G.R. No. 115455 , 115525, 115543, 115544, 115754, 115781, 115852, 115873, 115931. October 30, 1995.
ARTURO M. TOLENTINO, ET AL., petitioners, vs. THE SECRETARY OF FINANCE, ET AL., respondents.

FACTS

Multiple petitioners, including legislators, industry associations, and civic groups, sought reconsideration of the Supreme Court’s prior decision dismissing their petitions challenging the constitutionality of Republic Act No. 7716 (the Expanded Value-Added Tax Law). They raised several constitutional issues. Key among them was the claim that the law violated Article VI, Section 24 of the 1987 Constitution , which requires that all revenue bills originate exclusively in the House of Representatives. Petitioners argued that since the Senate did not pass the House bill (H. No. 11197) on second and third reading but instead approved its own distinct bill (S. No. 1630), which was later consolidated with the House version, the constitutional requirement of exclusive origination was not met.
Other petitioners raised additional grounds. The Cooperative Union of the Philippines (CUP) argued that the law violated the constitutional policy to foster cooperatives by subjecting them to VAT, thereby denying them equal protection, especially since electric cooperatives were granted exemption. Various petitioners also reiterated claims that the law impaired press freedom and the obligation of contracts.

ISSUE

The primary issue for reconsideration was whether R.A. No. 7716 was enacted in violation of the constitutional mandate on the origination of revenue bills. Subsidiary issues included whether the law denied equal protection to cooperatives and infringed upon other constitutional rights.

RULING

The Supreme Court denied the motions for reconsideration with finality. On the origination issue, the Court held that the constitutional requirement was satisfied. The Court clarified that the provision does not prohibit the Senate from proposing amendments or substituting its own version entirely. The process followed—where the House originated a revenue bill, the Senate proposed its own version (S. No. 1630), and a consolidated version was produced—was consistent with legislative practice and constitutional intent. The Court cited several previous revenue laws enacted through the same consolidation process, demonstrating its validity. The essence of the “exclusive origination” clause is merely that the initiative must come from the House; the Senate retains full power to propose, concur with, or amend revenue bills.
Regarding the challenge from cooperatives, the Court found no constitutional violation. The policy to foster cooperatives does not confer automatic tax exemption, which remains a legislative prerogative. The classification exempting electric cooperatives from VAT, while taxing others, was held to be based on a reasonable legislative determination to prioritize affordable rural electrification and thus did not constitute a denial of equal protection. The Court reaffirmed that the law suffered from none of the alleged infirmities and that questions on its wisdom or necessity are addressed to Congress, not the judiciary. The temporary restraining order was lifted.