Real Property Taxes Case Digests 1

REAL PROPERTY TAXATION
(Case digests)
_____________________________
In partial fulfillment
Of the requirements
For the subject on Taxation Law
Saint Louis University
School of Law
_____________________________
Submitted to:
ATTY. CHRISTINE ELVEÑA-CARANTES
_____________________________
Submitted by:
AMEDA, KENJIE C.
BASCOS, GIDEON LUKE
NABOYE, LASKER JESUS FERDINAND III
_____________________________
Submitted on:
14 March 2014
0
TABLE OF CONTENTS
1. Allied Banking vs. the Quezon City Government,

 G. R. NO. 154126 September 15, 2006 ………………………………….......4
2. Caltex v. Central Board of Assessment

 31 May 1982 ……………………………………………………………………..8
3. Sta. Lucia Realty & Development, Inc. vs. City of Pasig

 G.R. No. 166838 June 15, 2011 ………………………………………..…10
4. Manila International Airport Authority vs. Paranaque

 G.R. No. 155650 July 20, 2006 …………………………………………....13
5. Manila International Airport Authority vs. City of Pasay

 April 2, 2009 GR NO. 163072 …………………………………………15
6. Lung Center of the Philippines vs. Quezon City

 GR No. 144104 June 29, 2004 …………………………………………..17
7. Light Rail Transit Authority vs. Central Board of Assessment

 GR NO. 127316 October 12, 2000 ……………………………………….19
8. National Power Corporation vs. Province of Quezon

 G.R. No. 171586 January 25, 2010 ……………………………………….21
9. National Power Corporation vs. Central Board of Assessment

 GR NO 171470 January 30, 2009 …………………………………...…..24
10. Philippine Fisheries Development vs. Central Board of Assessment

 G.R. No. 178030 December 15, 2010
……………………………….....26
1
11. City of Pasig vs. Republic of the Philippines
 G.R. No. 185023 August 24, 2011 ……………………… ……………28
12. Testate estate of Lim vs. City of Manila

 G.R. No. 90639 February 21, 1990 …………………………………...…30
13. Government Insurance System vs. City Treasurer of Manila

 G.R. No. 186242 December 23, 2009
……………………………….....32
14. Jaime Lopez vs. City of Manila

 G.R. No. 127139 February 19, 1999 …………………………………....…34
15. Antonio Callanta, et. al. vs. Office of the Ombudsman

 G.R. Nos. 115253-74 January 30, 1998 ……………………………….37
16. Manila Electric Company vs. NeliaBarlis

 G.R. No. 114231 February 1, 2002 ………………………………………..39
17. Antonio Talusanvs. HerminigildoTayag

 G.R. No. 133698 April 4, 2001 ……………………………………....………41
18. Hon. Franklin Drilonvs. Mayor Alfredo Lim

 G.R. No. 112497 August 4, 1994 …………………………………......……43
19. Antonio Reyes vs. Court of Appeals

 G.R. No. 118233 December 10, 1999 ………………………..……………45
20. Hagonoy Market Vendor Association vs. Municipality of Hagonoy

 GR no. 137621 February 6, 2002 …………………………………...…..47
21. Alejandro Ty vs. Honorable Aurelio Trampe

 G.R. No. 117577 December 1, 1995 ………………………..…………….49
2
22. Systems Plus Computer of Caloocan City vs. LGU of Caloocan
 GR. No. 146382 August 7, 2003 ……………………………….…………51
23. Dr. Pablo Olivares vs. Mayor Joey Marquez

 G.R. No. 155591 September 22, 2004 …………………………….………53
24. Cagayan Robina Sugar Milling Corporation vs. Court of Appeals

 G.R. No. 122451 12 October 2000 ………………………………….…….55
25. Manila Electric Cooperative vs. NeliaBarlis

 G.R. No. 114231 May 18, 2001 …………………………………..………57

 G.R. No. 114231 February 1, 2002 ………………………….…………….59

 G.R. No. 114231 June 29, 2004 ……………………………....……………61
28. National Power Corporation vs. Province of Quezon

 G.R. No. 171586 January 25, 2010 …………………………….…………63
29. Denis Habawelvs. Court of Tax Appeals

 G.R. No. 174759 September 7, 2011 ……………………….………….66
30. City Mayor of Quezon City vs. RCBC

 GR no 171033 20 August 2008 ………………………………....………69
31. Aquino vs. Quezon City

 G.R. No. 137534 March 3, 2006 ……………………………....…………………
71
32. National Housing Authority vs. Iloilo City

 GR No. 172267 20 August 2008 ………………………..………………..73
3
RE: APPRAISAL AT CURRENT FAIR MARKET VALUE AND BASED ON ACTUAL USE.
ALLIED BANKING CORPORATION AS TRUSTEE FOR THE TRUST FUND OF COLLEGE

ASSURANCE PLAN PHILIPPINES, INC. (CAP)
vs.
THE QUEZON CITY GOVERNMENT, THE QUEZON CITY TREASURER, THE QUEZON CITY
ASSESSOR AND THE CITY MAYOR OF QUEZON CITY
G.R. No. 154126October 11, 2005
CARPIO MORALES, J.:
FACTS:
On December 19, 1995, the Quezon City government enacted City Ordinance No. 357,
Series of 1995 which provided that that parcels of land sold, ceded, transferred and conveyed
for remuneratory consideration after the effectivity of this revision shall be subject to real estate
tax based on the actual amount reflected in the deed of conveyance or the current approved
zonal valuation of the Bureau of Internal Revenue prevailing at the time of sale, cession,
transfer and conveyance, whichever is higher, as evidenced by the certificate of payment of the
capital gains tax issued therefor.
On July 1, 1998, petitioner, as trustee for College Assurance Plan of the Philippines, Inc.,
purchased from Liwanag C. Natividad et al. a 1,000 square meter parcel of land located along
Aurora Boulevard, Quezon City in the amount of P38, 000,000.Prior to the sale, Natividad et al.
had been paying the total amount of P85, 050 as annual real property tax based on the
property’s fair market value of P4, 500,000.00 and assessed value of P1, 800,000.00.
After its acquisition of the property, petitioner wasrequired to pay P102, 600.00 as
quarterly real estate tax (or P410, 400.00 annually) which pegged the market value of the
property at P38, 000,000.00 – the consideration appearing in the Deed of Absolute Sale, and its
assessed value at P15, 200,000. Petitioner paid the quarterly real estate tax for the property
from the 1st quarter of 1999 up to the 3 rd quarter of 2000. Its tax payments for the 2 nd, 3rd, and
4th quarter of 1999, and 1st and 2nd quarter of 2000 were, however, made under protest.
In its written protest with the City Treasurer, petitioner assailed Section 3 of the
ordinance as null and void, it contending that the proviso is unjust, excessive, oppressive,
4
unreasonable, confiscatory and contrary to Section 130 of the Local Government
Code. Petitioner later sent a March 24, 2000 demand letter to the Quezon City Treasurer’s
Office seeking a refund of the real estate taxes it erroneously collected from it. The letter was
referred for appropriate action to the City Assessor who, by letter dated May 7, 2000, denied
the demand for refund on the ground that the ordinance is presumed valid and legal unless
otherwise declared by a court of competent jurisdiction.
ISSUE:
WHETHER OR NOT the proviso fixing the appraised value of property at the stated
consideration at which the property was last sold is valid
RULING:
This Court holds that the proviso in question is invalid as it adopts a method of
assessment or appraisal of real property contrary to the Local Government Code, its
Implementing Rules and Regulations and the Local Assessment Regulations No. 1-92 issued by
the Department of Finance. Under these immediately stated authorities, real properties shall be
appraised at the current and fair market value prevailing in the locality where the property is
situated and classified for assessment purposes on the basis of its actual use.
“Fair market value” is the price at which a property may be sold by a seller who is not
compelled to sell and bought by a buyer who is not compelled to buy, taking into consideration
all uses to which the property is adapted and might in reason be applied. The criterion
established by the statute contemplates a hypothetical sale. Hence, the buyers need not be
actual and existing purchasers.
As this Court stressed in Reyes v. Almanzor, assessors, in fixing the value of real property,
have to consider all the circumstances and elements of value, and must exercise prudent
discretion in reaching conclusions. In this regard, Local Assessment Regulations No. 1-92
establishes the guidelines to assist assessors in classifying, appraising and assessing real
property.
Local Assessment Regulations No. 1-92 suggests three approaches in estimating the fair
market value, namely: (1) the sales analysis or market data approach; (2) the income
capitalization approach; and (3) the replacement or reproduction cost approach.
Under the sales analysis approach, the price paid in actual market transactions is
considered by taking into account valid sales data accumulated from among the various
sources stated in Sections 202, 203, 208, 209, 210, 211 and 213 of the Code.
5
In the income capitalization approach, the value of an income-producing property is no
more than the return derived from it. An analysis of the income produced is necessary in order
to estimate the sum which might be invested in the purchase of the property.

The reproduction cost approach, on the other hand, is a factual approach used
exclusively in appraising man-made improvements such as buildings and other structures,
based on such data as materials and labor costs to reproduce a new replica of the improvement.
Accordingly, this Court holds that the proviso directing that the real property tax be
based on the actual amount reflected in the deed of conveyance or the prevailing BIR zonal
value is invalid not only because it mandates an exclusive rule in determining the fair market
value but more so because it departs from the established procedures stated in the Local
Assessment Regulations No. 1-92 and unduly interferes with the duties statutorily placed upon
the local assessor by completely dispensing with his analysis and discretion which the Code
and the regulations require to be exercised. An ordinance that contravenes any statute is ultra
vires and void.
Further, it is noted that there is nothing in the Charter of Quezon City and the Quezon
City Revenue Code of 1993 that authorize public respondents to appraise property at the
consideration stated in the deed of conveyance.Using the consideration appearing in the deed
of conveyance to assess or appraise real properties is not only illegal since “the appraisal,
assessment, levy and collection of real property tax shall not be let to any private person,” but it
will completely destroy the fundamental principle in real property taxation – that real property
shall be classified, valued and assessed on the basis of its actual use regardless of where located,
whoever owns it, and whoever uses it. Necessarily, allowing the parties to a private sale to
dictate the fair market value of the property will dispense with the distinctions of actual use
stated in the Code and in the regulations.
The invalidity of the assessment or appraisal system adopted by the proviso is not cured
even if the proviso mandates the comparison of the stated consideration as against the
prevailing BIR zonal value, whichever is higher, because an integral part of that system still
permits valuing real property in disregard of its “actual use.”
In the same vein, there is also nothing in the Code or the regulations showing the
congressional intent to require an immediate adjustment of taxes on the basis of the latest
market developments as, in fact, real property assessments may be revised and/or increased
only once every three (3) years. Consequently, the real property tax burden should not be
interpreted to include those beyond what the Code or the regulations expressly and clearly
state.
6
While the Local Government Code provides that the assessment of real property shall
not be increased oftener than once every three (3) years, the questioned part of the proviso
subjects the real property to a tax based on the actual amount appearing on the deed of
conveyance or the current approved zonal valuation of the Bureau of Internal Revenue
prevailing at the time of sale, cession, transfer and conveyance, whichever is higher. As such,
any subsequent sale during the three-year period will result in a real property tax higher than
the tax assessed at the last prior conveyance within the same period. To save on taxes, real
property owners or administrators are forced to hold on to the property until after the said
three-year period has lapsed. Should they nonetheless decide to sell within the said three-year
period, they are compelled to dispose the property at a price not exceeding that obtained from
the last prior conveyance in order to avoid a higher tax assessment. In these two scenarios, real
property owners are effectively prevented from obtaining the best price possible for their
properties and unduly hampers the equitable distribution of wealth.
In fine, public respondent Quezon City Government exceeded its statutory authority
when it enacted the proviso in question. The provision is thus null and void ab initio for being
ultra vires and for contravening the provisions of the Local Government Code, its
implementing regulations and the Local Assessment Regulations No. 1-92. As such, it acquired
no legal effect and conferred no rights from its inception.

