MANILA ELECTRIC CO vs.

CENTRAL BOARD of ASSESSMENT APPEALS

Aquino, J.
Batangas
1982
FACTS:
-MERALCO leased two oil storage tanks from Caltex Phil inc and installed them in
the Caltex refinery compound in Batangas. Capacity: 566K barrels, purpose: storing
fuel oil for MERALCOs power plants
-MERALCO: tanks made of steel plates welded and assembled on the spot, bottom
of each tanks is in contact with the top most layer of the foundation (3 layers:
compacted earth, sand pad, asphalt); sides are supported by concrete wall. Tank
NOT attached to foundation, merely sitting on it.
-Board: while tanks sit on their foundation, the foundation itself, walls, dikes and
steps, which are integral parts of the tanks, are affixed to the land, while the
pipelines are attached to the tanks CBAA concluded that these constitute taxable
improvements
-Municipal treasurer, through assessment of provincial assessor, required MERALCO
to pay realty taxes for the tax + penalties = P431,703.96 (for 1970-74). (Payment
condition for entertaining appeal from adverse decision of the Batangas BAA)
-MERALCO: tanks do not fall within A415 CC; tanks not attached to land; tanks
placed on leased land
ISSUE: WON tanks are RP? YES
RULE:
Assessment Law, Sec 2: realty tax is due on real property including x x x
improvements x x x
Sec 38. Incidence of RPT. They shall be levied, assessed and collected x x x an
annual ad valorem tax on RP, such as land, bldgs., machinery, and other
improvements affixed or attached to RP not hereinafter specifically exempted
Sec 3. (k). Improvements valuable addition made to property or an amelioration
in its condition, amounting to more than mere repairs or replacement of waste,
costing labor or capital and intended to enhance its value, beauty or utlility or to
adapt it for new or further purposes

HELD:
While 2 storage tanks are not embedded in the land, they are nevertheless
IMPROVEMENTS on it, enhancing its utility and rendering it useful to the oil
industry.
Tanks have been installed with some degree of permanence as receptacles for the
oil needed by MERALCO in its operations
-Standard Oil Co. of New Jersey vs. Atlantic City: oil storage tanks are taxable
realty; RP (for taxation purposes) may include things generally regarded as PP.
-BOAA v. MERALCO: N/A. Steel towers in this case were regarded as poles, were
not attached to any land or bldg. (removable from metal frames)