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LOCAL GOVERNMENT TAXATION the Local Government Code.

the Local Government Code. Such exception applies only if the beneficial use of real property
owned by the Republic is given to a taxable entity.
1. Mactan Cebu International Airport Authority (MCIAA) v. City of Lapu-Lapu, G.R. No.
181756, June 15, 2015 Finally, the Airport Lands and Buildings of MIAA are properties devoted to public use and thus are
FACTS: properties of public dominion. Properties of public dominion are owned by the State or the
Petitioner, Mactan-Cebu International Airport Authority (MCIAA) was created by Congress under Republic. As properties of public dominion owned by the Republic, there is no doubt whatsoever
Republic Act No. 6958. Upon its creation, petitioner enjoyed exemption from realty taxes imposed that the Airport Lands and Buildings are expressly exempt from real estate tax under Section
by the National Government or any of its political subdivision. However, upon the effectivity of 234(a) of the Local Government Code. This Court has also repeatedly ruled that properties
the LGC the Supreme Court rendered a decision that the petitioner is no longer exempt from realty of public dominion are not subject to execution or foreclosure sale.
estate taxes.
Petitioner’s properties that are actually, solely and exclusively used for public purpose, consisting
Respondent City issued to petitioner a Statement of Real Estate Tax assessing the lots comprising of the airport terminal building, airfield, runway, taxiway and the lots on which they are
the Mactan International Airport which included the airfield, runway, taxi way and the lots on situated, EXEMPT from real property tax imposed by the City of Lapu-Lapu.
which these are built. Petitioner contends that these lots, and the lots to which they are built, are
utilized solely and exclusively for public purposes and are exempt from real property Thus, all real property tax assessments are VOID, including the additional tax for the special
tax. Petitioner based its claim for exemption on DOJ Opinion No. 50. education fund and the penalty interest, as well as the final notices of real property tax
delinquencies, issued by the City of Lapu-Lapu on petitioner’s properties, except the assessment
Respondent issued notices of levy on 18 sets of real properties of petitioners. Petitioner filed a covering the portions that petitioner has leased to private parties. Likewise, the sale in public
petition for Prohibition, TRO, and a writ of preliminary injunction with RTC Lapulapu which sought auction of 27 of petitioner’s properties and the eventual forfeiture and purchase of the said
to enjoin respondent City from issuing the warrant of levy against petitioner’s properties from properties by respondent City of Lapu-Lapu is null and void as well as the corresponding
selling them at public auction for delinquency in realty tax obligations. Certificates of Sale of Delinquent Property issued to respondent City of Lapu-Lapu.

ISSUE:
Petitioner claimed before the RTC that it had discovered that respondent City did not pass any 2. Smart Communications, Inc. v. Municipality of Malvar, Batangas, G.R. No. 20442.
ordinance authorizing the collection of real property tax, a tax for the special education fund (SEF), February 18, 2014
and a penalty interest for its nonpayment. Petitioner argued that without the corresponding tax FACTS:
ordinances, respondent City could not impose and collect real property tax, an additional tax for Smart constructed a telecommunications tower within the territorial jurisdiction of the Municipality.
the SEF, and penalty interest from petitioner. The construction of the tower was for the purpose of receiving and transmitting cellular
communications within the covered area.
RTC granted the writ of preliminary which was later on lifted upon motion by the respondents.
On 30 July 2003, the Municipality passed Ordinance No. 18, series of 2003, entitled "An Ordinance
CA: Court of Appeals held that petitioner’s airport terminal building, airfield, runway, taxiway, Regulating the Establishment of Special Projects."
and the lots on which they are situated are not exempt from real estate tax reasoning as follows:
Under the Local Government Code (LGC for brevity), enacted pursuant to the constitutional On 24 August 2004, Smart received from the Permit and Licensing Division of the Office of the
mandate of local autonomy, all natural and juridical persons, including government-owned or Mayor of the Municipality an assessment letter with a schedule of payment for the total amount
controlled corporations (GOCCs), instrumentalities and agencies, are no longer exempt from local of P389,950.00 for Smart's telecommunications tower. Due to the alleged arrears in the payment
taxes even if previously granted an exemption. The only exemptions from local taxes are those of the assessment, the Municipality also caused the posting of a closure notice on the
specifically provided under the Code itself, or those enacted through subsequent legislation. telecommunications tower.

RULING: On 9 September 2004, Smart filed a protest, claiming lack of due process in the issuance of the
MIAA is not a government-owned or controlled corporation under Section 2(13) of the assessment and closure notice. In the same protest, Smart challenged the validity of Ordinance
Introductory Provisions of the Administrative Code because it is not organized as a stock or non- No. 18 on which the assessment was based. On 17 November 2004, Smart filed with RTC of
stock corporation. Neither is MIAA a government-owned or controlled corporation under Section Batangas, an "Appeal/Petition" assailing the validity of Ordinance No. 18.
16, Article XII of the 1987 Constitution because MIAA is not required to meet the test of economic
viability. ISSUES:
1. Whether the CTA has jurisdiction over the present case
MIAA is a government instrumentality vested with corporate powers and performing essential 2. Whether the imposition of the fees in Ordinance No. 18 is ultra vires
public services pursuant to Section 2(10) of the Introductory Provisions of the Administrative
Code. As a government instrumentality, MIAA is not subject to any kind of tax by local RULING:
governments under Section 133(o) of the Local Government Code. The exception to the On whether the CTA has jurisdiction over the present case
exemption in Section 234(a) does not apply to MIAA because MIAA is not a taxable entity under

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Smart contends that the CTA erred in dismissing the case for lack of jurisdiction. Smart maintains the taxes, fees, or charges shall not be unjust, excessive, oppressive, confiscatory or contrary to
that the CTA has jurisdiction over the present case considering the "unique" factual circumstances declared national policy: Provided, further; That the ordinance levying such taxes, fees or charges
involved. The CTA refuses to take cognizance of this case since it challenges the constitutionality shall not be enacted without any prior public hearing conducted for the purpose.
of Ordinance No. 18, which is outside the province of the CTA.
Smart further argues that the Municipality is encroaching on the regulatory powers of the National
Jurisdiction is conferred by law. Republic Act No. 1125, as amended by Republic Act No. 9282, Telecommunications Commission (NTC). To repeat, Ordinance No. 18 aims to regulate the
created the Court of Tax Appeals. Section 7, paragraph (a), sub-paragraph (3) 15 of the law "placing, stringing, attaching, installing, repair and construction of all gas mains, electric, telegraph
vests the CTA with the exclusive appellate jurisdiction over "decisions, orders or and telephone wires, conduits, meters and other apparatus" within the Municipality. The fees are
resolutions of the Regional Trial Courts in local tax cases originally decided or resolved not imposed to regulate the administrative, technical, financial, or marketing operations of
by them in the exercise of their original or appellate jurisdiction." telecommunications entities, such as Smart's; rather, to regulate the installation and maintenance
of physical structures — Smart's cell sites or telecommunications tower. The regulation of the
The question now is whether the trial court resolved a local tax case in order to fall within the installation and maintenance of such physical structures is an exercise of the police
ambit of the CTA's appellate jurisdiction. This question, in turn, depends ultimately on whether power of the Municipality. Clearly, the Municipality does not encroach on NTC's
the fees imposed under Ordinance No. 18 are in fact taxes. regulatory powers.

The fees imposed in Ordinance No. 18 are not taxes. The Court likewise rejects Smart's contention that the power to fix the fees for the issuance of
development permits and locational clearances is exercised by the Housing and Land Use
Since the main purpose of Ordinance No. 18 is to regulate certain construction activities of the Regulatory Board (HLURB). Suffice it to state that the HLURB itself recognizes the local
identified special projects, which included "cell sites" or telecommunications towers, the fees government units' power to collect fees related to land use and development.
imposed in Ordinance No. 18 are primarily regulatory in nature, and not primarily revenue-raising.
While the fees may contribute to the revenues of the Municipality, this effect is merely incidental.
In Progressive Development Corporation v. Quezon City, the Court declared that "if the
generating of revenue is the primary purpose and regulation is merely incidental, the
imposition is a tax; but if regulation is the primary purpose, the fact that incidentally 3. The City of Manila, etc. et al. v. Hon. Caridad H. Grecia-Cuerdo etc., et al, G.R. No.
revenue is also obtained does not make the imposition a tax." 175723. February 4, 2014.
FACTS:
In Victorias Milling Co., Inc. v. Municipality of Victorias, the Court reiterated that the purpose and
effect of the imposition determine whether it is a tax or a fee, and that the lack of any standards Petitioner City of Manila, through its treasurer, petitioner Liberty Toledo, assessed taxes for the
for such imposition gives the presumption that the same is a tax. taxable period from January to December 2002 against private. respondents. In addition to the
taxes purportedly due from private respondents, pursuant to Sections 14, 15, 16, 17 of the
Contrary to Smart's contention, Ordinance No. 18 expressly provides for the standards which Revised Revenue Code of Manila (RRCM), said assessment covered the local business taxes
Smart must satisfy prior to the issuance of the specified permits, clearly indicating that the fees petitioners were authorized to collect under Section 21 of the same Code. Because payment of
are regulatory in nature. the taxes assessed was a precondition for the issuance of their business permits, private
respondents were constrained to pay the P19,316,458.77 assessment under protest.
On whether the imposition of the fees in Ordinance No. 18 is ultra vires
On January 24, 2004, private respondents filed with the RTC of Pasay City the complaint
Smart argues that the Municipality exceeded its power to impose taxes and fees as provided in denominated as one for "Refund or Recovery of Illegally and/or Erroneously-Collected
Book II, Title One, Chapter 2, Article II of the LGC. Smart maintains that the mayor's permit fees Local Business Tax, Prohibition with Prayer to Issue TRO and Writ of Preliminary
in Ordinance No. 18 (equivalent to 1% of the project cost) are not among those expressly Injunction" which was docketed as Civil Case No. 040019-CFM before public respondent's sala.
enumerated in the LGC. In the amended complaint, private respondents alleged that the provisions of the RRCM were
violative of the limitations and guidelines under Section 143 (h) of Republic Act No. 7160 [Local
As discussed, the fees in Ordinance No. 18 are not taxes. Logically, the imposition does not appear Government Code] on double taxation. They further averred that petitioner city's Ordinance No.
in the enumeration of taxes under Section 143 of the LGC. Moreover, even if the fees do not 8011 which amended pertinent portions of the RRCM had already been declared to be illegal and
appear in Section 143 or any other provision in the LGC, the Municipality is empowered to impose unconstitutional by the Department of Justice.
taxes, fees and charges, not specifically enumerated in the LGC or taxed under the Tax Code or
other applicable law. Section 186 of the LGC, granting local government units wide RTC granted private respondent’s application for a writ of preliminary injunction and denied the
latitude in imposing fees, expressly provides: latter’s Motion for Reconsideration. CA dismissed petitioners' petition for certiorari holding that
it has no jurisdiction over the said petition. The CA ruled that since appellate jurisdiction over
Section 186. Power to Levy Other Taxes, Fees or Charges. — Local government units private respondents' complaint for tax refund, which was filed with the RTC, is vested in the Court
may exercise the power to levy taxes, fees or charges on any base or subject not of Tax Appeals (CTA), pursuant to its expanded jurisdiction under Republic Act No. 9282 (RA
otherwise specifically enumerated herein or taxed under the provisions of the 9282), it follows that a petition for certiorari seeking nullification of an interlocutory order issued
National Internal Revenue Code, as amended, or other applicable laws: Provided, That

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in the said case should, likewise, be filed with the CTA. Ca likewise denied petitioner’s Motion for with the ruling of the CA that since appellate jurisdiction over private respondents'
Reconsideration. complaint for tax refund is vested in the CTA, it follows that a petition for certiorari
seeking nullification of an interlocutory order issued in the said case should, likewise,
ISSUE: be filed with the same court. To rule otherwise would lead to an absurd situation where one
court decides an appeal in the main case while another court rules on an incident in the very same
Whether or not the CTA has jurisdiction over a special civil action for certiorari assailing an case.
interlocutory order issued by the RTC in a local tax case.
FALLO: Petition is DENIED.
HELD:
Take Note:
YES.
1. The case was moot and academic. Court discovered that a Decision in the main case had
On March 30, 2004, the Legislature passed into law Republic Act No. 9282 (RA 9282) amending already been rendered by the RTC on August 13, 2007 which ordered the defendant to grant tax
RA 1125 by expanding the jurisdiction of the CTA, enlarging its membership and elevating its rank refund or credit and enjoined it from collecting taxes under Sec. 21 of the RRCM. The decision
to the level of a collegiate court with special jurisdiction. Pertinent portions of the amendatory act was already final and executory. Nevertheless, the Court found it necessary to resolve the issue
provides thus: on jurisdiction.

Sec. 7. Jurisdiction — The CTA shall exercise: 2. Petitioners availed of the wrong remedy when they filed the instant special civil action for
certiorari under Rule 65 of the Rules of Court in assailing the Resolutions of the CA which dismissed
a. Exclusive appellate jurisdiction to review by appeal, as herein provided: their petition filed with the said court and their motion for reconsideration of such dismissal. The
Xxx assailed Resolutions of the CA are in the nature of a final order as they disposed of the petition
3. Decisions, orders or resolutions of the Regional Trial Courts in local tax cases completely. It is settled that in cases where an assailed judgment or order is considered final, the
originally decided or resolved by them in the exercise of their original or jurisdiction; remedy of the aggrieved party is appeal. Hence, in the instant case, petitioner should have
Xxx filed a petition for review on certiorari under Rule 45, which is a continuation of the
appellate process over the original case.
The prevailing doctrine is that the authority to issue writs of certiorari involves the exercise of
original jurisdiction which must be expressly conferred by the Constitution or by law and cannot Considering that the present petition was filed within the 15-day reglementary period
be implied from the mere existence of appellate jurisdiction. While there is no express grant of for filing a petition for review on certiorari under Rule 45, that an error of judgment is averred,
such power, with respect to the CTA, Section 1, Article VIII of the 1987 Constitution provides, and because of the significance of the issue on jurisdiction, the Court deems it proper and justified
nonetheless, that judicial power shall be vested in one Supreme Court and in such lower courts to relax the rules and, thus, treat the instant petition for certiorari as a petition for review on
as may be established by law and that judicial power includes the duty of the courts of justice to certiorari.
settle actual controversies involving rights which are legally demandable and enforceable, and to
determine whether or not there has been a grave abuse of discretion amounting to lack or excess
of jurisdiction on the part of any branch or instrumentality of the Government.
4. Coca-Cola Bottlers Philippines, Inc. vs. City of Manila et. al., G.R. No. 197561, April 7,
Indeed, in order for any appellate court, to effectively exercise its appellate 2014.
jurisdiction, it must have the authority to issue, among others, a writ of certiorari. In
transferring exclusive jurisdiction over appealed tax cases to the CTA, it can FACTS:
reasonably be assumed that the law intended to transfer also such power as is deemed This case started when the RTC granted petitioner’s request for tax refund or credit assessed under Section
necessary, if not indispensable, in aid of such appellate jurisdiction. This Court has held 21 of the Revenue Code of Manila upon finding that there was double taxation in the imposition of local
as early as the case of JM Tuason v Jaramillo et al that "if a case may be appealed to a business taxes. Thereafter, respondent is prohibited from collecting the tax under Section 21 of the
particular court or judicial tribunal or body, then said court or judicial tribunal or body Revenue Code.
has jurisdiction to issue the extraordinary writ of certiorari, in aid of its appellate
jurisdiction." This principle was affirmed in De Jesus v CA where the Court stated that "a court After the judgment has become final and executor, petitioner filed a writ of execution in the RTC. Aggrieved,
may issue a writ of certiorari in aid of its appellate jurisdiction if said court has respondent filed a motion to quash the writ of execution on the ground that it will hamper the city’s ongoing
jurisdiction to review, by appeal or writ of error, the final orders or decisions of the projects.
lower court."
Petitioner reasons that both tax refund and tax credit involve public funds. Thus, pursuant to SC
If this Court were to sustain petitioners' contention that jurisdiction over their certiorari petition Administrative Circular No. 10-2000, the enforcement or satisfaction of the assailed decision may still be
lies with the CA, this Court would be confirming the exercise by two judicial bodies, the CA and pursued in accordance with the rules and procedures laid down in Presidential Decree (P.D.) No. 1445,
the CTA, of jurisdiction over basically the same subject matter — precisely the split-jurisdiction otherwise known as the Government Auditing Code of the Philippines.
situation which is anathema to the orderly administration of justice. Thus, the Court agrees