7
RE: PROPERTIES COVERED.
CALTEX (PHILIPPINES) INC., petitioner,

vs.
CENTRAL BOARD OF ASSESSMENT APPEALS and CITY ASSESSOR OF PASAY, respondents.
G.R. No. L-50466 May 31, 1982
AQUINO, J.:
Facts:
This case is about the realty tax on machinery and equipment installed by Caltex
(Philippines) Inc. in its gas stations located on leased land.
The machines and equipment consists of underground tanks, elevated tank, elevated
water tanks, water tanks, gasoline pumps, computing pumps, water pumps, car washer, car
hoists, truck hoists, air compressors and tireflators. The city assessor described the said
equipment and machinery in this manner:
The said machines and equipment are loaned by Caltex to gas station operators under
an appropriate lease agreement or receipt. It is stipulated in the lease contract that the
operators, upon demand, shall return to Caltex the machines and equipment in good condition
as when received, ordinary wear and tear excepted.
The lessor of the land, where the gas station is located, does not become the owner of
the machines and equipment installed therein. Caltex retains the ownership thereof during the
term of the lease.
The city assessor of Pasay City characterized the said items of gas station equipment and
machinery as taxable realty. The city board of tax appeals ruled that they are personalty. The
assessor appealed to the Central Board of Assessment Appeals.
Issue:
Whether or not the pieces of gas station equipment and machinery are subject to realty
tax.
Held:
8
Yes.
We hold that the said equipment and machinery, as appurtenances to the gas station
building or shed owned by Caltex and which fixtures are necessary to the operation of the gas
station, for without them the gas station would be useless, and which have been attached or
affixed permanently to the gas station site or embedded therein, are taxable improvements and
machinery subject to Real Property Tax.
Improvements on land are commonly taxed as realty even though for some purposes
they might be considered personalty. It is a familiar phenomenon to see things classed as real
property for purposes of taxation which on general principle might be considered personal
property.
This case is easily distinguishable from Board of Assessment Appeals vs. Manila Electric
Co., 119 Phil. 328, where Meralco's steel towers were considered poles within the meaning of
paragraph 9 of its franchise which exempts its poles from taxation. The steel towers were
considered personalty because they were attached to square metal frames by means of bolts
and could be moved from place to place when unscrewed and dismantled.
Nor are Caltex's gas station equipment and machinery the same as tools and equipment
in the repair shop of a bus company which were held to be personal property not subject to
realty tax (Mindanao Bus Co. vs. City Assessor, 116 Phil. 501).
The Central Board of Assessment Appeals did not commit a grave abuse of discretion in
upholding the city assessor's is imposition of the realty tax on Caltex's gas station and
equipment.
9
RE: PROPERTIES COVERED.
STA. LUCIA REALTY & DEVELOPMENT, INC.

vs.
City of Pasig
G.R. No. 166838, June 15, 2011
LEONARDO-DE CASTRO, J.
FACTS:
Petitioner Sta. Lucia Realty & Development, Inc. (Sta. Lucia) is the registered owner of
several parcels of land with Transfer Certificates of Title (TCT) Nos. 39112, 39110 and 38457,
all of which indicated that the lots were located in Barrio Tatlong Kawayan, Municipality of
Pasig. The parcel of land covered by TCT No. 39112 was consolidated with that covered by TCT
No. 518403, which was situated in Barrio TatlongKawayan, Municipality of Cainta, Province of
Rizal. The two combined lots were subsequently partitioned into three, for which TCT Nos.
532250, 598424, and 599131, now all bearing the Cainta address, were issued.
TCT No. 39110 was also divided into two lots, becoming TCT Nos. 92869 and 92870.
The lot covered by TCT No. 38457 was not segregated, but a commercial building
owned by Sta. Lucia East Commercial Center, Inc., a separate corporation, was built on it.
Upon Pasig’s petition to correct the location stated in TCT Nos. 532250, 598424, and
599131, the Land Registration Court, on June 9, 1995, ordered the amendment of the TCTs to
read that the lots with respect to TCT No. 39112 were located in Barrio TatlongKawayan, Pasig
City.
On January 31, 1994, Cainta filed a petitionfor the settlement of its land boundary
dispute with Pasig before the RTC, Branch 74 of Antipolo City. This case, docketed as Civil Case
No. 94-3006, is still pending up to this date.
On November 28, 1995, Pasig filed a Complaint, docketed as Civil Case No. 65420,
against Sta. Lucia for the collection of real estate taxes, including penalties and interests, on the
lots covered by TCT Nos. 532250, 598424, 599131, 92869, 92870 and 38457, including the
improvements thereon (the subject properties).
10
Sta. Lucia, in its Answer, alleged that it had been religiously paying its real estate taxes
to Cainta, just like what its predecessors-in-interest did, by virtue of the demands and
assessments made and the Tax Declarations issued by Cainta on the claim that the subject
properties were within its territorial jurisdiction.Sta. Lucia further argued that since 1913, the
real estate taxes for the lots covered by the above TCTs had been paid to Cainta.
The RTC ruled in favor of Pasig. Upon Pasig's motion for execution pending appeal, the
same was granted by the RTC. The CA ruled in favor of Sta. Lucia. Hence, this petition.
ISSUE:
Whether Sta. Lucia should continue paying its real property taxes to Cainta, as it alleged
to have always done, or to Pasig, as the location stated in Sta. Lucia’s TCTs.
HELD:
Under Presidential Decree No. 464, or the “Real Property Tax Code,” the authority to
collect real property taxes is vested in the locality where the property is situated. This requisite
was reiterated in Republic Act No. 7160, or the Local Government Code. Thus, while a local
government unit is authorized under several laws to collect real estate tax on properties falling
under its territorial jurisdiction, it is imperative to first show that these properties are
unquestionably within its geographical boundaries. The Court cited the case of Mariano, Jr. v
Commission on Elections which stated that “the importance of drawing with precise strokes the
territorial boundaries of a local unit of government cannot be overemphasized.
The boundaries must be clear for they define the limits of the territorial jurisdiction of a local
government unit. It can legitimately exercise powers of government only within the limits of its
territorial jurisdiction. Beyond these limits, its acts are ultra vires.” Clearly therefore, the local
government unit entitled to collect real property taxes from Sta. Lucia must undoubtedly show
that the subject properties are situated within its territorial jurisdiction; otherwise, it would be
acting beyond the powers vested to it by law.
We hold that the Pasig RTC should have held in abeyance the proceedings in Civil Case
No. 65420, in view of the fact that the outcome of the boundary dispute case before the
Antipolo RTC will undeniably affect both Pasig’s and Cainta’s rights. In fact, the only reason
Pasig had to file a tax collection case against Sta. Lucia was not that Sta. Lucia refused to pay,
but that Sta. Lucia had already paid, albeit to another local government unit. Evidently, had the
territorial boundaries of the contending local government units herein been delineated with
accuracy, then there would be no controversy at all.
11
In the meantime, to avoid further animosity, Sta. Lucia is directed to deposit
the succeeding real property taxes due on the subject properties, in an escrow account with the
Land Bank of the Philippines.
WHEREFORE, the instant petition is GRANTED. The June 30, 2004 Decision and the
January 27, 2005 Resolution of the Court of Appeals in CA-G.R. CV No. 69603 are SET
ASIDE. The City of Pasig and the Municipality of Cainta are both directed to await the
judgment in their boundary dispute case (Civil Case No. 94-3006), pending before Branch 74
of the Regional Trial Court in Antipolo City, to determine which local government unit is
entitled to exercise its powers, including the collection of real property taxes, on the properties
subject of the dispute. In the meantime, Sta. Lucia Realty and Development, Inc. is directed to
deposit the succeeding real property taxes due on the lots and improvements covered by TCT
Nos. 532250, 598424, 599131, 92869, 92870 and 38457 in an escrow account with the Land
Bank of the Philippines.
12
RE: PROPERTIES EXEMPT.
Manila International Airport Authority

Vs.
Paranaque
G.R. No. 155650, July 20, 2006
FACTS:
The Manila International Airport Authority (MIAA) operates the Ninoy Aquino
International Airport (NAIA) Complex in Parañaque City under Executive Order No. 903
(MIAA Charter), as amended. As such operator, it administers the land, improvements and
equipment within the NAIA Complex. In March 1997, the Office of the Government Corporate
Counsel (OGCC) issued Opinion No. 061 to the effect that the Local Government Code of 1991
(LGC) withdrew the exemption from real estate tax granted to MIAA under Section 21 of its
Charter.
Thus, MIAA paid some of the real estate tax already due. In June 2001, it received Final
Notices of Real Estate Tax Delinquency from the City of Parañaque for the taxable years 1992
to 2001. The City Treasurer subsequently issued notices of levy and warrants of levy on the
airport lands and buildings.
At the instance of MIAA, the OGCC issued Opinion No. 147 clarifying Opinion No. 061,
pointing out that Sec. 206 of the LGC requires persons exempt from real estate tax to show
proof of exemption. According to the OGCC, Sec. 21 of the MIAA Charter is the proof that
MIAA is exempt from real estate tax. MIAA, thus, filed a petition with the Court of Appeals
seeking to restrain the City of Parañaque from imposing real estate tax on, levying against, and
auctioning for public sale the airport lands and buildings, but this was dismissed for having
been filed out of time.
ISSUE:
13
Whether or not the airport lands and buildings of MIAA are exempt from real estate
tax?
HELD:
The airport lands and buildings of MIAA are exempt from real estate tax imposed by
local governments. Sec. 243(a) of the LGC exempts from real estate tax any real property
owned by the Republic of the Philippines. This exemption should be read in relation with Sec.
133 (o) of the LGC, which provides that the exercise of the taxing powers of local governments
shall not extend to the levy of taxes, fees or charges of any kind on the National Government,
its agencies and instrumentalities.
These provisions recognize the basic principle that local governments cannot tax the
national government, which historically merely delegated to local governments the power to
tax.
The rule is that a tax is never presumed and there must be clear language in the law
imposing the tax. This rule applies with greater force when local governments seek to tax
national government instrumentalities. Moreover, a tax exemption is construed liberally in
favor of national government instrumentalities.
MIAA is not a GOCC, but an instrumentality of the government.
The Republic remains the beneficial owner of the properties. MIAA itself is owned solely
by the Republic. At any time, the President can transfer back to the Republic title to the airport
lands and buildings without the Republic paying MIAA any consideration. As long as the
airport lands and buildings are reserved for public use, their ownership remains with the State.
Unless the President issues a proclamation withdrawing these properties from public use, they
remain properties of public dominion. As such, they are inalienable, hence, they are not subject
to levy on execution or foreclosure sale, and they are exempt from real estate tax.
However, portions of the airport lands and buildings that MIAA leases to private entities
are not exempt from real estate tax. In such a case, MIAA has granted the beneficial use of such
portions for a consideration to a taxable person.
14
Manila International Airport Authority

vs.
City of Pasay
April 2, 2009 GR NO. 163072
FACTS:
Petitioner Manila International Airport Authority (MIAA) operates and administers the
Ninoy Aquino International Airport (NAIA) Complex under Executive Order No. 903 (EO 903),
otherwise known as the Revised Charter of the Manila International Airport Authority. Under
Sections 3 and 22 of EO 903, approximately 600 hectares of land, including the runways, the
airport tower, and other airport buildings, were transferred to MIAA. The NAIA Complex is
located along the border between Pasay City and Parañaque City.
MIAA received Final Notices of Real Property Tax Delinquency from the City of Pasay
for the taxable years 1992 to 2001. The City of Pasay, through its City Treasurer, issued notices
of levy and warrants of levy for the NAIA Pasay properties. Thereafter, the City Mayor of Pasay
threatened to sell at public auction the NAIA Pasay properties if the delinquent real property
taxes remain unpaid.
MIAA filed with the Court of Appeals a petition for prohibition and injunction with
prayer for preliminary injunction or temporary restraining order. The petition sought to enjoin
the City of Pasay from imposing real property taxes on, levying against, and auctioning for
public sale the NAIA Pasay properties.
Court of Appeals: Upheld the power of the City of Pasay to impose and collect realty
taxes on the NAIA Pasay properties. Sections 193 and 234 of Republic Act No. 7160 or the
Local Government Code withdrew the exemption from payment of real property taxes granted
to natural or juridical persons, including government owned or controlled corporations. Since
MIAA is a government-owned corporation, it follows that its tax exemption under Section 21
of EO 903 has been withdrawn upon the effectivity of the Local Government Code.
15
ISSUE:
Whether or not the NAIA Pasay properties of MIAA are exempt from real property tax
HELD:
1. MIAA is a government "instrumentality" that does not qualify as a "government-
owned or controlled corporation. Under Section 133(o) of the Local Government Code, local
government units have no power to tax instrumentalities of the national government.
Therefore, MIAA is exempt from any kind of tax from the local governments.
A government "instrumentality" may or may not be a "government-owned or controlled
corporation" (Section 2(10) of the Introductory Provisions of the Administrative Code of 1987).
A government-owned or controlled corporation must be "organized as a stock or non-stock
corporation." MIAA is not organized as a stock or non-stock corporation. It is not a stock
corporation because it has no capital stock divided into shares. It is also not a non-stock
corporation because it has no members. The Government cannot be considered as the sole
member of MIAA because nonstick corporations cannot distribute any part of their income to
their members. Section 11 of the MIAA Charter mandates MIAA to remit 20% of its annual
gross operating income to the National Treasury.
MIAA is like any other government instrumentality, but is vested with corporate powers
to perform efficiently its governmental functions. When the law vests in a government
instrumentality corporate powers, the instrumentality does not become a corporation.
2. The airport lands and buildings of MIAA are properties of public dominion intended
for public use, and as such are exempt from real property tax under Section 234(a) of the Local
Government Code.
16
Lung Center of the Philippines vs. Quezon City

GR No. 144104 June 29, 2004
Facts:
Lung Center of the Philippines is a non-stock and non-profit entity established by virtue
of PD No. 1823. It is the registered owner of the land on which the Lung Center of the
Philippines Hospital is erected. A big space in the ground floor of the hospital is being leased to
private parties, for canteen and small store spaces, and to medical or professional practitioners
who use the same as their private clinics. Also, a big portion on the right side of the hospital is
being leased for commercial purposes to a private enterprise known as the Elliptical Orchids
and Garden Center.
When the City Assessor of Quezon City assessed both its land and hospital building for
real property taxes, the Lung Center of the Philippines filed a claim for exemption on its
averment that it is a charitable institution with a minimum of 60% of its hospital beds
exclusively used for charity patients and that the major thrust of its hospital operation is to
serve charity patients. The claim for exemption was denied, prompting a petition for the
reversal of the resolution of the City Assessor with the Local Board of Assessment Appeals of
Quezon City, which denied the same. On appeal, the Central Board of Assessment Appeals of
Quezon City affirmed the local board’s decision, finding that Lung Center of the Philippines is
not a charitable institution and that its properties were not actually, directly and exclusively
used for charitable purposes. Hence, the present petition for review with averments that the
Lung Center of the Philippines is a charitable institution under Section 28(3), Article VI of the
Constitution, notwithstanding that it accepts paying patients and rents out portions of the
hospital building to private individuals and enterprises.
17
Issue:
Is the Lung Center of the Philippines a charitable institution within the context of the
Constitution, and therefore, exempt from real property tax?
Held:
The Lung Center of the Philippines is a charitable institution. To determine whether an
enterprise is a charitable institution or not, the elements which should be considered include
the statute creating the enterprise, its corporate purposes, its constitution and by-laws, the
methods of administration, the nature of the actual work performed, that character of the
services rendered, the indefiniteness of the beneficiaries and the use and occupation of the
properties.
However, under the Constitution, in order to be entitled to exemption from real
property tax, there must be clear and unequivocal proof that (1) it is a charitable institution
and (2)its real properties are ACTUALLY, DIRECTLY and EXCLUSIVELY used for charitable
purposes. While portions of the hospital are used for treatment of patients and the dispensation
of medical services to them, whether paying or non-paying, other portions thereof are being
leased to private individuals and enterprises.
Exclusive is defined as possessed and enjoyed to the exclusion of others, debarred from
participation or enjoyment. If real property is used for one or more commercial purposes, it is
not exclusively used for the exempted purposes but is subject to taxation.
18
LIGHT RAIL TRANSIT AUTHORITY, petitioner,

