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_____________________________
In partial fulfillment
Of the requirements
For the subject on Taxation Law
Saint Louis University
School of Law
_____________________________
Submitted to:
ATTY. CHRISTINE ELVEA-CARANTES
_____________________________
Submitted by:
AMEDA, KENJIE C.
BASCOS, GIDEON LUKE
NABOYE, LASKER JESUS FERDINAND III
_____________________________
Submitted on:
14 March 2014
TABLE OF CONTENTS
1. Allied Banking vs. the Quezon City Government,
G. R. NO. 154126 September 15, 2006
.......4
2. Caltex v. Central Board of Assessment
31 May 1982
..8
12.
13.
14.
15.
16.
17.
18.
19.
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23.
24.
25.
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27.
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29.
30.
Assessment Regulations No. 1-92 and unduly interferes with the duties
statutorily placed upon the local assessor by completely dispensing with his
analysis and discretion which the Code and the regulations require to be
exercised. An ordinance that contravenes any statute is ultra vires and void.
Further, it is noted that there is nothing in the Charter of Quezon City
and the Quezon City Revenue Code of 1993 that authorize public
respondents to appraise property at the consideration stated in the deed of
conveyance.Using the consideration appearing in the deed of conveyance to
assess or appraise real properties is not only illegal since the appraisal,
assessment, levy and collection of real property tax shall not be let to any
private person, but it will completely destroy the fundamental principle in
real property taxation that real property shall be classified, valued and
assessed on the basis of its actual use regardless of where located, whoever
owns it, and whoever uses it. Necessarily, allowing the parties to a private
sale to dictate the fair market value of the property will dispense with the
distinctions of actual use stated in the Code and in the regulations.
The invalidity of the assessment or appraisal system adopted by the
proviso is not cured even if the proviso mandates the comparison of the
stated consideration as against the prevailing BIR zonal value, whichever is
higher, because an integral part of that system still permits valuing real
property in disregard of its actual use.
In the same vein, there is also nothing in the Code or the regulations
showing the congressional intent to require an immediate adjustment of
taxes on the basis of the latest market developments as, in fact, real
property assessments may be revised and/or increased only once every
three (3) years. Consequently, the real property tax burden should not be
interpreted to include those beyond what the Code or the regulations
expressly and clearly state.
While the Local Government Code provides that the assessment of
real property shall not be increased oftener than once every three (3) years,
the questioned part of the proviso subjects the real property to a tax based
on the actual amount appearing on the deed of conveyance or the current
approved zonal valuation of the Bureau of Internal Revenue prevailing at the
time of sale, cession, transfer and conveyance, whichever is higher. As such,
any subsequent sale during the three-year period will result in a real property
tax higher than the tax assessed at the last prior conveyance within the
same period. To save on taxes, real property owners or administrators are
forced to hold on to the property until after the said three-year period has
lapsed. Should they nonetheless decide to sell within the said three-year
period, they are compelled to dispose the property at a price not exceeding
that obtained from the last prior conveyance in order to avoid a higher tax
assessment. In these two scenarios, real property owners are effectively
prevented from obtaining the best price possible for their properties and
unduly hampers the equitable distribution of wealth.
In fine, public respondent Quezon City Government exceeded its
statutory authority when it enacted the proviso in question. The provision is
6
thus null and void ab initio for being ultra vires and for contravening the
provisions of the Local Government Code, its implementing regulations and
the Local Assessment Regulations No. 1-92. As such, it acquired no legal
effect and conferred no rights from its inception.
government units herein been delineated with accuracy, then there would be
no controversy at all.
In the meantime, to avoid further animosity, Sta. Lucia is directed to
deposit the succeeding real property taxes due on the subject properties, in
an escrow account with the Land Bank of the Philippines.
WHEREFORE, the instant petition is GRANTED. The June 30, 2004
Decision and the January 27, 2005 Resolution of the Court of Appeals in CAG.R. CV No. 69603 are SET ASIDE. The City of Pasig and the Municipality of
Cainta are both directed to await the judgment in their boundary dispute
case (Civil Case No. 94-3006), pending before Branch 74 of the Regional Trial
Court in Antipolo City, to determine which local government unit is entitled to
exercise its powers, including the collection of real property taxes, on the
properties subject of the dispute. In the meantime, Sta. Lucia Realty and
Development, Inc. is directed to deposit the succeeding real property taxes
due on the lots and improvements covered by TCT Nos. 532250, 598424,
599131, 92869, 92870 and 38457 in an escrow account with the Land Bank
of the Philippines.
MIAA received Final Notices of Real Property Tax Delinquency from the
City of Pasay for the taxable years 1992 to 2001. The City of Pasay, through
its City Treasurer, issued notices of levy and warrants of levy for the NAIA
Pasay properties. Thereafter, the City Mayor of Pasay threatened to sell at
public auction the NAIA Pasay properties if the delinquent real property taxes
remain unpaid.
MIAA filed with the Court of Appeals a petition for prohibition and
injunction with prayer for preliminary injunction or temporary restraining
order. The petition sought to enjoin the City of Pasay from imposing real
property taxes on, levying against, and auctioning for public sale the NAIA
Pasay properties.
