GR L 2348; (February, 1950) (Digest)
G.R. No. L-2348. February 27, 1950.
GREGORIO PERFECTO, plaintiff-appellee, vs. BIBIANO MEER, Collector of Internal Revenue, defendant-appellant.
FACTS
In 1947, the Collector of Internal Revenue assessed and collected income tax on the 1946 salary of Supreme Court Associate Justice Gregorio Perfecto. Justice Perfecto paid the tax under protest and then filed an action in the Manila Court of First Instance seeking a refund. He contended that the imposition of an income tax on his judicial salary constituted a diminution of his compensation, which is prohibited by Article VIII, Section 9 of the 1935 Constitution. The trial court ruled in favor of Justice Perfecto and ordered the refund. The Collector of Internal Revenue appealed directly to the Supreme Court. Justice Perfecto died during the pendency of the appeal.
ISSUE
Does the imposition of an income tax on the salary of a member of the judiciary amount to an unconstitutional diminution of compensation under the 1935 Constitution?
RULING
Yes. The Supreme Court, en banc, affirmed the trial court’s decision. The imposition of an income tax on the fixed salary of a judge constitutes a diminution of that compensation, which is prohibited by the Constitution. The constitutional provision (Article VIII, Section 9) that the compensation of judges “shall not be diminished during their continuance in office” is designed to secure the independence of the judiciary, not merely as a personal benefit to the judges. A tax reduces the net amount the judge receives, effectively diminishing the compensation assured by the Constitution. The Court, citing American jurisprudence (particularly Evans v. Gore), held that this prohibition protects against both direct and indirect diminution, including the withholding of a portion as an income tax. The Collector was ordered to refund the tax paid by Justice Perfecto.
(Note: The ruling includes a lengthy discussion of the historical treatment of judicial salaries under U.S. federal income tax laws and addresses dissenting views. The majority opinion, written by Justice Bengzon, emphasizes the intent to preserve judicial independence. A dissenting opinion by Justice Pablo, concurred in by Justice Paras, argued that a general income tax law applicable to all income earners does not constitute a prohibited diminution.)*
AI Generated by Armztrong.