vs.
CENTRAL BOARD OF ASSESSMENT APPEALS, BOARD OF ASSESSMENT APPEALS OF MANILA
and the CITY ASSESSOR OF MANILA, respondents.
G.R. No. 127316. October 12, 2000]
PANGANIBAN, J.:
FACTS:
The Light Rail Transit Authority (LRTA), a government-owned and controlled corporation,
acquired real properties upon which it constructed structural improvements, such as buildings,
carriageways, passenger terminal stations, and installed various kinds of machinery and
equipment and facilities. After commencement of its operations, the respondent City Assessor of
Manila assessed the real properties the LRTA, consisting of lands, buildings, carriageways and
passenger terminal stations, machinery and equipment which he considered real property
under the Real Property Tax Code. The LRTA paid its real property taxes on all its real property
holdings, except the carriageways and passenger terminal stations including the land where it
was constructed on the ground that the same were not real properties under the Real Property
Tax Code, and if the same are real property, these were for public use, therefore, exempt from
realty taxation.
ISSUE:
19
Whether or not the subject carriageways and stations are taxable as improvements under the
Real Property Tax Code
RULING:
YES. Though the creation of the LRTA was impelled by public service, its operation undeniably
partakes of an ordinary business. The LRTA is clothed with corporate status and corporate
powers in the furtherance of its proprietary objectives. Given that it is engaged in a service-
oriented commercial endeavor, its carriageways and terminal stations are patrimonial property
subject to tax, notwithstanding its claim of being a government-owned or controlled
corporation. And although the LRTA's carriageways and terminal stations are anchored, at
certain points, on public roads, it must be emphasized that these structures do not form part of
such roads, since the former have been constructed over the latter in such a way that the flow
of vehicular traffic would not be impeded. Carriageways or passenger terminals are elevated
structures which are not freely accessible to the public, viz-a-viz roads which are public
improvements openly utilized by the public. These carriageways and terminal stations are part
and parcel of the light rail transit (LRT) system which, unlike public roads, are not open to use
by the general public. The carriageways are accessible only to the LRT trains, while the
terminal stations have been built for the convenience of LRTA itself and its customers who pay
the required fare. Furthermore, even granting that the national government indeed owns the
carriageways and terminal stations, the exemption would not apply because their beneficial
use has been granted to the LRTA, which is a taxable entity.
20
National Power Corporation

Vs.
Province of Quezon
G.R. No. 171586 January 25, 2010
FACTS:
The Province of Quezon assessed Mirant Pagbilao Corporation for unpaid real property
taxes in the amount of P1.5 Billion for the machineries located in its power plant in Pagbilao,
Quezon. Napocor, which entered into a Build-Operate-Transfer (BOT) Agreement (entitled
Energy Conversion Agreement) with Mirant, was furnished a copy of the tax assessment.
Napocor (not Mirant) protested the assessment before the Local Board of Assessment Appeals
(LBAA), claiming entitlement to the tax exemptions provided under Section 234 of the Local
Government Code (LGC), which states:
Section 234.Exemptions from Real Property Tax. – The following are exempted from
payment of the real property tax:
(c) All machineries and equipment that are actually, directly, and exclusively
used by
local water districts and government-owned or –controlled corporations
engaged in the supply and distribution of water and/or generation and
transmission of electric power;
(e) Machinery and equipment used for pollution control and environmental
protection.
Assuming that it cannot claim the above tax exemptions, Napocor argued that it is
entitled to certain tax privileges, 1. The lower assessment level of 10% under Section 218(d) of
the LGC for government-owned and controlled corporations engaged in the generation and
21
transmission of electric power, instead of the 80% assessment level for commercial properties
imposed in the assessment letter; and 2. An allowance for depreciation of the subject
machineries under Section 225 of the LGC.
ISSUES:
1. Whether or not NAPOCOR is entitled to claimed tax exemptions and privileges.
2. Whether or not the stipulation in the BOT Agreement that authorized the transfer of
ownership to Napocor after 25 years giving them sufficient legal interest to protest the tax
assessment..
3. Whether or not its authority to control and supervise the construction and operation
of the power plant gives them sufficient legal interest to protest the tax assessment.
4. Whether or not its obligation to pay for all taxes that may be incurred, as provided in
the BOT Agreement gives them sufficient legal interest to protest the tax assessment.
HELD
1. Napocor is not entitled to any of these claimed tax exemptions and privileges on the
basis primarily of the defective protest filed by the Napocor. We found that Napocor did not file
a valid protest against the realty tax assessment because it did not possess the requisite legal
standing. When a taxpayer fails to question the assessment before the LBAA, the assessment
becomes final, executory, and demandable, precluding the taxpayer from questioning the
correctness of the assessment or from invoking any defense that would reopen the question of
its liability on the merits.
Under Section 226 of the LGC, any owner or person having legal interest in the
property may appeal an assessment for real property taxes to the LBAA. Since Section 250
adopts the same language in enumerating who may pay the tax, we equated those who are
liable to pay the tax to the same entities who may protest the tax assessment. A person legally
burdened with the obligation to pay for the tax imposed on the property has the legal interest
in the property and the personality to protest the tax assessment.
2. The legal interest should be one that is actual and material, direct and immediate, not
simply contingent or expectant.
3. We disproved Napocor’s claim of control and supervision under the second

argument after reading the full terms of the BOT Agreement, which, contrary to Napocor’s
22
claims, granted Mirant substantial power in the control and supervision of the power plant’s
construction and operation.
4. We relied on the Court’s rulings in Baguio v. Busuegoand Lim v. Manila. In these

cases, the Court essentially declared that contractual assumption of tax liability alone is
insufficient to make one liable for taxes. The contractual assumption of tax liability must be
supplemented by an interest that the party assuming the liability had on the property; the
person from whom payment is sought must have also acquired the beneficial use of the
property taxed. In other words, he must have the use and possession of the property – an
element that was missing in Napocor’s case.
We further stated that the tax liability must be a liability that arises from law, which the
local government unit can rightfully and successfully enforce, not the contractual liability that
is enforceable only between the parties to the contract. In the present case, the Province of
Quezon is a third party to the BOT Agreement and could thus not exact payment from Napocor
without violating the principle of relativity of contracts. Corollarily, for reasons of fairness, the
local government units cannot be compelled to recognize the protest of a tax assessment from
Napocor, an entity against whom it cannot enforce the tax liability.
23

Vs.
Central Board of Assessment
GR NO 171470 January 30, 2009
FACTS:
First Private Power Corporation (BPPC) entered into BOT agreement with NPC for the
construction of the 215 Megawatt Bauang Diesel Power Plant in Payocpoc, Bauang, La Union.
The Municipal Assessor of Bauang then issued a Notice of Assessment and Tax Bill to FPPC
assessing/taxing the machineries. NPC filed a petition asking that the machineries covered by
the tax declarations be exempt from real property tax under Section 234(c) of LGC (i.e. All
machineries and equipment that are actually, directly and exclusively used by local water
districts and government-owned or controlled corporations engaged in the supply and
distribution of water and/or generation and transmission of electric power).
The LBAA denied NPC s petition for exemption because the exemption applies only
when a GOCC like NPC owns and/or actually uses machineries and equipment for the
generation and transmission of electric power. In this case, NPC does not own and does not
even actually and directly use the machineries.
On appeal, CBAA dismissed the same based on its finding that the BPPC, and not NPC, is
the actual, direct and exclusive user of the equipment and machineries; thus, the exemption
under Section 234(c) does not apply. The CTA rendered a decision dismissing the NPC s
petitions. Hence, the Supreme Court case.
ISSUE:
Whether or not the GOCC may be deemed the actual, direct, and exclusive user of
machineries and equipment for tax exemption purposes.
24
HELD:
No. NPC’s basis for its claimed exemption Section 234(c) of the LGC is clear and not at
all ambiguous in its terms. Exempt from real property taxation are: all machineries and
equipment that are actually, directly and exclusively used by local water districts and GOCCs
engaged in the supply and distribution of water and/or generation and transmission of electric
power.
The mere undertaking of petitioner NPC that it shall be responsible for the payment of
all real estate taxes and assessments, does not justify the exemption. The records show that NPC,
no less, admits BPPC s ownership of the machineries and equipment in the power plant.
Likewise, the provisions of the BOT agreement clearly show BPPC s ownership. Thus,
ownership is not a disputed issue.
Rather than ownership, NPC s use of the machineries and equipment is the critical
issue, since its claim under Sec. 234 (c) of the LGC is premised on actual, direct and exclusive
use. To support this claim, NPC characterizes the BOT Agreement as a mere financing
agreement where BPPC is the financier, while it (NPC) is the actual user of the properties.
Under the BOT concept, it is the project proponent who constructs the project at its own
cost and subsequently operates and manages it. The proponent secures the return on its
investments from those using the project s facilities through appropriate tolls, fees, rentals, and
charges not exceeding those proposed in its bid or as negotiated. At the end of the fixed term
agreed upon, the project proponent transfers the ownership of the facility to the government
agency. By its express terms, BPPC has complete ownership of the project, including the
machineries and equipment used, subject only to the transfer of these properties without cost to
NPC after the lapse of the period agreed upon.
Consistent with the BOT concept and as implemented, BPPC the owner-manager-
operator of the project is the actual user of its machineries and equipment. BPPC s ownership
and use of the machineries and equipment are actual, direct, and immediate, while NPC s is
contingent and, at this stage of the BOT Agreement, not sufficient to support its claim for tax
exemption.
Lastly, the real concern for NPC in this case is its assumption under the BOT agreement
of BPPC is real property tax liability (which in itself is a recognition that BPPC s real properties
are not really tax exempt). NPC could therefore not pass the tax exemption.
25
Philippine Fisheries Development

Vs.
Central Board of Assessment
G.R. No. 178030 December 15, 2010
FACTS:
The records show that the Lucena Fishing Port Complex (LFPC) is one of the fishery
infrastructure projects undertaken by the National Government under the Nationwide Fish
Port-Package. The Philippine Fisheries Development Authority (PFDA) was created by virtue of
P.D. 977 as amended by E.O. 772, with functions and powers to (m)anage, operate, and develop
the Navotas Fishing Port Complex and such other fishing port complexes that may be
established by the Authority. Pursuant thereto, Petitioner-Appellant PFDA took over the
management and operation of LFPC in February 1992.
On October 26, 1999, in a letter addressed to PFDA, the City Government of Lucena
demanded payment of realty taxes on the LFPC property for the period from 1993 to 1999 in
the total amount of P39, 397,880.00. Petitioner appealed to the LBAA of Lucena City which
denied the same.
ISSUE:
The sole issue raised in this petition is whether PFDA is liable for the real property tax
assessed on the Lucena Fishing Port Complex.
HELD:
The Supreme Court held that the PFDA is a government instrumentality not subject to
real property tax except those portions of the Navotas Fishing Port Complex that were leased to
taxable or private persons and entities for their beneficial use. Similarly, as a government
26
instrumentality, the PFDA is exempt from real property tax imposed on the Lucena Fishing Port
Complex, except those portions which are leased to private persons or entities.
The exercise of the taxing power of local government units is subject to the limitations
enumerated in Section 133 of the Local Government Code. Under Section 133(o) of the Local
Government Code, local government units have no power to tax instrumentalities of the
national government like the PFDA. Thus, PFDA is not liable to pay real property tax assessed by
the Office of the City Treasurer of Lucena City on the Lucena Fishing Port Complex, except
those portions which are leased to private persons or entities.
Besides, the Lucena Fishing Port Complex is a property of public dominion intended for
public use, and is therefore exempt from real property tax under Section 234(a) of the Local
Government Code. Properties of public dominion are owned by the State or the Republic of the
Philippines.
27
City of Pasig
Vs.
Republic of the Philippines
G.R. No. 185023 August 24, 2011
FACTS:
Mid-Pasig Land Development Corporation (MPLDC) owned two parcels of land, with a
total area of 18.4891 hectares, situated in Pasig City. Portions of the properties are leased to
different business establishments. In 1986, the registered owner of MPLDC, Jose Y. Campos
(Campos), voluntarily surrendered MPLDC to the Republic of the Philippines.
On 30 September 2002, the Pasig City Assessor’s Office sent MPLDC two notices of tax
delinquency for its failure to pay real property tax on the properties for the period 1979 to
2001 totaling P256, 858,555.86. In a letter dated 29 October 2002, Independent Realty
Corporation (IRC) President Ernesto R. Jalandoni (Jalandoni) and Treasurer Rosario Razon
informed the Pasig City Treasurer that the tax for the period 1979 to 1986 had been paid, and
that the properties were exempt from tax beginning 1987. In letters dated 10 July 2003 and 8
January 2004, the Pasig City Treasurer informed MPLDC and IRC that the properties were not
exempt from tax. On 20 October 2005, the Pasig City Assessor’s Office sent MPLDC a notice of
final demand for payment of tax for the period 1987 to 2005 totaling P389, 027,814.48. On
the same day, MPLDC paid P2, 000,000 partial payment under protest.
ISSUE:
Whether or not respondent City of Pasig, through the City Treasurer and the City
Assessor, acted with grave abuse of discretion amounting to lack or excess of jurisdiction when
it assessed, levied and sold in public auction the "payanig" properties for non-payment of real
property taxes.
28
HELD:
As correctly found by the RTC and the Court of Appeals, the Republic of the Philippines
owns the properties. Campos voluntarily surrendered MPLDC, which owned the properties, to
the Republic of the Philippines. Even as the Republic of the Philippines is now the owner of the
properties in view of the voluntary surrender of MPLDC by its former registered owner,
Campos, to the State, such transfer does not prevent a third party with a better right from
claiming such properties in the proper forum. In the meantime, the Republic of the Philippines
is the presumptive owner of the properties for taxation purposes.
Section 234(a) of Republic Act No. 7160 states that properties owned by the Republic of
the Philippines are exempt from real property tax "except when the beneficial use thereof has
been granted, for consideration or otherwise, to a taxable person." Thus, the portions of the
properties not leased to taxable entities are exempt from real estate tax while the portions of
the properties leased to taxable entities are subject to real estate tax. The law imposes the
liability to pay real estate tax on the Republic of the Philippines for the portions of the
properties leased to taxable entities. It is, of course, assumed that the Republic of the Philippines
passes on the real estate tax as part of the rent to the lessees.
29
RE: WHO ARE LIABLE FOR THE REAL PROPERTY TAXES.
TESTATE ESTATE OF CONCORDIA T. LIM, plaintiff-appellant,

