ADMINISTRATIVE LAW 2ND MEETING | 1
II. GENERAL POWERS OF ADMINISTRATIVE BODIES
a. Power of Rule Making
LAGUNA LAKE DEVELOPMENT AUTHORITY vs COURT OF APPEALS
FACTS: The residents of Tala Estate, Barangay Camarin, Caloocan City raised a
complaint with the Laguna Lake Development Authority (LLDA), seeking to stop
the operation of the City Government of Caloocan of an 8.6 hectare open
garbage dumpsite in Tala Estate, due to its harmful effects on the health of the
residents and the pollution of the surrounding water.
LLDA discovered that the City Government of Caloocan has been maintaining
the open dumpsite at the Camarin Area without a requisite Environmental
Compliance Certificate from the Environmental Management Bureau of the
DENR. They also found the water to have been directly contaminated by the
operation of the dumpsite.
LLDA issued a Cease and Desist Order against the City Government and other
entities to completely halt, stop and desist from dumping any form or kind of
garbage and other waste matter on the Camarin dumpsite.
The City Government went to the Regional Trial Court of Caloocan City to file an
action for the declaration of nullity of the cease and desist order and sought to be
declared as the sole authority empowered to promote the health and safety and
enhance the right of the people in Caloocan City to a balanced ecology within its
territorial jurisdiction.
LLDA sought to dismiss the complaint, invoking the Pollution Control Law that the
review of cease and desist orders of that nature falls under the Court of Appeals
and not the RTC.
RTC denied LLDA’s motion to dismiss, and issued a writ of preliminary injunction
enjoining LLDA from enforcing the cease and desist order during the pendency of
the case.
The Court of Appeals promulgated a decision that ruled that the LLDA has no
power and authority to issue a cease and desist order enjoining the
dumping of garbage.
The residents seek a review of the decision.
ISSUE: WoN the LLDA has authority and power to issue an order which, in its
nature and effect was injunctive.
THEORY OF THE PARTIES
City Government of Caloocan: As a local government unit, pursuant to the
general welfare provision of the Local Government Code, they have the mandate
to operate a dumpsite and determine the effects to the ecological balance over
its territorial jurisdiction.
LLDA: As an administrative agency which was granted regulatory and
adjudicatory powers and functions by RA No. 4850, it is invested with the power
and authority to issue a cease and desist order pursuant to various provisions in
EO No. 927.
RULING YES.
1. LLDA is mandated by law to manage the environment, preserve the
quality of human life and ecological systems and prevent undue ecological
disturbances, deterioration and pollution in the Laguna Lake area and
surrounding provinces and cities, including Caloocan.
While pollution cases are generally under the Pollution Adjudication Board under
the Department of Environment and Natural Resources, it does not preclude
mandate from special laws that provide another forum.
In this case, RA No. 4850 provides that mandate to the LLDA. It is mandated to
pass upon or approve or disapprove plans and programs of local government
offices and agencies within the region and their underlying
environmental/ecological repercussions.
The DENR even recognized the primary jurisdiction of the LLDA over the case
when the DENR acted as intermediary at a meeting among the representatives
of the city government, LLDA and the residents.
2. LLDA has the authority to issue the cease and desist order.
a. Explicit in the law.
· §4, par. (3) explicitly authorizes the LLDA to make whatever order may be
necessary in the exercise of its jurisdiction.
· While LLDA was not expressly conferred the power “to issue an ex-
parte cease and desist order” in that language, the provision granting authority to
“make (…) orders requiring the discontinuance of pollution”, has the same effect.
b. Necessarily implied powers.
Assuming arguendo that the cease and desist order” was not expressly conferred
by law, there is jurisprudence enough to the effect.
While it is a fundamental rule that an administrative agency has only such
power as expressly granted to it by law, it is likewise a settled rule that an
administrative agency has also such powers as are necessarily implied in
the exercise of its express powers. Otherwise, it will be reduced to a
“toothless” paper agency.

In Pollution Adjudication Board vs Court of Appeals, the Court ruled that the PAB
has the power to issue an ex-parte cease and desist order on prima
facie evidence of an establishment exceeding the allowable standards set by the
anti-pollution laws of the country.
LLDA has been vested with sufficiently broad powers in the regulation of the
projects within the LagunaLake region, and this includes the implementation of
relevant anti-pollution laws in the area.
RIZAL EMPIRE INSURANCE VS NLRC
Facts: In August, 1977, herein private respondent Rogelio R. Coria was hired by
herein petitioner Rizal Empire Insurance Group as a casual employee with a
salary of P10.00 a day. On January 1, 1978, he was made a regular employee,
having been appointed as clerk-typist, with a monthly salary of P300.00. Being a
permanent employee, he was furnished a copy of petitioner company's "General
Information, Office Behavior and Other Rules and Regulations." In the same
year, without change in his position-designation, he was transferred to the Claims
Department and his salary was increased to P450.00 a month. In 1980, he was
transferred to the Underwriting Department and his salary was increased to
P580.00 a month plus cost of living allowance, until he was transferred to the Fire
Department as filing clerk. In July, 1983, he was made an inspector of the Fire
Division with a monthly salary of P685.00 plus allowances and other benefits. On
October 15, 1983, private respondent Rogelio R. Coria was dismissed from work,
allegedly, on the grounds of tardiness and unexcused absences. Accordingly, he
filed a complaint with the Ministry of Labor and Employment (MOLE), and in a
Decision dated March 14, 1985 (Record, pp. 80-87), Labor Arbiter Teodorico L.
