpose. It was imposed primarily to answer the need for regulating the video industry, particularly because of the rampant film piracy, the flagrant violation of intellectual property rights, and the proliferation of pornographic video tapes. And while it was also an objective of the Decree to protect the movie industry, the tax remains a valid imposition. That being said, the rate of tax is a matter better addressed to the taxing legislature.

The Decree does not constitute an undue delegation of legislative power.

The grant in Section 11 of the DECREE of authority to the BOARD to "solicit the direct assistance of other agencies and units of the government and deputize, for a fixed and limited period, the heads or personnel of such agencies and units to perform enforcement functions for the Board" is not a delegation of the power to legislate but merely a conferment of authority or discretion as to its execution, enforcement, and implementation.

The Decree is not an ex post facto law.

An ex post facto law is one which alters the legal rules of evidence, and authorizes conviction upon less or different testimony than the law required at the time of the commission of the offense. Applied to the challenged provision, there is no question that there is a rational connection between the fact proved, which is non-registration, and the ultimate fact presumed which is violation of the DECREE, besides the fact that the prima facie presumption of violation of the DECREE attaches only after a forty-five-day period counted from its effectivity and is, therefore, neither retrospective in character.

The video industry is not being over-regulated.

The video industry being a relatively new industry, the need for its regulation was apparent. While the underlying objective of the DECREE is to protect the moribund movie industry, there is no question that public welfare is at bottom of its enactment, considering "the unfair competition posed by rampant film piracy; the erosion of the moral fiber of the viewing public brought about by the availability of unclassified and unreviewed video tapes containing pornographic films and films with brutally violent sequences; and losses in government revenues due to the drop in theatrical attendance, not to mention the fact that the activities of video establishments are virtually untaxed since mere payment of Mayor's permit and municipal license fees are required to engage in business.

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