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ISSUE:
Whether it is proper for the RTC to order the writ of execution for tax refund or credit under Section 21 of The controversy started when the City Treasurer of Manila addressed a letter dated September
the Revenue Code? 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, broken down
as follows: (a) PhP 54,826,599.37 for the Katigbak property; and (b) PhP 48,498,917.01 for the
RULING: Concepcion-Arroceros property. The letter warned of the inclusion of the subject properties in the
There is no need for a writ of execution. scheduled October 30, 2002 public auction of all delinquent properties in Manila should the unpaid
taxes remain unsettled before that date.
Tax refund / credit does not involve levying or garnishment of public funds
On September 16, 2002, the City Treasurer of Manila issued separate Notices of Realty Tax
Under the first option (tax refund), any tax on income that is paid in excess of the amount due the Delinquency for the subject properties, with the usual warning of seizure and/or sale. On October
government may be refunded, provided that a taxpayer properly applies for the refund. On the other hand, 8, 2002, GSIS, through its legal counsel, wrote back emphasizing the GSIS exemption from all
the second option works by applying the refundable amount against the tax liabilities of the petitioner in kinds of taxes, including realty taxes, under Republic Act No. (RA) 8291.
the succeeding taxable years.
ISSUES:
Hence, instead of moving for the issuance of a writ of execution relative to the aforesaid Decision, petitioner 1. W/N GSIS under its charter is exempt from real property taxation.
should have merely requested for the approval of the City of Manila in implementing the tax refund or tax 2. Assuming that it is so exempt, W/N GSIS is liable for real property taxes for its properties leased
credit, whichever is appropriate. In other words, no writ was necessary to cause the execution thereof, to a taxable entity; and
since the implementation of the tax refund will effectively be a return of funds by the City of Manila in favor 3. W/N the properties of GSIS are exempt from levy.
of petitioner while a tax credit will merely serve as a deduction of petitioner’s tax liabilities in the future.
RULING:
In fact, Section 252 (c) of the Local Government Code of the Philippines is very clear that "In the event 1. GSIS is exempt from Real Property Tax.
that the protest is finally decided in favor of the taxpayer, the amount or portion of the tax protested shall
be refunded to the protestant, or applied as tax credit against his existing or future tax liability." It was not First, full tax exemption is granted to GSIS through PD 1146. However, RA 7160 lifted GSIS tax
necessary for petitioner to move for the issuance of the writ of execution because the remedy has already exemption from real properties. Lastly, full tax exemption is reenacted to GSIS through RA 8291.
been provided by law. Indeed, almost 20 years to the day after the issuance of the GSIS charter, i.e., PD 1146, it was
further amended and expanded by RA 8291 which took effect on June 24, 1997. Under it, the full
Thus, under Administrative Order No. 270 prescribing rules and regulations implementing the Local tax exemption privilege of GSIS was restored, the operative provision being Sec. 39 thereof, a
Government Code, particularly Article 286 thereof, the tax credit granted a taxpayer shall be applied to virtual replication of Sec. 33 of PD 1146.
future tax obligations of the same taxpayer for the same business, to wit:
Moreover, the real property taxes assessed and due from GSIS is considered paid already. While
ARTICLE 286. Claim for Refund or Tax Credit. — All taxpayers entitled to a refund or tax credit provided in recognizing the exempt status of GSIS owing to the reenactment of the full tax exemption clause
this Rule shall file with the local treasurer a claim in writing duly supported by evidence of payment (e.g., under Sec. 39 of RA 8291 in 1997, the ponencia in City of Davao appeared to have failed to take
official receipts, tax clearance, and such other proof evidencing overpayment)within two (2) years from stock of and fully appreciate the all-embracing condoning proviso in the very same Sec. 39 which,
payment of the tax, fee, or charge. No case or proceeding shall be entertained in any court without this for all intents and purposes, considered as paid any assessment against the GSIS as of the
claim in writing, and after the expiration of two (2) years from the date of payment of such tax, fee, or approval of this Act.
charge, or from the date the taxpayer is entitled to a refund or tax credit.
2. GSIS is liable for real property taxes for its properties leased to a taxable entity under Beneficial
Use Doctrine.

The leased Katigbak property shall be taxable pursuant to the beneficial use principle under Sec.
234(a) of the LGC.

It is true that said Sec. 234(a), quoted below, exempts from real estate taxes real property owned
5. Government Service Insurance System vs. City Treasurer and City Assessor of the City by the Republic, unless the beneficial use of the property is, for consideration, transferred to a
of Manila, G.R. No. 186242, December 23, 2009. taxable person.

FACTS: SEC. 234. Exemptions from Real Property Tax. The following are exempted from payment of the
Petitioner GSIS owns or used to own two (2) parcels of land, one located at Katigbak 25th St., real property tax:
Bonifacio Drive, Manila (Katigbak property), and the other, at Concepcion cor. Arroceros Sts., also
in Manila (Concepcion-Arroceros property). Both the GSIS and the Metropolitan Trial Court (MeTC)
of Manila occupy the Concepcion-Arroceros property, while the Katigbak property was under lease.

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(a) Real property owned by the Republic of the Philippines or any of its political subdivisions On 25 June 2004, Daza filed her comment contending that the change in the administration in
EXCEPT when the BENEFICIAL USE thereof has been granted, for consideration or otherwise, to the then Municipality of Taguig brought about the assessment and imposition of the correct
a taxable person. business tax on TPC. Not being an exporter of the essential commodities enumerated under the
provisions in question, it was argued that TPC is not entitled to the fifty (50%) percent business
Hence, taxable entity having beneficial use of leased property is liable for real property taxes
thereon. tax exemption it had been granted in the previous years. Having supposedly denied the letter-
protest thru Atty. Miranda, Daza likewise faulted TPC for not filing its appeal in court within thirty
3. The properties of GSIS are exempt from levy. (30) days from receipt of the denial in accordance with Article 195 of the Local Government Code

In light of the foregoing disquisition, the issue of the propriety of the threatened levy of subject RTC went on to render the herein assailed Order dated 5 April 2005, dismissing the
properties by the City of Manila to answer for the demanded realty tax deficiency is now moot petition for lack of merit. While finding that the absence of proof of Atty. Miranda's denial of
and academic. A valid tax levy presupposes a corresponding tax liability. Nonetheless, it will not
TPC's letter-protest meant that the latter had thirty (30) days from the lapse of the sixty (60) days
be remiss to note that it is without doubt that the subject GSIS properties are exempt from any
attachment, garnishment, execution, levy, or other legal processes. prescribed under Article 195 of the Local Government Code within which to perfect its appeal, the
RTC ruled that, rather than the special civil action of certiorari provided under Rule 65
WHEREFORE, the instant petition is hereby GRANTED. The November 15, 2007 Decision and of the 1997 Rules of Civil Procedure, an ordinary appeal would have been the proper
January 7, 2009 Order of the Regional Trial Court, Branch 49, Manila are REVERSED and SET remedy from the assessment complained against.
ASIDE. Accordingly, the real property tax assessments issued by the City of Manila to the
Government Service Insurance System on the subject properties are declared VOID, except that Without moving for the reconsideration, TPC filed the petition at bench on 28 April 2005, on pure
the real property tax assessment pertaining to the leased Katigbak property shall be valid if served
questions of law.
on the Manila Hotel Corporation, as lessee which has actual and beneficial use thereof. The City
of Manila is permanently restrained from levying on or selling at public auction the subject
properties to satisfy the payment of the real property tax delinquency.
ISSUE:
6. Team Pacific Corporation vs. Daza as Municipal Treasurer of Taguig, G.R. No. 167732, Whether or not a Rule 65 petition for certiorari was the appropriate remedy from Daza's inaction
July 11, 2012. on TPC's letter-protest

FACTS:
Petitioner Team Pacific Corporation (TPC) is a domestic corporation engaged in the business of
RULING:
assembling and exporting semiconductor devices. TPC conducts its business in the then
Court found that TPC erroneously availed of the wrong remedy in filing a Rule 65 petition
Municipality of Taguig. Since the start of its operations, TPC had been paying local business taxes
for certiorari to question Daza's inaction on its letter-protest.
assessed at one-half (1/2) rate pursuant to Section 75 (c) of Ordinance No. 24-93, otherwise
known as the Taguig Revenue Code.
Certiorari is available only if the following essential requisites concur: (1) it must be directed
against a tribunal, board, or officer exercising judicial or quasi-judicial functions; (2) the tribunal,
When it renewed its business license in 2004, however, TPC's business tax for the first quarter of
board, or officer must have acted without or in excess of jurisdiction or with grave abuse of
the same year was assessed in the sum of P208,109.77 by respondent Josephine Daza. The
discretion amounting to lack or excess of jurisdiction; and, (3) there is no appeal nor any plain,
assessment was computed by Daza by applying the full value of the rates provided under Section
speedy, and adequate remedy in the ordinary course of law
75 of the Taguig Revenue Code, instead of the one-half (1/2) rate provided under paragraph (c)
of the same provision.
Daza cannot be said to be performing a judicial1 or quasi-judicial function2 in assessing TPC's
business tax and/or effectively denying its protest as then Municipal Treasurer of Taguig. For this
On 19 January 2004, TPC filed a written protest with Daza, insisting on the one-half (1/2) rate on
reason, Daza's actions are not the proper subjects of a Rule 65 petition
which its business tax was previously assessed
for certiorari which is the appropriate remedy in cases where the tribunal, board, or
officer exercising judicial or quasi-judicial functions acted without or in grave abuse
Subsequent to its 13 April 2004 demand for the refund and/or issuance of a tax credit, TPC filed
of discretion amounting to lack or excess of jurisdiction and there is no appeal or any
its 15 April 2004 Rule 65 petition for certiorari before the RTC
plain, speedy, and adequate remedy in law. Narrow in scope and inflexible in

1 2
Quasi-judicial function, on the other hand, refers to the action and discretion of public administrative officers or bodies, which
Judicial function entails the power to determine what the law is and what the legal rights of the parties are, and then undertakes
to determine these questions and adjudicate upon the rights of the parties are required to investigate facts or ascertain the existence of facts, hold hearings, and draw conclusions from them as a basis for
their official action and to exercise discretion of a judicial nature
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character, certiorari is an extraordinary remedy designed for the correction of errors of jurisdiction it is clear that a GOCC must be "organized as a stock or non-stock corporation" while an
and not errors of judgment. It is likewise considered mutually exclusive with appeal like the one instrumentality is vested by law with corporate powers. Likewise, when the law makes a
provided by Article 195 of the Local Government Code for a local treasurer's denial of or inaction government instrumentality operationally autonomous, the instrumentality remains part of the
National Government machinery although not integrated with the department framework. When
on a protest
the law vests in a government instrumentality corporate powers, the instrumentality does not
necessarily become a corporation. Unless the government instrumentality is organized as a stock
Granted that a Rule 45 petition for review oncertiorari is the proper mode of appeal when the or non-stock corporation, it remains a government instrumentality exercising not only
issues raised are purely questions of law, TPC lost sight of the fact that, as amended by RA governmental but also corporate powers.
No. 9282, paragraph c (2) [a], Section 7 of RA No. 1125 has vested the Court of Tax
Appeals (CTA) with the exclusive appellate jurisdiction over, among others, appeals Two requisites must concur before one may be classified as a stock corporation, namely: (1) that
from the judgments, resolutions or orders of the RTC in tax collection cases originally it has capital stock divided into shares; and (2) that it is authorized to distribute dividends and
allotments of surplus and profits to its stockholders. If only one requisite is present, it cannot be
decided by them in their respective territorial jurisdiction. As amended by Section 9 of RA
properly classified as a stock corporation. As for non-stock corporations, they must have members
No. 9282, Section 11 of RA No. 1125 likewise requires that the appeal be perfected within thirty and must not distribute any part of their income to said members.
(30) days after receipt of the decision and shall be made by filing a petition for review under a
procedure analogous to that provided for under Rule 42 of the 1997 Rules of Civil Procedure. In the case at bench, PRA is not a GOCC because it is neither a stock nor a non-stock corporation.
It cannot be considered as a stock corporation because although it has a capital stock divided into
TPC's erroneous availment of the wrong mode of appeal and direct resort to this Court instead of no par value shares as provided in Section 7 of P.D. No. 1084, it is not authorized to distribute
the CTA both warrant the dismissal of the petition at bench. The rule is settled that the perfection dividends, surplus allotments or profits to stockholders. There is no provision whatsoever in P.D.
No. 1084 or in any of the subsequent executive issuances pertaining to PRA, particularly, E.O. No.
of an appeal in the manner and within the period fixed by law is not only mandatory but
525, 5 E.O. No. 654 6 and EO No. 798 that authorizes PRA to distribute dividends, surplus
jurisdictional and non-compliance with these legal requirements is fatal to a party's cause. allotments or profits to its stockholders. PRA cannot be considered a non-stock corporation either
because it does not have members. A non-stock corporation must have members. Moreover, it
7. Republic of the Philippines represented by the Philippine Reclamation Authority vs. was not organized for any of the purposes mentioned in Section 88 of the Corporation Code.
City of Paranaque, G.R. No. 191109, July 18, 2012. Specifically, it was created to manage all government reclamation projects.

FACTS: Clearly, respondent has no valid or legal basis in taxing the subject reclaimed lands managed by
PRA reclaimed several portions of the foreshore and offshore areas of Manila Bay, including those PRA. On the other hand, Section 234 (a) of the LGC,in relation to its Section 133 (o), exempts
located in Parañaque City. On February 19, 2003, then Parañaque City Treasurer Liberato M. PRA from paying realty taxes and protects it from the taxing powers of local government units. It
Carabeo (Carabeo) issued Warrants of Levy on PRA's reclaimed properties (Central Business Park is clear from Section 234 that real property owned by the Republic of the Philippines (the Republic)
andBarangay San Dionisio) located in Parañaque City based on the assessment for delinquent real is exempt from real property tax unless the beneficial use thereof has been granted to a taxable
property taxes made by then Parañaque City Assessor Soledad Medina Cue for tax years 2001 person. In this case, there is no proof that PRA granted the beneficial use of the subject reclaimed
and 2002. RTC issued an order denying PRA's petition for the issuance of a temporary restraining lands to a taxable entity. There is no showing on record either that PRA leased the subject
order. PRA sent a letter to Carabeo requesting the latter not to proceed with the public auction of reclaimed properties to a private taxable entity. This exemption should be read in relation to
the subject reclaimed properties on April 7, 2003. In response, Carabeo sent a letter stating that Section 133 (o) of the same Code, which prohibits local governments from imposing "[t]axes, fees
the public auction could not be deferred because the RTC had already denied PRA's TRO or charges of any kind on the National Government, its agencies and instrumentalities . . . ." The
application. RTC rendered its decision dismissing PRA's petition. In ruling that PRA was not exempt Administrative Code allows real property owned by the Republic to be titled in the name of
from payment of real property taxes, the RTC reasoned out that it was a GOCC under Section 3 agencies or instrumentalities of the national government. Such real properties remain owned by
of P.D. No. 1084. It was organized as a stock corporation because it had an authorized capital the Republic and continue to be exempt from real estate tax. Indeed, the Republic grants the
stock divided into no par value shares. In fact, PRA admitted its corporate personality and that beneficial use of its real property to an agency or instrumentality of the national government. This
said properties were registered in its name as shown by the certificates of title. Therefore, as a happens when the title of the real property is transferred to an agency or instrumentality even as
GOCC, local tax exemption is withdrawn by virtue of Section 193 of Republic Act (R.A.) No. 7160 the Republic remains the owner of the real property. Such arrangement does not result in the loss
[Local Government Code (LGC)] which was the prevailing law in 2001 and 2002 with respect to of the tax exemption, unless "the beneficial use thereof has been granted, for consideration or
real property taxation. The RTC also ruled that the tax exemption claimed by PRA under E.O. No. otherwise, to a taxable person."
654 had already been expressly repealed by R.A. No. 7160 and that PRA failed to comply with the
procedural requirements in Section 206 thereof. The Court agrees with PRA that the subject reclaimed lands are still part of the public domain,
owned by the State and, therefore, exempt from payment of real estate taxes.
ISSUE:
WON PRA is exempt from payment of real property tax

RULING: 8. Sta. Lucia Realty & Development, Inc. vs. City of Pasig, G.R. No. 166838, June 15,
2011.

