Nitafan v. Commissioner of Internal Revenue Digest

INDEXES and FULL TEXT


https://lawphil.net/judjuris/juri1987/jul1987/gr_78780_1987.html
DAVID G. NITAFAN, WENCESLAO M. POLO, and MAXIMO A. SAVELLANO, JR., petitioners,vs.COMMISSIONER OF INTERNAL REVENUE and THE FINANCIAL OFFICER, SUPREME COURT OF THE PHILIPPINES, respondents.
G.R. No. 78780July 23, 1987


THESIS


Petitioner judges seek to prohibit respondent tax and court financial officers from making any deduction from their salary through the withholding tax.  Petitioner used 1987 Constitutional prohibition. After the court examined the constitutional deliberations, the clear and true intent of the framers was to make the salaries of members of the Judiciary taxable. Taxation is not diminution.

IN RELATION TO COURSE


STATUTORY CONSTRUCTION: The primary task in constitutional construction is to ascertain and thereafter assure the realization of the purpose of the framers and the sovereign will of the people in the adoption of the Constitution. (CONSTITUTIONAL CONSTRUCTION LESSON)

FACTS


Petitioner judges seek to prohibit respondent tax and court financial officers from making any deduction from their salary through the withholding tax.  Petitioner used 1987 Constitutional prohibition.
The provision in the 1987 Constitution, which petitioners rely on, reads:The salary of the Chief Justice and of the Associate Justices of the Supreme Court, and of judges of lower courts shall be fixed by law. During their continuance in office, their salary shall not be decreased. 4 (Emphasis supplied).

Under the 1986 Consti deliberations: 
“nor subjected to income tax” be deleted so as to “give substance to equality among the three branches in the government.

Commissioner Aquino: special privilege on taxation might, in effect, be a violation of the principle of uniformity in taxation and the equal protection clause.

Commissioner Regalado referred to Perfecto vs. Meer 8 that “the independence of the judges is of far greater importance than any revenue that could come from taxing their salaries.”

The commissioners/framers including Bernas, Rigos, and Reyes, after deliberations and suspension, decided to put a period (.) after the word “DECREASED” on the understanding that the salary of justices is subject to tax.

Father Bernas: “it is on the understanding that the doctrine in Perfecto vs. Meer and Dencia vs. David will not apply anymore.”
The interpellations and debates disclosed that the true intent of the framers of the 1987 Constitution, in adopting it, was to make the salaries of members of the Judiciary taxable.
The primary task in constitutional construction is to ascertain and thereafter assure the realization of the purpose of the framers and of the people in the adoption of the Constitution.

ISSUE


Is the deduction of withholding taxes from the salaries of the Supreme Court by the Commissioner of Internal Revenue and the Financial Officer of the Supreme Court constitutional? NO.

HELD


No. Taxation of judges is not diminution.
With the foregoing interpretation, and as stated heretofore, the ruling that “the imposition of income tax upon the salary of judges is a dimunition thereof, and so violates the Constitution” in Perfecto vs. Meer,13 as affirmed in Endencia vs. David 14 must be declared discarded.
The framers of the fundamental law,…have expressed in clear and unmistakable terms the meaning and import of Section 10, Article VIII, of the 1987 Constitution that they have adopted
The Constitution authorizes Congress to pass a law fixing another rate of compensation of Justices and Judges but such rate must be higher than that which they are receiving at the time of enactment, or if lower, it would be applicable only to those appointed after its approval

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