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Coconut Oil Refiners Association, Inc. vs. Hon. Ruben Torres Facts

This case concerns a petition challenging the constitutionality of a law allowing tax-free importation and duty-free shops in special economic zones. The petitioner argued the law only permitted tax/duty exemptions for raw materials, capital and equipment. However, the court found the law did not expressly limit incentives in this way. The court also upheld a classification between businesses inside and outside the zones, finding it was based on reasonable distinctions and furthered the purpose of luring investment. The petition was dismissed.

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111 views1 page

Coconut Oil Refiners Association, Inc. vs. Hon. Ruben Torres Facts

This case concerns a petition challenging the constitutionality of a law allowing tax-free importation and duty-free shops in special economic zones. The petitioner argued the law only permitted tax/duty exemptions for raw materials, capital and equipment. However, the court found the law did not expressly limit incentives in this way. The court also upheld a classification between businesses inside and outside the zones, finding it was based on reasonable distinctions and furthered the purpose of luring investment. The petition was dismissed.

Uploaded by

Christina Aure
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

COCONUT OIL REFINERS ASSOCIATION, INC. vs. HON.

RUBEN TORRES

Facts:
This is a Petition to enjoin and prohibit the public respondent Ruben Torres in his capacity as Executive
Secretary from allowing other private respondents to continue with the operation of tax and duty-free
shops located at the Subic Special Economic Zone (SSEZ) and the Clark Special Economic Zone
(CSEZ). The petitioner seeks to declare Republic Act No. 7227 as unconstitutional on the ground that it
allowed only tax-free (and duty-free) importation of raw materials, capital and equipment. It reads:

The Subic Special Economic Zone shall be operated and managed as a separate customs territory
ensuring free flow or movement of goods and capital within, into and exported out of the Subic Special
Economic Zone, as well as provide incentives such as tax and duty-free importations of raw materials,
capital and equipment. However, exportation or removal of goods from the territory of the Subic
Special Economic Zone to the other parts of the Philippine territory shall be subject to customs duties
and taxes under the Customs and Tariff Code and other relevant tax laws of thePhilippines [RA 7227,
Sec 12 (b)].

Petitioners contend that the wording of Republic Act No. 7227 clearly limits the grant of tax incentives to
the importation of raw materials, capital and equipment only thereby violating the equal protection
clause of the Constitution.

He also assailed the constitutionality of Executive Order No. 97-A for being violative of their right to
equal protection. They asserted that private respondents operating inside the SSEZ are not different
from the retail establishments located outside.

The respondent moves to dismiss the petition on the ground of lack of legal standing and unreasonable
delay in filing of the petition.

Issues:
(1) Statutory Construction; Political Law; Taxation Law:
Whether or not there is a violation of equal protection clause.

Held:
(1) The SC ruled in the negative. The phrase ‘tax and duty-free importations of raw materials, capital
and equipment was merely cited as an example of incentives that may be given to entities operating
within the zone. Public respondent SBMA correctly argued that the maxim expressio unius est exclusio
alterius, on which petitioners impliedly rely to support their restrictive interpretation, does not apply
when words are mentioned by way of example.

The petition with respect to declaration of unconstitutionality of Executive Order No. 97-A cannot be,
likewise, sustained. The guaranty of the equal protection of the laws is not violated by a legislation
based which was based on reasonable classification. A classification, to be valid, must (1) rest on
substantial distinction, (2) be germane to the purpose of the law, (3) not be limited to existing conditions
only, and (4) apply equally to all members of the same class. Applying the foregoing test to the present
case, this Court finds no violation of the right to equal protection of the laws. There is a substantial
distinctions lying between the establishments inside and outside the zone. There are substantial
differences in a sense that, investors will be lured to establish and operate their industries in the so-
called ‘secured area and the present business operators outside the area. There is, then, hardly any
reasonable basis to extend to them the benefits and incentives accorded in R.A. 7227.

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