Court of Appeals: Upheld the power of the City of Pasay to impose and
collect realty taxes on the NAIA Pasay properties. Sections 193 and 234 of
Republic Act No. 7160 or the Local Government Code withdrew the
exemption from payment of real property taxes granted to natural or juridical
persons, including government owned or controlled corporations. Since MIAA
is a government-owned corporation, it follows that its tax exemption under
Section 21 of EO 903 has been withdrawn upon the effectivity of the Local
Government Code.
ISSUE:
Whether or not the NAIA Pasay properties of MIAA are exempt from real
property tax
HELD:
1. MIAA is a government "instrumentality" that does not qualify as a
"government-owned or controlled corporation. Under Section 133(o) of the
Local Government Code, local government units have no power to tax
instrumentalities of the national government. Therefore, MIAA is exempt from
any kind of tax from the local governments.
A government "instrumentality" may or may not be a "governmentowned or controlled corporation" (Section 2(10) of the Introductory Provisions
of the Administrative Code of 1987). A government-owned or controlled
corporation must be "organized as a stock or non-stock corporation." MIAA is
not organized as a stock or non-stock corporation. It is not a stock
corporation because it has no capital stock divided into shares. It is also not
a non-stock corporation because it has no members. The Government cannot
be considered as the sole member of MIAA because nonstick corporations
cannot distribute any part of their income to their members. Section 11 of
the MIAA Charter mandates MIAA to remit 20% of its annual gross operating
income to the National Treasury.
MIAA is like any other government instrumentality, but is vested with
corporate powers to perform efficiently its governmental functions. When the
law vests in a government instrumentality corporate powers, the
instrumentality does not become a corporation.
14
exclusively used for charitable purposes. Hence, the present petition for
review with averments that the Lung Center of the Philippines is a charitable
institution under Section 28(3), Article VI of the Constitution, notwithstanding
that it accepts paying patients and rents out portions of the hospital building
to private individuals and enterprises.
Issue:
Is the Lung Center of the Philippines a charitable institution within the
context of the Constitution, and therefore, exempt from real property tax?
Held:
The Lung Center of the Philippines is a charitable institution. To
determine whether an enterprise is a charitable institution or not, the
elements which should be considered include the statute creating the
enterprise, its corporate purposes, its constitution and by-laws, the methods
of administration, the nature of the actual work performed, that character of
the services rendered, the indefiniteness of the beneficiaries and the use and
occupation of the properties.
However, under the Constitution, in order to be entitled to exemption
from real property tax, there must be clear and unequivocal proof that (1) it
is a charitable institution and (2)its real properties are ACTUALLY, DIRECTLY
and EXCLUSIVELY used for charitable purposes. While portions of the hospital
are used for treatment of patients and the dispensation of medical services
to them, whether paying or non-paying, other portions thereof are being
leased to private individuals and enterprises.
Exclusive is defined as possessed and enjoyed to the exclusion of
others, debarred from participation or enjoyment. If real property is used for
one or more commercial purposes, it is not exclusively used for the
exempted purposes but is subject to taxation.
16
property subject to tax, notwithstanding its claim of being a governmentowned or controlled corporation. And although the LRTA's carriageways and
terminal stations are anchored, at certain points, on public roads, it must be
emphasized that these structures do not form part of such roads, since the
former have been constructed over the latter in such a way that the flow of
vehicular traffic would not be impeded. Carriageways or passenger terminals
are elevated structures which are not freely accessible to the public, viz-a-viz
roads which are public improvements openly utilized by the public. These
carriageways and terminal stations are part and parcel of the light rail transit
(LRT) system which, unlike public roads, are not open to use by the general
public. The carriageways are accessible only to the LRT trains, while the
terminal stations have been built for the convenience of LRTA itself and its
customers who pay the required fare. Furthermore, even granting that the
national government indeed owns the carriageways and terminal stations,
the exemption would not apply because their beneficial use has been
granted to the LRTA, which is a taxable entity.
20
Whether or not the GOCC may be deemed the actual, direct, and
exclusive user of machineries and equipment for tax exemption purposes.
HELD:
No. NPCs basis for its claimed exemption Section 234(c) of the LGC is
clear and not at all ambiguous in its terms. Exempt from real property
taxation are: all machineries and equipment that are actually, directly and
exclusively used by local water districts and GOCCs engaged in the supply
and distribution of water and/or generation and transmission of electric
power.
The mere undertaking of petitioner NPC that it shall be responsible for
the payment of all real estate taxes and assessments, does not justify the
exemption. The records show that NPC, no less, admits BPPC s ownership of
the machineries and equipment in the power plant. Likewise, the provisions
of the BOT agreement clearly show BPPC s ownership. Thus, ownership is not
a disputed issue.
Rather than ownership, NPC s use of the machineries and equipment is
the critical issue, since its claim under Sec. 234 (c) of the LGC is premised on
actual, direct and exclusive use. To support this claim, NPC characterizes the
BOT Agreement as a mere financing agreement where BPPC is the financier,
while it (NPC) is the actual user of the properties.
Under the BOT concept, it is the project proponent who constructs the
project at its own cost and subsequently operates and manages it. The
proponent secures the return on its investments from those using the project
s facilities through appropriate tolls, fees, rentals, and charges not exceeding
those proposed in its bid or as negotiated. At the end of the fixed term
agreed upon, the project proponent transfers the ownership of the facility to
the government agency. By its express terms, BPPC has complete ownership
of the project, including the machineries and equipment used, subject only to
the transfer of these properties without cost to NPC after the lapse of the
period agreed upon.
