DAVID G. NITAFAN, WENCESLAO M. POLO, and MAXIMO A. SAVELLANO, JR., petitioners, vs. COMMISSIONER OF INTERNAL REVENUE and THE FINANCIAL OFFICER, SUPREME COURT OF THE PHILIPPINES, respondents.

on

IMPORTANT CASE


DAVID G. NITAFAN, WENCESLAO M. POLO, and MAXIMO A. SAVELLANO, JR., petitioners,

vs.

COMMISSIONER OF INTERNAL REVENUE and THE FINANCIAL OFFICER, SUPREME COURT OF THE PHILIPPINES, respondents.

G.R. No. 78780               July 23, 1987


TOPIC: Purpose of Statutory Construction

MELENCIO-HERRERA, J.:


FACTS:
1. Herein petitioner judges Nitafan, Polo, and Savellano sought to perpetually cease the Commissioner of Internal Revenue and Financial Officer of the Supreme Court from withholding  taxes from their salary which is contrary to Section 10, Article VIII of the 1987 Constitution and the supposed independence of the judiciary.

2. There had been a previous ruling that reaffirmed the Chief Justice's directive to Fiscal Management and Budget 
Office of this Court to continue with the deduction of the withholding taxes from the 
salaries of the Justices of the Supreme Court as well as from the salaries of all other 
members of the judiciary. That should have resolved the current issue but to be clear, the Court deemed best to settle the issue thru this judicial pronouncement.


ISSUE: 
Whether or not the petitioner judges' salary be exempt from tax by virtue of Section 10, Article VIII of the 1987 Constitution mandating that during their continuance in 
office, their salary shall not be decreased.


RULING:
NO. The judges' salary shall not be exempt from income tax. Section 10, Articles VIII, of the 1987 Constitution states that "That
salary of the Chief Justice and of the Associate Justices of the Supreme Court, 
and of judges of lower courts shall be fixed by law. During their continuance in office, 
their salary shall not be decreased." It is plain that the Constitution authorizes the Congress to pass a law fixing another rate of 
compensation of Justices and Judges but such rate must be higher than that which they are  receiving at the time of enactment, or if lower, it would be applicable only to those appointed after its approval. It would be a strained construction to read into the provision an exemption from taxation in the light of the discussion in the Constitutional Commission. Also, looking into the intent of the 1987 Constitution framers, the drafted Section 10, Art. VIII provision which included the phrase:  their salary shall not be diminished nor subjected to income tax and which was omitted and changed into their salary shall not be decreased. This is to prevent the judiciary from being the sole privileged department free from income taxation while the legislative, executive, and citizens of the Republic are paying what is due.

Thus, deduction of income tax from petitioner judges' salaray shall continue since they shall share the
cost of maintaining the government and the burden of general income taxation equitably.


RATIONALE:
When the purpose cannot be thoroughly derived from the words used in the law, 
courts attempt to ascertain the intent of the legislature by looking at legislative history and other related sources.




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