Lutz vs Araneta

Doctrine: The Sugar Adjustment Act is implemented to provide means for rehabilitation and
stabilization of the threatened sugar industry. Since sugar production is one of the great industries of
our nation, its promotion, protection, and advancement, therefore redounds greatly to the general
welfare. Hence, said objectives of the Act is a public concern and is therefore constitutional.
Facts: Walter Lutz, as Judicial Administrator of the Intestate Estate of Antonio Jayme Ledesma, sought to
recover the sum of
P14,666.40 paid by the estate as taxes from the Commissioner under Section e of Commonwealth Act 567 or
the Sugar Adjustment Act, alleging that such tax is unconstitutional as it levied for the aid and support of the
sugar industry exclusively, which is in his opinion not a public purpose.
Issue: WON the tax is valid
Ruling: Yes. In this case, the tax is levied with a regulatory purpose, i.e., to provide means for rehabilitation
and stabilization of the threatened sugar industry. Since sugar production is one of the great industries of our
nation, its promotion, protection, and advancement, therefore redounds greatly to the general welfare. Hence,
said objectives of the Act is a public concern and is therefore constitutional. It follows that the Legislature may
determine within reasonable bounds what is necessary for its protection and expedient for its promotion. If
objectives and methods are alike constitutionally valid, no reason is seen why the state may not levy taxes to
raise funds for their prosecution and attainment. Taxation may be made with the implement of the state’s police
power. In addition, it is only rational that the taxes be obtained from those that will directly benefit from it.
Therefore, the tax levied under the Sugar Adjustment Act is held to be constitutional.