LOCGOV - # 68

Quezon City v. Bayantel (2006)

Doctrine: Congress may grant an exemption, previously withdrawn through the
enactment of the LGC, through subsequent legislation since the grant of taxing powers
to LGUs under the Constitution and the LGC does not affect the power of Congress to
grant exemptions.
Facts:
Bayantel is a legislative franchise holder under RA 3259. Under RA 3259, all of
Bayantels properties that are actually, directly, and exclusively used in the
pursuit of its franchise were exempt from tax.
The LGC then took effect and Section 234 of the LGC withdrew any exemption
from realty tax heretofore granted to or enjoyed by all persons, natural or
juridical.
On July 1992, a few months after LGC took effect, RA 7925 was enacted by
Congress. Said Act reiterated the exemption in RA 3259.
In 1993, QC, pursuant to its taxing power under 5, Article X of the Constitution, in
relation to 232 of the LGC enacted City Ordinance No. SP-91, S-93 otherwise
known as the QC Revenue Code (QCRC).
On January 1999, Bayantel wrote the office of the City Assessor seeking the
exclusion of its real properties in the city from the roll of taxable real properties.
This request was denied. Bayantel appealed to the Local Board of Assessment
Appeals.
Because Bayantel did not pay the real property tax assessed. Notices of
delinquency for the amount of P43,878,208.18, were sent by the QC Treasurer.
This was followed by the issuance of several warrants of levy against Bayantels
properties with the public auction scheduled on July 30, 2002.
Threatened with the imminent loss, Bayantel withdrew their appeal and instead
filed with the QC RTC a petition for prohibition with an urgent application for a
temporary restraining order.
Petitioners arguments:
Bayantel failed to avail itself of the administrative remedies provided for under
the LGC. The appeal mechanics constitute as Bayantels plain and speedy remedy
The language of 11 of RA 7633 is neither clear nor unequivocal. Bayantel was in
no time given any express exemption from the payment of real property tax.
Respondents arguments:
The appeal to the LBAA is not a speedy and adequate remedy.
Bayantel is only liable to pay the same taxes, as any other persons or
corporations on all its real or persona properties, exclusive of its franchise.
Note: RTC: owing to the phrase exclusive of the franchise found in 11 of RA 7633 =
exemption or properties used actually, directly and exclusively in the conduct of its
business under the franchise.
Issue/s:
1) Whether or not Bayantel is required to exhaust all administrative remedies before
seeking judicial relief with the trial court
2) Whether or not Bayantels real properties in QC are exempt from real property
taxes under its legislative franchise
Held/Ratio:
1) No. Petitions for prohibition are governed by the provision of Rule 65 of the Rules
of Court. In this case, with the reality that Bayantels real properties were already
levied upon on account of its non-payment of real estate taxes, the appeal to the
LBAA is not a speedy and adequate remedy within the context of 2 of Rule 65.

Moreover, Court held, citing Ty v. Trampe, one of the recognized exceptions to the
exhaustion of administrative remedies rule is when only legal issues are to be
resolved.
2) By virtue of 5, Art. X of the Constitution, LGUs are empowered to levy taxes and
pursuant to this power QC enacted the QCRC. However, such enactment does not
effectively withdraw the tax exemption enjoyed by Bayantel since the power of
LGUs to tax is limited.
PLDT v. City of Davao: The grant of taxing powers to local government units
under the Constitution and the LGC does not affect the power of Congress to
grant exemptions...
Aware that the LGC has already withdrawn Bayantels former exemption,
Congress opted to pass RA 7633 using exactly the same defining phrase
exclusive of this franchise which was the basis for Bayantels exemption prior to
the LGC. The Court views this subsequent legislation as an express and
real intention on the part of Congress to once again remove from the
LGCs delegated taxing power all of Bayantels properties that are
actually, directly exclusively used in the pursuit of its franchise
Digested by: Eins Balagtas