Ruiz reinstated him to his position with back wages. Petitioner filed an appeal
with the National labor Relations Commission (NLRC) but, in a Resolution dated
November 15, 1985 (Ibid, pp. 31-32), the appeal was dismissed on the ground
that the same had been filed out of time. Hence, the instant petition.
Issue: Whether or not NLRC committed a grave abuse of discretion amounting
to lack of jurisdiction in dismissing petitioner’s appeal on a technicality.
Held: Rule VIII of the Revised Rules of the National Labor Relations Commission
on appeal, provides:
SECTION 1. (a) Appeal. — Decision or orders of a labor Arbiter shall be final and
executory unless appealed to the Commission by any or both of the parties within
ten (10) calendar days from receipt of notice thereof. SECTION 6. No extension
of period. — No motion or request for extension of the period within which to
perfect an appeal shall be entertained. The record shows that the employer
(petitioner herein) received a copy of the decision of the Labor Arbiter on April 1,
1985. It filed a Motion for Extension of Time to File Memorandum of Appeal on
April 11, 1985 and filed the Memorandum of Appeal on April 22, 1985. Pursuant
to the "no extension policy" of the National Labor Relations Commission,
ADMINISTRATIVE LAW 2ND MEETING | 2
aforesaid motion for extension of time was denied in its resolution dated
November 15, 1985 and the appeal was dismissed for having been filed out of
time. The Revised Rules of the National Labor Relations Commission are clear
and explicit and leave no room for interpretation. Moreover, it is an elementary
rule in administrative law that administrative regulations and policies enacted by
administrative bodies to interpret the law which they are entrusted to enforce,
have the force of law, and are entitled to great respect (Espanol v. Philippine
Veterans Administration, 137 SCRA 314 [1985]). Under the above-quoted
provisions of the Revised NLRC Rules, the decision appealed from in this case
has become final and executory and can no longer be subject to appeal. Even on
the merits, the ruling of the Labor Arbiter appears to be correct; the consistent
promotions in rank and salary of the private respondent indicate he must have
been a highly efficient worker, who should be retained despite occasional lapses
in punctuality and attendance. Perfection cannot after all be demanded.
WHEREFORE, this petition is DISMISSED.
TIO VS VIDEOGRAM REGULATORY BOARD
In 1985, Presidential Dedree No. 1987 entitled “An Act Creating the Videogram
Regulatory Board” was enacted which gave broad powers to the VRB to regulate
and supervise the videogram industry. The said law sought to minimize the
economic effects of piracy. There was a need to regulate the sale of videograms
as it has adverse effects to the movie industry. The proliferation of videograms has
significantly lessened the revenue being acquired from the movie industry, and that
such loss may be recovered if videograms are to be taxed. Section 10 of the PD
imposes a 30% tax on the gross receipts payable to the LGUs.
In 1986, Valentin Tio assailed the said PD as he averred that it is unconstitutional
on the following grounds:
1. Section 10 thereof, which imposed the 30% tax on gross receipts, is a rider and
is not germane to the subject matter of the law.
2. There is also undue delegation of legislative power to the VRB, an administrative
body, because the law allowed the VRB to deputize, upon its discretion, other
government agencies to assist the VRB in enforcing the said PD.
ISSUE: Whether or not the Valentin Tio’s arguments are correct.
HELD: No.
1. The Constitutional requirement that “every bill shall embrace only one subject
which shall be expressed in the title thereof” is sufficiently complied with if the title
be comprehensive enough to include the general purpose which a statute seeks
to achieve. In the case at bar, the questioned provision is allied and germane to,
and is reasonably necessary for the accomplishment of, the general object of the
PD, which is the regulation of the video industry through the VRB as expressed in
its title. The tax provision is not inconsistent with, nor foreign to that general subject
and title. As a tool for regulation it is simply one of the regulatory and control
mechanisms scattered throughout the PD.

2. There is no undue delegation of legislative powers to the VRB. VRB is not being
tasked to legislate. What was conferred to the VRB was the authority or discretion
to seek assistance in the execution, enforcement, and implementation of the
law. Besides, in the very language of the decree, the authority of the BOARD to
solicit such assistance is for a “fixed and limited period” with the deputized
agencies concerned being “subject to the direction and control of the [VRB].”
PEOPLE VS MACEREN
FACTS: This is a case involving the validity of a 1967 regulation, penalizing electro
fishing in fresh water fisheries, promulgated by the Secretary of Agriculture and
Natural Resources and the Commissioner of Fisheries under the old Fisheries Law
and the law creating the Fisheries Commission.
Jose Buenaventura, Godofredo Reyes, Benjamin Reyes, Nazario Aquino and
Carlito del Rosario were charged by a Constabulary investigator in the municipal
court of Sta. Cruz, Laguna with having violated Fisheries Administrative Order No.
84-1.
The lower court held that electro fishing cannot be penalize because electric
current is not an obnoxious or poisonous substance as contemplated in section I I
of the Fisheries Law and that it is not a substance at all but a form of energy
conducted or transmitted by substances. The lower court further held that, since
the law does not clearly prohibit electro fishing, the executive and judicial
departments cannot consider it unlawful.
As legal background, it should be stated that section 11 of the Fisheries Law
prohibits "the use of any obnoxious or poisonous substance" in fishing.