6
FACTS: Certificates of Title as Conclusive Evidence of Location for levying taxes on a property that was
Petitioner Sta. Lucia Realty & Development, Inc. (Sta. Lucia) is the registered owner of several outside its territorial jurisdiction: The failure of the city officials of Tagaytay to verify if the property
parcels of land with Transfer Certificates of Title (TCT) Nos. 39112, 39110 and 38457, all of which is within its jurisdiction before levying taxes on the same constitutes gross negligence
indicated that the lots were located in Barrio Tatlong Kawayan, Municipality of Pasig (Pasig).
It would be unfair to hold Sta. Lucia liable again for real property taxes it already paid simply
The parcel of land covered by TCT No. 39112 was consolidated with that covered by TCT No. because Pasig cannot wait for its boundary dispute with Cainta to be decided.
518403, which was situated in Barrio Tatlong Kawayan, Municipality of Cainta, Province of Rizal
(Cainta). The two combined lots were subsequently partitioned into three, for which TCT Nos.
532250, 598424, and 599131, now all bearing the Cainta address, were issued. Pasig RTC should have held in abeyance the proceedings in Civil Case No. 65420, in view of the
fact that the outcome of the boundary dispute case before the Antipolo RTC will undeniably affect
On November 28, 1995, Pasig filed a Complaint, docketed as Civil Case No. 65420, against Sta. both Pasig's and Cainta's rights. In fact, the only reason Pasig had to file a tax collection case
Lucia for the collection of real estate taxes, including penalties and interests, on the lots covered against Sta. Lucia was not that Sta. Lucia refused to pay, but that Sta. Lucia had already paid,
by TCT Nos. 532250, 598424, 599131, 92869, 92870 and 38457, including the improvements albeit to another local government unit.
thereon (the subject properties).
In the meantime, to avoid further animosity, Sta. Lucia is directed to deposit the succeeding real
Sta. Lucia, in its Answer, alleged that it had been religiously paying its real estate taxes to Cainta, property taxes due on the subject properties, in an escrow account with the Land Bank of the
just like what its predecessors-in-interest did, by virtue of the demands and assessments made Philippines
and the Tax Declarations issued by Cainta on the claim that the subject properties were within its
territorial jurisdiction. Sta. Lucia further argued that since 1913, the real estate taxes for the lots
covered by the above TCTs had been paid to Cainta. 9. Republic of the Philippines (Department of Transportation and Communications) vs
City of Mandaluyong, G.R. No. 184879, February 23, 2011.
Decision to include the realty taxes due on the improvements on the subject lots:
FACTS:
ISSUE: Republic, represented by DOTC entered into a Revised & restated Agreement to Build, Lease &
1) Whether the RTC and the CA were correct in deciding Pasig's Complaint without waiting for Transfer a Light Rail System for EDSA with Metro Rail, a foreign corporation. Under the BLT
the resolution of the boundary dispute case between Pasig and Cainta; and Agreement, Metro Rail is responsible for the design, construction, equipping, completion, testing
2) Whether Sta. Lucia should continue paying its real property taxes to Cainta, as it alleged to & commissioning of EDSA MRT III. DOTC shall operate the same but ownership remains with
have always done, or to Pasig, as the location stated in Sta. Lucia's TCTs. Metro Rail during the Revenue & Construction periods, and at the end of such period, Metro Rail
shall transfer to DOTC its title & all of its rights & interests therein. Metro Rail then assigned all
RULING: its rights and obligations to MRTC, a domestic corporation. Metro Rail turned over the EDSA MRT
The Local Government Unit entitled to Collect Real Property Taxes III System to DOTC for operation.
Under Presidential Decree No. 464 or the "Real Property Tax Code," the authority to collect real Office of City Assessor of Mandaluyong issued a tax Declaration in the name of MRTC and
property taxes is vested in the locality where the property is situated subsequently demanded payment of real property taxes under such tax declaration. Thereafter,
a Notice of Delinquency was sent to MRTC for deficiency of real property tax. City treasurer issued
This requisite was reiterated in Republic Act No. 7160, also known as the 1991 the Local & served a Warrant of Levy upon MRTC with Notices of Levy upon City Assessor & Registrar of
Government Code Deeds of Mandaluyong.
Republic filed a case for Declaration of Nullity of Real Property Tax Assessment & Warrant of Levy
The only import of these provisions is that, while a local government unit is authorized under with TRO alleging that since Metro Rail had transferred to DOTC the actual use, and operation of
several laws to collect real estate tax on properties falling under its territorial jurisdiction, it is EDSA MRT III System, MRTC doesn’t have actual use & possession as to subject it to payment of
imperative to first show that these properties are unquestionably within its geographical real estate taxes. And notwithstanding the transfer, Republic isn’t liable because local gov’t units
boundaries. are legally proscribed from imposing taxes of any kind on it and that Republic is exempted from
payment of RPT.
The importance of drawing with precise strokes the territorial boundaries of a local unit of RTC denied applications for TRO and consequently, public auction was held. Real properties were
government cannot be overemphasized. The boundaries must be clear for they define the limits forfeited in favor of Mandaluyong City.
of the territorial jurisdiction of a local government unit. It can legitimately exercise powers of Respondent filed an ex parte petition for issuance of writ of possession which was granted by the
government only within the limits of its territorial jurisdiction. Beyond these limits, its acts are RTC. MRTC appealed this decision to the CA and Republic filed this instant case. Petitioner claimed
ultra vires. that since EDSA MRT properties are beneficially owned by DOTC, it should not have been assessed
for payment of RPT, being a governmental entity, it is exempt from payment of RPT and therefore,
Clearly therefore, the local government unit entitled to collect real property taxes from Sta. Lucia no tax delinquency exist authorizing respondent to sell the properties through public auction.
must undoubtedly show that the subject properties are situated within its territorial jurisdiction;
otherwise, it would be acting beyond the powers vested to it by law. ISSUE:

7
WON RTC erred in issuing writ of possession. (f) All general and special laws, acts, city charter, decrees, executive orders, proclamations and
administrative regulations, part or parts thereof which are inconsistent with any of the provisions
RULING: of the Code are hereby repealed or modified accordingly.
This case is between local government’s power to tax and national government’s privilege of tax
exemption. A writ of possession is a mere incident in the transfer of title. In this case, it stemmed The foregoing partakes of the nature of a general repealing provision. It is a basic rule of statutory
from exercise of alleged ownership by respondent over EDSA MRMT III properties by virtue of tax construction that repeals by implication are not favored. An implied repeal will not be allowed
delinquency sale. unless it is convincingly and unambiguously demonstrated that the two laws are so clearly
The issue WON action sale should be enjoined is still pending before the CA. pending repugnant and patently inconsistent that they cannot co-exist. This is based on the rationale that
determination, it is premature for respondent to have conducted the auction sale & caused the the will of the legislature cannot be overturned by the judicial function of construction and
transfer of title over the real properties to its name. Denial by RTC to issue an injunction/TRO interpretation. Courts cannot take the place of Congress in repealing statutes. Their function is to
doesn’t automatically give respondent the liberty to proceed with actions sought to be enjoined. try to harmonize, as much as possible, seeming conflicts in the laws and resolve doubts in favor
It is premature for RTX to issue a writ of possession where ownership of subject properties is of their validity and co-existence.
derived from the auction sale, the validity of which is still being threshed out in the CA. RTC
should’ve held in abeyance the issuance of a writ of possession. […]
The writ issued is premature and has no force and effect.
In the same vein, but in different words, this Court ruled in Gordon vs. Veridiano :

Courts of justice, when confronted with apparently conflicting statutes, should endeavor to
10. Alejandro Ty v. Hon. Trampe,et al., G.R. No. 117577, December 1, 1995 reconcile the same instead of declaring outright the invalidity of one as against the other. Such
alacrity should be avoided. The wise policy is for the judge to harmonize them if this is possible,
FACTS: bearing in mind that they are equally the handiwork of the same legislature, and so give effect to
Petitioner questioned the validity of the notice of assessment respecting certain real properties both while at the same time also according due respect to a coordinate department of the
owned by him which were located in Pasig City, Metro Manila. The said notice was issued solely government. It is this policy the Court will apply in arriving at the interpretation of the laws above-
by respondent municipal assessor subjecting petitioner’s real properties pursuant to Section 212 cited and the conclusions that should follow therefrom.
of RA 7160 or the Local Government Code of the Philippines. According to respondents, said
Section of the LGC impliedly repealed P.D. 921. Quoting Section 9 of PD 921: “[t]he schedule of […]
values that will serve as the basis for the appraisal and assessment for taxation purposes of real
properties located within the Metropolitan Area shall be prepared jointly by the City Assessors of Coming down to specifics, Sec. 9 of P.D. 921 requires that the schedule of values of real properties
the Districts…”. in the Metropolitan Manila area shall be prepared jointly by the city assessors in the districts
created therein: while Sec. 212 of R.A. 7160 states that the schedule shall be prepared "by the
A petition for prohibition was filed by petitioners at the RTC with a prayer to declare null and void provincial, city and municipal assessors of the municipalities within the Metropolitan Manila Area
the new tax assessments and to enjoin the collection of real estate taxes based on said for the different classes of real property situated in their respective local government units for
assessments. Having received an unfavorable decision from the RTC, petitioners filed the present enactment by ordinance of the sanggunian concerned. . . ."
Petition for Review directly to the Supreme Court.
It is obvious that harmony in these provisions is not only possible, but in fact desirable, necessary
ISSUES: and consistent with the legislative intent and policy. By reading together and harmonizing these
(1) Whether RA 7160 repealed the provisions of PD 921; two provisions, we arrive at the following steps in the preparation of the said schedule, as follows:
(2) Whether petitioners are required to exhaust administrative remedies prior to seeking judicial
relief; and 1. The assessor in each municipality or city in the Metropolitan Manila area shall
(3) Whether the new tax assessments are oppressive and confiscatory, and therefore prepare his/her proposed schedule of values, in accordance with Sec. 212, R.A.
unconstitutional. 7160.

RULINGS: 2. Then, the Local Treasury and Assessment District shall meet, per Sec. 9, P.D. 921.
(1st issue): NO In the instant case, that district shall be composed of the assessors in Quezon City,
We rule for petitioners. Pasig, Marikina, Mandaluyong and San Juan, pursuant to Sec. 1 of said P.D. In this
meeting, the different assessors shall compare their individual assessments,
R.A. 7160 has a repealing provision (Section 534) and, if the intention of the legislature was to discuss and thereafter jointly agree and produce a schedule of values for their
abrogate P.D. 921, it would have included it in such repealing clause, as it did in expressly district, taking into account the preamble of said P.D. that they should evolve "a
rendering of no force and effect several other presidential decrees. Hence, any repeal or progressive revenue raising program that will not unduly burden the taxpayers".
modification of P.D. 921 can only be possible under par. (f) of said Section 534, as follows:

8
3. The schedule jointly agreed upon by the assessors shall then be published in a The Court does not ordinarily pass upon constitutional questions unless these questions are
newspaper of general circulation and submitted to the sanggunian concerned for properly raised in appropriate cases and their resolution is necessary for the determination of the
enactment by ordinance, per Sec. 212, R.A. 7160. case (People v. Vera, 65 Phil. 56 [1937]). The Court will not pass upon a constitutional question
although properly presented by the record if the case can be disposed of on some other ground
By this harmonization, both the preamble of P.D. 921 decreeing that the real estate taxes shall such as the application of a statute or general law (Siler v. Louisville and Nashville R. Co., 213
"not unduly burden the taxpayer" and the "operative principle of decentralization" provided under U.S. 175, [1909], Railroad Commission v. Pullman Co., 312 U.S. 496 [1941]). (emphasis supplied)
Sec. 3, R.A. 7160 encouraging local government units to "consolidate or coordinate their efforts,
services and resources" shall be fulfilled. Indeed the essence of joint local action for common In view of the foregoing ruling, the question may be asked: what happens to real estate tax
good so cherished in the Local Government Code finds concrete expression in this harmonization. payments already made prior to its promulgation and finality? Under the law, "the taxpayer may
file a written claim for refund or credit for taxes and interests . . . ."
How about respondents' claim that, with the express repeal of P.D. 464, P.D. 921 — being merely
a "supplement" of said P.D. — cannot "exist independently on its own"? Quite the contrary is true.
By harmonizing P.D. 921 with R.A. 7160, we have just demonstrated that it can exist outside of 11. Coca-Cola Bottlers Phils. Inc. v. City of Manila, GR No. 156252, June 27, 2006
P.D. 464, as a support, supplement and extension of R.A. 7160, which for this purpose, has
replaced P.D. 464. FACTS:
Since it is now clear that P.D. 921 is still good law, it is equally clear that this Court's ruling in the The City Mayor of Manila approved Tax Ordinance No. 7988 entitled, Revenue Code of the City of
Mathay/Javier/Puyat-Reyes cases (supra) is still the prevailing and applicable doctrine. And, Manila. Tax Ordinance No. 7988 amended certain sections of Tax Ordinance No. 7794 by
applying the said ruling in the present case, it is likewise clear that the schedule of values increasing the tax rates applicable to certain establishments operating within the territorial
prepared solely by the respondent municipal assessor is illegal and void. jurisdiction of the City of Manila, including herein petitioner.

(2nd issue): NO Aggrieved by said tax ordinance, petitioner filed a Petition before the (DOJ), against the City of
Manila and its Sangguniang Panlungsod, invoking Section 187 of the Local Government Code of
We do not agree. Although as a rule, administrative remedies must first be exhausted before 1991 (Republic Act No. 7160). Said Petition questions the constitutionality or legality of Section
resort to judicial action can prosper, there is a well-settled exception in cases where the 21 of Tax Ordinance No. 7988.
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 DOJ Secretary Artemio G. Tuquero then issued a Resolution declaring Tax Ordinance No. 7988
in the petition are legal" , and thus, no evidence was presented in said court. null and void and without legal effect. The City of Manila failed to file a Motion for Reconsideration
nor lodge an appeal of said Resolution, thus, said Resolution of the DOJ Secretary declaring Tax
In laying down the powers of the Local Board of Assessment Appeals, R.A. 7160 provides in Sec. Ordinance No. 7988 null and void has lapsed into finality.
229 (b) that "(t)he 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 On 16 November 2000, Atty. Leonardo A. Aurelio wrote the Bureau of Local Government Finance
questions of fact are involved. Again, the protest contemplated under Sec. 252 of R.A. 7160 is (BLGF) requesting in behalf of his client, Singer Sewing Machine Company, an opinion on whether
needed where there is a question as to the reasonableness of the amount assessed. Hence, if a the Office of the City Treasurer of Manila has the right to enforce Tax Ordinance No. 7988 despite
taxpayer disputes the reasonableness of an increase in a real estate tax assessment, he is required the Resolution of the DOJ Secretary. Acting on said letter, the BLGF Executive Director issued an
to "first pay the tax" under protest. Otherwise, the city or municipal treasurer will not act on his Indorsement ordering the City Treasurer of Manila to cease and desist from enforcing Tax
protest. In the case at bench however, the petitioners are questioning the very authority and Ordinance No. 7988.
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 Despite the Resolution of the DOJ declaring Tax Ordinance No. 7988 null and void and the directive
but attacks on the very validity of any increase. of the BLGF that respondents cease and desist from enforcing said tax ordinance, respondents
continued to assess petitioner business tax for the year 2001 based on the tax rates prescribed
(3rd issue): NOT DISPOSED BY THE COURT under Tax Ordinance No. 7988. Thus, petitioner filed a Complaint with the RTC of Manila, Branch
21, on 17 January 2001, praying that respondents be enjoined from implementing the
Having already definitively disposed of the case through the resolution of the foregoing two issues, aforementioned tax ordinance.
we find no more need to pass upon the third. It is axiomatic that the constitutionality of a law,
regulation, ordinance or act will not be resolved by courts if the controversy can be, as in this During the pendency of the said case, the City Mayor of Manila approved on 22 February 2001
case it has been, settled on other grounds. Tax Ordinance No. 8011 entitled, An Ordinance Amending Certain Sections of Ordinance No. 7988.
Said tax ordinance was again challenged by petitioner before the DOJ through a Petition
[…] questioning the legality of the aforementioned tax ordinance on the grounds that (1) said tax
ordinance amends a tax ordinance previously declared null and void and without legal effect by
…ruling in Laurel vs. Garcia, where this Court held: the DOJ; and (2) said tax ordinance was likewise not published upon its approval in accordance
with Section 188 of the Local Government Code of 1991.