vs.
CITY OF MANILA, JESUS I. CALLEJA, in his capacity as City Treasurer of Manila, NICOLAS
CATIIL, in his capacity as City Assessor of Manila, and/or GOVERNMENT SERVICE INSURANCE
SYSTEM, defendants-appellees.
G.R. No. 90639 February 21, 1990
FACTS:
On February 13, 1969, the late Concordia Lim obtained a real estate loan from the
defendant-appellee Government Service Insurance System (GSIS) in the amount of
P875,488.54, secured by a mortgage constituted on two (2) parcels of land formerly covered by
Transfer Certificates of Title Nos. 64075 and 63076 (later changed to TCT Nos. 125718 and
125719) registered in Manila with a three-story building thereon and located on No. 810
Nicanor Reyes St. (formerly Morayta), Sampaloc, Manila. When Lim failed to pay the loan, the
mortgage was extrajudicially foreclosed and the subject properties sold at public auction. The
GSIS, being the highest bidder, bought the properties. Upon Lim's failure to exercise her right of
redemption, the titles to the properties were consolidated in favor of the GSIS in 1977.
However, pursuant to Resolution No. 188 of the Board of Trustees of the GSIS dated March 29,
1979, the estate of Lim, through Ernestina Crisologo Jose (the administratrix) was allowed to
repurchase the foreclosed properties. On April 11, 1979, a Deed of Absolute Sale was executed.
The defendant City Treasurer of Manila required the plaintiff-appellant to pay the real
estate taxes due on the properties for the years 1977, 1978 and the first quarter of 1979 in the
amount of P67,960.39, before the titles could be transferred to the plaintiff-appellant. The
latter paid the amount under protest.
On July 11, 1979, the plaintiff-appellants counsel sent a demand letter requesting the
GSIS to reimburse the taxes paid under protest. The GSIS refused. On September 6, 1979, a
30
demand letter was sent to the City Treasurer of Manila to refund the amount but the latter also
refused. On March 14, 1980, the plaintiff filed an action before the trial court for a sum of
money for the refund or reimbursement of the real estate taxes paid under protest.
During the pendency of the case, the plaintiff-appellant admitted that the foreclosed
properties had been sold, through the administratrix, to another person.
ISSUES:
(1) Whether or not the trial court has jurisdiction over the action for refund of real estate taxes
paid under protest;
(2) Whether or not plaintiff-appellant has the right to recover.
RULING:
(1)The Court rules that the plaintiff-appellant correctly filed the action for
refund/reimbursement with the lower court as it is the courts which have jurisdiction to try
cases involving the right to recover sums of money.
Section 30 of the Real Property Tax Code is not applicable because what is questioned is
the imposition of the tax assessed and who should shoulder the burden of the tax. There is no
dispute over the amount assessed on the properties for tax purposes. Section 30 pertains to the
administrative act of listing and valuation of the property for purposes of real estate taxation.
In further support of the conclusion that the lower court has jurisdiction to try the instant case,
we note Section 64 of the Real Property Tax Code which provides that a "court shall entertain a
suit assailing the validity of a tax assessed" after the taxpayer shall have paid under protest.
(2) The facts of the case constrain us to rule that the plaintiff-appellant is not liable to
pay the real property tax due for the years 1977, 1978 and first quarter of 1979. The clause in
the Deed of Sale cannot be interpreted to include taxes for the periods prior to April 11, 1979,
the date of repurchase.
To impose the real property tax on the estate which was neither the owner nor the
beneficial user of the property during the designated periods would not only be contrary to law
but also unjust. If plaintiff-appellant intended to assume the liability for realty taxes for the
prior periods, the contract should have specifically stated "real estate taxes" due for the years
1977,1978 and first quarter of 1979. The payments made by the plaintiff-appellant cannot be
construed to be an admission of a tax liability since they were paid under protest and were
done only in compliance with one of the requirements for the consummation of the sale as
directed by the City Treasurer of Manila.
31
Hence, the tax assessed and collected from the plaintiff-appellants is not valid and a
refund by the City government is in order.
The contention of the plaintiff-appellant that the respondent GSIS is liable to reimburse
the tax because the latter allegedly failed to exercise its claim to the tax exemption privilege is
without merit. The exemption is explicitly granted by law and need not be applied for.
RE: WHO ARE LIABLE FOR THE REAL PROPERTY TAXES.
Government Insurance System

Vs.
City Treasurer of Manila
G.R. No. 186242 December 23, 2009
FACTS:
Petitioner GSIS owns or used to own two (2) parcels of land, one located at Katigbak
25th St., Bonifacio Drive, Manila (Katigbak property), and the other, at Concepcion cor.
ArrocerosSts., also in Manila (Concepcion-Arroceros property). The controversy started when
the City Treasurer of Manila addressed a letter dated September 13, 2002 to GSIS President and
General Manager Winston F. Garcia informing him of the unpaid real property taxes due on
the aforementioned properties for years 1992 to 2002 The letter warned of the inclusion of the
subject properties in the scheduled October 30, 2002 public auction of all delinquent
properties in Manila should the unpaid taxes remain unsettled before that date.
In it, GSIS prayed for the nullification of the assessments thus made and that
Respondents City of Manila officials be permanently enjoined from proceedings against GSIS’
property. GSIS would later amend its petition to include the fact that: (a) the Katigbak property,
covered by TCT Nos. 117685 and 119465 in the name of GSIS, has, since November 1991,
been leased to and occupied by the Manila Hotel Corporation (MHC), which has contractually
bound itself to pay any realty taxes that may be imposed on the subject property; and (b) the
Concepcion-Arroceros property is partly occupied by GSIS and partly occupied by the MeTC of
Manila.
ISSUE:
Whether petitioner is exempt from the payment of real property taxes on the property
it leased to a taxable entity.
32
HELD:
The Supreme Court finds that GSIS enjoys under its charter full tax exemption.
Moreover, as an instrumentality of the national government, it is itself not liable to pay real
estate taxes assessed by the City of Manila against its Katigbak and Concepcion-Arroceros
properties. Following the "beneficial use" rule, however, accrued real property taxes are due
from the Katigbak property, leased as it is to a taxable entity. But the corresponding liability for
the payment thereof devolves on the taxable beneficial user. The Katigbak property cannot in
any event be subject of a public auction sale, notwithstanding its realty tax delinquency. This
means that the City of Manila has to satisfy its tax claim by serving the accrued realty tax
assessment on MHC, as the taxable beneficial user of the Katigbak property and, in case of
nonpayment, through means other than the sale at public auction of the leased property.
33
RE: PROCEDURE IN REAL PROPERTY TAXATION.
Jaime Lopez
Vs.
City of Manila
G.R. No. 127139 February 19, 1999
FACTS:
The Local Government Code of 1991 requires the conduct of the general revision of real
property that the provincial, city or municipal assessor shall undertake a general revision of
real property assessments within two (2) years after the effectivity of the Code and every three
(3) years thereafter.
Although R.A. 7160 took effect on January 1, 1992, the revision of real property
assessments prescribed therein was not yet enforced in the City of Manila. However, the
process of real property valuation had already been started and done by the former city
assessor.
On December 12, 1995, the City Council enacted Manila Ordinance No. 7894, entitled:
"An Ordinance prescribed as the Revised Schedule of Fair Market Values of Real Properties the
City of Manila." With the implementation of Manila Ordinance No. 7894, the tax on the land
owned by the petitioner was increased by five hundred eighty percent (580%). With respect to
the improvement on petitioner's property, the tax increased by two hundred fifty percent
(250%).
As a consequence of these increases, petitioner Jaime C. Lopez, filed on March 18, 1996,
a special proceeding for the declaration of nullity of the City of Manila Ordinance No. 7894
with preliminary injunction and prayer for temporary restraining order (TRO). The petition
alleged that Manila Ordinance No. 7894 appears to be "unjust, excessive, oppressive or
confiscatory."
ISSUE:
34
Whether or not the petitioner failed to exhaust all administrative remedies available
and thus contrary to established procedural rules.
HELD:
As a general rule, where the law provides for the remedies against the action of an
administrative board, body, or officer, relief to courts can be sought only after exhausting all
remedies provided. The reason rests upon the presumption that the administrative body, if
given the chance to correct its mistake or error, may amend its decision on a given matter and
decide it properly. Therefore, where a remedy is available within the administrative machinery,
this should be resorted to before resort can be made to the courts, not only to give the
administrative agency the opportunity to decide the matter by itself correctly, but also to
prevent unnecessary and premature resort to courts. This rule, however, admits certain
exceptions.
Applying the same on the case, on the second exception on the rule of exhaustion of
administrative remedies, there is no showing that administrative bodies, viz., The Secretary of
Justice, the City Treasurer, Board of Assessment Appeals, and the Central Board of Assessment
Appeals are in estoppel. On the third exception, it does not appear that Ordinance No. 7894 or
the amendatory Ordinance No. 7905 are patently illegal. Re the fourth exception, in the light of
circumstances as pointed elsewhere herein, the matter does not need a compelling judicial
intervention. On the fifth exception, the claim of the petitioner is not small. Re the sixth
exception, the court does not see any irreparable damage that the petitioner will suffer if he
had paid or will pay under protest as per the ordinance. He could always ask for a refund of
the excess amount he paid under protest or be credited thereof if the administrative bodies
mentioned in the law (R.A. 7180 15) will find that his position is meritorious. Re the seventh
exception, the court is of the opinion that administrative relief provided for in the law are
plain, speedy and adequate. On the eight exception, while the controversy involves public
interest, judicial intervention as the petitioner would like this court to do should be avoided as
demonstrated herein below in the discussion of the third issue. The ninth and tenth exception
obviously are not applicable in the instant case. The petition does not fall under any of the
exceptions to excuse compliance with the rule on exhaustion of administrative remedies.
With regard to question on the legality of a tax ordinance, the remedies available to the
taxpayers are provided under R.A. 7160 where it provides, that the taxpayer may question the
constitutionality or legality of tax ordinance on appeal within thirty (30) days from effectivity
thereof, to the Secretary of Justice. The petitioner after finding that his assessment is unjust,
35
confiscatory, or excessive, must have brought the case before the Secretary of Justice for
question of legality or constitutionality of the city ordinance.
Under Section 226 of R.A. 7160, an owner of real property who in not satisfied with the
assessment of his property may, within sixty (60) days from notice of assessment, appeal to the
Board of Assessment Appeals. Should the taxpayers question the excessiveness of the amount of
tax, he must first pay the amount due, in accordance with Section 252 of R.A. 7160. Then, he
must request the annotation of the phrase "paid under protest" and accordingly appeal to the
Board of Assessment Appeals by filing a petition under oath together with copies of the tax
declarations and affidavits or documents to support his appeal.
The rule is well-settled that courts will not interfere in matters which addressed to the
sound discretion of government agencies entrusted with the regulations of activities coming
under the special technical knowledge and training of such agencies.
36
RE: VIOLATION BY ASSESSORS.
Antonio Callanta, et. al.

Vs.
Office of the Ombudsman
G.R. Nos. 115253-74 January 30, 1998
FACTS:
It is alleged that a-general revision of assessment was conducted by the Office of the
City Assessor in 1988 and sometime thereafter. Notices of assessment together with the new tax
declarations were subsequently sent to the property owners. Thereafter, respondents, without
the authority of the Local Board of Assessment Appeals, reassessed the values of certain
properties, in contravention of Sec. 30 of P.D. 464. The said assessment resulted in the
reduction of assessed values of the properties.
In several similarly worded letter-complaints dated December 19, 1991, the City of
Cebu simultaneously filed criminal and administrative charges against the above-enumerated
officers and staff of the City Assessor's Office for "violations of Section 106 of the Real Property
Tax Code[,] for gross negligence or willful under-assessment of real properties within the city's
taxing jurisdiction and for violation of Sec. 3 (e) of R.A. 3019, otherwise known as the Anti-
Graft and Corrupt Practices Act[,] for the act of causing undue injury to the City Government
by giving private persons unwarranted benefits, advantages or preferences in the discharge of
their official and administrative functions through manifest partiality, evident bad faith or
gross inexcusable negligence by reassessing the real properties of taxpayers without any
authority whatsoever, thereby resulting in the reduction of tax assessments to the prejudice of
the city government .
ISSUE:
37
Whether or not petitioners violated the law by their acts of accommodating requests for
reconsideration of the revised assessments.
HELD:
Under the rules, the Supreme Court stated that the issuance of a notice of assessment by
the local assessor shall be his last action on a particular assessment. On the side of the property
owner, it is this last action which gives him [the] right to appeal to the Local Board of
Assessment Appeals. The above procedure also, does not grant the property owner the remedy
of filing a motion for reconsideration before the local assessor.
The act of herein petitioners in providing the corresponding notices of assessment the
chance for the property owners concerned to file a motion for reconsideration and for acting
on the motions filed is not in accordance with law and in excess of their authority and
therefore constitutes ultra vires acts. Indeed, the long-standing practice adverted to by
petitioners does not justify a continuance of their acts. We cannot sanction such compromising
situations. Henceforth, whenever the local assessor sends a notice to the owner or lawful
possessor of real property of its revised assessed value, the former shall thereafter no longer
have any jurisdiction to entertain any request for a review or readjustment. The appropriate
forum where the aggrieved party may bring his appeal is the LBAA, as provided by law.
38
RE: CONTENTS OF ASSESSMENT.
Manila Electric Company