Section 76 of the same law punishes any person who uses an obnoxious or
poisonous substance in fishing with a fine of not more than five hundred pesos nor
more than five thousand, and by imprisonment for not less than six months nor
more than five years.
It is noteworthy that the Fisheries Law does not expressly punish .electro fishing."
The Secretary of Agriculture and Natural Resources, upon the recommendation of
the Fisheries Commission, issued Fisheries Administrative Order No. 84-1,
amending section 2 of Administrative Order No. 84, by restricting the ban against
electro fishing to fresh water fisheries (63 O.G. 9963).
Thus, the phrase "in any portion of the Philippine waters" found in section 2, was
changed by the amendatory order to read as follows: "in fresh water fisheries in
the Philippines, such as rivers, lakes, swamps, dams, irrigation canals and other
bodies of fresh water."
ISSUE: WHETHER OR NOT THE SECRETARY OF AGRICULTURE EXCEEDED
ITS AUTHORITY IN ISSUING ADMINISTARTIVE ORDERS.
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HELD: The Court is of the opinion that the Secretary of Agriculture and Natural
Resources and the Commissioner of Fisheries exceeded their authority in issuing
Fisheries Administrative Orders Nos. 84 and 84-1 and that those orders are not
warranted under the Fisheries Commission, Republic Act No. 3512.
The reason is that the Fisheries Law does not expressly prohibit electro fishing. As
electro fishing is not banned under that law, the Secretary of Agriculture and
Natural Resources and the Commissioner of Fisheries are powerless to penalize
it. In other words, Administrative Orders Nos. 84 and 84-1, in penalizing electro
fishing, are devoid of any legal basis.
Had the lawmaking body intended to punish electro fishing, a penal provision to
that effect could have been easily embodied in the old Fisheries Law.
That law punishes (1) the use of obnoxious or poisonous substance, or explosive
in fishing; (2) unlawful fishing in deepsea fisheries; (3) unlawful taking of marine
molusca, (4) illegal taking of sponges; (5) failure of licensed fishermen to report
the kind and quantity of fish caught, and (6) other violations.
Nowhere in that law is electro fishing specifically punished. Administrative Order
No. 84, in punishing electro fishing, does not contemplate that such an offense
fails within the category of "other violations" because, as already shown, the
penalty for electro fishing is the penalty next lower to the penalty for fishing with
the use of obnoxious or poisonous substances, fixed in section 76, and is not the
same as the penalty for "other violations" of the law and regulations fixed in section
83 of the Fisheries Law.
The lawmaking body cannot delegate to an executive official the power to declare
what acts should constitute an offense. It can authorize the issuance of regulations
and the imposition of the penalty provided for in the law itself.
However, at present, there is no more doubt that electro fishing is punishable under
the Fisheries Law and that it cannot be penalized merely by executive revolution
because Presidential Decree No. 704, which is a revision and consolidation of all
laws and decrees affecting fishing and fisheries and which was promulgated on
May 16, 1975 (71 O.G. 4269), expressly punishes electro fishing in fresh water
and salt water areas.
n examination of the rule-making power of executive officials and administrative
agencies and, in particular, of the Secretary of Agriculture and Natural Resources
(now Secretary of Natural Resources) under the Fisheries Law sustains the view
that he ex his authority in penalizing electro fishing by means of an administrative
order.
Administrative agent are clothed with rule-making powers because the lawmaking
body finds it impracticable, if not impossible, to anticipate and provide for the
multifarious and complex situations that may be encountered in enforcing the law.
All that is required is that the regulation should be germane to the defects and
purposes of the law and that it should conform to the standards that the law
prescribes

The lawmaking body cannot possibly provide for all the details in the enforcement
of a particular statute
The grant of the rule-making power to administrative agencies is a relaxation of
the principle of separation of powers and is an exception to the nondeleption of
legislative, powers. Administrative regulations or "subordinate legislation
calculated to promote the public interest are necessary because of "the growing
complexity of modem life, the multiplication of the subjects of governmental
regulations, and the increased difficulty of administering the law"
Administrative regulations adopted under legislative authority by a particular
department must be in harmony with the provisions of the law, and should be for
the sole purpose of carrying into effect its general provisions. By such regulations,
of course, the law itself cannot be extended. An administrative agency cannot
amend an act of Congress
The rule-making power must be confined to details for regulating the mode or
proceeding to carry into effect the law as it his been enacted. The power cannot
be extended to amending or expanding the statutory requirements or to embrace
matters not covered by the statute. Rules that subvert the statute cannot be
sanctioned.
COMMISSIONER OF INTERNAL REVENUE VS CA
Facts: RA 7654 was enacted by Congress on June 10, 1993 and took effect July
3, 1993. It amended partly Sec. 142 (c) of the NIRC1.Fortune Tobacco
manufactured the following cigarette brands: Hope, More and Champion. Prior to
RA 7654, these 3 brands were considered local brands subjected to an ad
valorem tax of 20 to45%. Applying the amendment and nothing else, the 3
brands should fall under Sec 142 (c) (2) NIRC and be taxed at 20 to
45%.However, on July 1, 1993, petitioner Commissioner of Internal Revenue
issued Revenue Memorandum Circular37-93 which reclassified the 3 brands as
locally manufactured cigarettes bearing a foreign brand subject to the 55% ad
valorem tax. There classification was before RA 7654 took effect. In effect, the
memo circular subjected the 3 brands to the provisions of Sec 142 (c) (1) NIRC
imposing upon these brands a rate of 55% instead of just 20 to 45% under Sec
142 (c) (2) NIRC. There was no notice and hearing. CIR argued that the memo
circular was merely an interpretative ruling of the BIR which did not require notice
and hearing.