Consistent with the BOT concept and as implemented, BPPC the ownermanager-operator of the project is the actual user of its machineries and
equipment. BPPC s ownership and use of the machineries and equipment are
actual, direct, and immediate, while NPC s is contingent and, at this stage of
the BOT Agreement, not sufficient to support its claim for tax exemption.
Lastly, the real concern for NPC in this case is its assumption under the
BOT agreement of BPPC is real property tax liability (which in itself is a
recognition that BPPC s real properties are not really tax exempt). NPC could
therefore not pass the tax exemption.
22
25
contract should have specifically stated "real estate taxes" due for the years
1977,1978 and first quarter of 1979. The payments made by the plaintiffappellant cannot be construed to be an admission of a tax liability since they
were paid under protest and were done only in compliance with one of the
requirements for the consummation of the sale as directed by the City
Treasurer of Manila.
Hence, the tax assessed and collected from the plaintiff-appellants is
not valid and a refund by the City government is in order.
The contention of the plaintiff-appellant that the respondent GSIS is
liable to reimburse the tax because the latter allegedly failed to exercise its
claim to the tax exemption privilege is without merit. The exemption is
explicitly granted by law and need not be applied for.
RE: WHO ARE LIABLE FOR THE REAL PROPERTY TAXES.
Government Insurance System
Vs.
City Treasurer of Manila
G.R. No. 186242
December 23, 2009
FACTS:
Petitioner GSIS owns or used to own two (2) parcels of land, one
located at Katigbak 25th St., Bonifacio Drive, Manila (Katigbak property), and
the other, at Concepcion cor. ArrocerosSts., also in Manila (ConcepcionArroceros property). The controversy started when the City Treasurer of
Manila addressed a letter dated September 13, 2002 to GSIS President and
General Manager Winston F. Garcia informing him of the unpaid real property
taxes due on the aforementioned properties for years 1992 to 2002 The
letter warned of the inclusion of the subject properties in the scheduled
October 30, 2002 public auction of all delinquent properties in Manila should
the unpaid taxes remain unsettled before that date.
In it, GSIS prayed for the nullification of the assessments thus made
and that Respondents City of Manila officials be permanently enjoined from
proceedings against GSIS property. GSIS would later amend its petition to
include the fact that: (a) the Katigbak property, covered by TCT Nos. 117685
and 119465 in the name of GSIS, has, since November 1991, been leased to
and occupied by the Manila Hotel Corporation (MHC), which has contractually
bound itself to pay any realty taxes that may be imposed on the subject
property; and (b) the Concepcion-Arroceros property is partly occupied by
GSIS and partly occupied by the MeTC of Manila.
ISSUE:
Whether petitioner is exempt from the payment of real property taxes
on the property it leased to a taxable entity.
28
HELD:
The Supreme Court finds that GSIS enjoys under its charter full tax
exemption. Moreover, as an instrumentality of the national government, it is
itself not liable to pay real estate taxes assessed by the City of Manila
against its Katigbak and Concepcion-Arroceros properties. Following the
"beneficial use" rule, however, accrued real property taxes are due from the
Katigbak property, leased as it is to a taxable entity. But the corresponding
liability for the payment thereof devolves on the taxable beneficial user. The
Katigbak property cannot in any event be subject of a public auction sale,
notwithstanding its realty tax delinquency. This means that the City of Manila
has to satisfy its tax claim by serving the accrued realty tax assessment on
MHC, as the taxable beneficial user of the Katigbak property and, in case of
nonpayment, through means other than the sale at public auction of the
leased property.
Jaime Lopez
Vs.
City of Manila
G.R. No. 127139
February 19, 1999
FACTS:
The Local Government Code of 1991 requires the conduct of the
general revision of real property that the provincial, city or municipal
assessor shall undertake a general revision of real property assessments
within two (2) years after the effectivity of the Code and every three (3)
years thereafter.
Although R.A. 7160 took effect on January 1, 1992, the revision of real
property assessments prescribed therein was not yet enforced in the City of
Manila. However, the process of real property valuation had already been
started and done by the former city assessor.
On December 12, 1995, the City Council enacted Manila Ordinance No.
7894, entitled: "An Ordinance prescribed as the Revised Schedule of Fair
Market Values of Real Properties the City of Manila." With the implementation
of Manila Ordinance No. 7894, the tax on the land owned by the petitioner
was increased by five hundred eighty percent (580%). With respect to the
improvement on petitioner's property, the tax increased by two hundred fifty
percent (250%).
As a consequence of these increases, petitioner Jaime C. Lopez, filed
on March 18, 1996, a special proceeding for the declaration of nullity of the
City of Manila Ordinance No. 7894 with preliminary injunction and prayer for
temporary restraining order (TRO). The petition alleged that Manila
Ordinance No. 7894 appears to be "unjust, excessive, oppressive or
confiscatory."
ISSUE:
Whether or not the petitioner failed to exhaust all administrative
remedies available and thus contrary to established procedural rules.
HELD:
As a general rule, where the law provides for the remedies against the
action of an administrative board, body, or officer, relief to courts can be
sought only after exhausting all remedies provided. The reason rests upon
the presumption that the administrative body, if given the chance to correct
its mistake or error, may amend its decision on a given matter and decide it
properly. Therefore, where a remedy is available within the administrative
machinery, this should be resorted to before resort can be made to the
courts, not only to give the administrative agency the opportunity to decide
the matter by itself correctly, but also to prevent unnecessary and premature
resort to courts. This rule, however, admits certain exceptions.