Vs.
NeliaBarlis
G.R. No. 114231 February 1, 2002
FACTS:
Two letters were sent to MERALCO on September 3, 1986 and October 31, 1989. Both
are in a form that may be familiar to most of us. The heading says "Patalastas", or "Notice" and
the opening paragraph after the usual "Dear ____" informs the addressee that, according to the
records of the office, the tax on the properties indicated thereunder had not yet been paid."
There is then a listing, for each property referred to, of the tax declaration number, the
location, the assessed value, the year of the delinquency, the tax due, the penalty, and the total
of the last two. Politely, the hope is expressed that the notice will not be disregarded since the
dire consequence of long-standing delinquency is an auction sale of the property, as mandated
by law. Finally, the letter recognizes that the addressee may, after all, have actually paid,
contrary to what the office records indicate, and thus requests the taxpayer to present proof of
payment and ignore the notice.
Petitioner moves for reconsideration and questions the finding that what was sent to it
by former Municipal Treasurers Norberto A. San Mateo and Eduardo A. Alon were the tax
assessment notices contemplated by law and not mere collection notices. Movant-
petitioner stated that having received mere collection notices, how could petitioner avail of the
proper administrative remedies in protesting an erroneous tax assessment before the LBAA?
ISSUE:
Whether or not the earlier decision of the Supreme Court correctly held that indeed an
assessment was made.
39
HELD:
No. A notice of assessment as provided for in the Real Property Tax Code should
effectively inform the taxpayer of the value of a specific property, or proportion thereof subject
to tax, including the discovery, listing, classification, and appraisal of
properties. The September 3, 1986 and October 31, 1989 notices do not contain the essential
information that a notice of assessment must specify, namely, the value of a specific property or
proportion thereof which is being taxed, nor does it state the discovery, listing, classification
and appraisal of the property subject to taxation. In fact, the tenor of the notices bespeaks an
intention to collect unpaid taxes, thus the reminder to the taxpayer that the failure to pay the
taxes shall authorize the government to auction off the properties subject to taxes or, in the
words of the
notice,“Ipinaaalaala po lamang, ang sino mang magpabaya omagkautang ng buwis ng maluwat
ay isusubasta (Auction Sale) ng pamahalaan ang inyong ari-arian ng naaayon sa batas.”
The petitioner is also correct in pointing out that the last paragraph of the said notices
that inform the taxpayer that in case payment has already been made, the notices may be
disregarded is an indication that it is in fact a notice of collection.
40
RE: WHO IS ENTITLED TO THE NOTICE OF ASSESSMENT?
Antonio Talusan
Vs.
HerminigildoTayag
G.R. No. 133698 April 4, 2001
FACTS:
Petitioners alleged that on December 7, 1981, they had acquired the condominium
from Elias Imperial, the original registered owner, for P100,000. The sale was purportedly
evidenced by a Deed of Sale which, however, had not and thenceforth never been registered
with the Register of Deeds.
Petitioners also averred that on December 9, 1985, Baguio City Treasurer Juan
Hernandez sold the property at a public auction due to nonpayment of delinquent real estate
taxes thereon. The property was sold to Respondent HerminigildoTayag for P4, 400 which
represented the unpaid taxes.
Thus, petitioners filed a Complaint seeking the annulment of the auction sale. They cited
irregularities in the proceedings and noncompliance with statutory requirements.
ISSUES:
Who should be notified with respect to the assessment of the real property in question?
HELD:
The Supreme Court said in this regard unlike land registration proceedings which
are in rem, cases involving an auction sale of land for the collection of delinquent taxes are in
personam. Thus, notice by publication, though sufficient in proceedings in rem, does not as a
rule satisfy the requirement of proceedings in personam. As such, mere publication of the
notice of delinquency would not suffice, considering that the procedure in tax sales is in
41
personam. It was, therefore, still incumbent upon the city treasurer to send the notice of tax
delinquency directly to the taxpayer in order to protect the interests of the latter.
In the present case, the notice of delinquency was sent by registered mail to the
permanent address of the registered owner in Manila. In that notice, the city treasurer of
Baguio City directed him to settle the charges immediately and to protect his interest in the
property. Under the circumstances, we hold that the notice sent by registered mail adequately
protected the rights of the taxpayer, who was the registered owner of the condominium unit.
For purposes of the real property tax, the registered owner of the property is deemed the
taxpayer. Hence, only the registered owner is entitled to a notice of tax delinquency and other
proceedings relative to the tax sale. Not being registered owners of the property, petitioners
cannot claim to have been deprived of such notice. In fact, they were not entitled to it. For
purposes of real property taxation, the registered owner of a property is deemed the taxpayer
and, hence, the only one entitled to a notice of tax delinquency and the resultant proceedings
relative to an auction sale. Petitioners, who allegedly acquired the property through an
unregistered deed of sale, are not entitled to such notice, because they are not the registered
owners.
42
RE: APPEAL TO THE SECRETARY OF JUSTICE, RE NEWLY ENACTED TAX ORDINANCE.
Hon. Franklin Drilon

Vs.
Mayor Alfredo Lim
G.R. No. 112497 August 4, 1994
FACTS:
The Secretary of Justice had, on appeal to him of four oil companies and a taxpayer,
declared Ordinance No. 7794, otherwise known as the Manila Revenue Code, null and void for
non-compliance with the prescribed procedure in the enactment of tax ordinances and for
containing certain provisions contrary to law and public policy. In a petition for certiorari filed
by the City of Manila, the Regional Trial Court of Manila revoked the Secretary's resolution and
sustained the ordinance, holding inter alia that the procedural requirements had been
observed. More importantly, it declared Section 187 of the Local Government Code as
unconstitutional because of its vesture in the Secretary of Justice of the power of control over
local governments in violation of the policy of local autonomy mandated in the Constitution
and of the specific provision therein conferring on the President of the Philippines only the
power of supervision over local governments.
ISSUE:
On appeal to the Secretary of Justice on matters of real property tax, what rules should
be observed?
HELD:
The procedure for approval of local tax ordinances and revenue measures shall be in
accordance with the provisions of the Local Government Code: Provided, That public hearings
shall be conducted for the purpose prior to the enactment thereof; Provided, further, That any
43
question on the constitutionality or legality of tax ordinances or revenue measures may be
raised on appeal within thirty (30) days from the effectivity thereof to the Secretary of Justice
who shall render a decision within sixty (60) days from the date of receipt of the appeal:
Provided, however, That such appeal shall not have the effect of suspending the effectivity of
the ordinance and the accrual and payment of the tax, fee, or charge levied therein: Provided,
finally, That within thirty (30) days after receipt of the decision or the lapse of the sixty-day
period without the Secretary of Justice acting upon the appeal, the aggrieved party may file
appropriate proceedings with a court of competent jurisdiction.
Section 187 of the Local Government Code authorizes the Secretary of Justice to review
only the constitutionality or legality of the tax ordinance and, if warranted, to revoke it on
either or both of these grounds. When he alters or modifies or sets aside a tax ordinance, he is
not also permitted to substitute his own judgment for the judgment of the local government
that enacted the measure. Secretary Drilon did set aside the Manila Revenue Code, but he did
not replace it with his own version of what the Code should be. He did not pronounce the
ordinance unwise or unreasonable as a basis for its annulment. He did not say that in his
judgment it was a bad law. What he found only was that it was illegal. All he did in reviewing
the said measure was determine if the petitioners were performing their functions in
accordance with law, that is, with the prescribed procedure for the enactment of tax
ordinances and the grant of powers to the city government under the Local Government Code.
As the Supreme Court sees it that was an act not of control but of mere supervision.
44
Antonio Reyes
Vs.
Court of Appeals
G.R. No. 118233 December 10, 1999
FACTS:
The petition herein arose when the Sangguniang Bayan of San Juan, Metro Manila
implemented several tax ordinances. On May 21, 1993, petitioners filed an appeal with the
Department of Justice (DOJ) assailing the constitutionality of these tax ordinances allegedly
because they were promulgated without previous public hearings thereby constituting
deprivation of property without due process of law, however such appeal was nevertheless
dismissed for having been filed out of time. The DOJ citing Section 187, R.A. No. 7160, stating
that:“It appears that the tax ordinances in question took effect on September 24, 1992, in the
case of Tax Ordinance No. 87, until October 22, 1992, in the case of Tax Ordinance Nos. 91
and 95, and until October 29, 1992, in the case of Tax Ordinance Nos. 100 and 101, or more
than thirty (30) days from the effectivity thereof when the appeal was filed and received by this
Department on May 21, 1993 and therefore not in accordance with the requirements provided
for under Section 187 of the Local Government Code of 1991.
ISSUE:
Whether or not the Appeal to the DOJ assailing the tax ordinance was timely filed.
HELD:
Clearly, under Section 187 of the Local Government Code, the law requires that the
dissatisfied taxpayer who questions the validity or legality of a tax ordinance must file his
appeal to the Secretary of Justice, within 30 days from effectivity thereof. In case the Secretary
45
decides the appeal, a period also of 30 days is allowed for an aggrieved party to go to court but
if the Secretary does not act thereon, after the lapse of 60 days, a party could already proceed to
seek relief in court. These three separate periods are clearly given for compliance as a
prerequisite before seeking redress in a competent court. Such statutory periods are set to
prevent delays as well as enhance the orderly and speedy discharge of judicial functions. For
this reason the courts construe these provisions of statutes as mandatory.
A municipal tax ordinance empowers a local government unit to impose taxes. The
power to tax is the most effective instrument to raise needed revenues to finance and support
the myriad activities of local government units for the delivery of basic services essential to the
promotion of the general welfare and enhancement of peace, progress, and prosperity of the
people. Consequently, any delay in implementing tax measures would be to the detriment of
the public. It is for this reason that protests over tax ordinances are required to be done within
certain time frames. In the instant case, it is our view that the failure of petitioners to appeal to
the Secretary of Justice within 30 days as required by Sec. 187 of R.A. 7160 is fatal to their
cause.
46
Hagonoy Market Vendor Association

Vs.
Municipality of Hagonoy
GR no. 137621 February 6, 2002
FACTS:
On October 1, 1996, the Sangguniang Bayan of Hagonoy, Bulacan enacted Ordinance
KautusanBlg. 28 which increased the stall rentals of the Market vendors in Hagonoy.Posting of
the said ordinance was made on November 4-25 1996.Subsequently, On December 8, 1997,
the petitioner’s President filed an appeal with the Secretary of Justice assailing the
constitutionality of the tax ordinance being unaware of its posting. Respondent on the other
hand, opposed the appeal contending that the ordinance took effect on October 6, 1996 and
that the ordinance, as approved, was posted as required by law. Hence, it was pointed out that
petitioner’s appeal, made over a year later, was already time-barred.
The Secretary of Justice ruled on the matter dismissing the appeal on the ground that it
was filed out of time, having been filed beyond thirty (30) days from the effectivity of the
Ordinance on October 1, 1996, as prescribed under Section 187 of the 1991 Local
Government Code
ISSUE:
Whether or not the Appeal to the Secretary of Justice was time barred?
HELD:
Yes. The Supreme Court held that under Section 187 of the Local Government Code, it
requires that an appeal of a tax ordinance or revenue measure should be made to the Secretary
of Justice within thirty (30) days from effectivity of the ordinance and even during its
pendency; the effectivity of the assailed ordinance shall not be suspended. In the case at bar,
47
Municipal Ordinance No. 28 took effect in October 1996. Petitioner filed its appeal only in
December 1997, more than a year after the effectivity of the ordinance in 1996. Clearly, the
Secretary of Justice correctly dismissed it for being time-barred. At this point, it is apropos to
state that the timeframe fixed by law for parties to avail of their legal remedies before
competent courts are not a “mere technicality” that can be easily brushed aside. The periods
stated in Section 187 of the Local Government Code are mandatory. Ordinance No. 28 is a
revenue measure adopted by the municipality of Hagonoy to fix and collect public market stall
rentals. Being its lifeblood, collection of revenues by the government is of paramount
importance. The funds for the operation of its agencies and provision of basic services to its
inhabitants are largely derived from its revenues and collections. Thus, it is essential that the
validity of revenue measures is not left uncertain for a considerable length of time. Hence, the
law provided a time limit for an aggrieved party to assail the legality of revenue measures and
tax ordinances.
48
Alejandro Ty
Vs.
Honorable Aurelio Trampe
G.R. No. 117577 December 1, 1995
FACTS:
Petitioners herein Alejandro B. Ty is and MVR Picture Tube, Inc., a corporation duly
organized and existing under Philippine laws are registered owners of lands and buildings in
said Municipality (now City) of Pasig. The case herein arose when a notice of assessment was
sent to the petitioner increasing their real estate taxes. The petitioners contended that such
assessment made by the municipality of Pasig was in violation of PD921 which states that the
schedule of values of real properties in the Metropolitan Manila area shall be prepared jointly
by the city assessors in the districts created therein and thus is the basis of the real estate tax,
thus, a collegial action of all assessors in the district are needed as opposed to that under the
local government Code which does not necessarily require such joint action. Not satisfied of the
assessment, petitioners on 29 March 1994 filed with the Regional Trial Court Petition for to
declare null and void the new tax assessments and to enjoin the collection of real estate taxes
based on said assessments which denied the same. The case was elevated to the Court of appeals
and ruled that petitioners failed to avail of either Section 226 of R.A. 7160, that is by appealing
the assessment of their properties to the Board of Assessment Appeal within sixty 160) days
from the date of receipt of the written Notice of Assessment or by paying the real estate tax
under protest, thus they failed to exhaust administrative remedies resulting to a premature
filing of the case.
ISSUE:
49
Whether or not the case is premature because petitioners did not exhaust all
administrative remedies (not appealing with the CBAA and for having not paid under protest
made).
HELD:
No. The Supreme Court held that although as a rule, administrative remedies must first
be exhausted before resort to judicial action can prosper, there is a well-settled exception in
cases where the controversy does not involve questions of fact but only of law. In the present
case, the parties, even during the proceedings in the lower court on 11 April 1994, already
agreed "that the issues in the petition are legal”, and thus, no evidence was presented in said
court. In laying down the powers of the Local Board of Assessment Appeals, R.A. 7160 provides
in Sec. 229 (b) that the proceedings of the Board shall be conducted solely for the purpose of
ascertaining the facts . . . ." It follows that appeals to this Board may be fruitful only where
questions of fact are involved.
Again, the protest contemplated under Sec. 252 of R.A. 7160 is needed where there is a
question as to the reasonableness of the amount assessed. Hence, if a taxpayer disputes the
reasonableness of an increase in a real estate tax assessment, he is required to "first pay the tax"
under protest. Otherwise, the city or municipal treasurer will not act on his protest. In the case
at bench however, the petitioners are questioning the very authority and power of the assessor,
acting solely and independently, to impose the assessment and of the treasurer to collect the
tax. These are not questions merely of amounts of the increase in the tax but attacks on the very
validity of any increase.
Finally, it will be noted that in the consolidated cases of Mathay/Javier/Puyat-Reyes, the
Supreme Court referred the petitions (which similarly questioned the schedules of market
values prepared solely by the respective assessors in the local government units concerned) to
the Board of Assessment Appeal, not for the latter, to exercise its appellate jurisdiction, but
rather to act only as a fact-finding commission. In the instant proceedings, there are no such
factual issues. Therefore, there is no reason to require petitioners to exhaust the administrative
remedies provided in R.A. 7160, nor to mandate a referral by this Court to said Board.
50
RE: APPEAL TO THE BOARD OF ASSESSMENT APPEALS.
Systems Plus Computer of Caloocan City

