Limitations of judicial action re taxation

Taxation is an inherent power of the State, exercised through the enactment of laws by the Legislature (Congress). It is Congress that decides and determines what the public purpose should be. However, a petition may be filed in court to raise the issue of whether the law is constitutional, whether the purpose is public or private, or whether the law is applied properly.

Such judicial action shall be limited to the following:

[1] The determination of the validity of the tax in relation to constitutional precepts or provisions. Thus, a tax may be declared invalid because it violates the constitutional requirement of uniformity and equity in taxation;

[2] The determination of whether the purpose of the tax is public or private. If the purpose is public, the courts can inquire no further because the wisdom of the law is outside the scope of judicial review; and

[3] The determination in an appropriate case of the application of a tax law. (1 Cooley 165) Thus, a court may decide that a tax has been illegally collected where the taxpayer is entitled to tax exemption or his liability has already been extinguished by reason of prescription.