Issue: Whether or not RMC 37-93 was valid and enforceable.
Held: No; lack of notice and hearing violated due process required for
promulgated rules. Moreover, it infringed on uniformity of taxation / equal
protection since other local cigarettes bearing foreign brands had not been
included within the scope of the memo circular.
Contrary to petitioner’s contention, the memo was not a mere interpretative rule
but a legislative rule in the nature of subordinate legislation, designed to
implement a primary legislation by providing the details thereof. Promulgated
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legislative rules must be published. On the other hand, interpretative rules only
provide guidelines to the law which the administrative agency is in charge of
enforcing.
BIR, in reclassifying the 3 brands and raising their applicable tax rate, did not
simply interpret RA 7654 but legislated under its quasi-legislative
authority. BELLOSILLO separate opinion: the administrative issuance was not
quasi-legislative but quasi- judicial. Due process should still be observed of
course but use Ang Tibay v. CIR.
One of the powers of administrative agencies like the Bureau of Internal
Revenue, is the power to make rules. The necessity for vesting administrative
agencies with this power stems from the impracticability of the lawmakers
providing general regulations for various and varying details pertinent to a
particular legislation. The rules that administrative agencies may promulgate may
either be legislative or interpretative. The former is a form of subordinate
legislation whereby the administrative agency is acting in a legislative capacity,
supplementing the statute, filling in the details, pursuant to a specific delegation
of legislative power. It should be understandable that when an administrative rule
is merely interpretative in nature, its applicability needs nothing further than its
bare issuance for it gives no real consequence more than what the law itself has
already prescribed. When, upon the other hand, the administrative rule goes
beyond merely providing for the means that can facilitate or render least
cumbersome the implementation of the law but substantially adds to or increases
the burden of those governed, it behooves the agency to accord at least to those
directly affected a chance to be heard, and thereafter to be duly informed, before
that new issuance is given the force and effect of law
PERALTA VS CSC
FACTS Pursuant to Civil Service Act of 1959 (R.A. No. 2260) which conferred
upon the Commissioner of Civil Service to prescribe, amend and enforce suitable
rules and regulations for carrying into effect the provisions of this Civil Service
Law, the Commission interpreted provisions of Republic Act No. 2625 amending
the Revised Administrative Code and adopted a policy that when an employee
who was on leave of absence without pay on a day before or on a day time
immediately preceding a Saturday, Sunday or Holiday, he is also considered on
leave of absence without pay on such Saturday, Sunday or Holiday. Petitioner
Peralta, affected by the said policy, questioned the said administrative
interpretation.
ISSUES Whether or not the Civil Service Commission’s interpretative
construction is:
 (1) valid and constitutional.
 (2) binding upon the courts.

RULING
 (1) NO. The construction by the respondent Commission of R.A. 2625
is not in accordance with the legislative intent. R.A. 2625 specifically
provides that government employees are entitled to leaves of absence
with full pay exclusive of Saturdays, Sundays and Holidays. The law
speaks of the granting of a right and the law does not provide for a
distinction between those who have accumulated leave credits and
those who have exhausted their leave credits in order to enjoy such
right. Ubi lex non distinguit nec nos distinguere debemus.The fact
remains that government employees, whether or not they have
accumulated leave credits, are not required by law to work on
Saturdays, Sundays and Holidays and thus they can not be declared
absent on such non-working days. They cannot be or are not
considered absent on non-working days; they cannot and should not be
deprived of their salary corresponding to said non-working days just
because they were absent without pay on the day immediately prior to,
or after said non-working days. A different rule would constitute a
deprivation of property without due process.
 (2) NO. Administrative construction, is not necessarily binding upon the
courts. Action of an administrative agency may be disturbed or set
aside by the judicial department if there is an error of law, or abuse of
power or lack of jurisdiction or grave abuse of discretion clearly
conflicting with either the letter or the spirit of a legislative
enactment. When an administrative or executive agency renders an
opinion or issues a statement of policy, it merely interprets a pre-
existing law; and the administrative interpretation of the law is at best
advisory, for it is the courts that finally determine what the law means.
The general rule vis-a-vis legislation is that an unconstitutional act is not a law; it
confers no rights; it imposes no duties; it affords no protection; it creates no
office; it is in legal contemplation as inoperative as though it had never been
passed.
But, as held in Chicot County Drainage District vs. Baxter State Bank:
. . . . It is quite clear, however, that such broad statements as to the effect of a
determination of unconstitutionality must be taken with qualifications. The actual
existence of a statute, prior to such determination is an operative fact and may
have consequences which cannot always be ignored. The past cannot always be
erased by a new judicial declaration. The effect of the subsequent ruling as to
invalidity may have to be considered in various aspects — with respect to
particular relations, individual and corporate; and particular conduct, private and
official.
To allow all the affected government employees, similarly situated as petitioner
herein, to claim their deducted salaries resulting from the past enforcement of the
ADMINISTRATIVE LAW 2ND MEETING | 5
herein invalidated CSC policy, would cause quite a heavy financial burden on the
national and local governments considering the length of time that such policy
has been effective. Also, administrative and practical considerations must be
taken into account if this ruling will have a strict restrospective application. The
Court, in this connection, calls upon the respondent Commission and the
Congress of the Philippines, if necessary, to handle this problem with justice and
equity to all affected government employees.