9
On 5 July 2001, then DOJ Secretary Hernando Perez issued a Resolution declaring Tax Ordinance Petitioners thereafter filed a Petition for Review before the CTA en banc. The CTA en banc similarly
No. 8011 null and void and legally not existing. denied the petition

The City of Manila appealed the DOJ Resolution, , denying its Motion for Reconsideration of the ISSUES/ HELD:
Resolution nullifying Tax Ordinance No. 8011 before the RTC of Manila, Branch 17, but the same W/N the questioned assessment is valid- NO
was dismissed for lack of jurisdiction. Consequently, filed a Petition for Review on Certiorari to
the Supreme Court. Ratio: Contrary to the assertions of petitioners, the Coca-Cola case is indeed applicable to the
instant case. By virtue of the Coca-Cola case, Tax Ordinance No. 7988 and Tax Ordinance No.
ISSUE: 8011 are null and void and without any legal effect. Therefore cannot be taxed and assessed
WON Tax Ordinance No. 7988 is null and void. under the amendatory laws — Tax Ordinance No. 7988 and Tax Ordinance No. 8011. Double
taxation means taxing the same property twice when it should be taxed only once; that is, "taxing
RULING: the same person twice by the same jurisdiction for the same thing". It is obnoxious when the
Yes, it is null and void. taxpayer is taxed twice, when it should be but once. Otherwise described as "direct duplicate
taxation", the two taxes must be imposed on the same subject matter, for the same purpose, by
Tax Ordinance No. 7988 has already been declared by the DOJ Secretary, as null and void and the same taxing authority, within the same jurisdiction, during the same taxing period; and the
without legal effect due to respondents failure to satisfy the requirement that said ordinance be taxes must be of the same kind or character.
published for three consecutive days as required by law. Moreso, said Order of the DOJ was never
appealed by the City of Manila, thus, it had attained finality after the lapse of the period to appeal. It is apparent from a perusal of Section 143 of the LGC that when a municipality or city has already
imposed a business tax on manufacturers, etc. of liquors, distilled spirits, wines, and any other
Furthermore, the RTC of Manila, reiterated the findings of the DOJ Secretary that respondents article of commerce, pursuant to Section 143 (a) of the LGC, said municipality or city may no
failed to follow the procedure in the enactment of tax measures as mandated by Section 188 of longer subject the same manufacturers, etc. to a business tax under Section 143 (h) of the same
the Local Government Code of 1991, in that they failed to publish Tax Ordinance No. 7988 for Code. Section 143 (h) may be imposed only on businesses that are subject to excise tax, VAT, or
three consecutive days in a newspaper of local circulation. The said ordinance was published only percentage tax under the NIRC, and that are "not otherwise specified in preceding paragraphs".
for one day in the 22 May 2000 issue of the Philippine Post in contravention of the unmistakable In the same way, businesses such as respondent's, already subject to a local business tax under
directive of the Local Government Code of 1991. Section 14 of Tax Ordinance No. 7794 [which is based on Section 143 (a) of the LGC], can no
longer be made liable for local business tax under Section 21 of the same Tax Ordinance [which
Significantly, said amending ordinance was likewise declared null and void by the DOJ Secretary, is based on Section 143 (h) of the LGC.
elucidating that[I]nstead of amending Ordinance No. 7988, [herein] respondent should have
enacted another tax measure which strictly complies with the requirements of law, both procedural
and substantive. The passage of the assailed ordinance did not have the effect of curing the
defects of Ordinance No. 7988 which, any way, does not legally exist. Said Resolution of the DOJ 13. Napocor v. City of Cabanatuan, G.R. No. 149110, April 9, 2003
Secretary had, as well, attained finality by virtue of the dismissal with finality
As held by this Court in the case of People v. Lim if an order or law sought to be amended is FACTS:
invalid, then it does not legally exist, there should be no occasion or need to amend it. NAPOCOR (NPC), the petitioner, is a government-owned and controlled corporation created under
Commonwealth Act 120. It is tasked to undertake the “development of hydroelectric generations
12. City of Manila v. Coca-Cola, G.R. No. 181845, August 12, 2009 of power and the production of electricity from nuclear, geothermal, and other sources, as well
as, the transmission of electric power on a nationwide basis.”
FACTS:
Tax Ordinances No. 7988 and No. 8011 of the City of Manila were later declared by the Court null For many years now, NPC sells electric power to the resident Cabanatuan City, posting a gross
and void in Coca-Cola Bottlers Philippines, Inc. v. City of Manila 8 (Coca-Cola case) . However, income of P107,814,187.96 in 1992. Pursuant to Sec. 37 of Ordinance No. 165-92, the respondent
before the Court could declare Tax Ordinance No. 7988 and Tax Ordinance No. 8011 null and void assessed the petitioner a franchise tax amounting to P808,606.41, representing 75% of 1% of
City of Manila assessed respondent on the basis of Section 21 of Tax Ordinance No. 7794, as the former’s gross receipts for the preceding year.
amended by the aforementioned tax ordinances, for deficiency local business taxes, penalties,
and interest. Respondent filed a protest with petitioner Toledo , who did not respond to the protest Petitioner, whose capital stock was subscribed and wholly paid by the Philippine Government,
of respondent. Respondent sought the cancellation of the assessment in the RTC. refused to pay the tax assessment. It argued that the respondent has no authority to impose tax
The RTC granted the Motion for Reconsideration of respondent, decreed the cancellation and on government entities. Petitioner also contend that as a non-profit organization, it is exempted
withdrawal of the assessment against the latter, and barred petitioners from further from the payment of all forms of taxes, charges, duties or fees in accordance with Sec. 13 of RA
imposing/assessing local business taxes against respondent under Section 21 of Tax Ordinance 6395 (law amending NPC Charter), as amended.
No. 7794, as amended by Tax Ordinance No. 7988 and Tax Ordinance No. 8011. The CTA also
dismissed the petition for review filed by the treasurer. The CTA First Division reasoned that the The respondent filed a collection suit in the RTC of Cabanatuan City, demanding that petitioner
Petition for Review of petitioners was not only filed out of time — it also failed to comply with the pay the assessed tax, plus surcharge equivalent to 25% of the amount of tax and 2% monthly
provisions of Section 4, Rule 5; and Sections 2 and 3, Rule 6, of the Revised Rules of the CTA. interest. Respondent alleged that petitioner’s exemption from local taxes has been repealed by

10
Sec. 193 of RA 7160 (Local Government Code). The trial court issued an order dismissing the cooperatives duly registered under R.A. No. 6938, non-stock and non-profit hospitals and
case. On appeal, the Court of Appeals reversed the decision of the RTC and ordered the petitioner educational institutions, are hereby withdrawn upon the effectivity of this Code.
to pay the city government the tax assessment.

ISSUES: 14. Palma Devt. Corp. v. Municipality of Malangas, G.R. No. 152492, October 16, 2003
(1) Is the NAPOCOR excluded from the coverage of the franchise tax simply because its stocks
are wholly owned by the National Government and its charter characterized is as a “non-profit FACTS:
organization”?
Petitioner Palma Development Corporation is engaged in milling and selling rice and corn to
(2) Is the NAPOCOR’s exemption from all forms of taxes repealed by the provisions of the Local wholesalers in Zamboanga City. It uses the municipal port of Malangas, Zamboanga del Sur as
Government Code (LGC)?
transshipment point for its goods. Malangas passed Municipal Revenue Code No. 09 where Section
RULING: 5G.01 of which imposes fees on the goods that pass through the issuing municipality’s territory.
(1) NO. To stress, a franchise tax is imposed based not on the ownership but on the exercise by Accordingly, the service fees imposed by the ordinance were paid by Palma under protest. It
the corporation of a privilege to do business. The taxable entity is the corporation which exercises contended that under the Local Government Code of 1991, municipal governments did not have
the franchise, and not the individual stockholders. By virtue of its charter, petitioner was created the authority to tax goods and vehicles that passed through their jurisdictions. On the other hand,
as a separate and distinct entity from the National Government. It can sue and be sued under its the Municipality of Malangas defended that the fees on the ground that the LGC (Secs. 153 and
own name, and can exercise all the powers of a corporation under the Corporation Code. 155) now provides for revenue-raising powers of LGUs
To be sure, the ownership by the National Government of its entire capital stock does not
ISSUES:
necessarily imply that petitioner is no engaged in business.

(2) YES. One of the most significant provisions of the LGC is the removal of the blanket exclusion 1) whether Section 5G.01 of Municipal Revenue Code No. 09 is valid
of instrumentalities and agencies of the National Government from the coverage of local taxation.
Although as a general rule, LGUs cannot impose taxes, fees, or charges of any kind on the National 2) whether the remand of the case to the trial court is necessary
Government, its agencies and instrumentalities, this rule now admits an exception, i.e. when
specific provisions of the LGC authorize the LGUs to impose taxes, fees, or charges on the RULING:
aforementioned entities. The legislative purpose to withdraw tax privileges enjoyed under existing
laws or charter is clearly manifested by the language used on Sec 137 and 193 categorically 1) No, Section 5G.01 of Municipal Revenue Code No. 09 is null and void for being in violation of
withdrawing such exemption subject only to the exceptions enumerated. Since it would be tedious
Republic Act No. 7160. The court held that although a municipality may impose a fee for the use
and impractical to attempt to enumerate all the existing statutes providing for special tax
exemptions or privileges, the LGC provided for an express, albeit general, withdrawal of such of a wharf, the LGC expressly prohibits imposing fees on goods that pass through the issuing
exemptions or privileges. No more unequivocal language could have been used. municipality’s territory.

By express language of Sections 153 and 155 of RA No. 7160, local government units, through
Sec. 137 their Sanggunian, may prescribe the terms and conditions for the imposition of toll fees or charges
for the use of any public road, pier or wharf funded and constructed by them. A service fee
Sec. 137. Franchise Tax. - Notwithstanding any exemption granted by any law or other special imposed on vehicles using municipal roads leading to the wharf is thus valid. However,
law, the province may impose a tax on businesses enjoying a franchise, at a rate not exceeding
Section133(e) of RA No. 7160 prohibits the imposition, in the guise of wharfage, of
fifty percent (50%) of one percent (1%) of the gross annual receipts for the preceding calendar
year based on the incoming receipt, or realized, within its territorial jurisdiction. fees — as well as all other taxes or charges in any form whatsoever — on goods or
merchandise. It is therefore irrelevant if the fees imposed are actually for police surveillance on
In the case of a newly started business, the tax shall not exceed one-twentieth (1/20) of one the goods, because any other form of imposition on goods passing through the territorial
percent (1%) of the capital investment. In the succeeding calendar year, regardless of when the jurisdiction of the municipality is clearly prohibited by Section 133(e).
business started to operate, the tax shall be based on the gross receipts for the preceding calendar
year, or any fraction thereof, as provided herein. Further, the benefits from the use of the municipal roads and the wharf were not unjustly enriched
by the petitioner since those benefits resulted from the infrastructure that the municipality was
Sec. 193
mandated by law to provide.
Sec. 193. Withdrawal of Tax Exemption Privileges.- Unless otherwise provided in this Code, tax
exemptions or incentives granted to, or presently enjoyed by all persons, whether natural or
juridical, including government-owned or controlled corporations, except local water districts,

11
2. No, the court ruled against the remand. Not only is it frowned upon by the Rules of Court; it is three percent (3%) of all gross receipts of the business transacted under its franchise. But whether
also unnecessary on the basis of the facts established by the admissions of the parties. Besides, the franchise tax exemption would include exemption from exactions by both the local and the
the fact sought to be established with the reception of additional evidence is irrelevant to the due national government is not unequivocal.
settlement of the case.
In this case, the doubt must be resolved in favor of the City of Davao. The “in lieu of all taxes”
clause applies only to national internal revenue taxes and not to local taxes. It is clear that the “in
lieu of all taxes” clause apply only to taxes under the NIRC and not to local taxes. It is not even
15. Smart Communications, Inc. v. City of Davao, G.R. No. 155491, July 21, 2009. applied to income tax, as shown in the provision itself, to wit:
 proviso in the first paragraph of Section 9, Smart's franchise states that the grantee shall
FACTS: "continue to be liable for income taxes payable under Title II of the National Internal Revenue
Code."
Smart filed a special civil action for declaratory relief for the ascertainment of its rights and  second paragraph of Section 9, speaks of tax returns filed and taxes paid to the
obligations under the Tax Code of the City of Davao which imposes seventy-five percent (75%) "Commissioner of Internal Revenue or his duly authorized representative in accordance with the
of one percent (1%) of the gross annual receipts for the preceding calendar year based on the National Internal Revenue Code."
income or receipts realized within the territorial jurisdiction of Davao City notwithstanding any  same paragraph, declares that the tax returns "shall be subject to audit by the Bureau of
exemption granted by any law or other special law to such franchise. Internal Revenue."
Smart contends that its telecenter in Davao City is exempt from payment of franchise tax to the If Congress intended the "in lieu of all taxes" clause in Smart's franchise to also apply to local
City, on the following grounds: (a) the issuance of its franchise under Republic Act (R.A.) No. taxes, Congress would have expressly mentioned the exemption from municipal and provincial
7294http://sc.judiciary.gov.ph/jurisprudence/2008/september2008/155491. taxes.
htm - _ftn5 subsequent to R.A. No. 7160 shows the clear legislative intent to exempt it from
the provisions of R.A. 7160; (b) Section 137 of R.A. No. 7160 can only apply to exemptions already It should be noted that the “in lieu of all taxes” clause in R.A. No. 7294 has become functus
existing at the time of its effectivity and not to future exemptions; (c) the power of the City of
officio with the abolition of the franchise tax on telecommunications companies. Currently, Smart
Davao to impose a franchise tax is subject to statutory limitations such as the in lieu of all along with other telecommunications companies pays the uniform 10% value-added tax. The VAT
on sale of services of telephone franchise grantees is equivalent to 10% of gross receipts derived
taxes clause found in Section 9 of R.A. No. 7294; and (d) the imposition of franchise tax by the
City of Davao would amount to a violation of the constitutional provision against impairment of from the sale or exchange of services, as provided in R.A. No. 7716, as amended by the Expanded
contracts.
Value Added Tax Law (R.A. No. 8241).

The franchise tax that the City of Davao may impose must comply with Sections 137 and 151 of
In their answer, the City of Davao invoked the power granted by the Constitution to local
government units to create their own sources of revenue. R.A. No. 7160. Thus, the local franchise tax that may be imposed by the City must not exceed
50% of 1% of the gross annual receipts for the preceding calendar year based on the income
ISSUE: on receipts realized within the territorial jurisdiction of Davao.
Whether Smart is liable to pay the franchise tax imposed by the City of Davao.
On the burden of grant to Tax exemptions:
RULING: Tax exemptions are never presumed and are strictly construed against the taxpayer and
liberally in favor of the taxing authority. They can only be given force when the grant is clear and
Yes, Smart is liable.
categorical. If the intention of the legislature is open to doubt, then the intention of the legislature
must be resolved in favor of the State.
On “In lieu of all taxes“ Clause in RA 7294:
On impairment of contracts:
Smart is of the view that the only taxes it may be made to bear under its franchise are the national
franchise tax (now VAT), income tax, and real property tax. It claims exemption from the local There is no violation of Article III, Section 10 of the 1987 Philippine Constitution. The franchise of
Smart does not expressly provide for exemption from local taxes. Absent the express provision on
franchise tax because the in lieu of taxes clause in its franchise does not distinguish between
national and local taxes such exemption under the franchise, we are constrained to rule against it. Due to this ambiguity
in the law, the doubt must be resolved against the grant of tax exemption.
R.A. No. 7294 is not definite in granting exemption to Smart from local taxation. Section 9 of R.A.
Moreover, Smarts franchise was granted with the express condition that it is subject to
No. 7294 imposes on Smart a franchise tax equivalent to three percent (3%) of all gross receipts
of the business transacted under the franchise and the said percentage shall be in lieu of all taxes amendment, alteration, or repeal. Contract Clause has never been thought as a limitation on the
exercise of the State’s power of taxation save only where a tax exemption has been granted for
on the franchise or earnings thereof.
a valid consideration.
R.A. No 7294 does not expressly provide what kind of taxes Smart is exempted from. It is not
16. Mobil Phil. Inc. v. City Treasurer of Makati, G.R. No. 154092, 14 July 2005
clear whether the “in lieu of all taxes” provision in the franchise of Smart would include exemption
from local or national taxation. What is clear is that Smart shall pay franchise tax equivalent to

12
FACTS: the revenue generated for the year 1998. Therefore, respondents City Treasurer and Chief of the
License Division of Makati City are ordered to refund to petitioner business taxes paid in the
Mobil Philippines Inc is a domestic corporation engaged in the manufacturing, importing, exporting amount of P1,331,638.84
and wholesaling of petroleum products, while respondents are the local government officials of
the City of Makati charged with the implementation of the Revenue Code of the City of Makati, as
well as the collection and assessment of business taxes, license fees and permit fees within said
city. Prior to September 1998, petitioner’s principal office was in Makati City. 17. Yamane v. BA Lepanto Condo. Corp., G.R. No. 154993, October 25, 2005

On August 20, 1998, petitioner filed an application with the City Treasurer of Makati for the FACTS:
retirement of its business within the City of Makati as it moved its principal place of business to On 15 December 1998, the BA Lepanto Condo. Corporation (the Corporation) received a Notice
Pasig City. The OIC of the License Division issued a billing slip of business taxes amounting to P of Assessment dated from the City Treasurer of Makati, Luz Yamane. The Notice of Assessment
1,898,106.96 which the petitioner paid under protest on September 1998. In 1999, petitioner filed stated that the Corporation is liable to pay the correct city business taxes, fees and charges,
a claim for refund but was denied. The trial court rules that the payments made by the petitioner computed as totaling P1,601,013.77 for the years 1995 to 1997. The Notice of Assessment was
in 1998 are payments for the business taxes in 1997. silent as to the statutory basis of the business taxes assessed.
Proceeding from the premise that its tax liability arose from Section 3A.02(m) of the Makati
ISSUE: Revenue Code, the Corporation proceeded to argue that under both the Makati Code and the
Local Government Code, business is defined as trade or commercial activity regularly engaged in
Are the business taxes paid by petitioner in 1998, business taxes for 1997 or 1998? as a means of livelihood or with a view to profit.