Vs.
LGU of Caloocan
GR. No. 146382 August 7, 2003
FACTS:
Petitioner herein Systems Plus is a non-stock and non-profit educational institution
enjoying property tax exemption from the local government on its buildings but not on the
parcels of land which petitioner is renting from its sister companies, Consolidated Assembly
and Pair Management and Development Corporation. On January 8, 1998, petitioner requested
respondent city government of Caloocan to as well include to its tax exemption such parcel of
land leased out to it by its sister companies for being used actually, directly and exclusively for
educational purposes. However, this petition was denied. In light of such denial, the petitioner
and the Consolidated Assembly and Pair Management, entered into separate agreements which
in effect novated their existing contracts of lease to donation and subsequently submitted a
duly notarized certification jointly issued by Consolidated Assembly and Pair Management to
the effect that they no longer received income by way of rentals from the subject properties.
Such information was submitted to the City Assessor who nevertheless, denied the same
exemption again stating among others that while the beneficial use of the properties being
sought to be exempt from Real Property Taxes were donated to SYSTEMS PLUS COMPUTER
COLLEGE, there is no showing that the same are "actually, directly and exclusively" used either
for religious, charitable, or educational purposes. Twice debunked, petitioner filed a petition for
mandamus with the respondent Regional Trial Court.
ISSUE:
51
(1) Whether or not mandamus does not lie against the public respondents:
(2) Whether or not petitioner failed to exhaust available administrative remedies for
filing its case directly to the RTC instead of the Local Assessment Board first.
HELD:
1. No. Mandamus does not lie against the respondent City Assessor in the exercise of his
function of assessing properties for taxation purposes. While its duty to conduct assessments is
a ministerial function, the actual exercise thereof is necessarily discretionary. Well-settled is
the rule that mandamus may not be availed of to direct the exercise of judgment or discretion
in a particular way, or to retract or reverse an action already taken in the exercise of either
2. Yes. The Supreme Court held that Under Section 226 of RA 7160, the remedy of
appeal to the Local Board of Assessment Appeals is available from an adverse ruling or action of
the provincial, city or municipal assessor in the assessment of property, thus:
Section 226.Local Board of Assessment Appeals. -Any owner or person having legal interest in
the property who is not satisfied with the action of the provincial, city or municipal assessor in
the assessment of his property may, within sixty (60) days from the date of receipt of the
written notice of assessment, appeal to the Board of Assessment Appeals of the province or city
by filing a petition under oath in the form prescribed for the purpose, together with copies of
the tax declarations and such affidavits or documents submitted in support of the appeal.
It is then well settled that the determination made by the respondent City Assessor with
regard to the taxability of the subject real properties squarely falls within its power to assess
properties for taxation purposes is subject to appeal before the Local Board of Assessment
Appeals.
The petitioner cannot bypass the authority of the concerned administrative agencies
and directly seek redress from the courts even on the pretext of raising a supposedly pure
question of law without violating the doctrine of exhaustion of administrative remedies. Hence,
when the law provides for remedies against the action of an administrative board, body, or
officer, as in the case at bar, relief to the courts can be made only after exhausting all remedies
provided therein. Otherwise stated, before seeking the intervention of the courts, it is a
precondition that petitioner should first avail of all the means afforded by the administrative
processes.
52
RE: APPEAL TO THE BOARD OF ASSESSMENT APPEALS.
Dr. Pablo Olivares

Vs.
Mayor Joey Marquez
G.R. No. 155591 September 22, 2004
FACTS:
The petition arose when petitioners Olivarez filed a petition for certiorari, prohibition
and mandamus with the RTC on August 18, 1998, questioning the assessment and levy made
by the Office of the City Treasurer of Parañaque City on petitioners’ properties. According to
them, they have protested said notice of assessment , and sought reinvestigation on the grounds
that: (1) some of the taxes being collected have already prescribed and may no longer be
collected as provided in Section 194 of the Local Government Code of 1991; (2) some
properties have been doubly taxed/assessed; (3) some properties being taxed are no longer
existent; (4) some properties are exempt from taxation as they are being used exclusively for
educational purposes; and (5) some errors are made in the assessment and collection of taxes
due on petitioners’ properties. Respondents on the other hand filed a motion to dismiss Civil
Case on the ground among others that the trial court has no jurisdiction over tax assessment
matters and that petitioners failed to comply with the requirements of a tax protest. Petitioners
opposed the motion, arguing that the trial court has jurisdiction over the case as the issue
raised pertains to the authority of respondents to assess and collect the real estate taxes.
ISSUE:
Whether or not the civil case filed by the petitioners be dismissed on the ground that the
Regional Trial Court in this case has jurisdiction on tax assessment matters.
HELD:
53
Yes. The Court is not convinced with petitioners’ argument that their recourse of filing a
petition before the trial court is proper as they are questioning the very authority of
respondents to assess and collect the real estate taxes due on their properties, and not merely
the correctness of said amount. The well-established rule is that the allegations in the
complaint and the character of the relief sought determine the nature of an action. A perusal of
the petition before the RTC plainly shows that what is actually being assailed is the correctness
of the assessments made by the local assessor of Parañaque on petitioners’ properties. The
allegations in the said petition purportedly questioning the assessor’s authority to assess and
collect the taxes were obviously made in order to justify the filing of the petition with the RTC.
In fact, there is nothing in the said petition that supports their claim regarding the assessor’s
alleged lack of authority. In the case of Ty vs. Trampe,cited by petitioners, the Court held that
jurisdiction over the case was properly vested with the trial court because what was being
questioned is the very authority and power of the assessor, acting solely and independently, to
impose the assessment and of the treasurer to collect the tax, and not merely of amounts of the
increase in the tax.
As such, The Court held that, should the taxpayer/real property owner question the
excessiveness or reasonableness of the assessment, Section252directs that the taxpayer should
first pay the tax due before his protest can be entertained. There shall be annotated on the tax
receipts the words "paid under protest." It is only after the taxpayer has paid the tax due that he
may file a protest in writing within thirty days from payment of the tax to the Provincial, City
or Municipal Treasurer, who shall decide the protest within sixty days from receipt. In no case
is the local treasurer obliged to entertain the protest unless the tax due has been paid.
If the local treasurer denies the protest or fails to act upon it within the 60-day period
provided for in Section 252, the taxpayer/real property owner may then appeal or directly file
a verified petition with the LBAA within sixty days from denial of the protest or receipt of the
notice of assessment, as provided in Section 226 of R.A. No. 7160. And, if the taxpayer is not
satisfied with the decision of the LBAA, he may elevate the same to the CBAA, which exercises
exclusive jurisdiction to hear and decide all appeals from the decisions, orders and resolutions
of the Local Boards involving contested assessments of real properties, claims for tax refund
and/or tax credits or overpayments of taxes. An appeal may be taken to the CBAA by filing a
notice of appeal within thirty days from receipt thereof. From the CBAA, the dispute may then
be taken to the Court of Appeals by filing a verified petition for review under Rule 43 of the
Rules of Court.
54
RE: PROTEST OF THE ASSESSMENT.
Cagayan Robina Sugar Milling Corporation

Vs.
Court of Appeals
G.R. No. 122451 12 October 2000
FACTS:
In 1990, the Assets Privatization Trust (APT) offered for sale all the assets and
properties of the Cagayan Sugar Corporation (CASUCO), which had been foreclosed and
transferred to APT by the Development Bank of the Philippines. By virtue of which, an auction
sale was conducted and the petitioner was the highest bidder. Among the properties bought by
petitioner were sugar mill machineries located at the CASUCO millsite in Piat, Cagayan. On
October 18, 1990, the Provincial Assessor of Cagayan issued a "Notice of Assessment of Real
Property" to petitioner covering the machineries installed at the CASUCO millsite.
Subsequently, on February 8, 1991, petitioner appealed the assessment to the LBAA, on the
ground that it was excessive, erroneous, and unjust.
On April 18, 1992, petitioner prepared an Appeal of Assessment addressed to the LBAA
but did not file the same with the CBAA. It was only on November 25, 1992, that petitioner
filed with the CBAA an Appeal of Assessment identical with its earlier appeal dated April 18,
1992. On May 17, 1994, the CBAA dismissed petitioner's appeal on the ground that it was
time-barred.
ISSUE:
Whether or not the protest of petitioner has merit.
Whether or not the appellate court err in upholding the dismissal of petitioner's appeal
to the CBAA for being time-barred.
55
HELD:
1. No. Petitioner insists that its protest has merit; in view of a 1st Endorsement Letter of
the Deputy Executive Director of the Bureau of Local Government Finance dated May 17,
1996, directing the Provincial Assessor of Cagayan to recompute the market value of
petitioner's machineries. However, said letter referred to the protested assessment done by the
Provincial Assessor. There was no reference at all to the assessment of petitioner's machineries,
which was done by the LBAA, which revised and corrected the protested appraisal by the
Provincial Assessor. Said letter did not find erroneous the re-assessment done by the LBAA,
which was subsequently upheld by both the CBAA and the Court of Appeals. Findings of fact of
administrative agencies and quasi-judicial bodies, which have acquired expertise because their
jurisdiction is confined to specific matters, are generally accorded not only respect, but finality
when affirmed by the Court of Appeals.
2. Yes. The appeal found to be time-barred is not petitioner's appeal of the Provincial
Assessor's assessment to the LBAA, but the resolution of the LBAA sought to be appealed to the
CBAA. As found by the Court of Appeals: Records show that the Petitioner had already received,
as of April 18, 1992, the Resolution of the Respondent LBAA dated April 1, 1992, denying
Petitioner's appeal. The Petitioner, thus, had only until May 18, 1992, to appeal the questioned
Resolution of Respondent LBAA. However, it was only on November 25, 1992 when the
Petitioner lodged its appeal with the Respondent CBAA…By then, the thirty (30) day
reglementary period to perfect Petitioner's appeal had long elapsed
Based on the records, we hold that the respondent court did not err in finding
petitioner's appeal to the CBAA time-barred. The applicable provision is Section 34of P.D. No.
464, and not Section 30. Where the owner or administrator of a property or an assessor is not
satisfied with the decision of the Local Board of Assessment Appeals, he may, within thirty days
from the receipt of the decision, appeal to the Central Board of Assessment Appeals. Petitioner
does not dispute respondent court's findings that petitioner received on April 18, 1992, the
LBAA resolution denying its appeal and that it had only until May 18, 1992, to appeal the local
board's resolution to the CBAA. Petitioner, however, only filed its appeal with the CBAA on
November 25, 1992 or way beyond the period to perfect an appeal. No error was thus
committed by the CBAA when it dismissed petitioner's appeal for having been filed out of time
and the appellate court was correct in affirming the dismissal. Well-entrenched is the rule that
the perfection of an appeal within the period therefor is both mandatory and jurisdictional, and
that failing in this regard renders the decision final and executory.
56
Manila Electric Cooperative

