San Juan vs Castro, GR No.

174617, December 27, 2007

FACTS: Petitioner, registered owners of real properties in Marikina City, conveyed by deed of
assignment, the properties to the Saints and Angels Realty Corp. (SARC), in exchange for shares of stock
placed in San Juan’s name and the remaining par value in the name of his wife. Upon payment of
transfer tax, to the City Treasurer’s Office of Marikina stated that the tax based on the consideration is
the amount stated in the deed of assignment. City Treasurer Castro informed him however that the tax
due is based on the fair market value of the property.

Petitioner protested the basis of the tax due. Respondent replied stating that in cases of transfer or real
property not involving monetary consideration, it is certain that the fair market value or the zonal value
of the property is the basis of the tax rate.

Petitioner filed before the RTC a petition for mandamus against respondent City Treasurer, praying that
he be compelled to to accept payment of transfer tax based on the actual consideration of the transfer.

ISSUE: When can a protest of assessment be availed of?

RULING: Under Section 195 of the LGC, a taxpayer who disagrees with a tax assessment made by a local
treasurer may file a written protest with the local treasurer contesting the assessment; otherwise, the
assessment shall become final and executory. The taxpayer shall have thirty (30) days from the receipt
of the denial of the protest or from the lapse of the sixty-day (60) period prescribed herein within which
to appeal with the court of competent jurisdiction, otherwise the assessment becomes conclusive and
unappeable.

That petitioner protested in writing against the assessment of tax due and respondent sent him the July
15, 2005 letter which operated as a denial of petitioner’s written protest.

Petitioner should thus have either appealed the assessment before the court of competent jurisdiction
or paid the tax and then sought a refund.

Petitioner did not observe any of these remedies available to him, however. He instead opted to file a
petition for mandamus to compel respondent to accept payment of transfer tax as computed by him.

Angeles City vs Angeles Electric Corporation, GR No. 166134, June 29, 2010

FACTS: ON June 22, 2004, the City Treasurer issued a Notice of Assessment on respondent for payment
of business tax, license fee and other charges for the period of 1993 to 2004. The latter seasonably
protested but was denied by the City Treasurer. On April 5, 2004, the City Treasurer levied on
respondent’s real properties and a notice was published and posted announcing a public auction of said
properties. The electric corporation filed an Urgent Motion for the Issuance of TRO and/or Writ of
Preliminary Injunction to enjoin petitioner and its City Treasurer from levying and disposing such
properties at public auction.
ISSUE: Whether local government unites may be enjoined from collecting taxes

RULING: YES. Unlike the NIRC, the LGC does not contain any specific provision prohibiting courts from
enjoining the collection of taxes. However, the procedural rules and requirements under the Rules of
Court must still be complied with.

Manila Electric Company vs The City Assessor and City Treasurer of Lucena City, GR No. 166102, August
5, 2015

FACTS: On February 20, 1989, MERALCO received from the City Assessor of Lucena a notice that electric
facilities, classified as capital investment of the company were subjected to real property tax as of 1985.
MERALCO appealed the Tax Declaration before the LBAA of Lucena City and claimed that its capital
investment consisted only of its substation facilities and that MERALCO was exempted from payment of
real property tax on said substation facilities.

The LBAA rendered a Decision finding that MERALCO was required to pay the City Government of
Lucena a 5% tax of its gross earnings which became final and executory.

MERALCO again received a letter from the City Treasurer of Lucena six years later, which they were
being assessed for real property delinquency on its machineries beginning 1990. MERALCO argues that
its transformers, electric posts, transmission lines, insulators, and electric meters are not subject to real
property tax, given that the definition of “machinery” under Section 199(o) of the Local Government
Code must still be within the contemplation of real or immovable property under the Civil Code.

ISSUE: Whether MERALCO is liable for real property tax

HELD: YES. The last paragraph of Section 234 had unequivocally withdrawn exemptions from payment of
real property taxes granted to natural or juridical persons, including government-owned or controlled
corporations, except as provided in the same section.

MERALCO, a private corporation engaged in electric distribution, and its transformers, electric posts,
transmission lines, insulators, and electric meters used commercially do not qualify under any of the
ownership, character, and usage exemptions enumerated in the Local Government Code. Not being
among the recognized exemptions from real property tax in Section 234 of the Local Government Code,
then the exemption of the transformers, electric posts, transmission lines, insulators, and electric
meters of MERALCO from real property tax granted under its franchise was among the exemptions
withdrawn upon the effectivity of the Local Government Code on January 1, 1998.