RULING: It was submitted that the Corporation, as a condominium corporation, was organized not for
profit, but to hold title over the common areas of the Condominium, to manage the Condominium
The trial court erred when it said that the payments made by petitioner in 1998 are payments for for the unit owners, and to hold title to the parcels of land on which the Condominium was located.
business tax incurred in 1997 which only accrued in January 1998. Business taxes imposed in the Neither was the Corporation authorized, under its articles of incorporation or by-laws to engage
exercise of police power for regulatory purposes are paid for the privilege of carrying on a business in profit-making activities. The assessments it did collect from the unit owners were for capital
in the year the tax was paid. It is paid at the beginning of the year as a fee to allow the business expenditures and operating expenses.
to operate for the rest of the year. It is deemed a prerequisite to the conduct of business. Yamane denied the protest. Lepanto then appealed the denial to the RTC of Makati. RTC Makati
affirmed the decision of Yamane. Lepanto then filed a petition for review under Rule 42 with the
Income tax, on the other hand, is a tax on all yearly profits arising from property, professions, Court of Appeals. The Court of Appeals reversed the RTC.
trades or offices, or as a tax on a person’s income, emoluments, profits and the like. It is tax on
income, whether net or gross realized in one taxable year. It is due on or before the 15th day of ISSUE:
the 4th month following the close of the taxpayer’s taxable year WON the City of Makati may collect business taxes on condominium corporations

Under the Makati Revenue Code, it appears that the business tax, like income tax, is computed RULING:
based on the previous year’s figures. In computing the amount of tax due for the first quarter of No. Condominium corporations are exempt from local business taxation.
operations, the business’ capital investment is used as the basis. For the subsequent quarters of The coverage of business taxation particular to the City of Makati is provided by the Makati
the first year, the tax is based on the gross sales/receipts for the previous quarter. The business Revenue Code (Revenue Code), enacted through Municipal Ordinance No. 92-072, which is quite
taxes paid in the year 1998 is for the privilege of engaging in business for the same year, and not specific as to the particular businesses covered by business taxes.
for having engaged in business for 1997. Under the same Code, on the year an establishment
retires or terminates its business within the municipality, it would be required to pay the difference At no point has the City Treasurer been candid enough to inform the Corporation, the RTC, the
in the amount if the tax collected, based on the previous year’s gross sales or receipts, is less than Court of Appeals, or this Court for that matter, as to what exactly is the precise statutory basis
the actual tax due based on the current year’s gross sales or receipts. under the Makati Revenue Code for the levying of the business tax on petitioner. All of the
pleadings submitted by the City Treasurer in all the antecedent judicial proceedings, as well as in
For the year 1998, petitioner paid a total of P2,262,122.48 to the City Treasurer of Makati as this present petition, and also the communications by the City Treasurer to the Corporation which
business taxes for the year 1998. The amount of tax as computed based on petitioner’s gross form part of the record do not have any citation made by the City Treasurer of any provision of
sales for the Revenue Code which would serve as the legal authority for the collection of business taxes
from condominiums in Makati.
1998 is only P1,331,638.84. Since the amount paid is more than the amount computed based on
petitioner’s actual gross sales for 1998, petitioner upon its retirement is not liable for additional It is thus imperative that in order that the Corporation may be subjected to business taxes, its
taxes to the City of Makati. activities must fall within the definition of business as provided in the Local Government Code.
And to hold that they do is to ignore the very statutory nature of a condominium corporation.
Thus, the Court ruled that the respondent erroneously treated the assessment and collection of To enable the orderly administration over these common areas which are jointly owned by the
business tax as if it were income tax, by rendering an additional assessment of P1,331,638.84 for various unit owners, the Condominium Act permits the creation of a condominium corporation,

13
which is specially formed for the purpose of holding title to the common area, in which the holders The law is clear, the provision specifically states that basis should be gross receipts.
of separate interests shall automatically be members or shareholders, to the exclusion of others,
in proportion to the appurtenant interest of their respective units.
Gross receipt vs gross revenue (discussion by court)
The particular Articles of Incorporation and By-Laws of Lepanto, and the documents unmistakably
hew to the limitations contained in the Condominium Act. Whatever capacity it may have pursuant
to its power to exercise acts of ownership over personal and real property is limited by its stated Gross receipts Gross revenue
corporate purposes, which are by themselves further limited by the Condominium Act. A include money or its equivalent covers money or its equivalent
condominium corporation, while enjoying such powers of ownership, is prohibited by law from actually or constructively received actually or constructively
transacting its properties for the purpose of gainful profit. in consideration of services received, including the value of
rendered or articles sold, services rendered or articles
Accordingly, and with a significant degree of comfort, the Supreme Court held that condominium exchanged or leased, whether sold, exchanged or leased, the
corporations are generally exempt from local business taxation under the Local Government Code, actual or constructive. (what you payment of which is yet to be
irrespective of any local ordinance that seeks to declare otherwise. really received, actual or received. (expected to be received)
constructive)

18. Ericsson Telecoms Inc. v. City of Pasig, G.R. No. 176667, November 22, 2007
Application to case
FACTS:
Ericsson Telecommunications, Inc., is engaged in the design, engineering, and marketing of In ericssons’ case, its audited financial statements reflect income or revenue which accrued to it
telecommunication facilities/system. The City Treasurer of Pasig City assessed Ericsson a business during the taxable period although not yet actually or constructively received or paid, because
tax deficiency for the years 1998 and 1999 based on its gross revenues as reported in its audited ericsson uses the accrual method of accounting, where income is reportable when all the events
financial statements for the years 1997 and 1998. Ericsson filed a Protest claiming that the have occurred that fix the taxpayers right to receive the income, and the amount can be
computation of the local business tax should be based on gross receipts and not on gross revenue. determined with reasonable accuracy; the right to receive income, and not the actual receipt,
The same issue happened for assessments made for the year 2000 and 2001. determines when to include the amount in gross
income.http://sc.judiciary.gov.ph/jurisprudence/2007/november2007/17666
ISSUE:
WON local business tax on contractors should be based on gross receipts or gross revenue? 7.htm - _ftn26

City of pasig: it should be based on gross revenues, since gross receipts is synonymous with The imposition of local business tax based on ericsson’s gross revenue will inevitably result in the
gross earnings/revenue, which, in turn, includes uncollected earnings constitutionally proscribed double taxation taxing of the same person twice by the same
jurisdiction for the same thing inasmuch as petitioners revenue or income for a taxable year will
Ericsson: it should be based on gross receipts, only the portion of the revenues which were definitely include its gross receipts already reported during the previous year and for which local
actually and constructively received should be considered in determining its tax base. business tax has already been paid.

RULING:
Ericsson won, should be based on gross receipts
19. Allied Thread Co., Inc. v. Manila, G.R. No. L-40296,21 Nov. 1984
Basis (law)
FACTS:
Section 143 (e) of LGC covering local business tax contractors and other independent contractors, Allied Thread Co. Inc. is engaged in the business of manufacturing sewing thread and yarn. It
says: “The municipality may impose taxes on the following businesses: (e) On contractors and operates its factory and maintains an office in Pasig, Rizal. In order to sell its products in Manila
other independent contractors, in accordance with the following schedule: With gross and in other parts of the Philippines, it engaged the services of a sales broker, Ker & Co. Ltd., the
receipts for the preceding calendar year in the amount of: Amount of Tax Per Annum”. The latter deriving commissions from every sale made for its principal. The City of Manila enacted
provision specifically refers to gross receipts which is defined under Section 131 of the Local Ordinance 7516 imposing business taxes based on gross sales on a graduated basis on
Government Code, as follows: manufacturers, importers or producers doing business in Manila. Allied Thread and Ker & Co.
alleged that said ordinance is invalid for being contrary to Section 54 of PD 426.

ISSUE:
“(n) Gross Sales or Receipts include the total amount of money or its equivalent representing the Whether or not Allied Thread is properly taxed in Manila.
contract price, compensation or service fee, including the amount charged or materials supplied with
the services and the deposits or advance payments actually or constructively received during the HELD:
taxable quarter for the services performed or to be performed for another person excluding discounts Ordinance 7516, as amended, imposes a business tax on manufacturers, importers or producers
if determinable at the time of sales, sales return, excise tax, and value-added tax (VAT);” doing business in Manila. The tax imposition is upon the performance of an act, enjoyment of a
14
privilege, or the engaging in an occupation, and hence is in the nature of an excise tax. The power Government Code. As to stones, sand, gravel, earth and other quarry resources
to levy an excise upon the performance of an act or the engaging in an occupation does not extracted from private land, however, it may not do so, because of the limitation
depend upon the domicile of the person subject to the excise, nor upon the physical location of provided by Section 133 of the Code in relation to Section 151 of the National Internal
the property and in connection with the act or occupation taxed, but depends upon the place in Revenue Code.
which the act is performed or occupation engaged in. Thus, since Allied Thread sells its products
in the City of Manila through its broker, Ker & Co., it cannot escape the tax liability imposed by
Ordinance 7516, as amended. 21. Angeles City v. Angeles City Electric Corp., GR No. 166134, 29 June 2010

“the prohibition on the issuance of a writ of injunction to enjoin the collection of taxes applies only
20. Province of Bulacan v. CA, G.R. No. 126232, November 27, 1998 to national internal revenue taxes and not to local taxes”

FACTS: FACTS:
On June 26, 1992, the Sangguniang Panlalawigan of Bulacan passed Provincial Ordinance No. 3, 1964 Respondent was granted a legislative franchise to run a power generation and distribution
known as "An ordinance Enacting the Revenue Code of the Bulacan Province”, which took effect facility in Angeles, Pampanga. Under its franchise, it pays franchise tax for gross earnings from
on July 1, 1992. electric current sold in lieu of all taxes, fees and assessments. Later, 1992, the local government
code took effect conferring upon LGUs the power to impose tax on business enjoying franchise.
The ordinance allows the Province to collect taxes on the fair market value in the locality per cubic
meter of ordinary stones, sand, gravel, earth and other quarry resources, such, but not limited to Thereafter, respondent has been paying local franchise tax to the Office of the City Treasurer in
marble, granite, volcanic cinders, basalt, tuff and rock phosphate, extracted from public lands or addition to the national franchise tax it pays to the BIR. On Jan 22, 2004 the city treasurer issued
from beds of seas, lakes, rivers, streams, creeks and other public waters within its territorial a notice of assessment to respondent for business tax, license fee and other charges for the period
jurisdiction. 1993 to 2004. Within the period prescribed by law, respondent protested the assessment which
was denied for lack of merit, on Feb. 17, 2004, by the City Treasurer. Aggrieved, respondent
Due to the ordinance, Provincial treasurer assess Republic Cement Corporation for P2,524,692.13 appealed the denial of its protest to the RTC via Petition for Declaratory Relief. On April 5, 2004
for extracting limestone, shale and silica from several parcels of private land in the province the City Treasurer levied the real properties of respondent.
during the third quarter of 1992 until the second quarter of 1993. However, Republic Cement
Corporation believes that the province had no authority to impose taxes on quarry resources RTC issued a WPI against public respondents.
extracted from private lands, hence, filed a declaratory relief to the RTC. The province filed a
motion for reconsideration which was granted by RTC. Republic Cement Corporation appealed ISSUE:
directly to SC, however, SC referred the case to CA. Under CA, it declared that the Province of Whether the RTC committed grave abuse of discretion in granting the WPI.
Bulacan had no authority to impose such taxes, thus the instant petition made by the Province to All other matters pertaining to the validity of the tax assessment and respondent’s tax exemption
SC. must be left for the determination of the RTC where the main case is pending decision.

ISSUE: RULING:
Whether or not the Province of Bulacan has the right to impose tax on private lands. The LGC does not specifically prohibit an injunction enjoining the collection of taxes
The NIRC provides, in line with the lifeblood doctrine, that no court shall have the authority to
HELD: grant an injunction to restrain the collection of any national internal revenue tax, fee or charge
No, it had no right to impose taxes. imposed by the code except when in the opinion of the CTA the collection thereof may jeopardize
the interest of the government and/or the taxpayer.
According to the Supreme Court, the Court of Appeals erred in ruling that a province can impose The situation is different in the case of the collection of local taxes as there is no express provision
only the taxes specifically mentioned under the Local Government Code. As correctly pointed out in the LGC prohibiting courts from issuing an injunction to restrain local governments from
by petitioners, Section 186 allows a province to levy taxes other than those specifically enumerated collecting taxes.
under the Code, subject to the conditions specified therein. However, such findings affords cold
comfort to petitioners as they are still prohibited from imposing taxes on stones, sand, gravel, No grave abuse of discretion was committed by the RTC
earth and other quarry resources extracted from private lands. Two requisites must exist to warrant the issuance of a WPI, 1: the existence of a clear and
unmistakable right that must be protected and 2: an urgent and paramount necessity for the writ
The tax imposed by the Province of Bulacan is an excise tax, being a tax upon the performance, to prevent serious damage. The requisites were satisfied as the levy of the properties would result
carrying on, or exercise of an activity. A province may not, therefore, levy excise taxes on articles to loss of jobs and possible widespread blackouts in the area.
already taxed by the National Internal Revenue Code. Unfortunately for petitioners, the National
Internal Revenue Code provided the tax on all quarry resources, regardless of origin, whether Finally, the court notes that the disputed tax assessment is not yet due and demandable in this
extracted from public or private land. case. Considering that the respondent was able to appeal the denial of its protest within the period
prescribed under section 195 of the LGC, the collection of taxes through levy at this time is hasty,
Thus, the province can, however, impose a tax on stones, sand, gravel, earth and other quarry
if not premature. The issue of tax exemption, double taxation, prescription and the alleged
resources extracted from public land because it is expressly empowered to do so under the Local
retroactive application of the local tax code of Angeles must first be resolved before the properties
15
of the respondent can be levied. In the meantime, respondent’s rights of ownership and Petition GRANTED; It is illegal only insofar as the resorts, swimming pools, bath houses, hot
possession must be respected. springs and tourist spots are concerned.

Indeed, theaters, cinemas, concert halls, circuses, and boxing stadia are bound by a common
typifying characteristic in that they are all venues primarily for the staging of spectacles or the
holding of public shows, exhibitions, performances, and other events meant to be viewed by an
audience. Accordingly, 'other places of amusement' must be interpreted in light of the typifying
22. Pelizloy Realty Corp. v. The Province of Benguet, GR No. 183137, April 10, 2013
characteristic of being venues "where one seeks admission to entertain oneself by seeing or
viewing the show or performances" or being venues primarily used to stage spectacles or hold
FACTS: public shows, exhibitions, performances, and other events meant to be viewed by an audience.