Vs.
NeliaBarlis
G.R. No. 114231 May 18, 2001
FACTS:
The petitioner herein, Manila Electric Company (MERALCO), a duly-organized
corporation in the Philippines from 1968 to 1972 is engaged in the distribution of electricity,
erected four (4) power generating plants in Sucat, Muntinlupa. From 1975 to 1978 MERALCO
paid the real property taxes on the said properties on the basis of their assessed value as stated
in the tax declarations. In 1985, the Offices of the Municipal Assessor and Municipal Treasurer
of Muntinlupa, upon review of the records pertaining to assessments and collection of real
property taxes, discovered, among others, that MERALCO, for the period beginning 1976 to
1978, misdeclared and/or failed to declare for taxation purposes a number of real properties,
consisting of several equipment and machineries, found in the said power plants as observed
on its sale to NAPOCOR of its powerplant. The Municipal Assessor of Muntinlupa then declared
and assessed the subject real properties for taxation purposes. By virtue of such, Municipal
Treasurer Eduardo A. Alon forwarded a supplemental collection notice to MERALCO, dated 31
October 1989 and a formal notice, demanding the immediate payment of their unpaid real
property taxes inclusive of penalties and accrued interest. Immediately, MERALCO filed before
the Regional Trial Court (RTC) a Petition for Prohibition with Prayer for Writ of Preliminary
Mandatory Injunction and/or Temporary Restraining Order (TRO) praying, among others, that
a TRO be issued to enjoin the Municipal Treasurer of Muntinlupa from enforcing the warrants
of garnishment against their accounts in several banks.
ISSUE:
57
Whether or not the trial court is without authority to address the alleged irregularity
in the issuance of the notices of assessment without prior tax payment, under protest, by
petitioner.
HELD:
Yes. A notice of assessment should effectively inform the taxpayer of the value of a
specific property, or proportion thereof subject to tax, including the discovery, listing,
classification, and appraisal of properties. From the tone and content of the notices, the 3
September 1986 notices sent by former Municipal Treasurer Norberto A. San Mateo to
petitioner MERALCO are the notices of assessment required by the law as it merely informed
the petitioner that it has yet to pay the taxes in accordance with the reassessed values of the
real property mentioned therein. The 31 October 1989 notices sent by Municipal Treasurer
Eduardo A. Alon to MERALCO is likewise of the same character. Only the letter dated 20
November 1989 sent by Municipal Treasurer Eduardo A. Alon to petitioner MERALCO could
qualify as the actual notice of collection since it is an unmistakable demand for payment of
back taxes.
Be that as it may, petitioner was correct when it pointed out that the Municipal
Treasurer, contrary to that required by law, issued the notices of assessment. However, the trial
court is without authority to address the alleged irregularity in the issuance of the notices of
assessment without prior tax payment, under protest, by petitioner. Section 64 of the RPTC,
prohibits courts from declaring any tax invalid by reason of irregularities or informalities in
the proceedings of the officers charged with the assessment or collection of taxes except upon
the condition that the taxpayer pays the just amount of the tax, as determined by the court in
the pending proceeding. As petitioner failed to make a protest payment of the tax assessed, any
argument regarding the procedure that should have been observed in the preparation of the
notice of assessment and collection is futile as the trial court in such a scenario cannot assume
jurisdiction over the matter.
58

Vs.
NeliaBarlis
G.R. No. 114231 February 1, 2002
FACTS:
Petitioner herein alleges that the September 3, 1986 and October 31, 1989 notices
were actually tax collection notices and not tax assessment notices, thus, petitioner was not able
to avail of the proper administrative remedies in protesting an erroneous tax assessment before
the LBAA. The petition herein is then brought to assail the decision of the Court that RTC had
no jurisdiction to entertain petitioner’s Petition for Prohibition to enjoin respondent Municipal
Treasurer of Muntinlupa from garnishing petitioner’s bank deposits to the extent of its unpaid
real estate taxes inasmuch as petitioner did not comply with the legal requirement of paying
under protest the taxes assessed against it as provided for in Real Property Tax Code.
ISSUE:
1. Whether or not the Notices are notices o assessment.
2.Whether or not the notice sent to petitioners are mere notices of collection and not
notices of assessment thus depriving petitioner administrative remedies such as protest.
HELD:
1. No, The September 3, 1986 and October 31, 1989 notices do not contain the
essential information that a notice of assessment must specify, namely, the value of a specific
property or proportion thereof which is being taxed, nor does it state the discovery, listing,
classification and appraisal of the property subject to taxation. In fact, the tenor of the notices
bespeaks an intention to collect unpaid taxes, thus the reminder to the taxpayer that the failure
59
to pay the taxes shall authorize the government to auction off the properties subject to taxes or,
in the words of the notice, “Ipinaaala-alapolamang, angsinomangmagpabaya o
magkautangngbuwisngmaluwat ay isusubasta (Auction Sale) ngpamahalaananginyongari-
arianngnaaayonsabatas.” The petitioner is also correct in pointing out that the last paragraph of
the said notices that inform the taxpayer that in case payment has already been made, the
notices may be disregarded is an indication that it is in fact a notice of collection.
Whether or not a tax assessment had been made and sent to the petitioner prior to the
collection of back taxes by respondent Municipal Treasurer is of vital importance in
determining the applicability of Section 64 of the Real Property Tax Code inasmuch as payment
under protest is required only when there has in fact been a tax assessment, the validity of
which is being questioned. Concomitantly, the doctrine of exhaustion of administrative
remedies finds no application where no tax assessment has been made.
2. Ordinarily, in the light of the foregoing facts, we would remand this case to the trial
court pursuant to the basic tenet that this Court is not a trier of facts. Under the present
circumstances, however, a remand of this case to the trial court would be a superfluity. Hence,
should the trial court find that there has indeed been a prior assessment, petitioner’s petition
for prohibition would be dismissed for failure to pay under protest and to exhaust
administrative remedies. However, a finding by the trial court that there was no tax assessment
made prior to the collection of taxes would render inapplicable the requirement of paying
under protest and exhausting administrative remedies by first appealing to the LBAA before the
trial court takes cognizance of petitioner’s petition for prohibition. Unfortunately therefore,
even if the trial court can assume jurisdiction over the said petition for prohibition, there is
nothing substantial left for it to do.
60

Vs.
NeliaBarlis
G.R. No. 114231 June 29, 2004
FACTS:
In 1985, the Municipal Assessor of Muntinlupa, while reviewing records pertaining to
assessment and collection of real property taxes, discovered, among others, that MERALCO, for
the period, 1976 to 1978, misdeclared and/or failed to declare for taxation purposes a number
of real properties consisting of several equipment and machineries found in the said power
plants.
Thereafter, on September 3, 1986, the Municipal Treasurer of Muntinlupa issued three
notices to MERALCO, requesting it to pay the full amount of the claimed deficiency in the real
property taxes covering the machinery and equipment found in the said power plants. He
warned the taxpayer that its properties could be sold at public auction unless the tax due was
paid. Still, MERALCO did not pay the assessed tax, nor take steps to question the tax assessed as
contained in the said notices. In such regard judicial actions were brought by Meralco. In a
resolution dated May 18, 2001, the Court held that the appellate court correctly ruled that the
Regional Trial Court of Makati, Branch 66, had no jurisdiction to entertain the petition for
prohibition filed by the petitioner because the latter failed to first pay under protest the
deficiency taxes assessed against it, as required. Moreover, the Court stated that the Notices sent
by the respondent to the petitioner dated September 3, 1986 and October 31, 1989 were in the
nature of tax assessments; hence, the petitioner should have paid under protest the deficiency
tax assessed against it. Petitioner received a copy of this Court’s Decision on June 18, 2001 and
filed, on July 3, 2001, a motion for reconsideration thereon . The Court, however, reversed its
ruling that the notices sent by the respondent to the petitioner were notices of assessment. It
categorically stated that the notices were, in fact, notices of collection.
61
ISSUE:
Whether the Court’s May 18, 2001 Decision should be set aside and factual findings
contained in the Court’s February 1, 2002 Resolution regarding the same case be upheld.
HELD:
Upon a careful review of the records of this case and the applicable jurisprudence, we
find that it is the contention of the petitioner and the ruling of this Court in its February 1,
2002 Resolution that upheld the petitioner’s contention and ruled that the aforequoted
letters/notices are not the notices of assessment envisaged in Section 27 of P.D. No. 464 which
is correct. Indeed, even the respondent admitted in his comment on the petition that:
Indeed, respondent did not issue any notice of assessment because statutorily, he is not
the proper officer obliged to do so. Under Chapter VIII, Sections 90 and 90-A of the Real
Property Tax Code, the functions related to the appraisal and assessment for tax purposes of
real properties situated within a municipality pertains to the Municipal Deputy Assessor and
for the municipalities within Metropolitan Manila, the same is lodged, pursuant to P.D. No.
921, on the Municipal Assessor.
The petitioner’s action for prohibition was not premature. Hence, the Court of Appeals
erred in rendering judgment granting the petition for certiorari of the respondent
62

