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Lutz vs. Araneta 98 Phil 48

The case involved a tax levied under the Sugar Adjustment Act on owners who leased land for sugar cane cultivation. The plaintiff sought to recover taxes paid, arguing the tax supported only the sugar industry. The Court held that selecting a particular class for taxation is within the state's power and does not infringe the constitution, as it is rational for the tax to be paid by those who benefit from the funds. Further, some inequality resulting from singling out a class for taxation is permissible.

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38 views1 page

Lutz vs. Araneta 98 Phil 48

The case involved a tax levied under the Sugar Adjustment Act on owners who leased land for sugar cane cultivation. The plaintiff sought to recover taxes paid, arguing the tax supported only the sugar industry. The Court held that selecting a particular class for taxation is within the state's power and does not infringe the constitution, as it is rational for the tax to be paid by those who benefit from the funds. Further, some inequality resulting from singling out a class for taxation is permissible.

Uploaded by

Carlo Usman
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Lutz vs.

Araneta; 98 Phil 48

Facts:

In 1940, Commonwealth Act No. 567, otherwise known as the Sugar Adjustment Act
was promulgated.

Section 2, provides for an increase of the existing tax on the manufacture of sugar,
while section 3 levies on owners or persons in control of lands devoted to the cultivation
of sugar cane and ceded to others for a consideration, on lease or otherwise

All collections made under this Act shall accrue to a special fund in the Philippine
Treasury, to be known as the ’Sugar Adjustment and Stabilization Fund,’

Plaintiff, Walter Lutz, in his capacity as Judicial Administrator of the Intestate Estate of
Antonio Jayme Ledesma, seeks to recover from the Collector of Internal Revenue the
sum of P14,666.40 paid by the estate as taxes, under section 3 of the Act, alleging that
such tax is unconstitutional and void, being levied for the aid and support of the sugar
industry exclusively, which in plaintiff’s opinion is not a public purpose for which a tax
may be constitutionally levied.

Issue:

Whether or not singling out a particular class for taxation or exemption infringe
constitution.

Held:

No, it appears rational that the tax be obtained precisely from those who are to be
benefited from the expenditure of the funds derived from it. At any rate, it is inherent
in the power to tax that a state be free to select the subjects of taxation, and it has
been repeatedly held that "inequalities which result from a singling out of one particular
class for taxation, or exemption infringe no constitutional limitation"

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