On December 8, 2005, Respondent Province approved a tax ordinance, which contained a section As defined in The New Oxford American Dictionary, 'show' means "a spectacle or display of
that sought to levy 10% amusement tax on gross receipts from admissions to “resorts, swimming something, typically an impressive one"; while 'performance' means "an act of staging or
pools, bath houses, hot springs and tourist spots”. Petitioner, who owns Palm Grove Resort, filed presenting a play, a concert, or other form of entertainment.” As such, the ordinary definitions of
an appeal/petition to the Secretary of Justice alleging that it was an ultra vires act of the Province the words 'show' and 'performance' denote not only visual engagement (i.e., the seeing or viewing
to approve such tax ordinance. of things) but also active doing (e.g., displaying, staging or presenting) such that actions are
manifested to, and (correspondingly) perceived by an audience.
For the failure of the Secretary of Justice to decide within sixty (60) days from receipt of the
appeal, Petitioner filed a Petition for Declaratory Relief and Injunction at the RTC-Benguet. Considering these, it is clear that resorts, swimming pools, bath houses, hot springs and tourist
Petitioner argued that the Respondent exceeded its taxing powers, as provided for in the LGC: spots cannot be considered venues primarily "where one seeks admission to entertain oneself by
seeing or viewing the show or performances”. While it is true that they may be venues where
people are visually engaged, they are not primarily venues for their proprietors or operators to
“Section 133. Common Limitations on the Taxing Powers of Local Government Units . — Unless
actively display, stage or present shows and/or performances.
otherwise provided herein, the exercise of the taxing powers of provinces, cities, municipalities,
and barangays shall not extend to the levy of the following:
Thus, resorts, swimming pools, bath houses, hot springs and tourist spots do not belong to the
same category or class as theaters, cinemas, concert halls, circuses, and boxing stadia. It follows
xxx xxx xxx
that they cannot be considered as among the ‘other places of amusement' contemplated by
Section 140 of the LGC and which may properly be subject to amusement taxes.
(i) Percentage or value-added tax (VAT) on sales, barters or exchanges or similar transactions on
goods or services except as otherwise provided herein.”
Since the tax ordinance also sought to tax admission fees for boxing, the latter is not invalidated
as the power to tax it is expressly provided for under Sec. 140 of the LGC.
Respondent challenged the petition, stating that it is within their power under Sec. 140
(amusement tax), and that the definition of “other forms of amusement” under such section
REAL PROPERTY TAXATION
encompasses resorts, swimming pools, bath houses, hot springs and tourist spots since the LGC
defines amusement under Sec. 131 as “a pleasurable diversion and entertainment. It is
synonymous to relaxation, avocation, pastime or fun.” 1. Mactan Cebu International Airport Authority (MCIAA) v. City of Lapu-Lapu, G.R. No.
181756, June 15, 2015

RTC dismissed the Petition stating that what the LGC prohibits is not the imposition by LGU’s of FACTS:
percentage taxes in general but the “imposition and levy of percentage tax on sales, barters, etc Petitioner, Mactan-Cebu International Airport Authority (MCIAA) was created by Congress under
on goods and services only”. Hence the present appeal. Republic Act No. 6958. Upon its creation, petitioner enjoyed exemption from realty taxes imposed
by the National Government or any of its political subdivision. However, upon the effectivity of
ISSUE: the LGC the Supreme Court rendered a decision that the petitioner is no longer exempt from realty
estate taxes.
Whether or not the 10% amusement tax on gross receipts from admission to resorts, swimming Respondent City issued to petitioner a Statement of Real Estate Tax assessing the lots comprising
pools, bath houses, hot springs and tourist spots is legal. the Mactan International Airport which included the airfield, runway, taxi way and the lots on
which these are built. Petitioner contends that these lots, and the lots to which they are built, are
HELD: utilized solely and exclusively for public purposes and are exempt from real property
tax. Petitioner based its claim for exemption on DOJ Opinion No. 50.

16
Respondent issued notices of levy on 18 sets of real properties of petitioners. Petitioner filed a auction of 27 of petitioner’s properties and the eventual forfeiture and purchase of the said
petition for Prohibition, TRO, and a writ of preliminary injunction with RTC Lapulapu which sought properties by respondent City of Lapu-Lapu is null and void as well as the corresponding
to enjoin respondent City from issuing the warrant of levy against petitioner’s properties from Certificates of Sale of Delinquent Property issued to respondent City of Lapu-Lapu.
selling them at public auction for delinquency in realty tax obligations.

ISSUE:
Petitioner claimed before the RTC that it had discovered that respondent City did not pass any
ordinance authorizing the collection of real property tax, a tax for the special education fund (SEF),
and a penalty interest for its nonpayment. Petitioner argued that without the corresponding tax
ordinances, respondent City could not impose and collect real property tax, an additional tax for
the SEF, and penalty interest from petitioner.

RTC granted the writ of preliminary which was later on lifted upon motion by the respondents.

CA: Court of Appeals held that petitioner’s airport terminal building, airfield, runway, taxiway,
and the lots on which they are situated are not exempt from real estate tax reasoning as follows:
Under the Local Government Code (LGC for brevity), enacted pursuant to the constitutional 2. Lung Center of the Philippines v. Quezon City, GR No. 144104, June 29, 2004
mandate of local autonomy, all natural and juridical persons, including government-owned or
controlled corporations (GOCCs), instrumentalities and agencies, are no longer exempt from local FACTS:
taxes even if previously granted an exemption. The only exemptions from local taxes are those Petitioner is a non-stock, non-profit entity established by virtue of PD No. 1823, seeks exemption
specifically provided under the Code itself, or those enacted through subsequent legislation. from real property taxes when the City Assessor issued Tax Declarations for the land and the
hospital building. Petitioner predicted on its claim that it is a charitable institution. The request
RULING: was denied, and a petition hereafter filed before the Local Board of Assessment Appeals of Quezon
MIAA is not a government-owned or controlled corporation under Section 2(13) of the City (QC-LBAA) for reversal of the resolution of the City Assessor. Petitioner alleged that as a
Introductory Provisions of the Administrative Code because it is not organized as a stock or non- charitable institution, is exempted from real property taxes under Sec 28(3) Art VI of the
stock corporation. Neither is MIAA a government-owned or controlled corporation under Section Constitution. QC-LBAA dismissed the petition and the decision was likewise affirmed on appeal by
16, Article XII of the 1987 Constitution because MIAA is not required to meet the test of economic the Central Board of Assessment Appeals of Quezon City. The Court of Appeals affirmed the
viability. judgment of the CBAA.

MIAA is a government instrumentality vested with corporate powers and performing essential ISSUE:
public services pursuant to Section 2(10) of the Introductory Provisions of the Administrative 1. Whether or not petitioner is a charitable institution within the context of PD 1823 and the 1973
Code. As a government instrumentality, MIAA is not subject to any kind of tax by local and 1987 Constitution and Section 234(b) of RA 7160.
governments under Section 133(o) of the Local Government Code. The exception to the
exemption in Section 234(a) does not apply to MIAA because MIAA is not a taxable entity under 2. Whether or not petitioner is exempted from real property taxes.
the Local Government Code. Such exception applies only if the beneficial use of real property
owned by the Republic is given to a taxable entity. RULING:
1. Yes. The Court hold that the petitioner is a charitable institution within the context of the 1973
Finally, the Airport Lands and Buildings of MIAA are properties devoted to public use and thus are and 1987 Constitution. Under PD 1823, the petitioner is a non-profit and non-stock corporation
properties of public dominion. Properties of public dominion are owned by the State or the which, subject to the provisions of the decree, is to be administered by the Office of the President
Republic. As properties of public dominion owned by the Republic, there is no doubt whatsoever with the Ministry of Health and the Ministry of Human Settlements. The purpose for which it was
that the Airport Lands and Buildings are expressly exempt from real estate tax under Section created was to render medical services to the public in general including those who are poor and
234(a) of the Local Government Code. This Court has also repeatedly ruled that properties also the rich, and become a subject of charity. Under PD 1823, petitioner is entitled to receive
of public dominion are not subject to execution or foreclosure sale. donations, even if the gift or donation is in the form of subsidies granted by the government.

Petitioner’s properties that are actually, solely and exclusively used for public purpose, consisting 2. Partly No. Under PD 1823, the lung center does not enjoy any property tax exemption privileges
of the airport terminal building, airfield, runway, taxiway and the lots on which they are for its real properties as well as the building constructed thereon.
situated, EXEMPT from real property tax imposed by the City of Lapu-Lapu. The property tax exemption under Sec. 28(3), Art. VI of the Constitution of the property taxes
only. This provision was implanted by Sec.243 (b) of RA 7160.which provides that in order to be
Thus, all real property tax assessments are VOID, including the additional tax for the special entitled to the exemption, the lung center must be able to prove that: it is a charitable institution
education fund and the penalty interest, as well as the final notices of real property tax and; its real properties are actually, directly and exclusively used for charitable purpose.
delinquencies, issued by the City of Lapu-Lapu on petitioner’s properties, except the assessment Accordingly, the portions occupied by the hospital used for its patients are exempt from real
covering the portions that petitioner has leased to private parties. Likewise, the sale in public property taxes while those leased to private entities are not exempt from such taxes.

17
3. Manila International Airport Authority v. CA, GR No. 155650, July 20, 2006, En banc,
GR No. 163072, April 2, 2009 4. Quezon City Govt v. BayanTel Corp., GR N0. 162015, March 6, 2006

FACTS: FACTS
Petitioner Manila International Airport Authority (MIAA) operates and administers the Ninoy Respondent Bayan Telecommunications, Inc. (Bayantel) is a legislative franchise holder under
Aquino International Airport (NAIA) Complex under Executive Order No.903 (EO 903), otherwise Republic Act (R.A.) No. 3259 (1961) to establish and operate radio stations for domestic
known as the Revised Charter of the Manila International Airport Authority. Under Sections 3 and telecommunications, radiophone, broadcasting and telecasting. Section 14 (a) of R.A. No. 3259
22 of EO 903, approximately 600 hectares of land, including the runways, the airport tower, and states: “The grantee shall be liable to pay the same taxes on its real estate, buildings and
other airport buildings, were transferred to MIAA. The NAIA Complex is located along the border personal property, exclusive of the franchise, xxx”.
between Pasay City and Parañaque City. 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 In 1992, R.A. No. 7160, otherwise known as the “Local Government Code of 1991” (LGC) took
its City Treasurer, issued notices of levy and warrants of levy for the NAIA Pasay properties. effect. Section 232 of the Code grants local government units within the Metro Manila Area the
Thereafter, the City Mayor of Pasay threatened to sell at public auction the NAIA Pasay properties power to levy tax on real properties. Barely few months after the LGC took effect, Congress
if the delinquent real property taxes remain unpaid. MIAA filed with the Court of Appeals a petition enacted R.A. No. 7633, amending Bayantel’s original franchise. The Section 11 of the amendatory
for prohibition and injunction with prayer for preliminary injunction or temporary restraining order. contained the following tax provision: “The grantee, its successors or assigns shall be liable to
The petition sought to enjoin the City of Pasay from imposing real property taxes on, levying pay the same taxes on their real estate, buildings and personal property, exclusive of this
against, and auctioning for public sale the NAIA Pasay properties. franchise, xxx“. In 1993, the government of Quezon City enacted an ordinance otherwise known
as the Quezon City Revenue Code withdrawing tax exemption privileges.
Court of Appeals:
Upheld the power of the City of Pasay to impose and collect realty taxes on the NAIA Pasay On January 7, 1999, Bayantel wrote the office of the City Assessor seeking the exclusion of its
properties. Sections 193 and 234 of Republic Act No.7160 or the Local Government Code withdrew real properties but the request having been denied, Bayantel interposed an appeal with the Local
the exemption from payment of real property taxes granted to natural or juridical persons, Board of Assessment Appeals (LBAA). And, evidently on its firm belief of its exempt status,
including government-owned or controlled corporations. Since MIAA is a government-owned Bayantel did not pay the real property taxes assessed against it by the Quezon City government.
corporation, it follows that its tax exemption under Section 21 of EO 903 has been withdrawn
upon the effectivity of the Local Government Code. On account thereof, the Quezon City Treasurer sent out notices of delinquency for the total
amount of P43,878,208.18, followed by the issuance of several warrants of levy against Bayantels
ISSUE: properties preparatory to their sale at a public auction set on July 30, 2002.
WON the NAIA Pasay properties of MIAA are exempt from real property tax – YES.
Threatened with the imminent loss of its properties, Bayantel immediately withdrew its appeal
RULING: with the LBAA and instead filed with the RTC of Quezon City a petition for prohibition with an
1. MIAA is a government "instrumentality" that does not qualify as a "government-owned or urgent application for a temporary restraining order (TRO) and/or writ of preliminary injunction,
controlled corporation. Under Section 133(o) of the Local Government Code, local government thereat docketed as Civil Case No. Q-02-47292, which was raffled to Branch 227 of the court.
units have no power to tax instrumentalities of the national government. Therefore, MIAA is
exempt from any kind of tax from the local governments.
ISSUE
A government "instrumentality" may or may not be a "government-owned or controlled Whether or not Bayantels real properties in Quezon City are, under its franchise, exempt from real
corporation" (Section 2(10) of the Introductory Provisions of the Administrative Code of 1987). A property tax.
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 RULING
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 The lower court resolved the issue in the affirmative, basically owing to the phrase exclusive of
member of MIAA because non-stock corporations cannot distribute any part of their income to this franchise found in Section 11 of Bayantels amended franchise, Rep. Act No. 7633. To
their members. Section 11 of the MIAA Charter mandates MIAA to remit 20% of its annual gross petitioners, however, the language of Section 11 of Rep. Act No. 7633 is neither clear nor
operating income to the National Treasury. unequivocal. The elaborate and extensive discussion devoted by the trial court on the meaning
MIAA is like any other government instrumentality, but is vested with corporate powers to perform and import of said phrase, they add, suggests as much. It is petitioners thesis that Bayantel was
efficiently its governmental functions. When the law vests in a government instrumentality in no time given any express exemption from the payment of real property tax under its
corporate powers, the instrumentality does not become a corporation. amendatory franchise.

2. The airport lands and buildings of MIAA are properties of public dominion intended for public There seems to be no issue as to Bayantels exemption from real estate taxes by virtue of the term
use, and as such are exempt from real property tax under Section 234(a) of the Local Government exclusive of the franchise qualifying the phrase same taxes on its real estate, buildings and
Code.

18
personal property, found in Section 14, supra, of its franchise, Rep. Act No. 3259, as originally Quezon City Government to tax is limited by Section 232 of the LGC which expressly provides that
granted. a province or city or municipality within the Metropolitan Manila Area may levy an annual ad
valorem tax on real property such as land, building, machinery, and other improvement not
The legislative intent expressed in the phrase exclusive of this franchise cannot be construed other hereinafter specifically exempted. Under this law, the Legislature highlighted its power to
than distinguishing between two (2) sets of properties, be they real or personal, owned by the thereafter exempt certain realties from the taxing power of local government units. An
franchisee, namely, interpretation denying Congress such power to exempt would reduce the phrase not hereinafter
(a) those actually, directly and exclusively used in its radio or telecommunications specifically exempted as a pure jargon, without meaning whatsoever. Needless to state, such
business, and absurd situation is unacceptable.
(b) those properties which are not so used.
For sure, in Philippine Long Distance Telephone Company, Inc. (PLDT) vs. City of Davao, this
It is worthy to note that the properties subject of the present controversy are only those which Court has upheld the power of Congress to grant exemptions over the power of local government
are admittedly falling under the first category. units to impose taxes. There, the Court wrote:

To the mind of the Court, Section 14 of Rep. Act No. 3259 effectively works to grant or delegate Indeed, the grant of taxing powers to local government units under the Constitution
to local governments of Congress inherent power to tax the franchisees properties belonging to and the LGC does not affect the power of Congress to grant exemptions to certain
the second group of properties indicated above, that is, all properties which, exclusive of this persons, pursuant to a declared national policy. The legal effect of the constitutional grant to local
franchise, are not actually and directly used in the pursuit of its franchise. governments simply means that in interpreting statutory provisions on municipal taxing powers,
doubts must be resolved in favor of municipal corporations. (Emphasis supplied.)
As may be recalled, the taxing power of local governments under both the 1935 and the 1973
Constitutions solely depended upon an enabling law. Absent such enabling law, local As we see it, then, the issue in this case no longer dwells on whether Congress has the power to
government units were without authority to impose and collect taxes on real properties within exempt Bayantels properties from realty taxes by its enactment of Rep. Act No. 7633 which
their respective territorial jurisdictions. amended Bayantels original franchise. The more decisive question turns on whether
Congress actually did exempt Bayantels properties at all by virtue of Section 11 of
While Section 14 of Rep. Act No. 3259 may be validly viewed as an implied delegation of power Rep. Act No. 7633.
to tax, the delegation under that provision, as couched, is limited to impositions over properties
of the franchisee which are not actually, directly and exclusively used in the pursuit of its franchise. Admittedly, Rep. Act No. 7633 was enacted subsequent to the LGC. Perfectly aware that the LGC
Necessarily, other properties of Bayantel directly used in the pursuit of its business are beyond has already withdrawn Bayantels former exemption from realty taxes, Congress opted to pass
the pale of the delegated taxing power of local governments. In a very real sense, therefore, real Rep. Act No. 7633 using, under Section 11 thereof, exactly the same defining phrase exclusive
properties of Bayantel, save those exclusive of its franchise, are subject to realty taxes. of this franchise which was the basis for Bayantels exemption from realty taxes prior to the
Ultimately, therefore, the inevitable result was that all realties which are actually, directly and LGC.
exclusively used in the operation of its franchise are exempted from any property tax.
In plain language, Section 11 of Rep. Act No. 7633 states that the grantee, its successors or
Bayantels franchise being national in character, the exemption thus granted under Section 14 of assigns shall be liable to pay the same taxes on their real estate, buildings and personal property,
Rep. Act No. 3259 applies to all its real or personal properties found anywhere within the Philippine exclusive of this franchise, as other persons or corporations are now or hereafter may be required
archipelago. by law to pay. The Court views this subsequent piece of legislation as an express and real
intention on the part of Congress to once again remove from the LGCs delegated
Section 14 of Rep. Act No. 3259 which was deemed impliedly repealed by Section 234 of the LGC taxing power, all of the franchisees (Bayantels) properties that are actually, directly and
was expressly revived under Section 14 of Rep. Act No. 7633. In concrete terms, the realty tax exclusively used in the pursuit of its franchise.
exemption heretofore enjoyed by Bayantel under its original franchise, but subsequently
withdrawn by force of Section 234 of the LGC, has been restored by Section 14 of Rep. Act No.
7633. 5. FELS Energy, Inc. v. Province of Batangas, G.R. No. 168557, February 16, 2007