30
Applying the same on the case, on the second exception on the rule of
exhaustion of administrative remedies, there is no showing that
administrative bodies, viz., The Secretary of Justice, the City Treasurer, Board
of Assessment Appeals, and the Central Board of Assessment Appeals are in
estoppel. On the third exception, it does not appear that Ordinance No. 7894
or the amendatory Ordinance No. 7905 are patently illegal. Re the fourth
exception, in the light of circumstances as pointed elsewhere herein, the
matter does not need a compelling judicial intervention. On the fifth
exception, the claim of the petitioner is not small. Re the sixth exception, the
court does not see any irreparable damage that the petitioner will suffer if he
had paid or will pay under protest as per the ordinance. He could always ask
for a refund of the excess amount he paid under protest or be credited
thereof if the administrative bodies mentioned in the law (R.A. 7180 15) will
find that his position is meritorious. Re the seventh exception, the court is of
the opinion that administrative relief provided for in the law are plain, speedy
and adequate. On the eight exception, while the controversy involves public
interest, judicial intervention as the petitioner would like this court to do
should be avoided as demonstrated herein below in the discussion of the
third issue. The ninth and tenth exception obviously are not applicable in the
instant case. The petition does not fall under any of the exceptions to excuse
compliance with the rule on exhaustion of administrative remedies.
With regard to question on the legality of a tax ordinance, the remedies
available to the taxpayers are provided under R.A. 7160 where it provides,
that the taxpayer may question the constitutionality or legality of tax
ordinance on appeal within thirty (30) days from effectivity thereof, to the
Secretary of Justice. The petitioner after finding that his assessment is
unjust, confiscatory, or excessive, must have brought the case before the
Secretary of Justice for question of legality or constitutionality of the city
ordinance.
Under Section 226 of R.A. 7160, an owner of real property who in not
satisfied with the assessment of his property may, within sixty (60) days
from notice of assessment, appeal to the Board of Assessment
Appeals. Should the taxpayers question the excessiveness of the amount of
tax, he must first pay the amount due, in accordance with Section 252 of R.A.
7160. Then, he must request the annotation of the phrase "paid under
protest" and accordingly appeal to the Board of Assessment Appeals by filing
a petition under oath together with copies of the tax declarations and
affidavits or documents to support his appeal.
The rule is well-settled that courts will not interfere in matters which
addressed to the sound discretion of government agencies entrusted with
the regulations of activities coming under the special technical knowledge
and training of such agencies.
31
within the city's taxing jurisdiction and for violation of Sec. 3 (e) of R.A. 3019,
otherwise known as the Anti-Graft and Corrupt Practices Act[,] for the act of
causing undue injury to the City Government by giving private persons
unwarranted benefits, advantages or preferences in the discharge of their
official and administrative functions through manifest partiality, evident bad
faith or gross inexcusable negligence by reassessing the real properties of
taxpayers without any authority whatsoever, thereby resulting in the
reduction of tax assessments to the prejudice of the city government .
ISSUE:
Whether or not petitioners violated the law by their acts of
accommodating requests for reconsideration of the revised assessments.
HELD:
Under the rules, the Supreme Court stated that the issuance of a
notice of assessment by the local assessor shall be his last action on a
particular assessment. On the side of the property owner, it is this last action
which gives him [the] right to appeal to the Local Board of Assessment
Appeals. The above procedure also, does not grant the property owner the
remedy of filing a motion for reconsideration before the local assessor.
The act of herein petitioners in providing the corresponding notices of
assessment the chance for the property owners concerned to file a motion
for reconsideration and for acting on the motions filed is not in accordance
with law and in excess of their authority and therefore constitutes ultra vires
acts. Indeed, the long-standing practice adverted to by petitioners does not
justify a continuance of their acts. We cannot sanction such compromising
situations. Henceforth, whenever the local assessor sends a notice to the
owner or lawful possessor of real property of its revised assessed value, the
former shall thereafter no longer have any jurisdiction to entertain any
request for a review or readjustment. The appropriate forum where the
aggrieved party may bring his appeal is the LBAA, as provided by law.
33
classification,
and
appraisal
of
properties. The September
3,
1986 and October 31, 1989 notices do not contain the essential information
that a notice of assessment must specify, namely, the value of a specific
property or proportion thereof which is being taxed, nor does it state the
discovery, listing, classification and appraisal of the property subject to
taxation. In fact, the tenor of the notices bespeaks an intention to collect
unpaid taxes, thus the reminder to the taxpayer that the failure to pay the
taxes shall authorize the government to auction off the properties subject to
taxes
or,
in
the
words
of
the
notice,Ipinaaalaala po lamang, ang sino mang magpabaya omagkautang ng
buwis ng maluwat ay isusubasta (Auction
Sale) ng pamahalaan ang inyong ari-arian ng naaayon sa batas.
The petitioner is also correct in pointing out that the last paragraph of
the said notices that inform the taxpayer that in case payment has already
been made, the notices may be disregarded is an indication that it is in fact a
notice of collection.
April 4, 2001
FACTS:
Petitioners alleged that on December 7, 1981, they had acquired the
condominium from Elias Imperial, the original registered owner,
for P100,000. The sale was purportedly evidenced by a Deed of Sale which,
however, had not and thenceforth never been registered with the Register of
Deeds.