COMMISSIONER OF INTERNAL REVENUE VS BICOLANDIA
Facts: RA 7432, otherwise known as "An Act to Maximize the Contribution of
Senior Citizens to Nation Building, Grant Benefits and Special Privileges and For
Other Purposes," granted senior citizens several privileges, one of which was
obtaining a 20 percent discount from all establishments relative to the use of
transportation services, hotels and similar lodging establishments, restaurants
and recreation centers and purchase of medicines anywhere in the country. The
law also provided that the private establishments giving the discount to senior
citizens may claim the cost as tax credit. BIR issued Revenue Regulations No. 2-
94, which defined "tax credit" as follows:
Tax Credit - refers to the amount representing the 20%discount granted to a
qualified senior citizen by all establishments relative to their utilization of
transportation services, hotels and similar lodging establishments, restaurants,
halls, circuses, carnivals and other similar places of culture, leisure and
amusement, which discount shall be deducted by the said establishments from
their gross income for income tax purposes and from their gross sales for value-
added tax or other percentage tax purposes.1995, respondent Bicolandia Drug
Corporation, a corporation engaged in the business of retailing pharmaceutical
products under the business style of "Mercury Drug," granted the 20percent
sales discount to qualified senior citizens purchasing their medicines
incompliance with R.A. No. 7432.
Respondent treated this discount as a deduction from its gross income in
compliance with RR No. 2-94, which implemented R.A. No. 7432. 1996,
respondent filed its 1995 Corporate Annual ITR declaring a net loss position with
nil income tax liability.
On December 27, 1996, respondent filed a claim for tax refund or credit in the
amount of PhP 259,659.00Resp alleged that CIR erred in treating the 20 percent
sales discount given to senior citizens as a deduction from its gross income for
income tax purposes or other percentage tax purposes rather than as a tax
credit.
1998 – resp appealed to CTA in order to toll the running of 2-year prescriptive
period to file a claim for refund pursuant to Section 230 of the Tax Code then.
Petitioner maintained that Revenue Regulations No. 2-94 is valid since the law
tasked the Department of Finance, among other government offices, with the

issuance of the necessary rules and regulations to carry out the objectives of the
law. CTA DECISION: R.A. No. 7432 would prevail over Section 2(i) of RR No. 2-
94, whose definition of "tax credit" deviated from the intendment of the law; and
as a result, partially granted the respondent's claim for a refund. CA modified
CTA decision; law provided for tax credit not a tax refund.
Issue: Whether or not the RR 2-94 is void. Yes. Whether or not the 20 percent
sales discount granted to qualified senior citizens by the respondent pursuant to
R.A. No. 7432may be claimed as a tax credit, instead of a deduction from gross
income or gross sales. No
Held: Petition denied. Law grants a tax credit not a tax deduction. RR 2-94
VOID. Resp entitled to tax credit The problem stems from the issuance of RR. 2-
94, which was supposed to implement R.A. No. 7432, and the radical departure it
made when it defined the "tax credit" that would be granted to establishments
that give 20 percent discount to senior citizens. It equated "tax credit" with "tax
deduction," contrary to the definition in Black's Law Dictionary, which defined tax
credit as: An amount subtracted from an individual's or entity's tax liability to
arrive at the total tax liability. A tax credit reduces the taxpayer's liability x x x,
compared to a deduction which reduces taxable income upon which the tax
liability is calculated. A credit differs from deduction to the extent that the former
is subtracted from the tax while the latter is subtracted from income before the
tax is computed. Petitioner argues that the tax credit is in the nature of a tax
refund and should be treated as a return for tax payments erroneously or
excessively assessed against a taxpayer, in line with Section 204(c) of RA 8424,
or the NIRC 1997. Payment first before tax credit can be claimed.SC: NIRC
speaks of a tax credit for tax due, so payment of the tax has not yet been made
in that particular example. CA correctly expressly recognized the differences
between a "tax credit" and a "tax refund," and stated that the same are not
synonymous with each other.
RR No. 2-94 is still subordinate to R.A. No. 7432, and incases of conflict, the
implementing rule will not prevail over the law it seeks to implement. While
seemingly conflicting laws must be harmonized as far as practicable, in this
particular case, the conflict cannot be resolved in the manner the petitioner
wishes. Petitioner argues that should private establishments, which count
respondent in their number, be allowed to claim tax credits for discounts given to
senior citizens, they would be earning and not just be reimbursed for the
discounts given. It cannot be denied that R.A. No. 7432 has a laudable goal. The
concerns of the affected private establishments were also considered by the
lawmakers. If the private establishments appear to benefit more from the tax
credit than originally intended, it is not for petitioner to say that they shouldn't.
