Gregorio Perfecto,
plaintiff-appellee, vs. Bibiano Meer, Collector of Internal Revenue,
defendant-appellant G.R. No. L-2348. February 27, 1950. 85 Phil 522
Facts:
In
April, 1947 the Collector of Internal Revenue required plaintiff-appellee to
pay income tax upon his salary as member of this Court during the year 1946. After
paying the amount, he instituted this action in the Manila Court of First
Instance contending that the assessment was illegal, his salary not being
taxable for the reason that imposition of taxes thereon would reduce it in
violation of the Constitution.
Issue:
Whether or not the imposition of an income tax upon this salary in 1946 amount
to a diminution thereof.
Ruling:
Ruling:
The Supreme Court held that unless and until the Legislature approves an
amendment to the Income Tax Law expressly taxing "that salaries of judges
thereafter appointed", salaries of judges are not included in the word
"income" taxed by the Income Tax Law. Two paramount circumstances may
additionally be indicated, to wit: First, when the Income Tax Law was first
applied to the Philippines 1913, taxable "income" did not include
salaries of judicial officers when these are protected from diminution. That
was the prevailing official belief in the United States, which must be deemed
to have been transplanted here; and second, when the Philippine Constitutional
Convention approved (in 1935) the prohibition against diminution off the
judges’ compensation, the Federal principle was known that income tax on
judicial salaries really im