PROVINCIAL ASSESSOR OF AGUSAN DEL SUR, PETITIONER,

VS.
FILIPINAS PALM OIL PLANTATION, INC., RESPONDENT.

Facts:
 The case involves a dispute over the assessment of real property taxes on Filipinas Palm
Oil Plantation, Inc. (Filipinas), a private organization engaged in palm oil plantation in
Agusan del Sur, Philippines.
 Filipinas has a total land area of more than 7,000 hectares of National Development
Company (NDC) lands.
 Filipinas entered into a lease contract agreement with NGPI-NGEI for the NDC lands.
 The Provincial Assessor of Agusan del Sur assessed Filipinas' properties within the
plantation area for real property taxes.
 Filipinas appealed the assessment before the Local Board of Assessment Appeals (LBAA)
on various grounds, including incorrect valuation of oil palm trees, plantation roads, and
other properties.
 The LBAA ruled in favor of Filipinas, reducing the assessed values and exempting certain
properties from taxation.
 The Provincial Assessor filed a Petition for Review before the Central Board of
Assessment Appeals (CBAA), which affirmed the LBAA's decision.
 The Provincial Assessor then filed a Petition for Review before the Court of Appeals,
which also affirmed the CBAA's decision.

Issue:
 Whether the exemption privilege of cooperatives from real property tax extends to
Filipinas as the lessee of the land owned by cooperatives.
 Whether the road equipment and mini haulers of Filipinas should be considered as real
property subject to taxation.

Ruling:
 The exemption privilege for cooperatives extends to Filipinas as the lessee of the land
owned by cooperatives.
 The road equipment and mini haulers of Filipinas should be considered as real property
subject to taxation.

Ratio:

 The Supreme Court ruled that the exemption privilege for cooperatives extends to
Filipinas as the lessee of the land owned by cooperatives.
 The Court cited the provisions of the Local Government Code which exempt real
property owned by duly registered cooperatives from payment of real property tax.

 The Court held that the exemption applies wherever the properties are situated and to
whoever uses them.

 Regarding the road equipment and mini haulers, the Supreme Court ruled that these
should be considered as real property subject to taxation.

 The Court relied on the definition of "machinery" under the Local Government Code,
which includes equipment and apparatus used to meet the needs of a particular industry
or business.

 The Court found that the road equipment and mini haulers were actually, directly, and
exclusively used by Filipinas in its palm oil production operations.

 In conclusion, the Supreme Court affirmed the decision of the Court of Appeals, with the
modification that the road equipment and mini haulers should be assessed with real
property taxes.