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Taxation II Prof.MovidoA2010

DONOR’S TAX

I. Definition/Nature

LLADOC V. COMMISSIONERGR L-19201PAREDES; June 16, 1965

chris

FACTS- MB Estate Inc. of Bacolod City, donated P10000 incash to Rev. Fr. Ruiz, parish priest of NegrosOccidental, predecessor of petitioner, for constructionof new Catholic Church. Total amount was actuallyspent for purpose intended.- Donor filed donor's gift tax return. CIR issuedassessment for donee's gift tax against Catholic Parishof Victorias, Negros Occidental, of w/c petitioner was

priest. Tax amounted to P1,370 incl surcharges,interests of 1% monthly fr May 15, 1958 to June 15,1960, and compromise for late filing of return.- Petitioner lodged protest to assessment & requestedw/drawal thereof. Protest & MFR were denied.Petitioner appealed to CTA. In petition for review,Lladoc claimed that at the time of donation, he wasn’tthe parish priest in Victorias; that there’s no legalentity / juridical person known as "Catholic ParishPriest of Victorias," and, therefore, he shouldn’t beliable for donee's gift tax. It was also asserted thatassessment of gift tax, even against Roman CatholicChurch, wouldn’t be valid, for such would be violationof Constitution.- CTA affirmed decision of Commissioner.

ISSUEWON Lladoc shld be liable for assessed donee’s gift tax

HELD YES- Sec 22(3), AVI of Consti exempts fr taxationcemeteries, churches and parsonages or convents,appurtenant thereto, and all lands, buildings, andimprovements used exclusively for religious purposes.

The exemption is only from payment of taxes assessedon such properties, as property taxes, as contradistinguished fr excise taxes. In the present case,what Collector assessed was donee's gift tax; the

assessment was not on the properties themselves. Itdidn’t rest upon general ownership; it was an exciseupon use made of the properties, upon exercise of privilege of rcvng properties. Gift tax isn’t w/inexempting provisions of the section.- A gift tax isn’t a property tax, but an excise taximposed on transfer of property by way of giftinter vivos, the imposition of which on property usedexclusively for religious purposes, does not constitutean impairment of the Constitution.- The phrase "exempt from taxation," shouldn’t beinterpreted to mean exemption from all kinds of taxes.And there being no clear, positive or express grant of such privilege by law, in favor of petitioner, exemptionmust be denied.

BIR RULING NO. 029-01

II. Transfer Subject To Donor’s Tax

PIROVANO V. COMMISSIONER

G.R. No. L-19865REYES, J.B.L./ July 31, 1965

Del

FACTS:-De la Rama Steamship Co. insured the life of said EnricoPirovano, who was then its President and General Manager until the time of his death, with various Philippine andAmerican insurance companies for a total sum of 1M pesos,designating itself as the beneficiary of the policies, obtained byit.-Due to the Japanese occupation of the Philippines duringWWII, the Company was unable to pay the premiums on thepolicies issued by its Philippine insurers and these policieslapsed, while the policies issued by its American insurers werekept effective and subsisting, the New York office of theCompany having continued paying its premiums from year toyear.-During the Japanese occupation, or more particularly in thelatter part of 1944, Pirovano died.-After the liberation of the Philippines from the Japaneseforces, the Board of Directors of De la Rama Steamship Co.adopted a resolution dated July 10, 1946 granting and settingaside, out of the proceeds expected to be collected on theinsurance policies, the sum of P400k for equal division amongthe 4 minor children of Enrico, said sum of money to beconvertible into 4,000 shares of stock of the Company, at par,or 1,000 shares for each child.

-Shortly thereafter, the Company modified the resolution uponreceipt of the total sum of P643k as proceeds of the said lifeinsurance policies obtained from American insurers. Said sumplus interest was then given to the minor children of thedeceased, subject to the express condition that said amountshould be retained by the Company in the nature of a loan toit, payable to the Pirovano children after the Company shallhave first settled in full the balance of its present remainingbonded indebtedness in the sum of approximately P5M.-Mrs. Pirovano, in behalf of her children, executed a publicdocument formally accepting the donation. (The Company tooknote of this acceptance.)-However, the majority stockholders of the Company voted torevoke the resolution approving the donation in favor of thePirovano children.-As a consequence of this revocation and refusal of theCompany to pay the balance of the donation despite demandstherefor, the petitioners brought an action for the recovery of said amount, plus interest and damages against De la RamaSteamship Co., in the CFI of Rizal, which case ultimatelyculminated to an appeal to this Court.-SC rendered its decision (w/c became final and executory) in

the appealed case holding that the donation was valid andremunerative in nature.- De la Rama Steamship Co. made a partial payment on theamount of the judgment and paid the balance thereof.-Commissioner assessed the amount of P60,869.67 asdonees' gift tax, inclusive of surcharges, interests and other penalties, against each of the petitioners-appellants, or for thetotal sum of P243,478.68; and a donor's gift tax in the totalamount of P34,371.76 was also assessed against De la RamaSteamship Co., which the latter paid.-Petitioners-appellants herein contested the Commissioner'sassessment and imposition of the donees' gift taxes anddonor's gift tax and also made a claim for refund of the donor'sgift tax so collected. Commissioner overruled petitioners'claims.

-Pirovanos went to the CTA to dispute the legality of theassessment of donees' gift taxes and donor's gift tax and toclaim for refund of the donor's gift tax already paid.-CTA ordered a refund of the donor’ s gift tax but found thedonees’ gift taxes were correctly assessed.-Pirovanos filed a MR, which the lower court denied. Hence,this appeal.

ISSUE: WON the Pirovanos should pay the donees' gift taxes(b’coz they alleged that the sum involved herein was inpayment of their father’s past services TF not a donation.)

HELD: Yes.

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Ratio: Without proof of donative intent, application of thedonor’s tax on the difference between the fair market valueand the selling price of the shares sold has no basis.

-There is nothing on record to show that when the late EnricoPirovano rendered services as President and GeneralManager of the De la Rama Steamship Co. he was not fullycompensated for such services. The fact that his servicescontributed in a large measure to the success of the companydid not give rise to a recoverable debt, and the conveyancesmade by the company to his heirs remain a gift or donation.The true consideration for the donation was, therefore, thecompany's gratitude for his services, and not the servicesthemselves.-CTA regarded the conveyance as a simple donation; whether remuneratory or simple, the conveyance remained a gift,taxable under IRC.-Pirovano's successful activities as officer of the De la RamaSteamship Co. cannot be deemed such consideration for thegift to his heirs, since the services were rendered long beforethe Company ceded the value of the life policies to said heirs;cession and services were not the result of one bargain or of a

mutual exchange of promises.-Anglo-American law treats a subsequent promise to pay for past services (like one to pay for improvements already madewithout prior request from the promisor) to be a nudum pactumi.e., one that is unenforceable in view of the common law rulethat consideration must consist in a legal benefit to thepromisee or some legal detriment to the promisor.-What is more, the actual consideration for the cession of thepolicies was the Company's gratitude to Pirovano; so thatunder section 111 of the Code there is no consideration thevalue of which can be deducted from that of the propertytransferred as a gift. Like "love and affection," gratitude has noeconomic value and is not "consideration" in the sense that theword is used in this section of the Tax Code.-It is of course perfectly possible that a donation or gift should

at the same time impose a burden or condition on the doneeinvolving some economic liability for him. A, for example, maydonate a parcel of land to B on condition that the latter assumea mortgage existing on the donated land. In this case thedonee may rightfully insist that the gift tax be computed onlyon the value of the land less the value of the mortgage. This, infact, is contemplated by Article 619 of the Civil Code of 1889(Art. 726 of the Tax Code) when it provides that there is also adonation "when the gift imposes upon the donee a burdenwhich is less than the value of the thing given." Section 111 of the Tax Code has in view situations of this kind, since it alsoprescribes that "the amount by which the value of the propertyexceeded the value of the consideration" shall be deemed agift for the purpose of the tax. .

Dispositive: CTA’s decision is affirmed.

ESTATE OF FIDEL REYES V. CIR

III.Computation of Taxes

e. Contributions toPolitical Parties

ABELLO, et al v. CIRGR 120721

Azcuna, J.; Feb. 23, 2005ina

FACTSPetitioners, partners in the ACCRA law firm, eachcontributed some P800k to the campaign funds of Angara for his senatorial bid in 1987. The collectorassessed each of them donor’s tax of about P200k. TheCIR denied their claim for exemption. The CTA grantedit; while the CA sided with the CIR.

ISSUEWON the campaign contributions in question aresubject to donor’s tax*

RULING YES

1) The National Internal Revenue Code, as amended,provides:Sec. 91. Imposition of Tax. (a) There shall be levied,assessed, collected, and paid upon the transfer by any

person, resident, or non-resident, of the property by gift, a tax, computed as provided in Section 92. (b) Thetax shall apply whether the transfer is in trust or otherwise, whether the gift is direct or indirect, and whether the property is real or personal, tangible or intangible.- The NIRC doesn’t define transfer of property by gift ;but the civil code, which applies suppletorily, definesdonation, in Article 725, as:

. . . an act of liberality whereby a persondisposes gratuitously of a thing or right infavor of another, who accepts it.

