American Mail Line and other foreign shipping companies filed a petition for declaratory relief, asking the Court to determine the validity of anchorage fees being collected by the City Government of Basilan pursuant to the local Port Area Ordinance. Said ordinance imposed a fee of centavo (P0.005) per registered gross ton of the vessel for the first twenty-four (24) hours, or part thereof, and for succeeding hours, but not to exceed seventy-five pesos (P75.00) per day, irrespective of the greater tonnage of the vessels. At the time, the harbor fee being imposed by the National Government was fifty pesos (P50.00). The City argues that the ordinance in question was enacted in the exercise of its police power and that the fees imposed therein are for purely regulatory purposes.
ISSUE: Whether the City of Basilan had authority to enact the questioned ordinance and to collect the anchorage fees prescribed therein?
RULING: Under its Charter, the City of Basilan had the authority, among others, (1) to levy and collect taxes for general and special purposes in accordance with law; and (2) to fix the charges to be paid by all watercraft landing at or using public wharves, docks, levees, or landing places.
It is clear from the foregoing that the City of Basilan was not granted a blanket power of taxation. The use of in accordance with law clearly discloses the legislative intent to limit the taxing power of the City. The power to regulate as an exercise of police power does not include the power to impose fees for revenue purposes. Fees for purely regulatory purposes may only be of sufficient amount to include the expenses of issuing the license and the cost of the necessary inspection or police surveillance, taking into account not only the expense of direct regulation but also incidental expenses.
The fees herein, being based upon the tonnage of the vessels, have no proper or reasonable relation to the cost of issuing the permits and the cost of inspection or surveillance. In fact, the fee imposed exceeds even that imposed by the National Government. All these circumstances point to the conclusion that the fees were intended for revenue purposes, in excess of the authority conferred upon the City by law.