Vs.
Province of Quezon
G.R. No. 171586 January 25, 2010
FACTS:
Respondent herein, the Province of Quezon assessed Mirant Pagbilao Corporation
(Mirant) for unpaid real property taxes for the machineries located in its power plant in
Pagbilao, Quezon. Napocor,petitioner on the other hand entered into a Build-Operate-Transfer
(BOT) Agreement (entitled Energy Conversion Agreement) with Mirant, and as such was
furnished a copy of the tax assessment. Napocor, not Mirant protested the assessment before
the Local Board of Assessment Appeals (LBAA), claiming entitlement to the tax exemptions
provided under Section 234 of the Local Government Code (LGC) and if not entitled therein to
some other privileges. In the Court’s Decision of July 15, 2009, it ruled that Napocor is not
entitled to any of these claimed tax exemptions and privileges on the basis primarily of the
defective protest filed by the Napocor and found Napocor to have not filed a valid protest
against the realty tax assessment because it did not possess the requisite legal standing.
Napocor on the other hand posited that Mirant only possessed naked title to the machineries
and they are the ones who actually has legal interest therein.
ISSUE:
1. Whether or not NAPOCOR was the proper party to protest the real property tax
assessment issued over its power plant in Pagbilao, Quezon.
2. Whether or not payment under protest is required before an appeal to the LBAA can
be made
HELD:
63
1. No. The Supreme Court held that the legal interest should be one that is actual and
material, direct and immediate, not simply contingent or expectant given the special nature of
a BOT agreement as discussed in the cited case, we find Article 1503 inapplicable to define the
contract between Napocor and Mirant, as it refers only to ordinary contracts of sale. We thus
declared in Tatad v. Garcia that under BOT agreements, the private corporations/investors are
the owners of the facility or machinery concerned. Apparently, even Napocor and Mirant
recognize this principle; Article 2.12 of their BOT Agreement provides that "until the Transfer
Date, Mirant shall, directly or indirectly, own the Power Station and all the fixtures, fitting,
machinery and equipment on the Site. Mirant shall operate, manage, and maintain the Power
Station for the purpose of converting fuel of Napocor into electricity."
Moreover, if Napocor truly believed that it was the owner of the subject machineries, it
should have complied with Sections 202 and 206 of the LGC which obligates owners of real
property to:
a. file a sworn statement declaring the true value of the real property, whether taxable
or exempt; and
b. file sufficient documentary evidence supporting its claim for tax exemption.
While a real property owner’s failure to comply with Sections 202 and 206 does not
necessarily negate its tax obligation nor invalidate its legitimate claim for tax exemption,
Napocor’s omission to do so in this case can be construed as contradictory to its claim of
ownership of the subject machineries. That it assumed liability for the taxes that may be
imposed on the subject machineries similarly does not clothe it with legal title over the same.
We do not believe that the phrase "person having legal interest in the property" in Section 226
of the LGC can include an entity that assumes another person’s tax liability by contract.
2. Yes. The Supreme Court held that by providing that real property not declared and
proved as tax-exempt shall be included in the assessment roll, the above-quoted provision
implies that the local assessor has the authority to assess the property for realty taxes, and any
subsequent claim for exemption shall be allowed only when sufficient proof has been adduced
supporting the claim. Since Napocor was simply questioning the correctness of the assessment,
it should have first complied with Section 252, particularly the requirement of payment under
protest. Napocor’s failure to prove that this requirement has been complied with thus renders
its administrative protest under Section 226 of the LGC without any effect. No protest shall be
entertained unless the taxpayer first pays the tax.
It was an ill-advised move for Napocor to directly file an appeal with the LBAA under
Section 226 without first paying the tax as required under Section 252. Sections 252 and 226
64
provide successive administrative remedies to a taxpayer who questions the correctness of an
assessment. Section 226, in declaring that "any owner or person having legal interest in the
property who is not satisfied with the action of the provincial, city, or municipal assessor in the
assessment of his property may x xx appeal to the Board of Assessment Appeals x xx," should be
read in conjunction with Section 252 (d), which states that "in the event that the protest is
denied x xx, the taxpayer may avail of the remedies as provided for in Chapter 3, Title II, Book
II of the LGC [Chapter 3 refers to Assessment Appeals, which includes Sections 226 to 231].
The "action" referred to in Section 226 (in relation to a protest of real property tax assessment)
thus refers to the local assessor’s act of denying the protest filed pursuant to Section 252.
Without the action of the local assessor, the appellate authority of the LBAA cannot be invoked.
Napocor’s action before the LBAA was thus prematurely filed.
65
RE: REMEDIES FROM A DENIAL OF THE PROTEST AND REFUND.
Denis Habawel
Vs.
Court of Tax Appeals
G.R. No. 174759 September 7, 2011
FACTS:
The petitioners were the counsel of Surfield Development Corporation (Surfield), which
sought from the Office of the City Treasurer of Mandaluyong City the refund of excess realty
taxes paid from 1995 until 2000. After the City Government of Mandaluyong City denied its
claim for refund, Surfield initiated a special civil action for mandamus in the Regional Trial
Court (RTC) in Mandaluyong City, which was docketed as SCA No. MC03-2142 entitled
Surfield Development Corporation v. Hon. City Treasurer of Mandaluyong City, and Hon. City
Assessor of Mandaluyong City, and assigned to Branch 214. Surfield later amended its petition
to include its claim for refund of the excess taxes paid from 2001 until 2003.
On October 15, 2004, the RTC dismissed the petition on the ground that the period to
file the claim had already prescribed and that Surfield had failed to exhaust administrative
remedies. The RTC ruled that the grant of a tax refund was not a ministerial duty compellable
by writ of mandamus.
Undeterred, the petitioners sought reconsideration in behalf of Surfield, insisting that
the CTA had jurisdiction pursuant to Section 7(a)(3) of Republic Act No. 9282; and arguing
that the CTA First Division manifested its "lack of understanding or respect" for the doctrine of
stare decisis in not applying the ruling in Ty v. Trampe (G.R. No. 117577, December 1, 1995,
250 SCRA 500), to the effect that there was no need to file an appeal before the Local Board of
Assessment Appeals pursuant to Section 22 of Republic Act No. 7160.
On March 15, 2006, the CTA First Division denied Surfield’s motion for
reconsideration. On the issue of jurisdiction, the CTA First Division explained that the
jurisdiction conferred by Section 7(a) (3) of Republic Act No. 1125, as amended by Republic
66
Act No. 9282, referred to appeals from the decisions, orders, or resolutions of the RTCs in local
tax cases and did not include the real property tax, an ad valorem tax, the refund of excess
payment of which Surfield was claiming. Accordingly, the CTA First Division ruled that the
jurisdiction of the CTA concerning real property tax cases fell under a different section of
Republic Act No. 9282 and under a separate book of Republic Act No. 7160.
ISSUE:
Whether or not mandamus is a proper remedy when there is a denial of the protest and
refund.
HELD:
No. Since the Honorable Court simply quoted Section 7(a) (5), and it totally ignored
Section 7(a) (3), to perfunctorily find that "undoubtedly, appeals of the decisions or rulings of
the Regional Trial Court concerning real property taxes evidently do not fall within the
jurisdiction of the CTA," the undersigned counsel formed a perception that the Honorable
Court was totally unaware or ignorant of the new provision, Section 7(a) (3). Hence the
statements that it was gross ignorance of the law for the Honorable Court to have held that it
has no jurisdiction, as well as, the grossness of the Honorable Court’s ignorance of the law is
matched only by the unequivocal expression of this Honorable Court’s jurisdiction over the
instant case were an honest and frank articulation of undersigned counsel’s perception that
was influenced by its failure to understand why the Honorable Court totally ignored Section
7(a)(3) in ruling on its lack of jurisdiction.
We might have been more understanding of the milieu in which the petitioners made
the statements had they convinced us that the CTA First Division truly erred in holding itself
bereft of jurisdiction over the appeal of their client. But our review of the text of the legal
provisions involved reveals that the error was committed by them, not by the CTA First
Division. This result became immediately evident from a reading of Section 7(a)(3) and Section
7(a)(5) of Republic Act No. 9282, the former being the anchor for their claim that the CTA
really had jurisdiction, to wit:
Section 7.Jurisdiction. – The CTA shall exercise:
(a) Exclusive appellate jurisdiction to review by appeal, as herein provided:
xxx
(3) Decisions, orders or resolutions of the Regional Trial Courts in local tax cases
originally decided or resolved by them in the exercise of their original or appellate
jurisdiction; (emphasis supplied)
67
xxx
(5) Decisions of the Central Board of Assessment Appeals in the exercise of its
appellate jurisdiction over cases involving the assessment and taxation of real property
originally decided by the provincial or city board of assessment appeals; (emphasis
supplied)
xxx
As can be read and seen, Section 7(a)(3) covers only appeals of the "decisions, orders or
resolutions of the Regional Trial Courts in local tax cases originally decided or resolved by them
in the exercise of their original or appellate jurisdiction." The provision is clearly limited to
local tax disputes decided by the Regional Trial Courts. In contrast, Section 7(a)(5) grants the
CTA cognizance of appeals of the "decisions of the Central Board of Assessment Appeals in the
exercise of its appellate jurisdiction over cases involving the assessment and taxation of real
property originally decided by the provincial or city board of assessment appeals." In its
resolution of March 15, 2006, therefore, the CTA First Division forthrightly explained why,
contrary to the petitioners’ urging, Section 7(a)(3) was not applicable by clarifying that a real
property tax, being an ad valorem tax, could not be treated as a local tax.
68
RE: REDEMPTION OF PROPERTY SOLD.
CITY MAYOR, CITY TREASURER, CITY ASSESSOR, ALL OF QUEZON CITY, and ALVIN
EMERSON S. YU, Petitioners,
vs.
RIZAL COMMERCIAL BANKING CORPORATION, Respondent.
G.R. No. 171033 August 3, 2010
PERALTA, J.:
FACTS:
The spouses Naval obtained a loan from respondent Rizal Commercial Banking Corporation
(RCBC), secured by a real estate mortgage over certain properties covered by TCT Nos. N-
167986, N-167987, and N-167988. These properties were later foreclosed and the sold at
public auction with RCBC as the highest bidder. Certificates of Sale were issued in favor of
RCBC and registered on February 10, 2004. Meanwhile, an auction sale over the said
properties was conducted by petitioner City Treasurer of Quezon City due to tax delinquencies
over the same. RCBC tendered payment for all of the assessed tax delinquencies, interest, and
charges with the Office of the City Treasurer and for the subsequent issuance of the certificate
of redemption in its favor but the same were denied on the ground that the tender of payment
was made beyond the redemption period as set forth under Section 261 of R.A. 7160.
ISSUE:
Whether or not the period of redemption in a realty tax sale in Quezon City has to be reckoned
from the date of annotation of the certificate of sale pursuant to par. 7, section 14 of Quezon
City tax Ordinance No. SP-91-93 or from the date of sale pursuant to section 261 of R.A. 7160
69
RULING:
Section 261 of R.A. No. 7160 (Local Government Code) provides for a period of 1 year from the
date of sale within which the right to redeem the property should be exercised. While City
Ordinance No. SP-91, S-93, otherwise known as the Quezon City Revenue Code of 1993,
provides that the right to redeem should be exercised within 1 year from the date of the
annotation of the sale of the property at the proper registry.
To harmonize the provisions of the two laws, Section 14 (a), Paragraph 7 of City Ordinance No.
SP-91, S-93 should be construed as to define the phrase "1 year from the date of sale" as
appearing in Section 261 of R.A. No. 7160, to mean "1 year from the date of the annotation of
the sale of the property at the proper registry." Consequently, the counting of the 1 year
redemption period of property sold at public auction for its tax delinquency should be counted
from the date of annotation of the certificate of sale in the proper Register of Deeds. Applying
the foregoing to the case at bar, RCBC’s tender of payment was well within the redemption
period.
70
RE: QUESTIONING TAX SALE.
Aquino
Vs.
Quezon City
G.R. No. 137534 March 3, 2006
FACTS:
This case involves two petitions for review on certiorari involving the decisions
declaring valid the auction sales of two real properties by the Quezon City Local Government
for failure to pay real property taxes. The first case deals with a lot formerly owned by
petitioners Aquino. Petitioners withheld payment of the real property taxes as a form of protest
for the government of then President Marcos. As a result of the nonpayment, the property was
sold by the Quezon City local government, through the Treasurer's Office, at public auction to
private respondent Aida Linao, the highest bidder. Petitioners claimed that they learned of the
sale about 2 years later. They fixed as action for annulment of title, reconveyance, and damages
against the respondents. The seconds case deals with a property located In Cubao, Quezon City
in the name of Solomon Torrado. According to petitioner heirs, Torrado paid taxes on the
improvements on Lot 8 but not on the lot itself because the Treasurer's Office could not locate
the index card for that property. For failure to pay real property taxes from 1976 to 1982, the
City Treasurer sent a Notice of Intent to Sell to Torrado to his address indicated in the tax
register, which simply states as ButuanCity.
The notice was returned by reason of 'Insufficient Address. Next sent was a Notice of Sale
of Delinquent Property. This was sent to the same address and similarly returned unclaimed.
Thereafter, a public auction was held and the lot was sold to Veronica Baluyot, who mortgaged
the property to Spouses Uy who then sold it to DNX Corp for failure to pay the mortgage debt.
Also, a Notice of Sold Property was subsequently sent to Torrado which was returned
unclaimed.
ISSUE:
71
Whether or not there was a failure on the part of the Quezon City Local Government to
satisfy the notice requirements before selling the property for tax delinquency?
HELD:
Definitely, there is no more logical way to construe the whole chapter on 'Collection of
Real Property Tax (Sections 56 to 85) than to stress that while three methods are provided to
enforce collection on real property taxes, a notice of delinquency is a requirement regardless of
the method or methods chosen. It is incorrect for the respondents to claim that notice of
delinquency has limited application only to distraint of personal property. They mistakenly
lumped Section 65 exclusively with Sections 68 to 72 and, in so doing, restricted
its application from the other tax remedies. Section 65 is to be construed together with Sections
66 and78 and all three operate in reference to tax methods in general. Petitioners are correct in
insisting that two notices must be sent to the taxpayer concerned. Nevertheless, respondents
still prevail because the Court is satisfied that the two-notice requirement has been complied
with by the Treasurer's Office.
72
RE: QUESTIONING TAX SALE.
National Housing Authority

Vs.
Iloilo City
GR No. 172267 20 August 2008
FACTS:
For nonpayment of realty taxes, defendants auctioned off plaintiff NHA’s Lot No. 1150-
A [of the subdivision plan Psd-29811, being a portion of Lot No. 1150 of the Cadastral Survey
of Iloilo, situated at Barangay Monica, City of Iloilo] covered by TCT No. T-76179. Such
auction sale was allegedly done without notice to plaintiff NHA as the registered owner thereof,
in addition to the fact that the latter is a tax-exempt agency of the government. There being no
private individual who offered to bid for the property, the Defendant City of Iloilo bought the
same per Certificate of Sale under its name. After the one-year redemption period expired,
such defendant executed a Final Bill of Sale in its favor. Subsequently, defendant Rosalina
Francisco purchased the land. As a result, plaintiff’s TCT was cancelled, and a new TCT No. T-
107295 was issued in the name of defendant Francisco.
Defendants filed separate Motions to Dismiss based on the same grounds,
particularly: lack of jurisdiction and forum shopping. According to them, the lower court did
not acquire jurisdiction for failure of plaintiff to comply with the deposit mandated under
Section 267, R.A. 7160, to wit:
Sec. 267. Acting Assailing Validity of Tax Sale.—No court shall entertain any action
assailing the validity of any sale at public auction of real property or rights therein under this
Title until the taxpayer shall have deposited with the court the amount for which the real
property was sold, together with interest of two (2%) per month from the date of sale to the
time of the institution of the action. The amount so deposited shall be paid to the purchaser at
the auction sale if the deed is declared invalid but it shall be returned to the depositor if the
action fails.
73
Neither shall any court declare a sale at public auction invalid by reason of
irregularities or informalities in the proceedings unless the substantive rights of the delinquent
owner of the real property or the person having legal interest therein have been impaired.

ISSUE:
Whether or not NHA is required to make a deposit as required under Section 267 of RA
7160.
HELD:
The disputed provision on which the spotlight now beams down is rather
unsophisticated:
Sec. 267. Action Assailing Validity of Tax Sale.—No court shall entertain any action
assailing the validity of any sale at public auction of real property or rights therein under this
Title until the taxpayer shall have deposited with the court the amount for which the real
property was sold, together with interest of two percent (2%) per month from the date of sale to
the time of the institution of the action. The amount so deposited shall be paid to the purchaser
at the auction sale if the deed is declared invalid but it shall be returned to the depositor if the
action fails.
Neither shall any court declare a sale at public auction invalid by reason of
irregularities or informalities in the proceedings unless the substantive rights of the delinquent
owner of the real property or the person having legal interest therein have been impaired.

74

Real Property Taxes Case Digests 1

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Real Property Taxes Case Digests 1

Uploaded by

Copyright:

Available Formats

REAL PROPERTY TAXATION

ATTY. CHRISTINE ELVEÑA-CARANTES

1. Allied Banking vs. the Quezon City Government,

2. Caltex v. Central Board of Assessment

3. Sta. Lucia Realty & Development, Inc. vs. City of Pasig

4. Manila International Airport Authority vs. Paranaque

5. Manila International Airport Authority vs. City of Pasay

6. Lung Center of the Philippines vs. Quezon City

7. Light Rail Transit Authority vs. Central Board of Assessment

8. National Power Corporation vs. Province of Quezon

9. National Power Corporation vs. Central Board of Assessment

10. Philippine Fisheries Development vs. Central Board of Assessment

12. Testate estate of Lim vs. City of Manila

13. Government Insurance System vs. City Treasurer of Manila

14. Jaime Lopez vs. City of Manila

15. Antonio Callanta, et. al. vs. Office of the Ombudsman

16. Manila Electric Company vs. NeliaBarlis

17. Antonio Talusanvs. HerminigildoTayag

18. Hon. Franklin Drilonvs. Mayor Alfredo Lim

19. Antonio Reyes vs. Court of Appeals

20. Hagonoy Market Vendor Association vs. Municipality of Hagonoy

21. Alejandro Ty vs. Honorable Aurelio Trampe

23. Dr. Pablo Olivares vs. Mayor Joey Marquez

24. Cagayan Robina Sugar Milling Corporation vs. Court of Appeals

25. Manila Electric Cooperative vs. NeliaBarlis

26. Manila Electric Company vs. NeliaBarlis

27. Manila Electric Company vs. NeliaBarlis

28. National Power Corporation vs. Province of Quezon

29. Denis Habawelvs. Court of Tax Appeals

30. City Mayor of Quezon City vs. RCBC

31. Aquino vs. Quezon City

32. National Housing Authority vs. Iloilo City

ALLIED BANKING CORPORATION AS TRUSTEE FOR THE TRUST FUND OF COLLEGE

CALTEX (PHILIPPINES) INC., petitioner,

STA. LUCIA REALTY & DEVELOPMENT, INC.

Manila International Airport Authority

Manila International Airport Authority

Lung Center of the Philippines vs. Quezon City

LIGHT RAIL TRANSIT AUTHORITY, petitioner,

National Power Corporation

3. We disproved Napocor’s claim of control and supervision under the second

4. We relied on the Court’s rulings in Baguio v. Busuegoand Lim v. Manila. In these

National Power Corporation

Philippine Fisheries Development

TESTATE ESTATE OF CONCORDIA T. LIM, plaintiff-appellant,

RE: WHO ARE LIABLE FOR THE REAL PROPERTY TAXES.

Government Insurance System

Antonio Callanta, et. al.

Manila Electric Company

Hon. Franklin Drilon

Hagonoy Market Vendor Association

Systems Plus Computer of Caloocan City

Dr. Pablo Olivares

Cagayan Robina Sugar Milling Corporation

Manila Electric Cooperative

Manila Electric Company

Manila Electric Company

National Power Corporation

National Housing Authority

You might also like