Ormoc Sugar Company Inc. vs Treasurer of Ormoc City

G.R. No. L-23794     February 17, 1968
ORMOC SUGAR COMPANY, INC., Plaintiff-Appellant, vs. THE TREASURER OF ORMOC CITY, THE MUNICIPAL BOARD OF ORMOC CITY, HON. ESTEBAN C. CONEJOS as Mayor of Ormoc City and ORMOC CITY, Defendants-Appellees.

Facts:

The Municipal Board of Ormoc City passed a municipal tax ordinance imposing on any and all productions of centrifugal sugar milled at the Ormoc Sugar Company Inc. one percent per export sale to the US and other foreign countries. Said company filed before the CFI of Leyte a complaint against the City of Ormoc, its Treasurer, Municipal Board and Mayor, alleging sasid ordinance is violative of the equal protection clause and the rule of uniformity of taxation, among other things.  Ormoc Sugar Company Inc. was the only sugar central in Ormoc City at the time.

Issue:

WON the constitutional limits on the power of taxation, specifically the EPC and uniformity of taxation, were infringed.

Held:

Yes. Though Ormoc Sugar Company Inc. is the only sugar central in the city of Ormoc at the time, the classification, to be reasonable, should be in terms applicable to future conditions as well. Said ordinance shoouldn’t be singular and exclusive as to exclude any subsequently established sugar central, of the same class as plaintiff, for coverage of the tax.

EPC applies only to persons or things identically situated and doesn’t bar a reasonable classificationof the subject of legislation. A classification is reasonable where: 1) it is based on substantial distinctions which make real differences; (2) these are germane to the purpose of the law; (3) the classification applies not only to present conditions but also to future conditions which are substantially identical to those of the present; (4) the classification applies only to those who belong to the same class.