15.

FELS ENERGY INC VS THE PROVINCE OF BATANGAS

GR no. 168557
The power to tax is the most potent instrument to raise the needed revenues to finance and support the
activities of the local government units for the delivery of basic services essential to the promotion of the
general welfare and the enhancement of peace, progress and prosperity of the people.
Facts:
On January 18, 1993, National Power Corporation entered into a lease contract with polar energy
incorporation over a 30 mega watt diesel engine power barges moored in Balayan Bay, Batangas. The
contract denominated as energy conversion agreement. The petitioner received an assessment of real
property taxes on the power barges from the provincial assessor of Batangas. The assessed tax due was P.
54, 184.40. NPC sought reconsideration of the provincial assessor’s decision to assess real property on
the power barges. Petitioner contends that the power barges are not subject to real estate tax.
Issue: Whether power barges are personal properties and therefore not subject to real property tax?
Held:
Power barges are categorized as immovable property by destination, being in the nature of machinery
intended by the owner for an industry which may be carried on a building or on a piece of land.
Moreover, Article 415 of the new civil code states “docks and structures which though floating are
intended by their nature and object to remain at a fixed place on river, lake or coast are considered
immovable property.
The power to tax is the most potent instrument to raise the needed revenues to finance and support the
activities of the local government units for the delivery of basic services essential to the promotion of the
general welfare and the enhancement of peace, progress and prosperity of the people.