- Donation has the following elements: (a) thereduction of the patrimony of the donor; (b) theincrease in the patrimony of the donee; and, (c) theintent to do an act of liberality or animus donandi.2) Donative intent is a creature of the mind. It canonly be perceived thru the material and tangible actswhich manifest its presence. It is presumed presentwhen one gives a part of ones patrimony to anotherwithout consideration. It is not negated when theperson donating has other intentions, motives orpurposes which do not contradict donative intent. ThisCourt is not convinced that since the purpose of thecontribution was to help elect a candidate, there wasno donative intent. Petitioners’ contribution of moneywithout any material consideration evinces animusdonandi. The fact that their purpose for donating wasto aid in the election of the donee does not negate thepresence of donative intent.3) The purpose for which the sums of money weregiven, which was to fund the campaign of SenatorAngara in his bid for a senatorial seat, cannot beconsidered as a material consideration so as to negatea donation. The fact that petitioners will somehow inthe future benefit from the election of the candidate towhom they contribute, in no way amounts to avaluable material consideration so as to removepolitical contributions from the purview of a donation.Senator Angara was under no obligation to benefit thepetitioners. The proper performance of his duties as alegislator is his obligation as an elected public servantof the Filipino people and not a consideration for thepolitical contributions he received. In fact, as a publicservant, he may even be called to enact laws that are

contrary to the interests of his benefactors, for thebenefit of the greater good.4) The petitioners argue that for half a century, the BIRnever attempted to subject campaign contributions todonor’s tax. This may be so, but the BIR is notprecluded from making a new interpretation of the law,especially when the old interpretation was flawed.5) The law is clear and unambiguous; therefore, thereis no room for construction. (Petitioners argue that thelaw should be construed liberally in favor of taxpayers.)

* Congress approved Republic Act No. 7166 onNovember 25, 1991, providing in Section 13 thereof

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that political/electoral contributions, duly reported tothe Commission on Elections, are not subject to thepayment of any gift tax. Unfortunately, this doesn’tretroact to the campaign contributions in question inthis case.

V. Exemptions

TANG HO V BOARD OF TAX APPEALS97 PHIL 890

REYES, J.B.L.; November 19, 1955Apple

FACTS-Li Seng Giap (who died during the pendency of thisappeal) and his wife Tang Ho and their thirteenchildren appear to be stockholders of two close familycorporations named Li Seng Giap & Sons, Inc. and LiSeng Giap & Co.-Examiners of the Bureau of Internal Revenue made an

examination of the books of the two corporations andfound that each of Li Seng Giap's 13 children had atotal investment therein of approximately P63,195.00,in shares issued to them by their father in the years1940, 1942, 1948, 1949, and 1950-The Collector of Internal Revenue regarded thesetransfers as undeclared gifts made in the respectiveyears, and assessed against Li Seng Giap and hischildren donor's and donee's taxes in the total amountof P76,995.31, including penalties, surcharges,interests, and compromise fee due to the delayedpayment of the taxes.- The petitioners paid P53,434.50 representing theamount of the basic taxes, and put up a surety bond toguarantee payment of the balance demanded.

-On June 25, 1951, they requested the Collector of Internal Revenue for a revision of their taxassessments, and submitted donor's and donee's gifttax returns-Appellants admit that the gifts were not reported; butcontend that as the cash donated came from theconjugal funds, they constituted individual donationsby each of the spouses Li Seng Giap and Tang Ho of one half of the amount received by the donees in eachinstance-They also claimed the benefit of gift tax exemptions(under section 110 and 112 of the Internal RevenueCode) at the rate of P2000 a year for each donation,

plus P10,000 for each gift propter nuptias made byeither parent-The Collector refused to revise his originalassessments; and the petitioners appealed to the thenBoard of Tax Appeals-The Board of Tax Appeals upheld the decision of therespondent Collector of Internal Revenue; hence, thispetition for review

ISSUEWON the donations made by petitioner Li Seng Giap tohis children from the conjugal property are taxableagainst husband and wife, and therefore, exemptionsmay be claimed twice

HELDNo.-Appellants submit that all such donations of community property are to be regarded, for taxpurposes, as donations by both spouses, for which twoseparate exemptions may be claimed in each instance,one for each spouse.-This presentation should be viewed in the light of theprovisions of the Spanish Civil Code of 1889. Arts. 1409and 1415, reading as follows:Art. 1409. The conjugal partnership shall also bechargeable with anything which may have been givenor promised by the husband to the children born of themarriage solely in order to obtain employment forthem or give them a profession, or by both spouses bycommon consent, should they not have stipulated thatsuch expenditures should be borne in whole or in partby the separate property of one of them.ART. 1415. The husband may dispose of the propertyof the conjugal partnership for the purposes mentionedin Art. 1409.-In effect, these Articles clearly refute the appellants'theory that because the property donated iscommunity property, the donations should be viewedas made by both spouses. First, because the lawclearly differentiates the donations of such property"by the husband" from the "donations by both spousesby common consent"-Next, the wording of Arts. 1409 and 1415 indicatesthat the lawful donations by the husband to thecommon children are valid and are chargeable to thecommunity property, irrespective of whether the wifeagrees or objects thereof. Obviously, should the wifeobject to the donation, she can not be regarded as adonor at all.

-Appellants herein are therefore in error when theycontend that it is enough that the property donatedshould belong to the conjugal partnership in order thatthe donation be considered and taxed as a donationof both husband and wife, even if the husband shouldappear as the sole donor. There is no blinking the factthat, under the old Civil Code, to be a donation by bothspouses, taxable to both, the wife must expressly jointhe husband in making the gift; her participationtherein cannot be implied.-The consequence of the husband's legal power todonate community property is that, where made bythe husband alone, the donation is taxable as his ownexclusive act. Hence, only one exemption or deductioncan be claimed for every such gift, and not two, asclaimed by appellants herein

TAX REMEDIES

I. Local Taxes in General a. Assessment/Collectio

n

3. Assessment of Deficiency/Delinquent Tax

BLGF Ruling dates 13 June 2006

CALIFORNIA MANUFACTURING CO. V

CITY OF LAS PIÑASC.T.A. AC NO. 4

CASANOVA; September 28, 2005Rache

NATUREPetition for Review seeking reversal of RTC Ordersdismissing California Manufacturing's petition for lackof jurisdiction

FACTS

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- Petitioner is a corporation duly organized and existingunder the laws of the RP with principal place of business at Parañaque City. City of Las Piñas is a localgovernment unit created by law and respondent Hon.Rizal Y. Del Rosario is the duly appointed City

Treasurer of Las Piñas City, empowered to perform theduties of said office, including, inter alia, the collectionof all local taxes, fees and charges, and the power todecide, approve and grant refunds or tax credits of erroneously or excessively paid taxes. It is engaged inthe business of manufacturing and selling various foodproducts, such as pasta, peanut butter, pickles,sinigang powder, hot pot, spaghetti meat sauce, KnorrcubesTM, chinese soups and cream soups..- In a letter dated June 9, 2003, respondent City

Treasurer informed petitioner that it had local businesstax deficiency on non-essential commodities anddeficiency real property tax in the total amount of P73,045,634.47. Upon receipt of the notice of assessment for deficiency business and real propertytaxes, petitioner's financial accountant attended aconference on June 23, 2003 with respondent City

Treasurer and the examiners of the City of Las Piñas.During the conference, petitioner personally served aletter dated June 23, 2003 to respondent City

Treasurer requesting ample time to consider thevalidity of the assessment and asking for specificrulings and ordinances supporting the claim.Respondent City Treasurer issued a reply also dated

June 23, 2003, informing petitioner that its request toconsider the validity of the assessment has beengranted and gave petitioner only up to July 15, 2003 tosettle the tax deficiency.- Petitioner then filed on September 1, 2003, what itcalls a supplemental protest against the assessmentfor deficiency local business tax. On October 16, 2003,petitioner filed a petition before the Regional TrialCourt protesting the assessment for deficiency localbusiness taxes, penalties and interest for the period1999 up to the taxable quarter ending June 30, 2003 inthe total amount of P15,283,815.79 and seeking thecancellation of the said assessment.- Respondents filed a Motion to Dismiss anchored onthe following: first, petitioner has no legal capacity tosue since the person who signed the verification on thepetition is not an authorized officer; and second, theRTC has no jurisdiction because the assessment hasattained finality due to the lack of timely protest.- RTC granted the Motion to Dismiss filed by hereinrespondents through Atty. Prudencio A. Rañola, Jr., on

the ground that it had no jurisdiction over the subjectmatter. "Under the said law, 11 a taxpayer maycontest an assessment by a local treasurer or his dulyauthorized representative within sixty (60) days afterthe notice of assessment is given him by filing awritten protest with the local treasurer. It can begleaned from the records that the City Treasurer madea letter on June 9, 2003 assessing that petitioner CMC,Inc. had a tax deficiency in the total amount of Seventy

Three Million Forty Five Thousand Six Hundred ThirtyFour Pesos and 47/100 (P73,045,634.47) for taxableyears 1999 to 2003. This notice of assessment fordeficiency tax was actually received by petitioner CMC,Inc. on June 10, 2003. Given the above-cited provision,petitioner should have filed the protest before thedeadline, which is August 9, 2003 or sixty (60) daysfrom the notice of assessment. Since the letterprotesting the assessment was filed on September 1and 2, 2003 or approximately eighty three (83) daysafter the assessment, it is the conclusion of this Courtthat the protest was filed way beyond thereglementary period of 60 days as provided for bySection 195 of the Local Government Code. Hence, theassessment became final and executory."- Petitioner filed an Omnibus Motion praying for thereconsideration of the Order and therein argued thatthe June 9, 2003 letter of the respondents was not anassessment because it is bereft of any statement as tothe nature of the tax, fee or charge, the amount of deficiency, the surcharge or interests and penalties.And that assuming arguendo that the City Treasurer's

June 9, 2003 letter was an assessment, it follows thatpetitioner's request for ample time partook of thenature of a preliminary protest that tolled the runningof the 60-day period to file a protest. That, if therespondents considered the assessment to be final andunappealable, it would have been natural for therespondents to cite such ground in the denial of theprotest.- The Omnibus Motion was denied for want of merit.

