PAL VS. EDU, 164 SCRA 320 (1988) Facts of the case:The disputed re gistration fees were imposed by the commissioner Elevate pursuant to Section 8, RA 4136,the 4136, the Land Transportation and Traffic Code.PAL as a corporation is engaged in t he air transportation business under the legislative franchise. Underits franchise, PAL is exempt from the payment of taxes.In 1971 however, appellee Commissioner elevate issued a regulation requiring all tax exempt entitie entities, s, amongthe amongthem m PAL to pay pay motor motor vehicle vehicle registrati registration on fees.Desp fees.Despite ite PAL appellee appellee refused refused to register register the appellant appellant
s protest, protest,
s motor vehicle vehicless unless the amountsi amountsimposed mposed were were paid. PAL
thus paid, under protest, P19,529.75 as registration fees of its motor vehicles.After paying under protest, PAL wrote to Commissioner Edu demanding a refund of the amounts paid,invoking Calalang vs. Lorenzo where it was held that motor vehicle registration fees are in reality taxes from thepayment of which PAL is exempt by virtue of its legislative franchise.Edu denied request for refund based on Republic v. Phil. Rabbit Bus, that motor vehicle re gistration fees areregulatory and not revenue measures and, therefore, do not come within the exemption granted to PAL under itsfranchise.PAL filed the complaint against LTC Commissioner EDu and National Treasurer Carbonell.ISSUE: What is the nature of motor vehicle registration fees? Are they taxes or regulatory fees? RULING ON TAX VS. LICENSE AND REGULATORY FEE SC ruled that motor vehicles registration fees are TAXES. Fees may be regarded as taxes even though theyalso serve as instruments of regulation because taxation m ay be made as an implementation of the State
s policepower. policepower. But But if the the purpose purpose is primarily primarily REVENUE REVENUE,, or if revenue revenue is atleast, atleast, one one of the real
and substantial purposes,then the exaction is properly called a TAX. RULING ON PURPOSES OF TAX, OBJECTIVE OF TAXATION: GENERAL, FISCAL REVENUE The Legislative intent and purpose behind the law re quiring owners of vehicles , to pay for theirregistration is mainly to raise funds for the construction and maintenance of highways and, to a much lesserdegree, pay for the operating expenses of the administering agency.It is possible for an exaction to be both a tax and a regulation. License fees are charges, looked to as asource of revenue as well as a means of regulation. reg ulation. The fees may be properly regarded as taxes eventhough theyalso serve as an instrument of regulation. If the purpose is primarily revenue, o r if revenue is atleast one of thereal and substantial purposes, then the exaction is properly called a TAX. RULING ON NON-DELEGABILITY OF THE POWER TO TAX It is clear from the provisions of section 73 of Commonwealth Act 123 and section 61 of the LandTransportation and Traffic Code that the legislative intent and purpose behind the law r equiring owners of vehicles
to pay for their registration is mainly to raise funds for the construction and maintenance of highways and to amuch lesser degree, pay for the operating expenses of the administering agency.There is a valid delegation to the Land Transportation Office. Simply put, if the exaction under RA 4136were merely a regulatory fee, the imposition on RA 5448 need not be an other
fees
additional
tax. RA4136 also speaks of
such as the special permit fees for certain types of motor vehicles (sec.10) and additional
fees forchange of registration (sec.11). These are not to be understood as taxes because such fees are very minimal to berevenue-raising. Thus they are not mentioned by Sec. 59 (b) of the Code as taxes like the motor vehicleregistration fee and chauffers
license fee. Such fees are to go into the expenditures
of the Land TransportationCommission as provided for in the last proviso of Sec. 61 .Motor vehicle registration fees are at present exacted pursuant to the Land Transportation and TrafficCode are actually taxes intended for additional revenues of government even if one-fifth or less of the amountcollected is set aside for the o perating expenses of the agency administering the program.