Petitioners also averred that on December 9, 1985, Baguio City
Treasurer Juan Hernandez sold the property at a public auction due to
nonpayment of delinquent real estate taxes thereon. The property was sold
to Respondent HerminigildoTayag for P4, 400 which represented the unpaid
taxes.
Thus, petitioners filed a Complaint seeking the annulment of the
auction sale. They cited irregularities in the proceedings and noncompliance
with statutory requirements.
ISSUES:
Who should be notified with respect to the assessment of the real
property in question?
HELD:
The Supreme Court said in this regard unlike land registration
proceedings which are in rem, cases involving an auction sale of land for the
collection of delinquent taxes are in personam. Thus, notice by publication,
though sufficient in proceedings in rem, does not as a rule satisfy the
requirement of proceedings in personam. As such, mere publication of the
notice of delinquency would not suffice, considering that the procedure in tax
sales is in personam. It was, therefore, still incumbent upon the city treasurer
to send the notice of tax delinquency directly to the taxpayer in order to
protect the interests of the latter.
In the present case, the notice of delinquency was sent by registered
mail to the permanent address of the registered owner in Manila. In that
notice, the city treasurer of Baguio City directed him to settle the charges
immediately and to protect his interest in the property. Under the
circumstances, we hold that the notice sent by registered mail adequately
protected the rights of the taxpayer, who was the registered owner of the
condominium unit.
For purposes of the real property tax, the registered owner of the
property is deemed the taxpayer. Hence, only the registered owner is
entitled to a notice of tax delinquency and other proceedings relative to the
tax sale. Not being registered owners of the property, petitioners cannot
claim to have been deprived of such notice. In fact, they were not entitled to
it. For purposes of real property taxation, the registered owner of a property
is deemed the taxpayer and, hence, the only one entitled to a notice of tax
delinquency and the resultant proceedings relative to an auction sale.
36
38
Clearly, under Section 187 of the Local Government Code, the law
requires that the dissatisfied taxpayer who questions the validity or legality
of a tax ordinance must file his appeal to the Secretary of Justice, within 30
days from effectivity thereof. In case the Secretary decides the appeal, a
period also of 30 days is allowed for an aggrieved party to go to court but if
the Secretary does not act thereon, after the lapse of 60 days, a party could
already proceed to seek relief in court. These three separate periods are
clearly given for compliance as a prerequisite before seeking redress in a
competent court. Such statutory periods are set to prevent delays as well as
enhance the orderly and speedy discharge of judicial functions. For this
reason the courts construe these provisions of statutes as mandatory.
A municipal tax ordinance empowers a local government unit to
impose taxes. The power to tax is the most effective instrument to raise
needed revenues to finance and support the myriad activities of local
government units for the delivery of basic services essential to the promotion
of the general welfare and enhancement of peace, progress, and prosperity
of the people. Consequently, any delay in implementing tax measures would
be to the detriment of the public. It is for this reason that protests over tax
ordinances are required to be done within certain time frames. In the instant
case, it is our view that the failure of petitioners to appeal to the Secretary of
Justice within 30 days as required by Sec. 187 of R.A. 7160 is fatal to their
cause.
40
inhabitants are largely derived from its revenues and collections. Thus, it is
essential that the validity of revenue measures is not left uncertain for a
considerable length of time. Hence, the law provided a time limit for an
aggrieved party to assail the legality of revenue measures and tax
ordinances.
increasing their real estate taxes. The petitioners contended that such
assessment made by the municipality of Pasig was in violation of PD921
which states that the schedule of values of real properties in the Metropolitan
Manila area shall be prepared jointly by the city assessors in the districts
created therein and thus is the basis of the real estate tax, thus, a collegial
action of all assessors in the district are needed as opposed to that under the
local government Code which does not necessarily require such joint action.
Not satisfied of the assessment, petitioners on 29 March 1994 filed with the
Regional Trial Court Petition for to declare null and void the new tax
assessments and to enjoin the collection of real estate taxes based on said
assessments which denied the same. The case was elevated to the Court of
appeals and ruled that petitioners failed to avail of either Section 226 of R.A.
7160, that is by appealing the assessment of their properties to the Board of
Assessment Appeal within sixty 160) days from the date of receipt of the
written Notice of Assessment or by paying the real estate tax under protest,
thus they failed to exhaust administrative remedies resulting to a premature
filing of the case.
ISSUE:
Whether or not the case is premature because petitioners did not
exhaust all administrative remedies (not appealing with the CBAA and for
having not paid under protest made).
HELD:
No. The Supreme Court held that although as a rule, administrative
remedies must first be exhausted before resort to judicial action can prosper,
there is a well-settled exception in cases where the controversy does not
involve questions of fact but only of law. In the present case, the parties,
even during the proceedings in the lower court on 11 April 1994, already
agreed "that the issues in the petition are legal, and thus, no evidence was
presented in said court. In laying down the powers of the Local Board of
Assessment Appeals, R.A. 7160 provides in Sec. 229 (b) that the proceedings
of the Board shall be conducted solely for the purpose of ascertaining the
facts . . . ." It follows that appeals to this Board may be fruitful only where
questions of fact are involved.
