CONSTITUTIONAL LIMITATIONS 1.DUE PROCESS OF LAW

1. DUE PROCESS OF LAW

No person shall de deprived of life, liberty or property without due process of law (Sec. 1, Art.III, 1987 Constitution).

Adversely affecting as it does property rights, both the due process and equal protection clauses may be invoked to invalidate a revenue measure. Where the due process and equal protection clauses are invoked, considering that they are not fixed rules but rather broad standards, there is a need for proof of such persuasive character as would lead to such a conclusion. It is undoubted that the due process clause may be invoked where a taxing statute is so arbitrary that it finds no support in the Constitution. Absent such a showing, however, the presumption of validity must prevail (Sision vs. Ancheta, 130 SCRA 654).

Application

(a) A tax which is imposed for a private purpose or which is beyond the jurisdiction of the government to levy and collect offends due process of law. Here, the law imposing such tax is void or invalid.

(b) If a tax law is judicially declared invalid, any tax levied under it cannot, of course, be enforced as this will also infringe due process. If the tax has already been paid, it should be refunded to the taxpayer in accordance with the general principle that no one shall unjustly enrich himself at the expense of another. This principle applies even to the government.

(c) A taxpayer may not be deprived of his property for non-payment of taxes without giving notice to him as required by law of his tax liability as well as of the sale at public auction (i.e., public sale to the highest bidder) of such property to satisfy the taxes as this will amount to a denial of due process.

(d) A tax law, which denies a taxpayer a fair opportunity to assert his substantial rights before a competent tribunal, is invalid as violation of the same constitutional guarantee.

Due process requires hearing before adoption of legislative rules by administrative bodies of interpretative rulings. (Misamis vs. DFA)

Compliance with strict procedural requirements must be followed effectively to avoid a collision course between the states power to tax and the individual recognized rights (CIR vs. Algue)

The due process clause may correctly be invoked only when there is a clear contravention of inherent or constitutional limitations in the exercise of tax power. (Tan vs. del Rosario)

a) SUBSTANTIVE DUE PROCESS requires that a tax statute must be within the constitutional authority of Congress to pass and that it be reasonable, fair and just

b) PROCEDURAL DUE PROCESS requires notice and hearing or at least an opportunity to be heard