ISSUEWON the protest was timely filed, thus the court had

jurisdiction over the case

HELDNO- There was no such valid and timely protest on thepart of petitioner. Thus, the assessments became finaland executory as provided for by Section 195 of the

Local Government Code. 30 The RTC is correct in rulingthat it has no jurisdiction over the subject matter of thecase and the dismissal of the petition was proper.Ratio The requirement for an assessment notice to bevalid is a statement of the nature of the tax, fee orcharge, the amount of deficiency, the surcharges,interests and penalties.- Provisions of law clearly mandate that within sixty(60) days from receipt of the assessment, theaggrieved taxpayer may file a protest with the localtreasurer in case of local tax assessments and with theLocal Board of Assessment Appeals in case of realproperty tax assessments.

Reasoning Petitioner insists that the lower court has jurisdiction over the case considering that the protestwas timely filed. Jurisdiction of a court over the subjectmatter of an action is conferred only by theConstitution or the law and the Rules of Court yield tosubstantive law. Jurisdiction must exist as a matter of law. And the court can motu propio dismiss a casewhich is outside its jurisdiction (Sec. 1, Rule 9).- Section 195 of the Local Government Code provides:"When the local treasurer or his duly authorizedrepresentative finds that correct taxes, fees, orcharges have not been paid, he shall issue a notice of assessment stating the nature of the tax, fee orcharge, the amount of deficiency, the surcharges,interests and penalties. Within 60 days from thereceipt of the notice of assessment, the taxpayer mayfile a written protest with the local treasurer contestingthe assessment; otherwise the assessment shallbecome final and executory."- Section 226 provides: "Any owner or person havinglegal interest in the property who is not satisfied withthe action of the provincial, city or municipal assessorin the assessment of his property may, within sixty(60) days from the date of receipt of the written noticeof assessment, appeal to the Board of AssessmentAppeals of the province or city by filing a petitionunder oath in the form prescribed for the purpose,together with copies of tax declarations and suchaffidavits or documents submitted in support of theappeal."- Petitioner had sixty (60) days from June 10, 2003 oruntil August 9, 2003, within which to protest the aboveassessment. Petitioner's argument that the letter is notan assessment for it failed to state the nature of thetax, fee or charge, the amount of deficiency, thesurcharge or interests and penalties has no merit as

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earlier because there were attachments to such letter.Further, the petitioner admitted in its Petition forReview filed with the RTC that it received the notice of the assessment for deficiency local business tax andreal property tax on 10 June 2003. Still further, in thesame petition, the petitioner was able to detail thecomposition of the deficiency tax assessment based onthe table audit sent by the respondents and it was ableto counter argue point by point the assessment madeby the respondents hence, only belying its claim thatthe letter of June 9, 2003 did not contain the nature of the tax, fee or charge, the amount of deficiency, thesurcharge or interests and penalties.

Disposition Petition for Review is hereby DISMISSEDfor lack of merit.

B. Taxpayer’s Remedies

SAN JUAN V. CASTRO541 SCRA 526

CARPI0-MORALES, December 27, 2007cha

NATUREPetition for review on certiorari of CA deci

FACTS-Romulo San Juan, registered owner of real propertiesin Rancho Estate I, Concepcion II , Marikina City, withwife’s consent, conveyed by Deed of Assignment saidproperties to Saints and Angels Realty Corporation(SARC) in exchange for 258,434 shares of stock in totalpar value of P2,584,340. 200,000 of the said shares of

stocks worth P2M were placed in San Juan’s namewhile the rest were placed in the name of his wife.-San Juan’s rep went to Office of Marikina City

Treasurer Castro to pay transfer tax based on theconsideration in the Deed of Assignment but Castroinformed him that the tax due should be based on thefair market value of the property-San Juan protested in writing to the basis of tax due.Castro replied still insisting that the basis is fair marketvalue-San Juan filed in RTC Marikina Petition for Mandamusand Damages to perform a ministerial duty…

ISSUE

WON the petition for review should be granted

HELDNO.Reasoning. For mandamus to lie, petitioner San Juanshould comply with Rule 65.3 of ROC which requiresthat there is no other plain, speedy and adequateremedy in the ordinary course of law. Under Section195 of LGC, a taxpayer who disagrees with a taxassessment made by a local treasurer may file awritten protest thereof.-Petitioner protested in writing against the assessmentof tax due. Respondent sent him letter which operatedas a denial of petitioner’s written protest. Inaccordance with Section 195 of LGC, petitioner shouldhave either appealed the assessment before the courtof competent jurisdiction or paid the tax then sought arefund. However, he instead opted to file a petition formandamus to compel respondent to accept paymentof transfer tax as computed by him.

Disposition. WHEREFORE, the petition is DENIED. Costsagainst the petitioner. SO ORDERED.

3. Contesting the Validity of aNew Tax Ordinance

FIGUERRES v CAMENDOZA; March 25, 1999

jojo

FACTSPetitioner Belen Figuerres is the owner of a parcel of land located in Mandaluyong City. In 1993, she

received a notice of assessment, dated Oct. 20, 1993,from the assessor of the then Municipality of Mandaluyong. The assessment, effective in the year1994, was based on Ordinance Nos. 119 and 125,series of 1993, and Ordinance No. 135, series of 1994,of the Sangguniang Bayan of Mandaluyong. OrdinanceNo. 119 – contains a schedule of fair market values of the different classes of real property in themunicipality. Ordinance No. 125 – fixes theassessment levels applicable to such classes of realproperty. Ordinance No. 135 – amended OrdinanceNo. 119, §6 by providing that only one third (1/3) of theincrease in the market values applicable to residential

lands pursuant to the said ordinance shall beimplemented in the years 1994, 1995, and 1996.Petitioner brought a prohibition suit in the CA againstthe Assessor, the Treasurer, and the SangguniangBayan to stop them from enforcing the ordinances inquestion on the ground that the ordinances wereinvalid for having been adopted allegedly withoutpublic hearings and prior publication or posting andwithout complying with the implementing rules yet tobe issued by the Department of Finance.CA denied the petition..ISSUES1. WON exhaustion of administrative remedies obtainsunder the circumstances2. WON the City Council of Mandaluyong is empoweredto determine and approve the aforecited ordinanceswithout taking into account the mandatory publichearings required by the LGC3. WON there is a need for publication of taxordinances.HELD1. YESWhere a remedy is available within the administrativemachinery, this should be resorted to before resort canbe made to the courts, not only to give theadministrative agency the opportunity to decide thematter by itself correctly, but also to preventunnecessary and premature resort to courts.- With regard to questions on the legality of a taxordinance, the remedies available to the taxpayer:a. Section 187 of LGC provides, that the taxpayermay question the constitutionality or legality of a taxordinance on appeal within thirty (30) days fromeffectivity thereof, to the Secretary of Justice. Thepetitioner after finding that his assessment is unjust,confiscatory, or excessive, may bring the case beforethe Secretary of Justice for questions of legality orconstitutionality of the city ordinance.b.Under Section 226 of LGC, an owner of realproperty who is not satisfied with the assessment of his property may, within sixty (60) days from notice of assessment, appeal to the Board of AssessmentAppeals.- Should the taxpayer question the excessiveness of the amount of tax, he must first pay the amount due,in accordance with Section 252 of LGC. Then, he mustrequest the annotation of the phrase "paid underprotest" and accordingly appeal to the Board of Assessment Appeals by filing a petition under oath

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together with copies of the tax declarations andaffidavits or documents to support his appeal.- Although cases raising purely legal questions areexcepted from the rule requiring exhaustion of administrative remedies before a party may resort tothe courts, in the case at bar, the legal questionsraised by petitioner require, as will presently be shown,proof of facts for their resolution. Therefore, thepetitioner’s action in the CA was premature, and theappellate court correctly dismissed her action on theground that she failed to exhaust availableadministrative remedies as above stated.- Petitioner argues that resort to the Secretary of

Justice is not mandatory but only directory becauseLGC, §187 provides that "any question on theconstitutionality or legality of tax ordinances orrevenue measures" may be appealed to the Secretaryof Justice. Precisely, the Secretary of Justice can takecognizance of a case involving the constitutionality orlegality of tax ordinances where, as in this case, thereare factual issues involved.- There need be no fear that compliance with the ruleon exhaustion of administrative remedies will undulydelay resort to the courts to the detriment of taxpayers. Although LGC §187 provides that an appealto the Secretary of Justice "shall not have the effect of suspending the effectivity of the ordinance and theaccrual and payment of the tax, fee, or charge leviedtherein," it likewise requires the Secretary of Justice to"render a decision within sixty (60) days from the dateof receipt of the appeal," after which "the aggrievedparty may file appropriate proceedings with a court of competent jurisdiction."2. NO.- LGC, §186 provides that an ordinance levying taxes,fees, or charges "shall not be enacted without anyprior public hearing conducted for the purpose."- However, it is noteworthy that apart from her bareassertions, petitioner Figuerres has not presented anyevidence to show that no public hearings wereconducted prior to the enactment of the ordinances inquestion. On the other hand, the Municipality of Mandaluyong claims that public hearings were indeedconducted before the subject ordinances wereadopted, although it likewise failed to submit anyevidence to establish this allegation. However, inaccordance with the presumption of validity in favor of an ordinance, their constitutionality or legality shouldbe upheld in the absence of evidence showing that the

procedure prescribed by law was not observed in theirenactment.- Furthermore, the lack of a public hearing is anegative allegation essential to petitioner’s cause of action in the present case. Hence, as petitioner is theparty asserting it, she has the burden of proof.13[Industrial Finance Corporation v. Tobias, 78 SCRA 28(1977).] Since petitioner failed to rebut thepresumption of validity in favor of the subjectordinances and to discharge the burden of proving thatno public hearings were conducted prior to theenactment thereof, we are constrained to uphold theirconstitutionality or legality.3. YESIn view of §§188 and 511(a) of LGC, an ordinance fixingthe assessment levels applicable to the differentclasses of real property in a local government unit andimposing penal sanctions for violations thereof (suchas Ordinance No. 125) should be published in full forthree (3) consecutive days in a newspaper of localcirculation, where available, within ten (10) days of itsapproval, and posted in at least two (2) prominentplaces in the provincial capitol, city, municipal, orbarangay hall for a minimum of three (3) consecutiveweeks.- Apart from her allegations, petitioner has notpresented any evidence to show that the subjectordinances were not disseminated in accordance withthese provisions of LGC. On the other hand, theMunicipality of Mandaluyong presented a certificate,dated November 12, 1993, of Williard S. Wong,Sanggunian Secretary of the Municipality of Mandaluyong that "Ordinance No. 125, S-1993 . . . hasbeen posted in accordance with §59(b) of LGC. Thus,considering the presumption of validity in favor of theordinances and the failure of petitioner to rebut suchpresumption, we are constrained to dismiss thepetition in this case.