Again, the protest contemplated under Sec. 252 of R.A. 7160 is needed
where there is a question as to the reasonableness of the amount assessed.
Hence, if a taxpayer disputes the reasonableness of an increase in a real
estate tax assessment, he is required to "first pay the tax" under protest.
Otherwise, the city or municipal treasurer will not act on his protest. In the
case at bench however, the petitioners are questioning the very authority
and power of the assessor, acting solely and independently, to impose the
assessment and of the treasurer to collect the tax. These are not questions
merely of amounts of the increase in the tax but attacks on the very validity
of any increase.
43
nevertheless, denied the same exemption again stating among others that
while the beneficial use of the properties being sought to be exempt from
Real Property Taxes were donated to SYSTEMS PLUS COMPUTER COLLEGE,
there is no showing that the same are "actually, directly and exclusively"
used either for religious, charitable, or educational purposes. Twice
debunked, petitioner filed a petition for mandamus with the respondent
Regional Trial Court.
ISSUE:
(1)
Whether or not mandamus does not lie against the public
respondents:
(2) Whether or not petitioner failed to exhaust available
administrative remedies for filing its case directly to the RTC instead of the
Local Assessment Board first.
HELD:
1. No. Mandamus does not lie against the respondent City Assessor in
the exercise of his function of assessing properties for taxation purposes.
While its duty to conduct assessments is a ministerial function, the actual
exercise thereof is necessarily discretionary. Well-settled is the rule that
mandamus may not be availed of to direct the exercise of judgment or
discretion in a particular way, or to retract or reverse an action already taken
in the exercise of either
2. Yes. The Supreme Court held that Under Section 226 of RA 7160,
the remedy of appeal to the Local Board of Assessment Appeals is available
from an adverse ruling or action of the provincial, city or municipal assessor
in the assessment of property, thus:
Section 226.Local Board of Assessment Appeals. -Any owner or person
having legal interest in the property who is not satisfied with the action of
the provincial, city or municipal assessor in the assessment of his property
may, within sixty (60) days from the date of receipt of the written notice of
assessment, appeal to the Board of Assessment Appeals of the province or
city by filing a petition under oath in the form prescribed for the purpose,
together with copies of the tax declarations and such affidavits or documents
submitted in support of the appeal.
It is then well settled that the determination made by the respondent
City Assessor with regard to the taxability of the subject real properties
squarely falls within its power to assess properties for taxation purposes is
subject to appeal before the Local Board of Assessment Appeals.
The petitioner cannot bypass the authority of the concerned
administrative agencies and directly seek redress from the courts even on
the pretext of raising a supposedly pure question of law without violating the
doctrine of exhaustion of administrative remedies. Hence, when the law
provides for remedies against the action of an administrative board, body, or
officer, as in the case at bar, relief to the courts can be made only after
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Yes. The Court is not convinced with petitioners argument that their
recourse of filing a petition before the trial court is proper as they are
questioning the very authority of respondents to assess and collect the real
estate taxes due on their properties, and not merely the correctness of said
amount. The well-established rule is that the allegations in the complaint and
the character of the relief sought determine the nature of an action. A
perusal of the petition before the RTC plainly shows that what is actually
being assailed is the correctness of the assessments made by the local
assessor of Paraaque on petitioners properties. The allegations in the said
petition purportedly questioning the assessors authority to assess and
collect the taxes were obviously made in order to justify the filing of the
petition with the RTC. In fact, there is nothing in the said petition that
supports their claim regarding the assessors alleged lack of authority. In the
case of Ty vs. Trampe,cited by petitioners, the Court held that jurisdiction
over the case was properly vested with the trial court because what was
being questioned is the very authority and power of the assessor, acting
solely and independently, to impose the assessment and of the treasurer to
collect the tax, and not merely of amounts of the increase in the tax.
As such, The Court held that, should the taxpayer/real property owner
question the excessiveness or reasonableness of the assessment,
Section252directs that the taxpayer should first pay the tax due before his
protest can be entertained. There shall be annotated on the tax receipts the
words "paid under protest." It is only after the taxpayer has paid the tax due
that he may file a protest in writing within thirty days from payment of the
tax to the Provincial, City or Municipal Treasurer, who shall decide the protest
within sixty days from receipt. In no case is the local treasurer obliged to
entertain the protest unless the tax due has been paid.
If the local treasurer denies the protest or fails to act upon it within the
60-day period provided for in Section 252, the taxpayer/real property owner
may then appeal or directly file a verified petition with the LBAA within sixty
days from denial of the protest or receipt of the notice of assessment, as
provided in Section 226 of R.A. No. 7160. And, if the taxpayer is not satisfied
with the decision of the LBAA, he may elevate the same to the CBAA, which
exercises exclusive jurisdiction to hear and decide all appeals from the
decisions, orders and resolutions of the Local Boards involving contested
assessments of real properties, claims for tax refund and/or tax credits or
overpayments of taxes. An appeal may be taken to the CBAA by filing a
notice of appeal within thirty days from receipt thereof. From the CBAA, the
dispute may then be taken to the Court of Appeals by filing a verified petition
for review under Rule 43 of the Rules of Court.
