It must be pointed out at the outset that, as the facts giving rise to the case before us occurred during 1993 and 1996, the law then in force must be applied. When the Agricultural Development Act was amended on August 1, 1983, the Enforcement Rules of the Act were accordingly amended on September 7, 1984. But when Article 2 of said Act was amended on January 6, 1986, no revision was made to the Enforcement Rules hereof. Thus, the law applicable to this case is limited to the law effective during such period. The further amendments to said Act on January 26, 2000, and to the Enforcement Rules thereof on June 7 of the same year are not applicable to the facts in this case, and were not taken into consideration by us in delivering this interpretation.
Article 19 of the Constitution provides that the people shall have the duty to pay tax in accordance with law. This means that the people have the duty to pay tax and the privilege to enjoy tax benefit pursuant to the taxpaying bodies, tax denominations, tax rates, methods of tax payment, and tax reduction and exemption as they are prescribed by law. The competent authority, in establishing enforcement rules based on the general authorization granted by law, is empowered only to regulate matters relating to the enforcement of the duty to pay tax and the elements required by the enabling statute, with no additions thereto or reductions therefrom, or such rules will be in conflict with the doctrine of taxation per legislation. Furthermore, under Article 23 of the Constitution, any restraint to be imposed on the freedoms and rights of the people must be prescribed by law and may not go beyond the degree of necessity. Where an administrative agency is authorized by the Legislature to issue rules and ordinances as supplements to law, such administrative agency may establish rules in respect of detail and technical matters in relation to the enforcement of the law to the extent that such rules are consistent with the legislative purposes and do not go beyond the scope of power granted by the enabling statute and that the contents of such rules do not conflict with the enabling statute or add any restriction that is not prescribed by law on the freedoms and rights of the people. This has been made clear repeatedly in our Interpretations Nos. 313, 367, 385, 413, 415 and 458. Hence, the purpose of the principle of taxation by law is to prevent the administrative authorities from making arbitrary changes to the duty to pay tax by way of administrative ordinances to the extent of going beyond the prescription set forth by the enabling law, thereby resulting in infringement of the right of the people.
The Agricultural Development Act as amended on August 1, 1983, provides in Article 31, the first sentence: “A successor capable of self-tilling who inherits or accepts agricultural land being used as a family farm and continues to engage in agricultural production is exempt from estate tax or gift tax, as the case may be.” Under the Enforcement Rules of the Agricultural Development Act as amended on September 7, 1984, no exemption from estate tax is allowed where succession to agricultural land occurs after the land was classified by the competent authority for non-agricultural use. However, by the Ministry of Finance directive Tai-Tsai-Shui No. 830625682 of November 29, 1994, a tax exemption would be allowable on certain conditions, and this provision was incorporated in said Enforcement Rules when they were revised on June 7, 2000. Insofar as the facts giving rise to this petition for interpretation are concerned, the provisions set forth in the Agricultural Development Act with respect to the assessment of and exemption from the estate tax remained unchanged, whereas the tax burden of the taxpayers was changed in substance by the administrative ordinances issued one after the other. This situation can hardly be said to be consistent with the principle of taxation by law. The term “agricultural land” used in Article 31 of said Act is defined by Article 3, Subparagraph 10, to mean “farmhouses, shelters for livestock and poultry, storage facilities, farmyards, repositories, farm roads, irrigation, drainage, and other agricultural land for farming, forestry, cultivation, husbandry, If its continued operation is less than five years, all taxes payable thereon must be collected retroactively without any tax incentive. (See Agricultural Development Act, Article 31, proviso, then prevailing) To determine the scope of practical application of “agricultural land” defined by the Agricultural Development Act as aforesaid, the provisions of relevant laws such as the Land Act must be taken into consideration for the purpose of construction as a whole, in addition to the defining prescription set forth in said Act. If, however, such defined limit is overstepped to the extent that the elements required by law with respect to the duty to pay tax or to the privilege of tax reduction or exemption are arbitrarily expanded or abridged, it will be impermissible on the principle of taxation by law embodied in Article 19 of the Constitution. Even if the Ministry of Finance may consider that Article 31 of said Act, with respect to the elements for and the scope of tax exemption, is overly liberal to the extent of jeopardizing the financial and tax policies of the government, or being inconsistent with the purpose of encouraging the development of agriculture, and that modification is therefore necessary, it must be amended in pursuance of the authorization of the enabling statute, and its application may not be either limited or curtailed directly through the issue of enforcement rules or interpretative administrative regulations. The Enforcement Rules of said Act, as amended on September 7, 1984, provide in Article 21, the second sentence: “Agricultural land used as a family farm does not include land that was legally classified for non-agricultural use before it was inherited or given as a gift.” And the Ministry of Finance directive Tai-Tsai-Shui No. 62717 dated November 8, 1984, further defines that “Where the decedent died or the fact of giving the land as a gift occurred after the amended Enforcement Rules of the Agricultural Development Act were promulgated and became effective, Article 21 of said Enforcement Rules shall be followed. That is, no estate tax or gift tax may be exempted under Article 31 of the Agricultural Development Act or Articles 17 and 20 of the Estate and Gift Act for land that was legally classified for non-agricultural use.” To the extent that the provision of such enforcement rules and the directive, by rendering Article 31 of the Agricultural Industry Development Act then in force with respect to exemption of the estate tax or gift tax inapplicable to agricultural land that was at all times used as a family farm but was legally classified as land for non-agricultural use before the beginning of succession or before the occurrence of the fact of being given as a gift but is available for continued use for its original agricultural purpose after the death of the heir or after the occurrence of the fact of being given as a gift and before the time fixed for its non-agricultural use begins, have limited and curtailed the scope of application of “agricultural land” as defined by Article 3, Subparagraph 10, of said Act then in force through the direct issue of administrative ordinance, with the result of adding restrictions that are not prescribed by law, albeit they may be consistent with the purpose of agricultural development. Such restrictions are thus in conflict with the principle of taxation by law embodied in Article 19 of the Constitution and are furthermore contrary to the constitutional intention of protecting the property right of the people and the principle of reservation of law (Gesetzesvorbehalt). They must be held to be no longer valid (See J. Y. Interpretation No. 210). As regards the term “arable land” defined by Article 3, Subparagraph 11, of said Act, it is designed for policy consideration for the sole purpose of explaining the term “arable land” contained in the text of said Act, e.g., Article 30 (now Article 16) with respect to circumstances where division and transfer of arable land are prohibited (with the addition of Articles 20, 21 and 22 in the current version with special provisions in respect of lease of arable land), and such explanation should certainly not be taken as a ground on which the scope of the meaning of “agricultural land” in Subparagraph 10 of the same article may either be limited or abridged.