2 94 despite the clear wording of the previous law

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2-94, despite the clear wording of the previous law that the same should be treated as a tax credit. We were, therefore, not confronted in that case with the issue as to whether the 20% discount is an exercise of police power or eminent domain. Second, although we adverted to Central Luzon Drug Corporation in our ruling in Carlos Superdrug Corporation, this referred
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POLITICAL LAW CASE DIGESTS 186 only to preliminary matters. A fair reading of Carlos Superdrug Corporation would show that we categorically ruled therein that the 20% discount is a valid exercise of police power. Thus, even if the current law, through its tax deduction scheme (which abandoned the tax credit scheme under the previous law), does not provide for a peso for peso reimbursement of the 20% discount given by private establishments, no constitutional infirmity obtains because, being a valid exercise of police power, payment of just compensation is not warranted. We have carefully reviewed the basis of our ruling in Carlos Superdrug Corporation and we find no cogent reason to overturn, modify or abandon it. We also note that petitioners’ arguments are a mere reiteration of those raised and resolved in Carlos Superdrug Corporation. Thus, we sustain Carlos Superdrug Corporation. Nonetheless, we deem it proper, in what follows, to amplify our explanation in Carlos Superdrug Corporation as to why the 20% discount is a valid exercise of police power and why it may not, under the specific circumstances of this case, be considered as an exercise of the power of eminent domain contrary to the obiter in Central Luzon Drug Corporation. Police power is the inherent power of the State to regulate or to restrain the use of liberty and property for public welfare. The only limitation is that the restriction imposed should be reasonable, not oppressive. In other words, to be a valid exercise of police power, it must have a lawful subject or objective and a lawful method of accomplishing the goal. Under the police power of the State, “property rights of individuals may be subjected to restraints and burdens in order to fulfill the objectives of the government.” The State “may interfere with personal liberty, property, lawful businesses and occupations to promote the general welfare [as long as] the interference is reasonable and not arbitrary.” Eminent domain, on the other hand, is the inherent power of the State to take or appropriate private property for public use. The Constitution, however, requires that private property shall not be taken without due process of law and the payment of just compensation. Traditional distinctions exist between police power and eminent domain. In the exercise of police power, a property right is impaired by regulation, or the use of property is merely prohibited, regulated or restricted to promote public welfare. In such cases, there is no compensable taking; hence, payment of just compensation is not required. Examples of these regulations are property condemned for being noxious or intended for noxious purposes (e.g., a building
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