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The petitioner herein, Manila Electric Company (MERALCO), a dulyorganized corporation in the Philippines from 1968 to 1972 is engaged in the
distribution of electricity, erected four (4) power generating plants in Sucat,
Muntinlupa. From 1975 to 1978 MERALCO paid the real property taxes on the
said properties on the basis of their assessed value as stated in the tax
declarations. In 1985, the Offices of the Municipal Assessor and Municipal
Treasurer of Muntinlupa, upon review of the records pertaining to
assessments and collection of real property taxes, discovered, among others,
that MERALCO, for the period beginning 1976 to 1978, misdeclared and/or
failed to declare for taxation purposes a number of real properties, consisting
of several equipment and machineries, found in the said power plants as
observed on its sale to NAPOCOR of its powerplant. The Municipal Assessor
of Muntinlupa then declared and assessed the subject real properties for
taxation purposes. By virtue of such, Municipal Treasurer Eduardo A. Alon
forwarded a supplemental collection notice to MERALCO, dated 31 October
1989 and a formal notice, demanding the immediate payment of their
unpaid real property taxes inclusive of penalties and accrued interest.
Immediately, MERALCO filed before the Regional Trial Court (RTC) a Petition
for Prohibition with Prayer for Writ of Preliminary Mandatory Injunction and/or
Temporary Restraining Order (TRO) praying, among others, that a TRO be
issued to enjoin the Municipal Treasurer of Muntinlupa from enforcing the
warrants of garnishment against their accounts in several banks.
ISSUE:
Whether or not the trial court is without authority to address the
alleged irregularity in the issuance of the notices of assessment without prior
tax payment, under protest, by petitioner.
HELD:
Yes. A notice of assessment should effectively inform the taxpayer of
the value of a specific property, or proportion thereof subject to tax,
including the discovery, listing, classification, and appraisal of properties.
From the tone and content of the notices, the 3 September 1986 notices sent
by former Municipal Treasurer Norberto A. San Mateo to petitioner MERALCO
are the notices of assessment required by the law as it merely informed the
petitioner that it has yet to pay the taxes in accordance with the reassessed
values of the real property mentioned therein. The 31 October 1989 notices
sent by Municipal Treasurer Eduardo A. Alon to MERALCO is likewise of the
same character. Only the letter dated 20 November 1989 sent by Municipal
Treasurer Eduardo A. Alon to petitioner MERALCO could qualify as the actual
notice of collection since it is an unmistakable demand for payment of back
taxes.
Be that as it may, petitioner was correct when it pointed out that the
Municipal Treasurer, contrary to that required by law, issued the notices of
assessment. However, the trial court is without authority to address the
alleged irregularity in the issuance of the notices of assessment without prior
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ISSUE:
Whether the Courts May 18, 2001 Decision should be set aside and
factual findings contained in the Courts February 1, 2002 Resolution
regarding the same case be upheld.
HELD:
Upon a careful review of the records of this case and the applicable
jurisprudence, we find that it is the contention of the petitioner and the ruling
of this Court in its February 1, 2002 Resolution that upheld the petitioners
contention and ruled that the aforequoted letters/notices are not the notices
of assessment envisaged in Section 27 of P.D. No. 464 which is correct.
Indeed, even the respondent admitted in his comment on the petition that:
Indeed, respondent did not issue any notice of assessment because
statutorily, he is not the proper officer obliged to do so. Under Chapter VIII,
Sections 90 and 90-A of the Real Property Tax Code, the functions related to
the appraisal and assessment for tax purposes of real properties situated
within a municipality pertains to the Municipal Deputy Assessor and for the
municipalities within Metropolitan Manila, the same is lodged, pursuant to
P.D. No. 921, on the Municipal Assessor.
The petitioners action for prohibition was not premature. Hence, the
Court of Appeals erred in rendering judgment granting the petition for
certiorari of the respondent
a. file a sworn statement declaring the true value of the real property,
whether taxable or exempt; and
b. file sufficient documentary evidence supporting its claim for tax
exemption.
While a real property owners failure to comply with Sections 202 and
206 does not necessarily negate its tax obligation nor invalidate its
legitimate claim for tax exemption, Napocors omission to do so in this case
can be construed as contradictory to its claim of ownership of the subject
machineries. That it assumed liability for the taxes that may be imposed on
the subject machineries similarly does not clothe it with legal title over the
same. We do not believe that the phrase "person having legal interest in the
property" in Section 226 of the LGC can include an entity that assumes
another persons tax liability by contract.
2. Yes. The Supreme Court held that by providing that real property not
declared and proved as tax-exempt shall be included in the assessment roll,
the above-quoted provision implies that the local assessor has the authority
to assess the property for realty taxes, and any subsequent claim for
exemption shall be allowed only when sufficient proof has been adduced
supporting the claim. Since Napocor was simply questioning the correctness
of the assessment, it should have first complied with Section 252,
particularly the requirement of payment under protest. Napocors failure to
prove that this requirement has been complied with thus renders its
administrative protest under Section 226 of the LGC without any effect. No
protest shall be entertained unless the taxpayer first pays the tax.
It was an ill-advised move for Napocor to directly file an appeal with
the LBAA under Section 226 without first paying the tax as required under
Section 252. Sections 252 and 226 provide successive administrative
remedies to a taxpayer who questions the correctness of an assessment.