HAGONOY MARKET VENDORS ASSN VHAGONOY

G.R No. 137621PUNO, J.; Feb. 6, 2002

kiyo

NATUREPetition for Review of CA Resolution

FACTS

- Hagonoy enacted Kautusan Blg. 28 on Oct. 1996,increasing stall rentals of market vendors in Hagonoy.Art. 3 provided it would take effect upon approval. Theordinance was posted from Nov. 4-25, 1996. PetitionerAssn’s members were personally given copies on Nov.1997; petitioner’s president appealed with the SoJ(over a year after its approval) assailing itsconstitutionality and claiming it was unaware of theposting. Respondent contended that the ordinancetook effect in Oct. 1996 by operation of law and thatthe appeal was time-barred. The SoJ, citing Tanada vs

Tuvera, held that ordinance’s effectivity retroacted tothe date of its approval and that the appeal was filedbeyond the 30 day limit from the date of approval. ItsMFR denied, petitioner appealed with the CA whichwas denied for formal deficiencies. Its second MFR wasdenied, hence this appeal.

ISSUEWON petitioner’s appeal was already time-barred

HELD YES. Sec. 187 of the 1991 Local Government Codeprovides that any question on the constitutionality orlegality of tax ordinances or revenue measures may beraised on appeal within 30 days from the effectivitythereof to the Secretary of Justice who shall render adecision within 60 days from receipt of the appeal. Theappeal will not suspend the effectivity of the ordinanceand accrual of payment of the tax charged. Within 30days from the party’s receipt of the decision or thelapse of the 60 day period without the SoJ acting onthe appeal, the party may file appropriate proceedings.-in the instant case, petitioner filed his appeal only inDec. 1997, over a year after the ordinance took effectin 1996. The periods provided in Sec. 187 aremandatory; hence, the appeal was rightly dismissed asit was clearly time-barred. Since taxes are the lifebloodof the State, the validity of such revenue measurescannot be left uncertain for considerable lengths of time.Dispositive IN VIEW WHEREOF, petition is DISMISSED

COCA-COLA BOTTLERS PHILIPPINES,INC. VS.

CITY OF MANILACHICO-NAZARIO; June 27, 2006

(athe)

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NATURE: Petition for Review on Certiorari under Rule45

FACTS- Petitioner Coca-Cola Bottlers Philippines, Inc. is acorporation engaged in the business of manufacturingand selling beverages and maintains a sales officelocated in the City of Manila.- The City Mayor of Manila approved Tax Ordinance No.7988, otherwise known as "Revised Revenue Code of the City of Manila", which increased the tax ratesapplicable to certain establishments operating withinthe territorial jurisdiction of the City of Manila,including herein petitioner.- Aggrieved by said tax ordinance, petitioner filed aPetition before the Department of Justice (DOJ), againstthe City of Manila and its Sangguniang Panlungsodquestioning the constitutionality or legality of Section21 of Tax Ordinance No. 7988. The provision, in effect,impose additional business tax on businesses,including herein petitioner, that are already subject tobusiness tax, which imposition, petitioner claims, "isbeyond or exceeds the limitation on the taxing powerof the City of Manila.- Then DOJ Secretary Artemio G. Tuquero issued aResolution declaring Tax Ordinance No. 7988 null andvoid and without legal effect on the ground of itsfailure to meet publication requirement as mandatedby Sec 188 of LGC. It provides that “Within ten (10)days after their approval, certified true copies of allprovincial, city and municipal tax ordinances orrevenue measures shall be published in full for three(3) consecutive days in a newspaper of localcirculation; Provided, however, that in provinces, cities,and municipalities where there are no newspapers orlocal circulations the same may be posted in at leasttwo (2) conspicuous and publicly accessible places."- Reasoning of the DOJ Secretarya. The use of the word "shall" in both provisions isimperative, operating to impose a duty that may beenforced.b. Strict observance of the said procedural requirementis the only safeguard against any unjust andunreasonable exercise of the taxing powers byensuring that the taxpayers are notified throughpublication of the existence of the measure, and aretherefore able to voice out their views or objections tothe said measure. For, after all, taxes are obligatory

exactions or enforced contributions corollary to takingof property.c. the documentary evidence submitted by petitionerwhich indubitably show that subject tax ordinance waspublished only once, i.e., on the May 22, 2000 issue of the Philippine Post. Clearly, therefore, hereinrespondents failed to satisfy the requirement that saidordinance shall be published for three (3) consecutivedays as required by law.- Despite the Resolution of the DOJ declaring TaxOrdinance No. 7988 null and void and the directive of the BLGF that respondents cease and desist fromenforcing said tax ordinance, respondents continued toassess petitioner business tax for the year 2001 basedon the tax rates prescribed under Tax Ordinance No.7988. Thus, petitioner filed a Complaint with the RTCof Manila praying that respondents be enjoined fromimplementing the aforementioned tax ordinance.- During the pendency of the said case, the City Mayorof Manila approved Tax Ordinance No. 8011 entitled,"An Ordinance Amending Certain Sections of Ordinance No. 7988." Said tax ordinance was againchallenged by petitioner before the DOJ through aPetition questioning the legality of the aforementionedtax ordinance on the grounds that (1) said taxordinance amends a tax ordinance previously declarednull and void and without legal effect by the DOJ; and(2) said tax ordinance was likewise not published uponits approval in accordance with Section 188 of theLocal Government Code of 1991.- Then DOJ Secretary Hernando Perez issued aResolution declaring Tax Ordinance No. 8011 null andvoid and legally not existing.

ISSUEWON Tax Ordinance No. 7988 is null and void and of no legal effect.

HELD YES. Tax Ordinance No. 7988 is null and void as saidordinance was published only for one day in the 22May 2000 issue of the Philippine Post in contraventionof the unmistakable directive of the Local GovernmentCode of 1991.

Likewise, the amendatory ordinance (Tax Ordinance8011) is null and void. The passage of the assailed ordinance did not have the effect of curing the defectsof Ordinance No. 7988 which, any way, does not legally exist." Furthermore, even if Tax Ordinance No.

8011 was not declared null and void, the trial courtshould not have dismissed the case on the reason thatsaid tax ordinance had already amended TaxOrdinance No. 7988. As held by this Court in the caseof People v. Lim, if an order or law sought to beamended is invalid, then it does not legally exist, thereshould be no occasion or need to amend it.

DISPOSITIONPetition is GRANTED. The Orders of the RTC of Manilaare hereby REVERSED and SET ASIDE.

II. Real Property Taxes2. Collection of Real Property Taxesd. Remedies of Government to Collect

SPS TAN V BANTEGUIGR No 154027

PANGANIBAN; October 24, 2005giulia

NATURE The case is a Petition for Review under Rule 45assailing the Decision and Resolution of the Court of

Appeals

FACTS- Bantegui acquired the property sometime in 1954

and rented it to spouses Caedo, who resided therein

until 1994. In 1970, she left for the US and returned to

the Philippines in January 1988 and executed her

special power of attorney, making Guadalupe B.

Bautista her representative, after which, she went back

to the United States.

- Her taxes on the subject property were paid but onlyuntil 1977. The real property taxes from the year 1978

to 1983 amounting to P3,034.99, inclusive of penalties,

however, were not paid.

- For failure of Bantegui to pay said taxes, the City

Treasurer of QC sold said property at public auction to

the spouses Capistrano, for the sum of P10,000.00. The Certificate of Sale of Delinquent Property was

subsequently issued in their favor.

- Since the property was not redeemed within the 1

year redemption period, title to said property was

consolidated to the Capistranos. The Capistranos,

however, did not take possession of the land or inform

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the Caedos about the sale or collected any rent from

them. They, likewise, did not pay real property taxes

thereon.

- The property was later sold by the Capistranos to

spouses Pereyra for P60,000.00. The Pereyras also did

not take possession of the property in question. They,

however, mortgaged the same to the Rural Bank of Imus, Cavite, which was annotated on the title of the

property.

- These transfers were unknown to Bantegui and the

Caedos, despite the fact that Evelyn Pereyra is the

daughter of the Caedos, as the latter did not inform

them about anything concerning these transactions. The actual occupants, the Caedos, considered

themselves as tenants of Bantegui.

- Bantegui, on her part, applied for administrative

reconstitution of her title, as it was lost in a fire.

Reconstituted Title No. 28458 was subsequently issued

in her name. She likewise paid the realty taxes on the

subject property for the years 1987 to 1989. The [c]ity

[t]reasurer of Quezon City, however, refused to accepther payment for the year 1990.

- On May 3, 1990, said property was again sold by the

Pereyras to the spouses Tan, with the latter paying the

amount of P300,000.00 to the Rural Bank of Imus,

Cavite for the release of the mortgage per agreement

by the parties. They likewise paid the overdue taxes

and other expenses incurred by the Pereyras

pertaining to said mortgage.