Provincial Assessor of Agusan del Sur vs Filipinas Palm Oil, GR No. 183416, October 5, 2015
FACTS: The Provincial-Assessor of Agusan Del Sur (Provincial Assessor) assessed Filipinas' properties
found within the plantation area, which Filipinas assailed before the Local Board of Assessment Appeals
(LBAA) on the ground that in imposing real property taxes against the petitioner owned by NGPI-NGEI
cooperatives who leased the same to Filipinas.

ISSUE: Whether NGPI-NGEI is exempt from payment of real property tax as lessee of the parcel of land
owned by cooperatives

RULING: YES. The exemption of real property taxes given to cooperatives applies regardless of whether
or not the land owned is leased. Although the improvements were primarily built for the lessee’s
benefit, such inured to the benefit of the landowner-lessor.

Capitol Wireless, Inc vs Provincial Treasurer of Batangas, GR. No 180110, May 30, 2016

Petitioner, Capitol Wireless, Inc. (CapWire), is a Philippine corporation in the business of providing
international telecommunication services. It has signed agreements with other local and foreign
telecommunications companies covering an international network of submarine cable systems. The
agreements provide for co-ownership and other rights among the parties over the network. Petitioner
claims that it is co-owner only of the so called “Wet Segment” of the APCN, while the landing stations or
terminals and Segment E of APCN located in Nasugbu, Batangas are allegedly owned by PLDT. Moreover,
it alleges that the Wet Segment is laid in international, and not Philippine waters.

For loan restructuring purposes, petitioner engaged an appraiser to assess the market value of the
international submarine cable system and the cost to CapWire. Respondent Provincial Assessor of
Batangas had determined that the submarine cable systems described in CapWire’s Sworn Statement
are taxable real property. Petitioner contested this by reasoning that the cable system lies outside of
Philippine territory i.e. international waters.

ISSUE: Whether the submarine communications cable is subject to real property tax

RULING: Yes. Submarine or undersea communication cables are akin to electric transmission lines which
recently declared in MERALCO vs City Assessor. Petitioner also failed to prove that it is exempted from
payment of real property tax. Further, it may be classified as “machinery” such pieces of equipment
serve the owner’s business or tend to meet the needs of his industry or works that are on real estate.

MIAA vs CA, GR 155650, July 20, 2006

FACTS: MIAA received Final Notices of Real Estate Tax Delinquency from the City of Parañaque for the
taxable years 1992 to 2001. The City of Parañaque, through its City Treasurer, issued notices of levy and
warrants of levy on the Airport Lands and Buildings.
Paranaque’s Contention: the Local Government Code expressly withdrew the tax exemption privileges of
“government-owned and-controlled corporations” upon the effectivity of the Local Government Code.
Respondents also argue that an international airport is not among the exceptions mentioned in the Local
Government Code. Thus, respondents assert that MIAA cannot claim that the Airport Lands and
Buildings are exempt from real estate tax.

MIAA’s contention: Airport Lands and Buildings are owned by the Republic. The government cannot tax
itself. The reason for tax exemption of public property is that its taxation would not inure to any public
advantage, since in such a case the tax debtor is also the tax creditor.

ISSUE: Whether Airport Lands and Buildings of MIAA are exempt from real estate tax under existing laws

RULING: YES. MIAA is a government instrumentality vested with corporate powers to perform efficiently
its governmental functions. MIAA is like any other government instrumentality, the only difference is
that MIAA is vested with corporate powers.

The Airport Lands and Buildings of MIAA are property of public dominion and therefore owned by the
State or the Republic of the Philippines. Properties of public dominion, being for public use, are not
subject to levy, encumbrance or disposition through public or private sale. Any encumbrance, levy on
execution or auction sale of any property of public dominion is void for being contrary to public policy.
Essential public services will stop if properties of public dominion are subject to encumbrances,
foreclosures and auction sale.

GSIS vs City Treasurer and Assessor of Manila, GR No. 186242, December 23, 2009

FACTS: Petitioner GSIS owns or used to own two parcels of land, one located at Katigbak 25th St.,
Bonifacio Drive, Manila (Katigbak property), and the other, at Concepcion cor. Arroceros Sts., also in
Manila (Concepcion-Arroceros property). Title to the Concepcion-Arroceros property was transferred to
this Court in 2005 pursuant to Proclamation No. 835. Both the GSIS and the Metropolitan Trial Court
(MeTC) of Manila occupy the Concepcion-Arroceros property, while the Katigbak property was under
lease.

The City Treasurer of Manila addressed a letter 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.

ISSUE: 1. Whether petitioner is exempt from the payment of real property taxes

2. Assuming that it is so exempt, whether GSIS is liable for real property taxes for its properties leased to
a taxable entity
RULING: 1. YES. Pursuant to Sec. 33 of PD 1146, GSIS enjoyed tax exemption from real estate taxes,
among other tax burdens, until January 1, 1992 when the LGC took effect and withdrew exemptions
from payment of real estate taxes privileges granted under PD 1146. RA 8291 restored in 1997 the tax
exempt status of GSIS by reenacting under its Sec. 39 what was once Sec. 33 of P.D. 1146.