Section 226, in declaring that "any owner or person having legal interest in
the property who is not satisfied with the action of the provincial, city, or
municipal assessor in the assessment of his property may x xx appeal to the
Board of Assessment Appeals x xx," should be read in conjunction with
Section 252 (d), which states that "in the event that the protest is denied x
xx, the taxpayer may avail of the remedies as provided for in Chapter 3, Title
II, Book II of the LGC [Chapter 3 refers to Assessment Appeals, which
includes Sections 226 to 231]. The "action" referred to in Section 226 (in
relation to a protest of real property tax assessment) thus refers to the local
assessors act of denying the protest filed pursuant to Section 252. Without
the action of the local assessor, the appellate authority of the LBAA cannot
be invoked. Napocors action before the LBAA was thus prematurely filed.
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failed to exhaust administrative remedies. The RTC ruled that the grant of a
tax refund was not a ministerial duty compellable by writ of mandamus.
Undeterred, the petitioners sought reconsideration in behalf of
Surfield, insisting that the CTA had jurisdiction pursuant to Section 7(a)(3) of
Republic Act No. 9282; and arguing that the CTA First Division manifested its
"lack of understanding or respect" for the doctrine of stare decisis in not
applying the ruling in Ty v. Trampe (G.R. No. 117577, December 1, 1995, 250
SCRA 500), to the effect that there was no need to file an appeal before the
Local Board of Assessment Appeals pursuant to Section 22 of Republic Act
No. 7160.
On March 15, 2006, the CTA First Division denied Surfields motion for
reconsideration. On the issue of jurisdiction, the CTA First Division explained
that the jurisdiction conferred by Section 7(a) (3) of Republic Act No. 1125, as
amended by Republic Act No. 9282, referred to appeals from the decisions,
orders, or resolutions of the RTCs in local tax cases and did not include the
real property tax, an ad valorem tax, the refund of excess payment of which
Surfield was claiming. Accordingly, the CTA First Division ruled that the
jurisdiction of the CTA concerning real property tax cases fell under a
different section of Republic Act No. 9282 and under a separate book of
Republic Act No. 7160.
ISSUE:
Whether or not mandamus is a proper remedy when there is a denial of
the protest and refund.
HELD:
No. Since the Honorable Court simply quoted Section 7(a) (5), and it
totally ignored Section 7(a) (3), to perfunctorily find that "undoubtedly,
appeals of the decisions or rulings of the Regional Trial Court concerning real
property taxes evidently do not fall within the jurisdiction of the CTA," the
undersigned counsel formed a perception that the Honorable Court was
totally unaware or ignorant of the new provision, Section 7(a) (3). Hence the
statements that it was gross ignorance of the law for the Honorable Court to
have held that it has no jurisdiction, as well as, the grossness of the
Honorable Courts ignorance of the law is matched only by the unequivocal
expression of this Honorable Courts jurisdiction over the instant case were
an honest and frank articulation of undersigned counsels perception that
was influenced by its failure to understand why the Honorable Court totally
ignored Section 7(a)(3) in ruling on its lack of jurisdiction.
We might have been more understanding of the milieu in which the
petitioners made the statements had they convinced us that the CTA First
Division truly erred in holding itself bereft of jurisdiction over the appeal of
their client. But our review of the text of the legal provisions involved reveals
that the error was committed by them, not by the CTA First Division. This
result became immediately evident from a reading of Section 7(a)(3) and
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Section 7(a)(5) of Republic Act No. 9282, the former being the anchor for
their claim that the CTA really had jurisdiction, to wit:
Section 7.Jurisdiction. The CTA shall exercise:
(a) Exclusive appellate jurisdiction to review by appeal, as herein
provided:
xxx
(3) Decisions, orders or resolutions of the Regional Trial Courts in
local tax cases originally decided or resolved by them in the exercise of
their original or appellate jurisdiction; (emphasis supplied)
xxx
(5) Decisions of the Central Board of Assessment Appeals in the
exercise of its appellate jurisdiction over cases involving the
assessment and taxation of real property originally decided by the
provincial or city board of assessment appeals; (emphasis supplied)
xxx
As can be read and seen, Section 7(a)(3) covers only appeals of the
"decisions, orders or resolutions of the Regional Trial Courts in local tax cases
originally decided or resolved by them in the exercise of their original or
appellate jurisdiction." The provision is clearly limited to local tax disputes
decided by the Regional Trial Courts. In contrast, Section 7(a)(5) grants the
CTA cognizance of appeals of the "decisions of the Central Board of
Assessment Appeals in the exercise of its appellate jurisdiction over cases
involving the assessment and taxation of real property originally decided by
the provincial or city board of assessment appeals." In its resolution of March
15, 2006, therefore, the CTA First Division forthrightly explained why,
contrary to the petitioners urging, Section 7(a)(3) was not applicable by
clarifying that a real property tax, being an ad valorem tax, could not be
treated as a local tax.
59
as the Quezon City Revenue Code of 1993, provides that the right to redeem
should be exercised within 1 year from the date of the annotation of the sale
of the property at the proper registry.
To harmonize the provisions of the two laws, Section 14 (a), Paragraph 7 of
City Ordinance No. SP-91, S-93 should be construed as to define the phrase
"1 year from the date of sale" as appearing in Section 261 of R.A. No. 7160,
to mean "1 year from the date of the annotation of the sale of the property
at the proper registry." Consequently, the counting of the 1 year redemption
period of property sold at public auction for its tax delinquency should be
counted from the date of annotation of the certificate of sale in the proper
Register of Deeds. Applying the foregoing to the case at bar, RCBCs tender
of payment was well within the redemption period.
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