The tax credit may actually have provided greater incentive for the private
establishments to comply with R.A. No. 7432, or quicker relief from the cut into
profits of these businesses. From the above discussion, it must be concluded
that Revenue Regulations No. 2-94 is null and void for failing to conform to the
law it sought to implement. In case of discrepancy between the basic law and a
rule or regulation issued to implement said law, the basic law prevails because
ADMINISTRATIVE LAW 2ND MEETING | 6
said rule or regulation cannot go beyond the terms and provisions of the basic
law. R.A. No. 7432 has been amended by Republic Act No. 9257, the "Expanded
Senior Citizens Act of 2003." In this, the term "tax credit" is no longer used. This
time around, there is no conflict between the law and the implementing Revenue
Regulations. Under Revenue Regulations No. 4-2006, "(o)nly the actual amount
of the discount granted or a sales discount not exceeding 20% of the gross
selling price can be deducted from the gross income, net of value added tax, if
applicable, for income tax purposes, and from gross sales or gross receipts of
the business enterprise concerned, for VAT or other percentage tax purposes.
Under the new law, there is no tax credit to speak of, only deductions. But
RA 7432 was the law in force then. “In cases of conflict between the law and the
rules and regulations implementing the law, the law shall always prevail. Should
Revenue Regulations deviate from the law they seek to implement, they will be
struck down.”
HOLY SPIRIT HOMEOWNERS ASSOCIATION VS DEFENSOR
Facts: The instant petition for prohibition under Rule 65 of the1997 Rules of Civil
Procedure, with prayer for the issuance of a temporary restraining order and/or
writ of preliminary injunction, seeks to prevent respondents from enforcing the
implementing rules and regulations (IRR) of Republic Act No. 9207, otherwise
known as the "National Government Center (NGC) Housing and Land Utilization
Act of 2003."Petitioner Holy Spirit Homeowners Association, Inc.(Association) is
a homeowners association from the West Side of the NGC. Named respondents
are the ex-officio members of the National Government Center Administration
Committee(Committee). At the filing of the instant petition, the Committee was
composed of Secretary Michael Defensor, Chairman of the Housing and Urban
Development Coordinating Council (HUDCC), Atty. Edgardo Pamintuan, General
Manager of the National Housing Authority (NHA), Mr. Percival Chavez,
Chairman of the Presidential Commission for Urban Poor (PCUP), Mayor
Feliciano Belmonte of Quezon City, Secretary Elisea Gozun of the Department of
Environment and Natural Resources (DENR), and Secretary Florante Soriquez of
the Department of Public Works and Highways (DPWH).President Gloria
Macapagal-Arroyo signed into law R.A.No. 9207. In accordance with Section 5
of R.A. No. 9207, the Committee formulated the Implementing Rules and
Regulations(IRR) of R.A. No. 9207 on June 29, 2004. Petitioners subsequently
filed the instant petition questioning its validity. The OSG claims that the instant
petition for prohibition is an improper remedy because the writ of prohibition does
not lie against the exercise of a quasi-legislative function. Since in issuing the
questioned IRR of R.A. No. 9207, the Committee was not exercising judicial,
quasi-judicial or ministerial function, which is the scope of a petition for
prohibition under Section 2, Rule 65 of the1997 Rules of Civil Procedure, the
instant prohibition should be dismissed outright, the OSG contends. For their
part, respondent Mayor of Quezon City and respondent NHA contend that
petitioners violated the doctrine of hierarchy of courts in filing the instant petition

with this Court and not with the Court of Appeals, which has concurrent
jurisdiction over a petition for prohibition.
Issue: Whether or not a petition for prohibition is not the proper remedy to assail
an IRR issued in the exercise of a quasi-legislative function.
Held: Yes. The court ruled that a petition for prohibition is also not the proper
remedy to assail an IRR issued in the exercise of a quasi-legislative function.
Prohibition is an extraordinary writ directed against any tribunal, corporation,
board, officer or person, whether exercising judicial, quasi-judicial or ministerial
functions, ordering said entity or person to desist from further proceedings when
said proceedings are without or in excess of said entity’s or person’s jurisdiction,
or are accompanied with grave abuse of discretion, and there is no appeal or any
other plain, speedy and adequate remedy in the ordinary course of
law. Prohibition lies against judicial or ministerial functions, but not against
legislative or quasi-legislative functions. Generally, the purpose of a writ of
prohibition is to keep a lower court within the limits of
its jurisdiction in order to maintain the administration of justice inorderly channels.
Prohibition is the proper remedy to afford relief against usurpation of jurisdiction
or power by an inferior court, or when, in the exercise of jurisdiction in handling
matters clearly within its cognizance the inferior court transgresses the bounds
prescribed to it by the law, or where there is no adequate remedy available in the
ordinary course of law by which such relief can be obtained. Where the principal
relief sought is to invalidate an IRR petitioner’s remedy is an ordinary action for
its nullification, an action which properly falls under the jurisdiction of the
Regional Trial Court. In any case, petitioners’ allegation that “respondents are
performing or threatening to perform functions without or in excess of their
jurisdiction" may appropriately be enjoined by the trial court through a writ of
injunction or a temporary restraining order. Administrative agencies possess
quasi-legislative or rule-making powers and quasi-judicial or administrative
adjudicatory powers. Quasi-legislative or rule-making power is the power to make
rules and regulations which results in delegated legislation that is within the
confines of the granting statute and the doctrine of non-delegability and
separability of powers. In questioning the validity or constitutionality of a rule or
regulation issued by an administrative agency, a party need not exhaust
administrative remedies before going to court. This principle, however, applies
only where the act of the administrative agency concerned was performed
pursuant to its quasi-judicial function, and not when the assailed act pertained to
its rule-making or quasi-legislative power. The assailed IRR was issued pursuant
to the quasi-legislative power of the Committee expressly authorized by R.A.