The Tans, like their predecessors, did not take

immediate possession of the property [or inform] theoccupants (Caedos) of their title to the land. Towards

the latter part of 1990, however, the Tans, thru their

lawyer, informed the Caedos of their ownership over

the property and demanded that the Caedos vacatethe property. They subsequently filed an action for

ejectment against the Caedos before the MTC of QC

where the TC rules in favor of the Tans. The Caedos

then interposed an appeal, which was remanded to the

same Court for further proceedings, and for failure of

the Caedos to appear during the hearing of the case,

they were declared in default and were subsequently

ejected from the property, when the house that they

erected thereon was demolished.

Bantegui, thru her sister Guadalupe Bautista, and

joined by the spouses Caedo, filed a Complaint for

Annulment of Sale, Quieting of Title, Injunction and

Damages with the RTC. After the trial court rendered

its Decision in favor of respondents, petitioners

appealed to the CA. CA affirmed TC judgment.

Ruling of the Court of AppealsIn declaring that petitioners were not purchasers in

good faith and had no better right to the subject

property than that of any of their predecessors-in-interest, the appellate court gave the following

reasons. First , the auction sale was tainted with

irregularities: no notices of delinquency and of sale

were sent to the owner. Second , the owner continued

to pay realty taxes on the property, even after the date

of the sale. She would not have done so had she beenaware that it had already been auctioned off. Third ,

the selling price was grossly inadequate and, when

viewed together with the other facts and

circumstances, would render the sale itself void.

Fourth, the purchasers failed to take possession of the

property, pay the real taxes, and inform the lessees of

the purchase. As a result, the latter continued to pay

rent to the owner.

ISSUEWON the auction sale was valid

HELD The petition has no merit.

Ratio The auction sale of land to satisfy alleged

delinquencies in the payment of real estate taxes

derogates or impinges on property rights and due

process. Thus, the steps prescribed by law for thesale, particularly the notices of delinquency and of

sale, must be followed strictly. Failure to observe

those steps invalidates the sale.

Reasoning The tax sale did not conform to the requirements

prescribed under PD 4641, otherwise known as the Real

Property Tax Code.

1“SECTION 65. Notice of delinquency in the payment of the real property tax. —

“Upon the real property tax or any installment thereof becoming

delinquent, the x x x city treasurer shall immediately cause notice of the fact to be

posted at the main entrance of the x x x city hall and in a public and conspicuous

place in each barrio of the x x x city as the case may be. The notice of delinquency

shall also be published once a week for three consecutive weeks, in a newspaper of

general circulation in the x x x city, if any there be, and announced by a crier at the

market place for at least three market days.

First , no notice of delinquency or of sale was given to

either Gorgonia Bantegui, the delinquent owner; or to

her representative.

- In the present case, notices either of delinquency or

of sale were not given to the delinquent taxpayer.

Those notices are mandatory, and failure to issue them

invalidates a sale. Because it was clearly incontravention of the requirements under the law and

jurisprudence, the subsequent sale of the real property

did not make its purchaser the new owner.

“Such notice shall specify the date upon which tax became

delinquent, and shall state that personal property may be seized to effect payment.

It shall also state that, at any time, before the seizure of personal property, payment

may be made with penalty in accordance with the next following section, and

further, that unless the tax and penalties be paid before the expiration of the year for

which the tax is due, or the tax shall have been judicially set aside, the entire

delinquent real property will be sold at public auction, and that thereafter the full title

to the property will be and remain with the purchaser, subject only to the right of

delinquent taxpayer or any other person in his behalf to redeem the sold property

within one year from the date of sale.”

“SECTION 73. Advertisement of sale of real property at public

auction. —

“After the expiration of the year for which the tax is due, the x x x city

treasurer shall advertise the sale at public auction of the entire delinquent real

property, except real property mentioned in subsection (a) of Section forty hereof, to

satisfy all the taxes and penalties due and the costs of sale. Such advertisement

shall be made by posting a notice for three consecutive weeks at the main entrance

of the x x x city or x x x hall in the case of cities, and in a public and conspicuous

place in barrio or district wherein the property is situated, in English, Spanish and

the local dialect commonly used, and by announcement at least three market days

at the market by crier, and, in the discretion of the x x x city treasurer, by publication

once a week for three consecutive weeks in a newspaper of general circulation

published in the x x x city.

“The notice, publication, and announcement by crier shall state the

amount of the taxes, penalties and costs of sale; the date, hour, and place of sale,

the name of the taxpayer against whom the tax was assessed; and the kind or

nature of property and, if land, its approximate areas, lot number, and location

stating the street and block number, district or barrio, municipality and the province

or city where the property to be sold is situated. Copy of the notice shall forthwith

be sent either by registered mail or by messenger, or through the barrio captain, to

the delinquent taxpayer, at his address as shown in the tax rolls or property tax

record cards of the x x x city where the property is located, or at his residence, if

known to said treasurer or barrio captain: Provided, however, That a return of the

proof of service under oath s hal l be f i l ed by the pers on mak ing the

s e r v i c e w i t h t h e x x x c i t y t r e a s u r e r c o n c e r n e d . ”

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- A certificate of title under the Torrens system serves

as evidence of an indefeasible title to the property in

favor of the person whose name appears on it. While it

is true that Transfer Certificates of Title have already

been issued in the names of the subsequent

purchasers, they should nonetheless be invalidated.

Considering the failure to abide by the mandatoryrequirements of a proceeding in personam, no better

title than that of the original owner can be assumed by

the transferees.

- A gross inadequacy in the price is of no moment

either. It is true that the lower the price, the easier it

will be for the owner to effect redemption; but the factremains that without the mandatory notices, the

registered owner will never be given the opportunity to

redeem the property, despite the lapse of one year

from the date the sale is registered.

- Second , only a copy of the Resolution of RTC-QC,

confirming the final bill of sale to the Capistranos, has

been submitted by the city treasurer to show the

validity of the sale.- Third , Section 80 of PD 464 provides that “any

balance of the proceeds of the sale left after deducting

the amount of the taxes and penalties due and the

costs of sale, shall be returned to the owner or his

representative.” Again contrary to the mandate of the

law, the balance of the proceeds from the tax sale wasnot even returned to Respondent Bantegui or her

representative after the issuance of the final bill of

sale. The failure to return the proceeds reinforced the

apparent irregularity not only in the conduct of the tax

sale, but also in its subsequent disposition.

- Fourth, petitioners were not innocent purchasers for

value. Despite their awareness of defects in their title,

they still failed to investigate or take the necessary

precaution. In the present case, the exercise of the

right of possession over the property was attempted

by none of the purchasers, except

petitioners.Furthermore, nothing on the record shows

that, aside from Respondent Bantegui, the purchasers

paid real property taxes, as required of every

registered property owner. The tax on real property

for any year shall attach to, become due and payable

from, and be the personal liability of its “owner at the

beginning of the year.”- Finally , Respondent Bantegui remained in continuous

possession of the owner’s duplicate copy of the

Certificate of Title. She was even allowed to undertake

an administrative reconstitution of her file copy after

its destruction by fire. Accordingly, the Register of

Deeds issued a reconstituted title in her name, in

which the property had been registered as early as

1959. For reasons known only to the allegedpurchasers, no attempt was even made to have the

title immediately cancelled. It is basic that registration

does not vest title, which is a mere evidence of title to

a property.

Disposition WHEREFORE, the Petition is hereby

DENIED, and the assailed Decision and

Resolution are AFFIRMED. Costs against

petitioners.

B. Taxpayer’s Remedies1. Contesting the assessment of

land valuea. Appeal to the Local Board of

Assessment Appeals

SYSTEMS PLUS COMPUTER COLLEGEOF CALOOCAN CITY v. CALOOCAN CITY

GR No. 122451CORONA; October 12, 2000

glaisa

FACTS- Systems Plus Computer College is a non-stock andnon-profit educational institution organized andestablished in 1997. As such, it enjoys property taxexemption from the local government on its buildingsbut not on the parcels of land which Systems Plus isrenting for P5,000 monthly from its sister companies,Consolidated Assembly and Pair Management andDevelopment Corporation.- Systems Plus requested Caloocan city government toextend tax exemption to the parcels of land claimingthat the same were being used actually, directly andexclusively for educational purposes.- City government denied the request on the groundthat the subject parcels of land were owned byConsolidated Assembly and Pair Management which

derived income therefrom in the form of rentals andother local taxes assumed by the Systems Plus.- Systems Plus and the Consolidated Assembly and PairManagement entered into separate agreements whichin effect novated their existing contracts of lease onthe subject parcels of land and converted them todonations of the beneficial use thereof.- Systems Plus wrote City Assessor informing the latterof the new agreements and seeking a reconsiderationof earlier denial of the application for tax exemption.

They no longer received income by way of rentals fromthe subject properties, accompanied by thecorresponding board resolutions, Again, the applicationwas denied.- Systems Plus filed a petition for mandamus with RTCwhich, however, dismissed it for being premature. Itstimely motion for reconsideration having been denied,Systems Plus filed the instant petition for certiorariimputing grave abuse of discretion on the part of thetrial court when it ruled: (1) that mandamus does notlie and (2) that Systems Plus failed to exhaustavailable administrative remedies.

ISSUEWON mandamus is the proper remedy

HELDNO. Under Section 226 of RA 7160,[12] the remedy of appeal to the Local Board of Assessment Appeals isavailable from an adverse ruling or action of theprovincial, city or municipal assessor in theassessment of property.- The Systems Plus cannot bypass the authority of theconcerned administrative agencies and directly seekredress from the courts even on the pretext of raisinga supposedly pure question of law without violating thedoctrine of exhaustion of administrative remedies.- Hence, when the law provides for remedies againstthe action of an administrative board, body, or officer,as in the case at bar, relief to the courts can be madeonly after exhausting all remedies provided therein.- Before seeking the intervention of the courts, it is aprecondition that Systems Plus should first avail of allthe means afforded by the administrative processes.- Besides, mandamus does not lie against therespondent City Assessor in the exercise of his functionof assessing properties for taxation purposes. While itsduty to conduct assessments is a ministerial function,the actual exercise thereof is necessarily discretionary.

