G.R. No. 47917 ; October 30, 1942
PANAGAN MINING ASSOCIATION, plaintiff-appellant, vs. ALFREDO L. YATCO, Collector of Internal Revenue, defendant-appellee.

FACTS

The plaintiff-appellant, Panagan Mining Association, paid a tax on December 29, 1936. This tax was imposed under Act No. 4243 . However, Act No. 4243 was repealed by Commonwealth Act No. 137 on November 7, 1936, prior to the payment of the tax.

ISSUE

The issue pertains to the effect of the repeal of Act No. 4243 on the tax liability that was paid after the repeal but was levied under the prior law.

RULING

The Court ruled that taxes are due according to the law in force at the time they were levied. The principle favoring prospective construction applies to statutes that repeal tax laws. Therefore, the repeal of Act No. 4243 did not extinguish the tax liability that had already been levied under that Act before its repeal. The tax paid on December 29, 1936, was validly due. Furthermore, the Court clarified that the tax under Act No. 4243 is not merely a privilege tax for obtaining a patent. It is a tax that must be paid by any locator of a mining claim who fails to do assessment work in a given year, irrespective of future intentions to secure a patent, and serves to ensure the good faith of locators.