GR L 33693; (May, 1979) (Digest)
G.R. No. L-33693-94. May 31, 1979. MISAEL P. VERA, as Commissioner of Internal Revenue, and THE FAIR TRADE BOARD, petitioners, vs. HON. SERAFIN R. CUEVAS, as Judge of the Court of First Instance of Manila, Branch IV, INSTITUTE OF EVAPORATED FILLED MILK MANUFACTURERS OF THE PHILIPPINES, INC., CONSOLIDATED MILK COMPANY (PHIL.) INC., and MILK INDUSTRIES, INC., respondents.
FACTS
Private respondents are manufacturers of filled milk products. The Commissioner of Internal Revenue issued an order requiring them to comply with Section 169 of the National Internal Revenue Code by inscribing on their product labels the warning: “This milk is not suitable for nourishment for infants less than one year of age.” Failure to comply would result in legal action. Consequently, private respondents filed a declaratory relief action (Civil Case No. 52276) seeking adjudication of their rights and obligations under Section 169 and secured a preliminary injunction against the Commissioner’s order.
Simultaneously, a separate complaint for misleading advertisement and misbranding was filed with the Fair Trade Board (FTB I.S. No. 1), alleging, among other charges, the failure to include the warning required by Section 169. Private respondents then filed a prohibition action (Special Civil Action No. 52383) to stop the Fair Trade Board from proceeding with its investigation pending the resolution of the declaratory relief case. The trial court consolidated the two cases.
ISSUE
The primary issue is whether the Commissioner of Internal Revenue and the Fair Trade Board possess the jurisdiction to enforce Section 169 of the Tax Code and to investigate alleged misbranding of filled milk products related to that statutory requirement.
RULING
The Supreme Court affirmed the trial court’s decision, ruling that the petitioners lacked jurisdiction. The legal logic centers on the principle of statutory allocation of specific powers to specific agencies. Section 169 of the Tax Code, while imposing a labeling requirement, does not confer investigative or enforcement powers upon the Commissioner of Internal Revenue for violations thereof. The Court examined the relevant laws, particularly the Food and Drugs Act ( Republic Act No. 3720 ). This Act explicitly vests jurisdiction over matters concerning the misbranding, mislabeling, and adulteration of food products, including filled milk, in the Board of Food and Drug Inspection and the Food and Drug Administrator. The law outlines a detailed procedure for investigation, hearing, and potential certification of violations to the Secretary of Justice for prosecution.
Granting the Commissioner and the Fair Trade Board concurrent jurisdiction would lead to an impractical and undesirable overlap of functions, creating confusion and potential conflict in official actions. The Fair Trade Board’s general jurisdiction under its charter does not extend to matters specifically allocated by a special law to another specialized agency. Therefore, the Commissioner’s order was issued without authority, and the Fair Trade Board’s investigation into the labeling omission encroached upon the exclusive domain of the food and drug regulatory bodies. The injunctions issued by the lower court were proper.