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http://www.supremecourt.gov.ph/jurisprudence/2005/oct2005/154027.htm#_ftn26






- Mandamus may not be availed of to direct theexercise of judgment or discretion in a particular way,or to retract or reverse an action already taken in theexercise of either.

b. Appeal to the Central Board

of Assessment AppealsCALTEX V. CBAA AND CITY ASSESSOR

OF PASAY 114 SCRA 196May 31, 1982

titoFACTS- Caltex was assessed realty tax on machinery &equipment installed in its gas stations on leased lands.(underground tanks, elevanted tanks, elevated watertanks, water tanks, gasoline pumps, etc.)- Those are loaned by Caltex to gas station operators

under lease agreement. The operators must returnthem. The lessor of the land doesn’t become theowner of the machines & equipment.- City Assessor of Pasay said those are taxable realty.City Board of Tax Appeals said they’re personalty.- Assessor appealed to Central Board of AssessmentAppeals.- Central Board of Assessment Appeals said they’rereal prop.- Caltex filed this certiorari petition.- The Solicitor General contends that the CTA hasexclusive appellate jurisdiction over the case. andhenceISSUE1. WON CTA has exclusive jurisdiction

2. WON the equipment / machineries are real orpersonal property

HELD

1. No. The Solicitor General's contention that the Courtof Tax Appeals has exclusive appellate jurisdiction overthis case is not correct. \A hen Republic Act No. 1125created the Tax Court in 1954, there was as yet noCentral Board of Assessment Appeals. Section 7(3) of that law in providing that the Tax Court had jurisdictionto review by appeal decisions of provincial or cityboards of assessment appeals had in mind the localboards of assessment appeals but not the Central

Board of Assessment Appeals which under the RealProperty Tax Code has appellate jurisdiction overdecisions of the said local boards of assessmentappeals and is, therefore, in the same category as the

Tax Court.

Section 36 of the Real Property Tax Code provides thatthe decision of the Central Board of AssessmentAppeals shall become final and executory after thelapse of fifteen days from the receipt of its decision bythe appellant, Within that fifteen-day period, a petitionfor reconsideration may be filed. The Code does notprovide for the review of the Board's decision by thisCourt.

Consequently, the only remedy available for seeking areview by this Court of the decision of the CentralBoard of Assessment Appeals is the special civil actionof certiorari, the recourse resorted to herein by Caltex(Philippines), Inc.

2.REAL PROP- bec as appurtenances to the gas station, they’renecessary to the operation of the gas station.- bec improvements on land are commonly taxed asrealty even though for some purposes they might beconsidered personalty. Standard Oil v. Jaramillo

CHAVEZ V. ONGPIN(supra, Local Government p. 14)

owen

CAGAYAN ROBINA SUGAR MILLING V

CA (CBAA, LBAA, PROVINCIALASSESSOR OF CAGAYAN)GR 122451

QUISUMBING; October 12, 2000Maia

NATUREPetition for certiorari decision of CA (dismissingpetition for certiorari of Cagayan Robina)

FACTS- Cagayan Robina Sugar Milling (Robina for short) wasthe highest bidder for the properties of Cagayan Sugar

Milling, whose properties were foreclosed and held forauction by the Asset Privitization Trust (APT). APT setfloor bid price at P355million. Robina acquired theproperties for P464million. Among the propertiesacquired were machineries located in the millsite of Cagayan Milling- shortly after, the provincial assessor sent a notice of

assessment of real property to Robina, covering themachineries installed in the millsite, based on themarket value of P391.6m and assessed value of P313.3m- Robina appealed to the LBAA, contending that theassessment should not be based on the APT-set floorbid price alone, but should also consider other pricingfactors like goodwill and future business potential.- LBAA affirmed the assessment of the provincialassessor, but modified the amount (it used the APT-setfloor bid price then deducted the value of all otherproperties not covered by the assessment) to marketvalue of P260m and assessed value of P208m.Resolution was given April 1, 1992, and given toRobina on April 18, 1992.- Robina then prepared an appeal to the CBAA, but itwas only on November 1992 that the same was filed inthe CBAA. Naturally, the LBAA and provincial assessormoved to dismiss for being time-barred (past the 30-day period for appeal to CBAA). CBAA dismissed- Robina filed (actually with SC, but SC referred to CA)a petition on certiorari against CBAA. CA upheld thedismissal and denied the petition. Hence, the presentpetition

ISSUE1. WON there was any error in dismissing the appeal of Robina

HELD1. NORatio Robina failed to show that the use by the LBAAand CBAA of the APT floor bid price, pursuant toSec.3(n) of the RPTC was incorrect and done in badfaith. The method used by the LBAA and CBAA cannotbe deemed erroneous since there is no rigid rule forthe valuation of property, which is affected by amultitude of circumstances and which rules could notforesee nor provide for. LBAA and CBAA were notprecluded from adopting various approaches to valuedetermination, including adopting the APT “floor bidprice” for Robina’s properties. Further, the appeal wastime-barred

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Reasoning Note that the real property tax beingassessed and collected here is for 1990. Hence, theapplicable law is the Real Property Tax Code (PD464),and not the Local Government Code (RA7160).-the main contention of Robina is that the method bywhich the LBAA arrived at the assessment is notsanctioned by law, insofar as the RPTC provides a

formula for reaching market value of machineries, viz:(remaining economic value/ economic life) xreplacement cost (sec. 28, RPTC)- however, sec.28 must be read in consonance withsec.3(n) of RPTC, which defines “market value”. Here,LBAA and CBAA are not precluded from adoptingvarious approaches to value determination, includingadopting the APT "floor bid price" for the properties- Valuation on the basis of a floor bid price is not bereftof any basis in law. One of the approaches to value isthe Sales Analysis Approach or the Market DataApproach where the source of market data forvaluation is from offer of sales or bids of real property.Valuation based on the floor bid price belongs to thisapproach, pursuant to Section 3(n)…- Worthy of note, Robina has not shown that thecurrent market value of its properties would besignificantly lower if its proposed formula is adopted. Aparty challenging an appraiser's finding of value isrequired not only to prove that the appraised value iserroneous but also what the proper value is.- further, the appeal to the CBAA was time-barred. TheRPTC provides: “Where the owner or administrator of aproperty or an assessor is not satisfied with thedecision of the LBAA, he may, within 30days from thereceipt of the decision, appeal to the CBAA.- Robina had only until May 18, 1992, to appeal thelocal board's resolution to the CBAA. However, it onlyfiled its appeal with the CBAA on November 25, 1992,way beyond the period to perfect an appeal. No errorwas committed by CBAA when it dismissed petitioner'sappeal for having been filed out of time and CA wascorrect in affirming the dismissal.- Robina contends that the appeal period doesn’t applyin this case because of the rule that an assessment of a provincial assessor that is void ab initio, theprescriptive period to appeal to the LBAA is suspended.However, this argument is off-tangent as the appealfound to be time-barred in this case is the appeal tothe CBAA, not to the LBAA.- Well-entrenched is the rule that the perfection of anappeal within the period therefor is both mandatoryand jurisdictional, and that failing in this regard

renders the decision final and executory.Disposition Petition is denied. Decision affirmed

2. Payment of Real Property Taxunder Protest

MANILA ELECTRIC COMPANY V BARLISG.R. No. 114231

DE LEON: May 18, 2001da

FACTS:-MERALCO erected four (4) power generating plants inSucat, Muntinlupa which it declared in its taxdeclarations including the buildings thereon and themachineries and equipment therein. From 1975 to1978 MERALCO paid the real property taxes on thesaid properties on the basis of their assessed value asstated in the tax declarations. MERALCO sold all thepower-generating plants including the landsite to theNAPOCOR.-In 1985, the Offices of the Municipal Assessor andMunicipal Treasurer of Muntinlupa discovered, thatMERALCO, for the period beginning 1 January 1976 to29 December 1978, misdeclared and/or failed todeclare for taxation purposes a number of realproperties, consisting of several equipment andmachineries, found in the said power plants. Thesemachineries were reflected in the Deed of Sale.-The Municipal Assessor of Muntinlupa then declaredand assessed the subject real properties for taxationpurposes .. The Municipal Treasurer of Muntinlupaissued several collection notices to MERALCO, orderingit to pay the deficiency in the real property taxescovering the machineries and equipment found in thesaid power plants. MERALCO did not pay.-BLGF-DOF conducted a number of hearings with bothMERALCO and the Municipality of Muntinlupaparticipating and issued a Letter-Endorsementdeclaring MERALCO liable to pay the deficiency ordelinquent real property taxes claimed by theMunicipality.-Municipal Treasurer Eduardo A. Alon forwarded a

supplemental collection notice to MERALCO demandingthe immediate payment of 36 Million pesos of unpaidreal property taxes inclusive of penalties and accruedinterest.