No.9207. The petition rests mainly on the theory that the assailed IRR issued by
the Committee is invalid on the ground that it is not germane to the object and
purpose of the statute it seeks to implement. Where what is assailed is the
validity or constitutionality of a rule or regulation issued by the administrative
agency in the performance of its quasi-legislative function, the regular courts
have jurisdiction to pass upon the same.
ADMINISTRATIVE LAW 2ND MEETING | 7
Since the regular courts have jurisdiction to pass upon the validity of the assailed
IRR issued by the Committee in the exercise of its quasi-legislative power, the
judicial course to assail its validity must follow the doctrine of hierarchy of courts.
Although the Supreme Court, Court of Appeals and the Regional Trial Courts
have concurrent jurisdiction to issue writs of certiorari, prohibition, mandamus,
quo warranto, habeas corpus, and injunction, such concurrence does not give
the petitioner unrestricted freedom of choice of court forum. True, this Court has
the full discretionary power to take cognizance of the petition filed directly with it if
compelling reasons, or the nature and importance of the issues raised, so
warrant. A direct invocation of the court’s original jurisdiction to issue these writs
should be allowed only when there are special and important reasons therefor,
clearly and specifically set out in the petition.
In Heirs of Bertuldo Hinog v. Melicor, the Court said that it will not entertain direct
resort to it unless the redress desired cannot be obtained in the appropriate
courts, and exceptional and compelling circumstances, such as cases of national
interest and of serious implications, justify the availment of the extraordinary
remedy of writ of certiorari, calling for the exercise of its
primary jurisdiction. A perusal, however, of the petition for prohibitionshows no
compelling, special or important reasons to warrant the Court taking
cognizance of the petition in the first instance. Petitioner also failed to state any
reason that precludes the lower courts from passing upon the validity of the
questioned IRR. Moreover, as provided in Section 5, Article VIII of the
Constitution, the Court’s power to evaluate the validity of an implementing rule or
regulation is generally appellate in nature. Thus, following the doctrine of
hierarchy of courts, the instant petition should have been initially filed with the
Regional Trial Court.
b. Power of Adjudication
SANTIAGO VS BAUTISTA
FACTS: Teodoro Santiago, a grade 6 pupil, was adjudged 3rd honor. 2 days
before his graduation, Ted and his parents sought the invalidation of the ranking
of the honor students. They filed a Certiorari case against the principal and
teachers who composed the committee on rating honors.. Respondents filed a
MTD claiming that the action was improper, and even assuming it was proper,
the question has become academic (bc the graduation already proceeded. They
also argue that there was no GADALEJ on the part of the teachers since the
Committee on Ratings is not a tribunal, nor board, exercising judicial functions,
under Rule 65, certiorari is a remedy against judicial function
ISSUE: WoN judicial function be exercised in this case.
RULING: A judicial function is an act performed by virtue of judicial powers. The
exercise of judicial function is the doing of something in the nature of the action
of the court. In order for an action for certiorari to exist,

Test to determine whether a tribunal or board exercises judicial functions:
1) there must be specific controversy involving rights of persons brought before a
tribunal for hearing and determination.
2) that the tribunal must have the power and authority to pronounce judgment
and render a decision.
3) the tribunal must pertain to that branch of the sovereign which belongs to the
judiciary (or at least the not the legislative nor the executive)
It may be said that the exercise of judicial function is to determine what the law
is, and what the legal rights of parties are, with respect to a matter in controversy.
Judicial power is defined:
 as authority to determine the rights of persons or property.
 authority vested in some court, officer or persons to hear and determine
when the rights of persons or property or the propriety of doing an act is
the subject matter of adjudication.
 The power exercised by courts in hearing and determining cases before
them.
 The construction of laws and the adjudication of legal rights.
The so-called Committee for Rating Honor Students are neither judicial nor
quasi-judicial bodies in the performance of its assigned task. It is necessary that
there be a LAW that gives rise to some specific rights of persons or property
under which adverse claims to such rights are made, and the controversy
ensuring there from is brought in turn, to the tribunal or board clothed with power
and authority to determine
ASSISTANT EXECUTIVE SECRETARY VS CA
DESIERTO VS SILVESTRE
ADMINISTRATIVE LAW 2ND MEETING | 8
REALTY EXCHANGE VENTURE VS SENDINO
FACTS: Private respondent Sendino entered into a reservation agreement with
Realty Exchange Venture, Inc. (REVI) for a house and lot in a subdivision. She
paid a partial reservation fee and paid the full down payment.
However, for alleged non-compliance with the requirement of submission of the
appropriate documents, REVI, informed respondent of the cancellation of the
contract.
Sendino filed a complaint for Specific Performance against REVI with the
Adjudication and Legal Affairs (OAALA) of the Housing and Land Use Regulatory
Board (HLURB).
The HLURB, whose authority to hear and decide the complaint was challenged
by REVI, rendered its judgment in favor of private respondent and ordered REVI
to continue with the sale of the house and lot.
An appeal from this decision was taken to the HLURB OAALA Arbiter, which
affirmed the Board's decision. The decision of the OAALA Arbiter was appealed
to the Office of the President, herein public respondent. Appeal dismissed.
ISSUE/S & HELD: WON THE HLURB HAS QUASI-JUDICIAL FUNCTIONS,
NOTWITHSTANDING ABSENCE OF EXPRESS GRANT BY EXECUTIVE
ORDER NO. 90 WHICH CREATED IT. YES.
