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Valley Trading Co v. CFI of Isabela

Valley Trading Co. filed a complaint seeking to nullify a local ordinance that imposed graduated taxes on retailers. The ordinance was alleged to impose a sales tax in violation of the Local Tax Code. The court held that the circumstances did not warrant issuing a writ to stop collection of the tax. While the petitioner may suffer damage, any taxes paid could be refunded if they ruled in the petitioner's favor. Additionally, any damage to the petitioner's property rights was outweighed by the need of the state to collect tax revenues to fund government functions. The policy of law is to not delay tax collection, as taxes are vital to funding the government.

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1K views1 page

Valley Trading Co v. CFI of Isabela

Valley Trading Co. filed a complaint seeking to nullify a local ordinance that imposed graduated taxes on retailers. The ordinance was alleged to impose a sales tax in violation of the Local Tax Code. The court held that the circumstances did not warrant issuing a writ to stop collection of the tax. While the petitioner may suffer damage, any taxes paid could be refunded if they ruled in the petitioner's favor. Additionally, any damage to the petitioner's property rights was outweighed by the need of the state to collect tax revenues to fund government functions. The policy of law is to not delay tax collection, as taxes are vital to funding the government.

Uploaded by

Arahbells
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Valley Trading Co. vs. CFI of Isabela, et al. | G.R. No.

L-49529 | March 31, 1989

Facts: Petitioner Valley Trading filed a complaint with CFI of Isabela seeking a declaration of nullity of a
local ordinance which imposed a graduated tax on retailers, independent wholesalers and distributors.
Petitioner likewise prayed for issuance of writ of preliminary injunction to stop collection of said tax.
Petitioner takes the position that said ordinance imposes a "graduated fixed tax based on Sales" that "in
effect imposes a sales tax in contravention of Sec. 5, Charter I, par. (L) of P.D. 231 amended by P.D. 426
otherwise known as the Local Tax Code " which prohibits a municipality from imposing a percentage tax
on sales.

Issue: Whether or not the enforcement of said ordinance may be enjoined?

Held: Circumstances required for the writ to issue do not obtain in the case at bar. The damage that may
be caused to the petitioner will not, of course, be irreparable; where so indicated by subsequent events
favorable to it, whatever it shall have paid is easily refundable. Besides, the damage to its property rights
must perforce take a back seat to the paramount need of the State for funds to sustain governmental
functions. Compared to the damage to the State which may be caused by reduced financial resources,
the damage to petitioner is negligible. The policy of the law is to discountenance any delay in the
collection of taxes because of the oft-repeated but unassailable consideration that taxes are the lifeblood
of the Government and their prompt and certain availability is an imperious need

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