In addition, Municipal Treasurer Alon also sent a formalletter to MERALCO reiterating his demand for taxpayment.Again, MERALCO did not pay.-Accordingly, after issuing the requisite certification of non-payment of real property taxes and complyingwith the additional requirement of public posting of the

notice of delinquency, Municipal Treasurer Eduardo A.Alon issued warrants of garnishment, copies of whichwere served on MERALCO on 10 October 1990,ordering the attachment of the bank deposits of MERALCO with the Philippine Commercial andIndustrial Bank (PCIB), Metropolitan Bank and TrustCompany (METROBANK) and the Bank of the PhilippineIslands (BPI) to the extent of its unpaid real propertytaxes.-MERALCO filed before the RTC of Makati, Metro Manilaa Petition for Prohibition with Prayer for Writ of Preliminary Mandatory Injunction and/or TemporaryRestraining order (TRO) praying, among others, that a

TRO be issued to enjoin the Municipal Treasurer of Muntinlupa from enforcing the warrants of garnishment.-RTC issued a TRO which was modified to the effectthat the warrants of garnishment against the bankaccounts shall be in full force and effect, provided, thatthe Municipal Treasurer shall not in the meantimecollect, receive or withdraw the frozen bank deposits;and that MERALCO can withdraw from the frozendeposits provided that it does not leave a balance lessthan the tax claim of the Municipality of Muntinlupa.-Municipal Treasurer filed a Motion to Dismiss onthe grounds of: (1) lack of jurisdiction since,under Sec. 64 of the Real Property Tax Code,courts are prohibited from entertaining any suitassailing the validity of a tax assessedthereunder until the taxpayer shall gave paid,under protest, the tax assessed against himISSUE:WON RTC has jurisdiction over a petition for prohibitionwhich seeks to set aside the warrants of garnishmentover the bank deposits of petitioner MERALCO withoutpayment under protest of the tax assessed as requiredin Sec. 64 of the Real Property Tax CodeHELD:No. The trial court has no jurisdiction to entertain aPetition for Prohibition absent petitioner's payment,under protest, of the tax assessed as required by Sec.64 of the RPTC. Payment of the tax assessed underprotest, is a condition sine qua non before the trial

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court could assume jurisdiction over the petition andfailure to do so, the RTC has no jurisdiction to entertainit.

The restriction upon the power of courts to impeachtax assessment without a prior payment, underprotest, of the taxes assessed is consistent with thedoctrine that taxes are the lifeblood of the nation and

as such their collection cannot be curtailed byinjunction or any like action; otherwise, the state or, inthis case, the local government unit, shall be crippledin dispensing the needed services to the people, andits machinery gravely disabled.

TALENTO VS. JUDGE ESCALADA ANDPETRON

G.R. No. 180884 YNARES-SANTIAGO, J. (2008)

SJ

NATURE

Certiorari under Rule 65 of the Rules of Court assailingthe November 5, 2007 Order of the Regional TrialCourt of Bataan, Branch 3 granting the petition for theissuance of a writ of preliminary injunction in favor of Petron

FACTS

On June 18, 2007, Petron received from the ProvincialAssessor’s Office of Bataan a notice of revisedassessment over its machineries and pieces of equipment in Lamao, Limay, Bataan.

Petron was given a period of 60 days within which tofile an appeal with the Local Board of AssessmentAppeals (LBAA). Based on said revised assessment,petitioner Provincial Treasurer of Bataan issued anotice informing Petron that as of June 30, 2007, itstotal liability is P1,731,025,403.06, representingdeficiency real property tax due from 1994 up to thefirst and second quarters of 2007.

On August 17, 2007, Petron filed a petition with theLBAA contesting the revised assessment on thegrounds that

(1) the subject assessment pertained to properties thathave been previously declared; (2) and that the assessment covered periods of morethan 10 years which is not allowed under theLocal Government Code (LGC). According toPetron, the possible valid assessment pursuant toSection 222 of the LGC could only be for the years

1997 to 2006.

Petron further contended that the fair market value orreplacement cost used by petitioner included itemswhich should be properly excluded; that promptpayment of discounts were not considered indetermining the fair market value; and that the subjectassessment should take effect a year after or on

January 1, 2008. In the same petition, Petron soughtthe approval of a surety bond in the amount of P1,286,057,899.54.

On August 22, 2007, Petron received from petitioner afinal notice of delinquent real property tax witha warning that the subject properties would belevied and auctioned should Petron fail to settlethe revised assessment due.

Consequently, Petron sent a letter to petitionerstating that in view of the pendency of itsappeal with the LBAA, any action by theTreasurer’s Office on the subject propertieswould be premature. However, petitioner repliedthat only Petron’s payment under protest shall bar thecollection of the realty taxes due, pursuant to Sections231 and 252 of the LGC.

With the issuance of a Warrant of Levy against itsmachineries and pieces of equipment, Petron filed onSeptember 24, 2007, an urgent motion to lift the finalnotice of delinquent real property tax and warrant of levy with the LBAA. It argued that the issuance of thenotice and warrant is premature because an appealhas been filed with the LBAA, where it posted a suretybond in the amount of P1,286,057,899.54.

On October 3, 2007, Petron received a notice of sale of its properties scheduled on October 17, 2007.Consequently, on October 8, 2007, Petron withdrew itsmotion to lift the final notice of delinquent realproperty tax and warrant of levy with the LBAA. Oneven date, Petron filed with the Regional Trial Court of Bataan the instant case for prohibition with prayer

for the issuance of a temporary restraining order(TRO) and preliminary injunction.

On October 15, 2007, the trial court issued a TRO for20 days enjoining petitioner from proceeding with thepublic auction of Petron’s properties. Petitionerthereafter filed an urgent motion for the immediate

dissolution of the TRO, followed by a motion to dismissPetron’s petition for prohibition.

On November 5, 2007, the trial court issued theassailed Order granting Petron’s petition for issuanceof writ of preliminary injunction, subject to Petron’sposting of a P444,967,503.52 bond in addition toits previously posted surety bond of P1,286,057,899.54, to complete the total amountequivalent to the revised assessment of P1,731,025,403.06. The trial court held that inscheduling the sale of the properties despite thependency of Petron’s appeal and posting of thesurety bond with the LBAA, petitioner deprivedPetron of the right to appeal. Hence, this direct

recourse to the SC.

ISSUE

1. Whether or not the petitioner properly invoked Rule65 on certiorari (note that this case is already under the remedies part of our outline).

2. Whether or not preliminary injunction was properlygranted in light of the settled rule that taxes are thelifeblood of the nation, hence the immediacy of timelyand speedy collection.

3. Whether or not the remedies availed of by Petronhave statutory basis.

RULING

1. NO, since this involves purely a question of law, the proper vehicle would be petition forreview on certiorari under Rule 45.

RATIO

Rule 65 is an independent action that cannot beavailed of as a substitute for the lost remedy of anordinary appeal, including that under Rule 45,

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especially if such loss or lapse was occasioned byone’s own neglect or error in the choice of remedies.

REASONING

In the instant case, petitioner received the questionedorder of the trial court on November 6, 2007, hence,

she had only up to November 21, 2007 to file thepetition. However, the same was filed only on January4, 2008, or 43 days late. Consequently, petitioner’sfailure to file an appeal within the reglementary periodrendered the order of the trial court final andexecutory.

The perfection of an appeal in the manner andwithin the period prescribed by law ismandatory. Failure to conform to the rulesregarding appeal will render the judgment finaland executory and beyond the power of theCourt’s review. Jurisprudence mandates that when adecision becomes final and executory, it becomes validand binding upon the parties and their successors in

interest. Such decision or order can no longer bedisturbed or reopened no matter how erroneous it mayhave been.

Petitioner’s resort to a petition under Rule 65 isobviously a play to make up for the loss of the right tofile an appeal via a petition under Rule 45. However, aspecial civil action under Rule 65 can not curepetitioner’s failure to timely file a petition for review oncertiorari under Rule 45 of the Rules of Court. Rule 65is an independent action that cannot be availed of as asubstitute for the lost remedy of an ordinary appeal,including that under Rule 45, especially if such loss orlapse was occasioned by one’s own neglect or error inthe choice of remedies.

Moreover, even if we assume that a petition underRule 65 is the proper remedy, the petition is stilldismissible.

We note that NO MOTION FOR RECONSIDERATIONOF THE NOVEMBER 5, 2007 ORDER OF THE TRIALCOURT WAS FILED PRIOR TO THE FILING OF THEINSTANT PETITION. The settled rule is that a motionfor reconsideration is a sine qua non condition for thefiling of a petition for certiorari. The purpose is togrant the public respondent an opportunity to correctany actual or perceived error attributed to it by the re-

examination of the legal and factual circumstances of the case. Petitioner’s failure to file a motion forreconsideration deprived the trial court of theopportunity to rectify an error unwittingly committedor to vindicate itself of an act unfairly imputed.Besides, a motion for reconsideration under thepresent circumstances is the plain, speedy and

adequate remedy to the adverse judgment of the trialcourt.

Petitioner also blatantly disregarded the rule onhierarchy of courts. Although the Supreme Court,Regional Trial Courts, and the Court of Appeals haveconcurrent jurisdiction to issue writs of certiorari,prohibition, mandamus, quo warranto, habeas corpusand injunction, such concurrence does not give thepetitioner unrestricted freedom of choice of courtforum. Recourse should have been made first with theCourt of Appeals and not d irectly to this Court.

2. YES

RATIO

The requisites for the issuance of a writ of preliminaryinjunction were met(1) the existence of a clear and unmistakable right that must be protected; and (2) an urgent and paramount necessity for the writ to

prevent serious damage.

REASONING

The urgency and paramount necessity for the issuanceof a writ of injunction becomes relevant in the instantcase considering that what is being enjoined is the saleby public auction of the properties of Petron amountingto at least P1.7 billion and which properties are vital toits business operations. If at all, the repercussions andfar-reaching implications of the sale of these propertieson the operations of Petron merit the issuance of a writof preliminary injunction in its favor.