The Court has taken stock of the fact that by virtue of Section 5, Article X of the 1987 These are two consolidated cases filed by FELS Energy, Inc. (GR No. 168557) and National Power
Constitution,local governments are empowered to levy taxes. And pursuant to this constitutional Corporation (GR No. 170628) since both petitions were dismissed on the ground of prescription.
empowerment, juxtaposed with Section 232 of the LGC, the Quezon City government enacted in
1993 its local Revenue Code, imposing real property tax on all real properties found within its FACTS:
territorial jurisdiction. And as earlier stated, the City’s Revenue Code, just like the LGC, expressly On January 18, 1993, NPC entered into a lease contract with Polar Energy, Inc. over 3x30 MW
withdrew, under Section 230 thereof, supra, all tax exemption privileges in general. diesel engine power barges moored in Batangas for five years denominated as Energy Conversion
Agreement. Its Article 10 provides:
The Quezon City Revenue Code which imposed real estate taxes on all real properties within the
citys territory and removed exemptions theretofore previously granted to, or presently enjoyed by “NAPOCOR/NPC shall be responsible for the payment of (a) all taxes, import duties,
all persons, whether natural or juridical ., there can really be no dispute that the power of the fees, charges and other levies imposed by the National Government of the Republic of the

19
Philippines or any agency or instrumentality thereof to which POLAR may be or become subject tolled. For its part, NPC posits that the 60-day period for appealing to the LBAA should be reckoned
to or in relation to the performance of their obligations under this agreement (other than (i) taxes from its receipt of the denial of its motion for reconsideration.
imposed or calculated on the basis of the net income of POLAR and Personal Income Taxes of its
employees and (ii) construction permit fees, environmental permit fees and other similar fees and LGC: SECTION 226. Local Board of Assessment Appeals. – Any owner or person having
charges) and (b) all real estate taxes and assessments, rates and other charges in respect of the legal interest in the property who is not satisfied with the action of the provincial, city or municipal
Power Barges.” 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
Polar assigned its rights to FELS which was initially opposed by NPC. 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.
In 1995, FELS received real property tax assessment on the power barges from Batangas
Provincial Assessor amounting to P56, 184, 088.40 per annum. FELS referred it to NPC to remind The notice of assessment sent to FELS provided that from receipt, it may within 60 days appeal
of its obligation to pay the taxes and gave NPC full power and authority to represent it in any to the Board of Assessment Appeals of the province through a petition but instead of appealing,
conference NPC opted to file a Motion for Reconsideration of assessor’s decision which is a remedy not
sanctioned by law.
NPC sought reconsideration of the assessor’s decision to asses the taxes but was denied and it
was advised to pay. Thus, NPC filed a petition with the Local Board of Assessment Appeals (LBAA) The remedy of appeal to the LBAA is available from an adverse ruling or action of the provincial,
contending that the barges were non-taxable items. Prov’l Assessor averred that the barges were city or municipal assessor in the assessment of the property. It follows then that the determination
real property for purposes of taxation. Pending decision, Department of Finance rendered an made by the respondent Provincial Assessor with regard to the taxability of the subject real
opinion that power barges are not real property subject to real property assessment. properties falls within its power to assess properties for taxation purposes subject to appeal before
the LBAA
LBAA denied the petition and ordered FELS to pay ruling that the power plant facilities, while they
may be classified as movable or personal property, are nevertheless considered real property for Under Section 226, the last action of the local assessor on a particular assessment shall be the
taxation purposes because they are installed at a specific location with a character of permanency notice of assessment; it is this last action which gives the owner of the property the right to appeal
and that it was private corp FELS that was being taxed and not NPC since privilege is only granted to the LBAA. The procedure likewise does not permit the property owner the remedy of filing a
to the latter and not to the former. Also, petition was ruled to have been filed out of time. motion for reconsideration before the local assessor. Hence, whenever the local assessor sends a
notice to the owner or lawful possessor of real property of its revised assessed value, the former
FELS appealed to the Central Board of Assessment Appeals (CBAA). shall 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
In 1996, Batangas City Provincial Treasurer issued a Notice of Levy and Warrant by Distraint over law. It follows ineluctably that the 60-day period for making the appeal to the LBAA runs without
the power barges, seeking to collect real property taxes officially served to FELS. It then filed a interruption
Motion to Lift Levy and for CBAA to restrain Assessor from enforcing disputed assessment pending
appeal. CBAA rendered a decision finding the power barges exempt from real property tax since If the taxpayer fails to appeal in due course, the right of the local government to collect the taxes
these belong to NPC and as such covered by exemptions. Also, prescription did not preclude NPC due with respect to the taxpayer’s property becomes absolute upon the expiration of the period
from pursuing its claim for tax exemption. However, real property tax assessment on FELS was to appeal. It also bears stressing that the taxpayer’s failure to question the assessment in the
affirmed. LBAA renders the assessment of the local assessor final, executory and demandable, thus,
precluding the taxpayer from questioning the correctness of the assessment, or from invoking any
Upon separate appeals by FELS and NPC, CA ruled that the right to question the assessment of defense that would reopen the question of its liability on the merits
the Provincial Assessor had already prescribed upon the failure of FELS to appeal the disputed
assessment to the LBAA within the period prescribed by law. Since FELS had lost the right to LBAA acted correctly when it dismissed the petitioners’ appeal for having been filed out of time;
question the assessment, the right of the Provincial Government to collect the tax was already the CBAA and the appellate court were likewise correct in affirming the dismissal.
absolute.
With regard to FELS’ argument that assessor is completely misplaced as it is not a party to the
ISSUES: petition NPC filed, SC disagreed since FELS gave NPC full power and authority to represent it in
1. Whether or not the appeals filed before the LBAA have prescribed any proceeding on real property assessment so the court decision on NPC’s petition binds it by
2. Whether or not the power barges were real properties subject to real property tax virtue of res judicata which strongly indicates forum shopping since FELS and NPC filed separate
petitions.
RULING:
1. Prescription 2. Nature of Power Barges

SC finds the petitions of FELS and NPC maintaining that the appeal before the LBAA was not time- The power barges are real property and are thus subject to real property tax.
barred was bereft of merit. FELS argues that when NPC moved to have the assessment
reconsidered on September 7, 1995, the running of the period to file an appeal with the LBAA was

20
Tax assessments by tax examiners are presumed correct and made in good faith, with the The LBAA denied NAPOCORs petition for exemption in a Decision dated October 26, 2001. It ruled
taxpayer having the burden of proving otherwise. Besides, factual findings of administrative that the exemption provided by Section 234(c) of the LGC applies only when a government-owned
bodies, which have acquired expertise in their field, are generally binding and conclusive upon the or controlled corporation like NAPOCOR owns and/or actually uses machineries and equipment for
SC. the generation and transmission of electric power; in this case, NAPOCOR does not own and does
not even actually and directly use the machineries. It is the BPPC, a non-government entity, which
Article 415 (9) of the New Civil Code provides that "[d]ocks and structures which, though floating, owns, maintains, and operates the machineries and equipment; using these, it generates
are intended by their nature and object to remain at a fixed place on a river, lake, or coast" are electricity and then sells this to NAPOCOR. Additionally, it ruled that the liability for the payment
considered immovable property. Thus, power barges are categorized as immovable property by of the real estate taxes is determined by law and not by the agreement of the parties; hence, the
destination, being in the nature of machinery and other implements intended by the owner for an provision in the BOT Agreement whereby NAPOCOR assumed responsibility for the payment of all
industry or work which may be carried on in a building or on a piece of land and which tend real estate taxes and assessments, rates, and other charges, in relation with the site, buildings,
directly to meet the needs of said industry or work. and improvements in the BOT project, is an arrangement between the parties that cannot be the
basis in identifying who is liable to the government for the real estate tax.
Also, it isn’t correct to say that the barges are exempt for these are actually, directly, and
exclusively used by NPC which is a GOCC. It is actually FELS which own the barges after it was ISSUE/S:
assigned by Polar. Notably, it is FELS which is being taxed as it is not exempt from tax. What are the real property tax implications of a Build-Operate-Transfer (BOT) agreement between
a government-owned and controlled corporation (GOCC) that enjoys tax exemption and a private
The right of local government units to collect taxes due must always be upheld to avoid severe corporation? Specifically, under the terms of the BOT Agreement, can the GOCC be deemed the
tax erosion. This consideration is consistent with the State policy to guarantee the autonomy of actual, direct, and exclusive user of machineries and equipment for tax exemption purposes? If
local governments and the objective of the Local Government Code that they enjoy genuine and not, can it pass on its tax-exempt status to its BOT partner, a private corporation, through the
meaningful local autonomy to empower them to achieve their fullest development as self-reliant BOT agreement?
communities and make them effective partners in the attainment of national goals.
RULING:
The power to tax is the most potent instrument to raise the needed revenues to finance NAPOCOR denied.
and support myriad activities of the local government units for the delivery of basic services
essential to the promotion of the general welfare and the enhancement of peace, progress, and Exempt from real property taxation are:
prosperity of the people (a) All machineries and equipment;
(b) That are actually, directly, and exclusively used by;
(c) Local water districts and government-owned or controlled corporations engaged in
6. NPC vs. Central Board of Assessment Appeals, GR No. 171470, January 30, 2009 the supply and distribution of water and/or generation and transmission of electric power.

FACTS:
First Private Power Corporation (FPPC) entered into a Build-Operate-Transfer (BOT) agreement The records show that NAPOCOR, no less, admits BPPCs ownership of the machineries and
with NAPOCOR for the construction of the 215 Megawatt Bauang Diesel Power Plant. The BOT equipment in the power plant. Likewise, the provisions of the BOT agreement cited above clearly
Agreement provided, via an Accession Undertaking, for the creation of the Bauang Private Power show BPPCs ownership. Thus, ownership is not a disputed issue.
Corporation (BPPC) that will own, manage and operate the power plant/station, and assume
and perform FPPCs obligations under the BOT agreement. For a fee, BPPC will convert NAPOCORs Rather than ownership, NAPOCORs use of the machineries and equipment is the critical issue,
supplied diesel fuel into electricity and deliver the product to NAPOCOR. since its claim under Sec. 234 (c) of the LGC is premised on actual, direct and exclusive use. To
support this claim, NAPOCOR characterizes the BOT Agreement as a mere financing agreement
The Officer-in-Charge of the Municipal Assessors Office of Bauang, La Union initially issued where BPPC is the financier, while it (NAPOCOR) is the actual user of the properties.
Declaration of Real Property Nos. 25016 and 25022 to 25029 declaring BPPCs machineries and
equipment as tax-exempt. On the initiative of the Bauang Vice Mayor, the municipality questioned A reading of the provisions of the parties BOT Agreement shows that it fully conforms to this
before the Regional Director of the Bureau of Local Government Finance (BLGF) the declared tax concept. By its express terms, BPPC has complete ownership both legal and beneficial of the
exemption; later, the issue was elevated to the Deputy Executive Director and Officer-in-Charge project, including the machineries and equipment used, subject only to the transfer of these
of the BLGF, Department of Finance, who ruled that BPPCs machineries and equipment are subject properties without cost to NAPOCOR after the lapse of the period agreed upon. As agreed upon,
to real property tax and directed the Assessor’s Office to take appropriate action. BPPC provided the funds for the construction of the power plant, including the machineries and
equipment needed for power generation; thereafter, it actually operated and still operates the
NAPOCOR filed a petition and asked that, retroactive to 1995, the machineries covered by the tax power plant, uses its machineries and equipment, and receives payment for these activities and
declarations be exempt from real property tax under Section 234(c) of Republic Act No. 7160 (the the electricity generated under a defined compensation scheme. Notably, BPPC as owner-user is
Local Government Code or LGC); and, that these properties be dropped from the assessment roll responsible for any defect in the machineries and equipment.
pursuant to Section 206 of the LGC.
Consistent with the BOT concept and as implemented, BPPC the owner-manager-operator of the
project is the actual user of its machineries and equipment. BPPCs ownership and use of the

21
machineries and equipment are actual, direct, and immediate, while NAPOCORs is contingent and, NPC objected to the assessment against Mirant on the claim that it (the NPC) is entitled to the tax
at this stage of the BOT Agreement, not sufficient to support its claim for tax exemption. Thus, exemptions provided in Section 234, paragraphs (c) and (e) of the LGC.
the CTA committed no reversible error in denying NAPOCORs claim for tax exemption.
NPC's claim for exemption was denied.
2. NAPOCOR argues that if no tax exemption will be recognized, the responsibility it assumed
carries practical implications that are very difficult to ignore. In fact, NAPOCORs supplemental ISSUE:
petition is anchored on these practical implications the alleged detriment to the public interest Whether the National Power Corporation (NPC), as a government-owned and controlled
that will result if the levy, sale, and transfer of the machineries and equipment were to be corporation, can claim tax exemption under Section 234 of the Local Government Code (LGC) for
completed. NAPOCORs reference is to the fact that the machineries and equipment have been the taxes due from the Mirant Pagbilao Corporation (Mirant) whose tax liabilities the NPC has
sold in public auction and the buyer the respondent Province will consolidate its ownership over contractually assumed.
these properties on February 1, 2009.
RULING:
We fully recognize these concerns. However, these considerations are not relevant to our A person legally burdened with the obligation to pay for the tax imposed on a property has legal
disposition of the issues in this case. We are faced here with the application of clear provisions of interest in the property and the personality to protest a tax assessment on the property.
law and settled jurisprudence to a case that, to our mind, should not be treated differently solely
because of non-legal or practical considerations. Significantly, local government real property The liability for taxes generally rests on the owner of the real property at the time the tax accrues.
taxation also has constitutional underpinnings, based on Section 5 of Article X of the This is a necessary consequence that proceeds from the fact of ownership. However, personal
Constitution, that we cannot simply ignore. liability for realty taxes may also expressly rest on the entity with the beneficial use of the real
property, such as the tax on property owned by the government but leased to private persons or
The right of local government units to collect taxes due must always be upheld to entities, or when the tax assessment is made on the basis of the actual use of the property. In
avoid severe tax erosion. This consideration is consistent with the State policy to either case, the unpaid realty tax attaches to the property but is directly chargeable against the
guarantee the autonomy of local governments and the objective of the Local taxable person who has actual and beneficial use and possession of the property regardless of
Government Code that they enjoy genuine and meaningful local autonomy to whether or not that person is the owner.
empower them to achieve their fullest development as self-reliant communities and
make them effective partners in the attainment of national goals. The NPCs contractual liability alone cannot be the basis for the enforcement of tax liabilities
In conclusion, we reiterate that the power to tax is the most potent instrument to raise against it by the local government unit. The NPC is neither the owner, nor the possessor or user
the needed revenues to finance and support myriad activities of the local government of the property taxed. No interest on its part thus justifies any tax liability on its part other than
units for the delivery of basic services essential to the promotion of the general its voluntary contractual undertaking. Under this legal situation, only Mirant as the contractual
welfare and the enhancement of peace, progress, and prosperity of the people. obligor, not the local government unit, can enforce the tax liability that the NPC contractually
assumed; the NPC does not have the legal interest that the law and jurisprudence require to give
it personality to protest the tax imposed by law on Mirant.

7. NPC v. Quezon Power, G.R. No. 171586, July 15, 2009 NPCs claim of tax exemptions is completely without merit. To successfully claim exemption under
Section 234(c) of the LGC, the claimant must prove two elements:
FACTS:
NPC entered into an Energy Conversion Agreement (ECA) with Mirant. The ECA provided for a a. the machineries and equipment are actually, directly, and exclusively used by local
build-operate-transfer (BOT) arrangement between Mirant and the NPC. Mirant will build and water districts and government-owned or controlled corporations; and
finance a coal-fired thermal power plant on the lots owned by the NPC in Pagbilao, Quezon for b. the local water districts and government-owned and controlled corporations
the purpose of converting fuel into electricity, and thereafter, operate and maintain the power claiming exemption must be engaged in the supply and distribution of water and/or the
plant for a period of 25 years. The NPC, in turn, will supply the necessary fuel to be converted by generation and transmission of electric power.
Mirant into electric power, take the power generated, and use it to supply the electric power needs
of the country. At the end of the 25-year term, Mirant will transfer the power plant to the NPC The government-owned or controlled corporation claiming exemption must be the entity actually,
without compensation. According to the NPC, the power plant is currently operational and is one directly, and exclusively using the real properties, and the use must be devoted to the generation
of the largest sources of electric power in the country. and transmission of electric power. Neither the NPC nor Mirant satisfies both requirements.
Although the plants machineries are devoted to the generation of electric power, by the NPCs own
Among the obligations undertaken by the NPC under the ECA was the payment of all taxes that admission and as previously pointed out, Mirant a private corporation uses and operates them.
the government may impose on Mirant. That Mirant operates the machineries solely in compliance with the will of the NPC only
underscores the fact that NPC does not actually, directly, and exclusively use them. The
The Municipality of Pagbilao assessed Mirants real property taxes on the power plant and its machineries must be actually, directly, and exclusively used by the government-owned or
machineries in the total amount of P1,538,076,000.00 for the period of 1997 to 2000. The controlled corporation for the exemption under Section 234(c) to apply.
Municipality of Pagbilao furnished the NPC a copy of the assessment letter.