RATIONALE: While E.O. 85 abolished the Ministry of Human Settlements
(MHS), it is patently clear from a reading of its provisions that the said executive
order did not abolish the Human Settlements Regulatory Commission (HSRC)
which continued to exercise its powers and functions. In spite of the Aquino
Government's stated intention of eradicating what it considered the vestiges of
the previous regime, it was not its intention to create a vacuum by abolishing
those juridical agencies which performed vital administrative functions.
The President subsequently issued Executive Order No. 90, series of 1986,
recognizing the Human Settlements Regulatory Commission (renamed the
HLURB) as one of the principal housing agencies of the government.
Prior to this, Executive Order No. 648 in 1981 transferred all the functions of the
National Housing Authority to the Human Settlements Regulatory Commission
(HSRC) consolidating all regulatory functions relating to land use and housing
development in a single entity.
Being the sole regulatory body for housing and land development, the renamed
body, the HLURB, would have been reduced to a functionally sterile entity if, as
the petitioner contends, it lacked the powers exercised by its predecessor which
included the power to settle disputes concerning land use and housing
development and acquisition.

Moreover, this Court, in United Housing Corporation vs. Hon. Dayrit, has had the
occasion to definitively rule that the HLURB could exercise the same quantum of
judicial or quasi-judicial powers possessed by the HSRC under the MHS in the
exercise of its regulatory functions.
Section 1 of PD 1344: the National Housing Authority shall have exclusive
jurisdiction to hear and decide cases of the following nature: (c) Cases involving
specific performance of contractual and statutory obligations filed by buyers of
subdivision lot or condominium unit against the owner, developer, dealer, broker
or salesman.
This is reinforced by section 8 of EO 648: Transfer of Functions. — The
Regulatory functions of the NHA are hereby transferred to the Human
Settlements Regulatory Commission. . . . Among the regulatory functions are . . .
(11) Hear and decide cases of unsound real estate business practices, claims
involving refund filed against project owners, developers, dealers, brokers, or
salesmen and cases of specific performance.
There is no question that a statute may vest exclusive original jurisdiction in an
administrative agency over certain disputes and controversies falling within the
agency's special expertise.
In general, the quantum of judicial or quasi-judicial powers which an
administrative agency may exercise is defined in the agency's enabling act.
Going to petitioners' contention that the decision of the OAALA should have been
rendered by the Board of Commissioners sitting en banc, instead of by a division
of three:
Under Section 5 of E.O. 648 which defines the powers and duties of the
Commission, the Board is specifically mandated to "(a)dopt rules of procedure for
the conduct of its business" and perform such functions necessary for the
effective accomplishment of (its) above mentioned functions."
Nothing in the provisions of either E.O. 90 or E.O. 648 denies or withholds the
power or authority to delegate adjudicatory functions to a division.
We cannot see how the Board, for the purpose of effectively carrying out its
administrative responsibilities and quasi-judicial powers as a regulatory body
should be denied the power, as a matter of practical administrative procedure, to
constitute its adjudicatory boards into various divisions.
After all, the power conferred upon an administrative agency to issue rules and
regulations necessary to carry out its functions has been held "to be an adequate
source of authority to delegate a particular function, unless by express provision
of the Act or by implication it has been withheld."
ADMINISTRATIVE LAW 2ND MEETING | 9
REPUBLIC VS MIGRINO
FACTS: The New Armed Forces Anti-Graft Board (Board) under the Presidential
Commission on Good Government (PCGG) recommended that private
respondent Lt. Col. Troadio Tecson (ret.) be prosecuted and tried for violation of
Rep. Act No. 3019, as amended, and Rep. Act No. 1379, as amended. Private
respondent moved to dismiss. The Board opposed. Private respondent filed a
petition for prohibition with preliminary injunction with the Regional Trial Court in
Pasig, Metro Manila. According to petitioners, the PCGG has the power to
investigate and cause the prosecution of private respondent because he is a
“subordinate” of former President Marcos. Respondent alleged that he is not one
of the subordinates contemplated in Executive Orders 1, 2, 14 and 14-A as the
alleged illegal acts being imputed to him, that of alleged amassing wealth beyond
his legal means while Finance Officer of the Philippine Constabulary, are acts of
his own alone, not connected with his being a crony, business associate, etc. or
subordinate as the petition does not allege so. Hence the PCGG has no
jurisdiction to investigate him.
ISSUE: Whether or not private respondent acted as a “subordinate” under E.O.
No.1 and related executive orders.
HELD: NO. Civil Case decision dismissed and nullified. TRO was made
permanent.
RATIO: Applying the rule in statutory construction known as ejusdem generis,
that is – [w]here general words follow an enumeration of persons or things, by
words of a particular and specific meaning, such general words are not to be
construed in their widest extent, but are to be held as applying only to persons or
things of the same kind or class as those specifically mentioned. The term
“subordinate” as used in E.O. Nos. 1 and 2 would refer to one who enjoys a close
association or relation with former Pres. Marcos and/or his wife, similar to the
immediate family member, relative, and close associate in E.O. No. 1 and the
close relative, business associate, dummy, agent, or nominee in E.O. No. 2.
The PCGG is ENJOINED from proceeding with the investigation and prosecution
of private respondent, without prejudice to his investigation and prosecution by
the appropriate prosecution agency.