We are not unaware of the doctrine that taxesare the lifeblood of the government, withoutwhich it can not properly perform its functions;and that appeal shall not suspend the collectionof realty taxes. However, there is an exceptionto the foregoing rule, i.e., where the taxpayerhas shown a clear and unmistakable right to

refuse or to hold in abeyance the payment of taxes. In the instant case, we note that respondentcontested the revised assessment on the followinggrounds: that the subject assessment pertained toproperties that have been previously declared; that theassessment covered periods of more than 10 yearswhich is not allowed under the LGC; that the fair

market value or replacement cost used by petitionerincluded items which should be properly excluded; thatprompt payment of discounts were not considered indetermining the fair market value; and that the subjectassessment should take effect a year after or on

January 1, 2008. To our mind, the resolution of theseissues would have a direct bearing on the assessmentmade by petitioner. Hence, it is necessary that theissues must first be passed upon before the propertiesof respondent is sold in public auction.

3. YES

RATIO

Although generally, appeal does not suspend payment,levy, distraint or sale of property to satisfy tax liability,the law empowers our courts at any stage of theprocessing to suspend the collection and require thetaxpayer either to deposit the amount claimed or tofile a surety bond for not more than double the amountwith the Court. THE GROUND TO BE INVOKED ISTHAT THE COLLECTION BY GOVERNMENTAGENCIES MAY JEOPARDIZE THE INTEREST OFTHE GOVERNMENT AND/OR THE TAXPAYER

REASONING

The Rules of Procedure of the LBAA, particularlySection 7, Rule V thereof, provides:

Section 7. Effect of Appeal on Collection of Taxes. – Anappeal shall not suspend the collection of thecorresponding realty taxes on the real property subjectof the appeal as assessed by the Provincial, City orMunicipal Assessor, without prejudice to thesubsequent adjustment depending upon the outcomeof the appeal. AN APPEAL MAY BE ENTERTAINEDBUT THE HEARING THEREOF SHALL BE DEFERREDUNTIL THE CORRESPONDING TAXES DUE ON THEREAL PROPERTY SUBJECT OF THE APPEAL SHALLHAVE BEEN PAID UNDER PROTEST OR THE

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PETITIONER SHALL HAVE GIVEN A SURETY BOND,subject to the following conditions:

(1) the amount of the bond must not be less thanthe total realty taxes and penalties due as assessed by the assessor nor more than double said amount;

(2) the bond must be accompanied by acertification from the Insurance Commissioner (a) that the surety is duly authorized to issue such bond; (a)that the surety bond is approved by and registered with said Commission; and (c) that the amount covered by the surety bond is within the writingcapacity of the surety company; and

(3) the amount o f the bond in excess o f thesurety company’s writing capacity, if any, must becovered by Reinsurance Binder, in which case, acertification to this effect must likewise accompany thesurety bond.

Corollarily, Section 11 of Republic Act No. 9282,] which

amended Republic Act No. 1125 (The Law Creating theCourt of Tax Appeals) provides:

Section 11. Who may Appeal; Mode of Appeal;Effect of Appeal; -

x x x x

No appeal taken to the Court of Appeals fromthe Collector of Internal Revenue x x x shall suspendthe payment, levy, distraint, and/or sale of anyproperty for the satisfaction of his tax liability asprovided by existing law. PROVIDED, HOWEVER,THAT WHEN IN THE OPINION OF THE COURT THECOLLECTION BY THE AFOREMENTIONEDGOVERNMENT AGENCIES MAY JEOPARDIZE THEINTEREST OF THE GOVERNMENT AND/OR THETAXPAYER the Court at any stage of the processingmay suspend the collection and require the taxpayereither to deposit the amount claimed or to file a suretybond for not more than double the amount with theCourt.

b. Protest to be filed with the LBAA:within 60 days from receipt of assessment; 120 days to decide

CITY GOVERNMENT OF QUEZON CITY VS BAYANTEL

G.R. NO. 062015

Garcia; March 6, 2006mel

NATURE

Petition for review on certiorari

FACTS

-Bayan Telecommunications, Inc. (Bayantel) is alegislative franchise holder under Republic Act (Rep.Act) No. 32594 to establish and operate radio stationsfor domestic telecommunications, radiophone,

broadcasting and telecasting. Rep. Act No. 3259,embodied in Section 14 thereof, states: “(a) Thegrantee shall be liable to pay the same taxes on itsreal estate, buildings and personal property, exclusiveof the franchise, as other persons or corporations arenow or hereafter may be required by law to pay. …..”

- On January 1, 1992, Rep. Act No. 7160, otherwiseknown as the "Local Government Code of 1991" (LGC),took effect. Section 232 of the Code grants localgovernment units within the Metro Manila Area thepower to levy tax on real properties: ….“Except asprovided herein, any exemption from payment of realproperty tax previously granted to, or enjoyed by, all

persons, whether natural or juridical, includinggovernment-owned-or-controlled corporations ishereby withdrawn upon effectivity of this Code”

On July 20, 1992, barely few months after the LGC tookeffect, Congress enacted Rep. Act No. 7633, amendingBayantel’s original franchise. The amendatory law(Rep. Act No. 7633) contained the following taxprovision:

SEC. 11. The grantee, its successors or assigns shall beliable to pay the same taxes on their real estate,buildings and personal property, exclusive of this

franchise, as other persons or corporations are now orhereafter may be required by law to pay…. In additionthereto, the grantee, its successors or assigns shallpay a franchise tax equivalent to three percent (3%) of all gross receipts of the telephone or othertelecommunications businesses transacted under thisfranchise by the grantee, its successors or assigns and

the said percentage shall be in lieu of all taxes on thisfranchise or earnings thereof. Provided, That thegrantee, its successors or assigns shall continue to beliable for income taxes payable under Title II of theNational Internal Revenue Code It is undisputed thatwithin the territorial boundary of Quezon City, Bayantelowned several real properties on which it maintainedvarious telecommunications facilities.

In 1993, the government of Quezon City, pursuant tothe taxing power vested on local government units bySection 5, Article X of the 1987 Constitution, , enactedthe Quezon City Revenue Code (QCRC),5 imposing,under Section 5 thereof, a real property tax on all real

properties in Quezon City. Furthermore, much like theLGC, the QCRC, under its Section 230, withdrew taxexemption privileges in general

New tax declarations for Bayantel were given.Meanwhile, on March 16, 1995, Rep. Act No. 7925,6

otherwise known as the "Public TelecommunicationsPolicy Act of the Philippines," envisaged to level theplaying field among telecommunications companies,took effect.

On January 7, 1999, Bayantel wrote the office of theCity Assessor seeking the exclusion of its realproperties in the city from the roll of taxable real

properties. With its request having been denied,Bayantel interposed an appeal with the Local Board of Assessment Appeals (LBAA). And, evidently on itsfirm belief of its exempt status, Bayantel did notpay the real property taxes assessed against itby the Quezon City government.

On account thereof, the Quezon City Treasurer sentout notices of delinquency for the total amount of P43,878,208.18, followed by the issuance of severalwarrants of levy against Bayantel’s propertiespreparatory to their sale at a public auction set on July30, 2002.

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http://www.lawphil.net/judjuris/juri2006/mar2006/gr_162015_2006.html#fnt4%23fnt4









Threatened with the imminent loss of its properties,Bayantel immediately withdrew its appeal with theLBAA and instead filed with the RTC of Quezon City apetition for prohibition with an urgent application for atemporary restraining order (TRO) and/or writ of preliminary injunction, thereat docketed as Civil CaseNo. Q-02-47292, which was raffled to Branch 227 of

the court.

On July 29, 2002, or in the eve of the public auctionscheduled the following day, the lower court issued a

TRO, followed, after due hearing, by a writ of preliminary injunction via its order of August 20, 2002.

The lower court declared the real properties exemptfrom taxation after hearing the merits. MFR wasdenied.

ISSUE

Whether or not Bayantel is required to exhaust

administrative remedies before seeking judicial relief with the trial court.

HELD

NO

RATIO

Petitions for prohibition are governed by the followingprovision of Rule 65 of the Rules of Court:

SEC. 2. Petition for prohibition. When the proceedingsof any tribunal, are without or in excess of its or his

jurisdiction, or with grave abuse of discretionamounting to lack or excess of jurisdiction, and there isno appeal or any other plain, speedy, and adequateremedy in the ordinary course of law, a personaggrieved thereby may file a verified petition in theproper court, alleging the facts with certainty andpraying that judgment be rendered commanding therespondent to desist from further proceedings in theaction or matter specified therein, or otherwise,granting such incidental reliefs as law and justice mayrequire.

With the reality that Bayantel’s real properties werealready levied upon on account of its nonpayment of real estate taxes thereon, the Court agrees withBayantel that an appeal to the LBAA is not a speedyand adequate remedy within the context of theaforequoted Section 2 of Rule 65. This is not tomention of the auction sale of said properties already

scheduled on July 30, 2002.

Moreover, one of the recognized exceptions to theexhaustion- of-administrative remedies rule is when, ashere, only legal issues are to be resolved. In fact, theCourt, cognizant of the nature of the questionspresently involved, gave due course to the instantpetition. As the Court has said in Ty vs. Trampe:7

xxx. Although as a rule, administrative remedies mustfirst be exhausted before resort to judicial action canprosper, there is a well-settled exception in caseswhere the controversy does not involve questions of fact but only of law. xxx.

Lest it be overlooked, an appeal to the LBAA, to beproperly considered, required prior payment underprotest of the amount of P43,878,208.18, a figurewhich, in the light of the then prevailing Asian financialcrisis, may have been difficult to raise up. Given thisreality, an appeal to the LBAA may not be consideredas a plain, speedy and adequate remedy. It is thusunderstandable why Bayantel opted to withdraw itsearlier appeal with the LBAA and, instead, filed itspetition for prohibition with urgent application forinjunctive relief in Civil Case No. Q-02-47292. Theremedy availed of by Bayantel under Section 2, Rule65 of the Rules of Court must be upheld.

California Manufacturing Co. v. City of Las Piñas, id.

NPC v. CBAeva

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