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Nor will NPC find solace in its claim that it utilizes all the power plants generated electricity in COURT OF TAX APPEALS
supplying the power needs of its customers. Based on the clear wording of the law, it is the
machineries that are exempted from the payment of real property tax, not the water or electricity 1. Duty Free vs CIR
that these machineries generate and distribute.

Even the NPCs claim of beneficial ownership is unavailing. The test of exemption is the use, not FACTS:
the ownership of the machineries devoted to generation and transmission of electric power. The
nature of the NPCs ownership of these machineries only finds materiality in resolving the NPCs Duty Free wanted to claim refund of taxes that it paid. It argued that as a tax-exempt
claim of legal interest in protesting the tax assessment on Mirant. As we discussed above, this establishment under E.O. No. 46, it should not be subjected to the 1.1/2% expanded
claim is inexistent for tax protest purposes. withholding taxes on certain income payments that were withheld by credit card companies in
compliance with R.R. No. 6-94.

However, BIR opined that E.O. No. 93 dated 17 December 1986 withdrew all the tax and duty
incentives granted to government and public entities, including petitioner. Hence, respondent
denied the request of petitioner for a refund of the withholding tax on certain payments made
by credit card companies and remitted to the BIR.

The case then reached the CTA Special First Division and was then directly appealed by Duty
Free to the Supreme Court under Rule 45 of the Rules of Court.

ISSUE:

Is the mode of appeal of Duty Free proper?

RULING:

No. The petition is dismissed due to a procedural infirmity.

Clearly, this Court is without jurisdiction to review decisions rendered by a division of the CTA,
exclusive appellate jurisdiction over which is vested in the CTA en banc.

In this case, petitioner filed with this Court on 29 July 2011 the instant Petition from the denial
of its Motion for Reconsideration by the Special First Division of the CTA. At that time, R.A. 9282
was already in effect, and it evidently provides that the CTA en banc shall have exclusive
jurisdiction over appeals from the decision of its divisions. A party adversely affected by the
resolution of the CTA division may, on motion for reconsideration, file a petition for review with
the CTA en banc. Thereafter, the decision or ruling of the CTA en bancmay be elevated to this
Court.

Simply stated, no decision of the CTA division may be elevated to this Court under Rule 45 of
the 1997 Rules of Civil Procedure without passing through the CTA en banc.

In sum, this Court has no jurisdiction to review the Decision and Resolution rendered by the
Special First Division of the CTA. Thus, the instant Petition must fail.

2. The City of Manila, etc. et al. v. Hon. Caridad H. Grecia-Cuerdo etc., et al, G.R. No.
175723. February 4, 2014.

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On 30 July 2003, the Municipality passed Ordinance No. 18, series of 2003, entitled "An Ordinance
FACTS: Regulating the Establishment of Special Projects."
Petitioner City of Manila, through its treasurer, petitioner Liberty Toledo, assessed taxes for the
taxable period from January to December 2002 against the private respondents. In addition to On 24 August 2004, Smart received from the Permit and Licensing Division of the Office of the
the taxes purportedly due from private respondents pursuant to Section 14, 15, 16, 17 of the Mayor of the Municipality an assessment letter with a schedule of payment for the total amount
Revised Revenue Code of Manila (RRCM), said assessment covered the local business taxes. of P389,950.00 for Smart's telecommunications tower. Due to the alleged arrears in the payment
Private respondents were constrained to pay the P 19,316,458.77 assessment under protest. of the assessment, the Municipality also caused the posting of a closure notice on the
telecommunications tower.
On January 24, 2004, private respondents filed before the RTC of Pasay City the complaint
denominated as one for “Refund or Recovery of Illegally and/or Erroneously–Collected Local On 9 September 2004, Smart filed a protest, claiming lack of due process in the issuance of the
Business Tax, Prohibition with Prayer to Issue TRO and Writ of Preliminary Injunction. The RTC assessment and closure notice. In the same protest, Smart challenged the validity of Ordinance
granted private respondents’ application for a writ of preliminary injunction. No. 18 on which the assessment was based. On 17 November 2004, Smart filed with RTC of
Batangas, an "Appeal/Petition" assailing the validity of Ordinance No. 18.
Petitioners filed a Motion for Reconsideration but the RTC denied. Petitioners then filed a special
civil action for certiorari with the CA but the CA dismissed petitioners’ petition for certiorari holding ISSUES:
that it has no jurisdiction over the said petition. The CA ruled that since appellate jurisdiction over 1. Whether the CTA has jurisdiction over the present case
private respondents’ complaint for tax refund, which was filed with the RTC, is vested in the Court 2. Whether the imposition of the fees in Ordinance No. 18 is ultra vires
of Tax Appeals (CTA), pursuant to its expanded jurisdiction under Republic Act No. 9282 (RA
9282), it follows that a petition for certiorari seeking nullification of an interlocutory order issued RULING:
in the said case should, likewise, be filed with the CTA. Petitioners filed a Motion for On whether the CTA has jurisdiction over the present case
Reconsideration but the CA denied it in its Resolution hence, this petition
Smart contends that the CTA erred in dismissing the case for lack of jurisdiction. Smart maintains
ISSUE: that the CTA has jurisdiction over the present case considering the "unique" factual circumstances
Whether or not the CTA has jurisdiction over a special civil action for certiorari assailing an involved. The CTA refuses to take cognizance of this case since it challenges the constitutionality
interlocutory order issued by the RTC in a local tax case. of Ordinance No. 18, which is outside the province of the CTA.

HELD: Jurisdiction is conferred by law. Republic Act No. 1125, as amended by Republic Act No. 9282,
The CTA has jurisdiction over a special civil action for certiorari assailing an interlocutory order created the Court of Tax Appeals. Section 7, paragraph (a), sub-paragraph (3) 15 of the law
issued by the RTC in a local tax case. In order for any appellate court to effectively exercise its vests the CTA with the exclusive appellate jurisdiction over "decisions, orders or
appellate jurisdiction, it must have the authority to issue, among others, a writ of certiorari. In resolutions of the Regional Trial Courts in local tax cases originally decided or resolved
transferring exclusive jurisdiction over appealed tax cases to the CTA, it can reasonably be by them in the exercise of their original or appellate jurisdiction."
assumed that the law intended to transfer also such power as is deemed necessary, if not
indispensable, in aid of such appellate jurisdiction. There is no perceivable reason why the transfer The question now is whether the trial court resolved a local tax case in order to fall within the
should only be considered as partial, not total. ambit of the CTA's appellate jurisdiction. This question, in turn, depends ultimately on whether
the fees imposed under Ordinance No. 18 are in fact taxes.
Consistent with the above pronouncement, the Court has held as early as the case of J.M. Tuason
& Co., Inc. v. Jaramillo, et al. [118 Phil. 1022 (1963)] that “if a case may be appealed to a The fees imposed in Ordinance No. 18 are not taxes.
particular court or judicial tribunal or body, then said court or judicial tribunal or body has
jurisdiction to issue the extraordinary writ of certiorari, in aid of its appellate jurisdiction.” This Since the main purpose of Ordinance No. 18 is to regulate certain construction activities of the
principle was affirmed in De Jesus v. Court of Appeals where the Court stated that “a court may identified special projects, which included "cell sites" or telecommunications towers, the fees
issue a writ of certiorari in aid of its appellate jurisdiction if said court has jurisdiction to review, imposed in Ordinance No. 18 are primarily regulatory in nature, and not primarily revenue-raising.
by appeal or writ of error, the final orders or decisions of the lower court. While the fees may contribute to the revenues of the Municipality, this effect is merely incidental.
In Progressive Development Corporation v. Quezon City, the Court declared that "if the
generating of revenue is the primary purpose and regulation is merely incidental, the
3. Smart Communications, Inc. v. Municipality of Malvar, Batangas, G.R. No. 20442. imposition is a tax; but if regulation is the primary purpose, the fact that incidentally
February 18, 2014. revenue is also obtained does not make the imposition a tax."

FACTS: In Victorias Milling Co., Inc. v. Municipality of Victorias, the Court reiterated that the purpose and
Smart constructed a telecommunications tower within the territorial jurisdiction of the Municipality. effect of the imposition determine whether it is a tax or a fee, and that the lack of any standards
The construction of the tower was for the purpose of receiving and transmitting cellular for such imposition gives the presumption that the same is a tax.
communications within the covered area.

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Contrary to Smart's contention, Ordinance No. 18 expressly provides for the standards which Nov. 22, 2001 – filed an amended Quarterly VAT Return for same quarter of 2001 where Toledo
Smart must satisfy prior to the issuance of the specified permits, clearly indicating that the fees claims that it has unutilized input VAT in the amount of P5.9M
are regulatory in nature.
Jan. 25, 2002 – filed Quarterly VAT Return for 4th quarter of 2001 where Toledo claims unutilized
On whether the imposition of the fees in Ordinance No. 18 is ultra vires input VAT of P3.2M

Smart argues that the Municipality exceeded its power to impose taxes and fees as provided in The unutilized input VAT were incurred and accumulated from its domestic purchase of goods and
Book II, Title One, Chapter 2, Article II of the LGC. Smart maintains that the mayor's permit fees services, which are all attributable to its zero-rated sales of power generation services to those
in Ordinance No. 18 (equivalent to 1% of the project cost) are not among those expressly enumerated (NPC, CEBECO, etc.), and was not utilized against any output VAT liability nor carried
enumerated in the LGC. over.

As discussed, the fees in Ordinance No. 18 are not taxes. Logically, the imposition does not appear Sep. 30, 2003 –Toledo filed with BIR an administrative claim for refund or unutilized input VAT
in the enumeration of taxes under Section 143 of the LGC. Moreover, even if the fees do not for 3rd and 4th quarters
appear in Section 143 or any other provision in the LGC, the Municipality is empowered to impose
taxes, fees and charges, not specifically enumerated in the LGC or taxed under the Tax Code or Oct. 24, 2003 – Since CIR has not ruled upon the administrative claim and in order to preserve
other applicable law. Section 186 of the LGC, granting local government units wide its right to file judicial claim, Toledo filed a Petition for Review for 3rd quarter
latitude in imposing fees, expressly provides:
Jan. 22, 2004 – Filed another Petition for Review for 4th quarter
Section 186. Power to Levy Other Taxes, Fees or Charges. — Local government units
may exercise the power to levy taxes, fees or charges on any base or subject not CIR failed to file memorandum within period given by Court. CTA First Division partially granted
otherwise specifically enumerated herein or taxed under the provisions of the Toledo’s refund claim and declared that it is entitled to P8.5M refund or tax credit.
National Internal Revenue Code, as amended, or other applicable laws: Provided, That
the taxes, fees, or charges shall not be unjust, excessive, oppressive, confiscatory or contrary to CIR filed MR but it was denied. On appeal to CTA En Banc, CIR argued that Toledo failed to comply
declared national policy: Provided, further; That the ordinance levying such taxes, fees or charges with invoicing requirements to prove entitlement to refund or issuance of tax credit cert. He also
shall not be enacted without any prior public hearing conducted for the purpose. challenged jurisdiction of CTA First Division to entertain Toledo’s petition for review for failure to
comply with provisions of Sec. 112 (C) of Tax Code.
Smart further argues that the Municipality is encroaching on the regulatory powers of the National
Telecommunications Commission (NTC). To repeat, Ordinance No. 18 aims to regulate the CTA En Banc affirmed decision with modification, lowering amount. It also denied CIR’s MR.
"placing, stringing, attaching, installing, repair and construction of all gas mains, electric, telegraph Hence, present petition.
and telephone wires, conduits, meters and other apparatus" within the Municipality. The fees are
not imposed to regulate the administrative, technical, financial, or marketing operations of ISSUES:
telecommunications entities, such as Smart's; rather, to regulate the installation and maintenance
of physical structures — Smart's cell sites or telecommunications tower. The regulation of the I. Whether Toledo complied with 120+30 day rule under Sec. 112 (C) of Tax Code
installation and maintenance of such physical structures is an exercise of the police II. Whether Toledo sufficiently complied with invoicing requirements
power of the Municipality. Clearly, the Municipality does not encroach on NTC's
regulatory powers. RULING:
Doctrine on CTA (topic where case was assigned)
The Court likewise rejects Smart's contention that the power to fix the fees for the issuance of
development permits and locational clearances is exercised by the Housing and Land Use Court will not lightly set aside conclusions reached by CTA which, by the very nature of its function
Regulatory Board (HLURB). Suffice it to state that the HLURB itself recognizes the local of being dedicated exclusively to resolution of tax problems, has accordingly developed an
government units' power to collect fees related to land use and development. expertise on the subject, unless there has been an abuse or improvident exercise of authority.

Court accords findings of fact by CTA with highest respect. Its factual findings can only be
4. CIR v. Toledo, Power, Inc., G.R. No. 183880, January 20, 2014. disturbed on appeal if they are supported by substantial evidence or there is a showing of gross
error or abuse on the part of Tax Court. Absence of clear and convincing proof to the contrary,
FACTS: Court must presume that CTA rendered decision which is valid in every respect.
Toledo Power, Inc. is engaged in the business of power generation and subsequent sale thereof
to NPC, CEBECO, Atlas Mining and Atlas Fertilizer, and is registered with BIR as VAT taxpayer. On issues raised

Oct. 25, 2001 – Toledo filed with BIR RDO No. 83, its Quarterly VAT Return for 3rd quarter of 2001 I. The judicial claim for 3rd quarter was filed prematurely, hence, cannot be entertained.
However, the judicial claim for 4th quarter falls under the exception since it was filed within
Dec. 10, 2003 – Oct. 6, 2010, therefore, can be entertained.

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Compliance with 120+30 day rule under Section 112 is mandatory and jurisdictional.

Sec. 112 decrees that a VAT-registered person, whose sales are zero-rated or effectively zero-
rated, may apply for issuance of tax credit or refund creditable input tax due or paid attributable
to such sales within 2 years after the close of the taxable quarter when the sales were made.
From the date of submission of complete documents, CIR has 120 days to decide whether or not
to grant the claim for refund or issuance of tax credit certificate.

In case of full or partial denial of claim, or failure of CIR to act on application within given period,
taxpayer may, within 30 days from receipt of adverse decision or after expiration of 120 days,
appeal with CTA the decision or inaction of CIR.

If not followed, CTA will have no jurisdiction because there will be no “decision” or “deemed a
denial” decision of CIR for CTA to review.

Summary of rules:

1) An administrative claim must be filed with CIR within 2 years after the close of the
taxable quarter when the zero-rated or effectively zero-rated sales were made.
2) CIR has 120 days from date of submission of complete documents in support of
administrative claim within which to decide whether to grant a refund or issue a tax
credit certificate. The claim is filed in the later part of the 2-year period. If the 120-day
period expires without any decision from CIR, then administrative claim may be
considered to be denied by inaction.
3) Judicial claim must be filed with CTA within 30 days from receipt of CIR’s decision
denying administrative claim or from the expiration of 120-day period without any action
from CIR.
4) However, all taxpayers can rely on BIR Ruling No. DA-489-03 from the time of its
issuance on Dec. 10, 2003 up to its reversal by this Court in Aichi on Oct. 6, 2010, as
an exception to the mandatory and jurisdictional 120+30 day periods.

In this case, Toledo filed admin claim on Sep. 30, 2003. CIR had 120 days or until Jan.
28, 2004 within which to decide on the claim but Toledo filed judicial claims on Oct. 24,
2003 for 3rd quarter and Jan. 22, 2004 for 4th quarter. Therefore, the judicial claims
were filed prematurely.

However, the judicial claim for 4th quarter can be entertained following the ruling in San
Roque case where Court said that compliance with 120+30 is not necessary when
judicial claims are filed between Dec. 10, 2003 to Oct. 6, 2010.

II. Toledo complied with invoicing requirements. Although words “zero-rated” were
merely stamped and not pre-printed, the same is sufficient compliance since the
imprinting of the word was required merely to distinguish sales subject to 10%
VAT, those that are subject to 0% VAT and exempt sales, to enable BIR to properly
implement and enforce the other VAT provisions of Tax Code.

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