2. NO. GSIS, as a government instrumentality, is not a taxable juridical person under Sec. 133(o) of the
LGC. GSIS, however, lost in a sense that status with respect to the Katigbak property when it contracted
its beneficial use to MHC, doubtless a taxable person. Thus, the real estate tax assessment of covering
1992 to 2002 over the subject Katigbak property is valid insofar as said tax delinquency is concerned as
assessed over said property.

As a matter of law and contract, MHC stands liable to pay the realty taxes due on the Katigbak property.

Lung Center of the Philippines vs Quezon City, Gr No. 144104, June 29, 2004

FACTS: The petitioner Lung Center is a non-stock and non-profit entity. It is the registered owner of a
parcel of land. Erected in the middle lot is a hospital known as the Lung Center of the Philippines. It
leased several of its idle areas to private parties.

The petitioner accepts paying and non-paying patients. It also renders medical services to out-patients,
both paying and non-paying. Aside from its income from paying patients, the petitioner receives annual
subsidies from the government.

Both the land and the hospital building of the petitioner were assessed for real property taxes by the
City Assessor of Quezon City.

The petitioner filed a Claim for Exemption from real property taxes with the City Assessor, predicated on
its claim that it is a charitable institution. The petitioner’s request was denied,

ISSUE: Whether the real properties of the petitioner are exempt from real property taxes

RULING: NO. The precise area of land leased by private persons to be taxed. Petitioner failed to
discharge its burden to prove that the entirety of its real property is actually directly and exclusively
used for charitable purposes. While portions of the hospital are used for charity, other portions are
being leased to private individuals.

City of Pasig vs Republic, GR No. 185023, August 24, 2011

FACTS: Mid-Pasig Land Development Corporation (MPLDC) owned two parcels of land situated in Pasig
City. Portions of the properties are leased to different business establishments.
In 1986, the registered owner of MPLDC, Jose Y. Campos (Campos), voluntarily surrendered MPLDC to
the Republic of the Philippines.

On 30 September 2002, the Pasig City Assessor's Office sent MPLDC two notices of tax delinquency for
its failure to pay real property tax on the properties for the period 1979 to 2001. In a letter dated 29
October 2002, Independent Realty Corporation (IRC) President Ernesto R. Jalandoni (Jalandoni) and
Treasurer Rosario Razon informed the Pasig City Treasurer that the tax for the period 1979 to 1986 had
been paid, and that the properties were exempt from tax beginning 1987.

ISSUE: Whether the subject properties are already exempted from real property tax when it was
voluntarily surrendered to the government by the original owner thereof

RULING: No. While the Republic of the Philippines is the presumptive owner of the properties for
taxation purposes, such properties are exempt from real property tax "except when the beneficial use
thereof has been granted, for consideration or otherwise, to a taxable person." Thus, the portions of the
properties not leased to taxable entities are exempt from real estate tax while the portions of the
properties leased to taxable entities are subject to real estate tax. The law imposes the liability to pay
real estate tax on the Republic of the Philippines for the portions of the properties leased to taxable
entities. It is, of course, assumed that the Republic of the Philippines passes on the real estate tax as
part of the rent to the lessees.

NPC vs Province of Quezon, GR No. 171586, July 15, 2010

FACTS: NPC is a GOCC that entered into an Energy Conversion Agreement (ECA) under a build-operate-
transfer (BOT) arrangement with Mirant Pagbilao Corp. Under the agreement, Mirant will build and
finance a thermal power plant in Quezon, and operate and maintain the same for 25 years, after which,
Mirant will transfer the power plant to the Respondent without compensation. NPC also undertook to
pay all taxes that the government may impose on Mirant. Quezon then assessed Mirant real property
taxes on the power plant and its machineries.

ISSUE: Can Petitioner file the protest against the real property tax assessment?

RULING: NO. The two entities vested with personality to contest an assessment are (a) the owner or (b)
the person with legal interest in the property. NPC is neither the owner nor the possessor/user of the
subject machineries even if it will acquire ownership of the plant at the end of 25 years.

While the Petitioner does indeed assume responsibility for the taxes due on the power plant and its
machineries, the tax liability referred to is the liability arising from law that the local government unit
can rightfully and successfully enforce, not the contractual liability that is enforceable between the
parties to a contract. The local government units can neither be compelled to recognize the protest of a
tax assessment from the Petitioner, an entity against whom it cannot enforce the tax liability.